UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 23, 2022
FINWISE BANCORP
(Exact name of registrant as specified in its charter)
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Utah
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001-40721
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83-0356689
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(State or other jurisdiction of incorporation or organization)
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(Commission file number)
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(I.R.S. employer identification no.)
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756 East Winchester, Suite 100
Murray, Utah
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84107
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|
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(Address of principal executive offices)
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(Zip code)
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Registrant’s telephone number, including area code: (801) 501-7200
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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☐
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange
Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of exchange on which registered
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|||
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Common Stock, par value $0.001 per share
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FINW
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The NASDAQ Stock Market LLC
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| Item 2.02 |
Results of Operations and Financial Condition.
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Attached and incorporated herein by reference as Exhibit 99.1 is a copy of a press release of FinWise Bancorp (the “Company”), dated February 23, 2022, reporting the Company’s financial results for the fourth quarter
and fiscal year ended December 31, 2021.
The information set forth under “Item 2.02 Results of Operations and Financial Condition,” including Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934,
as amended, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01 |
Financial Statements and Exhibits.
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| (d) |
Exhibits
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Exhibit No.
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Description
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Press Release dated February 23, 2022
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, FinWise Bancorp has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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DATE: February 23, 2022
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FINWISE BANCORP
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/s/ Javvis Jacobson
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||
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Name: Javvis Jacobson
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||
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Title: Chief Financial Officer and Executive Vice President
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||
Exhibit 99.1
FINWISE BANCORP
REPORTS FOURTH QUARTER AND FULL YEAR 2021 RESULTS
- Net Income Grew 19.8% Quarter over Quarter to $10.1 Million -
- Diluted Earnings Per Share of $0.90 for Fourth Quarter of 2021 -
MURRAY, Utah Feb. 23, 2022 (GLOBE
NEWSWIRE) — FinWise
Bancorp (NASDAQ: FINW) (“FinWise” or the “Company”), parent company of FinWise Bank (the “Bank”), today announced results for the quarter and full year ended December 31, 2021. The Company’s shares began trading publicly on November 19, 2021.
The Company’s results are discussed below.
Fourth Quarter 2021 Highlights
| • |
Loan originations totaled $2.3 billion, up 26.4% from the quarter ended September 30, 2021 and more than doubled from the prior year period
|
| • |
Net interest income grew to $15.3 million or 13.4% as compared to the quarter ended September 30, 2021 and rose 87.1% from the prior year period
|
| • |
Net Income was $10.1 million, compared to $8.4 million for the quarter ended September 30, 2021 and $4.6 million in the prior year period
|
| • |
Diluted earnings per share (“EPS”) were $0.90 in the quarter, flat from the quarter ended September 30, 2021 and up 69.8% from the prior year period
|
| • |
Efficiency ratio was 34.3%, compared to 33.7% in the quarter ended September 30, 2021 and 48.8% in the prior year period
|
| • |
Maintained industry-leading returns with annualized return on average equity (ROAE) of 43.8%, compared to 52.2% in the quarter ended September 30, 2021 and 42.5% in the prior year period
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| • |
Asset quality remained strong with nonperforming loans to total loans ratio of 0.2%
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“We had an outstanding fourth quarter and full year 2021, capped off by the successful completion of our initial public offering,” said Kent Landvatter, Chief Executive Officer and President of
FinWise. “We made significant progress in key facets of our business, including continuing to implement our successful strategy that has resulted in a highly profitable FinTech lending model with nationwide reach and profitable growth. We are
proud of our diverse and federally regulated product offerings that provide millions of dollars in loans to small business owners. We also take pride in our strategic relationships that provide loans across the credit spectrum and expand access to
credit for more consumers, particularly those with limited access. Our solid results are a testament to the unique business model that our team has built. These efforts put FinWise in a great position to continue to expand our market share and
deliver strong performance for both our customers and shareholders over the long-term.”
1
Results of Operations
The Company’s fourth quarter of 2021 was highlighted by substantial loan originations across its primary lines of business and substantial earnings growth. The Company maintained its solid
efficiency and industry-leading returns.
Selected Financial Data
|
For the Three Months Ended
|
For the Years Ended
|
|||||||||||||||||||
|
($s in thousands, except per share amounts, annualized ratios)
|
12/31/2021
|
9/30/2021
|
12/31/2020
|
12/31/2021
|
12/31/2020
|
|||||||||||||||
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Net Income
|
$
|
10,111
|
$
|
8,442
|
$
|
4,616
|
$
|
31,583
|
$
|
11,198
|
||||||||||
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Diluted EPS
|
$
|
0.90
|
$
|
0.90
|
$
|
0.53
|
$
|
3.27
|
$
|
1.28
|
||||||||||
|
Return on average assets
|
11.3
|
%
|
10.8
|
%
|
5.8
|
%
|
9.1
|
%
|
4.5
|
%
|
||||||||||
|
Return on average equity
|
43.8
|
%
|
52.2
|
%
|
42.5
|
%
|
39.2
|
%
|
28.4
|
%
|
||||||||||
|
Yield on loans
|
21.6
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%
|
23.0
|
%
|
12.6
|
%
|
19.0
|
%
|
14.1
|
%
|
||||||||||
|
Cost of deposits
|
0.8
|
%
|
1.0
|
%
|
1.7
|
%
|
1.1
|
%
|
1.9
|
%
|
||||||||||
|
Net interest margin
|
16.6
|
%
|
18.3
|
%
|
10.4
|
%
|
15.1
|
%
|
11.0
|
%
|
||||||||||
|
Efficiency ratio
|
34.3
|
%
|
33.7
|
%
|
48.8
|
%
|
37.0
|
%
|
51.6
|
%
|
||||||||||
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Tangible book value per share
|
$
|
9.04
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$
|
7.91
|
$
|
5.30
|
$
|
9.04
|
$
|
5.30
|
||||||||||
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Tangible shareholders' equity to tangible assets
|
30.4
|
%
|
20.4
|
%
|
14.4
|
%
|
30.4
|
%
|
14.4
|
%
|
||||||||||
|
Leverage Ratio (Bank under CBLR)
|
17.7
|
%
|
19.5
|
%
|
16.6
|
%
|
17.7
|
%
|
16.6
|
%
|
||||||||||
Net Income
Net income was $10.1 million for the fourth quarter of 2021, compared to $8.4 million for the third quarter of 2021, and more than double the net income for the fourth quarter of 2020. Growth over both prior periods
was primarily driven by solid growth in net interest income due to a substantial increase in loan originations, as well as solid non-interest income reflecting substantial strategic program fees, partially offset by an increase in non-interest
expense.
