0001140361-23-014828 | 10-K | XBRL Viewer

Less accumulated depreciation

$ 11,735

$ 4,632

(2,257)

(1,347)

Premises and equipment, net

9,478

3,285

Depreciation expense

1,000

300

Rental income from operating leases

200

Future Minimum Annual Undiscounted Rental Payments for Operating Leases [Abstract]

Year Ended December 31, 2023

850

Year Ended December 31, 2024

1,104

Year Ended December 31, 2025

1,086

Year Ended December 31, 2026

1,118

Year Ended December 31, 2027

1,152

Thereafter

2,203

Total

7,513

Less present value discount

(493)

Operating lease liabilities

$ 7,020

Number of leases entered into during period | Lease

Information Regarding Lease Assets and Liabilities [Abstract]

Weighted-average remaining lease term - operating leases (in years)

6 years 8 months 12 days

Weighted-average discount rate - operating leases

1.90%

Components of Lease Expense [Abstract]

Operating leases, operating lease cost

$ 1,044

Operating leases, variable lease cost

Operating lease expense

1,060

Short-term lease rent expense

Net rent expense

1,098

500

Leasehold Improvements [Member]

Furniture, Fixtures and Equipment [Member]

3,720

Commercial Operating Leases [Member]

^[1]

6,501

2,219

Premises and equipment, net

2,800

2,700

Construction in Progress [Member]

$ 1,514

$ 2,333

[1]	The Furniture, fixtures, and equipment include commercial operating leases of $2.8 million issued during the year ended 2022. Net book value of the operating leases as of December 31, 2022 was $2.7 million.

Stock-Based Compensation, Summary (Details) - Employee [Member] - shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2018	Apr. 19, 2022	Jun. 20, 2019	Apr. 20, 2017
2019 Plan [Member]
Stock-Based Compensation [Abstract]
Number of shares authorized for issuance (in shares)	1,280,000		500,000	780,000
Future awards life	10 years
Number of shares available for grant (in shares)	621,472
2016 Plan [Member]
Stock-Based Compensation [Abstract]
Number of shares authorized for issuance (in shares)					299,628
Future awards life	10 years
Number of shares available for grant (in shares)	894
Shares granted (in shares)		0
2019 Plan and 2016 Plan [Member] \| Minimum [Member]
Stock-Based Compensation [Abstract]
Vesting period	1 year
2019 Plan and 2016 Plan [Member] \| Maximum [Member]
Stock-Based Compensation [Abstract]
Future awards life	10 years
Vesting period	5 years

Fair Value of Financial Instruments, Investment in BFG Activity (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2019
Investment in BFG Activity [Abstract]
Beginning balance	$ 5,900	$ 3,770
Distributions from BFG	(622)	(861)
Change in fair value of BFG	(478)	2,991
Beginning balance	$ 4,800	$ 5,900
Lack of Marketability Discount [Member]
Fair Value Measurement Inputs and Valuation Techniques [Abstract]
Investment, measurement input			0.20
Discount to Non-Voting Shares [Member]
Fair Value Measurement Inputs and Valuation Techniques [Abstract]
Investment, measurement input			0.045

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2022	Mar. 27, 2023	Jun. 30, 2022
Cover [Abstract]
Document Type	10-K
Amendment Flag	false
Document Annual Report	true
Document Period End Date	Dec. 31, 2022
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Document Transition Report	false
Entity File Number	001-40721
Entity Registrant Name	FINWISE BANCORP
Entity Central Index Key	0001856365
Entity Incorporation, State or Country Code	UT
Entity Tax Identification Number	83-0356689
Entity Address, Address Line One	756 East Winchester, Suite 100
Entity Address, City or Town	Murray
Entity Address, State or Province	UT
Entity Address, Postal Zip Code	84107
City Area Code	801
Local Phone Number	501-7200
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	FINW
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
ICFR Auditor Attestation Flag	false
Entity Shell Company	false
Entity Public Float			$ 97.3
Entity Common Stock, Shares Outstanding		12,824,572
Auditor Firm ID	173
Auditor Name	Moss Adams LLP
Auditor Location	Spokane, Washington

Capital Requirements

12 Months Ended

Dec. 31, 2022

Capital Requirements [Abstract]

Capital Requirements

Note 7 – Capital Requirements

The Bank is subject to various regulatory capital requirements administered by federal and State of Utah banking agencies (the regulators). Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off -balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk -weighting, and other factors. Prompt corrective action provisions are not applicable to the bank holding company.

Beginning January 1, 2020, the bank qualified and elected to use the community bank leverage ratio (CBLR) framework for quantitative measures which requires the Bank to maintain minimum amounts and ratios of Tier 1 capital to average total consolidated assets. Management believes, as of December 31, 2022 and December 31, 2021, that the Bank meets all capital adequacy requirements to which it is subject.

As of December 31, 2022 and 2021, the most recent notification from the FDIC categorized the Bank as well-capitalized under the regulatory framework for prompt corrective action (there are no conditions or events since that notification that management believes have changed the Bank’s category). The following table sets forth the actual capital amounts and ratios for the Bank and the minimum ratio and amount of capital required to be categorized as well-capitalized and adequately capitalized as of the dates indicated.

The Bank’s actual capital amounts and ratios are presented in the following table:

	Actual						Well-Capitalized Requirement
($ in thousands)	Amount			Ratio			Amount				Ratio
December 31, 2022
Leverage ratio (CBLR election)		$	91,674		25.1	%		$	32,898	*		9.0	%
December 31, 2021
Leverage ratio (CBLR election)		$	65,503		17.7	%		$	31,442	*		8.5	%

* On March 27, 2020 the CARES Act became law. Section 4012 of the CARES Act directs the agencies to issue an interim final rule reducing the CBLR ratio requirement from 9% to 8% for the last two quarters of the year 2020, 8.5% for the calendar year 2021, and 9% thereafter.

The Federal Reserve’s policy statement and supervisory guidance on the payment of cash dividends by a Bank Holding Company (“BHC”), such as FinWise Bancorp, expresses the view that a BHC should generally pay cash dividends on common stock only to the extent that (1) the BHC’s net income available over the past year is sufficient to cover the cash dividend, (2) the rate of earnings retention is consistent with the organization’s expected future needs and financial condition, and (3) the minimum regulatory capital adequacy ratios are met. Should an insured depository institution controlled by a bank holding company be “significantly undercapitalized” under the applicable federal bank capital ratios, or if the bank subsidiary is “undercapitalized” and has failed to submit an acceptable capital restoration plan or has materially failed to implement such a plan, federal banking regulators (in the case of the Bank, the FDIC) may choose to require prior Federal Reserve approval for any capital distribution by the BHC.

In addition, since FinWise Bancorp is a legal entity separate and distinct from the Bank and does not conduct stand-alone operations, an ability to pay dividends depends on the ability of the Bank to pay dividends to FinWise Bancorp and the FDIC and the Utah Department of Financial Institutions (“UDFI”) may, under certain circumstances, prohibit the payment of dividends to FinWise Bancorp from the Bank. Utah corporate law also requires that dividends can only be paid out of funds legally available.

The Company has not paid any cash dividends on its common stock since inception and it currently has no plans to pay cash dividends in the foreseeable future. However, the Company’s Board of Directors may declare a cash or stock dividend out of retained earnings provided the regulatory minimum capital ratios are met. The Company plans to maintain capital ratios that meet the well-capitalized standards per the regulations and, therefore, would limit dividends to amounts that are appropriate to maintain those well-capitalized regulatory capital ratios.

The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union.

Summary of Significant Accounting Policies, Stock-Based Compensation (Details)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Summary of Assumptions Used in Determining Black-Scholes Option Pricing Model for Options Granted [Abstract]
Risk-free interest rate	3.10%
Expected dividend yield	0.00%	0.00%
Minimum [Member]
Summary of Assumptions Used in Determining Black-Scholes Option Pricing Model for Options Granted [Abstract]
Risk-free interest rate		0.40%
Expected term in years	5 years 6 months	5 years
Expected volatility	45.80%	45.70%
Maximum [Member]
Summary of Assumptions Used in Determining Black-Scholes Option Pricing Model for Options Granted [Abstract]
Risk-free interest rate		1.30%
Expected term in years	6 years 6 months	7 years 6 months
Expected volatility	46.70%	47.60%

Investment in Business Funding Group, LLC	12 Months Ended
Investment in Business Funding Group, LLC	Dec. 31, 2022
Investment in Business Funding Group, LLC [Abstract]
Investment in Business Funding Group, LLC	Note 9 – Investment in Business Funding Group, LLC On December 31, 2019, the Company purchased from certain members of BFG a 10% membership interest in exchange for an aggregate of 950,784 shares of par value $0.001 Common Stock of the Company. The exchange was accounted for at fair value based on the fair value of the Company’s shares of approximately $3.5 million. The Company’s 10% membership interests of BFG are comprised of Class A Voting Units representing 4.96% of the aggregate membership interests of BFG and Class B Non-Voting Units representing 5.04% of the aggregate membership interests of BFG. The other existing members of BFG jointly own the remaining 90% of the outstanding membership interests, on a fully-diluted basis – all of which membership interests are Class A Voting Units. Based on the Company’s accounting policy with respect to investments in limited liability companies, the Company concluded that its level of ownership was indicative of significant influence and, as a result, the investment would be accounted for using the equity method. However, the Company elected the fair value option for its investment due to cost-benefit considerations. The Company received distributions from BFG in the amounts of $0.6 million and $0.9 million for the years ended December 31, 2022 and 2021, respectively. These distributions were recorded in the Consolidated Balance Sheets as decreases in the investment in BFG. On March 31, 2020, the Company entered into an agreement with BFG whereby the Company has the right of first refusal to purchase additional interests in BFG from any selling members. Additionally, the Company was granted an option to purchase all, but not less than all, of the interests in BFG from the remaining members for an earnings multiple between 10 times and 15 times net profit based on the fiscal year ended immediately prior to the exercise of the option. The option period begins on January 1, 2021 and expires on January 1, 2028. In consideration of granting the first right of refusal and the option, BFG members received 270,000 warrants in the aggregate. The warrants have an exercise price of $6.67 per share and the warrants expire on March 31, 2028. The warrants are free-standing equity instruments and, as a result, are classified within equity at the fair value on the issuance date. The fair value of the warrants was determined by our board of directors with input from management, relying in part upon valuation reports prepared by a third-party valuation firm using a Black-Scholes option pricing model adjusted for a lack of marketability since the Company’s stock was not publicly traded. The resulting fair value of the warrants was $0.19 per share. For further discussion on the Company’s investment in BFG, see Note 15 Related Parties.

Related Parties (Details) - USD ($) $ in Millions	Oct. 21, 2022	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2019
Related Parties [Abstract]
Loans outstanding to related parties		$ 0.0	$ 0.0
Deposits		$ 1.2	$ 0.5
Mr. Alan Weichselbaum [Member]
Related Parties [Abstract]
Proceeds from collection of promissory note to related party	$ 0.1
BFG [Member]
Equity Method Investments [Abstract]
Membership interest				10.00%

Carrying amount as of the balance sheet date of obligations due all related parties.

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Fair Value of Financial Instruments [Abstract]

Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2022

Investment in BFG Activity

The following table summarizes investment in BFG activity for the periods indicated:

	For the Years Ended December 31,
($ in thousands)	2022			2021
Beginning balance	$	5,900		$	3,770
Distributions from BFG		(622	)		(861	)
Change in fair value of BFG		(478	)		2,991
Ending balance	$	4,800		$	5,900

Carrying Amount and Fair Value of Financial Instruments

The table below presents the carrying amount and fair value of the Company’s financial instruments:

			December 31, 2022				December 31, 2021
($ in thousands)	Level		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial assets:
Cash and cash equivalents		1	$	100,567	$	100,567	$	85,754	$	85,754
Investment securities held-to-maturity		2		14,292		12,728		11,423		11,332
Investment in FHLB stock		2		449		449		378		378
Loans held for investment		3		224,217		237,225		198,102		197,412
Loans held-for-sale		2		23,589		23,586		60,748		60,743
Accrued interest receivable		2		1,818		1,818		1,548		1,548
SBA servicing asset		2		5,210		5,210		3,938		3,938
Investment in BFG		3		4,800		4,800		5,900		5,900
Financial liabilities:
Total deposits		2		242,998		221,287		251,892		249,488
Accrued interest payable		2		54		54		48		48
PPP Liquidity Facility		2		314		314		1,050		1,050

Assets Measured at Fair Value on a Nonrecurring Basis

Assets measured at fair value on a nonrecurring basis are summarized as follows:

($ in thousands)			Fair Value Measurements Using
Description of Financial Instrument	Fair Value		Level 1		Level 2		Level 3
December 31, 2022
Nonrecurring assets
Impaired loans	$	450	$	—	$	—	$	450
December 31, 2021
Nonrecurring assets
Impaired loans	$	972	$	—	$	—	$	972

Quantitative Information for Level 3 Fair Value Measurements

The range and weighted average of the significant unobservable inputs used to fair value Level 3 nonrecurring assets during the years ended December 31, 2022 and 2021, along with the valuation techniques used, are shown in the following table:

($ in thousands)	Fair Value		Valuation Technique	Unobservable Input	Range (Weighted Average)
December 31, 2022
Impaired loans	$	450	Market comparable	Adjustment to appraisal value		0.20	%

December 31, 2021
Impaired loans	$	972	Market comparable	Adjustment to appraisal value		0.50	%

Significant Unobservable Inputs Used to Fair Value Investment in BFG on Recurring Asset

The range and weighted average of the significant unobservable inputs used to fair value the investment in BFG Level 3 recurring asset as of December 31, 2022 and as of December 31, 2021 are shown in the following table:

	December 31, 2022			December 31, 2021
($ in thousands)	Range (Weighted Average)			Range (Weighted Average)
Discounted Cash Flows
Revenue growth rate		10.8	%		16.6	%
Expense growth rate		11.5	%		16.3	%
Discount rate		30.0	%		25.0	%

Guideline Public Company
Multiples of enterprise value	3.0x to 5.0x			4.0x to 6.0x

Retirement Plan (Details) - 401(K) Plan [Member] - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Defined Contribution Plan [Abstract]
Minimum age of employees to participate in plan	21 years
Minimum required service period to participate in plan	1 year
Profit sharing contributions	$ 0.5	$ 0.4

Fair Value of Financial Instruments, Assets Measured on Non-recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Level 3 [Member]
Nonrecurring assets [Abstract]
Impaired loans	$ 450	$ 972
Nonrecurring Basis [Member]
Nonrecurring assets [Abstract]
Impaired loans	450	972
Nonrecurring Basis [Member] \| Level 1 [Member]
Nonrecurring assets [Abstract]
Impaired loans	0	0
Nonrecurring Basis [Member] \| Level 2 [Member]
Nonrecurring assets [Abstract]
Impaired loans	0	0
Nonrecurring Basis [Member] \| Level 3 [Member]
Nonrecurring assets [Abstract]
Impaired loans	$ 450	$ 972

Investments

12 Months Ended

Dec. 31, 2022

Investments [Abstract]

Investments

Note 2 – Investments

Investment securities held-to-maturity, at cost

The amortized cost, unrealized gains and losses, and estimated fair values of the Company’s held-to-maturity securities at December 31, 2022 and 2021, are summarized as follows:

	December 31, 2022
($ in thousands)	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
Mortgage-backed securities	$	14,292	$	5	$	(1,569	)	$	12,728

	December 31, 2021
($ in thousands)	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
Mortgage-backed securities	$	11,423	$	23	$	(114	)	$	11,332

The Company had seventeen securities in an unrealized loss position at December 31, 2022, nine in an unrealized loss at December 31, 2021.

	December 31, 2022
	Less than 12 months					12 Months or More					Total
($ in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Mortgage-backed securities	$	5,126	$	(286	)	$	6,671	$	(1,283	)	$	11,797	$	(1,569	)

	December 31, 2021
		Less than 12 months					12 Months or More				Total
($ in thousands)		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Mortgage-backed securities		$	8,961	$	(114	)	$	—	$	—	$	8,961	$	(114	)

The amortized cost and estimated market value of debt securities at December 31, 2022 and 2021, by contractual maturity are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	December 31, 2022				December 31, 2021
($ in thousands)	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Securities held-to-maturity
Due in one year or less	$	—	$	—	$	—	$	—
Due after one year through five years		—		—		—		—
Due after five years through ten years		3,388		3,202		1,541		1,548
Due after ten years		10,904		9,526		9,882		9,784
Total Securities held-to-maturity	$	14,292	$	12,728	$	11,423	$	11,332

At December 31, 2022, held-to-maturity securities in the amount of $12.4 million were pledged to the Federal Reserve Bank of San Francisco as collateral for a credit line held by the Bank. There were no sales or transfers of investment securities and no realized gains or losses on these securities during the years ended December 31, 2022 or 2021.

