FinWise Bancorp (NASDAQ: FINW) (“FinWise” or the “Company”), parent
company of FinWise Bank (the “Bank”), today announced results for
the quarter ended September 30, 2024.
Third Quarter 2024 Highlights
- Loan originations increased to $1.4 billion, compared to
$1.2 billion for the quarter ended June 30, 2024, and
$1.1 billion for the third quarter of the prior year
- Net interest income was $14.8 million, compared to $14.6
million for the quarter ended June 30, 2024, and $14.4 million
for the third quarter of the prior year
- Net income was $3.5 million, compared to $3.2 million for the
quarter ended June 30, 2024, and $4.8 million for the third
quarter of the prior year
- Diluted earnings per share (“EPS”) were $0.25 for the quarter,
compared to $0.24 for the quarter ended June 30, 2024, and
$0.37 for the third quarter of the prior year
- Efficiency ratio1 was 67.5%, compared to 66.3% for the quarter
ended June 30, 2024, and 50.4% for the third quarter of the
prior year
- Annualized return on average equity was 8.3%, compared to 7.9%
for the quarter ended June 30, 2024, and 12.8% for the third
quarter of the prior year
- The recorded balances of nonperforming loans were $30.6 million
as of September 30, 2024, compared to $27.9 million as of
June 30, 2024, and $10.7 million as of September 30, 2023. The
balance of nonperforming loans guaranteed by the Small Business
Administration (“SBA”) was $17.8 million, $16.0 million, and
$4.7 million as of September 30, 2024, June 30,
2024, and September 30, 2023, respectively
1 See “Reconciliation of Non-GAAP to GAAP Financial Measures”
for a reconciliation of this non-GAAP measure.
“Our results during the third quarter reflect the resiliency of
our existing business as well as the actions we’ve taken to enhance
long-term growth,” said Kent Landvatter, CEO of FinWise. “We saw a
notable step-up in loan originations and generated solid revenue
coupled with a deceleration of our expense growth. Additionally, we
continued to gain traction with new strategic programs, as we
announced one new lending program in the quarter, which brings the
total new lending programs to three so far this year. Overall, I am
pleased with the operational performance of our company and I am
excited about the outlook. We will remain laser focused on
continuing to grow our business and will strive to continue to
deliver long-term value for all our stakeholders.”
Selected Financial and Other Data
| ($ in thousands, except per
share amounts and FTEs) |
As of and for the Three Months Ended |
| |
9/30/2024 |
|
6/30/2024 |
|
9/30/2023 |
|
Amount of loans originated |
$ |
1,448,251 |
|
|
$ |
1,170,904 |
|
|
$ |
1,061,327 |
|
| Net income |
$ |
3,454 |
|
|
$ |
3,180 |
|
|
$ |
4,804 |
|
| Diluted EPS |
$ |
0.25 |
|
|
$ |
0.24 |
|
|
$ |
0.37 |
|
| Return on average assets |
|
2.1 |
% |
|
|
2.1 |
% |
|
|
3.7 |
% |
| Return on average equity |
|
8.3 |
% |
|
|
7.9 |
% |
|
|
12.8 |
% |
| Yield on loans |
|
14.16 |
% |
|
|
14.89 |
% |
|
|
17.40 |
% |
| Cost of interest-bearing
deposits |
|
4.85 |
% |
|
|
4.80 |
% |
|
|
4.34 |
% |
| Net interest margin |
|
9.70 |
% |
|
|
10.31 |
% |
|
|
11.77 |
% |
| Efficiency ratio(1) |
|
67.5 |
% |
|
|
66.3 |
% |
|
|
50.4 |
% |
| Tangible book value per
share(2) |
$ |
12.90 |
|
|
$ |
12.61 |
|
|
$ |
12.04 |
|
| Tangible shareholders’ equity
to tangible assets(2) |
|
24.9 |
% |
|
|
26.8 |
% |
|
|
27.1 |
% |
| Leverage ratio (Bank under
CBLR) |
|
20.3 |
% |
|
|
20.8 |
% |
|
|
22.1 |
% |
| Full-time equivalent
(“FTEs”) |
|
194 |
|
|
|
191 |
|
|
|
158 |
|
(1) This measure is not a measure recognized under United States
generally accepted accounting principles, or GAAP, and is therefore
considered to be a non-GAAP financial measure. See “Reconciliation
of Non-GAAP to GAAP Financial Measures” for a reconciliation of
this measure to its most comparable GAAP measure. The efficiency
ratio is defined as total non-interest expense divided by the sum
of net interest income and non-interest income. The Company
believes this measure is important as an indicator of productivity
because it shows the amount of revenue generated for each dollar
spent.(2) Tangible shareholders’ equity to tangible assets is
considered a non-GAAP financial measure. Tangible shareholders’
equity is defined as total shareholders’ equity less goodwill and
other intangible assets. The most directly comparable GAAP
financial measure is total shareholder’s equity to total assets.
The Company had no goodwill or other intangible assets at the end
of any period indicated. The Company has not considered loan
servicing rights or loan trailing fee assets as intangible assets
for purposes of this calculation. As a result, tangible
shareholders’ equity is the same as total shareholders’ equity at
the end of each of the periods indicated.
Net Interest IncomeNet interest income was
$14.8 million for the third quarter of 2024, compared to $14.6
million for the prior quarter and $14.4 million for the prior year
period. The increase from the prior quarter was primarily due to
average balance increases in the loans held-for-sale and loans held
for investment portfolios and was partially offset by yield
decreases in both the loans held-for-sale and loans held for
investment portfolios. The increase from the prior year period was
primarily due to increases in the average balances of the Company’s
loans held-for-sale and loans held for investment portfolios and
was partially offset by yield decreases on those same portfolios as
well as increased rates and volumes on the certificate of deposit
balances. Third quarter 2024 net interest income includes a $0.5
million one-time decrease for accrued interest not previously
reversed at the time loans were deemed nonperforming.
