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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)



x		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
		SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2025



o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
		SECURITIES EXCHANGE ACT OF 1934

For the transition period from: _____ to _____

Commission file number: 000-51018

THE BANCORP, INC.

(Exact name of registrant as specified in its charter)


Delaware		23-3016517
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

409 Silverside Road, Wilmington, DE 19809		(302) 385-5000
(Address of principal executive offices and zip code)		(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



Title of Each Class	Trading Symbol(s)	Name of each Exchange on Which Registered
Common Stock, par value $1.00 per share	TBBK	Nasdaq Global Select

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer x	Accelerated filer o	Non-accelerated filer o
Smaller reporting company o	Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of July 28, 2025, there were 46,065,385 outstanding shares of common stock, $1.00 par value.

THE BANCORP, INC.

Form 10-Q Index



		Page
Part I Financial Information
Item 1.	Financial Statements	3

	Consolidated Balance Sheets – June 30, 2025 (unaudited) and December 31, 2024	3

	Unaudited Consolidated Statements of Operations – Three and six months ended June 30, 2025 and 2024	4

	Unaudited Consolidated Statements of Comprehensive Income – Three and six months ended June 30, 2025 and 2024	5

	Unaudited Consolidated Statements of Changes in Shareholders’ Equity – Three and six months ended June 30, 2025 and 2024	6

	Unaudited Consolidated Statements of Cash Flows – Six months ended June 30, 2025 and 2024	8

	Notes to Unaudited Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	41

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	73

Item 4.	Controls and Procedures	73

Part II Other Information

Item 1.	Legal Proceedings	74
Item 1A.	Risk Factors	74
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	74
Item 5.	Other Information	74
Item 6.	Exhibits	75

Signatures		76

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

THE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


	June 30,		December 31,
	2025		2024
(Dollars in thousands, except share data)		(unaudited)


ASSETS
Cash and cash equivalents
Cash and due from banks	$	11,637	$	6,064
Interest-earning deposits at Federal Reserve Bank		328,628		564,059
Total cash and cash equivalents		340,265		570,123

Investment securities, available-for-sale, at fair value		1,481,500		1,502,860
Commercial loans, at fair value		185,476		223,115
Loans, net of deferred loan fees and costs		6,535,432		6,113,628
Allowance for credit losses		(59,393)		(44,853)
Loans, net		6,476,039		6,068,775
Stock in Federal Reserve, Federal Home Loan and Atlantic Central Bankers Banks		16,250		15,642
Premises and equipment, net		26,495		27,566
Accrued interest receivable		40,607		41,713
Intangible assets, net		1,055		1,254
Other real estate owned		66,054		62,025
Deferred tax asset, net		12,436		18,874
Credit enhancement asset		26,982		12,909
Other assets		166,072		182,687
Total assets	$	8,839,231	$	8,727,543

LIABILITIES
Deposits
Demand and interest checking	$	7,705,813	$	7,434,212
Savings and money market		60,122		311,834
Total deposits		7,765,935		7,746,046

Senior debt		96,391		96,214
Subordinated debentures		13,401		13,401
Other long-term borrowings		13,898		14,081
Other liabilities		89,340		68,018
Total liabilities		7,978,965		7,937,760

SHAREHOLDERS' EQUITY
Common stock - authorized, 75,000,000 shares of $1.00 par value; 48,104,006 and 46,262,932 shares issued and outstanding, respectively, at June 30, 2025 and 47,713,481 and 47,310,750 shares issued and outstanding, respectively, at December 31, 2024		48,104		47,713
Additional paid-in capital		12,608		3,233
Retained earnings		896,149		779,155
Accumulated other comprehensive income		1,609		(17,637)
Treasury stock at cost, 1,841,074 shares at June 30, 2025 and 402,731 shares at December 31, 2024, respectively		(98,204)		(22,681)
Total shareholders' equity		860,266		789,783

Total liabilities and shareholders' equity	$	8,839,231	$	8,727,543

The accompanying notes are an integral part of these consolidated statements.

‎

THE BANCORP, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS


	For the three months ended June 30,				For the six months ended June 30,
	2025		2024		2025		2024
	(Dollars in thousands, except per share data)
Interest income
Loans, including fees	$	112,326	$	115,062	$	221,238	$	229,314
Investment securities:
Taxable interest		22,393		17,520		40,520		27,154
Tax-exempt interest		103		40		186		79
Interest-earning deposits		8,326		4,677		21,006		16,561
		143,148		137,299		282,950		273,108
Interest expense
Deposits		43,963		39,999		90,338		79,160
Short-term borrowings		5		1,295		5		1,314
Long-term borrowings		198		685		393		1,371
Senior debt		1,233		1,234		2,467		2,467
Subordinated debentures		257		291		512		583
		45,656		43,504		93,715		84,895
Net interest income		97,492		93,795		189,235		188,213
Provision for credit losses on non-consumer fintech loans		1,494		1,477		2,368		3,840
Provision for credit losses on consumer fintech loans		43,233		—		89,101		—
Provision (reversal) for unfunded commitments		(364)		(225)		(253)		(419)
Net interest income after provision (reversal) for credit losses		53,129		92,543		98,019		184,792

Non-interest income
Fintech fees
ACH, card and other payment processing fees		5,562		3,000		10,694		5,964
Prepaid, debit card and related fees		26,113		24,755		51,827		49,041
Consumer credit fintech fees		3,970		140		7,570		140
Total fintech fees		35,645		27,895		70,091		55,145
Net realized and unrealized gains
on commercial loans, at fair value		344		503		705		1,599
Leasing related income		2,131		1,429		4,103		1,817
Consumer fintech loan credit enhancement		43,233		—		89,101		—
Other		2,390		895		3,385		1,543
Total non-interest income		83,743		30,722		167,385		60,104

Non-interest expense
Salaries and employee benefits		37,134		33,863		70,803		64,143
Depreciation		1,125		1,027		2,229		1,976
Rent and related occupancy cost		1,717		1,686		3,285		3,326
Data processing expense		1,227		1,423		2,432		2,844
Audit expense		545		319		1,199		678
Legal expense		1,863		633		3,820		1,454
FDIC insurance		1,202		869		2,255		1,714
Software		5,144		4,637		10,157		9,126
Insurance		1,145		1,282		2,402		2,620
Telecom and IT network communications		308		354		641		625
Consulting		436		562		892		1,140
Other		5,377		4,791		10,402		8,512
Total non-interest expense		57,223		51,446		110,517		98,158
Income before income taxes		79,649		71,819		154,887		146,738
Income tax expense		19,828		18,133		37,893		36,623
Net income	$	59,821	$	53,686	$	116,994	$	110,115

Net income per share - basic	$	1.28	$	1.05	$	2.49	$	2.12

Net income per share - diluted	$	1.27	$	1.05	$	2.46	$	2.10
Weighted average shares - basic		46,598,535		50,937,055		46,904,592		51,842,097
Weighted average shares - diluted		47,182,770		51,337,491		47,565,580		52,327,122

The accompanying notes are an integral part of these consolidated statements.

‎

THE BANCORP, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	For the three months ended June 30,				For the six months ended June 30,
	2025		2024		2025		2024
	(Dollars in thousands)

Net income	$	59,821	$	53,686	$	116,994	$	110,115
Other comprehensive income, net of reclassifications into net income:

Other comprehensive income
Securities available-for-sale:
Change in net unrealized gains		4,598		4,898		25,660		5,024
Reclassification adjustments for losses included in income		—		—		—		2
Other comprehensive income		4,598		4,898		25,660		5,026

Income tax expense related to items of other comprehensive income
Securities available-for-sale:
Change in net unrealized gains		1,149		1,209		6,414		1,236
Income tax expense related to items of other comprehensive income		1,149		1,209		6,414		1,236

Other comprehensive income, net of tax and reclassifications into net income		3,449		3,689		19,246		3,790
Comprehensive income	$	63,270	$	57,375	$	136,240	$	113,905

The accompanying notes are an integral part of these consolidated statements.

THE BANCORP, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY


For the three and six months ended June 30, 2025
(Dollars in thousands, except share data)

									Accumulated
	Common				Additional				other
	stock		Common		paid-in		Retained		comprehensive		Treasury
	shares issued		stock		capital		earnings		(loss) income		stock		Total

Balance at January 1, 2025		47,713,481	$	47,713	$	3,233	$	779,155	$	(17,637)	$	(22,681)	$	789,783
Net income		—		—		—		57,173		—		—		57,173
Common stock issued from restricted units,
net of tax benefits		353,697		354		(354)		—		—		—		—
Stock-based compensation		—		—		4,591		—		—		—		4,591
Other comprehensive income net of
reclassification adjustments and tax		—		—		—		—		15,797		—		15,797
Common stock repurchases and excise tax		—		—		—		—		—		(37,657)		(37,657)
Balance at March 31, 2025		48,067,178	$	48,067	$	7,470	$	836,328	$	(1,840)	$	(60,338)	$	829,687

Net income		—	$	—	$	—	$	59,821	$	—		—	$	59,821
Common stock issued from restricted units,
net of tax benefits		36,828		37		(37)		—		—		—		—
Stock-based compensation		—		—		5,175		—		—		—		5,175
Other comprehensive income net of
reclassification adjustments and tax		—		—		—		—		3,449		—		3,449
Common stock repurchases and excise tax		—		—		—		—		—		(37,866)		(37,866)
Balance at June 30, 2025		48,104,006	$	48,104	$	12,608	$	896,149	$	1,609	$	(98,204)	$	860,266

The accompanying notes are an integral part of these consolidated statements.

‎

THE BANCORP, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY


For the three and six months ended June 30, 2024
(Dollars in thousands, except share data)
									Accumulated
	Common				Additional				other
	stock		Common		paid-in		Retained		comprehensive		Treasury
	shares issued		stock		capital		earnings		loss		stock		Total

Balance at January 1, 2024		53,202,630	$	53,203	$	212,431	$	561,615	$	(19,968)	$	—	$	807,281
Net income		—		—		—		56,429		—		—		56,429
Common stock issued from restricted units,
net of tax benefits		312,619		312		(312)		—		—		—		—
Stock-based compensation		—		—		3,317		—		—		—		3,317
Other comprehensive income net of
reclassification adjustments and tax		—		—		—		—		101		—		101
Common stock repurchases and excise tax		(1,262,212)		(1,262)		(49,101)		—		—		—		(50,363)
Balance at March 31, 2024		52,253,037	$	52,253	$	166,335	$	618,044	$	(19,867)	$	—	$	816,765

Net income		—	$	—	$	—	$	53,686	$	—		—	$	53,686
Common stock issued from restricted units,
net of tax benefits		32,771		33		(33)		—		—		—		—
Stock-based compensation		—		—		3,841		—		—		—		3,841
Other comprehensive income net of
reclassification adjustments and tax		—		—		—		—		3,689		—		3,689
Common stock repurchases and excise tax		(3,018,405)		(3,018)		(97,972)		—		—		—		(100,990)
Balance at June 30, 2024		49,267,403	$	49,268	$	72,171	$	671,730	$	(16,178)	$	—	$	776,991

The accompanying notes are an integral part of these consolidated statements.

‎

THE BANCORP, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS



	For the six months
	ended June 30,
	2025		2024
		(Dollars in thousands)
Operating activities
Net income	$	116,994	$	110,115
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		2,229		1,976
Provision for credit losses on non-consumer fintech loans		2,368		3,840
Provision for credit losses on consumer fintech loans		89,101		—
Provision reversal for unfunded commitments		(253)		(419)
Net accretion of investment securities discounts/premiums		(2,812)		(458)
Stock-based compensation expense		9,766		7,158
Realized gains on commercial loans, at fair value		(705)		(1,883)
Gain on sale of fixed assets		(7)		(14)
Change in fair value of derivatives		—		284
Loss on sales/calls of investment securities		—		2
Decrease (increase) in accrued interest receivable		1,106		(7,355)
Decrease (increase) in other assets		19,127		(15,907)
Increase in consumer fintech loan credit enhancement receivables		(14,073)		—
Decrease in other liabilities		(4,425)		(4,794)
Net cash provided by operating activities		218,416		92,545

Investing activities
Purchase of investment securities available-for-sale		(53,071)		(913,050)
Proceeds from redemptions and prepayments of securities available-for-sale		125,978		85,238
Capitalized investment in other real estate owned		(1,756)		—
Sale of repossessed assets		2,600		7,030
Net increase in loans		(503,461)		(292,929)
Proceeds from sale of fixed assets		121		70
Commercial loans, at fair value drawn during the period		(2,953)		—
Payments on commercial loans, at fair value		41,174		68,460
Purchases of premises and equipment		(1,272)		(3,243)
Net cash used in investing activities		(392,640)		(1,048,424)

Financing activities
Net increase in deposits		19,889		474,778
Net decrease in securities sold under agreements to repurchase		—		(42)
Repurchases of common stock and excise tax		(75,523)		(151,353)
Net cash (used in) provided by financing activities		(55,634)		323,383

Net decrease in cash and cash equivalents		(229,858)		(632,496)

Cash and cash equivalents, beginning of period		570,123		1,038,090

Cash and cash equivalents, end of period	$	340,265	$	405,594

Supplemental disclosure:
Interest paid	$	95,231	$	84,880
Taxes paid	$	33,904	$	51,428
Transfers to other real estate owned from commercial loans, at fair value, and loans, net	$	2,273	$	40,912
Leased vehicles transferred to repossessed assets	$	2,395	$	6,151

The accompanying notes are an integral part of these consolidated statements.

‎

THE BANCORP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Nature of Operations

The Bancorp, Inc. (the “Company”) is a Delaware corporation and a registered financial holding company. Its primary, wholly owned subsidiary is The Bancorp Bank, National Association (the “Bank”). The Bank is a nationally chartered commercial bank located in Sioux Falls, South Dakota and is a Federal Deposit Insurance Corporation (“FDIC”) insured institution. As a nationally chartered bank, its primary regulator is the Office of the Comptroller of the Currency (“OCC”). The Bank has two primary lines of business consisting of its national specialty finance segment and its fintech segment.

In the national specialty finance segment, the Bank makes the following types of loans: securities-backed lines of credit (“SBLOCs”), cash value of insurance-backed lines of credit (“IBLOCs”) and investment advisor financing; leases (direct lease financing); small business loans (“SBLs”), consisting primarily of Small Business Administration (“SBA”) loans; and non-SBA commercial real estate bridge loans (“REBLs”). Consumer fintech lending is reflected in the fintech segment.

While the national specialty finance segment generates the majority of the Company’s revenues, the fintech segment also contributes significant revenues. In its fintech segment, the Company provides payment and deposit services nationally, which include prepaid and debit card accounts, affinity group banking, deposit accounts to investment advisors’ customers, card payments and other payment processing services. Fintech segment deposits fund the majority of the Company’s loans and securities and may produce lower costs than other funding sources. Most of the fintech segment’s revenues and deposits, and SBLOC and IBLOC loans, result from relationships with third parties which market such products. Concentrations of loans and deposits are based upon the cumulative account balances generated by those third parties. Similar concentrations result in revenues in prepaid, debit card and related fees. These concentrations may also be reflected in a lower cost of funds compared to other funding sources. The Company sweeps certain deposits off its balance sheet to other institutions through intermediaries. Such sweeps are utilized to optimize diversity within its funding structure by managing the percentage of individual client deposits to total deposits. The Company offers loans through credit sponsorship with third parties, in its fintech segment.

Certain reclassifications and updates have been made to the prior periods’ financial statements and notes to conform to the current period’s presentation.

The Company and the Bank are subject to regulation by certain state and federal agencies and, accordingly, they are examined periodically by those regulatory authorities. As a consequence of the extensive regulation of commercial banking activities, the Company’s and the Bank’s businesses are affected by state and federal legislation and regulations.

Note 2. Significant Accounting Policies

Basis of Presentation

The financial statements of the Company, as of June 30, 2025 and for the three- and six-month periods ended June 30, 2025 and 2024, are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted in this Quarterly Report on Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). However, in the opinion of management, these interim financial statements include all necessary adjustments to fairly present the results of the interim periods presented. The unaudited interim consolidated financial statements should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K, as amended, for the year ended December 31, 2024 (the “2024 Form 10-K, as amended”). The results of operations for the six-month period ended June 30, 2025 may not necessarily be indicative of the results of operations anticipated for the full year ending December 31, 2025.

There have been no significant changes as of June 30, 2025 from the Company’s significant accounting policies as described in the 2024 Form 10-K, as amended.

Note 3. Stock-based Compensation

The Company recognizes compensation expense for stock options and restricted stock units (“RSUs”) in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 718 Stock Compensation (“ASC 718”). The fair value of the option or RSU is generally measured at fair value at the grant date with compensation expense recognized over the service period, which is typically the stated vesting period. For option grants subject to a service condition, the Company utilizes the Black-Scholes option-pricing model to estimate the fair value of such options on the date of grant. The Black-Scholes model takes into consideration the exercise price and expected life of the options, the current price of the underlying stock and its expected volatility, the expected dividends on the stock and the current risk-free interest rate for the expected life of the option. The Company’s estimate of the fair value

of a stock option is based on expectations derived from historical experience and may not necessarily equate to its market value when fully vested. In accordance with ASC 718, the Company estimates the number of options for which the requisite service is expected to be rendered. At June 30, 2025, the Company had three active stock-based compensation plans.

During the six months ended June 30, 2025, the Company granted 32,624 stock options with a vesting period of four years and a weighted average grant-date fair value of $30.65. During the six months ended June 30, 2024, the Company granted 45,616 stock options with a vesting period of four years and a weighted average grant-date fair value of $21.92. There were no common stock options exercised in the six-month periods ended June 30, 2025 and June 30, 2024.

A summary of the Company’s stock options is presented below.



				Weighted average
				remaining
		Weighted average		contractual	Aggregate
	Options	exercise price		term (years)	intrinsic value
Outstanding at January 1, 2025	668,293	$	17.30	6.12	$	23,613,391
Granted	32,624		60.25	9.62		—
Exercised	—		—	—		—
Expired	—		—	—		—
Forfeited	—		—	—		—
Outstanding at June 30, 2025	700,917	$	19.30	5.81	$	26,513,782
Exercisable at June 30, 2025	580,294	$	14.28	5.30	$	24,772,483

The Company granted 358,348 RSUs in the first six months of 2025, of which 330,839 have a vesting period of three years and 27,509 have a vesting period of one year. At issuance, the 358,348 RSUs granted in the first six months of 2025 had a weighted average fair value of $59.60 per unit. The Company granted 390,305 RSUs in the first six months of 2024, of which 355,965 have a vesting period of three years and 34,340 have a vesting period of one year. At issuance, the 390,305 RSUs granted in the first six months of 2024 had a weighted average fair value of $42.87 per unit.

A summary of the Company’s RSUs is presented below.



		Weighted average		Average remaining
		grant date		contractual
	RSUs	fair value		term (years)
Outstanding at January 1, 2025	794,386	$	38.29	1.44
Granted	358,348		59.60	2.49
Vested	(390,525)		36.25	—
Forfeited	(16,834)		50.97	—
Outstanding at June 30, 2025	745,375	$	49.31	1.73

As of June 30, 2025, there was a total of $30.9 million of unrecognized compensation cost related to unvested awards under stock-based compensation plans. This cost is expected to be recognized over a weighted average period of approximately 1.5 years. Related compensation expense for the three months ended June 30, 2025 and 2024 was $5.2 million and $3.8 million, respectively. Related compensation expense for the six months ended June 30, 2025 and 2024 was $9.8 million and $7.1 million, respectively. The total issuance date fair value of RSUs vested and options exercised during the six months ended June 30, 2025 and 2024, was $14.4 million and $10.3 million, respectively. The total intrinsic value of the options exercised and RSUs vested in those respective periods was $23.7 million and $14.6 million, respectively.

For the six-month periods ended June 30, 2025 and 2024, the Company estimated the fair value of each stock option grant on the date of grant using the Black-Scholes options pricing model with the following weighted average assumptions:



	June 30,
	2025	2024
Risk-free interest rate	4.51%	4.17%
Expected dividend yield	—	—
Expected volatility	45.21%	44.76%
Expected lives (years)	6.3	6.3

Expected volatility is based on the historical volatility of the Company’s stock and peer group comparisons over the expected life of the option. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury Separate Trading of Registered Interest and Principal of Securities (“STRIPS”) rate in effect at the time of the grant. The life of the option is based on historical factors which include the contractual term, vesting period, exercise behavior and employee terminations. In accordance with ASC 718, stock- based compensation expense for the period ended June 30, 2025 is based on awards that are ultimately expected to vest. As only one individual has outstanding options, the Company estimates outstanding lives utilizing acceptable expedients in lieu of forfeiture history.

Note 4. Earnings Per Share

The Company calculates earnings per share in accordance with ASC 260, Earnings Per Share. Basic earnings per share excludes dilution and is computed by dividing income available to common shareholders by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities, including stock options and RSUs or other contracts to issue common stock were exercised and converted into common stock. Stock options are dilutive if their exercise prices are less than the current stock price. RSUs are dilutive because they represent grants over vesting periods which do not require employees to pay exercise prices. The dilution shown in the tables below includes the potential dilution from both stock options and RSUs.

The following tables show the Company’s earnings per share for the periods presented:



	For the three months ended
	June 30, 2025
	Income		Shares		Per share
	(numerator)		(denominator)		amount
		(Dollars in thousands except share and per share data)
Basic earnings per share
Net earnings available to common shareholders	$	59,821		46,598,535	$	1.28
Effect of dilutive securities
Common stock options and RSUs		—		584,235		(0.01)
Diluted earnings per share
Net earnings available to common shareholders	$	59,821		47,182,770	$	1.27

Stock options for 622,677 shares, exercisable at prices between $6.87 and $35.17 per share, were outstanding at June 30, 2025, and included in the diluted earnings per share computation because their exercise price per share was less than the average market price for the three-month period ended June 30, 2025. Stock options for 78,240 shares were anti-dilutive and not included in the earnings per share calculation.



	For the six months ended
	June 30, 2025
	Income		Shares		Per share
	(numerator)		(denominator)		amount
		(Dollars in thousands except share and per share data)
Basic earnings per share
Net earnings available to common shareholders	$	116,994		46,904,592	$	2.49
Effect of dilutive securities
Common stock options and RSUs		—		660,988		(0.03)
Diluted earnings per share
Net earnings available to common shareholders	$	116,994		47,565,580	$	2.46

Stock options for 622,677 shares, exercisable at prices between $6.87 and $35.17 per share, were outstanding at June 30, 2025, and included in the diluted earnings per share computation because their exercise price per share was less than the average market price for the six-month period ended June 30, 2025. Stock options for 78,240 shares were anti-dilutive and not included in the earnings per share calculation.



	For the three months ended
	June 30, 2024
	Income		Shares		Per share
	(numerator)		(denominator)		amount
		(Dollars in thousands except share and per share data)
Basic earnings per share
Net earnings available to common shareholders	$	53,686		50,937,055	$	1.05
Effect of dilutive securities
Common stock options and RSUs		—		400,436		—
Diluted earnings per share
Net earnings available to common shareholders	$	53,686		51,337,491	$	1.05

Stock options for 465,104 shares, exercisable at prices between $6.87 and $18.81 per share, were outstanding at June 30, 2024, and included in the diluted earnings per share computation because their exercise price per share was less than the average market price for the three-month period ended June 30, 2024. Stock options for 203,189 shares were anti-dilutive and not included in the earnings per share calculation.



	For the six months ended
	June 30, 2024
	Income		Shares		Per share
	(numerator)		(denominator)		amount
		(Dollars in thousands except share and per share data)
Basic earnings per share
Net earnings available to common shareholders	$	110,115		51,842,097	$	2.12
Effect of dilutive securities
Common stock options and RSUs		—		485,025		(0.02)
Diluted earnings per share
Net earnings available to common shareholders	$	110,115		52,327,122	$	2.10

Stock options for 465,104 shares, exercisable at prices between $6.87 and $18.81 per share, were outstanding at June 30, 2024, and included in the diluted earnings per share computation because their exercise price per share was less than the average market price for the six-month period ended June 30, 2024. Stock options for 203,189 shares were anti-dilutive and not included in the earnings per share calculation.

Note 5. Investment Securities

Fair values of available-for-sale securities are based on the fair market values supplied by a third-party market data provider, or where such third-party market data is not available, fair values are based on discounted cash flows. The third-party market data provider uses a pricing matrix which it creates daily, taking into consideration actual trade data, projected prepayments, and when relevant, projected credit defaults and losses.

The amortized cost, gross unrealized gains and losses, and fair values of the Company’s investment securities classified as available-for-sale at June 30, 2025 and December 31, 2024 are summarized as follows (dollars in thousands):



Available-for-sale	June 30, 2025
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
	cost		gains		losses		value
U.S. Government agency securities	$	27,519	$	99	$	(584)	$	27,034
Asset-backed securities⁽¹⁾		242,302		262		(57)		242,507
Tax-exempt obligations of states and political subdivisions		10,350		20		(309)		10,061
Taxable obligations of states and political subdivisions		30,021		28		(185)		29,864
Residential mortgage-backed securities		416,830		6,553		(4,266)		419,117
Collateralized mortgage obligation securities		22,586		7		(793)		21,800
Commercial mortgage-backed securities		729,776		11,454		(10,113)		731,117
	$	1,479,384	$	18,423	$	(16,307)	$	1,481,500


	June 30, 2025
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
⁽¹⁾Asset-backed securities as shown above	cost		gains		losses		value
Federally insured student loan securities	$	2,152	$	3	$	(6)	$	2,149
Collateralized loan obligation securities		240,150		259		(51)		240,358
	$	242,302	$	262	$	(57)	$	242,507

‎



Available-for-sale	December 31, 2024
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
	cost		gains		losses		value
U.S. Government agency securities	$	31,233	$	—	$	(1,271)	$	29,962
Asset-backed securities⁽¹⁾		214,346		177		(24)		214,499
Tax-exempt obligations of states and political subdivisions		6,860		—		(73)		6,787
Taxable obligations of states and political subdivisions		29,267		7		(441)		28,833
Residential mortgage-backed securities		438,562		1,137		(6,280)		433,419
Collateralized mortgage obligation securities		27,279		—		(1,127)		26,152
Commercial mortgage-backed securities		778,857		1,653		(17,302)		763,208
	$	1,526,404	$	2,974	$	(26,518)	$	1,502,860


	December 31, 2024
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
⁽¹⁾Asset-backed securities as shown above	cost		gains		losses		value
Federally insured student loan securities	$	2,440	$	—	$	(2)	$	2,438
Collateralized loan obligation securities		211,906		177		(22)		212,061
	$	214,346	$	177	$	(24)	$	214,499

Investments in Federal Home Loan Bank (“FHLB”) stock, Atlantic Central Bankers Bank (“ACBB”) stock, and Federal Reserve Bank stock are recorded at cost and amounted to $16.3 million at June 30, 2025, and $15.6 million at December 31, 2024. The amount of FHLB stock required to be held is based on the amount of borrowings, and after repayment thereof, the stock may be redeemed.

The amortized cost and fair value of the Company’s investment securities at June 30, 2025, by contractual maturity, are shown below (dollars in thousands). Expected maturities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.



	Available-for-sale
	Amortized		Fair
	cost		value
Due before one year	$	37,018	$	36,897
Due after one year through five years		187,113		185,649
Due after five years through ten years		626,637		634,144
Due after ten years		628,616		624,810
	$	1,479,384	$	1,481,500

The Company pledges loans to collateralize its line of credit with the FHLB, as described in “Note 6. Loans.” The Company had no securities pledged at June 30, 2025, and December 31, 2024. There were no gross realized gains on sales of securities for the three and six months ended June 30, 2025 and June 30, 2024. There were no realized losses on securities sales/calls for the three months ended June 30, 2025 and June 30, 2024. There were no realized losses on securities sales/calls for the six months ended June 30, 2025. Realized losses on securities sales/calls were $2,000 for the six months ended June 30, 2024.

The table below indicates the length of time individual securities had been in a continuous unrealized loss position at June 30, 2025 (dollars in thousands):



Available-for-sale	Less than 12 months				12 months or longer				Total
		Fair Value		Unrealized losses		Fair Value		Unrealized losses		Fair Value		Unrealized losses
Description of Securities
U.S. Government agency securities	$	7,634	$	(12)	$	12,601	$	(572)	$	20,235	$	(584)
Asset-backed securities		68,340		(50)		520		(7)		68,860		(57)
Tax-exempt obligations of states and
political subdivisions		6,930		(295)		1,146		(14)		8,076		(309)
Taxable obligations of states and
political subdivisions		—		—		23,471		(185)		23,471		(185)
Residential mortgage-backed securities		1,097		(4)		34,636		(4,262)		35,733		(4,266)
Collateralized mortgage obligation securities		—		—		17,419		(793)		17,419		(793)
Commercial mortgage-backed securities		79,928		(613)		145,809		(9,500)		225,737		(10,113)
Total unrealized loss position
investment securities⁽¹⁾	$	163,929	$	(974)	$	235,602	$	(15,333)	$	399,531	$	(16,307)

⁽¹⁾ At June 30, 2025 there were 212 securities in a loss position.

The table below indicates the length of time individual securities had been in a continuous unrealized loss position at December 31, 2024 (dollars in thousands):



Available-for-sale	Less than 12 months				12 months or longer				Total
		Fair Value		Unrealized losses		Fair Value		Unrealized losses		Fair Value		Unrealized losses
Description of Securities
U.S. Government agency securities	$	15,384	$	(307)	$	14,578	$	(964)	$	29,962	$	(1,271)
Asset-backed securities		35,108		(8)		33,854		(16)		68,962		(24)
Tax-exempt obligations of states and
political subdivisions		5,664		(36)		1,123		(37)		6,787		(73)
Taxable obligations of states and
political subdivisions		1,157		(18)		25,734		(423)		26,891		(441)
Residential mortgage-backed securities		172,076		(1,156)		37,527		(5,124)		209,603		(6,280)
Collateralized mortgage obligation securities		—		—		26,152		(1,127)		26,152		(1,127)
Commercial mortgage-backed securities		351,595		(4,402)		166,554		(12,900)		518,149		(17,302)
Total unrealized loss position
investment securities⁽¹⁾	$	580,984	$	(5,927)	$	305,522	$	(20,591)	$	886,506	$	(26,518)

⁽¹⁾ At December 31, 2024 there were 267 securities in a loss position.

