Finwise Bancorp (FINW)

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis is intended as a review and summary of significant factors affecting our financial condition and results of operations for the periods indicated and should be read together with our consolidated audited financial statements and related notes thereto included in the 2025 Form 10-K and our unaudited consolidated financial statements included in Part I, Item 1 of this Report. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from our expectations. Factors that could cause such differences are discussed in the sections of this Report and our 2025 Form 10-K entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” and elsewhere in this Report. We assume no obligation to update any of these forward-looking statements except to the extent required by law.

The following discussion pertains to our historical results, on a consolidated basis. However, because we conduct all material business operations through our wholly owned subsidiary, FinWise Bank, the discussion and analysis relates to activities primarily conducted at the subsidiary level.

Critical Accounting Estimates

The accompanying management’s discussion and analysis of financial condition and results of operations is based upon our unaudited consolidated financial statements included in Part I, Item 1 of this Report. The preparation of these unaudited consolidated financial statements in accordance with GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under current circumstances, results of which form the basis for making judgments about the carrying value of certain assets and liabilities that are not readily available from other sources. We evaluate our estimates on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions.

Our critical accounting estimates primarily relate to the allowance for credit losses. See Note 1 - Summary of Significant Accounting Policies to the consolidated financial statements included in Part II, Item 8 in our 2025 Form 10-K for information on our accounting policy related to this critical accounting estimate.

There have been no material changes during the six months ended June 30, 2026 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 2025 Form 10-K.

Business Overview

FinWise Bancorp is a Utah corporation and the parent company of FinWise Bank and FinWise Investment, LLC. Our assets consist primarily of our investment in the Bank and all of our material business activities are conducted through the Bank.

We gather deposits in the Salt Lake City, Utah MSA through our one branch and nationwide from our Strategic Program service providers, SBA 7(a) borrowers, institutional deposit exchanges, brokered deposit arrangements and other deposit sources. Attracting nationwide deposits from the general public, businesses and other financial institutions, and investing those deposits, together with borrowings and other sources of funds, is also critical to our banking business.

Our banking business offers a diverse range of commercial and retail banking products and services, and consists primarily of originating loans in a variety of sectors. While our commercial and residential real estate lending and other products and services offered from our branch continue to be concentrated in and around the Salt Lake City, Utah MSA, our third-party loan origination relationships have allowed us to expand into markets across the United States. These relationships were developed to support our ability to generate significant loan volume across diverse consumer and commercial markets and have been the primary source of our growth and our consistent ability to operate profitability since developing the third-party loan origination business.

Our financial condition and results of operations depend primarily on our ability to originate loans and leases directly, or by using our strategic relationships with third-party loan origination platforms, to earn interest and non-interest income.

Our lending focuses on two main lending areas: (1) traditional lending which includes SBA 7(a) loans, residential and commercial real estate, and commercial leasing; and (2) Strategic Programs lending which includes held-for-sale, credit enhanced, and retained loans. For a description and analysis of the Company’s loan categories, see “Financial Condition.”

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Reportable Segments

Historically, we managed our business as a single operating and reportable segment. In the third quarter of 2025, after completing a technology initiative to capture and report segment-specific financial data, we revised our reportable segments. Due to significant operational growth and how our chief operating decision maker (“CODM”) reviews operating results and allocates resources, we manage our business through three reportable segments: traditional banking, banking as a service (“BaaS”) and treasury and administration. It is not practicable to provide prior period reportable segment results as segregating the data in a meaningful way would require unreasonable effort due to limitations in historical records.

The traditional banking segment provides loan and deposit products and services to consumers and businesses nationally and in and around the Salt Lake City, Utah MSA. The BaaS segment provides lending, card and payments solutions nationally to fintech brands. The treasury and administration segment consists of investments, deposits sourced nationally to support the business segments, and other items not specific to the traditional banking or BaaS segments.

