Bancorp, Inc.
For the period ended Sep 30, 2025. Filed Nov 10, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 10, 2025
TBBK$48.25+1.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-08.
0001562762-25-000202
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-10.
0001295401-25-000004
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 257 previous paragraphs and 286 current paragraphs.
111 unchanged; 97 reworded; 61 added; 40 removed; 9 previous and 17 current paragraphs rearranged.
Tables are not compared: 38 previous and 34 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (61)
Current report
MD&A is organized in the following sections:
Current report
Executive Summary
Current report
Liquidity and Capital Resources
Current report
Overview
Current report
Executive Summary
Current report
On August 18, 2025, we completed an offering of $200.0 million aggregate principal amount of 7.375% Senior Notes due 2030. The net proceeds from the sale of the notes were utilized to repay all $100.0 million principal amount of the 4.75% note due August 2025, and the remaining proceeds may be utilized to fund our share repurchase program and for general corporate purposes.
Current report
We repurchased 2,034,053 shares of our common stock at an average cost of $73.74 per share during the quarter ended September 30, 2025, and our share repurchases for the nine months of 2025 were 3,472,396 shares at an average price of $64.80. As a result of share repurchases, outstanding shares, net of treasury shares, at September 30, 2025 amounted to 44.5 million, compared to 47.3 million shares at December 31, 2024, or a reduction of 6%.
Current report
We remain focused on growing our fintech revenues through new partnerships, products and services. Consumer fintech loans of $785.0 million as of September 30, 2025 increased 15% compared to a $680.5 million balance at June 30, 2025 and increased 180% compared to the September 30, 2024 balance of $280.1 million. Certain loan fees on consumer fintech loans are recorded as non-interest income, and totaled $4.5 million for the quarter ended September 30, 2025 compared to $1.6 million for the quarter ended September 30, 2024. In addition, as part of our strategies we will reallocate or reduce resources where appropriate. As part of those efforts, in the fourth quarter of 2025 we plan to restructure our institutional banking business to de-emphasize growth and reallocate space on our balance sheet. We expect this action will result in a $1.3 million restructuring charge in the fourth quarter of 2025 and $8.0 million in run-rate expense reductions in 2026.
Current report
Financial Highlights
Current report
Financial highlights include:
Current report
Non-interest income—fintech fees increased to $35.1 million in the third quarter of 2025, up 19.3% from $29.4 million in the third quarter of 2024 and up 24.4% for the nine months ended September 30, 2025 compared to the comparable prior year, which reflected continued organic volume growth with existing partners and products and the impact of new products launched within the past year.
Current report
Results of Operations
Current report
Comparison of third quarter of 2025 to third quarter of 2024
Current report
Our average investment securities of $1.43 billion for the third quarter of 2025 decreased $151.6 million from $1.58 billion for the third quarter of 2024. Related tax equivalent interest income decreased $2.3 million, reflecting lower securities balances.
Current report
Our provision for credit losses was $45.1 million for the third quarter of 2025 compared to a provision of $3.6 million for the third quarter of 2024, an increase of $41.5 million. The increase in provision is primarily attributable to a provision for consumer fintech loans of $39.8 million in the third quarter of 2025, compared to no related provision in the same quarter of 2024. We recognized a related $39.8 million non-interest income amount in the third quarter of 2025 related to a credit enhancement provided contractually by a third party. Accordingly, there have been no related net losses. See further discussion of this program in “Financial Condition—Portfolio Performance” in MD&A.
Current report
In addition, the provision for credit losses on non-consumer fintech loans was $5.8 million in the third quarter of 2025, an increase of $2.3 million compared to the third quarter of 2024, primarily driven by $3.1 million higher provision for the direct lease financing portfolio. The higher provision for the lease portfolio reflects the impact of elevated charge-offs in the third quarter of 2025.
Current report
For more information about our provision, allowance and credit loss experience, see “Financial Condition—Portfolio Performance” below and “Note 6. Loans” to the unaudited consolidated financial statements herein.
