FMP

FMP

Enter

FinWise Bancorp's Financial Health Compared to Peers

- (Last modified: Dec 23, 2024 8:02 AM)

twitterlinkedinfacebook
blog post cover photo

Image credit: Google Images

  • FinWise Bancorp's ROIC is 6.27%, indicating it is not generating sufficient returns to cover its WACC of 10.70%.
  • Despite a higher ROIC, Third Coast Bancshares faces challenges due to a significantly higher WACC, impacting its overall efficiency.
  • Five Star Bancorp leads with the highest ROIC to WACC ratio of 1.32, demonstrating exceptional capital efficiency.

FinWise Bancorp (NASDAQ:FINW) is a financial institution that provides a range of banking services. The company operates in a competitive landscape alongside peers such as Third Coast Bancshares, Southern States Bancshares, USCB Financial Holdings, Five Star Bancorp, and Primis Financial Corp. These companies are evaluated based on their ability to generate returns relative to their cost of capital, a crucial metric for assessing financial health.

FinWise Bancorp's Return on Invested Capital (ROIC) is 6.27%, which is lower than its Weighted Average Cost of Capital (WACC) of 10.70%. This indicates that the company is not generating sufficient returns to cover its cost of capital. The ROIC to WACC ratio of 0.59 further highlights this inefficiency in capital utilization.

In comparison, Third Coast Bancshares has a higher ROIC of 7.82% but also a significantly higher WACC of 19.78%, resulting in a lower ROIC to WACC ratio of 0.40. This suggests that despite a better ROIC, the high cost of capital impacts its overall efficiency.

Southern States Bancshares, with a ROIC of 13.87% and a WACC of 11.49%, achieves a ROIC to WACC ratio of 1.21. This indicates that the company is generating returns above its cost of capital, showcasing better capital efficiency compared to FinWise Bancorp.

Five Star Bancorp leads the peer group with a ROIC of 14.82% and a WACC of 11.25%, resulting in the highest ROIC to WACC ratio of 1.32. This demonstrates exceptional capital efficiency, as the company generates returns significantly above its cost of capital, setting a benchmark for its peers.

Other Blogs

May 14, 2024 11:41 AM - Sanzhi Kobzhan

The easiest way to calculate stock’s target price and why the target price is important.

A stock's target price, also known as its fair value, is an indication of what a share can cost based on the company’s forecasted financial statements. It is important to know a stock's fair value to find undervalued stocks with great growth potential. Let's consider how investment analysts calculat...

blog post title

May 24, 2024 9:30 AM - Rajnish Katharotiya

How to Access and Analyze Earnings Call Transcripts

Earnings call transcripts are invaluable resources for investors, analysts, and financial enthusiasts. They provide insights into a company's performance, strategy, and future outlook, making them essential for making informed investment decisions. With Financial Modeling Prep, Earnings Call Transcr...

blog post title

May 27, 2024 3:30 PM - Rajnish Katharotiya

The best 5 GPU stocks other than NVDA

In the ever-evolving world of technology, certain sectors have consistently demonstrated exceptional growth and innovation. The graphics processing units (GPUs) industry is one such sector, offering investors a golden opportunity for potentially high returns. In this blog, we'll delve into why inves...

blog post title
FMP

FMP

Financial Modeling Prep API provides real time stock price, company financial statements, major index prices, stock historical data, forex real time rate and cryptocurrencies. Financial Modeling Prep stock price API is in real time, the company reports can be found in quarter or annual format, and goes back 30 years in history.
twitterlinkedinfacebookinstagram
2017-2024 © Financial Modeling Prep