[Management View]
FinWise Bancorp reported record asset growth in Q3 2025, driven by the expansion of its credit enhanced loan portfolio and significant increases in both net interest and fee income. Strategic partnerships with DreamFi and Tally Technologies are expected to drive credit enhanced balances above prior guidance to $115 million by the end of Q4 2025, with further growth projected into 2026. The company's efficiency ratio improved in the third quarter due to operating leverage, even as expenses increased to support higher credit enhanced activity.

[Outlook]
FinWise Bancorp projects continued credit enhanced loan growth as the primary balance driver while maintaining concentration policies and risk controls as new programs scale up. The company anticipates some compression in net interest margin in Q4 2025 due to revenue mix changes from the Tally partnership. Management expects organic credit enhanced balance growth of $8 million to $10 million per month in 2026.

[Financial Performance]
- Loan Originations: $1.8 billion in Q3 2025, up 21% QoQ and 24% YoY.
- Credit Enhanced Balances: $41 million at the end of Q3 2025, with projections to reach $115 million by year-end.
- Net Income: $4.9 million in Q3 2025, up 19% QoQ and 42% YoY.
- Diluted EPS: $0.34, up from $0.29 in the previous quarter and $0.25 in the same quarter last year.
- Tangible Book Value Per Share: $13.84, up from $13.51 in the prior quarter.
- Net Interest Income: $18.6 million in Q3 2025, up from $14.7 million in the prior quarter.
- Net Interest Margin: 9.01% in Q3 2025, up from 7.81% in the prior quarter.
- Fee Income: $18.1 million in Q3 2025, up from $10.3 million in the prior quarter.
- Noninterest Expense: $17.4 million in Q3 2025, up from $14.9 million in the prior quarter.
- Efficiency Ratio: 47.6% in Q3 2025, down from 59.5% in the prior quarter.
- Total Assets: Nearly $900 million at the end of Q3 2025.

[Q&A Highlights]
Question 1: As you outlined in your prepared remarks, Credit Enhanced loan balances are gonna exceed your year-end target, you know, largely due to receiving the Tally loans. You know, given your outlook for credit enhanced loans, can you discuss what level of concentration you're comfortable with?
Answer: For these for this in your loan portfolio? Yeah. So some of the concentration policies is Joe, really are limited by percent of the portfolio by program. I would tell you that they top out at about 15%. Per program.

Question 2: Okay. That's per program, not for loan type.
Answer: That's correct. Yes. It is.

Question 3: And then can you talk a little more about the net reductions in FTEs and compliance and risk functions? I understand the percent of employees in these oversight roles remained unchanged, but was there any new systems that you put in place to automate certain functions to allow fewer employees to receive more volume?
Answer: The employee right now, number has dropped a little bit. Not it's not due to any AI or what have you in the system. It's just us being very disciplined about what we're doing here. However, we are analyzing, as many other banks are, potential efficiency impacts from AI.

Question 4: Okay. I appreciate it. And then just a couple kinda clarification questions for me. And forgive me if this has already been covered, but what is the difference between credit enhancement program expenses and credit enhancement guaranteed expenses?
Answer: So, we're just being more specific. What was in previous periods, references credit enhancement expenses. Is referring to the actual the amount that we're paying for guarantees on those credit enhancement programs. The other component piece that's included in the expense section, but is not specified was not being included in what was previously described as credit enhanced expenses. Is a servicing cost related to those credit enhancement loans. But that's rather insignificant relative to the guarantee amounts that are being paid.

Question 5: Okay. Perfect. And then just kinda last clarification question for me. You talked about some accrued interest reversals in the quarter. Can you quantify that impact?
Answer: Could you repeat the question, please?

Question 6: The accrued interest reversals in the quarter that boosted loan yields in the NIM? Yeah. That was the accrued the accrued interest reversal during the period was a prop was about a $175,000 So that is when a loan goes nonperforming and we have to reverse the interest that had previously been accrued on loan when it reaches ninety days past due, that was $175,000 in this quarter compared to $514,000 last quarter.

Question 7: Alright. Well, I appreciate that. For taking my questions.
Answer: Thanks, Joe.

Question 8: Hey, good afternoon. Hey, Andrew. Just thinking about kind of net growth of the balance sheet. Into the coming year. Jim, I appreciate the guidance you gave around credit enhanced. That's really helpful. But should we expect the entirety of you know, your loan growth going forward to come from that Credit Enhance product or products? Or should we expect growth in any areas outside of that?
Answer: I think you'll see growth, you know, across the board, Andrew. I think that would be the primary driver, though. That's where you'll see the biggest pickup. You know, if you look at our SBA portfolio, we've kind of been, excuse me, selling about as much production as we're putting on the guaranteed portions. At least in the last, you know, quarter or two. You're getting you know, in the equipment leasing, you see, you know, upticks each quarter. But, yes, generally, the credit enhanced portfolio is where the meaningful growth, the portfolio side will come from.