Current report
Non-interest income was $80.4 million in the third quarter of 2025 compared to $32.1 million in the third quarter of 2024. The $48.3 million, or 150.5%, increase between those respective periods is primarily driven by$39.8 million of consumer fintech loan credit enhancement income. Consumer fintech loan credit enhancement income correlates to a like amount for provision for credit losses on consumer fintech loans. See further discussion above under “Provision for Credit Losses on Loans.”
Current report
Consumer credit fintech fees increased $2.9 million to $4.5 million for the third quarter of 2025, compared to $1.6 million in the third quarter of 2024, reflecting increased loan volume.
Current report
Other non-interest income increased $2.1 million for the third quarter of 2025, compared to the third quarter of 2024, which reflected $2.3 million from the forfeiture of an earnest money deposit for a terminated OREO sale agreement.
Current report
Audit expense increased $214,000, reflecting higher expense for regulatory filings.
Current report
Other non-interest expense decreased $1.3 million, reflecting a one-time loss in the third quarter of 2024 from a transaction processing delay.
Current report
Our provision for credit losses was $136.3 million for the first nine months of 2025 compared to a provision of $7.0 million for the first nine months of 2024, an increase of $129.3 million. The increase is primarily attributable to a provision for consumer fintech loans of $128.9 million in the nine months of 2025, compared to no related provision in the same period of 2024. We recognized a related $128.9 million non-interest income amount in the nine months of 2025 related to a credit enhancement provided contractually by a third party. Accordingly, there have been no related net losses. See further discussion of this program in “Financial Condition—Portfolio Performance” in MD&A.
Current report
Audit expense increased $735,000, reflecting higher expense for regulatory filings.
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Liquidityand Capital Resources
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Financial Condition
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Total investment securities decreased to $1.38 billion at September 30, 2025, a decrease of $118.6 million, or 7.9%, from December 31, 2024.
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Total Loan Portfolio
Current report
The majority of our loan portfolio is loans recorded at amortized cost, which are recognized net of an allowance for credit loss. Loans, net of deferred loan fees and costs increased to $6.67 billion at September 30, 2025 from $6.11 billion at December 31, 2024. This $555.9 million increase primarily reflected growth in our consumer fintech of $330.7 million, of which $214.8 million is secured credit card loans and $86.7 million is unsecured short-term extensions of credit that are covered by a third-party credit enhancement agreement. The $53.2 million increase in other loans includes$56.9 million of warehouse financing related to real estate bridge loan sales to third-party purchasers.
Current report
The sections that follow contain detailed discussion of portfolio concentrations, estimated maturities, portfolio performance and allowance for credit loss.
Current report
Small Business Lending
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(5)Comprised of $4.4 million of loans sold that do not qualify for true sale accounting.
Current report
The following table summarizes our SBL portfolio, excluding guaranteed and other, by state as of September 30, 2025 (dollars in thousands):
Current report
Real Estate Lending
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Institutional Banking
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Commercial Fleet Leasing
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Portfolio Estimated Maturities
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Portfolio Performance
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The following table summarizes our non-performing assets, with discussion of significant changes between periods to follow (dollars in thousands):
Current report
Non-accrual loans increased $41.5 million, driven primarily by a $26.9 million REBL loan (discussed below), $42.4 million of other additions, partially offset by $17.2 million of payments, $4.1 million transferred to OREO, $5.1 million of charge-offs, and $1.4 million transferred to repossessed vehicle inventory.
Showing the first 40 of 61 passages. Open the source sections for the rest.
Removed paragraphs (40)
Previous report
Recent Developments
Previous report
The majority of the Company’s OREO property is comprised of an apartment complex. The underlying balance for this property is $42.9 million as of June 30, 2025. As previously disclosed, the property was under an agreement of sale. On June 24, 2025, the Company terminated the agreement of sale for the property and demanded the escrow agent release to Company all earnest money deposits received to date, totaling $3.0 million. On June 26, 2025, without providing any legal or contractual basis to do so, the purchaser objected to the release of the earnest money deposits. The Company believes it is entitled to the earnest money deposits and is pursuing release of the funds.