Loan originations totaled $1.4 billion for the third quarter of
2024, compared to $1.2 billion for the prior quarter and
$1.1 billion for the prior year period. Originations through
the first three weeks of October 2024 are tracking at a pace
modestly lower than third quarter 2024 originations, which included
an expected seasonal increase from the Company’s student loan
strategic program.
Net interest margin for the third quarter of 2024 was 9.70%,
compared to 10.31% for the prior quarter and 11.77% for the prior
year period. The decrease in net interest margin from the prior
quarter is primarily attributable to the Company’s strategy to
reduce the average credit risk in the loan portfolio by increasing
its investment in higher quality but lower yielding loans and the
previously described one-time decrease in net interest income. The
net interest margin decrease from the prior year period resulted
primarily from the Company’s strategy to reduce average credit risk
in the portfolio combined with the increased cost of funds as the
Bank competed in the national market for funds to support the asset
growth.
Provision for Credit LossesThe Company’s
provision for credit losses was $2.2 million for the third quarter
of 2024, compared to $2.4 million for the prior quarter and $3.1
million for the prior year period. The provision for credit losses
decreased when compared to the prior quarter due primarily to the
Company’s periodic assessment of the qualitative factors resulting
in the removal of the qualitative factor related to COVID,
partially offset by an increase in other qualitative factors and
slightly higher charge-offs. The decrease from the prior year
period was primarily related to qualitative factors which had been
adjusted upward in the third quarter of 2023 due to an increase in
special mention, non-accrual and nonperforming assets primarily
related to the SBA portfolio.
Non-interest Income
| |
Three Months Ended |
| ($ in thousands) |
9/30/2024 |
|
6/30/2024 |
|
9/30/2023 |
| Non-interest income |
|
|
|
|
|
|
Strategic Program fees |
$ |
4,862 |
|
|
$ |
4,035 |
|
|
$ |
3,945 |
|
|
Gain on sale of loans |
|
393 |
|
|
|
356 |
|
|
|
357 |
|
|
SBA loan servicing fees and servicing asset amortization |
|
87 |
|
|
|
204 |
|
|
|
(138 |
) |
|
Change in fair value on investment in BFG |
|
(100 |
) |
|
|
(200 |
) |
|
|
(500 |
) |
|
Other miscellaneous income |
|
812 |
|
|
|
771 |
|
|
|
1,228 |
|
| Total non-interest income |
$ |
6,054 |
|
|
$ |
5,166 |
|
|
$ |
4,892 |
|
The increase in non-interest income from the prior quarter was
primarily due to an increase in originations related to the
Company’s Strategic Programs. The increase in non-interest income
from the prior year period was primarily due to increased fees
associated with originations of Strategic Program loans, partially
offset by a decrease in other miscellaneous income related to a
gain on the resolution of a forbearance agreement in the Company’s
SBA lending program recognized in the third quarter of 2023.
Non-interest Expense
| |
Three Months Ended |
| ($ in thousands) |
9/30/2024 |
|
6/30/2024 |
|
9/30/2023 |
| Non-interest expense |
|
|
|
|
|
|
Salaries and employee benefits |
$ |
9,659 |
|
$ |
8,609 |
|
$ |
6,416 |
|
Professional services |
|
1,331 |
|
|
1,282 |
|
|
750 |
|
Occupancy and equipment expenses |
|
1,046 |
|
|
1,121 |
|
|
958 |
|
Other operating expenses |
|
2,013 |
|
|
2,206 |
|
|
1,609 |
| Total non-interest
expense |
$ |
14,048 |
|
$ |
13,218 |
|
$ |
9,733 |
The increase in non-interest expense from the prior quarter was
primarily due to an increase in salaries and employee benefits,
including a catch-up in bonus accrual expense of $0.4 million to
reflect updated performance award estimates, a full quarter of
amortization of the second quarter deferred compensation awards,
and a full quarter of compensation and benefits for employees hired
during the second quarter. The increase in non-interest expense
from the prior year period was primarily due to an increase in
salaries and employee benefits due mainly to increasing headcount
and increases in professional services and other operating expenses
driven by increased spending to support the growth in the Company’s
business infrastructure.Reflecting the expenses incurred to develop
the Company’s business infrastructure, the Company’s efficiency
ratio was 67.5% for the third quarter of 2024, compared to 66.3%
for the prior quarter and 50.4% for the prior year period. As a
result of the infrastructure build, the Company anticipates the
efficiency ratio will remain elevated until the Company begins to
realize the revenues associated with the new programs being
developed.
Tax RateThe Company’s effective tax rate was
25.1% for the third quarter of 2024, compared to 23.9% for the
prior quarter and 26.1% for the prior year period. The increase
from the prior quarter was due primarily to more favorable
resolution of historical state tax matters during the second
quarter of 2024. The decrease from the prior year period was
primarily due to a reduction in permanent differences impacting
income tax expense.
Net IncomeNet income was $3.5 million for the
third quarter of 2024, compared to $3.2 million for the prior
quarter and $4.8 million for the prior year period. The changes in
net income for the three months ended September 30, 2024 compared
to the prior quarter and prior year period are the result of the
factors discussed above.
