FinWise Bancorp (NASDAQ: FINW) (“FinWise” or the “Company”), parent
company of FinWise Bank (the “Bank”), today announced that it has
entered into a membership interest purchase agreement with Business
Funding Group, LLC (“BFG”) and four members of BFG (“Sellers”), in
which FinWise will acquire an additional 10% ownership and voting
interest in BFG, bringing the total ownership to 20% upon closing.
The transaction is subject to regulatory approval and other
customary closing conditions.
“We are excited to have executed on one of our
long-term initiatives to increase our ownership of Business Funding
Group and to have done so at favorable terms by issuing FinWise
stock to the BFG Sellers at a premium to its current valuation,”
stated Kent Landvatter, Chairman, Chief Executive Officer and
President of FinWise. “BFG has been a primary source of SBA 7(a)
loans since 2014 and our relationship has been mutually beneficial
for nearly a decade.”
Mr. Landvatter continued, “We believe the use of
our shares at a premium valuation demonstrates the strength of our
business and a signal of confidence by one of our key strategic
partners. As we move ahead, we will remain disciplined with our
capital in order to be prepared and secure additional long-term
value creation for our shareholders.”
Jarret Prussin, CEO of Business Funding Group
stated, “I am very pleased with the opportunity to deepen our
relationship with FinWise through this transaction. Our partnership
has already created significant value for both of our
organizations, and I believe that the expanded relationship and
continued collaboration will drive further growth. Our willingness
to transact at a premium valuation for FinWise shares in this
transaction demonstrates our commitment to our relationship and the
long-term value we see in FinWise.”
About FinWise Bancorp
FinWise Bancorp is a Utah bank holding company
headquartered in Murray, Utah. FinWise’s wholly-owned subsidiary,
FinWise Bank, is a Utah state-chartered FDIC-insured bank. FinWise
currently operates one full-service banking location in Sandy,
Utah. FinWise is a nationwide lender to and takes deposits from
consumers and small businesses. Learn more at
www.finwisebancorp.com.
About Business Funding
Group
Business Funding Group, headquartered in
Stamford, Connecticut, was founded in 2011 and focuses on providing
a wide range of creative financing solutions to businesses in all
stages of their growth.
Contacts
investors@finwisebank.com
media@finwisebank.com
"Safe Harbor" Statement Under the
Private Securities Litigation Reform Act of 1995
This release 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 Company’s current views with respect to,
among other things, future events and its 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 the Company’s industry and management’s
beliefs and certain assumptions made by management, many of which,
by their nature, are inherently uncertain and beyond the Company’s
control. The inclusion of these forward-looking statements should
not be regarded as a representation by the Company or any other
person that such expectations, estimates and projections will be
achieved. Accordingly, the Company cautions 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 the Company believes 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.
There are or will be important factors that
could cause the Company’s actual results to differ materially from
those indicated in these forward-looking statements, including, but
not limited to, the following: (a) the success of the financial
technology industry, the development and acceptance of which is
subject to a high degree of uncertainty, as well as the continued
evolution of the regulation of this industry; (b) the ability of
the Company’s Strategic Program service providers to comply with
regulatory regimes, including laws and regulations applicable to
consumer credit transactions, and the Company’s ability to
adequately oversee and monitor its Strategic Program service
providers; (c) the Company’s ability to maintain and grow its
relationships with its Strategic Program service providers; (d)
changes in the laws, rules, regulations, interpretations or
policies relating to financial institutions, accounting, tax,
trade, monetary and fiscal matters, including the application of
interest rate caps or maximums; (e) the Company’s ability to keep
pace with rapid technological changes in the industry or implement
new technology effectively; (f) conditions relating to the Covid-19
pandemic, including the severity and duration of the associated
economic slowdown either nationally or in the Company’s market
areas, and the response of governmental authorities to the Covid-19
pandemic and the Company’s participation in Covid-19-related
government programs such as the Paycheck Protection Program; (g)
system failure or cybersecurity breaches of the Company’s network
security; (h) the Company’s reliance on third-party service
providers for core systems support, informational website hosting,
internet services, online account opening and other processing
