UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2026
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
For the transition period from: _____ to _____
Commission file number: 000-51018
(Exact name of registrant as specified in its charter)
Delaware
23-3016517
(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification No.)
409 Silverside Road, Wilmington, DE 19809
(302) 385-5000
(Address of principal executive offices and zip code)
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol(s)
Name of each Exchange on Which Registered
Common Stock, par value $1.00 per share
TBBK
Nasdaq Global Select
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer x
Accelerated filer o
Non-accelerated filer o
Smaller reporting company o
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of April 27, 2026, there were 41,634,439 outstanding shares of common stock, $1.00 par value.
THE BANCORP, INC.
Form 10-Q Index
Page
Part I Financial Information
Item 1.
Financial Statements
3
Condensed Consolidated Balance Sheets – March 31, 2026 and December 31, 2025
Condensed Consolidated Statements of Operations – Three months ended March 31, 2026 and 2025
4
Condensed Consolidated Statements of Comprehensive Income – Three months ended March 31, 2026 and 2025
5
Condensed Consolidated Statements of Changes in Shareholders’ Equity – Three months ended March 31, 2026 and 2025
6
Condensed Consolidated Statements of Cash Flows – Three months ended March 31, 2026 and 2025
8
Notes to Condensed Consolidated Financial Statements
9
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
26
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
46
Item 4.
Controls and Procedures
Part II Other Information
Legal Proceedings
47
Item 1A.
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
Default Upon Senior Securities
Mine Safety Disclosures
Item 5.
Other Information
Item 6.
Exhibits
48
Signatures
49
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
THE BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31,
December 31,
2026
2025
(Dollars in thousands, except share data)
(unaudited)
ASSETS:
Cash and cash equivalents
Cash and due from banks
$
8,673
8,038
Interest-earning deposits
58,510
104,611
Total cash and cash equivalents
67,183
112,649
Investment securities, available-for-sale, at fair value
1,646,541
1,671,750
Commercial loans, at fair value
128,260
139,389
Loans, net of deferred loan fees and costs
7,753,683
7,116,676
Allowance for credit losses
(63,017)
(66,200)
Loans, net
7,690,666
7,050,476
Stock in Federal Reserve, Federal Home Loan and Atlantic Central Bankers Banks
37,785
25,205
Premises and equipment, net
29,046
29,834
Accrued interest receivable
41,315
43,090
Other real estate owned
60,998
60,695
Deferred tax asset, net
21,139
18,679
Credit enhancement asset
29,769
31,138
Other assets
146,062
169,520
Total assets
9,898,764
9,352,425
LIABILITIES:
Deposits
Demand and interest checking
8,281,037
7,827,037
Savings and money market
148,988
338,459
Total deposits
8,430,025
8,165,496
Short-term borrowings
470,000
199,000
Senior debt
196,320
196,253
Subordinated debentures
13,401
Other long-term borrowings
13,626
13,712
Other liabilities
78,442
74,767
Total liabilities
9,201,814
8,662,629
SHAREHOLDERS' EQUITY:
Common stock - authorized, 75,000,000 shares of $1.00 par value; 48,750,251 and 41,858,545 shares issued and outstanding, respectively, at March 31, 2026 and 48,404,006 and 42,355,361 shares issued and outstanding, respectively, at December 31, 2025
48,750
48,404
Additional paid-in capital
28,616
24,207
Retained earnings
1,067,437
1,007,368
Accumulated other comprehensive income
3,459
10,839
Treasury stock at cost, 6,891,706 shares at March 31, 2026 and 6,048,645 shares at December 31, 2025
(451,312)
(401,022)
Total shareholders' equity
696,950
689,796
Total liabilities and shareholders' equity
The accompanying notes are an integral part of these consolidated statements.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the three months ended March 31,
(Dollars in thousands, except share and per share data)
Interest income:
Loans, including fees
107,545
108,912
Investment securities:
Taxable interest
19,920
18,127
Tax-exempt interest
130
83
2,196
12,680
129,791
139,802
Interest expense:
35,289
46,375
1,381
—
Long-term borrowings
197
195
3,875
1,234
235
255
40,977
48,059
Net interest income
88,814
91,743
Provision (reversal) for credit losses on non-fintech loans
(1,348)
874
Provision for credit losses on fintech loans
28,843
45,868
Provision for unfunded commitments
106
111
Provision for credit losses, total
27,601
46,853
Net interest income after provision for credit losses
61,213
44,890
Non-interest income
Fintech fees
ACH, card and other payment fees
5,796
5,132
Prepaid, debit card and related fees
26,677
25,714
Consumer credit fintech fees
5,596
3,600
Total fintech fees
38,069
34,446
Net realized and unrealized gains
on commercial loans, at fair value
361
Leasing related income
1,901
1,972
Fintech loan credit enhancement
Other
3,706
995
Total non-interest income
72,525
83,642
Non-interest expense
Salaries and employee benefits
37,477
33,669
Depreciation
1,245
1,104
Rent and related occupancy cost
1,691
1,568
Data processing expense
1,309
1,205
Audit expense
641
654
Legal expense
1,590
1,957
Legal settlement (reimbursement)
(2,000)
FDIC insurance
1,251
1,053
Software
5,369
5,013
Insurance
1,182
1,257
Telecom and IT network communications
284
333
Consulting
210
456
4,777
5,025
Total non-interest expense
55,026
53,294
Income before income taxes
78,712
75,238
Income tax expense
18,643
18,065
Net income
60,069
57,173
Net income per share - basic
1.43
1.21
Net income per share - diluted
1.41
1.19
Weighted average shares - basic
42,133,301
47,214,050
Weighted average shares - diluted
42,594,824
47,959,292
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(Dollars in thousands)
Other comprehensive (loss) income, net:
Other comprehensive (loss) income:
Securities available-for-sale:
Change in net unrealized (losses) gains
(9,840)
21,062
Other comprehensive (loss) income
Income tax (benefit) expense related to items of other comprehensive income:
(2,460)
5,265
Income tax (benefit) expense related to items of other comprehensive income
Other comprehensive (loss) income, net
(7,380)
15,797
Comprehensive income
52,689
72,970
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
For the three months ended March 31, 2026
Accumulated
Common
Additional
other
stock
paid-in
Retained
comprehensive
Treasury
shares issued
capital
earnings
income
Total
Balance at January 1, 2026
48,404,006
Common stock issued from restricted units, net of tax benefits
346,245
346
(346)
Stock-based compensation
4,755
Other comprehensive loss net of reclassification adjustments and tax
Common stock repurchases and excise tax(1)
(50,290)
Balance at March 31, 2026
48,750,251
(1)Repurchase of common stock includes 843,061 shares repurchased in connection with the Company's share repurchase program approved by the Board of Directors. See Note 8, “Shareholders’ Equity” for further information.
(CONTINUED)
For the three months ended March 31, 2025
loss
Balance at January 1, 2025
47,713,481
47,713
3,233
779,155
(17,637)
(22,681)
789,783
353,697
354
(354)
4,591
Other comprehensive income net of reclassification adjustments and tax
(37,657)
Balance at March 31, 2025
48,067,178
48,067
7,470
836,328
(1,840)
(60,338)
829,687
(1)Repurchase of common stock includes 684,445 shares repurchased in connection with the Company's share repurchase program approved by the Board of Directors. See Note 8, “Shareholders’ Equity” for further information.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the three months
ended March 31,
Operating activities:
Adjustments to reconcile net income to net cash provided by operating activities
Fintech loan credit enhancement income
(28,843)
(45,868)
Accretion of fees, premiums, and discounts, net
(1,048)
(493)
Stock-based compensation expense
Realized gains on commercial loans, at fair value
(6)
(361)
(Gain) loss on sale of fixed assets
(29)
Decrease (increase) in accrued interest receivable
1,775
(751)
Decrease in other assets
16,293
32,646
Increase (decrease) in other liabilities
3,428
(363)
Net cash provided by operating activities
85,240
94,540
Investing activities:
Purchase of investment securities available-for-sale
(5,000)
(10,996)
Proceeds from redemptions and prepayments of securities available-for-sale
25,584
47,934
Capitalized investment in other real estate owned
(326)
(1,382)
Sale of repossessed assets
808
1,276
Net increase in loans
(677,877)
(310,839)
Credit enhancement agreement cash inflows
30,212
38,578
Proceeds from sale of fixed assets
40
88
Commercial loans, at fair value drawn during the period
(1,763)
Payments on commercial loans, at fair value
11,082
13,596
Purchases of premises and equipment
(468)
(765)
Net cash used in investing activities
(615,945)
(224,273)
Financing activities:
Net increase in deposits
264,529
618,536
Proceeds from short-term borrowings
271,000
Repurchases of common stock and excise tax
Net cash provided by financing activities
485,239
580,879
Net (decrease) increase in cash and cash equivalents
(45,466)
451,146
Cash and cash equivalents, beginning of period
570,123
Cash and cash equivalents, end of period
1,021,269
Supplemental cash flow information:
Interest paid
45,769
50,054
Transfers (from) to other real estate owned from commercial loans, at fair value, and loans, net
(23)
3,722
Leased vehicles transferred to repossessed assets
536
849
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The Bancorp, Inc. (the “Company”) is a Delaware corporation and a registered financial holding company. Its primary, wholly-owned subsidiary is The Bancorp Bank, National Association (the “Bank”), which is a federally chartered commercial bank located in Sioux Falls, South Dakota and is a Federal Deposit Insurance Corporation (“FDIC”) insured institution. As a federally chartered institution, its primary regulator is the Office of the Comptroller of the Currency (“OCC”). The Company has two primary operating segments which consist of Fintech Solutions and Credit Solutions.
Through partner relationships, Fintech Solutions delivers payment, deposit, and lending products that attract deposits and generate fee income. Deposits generated through these partner relationships are deployed into loan and lease products offered by both Fintech sponsored lending and the Credit Solutions business line. The Company primarily earns fee-based income from fintech products, and such products include sponsored issuance of deposit accounts and debit, credit, and prepaid cards; sponsored lending products for fintech partners; and payment processing solutions, including acquiring, ACH, and near-and real-time payment services in support of its partners.
Credit Solutions is our lending operation and makes the following types of loans: (i) Real estate bridge lending (“REBL”); (ii) Institutional Banking comprised of security-backed lines of credit (“SBLOC”), cash value insurance policy-backed lines of credit (“IBLOC”) and advisor financing; and (iii) Commercial Loans which includes Small Business Loans (“SBL”) which is comprised primarily of Small Business Administration (“SBA”) loans and direct lease financing.
The Company and the Bank are affected by state and federal legislation and regulations and are subject to regulation by certain state and federal agencies. Accordingly, they are examined periodically by those regulatory authorities.
Basis of Presentation
The financial statements of the Company, as of March 31, 2026 and for the three-month periods ended March 31, 2026 and 2025, are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted in this Quarterly Report on Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). However, in the opinion of management, these interim financial statements include all necessary adjustments to fairly present the results of the interim periods presented. The unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”). The results of operations for the three-month period ended March 31, 2026 may not necessarily be indicative of the results of operations anticipated for the full year ending December 31, 2026.
Certain prior period amounts have been reclassified to conform to current period presentation.
There have been no significant changes as of March 31, 2026 from the Company’s significant accounting policies as described in the 2025 Form 10-K.
Subsequent Events
The Company evaluated its March 31, 2026 financial statements for subsequent events through the date the consolidated financial statements were issued. The Company is not aware of any subsequent events which would require recognition or disclosure in the financial statements.
The Company calculates earnings per share in accordance with ASC 260, Earnings Per Share. Basic earnings per share is computed by dividing income available to common shareholders by the weighted average common shares outstanding during the period. Diluted earnings per share is computed by dividing income available to common shareholders by the weighted average common shares outstanding during the period, assuming all potentially dilutive common shares were issued.
Diluted earnings per share considers the potential dilution that could occur if securities, including stock options and RSUs or other contracts to issue common stock were exercised and converted into common stock. Stock options are dilutive if their exercise prices are less than the current stock price. RSUs are dilutive because they represent grants over vesting periods which do not require employees to pay exercise prices. The dilution shown in the tables below includes the potential dilution from both stock options and RSUs. The weighted-average computation of the dilutive effect of potentially issuable shares of Common stock under the treasury stock method excludes the effect of securities that would be anti-dilutive.
