FinWise Bancorp Reports Fourth Quarter and Full Year 2024 Results

- Loan Originations of $5.0 Billion for 2024, including $1.3 Billion for Fourth Quarter - - Net Income of $12.7 Million for 2024, including $2.8 Million for Fourth Quarter - - Diluted Earnings Per Share of $0.93 for 2024, including $0.20 for Fourth Quarter - MURRAY, Utah, Jan. 30, 2025 (GLOBE NEWSWIRE) -- FinWise Bancorp (NASDAQ: FINW) (“FinWise” or the “Company”), parent company of FinWise Bank (the “Bank”), today announced results for the quarter and fiscal year ended December 31, 2024. Fourth Quarter 2024 Highlights Loan originations totaled $1.3 billion, compared to $1.4 billion for the quarter ended September 30, 2024, and $1.2 billion for the fourth quarter of the prior yearNet interest income was $15.5 million, compared to $14.8 million for the quarter ended September 30, 2024, and $14.4 million for the fourth quarter of the prior yearNet income was $2.8 million, compared to $3.5 million for the quarter ended September 30, 2024, and $4.2 million for the fourth quarter of the prior yearDiluted earnings per share (“EPS”) were $0.20 for the quarter, compared to $0.25 for the quarter ended September 30, 2024, and $0.32 for the fourth quarter of the prior yearEfficiency ratio1 was 64.2%, compared to 67.5% for the quarter ended September 30, 2024, and 56.0% for the fourth quarter of the prior yearNonperforming loan balances were $36.4 million as of December 31, 2024, compared to $30.6 million as of September 30, 2024, and $27.1 million as of December 31, 2023. Nonperforming loan balances guaranteed by the Small Business Administration (“SBA”) were $19.2 million, $17.8 million, and $15.0 million as of December 31, 2024, September 30, 2024, and December 31, 2023, respectively “Our fourth quarter results capped off a strong 2024 for FinWise, as we made significant progress in our goal to expand and diversify our sources of revenue to enhance the company’s long-term growth,” said Kent Landvatter, CEO of FinWise. “We were also pleased with the rebound in loan originations from existing programs, as well as the number of new strategic programs we announced, including four new Lending programs, two of which include our Credit Enhancement product, one Payments and one Credit Card program. As we look ahead to 2025, we are excited about the outlook, and currently anticipate continued stability in originations from existing programs, acceleration in production from new and ramping programs, a strong pipeline for new partners and remain committed to generating positive operating leverage.” ____________________ 1 See “Reconciliation of Non-GAAP to GAAP Financial Measures” for a reconciliation of this non-GAAP measure. Selected Financial and Other Data ($ in thousands, except per share amounts)As of and for the Three Months Ended As of and for the Years Ended 12/31/2024 9/30/2024 12/31/2023 12/31/2024 12/31/2023Amount of loans originated$1,305,028 $1,448,251 $1,177,704 $5,015,662 $4,303,361 Net income$2,793 $3,454 $4,156 $12,742 $17,460 Diluted EPS$0.20 $0.25 $0.32 $0.93 $1.33 Return on average assets 1.6% 2.1% 2.9% 2.0% 3.5%Return on average equity 6.5% 8.3% 10.8% 7.7% 11.9%Yield on loans 14.01% 14.16% 16.21% 14.47% 17.05%Cost of interest-bearing deposits 4.30% 4.85% 4.82% 4.57% 4.22%Net interest margin 10.00% 9.70% 10.61% 9.99% 11.65%Efficiency ratio(1) 64.2% 67.5% 56.0% 64.9% 53.4%Tangible book value per share(2)$13.15 $12.90 $12.41 $13.15 $12.41 Tangible shareholders’ equity to tangible assets(2) 23.3% 24.9% 26.5% 23.3% 26.5%Leverage ratio (Bank under CBLR) 20.6% 20.3% 20.7% 20.6% 20.7%Full-time equivalent employees 196 194 162 196 162 (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 $15.5 million for the fourth quarter of 2024, compared to $14.8 million for the prior quarter and $14.4 million for the prior year period. The increase from the prior quarter was primarily due to an average balance