UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, ~~2024~~2025

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-40721

FINWISE BANCORP

(Exact Name of Registrant as Specified in its Charter)


Utah						83-0356689
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)


756 East Winchester, Suite 100, Murray, Utah			84107
(Address of Principal Executive Offices)			(Zip Code)

(801) 501-7200

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange
on which registered

Common Stock, par value $0.001 per share

FINW

The NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes o No x

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. o

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. o

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes o No x

The aggregate market value of the registrant’s voting and non-voting common equity held by non-affiliates of the registrant as of June 30, ~~2024~~2025, the last business day of the registrant’s most recently completed second fiscal quarter, was $~~110~~162.79 million. The registrant had 13,~~216~~676,~~440~~859 shares of common stock, $0.001 par value, outstanding as of March 2016, ~~2025~~2026.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A in connection with the registrant’s ~~2025~~2026 Annual Meeting of Shareholders, which will be filed subsequent to the date hereof, are incorporated by reference into Part III of this Form 10-K. Such proxy statement will be filed with the Securities and Exchange Commission not later than 120 days following the end of the registrant’s fiscal year ended December 31, ~~2024~~2025.

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FinWise Bancorp

Table of Contents

	Cautionary Note Regarding Forward-Looking Statements	3
	Summary of Risk Factors	5
Part I
Item 1.	Business	56
Item 1A.	Risk Factors	2022
Item 1B.	Unresolved Staff Comments	4345
Item 1C	Cybersecurity	4345
Item 2.	Properties	4446
Item 3.	Legal Proceedings	4446
Item 4.	Mine Safety Disclosures	4547
Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	4648
Item 6.	[Reserved]	4648
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4749
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	7174
Item 8.	Financial Statements and Supplementary Data	7376
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	~~117~~126
Item 9A.	Controls and Procedures	~~117~~126
Item 9B.	Other Information	~~117~~126
Item 9C.	Disclosures Regarding Foreign Jurisdictions that Prevent Inspections	~~117~~126
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	~~118~~126
Item 11.	Executive Compensation	~~108~~112
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	~~118~~127
Item 13.	Certain Relationships and Related Transactions, and Director Independence	~~119~~127
Item 14.	Principal Accountant Fees and Services	~~119~~127
Part IV
Item 15.	Exhibits and Financial Statement Schedules	~~120~~128
Item 16.	Form 10-K Summary	~~123~~131
	Signatures	~~124~~132

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

In this Annual Report on Form 10-K (this “Report”), unless we state otherwise or the context otherwise requires, references to “we,” “our,” “us,” “the Company” and “FinWise Bancorp” refer to FinWise Bancorp and its wholly owned subsidiaries, FinWise Bank (which we sometimes refer to as “FinWise Bank,” “FinWise,” “the Bank” or “our Bank,”) and FinWise Investment, LLC. ~~References to “common stock” refer to our voting common stock.~~

This Report contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect ~~the~~our ~~Company’s~~ current views with respect to, among other things, future events and ~~its~~our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “might,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “project,” “projection,” “forecast,” “budget,” “goal,” “target,” “would,” “aim” and “outlook,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry and management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. The inclusion of these forward-looking statements should not be regarded as a representation by us or any other person that such expectations, estimates and projections will be achieved. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

The following factors, among others, could cause our financial performance to differ materially from that expressed in such forward-looking statements, including, but not limited to, the following:

•the success of the financial technology and banking-as-a-service (“BaaS”) industries, as well as the continued evolution of the regulation of these industries;

•the ability of our Fintech Banking and Payment Solutions service providers to comply with regulatory regimes, and our ability to adequately oversee and monitor our Fintech Banking and Payment Solutions service providers;

•~~our~~changes ~~ability~~in the laws, rules, regulations, interpretations or policies relating to ~~maintain~~financial institutions, accounting, tax, trade, tariffs, monetary and ~~grow~~fiscal ~~our~~matters, ~~relationships~~including ~~with~~the ~~our~~application ~~service~~of ~~providers~~interest rate caps or maximums;

•~~changes~~our inability ~~the~~to ~~laws,~~keep ~~rules,~~pace ~~regulations,~~with ~~interpretations~~rapid ortechnological ~~policies~~changes ~~relating~~in tothe ~~financial~~industry ~~institutions,~~or ~~accounting,~~implement ~~tax,~~new ~~trade,~~technology ~~monetary~~effectively ~~and fiscal matters,~~ including ~~the~~development ~~application~~ of ~~interest~~applications ~~rate~~utilizing ~~caps~~artificial ~~or maximums~~intelligence;

•system failure or cybersecurity breaches of our ~~ability~~network security and potential exposure to ~~keep~~fraud, ~~pace~~negligence, ~~with~~computer ~~rapid~~theft ~~technological~~and ~~changes~~cyber-crime and other disruptions in ~~the~~our ~~industry~~computer orsystems ~~implement~~relating to our development and use of new technology ~~effectively~~platforms;

•~~system~~our ~~failure~~ability orto ~~cybersecurity~~maintain ~~breaches~~and ofgrow relationships with and reliance on our ~~network~~service ~~security~~providers for core systems support, informational website hosting, internet services, online account opening and other processing services;

•~~potential~~increased ~~exposure~~national toor ~~fraud,~~regional ~~negligence,~~competition ~~computer~~in ~~theft~~the ~~and~~banking ~~cyber-crime~~ and ~~other~~financial ~~disruptions~~services inindustry ~~our~~including ~~computer~~fintech ~~systems~~companies ~~relating~~acquiring tobanks ~~our~~or ~~development~~applying ~~and~~for ~~use~~bank ~~of new technology platforms~~charters;

•~~our~~the ~~reliance~~adequacy onof ~~third-party~~our ~~service~~risk ~~providers~~management ~~for~~framework ~~core~~and ~~systems~~our ~~support,~~ability ~~informational~~to ~~website~~measure ~~hosting,~~and ~~internet~~manage ~~services,~~our ~~online~~credit ~~account~~risk ~~opening and other processing services~~effectively;

•general economic conditions and business conditions, either nationally or in our market areas;

•increased national or regional competition in the financial services industry;

•our ability to measure and manage our credit risk effectively and the potential deterioration of the business and economic conditions in our primary market areas;

•the adequacy of our risk management framework;

•the adequacy of our allowance for credit losses (“ACL”);

•the financial soundness of other financial institutions;

•changes in Small Business Administration (“SBA”) rules, regulations and loan products, including specifically the Section 7(a) program, or changes to the status of the Bank as an SBA Preferred Lender;

•changes in the existing regulatory framework for brokered deposits;

•the performance of our loan portfolio including, the value of collateral securing our loans, our levels of nonperforming assets losses from loan defaults;

•the sufficiency of the cash flows from the credit enhanced loan portfolios to absorb credit losses;

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•~~changes~~our inability ~~the~~to ~~existing~~protect ~~regulatory~~our ~~framework~~intellectual ~~for~~property ~~brokered deposits~~ and ~~potential~~the ~~reclassification~~ability ofto ~~certain~~defend ~~BaaS~~claims ~~deposits~~and aslitigation ~~brokered deposits in light~~ of ~~proposed~~infringement ~~rulemaking~~initiated oragainst ~~application of the current deposit framework by the Federal Deposit Insurance Corporation (“FDIC”) to the Bank's BaaS deposits~~us;

•~~the~~our ~~value~~ability ofto ~~collateral~~implement ~~securing~~ our ~~loans~~growth strategy and to continue to launch new products and services successfully;

•~~our~~the ~~levels~~anticipated benefits of ~~nonperforming~~any ~~assets~~new lines of business that we may enter or investments or acquisitions we may make are not realized within the expected time frame or at all;

•~~losses~~the ~~from~~concentration ~~loan~~of ~~defaults~~our lending and depositor relationships through Strategic Programs (our nationwide strategic relationship programs) in the financial technology industry generally and our ability to develop a strong core deposit base or other low-cost funding sources;

•our ability to ~~protect~~manage ~~our~~interest ~~intellectual~~rate, ~~property~~volatility and ~~the~~liquidity risks ~~we face with respect to claims~~ and ~~litigation~~the ~~initiated~~sufficiency ~~against~~of usour capital;

•the effectiveness of our internal control over financial reporting and our ability to ~~implement~~remediate any significant deficiencies or material weakness that may occur in the future in our ~~growth~~internal ~~strategy~~control over financial reporting;

•our ability to continue to launch new products or services successfully;

•the concentration of our lending and depositor relationships through Strategic Programs in the financial technology industry generally;

•interest rate and liquidity risks;

•the effectiveness of our internal control over financial reporting and our ability to remediate any future material weakness in our internal control over financial reporting;

•dependence on our management team and changes in management composition;

•~~the~~compliance ~~sufficiency~~with oflaws ~~our~~and regulations, supervisory actions, the Dodd-Frank Act, capital requirements, the Bank Secrecy Act, and other anti-money laundering laws, predatory lending laws, and other statutes and regulations;

•~~compliance~~changes ~~with~~in ~~laws and regulations~~legislative, ~~supervisory~~regulatory ~~actions,~~or ~~the~~tax ~~Dodd-Frank Act, capital requirements, the Bank Secrecy Act, anti-money laundering laws, predatory lending laws, and other statutes and regulations~~priorities;

•our ~~ability~~involvement from time to ~~maintain~~time ain ~~strong~~legal ~~core~~or ~~deposit~~regulatory ~~base~~proceedings, orincluding ~~other~~any ~~low-cost~~class ~~funding~~action ~~sources~~lawsuits;

•results of examinations of us by our regulators;

•our involvement from time to time in legal proceedings;

•natural disasters and adverse weather, acts of terrorism, pandemics, an outbreak of hostilities or other international or domestic calamities, and other matters beyond our control;

•the availability of future equity and debt issuances and other capital raising opportunities on favorable terms;

•~~that~~negative ~~the~~ratings ~~anticipated~~outlooks ~~benefits~~or ~~new~~downgrades ~~lines~~ of ~~business~~our ~~that~~credit werating ~~may enter~~ or ~~investments~~securities or ~~acquisitions we may make are not realized within~~ the ~~expected~~U.S.’s ~~time~~long-term ~~frame~~credit ~~or at all as a result of such things as the strength or weakness of the economy and competitive factors in the areas where the Company and such other businesses operate~~rating; ~~and~~

•~~other~~federal ~~factors~~government ~~that~~shutdowns ~~are~~and ~~discussed~~other ~~below~~political ~~under~~impasses, ~~Part~~including I,with ~~Item~~respect 1Ato the U.S. ~~Risk~~debt ~~Factors~~ceiling and federal budget and any reductions in staffing at U.S. governmental agencies; and

~~The~~•other ~~foregoing~~ factors ~~should~~listed ~~not~~from betime ~~construed~~to astime ~~exhaustive~~in ~~and~~our ~~should~~filings ~~be read together~~ with the ~~other~~Securities ~~cautionary~~and ~~statements~~Exchange ~~included~~Commission ~~in this Report, including those discussed in~~ (the ~~section entitled~~ “~~Risk Factors.~~SEC” ~~If one or more events related to these or other risks or uncertainties materialize~~), orincluding ifunder ~~our~~Item ~~underlying~~1A assumptions prove to be incorrect, actual results may differ materially from our forward-looking statements. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statements are based on information available to the Company as of ~~the filing date of~~ this Report, and wesubsequent doquarterly ~~not~~reports undertake any obligation to publicly update or review any forward-looking statement, whether because of new information, future developments or otherwise, except as required by law. New risks and uncertainties may emerge from time to time, and it is not possible for us to predict their occurrence. In addition, we cannot assess the impact of each risk and uncertainty on ~~our~~Form ~~business or the extent to which any risk or uncertainty, or combination of risks and uncertainties, may cause actual results to differ materially from those contained in any forward~~10-~~looking statements~~Q.

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this Report, including those discussed in Item 1A Risk Factors. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from our forward-looking statements. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statements are based on information available to the Company as of the filing date of this Report, and we do not undertake any obligation to publicly update or review any forward-looking statement, whether because of new information, future developments or otherwise, except as required by law. New risks and uncertainties may emerge from time to time, and it is not possible for us to predict their occurrence. In addition, we cannot assess the impact of each risk and uncertainty on our business or the extent to which any risk or uncertainty, or combination of risks and uncertainties, may cause actual results to differ materially from those contained in any forward-looking statements.

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SUMMARY OF RISK FACTORS

Our business, ~~financial~~is ~~condition~~subject ~~and~~to ~~results~~a number of ~~operations~~risks ~~are~~and ~~subject to~~ a ~~number~~summary of ~~substantial~~the ~~risks~~significant ~~and~~risk ~~uncertainties~~factors is set forth below. These risks are discussed more fully below under Part I, Item 1A. Risk Factors. ~~Some~~and ofshould ~~these~~be ~~risks~~read ~~include~~together ~~the~~with ~~following:~~this summary and considered along with other information contained in this annual report before investing in our securities.

~~•third-party~~Risks ~~service~~Related ~~provider risk, including risks that we may be unable~~ to ~~maintain~~Our orBanking ~~increase loan originations facilitated through our Strategic Programs;~~Business:

•~~legal,~~Risks ~~accounting~~related ~~and~~to ~~compliance~~the ~~risks~~loans we make, including ~~risks~~the ~~related~~heightened risk associated with construction loans, loans to ~~the~~small-to-medium ~~extensive~~sized ~~state~~businesses, ~~and~~concentration ~~federal~~of ~~regulation~~large ~~under~~loans ~~which~~to wea ~~operate~~limited number of borrowers and ~~changes~~with inrespect to secured loans, the value of the assets collateralizing such ~~regulations;~~loans

•~~changes~~Risks inrelated ~~the~~to ~~regulatory~~our ~~oversight~~SBA ~~environment~~lending ~~impacting~~program including our ~~Strategic~~dependency ~~Programs~~on orthe ~~non-compliance~~U.S. of federal government and ~~state~~our ~~consumer~~reliance ~~protection~~on ~~laws~~Business byFunding ~~our~~Group, ~~Strategic~~LLC ~~Program~~(“BFG”) ~~service~~for ~~providers~~loan referrals in originating loans under the program;

•~~legal~~Adverse ~~and~~changes ~~regulatory~~to ~~risks~~regional ~~associated~~economies, particularly those with ~~“true~~a ~~lender”~~concentration ~~statutes~~of ~~associated~~commercial ~~with~~and consumer banking clients that participate in our ~~Strategic~~real ~~Programs~~estate lending program and SBA 7(a) lending program;

•~~reputational~~Inability ~~risks,~~to ~~including~~measure ~~the~~our credit risk ~~that~~adequately weand ~~may~~insufficiency befor ~~subject to negative publicity about us or~~ our ~~industry,~~allowance ~~including~~for ~~the~~credit ~~transparency,~~losses ~~fairness,~~to ~~user~~absorb ~~experience,~~potential ~~quality,~~losses ~~and~~in ~~reliability of~~ our ~~lending~~loan ~~products or distribution channels~~portfolio;

•~~legislative,~~Challenges ~~regulatory,~~with ~~legal~~managing interest rate risk, including fluctuations and ~~reputational~~volatility ~~risks~~that ~~related~~could toimpact our ~~Strategic~~lending ~~Programs,~~strategy ~~including~~and ~~those~~value ~~relating~~of to our ~~small~~loan ~~dollar lending program;~~portfolio

•~~securities~~Our ~~market,~~ability ~~inflation~~to ~~and~~manage ~~interest~~our ~~rate~~liquidity ~~risks~~appropriately, including ~~risks~~deposit ~~related~~run-off torisk ~~interest rate fluctuations~~ and ~~the~~challenges ~~monetary~~with ~~policies~~raising ~~and~~additional ~~regulations~~capital ofon ~~the~~favorable ~~Board~~terms ~~of Governors of the Federal Reserve System,~~ or ~~the~~at ~~Federal Reserve~~all;

•~~risks~~Competition ~~related~~among toother ~~cybersecurity~~financial ~~breaches~~services companies that offer banking and ~~system~~lending ~~failures~~services, including the recent pursuit of bank charters by fintech companies;

•~~operational~~The ~~and~~significant ~~strategic~~reliance ~~risks,~~on ~~including the risk that we may not be able to implement~~ our ~~growth~~executive ~~strategy,~~management ~~our~~team ~~continued ability to establish relationships with Strategic Program service providers,~~ and ~~the~~other ~~possible loss of~~ key ~~members of our senior leadership team~~employees;

•~~credit~~Our ~~risks,~~ability ~~including risks related~~ to ~~the~~grow ~~significance~~our ofrevenue ~~SBA~~through ~~7(a),~~mergers ~~Strategic~~and ~~Programs~~acquisitions and/or ~~construction~~new ~~loans~~lines inof ~~our portfolio~~business, ~~our~~new ~~relationship~~products ~~with~~and ~~BFG,~~services ~~our~~that ~~ability~~we tomay ~~effectively~~offer ~~manage~~and ~~our~~additional ~~credit~~merchant ~~risk~~relationships and the ~~potential~~risks ~~deterioration~~associated ofwith ~~the~~such ~~business~~potential ~~and economic conditions in our markets~~growth;

•~~liquidity~~Risks ~~and~~related ~~funding risks, including the risk that we will not be able~~ to ~~meet~~ our ~~obligations~~agreements ~~due~~and torelationships ~~risks~~with ~~relating~~Fintech toBanking ~~our~~and ~~funding~~Payment ~~sources~~Solutions; ~~and~~

•~~investment~~The ~~risks,~~ability ~~including~~to ~~volatility~~maintain ineffective ~~the~~internal ~~trading~~controls ofover ~~our~~financial ~~common~~reporting, ~~stock~~including the reliability and ~~limitations~~understanding onof ~~our~~the ~~ability~~presentation toof ~~pay~~our ~~dividends.~~financial statements;

•Operational risks including customer, employee or third-party vendor fraud or error;

•The impact that weak economic conditions may have on the financial services industry;

•The impact of acts of terrorism, geopolitical and other external events may have on our ability to conduct our business;

Risks Related to Our Strategic Programs:

•Risks related to the existing and new regulations imposed on us and our Strategic Program service providers that continue to impact our ability to make certain loans, including “true lender” loans originated through marketplaces found to violate state usury laws;

•Our ability to maintain relationships with our Strategic Program service providers;

•Our reliance on deposit accounts with our Strategic Program service providers that serves as an important source of funding;

•Risks related to fraudulent activity and the dependency of accuracy and completeness of information provided by our Fintech Banking and Payment Solutions service providers;

Risks Related to Technology:

•Risks related to system failure or cybersecurity breaches of our network security;

•Failure to extensively test our proprietary technologies and analytic models;

•The inability to keep pace with rapid technological changes or implement new technology effectively, including the development and use of artificial intelligence;

•Our ability to protect and enforce our intellectual property rights and proprietary technology;

•Risks related to the interruption of our operations if our third-party service providers or Strategic Program service providers experience operational or other systems difficulties;

Risks Related to Regulatory, Legal and Compliance:

•Risks associated with the highly regulated environment in which we operate, including the effects of heightened regulatory and supervisory requirements, expectations and scrutiny in the U.S. leading to increased compliance, regulatory and other risks and costs and subject us to legal and regulatory examinations, investigations and enforcement actions;

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•Risks related to maintaining adequate regulatory capital to support our business strategies including the long-term impact of the regulatory capital standards and the capital rules of U.S. banks;

•Risks related to our use of third-party service providers and our other ongoing third-party business relationships, which are subject to increasing regulatory requirements and attention;

•Risks related to litigation and regulatory actions, including enforcement actions, which could subject us to significant fines, penalties, judgments or other requirements resulting in increased expenses or restrictions on our business activities;

•Risks associated to us being subject to numerous local, state and federal laws and regulations and to regular examinations by our regulators of our business and compliance with laws and regulations;

•Risks related to the FDIC’s restoration plan and related increased assessment rates;

•Risks related to reviews performed by the IRS and state taxing authorities and potential changes in U.S. federal, state or local tax laws;

•Risks related to privacy regulations, information security and data protection that could increase our costs, affect or limit how we collect and use personal information;

•Risks related to climate change and related legislative and regulatory initiatives, as well as evolving ESG expectations;

Risks related to Ownership of our Common Stock:

•Risks related to substantial fluctuations in the pricing of our common stock;

•Risks related to management and the board having significant control over our business; and

•Risks related to provisions in our governing documents and Utah law having an anti-takeover effect and restricting limitations on dividends.

PART I

Item 1. BUSINESS

Overview

We are FinWise Bancorp, a Utah bank holding company headquartered in Murray, Utah. We operate through our wholly-owned subsidiary, FinWise Bank, a Utah state-chartered bank. Our business is conducted through three reportable segments: traditional banking, banking as a service (“BaaS”) and treasury & administration. We currently operate one full-service banking location in Sandy, Utah. We are a nationwide lender to consumers and small businesses. We believe that traditional barriers to servicing banking customers have been substantially lowered due to technological advances in the distribution and management of banking products and services. We seek to capitalize on these advances by leveraging strategic relationships, as well as proprietary loan origination systems and data analytics technology, to expand our reach in marketing channels utilized and credit products offered. As a technology-focused bank, we have utilized technology-oriented loan origination platforms in our Strategic Programs, SBA lending, Residential & Owner Occupied Commercial Real Estate, and Equipment Financing business lines. We have also deployed our own in-house technology to deliver loan and deposit solutions to our customers directly and through third parties.

The Company was formed in 2002 and acquired 100% of the stock of Utah Community Bank, a local community bank founded in 1999 focusing on real estate lending in and around the Salt Lake City, Utah metropolitan statistical area (“MSA”). While the Bank is our primary asset we also have a 20% membership interest in BFG, a Connecticut limited liability company, a nationally significant referral source for SBA loans and a legal lending facilitator. As described below, we have a right of first refusal to purchase additional interests in BFG from any selling member along with an option to purchase all of the interests from the remaining members through January 1, 2028. See “Our Relationship with Business Funding Group” below.

5We originate, sell or hold loans in four main lending areas: (i) nationwide Strategic Programs, (ii) a multi-state SBA 7(a) lending program, (iii) residential and owner occupied commercial real estate lending, and (iv) multi-state equipment financing. We have principally relied on wholesale funding sources (brokered deposits, health savings accounts, and institutional deposits) to fund our lending activities but also have core deposits, on-line deposits and have utilized borrowings when we deem them appropriate.

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significant referral source for SBA loans and a legal lending facilitator. As described below, we have a right of first refusal to purchase additional interests in BFG from any selling member along with an option to purchase all of the interests from the remaining members through January 1, 2028. See “Our Relationship with Business Funding Group” below.

We originate, sell or hold loans in four main lending areas: (i) nationwide Strategic Programs, (ii) a multi-state SBA 7(a) lending program, (iii) residential and owner occupied commercial real estate lending, and (iv) multi-state equipment financing. We have principally relied on wholesale funding sources (brokered deposits, health savings accounts, and institutional deposits) to fund our lending activities but also have core deposits, and have utilized borrowings when we deem appropriate.

FinWise Bancorp serves as a registered bank holding company with respect to the Bank, subject to regulation and examination by the Utah Department of Financial Institutions (“UDFI”) and the Federal Reserve Board. FinWise Bancorp currently does not engage in any material business activity other than those relating to owning all of the capital stock of FinWise Bank.

Our Relationship with Business Funding Group

BFG is a nationally significant referral source of small business loans. Included in these loans are SBA loans to be funded by financial institutions and other SBA lenders. BFG works alongside a network of over 50 banks to refer business loans to small, independent businesses across various industries. Our relationship with BFG is an important component of our diversification strategy. Since the launch of our SBA lending program in 2014, BFG has been the primary source of SBA loan referrals for the Bank. In consideration of marketing and referral services provided to the Bank, BFG receives a fee for SBA loans referred to the Bank that are closed and funded by the Bank. The fees on each SBA loan referred to the Bank by BFG are determined on a loan-by-loan basis and based on the amount and terms of the principal SBA loan. The methodology for determining such fees has been substantially consistent since 2019. Such fees are disclosed on SBA Form 159 and filed with SBA for each funded loan.

In January 2016, in contemplation of BFG acquiring voting securities of the Company, we entered into an agreement (the “Standstill Agreement”) with BFG whereby BFG agreed to abstain from certain actions that may evidence control of the Company. However, BFG did not and has not ever directly acquired voting securities of the Company, although four individuals associated with BFG did acquire shares of the Company as described below.

Between March 2018 and July 2018, in exchange for cash proceeds, we sold 1,476,090 shares representing approximately 23.4% of our issued and outstanding common stock at the time of such sale to four individuals associated with BFG and one individual not associated with BFG pursuant to change in control applications filed with the Federal Reserve Bank (“FRB”) and UDFI. The FRB determined that these five individuals were acting in concert, but that the shares purchased by the five individuals were not attributable to BFG for purposes of the Bank Holding Company Act of 1956, as amended.

In December of 2019, we acquired directly from four of the five individuals who acquired our shares in 2018, a 10% ownership interest in BFG in exchange for 950,784 newly issued shares of our common stock, representing 10.9% of our common stock outstanding at the time of purchase. The UDFI approved the acquisition of the additional shares of our common stock in the exchange by the four individuals and the FRB did not object, provided that no individual owns more than 9.9% of our issued and outstanding common stock (as calculated in accordance with the rules and regulations of the FRB).

To strengthen our relationship with BFG, we negotiated a right of first refusal and an option to acquire 100% of BFG. Subject to the terms of that certain Right of First Refusal and Option Agreement, dated as of March 31, 2020, we were granted an option to acquire all of the ownership interests in BFG at any time from January 1, 2021, to January 1, 2028, at an earnings multiple of 10 to 15 times BFG’s net profit based on the fiscal year ended immediately prior to the exercise of the option. In addition, we have a right of first refusal, prior to our exercise of our option, to acquire any ownership interests that any individual owner of BFG wishes to sell. As consideration for the right of first refusal and option, we issued warrants to each BFG member (other than the Company) with the right to acquire shares of our common stock on a pro rata basis according to each such person’s percentage ownership in BFG, not exceeding an aggregate of 270,000 shares, at an exercise price of $6.67 per share. Unless otherwise exercised, the warrants will expire on March 31, 2028. Other than the Right of First Refusal and Option Agreement and the Standstill Agreement, there are no other agreements between us and BFG or among our respective shareholders.

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stock in a private placement to the sellers in exchange for the additional membership interest in BFG. The second transaction increased the Company’s total ownership interest in BFG to 20%. The ownership interest consists of Class A Voting Units representing 4.7% of the aggregate membership interests of BFG and Class B Non-Voting Units representing 15.3% of the aggregate membership interests of BFG.

BFG is not an affiliate of the Bank as defined under the Federal Reserve Act and Regulation W promulgated thereunder. Accordingly, we are not subject to restrictions imposed by Regulation W with respect to transactions with BFG, and we are not aware of any other regulatory restrictions on the business relationship between the Bank and BFG.

Lending Activities

We maintain a diversified loan portfolio in terms of the types of loan products it contains and customer characteristics, with a focus on individual consumers and small businesses.

~~The~~Loans ~~following table presents the composition of our loans held~~Held-for-~~investment portfolio by lending program, as of December 31, 2024:~~Investment

($ in thousands)	Total Loans		% of Loans inCategory ofTotal Loans
SBA	$	255,056	54.8	%
Commercial leases	70,153		15.1	%
Commercial, non-real estate	3,691		0.8	%
Residential real estate	51,574		11.1	%
Strategic Program loans	20,122		4.3	%
Commercial real estate:
Owner occupied	41,046		8.8	%
Non-owner occupied	1,379		0.3	%
Consumer	22,212		4.8	%
Total	$	465,233	100.0	%

The following table presents the composition of our loans held-for-investment portfolio by lending program, as of December 31, 2025:

Note: SBA loans in the table above include $158.7 million of SBA 7(a) loan balances that are guaranteed by the SBA.


($ in thousands)	Total Loans		% of Loans in Category of Total Loans
SBA	$	205,615	35.1	%
Commercial leases	78,743		13.4	%
Commercial, non-real estate	4,201		0.7	%
Residential real estate	59,602		10.2	%
Strategic Program loans	129,768		22.2	%
Commercial real estate:
Owner occupied	84,016		14.3	%
Non-owner occupied	1,638		0.3	%
Consumer	21,926		3.8	%
Total	$	585,509	100.0	%

~~SBA~~Note: ~~7(a) Loans. Since 2014, we have utilized relationships with third parties (primarily BFG) to originate loans partially guaranteed by the~~ SBA, ~~to small businesses and professionals. Once originated, we will either retain the~~ loans ~~or sell the SBA-guaranteed portion (generally 75% of the principal balance) of the loans we originate at a premium~~ in the ~~secondary~~table ~~market~~above ~~while~~include retaining all servicing rights and the unguaranteed portion. Loan terms generally range from 120 to 300 months and interest rates generally range from the prime rate plus 200 basis points to the prime rate plus 275 basis points, as adjusted quarterly. During the year ended December 31, 2024, we originated approximately $68102.~~2 million in SBA~~ 7~~(a)~~ ~~loans and held approximately $255.1~~ million of SBA 7(a) ~~loans~~loan onbalances ~~our~~that ~~balance~~are ~~sheet as of December 31, 2024 of which $158.7 million was~~ guaranteed by the SBA ~~and $96~~.3 ~~million was unguaranteed. As of December 31, 2024, our loan portfolio is comprised of 20.7% in unguaranteed portions of SBA 7(a) loans and 34.1% in guaranteed portions of SBA 7(a) loans.~~

~~The~~ SBA’s 7(a) ~~program~~Loans. ~~provides~~Since ~~75%~~2014, ~~85%~~we have utilized relationships with third parties (primarily BFG) to originate loans partially guaranteed by the SBA, to small businesses and ~~90%~~professionals. ~~guarantees~~Once ~~for~~originated, ~~eligible~~we will either retain the loans or sell the SBA-guaranteed 7portion (agenerally 75% of the principal balance) of the loans we originate at a premium in the secondary market while retaining all servicing rights and the unguaranteed portion. ~~The~~Loan ~~maximum~~terms generally range from 120 to 300 months and interest rates generally range from the prime rate plus 200 basis points to the prime rate plus 275 basis points, as adjusted quarterly. During the year ended December 31, 2025, we originated approximately $116.7 million in SBA 7(a) ~~loan~~loans ~~amount~~and isheld approximately $5205.6 million. ~~The~~of ~~guaranty~~SBA is7(a) ~~conditional~~loans ~~and~~on ~~covers~~our abalance ~~portion~~sheet as of ~~the~~December 31, ~~risk~~2025 of ~~payment~~which ~~default~~$102.7 million was guaranteed by the ~~borrower~~SBA and $102.9 million was unguaranteed. As of December 31, ~~but~~2025, ~~not~~our ~~the~~loan ~~risk~~portfolio is comprised of ~~improper~~17.6% ~~closing~~in unguaranteed portions of SBA 7(a) loans and ~~servicing~~17.5% byin ~~the~~guaranteed ~~lender~~portions of SBA 7(a) loans.

The SBA’s 7(a) program provides 75%, 85% and 90% guarantees for eligible SBA 7(a) loans. The maximum 7(a) loan amount is $5.0 million. The guaranty is conditional and covers a portion of the risk of payment default by the borrower, but not the risk of improper closing and servicing by the lender.

Our existing SBA 7(a) lending program is supported by referrals from BFG and others. BFG refers SBA loan applicants to the Bank for review and consideration. Only the Bank in its sole capacity has the authority to approve SBA loan applications. In all circumstances, the Bank has the right to decline an SBA loan referred by BFG that is deemed not to meet its credit standards. The Bank in its sole capacity has the discretion to determine whether to sell or retain the guaranteed portion of any or all SBA loans it funds. Fees are not paid based on the secondary market premium received or the amount sold.

Commercial Leases. 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. These leases are generally secured by liens on business assets. Historically, we have retained these leases on our balance sheet for investment. As of December 31, 2025, our commercial leases comprised 13.4% of the Bank’s loans held-for-investment portfolio.

Commercial Non-Real Estate Loans. Commercial non-real estate includes loans made to commercial enterprises that are not secured by real estate. Any loan, line of credit, or letter of credit (including any unfunded commitments), and any interest the Bank obtains in such loans made by another lender, to individuals, sole proprietorships, partnerships,

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~~Commercial~~corporations, ~~Leases~~or other business enterprises for commercial, industrial, agricultural, or professional purposes, but not for personal expenditure purposes are included in this 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. These ~~leases~~loans are generally secured by liens on business assets. Historically, we have retained these ~~leases~~loans on our balance sheet for investment. As of December 31, ~~2024~~2025, our commercial ~~leases~~non-real estate loans comprised 150.17% of the Bank’s loans held-for-investment portfolio.

Residential and Commercial ~~Non-~~Real Estate Loans. ~~Commercial~~We ~~non-real~~operate ~~estate~~a ~~includes~~single ~~loans~~branch ~~made~~location toin ~~commercial~~Sandy, ~~enterprises that are not secured by real estate~~Utah. ~~Any~~From ~~loan,~~this ~~line of credit~~branch, orwe ~~letter~~offer ofcommercial ~~credit~~and ~~(including~~consumer ~~any~~banking ~~unfunded~~services ~~commitments),~~throughout ~~and any interest~~ the ~~Bank~~greater ~~obtains~~Salt inLake ~~such~~City, ~~loans~~Utah ~~made~~MSA. byThese ~~another~~products ~~lender,~~are todelivered ~~individuals,~~using ~~sole~~a ~~proprietorships,~~high-touch ~~partnerships~~service, ~~corporations,~~relationship orbanking ~~other~~approach. ~~business~~The ~~enterprises~~majority ~~for~~of ~~commercial,~~the ~~industrial,~~lending ~~agricultural,~~product orconsists ~~professional~~of ~~purposes,~~residential ~~but~~non-speculative ~~not~~construction ~~for~~loans ~~personal~~which ~~expenditure~~generate ~~purposes~~both ~~are~~non-interest ~~included~~income inand ~~this~~interest ~~category~~income. ~~Underwriting~~Construction isloan terms generally ~~based~~range onfrom ~~commercial~~9 ~~credit~~to ~~metrics~~12 ~~where~~months ~~the~~and ~~primary~~interest ~~repayment~~rates ~~source~~currently isrange ~~borrower~~from ~~cash~~the ~~flow,~~prime ~~secondary~~rate isto ~~personal~~the ~~guarantor~~prime ~~cash~~rate ~~flow~~plus ~~(when~~200 ~~applicable)~~basis ~~and~~points. ~~tertiary~~All is the ~~sale~~loans ofgenerated ~~collateral~~through ~~pledged.~~this ~~These~~branch ~~loans~~ are ~~generally~~held ~~secured by liens~~ on ~~business assets. Historically, we have retained these loans on~~ our balance sheet ~~for investment~~. As of December 31, ~~2024~~2025, our ~~commercial non~~branch-~~real~~based ~~estate~~banking ~~loans~~operations ~~comprised~~consisted 0of approximately $121.8%2 million in loans of which the ~~Bank’s~~majority ~~loans~~are ~~held-for-investment~~residential ~~portfolio~~and commercial real estate loans.

~~Residential~~Primarily, our loans secured by real estate are made to established builders to construct residential properties, loans to developers of commercial real estate investment properties and ~~Commercial~~residential ~~Real~~developments ~~Estate~~and ~~Loans.~~loans Weto ~~operate~~individual aconsumers ~~single~~for ~~branch~~construction ~~location~~of single-family homes in ~~Sandy,~~our ~~Utah~~market areas. ~~From~~Our ~~this~~commercial ~~branch,~~real weestate ~~offer~~loans ~~commercial~~primarily include owner-occupied and ~~consumer~~investment ~~banking~~real ~~services~~estate ~~throughout~~deeds of trust. We also make loans for the ~~greater~~acquisition ~~Salt~~of ~~Lake~~undeveloped ~~City~~land. As of December 31, ~~Utah~~2025, ~~MSA.~~our ~~These~~residential ~~products~~real ~~are~~estate ~~delivered~~loans ~~using~~comprised a10.2% ~~high~~of the Bank’s loans held-~~touch~~for-investment ~~service~~portfolio, ~~relationship~~and ~~banking~~our ~~approach~~commercial real estate loans comprised 14.6% of the Bank’s loans held-for-investment portfolio. The majority of ~~the~~our ~~lending~~commercial ~~product~~real ~~consists~~estate ofloans ~~residential~~are ~~non-speculative~~owner ~~construction~~occupied commercial real estate loans which ~~generate~~comprise ~~both~~14.3% ~~non-interest~~of ~~income~~the ~~and~~Bank's ~~interest~~loans ~~income~~held-for-investment portfolio. Construction ~~loan~~loans ~~terms~~are ~~generally~~typically ~~range~~disbursed ~~from~~as 9construction toprogresses 12and ~~months~~carry ~~and~~variable interest rates. ~~currently~~Our ~~range~~construction ~~from~~and ~~the~~development ~~prime~~loans ~~rate~~typically tohave ~~the~~terms ~~prime~~that ~~rate~~range ~~plus~~from ~~200~~six ~~basis~~months ~~points.~~to ~~All~~nine ~~the~~months ~~loans~~but ~~generated~~may ~~through~~be ~~this~~extended ~~branch~~depending ~~are~~on ~~held~~factors onsuch ~~our~~as ~~balance~~the ~~sheet.~~type Asand size of ~~December 31,~~the ~~2024,~~development ~~our~~and ~~branch-based~~the ~~banking~~financial ~~operations~~strength ~~consisted~~ of ~~approximately~~the ~~$67~~borrower/guarantor.~~7 million~~ inLoans ~~loans~~are ~~(including~~typically ~~approximately~~structured ~~$64.2 million~~with ofan ~~residential~~interest only construction period and ~~commercial~~mature ~~real~~at ~~estate~~the ~~loans)~~completion of construction.

Strategic Programs. We have established Strategic Programs with various third-party consumer and commercial loan origination platforms that use technology to streamline the origination of consumer and small commercial loans. We have selectively retained a portion of the Strategic Program loans or receivables based on the capacity and risk appetite of the Bank with the majority of Strategic Program originations being sold to investors. Our Strategic Programs loans held-for-investment cover a wide range of borrower credit profiles, loan terms and interest rates. During the fourth quarter of 2024 we began offering a credit enhanced product for certain programs whereby the program will absorb all credit and fraud losses. During the year ended December 31, ~~2024~~2025, we originated approximately $45.97 billion in Strategic Program loans and had approximately $20129.18 million in Strategic Program loans held-for-investment on our balance sheet at December 31, ~~2024~~2025, of which $108.1 million was associated with the credit enhanced program. As of December 31, ~~2024~~2025, our Strategic Program held-for-investment loans comprised of 422.32% of the Bank’s loan portfolio.

~~Primarily,~~Consumer ~~our~~Loans. Consumer loans ~~secured~~consist byprimarily ~~real~~of ~~estate~~loans ~~are~~originated ~~made~~through toour ~~established~~Point ~~builders~~of toSale ~~construct~~(“POS”) ~~residential~~program. ~~properties~~Since 2011, ~~loans~~the toBank ~~developers~~has ofoffered ~~commercial~~collateralized ~~real~~and ~~estate~~uncollateralized ~~investment~~loans ~~properties~~without ~~and~~prepayment ~~residential~~penalties ~~developments~~to finance the purchase of retail goods and ~~loans~~services. toLoan ~~individual~~applications ~~consumers~~are ~~for~~submitted ~~construction~~at ofthe ~~single~~point-~~family~~of-sale ~~homes~~through inan ~~our~~online ~~market areas~~portal. ~~Our~~Historically, ~~commercial~~all ~~real~~of ~~estate~~the loans ~~primarily~~originated ~~include~~through ~~owner-occupied~~our ~~and~~POS ~~investment~~lending ~~real~~program ~~estate~~have ~~deeds~~been ofheld ~~trust~~on our balance sheet. We ~~also~~target ~~make~~super ~~loans~~prime ~~for~~(FICO ~~the~~score ~~acquisition~~ of ~~undeveloped~~720 ~~land.~~and Ashigher), prime (FICO score of ~~December 31,~~661 ~~2024,~~through ~~our~~719) ~~residential~~and ~~real~~near-prime ~~estate~~(FICO ~~loans~~score ~~comprised~~of 11640 through 660) borrowers.1% ofLoan ~~the~~terms ~~Bank’s~~are ~~loans~~generally ~~held-for-investment~~60 ~~portfolio,~~months and ~~our~~interest ~~commercial~~rates ~~real~~current ~~estate~~range ~~loans~~from ~~comprised 9~~7.10% ofto ~~the~~14.5%. ~~Bank’s~~We ~~loans~~utilize ~~held-for-investment~~a ~~portfolio. The~~high ~~majority~~degree of ~~our~~automation ~~commercial~~in ~~real~~this ~~estate~~program ~~loans~~and ~~are~~track ~~owner~~loan ~~occupied~~applications, ~~commercial~~analyze ~~real~~credit ~~estate~~and approve loans ~~which~~by ~~comprise~~deploying ~~8.8%~~a combination of ~~the~~internal ~~Bank's~~and ~~loans held~~“off-~~for~~the-~~investment~~shelf” ~~portfolio~~technology solutions. ~~Construction~~The ~~loans~~majority ~~are~~of ~~typically~~the ~~disbursed~~approximately $21.9 million in consumer loans outstanding as ~~construction~~of ~~progresses~~December 31, ~~and~~2025, ~~carry~~that ~~variable~~were ~~interest~~not ~~rates.~~generated ~~Our~~through ~~construction~~our ~~and~~Strategic ~~development~~Programs ~~loans~~were ~~typically~~originated ~~have~~in ~~terms~~connection ~~that~~with ~~range~~our ~~from~~POS ~~six~~lending ~~months~~program. toDuring ~~nine~~the ~~months~~year ~~but~~ended ~~may~~December 31, be2025, ~~extended~~we ~~depending~~originated onapproximately ~~factors~~$11.6 ~~such~~million asin ~~the~~POS ~~type~~loans and ~~size~~held approximately $21.9 million of ~~the~~POS ~~development~~loans ~~and~~on ~~the~~our ~~financial~~balance ~~strength~~sheet as of ~~the~~December 31, ~~borrower/guarantor~~2025. ~~Loans~~As ~~are~~of ~~typically~~December 31, ~~structured~~2025, ~~with~~our anconsumer ~~interest~~loans ~~only~~comprised ~~construction~~3.8% ~~period~~of ~~and~~the ~~mature~~Bank’s attotal ~~the~~loans ~~completion~~held-for-investment ~~of construction~~portfolio.

~~Consumer~~Strategic Program Loans. Consumer loans consist primarily of loans originated through our Point of Sale (“POS”) program. Since 2011, the Bank has offered collateralized and uncollateralized loans without prepayment penalties to finance the purchase of retail goods and services. Loan applications are submitted at the pointHeld-offor-sale through an online portal. Historically, all of the loans originated through our POS lending program have been held on our balance sheet. We target super prime (FICO score of 720 and higher), prime (FICO score of 661 through 719) and near-prime (FICO score of 640 through 660) borrowers. Loan terms are generally 60 months and interest rates current range from 7.0% to 14.5%. We utilize a high degree of automation in this program and track loan applications, analyze credit and approve loans by deploying a combination of internal and “off-the-shelf” technology solutions. The majority of the approximately $22.2 million in consumer loans outstanding as of December 31, 2024, that were not generated through our Strategic Programs were originated in connection with our POS lending program. During the year ended December 31, 2024, we originated approximately $19.2 million in POS loans and held approximately $21.2 million of POS loans on our balance sheet as of Sale

The majority of originations of Strategic Program loans as described above are not maintained by us as loans held-for-investment. The terms of our Strategic Programs generally require each Strategic Program platform to establish a reserve deposit account with the Bank or another financial institution, intended to protect the Bank in the event a purchaser of loan

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~~December 31~~receivables originated through our Strategic Programs cannot meet its contractual obligation to purchase. This amount is usually set at a 1:1 ratio but may be restructured in certain circumstances as the relationship seasons or if the Strategic Program platform is an established company. Collateral may include deposits held at the Bank, ~~2024~~at another institution where the Bank has control of the account or a combination of deposits and other vehicles such as letters of credit. AsBusiness checking and money market demand accounts associated with Strategic Program relationships held balances of approximately $130.8 million (including $53.4 million held as collateral) as of December 31, ~~2024,~~2025. ~~our~~At ~~consumer~~December 31, ~~loans~~2025, ~~comprised~~we 4had $146.8%5 ofmillion ~~the~~in ~~Bank’s~~Strategic ~~total~~Program loans held-for-~~investment portfolio~~sale.

