Finwise Bancorp (FINW) 2026 Q3 法說會逐字稿

Greetings. Welcome to the Finwise Bancorp third quarter 2026 earnings conference call. (Operator tInstructions) Please note this conference is being recorded. The conference will begin now.

Good afternoon and thank you for joining us today for Finwise Bancorp's third quarter 2026 earnings conference call. Earlier today, we filed our earnings release and investor deck and posted them to our investor website at investors.finwisebancorp.com. Today's conference call is being recorded and webcast on the company's investor website, as previously mentioned.

On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ from those discussed today. Forward-looking statements represent management's current estimates, expectations, and beliefs, and Finwise Bancorp assumes no obligation to update any forward-looking statements in the future. We encourage listeners to review the more detailed discussions related to these forward-looking statements, including factors that may negatively impact them, contained in the company's earnings press release and filings with the Securities and Exchange Commission.

Hosting the call today are CEO Jim Noone, CFO Bob Wahlman, and Executive Chairman Kent Landvatter. Jim, please go ahead.

Good afternoon, everyone. Third quarter results demonstrate the tangible progress we have made in broadening our platform and building a more capital-efficient sponsor bank. We originated $2.1 billion in loans, and we nearly doubled our credit-enhanced balances to $146 million in the quarter. Even after the cost of those partner arrangements, net interest income rose 17% from the second quarter.

We also recognized a one-time gain from our first acquisition transaction. Credit performance also improved during the quarter. Net charge-offs on loans without credit enhancement were $2.6 million in the quarter, well below the range of the last few quarters. Non-performing asset balances also decreased slightly quarter-over-quarter. With tangible book value up 9% over the past year. A leverage ratio of 18.1%, a strong pipeline of prospective partners and continued share repurchases, we have the capital strength, teams and operating environment to continue to execute.

I'll now provide some additional context on the factors that drove our core performance during the quarter. First, loan originations increased to $2.1 billion, reflecting both the typical seasonal increase in our student lending program. As well as strong organic growth from a credit enhanced consumer lending program we launched in 2025. Volume across the remainder of the portfolio was stable quarter-over-quarter.

Second, credit enhanced balances grew to $146.2 million, driven by a meaningful pickup from a partner that we previously noted was slower to ramp during the first half of the year. For modeling purposes, please note. The prior period credit-enhanced balances have been recast to reflect the reclassification of the Tallied credit card portfolio to discontinued operations.

As a result, comparisons to previously reported amounts may differ. Long-term growth in credit-enhanced balances will come from new partner additions and expanding the pipeline for this product remains a key area of focus and an important part of our long-term plans.

I want to briefly walk through how we manage partner risk in the credit enhanced product. We rely first and foremost on the structure and strength of the underlying loans and then look to the fintech partner. Under credit enhancement, the fintech partner contractually agrees to cover credit losses on the loans and keeps a cash reserve at Finwise that we can draw on to recover against any charge-offs.

Before any partner launches, they go through our full due diligence covering compliance, risk, cyber, controls, and financial strength. They must then pass three credit tests. We first model the worst performing vintage. We then stress historical charge-offs by 50% and 100%. In each case, the portfolio must demonstrate an ability to replenish the required cash reserve.

Finally, we review the partners' indemnity strength, including under the stress scenarios just mentioned. After launch, reserves are contractually required to be replenished weekly. We monitor the portfolio performance monthly and review updated charge-off and vintage analysis quarterly with our loan committee and Board. We judge partner strength on existing capitalization, earnings, and resources, not on their ability to raise new capital. And lastly, backup servicing ensures collections continue if a partner ceases operations.

Returning to the key drivers of our third quarter performance. Credit trends were positive during the quarter. Net charge-offs for non-credit enhanced loans declined to $2.6 million from $5.2 million in the prior quarter, primarily reflecting the resolution of several previously classified credits and a reduced number of accounts migrating to classified status. Non-performing loan balances decreased slightly quarter over quarter. From $37.7 million to $37.1 million, with approximately 48% of those balances at the end of Q3 guaranteed by the federal government.