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Performance Summary
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Results of KPIs
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In the second quarter of 2025, return on assets and return on equity amounted to 2.64% and 28.40% (annualized), respectively, compared to 2.77% and 27.10% (annualized) in the second quarter of 2024. For the six-month period ended June 30, 2025, return on assets, and return on equity amounted to 2.56% and 28.60% (annualized), respectively, compared to 2.86% and 27.95% (annualized) for the six-month period ended June 30, 2024.
Previous report
Average loans and leases increased to $6.57 billion in the second quarter of 2025 compared to $5.75 billion in the second quarter of 2024. The provision for credit losses on non-consumer fintech loans was $1.5 million in the second quarter of 2025 compared to a provision for credit losseson non-consumer fintech loans of $1.5 million in the second quarter of 2024.
Previous report
Comparison of second quarter of 2025 to second quarter of 2024
Previous report
Our provision for credit losses was $44.4 million for the second quarter of 2025 compared to a provision of $1.3 million for the second quarter of 2024. The provision for credit losses for the second quarter of 2025 was allocated as follows: $1.5 million for non-consumer fintech loans, $43.2 million for consumer fintech loans and ($364,000) for unfunded commitments. The provision for credit losses for the second quarter of 2024 was allocated as follows: $1.5 million for non-consumer fintech loans and ($225,000) for unfunded commitments. The $43.2 million provision for consumer fintech loans correlates to $43.2 million of credit enhancement income included in non-interest income. The ACL was $59.4 million, or 0.91% of total loans, at June 30, 2025, compared to $44.9 million, or 0.73% of total loans, at December 31, 2024. We believe that our ACL is appropriate and supportable. For more information about our provision and ACL and our loss experience, see “Allowance for Credit Losses,” “Net Charge-offs,” and “Non-accrual Loans, Loans 90 Days Delinquent and Still Accruing, OREO and Modified Loans,” below and “Note 6. Loans” to the unaudited consolidated financial statements herein.
Previous report
Leasing related income increased $702,000, or 49.1%, to $2.1 million for the second quarter of 2025 from $1.4 million for the second quarter of 2024.
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Other non-interest income increased $1.5 million, or 167.0%, to $2.4 million for the second quarter of 2025 from $895,000 in the second quarter of 2024 which reflected increased payoff fees on REBL loans.
Previous report
Total non-interest expense was $57.2 million for the second quarter of 2025, an increase of $5.8 million, or 11.2%, compared to $51.4 million for the second quarter of 2024. Of the $5.8 million increase, $3.3 million resulted from an increase in salaries and benefits expense.
Previous report
Audit expense increased $226,000, or 70.8%, to $545,000 in the second quarter of 2025 from $319,000 in the second quarter of 2024. The increase reflected higher expense for regulatory filings.
Previous report
Other non-interest expense increased $586,000, or 12.2%, to $5.4 million in the second quarter of 2025 from $4.8 million in the second quarter of 2024 reflecting an increase of $290,000 in marketing expense.
Previous report
Our provision for credit losses was $91.2 million for the first six months of 2025 compared to a provision of $3.4 million for the first six months of 2024. The provision for credit losses for the first six months of 2025 was allocated as follows: $2.4 million for non-consumer fintech loans, $89.1 million for consumer fintech loans and ($253,000) for unfunded commitments. The provision for credit losses for the first six months of 2024 was allocated as follows: $3.8 million for non-consumer fintech loans and ($419,000) for unfunded commitments. The $89.1 million provision for consumer fintech loans correlates to $89.1 million of credit enhancement income included in non-interest income. The ACL was $59.4 million, or 0.91% of total loans, at June 30, 2025, compared to $44.9 million, or 0.73% of total loans, at December 31, 2024. We believe that our ACL is appropriate and supportable. For more information about our provision and ACL and our loss experience, see “Allowance for Credit Losses,” “Net Charge-offs,” and “Non-accrual Loans, Loans 90 Days Delinquent and Still Accruing, OREO and Modified Loans,” below and “Note 6. Loans” to the unaudited consolidated financial statements herein.
Previous report
Data processing expense decreased $412,000, or 14.5%, to $2.4 million in the first six months of 2025 from $2.8 million in the first six months of 2024 reflecting the impact of newly effective contract terms.