Strategic Program Loans held-for-sale. The majority of originations of Strategic Program loans as described above are not maintained by us as loans held-for-investment. The terms of our Strategic Programs generally require each Strategic Program platform to establish a reserve deposit account with the Bank or another financial institution, intended to protect the Bank in the event a purchaser of loan receivables originated through our Strategic Programs cannot meet its contractual obligation to purchase. This amount is usually set at a 1:1 ratio but may be restructured in certain circumstances as the relationship seasons or if the Strategic Program platform is an established company. Collateral may include deposits held at the Bank, at another institution where the Bank has control of the account or a combination of deposits and other vehicles such as letters of credit. Business checking and money market demand accounts associated with Strategic Program relationships held balances of approximately $113.6 million (including $54.0 million held as collateral) as of December 31, 2024. At December 31, 2024, we had $91.6 million in Strategic Program loans held-for-sale.

Credit Administration and Loan Review

We maintain asset quality through an emphasis on market knowledge, long-term customer relationships, analysis of data, consistent and thorough underwriting for all loans, surveillance and monitoring of our loan portfolio and a risk-based credit culture. We seek to maintain a broadly diversified loan portfolio in terms of type of loan product, credit demographic, geographic area and in respect of our commercial customers, the industries in which they are engaged. We control credit risk both through disciplined underwriting of each transaction, as well as active credit management processes and procedures to manage risk and minimize loss throughout the life of a loan, and our loan policies establish the basic guidelines governing our lending operations.

Traditional Loan Portfolio

Underwriting. In evaluating credit, we use both judgmental and statistically based approaches, depending on the specific credit product.

In taking the judgmental approach, we evaluate each potential loan relationship and adhere to a disciplined underwriting evaluation process that includes the following:

•understanding the customer’s financial condition and ability to repay the loan;

•evaluating management performance and expertise and industry experience;

•verifying that the primary and secondary sources of repayment are adequate in relation to the amount and structure of the loan;

•observing appropriate loan-to-value guidelines for collateral secured loans;

•maintaining our targeted levels of diversification for the loan portfolio, both as to type of borrower and type of collateral; and

•ensuring that each loan is properly documented with perfected liens on collateral.

In taking the statistical approach, we rely on data and automation to inform our credit decision-making. We create standardized underwriting criteria that are uniformly and consistently applied to each product. When originating with a third party, we review and approve the credit approval models prior to the launch of the lending program. These models are also periodically validated by independent third parties in accordance with regulatory guidance. For retained portfolios, we conduct vintage analyses to ensure credit is performing as expected.

Loan Approval Authority. Our lending activities follow written, non-discriminatory underwriting standards and loan origination procedures established by our board of directors and management. We have established several levels of lending authority that have been delegated by the board of directors to our loan committee and other personnel in accordance with our loan policy. The thresholds associated with lending authorities vary by loan product. Our loan committee is comprised of our Chief Executive Officer~~, our~~ /President, our Chief Credit Officer, our Chief Financial Officer, certain other members of management and select senior loan officers, which is primarily responsible for day-to-day implementation and oversight of our loan approval procedures. The levels of lending authority are periodically reviewed by the Bank’s board of directors. Authority limits are based on the total exposure of the borrower, the loan product, and are conditioned on the loan conforming to the standards contained in the loan policy. Any loan policy exceptions are appropriately monitored and fully disclosed to the approving authority. We believe that our credit approval process provides for thorough underwriting and efficient decision making.

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~~exceptions~~well ~~are~~as ~~appropriately~~the ~~monitored~~larger credits in the portfolio. Once a loan is identified as a problem loan or a loan requiring a workout, the Bank makes an evaluation and ~~fully~~develops ~~disclosed~~a toplan for handling the ~~approving~~loan. ~~authority~~In developing such a plan, management reviews all relevant information from the loan file and any loan review reports. We ~~believe~~have ~~that~~a ~~our~~conversation ~~credit~~with ~~approval~~the ~~process~~borrower ~~provides~~and ~~for~~update ~~thorough~~current ~~underwriting~~and projected financial information (including borrower global cash flows when possible) and ~~efficient~~collateral ~~decision~~valuation ~~making~~estimates. Following analysis of all available relevant information, management adopts an action plan from the following alternatives: (a) continuation of loan collection efforts on their existing terms, (b) a restructure of the loan’s terms, (c) a sale of the loan, (d) a charge-off or partial charge-off, (e) foreclosure on pledged collateral, or (f) acceptance of a deed in lieu of foreclosure.

Ongoing Credit Risk Management. In addition to the tailored underwriting process described above, we perform ongoing risk monitoring and review processes for credit exposures. Individual loan reviews encompass a loan’s payment status and history, current and projected paying capacity of the borrower and/or guarantor(s), current condition and estimated value of any collateral, sufficiency of credit and collateral documentation, and compliance with Bank and regulatory lending standards. We record any necessary charge-offs promptly and maintain adequate allowance levels for probable loan losses incurred in the loan portfolio. Management regularly reviews the status of the watch list and classified assets portfolio as well as the larger credits in the portfolio. Once a loan is identified as a problem loan or a loan requiring a workout, the Bank makes an evaluation and develops a plan for handling the loan. In developing such a plan, management reviews all relevant information from the loan file and any loan review reports. We have a conversation with the borrower and update current and projected financial information (including borrower global cash flows when possible) and collateral valuation estimates. Following analysis of all available relevant information, management adopts an action plan from the following alternatives: (a) continuation of loan collection efforts on their existing terms, (b) a restructure of the loan’s terms, (c) a sale of the loan, (d) a charge-off or partial charge-off, (e) foreclosure on pledged collateral, or (f) acceptance of a deed in lieu of foreclosure. For loans originated through our Strategic Program, the Bank does not currently grade individual loans held-for-investment due to their small balances and homogenous nature. As credit quality for Strategic Program loans have been highly correlated with delinquency levels, Strategic Program loans are evaluated collectively by program.

Our loan committee and board members are updated on a regular basis on all servicing and liquidation efforts. We believe such routine and recurring discussions amongst our loan committee members and board of directors help prevent oversight errors that may occur in improperly managed loan portfolios. Pursuant to our credit policy, our loan committee is required to consider loan grade updates at our quarterly meetings.

The Bank analyzes each loan application in a reasonable manner, consistent with prudent lending standards. Additional factors considered during underwriting include, but are not limited to:

•whether the applicant has any other loans(s) (including through the PPP, SBA EIDL, other stimulus financing) that have repayment or contingent repayment requirements which could impact cash flow;

•for individual applicants, whether his or her source of income has been or may be impacted;

•whether historical financial information can be reasonably relied upon based on current market conditions; and

•the impact current market conditions have on collateral adequacy.

Credit Concentrations. We actively monitor and manage the composition of our loan portfolio, including credit concentrations. Our credit policies establish concentration limits by loan product to manage portfolio diversification. The Bank’s concentration management program couples quantitative data with a thorough qualitative approach to provide an in-depth understanding of its loan portfolio concentrations. The Bank’s portfolio analysis includes concentration trends by portfolio product type, overall growth trends, pool correlations, risk rating trends, policy and/or underwriting exceptions, nonperforming asset trends, stress testing, market and submarket analysis and changing economic conditions. The portfolio concentration limits set forth in the Bank’s lending and collection policies are reviewed and approved by the Bank’s board of directors at least annually. Concentration levels are monitored by management and reported to the Bank’s board of directors on a quarterly basis.

Lending Limits. Our lending activities are subject to a variety of lending limits imposed by state and federal law. In general, the Bank is subject to a legal lending limit on loans to a single borrower based on the Bank’s capital level as dictated by the State of Utah. The dollar amounts of the Bank’s lending limit increases or decreases as the Bank’s capital increases or decreases. The Bank is able to sell participations in its larger loans to other financial institutions, which allows it to better manage the risk and exposure involved with larger loans and to meet the lending needs of its customers requiring extensions of credit in excess of Bank or regulatory limits. The Bank’s legal lending limit on loans to a single borrower was approximately $23.0 million as of December 31, ~~2024~~2025.

Strategic ~~Programs~~Program Loan Portfolio

Overview. We currently source most of our loan originations through our Strategic Programs. Our Strategic Programs include a broad array of products for both prime and subprime borrowers including both consumer and commercial loans that may be secured or unsecured, and open- or closed-end products, depending on the particular market targeted by the Bank and the specific Strategic Program service provider.

The Bank’s current Strategic Program service providers include Upstart, Elevate, Reach (formerly Liberty Lending), Plannery, Backd, Albert, Tilt, Earnest, PowerPay, Clasp, LendingPoint, OppLoans, Mulligan Funding, and American First Finance. From time to time, we expect the number and composition of our Strategic Program service providers to change as the business develops, contract terms expire or agreements with service providers are otherwise terminated. The Bank has engaged with other Strategic Program service providers since we established our first Strategic Program in 2016 and we may enter into Strategic Programs with other service providers in the future.

Underwriting. We review and approve the credit approval models prior to the launch of the lending program with the Strategic Partner. These credit models are periodically validated by independent third parties in accordance with regulatory

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~~Bank~~guidance. For both held-for-sale (“HFS”) and ~~the~~held-for-investment ~~specific~~(“HFI”) ~~Strategic~~portfolios, ~~Program~~we ~~service~~conduct ~~provider.~~vintage Weanalyses ~~offer~~to ~~strategic~~evaluate ~~program~~loan performance.We originate loans within a predetermined underwriting criterion that is approved by the Board. Senior management is responsible for ~~loan~~reviewing ~~amounts~~and upassessing the market, credit and industry data as it pertains to ~~$2.0~~the ~~million~~proposed ~~with~~credit ~~terms~~risk ~~not~~related to ~~exceed~~the 72HFS ~~months~~and HFI loan programs. This is accomplished by various controls and monitoring activities, including, but not limited to:

~~The~~•Reviewing Bank’s current Strategic Program service providers include Upstart, Elevate, Reach (formerly Liberty Lending), Plannery, Empower, Earnest, PowerPay, Stride, LendingPoint, OppFi, Mulligan Funding, American First Finance. From time to time, we expect the number and composition of ~~our~~credit ~~Strategic~~model ~~Program~~validation service providers to change as the business develops, contract terms expire or agreements with service providers are otherwise terminated. The Bank has engaged with other Strategic Program service providers since we established our first Strategic Program in 2016 and we may enter into Strategic Programs with other service providers in the future.reports

~~Selection~~•Presenting ~~and~~to ~~Oversight.~~Loan WeCommittee ~~select~~and ~~service~~Board ~~providers~~ for ~~our~~approval ~~Strategic~~prior ~~Programs~~to ~~applying~~soft ~~third~~launch ~~party guidance promulgated by the FDIC, including comprehensive onboarding due diligence covering strategic, operational, transaction, compliance, credit~~ and ~~other~~annually risks, and evaluating any potential reputational impact. Furthermore, the Bank conducts extensive ongoing oversight and monitoring of the Strategic Program service providers in accordance with regulatory requirements and as augmented by Bank policies and the Bank’s compliance management systems developed for its oversight of the Strategic Program service providers.thereafter;

•Assisting Information Technology in programming underwriting rules into our API;

•Monitoring veracity of underwriting rules;

•Approving any changes and escalating non-compliance as necessary;

•Ongoing financial review of all Strategic Partners.

Loan Approval Authority. Our lending activities follow written, non-discriminatory underwriting standards and loan origination procedures established by our Board and Senior Management in consultation with the Strategic Program.

Ongoing Credit Risk Management. With the exception of Backd, the Bank does not currently risk rate individual HFI loans due to their small balances and homogenous nature. As credit quality for Strategic Program loans have been highly correlated with delinquency levels, Strategic Program loans are evaluated collectively by program.

Credit Concentrations. We actively monitor and manage the composition of our HFS and HFI portfolios, including credit concentrations. Our credit policies establish concentration limits by loan product to manage portfolio diversification. The Bank’s concentration management program couples quantitative data with a thorough qualitative approach to provide an in-depth understanding of its loan portfolio concentrations. The Bank’s portfolio analysis includes concentration trends by portfolio product type, overall growth trends, pool correlations, risk rating trends, policy and/or underwriting exceptions, nonperforming asset trends, stress testing, market and submarket analysis and changing economic conditions. The portfolio concentration limits set forth in the Bank’s lending and collection policies are reviewed and approved by the Bank’s Board at least annually. Concentration levels are monitored by management and reported to the Bank’s Board on a quarterly basis.

Lending Limits. Our lending activities are subject to a variety of lending limits imposed by state and federal law. In general, the Bank is subject to a legal lending limit on loans to a single borrower based on the Bank’s capital level as dictated by the State of Utah. The dollar amounts of the Bank’s lending limit increases or decreases as the Bank’s capital increases or decreases. The Bank offers consumer loans for loan amounts up to $250,000 with terms not to exceed 180 months. The Bank offers commercial loans for loan amounts up to $5.0 million with terms not to exceed 120 months. The Bank has a documented exceptions process wherein we can approve loans outside these thresholds with Board approval; however no single unsecured loan will ever exceed 15% of capital and no single secured loan will ever exceed 25% of capital. The Bank’s legal lending limit on loans to a single borrower was approximately $23.0 million as of December 31, 2025.

Selection and Oversight. We approve service providers for our Strategic Programs considering third party guidance promulgated by the Federal Deposit Insurance Corporation (“FDIC”) and our own guidelines and policies, including comprehensive onboarding due diligence covering strategic, operational, transaction, compliance, credit and other risks, and evaluating any potential reputational impact. Furthermore, the Bank conducts extensive ongoing oversight and monitoring of the Strategic Program service providers in accordance with regulatory requirements and as augmented by Bank policies and the Bank’s compliance management systems developed for its oversight of the Strategic Program service providers.

Our oversight also impacts our decision to retain loans with Strategic Program service providers because the Bank may choose not to retain any loans or interest until the Strategic Program service provider has satisfied certain audit requirements of the Bank. We seek service providers that offer credit products focused on amortizing loans to borrowers with a demonstrated ability to repay and that are priced appropriately to the credit profile of the borrower (including credit history). Further, we seek service providers that instill our values of moving a customer forward. This is characterized by high customer service standards and an emphasis on regulatory compliance and consumer protections that may not be afforded these customers through a non-bank product.

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Structure. In structuring a Strategic Program, the Bank and the Strategic Program service provider generally review and agree upon a set of program guidelines established by the Bank and tailored to accommodate target borrowers within the Strategic Program. We require the Strategic Program service providers to adhere to specific Bank underwriting criteria to originate loans to ensure that the borrowers are solicited and serviced in accordance with all applicable laws and regulatory requirements. The guidelines set forth various loan approval considerations, including but not limited to the borrower’s name, credit score, and other underwriting criteria. Loan applications are processed by the Strategic Program service provider in accordance with the Bank’s guidelines and delivered to the Bank for approval. Loan applications generally involve automated loan decisions by use of credit models, and decisions are typically rendered instantly after the submission of the loan application to the Bank. No loan is approved unless the Bank reviews and approves the borrower’s application. Borrowers to whom we originate loans through our Strategic Programs generally include consumers considered super prime (FICO score of 720 and higher), prime (FICO score of 661 through 719), near prime (FICO score of 640 through 660) and subprime (FICO score of 640 and below), as well as consumers that lack a credit history as reported through one of the three credit bureaus. The application and approval process is generally performed electronically although some are underwritten manually. Each loan originated by the Bank complies with applicable federal and state laws that apply to the Bank. As indicated, the Bank treats our Strategic Program service providers as its vendors and subjects the service providers to the requirements of the FDIC for vendor and third-party management.

We typically retain Strategic Program loans for a number of business days after origination during which the Bank generally receives interest income related to the loans. Following this retention period, the Bank may sell either a portion of the loan or the whole loan to a special purpose investment vehicle or other investor as identified by us or our Strategic Program service providers. Such purchase transactions typically require the purchaser to maintain a reserve account with the Bank or another financial institution to secure the purchaser’s contractual obligations to purchase. Some of our Strategic Program service providers may also securitize the loans originated through the program and the Bank may choose to participate in such securitizations for liquidity reasons. The Bank may also hold a portion of the loans or receivables for investment. Our retention parameters vary among different Strategic Programs. The Bank’s retention obligations may be discretionary with respect to some Strategic Programs. In other Strategic Programs, the Bank may choose not to retain any loans or interest until the Strategic Program service provider has satisfied certain audit requirements of the Bank.

Credit Enhanced. The Bank offers an enhanced balance sheet solution to select Strategic Partners. After a thorough credit review of the Strategic Partner and the portfolio’s performance, the Bank calculates the maximum amount the Bank will carry on its balance sheet. The Bank receives the full contractural loan interest but retains only a rate based on Prime plus an agreed-upon margin for the outstanding balance. Generally the interest received that exceeds the retained interest is passed to the strategic partner in the following manner. First, the Bank retains the interest it is owed for holding the loan on its balance sheet. Second, the Bank owes the amount of interest received on each individual loan that exceeds the Bank’s retained rate of interest to the strategic partner in the form of a servicing or guarantee fee. Third, from those proceeds, the Strategic Partner will pay into the loan loss reserve the amount needed to fund the loan loss reserve to the target level. Fourth, the Bank will pay any remaining amount to the Strategic Partner. If the cash flow to the Strategic Partner is insufficient to fund the loan loss reserve for the minimum target level, then the Strategic Partner must fund the shortfall.

The Bank launched the credit enhanced program at the end of 2024, and the outstanding balance of credit enhanced loans as of December 31, 2025, was $108.1 million.

Servicing. The Bank is generally the servicer of the loans it originates through Strategic Programs. The Bank earns a servicing fee equal to a percentage of the outstanding balance of the loans generated under Strategic Programs for servicing such loans. In turn, the Strategic Program service providers, subject to the Bank’s approval and oversight, serve as sub-servicer and perform typical primary servicing duties including loan collections, modifications, charging-off, reporting and monitoring.

Fees and Other Economics. The Bank may earn fees on its Strategic Programs as delineated in each Strategic Program contract and may vary by contract. Service providers may also be required to pay minimum monthly fees to the Bank or reimburse the Bank for certain agreed-upon expenses. Some Strategic Programs require the service provider pay a fee to the Bank if it enters into a similar strategic relationship with another bank or financial institution.

11On October 13, 2021, we formed FinWise Investment, LLC, a limited liability company, as a wholly owned subsidiary of ours to hold and manage private investments made by us and the Bank. We currently hold and, in the future, may acquire equity in certain of our Strategic Program service providers through this subsidiary. As of December 31, 2025, and 2024, this subsidiary holds $0.4 million and $0.3 million, respectively, of equity securities of five and two Strategic Program service providers, respectively.

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On October 13, 2021, we formed FinWise Investment, LLC, a limited liability company, as a wholly owned subsidiary of the Company to hold and manage private investments made by the Company and the Bank. The Company currently holds and, in the future, may acquire equity in certain of our Strategic Program service providers through this subsidiary. As of December 31, 2024, and 2023, this subsidiary holds $0.3 million and $0.3 million, respectively, of equity securities of two Strategic Program service providers.

Servicing. The Bank is generally the servicer of the loans it originates through Strategic Programs. The Bank earns a servicing fee equal to a percentage of the outstanding balance of the loans generated under Strategic Programs for servicing such loans.. In turn, the Strategic Program service providers, subject to the Bank’s approval and oversight, serve as sub-servicer and perform typical primary servicing duties including loan collections, modifications, charging-off, reporting and monitoring.

Funding and Deposits

Our deposits serve as the primary funding source for lending, investing and other general banking purposes. We provide a full range of deposit products, including a variety of checking and savings accounts, time deposits, and money market accounts. We also provide a wide range of deposit services, including debit cards, remote deposit capture, online banking, mobile banking, and direct deposit services. We also offer business accounts and cash management services, including business checking and savings accounts and treasury services. We solicit deposits through our relationship-driven team of dedicated and accessible bankers and through community-focused marketing.

We maintain a diversified funding strategy using core deposits from our branch operations and deposits originated through SBA 7(a) lending programs and Strategic Programs, coupled with brokered deposits and borrowings as needed. A meaningful portion of our core deposits include funds deposited through our Strategic Programs, to support reserve requirements. The terms of our Strategic Programs generally require each Strategic Program platform to establish a reserve deposit account with the Bank, intended to protect the Bank in the event a purchaser of loan receivables originated through our Strategic Programs cannot meet its contractual obligation to purchase. The reserve deposit account balance is typically required to at least equal the total outstanding balance of loans held-for-sale by the Bank related to the Strategic Program. The Bank has the right to withdraw amounts from the reserve deposit account to fulfill loan purchaser obligations created under the Strategic Program agreements. Depending on the strength of the relationship between the Bank and our Strategic Program relationship, we may reduce the required amount of reserve deposits held and/or allow a portion of the requirement to be fulfilled by a letter of credit. In addition to the reserve deposit account, certain Strategic Program relationships have opened operating deposit accounts at the Bank.

Our core deposits, as of December 31, ~~2024~~2025, constituted 3528.6% of our funding sources (our core deposits comprise the sum of demand deposits, FBO demand deposits, NOW accounts, MMDA accounts, savings accounts, and time deposits under $250,000 that are not brokered deposits). The certificates of deposit are predominately brokered deposits.

Securities Portfolio

We manage our securities portfolio and cash to maintain adequate liquidity with a secondary focus on yield and returns. Our investment security portfolio totaled $4237.57 million as of December 31, ~~2024~~2025. Specific objectives of our investment policy and portfolio are as follows:

•Ensure the Safety of Principal—Bank investments are generally limited to investment-grade instruments that fully comply with all applicable regulatory guidelines and limitations. Allowable non-investment-grade instruments must be approved by the board of directors.

•Income Generation—The Bank’s investment portfolio is managed to optimize income on invested funds in a manner that is consistent with the Bank’s objective to preserve the invested principal.

•Provide Liquidity—The Bank’s investment portfolio is managed to remain sufficiently liquid to meet anticipated funding demands either through declines in deposits and/or increases in loan demand.

•Mitigate Interest Rate Risk—Portfolio strategies are used to assist the Bank in managing its overall interest rate sensitivity position in accordance with goals and objectives approved by our board of directors.

Our investment policy is reviewed and approved annually by our board of directors. Overall investment objectives are established by our board through our investment policy and monitored through our asset-liability management committee. Day-to-day activities pertaining to the securities portfolio are conducted under the supervision of our Chief Financial Officer. We actively monitor our investments on an ongoing basis to identify any material changes in our mix of securities. We also review our securities for potential impairment (other-than-temporary impairments) at least quarterly.

12Segment Reporting

Historically, we managed our business on the basis of one operating and reportable segment. During the third quarter of 2025, we revised our reportable segments to reflect a change in the manner in which the business is managed. Based on significant operational growth and how our chief operating decision maker (“CODM”) reviews operating results and makes

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~~Officer.~~decisions Weabout ~~actively~~resource ~~monitor~~allocation, ~~our~~we ~~investments~~now onhave anthree ~~ongoing~~reportable ~~basis~~segments: totraditional ~~identify~~banking, ~~any~~BaaS ~~material~~and ~~changes~~treasury inand ~~our mix of securities~~administration. ~~We also review our securities for potential impairment (other-than-temporary impairments) at least quarterly.~~

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. For more information about each of the Company’s reportable segments, please see Note 17 – Segments of the accompanying notes to the consolidated financial statements included included in Part II, Item 8.

Competition

The banking and financial services industry is highly-competitive, and we compete with a wide range of financial institutions within our markets, including local, regional and national commercial banks, credit unions, and non-bank financial service providers such as financial technology companies, private credit lenders and other financial intermediaries for certain of our products and services. Some of our competitors are not currently subject to the regulatory restrictions and the level of regulatory supervision applicable to us.

For example, financial technology companies have been actively acquiring or pursuing bank charters to gain direct access to deposits, reduce reliance on partner banks, and lower capital costs, driven by a more permissive regulatory environment. This shift allows Fintech companies to scale and operate with the same authority as traditional banks. The number of federal bank charter applications in 2025 reached its highest level since 2020, with numerous, crypto-adjacent, and non-bank firms seeking licensing and the Office of the Comptroller of the Currency (“OCC”) and the FDIC are signaling increased openness to fintech charter applications, encouraging new entrants.

Interest rates on loans and deposits, as well as prices on fee-based services, are typically significant competitive factors within the banking and financial services industry. Many of our competitors are much larger financial institutions that have greater financial resources than we do and compete aggressively for market share. These competitors attempt to gain market share through their financial product mix, pricing strategies and banking center locations.

Other important standard competitive factors in our industry and markets include office locations and hours, quality of customer service, community reputation, continuity of personnel and services, capacity and willingness to extend credit, and ability to offer sophisticated banking products and services through multiple channels. While we seek to remain competitive with respect to fees charged, interest rates and pricing, we believe that our banking product suite, our high-quality customer service culture, our strategic relationships with third parties, our positive reputation and long-standing relationships will enable us to compete successfully within our markets and enhance our ability to attract and retain customers.

Human Capital Resources

As of December 31, ~~2024~~2025, we employed ~~196~~198 full-time equivalent employees. None of our employees are represented by any collective bargaining unit or are a party to a collective bargaining agreement. We believe the relationship with our employees to be good.

We believe that the success of a business is largely due to the quality of its employees and the development of each employee’s full potential. We encourage and support the development of our employees and, whenever possible, strive to fill vacancies from within. Employee retention helps us operate efficiently and achieve our business objectives. We also believe our ability to attract and retain employees is a key to our success. Accordingly, we strive to offer competitive salaries and employee benefits to all employees and monitor salaries in our market areas.

Supervision and Regulation

General

We are extensively regulated under both federal and state law. These laws restrict permissible activities and investments and require compliance with various consumer protection provisions applicable to lending, deposit, brokerage, and fiduciary activities. They also impose capital adequacy requirements and conditions on a bank holding company’s ability to pay dividends to its shareholders, to repurchase stock or to receive dividends from its subsidiary banks. As a bank holding company, the Company is subject to regulation and supervision by the Federal Reserve and the UDFI. We are required to file with the Federal Reserve quarterly and annual reports and such additional information as the Federal Reserve may require pursuant to the BHC Act. The Federal Reserve conducts examinations of the Company and its subsidiaries. In addition, as a Utah state-chartered bank that is not a member of the Federal Reserve, the Bank is subject to primary regulation, supervision, and examination by the FDIC and the UDFI. The Bank’s deposits are insured by the FDIC through the Deposit Insurance Fund (“DIF”). Based on this deposit insurance function, the FDIC also has certain supervisory authority and powers over the Bank as well as all other FDIC insured institutions. Both the UDFI and the FDIC conduct regular examinations of the Bank. The Company’s and the Bank’s regulators generally have broad discretion to impose restrictions and limitations on our operations. Bank regulation is intended to protect depositors, consumers, and commercial customers, and not shareholders. This supervisory framework could materially impact the conduct and profitability of our activities.

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~~Moreover~~addition, as a Utah state-chartered bank ~~regulatory~~that ~~agencies~~is ~~can~~not bea ~~more~~member ~~aggressive~~of inthe ~~responding~~Federal Reserve, the Bank is subject to ~~concerns~~primary regulation, supervision, and ~~trends~~examination ~~identified~~by inthe ~~examinations~~FDIC and the UDFI. The Bank’s deposits are insured by the FDIC through the Deposit Insurance Fund (“DIF”). Based on this deposit insurance function, ~~which~~the ~~could~~FDIC ~~result~~also inhas ancertain ~~increased~~supervisory ~~issuance~~authority ofand ~~enforcement~~powers ~~actions~~over tothe ~~financial~~Bank as well as all other FDIC insured institutions. ~~requiring~~Both ~~action~~the UDFI and the FDIC conduct regular examinations of the Bank. The Company’s and the Bank’s regulators generally have broad discretion to ~~address~~impose ~~credit~~restrictions ~~quality~~and limitations on our operations. Bank regulation is intended to protect depositors, ~~liquidity~~consumers, ~~risk~~and ~~management~~commercial customers, and ~~capital~~not ~~adequacy,~~shareholders. asThis ~~well~~supervisory asframework ~~other~~could ~~safety~~materially impact the conduct and ~~soundness~~profitability ~~concerns~~of our activities.

To the extent that the following information describes statutory and regulatory provisions, it is qualified in its entirety by reference to the text of applicable statutory and regulatory provisions. Legislative and regulatory initiatives, which necessarily impact the regulation of the financial services industry, are introduced from time-to-time. We cannot predict whether or when potential legislation or new regulations will be enacted, and if enacted, the effect that new legislation or any implemented regulations and supervisory policies would have on our financial condition and results of operations. Moreover, bank regulatory agencies can be more aggressive in responding to concerns and trends identified in examinations, which could result in an increased issuance of enforcement actions to financial institutions requiring action to address credit quality, liquidity, risk management, and capital adequacy, as well as other safety and soundness concerns.

Regulation of FinWise Bancorp

We are registered as a bank holding company under the BHC Act and are subject to regulation and supervision by the Federal Reserve. The BHC Act, and the regulations promulgated by the Federal Reserve thereunder, require us to secure the prior approval of the Federal Reserve before we own or control, directly or indirectly, more than 5% of the voting shares or substantially all the assets of any bank, thrift, bank holding company or thrift holding company, or merge or consolidate with another bank or thrift holding company. Further, under the BHC Act, our activities and those of any nonbank subsidiary are limited to: (i) those activities that the Federal Reserve determines to be so closely related to banking as to be a proper incident thereto, and (ii) investments in companies not engaged in activities closely related to banking, subject to quantitative limitations on the value of such investments. Prior approval of the Federal Reserve may be required before engaging in certain activities. In making such determinations, the Federal Reserve is required to weigh the expected benefits to the public, such as greater convenience, increased competition, and gains in efficiency, against the possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interest, and unsound banking practices. Subject to various exceptions, the BHC Act and the Change in Bank Control Act, together with related regulations, require Federal Reserve approval prior to any person or company acquiring “control” of a bank holding company, such as the Company.

Certain acquisitions of our voting stock may be subject to regulatory approval or notice under federal law. Investors are responsible for ensuring that they do not, directly or indirectly, acquire shares of our stock in excess of the amount that can be acquired without regulatory approval under the Change in Bank Control Act and the BHC Act, which prohibit any person or company from acquiring control of the Company without, in most cases, the prior written approval of the Federal Reserve. We are also subject to the regulation of the UDFI. Under Utah Code Ann. § 7-1-503, we are prohibited from issuing or offering to sell any security without approval from the UDFI.

The BHC Act was substantially amended by the Gramm-Leach-Bliley Act, or the GLBA, which, among other things, allows a bank holding company that satisfies certain criteria to elect to become a financial holding company, which would allow such company to engage in activities that are financial in nature, incidental to such activities, or complementary to such activities. We have not elected financial holding company status.

There are several restrictions imposed on us by law and regulatory policy that are designed to minimize potential loss to depositors and to the DIF in the event that a subsidiary depository institution should become insolvent. For example, the Federal Deposit Insurance Act (the “FDIA”) and Federal Reserve regulations require a bank holding company to serve as a source of financial and managerial strength to its bank subsidiaries. As a result, a bank holding company may be expected to commit resources to support its bank subsidiary, including at times when the holding company may not be inclined or in a financial position to provide it. The Federal Reserve also has the authority under the BHC Act to require a bank holding company to terminate any activity or to relinquish control of a nonbank subsidiary upon the Federal Reserve’s determination that such activity or control constitutes a serious risk to the financial soundness and stability of any bank subsidiary of the bank holding company.

The FDIA provides that, in the event of the “liquidation or other resolution” of an insured depository institution, the claims of depositors of the institution (including the claims of the FDIC as a subrogee of insured depositors) and certain claims for administrative expenses of the FDIC as a receiver will have priority over other general unsecured claims against the institution. If an insured depository institution, such as the Bank, fails, insured and uninsured depositors, along with the FDIC, will have priority in payment ahead of unsecured, non-deposit creditors, including the institution’s holding company, with respect to any extensions of credit they have made to such insured depository institution.

The ability of any bank holding company to acquire another bank holding company or bank is also significantly impacted by discretionary decisions of federal regulators, including political appointees, as to whether any proposed merger would be consistent with national financial institutions policies. Such views may have an impact on the ability of any bank holding company to complete a merger transaction as an acquiror, a target, or in a “merger of equals.15

Regulation of FinWise Bank

The Bank is a Utah state-chartered bank and the operations and investments of our Bank are subject to the supervision, examination, and reporting requirements of the UDFI and the FDIC. The UDFI supervises and regulates all areas of the Bank’s operations including, without limitation, the making of loans, the issuance of securities, the conduct of the Bank’s corporate affairs, the satisfaction of capital adequacy requirements, the payment of dividends, and the establishment or closing of banking offices. The FDIC is the Bank’s primary federal regulatory agency. In addition, the Bank’s deposit

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~~accounts~~institution. ~~are~~If an insured bydepository ~~the~~institution, ~~FDIC~~such toas the ~~maximum~~Bank, ~~extent~~fails, ~~permitted~~insured byand ~~law~~uninsured depositors, ~~and~~along with the FDIC, ~~has~~will ~~certain~~have ~~enforcement~~priority ~~powers~~in ~~over~~payment ahead of unsecured, non-deposit creditors, including the ~~Bank~~institution’s holding company, with respect to any extensions of credit they have made to such insured depository institution.

Regulation of FinWise Bank

The UDFI and the FDIC periodically examine the Bank’s operations and financial condition and compliance with federal consumer-protection laws. If, based on an examination of our Bank, the regulators should determine that the financial condition, capital resources, asset quality, earnings prospects, management, liquidity or other aspects of the Bank’s operations are unsatisfactory, or that the Bank or our management is violating or has violated any law or regulation, various remedies are available to the regulators. Such remedies include the power to enjoin unsafe or unsound practices, to require mitigating action to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in capital, to restrict growth, to assess civil monetary penalties, to remove officers and directors and ultimately to request the FDIC to terminate the Bank’s deposit insurance. As a Utah state-chartered bank, the Bank is authorized by statute, subject to certain limitations, to take and pay interest on, savings and time deposits, to accept demand deposits, to make loans on residential and other real estate, to make consumer and commercial loans, to invest, with certain limitations, in equity securities and in debt obligations of banks and corporations and to provide various other banking services for the benefit of the Bank’s customers. Various state consumer laws and regulations also affect the operations of the Bank, including state usury laws, consumer credit and equal credit opportunity laws, and fair credit reporting. In addition, the Federal Deposit Insurance Corporation Improvement Act of 1991, or FDICIA, generally prohibits insured state-chartered institutions from conducting activities as principal that are not permitted for national banks.

Utah-chartered banks are required to pay supervisory assessments to the UDFI to fund its operations. The amount of the assessment paid by a Utah bank to the UDFI is calculated on an annual basis based on our average total assets for the prior year. During the year ended December 31, ~~2024~~2025, the Bank paid an assessment to the UDFI of $0.1 million.

Capital Adequacy Guidelines

Bank holding companies and banks are subject to various regulatory capital requirements administered by state and federal agencies. These agencies may establish higher minimum requirements if, for example, a banking organization previously has ~~received~~credit ~~special~~quality ~~attention~~issues or has a high susceptibility to interest rate risk or liquidity risk. Risk-based capital requirements determine the adequacy of capital based on the risk inherent in various classes of assets and off-balance sheet items. Under the Dodd-Frank Act, the Federal Reserve must apply consolidated capital requirements to depository institution holding companies that are no less stringent than those currently applied to depository institutions. The Dodd-Frank Act additionally requires capital requirements to be counter-cyclical so that the required amount of capital increases in times of economic expansion and decreases in times of economic contraction, consistent with safety and soundness. The current requirements, which began to take effect in 2015, are based on the international Basel III capital framework.

On November 13, 2019, the federal regulators finalized and adopted a regulatory capital rule establishing a new community bank leverage ratio (“CBLR”), which became effective on January 1, 2020. Eligibility criteria to utilize CBLR instead of the Basel III risk-based capital ratios include having total assets less than $10 billion and off-balance sheet exposures that ~~were~~is less than 25% of total assets, among others. The Company and the Bank qualified for and elected to use CBLR beginning in the first quarter of 2020. The Company and Bank continue to qualify for and elect to use the CBLR capital alternative.

Federal law provides the federal banking regulators with broad power to take prompt corrective action to resolve the problems of undercapitalized institutions. Depending upon the capital category to which an institution is assigned, the regulators' corrective powers include: requiring the submission of a capital restoration plan; placing limits on asset growth and restrictions on activities; requiring the institution to issue additional capital stock (including additional voting stock) or to be acquired; restricting transactions with affiliates; restricting the interest rate the institution may pay on deposits; ordering a new election of directors of the institution; requiring that senior executive officers or directors be dismissed; prohibiting the institution from accepting deposits from correspondent banks; requiring the institution to divest certain subsidiaries; prohibiting the payment of principal or interest on subordinated debt; and ultimately, appointing a receiver for the institution. In general, a depository institution may be reclassified to a lower category than is indicated by its capital levels if the appropriate federal depository institution regulatory agency determines the institution to be otherwise in an unsafe or unsound condition or to be engaged in an unsafe or unsound practice. This could result from a failure by the institution to timely correct a deficiency identified in an examination report.

See Note 8 - Capital Requirements to the consolidated financial statements included in Part II, Item 8 for additional regulatory capital information, including the Bank’s and Company’s leverage ratio as of December 31, 2024.16

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to be acquired; restricting transactions with affiliates; restricting the interest rate the institution may pay on deposits; ordering a new election of directors of the institution; requiring that senior executive officers or directors be dismissed; prohibiting the institution from accepting deposits from correspondent banks; requiring the institution to divest certain subsidiaries; prohibiting the payment of principal or interest on subordinated debt; and ultimately, appointing a receiver for the institution. In general, a depository institution may be reclassified to a lower category than is indicated by its capital levels if the appropriate federal depository institution regulatory agency determines the institution to be otherwise in an unsafe or unsound condition or to be engaged in an unsafe or unsound practice. This could result from a failure by the institution to timely correct a deficiency identified in an examination report.

Safety and Soundness Standards

The federal banking agencies have adopted guidelines designed to assist the federal banking agencies in identifying and addressing potential safety and soundness concerns before capital becomes impaired. The guidelines set forth operational and managerial standards relating to: (i) internal controls, information systems and internal audit systems; (ii) loan documentation; (iii) credit underwriting; (iv) asset growth; (v) earnings; and (vi) compensation, fees and benefits. In general, the guidelines require, among other things, appropriate systems and practices to identify and manage the risk and exposures specified in the guidelines.

Transactions with Affiliates and Insiders

We are subject to federal laws, such as Sections 23A and 23B of the Federal Reserve Act (the “FRA”), and the Federal Reserve’s implementing Regulation W, as made applicable to state non-member banks such as the Bank by Section 18(j) of the FDIA, that limit the size, number and terms of the transactions that depository institutions may engage in with their affiliates. An affiliate of a bank is any company or entity that controls, is controlled by or is under common control with the bank. Under these provisions, covered transactions by a bank with nonbank affiliates (such as loans to or investments in an affiliate by the bank) must be on arms-length terms and generally be limited to 10% of the bank’s capital and surplus for all covered transactions with any one affiliate, and 20% of capital and surplus for all covered transactions with all affiliates. Any extensions of credit to affiliates, with limited exceptions, must be secured by eligible collateral in specified amounts. Banks are also prohibited from purchasing any “low quality” assets from an affiliate. The Dodd-Frank Act generally enhanced the restrictions on transactions with affiliates under Section 23A and 23B of the FRA, including an expansion of the definition of “covered transactions” to include derivatives transactions, repurchase agreements, reverse repurchase agreements and securities lending or borrowing transactions and an increase in the period of time during which collateral requirements regarding covered credit transactions must be satisfied. The Federal Reserve has promulgated Regulation W, which codifies prior interpretations under Sections 23A and 23B of the FRA and provides interpretive guidance with respect to affiliate transactions. Affiliates of a bank include, among other entities, a bank’s bank holding company parent and companies that are under common control with the bank. Accordingly, the Company is considered to be an affiliate of the Bank.

~~Section~~We ~~23A~~are ~~and~~also ~~23B~~subject to restrictions on extensions of ~~the~~credit ~~FRA~~to our executive officers, ~~including~~directors, anshareholders ~~expansion~~who ofown ~~the~~more ~~definition~~than 10% of ~~“covered~~our ~~transactions”~~common tostock, ~~include~~and ~~derivatives~~their ~~transactions~~related interests. Specifically, ~~repurchase~~loans ~~agreements~~to executive officers, ~~reverse~~directors ~~repurchase~~or ~~agreements~~to ~~and~~any ~~securities~~person ~~lending~~who directly or ~~borrowing~~indirectly, ~~transactions~~or ~~and~~acting anthrough ~~increase~~or in concert with one or more persons, owns, controls or has the ~~period~~power to vote more than 10% of ~~time~~any ~~during~~class ~~which~~of ~~collateral~~voting ~~requirements~~securities ~~regarding~~of ~~covered~~the ~~credit~~Bank, ~~transactions~~or ~~must~~to beany ~~satisfied.~~political ~~The~~or ~~Federal~~campaign ~~Reserve~~committee ~~has~~the ~~promulgated~~funds ~~Regulation~~or Wservices of which will benefit those executive officers, directors, or 10% stockholders or which ~~codifies~~is ~~prior~~controlled ~~interpretations~~by ~~under~~those executive officers, directors or 10% stockholders, are subject to Sections ~~23A~~22(g) and ~~23B~~22(h) of the FRA and ~~provides~~the ~~interpretive~~Federal ~~guidance~~Reserve’s ~~with~~implementing ~~respect~~Regulation toO. ~~affiliate~~Among other things, such extensions of credit must be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with third parties, and must not involve more than the normal risk of repayment or present other unfavorable features. ~~Affiliates~~Loans to such persons and certain affiliated entities of aany ~~bank~~of ~~include~~the foregoing, ~~among~~may not exceed, together with all other outstanding loans to such person and affiliated entities, athe ~~bank~~institution’s ~~bank~~loans-to-one-borrower ~~holding~~limit. ~~company~~Federal ~~parent~~regulations also prohibit loans above amounts prescribed by the appropriate federal banking agency to directors, executive officers, and ~~companies~~shareholders ~~that~~who own more than 10% of an institution, and their respective affiliates, unless such loans are ~~under~~approved ~~common~~in ~~control~~advance ~~with~~by a majority of the ~~bank~~board of directors of the institution. ~~Accordingly,~~Any “interested” director may not participate in the ~~Company~~voting. isRegulation ~~considered~~O prohibits loans to beany of those individuals where the aggregate amount exceeds an ~~affiliate~~amount equal to 15% of an institution’s unimpaired capital and surplus plus an additional 10% of unimpaired capital and surplus in the case of loans that are fully secured by readily marketable collateral, or when the aggregate amount on all of the extensions of credit outstanding to all of these persons would exceed the Bank’s unimpaired capital and unimpaired surplus. Section 22(g) and Regulation O identifies limited circumstances in which banks are permitted to extend credit to executive officers. Furthermore, we are prohibited from engaging in asset purchases or sales transactions with our officers, directors, or

We are also subject to restrictions on extensions of credit to our executive officers, directors, shareholders who own more than 10% of our common stock, and their related interests. Specifically, loans to executive officers, directors or to any person who directly or indirectly, or acting through or in concert with one or more persons, owns, controls or has the power to vote more than 10% of any class of voting securities of the Bank, or to any political or campaign committee the funds or services of which will benefit those executive officers, directors, or 10% stockholders or which is controlled by those executive officers, directors or 10% stockholders, are subject to Sections 22(g) and 22(h) of the FRA and the Federal Reserve’s implementing Regulation O. Among other things, such extensions of credit must be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with third parties, and must not involve more than the normal risk of repayment or present other unfavorable features. Loans to such persons and certain affiliated entities of any of the foregoing, may not exceed, together with all other outstanding loans to such person and affiliated entities, the institution’s loans-to-one-borrower limit. Federal regulations also prohibit loans above amounts prescribed by the appropriate federal banking agency to directors, executive officers, and shareholders who own more than 10% of an institution, and their respective affiliates, unless such loans are approved in advance by a majority of the board of directors of the institution. Any “interested” director may not participate in the voting. Regulation O prohibits loans to any of those individuals where the aggregate amount exceeds an amount equal to 15% of an institution’s unimpaired capital and surplus plus an additional 10% of unimpaired capital and surplus in the case of loans that are fully secured by readily marketable collateral, or when the aggregate amount on all of the extensions of credit outstanding to all of these persons would exceed the Bank’s unimpaired capital and unimpaired surplus. Section 22(g) and Regulation O identifies limited circumstances in which banks are permitted to extend credit to executive officers. Furthermore, we are prohibited from engaging in asset purchases or sales transactions with our officers, directors, or principal shareowners unless the transaction is on market terms and, if the transaction represents greater than 10% of the capital and surplus of the bank, a majority of the bank’s disinterested directors has approved the transaction.17

Incentive Compensation

Federal banking agencies have issued guidance on incentive compensation policies intended to ensure that the incentive compensation policies of banking organizations do not undermine the safety and soundness of such organizations by encouraging excessive risk-taking. The guidance, which covers all employees that have the ability to materially affect the risk profile of an organization, is based upon the key principles that a banking organization’s incentive compensation arrangements should (i) provide incentives that appropriately balance risk and rewards in a manner that does not encourage imprudent risk taking, (ii) be compatible with effective internal controls and risk management, and (iii) be supported by strong corporate governance, including active and effective oversight by the organization’s board of directors. In

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~~accordance~~principal ~~with~~shareowners ~~the~~unless ~~Dodd-Frank Act,~~ the ~~federal~~transaction ~~banking~~is ~~agencies~~on ~~prohibit~~market ~~incentive-based~~terms ~~compensation~~and, ~~arrangements~~if ~~that~~the ~~encourage~~transaction ~~inappropriate~~represents ~~risk~~greater ~~taking~~than by10% ~~covered~~of ~~financial~~the ~~institutions~~capital ~~(generally~~and ~~institutions~~surplus ~~that~~of ~~have~~the ~~over~~bank, $1a ~~billion~~majority inof ~~assets)~~the ~~and~~bank’s ~~are~~disinterested ~~deemed~~directors tohas beapproved ~~excessive,~~the ~~or that may lead to material losses~~transaction.

