WILMINGTON, Del.--(BUSINESS WIRE)-- The Bancorp, Inc. (NASDAQ: TBBK), a financial holding company, today reported its financial results for the fourth quarter of 2025. For fourth quarter 2025, the Company reported net income of $56.3 million, or $1.28 per diluted share.

“We are pleased with the significant progress made this year in strengthening our platform and deepening and expanding new and existing relationships. While we ended the year with record fourth quarter EPS and ROE, we did fall short of our expectations and guidance due to a culmination of factors, including the prolonged government shutdown’s impact on transaction volume and deposit flows, the strong ramp-up in sponsored credit materializing later than expected, some unanticipated NIM compression, and an unexpected legal settlement cost,” said Damian Kozlowski, CEO and President of The Bancorp. “2025 demonstrated significant progress on our path to substantial growth in new revenue streams and enhanced profitability driven by our best-in-class Fintech ecosystem. We are initiating guidance at $5.90 EPS for 2026 and targeting at least $1.75 a share in the fourth quarter 2026. We maintain a preliminary outlook for 2027 of $8.25. Guidance for 2026 includes share repurchases under the existing repurchase program of $200 million or $50 million per quarter, and we forecast returning near 100% of earnings through share repurchases in 2027.

Our three major Fintech initiatives of platform efficiency, productivity gains from platform restructuring and AI tools, plus a high-level of capital return, will be the driving forces behind continued EPS accretion. EPS gains are subject to development and implementation timelines in Fintech, and our stock price for buybacks.”

Earnings Release Conference Call

Management will conduct a conference call to review fourth quarter 2025 results at 8:00 AM ET Friday, January 30, 2026. Interested parties may access the conference call live 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 65852.

For those who cannot access the live conference call, a replay of the webcast will be accessible shortly after the event concludes through our Investor Relations website, or you may access the replay telephonically until Friday, February 6, 2026, by dialing 1.888.660.6264, playback code 65852#.

Financial Results:

Loan Portfolio

The following table summarizes our total loan portfolio at December 31, 2025 compared to prior periods:

At December 31, 2025, Loans, net of deferred fees and costs were $7.12 billion, a 27% increase (annualized) from $6.67 billion at September 30, 2025, and a 16% increase compared to $6.11 billion at December 31, 2024. The $1.00 billion increase from December 2024 is primarily driven by growth in fintech loans of $643.6 million, $126.5 million increase in Small business lending (“SBL”) loans and $106.0 million increase in Securities-backed lines of credit (“SBLOC”) and Insurance policy cash value-backed lines of credit (“IBLOC”).

Consumer fintech loans of $1.1 billion include $729 million from secured credit card accounts and $369 million from short-term liquidity products, and now account for 15.1% of the total loan portfolio. Secured credit card accounts are backed dollar for dollar by cash collateral by each individual cardholder and are required to be repaid in-full monthly. Short-term liquidity products to individual borrowers range in maturity from 30 days to 365 days. All fintech loans are covered by credit enhancements, where our partners provide financial protection against consumer losses. We maintain cash collateral balances equivalent to the expected losses on dollars already lent, as well as having the right to offset other revenues generated through those relationships.

Deposits & Liquidity

Average deposits were $7.60 billion, a 2% decrease (annualized) from $7.63 billion at September 30, 2025, and a 1% increase compared to $7.55 billion at December 31, 2024. The increase from prior year is primarily driven by increases in deposits sourced from our fintech relationships.

95% of our total deposits are generated through our Fintech partnerships, and are low balance, insured deposits, and accordingly do not constitute the liquidity risk experienced by certain institutions. As of December 31, 2025, 94% of the deposits are insured, 3% are low balance accounts (such as anonymous gift cards and corporate incentive cards for which there is no identified depositor), and 3% are other uninsured deposits.

The average interest rate on deposits for 4Q 2025 was 1.77%, compared to 2.25% for 4Q 2024.

We maintain secured borrowing lines of credit with the Federal Reserve Bank and Federal Home Loan Bank that are collateralized by pledged loans and investments. As of December 31, 2025, we had $199.0 million of short-term borrowings under these facilities, and $3.19 billion of additional available capacity which we can access as needed.

Net Interest Income and Net Interest Margin

Net interest income decreased to $92.1 million for 4Q 2025, compared to $94.2 million for 3Q 2025 and $94.3 million for 4Q 2024. Net interest margin was 4.30% for 4Q 2025, compared to 4.45% for 3Q September 30, 2025 and 4.55% for 4Q 2024.