The calculation of weighted-average common shares outstanding during each respective period includes activity related to share repurchases made under the Company’s share repurchase programs, as discussed further in “Note 8. Shareholders’ Equity.”
The following table summarizes the calculation of earnings per share:
(Dollars in thousands except share and per share data)
Effect of dilutive securities:
Common stock options and RSUs
461,523
745,242
Basic and diluted earnings per share:
(0.02)
Included in the computation of diluted shares:
Stock options with exercise price below average market price
Share count
368,293
622,677
Minimum exercise price
8.57
6.87
Maximum exercise price
43.89
35.17
Excluded from the computation of diluted shares: Antidilutive securities
Outstanding stock-based compensation awards
32,624
78,240
The Company’s investments in debt securities are classified as available-for-sale, and are summarized as follows (dollars in thousands):
March 31, 2026
Gross
Amortized
unrealized
Fair
cost
gains
losses
value
U.S. Government agency securities
23,483
29
(511)
23,001
Asset-backed securities
229,536
(680)
228,905
Tax-exempt obligations of states and political subdivisions
14,613
(87)
14,552
Taxable obligations of states and political subdivisions
17,827
43
(64)
17,806
Residential mortgage-backed securities
445,276
8,774
(4,033)
450,017
Collateralized mortgage obligation securities
55,461
14
(894)
54,581
Commercial mortgage-backed securities
855,761
11,673
(9,755)
857,679
1,641,957
20,608
(16,024)
December 31, 2025
25,503
63
(457)
25,109
234,029
205
(133)
234,101
9,614
62
(40)
9,636
18,941
45
(59)
18,927
454,837
13,039
(3,553)
464,323
58,129
44
(593)
57,580
856,273
14,306
(8,505)
862,074
1,657,326
27,764
(13,340)
The amortized cost and fair value of the Company’s investment securities at March 31, 2026, by contractual maturity, are shown below (dollars in thousands). Expected maturities may differ from contractual maturities based on the timing of cashflows from the underlying collateral.
Available-for-sale
Due before one year
22,093
21,957
Due after one year through five years
279,539
281,334
Due after five years through ten years
500,946
505,377
Due after ten years
839,379
837,873
The table below indicates the length of time individual securities had been in a continuous unrealized loss position (dollars in thousands):
Less than 12 months
12 months or longer
Fair Value
Unrealized losses
Description of Securities
8,454
(88)
10,732
(423)
19,186
169,151
6,406
(82)
1,155
(5)
7,561
12,933
62,538
(494)
28,460
(3,539)
90,998
33,076
(311)
11,868
(583)
44,944
238,918
(2,081)
107,926
(7,674)
346,844
Total unrealized loss position investment securities
518,543
(3,736)
173,074
(12,288)
691,617
2,521
(1)
11,660
(456)
14,181
59,024
3,456
(33)
1,153
(7)
4,609
14,053
18,630
(62)
28,886
(3,491)
47,516
34,149
(75)
12,721
(518)
46,870
173,572
(873)
119,778
(7,632)
293,350
291,352
(1,177)
188,251
(12,163)
479,603
The Company’s loans originate from several lending lines of business, including:
SBLs, or small business loans, are comprised primarily of Small Business Administration “SBA” loans.
Direct lease financing includes lease financing for commercial and government vehicle fleets and, to a lesser extent, provides lease financing for other equipment.
SBLOCs, or securities-backed lines of credit, are made to individuals, trusts and other entities and are secured by a pledge of marketable securities maintained in one or more accounts for which the Company obtains a securities account control agreement.
IBLOCs, or insurance policy cash value-backed lines of credit, are collateralized by the cash surrender value of eligible insurance policies.
Advisor financing are loans to investment advisors for purposes of debt refinancing, acquisition of another firm or internal succession.
REBL, or real estate bridge lending, are transitional commercial mortgage loans which are made to improve and rehabilitate existing properties which already have cash flow, and which are collateralized by those properties.
Fintech loans consist of short-term extensions of credit, including secured credit card loans, made in conjunction with marketers and servicers.
Other loans include warehouse financing related to loan sales to third-party purchasers of REBL loans, and also includes loans the Company generally no longer offers, including commercial loans, CRA loans and HELOC.
Major classifications of loans, excluding commercial loans at fair value, are as follows (dollars in thousands):
Loans recorded at amortized cost:
SBL non-real estate
242,445
235,282
SBL commercial mortgage
736,470
749,234
SBL construction
19,945
22,382
SBLs
998,860
1,006,898
Direct lease financing
678,740
685,422
SBLOC / IBLOC(1)
1,708,709
1,669,985
Advisor financing
270,811
294,236
Real estate bridge lending
2,279,454
2,188,952
Fintech(2)
1,646,600
1,097,998
Other loans(3)
155,825
157,416
7,738,999
7,100,907
Unamortized loan fees and costs
14,684
15,769
Total loans, net of deferred loan fees and costs
_______
(1)At March 31, 2026 and December 31, 2025, IBLOC loans amounted to $459.3 million and $467.5 million, respectively.
(2)As of March 31, 2026 and December 31, 2025, fintech loans included $1.22 billion and $729.1 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. For secured credit card accounts, we recognize a loan receivable and a deposit liability for the cash collateral that secures those accounts. The remaining fintech loans consist of cashflow underwritten short-term liquidity products to individual borrowers ranging in maturity from 30 to 365 days.
(3)As of both March 31, 2026 and December 31, 2025, Other loans includes $110.7 million related to warehouse financing related to loan sales to third-party purchasers of real estate bridge loans.
During the three months ended March 31, 2026 and 2025, the Company purchased $0.2 million and $15.4 million of SBLs, respectively, none of which were credit deteriorated. Additionally, in the first three months of 2026, the Company participated in SBLs with other institutions in the amount of $0.3 million.
Non-Accrual and Delinquency
A detail of the Company’s delinquent and non-accrual loans by loan category is as follows (dollars in thousands):
30-59 days
60-89 days
90+ days
Total past due
past due
still accruing
Non-accrual
and non-accrual
Current
loans
1,227
1,750
9,726
12,703
229,742
1,680
26,358
28,038
708,432
2,660
17,285
3,846
1,115
411
10,743
16,115
662,625
SBLOC / IBLOC
5,847
6,011
446
12,304
1,696,405
22,454
2,257,000
Fintech
17,188
3,214
1,762
22,164
1,624,436
Other loans
110
1
406
517
155,308
29,898
12,090
2,174
72,793
116,955
7,636,728
1,515
344
8,639
10,498
224,784
224
21,977
22,201
727,033
19,722
2,461
894
1,457
12,066
16,878
668,544
5,328
65
251
6,090
1,663,895
14,459
9,755
24,214
2,164,738
24,701
3,791
2,030
30,522
1,067,476
209
2
142
464
156,952
34,438
5,205
18,199
55,685
113,527
7,003,149
The following table summarizes non-accrual loans with and without an ACL as of the periods indicated (dollars in thousands):
Non-accrual loans with a related ACL
Related ACL
Non-accrual loans without a related ACL
Total non-accrual loans
6,432
1,132
3,294
5,361
963
3,278
3,879
809
22,479
3,009
801
18,968
710
37
1,950
35
10,533
2,523
11,881
4,211
185
IBLOC
207
12,700
796
9,754
34,700
5,504
38,093
21,407
6,217
34,278
Interest which would have been earned on loans classified as non-accrual for the three months ended March 31, 2026 and 2025, was $1.1 million and $0.4 million, respectively. No income on non-accrual loans was recognized during the three months ended March 31, 2026 or 2025.
During the three months ended March 31, 2026 amounts reversed from interest income totaled $0.6 million, and primarily consist of $0.4 million of REBL and $0.2 million of SBL commercial mortgage. During the three months ended March 31, 2025 amounts reversed from interest income totaled $0.5 million and primarily consist of $0.3 million of REBL and $0.1 million of SBL non-real estate. The interest reversals represent interest receivable balance on loans at the time of transfer into non-accrual status.
Loan Modifications
There were no loan modifications for the three months ended March 31, 2026. During the three months ended March 31, 2025, loans modified to borrowers experiencing financial difficulty, and related information are as follows (dollars in thousands):
Three months ended March 31, 2025
Payment delay as a result of a payment deferral
Percent of total loan category
5,348
2.79%
2,738
0.40%
8,086
0.13%
The following table shows an analysis of loans that were modified during the three months ended March 31, 2025, presented by loan classification (dollars in thousands):
Payment Status (Amortized Cost Basis)
delinquent
The following table describes the financial effect of modifications made during the three months ended March 31, 2025:
Combined Rate and Maturity
Weighted average interest reduction
Weighted average term extension (in months)
More-than-insignificant-payment delay(1)
(1)Percentage represents the principal of loans deferred divided by the principal of the total loan portfolio.
The Company had no commitments to extend additional credit to loans classified as modified as of March 31, 2026. As of March 31, 2025, there were no specific reserves on the $8.1 million of loans classified as modified.
Allowance for Credit Loss
The Company had no significant changes to its quantitative and qualitative measures used in measuring the allowance for credit losses as of March 31, 2026. For additional information regarding the Company’s allowance estimate, see Note 2, “Summary of Significant Accounting Policies” and Note 5, “Loans, net,” in the 2025 Form 10-K.
A summary of the Company’s primary portfolio pools and loans accordingly classified by year of origination, at March 31, 2026 and December 31, 2025 is as follows (dollars in thousands):
As of March 31, 2026
2024
2023
2022
Prior
Revolving loans at amortized cost
SBL non real estate
Pass
13,153
71,206
48,894
57,874
15,801
16,853
223,781
Special mention
384
1,976
1,434
42
3,836
Substandard
1,741
6,459
4,823
1,805
14,828
Total SBL non-real estate
51,019
66,309
22,058
18,700
40,058
105,910
141,693
77,866
98,227
218,672
682,426
496
1,964
4,383
11,443
18,286
2,380
11,567
8,037
13,774
35,758
Total SBL commercial mortgage
144,569
91,397
110,647
243,889
1,101
7,234
4,402
4,548
Total SBL construction
Non-rated
1,744
66,245
232,613
160,305
107,238
74,922
18,566
659,889
369
669
358
757
271
85
2,509
25
2,776
6,494
3,884
1,419
14,598
Total direct lease financing
68,358
233,307
163,439
114,489
79,077
20,070
SBLOC/IBLOC
7,650
1,700,573
486
Total SBLOC/IBLOC
3,769
66,640
65,857
59,120
42,055
24,528
261,969
968
7,874
8,842
Total advisor financing
43,023
32,402
265,445
703,225
468,624
188,190
528,394
66,488
2,220,366
23,757
25,577
59,088
Total real estate bridge lending
492,381
553,971
76,242
137,470
34,130
1,473,238
1,644,838
Total fintech
35,892
402
12,278
56,994
54,456
160
29,812
1,066
142,739
Total other loans
42,496
529,756
1,280,408
976,123
524,213
809,027
436,459
3,183,013
As of December 31, 2025
2021
70,191
50,083
60,331
17,797
12,295
6,765
217,462
262
992
1,480
71
2,805
1,171
6,635
4,276
1,360
1,573
15,015
51,516
67,958
23,553
13,655
8,409
107,357
156,610
83,047
105,359
69,554
166,921
688,848
2,749
2,708
4,406
4,275
7,459
21,597
706
9,622
14,656
8,579
5,226
38,789
160,065
95,377
124,421
82,408
179,606
4,769
10,449
4,504
1,777
253,367
177,838
121,969
87,456
20,241
4,269
665,140
719
410
759
295
2,186
16
2,741
7,321
4,335
1,839
67
16,319
255,879
180,989
130,049
92,086
22,083
4,336
6,882
1,662,616
487
68,249
69,705
70,411
48,197
16,471
12,253
285,286
979
7,971
8,950
49,176
24,442
689,651
453,603
271,554
569,730
120,938
2,105,476
9,576
42,735
21,411
73,900
496,338
591,141
140,268
141,605
954,364
1,095,969
2,029
143,634
494
8,852
9,346
56,998
54,458
252
343
34,621
1,096
147,928
57,492
43,615
1,397,222
1,023,520
640,013
880,629
285,149
248,929
2,625,445
In the above tables, the special mention classification indicates weaknesses that may, if not cured, threaten the borrower’s future repayment ability. A substandard classification reflects an existing weakness indicating the possible inadequacy of net worth and other repayment sources. These classifications are used both by regulators and peers, as they have been correlated with an increased probability of credit losses.
