FinWise Bancorp's Q2 2025 Earnings Call: Unpacking Contradictions in Credit Growth, AI Impact, and Loan Strategies

Credit enhanced loan balances and growth expectations, impact of AI and stablecoins on the banking industry, SBA lending strategy, provision for credit losses and NPL migration are the key contradictions discussed in FinWise Bancorp's latest 2025Q2 earnings call.



Loan Origination and Growth:
- FinWise Bancorp reported strong loan originations, with total originations of $1.5 billion in Q2, up 17% quarter-over-quarter and 27% year-over-year.
- The increase was driven by late 2024 strategic programs, a seasonal rebound from higher-yielding partners, and new product offerings.

Credit Enhanced Balance Sheet Program:
- The credit enhanced balance sheet program saw initial material funding, with balances reaching $12 million by the end of Q2.
- This growth was a result of strong demand for the program, with expectations to reach $50 million to $100 million by the end of the fourth quarter.

Net Income and Financial Performance:
- FinWise Bancorp's net income for Q2 was $4.1 million, or $0.29 per diluted common share.
- This was due to strong loan originations, an increase in average loan balances, solid fee income, and disciplined expense management.

SBA Lending and Origination Growth:
- Quarterly SBA 7(a) loan originations increased 24% quarter-over-quarter and over 140% from the same quarter last year.
- The growth was primarily attributed to a return to normal loan sizes and increased small business confidence.