FinWise Bancorp(US:FINW)2023-01-26 00:05Financial Data and Key Metrics Changes - Total revenue for Q4 2022 was $23.0 million, compared to $20.5 million in Q3 2022 and $29.0 million in Q4 2021 [75] - Net income for Q4 2022 was $6.5 million, an increase from $3.7 million in Q3 2022 but a decrease from $10.1 million in Q4 2021 [16][75] - Net interest margin for Q4 2022 was 14.27%, down from 14.93% in Q3 2022 and 16.62% in Q4 2021 [25] - Return on average equity was 19.1% for Q4 2022, reflecting strong profitability measures [30] Business Line Data and Key Metrics Changes - Loan originations totaled $1.2 billion in Q4 2022, down from $1.5 billion in Q3 2022 and $2.3 billion in Q4 2021 [90] - Non-interest income was $9.8 million in Q4 2022, up from $7.5 million in Q3 2022 but slightly down from $9.1 million in Q4 2021 [17] - The provision for loan losses was $3.2 million in Q4 2022, a decrease from $4.5 million in Q3 2022 and an increase from $2.5 million in Q4 2021 [18] Market Data and Key Metrics Changes - Average interest-bearing deposits were $126.1 million in Q4 2022, compared to $104.8 million in Q3 2022 and $148 million in Q4 2021 [79] - Credit quality remained solid with non-performing loans to total loans at 0.1% at the end of Q4 2022, down from 0.25% in Q4 2021 [18] Company Strategy and Development Direction - The company plans to focus on expanding its banking-as-a-service offerings, particularly in deposits and payments, while continuing to develop its lending capabilities [60][68] - Management emphasized the importance of maintaining strong credit quality and prudent underwriting standards despite the challenging macro environment [64][70] - The company intends to remain opportunistic in hiring and investments to support growth and capitalize on future opportunities [13][89] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the potential for further economic deterioration but expressed confidence in the company's ability to navigate challenges and maximize long-term shareholder value [14][59] - The company expects continued pressure on loan originations due to macroeconomic factors but remains committed to its strategic programs and partnerships [24][31] Other Important Information - The efficiency ratio increased to 45.6% in Q4 2022, up from 42.3% in Q3 2022 and 34.3% in Q4 2021, reflecting higher expenses related to infrastructure and staffing [82] - The company repurchased 120,000 shares for approximately $1.1 million during 2022, indicating a commitment to capital return strategies [30][61] Q&A Session Summary Question: What is the outlook for loan originations and held for sale portfolio? - Management indicated that loan originations are expected to remain challenged due to macroeconomic conditions, with the held for sale portfolio likely to continue declining [46][84] Question: How does the company plan to grow its franchise in the coming years? - Management highlighted a focus on building infrastructure and expanding banking-as-a-service offerings, while maintaining strong credit quality [51][60] Question: What are the company's thoughts on capital return and share buybacks? - Management expressed a strong commitment to share buybacks, especially when trading below tangible book value, while ensuring sufficient capital for future opportunities [61][30]