services; (i) general economic conditions, either nationally or in
the Company’s market areas (including interest rate environment,
government economic and monetary policies, the strength of global
financial markets and inflation and deflation), that impact the
financial services industry and/or the Company’s business; (j)
increased competition in the financial services industry,
particularly from regional and national institutions and other
companies that offer banking services; (k) the Company’s ability to
measure and manage its credit risk effectively and the potential
deterioration of the business and economic conditions in the
Company’s primary market areas; (l) the adequacy of the Company’s
risk management framework; (m) the adequacy of the Company’s
allowance for loan losses (“ALL”); (n) the financial soundness of
other financial institutions; (o) new lines of business or new
products and services; (p) changes in Small Business Administration
(“SBA”) rules, regulations and loan products, including
specifically the Section 7(a) program, changes in SBA standard
operating procedures or changes to the status of the Bank as an SBA
Preferred Lender; (q) changes in the value of collateral securing
the Company’s loans; (r) possible increases in the Company’s levels
of nonperforming assets; (s) potential losses from loan defaults
and nonperformance on loans; (t) the Company’s ability to protect
its intellectual property and the risks it faces with respect to
claims and litigation initiated against the Company; (u) the
inability of small- and medium-sized businesses to whom the Company
lends to weather adverse business conditions and repay loans; (v)
the Company’s ability to implement aspects of its growth strategy
and to sustain its historic rate of growth; (w) the Company’s
ability to continue to originate, sell and retain loans, including
through its Strategic Programs; (x) the concentration of the
Company’s lending and depositor relationships through Strategic
Programs in the financial technology industry generally; (y) the
Company’s ability to attract additional merchants and retain and
grow its existing merchant relationships; (z) interest rate risk
associated with the Company’s business, including sensitivity of
its interest earning assets and interest bearing liabilities to
interest rates, and the impact to its earnings from changes in
interest rates; (aa) the effectiveness of the Company’s internal
control over financial reporting and its ability to remediate any
future material weakness in its internal control over financial
reporting; (bb) potential exposure to fraud, negligence, computer
theft and cyber-crime and other disruptions in the Company’s
computer systems relating to its development and use of new
technology platforms; (cc) the Company’s dependence on its
management team and changes in management composition; (dd) the
sufficiency of the Company’s capital, including sources of capital
and the extent to which it may be required to raise additional
capital to meet its goals; (ee) compliance with laws and
regulations, supervisory actions, the Dodd-Frank Act, capital
requirements, the Bank Secrecy Act, anti-money laundering laws,
predatory lending laws, and other statutes and regulations; (ff)
the Company’s ability to maintain a strong core deposit base or
other low-cost funding sources; (gg) results of examinations of the
Company by its regulators, including the possibility that its
regulators may, among other things, require the Company to increase
its ALL or to write-down assets; (hh) the Company’s involvement
from time to time in legal proceedings, examinations and remedial
actions by regulators; (ii) further government intervention in the
U.S. financial system; (jj) natural disasters and adverse weather,
acts of terrorism, pandemics, an outbreak of hostilities or other
international or domestic calamities, and other matters beyond the
Company’s control; (kk) future equity and debt issuances; and (ll)
other factors listed from time to time in the Company’s filings
with the Securities and Exchange Commission, including, without
limitation, its Annual Report on Form 10-K for the year ended
December 31, 2022 and subsequent reports on Form 10-Q and Form
8-K.
The timing and amount of purchases under the
Company’s share repurchase program will be determined by management
based upon market conditions and other factors. Purchases may be
made pursuant to a program adopted under Rule 10b5-1 under the
Securities Exchange Act of 1934, as amended. The program does not
require the Company to purchase any specific number or amount of
shares and may be suspended or reinstated at any time in the
Company’s discretion and without notice.
Any forward-looking statement speaks only as of
the date of this release, and the Company does 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 the Company to predict their occurrence. In addition, the
Company cannot assess the impact of each risk and uncertainty on
its 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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