Bancorp Faces Nasdaq Non-Compliance Amid Legal Challenges

2025-04-01 companies

New York, Tuesday, 1 April 2025.
Bancorp (TBBK) failed to meet a critical deadline for restating financials, leading to a Nasdaq non-compliance notice. This development adds pressure amidst an ongoing investor lawsuit.

Critical Financial Statement Issues

On March 4, 2025, The Bancorp, Inc. (NASDAQ: TBBK) made the significant disclosure that financial statements spanning fiscal years 2022 through 2024 ‘should no longer be relied upon’ [1]. The company had committed to addressing these issues expeditiously, particularly concerning its accounting for consumer fintech loans and allowance for credit losses [1]. However, as of March 31, 2025, Bancorp failed to file its annual report within the 15-day extension period granted under Rule 12b-25, resulting in a formal non-compliance notice from Nasdaq [2].

Market Impact and Stock Performance

The financial markets have responded sharply to these developments. Following the March 4 announcement about unreliable financial statements, Bancorp’s stock dropped from $53.59 to $51.25 per share, representing a -4.366% decline [3]. The company’s stock closed at $52.84 on March 31, 2025 [4], reflecting ongoing investor uncertainty about the company’s financial position and regulatory compliance status.

Legal Challenges Mount

Adding to the company’s challenges, a securities class action lawsuit, Linden v. The Bancorp, Inc., has been filed in the U.S. District Court for the District of Delaware [5]. The lawsuit alleges that Bancorp underrepresented risks in its real estate bridge loan (REBL) portfolio and maintained insufficient credit loss methodology [1]. A damaging report by Culper Research on March 21, 2024, claimed that Bancorp’s REBL portfolio included properties that were ‘quite literally crumbling,’ with high vacancies and multiple condemnations [3].

Regulatory Timeline and Next Steps

Investors and stakeholders have until May 16, 2025, to file for lead plaintiff status in the class action lawsuit [6]. Meanwhile, Bancorp must address the Nasdaq non-compliance notice and work to restore confidence in its financial reporting. The situation represents a critical juncture for the company, as it faces scrutiny from both regulatory authorities and the investment community [1][2]. Multiple law firms, including Pomerantz LLP and Rosen Law Firm, have launched investigations into potential securities violations [7].

Sources

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