Incentive Compensation

The Federal Reserve will review, as part of the regular, risk-focused examination process, the incentive compensation arrangements of banking organizations, such as the Company, that are not “large, complex banking organizations.” These reviews will be tailored to each organization based on the scope and complexity of the organization’s activities and the prevalence of incentive compensation arrangements. The findings of the supervisory initiatives will be included in reports of examination. Deficiencies will be incorporated into the organization’s supervisory ratings, which can affect the organization’s ability to make acquisitions and take other actions. Enforcement actions may be taken against a banking organization if its incentive compensation arrangements, or related risk-management control or governance processes, pose a risk to the organization’s safety and soundness and the organization is not taking prompt and effective measures to correct the deficiencies.

Deposit Insurance

As an FDIC-insured institution, our deposits are insured up to applicable limits by the DIF of the FDIC. The DIF is the successor to the Bank Insurance Fund and the Savings Association Insurance Fund, which were merged in 2006. Deposit insurance is mandatory. 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.

We are required to pay assessments to the FDIC on a quarterly basis. The assessment amount is the product of multiplying the assessment base by the assessment ~~amount~~rate. The assessment base against which the assessment rate is applied to determine the total assessment due for a given period is the depository institution’s average total consolidated assets during the assessment period less average tangible equity during that assessment period. Tangible equity is defined in the assessment rule as Tier 1 Capital and is calculated monthly, unless the insured depository institution has less than $1.0 billion in assets, in which case the insured depository institution calculates Tier 1 Capital on an end-of-quarter basis. Parents or holding companies of other insured depository institutions are required to report separately from their subsidiary depository institutions.

In November 2023, The FDIC finalized a special assessment to recoup losses to the DIF from protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank. The assessment base is equal to the amount of an insured depository institution’s uninsured deposits, as reported for the quarter ended December 31, 2022, minus up to $5 billion of uninsured deposits at the institution (or, if a banking organization has more than one insured depository institution, at the banking organization in the aggregate). Because we have less than $5 billion of uninsured deposits, the special assessment did not have any financial impact on the Bank.

Regulatory Restrictions on Dividends and Repurchases of Equity Securities

The Federal Reserve’s policy statement and supervisory guidance on the payment of cash dividends by a bank holding company, such as the Company, expresses the view that a bank holding company should generally pay cash dividends on common stock only to the extent that (1) the bank holding company’s net income available over the past year is sufficient to cover the cash dividend, (2) the rate of earnings retention is consistent with the organization’s expected future needs and financial condition, and (3) the minimum regulatory capital adequacy ratios are met. Should an insured depository institution controlled by a bank holding company be “significantly undercapitalized” under the applicable federal bank capital ratios, or if the bank subsidiary is “undercapitalized” and has failed to submit an acceptable capital restoration plan or has materially failed to implement such a plan, federal banking regulators (in the case of the Bank, the FDIC) may choose to require prior Federal Reserve approval for any capital distribution by the bank holding company.

In addition, since we are a legal entity separate and distinct from the Bank and do not conduct stand-alone operations, an ability to pay dividends depends on the ability of the Bank to pay dividends to the holding company and the FDIC and the UDFI may, under certain circumstances, prohibit the payment of dividends to the holding company from the Bank. Utah corporate law also requires that dividends can only be paid out of funds legally available for such a distribution.

The Federal Reserve policy statement also provides that a bank holding company should inform the Federal Reserve reasonably in advance of declaring or paying a dividend that exceeds earnings for the period for which the dividend is being paid or that could result in a material adverse change to the bank holding company’s capital structure. Bank holding companies also are required to consult with the Federal Reserve before materially increasing dividends. It is also the Federal Reserve’s policy that bank holding companies should not maintain dividend levels that undermine their ability to be a source of strength to its banking subsidiaries. The Federal Reserve Board or the FRB could prohibit or limit the

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companies also are required to consult with the Federal Reserve before materially increasing dividends. It is also the Federal Reserve’s policy that bank holding companies should not maintain dividend levels that undermine their ability to be a source of strength to its banking subsidiaries. The Federal Reserve Board or the FRB could prohibit or limit the payment of dividends by a bank holding company if it determines that payment of the dividend would constitute an unsafe or unsound practice.

Unless an exception applies, the Federal Reserve’s Regulation Y requires a bank holding company to give the Federal Reserve prior notice of any redemption or repurchase of its own equity securities, if the consideration to be paid, together with the consideration paid for any repurchases in the preceding year, is equal to 10% or more of the bank holding company’s consolidated net worth. A bank holding company is not required to obtain prior Board approval for the redemption or purchase of its equity securities if (i) both before and immediately after the redemption, the bank holding company is well-capitalized, (ii) the bank holding company is well-managed under regulatory guidelines, and (iii) the bank holding company is not the subject of any unresolved supervisory issues.

Commercial Real Estate Concentration Guidelines

In December 2006, the federal banking regulators issued guidance entitled “Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices” to address increased concentrations in commercial real estate loans. In addition, in December 2015, the federal bank agencies issued additional guidance entitled “Statement on Prudent Risk Management for Commercial Real Estate Lending.” Together, these guidelines describe the criteria the agencies will use as indicators to identify institutions potentially exposed to CRE concentration risk. An institution that has (i) experienced rapid growth in CRE lending, (ii) notable exposure to a specific type of CRE, (iii) total reported loans for construction, land development, and other land representing 100% or more of the institution’s capital, or (iv) total non-owner-occupied CRE (including construction) loans representing 300% or more of the institution’s capital, and the outstanding balance of the institutions CRE portfolio has increased by 50% or more in the prior 36 months, may be identified for further supervisory analysis of the level and nature of its CRE concentration risk.

Community Reinvestment Act

The Community Reinvestment Act of 1977 and the regulations issued thereunder are intended to encourage banks to help meet the credit needs of the communities they serve, including their assessment area(s) (as established for these purposes in accordance with current applicable regulations based principally on the location of branch offices). In addition to substantial penalties and corrective measures that may be required for a violation of certain fair lending laws, the federal banking agencies may take compliance with such laws and CRA into account when regulating and supervising other activities. Under the CRA, institutions are assigned a rating of “outstanding,” “satisfactory,” “needs to improve,” or “substantial noncompliance.” An institution’s record in meeting the requirements of the CRA is based on a performance-based evaluation system, and is made publicly available and is taken into consideration in evaluating any applications it files with federal regulators to engage in certain activities, including approval of a branch or other deposit facility, mergers and acquisitions, office relocations, or expansions into nonbanking activities. Our Bank operates under a CRA “strategic plan” and received a “satisfactory” rating in its most recent CRA evaluation.

In October 2023, the Federal Reserve, FDIC and OCC issued a final rule to amend their regulations implementing the CRA. The rule materially revises the current CRA framework, including the assessments areas in which a bank is evaluated to include activities associated with online and mobile banking, the tests used to evaluate the bank in its assessment areas, new methods of calculating credit for lending, investment and service activities and additional data collection and reporting requirements. Most of the final CRA rule’s requirements ~~will~~would behave been applicable beginning January 1, 2026,. ~~with certain requirements~~However, ~~including~~in ~~the~~July ~~data~~of ~~reporting requirements~~2025, ~~applicable~~the asfederal ofbanking ~~January~~regulators 1,issued ~~2027.~~a ~~However,~~proposal ~~the~~to ~~implementation~~rescind of the ~~new~~2023 CRA ~~regulations~~final isrule. ~~currently~~Regulators ~~paused~~are ~~pending~~currently applying the ~~resolution~~pre-2023 ofCRA ~~legal~~framework ~~challenges~~while towaiting for the ~~new~~proposal ~~CRA~~to ~~rule~~formally pass.

Bank Secrecy Act, Anti-Terrorism, Anti-Money Laundering Legislation and OFAC

The Bank is subject to the Bank Secrecy Act (the “BSA”) and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “USA Patriot Act”). These statutes and related rules and regulations impose requirements and limitations on specified financial transactions and accounts and other relationships intended to guard against money laundering and terrorism financing. The principal requirements for an insured depository institution include (i) establishment of an anti-money laundering (“AML”) program that includes training and audit components, (ii) establishment of a “know your customer” program involving due diligence to confirm the identities of persons seeking to open accounts and to deny accounts to those persons unable to demonstrate their identities, (iii) the filing of currency transaction reports for deposits and withdrawals of large amounts of cash and suspicious activities reports for activity that might signify money laundering, tax evasion, or other criminal activities, (iv) additional precautions for accounts sought and managed for non-U.S. persons and (v) verification and certification of money laundering risk with respect to private banking and foreign correspondent banking relationships. For many of these tasks a bank must keep records to be made available to its primary federal regulator. AML rules and policies are developed by a bureau within the Financial Crimes Enforcement Network (“FinCEN”), but compliance by individual institutions is overseen by its primary federal regulator.

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tasks a bank must keep records to be made available to its primary federal regulator. AML rules and policies are developed by a bureau within the Financial Crimes Enforcement Network (“FinCEN”), but compliance by individual institutions is overseen by its primary federal regulator.

Privacy and Data Security

Federal and state law contains extensive consumer privacy protection provisions. The GLBA and the implementing regulations issued by federal regulatory agencies require financial institutions (including banks, insurance agencies, and broker/dealers) to adopt policies and procedures regarding the disclosure of nonpublic personal information about their customers to non-affiliated third parties. In general, financial institutions are required to explain to customers their policies and procedures regarding the disclosure of such nonpublic personal information and, unless otherwise required or permitted by law, financial institutions are prohibited from disclosing such information except as provided in their policies and procedures. Specifically, the GLBA established certain information security guidelines that require each financial institution, under the supervision and ongoing oversight of its board of directors or an appropriate committee thereof, to develop, implement, and maintain a comprehensive written information security program designed to ensure the security and confidentiality of customer information, to protect against anticipated threats or hazards to the security or integrity of such information, and to protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer. The Bank is subject to such standards, as well as standards for notifying clients in the event of a security breach.

Consumer privacy protection continues to be an area of focus for state legislatures. Several states, including California, have recently adopted consumer privacy protection laws that impose compliance obligations with respect to safeguarding personally identifiable information. The Company continues to monitor states in which it has a physical presence with respect to consumer privacy protection compliance obligations.

Cybersecurity

Federal banking regulators, as well as the ~~U.S.~~ Securities and Exchange Commission (“SEC”) and related self-regulatory organizations, regularly issue guidance regarding cybersecurity that is intended to enhance cybersecurity risk management among financial institutions. Recent cyber-attacks against banks and other financial institutions that resulted in unauthorized access to confidential customer information have prompted the federal banking regulators to issue extensive guidance on cybersecurity. Among other things, financial institutions are expected to design multiple layers of security controls to establish lines of defense and ensure that their risk management processes address the risks posed by compromised customer credentials, including security measures to authenticate customers accessing internet-based services. A financial institution also should have a robust business continuity program to recover from a cyberattack and procedures for monitoring the security of third-party service providers that may have access to nonpublic data at the institution.

Banking organizations are required to notify their primary federal regulator of significant computer security incidents within 36 hours of determining that such an incident has occurred. In addition, the SEC ~~recently~~requires ~~enacted rules, effective as of December 18, 2023, requiring~~ public companies to disclose material cybersecurity incidents that they experience on Form 8-K within four business days of determining that a material cybersecurity incident has occurred and to disclose on an annual basis material information regarding their cybersecurity risk management, strategy, and governance.

Federal Home Loan Bank Membership

The Bank is a member of the FHLB. Each member of the FHLB is required to maintain a minimum investment in the Class B stock of the FHLB. The Board of Directors of the FHLB can increase the minimum investment requirements in the event it has concluded that additional capital is required to allow it to meet its own regulatory capital requirements. Any increase in the minimum investment requirements outside of specified ranges requires the approval of the Federal Housing Finance Agency. Because the extent of any obligation to increase the level of investment in the FHLB depends entirely upon the occurrence of a future event, we presently are unable to determine the extent of future required potential payments to the FHLB. Additionally, if a member financial institution fails, the right of the FHLB to seek repayment of funds loaned to that institution will take priority (a super lien) over the rights of all other creditors.

Other Consumer Laws

State usury laws and federal laws concerning interest rates (including preemption of certain state usury laws) limit the amount of interest and various other charges collected or contracted by a bank. The Bank’s loans are also subject to Utah law and federal laws applicable to consumer credit transactions, such as the:

•Federal Truth-In-Lending Act governing disclosures of credit terms to consumer borrowers;

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•Home Mortgage Disclosure Act requiring financial institutions to provide information to enable public officials to determine whether a financial institution is fulfilling its obligations to meet the housing needs of the community it serves;

•Equal Credit Opportunity Act prohibiting discrimination on the basis of race, creed or other prohibitive factors in extending credit;

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•Real Estate Settlement Procedures Act which requires lenders to disclose certain information regarding the nature and cost of real estate settlements, and prohibits certain lending practices, as well as limits escrow account amounts in real estate transactions;

•Fair Debt Collection Act governing the manner in which consumer debts may be collected by collection agencies;

•Fair and Accurate Credit Transactions Act which establishes additional rights for consumers to obtain and correct credit reports, addresses identity theft, and establishes additional requirements for consumer reporting agencies and financial institutions that provide adverse credit information to a consumer reporting agency; and

•The rules and regulations of various federal agencies charged with the responsibility of implementing such federal laws.

Such laws and other consumer regulation matters are issued and governed by the CFPB, although they are enforced against the Bank by the FDIC and UDFI. The CFPB is responsible for establishing and implementing rules and regulations under certain federal consumer protection laws with respect to the conduct of providers of certain consumer financial products and services. The CFPB has rulemaking authority over many of the statutes governing products and services offered to bank customers.

On February 8, 2025, the Acting Director of the CFPB directed CFPB employees to pause all supervision and examination activity. This directive, along with other actions recently taken by the current U.S. presidential administration, have created uncertainty about the future of the CFPB, its rulemaking authority and its existing and proposed regulations. However, the FDIC and UDFI enforce CFPB regulations in respect of the Bank.

The Bank’s deposit and loan operations are also subject to the following:

•Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; and

•Electronic Funds Transfer Act and Regulation E, which govern automatic deposits to, and withdrawals from, deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services.

Our Relationship with Business Funding Group

BFG is a nationally significant referral source of small business loans. Included in these loans are SBA loans to be funded by financial institutions and other SBA lenders. BFG works alongside a network of over 50 banks to refer business loans to small, independent businesses across various industries. Our relationship with BFG is an important component of our diversification strategy as BFG has been the primary source of SBA loan referrals for the Bank. In consideration of marketing and referral services provided to the Bank, BFG receives a fee for SBA loans referred to the Bank that are closed and funded by the Bank. The fees on each SBA loan referred to the Bank by BFG are determined on a loan-by-loan basis and based on the amount and terms of the principal SBA loan. Such fees are disclosed on SBA Form 159 and filed with SBA for each funded loan.

In December 2019, we acquired directly from certain members of BFG a 10% ownership interest in BFG in exchange for 950,784 newly issued shares of our common stock, representing 10.9% of our common stock outstanding at the time of purchase. To strengthen our relationship with BFG, we negotiated a right of first refusal and an option to acquire 100% of BFG. Subject to the terms of that certain Right of First Refusal and Option Agreement, dated as of March 31, 2020, we were granted an option to acquire all of the ownership interests in BFG at any time from January 1, 2021, to January 1, 2028, at an earnings multiple of 10 to 15 times BFG’s net profit based on the fiscal year ended immediately prior to the exercise of the option. In addition, we have a right of first refusal, prior to our exercise of our option, to acquire any ownership interests that any individual owner of BFG wishes to sell. As consideration for the right of first refusal and option, we issued warrants to each BFG member (other than the Company) with the right to acquire shares of our common stock on a pro rata basis according to each such person’s percentage ownership in BFG, not exceeding an aggregate of 270,000 shares, at an exercise price of $6.67 per share. Unless otherwise exercised, the warrants will expire on March 31, 2028. Other than the Right of First Refusal and Option Agreement and the Standstill Agreement, there are no other agreements between us and BFG or among our respective shareholders.

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On July 25, 2023, the Company entered into a definitive agreement, as amended, to purchase from certain members of BFG an additional 10% membership interest in exchange for shares of the Company’s common stock. On February 5, 2024, the transaction was consummated and the Company issued an aggregate 339,176 shares of the Company’s common stock in a private placement to the sellers in exchange for the additional membership interest in BFG. The second transaction increased the Company’s total ownership interest in BFG to 20%. The ownership interest consists of Class A Voting Units representing 4.7% of the aggregate membership interests of BFG and Class B Non-Voting Units representing 15.3% of the aggregate membership interests of BFG.

Available Information

The Company maintains an internet site at www.finwisebancorp.com on which it makes available, free of charge, its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to the foregoing as soon as reasonably practicable after these reports are electronically filed with, or furnished to, the SEC. In addition, shareholders may access these reports and documents on the SEC’s web site at www.sec.gov. The information on, or accessible through, our website or any other website cited in this Report is not part of, or incorporated by reference into, this Report and should not be relied upon in determining whether to make an investment decision.

Item 1A. RISK FACTORS

The following risks, some of which have occurred and any of which may occur in the future, can have a material adverse effect on our business, results of operations or financial performance, which in turn can affect the price of our publicly traded securities. These are not the only risks we face. There may be other risks we are not currently aware of or that we currently deem not to be material but that may become material in the future. To the extent that any of the information contained in this document constitutes forward-looking statements, the risk factors below should be reviewed as cautionary statements identifying important factors that could cause actual results to differ materially from those expressed in any forward-looking statements made by us or on our behalf. See Cautionary Note Regarding Forward-Looking Statements.

Risks Related to Cybersecurity and Technology

System failure or cybersecurity breaches of our network security could subject us to increased operating costs as well as litigation and other potential losses.

Our computer systems and network infrastructure could be vulnerable to hardware and cybersecurity issues. Our operations are dependent upon our ability to protect our computer equipment against damage from fire, power loss, telecommunications failure or a similar catastrophic event. We could also experience a breach by intentional or negligent conduct on the part of employees or other internal sources. Any damage or failure that causes an interruption in our operations could have a material adverse effect on our financial condition and results of operations. The importance of our online banking systems to the Company’s operations means that any problems in its functionality would have a material adverse effect on the Company’s operations, business model and growth strategy.

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Our operations are also dependent upon our ability to protect our computer systems and network infrastructure against damage from physical break-ins, cybersecurity breaches and other disruptive problems caused by the internet or other users. Such computer break-ins and other disruptions would jeopardize the security of information stored in and transmitted through our computer systems and network infrastructure, which may result in significant liability, damage our reputation and inhibit the use of our internet banking services by current and potential customers. We could also become the target of various cyberattacks. We regularly add additional security measures to our computer systems and network infrastructure to mitigate the possibility of cybersecurity breaches, including firewalls and penetration testing. However, it is difficult or impossible to defend against every risk being posed by changing technologies as well as acts of cyber-crime. Increasing sophistication of cyber criminals and terrorists make keeping up with new threats difficult and could result in a system breach. Controls employed by our information technology department and cloud vendors could prove inadequate. A breach of our security that results in unauthorized access to our data could expose us to a disruption or challenges relating to our daily operations, as well as to data loss, litigation, damages, fines and penalties, significant increases in compliance costs and reputational damage, any of which could have a material adverse effect on our business, financial condition and results of operations.

We have implemented remote working and workplace protocols for our employees in accordance with government requirements. Working outside of our network protection may increase our risk exposure to cybersecurity breaches. An increase in the number of employees working offsite may correspond to an increase in the size of our risk exposure to cyber disruptions.

Despite the implementation of security measures, our internal computer systems and those of our Strategic Program platforms, and other contractors and consultants as well as third party vendors of IT and data security systems and services, are vulnerable to damage and interruptions from security breaches, computer viruses, fraud and similar incidents involving the loss or unauthorized access of confidential information.

We cannot be sure that our continued data protection efforts and investment in information technology will prevent future significant breakdowns, data leakages, breaches in our systems or the systems of our third party contractors and collaborators, or other cyber incidents that could have a material adverse effect upon our reputation, business, operations or financial condition. If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our programs and the development of our product candidates could be delayed.

Our proprietary technologies and analytic models have not yet been extensively tested during down-cycle economic conditions. If these do not, or are perceived not to, accurately gather and interpret performance data for loans and identify attractive risk-adjusted market sectors, our performance may be worse than anticipated.

The technologies created by and relied upon by us may not function properly, or at all, which may have a material impact on our operations and financial conditions. The performance of loans originated by us is dependent on the effectiveness of our credit underwriting systems used to evaluate borrowers’ credit profiles and likelihood of default. While our proprietary technologies and analytic models are continually adjusted to account for changes in various macroeconomic conditions, the bulk of the data gathered and the development of our enterprise data warehouse have largely occurred during a period of sustained economic growth or during the COVID-19 pandemic when extraordinary government stimulus impacted the economy. Our proprietary technologies have not been extensively tested during other adverse economic cycles. There is no assurance that our proprietary technologies can accurately predict loan performance during periods of adverse economic conditions. If our proprietary technologies are unable to accurately reflect the credit risk of loans under such economic conditions, we may experience greater than expected losses on such loans. For example, in response to the COVID-19 pandemic, the federal government quickly implemented stimulus measures. The subsequent discontinuation of those stimulus measures has increased, and may continue to increase, the delinquency and default rates of borrowers, which may increase uncertainty about the effectiveness of our proprietary technologies.

We may not have the resources to keep pace with rapid technological changes in the industry or implement new technology effectively.

The financial services industry is undergoing rapid technological changes with frequent introductions of new technology-driven products and services. Our future success will depend, at least in part, upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands for convenience as well as to create additional efficiencies in our operations as we continue to grow and expand our products and service offerings. We may experience operational challenges as we implement these new technology enhancements or products, which could impair our ability to realize the anticipated benefits from such new technology or require us to incur significant costs to remedy any such challenges in a timely manner.

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Our operations could be interrupted if our third-party service providers or Strategic Program service providers experience operational or other systems difficulties or terminate their services.

We outsource some of our operational activities to third parties and counterparties for certain services, including, but not limited to, loan marketing and origination, core systems support, informational website hosting, internet services, online account opening and other processing services. Our business depends on the successful and uninterrupted functioning of our information technology and telecommunications systems and third-party service providers. We also leverage the financial technology capabilities of our Strategic Program service providers to meet our enterprise risk framework and enable us to realize operating efficiencies.

As a result, if these third-party service providers or our Strategic Program service providers experience difficulties, are subject to cybersecurity breaches, or terminate their services, and we are unable to replace them with other service providers or alternative counterparties, particularly on a timely basis, our operations could be interrupted. If an interruption were to continue for a significant period, our business, financial condition and results of operations could be adversely affected. Even if we can replace third-party service providers or Strategic Program service providers, it may be at a higher cost to us, which could adversely affect our business, financial condition and results of operations.

Risks Related to Our Banking Business

AsOur a business ~~operating~~and operations in the financial services industry, ~~our business and operations~~ may be adversely affected in numerous and complex ways by weak economic conditions.

Our business and operations, which primarily consist of lending money to clients in the form of loans, borrowing money from clients in the form of deposits and investing in interest earning deposits in other banks and securities, are sensitive to general business and economic conditions in the United States. We solicit deposits and originate loans throughout the United States. If the U.S. economy weakens, our growth and profitability from our lending, deposit and investment operations could be constrained. Uncertainty about the federal fiscal policymaking process, the medium- and long-term fiscal outlook of the federal government and future tax rates is a concern for businesses, consumers and investors in the United States. Adverse economic conditions could have a material adverse effect on our business, financial condition and results of operations.

Conditions related to inflation, global supply chains, labor market, volatile interest rates, international conflicts, changes in trade policies and other factors, such as real estate values, state and local municipal budget deficits, government spending and the U.S. national debt may, directly and indirectly, adversely affect our financial condition and results of operations. Inflationary and other economic pressure resulting in the inability of borrowers to repay loans could result in increased loan defaults, foreclosures and charge-offs and negatively affect our business, financial condition, results of operations, cash flows and future prospects.

Our Strategic Programs may also be susceptible to worsening economic conditions that place financial stress on our existing service providers and potential new Strategic Program services providers. These service providers may experience liquidity and other financial issues or strategically slow down growth, any of which could lead them to decrease or terminate their business with us.

Moreover, an inflationary environment combined with a competitive labor market and decreases in the market value of our equity awards could make it more costly for us to attract or retain employees. In order to meet the compensation ~~expectations of our prospective and current employees due to inflationary and other factors, we may be required to increase our operating costs or risk losing skilled workers to competitors.~~

Concerns about the performance of international economies, especially in Europe and emerging markets, and economic conditions in Asia, particularly the economies of China, South Korea and Japan, can impact the economy and financial markets here in the United States. If the national, regional and local economies experience worsening economic conditions, including high levels of unemployment, our growth and profitability could be constrained. Our business is significantly

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~~affected~~expectations ~~by monetary and other regulatory policies~~ of ~~the~~our ~~U.S.~~prospective ~~federal government, its agencies~~ and ~~government-sponsored~~current ~~entities.~~employees ~~Changes~~due into ~~any~~inflationary ~~of these policies are influenced by macroeconomic conditions~~ and other factors ~~that are beyond our control~~, ~~are~~we ~~difficult~~may tobe ~~predict~~required and could have a material adverse effect on our business, financial position, results of operations and growth prospects. In addition, decreases in real estate values within our service areas caused by economic conditions, recent changes in tax laws or other events could adversely affect the value of the property used as collateral for our loans, which could cause us to realize a loss in the event of a foreclosure. Further, deterioration in economic conditions could drive the level of loan losses beyond the level we have provided for in our ACL, which in turn could necessitate an increase in our ~~provision~~operating ~~for~~costs ~~credit losses and a resulting reduction to our earnings and capital. These factors can individually~~ or inrisk ~~the~~losing ~~aggregate~~skilled beworkers ~~detrimental~~ to ~~our business, and the interplay between these factors can be complex and unpredictable~~competitors. ~~Adverse economic conditions could have a material adverse effect on our business, financial condition and results of operations.~~

~~Acts~~Concerns about the performance of ~~terrorism~~international economies, ~~geopolitical~~especially in Europe and emerging markets, and economic conditions in Asia, particularly the economies of China, South Korea and Japan, can impact the economy and financial markets here in the United States. If the national, regional and local economies experience worsening economic conditions, including high levels of unemployment, our growth and profitability could be constrained. Our business is significantly affected by monetary and other ~~external~~regulatory policies of the U.S. federal government, its agencies and government-sponsored entities. Changes in any of these policies are influenced by macroeconomic conditions and other factors that are beyond our control, are difficult to predict and could have a material adverse effect on our business, financial position, results of operations and growth prospects. In addition, decreases in real estate values within our service areas caused by economic conditions, recent changes in tax laws or other events could ~~impact~~adversely affect the value of the property used as collateral for our ~~ability~~loans, which could cause us to ~~conduct~~realize a loss in the event of a foreclosure. Further, deterioration in economic conditions could drive the level of loan losses beyond the level we have provided for in our ACL, which in turn could necessitate an increase in our provision for credit losses and a resulting reduction to our earnings and capital. These factors can individually or in the aggregate be detrimental to our business, and the interplay between these factors can be complex and unpredictable. Adverse economic conditions could have a material adverse effect on our business, financial condition and results of operations.

Financial institutions have been, and continue to be, targets of terrorist threats aimed at compromising operating and communication systems and remain central targets for potential acts of terrorism. Such events could cause significant damage, impact the stability of our facilities and result in additional expenses, impair the ability of our borrowers to repay their loans, reduce the value of collateral securing repayment of our loans, and result in the loss of revenue. While we have established and regularly test disaster recovery procedures, the occurrence of any such event could have a material adverse effect on our business, operations and financial condition. Additionally, financial markets may be adversely affected by the current or anticipated impact of military conflict, including escalating military action between Russia and Ukraine, terrorism or other geopolitical events.

Our commercial and consumer banking clients who participate in our real estate lending program and SBA 7(a) lending program are concentrated in certain geographic areas and we are sensitive to adverse changes in those regional economies.

The success of our real estate lending programs depends substantially upon the general economic conditions in Utah, which we cannot predict ~~with certainty~~. Adverse conditions in the local Utah economy such as unemployment, recession, a catastrophic event or other factors beyond our control could impact the ability of borrowers participating in our real estate lending program to repay their loans, which could impact our net interest income. In addition, our borrowers who participate in our SBA 7(a) lending program span across multiple states, with a focus in New York and New Jersey. As in the case with Utah, we similarly cannot foresee or control the economic conditions in such states. A downturn in these regional economies generally could make it more difficult for our borrowers to repay their loans and may lead to loan losses. ~~For~~Any ~~these reasons, any~~ national, regional or local economic downturn that affects our service regions, or existing or prospective borrowers in such regions, could have a material adverse effect on our real estate and SBA 7(a) lending and the business, financial condition and results of operations.

We face strong competition from financial services companies and other companies that offer banking services.

We operate in the highly competitive financial services industry and face significant competition for customers from financial institutions located both within and beyond our principal markets and product lines. We compete with commercial banks, savings banks, credit unions, nonbank financial services companies, including the private credit lending market, and other financial institutions operating both within our market areas and nationally, and in respect of our financial technology initiative we also compete with other entities in the financial technology industry, including a limited number of other banks that have developed strategic programs similar to our Strategic Programs.

Many of our non-bank competitors are not subject to the same extensive regulations that govern our activities and may have greater flexibility in competing for business. Our inability to compete successfully in the markets in which we operate could have a material adverse effect on our business, financial condition or results of operations.

WeIn ~~may~~addition, ~~not~~Fintech becompanies ~~able~~have been actively acquiring or pursuing bank charters to ~~measure~~gain direct access to deposits, reduce reliance on partner banks, and ~~limit~~lower capital costs, driven by a more permissive regulatory environment. This shift allows Fintech companies to scale and operate with the same authority as traditional banks. The number of federal bank charter applications in 2025 reached its highest level since 2020, with numerous, crypto-adjacent, and non-bank firms seeking licensing and the OCC and the FDIC are signaling increased openness to fintech charter applications, encouraging new entrants. As a result of this current trend, we may lose some of our ~~credit~~banking ~~risk~~clients ~~adequately~~and customers who are able to seek loans from some of these Fintech companies with newly acquired bank charters, which ~~could~~may ~~lead~~have toa ~~unexpected~~material ~~losses~~adverse effect on our business, results of operations and financial performance.

~~Our~~Furthermore, ~~business~~several ~~depends~~online onbanking ~~our~~operations ~~ability~~as towell ~~successfully~~as ~~measure and manage credit risk. As a lender, we are exposed to~~ the ~~risk~~online ~~that~~banking ~~the~~programs ~~principal~~ of, orconventional ~~interest~~banks ~~on,~~have ainstituted ~~loan~~Fintech ~~will~~Banking ~~not~~and bePayment ~~paid~~Solutions ~~timely~~strategies orsimilar ~~at all or that the value of any collateral supporting a loan will be insufficient~~ to ~~cover our outstanding exposure~~ours. InAs ~~addition~~a consequence, we ~~are~~have ~~exposed~~encountered tocompetition ~~risks~~in ~~with~~this ~~respect~~area toand ~~the~~anticipate ~~period~~that ofwe ~~time~~will ~~over~~continue ~~which the loan may be repaid, risks relating~~ to ~~proper~~do ~~loan~~so ~~underwriting, closing, servicing and liquidation, risks resulting from changes~~ in ~~economic~~the ~~and industry conditions, and risks inherent in dealing with individual loans and borrowers~~future. IfThis ~~the~~competition ~~overall~~may ~~economic~~increase ~~climate~~our ~~in the United States generally~~costs, orreduce ~~in any of~~ our ~~markets~~revenues ~~specifically,~~or ~~experiences~~revenue ~~material~~growth ~~disruption~~or, ~~our~~because ~~borrowers~~we ~~may~~are ~~experience~~a ~~difficulties~~relatively insmall ~~repaying~~banking ~~their~~operation ~~loans,~~without the ~~collateral~~name ~~we hold may decrease~~

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inrecognition ~~value~~of ~~or become illiquid~~other, ~~and~~more ~~the~~established ~~level~~banking ~~of delinquencies~~operations, ~~nonperforming~~make ~~loans,~~it ~~and~~difficult ~~charge-offs~~for ~~could~~us ~~rise~~to ~~and~~compete ~~require~~effectively ~~significant~~in ~~additional~~obtaining ~~provisions~~these ~~for loan losses~~relationships.

We may not be able to measure and limit our credit risk adequately, which could lead to unexpected losses.

Our business substantially depends on our ability to successfully measure and manage credit risk. As a lender, we are exposed to the risk that the principal of, or interest on, a loan will not be paid timely or at all or that the value of any collateral supporting a loan will be insufficient to cover our outstanding exposure. In addition, we are exposed to risks with respect to the period of time over which the loan may be repaid, risks relating to proper loan underwriting, closing, servicing and liquidation, risks resulting from changes in economic and industry conditions, and risks inherent in dealing with individual loans and borrowers. If the overall economic climate in the United States generally, or in any of our markets specifically, experiences material disruption, our borrowers may experience difficulties in repaying their loans, the collateral we hold may decrease in value or become illiquid, and the level of delinquencies, nonperforming loans, and charge-offs could rise and require significant additional provisions for loan losses.

Our risk management practices, such as monitoring the concentration of our loans within specific markets and our credit approval, review and administrative practices, may not adequately reduce credit risk. A failure to effectively measure and limit the credit risk associated with our loan portfolio may result in loan defaults, foreclosures and additional charge-offs, and may necessitate that we significantly increase our ACL, each of which could adversely affect our net income. As a result, our inability to successfully manage credit risk could have an adverse effect on our business, financial condition and results of operations.

Our ACL may prove to be insufficient to absorb potential losses in our loan portfolio.

The Financial Accounting Standards Board (the “FASB”) has issued an accounting standard for establishing ~~allowances~~an allowance for ~~loan~~credit ~~and lease~~ losses ~~that replaces the prior approach~~ under United States generally accepted accounting principles (“U.S. GAAP”), which generally ~~considers~~estimates ~~only past events and current conditions, with a forward-looking methodology that reflects~~ the expected credit losses over the lives of financial assets, starting when such assets are first originated or acquired. As an emerging growth company relying on the extended transition period for new accounting standards, this standard, referred to as Current Expected Credit Loss (“CECL”), became effective for us on January 1, 2023. The CECL standard requires us to record, at the time of origination, credit losses expected throughout the life of the asset portfolio on loans and held-to-maturity (“HTM”) securities~~, as opposed to the former practice of recording losses when it is probable that a loss event has occurred~~. ~~Moreover,~~The ~~the~~ CECL standard may create more volatility in the level of allowance for credit losses. If we are required to materially increase the level of our allowance for credit losses for any reason, such increase could have an adverse effect on our business, financial condition, and results of operations. For further information, ~~please~~ see Note 1 - Summary of Significant Accounting Policies to the consolidated financial statements included in Part II, Item 8.

We maintain an ACL that represents management’s judgment of probable losses and risks inherent in our loan portfolio. The level of the allowance reflects management’s continuing evaluation of general economic conditions, diversification and seasoning of the loan portfolio, historic loss experience, identified credit problems, delinquency levels and adequacy of collateral. The determination of the appropriate level of our ACL is inherently highly subjective and requires management to make significant estimates of and assumptions regarding current credit risks, all of which may undergo material changes. Inaccurate management assumptions, deterioration of economic conditions affecting borrowers, new information regarding existing loans, identification or deterioration of additional problem loans, acquisition of problem loans and other factors (including third-party review and analysis), both within and outside of our control, may require us to increase our ACL. If we are required to materially increase the level of our ACL for any reason, such increase could have an adverse effect on our business, financial condition and results of operations.

~~New~~Our ~~lines~~SBA oflending ~~business~~program oris ~~new~~dependent ~~products~~upon ~~and~~the ~~services~~U.S. ~~may~~federal ~~subject~~government, usand towe ~~additional~~face specific risks associated with originating SBA loans.

~~From~~Our ~~time~~SBA tolending ~~time,~~program weis ~~may~~dependent ~~implement~~upon orthe ~~may~~U.S. ~~acquire~~federal ~~new~~government. ~~lines~~In of2025, ~~business~~we orvoluntarily ~~pilot~~relinquished ~~programs~~our orPreferred ~~offer~~Lending ~~new~~Program ~~products~~(“PLP”) ~~and~~delegated ~~services within existing lines of business~~authority. ~~There~~We are ~~substantial~~now ~~risks~~an ~~and~~SBA-approved ~~uncertainties~~General ~~associated~~Processing(“GP”) ~~with~~lender. ~~these~~As ~~efforts,~~an ~~particularly~~SBA inGP ~~instances~~Lender, ~~where~~we ~~the~~submit ~~markets~~all ~~are~~SBA ~~not~~loan ~~fully~~applications ~~developed.~~to To the ~~extent~~Loan weGuaranty ~~enter~~Processing ~~into~~Center ~~new~~for ~~lines~~final ofapproval. ~~business,~~There weis ~~will~~a ~~face~~risk ~~numerous risks and uncertainties, including risks associated with the possibility~~ that we ~~have~~may ~~insufficient~~lose ~~expertise~~loan toapplicants ~~engage~~and inexisting ~~such~~customers ~~activities~~to ~~profitably~~lenders orwho ~~without~~are ~~incurring~~SBA ~~inappropriate~~Preferred ~~amounts of risk~~Lenders, ~~the required investment of capital~~ and ~~other~~as ~~resources~~a ~~and~~result ~~the~~we ~~loss~~could ofexperience ~~investors~~a ~~due~~material toadverse ~~the~~effect ~~perception that we are no longer focusing~~ on our ~~core~~financial ~~business~~results. InAny ~~developing~~changes ~~and~~to ~~marketing~~the ~~new~~SBA ~~lines of business and new products and services~~program, weincluding ~~may~~but ~~invest significant time and resources. We may~~ not ~~achieve~~limited ~~target~~to ~~timetables~~changes ~~for~~to the ~~introduction~~level ~~and development~~ of ~~new~~guarantee ~~lines~~provided ofby ~~business~~the ~~and~~federal ~~new~~government ~~products~~on orSBA ~~services~~loans, ~~and~~changes ~~price~~to ~~and~~program ~~profitability~~specific ~~targets~~rules ~~may~~impacting ~~not~~volume ~~prove~~eligibility ~~feasible.~~under ~~External~~the ~~factors~~guaranty program, ~~such~~ as ~~regulatory~~well ~~compliance~~as ~~obligations,~~changes ~~competitive~~to ~~alternatives~~the ~~and~~program ~~shifting~~amounts ~~market~~authorized ~~preferences,~~by ~~may~~Congress ~~also~~or ~~impact~~exhaustion of the ~~successful~~available ~~implementation~~funding offor aSBA ~~new~~programs, ~~line~~may ofhave ~~business~~a ormaterial aadverse ~~new~~effect ~~product~~on orour ~~service~~business. ~~Furthermore~~In addition, any ~~new~~default ~~line~~by ofthe ~~business~~U.S. orgovernment ~~new~~on ~~product~~its obligations or ~~service~~any ~~could~~prolonged ~~have~~government ashutdown ~~significant~~could, ~~impact~~among onother ~~the~~things, ~~effectiveness~~impede of our ~~system~~ability ofto ~~internal~~originate ~~controls.~~SBA ~~Failure~~loans toor ~~successfully~~sell ~~manage~~such ~~these~~loans ~~risks~~ in the ~~development~~secondary ~~and~~market, ~~implementation~~which ~~of new lines of business or new products or services~~ could ~~have~~materially aand ~~material~~adversely ~~adverse~~affect ~~effect on~~ our business, financial condition and results of operations. ~~and~~When ~~financial~~we ~~condition.~~originate SBA

We may be subject to certain risks in connection with growing through mergers and acquisitions.

It is possible that we could acquire other banking institutions, other financial services companies, banking and servicing platforms, or branches of banks in the future. Acquisitions typically involve the payment of a premium over book and trading values and, therefore, may result in the dilution of our tangible book value per share and/or our earnings per share. Our ability to engage in future mergers and acquisitions depends on various factors, including: (1) our ability to identify

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~~suitable~~loans, ~~merger~~we ~~partners~~incur ~~and~~credit ~~acquisition~~risk ~~opportunities;~~on ~~(2)~~the ~~our~~non-guaranteed ~~ability~~portion toof ~~finance~~the loans, and ~~complete~~if ~~transactions~~a customer defaults on ~~acceptable~~a ~~terms~~loan, ~~and~~we atshare ~~acceptable~~any ~~prices;~~loss and ~~(3)~~recovery ~~our~~related ~~ability~~ to ~~receive~~ the ~~necessary~~loan ~~regulatory~~pro-rata ~~and,~~with ~~when~~the ~~required, shareholder approvals~~SBA. ~~Furthermore,~~If ~~mergers~~the ~~and~~SBA ~~acquisitions~~establishes ~~involve~~that a ~~number~~loss ofon ~~risks~~an ~~and~~SBA ~~challenges,~~guaranteed ~~including~~loan ~~our~~is ~~ability~~attributable to ~~achieve~~significant ~~planned~~technical ~~synergies~~deficiencies ~~and~~in ~~to integrate~~ the ~~branches~~manner ~~and~~in ~~operations~~which ~~we acquire, and~~ the ~~internal~~loan ~~controls~~was ~~and~~originated, ~~regulatory~~funded ~~functions~~or ~~into~~serviced ~~our~~by ~~current operations~~us, asthe ~~well~~SBA asmay ~~the~~seek ~~diversion~~recovery of ~~management’s~~the ~~attention~~principal ~~from~~loss ~~existing~~related ~~operations, which may adversely affect our ability~~ to ~~successfully~~the ~~conduct~~deficiency ~~our~~from ~~business and negatively impact our financial results~~us.

Our SBA lending program is dependent upon the U.S. federal government, and we face specific risks associated with originating SBA loans.

Our SBA lending program is dependent upon the U.S. federal government. We are an approved participant in the SBA Preferred Lenders Program (“PLP”). As an SBA Preferred Lender, we are able to offer SBA loans to our clients without being subject to the potentially lengthy SBA approval process for application, servicing or liquidation actions necessary for lenders that are not SBA Preferred Lenders. If we lose our status as an SBA Preferred Lender, we may lose some or all of our customers to lenders who are SBA Preferred Lenders, and as a result we could experience a material adverse effect on our financial results. Any changes to the SBA program, including but not limited to changes to the level of guarantee provided by the federal government on SBA loans, changes to program specific rules impacting volume eligibility under the guaranty program, as well as changes to the program amounts authorized by Congress or exhaustion of the available funding for SBA programs, may have a material adverse effect on our business. In addition, any default by the U.S. government on its obligations or any prolonged government shutdown could, among other things, impede our ability to originate SBA loans or sell such loans in the secondary market, which could materially and adversely affect our business, financial condition and results of operations. When we originate SBA loans, we incur credit risk on the non-guaranteed portion of the loans, and if a customer defaults on a loan, we share any loss and recovery related to the loan pro-rata with the SBA. If the SBA establishes that a loss on an SBA guaranteed loan is attributable to significant technical deficiencies in the manner in which the loan was originated, funded or serviced by us, the SBA may seek recovery of the principal loss related to the deficiency from us.