FHLB stock

The Bank is a member of the FHLB system. Members are required to own FHLB stock of at least the greater of 1% of FHLB membership asset value or 4.0% of outstanding FHLB advances. At December 31, 2022 and 2021, the Bank owned $0.4 million and $0.4 million, respectively, of FHLB stock, which is carried at cost. The Company evaluated the carrying value of its FHLB stock investment at December 31, 2022 and determined that it was not impaired. This evaluation considered the long-term nature of the investment, the current financial and liquidity position of the FHLB, repurchase activity of excess stock by the FHLB at its carrying value, the return on the investment from recurring and special dividends, and the Company’s intent and ability to hold this investment for a period of time sufficient to recover our recorded investment.

Retirement Plan	12 Months Ended
Retirement Plan	Dec. 31, 2022
Retirement Plan [Abstract]
Retirement Plan	Note 14 – Retirement Plan The Company has established an employee directed 401(k) plan (Plan). The Plan requires the Company to annually contribute a “Safe Harbor” profit sharing contribution for all eligible participants. In addition, the Plan allows the Company, at its discretion, to make a matching contribution or additional profit sharing contribution based on each eligible employee’s compensation for the Plan year. The participants must be at least 21 years of age and have at least one year of service in order to be eligible for matching and profit-sharing contributions. The Company made profit-sharing contributions to the Plan of $0.5 million and $0.4 million for the years ended December 31, 2022 and 2021, respectively.

The entire disclosure for retirement benefits.

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Restricted Stock Awards Activities

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2022	Dec. 31, 2021
LIABILITIES AND SHAREHOLDERS' EQUITY
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	4,000,000	4,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	40,000,000	40,000,000
Common stock, shares issued (in shares)	12,831,345	12,772,010
Common stock, shares outstanding (in shares)	12,831,345	12,772,010

Summary of Significant Accounting Policies, Recent Accounting Pronouncements (Details) - Forecast [Member]	12 Months Ended
	Dec. 31, 2023
Minimum [Member]
Recent Accounting Pronouncements [Abstract]
Increase in Allowance for Credit Loss and Reserve for Unfunded Loan Commitments	2.00%
Maximum [Member]
Recent Accounting Pronouncements [Abstract]
Increase in Allowance for Credit Loss and Reserve for Unfunded Loan Commitments	5.00%

Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2022

Stock-Based Compensation [Abstract]

Stock Option Activity

The following summarizes stock option activity for the years ended December 31, 2022 and 2021:

	Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value
Outstanding at December 31, 2020		638,664		$	3.54		8.6	$	653,991
Options granted		906,600			6.27		3.3
Options exercised		(86,676	)		3.6				511,339
Options forfeited		(596,100	)		6.42				1,460,581
Outstanding at December 31, 2021		862,488		$	4.41		8.2	$	8,088,660
Options granted		89,415			13.04		9.9
Options exercised		(56,280	)		4.62				393,534
Options forfeited		(13,998	)		4.40				124,874
Outstanding at December 31, 2022		881,625		$	5.27		7.5	$	3,871,667
Options vested and exercisable at December 31, 2022		600,396		$	4.47		7.3	$	2,878,478

Nonvested restricted stock for the years ended December 31, 2022 and 2021 is summarized in the following table.

	Number of Shares			Weighted Average Grant Price
Unvested as of December 31, 2020		621,666		$	3.64
Vested		(621,666	)		3.64
Unvested as of December 31, 2021		—		$	—
Granted		123,055		$	12.28
Unvested as of December 31, 2022		123,055		$	12.28

Pre-Tax and After-Tax Stock-Based Compensation Expense

The following tables present pre-tax and after-tax stock-based compensation expense recognized:

	For the Years Ended December 31,
($ in thousands)	2022		2021
Pre-tax
Stock options	$	320	$	934
Restricted shares		458		1,166
Total	$	778	$	2,100
After-tax
Stock options	$	322	$	778
Restricted shares		344		1,166
Total	$	666	$	1,944

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2022

Summary of Significant Accounting Policies [Abstract]

Weighted Average Assumptions used in Black-Scholes Option Pricing Model

The table below summarizes the weighted average assumptions used in determining the Black-Scholes option pricing model for options granted during 2022 and 2021:


	2022			2021
Risk-free interest rate		3.10	%		0.4% - 1.3	%
Expected term in years		5.5 - 6.5			5.0 - 7.5
Expected volatility		45.8% - 46.7	%		45.7% - 47.6	%
Expected dividend yield		-			-

Commitments and Contingent Liabilities, Financial Instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Financial Instruments with Off-Balance Sheet Risk [Abstract]
Financial instruments with off-balance-sheet risk	$ 19,822	$ 17,038
Commercial Real Estate [Member]
Financial Instruments with Off-Balance Sheet Risk [Abstract]
Financial instruments with off-balance-sheet risk	17,886	15,402
Revolving, Open-End Lines of Credit [Member]
Financial Instruments with Off-Balance Sheet Risk [Abstract]
Financial instruments with off-balance-sheet risk	1,683	1,259
Other Unused Commitments [Member]
Financial Instruments with Off-Balance Sheet Risk [Abstract]
Financial instruments with off-balance-sheet risk	$ 253	$ 377

Loans and Allowance for Loan Losses, TDR's (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($) Contract Loan	Dec. 31, 2021 USD ($) Contract Loan
Modified Troubled Debt Restructuring [Abstract]
Number of new loans modification \| Loan	0	0
Commitments to lend additional funds to debtors	$ 0	$ 0
Number of principal charge-offs related to TDRs \| Loan	1
TDR loans	$ 10
Charge-offs related to TDRs		$ 0
Number of restructured loans \| Loan	1	1
SBA [Member]
Loans Modified and Recorded as TDR [Abstract]
Number of contracts \| Contract	1	2
Pre-modification outstanding recorded investment	$ 94	$ 106
Post-modification outstanding recorded investment	$ 94	$ 106
Non-Accrual of Troubled Debt Restructuring [Abstract]
Number of contracts \| Contract		1
Pre-modification outstanding recorded investment		$ 25
Post-modification outstanding recorded investment		$ 25

Loans and Allowance for Loan Losses, Outstanding Loan Balances Categorized by Credit Quality Indicators (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Loans and Leases Receivable, Net of Deferred Income [Abstract]
Total loans	$ 260,190	$ 265,788
Pass Grade 1-4 [Member]
Loans and Leases Receivable, Net of Deferred Income [Abstract]
Total loans	211,319	177,485
Special Mention Grade 5 [Member]
Loans and Leases Receivable, Net of Deferred Income [Abstract]
Total loans	573	1,481
Classified/Doubtful/Loss Grade 6-8 [Member]
Loans and Leases Receivable, Net of Deferred Income [Abstract]
Total loans	450	972
Commercial, Non-Real Estate [Member]
Loans and Leases Receivable, Net of Deferred Income [Abstract]
Total loans	11,484	3,428
Commercial, Non-Real Estate [Member] \| Pass Grade 1-4 [Member]
Loans and Leases Receivable, Net of Deferred Income [Abstract]
Total loans	11,484	3,382
Commercial, Non-Real Estate [Member] \| Special Mention Grade 5 [Member]
Loans and Leases Receivable, Net of Deferred Income [Abstract]
Total loans	0	46
Commercial, Non-Real Estate [Member] \| Classified/Doubtful/Loss Grade 6-8 [Member]
Loans and Leases Receivable, Net of Deferred Income [Abstract]
Total loans	0	0
Residential Real Estate [Member]
Loans and Leases Receivable, Net of Deferred Income [Abstract]
Total loans	37,815	27,108
Residential Real Estate [Member] \| Pass Grade 1-4 [Member]
Loans and Leases Receivable, Net of Deferred Income [Abstract]
Total loans	37,815	27,108
Residential Real Estate [Member] \| Special Mention Grade 5 [Member]
Loans and Leases Receivable, Net of Deferred Income [Abstract]
Total loans	0	0
Residential Real Estate [Member] \| Classified/Doubtful/Loss Grade 6-8 [Member]
Loans and Leases Receivable, Net of Deferred Income [Abstract]
Total loans	0	0
Commercial Real Estate [Member]
Loans and Leases Receivable, Net of Deferred Income [Abstract]
Total loans	12,063	2,436
Commercial Real Estate [Member] \| Pass Grade 1-4 [Member]
Loans and Leases Receivable, Net of Deferred Income [Abstract]
Total loans	12,063	2,436
Commercial Real Estate [Member] \| Special Mention Grade 5 [Member]
Loans and Leases Receivable, Net of Deferred Income [Abstract]
Total loans	0	0
Commercial Real Estate [Member] \| Classified/Doubtful/Loss Grade 6-8 [Member]
Loans and Leases Receivable, Net of Deferred Income [Abstract]
Total loans	0	0
Consumer [Member]
Loans and Leases Receivable, Net of Deferred Income [Abstract]
Total loans	5,808	4,574
Consumer [Member] \| Pass Grade 1-4 [Member]
Loans and Leases Receivable, Net of Deferred Income [Abstract]
Total loans	5,808	4,574
Consumer [Member] \| Special Mention Grade 5 [Member]
Loans and Leases Receivable, Net of Deferred Income [Abstract]
Total loans	0	0
Consumer [Member] \| Classified/Doubtful/Loss Grade 6-8 [Member]
Loans and Leases Receivable, Net of Deferred Income [Abstract]
Total loans	0	0
Strategic Program Loans [Member]
Loans and Leases Receivable, Net of Deferred Income [Abstract]
Total loans	47,848	85,850
SBA [Member]
Loans and Leases Receivable, Net of Deferred Income [Abstract]
Total loans	145,172	142,392
SBA [Member] \| Pass Grade 1-4 [Member]
Loans and Leases Receivable, Net of Deferred Income [Abstract]
Total loans	144,149	139,985
SBA [Member] \| Special Mention Grade 5 [Member]
Loans and Leases Receivable, Net of Deferred Income [Abstract]
Total loans	573	1,435
SBA [Member] \| Classified/Doubtful/Loss Grade 6-8 [Member]
Loans and Leases Receivable, Net of Deferred Income [Abstract]
Total loans	$ 450	$ 972

Condensed Financial Statements of Parent, Statement of Income (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Non-interest income [Abstract]
Change in fair value on investment in BFG	$ (478)	$ 2,991
Total non-interest income	37,411	31,844
Non-interest expense [Abstract]
Salaries and employee benefits	24,489	21,744
Professional services	5,454	1,670
Other operating expenses	4,881	4,415
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
Parent Company [Member]
Non-interest income [Abstract]
Change in fair value on investment in BFG	(478)	2,991
Equity in undistributed earnings of subsidiary	29,090	30,469
Total non-interest income	28,612	33,460
Non-interest expense [Abstract]
Salaries and employee benefits	2,316	742
Professional services	1,990	320
Other operating expenses	470	360
Total non-interest expense	4,776	1,422
Income before income tax expense	23,836	32,038
Provision for income taxes	(1,279)	455
Net income	$ 25,115	$ 31,583

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Cash flows from operating activities:
Net income	$ 25,115	$ 31,583
Adjustments to reconcile net income to net cash from operating activities
Depreciation and amortization	2,107	1,038
Provision for loan losses	13,519	8,039
Noncash operating lease cost	2,339	0
Net amortization in securities discounts and premiums	28	25
Capitalized servicing assets	(4,087)	(3,048)
Capitalized loan trailing fee asset	(2,347)	0
Gain on sale of SBA loans, net	(13,550)	(9,689)
Originations of Strategic Program loans held-for-sale	(6,974,133)	(6,335,194)
Proceeds on Strategic Program loans held-for-sale	7,011,292	6,295,394
Change in fair value of BFG	478	(2,991)
Impairment of SBA servicing asset	1,728	800
Stock-based compensation expense	778	2,100
Deferred income tax benefit (expense)	656	(1,371)
Net changes in:
Accrued interest receivable	(270)	81
Accrued interest payable	6	(147)
Other assets	(299)	(1,669)
Operating lease liabilities	(360)	0
Other liabilities	(1,847)	5,817
Net cash provided by (used in) operating activities	61,153	(9,232)
Cash flows from investing activities:
Net increase (decrease) in loans receivable	(17,330)	41,622
Purchase of loan pools	(8,754)	(6,000)
Investments in FinWise Investments, LLC	(191)	(80)
Distributions from BFG	622	861
Purchase of bank premises and equipment	(7,213)	(2,334)
Proceeds from maturities and paydowns of securities held-to-maturity	1,954	678
Purchases of securities held to maturity	(4,851)	(10,317)
Purchase of FHLB stock	(71)	(173)
Net cash provided by (used in) investing activities	(35,834)	24,257
Cash flows from financing activities:
Net increase (decrease) in deposits	(8,894)	87,416
Proceeds from initial public offering, net	0	35,576
Common stock repurchased	(1,136)	0
Proceeds from exercise of stock options	260	311
Proceeds from PPP Liquidity Facility	0	5,558
Repayment of PPP Liquidity Facility	(736)	(105,515)
Net cash provided by (used in) financing activities	(10,506)	23,346
Net change in cash and cash equivalents	14,813	38,371
Cash and cash equivalents, beginning of the period	85,754	47,383
Cash and cash equivalents, end of the period	100,567	85,754
Cash paid during the period
Income taxes	9,360	10,473
Interest	1,428	1,412
Supplemental disclosures of noncash activities:
Operating cash flows from operating leases	1,928	0
Right-of-use assets obtained in exchange for operating lease liabilities	$ 7,380	$ 0

Loans and Allowance for Loan Losses, Strategic Program Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Strategic Program Loans retained and Held-for-sale [Abstract]
Retained loans	$ 236,601	$ 205,040
Loans held-for-sale	23,589	60,748
Total loans	260,190	265,788
Strategic Program Loans [Member]
Strategic Program Loans [Abstract]
Cash held in reserve by strategic programs	16,600	39,600
Strategic Program Loans retained and Held-for-sale [Abstract]
Retained loans	24,259	25,102
Loans held-for-sale	23,589	60,748
Total loans	$ 47,848	$ 85,850

Amortized cost, before allowance for credit loss, of financing receivable. Excludes financing receivable covered under loss sharing agreement and net investment in lease.

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Summary of Significant Accounting Policies, Investments (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021
Investments [Abstract]
Available for sale securities	$ 0	$ 0

Shareholders' Equity	12 Months Ended
Shareholders' Equity	Dec. 31, 2022
Shareholders' Equity [Abstract]
Shareholders' Equity	Note 13 – Shareholders’ Equity Stock Repurchases On August 18, 2022, the Company announced that its Board of Directors (the “Board”) has authorized, effective August 16, 2022, a common stock repurchase program to purchase up to 644,241 shares of the Company’s common stock in the aggregate. The repurchase program expires on August 31, 2024, but may be limited or terminated at any time without prior notice. The repurchase program authorizes the repurchase by the Company of its common stock in open market transactions, including pursuant to a trading plan in accordance with Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or privately negotiated transactions. The authorization permits management to repurchase shares of the Company’s common stock from time to time at management’s discretion. Repurchases may also be made pursuant to a trading plan under Rule 10b5-1 under the Exchange Act, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so because of self-imposed trading blackout periods or other regulatory restrictions. The actual means and timing of any shares purchased under the program will depend on a variety of factors, including the market price of the Company’s common stock, general market and economic conditions, and applicable legal and regulatory requirements. The repurchase program does not obligate the Company to purchase any particular number of shares. The Company has repurchased 120,000 shares for approximately $1.1 million as of December 31, 2022 and retired them at cost.