As part of our effort to manage risk tolerance levels and streamline our balance sheet, the bank is actively working on a securitization for a portion of our SBA unguaranteed balances. We anticipate transferring these balances at par, with a credit enhancement for securitization investors in the form of our retained interest. While we are encouraged by improved credit performance, we do not expect the unusually favorable credit results reported this quarter to be indicative of a new run rate in the near term.

Bob will provide additional context around our expectations for net charge-offs and classified asset migration in his remarks. Overall, we remain very comfortable with the quality of our portfolio. Credit performance across the portfolio remains healthy and generally in line with our expectations. Our pipeline of fintech partners remains very strong, and we believe we are entering a favorable period for new partnership growth over the next 12 to 24 months across lending, cards and payments.

As we've discussed previously, we expect to announce new partners toward the end of this year and importantly, the opportunities we are pursuing today are larger, more diverse and often have greater long-term revenue potential than those we were evaluating just a few years ago.

Next, Finwise and Upstart have mutually agreed to end our sponsorship relationship effective September 30, 2026. Upstart contributed an immaterial amount of origination volume and an immaterial amount of revenue in the third quarter. And we continue to have no meaningful credit exposure to Upstart loans on our balance sheet. This termination is not expected to have any material impact on our financial condition or results of operations. Upstart has been a great partner for us since 2019. We are proud of the customers we have served with them, and we wish them the best in their future plans.

On a related note, I also want to touch on the increase in fintech charter activity under the current administration, including both de novo and bank merger applications. Our strategy to diversify partners and lines of business is designed to withstand the occasional transition of a fintech partner to that of an insured bank. As many of charter and merger applications are inherently uncertain in both outcome and timing. While a small number of larger fintechs are pursuing charters, the embedded finance market remains heavily dependent on sponsor bank partnerships.

Against that backdrop, we believe our diversified business model, broad product capabilities, regulatory and compliance infrastructure, and strong pipeline position us well to manage through any potential changes over time. We value all of our partnerships and remain focused on continuing to diversify revenue streams across lending, cards and payments.

In closing, this quarter's results reinforce our conviction in the company's long-term trajectory and the significant opportunity that exists. The progress we are making across lending, cards, and payments, coupled with a growing pipeline of increasingly meaningful partners, supports our confidence in the future. We remain focused on disciplined execution, continued improvement in credit quality, and building long-term shareholder value.

I will now turn the call over to our CFO, Bob Wahlman, to provide more detail on our financial results.

Thanks, Jim and good afternoon, everyone. Before reviewing our results, I'd like to briefly address the impact of the Tallied transaction completed during the quarter. As part of the transaction, we acquired credit card technology, program management capabilities and an experienced team that will expand our ability to support card programs for fintech partners. At the same time, we determined that holding credit card receivables was not aligned with our long-term strategy and approved a plan to exit the business while retaining the technology platform and servicing capabilities.

As a result, the credit card portfolio and other related assets and liabilities are being reported as discontinued operations, while the retained portfolio and the team remain part of continuing operations. This approach allows us to leverage the acquired capabilities through a more capital-efficient model consistent with our broader fintech banking strategy. Given the impact of the Tallied transactions, discontinued operations presentation and purchase accounting adjustments, reported results for the quarter are in some respects not directly comparable to prior periods. Accordingly, I will focus today's discussion on the underlying performance of the business and the key trends we are seeing across the platform.

For the third quarter, Finwise reported net income of $10 million or $0.73 per diluted share. Continuing operations generated net income of $10.4 million or $0.76 per diluted share, while discontinued operations reported a loss of $0.4 million or $0.03 per diluted share. Importantly, continuing operations result in the third quarter included a $6.5 million bargain purchase gain. Recognized in connection with the Tallied transaction, which was recorded in non-interest income.

Net interest income was $41.9 million for the third quarter, reflecting continued growth in the credit enhancement loan portfolio and improved credit performance. Lower migration of performing loans to non-performing loans reduced interest reversals on non-accrual loans and contributed to a higher average yield on loans held for investment. Receipt of interest on a tax refund also increased net interest income. Net interest margin was 19.58% for the third quarter.

The margin reflected continued growth in the higher yielding credit enhanced loan portfolio and improved credit performance. Lower migration of performing loans to non-accrual status reduced interest reversals on non-accrual loans. And supported higher yields on loans held for investment. These benefits were partially offset by higher interest expense associated with growth and average time certificates of deposit.