Question 9: Okay. Got it. And then, you know, you've you're gonna outperform this 50 to 100,000,000 guide It sounds like by the time we end this year and, you know, if we kinda extrapolate the baseline you're talking of monthly growth for 2026, it implies, you know, just a little more than a $100,000,000. Of credit enhanced growth in 2026. I'm I'm just curious, you know, what could cause you to deviate either positively or even negatively versus, you know, kind of this established baseline we're thinking about for 2026?
Answer: Yeah. So, yeah. We're looking at about 115,000,000 by the end of the year, and that's above previous guidance of the 50 to a 100. So we're happy about that. You know, like you mentioned, you know, we're currently comfortable with organic growth there. You know, call it starting January 1 of about 8 to 10,000,000. Based on what we're currently seeing in trends. Uh-huh. So what would cause us to you know, outperform that? It would be an acceleration. You know, there's four live programs today, Andrew. And then there's the fifth program coming online in December with Tally. You know, of the four live programs, two have kind of good established trends month over month. I would say two are still kind of lagging as far as just you know, growth. So if you have, you know, those two programs start to hit more of the stride, you could have upside. On the downside, I would say, really, you know, if you have some material weakness in performance, you know, when we underwrite these, we stress them, you know, pretty we stress them pretty highly. Both with a 50% and a 100% stress on charge off rates, and then we look at high watermarks. But, you know, if we have meaningful deterioration in performance there, and we have to you know, stop originations for one of those programs, that's where you would see you know, underperformance versus the kinda trend that we're talking about. You know, a 115 to start the year, and then 8 to $10,000,000 of organic growth monthly throughout the year.

Question 10: Got it. Okay. And if I could clarify one on the expenses I'm looking at the credit enhancement guarantee expense of one point, $7.02 0 in the quarter. Compared to, you know, the adjustment section, you're breaking out the total credit enhancement program expense of one spot $9.06 8. Is the delta of that what you're referring to is the, you know, kinda service the incremental servicing costs that I'm assuming would be kind of variable as this loan portfolio grows?
Answer: Yes. It is. That would be the difference.

Question 11: Okay. And it is it is variable, so increases going forward?
Answer: Like, the servicing cost is typically stated as a percentage of the assets, and so that will Right. Vary as the program matures and grows.

Question 12: Yep. Okay. And so if I if I if I look at that, that was in kind of the other expense line in the third quarter that stepped up. Essentially implies, you know, the other expense stepped up, you know, 400,000 or so. In the quarter. I'm just curious any other specific drivers to the step up in the other expense? I'm just trying to get kind of a clean run rate.
Answer: Well, the largest one that you noted there was the servicing expenses on these port these credit enhanced portfolios. The other changes that are included in there is deposits are higher We have a little bit higher FDIC deposit insurance assessment. And then just generally data services and software costs are included in there that also increase.

Question 13: Yep. Okay. Perfect. Well, thank you for taking the questions.
Answer: No problem. Thanks, Andrew.

Question 14: Hey, guys. Good afternoon. Good afternoon. That's great. To ask a question on the credit enhancement You know, some of some of the loans that you're adding through these programs are credit enhanced and some are not guaranteed. Can you maybe break apart the decision on what you're doing with the with the two pieces there and why there's two buckets?
Answer: Yeah. So I think you're you're probably looking at the table on page five of the earnings release spread. Is that right?

Question 15: Yep. Yeah. Yeah. Yeah. Okay. So the you've got two kinda sub line items there under strategic program one. One with credit enhancement, and that's that's a credit enhancement program that we've been talking about, and it's been a meaningful starting to become a meaningful growth driver of assets in the portfolio. The without enhancement, those are you can call them, like, full risk retention programs that we have. We have three there's four active programs there. Most of them were retention programs that have we've been active with really over the last four or five years.
Answer: We had those balances have been pretty stable. We talked in the last quarter or two about the fact that they may start ticking up here. So you see them know, they were pretty flat. June in the June quarter versus you know, the same period last year. But you did see them pick up a little bit. $3,000,000 or so in this quarter. And we had talked about that. The In that program, you're getting full yield, but you're you're taking full NCO exposure as well. And so with a few of our partners, we've got you know, anywhere from two to 5% retention rates So every loan that comes through that we originate at the bank, you know, we will hold two to 5% of the receivable and then we sell 98 to 95% of the receivable, you know, to an SPV or back to the partner. And then that loan balance will stay on our balance sheet through payoff or charge off. And so we're capturing all of the yield. We're capturing all of the of the credit risk, but that's been a you know, it's been a fairly stable number. It's to tick up a little bit. And I think Ken, in some of his remarks, you know, over the last quarter or two, has had mentioned that we're looking at, you know, potentially growing that a little bit here. That help?

