EX-99.1 2 ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

The Bancorp, Inc. Reports Second Quarter Financial Results 

 

Wilmington, DE – July 24, 2025 – The Bancorp, Inc. (“The Bancorp” or the “Company” or “we” or “our”) (NASDAQ: TBBK), a financial holding company, today reported its financial results for the second quarter of 2025.

 

Highlights

 

·The Bancorp reported net income of $59.8 million, or $1.27 per diluted share (“EPS”), for the quarter ended June 30, 2025, compared to net income of $53.7 million, or $1.05 per diluted share, for the quarter ended June 30, 2024, or an EPS increase of 21%. While net income increased 11% between these periods, outstanding shares were reduced as a result of share repurchases.

 

·Return on assets and return on equity for the quarter ended June 30, 2025, amounted to 2.6% and 28%, respectively, compared to 2.8% and 27%, respectively, for the quarter ended June 30, 2024 (all percentages “annualized”).

 

·Net interest income increased 4% to $97.5 million for the quarter ended June 30, 2025, compared to $93.8 million for the quarter ended June 30, 2024. Certain loan fees on consumer fintech loans are recorded as non-interest income. Such non-interest income amounted to $4.0 million for the quarter ended June 30, 2025 and $140,000 for the quarter ended June 30, 2024. The second quarter of 2025 included $3.1 million of interest income from a security that was known as “CRE-2” and which was related to the Company’s discontinued commercial real estate securitization business. The CRE-2 interest was repaid in the quarter as a result of the final sale of underlying collateral related to that security. CRE-2 was the last security remaining related to the Company’s discontinued commercial real estate securitization business.

 

·Net interest margin amounted to 4.44% for the quarter ended June 30, 2025, compared to 4.97% for the quarter ended June 30, 2024, and 4.07% for the quarter ended March 31, 2025.

 

·Loans, net of deferred fees and costs were $6.54 billion at June 30, 2025, compared to $5.61 billion at June 30, 2024 and $6.38 billion at March 31, 2025. Those changes reflected an increase of 2% quarter over linked quarter and an increase of 17% year over year.

 

·Gross dollar volume (“GDV”), representing the total amounts spent on prepaid, debit and credit cards totaled $43.65 billion, an increase of $6.51 billion, or 18%, for the quarter ended June 30, 2025, compared to the quarter ended June 30, 2024. The increase reflected continued organic volume growth with existing partners and products and the impact of new products launched within the past year. Total prepaid, debit card, ACH, and other payment fees increased 14% to $31.7 million for the second quarter of 2025 compared to the second quarter of 2024. Consumer credit fintech fees amounted to $4.0 million for the second quarter 2025.

 

·Consumer fintech loans of $680.5 million increased 19% compared to a $574.0 million balance at March 31, 2025 and increased 871% compared to the June 30, 2024 balance of $70.1 million. Consumer fintech loans include $346.9 million of secured credit card accounts, which are backed dollar for dollar by cash collateral by each individual cardholder and are required to be repaid in-full monthly. The remaining Consumer fintech loans consist of cashflow underwritten short-term liquidity products to individual borrowers ranging in maturities from 30 to 365 days, with The Bancorp Bank, N.A.’s partner(s) providing a full guarantee against losses. The Bancorp Bank N.A. maintains cash collateral for the expected losses on dollars already lent, as well as right of offset against other revenues generated through those relationships.

 

·As previously disclosed in the Current Report on Form 8-K the Company filed on July 14, 2025, the Bank amended its Master Services Agreement dated December 12, 2023 with Block, Inc. (“Block”) by entering into a Card Issuing Addendum which provides for debit and prepaid card issuance and related services for Cash App customers. The initial term of the Card Issuing Addendum is for a period of five (5) years. The Bank expects the expansion of these services to Block to begin in 2026 and will provide material updates on the program as it progresses through the implementation cycle.

 

·Small business loans (“SBLs”), including those held at fair value, amounted to $1.05 billion at June 30, 2025, or 11% higher year over year, and 4% higher quarter over linked quarter, excluding the impact of loans with related secured borrowings.

 

·Direct lease financing balances decreased 2% year over year to $698.1 million at June 30, 2025, and decreased 2% from March 31, 2025.

 

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·Real estate bridge loans (“REBL”) portfolio of $2.14 billion decreased 3% compared to a $2.21 billion balance at March 31, 2025, and increased 1% compared to the June 30, 2024 balance of $2.12 billion. These real estate bridge loans consist entirely of rehabilitation loans for apartment buildings. The Company’s $2.14 billion REBL portfolio at June 30, 2025, has a weighted average origination date “as is” loan-to-value ratio of 70%, based on third-party appraisals.

 

·Security backed lines of credit (“SBLOC”), insurance backed lines of credit (“IBLOC”), and investment advisor financing loans collectively increased 4% year over year and increased 2% quarter over linked quarter to $1.87 billion at June 30, 2025.

 

·The average interest rate on $8.18 billion of average deposits and interest-bearing liabilities during the second quarter of 2025 was 2.23%. Average deposits of $8.06 billion for the second quarter of 2025 increased $1.34 billion, or 20% over second quarter 2024.

 

·As of June 30, 2025, the Company’s Tier 1 capital to average assets (leverage), Tier 1 capital to risk-weighted assets, total capital to risk-weighted assets and common equity Tier 1 to risk-weighted assets ratios were 9.40%, 14.42%, 15.45% and 14.42%, respectively, compared to well-capitalized minimums of 5%, 8%, 10% and 6.5%, respectively. The Bancorp Bank, N.A. also remains well capitalized under banking regulations.

 

·Book value per common share at June 30, 2025, was $18.60 compared to $15.77 per common share at June 30, 2024, an increase of 18%.

 

·The Bancorp repurchased 753,898 shares of its common stock at an average cost of $49.75 per share during the quarter ended June 30, 2025. As a result of share repurchases, outstanding shares, net of treasury shares, at June 30, 2025 amounted to 46.3 million, compared to 49.3 million shares at June 30, 2024, or a reduction of 6%.

