FinWise Bancorp (NASDAQ: FINW) (“FinWise” or the “Company”), parent
company of FinWise Bank (the “Bank”), today announced results for
the quarter ended December 31, 2023.
Fourth Quarter
2023 Highlights
- Loan originations were $1.2
billion, compared to $1.1 billion for the quarter ended
September 30, 2023, and $1.2 billion for the fourth quarter of
the prior year
- Net interest income was $14.4
million, compared to $14.4 million for the quarter ended
September 30, 2023, and $12.6 million for the fourth quarter
of the prior year
- Net Income was $4.2 million,
compared to $4.8 million for the quarter ended September 30,
2023, and $6.5 million for the fourth quarter of the prior
year
- Diluted earnings per share (“EPS”)
were $0.32 for the quarter, compared to $0.37 for the quarter ended
September 30, 2023, and $0.49 for the fourth quarter of the
prior year
- Efficiency ratio was 55.8%,
compared to 51.3% for the quarter ended September 30, 2023,
and 45.6% for the fourth quarter of the prior year (1)
- Annualized return on average equity
(ROAE) was 10.8%, compared to 12.8% in the quarter ended
September 30, 2023, and 19.1% in the fourth quarter of the
prior year
- Non-performing loans were $27.1
million as of December 31, 2023, compared to $10.7 million as
of September 30, 2023, and $0.4 million as of
December 31, 2022(2)
(1) See “Reconciliation of Non-GAAP to GAAP Financial Measures”
for a reconciliation of this non-GAAP measure.(2) Of the
non-performing loans $15.0 million, $4.7 million, and $0,
respectively, as of December 31, 2023, September 30,
2023, and December 31, 2022 is guaranteed by the SBA.
“2023 marked another year of achievements and
progress for our team, highlighting the resilience of our
differentiated business model, despite a challenging macroeconomic
backdrop,” said Kent Landvatter, Chief Executive Officer and
President of FinWise. “Our ongoing strategy to drive profitable
growth through the strength of our existing businesses continued to
progress as envisioned and as we communicated since our IPO.
Looking ahead, we plan to continue building our strategic
initiatives, including our Payments Hub and BIN Sponsorship
businesses expected to become operational later this year, which we
expect will provide us with an integrated banking-as-a-service
capability. We believe that this offering will complement our
already robust platform, further diversify our business model and
position the Company for longer-term growth.”
Selected Financial
Data |
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
For the Years Ended |
($s in thousands, except per
share amounts) |
12/31/2023 |
|
9/30/2023 |
|
12/31/2022 |
|
12/31/2023 |
|
12/31/2022 |
|
|
|
|
|
|
|
|
|
|
Net Income |
$ |
4,156 |
|
|
$ |
4,804 |
|
|
$ |
6,545 |
|
|
$ |
17,460 |
|
|
$ |
25,115 |
|
Diluted EPS |
$ |
0.32 |
|
|
$ |
0.37 |
|
|
$ |
0.49 |
|
|
$ |
1.33 |
|
|
$ |
1.87 |
|
Return on average assets |
|
2.9 |
% |
|
|
3.7 |
% |
|
|
6.6 |
% |
|
|
3.5 |
% |
|
|
6.4 |
% |
Return on average equity |
|
10.8 |
% |
|
|
12.8 |
% |
|
|
19.1 |
% |
|
|
11.9 |
% |
|
|
19.6 |
% |
Yield on loans |
|
16.21 |
% |
|
|
17.40 |
% |
|
|
19.04 |
% |
|
|
17.05 |
% |
|
|
18.52 |
% |
Cost of deposits |
|
4.82 |
% |
|
|
4.34 |
% |
|
|
1.98 |
% |
|
|
4.22 |
% |
|
|
1.17 |
% |
Net interest margin |
|
10.61 |
% |
|
|
11.77 |
% |
|
|
14.27 |
% |
|
|
11.65 |
% |
|
|
14.04 |
% |
Efficiency ratio(1) |
|
55.8 |
% |
|
|
51.3 |
% |
|
|
45.6 |
% |
|
|
53.1 |
% |
|
|
43.9 |
% |
Tangible book value per
share(2) |
$ |
12.41 |
|
|
$ |
12.04 |
|
|
$ |
10.95 |
|
|
$ |
12.41 |
|
|
$ |
10.95 |
|
Tangible shareholders’ equity
to tangible assets(2) |
|
26.5 |
% |
|
|
27.1 |
% |
|
|
35.0 |
% |
|
|
26.5 |
% |
|
|
35.0 |
% |
Leverage Ratio (Bank under
CBLR) |
|
20.7 |
% |
|
|
22.1 |
% |
|
|
25.1 |
% |
|
|
20.7 |
% |
|
|
25.1 |
% |
Full-time Equivalent
(FTEs) |
|
162 |
|
|
|
158 |
|
|
|
140 |
|
|
|
162 |
|
|
|
140 |
|
(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
noninterest expense divided by the sum of net interest income and
noninterest 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) This measure is not a
measure recognized under 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. 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. The Company had no goodwill
or other intangible assets as of any of the dates indicated. The
Company has not considered loan servicing rights or loan trailing
fee asset as intangible assets for purposes of this calculation. As
a result, tangible shareholders’ equity is the same as total
shareholders’ equity as of each of the dates indicated.
Net IncomeNet income was $4.2 million for the
fourth quarter of 2023, compared to $4.8 million for the third
quarter of 2023 and $6.5 million for the fourth quarter of 2022.
The decrease from the prior quarter was primarily due to an
increase in salaries and employee benefits and professional service
expenses driven by increased spending on business infrastructure.
This was partially offset by an increase in the fair value of the
Company’s investment in Business Funding Group (“BFG”). The
decrease from the prior year period was primarily due to lower gain
on sale of loans and an increase in salaries and employee benefits
expense driven by increased spending on business infrastructure,
partially offset by an increase in net interest income driven by
growth in the loans held for investment portfolio.
Net Interest IncomeNet interest income was $14.4
million for the fourth quarter of 2023, compared to $14.4 million
for the third quarter of 2023 and $12.6 million for the fourth
quarter of 2022. The slight decrease from the prior quarter was
primarily due to increased interest rates and increased average
interest-bearing liability balances, substantially offset by
increases in the Bank’s average balances for the loans held for
investment portfolio. The increase from the prior year period was
primarily due to increases in the Bank’s average balances for the
loans held for investment portfolio, partially offset by increased
interest rates and increased average interest-bearing liability
balances.