increase in the loans held for investment (“HFI”) portfolio and a decrease in yields paid on interest-earning deposits, principally certificate of deposits. Further contributing to the increase from the prior quarter was a third quarter 2024 decrease in net interest income of $0.5 million for accrued interest not previously reversed at the time loans were deemed nonperforming. The increase from the prior year period was primarily due to increases in the average balances of loans held-for-sale and loans HFI portfolios and was partially offset by yield decreases on those same portfolios as well as decreased volumes and rates paid on the Company’s interest bearing deposits. Loan originations totaled $1.3 billion for the fourth quarter, compared to $1.4 billion for the prior quarter of 2024 and $1.2 billion for the prior year period. Net interest margin for the fourth quarter of 2024 was 10.00%, compared to 9.70% for the prior quarter and 10.61% for the prior year period. The increase in net interest margin from the prior quarter is primarily attributable to the current quarter decrease in the cost of certificates of deposits and the growth in the overall loan portfolio. The decrease from the prior year period 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. Provision for Credit LossesThe Company’s provision for credit losses was $3.9 million for the fourth quarter of 2024, compared to $2.2 million for the prior quarter and $3.2 million for the prior year period. The provision for credit losses increased when compared to the prior quarter and prior year period due primarily to a net charge-off on the non-guaranteed portion of SBA loans in the fourth quarter of 2024 of $1.0 million. Non-interest Income Three Months Ended($ in thousands)12/31/2024 9/30/2024 12/31/2023Non-interest income Strategic Program fees$4,899 $4,862 $4,229 Gain on sale of loans 872 393 440 SBA loan servicing fees, net 181 87 572 Change in fair value on investment in BFG (200) (100) 200 Credit enhancement income 25 47 — Other miscellaneous income (174) 765 716 Total non-interest income$5,603 $6,054 $6,157 The decrease in non-interest income from the prior quarter and prior year period was primarily due to a decrease in other miscellaneous income resulting from the $0.9 million charge-off of unamortized premium on approximately $160.0 million of callable CDs which were called during the fourth quarter of 2024 and replaced with lower cost CDs. This decrease was partially offset by the $0.5 million gain on sale of the guaranteed portion of SBA loans that occurred during the fourth quarter of 2024. Non-interest Expense Three Months Ended($ in thousands)12/31/2024 9/30/2024 12/31/2023Non-interest expense Salaries and employee benefits$9,375 $9,659 $7,396 Professional services 556 1,331 1,433 Occupancy and equipment expenses 1,094 1,046 923 Credit enhancement expense 5 3 — Other operating expenses 2,534 2,010 1,751 Total non-interest expense$13,564 $14,049 $11,503 The decrease in non-interest expense from the prior quarter was primarily due to a decrease in salaries and employee benefits resulting from bonus accrual reductions and a decrease in professional services expense resulting from a reduction in accruals for legal services. 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 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 64.2% for the fourth quarter of 2024, compared to 67.5% for the prior quarter and 56.0% 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 developed. Tax RateThe Company’s effective tax rate was 24.3% for the fourth quarter of 2024, compared to 25.1% for the prior quarter and 28.5% for the prior year period. The decrease from the prior quarter was due primarily to more favorable resolution of historical state tax matters during the fourth 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 $2.8 million for the fourth quarter of 2024, compared to $3.5 