 

·The vast majority of The Bancorp’s funding is comprised of FDIC-insured and/or small balance accounts, which adjust to only a portion of changes in rates. The Company also has lines of credit with U.S. government sponsored agencies totaling approximately $3.08 billion as of June 30, 2025, as well as access to other forms of liquidity.

 

·In the second quarter of 2024, the Company purchased approximately $900 million of fixed-rate, government-sponsored-entity-backed commercial and residential mortgage securities of varying maturities, with an approximate 5.11% weighted average yield, and estimated weighted average lives of eight years, to reduce its exposure to lower levels of net interest income. Such purchases would also reduce the additional net interest income which will result if the Federal Reserve increases rates. While there are many variables and limitations to estimating exposure to changes in rates, such purchases and continuing fixed rate loan originations are projected to reduce such exposure to modest levels. In prior years, The Bancorp deferred adding fixed rate securities when yields were particularly low, which has afforded the flexibility to benefit from, and secure, more advantageous securities and loan rates.

 

 

“The Bancorp had another quarter of Fintech growth and momentum,” said Damian Kozlowski, CEO of The Bancorp. He also noted that “We continue to have significant relationship and product expansion that we believe will drive future growth. We are continuing to maintain our guidance of $5.25 earnings per share for 2025.  We are also announcing Project 7.  We are targeting at least a $7 earnings per share run-rate by the fourth quarter of 2026.  We plan to accomplish this goal through Fintech revenue growth, buybacks of shares, and efficiency and productivity gains by reallocating or reducing resources where appropriate.”

 

 

Conference Call Webcast

 

You may access the LIVE webcast of The Bancorp’s Quarterly Earnings Conference Call at 8:00 AM ET Friday, July 25, 2025, by clicking on the webcast link on The Bancorp’s homepage at www.thebancorp.com or you may dial 1.800.549.8228, conference ID 45285. You may listen to the replay of the webcast following the live call on The Bancorp’s investor relations website (archived for one year) or telephonically until Friday, August 1, 2025, by dialing 1.888.660.6264, playback code 45285#.

 

About The Bancorp

 

The Bancorp, Inc. (NASDAQ: TBBK), headquartered in Wilmington, Delaware, through its subsidiary, The Bancorp Bank, National Association, provides a variety of services including providing non-bank financial companies with the people, processes, and technology to meet their unique banking needs. Through its Fintech Solutions, Institutional Banking, Commercial Lending, and Real Estate Bridge Lending businesses, The Bancorp provides partner-focused solutions paired with cutting-edge technology for companies that range from entrepreneurial startups to Fortune 500 companies. With over 20 years of experience, The Bancorp has become a leader in the financial services industry, earning recognition as the #1 issuer of prepaid cards in the U.S., a nationwide provider of bridge financing for real estate capital improvement plans, an SBA National Preferred Lender, a leading provider of securities-backed lines of credit, with one of the few bank-owned commercial vehicle leasing groups. By its company-wide commitment to excellence, The Bancorp has also been ranked as one of the 100 Fastest-Growing Companies by Fortune, a Top 50 Employer by Equal Opportunity Magazine and was selected to be included in the S&P Small Cap 600. For more about The Bancorp, visit https://thebancorp.com/.

 

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Forward-Looking Statements

 

Statements in this earnings release regarding The Bancorp’s business that are not historical facts, are “forward-looking statements.” These statements may be identified by the use of forward-looking terminology, including, but not limited to the words “intend,” “may,” “believe,” “will,” “expect,” “look,” “anticipate,” “plan,” “estimate,” “continue,” or similar words. Forward-looking statements include, but are not limited to, statements regarding our anticipated 2025 results, future growth, productivity and efficiency, and share repurchases. Such forward-looking statements relate to our current assumptions, projections and expectations about our business and future events, including current expectations about important economic and political factors, among other factors, and are subject to risks and uncertainties, which could cause the actual results, events, or achievements to differ materially from those set forth in or implied by the forward-looking statements and related assumptions. Factors that could cause results to differ from those expressed in the forward-looking statements also include, but are not limited to the risks and uncertainties referenced or described in The Bancorp’s filings with the Securities and Exchange Commission, including the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s Annual Report on Form 10-K/A, as amended, for the fiscal year ended December 31, 2024 and other documents that the Company files from time to time with the Securities and Exchange Commission. The forward-looking statements speak only as of the date of this press release. The Bancorp does not undertake any duty to publicly revise or update forward-looking statements in this press release to reflect events or circumstances that arise after the date of this press release, except as may be required under applicable law.

 

The Bancorp, Inc. Contact

Andres Viroslav

Director, Investor Relations

215-861-7990

andres.viroslav@thebancorp.com

 

Source: The Bancorp, Inc. 

 

 

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The Bancorp, Inc.

Financial highlights

(unaudited) 

                       
    Three months ended   Six months ended
    June 30,   June 30,
Consolidated condensed income statements 2025    2024    2025    2024 
  (Dollars in thousands, except per share and share data)
                       
Net interest income $  97,492    $  93,795    $  189,235    $  188,213 
Provision for credit losses on non-consumer fintech loans    1,494       1,477       2,368       3,840 
Provision for credit losses on consumer fintech loans    43,233       —      89,101       —
Provision (reversal) for unfunded commitments    (364)      (225)      (253)      (419)
Non-interest income                      
Fintech fees                      
ACH, card and other payment processing fees    5,562       3,000       10,694       5,964 
Prepaid, debit card and related fees    26,113       24,755       51,827       49,041 
Consumer credit fintech fees    3,970       140       7,570       140 
Total fintech fees    35,645       27,895       70,091       55,145 
Net realized and unrealized gains (losses) on commercial loans, at fair value    344       503       705       1,599 
Leasing related income    2,131       1,429       4,103       1,817 
Consumer fintech loan credit enhancement    43,233       —      89,101       —
Other non-interest income    2,390       895       3,385       1,543 
Total non-interest income    83,743       30,722       167,385       60,104 
Non-interest expense                      
Salaries and employee benefits    37,134       33,863       70,803       64,143 
Data processing expense    1,227       1,423       2,432       2,844 
Legal expense    1,863       633       3,820       1,454 
FDIC insurance    1,202       869       2,255       1,714 
Software    5,144       4,637       10,157       9,126 
Other non-interest expense    10,653       10,021       21,050       18,877 
Total non-interest expense    57,223       51,446       110,517       98,158 
Income before income taxes    79,649       71,819       154,887       146,738 
Income tax expense    19,828       18,133       37,893       36,623 
Net income    59,821       53,686       116,994       110,115 
                       