Balance Sheet The Company’s total assets were
$683.0 million as of September 30, 2024, an increase from
$617.8 million as of June 30, 2024 and $555.1 million as of
September 30, 2023. The increase in total assets from
June 30, 2024 was primarily due to an increase of $30.5
million in investment securities available-for-sale and continued
growth in the Company’s loans held for investment, net, and loans
held-for-sale portfolios of $19.6 million and $17.5 million,
respectively. The increase in total assets compared to
September 30, 2023 was primarily due to increases in the
Company’s loans held for investment, net, and loans held-for-sale
portfolios of $93.9 million and $38.3 million, respectively, as
well as an increase in investment securities available-for-sale of
$30.5 million, partially offset by a decrease of $48.3 million in
interest-bearing cash deposits.
The following table shows the gross loans held for investment
balances as of the dates indicated:
| |
9/30/2024 |
|
6/30/2024 |
|
9/30/2023 |
| ($ in thousands) |
Amount |
|
% of total loans |
|
Amount |
|
% of total loans |
|
Amount |
|
% of total loans |
|
SBA |
$ |
251,439 |
|
57.9 |
% |
|
$ |
249,281 |
|
60.2 |
% |
|
$ |
219,305 |
|
64.9 |
% |
|
Commercial leases |
|
64,277 |
|
14.8 |
% |
|
|
56,529 |
|
13.7 |
% |
|
|
31,466 |
|
9.3 |
% |
|
Commercial, non-real estate |
|
3,025 |
|
0.7 |
% |
|
|
1,999 |
|
0.5 |
% |
|
|
2,578 |
|
0.8 |
% |
|
Residential real estate |
|
41,391 |
|
9.5 |
% |
|
|
42,317 |
|
10.2 |
% |
|
|
34,891 |
|
10.3 |
% |
|
Strategic Program loans |
|
19,409 |
|
4.5 |
% |
|
|
17,861 |
|
4.3 |
% |
|
|
20,040 |
|
5.9 |
% |
|
Commercial real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
Owner occupied |
|
32,480 |
|
7.5 |
% |
|
|
28,340 |
|
6.8 |
% |
|
|
17,092 |
|
5.1 |
% |
|
Non-owner occupied |
|
2,736 |
|
0.7 |
% |
|
|
2,134 |
|
0.5 |
% |
|
|
4,588 |
|
1.4 |
% |
|
Consumer |
|
19,206 |
|
4.4 |
% |
|
|
15,880 |
|
3.8 |
% |
|
|
7,675 |
|
2.3 |
% |
| Total period end loans |
$ |
433,963 |
|
100.0 |
% |
|
$ |
414,341 |
|
100.0 |
% |
|
$ |
337,635 |
|
100.0 |
% |
Note: SBA loans as of September 30, 2024, June 30,
2024 and September 30, 2023 include $156.3 million, $147.8
million and $112.5 million, respectively, of SBA 7(a) loan balances
that are guaranteed by the SBA. The held for investment balance on
Strategic Program loans with annual interest rates below 36% as of
September 30, 2024, June 30, 2024 and September 30,
2023 was $3.2 million, $2.6 million and $4.4 million,
respectively.
Total gross loans held for investment as of September 30,
2024 were $434.0 million, an increase from $414.3 million and
$337.6 million as of June 30, 2024 and September 30,
2023, respectively. The increase compared to June 30, 2024 was
primarily due to increases in the commercial leases, owner occupied
commercial real estate, consumer and SBA loan portfolios. The
increase compared to September 30, 2023 was primarily due to
increases in the commercial leases, SBA, commercial real estate
owner occupied, and consumer loan portfolios.
The following table shows the Company’s deposit composition as
of the dates indicated:
| |
As of |
|
|
9/30/2024 |
|
6/30/2024 |
|
9/30/2023 |
| ($ in thousands) |
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Noninterest-bearing demand deposits |
$ |
142,785 |
|
29.2 |
% |
|
$ |
107,083 |
|
24.9 |
% |
|
$ |
94,268 |
|
24.4 |
% |
| Interest-bearing
deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
Demand |
|
58,984 |
|
12.1 |
% |
|
|
48,319 |
|
11.3 |
% |
|
|
87,753 |
|
22.7 |
% |
|
Savings |
|
9,592 |
|
1.9 |
% |
|
|
9,746 |
|
2.3 |
% |
|
|
8,738 |
|
2.3 |
% |
|
Money market |
|
15,027 |
|
3.1 |
% |
|
|
9,788 |
|
2.3 |
% |
|
|
15,450 |
|
3.9 |
% |
|
Time certificates of deposit |
|
262,271 |
|
53.7 |
% |
|
|
254,259 |
|
59.2 |
% |
|
|
180,544 |
|
46.7 |
% |
| Total period end deposits |
$ |
488,659 |
|
100.0 |
% |
|
$ |
429,195 |
|
100.0 |
% |
|
$ |
386,753 |
|
100.0 |
% |
The increase in total deposits from June 30, 2024 was
driven primarily by increases in noninterest-bearing demand
deposits and interest-bearing demand deposits and brokered time
certificates of deposits. The increase in total deposits from
September 30, 2023 was driven primarily by an increase in
brokered time certificate of deposits and noninterest-bearing
demand deposits. As of September 30, 2024, 35.4% of deposits
at the Bank were uninsured, compared to 31.3% as of June 30,
2024, and 31.7% as of September 30, 2023. Uninsured deposits
at the Bank as of September 30, 2024 includes 8.5% of total
deposits contractually required to be maintained at the Bank
pursuant to the Company’s Strategic Program agreements and an
additional 9.4% of total deposits associated with the parent
holding company or the Bank.
Total shareholders’ equity as of September 30, 2024
increased $4.6 million to $170.4 million from $165.8 million at
June 30, 2024. Compared to September 30, 2023, total
shareholders’ equity increased by $20.0 million from $150.4
million. The increase from June 30, 2024 was primarily due to
the Company’s net income. The increase from September 30, 2023
was primarily due to the Company’s net income as well as the
additional capital issued in exchange for the Company’s increased
ownership in BFG, partially offset by the repurchase of common
stock under the Company’s share repurchase program.