As the funding and sale of the guaranteed portion of SBA 7(a) loans has been a major portion of our business and a significant portion of our non-interest income, any significant changes to the SBA 7(a) program, such as its funding or eligibility requirements, may have an adverse effect on our prospects, financial condition and results of operations. Even if we are able to continue to originate and sell SBA 7(a) loans in the secondary market, we might not continue to realize premiums upon the sale of the guaranteed portion of these loans or the premiums may decline due to economic and competitive factors. Furthermore, when we sell the guaranteed portion of SBA loans in the ordinary course of business, we are required to make certain representations and warranties to the purchaser about the SBA loan and the manner in which they were originated. Under these agreements, we may be required to repurchase the guaranteed portion of the SBA loan if we have breached any of these representations or warranties, in which case we may record a loss. In addition, if repurchase and indemnity demands increase on loans that we sell from our portfolios, our liquidity, results of operations and financial condition could be adversely affected.

Generally, we do not maintain reserves or loss allowances for such potential claims and any such claims could materially and adversely affect our business, financial condition and earnings. The laws, regulations and standard operating procedures that are applicable to SBA loan products may change in the future. We cannot predict the effects of these changes on our business and profitability. Because government regulation greatly affects the business and financial results of all commercial banks and bank holding companies and especially our organization, changes in the laws, regulations and procedures applicable to SBA loans could adversely affect our ability to operate profitably.

~~The~~We ~~laws, regulations and standard operating procedures that~~ are ~~applicable~~subject to ~~SBA~~interest ~~loan~~rate ~~products~~risk ~~may~~as ~~change~~fluctuations in ~~the~~interest ~~future.~~rates Wemay cannot predict the effects of these changes on our business and profitability. Because government regulation greatly affects the business and financial results of all commercial banks and bank holding companies and especially our organization, changes in the laws, regulations and procedures applicable to SBA loans could adversely affect our ~~ability to operate profitably~~earnings.

Most of our banking assets and liabilities are monetary in nature and subject to risk from changes in interest rates. Like most financial institutions, our earnings are significantly dependent on our net interest income, the principal component of our earnings, which is the difference between interest earned by us from our interest earning assets, such as loans and investment securities, and interest paid by us on our interest-bearing liabilities, such as deposits and borrowings. We expect that we will periodically experience “gaps” in the interest rate sensitivities of our assets and liabilities, meaning that either our interest-bearing liabilities will be more sensitive to changes in market interest rates than our interest earning assets, or vice versa. In either case, if market interest rates should move contrary to our position, this gap will negatively impact our earnings. The impact on earnings is more adverse when the slope of the yield curve flattens; that is, when short-term interest rates increase more than long-term interest rates or when long-term interest rates decrease more than short-term interest rates.

Changes to prevailing interest rates could influence not only the interest we receive on loans and investments and the amount of interest we pay on deposits and borrowings, but such changes could also affect (i) our ability to originate loans at competitive rates and obtain deposits; (ii) the fair value of our financial assets and liabilities; (iii) the average duration of our loan portfolios and other interest-earning assets; and (iv) the mix of lending products we originate. A prolonged period of extremely volatile and unstable market conditions could increase our funding costs and negatively affect market risk mitigation strategies. Increased interest rates may decrease borrower demand for certain of our lending products, even as inflation places pressure on consumer spending, borrowing and saving habits as consumers evaluate their prospects for future income growth and employment opportunities in the current economic environment, and as borrowers face uncertainty about the impact of rising prices on their ability to repay a loan. A change in demand for our lending products and any steps we may take to mitigate such change could impact our credit quality and overall growth.

We rely on BFG for loan referrals associated with our SBA 7(a) lending program, any disruption of that relationship may adversely impact our SBA lending business.

BFG is a nationally significant referral source of small business loans. BFG has been the primary source of SBA loan referrals for the Bank since the Bank began its SBA lending program in 2014. BFG referred 100% of the Bank’s SBA 7(a) loan originations for the year ended December 31, ~~2024~~2025. This relationship has permitted the Bank to focus on the development of underwriting, processing and servicing expertise for SBA 7(a) loans. Any disruption of our relationship with BFG or reduction in SBA 7(a) loan referrals could materially adversely impact our business, financial condition, results of operation and growth plans.

Negative changes in the economy affecting real estate values and liquidity could impair the value of collateral securing our real estate loans and result in loan and other losses.

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~~Because~~As aof ~~significant~~December 31, ~~portion~~2025, approximately $121.2 million, or 20.7%, of our ~~loan~~total ~~portfolio~~gross loans held-for-investment ~~within~~were ~~our~~ local lending ~~program,~~or owner occupied commercial lending program ~~and~~loans ~~SBA~~with 7(real estate as a) ~~lending~~primary ~~program~~or issecondary component of collateral. We also have approximately $199.0 million, or 34.0%, of our total gross loans held-for-investment in SBA loans that are secured, byat least in part, with real estate collateral as of December 31, ~~negative~~2025. The market value of real estate can fluctuate significantly in a short period of time. As a result, adverse developments affecting real estate values and the liquidity of real estate in our primary markets could increase the credit risk associated with our loan portfolio, and could result in losses that adversely affect our credit quality, financial condition and results of operations. Negative changes in the economy affecting real estate values and liquidity in our market areas could significantly impair the value of ~~collateral~~property ~~securing~~pledged ~~our~~as ~~real~~collateral ~~estate~~on loans and affect our ability to sell the collateral upon foreclosure without a loss or additional losses. Collateral may have to be sold for less than the outstanding balance of the loan, which could result in ~~loan~~losses ~~and~~on ~~other~~such loans. Such declines and losses would have a material adverse effect on our business, financial condition and results of operations.

As of December 31, 2024, approximately $64.2 million, or 13.8%, of our total gross loans held-for-investment were local lending or owner occupied commercial lending program loans with real estate as a primary or secondary component of collateral. We also have approximately $254.3 million, or 54.7%, of our total gross loans held-for-investment in SBA loans that are secured with real estate as a component of collateral as of December 31, 2024. The market value of real estate can fluctuate significantly in a short period of time. As a result, adverse developments affecting real estate values and the liquidity of real estate in our primary markets could increase the credit risk associated with our loan portfolio, and could result in losses that adversely affect our credit quality, financial condition and results of operations. Negative changes in the economy affecting real estate values and liquidity in our market areas could significantly impair the value of property pledged as collateral on loans and affect our ability to sell the collateral upon foreclosure without a loss or additional losses. Collateral may have to be sold for less than the outstanding balance of the loan, which could result in losses on such loans. Such declines and losses would have a material adverse effect on our business, financial condition and results of operations.

Appraisals and other valuation techniques we use in evaluating and monitoring loans secured by real property, other real estate owned and repossessed business and personal property may not accurately describe the net value of the asset.

In considering whether to make a loan secured by real property, we generally require an appraisal of the property which may not accurately describe the net value of the real property collateral after the loan is made. As a result, we may not be able to realize the full amount of any remaining indebtedness if we foreclose on and sell the relevant property. In addition, we rely on appraisals and other valuation techniques to establish the value of our other real estate owned, or OREO, and business and personal property that we acquire through foreclosure proceedings and to determine certain loan impairments. If any of these valuations are inaccurate, our consolidated financial statements may not reflect the correct value of our OREO, and our ACL may not reflect accurate loan impairments. This could have a material adverse effect on our business, financial condition or results of operations.

In the case of defaults on loans secured by real estate, we may be forced to foreclose on the collateral, subjecting us to the costs and potential risks associated with the ownership of the real property, or consumer protection initiatives or changes in state or federal law that may substantially raise the cost of foreclosure or prevent us from foreclosing at all.

Since we originate loans secured by real estate, we may have to foreclose on the collateral property to protect our investment and may thereafter own and operate such property for some period, in which case we would be exposed to the risks inherent in the ownership of real estate. Our inability to manage the amount of costs or size of the risks associated with the ownership of real estate, or write-downs in the value of other real estate owned, could have a material adverse effect on our business, financial condition and results of operations.

Additionally, consumer protection initiatives or changes in state or federal law may substantially increase the time and expense associated with the foreclosure process or prevent us from foreclosing at all. Some states in recent years have either considered or adopted foreclosure reform laws that make it substantially more difficult and expensive for lenders to foreclose on properties in default. If new state or federal laws or regulations are ultimately enacted that significantly raise the cost of foreclosure or raise outright barriers, such laws could have a material adverse effect on our business, financial condition and results of operation.

We may not be able to protect our intellectual property rights, and may become involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time consuming and unsuccessful.

We rely on a combination of copyright, trademark, trade secret laws and confidentiality provisions to establish and protect our proprietary rights. If we fail to successfully maintain, protect and enforce our intellectual property rights, our competitive position could suffer. Similarly, if we were to infringe on the intellectual property rights of others, our competitive position could suffer. Third parties may challenge, invalidate, circumvent, infringe or misappropriate our intellectual property, or such intellectual property may not be sufficient to permit us to take advantage of current market trends or otherwise to provide competitive advantages, which could result in costly redesign efforts, discontinuance of certain product or service offerings or other competitive harm. We may also be required to spend significant resources to monitor and police our intellectual property rights. Others, including our competitors, may independently develop similar technology, duplicate our products or services or design around our intellectual property, and in such cases we may not be able to assert our intellectual property rights against such parties. Further, our contractual arrangements may not effectively

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prevent disclosure of our confidential information or provide an adequate remedy in the event of unauthorized disclosure of our confidential or proprietary information. We may have to litigate to enforce or determine the scope and enforceability of our intellectual property rights, trade secrets and know-how, which could be time-consuming and expensive, could cause a diversion of resources and may not prove successful. The loss of intellectual property protection or the inability to obtain rights with respect to third party intellectual property could harm our business and ability to compete. In addition, because of the rapid pace of technological change in our industry, aspects of our business and our products and services rely on technologies developed or licensed by third parties, and we may not be able to obtain or continue to obtain licenses and technologies from these third parties on reasonable terms or at all.

Our origination of construction loans exposes us to increased lending risks.

We originate commercial construction loans primarily to professional builders for the construction of one-to-four family residences, apartment buildings, and commercial real estate properties. As of December 31, ~~2024~~2025, we had approximately $4249.31 million of construction loans, which represents approximately 98.14% of our total gross loan portfolio held-for-investment. Our construction loans present a greater level of risk than loans secured by improved, occupied real estate due to: (1) the increased difficulty at the time the loan is made of estimating the building costs and the selling price of the property to be built; (2) the increased difficulty and costs of monitoring the loan; (3) the higher degree of sensitivity to increases in market rates of interest; and (4) the increased difficulty of working out loan problems. In addition, construction costs may exceed original estimates as a result of increased materials, labor or other costs. Construction loans also often involve the disbursement of funds with repayment dependent, in part, on the success of the project and the ability of the borrower to sell or lease the property or refinance the indebtedness.

The small- to medium-sized businesses that we lend to may have fewer resources to weather adverse business developments, which may impair our borrowers’ ability to repay loans.

Small- to medium-sized businesses frequently have smaller market shares than their competition, may be more vulnerable to economic downturns, often need substantial additional capital to expand or compete and may experience substantial volatility in operating results, any of which may impair a borrower’s ability to repay a loan. In addition, the success of a small- and medium-sized business often depends on the management skills, talents and efforts of a small group of people, and the death, disability or resignation of one or more of these people could have a material adverse effect on the business and its ability to repay its loan. If our borrowers are unable to repay their loans, our business, financial condition and results of operations could be adversely affected.

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volatility in operating results, any of which may impair a borrower’s ability to repay a loan. In addition, the success of a small- and medium-sized business often depends on the management skills, talents and efforts of a small group of people, and the death, disability or resignation of one or more of these people could have a material adverse effect on the business and its ability to repay its loan. If our borrowers are unable to repay their loans, our business, financial condition and results of operations could be adversely affected.

Our concentration of large loans to a limited number of borrowers may increase our credit risk.

As of December 31, ~~2024,~~2025 our 10 largest borrowing relationships accounted for approximately 108.53% of our total gross loans held-for-investment. This high concentration of borrowers presents a risk to our lending operations. If any one of these borrowers becomes unable to repay its loan obligations because of economic or market conditions, or personal circumstances, such as divorce or death, our nonaccrual loans and our ACL could increase significantly, which could have a material adverse effect on our assets, business, financial condition and results of operations.

A lack of liquidity could impair our ability to fund operations and adversely impact our business, financial condition and results of operations.

Liquidity is essential to our business. We rely on our ability to generate deposits and effectively manage the repayment and maturity schedules of our loans and investment securities, respectively, to ensure that we have adequate liquidity to fund our operations.

Our most important source of funds is deposits. As of December 31, ~~2024~~2025, approximately $~~126~~168.84 million, or 2322.3%, of our total deposits were noninterest-bearing demand accounts. These deposits are subject to potentially dramatic fluctuations due to certain factors that may be outside of our control, such as a loss of confidence by customers in us or the banking sector generally, customer perceptions of our financial health and general reputation, any of which could result in significant outflows of deposits within short periods of time increasing our funding costs and reducing our net interest income and net income. If the balance of the Company’s deposits decreases relative to the Company’s overall banking operations, the Company may have to rely more heavily on wholesale or other sources of external funding, or may have to increase deposit rates to maintain deposit levels in the future. Any such increased reliance on wholesale funding, or increases in funding rates in general, could have a negative impact on the Company’s net interest income and, consequently, on its results of operations and financial condition.

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Our Strategic Programs generally require each Strategic Program platform to establish a reserve deposit account with the Bank, intended to protect us in the event a purchaser of loan receivables originated through our Strategic Programs cannot meet its contractual obligation to purchase. The reserve deposit account balances are required to be maintained at an amount between 50% and 100% of the total outstanding balance of loans held-for-sale by the Bank related to the Strategic Program. In the event that a loan purchaser defaults on its obligation under the Strategic Program agreements and the reserve deposit account balance is lower than the loans held-for-sale, the Bank may not be able to withdraw sufficient amount from the reserve deposit account to fulfill loan purchaser obligations and our liquidity may be adversely impacted.

We also may borrow funds from third-party lenders, such as other financial institutions. We currently utilize ~~four~~three secured lines of credit provided by the FHLB, ~~PPPLF~~ and the Federal Reserve and ~~two~~three unsecured lines of credit provided by Bankers Bank of the West, Pacific Coast Bankers’ Bank, and Zions Bank, that in the aggregate provided nearly immediate liquidity available of $230.4 million. Our access to funding sources in amounts adequate to finance or capitalize our activities, or on terms that are acceptable to us, could be impaired by factors that affect us directly or the financial services industry or economy in general, such as disruptions in the financial markets or negative views and expectations about the prospects for the financial services industry. Our access to funding sources could also be affected by one or more adverse regulatory actions against us.

Further, the Federal Housing Finance Agency, the regulator of FHLB and other federal home loan banks, launched a comprehensive review of the Federal Home Loan Bank System including the mission, membership eligibility requirements, and operational efficiencies of the federal home loan banks in 2022. Any change to or termination of our ability to borrow from the FHLB or correspondent banks could have an adverse effect on our financial condition and liquidity.

Any decline in available funding could adversely impact our ability to originate loans, invest in securities, meet our expenses or fulfill obligations such as repaying our borrowings or meeting deposit withdrawal demands, any of which could, in turn, have a material adverse effect on our business, financial condition and results of operations.

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We have a concentration of deposit accounts with our Strategic Program service providers that is a material source of our funding, and the loss of these deposits or default on letters of credit by these Strategic Program service providers could force us to fund our business through more expensive and less stable sources.

As of December 31, ~~2024~~2025, approximately $~~113~~130.6 8 million, or approximately 2017.83%, of our total deposits consisted of deposit accounts of our Strategic Program service providers. Generally, the terms of our Strategic Programs require each Strategic Program service provider or purchasing entity to establish a reserve deposit account with the Bank in an amount at least equal to between 50% and 100% the total outstanding balance of loans held-for-sale by the Bank related to the Strategic Program. This requirement is intended to protect the Bank in the event a purchaser of loan receivables originated through our Strategic Programs cannot meet its contractual obligation to purchase. Depending on the strength of the relationship between the Bank and our Strategic Program service providers, we may reduce the required amount of reserve deposits held and/or allow a portion of the requirement to be fulfilled by a letter of credit. In addition to the reserve deposit account, certain Strategic Program service providers have opened operating deposit accounts at the Bank. If a Strategic Program service provider defaults on its letter of credit or we experience additional unanticipated fluctuations in our Strategic Program deposit levels, we may be forced to rely more heavily on other, potentially more expensive and less stable funding sources, which could have an adverse effect on our business, financial condition and results of operations.

We may be subject to certain risks in connection with growing through mergers and acquisitions.

We could acquire other banking institutions, financial services companies, banking and servicing platforms, or branches of banks in the future. Acquisitions typically involve the payment of a premium over book and trading values and, therefore, may result in the dilution of our tangible book value per share and/or our earnings per share. Our ability to engage in future mergers and acquisitions depends on various factors, including: (1) our ability to identify suitable merger partners and acquisition opportunities; (2) our ability to finance and complete transactions on acceptable terms and at acceptable prices; and (3) our ability to receive the necessary regulatory and, when required, shareholder approvals. Furthermore, executing on successful mergers and acquisitions involves a number of risks and challenges, including, but not limited to, our ability to achieve planned synergies and to integrate the branches and operations we acquire, and the internal controls and regulatory functions into our current operations, as well as the diversion of management’s attention from existing operations, which may adversely affect our ability to successfully conduct our business and operations and negatively impact our financial results.

If we are unable to attract additional merchants and retain and grow our existing merchant relationships, our business, results of operations, financial condition, and future prospects could be materially and adversely affected.

Our continued success is dependent, in part, on our ability to expand our merchant base and to grow our commercial leasing and POS lending revenue. In addition, having a diversified mix of merchant relationships is important to mitigate risk associated with changing consumer spending behavior, economic conditions and other factors that may affect a particular type of merchant or industry. If we fail to retain any of our merchant relationships, if we do not acquire new merchant relationships, if we do not continually expand revenue and volume from the merchant relationships, or if we do not attract and retain a diverse mix of merchant relationships, our business, results of operations, financial condition, and future prospects could be materially and adversely affected.

WeNew ~~are~~lines ~~subject~~of tobusiness ~~interest~~or ~~rate~~new ~~risk~~products asand ~~fluctuations~~services ~~in interest rates~~ may ~~adversely~~subject ~~affect~~us ~~our~~to ~~earnings~~additional risks.

~~Most~~From time to time, we may implement or may acquire new lines of ~~our~~business ~~banking~~or ~~assets~~pilot programs or offer new products and ~~liabilities~~services ~~are~~within ~~monetary~~existing inlines ~~nature~~of business. There are substantial risks and ~~subject~~uncertainties toassociated ~~risk~~with ~~from~~these ~~changes~~efforts, particularly in ~~interest~~instances ~~rates~~where the markets are not fully developed. ~~Like~~To ~~most~~the ~~financial~~extent ~~institutions~~we enter into new lines of business, ~~our~~we ~~earnings~~will ~~are~~face ~~significantly~~numerous ~~dependent~~risks onand ~~our~~uncertainties, ~~net~~including ~~interest~~risks ~~income~~associated with the possibility that we have insufficient expertise to engage in such activities profitably or without incurring inappropriate amounts of risk, the ~~principal~~required ~~component~~investment of ~~our~~capital ~~earnings,~~and ~~which~~other isresources and the ~~difference~~loss ~~between~~of ~~interest~~investors ~~earned~~due byto usthe ~~from~~perception that we are no longer focusing on our ~~interest~~core ~~earning~~business. ~~assets,~~In ~~such~~developing asand ~~loans~~marketing new lines of business and ~~investment~~new ~~securities~~products and services, we may invest significant time and ~~interest~~resources. ~~paid~~We bymay usnot onachieve ~~our~~target ~~interest-bearing~~timetables ~~liabilities~~for the introduction and development of new lines of business and new products or services and price and profitability targets may not prove feasible. External factors, such as ~~deposits~~regulatory compliance obligations, competitive alternatives and ~~borrowings~~shifting market preferences, may also impact the successful implementation of a new line of business or a new product or service. WeFurthermore, ~~expect~~any ~~that~~new weline ~~will~~of ~~periodically~~business ~~experience~~or ~~“gaps”~~new inproduct ~~the~~or ~~interest~~service ~~rate~~could ~~sensitivities~~have a significant impact on the effectiveness of our ~~assets~~system of internal controls. Failure to successfully manage these risks in the development and ~~liabilities~~implementation of new lines of business or new products or services could have a material adverse effect on our business, ~~meaning~~results ~~that~~of ~~either~~operations and financial condition.

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~~our~~The ~~interest-bearing~~failure ~~liabilities will be more sensitive~~ to ~~changes~~maintain ineffective ~~market~~internal ~~interest~~control ~~rates~~over ~~than~~financial ~~our~~reporting ~~interest~~could ~~earning~~impair ~~assets,~~the orreliability ~~vice~~of ~~versa.~~our Infinancial ~~either case~~statements, ifwhich ~~market~~in ~~interest~~turn ~~rates~~could ~~should~~harm ~~move contrary to~~ our ~~position~~business, ~~this~~impair ~~gap~~investor ~~will~~confidence ~~negatively~~in ~~impact~~the ~~our~~accuracy ~~earnings.~~and ~~The~~completeness ~~impact~~of onour ~~earnings~~financial isreports ~~more~~and ~~adverse~~our ~~when~~access ~~the~~to ~~slope of~~ the ~~yield~~capital ~~curve~~markets ~~flattens;~~and ~~that~~cause ~~is,~~the ~~when~~price ~~short-term~~of ~~interest~~our ~~rates~~common ~~increase~~stock ~~more~~to ~~than~~decline ~~long-term~~and ~~interest~~subject ~~rates~~us orto ~~when~~regulatory ~~long-term interest rates decrease more than short-term interest rates~~penalties.

In March 2020, the Federal Reserve lowered the target range for the federal funds rate to a range from 0 to 0.25 percent in response to the Covid-19 pandemic. The federal funds rate remained in this range for all of 2021. After a period of low interest rates, the federal funds rate was increased rapidly to 4.25%-4.50% at the end of 2022, and to 5.25%-5.5% at the end of 2023. In 2024 the Federal Reserve lowered the target range in three increments to 4.25%-4.5% Further changes to prevailing interest rates could influence not only the interest we receive on loans and investments and the amount of interest we pay on deposits and borrowings, but such changes could also affect (i) our ability to originate loans at competitive rates and obtain deposits; (ii) the fair value of our financial assets and liabilities; (iii) the average duration of our loan portfolios and other interest-earning assets; and (iv) the mix of lending products we originate. A prolonged period of extremely volatile and unstable market conditions could increase our funding costs and negatively affect market risk mitigation strategies. Increased interest rates may decrease borrower demand for certain of our lending products, even as inflation places pressure on consumer spending, borrowing and saving habits as consumers evaluate their prospects for future income growth and employment opportunities in the current economic environment, and as borrowers face uncertainty about the impact of rising prices on their ability to repay a loan. A change in demand for our lending products and any steps we may take to mitigate such change could impact our credit quality and overall growth.

Any future failure to maintain effective internal control over financial reporting could impair the reliability of our financial statements, which in turn could harm our business, impair investor confidence in the accuracy and completeness of our financial reports and our access to the capital markets and cause the price of our common stock to decline and subject us to regulatory penalties.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for evaluating and reporting on that system of internal control. Our internal control over financial reporting consists of a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Weaknesses in our internal control over financial reporting have been discovered in the past and may be discovered in the future. If we fail to maintain effective internal control over financial reporting, we may not be able to report our financial results accurately and in a timely manner, in which case our business may be harmed, investors may lose confidence in the accuracy and completeness of our financial reports, we could be subject to regulatory penalties and the price of our common stock may decline.

The accuracy of our financial statements and related disclosures could be affected if the judgments, assumptions or estimates used in our critical accounting policies are inaccurate.

The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires us to make judgments, assumptions and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes. Our critical accounting policies, which are included in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, describe those significant accounting policies and methods used in the preparation of our consolidated financial statements that we consider critical because they require judgments, assumptions and estimates that materially affect our consolidated financial statements and related disclosures. As a result, if future events or regulatory views concerning such analysis differ significantly from the judgments, assumptions and estimates in our critical accounting policies, those events or assumptions could have a material impact on our consolidated financial statements and related disclosures, in each case resulting in our need to revise or restate prior period financial statements, cause damage to our reputation and the price of our common stock and adversely affect our business, financial condition and results of operations.

We implemented segment reporting into our financial results during the three months ended September 30, 2025 and this change to our financial reporting could be confusing to investors and may not have the desired effects.

Beginning with the quarter ended September 30, 2025, we implemented segment reporting following the completion of a technology initiative to capture segment-specific financial data and develop reports used by our CODM to review our financial performance and determine how to allocate resources. Our operations are now comprised of three reportable segments: traditional banking, banking as a service and treasury and administration.

We have provided disclosures about our new segment reporting structure elsewhere in this Report, but there is no guarantee that investors or the market will understand this change to our financial reporting. There is also no guarantee that this change to our financial reporting will have the desired effect. In addition, for periods prior to July 1, 2025, our operations were managed and reported as a single segment, and historical financial data by segment was not maintained. Accordingly, it is not practicable to present segment information for prior periods. Failure of investors or analysts to understand our revised segment reporting structure may negatively affect their ability to understand our financial performance and operating results which could adversely affect our stock price.

We could recognize losses on investment securities held in our securities portfolio, particularly if interest rates increase or economic and market conditions deteriorate.

We invest a portion of our total assets (53.79% as of December 31, ~~2024~~2025) in investment securities with the primary objectives of providing a source of liquidity, providing an appropriate return on funds invested, managing interest rate risk and meeting pledging requirements. Factors beyond our control can significantly and adversely influence the fair value of securities in our portfolio. Because of changing economic and market conditions affecting interest rates, the financial condition of issuers of the securities and the performance of the underlying collateral, we may recognize realized and/or unrealized losses in future periods, which could have a material adverse effect on our business, financial condition and results of operations.

We are subject to certain operational risks, including, but not limited to, customer, employee or third-party fraud.

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~~unrealized~~improper ~~losses~~or unauthorized activities on behalf of our customers or improper use of confidential information. It is not always possible to prevent employee errors and misconduct, and the precautions we take to prevent and detect this activity may not be effective in ~~future~~all ~~periods~~cases. Employee errors could also subject us to financial claims for negligence. In addition, we rely heavily upon information supplied by third parties, including the information contained in credit applications, property appraisals, title information and employment and income documentation, in deciding which ~~could~~loans ~~have~~we will originate, as well as the terms of those loans. If any of the information upon which we rely is misrepresented, either fraudulently or inadvertently, and the misrepresentation is not detected prior to loan funding, the value of the loan may be significantly lower than expected, or we may fund a ~~material~~loan ~~adverse~~that ~~effect~~we would not have funded or on terms that do not comply with our general underwriting standards. The sources of the misrepresentations are often difficult to locate, and it is often difficult to recover any of the resulting monetary losses we may suffer, which could adversely affect our business, financial condition and results of operations.

We are subject to certain operational risks, including, but not limited to, customer, employee or third-party fraud.

Employee errors and employee or customer misconduct could subject us to financial losses or regulatory sanctions and seriously harm our reputation. Misconduct by our employees could include hiding unauthorized activities from us, improper or unauthorized activities on behalf of our customers or improper use of confidential information. It is not always possible to prevent employee errors and misconduct, and the precautions we take to prevent and detect this activity may not be effective in all cases. Employee errors could also subject us to financial claims for negligence. In addition, we rely heavily upon information supplied by third parties, including the information contained in credit applications, property appraisals, title information and employment and income documentation, in deciding which loans we will originate, as well as the terms of those loans. If any of the information upon which we rely is misrepresented, either fraudulently or inadvertently, and the misrepresentation is not detected prior to loan funding, the value of the loan may be significantly lower than expected, or we may fund a loan that we would not have funded or on terms that do not comply with our general underwriting standards. The sources of the misrepresentations are often difficult to locate, and it is often difficult to recover any of the resulting monetary losses we may suffer, which could adversely affect our business, financial condition and results of operations.

We rely heavily on our executive management team and other key employees, and we could be adversely affected by the unexpected loss of their services.

We are led by an experienced core management team with substantial experience in the markets that we serve, and our operating strategy focuses on providing products and services through long-term relationship managers and ensuring that our largest clients have relationships with our senior management team. Accordingly, our success depends in large part on the performance of these key personnel, as well as on our ability to attract, motivate and retain highly qualified senior and middle management. If any of our executive officers, other key personnel or directors leaves us or our Bank, our financial condition and results of operations may suffer because of his or her skills, knowledge of our market, years of industry experience and the difficulty of promptly finding qualified personnel to replace him or her.

Negative public opinion regarding the Company or failure to maintain our reputation within the industries we serve and across our product lines could adversely affect our business and prevent us from growing our business.

If our reputation is negatively affected by the actions of our employees or otherwise, including because of a successful cyberattack against us or other unauthorized release or loss of customer information, we may be less successful in attracting new talent and customers or may lose existing customers, and our business, financial condition and results of operations could be adversely affected. Further, negative public opinion can expose us to litigation and regulatory action and delay and impede our efforts to implement our expansion strategy, which could further adversely affect our business, financial condition and results of operations.

In addition, negative publicity about us or our industry, including the transparency, fairness, user experience, quality, and reliability of our lending products or channels, including auto loans, construction loans, SBA loans, point-of-sale financing, or our Strategic Programs in general, effectiveness of our risk model, our ability to effectively manage and resolve complaints, our privacy and security practices, litigation, regulatory activity, funding sources, originating bank partners, service providers, or others in our industry, the experience of consumers and investors with our lending products, channels or services or point-of-sale lending platforms in general, or use of loan proceeds by consumers that have obtained loans facilitated through us or other point-of-sale lending platforms for illegal purposes, even if inaccurate, could adversely affect our reputation and the confidence in, and the use of, our services, which could harm our reputation and cause disruptions to our business. Any such reputational harm could further affect the behavior of consumers, including their willingness to obtain loans facilitated through us or to make payments on their loans. As a result, our business, results of operations, financial condition, and prospects would be materially and adversely affected.

We may be susceptible to deposit run-off risks, which could adversely affect our business and financial condition.

The Bank relies significantly upon deposits for liquidity and funding business operations. Generally, deposits are a relatively stable and cost-effective source of funding for banks due to many factors, including FDIC deposit insurance. Changes in deposit levels can be influenced substantially by many factors, including customer satisfaction and the interest rates offered to deposit customers. Those rates, in turn, generally reflect prevailing market conditions. During the first quarter of 2023, the media highlighted the risks of an extreme form of deposit run-off, sometimes referred to as a “run on the bank.” The failures of Silicon Valley Bank, Signature Bank, and First Republic Bank in 2023 resulted in significant disruption in the financial services industry and negative media attention, which has also adversely impacted the volatility and market prices of the securities of financial institutions and resulted in outflows of deposits for many other financial institutions. More moderate levels of run-off can adversely affect banks but are less dramatic and have been significantly less reported. The rapid rise in interest rates during 2022 and 2023 and the resulting industry-wide reduction in the fair value of securities portfolios, among other events, increased volatility and uncertainty with respect to the health of the U.S. banking system for a period of time. We believe these recent experiences has resulted in a continued heightened awareness

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disruption in the financial services industry and negative media attention, which has also adversely impacted the volatility and market prices of the securities of financial institutions and resulted in outflows of deposits for many other financial institutions. More moderate levels of run-off can adversely affect banks but are less dramatic and have been significantly less reported. The rapid rise in interest rates during 2022 and 2023 and the resulting industry-wide reduction in the fair value of securities portfolios, among other events, have increased volatility and uncertainty with respect to the health of the U.S. banking system. We believe this has resulted in a heightened awareness around liquidity, uninsured deposits, deposit composition, unrecognized investment losses, and capital~~. We believe that the increased level of public concern created by the current adverse business environment~~, ~~punctuated by media reports of potential or actual bank failures~~, ~~have~~having increased the risk of some level of deposit run-off for depository institutions ~~at the present time~~. That increased run-off risk applies both generally and in relation to deposits that exceed FDIC insurance coverage. ToWhile ~~manage this risk,~~ the Bank maintains cash reserves and access to other liquidity sources to accommodate normal and, to a degree, unusual withdrawal activity, and the Bank plans to respond promptly and accurately to any customer concerns that might arise, we cannot assure you that we will be able to manage a deposit run-off if it were to occur and could adversely affect our business and financial condition.

We may not be able to raise the additional capital needed, in absolute terms or on terms acceptable to us, to fund our growth strategy in the future if we continue to grow at our current pace.

We believe that we have sufficient capital to meet our capital needs for our immediate growth plans. However, we will continue to need capital to support our longer-term growth plans. If capital is not available on favorable terms when we need it, we will have to either issue common stock or other securities on less than desirable terms or reduce our rate of growth until market conditions become more favorable. Any such events could have a material adverse effect on our business, financial condition and results of operations.

The failure to meet applicable regulatory capital requirements could result in one or more of our regulators placing limitations or conditions on our activities, including our growth initiatives, or restricting the commencement of new activities, and could adversely affect customer and investor confidence, our costs of funds and FDIC insurance costs, our ability to make acquisitions, and our business, results of operations and financial condition.

~~Climate~~Acts ~~change~~of orwar, ~~government~~global ~~action~~conflict, ~~and~~terrorism, ~~societal~~geopolitical ~~responses~~and toother ~~climate~~external ~~change~~events could ~~adversely~~impact ~~affect~~ our ~~results~~ability ofto ~~operations~~conduct business.

~~Climate~~Financial ~~change~~institutions ~~can~~have ~~increase~~been, ~~the~~and ~~likelihood~~continue ofto ~~the~~be, ~~occurrence~~targets ~~and severity~~ of ~~natural~~terrorist ~~disasters~~threats ~~and~~aimed ~~can~~at ~~also~~compromising ~~result~~operating inand ~~longer-term~~communication ~~shifts~~systems inand ~~climate~~remain ~~patterns~~central ~~such~~targets asfor ~~extreme~~potential ~~heat,~~acts ~~sea~~of ~~level~~terrorism. ~~rise~~Such ~~and~~events ~~more~~could ~~frequent~~cause ~~and~~significant ~~prolonged~~damage, ~~drought.~~impact ~~Such~~the ~~significant~~stability ~~climate~~of ~~change~~our ~~effects~~facilities ~~may~~and ~~negatively~~result ~~impact~~in ~~our~~additional ~~geographic markets~~expenses, ~~disrupting~~impair the ~~operations~~ability of ~~the~~our ~~Company,~~borrowers ~~our~~to ~~customers~~repay ortheir ~~third~~loans, ~~parties~~reduce onthe ~~which~~value weof ~~rely.~~collateral ~~Damage~~securing torepayment ~~real~~of ~~estate~~our ~~collateral~~loans, and ~~declines~~result in ~~economic~~the ~~conditions~~loss inof ~~geographic~~revenue. ~~markets~~While inwe ~~which~~have ~~our~~established ~~customers~~and ~~operate~~regularly ~~may~~test ~~impact~~disaster ~~their~~recovery ~~ability~~procedures, tothe ~~repay~~occurrence ~~loans~~of orany ~~maintain~~such ~~deposits~~event ~~due~~could tohave ~~climate~~a ~~change~~material ~~effects,~~adverse ~~which~~effect ~~could~~on ~~increase~~ our ~~delinquency~~business, ~~rates~~operations and ~~average~~financial ~~credit loss~~condition.

~~Our~~Additionally, ~~offices~~global ~~may~~conflicts, beincluding ~~vulnerable to~~ the ~~adverse~~continuing ~~effects~~conflicts ofinvolving ~~climate~~Ukraine ~~change.~~and Wethe ~~have~~Russian aFederation ~~substantial~~and ~~physical~~those ~~presence~~ in the ~~Salt~~Middle ~~Lake~~East ~~City,~~involving ~~Utah,~~Israel ~~region~~and ~~that~~Iran, isand ~~prone~~now toincluding ~~events~~the ~~such~~United asStates ~~seismic~~among ~~activity,~~other ~~drought,~~nations) ~~water~~or ~~scarcity~~other ~~and~~similar ~~severe~~events, ~~weather.~~as ~~This~~well ~~region~~as ~~has~~government ~~experienced~~actions ~~and~~of ~~may~~other ~~continue~~restrictions toin ~~experience,~~connection ~~climate-related~~with such events, and attrade annegotiations ~~increasing~~between ~~rate~~the U.S. ~~Although~~and weother ~~maintain~~nations acould ~~disaster~~adversely ~~response~~impact ~~plan~~economic and ~~insurance,~~market ~~such~~conditions ~~events~~for ~~could~~the ~~disrupt~~Company ~~our~~and ~~business,~~its ~~the~~clients ~~business~~and ofcounterparties. ~~our~~In ~~customers~~addition, orglobal ~~third-party~~supply ~~suppliers,~~chain ~~and~~disruptions resulting from these conflicts may cause usprolonged toinflation, ~~experience~~adversely ~~losses~~impact consumer and ~~additional~~business ~~costs~~confidence, toand ~~maintain~~adversely ~~and~~affect ~~resume~~the ~~operations~~economy as well as our financial condition and results.

AsPolitical ~~the~~differences ~~effects~~within ~~of climate change continue to create a level of concern for~~ the ~~state~~federal ~~of the global environment~~government, ~~companies~~both ~~are~~at ~~facing~~the ~~increasing~~regulatory ~~scrutiny from customers, regulators, investors~~ and ~~other~~Congressional ~~stakeholders related to their environmental~~level, ~~social~~create ~~and~~significant ~~governance~~potential ~~(“ESG”)~~for ~~practices~~major and ~~disclosure.~~abrupt ~~New~~shifts ~~government regulations could result~~ in ~~more~~federal ~~stringent~~policy ~~forms~~regarding ofbank ~~ESG~~regulation, ~~oversight~~taxes, and ~~reporting~~the ~~and diligence and disclosure requirements. Increased ESG related compliance costs~~economy, inany ~~turn,~~of which could ~~result~~have insignificant ~~increases to our overall operational costs. Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations~~ and ~~standards,~~adverse ~~including~~impacts ~~with~~on ~~respect to~~ our ~~involvement~~business ~~in certain industries or projects associated with causing or exacerbating climate change, may negatively affect our reputation~~ and ~~commercial~~financial ~~relationships, which could adversely affect our business~~performance.

Certain of our operations and customers are dependent on the regular operation of the federal or state government or programs they administer For example, our SBA lending program depends on interaction with the SBA, an independent agency of the federal government. During a lapse in funding, such as has occurred during previous federal government “shutdowns”, the SBA may not be able to engage in such interaction. In addition, customers who depend directly or indirectly on providing goods and services to federal or state governments or their agencies may reduce their business with us or delay repayment of loans due to lost or delayed revenue from those relationships. If funding for these lending programs or federal spending generally is reduced as part of the appropriations process or by administrative decision, demand for our services may be reduced. Any of these developments could have a material adverse effect on our financial condition, results of operations or liquidity.

We expect to derive a percentage of our deposits, total assets and income from deposit accounts generated through our Fintech Banking and Payment Solutions relationships.

We expect to acquire deposit accounts through our Fintech Banking and Payment Solutions relationships and provide oversight over these relationships, which must meet our internal and regulatory requirements. We may exit relationships where such requirements are not met or be required by our regulators to exit such relationships. Also, our Fintech Banking and Payment Solutions customers could terminate their relationships with us for many reasons, including being able to ~~obtain better terms from another provider or dissatisfaction with the level or quality of our services. If a relationship were~~

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obtain better terms from another provider or dissatisfaction with the level or quality of our services. If a relationship were to be terminated, it could materially reduce our deposits, assets and income. We cannot assure you that we would be able to acquire the deposits initially, or successfully replace such relationships. If we cannot acquire or replace such relationships, we may be required to seek higher rate funding sources and interest expense might increase. We may also be required to sell securities or other assets to meet funding needs which would reduce revenues or potentially generate losses.

Our strategy of pursuing business with our Fintech Banking and Payment Solutions customers has been adopted by other institutions with which we compete.

Several online banking operations as well as the online banking programs of conventional banks have instituted Fintech Banking and Payment Solutions strategies similar to ours. As a consequence, we have encountered competition in this area and anticipate that we will continue to do so in the future. This competition may increase our costs, reduce our revenues or revenue growth or, because we are a relatively small banking operation without the name recognition of other, more established banking operations, make it difficult for us to compete effectively in obtaining these relationships.

Our agreements with Fintech Banking and Payment Solutions customers may expose us to credit risk.

We may enter into agreements with our Fintech Banking and Payment Solutions customers pursuant to which our Fintech Banking and Payment Solutions customers may market bank consumer checking and consumer or commercial line of credit (“LOC”) accounts using their brands and digital platforms, make underwriting determinations for the LOC accounts, cover any losses on the LOC accounts, provide cash collateral to the Bank to secure payment of such losses or be partial guarantors of losses on the LOC accounts. In the event the cash collateral amount is not adequately maintained or is insufficient to cover the losses on the LOC accounts and the Fintech Banking and Payment Solutions customer does not or cannot otherwise meet its ~~partial guaranty or other~~ obligations under its agreement with the Bank, the Bank may incur ~~losses~~financial ~~on the LOC accounts~~losses. Losses associated with the LOC accounts (or the portfolios of other third parties with whom we enter into comparable Fintech Banking and Payment Solutions relationships) in such circumstances could have a material adverse effect on our net income, results of operations and financial condition.

Our agreements with Fintech Banking and Payment Solutions customers may produce limited revenue and may expose us to liability for compliance violations by Fintech Banking and Payment Solutions customer.

We expect to enter into agreements with Fintech Banking and Payment Solutions customers pursuant to which we will provide certain banking services for such Fintech Banking and Payment Solutions customers, including serving as the issuing bank for credit or debit cards issued to their customers and establishing one or more settlement accounts for the purpose of settling customer transactions. The agreements have varying terms and may be terminated by the parties under certain circumstances. If our Fintech Banking and Payment Solutions customers are not successful in achieving customer acceptance of their programs or terminate the agreement before the end of its term, our revenue under the agreement may be limited or may cease altogether. In addition, our bank regulators may hold us responsible for the activities of our Fintech Banking and Payment Solutions customers with respect to the marketing or administration of their programs, which may result in increased compliance costs for us or potentially compliance violations as a result of Fintech Banking and Payment Solutions customer activities. In recent years, a significant number of banks that provide Fintech Banking and Payment Solutions have become subject to enforcement actions relating to their customers’ activities, indicating that banking regulators have made banks’ oversight over their Fintech Banking and Payment Solutions customers a supervisory priority and that there is an increased risk that we could similarly become subject to additional regulatory scrutiny or enforcement. Additionally, financial weaknesses at our Fintech Banking and Payment Solutions customers could cause us to record greater expenses or losses or suffer reputational harm.

Risks Related to Regulation

We are subject to regulation, which increases the cost and expense of regulatory compliance and therefore reduces our net income and may restrict our growth and ability to acquire other financial institutions.

As a bank holding company under federal law, we are subject to regulation under the Bank Holding Company Act of 1956, as amended, or the BHC Act, and the examination and reporting requirements of the Federal Reserve. In addition to supervising and examining us, the Federal Reserve, through its adoption of regulations implementing the BHC Act, places certain restrictions on the activities that are deemed permissible for bank holding companies to engage in. Changes in the number or scope of permissible activities could have an adverse effect on our ability to realize our strategic goals.

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including adequate capital and financial condition, permissible types and amounts of extensions of credit and investments, permissible non-banking activities and restrictions on dividend payments. The Bank undergoes periodic examinations by the FDIC and UDFI. Following such examinations, the Bank may be required, among other things, to change its asset valuations or the amounts of required loan loss allowances or to restrict its operations, as well as increase its capital levels, which would likely adversely affect our results of operations. Supervision, regulation, and examination of the Company and the Bank by the bank regulatory agencies are intended primarily for the protection of consumers, commercial customers, bank depositors and the Deposit Insurance Fund of the FDIC, rather than holders of our common stock. Particularly as a result of any changes in the regulations and regulatory agencies under the Dodd-Frank Act, we may be required to invest significant management attention and resources to evaluate and make any changes necessary to comply with applicable laws and regulations. This allocation of resources, as well as any failure to comply with applicable requirements, may negatively impact our results of operations and financial condition.