Non-interest income was $60.8 million in the third quarter. The results reflect higher credit enhancement income associated with growth in the credit enhanced portfolio. The $6.5 million bargain purchase gain previously discussed in connection with the Tallied transaction and increased strategic program fees driven by higher program volume and strategic program loans held for investment. These benefits were partially offset by a decline in the fair value of the company's investment in BFG.

Non-interest expense was $42.7 million in the third quarter. Results reflected higher credit enhancement guarantee and servicing expenses associated with growth in the credit enhanced loan portfolio. Excluding credit enhancement related expenses, non-interest expense increased $2.8 million, primarily driven by higher salaries and employee benefits, including employees added to the Tallied transaction, as well as other higher operating expenses. The efficiency ratio was 41.6% for the third quarter. The ratio benefited partly from strong revenue growth, particularly from interest income generated by our expanding credit-enhanced loan portfolio.

While the ratio was influenced by the Tallied transaction and related accounting impacts, we continue to believe there is meaningful opportunity for improvement in core efficiency over time. As revenues from our growing credit enhanced loan portfolio outpaced expense growth.

Total assets were $958.3 million as of September 30, 2026. Asset growth during the quarter was driven primarily by continued expansion of the credit enhanced loan portfolio and the related credit enhancement asset. Of note, the credit enhanced balances increased to $146.2 million as of September 30 this is a 97% one-quarter increase from credit enhanced balance as of June 30 of $74.2 million adjusted for the movement of credit card receivables to discontinued operations. These increases were partially offset by reductions in strategic program loans held for sale and other loans held for investment, reflecting the company's ongoing balance sheet optimization efforts.

Total deposits were $707.6 million as of September 30, 2026. Deposit growth during the quarter was driven by an increase in time certificates of deposit and non-interest-bearing demand deposits, partially offset by a decrease in interest-bearing demand deposits. We continue to maintain a strong capital position with a bank leverage ratio of 18.1%, well above the 8% threshold required to be considered well capitalized.

Finally, we continue to execute our share repurchase program during the quarter while maintaining a strong capital position. We believe repurchasing shares below tangible book value remains a compelling use of capital.

During the three months ended September 30, 2026, we repurchased 159,099 shares for $2.2 million. Since the Board authorized the program in May 2026, we have repurchased 188,835 shares for $2.6 million, representing approximately 28% of the 685,000 shares authorized under the program. Additionally, the Board has approved a Rule 10b5-1 share repurchase plan that will become effective at the start of our self-imposed blackout period in mid-December.

Let me provide forward outlook on some key metrics: loan originations for 4Q 2026 and full year 2027. While origination volumes may fluctuate from quarter to quarter, loan originations for the fourth quarter are currently tracking in the range of approximately $1.5 billion to $1.6 billion based on activity through the first four weeks of October. We view $1.5 billion to $1.6 billion of quarterly originations as a reasonable run rate for 2027 with approximately 5% growth above that level as the year progresses. We also suggest that you consider Q3 seasonality in any forecast.

This 2027 outlook excludes any contribution from new partners. SBA loan sales. We will continue to follow our strategy of selling guaranteed portions of our SBA loans as long as market conditions remain favorable. For modeling purposes, the average gain on sale over the past two quarters is a reasonable proxy for fourth quarter gain on sale income.

In 2027, we anticipate that the level of sales will decline, reflecting the lower level of origination volume. Quarterly net charge-offs. Based on current portfolio balances, we continue to view net charge-offs for non-credit enhanced loans of around $4 million as a reasonable assumption for the fourth quarter and a more normalized level overtime. Non-performing loan balances for 4Q 2026. We anticipate a migration to non-performing loans in the range of approximately $5 million to $7 million in the fourth quarter.

Net interest margin. We are maintaining our prior outlook. Including the impact of credit enhanced balances, we expect net interest margin to increase over time as the credit enhanced portfolio continues to grow and the funding costs increase at a slower rate. Excluding excess credit and income, we continue to expect a gradual decline in the margin consistent with our ongoing risk reduction strategy. The efficiency ratio.