Net Interest Income
Net interest income grew 13.4% to $15.3 million for the fourth quarter of 2021, from $13.5 million for the third quarter of 2021, and increased 87.1% from $8.2 million for the fourth quarter of 2020. Net interest
income growth over both prior periods was primarily due to higher loan balances resulting from significant loan growth which drove an increase in average interest earning assets.
Loan originations totaled $2.3 billion for the fourth quarter 2021, up 26.4% from $1.8 billion for the third quarter of 2021, and up from $0.9 billion for the fourth quarter of 2020.
Net interest margin for the fourth quarter of 2021 was 16.6% compared to 18.3% for the third quarter of 2021, and increased significantly from 10.4% for the fourth quarter of 2020. The net interest margin decline
from the third quarter of 2021 was driven mainly by substantially higher average held for sale loan balances from strategic programs with lower yielding loans. Additionally, there was a change in the underlying mix of held for investment loans
driven primarily by an increase in SBA 7(a) loans. These factors were partially offset by lower rates on the Company’s deposit portfolio. The net interest margin increase from the fourth quarter of 2020 was driven mainly by a substantial reduction
in average PPP loans with a notional interest rate of 1.0% outstanding.
2
Provision for Loan Losses
The Company’s provision for loan losses was $2.5 million for the fourth quarter of 2021, compared to $3.4 million for the third quarter of 2021. This decrease from the third quarter of 2021 was primarily due to a
decline in the rate of growth on held for investment loans. The increase in the Company’s provision for loan losses for the fourth quarter of 2021 compared to the fourth quarter of 2020 was due to the Company concluding that a provision was not
needed in the fourth quarter of 2020 when the Company determined that its loan portfolios were not materially impacted by the pandemic, particularly as the Company had already recorded higher than normal provisions to position for the possibility
of elevated losses on loans resulting from the pandemic.
Non-interest Income
|
For the Three Months Ended
|
||||||||||||
|
($s in thousands)
|
12/31/2021
|
9/30/2021
|
12/31/2020
|
|||||||||
|
Non-interest income:
|
||||||||||||
|
Strategic program fees
|
$
|
6,082
|
$
|
4,982
|
$
|
2,713
|
||||||
|
Gain on sale of loans
|
1,813
|
2,876
|
289
|
|||||||||
|
SBA loan servicing fees
|
356
|
337
|
283
|
|||||||||
|
Change in fair value on investment in BFG
|
864
|
266
|
137
|
|||||||||
|
Other miscellaneous income
|
14
|
14
|
10
|
|||||||||
|
Total non-interest income
|
$
|
9,129
|
$
|
8,475
|
$
|
3,432
|
||||||
Non-interest income was $9.1 million for the fourth quarter of 2021, an increase of 7.7% from $8.5 million for the third quarter of 2021, and more than doubled from $3.4 million for the fourth quarter of 2020. The
increase compared to the third quarter of 2021 was driven primarily by an increase in strategic program fees generated from significant loan origination volume as well as the change in fair value on investment in Business Funding Group, LLC
(“BFG”). The increase in the latter was primarily due to BFG’s higher profitability and cash position. The increase compared to the third quarter of 2021 was partially offset by a decrease in the gain on sale of loans due primarily to a decrease
in the number of SBA 7(a) loans sold. The increase in non-interest income compared to the fourth quarter of 2020 was driven mainly by higher strategic program fees due to significant loan origination volume and an increase in the number of SBA
7(a) loans sold in the fourth quarter of 2021.
3
Non-interest Expense
|
For the Three Months Ended
|
||||||||||||
|
($s in thousands)
|
12/31/2021
|
9/30/2021
|
12/31/2020
|
|||||||||
|
Non-interest expense:
|
||||||||||||
|
Salaries and employee benefits
|
$
|
6,052
|
$
|
5,930
|
$
|
4,499
|
||||||
|
Occupancy and equipment expenses
|
208
|
205
|
181
|
|||||||||
|
Impairment of SBA servicing asset
|
800
|
-
|
-
|
|||||||||
|
Other operating expenses
|
1,311
|
1,263
|
977
|
|||||||||
|
Total non-interest expense
|
$
|
8,371
|
$
|
7,398
|
$
|
5,657
|
||||||
Non-interest expense was $8.4 million for the fourth quarter of 2021, compared to $7.4 million for the third quarter of 2021 and $5.7 million for the fourth quarter of 2020. The increase over both prior periods was
primarily due to various factors including increases in the number of employees related to an increase in strategic program loan volume, the expansion of the Company’s information technology and security division to support enhancements to the
Company’s infrastructure, contractual bonuses paid relating to the expansion of the strategic programs, and an impairment on SBA servicing asset due to the softening of the secondary market for SBA 7(a) loans.
The Company’s efficiency ratio was 34.3% for the fourth quarter of 2021 as compared to 33.7% for the third quarter of 2021 and 48.8% for the fourth quarter of 2020.
Tax Rate
The Company’s effective tax rate was approximately 25.3% for the fourth quarter of 2021, compared to 24.5% for the third quarter of 2021 and 22.2% for the fourth quarter of 2020.
Balance Sheet
The Company’s total assets increased 12.4%, from $338.3 million at September 30, 2021 and increased 19.7%, from $317.5 million at December 31, 2020 to $380.2 million at December 31, 2021. The increase over both prior
periods was mainly due to an increase in cash from the Company’s public stock offering and growth in the SBA 7(a) loan portfolio. The increase in total assets compared to December 31, 2020 was also impacted by an increase in strategic program
loans held-for-sale offset by a substantial decrease in PPP loans outstanding.