Net interest income and margin for 4Q 2025 each show a slight decline from prior periods, due to a full quarter of higher debt cost from our 3Q 2025 senior debt issuance, a shift in loan portfolio to more fintech loans that earn fee income but have zero margin, combined with our strategies for investment securities.

Credit Quality

Total Provision, including provision for investment securities and provision for fintech loans which are supported by credit enhancements, was $41.4 million in 4Q 2025, a decrease compared to $45.1 million in 3Q 2025, and an increase from $31.4 million in 4Q 2024.

Provision for non-consumer fintech loans was $0.9 million in 4Q 2025, a decrease compared to $5.7 million in 3Q 2025 which was elevated primarily due to realized losses on a set of truck leases. For 4Q 2024, provision for non-consumer fintech loans was $2.0 million.

The allowance for credit losses was $66.2 million at December 31, 2025, consisting of $31.1 million related to consumer fintech loans, or 2.84% coverage, and $35.1 million for non-fintech loans, or 0.58% coverage. That compares to the allowance as of December 31, 2024 of $44.9 million, consisting of $12.9 million related to consumer fintech loans, or 2.84% coverage, and $31.9 million allowance for non-fintech loans, or 0.56% coverage. Allowance as of September 30, 2025 was $64.2 million, consisting of $29.3 million for fintech, or 3.73% coverage, and $34.8 million for non-fintech, or 0.52% coverage.

Total net charge-offs for 4Q 2025, including fintech loans which are supported by credit enhancements, were $39.2 million, a decrease from $40.8 million for 3Q 2025 and an increase from $18.8 million for 4Q 2024, resulting in ratios of Total net charge-offs to average loans of 2.29%, 2.44% and 1.21% for the respective periods (annualized).

Net charge-offs for non-fintech loans were $0.6 million for 4Q 2025, a decrease compared to $3.3 million for 3Q 2025 and $1.1 million for 4Q 2024, resulting in ratios of non-fintech net charge-offs to average loans of 0.04%, 0.22% and 0.07% for the respective periods (annualized).

Ending total criticized assets of $194.5 million at 4Q 2025, compared to $268.7 million at the end of 3Q 2025 and $286.9 million at year end 2024. The change in total criticized assets in 4Q 2025 was primarily driven by a $101.8 million decrease in Real estate bridge loans characterized as criticized assets, partially offset by a $26.1 million increase in SBL criticized assets.

Non-Interest Income

Non-interest income for 4Q 2025 was $80.5 million, which is comprised of $40.4 million of credit enhancement income and $40.1 million of other non-interest income. This compares to 3Q 2025 with $80.4 million non-interest income, comprised of $39.8 million of credit enhancement income and $40.6 million of other non-interest income. Non-interest income for 4Q 2024 was $65.3 million, comprised of $30.7 million of credit enhancement income and $34.6 million of other non-interest income. Non-interest income for 3Q 2025 includes $2.3 million from the release of earnest money deposit related to an OREO sale agreement

The growth in non-interest income versus 4Q 2024 is primarily driven by the $3.7 million increase in total fintech fees, as fintech fees grew to 27% of our total revenues excluding credit enhancement income*. This growth reflects organic volume growth with existing partners and products, and our focus on expanding our fintech business.

Non-Interest Expense

Total non-interest expense increased $4.4 million, or 8%, from 4Q 2024 and was relatively consistent with 3Q 2025. The increase from 4Q 2024 is primarily driven by $2.0 million of legal costs related to a settlement in 4Q 2025, and $1.1 million of higher software costs. Compared to 3Q 2025, the higher costs due to the $2.0 million legal settlement is offset by $2.9 million lower salary and employee benefits due to adjustments to incentive accruals. The amount of legal settlement recognized is the gross expense amount and excludes any potential insurance recovery that may occur in the future related to the settlement and previously incurred legal costs.

Efficiency ratio* was 42.5% for 4Q 2025, compared to 41.8% for 3Q 2025 and 40.2% for 4Q 2024.

Income Taxes

Income tax expense was $18.7 million for 4Q 2025, $18.2 million for 3Q 2025, and $20.5 million for 4Q 2024. Our effective income tax rate was 24.9% for the 4Q 2025 and 3Q 2025, and 26.8% for 4Q 2024.

Capital

As of December 31, 2025, The Bancorp Bank, N.A (“the Bank”)’s capital levels continue to be strong and in excess of the “well capitalized” regulatory benchmarks, with 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 for the Bank of 9.70%, 14.03%, 15.13% and 14.03%, respectively, and for the Company of 7.64%, 11.08%, 12.19% and 11.08%, respectively.

