Finwise Bancorp Reports Strong 2025 Growth Amidst Surging Credit Losses and Data Breach Litigation
Summary
Finwise Bancorp reported increased net income and asset growth for 2025, but faced a more than threefold rise in credit loss provisions, a decline in NIM, and an unresolved data breach class action lawsuit. The company also changed its SBA lending status and saw a massive increase in unfunded loan commitments.
Key Events
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Strong Financial Performance
Net income increased to $16.1 million for the year ended December 31, 2025, up from $12.7 million in 2024. Total assets grew by $231.2 million to $977.1 million, and basic earnings per share rose to $1.20 from $0.98.
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Significant Increase in Credit Loss Provisions
The provision for credit losses more than tripled to $38.6 million in 2025, compared to $11.6 million in 2024, primarily due to growth in the credit enhancement loan portfolio and higher net charge-offs from more conservative servicing standards.
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Ongoing Data Breach Class Action Lawsuit
The company is vigorously defending a class action lawsuit filed in July 2025 concerning an alleged data breach that exposed personal data of approximately 600,000 individuals. Mediation on March 17, 2026, failed to reach an agreement, and no accrual for loss has been recorded as of December 31, 2025.
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Shift in SBA Lending Status
Finwise Bancorp voluntarily relinquished its SBA Preferred Lending Program (PLP) delegated authority in 2025, becoming an SBA General Processing (GP) lender, which requires submitting all SBA loan applications for final approval.
Analysis
Finwise Bancorp's 2025 annual report reveals significant growth in net income, total assets, and EPS, driven by expansion in its Strategic Programs. However, this growth is accompanied by substantial increases in credit loss provisions, a decline in Net Interest Margin (NIM), and an ongoing class action lawsuit related to a data breach. The company also voluntarily relinquished its SBA Preferred Lending Program (PLP) status, shifting to a General Processing (GP) lender, which could impact future SBA loan originations. The massive increase in unfunded credit card commitments represents a significant potential future exposure. Investors should weigh the positive financial growth against these escalating credit risks, legal uncertainties, and operational changes.
At the time of this filing, FINW was trading at $15.29 on NASDAQ in the Finance sector, with a market capitalization of approximately $207.7M. The 52-week trading range was $13.49 to $22.49. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.