Bank Regulatory Capital RatiosThe following
table presents the leverage ratios for the Bank as of the dates
indicated as determined under the Community Bank Leverage Ratio
Framework of the Federal Deposit Insurance Corporation:
| |
As of |
|
|
|
Capital Ratios |
9/30/2024 |
|
6/30/2024 |
|
9/30/2023 |
|
Well-Capitalized Requirement |
|
Leverage ratio |
20.3% |
|
20.8% |
|
22.1% |
|
9.0% |
The leverage ratio decrease from the prior quarter resulted
primarily from assets growing at a faster pace than earnings
generated by operations. The leverage ratio decrease from the prior
year period resulted primarily from the growth in the loan
portfolio. The Bank’s capital levels remain significantly above
well-capitalized guidelines as of September 30, 2024.
Share Repurchase ProgramSince the share
repurchase program’s inception in March 2024 through
September 30, 2024, the Company has repurchased a total of
44,608 shares for $0.5 million. There were no shares repurchased
during the third quarter of 2024.
Asset QualityThe recorded
balances of nonperforming loans were $30.6 million, or 7.1% of
total loans held for investment, as of September 30, 2024,
compared to $27.9 million, or 6.5% of total loans held for
investment, as of June 30, 2024 and $10.7 million, or 3.2% of
total loans held for investment, as of September 30, 2023. The
balances of nonperforming loans guaranteed by the SBA were $17.8
million, $16.0 million, and $4.7 million as of
September 30, 2024, June 30, 2024 and September 30,
2023, respectively. The increase in nonperforming loans from the
prior quarter was primarily attributable to two SBA 7(a) loans
totaling $5.7 million classified as nonperforming during the third
quarter of 2024 of which $4.4 million was guaranteed by the SBA.
The increase in nonperforming loans from the prior year period was
primarily attributable to loans in the SBA 7(a) loan portfolio
being classified as non-accrual mainly due to the negative impact
of elevated interest rates on the Company’s small business
borrowers. The Company’s allowance for credit losses to total loans
held for investment was 2.9% as of September 30, 2024 compared
to 3.2% as of June 30, 2024 and 3.8% as of September 30,
2023. The decrease in the ratio from the prior quarter and prior
year periods was primarily due to the Company’s increased retention
of most of the originated guaranteed portions in its SBA 7(a) loan
program as well as removal of the qualitative factor related to
COVID and its subsequent implications due to improving economic
conditions.
The Company’s net charge-offs were $2.4 million, $1.9 million
and $2.2 million for the three months ended September 30,
2024, June 30, 2024, and September 30, 2023,
respectively. The increase from the prior quarter is primarily due
to increased net charge-offs in the Strategic Program loans
portfolio. The increase from the prior year period is primarily due
to resolution of a large small business recovery that reduced net
charge-offs in the third quarter of 2023.
The following table presents a summary of changes in the
allowance for credit losses and asset quality ratios for the
periods indicated:
|
|
Three Months Ended |
| ($ in thousands) |
9/30/2024 |
|
6/30/2024 |
|
9/30/2023 |
| Allowance for credit
losses: |
|
|
|
|
|
|
Beginning balance |
$ |
13,127 |
|
|
$ |
12,632 |
|
|
$ |
12,321 |
|
| Provision for credit
losses(1) |
|
1,944 |
|
|
|
2,393 |
|
|
|
2,910 |
|
| Charge
offs |
|
|
|
|
|
|
Residential real estate |
|
(27 |
) |
|
|
— |
|
|
|
— |
|
|
Commercial real estate |
|
|
|
|
|
|
Owner occupied |
|
(103 |
) |
|
|
— |
|
|
|
(31 |
) |
|
Non-owner occupied |
|
(221 |
) |
|
|
— |
|
|
|
— |
|
|
Commercial and industrial |
|
(96 |
) |
|
|
(184 |
) |
|
|
(107 |
) |
|
Consumer |
|
(15 |
) |
|
|
(18 |
) |
|
|
(28 |
) |
|
Lease financing receivables |
|
(113 |
) |
|
|
(69 |
) |
|
|
— |
|
|
Strategic Program loans |
|
(2,360 |
) |
|
|
(1,962 |
) |
|
|
(2,748 |
) |
|
Recoveries |
|
|
|
|
|
|
Residential real estate |
|
3 |
|
|
|
3 |
|
|
|
3 |
|
|
Commercial real estate |
|
|
|
|
|
|
Owner occupied |
|
219 |
|
|
|
— |
|
|
|
389 |
|
|
Commercial and industrial |
|
2 |
|
|
|
15 |
|
|
|
18 |
|
|
Consumer |
|
4 |
|
|
|
1 |
|
|
|
2 |
|
|
Lease financing receivables |
|
8 |
|
|
|
7 |
|
|
|
— |
|
|
Strategic Program loans |
|
289 |
|
|
|
309 |
|
|
|
257 |
|
| Ending Balance |
$ |
12,661 |
|
|
$ |
13,127 |
|
|
$ |
12,986 |
|
|
|
|
|
|
|
|
| Asset Quality
Ratios |
As of and For the Three Months Ended |
| ($ in thousands, annualized
ratios) |
9/30/2024 |
|
6/30/2024 |
|
9/30/2023 |
| Nonperforming loans(2) |
$ |
30,648 |
|
|
$ |
27,907 |
|
|
$ |
10,703 |
|
| Nonperforming loans to total
loans held for investment |
|
7.1 |
% |
|
|
6.5 |
% |
|
|
3.2 |
% |
| Net charge offs to average
loans held for investment |
|
2.3 |
% |
|
|
1.9 |
% |
|
|
2.8 |
% |
| Allowance for credit losses to
loans held for investment |
|
2.9 |
% |
|
|
3.2 |
% |
|
|
3.8 |
% |
|
Net charge offs |
$ |
2,409 |
|
|
$ |
1,898 |
|
|
$ |
2,245 |
|
(1) Excludes the provision for unfunded commitments.(2)
Nonperforming loans as of September 30, 2024, June 30,
2024, and September 30, 2023 include $17.8 million, $16.0
million, and $4.7 million, respectively, of SBA 7(a) loan
balances that are guaranteed by the SBA.