We continue to see opportunities to enhance operating leverage as the business scales. While the path may not be linear from quarter to quarter, our long-term focus remains on improving our core efficiency ratio, excluding credit enhancement accounting effects. While multiple factors may influence the actual tax rate, we suggest using 26% in your modeling for 4Q 2026 and full year 2027.

With that, we would like to open the call for Q&A.

(Operator Instructions) Andrew Terrell, Stevens.

Hey, good afternoon.

Hey, Andrew.

I wanted to start on; the originations were really strong this quarter. I think you guys had guided for, I think it was like $1.6 billion, obviously well north of that. I was curious just kind of what. It's obviously a positive, but curious what drove such kind of a large delta this quarter, anything outsized or any kind of trends that have improved you could speak to?

Sure, let me speak to that, Andrew. I guess there's two components that I see there. The first component is the student loan activity, which was more robust than what we've experienced in the past, very strong. The second was the program that we had been looking to ramp up for a long time and really coming through and ramping up during the third quarter. So I think those were the primary two drivers for the increased origination volume over what we had suggested previously.

And then if I could ask around. We've obviously been talking a lot about credit throughout this year within the SBA business and the credit performance this quarter, very solid. Jim, I think in some of your remarks, you talked about maybe working on a securitization in the SBA business, but then some of the credit kind of forward commentary, it sounds like charge-offs step back up from here and maybe some MPL migration as well. Can you help us just pieces two items together. I'd love a little more color on the SBA securitization. I expect to move there.

Yeah. So I would look at the SBA securitization as like an event, Andrew, right? It's something that we're working towards. We've certainly been working towards for a while. We expect -- we anticipate transferring those balances at par but with a credit enhancement, but the kind of the forward guidance is independent of a securitization transaction. So if that transaction is successful, we would certainly announce it and look to provide some updated commentary at that point. I think we were very happy with the continued improvement in credit quality, particularly the decrease in NCOs and MPAs this quarter.

Most of the difference quarter over quarter in NCOs came from that core portfolio, which includes SBA. The NCOs there were roughly $400,000 for the core portfolio versus $2.9 million last quarter. It's a market improvement and it's encouraging, I would call it unusually favorable this quarter and not indicative of like a new run rate, it's just confirmation of the direction generally is how I would describe it, so just to be clear, we are moving the figure on NCO guidance to $4 million from the $4 million to $5 million range we provided last quarter because we are seeing improvement in that legacy portfolio, but we know it would be lumpy and we still expect core portfolio NCOs that are higher than what we had this quarter.

Got it. Okay, but just to make totally sure, the guidance for the charge-offs is independent of -- it would get better if you work through anything securitization-wise in the SBA book.

That's accurate.

Okay, great. And lastly, I just want to ask on the core expenses, if you back out the credit enhance piece up pretty decently this quarter, I think I've got it going from $15.6 million last quarter to $18.4 million this quarter. I know there was some added cost from Tallied, but it feels like a surprising step up. Curious if there are any other drivers that cause the move up in expenses this quarter, and is this the right level to kind of build off of for operating expenses going forward?

That's my question, Andrew. So as we don't guide through expense numbers. Third quarter includes the Tallied team and other costs to run the program. It also includes some true-up personnel costs. But our focus is revenue growth, outpacing expense growth to improve our core efficiency ratio, and that path may not be liberated, may not be linear, be lumpy.

We have said we will increase our spend as necessary to support our growth in partners and partner growth. But I don't think -- I'm not aware of anything right now that would change my view. And of course, it includes the Tallied expenses. So some of the Tallied expenses are included in discontinued operations, but to the extent that it relates to the platform, those continue to be included in our numbers. So yes, I don't think I see anything else there to of note.

Okay, thanks for answering the questions.

Manuel Navas, Piper Sandler.

Good afternoon, guys. Can you talk to the pipeline a bit more? I appreciate that the revenue increases this quarter was from someone that you guys had almost paused, and then they ramped up again. And you have a number of partners coming online this year and early next year, and the pipeline seems to be added one.

Just kind of talk through it a little bit and what our expectations and how quickly things ramp. I know there's usually not all the revenues hit it right away but just give us an update on pipeline expectations.

