FinWise Bancorp reported its financial results for the third quarter and nine months ended September 30, 2024, showing notable changes in revenue, profitability, and strategic initiatives compared to the previous fiscal period.

As of September 30, 2024, FinWise Bancorp's total assets increased to $683.0 million, up from $586.2 million at the end of 2023, reflecting a growth of $96.8 million. Total deposits rose significantly to $488.7 million, a 20.7% increase from $404.8 million. This growth was driven by a rise in noninterest-bearing demand deposits, which surged by 49.5% to $142.8 million. Shareholders' equity also saw an increase, reaching $170.4 million, up from $155.1 million, primarily due to net income of $9.9 million and the acquisition of additional equity interests in Business Funding Group, LLC.

In terms of revenue, interest income for the third quarter was $18.9 million, a 9.9% increase from $17.2 million in the same period last year. Net interest income rose slightly to $14.8 million, compared to $14.4 million in 2023. However, net income for the quarter decreased by 28.1% to $3.5 million, down from $4.8 million, while net income for the nine months fell to $9.9 million from $13.3 million, a decline of 25.2%. The decrease in profitability was attributed to a significant rise in non-interest expenses, which increased by 44.3% to $14.0 million for the quarter, driven by higher salaries, professional fees, and other operating costs.

The company’s net interest margin (NIM) also declined, reported at 9.70% for the third quarter, down from 11.77% in the prior year. This trend continued for the nine-month period, with NIM at 10.05%, compared to 12.11% in 2023. The increase in interest expense was noted, primarily due to changes in volume and rates.

Strategically, FinWise Bancorp launched new lending programs in partnership with various fintech companies during the nine months ended September 30, 2024. Additionally, the company completed the acquisition of a 10% membership interest in Business Funding Group, LLC, increasing its total ownership to 20%.

The allowance for credit losses (ACL) was reported at $13.0 million, with a provision for credit losses of $7.5 million for the nine months, down from $8.3 million in the previous year. The company noted an increase in nonperforming assets, which rose to $30.6 million, primarily due to loans in the SBA 7(a) portfolio moving to nonperforming status, attributed to high interest rates and a slowdown in consumer spending.

Overall, while FinWise Bancorp experienced growth in assets and deposits, profitability faced challenges due to rising expenses and a declining net interest margin.