Business Model & Strategy - FinWise operates a differentiated business model as a banking and payments solutions provider to fintechs, emphasizing compliance and risk management[9, 10] - The company's growth strategy focuses on a broader banking and payments offering, incorporating credit enhancement, payments (MoneyRails™), and BIN sponsorship to enhance revenue diversification[21, 22] - Strategic Program Lending (SPL) diversification has improved since 1Q22, highlighting a longer-term pattern in recent years[18, 20] Financial Performance & Portfolio - As of 1Q25, 44% of FinWise's loan portfolio consists of SBA Guaranteed and Strategic Program HFS loans, which carry lower credit risk[10, 43] - Strategic Platform Loans on the balance sheet amounted to $1387 million as of March 31, 2025, with 856% held for sale (HFS) and 144% held for investment (HFI)[16] - In 1Q25, gain on sale (net) and strategic program fees accounted for $51 million, representing 657% of non-interest income[16] Risk Management & Compliance - FinWise has a strong compliance and risk management culture, with 37% (72 out of 196) of its FTEs dedicated to IT, Compliance, Risk Management, and BSA functions as of 1Q25[11, 13] - The company maintains a well-reserved position with an ACL/Total Gross Loans HFI of 29% as of the end of 1Q25, reflecting a lower-risk portfolio[40] Capital & Efficiency - FinWise remains well-capitalized, significantly above the regulatory requirement of 9% under the Community Bank Leverage Ratio framework[10, 83] - The efficiency ratio for 1Q25 was 648%, compared to 610% in 1Q24 and 642% in 4Q24[50, 86]

Core Insights - FinWise Bancorp reported solid financial performance for the first quarter of 2025, with loan originations of $1.3 billion and net income of $3.2 million, reflecting a resilient business model despite macroeconomic uncertainties [2][4][6]. Financial Performance - Loan originations totaled $1.3 billion, consistent with the previous quarter and up from $1.1 billion year-over-year [6][8]. - Net income for the quarter was $3.2 million, an increase from $2.8 million in the prior quarter but a slight decrease from $3.3 million in the same quarter last year [6][16]. - Diluted earnings per share (EPS) were $0.23, compared to $0.20 in the previous quarter and $0.25 in the same quarter last year [6][16]. - Net interest income decreased to $14.3 million from $15.5 million in the prior quarter, but increased from $14.0 million year-over-year [6][7]. Asset Quality - Nonperforming loans decreased to $29.9 million, or 6.1% of total loans held-for-investment, down from $36.5 million (7.8%) in the previous quarter [25][26]. - The allowance for credit losses was $14.2 million, representing 2.9% of total loans held-for-investment [28]. Balance Sheet - Total assets increased to $804.1 million, up from $746.0 million in the previous quarter and $610.8 million year-over-year [17][40]. - Total deposits rose to $605.8 million, driven by increases in brokered time certificates of deposits and demand deposits [20]. Efficiency and Ratios - The efficiency ratio was 64.8%, slightly up from 64.2% in the previous quarter and 61.0% year-over-year [14]. - The leverage ratio was 18.8%, down from 20.6% in the previous quarter, but still above the well-capitalized requirement of 9.0% [22]. Non-Interest Income - Total non-interest income for the quarter was $7.8 million, an increase from $5.6 million in the prior year, driven by higher strategic program fees and other miscellaneous income [11][12]. Strategic Initiatives - The company announced a new strategic program agreement to provide lending and credit enhancement products, aiming to enhance its business model and shareholder value [4].