Finwise Bancorp · NASDAQ:FINW
Finwise Bancorp — Investor Presentation (November 2024)
27 slides from Finwise Bancorp's investor presentation, Nov 12, 2024
Slide 1: Fintech Banking and Payments Solutions Investor Presentation
(7 FINWISE BAN dR Fintech Banking and Payments Solutions Investor Presentation November 2024
Slide 2: Disclaimers: Safe Harbor Statement
Disclaimers "Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995 This presentation contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect the curre
Slide 3: FinWise Overview - 2024 is an Expansion Year
FinWise Overview - 2024 is an Expansion Year Differentiated Business Model • Trusted banking and payments solutions provider to fintechs • Resilient and profitable model with compelling growth opportunities • Compliance oversight and risk management-first culture • Lower risk loan portfolio with dis
Slide 4: Current Business Model and 3Q24 Gross Revenue Contribution
Equipment Financing Balance Sheet Strategy: • Originate for Investment • Originations through vendor finance, additional third-party originators, direct channels • Diversify balance sheet Strategic Program Lending Balance Sheet Strategy: • Mostly originate to sell • Interest Income HFI & HFS • Minim
Slide 5: Strategic Program Lending - Program Diversification Has Improved
Strategic Program Lending - Program Diversification Has Improved Note: Marketplace Lending concentration shown since 1Q22 to highlight longer-term pattern in recent years 5
Slide 6: Our Culture - Strong Compliance and Risk Management
Our Culture - Strong Compliance and Risk Management 6 Consistent Investment in Personnel & Infrastructure Provides Regulatory Oversight Support to Fintechs Note: FTEs shown as of the end of each respective quarter; does not include FTEs in Governance and Operations. 39% of FTEs in IT, Compliance, Ri
Slide 7: TBV Growth Has Been a Win for Shareholders
TBV Growth Has Been a Win for Shareholders Tangible Book Value Per Share (Non-GAAP)1 7 1 See Appendix at end of presentation for full description of metric and Non-GAAP reconciliation. Amounts are as of the end of each respective period 2 Bank Peers defined as: Oregon Bancorp, Inc., Quaint Oak Banco
Slide 8: 2024 Expansion: Fintech Banking and Payments Solutions Offering
2024 Expansion: Fintech Banking and Payments Solutions Offering Current Business Model Business Model Post Expansion of Fintech Banking & Payments Solutions Offering1 1 Payments (MoneyRailsTM) and Bank Identification Number (BIN) Sponsorship are under development. Note: "Fintech Banking Solutions" i
Slide 9: Sizable Addressable Market
Sizable Addressable Market 1 Source: Matt Harris, Blake Adams, Adam Davis, and Jeff Tijsse, "Embedded Finance: What It Takes to Prosper in the New Value Chain", 2022 (Bain & Company, Inc.) 9 2021 2026 Estimated U.S. Market for Platforms and Enablers1 (Total Revenue Across Payments, Lending, Banking,
Slide 10: Potential Long-term Benefits from Fintech Banking and Payments Solutions Offering
Potential Long-term Benefits from Fintech Banking and Payments Solutions Offering Revenue Expands and diversifies potential sources of revenue Deposits Helps diversify deposit composition and reduce cost of funds through relationship-banking Credit Quality Increases percentage of Prime loans Profita
Slide 11: Differentiators of Fintech Banking and Payments Solutions Offering
Differentiators of Fintech Banking and Payments Solutions Offering Payments (MoneyRailsTM) • Ease of Use. Brings multiple payments types under one application. Ability to see all payments through a single source • Payment Control. Allows service providers (fintechs) to embed multiple options to move
Slide 12: Payments (MoneyRails) Platform - The Value of a Ledger
Payments (MoneyRailsTM) Platform - The Value of a Ledger 12 *Payments (MoneyRailsTM) and Bank Identification Number (BIN) Sponsorship are under development Secure, Efficient API-driven Solutions for Fintechs and Commercial Customers • The Ledger provides a strong foundation with controls, standing i
Slide 13: Payments (MoneyRails) Benefits to Fintechs We Support
Payments (MoneyRailsTM) Benefits to Fintechs We Support 13 *Payments (MoneyRailsTM) and Bank Identification Number (BIN) Sponsorship are under development A Centralized, Secure Platform and Ledger that Facilitates Movement of Money
