FinWise Bancorp Reports Fourth Quarter and Full Year 2022 Results
- Net Income of $6.5 Million for Fourth Quarter of 2022-
- Diluted Earnings Per Share of $0.49 for Fourth Quarter of 2022-
MURRAY, Utah, Jan. 25, 2023 (GLOBE NEWSWIRE) -- FinWise Bancorp (NASDAQ: FINW) (“FinWise” or the “Company”), parent company of FinWise Bank (the “Bank”), today announced results for the quarter and year ended December 31, 2022.
Fourth Quarter 2022 Highlights
- Loan originations were $1.2 billion, compared to $1.5 billion for the quarter ended September 30, 2022, and $2.3 billion for the fourth quarter of the prior year
- Net interest income was $12.6 million for the quarter ended December 31, 2022, compared to $12.5 million for the quarter ended September 30, 2022, and $15.3 million for the fourth quarter of the prior year
- Net Income was $6.5 million, compared to $3.7 million for the quarter ended September 30, 2022, and $10.1 million for the fourth quarter of the prior year
- Diluted earnings per share (“EPS”) were $0.49 for the quarter, compared to $0.27 for the quarter ended September 30, 2022, and $0.90 for the quarter ended December 31, 2021
- Efficiency ratio was 45.6%, compared to 42.3% for the quarter ended September 30, 2022, and 34.3% for the fourth quarter of the prior year
- Maintained strong returns with annualized return on average equity (ROAE) of 19.1%, compared to 11.0% in the quarter ended September 30, 2022, and 43.8% in the fourth quarter of the prior year
- Asset quality remained solid with a non-performing loans to total loans ratio of 0.1%
“The FinWise team executed well in substantially all facets of the business during 2022, culminating the year with solid results in the fourth quarter, an outstanding accomplishment given more challenging economic conditions throughout the year,” said Kent Landvatter, Chief Executive Officer and President of FinWise. “This performance is further validation of our differentiated and diverse business model coupled with our steadfast focus on working with our strategic relationships and serving our clients. As we progress into 2023, we will continue to build on our strengths and plan to reinvest in the company so that we remain well positioned to maximize shareholder value by continuing to generate sustainable and profitable long-term growth.”
Selected Financial Data
| For the Three Months Ended | For the Years Ended | ||||||||||||||||||
| ($s in thousands, except per share amounts, annualized ratios) | 12/31/2022 | 9/30/2022 | 12/31/2021 | 12/31/2022 | 12/31/2021 | ||||||||||||||
| Net Income | $ | 6,545 | $ | 3,654 | $ | 10,111 | $ | 25,115 | $ | 31,583 | |||||||||
| Diluted EPS | $ | 0.49 | $ | 0.27 | $ | 0.90 | $ | 1.87 | $ | 3.27 | |||||||||
| Return on average assets | 6.6 | % | 3.9 | % | 11.3 | % | 6.4 | % | 9.1 | % | |||||||||
| Return on average equity | 19.1 | % | 11.0 | % | 43.8 | % | 19.6 | % | 39.2 | % | |||||||||
| Yield on loans | 19.04 | % | 18.94 | % | 21.62 | % | 18.52 | % | 19.01 | % | |||||||||
| Cost of deposits | 1.98 | % | 1.16 | % | 0.75 | % | 1.17 | % | 1.05 | % | |||||||||
| Net interest margin | 14.27 | % | 14.93 | % | 16.62 | % | 14.04 | % | 15.10 | % | |||||||||
| Efficiency Ratio(1) | 45.6 | % | 42.3 | % | 34.3 | % | 43.9 | % | 37.0 | % | |||||||||
| Tangible book value per share(2) | $ | 10.95 | $ | 10.44 | $ | 9.04 | $ | 10.95 | $ | 9.04 | |||||||||
| Tangible shareholders’ equity to tangible assets(2) | 34.9 | % | 34.8 | % | 30.4 | % | 34.9 | % | 30.4 | % | |||||||||
| Leverage Ratio (Bank under CBLR) | 25.1 | % | 24.9 | % | 17.7 | % | 25.1 | % | 17.7 | % | |||||||||
(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. We believe 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. 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.
Net Income
Net income was $6.5 million for the fourth quarter of 2022, compared to $3.7 million for the third quarter of 2022, and $10.1 million for the fourth quarter of 2021. The increase from the previous quarter was primarily due to higher gain on sale, lower provision for income taxes and lower provision for loan losses as our credit quality remained solid, partially offset by an increase in non-interest expense and lower strategic program fees. Compared to the prior year period, the decline was primarily driven by a decrease in net interest income and strategic program fees, and an increase in non-interest expenses, partially offset by higher gain on sale and a lower provision for income taxes.
Net Interest Income
Net interest income rose slightly to $12.6 million for the fourth quarter of 2022, from $12.5 million for the third quarter of 2022, and down from $15.3 million for the fourth quarter of 2021. The increase from the prior quarter was primarily due to an increase in interest rates being paid on our cash balances at the Federal Reserve which was partially offset by an increase in the Bank’s deposit rates being paid to customers. The decline from the prior year period was primarily due to lower average loans held for sale balances.
Loan originations totaled $1.2 billion for the fourth quarter of 2022, down from $1.5 billion for the third quarter of 2022 and $2.3 billion for the fourth quarter of 2021.
Net interest margin for the fourth quarter of 2022 decreased to 14.27% compared to 14.93% for the third quarter of 2022 and 16.62% for the fourth quarter of 2021. The decrease from the previous quarter was primarily driven by the reduction in average balances in the loans held for sale portfolio along with the shifting of the deposit portfolio mix from lower costing deposits to higher costing demand deposits. The net interest margin decrease from the fourth quarter of 2021 was primarily driven by lower average loans held for sale balances and an increase in higher rate deposit balances.