Legislative and regulatory actions taken now or in the future may increase our costs and impact our business, governance structure, financial condition or results of operations.

Federal and state regulatory agencies frequently adopt changes to their regulations or change the way existing regulations are applied, including the Dodd-Frank Act and the Regulatory Relief Act. These and other changes are more fully discussed above under “Supervision and Regulation.” Regulatory or legislative changes to laws applicable to the financial industry, if enacted or adopted, may impact the profitability of our business activities, require more oversight or change certain of our business practices, including the ability to offer new products, obtain financing, attract deposits, make loans and achieve satisfactory interest spreads and could expose us to additional costs, including increased compliance costs. These changes also may require us to invest significant management attention and resources to make any necessary changes to operations to comply and could have a material adverse effect on our business, financial condition and results of operations.

Due to Section 162(m) of the Internal Revenue Code (the “Code”), we may not be able to deduct all of the compensation of some executives, including executives of companies we may acquire in the future.

Section 162(m) of the Code generally limits to $1 million annual deductions for compensation paid to “covered employees” of any “publicly held corporation.” A “publicly held corporation” includes any company that issues securities required to be registered under Section 12 of the Securities Exchange Act of 1934 or companies required to file reports under Section 15(d) of the Exchange Act, determined as of the last day of the company’s taxable year. As a consequence, Section 162(m) of the Code limited the deductibility of compensation to our covered employees to $1 million beginning with the year ended December 31, 2021. The definition of “covered employees” generally includes anyone who served as the chief executive officer or chief financial officer at any time during the taxable year; the three highest compensated executive officers (other than the chief executive officer or the chief financial officer), determined under SEC rules; and any individual who was a covered employee, including of a “predecessor company,” at any point during a taxable year beginning on or after January 1, 2017, even after the employee terminates employment. We expect that in most if not all cases a publicly traded company that we might acquire in the future will be a “predecessor company.” Accordingly, we expect that the number of our covered employees will increase if FinWise Bancorp acquires one or more publicly held corporations in the future.

Notably, under the American Rescue Plan Act of 2021, or the ARPA, which was signed into law on March 11, 2021, for tax years beginning after December 31, 2026, the definition of “covered employees” will be expanded to include FinWise Bancorp’s next five highest paid employees (in addition, pursuant to proposed Treasury Regulations, to the chief executive officer, the chief financial officer and the three other highest compensated executive officers).

As a result of the foregoing, under present law, we may not be able to deduct all of the compensation paid in 2024 and future years if compensation paid to “covered employees” exceeds the thresholds established by Section 162(m) of the Code. Losing deductions under Section 162(m) of the Code could increase our income taxes and reduce our net income. A reduction in net income could negatively affect the price of our stock.

Because of the Dodd-Frank Act and related rulemaking, the Company is subject to more stringent capital requirements.

The Bank’s failure to maintain the minimum leverage ratio under the Community Bank Leverage Ratio framework under the Regulatory Relief Act could result in one or more of our regulators placing limitations or conditions on our activities, including our growth initiatives, or restricting the commencement of new activities, and could affect customer and investor confidence, our costs of funds and FDIC insurance costs, our ability to pay dividends on our common stock, our ability to make acquisitions, and our business, results of operations and financial condition. See “Supervision and Regulation—Capital Adequacy Guidelines.”

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Federal and state banking agencies periodically conduct examinations of our business, including our compliance with laws and regulations, and our failure to comply with any regulatory actions, if any, could adversely impact us.

As part of the bank regulatory process, the Federal Reserve, the FDIC and the UDFI, periodically conduct examinations of our business, including compliance with laws and regulations. If, based on an examination, the UDFI or a federal banking agency were to determine that the financial condition, capital resources, asset quality, earnings prospects, management, liquidity, asset sensitivity, risk management or other aspects of any of our operations have become unsatisfactory, or that the Company or its management were in violation of any law or regulation, it may take such remedial actions as it deems appropriate. If we become subject to such regulatory actions, our business, financial condition, results of operations and reputation would likely be adversely affected.

Financial institutions, such as the Bank, face risks of noncompliance and enforcement actions related to the Bank Secrecy Act and other anti-money laundering statutes and regulations.

The Bank Secrecy Act, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, or the USA PATRIOT Act, and other laws and regulations require financial institutions, among other duties, to institute and maintain an effective anti-money laundering program and file suspicious activity and currency transaction reports as appropriate. To administer the Bank Secrecy Act, FinCEN is authorized to impose significant civil money penalties for violations of those requirements and has recently engaged in coordinated enforcement efforts with the individual federal banking regulators, as well as the U.S. Department of Justice, Drug Enforcement Administration and the IRS. There is also increased scrutiny of compliance with the sanctions programs and rules administered and enforced by the Treasury Department’s Office of Foreign Assets Control.

Our compliance with the anti-money laundering laws is in part dependent on our ability to adequately screen and monitor our customers for their compliance with these laws. We have developed policies and procedures to screen and monitor these customers. To comply with regulations, guidelines and examination procedures in this area, we have dedicated significant resources to our anti-money laundering program. If our policies, procedures and systems are deemed deficient, we could be subject to liability, including fines and regulatory actions such as restrictions on our ability to pay dividends and the inability to obtain regulatory approvals to proceed with certain aspects of our business plans, including acquisitions and de novo branching.

Regulations relating to privacy, information security and data protection could increase our costs, affect or limit how we collect and use personal information and adversely affect our business opportunities.

We are subject to various privacy, information security and data protection laws, including requirements concerning security breach notification, and we could be negatively impacted by these laws. Various state and federal banking regulators and states have also enacted data security breach notification requirements with varying levels of individual, consumer, regulatory or law enforcement notification in certain circumstances in the event of a security breach. Moreover, legislators and regulators in the U.S. are increasingly adopting or revising privacy, information security and data protection laws that potentially could have a significant impact on our current and planned privacy, data protection and information security-related practices, our collection, use, sharing, retention and safeguarding of consumer or employee information, and some of our current or planned business activities. This could also increase our costs of compliance and business operations and could reduce income from certain business initiatives. This includes increased privacy-related enforcement activity at the federal level by the Federal Trade Commission, as well as at the state level. For example, in March 2022, Utah enacted the Utah Consumer Privacy Act. Also, the Federal Trade Commission recently issued a staff report on digital “dark patterns,” sophisticated design practices that can trick or manipulate consumers into buying products or services or giving up their private information, that, among other things, highlighted marketing and disclosure practices by some financial technology companies that the Federal Trade Commission claimed were deceptive because of their use of dark patterns. Based upon prior enforcement actions, staff reports, and statements by Federal Trade Commission officials, we believe this scrutiny of financial technology company marketing and disclosure practices will continue for the foreseeable future. Compliance with current or future privacy, data protection and information security laws (including those regarding security breach notification) affecting customer or employee data to which we are subject could result in higher compliance and technology costs and could restrict our ability to provide certain products and services, which could have a material adverse effect on our business, financial conditions or results of operations. Our failure to comply with privacy, data protection and information security laws could result in potentially significant regulatory or governmental investigations or actions, litigation, fines, sanctions and damage to our reputation, which could have a material adverse effect on our business, financial condition or results of operations.

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We are subject to numerous laws and regulations, designed to protect consumers, including the Community Reinvestment Act and fair lending laws, and failure to comply with these laws or regulations could lead to a wide variety of sanctions.

The Community Reinvestment Act, or CRA, directs all insured depository institutions to help meet the credit needs of the local communities in which they are located, including low- and moderate-income neighborhoods. Each institution is examined periodically by its primary federal regulator, which assesses the institution’s performance. The Equal Credit Opportunity Act, the Fair Housing Act and other fair lending laws and regulations impose nondiscriminatory lending requirements on financial institutions. The CFPB, the U.S. Department of Justice and other federal agencies are responsible for enforcing these laws and regulations. The CFPB was created under the Dodd-Frank Act to centralize responsibility for consumer financial protection with broad rulemaking authority to administer and carry out the purposes and objectives of federal consumer financial laws with respect to all financial institutions that offer financial products and services to consumers. The CFPB is also authorized to prescribe rules applicable to any covered person or service provider, identifying and prohibiting acts or practices that are “unfair, deceptive, or abusive” in any transaction with a consumer for a consumer financial product or service, or the offering of a consumer financial product, or service. The ongoing broad rulemaking powers of the CFPB have potential to have a significant impact on the operations of financial institutions offering consumer financial products or services.

A successful regulatory challenge to an institution’s performance under the CRA, fair lending or consumer lending laws and regulations could result in a wide variety of sanctions, including damages and civil money penalties, injunctive relief, restrictions on mergers and acquisitions activity, restrictions on expansion, and restrictions on entering new business lines. Private parties may also challenge an institution’s performance under fair lending laws in private class action litigation. Such actions could have a material adverse effect on our reputation, business, financial condition and results of operations.

We may be subject to liability for potential violations of predatory lending laws, which could adversely impact our results of operations, financial condition and business.

Various U.S. federal, state and local laws have been enacted that are designed to discourage “predatory” lending practices. The U.S. Home Ownership and Equity Protection Act of 1994, or HOEPA, prohibits inclusion of certain provisions in mortgages that have interest rates or origination costs in excess of prescribed levels and requires that borrowers be given certain disclosures prior to origination. The Military Lending Act limits the interest rate that can be charged to active-duty service members and their dependents. Some states have enacted, or may enact, similar laws or regulations, which in some cases impose restrictions and requirements greater than those in HOEPA. In addition, under the anti-predatory lending laws of some states, the origination of certain mortgages, including loans that are not classified as “high-cost” loans under applicable law, must satisfy a net tangible benefit test with respect to the related borrower. Such tests may be highly subjective and open to interpretation. As a result, a court may determine that a home mortgage, for example, does not meet the test even if the related originator reasonably believed that the test was satisfied. If any of our mortgages or other loans are found to have been originated in violation of predatory or abusive lending laws, we could incur losses, which could adversely impact our results of operations, financial condition and business.

Regulatory agencies and consumer advocacy groups have asserted claims that the practices of lenders and loan servicers result in a disparate impact on protected classes.

Anti-discrimination statutes, such as FHA and ECOA, prohibit creditors from discriminating against loan applicants and borrowers based on certain characteristics, such as race, religion and national origin. Various federal regulatory agencies and departments, including the DOJ and the CFPB, have taken the position that these laws apply not only to intentional discrimination, but also to facially neutral practices that have a disparate impact on a group that shares a characteristic that a creditor may not consider in making credit decisions protected classes (i.e., creditor or servicing practices that have a disproportionate negative affect on a protected class of individuals). Further, the CFPB has issued an update to its examination manual that contains a novel interpretation of its authority to prohibit unfair, deceptive, or abusive acts or practices that would authorize the agency to treat any instance of discrimination against a protected class as an unfair act or practice under the Dodd-Frank Act.

These regulatory agencies, as well as consumer advocacy groups and plaintiffs’ attorneys, have focused greater attention on “disparate impact” claims. The U.S. Supreme Court has confirmed that the “disparate impact” theory applies to cases brought under FHA, while emphasizing that a causal relationship must be shown between a specific policy of the defendant and a discriminatory result that is not justified by a legitimate objective of the defendant. Although it is still unclear whether the theory applies under ECOA, regulatory agencies and private plaintiffs may continue to apply it to both FHA and ECOA in the context of mortgage lending and servicing. To the extent that the “disparate impact” theory continues to

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apply, we are faced with significant administrative burdens in attempting to comply and potential liability for failures to comply.

In addition to reputational harm, violations of FHA and ECOA can result in actual damages, punitive damages, injunctive or equitable relief, attorneys’ fees and civil money penalties.

Increases in FDIC insurance premiums could adversely affect our earnings and results of operations.

The deposits of our Bank are insured by the FDIC up to legal limits and, accordingly, subject it to the payment of FDIC deposit insurance assessments as determined according to the calculation described in “Supervision and Regulation—Deposit Insurance.” In October 2022, the FDIC issued a final rule to increase the initial base deposit insurance assessment rate by two basis points for all insured depository institutions beginning in 2023. Any future special assessments, increases in assessment rates or required prepayments in FDIC insurance premiums could reduce our profitability or limit our ability to pursue certain business opportunities, which could have a material adverse effect on our business, financial condition and results of operations.

Risks Relating to Our Strategic Programs

The Bank and our Strategic Program service providers are subject to borrower protection laws and federal and state consumer protection laws and may be subject to public criticism by consumer advocacy groups.

The Bank and our Strategic Program service providers must comply with a variety of laws and regulations, including those applicable to consumer credit transactions, various aspects of which are untested as applied to a marketplace. Certain state laws generally regulate interest rates and other charges and require certain disclosures. In addition, other federal and state laws may apply to the origination and servicing of loans facilitated through our Strategic Programs. In particular, our Strategic Program service providers may be subject to laws, including but not limited to Section 5 of the Federal Trade Commission Act, the Truth-in-Lending Act, the Fair Credit Reporting Act, Fair Debt Collection Practices Act, Telephone Consumer Protection Act and other federal, state and municipal consumer protection laws and regulations that impose requirements related to, among other things, fair lending, loan disclosures and terms, credit discrimination, credit reporting, debt servicing and collection, communications and unfair or deceptive business practices. Such laws related to credit reporting, debt servicing and collection, communications and unfair or deceptive business practices may be of particular relevance while the Bank is the holder of a consumer credit transaction; the time period of such status as the holder may vary.

Our Strategic Program service providers may not always have been, may not always be, and may be subject to legal proceedings alleging that they are not in full compliance with these laws. Compliance with these laws is costly, time-consuming and limits operational flexibility. In addition, both we and our Strategic Program service providers may be criticized by third party consumer advocacy groups regarding compliance with fair lending or consumer lending laws and regulations, which may result in negative publicity of our Strategic Program service providers and the Bank. Non-compliance or alleged non-compliance could subject a Strategic Program service provider, and/or the Bank, to damages, revocation of required licenses, arbitration, lawsuits (including class action lawsuits), enforcement actions, increased regulatory scrutiny of the Bank’s internal controls and oversight of our third-party vendor risk management, penalties, termination of our relationship with a Strategic Program service provider, injunctions which require the cessation or curtailment of a Strategic Program or operation by the Bank, rescission rights held by investors in securities offerings and civil and criminal liability.

Any of these actions may harm the Bank and/or our Strategic Program service providers, and may result in, among other penalties, borrowers rescinding their loans, imposition of financial penalties against the Bank and/or our Strategic Program service providers, and/or injunctive relief against the Bank and/or our Strategic Program service providers requiring the Bank and/or our Strategic Program service providers to cease or curtail certain operations. If any of the Strategic Program service providers with which we do business suffers any of these consequences, we may be forced to create new relationships with Strategic Program service providers, which if not formed, could have an adverse effect on our growth strategy, business, results of operation and financial condition. Additionally, the Bank may suffer economic penalties and consequences as a result of a financial penalty or damages or injunctive relief. If the Bank and/or any of the Strategic Program service providers with which we do business suffers any of these consequences, the Bank may not be able to recover economic damages and/or costs the Bank incurs from the Strategic Program service provider, whether under an indemnification right or other action against the service provider. The foregoing could adversely affect our growth, business prospects, financial condition and results of operations.32

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~~The~~regulations, ~~Bank~~which ~~and our Strategic Program service providers~~ may beresult ~~subject~~in tonegative ~~consumer~~publicity ~~arbitration or litigation regardless~~ of ~~whether~~our ~~the~~Strategic ~~claims~~Program ~~have~~service ~~merit.~~providers ~~Given~~and the ~~wide~~Bank. ~~variety~~Non-compliance ofor ~~state~~alleged ~~and~~non-compliance ~~federal~~could ~~consumer~~subject ~~financial protection laws, consumer claims are~~ a ~~regular~~Strategic ~~and~~Program ~~ordinary~~service ~~component~~provider, ~~of any consumer lending~~ and/or ~~servicing~~the ~~business. The~~ Bank, ~~and~~to ~~our~~damages, ~~Strategic~~revocation ~~Program~~of ~~service~~required ~~providers~~licenses, ~~may~~arbitration, ~~face~~lawsuits ~~consumer claims~~ (including class action ~~claims~~lawsuits), ~~under~~enforcement ~~state~~actions, orincreased ~~federal~~regulatory ~~laws~~scrutiny ~~governing~~of ~~fair~~the ~~debt~~Bank’s ~~collection,~~internal ~~fair~~controls ~~credit~~and ~~reporting,~~oversight ~~electronic~~of ~~funds~~our ~~transfers,~~third-party ~~truth~~vendor inrisk ~~lending~~management, ~~unfair or deceptive acts or practices~~penalties, ~~telecommunications,~~termination orof ~~other~~our ~~consumer~~relationship ~~protection~~with ~~laws.~~a ~~The Bank or our~~ Strategic Program service ~~providers may be required to defend against such consumer claims in court or through arbitration. The litigation risks attendant in defending against these claims~~provider, injunctions which werequire ~~intend to do vigorously, may include increased legal fees, related costs and expenses, and reputational harm. Because litigation risk is generally unpredictable, we cannot estimate~~ the ~~amount~~cessation ofor ~~damages~~curtailment ~~(if any) that might be awarded in any case, foresee other forms~~ of ~~relief~~ a ~~competent~~Strategic ~~tribunal~~Program ~~may impose,~~ or ~~otherwise~~operation ~~predict~~by the ~~impact~~Bank, ofrescission ~~consumer~~rights ~~claims~~held onby ~~the~~investors ~~Bank’s~~in orsecurities ~~any~~offerings ~~Strategic~~and ~~Program~~civil ~~service~~and ~~provider’s~~criminal ~~operations or revenue~~liability.

The Bank and our Strategic Program service providers may face consumer claims (including class action claims) under state or federal laws governing fair debt collection, fair credit reporting, electronic funds transfers, truth in lending, unfair or deceptive acts or practices, telecommunications, or other consumer protection laws. The Bank or our Strategic Program service providers may be required to defend against such consumer claims in court or through arbitration. The litigation risks attendant in defending against these claims, which we intend to do vigorously, may include increased legal fees, related costs and expenses, and reputational harm. Because litigation risk is generally unpredictable, we cannot estimate the amount of damages (if any) that might be awarded in any case, foresee other forms of relief a competent tribunal may impose, or otherwise predict the impact of consumer claims on the Bank’s or any Strategic Program service provider’s operations or revenue.

If we are unable to maintain our relationships with our Strategic Program service providers, our business will suffer.

A significant portion of our loan origination is conducted through our Strategic Programs. Approximately $5476.1 million, or 5550.94% of our total revenues for the year ended December 31, ~~2024~~2025, were generated through our Strategic Programs. Our agreements with service providers to the Strategic Programs are non-exclusive and do not prohibit the service providers from working with our competitors upon payment of a fee or from offering competing services. In addition, the Strategic Program service providers may not perform as expected under our agreements including potentially being unable to accommodate our projected growth in loan volume and revenue. Although we have taken steps to secure relationships with our Strategic Program service providers and key third-party relationships, we could in the future have disagreements or disputes with our Strategic Program service providers, which could negatively impact or threaten our relationship. Furthermore, our agreements with third parties could come under scrutiny by our regulators, and our regulators could raise an issue with, or object to, any term or provision in such an agreement or any action taken by such third party vis-à-vis the Bank’s operations or customers, resulting in a material adverse effect to us including, but not limited to, the imposition of fines and/or penalties and the material restructuring or termination of such agreement.

Furthermore, our agreements with third parties could come under scrutiny by our regulators, and our regulators could raise an issue with, or object to, any term or provision in such an agreement or any action taken by such third party vis-à-vis the Bank’s operations or customers, resulting in a material adverse effect to us including, but not limited to, the imposition of fines and/or penalties and the material restructuring or termination of such agreement.

Inadequate oversight of our relationships with our Strategic Program service providers and POS merchants could result in regulatory actions against the Bank, which could adversely affect our business, financial condition and result of operations.

The FDIC has issued guidance outlining the expectations for third-party service provider oversight and monitoring by financial institutions. The federal banking agencies, including the FDIC, have also issued enforcement actions against financial institutions for failure in oversight of third-party providers and violations of federal banking law by such providers when performing services for financial institutions. Our failure to adequately oversee the actions of our third-party service providers could result in regulatory actions against the Bank. Furthermore, our regulators could require us to terminate certain relationships with our Strategic Program service providers or POS merchants or restrict our ability to form new relationships with other Strategic Program service providers or POS merchants, either of which could result in a decrease in our loan originations, which in turn could adversely affect our growth, business prospects, financial condition and results of operations.

The regulatory framework for Strategic Programs is evolving and uncertain as federal and state agencies consider new laws to regulate online marketplaces such as ours, as well as the withdrawal of certain proposed rules. New laws and regulations, including taxes on services provided through Strategic Programs, as well as continued uncertainty regarding potential new laws or regulations, or the withdrawal or rescission of proposed or final rules, may negatively affect our business.33

Recognizing the growth in online marketplaces, in July 2015 the Treasury issued a request for information to study the marketplace lending industry, which led to the release of a Treasury white paper on May 10, 2016, on the online marketplace lending industry. The white paper included several recommendations to the federal government and private sector participants in order to encourage safe growth and access to credit. In April 2022, the CFPB announced that it intends to examine nonbank financial companies, which may include some of our Strategic Program service providers, that pose risks to consumers and in June 2022, the Deputy Director of the CFPB indicated that relationships between banks and nonbank lenders will be an area of increased regulatory focus for the agency in the near future. Subsequently, in November

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~~2022,~~form ~~the~~new ~~Treasury~~relationships ~~Department issued a report encouraging the CFPB to increase its supervisory activity~~ with ~~respect~~other toStrategic ~~larger~~Program ~~nonbank~~service ~~lenders.~~providers ~~State~~or ~~regulators~~POS ~~have also increased the level of regulatory scrutiny on financial technology companies. However~~merchants, ~~following~~either ~~the inauguration~~ of ~~the~~which ~~new~~could ~~President~~result in ~~January~~a ~~2025,~~decrease ~~new~~in ~~acting~~our ~~federal~~loan ~~financial~~originations, ~~regulators~~which ~~have~~in ~~signaled~~turn ~~that~~could ~~they~~adversely ~~will~~affect ~~take~~our agrowth, ~~different~~business ~~approach~~prospects, ~~to regulation of the~~ financial ~~marketplace~~condition and financial technology companies compared to the prior administration. We cannot predict whether any legislation or proposed rulemaking will actually be introduced or how any legislation or rulemaking will impact our business and results of operations ~~of marketplace lenders going forward~~.

The regulatory framework for our Strategic Programs is evolving and uncertain. It is possible that new laws and regulations will be adopted in the United States and internationally, or existing laws and regulations may be amended, removed or interpreted in new ways, that would affect the operation of our Strategic Program service providers and the way in which they interact with borrowers and investors. Recognizing the growth in online marketplaces, in July 2015 the Treasury issued a request for information to study the marketplace lending industry, which led to the release of a Treasury white paper on May 10, 2016, on the online marketplace lending industry. The white paper included several recommendations to the federal government and private sector participants in order to encourage safe growth and access to credit. In April 2022, the CFPB announced that it intends to examine nonbank financial companies, which may include some of our Strategic Program service providers, that pose risks to consumers and in June 2022, the Deputy Director of the CFPB indicated that relationships between banks and nonbank lenders will be an area of increased regulatory focus for the agency in the near future. Subsequently, in November 2022, the Treasury Department issued a report encouraging the CFPB to increase its supervisory activity with respect to larger nonbank lenders. State regulators have also increased the level of regulatory scrutiny on financial technology companies. However, following the inauguration of the new President in January 2025, new acting federal financial regulators have signaled that they will take a different approach to regulation of the financial marketplace and financial technology companies compared to the prior administration. We cannot predict whether any legislation or proposed rulemaking will actually be introduced or how any legislation or rulemaking will impact our business and results of operations of marketplace lenders going forward.

If the loans originated through a marketplace were found to violate a state’s usury laws and/or the Strategic Program’s service providers were determined to be the “true lender” of loans originated on their marketplaces we and our Strategic Program service providers may have to alter our business models and, consequently, our reputation, financial condition and results of operation could be harmed.

The interest rates that are charged to borrowers and that form the basis of payments to investors through marketplaces are enabled by legal principles including (i) the application of federal law to enable an issuing bank that originates the loan to export the interest rates of the jurisdiction where it is located, (ii) the application of common law “choice of law” principles based upon factors such as the loan document’s terms and where the loan transaction is completed to provide uniform rates to borrowers, or (iii) the application of principles that allow the transferee of a loan to continue to collect interest as provided in the loan document. Certain states have no statutory interest rate limitations on personal loans, while other jurisdictions have a maximum rate. In some jurisdictions, the maximum rate is less than the current maximum rate offered by the Bank through certain Strategic Programs. If the laws of such jurisdictions were found to apply to the loans originated by the Bank through a marketplace, those loans could be in violation of such laws or it could impact the ability to sell such loans to investors. ~~Approximately $24.6, or 25.5% of our total revenues for the year ended December 31, 2024, were generated from Strategic Programs with annual interest rates above 36%.~~

There has been (and will likely continue to be) litigation challenging lending arrangements where a bank or other third-party has made a loan and then sells and assigns it to an entity that is engaged in assisting with the origination and servicing of a loan. If a borrower or regulator were to successfully bring claims against a Strategic Program service provider for violations of state consumer lending laws, including usury and licensing requirements, the Strategic Program service provider could be subject to fines and penalties, including the voiding of loans and repayment of principal and interest to borrowers and investors. Our Strategic Program service providers might decide to, among other actions, limit the maximum interest rate and terms on certain loans facilitated through the Strategic Program service provider’s platform, might decide to not offer certain products, might decide to not offer products in certain geographic locations, and might decide to originate loans under the provider’s own state-specific licenses, to obtain a bank charter, or originate loan products in partnership with another financial institution. These actions may substantially reduce a Strategic Program service provider’s operating efficiency and/or attractiveness to investors, possibly resulting in a decline in operating results for the service provider, which could in turn adversely affect our business, financial condition and results of operations. Furthermore, if the Bank were not deemed to be the “true lender,” then the Bank and our Strategic Program service provider could be subject to claims by borrowers, as well as enforcement actions by regulators.

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Furthermore, if a borrower or regulator were to successfully bring claims against a Strategic Program service provider and/or the Bank for violations of state consumer lending laws the Strategic Program service provider and/or the Bank could be subjected to damages, revocation of required licenses, individual and class action lawsuits, enforcement actions, penalties, injunctions which require the cessation or curtailment of a Strategic Program or operation by the Bank, rescission rights held by investors in securities offerings and civil and criminal liability. These actions could possibly result in a decline in operating results for the Strategic Partner and/or the Bank, which could in turn adversely affect our business, financial condition and results of operations.

On May 25, 2020, the OCC issued a final rule reaffirming the enforceability of the interest rate terms of national banks’ loans following their sale, assignment, or transfer. The FDIC followed suit with a final rule on June 25, 2020, that similarly reaffirmed the enforceability of the interest rate terms of loans made by state-chartered banks and insured branches of foreign banks (collectively, state banks) following the sale, assignment, or transfer of a loan. The rules also provide that whether interest on a loan is permissible is determined at the time the loan is made, and is not affected by a change in state law, a change in the relevant commercial paper rate, or the sale, assignment, or other transfer of the loan. These rules have been challenged by state attorneys general. On May 11, 2021, the U.S. Senate voted 52-47 to repeal the “true lender” rule adopted by the OCC. On June 24, 2021, the U.S. Senate resolution was passed by the U.S. House of Representatives by a vote of 218 to 208. On June 30, 2021, President Biden signed a joint resolution to revoke the OCC’s true lender rule. Repeal of the OCC rule is expected to create uncertainty regarding whether state or federal laws apply to the Bank’s loans originated in the marketplace with the assistance of our Strategic Program service providers.

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Several states have also adopted legislation that impacts our Strategic Programs. In 2021, Illinois and Maine enacted laws that regulate any person who holds, acquires, or maintains, directly or indirectly, the predominant economic interest in a loan originated by an otherwise-exempt entity like a bank. Effective January 1, 2022, Hawaii instituted a new licensing requirement for “installment lenders”, which is defined to capture loans offered under a bank partnership model (i.e., it applies to a person “who arranges a consumer loan for a third party, or who acts as an agent for a third party, regardless of whether the third party is exempt from licensure.” H.B. 1192 (2021)). These laws also apply to any person or entity who markets, brokers, arranges, or facilitates a loan and holds the right, requirement, or first right of refusal to purchase loans, receivables, or interests in the loans. These licensing schemes, which may apply to our Strategic Programs, also impose interest-rate caps that are lower than the interest rates permitted under Utah law. These and other matters could potentially impact a Strategic Program’s business, including the maximum interest rates and fees that can be charged and application of certain consumer protection statutes. In addition, these matters could subject us to increased litigation risk, which could have a material and adverse impact on our reputation and business. We continue to assess the impact of these final rules on our business and our Strategic Programs.

Fraudulent activity associated with a Strategic Program service provider could negatively impact operating results, brand and reputation and cause the use of a Strategic Program’s loan products and services to decrease and its fraud losses to increase.

Our Strategic Program service providers are subject to the risk of fraudulent activity associated with the handling of borrower and investor information by its marketplace, issuing banks, borrowers, investors and third parties. A company’s resources, technologies and fraud prevention tools may be insufficient to accurately detect and prevent fraud. High profile fraudulent activity or significant increases in fraudulent activity could lead to regulatory intervention, negatively impact a company’s operating results, brand and reputation and lead it to take steps to reduce fraud risk, which could increase its costs and consequently, adversely affect our business, financial condition and results of operations.

We depend on the accuracy and completeness of information provided by our Fintech Banking and Payment Solutions service providers for our lending, payments and BIN programs.

We rely on the effective and timely functioning of the operational and financial reporting of our Fintech Banking and Payment Solutions service providers for financial, accounting, transaction execution, data processing and other operational information to process, record, monitor and report a large number of transactions on a continuous basis, and to do so accurately, quickly and securely. Any errors or failures in such reporting could result in the erroneous execution of transactions, financial losses, regulatory scrutiny, increased costs or harm to our reputation.

Differences between the accounting policies of our Fintech Banking and Payment Solutions service providers and the Company’s accounting policies could result in us not recognizing amounts in our financial statements in accordance with U.S. GAAP or other errors in our financial statements. Although we have implemented controls to enhance our risk assessment, control and evaluation procedures over third-party reports to ensure compliance with the Company’s accounting policies, any control, design or implementation deficiencies with respect to third-party reports could adversely impact our results of operations or financial condition, or result in our failure to meet our periodic reporting obligations.

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accounting policies, any control, design or implementation deficiencies with respect to third-party reports could adversely impact our results of operations or financial condition, or result in our failure to meet our periodic reporting obligations.

In deciding whether to extend credit or enter into other transactions with borrowers and counterparties in our Strategic Programs, we may rely on information furnished to us by our Strategic Program service providers, including credit profile, financial statements and other financial information, as well as with respect to the accuracy and completeness of that information. Any review and analyses of such information in connection with our lending decisions may not detect or highlight all relevant facts or risks that are necessary in evaluating such credit or other transactions. In some cases, we may have little or no control over the data collection or due diligence processes of our Strategic Program services providers, and any shortcomings in such processes could be reflected in the lending decisions that we make.

The quality of our loan portfolios, our financial condition, results of operations, financial reporting and reputation could be materially adversely affected if we receive and rely on materially misleading, false, inaccurate, incomplete, outdated or fraudulent information. If we receive any such information and our fraud detection processes do not flag the related loan applications, repayments on the corresponding loans may be lower, in some cases significantly lower, than expected, leading to losses for us or the Strategic Program service provider. Moreover, our reliance on any such information could result in suboptimally and inefficiently priced loans or incorrect approvals or denials of loans, which in turn could adversely affect our reputation and ability to attract new borrowers, counterparties or Strategic Program service providers.

Our credit enhancement arrangements with certain of our Strategic Program service providers exposes us to counterparty risk which may result in increased credit or fraud risk or losses to us.

We have entered into agreements with certain of our 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. Reimbursement or indemnification for incurred losses is provided for through a deposit reserve account that is replenished periodically by the respective service provider. In the event that cash flow from the loans covered by the agreement is insufficient to fund the deposit reserve account in an amount required to support the service provider’s indemnification or reimbursement obligations due to deterioration of the performance of such loans or otherwise, and the service provider is unable or unwilling to fund any shortfalls or otherwise breaches its obligations under the agreement, we will generally retain all income related to such loans (which may be reduced) and assume responsibility for primarily servicing the loans. Consequently, we would retain all the contractual interest but would be exposed to increased credit or fraud risk or losses on such loans as a result of this counterparty risk.

Risks Related to Technology

System failure or cybersecurity breaches of our network security could subject us to increased operating costs as well as litigation and other potential losses.

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Our proprietary technologies and analytic models have not yet been exposed to longer term down-cycle economic conditions. If these do not, or are perceived not to, accurately gather and interpret performance data for loans and identify attractive risk-adjusted market sectors, our performance may be worse than anticipated.

The technologies created by and relied upon by us may not function properly, or at all, which may have a material impact on our operations and financial conditions. The performance of loans originated by us is dependent on the effectiveness of our credit underwriting systems used to evaluate borrowers’ credit profiles and likelihood of default. While our proprietary technologies and analytic models are continually adjusted to account for changes in various macroeconomic conditions, the bulk of the data gathered and the development of our enterprise data warehouse have largely occurred during a period of sustained economic growth or during the COVID-19 pandemic when extraordinary government stimulus impacted the economy. Our proprietary technologies have not been exposed to other adverse economic cycles. There is no assurance that our proprietary technologies can accurately predict loan performance during periods of adverse economic conditions. If our proprietary technologies are unable to accurately reflect the credit risk of loans under such economic conditions, we may experience greater than expected losses on such loans.

We may not be able to protect our intellectual property rights, including our proprietary technologies and analytic models, and may become involved in lawsuits to protect or enforce our proprietary rights and information, which could be expensive, time consuming and unsuccessful.

We rely on a combination of copyright, trademark, trade secret laws and confidentiality provisions to establish and protect our intellectual property rights, including our proprietary technologies and our analytic models. If we fail to successfully maintain, protect and enforce our intellectual property rights, our competitive position could suffer. Similarly, if we were to infringe on the intellectual property rights of others, our competitive position could suffer. Third parties may challenge, invalidate, circumvent, infringe or misappropriate our intellectual property, or such intellectual property may not be sufficient to permit us to take advantage of current market trends or otherwise to provide competitive advantages, which could result in costly redesign efforts, discontinuance of certain product or service offerings or other competitive harm. We may also be required to spend significant resources to monitor and police our intellectual property rights. Others, including our competitors, may independently develop similar analytic model technology, duplicate our products or services or design around our intellectual property, and in such cases we may not be able to assert our intellectual property rights against such parties. Further, our contractual arrangements may not effectively prevent disclosure of our confidential information or provide an adequate remedy in the event of unauthorized disclosure of our confidential or proprietary information. We may have to litigate to enforce or determine the scope and enforceability of our intellectual property rights, trade secrets and know-how, which could be time-consuming and expensive, could cause a diversion of resources and may not prove successful. The loss of intellectual property protection or the inability to obtain rights with respect to third party intellectual property could harm our business and ability to compete. In addition, because of the rapid pace of technological change in our industry, including the use of AI, aspects of our business and our products and services rely on technologies developed or licensed by third parties, and we may not be able to obtain or continue to obtain licenses and technologies from these third parties on reasonable terms or at all.

We may not have the resources to keep pace with rapid technological changes in the industry or implement new technology effectively.

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customers by using technology to provide products and services that will satisfy customer demands for convenience as well as to create additional efficiencies in our operations as we continue to grow and expand our products and service offerings. We may experience operational challenges as we implement these new technology enhancements or products, which could impair our ability to realize the anticipated benefits from such new technology or require us to incur significant costs to remedy any such challenges in a timely manner.

Many of our larger competitors have substantially greater resources to invest in technological improvements. Third parties upon which we rely for our technology needs may not be able to develop, on a cost-effective basis, systems that will enable us to keep pace with such developments. As a result, our larger competitors may be able to offer additional or superior products compared to those that we will be able to provide, which would put us at a competitive disadvantage. We may lose customers seeking new technology-driven products and services to the extent we are unable to provide such products and services. The ability to keep pace with technological change is important and the failure to do so could adversely affect our business, financial condition and results of operations. The use of AI in the banking industry is developing and growing. Customer demand may cause us and others to offer products or services incorporating AI. As with many developing technologies, artificial intelligence presents risks and challenges that could affect its further development, adoption, and use, and therefore our business. Our future success will depend, in part, upon our ability to invest in and use appropriate technology, which may include AI. To effectively make such investments, we may need to expend significant financial, human, and other resources. However, we may not be able to implement AI in an effective or timely way, thus adversely impacting our operations. This may also adversely impact our ability to compete with financial institutions which have greater resources to invest in such technological improvements. Ultimately, any AI we develop or use may be flawed. If our use of AI, or its use by third parties with which we do business or otherwise interact, is deficient, biased, or inaccurate, or compromises customer privacy or implicates other ethics issues, we could be subject to competitive harm, potential legal liability, and brand or reputational harm.

The development and use of artificial intelligence present risks and challenges that may adversely impact our business.

We selectively employ AI through productivity tools, third-party solutions, and internal systems. We use generative AI for certain tasks like document drafting and data analysis, with an implementation of strict controls to protect customer data. Third-party AI assists us in cybersecurity, fraud detection, and code review, while our own agents handle compliance, policy analysis, and workflow optimization. A disciplined AI adoption approach remains the most effective strategy for us. However, the advances in generative AI are opening new opportunities for efficiency and automation. We are actively exploring opportunities to broaden the deployment of these capabilities across our Company to drive efficiency and long term value, with a disciplined focus on safeguarding sensitive data through secure and controlled implementation. However, the continued development and use of AI presents a number of risks and challenges to our business.

The legal and regulatory environment relating to AI is uncertain and rapidly evolving and includes regulation targeted specifically at AI as well as provisions in intellectual property, privacy, consumer protection, employment and other laws applicable to the use of AI. These evolving laws and regulations could require changes in our implementation of AI technology and increase our compliance costs and the risk of non-compliance, including in relation to data privacy and security laws, which mandate the protection of consumer financial information.

AI models, particularly generative AI models, may produce output or take action that is incorrect, that results in the release of private, confidential or proprietary information, that reflects biases included in the data on which they are trained, that produces output that is, or is perceived to be, discriminatory or unfair, that infringes on the intellectual property rights of others, or that is otherwise harmful.

While we have policies prohibiting our employees from using non-approved generative AI applications or websites on the Company or the Bank’s network, there can be no assurances that our employees will adhere to these policies or that such policies will be effective in mitigating the risks associated with using AI technology. Furthermore, although we have not authorized the use of any AI tools with personally identifiable or nonpublic information, employees may intentionally or inadvertently violate our policy by using personally identifiable or nonpublic information, including sensitive client information, with AI technologies.

Since personally identifiable or nonpublic information may be used with such technologies, these technologies are capable of generating output that improperly discloses such personally identifiable or nonpublic information. The use of personally identifiable or nonpublic information could result in a violation of certain laws, including data privacy laws and the data privacy and security laws, exposing us to legal liability or regulatory penalties. Furthermore, we may rely on AI models developed by third parties, and, to that extent, would be dependent in part on the manner in which those third parties develop and train their models, including risks arising from the inclusion of any unauthorized material in the training data

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for their models, and the effectiveness of the steps these third parties have taken to limit the risks associated with the output of their models, matters over which we may have limited visibility. Any of these risks could expose us to liability or adverse legal or regulatory consequences and harm our reputation and the public perception of our business or the effectiveness of our security measures, which could have an adverse effect on our business, financial condition or results of operations.

Our operations could be interrupted if our third-party service providers or Strategic Program service providers experience operational or other systems difficulties or terminate their services.

Risks Related to Regulatory, Legal and Compliance

We are subject to substantial regulation, which increases the cost and expense of regulatory compliance and therefore reduces our net income and may negatively impact our opportunity to grow our business.

As a Utah state-chartered bank that is not a member of the Federal Reserve System, the Bank is separately subject to regulation by both the FDIC and the UDFI. The FDIC and UDFI regulate numerous aspects of the Bank’s operations, including adequate capital and financial condition, permissible types and amounts of extensions of credit and investments, permissible non-banking activities and restrictions on dividend payments. The Bank undergoes periodic examinations by the FDIC and UDFI. Following such examinations, the Bank may be required, among other things, to change its asset valuations or the amounts of required loan loss allowances or to restrict its operations, as well as increase its capital levels, which would likely adversely affect our results of operations. Supervision, regulation, and examination of the Company and the Bank by the bank regulatory agencies are intended primarily for the protection of consumers, commercial customers, bank depositors and the Deposit Insurance Fund of the FDIC, rather than holders of our common stock. Particularly as a result of any changes in the regulations and regulatory agencies under the Dodd-Frank Act, we may be required to invest significant management attention and resources to evaluate and make any changes necessary to comply with applicable laws and regulations. The allocation of our resources to address regulatory compliance, as well as any failure to comply with applicable requirements, may negatively impact our results of operations and financial condition.

Legislative and regulatory actions taken now or in the future, including deregulation, may increase our competition and costs and impact our business, governance structure, financial condition or results of operations.

Federal and state regulatory agencies frequently adopt changes to their regulations or change the way existing regulations are applied, which are more fully discussed above in Item I. Business - “Supervision and Regulation.” Regulatory or legislative changes to laws applicable to the financial industry, if enacted or adopted, may impact the profitability of our business activities, require more oversight or change certain of our business practices, including the ability to offer new products, obtain financing, attract deposits, make loans and achieve satisfactory interest spreads and could expose us to additional costs, including increased compliance costs. In addition, recent changes in the U.S. political landscape have increased the risk of deregulation of certain aspects of the financial services and banking sector, including a more relaxed enforcement policy with respect to digital assets and FinTech companies. Our profitability depends, in part, upon our

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~~Risks~~ability ~~Related~~to successfully compete with these other financial service providers and to ~~Potential~~maintain ~~Strategic~~and ~~Transactions~~increase market share and less regulation lowers the barrier for entry in the financial services and banking sectors, increasing our competition.

WeThese ~~may~~legislative ~~pursue~~and ~~strategic~~regulatory ~~acquisitions~~changes, inboth the ~~future,~~adoption and werepeal of laws, may ~~not~~require beus ~~able~~to invest significant management attention and resources to ~~overcome~~make ~~risks~~any ~~associated~~necessary ~~with~~changes ~~such~~to ~~transactions~~operate appropriately and efficiently and could have a material adverse effect on our business, financial condition and results of operations.

~~Although~~Due weto ~~plan~~Section to162(m) ~~continue~~of tothe ~~grow~~Internal ~~our~~Revenue ~~business~~Code ~~organically~~(the “Code”), we may ~~explore~~not ~~opportunities~~be able to ~~invest~~deduct ~~in,~~all orof tothe ~~acquire,~~compensation ~~other~~of ~~financial~~some ~~institutions~~executives, ~~financial~~including ~~service~~executives of companies ~~and businesses that~~ we ~~believe~~may ~~would~~acquire ~~complement~~in ~~our~~the ~~existing business~~future. ~~Our investment or acquisition activities could be material to our business and involve a number of risks including the following:~~

~~•difficulty~~Section in162(m) ~~estimating~~of the ~~value~~Code generally limits to $1.0 million annual deductions for compensation paid to “covered employees” of any ~~target~~“publicly held corporation.” A “publicly held corporation” includes any company that issues securities required to be registered under Section 12 of the Securities Exchange Act of 1934 or companies required to file reports under Section 15(d) of the Exchange Act, determined as of the last day of the company’s taxable year. As a consequence, Section 162(m) of the Code limited the deductibility of compensation to our covered employees to $1.0 million beginning with the year ended December 31, 2021. The definition of “covered employees” generally includes anyone who served as the chief executive officer during the taxable year; the two highest compensated executive officers (other than the chief executive officer), determined under SEC rules; and any individual who was a covered employee, including of a “predecessor company,” at any point during a taxable year beginning on or after January 1, 2017, even after the employee terminates employment.

