Finwise Bancorp

Previous wording

There have been no material changes during the six months ended June 30, 2025 to the methods we used and judgments we made relating to critical accounting estimates from those disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2024 Form 10-K.

Current wording

There have been no material changes during the nine months ended September 30, 2025 to the methods we used and judgments we made relating to critical accounting estimates from those disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2024 Form 10-K.

Previous wording

This executive summary provides certain 2025 and 2024 financial highlights from the discussion and analysis that follows:

Current wording

This executive summary provides certain 2025 and 2024 consolidated financial highlights from the discussion and analysis that follows:

Previous wording

•For the three months ended June 30, 2025, originations increased to $1.5 billion from $1.2 billion when compared to the three months ended June 30, 2024. For the six months ended June 30, 2025, originations increased to $2.7 billion from $2.3 billion when compared to the six months ended June 30, 2024. New Strategic Programs and organic growth through existing programs contributed to the increase in loan originations.

Current wording

•For the three months ended September 30, 2025, originations increased to $1.8 billion from $1.4 billion when compared to the three months ended September 30, 2024. For the nine months ended September 30, 2025, originations increased to $4.5 billion from $3.7 billion when compared to the nine months ended September 30, 2024. New strategic programs and organic growth through certain established strategic programs contributed to the increase in loan originations.

Previous wording

•Net interest margin (“NIM”) was 7.81% for the three months ended June 30, 2025, compared to 10.31% for the three months ended June 30, 2024. NIM was 8.03% for the six months ended June 30, 2025, compared to 10.19% for the six months ended June 30, 2024. NIM is impacted by income earned from interest-earning assets and interest costs incurred on interest-bearing liabilities.

Current wording

•Net interest margin (“NIM”) was 9.01% for the three months ended September 30, 2025, compared to 9.70% for the three months ended September 30, 2024. NIM was 8.37% for the nine months ended September 30, 2025, compared to 10.05% for the nine months ended September 30, 2024. NIM is impacted by income earned from interest-earning assets and interest costs incurred on interest-bearing liabilities.

Previous wording

•FinWise generated $4.1 million and $3.2 million of net income for the three months ended June 30, 2025 and 2024, respectively, and $7.3 million and $6.5 million of net income for the six months ended June 30, 2025 and 2024, respectively. Net income increased as FinWise invested in expansion of its product offerings and supporting business infrastructure.

Current wording

•We generated $4.9 million and $3.5 million of net income for the three months ended September 30, 2025 and 2024, respectively, and $12.2 million and $9.9 million of net income for the nine months ended September 30, 2025 and 2024, respectively. Net income increased as we benefited from the past investment in expansion of our product offerings.

Previous wording

•Total assets increased by $96.5 million to $842.5 million as of June 30, 2025 compared to December 31, 2024, principally in loans and investment securities. We believe our strong capital levels support our current and planned growth strategy.

Current wording

•Total assets increased by $154.0 million to $899.9 million as of September 30, 2025 compared to December 31, 2024, principally in loans held-for-sale and loans held-for-investment. We believe our strong capital levels support our current and planned growth strategy.

Previous wording

Net interest income increased for the three months ended June 30, 2025, compared to the same period in 2024 primarily due to an increase in average interest-earning assets of $186.3 million, partially offset by lower yields on interest-earning assets, an increase in the average interest-bearing liabilities of $174.6 million and an increase in interest reversed on loans migrating to nonaccrual status.

Current wording

Net interest income increased for the nine months ended September 30, 2025, compared to the same period in 2024 primarily due to an increase in average interest-earning assets of $183.4 million, partially offset by lower yields on interest-earning assets, and an increase in the average interest-bearing liabilities of $150.9 million mainly attributable to the increase in brokered deposits used to fund our loan growth.

Previous wording

NIM decreased to 7.81% for the three months ended June 30, 2025 from 10.31% for the three months ended June 30, 2024 and decreased to 8.03% for the six months ended June 30, 2025 from 10.19% for the six months ended June 30, 2024 primarily attributable to the repricing of our variable rate loan portfolio as interest rates have declined during the period, our strategy to reduce the average credit risk in the loan portfolio by increasing our investment in higher quality but lower yielding loans and an increase in interest reversed on loans migrating to nonaccrual status.

Current wording

NIM decreased to 9.01% for the three months ended September 30, 2025 from 9.70% for the three months ended September 30, 2024 and decreased to 8.37% for the nine months ended September 30, 2025 from 10.05% for the nine months ended September 30, 2024 primarily attributable to the Company’s strategy to reduce the average credit risk in the loan portfolio by increasing its investment in higher quality but lower yielding loans which was offset by the growth in the credit enhanced portfolio of $40.7 million.

Previous wording

The increase in our provision for credit losses for the three and six months ended June 30, 2025, compared to the same periods in 2024, resulted primarily from growth of the Strategic Program loans held-for-investment, including credit enhanced loans, and owner occupied commercial real estate and higher net charge-offs offset in part by a change in qualitative factors for certain low risk segments of the owner occupied commercial real estate portfolio..

Current wording

The increase in our provision for credit losses for the three and nine months ended September 30, 2025, compared to the same periods in 2024, resulted primarily from growth of the credit enhanced loan portfolio as well as higher net charge-offs.