million for the prior quarter and $4.2 million for the prior year period. The changes in net income for the three months ended December 31, 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 $746.0 million as of December 31, 2024, an increase from $683.0 million as of September 30, 2024 and $586.2 million as of December 31, 2023. The increase in total assets from September 30, 2024 was primarily due to continued growth in the Company’s loans HFI, net, and loans held-for-sale portfolios of $29.7 million and $7.6 million, respectively, as well as an increase of $21.5 million in interest-bearing cash deposits. The increase in total assets compared to December 31, 2023 was primarily due to increases in the Company’s loans HFI, net, and loans held-for-sale portfolios of $89.3 million and $44.1 million, respectively, as well as an increase in investment securities available-for-sale of $29.9 million, partially offset by a decrease of $17.0 million in interest-bearing deposits. The following table shows the gross loans HFI balances as of the dates indicated: 12/31/2024 9/30/2024 12/31/2023($ in thousands)Amount % of totalloans Amount % of totalloans Amount % of totalloansSBA$255,056 54.8% $251,439 57.9% $239,922 64.5%Commercial leases 70,153 15.1% 64,277 14.8% 38,110 10.2%Commercial, non-real estate 3,691 0.8% 3,025 0.7% 2,457 0.7%Residential real estate 51,574 11.1% 41,391 9.5% 38,123 10.2%Strategic Program loans 20,122 4.3% 19,409 4.5% 19,408 5.2%Commercial real estate: Owner occupied 41,046 8.8% 32,480 7.5% 20,798 5.6%Non-owner occupied 1,379 0.3% 2,736 0.7% 2,025 0.5%Consumer 22,212 4.8% 19,206 4.4% 11,372 3.1%Total period end loans$465,233 100.0% $433,963 100.0% $372,215 100.0% Note: SBA loans as of December 31, 2024, September 30, 2024 and December 31, 2023 include $158.7 million, $156.3 million and $131.7 million, respectively, of SBA 7(a) loan balances that are guaranteed by the SBA. The HFI balance on Strategic Program loans with annual interest rates below 36% as of December 31, 2024, September 30, 2024 and December 31, 2023 was $3.1 million, $3.2 million and $3.6 million, respectively. Total gross loans HFI as of December 31, 2024 increased compared to September 30, 2024 and December 31, 2023. The Company experienced growth across all loan portfolios, with the exception of non-owner occupied CRE, consistent with its strategy to increase its loan portfolio with higher quality, lower rate loans. The following table shows the Company’s deposit composition as of the dates indicated: As of12/31/2024 9/30/2024 12/31/2023($ in thousands)Amount Percent Amount Percent Amount PercentNoninterest-bearing demand deposits$126,782 23.3% $142,785 29.2% $95,486 23.6%Interest-bearing deposits: Demand 71,403 13.1% 58,984 12.1% 50,058 12.4%Savings 9,287 1.7% 9,592 1.9% 8,633 2.1%Money market 16,709 3.0% 15,027 3.1% 11,661 2.9%Time certificates of deposit 320,771 58.9% 262,271 53.7% 238,995 59.0%Total period end deposits$544,952 100.0% $488,659 100.0% $404,833 100.0% The increase in total deposits from September 30, 2024 and December 31, 2023 was driven primarily by increases in brokered time certificates of deposits, which were added to fund loan growth and increase balance sheet liquidity. The increase in total deposits from December 31, 2023 was also driven primarily by an increase in noninterest-bearing demand deposits and interest-bearing demand deposits, primarily due to growth from new and existing customer relationships. Total shareholders’ equity as of December 31, 2024 increased $3.4 million to $173.7 million from $170.4 million at September 30, 2024. Compared to December 31, 2023, total shareholders’ equity increased by $18.7 million from $155.1 million. The increase from September 30, 2024 was primarily due to the Company’s net income. The increase from December 31, 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 Ratios12/31/2024 9/30/2024 12/31/2023 