Bancorp, Inc.: Q4 FY2025 earnings call

What management said about Q4 FY2025, from the documents filed with the SEC on 29 January 2026: press release. Guidance figures: 3 new, 1 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Fourth-quarter EPS rose 11%: Net income was $56.3 million, or $1.28 per diluted share, against $1.15 a year earlier. Net income was $55.9 million in 4Q 2024. Return on equity was 30.4%, against 27.7%. Source
• Net interest margin fell to 4.30%: Net interest margin was 4.30%, against 4.45% in 3Q 2025 and 4.55% a year earlier. Net interest income was $92.1 million, down from $94.2 million in 3Q 2025. Source
• Loans up 16% from a year ago: Loans, net of deferred fees and costs, reached $7.12 billion, up 7% from $6.67 billion at 3Q 2025 and 16% from $6.11 billion a year earlier. Source
• Consumer fintech loans reached $1.10 billion: Consumer fintech loans were $1.10 billion, or 15.1% of total loans, up 142% from a year earlier and 40% from 3Q 2025. Source
• Fee share of revenue reached 46.7%: Non-interest income was $80.5 million, or 46.7% of total revenue. Excluding $40.4 million of credit enhancement income, it was $40.1 million, or 30.4% of revenue, against 26.9% a year earlier. Source
• Total provision was $41.4 million: Total provision for credit losses was $41.4 million, against $45.1 million in 3Q 2025 and $31.4 million in 4Q 2024. Consumer fintech provisions are matched by credit enhancement income. Source
• Net charge-offs eased to $39.2 million: Total net charge-offs were $39.2 million, or 2.29% of average loans, against $40.8 million in 3Q 2025. Fintech charge-offs were $38.6 million; non-fintech charge-offs were $0.6 million. Source

“While we ended the year with record fourth quarter EPS and ROE, we did fall short of our expectations and guidance due to a culmination of factors”

Damian Kozlowski, CEO and President of The Bancorp

Guidance

What changed from last quarter

• New guidance: 2026 diluted EPS guidance was initiated at $5.90. The prior release said it was not giving specific 2026 guidance, only a Q4 2026 run-rate target.
• New guidance: 2026 share repurchases were set at $200 million, or $50 million per quarter, under the existing program. Source
• Guidance kept: The preliminary 2027 EPS figure was maintained at $8.25. Source
• New: Management forecasts returning near 100% of 2027 earnings through share repurchases. The prior release described a continued high level of capital return. Source
• Ended: Credit sponsorship expansion and embedded finance are no longer named among the three major Fintech initiatives driving EPS accretion.

Results and earnings drivers

• Fourth-quarter EPS rose 11%: Net income was $56.3 million, or $1.28 per diluted share, against $1.15 a year earlier. Net income was $55.9 million in 4Q 2024. Return on equity was 30.4%, against 27.7%. Source
• Full-year EPS below expectations: Full-year 2025 diluted EPS was $4.92, against $4.29 in 2024. Management said results fell short of its expectations and guidance, citing several factors. Source
• Return on assets slightly lower: Return on assets was 2.53%, against 2.60% a year earlier and 2.50% in 3Q 2025. Net income rose slightly on a year-over-year basis. Source

Net interest income and margin

• Net interest margin fell to 4.30%: Net interest margin was 4.30%, against 4.45% in 3Q 2025 and 4.55% a year earlier. Net interest income was $92.1 million, down from $94.2 million in 3Q 2025. Source
• Debt cost and fee-led mix weighed: Management attributed the slight decline to a full quarter of higher debt cost from the 3Q 2025 senior debt issuance, and to more fintech loans that earn fees but carry zero margin. Source
• Deposit rate fell year over year: The average deposit rate was 1.77%, against 2.25% in 4Q 2024, a decline of 48 basis points. Source

“We are initiating guidance at $5.90 EPS for 2026 and targeting at least $1.75 a share in the fourth quarter 2026.”

Damian Kozlowski, CEO and President of The Bancorp

Loans, deposits and liquidity

• Loans up 16% from a year ago: Loans, net of deferred fees and costs, reached $7.12 billion, up 7% from $6.67 billion at 3Q 2025 and 16% from $6.11 billion a year earlier. Source
• Consumer fintech loans reached $1.10 billion: Consumer fintech loans were $1.10 billion, or 15.1% of total loans, up 142% from a year earlier and 40% from 3Q 2025. Source
• Secured cards and liquidity products: Consumer fintech loans include $729 million of secured credit card accounts and $369 million of short-term liquidity products. Cardholders post cash collateral for the secured cards. Source
• Partners cover fintech loan losses: Partners provide financial protection against consumer losses on all fintech loans. The company holds cash collateral equal to expected losses on amounts already lent. Source
• Average deposits up 1% year over year: Average deposits were $7.60 billion, down 2% annualized from 3Q 2025 and up 1% from a year earlier. About 95% of total deposits came through fintech partnerships. Source
• Borrowing capacity remains available: Short-term borrowings were $199.0 million under Federal Reserve and FHLB lines at year-end, with $3.19 billion of additional capacity available. Source

