The Bancorp (NasdaqGS:TBBK) Q4 2025 Earnings call January 30, 2026 08:00 AM ET Company ParticipantsAndres Viroslav - Director of Investor RelationsDamian Kozlowski - CEODominic Canuso - CFOStephen Farrell - Investment Management AssociateConference Call ParticipantsEmily Lee - Managing Director and Senior Equity Research AnalystJoe Yanchunis - Equity Research AnalystOperatorGood morning, ladies and gentlemen, and welcome to The Bancorp Q4 and fiscal 2025 earnings conference call. At this time, all lines are ...

Financial Data and Key Metrics Changes - The Bancorp reported earnings per share (EPS) of $1.28 for the fourth quarter, reflecting an 11% year-over-year growth [4] - Gross Deposit Value (GDV) increased by 16% for the quarter compared to the prior year [4] - Revenue growth for the quarter was 3% year-over-year, excluding credit enhancement income [4] - Return on Equity (ROE) reached a record 30.4% for the quarter and 28.9% for the full year [8] - Total assets increased to $9.4 billion, up 7% from the prior year [8] Business Line Data and Key Metrics Changes - Credit sponsorship balances ended at $1.1 billion, up 40% from the third quarter and 142% year-over-year [5] - The total loan portfolio increased by $919 million to $7.26 billion, with consumer fintech loans constituting 15% of the portfolio [8] - Non-interest income, excluding credit enhancement, accounted for just over 30% of revenue in the quarter, with approximately 90% of fees coming from the fintech business [9] Market Data and Key Metrics Changes - Average deposits in the quarter were $7.6 billion, with an average cost of 177 basis points [9] - Delinquency rates declined from 2.19% at the end of the third quarter to 1.6% at the end of the fourth quarter [7] Company Strategy and Development Direction - The Bancorp is focused on three main fintech initiatives aimed at creating significant shareholder value [5] - The company is targeting a guidance of $5.90 EPS for 2026 and $8.25 EPS for 2027, which includes stock buybacks [12] - The strategy emphasizes platform efficiency, productivity gains from restructuring, and AI tools [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the EPS guidance for 2026 and highlighted the positive impact of tax season on business [21] - The company anticipates continued growth in credit sponsorship and overall fintech business, with significant improvements in credit metrics [9][10] - Management acknowledged challenges from legal fees and the unexpected duration of the government shutdown affecting GDV [18][19] Other Important Information - The company repurchased $150 million of its stock in the fourth quarter, totaling $375 million for the year [11] - Criticized assets decreased from $268 million to $194 million, a 28% decline quarter-over-quarter [7] Q&A Session Summary Question: Can you provide more building blocks to help bridge the EPS gap? - Management indicated large revenue opportunities and confidence in upcoming initiatives, including credit sponsorship and the embedded finance platform [16] Question: What were the primary drivers affecting fourth-quarter results? - Key drivers included legal fees, the impact of the government shutdown on GDV, and the timing of credit sponsorship growth [18][19] Question: Can you discuss the economics of off-balance sheet deposits? - Management explained that off-balance sheet deposits are used to optimize funding costs and generate revenue as deposit growth exceeds balance sheet capacity [22][41] Question: What is the plan for the Aubrey property? - The company is nearing cash flow break-even and is looking for exit opportunities to maximize value [32][34] Question: How does the company view the threat of fintechs obtaining their own bank charters? - Management believes many partners will not seek licenses and highlighted the scalability and low-cost benefits of their platform [36][39] Question: What is the expectation for net interest margin (NIM)? - Management expects some compression in NIM as the company shifts towards fintech, but anticipates an increase in fee revenue as a portion of total revenue [60][61]

Company Leadership Changes - Solaris has appointed Steffen Jentsch as the new CEO, succeeding Carsten Höltkemeyer, who stepped down at the end of 2025 [2] - Ansgar Finken, the chief risk officer, is also stepping down but will remain in an advisory role, with Matthias Heinrich taking over his position [3] - Jentsch has a strong background in scaling digital financial platforms and expertise in regulatory transformation and digital banking solutions [2][3] Industry Trends in Embedded Finance - The embedded finance sector has matured significantly, transitioning from consumer convenience to a standard business practice in 2025 [5] - Successful implementations of embedded finance are now integrated seamlessly into existing workflows, making them almost invisible to users [5] - The philosophy of "buy, don't build" has emerged, with institutions prioritizing speed and specialization by outsourcing embedded capabilities rather than developing them internally [6] Investment and Market Position - Solaris' leadership change follows SBI's acquisition of a majority stake in the company as part of a €140 million ($164 million) Series G funding round [4] - The company is recognized as a first mover in embedded finance, contributing to the shaping of the market across Europe [4]

Core Points - Inbank has approved its Financial Calendar for the 2026 financial year, detailing key dates for financial disclosures and the Annual General Meeting [1] - The company is a financial technology firm with an EU banking license, facilitating connections among merchants, consumers, and financial institutions through its embedded finance platform [1] - Inbank has established partnerships with over 5,900 merchants and maintains more than 915,000 active contracts, collecting deposits across seven European markets [1] - The company's bonds are listed on the Nasdaq Tallinn Stock Exchange [1] Financial Disclosure Dates - February 26, 2026: Q4 and 2025 Full Year Unaudited Interim Report [1] - March 5, 2026: 2025 Audited Annual Report [1] - March 31, 2026: Annual General Meeting [1] - April 30, 2026: Q1 Interim Report [1] - July 30, 2026: Q2 Interim Report [1] - October 29, 2026: Q3 Interim Report [1]

Core Insights - Inbank's subsidiary AS Inbank Holdings has signed an agreement to acquire an additional 33% stake in Mobire Group OÜ, increasing its ownership to 100% [1] - The acquisition aligns with Inbank's long-term strategy in the profitable and fast-growing full-service car rental segment in the Baltics [2] - Mobire Group operates independently under its existing governance and brand, continuing to be led by CEO Andrus Valma [2][3] Company Overview - Mobire Group is the leading full-service car rental provider in the Baltics, managing a fleet of over 4,800 vehicles and reporting a consolidated turnover of €47.4 million in 2024 [4] - Inbank is a financial technology company with an EU banking license, partnering with over 5,900 merchants and managing 915,000+ active contracts across 7 European markets [5] Transaction Details - The price of the transaction has not been disclosed, and it is subject to approval from competition authorities in Estonia and Lithuania, with completion expected in Q1 2026 [3]

Group 1 - AS Inbank has entered into a notarial merger agreement with its 100% subsidiary Inbank Ventures OÜ, resulting in Inbank Ventures OÜ ceasing to exist without liquidation, with AS Inbank becoming its legal successor [1] - The purpose of the merger is to align the Group's legal structure with its actual business operations and enhance organizational efficiency, while leaving consolidated assets, rights, and obligations unchanged [1] - The merger will take effect after receiving approval from the Financial Supervision and Resolution Authority, with completion expected in the first quarter of 2026 [2] Group 2 - Inbank operates as a financial technology company with an EU banking license, connecting merchants, consumers, and financial institutions on its embedded finance platform [3] - The company partners with over 5,600 merchants and has more than 941,000 active contracts, collecting deposits across 7 markets in Europe [3] - Inbank bonds are listed on the Nasdaq Tallinn Stock Exchange [3]