Previous report
Audit expense increased $521,000, or 76.8%, to $1.2 million in the first six months of 2025 from $678,000 in the first six months of 2024. The increase reflected higher expense for regulatory filings.
Previous report
Legal expense increased $2.4 million, or 162.7%, to $3.8 million in the first six months of 2025 from $1.5 million in the first six months of 2024. The increase reflected payments related matters and higher expense for regulatory filings.
Previous report
FDIC insurance expense increased $541,000, or 31.6%, to $2.3 million for the first six months of 2025 from $1.7 million in the first six months of 2024, reflecting an increase in the assessment rate in the second quarter of 2025.
Previous report
Other non-interest expense increased $1.9 million, or 22.2%, to $10.4 million in the first six months of 2025 from $8.5 million in the first six months of 2024 reflecting increases of $1.0 million in OREO expenses, $495,000 in marketing expense, and $133,000 in other operating taxes expense. The $1.0 million increase in OREO expense reflected operating and real estate tax expenses on an apartment property and Florida mall. The OREO balances of those properties as of June 30, 2025 were $42.9 million for the apartment property (“See Recent Developments”) and $15.0 million for the Florida mall.
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Liquidity
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Prior to 2020, the Company sponsored the structuring of commercial mortgage loan securitizations, and in 2020, the Company decided not to pursue additional securitizations. The loans previously sold to the commercial mortgage-backed securitizations were transitional commercial mortgage loans made to improve and rehabilitate existing properties which already had cash flow. Servicing rights were not retained. Each of the securitizations is considered a variable interest entity of which the Company is not the primary beneficiary. Further, true sale accounting has been applicable to each of the securitizations, as supported by a review performed by an independent third-party consultant. In each of the securitizations, the Company obtained a tranche of certificates which are accounted for as available-for-sale debt securities. The securities were recorded at fair value at acquisition, which was determined by an independent third-party based on the discounted cash flow method using unobservable (level 3) inputs. As of June 30, 2025, all the Company’s securities related to its securitizations had been repaid.
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Commercial Loans, at Fair Value
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Loan Portfolio
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Total loans increased to $6.54 billion at June 30, 2025 from $6.11 billion at December 31, 2024.
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Thefollowing table summarizes our loan portfolio, excluding loans held at fair value, by loan category for the periods indicated (dollars in thousands):
Previous report
(5)Comprised of $4.5 million of loans sold that do not qualify for true sale accounting.
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The following table summarizes our SBL portfolio, excluding the government guaranteed portion of SBA 7(a) Program loans and PPP loans, by state as of June 30, 2025 (dollars in thousands):
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(1)The table above does not include loans to the extent that they are U.S. government guaranteed.
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Non-accrual Loans, Loans 90 Days Delinquent and Still Accruing, OREO and Modified Loans
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(1)In the second quarter of 2025, a $26.9 million loan balance was transferred to non-accrual status. The loan is secured by an apartment building with an “as is” LTV of 75% and an “as stabilized” LTV of 65%, based on a December 2024 appraisal. On July 31, 2025 a purchase and sale agreement was executed with a new borrower who is expected to have greater financial capacity to complete the related project. The sale is expected to close in the third quarter of 2025 and a new loan is anticipated.
Previous report
For the three month and year-to-date periods ended June 30, 2025 and June 30, 2024, loans modified and related information are as follows (dollars in thousands):
Previous report
(1)In the second quarter of 2025, a $26.9 million loan was transferred to non-accrual status. The related $26.9 million loan was modified twice in 2024. The loan is secured by an apartment building with an “as is” LTV of 75% and an “as stabilized” LTV of 65%, based on a December 2024 appraisal. On July 31, 2025, a purchase and sale agreement for the property was executed with a new counterparty possessing greater financial capacity and experience. The sale is expected to close in the third quarter of 2025, and a new loan is anticipated in connection with the transaction.