Fee income and payments volume

• Fee share of revenue reached 46.7%: Non-interest income was $80.5 million, or 46.7% of total revenue. Excluding $40.4 million of credit enhancement income, it was $40.1 million, or 30.4% of revenue, against 26.9% a year earlier. Source
• Fintech fees up $3.7 million: Total fintech fees were $36.0 million, up from $32.3 million a year earlier. Fintech fees were 27% of revenue excluding credit enhancement income. Source
• Consumer fintech loan fees up 48%: Fees on consumer fintech loans rose 48% to $4.5 million, from $3.0 million a year earlier, and matched the $4.5 million of 3Q 2025. Source
• Card volume grew 16%: Gross dollar volume on prepaid, debit and credit cards grew 16% to $45.87 billion, an addition of $6.22 billion versus 4Q 2024. Source
• Payment fees up 8%: Total prepaid, debit card, ACH and other payment fees were $31.5 million, against $29.2 million in 4Q 2024. Source

“We are pleased with the significant progress made this year in strengthening our platform and deepening and expanding new and existing relationships.”

Damian Kozlowski, CEO and President of The Bancorp

Credit quality and provisions

• Total provision was $41.4 million: Total provision for credit losses was $41.4 million, against $45.1 million in 3Q 2025 and $31.4 million in 4Q 2024. Consumer fintech provisions are matched by credit enhancement income. Source
• Net charge-offs eased to $39.2 million: Total net charge-offs were $39.2 million, or 2.29% of average loans, against $40.8 million in 3Q 2025. Fintech charge-offs were $38.6 million; non-fintech charge-offs were $0.6 million. Source
• Non-fintech provision fell to $0.9 million: Provision for non-consumer fintech loans was $0.9 million, down from $5.7 million in 3Q 2025, when truck lease losses were realized. Non-fintech charge-offs were 0.04% of average loans. Source
• Criticized assets fell to $194.5 million: Total criticized assets were $194.5 million, against $268.7 million at 3Q 2025. Real estate bridge criticized assets fell $101.8 million, while SBL criticized assets rose $26.1 million. Source
• Nonperforming assets at 1.44% of assets: Nonperforming loans were 1.04% of total loans and nonperforming assets were 1.44% of total assets, against 1.35% and 1.77% at 3Q 2025. Source
• Allowance split between segments: The allowance was $66.2 million: $31.1 million against consumer fintech loans and $35.1 million against non-fintech loans, with coverage of 2.84% and 0.58%. Source

Non-interest expense, tax and efficiency

• Expenses rose 8% on legal settlement: Non-interest expense was $56.2 million, up 8% from 4Q 2024 and consistent with 3Q 2025. The increase includes $2.0 million of legal costs from a settlement. Source
• Settlement recorded at gross expense: The legal settlement is recorded at gross expense. Any future insurance recovery related to it is excluded from the amount recognized. Source
• Incentive accruals lowered salaries: Compared with 3Q 2025, $2.9 million lower salary and benefits from incentive accrual adjustments offset the $2.0 million settlement cost. Source
• Efficiency ratio rose to 42.5%: Efficiency ratio was 42.5%, against 41.8% in 3Q 2025 and 40.2% a year earlier. Source
• Effective tax rate held at 24.9%: Income tax expense was $18.7 million, with a 24.9% effective rate, against 26.8% a year earlier. Source

Capital and share repurchases

• Repurchased $150 million of stock in 4Q: The company repurchased 2,173,518 shares, 5% of issued and outstanding shares, for $150.0 million in the quarter. Source
• Full-year 2025 return reached $375 million: Year-to-date 2025 repurchases totaled 5,645,914 shares, or 12%, at an average $66.42, bringing the full-year capital return to $375.0 million. Source
• Bank capital above well-capitalized levels: The Bank's ratios exceeded its well-capitalized benchmarks. Company CET1 was 11.08% and Bank CET1 was 14.03%, against a 6.50% well-capitalized benchmark. Source
• Equity fell $88.4 million: Equity fell mainly from $150.0 million of repurchases, partly offset by $56.3 million of net income. Book value was $16.29, against $17.48 at 3Q 2025. Source

Fintech initiatives and timing

• Three Fintech initiatives named as drivers: Management named platform efficiency, productivity from restructuring and AI tools, and capital return as the drivers of continued EPS accretion. Source
• Sponsored credit ramp came later: Management said the sponsored credit ramp materialized later than expected, one of several factors cited against 2025 expectations. Source
• Fintech timelines affect EPS gains: Management said EPS gains depend on Fintech development and implementation timelines, and on the company's stock price for buybacks. Source

Figures management reported

Risks management discussed

• External: Management cited the prolonged government shutdown's effect on transaction volume and deposit flows during the quarter. Source
• Financial: Management cited unanticipated net interest margin compression among the factors behind results falling short of expectations. Source
• Regulatory: The settlement is recorded at gross expense, and any future insurance recovery related to it is excluded from the amount recognized. Source
• Operational: Management said EPS gains depend on Fintech development and implementation timelines, and on the company's stock price for buybacks. Source

Earlier plans management reported on

• Missed: Management said 2025 fell short of its expectations and guidance, citing a culmination of factors. Source
• Delayed: Management said the sponsored credit ramp came later than it had expected. Source
• Not stated: Management kept the preliminary 2027 EPS figure from the prior release at $8.25. Source

Other quarters

• Q2 FY2026 earnings call
• Q1 FY2026 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.