Subsequent Acquisition

On July 20, 2026, we acquired the technology platform and related assets of Tallied Technologies, Inc. (“Tallied”), the credit card issuance and processing platform that has powered the Bank's co-branded credit card programs. With this acquisition, we now own its card technology stack end-to-end, from application, through issuing, processing and servicing. The Company expects integration and transition costs of approximately $4.0 million in total over the next year. The Company expects the costs to be greater in the next two quarters and to narrow over the following two quarters as it fully integrates the platform into the bank and eliminates duplicative third-party vendor and platform costs. The transaction results in the credit card receivable being reclassified from the credit enhanced portfolio to credit card loan receivable beginning in the third quarter of 2026.

Executive Summary

This executive summary provides certain 2026 and 2025 consolidated financial highlights from the discussion and analysis that follows:

•For the three months ended June 30, 2026, originations increased to $1.6 billion from $1.5 billion when compared to the three months ended June 30, 2025. For the six months ended June 30, 2026, originations increased to $3.4 billion from $2.7 billion when compared to the six months ended June 30, 2025. New strategic programs and organic growth through certain established strategic programs contributed to the increase in loan originations.

•Net interest margin (“NIM”) was 13.69% for the three months ended June 30, 2026, compared to 7.81% for the three months ended June 30, 2025. NIM was 13.29% for the six months ended June 30, 2026, compared to 8.03% for the six months ended June 30, 2025. NIM is impacted by income earned from interest-earning assets and interest costs incurred on interest-bearing liabilities and increased significantly for the three and six months ended June 30, 2026 compared to the same periods in 2025 due to the growth of the credit enhanced loan program.

•We generated $2.1 million and $4.1 million of net income for the three months ended June 30, 2026 and 2025, respectively, and $4.9 million and $7.3 million of net income for the six months ended June 30, 2026 and 2025, respectively. Net income declined primarily due to an increase in the provision for credit losses, driven by higher net charge-offs within the traditional banking portfolio.

•Total assets decreased by $51.8 million to $925.3 million as of June 30, 2026 compared to December 31, 2025, principally due to decreases in interest-bearing cash deposits and loans-held-for-investment, partially offset by an increase in Strategic Program loans held-for-sale.

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Results of Operations

Net Income Overview

The following table sets forth the principal components of net income for the periods indicated:

Net Interest Income and NIM

Net interest income was the primary contributor to our earnings in 2026 and 2025. Net interest income is affected by changes in the amount and mix of interest-earning assets and interest-bearing liabilities, referred to as “volume changes.” It is also affected by changes in yields earned on interest-earning assets and rates paid on interest-bearing deposits and other borrowed funds, referred to as “rate changes.”

Net interest income increased for the three months ended June 30, 2026, compared to the same period in 2025, primarily due to the increase in the credit enhanced loans and a change in estimate, based on additional information and experience, on the allocation of interest received on credit enhanced loans in excess of the amount we retain. We now estimate that all excess interest is attributable to servicing and credit guarantee expense, whereas in the prior year it had been estimated that a portion was attributable to origination costs, or finders' fees, and was reported in net interest income.

Net interest income increased for the six months ended June 30, 2026, compared to the same period in 2025, primarily due to an increase in average interest-earning assets of $133.8 million, partially offset by lower yields on interest-earning assets, and an increase in the average interest-bearing liabilities of $94.2 million mainly attributable to the increase in brokered deposits used to fund our loan growth.

NIM increased to 13.69% for the three months ended June 30, 2026 from 7.81% for the three months ended June 30, 2025 and increased to 13.29% for the six months ended June 30, 2026 from 8.03% for the six months ended

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Item 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and related notes thereto and other financial information included elsewhere in this Report.

Overview

FinWise Bancorp, Inc. is a Utah corporation and the parent company of FinWise Bank and FinWise Investment, LLC. The Company is a registered bank holding company that is subject to supervision by Utah Department of Financial Institutions (“UDFI”) and the Federal Reserve. The Company’s assets consist primarily of its investment in the Bank and all of its material business activities are conducted through the Bank. As a Utah state-chartered bank that is not a member of the Federal Reserve System, the Bank is separately subject to regulations and supervision by both the UDFI and the Federal Deposit Insurance Corporation (“FDIC”). The Bank’s deposits are federally insured up to the maximum legal limits.