A detail of the changes in the ACL by loan category is as follows (in thousands):
Deferred fees and costs
Beginning 1/1/2026
6,337
3,118
15,675
1,041
2,207
5,949
31,137
501
66,200
Charge-offs
(92)
(512)
(52,130)
(52,734)
Recoveries
100
21,919
22,056
Provision (reversal)
310
(107)
(24)
(2,121)
20
(176)
781
(31)
27,495
Ending balance
6,592
3,011
211
13,142
1,061
2,031
6,730
470
63,017
March 31, 2025
Beginning 1/1/2025
4,972
3,203
342
13,125
1,195
2,054
6,603
12,909
450
44,853
(736)
(44,224)
(45,022)
18
260
5,646
5,924
34
(536)
73
7
(60)
270
(18)
46,742
4,962
2,667
415
13,753
1,202
1,994
6,873
20,199
432
52,497
A summary of the Company’s gross charge-offs classified by portfolio segment and year of origination are as follows (dollars in thousands):
Three months ended March 31, 2026
(194)
(247)
(71)
(51)
(9,214)
(42,865)
Total Charge-offs
(286)
(564)
(91)
(1,068)
(43,156)
(1,074)
(626)
Total net charge-offs decreased $8.4 million, to $30.7 million for the three months ended March 31, 2026, from $39.1 million for the three months ended March 31, 2025. The improvement in net charge-offs was primarily driven by improved performance of fintech and direct lease financing.
The Company has agreements with a partner to originate and service fintech loans, which includes credit enhancement provisions through which incurred losses on fintech loans are covered by the partner. The Company recognizes an estimate of loss on this portfolio through its allowance for credit losses on its fintech loans on the Condensed Consolidated Balance Sheets, with provision for credit losses on fintech loans recognized on the Condensed Consolidated Statements of Operations. In addition, the Company recognizes a corresponding amount of credit enhancement asset on the Condensed Consolidated Balance Sheets and non-interest income — fintech loan credit enhancement in the Condensed Consolidated Statements of Operations. The measurement of the expected loan losses and the related credit enhancement are based on the same estimate and are equal and correlate to like amounts in the Condensed Consolidated Statements of Operations. The Company has recognized a credit enhancement asset on the Condensed Consolidated Balance Sheets
related to the estimated recovery of its realized losses on fintech loans of $29.8 million and $31.1 million as of March 31, 2026 and December 31, 2025, respectively. All fintech loans are covered by credit enhancement agreements as of March 31, 2026.
The scheduled maturities of the direct financing leases reconciled to the total lease receivables as of March 31, 2026 are as follows (dollars in thousands):
Remaining 2026
258,482
2027
134,352
2028
85,732
2029
45,971
2030
15,980
2031 and thereafter
3,150
Total undiscounted cash flows
543,667
Residual value(1)
221,893
Difference between undiscounted cash flows and discounted cash flows
(86,820)
Present value of lease payments recorded as lease receivables
(1) Of the total residual value, $42.9 million is not guaranteed by the lessee or other guarantors.
Off-Balance Sheet Exposure
In addition to estimating credit loss for outstanding loans, the Company estimates expected credit losses over the entire period in which there is exposure to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancelable by the Company. The estimate of loss for unfunded loan commitments relates to our off-balance sheet credit exposure, and is adjusted through the provision for unfunded commitments. The estimate considers the likelihood that funding will occur over the estimated life of the commitment. The amount of the reserve on such exposures as of March 31, 2026 and as of December 31, 2025 was $1.6 million and $1.4 million, respectively, and is recognized within Other liabilities in the Condensed Consolidated Balance Sheets.
The Company’s debt and borrowing arrangements consist of:
Senior debt:
Senior notes due 2030
200,000
Debt issuance costs
(3,680)
(3,747)
Senior debt, net
Assets pledged as collateral that are not available to pay the Company’s general obligations as of March 31, 2026 consisted of $4.75 billion of loans held for investment at amortized cost and $251.7 million of investment securities that were pledged for short-term-borrowing agreements. In addition, there were $13.6 million of loans held for investment at amortized cost that were pledged for other long-term borrowings at March 31, 2026.
The Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank lines are periodically utilized to manage liquidity. The amount of loans pledged varies and the collateral may be unpledged at any time to the extent the collateral exceeds advances. As of March 31, 2026, based on the amount of loans and investment securities pledged, as outlined above, total capacity of short-term borrowings was $3.45 billion, there was $470.0 million borrowed and $2.98 billion available capacity.
Recurring Measurements
Assets and liabilities measured at fair value on a recurring basis, segregated by fair value hierarchy, are summarized below (dollars in thousands) as of the dates indicated:
Level 1
Level 2
Level 3
Investment securities, available-for-sale
Obligations of states and political subdivisions
32,358
Total investment securities, available-for-sale
1,804,570
1,676,310
28,563
1,842,277
1,702,888
Activity in Level 3 instruments is summarized below (dollars in thousands):
Commercial loans,
at fair value
Beginning balance
223,115
Total net (losses) or gains (realized/unrealized)
Included in earnings(1)
Purchases, advances, sales and settlements
Advances
1,763
Settlements
(11,135)
(13,659)
211,580
Total losses year-to-date included
in earnings attributable to the change in
unrealized gains or losses relating to assets still
held at the reporting date as shown above.
(1)For commercial loans at fair value, gains or losses are recognized in Non-interest income—Net realized and unrealized gains on commercial loans, at fair value in the Condensed Consolidated Statement of Operations.
Information related to assumptions used in the valuation of Level 3 instruments is as follows (dollars in thousands):
Discount Rate Assumption
At March 31, 2026
At December 31, 2025
Range
Weighted average
Commercial loans, at fair value:
Commercial - SBA
5.67%
5.73%
Non-SBA commercial real estate
6.80%-8.70%
7.19%
6.50%-8.98%
6.94%
Non-Recurring Measurements
Assets measured at fair value on a nonrecurring basis consist of certain loans that are collateral-dependent with specific reserves that are recognized in Loans, net on our Condensed Consolidated Balance Sheets, and Other real estate owned.
Collateral-dependent loans were $29.2 million and $15.2 million as of March 31, 2026 and December 31, 2025, respectively. Loans recorded at amortized cost that are in non-accrual status are treated as collateral dependent to the extent they have resulted from borrower financial difficulty (and not from administrative delays or other mitigating factors) and are not brought current. For these loans, fair value is measured based on inputs including recent sales of similar collateral, and is a Level 3 measurement. At March 31, 2026, the Company’s basis in the non-accrual loans, or the loan principal of $34.7 million was reduced by specific reserves of $5.5 million within the ACL as of that date, representing the deficiency between principal and estimated collateral values, which were reduced by estimated costs to sell.
Other real estate owned (OREO) were $61.0 million and $60.7 million as of March 31, 2026 and December 31, 2025, respectively and are periodically measured for impairment based on any decline in fair value below carrying value. For OREO, fair value is based upon appraisals of the underlying collateral by third-party appraisers, reduced by 7% to 10% for estimated selling costs, and is a Level 3 non-recurring measurement. During the three months ended March 31, 2026 and 2025, the Company did not recognize unrealized losses from the impairment of OREO and realized gains (losses) on the disposition of OREO. Unrealized and realized gains or losses on OREO are recognized in Other Non-interest expense in the Condensed Consolidated Statements.
Fair Value of Other Financial Instruments
The following tables provide information regarding carrying amounts and estimated fair values of all the Company’s financial instruments (dollars in thousands) as of the dates indicated:
Carrying
Estimated
amount
fair value
7,722,550
FRB, FHLB and ACBB stock
204,160
10,854
Other liabilities:
Accrued interest payable
1,803
7,073,348
202,503
11,220
6,802
Share Repurchases
2026 Repurchase Program
On July 7, 2025, the Board authorized a share repurchase program of up to $200.0 million for 2026 (the “2026 Repurchase Plan”).
During the three months ended March 31, 2026, the Company repurchased 843,061 shares of its common stock in the open market under the 2026 Repurchase Program at an average price of $59.31 per share.
2025 Repurchase Program
On October 23, 2024, the Board approved a common stock repurchase program for the 2025 fiscal year (the “2025 Repurchase Program”), which authorizes the Company to repurchase $37.5 million in value of the Company’s common stock per fiscal quarter in 2025, for a maximum amount of $150.0 million. On July 7, 2025, the Board authorized the increase of the capacity of the Company’s existing share repurchase program for the third and fourth quarters of 2025 to $300.0 million.
During the three months ended March 31, 2025, the Company repurchased 684,445 shares of its common stock in the open market under the 2025 Repurchase Program at an average price of $54.79 per share.
Stock-Based Compensation
Restricted Stock Units (RSUs)
In the first quarter of 2026, the Company granted 388,821 RSUs, having a vesting period of three years. At issuance, the RSUs had a fair value of $62.05 per unit.
For additional information regarding the Company’s stock-based compensation plans, see Note 13, “Stock-Based Compensation,” in the 2025 Form 10-K.
It is the policy of the Federal Reserve that financial holding companies should pay cash dividends on common stock only out of income available over the past year and only if prospective earnings retention is consistent with the organization’s expected future needs and financial condition. The policy provides that a financial holding company should not maintain a level of cash dividends that undermines the financial holding company’s ability to serve as a source of strength to its banking subsidiaries.
Various federal and state statutory provisions limit the amount of dividends that subsidiary banks can pay to their holding companies without regulatory approval. Without the prior approval of the OCC, a dividend may not be paid if the total of all dividends declared by a bank in any calendar year is in excess of the current year’s net income combined with the retained net income of the two preceding years. Additionally, a dividend may not be paid in excess of a bank’s retained earnings. Moreover, an insured depository institution may not pay a dividend if the payment would cause it to be less than “adequately capitalized” under the prompt corrective action framework as defined in the Federal Deposit Insurance Act or if the institution is in default in the payment of an assessment due to the FDIC. Similarly, a banking organization that fails to satisfy regulatory minimum capital conservation buffer requirements will be subject to certain limitations, which include restrictions on capital distributions.
In addition to these explicit limitations, federal and state regulatory agencies are authorized to prohibit a banking subsidiary or financial holding company from engaging in an unsafe or unsound practice. Depending upon the circumstances, the agencies could take the position that paying a dividend would constitute an unsafe or unsound banking practice.
As of March 31, 2026, the Bank met all regulatory requirements for classification as well capitalized under the regulatory framework for prompt corrective action.
The following table sets forth our regulatory capital amounts and ratios for the periods indicated:
Tier 1 capital
Total capital
Common equity
to average
to risk-weighted
Tier 1 to risk
assets ratio
weighted assets
The Bancorp, Inc.
7.30%
11.21%
12.26%
The Bancorp Bank, National Association
9.18%
14.06%
15.10%
"Well capitalized" institution (under federal regulations-Basel III)
5.00%
8.00%
10.00%
6.50%
7.64%
11.08%
12.19%
9.70%
14.03%
15.13%
The Delaware FCRA Matter. On June 12, 2019, the Bank was served with a qui tam lawsuit filed in the Superior Court of the State of Delaware, New Castle County. The Delaware Department of Justice intervened in the litigation. The case is titled The State of Delaware, Plaintiff, Ex rel. Russell S. Rogers, Plaintiff-Relator v. The Bancorp Bank, Interactive Communications International, Inc., and InComm Financial Services, Inc., Defendants. The lawsuit alleged that the defendants violated the Delaware False Claims and Reporting Act the (“DFCRA”) by not paying balances on certain open-loop “Vanilla” prepaid cards to the State of Delaware as unclaimed property. The complaint sought actual and treble damages, statutory penalties, and attorneys’ fees. The Bank filed an answer denying the allegations.. The Bank and other defendants previously filed a motion to dismiss the action, but that motion to dismiss was denied and the parties proceeded to engage in the first phase of discovery. On March 25, 2025, the State of Delaware filed a motion to dismiss or to stay the lawsuit without prejudice, due to a related administrative proceeding commenced by or on behalf of the State of Delaware Office of Unclaimed Property and the Bank responded to that motion by seeking dismissal with prejudice. On February 10, 2026, the court granted the State of Delaware’s motion to dismiss or stay in part, dismissing with prejudice the operative complaint alleging DFCRA violations by Bancorp and InComm and stating in pertinent that “[f]or avoidance of doubt, this means neither the State nor Relator may seek damages for any such claim via this action now that the State has sought dismissal for the purposes of pursuing administrative remedies for any of the alleged violations of Delaware’s Abandoned and Unclaimed Property Law.” Bancorp and InComm will now proceed to separate administrative proceedings in Delaware related to those certain open-loop “Vanilla” prepaid cards.