Net income per share - basic $  1.28    $  1.05    $  2.49    $  2.12 
                       
Net income per share - diluted $  1.27    $  1.05    $  2.46    $  2.10 
Weighted average shares - basic    46,598,535       50,937,055       46,904,592       51,842,097 
Weighted average shares - diluted    47,182,770       51,337,491       47,565,580       52,327,122 

 

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Condensed consolidated balance sheets June 30,   March 31,   December 31,   June 30,
  2025 (unaudited)   2025 (unaudited)   2024   2024 (unaudited)
    (Dollars in thousands, except share data)
Assets:                      
Cash and cash equivalents                      
Cash and due from banks $  11,637    $  9,684    $  6,064    $  5,741 
Interest earning deposits at Federal Reserve Bank    328,628       1,011,585       564,059       399,853 
     Total cash and cash equivalents    340,265       1,021,269       570,123       405,594 
                       
Investment securities, available-for-sale, at fair value, net of $10.0 million allowance for credit loss effective December 31, 2023, and $0 at December 31, 2024    1,481,500       1,488,184       1,502,860       1,581,006 
Commercial loans, at fair value    185,476       211,580       223,115       265,193 
Loans, net of deferred fees and costs    6,535,432       6,380,150       6,113,628       5,605,727 
Allowance for credit losses    (59,393)      (52,497)      (44,853)      (28,575)
Loans, net    6,476,039       6,327,653       6,068,775       5,577,152 
Federal Home Loan Bank, Atlantic Central Bankers Bank, and Federal Reserve Bank stock    16,250       16,250       15,642       15,642 
Premises and equipment, net    26,495       27,130       27,566       28,038 
Accrued interest receivable    40,607       42,464       41,713       43,720 
Intangible assets, net    1,055       1,154       1,254       1,452 
Other real estate owned    66,054       67,129       62,025       57,861 
Deferred tax asset, net    12,436       13,585       18,874       20,556 
Credit enhancement asset    26,982       20,199       12,909       —
Other assets    166,072       149,130       182,687       149,187 
     Total assets $  8,839,231    $  9,385,727    $  8,727,543    $  8,145,401 
                       
Liabilities:                      
Deposits                      
Demand and interest checking $  7,705,813    $  8,283,262    $  7,434,212    $  7,095,391 
Savings and money market    60,122       81,320       311,834       60,297 
     Total deposits    7,765,935       8,364,582       7,746,046       7,155,688 
                       
Senior debt    96,391       96,303       96,214       96,037 
Subordinated debenture    13,401       13,401       13,401       13,401 
Other long-term borrowings    13,898       13,988       14,081       38,283 
Other liabilities    89,340       67,766       68,018       65,001 
     Total liabilities $  7,978,965    $  8,556,040    $  7,937,760    $  7,368,410 
                       
Shareholders' equity:                      
Common stock - authorized, 75,000,000 shares of $1.00 par value; 48,104,006 and 46,262,932 shares issued and outstanding, respectively, at June 30, 2025 and 49,267,403 shares issued and outstanding  at June 30, 2024    48,104       48,067       47,713       49,268 
Additional paid-in capital    12,608       7,470       3,233       72,171 
Retained earnings    896,149       836,328       779,155       671,730 
Accumulated other comprehensive income (loss)    1,609       (1,840)      (17,637)      (16,178)
Treasury stock at cost, 1,841,074 shares at June 30, 2025 and 0 shares at June 30, 2024, respectively    (98,204)      (60,338)      (22,681)      —
Total shareholders' equity    860,266       829,687       789,783       776,991 
                       
     Total liabilities and shareholders' equity $  8,839,231    $  9,385,727    $  8,727,543    $  8,145,401 

 

 

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Average balance sheet and net interest income   Three months ended June 30, 2025     Three months ended June 30, 2024
    (Dollars in thousands; unaudited)
    Average           Average     Average         Average
Assets:   Balance     Interest     Rate     Balance     Interest   Rate
                                 
Interest earning assets:                                
Loans, net of deferred fees and costs(1) $  6,560,873    $  112,188       6.84%   $  5,749,565    $  114,970     8.00%
Leases-bank qualified(2)    7,723       174       9.01%      4,621       117     10.13%
Investment securities-taxable(3)    1,462,603       22,393       6.12%      1,454,393       17,520     4.82%
Investment securities-nontaxable(2)    8,385       131       6.25%      2,895       50     6.91%
Interest earning deposits at Federal Reserve Bank    756,603       8,326       4.40%      341,863       4,677     5.47%
Net interest earning assets    8,796,187       143,212       6.51%      7,553,337       137,334     7.27%
                                 
Allowance for credit losses    (52,444)                  (28,568)          
Other assets    344,627                   266,061           
  $  9,088,370                $  7,790,830           
                                 
Liabilities and Shareholders' Equity:                                
Deposits:                                
Demand and interest checking $  7,991,121    $  43,402       2.17%   $  6,657,386    $  39,542     2.38%
Savings and money market    65,637       561       3.42%      60,212       457     3.04%
Total deposits    8,056,758       43,963       2.18%      6,717,598       39,999     2.38%
                                 
Short-term borrowings    439       5       4.56%      92,412       1,295     5.61%
Long-term borrowings    13,957       198       5.67%      38,362       685     7.14%
Subordinated debentures    13,401       257       7.67%      13,401       291     8.69%
Senior debt    96,333       1,233       5.12%      95,984       1,234     5.14%
Total deposits and liabilities    8,180,888       45,656       2.23%      6,957,757       43,504     2.50%
                                 
Other liabilities    62,505                   36,195           
Total liabilities    8,243,393                   6,993,952           
                                 
Shareholders' equity    844,977                   796,878           
  $  9,088,370                $  7,790,830           
Net interest income on tax equivalent basis(2)       $  97,556                $  93,830     
                                 
Tax equivalent adjustment          64                   35     
                                 
Net interest income       $  97,492                $  93,795     
Net interest margin(2)                4.44%                4.97%

  

(1) Includes commercial loans, at fair value. All periods include non-accrual loans.

