FinWise Bancorp (FINW, Financial) has unveiled a new strategic initiative in partnership with fintech company Backd Business Funding. This collaboration aims to offer business installment loans targeted at small and medium-sized enterprises. As part of this partnership, FinWise will also extend access to its Credit Enhanced Balance Sheet program to Backd, enhancing their financial services capabilities.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 4 analysts, the average target price for FinWise Bancorp (FINW, Financial) is $20.50 with a high estimate of $22.00 and a low estimate of $19.00. The average target implies an upside of 32.00% from the current price of $15.53. More detailed estimate data can be found on the FinWise Bancorp (FINW) Forecast page.
Based on the consensus recommendation from 4 brokerage firms, FinWise Bancorp's (FINW, Financial) average brokerage recommendation is currently 1.8, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for FinWise Bancorp (FINW, Financial) in one year is $12.91, suggesting a downside of 16.87% from the current price of $15.53. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the FinWise Bancorp (FINW) Summary page.
FINW Key Business Developments
Release Date: January 30, 2025
- Loan Originations: $1.3 billion in Q4 2024; $5 billion for fiscal year 2024, a 16% increase from $4.3 billion in 2023.
- Net Income: $2.8 million in Q4 2024; $0.20 per diluted common share.
- Full Year Earnings Per Share: $0.93 per diluted common share for 2024.
- Average Loan Balances: $522.2 million in Q4 2024, up from $492.9 million in Q3 2024.
- Net Interest Income: $15.5 million in Q4 2024, compared to $14.8 million in Q3 2024.
- Net Interest Margin: 10.0% in Q4 2024, up from 9.70% in Q3 2024.
- Noninterest Income: $5.6 million in Q4 2024, down from $6.1 million in Q3 2024.
- Operating Expenses: $13.6 million in Q4 2024, down from $14 million in Q3 2024.
- Efficiency Ratio: Improved to 64.2% in Q4 2024 from 67.5% in Q3 2024.
- Effective Tax Rate: 24.3% in Q4 2024, compared to 25.1% in Q3 2024.
- Provision for Credit Losses: $3.9 million in Q4 2024, up from $2.2 million in Q3 2024.
- Nonperforming Loan Balances: $36.4 million in Q4 2024, up from $30.6 million in Q3 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- FinWise Bancorp (FINW, Financial) reported a solid financial performance for the fourth quarter, with a rebound in originations from existing programs and stable revenue.
- The company remains well-capitalized, significantly above federal regulatory standards, which provides a strong foundation for future growth.
- FinWise Bancorp (FINW) successfully added four new lending programs, including credit enhancement and payments programs, which are expected to contribute to future growth.
- The company has invested heavily in compliance and risk management infrastructure, with approximately 38% of staff employed in these functions, ensuring robust regulatory compliance.
- FinWise Bancorp (FINW) achieved a 16% increase in loan originations for fiscal year 2024, reaching $5 billion, indicating strong growth momentum.
Negative Points
- The provision for credit losses increased to $3.9 million in Q4, up from $2.2 million in the previous quarter, primarily due to net charge-offs on non-guaranteed SBA loans.
- Nonperforming loan balances rose to $36.4 million this quarter, an increase from $30.6 million in the prior quarter, reflecting ongoing challenges in credit quality.
- The company experienced a seasonal deceleration in originations from private student lending programs, impacting overall loan growth.
- Net interest margin is expected to gradually compress over time due to a proactive strategy to reduce credit risk in the portfolio.
- A one-time $895,000 loss from calling higher-yielding brokered callable CDs negatively impacted the fourth quarter's miscellaneous income.