Provision for Loan Losses
The Company’s provision for loan losses was $3.2 million for the fourth quarter of 2022, compared to $4.5 million for the third quarter of 2022 and $2.5 million for the fourth quarter of 2021. Compared to the previous quarter, the decrease in provision for loan losses for the fourth quarter of 2022 was primarily due to a decrease in strategic program loans held for investment. Compared to the prior year period, the increase in the provision for loan losses for the fourth quarter of 2022 was primarily due to higher net charge-offs and growth of unguaranteed loans held for investment.
Non-interest Income
| | For the Three Months Ended | |||||||||||
| ($s in thousands) | 12/31/2022 | 9/30/2022 | 12/31/2021 | |||||||||
| Noninterest income: | ||||||||||||
| Strategic Program fees | $ | 4,487 | $ | 5,136 | $ | 6,082 | ||||||
| Gain on sale of loans | 4,163 | 1,923 | 1,813 | |||||||||
| SBA loan servicing fees | 547 | 327 | 356 | |||||||||
| Change in fair value on investment in BFG | 430 | 65 | 864 | |||||||||
| Other miscellaneous income | 148 | 72 | 14 | |||||||||
| Total noninterest income | $ | 9,775 | $ | 7,523 | $ | 9,129 | ||||||
Non-interest income was $9.8 million for the fourth quarter of 2022, compared to $7.5 million for the third quarter of 2022 and $9.1 million for the fourth quarter of 2021. The increase from the previous quarter was driven primarily by an increase in gain on sale of loans recorded to establish a new Loan Trailing Fee Asset of approximately $2.3 million and an increase in fair value of the Company’s investment in Business Funding Group, LLC (“BFG”), partially offset by lower strategic program fees due to the decline in loan origination volumes. Compared to the prior year period, the increase in non-interest income was primarily due to an increase in gain on sale of loans, partially offset by lower strategic program fees resulting primarily from a decline in loan origination volumes and a decrease in the change in fair value of the Company’s investment in BFG.
Non-interest Expense
| For the Three Months Ended | ||||||||||||
| ($s in thousands) | 12/31/2022 | 9/30/2022 | 12/31/2021 | |||||||||
| Noninterest expense: | ||||||||||||
| Salaries and employee benefits | $ | 5,805 | $ | 5,137 | $ | 6,052 | ||||||
| Professional Services | 1,609 | 1,701 | 287 | |||||||||
| Occupancy and equipment expenses | 843 | 640 | 208 | |||||||||
| (Recovery) impairment of SBA servicing asset | 779 | (127 | ) | 800 | ||||||||
| Other operating expenses | 1,184 | 1,118 | 1,024 | |||||||||
| Total noninterest expense | $ | 10,220 | $ | 8,469 | $ | 8,371 | ||||||
Non-interest expense was $10.2 million for the fourth quarter of 2022, compared to $8.5 million for the third quarter of 2022 and $8.4 million for the fourth quarter of 2021. The increase from the previous quarter was primarily due to an impairment on the Company’s SBA servicing asset in the fourth quarter of 2022, which did not occur in the third quarter of 2022, higher employee head count related to developing and upgrading new and existing technology, and increased business infrastructure. The increase compared to the fourth quarter of 2021 was primarily due to increased professional services relating primarily to an increase in consulting fees and increased depreciation from the buildout of our corporate office which was partially offset by a decrease in salaries and employee benefits.
The Company’s efficiency ratio was 45.6% for the fourth quarter of 2022 as compared to 42.3% for the third quarter of 2022 and 34.3% for the fourth quarter of 2021.
Tax Rate
The Company’s effective tax rate was approximately 27.3% for the fourth quarter of 2022, compared to 48.7% for the third quarter of 2022 and 25.3% for the fourth quarter of 2021. An immaterial error was corrected during the third quarter of 2022 and is the primary reason for the higher effective tax rate in that quarter.
Balance Sheet
The Company’s total assets were $402.2 million at December 31, 2022, an increase from $385.6 million at September 30, 2022 and $380.2 million at December 31, 2021. The increase from September 30, 2022 was primarily due to an increase in deposits utilized to fund the Company’s growth in cash and held for investment loan portfolio, partially offset by a decrease in deposits utilized to fund the Company’s held for sale loan portfolio. The increase in total assets compared to December 31, 2021 was primarily due to an increase in cash from growth in deposits to fund the Company’s held for investment loan portfolio, partially offset by a decrease in deposits utilized to fund the Company’s held for sale loan portfolio.