4
The following table shows the loan portfolio as of the dates indicated:
|
As of
|
|||||||||||||||||||||||||
|
12/31/2021
|
9/30/2021
|
12/31/2020
|
|||||||||||||||||||||||
|
($s in thousands)
|
Amount
|
% of total
loans
|
Amount
|
% of total
loans
|
Amount
|
% of total
loans
|
|||||||||||||||||||
|
SBA
|
$
|
142,392
|
53.6
|
%
|
$
|
125,192
|
50.2
|
%
|
$
|
203,317
|
77.7
|
%
|
|||||||||||||
|
Commercial, non real estate
|
3,428
|
1.3
|
%
|
3,955
|
1.6
|
%
|
4,020
|
1.5
|
%
|
||||||||||||||||
|
Residential real estate
|
27,108
|
10.2
|
%
|
25,105
|
10.1
|
%
|
17,740
|
6.8
|
%
|
||||||||||||||||
|
Strategic Program loans
|
85,850
|
32.3
|
%
|
87,876
|
35.3
|
%
|
28,265
|
10.8
|
%
|
||||||||||||||||
|
Commercial real estate
|
2,436
|
0.9
|
%
|
2,357
|
0.9
|
%
|
2,892
|
1.1
|
%
|
||||||||||||||||
|
Consumer
|
4,574
|
1.7
|
%
|
4,729
|
1.9
|
%
|
5,543
|
2.1
|
%
|
||||||||||||||||
|
Total period end loans
|
$
|
265,788
|
100.0
|
%
|
$
|
249,214
|
100.0
|
%
|
$
|
261,777
|
100.0
|
%
|
|||||||||||||
Note: SBA loans as of December 31, 2021, September 30, 2021 and December 31, 2020 include $1.1 million, $2.3 million and $107.1 million in PPP loans respectively.
Total period end loans receivable increased 6.7% from $249.2 million at September 30, 2021 and increased 1.5%, from $261.8 million at December 31, 2020 to $265.8 million at December 31, 2021. The growth in loans
receivable in the fourth quarter of 2021 compared to the third quarter of 2021 was due primarily to increases in SBA 7(a) loans. Year-over-year, the increase in loans receivable was driven primarily by the growth in SBA 7(a), strategic program, and
residential real estate loans offset by a substantial decrease in PPP loans due to PPP loan forgiveness throughout 2021.
The following table shows the deposit composition as of the dates indicated:
|
As of
|
|||||||||||||||||||||||||
|
12/31/2021
|
9/30/2021
|
12/31/2020
|
|||||||||||||||||||||||
|
($s in thousands)
|
Total
|
Percent
|
Total
|
Percent
|
Total
|
Percent
|
|||||||||||||||||||
|
Noninterest-bearing demand deposits
|
$
|
110,548
|
43.9
|
%
|
$
|
109,459
|
43.4
|
%
|
$
|
88,067
|
53.5
|
%
|
|||||||||||||
|
Interest-bearing deposits:
|
|||||||||||||||||||||||||
|
Demand
|
5,399
|
2.1
|
%
|
5,398
|
2.1
|
%
|
6,095
|
3.7
|
%
|
||||||||||||||||
|
Savings
|
6,685
|
2.7
|
%
|
8,146
|
3.2
|
%
|
7,435
|
4.5
|
%
|
||||||||||||||||
|
Money markets
|
31,076
|
12.3
|
%
|
25,679
|
10.1
|
%
|
17,567
|
10.7
|
%
|
||||||||||||||||
|
Time certificates of deposit
|
98,184
|
39.0
|
%
|
104,354
|
41.2
|
%
|
45,312
|
27.6
|
%
|
||||||||||||||||
|
Total period end deposits
|
$
|
251,892
|
100.0
|
%
|
$
|
253,036
|
100.0
|
%
|
$
|
164,476
|
100.0
|
%
|
|||||||||||||
Total period end deposits decreased (0.5%), from $253.0 million at September 30, 2021, and increased 53.1% from $164.5 million at December 31, 2020 to $251.9 million at December 31, 2021. The decline from the third quarter of 2021 was driven
primarily by a decline in certificates of deposit. The increase from the fourth quarter of 2020 was driven by a significant increase in time certificates of deposit, noninterest-bearing demand deposits, and money market accounts.
Total shareholders’ equity increased $46.3 million, or 67.0%, to $115.4 million at December 31, 2021 from $69.1 million at September 30, 2021. Year-over-year shareholder’s equity increased $69.6 million during 2021. The increase in shareholders’
equity over both prior periods was primarily due to substantial net income and the Company’s IPO.
5
Bank Regulatory Capital Ratios
The following table presents the leverage ratios for the Bank as of the dates indicated:
|
As of
|
|||||||||
|
12/31/2021
|
9/30/2021
|
Well-
Capitalized Requirement
|
|||||||
|
Leverage Ratio (Bank under CBLR)
|
17.7%
|
|
19.5%
|
|
8.5%
|
|
|||
The Bank’s capital levels remain significantly above well-capitalized guidelines as of the end of the fourth quarter of 2021.
Asset Quality
Nonperforming loans were $0.7 million or 0.2% of total loans receivable at December 31, 2021, compared to $0.8 million or 0.3% of total loans receivable at September 30, 2021 and $0.8 million or 0.3% of total loans receivable at December 31,
2020. As noted above, the provision for loan losses was $2.5 million for the fourth quarter of 2021, compared to $3.4 million for the third quarter of 2021. The Company also determined that a provision for loan losses was not needed in the fourth
quarter of 2020. The Company’s allowance for loan losses to total loans (less PPP loans) was 3.7% at December 31, 2021 compared to 3.9% at September 30, 2021 and 4.0% at December 31, 2020. During the fourth quarter 2021, the Company’s net
charge-offs were $2.3 million, compared to $1.0 million during the third quarter of 2021 and $0.8 million during the fourth quarter of 2020. The increase in charge-offs during the fourth quarter of 2021 compared to both prior periods was
predominately driven by growth in the Company’s held for investment balances related to two of its strategic programs.