THE CFPB CID Matter. On March 27, 2023, the Bank received a Civil Investigative Demand (“CID”) from the Consumer Financial Protection Bureau (“CFPB”) seeking documents and information related to the Bank’s escheatment practices in connection with certain accounts offered through one of the Bank’s program partners. The Bank responded to the CID and has not received further inquiries from the CFPB regarding the matter.
The City Attorney of San Francisco Matter. On November 21, 2023, TBBK Card Services, Inc. (“TBBK Card”), a wholly-owned subsidiary of the Bank, was served with a complaint filed in the Superior Court of the State of California (the “California Superior
Court”), captioned People of the State of California, acting by and through San Francisco City Attorney David Chiu, Plaintiff v. InComm Financial Services, Inc., TBBK Card Services, Inc., Sutton Bank, Pathward, N.A., and Does 1-10, Defendants. The complaint principally alleges that the defendants engaged in unlawful, unfair or fraudulent business acts and practices related to the packaging of “Vanilla” prepaid cards and the refund process for unauthorized transactions that occurred due to card draining practices. On December 14, 2023, the case was removed to the U.S. District Court for the Northern District of California. On March 26, 2024, the case was remanded to the California Superior Court. TBBK Card has vigorously defended against the claims. On May 6, 2024, TBBK Card filed a motion to quash service of the summons as to TBBK Card for lack of personal jurisdiction. TBBK Card’s motion to quash, and subsequent related appeals, were denied. On December 12, 2025, an amended complaint containing additional factual allegations was filed in the California Superior Court. The Company is not yet able to determine whether the ultimate resolution of this matter will have a material adverse effect on the Company’s financial condition or operations.
The Oxygen Matter. On November 25, 2024, the Bank commenced arbitration through the American Arbitration Association seeking approximately $1.808 million from Oxygen, Inc. (“Oxygen”) owed under a Private Label Account Program Agreement related to unpaid invoices and indemnification obligations owed by Oxygen. On January 13, 2025, Oxygen answered the Bank’s arbitration demand, generally denying the allegations made by the Bank, and filed a Counterclaim against the Bank. The Counterclaim alleges (i) that the termination of the Private Label Account Program Agreement was pretextual, (ii) the Bank breached its notification obligations in terminating the Private Label Account Program Agreement, (iii) the Bank breached the implied covenant of good faith and fair dealing, and (iv) conversion of $1.2 million by the Bank. The ad damnum clause of the Counterclaim also seeks compensatory damages in an amount not less than $40 million. The Bank believes it has meritorious defenses and intends to vigorously defend against the Counterclaim. The Company is not yet able to determine whether the ultimate resolution of this matter will have a material adverse effect on the Company’s financial condition or operations.
The Putative Class Action Matter. On March 14, 2025, Nathan Linden filed a putative securities class action complaint captioned Nathan Linden v. The Bancorp, Inc., et al. in the U.S. District Court for the District of Delaware against the Company and certain of its current and former officers. The complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder and purports to assert a class action on behalf of persons and entities that purchased or otherwise acquired Company securities between January 25, 2024 and March 4, 2025. The complaint alleges, among other things, that the defendants made materially false and/or misleading statements and omissions about the Company’s business, prospects, and operations, with a focus on the Company’s commercial real estate bridge loan (“REBL”) portfolio and related provision for credit losses. On September 29, 2025, the court appointed Southeastern Pennsylvania Transportation Authority (“SEPTA”) as lead plaintiff; the case is now captioned Southeastern Pennsylvania Transportation Authority v. The Bancorp, Inc., et al. On December 22, 2025, SEPTA filed its amended class action complaint, which alleges that between January 26, 2024 and March 25, 2025, the defendants made materially false and/or misleading statements and omissions about certain loans in the Company’s REBL portfolio and related provision for credit losses. The named plaintiff seeks unspecified damages, fees, interest, and costs. The Company intends to vigorously defend against the allegations in the amended complaint. On February 20, 2026, the Company filed its motion to dismiss the amended complaint and further briefing on that motion remains outstanding. The Company is not yet able to determine whether the ultimate resolution of the matter will have a material adverse effect on the Company’s financial condition or operations.
The Ingenium Matter. On February 2, 2026, the Bank was made aware of a complaint filed in the Delaware Superior Court, Complex Commercial Division by Ingenium Capital Group, LLC (“Ingenium”) captioned as Ingenium Capital Group, LLC v. The Bancorp Bank, N.A., C.A. No. N26C-01-487 PAW CCLD. Prior to service of the complaint, on February 19, 2026, Ingenium filed its amended complaint. In the amended complaint, Ingenium alleges that the Bank committed fraud or breached a letter of understanding signed in January 2023 by inducing Ingenium to invest upwards of $10 million in Oxygen, Inc. (the same entity that the Bank is arbitrating against in the Oxygen Matter described above) and then by terminating its contract with Oxygen in February 2024. The amended complaint seeks not less than $10 million in damages, plus costs of litigation, and interest. The Bank intends to vigorously defend against the claims. We are not yet able to estimate any potential liability of the Bank.
In addition, we are a party to various routine legal proceedings arising out of the ordinary course of our business. Management believes that none of these actions, individually or in the aggregate, will have a material adverse effect on our financial condition or operations.
The following tables provide segment information for the periods indicated (dollars in thousands):
Credit Solutions
REBL
Institutional Banking
Commercial
Corporate
Interest income
1,826
44,707
27,844
32,378
23,036
Interest allocation
56,959
(21,663)
(15,635)
(15,993)
(3,668)
Interest expense
31,865
1,506
10
7,596
26,920
23,044
10,703
16,375
11,772
Provision for credit losses(1)
847
(160)
(1,897)
(32)
Non-interest income(1)
68,431
1,167
318
2,586
23
Direct non-interest expense
4,749
1,124
1,040
5,021
25,543
381
580
303
243
28
624
508
3,966
2,686
1,235
276
2,040
4,634
10,871
Income before non-interest expense allocations
58,449
20,933
8,661
13,288
(22,619)
Non-interest expense allocations
Risk, financial crimes, and compliance
7,811
707
940
1,531
(10,989)
Information technology and operations
3,803
256
1,213
2,302
(7,574)
Other allocated expenses
4,123
895
1,484
2,066
(8,568)
Total non-interest expense allocations
15,737
1,858
3,637
5,899
(27,131)
Income before taxes
42,712
19,075
5,024
7,389
4,512
10,116
4,518
1,190
1,069
32,596
14,557
3,834
5,639
3,443
(1)Non-interest income of the Fintech segment includes $28.8 million of Fintech loan credit enhancement income related to the estimated recovery from a Fintech partner for losses on fintech loans where the measurement of the expected loan loss and credit enhancement are based on the same estimate. The remainder of Non-interest income for Fintech is $38.1 million total fintech fees.
240
47,870
28,012
31,907
31,773
73,380
(24,369)
(16,736)
(17,716)
(14,559)
42,743
1,643
3,663
30,877
23,501
9,633
13,551
307
(68)
764
80,342
520
275
2,342
163
4,329
1,214
2,800
5,290
20,036
287
36
493
386
159
766
474
3,588
2,611
1,560
319
2,117
6,800
13,407
57,965
20,878
5,598
7,875
(17,078)
7,040
576
788
1,297
(9,701)
3,506
190
1,516
2,011
(7,223)
4,086
825
1,689
1,926
(8,526)
14,632
1,591
3,993
5,234
(25,450)
43,333
19,287
1,605
2,641
8,372
10,404
4,631
385
634
32,929
1,220
2,007
6,361
(1)Non-interest income of the Fintech segment includes $45.9 million of Fintech loan credit enhancement income related to the estimated recovery from a Fintech partner for losses on fintech loans where the measurement of the expected loan loss and credit enhancement are based on the same estimate. The remainder of Non-interest income for Fintech is $34.4 million total fintech fees.
1,717,501
2,443,341
1,996,056
1,748,596
1,993,270
8,181,278
1,321
276,205
5,587
737,423
1,177,306
2,362,489
1,981,479
1,762,882
2,068,269
7,377,441
1,817
269,743
5,591
1,008,037
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) provides information about our results of operations, financial condition, liquidity and asset quality. This information is intended to facilitate your understanding and assessment of significant changes and trends related to our financial condition and results of operations. This MD&A should be read in conjunction with our financial information in our Form 10-K for the fiscal year ended 2025 (the “2025 Form 10-K”) and the interim Condensed Consolidated Financial Statements and notes thereto contained in this Quarterly Report on Form 10-Q.
MD&A is organized in the following sections:
Overview
Executive Summary
Results of Operations
Financial Condition
Liquidity and Capital Resources
Asset and Liability Management
Important Note Regarding Forward-Looking Statements
When used in this Quarterly Report on Form 10-Q, statements 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 annual fiscal 2026 results, increased growth, profitability, and volumes, and our ability to reallocate or reduce resources, and relate to our current assumptions, projections, and expectations about our business and future events, including current expectations about important economic, political, and technological 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 our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and other documents that we file from time to time with the Securities and Exchange Commission as well as the following:
an inconsistent recovery from an extended period of unpredictable economic and growth conditions in the U.S. economy may adversely impact our assets and operating results and result in increases in payment defaults and other credit risks, decreases in the fair value of some assets and increases in our provision for credit losses;
weak economic and credit market conditions, either globally, nationally or regionally, may result in a reduction in our capital base, reducing our ability to maintain deposits at current levels;
changes in the interest rate environment, particularly in response to inflation, could adversely affect our revenue and expenses and the availability and cost of capital, cash flows and liquidity;
volatility in the banking sector (including perception of such conditions) and responsive actions taken by governmental agencies to stabilize the financial system could result in increased regulation or liquidity constraints;
operating costs may increase;
adverse legislation or governmental or regulatory policies may be promulgated;
we may fail to satisfy our regulators with respect to legislative and regulatory requirements;
management and other key personnel may leave or change roles without effective replacements;
increased competition may reduce our client base or cause us to lose market share;
the costs of our interest-bearing liabilities, principally deposits, may increase relative to the interest received on our interest-bearing assets, principally loans, thereby decreasing our net interest income;
loan and investment yields may decrease, resulting in a lower net interest margin;
geographic concentration could result in our loan portfolio being adversely affected by regional economic factors;
the market value of real estate that secures certain of our loans may be adversely affected by economic and market conditions and other conditions outside of our control such as lack of demand, natural disasters, changes in neighborhood values, competitive overbuilding, weather, casualty losses and occupancy rates;
cybersecurity risks, including data security breaches, ransomware, malware, “denial of service” attacks and identity theft, could result in disclosure of confidential information, operational interruptions and legal and financial exposure;
natural disasters, pandemics, other public health crises, acts of terrorism, geopolitical conflict, including trade disputes and tariffs, sanctions, war or armed conflict, such as the conflicts between Russia and Ukraine and the ongoing military operations involving the U.S., Israel and Iran, and the possible expansion of such conflicts in surrounding areas, or other catastrophic events could disrupt the systems of us or third-party service providers and negatively impact general economic conditions;
we may not be able to sustain our historical growth rates in our loan, prepaid and debit card and other lines of business;
our focus on growth in fintech solutions and its future potential impact on our operations and financial condition may result in new operational, legal and financial risks;
risks related to actual or threatened litigation;
our ability to maintain effective internal control over financial reporting;
our internal controls and procedures may fail or be circumvented, and our risk management policies may not be adequate; and
we may not be able to manage credit risk to desired levels, improve our net interest margin and monitor interest rate sensitivity, manage our real estate exposure to capital levels and maintain flexibility if we achieve asset growth.
We caution readers not to place undue reliance on forward-looking statements, which speak only as of the date hereof and are based on information presently available to our management. We undertake no obligation to publicly revise or update these forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q except as required by applicable law.
Overview
We are a Delaware financial holding company, and our primary, wholly-owned subsidiary is The Bancorp Bank, National Association. The Bank is a federally chartered commercial bank located in Sioux Falls, South Dakota and is a FDIC insured institution. Most of our revenue and income is currently generated through the Bank. An overview of our operations follows, including discussion of Fintech Solutions and Credit Solutions.