The following table shows the loan portfolio as of the dates indicated:
| As of | ||||||||||||||||||||||||
| | 12/31/2022 | 9/30/2022 | 12/31/2021 | |||||||||||||||||||||
| ($s in thousands) | Amount | % of total loans | Amount | % of total loans | Amount | % of total loans | ||||||||||||||||||
| SBA | $ | 145,172 | 55.8 | % | $ | 127,455 | 49.6 | % | $ | 142,392 | 53.6 | % | ||||||||||||
| Commercial, non real estate | 11,484 | 4.4 | % | 12,970 | 5.1 | % | 3,428 | 1.3 | % | |||||||||||||||
| Residential real estate | 37,815 | 14.5 | % | 34,501 | 13.4 | % | 27,108 | 10.2 | % | |||||||||||||||
| Strategic Program loans | 47,848 | 18.4 | % | 70,290 | 27.4 | % | 85,850 | 32.3 | % | |||||||||||||||
| Commercial real estate | 12,063 | 4.7 | % | 6,149 | 2.4 | % | 2,436 | 0.9 | % | |||||||||||||||
| Consumer | 5,808 | 2.2 | % | 5,455 | 2.1 | % | 4,574 | 1.7 | % | |||||||||||||||
| Total period end loans | $ | 260,190 | 100.0 | % | $ | 256,820 | 100.0 | % | $ | 265,788 | 100.0 | % | ||||||||||||
Note: SBA loans as of December 31, 2022, September 30, 2022 and December 31, 2021 include $0.6 million, $0.7 million and $1.1 million in PPP loans, respectively. SBA loans as of December 31, 2022, September 30, 2022 and December 31, 2021 include $49.5 million, $42.6 million and $75.7 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, 2022, September 30, 2022 and December 31, 2021 was $8.5 million, $10.2 million and $8.5 million, respectively.
Total loans receivable at December 31, 2022 increased to $260.2 million from $256.8 million at September 30, 2022 and decreased from $265.8 million at December 31, 2021. The increase in loans receivable compared to the amount at September 30, 2022 was due primarily to increases in SBA 7(a) loan balances, and commercial real estate loans, partially offset by a decrease in strategic program held for sale loans. The decrease in loans receivable compared to the amount at December 31, 2021 was due primarily to decreases in strategic program held for sale loans and SBA 7(a) loan balances that are guaranteed by the SBA, partially offset by increases in SBA 7(a) loan balances that are not guaranteed by the SBA, residential real estate loans, commercial real estate loans, and commercial non-real estate loans.
The following table shows the Company’s deposit composition as of the dates indicated:
| As of | ||||||||||||||||||||||||
| | 12/31/2022 | 9/30/2022 | 12/31/2021 | |||||||||||||||||||||
| ($s in thousands) | Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||
| Noninterest-bearing demand deposits | $ | 78,817 | 32.5 | % | $ | 97,654 | 42.0 | % | $ | 110,548 | 43.9 | % | ||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||
| Demand | 50,746 | 20.8 | % | 55,152 | 23.6 | % | 5,399 | 2.1 | % | |||||||||||||||
| Savings | 8,289 | 3.4 | % | 7,252 | 3.1 | % | 6,685 | 2.7 | % | |||||||||||||||
| Money market | 10,882 | 4.5 | % | 12,281 | 5.3 | % | 31,076 | 12.3 | % | |||||||||||||||
| Time certificates of deposit | 94,264 | 38.8 | % | 60,499 | 26.0 | % | 98,184 | 39.0 | % | |||||||||||||||
| Total period end deposits | $ | 242,998 | 100.0 | % | $ | 232,838 | 100.0 | % | $ | 251,892 | 100.0 | % | ||||||||||||
Total deposits at December 31, 2022 increased to $243.0 million from $232.8 million at September 30, 2022, and decreased from $251.9 million at December 31, 2021. The increase from the amount at September 30, 2022 was driven primarily by an increase in time certificates of deposits, partially offset by decreases in noninterest-bearing and interest-bearing demand deposits. The decrease from the amount at December 31, 2021 was driven primarily by decreases in noninterest-bearing demand deposits, money market deposits and time certificates of deposit, partially offset by an increase in interest-bearing demand deposits. The increase in interest-bearing demand deposits compared to December 31, 2021, is primarily due to new HSA deposits from Lively, Inc., a technology focused Health Savings Account provider.
Total shareholders’ equity at December 31, 2022 increased $6.2 million to $140.5 million from $134.3 million at September 30, 2022. Compared to December 31, 2021, total shareholders’ equity at December 31, 2022 increased $25.1 million from $115.4 million. The increase over both prior periods 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 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 | 2022 | 2021 | |||||||||||||||
| Capital Ratios | 12/31/2022 | 9/30/2022 | 12/31/2021 | Well- Capitalized Requirement |
Well- Capitalized Requirement |
|||||||||||||
| Leverage Ratio | 25.1 | % | 24.9 | % | 17.7 | % | 9.0 | % | 8.5 | % | ||||||||
The Bank’s capital levels remain significantly above well-capitalized guidelines as of the end of the fourth quarter of 2022.
Share Repurchase Program
On August 18, 2022, the Company’s Board of Directors authorized a share repurchase program pursuant to which the Company may repurchase up to 5% of outstanding common stock as of August 16, 2022, or 644,241 shares of the Company’s common stock, through August 31, 2024. As of December 31, 2022, the Company has repurchased a total of 120,000 shares for a total of $1.1 million.
Asset Quality
Nonperforming loans were $0.4 million or 0.1% of total loans receivable at December 31, 2022, compared to $0.7 million or 0.2% of total loans receivable at December 31, 2021. The Company did not have any nonperforming loans as of September 30, 2022. As noted above, the provision for loan losses was $3.2 million for the fourth quarter of 2022, compared to $4.5 million for the third quarter of 2022 and $2.5 million for the fourth quarter of 2021. The Company’s allowance for loan losses to total loans was 4.6% at December 31, 2022 compared to 4.7% at September 30, 2022 and 3.7% at December 31, 2021.
For the fourth quarter of 2022, the Company’s net charge-offs were $3.2 million, compared to $3.1 million for the third quarter of 2022 and $2.3 million for the fourth quarter of 2021. The increase in net charge-offs compared to the third quarter of 2022 was primarily driven by higher net charge-offs related to retained strategic programs. The increase in net charge-offs compared to the fourth quarter of 2021 was primarily driven by some normalization of credit losses to pre-pandemic market conditions and growth in the unguaranteed loans held for investment balances.