6
The following table presents a summary of changes in the allowance for loan losses and asset quality ratios for the periods indicated:
|
For the Three Months Ended
|
||||||||||||
|
($s in thousands)
|
12/31/2021
|
9/30/2021
|
12/31/2020
|
|||||||||
|
Allowance for Loan & Lease Losses:
|
||||||||||||
|
Beginning Balance
|
$
|
9,640
|
$
|
7,239
|
$
|
7,028
|
||||||
|
Provision
|
2,502
|
3,368
|
-
|
|||||||||
|
Charge offs
|
||||||||||||
|
SBA
|
(100
|
)
|
-
|
(17
|
)
|
|||||||
|
Commercial, non real estate
|
-
|
-
|
(232
|
)
|
||||||||
|
Residential real estate
|
-
|
-
|
-
|
|||||||||
|
Strategic Program loans
|
(2,379
|
)
|
(1,106
|
)
|
(628
|
)
|
||||||
|
Commercial real estate
|
-
|
-
|
-
|
|||||||||
|
Consumer
|
-
|
-
|
(11
|
)
|
||||||||
|
Recoveries
|
||||||||||||
|
SBA
|
4
|
30
|
-
|
|||||||||
|
Commercial, non real estate
|
11
|
10
|
-
|
|||||||||
|
Residential real estate
|
-
|
-
|
-
|
|||||||||
|
Strategic Program loans
|
177
|
99
|
58
|
|||||||||
|
Commercial real estate
|
-
|
-
|
1
|
|||||||||
|
Consumer
|
-
|
-
|
-
|
|||||||||
|
Ending Balance
|
$
|
9,855
|
$
|
9,640
|
$
|
6,199
|
||||||
|
Asset Quality Ratios
|
As of and For the Three Months Ended
|
|||||||||||
|
($s in thousands, annualized ratios)
|
12/31/2021
|
9/30/2021
|
12/31/2020
|
|||||||||
|
Nonperforming loans
|
$
|
657
|
$
|
757
|
$
|
831
|
||||||
|
Nonperforming loans to total loans
|
0.2%
|
|
0.3%
|
|
0.3%
|
|
||||||
|
Net charge offs to average loans
|
3.2%
|
|
1.6%
|
|
1.2%
|
|
||||||
|
Allowance for loan losses to loans held for investment
|
4.8%
|
|
5.2%
|
|
2.6%
|
|
||||||
|
Allowance for loan losses to total loans
|
3.7%
|
|
3.9%
|
|
2.4%
|
|
||||||
|
Allowance for loan losses to total loans (less PPP loans)
|
3.7%
|
|
3.9%
|
|
4.0%
|
|
||||||
|
Net charge-offs
|
$
|
2,287
|
$
|
967
|
$
|
829
|
||||||
7
Webcast and Conference Call Information
FinWise will host a conference call today at 5:00 PM ET to discuss its financial results for the fourth quarter of 2021. A simultaneous audio webcast of the conference call will be available on the Company’s investor relations section of the website at
https://viavid.webcasts.com/viewer/event.jsp?ei=1526843&tp_key=5f9c7ab843
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, SEC filings, 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 and a loan production office in Rockville Centre, New York. 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
8
"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:
| • |
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 PPP;
|
| • |
system failure or cybersecurity breaches of the Company’s network security;
|
| • |
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;
|
| • |
the Company’s ability to keep pace with rapid technological changes in the industry or implement new technology effectively;
|
| • |
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;
|
| • |
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;
|
| • |
increased competition in the financial services industry, particularly from regional and national institutions and other companies that offer banking services;
|
| • |
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;
|
| • |
the adequacy of the Company’s risk management framework;
|
| • |
the adequacy of the Company’s allowance for loan losses;
|
| • |
the financial soundness of other financial institutions;
|
| • |
new lines of business or new products and services;
|
| • |
changes in 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;
|
9
| • |
changes in the value of collateral securing the Company’s loans;
|
| • |
possible increases in the Company’s levels of nonperforming assets;
|
| • |
potential losses from loan defaults and nonperformance on loans;
|
| • |
the Company’s ability to protect its intellectual property and the risks it faces with respect to claims and litigation initiated against the Company;
|
| • |
the inability of small- and medium-sized businesses to whom the Company lends to weather adverse business conditions and repay loans;
|
| • |
the Company’s ability to implement aspects of its growth strategy and to sustain its historic rate of growth;
|
| • |
the Company’s ability to continue to originate, sell and retain loans, including through its Strategic Programs;
|
| • |
the concentration of the Company’s lending and depositor relationships through Strategic Programs in the financial technology industry generally;
|
| • |
the Company’s ability to attract additional merchants and retain and grow its existing merchant relationships;
|
| • |
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;
|
| • |
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;
|
| • |
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;
|
| • |
the Company’s dependence on its management team and changes in management composition;
|
| • |
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;
|
| • |
compliance with laws and regulations, supervisory actions, the Dodd-Frank Act, the Regulatory Relief Act, capital requirements, the Bank Secrecy Act, anti-money laundering laws, predatory lending laws, and other statutes and regulations;
|
| • |
changes in the laws, rules, regulations, interpretations or policies relating to financial institutions, accounting, tax, trade, monetary and fiscal matters;
|
| • |
the Company’s ability to maintain a strong core deposit base or other low-cost funding sources;
|
| • |
results of examinations of the Company by the Company’s regulators, including the possibility that its regulators may, among other things, require the Company to increase its allowance for loan losses or to write-down assets;
|
| • |
the Company’s involvement from time to time in legal proceedings, examinations and remedial actions by regulators;
|
| • |
further government intervention in the U.S. financial system;
|
| • |
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;
|
| • |
the Company’s ability to maintain and grow its relationships with its Strategic Program service providers;
|
| • |
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;
|
| • |
future equity and debt issuances; and
|
| • |
other factors listed from time to time in the Company’s filings with the Securities and Exchange Commission, including, without limitation, its Registration Statement on Form S-1, as amended (File No. 333-257929) and subsequent reports
on Form 10-K, Form 10-Q and Form 8-K.
|
10
The foregoing factors should not be construed as exhaustive. If one or more events related to these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect,
actual results may differ materially from its forward-looking statements. Accordingly, you should not place undue reliance on any such forward-looking statements. 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.