Our business strategy is focused on Fintech Solutions, which partners with fintech companies and other technology focused payment-based providers (collectively “partners”) to deliver payment, deposit, and sponsored lending products that attract stable, lower-cost deposits and generate fee income. Our fintech services are provided to organizations with a pre-existing customer base, and the products are tailored to support or complement the services provided by these organizations to their customers. We typically provide these services under the name and through the facilities of each organization with whom we develop a relationship. Fintech services include:
Program sponsorship includes debit, credit and prepaid cards that we issue for companies that market directly to end users. Our card-accessed deposit account types are diverse and include: consumer and business debit, general purpose reloadable prepaid, pre-tax medical spending benefit, payroll, gift, government, corporate incentive, reward, business payment accounts and others. The Bank issues the cards, provides access to the card networks, maintains deposits, and is the sponsor bank of record for accounts.
Payment services delivers real-time, end-to-end payment processing, including automated clearing house (“ACH”) and Rapid Funds Transfer products. Our ACH accounts facilitate bill payments and our acquiring accounts provide clearing and settlement services for payments made to merchants which must be settled through associations such as Visa or Mastercard.
Sponsored lending, or Fintech loans, consist of secured credit cards and unsecured short-term extensions of credit that are originated by the Bank, with the marketing and servicing assistance of our partners. The revenue generated through fintech loan agreements is primarily fee revenue and not interest income.
Deposits generated through these partner relationships are deployed into loan and lease products offered by both Fintech sponsored lending and the Credit Solutions business line. As of March 31, 2026, 93% of our total deposits were sourced from the Fintech Solutions business, primarily from program sponsorship.
Credit Solutions is our lending business and is focused on offering flexible, specialty credit solutions, and we develop customized products and programs to meet the needs of our clients. Our loan programs include: (i) Real estate bridge lending (REBL), which is comprised primarily of apartment building rehabilitation loans; (ii) Institutional Banking, which is comprised of security-backed lines of credit (SBLOC), cash value insurance policy-backed lines of credit (IBLOC) and advisor financing; and (iii) Commercial Loans which includes Small Business Loans (“SBL”) which is comprised primarily of Small Business Administration (“SBA”) loans and direct lease financing. Our total loan portfolio also includes the Fintech loans generated by the Fintech Solutions business. The loans in our non-fintech portfolio are secured by collateral, and the fintech loans are backed by credit enhancement agreements from our partners.
Executive Summary
We remain focused on growing our fintech revenues through new partnerships, products and services. Fintech loans of $1.65 billion as of March 31, 2026 increased 50% compared to the $1.10 billion balance at December 31, 2025 and increased 187% compared to the March 31, 2025 balance of $574.0 million. Certain loan fees on fintech loans are recorded as non-interest income and totaled $5.6 million for the quarter ended March 31, 2026 compared to $3.6 million for the quarter ended March 31, 2025.
We continue to invest in our infrastructure, with a focus on investing in artificial intelligence tools to gain efficiency and productivity of our people and platform, and reallocating or reducing resources where appropriate. We believe that our infrastructure can accommodate significant additional growth without proportionate increases in expense.
We remain focused on returning capital through share repurchases and repurchased 843,061 shares of our common stock at an average cost of $59.31 per share during the quarter ended March 31, 2026. Primarily driven by share repurchases, outstanding shares, net of treasury shares at March 31, 2026 decreased 1% to 41.859 million from 42.355 million shares at December 31, 2025.
Financial Highlights
Financial highlights include:
(Dollars in millions, except per share data)
Results of Operations
60.1
57.2
Key Performance Indicators
Return on assets
2.57%
2.49%
Return on equity
35.13%
28.64%
Equity to assets (as of period end)
7.04%
8.84%
Net interest margin
3.87%
4.07%
Average deposits
8,317
8,311
Average loans and leases
7,255
6,386
Non-interest income: fintech fees
38.1
34.4
Prepaid and debit card gross dollar volume (GDV)(1)
52,513
44,650
(1)Gross dollar volume represents the total dollar amount spent on prepaid, debit and credit cards issued by The Bancorp Bank, N.A.
Our net income increased to $60.1 million in the first quarter of 2026 from $57.2 million in the first quarter of 2025, an increase of $2.9 million, or 5.1%.
Earnings per diluted share increased to $1.41 in the first quarter of 2026 from $1.19 in the first quarter of 2025, an increase of 18%, driven both by the increase in net income and a 5.4 million decrease in weighted average diluted shares, primarily driven by our share repurchase activity during the year.
Key components of our change in net income between periods include:
Net interest income decreased $2.9 million, consisting of a $10.0 million decrease in interest income partially offset by a $7.0 million decrease in interest expense. The most significant driver of the net change is average deposits on balance sheet from customers was significantly higher in the first quarter of 2025, driven by one-time volumes from wildfire insurance refunds and higher fintech on-balance sheet volumes.
Non-interest income decreased $11.1 million, to $72.5 million in the first quarter of 2026 from $83.6 million in the first quarter of 2025. That decrease includes a $17.0 million decrease in Fintech loan credit enhancement income driven by improved performance of fintech loans, partially offset by a $3.6 million increase in total fintech fees primarily driven by volume growth, and a $2.7 million increase in other non-interest income driven by higher other fee income on loans and deposit sweep income.
Provision for credit losses, total decreased $19.3 million, to $27.6 million in the first quarter of 2026, from $46.9 million in the first quarter of 2025. That decrease includes $17.0 million decrease in provision for fintech loans, which directly relates to the credit enhancement income decrease outlined above. The remaining decrease in total provision between periods was $2.3 million, primarily driven by a recovery booked in the first quarter of 2026 as a result of improved credit in our direct lease financing portfolio.
See further discussion of fintech loans and the related credit enhancement in “Financial Condition—Total Loan Portfolio—Fintech Programs” in this MD&A.
Non-interest expense increased $1.7 million, to $55.0 million in the first quarter of 2026, from $53.3 million in the first quarter of 2025. That increase is primarily driven by a $3.8 million increase in salary and employee benefits from organizational changes and higher incentive accruals, partially offset by $2.0 million reimbursement from insurance related to a legal settlement that was previously expensed in the fourth quarter of 2025.
Detailed discussion of our financial results and the drivers of these fluctuations follows in “Results of Operations.”
Our strategic focus on growing our fintech business fee-based income and fintech loan portfolio had an impact on our KPIs as follows:
Average loans and leases grew to $7.25 billion in the first quarter of 2026 from $6.39 billion in the first quarter of 2025, an increase of $868.5 million or 13.6%, primarily driven by a $648.3 million increase in our average fintech portfolio, reflecting our continued strategic shift towards sponsored lending.
Non-interest income—consumer credit fintech fees increased to $5.6 million in the first quarter of 2026, up 55.4% from $3.6 million in the first quarter of 2025 which reflected continued organic volume growth with existing partners and products and the impact of new products launched within the past year. Prepaid and debit card gross dollar volume (“GDV”) increased to $52.51 billion, up 17.6% from $44.65 billion in the first quarter of 2025, which directly contributed to a $1.0 million, or 3.7%, increase in Prepaid, debit card and related fees within Non-interest income—fintech fees. GDV growth may not have a direct impact on the related fee income due to the different product fee structures within the total mix.
Net interest margin decreased to 3.87% in the first quarter of 2026 from 4.07% in the first quarter of 2025, driven by the shift in our loan portfolio to a greater percentage of fintech loans, for which we primarily earn fee income and not interest income, combined with the impact of Federal Reserve rate decreases from the third quarter of 2025. See further discussion of the growth in Fintech lending contributing to margin compression under “Results of Operations—Net Interest Income—Growth of Fintech Lending” in the following section.
Our efforts to return capital to shareholders through share repurchases had an impact on our ratio of equity to assets. At March 31, 2026, the ratio of equity to assets was 7.04%, compared to 7.38% at December 31, 2025, primarily driven by reductions in equity from share repurchases partially offset by an increase in equity capital from retained earnings.
Results of Operations - Q1 2026 to Q1 2025
Net Interest Income
Our net interest income for the first quarter of 2026 decreased $2.9 million, or 3.2%, to $88.8 million from $91.7 million in the first quarter of 2025.
Growth of Fintech Lending. Our strategy is to continue to drive growth in our Fintech lending business, as seen in the mix shift of our loan portfolio to 15.4% of average loans in the first quarter 2026, compared to 7.3% at the end of the first quarter of 2025. A significant portion of these loans are zero percent interest and, as such, do not recognize interest income, however we do generate fee revenue from these loans, through our partnership agreements. This mix shift to non-interest earning loans results in a reduction of the calculated average rate earned by total loans, average rate earned by our net interest-earning assets, and net interest margin in the above analysis. Offsetting these impacts is the growth in Consumer fintech fee income recognized within non-interest income in our Consolidated Statements of Operations which was $5.6 million and $3.6 million for the first quarters of 2026 and 2025, respectively.
We expect to continue to increase the proportion of Fintech loans in our portfolio in 2026 and beyond, and therefore we expect to see continued compression in our average rate earned on loans, and net interest margin, as the mix of fintech loans continues to grow. However, we also expect growth in our fintech fees within non-interest income driven by the increase in that portfolio.
Interest Income
Interest income for the first quarter of 2026 was $129.8 million, a decrease of $10.0 million from $139.8 million in the first quarter of 2025, primarily driven by $10.5 million lower income on interest-earning deposits. In the first quarter of 2025, average deposits on balance sheet from customers of $1.14 billion was significantly higher than $250.0 million in first quarter of 2026, driven by one-time volumes from wildfire insurance refunds and higher fintech on-balance sheet volumes. This higher interest income on interest earning cash deposits directly correlates to higher interest expense paid on deposits, discussed further below.
Interest income from loans was $107.5 million in the first quarter of 2026, $1.4 million lower than $108.9 million in the first quarter of 2025, driven by $3.0 million lower interest earned on non-fintech loans partially offset by $1.6 million higher interest earned on fintech loans. For non-fintech loans, lower interest earned was primarily driven by lower rates, as the average rate decreased to 6.89% for first quarter of 2026, compared to 7.34% for first quarter of 2025, while average balance was 3.7% higher. The loan portfolio is reflecting the impact of Federal Reserve rate decreases which continued in the third quarter of 2025. For fintech loans, higher interest income of $1.6 million was driven by higher volumes of fintech loans. See “Growth of Fintech Lending” discussion above for further information.
Interest Expense
Interest expense for the first quarter of 2026 decreased $7.1 million to $41.0 million from $48.1 million in the first quarter of 2025, driven by $11.1 million lower interest expense on deposits, partially offset by $1.4 million higher interest on short-term borrowings and $2.6 million higher interest expense on senior debt. Interest expense on deposits was $11.1 million higher in 2025 due to the higher on-balance sheet deposits related to wildfire insurance refunds and higher fintech balances, and directly correlates to higher income on interest earning cash deposits as discussed above under interest income. Interest expense on short-term deposits was $1.4 million higher in 2026, as that funding source was utilized to fund higher average loans on balance sheet in the first quarter of 2026 and that funding source was not utilized at all in first quarter 2025. Interest expense on senior debt was $2.6 million higher, due to higher outstanding principal and higher rate on senior debt. In August 2025, $200 million of 7.375% Senior Notes due 2030 were issued, the proceeds of which were used in part to repay at maturity the $100 million of outstanding 4.75% Senior notes due 2025.
