Finwise BancorpFINW
Finwise Bancorp Commitments Disclosure
Commitments and Contingencies
Federal Home Loan Bank Secured Line of Credit
As of December 31, 2025 and December 31, 2024, the Bank’s available line of credit with the FHLB to borrow funds was $20.5 million and $25.0 million, respectively. All borrowings are short-term and the interest rate is equal to the correspondent bank’s daily federal funds purchase rate. As of December 31, 2025 and December 31, 2024, no amounts were outstanding under the line of credit. Loans totaling $34.2 million and $41.6 million were pledged to secure the FHLB line of credit as of December 31, 2025 and December 31, 2024, respectively.
Federal Reserve Bank Lines of Credit
At December 31, 2025 and December 31, 2024, the Bank had a maximum borrowing capacity of $193.8 million and $239.2 million, respectively, with the FRB, including the secured borrowing capacity through the Discount Window and the Borrower-in-Custody (“BIC”) program, to the extent of collateral pledged. Loans totaling $235.8 million and $240.8 million and securities of $37.4 million and $42.6 million were pledged to secure these lines of credit with the FRB as of December 31, 2025 and December 31, 2024, respectively. The Company had no advances outstanding under either program as of December 31, 2025 and 2024.
Other Lines of Credit
The Bank had an available unsecured line of credit with Pacific Coast Bankers’ Bank to borrow up to $10.0 million in overnight funds at December 31, 2025. Through Zions Bank, the Bank had an available unsecured line of credit of $5.0 million at December 31, 2025 and December 31, 2024. The Bank had an available line of credit with Bankers’ Bank of the
West to borrow up to $1.1 million in overnight funds at December 31, 2025 and December 31, 2024. The Bank had no outstanding balances on such unsecured or secured lines of credit as of December 31, 2025 and December 31, 2024.
Financial Instruments with Off-Balance Sheet Risk
Commitments to Extend Credit
In the ordinary course of business, the Bank has entered into commitments to extend credit to customers which have not yet been exercised. These financial instruments include commitments to extend credit in the form of loans and credit card arrangements. Those instruments involve to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheets. For credit card customers, the Company reserves the right to modify or terminate the terms and conditions of credit card accounts at its discretion. It is important to note that a significant portion of the Company’s commitments and undrawn credit card lines are not fully utilized by customers, so the total amount of these commitments does not necessarily reflect the Company’s future cash obligations. The Company assesses each customer’s credit profile individually to determine creditworthiness. The Company’s commitments to extend credit as of the periods indicated are summarized below. Since commitments associated with commitments to extend credit may expire unused, the amounts shown in the table below do not necessarily reflect the actual future cash funding requirements.
At December 31, 2025 and December 31, 2024, financial instruments with off-balance-sheet risk were as follows:
| December 31, | December 31, | ||||||||||
| ($ in thousands) | 2025 | 2024 | |||||||||
| Revolving, open-end lines of credit | $ | 2,566 | $ | 2,365 | |||||||
Credit card arrangements | $ | 305,313 | $ | — | |||||||
| Undisbursed commercial real estate loans | 32,414 | 23,200 | |||||||||
| Other unused commitments | 384 | 830 | |||||||||
Total unfunded loan commitments | $ | 340,677 | $ | 26,395 | |||||||
Allowance for Credit Losses on Unfunded Commitments
The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancelable by the Company. The allowance for credit losses on unfunded commitments is included in other liabilities on the Consolidated Balance Sheets and is adjusted through a charge to provision for credit loss expense on the Consolidated Statements of Income. The allowance for credit losses on unfunded commitments estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. The allowance for credit losses on unfunded commitments was $0.6 million and $0.5 million as of December 31, 2025 and December 31, 2024, respectively.
Class Action Litigation
In July 2025, the Company notified approximately 600,000 individuals of an alleged data breach in which their personal data was exposed by a former employee following termination of their employment. Subsequently, several class action lawsuits were filed, all of which have been consolidated into a single class action lawsuit in Utah federal court. The Company has disputed the claims and is vigorously defending the lawsuit. The Company participated in a pre-discovery mediation with the plaintiffs’ attorneys on March 17, 2026; however, the parties were unable to reach an agreement at that time.
The Company maintains insurance coverage that management believes is sufficient to cover any potential losses or damages arising from the lawsuit. As of December 31, 2025, no accrual for loss has been recorded as management does not believe a loss is probable or, if probable, is not reasonably estimable.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 23, 2026 | Showing above |
| 2024 | Mar 26, 2025 | |
| 2023 | Mar 25, 2024 | |
| 2022 | Mar 30, 2023 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.