WILMINGTON, DE — The Bancorp Inc. raised its 2026 earnings forecast after second-quarter profit increased and fintech-related fee revenue expanded, offsetting pressure from lower net interest income and a narrower lending margin.
The financial holding company (Nasdaq: TBBK) reported net income of $60.7 million, or $1.45 per diluted share, for the second quarter, compared with $59.8 million, or $1.27 per share, a year earlier. Diluted earnings per share rose 14.2%.
The Bancorp increased its full-year 2026 earnings guidance to $5.95 to $6.05 per share and maintained its 2027 forecast of $8.10 to $8.30 per share. The company expects fourth-quarter earnings of $1.65 to $1.75 per share.
“Our performance in the second quarter of 2026 significantly surpassed our own forecasts of profitability and GDV growth,” Chief Executive Officer Damian Kozlowski said.
The results reflected a continued shift toward fintech lending and fee-generating businesses even as traditional spread income weakened.
Net interest income fell 7.2% from a year earlier to $90.5 million, while net interest margin narrowed to 3.85% from 4.44%. The Bancorp attributed the decline partly to a greater concentration of fintech loans, which generate more fee income, as well as higher interest expense tied to senior debt issued in 2025 and a $3 million one-time gain recorded in the prior-year quarter.
Excluding credit enhancement income, non-interest income rose 16.7% from a year earlier to $47.3 million. Fintech fees accounted for 29.7% of revenue excluding credit enhancement, up from 25.8% a year earlier.
Consumer credit fees from fintech loans climbed 64.9% to $6.5 million. Prepaid, debit card, ACH and other payment fees increased 8.4% to $34.3 million.
Gross dollar volume across prepaid, debit and credit cards reached $53.45 billion, up 22.5% from $43.65 billion a year earlier.
Average fintech loans rose 159% from the second quarter of 2025 to $1.39 billion. Ending fintech loans were $901.5 million, up 32.5% year over year but down 45.3% from the first quarter.
The company attributed the sequential decline largely to payment-processing timing that reduced quarter-end balances rather than underlying customer activity.
Total loans, net of deferred fees and costs, ended the quarter at $7.07 billion, up 8.2% from a year earlier but down 8.8% from March 31. Growth from the prior year included increases in fintech lending and securities- and insurance-backed lines of credit.
Average deposits rose 4.4% from a year earlier to $8.41 billion, while their average cost declined to 1.63% from 2.18%.
Fintech relationships generated 96% of total deposits. At June 30, 94% of deposits were insured, according to the company.
The Bancorp also reported $1.12 billion of deposits swept to other financial institutions and $744 million of short-term borrowings through secured Federal Reserve Bank and Federal Home Loan Bank facilities. It had another $3.79 billion of available borrowing capacity against pledged loans and securities.
Credit metrics improved from a year earlier.
The total provision for credit losses declined to $26.1 million from $44.4 million, while net charge-offs fell to $25.7 million from $37.8 million. The company attributed much of the improvement to better performance in its fintech loan portfolio.
Criticized loans declined to $146.7 million from $305.2 million a year earlier, driven primarily by improvement in real estate bridge lending and direct lease financing.
The allowance for credit losses stood at $63.5 million at quarter-end, including $30.7 million tied to fintech loans and $32.8 million for other loans.
Non-interest expense was $56.5 million, down $700,000 from a year earlier. The efficiency ratio improved to 41% from 41.5%.
Return on equity increased to 34.7% from 28.4% a year earlier, while return on assets declined to 2.51% from 2.64%.
The Bancorp repurchased 870,129 shares during the quarter for $50 million, an average price of $57.46 per share. The shares represented about 2.1% of issued and outstanding stock.
Shareholders’ equity totaled $705.4 million at June 30, up $8.4 million from the previous quarter but down $154.9 million from a year earlier as share repurchases outweighed retained earnings growth.
The company’s banking subsidiary remained above regulatory thresholds for classification as well capitalized, with a common equity Tier 1 capital ratio of 14.27% at quarter-end.
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