Average Daily Balances
The following table presents the average daily balances of assets, liabilities and shareholders’ equity and the respective interest earned or paid on interest-earning assets and interest-bearing liabilities, as well as average annualized rates, for the periods indicated:
Three months ended March 31,
2026 vs 2025
Average
Balance
Interest
Rate
Due to Volume
Due to Rate
Assets:
Interest-earning assets:
Non-fintech loans
6,132,928
105,598
6.89%
5,913,806
108,562
7.34%
4,023
(6,987)
(2,964)
Fintech loans
1,115,138
0.66%
466,809
0.21%
1,253
1,586
Loans, net of deferred loan fees and costs(1)
7,248,066
107,424
5.93%
6,380,615
108,802
6.82%
4,356
(5,734)
(1,378)
Leases-bank qualified(2)
6,922
152
8.78%
5,853
139
9.50%
(12)
13
Investment securities-taxable
1,662,417
4.79%
1,489,329
4.87%
2,107
(314)
1,793
Investment securities-nontaxable(2)
10,426
165
6.33%
6,256
105
6.71%
70
(10)
60
250,018
3.51%
1,136,402
4.46%
(9,890)
(594)
(10,484)
Net interest-earning assets
9,177,849
129,857
5.66%
9,018,455
139,853
6.20%
(3,332)
(6,664)
(9,996)
(55,633)
(44,915)
361,873
345,791
9,484,089
9,319,331
Liabilities and shareholders' equity:
Deposits:
8,088,696
33,210
1.64%
8,174,676
45,045
2.20%
(474)
(11,361)
(11,835)
227,961
2,079
3.65%
136,688
1,330
3.89%
888
(139)
749
8,316,657
1.70%
8,311,364
2.23%
414
(11,500)
(11,086)
145,884
3.79%
13,687
5.76%
14,050
5.55%
Subordinated debt
7.01%
7.61%
(20)
196,203
7.90%
96,244
5.13%
1,282
1,359
Total deposits and liabilities
8,685,832
1.89%
8,435,059
2.28%
3,072
(10,154)
(7,082)
104,884
74,537
8,790,716
8,509,596
Shareholders' equity
693,373
809,735
Net interest income on tax equivalent basis(2)
88,880
91,794
(6,404)
3,490
(2,914)
Tax equivalent adjustment
66
51
Net interest margin(2)
(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 2026 and 2025.
For the first quarter of 2026 compared to first quarter of 2025, average interest-earning assets increased $159.4 million, reflecting an $867.5 million increase in average loans and a $177.3 million increase in average investment securities, partially offset by a decrease in average interest-earning deposits of $886.4 million. For those respective periods, average deposits and liabilities increased $250.8 million, primarily driven by a $145.9 million increase in short-term borrowings and a $100.0 million increase in senior debt.
Net Interest Margin
Our net interest margin (calculated by dividing net interest income by average interest-earning assets) for the first quarter of 2026 was 3.87% compared to 4.07% for the first quarter of 2025, a decrease of 20 basis points. The average yield on interest-earning assets decreased 54 basis points, due to the shift of our portfolio mix to more fintech loans where we primarily earn fee income as discussed further under “Growth of Fintech Lending” above, plus lower market short-term interest rates. In addition, the cost of deposits and interest-bearing liabilities decreased 39 basis points, or a net change of 15 basis points, driven primarily by a 53 basis point decrease in average rate on deposits primarily due to a lower rate environment in the first quarter of 2026.
Provision for Credit Losses
Our provision for credit losses was $27.6 million for the first quarter of 2026, a decrease of $19.3 million compared to a provision of $46.9 million for the first quarter of 2025. The decrease is primarily attributable to $17.0 million lower provision for fintech loans driven by improved performance of that loan portfolio. The lower fintech loan provision correlates to a lower amount of related non-interest income from a credit enhancement contractually provided by a third party. Accordingly, there have been no related net impact from these amounts. See further discussion of this program in “Financial Condition—Allowance for Credit Loss—Fintech Programs” in MD&A.
In addition, the provision for credit losses on non-fintech loans was a reversal of $1.3 million in the first quarter of 2026 compared to provision expense of $0.9 million in the first quarter of 2025. The provision reversal in the first quarter of 2026 is primarily driven by improvements in credit quality of the direct lease financing portfolio.
For more information about our provision, allowance and credit loss experience, see “Financial Condition—Portfolio Performance” below and “Note 5. Loans” to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.
Non-Interest Income
Non-interest income was $72.5 million in the first quarter of 2026, a decrease of $11.1 million compared to $83.6 million in the first quarter of 2025. The decrease between those respective periods is primarily driven by a $17.0 million decrease in fintech loan credit enhancement income, which was partially offset by $3.6 million in higher total fintech fees and $2.7 million of higher other non-interest income.
Fintech loan credit enhancement income decreased $17.0 million driven by improved performance of fintech loans, which correlates to a like amount for provision for credit losses on fintech loans. See further discussion above under “Provision for Credit Losses”.
Total fintech fees increased $3.6 million, which includes a $1.0 million increase in prepaid, debit card and related fees, or 3.7%, to $26.7 million for the first quarter of 2026, compared to $25.7 million in the first quarter of 2025, driven by higher transaction volume from new clients and organic growth from existing clients. In addition, ACH, card and other payment processing fees increased $0.7 million, or 12.9%, to $5.8 million for the first quarter of 2026, compared to $5.1 million in the first quarter of 2025, reflecting an increase in rapid funds transfer volume. Consumer credit fintech fees increased $2.0 million to $5.6 million for the first quarter of 2026, compared to $3.6 million in the first quarter of 2025, reflecting increased loan volume.
Other non-interest income increased $2.7 million for the first quarter of 2026, compared to the first quarter of 2025, primarily driven by $1.1 million higher other fee income from loans and $0.9 million of fees earned on deposit sweeps.
Non-Interest Expense
The following table presents the principal categories of non-interest expense for the periods indicated:
Increase (Decrease)
3,808
141
123
104
(13)
(367)
198
356
(49)
(246)
(248)
1,732
Total non-interest expense was $55.0 million for the first quarter of 2026, an increase of $1.7 million, or 3.2%, compared to $53.3 million for the first quarter of 2025. The increase reflects $3.8 million higher salaries and benefits expense primarily driven by higher costs from
incentive compensation accruals and costs related to organization changes, partially offset by a $2.0 million reimbursement from insurance in the first quarter of 2026 related to a legal settlement that was previously expensed in fourth quarter of 2025.
Income Taxes
Income tax expense was $18.6 million for the first quarter of 2026 compared to $18.1 million in the first quarter of 2025. A 23.7% effective tax rate and a 24.0% effective tax rate in the first quarters of 2026 and 2025, respectively, based on a 21% federal tax rate and the impact of various state income taxes. The tax rate in the first quarter of the year is typically lower than our full-year effective rate, which was 24.7% for full year 2025, due to the tax impact of stock-based compensation activity from the first quarter of each year.
Financial Condition
Total Assets
Total assets at March 31, 2026 were $9.90 billion, a $546.3 million increase from $9.35 billion at December 31, 2025. The change in total assets was primarily driven by a $637.0 million increase in our total loan portfolio.
We are managing our balance sheet to remain under $10 billion in assets in order to maintain our exemption from regulated limits on interchange fees, among other benefits, under the Durbin Amendment and the Federal Reserve’s implementing regulations. Our strategy in managing our balance sheet includes balancing our investments in our loan portfolio and investment securities to strategically direct the growth of our business, and sweeping deposits off-balance sheet to other financial institutions, as discussed further in “Financial Condition—Deposits” in MD&A.
Investment Securities
The following table presents a summary of our available-for-sale investment securities, by major category:
Total Investment securities available for sale, at fair value
The following table shows the contractual maturity distribution and the weighted average yield of our investment securities as of March 31, 2026 (dollars in thousands). The weighted average yield was calculated by dividing the amount of individual securities to total securities in each category, multiplying by the yield of the individual security and adding the results of those individual computations.
Zero to one year
After one to five years
After five to ten years
Over ten years
Average yield
Total balance
3,524
2.84%
12,878
4.76%
6,599
3.33%
1,662
5.42%
6,420
5.43%
50,917
5.48%
169,906
5.30%
Tax-exempt obligations of states and political subdivisions(1)
2.30%
1,977
11,420
4.53%
9,547
3.16%
6,125
4.28%
2,134
6.00%
12
2.56%
2,113
5.07%
447,892
4.89%
32
2.15%
2.95%
54,544
4.14%
9,549
2.48%
265,265
4.37%
437,487
4.70%
145,378
4.10%
Weighted average yield
2.99%
4.78%
4.77%
(1)If adjusted to their taxable equivalents, yields would approximate 2.91%, 4.90%, and 5.73% for zero to one year, five to ten years, and over ten years, respectively, at a federal tax rate of 21%.
Total Loan Portfolio
The following table summarizes our loan portfolio, by loan category (dollars in thousands):
Other loans(1)
SBLs, at fair value
64,530
68,374
Real estate bridge lending, at fair value
63,730
71,015
Total commercial loans, at fair value
Total loan portfolio
7,881,943
7,256,065
(1)As of both March 31, 2026 and December 31, 2025, Other loans includes $110.7 million related to warehouse financing related to loan sales to third-party purchasers of real estate bridge loans.
The majority of our loan portfolio is loans recorded at amortized cost, which are recognized net of an allowance for credit loss. Loans, net of deferred loan fees and costs increased to $7.75 billion at March 31, 2026 from $7.12 billion at December 31, 2025. This $637.0 million increase is primarily driven by growth in fintech loans of $548.6 million, and a $90.5 million increase in REBL loans.
Commercial loans, at fair value are comprised of non-SBA commercial real estate loans and SBA loans which had been originated for sale or securitization through the first quarter of 2020, and which are now being held for investment on the balance sheet. These loans continue to be recognized at fair value, and this portfolio declined $11.1 million from December 31, 2025, as this portfolio continues to runoff. All originations are now being recognized at amortized cost.
The underlying nature of the collateral for our loan portfolio includes:
SBL non-real estate are collateralized by business assets, which may include certain real estate;
SBL commercial mortgage and construction are collateralized by real estate for small businesses;
SBLOC are collateralized by marketable investment securities while IBLOC are collateralized by the cash value of life insurance;
Advisor financing are collateralized by investment advisors’ business franchises;
Real estate bridge loans are primarily collateralized by apartment buildings, or other commercial real estate; and
Direct lease financing are collateralized primarily by vehicles or equipment.
Fintech loans include secured credit card accounts of $1.22 billion and $729.1 million as of March 31, 2026 and December 31, 2025, respectively, which are backed dollar-for-dollar by cash collateral by each individual cardholder that are recognized as deposits on our Condensed Consolidated Balance Sheets, and these loans are required to be repaid in-full monthly. The remaining fintech loans consist of cashflow underwritten short-term liquidity products to individual borrowers ranging in maturities from 30 to 365 days. All fintech loans are covered by credit enhancement agreements, as discussed further below under “Fintech Programs.”
The following table summarizes the concentration by state of our real estate bridge loans as of March 31, 2026 (dollars in thousands):
Origination date LTV
Texas
608,511
72%
Georgia
354,533
Florida
278,624
67%
Missouri
111,104
75%
New Jersey
96,748
Ohio
96,673
70%
Indiana
91,306
68%
Other States each <$90 million
641,955
Portfolio Estimated Maturities
The following table presents loan categories by maturity for the period indicated. Actual repayments historically have, and will likely in the future, differ significantly from contractual maturities because individual borrowers generally have the right to prepay loans, with or without prepayment penalties. See “Asset and Liability Management” in this MD&A for a discussion of interest rate risk.
Within
One to five
After five but
one year
years
within 15 years
After 15 years
80
13,519
228,846
14,378
39,186
247,100
435,806
6,380
3,616
9,949
121,390
538,535
18,815
125
131,999
138,687
979,464
1,299,990
71,172
63,387
11,394
9,872
14,100
65,672
11,942
36,546
4,562,398
2,152,288
660,400
492,173
7,867,259
Loan maturities after one year with:
Fixed rate
1,294
7,539
2,481
10,020
516,300
15,790
532,090
131,608
137,783
269,391
1,052,246
29,136
4,842
6,497
40,475
42,360
Total loans at fixed rates
1,780,483
160,896
1,947,876
Variable rate
12,225
-
241,071
31,647
244,619
712,072
13,565
22,235
3,025
25,260
391
904
1,295
247,744
34,251
6,552
3,375
44,178
23,312
71,800
Total at variable rates
371,805
499,504
485,676
1,356,985
Total maturities after one year
3,304,861
Portfolio Performance
Loans are considered to be non-performing if they are on a non-accrual basis, or are past due 90 days or more and still accruing interest. A loan which is past due 90 days or more and still accruing interest remains on accrual status only when it is both adequately secured as to principal and interest and is in the process of collection.
The following table summarizes our non-performing assets, with discussion of significant changes between periods to follow (dollars in thousands):
Non-accrual loans
Loans past due 90 days or more and still accruing
Total non-performing loans
74,967
73,884
Other real estate owned (OREO)
Total non-performing assets
135,965
134,579
Non-accrual loans increased $17.1 million, primarily driven by a $12.7 million increase in REBL loans and $4.4 million increase in SBL commercial mortgage.
Loans past due 90 days or more still accruing interest amounted to $2.2 million at March 31, 2026 and $18.2 million at December 31, 2025. The $16.0 million decrease is primarily driven by a $14.5 million REBL loan that left 90 days or more past due status after we entered into a loan agreement with a new borrower with greater financial capacity.