Our banking business is our only business line. Our banking business offers a diverse range of commercial and retail banking products and services, and consists primarily of originating loans in a variety of sectors. Attracting nationwide deposits from the general public, businesses and other financial institutions, and investing those deposits, together with borrowings, capital and other sources of funds, is also critical to our banking business. While our commercial and residential real estate lending and other products and services offered from our branch continue to be concentrated in and around the Salt Lake City, Utah MSA, our third-party loan origination relationships have allowed us to expand into markets across the United States. These relationships were developed to support our ability to generate significant loan volume across diverse consumer and commercial markets and have been the primary source of our growth and our consistent ability to operate profitability since developing our third-party loan origination business. Our track record has demonstrated that our products and delivery of the products help deliver sustainable asset growth and strong profitability, and that the characteristics of our business model enhances our ability to manage credit risk. We gather deposits in the Salt Lake City, Utah MSA through our one branch and nationwide from our Strategic Program service providers, SBA 7(a) borrowers, institutional deposit exchanges, brokered deposit arrangements and other deposit sources.

Our financial condition and results of operations depend primarily on our ability to (i) originate loans and leases directly, or by using our strategic relationships with third-party loan origination platforms to earn interest and non-interest income, (ii) effectively manage credit and other risks throughout the Bank, (iii) attract and retain low cost, stable deposits, and (iv) efficiently operate in compliance with applicable regulations.

Our lending focuses on two main lending areas: (i) traditional lending which includes SBA 7(a) loans, residential and commercial real estate, and commercial leasing; and (ii) Strategic Programs lending which includes held-for-sale, credit enhanced, and retained loans. For a description and analysis of the Company’s loan categories, see “Financial Condition.”

Critical Accounting Estimates

The preparation of our consolidated financial statements in accordance with U.S. GAAP requires us to make estimates and judgments that affect our reported amounts of assets, liabilities, revenues, expenses and related disclosures of contingent assets and liabilities. These estimates are based on historical experience and other reasonable assumptions under current circumstances, the results of which form the basis for making judgments about the carrying value of certain assets and liabilities that are not readily determinable from other sources. We review these estimates regularly. Actual results may differ from these estimates.

Management considers the determination of our allowance for credit losses to be a critical accounting estimate, as it involves making difficult, subjective, or complex judgments about inherently uncertain matters. Changes in this estimate, whether due to evolving circumstances from period to period or the use of other reasonable assumptions, could materially affect our financial position, results of operations, or liquidity. For further details on our accounting policy related to this estimate, refer to Note 1 – Summary of Significant Accounting Policies to the consolidated financial statements included in Part II, Item 8.

Allowance for Credit Losses (“ACL”). The ACL represents management’s estimate of expected credit losses on financial assets measured at amortized cost. The ACL is evaluated and measured on a collective basis for loans that share similar risk characteristics. At each reporting date, we assess whether loans within a given pool continue to exhibit similar risk characteristics or whether certain loans should be evaluated individually. Expected credit losses are estimated over the contractual term of each loan, adjusted for expected prepayments. Accordingly, assumptions regarding loan life may have a

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significant impact on the ACL. The Company segments its loan portfolio in a manner consistent with how credit risk is managed.

The Company utilizes multiple approaches to estimate expected credit losses, depending on the loan segment:

•Approach: For certain loan segments, the Company applies a non-discounted cash flow approach using loan‑level assumptions and relevant information from internal and external sources related to historical experience, current conditions, and reasonable and supportable forecasts.

•Approach: For other loan segments, the Company employs a vintage‑based approach that evaluates cumulative loss performance by origination period. Expected losses for each product are anchored to the most severe loss experience observed for comparable vintages at a similar stage of seasoning. This methodology is designed to conservatively estimate losses over the life of the product, even for unseasoned vintages.

The ACL also includes qualitative reserves for expected losses that may not be fully captured by the quantitative models. Qualitative factors considered include, among others, general business and economic conditions, borrower financial condition, and the volume and severity of past‑due and nonaccrual loans. Based on this assessment, the Company records a provision for credit losses to maintain the ACL at a level deemed appropriate by management.