Previous wording

Our provision for income taxes for the three and six months ended June 30, 2025 and 2024 resulted in an effective income tax rate of 24.5%, 23.9%, 26.1% and 25.2%, respectively. The effective tax rate differed from the federal statutory rate of 21.0% for the three and six months ended June 30, 2025 due primarily to state income tax provisions and higher estimated disallowed compensation estimates.

Current wording

Our provision for income taxes for the three and nine months ended September 30, 2025 and 2024 resulted in an effective income tax rate of 23.7%, 25.1%, 25.2% and 25.2%, respectively. The effective tax rate differed from the federal statutory rate of 21.0% for the three and nine months ended September 30, 2025 principally due to state taxes and an increase in permanent differences particularly due to non-deductible compensation under Section 162(m) of the Internal Revenue Code as well as changes in deferred tax assets and liabilities related to restricted stock, increased allowances for loan losses, accrued bonuses, and qualified tax leases.

Previous wording

The changes in net income for the three and six months ended June 30, 2025, compared to the same periods in 2024, were primarily the result of the factors discussed above.

Current wording

The changes in net income for the three and nine months ended September 30, 2025, compared to the same periods in 2024, were primarily the result of the factors discussed in the foregoing sections.

Previous wording

The decrease in interest-bearing deposits in other banks from December 31, 2024 to June 30, 2025, was primarily due to funding our Strategic Program loans held-for-sale portfolio. Aside from minimal balances held with our correspondent banks, the majority of our interest-bearing deposits are held at the Federal Reserve.

Current wording

The decrease in interest-bearing deposits in other banks from December 31, 2024 to September 30, 2025, was primarily due to normal operating activities. Aside from minimal balances held with our correspondent banks, the majority of our interest-bearing deposits are held at the Federal Reserve.

Previous wording

At June 30, 2025, we had a total of nineteen securities in an unrealized loss position, consisting of one U.S. Treasury, eight collateralized mortgage obligations and ten mortgage-backed securities. At December 31, 2024, we had a total of twenty-two securities in an unrealized loss position, consisting of four U.S. Treasuries, eight collateralized mortgage obligations and ten mortgage-backed securities.

Current wording

At September 30, 2025, we had a total of sixteen securities in an unrealized loss position, consisting of seven collateralized mortgage obligations and nine mortgage-backed securities. At December 31, 2024, we had a total of twenty-two securities in an unrealized loss position, consisting of four U.S. Treasuries, eight collateralized mortgage obligations and ten mortgage-backed securities.

Previous wording

Our Strategic Program loans held-for-sale increased $55.7 million as of June 30, 2025 compared to December 31, 2024, primarily as a result of greater hold periods for new originations for certain programs.

Current wording

Our Strategic Program loans held-for-sale increased $65.1 million as of September 30, 2025 compared to December 31, 2024, primarily as a result of greater hold periods for new originations for certain programs.

Previous wording

(1)SBA loans as of June 30, 2025 and December 31, 2024 include $144.3 million and $158.7 million, respectively, of SBA 7(a) loan balances that are guaranteed by the SBA.

Current wording

(1)SBA loans as of September 30, 2025 and December 31, 2024 include $132.2 million and $158.7 million, respectively, of SBA 7(a) loan balances that are guaranteed by the SBA.

Previous wording

As of June 30, 2025 and December 31, 2024, we had total SBA 7(a) loans of $246.9 million and $255.1 million, respectively, representing 46.6% and 54.8% of our total loans held-for-investment, respectively. Loans are sourced primarily through our referral relationship with BFG. Although BFG actively markets throughout the United States, we have developed a lending presence in the New York and New Jersey geographies due to its physical location in New York. The maximum SBA 7(a) loan amount is $5 million. Underwriting is generally based on commercial credit metrics where the primary repayment source is borrower cash flow, secondary is personal guarantor cash flow and tertiary is the sale of collateral pledged. These loans may be secured by commercial and residential mortgages as well as liens on business assets. In addition to typical underwriting metrics, we review the nature of the business, use of proceeds, length of time in business and management experience to help us target loans that we believe have lower credit risk. The SBA 7(a) program generally provides 50%, 75%, 85% and 90% guarantees for eligible SBA 7(a) loans. The guaranty is conditional and covers a portion of the risk of payment default by the borrower, but not the risk of improper underwriting, closing or servicing by the lender. As such, prudent underwriting, closing and servicing processes are essential to effective utilization of the SBA 7(a) program. Historically, we have generally sold the SBA-guaranteed portion (typically 75% of the principal balance) of a majority of the loans we originate at a premium in the secondary market while retaining all servicing rights and the unguaranteed portion; however, beginning in 2020, we made the decision to drive interest income by retaining a larger amount of the guaranteed portion of these loans. In light of suppressed gain-on-sale premiums and increasing variable loan rates during 2023, we retained on our balance sheet a greater percentage of the guaranteed portion of certain SBA loans that we originated than we have historically, which we believe will benefit us through stronger government guaranteed held-for-investment loan growth and an increased recurring stream of interest income and partially offset the decline in gain-on-sale revenue. During the third quarter of 2024 and considering the wider spreads on sale of SBA loans available, FinWise resumed selling limited amounts of SBA loans.

