FinWise Bancorp

Greetings. Welcome to the FinWise Bancorp third quarter 2026 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. The conference will begin now.

Good afternoon and thank you for joining us today for FinWise Bancorp's third quarter 2026 earnings conference call. Earlier today, we filed our earnings release and investor deck and posted them to our investor website at investors.finwisebancorp.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 CEO Jim Noone, CFO Bob Wahlman, and Executive Chairman Kent Landvatter. Jim, please go ahead.

Good afternoon, everyone. Third quarter results demonstrate the tangible progress we have made in broadening our platform and building a more capital efficient sponsor bank. We originated $2.1 billion in loans, and we nearly doubled our credit enhanced balances to $146 million in the quarter. Even after the cost of those partner arrangements, net interest income rose 17% from the second quarter. We also recognized a one-time gain from our first acquisition transaction. Credit performance also improved during the quarter. Net charge-offs on loans without credit enhancement were $2.6 million in the quarter, well below the range of the last few quarters. Non-performing asset balances also decreased slightly quarter over quarter. With tangible book value up 9% over the past year, a leverage ratio of 18.1%, a strong pipeline of prospective partners, and continued share repurchases, We have the capital strength, teams, and operating environment to continue to execute. I'll now provide some additional context on the factors that drove our core performance during the quarter. First, loan originations increased to $2.1 billion, reflecting both the typical seasonal increase in our student lending program as well as strong organic growth from a credit-enhanced consumer lending program we launched in 2025. volume across the remainder of the portfolio was stable quarter over quarter. Second, credit enhanced balances grew to 146.2 million, driven by a meaningful pickup from a partner that we previously noted was slower to ramp during the first half of the year. For modeling purposes, please note that prior period credit enhanced balances have been recast to reflect the reclassification of the tallied credit card portfolio to discontinued operations. As a result, comparisons to previously reported amounts may differ. Long-term growth in credit enhanced balances will come from new partner additions and expanding the pipeline for this product remains a key area of focus and an important part of our long-term plans. I want to briefly walk through how we manage partner risk in the credit enhanced product. We rely first and foremost on the structure and strength of the underlying loans and then look to the FinTech partner. Under credit enhancement, the FinTech partner contractually agrees to cover credit losses on the loans and keeps a cash reserve at FinWise that we can draw on to recover against any charge-offs. Before any partner launches, they go through our full due diligence covering compliance, risk, cyber, controls and financial strength. They must then pass three credit tests. We first model the worst performing vintage. We then stress historical charge-offs by 50 and 100%. In each case, the portfolio must demonstrate an ability to replenish the required cash reserve. Finally, we review the partner's indemnity strength, including under the stress scenarios just mentioned. After launch, reserves are contractually required to be replenished weekly. We monitor the portfolio performance monthly and review updated charge-off and vintage analysis quarterly with our loan committee and board. We judge partner strength on existing capitalization, earnings, and resources, not on their ability to raise new capital. And lastly, Backup servicing ensures collections continue if a partner ceases operations. Returning to the key drivers of our third quarter performance, credit trends were positive during the quarter. Net charge-offs for non-credit enhanced loans declined to $2.6 million from $5.2 million in the prior quarter, primarily reflecting the resolution of several previously classified credits and a reduced number of accounts migrating to classified status. Non-performing loan balances decreased slightly quarter over quarter, from $37.7 million to $37.1 million, with approximately 48% of those balances at the end of Q3 guaranteed by the federal government. As part of our effort to manage risk tolerance levels and streamline our balance sheet, The bank is actively working on a securitization for a portion of our SBA unguaranteed balances. We anticipate transferring these balances at par with a credit enhancement for securitization investors in the form of our retained interest. While we are encouraged by improved credit performance, we do not expect the unusually favorable credit results reported this quarter to be indicative of a new run rate in the near term. Bob will provide additional context around our expectations for net charge-offs and classified asset migration in his remarks. Overall, we remain very comfortable with the quality of our portfolio. Credit performance across the portfolio remains healthy and generally in line with our expectations. Our pipeline of FinTech partners remains very strong, and we believe we are entering a favorable period for new partnership growth over the next 12 to 24 months. across lending, cards, and payments. As we've discussed previously, we expect to announce new partners towards the end of this year, and importantly, the opportunities we are pursuing today are larger, more diverse, and often have greater long-term revenue potential than those we were evaluating just a few years ago. Next, FinWise and Upstart have mutually agreed to end our sponsorship relationship. effective September 30, 2026. Upstart contributed an immaterial amount of origination volume and an immaterial amount of revenue in the third quarter. And we continue to have no meaningful credit exposure to Upstart loans on our balance sheet. This termination is not expected to have any material impact on our financial condition or results of operations. Upstart has been a great partner for us since 2019. We are proud of the customers we have served with them, and we wish them the best in their future plans. On a related note, I also want to touch on the increase in FinTech charter activity under the current administration, including both de novo and bank merger applications. Our strategy to diversify partners and lines of business Thank you for joining us today. Broad product capabilities, regulatory and compliance infrastructure, and strong pipeline position us well to manage through any potential changes over time. We value all of our partnerships and remain focused on continuing to diversify revenue streams across lending, cards, and payments. In closing, this quarter's results reinforce our conviction in the company's long-term trajectory and the significant opportunity that exists. The progress we are making across lending, cards and payments, coupled with a growing pipeline of increasingly meaningful partners, supports our confidence in the future. We remain focused on disciplined execution, continued improvement in credit quality and building long-term shareholder value. I will now turn the call over to our CFO, Bob Wahlman, to provide more detail on our financial results.