Previous report
The following table shows an analysis of loans that were modified during the three month and year-to-date periods ended June 30, 2025, and June 30, 2024 presented by loan classification (dollars in thousands):
Previous report
There were $1.3 million and $2.6 million of total loans classified as modified for the three months ended June 30, 2025 and June 30, 2024, respectively, with no specific reserves.
Previous report
For the six months ended June 30, 2025, there were $9.1 million of total loans classified as modified with specific reserves of $168,000, while there were $67.0 million of total loans classified as modified for the six months ended June 30, 2024 with specific reserves of $7,000.
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The following table describes the financial effect of the modifications made for the three month and year-to-date periods ended June 30, 2025 and June 30, 2024 (dollars in thousands):
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There were no loans that received a term extension modification that had a payment default during the period and were modified in the twelve months before default.
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We had no commitments to extend additional credit to loans classified as modified as of June 30, 2025 or December 31, 2024.
Previous report
We had $61.6 million of non-accrual loans at June 30, 2025, compared to $27.9 million of non-accrual loans at December 31, 2024. The $33.7 million increase in non-accrual loans was primarily due to $55.1 million of additions partially offset by $15.3 million of payments, $3.9 million transferred to OREO, $1.9 million of charge-offs, and $396,000 transferred to repossessed vehicle inventory. Loans past due 90 days or more still accruing interest amounted to $883,000 at June 30, 2025 and $5.8 million at December 31, 2024. The $4.9 million decrease reflected $1.1 million of additions partially offset by $5.9 million of loan payments and $107,000 transferred to non-accrual loans.
Reworded paragraphs (97)
Previous wording
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) provides information about the Company’s results of operations, financial condition, liquidity and asset quality. This information is intended to facilitate your understanding and assessment of significant changes and trends related to our financial condition and results of operations. This MD&A should be read in conjunction with our financial information in our Form 10-K, as amended, for the fiscal year ended 2024 (the “2024 Form 10-K, as amended”) and the unaudited interim consolidated financial statements and notes thereto contained in this Quarterly Report on Form 10-Q.
Current wording
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) provides information about our results of operations, financial condition, liquidity and asset quality. This information is intended to facilitate your understanding and assessment of significant changes and trends related to our financial condition and results of operations. This MD&A should be read in conjunction with our financial information in our Form 10-K, as amended, for the fiscal year ended 2024 (the “2024 Form 10-K, as amended”) and the unaudited interim consolidated financial statements and notes thereto contained in this Quarterly Report on Form 10-Q.
Previous wording
When used in this Quarterly Report on Form 10-Q, statements regarding The Bancorp’s business, that are not historical facts, are “forward-looking statements.” These statements may be identified by the use of forward-looking terminology, including, but not limited to the words “intend,” “may,” “believe,” “will,” “expect,” “look,” “anticipate,” “plan,” “estimate,” “continue,” or similar words. Forward-looking statements include but are not limited to, statements regarding our annual fiscal 2025 results, profitability, and increased volumes, and relate to our current assumptions, projections, and expectations about our business and future events, including current expectations about important economic, political, and technological factors, among other factors, and are subject to risks and uncertainties, which could cause the actual results, events, or achievements to differ materially from those set forth in or implied by the forward-looking statements and related assumptions. Factors that could cause results to differ from those expressed in the forward-looking statements also include, but are not limited to, the risks and uncertainties referenced or described in The Bancorp’s filings with the Securities and Exchange Commission, including the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s Annual Report on Form 10-K, as amended, for the fiscal year ended December 31, 2024 and other documents that the Company files from time to time with the Securities and Exchange Commission as well as the following:
Current wording
When used in this Quarterly Report on Form 10-Q, statements regarding The Bancorp’s business, that are not historical facts, are “forward-looking statements.” These statements may be identified by the use of forward-looking terminology, including, but not limited to the words “intend,” “may,” “believe,” “will,” “expect,” “look,” “anticipate,” “plan,” “estimate,” “continue,” or similar words. Forward-looking statements include but are not limited to, statements regarding our annual fiscal 2025 results, profitability, and increased volumes, and relate to our current assumptions, projections, and expectations about our business and future events, including current expectations about important economic, political, and technological factors, among other factors, and are subject to risks and uncertainties, which could cause the actual results, events, or achievements to differ materially from those set forth in or implied by the forward-looking statements and related assumptions. Factors that could cause results to differ from those expressed in the forward-looking statements also include, but are not limited to, the risks and uncertainties referenced or described in The Bancorp’s filings with the Securities and Exchange Commission, including the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of our Annual Report on Form 10-K, as amended, for the fiscal year ended December 31, 2024 and other documents that we file from time to time with the Securities and Exchange Commission as well as the following:
Previous wording
We caution readers not to place undue reliance on forward-looking statements, which speak only as of the date hereof and are based on information presently available to the management of the Company. We undertake no obligation to publicly revise or update these forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q except as required by applicable law.
