EX-99.1 2 fin-20240331earningsrelease.htm EX-99.1 Document
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FINWISE BANCORP REPORTS FIRST QUARTER RESULTS
- Net Income of $3.3 Million for First Quarter of 2024 -
- Diluted Earnings Per Share of $0.25 for First Quarter of 2024 -


MURRAY, UTAH, April 29, 2024 (GLOBE NEWSWIRE) FinWise Bancorp (NASDAQ: FINW) (“FinWise” or the “Company”), parent company of FinWise Bank (the “Bank”), today announced results for the quarter ended March 31, 2024.
First Quarter 2024 Highlights
Loan originations were $1.1 billion, compared to $1.2 billion for the quarter ended December 31, 2023, and $0.9 billion for the first quarter of the prior year
Net interest income was $14.0 million, compared to $14.4 million for the quarter ended December 31, 2023, and $12.1 million for the first quarter of the prior year
Net Income was $3.3 million, compared to $4.2 million for the quarter ended December 31, 2023, and $3.9 million for the first quarter of the prior year
Diluted earnings per share (“EPS”) were $0.25 for the quarter, compared to $0.32 for the quarter ended December 31, 2023, and $0.29 for the first quarter of the prior year
Efficiency ratio was 60.6%, compared to 55.8% for the quarter ended December 31, 2023, and 52.5% for the first quarter of the prior year (1)
Annualized return on average equity (ROAE) was 8.4%, compared to 10.8% in the quarter ended December 31, 2023, and 11.1% in the first quarter of the prior year
Non-performing loans were $26.0 million as of March 31, 2024, compared to $27.1 million as of December 31, 2023, and $1.8 million as of March 31, 2023(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 $14.8 million, $15.0 million, and $1.1 million, respectively, as of March 31, 2024, December 31, 2023, and March 31, 2023 is guaranteed by the SBA.

"We are pleased with the first quarter’s robust loan originations and encouraging credit quality performance, which highlights the resiliency of our differentiated business model.” said Kent Landvatter, Chief Executive Officer of FinWise. “We also remained laser focused on executing our strategic initiatives during the quarter as we announced new lending and payments agreements, continued to build out our Payments Hub and BIN Sponsorship platform and deepened our executive bench. In addition, given our strong balance sheet and earnings power, we announced a new share repurchase program. While macro uncertainties persist, we remain on track to deliver on our target to further diversify our business model, which we expect will continue to enhance the Company’s long-term growth.”

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Selected Financial Data
For the Three Months Ended
($s in thousands, except per share amounts)3/31/202412/31/20233/31/2023
Net Income$3,315$4,156$3,861
Diluted EPS$0.25$0.32$0.29
Return on average assets2.2 %2.9 %3.8 %
Return on average equity8.4 %10.8 %11.1 %
Yield on loans14.80 %16.21 %17.24 %
Cost of deposits4.71 %4.82 %3.18 %
Net interest margin10.12 %10.61 %12.51 %
Efficiency ratio(1)
60.6 %55.8 %52.5 %
Tangible book value per share(2)
$12.70$12.41$11.26
Tangible shareholders’ equity to tangible assets(2)
26.6 %26.5 %32.6 %
Leverage Ratio (Bank under CBLR)20.6 %20.7 %24.0 %
Full-time Equivalent (FTEs)
175162140
(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. 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 Income
Net income was $3.3 million for the first quarter of 2024, compared to $4.2 million for the fourth quarter of 2023 and $3.9 million for the first quarter of 2023. The decrease from the prior quarter was primarily due to a decrease in non-interest income resulting from a decline in the fair value of the Company’s investment in Business Funding Group (“BFG”) and lower strategic program fees, an increase in non-interest expense due to increases in salaries and employee benefits and other operating expenses driven by increased spending on business infrastructure, and a decrease in net interest income as our exposure to high rate consumer loans continues to decline. The decrease from the prior year period was primarily due to increases in salaries and employee benefits expense and other expenses driven by increased spending on business infrastructure and was offset in part by increases in net interest income driven by growth in the loans held for investment portfolio and non-interest income resulting from higher fees and gains on sale of loans.

Net Interest Income
Net interest income was $14.0 million for the first quarter of 2024, compared to $14.4 million for the fourth quarter of 2023 and $12.1 million for the first quarter of 2023. The decrease from the prior quarter was primarily due to lower yields earned on the Bank’s loan balances as the Bank continues to step away from high yield loans, partially offset by increases on 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 paid on deposits and increased average interest-bearing deposit balances.