(2) Full taxable equivalent basis, using 21% respective statutory federal tax rates in 2025 and 2024.

(3) The second quarter of 2025 included $3.1 million of interest income from a security that was known as “CRE-2” and which was related to the Company’s discontinued commercial real estate securitization business. The CRE-2 interest was repaid in the quarter as a result of the final sale of underlying collateral related to that security. CRE-2 was the last security remaining related to the Company’s discontinued commercial real estate securitization business.

 

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Average balance sheet and net interest income Six months ended June 30, 2025   Six months ended June 30, 2024
    (Dollars in thousands; unaudited)
  Average           Average   Average         Average
Assets: Balance   Interest     Rate   Balance   Interest   Rate
                                 
Interest earning assets:                                
Loans, net of deferred fees and costs(1) $  6,471,242    $  220,990       6.83%   $  5,733,413    $  229,130     7.99%
Leases-bank qualified(2)    6,793       313       9.22%      4,683       233     9.95%
Investment securities-taxable(3)    1,475,892       40,520       5.49%      1,093,996       27,154     4.96%
Investment securities-nontaxable(2)    7,326       236       6.44%      2,895       100     6.91%
Interest earning deposits at Federal Reserve Bank    945,453       21,006       4.44%      607,968       16,561     5.45%
Net interest earning assets    8,906,706       283,065       6.36%      7,442,955       273,178     7.34%
                                 
Allowance for credit losses    (48,700)                  (27,862)          
Other assets    354,939                   323,244           
  $  9,212,945                $  7,738,337           
                                 
Liabilities and Shareholders' Equity:                                
Deposits:                                
Demand and interest checking $  8,082,390    $  88,447       2.19%   $  6,553,107    $  78,256     2.39%
Savings and money market    100,966       1,891       3.75%      55,591       904     3.25%
Total deposits    8,183,356       90,338       2.21%      6,608,698       79,160     2.40%
                                 
Short-term borrowings    220       5       4.55%      46,892       1,314     5.60%
Repurchase agreements    —      —      —      6       —    —
Long-term borrowings    14,003       393       5.61%      38,439       1,371     7.13%
Subordinated debentures    13,401       512       7.64%      13,401       583     8.70%
Senior debt    96,289       2,467       5.12%      95,939       2,467     5.14%
Total deposits and liabilities    8,307,269       93,715       2.26%      6,803,375       84,895     2.50%
                                 
Other liabilities    80,651                   142,826           
Total liabilities    8,387,920                   6,946,201           
                                 
Shareholders' equity    825,025                   792,136           
  $  9,212,945                $  7,738,337           
Net interest income on tax equivalent basis(2)       $  189,350                $  188,283     
                                 
Tax equivalent adjustment          115                   70     
                                 
Net interest income       $  189,235                $  188,213     
Net interest margin(2)                4.25%                5.06%

 

(1) Includes commercial loans, at fair value. All periods include non-accrual loans.

(2) Full taxable equivalent basis, using 21% respective statutory federal tax rates in 2025 and 2024.

(3) The second quarter of 2025 included $3.1 million of interest income from a security that was known as “CRE-2” and which was related to the Company’s discontinued commercial real estate securitization business. The CRE-2 interest was repaid in the quarter as a result of the final sale of underlying collateral related to that security. CRE-2 was the last security remaining related to the Company’s discontinued commercial real estate securitization business.

 

 

 

 

  7 

 

 

  

Capital ratios Tier 1 capital   Tier 1 capital   Total capital   Common equity
  to average   to risk-weighted   to risk-weighted   Tier 1 to risk
  assets ratio   assets ratio   assets ratio   weighted assets
As of June 30, 2025              
The Bancorp, Inc.  9.40%    14.42%    15.45%    14.42%
The Bancorp Bank, National Association  10.33%    15.80%    16.83%    15.80%
"Well capitalized" institution (under federal regulations-Basel III)  5.00%    8.00%    10.00%    6.50%
               
As of December 31, 2024              
The Bancorp, Inc.  9.41%    13.85%    14.65%    13.85%
The Bancorp Bank, National Association  10.38%    15.25%    16.06%    15.25%
"Well capitalized" institution (under federal regulations-Basel III)  5.00%    8.00%    10.00%    6.50%

 

 

  Three months ended   Six months ended
  June 30,   June 30,
  2025   2024   2025   2024
Selected operating ratios                      
Return on average assets(1)    2.64%      2.77%      2.56%      2.86%
Return on average equity(1)    28.40%      27.10%      28.60%      27.95%
Net interest margin    4.44%      4.97%      4.25%      5.06%

 

(1) Annualized

 

 

Book value per share table June 30,   March 31,   December 31, June 30,
  2025   2025   2024   2024
Book value per share $  18.60    $  17.66    $  16.69    $  15.77 

 

 

                       
Gross dollar volume (GDV)(1) Three months ended
  June 30,   March 31,   December 31,   June 30,
  2025   2025   2024   2024
    (Dollars in thousands)
Prepaid and debit card GDV $  43,649,005    $  44,650,422    $  39,656,909    $  37,139,200 

 

(1) Gross dollar volume represents the total dollar amount spent on prepaid, debit and credit cards issued by The Bancorp Bank, N.A.