Loan originations totaled $1.2 billion for the
fourth quarter of 2023, compared to $1.1 billion for the prior
quarter and $1.2 billion for the prior year period.
Net interest margin for the fourth quarter of
2023 was 10.61%, compared to 11.77% for the prior quarter and
14.27% for the prior year period. The decrease from the prior
quarter was mainly due to a loan mix shift toward loans carrying
lower yields in the held for investment portfolio and an increase
in the volume of brokered certificates of deposit. The decrease
from the prior year period was primarily due to a reduction in
average balances in the Company’s loans held for sale portfolio
along with a shift in the Company’s deposit portfolio mix from
lower to higher cost deposits, partially offset by an increase in
average balances for the Company’s loans held for investment
portfolio.
Provision for Credit LossesThe Company’s
provision for credit losses was $3.2 million for the fourth quarter
of 2023, compared to $3.1 million for the prior quarter and $3.2
million for the prior year period. The increase from the prior
quarter was mainly due to qualitative factor adjustments based on
the increase of special mention, non-accrual and nonperforming
assets primarily related to the SBA portfolio. Provision for credit
losses for the fourth quarter of 2023 was substantially flat
compared to the prior year period. However, the provision for the
prior year period was calculated under the incurred loss model
rather than the current expected credit loss methodology as
required under ASU 2016-13 and is not necessarily comparable to the
provisions charged in 2023.
Non-interest Income
|
For the Three Months Ended |
($ in thousands) |
12/31/2023 |
|
9/30/2023 |
|
12/31/2022 |
Noninterest income: |
|
|
|
|
|
Strategic Program fees |
$ |
4,229 |
|
$ |
3,945 |
|
|
$ |
4,487 |
Gain on sale of loans |
|
440 |
|
|
357 |
|
|
|
4,163 |
SBA loan servicing fees |
|
450 |
|
|
199 |
|
|
|
547 |
Change in fair value on investment in BFG |
|
200 |
|
|
(500 |
) |
|
|
300 |
Other miscellaneous income |
|
716 |
|
|
1,228 |
|
|
|
278 |
Total noninterest income |
$ |
6,035 |
|
$ |
5,229 |
|
|
$ |
9,775 |
Non-interest income was $6.0 million for the
fourth quarter of 2023, compared to $5.2 million for the prior
quarter and $9.8 million for the prior year period. The increase
from the prior quarter was primarily due to the change in the fair
value of the Company’s investment in BFG, partially offset by a
decrease in other miscellaneous income primarily related to a $0.6
million gain on the resolution of a forbearance agreement in the
Company’s SBA lending program recognized in the prior quarter which
did not occur in the fourth quarter of 2023. The decrease from the
prior year period was mainly due to a reduction in gain on sale of
loans primarily attributable to the gain on sale of loans recorded
in the prior year period to establish a new Loan Trailing Fee Asset
of approximately $2.3 million and the Company’s increased retention
of the guaranteed portion of SBA loans the Company originates to
increase interest income which resulted in a corresponding decrease
in gain on sale income. Lower fees associated with originations of
Strategic Program loans also contributed to the decrease from the
prior year period. The decrease was partially offset by an increase
in other miscellaneous income primarily related to increased
revenue from growth in the Company’s operating lease
portfolio.
Non-interest Expense
|
For the Three Months Ended |
($ in thousands) |
12/31/2023 |
|
9/30/2023 |
|
12/31/2022 |
Non-interest expense |
|
|
|
|
|
Salaries and employee benefits |
$ |
7,396 |
|
|
$ |
6,416 |
|
$ |
5,805 |
Professional services |
|
1,433 |
|
|
|
750 |
|
|
1,609 |
Occupancy and equipment expenses |
|
923 |
|
|
|
958 |
|
|
843 |
(Recovery) impairment of SBA servicing asset |
|
(122 |
) |
|
|
337 |
|
|
779 |
Other operating expenses |
|
1,751 |
|
|
|
1,609 |
|
|
1,184 |
Total noninterest expense |
$ |
11,381 |
|
|
$ |
10,070 |
|
$ |
10,220 |
Non-interest expense was $11.4 million for
the fourth quarter of 2023, compared to $10.1 million for the prior
quarter and $10.2 million for the prior year period. The
increase from the prior quarter was primarily due to an increase in
salaries and employee benefits and professional service expenses
driven by increased spending on business infrastructure. This was
partially offset by an increase in the fair value of the Company’s
investment in Business Funding Group (“BFG”) that did not occur in
the prior quarter. The increase from the prior year period was
primarily due to an increase in salaries and employee benefits
related to a higher number of employees and an increase in other
operating expenses primarily related to occupancy and equipment
expense, partially offset by a recovery on the Company’s SBA
servicing asset which did not occur in the prior year period.
The Company’s efficiency ratio was 55.8% for the
fourth quarter of 2023, compared to 51.3% for the prior quarter and
45.6% for the prior year period.
Tax Rate
The Company’s effective tax rate was 28.5% for
the fourth quarter of 2023, compared to 26.1% for the prior quarter
and 27.3% for the prior year period. The increase from the prior
quarter and prior year was due primarily to a state tax related
true-up.
Balance Sheet
The Company’s total assets were $586.2 million
as of December 31, 2023, an increase from $555.1 million as of
September 30, 2023 and $400.8 million as of December 31,
2022. The increase from September 30, 2023 was primarily due
to continued growth of deposits to support growth in the Company’s
SBA, commercial-non real estate, consumer, and residential real
estate loan portfolios. The increase in total assets compared to
December 31, 2022 was primarily due to increases in deposits
to support growth in the Company’s SBA, commercial non-real estate,
and Strategic Program loans held-for-sale portfolios as well as
interest-bearing deposits.