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Loan originations totaled $1.1 billion for the first quarter of 2024, compared to $1.2 billion for the prior quarter and $0.9 billion for the prior year period. Through the first four weeks of April, originations are tracking at roughly the same level as first quarter of 2024 originations.

Net interest margin for the first quarter of 2024 was 10.12%, compared to 10.61% for the prior quarter and 12.51% for the prior year period. The decrease from the prior quarter is primarily attributable to the decreased yields and average balances in the loans held for sale portfolio and was partially offset by volume increases in the loans held for investment portfolio. The decrease from the prior year period was primarily due to increases in net earning assets while the yield on those assets declined coupled with an increase in the funding costs.

Provision for Credit Losses
The Company’s provision for credit losses was $3.2 million for the first quarter of 2024, compared to $3.2 million for the prior quarter and $2.7 million for the prior year period. The provision remained stable when compared to the prior quarter as we continue to reduce the Strategic Program loans held for investment while growing our loan portfolio. Provision for credit losses for the first quarter of 2024 increased when compared to the prior year period due primarily to qualitative factor adjustments based on the increase in nonperforming assets primarily related to the SBA portfolio toward the latter part of 2023. Non-performing assets stabilized in the first quarter of 2024 compared to recent quarters.

Non-interest Income
For the Three Months Ended
($ in thousands)3/31/202412/31/20233/31/2023
Noninterest income:   
Strategic Program fees$3,965 $4,229 $3,685 
Gain on sale of loans415 440 187 
SBA loan servicing fees466 450 591 
Change in fair value on investment in BFG(124)200 (300)
Other miscellaneous income742 716 364 
Total noninterest income$5,464 $6,035 $4,527 

Non-interest income was $5.5 million for the first quarter of 2024, compared to $6.0 million for the prior quarter and $4.5 million for the prior year period. The decrease from the prior quarter was primarily due to the change in the fair value of the Company’s investment in BFG and a decrease in Strategic Program fees primarily due to lower originations. The increase from the prior year period was mainly due to an increase in miscellaneous income related to increased revenue from growth in the Company’s commercial operating lease portfolio and higher Strategic Program fees and gain on sales.

Non-interest Expense
For the Three Months Ended
($ in thousands)3/31/202412/31/20233/31/2023
Non-interest expense   
Salaries and employee benefits$7,562 $7,396 $5,257 
Professional services1,567 1,433 1,474 
Occupancy and equipment expenses980 923 712 
(Recovery) impairment of SBA servicing asset(198)(122)(253)
Other operating expenses1,896 1,751 1,547 
Total noninterest expense$11,807 $11,381 $8,737 

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Non-interest expense was $11.8 million for the first quarter of 2024, compared to $11.4 million for the prior quarter and $8.7 million for the prior year period. The increase from the prior quarter was primarily due to an increase in salaries and employee benefits and other operating expenses driven by increased spending to develop the business infrastructure to stand up the new initiatives and govern our growing business. The increase from the prior year period was primarily due to an increase in salaries and employee benefits and other operating expenses driven by increased spending on business infrastructure along with an increase in occupancy and equipment expenses reflecting the growth in our business.

Reflecting the expenses incurred to develop our business infrastructure build, the Company’s efficiency ratio was 60.6% for the first quarter of 2024, compared to 55.8% for the prior quarter and 52.5% for the prior year period.

Tax Rate
The Company’s effective tax rate was 26.5% for the first quarter of 2024, compared to 28.5% for the prior quarter and 26.1% for the prior year period. The decrease from the prior quarter was due primarily to resolution of state tax matters in the prior quarter.

Balance Sheet
The Company’s total assets were $610.8 million as of March 31, 2024, an increase from $586.2 million as of December 31, 2023 and $442.3 million as of March 31, 2023. The increase from December 31, 2023 was primarily due to continued growth in the Company’s commercial leases, SBA, and Strategic Program loans held-for-sale loan portfolios. The increase in total assets compared to March 31, 2023 was primarily due to increases in deposits to support growth in the Company’s SBA, commercial leases, Strategic Program loans held-for-sale, and owner occupied commercial real estate loan portfolios. Also contributing to the total asset increase for both comparison periods was the Company’s ownership increase in its investment in Business Funding Group (“BFG”). The growth in the loan assets was funded in large part by the growth in deposits.