Current wording

As of September 30, 2025 and December 31, 2024, we had total SBA 7(a) loans of $240.1 million and $255.1 million, respectively, representing 42.3% and 54.8% of our total loans held-for-investment, respectively. Loans are sourced primarily through our referral relationship with BFG. Although BFG actively markets throughout the United States, we have developed a lending presence in the New York and New Jersey geographies due to its physical location in New York. The maximum SBA 7(a) loan amount is $5 million. Underwriting is generally based on commercial credit metrics where the primary repayment source is borrower cash flow, secondary is personal guarantor cash flow and tertiary is the sale of collateral pledged. These loans may be secured by commercial and residential mortgages as well as liens on business assets. In addition to typical underwriting metrics, we review the nature of the business, use of proceeds, length of time in business and management experience to help us target loans that we believe have lower credit risk. The SBA 7(a) program generally provides 50%, 75%, 85% and 90% guarantees for eligible SBA 7(a) loans. The guaranty is conditional and covers a portion of the risk of payment default by the borrower, but not the risk of improper underwriting, closing or servicing by the lender. As such, prudent underwriting, closing and servicing processes are essential to effective utilization of the SBA 7(a) program. Historically, we have generally sold the SBA-guaranteed portion (typically 75% of the principal balance) of a majority of the loans we originate at a premium in the secondary market while retaining all servicing rights and the unguaranteed portion; however, beginning in 2020, we made the decision to drive interest income by retaining a larger amount of the guaranteed portion of these loans. In light of suppressed gain-on-sale premiums and increasing variable loan rates during 2023, we retained on our balance sheet a greater percentage of the guaranteed portion of certain SBA loans that we originated than we have historically, which we believe will benefit us through stronger government guaranteed held-for-investment loan growth and an increased recurring stream of interest income and partially offset the decline in gain-on-sale revenue. During the third quarter of 2024 and considering the wider spreads on sale of SBA loans available, FinWise resumed selling limited amounts of SBA loans.

Previous wording

As of June 30, 2025 and December 31, 2024, we had total commercial leases of $89.0 million and $70.2 million, respectively, representing 16.8% and 15.1% of our total loans held-for-investment, respectively. Underwriting for smaller credit requests from customers is generally based on an internal credit scorecard, incorporating several customer and structure attributes including: severity and aging of delinquency; number of credit inquiries; loan-to-value ratio; term; and payment-to-income ratio. We periodically update our underwriting scorecard, which can have an impact on our credit tier scoring. Underwriting for larger credit requests from customers is generally based on commercial credit metrics where the primary repayment source considered is borrower cash flow, secondary is personal guarantor cash flow (when applicable) and tertiary is the sale of collateral pledged. The nature of the business, use of proceeds, length of time in business, management experience, repayment ability, credit history, ratio calculations and assessment of collateral adequacy are also underwriting considerations. These leases are generally secured by liens on business assets leased or purchased with Company funds. Historically, we have retained these leases on our balance sheet for investment; however, we may sell leases to certain purchasers from time to time.

Current wording

As of September 30, 2025 and December 31, 2024, we had total commercial leases of $90.4 million and $70.2 million, respectively, representing 15.9% and 15.1% of our total loans held-for-investment, respectively. Underwriting for smaller credit requests from customers is generally based on an internal credit scorecard, incorporating several customer and structure attributes including: severity and aging of delinquency; number of credit inquiries; loan-to-value ratio; term; and payment-to-income ratio. We periodically update our underwriting scorecard, which can have an impact on our credit tier scoring. Underwriting for larger credit requests from customers is generally based on commercial credit metrics where the primary repayment source considered is borrower cash flow, secondary is personal guarantor cash flow (when applicable) and tertiary is the sale of collateral pledged. The nature of the business, use of proceeds, length of time in business, management experience, repayment ability, credit history, ratio calculations and assessment of collateral adequacy are also underwriting considerations. These leases are generally secured by liens on business assets leased or purchased with Company funds. Historically, we have retained these leases on our balance sheet for investment; however, we may sell leases to certain purchasers from time to time.

Previous wording

Commercial non-real estate loans consist of loans and leases made to commercial enterprises that are not secured by real estate. As of June 30, 2025 and December 31, 2024, we had total commercial non-real estate loans of $5.5 million and $3.7 million, respectively, representing 1.0% and 0.8% of our total loans held-for-investment, respectively. Any loan, lease, line of credit, or letter of credit (including any unfunded commitments) and any interest obtained in such loans made by another lender to individuals, sole proprietorships, partnerships, corporations, or other business enterprises for commercial, industrial, agricultural, or professional purposes, not secured by real estate, but not for personal expenditure purposes are included in this category. For example, commercial vehicle term loans and commercial working capital term loans are included in this product loan category. Underwriting is generally based on commercial credit metrics where the primary repayment source is borrower cash flow, secondary is personal guarantor cash flow (when applicable) and tertiary is the sale of collateral pledged. The nature of the business, use of proceeds, length of time in business, management experience, repayment ability, credit history, ratio calculations and assessment of collateral adequacy are all considerations. These loans are generally secured by liens on business assets. Historically, we have retained these loans on our balance sheet for investment.

