The Bancorp(TBBK) - 2025 Q3 - Quarterly Results

Financial Performance - The Bancorp reported net income of $54.9 million, or $1.18 per diluted share, for Q3 2025, a 7% increase in net income and a 13% increase in EPS compared to Q3 2024[3] - Return on assets and return on equity for Q3 2025 were 2.5% and 27%, respectively, compared to 2.5% and 26% for Q3 2024[3] - Net interest income increased to $94.2 million for Q3 2025, up from $93.7 million in Q3 2024[3] - The company lowered its 2025 EPS guidance from $5.25 to $5.10, citing lower projected balances for traditional lending and increased credit provisions[4] - The Bancorp is targeting a minimum $7 EPS run-rate by Q4 2026 and has initiated preliminary guidance for 2027 of $8.25 EPS[4] Loan and Deposit Growth - Loans, net of deferred fees and costs, were $6.67 billion at September 30, 2025, reflecting a 13% year-over-year increase[3] - Consumer fintech loans increased to $785.0 million at September 30, 2025, a 180% increase compared to $280.1 million at September 30, 2024[3] - Total deposits decreased to $7,330,797 thousand as of September 30, 2025, down 5.61% from $7,765,935 thousand on June 30, 2025[12] - Total deposits rose to $7,995,284,000 in 2025, compared to $6,743,448,000 in 2024, marking an increase of about 18.6%[16] - The total loan portfolio reached $6,672,637,000 as of September 30, 2025, up from $5,906,616,000 in the same period of 2024, representing a growth of approximately 12.9%[30] Capital and Asset Management - The company's Tier 1 capital ratios indicate strong capitalization, with Tier 1 capital to average assets at 8.74% and Tier 1 capital to risk-weighted assets at 12.99%[3] - Total assets as of September 30, 2025, were $8,599,424 thousand, a decrease of 2.71% from $8,839,231 thousand on June 30, 2025[12] - Shareholders' equity decreased to $778,162 thousand as of September 30, 2025, down from $860,266 thousand on June 30, 2025, a decline of 9.53%[12] - The average balance of interest-earning assets for the three months ended September 30, 2025, was $8,470,730 thousand, compared to $7,848,424 thousand for the same period in 2024, an increase of 7.91%[13] Credit Quality and Risk Management - The allowance for credit losses was $64,152 thousand as of September 30, 2025, compared to $59,393 thousand on June 30, 2025, indicating an increase of 12.83%[12] - Nonperforming loans to total loans ratio rose to 1.35% as of September 30, 2025, compared to 0.52% a year earlier[60] - Net charge-offs for the nine months ended September 30, 2025, were $117,715 thousand, significantly higher than $3,690 thousand for the same period in 2024[56] Shareholder Actions - The Bancorp repurchased 2,034,053 shares at an average cost of $73.74 per share during Q3 2025, reducing outstanding shares by 8% year-over-year[3] - The total number of shares outstanding as of September 30, 2025, was 44,528,879, a decrease from 46,262,932 shares on June 30, 2025[12] Interest Margin and Income - The net interest margin for the three months ended September 30, 2025, was 4.45%, down from 4.78% in the same period of 2024[13] - For the nine months ended September 30, 2025, net interest income was $283,432,000, an increase from $281,945,000 in the same period of 2024[16] - The net interest margin decreased to 4.32% in 2025 from 4.96% in 2024[20] Portfolio Composition - The Bancorp Bank, N.A. reported a $2.13 billion REBL portfolio with a weighted average origination date "as is" loan-to-value (LTV) ratio of 70%[34] - The total small business loans (SBL) principal amounted to $1.059 billion, with $648 million in SBL loans excluding the guaranteed portion and other loans[39] - The weighted average interest rate for commercial real estate bridge loans was 8.42%, with a total balance of $2.203 billion and a weighted average origination date LTV of 70%[49] - The REBL portfolio primarily consists of workforce housing, which is expected to have more stable collateral values compared to higher rent properties[34] Efficiency and Operational Metrics - The efficiency ratio for the three months ended September 30, 2025, was 42%, consistent with the previous quarter[62] - Total realized net gains from other real estate owned were $594 thousand for the nine months ended September 30, 2025[58]