Book value per common share at December 31, 2025 was $16.29, compared to $17.48 at September 30, 2025 (a 27% decrease, annualized). Total shareholders’ equity decreased by $88.4 million, driven primarily by $150.0 million of share repurchases partially offset by $56.3 million of net income for the period. Outstanding shares decreased 2.2 million to 42,355,361 driven primarily by share repurchases.

Book value per common share at December 31, 2025 was $16.29, compared to $16.69 at December 31, 2024 (a 2% decrease). Total shareholders’ equity decreased by $100.0 million since December 31, 2024, primarily driven by $378.3 million decrease in capital from share repurchases, partially offset by $228.2 million net income and $19.6 million of share-based compensation and $28.5 million of other comprehensive income from mark to market gains on available-for-sale investment securities. Outstanding shares decreased 5.0 million to 42,355,361, driven primarily by our share repurchases over the past year.

We repurchased 2,173,518 shares of our common stock, or 5% of issued and outstanding shares, at an average cost of $69.01 per share for a total capital return of $150.0 million during 4Q 2025. These repurchases bring our repurchases year-to-date in 2025 to 5,645,914 shares, or 12%, at an average price of $66.42, bringing the full year capital return to $375.0 million. The Company’s Board of Directors has authorized up to $200 million of repurchases for 2026.

About The Bancorp

The Bancorp, Inc. (NASDAQ: TBBK), through its subsidiary, The Bancorp Bank, N.A., is defining the future of banking. As one of the first banks to embrace fintech, The Bancorp has been a driving force behind the industry’s evolution, serving as an essential financial enabler of fintech innovation for more than 25 years. Led by its Fintech Solutions business, the company delivers a dynamic portfolio of payment and lending solutions that empowers its clients to turn bold ideas into real-world success.

Ranked by the Nilson Report as the No. 1 issuer of prepaid cards in the U.S. and among the top 10 debit card issuers nationally, The Bancorp also holds leading positions in its Institutional Banking, Small Business Lending, Fleet Management Services, and Real Estate Bridge Lending businesses. Across every line of business, The Bancorp fosters prosperity through the perpetual transformation of banking and aims to drive growth for its clients, investors, employees, and the communities it serves. For more information, visit https://thebancorp.com/.

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 2026, 2027 and 2028 results, including earnings per share accretion, future growth, profitability, productivity and efficiency, the expansion, expected timelines and implementation of our Fintech initiatives and revenue streams, the possible benefits of our platform restructuring and adoption of AI tools, 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, 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.
SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited)

NON-GAAP FINANCIAL MEASURES

We use certain financial measures which are not calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”). These measures are focused on adjusting certain metrics used to measure our performance to exclude the impact of Non-interest income--Consumer fintech loan credit enhancement. That income amount relates to credit enhancement agreements from third parties that cover losses from borrowers for fintech loans receivable. We recognize provision expense for credit losses on consumer fintech loans, and separately record an amount in Non-interest income--Consumer fintech loan credit enhancement for the recovery from the third-party. The measurement of the estimated credit losses and the estimated recovery from the credit enhancement are based on the same estimate and correlate to like amounts in our statement of operations. Our non-GAAP metrics are calculated to remove the volatility of that credit enhancement recovery from measures used to review the performance and growth of our business.

Non-GAAP measures include:

Efficiency ratio is calculated as: (i) GAAP total non-interest expense; divided by (ii) the total of GAAP net interest income and non-interest income less Consumer fintech loan credit enhancement income, or “Adjusted total revenue”. 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.

Non-interest income as a percentage of total revenue (excluding credit enhancement) is calculated as: (i) GAAP Non-interest-income less Consumer fintech loan credit enhancement income; divided by (ii) Adjusted total revenue. This ratio is used to compare the amount of non-interest income, which is primarily fee-based, to our total revenue each period to review the growth in our fee-based business.

Fintech fees as a percentage of total revenue (excluding credit enhancement) is calculated as: (i) GAAP Non-interest income – total fintech fees; divided by (ii) Adjusted total revenue. This ratio is used to compare the amount of fintech fee revenue to our total revenue each period to review the growth in that revenue area, which is one of our key areas of focus.

We believe that these non-GAAP measures are useful performance metrics for management, investors and lenders, because it provides a means to evaluate period-to-period comparisons of the Company's financial performance without the effects of certain adjustments in accordance with GAAP that may not necessarily be indicative of current operating performance. Non-GAAP financial measures should not be considered as an alternative to GAAP financial measures. They may not be indicative of the historical operating results of the Company nor are they intended to be predictive of potential future results. Investors should not consider non-GAAP financial measures in isolation or as a substitute for performance measures calculated in accordance with GAAP.