 

  8 

 

 

 

                             
Business line quarterly summary:
Quarter ended June 30, 2025
(Dollars in millions)
          Balances          
              % Growth          
Major business lines   Average approximate rates(1)     Balances(2)   Year over Year   Linked quarter annualized          
Loans                            
Institutional banking(3)   6.2%   $  1,873    4%   7%          
Small business lending(4)   7.3%      1,047    11%   15%          
Leasing   8.2%      698    (2%)   (7%)          
Commercial real estate (non-SBA loans, at fair value)   7.5%      109    nm   nm          
Real estate bridge loans (recorded at book value)   8.2%      2,140    1%   (13%)          
Consumer fintech loans - interest bearing   5.2%      60    nm   nm          
Consumer fintech loans - non-interest bearing(5)   —      620    nm   nm          
Weighted average yield   6.7%   $  6,547              Non-interest income
                            % Growth
Deposits: Fintech solutions group                       Current quarter   Year over Year
Prepaid and debit card issuance, consumer fintech loan fees, and other payments fees   2.2%   $  7,761    20%   nm   $  35.6    28%

 

(1) Average rates are for the three months ended June 30, 2025.

(2) Loan and deposit categories are based on period-end and average quarterly balances, respectively.

(3) Institutional Banking loans are comprised of SBLOC loans collateralized by marketable securities, IBLOC loans collateralized by the cash surrender value of eligible life insurance policies, and investment advisor financing.

(4) Small Business Lending is substantially comprised of SBA-guaranteed loans. Growth rates exclude the impact of $4 million of loans that do not qualify for true sale accounting at June 30, 2025 compared to $4 million at prior quarter end and $29 million at June 30, 2024.

(5) Income related to non-interest-bearing balances is included in non-interest income.

 

 

Summary of credit lines available

 

The Bancorp Bank, N.A. maintains lines of credit exceeding potential liquidity requirements as follows. The Bancorp also has access to other substantial sources of liquidity.

 

  June 30, 2025
    (Dollars in thousands)
Federal Reserve Bank $  2,049,770 
Federal Home Loan Bank    1,027,750 
Total lines of credit available $  3,077,520 

 

 

Estimated insured vs uninsured deposits

 

The vast majority of The Bancorp Bank, N.A.’s deposits are low balance, insured deposits, and accordingly do not constitute the liquidity risk experienced by certain institutions. The deposit base is comprised as follows.

  

  June 30, 2025
Insured   94%
Low balance accounts(1)   3%
Other uninsured   3%
Total deposits   100%

 

(1) Comprised of small balances, such as anonymous gift cards and corporate incentive cards for which there is no identified depositor.

 

  9 

 

 

 

                 
Allowance for credit losses   Six months ended   Year ended
  June 30,   June 30,   December 31,
  2025 (unaudited)   2024 (unaudited)   2024 
  (Dollars in thousands)
                 
Balance in the allowance for credit losses at beginning of period $  44,853    $  27,378    $  27,378 
                 
Loans charged-off:                
SBA non-real estate    171       417       708 
Direct lease financing    1,520       2,301       4,575 
Consumer - home equity    —      10       10 
Consumer fintech    89,627       —      19,619 
Other loans    704       6       8 
Total    92,022       2,734       24,920 
                 
Recoveries:                
SBA non-real estate    61       32       229 
Direct lease financing    429       59       318 
Consumer fintech    14,599       —      1,877 
Consumer - home equity    4       —      1 
Total    15,093       91       2,425 
Net charge-offs    76,929       2,643       22,495 
Provision for credit losses on non-consumer fintech loans    2,368       3,840       9,319 
Provision for credit losses on consumer fintech loans    89,101       —      30,651 
                 
Balance in allowance for credit losses at end of period $  59,393    $  28,575    $  44,853 
Net charge-offs/average loans    1.23%      0.05%      0.40%
Net charge-offs/average assets    0.84%      0.03%      0.28%

 

Loan portfolio

 

·The Bancorp Bank, N.A. emphasizes safety and soundness, and its balance sheet has a risk profile enhanced by the special nature of the collateral supporting its loan niches, related underwriting, and the characteristics of its funding sources, including those highlighted in the bullets below. Those loan niches and funding sources have contributed to increased earnings levels, even during periods in which markets have experienced various economic stresses.

 

·In its REBL portfolio, the Company has minimal exposure to non-multifamily commercial real estate such as office buildings, and instead has a portfolio largely comprised of rehabilitation bridge loans for apartment buildings. These loans generally have three-year terms with two one-year extension options to allow for the rehabilitation work to be completed and rentals stabilized for an extended period, before being refinanced at lower rates through U.S. Government Sponsored Entities or other lenders. The REBL portfolio consists primarily of workforce housing, which we consider to be working class apartments at more affordable rental rates. Related collateral values should accordingly be more stable than higher rent properties, even in stressed economies. While the macro-economic environment has challenged the multifamily bridge space, the stability of the Company’s REBL portfolio is evidenced by the estimated values of the underlying collateral. The Company’s $2.14 billion REBL portfolio at June 30, 2025, has a weighted average origination date “as is” loan-to-value ratio of 70%, based on third-party appraisals. Further, the weighted average origination date “as stabilized” LTV, which measures the estimated value of the apartments after the rehabilitation is complete may provide even greater protection.

 

·As part of the underwriting process, The Bancorp Bank, N.A. reviews prospective borrowers’ previous rehabilitation experience in addition to overall financial wherewithal. These transactions also include significant borrower equity contributions with required performance metrics. Underwriting generally includes, but is not limited to, assessment of local market information relating to vacancy and rental rates, review of post rehabilitation rental rate assumptions against geo-specific affordability indices, negative news searches, lien searches, visitations by bank personnel and/or designated engineers, and other information sources.

