Finwise BancorpFINW
Finwise Bancorp Segments Disclosure
Segments
As the Company experienced significant growth in size and complexity, management reassessed its approach to analyzing revenues, financial performance, and business activities. To align with the internal financial reporting with the organizational structure and how the CODM manages the business, evaluates performance, and allocates resources, the Company completed a technology project to capture financial information by segment. The CODM currently reviews the revenues and financial results for three operating and reportable segments: traditional banking, banking as a service (“BaaS”), and treasury and administration. Considering management’s needs due to the increased volume and complexity of its business, management implemented new processes and utilized system capabilities to capture accounting information by cost centers. The cost centers are subsequently mapped to the established business segments and reports reflecting the new structure and processes were finalized and provided to the CODM during the third quarter of 2025. Due to the fact that financial data was not previously recorded by cost center, it is not practicable to present segment financial information for comparative prior periods.
The Company’s 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 Company’s 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.
The accounting policies applicable to our segments are consistent with those applied to the preparation of the accompanying consolidated financial statements. Intersegment interest and expense transactions are recorded at the Company’s cost; there is no intercompany profit or loss on intersegment transactions. The Company has implemented a transfer pricing process that credits or charges the traditional banking and BaaS segments with intrabank interest income or expense, with the treasury and administration segment as the offset for those entries.
The CODM evaluates performance and allocates resources for each of the Company’s reportable segments based on segment income or loss before other allocated operating expenses and net income. The CODM uses income or loss before
other allocated operating expenses to allocate resources for each segment predominantly in the annual budget and forecasting process. The CODM considers budget-to-actual variances on a monthly basis using the income before other allocated operating expenses when making decisions about allocating capital and personnel to the segments.
The Company’s CODM is the chief executive officer and its president.
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 periods indicated ($ in thousands):
At and 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 | |||||||||||||||||||
December 31, 2025 | |||||||||||||||||||||||||||||
| Other segment disclosures: | |||||||||||||||||||||||||||||
| Total assets | $ | 439,518 | $ | 278,462 | $ | 259,155 | $ | — | $ | 977,135 | |||||||||||||||||||
(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, which in turn incur corresponding interest expense. These internal interest flows are eliminated at the consolidated level through the intersegment/eliminations column.
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.