Core Viewpoint - A federal securities class action lawsuit is advancing against The Bancorp, Inc. due to allegations of misleading statements and inadequate disclosures regarding its commercial real estate bridge lending portfolio, leading to significant investor losses [1][2][3]. Group 1: Lawsuit Details - The lawsuit, titled Linden v. The Bancorp, Inc., accuses the company and its executives of violating the Securities Exchange Act of 1934 during the class period from January 25, 2024, to March 4, 2025 [2][3]. - Investors are urged to submit their claims for losses incurred during this period, as the lead plaintiff deadline is set for May 16, 2025 [3]. Group 2: Allegations Against The Bancorp - Plaintiffs allege that The Bancorp and its executives made false or misleading statements regarding the risks associated with its commercial real estate bridge lending portfolio, which is primarily backed by apartment buildings [3][4]. - The complaint highlights that the company downplayed the likelihood of defaults and losses on these loans, and its methodology for estimating credit losses was deemed inadequate [3]. Group 3: Financial Reporting Issues - The lawsuit claims that The Bancorp's internal controls over financial reporting had material weaknesses, and its financial statements for recent years lacked approval from independent auditors, rendering them unreliable [4][9]. - A report by Culper Research indicated that The Bancorp's loan book was filled with risky borrowers and properties with high vacancy rates, contradicting the company's public assurances of low risk [5]. Group 4: Stock Price Impact - Following the release of the Culper Research report, The Bancorp's stock price fell by more than 10% [5]. - The company reported a third-quarter net income of $51.5 million on October 24, 2024, but acknowledged that a new accounting methodology for credit losses reduced net income by $1.5 million after taxes, leading to a further stock price drop of over 14% [6]. - In March 2025, The Bancorp disclosed that it had "inappropriately filed" its 2024 annual report, causing additional declines in stock price as investors were advised not to rely on financial statements from 2022 to 2024 [7]. Group 5: Amended Financial Statements - An amended annual report filed on April 7, 2025, revealed significant revisions, including an increase in the provision for credit losses for consumer fintech loans from $19.6 million to $30.7 million [8]. - The amended report also stated that internal control over financial reporting was not effective, contradicting earlier claims [9].