The determination of the ACL is considered a critical accounting estimate, as it requires significant judgment and the use of subjective assumptions, including management’s evaluation of overall portfolio quality. The Company maintains the ACL at an amount it believes is sufficient to cover expected credit losses inherent in the loan portfolio as of each balance sheet date. Changes in economic conditions or portfolio composition may result in fluctuations in the provision for credit losses.

The ACL increased from $13.2 million at December 31, 2024, to $36.8 million at December 31, 2025. This increase was primarily driven by growth in loan balances, including a significant increase in credit‑enhanced balances, which increased from $0.9 million at December 31, 2024 to $108.1 million at December 31, 2025. For additional information, see Note 3 – Loans to the consolidated financial statements included in Part II, Item 8.

Changes in assumptions and estimates may materially affect the ACL and, in turn, the Company’s financial position, liquidity, and results of operations. To assess the sensitivity of the ACL to changes in key assumptions, management performed a hypothetical sensitivity analysis focused on the national unemployment forecast. All model inputs and assumptions were held constant except for unemployment, which was stressed from the baseline 12-month forecast provided by Fannie Mae (ranging from 4.5% to 4.6%) to a theoretical 9.0% over the full 12 month forecast period. Incorporating this stressed forecast into both the quantitative and qualitative components of the CECL framework resulted in an incremental $1.7 million increase in the ACL, representing an approximate 4.7% increase. This stressed forecast scenario would have the allowance to total loans and leases increase from 6.3% to 6.5% at December 31, 2025.

Executive Summary

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

•Originations of total loans increased by $1.1 billion to $6.1 billion for the year ended December 31, 2025 compared to the year ended December 31, 2024. New strategic programs and organic growth through certain established strategic programs contributed to the increase in loan originations.

•Net interest margin (“NIM”) was 9.23% for the year ended December 31, 2025, compared to 9.99% for the year ended December 31, 2024. NIM is impacted by income earned from interest-earning assets and interest costs incurred on interest-bearing liabilities.

•FinWise generated net income of $16.1 million and $12.7 million for the year ended December 31, 2025 and 2024, respectively. Net income increased as we benefited from the past investment in expansion of our product offerings.

•Total assets increased by $231.2 million to $977.1 million as of December 31, 2025 compared to December 31, 2024, principally in our Strategic Program loans held-for-sale and credit enhanced Strategic Program loans held-for-investment. We believe our strong capital levels support our current and planned growth strategy.

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Fintech Relationships and Program Launches

During the year ended December 31, 2025, we developed the following relationships and program offerings with fintech companies:

•We announced our new strategic lending program with Backd Business Funding (“Backd”) to provide business installment loans to small and medium-sized businesses. We also provided Backd with access to our credit enhanced balance sheet program.

•We entered into a strategic program agreement with DreamFi, Inc. to support underserved and underbanked communities.

•We entered into a program management, network issuer processor and servicer agreement with Tallied Technologies, Inc. (“Tallied”) with the intent to deliver credit card products and card processing solutions to Fintechs, their businesses, and their customers. As a result of this partnership, FinWise issued two Mastercard co-branded credit cards and purchased an existing credit card portfolio. FinWise will serve as the issuing bank, provide compliance and risk management oversight and credit enhanced balance sheet support for the card programs.

•Launched existing partner Plannery on MoneyRailsTM for payment servicing of loans that the Bank originates.

During the year ended December 31, 2024, we entered into the following new strategic program relationships:

•FinWise Bank and Albert entered into a strategic partnership to jointly launch lending products.

•We enhanced our portfolio of private student loan products through our new strategic lending program with Earnest, to help students and their families with education financing.

•We announced our strategic payments program with FUTR Payments (formerly Hank Payments Corp.) to support automated payment processing and remittance capabilities.

•We announced our new strategic lending program with Plannery to offer a debt consolidation platform exclusively for healthcare professionals. Additionally, we are providing Plannery with access to our Credit Enhancement Program.

•We announced the launch of a new strategic lending program with PowerPay to offer consumers a simple and affordable lending solution for home improvement and e

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