The Bancorp, Inc. Reports Second Quarter Financial Results

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.

• 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. "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/.

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.

Source: The Bancorp, Inc.

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.

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.

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.

• 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.