The following table presents a summary of changes in the allowance for loan losses and asset quality ratios for the periods indicated:
| For the Three Months Ended | ||||||||||||
| ($s in thousands) | 12/31/2022 | 9/30/2022 | 12/31/2021 | |||||||||
| Allowance for Loan and Lease Losses: | ||||||||||||
| Beginning Balance | $ | 11,968 | $ | 10,602 | $ | 9,640 | ||||||
| Provision | 3,202 | 4,457 | 2,503 | |||||||||
| Charge offs | ||||||||||||
| SBA | — | (259 | ) | (99 | ) | |||||||
| Commercial, non real estate | — | — | — | |||||||||
| Residential real estate | — | — | — | |||||||||
| Strategic Program loans | (3,440 | ) | (3,070 | ) | (2,380 | ) | ||||||
| Commercial real estate | — | — | — | |||||||||
| Consumer | (62 | ) | (4 | ) | (1 | ) | ||||||
| Recoveries | ||||||||||||
| SBA | 9 | 9 | 5 | |||||||||
| Commercial, non real estate | — | — | 11 | |||||||||
| Residential real estate | — | — | — | |||||||||
| Strategic Program loans | 244 | 233 | 176 | |||||||||
| Commercial real estate | — | — | — | |||||||||
| Consumer | 64 | — | — | |||||||||
| Ending Balance | $ | 11,985 | $ | 11,968 | $ | 9,855 | ||||||
| Asset Quality Ratios | As of and For the Three Months Ended | |||||||||||
| ($s in thousands, annualized ratios) | 12/31/2022 | 9/30/2022 | 12/31/2021 | |||||||||
| Nonperforming loans | $ | 356 | $ | — | $ | 657 | ||||||
| Nonperforming loans to total loans | 0.1 | % | 0.0 | % | 0.2 | % | ||||||
| Net charge offs to average loans | 4.9 | % | 4.7 | % | 3.2 | % | ||||||
| Allowance for loan losses to loans held for investment | 5.1 | % | 5.6 | % | 4.8 | % | ||||||
| Allowance for loan losses to total loans | 4.6 | % | 4.7 | % | 3.7 | % | ||||||
| Net charge offs | $ | 3,185 | $ | 3,091 | $ | 2,288 | ||||||
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 2022. A simultaneous audio webcast of the conference call will be available on the Company’s investor relations section of the website at https://investors.finwisebancorp.com/events/event-details/finwise-bancorp-fourth-quarter-2022-earnings-conference-call.
The dial-in number for the conference call is (877) 423-9813 (toll-free) or (201) 689-8573 (international). Please dial the number 10 minutes prior to the scheduled start time.
A webcast replay of the call will be available on the Company’s website at https://finwisebank.gcs-web.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 non-member 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, the development and acceptance of which is subject to a high degree of uncertainty, as well as the continued evolution of the regulation of this industry; (b) the ability of the Company’s Strategic Program service providers to comply with regulatory regimes, including laws and regulations applicable to consumer credit transactions, and the Company’s ability to adequately oversee and monitor its Strategic Program service providers; (c) the Company’s ability to maintain and grow its relationships with its Strategic Program 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) conditions relating to the Covid-19 pandemic, including the severity and duration of the associated economic slowdown either nationally or in the Company’s market areas, and the response of governmental authorities to the Covid-19 pandemic and the Company’s participation in Covid-19-related government programs such as the Paycheck Protection Program; (g) system failure or cybersecurity breaches of the Company’s network security; (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 conditions, either nationally or in the Company’s market areas (including interest rate environment, government economic and monetary policies, the strength of global financial markets and inflation and deflation), that impact the financial services industry and/or the Company’s business; (j) increased competition in the financial services industry, particularly from regional and national institutions and other companies that offer banking services; (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 loan losses (“ALL”); (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, changes in SBA standard operating procedures or changes to the status of the Bank as an SBA Preferred Lender; (q) changes in the value of collateral securing the Company’s loans; (r) possible increases in the Company’s levels of nonperforming assets; (s) potential losses from loan defaults and nonperformance on loans; (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 inability of small- and medium-sized businesses to whom the Company lends to weather adverse business conditions and repay loans; (v) the Company’s ability to implement aspects of its growth strategy and to sustain its historic rate of growth; (w) the Company’s ability to continue to originate, sell and retain loans, including through its Strategic Programs; (x) the concentration of the Company’s lending and depositor relationships through Strategic Programs in the financial technology industry generally; (y) the Company’s ability to attract additional merchants and retain and grow its existing merchant relationships; (z) interest rate risk associated with the Company’s business, including sensitivity of its interest earning assets and interest bearing liabilities to interest rates, and the impact to its earnings from changes in interest rates; (aa) 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; (bb) 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; (cc) the Company’s dependence on its management team and changes in management composition; (dd) the sufficiency of the Company’s capital, including sources of capital and the extent to which it may be required to raise additional capital to meet its goals; (ee) compliance with laws and regulations, supervisory actions, the Dodd-Frank Act, capital requirements, the Bank Secrecy Act, anti-money laundering laws, predatory lending laws, and other statutes and regulations; (ff) the Company’s ability to maintain a strong core deposit base or other low-cost funding sources; (gg) results of examinations of the Company by its regulators, including the possibility that its regulators may, among other things, require the Company to increase its ALL or to write-down assets; (hh) the Company’s involvement from time to time in legal proceedings, examinations and remedial actions by regulators; (ii) further government intervention in the U.S. financial system; (jj) 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; (kk) future equity and debt issuances; and (ll) 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, 2021 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 management based upon market conditions and other factors. Purchases may be made pursuant to a program adopted under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. The program does not require the Company to purchase any specific number or amount of shares and may be suspended or reinstated at any time in the Company’s discretion and without notice.
