Finwise Bancorp · NASDAQ:FINW
Finwise Bancorp — Investor Presentation (February 2024)
24 slides from Finwise Bancorp's investor presentation, Feb 26, 2024
Slide 1: Investor Presentation: Powering the Fintech Banking Evolution
Investor Presentation Powering the Fintech Banking Evolution February 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: Company Overview: Differentiated Business Model
Company Overview Differentiated Business Model • Fintech banking solutions provider with a diversified and profitable model with compelling growth opportunities • Compliance oversight and risk management-first culture, including regular dialogue with regulators • Disciplined underwriting and portfol
Slide 4: Our Culture - Compliance at the Core
Our Culture - Compliance at the Core 4 Consistent Investment in Personnel & Infrastructure Strengthened Regulatory Oversight Support to Service Providers (Fintechs) Note: FTEs shown as of the end of each respective quarter
Slide 5: Current Business Model by Line of Business
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 6: Strategic Program Lending - Program Diversification Has Improved
Strategic Program Lending - Program Diversification Has Improved Note: Strategic Program Lending concentration shown since 1Q22 to highlight longer-term pattern in recent years 6
Slide 7: Expansion Through Integrated Fintech Banking Solutions Offering
Expansion Through Integrated Fintech Banking Solutions Offering Current Business Model Business Model Post Expansion of Fintech Banking Solutions Offering1 1 Payments Hub and Bank Identification Number (BIN) Sponsorship are under development. Note: "Fintech Banking Solutions" is used to describe our
Slide 8: 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.) 8 2021 2026 Estimated U.S. Market for Platforms and Enablers1 (Total Revenue Across Payments, Lending, Banking,
Slide 9: Differentiators of Planned Fintech Banking Solutions Offering
Differentiators of Planned Fintech Banking Solutions Offering Payments Hub • 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 money in /out o
Slide 10: Potential Long-term Benefits from Planned Fintech Banking Solutions Offering
Potential Long-term Benefits from Planned Fintech Banking 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 Profitabilit
Slide 11: 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 12: Service Provider Onboarding - a Thorough Selection Process
Risk-based due diligence process involving 3rd-Party Oversight, BSA, Credit & ISO If Service Provider approved, FinWise team continues to negotiate, including defining potential product and terms Service Provider sent to Implementations Team and put into Scoping to fully define requirements of imple
Slide 13: Disciplined Expense Management While Investing for Growth
Disciplined Expense Management While Investing for Growth Increase in Total Non-interest Expense has been driven largely by business infrastructure spend, including headcount, to support growth and key strategic initiatives 13 Full Time Employees (FTEs) 140 158 162 Efficiency Ratio (Non-GAAP)2 45.6%
Slide 14: Selected Financial Information
Selected Financial Information 14
Slide 15: Solid Originations and Balance Sheet Growth
Solid Originations and Balance Sheet Growth 15 Note: Amounts are as of the end of each respective period
Slide 16: Growing TBVps, Strong Capital and Sustained Historical Profitability
Growing TBVps, Strong Capital and Sustained Historical Profitability 161See Appendix for more information and Non-GAAP reconciliation. Both Tangible Shareholder Equity to Tangible Assets and Tangible Book Value per Share (Non-GAAP) as of the end of each respective period. 2Tangible Shareholder Equit
Slide 17: Diversified Income Sources
Diversified Income Sources Net Interest Income / Net Interest Margin Non-interest Income 17 1 Other Non-interest Income includes all other non-interest income items, excluding Strategic Program Fees
Slide 18: Well Capitalized Above Regulatory Requirements
Well Capitalized Above Regulatory Requirements 181The Bank’s capital levels remain significantly above well-capitalized guidelines as of December 31, 2023. Well-capitalized regulatory requirement = 9% pursuant to the Community Bank Leverage Ratio framework adopted by the Bank in 2020. Total FinWise
Slide 19: Consistent Tangible Book Value per Share Growth
Consistent Tangible Book Value per Share Growth Tangible Book Value Per Share (Non-GAAP)1 19 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
Slide 20: Disciplined Underwriting Process
Disciplined Underwriting Process • Credit risk 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 • Remain well-reserved wit
Slide 21: Diversified and Lower Risk Loan Portfolio
Diversified and Lower Risk Loan Portfolio • Combined SBA Guaranteed and Strategic Program Loans (HFS) increased to a total of 42.7% of the portfolio as of 4Q23 vs 28.4% at 4Q22 ◦ Both of these products carry lower credit risk: SBA Guaranteed is guaranteed by the U.S Small Business Administration and
Slide 22: Appendix
\7 FINWISE Appendix
Slide 23: Non-GAAP Reconciliations
Non-GAAP Reconciliations 23 (1) Efficiency Ratio: This measure is not a measure recognized under United States generally accepted accounting principles, or GAAP, and is therefore considered to be a non-GAAP financial measure. See “Reconciliation of Non- GAAP to GAAP Financial Measures” for a reconci
Slide 24: Glossary of Terms Used
Glossary of Terms Used 24 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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