Yeah, no problem, Manuel. I had mentioned last quarter the pipeline was stronger than I had seen it in eight years at the bank, and I would just say it's continuing to compound. The pipeline slide in our deck gives you some details there, but we did disclose another signed contract during Q3. It's a payments partner, which is an important milestone for us.

And so, we're highlighting both a new prepaid partner last quarter, a new payments partner contract this quarter, both of which are signed. We haven't been able to release kind of any formal announcements on either of them yet. But generally, we're really happy with the results of the sales efforts and the contracts that are coming through.

And then with this, that's what's to come. Anything else to discuss about what happened with Upstart? And is there anyone else that you would consider tenuous at the moment?

So with Upstart, I think, first off, it was mutually agreed to end the relationship effective September 30. As we noted in the prepared remarks, Upstart contributed an immaterial amount of originations and an immaterial amount of revenue in the third quarter. The termination is not expected to have any material impact on financial condition or results of operations, and we continue to have no meaningful credit exposure there.

Upstart has been a great partner for us since 2019. We're proud of the customers that we've served. We wish them the best, but we're also very happy to have delivered $2.1 billion in originations with no material contribution from Upstart.

Do you sense any other partners that are on the way out?

Yeah, I'll take that one, Manuel. This is Kent. We do have a couple that have made their intentions clear that they are thinking of pursuing a charter. One is actually pursuing a bank. We just wanted to note that both those agreements run into late 2028 and early 2029, which gives us time to replace partners. But even with the charter, a sponsor bank relationship keeps its value for certain products and capabilities.

Just generally speaking, though, a charter makes sense for certain well-established fintechs where the advantages outweigh the significant lift of becoming a bank. But most of our partners still sit in the middle of the bell curve and our target market is really focused on fintechs that would be less interested in becoming a bank. And importantly, we've always operated on the premise that we'll exit partners for one reason or another from time to time. So that's why we build a scalable platform. We added payments and cards, and we've built out a great sales team.

I appreciate that. Shifting over the balance sheet, the credit enhanced loan increase is welcome. I have to track, you removed some of the credit card piece from Tallied, but based on what's in there now, what's kind of a growth, is there anything you can tell us about growth potential for those balances and for the overall loan portfolio?

Yeah. So I can start first with like the credit enhanced piece, Manuel. It's been a successful product for us. We're happy to have delivered meaningful growth this quarter. And it's a good example, I think, that like the direction of travel with all of our products at the bank is very positive. But quarter to quarter, it can be challenging to forecast when exactly a growth engine kicks in or when it turns up into a higher gear. But we grew this from virtually $0 million to $100 million in a couple of quarters, growth then slowed and now it kicked back up.

Looking forward, I would say most of the long-term growth will have to come from new partners there that we launch. The organic growth in Q4 is likely to be another $20 million or 15% on top of the balances that we just reported by the end of the year. And then for modeling purposes, I would probably use a 5% growth rate on that balance next year until new partners can be launched. But like I said, it's been a successful product for us and we're confident we'll continue to deliver for shareholders with it.

And at the moment, no existing partners are adding to that enhance, but you do have some pipeline partners that should be adding to that enhanced over the next two quarters.

So I would say that the organic growth right between, let's say, the end of for Q4 and then the 5% growth rate that I just mentioned for 2027 balances, that is all organic. As far as partners in the pipeline, there's tons of new partners across payments, cards, credit enhanced balance sheet, some of which are disclosed. I think it's on slide 12 of our investor deck, but ultimately to move beyond that $20 million pickup in Q4 and then a 5% growth rate on those balances in '27, to get beyond that, we need new partners to launch with that product.

Okay, I'll step back into the queue, but I might be back.

Joe Yanchunis, Raymond James.

Hey, guys, thanks for asking my questions and I apologize if some of this is very discussed. I hopped on a little late, so just tell me to read the transcript if it has.

Did you guys discuss the new originations, the massive leap this quarter, and what that would impact or what you're kind of expecting in 4Q? Because I'm assuming that full-year outlook is a little stale, and then kind of given that strength in the student lending and the rapid growth in credit-enhanced relationships, just updated expectations for what you expect in 2027.

