Sign in

You're signed outSign in or to get full access.

FB

Finwise Bancorp (FINW)·Q3 2025 Earnings Summary

Executive Summary

  • EPS of $0.34 beat Wall Street consensus of $0.297, driven by strong loan originations ($1.79B), higher net interest income, and disciplined OpEx; adjusted operating revenue rose to $36.7M, and efficiency ratio improved to 47.6% .
  • SPGI “Revenue” missed consensus ($23.86M* vs $28.20M*), partly reflecting definitional differences for banks; net interest margin expanded to 9.01% q/q, though management guided possible Q4 margin compression as revenue from Tally is bifurcated between NII and interchange fees .
  • Credit‑enhanced balances grew to ~$41M in Q3 and are projected to reach ~$115M by Q4 (above prior $50–$100M target), a key catalyst for spread/fee growth with low credit risk due to guarantees and reserve accounts .
  • Strategic partnership pipeline advanced with DreamFi (financial inclusion products) and Tallied (two Mastercard co‑branded credit card programs launching in Nov. 2025), supporting Payments/MoneyRails and BIN sponsorship initiatives .
  • Watchlist NPL migration moderated in Q3 (only ~$3M vs ~up to $12M guided previously), but management expects ~$10–$12M to migrate in Q4; SBA program sales may be impacted by the government shutdown, a near‑term headwind .

What Went Well and What Went Wrong

What Went Well

  • Loan originations increased to $1.79B (vs. $1.48B in Q2 and $1.45B YoY), supporting fee and spread income growth as new programs ramp and student lending seasonality provided a tailwind .
  • Net interest income rose to $18.6M (from $14.7M), and net interest margin expanded to 9.01% q/q, while adjusted operating revenue reached $36.7M; efficiency ratio improved to 47.6% (59.7% adjusted), evidencing operating leverage .
  • Management confidence and pipeline: “Our strong third quarter results reflect the positive impact of the strategic investments we made over the past two years… we remain confident that our focus on disciplined growth and operational excellence will continue to drive long‑term progress” — Kent Landvatter, CEO .
  • Low‑risk credit‑enhanced balances grew to $41.4M and are expected to reach ~$115M by year‑end; Tallied’s portfolio adds scale with guarantees and cash reserve protections .

What Went Wrong

  • Provision for credit losses rose sharply to $12.8M (vs. $4.7M in Q2; $2.2M YoY), primarily tied to growth in credit‑enhanced balances and higher net charge‑offs; NPLs increased to $42.8M (7.5% of HFI) .
  • Deposit mix skewed further to time CDs (62.7%), keeping cost of interest‑bearing deposits elevated at 4.06%, limiting funding cost relief; management noted potential NIM compression in Q4 due to Tally revenue mix .
  • SBA program exposure to shutdown: approvals and secondary market sales are suspended during the closure, potentially reducing Q4 SBA gain‑on‑sale and hampering throughput, despite limited servicing impact .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Adjusted Operating Revenue ($USD Millions)$20.8 $25.1 $36.7
Net Interest Income ($USD Millions)$14.8 $14.7 $18.6
Total Non-Interest Income ($USD Millions)$6.1 $10.3 $18.1
Net Income ($USD Millions)$3.45 $4.10 $4.89
Diluted EPS ($USD)$0.25 $0.29 $0.34
Net Interest Margin (%)9.70% 7.81% 9.01%
Efficiency Ratio (%)67.5% 59.5% 47.6%

Estimates vs Actual (SPGI definitions)

MetricQ3 2025 Consensus*Q3 2025 ActualBeat/Miss
EPS ($)0.2967*0.34 Beat
Revenue ($USD Millions)28.20*23.86*Miss

S&P Global disclaimer: Values marked with an asterisk (*) retrieved from S&P Global.