The Company has evaluated the securities in the above tables as of June 30, 2025 and has concluded that none of these securities required an allowance for credit loss (“ACL”).

The Company evaluates whether an ACL is required by considering primarily the following factors: (a) the extent to which the fair value is less than the amortized cost of the security, (b) changes in the financial condition, credit rating and near-term prospects of the issuer, (c) whether the issuer is current on contractually obligated interest and principal payments, (d) changes in the financial condition of the security’s underlying collateral and (e) the payment structure of the security. The Company’s determination of the best estimate of expected future cash flows, which is used to determine the credit loss amount, is a quantitative and qualitative process that incorporates information received from third-party sources along with internal assumptions and judgments regarding the future performance of the security. The Company concluded that the securities that are in an unrealized loss position are in a loss position because of changes in market interest rates after the securities were purchased. The severity of the impact of fair value in relation to the carrying amounts of the individual investments is consistent with market developments. The Company’s analysis of each investment is performed at the security level. The Company does not have the intent to sell these securities, and it is likely that it will not be required to sell the securities before their anticipated recovery.

Note 6. Loans

The Company has several lending lines of business including: SBLs, comprised primarily of SBA loans; direct lease financing primarily for commercial vehicles and to a lesser extent equipment; SBLOC collateralized by marketable securities; IBLOC collateralized by the cash value of eligible life insurance policies; and investment advisor financing for purposes of debt refinance, acquisition of another firm or internal succession. Prior to 2020, the Company also originated non-SBA commercial real estate bridge loans, primarily collateralized by multifamily properties (apartment buildings), and to a lesser extent, by hotel and retail properties, for sale into securitizations. At origination, the Company elected fair value treatment for these loans as they were originally held-for-sale, to better reflect the economics of the transactions. In 2020, the Company decided to retain these loans on its balance sheet as interest-earning assets and currently intends to continue doing so. Therefore, these loans are no longer accounted for as held-for-sale, but the Company continues to present them at fair value. At June 30, 2025, such loans comprised $108.7 million of the $185.5 million of commercial loans, at fair value, with the balance comprised of the guaranteed portion of certain SBA loans also previously held for sale. The amortized cost of the $185.5 million commercial loans at fair value was $185.8 million. Included in net realized and unrealized gains (losses) on commercial loans, at fair value in the consolidated statements of operations are changes in the estimated fair value of such loans. For the six months ended June 30, 2025 and June 30, 2024, there were no related net unrealized losses or gains recognized for changes in fair value. In the third quarter of 2021, the Company resumed the origination of non-SBA commercial real estate bridge loans which it also intends to hold for investment and which are accounted for at amortized cost. They are captioned as REBLs as they are transitional commercial mortgage loans which are made to improve and rehabilitate existing properties which already have cash flow.

The Bank has pledged the majority of its loans held for investment at amortized cost and commercial loans at fair value to either the FHLB or the Federal Reserve Bank for lines of credit with those institutions. The FHLB and FRB lines are periodically utilized to manage liquidity. The amount of loans pledged varies and the collateral may be unpledged at any time to the extent the collateral exceeds advances. The lines maintained are consistent with the Bank’s liquidity policy which maximizes potential liquidity. At June 30, 2025, $2.54 billion of loans were pledged to the Federal Reserve Bank and $2.16 billion of loans were pledged to the FHLB against lines of credit which provide a source of liquidity to the Bank. There were no amounts drawn against these lines at June 30, 2025.

Prior to 2020, the Company sponsored the structuring of commercial mortgage loan securitizations, and in 2020, the Company decided not to pursue additional securitizations. The loans previously sold to the commercial mortgage-backed securitizations were transitional commercial mortgage loans made to improve and rehabilitate existing properties which already had cash flow. Servicing rights were not retained. Each of the securitizations is considered a variable interest entity of which the Company is not the primary beneficiary. Further, true sale accounting has been applicable to each of the securitizations, as supported by a review performed by an independent third-party consultant. In each of the securitizations, the Company obtained a tranche of certificates which are accounted for as available-for-sale debt securities. The securities were recorded at fair value at acquisition, which was determined by an independent third-party based on the discounted cash flow method using unobservable (level 3) inputs.

The Company analyzes credit risk prior to making loans on an individual loan basis. The Company considers relevant aspects of the borrowers’ financial position and cash flow, past borrower performance, management’s knowledge of market conditions, collateral and the ratio of loan amounts to estimated collateral value in making its credit determinations. For SBLOC, the Company relies on the market value of the underlying securities collateral as adjusted by margin requirements, generally 50% for equities and 80% for investment grade securities. For IBLOC, the Company relies on the cash value of insurance policy collateral. Of the total $680.5 million of consumer fintech loans at June 30, 2025, $346.9 million consisted of secured credit card loans, with the balance consisting of other short-term extensions of credit. Consumers do not pay interest on the majority of consumer fintech loan balances, including secured credit card loans. The majority of the income on those loans is reflected in non-interest income under “Consumer credit fintech fees” and originate with the marketers and servicers for those loans. The secured credit card balances were collateralized with deposits at the Bank, with related income statement impact reflected both in a lower cost of funds and fee income. The lower cost of funds results from deposits required to be maintained to collateralize related card use. Related fee income is reflected in the “Consumer credit fintech fees” line of the income statement.

Major classifications of loans, excluding commercial loans at fair value, are as follows (dollars in thousands):


	June 30,		December 31,
	2025		2024
SBL non-real estate	$	204,087	$	190,322
SBL commercial mortgage		723,754		662,091
SBL construction		30,705		34,685
SBLs		958,546		887,098
Direct lease financing		698,086		700,553
SBLOC / IBLOC⁽¹⁾		1,601,405		1,564,018
Advisor financing		272,155		273,896
Real estate bridge loans		2,140,039		2,109,041
Consumer fintech⁽²⁾		680,487		454,357
Other loans⁽³⁾		169,945		111,328
		6,520,663		6,100,291
Unamortized loan fees and costs		14,769		13,337
Total loans, including unamortized loan fees and costs	$	6,535,432	$	6,113,628


	June 30,		December 31,
	2025		2024
SBLs, including costs net of deferred fees of $11,570 and $9,979
for June 30, 2025 and December 31, 2024, respectively	$	970,116	$	897,077
SBLs included in commercial loans, at fair value		76,830		89,902
Total SBLs⁽⁴⁾	$	1,046,946	$	986,979

⁽¹⁾SBLOC are collateralized by marketable securities, while IBLOC are collateralized by the cash surrender value of insurance policies. At June 30, 2025 and December 31, 2024, IBLOC loans amounted to $513.9 million and $548.1 million, respectively.

⁽²⁾At June 30, 2025, consumer fintech loans consisted of $346.9 million of secured credit card loans, with the balance comprised of other short-term extensions of credit.

⁽³⁾Includes demand deposit overdrafts reclassified as loan balances totaling $6.4 million and $1.2 million at June 30, 2025 and December 31, 2024, respectively. Estimated overdraft charge-offs and recoveries are reflected in the ACL and are immaterial. The June 30, 2025 balance included $122.5 million of warehouse financing related to loan sales to third party purchasers. Weighted average look through loan to values (“LTVs”) based on our most recent appraisals for the related mortgaged properties were less than 60% as-is and less than 55% as-stabilized.

⁽⁴⁾The SBLs held at fair value are comprised of the government guaranteed portion of 7(a) Program (as defined below) loans at the dates indicated.

The loan review department recommends non-accrual status for loans to the surveillance committee, in those situations where interest income appears to be uncollectible or a protracted delay in collection becomes evident. The surveillance committee further vets and approves the non-accrual status.

The following table summarizes non-accrual loans with and without an ACL as of the periods indicated (dollars in thousands):


	June 30, 2025								December 31, 2024
	Non-accrual loans with a related ACL		Related ACL		Non-accrual loans without a related ACL		Total non-accrual loans		Non-accrual loans with a related ACL		Related ACL		Non-accrual loans without a related ACL		Total non-accrual loans
SBL non-real estate	$	4,764	$	733	$	1,212	$	5,976	$	1,308	$	351	$	1,327	$	2,635
SBL commercial mortgage		2,723		677		5,617		8,340		1,922		1,039		2,963		4,885
SBL construction		2,892		248		—		2,892		1,585		118		—		1,585
Direct leasing		6,844		2,881		392		7,236		5,561		2,377		465		6,026
IBLOC		469		206		—		469		503		413		—		503
Real estate bridge loans		—		—		36,677		36,677		—		—		12,300		12,300
	$	17,692	$	4,745	$	43,898	$	61,590	$	10,879	$	4,298	$	17,055	$	27,934

The Company had $66.1 million of other real estate owned (“OREO”) at June 30, 2025, and $62.0 million of OREO at December 31, 2024. The following table summarizes the Company’s non-accrual loans, loans past due 90 days or more, and OREO at June 30, 2025 and December 31, 2024, respectively:



	June 30,		December 31,
	2025		2024
	(Dollars in thousands)
Non-accrual loans
SBL non-real estate	$	5,976	$	2,635
SBL commercial mortgage		8,340		4,885
SBL construction		2,892		1,585
Direct leasing		7,236		6,026
IBLOC		469		503
Real estate bridge loans⁽¹⁾		36,677		12,300
Total non-accrual loans		61,590		27,934

Loans past due 90 days or more and still accruing		883		5,830
Total non-performing loans		62,473		33,764
OREO		66,054		62,025
Non-accrual investment		—		3,462
Total non-performing assets	$	128,527	$	99,251

Interest which would have been earned on loans classified as non-accrual for the six months ended June 30, 2025 and 2024, was $1.1 million and $497,000, respectively. No income on non-accrual loans was recognized during the six months ended June 30, 2025. During the six months ended June 30, 2025, $1.2 million of REBL, $59,000 of direct leasing, $307,000 of SBL commercial real estate, and $137,000 of SBL non-real estate were reversed from interest income, which represented interest accrued on loans placed into non-accrual status during the period. During the six months ended June 30, 2024, $222,000 of REBL, $63,000 of direct leasing, $109,000 of SBL commercial real estate, and $33,000 of SBL non-real estate were reversed from interest income, which represented interest accrued on loans placed into non-accrual status during the period.

Loans which are experiencing financial stress are reviewed by the loan review department, which is independent of the lending lines. The review includes an analysis for a potential specific reserve allocation in the ACL. For REBLs, updated appraisals are generally obtained in conjunction with modifications.

During the three-month and year-to-date periods ended June 30, 2025 and June 30, 2024, loans modified and related information are as follows (dollars in thousands):


	Three months ended June 30, 2025										Three months ended June 30, 2024
	Payment delay as a result of a payment deferral		Interest rate reduction and payment deferral		Term extension		Total		Percent of total loan category		Payment delay as a result of a payment deferral		Term extension		Total		Percent of total loan category
SBL non-real estate	$	—	$	1,348	$	—	$	1,348		0.66%	$	—	$	—	$	—		—
SBL commercial mortgage		—		—		—		—		—		—		—		—		—
Direct lease financing		—		—		—		—		—		—		2,551		2,551		0.36%
Real estate bridge lending		—		—		—		—		—		—		—		—		—
Total	$	—	$	1,348	$	—	$	1,348		0.02%	$	—	$	2,551	$	2,551		0.05%


	Six months ended June 30, 2025										Six months ended June 30, 2024
	Payment delay as a result of a payment deferral		Interest rate reduction and payment deferral		Term extension		Total		Percent of total loan category		Payment delay as a result of a payment deferral		Interest rate reduction and payment deferral			Term extension	Total		Percent of total loan category
SBL non-real estate	$	4,991	$	1,348	$	—	$	6,339		3.11%	$	1,726	$	—	$	—	$	1,726		1.00%
SBL commercial mortgage		2,738		—		—		2,738		0.38%		3,320		—		—		3,320		0.51%
Direct lease financing		—		—		—		—		—		—		—		2,551		2,551		0.36%
Real estate bridge lending⁽¹⁾		—		—		—		—		—		26,923		32,500		—		59,423		2.80%
Total	$	7,729	$	1,348	$	—	$	9,077		0.14%	$	31,969	$	32,500	$	2,551	$	67,020		1.20%

⁽¹⁾In the second quarter of 2025, a $26.9 million loan was transferred to non-accrual status. The related $26.9 million loan was modified twice in 2024. The loan is secured by an apartment building with an “as is” LTV of 75% and an “as stabilized” LTV of 65%, based on a December 2024 appraisal. On July 31, 2025, a purchase and sale agreement for the property was executed with a new counterparty possessing greater financial capacity and experience. The sale is expected to close in the third quarter of 2025, and a new loan is anticipated in connection with the transaction.

The following table shows an analysis of loans that were modified during the three-month and year-to-date periods ended June 30, 2025 and June 30, 2024 presented by loan classification (dollars in thousands):


	Three months ended June 30, 2025
	Payment Status (Amortized Cost Basis)
	30-59 days		60-89 days		90+ days				Total
	past due		past due		still accruing		Non-accrual		delinquent		Current		Total
SBL non-real estate	$	—	$	1,348	$	—	$	—	$	1,348	$	—	$	1,348
SBL commercial mortgage		—		—		—		—		—		—		—
Real estate bridge lending		—		—		—		—		—		—		—
	$	—	$	1,348	$	—	$	—	$	1,348	$	—	$	1,348

	Three months ended June 30, 2024
	Payment Status (Amortized Cost Basis)
	30-59 days		60-89 days		90+ days				Total
	past due		past due		still accruing		Non-accrual		delinquent		Current		Total
SBL non-real estate	$	—	$	—	$	—	$	—	$	—	$	—	$	—
SBL commercial mortgage		—		—		—		—		—		—		—
Direct lease financing		—		2,551		—		—		2,551		—		2,551
Real estate bridge lending		—		—		—		—		—		—		—
	$	—	$	2,551	$	—	$	—	$	2,551	$	—	$	2,551


	Six months ended June 30, 2025
	Payment Status (Amortized Cost Basis)
	30-59 days		60-89 days		90+ days				Total
	past due		past due		still accruing		Non-accrual		delinquent		Current		Total
SBL non-real estate	$	—	$	1,348	$	—	$	—	$	1,348	$	4,991	$	6,339
SBL commercial mortgage		—		—		—		—		—		2,738		2,738
Direct lease financing		—		—		—		—		—		—		—
Real estate bridge lending		—		—		—		—		—		—		—
	$	—	$	1,348	$	—	$	—	$	1,348	$	7,729	$	9,077

	Six months ended June 30, 2024
	Payment Status (Amortized Cost Basis)
	30-59 days		60-89 days		90+ days				Total
	past due		past due		still accruing		Non-accrual		delinquent		Current		Total
SBL non-real estate	$	—	$	—	$	—	$	757	$	757	$	969	$	1,726
SBL commercial mortgage		—		—		—		—		—		3,320		3,320
Direct lease financing		—		2,551		—		—		2,551		—		2,551
Real estate bridge lending		—		—		—		—		—		59,423		59,423
	$	—	$	2,551	$	—	$	757	$	3,308	$	63,712	$	67,020

The following table describes the financial effect of the modifications made during the three-month and year-to-date periods ended June 30, 2025 and June 30, 2024 (dollars in thousands):


	Three months ended June 30, 2025			Three months ended June 30, 2024
	Combined Rate and Maturity			Combined Rate and Maturity
	Weighted average interest reduction	Weighted average term extension (in months)	More-than-insignificant-payment delay⁽¹⁾	Weighted average interest reduction	Weighted average term extension (in months)	More-than-insignificant-payment delay⁽¹⁾
SBL non-real estate	1.00%	—	—	—	—	—
SBL commercial mortgage	—	—	—	—	—	—
Direct lease financing	—	—	—	—	12.0	—
Real estate bridge lending	—	—	—	—	—	—

⁽¹⁾Percentage represents the principal of loans deferred divided by the principal of the total loan portfolio.


	Six months ended June 30, 2025			Six months ended June 30, 2024
	Combined Rate and Maturity			Combined Rate and Maturity
	Weighted average interest reduction	Weighted average term extension (in months)	More-than-insignificant-payment delay⁽¹⁾	Weighted average interest reduction	Weighted average term extension (in months)	More-than-insignificant-payment delay⁽¹⁾
SBL non-real estate	1.00%	—	2.45%	—	—	1.00%
SBL commercial mortgage	—	—	0.38%	—	—	0.51%
Direct lease financing	—	—	—	—	12.0	—
Real estate bridge lending	—	—	—	1.68%	—	1.27%

⁽¹⁾Percentage represents the principal of loans deferred divided by the principal of the total loan portfolio.

There were no loans that received a term extension modification which had a payment default during the period and were modified in the twelve months before default.

The Company had no commitments to extend additional credit to loans classified as modified for the periods ended June 30, 2025 or December 31, 2024.

There were $1.3 million and $2.6 million of total loans classified as modified for the three months ended June 30, 2025 and June 30, 2024, respectively, with no specific reserves.

For the six months ended June 30, 2025, there were $9.1 million of total loans classified as modified with specific reserves of $168,000, while there were $67.0 million of total loans classified as modified for the six months ended June 30, 2024 with specific reserves of $7,000.

Management estimates the ACL quarterly and for most loan categories uses relevant available internal and external historical loan performance information to determine the quantitative component of the reserve and current economic conditions, and reasonable and supportable forecasts and other factors to determine the qualitative component of the reserve. Reserves on specific credit-deteriorated loans comprise the third and final component of the reserve. Historical credit loss experience provides the quantitative basis for the estimation of expected credit losses over the estimated remaining life of the loans. The qualitative component of the ACL is designed to be responsive to changes in portfolio credit quality and the impact of current and future economic conditions on loan performance, and is subjective. The review of the appropriateness of the ACL is performed by the Chief Credit Officer and presented to the Audit Committee of the Company’s Board of Directors for review. With the exception of SBLOC, IBLOC, and consumer fintech loans, which utilize probability of default/loss given default, and the other loan category, which uses discounted cash flow to determine a reserve, the quantitative components for remaining categories are determined by establishing reserves on loan pools with similar risk characteristics based on a lifetime loss-rate model, or vintage analysis, as described in the following paragraph. Loans that do not share risk characteristics are evaluated on an individual basis. If foreclosure is believed to be probable or repayment is expected from the sale of collateral, a reserve for deficiency is established within the ACL. Those reserves are estimated based on the difference between loan principal and the estimated fair value of the collateral, adjusted for estimated disposition costs.

Below are the portfolio segments used to pool loans with similar risk characteristics and align with the Company’s methodology for measuring expected credit losses. These pools have similar risk and collateral characteristics, and certain of these pools are broken down further in determining and applying the vintage loss estimates previously discussed. For instance, within the direct lease financing pool, government and public institution leases are considered separately. Additionally, the Company evaluates its loans under an internal loan risk rating system as a means of identifying problem loans. The special mention classification indicates weaknesses that may, if not cured, threaten the borrower’s future repayment ability. A substandard classification reflects an existing weakness indicating the possible inadequacy of net worth and other repayment sources. These classifications are used both by regulators and peers, as they have been correlated with an increased probability of credit losses. A summary of the Company’s primary portfolio pools and loans accordingly classified, by year of origination, at June 30, 2025 and December 31, 2024 are as follows (dollars in thousands):

‎


As of June 30, 2025	2025		2024		2023		2022		2021		Prior		Revolving loans at amortized cost		Total
SBL non real estate
Pass	$	22,283	$	49,923	$	67,442	$	24,617	$	15,219	$	8,455	$	—	$	187,939
Special mention		—		—		2,437		404		—		110		—		2,951
Substandard		—		535		3,496		2,492		1,226		2,063		—		9,812
Total SBL non-real estate		22,283		50,458		73,375		27,513		16,445		10,628		—		200,702

SBL commercial mortgage
Non-rated		1,036		—		—		—		—		—		—		1,036
Pass		65,712		144,273		86,454		118,893		79,363		184,902		—		679,597
Special mention		—		706		2,103		2,735		1,095		8,880		—		15,519
Substandard		—		—		3,012		9,617		5,493		5,495		—		23,617
Total SBL commercial mortgage		66,748		144,979		91,569		131,245		85,951		199,277		—		719,769

SBL construction
Pass		1,118		12,965		9,816		-		3,566		—		—		27,465
Substandard		—		—		—		—		2,530		710		—		3,240
Total SBL construction		1,118		12,965		9,816		—		6,096		710		—		30,705

Direct lease financing
Non-rated		2,426		146		—		—		—		—		—		2,572
Pass		142,470		222,987		154,809		109,989		31,079		10,274		—		671,608
Special mention		—		599		868		514		28		23		—		2,032
Substandard		—		4,535		8,208		6,496		2,535		100		—		21,874
Total direct lease financing		144,896		228,267		163,885		116,999		33,642		10,397		—		698,086

SBLOC
Non-rated		—		—		—		—		—		—		2,540		2,540
Pass		—		—		—		—		—		—		1,084,982		1,084,982
Total SBLOC		—		—		—		—		—		—		1,087,522		1,087,522

IBLOC
Pass		—		—		—		—		—		—		513,372		513,372
Substandard		—		—		—		—		—		—		511		511
Total IBLOC		—		—		—		—		—		—		513,883		513,883

Advisor financing
Pass		31,552		73,536		74,832		51,169		18,409		13,498		—		262,996
Special mention		—		—		—		1,001		8,158		—		—		9,159
Total advisor financing		31,552		73,536		74,832		52,170		26,567		13,498		—		272,155

Real estate bridge loans
Pass		234,267		440,369		393,029		631,576		224,976		—		—		1,924,217
Special mention⁽¹⁾		—		—		—		81,838		9,576		—		—		91,414
Substandard⁽¹⁾		—		55,042		—		47,984		21,382		—		—		124,408
Total real estate bridge loans		234,267		495,411		393,029		761,398		255,934		—		—		2,140,039

Consumer fintech
Non-rated		60,235		—		—		—		—		—		619,818		680,053
Substandard		165		81		—		—		—		—		188		434
Total consumer fintech		60,400		81		—		—		—		—		620,006		680,487

Other loans
Non-rated		6,411		—		—		—		—		7,791		—		14,202
Pass		56,933		66,263		161		254		347		37,798		1,159		162,915
Special mention		—		—		—		—		—		198		—		198
Total other loans⁽²⁾		63,344		66,263		161		254		347		45,787		1,159		177,315

	$	624,608	$	1,071,960	$	806,667	$	1,089,579	$	424,982	$	280,297	$	2,222,570	$	6,520,663

Unamortized loan fees and costs		—		—		—		—		—		—		—		14,769
Total															$	6,535,432

⁽¹⁾ For the special mention and substandard real estate bridge loans, appraisals performed within the past twelve months reflect a respective weighted average “as is” LTV of 80% and a further estimated 72% “as stabilized” LTV. “As stabilized” LTVs represent additional potential collateral value as rehabilitation progresses, and units are re-leased at stabilized rental rates. The substandard real estate bridge loans shown in 2024 reflected loans to new borrowers with greater financial capacity, with their original financing in the 2021 and 2022 vintages.

⁽²⁾Included in Other loans are $7.4 million of SBA loans purchased for Community Reinvestment Act (“CRA”) purposes as of June 30, 2025. These loans are classified as SBL in the Company’s loan table, which classifies loans by type, as opposed to risk characteristics.


As of December 31, 2024	2024		2023		2022		2021		2020		Prior		Revolving loans at amortized cost		Total
SBL non real estate
Pass	$	46,766	$	74,772	$	27,794	$	18,103	$	5,321	$	5,353	$	—	$	178,109
Special mention		—		—		—		—		—		130		—		130
Substandard		—		2,437		2,480		1,234		573		1,097		—		7,821
Total SBL non-real estate		46,766		77,209		30,274		19,337		5,894		6,580		—		186,060

SBL commercial mortgage
Pass		140,314		84,538		130,233		84,026		58,524		140,165		—		637,800
Special mention		—		—		528		1,104		—		7,690		—		9,322
Substandard		—		—		1,380		4,942		163		4,104		—		10,589
Total SBL commercial mortgage		140,314		84,538		132,141		90,072		58,687		151,959		—		657,711

SBL construction
Pass		12,392		13,846		2,899		3,609		—		—		—		32,746
Substandard		—		—		—		1,229		—		710		—		1,939
Total SBL construction		12,392		13,846		2,899		4,838		—		710		—		34,685

Direct lease financing
Non-rated		5,184		—		—		—		—		—		—		5,184
Pass		271,791		193,663		136,601		45,594		15,846		4,269		—		667,764
Special mention		1,866		2,294		2,618		1,783		73		83		—		8,717
Substandard		3,892		6,657		6,462		1,733		92		52		—		18,888
Total direct lease financing		282,733		202,614		145,681		49,110		16,011		4,404		—		700,553

SBLOC
Non-rated		—		—		—		—		—		—		3,466		3,466
Pass		—		—		—		—		—		—		1,012,418		1,012,418
Total SBLOC		—		—		—		—		—		—		1,015,884		1,015,884

IBLOC
Pass		—		—		—		—		—		—		547,196		547,196
Substandard		—		—		—		—		—		—		938		938
Total IBLOC		—		—		—		—		—		—		548,134		548,134

Advisor financing
Pass		84,414		84,908		54,064		22,560		18,588		—		—		264,534
Special mention		—		—		1,021		8,341		—		—		—		9,362
Total advisor financing		84,414		84,908		55,085		30,901		18,588		—		—		273,896

Real estate bridge loans
Pass		432,609		418,326		761,331		278,031		—		—		—		1,890,297
Special mention⁽¹⁾		16,913		—		36,318		31,153		—		—		—		84,384
Substandard⁽¹⁾		54,485		—		55,947		23,928		—		—		—		134,360
Total real estate bridge loans		504,007		418,326		853,596		333,112		—		—		—		2,109,041

Consumer fintech
Non-rated		18,119		—		—		—		—		—		436,025		454,144
Substandard		—		—		—		—		—		—		213		213
Total consumer fintech		18,119		—		—		—		—		—		436,238		454,357

Other loans
Non-rated		1,187		—		—		—		—		10,394		—		11,581
Pass		66,267		163		256		351		2,606		37,133		1,381		108,157
Special mention		—		—		—		—		—		232		—		232
Substandard		—		—		—		—		—		—		—		—
Total other loans⁽²⁾		67,454		163		256		351		2,606		47,759		1,381		119,970

Total	$	1,156,199	$	881,604	$	1,219,932	$	527,721	$	101,786	$	211,412	$	2,001,637	$	6,100,291

Unamortized loan fees and costs		—		—		—		—		—		—		—		13,337
Total															$	6,113,628

⁽¹⁾ For the special mention and substandard real estate bridge loans, recent appraisals reflect a respective weighted average “as is” LTV of 77% and a further estimated 68% “as stabilized” LTV. “As stabilized” LTVs represent additional potential collateral value as rehabilitation progresses, and units are re-leased at stabilized rental rates. The special mention and substandard real estate bridge loans shown in 2024 reflected loans to new borrowers with greater financial capacity, with their original financing in the 2021 and 2022 vintages.

⁽²⁾Included in Other loans are $8.6 million of SBA loans purchased for CRA purposes as of December 31, 2024. These loans are classified as SBL in the Company’s loan table, which classifies loans by type, as opposed to risk characteristics.

SBL. Substantially all SBLs consist of SBA loans. The Bank participates in loan programs established by the SBA, including the 7(a) Loan Guarantee Program (the “7(a) Program”), the 504 Fixed Asset Financing Program (the “504 Program”), and the discontinued PPP. The 7(a) Program is designed to help small business borrowers start or expand their businesses by providing partial guarantees of loans made by banks and non-bank lending institutions for specific business purposes, including long or short-term working capital; funds for the purchase of equipment, machinery, supplies and materials; funds for the purchase, construction or renovation of real estate; and funds to acquire, operate or expand an existing business or refinance existing debt, all under conditions established by the SBA. The 504 Program includes the financing of real estate and commercial mortgages. In 2020 and 2021, the Company also participated in the PPP, which provided short-term loans to small businesses. PPP loans are fully guaranteed by the U.S. government. This program was a specific response to the COVID-19 pandemic, and the majority of these loans have been reimbursed by the U.S. government, with $15,000 remaining to be reimbursed as of June 30, 2025. The Company segments the SBL portfolio into four pools: non-real estate, commercial mortgage and construction to capture the risk characteristics of each pool, and the PPP loans discussed above. PPP loans are not included in the risk pools because they have inherently different risk characteristics due to the U.S. government guarantee. In the table above, the PPP loans are included in non-rated SBL non-real estate. The qualitative factors for SBL loans focus on pool loan performance, underlying collateral for collateral dependent loans and changes in economic conditions. Additionally, the construction segment adds a qualitative factor for general construction risk, such as construction delays resulting from labor shortages or availability/pricing of construction materials.

Direct lease financing. The Company provides lease financing for commercial and government vehicle fleets and, to a lesser extent, provides lease financing for other equipment. Leases are either open-end or closed-end. An open-end lease is one in which, at the end of the lease term, the lessee must pay the difference between the amount at which the Company sells the leased asset and the stated termination value. Termination value is a contractual value agreed to by the parties at the inception of a lease as to the value of the leased asset at the end of the lease term. A closed-end lease is one for which no such payment is due on lease termination. In a closed-end lease, the risk that the amount received on a sale of the leased asset will be less than the residual value is assumed by the Bank, as lessor. The qualitative factors for direct lease financing focus on underlying collateral for collateral dependent loans, portfolio loan performance, loan concentrations and changes in economic conditions.

SBLOC. SBLOC loans are made to individuals, trusts and entities and are secured by a pledge of marketable securities maintained in one or more accounts for which the Company obtains a securities account control agreement. The securities pledged may be either debt or equity securities or a combination thereof, but all such securities must be listed for trading on a national securities exchange or automated inter-dealer quotation system. SBLOCs are typically payable on demand. Maximum SBLOC line amounts are calculated by applying a standard “advance rate” calculation against the eligible security type depending on asset class: typically, up to 50% for equity securities and mutual fund securities and 80% for investment grade (Standard & Poor’s rating of BBB- or higher, or Moody’s rating of Baa3 or higher) municipal or corporate debt securities. Substantially all SBLOCs have full recourse to the borrower. The underlying securities collateral for SBLOC loans is monitored on a daily basis to confirm the composition of the client portfolio and its daily market value. The primary qualitative factor in the SBLOC analysis is the ratio of loans outstanding to market value. This factor has been maintained at low levels, which has remained appropriate as losses have not materialized despite the historic declines in the equity markets during 2020, during which there were no losses. Significant losses have not been incurred since inception of this line of business. Additionally, the advance rates noted above were established to provide the Company with protection from declines in market conditions from the origination date of the lines of credit.