 

·Rehabilitation progress is monitored through ongoing draw requests and financial reporting covenants. This generally allows for early identification of potential issues, and expedited action to address on a timely basis.

 

·Operations and ongoing loan evaluation are overseen by multiple levels of management, in addition to the REBL team’s experienced professional staff and third-party consultants utilized during the underwriting and asset management process. This oversight includes a separate loan committee specific to REBL, which is comprised of seasoned and experienced lending professionals who do not directly report to anyone on the REBL team. There is also a separate loan review department, a surveillance committee, and additional staff which evaluate potential losses under the current expected credit losses methodology (“CECL”), all of which similarly do not report to anyone on the REBL team.

 

  10 

 

 

 

·SBLOC and IBLOC portfolios are respectively secured by marketable securities and the cash value of life insurance. The majority of SBA 7(a) loans are government guaranteed, while SBA 504 loans are made with 50%-60% LTVs.

 

·Additional details regarding our loan portfolios are included in the body of this press release and the related tables in this press release, as is the summarization of the earnings contributions of our payments businesses, which further enhances The Bancorp’s risk profile. The Company’s risk profile inherent in its loan portfolios, funding, and earnings levels, may present opportunities to further increase stockholder value, while still prudently maintaining capital levels.

 

 

 

 June 30,   March 31,   December 31,   June 30,
  2025 (unaudited)   2025 (unaudited)   2024   2024 (unaudited)
  (Dollars in thousands)
                       
SBL non-real estate $  204,087    $  191,750    $  190,322    $  171,893 
SBL commercial mortgage    723,754       681,454       662,091       647,894 
SBL construction    30,705       42,026       34,685       30,881 
Small business loans    958,546       915,230       887,098       850,668 
Direct lease financing    698,086       709,978       700,553       711,403 
SBLOC / IBLOC(1)    1,601,405       1,577,170       1,564,018       1,558,095 
Advisor financing    272,155       265,950       273,896       238,831 
Real estate bridge loans    2,140,039       2,212,054       2,109,041       2,119,324 
Consumer fintech(2)    680,487       574,048       454,357       70,081 
Other loans(3)    169,945       112,322       111,328       46,592 
     6,520,663       6,366,752       6,100,291       5,594,994 
Unamortized loan fees and costs    14,769       13,398       13,337       10,733 
Total loans, including unamortized fees and costs $  6,535,432    $  6,380,150    $  6,113,628    $  5,605,727 

 

 

Small business portfolio   June 30,     March 31,     December 31,     June 30,
    2025 (unaudited)     2025 (unaudited)     2024     2024 (unaudited)
    (Dollars in thousands)
                       
SBL, including unamortized fees and costs $  970,116   $  925,877   $  897,077   $  860,226
SBL, included in loans, at fair value    76,830      83,448      89,902      104,146
Total small business loans(4) $  1,046,946   $  1,009,325   $  986,979   $  964,372

 

(1) SBLOC loans are collateralized by marketable securities, while IBLOC are collateralized by the cash surrender value of insurance policies. At June 30, 2025 and December 31, 2024, IBLOC loans amounted to $513.9 million and $548.1 million, respectively.

(2) At June 30, 2025, consumer fintech loans consisted of $346.9 million of secured credit card loans, with the balance comprised of other short-term extensions of credit.

(3) Includes demand deposit overdrafts reclassified as loan balances totaling $6.4 million and $1.2 million at June 30, 2025 and December 31, 2024, respectively. Estimated overdraft charge-offs and recoveries are reflected in the allowance for credit losses and are immaterial.

(4) The SBLs held at fair value are comprised of the government guaranteed portion of 7(a) Program loans at the dates indicated.

 

 

Small business loans as of June 30, 2025

       
    Loan principal
    (Dollars in millions)
U.S. government guaranteed portion of SBA loans(1)   $  397
Commercial mortgage SBA(2)      382
Construction SBA(3)     18
Non-guaranteed portion of U.S. government guaranteed 7(a) Program loans(4)      117
Non-SBA SBLs      116
Other(5)     4
Total principal   $  1,034
Unamortized fees and costs      13
Total SBLs   $  1,047

 

(1) Includes the portion of SBA 7(a) Program loans which have been guaranteed by the U.S. government, and therefore are assumed to have no credit risk.

(2) Substantially all these loans are made under the 504 Program, which dictates origination date LTV percentages, generally 50%-60%, to which The Bancorp Bank, N.A. adheres.

(3) Includes $13 million in 504 Program first mortgages with an origination date LTV of 50%-60%, and $5 million in SBA interim loans with an approved SBA post-construction full takeout/payoff.

(4) Includes the unguaranteed portion of 7(a) Program loans which are 70% or more guaranteed by the U.S. government. SBA 7(a) Program loans are not made on the basis of real estate LTV; however, they are subject to SBA's "All Available Collateral" rule which mandates that to the extent a borrower or its 20% or greater principals have available collateral (including personal residences), the collateral must be pledged to fully collateralize the loan, after applying SBA-determined liquidation rates. In addition, all 7(a) Program loans and 504 Program loans require the personal guaranty of all 20% or greater owners.

(5) Comprised of $4 million of loans sold that do not qualify for true sale accounting.

