Bancorp Acknowledges Internal Control Flaws Amid Fintech Loan Provision Increase

2025-04-29 companies

United States, Monday, 28 April 2025.
Bancorp Inc. revises its fintech loan credit loss provisions to $30.7 million from $19.6 million, highlighting control weaknesses. Shareholders are concerned about the impact on financial reliability.

Increased Loan Loss Provisions Signal Trouble

The Bancorp, Inc. (NASDAQ: TBBK) has revised its fintech loan credit loss provisions to $30.7 million from a previously reported $19.6 million as it recognizes critical flaws in its internal control systems [1][2]. This increase in credit loss provisions underscores the financial uncertainty facing Bancorp and has become a point of concern for shareholders and financial analysts evaluating the company’s stability [1].

Background of the Internal Control Weakness

On March 4, 2025, Bancorp disclosed that its original annual report for the previous fiscal year contained inaccuracies and should not be relied upon. The company’s auditors neither provided final approval for the audit opinions nor consented to their inclusion, highlighting significant internal control weaknesses [1][3].

Legal Repercussions and Shareholder Impact

A federal securities class action has been filed against Bancorp, alleging it failed to accurately report the risks associated with its real estate bridge loan (REBL) portfolio and maintained insufficient credit reserves [2][4]. Investors who suffered substantial losses between January 25, 2024, and March 4, 2025, have until May 16, 2025, to join the lawsuit as lead plaintiffs [3][5].

Implications for Bancorp’s Financial Outlook

The revelations and the subsequent class actions have negatively impacted Bancorp’s share price, which fell by 4.38% following the March 4 announcement [3][6]. The company is currently undertaking measures to rectify its internal controls and financial reporting inaccuracies, but the outcome of these actions remains uncertain [7].

Sources

fintech credit losses