Segment Breakdown – Loans HFI Composition

Segment ($USD Millions)Q3 2024 Amount (% total)Q2 2025 Amount (% total)Q3 2025 Amount (% total)
SBA$251.4 (57.9%) $246.9 (46.6%) $240.1 (42.2%)
Commercial Leases$64.3 (14.8%) $89.0 (16.8%) $90.4 (15.8%)
Residential Real Estate$41.4 (9.5%) $54.1 (10.2%) $60.5 (10.7%)
Strategic Program – with Credit Enhancement$0.7 (0.2%) $11.7 (2.2%) $41.4 (7.3%)
Strategic Program – without Credit Enhancement$18.7 (4.3%) $19.0 (3.6%) $21.7 (3.8%)
CRE Owner Occupied$32.5 (7.5%) $77.9 (14.7%) $83.3 (14.7%)
CRE Non-Owner Occupied$2.7 (0.7%) $1.4 (0.3%) $1.4 (0.3%)
Consumer$19.2 (4.4%) $24.6 (4.6%) $24.3 (4.3%)
Total Loans HFI$434.0 (100%) $530.0 (100%) $567.8 (100%)

KPIs

KPIQ3 2024Q2 2025Q3 2025
Loan Originations ($USD Billions)$1.45 $1.48 $1.79
NPL Balance – Total ($USD Millions)$30.65 $39.74 $42.78
NPL – Guaranteed ($USD Millions)$17.80 $21.18 $23.33
Net Charge-Offs ($USD Millions)$2.41 $2.78 $3.13
ACL / Loans HFI (%)2.9% 3.1% 4.5%
Total Assets ($USD Millions)$683.0 $842.5 $899.9
Total Deposits ($USD Millions)$488.7 $635.2 $682.3
ROAA (%)2.1% 2.0% 2.2%
ROAE (%)8.3% 9.2% 10.6%
Yield on Loans (%)14.16% 11.70% 13.09%
Cost of Interest-Bearing Deposits (%)4.85% 4.07% 4.06%
Tangible Book Value/Share ($)$12.90 $13.51 $13.84
Bank Leverage Ratio (CBLR) (%)20.3% 18.0% 17.2%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Credit-Enhanced Balances (period-end)Q4 2025$50–$100M by YE ~$115M by YE (incl. ~$50M from Tally closing Dec. 1) Raised
Net Interest MarginQ4 2025N/A“Could see some compression” vs Q3 due to interchange/NII mix from Tally Lowered
Effective Tax RateQ4 2025N/A~26% Introduced
NPL MigrationQ3 2025Up to ~$12M expected Actual Q3 migration ~$3M; Q4 expected ~$10–$12M Maintained Q4 outlook; Q3 better than guided
Originations Run-RateFY 2026N/AFrom ~$1.4B quarterly in Oct. run-rate, ~5% annualized growth expected in 2026 Introduced
SBA Loan SalesQ4 2025Continue selling guaranteed portions while premiums favorable Shutdown may impact Q4 volume sold; servicing not materially impacted Lowered

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Credit-Enhanced Program GrowthQ1: minimal credit enhancement income ($0.085M); Q2 balances $11.7M, income $2.275M Balances $41.4M; income $8.762M; YE target raised to ~$115M Strong Up
Net Interest MarginQ1 8.27%; Q2 7.81% (accrued interest reversals, de-risking) 9.01%; guide potential compression in Q4 due to Tally revenue mix Mixed (Up q/q; near-term risk)
SBA Gain-on-SaleQ1 $0.846M; Q2 $1.483M; market premiums favorable Q3 $1.854M; shutdown may impact Q4 sales Up, with Q4 risk
NPLs / CreditNPLs: $29.9M (Q1) → $39.7M (Q2) $42.8M; only ~$3M migrated in Q3 vs up to ~$12M guided; Q4 migration ~$10–$12M expected Up, but Q3 better than feared
Payments/MoneyRails & BIN SponsorshipStrategic push highlighted; infrastructure investments DreamFi and Tallied agreements; Tally revenue bifurcated (NII + interchange) Building
Student Lending SeasonalityNoted as a driver Key driver of Q3 originations; Q4 deceleration expected Seasonal pattern consistent
Deposit Mix / FundingBrokered CDs growing to fund loans Time CDs 62.7% of deposits; cost 4.06% Elevated cost persists