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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Components Income Tax Expense

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Taxes [Abstract]

The components of income tax expense consist of the following:

	For the Years Ended December 31,
($ in thousands)	2022		2021
Current tax expense
Federal	$	8,315	$	9,589
State		1,945		2,471
Deferred tax expense (benefit)
Federal		553		(1,156	)
State		103		(215	)
Income tax expense	$	10,916	$	10,689

Components of Deferred Income Tax Assets and Liabilities

The components of net deferred income tax assets and liabilities on the balance sheet at December 31, 2022 and 2021, are as follows:

	December 31,
($ in thousands)	2022			2021
Deferred tax assets
Operating lease liabilities	$	1,749		$	—
Allowance for loan losses		1,639			1,630
Accrued bonuses		61			72
Nonqualified stock options		124			156
Restricted stock		114			—
Other		290			250
Total deferred tax assets		3,977			2,108

Deferred tax liabilities
ROU asset		(1,256	)		—
Intangibles		(3	)		(3	)
Net book value of fixed assets		(1,230	)		(217	)
Other		(321	)		(65	)
Total deferred tax liabilities		(2,810	)		(285	)
Net deferred tax asset	$	1,167		$	1,823

Reconciliation of Income Tax Expense

The income tax expense recorded differs from the expected income tax expense and the reconciliation of these differences is as follows at December 31, 2022 and 2021:

	For the Years Ended December 31,
($ in thousands)	2022		2021
Federal income tax expense at statutory rates	$	7,567	$	8,877
Effect of permanent differences		811		50
State income tax expense, net		1,560		1,662
Other		978		100
Income tax expense	$	10,916	$	10,689

Loans and Allowance for Loan Losses, Loans Summarized to Major Risk Category (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Loans to Major Risk Category [Abstract]
Total loans	$ 260,190	$ 265,788
Loans held-for-sale	(23,589)	(60,748)
Total loans held for investment	236,601	205,040
Deferred loan costs (fees), net	(399)	2,917
Allowance for loan losses	(11,985)	(9,855)	$ (6,199)
Net loans	224,217	198,102
Commercial, Non-Real Estate [Member]
Loans to Major Risk Category [Abstract]
Total loans	11,484	3,428
Total loans held for investment	11,484	3,428
Allowance for loan losses	(401)	(132)	(232)
Residential Real Estate [Member]
Loans to Major Risk Category [Abstract]
Total loans	37,815	27,108
Total loans held for investment	37,815	27,108
Allowance for loan losses	(497)	(352)	(855)
Strategic Program Loans [Member]
Loans to Major Risk Category [Abstract]
Total loans	47,848	85,850
Loans held-for-sale	(23,589)	(60,748)
Total loans held for investment	24,259	25,102
Allowance for loan losses	(6,701)	(6,549)	(4,111)
Commercial Real Estate [Member]
Loans to Major Risk Category [Abstract]
Total loans	12,063	2,436
Total loans held for investment	12,063	2,436
Allowance for loan losses	(27)	(21)	(19)
Consumer [Member]
Loans to Major Risk Category [Abstract]
Total loans	5,808	4,574
Total loans held for investment	5,808	4,574
Allowance for loan losses	(65)	(62)	(62)
SBA [Member]
Loans to Major Risk Category [Abstract]
Total loans	145,172	142,392
Total loans held for investment	145,172	142,392
Allowance for loan losses	$ (4,294)	$ (2,739)	$ (920)

Earnings per Share (Details) - USD ($)
$ / shares in Units, $ in Thousands

12 Months Ended

Dec. 31, 2022

Dec. 31, 2021

Numerator [Abstract]

Net income

$ 25,115

$ 31,583

Amount allocated to participating common shareholders

^[1]

(193)

(1,780)

Net income allocate to common shareholders

$ 24,922

$ 29,803

Denominator [Abstract]

Weighted average shares outstanding, basic (in shares)

12,729,898

8,669,724

Weighted average effect of dilutive securities [Abstract]

Stock options (in shares)

508,056

371,240

Warrants (in shares)

119,068

67,199

Weighted average shares outstanding, diluted (in shares)

13,357,022

9,108,163

Earnings per share, basic (in dollars per share)

$ 1.96

$ 3.44

Earnings per share, diluted (in dollars per share)

$ 1.87

$ 3.27

Anti-dilutive securities excluded from earnings per share (in shares)

[1]	Represents earnings attributable to holders of unvested restricted stock issued outside of the Plan to the Company’s employees.

Income Taxes, Reconciliation of Income Tax Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Income Tax Expense [Abstract]
Federal income tax expense at statutory rates	$ 7,567	$ 8,877
Effect of permanent differences	811	50
State income tax expense, net	1,560	1,662
Other	978	100
Income tax expense	10,916	10,689
Interest or penalties	0	0
Unrecognized tax benefits	$ 0	$ 0

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2022

Summary of Significant Accounting Policies

Note 1 – Summary of Significant Accounting Policies

Nature of business and organization – FinWise Bancorp is a Utah Corporation headquartered in Murray, Utah and operates all business activities through its wholly-owned subsidiaries FinWise Investments, LLC, and FinWise Bank, dba Utah Community Bank. Utah Community Bank was incorporated in the state of Utah on May 7, 1999. All West Bancorp was incorporated in the state of Utah on October 22, 2002, after which, it acquired 100% of Utah Community Bank. As of March 4, 2016, Utah Community Bank’s articles of incorporation were amended to rename the entity FinWise Bank. As of March 15, 2021, All West Bancorp’s articles of incorporation were amended and restated to rename the entity FinWise Bancorp. References herein to “FinWise Bancorp,” “Bancorp” or the “holding company,” refer to FinWise Bancorp on a standalone basis. The word “Company” refers to FinWise Bancorp, FinWise Investments, LLC, and FinWise Bank collectively and on a consolidated basis. References to the “Bank” refer to FinWise Bank on a standalone basis.

On July 15, 2021, the Company publicly filed a Registration Statement on Form S-1 with the U.S. Securities and Exchange Commission (“SEC”) in connection with its Initial Public Offering (“IPO”) (the “Registration Statement”), which was subsequently amended on July 30, 2021, August 4, 2021, November 1, 2021, and November 16, 2021. The Registration Statement was declared effective by the SEC on November 18, 2021. In connection with the IPO, the Company issued 4,025,000 shares of common stock, par value of $0.001, which included 525,000 shares sold pursuant to the underwriters’ exercise of their option to purchase additional shares. The securities were sold to the public at a price of $10.50 per share and began trading on the Nasdaq Stock Market LLC on November 19, 2021. On November 23, 2021, the closing date of the IPO, the Company received total net proceeds of $39.3 million. The net proceeds less other related expenses, including audit fees, legal fees, listing fees, and other expenses, totaled $35.6 million.

The Bank is an independent bank that provides a full range of banking services to individual and corporate customers. The Bank’s primary source of revenue is from loans including Small Business Administration (SBA), commercial, commercial real estate, residential real estate, and consumer. The Bank also has established Strategic Programs with various third-party loan origination platforms that use technology to streamline the origination of unsecured consumer and secured or unsecured business loans to borrowers within certain approved credit profiles. The Bank earns monthly program fees based on the volume of loans originated in these Strategic Programs, as well as interest during the time the Bank holds the loans.

The Company is subject to competition from other financial institutions and to the regulations of certain federal and state agencies and undergoes periodic examinations by those agencies.

Stock split and changes in authorized shares – On July 26, 2021, the Board of Directors declared a six-for-one stock split of the Company’s issued and outstanding shares of common stock, which was effective on July 26, 2021. Accordingly, except for the amount of authorized shares, all references to share and per share amounts for the periods presented in the condensed consolidated financial statements and accompanying notes to the condensed consolidated financial statements have been retroactively restated to reflect this stock split. As a subsequent event, effective as of July 28, 2021, authorized capital stock was increased to 44,000,000 shares of capital stock, consisting of (i) 40,000,000 shares of common stock, par value $0.001 per share, and (ii) 4,000,000 shares of Preferred Stock, par value $0.001 per share.

Significant concentrations of credit risk – All of the Company’s activities are with customers located throughout the United States. The Company has concentrations in SBA loans, Strategic Program loans, and residential real estate loans. Accordingly, their ultimate collectability is particularly susceptible to changes in market conditions.

Ongoing analysis of the Company’s loan portfolio is performed to evaluate whether there is any significant exposure to an individual borrower or group(s) of borrowers as a result of any concentrations of credit risk. Such credit risks (whether on- or off-balance sheet) may occur when groups of borrowers or counterparties have similar economic characteristics and are similarly affected by changes in economic or other conditions. Credit risk also includes the loss that would be recognized subsequent to the reporting date if counterparties failed to perform as contracted. As of December 31, 2022 and 2021, the Company analyzed its exposure to credit risks and concluded that no significant exposure exists from such concentrations of credit risks.

Paycheck Protection Program – The Coronavirus Aid, Relief and Economic Security (“CARES”) Act was passed by Congress on March 27, 2020, in relation to the COVID-19 pandemic and included guidance on loan modifications. Also included in the CARES Act was a total allocation of $659 billion for loans to be issued by financial institutions through the Small Business Administration (“SBA”). This program is known as the Paycheck Protection Program (“PPP”). PPP loans are forgivable, in whole or in part, if the proceeds are used for eligible payroll costs and other permitted purposes in accordance with the requirements of the PPP. These loans carry a fixed rate of 1.00%. PPP loans originated prior to June 5, 2020, have a term of two years, while PPP loans originated on or after June 5, 2020, have a term of five years. Payments are deferred for at least the first six months of the loan and the loans are 100% guaranteed by the SBA. The SBA pays the originating bank a processing fee ranging from 1% to 5%, based on the size of the loan. During the year ended December 31, 2020, the Company originated PPP loans for a total principal amount of $126.6 million. As of December 31, 2022, PPP borrowers have applied for and received forgiveness from the SBA for $125.5 million of PPP loan principal and have made $0.5 million of principal payments leaving $0.6 million of PPP loan principal outstanding. The loan forgiveness resulted in an acceleration of deferred loan fees of $1.5 million for the year ended December 31, 2021. The loan payments resulted in a de minimis amount of deferred loan fees recognized in the year ended December 31, 2022.

Principles of consolidation – The consolidated financial statements include the accounts of FinWise Bancorp and its wholly-owned subsidiaries, FinWise Investments, LLC and FinWise Bank. All significant inter-company balances and transactions have been eliminated in consolidation.

Out-of-period adjustments – During the first quarter of 2022, the Company recognized a $(0.8) million ($(0.6) million net of tax) reduction of interest and fees on loans and loans receivable, net, as an out-of-period adjustment. The adjustment was due to a deferred loan cost associated with the Company’s SBA 7(a) loans that was implemented in 2021. Upon the sales of the guaranteed portions of the SBA 7(a) loans, the acceleration of the deferred loan costs was improperly applied to interest income rather than reducing the balance sheet deferred costs asset and was compounded further by the continued amortization of the deferred cost asset over the life of the loans. The impact associated with this correction was not considered material to the interim unaudited consolidated financial statements for the three months ended March 31, 2022, year ended December 31, 2022, or the financial statements of any previously filed interim or annual periods.

During the third quarter of 2022, the Company identified an error in the calculation of the Company’s tax provision which understated income tax expense for previously reported financial statements. The error was related to an incorrect application of Section 162(m) of the Internal Revenue Code, which limits tax deductions relating to executive compensation of certain executives of publicly held companies. The Company recorded an out-of-period adjustment during the third quarter of 2022 to correct the previously understated income tax expense. The adjustment resulted in a decrease to after-tax income of $(0.9) million for the year ended December 31, 2022. The impact associated with this correction was not considered material to the interim unaudited consolidated financial statements for the three months ended September 30, 2022, year ended December 31, 2022, or the financial statements of any previously filed interim or annual periods.

During the fourth quarter of 2022, the Company established a new loan trailing fee asset which is included in “Other assets” on the Consolidated Balance Sheets of approximately $2.3 million and recognized $2.1 million in gain on sale of loans ($1.5 million net of tax) as an out-of-period adjustment of which $1.2 million ($0.9 million net of tax) would have been recorded in the first three quarters of 2022 with the remaining $0.9 million ($0.6 million net of tax) associated with years prior to 2022. Before this correction, the loan trailing fees had been recognized in revenue during the month payment was owed by the Strategic Program rather than as a gain to be recognized upon sale of the loan receivables. The impact associated with this correction was not considered material to the interim unaudited consolidated financial statements for the three months ended December 31, 2022, year ended December 31, 2022, or the financial statements of any previously filed interim or annual periods.

Use of estimates – In preparing the consolidated financial statements in accordance with Generally Accepted Accounting Principles (GAAP), management is required to make estimates and assumptions that affect the reported amounts of certain assets and liabilities as of the date of the consolidated balance sheets and certain revenues and expenses for the period. Actual results could differ, either positively or negatively, from those estimates.

Material estimates that are particularly susceptible to significant changes in the near term relate to the determination of the allowance for loan losses (ALL), the determination of the fair value of certain financial instruments, deferred income tax assets and stock-based compensation.

Management believes the ALL is adequate. While management uses currently available information to recognize losses on loans, future additions to the allowance may be necessary based on economic conditions and individual credit deterioration.

Reclassifications – Certain amounts in the prior year’s financial statements have been reclassified to conform to the current year’s presentation.

Cash and cash equivalents – The Company considers all highly liquid debt instruments with an original maturity of three months or less (including cash, amounts due from depository institutions, interest-bearing deposits in other banks, and federal funds sold) to be cash equivalents.

The Company maintains its cash in deposit accounts that, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.

Federal Reserve Board Regulations require maintenance of certain minimum reserve balances based on certain average deposits; however, on March 15, 2020, the Federal Reserve announced that reserve requirement ratios would be reduced to zero percent effective March 26, 2020, due to economic conditions, which eliminated the reserve requirement for all depository institutions. The reserve requirement is still at zero percent as of December 31, 2022.

Investments

Investment securities – Debt securities that management has the positive intent and ability to hold to maturity are classified as “held-to-maturity” and recorded at amortized cost. Securities not classified as held-to-maturity are classified as “available for sale” and recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income. The Company did not hold any available for sale securities at December 31, 2022 or 2021.

When the estimated fair value of a security is lower than the book value, a security is considered temporarily impaired. On a quarterly basis, the Company evaluates any securities in a loss position to determine whether the impairment is other-than-temporary. If there is intent to sell the security, or if the Company will be required to sell the security, or if the Company believes it will not recover the entire cost basis of the security, the security is other-than-temporarily impaired (“OTTI”) and impairment is recognized. The amount of impairment resulting from credit loss is recognized in earnings and impairment related to all other factors, such as general market conditions, is recognized in AOCI in the case of securities classified as available for sale.

Management considers a number of factors in its analysis of whether a decline in a security’s estimated fair value is OTTI. Certain factors considered include, but are not limited to: (a) the length of time and the extent to which the security has been in an unrealized loss position, (b) changes in the financial condition of the issuer, (c) the payment structure of debt securities, (d) adverse changes in ratings issued by rating agencies, (e) and the intent and ability of the Company to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value.

Purchased premiums and discounts on debt securities are amortized or accreted over the terms of the securities using the effective-yield method. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.

Equity method investments – Ownership interests in entities for which the Company has significant influence that are not consolidated are accounted for as equity method investments. SEC Staff Announcement: Accounting for Limited Partnership Investments (codified in Accounting Standards Codification (“ASC”) 323-30-S99-1) guidance requires the use of the equity method unless the investor’s interest “is so minor that the limited partner may have virtually no influence over partnership operating and financial policies.” The SEC staff’s position is that investments in limited partnerships and limited liability companies of greater than 3% to 5% are considered more than minor and, therefore, should be accounted for using the equity method or fair value option and are not required to be consolidated. The Company concluded that, consistent with its accounting policy, the Company’s level of ownership in Business Funding Group, LLC (“BFG”) was indicative of significant influence and, as a result, the investment would be accounted for using the equity method. However, the Company elected the fair value option for its investment due to cost-benefit considerations. Pursuant to electing the fair value option, the Company measures its investment in BFG at fair value each reporting period and changes in fair value are recorded in the Consolidated Statements of Income within ‘Change in fair value on investment in BFG.’ See Note 9, Investments, for a discussion about the Company’s investment in BFG.

Investment in Federal Home Loan Bank (“FHLB”) stock – FHLB stock are required investments based on the level of the Bank’s assets, capital and/or capital/surplus. FHLB stock is carried at cost and periodically evaluated for impairment. There is no readily determinable fair value for this stock as it has no quoted market value, it is a required investment and it is expected to be redeemed at par value. FHLB obtains its funding primarily through issuance of consolidated obligations of the FHLB system. The U.S. government does not guarantee these obligations, and each of the regional FHLBs are jointly and severally liable for repayment of each other’s debt. Cash dividends are reported as a component of Other miscellaneous income in the Consolidated Statements of Income.

Loans held-for-sale – While the Company sells the vast majority of the loans funded in its Strategic Programs shortly after origination, the Company may choose to retain a portion of the funded loans and/or receivables. The loans and/or receivables the Company intends to sell are carried at lower of cost or estimated fair value in the aggregate. Net unrealized losses are recognized in a valuation allowance by charges to income.

Loans receivable – Loans receivable are reported at their outstanding principal adjusted for any charge-offs, the ALL, and deferred fees and costs. Loan origination fees, net of certain direct origination costs, if any, are deferred and recognized on an adjustment of the related loan yield using an effective-yield method over the contractual life of the loan. Interest income on loans is recognized on an accrual basis commencing in the month of origination using the interest method. Delinquency fees are recognized in income when chargeable and when collectability is reasonably assured

The Company requires most loans to be substantially collateralized by real estate, equipment, vehicles, accounts receivable, inventories or other tangible or intangible assets. Real estate collateral is in the form of first and second mortgages on various types of property. The Company also originates unsecured loans to consumers and businesses.

The Company may change intent from holding loans for investment and reclassify them as held-for-sale. Loans held-for-sale are carried at the lower of aggregate cost and fair value. Gains and losses are recorded in non-interest income based on the difference between sales proceeds and carrying value.