IBLOC. IBLOC loans are collateralized by the cash surrender value of eligible insurance policies. Should a loan default, the primary risks for IBLOCs are if the insurance company issuing the policy were to become insolvent, or if that company would fail to recognize the Bank’s assignment of policy proceeds. To mitigate these risks, insurance company ratings are periodically evaluated for compliance with Bank standards. Additionally, the Bank utilizes assignments of cash surrender value, which legal counsel has concluded are enforceable. Significant losses have not been incurred since inception of this line of business. The qualitative factors for IBLOC primarily focus on the concentration risk with insurance companies.

Investment advisor financing. The Bank originates loans to investment advisors for purposes of debt refinancing, acquisition of another firm or internal succession. Maximum loan amounts are subject to loan-to-value ratios of 70%, based on third-party business appraisals, but may be increased depending upon the debt service coverage ratio. Personal guarantees and blanket business liens are obtained as appropriate. Loan repayment is highly dependent on fee streams from advisor clientele. Accordingly, loss of fee-based investment advisory clients or negative market performance may reduce fees and pose a risk to these credits. As credit losses have not been experienced, the ACL is determined by qualitative factors. The qualitative factors for investment advisor financing focus on historical industry losses, changes in lending policies and procedures, portfolio performance and economic conditions.

Real estate bridge loans. Real estate bridge loans are transitional commercial mortgage loans which are made to improve and rehabilitate existing properties which already have cash flow, and which are collateralized by those properties. Prior to 2020, such loans were

originated for securitization and loans which had been originated but not securitized continue to be accounted for at fair value in “Commercial loans, at fair value”, on the balance sheet. In 2021, originations resumed and are being held for investment in “Loans, net of deferred fees and costs”, on the balance sheet. The Bank has minimal exposure to non-multifamily commercial real estate such as office buildings, and instead has a portfolio largely comprised of rehabilitation bridge loans for apartment buildings. These loans generally have three-year terms with two one-year extensions to allow for the rehabilitation work to be completed and rentals stabilized for an extended period, before being refinanced at lower rates through U.S. Government Sponsored Entities or other lenders. The rehabilitation real estate lending portfolio consists primarily of workforce housing, which the Company considers to be working class apartments at more affordable rental rates. As charge-offs have generally not been experienced for multifamily (apartment building loans) which comprise the REBL portfolio, the ACL is determined by qualitative factors. Qualitative factors focus on historical industry losses, changes in classified loan balances, changes in economic conditions and underlying collateral and portfolio performance. In the third quarter of 2024, as a result of increased levels of loans classified as special mention or substandard, a new qualitative factor related to the level of such classified loans was added.

Consumer fintech loans. Consumer fintech loans consist of short-term extensions of credit including secured credit card loans made in conjunction with marketers and servicers. The majority of secured credit card balances are collateralized with deposits at the Bank, with related income statement impact reflected both in a lower cost of funds and fee income. The lower cost of funds results from balances required to be maintained to collateralize related card use. Fee income for consumer fintech loans is reflected in the “Consumer credit fintech fees” line of the income statement.

Other loans. Other loans include commercial and home equity lines of credit which the Company generally no longer offers. Qualitative factors focus on changes in the underlying collateral for collateral dependent loans, portfolio loan performance, loan concentrations and changes in economic conditions.

Expected credit losses are estimated over the estimated remaining lives of loans. The estimate excludes possible extensions, renewals and modifications unless either of the following applies: management has a reasonable expectation that a loan will be restructured, or the extension or renewal options are included in the borrower contract and are not unconditionally cancellable by us.

The Company does not measure an ACL on accrued interest receivable balances, because these balances are written off in a timely manner as a reduction to interest income when loans are placed on non-accrual status.

ACL on off-balance sheet credit exposures. The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The ACL on such off-balance sheet credit exposures, also referred to as loan commitments, is adjusted through the provision for credit losses. The estimate considers the likelihood that funding will occur over the estimated life of the commitment. The amount of the ACL on such exposures as of June 30, 2025 and as of December 31, 2024 was $1.8 million and $2.0 million, respectively.

A detail of the changes in the ACL by loan category and summary of loans evaluated individually and collectively for credit deterioration is as follows (in thousands):



	June 30, 2025
	SBL non-real estate		SBL commercial mortgage		SBL construction		Direct lease financing		SBLOC / IBLOC		Advisor financing		Real estate bridge loans		Consumer fintech		Other loans		Deferred fees and costs		Total
Beginning 1/1/2025	$	4,972	$	3,203	$	342	$	13,125	$	1,195	$	2,054	$	6,603	$	12,909	$	450	$	—	$	44,853
Charge-offs⁽¹⁾		(171)		—		—		(1,520)		—		—		—		(89,627)		(704)		—		(92,022)
Recoveries		61		—		—		429		—		—		—		14,599		4		—		15,093
Provision (credit)⁽¹⁾		326		(190)		124		1,504		(188)		(13)		16		89,101		789		—		91,469
Ending balance	$	5,188	$	3,013	$	466	$	13,538	$	1,007	$	2,041	$	6,619	$	26,982	$	539	$	—	$	59,393

Ending balance: Individually evaluated for expected credit loss	$	776	$	677	$	248	$	2,881	$	206	$	—	$	—	$	—	$	—	$	—	$	4,788

Ending balance: Collectively evaluated for expected credit loss	$	4,412	$	2,336	$	218	$	10,657	$	801	$	2,041	$	6,619	$	26,982	$	539	$	—	$	54,605

Loans:
Ending balance	$	204,087	$	723,754	$	30,705	$	698,086	$	1,601,405	$	272,155	$	2,140,039	$	680,487	$	169,945	$	14,769	$	6,535,432

Ending balance: Individually evaluated for expected credit loss	$	6,024	$	8,340	$	2,892	$	7,236	$	469	$	—	$	36,677	$	—	$	214	$	—	$	61,852

Ending balance: Collectively evaluated for expected credit loss	$	198,063	$	715,414	$	27,813	$	690,850	$	1,600,936	$	272,155	$	2,103,362	$	680,487	$	169,731	$	14,769	$	6,473,580
⁽¹⁾ Lending agreements related to consumer fintech loans resulted in the company recording a $89.1 million provision for credit losses and a correlated amount in non-interest income resulting in no impact to net income.


	December 31, 2024
	SBL non-real estate		SBL commercial mortgage		SBL construction		Direct lease financing		SBLOC / IBLOC		Advisor financing		Real estate bridge loans		Consumer fintech		Other loans		Deferred fees and costs		Total
Beginning 1/1/2024	$	6,059	$	2,820	$	285	$	10,454	$	813	$	1,662	$	4,740	$	—	$	545	$	—	$	27,378
Charge-offs⁽¹⁾		(708)		—		—		(4,575)		—		—		—		(19,619)		(18)		—		(24,920)
Recoveries		229		—		—		318		—		—		—		1,877		1		—		2,425
Provision (credit)⁽¹⁾		(608)		383		57		6,928		382		392		1,863		30,651		(78)		—		39,970
Ending balance	$	4,972	$	3,203	$	342	$	13,125	$	1,195	$	2,054	$	6,603	$	12,909	$	450	$	—	$	44,853

Ending balance: Individually evaluated for expected credit loss	$	403	$	1,039	$	118	$	2,377	$	413	$	—	$	—	$	—	$	—	$	—	$	4,350

Ending balance: Collectively evaluated for expected credit loss	$	4,569	$	2,164	$	224	$	10,748	$	782	$	2,054	$	6,603	$	12,909	$	450	$	—	$	40,503

Loans:
Ending balance	$	190,322	$	662,091	$	34,685	$	700,553	$	1,564,018	$	273,896	$	2,109,041	$	454,357	$	111,328	$	13,337	$	6,113,628

Ending balance: Individually evaluated for expected credit loss	$	2,693	$	4,885	$	1,585	$	6,026	$	503	$	—	$	12,300	$	—	$	219	$	—	$	28,211

Ending balance: Collectively evaluated for expected credit loss	$	187,629	$	657,206	$	33,100	$	694,527	$	1,563,515	$	273,896	$	2,096,741	$	454,357	$	111,109	$	13,337	$	6,085,417

⁽¹⁾ Lending agreements related to consumer fintech loans resulted in the Company recording a $30.7 million provision for credit losses and a correlated amount in non-interest income resulting in no impact to net income.



	June 30, 2024
	SBL non-real estate		SBL commercial mortgage		SBL construction		Direct lease financing		SBLOC / IBLOC		Advisor financing		Real estate bridge loans		Consumer fintech		Other loans		Deferred fees and costs		Total
Beginning 1/1/2024	$	6,059	$	2,820	$	285	$	10,454	$	813	$	1,662	$	4,740	$	—	$	545	$	—	$	27,378
Charge-offs		(417)		—		—		(2,301)		—		—		—		—		(16)		—		(2,734)
Recoveries		32		—		—		59		—		—		—		—		—		—		91
Provision (credit)		(630)		240		12		3,996		(24)		129		283		—		(166)		—		3,840
Ending balance	$	5,044	$	3,060	$	297	$	12,208	$	789	$	1,791	$	5,023	$	—	$	363	$	—	$	28,575

Ending balance: Individually evaluated for expected credit loss	$	451	$	928	$	112	$	1,943	$	—	$	—	$	—	$	—	$	—	$	—	$	3,434

Ending balance: Collectively evaluated for expected credit loss	$	4,593	$	2,132	$	185	$	10,265	$	789	$	1,791	$	5,023	$	—	$	363	$	—	$	25,141

Loans:
Ending balance	$	171,893	$	647,894	$	30,881	$	711,403	$	1,558,095	$	238,831	$	2,119,324	$	70,081	$	46,592	$	10,733	$	5,605,727

Ending balance: Individually evaluated for expected credit loss	$	2,517	$	5,211	$	3,385	$	3,871	$	—	$	—	$	—	$	—	$	224	$	—	$	15,208

Ending balance: Collectively evaluated for expected credit loss	$	169,376	$	642,683	$	27,496	$	707,532	$	1,558,095	$	238,831	$	2,119,324	$	70,081	$	46,368	$	10,733	$	5,590,519

A summary of the Company’s net charge-offs accordingly classified, by year of origination, at June 30, 2025 and December 31, 2024 are as follows (dollars in thousands):


As of June 30, 2025		2025		2024		2023		2022		2021		Prior	Revolving loans at amortized cost			Total
SBL non-real estate
Current period charge-offs	$	—	$	—	$	—	$	(62)	$	—	$	(109)	$	—	$	(171)
Current period recoveries		—		14		—		12		—		35		—		61
Current period SBL non-real estate net charge-offs		—		14		—		(50)		—		(74)		—		(110)

SBL commercial mortgage
Current period charge-offs		—		—		—		—		—		—		—		—
Current period recoveries		—		—		—		—		—		—		—		—
Current period SBL commercial mortgage net charge-offs		—		—		—		—		—		—		—		—

SBL construction
Current period charge-offs		—		—		—		—		—		—		—		—
Current period recoveries		—		—		—		—		—		—		—		—
Current period SBL construction net charge-offs		—		—		—		—		—		—		—		—

Direct lease financing
Current period charge-offs		—		(139)		(320)		(884)		(177)		—		—		(1,520)
Current period recoveries		—		—		59		338		32		—		—		429
Current period direct lease financing net charge-offs		—		(139)		(261)		(546)		(145)		—		—		(1,091)

SBLOC
Current period charge-offs		—		—		—		—		—		—		—		—
Current period recoveries		—		—		—		—		—		—		—		—
Current period SBLOC net charge-offs		—		—		—		—		—		—		—		—

IBLOC
Current period charge-offs		—		—		—		—		—		—		—		—
Current period recoveries		—		—		—		—		—		—		—		—
Current period IBLOC net charge-offs		—		—		—		—		—		—		—		—

Advisor financing
Current period charge-offs		—		—		—		—		—		—		—		—
Current period recoveries		—		—		—		—		—		—		—		—
Current period advisor financing net charge-offs		—		—		—		—		—		—		—		—

Real estate bridge loans
Current period charge-offs		—		—		—		—		—		—		—		—
Current period recoveries		—		—		—		—		—		—		—		—
Current period real estate bridge loans net charge-offs		—		—		—		—		—		—		—		—

Consumer fintech
Current period charge-offs		(369)		(2,184)		—		—		—		—		(87,074)		(89,627)
Current period recoveries		8		156		—		—		—		—		14,435		14,599
Current period consumer fintech net charge-offs		(361)		(2,028)		—		—		—		—		(72,639)		(75,028)

Other loans
Current period charge-offs		—		—		—		—		—		(704)		—		(704)
Current period recoveries		—		—		—		—		—		—		4		4
Current period other loans net charge-offs		—		—		—		—		—		(704)		4		(700)

Total
Current period charge-offs		(369)		(2,323)		(320)		(946)		(177)		(813)		(87,074)		(92,022)
Current period recoveries		8		170		59		350		32		35		14,439		15,093
Current period net charge-offs	$	(361)	$	(2,153)	$	(261)	$	(596)	$	(145)	$	(778)	$	(72,635)	$	(76,929)


As of December 31, 2024		2024		2023		2022		2021		2020		Prior	Revolving loans at amortized cost			Total
SBL non-real estate
Current period charge-offs	$	(14)	$	(53)	$	(149)	$	(101)	$	(320)	$	(71)	$	—	$	(708)
Current period recoveries		—		7		—		7		63		152		—		229
Current period SBL non-real estate net charge-offs		(14)		(46)		(149)		(94)		(257)		81		—		(479)

SBL commercial mortgage
Current period charge-offs		—		—		—		—		—		—		—		—
Current period recoveries		—		—		—		—		—		—		—		—
Current period SBL commercial mortgage net charge-offs		—		—		—		—		—		—		—		—

SBL construction
Current period charge-offs		—		—		—		—		—		—		—		—
Current period recoveries		—		—		—		—		—		—		—		—
Current period SBL construction net charge-offs		—		—		—		—		—		—		—		—

Direct lease financing
Current period charge-offs		(3)		(744)		(2,739)		(1,015)		(61)		(13)		—		(4,575)
Current period recoveries		—		39		177		85		8		9		—		318
Current period direct lease financing net charge-offs		(3)		(705)		(2,562)		(930)		(53)		(4)		—		(4,257)

SBLOC
Current period charge-offs		—		—		—		—		—		—		—		—
Current period recoveries		—		—		—		—		—		—		—		—
Current period SBLOC net charge-offs		—		—		—		—		—		—		—		—

IBLOC
Current period charge-offs		—		—		—		—		—		—		—		—
Current period recoveries		—		—		—		—		—		—		—		—
Current period IBLOC net charge-offs		—		—		—		—		—		—		—		—

Advisor financing
Current period charge-offs		—		—		—		—		—		—		—		—
Current period recoveries		—		—		—		—		—		—		—		—
Current period advisor financing net charge-offs		—		—		—		—		—		—		—		—

Real estate bridge loans
Current period charge-offs		—		—		—		—		—		—		—		—
Current period recoveries		—		—		—		—		—		—		—		—
Current period real estate bridge loans net charge-offs		—		—		—		—		—		—		—		—

Consumer fintech
Current period charge-offs		—		—		—		—		—		—		(19,619)		(19,619)
Current period recoveries		—		—		—		—		—		—		1,877		1,877
Current period consumer fintech net charge-offs		—		—		—		—		—		—		(17,742)		(17,742)

Other loans
Current period charge-offs		—		(6)		—		—		—		(12)		—		(18)
Current period recoveries		—		—		—		—		—		1		—		1
Current period other loans net charge-offs		—		(6)		—		—		—		(11)		—		(17)

Total
Current period charge-offs		(17)		(803)		(2,888)		(1,116)		(381)		(96)		(19,619)		(24,920)
Current period recoveries		—		46		177		92		71		162		1,877		2,425
Current period net charge-offs	$	(17)	$	(757)	$	(2,711)	$	(1,024)	$	(310)	$	66	$	(17,742)	$	(22,495)

The Company did not have loans acquired with deteriorated credit quality at either June 30, 2025 or December 31, 2024. In the first six months of 2025, the Company purchased $19.8 million of SBLs, none of which were credit deteriorated. Additionally, in the first six months of 2025, the Company participated in SBLs with other institutions in the amount of $4.7 million.

The non-accrual loans in the following table are treated as collateral dependent to the extent they have resulted from borrower financial difficulty (and not from administrative delays or other mitigating factors) and are not brought current. For non-accrual loans, the Company establishes a reserve in the allowance for credit losses for deficiencies between estimated collateral and loan carrying values. During the six months ended June 30, 2025, the Company did not have any significant changes to the extent to which collateral secures

its collateral dependent loans due to general collateral deterioration or from other factors. SBL non-real estate are collateralized by business assets, which may include certain real estate. SBL commercial mortgage and construction are collateralized by real estate for small businesses, while real estate bridge lending is primarily collateralized by apartment buildings, or other commercial real estate. SBLOC is collateralized by marketable investment securities while IBLOC is collateralized by the cash value of life insurance. Advisor financing is collateralized by investment advisors’ business franchises. Direct lease financing is collateralized primarily by vehicles or equipment.

A detail of the Company’s delinquent loans by loan category is as follows (dollars in thousands):



	June 30, 2025
	30-59 days		60-89 days		90+ days				Total past due				Total
	past due		past due		still accruing		Non-accrual		and non-accrual		Current		loans
SBL non-real estate	$	—	$	—	$	—	$	5,976	$	5,976	$	198,111	$	204,087
SBL commercial mortgage		—		3,012		—		8,340		11,352		712,402		723,754
SBL construction		—		—		—		2,892		2,892		27,813		30,705
Direct lease financing		9,201		3,727		307		7,236		20,471		677,615		698,086
SBLOC / IBLOC		13,944		386		135		469		14,934		1,586,471		1,601,405
Advisor financing		—		—		—		—		—		272,155		272,155
Real estate bridge loans⁽¹⁾		—		—		—		36,677		36,677		2,103,362		2,140,039
Consumer fintech		18,930		1,113		434		—		20,477		660,010		680,487
Other loans		2		61		7		—		70		169,875		169,945
Unamortized loan fees and costs		—		—		—		—		—		14,769		14,769
	$	42,077	$	8,299	$	883	$	61,590	$	112,849	$	6,422,583	$	6,535,432

⁽¹⁾In the second quarter of 2025, a $26.9 million loan balance was transferred to non-accrual status. The loan is secured by an apartment building with an “as is” LTV of 75% and an “as stabilized” LTV of 65%, based on a December 2024 appraisal. On July 31, 2025, a purchase and sale agreement for the property was executed with a new counterparty possessing greater financial capacity and experience. The sale is expected to close in the third quarter of 2025, and a new loan is anticipated in connection with the transaction. The table above does not include an $11.2 million loan accounted for at fair value, and, as such, not reflected in delinquency tables. In third quarter 2024, the borrower notified the Company that he would no longer be making payments on the loan, which is collateralized by a vacant retail property. Based upon a July 2024 appraisal, the “as is” LTV is 84% and the “as stabilized” LTV is 62%. The borrower is attempting to sell the property as the source of repayment for the loan. However, there can be no assurance that any such sale will be consummated. Since 2021, real estate bridge lending originations have consisted of apartment buildings, while this loan was originated previously.



	December 31, 2024
	30-59 days		60-89 days		90+ days				Total past due				Total
	past due		past due		still accruing		Non-accrual		and non-accrual		Current		loans
SBL non-real estate	$	229	$	—	$	871	$	2,635	$	3,735	$	186,587	$	190,322
SBL commercial mortgage		—		—		336		4,885		5,221		656,870		662,091
SBL construction		—		—		—		1,585		1,585		33,100		34,685
Direct lease financing		7,069		1,923		1,088		6,026		16,106		684,447		700,553
SBLOC / IBLOC		20,991		1,808		3,322		503		26,624		1,537,394		1,564,018
Advisor financing		—		—		—		—		—		273,896		273,896
Real estate bridge loans		—		—		—		12,300		12,300		2,096,741		2,109,041
Consumer fintech		13,419		681		213		—		14,313		440,044		454,357
Other loans		49		—		—		—		49		111,279		111,328
Unamortized loan fees and costs		—		—		—		—		—		13,337		13,337
	$	41,757	$	4,412	$	5,830	$	27,934	$	79,933	$	6,033,695	$	6,113,628

The scheduled maturities of the direct financing leases reconciled to the total lease receivables in the consolidated balance sheet, are as follows (dollars in thousands):


Remaining 2025	$	121,181
2026		184,995
2027		150,570
2028		76,365
2029		35,601
2030 and thereafter		10,034
Total undiscounted cash flows		578,746
Residual value⁽¹⁾		217,357
Difference between undiscounted cash flows and discounted cash flows		(98,017)
Present value of lease payments recorded as lease receivables	$	698,086

⁽¹⁾Of the $217,357,000, $46,186,000 is not guaranteed by the lessee or other guarantors.

Note 7. Transactions with Affiliates

The Bank did not maintain any deposits for various affiliated companies as of June 30, 2025 and December 31, 2024, respectively.

The Bank has entered into lending transactions in the ordinary course of business with directors, executive officers, principal stockholders and affiliates of such persons. All loans were made on substantially the same terms, including interest rate and collateral, as those prevailing at the time for comparable loans with persons not related to the lender. At June 30, 2025, these loans were current as to principal and interest payments and did not involve more than normal risk of collectability. Loans to these related parties amounted to $5.8 million at June 30, 2025 and $6.9 million at December 31, 2024.

Mr. Hersh Kozlov, a director of the Company, is a partner at Duane Morris LLP, an international law firm. The Company did not pay Duane Morris LLP for legal services for the six months ended June 30, 2025. The Company paid Duane Morris LLP $4,800 for legal services for the six months ended June 30, 2024.

Note 8. Fair Value Measurements

ASC 825, Financial Instruments, requires disclosure of the estimated fair value of an entity’s assets and liabilities considered to be financial instruments. For the Company, as for most financial institutions, the majority of its assets and liabilities are considered to be financial instruments. However, many such instruments lack an available trading market as characterized by a willing buyer and willing seller engaging in an exchange transaction. Accordingly, estimated fair values are determined by the Company using the best available data and an estimation methodology it believes to be suitable for each category of financial instruments. Also, it is the Company’s general practice and intent to hold its financial instruments to maturity whether or not categorized as available-for-sale and not to engage in trading or sales activities although it has sold loans and securities in the past and may do so in the future. For fair value disclosure purposes, the Company utilized certain value measurement criteria required in accordance with ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), as discussed below. In addition, ASC 820 establishes a common definition for fair value to be applied to assets and liabilities. It clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It also establishes a framework for measuring fair value and expands disclosures concerning fair value measurements. ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Level 1 valuation is based on quoted market prices for identical assets or liabilities to which the Company has access at the measurement date. Level 2 valuation is based on other observable inputs for the asset or liability, either directly or indirectly. This includes quoted prices for similar assets in active or inactive markets, inputs other than quoted prices that are observable for the asset or liability such as yield curves, volatilities, prepayment speeds, credit risks, default rates, or inputs that are derived principally from, or corroborated through, observable market data by market-corroborated reports. Level 3 valuation is based on “unobservable inputs” which the Company believes is the best information available in the circumstances. A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

Changes in the assumptions or methodologies used to estimate fair values may materially affect the estimated amounts. Also, there may not be reasonable comparability between institutions due to the wide range of permitted assumptions and methodologies in the absence of active markets. This lack of uniformity gives rise to a high degree of subjectivity in estimating financial instrument fair values.

Cash and cash equivalents, which are comprised of cash and due from banks and the Company’s balance at the Federal Reserve Bank, had recorded values of $340.3 million and $570.1 million as of June 30, 2025 and December 31, 2024, respectively, which approximated fair values.

The estimated Level 2 fair values of investment securities are based on quoted market prices, if available, or estimated independently by a third-party pricing service based upon their matrix pricing technique. Level 3 investment security fair values are based on the present valuing of cash flows, which discounts expected cash flows from principal and interest using yield to maturity, or yield to call as appropriate, at the measurement date. In the second quarter of 2025 and 2024, there were no transfers between the three levels.

Federal Reserve, FHLB, and ACBB stock, are held as required by those respective institutions and are carried at cost. Each of these institutions require their members to hold stock as a condition of membership. While a fixed stock amount is required by each of these institutions, the FHLB stock requirement periodically increases or decreases with varying levels of borrowing activity.

Commercial loans held at fair value are comprised primarily of commercial real estate bridge loans and SBA loans which had been originated for sale or securitization in the secondary market, and which are now being held on the balance sheet. Commercial real estate bridge loans and SBA loans are valued using a discounted cash flow analysis based upon pricing for similar loans where market indications of the sales price of such loans are not available. SBA loans are valued on a pooled basis and commercial real estate bridge loans are valued individually.

Loans, net have an estimated fair value using the present value of future cash flows. The discount rate used in these calculations is the estimated current market rate adjusted for credit risk. Accrued interest receivable has a carrying value that approximates fair value.

Loan fair values are based on “unobservable inputs” that are based on available information. Level 3 fair values are based on the present value of cash flows by unit of measurement.

The credit enhancement asset has a carrying value that approximates fair value.

For OREO, market value is based upon appraisals of the underlying collateral by third-party appraisers, reduced by 7% to 10% for estimated selling costs.

The estimated fair values of demand deposits (comprised of interest and non-interest-bearing checking accounts, savings accounts, and certain types of money market accounts) are equal to the amount payable on demand at the reporting date (generally, their carrying amounts). The fair values of securities sold under agreements to repurchase and short-term borrowings, when outstanding, are equal to their carrying amounts as they are short-term borrowings.

Time deposits, when outstanding, senior debt and subordinated debentures have a fair value estimated using a discounted cash flow calculation that applies current interest rates to discount expected cash flows. The carrying amount of accrued interest payable approximates its fair value. Long term borrowings resulting from sold loans which did not qualify for true sale accounting are presented in the amount of the principal of such loans.

The fair values of interest rate swaps, recorded in other assets or other liabilities, are determined using models that use readily observable market inputs and a market standard methodology applied to the contractual terms of the derivatives, including the period to maturity and interest rate indices.

The fair value of commitments to extend credit is estimated based on the amount of unamortized deferred loan commitment fees. The fair value of letters of credit is based on the amount of unearned fees plus the estimated cost to terminate the letters of credit. Fair values of unrecognized financial instruments, including commitments to extend credit, and the fair value of letters of credit are considered immaterial.