11
FINWISE BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
($s in thousands; unaudited)
|
As of
|
||||||||||||
|
($s in thousands)
|
12/31/2021
|
9/30/2021
|
12/31/2020
|
|||||||||
|
ASSETS
|
||||||||||||
|
Cash and cash equivalents
|
||||||||||||
|
Cash and due from banks
|
$
|
411
|
$
|
410
|
$
|
405
|
||||||
|
Interest bearing deposits
|
85,343
|
67,696
|
46,978
|
|||||||||
|
Total cash and cash equivalents
|
85,754
|
68,106
|
47,383
|
|||||||||
|
Investment securities held-to-maturity, at cost
|
11,423
|
4,414
|
1,809
|
|||||||||
|
Investment in Federal Home Loan Bank (FHLB) stock, at cost
|
378
|
377
|
205
|
|||||||||
|
Loans receivable, net
|
198,102
|
178,748
|
232,074
|
|||||||||
|
Strategic Program loans held-for-sale, at lower of cost or fair value
|
60,748
|
62,702
|
20,948
|
|||||||||
|
Premises and equipment, net
|
3,285
|
2,484
|
1,264
|
|||||||||
|
Accrued interest receivable
|
1,548
|
1,297
|
1,629
|
|||||||||
|
Deferred taxes, net
|
1,823
|
1,597
|
452
|
|||||||||
|
SBA servicing asset, net
|
3,938
|
4,368
|
2,415
|
|||||||||
|
Investment in Business Funding Group (BFG), at fair value
|
5,900
|
5,241
|
3,770
|
|||||||||
|
Investment in FinWise Investments, LLC
|
80
|
-
|
-
|
|||||||||
|
Other assets
|
7,235
|
8,982
|
5,566
|
|||||||||
|
Total assets
|
$
|
380,214
|
$
|
338,316
|
$
|
317,515
|
||||||
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||||||
|
Liabilities
|
||||||||||||
|
Deposits
|
||||||||||||
|
Noninterest bearing
|
$
|
110,548
|
$
|
109,459
|
$
|
88,067
|
||||||
|
Interest bearing
|
141,344
|
143,577
|
76,409
|
|||||||||
|
Total deposits
|
251,892
|
253,036
|
164,476
|
|||||||||
|
Accrued interest payable
|
48
|
43
|
195
|
|||||||||
|
Income taxes payable, net
|
233
|
823
|
709
|
|||||||||
|
PPP Liquidity Facility
|
1,050
|
2,259
|
101,007
|
|||||||||
|
Other liabilities
|
11,549
|
13,017
|
5,256
|
|||||||||
|
Total liabilities
|
264,772
|
269,178
|
271,643
|
|||||||||
|
Shareholders' equity
|
||||||||||||
|
Common stock
|
13
|
9
|
9
|
|||||||||
|
Additional paid-in-capital
|
54,836
|
18,647
|
16,853
|
|||||||||
|
Retained earnings
|
60,593
|
50,482
|
29,010
|
|||||||||
|
Total shareholders' equity
|
115,442
|
69,138
|
45,872
|
|||||||||
|
Total liabilities and shareholders' equity
|
$
|
380,214
|
$
|
338,316
|
$
|
317,515
|
||||||
12
FINWISE BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
($s in thousands, except per share amounts; unaudited)
|
For the Three Months Ended
|
||||||||||||
|
($s in thousands, except per share amounts)
|
12/31/2021
|
9/30/2021
|
12/31/2020
|
|||||||||
|
Interest income
|
||||||||||||
|
Interest and fees on loans
|
$
|
15,500
|
$
|
13,726
|
$
|
8,548
|
||||||
|
Interest on securities
|
28
|
7
|
9
|
|||||||||
|
Other interest income
|
25
|
16
|
8
|
|||||||||
|
Total interest income
|
15,553
|
13,749
|
8,565
|
|||||||||
|
Interest expense
|
||||||||||||
|
Interest on deposits
|
279
|
271
|
331
|
|||||||||
|
Interest on PPP Liquidity Facility
|
2
|
8
|
73
|
|||||||||
|
Total interest expense
|
281
|
279
|
404
|
|||||||||
|
Net interest income
|
15,272
|
13,470
|
8,161
|
|||||||||
|
Provision for loan losses
|
2,503
|
3,367
|
-
|
|||||||||
|
Net interest income after provision for loan losses
|
12,769
|
10,103
|
8,161
|
|||||||||
|
Non-interest income
|
||||||||||||
|
Strategic Program fees
|
6,082
|
4,982
|
2,713
|
|||||||||
|
Gain on sale of loans
|
1,813
|
2,876
|
289
|
|||||||||
|
SBA loan servicing fees
|
356
|
337
|
283
|
|||||||||
|
Change in fair value on investment in BFG
|
864
|
266
|
137
|
|||||||||
|
Other miscellaneous income
|
14
|
14
|
10
|
|||||||||
|
Total non-interest income
|
9,129
|
8,475
|
3,432
|
|||||||||
|
Non-interest expense
|
||||||||||||
|
Salaries and employee benefits
|
6,052
|
5,930
|
4,499
|
|||||||||
|
Occupancy and equipment expenses
|
208
|
205
|
181
|
|||||||||
|
Impairment of SBA servicing asset
|
800
|
-
|
-
|
|||||||||
|
Other operating expenses
|
1,311
|
1,263
|
977
|
|||||||||
|
Total non-interest expense
|
8,371
|
7,398
|
5,657
|
|||||||||
|
Income before income tax expense
|
13,527
|
11,180
|
5,936
|
|||||||||
|
Provision for income taxes
|
3,416
|
2,738
|
1,320
|
|||||||||
|
Net income
|
$
|
10,111
|
$
|
8,442
|
$
|
4,616
|
||||||
|
Earnings per share, basic
|
$
|
0.95
|
$
|
0.97
|
$
|
0.53
|
||||||
|
Earnings per share, diluted
|
$
|
0.90
|
$
|
0.90
|
$
|
0.53
|
||||||
|
Weighted average shares outstanding, basic
|
10,169,005
|
8,255,953
|
8,035,778
|
|||||||||
|
Weighted average shares outstanding, diluted
|
10,818,984
|
8,847,606
|
8,081,470
|
|||||||||
|
Shares outstanding at end of period
|
12,772,010
|
8,746,110
|
8,660,334
|
|||||||||
13
FINWISE BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
($s in thousands, except per share amounts; unaudited)
|
For the Years Ended
|
||||||||
|
($s in thousands, except per share amounts)
|
12/31/2021
|
12/31/2020
|
||||||
|
Interest income
|
||||||||
|
Interest and fees on loans
|
$
|
49,135
|
$
|
29,271
|
