FinWise Bancorp(US:FINW)2024-05-14 21:15Financial Performance - Net income for Q1 2024 decreased by $0.6 million to $3.3 million, a decline of 14.1% compared to Q1 2023, primarily due to a $2.3 million increase in salaries and employee benefits [148] - Net interest income increased by $1.9 million, or 15.7%, to $14.0 million for Q1 2024, driven by growth in the loans held for investment portfolio [155] - The net interest margin decreased to 10.12% for Q1 2024 from 12.51% in Q1 2023, primarily due to a decline in yields on interest-earning assets [149] - Non-interest income rose by $0.9 million, or 20.7%, to $5.5 million for Q1 2024, mainly from higher fees and gains on loan sales [154] - Total interest income for the three months ended March 31, 2024, was $4.244 million, a decrease of $988,000 compared to the same period in 2023, primarily due to a decrease in loans held for investment [160] Asset and Loan Growth - Total assets rose by $24.6 million to $610.8 million as of March 31, 2024, mainly due to an $18.5 million increase in net loans receivable [150] - Originations increased by $0.2 billion to $1.1 billion for Q1 2024, attributed to improved market conditions [151] - Average interest-earning assets increased by $164.2 million, or 41.8%, to $556.8 million for Q1 2024 [155] - Total loans held for investment increased to $390.9 million as of March 31, 2024, from $372.2 million as of December 31, 2023 [177] - Loans receivable, net, increased by $18.541 million or 5.2% to $377.101 million as of March 31, 2024, compared to $358.560 million at the end of 2023 [168] Deposits and Liabilities - Total deposits grew by $19.263 million or 4.8% to $424.096 million as of March 31, 2024, from $404.833 million at the end of 2023 [167] - Noninterest-bearing demand deposits rose to $107,076,000, representing 25.2% of total deposits as of March 31, 2024, compared to $95,486,000 or 23.6% as of December 31, 2023 [220] - Total liabilities increased by 4.0% to $448.4 million as of March 31, 2024, from $431.2 million as of December 31, 2023, mainly due to an increase in noninterest-bearing deposits [218] Credit Quality and Losses - Provision for credit losses increased to $3.2 million for the three months ended March 31, 2024, compared to $2.7 million in the same period of 2023, attributed to adjustments related to nonperforming assets [162] - The company reported a total of $26.0 million in nonperforming assets as of March 31, 2024, down from $27.1 million on December 31, 2023, indicating a decrease in nonperforming assets [188] - The allowance for credit losses (ACL) decreased to $12,632,000 as of March 31, 2024, from $12,888,000 as of December 31, 2023, reflecting a reduction of 2.0% [201] - The average net charge-offs for Strategic Program loans was 56.9% for the three months ended March 31, 2024, compared to 47.1% for the same period in 2023 [210] Strategic Initiatives - The company continues to focus on expanding its loan origination through strategic relationships and enhancing its analytics platform, FinView™ [145] - The company has diversified its loan portfolio focusing on industries such as e-commerce and healthcare services to withstand economic shifts [177] - The company intends to leverage online and mobile banking to meet customer needs without expanding its physical branch network [226] Equity and Ratios - Shareholders' equity increased by $7.4 million to $162.5 million at March 31, 2024, compared to $155.1 million at December 31, 2023 [230] - The return on average equity was 8.4% for the three months ended March 31, 2024, down from 11.1% for the same period in 2023 [231] - The leverage ratio under the Community Bank Leverage Ratio framework was 20.6% as of March 31, 2024, well above the required 9.0% [236]