Any forward-looking statement speaks only as of the date of this release, and the Company does not undertake any obligation to publicly update or review any forward-looking statement, whether because of new information, future developments or otherwise, except as required by law. New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict their occurrence. In addition, the Company cannot assess the impact of each risk and uncertainty on its business or the extent to which any risk or uncertainty, or combination of risks and uncertainties, may cause actual results to differ materially from those contained in any forward-looking statements.
| FINWISE BANCORP CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION ($s in thousands) |
||||||||||||
| | As of | |||||||||||
| 12/31/2022 | 9/30/2022 | 12/31/2021 | ||||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| ASSETS | ||||||||||||
| Cash and cash equivalents | ||||||||||||
| Cash and due from banks | $ | 386 | $ | 410 | $ | 411 | ||||||
| Interest-bearing deposits | 100,181 | 92,053 | 85,343 | |||||||||
| Total cash and cash equivalents | 100,567 | 92,463 | 85,754 | |||||||||
| Investment securities held-to-maturity, at cost | 14,292 | 13,925 | 11,423 | |||||||||
| Investment in Federal Home Loan Bank (FHLB) stock, at cost | 449 | 449 | 378 | |||||||||
| Strategic Program loans held-for-sale, at lower of cost or fair value | 23,589 | 43,606 | 60,748 | |||||||||
| Loans receivable, net | 224,217 | 200,485 | 198,102 | |||||||||
| Premises and equipment, net | 9,478 | 6,830 | 3,285 | |||||||||
| Accrued interest receivable | 1,818 | 1,672 | 1,548 | |||||||||
| Deferred taxes, net | 1,167 | 2,164 | 1,823 | |||||||||
| SBA servicing asset, net | 5,210 | 5,269 | 3,938 | |||||||||
| Investment in Business Funding Group (BFG), at fair value | 4,800 | 4,500 | 5,900 | |||||||||
| Operating lease right-of-use (“ROU”) assets | 6,470 | 6,691 | — | |||||||||
| Other assets | 10,152 | 7,515 | 7,315 | |||||||||
| Total assets | $ | 402,209 | $ | 385,569 | $ | 380,214 | ||||||
| | ||||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
| Liabilities | ||||||||||||
| Deposits | ||||||||||||
| Noninterest-bearing | $ | 78,817 | $ | 97,654 | $ | 110,548 | ||||||
| Interest-bearing | 164,181 | 135,184 | 141,344 | |||||||||
| Total deposits | 242,998 | 232,838 | 251,892 | |||||||||
| Accrued interest payable | 54 | 30 | 48 | |||||||||
| Income taxes payable, net | 1,077 | 1,066 | 233 | |||||||||
| PPP Liquidity Facility | 314 | 345 | 1,050 | |||||||||
| Operating lease liabilities | 8,449 | 7,249 | — | |||||||||
| Other liabilities | 8,858 | 9,756 | 11,549 | |||||||||
| Total liabilities | 261,750 | 251,284 | 264,772 | |||||||||
| | ||||||||||||
| Shareholders’ equity | ||||||||||||
| Common Stock | 13 | 13 | 13 | |||||||||
| Additional paid-in-capital | 54,614 | 55,113 | 54,836 | |||||||||
| Retained earnings | 85,832 | 79,159 | 60,593 | |||||||||
| Total shareholders’ equity | 140,459 | 134,285 | 115,442 | |||||||||
| Total liabilities and shareholders’ equity | $ | 402,209 | $ | 385,569 | $ | 380,214 | ||||||
| FINWISE BANCORP CONSOLIDATED STATEMENTS OF INCOME ($s in thousands, except per share amounts; Unaudited) |
||||||||||||
| For the Three Months Ended | ||||||||||||
| 12/31/2022 | 9/30/2022 | 12/31/2021 | ||||||||||
| Interest income | ||||||||||||
| Interest and fees on loans | $ | 12,440 | $ | 12,481 | $ | 15,500 | ||||||
| Interest on securities | 73 | 52 | 28 | |||||||||
| Other interest income | 757 | 290 | 25 | |||||||||
| Total interest income | 13,270 | 12,823 | 15,553 | |||||||||
| Interest expense | ||||||||||||
| Interest on deposits | 624 | 303 | 279 | |||||||||
| Interest on PPP Liquidity Facility | — | 1 | 2 | |||||||||
| Total interest expense | 624 | 304 | 281 | |||||||||
| Net interest income | 12,646 | 12,519 | 15,272 | |||||||||
| Provision for loan losses | 3,202 | 4,457 | 2,503 | |||||||||
| Net interest income after provision for loan losses | 9,444 | 8,062 | 12,769 | |||||||||
| Non-interest income | ||||||||||||
| Strategic Program fees | 4,487 | 5,136 | 6,082 | |||||||||
| Gain on sale of loans, net | 4,163 | 1,923 | 1,813 | |||||||||
| SBA loan servicing fees | 547 | 327 | 356 | |||||||||
| Change in fair value on investment in BFG | 430 | 65 | 864 | |||||||||
| Other miscellaneous income | 148 | 72 | 14 | |||||||||
| Total non-interest income | 9,775 | 7,523 | 9,129 | |||||||||
| Non-interest expense | ||||||||||||
| Salaries and employee benefits | 5,805 | 5,137 | 6,052 | |||||||||
| Professional services | 1,609 | 1,701 | 287 | |||||||||