Management Commentary

  • CEO framing: “We reported net income of $4.9 million, a 19% increase from the prior quarter and a 42% increase year‑over‑year… driven by robust loan originations, a significant increase in credit‑enhanced balances, solid revenue growth and disciplined expense management” — Kent Landvatter .
  • Strategy/pipeline: “The partnership with Tally underscores the uniqueness of our one‑to‑many business model… while our model can appear lumpy, each completed agreement has the potential to unlock substantial value” — CEO prepared remarks .
  • Bank CEO outlook: “Incremental organic growth in credit‑enhanced balances is running at approximately $8 million in October… we anticipate ~$50 million from Tally late in Q4, for a projected total of approximately $115 million by the end of the fourth quarter” — Jim Noone .
  • CFO margin mix: “Tally… revenue contribution is bifurcated between net interest income and interchange fees… resulting net interest margin from adding this program may be lower than expected” — Bob Wahlman .

Q&A Highlights

  • Concentration policy: Credit‑enhanced program concentration caps at ~15% per program of portfolio; clarifies per‑program limit rather than loan type .
  • Credit enhancement expenses: “Credit enhancement guaranteed expense” reflects guarantees paid; delta to total program expense is servicing cost, variable with assets .
  • Accrued interest reversals: ~$175K in Q3 vs ~$514K in Q2 when loans move to non‑accrual (90+ days), impacting NIM .
  • NIM direction: Q4 NIM could compress depending on timing/scale of Tally onboarding and revenue mix, despite overall revenue growth .
  • Growth drivers: 4 active credit‑enhanced programs (5th in Dec. with Tally); organic monthly growth of $8–$10M in 2026 with upside if lagging programs accelerate; downside if performance weakens and originations paused .

Estimates Context

  • Q3 EPS beat: $0.34 vs $0.2967 consensus*, supported by higher NII and fee income; results likely warrant upward EPS revisions if margin holds and credit‑enhanced growth persists .
  • Q3 “Revenue” miss (SPGI): $23.86M* vs $28.20M* consensus; note SPGI revenue definitions for banks can differ (e.g., NII vs operating revenue). Company’s adjusted operating revenue was $36.7M, while total interest income was $24.0M .
  • Forward consensus*: Q4 2025 EPS 0.32*; Revenue 42.32M*; Q1 2026 EPS 0.355*; Revenue 38.80M*. Given management’s Q4 NIM compression commentary and SBA shutdown headwinds, near‑term revenue mix and NIM assumptions may need recalibration, while YE credit‑enhanced balances (~$115M) support medium‑term spread/fee expansion .

S&P Global disclaimer: Values marked with an asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

  • EPS beat with q/q margin expansion and a sharp efficiency ratio improvement; core profitability momentum is strengthening .
  • Credit‑enhanced balances are scaling faster than expected (YE ~$115M), a durable catalyst for fee/spread income with low credit risk due to guarantees/reserves .
  • Near‑term NIM risk: Q4 margin could compress as Tally’s economic benefit splits between NII and interchange; watch deposit costs and revenue mix .
  • SBA shutdown is a tactical headwind to Q4 loan sales, but servicing impact is limited; monitor premium environment and reopening timing .
  • Asset quality: NPL migration in Q3 came in better than feared (~$3M vs up to ~$12M guided), but Q4 migration of ~$10–$12M remains likely; ACL ratio stepped up to 4.5% .
  • Funding/capital: Deposit growth continues via brokered CDs (62.7% of mix); bank leverage ratio remains well above “well‑capitalized” thresholds (17.2% vs 9%) .
  • Strategic initiatives: DreamFi and Tallied broaden Payments/MoneyRails and BIN sponsorship; 2026 outlook points to gradual originations growth and steady state in 2027 .

Additional Sources Read

  • Q3 2025 earnings press release (full) –.
  • Q3 2025 earnings call transcript (full) –.
  • Strategic partner press releases: Tallied (Oct. 27, 2025) –; DreamFi (Oct. 22, 2025) –.
  • Prior quarters for trend analysis: Q2 2025 press release –; Q1 2025 press release –.

Note: The 8‑K 2.02 filing for Q3 2025 was not available in the document catalog; this recap relies on the company’s Q3 earnings press release, full call transcript, and Q3 10‑Q context where applicable .