The following table shows the loan portfolio as of the dates
indicated:
|
12/31/2023 |
|
9/30/2023 |
|
12/31/2022 |
($s in thousands) |
Amount |
|
% of total loans |
|
Amount |
|
% of total loans |
|
Amount |
|
% of total loans |
SBA |
$ |
239,922 |
|
64.5 |
% |
|
$ |
219,305 |
|
65.0 |
% |
|
$ |
145,172 |
|
61.4 |
% |
Commercial, non-real estate |
|
40,567 |
|
10.9 |
% |
|
|
34,044 |
|
10.1 |
% |
|
|
11,484 |
|
4.9 |
% |
Residential real estate |
|
38,123 |
|
10.2 |
% |
|
|
34,891 |
|
10.3 |
% |
|
|
37,815 |
|
16.0 |
% |
Strategic Program loans held for investment |
|
19,408 |
|
5.2 |
% |
|
|
20,040 |
|
5.9 |
% |
|
|
24,259 |
|
10.2 |
% |
Commercial real estate |
|
22,823 |
|
6.1 |
% |
|
|
21,680 |
|
6.4 |
% |
|
|
12,063 |
|
5.1 |
% |
Consumer |
|
11,372 |
|
3.1 |
% |
|
|
7,675 |
|
2.3 |
% |
|
|
5,808 |
|
2.4 |
% |
Total period end loans |
$ |
372,215 |
|
100.0 |
% |
|
$ |
337,635 |
|
100.0 |
% |
|
$ |
236,601 |
|
100.0 |
% |
Note: SBA loans as of December 31, 2023, September 30,
2023 and December 31, 2022 include $131.7 million, $112.5
million and $49.5 million, respectively, of SBA 7(a) loan balances
that are guaranteed by the SBA. The held for investment balance on
Strategic Programs with annual interest rates below 36% as of
December 31, 2023, September 30, 2023 and
December 31, 2022 was $3.6 million, $4.4 million and $8.5
million, respectively.
Total loans receivable as of December 31,
2023 were $372.2 million, an increase from $337.6 million and
$236.6 million as of September 30, 2023 and December 31,
2022, respectively. The increase compared to September 30,
2023 and December 31, 2022 was primarily due to increases in
the SBA 7(a) and commercial loan portfolios.
The following table shows the Company’s deposit composition as
of the dates indicated:
|
As of |
|
12/31/2023 |
|
9/30/2023 |
|
12/31/2022 |
($s in thousands) |
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
Noninterest-bearing demand deposits |
$ |
95,486 |
|
23.6 |
% |
|
$ |
94,268 |
|
24.4 |
% |
|
$ |
78,817 |
|
32.5 |
% |
Interest-bearing
deposits: |
|
|
|
|
|
|
|
|
|
|
|
Demand |
|
50,058 |
|
12.4 |
% |
|
|
87,753 |
|
22.7 |
% |
|
|
50,746 |
|
20.8 |
% |
Savings |
|
8,633 |
|
2.1 |
% |
|
|
8,738 |
|
2.3 |
% |
|
|
8,289 |
|
3.4 |
% |
Money market |
|
11,661 |
|
2.9 |
% |
|
|
15,450 |
|
3.9 |
% |
|
|
10,882 |
|
4.5 |
% |
Time certificates of deposit |
|
238,995 |
|
59.0 |
% |
|
|
180,544 |
|
46.7 |
% |
|
|
94,264 |
|
38.8 |
% |
Total period end deposits |
$ |
404,833 |
|
100.0 |
% |
|
$ |
386,753 |
|
100.0 |
% |
|
$ |
242,998 |
|
100.0 |
% |
Total deposits as of December 31, 2023
increased to $404.8 million from $386.8 million and $243.0 million
as of September 30, 2023 and December 31, 2022,
respectively. The increase from September 30, 2023 was driven
primarily by an increase in brokered time certificates of deposit,
partially offset by a decrease in brokered interest-bearing demand
deposits. The increase from December 31, 2022 was driven
primarily by an increase in brokered time certificate of deposits,
noninterest-bearing demand deposits, and money market deposits,
partially offset by a decrease in interest-bearing demand deposits.
As of December 31, 2023, 31.1% of deposits at the Bank level
were uninsured, compared to 31.7% as of September 30, 2023. As
of December 31, 2023, 6.8% of total bank deposits were
required under the Company’s Strategic Program agreements and an
additional 11.2% were associated with other accounts owned by the
Company or the Bank.
Total shareholders’ equity as of
December 31, 2023 increased $4.7 million to $155.1 million
from $150.4 million at September 30, 2023. Compared to
December 31, 2022, total shareholders’ equity increased by
$14.6 million from $140.5 million. The increase from
September 30, 2023 was primarily due to the Company’s net
income. The increase from December 31, 2022 was primarily due
to the Company’s net income, 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 |
12/31/2023 |
|
9/30/2023 |
|
12/31/2022 |
|
Well-Capitalized Requirement |
Leverage Ratio |
20.7% |
|
22.1% |
|
25.1% |
|
9.0% |
The Bank’s capital levels remain significantly above
well-capitalized guidelines as of December 31, 2023.
Asset QualityNonperforming
loans were $27.1 million, or 7.3% of total loans receivable, as of
December 31, 2023, compared to $10.7 million or 3.2% of total
loans receivable, as of September 30, 2023 and $0.4 million or
0.2% as of December 31, 2022. Of the $27.1 million, $10.7
million, and $0.4 million nonperforming loans as of December 31,
2023, September 30, 2023 and December 31, 2022, respectively, $15.0
million, $4.7 million, and $0, respectively, is guaranteed by the
SBA and $12.1 million, $6.0 million, and $0.4 million,
respectively, is the balance of loans which do not carry SBA
guarantees. The increase in nonperforming loans from the prior
periods was primarily attributable to several loans in the SBA 7(a)
loan portfolio moving to non-accrual status due mainly 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 3.5% as of December 31,
2023 compared to 3.8% as of September 30, 2023 and 5.1% as of
December 31, 2022. The Company’s increased retention of most
of the originated guaranteed portions in its SBA 7(a) loan program
has been the primary factor in the decrease in this ratio from the
prior quarter and year.
For the fourth quarter of 2023, the Company’s
net charge-offs were $3.4 million, compared to $2.2 million for the
prior quarter and $3.2 million for the prior year period. The
increase compared to the prior quarter was primarily due to
increased charge-offs related to the Company’s SBA portfolio and a
large recovery in the SBA portfolio in the prior quarter which did
not occur in the fourth quarter of 2023. The increase compared to
the fourth quarter of 2022 was primarily due to increased
charge-offs related to the Company’s SBA portfolio, partially
offset by lower net charge-offs related to strategic program
loans.