Well-Capitalized RequirementLeverage ratio 20.6% 20.3% 20.7% 9.0% The leverage ratio increase from the prior quarter resulted primarily from earnings generated by operations growing at a faster pace than average assets. The slight decrease in the leverage ratio 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 December 31, 2024. Share Repurchase ProgramSince the share repurchase program’s inception in March 2024 through December 31, 2024, the Company has repurchased a total of 44,608 shares for $0.5 million. There were no shares repurchased during the fourth quarter of 2024. Asset QualityThe recorded balances of nonperforming loans were $36.4 million, or 7.8% of total loans HFI, as of December 31, 2024, compared to $30.6 million, or 7.1% of total loans HFI, as of September 30, 2024 and $27.1 million, or 7.3% of total loans HFI, as of December 31, 2023. The balances of nonperforming loans guaranteed by the SBA were $19.2 million, $17.8 million, and $15.0 million as of December 31, 2024, September 30, 2024 and December 31, 2023, respectively. The increase in nonperforming loans from the prior periods was primarily attributable to lingering financial stress on borrowers from the longer than expected higher interest rate environment. The Company’s allowance for credit losses to total loans HFI was 2.8% as of December 31, 2024 compared to 2.9% as of September 30, 2024 and 3.5% as of December 31, 2023. The decrease in the ratio from the prior quarter and prior year period was primarily due to the increased balance of the guaranteed portion of the SBA 7(a) program loans, growth in the balances of lower risk CRE, leasing and other HFI loan portfolios, and the shift in our Strategic Program HFI loan balances to programs with lower historical losses. The Company’s net charge-offs were $3.2 million, $2.4 million and $3.4 million for the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, respectively. The increase from the prior quarter is primarily due to charge-offs relating to SBA loans that moved to nonaccrual status in the fourth quarter as well as increased net charge-offs in the Strategic Program loans portfolio. The decrease from the prior year period is primarily due to increased recoveries during the fourth quarter of 2024. The following table presents a summary of changes in the allowance for credit losses and asset quality ratios for the periods indicated: Three Months Ended($ in thousands)12/31/2024 9/30/2024 12/31/2023Allowance for credit losses: Beginning balance$12,661 $13,127 $12,986 Provision for credit losses(1) 3,766 1,944 3,272 Charge offs Residential real estate (206) (27) (104)Commercial real estate Owner occupied (411) (103) (561)Non-owner occupied — (221) — Commercial and industrial (555) (96) (281)Consumer (60) (15) (22)Lease financing receivables (113) — Strategic Program loans (2,528) (2,360) (2,656)Recoveries Construction and land development — — — Residential real estate 6 3 3 Residential real estate multifamily — — — Commercial real estate Owner occupied 112 219 (11)Non-owner occupied — — — Commercial and industrial — 2 1 Consumer 1 4 — Lease financing receivables 77 8 — Strategic Program loans 313 289 261 Ending Balance$13,176 $12,661 $12,888 Credit Quality DataAs of and For the Three Months Ended($ in thousands)12/31/2024 9/30/2024 12/31/2023Nonperforming loans: Guaranteed$19,204 $17,804 $14,966 Unguaranteed 17,227 12,844 12,161 Total nonperforming loans$36,431 $30,648 $27,127 Allowance for credit losses$13,176 $12,661 $12,888 Net charge offs$3,249 $2,409 $3,370 Total loans held for investment$465,233 $433,963 $372,215 Total loans held for investment less guaranteed balances$306,482 $277,635 $240,471 Average loans held for investment$454,474 $422,820 $350,852 Nonperforming loans to total loans held for investment 7.8% 7.1% 7.3%Net charge offs to average loans held for investment (annualized) 2.8% 2.3% 3.8%Allowance for credit losses to loans held for investment 2.8% 2.9% 3.5%Allowance for credit losses to loans held for investment less guaranteed balances 4.3% 4.6% 5.4% (1) Excludes the provision for unfunded commitments. Webcast and Conference Call InformationFinWise will host a conference call today at 5:30 PM ET to discuss its financial results for the fourth quarter and year ended December 31, 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 13750402. 