~~•investing~~Notably, ~~time~~under ~~and~~the ~~incurring~~American ~~expense~~Rescue ~~associated~~Plan ~~with~~Act ~~identifying~~of ~~and~~2021, ~~evaluating~~or ~~potential~~the ~~investments~~ARPA, orwhich ~~acquisitions~~was ~~and~~signed ~~negotiating~~into ~~potential~~law ~~transactions~~on March 11, ~~resulting~~2021, infor ~~our~~tax ~~attention~~years ~~being~~beginning ~~diverted~~after ~~from~~December 31, 2026, the ~~operation~~definition of ~~our~~“covered ~~existing~~employees” ~~business;~~will be expanded to include FinWise Bancorp’s next five highest paid employees (in addition, pursuant to proposed Treasury Regulations, to the chief executive officer, the chief financial officer and the three other highest compensated executive officers).

•As a result of the ~~lack~~foregoing, we may not be able to deduct all of ~~history~~the ~~among~~compensation paid in 2025 and future years if compensation paid to “covered employees” exceeds the thresholds established by Section 162(m) of the Code. Losing deductions under Section 162(m) of the Code could increase our ~~management~~income ~~team~~taxes and reduce our net income. A reduction in ~~working~~net ~~together~~income oncould ~~acquisitions~~negatively affect our results of operations and ~~related~~the ~~integration~~price ~~activities;~~of our stock.

~~•obtaining~~Because ~~necessary~~of ~~regulatory~~the ~~approvals,~~Dodd-Frank ~~which~~Act weand ~~may~~related ~~have~~rulemaking, ~~difficulty~~the ~~obtaining~~Company oris besubject ~~unable~~ to ~~obtain;~~more stringent capital requirements.

•The Bank’s failure to maintain the ~~time~~minimum leverage ratio under the Community Bank Leverage Ratio framework under the Regulatory Relief Act could result in one or more of our regulators placing limitations or conditions on our activities, ~~expense~~including our growth initiatives, or restricting the commencement of new activities, and ~~difficulty~~could affect customer and investor confidence, our costs of ~~integrating~~funds ~~the~~and ~~operations~~FDIC insurance costs, our ability to pay dividends on our common stock, our ability to make acquisitions, and ~~personnel~~our business, results of ~~any~~operations ~~combined~~and ~~businesses;~~financial condition. See “Supervision and Regulation—Capital Adequacy Guidelines.”

~~•unexpected~~Federal ~~asset~~and ~~quality~~state ~~problems~~banking agencies periodically conduct examinations of our business, including our compliance with ~~acquired~~laws ~~companies;~~and regulations, and our failure to comply with any regulatory actions, if any, could adversely impact us.

~~•inaccurate~~As ~~estimates~~part of the bank regulatory process, the Federal Reserve, the FDIC and ~~judgments~~the ~~used~~UDFI, periodically conduct examinations of our business, including compliance with laws and regulations. If, based on an examination, the UDFI or a federal banking agency were to ~~evaluate~~determine ~~credit~~that the financial condition, ~~operations~~capital resources, asset quality, earnings prospects, management, ~~and~~liquidity, ~~market~~asset ~~risks~~sensitivity, ~~with~~risk ~~respect~~management toor other aspects of any ~~target~~of ~~institution~~our operations have become unsatisfactory, or ~~assets;~~that the Company or its management were in violation of any law or regulation, it may take such remedial actions as it deems appropriate. If we become subject to such regulatory actions, our business, financial condition, results of operations and reputation would likely be adversely affected.

•Financial institutions, such as the Bank, face risks of ~~impairment~~noncompliance and enforcement actions related to ~~goodwill~~the orBank Secrecy Act and other anti-~~than-temporary~~money ~~impairment~~laundering ofstatutes ~~investment~~and ~~securities;~~regulations.

~~•potential~~The ~~exposure~~Bank Secrecy Act, the Uniting and Strengthening America by Providing Appropriate Tools Required to ~~unknown~~Intercept and Obstruct Terrorism Act of 2001, or ~~contingent~~the ~~liabilities~~USA PATRIOT Act, and other laws and regulations require financial institutions, among other duties, to institute and maintain an effective anti-money laundering program and file suspicious activity and currency transaction reports as appropriate. To administer the Bank Secrecy Act, FinCEN is authorized to impose significant civil money penalties for violations of ~~banks~~those requirements and ~~businesses~~has werecently ~~acquire;~~engaged in coordinated enforcement efforts with the individual federal banking regulators, as well as the U.S. Department of Justice, Drug Enforcement

•an inability to realize expected synergies or returns on investment;

•potential disruption of our ongoing banking business;

•maintaining adequate regulatory capital; and

•loss of key employees, key customers or key business counterparties following our investment or acquisition.

We may not be successful in overcoming these risks or other problems encountered in connection with potential investments or acquisitions. Our inability to overcome these risks could have an adverse effect on our ability to implement our business strategy and enhance shareholder value, which, in turn, could have an adverse effect on our business, financial condition and results of operations. Additionally, if we record goodwill in connection with any acquisition, our business, financial condition and results of operations may be adversely affected if that goodwill is determined to be impaired, which would require us to take an impairment charge.

We have entered into, and expect to continue to enter into, joint venture, strategic collaboration, teaming and other business arrangements, and these activities involve risks and uncertainties. A failure of any such relationship could have a material adverse effect on our business and results of operations.

We have entered into, and expect to continue to enter into, significant joint venture, strategic collaboration, teaming and other arrangements, including our Strategic Programs we have established with various third-party consumer and commercial loan origination platforms. These activities involve risks and uncertainties, including the risk of the joint venture or applicable Strategic Program platform failing to satisfy its obligations, which may result in certain liabilities to us for any related commitments, the uncertainty created by challenges in achieving strategic objectives and expected benefits of the business arrangement, the risk of conflicts arising between us and our business collaborations and the difficulty of managing and resolving such conflicts, and the difficulty of managing or otherwise monitoring such business arrangements. In addition, in these joint ventures, strategic collaborations and alliances, we may have certain overlapping

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~~control~~Administration ~~over~~and the ~~operation of the assets and businesses~~IRS. AsThere ais ~~result,~~also ~~such~~increased ~~joint~~scrutiny ~~ventures,~~of ~~strategic~~compliance ~~collaborations~~with ~~and alliances may involve risks such as~~ the ~~possibility~~sanctions ~~that~~programs aand ~~counterparty~~rules inadministered a business arrangement might become bankrupt, be unable to meet its contractual obligations, have economic or business interests or goals that are inconsistent with our business interests or goals, or take actions that are contrary to our instructions or to applicable laws and ~~regulations.~~enforced Inby ~~addition, we may be unable to take action without~~ the ~~approval~~Treasury ofDepartment’s ~~our~~Office business partners, or our partners could take binding actions without our consent. Consequently, actions by a partner or other third party could expose us to claims for damages, financial penalties, and reputational harm, any of ~~which~~Foreign ~~could~~Assets ~~have an adverse effect on our business, financial condition, and results of operations~~Control. ~~A failure of our business relationships could have a material adverse effect on our business and results of operations.~~

~~Acquisitions~~Our compliance with the anti-money laundering laws is in part dependent on our ability to adequately screen and ~~strategic~~monitor ~~collaborations~~our ~~may~~customers ~~never~~for ~~materialize~~their compliance with these laws. We have developed policies and procedures to screen and monitor these customers. To comply with regulations, guidelines and examination procedures in this area, we have dedicated significant resources to our anti-money laundering program. If our policies, procedures and systems are deemed deficient, we could be subject to liability, including fines and regulatory actions such as restrictions on our ability to pay dividends and the inability to obtain regulatory approvals to proceed with certain aspects of our business plans, including acquisitions and de novo branching.

WeRegulations ~~intend~~relating to ~~explore~~privacy, ainformation ~~variety~~security ~~of acquisitions~~ and ~~strategic~~data ~~collaborations~~protection ~~with~~could increase our ~~existing Strategic Program service providers or other third parties~~costs, ~~and~~affect ~~related businesses in various states. We are likely to face significant competition in seeking appropriate acquisitions~~ or ~~strategic~~limit ~~collaborators,~~how ~~and~~we ~~these~~collect ~~acquisitions~~ and ~~strategic~~use ~~collaborations~~personal ~~can~~information ~~be complicated~~ and ~~time~~adversely ~~consuming~~affect toour ~~negotiate~~business ~~and document~~opportunities. We may not be able to negotiate acquisitions and strategic collaborations on acceptable terms, or at all, and we are unable to predict when, if ever, we will enter into any such acquisitions or strategic collaborations due to the numerous risks and uncertainties associated with them.

We are subject to various privacy, information security and data protection laws, including requirements concerning security breach notification, and we could be negatively impacted by these laws. Various state and federal banking regulators and states have also enacted data security breach notification requirements with varying levels of individual, consumer, regulatory or law enforcement notification in certain circumstances in the event of a security breach. Moreover, legislators and regulators in the U.S. are increasingly adopting or revising privacy, information security and data protection laws that potentially could have a significant impact on our current and planned privacy, data protection and information security-related practices, our collection, use, sharing, retention and safeguarding of consumer or employee information, and some of our current or planned business activities. This could also increase our costs of compliance and business operations and could reduce income from certain business initiatives. This includes increased privacy-related enforcement activity at the federal level by the Federal Trade Commission, as well as at the state level. For example, in March 2022, Utah enacted the Utah Consumer Privacy Act, which provides for an additional state level regulation. Also, the Federal Trade Commission has issued a staff report on digital “dark patterns,” sophisticated design practices that can trick or manipulate consumers into buying products or services or giving up their private information, that, among other things, highlighted marketing and disclosure practices by some financial technology companies that the Federal Trade Commission claimed were deceptive because of their use of dark patterns, and this has led to numerous enforcement actions, staff reports, and statements by Federal Trade Commission officials scrutinizing marketing and disclosure practices of financial technology companies. Compliance with current or future privacy, data protection and information security laws (including those regarding security breach notification) affecting customer or employee data to which we are subject could result in higher compliance and technology costs and could restrict our ability to provide certain products and services, which could have a material adverse effect on our business, financial conditions or results of operations. Our failure to comply with privacy, data protection and information security laws could result in potentially significant regulatory or governmental investigations or actions, litigation, fines, sanctions and damage to our reputation, which could have a material adverse effect on our business, financial condition or results of operations.

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Private parties may also challenge an institution’s performance under fair lending laws in private class action litigation. Such actions could have a material adverse effect on our reputation, business, financial condition and results of operations.

We may be subject to liability for potential violations of predatory lending laws, which could adversely impact our results of operations, financial condition and business.

Regulatory agencies and consumer advocacy groups have asserted claims that the practices of lenders and loan servicers result in a disparate impact on protected classes.

In addition to reputational harm, violations of FHA and ECOA can result in actual damages, punitive damages, injunctive or equitable relief, attorneys’ fees and civil money penalties.

Increases in FDIC insurance premiums could adversely affect our earnings and results of operations.

Climate change and related legislative and regulatory initiatives may materially affect our business and results of operations.

The effects of climate change continue to raise significant concerns about the state of the environment. Federal and state policy approaches to climate change continue to evolve, and changes in legislative or regulatory priorities could alter the requirements and expectations placed on businesses, including banks, to address climate-related risks. The lack of

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empirical data regarding the financial and credit risks posed by climate change still makes it difficult to predict its specific impact on our financial condition and results of operations. However, the physical effects of climate change, such as more frequent and severe weather disasters, could directly affect us. For instance, such events may damage real property securing loans in our portfolios or reduce the value of that collateral. If our borrowers’ insurance is insufficient to cover these losses or if insurance becomes unavailable, the value of the collateral securing our loans could be negatively affected, potentially impacting our financial condition and results of operations. Moreover, climate change may adversely affect regional and local economic activity, harming our clients and the communities in which we operate.

In addition, our offices may be vulnerable to the adverse effects of climate change. We have a substantial physical presence in the Salt Lake City, Utah, region that is prone to events such as seismic activity, drought, water scarcity and severe weather. This region has experienced and may continue to experience, climate-related events at an increasing rate. Although we maintain a disaster response plan and insurance, such events could disrupt our business, the business of our customers or third-party suppliers, and may cause us to experience losses and additional costs to maintain and resume operations. Regardless of changes in federal policy, the effects of climate change and its unknown long-term impacts could still have a material adverse effect on our financial condition and results of operations.

Evolving ESG expectations could increase our costs and risks.

Regulatory, investor, and stakeholder expectations around environmental, social, and governance (“ESG”) practices continue to evolve, potentially increasing compliance costs and operational burdens. Recent shifts in U.S. policies have altered the landscape of ESG practices. The Trump Administration has rolled back several climate initiatives and withdrawn from international agreements, such as the Paris Climate Accord. These changes may reduce certain compliance requirements but also introduce uncertainty regarding future regulations. Stakeholders, including investors and customers, continue to scrutinize corporate ESG practices, and failure to meet their evolving expectations could impact our reputation and financial performance. Additionally, state-level regulations and international standards may impose differing ESG requirements, leading to potential operational complexities.

Risks Related to Ownership of Our Common Stock

The market price of our common stock may be subject to substantial fluctuations, which may make it difficult for you to sell your shares at the volume, prices and times desired.

The market price of our common stock may be highly volatile, which may make it difficult for you to resell your shares at the volume, prices and times desired. There are many factors that may affect the market price and trading volume of our common stock, most of which are outside of our control.

The stock market and the market for financial institution stocks has experienced substantial fluctuations in recent years, which in many cases have been unrelated to the operating performance and prospects of particular companies. In addition, significant fluctuations in the trading volume in our common stock may cause significant price variations to occur. Increased market volatility may materially and adversely affect the market price of our common stock, which could make it difficult to sell your shares at the volume, prices and times desired.

Our executive management and board of directors have significant control over our business.

As of December 31, ~~2024~~2025, our directors and executive officers beneficially owned an aggregate of 23,~~907~~183,~~932~~677 shares, or approximately 2123.23% of our issued and outstanding common stock. Consequently, our executive management and board of directors may be able to significantly affect the outcome of the election of directors and the potential outcome of other matters submitted to a vote of our shareholders, such as mergers, the sale of substantially all our assets and other extraordinary corporate matters. The interests of these insiders could conflict with the interests of our other shareholders, including you.

We are an emerging growth company and smaller reporting company, and the reduced regulatory and reporting requirements applicable to emerging growth companies and smaller reporting companies may make our common stock less attractive to investors.

We are an emerging growth company, as defined in the JOBS Act. For as long as we continue to be an emerging growth company we may take advantage of reduced regulatory and reporting requirements that are otherwise generally applicable to public companies. These include, without limitation, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced financial reporting requirements, reduced disclosure obligations regarding executive compensation and exemptions from the requirements of holding non-binding shareholder advisory votes on executive compensation or golden parachute payments. The JOBS Act also permits an emerging growth company such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We have elected to, and expect to continue to, take advantage of certain of these and other exemptions until we are no longer an emerging growth company. Further, the JOBS Act allows us to present only two years of audited financial statements and only two years of related management’s discussion and analysis of financial condition and results of operations.

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advisory votes on executive compensation or golden parachute payments. The JOBS Act also permits an emerging growth company such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We have elected to, and expect to continue to, take advantage of certain of these and other exemptions until we are no longer an emerging growth company. Further, the JOBS Act allows us to present only two years of audited financial statements and only two years of related management’s discussion and analysis of financial condition and results of operations.

We may take advantage of some or all of these provisions for up to five years or such earlier time as we cease to qualify as an emerging growth company, which will occur if we have more than $1.235 billion in total annual gross revenue, if we issue more than $1.0 billion of non-convertible debt in a three-year period, or if we become a “large accelerated filer,” in which case we would no longer be an emerging growth company as of the following December 31.

Even after we no longer qualify as an emerging growth company, we may still qualify as a “smaller reporting company,” as defined in Rule 12b-2 in the Exchange Act, which would allow us to take advantage of many of the same exemptions from disclosure requirements, including not being required to provide an auditor attestation of our internal control over financial reporting and reduced disclosure regarding our executive compensation arrangements in our periodic reports and proxy statements. Investors may find our common stock less attractive because we intend to rely on certain of these exemptions, which may result in a less active trading market and increased volatility in our stock price.

Provisions in our governing documents and Utah law may have an anti-takeover effect, and there are substantial regulatory limitations on changes of control of bank holding companies.

Our corporate organizational documents and provisions of federal and state law to which we are subject contain certain provisions that could have an anti-takeover effect and may delay, make more difficult or prevent an attempted acquisition that you may favor or an attempted replacement of our board of directors or management.

Our Articles and our Amended and Restated Bylaws (the “Bylaws”) may have an anti-takeover effect and may delay, discourage or prevent an attempted acquisition or change of control or a replacement of our board of directors or management. Our governing documents and Utah law include provisions that provide for, among other things, a staggered board, and limitations on the ability of shareholders to call a special meeting of shareholders, which can make minority shareholder representation on our board of directors more difficult to establish. In addition, Utah corporate statutes contain provisions designed to protect Utah corporations and employees from the adverse effects of hostile corporate takeovers. These statutory provisions reduce the possibility that a third party could effect a change in control without the support of our incumbent directors and may also strengthen the position of current management by restricting the ability of shareholders to change the composition of the board of directors, to affect its policies generally and to benefit from actions that are opposed by the current board.

Furthermore, banking laws impose notice, approval, and ongoing regulatory requirements on any shareholder or other party that seeks to acquire direct or indirect “control” of an FDIC-insured depository institution or its holding company. These laws include the BHC Act and the Change in Bank Control Act. These laws could delay or prevent an acquisition. Because the Bank is an “insured depository institution” within the meaning of the Federal Deposit Insurance Act and the Change in Bank Control Act and we are a “financial institution holding company” within the meaning of the Utah Financial Institutions Act, federal and Utah law and regulations generally prohibit any person or company from acquiring control of the Company or, indirectly, the Bank, without prior written approval of the FDIC or the commissioner of the UDFI, as applicable. Under the Change in Bank Control Act, control is conclusively presumed if, among other things, a person or company acquires 25% or more of any class of our voting stock. A rebuttable presumption of control arises if a person or company acquires 10% or more of any class of our voting stock and is subject to a number of specified “control factors” as set forth in the applicable regulations. Although the Bank is an “insured depository institution” within the meaning of the Federal Deposit Insurance Act and the Change in Bank Control Act, an investment in the Company is not insured or guaranteed by the FDIC, or any other agency, and is subject to loss. Under the Utah Financial Institutions Act, control is defined as the power to vote 20% or more of any class of our voting securities by an individual or to vote more than 10% of any class of our voting securities by a person other than an individual. Investors are responsible for ensuring that they do not, directly or indirectly, acquire shares of our common stock in excess of the amount which can be acquired without regulatory approval.

Our Articles and Bylaws contain an exclusive forum provision that limits the judicial forums where our shareholders may initiate derivative actions and certain other legal proceedings against us and our directors and officers.

Our Articles and Bylaws provide that the United States District Court for the District of Utah and any Utah state court sitting in Salt Lake County, Utah will, to the fullest extent permitted by law, be the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to the Company or the Company’s shareholders, (c) any action asserting a claim against us or any of our directors or officers arising pursuant to the Utah Revised Business Corporation Act, our Articles, or our Bylaws, or (d) any other action asserting a claim against us or any of our directors or officers that is governed by the internal affairs doctrine. The choice of forum provision in our Articles and Bylaws may limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us. Alternatively, if a court were to find the

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derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to the Company or the Company’s shareholders, (c) any action asserting a claim against us or any of our directors or officers arising pursuant to the Utah Revised Business Corporation Act, our Articles, or our Bylaws, or (d) any other action asserting a claim against us or any of our directors or officers that is governed by the internal affairs doctrine. The choice of forum provision in our Articles and Bylaws may limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us. Alternatively, if a court were to find the choice of forum provision contained in our Articles and Bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results, and financial condition.

Our common stock is not an insured deposit and is subject to risk of loss.

Our common stock is not a savings account, deposit account or other obligation of any of the Bank or any of our other subsidiaries and will not be insured or guaranteed by the FDIC or any other government agency. Investment in our common stock is subject to investment risk, including possible loss.

Item 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

Item 1C. CYBERSECURITY

The Company is exposed to cybersecurity threats and incidents that can range from uncoordinated individual attempts to gain unauthorized access to information systems to sophisticated and targeted measures known as advanced persistent threats, directed at the Company or its third party service providers. Our customers, strategic relationships and regulators expect us to maintain a suitable cybersecurity posture to identify, protect, detect, respond and recover from incidents that may impact the confidentiality, integrity and availability of sensitive information we possess. We evaluate the risks of data theft (including theft of sensitive, proprietary and other data categories, in addition to personal data), harm to customer or third party relationships and litigation or regulatory investigation or actions that could materially adversely affect our financial condition, results of operations and reputation. Cybersecurity risk is assessed and managed primarily through our ~~operations~~technology, risk management, and audit teams and is overseen by our Board of Directors.

The Bank’s Information Security Officer (“ISO”), who reports to our Chief Compliance & Risk Officer, is directly responsible for assessing and managing cybersecurity risks pursuant to the Company’s Information Security Program, which is approved by our Board of Directors periodically. The current ISO has more than 5 years of cybersecurity experience and holds multiple industry certifications.

The ISO provides our Board of Directors with periodic reports regarding the Company’s cybersecurity condition, key activities and recommendations for improvement of the Information Security Program. The ISO coordinates any incident responses with members of the Company’s executive management, regulators and third parties. The ISO also reports any matter relating to cybersecurity incident responses and control deficiencies to our Board of Directors and its Audit Committee, respectively.

The cybersecurity department of the Bank’s Information Technology (“IT”) department is responsible for the day-to-day operations of our cybersecurity controls and defenses. The department is managed by the Bank’s ~~Director~~IT ~~of Information Systems and~~ Security Manager, who reports to the Bank’s Chief Technology Officer . The current ~~Director~~IT ~~of Information Systems and~~ Security Manager has more than 2414 years of technology and cybersecurity experience. Our Chief Technology Officer periodically reports information about the Company’s cybersecurity risks and operational developments to our Board of Directors.

The IT department provides the ISO with access to its operations and alerts regarding cybersecurity events. Events that could become cybersecurity incidents are reviewed and evaluated by the ISO in consultation with the IT department. Documented escalation procedures are tested regularly as part of tabletop exercises and other activities and include notification to executive management during qualifying cybersecurity incidents. The IT department shares responsibility with the ISO for identifying and prioritizing improvements to the Company’s cybersecurity capabilities and resources.

The Bank’s IT Steering Committee, comprising the ISO and members of the Company’s executive management and IT department, generally meets on a monthly basis to review developments regarding the Company’s cybersecurity risks, defenses and remediation activities. Minutes of the meetings of the IT Steering Committee are regularly reviewed by our Board of Directors.

We perform periodic risk assessments of the Company’s information systems based on regulatory guidance issued by the Federal Financial Institutions Examination Council (“FFIEC”) and state and federal regulators, including the FDIC and the UDFI. We use multiple real-time and interval-based monitoring and reporting mechanisms to detect and respond to cybersecurity incidents. We also engage multiple independent third parties or cyber experts to detect and defend against cybersecurity threats and to assess information security programs and practices including penetration testing. Additionally, 45

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The ISO, along with the Bank’s Third-Party Oversight Committee, evaluates cybersecurity risks and information systems of third parties whose information systems support important Company operations or with whom the Company has significant business relationships at onboarding, on an ongoing basis and upon termination of the business relationship. Such evaluations may include reviews of reports or performing assessments of a third party’s information systems pursuant to established cybersecurity frameworks such as International Organization for Standardization (“ISO”) ISO 27001 or Cybersecurity Framework (“CSF”) published by the US National Institute of Standards and Technology, as well as reviews of reports issued by a third party’s auditors developed under the attestation standards issued by the American Institute of Certified Public Accountants (“AICPA”). When appropriate, the Company may include additional risk mitigation measures in its onboarding requirements for third parties to address any identified risk factors, such as minimum required information security performance agreements to enable cybersecurity threats and incidents to be managed within applicable industry or regulatory standards, disclosure obligations requiring reporting to the Company of the occurrence and mitigation of cybersecurity threats and incidents, and requirements to maintain adequate levels of cybersecurity insurance coverage.

When a cybersecurity incident occurs, whether detected internally or from a third party, we evaluate the incident for criticality and potential materiality and disclosure. We consider various factors in assessing the materiality of a cybersecurity incident, including the potential for misappropriation, destruction, corruption or unavailability of critical data and confidential or proprietary information (our own or that of third parties) and business operation disruption, and may consult with external advisors, experts or legal counsel in connection with our assessment. We have escalation procedures to notify members of our executive management, Board of Directors and regulators in a timely manner based on the criticality and materiality of any cybersecurity incident.

While we have experienced, and expect to continue to experience, cybersecurity threats, we did not experience any material cybersecurity incident in the year ended December 31, ~~2024~~2025. We may nevertheless be unsuccessful in the future in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us. For additional information regarding cybersecurity risks, see “Risk Factors - Risks Related to ~~Cybersecurity and~~ Technology”.

Item 2. PROPERTIES

Our headquarters office is currently located at 756 East Winchester, Suite 100, Murray, UT 84107. The following table summarizes pertinent details of our leased office properties.

Location

Owned/
Leased

Lease
Expiration

Type of Office

Murray, Utah

Leased

October 31, 2029

Corporate Headquarters

Sandy, Utah

Leased

January 31, 2027

Retail Bank Branch

We believe that the leases to which we are subject have terms that are generally consistent with prevailing market terms. None of the leases involve any of our directors, officers or beneficial owners of more than 5% of our voting securities or any affiliates of the foregoing. We believe that our facilities, which are used by each of our reportable segments, are in good condition and are adequate to meet our operating needs for the foreseeable future.

Item 3. LEGAL PROCEEDINGS

WeBetween ~~are~~July ~~not~~and ~~currently~~August ~~subject~~2025, toseveral ~~any~~lawsuits ~~material~~were ~~legal~~filed ~~proceedings.~~against Wethe ~~are~~Company ~~from~~in ~~time~~the toUnited ~~time~~States ~~subject~~District toCourt ~~claims~~for ~~and~~the ~~litigation~~District ~~arising~~of inUtah. ~~the~~The ~~ordinary~~complaints ~~course~~generally ofassert ~~business.~~claims ~~These~~of ~~claims~~negligence, ~~and~~breach ~~litigation~~of ~~may~~implied ~~include,~~contract ~~among~~and ~~other~~unjust ~~things~~enrichment, ~~allegations~~on behalf of ~~violation~~various classes of ~~banking~~putative individuals ~~and~~who ~~other~~claimed ~~applicable~~to ~~regulations,~~have ~~competition~~been ~~law,~~harmed ~~labor~~in ~~laws~~connection ~~and~~with an ~~consumer~~alleged ~~protection~~data ~~laws,~~breach involving the Company. The plaintiffs are seeking equitable and injunctive relief as well as ~~claims~~an orunspecified ~~litigation~~amount ~~relating~~of tomonetary ~~intellectual~~damages ~~property,~~in ~~securities~~connection with their claims, ~~breach~~which include an award of ~~contract~~attorneys’ fees and ~~tort~~costs. WeOn ~~intend~~October to3, ~~defend~~2025, ~~ourselves~~the ~~vigorously~~Court ~~against~~entered ~~any~~an ~~pending~~Order orconsolidating ~~future~~the ~~claims~~pending cases and ~~litigation~~all insubsequently ~~any~~filed ~~case~~putative ~~where~~class weactions ~~disagree~~involving ~~with~~the same or substantially the ~~claims~~same ~~made~~obligations into the pending matter into Minter et. al v. FinWise Bank et. al, Case No.

In the current opinion of management, the likelihood is remote that the impact of such ordinary course proceedings, either individually or in the aggregate, would have a material adverse effect on our results of operations, financial condition or cash flows. However, one or more unfavorable outcomes in any claim or litigation against us could have a material adverse effect for the period in which they are resolved. In addition, regardless of their merits or their ultimate outcomes, such matters are costly, divert management’s attention and may materially adversely affect our reputation, even if resolved in our favor.46

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2:25-cv-00569-JNP-CMR. The Company has disputed the claims and is vigorously defending the lawsuit. The parties engaged in voluntary mediation on March 17, 2026, but were unable to reach an agreement on that date.

The outcome of the pending litigation described above is uncertain. We intend to defend vigorously against the foregoing pending lawsuit and any other lawsuits as they may arise in the ordinary course of business. However, litigation is inherently uncertain, and we are unable to predict the outcome of these lawsuits. We also cannot provide any assurance that the ultimate resolution of any lawsuits will not have a material adverse effect on our reputation, business, prospects, results of operations or financial condition. For additional information concerning contingencies and uncertainties, see Note 9 - Commitments and Contingencies, of the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Report.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

The Company’s common stock has been publicly traded since November 19, 2021 and is currently traded on the Nasdaq Global Market under the Symbol “FINW.”

Holders of Record

There were approximately 9488 shareholders of record of the Company’s common stock as of March 2016, ~~2025~~2026. This number does not reflect the number of persons or entities holding stock in nominee name through banks, brokerage firms or other nominees.

Dividends

Holders of our common stock are only entitled to receive dividends when, as and if declared by our board of directors out of funds legally available for dividends. We have not paid any cash dividends on our common stock since inception, and we currently have no plans to pay dividends for the foreseeable future.

Because we are a bank holding company and do not engage directly in business activities of a material nature, our ability to pay dividends to our shareholders depends, in large part, upon our receipt of dividends from the Bank, which is also subject to numerous limitations on the payment of dividends under Utah and federal banking laws, regulations and policies. See Item 1. Business-Supervision and Regulation-Regulatory Restrictions on Dividends.

Our ability to pay dividends to our shareholders in the future will depend on regulatory restrictions, our liquidity and capital requirements, our earnings and financial condition, the general economic climate, contractual restrictions, our ability to service any equity or debt obligations senior to our common stock and other factors deemed relevant by our board of directors.

Recent Sales of Unregistered Securities and Issuer Repurchases of Equity Securities

There were no unregistered sales of the Company’s common stock during the fourth quarter of ~~2024~~2025.

On March 7, 2024, we announced that the Board had authorized, effective March 6, 2024, a common stock repurchase program to purchase up to 641,832 shares of our common stock in the aggregate. The repurchase program expires on March 31, 2026, but may be limited or terminated at any time without prior notice. The repurchase program authorized the repurchase by us of our common stock in open market transactions, including pursuant to a trading plan in accordance with Rule 10b-18 promulgated under the Exchange Act of 1934, as amended (the “Exchange Act”), or privately negotiated transactions. Repurchases may also be made pursuant to a trading plan under Rule 10b5-1 under the Exchange Act, which would permit shares to be repurchased when we might otherwise be precluded from doing so because of self-imposed trading blackout periods or other regulatory restrictions. The Share Repurchase Committee, designated by the Board of Directors, will determine the actual timing, number and value of any shares repurchased in its discretion depending 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. There were no repurchases of our common stock during the three months ended December 31, ~~2024~~2025. At December 31, ~~2024~~2025, 597,224 shares remain available for repurchase.

Equity Compensation Plan Information

For information regarding securities authorized for issuance under the Company’s equity compensation plans, see Part III, Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 6. [RESERVED]

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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

~~The~~FinWise ~~Company~~Bancorp, Inc. is a Utah corporation and the parent company of FinWise Bank and FinWise Investment, LLC. The Company’s ~~assets~~is ~~consist~~a ~~primarily~~registered ofbank ~~its~~holding ~~investment~~company inthat ~~the~~is ~~Bank~~subject ~~and~~to ~~all~~supervision ofby ~~its~~Utah ~~material~~Department ~~business~~of ~~activities~~Financial ~~are~~Institutions ~~conducted~~(“UDFI”) ~~through~~and the ~~Bank~~Federal Reserve. The Company’s isassets aconsist ~~registered~~primarily ~~bank~~of ~~holding~~its ~~company~~investment ~~that~~in isthe ~~subject~~Bank toand ~~supervision~~all byof ~~the~~its ~~UDFI~~material ~~and~~business ~~the~~activities ~~Federal~~are ~~Reserve~~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 ~~new~~ 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 ~~significant~~ growth and our consistent ability to operate profitability since developing ~~the~~our third-party loan origination business. Our track record has demonstrated that ~~these~~our ~~factors~~products and delivery of the products help deliver ~~such~~sustainable asset growth and strong profitability, and that the ~~flexibility~~characteristics ~~inherent~~of in 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 ~~four~~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, ~~(iii)~~lending ~~residential~~which ~~and~~includes ~~commercial~~held-for-sale, ~~real~~credit ~~estate~~enhanced, and ~~(iv)~~retained ~~commercial leasing~~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. WeThese ~~base~~estimates ~~our~~are ~~estimates~~based on historical experience and ~~on various~~ other ~~assumptions that are believed to be~~ 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 ~~available~~determinable from other sources. We ~~evaluate~~review ~~our~~these estimates ~~on an ongoing basis~~regularly. Actual results may differ from these estimates ~~under different assumptions or conditions~~.

~~Accounting~~Management ~~policies,~~considers asthe ~~described~~determination inof ~~detail~~our inallowance ~~the~~for ~~notes~~credit losses to ~~our~~be ~~consolidated~~a ~~financial~~critical ~~statements~~accounting ~~included~~estimate, inas ~~Part~~it ~~II,~~involves ~~Item~~making 8difficult, ~~are~~subjective, anor ~~integral~~complex ~~part~~judgments ofabout ~~our~~inherently ~~financial~~uncertain ~~statements~~matters. AChanges ~~thorough~~in ~~understanding~~this ofestimate, ~~these~~whether ~~accounting~~due ~~policies~~to isevolving ~~essential~~circumstances ~~when~~from ~~reviewing~~period ~~our~~to ~~reported~~period ~~results~~or ofthe ~~operations~~use ~~and~~of ~~our~~other ~~financial~~reasonable ~~position.~~assumptions, Wecould ~~believe~~materially ~~that~~affect ~~the~~our ~~critical~~financial ~~accounting~~position, ~~policies~~results ~~and~~of ~~estimates discussed below require us to make difficult~~operations, ~~subjective~~ or ~~complex~~liquidity. ~~judgments~~For ~~about~~further ~~matters~~details ~~that~~on ~~are~~our ~~inherently~~accounting ~~uncertain.~~policy ~~Changes~~related into ~~these~~this ~~estimates~~estimate, ~~which~~refer ~~are likely~~ to ~~occur~~Note ~~from~~1 ~~period~~– toSummary ~~period, or use~~ of ~~different~~Significant ~~estimates~~Accounting ~~that~~Policies weto ~~could have reasonably used in~~ the ~~current~~consolidated ~~period,~~financial ~~would~~statements ~~have~~included ain ~~material~~Part ~~impact on our financial position~~II, ~~results~~Item ~~of operations or liquidity~~8.

~~The~~Allowance ~~JOBS~~for ~~Act~~Credit ~~permits~~Losses us(“ACL”). anThe ~~extended~~ACL ~~transition~~represents ~~period~~management’s ~~for~~estimate ~~complying~~of ~~with~~expected ~~new~~credit orlosses ~~revised~~on ~~accounting~~financial ~~standards~~assets ~~affecting~~measured ~~public~~at ~~companies~~amortized cost. WeThe ~~have~~ACL ~~elected~~is toevaluated ~~take~~and ~~advantage~~measured ofon ~~this~~a ~~extended~~collective ~~transition~~basis ~~period,~~for ~~which~~loans ~~means~~ that ~~the~~share ~~financial~~similar ~~statements~~risk ~~included~~characteristics. inAt ~~this~~each ~~Report~~reporting date, aswe ~~well~~assess aswhether ~~any~~loans ~~financial~~within ~~statements~~a ~~that~~given wepool ~~file~~continue into ~~the~~exhibit ~~future,~~similar ~~will~~risk ~~not~~characteristics or whether certain loans should be ~~subject~~evaluated toindividually. ~~all~~Expected ~~new~~credit orlosses ~~revised~~are ~~accounting~~estimated ~~standards~~over ~~generally~~the ~~applicable~~contractual toterm ~~public~~of ~~companies~~each loan, adjusted for ~~the~~expected ~~transition~~prepayments. ~~period~~Accordingly, ~~for~~assumptions soregarding ~~long~~loan aslife wemay have a

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remain an emerging growth company or until we affirmatively and irrevocably opt out of the extended transition period under the JOBS Act.

Our critical accounting estimates primarily relate to the allowance for credit losses. We previously disclosed our stock-based compensation and income taxes as critical accounting estimates. We have determined our stock-based compensation and income taxes are no longer critical accounting estimates as they do not involve a significant level of estimate uncertainty that would likely have a material effect on our financial condition or results of operations. See Note 1 - Summary of Significant Accounting Policies to the consolidated financial statements included in Part II, Item 8 for information on our accounting policy related to this critical accounting estimate.

Allowance for Credit Losses. On January 1, 2023, the Company adopted ASU 2016-13, Topic 326 which replaced the incurred loss methodology with CECL for financial instruments measured at amortized cost and other commitments to extend credit. CECL requires the immediate recognition of estimated credit losses expected to occur over the estimated remaining life of the asset. The forward-looking concept of CECL requires loss estimates to consider historical experience, current conditions and reasonable and supportable economic forecasts of future events and circumstances.

The allowance for credit losses is reported as a reduction of the amortized cost basis of loans held-for-investment, while the reserve for unfunded loan commitments is included within other liabilities on the Consolidated Balance Sheets. The estimate of credit loss incorporates assumptions for both the likelihood and amount of funding over the estimated life of the commitments, including adjustments for current conditions and reasonable and supportable forecasts. Management periodically reviews and updates its assumptions for estimated funding rates. Accrued interest receivable is excluded from the ACL calculation. The amortized cost basis of loans does not include accrued interest receivable, which is included in accrued interest receivable on the Consolidated Balance Sheets. The provision for credit losses on the Consolidated Statements of Income is a combination of the provision for credit losses and the provision for unfunded loan commitments.

With respect to the Bank's core portfolio which consists of SBA 7(a), local lending, retail point of sale, and equipment finance and leasing, the Bank pools similar loans that are collectively evaluated and determines an appropriate level of general allowance by portfolio segment using a non-discounted cash flow model taking into account probability of default, loss in the event of default, and prepayment speed estimates based on industry specific collected data. The model captures credit and fraud losses assumed to be credit related losses over the historical charge-off and prepayment cycle and applies those losses at a loan level over the remaining maturity of the loan. The model then calculates a historical loss rate using the average losses over the reporting period, which is then applied to each segment utilizing a standard reversion rate. With respect to the Bank's active retained Strategic Program loan portfolio, the Bank is using a methodology that compares the actual loan performance of a vintage to the worst performing loans within that vintage, known as the high-water mark. The Bank records the expected credit losses based on the high-water mark loss rate. With respect to the Bank's inactive retained Strategic Program loan portfolio, performance data at the summary level provided by the Strategic Programs is banded by credit profile and original loan term and compared to actual loan performance on a quarterly basis. The expected loss rate is supplemented with adjustments for reasonable and supportable forecasts of relevant economic indicators, including but not limited to national unemployment rate forecasts. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. Also included in the ACL are qualitative factors based on the risks present for each portfolio segment. These qualitative factors include the following that are derived from the Interagency Policy Statement on Allowance for Credit Losses: changes in lending policies and procedures; changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of the loan portfolio; changes in the nature and volume of the loan portfolio and in the terms of loans; changes in the experience, ability, and depth of lending management and staff; changes in the volume and severity of past due loans, nonaccrual loans, and classified or graded loans; changes in the quality of the Bank's loan review system; changes in the value of underlying collateral for loans that are not collateral-dependent; changes in the level of concentration of credit; changes in the effect of competition, legal, and regulatory requirements on the level of estimated credit losses; and, if applicable, changes in the composition and volume of the loan portfolio due to mergers, acquisitions, and other significant transactions not considered elsewhere. It is also possible that these factors could include social, political, economic, and terrorist events or activities. All of these factors are susceptible to change, which may be significant.

When management identifies loans that do not share common risk characteristics (i.e., are not similar to other loans within a pool) they are evaluated on an individual basis. These loans are not included in the collective evaluation. For loans identified as having a likelihood of foreclosure or that the borrower is experiencing financial difficulty, a collateral-dependent approach is used. These are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral. Under CECL, for collateral-dependent loans, the Company has adopted the practical expedient method to measure the allowance for credit losses based on the fair value of collateral. The allowance for credit losses is calculated on an individual loan basis based on the shortfall between the fair value of the loan's collateral, which is

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adjusted for liquidation costs/discounts, and amortized cost. If the fair value of the collateral exceeds the amortized cost, no allowance is required.

The CECL methodology requires a significant amount of management judgment in determining the appropriate allowance for credit losses. Several of the steps in the methodology involve judgment and are subjective in nature including, among other things: segmenting the loan portfolio; determining the amount of loss history to consider; selecting predictive econometric regression models that use appropriate macroeconomic variables; determining the methodology to forecast prepayments; selecting the most appropriate economic forecast scenario; determining the length of the reasonable and supportable forecast and reversion periods; estimating expected utilization rates on unfunded loan commitments; and assessing relevant and appropriate qualitative factors. In addition, the CECL methodology is dependent on economic forecasts, which are inherently imprecise and will change from period to period. Although the allowance for credit losses is considered appropriate, there can be no assurance that it will be sufficient to absorb future losses.

In determining an appropriate amount for the allowance, the Bank segments and aggregates the loan portfolio based on common characteristics. The following segments have been identified:

Commercial Real Estate. These loans are generally secured by owner-occupied nonfarm, nonresidential properties, or by other nonfarm, nonresidential properties. Owner-occupied commercial real estate loans are typically repaid first by the cash flows generated by the underlying business. Factors that may influence a business' cash flows include, but are not limited to, demand for its products or services, quality and depth of management, degree of competition, regulatory changes, and general economic conditions. Non-owner occupied commercial real estate loans are generally considered to have a higher degree of credit risk as they may be dependent on the ongoing success and operating viability of a fewer number of tenants who are occupying the property and who may have a greater degree of exposure to economic conditions.

Commercial and Industrial. These loans are generally secured by business assets such as furniture, fixtures, equipment, accounts receivable, inventory, business vehicles, and other business personal property. Commercial and industrial loans are typically repaid first by the cash flows generated by the borrower's business operations. The primary risk characteristics are specific to the underlying business and its ability to generate sustainable profitability and resulting positive cash flows. Factors that may influence a business' profitability include, but are not limited to, demand for its products or services, quality and depth of management, degree of competition, regulatory changes, and general economic conditions.

Commercial Leases. Equipment financing and leasing typically involve the use of equipment as collateral for the loan. If the borrower defaults on the loan, the Bank may need to repossess and sell the equipment to recover the outstanding debt. However, the value of the equipment may depreciate over time, or disappear, making it difficult for the Bank to recover the full amount of the lease. In equipment leasing, the residual value of the equipment is an important consideration. The residual value is the estimated value of the equipment at the end of the lease term. If the actual value of the equipment is lower than the residual value, the lessor may not be able to recover the full amount of the lease payments.

Construction and Land Development. Risks common to construction loans are cost overruns, changes in market demand for property, supply chain interruption affecting construction materials, inadequate long-term financing arrangements and declines in real estate values. Changes in market demand for property could lead to longer marketing times resulting in higher carrying costs, declining values, and higher interest rates. Risks common to residential lot loans are those similar to other types of real estate construction loans, as many customers finance the purchase of improved lots in anticipation of constructing a 1 to 4 family residence. Accordingly, common risks are changes in market demand for property, supply chain interruption affecting construction materials, inadequate long-term financing arrangements and declines in real estate values. Changes in market demand for property could lead to longer marketing times resulting in higher carrying costs, declining values and higher interest rates.

Consumer. These are loans to individuals for household, family, and other personal expenditures. Consumer loans generally have higher interest rates and shorter terms than residential loans but tend to have higher credit risk due to the type of collateral securing the loan or in some cases the absence of collateral.

Residential Real Estate. These loans are generally secured by 1 to 4 family residential properties. The primary risk characteristics associated with residential mortgage loans typically involve: major living or lifestyle changes to the borrower, including unemployment or other loss of income; unexpected significant expenses, such as for major medical issues or catastrophic events; and divorce or death. In addition, residential mortgage loans that have adjustable rates could expose the borrower to higher debt service requirements in a rising interest rate environment. Further, real estate values could drop significantly and cause the value of the property to fall below the loan amount, creating additional potential loss exposure for the Bank.