The following tables provide information regarding carrying amounts and estimated fair values (dollars in thousands) as of the dates indicated:



	June 30, 2025
					Quoted prices in		Significant other		Significant
					active markets for		observable		unobservable
	Carrying		Estimated		identical assets		inputs		inputs
	amount		fair value		(Level 1)		(Level 2)		(Level 3)
Investment securities, available-for-sale	$	1,481,500	$	1,481,500	$	—	$	1,481,500	$	—
Federal Reserve, FHLB and ACBB stock		16,250		16,250		—		—		16,250
Commercial loans, at fair value		185,476		185,476		—		—		185,476
Loans, net of deferred loan fees and costs		6,535,432		6,496,669		—		—		6,496,669
Accrued interest receivable		40,607		40,607		—		40,607		—
Credit enhancement asset		26,982		26,982		—		26,982		—
Demand and interest checking		7,705,813		7,705,813		—		7,705,813		—
Savings and money market		60,122		60,122		—		60,122		—
Senior debt		96,391		96,005		—		96,005		—
Subordinated debentures		13,401		11,321		—		—		11,321
Other long-term borrowings		13,898		13,898		—		13,898		—
Accrued interest payable		2,491		2,491		—		2,491		—



	December 31, 2024
					Quoted prices in		Significant other		Significant
					active markets for		observable		unobservable
	Carrying		Estimated		identical assets		inputs		inputs
	amount		fair value		(Level 1)		(Level 2)		(Level 3)
Investment securities, available-for-sale	$	1,502,860	$	1,502,860	$	—	$	1,499,398	$	3,462
Federal Reserve, FHLB and ACBB stock		15,642		15,642		—		—		15,642
Commercial loans, at fair value		223,115		223,115		—		—		223,115
Loans, net of deferred loan fees and costs		6,113,628		5,998,293		—		—		5,998,293
Accrued interest receivable		41,713		41,713		—		41,713		—
Credit enhancement asset		12,909		12,909		—		12,909		—
Demand and interest checking		7,434,212		7,434,212		—		7,434,212		—
Savings and money market		311,834		311,834		—		311,834		—
Senior debt		96,214		99,000		—		99,000		—
Subordinated debentures		13,401		11,320		—		—		11,320
Other long-term borrowings		14,081		14,081		—		14,081		—
Accrued interest payable		2,612		2,612		—		2,612		—

Other assets and liabilities measured at fair value on a recurring basis, segregated by fair value hierarchy, are summarized below (dollars in thousands) as of the dates indicated:



			Fair Value Measurements at Reporting Date Using
			Quoted prices in		Significant other		Significant
				active markets for	observable		unobservable
	Fair value		identical assets		inputs		inputs
		June 30, 2025	(Level 1)		(Level 2)		(Level 3)
Investment securities, available-for-sale
U.S. Government agency securities	$	27,034	$	—	$	27,034	$	—
Asset-backed securities		242,507		—		242,507		—
Obligations of states and political subdivisions		39,925		—		39,925		—
Residential mortgage-backed securities		419,117		—		419,117		—
Collateralized mortgage obligation securities		21,800		—		21,800		—
Commercial mortgage-backed securities		731,117		—		731,117		—
Total investment securities, available-for-sale		1,481,500		—		1,481,500		—
Commercial loans, at fair value		185,476		—		—		185,476
Credit enhancement asset		26,982		—		26,982		—
	$	1,693,958	$	—	$	1,508,482	$	185,476



			Fair Value Measurements at Reporting Date Using
			Quoted prices in		Significant other		Significant
				active markets for	observable		unobservable
	Fair value		identical assets		inputs		inputs
		December 31, 2024	(Level 1)		(Level 2)		(Level 3)
Investment securities, available-for-sale
U.S. Government agency securities	$	29,962	$	—	$	29,962	$	—
Asset-backed securities		214,499		—		214,499		—
Obligations of states and political subdivisions		35,620		—		35,620		—
Residential mortgage-backed securities		433,419		—		433,419		—
Collateralized mortgage obligation securities		26,152		—		26,152		—
Commercial mortgage-backed securities		763,208		—		759,746		3,462
Total investment securities, available-for-sale		1,502,860		—		1,499,398		3,462
Commercial loans, at fair value		223,115		—		—		223,115
Credit enhancement asset		12,909		—		12,909		—
	$	1,738,884	$	—	$	1,512,307	$	226,577

The Company’s year-to-date Level 3 asset activity for the categories shown are summarized below (dollars in thousands):



	Fair Value Measurements Using
	Significant Unobservable Inputs
	(Level 3)

	Available-for-sale				Commercial loans,
	securities				at fair value
	June 30, 2025		December 31, 2024		June 30, 2025		December 31, 2024
Beginning balance	$	3,462	$	12,071	$	223,115	$	332,766
Transfers to OREO		—		—		—		(2,863)
Total net (losses) or gains (realized/unrealized)
Included in earnings		—		—		705		3,016
Included in other comprehensive (loss) income		(360)		503		—		—
Purchases, advances, sales and settlements
Advances		—		—		2,953		—
Settlements		(3,102)		(9,112)		(41,297)		(109,804)
Ending balance	$	—	$	3,462	$	185,476	$	223,115

Total losses year-to-date included
in earnings attributable to the change in
unrealized gains or losses relating to assets still
held at the reporting date as shown above.	$	—	$	—	$	—	$	(683)

The Company’s year-to-date OREO activity is summarized below (dollars in thousands) as of the dates indicated:


	June 30, 2025		December 31, 2024
Beginning balance	$	62,025	$	16,949
Transfer from loans, net		2,273		42,120
Transfer from commercial loans, at fair value		—		2,863
Advances		1,756		1,695
Sales		—		(1,602)
Ending balance	$	66,054	$	62,025

Information related to fair values of Level 3 balance sheet categories is as follows (dollars in thousands):

Level 3 instruments only

Weighted

Fair value at

Range at

average at

June 30, 2025

Valuation techniques

Unobservable inputs

June 30, 2025

Commercial - SBA⁽¹⁾

76,830

Discounted cash flow

Discount rate

6.44%

Non-SBA commercial real estate⁽²⁾

108,646

Discounted cash flow and appraisal

Discount rate

6.50%-9.75%

7.79%

Commercial loans, at fair value

185,476

OREO⁽³⁾

66,054

Appraised value

N/A


		Level 3 instruments only
						Weighted
	Fair value at				Range at	average at
	December 31, 2024		Valuation techniques	Unobservable inputs	December 31, 2024	December 31, 2024
Commercial mortgage-backed investment
security	$	3,462	Discounted cash flow	Discount rate	9.45%	9.45%

Commercial - SBA		89,902	Discounted cash flow	Discount rate	6.77%	6.77%
Non-SBA commercial real estate		133,213	Discounted cash flow and appraisal	Discount rate	6.80%-11.50%	8.77%
Commercial loans, at fair value		223,115

OREO		62,025	Appraised value	N/A	N/A	N/A

The valuations for each of the instruments above, as of the balance sheet date, are subject to judgments, assumptions and uncertainties, changes in which could have a significant impact on such valuations. Weighted averages were calculated by using the discount rate for each individual security or loan weighted by its market value, except for SBA loans. For SBA loans, the yield derived from market pricing indications for comparable pools determined by date of loan origination. For commercial loans recorded at fair value, changes in fair value are reflected in the income statement. Changes in the fair value of securities which are unrelated to credit are recorded through equity. Changes in the fair value of loans recorded at amortized cost which are unrelated to credit are a disclosure item, without impact on the financial statements. The notes below refer to the June 30, 2025 table.

⁽¹⁾ Commercial – SBA Loans are comprised of the government guaranteed portion of SBA-insured loans. Their valuation is based upon the yield derived from dealer pricing indications for guaranteed pools, adjusted for seasoning and prepayments. A limited number of broker-dealers originate the pooled securities for which the loans are purchased and as a result, prices can fluctuate based on such limited market demand, although the government guarantee has resulted in consistent historical demand. Valuations are impacted by prepayment assumptions resulting from both voluntary payoffs and defaults. Such assumptions for these seasoned loans are based on a seasoning vector for constant prepayment rates from 3% to 30% over life.

⁽²⁾ Non-SBA commercial real estate – These loans are primarily bridge loans designed to provide property owners time and funding for property improvements. They are fair valued by a third party, based upon discounting at market rates for similar loans. Discount rates used in applying discounted cash flow analysis utilize input based upon loan terms, the general level of interest rates and the quality of the credit. Deterioration in loan performance or other credit weaknesses could result in fair value ranges which would be dependent upon potential buyers’ tolerance for such weaknesses and are difficult to estimate.

⁽³⁾ For OREO, fair value is based upon appraisals of the underlying collateral by third-party appraisers, reduced by 7% to 10% for estimated selling costs. Such appraisals reflect estimates of amounts realizable upon property sales based on the sale of comparable properties and other factors. Actual sales prices may vary based upon the identification of potential purchasers, changing conditions in local real estate markets and the level of interest rates required to finance purchases.

Assets measured at fair value on a nonrecurring basis, segregated by fair value hierarchy, during the periods shown are summarized below (dollars in thousands). The non-accrual loans in the following table are treated as collateral dependent to the extent they have resulted from borrower financial difficulty (and not from administrative delays or other mitigating factors) and are not brought current. For non-accrual loans, the Company establishes a reserve in the allowance for credit losses for deficiencies between estimated collateral and loan carrying values.



			Fair Value Measurements at Reporting Date Using
			Quoted prices in active		Significant other		Significant
			markets for identical		observable		unobservable
	Fair value		assets		inputs		inputs⁽¹⁾
Description	June 30, 2025		(Level 1)		(Level 2)		(Level 3)
Collateral dependent loans with specific reserves⁽¹⁾	$	12,951	$	—	$	—	$	12,951
OREO		66,054		—		—		66,054
	$	79,005	$	—	$	—	$	79,005



			Fair Value Measurements at Reporting Date Using
			Quoted prices in active		Significant other		Significant
			markets for identical		observable		unobservable
	Fair value		assets		inputs		inputs⁽¹⁾
Description	December 31, 2024		(Level 1)		(Level 2)		(Level 3)
Collateral dependent loans with specific reserves⁽¹⁾	$	6,587	$	—	$	—	$	6,587
OREO		62,025		—		—		62,025
	$	68,612	$	—	$	—	$	68,612

⁽¹⁾The method of valuation approach for the loans evaluated for an allowance for credit losses on an individual loan basis and also for OREO was the market approach based upon appraisals of the underlying collateral by external appraisers, reduced by 7% to 10% for estimated selling costs.

At June 30, 2025, principal on collateral dependent loans, which is accounted for on the basis of the value of underlying collateral, is shown at an estimated fair value of $13.0 million. To arrive at that fair value, related loan principal of $17.8 million was reduced by specific reserves of $4.8 million within the ACL as of that date, representing the deficiency between principal and estimated collateral values, which were reduced by estimated costs to sell. When the deficiency is deemed uncollectible, it is charged off by reducing the specific reserve and decreasing principal. Valuation techniques consistent with the market and/or cost approach were used to measure fair value and primarily included observable inputs for the individual loans being evaluated such as recent sales of similar collateral or observable market data for operational or carrying costs. In cases where such inputs were unobservable, the loan balance is reflected within the Level 3 hierarchy.

Note 9. Other Identifiable Intangible Assets

In May 2016, the Company purchased approximately $60.0 million of lease receivables which resulted in a customer list intangible of $3.4 million that is being amortized over a ten-year period. Amortization expense is $340,000 per year ($284,000 over the next two years). The gross carrying amount of the customer list intangible is $3.4 million, and as of June 30, 2025, and December 31, 2024, respectively, the accumulated amortization expense was $3.1 million and $3.0 million.

In January 2020, the Company purchased McMahon Leasing and subsidiaries for approximately $8.7 million which resulted in $1.1 million of intangibles. The gross carrying value of $1.1 million of intangibles was comprised of a customer list intangible of $689,000, goodwill of $263,000 and a trade name valuation of $135,000. The customer list intangible is being amortized over a twelve-year period and accumulated amortization expense was $316,000 at June 30, 2025 and $287,000 at December 31, 2024. Amortization expense is $57,000 per year ($287,000 over the next five years). The gross carrying value and accumulated amortization related to the Company’s intangibles at June 30, 2025 and December 31, 2024 are presented below:


		June 30,				December 31,
		2025				2024
		Gross				Gross
		Carrying		Accumulated		Carrying		Accumulated
		Amount		Amortization		Amount		Amortization
		(Dollars in thousands)

Customer list intangibles	$	4,093	$	3,436	$	4,093	$	3,237
Goodwill		263		—		263		—
Trade Name		135		—		135		—
Total	$	4,491	$	3,436	$	4,491	$	3,237

Note 10. Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures. ASU 2023-09, effective January 1, 2025, adds annual disclosures for the amount of income taxes paid, net of refunds, shown separately for federal, state and foreign taxes. Total tax paid, net of refunds, for any jurisdictions which exceed 5% of total net taxes paid, will also be shown separately. The Company is currently evaluating these disclosures.

In November 2024, the FASB issued ASU 2024-03, which requires entities to disclose disaggregated information about certain income statement expense line items in the notes to their financial statements on an annual and interim basis. Subsequently, in January 2025, the FASB issued ASU 2025-01—Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, making ASU 2024-03 effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, on a retrospective or prospective basis, with early adoption permitted. The Company is currently evaluating this update to determine the impact on the Company’s disclosures.

Note 11. Shareholders’ Equity

On October 26, 2023, the Board approved a common stock repurchase program for the 2024 fiscal year (the “2024 Repurchase Program”). Under the 2024 Repurchase Program, the Company repurchased $250.0 million in value of the Company’s common stock in 2024.

On October 23, 2024, the Board approved a common stock repurchase program for the 2025 fiscal year (the “2025 Repurchase Program”), which authorizes the Company to repurchase $37.5 million in value of the Company’s common stock per fiscal quarter in 2025, for a maximum amount of $150.0 million. Under the 2025 Repurchase Program, the Company intends to repurchase shares through open market purchases, privately-negotiated transactions, block purchases or otherwise in accordance with applicable federal securities laws, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The 2025 Repurchase Program may be modified or terminated at any time. During the three and six months ended June 30, 2025, the Company repurchased 753,898 and 1,438,343 shares of its common stock in the open market under the 2025 Repurchase Program at an average price of $49.75 per share and $52.15 per share, respectively. On July 7, 2025, the Board of the Company authorized the increase of the capacity of the Company’s existing share repurchase program for the third and fourth quarters of 2025 to $300 million and $200 million for 2026 (the “Repurchase Plan”). This increase cumulatively represents up to $500 million in share repurchases through year-end 2026.

As a means of returning capital to shareholders, the Company implemented the stock repurchase programs described above. The planned amounts of repurchases are generally determined in the fourth quarter of the preceding year by assessing the impact of budgetary earnings projections on regulatory capital requirements. The excess of projected earnings over amounts required to maintain capital requirements is the maximum available for capital return to shareholders, barring any need to retain capital for other purposes. A significant portion of such excess earnings has been utilized for stock repurchases in the amounts noted above, while cash dividends have not been paid. In determining whether capital is returned through stock repurchases or cash dividends, the Company calculates a maximum share repurchase price, based upon comparisons with what it concludes to be other exemplar peer share price valuations, with further consideration of internal growth projections. As these share prices, which are updated at least annually, have not been reached, capital return has consisted solely of stock repurchases. Exemplar share price comparisons are based upon multiples of earnings per share over time, with further consideration of returns on equity and assets. While repurchase amounts are planned in the fourth quarter of the preceding year, repurchases may be modified or terminated at any time, should capital need to be conserved.

Note 12. Regulatory Matters

It is the policy of the Federal Reserve that financial holding companies should pay cash dividends on common stock only out of income available over the past year and only if prospective earnings retention is consistent with the organization’s expected future needs and financial condition. The policy provides that a financial holding company should not maintain a level of cash dividends that undermines the financial holding company’s ability to serve as a source of strength to its banking subsidiaries.

Various federal and state statutory provisions limit the amount of dividends that subsidiary banks can pay to their holding companies without regulatory approval. Without the prior approval of the OCC, a dividend may not be paid if the total of all dividends declared by a bank in any calendar year is in excess of the current year’s net income combined with the retained net income of the two preceding years. Additionally, a dividend may not be paid in excess of a bank’s retained earnings. Moreover, an insured depository institution may not pay a dividend if the payment would cause it to be less than “adequately capitalized” under the prompt corrective action framework as defined in the Federal Deposit Insurance Act or if the institution is in default in the payment of an assessment due to the FDIC. Similarly, a banking organization that fails to satisfy regulatory minimum capital conservation buffer requirements will be subject to certain limitations, which include restrictions on capital distributions.

In addition to these explicit limitations, federal and state regulatory agencies are authorized to prohibit a banking subsidiary or financial holding company from engaging in an unsafe or unsound practice. Depending upon the circumstances, the agencies could take the position that paying a dividend would constitute an unsafe or unsound banking practice.

The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification of the Company and the Bank are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Moreover, capital requirements may be modified based upon regulatory rules or by regulatory discretion at any time reflecting a variety of factors including deterioration in asset quality.

The following table sets forth our regulatory capital amounts and ratios for the periods indicated:



	Tier 1 capital	Tier 1 capital	Total capital	Common equity
	to average	to risk-weighted	to risk-weighted	Tier 1 to risk
	assets ratio	assets ratio	assets ratio	weighted assets

As of June 30, 2025
The Bancorp, Inc.	9.40%	14.42%	15.45%	14.42%
The Bancorp Bank, National Association	10.33%	15.80%	16.83%	15.80%
"Well capitalized" institution (under federal regulations-Basel III)	5.00%	8.00%	10.00%	6.50%

As of December 31, 2024
The Bancorp, Inc.	9.41%	13.85%	14.65%	13.85%
The Bancorp Bank, National Association	10.38%	15.25%	16.06%	15.25%
"Well capitalized" institution (under federal regulations-Basel III)	5.00%	8.00%	10.00%	6.50%

Note 13. Legal

The Delaware FCRA Matter. On June 12, 2019, the Bank was served with a qui tam lawsuit filed in the Superior Court of the State of Delaware, New Castle County. The Delaware Department of Justice intervened in the litigation. The case is titled The State of Delaware, Plaintiff, Ex rel. Russell S. Rogers, Plaintiff-Relator v. The Bancorp Bank, Interactive Communications International, Inc., and InComm Financial Services, Inc., Defendants. The lawsuit alleges that the defendants violated the Delaware False Claims and Reporting Act by not paying balances on certain open-loop “Vanilla” prepaid cards to the State of Delaware as unclaimed property. The complaint seeks actual and treble damages, statutory penalties, and attorneys’ fees. The Bank has filed an answer denying the allegations and continues to vigorously defend against the claims. The Bank and other defendants previously filed a motion to dismiss the action, but that motion to dismiss was denied and the parties were engaged in the first phase of discovery. On March 25, 2025, the State of Delaware filed a motion to dismiss the lawsuit without prejudice, purportedly due to a related administrative proceeding commenced by or on behalf of the State of Delaware Office of Unclaimed Property. Briefing on the State of Delaware’s motion to dismiss without prejudice is ongoing and the first phase of discovery is currently stayed pending a decision on that motion to dismiss. The Company is not yet able to determine whether the ultimate resolution of the matter will have a material adverse effect on the Company’s financial condition or operations.

The Cachet Matter. On September 14, 2021, Cachet Financial Services (“Cachet”) filed an adversary proceeding against the Bank in the U.S. Bankruptcy Court for the Central District of California, titled Cachet Financial Services, Plaintiff v. The Bancorp Bank, et al., Defendants. The case was filed within the context of Cachet’s pending Chapter 11 bankruptcy case. The Bank previously served as the

Originating Depository Financial Institution (“ODFI”) for ACH transactions in connection with Cachet’s payroll services business. The matter arises from the Bank’s termination of its Payroll Processing ODFI Agreement with Cachet on October 23, 2019, for safety and soundness reasons. The initial complaint alleges eight causes of action: (i) breach of contract; (ii) negligence; (iii) intentional interference with contract; (iv) conversion; (v) express indemnity; (vi) implied indemnity; (vii) accounting; and (viii) objection to the Bank’s proof of claim in the bankruptcy case. On November 4, 2021, the Bank filed a motion in the U.S. District Court for the Central District of California to withdraw the reference of the adversary proceeding to the bankruptcy court, which was denied in February 2023. On August 3, 2022, Cachet served the Bank with a first amended complaint wherein Cachet, among other things, withdrew its implied indemnity claim against the Bank and added several defendants unaffiliated with the Bank and causes of action related to those parties. The Bank is vigorously defending against these claims. On September 28, 2022, the Bank filed a partial motion to dismiss, seeking to dispose of the majority of Cachet’s claims against the Bank. On September 12, 2024, the Bank’s partial motion to dismiss, seeking to dispose of the majority of Cachet’s claims, was denied on procedural grounds and without reaching the issues the Bank raised in its partial motion to dismiss. On October 31, 2024, Cachet filed its second amended complaint, which as related to the Bank, is substantially similar to the first amended complaint; however, the second amended complaint seeks only “damages in amount to be proven at trial” whereas the first amended complaint sought “damages in amount to be proven but in no event less than $150 million.” The Bank is vigorously defending against the second amended complaint. In furtherance of such a defense, on December 17, 2024, the Bank filed its partial motion to dismiss the second amended complaint, which was granted in part and denied in part on May 2, 2025. Specifically, Cachet’s negligence claim, conversion claim, and accounting claim were dismissed with prejudice. The Company is not yet able to determine whether the ultimate resolution of this matter will have a material adverse effect on the Company’s financial conditions or operations.

The CFPB CID Matter. On March 27, 2023, the Bank received a Civil Investigative Demand (“CID”) from the Consumer Financial Protection Bureau (“CFPB”) seeking documents and information related to the Bank’s escheatment practices in connection with certain accounts offered through one of the Bank’s program partners. The Bank continues to cooperate with the CFPB, including by responding to the CID. While the Company remains confident in the Bank’s escheatment practices, it cannot predict the timing or final outcome of the investigation. Future costs related to this matter may be material and could continue to be material at least through the completion of the investigation.

The City Attorney of San Francisco Matter. On November 21, 2023, TBBK Card Services, Inc. (“TBBK Card”), a wholly owned subsidiary of the Bank, was served with a complaint filed in the Superior Court of the State of California, captioned People of the State of California, acting by and through San Francisco City Attorney David Chiu, Plaintiff v. InComm Financial Services, Inc., TBBK Card Services, Inc., Sutton Bank, Pathward, N.A., and Does 1-10, Defendants. The complaint principally alleges that the defendants engaged in unlawful, unfair, or fraudulent business acts and practices related to the packaging of “Vanilla” prepaid cards and the refund process for unauthorized transactions that occurred due to card draining practices. On December 14, 2023, the case was removed to the U.S. District Court for the Northern District of California. On March 26, 2024, the case was remanded to the Superior Court of the State of California. TBBK Card is vigorously defending against the claims. On May 6, 2024, TBBK Card filed a motion to quash service of summons as to TBBK Card for lack of personal jurisdiction. On April 22, 2025, the Superior Court issued an order denying TBBK Card’s motion to quash service of the summons and also denying the other defendants’ motions to quash service of the summons. On May 6, 2025, TBBK Card filed its petition for writ of mandate in the Court of Appeal, First Appellate District, Division One of the State of California in order to appeal the Superior Court’s decision to deny the motion to quash the summons. As of June 30, 2025, briefing on the petition for writ of mandate had been completed and a decision remained pending. The Company is not yet able to determine whether the ultimate resolution of this matter will have a material adverse effect on the Company’s financial conditions or operations.

The Oxygen Matter. On November 25, 2024, the Bank commenced arbitration through the American Arbitration Association seeking approximately $1.808 million from Oxygen, Inc. (“Oxygen”) owed under the Private Label Account Program Agreement related to unpaid invoices and indemnification obligations owed by Oxygen. On January 13, 2025, Oxygen answered the Bank’s arbitration demand, generally denying the allegation made by the Bank, and filed its Counterclaim against the Bank. The Counterclaim alleges (i) that the termination of the Private Label Account Program Agreement was pretextual, (ii) the Bank breached its notification obligations in terminating Private Label Account Program Agreement, (iii) the Bank breached the implied covenant of good faith and fair dealing, and (iv) conversion of $1.2 million by the Bank. The ad damnum clause of the Counterclaim also seeks compensatory damages not less than $40 million. The Bank believes it has meritorious defenses and intends to vigorously defend against the Counterclaim. The Company is not yet able to determine whether the ultimate resolution of this matter will have a material adverse effect on the Company’s financial conditions or operations.

The Putative Securities Class Action Matter. On March 14, 2025, Nathan Linden filed a putative securities class action complaint captioned Nathan Linden v. The Bancorp, Inc., et al. in the U.S. District Court for the District of Delaware against the Company and certain of its current and former officers. The complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder and purports to assert a class action on behalf of persons and entities that purchased or otherwise acquired Company securities between January 25, 2024 and March 4, 2025. The complaint alleges, among other things, that the defendants made false statements and omissions about the Company’s business, prospects, and operations, with focus on the Company’s commercial real estate bridge loan portfolio and related provision for credit losses. The named plaintiff seeks unspecified damages, fees, interest, and costs. The Company intends to vigorously defend against the allegations in the complaint. The

Company is not yet able to determine whether the ultimate resolution of the matter will have a material adverse effect on the Company’s financial condition or operations.

The OREO Escrow Dispute. As previously disclosed in prior filed current reports of Form 8-K, the majority of the Bank’s “Other Real Estate Owned” property is comprised of an apartment complex. The underlying balance for this property is $42.9 million as of June 30, 2025. As previously disclosed, the property was under an agreement of sale. On June 24, 2025, the relevant Bank subsidiary, TBB Crescent Park Drive, LLC (“TBB Crescent”), terminated the agreement of sale for the property and demanded the escrow agent release to TBB Crescent all earnest money deposits received to date, totaling $3.0 million. On June 26, 2025, without providing any legal or contractual basis to do so, the purchaser objected to the release of the earnest money deposits. On July 11, 2025, TBB Crescent filed a complaint in the U.S. District Court for the Southern District of Texas seeking a declaratory judgment that it is the party entitled to the earnest money deposits. The Company, through TBB Crescent, intends to vigorously pursue this litigation and to defend against any allegations or claims that may be brought through a counterclaim or otherwise. The Company is not yet able to determine whether the ultimate resolution of the matter will have a material adverse effect on the Company’s financial condition or operations.

In addition, we are a party to various routine legal proceedings arising out of the ordinary course of our business. Management believes that none of these actions, individually or in the aggregate, will have a material adverse effect on our financial condition or operations.

Note 14. Segment Financials

The Company’s operations can be classified under three segments: fintech, specialty finance (three sub-segments) and corporate. The chief operating decision maker for these segments is the Chief Executive Officer. The fintech segment includes the deposit balances and non-interest income generated by prepaid, debit and other card accessed accounts, ACH proccessing and other payments related processing. It also includes loan balances and interest and non-interest income from credit products generated through payment relationships. Specialty finance includes: (i) REBL (real estate bridge lending) comprised primarily of apartment building rehabilitation loans (ii) institutional banking comprised primarily of security-backed lines of credit, cash value insurance policy-backed lines of credit and advisor financing and (iii) commercial loans comprised primarily of SBA loans and direct lease financing. It also includes deposits generated by those business lines. Corporate includes the Company’s investment securities, corporate overhead and expenses which have not been allocated to segments. Expenses not allocated include certain management, board oversight, administrative, legal, IT and technology infrastructure, human resouces, audit, regulatory and CRA, finance and accounting, marketing and other corporate expenses.

In the segment reporting below, a non-GAAP subtotal is shown, captioned “Income before non-interest expense allocation”. That subtotal presents an income subotal before consideration of allocated corporate expenses which might be fixed, semi-fixed or otherwise resist changes without regard to a particular line of business. It also reflects a market-based allocation of interest expense to financing segments which utilize funding from deposits generated by the fintech segment, which earns offsetting interest income. That allocation is shown in the “Interest allocation” line item. The rate utilized for the allocation corresponds to an estimated average of the three year FHLB rate. The fintech segment interest expense line item consists of interest expense actually incurred to generate its deposits, which is the Company’s actual cost of funds. That actual cost is allocated to the corporate segment which requires funding for the Company’s investment securities portfolio.

The more significant non-interest expense categories correspond to the Company’s consolidated statements of operations and include salaries and employee benefits, data processing and software expenses that are incurred directly by those segments. Expenses incurred by departments which provide support services to the segments also include those categories of expense and others which are allocated to segments based on estimated usage. Those support department allocations are reflected in the “Risk, financial crimes and compliance” and “Information technology and operations” line items. Other expenses not shown separately are monitored for purposes of expense management, but, unless atypically high, are ordinarily of lesser significance than the categories noted above.

For the fintech segment, deposit growth and the cost thereof and non-interest income growth, are factors in the decision making process and are respectively reported in the consolidated statemens of operations. For specialty finance, loan growth and related yields are factors in decision making. Comparative loan balance information measuring loan growth is presented in “Note 6. Loans.” In addition to consideration of the above profitability and growth aspects of its operations, decision making is focused on the management of current and future potential risks. Such risks include, but are not limited to, credit, interest rate, liquidity, regulatory, and reputation. The loan committee provides support and oversight for credit risk, while the asset liability committee provides support and oversight over pricing, duration and liquidity. The risk committee provides further oversight over those areas in addition to regulatory, reputation and other risks.

The following tables provide segment information for the periods indicated (dollars in thousands):


	For the three months ended June 30, 2025
		Fintech		REBL		Institutional Banking		Commercial		Corporate		Total

Interest income		$	486	$	48,904	$	29,069	$	32,990	$	31,699	$	143,148
Interest allocation			64,622		(23,479)		(16,583)		(16,947)		(7,613)		—
Interest expense			42,814		—		888		10		1,944		45,656
Net interest income			22,294		25,425		11,598		16,033		22,142		97,492
Provision for credit losses⁽¹⁾			43,233		(116)		(146)		1,425		(33)		44,363
Non-interest income⁽¹⁾			78,907		2,283		79		2,443		31		83,743
Direct non-interest expense
Salaries and employee benefits			4,401		1,160		2,545		4,688		24,340		37,134
Data processing expense			335		46		497		1		348		1,227
Software			148		27		717		505		3,747		5,144
Other			2,988		1,249		275		2,141		7,065		13,718
Income before non-interest expense allocations			50,096		25,342		7,789		9,716		(13,294)		79,649
Non-interest expense allocations
Risk, financial crimes, and compliance			7,490		604		839		1,365		(10,298)		—
Information technology and operations			3,613		199		1,535		2,101		(7,448)		—
Other allocated expenses			4,091		833		1,755		1,958		(8,637)		—
Total non-interest expense allocations			15,194		1,636		4,129		5,424		(26,383)		—
Income before taxes			34,902		23,706		3,660		4,292		13,089		79,649
Income tax expense			8,689		5,901		911		1,068		3,259		19,828
Net income		$	26,213	$	17,805	$	2,749	$	3,224	$	9,830	$	59,821
⁽¹⁾ Lending agreements related to consumer fintech loans resulted in the company recording a $43.2 million provision for credit losses and a correlated amount in non-interest income resulting in no impact to net income.


	For the three months ended June 30, 2024
		Fintech		REBL		Institutional Banking		Commercial		Corporate		Total

Interest income		$	—	$	52,379	$	30,330	$	30,945	$	23,645	$	137,299
Interest allocation			69,959		(26,135)		(19,000)		(18,938)		(5,886)		—
Interest expense			38,888		—		843		10		3,763		43,504
Net interest income			31,071		26,244		10,487		11,997		13,996		93,795
Provision for credit losses			—		156		59		1,205		(168)		1,252
Non-interest income			27,927		600		15		2,148		32		30,722
Direct non-interest expense
Salaries and employee benefits			3,845		1,025		2,328		4,279		22,386		33,863
Data processing expense			383		42		607		2		389		1,423
Software			118		26		778		445		3,270		4,637
Other			2,251		948		300		1,953		6,071		11,523
Income before non-interest expense allocations			52,401		24,647		6,430		6,261		(17,920)		71,819
Non-interest expense allocations
Risk, financial crimes, and compliance			6,851		552		764		1,247		(9,414)		—
Information technology and operations			3,460		178		1,506		1,855		(6,999)		—
Other allocated expenses			3,940		751		1,636		1,737		(8,064)		—
Total non-interest expense allocations			14,251		1,481		3,906		4,839		(24,477)		—
Income before taxes			38,150		23,166		2,524		1,422		6,557		71,819
Income tax expense			9,633		5,850		637		359		1,654		18,133
Net income		$	28,517	$	17,316	$	1,887	$	1,063	$	4,903	$	53,686


	For the six months ended June 30, 2025
		Fintech		REBL		Institutional Banking		Commercial		Corporate		Total

Interest income		$	726	$	96,775	$	57,081	$	64,897	$	63,471	$	282,950
Interest allocation			138,002		(47,848)		(33,319)		(34,663)		(22,172)		—
Interest expense			85,557		—		2,531		20		5,607		93,715
Net interest income			53,171		48,927		21,231		30,214		35,692		189,235
Provision for credit losses⁽¹⁾			89,101		192		(214)		2,189		(52)		91,216
Non-interest income⁽¹⁾			159,249		2,803		354		4,785		194		167,385
Direct non-interest expense
Salaries and employee benefits			8,730		2,374		5,345		9,978		44,376		70,803
Data processing expense			622		82		990		4		734		2,432
Software			306		53		1,483		979		7,336		10,157
Other			5,599		2,809		594		4,258		13,865		27,125
Income before non-interest expense allocations			108,062		46,220		13,387		17,591		(30,373)		154,887
Non-interest expense allocations
Risk, financial crimes, and compliance			14,529		1,180		1,627		2,662		(19,998)		—
Information technology and operations			7,119		389		3,051		4,111		(14,670)		—
Other allocated expenses			8,178		1,657		3,444		3,884		(17,163)		—
Total non-interest expense allocations			29,826		3,226		8,122		10,657		(51,831)		—
Income before taxes			78,236		42,994		5,265		6,934		21,458		154,887
Income tax expense			19,140		10,518		1,288		1,696		5,251		37,893
Net income		$	59,096	$	32,476	$	3,977	$	5,238	$	16,207	$	116,994
⁽¹⁾ Lending agreements related to consumer fintech loans resulted in the company recording a $89.1 million provision for credit losses and a correlated amount in non-interest income resulting in no impact to net income.