We evaluate loans under an internal loan risk rating system as a means of identifying problem loans. At March 31, 2026, there were $163.1 million of loans classified as special mention and substandard in total, a decrease of $31.4 million, or 16%, from $194.5 million at December 31, 2025. The decrease is primarily driven by a $24.4 million decrease in criticized Real estate bridge loans, and a $6.3 million decrease in criticized small business commercial mortgage loans.
See “Note 5. Loans” to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for further information on loan modification and classified loans.
Asset Quality Ratios
The following table summarizes select asset quality ratios for each of the periods indicated:
As of
ACL to loans
0.81%
0.93%
1.81%
Non-fintech
0.54%
0.58%
Non-performing loan ratios:
ACL to non-performing loans - Total
84.1%
89.6%
n/m
45.4%
48.8%
Non-performing loans to total loans - Total(1)
0.97%
1.04%
0.11%
0.18%
1.20%
1.19%
Non-performing assets to total assets(1)
1.37%
1.44%
(1) Includes loans 90 days past due still accruing interest.
For the three months ended
Net charge-offs to average loans
0.42%
0.61%
2.71%
8.26%
0.01%
Allowance for Credit Losses (“ACL”) to total loans decreased slightly to 0.81% at March 31, 2026 compared to 0.93% at December 31, 2025. The fintech ACL to Loans ratio decreased to 1.81% as of March 31, 2026 from 2.84% at December 31, 2025, driven by both an increase in the mix of secured credit card loans that have insignificant expected losses, and improved performance of unsecured fintech loans.
Non-performing loan ratios are also calculated showing fintech and non-fintech separately, as fintech has a relatively small contribution to the non-performing loan population due to the short-term nature of those receivables, the majority of are charged off before they reach 90 days past due. However, the fintech loan receivable portfolio growth does have an impact on the denominator of those ratios in total.
ACL to non-performing loans—Total decreased to 84.1% at March 31, 2026 from 89.6% at December 31, 2025, and for non-fintech, the ratios are 45.4% and 48.8% for the respective periods. Non-performing loans are subject to specific review when preparing our allowance for credit losses estimate. We assess the collectability of the receivables, the nature of the non-performance status, the loan to collateral value, and other factors, when determining whether a specific reserve is required. The ACL as of March 31, 2026 did not increase proportional to the increase in this population based on our assessment of the collectability of that population.
Non-performing loans to total loans declined to 0.97% at March 31, 2026, from 1.04% at December 31, 2025, as the 9% increase in total loan population was greater than the 1% increase in non-performing loans.
Non-performing assets to total assets ratio declined to 1.37% at March 31, 2026 from 1.44% at December 31, 2025, as total assets increased 6% while non-performing assets increased 1%.
See further discussion of the non-performing loan population directly above under “Portfolio Performance.”
Net charge-offs to average loans was 0.42% for the three months ended March 31, 2026 compared to 0.61% for the three months ended March 31, 2025.
Fintech net charge-offs to average loans of 2.71% for the three months ended March 31, 2026 was an improvement from 8.26% for the three months ended March 31, 2025, driven both by improved performance of unsecured loans and an increase in the mix of fintech
loans to secured credit card accounts which have insignificant losses upon default. Any net charge-offs on fintech loans are covered by credit enhancement agreements, through which a partner of the Fintech business covers incurred losses on such fintech loans. The measurement of the ACL for fintech loans and the related credit enhancement are based on the same estimate and are equal and correlate to like amounts in our income statement. See “Total Loan Portfolio—Fintech Programs” for further discussion of the credit enhancement.
Excluding fintech loans, net charge-offs to average loans was 0.01% for both the three months ended March 31, 2026 and 2025.
Non-Accrual and 90+ Days Past Due Loans
The following table summarizes the Company’s non-accrual loans and loans past due 90 days or more still accruing interest, by year of origination, at March 31, 2026 and December 31, 2025:
90+ Days past due
405
4,332
3,275
1,714
700
9,377
8,685
91
52
94
131
1,606
5,560
2,923
1,658
5,654
3,054
697
11,154
Total IBLOC
Total fintech loans
407
Total 90+ Days past due
1,853
Total Non-accrual
2,711
19,269
26,494
23,873
3,109
2,705
1,060
5,318
6,049
2,308
120
92
98
1,147
1,696
6,302
3,254
787
27
6,394
3,352
1,174
13,523
144
2,150
1,149
2,807
14,729
13,555
19,901
4,247
Allowance for Credit Losses
We review the adequacy of our ACL on at least a quarterly basis to determine a provision for credit losses to maintain our ACL at a level we believe is appropriate to recognize current expected credit losses. A summary of loans recorded at amortized cost and the allowance follows (dollars in thousands):
Loans, net of
Allowance for
deferred loan
% of
credit loss
fees and costs
total loans
3.13%
3.31%
10.53%
0.26%
0.31%
Total SBLs
9,814
12.89%
9,690
14.15%
8.75%
15,674
9.63%
22.04%
23.47%
3.49%
4.13%
29.40%
30.76%
21.24%
15.43%
2.19%
2.43%
Subtotal
100.00%
Deferred costs
The ACL decreased $3.2 million from December 31, 2025, primarily driven by a $2.5 million decrease in reserves on direct lease financing, and a $1.4 million decrease in reserves on fintech loans, in each case driven by improved credit performance on the underlying loan portfolio segments.
Fintech Programs
Our fintech programs include consumer transaction accounts and fintech loans.
Consumer transaction accounts consist primarily of Bank-issued stored value prepaid or debit cards. For this program, we recognize a deposit liability for the current balance of the cards and recognize fee-based revenue in Non-interest income—Prepaid, debit card and related fees; we do not have any receivables or allowance risk related to the payment programs.
Fintech loans consist of short-term loans originated by our Bank, with the marketing and servicing assistance of third-party relationships. Loans receivable originated under these fintech agreements are governed by an agreement with the borrower and may include: secured credit cards and unsecured short-term extensions of credit. For the secured credit card program, we recognize a loan receivable and a deposit liability for the cash collateral that secures those accounts. Unsecured fintech loans include payroll advance and other short term-extensions of credit; those accounts are typically repaid within a year of origination.
As of March 31, 2026, and December 31, 2025, all fintech loans, both secured and unsecured, are covered by credit enhancement agreements. The third-party agreements governing the fintech loans include provisions for credit enhancements, through which the third party guarantees losses on such fintech loans (either in whole or in part). When a fintech loan meets a defined delinquency level, we recognize a charge-off of the receivable, and the incurred losses are covered by the third party. Any subsequent recoveries from the charged-off loan are credited to the third party.
The third-party relationship agreements governing fintech loans include requirements for pledging cash reserve accounts at the Bank as collateral for loss exposure, through which we can collect when losses occur. The reserve accounts are then replenished by the counterparties based on contractually required thresholds. In addition to the reserve accounts, the agreements also provide for the right to offset any cashflows we owe to the third parties (such as for monthly revenues) against any net realized loan losses. While we continually monitor the risk of these counterparties, establish the reserve thresholds at levels we consider appropriate to cover loss exposure on these short-term loan receivables, and we have additional protection from our rights to net realized loan losses against cashflows owed to the third party, if the third party defaults under their agreement and/or is unable to fulfill their contractual obligations to replenish the reserve account and cover losses, we may be exposed to loan losses in excess of our net reserve position.
The loan receivable agreement with the borrower and the third-party credit enhancement agreements are required to be accounted for separately as freestanding contracts in accordance with U.S. GAAP. As such, we recognize the separate units of account as follows:
Fintech loans receivable from the borrower are recognized on the Balance sheet, along with an estimate of credit loss for fintech loans through the allowance. Provision for credit losses on fintech loans is recognized on the Statement of Operations.
A credit enhancement asset is recognized on the Balance Sheet for the estimated recovery under the third-party credit enhancement agreement, and the Company recognizes non-interest income—fintech loan credit enhancement on the Statement of Operations. In addition, deposit liability on our Balance Sheets includes amounts for reserve account collateral held to fund losses under the credit enhancement agreements.
The measurement of the estimated credit losses and the expected recovery from the credit enhancement are based on the same estimate and correlate to like amounts in our financial statements. We recognized credit enhancement assets of $29.8 million and $31.1 million on the Balance Sheets as of March 31, 2026, and December 31, 2025, respectively.
Net Charge-offs
The following tables reflect the relationship of year-to-date average loans outstanding, based upon quarter end averages, and net charge-offs by loan category (dollars in thousands):
512
52,130
52,734
(37)
(100)
(21,919)
(22,056)
Net charge-offs
55
412
30,211
30,678
Average loan balance
189,299
857,224
19,012
670,375
1,687,407
286,494
2,266,559
163,480
7,254,988
Ratio of net charge-offs during the period to average loans during the period
0.03%
0.06%
736
44,224
45,022
(260)
(5,646)
(5,924)
476
39,098
149,008
804,132
41,342
700,384
1,579,163
271,492
2,306,479
67,659
6,386,468
0.07%
Net charge-offs were $30.7 million for the three months ended March 31, 2026, a decrease of $8.4 million from net charge-offs of $39.1 million during the three months ended March 31, 2025. In the three months ended March 31, 2026, $30.2 million of net charge-offs were recognized on fintech loans, or a 2.20% ratio to average loans, compared to $38.6 million, and 11.19% for the prior year period. The improved fintech charge-off levels reflect better credit performance of the unsecured fintech loans, and an increase in the mix of secured credit card loans which have an insignificant level of expected losses.
Excluding fintech, net charge-offs on the remaining portfolio were $0.5 million for each of the three months ended March 31, 2026 and March 31, 2025.
Our primary source of funding is deposit acquisition. At March 31, 2026, we had total deposits of $8.43 billion compared to $8.17 billion at December 31, 2025, which reflected an increase of $264.5 million, or 3.2%. Due to the nature of our deposit products, daily deposit balances are subject to variability, and deposits averaged $8.32 billion in the first quarter of 2026. As of March 31, 2026, 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.
Demand and interest checking is $8.28 billion of total deposits as of March 31, 2026, and primarily consists of balances from prepaid, debit and other payment card accounts that the Bank issues to fund payments for salary, medical spending, commercial, general purpose reloadable, corporate and other incentive, gift, government payments and transaction accounts. These accounts have an established history of stability and lower cost than certain other types of funding. Deposits also include payment processing balances, funds received as collateral supporting the secured credit card program of our Fintech segment, and small population of traditional deposits.
Savings and money market is $149.0 million of total deposits as of March 31, 2026.
We do not have a traditional branch system. Our deposit accounts are comprised primarily of millions of small transaction-based consumer balances which are obtained through and with the assistance of our partners. We have long-term contractual relationships with the partners of our Fintech business which sponsor such accounts as discussed further in Item 1. “Business—Our Strategies” in our Annual Report on Form 10-K for the year ended December 31, 2025.
Of our $8.43 billion total deposits at March 31, 2026, the top three affinity groups accounted for approximately $4.85 billion, the next three largest $1.33 billion, and the four subsequent largest $806.0 million. The top ten partner relationships at March 31, 2026 consisted of $4.11 billion related to payroll, debit, and government-based accounts such as child support, and $2.88 billion related to consumer and business payment companies, including companies sponsoring incentive and gift card payments.
Of our $8.17 billion total deposits at year-end 2025, the top three affinity groups accounted for approximately $3.83 billion, the next three largest $1.35 billion, and the four subsequent largest $811.7 million. The top ten partner relationships at year end 2025 consisted of $3.20 billion related to payroll, debit, and government-based accounts such as child support, and $2.80 billion related to consumer and business payment companies, including companies sponsoring incentive and gift card payments.
In addition, we sweep deposits off our balance sheet to other institutions as part of our funding strategies, which totaled $1.34 billion and $849.9 million as of March 31, 2026 and December 31, 2025, respectively. Such sweeps are utilized to manage our balance sheet composition and deposit portfolio diversity.
The following table presents the average balance and rates paid on deposits for the periods indicated (dollars in thousands):
balance
rate
Of the demand and interest checking balance shown above, $136.4 million and $136.0 million for 2026 and 2025, respectively, represented balances on which we paid interest. The remaining balance for each period reflects amounts subject to fees paid to third parties, which are based upon a contractual percentage applied to a rate index, generally the effective federal funds rate, and therefore classified as interest expense.
