FinWise Bancorp (NASDAQ:FINW) is a financial institution that provides a range of banking services. The company focuses on offering commercial and consumer loans, as well as deposit products. In the competitive landscape, FinWise competes with other financial entities like Third Coast Bancshares, Southern States Bancshares, USCB Financial Holdings, Five Star Bancorp, and Primis Financial Corp.
In evaluating FinWise's financial efficiency, the Return on Invested Capital (ROIC) is 10.56%, while the Weighted Average Cost of Capital (WACC) is 11.63%. This results in a ROIC to WACC ratio of 0.91, indicating that FinWise is not currently generating returns that exceed its cost of capital. This suggests a need for improvement in capital utilization.
Comparatively, Third Coast Bancshares (TCBX) has a negative ROIC of -1.53% against a high WACC of 22.25%, resulting in a ROIC to WACC ratio of -0.07. This indicates inefficiency in generating returns over its cost of capital. Similarly, Primis Financial Corp (FRST) also shows inefficiency with a ROIC of -6.83% and a WACC of 25.66%, leading to a ROIC to WACC ratio of -0.27.
On the other hand, Five Star Bancorp (FSBC) excels with a ROIC of 32.96% and a WACC of 14.67%, achieving a ROIC to WACC ratio of 2.25. This highlights FSBC's superior ability to generate returns well above its cost of capital, making it the most efficient among its peers.
