FinWise Bancorp (NASDAQ:FINW) Releases Earnings Results, Misses Expectations By $0.09 EPS

FinWise Bancorp (NASDAQ:FINW) posted its quarterly earnings data on Wednesday. The company reported $0.15 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.24 by ($0.09), FiscalAI reports. FinWise Bancorp had a net margin of 6.76% and a return on equity of 7.10%. The company had revenue of $24.38 million for the quarter, compared to analyst estimates of $47.11 million.

Here are the key takeaways from FinWise Bancorp’s conference call:

• Credit costs pressured earnings: Second-quarter net income was $2.1 million, or $0.15 per share, below expectations as provision expense on the core portfolio increased to $6 million. Management expects elevated SBA-related charge-offs to persist for the next few quarters, though the second-quarter provision is viewed as an outlier.
• Non-performing loans declined: NPLs fell from nearly $50 million to approximately $38 million, primarily through collateral resolutions and paydowns. Management said the remaining risk is concentrated in a finite, identified legacy pool and expects credit quality to improve as it is worked down.
• Originations exceeded guidance: Second-quarter originations reached $1.6 billion, above the $1.4 billion outlook and up approximately 8% year over year. Management expects roughly $1.6 billion in the third quarter and a $1.4 billion baseline for the fourth quarter.
• Fintech pipeline strengthened: FinWise signed a new prepaid-card partnership using its BIN sponsorship and MoneyRails services, with a fourth-quarter launch expected. Management said the pipeline is materially stronger than in prior years and anticipates additional meaningful deals before year-end.
• Credit-enhanced balance guidance was withdrawn: The prior target of approximately $217 million by year-end 2026 no longer applies because the Tallied acquisition shifted some balances into the direct portfolio. Existing-partner growth is expected to continue, but meaningful expansion beyond 2026 will depend on adding new partners; Tallied also brings roughly $4 million of integration and transition costs over the next year.

FinWise Bancorp Stock Performance

FinWise Bancorp stock opened at $13.98 on Friday. The business’s 50-day simple moving average is $14.19 and its two-hundred day simple moving average is $15.58. The company has a market cap of $191.73 million, a PE ratio of 14.57 and a beta of 0.70. FinWise Bancorp has a fifty-two week low of $12.82 and a fifty-two week high of $22.49.

FinWise Bancorp announced that its board has authorized a stock buyback plan on Thursday, May 21st that permits the company to buyback 685,000,000,000 outstanding shares. This buyback authorization permits the company to reacquire up to 5% of its stock through open market purchases. Stock buyback plans are generally an indication that the company’s board believes its shares are undervalued.

Institutional Investors Weigh In On FinWise Bancorp

A number of institutional investors and hedge funds have recently modified their holdings of the company. Bridgeway Capital Management LLC lifted its position in FinWise Bancorp by 0.8% during the fourth quarter. Bridgeway Capital Management LLC now owns 88,889 shares of the company’s stock valued at $1,595,000 after purchasing an additional 700 shares during the period. Deutsche Bank AG grew its position in FinWise Bancorp by 12.7% during the 4th quarter. Deutsche Bank AG now owns 9,611 shares of the company’s stock worth $172,000 after purchasing an additional 1,086 shares during the period. BNP Paribas Financial Markets grew its position in FinWise Bancorp by 76.9% during the 3rd quarter. BNP Paribas Financial Markets now owns 2,890 shares of the company’s stock worth $56,000 after purchasing an additional 1,256 shares during the period. Empowered Funds LLC raised its stake in shares of FinWise Bancorp by 7.1% during the 1st quarter. Empowered Funds LLC now owns 24,052 shares of the company’s stock valued at $421,000 after buying an additional 1,591 shares during the last quarter. Finally, Vanguard Group Inc. raised its stake in shares of FinWise Bancorp by 0.4% during the 3rd quarter. Vanguard Group Inc. now owns 487,323 shares of the company’s stock valued at $9,449,000 after buying an additional 1,739 shares during the last quarter. Institutional investors and hedge funds own 35.41% of the company’s stock.

Analyst Ratings Changes

FINW has been the subject of a number of recent analyst reports. Zacks Research upgraded shares of FinWise Bancorp from a “strong sell” rating to a “hold” rating in a research note on Tuesday, June 30th. Wall Street Zen upgraded shares of FinWise Bancorp from a “sell” rating to a “hold” rating in a research note on Sunday, July 12th. Finally, Weiss Ratings cut shares of FinWise Bancorp from a “hold (c+)” rating to a “hold (c)” rating in a report on Wednesday, May 6th. One equities research analyst has rated the stock with a Buy rating and two have issued a Hold rating to the stock. According to data from MarketBeat, the stock presently has an average rating of “Hold” and a consensus target price of $22.00.

About FinWise Bancorp

FinWise Bancorp is the bank holding company for FinWise Bank, a digital?first community bank headquartered in Lindon, Utah. The company specializes in providing commercial lending and deposit products to marketplace lending platforms, fintech companies and small to mid?sized businesses across the United States. FinWise Bancorp operates through its wholly owned subsidiary, FinWise Bank, which is FDIC?insured and leverages a technology?driven model to deliver banking services efficiently.

The company’s primary business activities include participant financing arrangements for marketplace lenders and other fintech platforms, as well as direct commercial loans.