Current wording
We caution readers not to place undue reliance on forward-looking statements, which speak only as of the date hereof and are based on information presently available to our management. We undertake no obligation to publicly revise or update these forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q except as required by applicable law.
Previous wording
The Bancorp’s balance sheet has a risk profile enhanced by the special nature of the collateral supporting its loan niches, and related underwriting. Those loan niches have contributed to increased earnings levels, even during periods in which markets have experienced various economic stresses. Real estate bridge lending is comprised of workforce housing which we consider to be working class apartments at more affordable rental rates, in selected states. We believe that underwriting requirements provide significant protection against loss, as supported by LTV ratios based on third-party appraisals. SBLOC and IBLOC loans are collateralized by marketable securities and the cash value of life insurance, respectively, while SBA loans are either SBA 7(a) loans that come with significant government-related guarantees, or SBA 504 loans that are made at 50-60% LTVs. Additional detail with respect to these loan portfolios is included in the related tables in “Financial Condition.” Also enhancing the Company’s risk profile is the substantial earnings impact of its payment businesses.
Current wording
The Bancorp’s balance sheet has a risk profile enhanced by the special nature of the collateral supporting its loan niches, and related underwriting. Those loan niches have contributed to increased earnings levels, even during periods in which markets have experienced various economic stresses. Real estate bridge lending is comprised of workforce housing which we consider to be working class apartments at more affordable rental rates, in selected states. We believe that underwriting requirements provide significant protection against loss, as supported by LTV ratios based on third-party appraisals. SBLOC and IBLOC loans are collateralized by marketable securities and the cash value of life insurance, respectively, while SBA loans are either SBA 7(a) loans that come with significant government-related guarantees, or SBA 504 loans that are made at 50-60% LTVs. Additional detail with respect to these loan portfolios is included in the related tables in “Financial Condition.” Also enhancing our risk profile is the substantial earnings impact of its payment businesses.
Previous wording
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. During the three and six months ended June 30, 2025, the Company repurchased 753,898 and 1,438,343 shares of its common stock in the open market under the 2025 Repurchase Program at an average price of $49.75 per share and $52.15 per share, respectively. On July 7, 2025, the Board of the Company authorized the increase of the capacity of the Company’s existing share repurchase program for the third and fourth quarters of 2025 to $300 million and $200 million for 2026 (the “Repurchase Plan”). This increase cumulatively represents up to $500 million in share repurchases through year-end 2026. The Company expects to fund the Repurchase Plan with cash at hand and through the refinancing of $100 million of maturing senior unsecured debt with $200 million of new senior unsecured debt.
Current wording
On October 23, 2024, the Board approved a common stock repurchase program for the 2025 fiscal year which authorizes the Company to repurchase $37.5 million in value of our common stock per fiscal quarter in 2025, for a maximum amount of $150.0 million. On July 7, 2025, the Board authorized the increase of the capacity of the existing share repurchase program for the third and fourth quarters of 2025 to $300.0 million and $200.0 million for 2026. This increase cumulatively represents up to $500.0 million in share repurchases through year-end 2026.
Previous wording
Our net income increased to$59.8 million for the second quarter of 2025, from $53.7 million for the second quarter of 2024. Our cost of funds decreased to 2.23% in the second quarter of 2025 from 2.50% in the second quarter of 2024. See “Asset and Liability Management” in this MD&A for further discussion of how our funding sources and loans adjust to Federal Reserve rate changes.