| Occupancy and equipment expenses | 843 | 640 | 208 | |||||||||
| (Recovery) impairment of SBA servicing asset | 779 | (127 | ) | 800 | ||||||||
| Other operating expenses | 1,184 | 1,118 | 1,024 | |||||||||
| Total non-interest expense | 10,220 | 8,469 | 8,371 | |||||||||
| Income before income tax expense | 8,999 | 7,116 | 13,527 | |||||||||
| Provision for income taxes | 2,454 | 3,462 | 3,416 | |||||||||
| Net income | $ | 6,545 | $ | 3,654 | 10,111 | |||||||
| Earnings per share, basic | $ | 0.51 | $ | 0.28 | $ | 0.95 | ||||||
| Earnings per share, diluted | $ | 0.49 | $ | 0.27 | $ | 0.90 | ||||||
| Weighted average shares outstanding, basic | 12,740,933 | 12,784,298 | 10,169,005 | |||||||||
| Weighted average shares outstanding, diluted | 13,218,403 | 13,324,059 | 10,818,984 | |||||||||
| Shares outstanding at end of period | 12,831,345 | 12,864,821 | 12,772,010 | |||||||||
| FINWISE BANCORP CONSOLIDATED STATEMENTS OF INCOME ($s in thousands, except per share amounts) |
|||||||||
| For the Years Ended | |||||||||
| 12/31/2022 | 12/31/2021 | ||||||||
| (Unaudited) | |||||||||
| Interest income | |||||||||
| Interest and fees on loans | $ | 50,941 | $ | 49,135 | |||||
| Interest on securities | 208 | 47 | |||||||
| Other interest income | 1,180 | 61 | |||||||
| Total interest income | 52,329 | 49,243 | |||||||
| Interest expense | |||||||||
| Interest on deposits | 1,432 | 1,138 | |||||||
| Interest on PPP Liquidity Facility | 2 | 127 | |||||||
| Total interest expense | 1,434 | 1,265 | |||||||
| Net interest income | 50,895 | 47,978 | |||||||
| Provision for loan losses | 13,519 | 8,039 | |||||||
| Net interest income after provision for loan losses | 37,376 | 39,939 | |||||||
| Non-interest income | |||||||||
| Strategic Program fees | 22,467 | 17,959 | |||||||
| Gain on sale of loans, net | 13,550 | 9,689 | |||||||
| SBA loan servicing fees | 1,603 | 1,156 | |||||||
| Change in fair value on investment in BFG | (478 | ) | 2,991 | ||||||
| Other miscellaneous income | 269 | 49 | |||||||
| Total non-interest income | 37,411 | 31,844 | |||||||
| Non-interest expense | |||||||||
| Salaries and employee benefits | 24,489 | 22,365 | |||||||
| Professional services | 5,454 | 1,049 | |||||||
| Occupancy and equipment expenses | 2,204 | 810 | |||||||
| (Recovery) impairment of SBA servicing asset | 1,728 | 800 | |||||||
| Other operating expenses | 4,881 | 4,487 | |||||||
| Total non-interest expense | 38,756 | 29,511 | |||||||
| Income before income tax expense | 36,031 | 42,272 | |||||||
| Provision for income taxes | 10,916 | 10,689 | |||||||
| Net income | $ | 25,115 | $ | 31,583 | |||||
| Earnings per share, basic | $ | 1.96 | $ | 3.44 | |||||
| Earnings per share, diluted | $ | 1.87 | $ | 3.27 | |||||
| Weighted average shares outstanding, basic | 12,729,898 | 8,669,724 | |||||||
| Weighted average shares outstanding, diluted | 13,357,022 | 9,108,163 | |||||||
| Shares outstanding at end of period | 12,831,345 | 12,772,010 | |||||||
| FINWISE BANCORP AVERAGE BALANCES, YIELDS, AND RATES ($s in thousands; Unaudited) |
||||||||||||||||||||||||||||||||||||
| | For the Three Months Ended | For the Three Months Ended | For the Three Months Ended | |||||||||||||||||||||||||||||||||
| | 12/31/2022 | 9/30/2022 | 12/31/2021 | |||||||||||||||||||||||||||||||||
| Average Balance |
Interest | Average Yield/Rate |
Average Balance |
Interest | Average Yield/Rate |
Average Balance | Interest | Average Yield/Rate |
||||||||||||||||||||||||||||
| Interest earning assets: | ||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits with the Federal Reserve, non- | ||||||||||||||||||||||||||||||||||||
| U.S. central banks and other banks | $ | 78,619 | $ | 757 | 3.85 | % | $ | 59,337 | $ | 290 | 1.95 | % | $ | 72,746 | $ | 25 | 0.14 | % | ||||||||||||||||||
| Investment securities | 14,414 | 73 | 2.03 | % | 12,418 | 52 | 1.67 | % | 8,078 | 28 | 1.39 | % | ||||||||||||||||||||||||
| Loans held for sale | 43,751 | 3,990 | 36.48 | % | 50,516 | 4,533 | 35.89 | % | 87,156 | 7,553 | 34.66 | % | ||||||||||||||||||||||||
| Loans held for investment | 217,619 | 8,450 | 15.53 | % | 213,080 | 7,948 | 14.92 | % | 199,609 | 7,947 | 15.93 | % | ||||||||||||||||||||||||
| Total interest earning assets | 354,403 | 13,270 | 14.98 | % | 335,351 | 12,823 | 15.30 | % | 367,589 | 15,553 | 16.92 | % | ||||||||||||||||||||||||
| Less: ALL | (11,683 | ) | (10,768 | ) | (9,450 | |||||||||||||||||||||||||||||||
| Non-interest earning assets | 32,891 | 32,626 | 24,379 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 375,611 | $ | 357,209 | $ | 382,518 | ||||||||||||||||||||||||||||||