Current wording

Commercial non-real estate loans consist of loans and leases made to commercial enterprises that are not secured by real estate. As of September 30, 2025 and December 31, 2024, we had total commercial non-real estate loans of $4.8 million and $3.7 million, respectively, representing 0.9% and 0.8% of our total loans held-for-investment, respectively. Any loan, lease, line of credit, or letter of credit (including any unfunded commitments) and any interest obtained in such loans made by another lender to individuals, sole proprietorships, partnerships, corporations, or other business enterprises for commercial, industrial, agricultural, or professional purposes, not secured by real estate, but not for personal expenditure purposes are included in this category. For example, commercial vehicle term loans and commercial working capital term loans are included in this product loan category. Underwriting is generally based on commercial credit metrics where the primary repayment source is borrower cash flow, secondary is personal guarantor cash flow (when applicable) and tertiary is the sale of collateral pledged. The nature of the business, use of proceeds, length of time in business, management experience, repayment ability, credit history, ratio calculations and assessment of collateral adequacy are all considerations. These loans are generally secured by liens on business assets. Historically, we have retained these loans on our balance sheet for investment.

Previous wording

Residential real estate loans include construction, lot and land development loans that are for the purpose of acquisition and development of property to be improved through the construction of residential buildings, and loans secured by other residential real estate. As of June 30, 2025 and December 31, 2024, we had total residential real estate loans of $54.1 million and $51.6 million, respectively, representing 10.2% and 11.1% of our total loans held-for-investment, respectively. Construction loans are usually paid off through the conversion to permanent financing from third-party lending institutions. Lot loans may be paid off as the borrower converts to a construction loan. At the completion of the construction project, if the loan is converted to permanent financing by us or if scheduled loan amortization begins, it is then reclassified from construction to single-family dwelling. Underwriting of construction and development loans typically includes analysis of the general market conditions associated with the area and type of project being funded in addition to the borrower’s financial condition and ability to meet the required debt obligation. These loans are generally secured by mortgages for residential property located primarily in the Salt Lake City, Utah MSA, and we obtain guarantees from responsible parties. Historically, we have retained these loans on our consolidated balance sheets for investment.

Current wording

Residential real estate loans include construction, lot and land development loans that are for the purpose of acquisition and development of property to be improved through the construction of residential buildings, and loans secured by other residential real estate. As of September 30, 2025 and December 31, 2024, we had total residential real estate loans of $60.5 million and $51.6 million, respectively, representing 10.7% and 11.1% of our total loans held-for-investment, respectively. Construction loans are usually paid off through the conversion to permanent financing from third-party lending institutions. Lot loans may be paid off as the borrower converts to a construction loan. At the completion of the construction project, if the loan is converted to permanent financing by us or if scheduled loan amortization begins, it is then reclassified from construction to single-family dwelling. Underwriting of construction and development loans typically includes analysis of the general market conditions associated with the area and type of project being funded in addition to the borrower’s financial condition and ability to meet the required debt obligation. These loans are generally secured by mortgages for residential property located primarily in the Salt Lake City, Utah MSA, and we obtain guarantees from responsible parties. Historically, we have retained these loans on our consolidated balance sheets for investment.

Previous wording

Through our Strategic Program service providers, we issue unsecured and secured consumer and business loans to borrowers within certain approved credit profiles nationwide. Although we have generally sold most of these loans, we may choose to hold more of the funded loans and/or receivables based on a number of factors including the amount of our available capital. As of June 30, 2025 and December 31, 2024, we had total Strategic Program loans held-for-investment of $30.7 million and $20.1 million, respectively, representing 5.8% and 4.3% of our total loans held-for-investment, respectively. Credit enhanced loans, where the Strategic Program sponsoring fintech company retains the credit risk, totaled $11.7 million as of June 30, 2025 and $0.9 million as of December 31, 2024. Loans originated through the Strategic Program are limited to predetermined Bank underwriting criteria, which has been approved by our board of directors. The primary form of repayment on these loans is from the borrower’s personal or business cash flow. Secured loans are secured by liens on consumer or business assets, as applicable. We reserve the right to sell any portion of funded loans and/or receivables directly to the Strategic Program service providers or other investors. We generally retain the legal right to service all these loans, but contract with the Strategic Program service provider or another approved sub-servicer to service these loans on our behalf.

Current wording

Through our Strategic Program service providers, we issue unsecured and secured consumer and business loans to borrowers within certain approved credit profiles nationwide. Although we have generally sold most of these loans, we may choose to hold more of the funded loans and/or receivables based on a number of factors including the amount of our available capital. As of September 30, 2025 and December 31, 2024, we had total Strategic Program loans held-for-investment of $63.0 million and $20.1 million, respectively, representing 11.1% and 4.3% of our total loans held-for- investment, respectively. Credit enhanced loans, where the Strategic Program sponsoring fintech company retains the credit risk, totaled $41.4 million as of September 30, 2025 and $0.9 million as of December 31, 2024. Loans originated through the Strategic Program are limited to predetermined Bank underwriting criteria, which has been approved by our board of directors. The primary form of repayment on these loans is from the borrower’s personal or business cash flow. Secured loans are secured by liens on consumer or business assets, as applicable. We reserve the right to sell any portion of funded loans and/or receivables directly to the Strategic Program service providers or other investors. We generally retain the legal right to service all these loans, but contract with the Strategic Program service provider or another approved sub-servicer to service these loans on our behalf.