Current wording
Our net income increased to$54.9 million for the third quarter of 2025, from $51.5 million for the third quarter of 2024. Our cost of funds decreased to 2.15% in the third quarter of 2025 from 2.54% in the third quarter of 2024. See “Asset and Liability Management” in this MD&A for further discussion of how our funding sources and loans adjust to Federal Reserve rate changes.
Previous wording
Fintech fees are the largest drivers of non-interest income. Such fees for the second quarter of 2025 increased $7.8 million over the comparable 2024 period.
Current wording
Fintech fees are the largest drivers of non-interest income. Such fees for the third quarter of 2025 increased $5.7 million over the comparable 2024 period.
Previous wording
We use a number of key performance indicators (“KPIs”) to measure our overall financial performance and believe they are useful to investors because they provide additional information about our underlying operational performance and trends. We describe how we calculate and use a number of these KPIs and analyze their results below.
Current wording
We use a number of key performance indicators (“KPIs”) to measure our overall financial performance and believe they are useful to investors because they provide additional information about our underlying operational performance and trends. Those indicators include:
Previous wording
At June 30, 2025, the ratio of equity to assets was 9.73%, compared to 9.54% at June 30, 2024, reflecting an increase in equity capital from retained earnings and an increase in unrealized income on securities partially offset by share repurchases.
Current wording
At September 30, 2025, the ratio of equity to assets was 9.05%, compared to 10.07% at September 30, 2024, primarily driven by reductions in equity from share repurchases partially offset by an increase in equity capital from retained earnings.
Previous wording
Net interest margin was 4.44% in the second quarter of 2025, versus 4.97% in the second quarter of 2024 reflecting the impact of Federal Reserve rate decreases beginningin September 2024. Additionally, fees on the majority of consumer fintech loan balances are recorded as non-interest income, which impacts both net interest income and net interest margin.
Current wording
Net interest margin was 4.45% in the third quarter of 2025, versus 4.78% in the third quarter of 2024 reflecting the impact of Federal Reserve rate decreases beginningin September 2024.
Previous wording
Net income for the second quarter of 2025 was $59.8 million, or $1.27 per diluted share, compared to $53.7 million, or $1.05 per diluted share, for the second quarter of 2024. Income before income taxes was $79.6 million in the second quarter of 2025 compared to $71.8 million in the second quarter of 2024.
Current wording
Net income for the third quarter of 2025 was $54.9 million, or $1.18 per diluted share, compared to $51.5 million, or $1.04 per diluted share, for the third quarter of 2024. Income before income taxes was $73.2 million in the third quarter of 2025 compared to $69.0 million in the third quarter of 2024.
Previous wording
Our net interest income for the second quarter of 2025 increased $3.7 million, or 3.9%, to $97.5 million from $93.8 million in the second quarter of 2024. Our interest income for the second quarter of 2025 increased to $143.1 million, an increase of $5.8 million, or 4.3%, from $137.3 million for the second quarter of 2024. The increase reflected higher securities interest reflecting higher securities balances and $3.0 million of interest footnoted in the following “Average Daily Balances Table”. While our average loans and leases increased to $6.57 billion for the second quarter of 2025 from $5.75 billion for the second quarter of 2024, an increase of $814.4 million, or 14.2%, lower rates resulted in decreased interest income. Related interest income decreased $2.7 million on a tax equivalent basis, reflecting the impact of the aforementioned Federal Reserve rate decreases. Additionally, fees on the majority of consumer fintech loan balances are recorded as non-interest income, which impacts both net interest income and net interest margin. The fees are included in non-interest income as most of the Bank’s current fintech loans do not charge interest to the consumer. The Bank generally earns fees on such loans based on transaction activity and volume; those fees are recorded as non-interest income. Of the total $2.7 million decrease in loan interest income on a tax equivalent basis, the largest decreases were $3.5 million for all real estate bridge loans and $2.1 million for SBLOC and IBLOC, while small business lending, investment advisor financing, and fintech increased $1.6 million, $861,000, and $486,000, respectively.