| Interest bearing liabilities: | ||||||||||||||||||||||||||||||||||||
| Demand | $ | 44,115 | $ | 375 | 3.40 | % | $ | 11,857 | $ | 113 | 3.81 | % | $ | 7,411 | $ | 15 | 0.81 | % | ||||||||||||||||||
| Savings | 7,605 | 5 | 0.26 | % | 7,514 | 1 | 0.05 | % | 7,573 | 1 | 0.05 | % | ||||||||||||||||||||||||
| Money market accounts | 15,109 | 45 | 1.19 | % | 20,615 | 29 | 0.56 | % | 28,859 | 21 | 0.28 | % | ||||||||||||||||||||||||
| Certificates of deposit | 59,273 | 199 | 1.34 | % | 64,789 | 160 | 0.99 | % | 104,134 | 242 | 0.93 | % | ||||||||||||||||||||||||
| Total deposits | 126,102 | 624 | 1.98 | % | 104,775 | 303 | 1.16 | % | 147,977 | 279 | 0.75 | % | ||||||||||||||||||||||||
| Other borrowings | 330 | — | 0.35 | % | 360 | 1 | 0.35 | % | 1,437 | 2 | 0.63 | % | ||||||||||||||||||||||||
| Total interest bearing liabilities | 126,432 | 624 | 1.97 | % | 105,135 | 304 | 1.16 | % | 149,414 | 281 | 0.75 | % | ||||||||||||||||||||||||
| Non-interest bearing deposits | 96,581 | 102,575 | 127,590 | |||||||||||||||||||||||||||||||||
| Non-interest bearing liabilities | 17,164 | 17,542 | 16,315 | |||||||||||||||||||||||||||||||||
| Shareholders’ equity | 135,434 | 131,957 | 89,199 | |||||||||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 375,611 | $ | 357,209 | $ | 382,518 | ||||||||||||||||||||||||||||||
| Net interest income and interest rate spread | $ | 12,646 | 13.01 | % | $ | 12,519 | 14.14 | % | $ | 15,272 | 16.17 | % | ||||||||||||||||||||||||
| Net interest margin | 14.27 | % | 14.93 | % | 16.62 | % | ||||||||||||||||||||||||||||||
| Ratio of average interest-earning assets to average interest- bearing liabilities | 280.31 | % | 318.97 | % | 246.02 | % | ||||||||||||||||||||||||||||||
Note: Average PPP loans for the three months ended December 31, 2022, September 30, 2022 and December 31, 2021 were $0.6 million, $0.7 million and $1.5 million, respectively.
| FINWISE BANCORP AVERAGE BALANCES, YIELDS, AND RATES ($s in thousands) |
||||||||||||||||||||||||
| | For the Year Ended | For the Year Ended | ||||||||||||||||||||||
| | 12/31/2022 | 12/31/2021 | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| Average Balance |
Interest | Average Yield/Rate |
Average Balance |
Interest | Average Yield/Rate |
|||||||||||||||||||
| Interest earning assets: | ||||||||||||||||||||||||
| Interest-bearing deposits with the Federal Reserve, non- | ||||||||||||||||||||||||
| U.S. central banks and other banks | $ | 74,920 | $ | 1,180 | 1.58 | % | $ | 55,960 | $ | 61 | 0.11 | % | ||||||||||||
| Investment securities | 12,491 | 208 | 1.67 | % | 3,298 | 47 | 1.43 | % | ||||||||||||||||
| Loans held for sale | 65,737 | 21,237 | 32.31 | % | 59,524 | 22,461 | 37.73 | % | ||||||||||||||||
| Loans held for investment | 209,352 | 29,704 | 14.19 | % | 198,992 | 26,674 | 13.40 | % | ||||||||||||||||
| Total interest earning assets | 362,500 | 52,329 | 14.44 | % | 317,774 | 49,243 | 15.50 | % | ||||||||||||||||
| Less: ALL | (10,816 | ) | (7,548 | ) | ||||||||||||||||||||
| Non-interest earning assets | 30,141 | 17,002 | ||||||||||||||||||||||
| Total assets | $ | 381,825 | $ | 327,228 | ||||||||||||||||||||
| Interest bearing liabilities: | ||||||||||||||||||||||||
| Demand | $ | 17,564 | $ | 531 | 3.02 | % | $ | 6,060 | $ | 53 | 0.87 | % | ||||||||||||
| Savings | 7,310 | 7 | 0.10 | % | 7,897 | 10 | 0.13 | % | ||||||||||||||||
| Money market accounts | 26,054 | 116 | 0.45 | % | 21,964 | 75 | 0.34 | % | ||||||||||||||||
| Certificates of deposit | 71,661 | 778 | 1.09 | % | 72,311 | 1,000 | 1.38 | % | ||||||||||||||||
| Total deposits | 122,589 | 1,432 | 1.17 | % | 108,232 | 1,138 | 1.05 | % | ||||||||||||||||
| Other borrowings | 566 | 2 | 0.35 | % | 36,363 | 127 | 0.35 | % | ||||||||||||||||
| Total interest bearing liabilities | 123,155 | 1,434 | 1.16 | % | 144,595 | 1,265 | 0.87 | % | ||||||||||||||||
| Non-interest bearing deposits | 114,174 | 107,481 | ||||||||||||||||||||||
| Non-interest bearing liabilities | 15,781 | 11,392 | ||||||||||||||||||||||
| Shareholders’ equity | 128,715 | 63,760 | ||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 381,825 | $ | 327,228 | ||||||||||||||||||||
| Net interest income and interest rate spread | $ | 50,895 | 13.28 | % | $ | 47,978 | 14.63 | % | ||||||||||||||||
| Net interest margin | 14.04 | % | 15.10 | % | ||||||||||||||||||||
| Ratio of average interest-earning assets to average interest- bearing liabilities | 294.34 | % | 219.77 | % | ||||||||||||||||||||
Note: Average PPP loans for the years ended December 31, 2022 and December 31, 2021 were $0.8 million and $36.6 million, respectively.