Previous wording

Commercial real estate loans include loans to individuals, sole proprietors, partnerships, corporations, or other business enterprises for commercial, industrial, agricultural, or professional purposes, secured by real estate, but not for personal expenditure purposes. As of June 30, 2025 and December 31, 2024, we had total commercial real estate loans of $79.3 million and $42.4 million, respectively, representing 15.0% and 9.1% of our total loans held-for-investment, respectively. Of these amounts, $77.9 million and $41.0 million represented owner occupied properties as of June 30, 2025 and December 31, 2024, respectively. Underwriting is generally based on commercial credit metrics where the primary repayment source is borrower cash flow, secondary is personal guarantor cash flow (when applicable) and tertiary is the sale of collateral pledged. The nature of the business, use of proceeds, length of time in business, management experience, repayment ability, credit history, ratio calculations and assessment of collateral adequacy are all considerations. In addition to real estate, these loans may also be secured by liens on business assets. Historically, we have retained these loans on our balance sheet for investment.

Current wording

Commercial real estate loans include loans to individuals, sole proprietors, partnerships, corporations, or other business enterprises for commercial, industrial, agricultural, or professional purposes, secured by real estate, but not for personal expenditure purposes. As of September 30, 2025 and December 31, 2024, we had total commercial real estate loans of $84.7 million and $42.4 million, respectively, representing 14.9% and 9.1% of our total loans held-for-investment, respectively. Of these amounts, $83.3 million and $41.0 million represented owner occupied properties as of September 30, 2025 and December 31, 2024, respectively. Underwriting is generally based on commercial credit metrics where the primary repayment source is borrower cash flow, secondary is personal guarantor cash flow (when applicable) and tertiary is the sale of collateral pledged. The nature of the business, use of proceeds, length of time in business, management experience, repayment ability, credit history, ratio calculations and assessment of collateral adequacy are all considerations. In addition to real estate, these loans may also be secured by liens on business assets. Historically, we have retained these loans on our balance sheet for investment.

Previous wording

Consumer lending provides financing for personal, family, or household purposes on a nationwide basis. Most of these loans are originated through our loan origination system platform and come from a variety of sources, including other approved merchant or dealer relationships and lending platforms. As of June 30, 2025 and December 31, 2024, we had total consumer loans of $24.6 million and $22.2 million, respectively, representing 4.6% and 4.8% of our total loans held-for-investment, respectively. We use a debt-to-income (“DTI”) ratio test to determine whether an applicant will be able to service the debt. The DTI ratio compares the applicant’s anticipated monthly expenses and total monthly obligations to the applicant’s monthly gross income. Our policy is to limit the DTI ratio to 45% after calculating interest payments related to the new loan. Loan officers, at their discretion, may make exceptions to this ratio if the loan is within their authorized lending limit. DTI ratios of no more than 50% may be approved subject to an increase in interest rate. Strong offsetting factors such as higher discretionary income or large down payments are used to justify exceptions to these guidelines. All exceptions are documented and reported. While the loans are generally for the purchase of goods which may afford us a purchase money security interest, these loans are underwritten as if they were unsecured. On larger loans, we may file a Uniform Commercial Code (“UCC”) financing form. Historically, we have retained these loans on our balance sheet for investment.

Current wording

Consumer lending provides financing for personal, family, or household purposes on a nationwide basis. Most of these loans are originated through our loan origination system platform and come from a variety of sources, including other approved merchant or dealer relationships and lending platforms. As of September 30, 2025 and December 31, 2024, we had total consumer loans of $24.3 million and $22.2 million, respectively, representing 4.3% and 4.8% of our total loans held-for-investment, respectively. We use a debt-to-income (“DTI”) ratio test to determine whether an applicant will be able to service the debt. The DTI ratio compares the applicant’s anticipated monthly expenses and total monthly obligations to the applicant’s monthly gross income. Our policy is to limit the DTI ratio to 45% after calculating interest payments related to the new loan. Loan officers, at their discretion, may make exceptions to this ratio if the loan is within their authorized lending limit. DTI ratios of no more than 50% may be approved subject to an increase in interest rate. Strong offsetting factors such as higher discretionary income or large down payments are used to justify exceptions to these guidelines. All exceptions are documented and reported. While the loans are generally for the purchase of goods which may afford us a purchase money security interest, these loans are underwritten as if they were unsecured. On larger loans, we may file a Uniform Commercial Code (“UCC”) financing form. Historically, we have retained these loans on our balance sheet for investment.

Previous wording

We had a total of $39.7 million in nonperforming assets, which included $0.5 million in material loan modifications at June 30, 2025. The amount of nonperforming assets as of June 30, 2025 includes $21.2 million of SBA 7(a) loan balances that are guaranteed by the SBA. We had $36.5 million in nonperforming assets which included $0.8 million in material loan modifications at December 31, 2024. The amount of nonperforming assets as of December 31, 2024 includes $19.2 million of SBA 7(a) loan balances that are guaranteed by the SBA. The decrease in nonperforming assets and material loan modifications from year-end was primarily attributable to the resolution of two loans offset in part by the migration of several smaller loans in the SBA 7(a) loan portfolio to nonperforming status. Due to elevated interest rates, the slowdown of consumer spending and the variable rate nature of our SBA portfolio, the risk of default has become and continues to be elevated and may result in additional delinquencies in future periods.

