FinWise Bancorp

What they do

The company operates through three reportable segments: traditional banking, banking as a service (BaaS), and treasury & administration. It originates, sells or holds loans in four main areas: nationwide Strategic Programs, a multi-state SBA 7(a) program, residential and owner-occupied commercial real estate, and multi-state equipment financing. It funds lending primarily through wholesale sources including brokered deposits, health savings accounts and institutional deposits, plus core and online deposits. It also holds a 20% membership interest in BFG, a Connecticut-based SBA loan referral source and legal lending facilitator.

Revenue drivers

• Strategic Programs lending — Nationwide consumer and small business lending originated through third-party platforms; held-for-investment Strategic Program loans were $129.8 million, or 22.2% of the $585.5 million loan portfolio at December 31, 2025.
• SBA 7(a) lending — SBA loans were $205.6 million, or 35.1% of the loan portfolio at December 31, 2025, of which $102.7 million was SBA-guaranteed; the company originated about $116.7 million of SBA 7(a) loans in 2025 and typically sells the guaranteed portion at a premium while keeping servicing rights.
• Commercial leases — Commercial leases were $78.7 million, or 13.4% of the loan portfolio at December 31, 2025, part of the traditional lending category that also includes real estate.
• BaaS and treasury & administration — BaaS is one of three reportable segments, providing banking services through partner arrangements; treasury & administration covers balance sheet and deposit activities. Segment-level revenue figures were not disclosed in the excerpts provided.

Recent performance

For the second quarter of 2026, loan originations were $1.6 billion, net interest income was $28.7 million, net income was $2.1 million and diluted EPS was $0.15. That compared with $2.7 million of net income and $0.20 EPS in the first quarter of 2026, and $4.1 million and $0.29 in the second quarter of 2025. Net interest margin was 13.69% and the efficiency ratio was 53.1%. Nonperforming loans fell to $37.7 million at June 30, 2026 from $49.8 million at March 31, 2026, with $19.0 million of the June 30 balance SBA-guaranteed. CEO Jim Noone said earnings were short of expectations due to higher provision expense on loans where the company retains credit risk.

Strategy

Management said it is actively managing credit risk, citing a $12.1 million quarter-over-quarter reduction in nonperforming loans and a focus on identifying and pruning risk. The company is diversifying its partner base, signing a new strategic program with a prepaid card provider that will use BIN Sponsorship and MoneyRails services. It recently acquired the Tallied Technologies platform to broaden its product offering for new partners. FinWise also revised its reporting into three segments in the third quarter of 2025 after a technology initiative to capture segment data. Management describes the sales pipeline as materially stronger than before.

Risks

• Credit losses on retained-risk loans — Second quarter 2026 provision expense rose on loans where FinWise retains credit risk, driven by losses on sale of property collateralizing classified loans.
• SBA program dependence — SBA 7(a) loans were 35.1% of the portfolio at December 31, 2025, exposing FinWise to changes in SBA rules, loan products, or its SBA Preferred Lender status.
• Fintech partner oversight — The company depends on third-party BaaS and Strategic Program providers to comply with regulatory regimes, and says its ability to oversee and monitor them is a risk.
• Wholesale funding reliance — FinWise funds lending principally through brokered deposits, health savings accounts and institutional deposits, making it sensitive to changes in brokered deposit regulation and deposit costs.

Outlook

Management said the business continues to make solid progress, citing $1.6 billion of originations from an increasingly diversified partner base and tangible book value per share of $14.55. It called the current sales pipeline materially stronger and potentially more meaningful to the bottom line, and said the Tallied Technologies acquisition makes FinWise more competitive for partners requiring a broad product offering. The CEO said FinWise remains well-positioned for sustained growth and focused on translating that momentum into shareholder value.