The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the District of Delaware on behalf of those who acquired The Bancorp, Inc. (“Bancorp” or the “Company”) (NASDAQ: TBBK) securities during the period from January 25, 2024 through and including March 4, 2025 (“the Class Period”). The lawsuit asserts claims against Bancorp and some of its officers for violation of the federal securities laws. Investors have until May 16, 2025 to apply to the Court to be appointed as lead plaintiff in the lawsuit.

[Click here to learn more about the class action]

On March 21, 2024, Culper Research released a report alleging that Bancorp had downplayed risks of default and loss on certain real estate bridge loans (“REBLs”). The report claimed the Company’s loan book was “rife with unsophisticated syndicated borrowers” lured by “get rich quick” promises and that the REBL portfolio was filled with deteriorating, high-vacancy apartments. The Culper Research report accused the Company of misleading investors by stating its portfolio had “no substantial risk,” while actually facing “meaningful risks and losses.” It concluded the Company’s $4.7 million in REBL loan allowances was “short by an order of magnitude or more.” On this news, the price of Bancorp shares declined by $3.63 per share, or approximately 10.15%, from $35.75 per share on March 20, 2024, to close at $32.12 per share on March 21, 2024.

On October 24, 2024, after the market close, Bancorp announced its third quarter 2024 financial results in a press release. The Company reported $51.5 million in Q3 net income, partly due to a new CECL (current expected credit loss) methodology for REBL loans marked as special mention or substandard, increasing credit loss provisions and reducing after-tax net income by $1.5 million. It also cited prior period interest income reversals on nonaccrual or modified REBLs, further reducing after-tax net income by $1.2 million. On this news, Bancorp’s share price declined by $7.95, or approximately 14.47%, to close at $47.01 per share on October 25, 2024.

On March 4, 2025, after market close, Bancorp disclosed that its financial statements for fiscal years 2022-2024 “should no longer be relied upon.” It revealed that auditors had not approved their audit opinion or consented to its inclusion in certain filings. The Company was “working expeditiously” to complete additional procedures related to consumer fintech loan accounting and would be unable to file its 2024 annual report on time. Bancorp’s share price declined by $2.34 to close at $51.25 per share on March 5, 2025.

The lawsuit alleges that throughout the Class Period, Defendants failed to disclose to investors: (1) that Bancorp had underrepresented the significant risk of default or loss on its REBL loan portfolio; (2) that the Company’s current expected credit loss methodology was insufficient to account for the provision and/or allowance of credit losses; (3) that, as a result, the Company was reasonably likely to increase its provision for credit losses; (4) that there were material weakness in its internal control over financial reporting; (5) that its financial statements had not been approved by its independent auditor; (6) that, as a result of the foregoing, the Company’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.

If you purchased or otherwise acquired Bancorp securities, have information, or would like to learn more about this investigation, please contact Thomas W. Elrod of Kirby McInerney LLP by email at investigations@kmllp.com, or by filling out this CONTACT FORM, to discuss your rights or interests with respect to these matters without any cost to you.

Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website.

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