| FINWISE BANCORP SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA ($s in thousands, except per share amounts; Unaudited) |
||||||||||||
| As of and for the Three Months Ended | ||||||||||||
| 12/31/2022 | 9/30/2022 | 12/31/2021 | ||||||||||
| Selected Loan Metrics | ||||||||||||
| Amount of loans originated | $ | 1,219,851 | $ | 1,506,100 | $ | 2,304,234 | ||||||
| Selected Income Statement Data | ||||||||||||
| Interest income | $ | 13,270 | $ | 12,823 | $ | 15,553 | ||||||
| Interest expense | 624 | 304 | 281 | |||||||||
| Net interest income | 12,646 | 12,519 | 15,272 | |||||||||
| Provision for loan losses | 3,202 | 4,457 | 2,503 | |||||||||
| Net interest income after provision for loan losses | 9,444 | 8,062 | 12,769 | |||||||||
| Non-interest income | 9,775 | 7,523 | 9,129 | |||||||||
| Non-interest expense | 10,220 | 8,469 | 8,371 | |||||||||
| Provision for income taxes | 2,454 | 3,462 | 3,416 | |||||||||
| Net income | 6,545 | 3,654 | 10,111 | |||||||||
| Selected Balance Sheet Data | ||||||||||||
| Total Assets | $ | 402,209 | $ | 385,569 | $ | 380,214 | ||||||
| Cash and cash equivalents | 100,567 | 92,463 | 85,754 | |||||||||
| Investment securities held-to-maturity, at cost | 14,292 | 13,925 | 11,423 | |||||||||
| Loans receivable, net | 224,217 | 200,485 | 198,102 | |||||||||
| Strategic Program loans held-for-sale, at lower of cost or fair value | 23,589 | 43,606 | 60,748 | |||||||||
| SBA servicing asset, net | 5,210 | 5,269 | 3,938 | |||||||||
| Investment in Business Funding Group, at fair value | 4,800 | 4,500 | 5,900 | |||||||||
| Deposits | 242,998 | 232,838 | 251,892 | |||||||||
| PPP Liquidity Facility | 314 | 345 | 1,050 | |||||||||
| Total shareholders' equity | 140,459 | 134,285 | 115,442 | |||||||||
| Tangible shareholders’ equity(1) | 140,459 | 134,285 | 115,442 | |||||||||
| Share and Per Share Data | ||||||||||||
| Earnings per share - basic | $ | 0.51 | $ | 0.28 | $ | 0.95 | ||||||
| Earnings per share - diluted | $ | 0.49 | $ | 0.27 | $ | 0.90 | ||||||
| Book value per share | $ | 10.95 | $ | 10.44 | $ | 9.04 | ||||||
| Tangible book value per share(1) | $ | 10.95 | $ | 10.44 | $ | 9.04 | ||||||
| Weighted avg outstanding shares - basic | 12,740,933 | 12,784,298 | 10,169,005 | |||||||||
| Weighted avg outstanding shares - diluted | 13,218,403 | 13,324,059 | 10,818,984 | |||||||||
| Shares outstanding at end of period | 12,831,345 | 12,864,821 | 12,772,010 | |||||||||
| Asset Quality Ratios | ||||||||||||
| Nonperforming loans to total loans | 0.1 | % | 0.0 | % | 0.2 | % | ||||||
| Net charge offs to average loans | 4.9 | % | 4.7 | % | 3.2 | % | ||||||
| Allowance for loan losses to loans held for investment | 5.1 | % | 5.6 | % | 4.8 | % | ||||||
| Allowance for loan losses to total loans | 4.6 | % | 4.7 | % | 3.7 | % | ||||||
| Capital Ratios | ||||||||||||
| Total shareholders' equity to total assets | 34.9 | % | 34.8 | % | 30.4 | % | ||||||
| Tangible shareholders’ equity to tangible assets(1) | 34.9 | % | 34.8 | % | 30.4 | % | ||||||
| Leverage Ratio (Bank under CBLR) | 25.1 | % | 24.9 | % | 17.7 | % | ||||||
(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 | For the Three Months Ended | |||||||||||
| 12/31/2022 | 9/30/2022 | 12/31/2021 | ||||||||||
| ($s in thousands) | ||||||||||||
| Non-interest expense | $ | 10,220 | $ | 8,469 | $ | 8,371 | ||||||
| Net interest income | 12,646 | 12,519 | 15,272 | |||||||||
| Total non-interest income | 9,775 | 7,523 | 9,129 | |||||||||
| Adjusted operating revenue | $ | 22,421 | $ | 20,042 | $ | 24,401 | ||||||
| Efficiency ratio | 45.6 | % | 42.3 | % | 34.3 | % | ||||||