The following table shows the gross loans held for investment balances as of the dates indicated:
3/31/202412/31/20233/31/2023
($s in thousands)
Amount% of total loansAmount% of total loansAmount% of total loans
SBA$247,810 63.4 %$239,922 64.5 %$178,663 65.6 %
Commercial leases46,690 11.9 %38,110 10.2 %15,057 5.5 %
Commercial, non-real estate2,077 0.5 %2,457 0.7 %2,833 1.0 %
Residential real estate39,006 10.0 %38,123 10.2 %30,994 11.4 %
Strategic Program loans17,216 4.4 %19,408 5.2 %21,393 7.9 %
Commercial real estate:
     Owner occupied21,300 5.4 %20,798 5.6 %15,161 5.6 %
     Non-owner occupied2,155 0.6 %2,025 0.5 %1,861 0.7 %
Consumer14,689 3.8 %11,372 3.1 %6,351 2.3 %
Total period end loans
$390,943 100.0 %$372,215 100.0 %$272,313 100.0 %
Note: SBA loans as of March 31, 2024, December 31, 2023 and March 31, 2023 include $141.7 million, $131.7 million and $75.9 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 March 31, 2024, December 31, 2023 and March 31, 2023 was $2.7 million, $3.6 million and $6.9 million, respectively.

Total gross loans held for investment as of March 31, 2024 were $390.9 million, an increase from $372.2 million and $272.3 million as of December 31, 2023 and March 31, 2023, respectively. The increase compared to December 31, 2023 was primarily due to increases in the commercial leases, SBA 7(a), and consumer loan
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portfolios. The increase compared to March 31, 2023 was primarily due to increases in the SBA 7(a), commercial leases, consumer, and residential real estate loan portfolios.

The following table shows the Company’s deposit composition as of the dates indicated:
As of
3/31/202412/31/20233/31/2023
($s in thousands)
AmountPercentAmountPercentAmountPercent
Noninterest-bearing demand deposits
$107,076 25.2 %$95,486 23.6 %$79,930 28.3 %
Interest-bearing deposits:
Demand
48,279 11.4 %50,058 12.4 %42,031 14.8 %
Savings
11,206 2.6 %8,633 2.1 %7,963 2.8 %
Money market
9,935 2.3 %11,661 2.8 %12,993 4.6 %
Time certificates of deposit
247,600 58.4 %238,995 59.0 %140,276 49.5 %
Total period end deposits
$424,096 100.0 %$404,833 100.0 %$283,193 100.0 %

Total deposits as of March 31, 2024 increased to $424.1 million from $404.8 million and $283.2 million as of December 31, 2023 and March 31, 2023, respectively. The increase from December 31, 2023 was driven primarily by an increase in noninterest-bearing demand deposits and brokered time certificates of deposit. The increase from March 31, 2023 was driven primarily by an increase in brokered time certificate of deposits and noninterest-bearing demand deposits. As of March 31, 2024, 32.4% of deposits at the Bank level were uninsured, compared to 31.1% as of December 31, 2023, and 36.1% as of March 31, 2023. As of March 31, 2024, 5.9% of total deposits at the Bank were required under the Company’s Strategic Program agreements and an additional 9.6% were associated with other accounts owned by the Company or the Bank.

Total shareholders’ equity as of March 31, 2024 increased $7.4 million to $162.5 million from $155.1 million at December 31, 2023. Compared to March 31, 2023, total shareholders’ equity increased by $18.1 million from $144.4 million. The increase from December 31, 2023 was primarily due to the additional capital issued in exchange for the Company’s increased ownership in BFG as well as the Company’s net income. The increase from March 31, 2023 was primarily due to the Company’s net income as well as the aforementioned BFG transaction, partially offset by the repurchase of common stock under the Company’s various repurchase programs.

Bank Regulatory Capital Ratios
The 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
3/31/2024 12/31/2023 3/31/2023 Well-Capitalized Requirement
Leverage Ratio
20.6%20.7%24.0%9.0%

The leverage ratio decrease from the prior year period primarily results from the growth in the loan portfolio. The Bank’s capital levels remain significantly above well-capitalized guidelines as of March 31, 2024.

Share Repurchase Program
As of March 31, 2024, the Company has repurchased a total of 17,697 shares for $0.2 million under the Company’s share repurchase program announced in March 2024.