Webcast and Conference Call InformationFinWise
will host a conference call today at 5:30 PM ET to discuss its
financial results for the third quarter of 2024. A simultaneous
audio webcast of the conference call will be available at
https://investors.finwisebancorp.com/.
The dial-in number for the conference call is (877) 423-9813
(toll-free) or (201) 689-8573 (international). The conference ID is
13748730. Please dial the number 10 minutes prior to the scheduled
start time.
A webcast replay of the call will be available at
investors.finwisebancorp.com for six months following the call.
Website InformationThe Company intends to use
its website, www.finwisebancorp.com, as a means of disclosing
material non-public information and for complying with its
disclosure obligations under Regulation FD. Such disclosures will
be included in the Company’s website’s Investor Relations section.
Accordingly, investors should monitor the Investor Relations
portion of the Company’s website, in addition to following its
press releases, filings with the Securities and Exchange Commission
(“SEC”), public conference calls, and webcasts. To subscribe to the
Company’s e-mail alert service, please click the “Email Alerts”
link in the Investor Relations section of its website and submit
your email address. The information contained in, or that may be
accessed through, the Company’s website is not incorporated by
reference into or a part of this document or any other report or
document it files with or furnishes to the SEC, and any references
to the Company’s website are intended to be inactive textual
references only.
About FinWise BancorpFinWise Bancorp is a Utah
bank holding company headquartered in Murray, Utah which wholly
owns FinWise Bank, a Utah chartered state bank, and FinWise
Investment LLC (together “FinWise”). FinWise provides Banking and
Payments solutions to fintech brands. 2024 is a key expansion year
for the company as it expands and diversifies its business model by
launching and incorporating Payments Hub and BIN Sponsorship
offerings into its current platforms. FinWise’s existing Strategic
Program Lending business, conducted through scalable API-driven
infrastructure, powers deposit, lending and payments programs for
leading fintech brands. In addition, FinWise manages other Lending
programs such as SBA 7(a), Owner Occupied Real Estate, and Leasing,
which provides flexibility for disciplined balance sheet growth.
Through its compliance oversight and risk management-first culture,
the Company is well positioned to guide fintechs through a rigorous
process to facilitate regulatory compliance. For more information
about FinWise visit https://investors.finwisebancorp.com.
Contactsinvestors@finwisebank.commedia@finwisebank.com
"Safe Harbor" Statement Under the Private Securities
Litigation Reform Act of 1995This release contains
forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements reflect the Company’s current
views with respect to, among other things, future events and its
financial performance. These statements are often, but not always,
made through the use of words or phrases such as “may,” “might,”
“should,” “could,” “predict,” “potential,” “believe,” “will likely
result,” “expect,” “continue,” “will,” “anticipate,” “seek,”
“estimate,” “intend,” “plan,” “project,” “projection,” “forecast,”
“budget,” “goal,” “target,” “would,” “aim” and “outlook,” or the
negative version of those words or other comparable words or
phrases of a future or forward-looking nature. These
forward-looking statements are not historical facts, and are based
on current expectations, estimates and projections about the
Company’s industry and management’s beliefs and certain assumptions
made by management, many of which, by their nature, are inherently
uncertain and beyond the Company’s control. The inclusion of these
forward-looking statements should not be regarded as a
representation by the Company or any other person that such
expectations, estimates and projections will be achieved.
Accordingly, the Company cautions you that any such forward-looking
statements are not guarantees of future performance and are subject
to risks, assumptions and uncertainties that are difficult to
predict. Although the Company believes that the expectations
reflected in these forward-looking statements are reasonable as of
the date made, actual results may prove to be materially different
from the results expressed or implied by the forward-looking
statements.