	For the six months ended June 30, 2024
		Fintech		REBL		Institutional Banking		Commercial		Corporate		Total

Interest income		$	2	$	105,019	$	61,223	$	60,006	$	46,858	$	273,108
Interest allocation			134,720		(50,377)		(36,888)		(35,977)		(11,478)		—
Interest expense			76,951		—		1,701		10		6,233		84,895
Net interest income			57,771		54,642		22,634		24,019		29,147		188,213
Provision for credit losses			—		310		72		3,208		(169)		3,421
Non-interest income			55,208		1,865		—		2,532		499		60,104
Direct non-interest expense
Salaries and employee benefits			7,630		1,997		4,590		8,834		41,092		64,143
Data processing expense			767		82		1,196		3		796		2,844
Software			242		52		1,512		908		6,412		9,126
Other			4,410		1,539		1,125		3,742		11,229		22,045
Income before non-interest expense allocations			99,930		52,527		14,139		9,856		(29,714)		146,738
Non-interest expense allocations
Risk, financial crimes, and compliance			13,430		1,085		1,500		2,450		(18,465)		—
Information technology and operations			6,732		348		2,952		3,657		(13,689)		—
Other allocated expenses			7,830		1,492		3,248		3,472		(16,042)		—
Total non-interest expense allocations			27,992		2,925		7,700		9,579		(48,196)		—
Income before taxes			71,938		49,602		6,439		277		18,482		146,738
Income tax expense			17,954		12,380		1,607		69		4,613		36,623
Net income		$	53,984	$	37,222	$	4,832	$	208	$	13,869	$	110,115


	June 30, 2025
		Fintech		REBL		Institutional Banking		Commercial		Corporate			Total

Total assets		$	754,789	$	2,363,597	$	1,890,603	$	1,731,555		$	2,098,687	$	8,839,231
Total liabilities		$	7,457,310	$	1,826	$	175,730	$	9,513		$	334,586	$	7,978,965


	December 31, 2024
		Fintech		REBL		Institutional Banking		Commercial		Corporate		Total

Total assets		$	518,371	$	2,300,817	$	1,855,016	$	1,676,241	$	2,377,098	$	8,727,543
Total liabilities		$	6,885,456	$	2,116	$	434,283	$	8,309	$	607,596	$	7,937,760

Note 15. Subsequent Events

The Company evaluated its June 30, 2025 consolidated financial statements for subsequent events through the date the consolidated financial statements were issued.

On July 7, 2025, the Board of the Company authorized the increase of the capacity of the Company’s existing share repurchase program for the third and fourth quarters of 2025 to $300 million and $200 million for 2026 (the “Repurchase Plan”). This increase cumulatively represents up to $500 million in share repurchases through year-end 2026.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) provides information about the Company’s results of operations, financial condition, liquidity and asset quality. This information is intended to facilitate your understanding and assessment of significant changes and trends related to our financial condition and results of operations. This MD&A should be read in conjunction with our financial information in our Form 10-K, as amended, for the fiscal year ended 2024 (the “2024 Form 10-K, as amended”) and the unaudited interim consolidated financial statements and notes thereto contained in this Quarterly Report on Form 10-Q.

Important Note Regarding Forward-Looking Statements

When used in this Quarterly Report on Form 10-Q, statements regarding The Bancorp’s business, that are not historical facts, are “forward-looking statements.” These statements may be identified by the use of forward-looking terminology, including, but not limited to the words “intend,” “may,” “believe,” “will,” “expect,” “look,” “anticipate,” “plan,” “estimate,” “continue,” or similar words. Forward-looking statements include but are not limited to, statements regarding our annual fiscal 2025 results, profitability, and increased volumes, and relate to our current assumptions, projections, and expectations about our business and future events, including current expectations about important economic, political, and technological factors, among other factors, and are subject to risks and uncertainties, which could cause the actual results, events, or achievements to differ materially from those set forth in or implied by the forward-looking statements and related assumptions. Factors that could cause results to differ from those expressed in the forward-looking statements also include, but are not limited to, the risks and uncertainties referenced or described in The Bancorp’s filings with the Securities and Exchange Commission, including the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s Annual Report on Form 10-K, as amended, for the fiscal year ended December 31, 2024 and other documents that the Company files from time to time with the Securities and Exchange Commission as well as the following:

an inconsistent recovery from an extended period of unpredictable economic and growth conditions in the U.S. economy may adversely impact our assets and operating results and result in increases in payment defaults and other credit risks, decreases in the fair value of some assets and increases in our provision for credit losses;

weak economic and credit market conditions, either globally, nationally or regionally, may result in a reduction in our capital base, reducing our ability to maintain deposits at current levels;

changes in the interest rate environment, particularly in response to inflation, could adversely affect our revenue and expenses and the availability and cost of capital, cash flows and liquidity;

volatility in the banking sector (including perception of such conditions) and responsive actions taken by governmental agencies to stabilize the financial system could result in increased regulation or liquidity constraints;

operating costs may increase;

adverse legislation or governmental or regulatory policies may be promulgated;

we may fail to satisfy our regulators with respect to legislative and regulatory requirements;

management and other key personnel may leave or change roles without effective replacements;

increased competition may reduce our client base or cause us to lose market share;

the costs of our interest-bearing liabilities, principally deposits, may increase relative to the interest received on our interest-bearing assets, principally loans, thereby decreasing our net interest income;

loan and investment yields may decrease, resulting in a lower net interest margin;

geographic concentration could result in our loan portfolio being adversely affected by regional economic factors;

the market value of real estate that secures certain of our loans may be adversely affected by economic and market conditions and other conditions outside of our control such as lack of demand, natural disasters, changes in neighborhood values, competitive overbuilding, weather, casualty losses and occupancy rates;

cybersecurity risks, including data security breaches, ransomware, malware, “denial of service” attacks and identity theft, could result in disclosure of confidential information, operational interruptions and legal and financial exposure;

natural disasters, pandemics, other public health crises, acts of terrorism, geopolitical conflict, including trade disputes and tariffs, sanctions, war or armed conflict, such as the conflicts between Russia and Ukraine and conflicts in the Middle East as well as the possible expansion of such conflicts in surrounding areas, or other catastrophic events could disrupt the systems of us or third party service providers and negatively impact general economic conditions;

we may not be able to sustain our historical growth rates in our loan, prepaid and debit card and other lines of business;

our entry into consumer fintech lending and its future potential impact on our operations and financial condition may result in new operational, legal and financial risks;

risks related to actual or threatened litigation;

our ability to remediate the material weaknesses in internal control over financial reporting identified, and to subsequently maintain effective internal control over financial reporting;

our internal controls and procedures may fail or be circumvented, and our risk management policies may not be adequate; and

we may not be able to manage credit risk to desired levels, improve our net interest margin and monitor interest rate sensitivity, manage our real estate exposure to capital levels and maintain flexibility if we achieve asset growth.

We caution readers not to place undue reliance on forward-looking statements, which speak only as of the date hereof and are based on information presently available to the management of the Company. We undertake no obligation to publicly revise or update these forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q except as required by applicable law.

Recent Developments

The majority of the Company’s OREO property is comprised of an apartment complex. The underlying balance for this property is $42.9 million as of June 30, 2025. As previously disclosed, the property was under an agreement of sale. On June 24, 2025, the Company terminated the agreement of sale for the property and demanded the escrow agent release to Company all earnest money deposits received to date, totaling $3.0 million. On June 26, 2025, without providing any legal or contractual basis to do so, the purchaser objected to the release of the earnest money deposits. The Company believes it is entitled to the earnest money deposits and is pursuing release of the funds.

Overview

The Bancorp’s balance sheet has a risk profile enhanced by the special nature of the collateral supporting its loan niches, and related underwriting. Those loan niches have contributed to increased earnings levels, even during periods in which markets have experienced various economic stresses. Real estate bridge lending is comprised of workforce housing which we consider to be working class apartments at more affordable rental rates, in selected states. We believe that underwriting requirements provide significant protection against loss, as supported by LTV ratios based on third-party appraisals. SBLOC and IBLOC loans are collateralized by marketable securities and the cash value of life insurance, respectively, while SBA loans are either SBA 7(a) loans that come with significant government-related guarantees, or SBA 504 loans that are made at 50-60% LTVs. Additional detail with respect to these loan portfolios is included in the related tables in “Financial Condition.” Also enhancing the Company’s risk profile is the substantial earnings impact of its payment businesses.

Nature of Operations

We are a Delaware financial holding company and our primary, wholly owned subsidiary is The Bancorp Bank, National Association. The vast majority of our revenue and income is currently generated through the Bank. In our continuing operations, we have four primary lines of specialty lending in our national specialty finance segment:

SBLOC, IBLOC, and investment advisor financing;

leasing (direct lease financing);

SBLs, consisting primarily of SBA loans; and

non-SBA commercial real estate bridge loans.

SBLOCs and IBLOCs are loans that are generated through affinity groups and are respectively collateralized by marketable securities and the cash value of insurance policies. SBLOCs are typically offered in conjunction with brokerage accounts and are offered nationally. IBLOC loans are typically viewed as an alternative to standard policy loans from insurance companies and are utilized by our existing advisor base as well as insurance agents throughout the country. Investment advisor financing are loans made to investment advisors for purposes of debt refinance, acquisition of another investment firm or internal succession. Vehicle fleet and, to a lesser extent, other equipment leases are generated in a number of Atlantic Coast and other states and are collateralized primarily by vehicles. SBA loans are generated nationally and are collateralized by commercial properties and other types of collateral. Our non-SBA commercial real estate bridge loans, at fair value, are primarily collateralized by multifamily properties (apartment buildings), and to a lesser extent, by hotel and retail properties. These loans were originally generated for sale through securitizations. In 2020, we decided to retain these loans on our balance sheet as interest-earning assets and resumed originating such loans in the third quarter of 2021. These new originations are identified as real estate bridge loans, consist of apartment building loans, and are held for investment in the loan portfolio. Prior originations originally intended for securitizations continue to be accounted for at fair value, and are included on the balance sheet in “Commercial loans, at fair value.”

In our fintech segment we make consumer fintech loans which consist of short-term extensions of credit including secured credit card loans made in conjunction with marketers and servicers.

The majority of our deposits and non-interest income are generated in our fintech segment, which consists of consumer transaction accounts accessed by Bank-issued prepaid or debit cards and payment companies that process their clients’ corporate and consumer payments, automated clearing house (“ACH”) accounts, the collection of card payments on behalf of merchants and other payments through our Bank. The card-accessed deposit accounts are comprised of debit and prepaid card accounts that are generated by companies that market directly to end users. Our card-accessed deposit account types are diverse and include: consumer and business debit, general purpose reloadable prepaid, pre-tax medical spending benefit, payroll, gift, government, corporate incentive, reward, business payment accounts and others. Our ACH accounts facilitate bill payments, and our acquiring accounts provide clearing and settlement services for payments made to merchants which must be settled through associations such as Visa or Mastercard. Consumer transaction account banking services are provided to organizations with a pre-existing customer base tailored to support or complement the services provided by these organizations to their customers, which we refer to as “affinity or private label banking.” These services include loan and deposit accounts for investment advisory companies through our Institutional Banking department. We typically provide these services under the name and through the facilities of each organization with whom we develop a relationship.

Performance Summary

Our net income increased to $59.8 million for the second quarter of 2025, from $53.7 million for the second quarter of 2024. Our cost of funds decreased to 2.23% in the second quarter of 2025 from 2.50% in the second quarter of 2024. See “Asset and Liability Management” in this MD&A for further discussion of how our funding sources and loans adjust to Federal Reserve rate changes.

Fintech fees are the largest drivers of non-interest income. Such fees for the second quarter of 2025 increased $7.8 million over the comparable 2024 period.

Key Performance Indicators

We use a number of key performance indicators (“KPIs”) to measure our overall financial performance and believe they are useful to investors because they provide additional information about our underlying operational performance and trends. We describe how we calculate and use a number of these KPIs and analyze their results below.

Return on assets and return on equity. Two KPIs commonly used within the banking industry to measure overall financial performance are return on assets and return on equity. Return on assets measures the amount of earnings compared to the level of assets utilized to generate those earnings and is derived by dividing net income by average assets. Return on equity measures the amount of earnings compared to the equity utilized to generate those earnings and is derived by dividing net income by average shareholders’ equity.

Ratio of equity to assets. Ratio of equity to assets is another KPI frequently utilized within the banking industry and is derived by dividing period-end shareholders’ equity by period-end total assets.

Net interest margin and credit losses. Net interest margin is a KPI associated with net interest income, which is the largest component of our earnings and is the difference between the interest earned on our interest-earning assets consisting of loans and investments, less the interest on our funding, consisting primarily of deposits. Net interest margin is derived by dividing net interest income by average interest-earning assets. Higher levels of earnings and net interest income on lower levels of assets, equity and interest-earning assets are generally desirable. However, these indicators must be considered in light of regulatory capital requirements, which impact equity, and credit risk inherent in loans. Accordingly, the magnitude of credit losses is an additional KPI.

Other KPIs. Other KPIs we use from time to time include growth in average loans and leases, non-interest income growth, the level of non-interest expense and various capital measures including equity to assets.

Results of KPIs

In the second quarter of 2025, return on assets and return on equity amounted to 2.64% and 28.40% (annualized), respectively, compared to 2.77% and 27.10% (annualized) in the second quarter of 2024. For the six-month period ended June 30, 2025, return on assets, and return on equity amounted to 2.56% and 28.60% (annualized), respectively, compared to 2.86% and 27.95% (annualized) for the six-month period ended June 30, 2024.

At June 30, 2025, the ratio of equity to assets was 9.73%, compared to 9.54% at June 30, 2024, reflecting an increase in equity capital from retained earnings and an increase in unrealized income on securities partially offset by share repurchases.

Net interest margin was 4.44% in the second quarter of 2025, versus 4.97% in the second quarter of 2024 reflecting the impact of Federal Reserve rate decreases beginning in September 2024. Additionally, fees on the majority of consumer fintech loan balances are recorded as non-interest income, which impacts both net interest income and net interest margin.

Average loans and leases increased to $6.57 billion in the second quarter of 2025 compared to $5.75 billion in the second quarter of 2024. The provision for credit losses on non-consumer fintech loans was $1.5 million in the second quarter of 2025 compared to a provision for credit losses on non-consumer fintech loans of $1.5 million in the second quarter of 2024.

Critical Accounting Estimates

Our accounting and reporting policies conform with GAAP and general practices within the financial services industry. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates. We view critical accounting estimates as those estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. Our critical accounting policies and estimates as of June 30, 2025, remain unchanged from those presented in the 2024 Form 10-K, as amended, under Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Results of Operations

Comparison of second quarter of 2025 to second quarter of 2024

Net Income

Net income for the second quarter of 2025 was $59.8 million, or $1.27 per diluted share, compared to $53.7 million, or $1.05 per diluted share, for the second quarter of 2024. Income before income taxes was $79.6 million in the second quarter of 2025 compared to $71.8 million in the second quarter of 2024.

Net Interest Income

Our net interest income for the second quarter of 2025 increased $3.7 million, or 3.9%, to $97.5 million from $93.8 million in the second quarter of 2024. Our interest income for the second quarter of 2025 increased to $143.1 million, an increase of $5.8 million, or 4.3%, from $137.3 million for the second quarter of 2024. The increase reflected higher securities interest reflecting higher securities balances and $3.0 million of interest footnoted in the following “Average Daily Balances Table”. While our average loans and leases increased to $6.57 billion for the second quarter of 2025 from $5.75 billion for the second quarter of 2024, an increase of $814.4 million, or 14.2%, lower rates resulted in decreased interest income. Related interest income decreased $2.7 million on a tax equivalent basis, reflecting the impact of the aforementioned Federal Reserve rate decreases. Additionally, fees on the majority of consumer fintech loan balances are recorded as non-interest income, which impacts both net interest income and net interest margin. The fees are included in non-interest income as most of the Bank’s current fintech loans do not charge interest to the consumer. The Bank generally earns fees on such loans based on transaction activity and volume; those fees are recorded as non-interest income. Of the total $2.7 million decrease in loan interest income on a tax equivalent basis, the largest decreases were $3.5 million for all real estate bridge loans and $2.1 million for SBLOC and IBLOC, while small business lending, investment advisor financing, and fintech increased $1.6 million, $861,000, and $486,000, respectively.

Our average investment securities of $1.47 billion for the second quarter of 2025 increased $13.7 million from $1.46 billion for the second quarter of 2024. Related tax equivalent interest income increased $5.0 million, reflecting $3.0 million of prior period interest on CRE-2, which was repaid as a result of the sale of underlying collateral. That security was the only remaining security from the Company's prior securitizations.

Our net interest margin (calculated by dividing net interest income by average interest-earning assets) for the second quarter of 2025 was 4.44% compared to 4.97% for the second quarter of 2024, a decrease of 53 basis points. While the yield on interest-earning assets decreased 76 basis points, the cost of deposits and interest-bearing liabilities decreased 27 basis points, or a net change of 49 basis points. Average interest-earning deposits at the Federal Reserve Bank increased $414.7 million, or 121.3%, to $756.6 million in the second quarter of 2025 from $341.9 million in the second quarter of 2024. In the second quarter of 2025, the average yield on our loans decreased to 6.84% from 8.00% for the second quarter of 2024, a decrease of 116 basis points. The yield on taxable investment securities in the second quarter of 2025 was 6.12% compared to 4.82% for the second quarter of 2024, also reflecting the aforementioned $3.0 million of prior period interest on CRE-2.

Average Daily Balances

The following table presents the average daily balances of assets, liabilities and shareholders’ equity and the respective interest earned or paid on interest-earning assets and interest-bearing liabilities, as well as average annualized rates, for the periods indicated:



	Three months ended June 30,												Three months ended June 30,
	2025						2024						2025 vs 2024
	Average				Average		Average				Average
	Balance		Interest		Rate		Balance		Interest		Rate		Due to Volume		Due to Rate		Total
	(Dollars in thousands)
Assets:
Interest-earning assets:
Loans, net of deferred loan fees and costs⁽¹⁾	$	6,560,873	$	112,188		6.84%	$	5,749,565	$	114,970		8.00%	$	16,223	$	(19,005)	$	(2,782)
Leases-bank qualified⁽²⁾		7,723		174		9.01%		4,621		117		10.13%		79		(22)		57
Investment securities-taxable⁽³⁾		1,462,603		22,393		6.12%		1,454,393		17,520		4.82%		99		1,757		1,856
Investment securities-nontaxable⁽²⁾		8,385		131		6.25%		2,895		50		6.91%		95		(14)		81
Interest-earning deposits at Federal Reserve Bank		756,603		8,326		4.40%		341,863		4,677		5.47%		5,673		(2,024)		3,649
Net interest-earning assets		8,796,187		143,212		6.51%		7,553,337		137,334		7.27%

Allowance for credit losses		(52,444)						(28,568)
Other assets		344,627						266,061
	$	9,088,370					$	7,790,830						22,169		(19,308)		2,861

Liabilities and shareholders' equity:
Deposits:
Demand and interest checking	$	7,991,121	$	43,402		2.17%	$	6,657,386	$	39,542		2.38%		7,923		(4,063)		3,860
Savings and money market		65,637		561		3.42%		60,212		457		3.04%		41		63		104
Total deposits		8,056,758		43,963		2.18%		6,717,598		39,999		2.38%

Short-term borrowings		439		5		4.56%		92,412		1,295		5.61%		(1,289)		(1)		(1,290)
Long-term borrowings		13,957		198		5.67%		38,362		685		7.14%		(436)		(51)		(487)
Subordinated debt		13,401		257		7.67%		13,401		291		8.69%		—		(34)		(34)
Senior debt		96,333		1,233		5.12%		95,984		1,234		5.14%		4		(5)		(1)
Total deposits and liabilities		8,180,888		45,656		2.23%		6,957,757		43,504		2.50%

Other liabilities		62,505						36,195
Total liabilities		8,243,393						6,993,952						6,243		(4,091)		2,152

Shareholders' equity		844,977						796,878
	$	9,088,370					$	7,790,830

Net interest income on tax equivalent basis⁽²⁾			$	97,556					$	93,830			$	15,926	$	(15,217)	$	709

Tax equivalent adjustment				64						35

Net interest income			$	97,492					$	93,795

Net interest margin⁽²⁾						4.44%						4.97%

⁽¹⁾Includes commercial loans, at fair value. All periods include non-accrual loans.
⁽²⁾Full taxable equivalent basis, using 21% respective statutory federal tax rates in 2025 and 2024.

⁽³⁾The second quarter of 2025 included $3.0 million of interest income from a security that was known as “CRE-2” and which was related to the Company’s discontinued commercial real estate securitization business. The CRE-2 interest was repaid in the quarter as a result of the final sale of underlying collateral related to that security. CRE-2 was the last security remaining related to the Company’s discontinued commercial real estate securitization business. The $3.0 million of prior period interest income was excluded from change due to rate.

For the second quarter of 2025, average interest-earning assets increased to $8.80 billion, an increase of $1.24 billion, or 16.5%, from $7.55 billion in the second quarter of 2024. The increase reflected increased average interest-earning deposits at the Federal Reserve Bank of $414.7 million, increased average balances of loans and leases of $814.4 million, or 14.2%, and increased average investment securities of $13.7 million, or 0.9%. For those respective periods, average demand and interest checking deposits increased $1.33 billion, or 20.0%. The interest expense shown for demand and interest checking is primarily comprised of interest paid to our affinity groups.

Provision for Credit Losses on Loans

Our provision for credit losses was $44.4 million for the second quarter of 2025 compared to a provision of $1.3 million for the second quarter of 2024. The provision for credit losses for the second quarter of 2025 was allocated as follows: $1.5 million for non-consumer fintech loans, $43.2 million for consumer fintech loans and ($364,000) for unfunded commitments. The provision for credit losses for the second quarter of 2024 was allocated as follows: $1.5 million for non-consumer fintech loans and ($225,000) for unfunded commitments. The $43.2 million provision for consumer fintech loans correlates to $43.2 million of credit enhancement income included in non-interest income. The ACL was $59.4 million, or 0.91% of total loans, at June 30, 2025, compared to $44.9 million, or 0.73% of total loans, at December 31, 2024. We believe that our ACL is appropriate and supportable. For more information about our provision and ACL and our loss experience, see “Allowance for Credit Losses,” “Net Charge-offs,” and “Non-accrual Loans, Loans 90 Days Delinquent and Still Accruing, OREO and Modified Loans,” below and “Note 6. Loans” to the unaudited consolidated financial statements herein.

Non-Interest Income

Non-interest income was $83.7 million in the second quarter of 2025 compared to $30.7 million in the second quarter of 2024. The $53.0 million, or 172.6%, increase between those respective periods reflected $43.2 million of consumer fintech loan credit enhancement income which correlated to a like amount for provision for credit losses on consumer fintech loans, and an increase in prepaid, debit card and related fees. The increase also reflected increased ACH, card and other payment processing fees. Prepaid, debit card and related fees increased $1.4 million, or 5.5%, to $26.1 million for the second quarter of 2025, compared to $24.8 million in the second quarter of 2024. The increase reflected higher transaction volume from new clients and organic growth from existing clients. ACH, card and other payment processing fees increased $2.6 million, or 85.4%, to $5.6 million for the second quarter of 2025, compared to $3.0 million in the second quarter of 2024, reflecting an increase in rapid funds transfer volume.

Consumer credit fintech fees amounted to $4.0 million for the second quarter of 2025. The impact of such lending may also be reflected in a lower cost of deposits, as a result of deposits required for secured credit card loans.

Net realized and unrealized gains on commercial loans, at fair value, decreased $159,000, or 31.6%, to $344,000 for the second quarter of 2025 from $503,000 for the second quarter of 2024, as related loan balances continue to paydown.

Leasing related income increased $702,000, or 49.1%, to $2.1 million for the second quarter of 2025 from $1.4 million for the second quarter of 2024.

Other non-interest income increased $1.5 million, or 167.0%, to $2.4 million for the second quarter of 2025 from $895,000 in the second quarter of 2024 which reflected increased payoff fees on REBL loans.

Non-Interest Expense

Total non-interest expense was $57.2 million for the second quarter of 2025, an increase of $5.8 million, or 11.2%, compared to $51.4 million for the second quarter of 2024. Of the $5.8 million increase, $3.3 million resulted from an increase in salaries and benefits expense.

The following table presents the principal categories of non-interest expense for the periods indicated:


	For the three months ended June 30,
	2025		2024		Increase (Decrease)		Percent Change
	(Dollars in thousands)
Salaries and employee benefits	$	37,134	$	33,863	$	3,271		9.7%
Depreciation		1,125		1,027		98		9.5%
Rent and related occupancy cost		1,717		1,686		31		1.8%
Data processing expense		1,227		1,423		(196)		(13.8%)
Audit expense		545		319		226		70.8%
Legal expense		1,863		633		1,230		194.3%
FDIC insurance		1,202		869		333		38.3%
Software		5,144		4,637		507		10.9%
Insurance		1,145		1,282		(137)		(10.7%)
Telecom and IT network communications		308		354		(46)		(13.0%)
Consulting		436		562		(126)		(22.4%)
Other		5,377		4,791		586		12.2%
Total non-interest expense	$	57,223	$	51,446	$	5,777		11.2%

Changes in non-interest expense were as follows:

Salaries and employee benefits expense increased to $37.1 million for the second quarter of 2025, an increase of $3.3 million, or 9.7%, from $33.9 million for the second quarter of 2024. The 9.7% increase in salaries and employee benefits expense reflected higher stock and other incentive compensation, and employee insurance expense. The increase also reflected higher IT and cybersecurity, and higher financial crimes and risk management expense.

Data processing expense decreased $196,000, or 13.8%, to $1.2 million in the second quarter of 2025 from $1.4 million in the second quarter of 2024 reflecting the impact of newly effective contract terms.

Audit expense increased $226,000, or 70.8%, to $545,000 in the second quarter of 2025 from $319,000 in the second quarter of 2024. The increase reflected higher expense for regulatory filings.

Legal expense increased $1.2 million, or 194.3%, to $1.9 million in the second quarter of 2025 from $633,000 in the second quarter of 2024. The increase reflected payments related matters and higher expense for regulatory filings.

FDIC insurance expense increased $333,000, or 38.3%, to $1.2 million for the second quarter of 2025 from $869,000 in the second quarter of 2024, reflecting an increase in the assessment rate in the second quarter of 2025.

Software expense increased $507,000, or 10.9%, to $5.1 million in the second quarter of 2025 from $4.6 million in the second quarter of 2024. The increase reflected higher expenditures for information technology infrastructure including leasing, institutional banking, cybersecurity, and enterprise risk.

Other non-interest expense increased $586,000, or 12.2%, to $5.4 million in the second quarter of 2025 from $4.8 million in the second quarter of 2024 reflecting an increase of $290,000 in marketing expense.

Income Taxes

Income tax expense was $19.8 million for the second quarter of 2025 compared to $18.1 million in the second quarter of 2024. A 24.9% effective tax rate in 2025 and a 25.2% effective tax rate in 2024 primarily reflected a 21% federal tax rate and the impact of various state income taxes.

Comparison of first six months 2025 to first six months 2024

Net Income

Net income for the first six months of 2025 was $117.0 million, or $2.46 per diluted share, compared to $110.1 million, or $2.10 per diluted share, for the first six months of 2024. Income before income taxes was $154.9 million in the first six months of 2025 compared to $146.7 million in the first six months of 2024.

Net Interest Income

Our net interest income for the first six months of 2025 increased $1.0 million, or 0.5%, to $189.2 million from $188.2 million in the first six months of 2024. Our interest income for the first six months of 2025 increased to $283.0 million, an increase of $9.8 million, or 3.6%, from $273.1 million for the first six months of 2024. The increase in interest income reflected the impact of higher investment securities balances and $3.0 million of interest footnoted in the following “Average Daily Balances Table”. While our average loans

and leases increased to $6.48 billion for the first six months of 2025 from $5.74 billion for the first six months of 2024, an increase of $739.9 million, or 12.9%, lower rates resulted in decreased interest income. Related interest income decreased $8.1 million on a tax equivalent basis. Additionally, fees on the majority of consumer fintech loan balances are recorded as non-interest income, which impacts both net interest income and net interest margin. The fees are included in non-interest income as most of the Bank’s current fintech loans do not charge interest to the consumer. The Bank generally earns fees on such loans based on transaction activity and volume; those fees are recorded as non-interest income. Of the total $8.1 million decrease in loan interest income on a tax equivalent basis, the largest decreases were $8.2 million for all real estate bridge loans and $5.9 million for SBLOC and IBLOC, while small business lending, investment advisor financing, and leasing increased $3.7 million, $1.8 million, and $1.2 million, respectively.

Our average investment securities of $1.48 billion for the first six months of 2025 increased $386.3 million from $1.10 billion for the first six months of 2024. Related tax equivalent interest income increased $13.5 million, reflecting an increase in balances and $3.0 million of prior period interest on CRE-2, which was repaid as a result of the sale of underlying collateral. That security was the only remaining security from the Company's prior securitizations.