The following table presents a summary of
changes in the allowance for credit losses and asset quality ratios
for the periods indicated:
|
For the Three Months Ended |
($s in thousands) |
12/31/2023 |
|
9/30/2023 |
|
12/31/2022 |
Allowance for Credit
Losses: |
|
|
|
|
|
Beginning Balance(1) |
$ |
12,986 |
|
|
$ |
12,321 |
|
|
$ |
11,968 |
|
Provision for Credit
Losses |
|
3,272 |
|
|
|
2,910 |
|
|
|
3,202 |
|
Charge
offs* |
|
|
|
|
|
Construction and land development |
|
— |
|
|
|
— |
|
|
|
— |
|
Residential real estate |
|
(104 |
) |
|
|
— |
|
|
|
— |
|
Residential real estate multifamily |
|
— |
|
|
|
— |
|
|
|
— |
|
Commercial real estate |
|
(561 |
) |
|
|
(31 |
) |
|
|
— |
|
Commercial and industrial |
|
(281 |
) |
|
|
(107 |
) |
|
|
— |
|
Consumer |
|
(22 |
) |
|
|
(28 |
) |
|
|
(62 |
) |
Lease financing receivables |
|
— |
|
|
|
— |
|
|
|
— |
|
Strategic Program loans |
|
(2,656 |
) |
|
|
(2,748 |
) |
|
|
(3,440 |
) |
Recoveries* |
|
|
|
|
|
Construction and land development |
|
— |
|
|
|
— |
|
|
|
— |
|
Residential real estate |
|
3 |
|
|
|
3 |
|
|
|
3 |
|
Residential real estate multifamily |
|
— |
|
|
|
— |
|
|
|
— |
|
Commercial real estate |
|
(11 |
) |
|
|
389 |
|
|
|
— |
|
Commercial and industrial |
|
1 |
|
|
|
18 |
|
|
|
6 |
|
Consumer |
|
— |
|
|
|
2 |
|
|
|
64 |
|
Lease financing receivables |
|
— |
|
|
|
— |
|
|
|
— |
|
Strategic Program loans |
|
261 |
|
|
|
257 |
|
|
|
244 |
|
Ending Balance |
$ |
12,888 |
|
|
$ |
12,986 |
|
|
$ |
11,985 |
|
|
|
|
|
|
|
Asset Quality
Ratios |
As of and For the Three Months Ended |
($s in thousands, annualized
ratios) |
12/31/2023 |
|
9/30/2023 |
|
12/31/2022 |
Nonperforming loans** |
$ |
27,127 |
|
|
$ |
10,703 |
|
|
$ |
356 |
|
Nonperforming loans to total
loans held for investment |
|
7.3 |
% |
|
|
3.2 |
% |
|
|
0.2 |
% |
Net charge offs to average
loans held for investment |
|
3.8 |
% |
|
|
2.8 |
% |
|
|
5.8 |
% |
Allowance for credit losses to
loans held for investment |
|
3.5 |
% |
|
|
3.8 |
% |
|
|
5.1 |
% |
Net charge offs |
$ |
3,370 |
|
|
$ |
2,245 |
|
|
$ |
3,185 |
|
(1) The Company adopted ASU 2016-13 as of
January 1, 2023. The 2022 amounts presented are calculated under
the prior accounting standard.*Charge offs and recoveries for the
three months ended December 31, 2022 have been reclassified in
accordance with the credit loss model adopted by the Company on
January 1, 2023.**Nonperforming loans as of December 31, 2023
and September 30, 2023 include $15.0 million and $4.7 million,
respectively, of SBA 7(a) loan balances that are guaranteed by the
SBA.
Definitive AgreementThe Company
entered into a definitive agreement, dated as of July 25, 2023, as
amended, with BFG and four members of BFG to acquire an additional
10% of its nonvoting ownership interests in exchange for 339,176
shares of the Company’s stock, subject to regulatory approval and
other customary closing conditions. Upon closing, the Company’s
total equity ownership of BFG will increase to 20%. Either of the
Company or the sellers may terminate the agreement if any condition
to its or their obligations, as the case may be, have not been
satisfied by February 29, 2024.
Webcast and Conference Call
Information
FinWise will host a conference call today at
5:30 PM ET to discuss its financial results for the fourth quarter
of 2023. A simultaneous audio webcast of the conference call will
be available on the Company’s investor relations section of the
website here.
The dial-in number for the conference call is
(877) 423-9813 (toll-free) or (201) 689-8573 (international). The
conference ID is 13742798. 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 Information
The 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 Bancorp
FinWise Bancorp is a Utah bank holding company
headquartered in Murray, Utah. FinWise operates through its
wholly-owned subsidiary, FinWise Bank, a Utah state-chartered bank.
FinWise currently operates one full-service banking location in
Sandy, Utah. FinWise is a nationwide lender to and takes deposits
from consumers and small businesses. Learn more at
www.finwisebancorp.com.
Contacts
investors@finwisebank.com
media@finwisebank.com
"Safe Harbor" Statement Under the Private Securities
Litigation Reform Act of 1995
This 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 “BaaS” service providers to comply with
regulatory regimes, and the Company’s ability to adequately oversee
and monitor its Strategic Program and BaaS 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) 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; (h) general economic and business conditions, either
nationally or in the Company’s market areas; (i) increased national
or regional competition in the financial services industry; (j) 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; (k) the adequacy
of the Company’s risk management framework; (l) the adequacy of the
Company’s allowance for credit losses (“ACL”); (m) the financial
soundness of other financial institutions; (n) new lines of
business or new products and services; (o) changes in Small
Business Administration (“SBA”) rules, regulations and loan
products, including specifically the Section 7(a) program or
changes changes to the status of the Bank as an SBA Preferred
Lender; (p) the value of collateral securing the Company’s loans;
(q) the Company’s levels of nonperforming assets; (r) losses from
loan defaults; (s) the Company’s ability to protect its
intellectual property and the risks it faces with respect to claims
and litigation initiated against the Company; (t) the Company’s
ability to implement its growth strategy; (u) the Company’s ability
to launch new products or services successfully; (v) the
concentration of the Company’s lending and depositor relationships
through Strategic Programs in the financial technology industry
generally; (w) interest-rate and liquidity risks; (x) 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; (y) 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; (z) dependence on
our 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) the
possibility that the proposed acquisition of BFG equity interests
does not close when expected or at all because required regulatory
approvals are not received or other conditions to closing are not
satisfied on a timely basis or at all; (hh) that the Company may be
required to modify the terms and conditions of the proposed
acquisition to obtain regulatory approval; (ii) that the
anticipated benefits of the proposed acquisition 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 BFG do business; and (jj) 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,
2022 and subsequent reports on Form 10-Q and Form 8-K.