Current wording

We had a total of $42.8 million in nonperforming assets, which included $0.5 million in material loan modifications at September 30, 2025. The amount of nonperforming assets as of September 30, 2025 includes $23.3 million of SBA 7(a) loan balances that are guaranteed by the SBA. We had $36.5 million in nonperforming assets which included $0.8 million in material loan modifications at December 31, 2024. The amount of nonperforming assets as of December 31, 2024 includes $19.2 million of SBA 7(a) loan balances that are guaranteed by the SBA. The increase in nonperforming assets from year-end was primarily attributable to an increase in the SBA 7(a) loan portfolio being classified as nonaccrual mainly due to the negative impact of sustained elevated interest rates on the Company’s small business borrowers. Due to elevated interest rates, the slowdown of consumer spending and the variable rate nature of our SBA portfolio, the risk of default has become and continues to be elevated and may result in additional delinquencies in future periods.

Previous wording

Our Strategic Program service providers also provide for loan modifications to borrowers. The service providers are authorized to make the loan modifications without prior FinWise consent to react to immediately to borrower contact and optimize collections. As of June 30, 2025 the balance of outstanding loan modifications was approximately $1.1 million.

Current wording

Our Strategic Program service providers also provide for loan modifications to borrowers. The service providers are authorized to make the loan modifications consistent with modification program terms previously approved by FinWise but without prior FinWise consent on the specific loans in order to react to immediately to borrower contact and optimize collections. As of September 30, 2025 the balance of outstanding loan modifications was approximately $0.3 million.

Previous wording

The following table shows the allocation of the ACL and the percentage of loans in each category to total loans as of June 30, 2025 and December 31, 2024. The ACL related to Strategic Programs constitutes 53.5% and 47.8% of the total ACL while comprising 5.8% and 4.3%, respectively, of total loans held-for-investment as of June 30, 2025 and December 31, 2024, respectively. The percentage of ACL related to Strategic Program loans retained reflects the increased credit risks associated with certain retained Strategic Program loans.

Current wording

The following table shows the allocation of the ACL and the percentage of loans in each category to total loans as of September 30, 2025 and December 31, 2024. The ACL related to Strategic Programs constitutes 68.3% and 47.8% of the total ACL while comprising 11.1% and 4.3%, respectively, of total loans held-for-investment as of September 30, 2025 and December 31, 2024, respectively. The percentage of ACL related to Strategic Program loans retained reflects the increased credit risks associated with certain retained Strategic Program loans.

Previous wording

The total ratio of annualized NCO to average loans outstanding was higher during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, primarily due to charge offs relating to loans as they migrated to nonaccrual status during the second quarter of 2025.

Current wording

The total ratio of annualized NCO to average loans outstanding remained consistent during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, primarily due to a higher growth rate in the quarterly average balances of Strategic Program loans related to the credit enhanced program when compared to the growth rate of net charge-offs in that program.

Previous wording

The total ratio of annualized NCO to average loans outstanding was lower during the six months ended June 30, 2025, as compared to the same prior year period due to a decrease in net charge offs on the non sub-prime Strategic Program loan portfolio.

Current wording

The total ratio of annualized NCO to average loans outstanding was lower during the nine months ended September 30, 2025, as compared to the same prior year period due to a higher growth rate in the quarterly average balances of the total loan portfolio when compared to the growth rate of net charge-offs.

Previous wording

Total assets at June 30, 2025 were $842.5 million, an increase of $96.5 million from December 31, 2024. The increase in total assets was primarily due to continued growth in our loans held-for-investment, net, and loans held-for-sale portfolios of $58.7 million and $55.7 million, respectively, partially offset by a decrease of $18.9 million in interest-bearing cash deposits.

Current wording

Total assets at September 30, 2025 were $899.9 million, an increase of $154.0 million from December 31, 2024. The increase in total assets was primarily due to continued growth in our loans held-for-investment, net, and loans held-for-sale portfolios of $85.7 million and $65.1 million, respectively, and an increase in our credit enhancement asset of $11.1 million, partially offset by a decrease of $4.3 million in interest-bearing cash deposits.

Previous wording

The increase in total deposits as of June 30, 2025 compared to December 31, 2024 of $90.2 million was driven primarily by increases in brokered time deposits of $90.1 million, which were added to fund loan growth and increase balance sheet liquidity. Deposits are used to fund our lending programs.

Current wording

The increase in total deposits as of September 30, 2025 compared to December 31, 2024 of $137.4 million was driven primarily by increases in brokered time deposits of $105.0 million, which were added to fund loan growth and increase balance sheet liquidity. Deposits are used to fund our lending programs.