Our net interest margin (calculated by dividing net interest income by average interest-earning assets) for the first six months of 2025 was 4.25% compared to 5.06% for the first six months of 2024, a decrease of 81 basis points. While the yield on interest-earning assets decreased 98 basis points, the cost of deposits and interest-bearing liabilities decreased 24 basis points, or a net change of 74 basis points. Average interest-earning deposits at the Federal Reserve Bank increased $337.5 million, or 55.5%, to $945.5 million in the first six months of 2025 from $608.0 million in the first six months of 2024. In the first six months of 2025, the average yield on our loans decreased to 6.83% from 7.99% for the first six months of 2024, a decrease of 116 basis points. The yield on taxable investment securities in the first six months of 2025 was 5.49% compared to 4.96% for the first six months of 2024, also reflecting the aforementioned $3.0 million of prior period interest on CRE-2.

Average Daily Balances


	Six months ended June 30,												Six months ended June 30,
	2025						2024						2025 vs 2024
	Average				Average		Average				Average
	Balance		Interest		Rate		Balance		Interest		Rate		Due to Volume		Due to Rate		Total
	(Dollars in thousands)
Assets:
Interest-earning assets:
Loans, net of deferred loan fees and costs⁽¹⁾	$	6,471,242	$	220,990		6.83%	$	5,733,413	$	229,130		7.99%	$	29,487	$	(37,627)	$	(8,140)
Leases-bank qualified⁽²⁾		6,793		313		9.22%		4,683		233		9.95%		105		(25)		80
Investment securities-taxable⁽³⁾		1,475,892		40,520		5.49%		1,093,996		27,154		4.96%		9,479		870		10,349
Investment securities-nontaxable⁽²⁾		7,326		236		6.44%		2,895		100		6.91%		153		(17)		136
Interest-earning deposits at Federal Reserve Bank		945,453		21,006		4.44%		607,968		16,561		5.45%		9,193		(4,748)		4,445
Net interest-earning assets		8,906,706		283,065		6.36%		7,442,955		273,178		7.34%

Allowance for credit losses		(48,700)						(27,862)
Other assets		354,939						323,244
	$	9,212,945					$	7,738,337						48,417		(41,547)		6,870

Liabilities and shareholders' equity:
Deposits:
Demand and interest checking	$	8,082,390	$	88,447		2.19%	$	6,553,107	$	78,256		2.39%		18,263		(8,072)		10,191
Savings and money market		100,966		1,891		3.75%		55,591		904		3.25%		738		249		987
Total deposits		8,183,356		90,338		2.21%		6,608,698		79,160		2.40%

Short-term borrowings		220		5		4.55%		46,892		1,314		5.60%		(1,308)		(1)		(1,309)
Repurchase agreements		—		—		—		6		—		—		—		—		—
Long-term borrowings		14,003		393		5.61%		38,439		1,371		7.13%		(872)		(106)		(978)
Subordinated debt		13,401		512		7.64%		13,401		583		8.70%		—		(71)		(71)
Senior debt		96,289		2,467		5.12%		95,939		2,467		5.14%		9		(9)		—
Total deposits and liabilities		8,307,269		93,715		2.26%		6,803,375		84,895		2.50%

Other liabilities		80,651						142,826
Total liabilities		8,387,920						6,946,201						16,830		(8,010)		8,820

Shareholders' equity		825,025						792,136
	$	9,212,945					$	7,738,337

Net interest income on tax equivalent basis⁽²⁾			$	189,350					$	188,283			$	31,587	$	(33,537)	$	(1,950)

Tax equivalent adjustment				115						70

Net interest income			$	189,235					$	188,213

Net interest margin⁽²⁾						4.25%						5.06%

⁽¹⁾Includes commercial loans, at fair value. All periods include non-accrual loans.
⁽²⁾Full taxable equivalent basis, using 21% respective statutory federal tax rates in 2025 and 2024.

⁽³⁾ The second quarter of 2025 included $3.0 million of interest income from a security that was known as “CRE-2” and which was related to the Company’s discontinued commercial real estate securitization business. The CRE-2 interest was repaid in the quarter as a result of the final sale of underlying collateral related to that security. CRE-2 was the last security remaining related to the Company’s discontinued commercial real estate securitization business. The $3.0 million of prior period interest income was excluded from change due to rate.

For the first six months of 2025, average interest-earning assets increased to $8.91 billion, an increase of $1.46 billion, or 19.7%, from $7.44 billion in the first six months of 2024. The increase reflected increased average interest-earning deposits at the Federal Reserve Bank of $337.5 million, increased average balances of loans and leases of $739.9 million, or 12.9%, and increased average investment

securities of $386.3 million, or 35.2%. For those respective periods, average demand and interest checking deposits increased $1.53 billion, or 23.3%. The interest expense shown for demand and interest checking is primarily comprised of interest paid to our affinity groups.

Provision for Credit Losses on Loans

Our provision for credit losses was $91.2 million for the first six months of 2025 compared to a provision of $3.4 million for the first six months of 2024. The provision for credit losses for the first six months of 2025 was allocated as follows: $2.4 million for non-consumer fintech loans, $89.1 million for consumer fintech loans and ($253,000) for unfunded commitments. The provision for credit losses for the first six months of 2024 was allocated as follows: $3.8 million for non-consumer fintech loans and ($419,000) for unfunded commitments. The $89.1 million provision for consumer fintech loans correlates to $89.1 million of credit enhancement income included in non-interest income. The ACL was $59.4 million, or 0.91% of total loans, at June 30, 2025, compared to $44.9 million, or 0.73% of total loans, at December 31, 2024. We believe that our ACL is appropriate and supportable. For more information about our provision and ACL and our loss experience, see “Allowance for Credit Losses,” “Net Charge-offs,” and “Non-accrual Loans, Loans 90 Days Delinquent and Still Accruing, OREO and Modified Loans,” below and “Note 6. Loans” to the unaudited consolidated financial statements herein.

Non-Interest Income

Non-interest income was $167.4 million in the first six months of 2025 compared to $60.1 million in the first six months of 2024. The $107.3 million, or 178.5%, increase between those respective periods reflected $89.1 million of consumer fintech loan credit enhancement income which correlated to a like amount for provision for credit losses on consumer fintech loans, and an increase in prepaid, debit card and related fees. The increase also reflected increased ACH, card and other payment processing fees. Prepaid, debit card and related fees increased $2.8 million, or 5.7%, to $51.8 million for the first six months of 2025, compared to $49.0 million in the first six months of 2024. The increase reflected higher transaction volume from new clients and organic growth from existing clients. ACH, card and other payment processing fees increased $4.7 million, or 79.3%, to $10.7 million for the first six months of 2025, compared to $6.0 million in the first six months of 2024, reflecting an increase in rapid funds transfer volume.

Consumer credit fintech fees amounted to $7.6 million for the first six months of 2025. The impact of such lending may also be reflected in a lower cost of deposits, as a result of deposits required for secured credit card loans.

Net realized and unrealized gains on commercial loans, at fair value, decreased $894,000, or 55.9%, to $705,000 for the first six months of 2025 from $1.6 million for the first six months of 2024, as related loan balances continue to paydown.

Leasing related income increased $2.3 million, or 125.8%, to $4.1 million for the first six months of 2025 from $1.8 million for the first six months of 2024.

Other non-interest income increased $1.8 million, or 119.4%, to $3.4 for the first six months of 2025 from $1.5 million in the first six months of 2024 which reflected increased payoff fees on REBL loans.

Non-Interest Expense

Total non-interest expense was $110.5 million for the first six months of 2025, an increase of $12.4 million, or 12.6%, compared to $98.2 million for the first six months of 2024. Of the $12.4 million increase, $6.7 million resulted from an increase in salaries and benefits expense.

The following table presents the principal categories of non-interest expense for the periods indicated:


	For the six months ended June 30,
	2025		2024		Increase (Decrease)		Percent Change
	(Dollars in thousands)
Salaries and employee benefits	$	70,803	$	64,143	$	6,660		10.4%
Depreciation		2,229		1,976		253		12.8%
Rent and related occupancy cost		3,285		3,326		(41)		(1.2%)
Data processing expense		2,432		2,844		(412)		(14.5%)
Audit expense		1,199		678		521		76.8%
Legal expense		3,820		1,454		2,366		162.7%
FDIC insurance		2,255		1,714		541		31.6%
Software		10,157		9,126		1,031		11.3%
Insurance		2,402		2,620		(218)		(8.3%)
Telecom and IT network communications		641		625		16		2.6%
Consulting		892		1,140		(248)		(21.8%)
Other		10,402		8,512		1,890		22.2%
Total non-interest expense	$	110,517	$	98,158	$	12,359		12.6%

Changes in non-interest expense were as follows:

Salaries and employee benefits expense increased to $70.8 million for the first six months of 2025, an increase of $6.7 million, or 10.4%, from $64.1 million for the first six months of 2024. The 10.4% increase in salaries and employee benefits expense reflected higher stock and other incentive compensation, and employee insurance expense. The increase also reflected higher IT and cybersecurity, and higher financial crimes and risk management expense.

Data processing expense decreased $412,000, or 14.5%, to $2.4 million in the first six months of 2025 from $2.8 million in the first six months of 2024 reflecting the impact of newly effective contract terms.

Audit expense increased $521,000, or 76.8%, to $1.2 million in the first six months of 2025 from $678,000 in the first six months of 2024. The increase reflected higher expense for regulatory filings.

Legal expense increased $2.4 million, or 162.7%, to $3.8 million in the first six months of 2025 from $1.5 million in the first six months of 2024. The increase reflected payments related matters and higher expense for regulatory filings.

FDIC insurance expense increased $541,000, or 31.6%, to $2.3 million for the first six months of 2025 from $1.7 million in the first six months of 2024, reflecting an increase in the assessment rate in the second quarter of 2025.

Software expense increased $1.0 million or 11.3%, to $10.2 million in the first six months of 2025 from $9.1 million in the first six months of 2024. The increase reflected higher expenditures for information technology infrastructure including leasing, institutional banking, cybersecurity, and enterprise risk.

Other non-interest expense increased $1.9 million, or 22.2%, to $10.4 million in the first six months of 2025 from $8.5 million in the first six months of 2024 reflecting increases of $1.0 million in OREO expenses, $495,000 in marketing expense, and $133,000 in other operating taxes expense. The $1.0 million increase in OREO expense reflected operating and real estate tax expenses on an apartment property and Florida mall. The OREO balances of those properties as of June 30, 2025 were $42.9 million for the apartment property (“See Recent Developments”) and $15.0 million for the Florida mall.

Income Taxes

Income tax expense was $37.9 million for the first six months of 2025 compared to $36.6 million in the first six months of 2024. A 24.5% effective tax rate in 2025 and a 25.0% effective tax rate in 2024 primarily reflected a 21% federal tax rate and the impact of various state income taxes.

Liquidity

Liquidity defines our ability to generate funds at a reasonable cost to support asset growth, meet deposit withdrawals, satisfy borrowing needs and otherwise operate on an ongoing basis. Maintaining an adequate level of liquidity depends on the institution’s ability to efficiently meet both expected and unexpected cash flows without adversely affecting daily operations or financial condition. The Company’s liquidity management policy requirements include sustaining defined liquidity minimums, concentration monitoring and management, stress testing, contingency planning and related oversight. Based on our sources of funding and liquidity discussed below, we believe we have sufficient liquidity and capital resources available for our needs in the next 12 months and for the foreseeable future. We invest the funds we do not need for daily operations primarily in overnight federal funds or in our interest-bearing account at the Federal Reserve. We actively monitor our positions and contingent funding sources daily.

Our primary source of funding has been deposits. Average total deposits increased by $1.34 billion, or 19.9%, to $8.06 billion for the second quarter of 2025 compared to the second quarter of 2024. Federal Reserve average balances increased to $756.6 million in the second quarter of 2025 from $341.9 million in the second quarter of 2024.

One source of contingent liquidity is available-for-sale securities, which amounted to $1.48 billion at June 30, 2025, compared to $1.50 billion at December 31, 2024. At June 30, 2025, outstanding loans amounted to $6.54 billion, compared to $6.11 billion at the prior year end, an increase of $421.8 million representing a use of funds. Commercial loans, at fair value, decreased to $185.5 million from $223.1 million between those respective dates, a decrease of $37.6 million, which provided funding. In 2019 and previous years, these loans were generally originated for securitization and sale, but in 2020 we decided to retain such loans on the balance sheet. While we suspended originating such loans after the first quarter of 2020, we resumed originations, which consist primarily of non-SBA commercial real estate bridge loans, in the third quarter of 2021. Such originations are held for investment and are included in “Loans, net of deferred loan fees and costs” on the balance sheet. Accordingly, commercial loans, at fair value will continue to run off. Our liquidity planning has not previously placed undue reliance on securitizations, and while our future planning excludes the impact of securitizations, other liquidity sources, primarily deposits, are determined to be adequate.

While we do not have a traditional branch system, we believe that our core deposits, which include our demand, interest checking, savings and money market accounts, have similar characteristics to those of a bank with a branch system. The majority of our deposit accounts are obtained with the assistance of third-parties and as a result have historically been classified as brokered by the FDIC. Prior to December 2020, FDIC guidance for classification of deposit accounts as brokered was relatively broad, and generally included accounts which were referred to or “placed” with the institution by other companies. If the Bank ceases to be categorized as “well capitalized” under banking regulations, it will be prohibited from accepting, renewing or rolling over any of its deposits classified as brokered without the consent of the FDIC. In such a case, the FDIC’s refusal to grant consent to our accepting, renewing or rolling over brokered deposits could effectively restrict or eliminate the ability of the Bank to operate its business lines as presently conducted. In December 2020, the FDIC issued a new regulation which, in the third quarter of 2021, resulted in the majority of our deposits being reclassified from brokered to non-brokered. On July 30, 2024, the FDIC proposed a regulation eliminating certain automatic exceptions which resulted in the reclassification of significant amounts of our deposits from brokered to non-brokered as a result of the December 2020 rules changes, while retaining the ability of financial institutions to reapply. If the proposed regulation were to be adopted, significant amounts of our deposits could be reclassified as brokered, which could also result in an increase in our federal deposit insurance rate and expense. On January 21, 2025, the FDIC announced that the proposed regulation would not be adopted. Of our total deposits of $7.77 billion as of June 30, 2025, $458.1 million were classified as brokered and an estimated $560.1 million were not insured by FDIC insurance, which requires identification of the depositor and is limited to $250,000 per identified depositor. Uninsured accounts may represent a greater liquidity risk than FDIC-insured accounts should large depositors withdraw funds as a result of negative financial developments either at the Bank or in the economy. Significant amounts of our uninsured deposits are comprised of small balances, such as anonymous gift cards and corporate incentive cards for which there is no identified depositor. We do not believe that such uninsured accounts present a significant liquidity risk.

Certain components of our deposits experience seasonality, creating greater excess liquidity at certain times. The largest deposit inflows occur in the first quarter of the year when certain of our accounts are credited with tax refund payments from the U.S. Treasury.

While consumer deposit accounts, including prepaid and debit card accounts, comprise the vast majority of our funding needs, we maintain secured borrowing lines with the FHLB and the Federal Reserve. Our collateralized line of credit with the Federal Reserve Bank had available accessible capacity of $2.05 billion as of June 30, 2025, and was collateralized by loans. We have also pledged in excess of $2.16 billion of multifamily loans to the FHLB. As a result, we have approximately $1.03 billion of availability on that line of credit which we can also access at any time. There was no amount outstanding on the Federal Reserve line or on our FHLB line at June 30, 2025. We expect to continue to maintain our facilities with the FHLB and Federal Reserve.

As a holding company conducting substantially all our business through our subsidiaries, the Company’s near-term need for liquidity consists principally of cash for required interest payments on our subordinated debentures, consisting of 2038 Debentures, and senior debt, consisting of $100.0 million senior notes with an interest rate of 4.75% and maturing in August 2025 (the “2025 Senior Notes”). Semi-annual interest payments on the 2025 Senior Notes are approximately $2.4 million, and quarterly interest payments on the 2038 Debentures are approximately $300,000. As of June 30, 2025, we had cash reserves of approximately $7.9 million at the holding company. Stock repurchases are funded by dividends from the Bank, as are interest payments on the above debt instruments. Stock repurchases may be terminated at any time. The holding company’s sources of liquidity are primarily comprised of dividends paid by the Bank to the Company, and the issuance of debt.

Included in our cash and cash-equivalents at June 30, 2025 were $328.6 million of interest-earning deposits which primarily consisted of deposits with the Federal Reserve.

In 2025, $53.1 million of securities purchases were exceeded by $126.0 million of redemptions of securities redemptions. We had outstanding commitments to fund loans, including unused lines of credit, of $1.91 billion and $1.98 billion as of June 30, 2025, and December 31, 2024, respectively. The majority of our commitments are variable rate and originate with SBLOC. The recorded amount

of such commitments has, for many accounts, been based on the full amount of collateral in a customer’s investment account. The funding requirements for such commitments occur on a measured basis over time and would be funded by normal deposit growth. Additionally, these loans are “demand” loans and as such, represent a contingent source of funding.

Capital Resources and Requirements

We must comply with capital adequacy guidelines issued by our regulators. A bank must, in general, have a Tier 1 leverage ratio of 5.00%, a ratio of Tier I capital to risk-weighted assets of 8.0%, a ratio of total capital to risk-weighted assets of 10.0% and a ratio of common equity Tier 1 to risk weighted assets of 6.5% to be considered “well capitalized.” The Tier I leverage ratio is the ratio of Tier 1 capital to average assets for the quarter. “Tier I capital” includes common shareholders’ equity, certain qualifying perpetual preferred stock and minority interests in equity accounts of consolidated subsidiaries, less intangibles. At June 30, 2025, the Bank was “well capitalized” under banking regulations.

The following table sets forth our regulatory capital amounts and ratios for the periods indicated:



	Tier 1 capital	Tier 1 capital	Total capital	Common equity
	to average	to risk-weighted	to risk-weighted	Tier 1 to risk
	assets ratio	assets ratio	assets ratio	weighted assets

As of June 30, 2025
The Bancorp, Inc.	9.40%	14.42%	15.45%	14.42%
The Bancorp Bank, National Association	10.33%	15.80%	16.83%	15.80%
"Well capitalized" institution (under federal regulations-Basel III)	5.00%	8.00%	10.00%	6.50%

As of December 31, 2024
The Bancorp, Inc.	9.41%	13.85%	14.65%	13.85%
The Bancorp Bank, National Association	10.38%	15.25%	16.06%	15.25%
"Well capitalized" institution (under federal regulations-Basel III)	5.00%	8.00%	10.00%	6.50%

Asset and Liability Management

The management of rate sensitive assets and liabilities is essential to controlling interest rate risk and optimizing interest margins. An interest rate sensitive asset or liability is one that, within a defined time period, either matures or experiences an interest rate change in line with general market rates. Interest rate sensitivity measures the relative volatility of an institution’s interest margin resulting from changes in market interest rates. While it is difficult to predict the impact of inflation and responsive Federal Reserve rate changes on our net interest income, the Federal Reserve has historically utilized increases in the overnight federal funds rate as one tool in fighting inflation. As a result of high rates of inflation, the Federal Reserve raised rates in 2022 and in 2023. In the third quarter of 2024 the Federal Reserve began lowering rates and has held rates steady in the first two quarters of 2025. Our largest funding source, prepaid and debit card deposit accounts, contractually adjusts to only a portion of increases or decreases in rates which are largely determined by such Federal Reserve actions. That pricing has generally supported the maintenance of a balance sheet for which net interest income tends to increase with increases in rates. While deposits reprice to only a portion of Federal Reserve rate changes, such changes are immediate. Interest-earning assets, comprised primarily of loans and securities, tend to adjust more fully to rate increases at lagged contractual pricing intervals. The majority of our loans and securities are variable rate and generally reprice monthly or quarterly, although some reprice over several years. Additionally, the impact of loan interest rate floors which must be exceeded before rates on certain loans increase, may result in decreases in net interest income with lesser increases in rates. Cumulative 2022 Federal Reserve interest rate increases resulted in contractual rates on loans generally exceeding rate floors beginning in the second quarter of 2022.

We have adopted policies designed to manage net interest income and preserve capital over a broad range of interest rate movements. To effectively administer the policies and to monitor our exposure to fluctuations in interest rates, we maintain an asset/liability committee, consisting of the Bank’s Chief Executive Officer, Chief Accounting Officer, Interim Chief Financial Officer, Chief Credit Officer and others. This committee meets quarterly to review our financial results, develop strategies to optimize margins and to respond to market conditions. The primary goal of our policies is to optimize margins and manage interest rate risk, subject to overall policy constraints for prudent management of interest rate risk.

We monitor, manage and control interest rate risk through a variety of techniques, including the use of traditional interest rate sensitivity analysis (also known as “gap analysis”) and an interest rate risk management model. With the interest rate risk management model, we project future net interest income and then estimate the effect of various changes in interest rates on that projected net interest income. We also use the interest rate risk management model to calculate the change in net portfolio value over a range of interest rate change scenarios. Traditional gap analysis involves arranging our interest-earning assets and interest-bearing liabilities by repricing periods and then computing the difference (or “interest rate sensitivity gap”) between the assets and liabilities that we estimate will reprice during each time period and cumulatively through the end of each time period.

Both interest rate sensitivity modeling and gap analysis are done at a specific point in time and involve a variety of significant estimates and assumptions. Interest rate sensitivity modeling requires, among other things, estimates of how much and when yields and costs on

individual categories of interest-earning assets and interest-bearing liabilities will respond to general changes in market rates, future cash flows and discount rates. Gap analysis requires estimates as to when individual categories of interest-sensitive assets and liabilities will re-price, and assumes that assets and liabilities assigned to the same repricing period will reprice at the same time and in the same amount. Gap analysis does not account for the fact that repricing of assets and liabilities is discretionary and subject to competitive and other pressures. A gap is considered positive when the amount of interest rate sensitive assets exceeds the amount of interest rate sensitive liabilities. A gap is considered negative when the amount of interest rate sensitive liabilities exceeds interest rate sensitive assets. During a period of falling interest rates, a positive gap would tend to adversely affect net interest income, while a negative gap would tend to result in an increase in net interest income. During a period of rising interest rates, a positive gap would tend to result in an increase in net interest income while a negative gap would tend to affect net interest income adversely.

The following table sets forth the estimated maturity or repricing structure of our interest-earning assets and interest-bearing liabilities at June 30, 2025. Except as stated below, the amounts of assets or liabilities shown which reprice or mature during a particular period were determined in accordance with the contractual terms of each asset or liability. The majority of transaction and savings balances are assumed to be “core” deposits, or deposits that will generally remain with us regardless of market interest rates. We estimate the repricing characteristics of these deposits based on historical performance, past experience, judgmental predictions and other deposit behavior assumptions. However, we may choose not to reprice liabilities proportionally to changes in market interest rates for competitive or other reasons. Additionally, although non-interest-bearing transaction accounts are not paid interest, we estimate certain of the balances will reprice as a result of the contractual fees that are paid to the affinity groups which are based upon a rate index, and therefore are included in interest expense. We have adjusted the transaction account balances in the table downward, to better reflect the impact of their partial adjustment to changes in rates. Loans and security balances, which adjust more fully to market rate changes, are based upon actual balances. The table does not assume any prepayment of fixed-rate loans, mortgage and asset backed securities are scheduled based on their anticipated cash flow, including prepayments based on historical data and current market trends. The table does not necessarily indicate the impact of general interest rate movements on our net interest income because the repricing and related behavior of certain categories of assets and liabilities (for example, prepayments of loans and withdrawal of deposits) is beyond our control. As a result, certain assets and liabilities indicated as repricing within a stated period may in fact reprice at different times and at different rate levels.



	1-90		91-364		1-3		3-5		Over 5
	Days		Days		Years		Years		Years
	(Dollars in thousands)
Interest-earning assets:
Commercial loans, at fair value	$	91,141	$	33,937	$	56,165	$	4,233	$	—
Loans, net of deferred loan fees and costs		3,611,895		636,653		1,321,831		744,071		220,982
Investment securities		243,902		64,389		76,221		205,818		891,170
Interest-earning deposits		328,628		—		—		—		—
Total interest-earning assets		4,275,566		734,979		1,454,217		954,122		1,112,152

Interest-bearing liabilities:
Transaction accounts as adjusted⁽¹⁾		3,852,907		—		—		—		—
Savings and money market		60,122		—		—		—		—
Senior debt and subordinated debentures		109,792		—		—		—		—
Total interest-bearing liabilities		4,022,821		—		—		—		—
Gap	$	252,745	$	734,979	$	1,454,217	$	954,122	$	1,112,152
Cumulative gap	$	252,745	$	987,724	$	2,441,941	$	3,396,063	$	4,508,215
Gap to assets ratio		3%		8%		17%		10%		13%
Cumulative gap to assets ratio		3%		11%		28%		38%		51%

⁽¹⁾Transaction accounts are comprised primarily of demand deposits. While demand deposits are non-interest-bearing, related fees paid to affinity groups may reprice according to specified indices.

The methods used to analyze interest rate sensitivity in this table have a number of limitations. Certain assets and liabilities may react differently to changes in interest rates even though they reprice or mature in the same or similar time periods. The interest rates on certain assets and liabilities may change at different times than market interest rates, with some changing in advance of changes in market rates and some lagging behind changes in market rates. Additionally, the actual prepayments and withdrawals we experience when interest rates change may deviate significantly from those assumed in calculating the data shown in the table. Accordingly, actual results can and often do differ from projections.

We believe that the assumptions utilized in evaluating our estimated net interest income are reasonable; however, the interest rate sensitivity of our assets, liabilities and off-balance sheet financial instruments, as well as the estimated effect of changes in interest rates on estimated net interest income, could vary substantially if different assumptions are used or actual experience differs from presumed behavior of various deposit and loan categories. The following table shows the effects of interest rate shocks on our net portfolio value described as Market Value of Portfolio Equity (“MVPE”) and net interest income. Rate shocks assume that current interest rates change immediately and sustain parallel shifts. For interest rate increases or decreases of 100 and 200 basis points, our policy includes a guideline that our MVPE ratio should not decrease more than 10% and 15%, respectively, and that net interest income should not decrease more than 10% and 15%, respectively. As illustrated in the following table, we complied with our asset/liability policy

guidelines at June 30, 2025. While our modeling suggests that rate increases of 100 and 200 basis points will have a positive impact on net interest income (as shown in the table below), the actual amount of such increase cannot be determined, and there can be no assurance any increase will be realized. Because the Company has emphasized variable rate instruments in its loan and investment portfolios, it tends to benefit from higher interest rate environments. Future Federal Reserve rate reductions may result in a return to lower net interest income levels. In April 2024, the Company purchased approximately $900 million of fixed rate commercial and residential mortgage securities of varying maturities to reduce its exposure to lower levels of net interest income, in anticipation of Federal Reserve rate reductions. In September 2024, the Federal Reserve began to lower rates. Such purchases would also reduce the additional net interest income which would result should the Federal Reserve increase rates. At the time of purchase, those securities had respective estimated weighted average yields and lives of approximately 5.11% and eight years, respectively.


	Net portfolio value at				Net interest income
	June 30, 2025				June 30, 2025
			Percentage				Percentage
Rate scenario	Amount		change		Amount		change
		(Dollars in thousands)

+200 basis points	$	1,650,167		3.73%	$	414,939		4.49%
+100 basis points		1,620,237		1.84%		405,888		2.21%
Flat rate		1,590,888		—		397,101		—
-100 basis points		1,549,702		(2.59%)		388,406		(2.19%)
-200 basis points		1,501,864		(5.60%)		382,074		(3.78%)

Financial Condition

General. Our total assets at June 30, 2025 were $8.84 billion, of which our total loans were $6.54 billion, and our commercial loans, at fair value, were $185.5 million. At December 31, 2024, our total assets were $8.73 billion, of which our total loans were $6.11 billion, and our commercial loans, at fair value were $223.1 million. The increase reflected loan growth in various loan categories, which offset decreases in commercial loans, at fair value as that portfolio continues to run off.

Interest-earning Deposits

At June 30, 2025, we had a total of $328.6 million of interest-earning deposits compared to $564.1 million at December 31, 2024, a decrease of $235.4 million. These deposits were comprised primarily of balances at the Federal Reserve.

Investment Portfolio

For detailed information on the composition and maturity distribution of our investment portfolio, see “Note 5. Investment Securities” to the unaudited consolidated financial statements herein. Total investment securities decreased to $1.48 billion at June 30, 2025, a decrease of $21.4 million, or 1.4%, from December 31, 2024.

For the six months ended June 30, 2025 and 2024, we recognized no credit-related losses on our investment securities portfolio.

Investments in FHLB, ACBB and Federal Reserve Bank stock are recorded at cost and amounted to $16.3 million at June 30, 2025 and $15.6 million at December 31, 2024. Each of these institutions require their correspondent banking institutions to hold stock as a condition of membership. While a fixed stock amount is required by each of these institutions, the FHLB stock requirement increases or decreases with the level of borrowing activity.

At June 30, 2025 and December 31, 2024 no investment securities were encumbered, as lines of credit established for borrowings were collateralized by loans.

The following table shows the contractual maturity distribution and the weighted average yield of our investment portfolio securities as of June 30, 2025 (dollars in thousands). The weighted average yield was calculated by dividing the amount of individual securities to total securities in each category, multiplying by the yield of the individual security and adding the results of those individual computations.


				After			After
	Zero			one to			five to			Over
	to one		Average	five		Average	ten		Average	ten		Average
Available-for-sale	year		yield	years		yield	years		yield	years		yield	Total
U.S. Government agency securities	$	380	2.74%	$	5,400	2.79%	$	13,655	4.96%	$	7,599	3.62%	$	27,034
Asset-backed securities		2,149	6.11%		—	—		165,329	6.08%		75,029	6.04%		242,507
Tax-exempt obligations of states and political subdivisions⁽¹⁾		734	3.20%		1,146	2.30%		1,984	3.87%		6,197	4.44%		10,061
Taxable obligations of states and political subdivisions		13,090	3.01%		13,478	3.59%		1,175	4.33%		2,121	6.00%		29,864
Residential mortgage-backed securities		50	2.60%		43	2.64%		5,033	4.52%		413,991	5.02%		419,117
Collateralized mortgage obligation securities		—	—		2,859	2.46%		9	3.32%		18,932	3.44%		21,800
Commercial mortgage-backed securities		20,494	1.52%		162,723	3.98%		446,959	4.75%		100,941	3.61%		731,117
Total	$	36,897		$	185,649		$	634,144		$	624,810		$	1,481,500
Weighted average yield			2.37%			3.88%			5.10%			4.85%

⁽¹⁾If adjusted to their taxable equivalents, yields would approximate 4.05%, 2.91%, 4.90%, and 5.62% for zero to one year, one to five years, five to ten years, and over ten years, respectively, at a federal tax rate of 21%.