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($s in
thousands)
|
As of |
|
12/31/2023 |
|
9/30/2023 |
|
12/31/2022 |
|
(Unaudited) |
|
(Unaudited) |
|
|
ASSETS |
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
Cash and due from banks |
$ |
411 |
|
$ |
379 |
|
$ |
386 |
Interest-bearing deposits |
|
116,564 |
|
|
126,392 |
|
|
100,181 |
Total cash and cash equivalents |
|
116,975 |
|
|
126,771 |
|
|
100,567 |
Investment securities held-to-maturity, at cost |
|
15,388 |
|
|
15,840 |
|
|
14,292 |
Investment in Federal Home Loan Bank (FHLB) stock, at cost |
|
238 |
|
|
476 |
|
|
449 |
Strategic Program loans held-for-sale, at lower of cost or fair
value |
|
47,514 |
|
|
45,710 |
|
|
23,589 |
Loans receivable, net |
|
358,560 |
|
|
324,197 |
|
|
224,217 |
Premises and equipment, net |
|
14,630 |
|
|
14,181 |
|
|
9,478 |
Accrued interest receivable |
|
3,573 |
|
|
2,711 |
|
|
1,818 |
Deferred taxes, net |
|
— |
|
|
— |
|
|
1,167 |
SBA servicing asset, net |
|
4,231 |
|
|
4,398 |
|
|
5,210 |
Investment in Business Funding Group (BFG), at fair value |
|
4,200 |
|
|
4,000 |
|
|
4,800 |
Operating lease right-of-use (“ROU”) assets |
|
4,293 |
|
|
4,481 |
|
|
5,041 |
Income tax receivable, net |
|
2,400 |
|
|
1,134 |
|
|
— |
Other assets |
|
14,219 |
|
|
11,157 |
|
|
10,152 |
Total
assets |
$ |
586,221 |
|
$ |
555,056 |
|
$ |
400,780 |
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
Liabilities |
|
|
|
|
|
Deposits |
|
|
|
|
|
Noninterest-bearing |
$ |
95,486 |
|
$ |
94,268 |
|
$ |
78,817 |
Interest-bearing |
|
309,347 |
|
|
292,485 |
|
|
164,181 |
Total deposits |
|
404,833 |
|
|
386,753 |
|
|
242,998 |
Accrued interest payable |
|
619 |
|
|
581 |
|
|
54 |
Income taxes payable, net |
|
1,873 |
|
|
— |
|
|
1,077 |
Deferred taxes, net |
|
748 |
|
|
234 |
|
|
— |
PPP Liquidity Facility |
|
190 |
|
|
221 |
|
|
314 |
Operating lease liabilities |
|
6,296 |
|
|
6,545 |
|
|
7,020 |
Other liabilities |
|
16,606 |
|
|
10,320 |
|
|
8,858 |
Total
liabilities |
|
431,165 |
|
|
404,654 |
|
|
260,321 |
|
|
|
|
|
|
Shareholders’
equity |
|
|
|
|
|
Common Stock |
|
12 |
|
|
12 |
|
|
13 |
Additional paid-in-capital |
|
51,200 |
|
|
50,703 |
|
|
54,614 |
Retained earnings |
|
103,844 |
|
|
99,687 |
|
|
85,832 |
Total shareholders’
equity |
|
155,056 |
|
|
150,402 |
|
|
140,459 |
Total liabilities and
shareholders’ equity |
$ |
586,221 |
|
$ |
555,056 |
|
$ |
400,780 |
FINWISE BANCORPCONSOLIDATED STATEMENTS
OF INCOME ($s in thousands, except per share
amounts; Unaudited)
|
For the Three Months Ended |
|
12/31/2023 |
|
9/30/2023 |
|
12/31/2022 |
Interest
income |
|
|
|
|
|
Interest and fees on loans |
$ |
16,192 |
|
|
$ |
15,555 |
|
|
$ |
12,440 |
Interest on securities |
|
101 |
|
|
|
88 |
|
|
|
73 |
Other interest income |
|
1,759 |
|
|
|
1,569 |
|
|
|
757 |
Total interest income |
|
18,052 |
|
|
|
17,212 |
|
|
|
13,270 |
|
|
|
|
|
|
Interest
expense |
|
|
|
|
|
Interest on deposits |
|
3,685 |
|
|
|
2,801 |
|
|
|
624 |
Total interest expense |
|
3,685 |
|
|
|
2,801 |
|
|
|
624 |
Net interest
income |
|
14,367 |
|
|
|
14,411 |
|
|
|
12,646 |
|
|
|
|
|
|
Provision for credit
losses(1) |
|
3,210 |
|
|
|
3,070 |
|
|
|
3,202 |
Net interest income after
provision for credit losses |
|
11,157 |
|
|
|
11,341 |
|
|
|
9,444 |
|
|
|
|
|
|
Non-interest
income |
|
|
|
|
|
Strategic Program fees |
|
4,229 |
|
|
|
3,945 |
|
|
|
4,487 |
Gain on sale of loans, net |
|
440 |
|
|
|
357 |
|
|
|
4,163 |
SBA loan servicing fees |
|
450 |
|
|
|
199 |
|
|
|
547 |
Change in fair value on investment in BFG |
|
200 |
|
|
|
(500 |
) |
|
|
300 |
Other miscellaneous income |
|
716 |
|
|
|
1,228 |
|
|
|
278 |
Total non-interest income |
|
6,035 |
|
|
|
5,229 |
|
|
|
9,775 |
|
|
|
|
|
|
Non-interest
expense |
|
|
|
|
|
Salaries and employee benefits |
|
7,396 |
|
|
|
6,416 |
|
|
|
5,805 |
Professional services |
|
1,433 |
|
|
|
750 |
|
|
|
1,609 |
Occupancy and equipment expenses |
|
923 |
|
|
|
958 |
|
|
|
843 |
(Recovery) impairment of SBA servicing asset |
|
(122 |
) |
|
|
337 |
|
|
|
779 |
Other operating expenses |
|
1,751 |
|
|
|
1,609 |
|
|
|
1,184 |
Total non-interest
expense |
|
11,381 |
|
|
|
10,070 |
|
|
|
10,220 |