Previous wording

As an FDIC-insured institution, our deposits are insured up to applicable limits by the Deposit Insurance Fund (“DIF”) of the FDIC. The Dodd-Frank Act raised the limit for federal deposit insurance to $250,000 for most deposit accounts and increased the cash limit of Securities Investor Protection Corporation protection from $100,000 to $250,000. Our total estimated uninsured deposits were $176.0 million and $183.2 million as of June 30, 2025 and December 31, 2024, respectively. Estimated uninsured deposits at the Bank as of June 30, 2025 include $52.9 million of total deposits contractually required to be maintained at the Bank pursuant to our Strategic Program agreements and an additional $45.0 million of total deposits associated with accounts owned by the parent holding company or the Bank. The maturity profile of our uninsured time deposits, those amounts that exceed the FDIC insurance limit, at June 30, 2025 is as follows:

Current wording

As an FDIC-insured institution, our deposits are insured up to applicable limits by the Deposit Insurance Fund (“DIF”) of the FDIC. The Dodd-Frank Act raised the limit for federal deposit insurance to $250,000 for most deposit accounts and increased the cash limit of Securities Investor Protection Corporation protection from $100,000 to $250,000. Our total estimated uninsured deposits were $182.0 million and $183.2 million as of September 30, 2025 and December 31, 2024, respectively. Estimated uninsured deposits at the Bank as of September 30, 2025 include $62.1 million of total deposits contractually required to be maintained at the Bank pursuant to our Strategic Program agreements and an additional $44.6 million of total deposits associated with accounts owned by the parent holding company or the Bank. The maturity profile of our uninsured time deposits, those amounts that exceed the FDIC insurance limit, at September 30, 2025 is as follows:

Previous wording

Total liabilities increased to $660.5 million, or 15.4%, as of June 30, 2025 from $572.3 million as of December 31, 2024 primarily due to an increase in deposits as discussed above.

Current wording

Total liabilities increased to $712.2 million, or 24.4%, as of September 30, 2025 from $572.3 million as of December 31, 2024 primarily due to an increase in deposits as discussed above.

Previous wording

We primarily utilize short-term and long-term borrowings to supplement deposits to fund our lending and investment activities. At June 30, 2025, we had the ability to access $257.6 million from the Federal Reserve Bank on a collateralized basis. The Bank had an available unsecured line of credit with two correspondent banks to borrow up to$6.1 million in overnight funds. We also maintain a $24.9 million line of credit with Federal Home Loan Bank, secured by specific pledged loans. We had no outstanding balances on any unsecured or secured lines of credit as of June 30, 2025.

Current wording

We primarily utilize short-term and long-term borrowings to supplement deposits to fund our lending and investment activities. At September 30, 2025, we had the ability to access $216.8 million from the Federal Reserve Bank on a collateralized basis. The Bank had an available unsecured line of credit with two correspondent banks to borrow up to$6.1 million in overnight funds. We also maintain a $18.5 million line of credit with Federal Home Loan Bank, secured by specific pledged loans. We had no outstanding balances on any unsecured or secured lines of credit as of September 30, 2025.

Previous wording

Our most liquid assets are cash and cash equivalents. The levels of these assets depend on our operating, financing, lending and investing activities during any given period. At June 30, 2025, liquid assets (defined as cash and due from banks and interest-bearing deposits) totaled $90.1 million and constituted 10.7% of total assets. We believe that our liquid assets combined with the available lines of credit and our ability to generate core and non-core funding provides adequate liquidity to meet our current financial obligations for at least the next 12 months.

Current wording

Our most liquid assets are cash and cash equivalents. The levels of these assets depend on our operating, financing, lending and investing activities during any given period. At September 30, 2025, liquid assets (defined as cash and due from banks and interest-bearing deposits) totaled $105.6 million and constituted 11.7% of total assets. We believe that our liquid assets combined with the available lines of credit and our ability to generate core and non-core funding provides adequate liquidity to meet our current financial obligations for at least the next 12 months.

Previous wording

Shareholders’ equity increased $8.2 million to $182.0 million at June 30, 2025 compared to $173.7 million at December 31, 2024, primarily due to our net income.

Current wording

Shareholders’ equity increased $14.0 million to $187.8 million at September 30, 2025 compared to $173.7 million at December 31, 2024, primarily due to earnings of$12.2 million reported for the period.

Previous wording

We use several indicators of capital strength. The most commonly used measure is total equity to total assets, which was 21.6% and 23.3% as of June 30, 2025 and December 31, 2024, respectively.

Current wording

We use several indicators of capital strength. The most commonly used measure is total equity to total assets, which was 20.9% and 23.3% as of September 30, 2025 and December 31, 2024, respectively.

Previous wording

Our return on average equity was 9.2% and 7.9% for the three months ended June 30, 2025 and 2024, respectively, and 8.3% and 7.9% for the six months ended June 30, 2025 and 2024, respectively. Our return on average assets was 2.0% and 2.1% for the three months ended June 30, 2025 and 2024, respectively, and 1.9% and 2.1% for the six months ended June 30, 2025 and 2024, respectively.

Current wording

Our return on average equity was 10.6% and 8.3% for the three months ended September 30, 2025 and 2024, respectively, and 9.1% and 8.1% for the nine months ended September 30, 2025 and 2024, respectively. Our return on average assets was 2.2% and 2.1% for the three months ended September 30, 2025 and 2024, respectively, and 2.0% and 2.1% for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

We have a stock repurchase program authorized by our Board of Directors. The stock repurchase program became effective as of March 6, 2024 and authorizes us to repurchase 641,832 shares of our common stock in the aggregate in open market transactions, privately negotiated transactions, or any manner that complies with the provisions of Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as well as pursuant to a trading plan under Rule 10b5-1 under the Exchange Act. Our decision to repurchase shares will depend on a variety of factors, including but not limited to, the market price and trading volume of our common stock, general market and economic conditions, the ongoing assessment of our capital needs, and applicable legal and regulatory requirements. The repurchase program does not obligate us to purchase any particular number of shares and may be limited or terminated at any time without prior notice. During the three months ended June 30, 2025, there were no open-market share repurchases. Since the repurchase program’s inception, we have repurchased and subsequently retired a total of 44,608 shares for $0.5 million at an average price of $10.30 per share. See Note 1 - Summary of Significant Accounting Policies for more information.

