Document And Entity Information - USD ($) $ in Millions	12 Months Ended
Document And Entity Information - USD ($) $ in Millions	Dec. 31, 2024	Feb. 24, 2025	Jun. 30, 2024
Document And Entity Information [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2024
Document Fiscal Period Focus	FY
Document Transition Report	false
Entity File Number	000-51018
Entity Registrant Name	The Bancorp, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	23-3016517
Entity Address, Address Line One	409 Silverside Road
Entity Address, City or Town	Wilmington
Entity Address, State or Province	DE
Entity Address, Postal Zip Code	19809
City Area Code	302
Local Phone Number	385-5000
Title of 12(b) Security	Common Stock, par value $1.00 per share
Trading Symbol	TBBK
Security Exchange Name	NASDAQ
Entity Filer Category	Large Accelerated Filer
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false
ICFR Auditor Attestation Flag	true
Document Financial Statement Error Correction Flag	false
Entity Public Float			$ 1,780
Entity Common Stock, Shares Outstanding		48,067,178
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Entity Central Index Key	0001295401
Documents Incorporated by Reference	DOCUMENTS INCORPORATED BY REFERENCE Portions of the proxy statement for registrant’s 2025 Annual Meeting of Shareholders are incorporated by reference in Part III of this Form 10-K.
Auditor Firm ID	173
Auditor Location	Washington, D.C
Auditor Name	CROWE LLP

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2024	Dec. 31, 2023
Cash and cash equivalents
Cash and due from banks	$ 6,064	$ 4,820
Interest-earning deposits at Federal Reserve Bank	564,059	1,033,270
Total cash and cash equivalents	570,123	1,038,090
Investment securities, available-for-sale, at fair value, net of $10.0 million allowance for credit loss at December 31, 2023	1,502,860	747,534
Commercial loans, at fair value	223,115	332,766
Loans, net of deferred loan fees and costs	6,113,628	5,361,139
Allowance for credit losses	(31,944)	(27,378)
Loans, net	6,081,684	5,333,761
Stock in Federal Reserve, Federal Home Loan and Atlantic Central Bankers Banks	15,642	15,591
Premises and equipment, net	27,566	27,474
Accrued interest receivable	41,713	37,534
Intangible assets, net	1,254	1,651
Other real estate owned	62,025	16,949
Deferred tax asset, net	18,874	21,219
Other assets	182,687	133,126
Total assets	8,727,543	7,705,695
Deposits
Demand and interest checking	7,434,212	6,630,251
Savings and money market	311,834	50,659
Total deposits	7,746,046	6,680,910
Securities sold under agreements to repurchase	0	42
Senior debt	96,214	95,859
Subordinated debentures	13,401	13,401
Other long-term borrowings	14,081	38,561
Other liabilities	68,018	69,641
Total liabilities	7,937,760	6,898,414
SHAREHOLDERS' EQUITY
Common stock - authorized, 75,000,000 shares of $1.00 par value; 47,713,481 and 47,310,750 shares issued and outstanding, respectively, at December 31, 2024 and 53,202,630 shares issued and outstanding at December 31, 2023	47,713	53,203
Treasury stock at cost, 402,731 shares at December 31, 2024 and 0 shares at December 31, 2023, respectively	(22,681)
Additional paid-in capital	3,233	212,431
Retained earnings	779,155	561,615
Accumulated other comprehensive loss	(17,637)	(19,968)
Total shareholders' equity	789,783	807,281
Total liabilities and shareholders' equity	$ 8,727,543	$ 7,705,695

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2024	Dec. 31, 2023
SHAREHOLDERS' EQUITY
Investment securities, available-for-sale, at fair value, allowance for credit loss		$ 10,000
Common stock, authorized (in shares)	75,000,000	75,000,000
Common stock, par value (in dollars per share)	$ 1.00	$ 1.00
Common stock, issued (in shares)	47,713,481	53,202,630
Common stock, outstanding	47,310,750	53,202,630
Treasury stock (in shares)	402,731	0

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
Interest income
Loans, including fees	$ 458,817	$ 436,649	$ 275,837
Investment securities:
Taxable interest	66,262	39,078	25,598
Tax-exempt interest	187	153	98
Interest-earning deposits	26,326	33,627	6,762
Total interest income	551,592	509,507	308,295
Interest expense
Deposits	164,372	148,529	51,136
Short-term borrowings	2,469	271	1,538
Long-term borrowings	2,420	507	1,004
Senior debt	4,935	5,027	5,118
Subordinated debentures	1,155	1,121	658
Total interest expense	175,351	155,455	59,454
Net interest income	376,241	354,052	248,841
Provision for credit losses on non-consumer fintech loans	9,319	8,465	5,741
Provision for consumer fintech loans	19,619
Provision (reversal) for unfunded commitments	(596)	(135)	1,367
Provision (reversal) for credit loss on security	(1,000)	10,000
Net interest income after provision (reversal) for credit losses	348,899	335,722	241,733
Non-interest income
Fees	116,798	99,239	86,171
Net realized and unrealized gains on commercial loans, at fair value	2,732	3,745	13,531
Leasing related income	3,921	6,324	4,822
Consumer fintech loan credit enhancement	19,619
Other	3,412	2,786	1,159
Total non-interest income	146,482	112,094	105,683
Non-interest expense
Salaries and employee benefits	131,597	121,055	105,368
Depreciation	4,155	3,074	2,902
Rent and related occupancy cost	6,746	5,980	5,193
Data processing expense	5,666	5,447	4,972
Audit expense	1,484	1,620	1,526
Legal expense	3,081	3,850	3,878
Legal settlements	284		1,152
FDIC insurance	3,579	2,957	3,270
Software	17,913	17,349	16,211
Insurance	5,195	5,139	5,026
Telecom and IT network communications	1,227	1,316	1,457
Consulting	1,852	1,938	1,262
Write-downs and other losses on other real estate owned		1,315
Civil money penalty			1,750
Other	20,446	20,002	15,535
Total non-interest expense	203,225	191,042	169,502
Income before income taxes	292,156	256,774	177,914
Income tax expense	74,616	64,478	47,701
Net income	$ 217,540	$ 192,296	$ 130,213
Net income per share - basic	$ 4.35	$ 3.52	$ 2.30
Net income per share - diluted	$ 4.29	$ 3.49	$ 2.27
Weighted average shares - basic	50,063,620	54,506,065	56,556,303
Weighted average shares - diluted	50,713,140	55,053,497	57,268,946
ACH, Card And Other Payment Processing Fees [Member]
Non-interest income
Fees	$ 14,596	$ 9,822	$ 8,935
Prepaid, Debit Card And Related Fees [Member]
Non-interest income
Fees	97,413	$ 89,417	$ 77,236
Consumer Credit Fintech Fees [Member]
Non-interest income
Fees	$ 4,789

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract]
Net income	$ 217,540	$ 192,296	$ 130,213
Securities available-for-sale:
Change in net unrealized gains (losses)	2,824	14,215	(49,888)
Reclassification adjustments for losses (gains) included in income	2	4	(4)
Other comprehensive income (loss)	2,826	14,219	(49,892)
Securities available-for-sale:
Change in net unrealized gains (losses)	494	3,929	(13,343)
Reclassification adjustments for losses (gains) included in income	1	1	(1)
Income tax expense (benefit) related to items of other comprehensive income (loss)	495	3,930	(13,344)
Other comprehensive income (loss), net of tax and reclassifications into net income	2,331	10,289	(36,548)
Comprehensive income	$ 219,871	$ 202,585	$ 93,665

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total
Balance at Dec. 31, 2021	$ 57,371		$ 349,686	$ 239,106	$ 6,291	$ 652,454
Balance, shares at Dec. 31, 2021	57,370,563
Net income				130,213		130,213
Common stock issued from option exercises, net of tax benefits	$ 58		262			320
Common stock issued from option exercises, net of tax benefits, shares	58,531
Common stock issued from restricted units, net of tax benefits	$ 583		(583)
Common stock issued from restricted units, net of tax benefits, shares	582,789
Stock-based compensation			7,592			7,592
Common stock repurchases and excise tax	$ (2,322)		(57,678)			(60,000)
Common stock repurchases and excise tax, shares	(2,322,256)
Treasury stock						(60,000)
Other comprehensive income (loss) net of reclassification adjustments and tax					(36,548)	(36,548)
Balance at Dec. 31, 2022	$ 55,690		299,279	369,319	(30,257)	694,031
Balance (in shares) at Dec. 31, 2022	55,689,627
Net income				192,296		192,296
Common stock issued from option exercises, net of tax benefits	$ 13		91			104
Common stock issued from option exercises, net of tax benefits, shares	13,158
Common stock issued from restricted units, net of tax benefits	$ 457		(457)
Common stock issued from restricted units, net of tax benefits, shares	456,991
Stock-based compensation			11,392			11,392
Common stock repurchases and excise tax	$ (2,957)		(97,874)			(100,831)
Common stock repurchases and excise tax, shares	(2,957,146)
Treasury stock						(100,000)
Other comprehensive income (loss) net of reclassification adjustments and tax					10,289	10,289
Balance at Dec. 31, 2023	$ 53,203		212,431	561,615	(19,968)	$ 807,281
Balance (in shares) at Dec. 31, 2023	53,202,630					53,202,630
Net income				217,540		$ 217,540
Common stock issued from restricted units, net of tax benefits	$ 345		(345)
Common stock issued from restricted units, net of tax benefits, shares	345,390
Stock-based compensation			14,983			14,983
Common stock repurchases and excise tax	$ (5,835)		(223,836)			(229,671)
Common stock repurchases and excise tax, shares	(5,834,539)
Treasury stock		$ (22,681)				(22,681)
Other comprehensive income (loss) net of reclassification adjustments and tax					2,331	2,331
Balance at Dec. 31, 2024	$ 47,713	$ (22,681)	$ 3,233	$ 779,155	$ (17,637)	$ 789,783
Balance (in shares) at Dec. 31, 2024	47,713,481					47,310,750

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2022
Operating activities
Net income	$ 217,540	$ 192,296	$ 130,213
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation	4,155	3,074	2,902
Provision for credit losses on non-consumer fintech loans and security	8,319	18,465	5,741
Provision for consumer fintech loans	19,619
(Reversal) provision for unfunded commitments	(596)	(135)	1,367
Net amortization of investment securities discounts/premiums	(2,608)	1,023	1,704
Stock-based compensation expense	14,983	11,392	7,592
Realized gains on commercial loans, at fair value	(3,699)	(6,954)	(18,635)
Deferred income tax expense (benefit)	2,317	(5,681)	5,870
Gain from discontinued operations			(4)
Gain on sale of fixed assets	(53)
Write-down of other real estate owned		1,147
Change in fair value of commercial loans, at fair value	683	3,085	6,065
Change in fair value of derivatives	284	124	(961)
Loss on sales of investment securities	2	4	6
Increase in accrued interest receivable	(4,179)	(5,529)	(14,134)
Increase in other assets	(26,210)	(38,067)	(1,404)
(Decrease) increase in other liabilities	(1,027)	12,609	(6,707)
Net cash provided by operating activities	229,530	186,853	119,615
Investing activities
Purchase of investment securities available-for-sale	(991,215)	(48,989)	(24,183)
Proceeds from redemptions and prepayments of securities available-for-sale	242,676	71,082	161,110
Sale of repossessed assets	11,015	7,927	1,800
Proceeds from sale of other real estate owned	1,602	5,800	2,343
Net (increase) decrease in loans	(877,350)	142,191	(1,678,762)
Capitalized investment in other real estate owned	(1,695)
Commercial loans, at fair value drawn during the period		(134,256)	(66,067)
Payments on commercial loans, at fair value	109,569	384,353	782,157
Proceeds from sale of fixed assets	133
Purchases of premises and equipment	(4,974)	(12,689)	(5,134)
Decrease in discontinued assets held-for-sale			4
Net cash (used in) provided by investing activities	(1,510,239)	415,419	(826,732)
Financing activities
Net increase (decrease) in deposits	1,065,136	(349,203)	1,053,202
Net decrease in securities sold under agreements to repurchase	(42)
Redemptions of senior debt offering		(3,273)
Proceeds from the issuance of common stock		104	320
Repurchases of common stock and excise tax	(252,352)	(99,999)	(60,000)
Net cash provided by (used in) financing activities	812,742	(452,371)	993,522
Net (decrease) increase in cash and cash equivalents	(467,967)	149,901	286,405
Cash and cash equivalents, beginning of period	1,038,090	888,189	601,784
Cash and cash equivalents, end of period	570,123	1,038,090	888,189
Supplemental disclosure:
Interest paid	173,804	156,269	57,601
Taxes paid	80,828	82,553	37,787
Non-cash investing and financing activities:
Transfer of loans from discontinued operations			61,580
Transfer of real estate owned from discontinued operations			17,343
Transfers to other real estate owned from commercial loans, at fair value, and loans, net	44,983	2,686
Leased vehicles transferred to repossessed assets	$ 9,895	$ 9,361	$ 2,008

Organization And Nature Of Operations

12 Months Ended

Dec. 31, 2024

Organization And Nature Of Operations [Abstract]

Organization And Nature Of Operations

Note A—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 institution, 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 payments segment.

While the national specialty finance segment generates the majority of the Company’s revenues, the payments segment also contributes significant revenues. In its payments 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. Payments segment deposits fund the majority of the Company’s loans and securities and may produce lower costs than other funding sources. Most of the payments 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. In 2024, the Company began offering loans through credit sponsorship with third parties, in its fintech segment.

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.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2024

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note B—Summary of Significant Accounting Policies

1. Basis of Presentation

The accounting and reporting policies of the Company conform to generally accepted accounting principles in the United States of America (“GAAP”) and predominant practices within the banking industry. The consolidated financial statements include the accounts of the Company and all its subsidiaries. All inter-company balances have been eliminated.

The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The principal estimate that is particularly susceptible to a significant change in the near term relates to our allowance for credit losses (“ACL”) on loans, leases and securities. This estimate, made in accordance with GAAP, involves a significant level of estimation uncertainty and has had, or is reasonably likely to have, a material impact on our financial condition or results of operations.

2. Cash and Cash Equivalents

Cash and cash equivalents are defined as cash and amounts due from banks with an original maturity from date of purchase of three months or less and federal funds sold. The Company maintains balances in excess of insured limits at various financial institutions including the Federal Reserve Bank (the “Federal Reserve”), the Federal Home Loan Bank (“FHLB”) and other private institutions. The Company does not believe these instruments carry a significant risk of loss, but cannot provide assurances that no losses could occur if these institutions were to become insolvent.

