Finwise Bancorp Income Taxes Disclosure
| December 31, | |||||||||||
| ($ in thousands) | 2025 | 2024 | |||||||||
| Current tax expense | |||||||||||
| Federal | $ | 7,044 | $ | 3,030 | |||||||
| State | 1,817 | 1,127 | |||||||||
| Total current tax expense | $ | 8,861 | $ | 4,157 | |||||||
| Deferred tax expense (benefit) | |||||||||||
| Federal | $ | (2,533) | $ | 425 | |||||||
| State | (659) | (335) | |||||||||
Total deferred tax expense (benefit) | $ | (3,192) | $ | 90 | |||||||
| Total income tax expense | |||||||||||
| Federal | $ | 4,511 | $ | 3,455 | |||||||
| State | 1,158 | 792 | |||||||||
| Total income tax expense | $ | 5,669 | $ | 4,247 | |||||||
| December 31, | |||||||||||
| ($ in thousands) | 2025 | 2024 | |||||||||
| Deferred tax assets | |||||||||||
| Operating lease liabilities | $ | 1,103 | $ | 1,302 | |||||||
Allowance for credit losses | 8,650 | 2,274 | |||||||||
| Accrued bonuses | 1,733 | — | |||||||||
| Loan servicing rights | 553 | 316 | |||||||||
| Accrued vacation | 205 | — | |||||||||
| Nonqualified stock options | 159 | 154 | |||||||||
| Restricted stock | 815 | 386 | |||||||||
| Unrealized losses on cash flow hedges | 65 | — | |||||||||
| Unrealized losses on securities AFS | — | 24 | |||||||||
| Other | 109 | 438 | |||||||||
| Total deferred tax assets | 13,392 | 4,894 | |||||||||
| Deferred tax liabilities | |||||||||||
| ROU asset | (742) | (875) | |||||||||
| Other reserves | (5,317) | — | |||||||||
| Deferred loan fees, net | (1,588) | (2,159) | |||||||||
| Net book value of fixed assets | (2,776) | (2,020) | |||||||||
| Loan trailing fees | (189) | (335) | |||||||||
| Unrealized gains on cash flow hedges | — | (85) | |||||||||
| Unrealized gains on securities AFS | (74) | — | |||||||||
| Other | (361) | (319) | |||||||||
| Total deferred tax liabilities | (11,047) | (5,793) | |||||||||
Deferred tax assets (liabilities), net | $ | 2,345 | $ | (899) | |||||||
| December 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| ($ in thousands) | Amount | % | Amount | % | |||||||||||||||||||
| Tax provision at the U.S. federal statutory rate | $ | 4,570 | 21.0 | % | $ | 3,568 | 21.0 | % | |||||||||||||||
| State income taxes, net | 915 | 4.2 | % | 607 | 3.6 | % | |||||||||||||||||
Nontaxable or nondeductible items: | |||||||||||||||||||||||
| Nondeductible compensation | 393 | 1.8 | % | 27 | 0.2 | % | |||||||||||||||||
| Other nontaxable or nondeductible items | 13 | 0.1 | % | 12 | — | % | |||||||||||||||||
Other adjustments: | |||||||||||||||||||||||
| Other | (222) | (1.0) | % | 33 | 0.2 | % | |||||||||||||||||
| Income tax expense | $ | 5,669 | 26.1 | % | $ | 4,247 | 25.0 | % | |||||||||||||||
| December 31, | |||||||||||
| ($ in thousands) | 2025 | 2024 | |||||||||
| U.S. Federal | $ | 5,430 | $ | 4,247 | |||||||
State and local taxes: | |||||||||||
California | 528 | 1,170 | |||||||||
Georgia | * | 904 | |||||||||
Illinois | * | 710 | |||||||||
New Jersey | 543 | * | |||||||||
New York | 379 | * | |||||||||
Other states | 183 | 1,026 | |||||||||
| Total income taxes paid, net of refunds | $ | 7,063 | $ | 8,057 | |||||||
*The amount of income taxes paid during the years ended December 31, 2025 and 2024 does not meet the 5% disaggregation threshold. | |||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 23, 2026 | Showing above |
| 2024 | Mar 26, 2025 | |
| 2023 | Mar 25, 2024 | |
| 2022 | Mar 30, 2023 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.