Current wording

We have a stock repurchase program authorized by our Board of Directors. The stock repurchase program became effective as of March 6, 2024 and authorizes us to repurchase 641,832 shares of our common stock in the aggregate in open market transactions, privately negotiated transactions, or any manner that complies with the provisions of Rule 10b-18 of the Exchange Act, as well as pursuant to a trading plan under Rule 10b5-1 under the Exchange Act. Our decision to repurchase shares will depend on a variety of factors, including but not limited to, the market price and trading volume of our common stock, general market and economic conditions, the ongoing assessment of our capital needs, and applicable legal and regulatory requirements. The repurchase program does not obligate us to purchase any particular number of shares and may be limited or terminated at any time without prior notice. During the three months ended September 30, 2025, there were no open-market share repurchases. Since the repurchase program’s inception, we have repurchased and subsequently retired a total of 44,608 shares for $0.5 million at an average price of $10.30 per share. See Note 1 - Summary of Significant Accounting Policies for more information.

Previous wording

FinWise has entered into agreements with certain of its Strategic Program service providers pursuant to which the service providers provide credit enhancement on loans which protects the Bank by indemnifying or reimbursing the Bank for incurred credit and fraud losses. We estimate and record a provision for expected losses for these Strategic Program loans in accordance with GAAP, which requires estimation of the provision without consideration of the credit enhancement. When the provision for expected losses over the life of the loans that are subject to such credit enhancement is recorded, a credit enhancement asset reflecting the potential future recovery of those losses is also recorded on the balance sheet in the form of non-interest income (credit enhancement income). Reimbursement or indemnification for incurred losses is provided for through a deposit reserve account that is replenished periodically by the respective Strategic Program service provider. Any remaining income on such loans in excess of the amounts retained by FinWise and placed in the deposit reserve account are paid to the Strategic Program service provider. Income on such loans in excess of amounts retained by FinWise are expensed for services provided by the Strategic Program service provider including its legal commitment to indemnify or reimburse all credit or fraud losses pursuant to credit enhancement agreements. The credit enhancement asset is reduced as credit enhancement payments and recoveries are received from the Strategic Program service provider or taken from its cash reserve account. If the Strategic Program service provider is unable to fulfill its contracted obligations under its credit enhancement agreement, then the Bank could be exposed to the loss of the reimbursement and credit enhancement income as a result of this counterparty risk. See the following reconciliations of non-GAAP measures for the impact of the credit enhancement on our financial condition and results.

Current wording

FinWise has entered into agreements with certain of its Strategic Program service providers pursuant to which the service providers provide credit enhancement on loans which protects the Bank by indemnifying or reimbursing the Bank for incurred credit and fraud losses. We estimate and record a provision for expected losses for these Strategic Program loans in accordance with GAAP, which requires estimation of the provision without consideration of the credit enhancement. When the provision for expected losses over the life of the loans that are subject to such credit enhancement is recorded, a credit enhancement asset reflecting the future recovery of those estimated credit losses pursuant to the strategic partner’s guarantee to assume the Bank’s credit losses on each of the loans in the respective guaranteed portfolio is also recorded on the balance sheet in the form of non-interest income (credit enhancement income). Reimbursement or indemnification for incurred losses is provided for in the form of a deposit reserve account that is replenished periodically by the respective Strategic Program service provider. The credit enhancement asset is reduced as credit enhancement payments and recoveries are received from the Strategic Program service provider or taken from its cash reserve account. If the Strategic Program service provider is unable to fulfill its contracted obligations under its credit enhancement agreement, then the Bank could be exposed to the loss of the reimbursement and credit enhancement income as a result of this counterparty risk. The Bank incurs expenses for the amounts owed to the strategic partner for the credit guarantee and for servicing of the credit enhanced portfolio, if applicable (credit enhancement program expenses). See the following reconciliations of non-GAAP measures for the impact of the credit enhancement on our financial condition and results.

Previous wording

The following non-GAAP measures are presented to illustrate the impact of certain credit enhancement expenses on total interest income on LHFI and average yield on LHFI:

Current wording

The following non-GAAP measures are presented to illustrate the impact of certain credit enhancement program expenses on total interest income on LHFI and average yield on LHFI:

Previous wording

Total interest income on LHFI net of credit enhancement expense and the average yield on LHFI net of credit enhancement expense are non-GAAP measures that include the impact of credit enhancement expense on total interest income on LHFI and the respective average yield on LHFI, the most directly comparable GAAP measures.

Current wording

Total interest income on LHFI net of credit enhancement program expenses and the average yield on LHFI net of credit enhancement program expenses are non-GAAP measures that include the impact of credit enhancement program expenses on total interest income on LHFI and the respective average yield on LHFI, the most directly comparable GAAP measures.