There are or will be important factors that could cause the
Company’s actual results to differ materially from those indicated
in these forward-looking statements, including, but not limited to,
the following: (a) the success of the financial technology
industry, as well as the continued evolution of the regulation of
this industry; (b) the ability of the Company’s Strategic Program
or Fintech Banking and Payments Solutions service providers to
comply with regulatory regimes, and the Company’s ability to
adequately oversee and monitor its Strategic Program and Fintech
Banking and Payments Solutions service providers; (c) the Company’s
ability to maintain and grow its relationships with its service
providers; (d) changes in the laws, rules, regulations,
interpretations or policies relating to financial institutions,
accounting, tax, trade, monetary and fiscal matters, including the
application of interest rate caps or maximums; (e) the Company’s
ability to keep pace with rapid technological changes in the
industry or implement new technology effectively; (f) system
failure or cybersecurity breaches of the Company’s network
security; (g) potential exposure to fraud, negligence, computer
theft and cyber-crime and other disruptions in the Company’s
computer systems relating to its development and use of new
technology platforms; (h) the Company’s reliance on third-party
service providers for core systems support, informational website
hosting, internet services, online account opening and other
processing services; (i) general economic and business conditions,
either nationally or in the Company’s market areas; (j) increased
national or regional competition in the financial services
industry; (k) the Company’s ability to measure and manage its
credit risk effectively and the potential deterioration of the
business and economic conditions in the Company’s primary market
areas; (l) the adequacy of the Company’s risk management framework;
(m) the adequacy of the Company’s allowance for credit losses
(“ACL”); (n) the financial soundness of other financial
institutions; (o) new lines of business or new products and
services; (p) changes in Small Business Administration (“SBA”)
rules, regulations and loan products, including specifically the
Section 7(a) program or changes to the status of the Bank as an SBA
Preferred Lender; (q) the value of collateral securing the
Company’s loans; (r) the Company’s levels of nonperforming assets;
(s) losses from loan defaults; (t) the Company’s ability to protect
its intellectual property and the risks it faces with respect to
claims and litigation initiated against the Company; (u) the
Company’s ability to implement its growth strategy; (v) the
Company’s ability to launch new products or services successfully;
(w) the concentration of the Company’s lending and depositor
relationships through Strategic Programs in the financial
technology industry generally; (x) interest-rate and liquidity
risks; (y) the effectiveness of the Company’s internal control over
financial reporting and its ability to remediate any future
material weakness in its internal control over financial reporting;
(z) dependence on the Company’s management team and changes in
management composition; (aa) the sufficiency of the Company’s
capital; (bb) compliance with laws and regulations, supervisory
actions, the Dodd-Frank Act, capital requirements, the Bank Secrecy
Act and other anti-money laundering laws, predatory lending laws,
and other statutes and regulations; (cc) results of examinations of
the Company by its regulators; (dd) the Company’s involvement from
time to time in legal proceedings; (ee) natural disasters and
adverse weather, acts of terrorism, pandemics, an outbreak of
hostilities or other international or domestic calamities, and
other matters beyond the Company’s control; (ff) future equity and
debt issuances; (gg) that the anticipated benefits of new lines of
business that the Company may enter or investments or acquisitions
the Company may make are not realized within the expected time
frame or at all as a result of such things as the strength or
weakness of the economy and competitive factors in the areas where
the Company and such other businesses operate; and (hh) other
factors listed from time to time in the Company’s filings with the
Securities and Exchange Commission, including, without limitation,
its Annual Report on Form 10-K for the year ended December 31,
2023 and subsequent reports on Form 10-Q and Form 8-K.
The timing and amount of purchases under the Company’s share
repurchase program will be determined by the Share Repurchase
Committee based upon market conditions and other factors. Purchases
may be made pursuant to a program adopted under Rule 10b5-1 under
the Securities Exchange Act of 1934, as amended. The program does