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. The Company is expanding and diversifying its business model by incorporating Payments (MoneyRails™) and BIN Sponsorship offerings. Its 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 Commercial Real Estate, and Leasing, which provide 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 BANCORPCONSOLIDATED BALANCE SHEETS($ in thousands; Unaudited) 12/31/2024 9/30/2024 12/31/2023ASSETS Cash and cash equivalents Cash and due from banks$9,600 $7,705 $411 Interest-bearing deposits 99,562 78,063 116,564 Total cash and cash equivalents 109,162 85,768 116,975 Investment securities available-for-sale, at fair value 29,930 30,472 — Investment securities held-to-maturity, at cost 12,565 13,270 15,388 Investment in Federal Home Loan Bank (“FHLB”) stock, at cost 349 349 238 Strategic Program loans held-for-sale, at lower of cost or fair value 91,588 84,000 47,514 Loans held for investment, net 447,812 418,065 358,560 Credit enhancement asset 111 86 — Premises and equipment, net 16,328 17,099 14,630 Accrued interest receivable 3,566 3,098 3,573 SBA servicing asset, net 3,273 3,261 4,231 Investment in Business Funding Group (“BFG”), at fair value 7,700 7,900 4,200 Operating lease right-of-use (“ROU”) assets 3,564 3,735 4,293 Income tax receivable, net 8,868 3,317 2,400 Other assets 11,160 12,611 14,219 Total assets$745,976 $683,031 $586,221 LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities Deposits Noninterest-bearing$126,782 $142,785 $95,486 Interest-bearing 418,170 345,874 309,347 Total deposits 544,952 488,659 404,833 Accrued interest payable 1,494 647 619 Income taxes payable, net 4,423 — 1,873 Deferred taxes, net 899 1,036 748 PPP Liquidity Facility 64 106 190 Operating lease liabilities 5,302 5,542 6,296 Other liabilities 15,122 16,671 16,606 Total liabilities 572,256 512,661 431,165 Shareholders’ equity Common stock 13 13 12 Additional paid-in-capital 56,926 56,214 51,200 Retained earnings 116,594 113,801 103,844 Accumulated other comprehensive income, net of tax 187 342 — Total shareholders’ equity 173,720 170,370 155,056 Total liabilities and shareholders’ equity$745,976 $683,031 $586,221 FINWISE BANCORPCONSOLIDATED STATEMENTS OF INCOME($ in thousands, except per share amounts; Unaudited) Three Months Ended 12/31/2024 9/30/2024 12/31/2023Interest income Interest and fees on loans$18,388 $17,590 $16,192 Interest on securities 401 298 101 Other interest income 573 1,036 1,759 Total interest income 19,362 18,924 18,052 Interest expense Interest on deposits 3,833 4,161 3,685 Total interest expense 3,833 4,161 3,685 Net interest income 15,529 14,763 14,367 Provision for credit losses 3,878 2,157 3,210 Net interest income after provision for credit losses 11,651 12,606 11,157 Non-interest income Strategic Program fees 4,899 4,862 4,229 Gain on sale of loans, net 872 393 440 SBA loan servicing fees, net 181 87 572 Change in fair value on investment in BFG (200) (100) 200 Credit enhancement income 25 47 — Other miscellaneous (loss) income (174) 765 716 Total non-interest income 5,603 6,054 6,157 Non-interest expense Salaries and employee benefits 9,375 9,659 7,396 Professional services 556 1,331 1,433 Occupancy and equipment expenses 1,094 1,046 923 Credit enhancement expense 5 3 — Other operating expenses 2,534 2,010 1,751 Total non-interest expense 13,564 14,049 11,503 Income before income taxes 3,690 4,611 5,811 Provision for income taxes 897 1,157 1,655 Net income$2,793 $3,454 $4,156 Earnings per share, basic$0.21 $0.26 $0.33 Earnings per share, diluted$0.20 $0.25 $0.32 Weighted average shares outstanding, basic 12,659,986 12,658,557 12,261,101 Weighted average shares outstanding, diluted 13,392,411 13,257,835 12,752,051 Shares outstanding at end of period 13,211,640 13,211,160 12,493,565 FINWISE BANCORPCONSOLIDATED STATEMENTS OF INCOME($ in thousands, except per share amounts) Years Ended 12/31/2024 12/31/2023 (Unaudited) Interest income Interest and fees on loans$68,892 $58,445 Interest on securities 897 338 Other interest income 4,563 5,751 Total interest income 74,352 64,534 Interest expense Interest on deposits 15,440 9,974 Other interest expense — 1 Total interest expense 15,440 9,975 Net interest income 58,912 54,559 Provision for credit losses 11,573 11,638 Net interest income after provision for credit losses 47,339 42,921 Non-interest income Strategic Program fees 17,762 15,914 Gain on sale of loans, net 2,036 1,684 SBA loan servicing fees, net 1,137 1,842 Change in fair value on investment in BFG (624) (600)Credit enhancement income 111 — Other miscellaneous income 2,063 2,616 Total non-interest income 22,485 21,456 Non-interest expense Salaries and employee benefits 35,205 25,751 Professional services 4,736 4,961 Occupancy and equipment expenses 4,240 3,312 Credit enhancement expense 8 — Other operating expenses 8,646 6,540 Total non-interest expense 52,835 40,564 Income before income taxes 16,989 23,813 Provision for income taxes 4,247 6,353 Net income$12,742 $17,460 Earnings per share, basic$0.98 $1.38 Earnings per share, diluted$0.93 $1.33 Weighted average shares outstanding, basic 12,612,455 12,488,564 Weighted average shares outstanding, diluted 13,228,869 12,909,648 Shares outstanding at end of period 13,211,640 12,493,565 FINWISE BANCORPAVERAGE BALANCES, YIELDS, AND RATES ($ in thousands; Unaudited) Three Months Ended12/31/2024 9/30/2024 12/31/2023 Average Balance Interest AverageYield/Rate AverageBalance Interest AverageYield/Rate AverageBalance Interest AverageYield/RateInterest earning assets: Interest-bearing deposits$52,375 $573 4.35% $78,967 $1,036 5.22% $125,462 $1,759 5.56%Investment securities 43,212 401 3.69% 33,615 298 3.53% 15,670 101 2.56%Strategic Program loans held-for-sale 67,676 5,040 29.63% 70,123 4,913 27.87% 45,370 4,307 37.66%Loans held for investment 454,474 13,348 11.68% 422,820 12,677 11.93% 350,852 11,885 13.44%Total interest earning assets 617,737 19,362 12.47% 605,525 18,924 12.43% 537,354 18,052 13.33%Noninterest-earning assets 55,767 56,290 32,202 Total assets$673,504 $661,815 $569,556 Interest-bearing liabilities: Demand$57,305 $617 4.28% $55,562 $547 3.92% $47,784 $562 4.67%Savings 9,192 9 0.40% 9,538 18 0.76% 8,096 13 0.65%Money market accounts 15,726 147 3.73% 13,590 127 3.72% 13,419 53 1.55%Certificates of deposit 272,799 3,060 4.46% 262,537 3,469 5.26% 234,088 3,057 5.18%Total deposits 355,022 3,833 4.30% 341,227 4,161 4.85% 303,387 3,685 4.82%Other borrowings 79 — 0.35% 112 — 0.35% 206 — 0.35%Total interest-bearing liabilities 355,101 3,833 4.29% 341,339 4,161 4.85% 303,593 3,685 4.82%Noninterest-bearing deposits 119,945 127,561 92,767 Noninterest-bearing liabilities 27,636 25,536 21,099 Shareholders’ equity 170,823 167,379 152,097 Total liabilities and shareholders’ equity$673,505 $661,815 $569,556 Net interest income and interest rate spread $15,529 8.18% $14,763 7.58% $14,367 8.51%Net interest margin 10.00% 9.70% 10.61%Ratio of average interest-earning assets to average interest- bearing liabilities 173.96% 177.40% 177.00% FINWISE BANCORPAVERAGE BALANCES, YIELDS, AND RATES($ in thousands; Unaudited) Years Ended12/31/2024 12/31/2023 AverageBalance Interest Average Yield/Rate AverageBalance Interest AverageYield/RateInterest earning assets: Interest-bearing deposits$87,086 $4,563 5.24% $110,866 $5,751 5.19%Investment securities 26,691 897 3.36% 14,731 338 2.30%Loans held