3. Investment Securities

Investments in debt which management believes may be sold prior to maturity due to changes in interest rates, prepayment risk, liquidity requirements, or other factors, are classified as available-for-sale. Net unrealized gains for such securities, net of tax effect, are reported as other comprehensive income, through equity and are excluded from the determination of net income. The unrealized losses for available-for-sale securities are evaluated to determine if any component is attributable to credit loss versus market factors. If the present value of cash flows expected to be collected is less than the amortized cost basis, a provision for credit losses is recorded within the consolidated statement of operations. Subsequent improvement in credit may result in reversal of the credit charge in future periods. For available-for-sale debt securities in an unrealized loss position, the Company also assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. The Company does not engage in securities trading. Gains or losses on disposition of investment securities are based on the net proceeds and the adjusted carrying amount of the securities sold using the specific identification method.

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, as of December 31, 2024, unrealized losses on securities reflected changes in market interest rates after the securities were purchased. The Company’s unrealized loss for debt securities is primarily related to general market conditions, including a lack of liquidity in the market. 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. As a result of its quarterly review, the Company concluded that an allowance was not required to recognize credit losses in either 2024 or 2022. In 2023, the Company recognized a provision of $10.0 million for the total $10.0 million par value of the only trust preferred security in its portfolio, based upon limited financial and other information received from the issuer. In the fourth quarter of 2024, the issuer tendered an offer to repurchase these securities which the Company accepted. Accordingly, $1.0 million was recovered which resulted in a reversal of the provision for credit loss in that amount, and a charge-off of the remaining $9.0 million of the security.

4. Loans and ACL

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are classified as held for investment and are stated at amortized cost, net of unearned discounts, unearned loan fees and an ACL. For loans held for investment at amortized cost, the Company, effective January 1, 2020, began to utilize a current expected credit loss (“CECL”), methodology to determine the ACL. CECL accounting replaced the prior incurred loss model that recognized losses when it became probable that a credit loss would be incurred, with a new requirement to recognize lifetime expected credit losses immediately when a financial asset is originated or purchased. Accordingly, CECL requires loss estimates for the remaining estimated life of the financial asset using historical experience, current conditions, and reasonable and supportable forecasts.

The ACL is established through a provision for credit losses charged to expense. Loan principal considered to be uncollectible by management is charged against the ACL. The allowance is an amount that management believes is appropriate and supportable to absorb current and future expected losses on existing loans that may become uncollectible. The evaluation takes into consideration historical losses by pools of loans with similar risk characteristics and qualitative factors such as portfolio performance and the potential impact of current economic conditions which may affect the borrowers’ ability to pay. For most pools, the historical

loss ratio for each pool is multiplied by its outstanding balance and further multiplied by the estimated remaining average life of each pool. A qualitative factor determined according to the pool’s risk characteristics, is multiplied by the pool’s outstanding principal to comprise the second component of its ACL. For loans previously classified in discontinued operations, discounted cash flow is utilized to determine the related allowance. For SBLOC and IBLOC pools, which have not experienced significant credit losses, probability of loss/loss given default considerations and qualitative factors are utilized. Additionally, the allowance includes allocations for specific loans which have been individually evaluated for an ACL.

Factors considered by management in determining the need for individual loan evaluation for a specific allowance include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not evaluated for an allowance for that reason alone. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower's prior payment record and the amount of the shortfall in relation to the principal and interest owed. The determination of the amount of the allowance calculated on individual loans considers either the present value of expected future cash flows discounted at the loan's effective interest rate or the estimated fair value of the collateral if the loan is collateral dependent. An allowance allocation is established for such loans in the amount their carrying value exceeds the present value of future cash flows; or, if collateral dependent, the amount their carrying value exceeds the collateral’s estimated fair value. The estimated fair values of substantially all of the Company's allowances on individual loans are measured based on the estimated fair value of the loan's collateral, and applicable loans are primarily found in two portfolios.

First, for small business commercial loans (“SBLs”) secured by real estate (primarily SBA), estimated fair values of collateral are determined primarily through third-party appraisals or evaluations. When a real estate secured loan is individually evaluated for a potential ACL, a decision is made regarding whether an updated certified appraisal of the real estate is necessary. This decision is based on various considerations including the age of the most recent appraisal and the condition of the property. Appraised value, discounted by the estimated costs to sell the collateral, is considered to be the estimated fair value. For SBL commercial and industrial loans secured by non-real estate collateral, such as accounts receivable or inventory and equipment, estimated fair values are determined based on the borrower's financial statements, inventory reports, accounts receivable agings or equipment appraisals or invoices. Indications of value from these sources may be discounted based on the age of the financial information or the quality of the assets. Amounts guaranteed by the U.S. government are excluded from the Company’s allowance evaluations. Second, for leasing, fair values are determined utilizing authoritative industry sources such as Black Book.

The CECL methodology and the loan analyses performed on individual loans described above comprise the components of the ACL. On a quarterly basis, the allowance is adjusted to the total of those components through the provision for credit losses. The ACL represents management's estimate of losses inherent in the loan and lease portfolio as of the consolidated balance sheet date and is recorded as a reduction to loans and leases. If the quarterly analysis of those two components exceeds the balance of the ACL, the allowance is increased by the provision for credit losses. Loans deemed to be uncollectible are charged against the ACL, and subsequent recoveries, if any, are credited to the allowance. All, or part, of the principal balance of loans receivable are charged off to the allowance as soon as it is determined that the repayment of all, or part, of the principal balance is highly unlikely. Because all identified losses are immediately charged off, no portion of the ACL is restricted to any individual loan or groups of loans, and the entire allowance is available to absorb any and all loan losses.

The evaluation of the adequacy of the ACL includes, among other factors, an analysis of historical loss rates and qualitative judgments, applied to current loan totals over remaining estimated lives. However, actual future losses may vary compared to historical trends and estimated remaining lives may change over time. Actual losses on specified problem loans, may depend upon disposition of collateral for which actual sales prices may differ from appraisals. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available.

Interest income is accrued as earned on a simple interest method. Accrual of interest is discontinued on a loan when management believes, after considering economic and business conditions and collection efforts, that the borrower’s financial condition is such that collection of interest is doubtful.

When a loan is placed on non-accrual status, all accumulated accrued interest receivable is reversed from income on a timely basis. Loans reported as having missed four or more consecutive monthly payments and still accruing interest must have both principal and accruing interest adequately secured and must be in the process of collection. Such loans are reported as 90 days

delinquent and still accruing. For all loan types, the Company uses the method of reporting delinquencies which considers a loan past due or delinquent if a monthly payment has not been received by the close of business on the loan’s next due date. In the Company’s reporting, two missed payments are reflected as 30 to 59 day delinquencies and three missed payments are reflected as 60 to 89 day delinquencies.

Loans which were originated and previously intended for sale in secondary markets, but which are now being held on the balance sheet as earning assets, are carried at estimated fair value and are excluded from the allowance analysis. Changes in fair value are recognized as unrealized gains or losses on commercial loans in the consolidated statements of operations. The Company originated and sold or securitized specific commercial mortgage loans in secondary markets through 2019, but in 2020 decided to retain these loans on its balance sheet. These loans are accounted for under the fair value option and amounted to $223.1 million at December 31, 2024, and $332.8 million at December 31, 2023. These loans are classified as commercial loans, at fair value on the consolidated balance sheets.

5. Premises and Equipment

Premises and equipment, including leasehold improvements, are stated at cost less accumulated depreciation. Depreciation expense is computed on the straight-line method over the useful lives of the assets. Leasehold improvements are depreciated over the shorter of the estimated useful lives of the improvements or the terms of the related leases.

6. Internal Use Software

The Company capitalizes costs associated with internally developed and/or purchased software systems for new products and enhancements to existing products that have reached the application stage and meet recoverability tests. Capitalized costs include external direct costs of materials and services utilized in developing or obtaining internal use software and payroll and payroll related expenses for employees who are directly associated with, and devote time to, the internal use software project. Capitalization of such costs begins when the preliminary project stage is complete and ceases no later than the point at which the project is substantially complete and ready for its intended purpose.

The carrying value of the Company’s software is periodically reviewed and a loss is recognized if the value of the estimated undiscounted cash flow benefit related to the asset falls below the unamortized cost. Amortization is provided using the straight-line method over the estimated useful life of the related software, which is generally seven years. As of December 31, 2024 and 2023, the Company had net capitalized software costs of approximately $5.0 million and $4.7 million, respectively. Net capitalized software is presented as part of other assets on the consolidated balance sheets. The Company recorded related amortization expense of approximately $1.1 million, $1.6 million and $2.0 million for the years ended December 31, 2024, 2023 and 2022, respectively.

7. Income Taxes

The Company accounts for income taxes under the liability method whereby deferred tax assets and liabilities are determined based on the difference between their carrying values on the consolidated balance sheet and their tax basis as measured by the enacted tax rates which will be in effect when these differences reverse. Deferred tax expense (benefit) is the result of changes in deferred tax assets and liabilities.

The Company recognizes the benefit of a tax position in the consolidated financial statements only after determining that the relevant tax authority would more likely than not sustain the position following an audit by the tax authority. For tax positions meeting the more likely than not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. For these analyses, the Company may engage attorneys to provide opinions related to the positions. The Company applies this policy to all tax positions for which the statute of limitations remain open, but this application does not materially impact the Company’s consolidated balance sheet or consolidated statement of operations. Any interest or penalties related to uncertain tax positions are recognized in income tax expense (benefit) in the consolidated statement of operations.

Deferred tax assets are recorded on the consolidated balance sheet at their net realizable value. The Company performs an assessment each reporting period to evaluate the amount of the deferred tax asset it is more likely than not to realize. Realization of

deferred tax assets is dependent upon the amount of taxable income expected in future periods, as tax benefits require taxable income to be realized. If a valuation allowance is required, the deferred tax asset on the consolidated balance sheet is reduced via a corresponding income tax expense in the consolidated statement of operations.

8. Stock-Based Compensation

The Company recognizes compensation expense for stock options and restricted stock units (“RSUs”) in accordance with ASC 718. The fair value of the option or RSU is generally measured on the grant date with compensation expense recognized over the service period, which is usually the stated vesting period. For options 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.

9. Other Real Estate Owned

Other real estate owned (“OREO”) is recorded at estimated fair market value less estimated cost of disposal; which establishes a new cost basis or carrying value. When property is acquired, the excess, if any, of the loan balance over fair market value is charged to the ACL. Periodically thereafter, the asset is reviewed for subsequent declines in the estimated fair market value against the carrying value. Subsequent declines, if any, and holding costs, as well as gains and losses on subsequent sale, are included in the consolidated statements of operations. Expenditures for OREO properties that extend it’s useful life or capacity are capitalized. The Company had $62.0 million of OREO at December 31, 2024 and $16.9 million at December 31, 2023.

10. Advertising Costs

The Company expenses advertising and marketing costs as incurred. Advertising and marketing costs amounted to $858,000, $978,000 and $1.2 million for the years ended December 31, 2024, 2023 and 2022, respectively. Advertising and marketing expense is reflected under “Other” in the non-interest expense section of the consolidated statements of operations.

11. Earnings Per Share

The Company calculates earnings per share under 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 prices. 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:


	Year ended December 31, 2024
	Income		Shares		Per share
	(numerator)		(denominator)		amount
	(Dollars in thousands except per share data)
Basic earnings per share
Net earnings available to common shareholders	$	217,540		50,063,620	$	4.35
Effect of dilutive securities
Common stock options and RSUs		—		649,520		(0.06)
Diluted earnings per share
Net earnings available to common shareholders	$	217,540		50,713,140	$	4.29

Stock options for 565,104 shares, exercisable at prices between $6.87 and $30.32 per share, were outstanding at December 31, 2024 and included in the diluted earnings per share computation because their exercise price per share was less than the average market price. Stock options for 103,189 shares were anti-dilutive and not included in the earnings per share calculation.


	Year ended December 31, 2023
	Income		Shares		Per share
	(numerator)		(denominator)		amount
	(Dollars in thousands except per share data)
Basic earnings per share
Net earnings available to common shareholders	$	192,296		54,506,065	$	3.52
Effect of dilutive securities
Common stock options and RSUs		—		547,432		(0.03)
Diluted earnings per share
Net earnings available to common shareholders	$	192,296		55,053,497	$	3.49

Stock options for 465,104 shares, exercisable at prices between $6.87 and $18.81 per share, were outstanding at December 31, 2023 and included in the diluted earnings per share computation because their exercise price per share was less than the average market price. Stock options for 157,573 shares were anti-dilutive and not included in the earnings per share calculation.


	Year ended December 31, 2022
	Income		Shares		Per share
	(numerator)		(denominator)		amount
	(Dollars in thousands except per share data)
Basic earnings per share
Net earnings available to common shareholders	$	130,213		56,556,303	$	2.30
Effect of dilutive securities
Common stock options and RSUs		—		712,643		(0.03)
Diluted earnings per share
Net earnings available to common shareholders	$	130,213		57,268,946	$	2.27

Stock options for 480,104 shares, exercisable at prices between $6.87 and $18.81 per share, were outstanding at December 31, 2022 and included in the diluted earnings per share computation because their exercise price per share was less than the average market price. Stock options for 100,000 shares were anti-dilutive and not included in the earnings per share calculation.

12. Restrictions on Cash and Due from Banks

Historically, the Bank has been required to maintain reserves against customer demand deposits by keeping cash on hand or balances with the FRB. Currently, no reserves are required.

13. 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 which is being amortized over a ten year period. Amortization expense is $340,000 per year ($454,000 over the next three years). The gross carrying value is $3.4 million with respective accumulated amortization of $3.0 million and $2.6 million at December 31, 2024 and December 31, 2023.

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 was $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 December 31, 2024 and 2023 are presented below.


	December 31,
	2024				2023
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization
		(Dollars in thousands)

Customer list intangibles	$	4,093	$	3,237	$	4,093	$	2,840
Goodwill		263		—		263		—
Trade Name		135		—		135		—
Total	$	4,491	$	3,237	$	4,491	$	2,840

The approximate future annual amortization of both the Company’s intangible items are as follows (dollars in thousands):


Year ending December 31,
2025	$	398
2026		173
2027		57
2028		57
2029		57
Thereafter		114
	$	856

14. Derivative Financial Instruments

The Company has periodically utilized derivatives to hedge interest rate risk on fixed rate loans which were previously intended for sale. As the Company is no longer originating fixed rate loans for sale, it is no longer entering into new hedges. The only hedge outstanding at December 31, 2023, for a notional amount of $6.8 million, was no longer outstanding at December 31, 2024. Under that swap agreement, the Company received an adjustable rate of interest based upon SOFR while it paid a fixed rate. At December 31, 2023, those respective rates were 2.16% and 5.59%. The Company recorded a loss of $285,000, a loss of $124,000 and a gain of $961,000 for the years ended December 31, 2024, 2023 and 2022, respectively, to recognize the fair value of derivative instruments. Those amounts are recorded on the consolidated statements of operations under “Net realized and unrealized gains (losses) on commercial loans (at fair value)”. At December 31, 2023, the amount receivable by the Company under this swap agreement was $285,000. The Company had minimum collateral posting thresholds with its derivative counterparty and had accordingly posted cash collateral of $548,000 at that date.