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~~Residential~~significant ~~Real~~impact ~~Estate~~on ~~Multifamily.~~the ~~Risks common to multifamily loans are poor management, high vacancy rates and regulatory changes~~ACL. The ~~value~~Company ofsegments ~~multi-family~~its ~~properties~~loan ~~can~~portfolio ~~be impacted by changes~~ in ~~the~~a ~~local~~manner ~~real~~consistent ~~estate~~with ~~market.~~how Ifcredit ~~property~~risk ~~values~~is ~~decline, the Bank may not be able to recover the full amount of the loan if the property needs to be foreclosed~~managed.

~~Strategic~~The ~~Program Loans Held-for-Investment. Unsecured consumer loans and secured or unsecured business loans issued by the~~ Company ~~through~~utilizes ~~these~~multiple ~~programs~~approaches ~~generally follow and are limited~~ to ~~specific~~estimate ~~predetermined~~expected ~~underwriting criteria. Strategic Program loans cover a wide range of borrower~~ credit ~~profiles~~losses, ~~loan~~depending ~~terms~~on ~~and interest rates. Strategic Program loans generally have higher interest rates and shorter terms similar to consumer loans and tend to have higher credit risk due to~~ the ~~type of collateral securing the~~ loan orsegment: ~~in most cases the absence of collateral.~~

~~The Company generally places loans on a nonaccrual status when~~•Approach: ~~(1)~~For ~~payment~~certain ~~is in default for 90 days or more unless the~~ loan issegments, ~~well secured and in~~ the ~~process~~Company ofapplies ~~collection; or (2) full repayment of principal and interest is not foreseen. When~~ a ~~loan is placed on nonaccrual status, all accrued and uncollected interest on that loan is reversed. Past~~non-~~due~~discounted ~~interest~~cash ~~received~~flow onapproach ~~nonaccrual~~using ~~loans is not recognized in interest income but is applied as a reduction of the outstanding principal of the loans. A~~ loan‑level isassumptions ~~relieved~~and ofrelevant ~~its~~information ~~nonaccrual~~from ~~status~~internal ~~when~~and ~~all~~external ~~principal~~sources ~~and~~related ~~interest~~to ~~payments~~historical ~~are~~experience, ~~brought~~ current, ~~the loan is well secured~~conditions, and ~~an analysis of the borrower’s financial condition provides~~ reasonable ~~assurance~~and ~~that~~supportable ~~the borrower can repay the loan as scheduled~~forecasts.

A•Approach: loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due in accordance with the contractual terms of the loan agreement, including scheduled interest payments. The Company identifies such loans by classified loan grades (also known as risk rating), removes them from the collectively assessed population and adds them to the individually assessed population of loans. Within the individually assessed population, the Company determines whether loan repayment is expected from cash flow or from the liquidation of collateral. For ~~individually~~other ~~assessed cash flow based repayment loans, the Company considers the net of the present value of estimated future cash flows using the original~~ loan ~~terms~~segments, ~~including~~ the ~~original effective interest rate. Loans that experience insignificant payment delays and payment shortfalls are generally not individually evaluated. The~~ Company ~~considers~~employs ~~the significance of payment delays on~~ a case-by-case basis, taking into consideration the circumstances of the loan and borrower, including the length of delay, the reasons for the delay, the borrower's prior payment record, and the amount of the shortfall in relation to principal and interest owed. For individually assessed collateral vintage‑based ~~repayment~~approach ~~loans,~~that ~~the~~evaluates ~~Company~~cumulative ~~estimates~~loss ~~the~~performance ~~net realizable value~~ by ~~evaluating~~origination ~~the asset's present fair market value (supported by current independent appraisals or evaluations) less liquidation expenses associated with the asset's sale or disposal~~period. ~~Common~~Expected ~~liquidation~~losses ~~expenses~~for ~~considered~~each product are ~~commissions~~anchored ~~paid~~ to ~~brokers or auctioneers, property taxes, force-placed insurance premiums, legal fees, maintenance costs, and other care and preservation of collateral expenses. Within~~ the ~~strategic~~most ~~program~~severe ~~loan~~loss ~~portfolio,~~experience ~~the~~observed ~~Company has held-~~for~~-investment~~ ~~(“HFI”)~~comparable ~~strategic~~vintages ~~programs~~at ~~that~~a itsimilar ~~considers~~stage ~~active~~of ~~and inactive~~seasoning. ~~Strategic~~This ~~programs~~methodology ~~are considered active when the Company~~ is ~~continuing~~designed to ~~originate~~conservatively ~~and~~estimate ~~retain~~losses ~~vintages~~over ~~of loans with~~ the ~~strategic~~life ~~program. Strategic programs are considered inactive when the Company is no longer originating and retaining vintages~~ of ~~loans with~~ the ~~strategic program. For the inactive HFI strategic programs there may still be outstanding loan balances from previously originated vintages; however~~product, ~~those~~even ~~loan~~for ~~balances~~unseasoned ~~decrease month-over-month through a combination of prepayment, charge-off, and regular amortization~~vintages. For the active HFI strategic programs, the Company evaluates impairment collectively on a vintage basis employing a high-water vintage methodology. For the inactive HFI strategic programs, the Company evaluates impairment collectively by calculating blended loss rates comparing the actual loan tapes against portfolio level data provided by the inactive HFI strategic programs.

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 ~~2024~~2025 and ~~2023~~2024 consolidated financial highlights from the discussion and analysis that follows:

•Originations of total loans increased by $01.71 billion to $56.01 billion for the year ended December 31, ~~2024~~2025 compared to the year ended December 31, ~~2023~~2024. New ~~Strategic~~strategic ~~Programs~~programs and organic growth through ~~existing~~certain established strategic programs contributed to the increase in loan originations.

•Net interest margin (“NIM”) was 9.9923% for the year ended December 31, ~~2024~~2025, compared to 119.6599% for the year ended December 31, ~~2023~~2024. NIM is impacted by income earned from interest-earning assets and interest costs incurred on interest-bearing liabilities. ~~NIM decreased principally as a result of FinWise having diversified its revenue sources by lending to lower risk borrowers with lower yields on loans.~~

•FinWise generated net income of $1216.71 million and $1712.57 million for the year ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively. Net income ~~declined~~increased as ~~FinWise~~we ~~invested~~benefited from the past investment in expansion of ~~its~~our product offerings ~~and supporting business infrastructure~~.

•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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~~•Total~~Fintech ~~assets~~Relationships ~~increased by $159.8 million to $746.0 million as of December 31, 2024 compared to December 31, 2023, principally in loans~~ and ~~investment~~Program ~~securities. We believe our strong capital levels support our current and planned growth strategy.~~Launches

~~Strategic~~During ~~Program~~the ~~Service~~year ~~Providers~~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 ~~first~~ strategic payments program with FUTR Payments (formerly Hank Payments Corp.) to ~~offer~~support ~~modernized~~automated ~~payments~~payment processing and ~~cash~~remittance ~~management solutions to our customers~~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 elective health care purchases.

WeOur ~~have introduced our~~ Payments (MoneyRails™) and Bank Identification Number (“BIN”) Sponsorship products which, together with our Strategic Programs, comprise the Bank’s Fintech Banking and Payment Solutions offerings. Payments (MoneyRails™) ~~and~~connects ~~BIN Sponsorship connect~~ our customers to the Bank’s API-driven banking services ledger.

Results of Operations for the Years Ended December 31, 2024 and 2023

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

	Years EndedDecember 31,
($ in thousands)	2024		2023
Interest income	$	74,352	$	64,534
Interest expense	(15,440)		(9,975)
Net interest income	58,912		54,559
Provision for credit losses	(11,573)		(11,638)
Non-interest income	22,485		21,456
Non-interest expense	(52,835)		(40,564)
Provision for income taxes	(4,247)		(6,353)
Net income	$	12,742	$	17,460

Net Interest Income and NIM

Net interest income was the primary contributor to our earnings in 2024 and 2023. 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 $4.4 million for the year ended December 31, 2024, compared to the year ended December 31, 2023 primarily due to volume increases in the loans held for investment and loans held-for-sale portfolios and was partially offset by increased volume and rate in the certificates of deposit portfolio which also contributed to the increase in our cost of funds. Average interest-earning assets increased by $121.4 million for the year ended December 31, 2024 compared to the year ended December 31, 2023, while the related yield on average interest earning assets decreased by 118 basis points to 12.60%. Average interest-bearing liabilities increased by $101.4 million for the year ended December 31, 2024 compared to the year ended December 31, 2023, while the related cost of funds increased 35 basis points to 4.57%. NIM decreased to 9.99% for the year ended December 31, 2024 from 11.65% for the year ended December 31, 2023 primarily as a result of our increased lending to lower risk borrowers with lower yields on loans as part

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ofResults ~~our strategy to reduce average credit risk in the loan portfolio combined with the increased cost~~ of ~~funds~~Operations asfor the ~~Bank~~Years ~~competed~~Ended inDecember ~~the~~31, ~~national~~2025 ~~deposit~~and ~~market for funds to support our asset growth.~~2024

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

Average Balances and Yields. The following table presents average balances for assets and liabilities, the total dollar amounts of interest income from interest-earning assets, the total dollar amounts of interest expense on interest-bearing liabilities, the resulting average yields and costs, and NIM. The yields and costs for the periods indicated are derived by dividing the annualized income or expense by the average balances for assets or liabilities, respectively, for the periods presented. The weighted average yields and rates include amortization of fees, costs, premiums and discounts, which are considered adjustments to yield/rates. Average balances have been calculated using daily averages. Loan fees are included in interest income on loans and represent net fees of approximately $2.8 million and $1.0 million for the years ended December 31, 2024 and 2023, respectively.


	Years Ended December 31,
($ in thousands)	2025		2024
Interest income	$	92,478	$	74,352
Interest expense	(20,295)		(15,440)
Net interest income	72,183		58,912
Provision for credit losses	(38,573)		(11,573)
Non-interest income	58,483		22,485
Non-interest expense	(70,333)		(52,835)
Provision for income taxes	(5,669)		(4,247)
Net income	$	16,091	$	12,742

	Years Ended December 31,
	2024						2023
($ in thousands)	AverageBalance		Interest		AverageYield/Rate		AverageBalance		Interest		AverageYield/Rate
Interest-earning assets:
Interest-bearing deposits	$	87,086	$	4,563	5.24	%	$	110,866	$	5,751	5.19	%
Investment securities	26,691		897		3.36	%	14,731		338		2.30	%
Loans held-for-sale	58,896		17,698		30.05	%	39,090		15,051		38.50	%
Loans held-for-investment(1)	417,207		51,194		12.27	%	303,784		43,394		14.28	%
Total interest-earning assets	589,880		74,352		12.60	%	468,472		64,534		13.78	%
Noninterest-earning assets	47,598						25,269
Total assets	$	637,478					$	493,740
Interest-bearing liabilities:
Demand	$	59,317	$	2,108	3.55	%	$	45,454	$	1,856	4.08	%
Savings	9,574		66		0.69	%	8,207		51		0.62	%
Money market accounts	12,284		452		3.68	%	13,665		362		2.65	%
Certificates of deposit	256,575		12,814		4.99	%	168,887		7,705		4.56	%
Total deposits	337,750		15,440		4.57	%	236,213		9,974		4.22	%
Other borrowings	126		—		0.34	%	251		1		0.35	%
Total interest-bearing liabilities	337,876		15,440		4.57	%	236,464		9,975		4.22	%
Noninterest-bearing deposits	107,760						93,126
Noninterest-bearing liabilities	26,634						17,250
Shareholders’ equity	165,208						146,901
Total liabilities and shareholders’ equity	$	637,478					$	493,740
Net interest income and interest rate spread(2)			$	58,912	8.03	%			$	54,559	9.56	%
Net interest margin(3)					9.99	%					11.65	%
Ratio of average interest-earning assets to average interest-bearing liabilities					174.58	%					198.12	%

Net Interest Income and NIM

~~(1)~~Net ~~Loans~~interest ~~placed~~income onwas ~~nonaccrual~~the ~~status~~primary ~~are~~contributor ~~included~~to our earnings in ~~loan~~2025 ~~balances~~and 2024. 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 $13.3 million for the year ended December 31, 2025, compared to the year ended December 31, 2024 primarily due to volume increases in the loans held-for-investment and loans held-for-sale portfolios and was partially offset by increased volume in the certificates of deposit portfolio. Average interest-earning assets increased by $192.1 million for the year ended December 31, 2025 compared to the year ended December 31, 2024, while the related yield on average interest earning assets decreased by 77 basis points to 11.83%. Average interest-bearing liabilities increased by $166.4 million for the year ended December 31, 2025 compared to the year ended December 31, 2024, while the related cost of funds decreased 55 basis points to 4.02%.

NIM decreased to 9.23% for the year ended December 31, 2025 from 9.99% for the year ended December 31, 2024 primarily as a result of our increased lending to lower risk borrowers with lower yields on loans as part of our strategy to reduce average credit risk in the loan portfolio, which was offset in part by the growth in the higher yielding credit enhanced portfolio of $107.2 million.

Average Balances and Yields. The following table presents average balances for assets and liabilities, the total dollar amounts of interest income from interest-earning assets, the total dollar amounts of interest expense on interest-bearing liabilities, the resulting average yields and costs, and NIM. The yields and costs for the periods indicated are derived by dividing the annualized income or expense by the average balances for assets or liabilities, respectively, for the periods presented. The weighted average yields and rates include amortization of fees, costs, premiums and discounts, which are considered adjustments to yield/rates. Average balances have been calculated using daily averages. Loan fees are included in interest income on loans and represent net fees of approximately $2.0 million and $2.8 million for the years ended December 31, 2025 and 2024, respectively.

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	Years Ended December 31,
	2025						2024
($ in thousands)	Average Balance		Interest		Average Yield/Rate		Average Balance		Interest		Average Yield/Rate
Interest-earning assets:
Interest-bearing deposits	$	93,107	$	3,902	4.19	%	$	87,086	$	4,563	5.24	%
Investment securities	40,449		1,489		3.68	%	26,691		897		3.36	%
Loans held-for-sale	112,778		21,884		19.40	%	58,896		17,698		30.05	%
Loans held-for-investment(1)	535,671		65,203		12.17	%	417,207		51,194		12.27	%
Total interest-earning assets	782,005		92,478		11.83	%	589,880		74,352		12.60	%
Noninterest-earning assets	57,484						47,598
Total assets	$	839,489					$	637,478
Interest-bearing liabilities:
Demand	$	71,824	$	2,542	3.54	%	$	59,317	$	2,108	3.55	%
Savings	10,768		123		1.14	%	9,574		66		0.69	%
Money market accounts	20,376		763		3.75	%	12,284		452		3.68	%
Certificates of deposit	401,302		16,867		4.20	%	256,575		12,814		4.99	%
Total deposits	504,270		20,295		4.02	%	337,750		15,440		4.57	%
Other borrowings	13		—		0.05	%	126		—		0.34	%
Total interest-bearing liabilities	504,283		20,295		4.02	%	337,876		15,440		4.57	%
Noninterest-bearing deposits	125,490						107,760
Noninterest-bearing liabilities	28,055						26,634
Shareholders’ equity	181,661						165,208
Total liabilities and shareholders’ equity	$	839,489					$	637,478
Net interest income and interest rate spread(2)			$	72,183	7.80	%			$	58,912	8.03	%
Net interest margin(3)					9.23	%					9.99	%
Ratio of average interest-earning assets to average interest-bearing liabilities					155.07	%					174.58	%

(1) Loans placed on nonaccrual status are included in loan balances. See “Nonperforming Assets” below.

(2) Interest spread is the weighted average yield on interest-earning assets, less the weighted average rate incurred on interest-bearing liabilities.

(3) Net interest margin is net interest income, expressed as a percentage of average earning assets.

Rate/Volume Analysis. The following table sets forth the effects of changing rates and volumes on our net interest income based on average balances. The rate column shows the effects attributable to changes in average rate. The volume column shows the effects attributable to changes in average volume. For purposes of this table, changes attributable to changes in both average rate and average volume that cannot be segregated have been allocated proportionally based on the changes due to rate and the changes due to volume.

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shows the effects attributable to changes in average volume. For purposes of this table, changes attributable to changes in both average rate and average volume that cannot be segregated have been allocated proportionally based on the changes due to rate and the changes due to volume.


	Year Ended December 31,
	2025 vs. 2024
	Increase (Decrease) Due to Change in
($ in thousands)	Rate		Volume		Total
Interest income:
Interest-bearing deposits with the Federal Reserve, non-U.S. central banks and other banks	$	(1,010)	$	349	$	(661)
Investment securities	92		500		592
Loans held-for-sale	(2,645)		6,831		4,186
Loans held-for-investment	(407)		14,416		14,009
Total interest income	(3,970)		22,096		18,126
Interest expense:
Demand	(6)		440		434
Savings	48		9		57
Money market accounts	9		302		311
Certificates of deposit	(1,581)		5,634		4,053
Other borrowings	—		—		—
Total interest-bearing liabilities	(1,530)		6,385		4,855
Net interest income	$	(2,440)	$	15,711	$	13,271

	Years Ended December 31,
	2024						2023
	Increase (Decrease) Due to Change in						Increase (Decrease) Due to Change in
($ in thousands)	Rate		Volume		Total		Rate		Volume		Total
Interest income:
Interest-bearing deposits with the Federal Reserve, non-U.S. central banks and other banks	$	59	$	(1,247)	$	(1,188)	$	3,777	$	794	$	4,571
Investment securities	203		356		559		88		42		130
Loans held-for-sale	(2,024)		4,671		2,647		5,549		(11,735)		(6,186)
Loans held-for-investment	(4,732)		12,532		7,800		199		13,491		13,690
Total interest income	(6,494)		16,312		9,818		9,613		2,592		12,205
Interest expense:
Demand	(186)		438		252		241		1,085		1,326
Savings	6		9		15		43		1		44
Money market accounts	122		(32)		90		273		(27)		246
Certificates of deposit	788		4,321		5,109		4,858		2,069		6,927
Other borrowings	—		(1)		(1)		—		(1)		(1)
Total interest-bearing liabilities	730		4,735		5,465		5,414		3,127		8,542
Net interest income	$	(7,224)	$	11,577	$	4,353	$	4,199	$	(536)	$	3,664

Provision for Credit Losses

OnThe ~~January~~following 1,table ~~2023,~~presents the ~~Company~~components ~~adopted~~of ~~ASU 2016-13, Topic 326 which replaced~~ the ~~incurred loss methodology, allowance for loan losses, with CECL for financial instruments measured at amortized cost and other commitments to extend credit. The~~ provision for credit losses ~~is a charge to income to bring our ACL to a level deemed appropriate by management and approved by our board of directors. We determine the provision~~ for ~~credit losses monthly in connection with our evaluation of~~ the ~~adequacy~~periods of our ACL. For a description of the factors we considered in determining the ACL see Allowance for credit losses presented in Note 1 - Summary of Significant Accounting Policies included in Part II, Item 8.indicated:

Our provision for credit losses was substantially flat at $11.6 million for the years ended December 31, 2024 and 2023. Although the held-for-investment loan portfolio balances grew by $93.0 million, the growth occurred in lower risk categories, such as lease financing, residential real estate and the secured balance of SBA loans, all of which have lower expected loss factors contributing to the lower provision. In connection with our review of individual loans migrating to non-performing status for impairment, we released all or a portion of the allowance for credit losses for certain loans, which had the effect of reducing the provision for loan losses, based on strong collateral positions associated with such loans. These factors contributed to in the minimal increase in the provision for credit losses. At December 31, 2024, the Company maintained $158.7 million in loan balances that are guaranteed by the SBA compared to $131.7 million in loan balances that are guaranteed by the SBA balances as of December 31, 2023.


	Years Ended December 31,				Change
($ in thousands)	2025		2024		$		%
Provision for credit losses:
Strategic Program loans - with credit enhancement	$	23,924	$	111	$	23,813	21,453.2	%
Strategic Program loans - without credit enhancement	8,611		7,729		882		11.4	%
All other loans	5,944		3,408		2,536		74.4	%
Provision for credit losses on loans	38,479		11,248		27,231		242.1	%
Provision for unfunded commitments	94		325		(231)		(71.1)	%
Provision for credit losses	$	38,573	$	11,573	$	27,000	233.3	%

53The provision for credit losses is a charge to income to bring our ACL to a level deemed appropriate by management and approved by our board of directors. We determine the provision for credit losses monthly in connection with our evaluation of the adequacy of our ACL. For a description of the factors we considered in determining the ACL see Allowance for credit losses presented in Note 1 - Summary of Significant Accounting Policies included in Part II, Item 8.

The increase in the provision for credit losses for the year ended December 31, 2025, compared to the same period in 2024 resulted primarily from growth in the credit enhancement loan portfolio as well as higher net charge-offs resulting from the adoption of more conservative servicing and administration standards which prompted an accelerated classification of nonperforming loans and charge-offs.

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Non-interest Income

The following table presents, ~~for~~ the ~~periods indicated, the~~ major categories of non-interest income for the periods indicated:

Years EndedDecember 31,

Change

($ in thousands)

~~2024~~2025

~~2023~~2024

Non-interest income:

Strategic Program fees

1722,~~762~~024

1517,~~914~~762

14,~~848~~262

1124.60

Gain on sale of loans, net

26,~~036~~373

12,~~684~~036

~~352~~4,337

20213.90

SBA loan servicing fees, net

~~1,137~~(156)

1,~~842~~137

(~~705~~1,293)

(38113.37)

Change in fair value on investment in BFG

~~(625)~~1,300

(~~600~~625)

~~(25)~~1,925

4308.20

Credit enhancement income

~~111~~23,924

—111

~~111~~23,813

~~100~~21,453.02

Other miscellaneous income

25,~~064~~018

2,~~616~~064

~~(552)~~2,954

~~(21~~143.1)

Total non-interest income

2258,~~485~~483

2122,~~456~~485

135,~~029~~998

4160.81

The increase in total non-interest income for the year ended December 31, ~~2024~~2025, compared to the same period in ~~2023~~2024, was primarily due to ~~increased~~increases ~~fees~~in ~~associated~~credit ~~with~~enhanced ~~the~~loan balances of $107.2 million which generated higher ~~origination~~credit ~~volume~~enhancement income. Additionally, the increased sales of ~~Strategic~~the ~~Program~~guaranteed portions of SBA 7(a) loans, ~~partially~~led ~~offset~~to byan aincrease ~~decrease~~in gains on loan sales, while higher originations resulted in ~~other~~increased Strategic Program fees. Other miscellaneous income ~~due~~also toincreased, largely because of a charge in the prior year period of $0.9 million ~~charge-off~~to ofremove unamortized ~~premium~~broker onpremiums ~~approximately~~upon calling $160.0 million of callable ~~CDs~~certificates ~~which~~of ~~were~~deposits, ~~called~~an ~~during~~increase ~~the~~in ~~fourth~~dividends ~~quarter~~received offrom ~~2024~~our ~~and~~investment ~~replaced~~in ~~with~~BFG ~~lower~~of ~~cost CDs~~$0.9 ~~This~~million ~~decrease~~as ~~was~~well ~~partially~~as ~~offset~~an byincrease ain operating lease rental income of $01.50 million. ~~gain~~Offsetting onthese ~~sale~~non-interest ofincome ~~the~~increases ~~guaranteed~~in ~~portion~~part ofwas a decrease in SBA ~~loans~~loan ~~that~~servicing ~~occurred~~fees, ~~during~~net, due to an increase in the ~~fourth~~provision ~~quarter~~for ofSBA ~~2024~~servicing losses resulting from a change in assumptions used in valuing the SBA servicing asset.

Non-interest Expense

Non-interest expense has increased as we have grown and as we have expanded and modernized our operational infrastructure and continued to implement our plan to build an efficient, integrated fintech banking operation with significant capacity for growth.

The following table presents, ~~for~~ the ~~periods indicated, the~~ major categories of non-interest expense for the periods indicated:

	Years EndedDecember 31,				Change
($ in thousands)	~~2024~~2025		~~2023~~2024		$		%
Non-interest expense:
Salaries and employee benefits	$	3542,~~205~~288	$	2535,~~751~~205	$	97,~~454~~083	3620.71	%
Professional services	43,~~736~~630		4,~~961~~736		(~~225~~1,106)		(423.54)	%
Occupancy and equipment expenses	41,~~240~~877		32,~~312~~179		~~928~~(302)		28(13.09)	%
Credit enhancement expense	8		—		8		100.0	%
Credit enhancement servicing expense	1,222		1		1,221		112,134.6	%
Other operating expenses	8,646		6,540		2,106		32.2	%
Credit enhancement guarantee expense	8,533		8		8,525		111,846.3	%
Total non-interest expense	$	52,835	$	40,564	$	12,271	30.3	%
Other operating expenses	12,783		10,706		2,077		19.4	%
Total non-interest expense	$	70,333	$	52,835	$	17,498	33.1	%

The increase in total non-interest expense for the year ended December 31, ~~2024~~2025, compared to the same period in ~~2023~~2024, was primarily due to an increase in ~~salaries~~credit ~~and~~enhancement ~~employee~~program ~~benefits~~expenses ~~due~~related ~~mainly~~ to angrowth ~~increase~~ in ~~the~~credit ~~number~~enhanced ofloans ~~employees,~~and ~~expenses~~an ~~related to our~~ increase in ~~commercial~~salaries ~~operating~~and ~~lease~~employee ~~activity~~benefits asof ~~well~~which as$1.7 ~~software~~million ~~amortization,~~was ~~and~~attributable ~~other~~to ~~operating~~the ~~expenses~~amortization ~~primarily~~of ~~driven~~deferred bycompensation ~~increases~~awards inincurred ~~data~~to ~~processing~~retain ~~costs~~and ofmotivate $0our employees.8 ~~million,~~The ~~SBA~~increases ~~program~~in ~~fees~~other ~~and~~operating ~~underwriting~~expenses ~~related~~were primarily due to ~~SBA~~expenditures ~~loans~~on computer software of $01.45 million, and aoperating ~~charge~~lease ~~related~~depreciation ~~to potential bad debt expense on our program receivables~~ of $0.38 million.

~~Provision for Income Taxes~~55

The provision for income taxes totaled $4.2 million at an effective tax rate of 25.0% for the year ended December 31, 2024, compared to $6.4 million at an effective tax rate of 26.7% for the year ended December 31, 2023. The decrease in

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~~provision~~Partially ~~for~~offsetting ~~income~~these ~~taxes~~non-interest ~~from~~expense ~~the~~increases ~~prior~~was ~~year~~a ~~period~~decrease ~~was~~in professional services primarily ~~due~~resulting tofrom a reduction in ~~permanent~~contract ~~differences~~services ~~impacting~~of ~~income~~$1.0 ~~tax~~million ~~expense~~connected to the development of various programs that launched during 2025.

Provision for Income Taxes

The provision for income taxes totaled $5.7 million at an effective tax rate of 26.1% for the year ended December 31, 2025, compared to $4.2 million at an effective tax rate of 25.0% for the year ended December 31, 2024. The increase in provision for income taxes and the effective tax rate from the prior year period was principally due to an increase in the exclusion of compensation expense for highly compensated individuals and the apportionment of income between states with various tax rates.

Net Income

The ~~decrease~~increase in net income for the year ended December 31, ~~2024~~2025, compared to the same period in ~~2023~~2024, was primarily the result of the factors discussed ~~above~~in the foregoing sections.

Segment Results

As further described in Note 17, Segments, in Part I, Item 8 of this Report, during the third quarter of 2025, we implemented segment reporting following the completion of a technology initiative to capture segment-specific financial data and develop reports used by our chief operating decision maker (“CODM”) to review our financial performance and determine how to allocate resources. Our operations are comprised of three reportable segments: traditional banking, banking as a service and treasury and administration.

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, interest charged to the traditional banking and BaaS segments on funding provided to those businesses, and other items not specific to the traditional banking or BaaS segments.

For periods prior to July 1, 2025, our operations were managed and reported as a single segment, and historical financial data by segment was not maintained. Accordingly, it is not practicable to present segment information for prior periods. In the segment reporting below, a non-GAAP subtotal is shown, captioned “Income before other operating expense allocation”. That subtotal presents an income subtotal before consideration of allocated corporate expenses which might be fixed, semi-fixed or otherwise resist changes without regard to a particular line of business. The following table provides segment information for the period indicated (dollars in thousands):


	For the Year Ended December 31, 2025
	Traditional Banking		BaaS		Treasury/Other		Intersegment Eliminations(1)		Total
Interest income	$	33,438	$	53,673	$	18,611	$	(13,244)	$	92,478
Interest expense	13,992		2,957		16,590		(13,244)		20,295
Net interest income	19,446		50,716		2,021		—		72,183
Non-interest income	12,448		44,582		2,804		—		59,834
Non-interest expense:
Salaries and benefits	4,241		8,951		818		—		14,010
Other non-interest expense	5,389		14,340		346		—		20,075
Provision for credit losses	5,917		32,656		—		—		38,573
Income before other operating expense allocations	16,347		39,351		3,661		—		59,359
Other operating expense allocations	12,450		25,149		—		—		37,599
Income before taxes	3,897		14,202		3,661		—		21,760
Income tax expense	1,015		3,700		954		—		5,669
Net income	$	2,882	$	10,502	$	2,707	$	—	$	16,091

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(1) Interest income and expense are allocated to segments based on their respective funding requirements using an internal transfer pricing methodology. The treasury and administration segment earns interest income from providing funds to the traditional banking and BaaS segments, and incurs interest expense for the deposits or borrowings obtained to support the businesses. The internal interest flows are eliminated at the consolidated level through the intersegment/eliminations column.

The BaaS segment’s strong performance for the year ended December 31, 2025 underscores the success of our Strategic Program initiatives, while traditional banking continues to provide a stable business. Treasury and administration remains focused on optimizing liquidity and supporting the funding needs of our other operating segments.

Looking ahead, we expect continued growth in BaaS as we expand our fintech partnerships and product offerings. Traditional banking performance will be influenced by interest rate trends and treasury and administration will remain focused on optimizing liquidity and supporting business growth. We continue to monitor regulatory developments and market conditions that may impact segment performance.

Financial Condition

The following table summarizes selected components of our consolidated balance sheets as of December 31, ~~2024~~2025 and ~~2023~~2024.

As ofDecember 31,

Change

($ in thousands)

~~2024~~2025

~~2023~~2024

Interest-bearing deposits in other banks

99151,~~562~~318

~~116~~99,~~564~~562

~~(17~~51,~~002)~~756

~~(14~~52.6)0

Investment securities available-for-sale, at fair value

2927,~~930~~755

—29,930

29(2,~~930~~175)

~~100~~(7.03)

Investment securities held-to-maturity, net

129,~~565~~927

1512,~~388~~565

(2,~~823~~638)

(1821.30)

Strategic Program loans held-for-sale, at lower of cost or fair value

91146,~~588~~473

4791,~~514~~588

4454,~~074~~885

9259.89

Loans held-for-investment, net

~~447~~541,~~812~~551

~~358~~447,~~560~~812

8993,~~252~~739

2420.9

Total assets

~~745~~977,~~976~~135

~~586~~745,~~221~~976

~~159~~231,~~755~~159

2731.30

Deposits

~~544~~754,~~952~~561

~~404~~544,~~833~~952

~~140~~209,~~119~~609

3438.65

Total liabilities

~~572~~783,~~256~~940

~~431~~572,~~165~~256

~~141~~211,~~091~~684

3237.70

Total shareholders' equity

~~173~~193,~~720~~195

~~155~~173,~~056~~720

1819,~~664~~475

1211.02

Total equity to total assets

2319.38

2623.53

(3.25)

Interest-Bearing Deposits in Other Banks

The ~~decrease~~increase in interest-bearing deposits in other banks from December 31, ~~2024~~2025 to December 31, ~~2023~~2024, was primarily due to ~~the~~deposits ~~purchase~~received in late December from strategic partners with student loan programs in anticipation of ~~the~~increased ~~investment~~activity ~~securities~~in ~~available-for-sale~~January 2026. Aside from minimal balances held with our correspondent banks, the majority of our interest-bearing deposits are held at the Federal Reserve.

Securities

We use our securities portfolio to provide a source of liquidity, provide an appropriate return on funds invested, manage interest rate risk, meet collateral requirements and meet regulatory capital requirements.

We classify investment securities as either held-to-maturity (“HTM”) or available-for-sale (“AFS”) based on our intentions and our ability to hold such securities until maturity. In determining such classifications, securities that we have the ~~positive~~ intent and the ability to hold until maturity are classified as HTM and carried at amortized cost. All other securities are designated as AFS and carried at estimated fair value with unrealized gains and losses included in shareholders’ equity on an after-tax basis.

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The following table summarizes the weighted-average yields of our investment securities at December 31, ~~2024~~2025. The weighted average yield of investment securities was calculated using the sum of all interest that the investments generate, divided by the average book value. There are no tax-exempt securities.

	1 Year or Less		1 - 5 Years		5 - 10 Years		Over 10 Years		Total
Securities available-for-sale:
U.S. Treasuries	4.6832	%	4.1918	%	—	%	—	%	4.2319	%
Securities held-to-maturity:
Mortgage-backed securities	—	%	3.2934	%	1.3233	%	1.7380	%	1.8582	%
Collateralized mortgage obligations	—	%	3.1814	%	—	%	32.0853	%	32.0961	%
Total	4.6832	%	4.14	%	1.3233	%	2.5022	%	3.7266	%

There were no ~~calls,~~ sales or ~~maturities~~transfers of investment securities between classifications during the years ended December 31, ~~2024~~2025 and December 31, ~~2023~~2024.

At December 31, ~~2024~~2025, there were 22seventeen securities, consisting of eight collateralized mortgage obligations, ~~four U.S. Treasuries~~ and ~~ten~~nine mortgage-backed securities, in an unrealized loss position as of December 31, ~~2024~~2025 and 19twenty-two securities, consisting of ~~nine~~four U.S. Treasuries, eight collateralized mortgage obligations and ten mortgage-backed securities, in an unrealized loss position as of December 31, ~~2023~~2024.

Strategic Program Loans Held-for-Sale

We, through our Strategic Program service providers, ~~issue,~~offer ~~on a nationwide basis,~~ unsecured and secured consumer and business loans to borrowers within certain approved credit profiles nationwide. Loans originated through these programs are limited to predetermined Bank underwriting criteria, which has been approved by our board of directors. ~~The~~We ~~Company~~ generally ~~retains~~retain the loans and/or receivables for aone ~~number~~to offour business days after origination before selling the loans and/or receivables to the Strategic Program provider or another investor. Interest income is earned by ~~the~~us ~~Company~~ while holding the loans. These loans are classified as held-for-sale on the balance sheet and measured at the lower of cost or market.

Our Strategic Program loans held-for-sale increased $4454.19 million as of December 31, ~~2024~~2025 compared to December 31, ~~2023~~2024, primarily as a result of greater hold periods for new originations for certain programs and a higher level of originations in ~~the~~2025 ~~fourth quarter of 2024~~ compared to ~~the same period in 2023~~2024.

Loans Held-for-Investment Portfolio

Through our diversification efforts we have built a portfolio that we believe positions us to withstand economic shifts. For example, we focus on industries and loan types that have historically lower loss rates such as professional, scientific and technical services (including law firms), non-store retailers (e-commerce), and ambulatory healthcare services.

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The following table summarizes our gross loan portfolio held-for-investment by loan program as of the periods indicated:

	As of December 31,
	2024				2023
	2025				2024
($ in thousands)	Amount		% oftotalloans		Amount		% oftotalloans
SBA(1)	$	~~255~~205,~~056~~615	5435.81	%	$	~~239~~255,~~922~~056	6454.58	%
Commercial leases	7078,~~153~~743		1513.14	%	3870,~~110~~153		1015.21	%
Commercial, non real estate	34,~~691~~201		0.87	%	23,~~457~~691		0.78	%
Residential real estate	5159,~~574~~602		1110.12	%	3851,~~123~~574		1011.21	%
Strategic Program loans	20,122		4.3	%	19,408		5.2	%
Strategic Program loans:
Strategic Program loans - with credit enhancement	108,131		18.5	%	891		0.2	%
Strategic Program loans - without credit enhancement	21,637		3.7	%	19,231		4.1	%
Commercial real estate:
Owner occupied	4184,~~046~~016		814.83	%	2041,~~798~~046		58.68	%
Non-owner occupied	1,~~379~~638		0.3	%	21,~~025~~379		0.53	%
Consumer	2221,~~212~~926		43.8	%	1122,~~372~~212		34.18	%
Total loans held-for-investment, gross	$	~~465~~585,~~233~~509	100.0	%	$	~~372~~465,~~215~~233	100.0	%

(1)SBA loans as of December 31, ~~2024~~2025 and December 31, ~~2023~~2024 include $~~158~~102.7 million and $~~131~~158.7 million, respectively, of SBA 7(a) loan balances that are guaranteed by the SBA.

We manage our loan portfolio based on factors that include concentrations per loan program and aggregated portfolio, industry of operation and geographies. We also monitor the impact of identified and estimated losses on capital as well as the pricing characteristics of each product. The following provides a general description and the risk characteristics relevant to each of ~~the~~our loan products. Each loan is assigned a risk grade during the origination and closing process by credit administration personnel based on criteria described later in this section. We analyze the resulting ratings, as well as other external statistics and factors such as delinquency, to track the migration performance of the portfolio balances. This ratings analysis is performed at least quarterly.

SBA ~~loans~~

We originate and service loans partially guaranteed by the SBA under its Section 7(a) loan program for small businesses and professionals throughout the ~~USA~~United States. Through our diversification efforts, we have built an SBA 7(a) portfolio that we believe positions us to better withstand economic shifts. For example, we focus on industries such as non-store retailers (e-commerce), ambulatory healthcare services, professional, scientific and technical services (including law firms), and merchant wholesalers.

As of December 31, ~~2024~~2025 and December 31, ~~2023~~2024, we had total SBA 7(a) loans of $~~255~~205.16 million and $~~239~~255.91 million, respectively, representing 5435.81% and 6454.58% of our total loans held-for-investment, respectively. Loans are sourced primarily through our referral relationship with BFG. Although BFG actively markets throughout the ~~USA~~United States, ~~because of its physical location in the New York area~~ 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 $5.0 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. 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.~~

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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.

Commercial leases

As of December 31, ~~2024~~2025 and December 31, ~~2023~~2024, we had total commercial leases of $7078.27 million and $3870.12 million, respectively, representing 1513.14% and 1015.21% of our total loans held-for-investment, respectively. Underwriting for smaller credit requests is generally scorecard-based. 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 our 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.

Commercial, non-real estate

Commercial non-real estate loans consist of loans and leases made to commercial enterprises that are not secured by real estate. As of December 31, ~~2024~~2025 and December 31, ~~2023~~2024, we had total commercial non-real estate loans of $34.72 million and $23.57 million, respectively, representing 0.87% and 0.78% 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.

Residential real estate

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 December 31, ~~2024~~2025 and December 31, ~~2023~~2024, we had total residential real estate loans of $5159.6 million and $3851.16 million, respectively, representing 1110.12% and 1011.21% 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 ~~not only~~ the ~~borrower’s~~general ~~financial~~market ~~condition~~conditions ~~and~~associated ~~ability~~with ~~to meet~~ the ~~required~~area ~~debt~~and ~~obligations,~~type ~~but~~of ~~also~~project ~~the~~being ~~general~~funded ~~market~~in ~~conditions~~addition ~~associated~~to ~~with~~ the ~~area~~borrower’s financial condition and ~~type~~ability ofto ~~project~~meet ~~being~~the ~~funded~~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 ~~sheet~~sheets for investment.

Strategic Program loans

~~We,~~Through ~~through~~ our Strategic Program service providers, we issue, ~~on a nationwide basis,~~ 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 December 31, 2024 and December 31, 2023, we had total Strategic Program loans held-for-investment of $20.1 million and $19.4 million, respectively, representing 4.3% and 5.2% of our total loans held-for-investment, respectively. Loans originated through ~~these~~the ~~programs~~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.

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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.

Strategic Program loans with credit enhancement

The Strategic Program loans with credit enhancement are distinct from our traditional loan portfolio in that the sponsoring fintech company guarantees the credit and fraud losses associated with these loans. Credit enhanced Strategic Program loans totaled $108.1 million and $0.9 million as of December 31, 2025 and 2024, representing 18.5% and 0.2% of our total loans held-for-investment, respectively. This significant increase reflects the expansion of the credit enhanced program and its impact on our balance sheet. The Reconciliations of Non-GAAP Financial Measures section of this report below further details the impact of the credit enhancement program on our allowance for credit losses and related non-GAAP financial measures.

Strategic Program loans without credit enhancement

Strategic Program loans without credit enhancement totaled $21.6 million and $19.2 million as of December 31, 2025 and December 31, 2024, representing 3.7% and 4.1% of our total loans held-for-investment, respectively. Unlike the credit enhanced loans, these non-credit enhanced loans do not benefit from a third-party guarantee or indemnification of credit and fraud losses by the Strategic Program service provider. As a result, the Bank retains the full credit and fraud losses associated with these loans, and they are subject to our standard credit risk management, monitoring, and allowance for credit losses under the CECL model. The accounting for non-credit enhanced Strategic Program loans is consistent with our other held-for-investment loan portfolios. While the non-credit enhanced Strategic Program loans represent a smaller portion of our overall loan portfolio, they provide additional diversification and support our broader fintech strategy.

Commercial real estate

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 December 31, ~~2024~~2025 and December 31, ~~2023~~2024, we had total commercial real estate loans of $4285.47 million and $2242.84 million, respectively, representing 914.16% and 69.1% of our total loans held-for-investment, respectively. Of these amounts, $4184.0 million and $2041.80 million represented owner occupied properties as of December 31, ~~2024~~2025 and December 31, ~~2023~~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.

Consumer

Consumer lending provides financing for personal, family, or household purposes on a nationwide basis. Most of these loans are originated through our ~~POS~~loan origination system platform and come from a variety of sources, including other approved merchant or dealer relationships and lending platforms. As of December 31, ~~2024~~2025 and December 31, ~~2023~~2024, we had total consumer loans of $2221.29 million and $1122.42 million, respectively, representing 43.8% and 34.18% 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, ~~they~~these loans are underwritten as if they were unsecured. On larger loans, we may file a Uniform Commercial Code financing form. Historically, we have retained these loans on our balance sheet for investment.

~~Loan Maturity~~61

As of December 31, 2024, $279.8 million, or 60.1%, of the total held-for-investment loan balance matures in less than five years. Loans maturing in greater than five years totaled $185.4 million as of December 31, 2024. The variable rate portion of our total held-for-investment loan portfolio at December 31, 2024 was $329.7 million or 70.9%. The variable rate portion of the total held-for-investment loans reflects our strategy of limiting interest rate risk through the use of variable rate products.

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~~The~~Loan ~~following table details the contractual maturity ranges of loans in our loan portfolio and the amount of such loans with fixed and variable rates in each maturity range as of December 31, 2024:~~Maturity

As of December 31, 2024	Remaining Contractual Maturity Held-for-Investment
($ in thousands)	One Yearor Less		AfterOneYear andThroughFiveYears		After FiveYears andThroughFifteenYears		AfterFifteenYears		Total
Fixed rate loans:
SBA	$	529	$	1,236	$	2,367	$	1,354	$	5,486
Commercial leases	18,744		48,984		2,425		—		70,153
Commercial, non-real estate	772		2,332		587		—		3,691
Residential real estate	7,079		3,031		39		—		10,149
Strategic Program loans	15,041		4,605		444		—		20,090
Commercial real estate
Owner occupied	1,883		494		—		—		2,377
Non-owner occupied	133		426		764		56		1,379
Consumer	5,925		15,102		1,185		—		22,212
Subtotal fixed rate loans	50,106		76,210		7,811		1,410		135,537
Variable rate loans:
SBA	19,435		76,944		106,457		46,734		249,570
Commercial leases	—		—		—		—		—
Commercial, non-real estate	—		—		—		—		—
Residential real estate	38,140		1,830		1,455		—		41,425
Strategic Program loans	2		10		20		—		32
Commercial real estate
Owner occupied	3,587		13,557		17,741		3,784		38,669
Non-owner occupied	—		—		—		—		—
Consumer	—		—		—		—		—
Subtotal variable rate loans	61,164		92,341		125,673		50,518		329,696
Total	$	111,270	$	168,551	$	133,484	$	51,928	$	465,233

The following table details the contractual maturity ranges of loans in our loan portfolio and the amount of such loans with fixed and variable rates in each maturity range as of December 31, 2025:


As of December 31, 2025	Remaining Contractual Maturity Held-for-Investment
($ in thousands)	One Year or Less		After One Year and Through Five Years		After Five Years and Through Fifteen Years		After Fifteen Years		Total
Fixed rate loans:
SBA	$	355	$	1,420	$	2,783	$	1,316	$	5,874
Commercial leases	23,825		54,135		782		—		78,742
Commercial, non-real estate	999		2,937		265		—		4,201
Residential real estate	6,838		6,156		—		—		12,994
Strategic Program loans	120,226		9,518		23		1		129,768
Commercial real estate
Owner occupied	2,257		4,766		—		—		7,023
Non-owner occupied	177		485		924		52		1,638
Consumer	6,153		14,172		1,599		—		21,924
Subtotal fixed rate loans	160,830		93,589		6,376		1,369		262,164

Variable rate loans:
SBA	16,433		64,757		81,566		36,985		199,741
Commercial leases	—		—		—		—		—
Commercial, non-real estate	—		—		—		—		—
Residential real estate	42,218		2,742		1,648		—		46,608
Strategic Program loans	—		—		—		—		—
Commercial real estate
Owner occupied	8,185		32,445		33,888		2,475		76,993
Non-owner occupied	—		—		—		—		—
Consumer	3		—		—		—		3
Subtotal variable rate loans	66,839		99,944		117,102		39,460		323,345
Total	$	227,669	$	193,533	$	123,478	$	40,829	$	585,509

Nonperforming Assets

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were contractually due. Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on nonaccrual status regardless of whether such loans are actually past due. In general, we place loans on nonaccrual status when they become 90 days past due unless they are both well secured and in the process of collection. We also ~~generally~~ place loans on nonaccrual status if they are less than 90 days past due if the collection of principal or interest is in doubt. When interest accrual is discontinued, all unpaid accrued interest is reversed from income. Interest income is subsequently recognized only to the extent recoveries received (either from payments received from the customer, derived from the disposition of collateral or from legal action, such as judgment enforcement) exceed liquidation expenses incurred and outstanding principal.