not require the Company to purchase any specific number or amount
of shares and may be suspended or reinstated at any time in the
Company’s discretion and without notice.
Any forward-looking statement speaks only as of the date of this
release, and the Company does not undertake any obligation to
publicly update or review any forward-looking statement, whether
because of new information, future developments or otherwise,
except as required by law. New risks and uncertainties may emerge
from time to time, and it is not possible for the Company to
predict their occurrence. In addition, the Company cannot assess
the impact of each risk and uncertainty on its business or the
extent to which any risk or uncertainty, or combination of risks
and uncertainties, may cause actual results to differ materially
from those contained in any forward-looking
statements.
|
|
|
FINWISE BANCORP CONSOLIDATED STATEMENTS OF
FINANCIAL CONDITION($ in thousands;
Unaudited) |
| |
| |
As of |
| |
9/30/2024 |
|
6/30/2024 |
|
9/30/2023 |
| ASSETS |
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
|
Cash and due from banks |
$ |
7,705 |
|
$ |
5,158 |
|
$ |
379 |
|
Interest-bearing deposits |
|
78,063 |
|
|
83,851 |
|
|
126,392 |
|
Total cash and cash equivalents |
|
85,768 |
|
|
89,009 |
|
|
126,771 |
|
Investment securities available-for-sale, at fair value |
|
30,472 |
|
|
— |
|
|
— |
|
Investment securities held-to-maturity, at cost |
|
13,270 |
|
|
13,942 |
|
|
15,840 |
|
Investment in Federal Home Loan Bank (“FHLB”) stock, at cost |
|
349 |
|
|
349 |
|
|
476 |
|
Strategic Program loans held-for-sale, at lower of cost or fair
value |
|
84,000 |
|
|
66,542 |
|
|
45,710 |
|
Loans held for investment, net |
|
418,065 |
|
|
398,512 |
|
|
324,197 |
|
Premises and equipment, net |
|
17,099 |
|
|
15,665 |
|
|
14,181 |
|
Accrued interest receivable |
|
3,098 |
|
|
3,390 |
|
|
2,711 |
|
SBA servicing asset, net |
|
3,261 |
|
|
3,689 |
|
|
4,398 |
|
Investment in Business Funding Group (“BFG”), at fair value |
|
7,900 |
|
|
8,000 |
|
|
4,000 |
|
Operating lease right-of-use (“ROU”) assets |
|
3,735 |
|
|
3,913 |
|
|
4,481 |
|
Income tax receivable, net |
|
3,317 |
|
|
2,103 |
|
|
1,134 |
|
Other assets |
|
12,697 |
|
|
12,706 |
|
|
11,157 |
| Total
assets |
$ |
683,031 |
|
$ |
617,820 |
|
$ |
555,056 |
|
|
|
|
|
|
|
| LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
Noninterest-bearing |
$ |
142,785 |
|
$ |
107,083 |
|
$ |
94,268 |
|
Interest-bearing |
|
345,874 |
|
|
322,112 |
|
|
292,485 |
|
Total deposits |
|
488,659 |
|
|
429,195 |
|
|
386,753 |
|
Accrued interest payable |
|
647 |
|
|
601 |
|
|
581 |
|
Deferred taxes, net |
|
1,036 |
|
|
1,154 |
|
|
234 |
|
PPP Liquidity Facility |
|
106 |
|
|
127 |
|
|
221 |
|
Operating lease liabilities |
|
5,542 |
|
|
5,788 |
|
|
6,545 |
|
Other liabilities |
|
16,671 |
|
|
15,159 |
|
|
10,320 |
| Total
liabilities |
|
512,661 |
|
|
452,024 |
|
|
404,654 |
| |
|
|
|
|
|
| Shareholders’
equity |
|
|
|
|
|
|
Common stock |
|
13 |
|
|
13 |
|
|
12 |
|
Additional paid-in-capital |
|
56,214 |
|
|
55,441 |
|
|
50,703 |
|
Retained earnings |
|
113,801 |
|
|
110,342 |
|
|
99,687 |
|
Accumulated other comprehensive income, net of tax |
|
342 |
|
|
— |
|
|
— |
| Total shareholders’
equity |
|
170,370 |
|
|
165,796 |
|
|
150,402 |
| Total liabilities and
shareholders’ equity |
$ |
683,031 |
|
$ |
617,820 |
|
$ |
555,056 |
|
FINWISE BANCORPCONSOLIDATED STATEMENTS OF
INCOME ($ in thousands, except per share amounts;
Unaudited) |
| |
| |
Three Months Ended |
| |
9/30/2024 |
|
6/30/2024 |
|
9/30/2023 |
| Interest
income |
|
|
|
|
|
|
Interest and fees on loans |
$ |
17,590 |
|
|
$ |
16,881 |
|
|
$ |
15,555 |
|
|
Interest on securities |
|
298 |
|
|
|
97 |
|
|
|
88 |
|
|
Other interest income |
|
1,036 |
|
|
|
1,444 |
|
|
|
1,569 |
|
| Total interest income |
|
18,924 |
|
|
|
18,422 |
|
|
|
17,212 |
|
| |
|
|
|
|
|
| Interest
expense |
|
|
|
|
|
|
Interest on deposits |
|
4,161 |
|
|
|
3,807 |
|
|
|
2,801 |
|
| Total interest expense |
|
4,161 |
|
|
|
3,807 |
|
|
|
2,801 |
|
| Net interest
income |
|
14,763 |
|
|
|
14,615 |
|
|
|
14,411 |
|
| |
|
|
|
|
|
| Provision for credit
losses |
|
2,157 |
|
|
|
2,385 |
|
|
|
3,070 |
|
| Net interest income after
provision for credit losses |
|
12,606 |
|
|
|
12,230 |
|
|
|
11,341 |
|
| |
|
|
|
|
|
| Non-interest
income |
|
|
|
|
|
|
Strategic Program fees |
|
4,862 |
|
|
|
4,035 |
|
|
|
3,945 |
|
|
Gain on sale of loans, net |
|
393 |
|
|
|
356 |
|
|
|
357 |
|
|
SBA loan servicing fees, net |
|
87 |
|
|
|
204 |
|
|
|
(138 |
) |
|
Change in fair value on investment in BFG |
|
(100 |
) |
|
|
(200 |
) |
|
|
(500 |
) |
|
Other miscellaneous income |
|
812 |
|
|
|
771 |
|
|
|
1,228 |
|
| Total non-interest income |
|
6,054 |
|
|
|
5,166 |
|
|
|
4,892 |