15. Common Stock Repurchase Program

Common stock repurchases in excess of additional paid-in-capital at the time of purchase are recorded as treasury stock, shown separately in the balance sheet. Treasury shares are accordingly excluded from earnings per share computation.

On October 20, 2021, the Board approved a revised stock repurchase program for the 2022 fiscal year (the “2022 Repurchase Program”), under which the Company purchased $15.0 million of shares in each quarter of 2022. The total of $60.0 million resulted in the repurchase of 2,322,256 shares of common stock at an average price of $25.84 per share.

On October 26, 2022, the Board approved a revised stock repurchase program for the 2023 fiscal year (the “2023 Repurchase Program”) under which the Company may repurchase shares totaling up to $25.0 million per quarter in 2023, for a maximum repurchase amount of $100.0 million. The total of $100.0 million resulted in the repurchase of 2,957,146 shares of common stock at an average price of $33.82 per share.

On October 26, 2023, the Board approved a common stock repurchase program for the 2024 fiscal year (the “2024 Common Stock Repurchase Program”) under which the Company may repurchase shares totaling up to $50.0 million per quarter in 2024, for a maximum amount of $200.0 million. The Company increased its share repurchase authorization for the second quarter of 2024 from $50.0 million to $100.0 million, which increased the maximum amount under the 2024 Common Stock Repurchase Program to $250.0 million. The total of $250.0 million resulted in the repurchase of 6,237,270 shares of common stock at an average price of $40.08 per share.

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.

16. Long-term Borrowings

The $14.1 million and $38.6 million outstanding for long-term borrowings at December 31, 2024 and 2023, respectively, consisted of sold loans which were accounted for as secured borrowings, because they did not qualify for true sale accounting.

17. Revenue Recognition

The Company’s revenue streams that are in the scope of Accounting Standards Codification (“ASC”) 606 include prepaid and debit card, card payment, interchange, automated clearing house (“ACH”) and deposit processing and other fees. The Company recognizes revenue when the performance obligations related to the transfer of goods or services under the terms of a contract are satisfied. Some obligations are satisfied at a point in time while others are satisfied over a period of time. Revenue is recognized as the amount of consideration to which the Company expects to be entitled to in exchange for transferring goods or services to a customer. When consideration includes a variable component, the amount of consideration attributable to variability is included in the transaction price only to the extent it is probable that significant revenue recognized will not be reversed when uncertainty associated with the variable consideration is subsequently resolved. The Company’s contracts generally do not contain terms that require significant judgment to determine the variability impacting the transaction price.

A performance obligation is deemed satisfied when the control over goods or services is transferred to the customer. Control is transferred to a customer either at a point in time or over time. To determine when control is transferred at a point in time, the Company considers indicators, including but not limited to the right to payment for the asset, transfer of significant risk and rewards of ownership of the asset and acceptance of the asset by the customer. When control is transferred over a period of time, for different performance obligations, either the input or output method is used to measure progress for the transfer. The measure of progress used to assess completion of the performance obligation varies between performance obligations and may be based on time throughout the period of service or on the value of goods and services transferred to the customer. As each distinct service or activity is performed, the Company transfers control to the customer based on the services performed as the customer simultaneously receives the benefits of those services. This timing of revenue recognition aligns with the resolution of any uncertainty related to variable consideration. Costs incurred to obtain a revenue producing contract are amortized over the life of the contract if material, otherwise they are expensed as a practical expedient. The fees on those revenue streams are generally assessed and collected as the transaction occurs, or on a monthly or quarterly basis. The Company has completed its review of the contracts and other agreements that are within the scope of revenue guidance and did not identify any material changes to the timing or amount of revenue recognition. The Company’s accounting policies did not change materially since the principles of revenue recognition in Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers are largely consistent with previous practices already implemented and applied by the Company. The vast majority of the Company’s services related to its revenues are performed, earned and recognized monthly.

The majority of fees the Company earns result from contractual transaction fees paid by third-party sponsors to the Company and monthly service fees. Additionally, the Company earns interchange fees paid through settlement with associations such as Visa, which are also determined on a per transaction basis. The Company records this revenue net of costs such as association fees and interchange transaction charges. Fees earned by the Company from processing card payments, or from processing ACH payments or other payments are also determined primarily on a per transaction basis.

Prepaid and debit card fees primarily include fees for services related to reconciliation, fraud detection, regulatory compliance and other services which are performed and earned daily or monthly and are also billed and collected on a monthly basis. Accordingly, there is no significant component of the services the Company performs or related revenues which are deferred. The Company earns transactional and/or interchange fees on prepaid and debit card accounts when transactions occur and revenue is billed and collected monthly or quarterly. Certain volume or transaction based interchange expenses paid to payment networks such as Visa, reduce revenue which is presented net on the income statement. Card payment and ACH processing fees include transaction fees earned for processing merchant transactions. Revenue is recognized when a cardholder’s transaction is approved and settled, or monthly. ACH processing fees are earned on a per item basis as the transactions are processed for third party clients and are also billed

and collected monthly. Service charges on deposit accounts include fees and other charges the Company receives to provide various services, including but not limited to, account maintenance, check writing, wire transfer and other services normally associated with deposit accounts. Revenue for these services is recognized monthly as the services are performed. The Company’s customer contracts do not typically have performance obligations and fees are collected and earned when the transaction occurs. The Company may, from time to time, waive certain fees for customers but generally does not reduce the transaction price to reflect variability for future reversals due to the insignificance of the amounts. Waiver of fees reduces the revenue in the period the waiver is granted to the customer.

18. Leases

The Company determines if an arrangement is a lease at inception. Operating lease right-of-use (“ROU”) assets and operating lease liabilities are included in the Company’s consolidated financial statements. ROU assets represent the Company’s right-of-use of an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments pursuant to the Company’s leases. The ROU assets and liabilities are recognized at commencement of the lease based on the present value of lease payments over the lease term. To determine the present value of lease payments, the Company uses its incremental borrowing rate. The lease term may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense is recognized on a straight-line basis over the lease term.

19. Senior Debt

On August 13, 2020, the Company issued $100 million of senior notes (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 of the Company’s existing and future unsecured and unsubordinated indebtedness and senior in right of payment to all of the Company’s existing and future subordinated indebtedness.

20. Charge-offs of certain consumer fintech loans

Lending agreements related to consumer fintech loans had certain charge-offs accounted for as freestanding credit enhancements which resulted in the company recording a $19.6 million provision for credit losses and a correlated amount in non-interest income resulting in no impact to net income.

21. Consumer credit fintech fees

Consumer credit fintech fees are comprised of fees paid by third-party marketers and servicers related to loans made by the Bank, which earns such fees based generally on average loan balances.

22. Recent Accounting Pronouncements

In March 2022, the FASB issued ASU 2022-02, Financial Instruments-Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures. This ASU addresses areas identified by the FASB as part of its post-implementation review of the credit losses standard (ASU 2016-13) that introduced the CECL model. The amendments eliminate the accounting guidance for troubled debt restructurings by creditors that have adopted the CECL model and enhance the disclosure requirements for loan refinancings and modifications. The Company adopted ASU 2022-02 on January 1, 2023. Effective January 1, 2023 loan modifications to borrowers experiencing financial difficulty are required to be disclosed by type of modification and by type of loan. Prior accounting guidance classified loans which were modified as troubled debt restructurings only if the modification reflected a concession from the lender in the form of a below market interest rate or other concession in addition to borrower financial difficulty.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures. ASU 2023-07 enhances segment level disclosures, for both annual and quarterly reporting periods and is effective with the December 31, 2024 financial statements. As a result of the enhancements, segment disclosures now include greater detail surrounding the nature of expenses previously reported as a single line item in the segment income statements. In addition to disclosing the chief operational decision maker by title and position, an explanation of how the segment information is used by that decision maker is now included.

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.

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2024
Subsequent Events [Abstract]
Subsequent Events	Note C— Subsequent Events The Company evaluated its December 31, 2024 consolidated financial statements for subsequent events through the date the consolidated financial statements were issued. The Company is not aware of any subsequent events which would require recognition or disclosure in the financial statements.

Investment Securities

12 Months Ended

Dec. 31, 2024

Investment Securities [Abstract]

Investment Securities

Note D—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 are summarized as follows (dollars in thousands):


Available-for-sale	December 31, 2024
			Gross		Gross			Allowance
	Amortized		unrealized		unrealized			for	Fair
	cost		gains		losses			Credit 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


Available-for-sale	December 31, 2023
			Gross		Gross			Allowance
	Amortized		unrealized		unrealized			for	Fair
	cost		gains		losses			Credit Losses	value
U.S. Government agency securities	$	35,346	$	6	$	(1,466)	$	—	$	33,886
Asset-backed securities⁽¹⁾		327,159		9		(1,815)		—		325,353
Tax-exempt obligations of states and political subdivisions		4,860		39		(48)		—		4,851
Taxable obligations of states and political subdivisions		43,323		15		(952)		—		42,386
Residential mortgage-backed securities		169,882		108		(9,223)		—		160,767
Collateralized mortgage obligation securities		35,575		—		(1,537)		—		34,038
Commercial mortgage-backed securities		157,759		—		(11,506)		—		146,253
Corporate debt securities		10,000		—		—		(10,000)		—
	$	783,904	$	177	$	(26,547)	$	(10,000)	$	747,534


	December 31, 2023
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
⁽¹⁾Asset-backed securities as shown above	cost		gains		losses		value
Federally insured student loan securities	$	6,032	$	—	$	(49)	$	5,983
Collateralized loan obligation securities		321,127		9		(1,766)		319,370
	$	327,159	$	9	$	(1,815)	$	325,353

The amortized cost and fair value of the Company’s investment securities at December 31, 2024, by contractual maturity are shown below (dollars in thousands). Expected maturities may differ from contractual maturities because borrowers may 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	$	51,119	$	50,650
Due after one year through five years		183,022		179,836
Due after five years through ten years		684,504		678,320
Due after ten years		607,759		594,054
	$	1,526,404	$	1,502,860

The Company had no securities pledged against that line at December 31, 2024 and December 31, 2023. There were no gross realized gains on sales of securities for each of the years ended December 31, 2024, 2023 and 2022. Realized losses on securities sales/calls were $2,000, $4,000, and $6,000, respectively, for the years ended December 31, 2024, 2023 and 2022.

Investments in FHLB, ACBB, and FRB stock are recorded at cost and amounted to $15.6 million at December 31, 2024, and $15.6 million at December 31, 2023.

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


Available-for-sale		Less than 12 months				12 months or longer				Total
	Number of securities	Fair Value		Unrealized losses			Fair Value	Unrealized losses		Fair Value		Unrealized losses
Description of Securities
U.S. Government agency securities	18	$	15,384	$	(307)	$	14,578	$	(964)	$	29,962	$	(1,271)
Asset-backed securities	14		35,108		(8)		33,854		(16)		68,962		(24)
Tax-exempt obligations of states and political subdivisions	6		5,664		(36)		1,123		(37)		6,787		(73)
Taxable obligations of states and political subdivisions	18		1,157		(18)		25,734		(423)		26,891		(441)
Residential mortgage-backed securities	155		172,076		(1,156)		37,527		(5,124)		209,603		(6,280)
Collateralized mortgage obligation securities	19		—		—		26,152		(1,127)		26,152		(1,127)
Commercial mortgage-backed securities	37		351,595		(4,402)		166,554		(12,900)		518,149		(17,302)
Total unrealized loss position
investment securities	267	$	580,984	$	(5,927)	$	305,522	$	(20,591)	$	886,506	$	(26,518)

The table below indicates the length of time individual securities had been in continuous unrealized loss positions at December 31, 2023 (dollars in thousands):


Available-for-sale		Less than 12 months				12 months or longer				Total
	Number of securities	Fair Value		Unrealized losses		Fair Value		Unrealized losses		Fair Value		Unrealized losses
Description of Securities
U.S. Government agency securities	15	$	14,945	$	(302)	$	17,697	$	(1,164)	$	32,642	$	(1,466)
Asset-backed securities	53		—		—		314,749		(1,815)		314,749		(1,815)
Tax-exempt obligations of states and political subdivisions	3		997		(3)		1,850		(45)		2,847		(48)
Taxable obligations of states and political subdivisions	25		—		—		39,621		(952)		39,621		(952)
Residential mortgage-backed securities	132		20,884		(491)		126,645		(8,732)		147,529		(9,223)
Collateralized mortgage obligation securities	20		—		—		34,038		(1,537)		34,038		(1,537)
Commercial mortgage-backed securities	40		—		—		146,253		(11,506)		146,253		(11,506)
Total unrealized loss position
investment securities	288	$	36,826	$	(796)	$	680,853	$	(25,751)	$	717,679	$	(26,547)

CECL accounting requires that an ACL be established through a charge to the income statement to recognize credit deterioration. The charge may be reversed should credit improve in the future. Prior accounting required recognition of losses of other-than temporary-impairment, which could not be reversed in future periods. The Company periodically reviews its investment portfolio to determine whether an ACL is warranted, based on evaluations of the creditworthiness of the issuers/guarantors, the underlying collateral if applicable and the continuing performance of the securities. The Company did not recognize credit charges on investment securities in either 2024 or 2022. In 2023, the Company recorded a provision for credit loss on a security as follows.

The Company owned one single issuer trust preferred security issued by an insurance company through the third quarter of 2024, which was purchased in 2006, and owns no other such security or similar security. In the fourth quarter of 2023, the Bank provided for a potential loss for the full amount of the $10.0 million par value of the security through a provision for credit loss of $10.0 million. In the fourth quarter of 2024, the issuer tendered an offer to repurchase these securities which the Company accepted. Accordingly, $1.0 million was recovered which resulted in a reversal of the provision for credit loss in that amount, and a charge-off of the remaining $9.0 million of the security.

The Company has evaluated the securities in the above tables as of December 31, 2024 and has concluded that, except for the trust preferred security discussed above for which the ACL was eliminated in the fourth quarter of 2024, none of these securities required an 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. With the exception of the trust preferred security discussed above and the CRE-2 security discussed in “Note E—Loans”, 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 and the Company intends to hold its investment securities to maturity.

