FinWise Bancorp

Greetings. Welcome to the FinWISE Bancorp First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host.

Thank you, operator. Good afternoon and welcome to Finwise Bankrupt's first quarter 2022 earnings call. The earnings press release is available on the investor relations section of the company's website at investors.finwisebankrupt.com. I would like to remind you that certain statements made in the course of this call are not based on historical information and may constitute forward-looking statements covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. I refer you to the company's filings made with the SEC, including its earnings press release issued earlier today. for a more detailed discussion of the risks and factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. The company undertakes no duty to update any forward-looking statements that may be made during the course of this call. Additionally, certain non-GAAP financial measures will be discussed on this conference call. Our presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Reconciliation to these non-GAAP financial measures to the most comparable measures prepared in accordance with GAAP can be accessed through our filings with the SEC, including our earnings press release issued earlier today at www.sec.gov. Posting the call today are Mr. Kent Landvatter, CEO and President of FinWise Bancorp, and Mr. Javis Jacobson, Chief Financial Officer of FinWise Bancorp. With that, I will turn the call over to Mr. Landvatter.

Good afternoon, everyone. FinWise delivered solid results for the first quarter of 2022, including net income of $10.3 million, or 76 cents per diluted share, along with industry-leading profitability. Our strong financial performance during the quarter was driven by robust loan originations of $2.5 billion, combined with solid operating efficiency. We also had an increase in non-interest income due to higher strategic program fees, which are generated when we originate loans, as well as higher gain on sale of loans resulting from a higher number of loans sold. Credit quality also remained very strong as non-performing loans were 0.2% of total loans at the end of the first quarter, unchanged compared to the previous quarter. Lastly, with a bank leverage ratio of 19.3%, we remained significantly above well-capitalized guidelines. Overall, these impressive results continue to validate our differentiated FinTech lending model and value proposition. I'd like to take a few minutes to illustrate several aspects of our business model, which should add clarity in understanding our credit risk profile. A key driver to ongoing loan growth for FinWISE lies in accelerating volumes from existing strategic partners, sourcing of new loan origination platforms, as well as our exceptional ability to efficiently scale through our robust platform. Specifically, Of the $272.6 million in total loans in March 31, 2022, Strategic Program Hailed for Sale loans comprised $73.8 million, or 27.1% of our total loans. We generally retain Strategic Program loans for several days after we originate them, after which we may sell the loan receivables or hold loans to the Strategic Program platform or other investors. The terms governing our strategic programs generally require each strategic program platform to establish a reserve account with the bank, which partially protects the bank in the event a purchaser of loans receivable originated through our strategic programs cannot meet its contractual obligation to purchase the loans we choose not to retain. Further, of the $272.6 million in total loans at March 31, 2022, The guaranteed portion of the SBA 7 loans comprised $53.2 million or 19.5% of our total loans. The bank typically sells the SBA guaranteed portion of the loans we originate at a premium in the secondary market while retaining all servicing rights on the loan sold and the entire unguaranteed portion. The strategic program held for investment loan balance at March 31, was $28.0 million, or 10.3% of total period and loans receivable. Beginning in 2018, we began selectively retaining a portion of the loans or receivables for investment based on our analytics platform and the capacity and appetite of the bank. Importantly, while constituting only 10.3% of period and loans receivable at March 31, 2022, These strategic programs provide us with access to strong risk-adjusted yields on held for investment loans, for which we are also well-reserved. Moreover, strategic programs held for investment loans are about evenly distributed between loans with annual interest rates above and below 36% at March 31, 2022. Overall, while we acknowledge a higher level of economic uncertainty and we can't control macroeconomic factories, we remain focused on what we can control and believe that our business model and prudent risk management should allow us to sustain our strengths through different cycles. With that, I would now like to turn the call over to our Chief Financial Officer, Javis Jacobson, who will discuss our financial results for the quarter in more detail.