So, we had talked about that a little bit at the beginning, Joe, but so we would anticipate that, during the third quarter, we had two significant events, one of which was the -- excuse me, the high level of originations from the new partner that we had been monitoring and we had set things up and had been waiting for some time for everything to work and for them to really launch their program, which was big.

And then the second item that drove the origination volume was the size of the credit card activity. That was, not credit card activity, my apologies, is the size of the student lending activities. Which the origination volume was, again, significantly greater than what we anticipated.

Okay. And, looking at the updated pipeline slide, you've got four signed agreements, so there are five signed term sheets. With most of those programs looking to expect to launch over the next three quarters. Can you help us understand how meaningful those relationships could be financially once fully ramped? And whether the majority of the revenue should come towards the end of '27, or is that more of a 2028 event?

So on the last piece of your question, it really depends on when they launch here, Joe. If they're launching and the piloting stage gets off quickly, and then it's going to be more of a -- end of '27. But somewhere between the end of '27 and into '28 is when that pipeline would start to monetize or be revenue producing for the bank. As far as just helping you gauge size, we did speak to the fact that the partners that are in pipeline, they're either under contract or under term sheet, they're generally larger, meaning more mature and also meaning greater long-term revenue potential for us.

We're not going to, and we haven't put a kind of a revenue figure on the pipeline, just like we don't bake new partners into our origination guidance, and so we have more of a track record with them, but we are trying to give you, as much disclosure and insight as we can into, how -- I think how productive and successful that pipeline is becoming and all of it really stems back to the investments that we made to broaden the products that we offer across cards and payments. And you saw us announce our first prepaid partner last quarter, our first payments contract this last quarter, so I think overall we're really pleased with the efforts of the sales team.

Okay, that's helpful. And then looking at the expense side, I noticed that the headcount across IC compliance and risk management, BSA AML, it declined sequentially while the total headcount increased just a little bit. At the same time, the NIE excludes credit enhanced, increases.

Can you help us understand how much that increase reflects temporary Tallied integration costs versus permanent investment in personnel infrastructure? And it would be a reasonable quarterly expense run rate, that we could use as a jumping off point to 2027.

Okay, I'll speak to that. We don't guide to, expenses. Third quarter numbers include the Tallied team and other costs to improve the program. Some of those costs are embedded in the discontinued operations. Of those costs, other of those costs related to the platform are included in operating expenses.

Our focus is on generating growth that outpaces expenses and will improve our core efficiency, although that path may not be linear. We have talked about increasing our spend as necessary to support our growth in partners and new partners and partner revenue growth. At this time, I'm not aware of anything that would change my view in regards to the expenses. I do look for some of those expenses to be moderated related to Tallied that is included in that court, that is included in the continuing operations.

Okay. Last one for me here kind of doing a pivot on the current partners. I guess aside from Upstarter, are you aware of any of your other partners that are pursuing a bank charter?

Yeah, we have two partners that have indicated that they would be pursuing a bank charter. The agreements on those run into late '28 and early '29, which gives us time to replace them. But one of the most important things here is we built a platform that and a sales team out that really is designed to increase the number of partners, we've always assumed partners would leave for one reason or another and this just ensures that that pipeline means that it's maintained as fresh and that we're getting new partners in and when we look for new partners, we're looking very carefully at those who might be less interested at pursuing a fintech charter. Does that help?

No, that was very helpful. And is has the way you write these contracts changed you know for you know protections I know you just mentioned that some of these ones run through '28, '29 have the way you write these contracts changed to protect the bank from you know this type of activity for how does that always come in place there?

There's no specific language in there that protects the bank from that, so they could stop originating with the bank if they chose to, but we've had very good open conversations with both these partners and there are products that they're interested in offering with us, through us, even if they do get the charter.

But is there any exclusivity where you would have that type of product? Should they receive that bank charter?

No. Exclusivity, just to give you a little background, is a difficult one here because partners always try and avoid a single point of failure if the bank gets in trouble that is supporting them. And we actually encourage partners at certain levels to find other partners. And so, we're co-partners with other banks on a fintech or two. So it's very standard practice to not have those exclusivity clauses in your contracts.

It's interesting. Been very helpful. Well, thank you for taking my questions.

Yeah.

Manuel Navas, Piper Sandler.