Loans

12 Months Ended

Dec. 31, 2024

Loans [Abstract]

Loans

Note E—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. In 2024, the Company began making consumer fintech loans which consist of short-term extensions of credit including secured credit card loans made in conjunction with marketers and servicers. 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. These loans are included in commercial loans, at fair value which, at December 31, 2024 and 2023, amounted to $223.1 million and $332.8 million, respectively, with an amortized cost of $223.5 million and $336.5 million, respectively. Those totals also include the guaranteed portion of certain SBA loans, also previously held for sale. Included in net realized and unrealized gains (losses) on commercial loans, at fair value in the consolidated statements of operations are changes in the fair value of such loans resulting in an unrealized loss of $683,000 in 2024, an unrealized loss of $3.1 million in 2023 and an unrealized loss of $6.1 million in 2022. These amounts include unrealized credit related losses of $867,000, $1.7 million and $7.7 million, respectively, in 2024, 2023 and 2022. Interest earned on loans held at fair value during the period held is recorded in “Interest Income – Loans, including fees” in the consolidated statements of operations. The $1.7 million credit related unrealized loss in 2023 resulted from a non-controlling participation in a multifamily apartment building. Included in the $6.1 million loss in 2022 was a $4.0 million third quarter unrealized loss to reflect a write-down to a September 2022 appraisal, less estimated disposition costs, of a $9.5 million loan. The loan, collateralized by a movie theater, had been current and performing but missed its August 2022 payment, and the tenant ceased operations in that month. The property was subsequently transferred to OREO, and the unrealized loss was realized in 2023 upon sale of the property. The loan represented the only movie theater loan in the Company’s portfolios and was originated in 2015, before non-SBA commercial loan originations were primarily comprised of apartment building loans. Of the $2.21 billion of non-SBA commercial (bridge) loans, at fair value and REBL loans which together comprise the non-SBA commercial real estate portfolios, $2.17 billion are comprised of apartment building loans. In the third quarter of 2021, the Company resumed the origination of such 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 amount of loans pledged varies and the collateral may be unpledged at any time to the extent the collateral exceeds advances. The lines are maintained consistent with the Bank’s liquidity policy which maximizes potential liquidity. At December 31, 2024, $2.46 billion of loans were pledged to the Federal Reserve Bank and $2.22 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 December 31, 2024.

Of the six securities purchased by the Bank from our securitizations, all have been repaid except one issued by CRE-2, which is included in the commercial mortgage-backed securities classification in investment securities. As of December 31, 2024, the balance of the Bank’s CRE-2-issued security was reduced from $12.6 million to $3.5 million as a result of the sale of one of the two remaining collateral properties. The $3.5 million remains in non-accrual status. While the appraised value of the remaining property allocable to the Bank’s security exceeds the principal and unpaid interest, there can be no assurance as to the amounts received upon the servicer’s disposition of these properties, which will reflect additional servicing fees, actual disposition prices and other disposition costs.

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 $454.4 million of consumer fintech loans at December 31, 2024, $201.1 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 balances 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):


	December 31,		December 31,
	2024		2023

SBL non-real estate	$	190,322	$	137,752
SBL commercial mortgage		662,091		606,986
SBL construction		34,685		22,627
SBLs		887,098		767,365
Direct lease financing		700,553		685,657
SBLOC / IBLOC⁽¹⁾		1,564,018		1,627,285
Advisor financing⁽²⁾		273,896		221,612
Real estate bridge lending		2,109,041		1,999,782
Consumer fintech⁽³⁾		454,357		—
Other loans⁽⁴⁾		111,328		50,638
		6,100,291		5,352,339
Unamortized loan fees and costs		13,337		8,800
Total loans, net of unamortized loan fees and costs	$	6,113,628	$	5,361,139


	December 31,		December 31,
	2024		2023

SBLs, including costs net of deferred fees of $9,979 and $9,502 for December 31, 2024 and December 31, 2023, respectively	$	897,077	$	776,867
SBLs included in commercial loans, at fair value		89,902		119,287
Total SBLs⁽⁵⁾	$	986,979	$	896,154

^{(1 )}SBLOC are collateralized by marketable securities, while IBLOC are collateralized by the cash surrender value of insurance policies. At December 31, 2024 and December 31, 2023, IBLOC loans amounted to $548.1 million and $646.9 million, respectively.

⁽²⁾In 2020, the Bank began originating 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% of the business enterprise value based on a third-party valuation but may be increased depending upon the debt service coverage ratio. Personal guarantees and blanket business liens are obtained as appropriate.

⁽³⁾Consumer fintech loans included $201.1 million of secured credit card loans, with the balance consisting of other short-term extensions of credit.

⁽⁴⁾Includes demand deposit overdrafts reclassified as loan balances totaling $1.2 million and $1.7 million at December 31, 2024 and December 31, 2023, respectively. Estimated overdraft charge-offs and recoveries are reflected in the ACL and have been immaterial.

⁽⁵⁾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, 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):


	December 31, 2024								December 31, 2023
	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	$	1,308	$	351	$	1,327	$	2,635	$	1,320	$	598	$	522	$	1,842
SBL commercial mortgage		1,922		1,039		2,963		4,885		834		343		1,547		2,381
SBL construction		1,585		118		—		1,585		3,385		44		—		3,385
Direct leasing		5,561		2,377		465		6,026		3,618		1,827		167		3,785
IBLOC		503		413		—		503		—		—		—		—
Real estate bridge loans⁽¹⁾		—		—		12,300		12,300		—		—		—		—
Other loans		—		—		—		—		132		4		—		132
	$	10,879	$	4,298	$	17,055	$	27,934	$	9,289	$	2,816	$	2,236	$	11,525

⁽¹⁾The $12.3 million REBL shown for 2023 was repaid on January 2, 2025 without loss of principal.

The Company had $62.0 million of OREO at December 31, 2024, and $16.9 million of OREO at December 31, 2023. The following table summarizes the Company’s non-accrual loans, loans past due 90 days or more, and OREO at December 31, 2024, and 2023, respectively:


	December 31,
	2024		2023
		(Dollars in thousands)
Non-accrual loans
SBL non-real estate	$	2,635	$	1,842
SBL commercial mortgage		4,885		2,381
SBL construction		1,585		3,385
Direct leasing		6,026		3,785
IBLOC		503		—
Real estate bridge loans⁽¹⁾		12,300		—
Other loans		—		132
Total non-accrual loans		27,934		11,525

Loans past due 90 days or more and still accruing⁽²⁾		5,830		1,744
Total non-performing loans		33,764		13,269
OREO⁽³⁾		62,025		16,949
Total non-performing assets	$	95,789	$	30,218

⁽¹⁾The $12.3 million REBL shown for 2023 was repaid on January 2, 2025 without loss of principal.

⁽²⁾ The majority of the increase in Loans past due 90 days or more in 2024 compared to the prior year resulted from a $3.3 million IBLOC loan secured by the cash value of insurance, the payoff of which was subject to an administrative delay by the related insurance company.

⁽³⁾In the first quarter of 2024, a $39.4 million apartment building rehabilitation bridge loan was transferred to nonaccrual status. On April 2, 2024, the same loan was transferred from nonaccrual status to OREO, and comprised the majority of our OREO at December 31, 2024, with a balance at that date of $41.1 million. We intend to continue to manage the capital improvements on the underlying apartment complex. As the units become available for lease, the property manager will be tasked with leasing these units at market rents. That property is under agreement of sale with a sales price that is expected to cover the Company’s current balance plus the forecasted cost of improvements to the property. The purchaser has increased the total of earnest money deposits to $1.6 million, from $500,000, in consideration of extending the closing date to March 21, 2025. The Company believes that the purpose for the extension is to allow time for this sale to be included in a larger transaction. There can be no assurance that the purchaser will consummate the sale of the property, but if not consummated, the earnest money deposits of $1.6 million would accrue to the Company. The nonaccrual balances in this table as of December 31, 2024, are also reflected in the substandard loan totals.

Interest which would have been earned on loans classified as non-accrual at December 31, 2024 and 2023, was $1.1 million and $738,000, respectively. No income on non-accrual loans was recognized during 2024 or 2023. In 2024, $1.0 million of REBL, $161,000 of direct leasing, $130,000 of SBL commercial real estate, $38,000 of SBL non-real estate, and $14,000 of IBLOC were reversed from interest income, which represented interest accrued on loans placed into non-accrual status during the period. In 2023, $89,000 of legacy commercial real estate, $89,000 of SBL commercial real estate, $44,000 of SBL non-real estate, $13,000 of IBLOC, and $110,000 of direct leasing were reversed from interest income, which represented interest accrued on loans placed into non-accrual status during the period. In the third quarter of 2024 $815,000 of interest was reversed from interest income as a result of REBL loan modifications. In the fourth quarter of 2024, approximately $1.3 million was reversed in connection with a loan sale.

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 year to date periods ended December 31, 2024, and December 31, 2023, loans modified and related information are as follows (dollars in thousands):


	Year ended December 31, 2024										Year ended December 31, 2023
	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		Payment delay and term extension		Total		Percent of total loan category
SBL non-real estate	$	2,421	$	—	$	—	$	2,421		1.27%	$	651	$	—	$	651		0.47%
SBL commercial mortgage		3,255		—		—		3,255		0.49%		—		—		—		—
Direct lease financing		—		—		2,477		2,477		0.35%		—		127		127		0.02%
Real estate bridge lending⁽¹⁾		—		67,575		—		67,575		3.20%		—		12,300		12,300		0.62%
Total	$	5,676	$	67,575	$	2,477	$	75,728		1.24%	$	651	$	12,427	$	13,078		0.24%

⁽¹⁾ For the year ended December 31, 2024, the “as is” weighted average LTV of the real estate bridge lending balances was less than 73%, and the “as stabilized” LTV was approximately 63% based upon recent appraisals. “As stabilized” LTVs reflect the third-party appraiser’s estimated value after the rehabilitation is complete. The balances for both periods were also classified as either special mention or substandard as of December 31, 2024. The $12.3 million REBL shown for 2023 was repaid on January 2, 2025 without loss of principal.

The following table shows an analysis of loans that were modified during the year to date periods ended December 31, 2024, and December 31, 2023 presented by loan classification (dollars in thousands):


	Year ended December 31, 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	$	—	$	—	$	—	$	1,022	$	1,022	$	1,399	$	2,421
SBL commercial mortgage		—		—		—		—		—		3,255		3,255
Direct lease financing		—		2,477		—		—		2,477		—		2,477
Real estate bridge lending⁽¹⁾		—		—		—		—		—		67,575		67,575
	$	—	$	2,477	$	—	$	1,022	$	3,499	$	72,229	$	75,728

	Year ended December 31, 2023
	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	$	—	$	—	$	—	$	156	$	156	$	495	$	651
SBL commercial mortgage		—		—		—		—		—		—		—
Direct lease financing		—		—		—		127		127		—		127
Real estate bridge lending⁽¹⁾		—		—		—		—		—		12,300		12,300
	$	—	$	—	$	—	$	283	$	283	$	12,795	$	13,078

⁽¹⁾ For the year ended December 31, 2024, the “as is” weighted average LTV of the real estate bridge lending balances was less than 73%, and the “as stabilized” LTV was approximately 63% based upon recent appraisals. “As stabilized” LTVs reflect the third-party appraiser’s estimated value after the rehabilitation is complete. The balances for both periods were also classified as either special mention or substandard as of December 31, 2024. While the borrower for the $12.3 million REBL shown for 2023 ceased making payments in 2024, the loan was repaid on January 2, 2025 without loss of principal.

The following table describes the financial effect of the modifications made during the year to date periods ended December 31, 2024, and December 31, 2023 (dollars in thousands):


	Year ended December 31, 2024			Year ended December 31, 2023
	Combined Rate and Maturity			Combined Rate and Maturity
	Weighted average interest rate reduction	Weighted average term extension (in months)	More-than-insignificant-payment delay⁽²⁾	Weighted average interest rate reduction	Weighted average term extension (in months)	More-than-insignificant-payment delay⁽²⁾
SBL non-real estate	—	—	1.27%	—	—	0.47%
SBL commercial mortgage	—	—	0.49%	—	—	—
Direct lease financing	—	12.0	—	—	3.0	—
Real estate bridge lending⁽¹⁾	1.08%	—	1.28%	—	12.0	—

⁽¹⁾ For the year ended December 31, 2024, the “as is” weighted average LTV of the real estate bridge lending balances was less than 73%, and the “as stabilized” LTV was approximately 63% based upon recent appraisals. “As stabilized” LTVs reflect the third-party appraiser’s estimated value after the rehabilitation is complete. The balances for both periods were also classified as either special mention or substandard as of December 31, 2024.

⁽²⁾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 as of either December 31, 2024 or 2023.

As of December 31, 2024, there were $75.7 million of loans classified as modified with specific reserves of $768,000, while there were $13.1 million of loans classified as modified as of December 31, 2023 with specific reserves of $127,000.

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 and IBLOC, 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. Increases in substandard loans do not necessarily require increased provisions for credit losses or allowance allocations on the basis of loan-to-value and other considerations based upon assessments by the loan review department which is independent of the lending lines. A summary of the Company’s primary portfolio pools and loans accordingly classified, by year of origination, at December 31, 2024 and December 31, 2023 is as follows (dollars in thousands):


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 lending		504,007		418,326		853,596		333,112		—		—		—		2,109,041

Other loans
Non-rated		455,331		—		—		—		—		10,394		—		465,725
Pass		66,267		163		256		351		2,606		37,133		1,381		108,157
Special mention		—		—		—		—		—		232		—		232
Substandard		213		—		—		—		—		—		—		213
Total other loans⁽²⁾		521,811		163		256		351		2,606		47,759		1,381		574,327

	$	1,592,437	$	881,604	$	1,219,932	$	527,721	$	101,786	$	211,412	$	1,565,399	$	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. The “as stabilized” LTV reflects the third-party appraiser’s estimate of value after rehabilitation is complete. 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 Community Reinvestment Act (“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.