for sale 58,896 17,698 30.05% 39,090 15,051 38.50%Loans held for investment 417,207 51,194 12.27% 303,784 43,394 14.28%Total interest earning assets 589,880 74,352 12.60% 468,472 64,534 13.78%Noninterest-earning assets 47,598 25,269 Total assets$637,478 $493,740 Interest-bearing liabilities: Demand$59,317 $2,108 3.55% $45,454 $1,856 4.08%Savings 9,574 66 0.69% 8,207 51 0.62%Money market accounts 12,284 452 3.68% 13,665 362 2.65%Certificates of deposit 256,575 12,814 4.99% 168,887 7,705 4.56%Total deposits 337,750 15,440 4.57% 236,213 9,974 4.22%Other borrowings 126 — 0.34% 251 1 0.35%Total interest-bearing liabilities 337,876 15,440 4.57% 236,464 9,975 4.22%Noninterest-bearing deposits 107,760 93,126 Noninterest-bearing liabilities 26,634 17,250 Shareholders’ equity 165,208 146,901 Total liabilities and shareholders’ equity$637,478 $493,740 Net interest income and interest rate spread $58,912 8.03% $54,559 9.56%Net interest margin 9.99% 11.65%Ratio of average interest-earning assets to average interest- bearing liabilities 174.58% 198.12% Reconciliation of Non-GAAP to GAAP Financial Measures(Unaudited) Efficiency ratioThree Months Ended Years Ended 12/31/2024 9/30/2024 12/31/2023 12/31/2024 12/31/2023 ($ in thousands) Non-interest expense$13,564 $14,049 $11,503 $52,835 $40,564 Net interest income 15,529 14,763 14,367 58,912 54,559 Total non-interest income 5,603 6,054 6,157 22,485 21,456 Adjusted operating revenue$21,132 $20,817 $20,524 $81,397 $76,015 Efficiency ratio 64.2% 67.5% 56.0% 64.9% 53.4% FinWise has entered into agreements with certain of its Strategic Program service providers pursuant to which they provide credit enhancement on loans which protects the Bank by indemnifying or reimbursing the Bank for incurred credit and fraud losses. We estimate and record a provision for expected losses for these Strategic Program loans in accordance with GAAP, which requires estimation of the provision without consideration of the credit enhancement . When the provision for expected losses over the life of the loans that are subject to such credit enhancement is recorded, a credit enhancement asset reflecting the potential future recovery of those losses is also recorded on the balance sheet in the form of non-interest income (credit enhancement income). Reimbursement or indemnification for incurred losses is provided for in the form of a deposit reserve account that is replenished periodically by the respective Strategic Program service provider. Any remaining income on such loans in excess of the amounts retained by FinWise and placed in the deposit reserve account are paid to the Strategic Program service provider. Income on such loans in excess of amounts retained by FinWise are expensed for services provided by the Strategic Program service provider including its legal commitment to indemnify or reimburse all credit or fraud losses pursuant to credit enhancement agreements. The credit enhancement asset is reduced as credit enhancement payments and recoveries are received from the Strategic Program service provider or taken from its cash reserve account. If the Strategic Program service provider is unable to fulfill its contracted obligations under its credit enhancement agreement, then the Bank could be exposed to the loss of the reimbursement and credit enhancement income as a result of this counterparty risk. See the following reconciliations of non-GAAP measures for the impact of the credit enhancement on our financial condition and results. Note that these amounts are supplemental and are not a substitute for an analysis based on GAAP measures. Similar amounts for periods prior to the quarter ended December 31, 2024 were immaterial and therefore not separately disclosed. The following non-GAAP measures are presented to illustrate the impact of certain credit enhancement expenses on total interest income on loans HFI and average yield on loans HFI: As