FinWise Bancorp

Good afternoon, and thank you for joining us today for FinWise Bankrupt's fourth quarter 2025 earnings conference call. Earlier today, we filed our earnings release and investor deck and posted them to our investor website at investors.finwisebankrupt.com. Today's conference call is being recorded and webcast on the company's investor website, as previously mentioned. 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, expectations, and beliefs, 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 including factors that may negatively impact them contained in the company's earnings press release and filings with the Securities and Exchange Commission. Hosting the call today are Kent Landvater, Chairman and CEO, Jim Noon, Bank CEO, and Bob Wallman, CFO. Kent, please go ahead.

Good afternoon, everyone. FinWise delivered a strong 2025 growing net income 26% and posting a steady fourth quarter that demonstrates how our multi-year investments are gradually translating into tangible, sustainable results. The meaningful progress we've made in expanding and diversifying our revenue streams underscores both the durability of our business model and the momentum behind our long-term strategy. Specifically, during the fourth quarter, we delivered healthy revenue growth driven by balanced contributions from both fee and spread income. Additionally, our disciplined approach to expense management further strengthened profitability and supported continued growth in tangible book value per share, reinforcing the long-term value we are delivering to shareholders. Loan originations totaled a solid $1.6 billion in the fourth quarter, exceeding our initial guidance of $1.4 billion. This brings full year 2025 originations to $6.1 billion, representing a healthy 22% year-over-year growth. Key drivers during the fourth quarter included strong originations from established partners and continued ramp in the maturation of programs launched in recent years. Partly offsetting this was the expected seasonal deceleration from our largest student lending partner. While quarterly loan originations will fluctuate with typical seasonality in certain quarters, we believe we have reached a higher and more sustainable level of quarterly production, supported by robust contributions from long-standing partners and newer relationships that continue to scale. We also experienced strong uptake of our credit-enhanced product, ending the quarter with balances of $118 million, exceeding both the $115 million outlook provided on our third quarter earnings call and our initial guidance of $50 to $100 million. This product is a core component of our lower-risk asset growth strategy, supported by a structure that requires FinTech partners to maintain a deposit account at FinWise against which charge-offs are recovered. Turning to our bin and payments business, although ramp-up has been more measured than we initially anticipated, we remain confident in the long-term value proposition. Integrating these capabilities under one roof enhances our ability to win new partners, expand cross-sell opportunities, and deepen strategic relationships over time. While strategic partnerships with a lending focus remain our most profitable relationships, We are generating increased interest by also offering BIN and payment solutions. For example, some clients use our award-winning payments optimizer, MoneyRails, to process salary deduction repayments on FINWISE-originated loans, while others are leveraging MoneyRails to fund transactions through RTP and FedNow, demonstrating the expanding utility and appeal of the platform. Ultimately, these ancillary services enable our partners to innovate faster, operate more efficiently, and compete more effectively, reinforcing FinWISE as a true strategic partner, not just a regulatory gateway. We are also pleased to share that DreamFi, a strategic program agreement we announced last quarter, has officially launched. DreamFi is a startup financial technology company that will provide financial products and services to underbanked communities. Overall, our pipeline remains healthy and we remain in active discussions with several additional prospects. As we've mentioned before, the pace of new agreements can appear lumpy and timing may fluctuate, particularly with larger strategic opportunities. That said, each strategic partnership we secure has the potential to create outsized value. Under this one-to-many framework, a single partnership can drive substantial growth in portfolio balances and revenue, underscoring the inherent scalability and strength of our platform. On the AI front, given the high cost and rapid pace of change associated with early stage AI development, A disciplined adoption approach remains the most effective strategy for FinWISE. While we have already been using AI in areas such as coding, quality assurance, and BSA AML, the advances in generative AI are opening new opportunities for efficiency and automation. We are actively exploring opportunities to broaden the deployment of these capabilities across a company to drive efficiency and long-term value. with a disciplined focus on safeguarding sensitive data through secure and controlled implementation. Lastly, while we will be disciplined in managing near-term performance, our priority remains building durable, long-term growth by pursuing opportunities that significantly enhance the company's future. We are confident in the outlook ahead and in our ability to deliver lasting value for our customers and shareholders. With that, let me turn the call over to Jim Noon, our bank CEO.

Thank you, Kent. I'll shift now to provide an update on our credit quality and our SBA business. Overall, credit trends remain stable, with performance aligning with our expectations, and we remain disciplined and proactive in managing the portfolio. On the SBA side, production pipelines remain healthy, secondary market premiums continue to be attractive, and we're executing operationally to support continued growth. Specifically during the quarter, we further refined our servicing and administrative standards, which resulted in accelerated classification of certain loans to non-performing status and earlier recognition of related charge-offs. As part of this refinement, we increased borrower thresholds required to qualify for a one-time short-term deferment. Management views these adjustments as a prudent, forward-looking enhancement to our risk management framework. Our portfolio continues to be strong and exhibits good performance. Quarterly net charge-offs were 6.7 million in Q4, compared to 3.1 million in the prior quarter. 1.5 million of the total NCOs were attributable to our credit-enhanced balance sheet program. However, these losses are guaranteed and FINWISE is reimbursed for any losses from the cash reserve each partner is required to maintain at FINWISE. Of the remaining $5.2 million in NCOs, $1.2 million was due to the updated servicing standards that we implemented in the quarter. Provision for loan losses were $17.7 million for the fourth quarter, compared to $12.8 million for the prior quarter. The increase was driven primarily by growth in the credit-enhanced loan portfolio. as well as higher net charge-offs resulting from our updated servicing standards, which led to the accelerated classification of non-performing loans and charge-offs. As a reminder, the provision for credit losses associated with the credit-enhanced loan portfolio is different from the core portfolio provision because it's fully offset by the recognition of future recoveries pursuant to the partner guarantee described as credit enhancement income in our non-interest income. This quarter, we included a new table in the earnings press release that breaks out the total provision between the core portfolio and the credit enhanced portfolio. Positively, during Q4, the net increase to our NPL balance was less than $1 million, bringing our total NPL balance to $43.7 million at the end of the quarter. This modest increase was mostly due to SBA 7A watch list and special mention loans migrating to classified status and compares to our guidance on our prior call that $10 to $12 million in balances could migrate to NPL during Q4. The lower than potential migration reflects the team's proactive efforts in disposing of collateral securing NPLs. Of the $43.7 million in total NPL balances, 24.2 million, or 55%, is guaranteed by the federal government, and 19.5 million is unguaranteed. Quarterly SBA 7 loan originations decreased quarter over quarter, primarily due to extended SBA processing delays resulting from staffing cuts at the SBA, with additional impact from the government shutdown. During the quarter, we took advantage of attractive secondary market premiums to increase sales of the guaranteed portion of our SBA loans, particularly after the government's reopening in November, which contributed to elevated gain on sale income. We will continue to follow our strategy of selling guaranteed portions of our SBA loans as long as market conditions remain favorable. Following the government's reopening in late November, the environment for SBA loan originations has normalized, with turnaround times returning to more typical levels. Notably, our SBA guaranteed balances and strategic program loans held for sale, both of which carry lower credit risk, collectively accounted for 34% of the total portfolio at the end of Q4, underscoring the lower risk composition of our loan book. I will now turn the call over to our CFO, Bob Wollman, to provide more detail on our financial results.