KBRA Affirms Ratings for Spend Life Wisely Company, Inc. and Revises Outlook to Positive
20 Feb 2026 | New York
KBRA affirms the senior unsecured debt rating of BBB-, the subordinated debt rating of BB+, and the short-term debt rating of K3 for Durant, Oklahoma based Spend Life Wisely Company, Inc. ("SLW", or "the company"). In addition, KBRA affirms the deposit and senior unsecured ratings of BBB, the subordinated debt rating of BBB-, and the short-term debt and deposit ratings of K3 for its primary subsidiary, First United Bank and Trust Company. The Outlook for all long-term ratings is revised to Positive from Stable.
Key Credit Considerations
The Positive Outlook reflects KBRA’s view of SLW’s shift in capital management, which has included slower balance sheet growth, improved earnings generation, and a $50 million common equity raise completed in 4Q25 ($30 million in new common equity and $20 million of preferred stock converted to common), resulting in approximately a 170 bp increase in its CET1 ratio since YE23 (SLW reported a CET1 ratio of 10.0% at 4Q25). The company has also committed to continuing to build capital, with ratios expected to track more in line with higher rated peers over the long term.
Additionally, while still somewhat elevated relative to pre-pandemic levels, wholesale funding usage has decreased to 20% of total liabilities at 4Q25, down from a peak of 30% at 2Q24. SLW has meaningfully improved its funding mix, reducing brokered deposits and FHLB borrowings by approximately $1.1 billion in 2025, supported by limited loan growth and solid core deposit growth of approximately 8% during the year. As observed across the industry, earnings have benefited from the 175 bps of rate cuts implemented by the FOMC since late 2024. However, given its improved funding profile and deposit costs now tracking more in line with rated peers, SLW has reported a more pronounced improvement in earnings in 2025.
Headwinds remain, including the gradual runoff (approximately 7% expected in 2026) of its inflated residential mortgage portfolio and a continued weak mortgage banking environment. Nevertheless, the company should experience modest NIM expansion in 2026 as cash flows from the residential mortgage portfolio are reinvested into higher-yielding assets over time. SLW reported favorable asset quality trends in 2H25, including a meaningful reduction in NPAs. Moreover, despite its slightly elevated NPAs, credit losses have consistently tracked near historical lows, with the NCO ratio at or below 0.3% since 2012.
Rating Sensitivities
The Positive Outlook reflects KBRA’s view that a rating upgrade is likely over the medium term. Should SLW continue to build on recent improvements in its capital and funding profiles — including maintaining a CET1 ratio more closely aligned with the rated peer average (~11.5% as of 4Q25) — while sustaining stable asset quality, an upgrade would likely occur. Conversely, a return to more aggressive capital management or a material deterioration in asset quality, including loss rates tracking meaningfully above those of rated peers, could result in negative rating action.
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