As of December 31, 2023	2023		2022		2021		2020		2019		Prior		Revolving loans at amortized cost		Total
SBL non real estate
Non-rated	$	507	$	—	$	—	$	—	$	—	$	—	$	—	$	507
Pass		47,066		32,512		26,919		9,662		4,334		5,357		—		125,850
Special mention		460		—		258		1,101		119		337		—		2,275
Substandard		—		495		632		564		250		562		—		2,503
Total SBL non-real estate		48,033		33,007		27,809		11,327		4,703		6,256		—		131,135

SBL commercial mortgage
Pass		128,375		138,281		93,399		67,635		58,550		98,704		—		584,944
Special mention		375		—		10,764		—		595		1,363		—		13,097
Substandard		—		—		—		452		1,853		1,928		—		4,233
Total SBL commercial mortgage		128,750		138,281		104,163		68,087		60,998		101,995		—		602,274

SBL construction
Pass		2,848		5,966		1,877		927		4,534		—		—		16,152
Special mention		—		—		3,090		—		—		—		—		3,090
Substandard		—		—		2,675		—		—		710		—		3,385
Total SBL construction		2,848		5,966		7,642		927		4,534		710		—		22,627
		.
Direct lease financing
Non-rated		1,273		—		—		—		—		—		—		1,273
Pass		302,362		221,768		92,945		37,664		17,469		4,349		—		676,557
Special mention		—		666		202		125		146		—		—		1,139
Substandard		135		3,898		1,998		372		184		101		—		6,688
Total direct lease financing		303,770		226,332		95,145		38,161		17,799		4,450		—		685,657

SBLOC
Non-rated		—		—		—		—		—		—		3,261		3,261
Pass		—		—		—		—		—		—		977,158		977,158
Total SBLOC		—		—		—		—		—		—		980,419		980,419

IBLOC
Pass		—		—		—		—		—		—		646,230		646,230
Substandard		—		—		—		—		—		—		636		636
Total IBLOC		—		—		—		—		—		—		646,866		646,866

Advisor financing
Pass		92,273		63,083		40,994		24,321		—		—		—		220,671
Special mention		—		—		—		941		—		—		—		941
Total advisor financing		92,273		63,083		40,994		25,262		—		—		—		221,612

Real estate bridge loans
Pass		397,073		1,013,199		461,474		—		—		—		—		1,871,746
Special mention		—		59,423		16,913		—		—		—		—		76,336
Substandard		—		—		51,700		—		—		—		—		51,700
Total real estate bridge lending		397,073		1,072,622		530,087		—		—		—		—		1,999,782

Other loans
Non-rated		2,555		—		—		—		—		11,513		—		14,068
Pass		165		260		363		2,609		2,314		40,101		1,593		47,405
Special mention		—		—		—		—		—		362		—		362
Substandard		—		—		—		—		—		132		—		132
Total other loans⁽¹⁾		2,720		260		363		2,609		2,314		52,108		1,593		61,967

Total	$	975,467	$	1,539,551	$	806,203	$	146,373	$	90,348	$	165,519	$	1,628,878	$	5,352,339

Unamortized loan fees and costs		—		—		—		—		—		—		—		8,800
Total															$	5,361,139

⁽¹⁾Included in Other loans are $11.3 million of SBA loans purchased for CRA purposes as of December 31, 2023. These loans are classified as SBL in the Company’s loan table, which classifies loans by type, as opposed to risk characteristics.

A description of major loan categories is as follows.

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 vast majority of these loans have been reimbursed by the U.S. government, with $1.5 million remaining to be reimbursed as of December 31, 2024. 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.

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.

SBLOC. SBLOC loans are made to individuals, trusts and other 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.

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.

Investment advisor financing. In 2020, the Company began originating loans to investment advisors for purposes of debt refinancing, acquisition of another firm or internal succession. Maximum loan amounts are subject to 70% of the estimated business enterprise value, based on a third-party valuation, 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.

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 Bancorp 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.

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. As a result of credit enhancements on consumer fintech loans, $19.6 million of related charge-offs correlated with $19.6 million of non-interest income. Year-to-date through February 28, 2025, $28.6 million of delinquent consumer fintech loans were fully participated and no charge-offs were recorded.

Other loans. Other loans include commercial and HELOC which the Company generally no longer offers.

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. The Company does not expect material amounts of accrued interest receivable for prior year periods to be reversed.

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 off-balance sheet credit exposures 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 in the liability account as of December 31, 2024 was $2.0 million.

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 (dollars in thousands):


	December 31, 2024
	SBL non-real estate		SBL commercial mortgage		SBL construction		Direct lease financing		SBLOC / IBLOC		Advisor financing		Real estate bridge lending		Consumer fintech		Other loans		Deferred fees and costs		Total
Beginning balance 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		—		548
Provision (credit)⁽¹⁾		(608)		383		57		6,928		382		392		1,863		19,619		(78)		—		28,938
Ending balance	$	4,972	$	3,203	$	342	$	13,125	$	1,195	$	2,054	$	6,603	$	—	$	450	$	—	$	31,944

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	$	—	$	450	$	—	$	27,594

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 had certain provisions accounted for as freestanding credit enhancements which resulted in the company recording a $19.6 million provision for credit losses and a correlated amount in non-interest income resulting in no impact to net income.


	December 31, 2023
	SBL non-real estate		SBL commercial mortgage		SBL construction		Direct lease financing		SBLOC / IBLOC		Advisor financing		Real estate bridge lending		Other loans		Deferred fees and costs		Total
Beginning balance 1/1/2023	$	5,028	$	2,585	$	565	$	7,972	$	1,167	$	1,293	$	3,121	$	643	$	—	$	22,374
Charge-offs		(871)		(76)		—		(3,666)		(24)		—		—		(3)		—		(4,640)
Recoveries		475		75		—		330		—		—		—		299		—		1,179
Provision (credit)		1,427		236		(280)		5,818		(330)		369		1,619		(394)		—		8,465
Ending balance	$	6,059	$	2,820	$	285	$	10,454	$	813	$	1,662	$	4,740	$	545	$	—	$	27,378

Ending balance: Individually evaluated for expected credit loss	$	670	$	343	$	44	$	1,827	$	—	$	—	$	—	$	4	$	—	$	2,888

Ending balance: Collectively evaluated for expected credit loss	$	5,389	$	2,477	$	241	$	8,627	$	813	$	1,662	$	4,740	$	541	$	—	$	24,490

Loans:
Ending balance	$	137,752	$	606,986	$	22,627	$	685,657	$	1,627,285	$	221,612	$	1,999,782	$	50,638	$	8,800	$	5,361,139

Ending balance: Individually evaluated for expected credit loss	$	1,919	$	2,381	$	3,385	$	3,785	$	—	$	—	$	—	$	362	$	—	$	11,832

Ending balance: Collectively evaluated for expected credit loss	$	135,833	$	604,605	$	19,242	$	681,872	$	1,627,285	$	221,612	$	1,999,782	$	50,276	$	8,800	$	5,349,307


	December 31, 2022
	SBL non-real estate		SBL commercial mortgage		SBL construction		Direct lease financing		SBLOC / IBLOC		Advisor financing		Real estate bridge lending		Other loans		Deferred fees and costs		Total
Beginning balance 1/1/2022	$	5,415	$	2,952	$	432	$	5,817	$	964	$	868	$	1,181	$	177	$	—	$	17,806
Charge-offs		(885)		—		—		(576)		—		—		—		—		—		(1,461)
Recoveries		140		—		—		124		—		—		—		24		—		288
Provision (credit)		358		(367)		133		2,607		203		425		1,940		442		—		5,741
Ending balance	$	5,028	$	2,585	$	565	$	7,972	$	1,167	$	1,293	$	3,121	$	643	$	—	$	22,374

Ending balance: Individually evaluated for expected credit loss	$	525	$	441	$	153	$	933	$	—	$	—	$	—	$	15	$	—	$	2,067

Ending balance: Collectively evaluated for expected credit loss	$	4,503	$	2,144	$	412	$	7,039	$	1,167	$	1,293	$	3,121	$	628	$	—	$	20,307

Loans:
Ending balance	$	108,954	$	474,496	$	30,864	$	632,160	$	2,332,469	$	172,468	$	1,669,031	$	61,679	$	4,732	$	5,486,853

Ending balance: Individually evaluated for expected credit loss	$	1,374	$	1,423	$	3,386	$	3,550	$	—	$	—	$	—	$	4,539	$	—	$	14,272

Ending balance: Collectively evaluated for expected credit loss	$	107,580	$	473,073	$	27,478	$	628,610	$	2,332,469	$	172,468	$	1,669,031	$	57,140	$	4,732	$	5,472,581

‎

A summary of the Company’s 2024 net charge-offs, classified by the year of the related loan origination, is as follows (dollars in thousands):


As of December 31, 2024		2024		2023		2022		2021		2020		Prior		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		—		—		—		—		—		—		—

Other loans
Current period charge-offs		(19,619)		(6)		—		—		—		(12)		(19,637)
Current period recoveries		—		—		—		—		—		1		1
Current period other loans net charge-offs		(19,619)		(6)		—		—		—		(11)		(19,636)

Total
Current period charge-offs		(19,636)		(803)		(2,888)		(1,116)		(381)		(96)		(24,920)
Current period recoveries		—		46		177		92		71		162		548
Current period net charge-offs	$	(19,636)	$	(757)	$	(2,711)	$	(1,024)	$	(310)	$	66	$	(24,372)

A summary of the Company’s 2023 net charge-offs, classified by the year of the related loan origination, is as follows (dollars in thousands):


As of December 31, 2023		2023		2022		2021		2020		2019		Prior		Total
SBL non-real estate
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	(871)	$	(871)
Current period recoveries		—		—		—		—		—		475		475
Current period SBL non-real estate net charge-offs		—		—		—		—		—		(396)		(396)

SBL commercial mortgage
Current period charge-offs		—		—		—		—		—		(76)		(76)
Current period recoveries		—		—		—		—		—		75		75
Current period SBL commercial mortgage net charge-offs		—		—		—		—		—		(1)		(1)

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

Direct lease financing
Current period charge-offs		(138)		(2,138)		(1,117)		(234)		(39)		—		(3,666)
Current period recoveries		—		48		168		96		—		18		330
Current period direct lease financing net charge-offs		(138)		(2,090)		(949)		(138)		(39)		18		(3,336)

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

IBLOC
Current period charge-offs		—		(12)		(12)		—		—		—		(24)
Current period recoveries		—		—		—		—		—		—		—
Current period IBLOC net charge-offs		—		(12)		(12)		—		—		—		(24)

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		—		—		—		—		—		—		—

Other loans
Current period charge-offs		—		—		—		—		—		(3)		(3)
Current period recoveries		—		—		—		—		—		299		299
Current period other loans net charge-offs		—		—		—		—		—		296		296

Total
Current period charge-offs		(138)		(2,150)		(1,129)		(234)		(39)		(950)		(4,640)
Current period recoveries		—		48		168		96		—		867		1,179
Current period net charge-offs	$	(138)	$	(2,102)	$	(961)	$	(138)	$	(39)	$	(83)	$	(3,461)

The Company did not have loans acquired with deteriorated credit quality at either December 31, 2024, or December 31, 2023. In 2024, the Company purchased $46.7 million of SBLs, none of which were credit deteriorated. Additionally, in 2024 the Company participated in SBLs with other institutions in the amount of $19.7 million. On December 31, 2024 the Company sold $82 million of REBL loans.

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


2025	$	216,481
2026		160,674
2027		125,350
2028		56,851
2029		18,977
2030 and thereafter		3,006
Total undiscounted cash flows		581,339
Residual value⁽¹⁾		220,342
Difference between undiscounted cash flows and discounted cash flows		(101,128)
Present value of lease payments recorded as lease receivables	$	700,553

⁽¹⁾Of the $220,342,000, $48,295,000 is not guaranteed by the lessee or other guarantors.

The non-accrual loans in the following table are treated as collateral dependent to the extent they have resulted from borrower financial difficulties (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 ACL for deficiencies between estimated collateral and loan carrying values. During the twelve months ended December 31, 2024, 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):


	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 lending⁽¹⁾		—		—		—		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

	December 31, 2023
	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	$	84	$	333	$	336	$	1,842	$	2,595	$	135,157	$	137,752
SBL commercial mortgage		2,183		—		—		2,381		4,564		602,422		606,986
SBL construction		—		—		—		3,385		3,385		19,242		22,627
Direct lease financing		5,163		1,209		485		3,785		10,642		675,015		685,657
SBLOC / IBLOC		21,934		3,607		745		—		26,286		1,600,999		1,627,285
Advisor financing		—		—		—		—		—		221,612		221,612
Real estate bridge lending		—		—		—		—		—		1,999,782		1,999,782
Consumer fintech		—		—		—		—		—		—		—
Other loans		853		76		178		132		1,239		49,399		50,638
Unamortized loan fees and costs		—		—		—		—		—		8,800		8,800
	$	30,217	$	5,225	$	1,744	$	11,525	$	48,711	$	5,312,428	$	5,361,139
⁽¹⁾The $12.3 million shown in the non-accrual column for real estate bridge loans was repaid on January 2, 2025 without loss of principal. 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%. Since 2021, real estate bridge lending originations have consisted of apartment buildings, while this loan was originated previously. In January 2025, two loans totaling $9.8 million were transferred to non-accrual and were accordingly classified as substandard.

Premises And Equipment

12 Months Ended

Dec. 31, 2024

Premises And Equipment [Abstract]

Premises And Equipment

Note F—Premises and Equipment

Premises and equipment are as follows (dollars in thousands):


			December 31,
	Estimated
	useful lives		2024		2023
Land		-	$	1,732	$	1,732
Buildings		39 years		3,436		3,436
Furniture, fixtures, and equipment		2 to 12 years		60,503		58,068
Leasehold improvements		6 to 15 years		20,820		20,254
				86,491		83,490
Accumulated depreciation				(58,925)		(56,016)
			$	27,566	$	27,474

Depreciation expense for the years ended December 31, 2024, 2023 and 2022 was approximately $4.2 million, $3.1 million and $2.9 million, respectively.

Time Deposits	12 Months Ended
Time Deposits	Dec. 31, 2024
Time Deposits [Abstract]
Time Deposits	Note G—Time Deposits There were no time deposits outstanding at December 31, 2024 and December 31, 2023.

Variable Interest Entity (VIE)

12 Months Ended

Dec. 31, 2024

Variable Interest Entity [Abstract]

Variable Interest Entity (VIE)

Note H—Variable Interest Entity (“VIE”)

VIE’s are entities that, by design, either (1) lack sufficient equity to permit the entity to finance its activities without additional subordinated financial support from other parties, or (2) have equity investors that do not have the ability to make significant decisions relating to the entity’s operations through voting rights, or do not have the obligation to absorb the expected losses, or do not have the right to receive the residual returns of the entity.

The most common type of VIE is a special purpose entity (“SPE”). SPEs are commonly used in securitization transactions in order to isolate certain assets and distribute the cash flows from those assets to investors. The basic SPE structure involves a company selling assets to the SPE with the SPE funding the purchase of those assets by issuing securities to investors. The agreements that govern the transaction specify how the cash earned on the assets must be allocated to the SPE’s investors and other parties that have rights to those cash flows. SPEs are generally structured to insulate investors from claims on the SPE’s assets by creditors of other entities, including the creditors of the seller of the assets. The primary beneficiary of a VIE (i.e., the party that has a controlling financial interest) is required to consolidate the assets and liabilities of the VIE. The primary beneficiary is the party that has both (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance; and (2) through its interests in the VIE, the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The following table shows the Company’s remaining interest in the CRE-2 security, which represents a single security purchased by the Company in the securitizations for which the Company generated all of the commercial mortgage-backed loan collateral (dollars in thousands).