Commercial Loans, at Fair Value

Commercial loans, at fair value are comprised of non-SBA commercial real estate loans and SBA loans which had been originated for sale or securitization through the first quarter of 2020, and which are now being held on the balance sheet. SBA loans are valued on a pooled basis and commercial real estate bridge loans are valued individually. Commercial loans, at fair value decreased to $185.5 million at June 30, 2025 from $223.1 million at December 31, 2024, primarily reflecting the impact of loan repayments as this portfolio runs off. These loans continue to be accounted for at fair value. In the third quarter of 2021 we resumed originating non-SBA commercial real estate loans, after suspending such originations in the first quarter of 2020. These originations reflect lending criteria similar to the existing loan portfolio and are primarily comprised of multifamily (apartment buildings) collateral. The new originations, which are intended to be held for investment, are accounted for at amortized cost.

Loan Portfolio

Total loans increased to $6.54 billion at June 30, 2025 from $6.11 billion at December 31, 2024.

The following table summarizes our loan portfolio, excluding loans held at fair value, by loan category for the periods indicated (dollars in thousands):


	June 30,		December 31,
	2025		2024
SBL non-real estate	$	204,087	$	190,322
SBL commercial mortgage		723,754		662,091
SBL construction		30,705		34,685
SBLs		958,546		887,098
Direct lease financing		698,086		700,553
SBLOC / IBLOC⁽¹⁾		1,601,405		1,564,018
Advisor financing		272,155		273,896
Real estate bridge loans		2,140,039		2,109,041
Consumer fintech⁽²⁾		680,487		454,357
Other loans⁽³⁾		169,945		111,328
		6,520,663		6,100,291
Unamortized loan fees and costs		14,769		13,337
Total loans, including unamortized loan fees and costs	$	6,535,432	$	6,113,628


	June 30,		December 31,
	2025		2024
SBLs, including costs net of deferred fees of $11,570 and $9,979
for June 30, 2025 and December 31, 2024, respectively	$	970,116	$	897,077
SBLs included in commercial loans, at fair value		76,830		89,902
Total SBLs⁽⁴⁾	$	1,046,946	$	986,979

⁽¹⁾SBLOC are collateralized by marketable securities, while IBLOC, are collateralized by the cash surrender value of insurance policies. At June 30, 2025 and December 31, 2024, IBLOC loans amounted to $513.9 million and $548.1 million, respectively.

⁽²⁾ At June 30, 2025 consumer fintech loans consisted of $346.9 million of secured credit card loans, with the balance comprised of other short-term extensions of credit.

⁽⁴⁾The SBLs held at fair value are comprised of the government guaranteed portion of 7(a) Program loans at the dates indicated.

The following table summarizes our SBL portfolio, including loans held at fair value, by loan category as of June 30, 2025 (dollars in thousands):


	Loan principal
U.S. government guaranteed portion of SBA loans⁽¹⁾	$	396,401
PPP loans⁽¹⁾		15
Commercial mortgage SBA⁽²⁾		381,946
Construction SBA⁽³⁾		18,022
Non-guaranteed portion of U.S. government guaranteed 7(a) Program loans⁽⁴⁾		117,382
Non-SBA SBLs		116,103
Other⁽⁵⁾		4,452
Total principal	$	1,034,321
Unamortized fees and costs		12,625
Total SBLs	$	1,046,946

⁽¹⁾Includes the portion of SBA 7(a) Program loans and PPP loans which have been guaranteed by the U.S. government, and therefore are assumed to have no credit risk.

⁽²⁾Substantially all these loans are made under the 504 Program, which dictates origination date LTV percentages, generally 50-60%, to which The Bancorp adheres.

⁽³⁾Includes $13.4 million in 504 Program first mortgages with an origination date LTV of 50-60% and $4.6 million in SBA interim loans with an approved SBA post-construction full takeout/payoff.

⁽⁴⁾Includes the unguaranteed portion of 7(a) Program loans which are generally 70% or more guaranteed by the U.S. government. SBA 7(a) Program loans are not made on the basis of real estate LTV; however, they are subject to SBA's "All Available Collateral" rule which mandates that to the extent a borrower or its 20% or greater principals have available collateral (including personal residences), the collateral must be pledged to fully collateralize the loan, after applying SBA-determined liquidation rates. In addition, all 7(a) Program loans and 504 Program loans require the personal guaranty of all 20% or greater owners.

⁽⁵⁾Comprised of $4.5 million of loans sold that do not qualify for true sale accounting.

The following table summarizes our SBL portfolio, excluding the government guaranteed portion of SBA 7(a) Program loans and PPP loans, by loan type as of June 30, 2025 (dollars in thousands):


	SBL commercial mortgage⁽¹⁾		SBL construction⁽¹⁾		SBL non-real estate		Total		% Total
Hotels (except casino hotels) and motels	$	87,716	$	71	$	13	$	87,800	14%
Funeral homes and funeral services		43,532		—		37,559		81,091	13%
Full-service restaurants		30,620		2,146		2,566		35,332	6%
Child day care services		24,554		267		2,545		27,366	4%
Car washes		11,390		10,966		80		22,436	4%
Homes for the elderly		15,528		—		64		15,592	2%
Gasoline stations with convenience stores		14,818		467		132		15,417	2%
Outpatient mental health and substance abuse centers		15,104		—		207		15,311	2%
General line grocery merchant wholesalers		13,308		—		—		13,308	2%
Fitness and recreational sports centers		7,482		—		2,376		9,858	2%
Plumbing, heating, and air-conditioning companies		8,885		—		691		9,576	2%
Nursing care facilities		9,405		—		—		9,405	1%
Caterers		9,312		—		—		9,312	1%
Offices of lawyers		8,693		—		—		8,693	1%
Used car dealers		7,053		—		—		7,053	1%
Limited-service restaurants		3,495		—		3,410		6,905	1%
All other specialty trade contractors		5,811		—		959		6,770	1%
General warehousing and storage		6,127		—		—		6,127	1%
Automotive body, paint, and interior repair		5,786		—		310		6,096	1%
Other accounting services		5,525		—		325		5,850	1%
Appliance repair and maintenance		5,827		—		—		5,827	1%
Residential remodelers		4,990		—		334		5,324	1%
Other⁽²⁾		187,436		6,413		29,155		223,004	36%
Total	$	532,397	$	20,330	$	80,726	$	633,453	100%

⁽¹⁾Of the SBL commercial mortgage and SBL construction loans, $152.7 million represents the total of the non-guaranteed portion of SBA 7(a) Program loans and non-SBA loans. The balance of those categories represents SBA 504 Program loans with 50%-60% origination date LTVs. SBL Commercial excludes $4.5 million of loans sold that do not qualify for true sale accounting.

⁽²⁾Loan types of less than $5.0 million are spread over approximately one hundred different business types.

The following table summarizes our SBL portfolio, excluding the government guaranteed portion of SBA 7(a) Program loans and PPP loans, by state as of June 30, 2025 (dollars in thousands):


	SBL commercial mortgage⁽¹⁾		SBL construction⁽¹⁾		SBL non-real estate		Total		% Total
California	$	141,348	$	5,613	$	6,229	$	153,190	24%
Florida		82,888		6,503		4,339		93,730	15%
North Carolina		43,977		—		4,263		48,240	8%
New York		41,305		71		3,076		44,452	7%
Texas		28,867		4,293		6,277		39,437	6%
New Jersey		31,249		267		6,688		38,204	6%
Pennsylvania		19,312		—		12,833		32,145	5%
Georgia		25,071		3,036		1,938		30,045	5%
Other states		118,380		547		35,083		154,010	24%
Total	$	532,397	$	20,330	$	80,726	$	633,453	100%

The following table summarizes the ten largest loans in our SBL portfolio, all commercial mortgages, including loans held at fair value, as of June 30, 2025 (dollars in thousands):


Type⁽¹⁾	State	SBL commercial mortgage
General line grocery merchant wholesalers	California	$	13,308
Funeral homes and funeral services	Maine		12,262
Funeral homes and funeral services	Pennsylvania		11,859
Outpatient mental health and substance abuse center	Florida		9,714
Hotel	Florida		8,151
Lawyer's office	California		7,751
Hotel	Virginia		6,846
Hotel	North Carolina		6,606
Funeral homes and funeral services	Maine		6,575
Charter bus industry	New York		6,388
Total		$	89,460

⁽¹⁾The table above does not include loans to the extent that they are U.S. government guaranteed.

Commercial real estate loans, primarily real estate bridge loans and excluding SBA loans, were as follows as of June 30, 2025 (dollars in thousands):


	# Loans	Balance		Weighted average origination date LTV		Weighted average interest rate
Real estate bridge loans (multifamily apartment loans recorded at amortized cost)⁽¹⁾	177	$	2,140,039		70%		8.50%

Non-SBA commercial real estate loans, at fair value:
Multifamily (apartment bridge loans)⁽¹⁾	2	$	68,742		69%		7.06%
Hospitality (hotels and lodging)	1		19,000		66%		9.75%
Retail	2		12,235		72%		8.20%
Other	2		9,038		71%		4.96%
	7		109,015		69%		7.52%
Fair value adjustment			(346)
Total non-SBA commercial real estate loans, at fair value			108,669
Total commercial real estate loans		$	2,248,708		70%		8.45%

⁽¹⁾ In the third quarter of 2021, we resumed the origination of bridge loans for multifamily apartment rehabilitation. These are similar to the multifamily apartment loans carried at fair value, but at origination are intended to be held on the balance sheet, so they are not accounted for at fair value. In addition to “as is” origination date appraisals, on which the weighted average origination date LTVs are based, third-party appraisers also estimated “as stabilized” values, which represents additional potential collateral value as rehabilitation progresses, and units are re-leased at stabilized rental rates. The weighted average origination date “as stabilized” LTV was estimated at 60%.

The following table summarizes our commercial real estate loans, primarily real estate bridge loans and excluding SBA loans, by state as of June 30, 2025 (dollars in thousands):


	Balance		Origination date LTV
Texas	$	680,653		71%
Georgia		325,866		70%
Florida		232,006		68%
New Jersey		136,239		69%
Indiana		129,616		71%
Ohio		118,587		71%
Michigan		74,923		64%
Other States each <$65 million		550,818		70%
Total	$	2,248,708		70%

The following table summarizes our fifteen largest commercial real estate loans, primarily real estate bridge loans and excluding SBA loans, as of June 30, 2025 (dollars in thousands). All of these loans are multifamily loans.


	Balance		Origination date LTV
Texas	$	45,520		75%
Texas		40,215		64%
Michigan		38,991		62%
Texas		36,318		67%
Florida		34,850		72%
New Jersey		34,486		62%
Pennsylvania		33,600		63%
Indiana		33,588		76%
New Jersey		31,277		71%
Texas		31,050		77%
Georgia		29,650		69%
Ohio		29,150		74%
Texas		26,923		79%
New Jersey		26,263		71%
Texas		25,000		70%
15 largest commercial real estate loans	$	496,881		70%

The following table summarizes our institutional banking portfolio by type as of June 30, 2025 (dollars in thousands):


Type	Principal		% of total
SBLOC	$	1,087,522	58%
IBLOC		513,883	27%
Advisor financing		272,155	15%
Total	$	1,873,560	100%

For SBLOC, we generally lend up to 50% of the value of equities and 80% for investment grade securities. While the value of equities has fallen in excess of 30% in recent years, the reduction in collateral value of brokerage accounts collateralizing SBLOCs generally has been less. This is because many collateral accounts are “balanced” and accordingly, have a component of debt securities, which have either not decreased in value as much as equities, or in some cases may have increased in value. Further, many of these accounts have the benefit of professional investment advisors who provided some protection against market downturns, through diversification and other means. Additionally, borrowers often utilize only a portion of collateral value, which lowers the percentage of principal to the market value of collateral.

The following table summarizes our ten largest SBLOC loans as of June 30, 2025 (dollars in thousands):


	Principal amount		% Principal to collateral
	$	10,260		34%
		9,039		17%
		8,359		84%
		8,264		12%
		7,734		47%
		7,651		19%
		7,069		31%
		6,685		20%
		6,100		4%
		6,096		38%
Total and weighted average	$	77,257		31%

IBLOC loans are backed by the cash value of life insurance policies which have been assigned to us. We generally lend up to 95% of such cash value. Our underwriting standards require approval of the insurance companies which carry the policies backing these loans. Currently, fifteen insurance companies have been approved and, as of July 15, 2025, all were rated A- or better by AM Best.

The following table summarizes our direct lease financing portfolio by type as of June 30, 2025 (dollars in thousands):


	Principal balance⁽¹⁾		% Total
Construction		126,788		18%
Government agencies and public institutions⁽²⁾		126,680		18%
Real estate and rental and leasing		98,399		14%
Waste management and remediation services		92,282		13%
Health care and social assistance		28,689		4%
Other services (except public administration)		24,557		4%
Professional, scientific, and technical services		22,926		3%
Wholesale trade		18,406		3%
General freight trucking		16,439		2%
Transit and other transportation		12,439		2%
Finance and insurance		12,073		2%
Arts, entertainment, and recreation		11,460		2%
Other and non-classified		106,948		15%
Total	$	698,086		100%

⁽¹⁾Of the total $698.1 million of direct lease financing, $643.8 million consisted of vehicle leases with the remaining balance consisting of equipment leases.

⁽²⁾Includes public universities and school districts.

The following table summarizes our direct lease financing portfolio by state as of June 30, 2025 (dollars in thousands):


	Principal balance		% Total
Florida		120,855		17%
New York		59,487		9%
Utah		51,469		7%
Connecticut		48,517		7%
California		44,879		6%
Pennsylvania		43,024		6%
North Carolina		37,952		5%
Maryland		36,452		5%
New Jersey		34,350		5%
Texas		21,632		3%
Idaho		16,110		2%
Georgia		15,056		2%
Washington		13,590		2%
Alabama		13,250		2%
Ohio		12,886		2%
Other states		128,577		20%
Total	$	698,086		100%

The following table presents loan categories by maturity for the period indicated. Actual repayments historically have, and will likely in the future, differ significantly from contractual maturities because individual borrowers generally have the right to prepay loans, with or without prepayment penalties. See “Asset and Liability Management” in this MD&A for a discussion of interest rate risk.


		June 30, 2025
		Within		One to five		After five but
		one year		years		within 15 years		After 15 years		Total
		(Dollars in thousands)
SBL non-real estate	$	1,063	$	26,834	$	199,344	$	983	$	228,224
SBL commercial mortgage		20,936		36,756		242,832		487,243		787,767
SBL construction		4,516		—		4,747		21,692		30,955
Leasing		87,923		584,274		26,678		—		698,875
SBLOC / IBLOC		1,607,593		—		—		—		1,607,593
Advisor financing		1,152		98,671		175,599		—		275,422
Real estate bridge lending		1,323,921		808,863		—		—		2,132,784
Consumer fintech		680,487		—		—		—		680,487
Other loans		148,832		3,390		8,880		9,030		170,132
Loans at fair value excluding SBL		57,455		49,661		1,553		—		108,669
	$	3,933,878	$	1,608,449	$	659,633	$	518,948	$	6,720,908

Loan maturities after one year with:
Fixed rates
SBL non-real estate			$	3,416	$	5	$	—	$	3,421
SBL commercial mortgage				11,271		2,700		—		13,971
Leasing				572,886		24,769		—		597,655
Advisor financing				98,671		173,953		—		272,624
Real estate bridge lending				740,000		—		—		740,000
Other loans				2,664		3,853		7,979		14,496
Loans at fair value excluding SBL				49,661		—		—		49,661
Total loans at fixed rates			$	1,478,569	$	205,280	$	7,979	$	1,691,828

Variable rates
SBL non-real estate			$	23,418	$	199,339	$	983	$	223,740
SBL commercial mortgage				25,485		240,132		487,243		752,860
SBL construction				—		4,747		21,692		26,439
Leasing				11,388		1,909		—		13,297
Advisor financing				—		1,646		—		1,646
Real estate bridge lending				68,863		—		—		68,863
Other loans				726		5,027		1,051		6,804
Loans at fair value excluding SBL				—		1,553		—		1,553
Total at variable rates			$	129,880	$	454,353	$	510,969	$	1,095,202

Total			$	1,608,449	$	659,633	$	518,948	$	2,787,030

Allowance for Credit Losses

We review the adequacy of our ACL on at least a quarterly basis to determine a provision for credit losses to maintain our ACL at a level we believe is appropriate to recognize current expected credit losses. Our Chief Credit Officer oversees the loan review department, which measures the adequacy of the ACL independently of loan production officers. For detailed information on the ACL methodology, see “Note 6. Loans” to the unaudited consolidated financial statements herein.

At June 30, 2025, the ACL amounted to $59.4 million, which represented a $14.5 million increase compared to the $44.9 million ACL at December 31, 2024. The increase primarily reflected an increase in reserves on consumer fintech loans. The increase in the allowance related to consumer fintech loans correlates to the credit enhancement asset on the balance sheet. The recording of the credit enhancement asset results in credit enhancement income recorded in non-interest income. Accordingly, there was no impact on net income.

A description of loan review coverage targets is set forth below.

On a quarterly basis a sampling of the largest SBLOC and IBLOC loans are reviewed. A minimum of 20 loans will be reviewed each quarter. The coverage percentage is on a cumulative basis, as loans are generally reviewed one time unless classified as either special mention or substandard.

SBLOC – The targeted review threshold was 40% comprised of a sample of large balance SBLOCs by commitment. At June 30, 2025, approximately 53% of the SBLOC portfolio had been reviewed.

IBLOC – The targeted review threshold was 40% comprised of a sample of large balance IBLOCs by commitment. At June 30, 2025, approximately 66% of the IBLOC portfolio had been reviewed.

The following loan review percentages are performed annually for the portfolios listed below. At June 30, 2025, in excess of 50% of the total loan portfolio was reviewed by the loan review department or, for SBLs, rated internally by that department. In addition to the review of all loans classified as either special mention or substandard, the targeted coverages and scope of the reviews are risk-based and vary according to each portfolio as follows:

Advisor Financing – The targeted review threshold was 65%. At June 30, 2025, approximately 58% of the investment advisor financing portfolio had been reviewed. The loan balance review threshold was $1.0 million.

SBLs – The targeted review threshold was 65%. The loan balance review threshold was $1.5 million. At June 30, 2025, 38% of the non-government guaranteed SBL loan portfolio had been reviewed.

Direct Lease Financing – The targeted review threshold was 55%. The loan balance review threshold was $1.5 million. At June 30, 2025, approximately 26% of the leasing portfolio had been reviewed.

Commercial Real Estate Bridge Loans, at fair value and Commercial Real Estate Bridge Loans, at amortized cost (floating and fixed rate, excluding SBA, which are included in SBLs above) – The targeted review threshold was 75%. At June 30, 2025, approximately 50% of the floating and fixed rate, non-SBA commercial real estate bridge loans had been reviewed.

Other minor loan categories are reviewed at the discretion of the loan review department.

The following tables present delinquencies by type of loan as of the dates specified (dollars in thousands):



	June 30, 2025
	30-59 days		60-89 days		90+ days				Total past due				Total
	past due		past due		still accruing		Non-accrual		and non-accrual		Current		loans
SBL non-real estate	$	—	$	—	$	—	$	5,976	$	5,976	$	198,111	$	204,087
SBL commercial mortgage		—		3,012		—		8,340		11,352		712,402		723,754
SBL construction		—		—		—		2,892		2,892		27,813		30,705
Direct lease financing		9,201		3,727		307		7,236		20,471		677,615		698,086
SBLOC / IBLOC		13,944		386		135		469		14,934		1,586,471		1,601,405
Advisor financing		—		—		—		—		—		272,155		272,155
Real estate bridge loans⁽¹⁾		—		—		—		36,677		36,677		2,103,362		2,140,039
Consumer fintech		18,930		1,113		434		—		20,477		660,010		680,487
Other loans		2		61		7		—		70		169,875		169,945
Unamortized loan fees and costs		—		—		—		—		—		14,769		14,769
	$	42,077	$	8,299	$	883	$	61,590	$	112,849	$	6,422,583	$	6,535,432



	December 31, 2024
	30-59 days		60-89 days		90+ days				Total past due				Total
	past due		past due		still accruing		Non-accrual		and non-accrual		Current		loans
SBL non-real estate	$	229	$	—	$	871	$	2,635	$	3,735	$	186,587	$	190,322
SBL commercial mortgage		—		—		336		4,885		5,221		656,870		662,091
SBL construction		—		—		—		1,585		1,585		33,100		34,685
Direct lease financing		7,069		1,923		1,088		6,026		16,106		684,447		700,553
SBLOC / IBLOC		20,991		1,808		3,322		503		26,624		1,537,394		1,564,018
Advisor financing		—		—		—		—		—		273,896		273,896
Real estate bridge loans		—		—		—		12,300		12,300		2,096,741		2,109,041
Consumer fintech		13,419		681		213		—		14,313		440,044		454,357
Other loans		49		—		—		—		49		111,279		111,328
Unamortized loan fees and costs		—		—		—		—		—		13,337		13,337
	$	41,757	$	4,412	$	5,830	$	27,934	$	79,933	$	6,033,695	$	6,113,628

Although we consider our ACL to be adequate based on information currently available, future additions to the ACL may be necessary due to changes in economic conditions, our ongoing loss experience and that of our peers, changes in management’s assumptions as to future delinquencies, recoveries and losses, deterioration of specific credits and management’s intent with regard to the disposition of loans and leases.

Management estimates the ACL quarterly and for most loan categories uses relevant available internal and external historical loan performance information to determine the quantitative component of the reserve, and current economic conditions and reasonable and supportable forecasts and other factors to determine the qualitative component of the reserve. Reserves on specific credit-deteriorated loans comprise the third and final component of the reserve. Historical credit loss experience provides the quantitative basis for the estimation of expected credit losses over the estimated remaining life of the loans. The qualitative component of the ACL is designed to be responsive to changes in portfolio credit quality and the impact of current and future economic conditions on loan performance and is subjective. The review of the appropriateness of the ACL is performed by the Chief Credit Officer and presented to the Audit Committee of the Company’s Board of Directors for review. The Company uses the vintage analysis to determine the allowance for the SBL, leasing and REBL portfolios, the probability of default/loss given default for the SBLOC, IBLOC and Consumer Fintech loan portfolios and discounted cash flow for the other loan portfolio. For the vintage analysis the loans are segregated by product type, to recognize differing risk characteristics within portfolio segments, and an average historical loss rate is calculated for each product type. Loss rates are computed by classifying net charge-offs by year of loan origination and dividing into total originations for that specific year. The average loss rate is then projected over the estimated remaining loan lives unique to each loan pool, to determine estimated lifetime losses. For the probability of default/loss given default the Company calculates the likelihood a borrower will default and then the expected loss after the default occurs. The discounted cash flow method estimates expected credit losses by projecting the cash flows of a financial asset over its lifetime, discounting those flows back to their present value, and comparing the result to the asset's amortized cost basis. Loans that do not share risk characteristics are evaluated on an individual basis. If foreclosure is believed to be probable or repayment is expected from the sale of collateral, a reserve for deficiency is established within the ACL. Those reserves are estimated based on the difference between loan principal and the estimated fair value of the collateral, adjusted for estimated disposition costs.

The Company also considers the need for an additional ACL based upon qualitative factors such as current loan performance statistics by pool, and economic conditions. These qualitative factors are intended to account for forward looking expectations over a twelve-to-eighteen-month period not reflected in historical loss rates and otherwise unaccounted for in the quantitative process. Accordingly, such factors may increase or decrease the allowance compared to historical loss rates as the Company’s forward-looking expectations change. The qualitative factor percentages are applied against the pool balances as of the end of the period. Aside from the qualitative adjustments to account for forward looking expectations of loss over a twelve-to-eighteen-month projection period, the balance of the ACL reverts to the Company’s quantitative analysis derived from its historical loss rates. The qualitative and quantitative historical loss rate components, together with the allowances on specific credit-deteriorated loans, comprise the total ACL.

The Company ranks its qualitative factors in five levels: minimal, low, moderate, moderate-high, and high-risk. The individual qualitative factors for each portfolio segment have their own scale based on an analysis of that segment. A high-risk ranking results in the largest increase in the ACL calculation with each level below having a lesser impact on a sliding scale. The qualitative factors used for each portfolio are described below in the description of each portfolio segment.

A similar process is employed to calculate an ACL assigned to off-balance sheet commitments, which are comprised of unfunded loan commitments and letters of credit. That ACL for unfunded commitments is recorded in other liabilities. Even though portions of the ACL may be allocated to loans that have been individually measured for credit deterioration, the entire ACL is available for any credit that, in management’s judgment, should be charged off.

At June 30, 2025, the ACL amounted to $59.4 million of which $11.2 million of allowances resulted from the Company’s historical charge-off ratios, $27.0 million from consumer fintech loans, and $4.8 million from reserves on specific loans, with the balance comprised of the qualitative components. The $11.2 million resulted primarily from SBA non-real estate lending and leasing charge-offs. For non-consumer fintech loans, the proportion of qualitative reserves compared to charge-off history related reserves reflects the general absence of charge-offs in the Company’s largest loan portfolios consisting of SBLOC and IBLOC and real estate bridge lending which results, at least in part, from the nature of related collateral. Such collateral respectively consists of marketable securities, the cash value of life insurance and workforce apartment buildings. As charge-offs are nonetheless possible, significant subjectivity is required to consider qualitative factors to derive the related components of the allowance. For consumer fintech loans, net charge offs correlate to like amounts of credit enhancement income with no impact on net income.

The Company had not, prior to the fourth quarter of 2023, increased the economic factor for multifamily real estate bridge lending. While Federal Reserve rate increases directly increase real estate bridge loan floating-rate borrowing costs, those borrowers are required to purchase interest rate caps that will partially limit the increase in borrowing costs during the term of the loan. Additionally, there continues to be several additional mitigating factors within the multifamily sector that should continue to fuel demand. Higher interest rates are increasing the cost to purchase a home, which in turn is increasing the number of renters and subsequent demand for multifamily. The softening demand for new homes should continue to exacerbate the current housing shortage, and therefore continue to fuel demand for multifamily apartment homes. Additionally, higher rents in the multifamily sector are causing renters to be more price sensitive, which is driving demand for most of the apartment buildings within the Company’s loan portfolio which management considers “workforce” housing. At June 30, 2025, real estate bridge loans classified as special mention and substandard respectively amounted to $91.4 million and $124.4 million compared to $84.4 million and $134.4 million at December 31, 2024. Each classified loan was evaluated for a potential increase in the allowance for credit losses (“ACL”) on the basis of the aforementioned third-party appraisals of apartment building collateral. On the basis of “as is” and “as stabilized” LTVs, increases to the allowance were not required.

The current allowance for credit losses for REBL, is primarily based upon historical industry losses for multi-family loans, in the absence of significant charge-offs within the Company’s REBL portfolio. As a result of increasing amounts of loans classified as special mention and substandard, the Company evaluated potential related sensitivity for REBL in the third quarter of 2024. Such evaluation is inherently subjective as it requires material estimates that may be susceptible to change as more information becomes available. As a result, the Company added a new qualitative factor to its ACL analysis.

The economic qualitative factor is based on the estimated impact of economic conditions on the loan pools, as distinguished from the economic factors themselves, for the following reasons. The Company has experienced limited multifamily (apartment building) loan charge-offs, despite stressed economic conditions. Accordingly, the ACL for this pool was derived from a qualitative factor based on industry loss information for multifamily housing. The Company’s charge-offs have been miniscule for SBLOC and IBLOC notwithstanding stressed economic periods, and their ACL is accordingly also determined by a qualitative factor. Investment advisor loans were first offered in 2020 with limited performance history, during which charge-offs have not been experienced. For investment advisor loans, the nature of the underlying ultimate repayment source was considered, namely the fee-based advisory income streams resulting from investment portfolios under management, and the impact changes in economic conditions would have on those payment streams. The qualitative factors used for this and the other portfolios are described below in the description of each portfolio segment. Additionally, the Company’s charge-off histories for SBLs, primarily SBA, and leases have not correlated with economic conditions, including trends in unemployment. While specific economic factors did not correlate with actual historical losses, multiple economic factors are considered in the economic qualitative factor. For the non-guaranteed portion of SBA loans, leases, real estate bridge lending and investment advisor financing, the Company’s loss forecasting analysis included a review of industry statistics. However, the Company’s own charge-off history and average life estimates, for categories in which the Company has experienced charge-offs, was the primary quantitatively derived element in the forecasts. The qualitative component results from management’s qualitative assessments which consider internal and external inputs.

The following table summarizes select asset quality ratios for each of the periods indicated:


	For the six months ended		For the year ended
	or as of June 30,		or as of December 31,
	2025	2024	2024
Ratio of:
ACL to total loans	0.91%	0.51%	0.73%
ACL to non-performing loans⁽¹⁾	95.07%	148.91%	132.84%
Non-performing loans to total loans⁽¹⁾	0.96%	0.34%	0.55%
Non-performing assets to total assets⁽¹⁾	1.45%	1.08%	1.14%
Net charge-offs to average loans	1.23%	0.05%	0.40%

⁽¹⁾Includes loans 90 days past due still accruing interest.