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Definitive Agreement
The 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. On February 5, 2024, the transaction closed increasing the Company’s total equity ownership of BFG to 20%.

Asset Quality
Nonperforming loans were $26.0 million, or 6.6% of total loans receivable, as of March 31, 2024, compared to $27.1 million or 7.3% of total loans receivable, as of December 31, 2023 and $1.8 million or 0.7% as of March 31, 2023. Of the $26.0 million, $27.1 million, and $1.8 million nonperforming loans as of March 31, 2024, December 31, 2023, and March 31, 2023, respectively, $14.8 million, $15.0 million, and $1.1 million, respectively, are guaranteed by the SBA and $11.2 million, $12.1 million, and $0.7 million, respectively, is the balance of loans which do not carry SBA guarantees. The decrease in nonperforming loans from the prior quarter was primarily attributable to loans returning to performing status and charge-offs The increase in nonperforming loans from the prior year 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 3.2% as of March 31, 2024 compared to 3.5% as of December 31, 2023 and 4.4% as of March 31, 2023. 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 first quarter of 2024, the Company’s net charge-offs were $3.4 million consistent with the net charge-offs recorded during the prior quarter and $2.9 million for the prior year period. The increase compared to the first quarter of 2023 was primarily due to increased charge-offs related to the Company’s SBA portfolio, lease financing receivables and consumer loans.

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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)
3/31/202412/31/20233/31/2023
Allowance for Credit Losses:
  
Beginning Balance(1)
$12,888 $12,986 $11,985 
Impact of ASU 2016-13 Adoption257 
Adjusted Beginning Balance12,888 12,986 12,242 
Provision for Credit Losses(2)
3,145  3,272  2,668 
Charge offs
  
Construction and land development  
Residential real estate(64)(104)
Residential real estate multifamily
Commercial real estate
Owner occupied(525)(561)(122)
Non-owner occupied
Commercial and industrial(54)(281)(18)
Consumer(41)(22)
Lease financing receivables(111)
Strategic Program loans(2,946)(2,656)(3,025)
Recoveries
Construction and land development
Residential real estate53 
Residential real estate multifamily
Commercial real estate
Owner occupied
Non-owner occupied(11)
Commercial and industrial
Consumer
Lease financing receivables
Strategic Program loans284 261 284 
Ending Balance
$12,632 $12,888 $12,034 

Asset Quality Ratios
As of and For the Three Months Ended
($s in thousands, annualized ratios)
3/31/202412/31/20233/31/2023
Nonperforming loans*
$25,996 $27,127 $1,809 
Nonperforming loans to total loans held for investment
6.6 %7.3 %0.7 %
Net charge offs to average loans held for investment
3.5 %3.8 %4.4 %
Allowance for credit losses to loans held for investment
3.2 %3.5 %4.4 %
Net charge offs
$3,401 $3,370 $2,876 
(1) The Company adopted ASU 2016-13 as of January 1, 2023.
(2) Excludes the provision for unfunded commitments.
*Nonperforming loans as of March 31, 2024, December 31, 2023, and March 31, 2023 include $14.8 million, $15.0 million, and $1.1 million, respectively, of SBA 7(a) loan balances that are guaranteed by the SBA.

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Webcast and Conference Call Information
FinWise will host a conference call today at 5:30 PM ET to discuss its financial results for the first quarter of 2024. A simultaneous audio webcast of the conference call will be available on the Company’s investor relations section of the website https://viavid.webcasts.com/starthere.jsp?ei=1662318&tp_key=059546c4bc.

The dial-in number for the conference call is (877) 423-9813 (toll-free) or (201) 689-8573 (international). The conference ID is 13745237. 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

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"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 Fintech Banking Solutions service providers to comply with regulatory regimes, and the Company’s ability to adequately oversee and monitor its Strategic Program and Fintech Banking 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 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
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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 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.