Short-term Borrowings
Short-term borrowings consist of amounts borrowed on our lines of credit with the Federal Reserve Bank or FHLB. There were $470.0 million and $199.0 million of borrowings with FHLB at March 31, 2026 and December 31, 2025, respectively. Our use of short-term borrowings fluctuates based on our current funding needs for loans. We generally utilize overnight borrowings to manage our daily reserve requirements at the Federal Reserve.
The following table summarizes short-term borrowings:
Balance at period end
Average for the three months ended March 31, 2026
N/A
Average during the year
58,060
Maximum month-end balance
450,000
Weighted average rate year-to-date
4.30%
Rate at period end
3.88%
3.95%
Liquidity defines our ability to generate funds at a reasonable cost to support asset growth, meet deposit withdrawals, satisfy borrowing needs and otherwise operate on an ongoing basis. Maintaining an adequate level of liquidity depends on the institution’s ability to efficiently meet both expected and unexpected cash flows without adversely affecting daily operations or financial condition. The Company’s liquidity management policy requirements include sustaining defined liquidity minimums, concentration monitoring and management, stress testing, contingency planning and related oversight. Based on our sources of funding and liquidity discussed below, we believe we have sufficient liquidity and capital resources available for our needs in the next 12 months and for the foreseeable future. We invest the funds we do not need for daily operations primarily in our interest-bearing account at the Federal Reserve. We actively monitor our positions and contingent funding sources daily.
Deposits. Our primary source of funding has been consumer deposits generated through partner relationships. Average total deposits increased by $5.3 million, or 0.1%, to $8.32 billion for the first quarter of 2026 compared to the first quarter of 2025. While we do not have a traditional branch system, we believe that our core deposits, which include our demand, interest checking, savings and money market accounts, have similar characteristics to those of a bank with a branch system, but are tied to long-term partner contracts. Certain components of our deposits experience seasonality, creating greater excess liquidity at certain times. The largest deposit inflows occur in the first quarter of the year when certain of our accounts are credited with tax refund payments from the U.S. Treasury.
As of March 31, 2026, 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. We do not believe that such uninsured accounts present a significant liquidity risk.
In addition, we sweep deposits off our balance sheet to other institutions as part of our funding strategies, which totaled $1.34 billion and $849.9 million as of March 31, 2026 and December 31, 2025, respectively. Such sweeps are utilized to optimize diversity within our funding structure by managing the percentage of individual client deposits to total deposits. Deposit sweeps represent an amount of deposits that are greater than our current needs to fund our assets. The swept deposits serve as a source of contingent liquidity, as we may move a portion of those deposits back on balance sheet, at our election.
Other Funding Sources. While consumer deposit accounts, including prepaid and debit card accounts, comprise the vast majority of our funding sources, we maintain secured borrowing lines with the FHLB and the Federal Reserve that are collateralized by pledged loans and investment securities. As of March 31, 2026, we had $470.0 million borrowed under these facilities, and based on the current amount of loans and securities pledged there currently is $2.98 billion of additional available capacity which we can access anytime. We expect to continue to maintain our facilities with the FHLB and Federal Reserve.
Loans. We utilize the deposits that are primarily generated by our Fintech business to fund our credit solutions business and the sponsored lending loans of fintech. Historically, growth in deposits has funded growth of loans. At March 31, 2026, outstanding loans amounted to $7.75 billion, compared to $7.12 billion at the prior year end, an increase of $637.0 million representing a use of funds.
Investment Securities. One source of contingent liquidity is available-for-sale securities, which amounted to $1.65 billion at March 31, 2026, compared to $1.67 billion at December 31, 2025. In the first quarter of 2026, $5.0 million of securities purchases were exceeded by $25.6 million of securities cash inflows.
Cash. At March 31, 2026, our interest-earning deposits within cash and cash equivalents were $58.5 million, and primarily consisted of deposits with the Federal Reserve. Interest-earning deposit average balances decreased to $250.0 million in the first quarter of 2026 from $1.14 billion in the first quarter of 2025.
Funding Commitments and Uses. As a holding company conducting substantially all our business through our subsidiaries, our near-term need for liquidity consists principally of cash for required interest payments on debt, which includes semi-annual interest payments on the 2030 Senior Notes of $7.4 million, and quarterly interest payments on the subordinated debentures of $300,000, and cash required to fund operating costs.
We had outstanding commitments to fund loans, including unused lines of credit, of $2.33 billion as of March 31, 2026. The majority of our commitments are variable rate and originate with SBLOC. The amount of such commitments represents amounts unfunded under existing loan agreements, where there is capacity for the customer to borrow additional amounts as long as there is no violation of any condition of the contract. The funding requirements for such commitments occur on a measured basis over time and would be funded by normal deposit growth.
As of March 31, 2026, we had cash reserves of $11.1 million at the holding company. Stock repurchases along with interest payments on our debt instruments have historically been funded by dividends from the Bank, as have interest payments on the above debt instruments. Stock repurchases may be terminated at any time. The holding company’s sources of liquidity are primarily comprised of dividends paid by the Bank to the Company, and the issuance of debt.
Capital Resources and Requirements. We must comply with capital adequacy guidelines issued by our regulators. A bank must, in general, have a Tier 1 leverage ratio of 5.00%, a ratio of Tier I capital to risk-weighted assets of 8.0%, a ratio of total capital to risk-weighted assets of 10.0% and a ratio of common equity Tier 1 to risk weighted assets of 6.5% to be considered “well capitalized.” The Tier I leverage ratio is the ratio of Tier 1 capital to average assets for the quarter. “Tier I capital” includes common shareholders’ equity, certain qualifying perpetual preferred stock and minority interests in equity accounts of consolidated subsidiaries, less intangibles. At March 31, 2026, the Bank was “well capitalized” under banking regulations.
Asset and Liability Management
Our principal market exposure is to interest rate risk, specifically changes in the Federal Reserve overnight federal funds rate, due to their impact on our net interest income and the market value of our interest-earning assets.
We assess our interest rate risk using both: (i) a Gap Analysis that outlines the estimated timing of when interest-bearing assets and liabilities mature, repay or reprice; and (ii) a Sensitivity Analysis that measures the potential impact on our net portfolio value based on hypothetical changes in interest rates.
Gap Analysis
The following table sets forth the amounts of interest-earning assets and interest-bearing liabilities that were outstanding at March 31, 2026 and the portions of each financial instrument that are anticipated, based upon certain assumptions, to mature or reset in each future period:
1-90
91-364
1-3
3-5
Over 5
Days
Years
68,047
54,802
1,955
4,450,124
727,207
1,670,701
724,435
181,216
Investment securities
270,701
46,539
143,574
319,589
866,138
Total interest-earning assets
4,847,382
777,202
1,869,077
1,045,979
1,047,354
Interest-bearing liabilities:
Deposits: Transaction accounts, as adjusted
4,140,519
Deposits: Savings and money market
Senior debt and subordinated debentures
Total interest-bearing liabilities
4,772,908
Gap
74,474
849,659
Cumulative gap
851,676
2,720,753
3,570,412
4,617,766
Gap to assets ratio
1%
8%
19%
9%
11%
Cumulative gap to assets ratio
28%
37%
48%
The above table provides an approximation of the projected repricing of assets and liabilities at period end on the basis of contractual terms, except for adjustments as noted:
Loans at fair value and Loans, net – We do not assume any prepayment of fixed-rate loans.
Investment securities – Prepayment adjustments are made for mortgage and asset backed securities based on historical data and current market trends.
Deposits – Transaction accounts are comprised primarily of demand deposits. The majority of transaction and savings balances are assumed to be “core” deposits, or deposits that will generally remain with us regardless of market interest rates. We estimate the repricing characteristics of these deposits based on historical performance, past experience, judgmental predictions and other deposit behavior assumptions. However, we may choose not to reprice liabilities proportionally to changes in market interest rates for competitive or other reasons.
Additionally, while demand deposits are non-interest-bearing, related fees paid to affinity groups may reprice according to specified indices, and as such those fees are included in interest expense. We have adjusted the transaction account balances downward to better reflect the impact of their partial adjustment to changes in rates.
Although a gap analysis is a useful measurement device available to management in determining the existence of interest rate exposure, its static focus as of a particular date makes it necessary to utilize other techniques in measuring exposure to changes in interest rates. For example, gap analysis is limited in its ability to predict trends in future earnings and makes no assumptions about changes in prepayment tendencies, deposit or loan maturity preferences or repricing time lags that may occur in response to a change in the interest rate environment.
Interest Rate Sensitivity Analysis
The following table shows impact of hypothetical instantaneous parallel shifts in the yield curve on our net portfolio value and annual net interest income:
Net portfolio value at
Percentage
Rate scenario
Amount
change
+200 basis points
1,710,210
354,148
(4.82%)
+100 basis points
1,709,461
(0.04%)
362,991
(2.45%)
Flat rate
1,710,089
372,092
-100 basis points
1,701,966
(0.48%)
381,250
2.46%
-200 basis points
1,677,831
(1.89%)
388,141
4.31%
These sensitivities are hypothetical and are presented for illustrative purposes only. Changes in fair value and the impact on our net interest income generally cannot be extrapolated because the relationship of the change in fair value may not be linear. Actual interest rate sensitivity could vary substantially from the above analysis if different assumptions are used or actual experience differs from presumed behavior of various deposit and loan categories.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Information about market risk for the quarter ended March 31, 2026 is included in Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Asset and Liability Management” of this Quarterly Report on Form 10-Q. Except for such information, there has been no material change to our assessment of our sensitivity to market risk as discussed in the 2025 Form 10-K.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (our principal executive officer) and our Chief Financial Officer (our principal financial officer), as appropriate, to allow timely decisions regarding required disclosure. Because of inherent limitations, disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of disclosure controls and procedures are met.
Under the supervision of our Chief Executive Officer and Chief Financial Officer, our management conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at a reasonable level of assurance as of March 31, 2026.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
For a discussion of our material pending legal proceedings, see “Note 10. Commitments and Contingencies” to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q, which is incorporated herein by reference.
Item 1A. Risk Factors
Our business, financial condition, operating results and cash flows are subject to various risks and uncertainties, including those described in Part I, Item 1A. “Risk Factors” in the 2025 Form 10-K. There have been no material changes from the risk factors disclosed in the 2025 Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Stock Repurchases
The following table sets forth information regarding the Company’s repurchases of its common stock during the quarter ended March 31, 2026:
Period
Total number of shares purchased
Average price paid per share
Total number of shares purchased as part of publicly announced plans or programs(1)
Approximate dollar value of shares that may yet be purchased under the plans or programs(2)
(Dollars in thousands, except per share data)
January 1, 2026 - January 31, 2026
261,215
68.00
182,237
February 1, 2026 - February 28, 2026
280,000
58.01
165,995
March 1, 2026 - March 31, 2026
301,846
52.99
150,000
843,061
59.31
(1)On July 7, 2025, our Board of Directors approved a common stock repurchase program for the 2026 fiscal year (the “2026 Common Stock Repurchase Program”). Under the 2026 Common Stock Repurchase Program, the Company was authorized to repurchase up to $200.0 million of repurchases depending on the share price, securities laws and stock exchange rules which regulate such repurchases, and repurchased shares may have been reissued for various corporate purposes.
(2)The Company may repurchase shares through open market purchases, including through open market purchases, privately-negotiated transactions, block purchases or otherwise in accordance with applicable federal securities laws, including Rule 10b-18 under the Exchange Act. The share repurchase program may be suspended, amended or discontinued at any time. The 2026 authorization had an expiration date of December 31, 2026.
Item 3. Default Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
During the quarter ended March 31, 2026, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Item 408 of Regulation S-K.
Item 6. Exhibits
Exhibit No.
Description
31.1
Rule 13a-14(a)/15d-14(a) Certifications*
31.2
32.1
Section 1350 Certifications**
32.2
101.INS
Inline XBRL Instance Document***
101.SCH
Inline XBRL Taxonomy Extension Schema Document*
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document*
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document*
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*
*
Filed herewith.
**
Furnished herewith.
***
The Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
(Registrant)
May 6, 2026
/S/ DAMIAN KOZLOWSKI
Date
Damian Kozlowski
Chief Executive Officer
(principal executive officer)
/S/ DOMINIC C. CANUSO
Dominic C. Canuso
Chief Financial Officer
(principal financial and accounting officer)