Allowance for loan losses – The ALL consists of specific and general components. The specific component relates to impaired loans as defined by GAAP. For such loans that are classified as impaired, an allowance is established when the discounted cash flows, or the fair value of the collateral if the loan is collateral dependent, of the impaired loan is lower than the carrying value of that loan. The general component covers all loans not classified as impaired and is based on historical loss experience and general economic factors, adjusted for qualitative risk factors, both internal and external to the Company. The general component is calculated separately for each risk category.

The ALL represents the Company’s estimate of probable and estimable losses inherent to the loan portfolio as of the balance sheet date. Losses are charged to the ALL when recognized. Generally, loans are charged off or charged down at the point at which they are determined to be uncollectible in whole or in part unless the loan is well secured and in the process of collection. The Company establishes the amount of the ALL by loan type, at least quarterly, and the Company adjusts the provision for loan losses so the ALL is at an appropriate level at the balance sheet date.

The Company determines ALL as the best estimate within a range of estimated losses. The methodologies the Company uses to estimate the ALL depend upon the impairment status and risk category of the loan. After applying historic loss experience, as described above, the Company reviews the quantitatively derived level of ALL for each category using qualitative criteria. The Company tracks various risk factors that influence the judgment regarding the level of the ALL across the risk categories. Risk factors include changes in national, regional, and local economic conditions that affect the borrowers’ business, delinquency, and charge off trends, and data from peer groups, among others. The Company reviews changes in these factors to ensure that changes in the level of the ALL are directionally consistent with changes in these factors.

Nonaccrual loans – The Company’s policy is to place loans on a nonaccrual status when: 1) payment is in default for 90 days or more unless the loan is well secured and in the process of collection; or 2) full repayment of principal and interest is not foreseen. When a loan is placed on nonaccrual status, all accrued and uncollected interest on that loan is reversed. Past-due interest received on nonaccrual loans is not recognized in interest income but is applied as a reduction of the outstanding principal of the loan consistent with the accounting for impaired loans. A loan is relieved of its nonaccrual status when all principal and interest payments are brought current, the loan is well secured, and an analysis of the borrower’s financial condition provides reasonable assurance that the borrower can repay the loan as scheduled.

Impaired loans – Loans are considered impaired when, based on current information and events; it is probable that the Company will be unable to collect all amounts due in accordance with the contractual terms of the loan agreement, including scheduled interest payments. When a loan is impaired, the Company estimates a specific reserve for the loan based on the fair value of the loan’s underlying collateral, less the cost to sell, or the projected present value of future cash flows. Payments received on impaired loans that are accruing are recognized in interest income, according to the contractual loan agreement. Payments received on impaired loans that are on nonaccrual status are not recognized in interest income but are applied as a reduction of the outstanding principal. Payments are recognized when cash is received.

Troubled debt restructurings (TDR) – Loans may be modified in the normal course of business for competitive reasons or to strengthen the Company’s position. Loan modifications and restructurings may also occur when the borrower experiences financial difficulty and needs temporary or permanent relief from the original contractual terms of the loan. These modifications are structured on a loan-by-loan basis and, depending on the circumstances, may include extended payment terms, a modified interest rate, forgiveness of principal, or other concessions. Loans that have been modified to accommodate a borrower who is experiencing financial difficulties, and for which the Company has granted a concession that it would not otherwise consider, are considered a TDR.

The Company considers many factors in determining whether to agree to a loan modification involving concessions, and seeks a solution that will both minimize potential loss to the Company and attempt to help the borrower. The Company evaluates borrowers’ current and forecasted future cash flows, their ability and willingness to make current contractual or proposed modified payments, the value of the underlying collateral, the possibility of obtaining additional security or guarantees, and the potential costs related to a repossession or foreclosure and the subsequent sale of the collateral.

TDRs may be classified as either accrual or nonaccrual loans. A loan on nonaccrual status and restructured as a TDR will remain on nonaccrual status until the borrower has proven the ability to perform under the modified structure for a minimum of six months, and there is evidence that such payments can and are likely to continue as agreed.

Performance prior to the restructuring, or significant events that coincide with the restructuring, are included in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual status at the time of restructuring or after a shorter performance period. If the borrower’s ability to meet the revised payment schedule is uncertain, the loan remains classified as a nonaccrual loan.

Premises and equipment, net – Premises and equipment are stated at cost less accumulated depreciation. Depreciation included in the operating expense is computed using the straight-line method over the estimated useful lives of the related assets. Expenditures for new premises and equipment and major improvements are capitalized. Normal costs of maintenance and repairs are charged to expense as incurred. Gains and losses on dispositions are included in non-interest expense.

Leases – The Company accounts for leases according to ASU 2016-02, Leases (Topic 842), and applies a right -of-use (“ROU”) model that requires a lessee to record, for all leases with a lease term of more than 12 months, an asset representing its right to use the underlying asset and a liability to make lease payments. The Company elected to apply the package of practical expedients permitting entities to not reassess: 1) whether any expired or existing contracts are or contain leases; 2) the lease classification for any expired or existing leases; and 3) initial direct costs for any existing leases. Additionally, as provided by ASU 2016-02, the Company elected to not apply the recognition requirements of ASC 842 to short-term leases, defined as leases with a term of twelve months or less, and to recognize the lease payments in net income on short-term leases on a straight-line basis over the lease term.

Income taxes – Deferred income tax assets and deferred income tax liabilities represent the tax effect of temporary differences between financial reporting and tax reporting measured at enacted tax rates in effect for the year in which the differences are expected to reverse. The Company recognizes only the impact of tax positions that, based on their technical merits, are more likely than not to be sustained upon an audit by the taxing authority.

Developing the provision for income taxes, including the effective tax rate and analysis of potential tax exposure items, if any, requires significant judgment and expertise in federal and state income tax laws, regulations and strategies, including the determination of deferred income tax assets and liabilities and any estimated valuation allowances deemed necessary to value deferred income tax assets. Judgments and tax strategies are subject to audit by various taxing authorities. While the Company believes it has no significant uncertain income tax positions in the consolidated financial statements, adverse determinations by these taxing authorities could have a material adverse effect on the consolidated financial statements.

Transfer of financial assets – Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when: 1) the assets have been isolated from the Company, 2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and 3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

SBA servicing asset, net – Servicing assets are recognized as separate assets when servicing rights are acquired through sale of financial assets. For sales of SBA loans, or portions of SBA loans, with servicing retained, a portion of the cost of originating the loan is allocated to the servicing asset based on relative fair value. Fair value is based on a valuation model that calculates the present value of estimated future servicing income. Servicing assets are subsequently measured using the amortization method which requires servicing assets to be amortized into non-interest income in proportion to, and over the period of, estimated future net servicing income of the underlying loans. The SBA servicing asset is carried at the lower of cost or market value.

The SBA servicing asset is evaluated annually for impairment based on the fair value of the asset as compared to amortized cost. Capitalized servicing rights are stated separately on the consolidated balance sheet and are amortized into non-interest income in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets.

Servicing fee income, which is reported in the consolidated statements of income in SBA loan servicing fees, is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal and recorded as income when earned. The amortization of servicing assets and changes in the valuation allowance are netted against loan servicing income.

Revenue from contracts with customers – The Company applies the provisions of ASC 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of this standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Services that the Company reports as part of non-interest income are subject to ASC 606 and include fees from its deposit customers for transaction-based activities, account maintenance charges and overdraft services. Transaction-based fees, such as ACH and wire transfer fees, overdraft, return and stop payment charges, are recognized at the time such transactions are executed and the services have been fulfilled by the Company. The fees are typically withdrawn from the customer’s deposit account balance. The Company also receives fees from third-parties in its Strategic Programs for setting up systems and procedures to efficiently originate loans in a convenient, compliant and safe manner. Because the third-party simultaneously receives and benefits from the services, revenue is recognized evenly over the term of the loan program. Program Fees received in connection with the Company’s Strategic Programs are recorded at the time services are provided.

Stock-based compensation – The Company accounts for all stock-based awards to employees and non-employees, including grants of stock options and restricted stock awards, based on their respective grant date fair values. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model. Restricted stock awards are valued based on the fair value of the Company’s common stock on the date of grant. The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. The Company expenses stock-based compensation related to stock options and restricted stock over the requisite service period. The Company accounts for forfeitures of stock–based awards as they occur. Stock-based compensation expense pertaining to employees is included in salaries and employee benefits on the income statement. Stock-based compensation expense related to directors and consultants is included in other operating expenses on the income statement.

The table below summarizes the weighted average assumptions used in determining the Black-Scholes option pricing model for options granted during 2022 and 2021:


	2022			2021
Risk-free interest rate		3.10	%		0.4% - 1.3	%
Expected term in years		5.5 - 6.5			5.0 - 7.5
Expected volatility		45.8% - 46.7	%		45.7% - 47.6	%
Expected dividend yield		-			-

Earnings per share (“EPS”) – Basic EPS is computed by dividing net earnings allocated to common shareholders by the weighted average number of common shares outstanding. Diluted EPS is computed by dividing net earnings allocated to common shareholders by the weighted average number of common shares outstanding adjusted to include the effect of potentially dilutive common shares. Potentially dilutive common shares include incremental common shares issuable upon exercise of outstanding stock options and non-vested restricted common shares, that are not considered participating securities, using the treasury stock method.

The two-class method is used to determine earnings per share based on participation rights of participating securities in any undistributed earnings. Each unvested restricted share granted by the Company to its employees that includes rights to participate in distributed earnings is considered a participating security and the Company uses the two-class method to calculate net income available to the Company’s common shareholders per common share – basic and diluted.

Stock Repurchase Program – On August 18, 2022, the Company announced that its Board of Directors (the “Board”) has authorized, effective August 16, 2022, a common stock repurchase program to purchase up to 644,241 shares of the Company’s common stock in the aggregate. The repurchase program expires on August 31, 2024 but may be limited or terminated at any time without prior notice. The repurchase program authorizes the repurchase by the Company of its common stock in open market transactions, including pursuant to a trading plan in accordance with Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or privately negotiated transactions. The authorization permits management to repurchase shares of the Company’s common stock from time to time at management’s discretion. Repurchases may also be made pursuant to a trading plan under Rule 10b5-1 under the Exchange Act, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so because of self-imposed trading blackout periods or other regulatory restrictions. The actual means and timing of any shares purchased under the program will depend on a variety of factors, including the market price of the Company’s common stock, general market and economic conditions, and applicable legal and regulatory requirements. The repurchase program does not obligate the Company to purchase any particular number of shares. The Company has repurchased 120,000 shares for approximately $1.1 million as of December 31, 2022 and retired them at cost.

Off-balance sheet instruments – In the ordinary course of business, the Company has entered into off-balance sheet financial instrument arrangements consisting of commitments to extend credit. Such financial instruments are recorded in the consolidated financial statements when they are funded. They involve, to varying degrees, elements of credit risk in excess of amounts recognized in the consolidated balance sheet. Losses would be experienced when the Company is contractually obligated to make a payment under these instruments and must seek repayment from the borrower, which may not be as financially sound in the current period as they were when the commitment was originally made. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The Company enters into credit arrangements that generally provide for the termination of advances in the event of a covenant violation or other event of default.

Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the party. The commitments are collateralized by the same types of assets used as loan collateral.

Segment reporting – The Company operates as one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”), consisting of the Company’s chief executive officer, in deciding how to allocate resources and assess the Company’s financial and operational performance. In addition, the Company’s CODM evaluates the Company’s financial information and resources and assesses the performance of these resources on a consolidated basis. As a result, management has determined that the Company’s business operates in a single operating segment. Since the Company operates as one operating segment, all required financial segment information can be found in the consolidated financial statements.

Recent accounting pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326). The ASU sets forth a “current expected credit loss” (CECL) model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost, available-for-sale debt securities and applies to certain off-balance sheet credit exposures. This ASU was initially effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. However, the FASB issued an ASU to delay adoption to January 1, 2023 for smaller reporting companies with less than $250 million in public float as defined by the SEC’s rules. The Company adopted this ASU effective January 1, 2023 and will apply the amendment’s provisions as a cumulative-effect adjustment to retained earnings as of the date of adoption. In anticipation of the adoption of this ASC, the Company formed a team that worked on an implementation plan to adopt the amendment and included developing policies, procedures, and internal controls over the model. The Company continues to work with a software vendor to measure expected losses required by the amendment. Based on current model results, management estimates the adoption of this ASU will result in a combined increase to its Allowance for Credit Loss and Reserve for Unfunded Loan Commitments of 2% to 5%. The increase is primarily the result of an upward adjustment in the allowance allocated to the core portfolio as well as the retained partner portfolio and was offset by the lowering of qualitative factors. The increase will be recorded as an adjustment to equity as of the adoption date. Based on the credit quality of our held-to-maturity debt security portfolio, no allowance for credit losses is expected to be recorded at adoption on this portfolio.

In March 2022, the FASB issued ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. These amendments eliminate the TDR recognition and measurement guidance and, instead, require that an entity evaluate (consistent with the accounting for other loan modifications) whether the modification represents a new loan or a continuation of an existing loan. The amendments also enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. For public business entities, these amendments require that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investment in leases within the scope of Subtopic 326-20. This ASU is effective on January 1, 2023, the same effective date as ASU 2016-13. The effects that the adoption of this amendment will have on the Company’s consolidated financial statements is not deemed to be material.

Consolidated Statements of Income - USD ($) $ in Thousands	12 Months Ended
Consolidated Statements of Income - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
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	21,744
Professional services	5,454	1,670
Occupancy and equipment expenses	2,204	882
Impairment of SBA servicing asset	1,728	800
Other operating expenses	4,881	4,415
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 (in dollars per share)	$ 1.96	$ 3.44
Earnings per share, diluted (in dollars per share)	$ 1.87	$ 3.27
Weighted average shares outstanding, basic (in shares)	12,729,898	8,669,724
Weighted average shares outstanding, diluted (in shares)	13,357,022	9,108,163

Loans and Allowance for Loan Losses

12 Months Ended

Dec. 31, 2022

Loans and Allowance for Loan Losses [Abstract]

Loans and Allowance for Loan Losses

Note 3 – Loans and Allowance for Loan Losses

Loans are summarized as follows according to major risk category as of December 31, 2022 and 2021:

	December 31,
	2022			2021
($ in thousands)
SBA	$	145,172		$	142,392
Commercial, non-real estate		11,484			3,428
Residential real estate		37,815			27,108
Strategic Program loans		47,848			85,850
Commercial real estate		12,063			2,436
Consumer		5,808			4,574
Total loans	$	260,190		$	265,788
Loans held-for-sale		(23,589	)		(60,748	)
Total loans held for investment	$	236,601		$	205,040
Deferred loan costs (fees), net		(399	)		2,917
Allowance for loan losses		(11,985	)		(9,855	)
Net loans	$	224,217		$	198,102

Strategic Program Loans – In 2016, the Company began originating loans with various third-party loan origination platforms that use technology and other innovative systems to streamline the origination of unsecured consumer and secured or unsecured business loans to a wide array of borrowers within certain approved credit profiles. Loans issued by the Company through these programs generally follow and are limited to specific predetermined underwriting criteria. The Company generally earns monthly minimum program fees from these third parties. Based on the volume of loans originated by the Company related to each Strategic Program, an additional fee equal to a percentage of the loans generated under the Strategic Program may be collected. The program fee is included within non-interest income on the Consolidated Statements of Income.

The Company generally retains the loans and/or receivables for a number of business days after origination before selling the loans and/or receivables to the Strategic Program platform or another investor. Interest income is recognized by the Company while holding the loans. These loans are classified as held-for-sale on the balance sheet.

The Company may also hold a portion of the loans or receivable and sell the remainder directly to the Strategic Programs or other investors. The Company generally services the loans originated through the Strategic Programs in consideration of servicing fees equal to a percentage of the loans generated under the Strategic Programs. In turn, the Strategic Program service providers, subject to the Company’s approval and oversight, serve as sub-servicer and perform typical primary servicing duties including loan collections, modifications, charging-off, reporting and monitoring.

Each Strategic Program establishes a “reserve” deposit account with the Company. The agreements generally require that the reserve account deposit balance does not fall below an agreed upon dollar or percentage threshold related to the total loans currently outstanding as held for sale by the Company for the specific Strategic Program. If necessary, the Company has the right to withdraw amounts from the reserve account to fulfill loan purchaser obligations created under the program agreements. Total cash held in reserve by Strategic Programs at the Company at December 31, 2022 and 2021, was $16.6 million and $39.6 million, respectively.