Just to kind of dig in here, I can look at this quarter as fully including Tallied expenses, but the Tallied expenses might shift around a bit. It sounds like it sounds like you're they might decline. Is that is that the right way to think about the run rate?

Yeah, so when we bring a when we do and this was a purchase of assets and assumption liabilities transaction of a business accounted for as accounted for as a -- acquisition of a business and anytime you do an acquisition, you're going to have some upfront, heavy costs upfront, whether they be legal to execute on the transaction and then just the ongoing run rate for that business. But as you bring that business on and integrate those activities into our core business, those expenses we should see declined some.

Do you have a sense for that? Amount, and if there's any other cost savings you expect to have on top of that?

We don't guide, provide guidance as to expenses, and I don't have a number that I could share with you anyway.

Okay. Separately, the bargain based on gain is great. You bought back 1% of shares. You still traded well below tentable value. You're doing that trading plan. Do you speak to the buyback pace going forward? What is that?

So the buyback plan is our policy provides that we maintain a consolidated bank leverage ratio at least 5% above the well-capitalized level, so 13% with an early warning tripwire at 14%. The guidance from our Board is to buy back as much as is available and complies with the rules on share buyback as long as the buyback price is below book value.

As you know, we're not a heavily traded stock. And when we apply the 25% rule, it limits the amount that we can repurchase. But we've done as much as we can in every day in the market that we've been able to access the market. One thing that Jim referenced in his comments is that we will, we have, the Board has approved us implementing a 10b5-1 election whereby we can continue to buy back shares during the blackout period, which is something that we did not have in place as we went into the third quarter quiet period of the second half of September and then the entire month of October.

So that will also be different. So we're buying back as much as we can within those parameters.

In essence, this last quarter. You were able to buy back 159,000 shares, but you'll be able to do it in more days in the fourth quarter, potentially.

Yes, we should be able to do that with more days because we'll the 75-1 (sic -- 10b5-1) program in place. So we should be able to buy all the way through the end of the year and through January.

Your concentration levels, you have the slide where you talk about your top three. Fintech programs were 50% of originations. Do you have a sense for how much your top three produce across all your revenues? You talk to customers.

Yes.

Just trying to figure.

Out what we do as well, but we don't disclose it. What we did try to do when we did that slide is to give you a metric, that you can kind of gauge. So we certainly do internally, it's not something we've disclosed publicly, but I think generally with a lot of the other things that we talked about today, you can see the direction of the travel, right, you can see that origination volume becoming more diffused amongst partners, you can see less reliance on heavy originators and I think especially with the disclosure on Upstart and leaving that agreement, -- the bank leaving that agreement.

I think to post $2.1 billion in originations with no material contribution from Upstart is also indicative of just the diversification that we built into the business over the years and you'll continue to see built out in the business. Like when you look at that sales pipeline and you see those payment partners on there, that's not a product that we had two years ago. So I would just point to the direction of travel generally.

One other -- the last one, I think, but it might be thorny. The main place where core revenues grew most was net interest income, ex-credit enhancement, a very core net interest income. And that allowed for an increase in adjusted NIM. That moved in a different direction than you've kind of been expecting it to go. Can you kind of describe why?

I know from here, you kind of expected that particular metric of NIN to come down. The reported NIN will keep rising. But can you talk about those forces? Why did it not go in the direction you expected it? And then why is it going to shift direction going forward?

If the net interest margin on a particular client that we have in the credit enhanced program exceeds that average interest rate that we had on the non-credit enhanced portfolio, and I'm talking again after excluding the credit enhanced accounting anomalies, that's going to pull that rate up. But I think that you can't look at one quarter and say, okay, things have changed dramatically.

I would also note there is the reference in the earnings release that there was a tax interest income number for a large refund that we had been waiting for roughly three years and that goes into the net interest margin too and helped to drive that up, but so you can't look at just one quarter and say that's not what we're expecting. It's going to be up and down, and we did have that anomaly in the third quarter with this tax interest income.

That's helpful. I will look for that refund. I'm good for now. I appreciate this. Thank you for the commentary.

No problem. Thank you.

(Operator Instructions) This now concludes our question-and-answer session. Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference.

Please disconnect your lines and have a wonderful day.