Slide 14: Components of Model Enable Scaling and Regulatory Oversight
Components of Model Enable Scaling and Regulatory Oversight Our Technology:Product: Enterprise Data Warehouse -Proprietary and rigorous regulatory process -FinWise controls the data internally 1) Strategic Program Lending Credit Engine Lending programs, including closed and open-ended consumer and c
Slide 15: Representative Fintech Onboarding - a Thorough Selection Process
Risk-based due diligence process involving 3rd-Party Oversight, BSA, Credit & ISO If Fintech is approved, FinWise team continues to negotiate, including defining potential product and terms Fintech is sent to Implementations Team and put into Scoping to fully define requirements of implementation Pi
Slide 16: Disciplined Expense Management While Investing for Growth
Disciplined Expense Management While Investing for Growth Total Non-interest expense in 3Q24 included a one time catch-up in bonus accrual expense of approximately $400,000 to reflect updated performance award estimates. Longer-term increase in Total Non-interest Expense has been driven largely by b
Slide 17: Disciplined Underwriting Process Mitigates Risk
Disciplined Underwriting Process Mitigates Risk... • Credit risk is managed through combination of policy, data and pricing • Disciplined underwriting process and well collateralized portfolio has helped mitigate net charge-offs, even as credit quality normalized due to higher rate environment • Rem
Slide 18: Diversified and Lower Risk Loan Portfolio
...and Leads to a Diversified and Lower Risk Loan Portfolio • Combined SBA Guaranteed and Strategic Program Loans (HFS) increased to a total of 46.0% of the portfolio as of 3Q24 vs 41.3% as of 3Q23 ◦ Both of these products carry lower credit risk: SBA Guaranteed loans are guaranteed by the U.S Small
Slide 19: Industry Recognition as a Top-Performing Bank
Industry Recognition as a Top-Performing Bank 19 FinWise Bancorp ranked in top 3 on American Banker's annual list of Top-Performing Publicly Traded Banks with under $2 billion of assets (based on 3-year average ROAE ending 12/31/23) 2022 2023 2022 2023 20242024 Source: https://www.independentbanker.
Slide 20: Selected Financial Information
Selected Financial Information 20
Slide 21: Solid Originations and Significant Balance Sheet Growth
Solid Originations and Significant Balance Sheet Growth 21 Note: Amounts are as of the end of each respective period
Slide 22: Growing TBVps and Sustained Historical Profitability
Growing TBVps and Sustained Historical Profitability 221See Appendix for more information and Non-GAAP reconciliation. Both Tangible Book Value per Share (Non-GAAP) and Tangible Shareholder Equity to Tangible Assets as of the end of each respective period. 2Tangible Shareholder Equity to Tangible As
Slide 23: Diversified Income Sources
Diversified Income Sources 23 1 Other Non-interest Income includes all other non-interest income items, excluding Strategic Program Fees. Note: Revenue diversification is expected to increase with the build-out of Payments (MoneyRailsTM) and BIN Sponsorship Net Interest Income (NII) in 3Q24 was impa
Slide 24: Well Capitalized Above Regulatory Requirements
Well Capitalized Above Regulatory Requirements 24 1The Bank’s capital levels remain significantly above well-capitalized guidelines as of September 30, 2024. Total FinWise Bancorp Shareholder’s Equity to Total Assets and Leverage Ratio – Bank Level as of the end of each respective period. Well-capit
Slide 25: Appendix
\7 FINWISE Appendix
Slide 26: Non-GAAP Reconciliations
Non-GAAP Reconciliations 26 (1) Tangible shareholders’ equity: This measure is not a measure recognized under GAAP and is therefore considered to be a non-GAAP financial measure. Tangible shareholders’ equity is defined as total shareholders’ equity less goodwill and other intangible assets. The mos
Slide 27: Glossary of Terms Used
Glossary of Terms Used 27 ACH (The Automated Clearing House). Electronic funds-transfer system that facilitates payments in the U.S. and internationally. The ACH is run by Nacha. API (Application Programming Interface). Set of defined rules that enable different applications to communicate with each
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