	December 31, 2024
	Principal amount outstanding						The Company's
					Assets held in		interest
	Total assets		Assets held in		nonconsolidated		in securitized
	held by		consolidated		VIEs with		assets in
	securitization		securitization		continuing		nonconsolidated
	VIEs⁽¹⁾		VIEs		involvement		VIEs⁽²⁾
Commercial mortgage-backed securities
CRE2⁽³⁾	$	24,450	$	—	$	24,450	$	3,462
CRE3		1,939		—		1,939		—
CRE4		261		—		261		—
CRE5		12,991		—		12,991		—

	December 31, 2023
	Principal amount outstanding						The Company's
					Assets held in		interest
	Total assets		Assets held in		nonconsolidated		in securitized
	held by		consolidated		VIEs with		assets in
	securitization		securitization		continuing		nonconsolidated
	VIEs⁽¹⁾		VIEs		involvement		VIEs
Commercial mortgage-backed securities
CRE2	$	40,743	$	—	$	40,743	$	12,574
CRE3		1,939		—		1,939		—
CRE4		821		—		821		—
CRE5		14,138		—		14,138		—

⁽¹⁾Consists of notes backed by commercial loans predominantly secured by real estate.

⁽²⁾For securities purchased from securitizations which comprise the Company's interest: CRE2 was non-rated at issuance. As of December 31, 2024, CRE2 is valued by discounted cash flow analysis.

⁽³⁾ Remaining collateral is comprised of a loan on a suburban office building. While the estimated value of this source of repayment exceeds the amount to be repaid to the Company, there can be no assurance that the Company's interest will be fully repaid or as to the timing of repayment. See “ Note E—Loans”.

Debt

12 Months Ended

Dec. 31, 2024

Debt [Abstract]

Debt

Note I—Debt

1.Short-term borrowings

The Bank has overnight borrowing capacity with the FHLB of Des Moines which amounted to $1.02 billion at December 31, 2024, collateralized by loans. The Bank also had a $1.99 billion line with the Federal Reserve as of that date, also collateralized by loans. Borrowings under these arrangements have been made with one day terms at rates which vary daily. As of December 31, 2024, the Bank did not have any borrowings outstanding on these lines. The details for such daily borrowings are presented below:


	As of or for the year ended December 31,
	2024		2023		2022
		(Dollars in thousands)
Short-term borrowings
Balance at year-end	$	—	$	—	$	—
Average during the year		44,220		5,739		60,312
Maximum month-end balance		455,000		450,000		495,000
Weighted average rate during the year		5.58%		4.72%		2.55%
Rate at December 31		—		—		—

2.Securities sold under agreements to repurchase

Securities sold under agreements to repurchase generally mature within 30 days from the date of the transactions. The detail of securities sold under agreements to repurchase is presented below:


	As of or for the year ended December 31,
	2024		2023		2022
		(Dollars in thousands)
Securities sold under repurchase agreements
Balance at year-end	$	—	$	42	$	42
Average during the year		3		41		41
Maximum month-end balance		—		42		42
Weighted average rate during the year		—		—		—
Rate at December 31		—		—		—

3. Guaranteed preferred beneficiary interest in the Company’s subordinated debt

As of December 31, 2023, the Company held two statutory business trusts: The Bancorp Capital Trust II and The Bancorp Capital Trust III (the “Trusts”). In each case, the Company owns all the common securities of the Trust. The Trusts issued preferred capital securities to investors and invested the proceeds in the Company through the purchase of junior subordinated debentures issued by the Company (the “2038 Debentures”). The 2038 Debentures are the sole assets of the Trusts. The $10.3 million of 2038 Debentures issued to The Bancorp Capital Trust II and the $3.1 million of 2038 Debentures issued to The Bancorp Capital Trust III were both issued on November 28,2007, mature on March 15, 2038 and bear interest at the Secured Overnight Financing Rate (“SOFR”) plus 3.51%.

As of December 31, 2024, the Trusts qualify as VIEs under ASC 810, Consolidation. However, the Company is not considered the primary beneficiary and, therefore, the Trusts are not consolidated in the Company’s consolidated financial statements. The Trusts are accounted for under the equity method of accounting.

4. Senior debt

On August 13, 2020, the Company issued $100.0 million of 2025 Senior Notes, which have 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 of the Company’s existing and future unsecured and unsubordinated indebtedness and senior in right of payment to all of the Company’s existing and future subordinated indebtedness.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481544/470-10-50-6

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-URI https://asc.fasb.org/1943274/2147481544/470-10-50-6

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Paragraph 1
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1B
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-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org/470/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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-SubTopic 30
-Name Accounting Standards Codification
-Section 45
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482925/835-30-45-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Section 50
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-Subparagraph (g)
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-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1E

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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Reference 20: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Shareholders' Equity	12 Months Ended
Shareholders' Equity	Dec. 31, 2024
Shareholders' Equity [Abstract]
Shareholders' Equity	Note J—Shareholders’ Equity As a means of returning capital to shareholders, the Company implemented stock repurchase programs which totaled $40.0 million, $60.0 million, $100.0 million, and $250.0 million respectively, in 2021, 2022, 2023 and 2024 with $150.0 million planned for 2025. The planned amounts of such repurchases are 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.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
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-Section 50
-Paragraph 13
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-Publisher FASB
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147481112/505-10-50-14

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Subparagraph (a)
-Publisher FASB
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Section 50
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-18

+ Details

Benefit Plans

12 Months Ended

Dec. 31, 2024

Benefit Plans [Abstract]

Benefit Plans

Note K—Benefit Plans

401 (k) Plan

The Company maintains a 401(k) savings plan covering substantially all employees of the Company. Under the plan, the Company matches 50% of the employee contributions for all participants, not to exceed 6% of their salary. Contributions made by the Company were approximately $2.4 million, $2.3 million and $2.0 million for the years ended December 31, 2024, 2023 and 2022, respectively and are reflected in salaries and employee benefits in the consolidated statement of operations.

Supplemental Executive Retirement Plan

In 2005, the Company began contributing to a supplemental executive retirement plan for its former Chief Executive Officer that provides annual retirement benefits of $25,000 per month until death. There were $300,000 of disbursements under the plan in each of 2024, 2023 and 2022. The actuarial assumptions as of December 31, 2024, 2023 and 2022 reflected respective discount rates of 5.11%, 4.56% and 4.73% with a monthly benefit of $25,000. Projected payouts for years one, two, three, four, and five are $300,000, $281,000, $267,000, $252,000, and $236,000, respectively, and $912,000 for the subsequent five years. The Company adjusts its related liability to actuarially derived estimates of lifetime payouts based upon actuarial tables as follows: SOA Pri-2012 Amount-Weighted White Collar Retiree Mortality Table with Mortality Improvement Scale MP-2021. The Company’s related expense was $300,000, $300,000 and $300,000, respectively, for the years ended December 31, 2024, 2023 and 2022. As of December 31, 2024, the Company had accrued $3.0 million for potential future payouts.

- Definition

The entire disclosure for retirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 70
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480794/715-70-50-1

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 715
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-Section 55
-Paragraph 17
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480482/715-20-55-17

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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-Section 50
-Paragraph 1
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-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Paragraph 1
-Subparagraph (d)(i)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1
-Subparagraph (q)
-Publisher FASB
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480126/715-20-S99-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 60
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480266/715-60-50-3

+ Details

Income Taxes

12 Months Ended

Dec. 31, 2024

Income Taxes [Abstract]

Income Taxes

Note L—Income Taxes

The Company operates in the United States and is subject to corporate net income taxes for federal and state purposes. The components of income tax expense included in the statements of continuing operations are as follows:


	For the years ended
	December 31,
	2024		2023		2022
		(Dollars in thousands)
Current tax provision
Federal	$	54,569	$	55,314	$	29,994
State		17,730		14,845		11,837
		72,299		70,159		41,831
Deferred tax provision (benefit)
Federal		2,272		(4,925)		5,206
State		45		(756)		664
		2,317		(5,681)		5,870
	$	74,616	$	64,478	$	47,701

The differences between applicable income tax expense (benefit) from continuing operations and the amounts computed by applying the statutory federal income tax rate of 21% for 2024, 2023 and 2022, are as follows:


	For the years ended
	December 31,
	2024		2023		2022
		(Dollars in thousands)

Computed tax expense at statutory rate	$	61,353	$	53,923	$	37,410
State taxes		12,011		10,885		9,499
Tax-exempt interest income		(766)		(459)		(480)
Meals and entertainment		57		82		6
Civil money penalty		—		—		368
Other net nondeductible (deductible) items		1,281		(49)		(22)
Other		680		96		920
	$	74,616	$	64,478	$	47,701

Deferred income taxes are provided for the temporary difference between the financial reporting basis and the tax basis of the Company’s assets and liabilities. Cumulative temporary differences recognized in the financial statement of position are as follows:


	For the years ended
	December 31,
	2024		2023
		(Dollars in thousands)
Deferred tax assets:
Allowance for credit losses	$	8,526	$	9,874
Non-accrual interest		1,993		3,408
Deferred compensation		747		734
Nonqualified stock options		1,623		1,523
Capital loss limitations		5,701		6,280
Tax deductible goodwill		682		713
Operating lease liabilities		5,515		4,618
Unrealized losses on investment securities available-for-sale		5,909		6,509
Fair value adjustment to investments		44		802
Deferred income		225		—
Other		1,000		178
Total gross deferred tax assets		31,965		34,639
Federal and state valuation allowance		(5,701)		(6,280)
Deferred tax liabilities:
Depreciation		2,140		2,771
Right of use asset		5,250		4,369
Total deferred tax liabilities		7,390		7,140
Net deferred tax asset	$	18,874	$	21,219

Management assesses all available positive and negative evidence to determine whether it is more likely than not that the Company will be able to recognize the existing deferred tax assets. If that threshold is not met, a valuation allowance is established against the deferred tax asset. The federal and state valuation allowance at December 31, 2024 and 2023, respectively, was $5.7 million and $6.3 million and resulted from Walnut Street assets, primarily because related capital losses will likely be non-deductible. Walnut Street reflected the Bank’s prior investment in an entity through which a portion of its discontinued loan portfolio was sold.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:


	For the years ended
	December 31,
	2024		2023		2022
	(in thousands)
Beginning balance at January 1	$	—	$	—	$	338
Decreases in tax provisions for prior years		—		—		(338)
Gross unrecognized tax benefits at December 31	$	—	$	—	$	—

Management does not believe these amounts will significantly increase or decrease within 12 months of December 31, 2024. The total amount of unrecognized tax benefits, if recognized, will impact the effective tax rate.

Tax years after 2021 remain subject to examination by the federal authorities, and 2020 and after remain subject to examination by most state tax authorities. The Company recognizes interest accrued and penalties related to unrecognized tax benefits in income tax expense for all periods presented. To date, no amounts of interest or penalties relating to unrecognized tax benefits have been recorded.

- Definition

The entire disclosure for income tax.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 740
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-Name Accounting Standards Codification
-Section 55
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-URI https://asc.fasb.org/1943274/2147482663/740-10-55-231

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12C
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B

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-URI https://asc.fasb.org/1943274/2147477891/740-270-50-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-URI https://asc.fasb.org/740/tableOfContent

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Section 50
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-21

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147482685/740-10-50-17

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482603/740-30-50-2

+ Details

Stock-Based Compensation

12 Months Ended

Dec. 31, 2024

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note M—Stock-Based Compensation

The Company recognizes compensation expense for stock options and RSUs in accordance with FASB ASC 718, Stock Based Compensation. The expense 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 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 each option 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. For RSUs, fair value is determined by the quoted price of the Company’s common stock on Nasdaq as of the date of grant.

At December 31, 2024, the Company had three active stock-based compensation plans: The Bancorp, Inc. 2024 Equity Incentive Plan (the “2024 Plan”) The Bancorp, Inc. 2020 Equity Incentive Plan (the “2020 Plan”) and The Bancorp, Inc. 2018 Equity Incentive Plan (the “2018 Plan”).

The 2024 Plan was adopted in May 2024. Employees and directors of the Company and the Bank and consultants (with restrictions) are eligible to participate in the 2024 Plan. Terms of options granted under the 2024 Plan may not exceed 10 years from the date of grant. Any employee or consultant who possesses more than 10% of voting power of all classes of stock of the Company, or any parent or subsidiary, may not have options with terms exceeding five years from the date of grant. An aggregate of 2,370,000 shares of common stock were reserved for issuance under the 2024 Plan. RSUs may also be granted under the 2024 Plan, with conditions similar to those for options.

The 2020 Plan was adopted in May 2020. Employees and directors of the Company and the Bank and consultants (with restrictions) are eligible to participate in the 2020 Plan. Terms of options granted under the 2020 Plan may not exceed 10 years from the date of grant. Any employee or consultant who possesses more than 10% of voting power of all classes of stock of the Company, or any parent or subsidiary, may not have options with terms exceeding five years from the date of grant. An aggregate of 3,300,000 shares of common stock were reserved for issuance under the 2020 Plan, but none remain. RSUs may have also been granted under the 2020 Plan, with conditions similar to those for options.

The 2018 Plan was adopted in May 2018. Employees and directors of the Company and the Bank and consultants (with restrictions) are eligible to participate in the 2018 Plan. Terms of options granted under the 2018 Plan may not exceed 10 years from the date of grant. Any employee or consultant who possesses more than 10% of voting power of all classes of stock of the Company, or any parent or subsidiary, may not have options with terms exceeding five years from the date of grant. An aggregate of 1,700,000 shares of common stock were reserved for issuance under the 2018 Plan, but none remain. Restricted stock units may have also been granted under the 2018 Plan, with conditions similar to those for options.

During 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. During 2023, the Company granted 57,573 stock options with a vesting period of four years and a weighted average grant-date fair value of $17.37. During 2022, the Company granted 100,000 stock options with a vesting period of four years and a weighted average grant-date fair value of $14.01. There were no common stock options exercised in 2024. The total stock options exercised in 2023 and 2022 were 13,158 and 58,531, respectively.

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
		(Dollars in thousands except per share data)

Outstanding at January 1, 2024		622,677	$	15.35		6.90	$	14,453,641
Granted		45,616		43.89		9.12		—
Exercised		—		—		—		—
Expired		—		—		—		—
Forfeited		—		—		—		—
Outstanding at December 31, 2024		668,293		17.30		6.12		23,613,391
Exercisable at December 31, 2024		504,497	$	12.00		5.58	$	20,499,784

A summary of the Company’s non-vested options under the Equity Plans as of December 31, 2024, and changes during 2024, is presented below:


		Weighted-average
		grant date
	Options	fair value
Non-Vested at January 1, 2024	257,573	$	10.49
Granted	45,616		21.92
Vested	(139,393)		7.46
Expired	—		—
Forfeited	—		—
Non-Vested at December 31, 2024	163,796	$	16.26

The Company granted 390,305 RSUs in 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 2024 had a fair value of $42.87 per unit. The Company granted 547,556 RSUs in 2023, of which 514,785 have a vesting period of three years and 32,771 have a vesting period of one year. At issuance, the 547,556 RSUs granted in 2023 had a fair value of $35.00 per unit. The Company granted 260,693 RSUs in 2022, of which 219,311 have a vesting period of three years and 41,382 had a vesting period of one year. At issuance, the 260,693 RSUs granted in 2022 had a fair value of $28.61 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, 2024	752,255	$	32.53		1.66
Granted	390,305		42.87		1.96
Vested	(345,390)		30.39		—
Forfeited	(2,784)		32.32		—
Outstanding at December 31, 2024	794,386	$	38.29		1.44

There were 345,390 options exercised and RSUs vested in 2024, 470,149 options exercised and RSUs vested in 2023 and 641,320 options exercised and RSUs vested in 2022. The total intrinsic value of the options exercised and RSUs vested in 2024, 2023 and 2022 was $14.8 million, $16.8 million and $15.7 million, respectively. The total issuance date fair value of options that were exercised and RSUs which vested during the years ended December 31, 2024, 2023, 2022, was $10.5 million, $6.4 million, and $6.1 million, respectively.