A nonaccrual asset may be restored to accrual status when (1) none of its principal and interest is due and unpaid, and we expect repayment of the remaining contractual principal and interest, or (2) when asset otherwise becomes well secured and is not in the process of collection.62

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~~Any~~A ~~loan~~nonaccrual ~~which~~asset wemay ~~deem to~~ be ~~uncollectible,~~restored ~~in whole or in part, is charged off~~ to ~~the~~accrual ~~extent~~status ofwhen ~~the~~(1) ~~anticipated~~none ~~loss. In general, commercial loans that are past due for 90 days or more are charged off unless the loan is both well secured and in the process~~ of ~~collection.~~its ~~Consumer~~principal ~~loans~~ and ~~credit~~interest ~~card~~is ~~balances~~due ~~are charged off at 120 days~~ and ~~180 days~~unpaid, ~~respectively. We believe our disciplined lending approach~~ and ~~focused~~we ~~management~~expect ofrepayment ~~nonperforming assets has resulted in sound asset quality and timely resolution~~ of ~~problem assets. We have several procedures in place to assist us in maintaining~~ the ~~overall~~remaining ~~quality~~contractual ofprincipal ~~our~~and ~~loan portfolio. We have established underwriting guidelines to be followed by our loan officers~~interest, ~~and we also monitor our delinquency levels for any negative~~ or ~~adverse~~(2) ~~trends.~~when ~~There~~asset ~~can~~otherwise bebecomes nowell ~~assurance,~~secured ~~however,~~and ~~that~~is ~~our loan portfolio will~~ not ~~become~~in ~~subject~~the toprocess ~~increasing~~of ~~pressures from deteriorating borrower credit due to general economic conditions~~collection.

WeAny ~~had~~loan, aor ~~total~~portion of ~~$36.5~~a ~~million in nonperforming assets~~loan, which ~~included~~we ~~$0.8~~deem ~~million~~to inbe ~~material~~uncollectible ~~loan~~is ~~modifications~~charged atoff ~~December 31,~~to ~~2024.~~the ~~The~~extent ~~amount~~ of ~~nonperforming~~the ~~assets~~anticipated asloss. ofIn ~~December 31~~general, ~~2024~~the ~~includes~~reported ~~$19.2~~balance ~~million~~ of ~~SBA~~commercial ~~7(a)~~loans ~~loan balances~~ that are ~~guaranteed~~past bydue ~~the~~for ~~SBA.~~90 Wedays ~~had~~or ~~$27.1~~more ~~million~~are inreduced ~~nonperforming~~to ~~assets,~~the ~~which~~estimated ~~included~~net $0realizable value.5 ~~million~~Consumer inloans ~~material~~and ~~loan~~credit ~~modifications~~card atbalances ~~December 31,~~are ~~2023.~~charged ~~The~~off ~~amount~~at ofno ~~nonperforming~~later ~~assets~~than as120 ofdays ~~December 31,~~and ~~2023~~180 ~~includes~~days, ~~$15~~respectively.0 ~~million~~We ofbelieve ~~SBA~~our ~~7(a)~~disciplined ~~loan~~lending ~~balances~~approach ~~that~~and ~~are~~focused ~~guaranteed~~management byof ~~the~~nonperforming ~~SBA.~~assets ~~The~~has ~~increase~~resulted in ~~nonperforming~~sound ~~assets~~asset quality and ~~material~~timely ~~loan~~resolution ~~modifications~~of ~~from~~problem ~~the~~assets. ~~prior~~We ~~period~~have ~~was~~several ~~primarily~~procedures ~~attributable~~in place to ~~multiple~~assist ~~loans~~us in maintaining the ~~SBA~~overall ~~7(a)~~quality of our loan portfolio. ~~moving~~We tohave ~~nonperforming~~established ~~status.~~underwriting ~~Due~~guidelines to ~~elevated~~be ~~interest~~followed ~~rates~~by our loan officers, ~~the~~and ~~slowdown~~we ofalso ~~consumer~~monitor ~~spending~~our ~~and~~delinquency ~~the~~levels ~~variable~~for ~~rate~~any ~~nature~~negative ofor adverse trends. There can be no assurance, however, that our ~~SBA~~loan portfolio, ~~the~~will ~~risk~~not ofbecome ~~default~~subject isto ~~elevated~~increasing ~~and~~pressures ~~may~~from ~~result~~deteriorating inborrower ~~additional~~credit ~~delinquencies~~due into ~~future~~general ~~periods~~economic conditions.

~~Our~~We ~~Strategic~~had ~~Program~~a ~~service~~total ~~providers~~of ~~also~~$43.7 ~~provide~~million ~~for~~in nonperforming assets, which included $0.5 million in material loan modifications, toat ~~borrowers~~December 31, 2025. AsThe amount of nonperforming assets as of December 31, 2025 includes $24.2 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. ~~and~~The ~~2023~~amount of nonperforming assets as of December 31, ~~the~~2024 ~~balance~~includes $19.2 million of ~~outstanding~~SBA ~~modified~~7(a) ~~loans~~loan balances that are guaranteed by the SBA. The increase in nonperforming assets and material loan modifications from the prior year was primarily attributable to ~~individuals~~the increase in the ~~Strategic~~SBA ~~Program~~7(a) ~~retained~~loan portfolio ~~was~~being ~~approximately~~classified $4as nonaccrual mainly due to the negative impact of sustained elevated interest rates on our small business borrowers.4 ~~million~~Due to elevated interest rates, the slowdown of consumer spending and ~~$4.5~~the ~~million~~variable rate nature of our SBA portfolio, ~~respectively~~the risk of default has become and continues to be elevated and may result in additional delinquencies in future periods.

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 immediately to borrower contact and optimize collections. As of December 31, 2025 and 2024, the balance of outstanding loan modifications was approximately $0.2 million and $4.4 million, respectively.

Credit Risk Profile

We believe that we underwrite loans carefully and thoroughly, limiting our lending activities to those products and services where we have the resources and expertise to lend profitably without undue credit risk. We require all loans to conform to ~~policy~~our underwriting policies (or otherwise be identified as exceptions to policy and monitored and reported on, at minimum, quarterly) and be granted on a sound basis. Loans are made with a primary emphasis on loan profitability, credit risk and concentration exposures.

We are proactive in our approach to identifying and resolving problem loans and are focused on working with the borrowers and guarantors of problem loans to provide loan modifications when warranted. When considering how to best diversify our loan portfolio, we consider several factors including our aggregate and product-line specific concentration risks, our business line expertise, and the ability of our infrastructure to appropriately support the product. While certain product lines generate higher net charge-offs, our exposure is carefully monitored and mitigated by our concentration policies and reserved for by the ~~loan~~credit loss allowance we maintain. Specifically, retention of certain Strategic Program loans with higher default rates accounts for a disproportionate amount of our charge-offs. In addition to our oversight of the credit policies and processes associated with these programs, we limit within our concentration policies the aggregate exposure of these loans as a percentage of the total loan portfolio, carefully monitor certain vintage loss-indicative factors such as first payment default and marketing channels, and appropriately provision for these balances so that the cumulative charge-off rates remain consistent with management expectations. While the level of nonperforming assets fluctuates in response to changing economic and market conditions, the relative size and composition of the loan portfolio, and our management’s degree of success in resolving problem assets, we believe our proactive stance to early identification and intervention is the key to successfully managing our loan portfolio.

Accurate and timely loan risk grading is considered a critical component of an effective credit risk management system. Loan grades take into consideration the borrower’s financial condition, industry trends, and the economic environment. Loan risk grades are changed as necessary to reflect the risk inherent in the loan. Among other things, we use loan risk grading information for loan pricing, risk and collection management and determining credit loss reserve adequacy. Further, on a quarterly basis, the Loan Committee holds a Loan Risk Grade meeting, ~~wherein~~to review all loans in our portfolio ~~are reviewed~~ for accurate risk grading. Any required changes ~~are made after the Loan Risk Grade meeting~~ to ~~provide for accurate reporting. Reporting is achieved in Loan Committee minutes, which minutes are reviewed by~~ the ~~Board. We supplement credit department supervision of the~~ loan ~~underwriting, approval, closing, servicing and~~ risk grading ~~process~~are ~~with~~made ~~periodic~~after ~~loan~~the ~~reviews~~Loan byRisk ~~risk~~Grade ~~department~~meeting ~~personnel specific~~ to ~~the~~provide ~~testing of controls.~~

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~~documentation,~~for ~~among~~accurate ~~other factors~~reporting. ~~The~~Reporting ~~following~~is ~~guidelines~~achieved ~~govern~~in ~~the~~Loan ~~assignment~~Committee ofminutes, ~~these~~which ~~risk~~minutes ~~grades.~~are Wereviewed doby ~~not~~the ~~currently~~Board. ~~grade~~We ~~Strategic~~supplement ~~Program~~credit ~~loans~~department ~~held~~supervision ~~for~~of ~~investment~~the ~~due~~loan tounderwriting, ~~their~~approval, ~~small~~closing, ~~balances~~servicing and ~~homogenous~~risk ~~nature.~~grading Asprocess ~~credit~~with ~~quality~~periodic ~~for~~loan ~~Strategic~~reviews ~~Program~~by ~~loans~~risk ~~have~~department ~~been~~personnel ~~highly~~specific ~~correlated~~to ~~with delinquency levels,~~ the ~~Strategic~~testing ~~Program~~of ~~loans are evaluated collectively for impairment~~controls.

We use a grading system to rank the quality of each loan. The grade is periodically evaluated and adjusted as performance dictates. Internal loan grades are based on current financial information, historical payment experience, and credit documentation, among other factors. The following guidelines govern the assignment of these risk grades. We do not currently grade Strategic Program loans held-for-investment due to their small balances and similar characteristics. As credit quality for Strategic Program loans have been highly correlated with delinquency levels, the Strategic Program loans are evaluated collectively for impairment.

Pass - A Pass asset is higher quality and does not fit any of the other categories described below. The likelihood of loss is believed to be remote.

Watch – A Watch asset may be a larger loan or one that places a heavier reliance on collateral due to the relative financial strength of the borrower. The assets may be maintenance intensive requiring closer monitoring. The obligor is believed to have an adequate primary source of repayment. New loans pursuant to the SBA 7(a) program are classified as watch loans until they have a demonstrated period of satisfactory performance, typically 18 months.

Special Mention – A Special Mention asset has potential weaknesses that may be temporary or, if left uncorrected, may result in a loss. While concerns exist, we believe that it is currently protected against a default and loss is considered unlikely and not imminent.

Substandard – A Substandard asset is believed to be inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified have identified weaknesses and are characterized by the possibility that we may sustain some loss if deficiencies are not corrected.

Doubtful - A doubtful asset has an existing weakness or weaknesses that make collection or liquidation in full, on the basis of currently existing facts and conditions, highly questionable and improbable.

Loss - A loss asset has an existing weakness or weaknesses that render the loan uncollectible and of such little value that continuing to carry as an asset on our books is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather it is not practical nor desirable to defer writing off this basically worthless asset, even though partial recovery may be affected in the future.

Not Rated - For certain Strategic Program and consumer loans, we do not evaluate and risk rate the loans in the same manner as other loans in our portfolio. The Not Rated loans are typically homogenous, smaller dollar balances approved using abridged underwriting methods that allow us to streamline the loan approval process and increase efficiency. Credit quality for Strategic Program loans has been highly correlated with delinquency levels.

See Note 3 - Loans to the consolidated financial statements included in Part II, Item 8 for more information on the credit quality of our loans held-for-investment (“LHFI”) portfolio.

Allowance for Credit Losses

We adopted Financial Accounting Standards Board Accounting Standards Update No. 2016–13, Financial Instruments – Credit Losses (Topic 326), commonly referred to as the “CECL model,” on January 1, 2023.

The estimate of credit loss incorporates assumptions for both the likelihood and amount of funding over the estimated life of the commitments, including adjustments for current conditions and reasonable and supportable forecasts. Management periodically reviews and updates its assumptions for estimated funding rates. Our judgment in determining the adequacy of the allowance is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available and as situations and information change. We evaluate the ACL on at least a quarterly basis and take into consideration such factors as changes in the nature and volume of the loan portfolio, overall portfolio quality, review of specific problem loans and current economic conditions and trends that may affect the borrower’s ability to repay. The quality of the loan portfolio and the adequacy of the ACL is reviewed by regulatory examinations and our auditors.

Credit losses are charged against the ACL when we believe that the collectability of the principal loan balance is unlikely. Subsequent recoveries, if any, are credited to the ACL when received. The amortized cost basis of loans does not include accrued interest receivable, which is included in accrued interest receivable on the Consolidated Balance Sheets. The provision for credit losses on the Consolidated Statements of Income is a combination of the provision for credit losses and the provision for unfunded loan commitments.

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The following tables present a summary of changes in the ACL for the periods indicated:

	Year Ended December 31,
($ in thousands)	~~2024~~2025		~~2023~~2024
ACL:
Beginning balance	$	1213,~~888~~176	$	1112,~~985~~888
Impact of ASU 2016-13 adoption(1)	—		257
Provision for credit losses	38,479		11,248
Adjusted beginning balance	12,888		12,242
Provision for loan losses	11,248		11,525
Charge-offs
Construction and land development	—		—
Residential real estate	(~~297~~954)		(~~225~~297)
Residential real estate multifamily	—		—
Commercial real estate
Owner occupied	(1,~~039~~832)		(~~714~~1,039)
Non-owner occupied	~~(221)~~—		—(221)
Commercial and industrial	(~~889~~933)		(~~472~~889)
Consumer	(~~134~~559)		(68134)
Commercial leases	(~~293~~294)		—(293)
Strategic Program loans	(911,~~796~~841)		(109,~~946~~796)
Recoveries
Construction and land development	—		—
Residential real estate	6511		9065
Residential real estate multifamily	—		—
Commercial real estate
Owner occupied	~~334~~153		1334
Non-owner occupied	—		~~378~~—
Commercial and industrial	1715		2117
Consumer	618		26
Commercial leases	9229		—92
Strategic Program loans	1,~~195~~328		1,~~054~~195
Ending balance	$	1336,~~176~~796	$	1213,~~888~~176

~~(1)~~The ~~ASU~~following ~~2016~~table shows the allocation of the ACL and the percentage of loans in each category to total loans as of December 31, 2025, and 2024. The ACL related to Strategic Programs constitutes 77.0% and 47.8% of the total ACL while comprising 22.2% and 4.3%, respectively, of total loans held-13for-investment ~~(CECL)~~as ~~was~~of ~~adopted~~December 31, ~~January~~2025 1and 2024, ~~2023~~respectively. The percentage of ACL related to Strategic Program loans retained reflects the increased credit risks associated with certain retained Strategic Program loans.

The following tables show the allocation of the ACL as of December 31, 2024, and 2023. The ACL related to Strategic Programs constitutes 47.8% and 54.8% of the total ACL while comprising 4.3% and 5.2%, respectively, of total loans held-for-investment as of December 31, 2024 and 2023, respectively. The percentage of ACL related to Strategic Program loans retained reflects the increased credit risks associated with certain retained Strategic Program loans.65

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	December 31, 2024
	December 31, 2025				December 31, 2024
($ in thousands)	Amount		%Percent ~~ofTotalAllowance~~of Loans in Category to Total Loans		Amount		Percent of Loans in Category to Total Loans
Construction and land development	$	~~374~~970	2.8.4	%	$	374	9.1	%
Residential real estate	~~788~~777		69.06	%	788		13.2	%
Residential real estate multifamily	3862		0.35	%	38		0.4	%
Commercial real estate
Owner occupied	23,~~834~~267		2136.50	%	2,834		40.9	%
Non-owner occupied	~~113~~104		01.96	%	113		2.8	%
Commercial and industrial	~~700~~773		54.35	%	700		9.5	%
Consumer	~~638~~679		43.87	%	638		4.8	%
Commercial leases	1,~~387~~838		1013.5	%	1,387		15.0	%
Strategic Program loans	6,304		47.8	%
Strategic Program loans:
Total	$	13,176	100.0	%
Strategic Program loans - with credit enhancement	22,396		18.5	%	111		0.2	%
Strategic Program loans - without credit enhancement	5,930		3.7	%	6,193		4.1	%
Total	$	36,796	100.0	%	$	13,176	100.0	%

	December 31, 2023
($ in thousands)	Amount		% ofTotalAllowance
Construction and land development	$	316	2.5	%
Residential real estate	956		7.4	%
Residential real estate multifamily	6		—	%
Commercial real estate
Owner occupied	3,336		25.9	%
Non-owner occupied	282		2.2	%
Commercial and industrial	361		2.8	%
Consumer	211		1.6	%
Commercial leases	355		2.8	%
Strategic Program loans	7,065		54.8	%
Total	$	12,888	100.0	%

The following table reflects the ratios of the ACL to total LHFI, nonaccrual loans to total LHFI, and the ACL to nonaccrual loans by CECL loan category as of December 31, 2025:

The following table reflects the ratios of the ACL to total LHFI, nonaccrual loans to total loans held-for-investment, and the ACL to nonaccrual loans by CECL loan category as of December 31, 2024.


	ACL to Total LHFI		Nonaccrual loans to Total LHFI		ACL to Nonaccrual loans
Construction and land development	2.0	%	4.7	%	42.4	%
Residential real estate	1.4	%	19.9	%	6.9	%
Residential real estate multifamily	2.0	%	—	%	—	%
Commercial real estate
Owner occupied	1.6	%	11.3	%	13.7	%
Non-owner occupied	1.1	%	28.8	%	3.8	%
Commercial and industrial	2.9	%	8.6	%	34.4	%
Consumer	3.1	%	0.2	%	1,297.1	%
Commercial leases	2.3	%	1.1	%	214.0	%
Strategic Program loans	21.8	%	—	%	—	%
Total	6.3	%	7.4	%	85.1	%

	ACL to TotalLHFI		Nonaccrual loansto Total LHFI		ACL toNonaccrual loans
Construction and land development	0.9	%	—	%	—	%
Residential real estate	1.3	%	11.8	%	10.9	%
Residential real estate multifamily	2.3	%	—	%	—	%
Commercial real estate
Owner occupied	1.5	%	12.4	%	12.0	%
Non-owner occupied	0.9	%	21.8	%	4.1	%
Commercial and industrial	1.6	%	4.0	%	39.2	%
Consumer	2.9	%	—	%	—	%
Commercial leases	2.0	%	0.5	%	385.4	%
Strategic Program loans	31.3	%	—	%	—	%
Total	2.8	%	7.7	%	36.9	%

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The following table reflects the ratios of the ACL to total LHFI, nonaccrual loans to total ~~loans held-for-investment~~LHFI, and the ACL to nonaccrual loans by CECL loan category as of December 31, ~~2023.~~2024:

($ in thousands)	ACL toTotal LHFI		Nonaccrualto Total LHFI		ACL toNonaccrual loans
Construction and land development	10.19	%	—	%	—	%
Residential real estate	1.93	%	311.18	%	6010.39	%
Residential real estate multifamily	12.03	%	—	%	—	%
Commercial real estate
Owner occupied	1.85	%	1112.64	%	1512.40	%
Non-owner occupied	10.89	%	1521.48	%	124.01	%
Commercial and industrial	1.76	%	14.30	%	~~128~~39.2	%
Consumer	12.9	%	—	%	—	%
Commercial leases	02.90	%	—0.5	%	—385.4	%
Strategic Program loans	3631.43	%	—	%	—	%
Total	32.58	%	7.07	%	4936.89	%

When comparing December 31, ~~2024~~2025 to December 31, ~~2023~~2024, the ~~decrease~~increase in ACL to total LHFI aswas ~~well~~primarily asdue to the ~~decrease~~growth in ~~ACL~~the tocredit ~~total~~enhanced ~~nonaccrual~~ loans ~~was~~included ~~primarily~~in ~~due to~~ the ~~shifting~~Strategic ofProgram ~~SBA~~ loans ~~from~~held-for-investment. ~~the~~The ~~collectively~~decrease ~~assessed~~in ~~population~~nonaccrual loans to ~~the~~total ~~individually~~loans ~~assessed~~held-for-investment ~~population~~from ~~where~~December 31, ~~the~~2024 ~~loans~~to ~~are~~December 31, ~~assessed~~2025 ~~based~~was onprimarily ~~the~~due ~~net~~to ~~realizable~~the ~~value~~growth ofin the ~~collateral~~loans held-for-investment portfolio. The increase in ~~nonaccrual~~the ~~loans~~ACL to ~~total~~nonaccrual loans ~~held-for-investment~~ratio ~~from~~as ~~December 31,~~shown ~~2023~~above primarily pertained to ~~December 31,~~growth ~~2024~~in ~~was~~the ~~primarily~~credit ~~related~~enhanced toloans ~~SBA~~included in the Strategic Program loans ~~that~~held-for-investment ~~were~~offset ~~moved~~in topart by the increase in nonaccrual ~~status~~loans, ~~during~~concentrated ~~2024~~in the SBA product.

The following table summarizes net charge-offs (“NCO”), average loans and the ratio of NCO to average loans for the periods indicated:

	Years Ended
	December 31, 2024						December 31, 2023
	December 31, 2025						December 31, 2024
($ in thousands)	NetCharge-Offs (Recoveries)		AverageLoans		NCO (Recovery) toAverageLoans		NetCharge-Offs (Recoveries)		AverageLoans		NCO (Recovery) toAverageLoans
Construction and land development	$	—	$	3148,~~558~~971	—	%	$	—	$	2731,~~074~~558	—	%
Residential real estate	~~232~~943		5459,~~964~~933		01.46	%	~~135~~232		3854,~~211~~964		0.4	%
Residential real estate multifamily	—		12,~~219~~231		—	%	—		~~545~~1,219		—	%
Commercial real estate
Owner occupied	~~705~~1,679		~~190~~222,~~214~~584		0.48	%	~~713~~705		~~157~~190,~~489~~214		0.54	%
Non-owner occupied	~~221~~—		1611,~~407~~936		~~1.3~~—	%	~~(378)~~221		1116,~~972~~407		(31.2)3	%
Commercial and industrial	~~872~~918		3140,~~065~~826		2.82	%	~~451~~872		1731,~~638~~065		2.68	%
Consumer	~~128~~541		1623,~~478~~886		02.83	%	66128		616,~~558~~478		1.0.8	%
Lease financing receivables	~~201~~265		5643,~~675~~410		0.46	%	—201		2356,~~163~~675		—0.4	%
Strategic Program loans	810,~~601~~513		1881,~~627~~894		4612.28	%	98,~~892~~601		2118,~~134~~627		46.82	%
Total	$	1014,~~960~~859	$	~~417~~535,~~207~~671	2.68	%	$	10,~~879~~960	$	~~303~~417,~~784~~207	32.6	%

The ratio of net charge-offs to average loans outstanding by loan category ~~was~~increased ~~lower~~slightly during the year ended December 31, ~~2024~~2025 as compared to the year ended December 31, ~~2023~~2024, due primarily to ~~the~~a ~~increase~~higher ingrowth ~~our~~rate ~~average loans held-for-investment balances. The decrease~~ in the ~~ratio~~average ~~for~~balances of Strategic ~~Programs~~Program loans ~~was~~related ~~primarily due~~ to ~~a reduction in~~ the ~~average~~credit ~~loan~~enhanced ~~balances~~program aswhen ~~well~~compared asto athe ~~reduction~~growth inrate of net charge-offs ~~during~~in ~~the~~that ~~year ended December 31, 2024~~program.

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Total Assets

Total assets at December 31, ~~2024~~2025 were $~~746~~977.01 million, an increase of $~~159~~231.82 million from December 31, ~~2023~~2024. The increase in total assets was due primarily to increases in loans ~~receivable~~held-for-investment, net, of $8993.37 million, Strategic Program loans held-for-sale of $4454.19 million, ~~and~~interest-bearing ~~investment~~cash ~~securities~~deposits ~~available-for-sale~~ of $2951.98 million., ~~These~~and ~~increases~~credit ~~were~~enhancement ~~partially~~asset ~~offset by a decrease in interest-bearing deposits in other banks~~ of $722.83 million. ~~These~~The ~~changes~~increased ~~were~~loan balances are generally consistent with our strategy to grow ~~assets~~the inloan ~~lower~~portfolio ~~risk~~with ~~revenue~~higher ~~producing~~quality ~~products~~lower risk assets.

Deposits

Deposits are the major source of funding for us. We offer a variety of deposit products including interest and noninterest bearing demand accounts, HSA demand deposits, money market and savings accounts and certificates of deposit, all of which we market at competitive pricing. We generate deposits from our customers on a relationship basis and through access to national institutional and brokered deposit sources. We also generate deposits in relation to our Strategic Programs in the form of reserve accounts as discussed above. These deposits add an element of flexibility in that they tend to increase or decrease in relation to the size of orour Strategic Program loan portfolio. In addition to the reserve account, some Strategic Program loan originators maintain operating deposit accounts with us.

The following ~~tables~~table ~~present~~presents the end of period ~~and average~~ balances of our deposit portfolio for the periods indicated ~~(average balances have been calculated using daily averages)~~:

	December 31, 2024				December 31, 2023
	December 31, 2025				December 31, 2024
($ in thousands)	Total		Percent		Total		Percent
Period end:
Noninterest-bearing demand deposits	$	168,442	22.3	%	$	126,782	23.3	%
Noninterest-bearing demand deposits	$	126,782	23.3	%	$	95,486	23.6	%
Interest-bearing deposits:
Demand	7174,~~403~~817		139.19	%	5071,~~058~~403		1213.41	%
Savings	911,~~287~~017		1.75	%	89,~~633~~287		2.1.7	%
Money markets	1622,~~709~~017		32.09	%	1116,~~661~~709		23.90	%
Time certificates of deposit	~~320~~478,~~771~~268		5863.94	%	~~238~~320,~~995~~771		5958.09	%
Total period end deposits	$	~~544~~754,~~952~~561	100.0	%	$	~~404~~544,~~833~~952	100.0	%

The increase in total deposits as of December 31, ~~2024~~2025, compared to December 31, ~~2023~~2024, was primarily due to an increase in brokered time deposits ~~and~~of ~~noninterest~~$153.4 ~~bearing~~million, ~~demand~~which ~~deposits~~were ~~utilized~~added into ~~the~~fund ~~funding~~loan ofgrowth ~~our~~and ~~lending~~increase ~~programs~~balance sheet liquidity. ~~Also~~Additionally, ~~during~~noninterest ~~the~~bearing ~~fourth~~demand ~~quarter~~deposits ofincreased ~~2024~~$41.7 million, weprimarily ~~called~~related ~~$160.0~~to ~~million~~collateral ofdeposits ~~higher-yielding~~by ~~time~~certain ~~certificates~~strategic ofprograms ~~deposit~~in ~~and~~anticipation ~~replaced~~of ~~them~~increased ~~with~~volumes ~~lower~~in ~~cost~~student ~~time~~loan ~~certificates~~fundings ofin ~~deposit~~January 2026.

As an FDIC-insured institution, our deposits are insured up to applicable limits by the 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 $~~183~~204.21 million and $~~136~~183.92 million as of December 31, ~~2024~~2025 and December 31, ~~2023~~2024, respectively. Estimated uninsured deposits at the Bank as of December 31, ~~2024~~2025 include $5462.01 million of total deposits contractually required to be maintained at the Bank pursuant to our Strategic Program agreements and an additional $4258.12 million of total deposits associated with accounts owned by the parent holding company or the Bank. The maturity profile of our estimated uninsured time deposits, those amounts that exceed the FDIC insurance limit, at December 31, ~~2024~~2025 is as follows:

December 31, 2024

December 31, 2025

($ in thousands)

Threemonthsor less

More thanthreemonthsto sixmonths

More thansix monthsto twelvemonths

More thantwelvemonths

Total

Time deposits, uninsured

—277

1,~~277~~779

~~1,746~~605

~~183~~1,585

34,~~206~~246

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Total Liabilities

Total liabilities increased from $~~431~~572.23 million at December 31, ~~2023~~2024 to $~~572~~783.39 million at December 31, ~~2024~~2025 primarily due to an increase in ~~total~~ deposits as discussed above.

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Liquidity and Capital Resources

Liquidity Management

Liquidity management is the ability to meet current and future financial obligations of a short-term nature. Our primary sources of funds consist of deposit inflows, the sale of loans, principal repayments and interest on loans and net profits. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows, loan prepayments, loan sales and security sales are greatly influenced by general interest rates, economic conditions, and competition.

Our primary source of funds to support new loan originations are deposits. Deposits are comprised of core and non-core deposits. To attract core deposits from local and nationwide consumer and commercial markets, we have paid rates at the higher end of the market. We have been able to pay higher rates due to the higher rates earned on our loan portfolio. We utilize rate listing services and website advertising to attract deposits from consumer and commercial sources. Non-core deposits generally include brokered deposits and deposits acquired through the utilization of a listing service.

We intend to have various term offerings to match our funding needs. With no current plans to expand our brick-and-mortar branch network, online and mobile banking offers a means to meet customer needs and aggregate deposits more efficiently compared to a traditional branch network. We believe that the rise of mobile and online banking provides us the opportunity to further leverage the technological competency we have demonstrated in recent years.

We regularly adjust our investment in liquid assets based upon our assessment of (1) expected loan demand, (2) expected deposit flows, (3) yields available on interest-earning deposits and securities and (4) the objectives of our asset/liability management, funds management and liquidity policies. The objective of our liquidity policy is to control the risk to our earnings and capital arising from the inability to meet obligations in a timely manner. This entails ensuring sufficient funds are available at all times and at a reasonable cost to meet potential demands from both fund providers and borrowers.

We primarily utilize short-term and long-term borrowings to supplement deposits to fund our lending and investment activities. At December 31, ~~2024~~2025, we had the ability to access $~~239~~193.28 million from the ~~FRB’s~~Federal ~~Discount~~Reserve ~~Window~~Bank on a collateralized basis. The Bank had an available unsecured line of credit with ~~two~~three correspondent banks to borrow up to $616.1 million in overnight funds. We also maintain a $2520.05 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 December 31, ~~2024~~2025. ~~In long term borrowings, we had $0.1 million outstanding at December 31, 2024 related to the PPPLF. The PPPLF is secured by pledged PPP loans.~~

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 December 31, ~~2024~~2025, liquid assets (defined as cash and due from banks and interest-bearing deposits) totaled $~~109~~163.24 million and constituted 1416.67% of total assets. In addition, during the third quarter of 2024, we purchased U.S. Treasury securities, which are classified as investment securities AFS. These investment securities totaled $29.9 million at December 31, 2024 (4.0% of total assets) and can be readily sold. 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.

Capital Resources

We seek to maintain adequate capital to support anticipated asset growth, operating needs and unexpected risks, and to ensure that we are in compliance with all current and anticipated regulatory capital guidelines. Our primary sources of new capital include retained earnings and proceeds from the sale and issuance of capital stock or other securities. Expected future use or activities for which capital may be set aside include balance sheet growth and associated relative increases in market or credit exposure, investment activity, potential product and business expansions, acquisitions and strategic or infrastructure investments.

Shareholders’ equity increased $1819.75 million to $~~173~~193.72 million at December 31, ~~2024~~2025 compared to $~~155~~173.17 million at December 31, ~~2023~~2024, primarily due to ~~the~~earnings ~~purchase~~ of ~~additional~~$16.1 ~~equity~~million ~~interests~~reported ~~in BFG in exchange~~ for $4the period.1 ~~million~~The inCompany ~~FinWise~~did ~~Bancorp~~not ~~common~~pay ~~stock~~a ~~and~~dividend ~~net~~in ~~income~~2024 ~~of $12.7~~or ~~million~~2025.

67We use several indicators of capital strength. The most commonly used measure is total equity to total assets, which was 19.8% and 23.3% as of December 31, 2025 and December 31, 2024, respectively.

Our return on average equity was 8.9% and 7.7% for the years ended December 31, 2025 and 2024, respectively. Our return on average assets was 1.9% and 2.0% for the years ended December 31, 2025 and 2024, respectively.

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We use several indicators of capital strength. The most commonly used measure is total equity to total assets, which was 23.3% and 26.5% as of December 31, 2024 and December 31, 2023, respectively.

Our return on average equity was 7.7% and 11.9% for the years ended December 31, 2024 and 2023, respectively. Our return on average assets was 2.0% and 3.5% for the years ended December 31, 2024 and 2023, respectively.

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a material effect on our business. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of its assets, liabilities, and certain off-balance-sheet items as calculated pursuant to regulatory definitions and requirements. The sufficiency of capital and the Bank’s capital classifications are also subject to qualitative judgments by the regulators about risk weightings and other factors.

Under the prompt corrective action rules, an institution is deemed “well capitalized” if its Tier 1 leverage ratio, Common Equity Tier 1 ratio, Tier 1 Capital ratio, and Total Capital ratio meet or exceed 5%, 6.5%, 8%, and 10%, respectively. On September 17, 2019, the federal banking agencies jointly issued a rule intending to simplify the regulatory capital requirements described above for qualifying community banking organizations that opt into the Community Bank Leverage Ratio framework, as required by Section 201 of the Regulatory Relief Act. The Bank elected to opt into the Community Bank Leverage Ratio framework starting in 2020. Under these capital requirements the Bank must maintain a leverage ratio greater than 9.0% to be considered well-capitalized.

As of December 31, ~~2024~~2025, the most recent notification from the FDIC categorized the Bank as well-capitalized under the regulatory framework for prompt corrective action (there are no conditions or events since that notification we believe have changed the Bank’s category). See Note 8 - Capital Requirements to the consolidated financial statements included in Part II, Item 8 for additional information regarding our regulatory capital requirements.

Stock Repurchase Program

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 up to 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. The repurchase program expires on March 31, 2026. During the three months ended December 31, ~~2024~~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 to the consolidated financial statements included in Part II, Item 8 for more information.

Contractual Obligations

We have contractual obligations to make future payments on debt and lease agreements. While our liquidity monitoring and management consider both present and future demands for and sources of liquidity, the following table of contractual commitments focuses only on future obligations and summarizes our significant contractual obligations as of December 31, ~~2024~~2025:

($ in thousands)

Total

Less thanOne Year

One toThreeYears

Three toFive Years

MoreThan FiveYears

Contractual Obligations

Deposits without stated maturity

~~224~~276,~~181~~293

—

Time deposits

~~320~~478,~~771~~268

~~245~~364,~~180~~063

2977,~~629~~107

3526,~~294~~475

10,~~668~~623

Operating lease obligations

54,~~595~~575

1,~~122~~212

2,~~270~~346

21,~~203~~017

—

Total

~~550~~759,~~547~~136

~~470~~641,~~483~~568

3179,~~899~~453

3727,~~497~~492

10,~~668~~623

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Off-Balance Sheet Financing Arrangements

In the normal course of business, we enter into certain off-balance sheet arrangements to meet the financing needs of our customers. These transactions include commitments to extend credit, which involves, to varying degrees, elements of credit risk and interest rate risk exceeding the amounts recognized in our consolidated statements of financial condition. Our exposure to credit loss is represented by the contractual amounts of these commitments. The same credit policies and procedures are used in making these commitments as for on-balance sheet instruments. With the exception of these off-balance sheet arrangements, we have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. For details of our commitments to extend credit please see Note 9 - Commitments and Contingencies to the consolidated financial statements included in Part II, Item 8..

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procedures are used in making these commitments as for on-balance sheet instruments. With the exception of these off-balance sheet arrangements, we have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. For details of our commitments to extend credit please see Note 9 - Commitments and Contingencies to the consolidated financial statements included in Part II, Item 8.

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Reconciliations of Non-GAAP Financial Measures

We believe that both management and investors benefit from certain non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to our historical performance. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business. Accordingly, we believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team. Our calculation of these non-GAAP financial measures may differ from similarly-titled non-GAAP measures, if any, reported by our peers. These non-GAAP financial measures should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with U.S. GAAP.

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 ~~U.S.~~ 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 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. ~~Any~~The ~~remaining~~credit ~~income~~enhancement onasset ~~such~~is ~~loans~~reduced inas ~~excess~~credit ofenhancement ~~the~~payments ~~amounts retained by FinWise~~ and ~~placed~~recoveries ~~in the deposit reserve account~~ are ~~paid~~received tofrom the Strategic Program service provider. ~~Income~~or ontaken ~~such~~from ~~loans~~its incash ~~excess~~reserve ofaccount. ~~amounts~~If ~~retained by FinWise are expensed for services provided by~~ the Strategic Program service provider ~~including~~is ~~its~~unable ~~legal~~to ~~commitment~~fulfill toits ~~indemnify~~contracted orobligations ~~reimburse~~under ~~all~~its credit orenhancement ~~fraud~~agreement, ~~losses~~then ~~pursuant~~the toBank ~~credit~~could ~~enhancement~~be ~~agreements.~~exposed ~~The~~to ~~credit~~the ~~enhancement~~loss ~~asset~~of isthe ~~reduced~~reimbursement asand credit enhancement ~~payments~~income ~~and~~as ~~recoveries~~a ~~are~~result ~~received~~of ~~from~~this counterparty risk. In the event the Strategic Program service provider oris ~~taken~~not ~~from~~able ~~its~~to ~~cash~~perform ~~reserve~~according ~~account.~~to If the ~~Strategic~~contractual ~~Program~~terms, ~~service~~the ~~provider~~Bank is ~~unable~~entitled to ~~fulfill~~receive ~~its~~all ~~contracted~~the ~~obligations~~income ~~under~~on ~~its~~the ~~credit~~loans. ~~enhancement~~The ~~agreement,~~Bank ~~then~~incurs ~~the~~expenses ~~Bank~~for ~~could~~the beamounts ~~exposed~~owed to the ~~loss~~strategic ofpartner for the ~~reimbursement~~credit guarantee and ~~credit~~for ~~enhancement~~servicing ~~income~~of asthe acredit ~~result~~enhanced ofportfolio, ~~this~~if ~~counterparty~~applicable ~~risk~~(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.

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:

	As of and for the Year Ended			As of and for the Year Ended
	12/31/2024
	December 31, 2025			December 31, 2024
($ in thousands; unaudited)		Total Average ~~Loans HFI~~LHFI		Total Interest Income on ~~Loans HFI~~LHFI		Average Yield on ~~Loans HFI~~LHFI		Total Average LHFI		Total Interest Income on LHFI		Average Yield on LHFI
Before adjustment for credit enhancement		$	~~417~~535,~~207~~671	$	5165,~~194~~203	12.2717	%	$	417,207	$	51,194	12.27	%
Less: credit enhancement expense				(8)
Less: credit enhancement program expenses				(9,755)						(9)
Net of adjustment for credit enhancement expenses		$	417,207	$	51,186	12.27	%
Net of adjustment for credit enhancement program expenses		$	535,671	$	55,448	10.35	%	$	417,207	$	51,185	12.27	%

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

69The following non-GAAP measures are presented to illustrate the impact of certain credit enhancement program expenses on net interest income and NIM:

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The following non-GAAP measures are presented to illustrate the impact of certain credit enhancement expenses on net interest income and NIM:


	As of and for the Year Ended			As of and for the Year Ended
	December 31, 2025			December 31, 2024
($ in thousands; unaudited)		Total Average Interest-Earning Assets		Net Interest Income		Net Interest Margin		Total Average Interest-Earning Assets		Net Interest Income		Net Interest Margin
Before adjustment for credit enhancement		$	782,005	$	72,183	9.23	%	$	589,880	$	58,912	9.99	%
Less: credit enhancement program expenses				(9,755)						(9)
Net of adjustment for credit enhancement program expenses		$	782,005	$	62,428	7.98	%	$	589,880	$	58,903	9.99	%

	As of and for the Year Ended
	12/31/2024
($ in thousands; unaudited)		Total Average Interest-Earning Assets		Net Interest Income		Net Interest Margin
Before adjustment for credit enhancement		$	589,880	$	58,912	9.99	%
Less: credit enhancement expense				(8)
Net of adjustment for credit enhancement expenses		$	589,880	$	58,904	9.99	%

Net interest income and net interest margin net of credit enhancement program expenses are non-GAAP measures that include the impact of credit enhancement program expenses on net interest income and net interest margin, the most directly comparable GAAP measures.

~~Net~~ Non-interest ~~income~~expenses ~~and~~less ~~net interest margin net of~~ credit enhancement ~~expense~~program ~~are~~expenses is a non-GAAP ~~measures~~measure ~~that~~presented ~~include~~to illustrate the impact of credit enhancement program expenses on ~~net~~ non-interest ~~income and net interest margin, the most directly comparable GAAP measures.~~expense:

($ in thousands; unaudited)	Year Ended December 31, ~~2024~~2025		Year Ended December 31, 2024
Total non-interest expense	$	5270,~~835~~333	$	52,835
Less: credit enhancement expense	(8)
Less: credit enhancement program expenses	(9,755)		(9)
Total non-interest expense less credit enhancement expenses	$	52,827
Total non-interest expense less credit enhancement program expenses	$	60,578	$	52,826

Total non-interest expense less credit enhancement ~~expense~~program expenses is a non-GAAP measure that illustrates the impact of credit enhancement program expenses on non-interest expense, the most directly comparable GAAP measure.

Total non-interest income less credit enhancement income is a non-GAAP measure to illustrate the impact of credit enhancement income resulting from credit enhanced loans on non-interest income:

($ in thousands; unaudited)	Year Ended December 31, ~~2024~~2025		Year Ended December 31, 2024
Total non-interest income	$	2258,~~485~~483	$	22,485
Less: credit enhancement income	(~~111~~23,924)		(111)
Total non-interest income less credit enhancement income	$	2234,~~374~~559	$	22,374

Total non-interest income less indemnification income is a non-GAAP measure that illustrates the impact of credit enhancement income on non-interest income. The most directly comparable GAAP measure is non-interest income.

($ in thousands; unaudited)	As of December 31, 2024
Allowance for credit losses	$	(13,176)
Less: allowance for credit losses related to credit enhanced loans	(111)
Allowance for credit losses excluding the effect of the allowance for credit losses related to credit enhanced loans	$	(13,065)

The allowance for credit losses excluding the effect of the allowance for credit losses related to credit enhanced loans is a non-GAAP measure that reflects the effect of the credit enhancement program on the allowance for credit losses. The total outstanding balance of loans held-for-investment with credit enhancement as of December 31, 2024 was approximately $0.9 million.

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The following non-GAAP measure is presented to illustrate the effect of the credit enhancement program that creates the credit enhancement on the allowance for credit losses:


($ in thousands; unaudited)	As of December 31, 2025		As of December 31, 2024
Allowance for credit losses	$	36,796	$	13,176
Less: allowance for credit losses related to credit enhanced loans	(22,411)		(111)
Allowance for credit losses excluding the effect of the allowance for credit losses related to credit enhanced loans

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