||||
|
Interest on securities
|
47
|
34
|
||||||
|
Other interest income
|
61
|
201
|
||||||
|
Total interest income
|
49,243
|
29,506
|
||||||
|
Interest expense
|
||||||||
|
Interest on deposits
|
1,138
|
1,583
|
||||||
|
Interest on PPP Liquidity Facility
|
127
|
173
|
||||||
|
Total interest expense
|
1,265
|
1,756
|
||||||
|
Net interest income
|
47,978
|
27,750
|
||||||
|
Provision for loan losses
|
8,039
|
5,234
|
||||||
|
Net interest income after provision for loan losses
|
39,939
|
22,516
|
||||||
|
Non-interest income
|
||||||||
|
Strategic Program fees
|
17,959
|
9,591
|
||||||
|
Gain on sale of loans
|
9,689
|
2,849
|
||||||
|
SBA loan servicing fees
|
1,156
|
1,028
|
||||||
|
Change in fair value on investment in BFG
|
2,991
|
856
|
||||||
|
Other miscellaneous income
|
49
|
49
|
||||||
|
Total non-interest income
|
31,844
|
14,373
|
||||||
|
Non-interest expense
|
||||||||
|
Salaries and employee benefits
|
22,365
|
16,835
|
||||||
|
Occupancy and equipment expenses
|
810
|
694
|
||||||
|
Impairment of SBA servicing asset
|
800
|
-
|
||||||
|
Loss on investment in BFG
|
-
|
50
|
||||||
|
Other operating expenses
|
5,536
|
4,170
|
||||||
|
Total non-interest expense
|
29,511
|
21,749
|
||||||
|
Income before income tax expense
|
42,272
|
15,140
|
||||||
|
Provision for income taxes
|
10,689
|
3,942
|
||||||
|
Net income
|
$
|
31,583
|
$
|
11,198
|
||||
|
Earnings per share, basic
|
$
|
3.44
|
$
|
1.29
|
||||
|
Earnings per share, diluted
|
$
|
3.27
|
$
|
1.28
|
||||
|
Weighted average shares outstanding, basic
|
8,669,724
|
8,025,390
|
||||||
|
Weighted average shares outstanding, diluted
|
9,108,163
|
8,069,634
|
||||||
|
Shares outstanding at end of period
|
12,772,010
|
8,660,334
|
||||||
14
FINWISE BANCORP
AVERAGE BALANCES, YIELDS, AND RATES - QUARTERLY
($s in thousands; unaudited)
|
For the Three Months Ended
|
For the Three Months Ended
|
For the Three Months Ended
|
|||||||||||||||||||||||||||||||||||
|
12/31/2021
|
9/30/2021
|
12/31/2020
|
|||||||||||||||||||||||||||||||||||
|
($s in thousands, annualized ratios)
|
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
|
$
|
72,746
|
25
|
0.1
|
%
|
$
|
54,261
|
16
|
0.1
|
%
|
$
|
40,155
|
8
|
0.1
|
%
|
||||||||||||||||||||||
|
Investment securities
|
8,078
|
28
|
1.4
|
%
|
1,689
|
7
|
1.7
|
%
|
1,887
|
9
|
1.9
|
%
|
|||||||||||||||||||||||||
|
Loans held for sale
|
87,156
|
7,553
|
34.7
|
%
|
65,273
|
6,293
|
38.6
|
%
|
29,329
|
3,597
|
49.1
|
%
|
|||||||||||||||||||||||||
|
Loans held for investment
|
199,609
|
7,947
|
15.9
|
%
|
173,092
|
7,433
|
17.2
|
%
|
241,600
|
4,951
|
8.2
|
%
|
|||||||||||||||||||||||||
|
Total interest earning assets
|
367,589
|
15,553
|
16.9
|
%
|
294,315
|
13,749
|
18.7
|
%
|
312,971
|
8,565
|
10.9
|
%
|
|||||||||||||||||||||||||
|
Less: allowance for loan losses
|
(9,450
|
)
|
(8,083
|
)
|
(6,753
|
)
|
|||||||||||||||||||||||||||||||
|
Non-interest earning assets
|
24,379
|
18,822
|
9,222
|
||||||||||||||||||||||||||||||||||
|
Total assets
|
$
|
382,518
|
$
|
305,054
|
$
|
315,440
|
|||||||||||||||||||||||||||||||
|
Interest bearing liabilities:
|
|||||||||||||||||||||||||||||||||||||
|
Demand
|
$
|
7,411
|
$
|
15
|
0.8
|
%
|
$
|
5,007
|
$
|
11
|
0.9
|
%
|
$
|
6,226
|
$
|
15
|
1.0
|
%
|
|||||||||||||||||||
|
Savings
|
7,573
|
1
|
0.1
|
%
|
8,818
|
3
|
0.1
|
%
|
6,775
|
4
|
0.2
|
%
|
|||||||||||||||||||||||||
|
Money market accounts
|
28,859
|
21
|
0.3
|
%
|
22,274
|
21
|
0.4
|
%
|
17,618
|
21
|
0.5
|
%
|
|||||||||||||||||||||||||
|
Certificates of deposit
|
104,135
|
242
|
0.9
|
%
|
76,127
|
236
|
1.2
|
%
|
48,201
|
292
|
2.4
|
%
|
|||||||||||||||||||||||||
|
Total deposits
|
147,977
|
279
|
0.8
|
%
|
112,226
|
271
|
1.0
|
%
|
78,820
|
331
|
1.7
|
%
|
|||||||||||||||||||||||||
|
Other borrowings
|
1,437
|
2
|
0.6
|
%
|
9,365
|
8
|
0.3
|
%
|
82,016
|
73
|
0.4
|
%
|
|||||||||||||||||||||||||
|
Total interest bearing liabilities
|
149,414
|
281
|
0.8
|
%
|
121,591
|
279
|
0.9
|
%
|
160,836
|
404
|
1.0
|
%
|
|||||||||||||||||||||||||
|
Non-interest bearing deposits
|
127,590
|
107,342
|
106,735
|
||||||||||||||||||||||||||||||||||
|
Non-interest bearing liabilities
|
16,315
|
13,076
|
5,411
|
||||||||||||||||||||||||||||||||||
|
Shareholders’ equity
|
89,199
|
63,045
|
42,458
|
||||||||||||||||||||||||||||||||||
|
Total liabilities and shareholders’ equity
|
$
|
382,518
|
$
|
305,054
|
$
|
315,440
|
|||||||||||||||||||||||||||||||
|
Net interest income and interest rate spread
|
$
|
15,272
|
16.2
|
%
|
$
|
13,470
|
17.8
|
%
|
$
|
8,161
|
9.9
|
%
|
|||||||||||||||||||||||||
|
Net interest margin
|
16.6
|
%
|
18.3
|
%
|
10.4
|
%
|
|||||||||||||||||||||||||||||||
|
Ratio of average interest-earning assets to average interest-bearing liabilities
|
246.0
|
%
|
242.1
|
%
|
194.6
|
%
|
|||||||||||||||||||||||||||||||
Note: Average PPP loans for the three months ended December 31, 2021, September 30, 2021 and December 31, 2020 were $1.5 million, $8.8 million and $122.7 million, respectively.