Question 16: Okay. Yeah. That's helpful. I just for some reason, I was thinking that you guys were gonna transfer those programs into the strategic with credit enhancement. And so those balances were gonna go down instead of up, but that makes sense. Yeah. Difference at different set of programs. Right. Right. Wanted to, ask you know, you mentioned the margin down in the fourth quarter with continued derisking. You maybe talk about the you know, how much you're expecting? And then when I look at the CDs that cost $4.22, in the third quarter, you know, with rate cuts, I'm wondering if the CD book might be an opportunity on the margin.
Answer: Sure. Let me tackle that one. So what I was referring to in my comments was that, we have tallied coming on. And during the fourth during the fourth quarter, late in the fourth quarter, And talent is a little bit of a different structure of transaction. Where the revenue is in part related to interest income, which is a low which is going to be only part of the revenue we collect from it. And then we're also going to collect from that portfolio the addition additional fees, the Interchange. Interchange fee. Thank you. So depending upon when that program comes on, and how quickly these other programs continue to wrap up, that could result in a little bit of toss-up in regards to whether we end up with margin increase or margin decrease during the fourth quarter.

Question 17: Okay. That's helpful. And then on money rails and payments, you know, any do we have to wait for to January for some maybe some thoughts on potential revenue in '26 and if we do, okay. But was hoping for maybe any early color you could give. And then just you know, particularly money rails and payments, just, you know, maybe any pipeline on potential partners from here?
Answer: Sure. So as far as pay cards go first, we just announced Dream five and Tali. We actually expect Dream five will generate deposits for us in 2026 especially. But also, we have the standard banking behind that, so we would be moving money back and forth on MoneyGrills with them. We also have additional partners that are that we expect to generate not only deposits but, money rails, fee income, as well as some BIM opportunities as well. In the pipeline right now. So did that answer your question?

Question 18: Yeah. That's that's helpful. And then just you know, I don't know if you wanna give any kind of early thoughts around potential revenue magnitude, but that would be helpful if you think about the coming year.
Answer: I don't think we're ready at this time, but what we said before is it will become more meaningful in the latter half of twenty six, and we think you'll get more of a steady state in '27. It's more predictable, but as we get more information here, you know, we'll share that with you.

Question 19: Okay. Last one for me just around expenses, and you mentioned earlier that you know, AI was not a driver, for 3Q. I know 36% of your FTE count is in compliance IT. Etcetera. Is that an opportunity you guys think over the next year?
Answer: You know, that's a great question. The way we kind of think of it is we have built a platform to continue to launch partners, and we really don't look at it as in the terms of head count reduction. What we do look at it as is the ability to moderate head count as especially production related headcount as we grow. And so that's really where we see the lift there. Because we do have a lot of requirements and oversight and forth that we think we're right sized there, but future growth is where we see the opportunity.

[Sentiment Analysis]
The tone of the analysts was inquisitive and focused on understanding the specifics of the company's strategic initiatives and financial performance. Management's tone was confident and detailed, emphasizing the scalability and strength of their strategic partnerships and growth projections.

[Quarterly Comparison]
| Metric | Q3 2025 | Q2 2025 | Q3 2024 |
|---------------------------------|---------------|---------------|---------------|
| Loan Originations | $1.8 billion | N/A | N/A |
| Credit Enhanced Balances | $41 million | N/A | N/A |
| Net Income | $4.9 million | $4.1 million | $3.4 million |
| Diluted EPS | $0.34 | $0.29 | $0.25 |
| Tangible Book Value Per Share | $13.84 | $13.51 | $13.51 |
| Net Interest Income | $18.6 million | $14.7 million | N/A |
| Net Interest Margin | 9.01% | 7.81% | N/A |
| Fee Income | $18.1 million | $10.3 million | N/A |
| Noninterest Expense | $17.4 million | $14.9 million | N/A |
| Efficiency Ratio | 47.6% | 59.5% | N/A |
| Total Assets | $900 million | N/A | N/A |

[Risks and Concerns]
- The federal government shutdown is currently suspending new SBA 7(a) and 504 loan approvals, certain closings, and secondary market loan sales, directly impacting FinWise Bancorp's SBA lending operations.
- Management expects some compression in net interest margin in Q4 2025 due to revenue mix changes from the Tally partnership.
- Potential variability in cost control dynamics going forward, with periods where the efficiency ratio may increase.

[Final Takeaway]
FinWise Bancorp demonstrated strong financial performance in Q3 2025, with record asset growth and significant increases in net interest and fee income. Strategic partnerships with DreamFi and Tally Technologies are expected to drive further growth in credit enhanced balances. While the federal government shutdown poses a risk to SBA lending operations, the company remains focused on maintaining a strong pipeline and disciplined growth. Management's confidence in their strategic execution and long-term value creation is evident, with projections for continued growth in 2026.