As of December 31, 2024, there was a total of $19.1 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 1.2 years. Related compensation expense for the years ended December 31, 2024, 2023 and 2022 was $15.0 million, $11.4 million and $7.6 million respectively, and the related tax benefits recognized were $3.2 million, $2.4 million and $1.6 million, respectively.

For the years ended December 31, 2024, 2023 and 2022, 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:


	December 31,
	2024	2023		2022
Risk-free interest rate	4.17%		3.67%		1.94%
Expected dividend yield	—		—		—
Expected volatility	44.76%		45.21%		45.10%
Expected lives (years)	6.3		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 the ASC 718, stock-based compensation expense for the year ended December 31, 2024 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.

Transactions With Affiliates

12 Months Ended

Dec. 31, 2024

Transactions With Affiliates [Abstract]

Transactions With Affiliates

Note N—Transactions with Affiliates

The Bank did not maintain any deposits for various affiliated companies as of December 31, 2024 and December 31, 2023, 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 December 31, 2024, these loans were current as to principal and interest payments, and did not involve more than normal risk of collectability or present other unfavorable features. At December 31, 2024 and 2023, loans to these related parties amounted to $6.9 million and $5.7 million, respectively.

Mr. Hersh Kozlov, a director of the Company, is a partner at Duane Morris LLP, an international law firm. The Company paid Duane Morris LLP $4,800 in 2024, $174,000 in 2023 and $1.5 million in 2022 for legal services.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
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-Topic 850
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-Name Accounting Standards Codification
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
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-URI https://asc.fasb.org/850/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
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-URI https://asc.fasb.org/1943274/2147483326/850-10-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
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-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483326/850-10-50-1

+ Details

Commitments And Contingencies

12 Months Ended

Dec. 31, 2024

Commitments And Contingencies

Commitments And Contingencies

Note O—Commitments and Contingencies

1. Operating Leases

As part of its cost control efforts, the Company is actively managing its facilities. The lease for its Wilmington, Delaware operations facility and its Crofton, Maryland business leasing office expire in 2028 and 2025, respectively. The lease for its Westmont (suburban Chicago), Illinois SBL office will expire in 2026. The occupied New York and Norristown sites are, respectively, loan administration and leasing offices, and the leases will expire in 2035 and 2028, respectively. The Memphis, Tennessee SBL office lease will expire in 2025. The Morrisville, North Carolina SBL loan office lease will expire in 2027. The Company also has leases for SBL and leasing business development offices in Utah that will expire in 2028. The Company’s lease in South Dakota for its prepaid and debit card division will expire in 2038.

These leases require the Company to pay the real estate taxes and insurance on the leased properties in addition to rent. The approximate future minimum annual rental payments, including any additional rents for escalation clauses, are as follows (dollars in thousands):


Year ending December 31,

2025	$	4,189
2026		4,148
2027		4,150
2028		2,685
2029		2,000
Thereafter		17,841
	$	35,013

Rent and related expense for the years ended December 31, 2024, 2023 and 2022 were approximately $5.4 million, $4.3 million and $3.7 million net of sublease rentals of approximately $406,000, $406,000 and $406,000, respectively.

2. Legal Proceedings

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 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 the motion was denied and the case is in the midst of the first phase of discovery. The Company is unable to determine whether the ultimate resolution of the matter will have a material adverse effect on the Company’s financial condition or operations.

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, withdraws its implied indemnity claim against the Bank and adds several defendants unaffiliated with the Bank and causes of action related to those parties. As to the Bank, Cachet seeks approximately $150 million in damages, an accounting and disallowance of the Bank’s proof of claim. 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. 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.

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.

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, which is still 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.

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.

Financial Instruments With Off-Balance-Sheet Risk And Concentrations Of Credit Risk

12 Months Ended

Dec. 31, 2024

Financial Instruments With Off-Balance-Sheet Risk And Concentrations Of Credit Risk [Abstract]

Financial Instruments With Off-Balance-Sheet Risk And Concentrations Of Credit Risk

Note P—Financial Instruments with Off-Balance-Sheet Risk and Concentrations of Credit Risk

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Such financial instruments are recorded in the consolidated financial statements when they become payable. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets. The contractual, or notional, amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments.

The approximate contract amounts and maturity term of the Company’s unused credit commitments are as follows:


	December 31,
	2024		2023
		(Dollars in thousands)
Financial instruments whose contract amounts represent credit risk
Commitments to extend credit	$	1,973,937	$	1,785,050
Standby letters of credit		1,698		1,698
	$	1,975,635	$	1,786,748

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation. The vast majority of commitments to extend credit arise from SBLOC which are variable rate and which represent collateral values available to support additional extensions of credit, and not expected usage. Such commitments are normally based on the full amount of collateral in a customer’s investment account. The majority of such lines of credit have historically not been drawn upon.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Company holds residential or commercial real estate, accounts receivable, inventory and equipment as collateral supporting those commitments for which collateral is deemed necessary. The Company reduces any potential liability on its standby letters of credit based upon its estimate of the proceeds obtainable upon the liquidation of the collateral held. Fair values of unrecognized financial instruments, including commitments to extend credit and the fair value of letters of credit, are considered immaterial.

The Company’s exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual or notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. CECL accounting guidance requires the establishment of an allowance for loss on such unfunded instruments. To establish that allowance, the Company generally utilizes the same methodologies as it does to establish allowances on outstanding loans, adjusted for estimated usage as appropriate.

Fair Value Of Financial Instruments

12 Months Ended

Dec. 31, 2024

Fair Value Of Financial Instruments [Abstract]

Fair Value Of Financial Instruments

Note Q—Fair Value of Financial Instruments

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. 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 sold loans in 2019 and prior years and may do so in the future. For fair value disclosure purposes, the Company utilized the fair value measurement criteria of ASC 820, Fair Value Measurements and Disclosures (“ASC 820”).

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” that are the best information available in the circumstances. Assets classified as level 3 are only classified as such, when the observable inputs discussed above are not available, often as a result of thinly traded markets. 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. There were no transfers between levels in 2024 and 2023. or fair value disclosure purposes, the Company utilized certain value measurement criteria required under the ASC 820, as discussed below.

Estimated fair values have been determined by the Company using the best available data and an estimation methodology it believes to be suitable for each category of financial instruments. 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, had recorded values of $570.1 million and $1.04 billion at December 31, 2024 and 2023, respectively, which approximated fair values.

Investment securities have estimated fair values based on quoted market prices or other observable inputs, if available. If observable inputs are not available, fair values are determined using unobservable (Level 3) inputs that are based on the best information available in the circumstances. For these investment securities, fair values are based on the present value of expected cash flows from principal and interest to maturity, or yield to call as appropriate, at the measurement date.

Commercial loans, at fair value are comprised of commercial real estate bridge loans and SBA loans which had been previously 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 borrower-specific credit risk. The carrying value of accrued interest 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.

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.

Deposits (comprised of interest and non-interest-bearing checking accounts, savings, 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 are equal to their carrying amounts as they are overnight borrowings. There were no short-term borrowings outstanding at December 31, 2024 and December 31, 2023.

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. There were no time deposits outstanding at December 31, 2024 and December 31, 2023.

Long-term borrowings resulted from sold loans which did not qualify for true sale accounting. They are presented in the principal amount of such loans.

Interest rate swaps are either assets or liabilities and have a fair value which is estimated 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 the applicable interest rate index.

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. Fair value information for specific balance sheet categories is as follows.


	December 31, 2024
					Quoted prices		Significant
					in active		other		Significant
					markets for		observable		unobservable
	Carrying		Estimated		identical assets		inputs		inputs
	amount		fair value		(Level 1)		(Level 2)		(Level 3)
		(Dollars in thousands)
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		—
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		—


	December 31, 2023
					Quoted prices		Significant
					in active		other		Significant
					markets for		observable		unobservable
	Carrying		Estimated		identical assets		inputs		inputs
	amount		fair value		(Level 1)		(Level 2)		(Level 3)
		(Dollars in thousands)
Investment securities, available-for-sale	$	747,534	$	747,534	$	—	$	735,463	$	12,071
Federal Reserve, FHLB and ACBB stock		15,591		15,591		—		—		15,591
Commercial loans, at fair value		332,766		332,766		—		—		332,766
Loans, net of deferred loan fees and costs		5,361,139		5,329,436		—		—		5,329,436
Accrued interest receivable		37,534		37,534		—		37,534		—
Interest rate swaps, asset		285		285		—		285		—
Demand and interest checking		6,630,251		6,630,251		—		6,630,251		—
Savings and money market		50,659		50,659		—		50,659		—
Senior debt		95,859		96,539		—		96,539		—
Subordinated debentures		13,401		11,470		—		—		11,470
Other long-term borrowings		38,561		38,561		—		38,561		—
Securities sold under agreements to repurchase		42		42		42		—		—
Accrued interest payable		1,060		1,060		—		1,060		—

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


			Fair Value Measurements at Reporting Date Using
			Quoted prices in active		Significant other		Significant
			markets for identical		observable		unobservable
	Fair value		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
	$	1,725,975	$	—	$	1,499,398	$	226,577


			Fair Value Measurements at Reporting Date Using
			Quoted prices in active		Significant other		Significant
			markets for identical		observable		unobservable
	Fair value		assets		inputs		inputs
	December 31, 2023		(Level 1)		(Level 2)		(Level 3)
	.
Investment securities, available-for-sale
U.S. Government agency securities	$	33,886	$	—	$	33,886	$	—
Asset-backed securities		325,353		—		325,353		—
Obligations of states and political subdivisions		47,237		—		47,237		—
Residential mortgage-backed securities		160,767		—		160,767		—
Collateralized mortgage obligation securities		34,038		—		34,038		—
Commercial mortgage-backed securities		146,253		—		134,182		12,071
Total investment securities, available-for-sale		747,534		—		735,463		12,071
Commercial loans, at fair value		332,766		—		—		332,766
Interest rate swaps, asset		285		—		285		—
	$	1,080,585	$	—	$	735,748	$	344,837

The Company’s Level 3 asset activity for the categories shown for the years 2024 and 2023 is as follows (dollars in thousands):


		Fair Value Measurements Using
		Significant Unobservable Inputs
		(Level 3)

	Available-for-sale				Commercial loans,
	securities				at fair value
	December 31, 2024		December 31, 2023		December 31, 2024		December 31, 2023
Beginning balance	$	12,071	$	20,023	$	332,766	$	589,143
Transfers to OREO		—		—		(2,863)		(2,686)
Total net gains or (losses) (realized/unrealized)
Included in earnings		—		—		3,016		3,869
Included in earnings (included in credit loss)		—		(10,000)		—		—
Included in other comprehensive income (loss)		503		2,048		—		—
Purchases, advances, sales and settlements
Advances		—		—		—		134,256
Settlements		(9,112)		—		(109,804)		(391,816)
Ending balance	$	3,462	$	12,071	$	223,115	$	332,766

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)	$	(3,085)

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


	December 31, 2024		December 31, 2023
Beginning balance	$	16,949	$	21,210
Transfer from loans, net		42,120		—
Transfer from commercial loans, at fair value		2,863		2,686
Advances		1,695		—
Write-downs		—		(1,147)
Sales		(1,602)		(5,800)
Ending balance	$	62,025	$	16,949

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



	Fair value at				Range at	Weighted average at
Level 3 instruments only	December 31, 2024		Valuation techniques	Unobservable inputs	December 31, 2024	December 31, 2024

Commercial mortgage-backed investment
security⁽¹⁾	$	3,462	Discounted cash flow	Discount rate	9.45%	9.45%

Commercial - SBA⁽²⁾		89,902	Discounted cash flow	Discount rate	6.77%	6.77%
Non-SBA commercial real estate⁽³⁾		133,213	Discounted cash flow and appraisal	Discount rate	6.80%-11.50%	8.77%
Commercial loans, at fair value		223,115

OREO⁽⁴⁾		62,025	Appraised value	N/A	N/A	N/A


	Fair value at				Range at	Weighted average at
Level 3 instruments only	December 31, 2023		Valuation techniques	Unobservable inputs	December 31, 2023	December 31, 2023

Commercial mortgage-backed investment
security	$	12,071	Discounted cash flow	Discount rate	14.00%	14.00%

Commercial - SBA		119,287	Discounted cash flow	Discount rate	7.46%	7.46%
Non-SBA commercial real estate - fixed		162,674	Discounted cash flow and appraisal	Discount rate	8.00%-12.30%	8.76%
Non-SBA commercial real estate - floating		50,805	Discounted cash flow	Discount rate	9.30%-16.50%	14.19%
Commercial loans, at fair value		332,766

OREO		16,949	Appraised value	N/A	N/A	N/A

The valuations for each of the instruments above, as of the balance sheet date, are sensitive to judgments, assumptions and uncertainties, changes in which could have a significant impact on such valuations. Weighted averages were calculated using the discount rate for each individual security or loan weighted by its par value, except for SBA loans. For SBA loans, traders’ pricing indications based on loan seasoning were weighted. 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 value of subordinated debentures are a disclosure item, without impact on the financial statements. Changes in the fair value of loans recorded at amortized cost which are unrelated to credit are also a disclosure item, without impact on the financial statements. The notes below refer to the December 31, 2024 table.

⁽¹⁾ Commercial mortgage-backed investment security, consisting of a single bank-issued CRE security, is valued using discounted cash flow analysis. The discount rate and prepayment rate applied are based upon market observations and actual experience for comparable securities and implicitly assume market averages for defaults and loss severities. The CRE-2 security has significant credit enhancement, or protection from other subordinated tranches in the issue, which limits the valuation exposure to credit losses. Nonetheless, increases in expected default rates or loss severities on the loans underlying the issue could reduce its value. In market environments in which investors demand greater yield compensation for credit risk, the discount rate applied would ordinarily be higher and the valuation lower. Changes in loss experience could also change the interest earned on this holding in future periods and impact its fair value. As a single security, the weighted average rate shown is the actual rate applied to the CRE-2 security. For additional information related to this security see “Note E—Loans”.

⁽²⁾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.

⁽³⁾ 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.