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.
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FINWISE BANCORP
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
($s in thousands)
As of
 3/31/2024 12/31/2023 3/31/2023

(Unaudited)
(Unaudited)
ASSETS
 
Cash and cash equivalents  
Cash and due from banks
$3,944  $411  $384 
Interest-bearing deposits
111,846 116,564 105,225
Total cash and cash equivalents
115,790 116,975 105,609
Investment securities held-to-maturity, at cost
14,820 15,388 13,880
Investment in Federal Home Loan Bank (FHLB) stock, at cost
349 238 449
Strategic Program loans held-for-sale, at lower of cost or fair value54,947 47,514 25,413
Loans receivable, net
377,101 358,560 260,221
Premises and equipment, net
15,098 14,630 9,198
Accrued interest receivable
3,429 3,573 2,174
Deferred taxes, net
  1,319
SBA servicing asset, net
4,072 4,231 5,284
Investment in Business Funding Group (BFG), at fair value
8,200 4,200 4,500
Operating lease right-of-use (“ROU”) assets
4,104 4,293 4,855
         Income tax receivable, net
2,4002,400
Other assets
10,523 14,219 9,397
Total assets
$610,833  $586,221  $442,299 
    
LIABILITIES AND SHAREHOLDERS’ EQUITY
    
Liabilities
    
Deposits
    
Noninterest-bearing
$107,076 $95,486 $79,930 
Interest-bearing
317,020 309,347203,262
Total deposits
424,096 404,833283,192
Accrued interest payable
588 619117
Income taxes payable, net
3,207 1,8732,511
Deferred taxes, net
508748
PPP Liquidity Facility
158 190283
Operating lease liabilities
6,046 6,2966,781
Other liabilities
13,748 16,6065,062
Total liabilities
448,351 431,165297,946
    
Shareholders’ equity
    
Common Stock
13 1213
Additional paid-in-capital
55,304 51,20054,827
Retained earnings
107,165 103,84489,513
Total shareholders’ equity
162,482 155,056 144,353
Total liabilities and shareholders’ equity
$610,833  $586,221  $442,299 



11


FINWISE BANCORP
CONSOLIDATED STATEMENTS OF INCOME
($s in thousands, except per share amounts; Unaudited)

 For the Three Months Ended
 3/31/202412/31/2023 3/31/2023
Interest income
  
Interest and fees on loans
$16,035 $16,192  $12,342 
Interest on securities
101  101  72 
Other interest income
1,509  1,759  987 
Total interest income
17,645  18,052  13,401 
   
Interest expense
  
Interest on deposits
3,639  3,685  1,295 
Total interest expense
3,639  3,685  1,295 
Net interest income
14,006  14,367  12,106 
   
Provision for credit losses
3,154  3,210  2,671 
Net interest income after provision for credit losses
10,852  11,157  9,435 
   
Non-interest income
  
Strategic Program fees
3,965  4,229  3,685 
Gain on sale of loans, net
415  440  187 
SBA loan servicing fees
466  450  591 
Change in fair value on investment in BFG
(124) 200  (300)
Other miscellaneous income
742  716  364 
Total non-interest income
5,464  6,035  4,527 
   
Non-interest expense
  
Salaries and employee benefits
7,562  7,396  5,257 
Professional services
1,567  1,433  1,474 
Occupancy and equipment expenses
980  923  712 
(Recovery) impairment of SBA servicing asset
(198) (122) (253)
Other operating expenses
1,896  1,751  1,547 
Total non-interest expense
11,807  11,381  8,737 
Income before income tax expense
4,509  5,811  5,225 
   
Provision for income taxes
1,194  1,655  1,364 
Net income
$3,315 $4,156  $3,861 

Earnings per share, basic
$0.26 $0.33 $0.30 
Earnings per share, diluted
$0.25 $0.32 $0.29 

Weighted average shares outstanding, basic
12,502,44812,261,10112,708,326
Weighted average shares outstanding, diluted
13,041,60512,752,05113,172,288
Shares outstanding at end of period
12,793,55512,493,56512,824,572

12


FINWISE BANCORP
AVERAGE BALANCES, YIELDS, AND RATES
($s in thousands; Unaudited)

For the Three Months Ended
3/31/202412/31/20233/31/2023

Average BalanceInterestAverage Yield/RateAverage BalanceInterestAverage Yield/RateAverage BalanceInterestAverage Yield/Rate
Interest earning assets:
     
   Interest bearing deposits
$111,911  $1,509  5.42 %$125,462  $1,759  5.56 %$88,038 $987 4.55 %
   Investment securities
15,174 101 2.67 % 15,670 101 2.56 % 14,142 722.07 %
   Strategic Program loans held for sale
42,452 3,475 32.93 % 45,370 4,307 37.66 % 31,041 3,06139.99 %
   Loans held for investment
387,300 12,560 13.04 % 350,852 11,885 13.44 % 259,383 9,28114.51 %
   Total interest earning assets
556,837 17,645 12.74 % 537,354 18,052 13.33 % 392,604 13,40113.84 %
Non-interest earning assets
39,123   32,202   22,813 
Total assets
$595,960   $569,556   $415,417  
Interest bearing liabilities:
         