The ratio of the ACL to total loans increased to 0.91% as of June 30, 2025 from 0.51% at June 30, 2024 as the ACL increased proportionately more than total loans. The $30.8 million increase in the ACL between those dates, reflected approximately $1.4 million of increased reserves on specific distressed credits. In the third quarter of 2024, $2.0 million was added for a new related REBL qualitative factor tied directly to loans rated special mention and substandard. The largest component of the increase was the $27.0 million reserve on consumer fintech loans at June 30, 2025. As with the $75.0 million of net charge-offs described under “Net Charge-offs” below, the $27.0 million correlated with a like amount of consumer fintech loan credit enhancement income recorded under non-interest income. Accordingly, there was no impact on net income. Losses have not been incurred on such loans, as the result of applicable credit enhancements. The ratio of the ACL to non-performing loans decreased to 95.07% at June 30, 2025, from 148.91% at June 30, 2024, primarily as a result of the increase in non-performing loans which proportionately exceeded the increase in the ACL. As a result, the ratio of non-performing loans to total loans increased to 0.96% at June 30, 2025 from 0.34% at June 30, 2024. The increase in non-performing loans also was reflected in the ratio of non-performing assets to total assets which increased to 1.45% at June 30, 2025 from 1.08% at June 30, 2024. The ratio of net charge-offs to average loans was 1.23% for the six months ended June 30, 2025, and 0.05% for the six months ended June 30, 2024. The increase in net charge-offs reflected consumer fintech net charge-offs, which were correlated to a like amount of consumer fintech loan credit enhancement income, with no impact on net income.

Net Charge-offs

Net charge-offs were $76.9 million for the six months ended June 30, 2025, an increase of $74.3 million from net charge-offs of $2.6 million during the six months ended June 30, 2024. In the six months ended 2025, the Company, based on contractual agreements, recorded $75.0 million of net charge-offs related to consumer fintech loans, and correlated amounts in the provision for credit losses and in non-interest income with no impact to net income.

The following tables reflect the relationship of year-to-date average loans outstanding, based upon quarter end averages, and net charge-offs by loan category (dollars in thousands):


	June 30, 2025
	SBL non-real estate		SBL commercial mortgage		SBL construction		Direct lease financing		SBLOC / IBLOC		Advisor financing		Real estate bridge loans		Consumer fintech		Other loans
Charge-offs	$	171	$	—	$	—	$	1,520	$	—	$	—	$	—	$	89,627	$	704
Recoveries		(61)		—		—		(429)		—		—		—		(14,599)		(4)
Net charge-offs	$	110	$	—	$	—	$	1,091	$	—	$	—	$	—	$	75,028	$	700

Average loan balance	$	197,205	$	692,923	$	32,695	$	699,320	$	1,582,712	$	273,026	$	2,124,540	$	567,422	$	140,637
Ratio of net charge-offs during the period to average loans during the period		0.06%		—		—		0.16%		—		—		—		13.22%		0.50%


	June 30, 2024
	SBL non-real estate		SBL commercial mortgage		SBL construction		Direct lease financing		SBLOC / IBLOC		Advisor financing		Real estate bridge loans		Consumer fintech		Other loans
Charge-offs	$	417	$	—	$	—	$	2,301	$	—	$	—	$	—	$	—	$	16
Recoveries		(32)		—		—		(59)		—		—		—		—		—
Net charge-offs	$	385	$	—	$	—	$	2,242	$	—	$	—	$	—	$	—	$	16

Average loan balance	$	150,200	$	630,935	$	26,933	$	699,857	$	1,578,564	$	230,883	$	2,073,667	$	23,360	$	51,131
Ratio of net charge-offs during the period to average loans during the period		0.26%		—		—		0.32%		—		—		—		—		0.03%

We review charge-offs at least quarterly in loan surveillance meetings which include the chief credit officer, the loan review department and other senior credit officers in a process which includes identifying any trends or other factors impacting portfolio management. In recent periods charge-offs have been primarily comprised of the non-guaranteed portion of SBA 7(a) loans and leases. The charge-offs have resulted from individual borrower or business circumstances as opposed to overall trends or other factors.

Non-accrual Loans, Loans 90 Days Delinquent and Still Accruing, OREO and Modified Loans

Loans are considered to be non-performing if they are on a non-accrual basis or they are past due 90 days or more and still accruing interest. A loan which is past due 90 days or more and still accruing interest remains on accrual status only when it is both adequately secured as to principal and interest and is in the process of collection. We had $66.1 million of OREO at June 30, 2025 and $62.0 million of OREO at December 31, 2024. The following tables summarize our non-performing loans, OREO, and loans past due 90 days or more still accruing interest.



	June 30,		December 31,
	2025		2024
	(Dollars in thousands)
Non-accrual loans
SBL non-real estate	$	5,976	$	2,635
SBL commercial mortgage		8,340		4,885
SBL construction		2,892		1,585
Direct leasing		7,236		6,026
IBLOC		469		503
Real estate bridge loans⁽¹⁾		36,677		12,300
Total non-accrual loans		61,590		27,934

Loans past due 90 days or more and still accruing		883		5,830
Total non-performing loans		62,473		33,764
OREO		66,054		62,025
Non-accrual investment		—		3,462
Total non-performing assets	$	128,527	$	99,251

The following table summarizes the Company’s non-accrual loans and loans past due 90 days or more, by year of origination, at June 30, 2025 and December 31, 2024:


As of June 30, 2025	2025		2024		2023		2022		2021		Prior		Revolving loans at amortized cost		Total
SBL non-real estate
90+ Days past due	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Non-accrual		—		535		2,347		1,410		343		1,341		—		5,976
Total SBL non-real estate		—		535		2,347		1,410		343		1,341		—		5,976

SBL commercial mortgage
90+ Days past due		—		—		—		—		—		—		—		—
Non-accrual		—		—		—		1,380		5,493		1,467		—		8,340
Total SBL commercial mortgage		—		—		—		1,380		5,493		1,467		—		8,340

SBL construction
90+ Days past due		—		—		—		—		—		—		—		—
Non-accrual		—		—		—		—		2,182		710		—		2,892
Total SBL construction		—		—		—		—		2,182		710		—		2,892

Direct lease financing
90+ Days past due		18		19		4		186		—		80		—		307
Non-accrual		—		3,208		1,262		1,975		717		74		—		7,236
Total direct lease financing		18		3,227		1,266		2,161		717		154		—		7,543

SBLOC
90+ Days past due		—		—		—		—		—		—		—		—
Non-accrual		—		—		—		—		—		—		—		—
Total SBLOC		—		—		—		—		—		—		—		—

IBLOC
90+ Days past due		—		—		—		—		—		—		135		135
Non-accrual		—		—		—		—		—		—		469		469
Total IBLOC		—		—		—		—		—		—		604		604

Advisor Financing
90+ Days past due		—		—		—		—		—		—		—		—
Non-accrual		—		—		—		—		—		—		—		—
Total advisor financing		—		—		—		—		—		—		—		—

Real estate bridge loans
90+ Days past due		—		—		—		—		—		—		—		—
Non-accrual		—		—		—		26,923		9,754		—		—		36,677
Total real estate bridge loans		—		—		—		26,923		9,754		—		—		36,677

Consumer fintech
90+ Days past due		165		81		—		—		—		—		188		434
Non-accrual		—		—		—		—		—		—		—		—
Total consumer fintech		165		81		—		—		—		—		188		434

Other loans
90+ Days past due		—		—		—		—		—		2		5		7
Non-accrual		—		—		—		—		—		—		—		—
Total other loans		—		—		—		—		—		2		5		7

Total 90+ Days past due	$	183	$	100	$	4	$	186	$	—	$	82	$	328	$	883

Total Non-accrual	$	—	$	3,743	$	3,609	$	31,688	$	18,489	$	3,592	$	469	$	61,590


As of December 31, 2024	2024		2023		2022		2021		2020		Prior		Revolving loans at amortized cost		Total
SBL non-real estate
90+ Days past due	$	—	$	—	$	—	$	614	$	41	$	216	$	—	$	871
Non-accrual		—		—		1,197		620		219		599		—		2,635
Total SBL non-real estate		—		—		1,197		1,234		260		815		—		3,506

SBL commercial mortgage
90+ Days past due		—		—		—		—		—		336		—		336
Non-accrual		—		—		1,380		1,687		163		1,655		—		4,885
Total SBL commercial mortgage		—		—		1,380		1,687		163		1,991		—		5,221

SBL construction
90+ Days past due		—		—		—		—		—		—		—		—
Non-accrual		—		—		—		875		—		710		—		1,585
Total SBL construction		—		—		—		875		—		710		—		1,585

Direct lease financing
90+ Days past due		145		547		285		69		20		22		—		1,088
Non-accrual		2,546		546		1,710		1,165		37		22		—		6,026
Total direct lease financing		2,691		1,093		1,995		1,234		57		44		—		7,114

SBLOC
90+ Days past due		—		—		—		—		—		—		—		—
Non-accrual		—		—		—		—		—		—		—		—
Total SBLOC		—		—		—		—		—		—		—		—

IBLOC
90+ Days past due		—		—		3,322		—		—		—		—		3,322
Non-accrual		—		—		503		—		—		—		—		503
Total IBLOC		—		—		3,825		—		—		—		—		3,825

Advisor Financing
90+ Days past due		—		—		—		—		—		—		—		—
Non-accrual		—		—		—		—		—		—		—		—
Total advisor financing		—		—		—		—		—		—		—		—

Real estate bridge loans
90+ Days past due		—		—		—		—		—		—		—		—
Non-accrual		—		—		—		12,300		—		—		—		12,300
Total real estate bridge loans		—		—		—		12,300		—		—		—		12,300

Consumer fintech
90+ Days past due		—		—		—		—		—		—		213		213
Non-accrual		—		—		—		—		—		—		—		—
Total consumer fintech		—		—		—		—		—		—		213		213

Other loans
90+ Days past due		—		—		—		—		—		—		—		—
Non-accrual		—		—		—		—		—		—		—		—
Total other loans		—		—		—		—		—		—		—		—

Total 90+ Days past due	$	145	$	547	$	3,607	$	683	$	61	$	574	$	213	$	5,830

Total Non-accrual	$	2,546	$	546	$	4,790	$	16,647	$	419	$	2,986	$	—	$	27,934

For the three month and year-to-date periods ended June 30, 2025 and June 30, 2024, loans modified and related information are as follows (dollars in thousands):


	Three months ended June 30, 2025										Three months ended June 30, 2024
	Payment delay as a result of a payment deferral		Interest rate reduction and payment deferral		Term extension		Total		Percent of total loan category		Payment delay as a result of a payment deferral		Term extension		Total		Percent of total loan category
SBL non-real estate	$	—	$	1,348	$	—	$	1,348		0.66%	$	—	$	—	$	—		—
SBL commercial mortgage		—		—		—		—		—		—		—		—		—
Direct lease financing		—		—		—		—		—		—		2,551		2,551		0.36%
Real estate bridge lending		—		—		—		—		—		—		—		—		—
Total	$	—	$	1,348	$	—	$	1,348		0.02%	$	—	$	2,551	$	2,551		0.05%


	Six months ended June 30, 2025										Six months ended June 30, 2024
	Payment delay as a result of a payment deferral		Interest rate reduction and payment deferral		Term extension		Total		Percent of total loan category		Payment delay as a result of a payment deferral		Interest rate reduction and payment deferral			Term extension	Total		Percent of total loan category
SBL non-real estate	$	4,991	$	1,348	$	—	$	6,339		3.11%	$	1,726	$	—	$	—	$	1,726		1.00%
SBL commercial mortgage		2,738		—		—		2,738		0.38%		3,320		—		—		3,320		0.51%
Direct lease financing		—		—		—		—		—		—		—		2,551		2,551		0.36%
Real estate bridge lending⁽¹⁾		—		—		—		—		—		26,923		32,500		—		59,423		2.80%
Total	$	7,729	$	1,348	$	—	$	9,077		0.14%	$	31,969	$	32,500	$	2,551	$	67,020		1.20%

The following table shows an analysis of loans that were modified during the three month and year-to-date periods ended June 30, 2025, and June 30, 2024 presented by loan classification (dollars in thousands):


	Three months ended June 30, 2025
	Payment Status (Amortized Cost Basis)
	30-59 days		60-89 days		90+ days				Total
	past due		past due		still accruing		Non-accrual		delinquent		Current		Total
SBL non-real estate	$	—	$	1,348	$	—	$	—	$	1,348	$	—	$	1,348
SBL commercial mortgage		—		—		—		—		—		—		—
Real estate bridge lending		—		—		—		—		—		—		—
	$	—	$	1,348	$	—	$	—	$	1,348	$	—	$	1,348

	Three months ended June 30, 2024
	Payment Status (Amortized Cost Basis)
	30-59 days		60-89 days		90+ days				Total
	past due		past due		still accruing		Non-accrual		delinquent		Current		Total
SBL non-real estate	$	—	$	—	$	—	$	—	$	—	$	—	$	—
SBL commercial mortgage		—		—		—		—		—		—		—
Direct lease financing		—		2,551		—		—		2,551		—		2,551
Real estate bridge lending		—		—		—		—		—		—		—
	$	—	$	2,551	$	—	$	—	$	2,551	$	—	$	2,551


	Six months ended June 30, 2025
	Payment Status (Amortized Cost Basis)
	30-59 days		60-89 days		90+ days				Total
	past due		past due		still accruing		Non-accrual		delinquent		Current		Total
SBL non-real estate	$	—	$	1,348	$	—	$	—	$	1,348	$	4,991	$	6,339
SBL commercial mortgage		—		—		—		—		—		2,738		2,738
Direct lease financing		—		—		—		—		—		—		—
Real estate bridge lending		—		—		—		—		—		—		—
	$	—	$	1,348	$	—	$	—	$	1,348	$	7,729	$	9,077

	Six months ended June 30, 2024
	Payment Status (Amortized Cost Basis)
	30-59 days		60-89 days		90+ days				Total
	past due		past due		still accruing		Non-accrual		delinquent		Current		Total
SBL non-real estate	$	—	$	—	$	—	$	757	$	757	$	969	$	1,726
SBL commercial mortgage		—		—		—		—		—		3,320		3,320
Direct lease financing		—		2,551		—		—		2,551		—		2,551
Real estate bridge lending		—		—		—		—		—		59,423		59,423
	$	—	$	2,551	$	—	$	757	$	3,308	$	63,712	$	67,020

There were $1.3 million and $2.6 million of total loans classified as modified for the three months ended June 30, 2025 and June 30, 2024, respectively, with no specific reserves.

The following table describes the financial effect of the modifications made for the three month and year-to-date periods ended June 30, 2025 and June 30, 2024 (dollars in thousands):


	Three months ended June 30, 2025			Three months ended June 30, 2024
	Combined Rate and Maturity			Combined Rate and Maturity
	Weighted average interest reduction	Weighted average term extension (in months)	More-than-insignificant-payment delay⁽¹⁾	Weighted average interest reduction	Weighted average term extension (in months)	More-than-insignificant-payment delay⁽¹⁾
SBL non-real estate	1.00%	—	—	—	—	—
SBL commercial mortgage	—	—	—	—	—	—
Direct lease financing	—	—	—	—	12.0	—
Real estate bridge lending	—	—	—	—	—	—

⁽¹⁾Percentage represents the principal of loans deferred divided by the principal of the total loan portfolio.


	Six months ended June 30, 2025			Six months ended June 30, 2024
	Combined Rate and Maturity			Combined Rate and Maturity
	Weighted average interest reduction	Weighted average term extension (in months)	More-than-insignificant-payment delay⁽¹⁾	Weighted average interest reduction	Weighted average term extension (in months)	More-than-insignificant-payment delay⁽¹⁾
SBL non-real estate	1.00%	—	2.45%	—	—	1.00%
SBL commercial mortgage	—	—	0.38%	—	—	0.51%
Direct lease financing	—	—	—	—	12.0	—
Real estate bridge lending	—	—	—	1.68%	—	1.27%

⁽¹⁾Percentage represents the principal of loans deferred divided by the principal of the total loan portfolio.

There were no loans that received a term extension modification that had a payment default during the period and were modified in the twelve months before default.

We had no commitments to extend additional credit to loans classified as modified as of June 30, 2025 or December 31, 2024.

We had $61.6 million of non-accrual loans at June 30, 2025, compared to $27.9 million of non-accrual loans at December 31, 2024. The $33.7 million increase in non-accrual loans was primarily due to $55.1 million of additions partially offset by $15.3 million of payments, $3.9 million transferred to OREO, $1.9 million of charge-offs, and $396,000 transferred to repossessed vehicle inventory. Loans past due 90 days or more still accruing interest amounted to $883,000 at June 30, 2025 and $5.8 million at December 31, 2024. The $4.9 million decrease reflected $1.1 million of additions partially offset by $5.9 million of loan payments and $107,000 transferred to non-accrual loans.

We evaluate loans under an internal loan risk rating system as a means of identifying problem loans. At June 30, 2025 and December 31, 2024, classified loans were segregated by year of origination and are shown in “Note 6. Loans” to the unaudited consolidated financial statements herein.

Premises and Equipment, Net

Premises and equipment amounted to $26.5 million at June 30, 2025, compared to $27.6 million at December 31, 2024.

Other assets

Other assets amounted to $166.1 million at June 30, 2025 compared to $182.7 million at December 31, 2024.

Deposits

Our primary source of funding is deposit acquisition. We offer a variety of deposit accounts with a range of interest rates and terms, including demand, checking and money market accounts, through and with the assistance of affinity groups. The majority of our deposits are generated through prepaid card and debit and other payments related deposit accounts. At June 30, 2025, we had total deposits of $7.77 billion compared to $7.75 billion at December 31, 2024, which reflected an increase of $19.9 million, or 0.3%. Daily deposit balances are subject to variability, and deposits averaged $8.06 billion in the second quarter of 2025. Savings and money market balances are a modest percentage of our funding and we have swept such deposits off our balance sheet to other institutions. Such sweeps are utilized to optimize diversity within our funding structure by managing the percentage of individual client deposits to total deposits. A

diversified group of prepaid and debit card accounts, which have an established history of stability and lower cost than certain other types of funding, comprise the majority of our deposits. Our product mix includes prepaid card accounts for salary, medical spending, commercial, general purpose reloadable, corporate and other incentive, gift, government payments and transaction accounts accessed by debit cards. Balances are subject to daily fluctuations, which may comprise a significant component of variances between dates. Our funding is comprised primarily of millions of small transaction-based consumer balances, the vast majority of which are FDIC-insured. We have multi-year, contractual relationships with affinity groups which sponsor such accounts and with whom we have had long-term relationships (see Item 1. “Business—Our Strategies” in our Annual Report on Form 10-K, as amended, for the year ended December 31, 2024). Those long-term relationships comprise the majority of our deposits while we continue to grow and add new client relationships. Of our deposits at June 30, 2025, the top three affinity groups accounted for approximately $4.28 billion, the next three largest $1.27 billion, and the four subsequent largest $723.0 million. Of our deposits at year-end 2024, the top three affinity groups accounted for approximately $3.79 billion, the next three largest accounted for $1.64 billion, and the four subsequent largest accounted for $756.9 million. While certain of these relationships may have changed their ranking in the top ten, the affinity groups themselves were generally identical at both dates, with some movement in the tenth and eleventh largest relationships. We believe that payroll, debit, and government-based accounts such as child support are comparable to traditional consumer checking accounts. Such balances in the top ten relationships at June 30, 2025 totaled $3.37 billion while balances related to consumer and business payment companies, including companies sponsoring incentive payments, amounted to $2.90 billion. Such balances in the top ten relationships at year-end 2024 totaled $3.81 billion while balances related to consumer and business payment companies, including companies sponsoring incentive and gift card payments, amounted to $2.38 billion. We pay interest directly to consumer account holders for an immaterial amount of deposit balances, while the vast majority of interest expense results from fees paid to affinity groups. While affinity groups may decide to pay interest or other remuneration to account holders, they do not currently do so for the vast majority of balances. The vast majority of payments to affinity groups are variable rate and equate to varying contractual percentages tied to the effective federal funds rate, which results from Federal Reserve rate hikes and reductions. The effective federal funds rate also reflects a market rate which might be required to replace lower cost deposits, or fund loan growth in excess of deposit growth, at least in the short-term. Because underlying balances have generally exhibited stability, so too have trends in the cost of funds. The more consequential impact to cost of funds are market changes and the effective federal funds rate, specifically the impact of Federal Reserve rate hikes and reductions. We model significant fee-based relationships in our net interest income sensitivity modeling (see “Item 2 – Asset and Liability Management” above). The following discussion is applicable to our transaction accounts, comprising the majority of our deposits, in the 100 and 200 basis point rate increase and decrease scenarios as presented in the applicable table in that Asset and Liability Management section, above. The impact of the Federal Reserve rate hikes or reductions, which respectively increase or decrease interest expense, has approximated the ratio of our cost of funds divided by the effective federal funds rate, all else equal. However, there can be no assurance that such ratios could not change significantly given the other variables discussed in the Asset and Liability Management section. In second quarter of 2025, our demand and interest checking balances averaged $7.99 billion, compared to $6.66 billion in second quarter of 2024. The growth primarily reflected increases in payment company balances. Average savings and money market balances increased to $65.6 million the second quarter of 2025, compared to $60.2 million in the second quarter of 2024. We sweep deposits off our balance sheet to other institutions to optimize diversity within our funding structure by managing the percentage of individual client deposits to total deposits. In 2024 and the first six months of 2025, we did not use short-term time deposits. Short-term time deposits are generated through established intermediaries such as banks and other financial companies. These deposits generally originate with investment or trust companies or banks, which offer those deposits at market rates to FDIC-insured institutions, such that the balances are fully FDIC-insured. These deposits are generally classified as brokered. The following table presents the average balance and rates paid on deposits for the periods indicated (dollars in thousands):

The following table presents the average balance and rates paid on deposits for the periods indicated (dollars in thousands):



	For the six months ended			For the year ended
	June 30, 2025			December 31, 2024
	Average		Average	Average		Average
	balance		rate	balance		rate

Demand and interest checking⁽¹⁾	$	8,082,390	2.19%	$	6,875,368	2.35%
Savings and money market		100,966	3.75%		71,962	3.52%
Total deposits	$	8,183,356	2.21%	$	6,947,330	2.37%

⁽¹⁾ Of the amounts shown for 2025 and 2024, $138.7 million and $146.8 million, respectively, represented balances on which the Bank paid interest. The remaining balance for each period reflects amounts subject to fees paid to third parties, which are based upon contractual percentages applied to a rate index, generally the effective federal funds rate, and therefore classified as interest expense.

Short-term Borrowings

Short-term borrowings consist of amounts borrowed on our lines of credit with the Federal Reserve Bank or FHLB. We had no outstanding advances from the FHLB or Federal Reserve Bank at June 30, 2025 or December 31, 2024. We generally utilize overnight borrowings to manage our daily reserve requirements at the Federal Reserve. Period-end and year-to-date information for the dates shown is as follows.


	June 30,		December 31,
	2025		2024
		(Dollars in thousands)
Short-term borrowings
Balance at period end	$	—	$	—
Average for the three months ended June 30, 2025		439		N/A
Average during the year		220		44,220
Maximum month-end balance		—		455,000
Weighted average rate during the period		4.55%		5.58%
Rate at period end		—		—

Senior Debt

On August 13, 2020, we issued $100.0 million of the 2025 Senior Notes, with a maturity date of August 15, 2025, and a 4.75% interest rate, with interest paid semi-annually on March 15 and September 15. The 2025 Senior Notes are the Company’s direct, unsecured and unsubordinated obligations and rank equal in priority with all our existing and future unsecured and unsubordinated indebtedness and senior in right of payment to all our existing and future subordinated indebtedness. In lieu of repayment of debt from dividends paid by the Bank to the Company, industry practice includes the issuance of new debt to repay maturing debt.

Borrowings

At June 30, 2025, we had other long-term borrowings of $13.9 million compared to $14.1 million at December 31, 2024. The borrowings consisted of sold loans which were accounted for as a secured borrowing because they did not qualify for true sale accounting. We do not have any policy prohibiting us from incurring debt.

The 2038 Debentures, which total $13.4 million, mature in March 2038 and bear interest at SOFR plus 3.51%, are grandfathered to qualify as Tier 1 capital at the Bank.

Other Liabilities

Other liabilities amounted to $89.3 million at June 30, 2025, compared to $68.0 million at December 31, 2024. The increase reflected a payable for a security purchase which had not yet settled as of that date.

Shareholders’ Equity

Off-balance sheet arrangements

There were no off-balance sheet arrangements during the six months ended June 30, 2025 that have or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to our interests.

Financial instruments whose contract amounts represent potential credit risk for us, are our unused commitments to extend credit and standby letters of credit which were approximately $1.91 billion and $305,000, respectively, at June 30, 2025 and $1.97 billion and

$1.7 million, respectively, at December 31, 2024. The vast majority of commitments reflect SBLOC commitments, which are variable rate, and connected to lines of credit collateralized by marketable securities. The amount of those lines is generally based upon the value of the collateral, and not expected usage. The majority of those available lines have not been drawn upon, and SBLOC loans are “demand” loans and can be called at any time.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Information about market risk for the quarter ended June 30, 2025 is included under “Asset and Liability Management” in Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report on Form 10-Q. Except for such information, there has been no material change to our assessment of our sensitivity to market risk as discussed in the 2024 Form 10-K, as amended.

As noted under “Asset and Liability Management” in Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report on Form 10-Q, the Company’s exposure to interest rate risk is managed through the use of guidelines which limit interest rate exposure to higher interest rates. Because the Company has emphasized variable rate instruments in its loan and investment portfolios, it tends to benefit from higher interest rate environments. As a result of the Federal Reserve rate increases in 2022 and 2023, net interest income has increased and exceeded prior period levels. While future Federal Reserve rate reductions may result in lower net interest income, such exposure to lower rates was significantly reduced in the third quarter of 2024 with the purchase of fixed rate securities. In the third quarter of 2024 the Federal Reserve began lowering rates and has held steady in the first two quarters of 2025. In addition to the aforementioned guidelines which the Company uses to manage interest rate risk, the Company utilizes an asset liability committee to provide oversight by multiple departments and senior officers.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (our principal executive officer) and our Interim Chief Financial Officer (our principal financial officer), as appropriate, to allow timely decisions regarding required disclosure. Because of inherent limitations, disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of disclosure controls and procedures are met.

Under the supervision of our Chief Executive Officer and Interim Chief Financial Officer, our management conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and Interim Chief Financial Officer concluded that our disclosure controls and procedures were ineffective as of June 30, 2025 due to the material weaknesses in internal controls over financial reporting that were previously disclosed in Part II, Item 9A. “Controls and Procedures” in our 2024 Form 10-K, as amended. The material weaknesses identified exist in the design of two controls related to (i) the completion of all closing procedures prior to the filing of a required periodic report with the SEC, and (ii) the evaluation of the accounting and financial reporting associated with the credit enhancement contained within a third-party agreement and the impact on the allowance for credit losses for consumer fintech loans.

Remediation Plan for Material Weaknesses

In response to the identified material weaknesses with respect to the two controls noted above, management instituted a remediation plan to enhance its internal control over financial reporting to: (i) require receipts of approval and documentation of the same prior to the filing of any required periodic report with the SEC; and (ii) refine the evaluation of the accounting and financial reporting associated with the credit enhancement contained within a third-party agreement and the impact on the allowance for credit losses for consumer fintech loans. The actions that we have taken are subject to continued testing and ongoing management review. Management will not be able to conclude whether the steps we have taken will fully remediate these material weaknesses in our internal control over financial reporting until we have completed our remediation efforts and subsequent evaluation of their effectiveness. Management may also conclude that additional measures may be required to remediate the material weaknesses in our internal control over financial reporting, which may necessitate additional actions to be taken.

Changes in Internal Control Over Financial Reporting

Other than the material weaknesses and remediation efforts described above, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

For a discussion of our material pending legal proceedings, see “Note 13. Legal” to the unaudited consolidated financial statements in this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

Item 1A. Risk Factors

Our business, financial condition, operating results and cash flows are subject to various risks and uncertainties, including those described in Part I, Item 1A. “Risk Factors” in the 2024 Form 10-K, as amended. There have been no material changes from the risk factors disclosed in the 2024 Form 10-K, as amended.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Stock Repurchases

The following table sets forth information regarding the Company’s repurchases of its common stock during the quarter ended June 30, 2025:


Period	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs⁽¹⁾	Approximate dollar value of shares that may yet be purchased under the plans or programs^{(1) (2)}
	(Dollars in thousands, except per share data)
April 1, 2025 -April 30, 2025	285,255	$	45.61	285,255	$	99,489
May 1, 2025 - May 31, 2025	238,439		52.30	238,439		87,019
June 1, 2025 - June 30, 2025	230,204		52.25	230,204		74,990
Total	753,898		49.75	753,898		74,990

⁽¹⁾During the second quarter of 2025, all shares of common stock were repurchased pursuant to the 2025 Repurchase Program, which was approved by the Board on October 23, 2024 and publicly announced on October 23, 2024. Under the 2025 Repurchase Program, the Company is authorized to repurchase shares of its common stock totaling up to $37.5 million per quarter, for a maximum amount of $150.0 million in 2025. The Company increased its share repurchase authorization for the third and fourth quarters of 2025 under the 2025 Repurchase Program to $300.0 million. The Company may repurchase shares through open market purchases, including through written trading plans under Rule 10b5-1 under the Exchange Act, privately-negotiated transactions, block purchases or otherwise in accordance with applicable federal securities laws, including Rule 10b-18 under the Exchange Act.

⁽²⁾The 2025 Repurchase Program may be suspended, amended or discontinued at any time and has an expiration date of December 31, 2025. With respect to further repurchases, the Company cannot predict if, or when, it will repurchase any shares of common stock, and the timing and amount of any shares repurchased will be determined by management based on its evaluation of market conditions and other factors.

Item 5. Other Information

During the quarter ended June 30, 2025, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Item 408 of Regulation S-K.

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Item 6. Exhibits


Exhibit No.		Description
10.1		Retirement Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed April 3, 2025).

31.1		Rule 13a-14(a)/15d-14(a) Certifications*

31.2		Rule 13a-14(a)/15d-14(a) Certifications*

32.1		Section 1350 Certifications*

32.2		Section 1350 Certifications*

101.INS		Inline XBRL Instance Document**

101.SCH		Inline XBRL Taxonomy Extension Schema Document*

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document*

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document*

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document*

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document*
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*

*		Filed herewith
**		The Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

10

		THE BANCORP, INC.
		(Registrant)

August 7, 2025		/S/ DAMIAN KOZLOWSKI
Date		Damian Kozlowski
		Chief Executive Officer

August 7, 2025		/S/ MARTIN EGAN
Date		Martin Egan Interim Chief Financial Officer and Chief Accounting Officer