 

  11 

 

 

 

Small business loans by type as of June 30, 2025

 

(Excludes government guaranteed portion of SBA 7(a) Program)

 

                               
    SBL commercial mortgage(1)   SBL construction(1)   SBL non-real estate   Total     % Total
      (Dollars in millions)
Hotels (except casino hotels) and motels   $ 88   $  —   $  —   $ 88      14%
Funeral homes and funeral services     44      —      38      82      13%
Full-service restaurants     31      2       3      36      6%
Child day care services     25      —      3      28      4%
Car washes     11      11       —     22      4%
Homes for the elderly     16      —      —     16      2%
Gasoline stations with convenience stores     15      —      —     15      2%
Outpatient mental health and substance abuse centers     15      —      —     15      2%
General line grocery merchant wholesalers     13      —      —     13      2%
Fitness and recreational sports centers     8      —      2      10      2%
Plumbing, heating, and air-conditioning companies     9      —      1      10      2%
Nursing care facilities     9      —      —     9      1%
Caterers     9      —      —     9      1%
Offices of lawyers     9      —      —     9      1%
Used car dealers     7      —      —     7      1%
Limited-service restaurants     3      —      3      6      1%
All other specialty trade contractors     6      —      1      7      1%
General warehousing and storage     6      —      —     6      1%
Automotive body, paint, and interior repair     6      —      —     6      1%
Other accounting services     6      —      —     6      1%
Appliance repair and maintenance     6      —      —     6      1%
Residential remodelers     5      —      —     5      1%
Other(2)     185      7       30      222      36%
Total   $ 532   $  20    $  81    $ 633      100%

 

 

(1) Of the SBL commercial mortgage and SBL construction loans, $153 million represents the total of the non-guaranteed portion of SBA 7(a) Program loans and non-SBA loans. The balance of those categories represents SBA 504 Program loans with 50%-60% origination date LTVs. SBL Commercial excludes $4 million of loans sold that do not qualify for true sale accounting.

(2) Loan types of less than $5 million are spread over approximately one hundred different business types.

 

State diversification as of June 30, 2025

 

(Excludes government guaranteed portion of SBA 7(a) Program loans)

 

    SBL commercial mortgage(1)   SBL construction(1)   SBL non-real estate   Total     % Total
      (Dollars in millions)
California   $  141   $  6   $  6   $  153      24%
Florida      83      7      4      94      15%
North Carolina      44      —      4      48      8%
New York      41     —      3      44      7%
Texas      29      4      6      39      6%
New Jersey      31      —      7      38      6%
Pennsylvania      19      —      13      32      5%
Georgia      25      3      2      30      5%
Other states      119      —      36      155      24%
Total   $  532   $  20   $  81   $  633      100%
                               

 

(1) Of the SBL commercial mortgage and SBL construction loans, $153 million represents the total of the non-guaranteed portion of SBA 7(a) Program loans and non-SBA loans. The balance of those categories represents SBA 504 Program loans with 50%-60% origination date LTVs. SBL Commercial excludes $4 million of loans that do not qualify for true sale accounting.

 

  12 

 

 

Top 10 loans as of June 30, 2025

 

 

Type(1)   State   SBL commercial mortgage  
      (Dollars in millions)
General line grocery merchant wholesalers     CA   $  13   
Funeral homes and funeral services     ME      12   
Funeral homes and funeral services     PA      12   
Outpatient mental health and substance abuse center     FL      10   
Hotel     FL      8   
Lawyer's office     CA      8   
Hotel     VA      7   
Hotel     NC      7   
Funeral homes and funeral services     ME      6   
Charter bus industry     NY      6   
Total         $  89   

 

(1) The table above does not include loans to the extent that they are U.S. government guaranteed.

 

  13 

 

 

Commercial real estate loans, excluding SBA loans, are as follows including LTV at origination:

 

Type as of June 30, 2025 

                     
Type     # Loans     Balance   Weighted average origination date LTV   Weighted average interest rate
      (Dollars in millions)
Real estate bridge loans (multifamily apartment loans recorded at amortized cost)(1)     177   $  2,140     70%    8.50%
                     
Non-SBA commercial real estate loans, at fair value:                    
Multifamily (apartment bridge loans)(1)      2    $  69     69%    7.06%
Hospitality (hotels and lodging)      1       19     66%    9.75%
Retail      2       12     72%    8.20%
Other      2       9     71%    4.96%
       7       109     69%    7.52%
Fair value adjustment            —        
Total non-SBA commercial real estate loans, at fair value            109         
Total commercial real estate loans         $  2,249     70%    8.45%

 

(1) In the third quarter of 2021, we resumed the origination of bridge loans for multi-family apartment rehabilitation which comprise these categories. Such loans held at fair value were originally intended for sale, but are now being retained on the balance sheet. In addition to “as is” origination date appraisals, on which the weighted average origination date LTVs are based, third-party appraisers also estimated “as stabilized” values, which represents additional potential collateral value as rehabilitation progresses, and units are re-leased at stabilized rental rates. The weighted average origination date “as stabilized” LTV was estimated at 60%.

 

 

                               
State diversification as of June 30, 2025     15 largest loans as of June 30, 2025
                               
State     Balance     Origination date LTV     State       Balance   Origination date LTV
(Dollars in millions)     (Dollars in millions)
Texas   $  681     71%     Texas     $  46    75%
Georgia      326     70%     Texas        40    64%
Florida      232     68%     Michigan        39    62%
New Jersey      136     69%     Texas        36    67%
Indiana      130     71%     Florida        35    72%
Ohio      119     71%     New Jersey        34    62%
Michigan      75     64%     Pennsylvania        34    63%
Other states each <$65 million      550     70%     Indiana        34    76%
Total   $  2,249     70%     New Jersey        31    71%
                  Texas        31    77%
                  Georgia        30    69%
                  Ohio        29    74%
                  Texas        27    79%
                  New Jersey        26    71%
                  Texas        25    70%
                  15 largest commercial real estate loans     $  497    70%

 

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Institutional banking loans outstanding at June 30, 2025

 

         
Type Principal   % of total
    (Dollars in millions)    
SBLOC $  1,087   58%
IBLOC    514   27%
Advisor financing    272   15%
Total $  1,873    100%

 

For SBLOC, we generally lend up to 50% of the value of equities and 80% for investment grade securities. While the value of equities has fallen in excess of 30% in recent years, the reduction in collateral value of brokerage accounts collateralizing SBLOC loans generally has been less, for two reasons. First, many collateral accounts are “balanced” and accordingly have a component of debt securities, which have either not decreased in value as much as equities, or in some cases may have increased in value. Second, many of these accounts have the benefit of professional investment advisors who provided some protection against market downturns, through diversification and other means. Additionally, borrowers often utilize only a portion of collateral value, which lowers the percentage of principal to collateral.