Income before income
tax expense |
|
5,811 |
|
|
|
6,500 |
|
|
|
8,999 |
|
|
|
|
|
|
Provision for income
taxes |
|
1,655 |
|
|
|
1,696 |
|
|
|
2,454 |
Net
income |
$ |
4,156 |
|
|
$ |
4,804 |
|
|
$ |
6,545 |
|
|
|
|
|
|
Earnings per share, basic |
$ |
0.33 |
|
|
$ |
0.38 |
|
|
$ |
0.51 |
Earnings per share,
diluted |
$ |
0.32 |
|
|
$ |
0.37 |
|
|
$ |
0.49 |
|
|
|
|
|
|
Weighted average shares
outstanding, basic |
|
12,261,101 |
|
|
|
12,387,392 |
|
|
|
12,740,933 |
Weighted average shares
outstanding, diluted |
|
12,752,051 |
|
|
|
12,868,207 |
|
|
|
13,218,403 |
Shares outstanding at end of
period |
|
12,493,565 |
|
|
|
12,493,565 |
|
|
|
12,831,345 |
|
|
|
|
|
|
(1) The Company
adopted ASU 2016-13 as of January 1, 2023. The 2022 amounts
presented are calculated under the prior accounting standard. |
FINWISE BANCORPCONSOLIDATED STATEMENTS
OF INCOME ($s in thousands, except per share
amounts)
|
For the Years Ended |
|
12/31/2023 |
|
12/31/2022 |
|
(Unaudited) |
|
|
Interest
income |
|
|
|
Interest and fees on loans |
$ |
58,445 |
|
|
$ |
50,941 |
|
Interest on securities |
|
338 |
|
|
|
208 |
|
Other interest income |
|
5,751 |
|
|
|
1,180 |
|
Total interest income |
|
64,534 |
|
|
|
52,329 |
|
|
|
|
|
Interest
expense |
|
|
|
Interest on deposits |
|
9,974 |
|
|
|
1,432 |
|
Interest on PPP Liquidity Facility |
|
1 |
|
|
|
2 |
|
Total interest expense |
|
9,975 |
|
|
|
1,434 |
|
Net interest
income |
|
54,559 |
|
|
|
50,895 |
|
|
|
|
|
Provision for credit
losses(1) |
|
11,638 |
|
|
|
13,519 |
|
Net interest income after
provision for credit losses |
|
42,921 |
|
|
|
37,376 |
|
|
|
|
|
Non-interest
income |
|
|
|
Strategic Program fees |
|
15,914 |
|
|
|
22,467 |
|
Gain on sale of loans, net |
|
1,684 |
|
|
|
13,550 |
|
SBA loan servicing fees |
|
1,466 |
|
|
|
1,603 |
|
Change in fair value on investment in BFG |
|
(600 |
) |
|
|
(1,100 |
) |
Other miscellaneous income |
|
2,616 |
|
|
|
891 |
|
Total non-interest income |
|
21,080 |
|
|
|
37,411 |
|
|
|
|
|
Non-interest
expense |
|
|
|
Salaries and employee benefits |
|
25,751 |
|
|
|
24,489 |
|
Professional services |
|
4,961 |
|
|
|
5,454 |
|
Occupancy and equipment expenses |
|
3,312 |
|
|
|
2,204 |
|
(Recovery) impairment of SBA servicing asset |
|
(376 |
) |
|
|
1,728 |
|
Other operating expenses |
|
6,540 |
|
|
|
4,881 |
|
Total non-interest
expense |
|
40,188 |
|
|
|
38,756 |
|
Income before income
tax expense |
|
23,813 |
|
|
|
36,031 |
|
|
|
|
|
Provision for income
taxes |
|
6,353 |
|
|
|
10,916 |
|
Net
income |
$ |
17,460 |
|
|
$ |
25,115 |
|
|
|
|
|
Earnings per share, basic |
$ |
1.38 |
|
|
$ |
1.96 |
|
Earnings per share,
diluted |
$ |
1.33 |
|
|
$ |
1.87 |
|
|
|
|
|
Weighted average shares
outstanding, basic |
|
12,488,564 |
|
|
12,729,898 |
|
Weighted average shares
outstanding, diluted |
|
12,909,648 |
|
|
13,357,022 |
|
Shares outstanding at end of
period |
|
12,493,565 |
|
|
|
12,831,345 |
|
|
|
|
|
(1) The Company
adopted ASU 2016-13 as of January 1, 2023. The 2022 amounts
presented are calculated under the prior accounting standard. |
FINWISE BANCORPAVERAGE BALANCES,
YIELDS, AND RATES ($s in thousands;
Unaudited)
For the Three Months
Ended |
|
12/31/2023 |
|
9/30/2023 |
|
12/31/2022 |
|
AverageBalance |
|
Interest |
|
AverageYield/Rate |
|
AverageBalance |
|
Interest |
|
AverageYield/Rate |
|
AverageBalance |
|
Interest |
|
AverageYield/Rate |
Interest earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing deposits |
$ |
125,462 |
|
$ |
1,759 |
|
5.56 |
% |
|
$ |
116,179 |
|
$ |
1,569 |
|
5.36 |
% |
|
$ |
78,619 |
|
$ |
757 |
|
3.85 |
% |
Investment securities |
|
15,670 |
|
|
101 |
|
2.56 |
% |
|
|
14,958 |
|
|
88 |
|
2.34 |
% |
|
|
14,414 |
|
|
73 |
|
2.03 |
% |
Loans held for sale |
|
45,370 |
|
|
4,307 |
|
37.66 |
% |
|
|
38,410 |
|
|
3,823 |
|
39.49 |
% |
|
|
43,751 |
|
|
3,990 |
|
36.48 |
% |
Loans held for investment |
|
350,852 |
|
|
11,885 |
|
13.44 |
% |
|
|
316,220 |
|
|
11,732 |
|
14.72 |
% |
|
|
217,619 |
|
|
8,450 |
|
15.53 |
% |
Total interest earning assets |
|
537,354 |
|
|
18,052 |
|
13.33 |
% |
|
|
485,767 |
|
|
17,212 |
|
14.06 |
% |
|
|
354,403 |
|
|
13,270 |
|
14.98 |
% |
