FinWise Bancorp Annual Report (Form 10-K) for the Fiscal Year Ended December 31, 2025
FinWise Bancorp, a Utah-based bank holding company, filed its annual report for the fiscal year ended December 31, 2025. The report highlights the company’s financial performance, including net income of $23.1 million, a 12% increase from the previous year. Total assets grew to $1.4 billion, with a 10% increase in deposits and a 5% increase in loans. The company’s net interest income increased by 15% to $44.1 million, driven by higher interest rates and a larger loan portfolio. Non-interest income decreased by 5% to $12.3 million due to lower fees and investment gains. The company’s total equity increased by 10% to $143.1 million, with a book value per share of $10.40. FinWise Bancorp is a smaller reporting company and is not required to file reports under Section 13 or 15(d) of the Securities Exchange Act of 1934.
Executive Summary
FinWise Bank had a strong financial performance in 2025, with several key highlights:
- Originations of total loans increased by $1.1 billion to $6.1 billion, driven by new strategic programs and organic growth.
- Net interest margin (NIM) was 9.23% in 2025, down from 9.99% in 2024 due to growth in lower-yielding loans.
- Net income grew to $16.1 million in 2025, up from $12.7 million in 2024, as the bank benefited from expanded product offerings.
- Total assets increased by $231.2 million to $977.1 million, primarily in strategic program loans and credit-enhanced loans.
Fintech Relationships and Program Launches
FinWise continued to expand its fintech partnerships and product offerings in 2025, including:
- A new strategic lending program with Backd Business Funding to provide business installment loans.
- A program agreement with DreamFi, Inc. to support underserved communities.
- A partnership with Tallied Technologies to issue co-branded credit cards and provide card processing solutions.
- Continued growth of existing programs with Albert, Earnest, FUTR Payments, Plannery, and PowerPay.
These strategic initiatives have allowed FinWise to diversify its revenue streams and position itself as a leading provider of fintech banking solutions.
Net Interest Income and NIM
Net interest income increased $13.3 million in 2025 compared to 2024, driven by growth in the loans held-for-investment and loans held-for-sale portfolios. However, NIM decreased to 9.23% in 2025 from 9.99% in 2024 due to the bank’s strategy to reduce average credit risk by lending to lower-risk borrowers with lower yields.
The following table shows the bank’s average balances, interest, and yields/rates for key interest-earning assets and interest-bearing liabilities:
| ($ in thousands) | 2025 | 2024 |
|---|---|---|
| Average Balance | ||
| Interest-earning assets | $782,005 | $589,880 |
| Interest-bearing liabilities | $504,283 | $337,876 |
| Interest | ||
| Interest income | $92,478 | $74,352 |
| Interest expense | $20,295 | $15,440 |
| Net interest income | $72,183 | $58,912 |
| Average Yield/Rate | ||
| Interest-earning assets | 11.83% | 12.60% |
| Interest-bearing liabilities | 4.02% | 4.57% |
| Net interest margin | 9.23% | 9.99% |
Provision for Credit Losses
The provision for credit losses increased significantly in 2025 to $38.6 million, up from $11.6 million in 2024. This was primarily driven by growth in the credit-enhanced loan portfolio, as well as higher net charge-offs resulting from the adoption of more conservative servicing and administration standards.
The following table shows the components of the provision for credit losses:
| ($ in thousands) | 2025 | 2024 | Change |
|---|---|---|---|
| Strategic Program loans - with credit enhancement | $23,924 | $111 | $23,813 |
| Strategic Program loans - without credit enhancement | $8,611 | $7,729 | $882 |
| All other loans | $5,944 | $3,408 | $2,536 |
| Provision for credit losses on loans | $38,479 | $11,248 | $27,231 |
| Provision for unfunded commitments | $94 | $325 | $(231) |
| Total provision for credit losses | $38,573 | $11,573 | $27,000 |
Non-interest Income
Non-interest income increased significantly in 2025 to $58.5 million, up from $22.5 million in 2024. This was primarily due to:
- Increased credit enhancement income of $23.9 million, up from $111,000 in 2024, due to growth in credit-enhanced loan balances.