 

Top 10 SBLOC loans at June 30, 2025

 

  Principal amount   % Principal to collateral
  (Dollars in millions)
  $  10    34%
     9    17%
     8    84%
     8    12%
     8    47%
     8    19%
     7    31%
     7    20%
     6    4%
     6    38%
Total and weighted average $  77    31%

 

Insurance backed lines of credit (IBLOC)

 

IBLOC loans are backed by the cash value of eligible life insurance policies which have been assigned to us. We generally lend up to 95% of such cash value. Our underwriting standards require approval of the insurance companies which carry the policies backing these loans. Currently, fifteen insurance companies have been approved and, as of July 15, 2025, all were rated A- (Excellent) or better by AM BEST.

 

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Direct lease financing by type as of June 30, 2025

         
    Principal balance(1)   % Total
    (Dollars in millions)    
Construction $  127     18%
Government agencies and public institutions(2)    127     18%
Real estate and rental and leasing    98     14%
Waste management and remediation services    92     13%
Health care and social assistance    29     4%
Other services (except public administration)    25     4%
Professional, scientific, and technical services    23     3%
Wholesale trade    18     3%
General freight trucking    16     2%
Transit and other transportation    12     2%
Finance and insurance    12     2%
Arts, entertainment, and recreation    11     2%
Other    108     15%
Total $  698     100%

 

(1) Of the total $698 million of direct lease financing, $644 million consisted of vehicle leases with the remaining balance consisting of equipment leases.

(2) Includes public universities as well as school districts.

 

 

Direct lease financing by state as of June 30, 2025 

         
State   Principal balance   % Total
    (Dollars in millions)    
Florida $  121    17%
New York    59    9%
Utah    51    7%
Connecticut    49    7%
California    45    6%
Pennsylvania    43    6%
North Carolina    38    5%
Maryland    36    5%
New Jersey    34    5%
Texas    22    3%
Idaho    16    2%
Georgia    15    2%
Washington    14    2%
Alabama    13    2%
Ohio    13    2%
Other states    129    20%
Total $  698    100%

 

 

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Loan delinquency and other real estate owned June 30, 2025
  30-59 days   60-89 days   90+ days         Total         Total
  past due   past due   still accruing   Non-accrual   past due   Current   loans
SBL non-real estate $  —   $  3,012    $  —   $  5,976    $  8,988    $  195,099    $  204,087 
SBL commercial mortgage    —      —      —      8,340       8,340       715,414       723,754 
SBL construction    —      —      —      2,892       2,892       27,813       30,705 
Direct lease financing    9,201       3,727       307       7,236       20,471       677,615       698,086 
SBLOC / IBLOC    13,944       386       135       469       14,934       1,586,471       1,601,405 
Advisor financing    —      —      —      —      —      272,155       272,155 
Real estate bridge loans    —      —      —      36,677       36,677       2,103,362       2,140,039 
Consumer fintech    18,930       1,113       434       —      20,477       660,010       680,487 
Other loans    2       61       7       —      70       169,875       169,945 
Unamortized loan fees and costs    —      —      —      —      —      14,769       14,769 
  $  42,077    $  8,299    $  883    $  61,590    $  112,849    $  6,422,583    $  6,535,432 

 

 

Other loan information

 

Of the $91.4 million special mention and $124.4 million substandard loans real estate bridge loans at June 30, 2025, none were modified in the second quarter of 2025.

 

 

Other real estate owned year to date activity

 

     
  June 30, 2025
Beginning balance $  62,025 
Transfer from loans, net    2,273 
Advances    1,756 
Ending balance $  66,054 

 

 

 

  June 30,   March 31,   December 31,   June 30,
  2025   2025   2024   2024
Asset quality ratios:                      
Nonperforming loans to total loans(1)    0.96%      0.51%      0.55%      0.34%
Nonperforming assets to total assets(1)    1.45%      1.10%      1.14%      1.08%
Allowance for credit losses to total loans    0.91%      0.82%      0.73%      0.51%

 

 

(1) In the first quarter of 2024, a $39.4 million apartment building rehabilitation bridge loan was transferred to nonaccrual status. On April 2, 2024, the same loan was transferred from nonaccrual status to other real estate owned. We completed the majority of the capital improvements at the property. The June 30, 2025, other real estate owned balance of $42.9 million compares to June 30, 2025 third-party “as stabilized” and "as is" appraisals, respectively, of $59.1 million and $51.4 million, or respective LTVs of 73% and 83%. As previously disclosed, the property was under an agreement of sale. On June 24, 2025, the Company terminated the agreement of sale for the property and demanded the escrow agent release to Company all earnest money deposits received to date, totaling $3.0 million. On June 26, 2025, without providing any legal or contractual basis to do so, the purchaser objected to the release of the earnest money deposits. The Company believes it is entitled to the earnest money deposits and intends to pursue release of the funds.

 

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Calculation of efficiency ratio (non-GAAP)(1)

 

                       
  Three months ended   Six months ended
  June 30,   June 30,   June 30,   June 30,
  2025   2024   2025   2024
  (Dollars in thousands)
Net interest income $  97,492    $  93,795    $  189,235    $  188,213 
Non-interest income(2)    40,510       30,722       78,284       60,104 
Total revenue $  138,002    $  124,517    $  267,519    $  248,317 
Non-interest expense $  57,223    $  51,446    $  110,517    $  98,158 
                       
Efficiency ratio    41%      41%      41%      40%
                       
(1)The efficiency ratio is calculated by dividing GAAP total non-interest expense by the total of GAAP net interest income and non-interest income.  This ratio compares revenues generated with the amount of expense required to generate such revenues and may be used as one measure of overall efficiency.
(2)Excludes consumer fintech loan credit enhancement income of $43.2 million and $89.1 million for the three and six months ended June 30, 2025, respectively.

 

 

 

 

 

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