Strategic Program loans retained and held-for-sale as of December 31, 2022 and 2021, are summarized as follows:

	December 31,
	2022		2021
($ in thousands)
Retained Strategic Program loans	$	24,259	$	25,102
Strategic Program loans held-for-sale		23,589		60,748
Total Strategic Program loans	$	47,848	$	85,850

Changes in the ALL are summarized as follows:

December 31, 2022
($ in thousands)	SBA			Commercial, Non-Real Estate		Residential Real Estate		Strategic Program Loans			Commercial Real Estate		Consumer			Total
Beginning balance	$	2,739		$	132	$	352	$	6,549		$	21	$	62		$	9,855
Charge-offs		(392	)		—		—		(11,948	)		—		(66	)		(12,406	)
Recoveries		66			2		—		885			—		64			1,017
Provision for loan and lease losses		1,881			267		145		11,215			6		5			13,519
Balance at end of year	$	4,294		$	401	$	497	$	6,701		$	27	$	65		$	11,985
Ending balance individually evaluated for impairment		—			—		—		—			—		—			—
Ending balance collectively evaluated for impairment	$	4,294		$	401	$	497	$	6,701		$	27	$	65		$	11,985
Loans receivable	$	145,172		$	11,484	$	37,815	$	24,259		$	12,063	$	5,808		$	236,601
Ending balance individually evaluated for impairment		450			—		—		—			—		—			450
Ending balance collectively evaluated for impairment	$	144,722		$	11,484	$	37,815	$	24,259		$	12,063	$	5,808		$	236,151

December 31, 2021
($ in thousands)	SBA			Commercial, Non-Real Estate			Residential Real Estate			Strategic Program Loans			Commercial Real Estate		Consumer			Total
Beginning balance	$	920		$	232		$	855		$	4,111		$	19	$	62		$	6,199
Charge-offs		(154	)		(63	)		—			(4,684	)		—		(4	)		(4,905	)
Recoveries		46			103			—			372			—		1			522
Provision (recapture) for loan and lease losses		1,927			(140	)		(503	)		6,750			2		3			8,039
Balance at end of year	$	2,739		$	132		$	352		$	6,549		$	21	$	62		$	9,855
Ending balance individually evaluated for impairment		—			—			—			—			—		—			—
Ending balance collectively evaluated for impairment	$	2,739		$	132		$	352		$	6,549		$	21	$	62		$	9,855
Loans receivable	$	142,392		$	3,428		$	27,108		$	25,102		$	2,436	$	4,574		$	205,040
Ending balance individually evaluated for impairment		972			—			—			—			—		—			972
Ending balance collectively evaluated for impairment	$	141,420		$	3,428		$	27,108		$	25,102		$	2,436	$	4,574		$	204,068

The following tables summarize impaired loans as of December 31, 2022 and 2021:

December 31, 2022
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
($ in thousands)
With no related allowance recorded
SBA	$	450	$	450	$	—	$	711	$	36
Commercial, non-real estate		—		—		—		—		—
Residential real estate		—		—		—		—		—
Strategic Program loans		—		—		—		—		—
Commercial real estate		—		—		—		—		—
Consumer		—		—		—		—		—
Total	$	450	$	450	$	—	$	711	$	36

December 31, 2021
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
($ in thousands)
With no related allowance recorded
SBA	$	972	$	972	$	—	$	945	$	47
Commercial, non-real estate		—		—		—		—		—
Residential real estate		—		—		—		189		—
Strategic Program loans		—		—		—		—		—
Commercial real estate		—		—		—		—		—
Consumer		—		—		—		—		—
Total	$	972	$	972	$	—	$	1,134	$	47

For the years ending December 31, 2022 and 2021, there were no impaired loans with an allowance recorded.

Nonaccrual and past due loans are summarized below as of December 31, 2022 and 2021:

December 31, 2022
($ in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due & Still Accruing		Total Past Due		Non-Accrual		Total

SBA	$	144,803	$	369	$	—	$	—	$	369	$	—	$	145,172
Commercial, non-real estate		11,484		—		—		—		—		—		11,484
Residential real estate		37,387		428		—		—		428		—		37,815
Strategic Program loans		45,669		1,184		802		193		2,179		—		47,848
Commercial real estate		12,063		—		—		—		—		—		12,063
Consumer		5,776		32		—		—		32		—		5,808
Total	$	257,182	$	2,013	$	802	$	193	$	3,008	$	—	$	260,190

December 31, 2021
($ in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due & Still Accruing		Total Past Due		Non-Accrual		Total
SBA	$	141,488	$	247	$	—	$	—	$	247	$	657	$	142,392
Commercial, non-real estate		3,428		—		—		—		—		—		3,428
Residential real estate		27,108		—		—		—		—		—		27,108
Strategic Program loans		84,065		1,041		690		54		1,785		—		85,850
Commercial real estate		2,436		—		—		—		—		—		2,436
Consumer		4,554		20		—		—		20		—		4,574
Total	$	263,079	$	1,308	$	690	$	54	$	2,052	$	657	$	265,788

The amount of interest income for the years ended December 31, 2022 and 2021, that was not recorded on nonaccrual loans was approximately $0.1 million and $0.1 million, respectively.

In addition to past due and nonaccrual status criteria, the Company also evaluates loans using a loan grading system. Internal loan grades are based on current financial information, historical payment experience, and credit documentation, among other factors. Performance-based grades are summarized below:

Pass (Loan Grades 1-4) – A Pass asset is higher quality and does not fit any of the other categories described below. The likelihood of loss is considered remote.

Special Mention (Loan Grade 5) – A Special Mention asset has potential weaknesses that may be temporary or, if left uncorrected, may result in a loss. While concerns exist, the Company is currently protected and loss is considered unlikely and not imminent.

Classified Substandard (Loan Grade 6) – A Substandard asset is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified have well defined weaknesses and are characterized by the distinct possibility that the Company may sustain some loss if deficiencies are not corrected.

Classified Doubtful (Loan Grade 7) – A Doubtful asset has all the weaknesses inherent in a Substandard asset with the added characteristics that the weaknesses make collection or liquidation in full highly questionable.

Classified Loss (Loan Grade 8) – A loss loan has an existing weakness or weaknesses that render the loan uncollectible and of such little value that continuing to carry as an asset on the Bank’s book is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather it is not practical nor desirable to defer writing off this basically worthless asset, even though partial recovery may be affected in the future.

The Company does not currently grade retained Strategic Program loans due to their small balances and homogenous nature. Credit quality for Strategic Program loans is highly correlated with delinquency levels. The Strategic Program loans are evaluated collectively for impairment.

Outstanding loan balances categorized by these credit quality indicators are summarized as follows at December 31, 2022 and 2021:

December 31, 2022
($ in thousands)	Pass Grade 1-4		Special Mention Grade 5		Classified/ Doubtful/Loss Grade 6-8		Total
SBA	$	144,149	$	573	$	450	$	145,172
Commercial, non-real estate		11,484		—		—		11,484
Residential real estate		37,815		—		—		37,815
Commercial real estate		12,063		—		—		12,063
Consumer		5,808		—		—		5,808
Not Risk Graded
Strategic Program loans								47,848
Total at December 31, 2022	$	211,319	$	573	$	450	$	260,190

December 31, 2021
($ in thousands)	Pass Grade 1-4		Special Mention Grade 5		Classified/ Doubtful/Loss Grade 6-8		Total
SBA	$	139,985	$	1,435	$	972	$	142,392
Commercial, non-real estate		3,382		46		—		3,428
Residential real estate		27,108		—		—		27,108
Commercial real estate		2,436		—		—		2,436
Consumer		4,574		—		—		4,574
Not Risk Graded
Strategic Program loans								85,850
Total at December 31, 2021	$	177,485	$	1,481	$	972	$	265,788

There were no loans modified as TDRs during the years ended December 31, 2022, and 2021. Loans classified as TDRs, consist of the following at December 31, 2022 and 2021:

($ in thousands)	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
December 31, 2022
SBA		1	$	94	$	94

December 31, 2021
SBA		2	$	106	$	106

Non-Accrual
SBA		1	$	25	$	25

At December 31, 2022 and 2021, there were no commitments to lend additional funds to debtors whose loan terms have been modified in a TDR. There was one principal charge-off recorded related to TDRs during the year ended December 31, 2022 for $0.01 million. There were no principal charge-offs recorded related to TDRs during the year ended December 31, 2021.

During 2022, one restructured loan incurred a default within twelve months of the restructure date and was paid in full including interest during 2022. During 2021, one restructured loan incurred a default within twelve months of the restructure date and was paid in full including interest during 2021.

COVID-Related Loan Deferments

As discussed in Note 1, the federal banking agencies issued guidance in March 2020 that short -term modifications (for example, six months) made to a borrower affected by the COVID -19 pandemic does not need to be identified as a TDR if the loan was current at the time of modification. This relief applies to loan modifications executed between March 1, 2020 and January 1, 2022. The CARES Act also addressed COVID-19 related modifications and specified that such modifications made on loans that were current as of December 31, 2019 are not TDRs. None of these modifications were on deferment status as of December 31, 2022 and 2021.

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Cash and cash equivalents
Cash and due from banks	$ 386	$ 411
Interest-bearing deposits	100,181	85,343
Total cash and cash equivalents	100,567	85,754
Investment securities held-to-maturity, at cost	14,292	11,423
Investment in Federal Home Loan Bank (FHLB) stock, at cost	449	378
Strategic Program loans held-for-sale, at lower of cost or fair value	23,589	60,748
Loans receivable, net	224,217	198,102
Premises and equipment, net	9,478	3,285
Accrued interest receivable	1,818	1,548
Deferred taxes, net	1,167	1,823
SBA servicing asset, net	5,210	3,938
Investment in Business Funding Group (BFG), at fair value	4,800	5,900
Operating lease right-of-use ("ROU") assets	5,041	0
Other assets	10,152	7,315
Total assets	400,780	380,214
Deposits
Noninterest bearing	78,817	110,548
Interest-bearing	164,181	141,344
Total deposits	242,998	251,892
Accrued interest payable	54	48
Income taxes payable	1,077	233
PPP Liquidity Facility	314	1,050
Operating lease liabilities	7,020	0
Other liabilities	8,858	11,549
Total liabilities	260,321	264,772
Commitments and contingencies (Note 8)
Shareholders' equity
Preferred stock, $0.001 par value, 4,000,000 authorized; no shares issued and outstanding as of December 31, 2022 and December 31, 2021	0	0
Common stock, $0.001 par value, 40,000,000 shares authorized; 12,831,345 and 12,772,010 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively	13	13
Additional paid-in-capital	54,614	54,836
Retained earnings	85,832	60,593
Total shareholders' equity	140,459	115,442
Total liabilities and shareholders' equity	$ 400,780	$ 380,214

Revenue Recognition

12 Months Ended

Dec. 31, 2022

Revenue Recognition [Abstract]

Revenue Recognition

Note 17 – Revenue Recognition

The following is a summary of the Company’s revenue disaggregated by contracts with customers and revenue outside the scope of ASC 606:

	For the Years Ended December 31,
($ in thousands)	2022			2021
Interest income
Interest income, not-in-scope
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
Non-interest income
Non-interest income, in-scope
Service charges on deposit accounts	$	30		$	31
Strategic Program set up fees		195			96
Strategic Program fees		21,438			17,119
Non-interest income, not in-scope
Gain on sale of loans, net		13,550			9,689
SBA loan servicing fees		1,603			1,156
Unrealized gain on investment in BFG		(478	)		2,991
Other miscellaneous income		239			18
Strategic Program service charges		834			744
Total non-interest income	$	37,411		$	31,844

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI https://asc.fasb.org/topic&trid=49130388

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-Publisher FASB
-Name Accounting Standards Codification
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 15
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 606
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-Section 50
-Paragraph 12
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Condensed Financial Statements of Parent [Abstract]

Commitments and Contingent Liabilities, Federal Home Loan Bank Secured Line of Credit (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Apr. 20, 2020
Federal Home Loan Bank Secured Line of Credit [Abstract]
Outstanding line of credit	$ 314	$ 1,050
Paycheck Protection Program Liquidity Facility [Member]
Federal Home Loan Bank Secured Line of Credit [Abstract]
Line of credit to borrow in overnight funds	300	1,000
Borrowings Fixed-rate of interest			0.35%
Average outstanding borrowings	600	36,400
Line of Credit [Member]
Federal Home Loan Bank Secured Line of Credit [Abstract]
Outstanding line of credit	0
Federal Reserve Bank borrowings on collateral	10,600
Zion Bank [Member] \| Line of Credit [Member]
Federal Home Loan Bank Secured Line of Credit [Abstract]
Unsecured line	1,000
Bank of the West [Member] \| Line of Credit [Member]
Federal Home Loan Bank Secured Line of Credit [Abstract]
Line of credit to borrow in overnight funds	1,050
Federal Home Loan Bank Secured Line of Credit [Member]
Federal Home Loan Bank Secured Line of Credit [Abstract]
Line of credit to borrow in overnight funds	2,600	4,100
Outstanding line of credit	0
Loans pledged to secure line of credit	$ 4,000	$ 5,400

Condensed Financial Statements of Parent

12 Months Ended

Dec. 31, 2022

Condensed Financial Statements of Parent

Note 18 – Condensed Financial Statements of Parent

Financial information pertaining only to FinWise Bancorp, on a parent-only basis, is as follows as of and for the years ended December 31, 2022 and 2021:

Balance Sheets

	December 31,
($ in thousands)	2022		2021
ASSETS
Cash and cash equivalents	$	36,321	$	38,697
Investment in subsidiary bank		100,276		71,186
Investment in Business Funding Group (BFG), at fair value		4,800		5,900
Investment in FinWise Investments, LLC		271		80
Deferred taxes, net		127		82
Other assets		37		322
Total assets	$	141,832	$	116,267
LIABILITIES AND SHAREHOLDERS’ EQUITY
Income taxes payable		1,077		233
Other liabilities		296		592
Shareholders’ equity		140,459		115,442
Total liabilities and shareholders’ equity	$	141,832	$	116,267

Statement of Income

	For the Years Ended December 31,
($ in thousands)	2022			2021
Non-interest income
Change in fair value on investment in BFG	$	(478	)	$	2,991
Equity in undistributed earnings of subsidiary		29,090			30,469
Total non-interest income		28,612			33,460
Non-interest expense
Salaries and employee benefits		2,316			742
Professional services		1,990			320
Other operating expenses		470			360
Total non-interest expense		4,776			1,422
Income before income tax expense		23,836			32,038
Provision for income taxes		(1,279	)		455
Net income	$	25,115		$	31,583

Statements of Cash Flows

	For the Years Ended December 31,
($ in thousands)	2022			2021
Cash flows from operating activities:
Net income	$	25,115		$	31,583
Adjustments to reconcile net income to net cash from operating activities
Change in fair value of BFG		478			(2,991	)
Stock-based compensation expense		778			2,100
Deferred income tax expense		844			222
Net changes in:
Income tax receivable		(45	)		(128	)
Other assets		285			(217	)
Other liabilities		(296	)		(288	)
Net cash provided by operating activities		27,159			30,281
Cash flows from investing activities:
Investment in subsidiary bank		(29,090	)		(30,469	)
Investment in FinWise Investments, LLC		(191	)		(80	)
Distributions of BFG		622			861
Net cash used in investing activities		(28,659	)		(29,688	)
Cash flows from financing activities:
Proceeds from exercise of stock options		260			311
Proceeds from initial public offering, net		—			35,576
Common stock repurchased		(1,136	)		—
Net cash provided by (used in) financing activities		(876	)		35,887
Net change in cash and cash equivalents		(2,376	)		36,480
Cash and cash equivalents, beginning of year		38,697			2,217
Cash and cash equivalents, end of year	$	36,321		$	38,697

Capital Requirements, Actual Capital Amounts and Ratios (Details)
$ in Thousands

Dec. 31, 2022

USD ($)

Dec. 31, 2021

USD ($)

Leverage Ratio (CBLR Election), Amount [Abstract]

Actual Amount

$ 91,674

$ 65,503

Well-Capitalized Requirement Amount

^[1]

$ 32,898

$ 31,442

Leverage Ratio (CBLR Election), Ratio [Abstract]

Actual Ratio

0.251

0.177

Well Capitalized Requirement Ratio

0.09

0.085

[1]	On March 27, 2020 the CARES Act became law. Section 4012 of the CARES Act directs the agencies to issue an interim final rule reducing the CBLR ratio requirement from9% to 8% for the last two quarters of the year 2020, 8.5% for the calendar year 2021, and 9% thereafter.

Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2022

Fair Value of Financial Instruments [Abstract]

Fair Value of Financial Instruments

Note 11 – Fair Value of Financial Instruments

The Company measures and discloses certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (that is, not a forced liquidation or distressed sale). GAAP establishes a consistent framework for measuring fair value and disclosure requirements about fair value measurements. Among other things, the standard requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s estimates for market assumptions. These two types of inputs create the following fair value hierarchy.

Level 1 – Quoted prices in active markets for identical instruments. An active market is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available.

Level 2 – Observable inputs other than Level 1 including quoted prices in active markets for similar instruments, quoted prices in less active markets for identical or similar instruments, or other observable inputs that can be corroborated by observable market data.