   Demand
$51,603  $503  3.92 %$47,784  $562  4.67 %$41,532 $385 3.76 %
   Savings
9,301 19 0.83 % 8,096 13 0.65 % 8,313100.50 %
   Money market accounts
10,200 66 2.60 % 13,419 53 1.55 % 12,089 581.96 %
   Certificates of deposit
239,577 3,051 5.12 % 234,088 3,057 5.18 % 103,225 8423.31 %
   Total deposits
310,681 3,639 4.71 % 303,387 3,685 4.82 % 165,159 1,2953.18 %
   Other borrowings
172  0.35 % 206  0.35 % 297 0.35 %
   Total interest bearing liabilities
310,853 3,639 4.71 % 303,593 3,685 4.82 % 165,456 1,2953.18 %
Non-interest bearing deposits
100,507   92,767   91,701 
Non-interest bearing liabilities
25,446   21,099   16,602 
Shareholders’ equity
159,154   152,097   141,658 
Total liabilities and shareholders’ equity
$595,960   

$569,556   $415,417 $415,417  
Net interest income and interest rate spread
  $14,006  8.04 %   $14,367  8.51 %$12,106 $12,106 10.67 %
Net interest margin
    10.12 %     10.61 %12.51 %
Ratio of average interest-earning assets to average interest- bearing liabilities
    179.13 %     177.00 %237.29 %



13


FINWISE BANCORP
SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA
($s in thousands, except per share amounts; Unaudited)
 As of and for the Three Months Ended
 3/31/2024 12/31/2023 3/31/2023
Selected Loan Metrics
Amount of loans originated
$1,091,479  $1,177,704  $908,190 
Selected Income Statement Data
  
Interest income
$17,645  $18,052  $13,401 
Interest expense
3,639  3,685  1,295 
Net interest income14,006  14,367  12,106 
Provision for credit losses
3,154  3,210  2,671 
Net interest income after provision for credit losses
10,852  11,157  9,435 
Non-interest income
5,464  6,035  4,527 
Non-interest expense
11,807  11,381  8,737 
Provision for income taxes
1,194  1,655  1,364 
Net income3,315  4,156  3,861 
Selected Balance Sheet Data
  
Total Assets
$610,833  $586,221  $442,299 
Cash and cash equivalents115,790  116,975  105,609 
Investment securities held-to-maturity, at cost
14,820  15,388  13,880 
Loans receivable, net
377,101  358,560  260,221 
Strategic Program loans held-for-sale, at lower of cost or fair value
54,947  47,514  25,413 
SBA servicing asset, net
4,072  4,231  5,284 
Investment in Business Funding Group, at fair value
8,200  4,200  4,500 
Deposits
424,096  404,833  283,192 
Total shareholders' equity162,482  155,056  144,353 
Tangible shareholders’ equity (1)
162,482  155,056  144,353 
Share and Per Share Data
  
Earnings per share - basic
$0.26  $0.33  $0.30 
Earnings per share - diluted
$0.25  $0.32  $0.29 
Book value per share
$12.70 $12.41 $11.26 
Tangible book value per share (1)
$12.70  $12.41  $11.26 
Weighted avg outstanding shares - basic
12,502,448 12,261,101 12,708,326
Weighted avg outstanding shares - diluted
13,041,605 12,752,051 13,172,288
Shares outstanding at end of period12,793,555 12,493,565 12,824,572
Capital Ratios
Total shareholders' equity to total assets
26.6 %26.5 %32.6 %
Tangible shareholders’ equity to tangible assets (1)
26.6 %26.5 %32.6 %
Leverage Ratio (Bank under CBLR)
20.6 %20.7 %24.0 %
(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.
14


Reconciliation of Non-GAAP to GAAP Financial Measures
 Efficiency ratio
Three Months Ended
 3/31/202412/31/20233/31/2023
($s in thousands)
  
Non-interest expense$11,807 $11,381 $8,737 
Net interest income14,006  14,367  12,106 
Total non-interest income5,464  6,035  4,527 
Adjusted operating revenue
$19,470 $20,403 $16,633 
Efficiency ratio60.6 % 55.8 % 52.5 %



15