of and for the Three Months Ended As of and for the Year Ended($ in thousands; unaudited)12/31/2024 12/31/2024 TotalAverageLoans HFI TotalInterestIncome onLoans HFI AverageYield onLoans HFI TotalAverageLoans HFI TotalInterestIncome onLoans HFI AverageYield onLoans HFIBefore adjustment for credit enhancement$454,474 $13,348 11.68% $417,207 $51,194 12.27%Less: credit enhancement expense (5) (8) Net of adjustment for credit enhancement expenses$454,474 $13,343 11.68% $417,207 $51,186 12.27% Total interest income on loans HFI net of credit enhancement expense and the average yield on loans HFI are non-GAAP measures that include the impact of credit enhancement expense on total interest income on loans HFI and the respective average yield on loans HFI, the most directly comparable GAAP measures. The following non-GAAP measures are presented to illustrate the impact of certain credit enhancement expenses on net interest income and net interest margin: As of and for the Three Months Ended As of and for the Year Ended 12/31/2024 12/31/2024($ in thousands; unaudited)TotalAverageInterest-EarningAssets Net InterestIncome Net InterestMargin TotalAverageInterest-EarningAssets Net InterestIncome Net InterestMarginBefore adjustment for credit enhancement$617,737 $15,529 10.00% $589,880 $58,912 9.99%Less: credit enhancement expense (5) (8) Net of adjustment for credit enhancement expenses$617,737 $15,524 10.00% $589,880 $58,904 9.99% Net interest income and net interest margin net of credit enhancement expense are non-GAAP measures that include the impact of credit enhancement expenses on net interest income and net interest margin, the most directly comparable GAAP measures. Non-interest expenses less credit enhancement expenses is a non-GAAP measure presented to illustrate the impact of credit enhancement expense on non-interest expense: ($ in thousands; unaudited)Three Months EndedDecember 31, 2024 Year EndedDecember 31, 2024Total non-interest expense$13,564 $52,835 Less: credit enhancement expense (5) (8)Total non-interest expense less credit enhancement expenses$13,559 $52,827 Total non-interest expense less credit enhancement expense is a non-GAAP measure that illustrates the impact of credit enhancement expenses on non-interest expense, the most directly comparable GAAP measure. Total non-interest income less credit enhancement income is a non-GAAP measure to illustrate the impact of credit enhancement income resulting from credit enhanced loans on non-interest income: ($ in thousands; unaudited)Three Months Ended December 31, 2024 Year Ended December 31, 2024Total non-interest income$5,603 $22,485 Less: credit enhancement income (25) (111)Total non-interest income less credit enhancement income$5,578 $22,374 Total non-interest income less indemnification income is a non-GAAP measure that illustrates the impact of credit enhancement income on non-interest income. The most directly comparable GAAP measure is non-interest income. The following non-GAAP measure is presented to illustrate the effect of the credit enhancement program that creates the credit enhancement on the allowance for credit losses: ($ in thousands; unaudited)As of December 31, 2024Allowance for credit losses$(13,176)Less: allowance for credit losses related to credit enhanced loans (111)Allowance for credit losses excluding the effect of the allowance for credit losses related to credit enhanced loans$(13,065) The allowance for credit losses excluding the effect of the allowance for credit losses related to credit enhanced loans is a non-GAAP measure that reflects the effect of the credit enhancement program on the allowance for credit losses. The total outstanding balance of loans held for investment with credit enhancement as of December 31, 2024 was approximately $0.9 million.

FinWise Bancorp Reports Fourth Quarter and Full Year 2024 Results

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