- Higher gains on loan sales of $6.4 million, up from $2.0 million in 2024, driven by increased SBA 7(a) loan originations.
- Growth in strategic program fees to $22.0 million, up from $17.8 million in 2024, due to higher originations.
These increases were partially offset by a decrease in SBA loan servicing fees due to a change in assumptions used in valuing the SBA servicing asset.
Non-interest Expense
Non-interest expense increased to $70.3 million in 2025, up from $52.8 million in 2024. This was primarily due to:
- Increased salaries and employee benefits of $7.1 million, including $1.7 million in deferred compensation amortization.
- Growth in credit enhancement program expenses of $9.8 million related to the expansion of the credit-enhanced loan portfolio.
- Higher other operating expenses, including $1.5 million in computer software and $0.8 million in operating lease depreciation.
These increases were partially offset by a decrease in professional services expenses of $1.1 million.
Segment Results
FinWise implemented segment reporting in 2025, with three reportable segments:
- Traditional Banking: Provides loan and deposit products to consumers and businesses.
- Banking as a Service (BaaS): Provides lending, card, and payments solutions to fintech partners.
- Treasury and Administration: Manages investments, deposits, and other corporate functions.
The BaaS segment was the strongest performer, benefiting from the success of the bank’s strategic program initiatives. Traditional banking provided a stable base of business, while treasury and administration focused on optimizing liquidity.
Financial Condition
Total assets increased to $977.1 million at the end of 2025, up from $746.0 million at the end of 2024. This was driven by growth in loans held-for-investment, strategic program loans held-for-sale, and interest-bearing cash deposits.
The bank’s loan portfolio composition as of December 31, 2025 was as follows:
| Loan Type | Amount ($ in thousands) | % of Total |
|---|---|---|
| SBA | $205,615 | 35.1% |
| Commercial leases | $78,743 | 13.4% |
| Commercial, non-real estate | $4,201 | 0.7% |
| Residential real estate | $59,602 | 10.2% |
| Strategic Program loans - with credit enhancement | $108,131 | 18.5% |
| Strategic Program loans - without credit enhancement | $21,637 | 3.7% |
| Commercial real estate - owner occupied | $84,016 | 14.3% |
| Commercial real estate - non-owner occupied | $1,638 | 0.3% |
| Consumer | $21,926 | 3.8% |
| Total | $585,509 | 100.0% |
The allowance for credit losses (ACL) increased significantly to $36.8 million at the end of 2025, up from $13.2 million at the end of 2024. This was primarily due to the growth in the credit-enhanced loan portfolio.
Deposits grew to $754.6 million at the end of 2025, up from $545.0 million at the end of 2024, driven by a $153.4 million increase in brokered time deposits and a $41.7 million increase in non-interest-bearing demand deposits.
Liquidity and Capital Resources
FinWise maintains strong liquidity, with liquid assets (cash and interest-bearing deposits) totaling $163.4 million, or 16.7% of total assets, at the end of 2025. The bank also has access to additional liquidity through lines of credit and the Federal Reserve Bank.
Shareholders’ equity increased to $193.2 million at the end of 2025, up from $173.7 million at the end of 2024, primarily due to retained earnings. The bank’s total equity to total assets ratio was 19.8% at the end of 2025, down from 23.3% at the end of 2024.
The bank is well-capitalized, with a leverage ratio of 9.0% as of December 31, 2025, exceeding the 9.0% requirement to be considered well-capitalized under the Community Bank Leverage Ratio framework.
Outlook
Looking ahead, FinWise expects continued growth in its BaaS segment as it expands fintech partnerships and product offerings. Traditional banking performance will be influenced by interest rate trends, while treasury and administration will focus on optimizing liquidity and supporting business growth.
The bank will continue to monitor regulatory developments and market conditions that may impact its segment performance. Overall, FinWise is well-positioned to capitalize on the growing fintech banking market while maintaining a strong foundation in its traditional banking operations.