Level 3 – Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation; also includes observable inputs from nonbinding single dealer quotes not corroborated by observable market data. In developing Level 3 measurements, management incorporates whatever market data might be available and uses discounted cash flow models where appropriate. These calculations include projections of future cash flows, including appropriate default and loss assumptions, and market-based discount rates.

The estimated fair value amounts of financial instruments have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize at a future date. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. In addition, reasonable comparability between financial institutions may not be likely due to the wide range of permitted valuation techniques and numerous estimates that must be made given the absence of active secondary markets for many of the financial instruments. This lack of uniform valuation methodologies also introduces a greater degree of subjectivity to these estimated fair values. Transfers between levels of the fair value hierarchy are deemed to occur at the end of the reporting period.

The following methods were used to estimate the fair value of each class of financial instruments:

Cash and cash equivalents: The carrying amount of these items is a reasonable estimate of their fair value.

Investment securities held-to-maturity: The estimated fair values of investment securities are priced using current active market quotes, if available, which are considered Level 1 measurements. For most of the portfolio, matrix pricing based on the securities’ relationship to other benchmark quoted prices is used to establish the fair value. These measurements are considered Level 2.

Investment in Federal Home Loan Bank stock: The fair value is based upon the redemption value of the stock, which equates to the carrying value.

Strategic Program loans held-for-sale: The carrying amount of these items is a reasonable estimate of their fair value.

Loans held for investment: The fair value is estimated by discounting the future cash flows and estimated prepayments using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining term. Some loan types’ fair value approximated carrying value because of their floating rate or expected maturity characteristics.

SBA servicing asset: The fair value of servicing assets is based on, in part, third -party valuations that project estimated future cash inflows that include servicing fees and outflows that include market rates for costs of servicing. The present value of the future cash flows are calculated utilizing market-based discount rates. The market-based discount rates represent risk spreads based on secondary market transactions utilizing calculated prepayment curves. Because observable loan transactions are used to determine the risk spreads, the Company considers the measurement to be Level 2.

Investment in BFG: The Company purchased its ownership interest in BFG on December 31, 2019. The Company’s valuation technique utilized the average of the discounted cash flow method and the Guideline Public Company method. A 20% lack of marketability discount was applied to the valuation as well as a 4.50% discount to non-voting shares to arrive at fair value as of December 31, 2022 and December 31, 2021. The calculation of fair value utilized significant unobservable inputs, including projected cash flows, growth rates, and discount rates. The fair value of the investment in BFG was $4.8 million and $5.9 million as of December 31, 2022 and December 31, 2021, respectively. The following table summarizes investment in BFG activity for the periods indicated:

	For the Years Ended December 31,
($ in thousands)	2022			2021
Beginning balance	$	5,900		$	3,770
Distributions from BFG		(622	)		(861	)
Change in fair value of BFG		(478	)		2,991
Ending balance	$	4,800		$	5,900

Deposits: The carrying amount of deposits with no stated maturity, such as savings and checking accounts, is a reasonable estimate of their fair value. The market value of certificates of deposit is based upon the discounted value of contractual cash flows. The discount rate is determined using the rates currently offered on comparable instruments.

Accrued interest receivable and payable: The fair value of accrued interest receivable and payable approximates their carrying amount.

PPP Liquidity Facility: The fair value of PPPLF is estimated using a discounted cash flow based on the remaining contractual term and current borrowing rates for similar terms.

The table below presents the carrying amount and fair value of the Company’s financial instruments:

			December 31, 2022				December 31, 2021
($ in thousands)	Level		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial assets:
Cash and cash equivalents		1	$	100,567	$	100,567	$	85,754	$	85,754
Investment securities held-to-maturity		2		14,292		12,728		11,423		11,332
Investment in FHLB stock		2		449		449		378		378
Loans held for investment		3		224,217		237,225		198,102		197,412
Loans held-for-sale		2		23,589		23,586		60,748		60,743
Accrued interest receivable		2		1,818		1,818		1,548		1,548
SBA servicing asset		2		5,210		5,210		3,938		3,938
Investment in BFG		3		4,800		4,800		5,900		5,900
Financial liabilities:
Total deposits		2		242,998		221,287		251,892		249,488
Accrued interest payable		2		54		54		48		48
PPP Liquidity Facility		2		314		314		1,050		1,050

Assets measured at fair value on a nonrecurring basis are summarized as follows:

($ in thousands)			Fair Value Measurements Using
Description of Financial Instrument	Fair Value		Level 1		Level 2		Level 3
December 31, 2022
Nonrecurring assets
Impaired loans	$	450	$	—	$	—	$	450
December 31, 2021
Nonrecurring assets
Impaired loans	$	972	$	—	$	—	$	972

Impaired loans – The loan amount above represents loans impaired as of year-end that have been adjusted to fair value. When collateral dependent loans are identified as impaired, the impairment is measured using the current fair value of the collateral securing these loans, less selling costs. The fair value of real estate collateral is determined using collateral valuations or a discounted cash flow analysis using inputs such as discount rates, sale prices of similar assets, and term of expected disposition. Some appraised values are adjusted based on management’s review and analysis, which may include historical knowledge, changes in market conditions, estimated selling and other anticipated costs, and/or expertise and knowledge. The loss represents charge-offs or impairments on loans for adjustments made based on the fair value of the collateral.

Quantitative information for Level 3 fair value measurements – The range and weighted average of the significant unobservable inputs used to fair value Level 3 nonrecurring assets during the years ended December 31, 2022 and 2021, along with the valuation techniques used, are shown in the following table:

($ in thousands)	Fair Value		Valuation Technique	Unobservable Input	Range (Weighted Average)
December 31, 2022
Impaired loans	$	450	Market comparable	Adjustment to appraisal value		0.20	%

December 31, 2021
Impaired loans	$	972	Market comparable	Adjustment to appraisal value		0.50	%

	December 31, 2022			December 31, 2021
($ in thousands)	Range (Weighted Average)			Range (Weighted Average)
Discounted Cash Flows
Revenue growth rate		10.8	%		16.6	%
Expense growth rate		11.5	%		16.3	%
Discount rate		30.0	%		25.0	%

Guideline Public Company
Multiples of enterprise value	3.0x to 5.0x			4.0x to 6.0x

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

Summary of Significant Accounting Policies, Out-of-Period Adjustment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended	12 Months Ended
	Dec. 31, 2022	Mar. 31, 2022	Sep. 30, 2022	Dec. 31, 2022	Dec. 31, 2021
Out-of-Period Adjustment [Abstract]
Interest and fee on loans and loans receivable, net				$ 50,941	$ 49,135
After-tax income				25,115	31,583
Gain on sale of loans	$ 2,100			13,550	9,689
Gain on sale of loans, net	1,500			13,550	9,689
Other Assets [Member]
Out-of-Period Adjustment [Abstract]
New loan trailing fee asset	$ 2,300			$ 2,300
Adjustment [Member]
Out-of-Period Adjustment [Abstract]
Interest and fee on loans and loans receivable, net		$ (800)
Interest and fees, net of tax, on loans and loans receivable, net		$ (600)
After-tax income			$ (900)
Gain on sale of loans			1,200		900
Gain on sale of loans, net			$ 900		$ 600

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(A))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 34: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8906-108599

Reference 35: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Commitments and Contingent Liabilities [Abstract]

Investments, Unrealized Loss Position (Details) $ in Thousands	Dec. 31, 2022 USD ($) Securities	Dec. 31, 2021 USD ($) Securities
Securities in Unrealized Loss Position [Abstract]
Number of securities in unrealized loss position \| Securities	17	9
Mortgage-Backed Securities [Member]
Securities in Unrealized Loss Position [Abstract]
Less Than 12 Months, Fair Value	$ 5,126	$ 8,961
Less Than 12 Months, Unrealized Losses	(286)	(114)
12 Months or More, Fair Value	6,671	0
12 Months or More, Unrealized Losses	(1,283)	0
Total, Fair Value	11,797	8,961
Total, Unrealized Losses	$ (1,569)	$ (114)

Fair Value of Financial Instruments, Quantitative Information for Level 3 Fair Value Measurements (Details) - Level 3 [Member] $ in Thousands	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Fair Value Measurement Inputs and Valuation Techniques [Abstract]
Impaired loans	$ 450	$ 972
Market Comparable [Member] \| Adjustment to Appraisal Value [Member]
Fair Value Measurement Inputs and Valuation Techniques [Abstract]
Impaired loans, measurement input	0.002	0.005

Investments, FHLB Stock (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Investments [Abstract]
FHLB stock to be held as percentage of membership asset value	1.00%
FHLB stock to be held as percentage of FHLB advances outstanding	4.00%
Investment in Federal Home Loan Bank (FHLB) stock, at cost	$ 449	$ 378

Related Parties	12 Months Ended
Related Parties	Dec. 31, 2022
Related Parties [Abstract]
Related Parties	Note 15 – Related Parties In the ordinary course of business, the Company may grant loans to certain executive officers and directors and the companies with which they are associated. The Company did not have loans outstanding to any related party as of December 31, 2022 and 2021. Total deposits from certain executive officers and directors and the companies with which they are associated were $1.2 million and $0.5 million as of December 31, 2022 and 2021, respectively. On October 21, 2022, Mr. Alan Weichselbaum, who was elected as a director of the Company on October 6, 2022, repaid in full the $0.1 million aggregate principal amount plus interest owed under a secured promissory note, dated as of June 1, 2022 (the “2022 Note”), between the Company and Mr. Weichselbaum in accordance with the terms of the 2022 Note. As such, the obligations of the parties under the 2022 Note and a related security agreement were discharged and the 2022 Note and the security agreement were terminated. BFG is a small business loan broker, primarily under the SBA’s 7(a) loan program. As noted in Note 9 Investments above, the Company has a 10% ownership in the outstanding membership units of BFG. The Company underwrites loans sourced by BFG in its normal course of business. If approved and funded, the Company pays BFG a commission fee based on the amount funded. There is no guarantee or commitment made by the Company to BFG to approve or fund loans referred by BFG. The Company is able to use its sole discretion in deciding to approve and fund loans referred by BFG.

Investment in Business Funding Group, LLC (Details) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2022 USD ($) $ / shares	Dec. 31, 2021 USD ($) $ / shares	Dec. 31, 2019 USD ($) $ / shares shares	Jul. 28, 2021 $ / shares	Mar. 31, 2020 $ / shares shares
Investment in Business Funding Group, LLC [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001		$ 0.001
Business Funding Group, LLC [Member]
Investment in Business Funding Group, LLC [Abstract]
Membership interest			10.00%
Aggregate value of shares exchanged (in shares) \| shares			950,784
Common stock, par value (in dollars per share)			$ 0.001
Fair value of shares exchanged \| $			$ 3.5
Membership interests held by other existing members			90.00%
Distributions received \| $	$ 0.6	$ 0.9
Warrants issued (in shares) \| shares					270,000
Warrants exercise price (in dollars per share)					$ 6.67
Fair value of warrants issued per share (in dollars per share)					$ 0.19
Business Funding Group, LLC [Member] \| Minimum [Member]
Investment in Business Funding Group, LLC [Abstract]
Earnings multiplier					10
Business Funding Group, LLC [Member] \| Maximum [Member]
Investment in Business Funding Group, LLC [Abstract]
Earnings multiplier					15
Business Funding Group, LLC [Member] \| Class A Voting Units [Member]
Investment in Business Funding Group, LLC [Abstract]
Membership interest			4.96%
Business Funding Group, LLC [Member] \| Class B Non-Voting Units [Member]
Investment in Business Funding Group, LLC [Abstract]
Membership interest			5.04%

Earnings per Share (Tables)

12 Months Ended

Dec. 31, 2022

Earnings per Share [Abstract]

Basic and Diluted EPS

The following table is a reconciliation of the components used to derive basic and diluted EPS for the years ended December 31, 2022 and 2021 ($ in thousands, except share and per share amounts):

	For the Years Ended December 31,
	2022			2021
Numerator:
Net income	$	25,115		$	31,583
Amount allocated to participating common shareholders⁽¹⁾		(193	)		(1,780	)
Net income allocate to common shareholders	$	24,922		$	29,803
Denominator:
Weighted average shares outstanding, basic		12,729,898			8,669,724
Weighted average effect of dilutive securities:
Stock options		508,056			371,240
Warrants		119,068			67,199
Weighted average shares outstanding, diluted		13,357,022			9,108,163
Earnings per share, basic	$	1.96		$	3.44
Earnings per share, diluted	$	1.87		$	3.27

(1) Represents earnings attributable to holders of unvested restricted stock issued outside of the Plan to the Company’s employees.

Investments, Held-to-Maturity Securities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Securities held-to-maturity [Abstract]
Amortized cost	$ 14,292	$ 11,423
Estimated fair value	12,728	11,332
Mortgage-Backed Securities [Member]
Securities held-to-maturity [Abstract]
Amortized cost	14,292	11,423
Unrealized gain	5	23
Unrealized loss	(1,569)	(114)
Estimated fair value	$ 12,728	$ 11,332

Shareholders' Equity (Details) - USD ($) $ in Thousands	12 Months Ended
Shareholders' Equity (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Aug. 16, 2022
Stock Repurchases [Abstract]
Common stock repurchase program, shares authorized to be purchases (in shares)		644,241
Common stock repurchased (in shares)	120,000
Common stock repurchased, value	$ 1,136

Stock-Based Compensation

12 Months Ended

Dec. 31, 2022

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 10 – Stock-Based Compensation

Stock option plans

The Company utilizes stock-based compensation plans, as well as discretionary grants, for employees, directors and consultants to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentives and to promote the success of the Company’s business.

The 2019 Stock Option Plan (“2019 Plan”) was adopted on June 20, 2019 following approval by the Company’s Board of Directors and shareholders. The 2019 Plan provides for the issuance of non-statutory stock options and restricted stock to employees, directors and consultants as well as issuance of incentive stock options only to employees. The 2019 Plan originally authorized the issuance of 780,000 common shares but was later amended on April 19, 2022 to increase the number of shares of the Company’s common stock available for awards under the 2019 Plan by 500,000 shares to 1,280,000 shares. This amendment along with an amendment to change its name from the All West Bancorporation 2019 Stock Option Plan to the FinWise Bancorp 2019 Stock Option Plan was approved by the Company’s shareholders at the Company’s 2022 Annual Meeting of Shareholders on June 9, 2022. The 2019 Plan will terminate as to future awards 10 years from the later of the effective date or the earlier of the most recent Board or stockholder approval of an increase in the number of shares reserved for issuance under the 2019 Plan. At December 31, 2022, 621,472 shares are available for future issuance.

The 2016 Stock Option Plan (“2016 Plan”) was adopted on April 20, 2017 following approval by the Company’s Board of Directors and shareholders. The 2016 Plan provides for the issuance of non-statutory stock options and restricted stock to employees, directors and consultants. The 2016 Plan also provides for the issuance of incentive stock options only to employees. The 2016 Plan authorizes the issuance of 299,628 common shares. The 2016 Plan will terminate as to future awards 10 years from the later of the effective date or the earlier of the most recent Board or stockholder approval of an increase in the number of shares reserved for issuance under the 2016 Plan. At December 31, 2022, 894 shares under 2016 Plan are available for future issuance.

The stock-based incentive awards for both the 2019 Plan and the 2016 Plan (collectively, the “Plans”) are granted at an exercise price not less than the fair market value of the shares on the date of grant, which is based on a Black-Scholes valuation model, in the case of options, or based on the fair value of the stock at the grant date, in the case of restricted stock. Vesting of the options vary by employee or director and can have a term no more than 10 years, with the options generally having vesting periods ranging from 1 to 5 years. No shares had been granted under the 2016 Plan prior to 2018.

Under both Plans, if an award expires or becomes un-exercisable without having been exercised in full, or is surrendered pursuant to an exchange program, the unpurchased shares that were subject thereto shall become available for future grant or sale under the Plans. However, shares that have actually been issued under the Plans, upon exercise of an award, shall not be returned to the Plans and shall not become available for future distribution under the Plans, except that if unvested shares of restricted stock are repurchased by the Company at their original purchase price, such shares shall become available for future grant under the Plans.

The following summarizes stock option activity for the years ended December 31, 2022 and 2021:

	Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value
Outstanding at December 31, 2020		638,664		$	3.54		8.6	$	653,991
Options granted		906,600			6.27		3.3
Options exercised		(86,676	)		3.6				511,339
Options forfeited		(596,100	)		6.42				1,460,581
Outstanding at December 31, 2021		862,488		$	4.41		8.2	$	8,088,660
Options granted		89,415			13.04		9.9
Options exercised		(56,280	)		4.62				393,534
Options forfeited		(13,998	)		4.40				124,874
Outstanding at December 31, 2022		881,625		$	5.27		7.5	$	3,871,667
Options vested and exercisable at December 31, 2022		600,396		$	4.47		7.3	$	2,878,478

The weighted average grant-date fair value of options per share granted was $6.26 and $1.55 during 2022 and 2021, respectively. The aggregate intrinsic value of options exercised during the years ended December 31, 2022 and 2021 were $0.39 million and $0.51 million, respectively. During 2022, the Company received proceeds of approximately $0.3 million from the exercise of stock options and recognized a de minimis tax benefit from the exercise of stock options. Upon exercise of the stock options, the Company will issue new authorized shares.