|
| |
|
|
|
|
|
| Non-interest
expense |
|
|
|
|
|
|
Salaries and employee benefits |
|
9,659 |
|
|
|
8,609 |
|
|
|
6,416 |
|
|
Professional services |
|
1,331 |
|
|
|
1,282 |
|
|
|
750 |
|
|
Occupancy and equipment expenses |
|
1,046 |
|
|
|
1,121 |
|
|
|
958 |
|
|
Other operating expenses |
|
2,013 |
|
|
|
2,206 |
|
|
|
1,609 |
|
| Total non-interest
expense |
|
14,049 |
|
|
|
13,218 |
|
|
|
9,733 |
|
| Income before income
taxes |
|
4,611 |
|
|
|
4,178 |
|
|
|
6,500 |
|
| |
|
|
|
|
|
| Provision for income
taxes |
|
1,157 |
|
|
|
998 |
|
|
|
1,696 |
|
| Net
income |
$ |
3,454 |
|
|
$ |
3,180 |
|
|
$ |
4,804 |
|
|
|
|
|
|
|
|
| Earnings per share, basic |
$ |
0.26 |
|
|
$ |
0.25 |
|
|
$ |
0.38 |
|
| Earnings per share,
diluted |
$ |
0.25 |
|
|
$ |
0.24 |
|
|
$ |
0.37 |
|
|
|
|
|
|
|
|
| Weighted average shares
outstanding, basic |
|
12,658,557 |
|
|
|
12,627,800 |
|
|
|
12,387,392 |
|
| Weighted average shares
outstanding, diluted |
|
13,257,835 |
|
|
|
13,109,708 |
|
|
|
12,868,207 |
|
| Shares outstanding at end of
period |
|
13,211,160 |
|
|
|
13,143,560 |
|
|
|
12,493,565 |
|
|
FINWISE BANCORPAVERAGE BALANCES, YIELDS,
AND RATES ($ in thousands;
Unaudited) |
|
|
|
|
Three Months Ended |
|
|
9/30/2024 |
|
6/30/2024 |
|
9/30/2023 |
|
|
Average Balance |
|
Interest |
|
Average Yield/Rate |
|
Average Balance |
|
Interest |
|
Average Yield/Rate |
|
Average Balance |
|
Interest |
|
Average Yield/Rate |
| Interest earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
$ |
78,967 |
|
$ |
1,036 |
|
5.22 |
% |
|
$ |
105,563 |
|
$ |
1,444 |
|
5.50 |
% |
|
$ |
116,179 |
|
$ |
1,569 |
|
5.36 |
% |
|
Investment securities |
|
33,615 |
|
|
298 |
|
3.53 |
% |
|
|
14,795 |
|
|
97 |
|
2.65 |
% |
|
|
14,958 |
|
|
88 |
|
2.34 |
% |
|
Strategic Program loans held-for-sale |
|
70,123 |
|
|
4,913 |
|
27.87 |
% |
|
|
49,000 |
|
|
4,020 |
|
33.00 |
% |
|
|
38,410 |
|
|
3,823 |
|
39.49 |
% |
|
Loans held for investment |
|
422,820 |
|
|
12,677 |
|
11.93 |
% |
|
|
400,930 |
|
|
12,861 |
|
12.90 |
% |
|
|
316,220 |
|
|
11,732 |
|
14.72 |
% |
|
Total interest earning assets |
|
605,525 |
|
|
18,924 |
|
12.43 |
% |
|
|
570,288 |
|
|
18,422 |
|
12.99 |
% |
|
|
485,767 |
|
|
17,212 |
|
14.06 |
% |
| Noninterest-earning
assets |
|
56,290 |
|
|
|
|
|
|
46,531 |
|
|
|
|
|
|
27,240 |
|
|
|
|
| Total assets |
$ |
661,815 |
|
|
|
|
|
$ |
616,819 |
|
|
|
|
|
$ |
513,007 |
|
|
|
|
| Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand |
$ |
55,562 |
|
$ |
547 |
|
3.92 |
% |
|
$ |
47,900 |
|
$ |
441 |
|
3.70 |
% |
|
$ |
48,303 |
|
$ |
483 |
|
3.96 |
% |
|
Savings |
|
9,538 |
|
|
18 |
|
0.76 |
% |
|
|
10,270 |
|
|
19 |
|
0.75 |
% |
|
|
9,079 |
|
|
17 |
|
0.74 |
% |
|
Money market accounts |
|
13,590 |
|
|
127 |
|
3.72 |
% |
|
|
9,565 |
|
|
112 |
|
4.71 |
% |
|
|
15,140 |
|
|
142 |
|
3.73 |
% |
|
Certificates of deposit |
|
262,537 |
|
|
3,469 |
|
5.26 |
% |
|
|
251,142 |
|
|
3,235 |
|
5.18 |
% |
|
|
183,273 |
|
|
2,159 |
|
4.67 |
% |
|
Total deposits |
|
341,227 |
|
|
4,161 |
|
4.85 |
% |
|
|
318,877 |
|
|
3,807 |
|
4.80 |
% |
|
|
255,795 |
|
|
2,801 |
|
4.34 |
% |
|
Other borrowings |
|
112 |
|
|
— |
|
0.35 |
% |
|
|
142 |
|
|
— |
|
0.35 |
% |
|
|
235 |
|
|
— |
|
0.35 |
% |
|
Total interest-bearing liabilities |
|
341,339 |
|
|
4,161 |
|
4.85 |
% |
|
|
319,019 |
|
|
3,807 |
|
4.80 |
% |
|
|
256,030 |
|
|
2,801 |
|
4.34 |
% |
| Noninterest-bearing
deposits |
|
127,561 |
|
|
|
|
|
|
108,520 |
|
|
|
|
|
|
92,077 |
|
|
|
|
| Noninterest-bearing
liabilities |
|
25,536 |
|
|
|
|
|
|
27,700 |
|
|
|
|
|
|
16,299 |
|
|
|
|
| Shareholders’ equity |
|
167,379 |
|
|
|
|
|
|
161,580 |
|
|
|
|
|
|
148,601 |
|
|
|
|
| Total liabilities and
shareholders’ equity |
$ |
661,815 |
|
|
|
|
|
$ |
616,819 |
|
|
|
|
|
$ |
513,007 |
|
|
|
|
| Net interest income and
interest rate spread |
|
|
$ |
14,763 |
|
7.58 |
% |
|
|
|
$ |
14,615 |
|
8.19 |
% |
|
|
|
$ |
14,411 |
|
9.72 |
% |
| Net interest margin |
|
|
|
|
9.70 |
% |
|
|
|
|
|
10.31 |
% |
|
|
|
|
|
11.77 |
% |
| Ratio of average
interest-earning assets to average interest- bearing
liabilities |
|
|
|
|
177.40 |
% |
|
|
|
|
|
178.76 |
% |
|
|
|
|
|
189.73 |
% |
|
Reconciliation of Non-GAAP to GAAP Financial
Measures |
| |
| Efficiency
ratio |
Three Months Ended |
| |
9/30/2024 |
|
6/30/2024 |
|
9/30/2023 |
| ($ in thousands) |
|
|
|
|
|
|
Non-interest expense |
$ |
14,048 |
|
|
$ |
13,218 |
|
|
$ |
9,733 |
|
| |
|
|
|
|
|
| Net interest income |
|
14,763 |
|
|
|
14,615 |
|
|
|
14,411 |
|
| Total non-interest income |
|
6,054 |
|
|
|
5,166 |
|
|
|
4,892 |
|
|
Adjusted operating revenue |
$ |
20,817 |
|
|
$ |
19,781 |
|
|
$ |
19,303 |
|
| Efficiency ratio |
|
67.5 |
% |
|
|
66.8 |
% |
|
|
50.4 |
% |
FinWise Bancorp (NASDAQ:FINW)
過去 株価チャート
から 12 2024 まで 1 2025
FinWise Bancorp (NASDAQ:FINW)
過去 株価チャート
から 1 2024 まで 1 2025
