The Bancorp(US:TBBK)2025-11-10 21:30Financial Performance - Net income for Q3 2025 increased to $54.9 million, up from $51.5 million in Q3 2024, representing a growth of 6.6%[165] - Net income for Q3 2025 was $54.9 million, or $1.18 per diluted share, compared to $51.5 million, or $1.04 per diluted share, in Q3 2024, representing a 6.6% increase in net income[173] - Net income for the first nine months of 2025 was $171.9 million, or $3.64 per diluted share, up from $161.6 million, or $3.15 per diluted share, in the same period of 2024[188] - Net interest income for Q3 2025 increased by $465,000, or 0.5%, to $94.2 million from $93.7 million in Q3 2024[174] - Net interest income for the first nine months of 2025 increased by $1.5 million, or 0.5%, to $283.4 million from $281.9 million in the first nine months of 2024[189] - Non-interest income surged to $80.4 million in Q3 2025, a 150.5% increase from $32.1 million in Q3 2024, driven by $39.8 million of consumer fintech loan credit enhancement income[184] - Non-interest income from fintech fees rose to $35.1 million in Q3 2025, a 19.3% increase compared to $29.4 million in Q3 2024[170] - Non-interest income surged to $247.8 million in the first nine months of 2025, a significant increase of $155.6 million, or 168.7%, from $92.2 million in the same period of 2024[199] Loan and Asset Growth - Consumer fintech loans reached $785.0 million as of September 30, 2025, a 15% increase from $680.5 million at June 30, 2025, and a 180% increase from $280.1 million a year earlier[164] - Average loans and leases rose to $6.69 billion in Q3 2025, an increase of $666.2 million, or 11.1%, from $6.02 billion in Q3 2024[174] - Total loan portfolio increased to $6.82 billion as of September 30, 2025, up from $6.34 billion at December 31, 2024, representing a growth of 7.6%[237] - Outstanding loans amounted to $6.67 billion as of September 30, 2025, an increase of $559.0 million from the prior year end[207] - Average interest-earning assets increased to $8.47 billion, a rise of $622.3 million, or 7.9%, from $7.85 billion in Q3 2024[180] - Average total deposits increased by $618.2 million, or 8.8%, to $7.63 billion for the third quarter of 2025 compared to the same quarter in 2024[206] Credit Losses and Non-Performing Loans - The provision for credit losses was $45.1 million in Q3 2025, a significant increase of $41.5 million compared to $3.6 million in Q3 2024, primarily due to consumer fintech loans[181] - The ratio of Allowance for Credit Losses (ACL) to total loans rose to 0.96% as of September 30, 2025, up from 0.52% a year earlier[267] - Non-performing loans to total loans increased to 1.35% as of September 30, 2025, compared to 0.52% at the same time last year[269] - The total non-performing assets reached $151.9 million as of September 30, 2025, compared to $99.3 million at the end of 2024[260] - The company reported net charge-offs to average loans at 1.85% for the nine months ended September 30, 2025, a sharp increase from 0.07% for the same period in 2024[269] - Non-accrual loans increased by $41.5 million, primarily due to a $26.9 million REBL loan and $42.4 million of other additions[260] Share Repurchase and Capital Management - The company repurchased 2,034,053 shares at an average cost of $73.74 per share during Q3 2025, reducing outstanding shares by 6% from 47.3 million at December 31, 2024 to 44.5 million[163] - The Company approved a common stock repurchase program for the 2025 fiscal year, authorizing repurchases of $37.5 million per fiscal quarter, totaling a maximum of $150.0 million[319] - The Company has a cumulative share repurchase capacity of up to $500.0 million through year-end 2026, following an increase in the existing repurchase program[319] Interest Rate and Funding - The net interest margin decreased to 4.45% in Q3 2025 from 4.78% in Q3 2024, reflecting the impact of Federal Reserve rate decreases[169] - The cost of funds decreased to 2.15% in Q3 2025 from 2.54% in Q3 2024, reflecting improved funding conditions[165] - The average yield on loans decreased to 6.87% in Q3 2025 from 7.73% in Q3 2024, a decline of 86 basis points[176] - The company has implemented guidelines to manage interest rate risk, limiting exposure to higher interest rates[325] Restructuring and Future Outlook - The company plans to restructure its institutional banking business, expecting a $1.3 million restructuring charge in Q4 2025 and $8.0 million in run-rate expense reductions in 2026[164] - The company anticipates that the demand for multifamily housing will remain strong due to rising home purchase costs and a housing shortage, which may positively influence the real estate bridge loan portfolio[292]