Restricted stock

The Company from time-to-time grants shares of restricted stock to key employees or directors. These awards typically hold service requirements over various vesting periods. The value of the stock awarded is established as the fair market value of the stock at the time of the grant. The Company recognizes expense, equal to the total value of such awards, ratably over the vesting period of the stock grants. All restricted stock agreements are conditioned upon continued employment. Termination of employment prior to a vesting date, as described below, would terminate any interest in non-vested shares.

Nonvested restricted stock for the years ended December 31, 2022 and 2021 is summarized in the following table.

	Number of Shares			Weighted Average Grant Price
Unvested as of December 31, 2020		621,666		$	3.64
Vested		(621,666	)		3.64
Unvested as of December 31, 2021		—		$	—
Granted		123,055		$	12.28
Unvested as of December 31, 2022		123,055		$	12.28

The restricted stock vests as follows: 59,048 shares in 2023, 32,003 shares in 2024, and 32,004 shares in 2025.

The aggregate fair value of restricted stock that vested was approximately $2.3 million for the year ended December 31, 2021, respectively. The aggregate fair value of restricted stock outstanding was approximately $5.4 million for the year ended December 31, 2022.

Stock-based compensation expense

The following tables present pre-tax and after-tax stock-based compensation expense recognized:

	For the Years Ended December 31,
($ in thousands)	2022		2021
Pre-tax
Stock options	$	320	$	934
Restricted shares		458		1,166
Total	$	778	$	2,100
After-tax
Stock options	$	322	$	778
Restricted shares		344		1,166
Total	$	666	$	1,944

As of December 31, 2022, the Company had unrecognized stock-based compensation expense related to stock options and restricted stock of approximately $0.5 million and $1.1 million, respectively, which is expected to be recognized over the remaining weighted average recognition period of 1.8 and 1.4 years.

Employee stock-based compensation expense is recorded within Salaries and employee benefits and was $0.8 million and $1.6 million for the years ending December 31, 2022 and 2021, respectively. Stock-based compensation for all others is recorded within Other operating expenses and was $0.0 million and $0.5 million for the years ending December 31, 2022 and 2021, respectively.

Revenue Recognition (Details) - USD ($) $ in Thousands	12 Months Ended
Revenue Recognition (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Interest income, not-in-scope [Abstract]
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
Non-interest income [Abstract]
Total non-interest income	37,411	31,844
Service Charges on Deposit Accounts [Member]
Non-interest income [Abstract]
Non-interest income, in-scope	30	31
Strategic Program Set Up Fees [Member]
Non-interest income [Abstract]
Non-interest income, in-scope	195	96
Strategic Program Fees [Member]
Non-interest income [Abstract]
Non-interest income, in-scope	21,438	17,119
Gain on Sale of Loans, Net [Member]
Non-interest income [Abstract]
Non-interest income, not in-scope	13,550	9,689
SBA Loan Servicing Fees [Member]
Non-interest income [Abstract]
Non-interest income, not in-scope	1,603	1,156
Unrealized Gain on Investment in BFG [Member]
Non-interest income [Abstract]
Non-interest income, not in-scope	(478)	2,991
Other Miscellaneous Income [Member]
Non-interest income [Abstract]
Non-interest income, not in-scope	239	18
Strategic Program Service Charges [Member]
Non-interest income [Abstract]
Non-interest income, not in-scope	$ 834	$ 744

Commitments and Contingent Liabilities

12 Months Ended

Dec. 31, 2022

Commitments and Contingent Liabilities

Note 8 – Commitments and Contingent Liabilities

Federal Home Loan Bank Secured Line of Credit

As of December 31, 2022 and 2021, the Bank’s available line of credit with the FHLB to borrow in overnight funds was $2.6 million and $4.1 million, respectively. All borrowings are short-term and the interest rate is equal to the correspondent bank’s daily federal funds purchase rate. As of December 31, 2022, no amounts were outstanding under the line of credit. Loans totaling $4.0 million and $5.4 million were pledged to secure the FHLB line of credit as of December 31, 2022 and 2021, respectively.

Lines of Credit

At December 31, 2022, we had the ability to access $10.6 million from the Federal Reserve Bank’s Discount Window on a collateralized basis. Through Zions Bank, the Bank had an available unsecured line of $1.0 million. The Bank had an available line of credit with Bankers’ Bank of the West to borrow up to $1.05 million in overnight funds. We had no outstanding balances on the unsecured or secured lines of credit as of December 31, 2022.

Paycheck Protection Program Liquidity Facility

On April 20, 2020, the Bank was approved by the Federal Reserve to access its SBA Paycheck Protection Program Liquidity Facility (“PPPLF”) through the discount window. The PPPLF enables the Company to fund PPP loans without taking on additional liquidity or funding risks because the Company is able to pledge PPP loans as collateral to secure extensions of credit under the PPPLF on a non-recourse basis. Borrowings under the PPPLF have a fixed-rate of 0.35%, with a term that matches the underlying loans. The Bank pledged $1.0 million of PPP loans as eligible collateral under the PPPLF borrowing arrangement at December 31, 2021. The Bank pledged $0.3 million of PPP loans as eligible collateral under the PPPLF borrowing arrangement at December 31, 2022. The average outstanding borrowings were $36.4 million during the year ended December 31, 2021 and $0.6 million during the year ended December 31, 2022.

Commitments to Extend Credit

In the ordinary course of business, the Bank has entered into commitments to extend credit to customers which have not yet been exercised. These financial instruments include commitments to extend credit in the form of loans. Those instruments involve to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheets.

At December 31, 2022 and 2021, financial instruments with off-balance-sheet risk were as follows:

	December 31,
($ in thousands)	2022		2021
Revolving, open-end lines of credit	$	1,683	$	1,259
Commercial real estate		17,886		15,402
Other unused commitments		253		377
	$	19,822	$	17,038

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2022

Summary of Significant Accounting Policies [Abstract]

Nature of business and organization

The Company is subject to competition from other financial institutions and to the regulations of certain federal and state agencies and undergoes periodic examinations by those agencies.

Stock split and changes in authorized shares

Significant concentrations of credit risk

Paycheck Protection Program

Principles of consolidation

Out-of-period adjustment

Use of estimates

Reclassifications

Reclassifications – Certain amounts in the prior year’s financial statements have been reclassified to conform to the current year’s presentation.

Cash and cash equivalents

Investments

Investment in Federal Home Loan Bank ("FHLB") stock

Loans held-for-sale

Loans receivable

Allowance for loan losses

Nonaccrual loans

Impaired loans

Troubled debt restructurings (TDR)

Premises and equipment, net

Leases

Income taxes

Transfer of financial assets

SBA servicing asset, net

Revenue from contracts with customers

Stock-based compensation

The table below summarizes the weighted average assumptions used in determining the Black-Scholes option pricing model for options granted during 2022 and 2021:


	2022			2021
Risk-free interest rate		3.10	%		0.4% - 1.3	%
Expected term in years		5.5 - 6.5			5.0 - 7.5
Expected volatility		45.8% - 46.7	%		45.7% - 47.6	%
Expected dividend yield		-			-

Earnings per share ("EPS")

Stock Repurchase Program

Off-balance sheet instruments

Segment reporting

Recent accounting pronouncements

Deposits (Tables)

12 Months Ended

Dec. 31, 2022

Deposits [Abstract]

Major Classes of Deposits

Major classes of deposits at December 31, 2022 and 2021, are as follows:

	December 31,
	2022			2021
($ in thousands)
Demand		$	129,563		$	115,947
Savings			8,289			6,685
Money markets			10,882			31,076
Time certificates of deposit			94,264			98,184
Total deposits		$	242,998		$	251,892

Maturities of Time Deposits

At December 31, 2022, the scheduled maturities of time deposits are as follows ($ in thousands):

Year Ended December 31, 2023	$	57,721
Year Ended December 31, 2024		17,514
Year Ended December 31, 2025		9,314
Year Ended December 31, 2026		8,160
Year Ended December 31, 2027		1,555
Thereafter		—
Total		94,264

Tabular disclosure of type of deposit liability.

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (e)

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)(ii)

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (1)

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (1)

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (d)

Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
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-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
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-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)(iv)

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (5)

Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)(iii)

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
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-Section 1406
-Paragraph (a)
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Reference 11: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 13: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
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-Paragraph (a)
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Reference 14: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
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Reference 15: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)

Commitments and Contingent Liabilities [Abstract]

Commitments and Contingent Liabilities (Tables)

12 Months Ended

Dec. 31, 2022

Financial Instruments with Off-balance Sheet Risk

At December 31, 2022 and 2021, financial instruments with off-balance-sheet risk were as follows:

	December 31,
($ in thousands)	2022		2021
Revolving, open-end lines of credit	$	1,683	$	1,259
Commercial real estate		17,886		15,402
Other unused commitments		253		377
	$	19,822	$	17,038

SBA Servicing Asset

12 Months Ended

Dec. 31, 2022

SBA Servicing Asset [Abstract]

SBA Servicing Asset

Note 6 – SBA Servicing Asset

The Company periodically sells portions of SBA loans and retains rights to service the loans. Loans serviced for others are not included in the accompanying balance sheet. The unpaid principal balances of SBA loans serviced for others was $318.6 million and $210.2 million at December 31, 2022 and 2021, respectively.

The following table summarizes SBA servicing asset activity for the periods indicated:

	For the Years Ended December 31,
($ in thousands)	2022			2021
Beginning balance	$	3,938		$	2,415
Additions to servicing asset		4,087			3,048
Impairment of SBA servicing asset		(1,728	)		(800	)
Amortization of servicing asset		(1,087	)		(725	)
Ending balance	$	5,210		$	3,938

The SBA servicing asset is carried at the lower or amortized cost or fair market value. The fair market value of the SBA servicing asset as of December 31, 2022 and 2021, was $5.2 million and $3.9 million, respectively. Fair value adjustments to servicing rights are mainly due to market-based assumptions associated with discounted cash flows, loan prepayment speeds, and changes in interest rates. A significant change in prepayments of the loans in the servicing portfolio could result in significant changes in the valuation adjustments, thus creating potential volatility in the carrying amount of servicing rights. The SBA servicing asset recognized an impairment in the years ending December 31, 2022 and 2021.

The Company assumed a weighted average prepayment rate of 14.24%, weighted average term of 4.45 years, and a weighted average discount rate of 18.79% at December 31, 2022.

The Company assumed a weighted average prepayment rate of 14.37%, weighted average term of 4.02 years, and a weighted average discount rate of 11.38% at December 31, 2021.

The entire disclosure for a transferor's continuing involvement in financial assets that it has transferred in a securitization or asset-backed financing arrangement, the nature of any restrictions on assets reported by an entity in its statement of financial position that relate to a transferred financial asset (including the carrying amounts of such assets), how servicing assets and servicing liabilities are reported, and (for securitization or asset-backed financing arrangements accounted for as sales) when a transferor has continuing involvement with the transferred financial assets and transfers of financial assets accounted for as secured borrowings, how the transfer of financial assets affects an entity's financial position, financial performance, and cash flows.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 30
-Section 50
-Paragraph 1A
-Subparagraph (c)(3)
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
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Disaggregation of Revenue

Revenue Recognition (Tables)

12 Months Ended

Dec. 31, 2022

Revenue Recognition [Abstract]

The following is a summary of the Company’s revenue disaggregated by contracts with customers and revenue outside the scope of ASC 606:

	For the Years Ended December 31,
($ in thousands)	2022			2021
Interest income
Interest income, not-in-scope
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
Non-interest income
Non-interest income, in-scope
Service charges on deposit accounts	$	30		$	31
Strategic Program set up fees		195			96
Strategic Program fees		21,438			17,119
Non-interest income, not in-scope
Gain on sale of loans, net		13,550			9,689
SBA loan servicing fees		1,603			1,156
Unrealized gain on investment in BFG		(478	)		2,991
Other miscellaneous income		239			18
Strategic Program service charges		834			744
Total non-interest income	$	37,411		$	31,844

Loans and Allowance for Loan Losses, Impaired Loans (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Impaired Financing Receivable, Recorded Investment [Abstract]
Recorded Investment	$ 450	$ 972
Unpaid Principal Balance	450	972
Related Allowance	0	0
Average Recorded Investment	711	1,134
Interest Income Recognized	36	47
Impaired loans with an allowance recorded	0	0
Commercial, Non-Real Estate [Member]
Impaired Financing Receivable, Recorded Investment [Abstract]
Recorded Investment	0	0
Unpaid Principal Balance	0	0
Related Allowance	0	0
Average Recorded Investment	0	0
Interest Income Recognized	0	0
Residential Real Estate [Member]
Impaired Financing Receivable, Recorded Investment [Abstract]
Recorded Investment	0	0
Unpaid Principal Balance	0	0
Related Allowance	0	0
Average Recorded Investment	0	189
Interest Income Recognized	0	0
Strategic Program Loans [Member]
Impaired Financing Receivable, Recorded Investment [Abstract]
Recorded Investment	0	0
Unpaid Principal Balance	0	0
Related Allowance	0	0
Average Recorded Investment	0	0
Interest Income Recognized	0	0
Commercial Real Estate [Member]
Impaired Financing Receivable, Recorded Investment [Abstract]
Recorded Investment	0	0
Unpaid Principal Balance	0	0
Related Allowance	0	0
Average Recorded Investment	0	0
Interest Income Recognized	0	0
Consumer [Member]
Impaired Financing Receivable, Recorded Investment [Abstract]
Recorded Investment	0	0
Unpaid Principal Balance	0	0
Related Allowance	0	0
Average Recorded Investment	0	0
Interest Income Recognized	0	0
SBA [Member]
Impaired Financing Receivable, Recorded Investment [Abstract]
Recorded Investment	450	972
Unpaid Principal Balance	450	972
Related Allowance	0	0
Average Recorded Investment	711	945
Interest Income Recognized	$ 36	$ 47

Earnings per Share

12 Months Ended

Dec. 31, 2022

Earnings per Share [Abstract]

Earnings per Share

Note 16 – Earnings per Share

The following table is a reconciliation of the components used to derive basic and diluted EPS for the years ended December 31, 2022 and 2021 ($ in thousands, except share and per share amounts):

	For the Years Ended December 31,
	2022			2021
Numerator:
Net income	$	25,115		$	31,583
Amount allocated to participating common shareholders⁽¹⁾		(193	)		(1,780	)
Net income allocate to common shareholders	$	24,922		$	29,803
Denominator:
Weighted average shares outstanding, basic		12,729,898			8,669,724
Weighted average effect of dilutive securities:
Stock options		508,056			371,240
Warrants		119,068			67,199
Weighted average shares outstanding, diluted		13,357,022			9,108,163
Earnings per share, basic	$	1.96		$	3.44
Earnings per share, diluted	$	1.87		$	3.27

(1) Represents earnings attributable to holders of unvested restricted stock issued outside of the Plan to the Company’s employees.

There were no anti-dilutive options for the periods reported in the table above.