Non-interest earning
assets |
|
32,202 |
|
|
|
|
|
|
|
|
27,240 |
|
|
|
|
|
|
|
|
21,208 |
|
|
|
|
|
|
Total assets |
$ |
569,556 |
|
|
|
|
|
|
|
$ |
513,007 |
|
|
|
|
|
|
|
$ |
375,611 |
|
|
|
|
|
|
Interest bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand |
$ |
47,784 |
|
$ |
562 |
|
4.67 |
% |
|
$ |
48,303 |
|
$ |
483 |
|
3.96 |
% |
|
$ |
44,115 |
|
$ |
375 |
|
3.40 |
% |
Savings |
|
8,096 |
|
|
13 |
|
0.65 |
% |
|
|
9,079 |
|
|
17 |
|
0.74 |
% |
|
|
7,605 |
|
|
5 |
|
0.26 |
% |
Money market accounts |
|
13,419 |
|
|
53 |
|
1.55 |
% |
|
|
15,140 |
|
|
142 |
|
3.73 |
% |
|
|
15,109 |
|
|
45 |
|
1.19 |
% |
Certificates of deposit |
|
234,088 |
|
|
3,057 |
|
5.18 |
% |
|
|
183,273 |
|
|
2,159 |
|
4.67 |
% |
|
|
59,273 |
|
|
199 |
|
1.34 |
% |
Total deposits |
|
303,387 |
|
|
3,685 |
|
4.82 |
% |
|
|
255,795 |
|
|
2,801 |
|
4.34 |
% |
|
|
126,102 |
|
|
624 |
|
1.98 |
% |
Other borrowings |
|
206 |
|
|
— |
|
0.35 |
% |
|
|
235 |
|
|
— |
|
0.35 |
% |
|
|
330 |
|
|
— |
|
0.35 |
% |
Total interest bearing liabilities |
|
303,593 |
|
|
3,685 |
|
4.82 |
% |
|
|
256,030 |
|
|
2,801 |
|
4.34 |
% |
|
|
126,432 |
|
|
624 |
|
1.97 |
% |
Non-interest bearing
deposits |
|
92,767 |
|
|
|
|
|
|
|
|
92,077 |
|
|
|
|
|
|
|
|
96,581 |
|
|
|
|
Non-interest bearing
liabilities |
|
21,099 |
|
|
|
|
|
|
|
|
16,299 |
|
|
|
|
|
|
|
|
17,164 |
|
|
|
|
Shareholders’ equity |
|
152,097 |
|
|
|
|
|
|
|
|
148,601 |
|
|
|
|
|
|
|
|
135,434 |
|
|
|
|
Total liabilities and
shareholders’ equity |
$ |
569,556 |
|
|
|
|
|
|
|
$ |
513,007 |
|
|
|
|
|
|
|
$ |
375,611 |
|
|
|
|
Net interest income and
interest rate spread |
|
|
|
$ |
14,367 |
|
8.51 |
% |
|
|
|
|
$ |
14,411 |
|
9.72 |
% |
|
|
|
|
$ |
12,646 |
|
13.01 |
% |
Net interest margin |
|
|
|
|
|
|
10.61 |
% |
|
|
|
|
|
|
|
11.77 |
% |
|
|
|
|
|
|
14.27 |
% |
Ratio of average
interest-earning assets to average interest- bearing
liabilities |
|
|
|
|
|
|
177.00 |
% |
|
|
|
|
|
|
|
189.73 |
% |
|
|
|
|
|
|
280.31 |
% |
FINWISE BANCORPAVERAGE BALANCES,
YIELDS, AND RATES($s in thousands)
|
For the Years
Ended |
|
12/31/2023 |
|
12/31/2022 |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Average Balance |
|
|
Interest |
|
Average Yield/Rate |
|
|
|
Average Balance |
|
|
Interest |
|
Average Yield/Rate |
|
Interest earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing deposits |
$ |
110,866 |
|
$ |
5,751 |
|
5.19 |
% |
|
$ |
74,920 |
|
$ |
1,180 |
|
1.58 |
% |
Investment securities |
|
14,731 |
|
|
338 |
|
2.30 |
% |
|
|
12,491 |
|
|
208 |
|
1.67 |
% |
Loans held for sale |
|
39,090 |
|
|
15,051 |
|
38.50 |
% |
|
|
65,737 |
|
|
21,237 |
|
32.31 |
% |
Loans held for investment |
|
303,784 |
|
|
43,394 |
|
14.28 |
% |
|
|
209,352 |
|
|
29,704 |
|
14.19 |
% |
Total interest earning assets |
|
468,472 |
|
|
64,534 |
|
13.78 |
% |
|
|
362,500 |
|
|
52,329 |
|
14.44 |
% |
Non-interest earning assets |
|
25,269 |
|
|
|
|
|
|
|
|
19,325 |
|
|
|
|
|
|
Total assets |
$ |
493,740 |
|
|
|
|
|
|
|
$ |
381,825 |
|
|
|
|
|
|
Interest bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand |
$ |
45,454 |
|
$ |
1856 |
|
4.08 |
% |
|
$ |
17,564 |
|
$ |
531 |
|
3.02 |
% |
Savings |
|
8,207 |
|
|
51 |
|
0.62 |
% |
|
|
7,310 |
|
|
7 |
|
0.10 |
% |
Money market accounts |
|
13,665 |
|
|
362 |
|
2.65 |
% |
|
|
26,054 |
|
|
116 |
|
0.45 |
% |
Certificates of deposit |
|
168,887 |
|
|
7,705 |
|
4.56 |
% |
|
|
71,661 |
|
|
778 |
|
1.09 |
% |
Total deposits |
|
236,213 |
|
|
9,974 |
|
4.22 |
% |
|
|
122,589 |
|
|
1,432 |
|
1.17 |
% |
Other borrowings |
|
251 |
|
|
1 |
|
0.35 |
% |
|
|
566 |
|
|
2 |
|
0.35 |
% |
Total interest bearing liabilities |
|
236,464 |
|
|
9,975 |
|
4.22 |
% |
|
|
123,155 |
|
|
1,434 |
|
1.16 |
% |
Non-interest bearing
deposits |
|
93,126 |
|
|
|
|
|
|
|
|
114,174 |
|
|
|
|
|
|
Non-interest bearing
liabilities |
|
17,250 |
|
|
|
|
|
|
|
|
15,781 |
|
|
|
|
|
|
Shareholders’ equity |
|
146,901 |
|
|
|
|
|
|
|
|
128,715 |
|
|
|
|
|
|
Total liabilities and
shareholders’ equity |
$ |
493,740 |
|
|
|
|
|
|
|
$ |
381,825 |
|
|
|
|
|
|
Net interest income and
interest rate spread |
|
|
|
$ |
54,559 |
|
9.56 |
% |
|
|
|
|
$ |
50,895 |
|
13.28 |
% |
Net interest margin |
