The Bancorp, Inc. (NASDAQ: TBBK) Securities Fraud Class Action

LEAD PLAINTIFF DEADLINE IS MAY 16, 2025.

If you have suffered losses and would like to discuss your rights, please fill out this form or you may contact Jonathan Naji, Esq. at (484) 270-1453 or via e-mail at info@ktmc.com.

Case Background:
A class action lawsuit was filed on behalf of those who purchased or otherwise acquired The Bancorp, Inc. (“Bancorp”) (NASDAQ: TBBK) securities between January 25, 2024, and March 4, 2025, inclusive (the “Class Period”). 

The Class Period begins on January 25, 2024. On that day, Bancorp issued a press release announcing the company’s fourth quarter and full year 2023 financial results.  That same day, Bancorp hosted a conference call in connection with the results, which was accompanied by its January 2024 Investor Presentation. The investor presentation touted that Bancorp’s “Core lending businesses” are “comprised of our main, lower risk lending activities.” The investor presentation also assured investors Bancorp’s new “Fintech solutions” came with an “[e]stablished risk and compliance function [which] is highly scalable.” The investor report continued, touting Bancorp’s “deposit growth from fintech business” as well as the company’s purportedly “stable deposits & significant balance sheet liquidity.” Moreover, the investor report highlighted Bancorp’s real estate bridge loans (“REBL”) portfolio as part of the company’s “lower risk loan portfolio” and further assured investors that its “allowance for credit losses reflects [its] lower-risk loan portfolio.” Finally, the investor presentation concluded with Bancorp’s financial metrics including allowances for credit losses. 

On March 21, 2024, Culper Research issued a report alleging that Bancorp had underrepresented significant risks of default and/or loss on certain REBLs. Specifically, the report alleged that Bancorp’s loan book is “rife with unsophisticated syndicated borrowers” who were “coaxed by promises of generational wealth through passive income” with “get rich quick” promises. The report further alleged that Bancorp’s REBL loan portfolio is filled with apartments which are “quite literally, crumbling,” with high vacancies and multiple condemnations. The report likewise stated that Bancorp “blindly reassures investors that its book contains ‘no substantial risk of default or loss,’” but, in reality, the company’s “REBL portfolio faces meaningful risks and will result in meaningful losses.” The report concluded that Bancorp’s reserve of only “$4.7 million in REBL loan allowances, representing a mere 0.24% of the total REBL book” is “short by an order of magnitude or more.”  On this news, Bancorp’s share price fell $3.63, or 10.15%, to close at $32.12 per share on March 21, 2024. 

Then, on October 24, 2024, after the market closed, Bancorp announced its third quarter 2024 financial results in a press release for the period ended September 30, 2024, reporting $51.5 million in net income. Bancorp attributed the results in part, to “a new CECL [current expected credit losses methodology] factor” to the company’s analysis of REBL loans classified as either special mention or substandard “which increased the provision for credit losses and resulted in an after-tax reduction in net income of $1.5 million.” Bancorp further explained its results also reflected “prior period interest income reversals on real estate bridge loans transferred to nonaccrual or modified” which “resulted in an after-tax reduction in net income of $1.2 million.”  On this news, Bancorp’s share price fell $7.95, or 14.47%, to close at $47.01 per share on October 25, 2024.

Finally, on March 4, 2025, after the market closed, Bancorp disclosed that its “financial statements for the fiscal years ended December 31, 2022 through 2024 as shown in the Annual Report should no longer be relied upon.” Specifically, Bancorp explained that its auditors for those years “did not provide approval to include [the] audit opinion . . . or [the] consent to the incorporation by reference of their audit report in certain registration statements.” Bancorp further revealed the company is “working expeditiously to perform and complete additional closing procedures related to accounting for consumer fintech loans in the allowance for credit losses” in order to file an amended annual report. Bancorp also disclosed that the company “is evaluating the impact of this non-reliance on its conclusions regarding disclosure controls and procedures and internal control over financial reporting,” and that Bancorp would be unable to file timely its fiscal year 2024 annual report.  On this news, Bancorp’s share price fell $2.34, or 4.38%, to close at $51.25 per share on March 5, 2025.  

The complaint alleges that, throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that: (1) Bancorp had underrepresented the significant risk of default or loss on its REBL loan portfolio; (2) Bancorp’s current expected credit loss methodology was insufficient to account for the provision and/or allowance of credit losses; (3) as a result, Bancorp was reasonably likely to increase its provision for credit losses; (4) there were material weakness in Bancorp’s internal control over financial reporting; (5) Bancorp’s financial statements had not been approved by its independent auditor; (6) as a result of the foregoing, Bancorp’s financial statements could not be relied upon; and (7) that, as a result of the foregoing, Defendants’ positive statements about the company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
 

What is a Lead Plaintiff?

A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case.  Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.