DEF 14A: FinWise Bancorp Announces Annual Shareholder Meeting and Proxy Statement

FinWise Bancorp has scheduled its annual shareholder meeting for June 27, 2024, to elect directors, approve amendments to the stock option plan, and ratify the appointment of its independent auditor.

Summary

• FinWise Bancorp will hold its Annual Meeting of Shareholders on June 27, 2024, at 10:00 a.m. local time at Jordan Commons Megaplex Theatres, Capra Room, 9335 South State Street, Sandy, UT 84070.
• Shareholders of record as of April 29, 2024, are entitled to vote at the meeting.
• The meeting will address the election of three directors for a three-year term ending at the 2027 annual meeting, approval of an amendment to the 2019 Stock Option Plan to increase the number of shares available for issuance, and ratification of Moss Adams LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2024.
• The Board of Directors recommends voting FOR each director nominee, FOR the approval of the amendment to the 2019 Stock Option Plan, and FOR the ratification of Moss Adams LLP.
• The company had 12,793,555 shares of common stock issued and outstanding as of the record date.
• The Board of Directors has set the current size of the Board at eight (8) members.
• The Board is divided into three classes of directors serving staggered three-year terms.

Sentiment

Score: 7

Explanation: The document is a standard proxy statement, presenting information in a neutral and factual manner. The board's recommendations are positive, but overall, the sentiment is moderately positive due to the routine nature of the content.

Positives

• The Board of Directors is actively engaged in corporate governance, with regular meetings and committees overseeing key areas such as audit, compensation, and nominations.
• The company is providing electronic access to proxy materials to reduce environmental impact and costs.
• The Board of Directors recommends shareholders vote FOR all proposals.

Future Outlook

The company aims to continue attracting and retaining talented personnel through equity-based incentives, aligning their interests with those of shareholders and promoting the long-term success of the business.

Management Comments

• The Companys Board of Directors has determined that each of the proposals that will be presented to the shareholders for their consideration at the Annual Meeting are in the best interests of the Company and its shareholders, and unanimously recommends and urges you to vote FOR each director nominee, FOR approval of the proposed amendment to the FinWise Bancorp 2019 Stock Option Plan to increase the number of shares of common stock available for issuance under such plan, and FOR ratification of Moss Adams LLP as the Companys independent registered public accounting firm for the fiscal year ending December 31, 2024.
• Kent Landvatter, Chief Executive Officer: 'On behalf of the Board of Directors and all of the employees of the Company, we thank you for your continued support.'

Industry Context

This announcement is typical for publicly traded companies as they prepare for their annual shareholder meetings, addressing standard governance matters such as director elections, auditor ratification, and executive compensation plans. The focus on equity-based compensation aligns with industry practices to incentivize executives and align their interests with shareholder value.

Comparison to Industry Standards

• The structure of FinWise Bancorp's board, with staggered terms and independent directors, aligns with common corporate governance practices observed in publicly listed companies.
• The use of a compensation committee to oversee executive compensation and benefit plans is a standard practice among publicly traded companies, ensuring independent oversight of executive pay.
• The process of seeking shareholder approval for equity compensation plans and auditor ratification is consistent with regulatory requirements and industry norms for corporate governance.

Related Party Transactions

• In 2014, we launched our SBA 7(a) lending program and began receiving loan referrals from Business Funding Group, LLC (BFG), a nationally significant referral source of SBA loans and the Banks primary SBA referral source.
• We are party to a Standstill Agreement with BFG, dated January 19, 2016 (the Standstill Agreement), whereby BFG agreed, among other things, not to acquire shares of our common stock, participate in the solicitation of proxies or otherwise seek to acquire control of our Company.
• To further strengthen our relationship with BFG, we obtained a right of first refusal and an option to acquire 100% of BFG.
• On July 25, 2023, we entered into a Membership Purchase Agreement, as amended (the 'Purchase Agreement') with BFG and four members of BFG ('Sellers').
• Pursuant to the Purchase Agreement, we acquired an additional 10% non-voting ownership interest in BFG (the 'Transaction').
• On February 5, 2024, the Transaction was consummated and we issued in the aggregate 339,176 shares of our Common Stock, par value $0.001 per share, in a private placement to the Sellers in exchange for their 10% aggregate non-voting ownership interest in BFG.
• Following Mr. Weichselbaums resignation from the Board on May 7, 2021, the Company and Mr. Alan Weichselbaum entered into a secured promissory note, dated as of August 6, 2021 (the 2021 Note), pursuant to which Mr. Weichselbaum borrowed $143,410 in principal amount from us to pay an aggregate exercise price of the same amount for his exercise of stock options to purchase an aggregate of 30,000 shares of our common stock on August 6, 2021.
• Subsequent to the entry into the 2021 Note, the Company and Mr. Weichselbaum entered into a new secured promissory note, dated as of June 1, 2022 (the 2022 Note), with the same principal amount as the 2021 Note.
• On October 21, 2022, Mr. Weichselbaum repaid in full the $143,410 aggregate principal amount plus $2,232 in interest owed under the 2022 Note in accordance with its terms.

Stakeholder Impact

• Shareholders have the opportunity to influence the company's direction through voting on key proposals.
• Employees may be affected by changes to the stock option plan, which impacts their compensation and incentives.
• The selection of an independent auditor ensures the integrity of financial reporting, impacting investor confidence.

Next Steps

• Shareholders are encouraged to vote on the proposals outlined in the proxy statement.
• The company will file a Current Report on Form 8-K with the SEC within four business days after the Annual Meeting to disclose the voting results.

Key Dates

Keywords

Annual Meeting, Proxy Statement, Shareholders, Board of Directors, Stock Option Plan, Director Election, Moss Adams, Audit Committee, Corporate Governance, FinWise Bancorp