FinWise Bancorp

Greetings and welcome to the FinWISE Bancorp third 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. As a reminder, this conference is being recorded. I would now like to turn the conference over to management to begin.

Good afternoon, and thank you for joining us today for FinWise Bankrupt's third quarter 2022 conference call. In addition to this call, we issued an earnings press release earlier this afternoon and posted it to the investor relations section of our website at investors.finwisebankrupt.com. Today's conference call is being recorded and webcast on the company's website, investors.finwisebankrupt.com. On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ from those discussed today. Forward-looking statements represent management's current estimates, and FinWise Bancorp assumes no obligation to update any forward-looking statements in the future. We encourage listeners to review the more detailed discussions related to these forward-looking statements contained in the company's earnings press release and filings with the Securities and Exchange Commission. Posting the call today are Mr. Ken 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, and thank you for joining us on our third quarter 2022 earnings conference call. Our differentiated business model allowed FinWISE to generate solid top line results during the third quarter, even as we faced an economic environment that is becoming increasingly challenging. We remain confident that our business model lends itself to flexibility in both weakening and strengthening economic conditions, and we remain exceptionally proud of our team's unwavering dedication to providing our clients and customers with best-in-class value and service, particularly during more challenging market conditions. During the third quarter, we generated total revenue of $20.3 million, led by loan originations of $1.5 billion. We also bought back 20,000 shares for a total of approximately $0.2 million as part of our previously announced share repurchase program. The company's tangible book value per common share continued to grow, increasing 32% year-over-year to $10.44 per share at the end of the third quarter. The overall environment for loan originations has decelerated this year across the industry, and FinWISE is not immune, even as the company's relationships with existing strategic platforms and interest from potential new platforms remain strong. Importantly, going forward, we expect to retain the guaranteed portion of certain SBA production, as gain-on-sell premiums have decreased and variable loan rates have increased. We expect to keep more of the guaranteed portion of certain SBA loans on the balance sheet to benefit the company through stronger government-guaranteed held-for-investment loan growth and a higher recurring stream of interest income. Expenses remained well-managed in the quarter, During Q3, the efficiency ratio improved to 42.3% from 52% in the previous quarter. As we have publicly discussed, while our efficiency ratio is likely to increase longer term as we invest for growth, near term we will continue to be prudent with expenses in light of tougher economic conditions. We also remain pleased with the credit quality performance of our portfolio, which continues to move in line with our expectations for gradual industry-wide normalization of credit to pre-pandemic market conditions. The company did not have any non-performing loans for the current quarter compared to non-performing loans to total loans of 0.3% for the previous quarter and 0.3% for the year-ago quarter. Certainly, if the U.S. economy were to experience further deterioration from current levels, the overall industry could experience faster than anticipated credit quality normalization. However, as we noted during the past quarter, we slowed strategic program retention to better assess and manage economic risks, and we remain confident in our ability to sustain sound credit quality through varying credit cycles given our prudent risk management approach and tight underwriting standards. Additionally, as we have commented before, we have not adjusted our lending standards to reach for growth. We also remain significantly above well-capitalized guidelines with a bank leverage ratio of 24.9%. Overall, while we manage the company for the long term, we acknowledge the risk of further economic deterioration given headwinds, including inflation and rapidly rising interest rates. However, given our cautious view on the direction of the economy, we have been proactively preparing for such a scenario in order to navigate a tougher environment as best as possible while continuing to serve our clients. We will also continue to execute on items that we can control, including risk management, underwriting, and expenses. And by doing this, we believe we will be able to capitalize on growth opportunities that emerge once the market environment stabilizes. With that, I would now like to turn the call over to our CFO, Javis Jacobson, who will provide you with more detail on our financial results.