15
FINWISE BANCORP
AVERAGE BALANCES, YIELDS, AND RATES – YEAR-TO-DATE
($s in thousands; unaudited)
|
For the Years Ended
|
For the Years Ended
|
||||||||||||||||||||||||
|
12/31/2021
|
12/31/2020
|
||||||||||||||||||||||||
|
($s in thousands, annualized ratios)
|
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
|
$
|
55,960
|
61
|
0.1
|
%
|
$
|
43,892
|
201
|
0.5
|
%
|
|||||||||||||||
|
Investment securities
|
3,298
|
47
|
1.4
|
%
|
1,622
|
34
|
2.1
|
%
|
|||||||||||||||||
|
Loans held for sale
|
59,524
|
22,461
|
37.7
|
%
|
20,154
|
10,560
|
52.4
|
%
|
|||||||||||||||||
|
Loans held for investment
|
198,992
|
26,674
|
13.4
|
%
|
187,314
|
18,711
|
10.0
|
%
|
|||||||||||||||||
|
Total interest earning assets
|
317,774
|
49,243
|
15.5
|
%
|
252,982
|
29,506
|
11.7
|
%
|
|||||||||||||||||
|
Less: allowance for loan losses
|
(7,548
|
)
|
(6,706
|
)
|
|||||||||||||||||||||
|
Non-interest earning assets
|
17,002
|
8,130
|
|||||||||||||||||||||||
|
Total assets
|
$
|
327,228
|
$
|
254,406
|
|||||||||||||||||||||
|
Interest bearing liabilities:
|
|||||||||||||||||||||||||
|
Demand
|
$
|
6,060
|
$
|
53
|
0.9
|
%
|
$
|
3,237
|
$
|
62
|
1.9
|
%
|
|||||||||||||
|
Savings
|
7,897
|
10
|
0.1
|
%
|
6,234
|
16
|
0.3
|
%
|
|||||||||||||||||
|
Money market accounts
|
21,964
|
75
|
0.3
|
%
|
16,327
|
104
|
0.6
|
%
|
|||||||||||||||||
|
Certificates of deposit
|
72,311
|
1,000
|
1.4
|
%
|
57,496
|
1,401
|
2.4
|
%
|
|||||||||||||||||
|
Total deposits
|
108,232
|
1,138
|
1.1
|
%
|
83,294
|
1,583
|
1.9
|
%
|
|||||||||||||||||
|
Other borrowings
|
36,363
|
127
|
0.3
|
%
|
49,044
|
173
|
0.4
|
%
|
|||||||||||||||||
|
Total interest bearing liabilities
|
144,595
|
1,265
|
0.9
|
%
|
132,338
|
1,756
|
1.3
|
%
|
|||||||||||||||||
|
Non-interest bearing deposits
|
107,481
|
80,537
|
|||||||||||||||||||||||
|
Non-interest bearing liabilities
|
11,392
|
3,941
|
|||||||||||||||||||||||
|
Shareholders’ equity
|
63,760
|
37,590
|
|||||||||||||||||||||||
|
Total liabilities and shareholders’ equity
|
$
|
327,228
|
$
|
254,406
|
|||||||||||||||||||||
|
Net interest income and interest rate spread
|
$
|
47,978
|
14.6
|
%
|
$
|
27,750
|
10.3
|
%
|
|||||||||||||||||
|
Net interest margin
|
15.1
|
%
|
11.0
|
%
|
|||||||||||||||||||||
|
Ratio of average interest-earning assets to average interest-bearing liabilities
|
219.8
|
%
|
191.2
|
%
|
|||||||||||||||||||||
Note: Average PPP loans for the years ended December 31, 2021 and December 31, 2020 were $36.6 million and $79.7 million, respectively.