Summary of Significant Accounting Policies, Nonaccrual Loans (Details)	12 Months Ended
	Dec. 31, 2022
Nonaccrual Loans [Abstract]
Past due period after which loans are placed on nonaccrual status	90 days

Loans and Allowance for Loan Losses, Nonaccrual and Past Due Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Non-accrual and Past Due Loans [Abstract]
Non-accrual	$ 0	$ 657
Total loans	260,190	265,788
Loans in non-accrual without an allowance	100	100
Current [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	257,182	263,079
30-59 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	2,013	1,308
60-89 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	802	690
90+ Days Past Due & Still Accruing [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	193	54
Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	3,008	2,052
Commercial, Non-Real Estate [Member]
Non-accrual and Past Due Loans [Abstract]
Non-accrual	0	0
Total loans	11,484	3,428
Commercial, Non-Real Estate [Member] \| Current [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	11,484	3,428
Commercial, Non-Real Estate [Member] \| 30-59 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	0	0
Commercial, Non-Real Estate [Member] \| 60-89 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	0	0
Commercial, Non-Real Estate [Member] \| 90+ Days Past Due & Still Accruing [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	0	0
Commercial, Non-Real Estate [Member] \| Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	0	0
Residential Real Estate [Member]
Non-accrual and Past Due Loans [Abstract]
Non-accrual	0	0
Total loans	37,815	27,108
Residential Real Estate [Member] \| Current [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	37,387	27,108
Residential Real Estate [Member] \| 30-59 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	428	0
Residential Real Estate [Member] \| 60-89 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	0	0
Residential Real Estate [Member] \| 90+ Days Past Due & Still Accruing [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	0	0
Residential Real Estate [Member] \| Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	428	0
Strategic Program Loans [Member]
Non-accrual and Past Due Loans [Abstract]
Non-accrual	0	0
Total loans	47,848	85,850
Strategic Program Loans [Member] \| Current [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	45,669	84,065
Strategic Program Loans [Member] \| 30-59 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	1,184	1,041
Strategic Program Loans [Member] \| 60-89 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	802	690
Strategic Program Loans [Member] \| 90+ Days Past Due & Still Accruing [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	193	54
Strategic Program Loans [Member] \| Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	2,179	1,785
Commercial Real Estate [Member]
Non-accrual and Past Due Loans [Abstract]
Non-accrual	0	0
Total loans	12,063	2,436
Commercial Real Estate [Member] \| Current [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	12,063	2,436
Commercial Real Estate [Member] \| 30-59 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	0	0
Commercial Real Estate [Member] \| 60-89 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	0	0
Commercial Real Estate [Member] \| 90+ Days Past Due & Still Accruing [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	0	0
Commercial Real Estate [Member] \| Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	0	0
Consumer [Member]
Non-accrual and Past Due Loans [Abstract]
Non-accrual	0	0
Total loans	5,808	4,574
Consumer [Member] \| Current [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	5,776	4,554
Consumer [Member] \| 30-59 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	32	20
Consumer [Member] \| 60-89 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	0	0
Consumer [Member] \| 90+ Days Past Due & Still Accruing [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	0	0
Consumer [Member] \| Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	32	20
SBA [Member]
Non-accrual and Past Due Loans [Abstract]
Non-accrual	0	657
Total loans	145,172	142,392
SBA [Member] \| Current [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	144,803	141,488
SBA [Member] \| 30-59 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	369	247
SBA [Member] \| 60-89 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	0	0
SBA [Member] \| 90+ Days Past Due & Still Accruing [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	0	0
SBA [Member] \| Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total loans	$ 369	$ 247

SBA Servicing Asset (Details) - USD ($) $ in Thousands	12 Months Ended
SBA Servicing Asset (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
SBA Servicing Asset [Abstract]
SBA loans serviced for others	$ 318,600	$ 210,200
Servicing Asset at Amortized Cost, Balance [Roll Forward]
Beginning balance	3,938	2,415
Additions to servicing asset	4,087	3,048
Recovery (Impairment) of SBA servicing asset	(1,728)	(800)
Amortization of servicing asset	(1,087)	(725)
Ending balance	5,210	3,938
Fair market value of SBA servicing asset	$ 5,200	$ 3,900
Weighted average prepayment rate	14.24%	14.37%
Weighted average term	4 years 5 months 12 days	4 years 7 days
Weighted average discount rate	18.79%	11.38%

SBA Servicing Asset (Tables)

12 Months Ended

Dec. 31, 2022

SBA Servicing Asset [Abstract]

SBA Servicing Asset Activity

The following table summarizes SBA servicing asset activity for the periods indicated:

	For the Years Ended December 31,
($ in thousands)	2022			2021
Beginning balance	$	3,938		$	2,415
Additions to servicing asset		4,087			3,048
Impairment of SBA servicing asset		(1,728	)		(800	)
Amortization of servicing asset		(1,087	)		(725	)
Ending balance	$	5,210		$	3,938

Deposits

12 Months Ended

Dec. 31, 2022

Deposits [Abstract]

Deposits

Note 5 – Deposits

Major classes of deposits at December 31, 2022 and 2021, are as follows:

	December 31,
	2022			2021
($ in thousands)
Demand		$	129,563		$	115,947
Savings			8,289			6,685
Money markets			10,882			31,076
Time certificates of deposit			94,264			98,184
Total deposits		$	242,998		$	251,892

At December 31, 2022, the scheduled maturities of time deposits are as follows ($ in thousands):

Year Ended December 31, 2023	$	57,721
Year Ended December 31, 2024		17,514
Year Ended December 31, 2025		9,314
Year Ended December 31, 2026		8,160
Year Ended December 31, 2027		1,555
Thereafter		—
Total		94,264

Time deposits with balances equal or greater than $250,000 totaled $6.4 million and $3.7 million at December 31, 2022 and 2021, respectively.

Stock-Based Compensation, Assumptions Used (Details)	12 Months Ended
Stock-Based Compensation, Assumptions Used (Details)	Dec. 31, 2022	Dec. 31, 2021
Option-pricing model assumptions [Abstract]
Risk-free interest rate	3.10%
Expected dividend yield	0.00%	0.00%
Minimum [Member]
Option-pricing model assumptions [Abstract]
Risk-free interest rate		0.40%
Expected term in years	5 years 6 months	5 years
Expected volatility	45.80%	45.70%
Maximum [Member]
Option-pricing model assumptions [Abstract]
Risk-free interest rate		1.30%
Expected term in years	6 years 6 months	7 years 6 months
Expected volatility	46.70%	47.60%

Fair Value of Financial Instruments, Carrying Amount and Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Financial assets [Abstract]
Investment securities held-to-maturity	$ 12,728	$ 11,332
SBA servicing asset	5,200	3,900
Investment in BFG	4,800	5,900	$ 3,770
Level 1 [Member] \| Carrying Amount [Member]
Financial assets [Abstract]
Cash and cash equivalents	100,567	85,754
Level 1 [Member] \| Estimated Fair Value [Member]
Financial assets [Abstract]
Cash and cash equivalents	100,567	85,754
Level 2 [Member] \| Carrying Amount [Member]
Financial assets [Abstract]
Investment securities held-to-maturity	14,292	11,423
Investment in FHLB stock	449	378
Loans held-for-sale	23,589	60,748
Accrued interest receivable	1,818	1,548
SBA servicing asset	5,210	3,938
Financial liabilities [Abstract]
Total deposits	242,998	251,892
Accrued interest payable	54	48
PPP Liquidity Facility	314	1,050
Level 2 [Member] \| Estimated Fair Value [Member]
Financial assets [Abstract]
Investment securities held-to-maturity	12,728	11,332
Investment in FHLB stock	449	378
Loans held-for-sale	23,586	60,743
Accrued interest receivable	1,818	1,548
SBA servicing asset	5,210	3,938
Financial liabilities [Abstract]
Total deposits	221,287	249,488
Accrued interest payable	54	48
PPP Liquidity Facility	314	1,050
Level 3 [Member] \| Carrying Amount [Member]
Financial assets [Abstract]
Loans held for investment	224,217	198,102
Investment in BFG	4,800	5,900
Level 3 [Member] \| Estimated Fair Value [Member]
Financial assets [Abstract]
Loans held for investment	237,225	197,412
Investment in BFG	$ 4,800	$ 5,900

Condensed Financial Statements of Parent, Balance Sheets (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
ASSETS [Abstract]
Cash and cash equivalents	$ 100,567	$ 85,754
Investment in Business Funding Group (BFG), at fair value	4,800	5,900
Deferred taxes, net	1,167	1,823
Other assets	10,152	7,315
Total assets	400,780	380,214
LIABILITIES AND SHAREHOLDERS' EQUITY [Abstract]
Income taxes payable	1,077	233
Other liabilities	8,858	11,549
Shareholders' equity	140,459	115,442	$ 45,872
Total liabilities and shareholders' equity	400,780	380,214
Parent Company [Member]
ASSETS [Abstract]
Cash and cash equivalents	36,321	38,697
Investment in subsidiary bank	100,276	71,186
Investment in Business Funding Group (BFG), at fair value	4,800	5,900
Investment in FinWise Investments, LLC	271	80
Deferred taxes, net	127	82
Other assets	37	322
Total assets	141,832	116,267
LIABILITIES AND SHAREHOLDERS' EQUITY [Abstract]
Income taxes payable	1,077	233
Other liabilities	296	592
Shareholders' equity	140,459	115,442
Total liabilities and shareholders' equity	$ 141,832	$ 116,267

Investments (Tables)

12 Months Ended

Dec. 31, 2022

Investments [Abstract]

Amortized Cost, Unrealized Gains and Losses, and Estimated Fair Values of Held-to-Maturity Securities

The amortized cost, unrealized gains and losses, and estimated fair values of the Company’s held-to-maturity securities at December 31, 2022 and 2021, are summarized as follows:

	December 31, 2022
($ in thousands)	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
Mortgage-backed securities	$	14,292	$	5	$	(1,569	)	$	12,728

	December 31, 2021
($ in thousands)	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
Mortgage-backed securities	$	11,423	$	23	$	(114	)	$	11,332

Fair Value and Unrealized Losses of Securities in Unrealized Loss Position

The Company had seventeen securities in an unrealized loss position at December 31, 2022, nine in an unrealized loss at December 31, 2021.

	December 31, 2022
	Less than 12 months					12 Months or More					Total
($ in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Mortgage-backed securities	$	5,126	$	(286	)	$	6,671	$	(1,283	)	$	11,797	$	(1,569	)

	December 31, 2021
		Less than 12 months					12 Months or More				Total
($ in thousands)		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Mortgage-backed securities		$	8,961	$	(114	)	$	—	$	—	$	8,961	$	(114	)

Amortized Cost and Estimated Market Value of Debt Securities

	December 31, 2022				December 31, 2021
($ in thousands)	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Securities held-to-maturity
Due in one year or less	$	—	$	—	$	—	$	—
Due after one year through five years		—		—		—		—
Due after five years through ten years		3,388		3,202		1,541		1,548
Due after ten years		10,904		9,526		9,882		9,784
Total Securities held-to-maturity	$	14,292	$	12,728	$	11,423	$	11,332

Premises and Equipment (Tables)

12 Months Ended

Dec. 31, 2022

Premises and Equipment [Abstract]

Components of Premises and Equipment

Premises and equipment at December 31, 2022 and 2021, consist of the following:

	December 31,
	2022			2021
($ in thousands)
Leasehold improvements	$	3,720		$	80
Furniture, fixtures, and equipment ⁽¹⁾		6,501			2,219
Construction in progress		1,514			2,333
Total premises and equipment	$	11,735		$	4,632
Less accumulated depreciation		(2,257	)		(1,347	)
Premises and equipment, net	$	9,478		$	3,285

(1)	The Furniture, fixtures, and equipment include commercial operating leases of $2.8 million issued during the year ended 2022. Net book value of the operating leases as of December 31, 2022 was $2.7 million.

Future Minimum Annual Undiscounted Rental Payments for Operating Leases

Future minimum annual undiscounted rental payments for these operating leases are as follows ($ in thousands):

Year Ended December 31, 2023	$	850
Year Ended December 31, 2024		1,104
Year Ended December 31, 2025		1,086
Year Ended December 31, 2026		1,118
Year Ended December 31, 2027		1,152
Thereafter		2,203
Total	$	7,513
Less present value discount		(493	)
Operating lease liabilities	$	7,020

Information Regarding Lease Assets and Liabilities

The tables below present information regarding the Company’s lease assets and liabilities. Comparative periods and disclosures are not presented here due to adoption of ASC 842 on January 1, 2022.

	Year Ended
	December 31, 2022

Weighted-average remaining lease term – operating leases (in years)		6.7
Weighted-average discount rate – operating leases		1.9	%

Components of Lease Expense

The components of lease expense were as follows (in thousands):

	Year Ended December 31, 2022
(in thousands)
Operating leases
Operating lease cost	$	1,044
Variable lease cost		16
Operating lease expense		1,060
Short-term lease rent expense		38
Net rent expense	$	1,098

Income Taxes

12 Months Ended

Dec. 31, 2022

Income Taxes [Abstract]

Income Taxes

Note 12 – Income Taxes

The components of income tax expense consist of the following:

	For the Years Ended December 31,
($ in thousands)	2022		2021
Current tax expense
Federal	$	8,315	$	9,589
State		1,945		2,471
Deferred tax expense (benefit)
Federal		553		(1,156	)
State		103		(215	)
Income tax expense	$	10,916	$	10,689

The components of net deferred income tax assets and liabilities on the balance sheet at December 31, 2022 and 2021, are as follows:

	December 31,
($ in thousands)	2022			2021
Deferred tax assets
Operating lease liabilities	$	1,749		$	—
Allowance for loan losses		1,639			1,630
Accrued bonuses		61			72
Nonqualified stock options		124			156
Restricted stock		114			—
Other		290			250
Total deferred tax assets		3,977			2,108

Deferred tax liabilities
ROU asset		(1,256	)		—
Intangibles		(3	)		(3	)
Net book value of fixed assets		(1,230	)		(217	)
Other		(321	)		(65	)
Total deferred tax liabilities		(2,810	)		(285	)
Net deferred tax asset	$	1,167		$	1,823

The income tax expense recorded differs from the expected income tax expense and the reconciliation of these differences is as follows at December 31, 2022 and 2021:

	For the Years Ended December 31,
($ in thousands)	2022		2021
Federal income tax expense at statutory rates	$	7,567	$	8,877
Effect of permanent differences		811		50
State income tax expense, net		1,560		1,662
Other		978		100
Income tax expense	$	10,916	$	10,689

The Company recognizes interest accrued and penalties related to unrecognized tax benefits in tax expense. During the years ended December 31, 2022, and 2021, the Company recognized approximately $0 million of interest or penalties. The Company files a United States federal income tax return and state income tax returns in Utah, Florida, New York, Ohio, and Washington. Open tax years that are potentially subject to examination related to the U.S. federal jurisdiction are 2019 and subsequent years.

The Company had no unrecognized tax benefits at December 31, 2022 and 2021.

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Income Taxes, Components of Deferred Income Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Deferred tax assets [Abstract]
Operating lease liabilities	$ 1,749	$ 0
Allowance for loan losses	1,639	1,630
Accrued bonuses	61	72
Nonqualified stock options	124	156
Restricted stock	114	0
Other	290	250
Total deferred tax assets	3,977	2,108
Deferred tax liabilities [Abstract]
ROU asset	(1,256)	0
Intangibles	(3)	(3)
Net book value of fixed assets	(1,230)	(217)
Other	(321)	(65)
Total deferred tax liabilities	(2,810)	(285)
Net deferred tax asset	$ 1,167	$ 1,823

Condensed Financial Statements of Parent, Statements of Cash Flows (Details) - USD ($) $ in Thousands		12 Months Ended
	Nov. 23, 2021	Dec. 31, 2022	Dec. 31, 2021
Cash flows from operating activities [Abstract]
Net income		$ 25,115	$ 31,583
Adjustments to reconcile net income to net cash from operating activities [Abstract]
Change in fair value of BFG		478	(2,991)
Stock-based compensation expense		778	2,100
Deferred income tax expense		656	(1,371)
Net changes in [Abstract]
Other assets		(299)	(1,669)
Other liabilities		(1,847)	5,817
Net cash provided by (used in) operating activities		61,153	(9,232)
Cash flows from investing activities [Abstract]
Investment in FinWise Investments, LLC		(191)	(80)
Distributions of BFG		622	861
Net cash provided by (used in) investing activities		(35,834)	24,257
Cash flows from financing activities [Abstract]
Proceeds from exercise of stock options		260	311
Proceeds from initial public offering, net	$ 39,300	0	35,576
Common stock repurchased		(1,136)	0
Net cash provided by (used in) financing activities		(10,506)	23,346
Net change in cash and cash equivalents		14,813	38,371
Cash and cash equivalents, beginning of the period		85,754	47,383
Cash and cash equivalents, end of the period		100,567	85,754
Parent Company [Member]
Cash flows from operating activities [Abstract]
Net income		25,115	31,583
Adjustments to reconcile net income to net cash from operating activities [Abstract]
Change in fair value of BFG		478	(2,991)
Stock-based compensation expense		778	2,100
Deferred income tax expense		844	222
Net changes in [Abstract]
Income tax receivable		(45)	(128)
Other assets		285	(217)
Other liabilities		(296)	(288)
Net cash provided by (used in) operating activities		27,159	30,281
Cash flows from investing activities [Abstract]
Investment in subsidiary bank		(29,090)	(30,469)
Investment in FinWise Investments, LLC		(191)	(80)
Distributions of BFG		622	861
Net cash provided by (used in) investing activities		(28,659)	(29,688)
Cash flows from financing activities [Abstract]
Proceeds from exercise of stock options		260	311
Proceeds from initial public offering, net		0	35,576
Common stock repurchased		(1,136)	0
Net cash provided by (used in) financing activities		(876)	35,887
Net change in cash and cash equivalents		(2,376)	36,480
Cash and cash equivalents, beginning of the period		38,697	2,217
Cash and cash equivalents, end of the period		$ 36,321	$ 38,697

Income Taxes, Components Income Tax Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Current tax expense [Abstract]
Federal	$ 8,315	$ 9,589
State	1,945	2,471
Deferred tax expense (benefit) [Abstract]
Federal	553	(1,156)
State	103	(215)
Income tax expense	$ 10,916	$ 10,689

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.