⁽⁴⁾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, at December 31, 2024 and 2023 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	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


			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, 2023		(Level 1)		(Level 2)		(Level 3)


Collateral dependent loans with specific reserves⁽¹⁾	$	8,944	$	—	$	—	$	8,944
OREO		16,949		—		—		16,949
	$	25,893	$	—	$	—	$	25,893

⁽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 December 31, 2024, principal on collateral dependent loans, which is accounted for on the basis of the value of underlying collateral, is shown in the above table at an estimated fair value of $6.6 million. To arrive at that fair value, related loan principal of $10.9 million was reduced by specific allowances of $4.3 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 allowance and decreasing principal. At December 31, 2023, principal on loans individually evaluated for an ACL, that is accounted for on the basis of the value of underlying collateral, is shown in the above table at an estimated fair value of $8.9 million. To arrive at that fair value, related loan principal of $11.8 million was reduced by specific allowances of $2.9 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. 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.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 107
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482078/820-10-55-107

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 100
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482078/820-10-55-100

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(3)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2E
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 940
-SubTopic 820
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478119/940-820-50-1

+ Details

Regulatory Matters

12 Months Ended

Dec. 31, 2024

Regulatory Matters [Abstract]

Regulatory Matters

Note R—Regulatory Matters

It is the policy of the Federal Reserve that financial holding companies should pay cash dividends on common stock only from 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 financial holding companies 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.


							To be well
							capitalized under
					For capital		prompt corrective
		Actual			adequacy purposes		action provisions
		Amount	Ratio		Amount	Ratio	Amount	Ratio
		(Dollars in thousands)
As of December 31, 2024
Total capital
(to risk-weighted assets)
The Bancorp, Inc.	$	840,139	14.46%	$	464,739	>=8.00	N/A	N/A
The Bancorp Bank, National Association		921,743	15.87%		464,596	8.00	580,745	>= 10.00%

Tier 1 capital
(to risk-weighted assets)
The Bancorp, Inc.		806,167	13.88%		348,554	>=6.00	N/A	N/A
The Bancorp Bank, National Association		887,771	15.29%		348,447	6.00	464,596	>= 8.00%

Tier 1 capital
(to average assets)
The Bancorp, Inc.		806,167	9.41%		342,810	>=4.00	N/A	N/A
The Bancorp Bank, National Association		887,771	10.38%		342,164	4.00	427,705	>= 5.00%

Common equity tier 1
(to risk-weighted assets)
The Bancorp, Inc.		806,167	13.88%		232,370	>=4.00	N/A	N/A
The Bancorp Bank, National Association		887,771	15.29%		261,335	4.50	377,484	>= 6.50%

As of December 31, 2023
Total capital
(to risk-weighted assets)
The Bancorp, Inc.	$	855,599	16.23%	$	421,660	>=8.00	N/A	N/A
The Bancorp Bank, National Association		941,646	17.92%		420,430	8.00	525,538	>= 10.00%

Tier 1 capital
(to risk-weighted assets)
The Bancorp, Inc.		825,597	15.66%		316,245	>=6.00	N/A	N/A
The Bancorp Bank, National Association		911,644	17.35%		315,323	6.00	420,430	>= 8.00%

Tier 1 capital
(to average assets)
The Bancorp, Inc.		825,597	11.19%		295,246	>=4.00	N/A	N/A
The Bancorp Bank, National Association		911,644	12.37%		294,736	4.00	368,420	>= 5.00%

Common equity tier 1
(to risk-weighted assets)
The Bancorp, Inc.		825,597	15.66%		210,830	>=4.00	N/A	N/A
The Bancorp Bank, National Association		911,644	17.35%		236,492	4.50	341,600	>= 6.50%

As of December 31, 2024, the Bank met all regulatory requirements for classification as well capitalized under the regulatory framework for prompt corrective action.

- Definition

The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union.

+ References + Details

Condensed Financial Information-Parent Only

12 Months Ended

Dec. 31, 2024

Condensed Financial Information-Parent Only [Abstract]

Condensed Financial Information-Parent Only

Note S—Condensed Financial Information—Parent Only

Condensed Balance Sheets


	December 31,
	2024		2023
		(Dollars in thousands)
Assets
Cash and due from banks	$	10,650	$	8,895
Investment in subsidiaries		871,388		893,328
Other assets		21,107		16,550
Total assets	$	903,145	$	918,773

Liabilities and stockholders' equity
Other liabilities	$	3,747	$	2,232
Senior debt		96,214		95,859
Subordinated debentures		13,401		13,401
Shareholders' equity		789,783		807,281
Total liabilities and stockholders' equity	$	903,145	$	918,773

Condensed Statements of Operations


	For the year ended December 31,
	2024		2023		2022
		(Dollars in thousands)
Income
Dividend income from subsidiary	$	259,000	$	100,000	$	15,000
Other income		34		329		10
Total income		259,034		100,329		15,010

Expense
Interest on subordinated debentures		1,155		1,121		657
Interest on senior debt		4,935		5,027		5,118
Non-interest expense		15,701		12,589		8,520
Total expense		21,791		18,737		14,295
Income tax benefit		(4,568)		(3,864)		(2,999)
Equity in undistributed (loss) income of subsidiaries		(24,271)		106,840		126,499
Net income available to common shareholders	$	217,540	$	192,296	$	130,213

Condensed Statements of Cash Flows



	Year ended December 31,
	2024		2023		2022
		(Dollars in thousands)
Operating activities
Net income	$	217,540	$	192,296	$	130,213
Net amortization of investment securities discounts/premiums		355		82		368
Increase in other assets		(4,557)		(3,534)		(1,692)
Increase (decrease) in other liabilities		1,515		(45)		27
Stock based compensation expense		14,983		11,392		7,592
Equity in undistributed loss (income)		24,271		(106,840)		(126,499)
Net cash used in operating activities		254,107		93,351		10,009

Financing activities
Proceeds from the exercise of common stock options		—		104		320
Redemptions of senior debt offering		—		(3,273)		—
Repurchases of common stock		(252,352)		(99,999)		(60,000)
Net cash used in financing activities		(252,352)		(103,168)		(59,680)
Net decrease in cash and cash equivalents		1,755		(9,817)		(49,671)
Cash and cash equivalents, beginning of year		8,895		18,712		68,383
Cash and cash equivalents, end of year	$	10,650	$	8,895	$	18,712

Segment Financials

12 Months Ended

Dec. 31, 2024

Segment Financials [Abstract]

Segment Financials

Note T—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 income 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-E 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 and others including regulatory, reputation and other risks.

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


	For the year ended December 31, 2024
		Fintech		REBL		Institutional Banking		Commercial		Corporate		Total

Interest income		$	214	$	207,062	$	121,522	$	124,490	$	98,304	$	551,592
Interest allocation			261,484		(98,064)		(69,942)		(69,960)		(23,518)		—
Interest expense			156,271		—		3,962		35		15,083		175,351
Net interest income			105,427		108,998		47,618		54,495		59,703		376,241
Provision for credit losses⁽¹⁾			19,619		2,159		763		6,416		(1,615)		27,342
Non-interest income⁽¹⁾			136,542		3,264		211		5,541		924		146,482
Direct non-interest expense
Salaries and employee benefits			15,577		3,996		9,659		18,323		84,042		131,597
Data processing expense			1,552		169		2,329		7		1,609		5,666
Software			486		104		2,962		1,777		12,584		17,913
Other			9,203		4,719		2,093		7,698		24,336		48,049
Income before non-interest expense allocations			195,532		101,115		30,023		25,815		(60,329)		292,156
Non-interest expense allocations
Risk, financial crimes, and compliance			26,922		2,177		3,017		4,921		(37,037)		—
Information technology and operations			13,732		723		5,993		7,444		(27,892)		—
Other allocated expenses			15,814		3,021		6,574		7,070		(32,479)		—
Total non-interest expense allocations			56,468		5,921		15,584		19,435		(97,408)		—
Income before taxes			139,064		95,194		14,439		6,380		37,079		292,156
Income tax expense			35,516		24,312		3,688		1,629		9,471		74,616
Net income		$	103,548	$	70,882	$	10,751	$	4,751	$	27,608	$	217,540

⁽¹⁾ In 2024, lending agreements related to consumer fintech loans had certain charge-offs accounted for as freestanding credit enhancements which resulted in the Company recording a $19.6 million provision for credit losses and a correlated amount in non-interest income resulting in no impact to net income.


	For the year ended December 31, 2023 as restated
		Fintech		REBL		Institutional Banking		Commercial		Corporate		Total

Interest income		$	110	$	194,419	$	136,069	$	102,596	$	76,313	$	509,507
Interest allocation			264,820		(97,941)		(84,807)		(68,487)		(13,585)		—
Interest expense			139,500		507		4,355		—		11,093		155,455
Net interest income			125,430		95,971		46,907		34,109		51,635		354,052
Provision for credit losses			—		1,529		(25)		7,222		9,604		18,330
Non-interest income			99,376		6,037		760		6,881		(960)		112,094
Direct non-interest expense
Salaries and employee benefits			13,666		3,607		9,680		16,480		77,622		121,055
Data processing expense			1,309		153		2,358		5		1,622		5,447
Software			552		99		2,951		1,341		12,406		17,349
Other			9,554		3,693		1,923		8,310		23,711		47,191
Income before non-interest expense allocations			199,725		92,927		30,780		7,632		(74,290)		256,774
Non-interest expense allocations
Risk, financial crimes, and compliance			25,803		1,221		1,741		2,473		(31,238)		—
Information technology and operations			13,189		805		6,928		6,488		(27,410)		—
Other allocated expenses			11,598		2,284		5,895		5,928		(25,705)		—
Total non-interest expense allocations			50,590		4,310		14,564		14,889		(84,353)		—
Income before taxes			149,135		88,617		16,216		(7,257)		10,063		256,774
Income tax expense			37,449		22,252		4,072		(1,822)		2,527		64,478
Net income (loss)		$	111,686	$	66,365	$	12,144	$	(5,435)	$	7,536	$	192,296

	For the year ended December 31, 2022 as restated
		Fintech		REBL		Institutional Banking		Commercial		Corporate		Total

Interest income		$	113	$	108,934	$	89,623	$	74,834	$	34,791	$	308,295
Interest allocation			205,174		(73,050)		(82,414)		(49,326)		(384)		—
Interest expense			42,883		1,004		2,079		—		13,488		59,454
Net interest income			162,404		34,880		5,130		25,508		20,919		248,841
Provision for credit losses			—		2,056		659		2,593		1,800		7,108
Non-interest income			86,313		11,494		98		5,200		2,578		105,683
Direct non-interest expense
Salaries and employee benefits			11,553		1,974		8,953		14,440		68,448		105,368
Data processing expense			1,018		157		2,164		5		1,628		4,972
Software			555		99		2,600		1,233		11,724		16,211
Other			9,463		1,816		2,182		7,457		22,033		42,951
Income before non-interest expense allocations			226,128		40,272		(11,330)		4,980		(82,136)		177,914
Non-interest expense allocations
Risk, financial crimes, and compliance			23,466		1,035		1,474		2,089		(28,064)		—
Information technology and operations			12,263		797		5,805		5,247		(24,112)		—
Other allocated expenses			11,212		2,150		4,902		5,388		(23,652)		—
Total non-interest expense allocations			46,941		3,982		12,181		12,724		(75,828)		—
Income (loss) before taxes			179,187		36,290		(23,511)		(7,744)		(6,308)		177,914
Income tax expense (benefit)			48,042		9,730		(6,304)		(2,076)		(1,691)		47,701
Net income (loss)		$	131,145	$	26,560	$	(17,207)	$	(5,668)	$	(4,617)	$	130,213


	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


	December 31, 2023 as restated
		Fintech		REBL		Institutional Banking		Commercial		Corporate		Total

Total assets		$	42,769	$	2,208,030	$	1,867,702	$	1,468,654	$	2,118,540	$	7,705,695
Total liabilities		$	6,412,911	$	3,258	$	186,503	$	9,718	$	286,024	$	6,898,414

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 48
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482785/280-10-55-48

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (f)
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-URI https://asc.fasb.org/1943274/2147482810/280-10-50-32

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 270
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-Subparagraph (i)
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-URI https://asc.fasb.org/1943274/2147482964/270-10-50-1

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+ Details

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2024

Summary of Significant Accounting Policies [Abstract]

Basis Of Presentation

1. Basis of Presentation

The accounting and reporting policies of the Company conform to generally accepted accounting principles in the United States of America (“GAAP”) and predominant practices within the banking industry. The consolidated financial statements include the accounts of the Company and all its subsidiaries. All inter-company balances have been eliminated.

The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The principal estimate that is particularly susceptible to a significant change in the near term relates to our allowance for credit losses (“ACL”) on loans, leases and securities. This estimate, made in accordance with GAAP, involves a significant level of estimation uncertainty and has had, or is reasonably likely to have, a material impact on our financial condition or results of operations.

Cash And Cash Equivalents

2. Cash and Cash Equivalents

Cash and cash equivalents are defined as cash and amounts due from banks with an original maturity from date of purchase of three months or less and federal funds sold. The Company maintains balances in excess of insured limits at various financial institutions including the Federal Reserve Bank (the “Federal Reserve”), the Federal Home Loan Bank (“FHLB”) and other private institutions. The Company does not believe these instruments carry a significant risk of loss, but cannot provide assurances that no losses could occur if these institutions were to become insolvent.

Investment Securities

3. Investment Securities

Investments in debt which management believes may be sold prior to maturity due to changes in interest rates, prepayment risk, liquidity requirements, or other factors, are classified as available-for-sale. Net unrealized gains for such securities, net of tax effect, are reported as other comprehensive income, through equity and are excluded from the determination of net income. The unrealized losses for available-for-sale securities are evaluated to determine if any component is attributable to credit loss versus market factors. If the present value of cash flows expected to be collected is less than the amortized cost basis, a provision for credit losses is recorded within the consolidated statement of operations. Subsequent improvement in credit may result in reversal of the credit charge in future periods. For available-for-sale debt securities in an unrealized loss position, the Company also assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. The Company does not engage in securities trading. Gains or losses on disposition of investment securities are based on the net proceeds and the adjusted carrying amount of the securities sold using the specific identification method.

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, as of December 31, 2024, unrealized losses on securities reflected changes in market interest rates after the securities were purchased. The Company’s unrealized loss for debt securities is primarily related to general market conditions, including a lack of liquidity in the market. 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. As a result of its quarterly review, the Company concluded that an allowance was not required to recognize credit losses in either 2024 or 2022. In 2023, the Company recognized a provision of $10.0 million for the total $10.0 million par value of the only trust preferred security in its portfolio, based upon limited financial and other information received from the issuer. In the fourth quarter of 2024, the issuer tendered an offer to repurchase these securities which the Company accepted. Accordingly, $1.0 million was recovered which resulted in a reversal of the provision for credit loss in that amount, and a charge-off of the remaining $9.0 million of the security.

Loans And ACL