16
FINWISE BANCORP
SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA
($s in thousands, except per share amounts; unaudited)
|
As of and for the Three Months Ended
|
||||||||||||
|
($s in thousands, except per share amounts, annualized ratios)
|
12/31/2021
|
9/30/2021
|
12/31/2020
|
|||||||||
|
Selected Loan Metrics
|
||||||||||||
|
Amount of loans originated
|
$
|
2,304,234
|
$
|
1,822,942
|
$
|
850,927
|
||||||
|
Selected Income Statement Data
|
||||||||||||
|
Interest income
|
$
|
15,553
|
$
|
13,749
|
$
|
8,565
|
||||||
|
Interest expense
|
281
|
279
|
404
|
|||||||||
|
Net interest income
|
15,272
|
13,470
|
8,161
|
|||||||||
|
Provision for loan losses
|
2,503
|
3,367
|
-
|
|||||||||
|
Net interest income after provision for loan losses
|
12,769
|
10,103
|
8,161
|
|||||||||
|
Non-interest income
|
9,129
|
8,475
|
3,432
|
|||||||||
|
Non-interest expense
|
8,371
|
7,398
|
5,657
|
|||||||||
|
Provision for income taxes
|
3,416
|
2,738
|
1,320
|
|||||||||
|
Net income
|
10,111
|
8,442
|
4,616
|
|||||||||
|
Selected Balance Sheet Data
|
||||||||||||
|
Total Assets
|
$
|
380,214
|
$
|
338,316
|
$
|
317,515
|
||||||
|
Cash and cash equivalents
|
85,754
|
68,106
|
47,383
|
|||||||||
|
Investment securities held-to-maturity, at cost
|
11,423
|
4,414
|
1,809
|
|||||||||
|
Loans receivable, net
|
198,102
|
178,748
|
232,074
|
|||||||||
|
Strategic Program loans held-for-sale, at lower of cost or fair value
|
60,748
|
62,702
|
20,948
|
|||||||||
|
SBA servicing asset, net
|
3,938
|
4,368
|
2,415
|
|||||||||
|
Investment in Business Funding Group, at fair value
|
5,900
|
5,241
|
3,770
|
|||||||||
|
Deposits
|
251,892
|
253,036
|
164,476
|
|||||||||
|
PPP Liquidity Facility
|
1,050
|
2,259
|
101,007
|
|||||||||
|
Total shareholders' equity
|
115,442
|
69,138
|
45,872
|
|||||||||
|
Tangible shareholders’ equity (1)
|
115,442
|
69,138
|
45,872
|
|||||||||
|
Share and Per Share Data
|
||||||||||||
|
Earnings per share - basic
|
$
|
0.95
|
$
|
0.97
|
$
|
0.53
|
||||||
|
Earnings per share - diluted
|
$
|
0.90
|
$
|
0.90
|
$
|
0.53
|
||||||
|
Book value per share
|
$
|
9.04
|
$
|
7.91
|
$
|
5.30
|
||||||
|
Tangible book value per share
|
$
|
9.04
|
$
|
7.91
|
$
|
5.30
|
||||||
|
Weighted avg outstanding shares - basic
|
10,169,005
|
8,255,953
|
8,035,778
|
|||||||||
|
Weighted avg outstanding shares - diluted
|
10,818,984
|
8,847,606
|
8,081,470
|
|||||||||
|
Shares outstanding at end of period
|
12,772,010
|
8,746,110
|
8,660,334
|
|||||||||
|
Asset Quality Ratios
|
||||||||||||
|
Nonperforming loans to total loans
|
0.2
|
%
|
0.3
|
%
|
0.3
|
%
|
||||||
|
Net charge offs to average loans
|
3.2
|
%
|
1.6
|
%
|
1.2
|
%
|
||||||
|
Allowance for loan losses to loans held for investment
|
4.8
|
%
|
5.2
|
%
|
2.6
|
%
|
||||||
|
Allowance for loan losses to total loans
|
3.7
|
%
|
3.9
|
%
|
2.4
|
%
|
||||||
|
Allowance for loan losses to total loans (less PPP loans)
|
3.7
|
%
|
3.9
|
%
|
4.0
|
%
|
||||||
|
Capital Ratios
|
||||||||||||
|
Total shareholders' equity to total assets
|
30.4
|
%
|
20.4
|
%
|
14.4
|
%
|
||||||
|
Tangible shareholders' equity to tangible assets
|
30.4
|
%
|
20.4
|
%
|
14.4
|
%
|
||||||
|
Leverage Ratio (Bank under CBLR)
|
17.7
|
%
|
19.5
|
%
|
16.6
|
%
|
||||||
(1) 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 as an intangible asset 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.
17
Reconciliation of GAAP to Non-GAAP Financial Measures
Efficiency ratio
|
For Three Months Ended
|
||||||||||||
|
($s in thousands, annualized ratios)
|
12/31/2021
|
9/30/2021
|
12/31/2020
|
|||||||||
|
Non-interest expense
|
$
|
8,371
|
$
|
7,398
|
$
|
5,657
|
||||||
|
Net interest income
|
|
15,272
|
|
13,470
|
|
8,161
|
||||||
|
Total non-interest income
|
9,129
|
8,475
|
3,432
|
|||||||||
|
Adjusted operating revenue
|
$
|
24,401
|
$
|
21,945
|
$
|
11,593
|
||||||
|
Efficiency ratio
|
34.3%
|
|
33.7%
|
|
48.8%
|
|
||||||
Allowance for loan losses to total loans (less PPP Loans)
|
As of
|
||||||||||||
|
12/31/2021
|
9/30/2021
|
12/31/2020
|
||||||||||
|
($s in thousands)
|
||||||||||||
|
Allowance for loan losses
|
$
|
9,855
|
$
|
9,640
|
$
|
6,199
|
||||||
|
Total Loans
|
265,788
|
249,214
|
261,777
|
|||||||||
|
PPP Loans
|
1,091
|
2,303
|
107,145
|
|||||||||
|
Total Loans less PPP Loans
|
$
|
264,697
|
$
|
246,911
|
$
|
154,632
|
||||||
|
Allowance for loan losses to total loans (less PPP Loans)
|
3.7%
|
|
3.9%
|
|
4.0%
|
|
||||||
Total nonperforming assets and troubled debt restructurings to total assets (less PPP loans)
|
As of
|
||||||||||||
|
12/31/2021
|
9/30/2021
|
12/31/2020
|
||||||||||
|
($s in thousands)
|
||||||||||||
|
Total Assets
|
$
|
380,214
|
$
|
338,316
|
$
|
317,515
|
||||||
|
PPP Loans
|
$ |
1,091
|
$ |
2,303
|
$ |
107,145
|
||||||
|
Total Assets less PPP Loans
|
$
|
379,123
|
$
|
336,013
|
$
|
210,370
|
||||||
|
Total nonperforming assets and troubled debt restructurings
|
$
|
763
|
$
|
864
|
$
|
1,701
|
||||||
|
Total nonperforming assets and troubled debt restructurings to total assets (less PPP loans)
|
0.2%
|
|
0.3%
|
|
0.8%
|
|
||||||
18