FinWise Bancorp (NASDAQ:FINW) is a financial institution that provides a range of banking services. It operates in a competitive landscape with peers like Third Coast Bancshares, Southern States Bancshares, USCB Financial Holdings, Five Star Bancorp, and Primis Financial Corp. The company's performance can be evaluated by comparing its Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC).
FinWise Bancorp boasts a ROIC of 30.90% and a WACC of 12.15%, resulting in a ROIC to WACC ratio of 2.54. This indicates that FinWise is generating returns significantly above its cost of capital, showcasing its efficiency in utilizing invested capital to generate profits. This strong performance sets it apart from its peers.
In comparison, Third Coast Bancshares has a ROIC of 7.48% and a WACC of 22.61%, leading to a ROIC to WACC ratio of 0.33. This suggests that Third Coast is less efficient in generating returns relative to its cost of capital. Similarly, Southern States Bancshares has a ROIC to WACC ratio of 0.53, indicating room for improvement in capital utilization.
USCB Financial Holdings, with a ROIC to WACC ratio of 0.62, shows the highest growth potential among FinWise's peers, yet it still lags behind FinWise's impressive ratio. Five Star Bancorp and Primis Financial Corp. have even lower ratios of 0.09 and 0.08, respectively, highlighting their challenges in generating returns above their cost of capital.