|
|
|
|
|
|
11.65 |
% |
|
|
|
|
|
|
|
14.04 |
% |
Ratio of average
interest-earning assets to average interest- bearing
liabilities |
|
|
|
|
|
|
198.12 |
% |
|
|
|
|
|
|
|
294.34 |
% |
FINWISE BANCORPSELECTED HISTORICAL
CONSOLIDATED FINANCIAL AND OTHER DATA ($s in
thousands, except per share amounts; Unaudited)
|
As of and for the Three Months Ended |
|
12/31/2023 |
|
9/30/2023 |
|
12/31/2022 |
Selected Loan
Metrics |
|
|
|
|
|
Amount of loans originated |
$ |
1,177,704 |
|
|
$ |
1,061,327 |
|
|
$ |
1,219,851 |
|
Selected Income
Statement Data |
|
|
|
|
|
Interest income |
$ |
18,052 |
|
|
$ |
17,212 |
|
|
$ |
13,270 |
|
Interest expense |
|
3,685 |
|
|
|
2,801 |
|
|
|
624 |
|
Net interest income |
|
14,367 |
|
|
|
14,411 |
|
|
|
12,646 |
|
Provision for credit
losses |
|
3,210 |
|
|
|
3,070 |
|
|
|
3,202 |
|
Net interest income after
provision for credit losses |
|
11,157 |
|
|
|
11,341 |
|
|
|
9,444 |
|
Non-interest income |
|
6,035 |
|
|
|
5,229 |
|
|
|
9,775 |
|
Non-interest expense |
|
11,381 |
|
|
|
10,070 |
|
|
|
10,220 |
|
Provision for income
taxes |
|
1,655 |
|
|
|
1,696 |
|
|
|
2,454 |
|
Net income |
|
4,156 |
|
|
|
4,804 |
|
|
|
6,545 |
|
Selected Balance Sheet
Data |
|
|
|
|
|
Total Assets |
$ |
586,221 |
|
|
$ |
555,056 |
|
|
$ |
400,780 |
|
Cash and cash equivalents |
|
116,975 |
|
|
|
126,771 |
|
|
|
100,567 |
|
Investment securities
held-to-maturity, at cost |
|
15,388 |
|
|
|
15,840 |
|
|
|
14,292 |
|
Loans receivable, net |
|
358,560 |
|
|
|
324,197 |
|
|
|
224,217 |
|
Strategic Program loans
held-for-sale, at lower of cost or fair value |
|
47,514 |
|
|
|
45,710 |
|
|
|
23,589 |
|
SBA servicing asset, net |
|
4,231 |
|
|
|
4,398 |
|
|
|
5,210 |
|
Investment in Business Funding
Group, at fair value |
|
4,200 |
|
|
|
4,000 |
|
|
|
4,800 |
|
Deposits |
|
404,833 |
|
|
|
386,753 |
|
|
|
242,998 |
|
Total shareholders'
equity |
|
155,056 |
|
|
|
150,402 |
|
|
|
140,459 |
|
Tangible shareholders’ equity
(1) |
|
155,056 |
|
|
|
150,402 |
|
|
|
140,459 |
|
Share and Per Share
Data |
|
|
|
|
|
Earnings per share -
basic |
$ |
0.33 |
|
|
$ |
0.38 |
|
|
$ |
0.51 |
|
Earnings per share -
diluted |
$ |
0.32 |
|
|
$ |
0.37 |
|
|
$ |
0.49 |
|
Book value per share |
$ |
12.41 |
|
|
$ |
12.04 |
|
|
$ |
10.95 |
|
Tangible book value per share
(1) |
$ |
12.41 |
|
|
$ |
12.04 |
|
|
$ |
10.95 |
|
Weighted avg outstanding
shares - basic |
|
12,261,101 |
|
|
12,387,392 |
|
|
12,740,933 |
Weighted avg outstanding
shares - diluted |
|
12,752,051 |
|
|
12,868,207 |
|
|
13,218,403 |
Shares outstanding at end of
period |
|
12,493,565 |
|
|
12,493,565 |
|
|
12,831,345 |
Capital
Ratios |
|
|
|
|
|
Total shareholders' equity to
total assets |
|
26.5 |
% |
|
|
27.1 |
% |
|
|
35.0 |
% |
Tangible shareholders’ equity
to tangible assets (1) |
|
26.5 |
% |
|
|
27.1 |
% |
|
|
35.0 |
% |
Leverage Ratio (Bank under
CBLR) |
|
20.7 |
% |
|
|
22.1 |
% |
|
|
25.1 |
% |
(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. 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. We had no goodwill or other intangible
assets as of any of the dates indicated. We have not considered
loan servicing rights or loan trailing fee asset as intangible
assets for purposes of this calculation. As a result, tangible
shareholders’ equity is the same as total shareholders’ equity as
of each of the dates indicated.
Reconciliation of Non-GAAP to GAAP Financial
Measures
Efficiency
ratio |
Three Months
Ended |
|
For the Years
Ended |
|
|
12/31/2023 |
|
|
|
9/30/2023 |
|
|
|
12/31/2022 |
|
|
|
12/31/2023 |
|
|
|
12/31/2022 |
|
($s in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest expense |
$ |
11,381 |
|
|
$ |
10,070 |
|
|
$ |
10,220 |
|
|
$ |
40,188 |
|
|
$ |
38,756 |
|
Net interest income |
|
14,367 |
|
|
|
14,411 |
|
|
|
12,646 |
|
|
|
54,559 |
|
|
|
50,895 |
|
Total non-interest income |
|
6,035 |
|
|
|
5,229 |
|
|
|
9,775 |
|
|
|
21,080 |
|
|
|
37,411 |
|
Adjusted operating revenue |
$ |
20,402 |
|
|
$ |
19,640 |
|
|
$ |
22,421 |
|
|
$ |
75,639 |
|
|
$ |
88,306 |
|
Efficiency ratio |
|
55.8 |
% |
|
|
51.3 |
% |
|
|
45.6 |
% |
|
|
53.1 |
% |
|
|
43.9 |
% |
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