Current wording
Our net interest income for the third quarter of 2025 increased $465,000, or 0.5%, to $94.2 million from $93.7 million in the third quarter of 2024. Our interest income for the third quarter of 2025 decreased to $136.4 million, a decrease of $3.3 million, or 2.4%, from $139.7 million for the third quarter of 2024. The decrease reflected lower investment securities income, driven by lower securities balances. While our average loans and leases increased to $6.69 billion for the third quarter of 2025 from $6.02 billion for the third quarter of 2024, an increase of $666.2 million, or 11.1%, lower rates resulted in decreased interest income. Related interest income decreased $1.5 million on a tax equivalent basis, reflecting the impact of the aforementioned Federal Reserve rate decreases. Additionally, fees on the majority of consumer fintech loan balances are recorded as non-interest income, which impacts both net interest income and net interest margin. The fees are included in non-interest income as most of the Bank’s current fintech loans do not charge interest to the consumer. The Bank generally earns fees on such loans based on transaction activity and volume; those fees are recorded as non-interest income. Of the total $1.5 million decrease in loan interest income on a tax equivalent basis, the largest decreases were $3.7 million for all real estate bridge loans, $2.0 million for IBLOC, and $545,000 for leasing partially offset by increases in small business lending, fintech, investment advisor financing, and SBLOC of $2.5 million, $1.0 million, $959,000, and $831,000 respectively.
Previous wording
Our net interest margin (calculated by dividing net interest income by average interest-earning assets) for the second quarter of 2025 was 4.44% compared to 4.97% for the second quarter of 2024, a decrease of 53 basis points. While the yield on interest-earning assets decreased 76 basis points, the cost of deposits and interest-bearing liabilities decreased 27 basis points, or a net change of 49 basis points. Average interest-earning deposits at the Federal Reserve Bank increased $414.7 million, or 121.3%, to $756.6 million in the second quarter of 2025 from $341.9 million in the second quarter of 2024. In the second quarter of 2025, the average yield on our loans decreased to 6.84% from 8.00% for the second quarter of 2024, a decrease of 116 basis points. The yield on taxable investment securities in the second quarter of 2025 was 6.12% compared to 4.82% for the second quarter of 2024, also reflecting the aforementioned $3.0 million of prior period interest on CRE-2.
Current wording
Our net interest margin (calculated by dividing net interest income by average interest-earning assets) for the third quarter of 2025 was 4.45% compared to 4.78% for the third quarter of 2024, a decrease of 33 basis points. While the yield on interest-earning assets decreased 68 basis points, the cost of deposits and interest-bearing liabilities decreased 39 basis points, or a net change of 29 basis points. Average interest-earning deposits at the Federal Reserve Bank increased $107.6 million, or 43.5%, to $355.0 million in the third quarter of 2025 from $247.3 million in the third quarter of 2024. In the third quarter of 2025, the average yield on our loans decreased to 6.87% from 7.73% for the third quarter of 2024, a decrease of 86 basis points. The yield on taxable investment securities in the third quarter of 2025 was 4.90% compared to 5.02% for the third quarter of 2024.
Previous wording
For the second quarter of 2025, average interest-earning assets increased to $8.80 billion, an increase of $1.24 billion, or 16.5%, from $7.55 billion in the second quarter of 2024. The increase reflected increased average interest-earning deposits at the Federal Reserve Bank of $414.7 million, increased average balances of loans and leases of $814.4 million, or 14.2%, and increased average investment securities of $13.7 million, or 0.9%. For those respective periods, average demand and interest checking deposits increased $1.33 billion, or 20.0%. The interest expense shown for demand and interest checking is primarily comprised of interest paid to our affinity groups.
Current wording
For the third quarter of 2025, average interest-earning assets increased to $8.47 billion, an increase of $622.3 million, or 7.9%, from $7.85 billion in the third quarter of 2024. The increase reflected increased average interest-earning deposits at the Federal Reserve Bank of $107.6 million, increased average balances of loans and leases of $666.2 million, or 11.1%, offset by decreased average investment securities of $151.6 million, or 9.6%. For those respective periods, average demand and interest checking deposits increased $618.7 million, or 8.9%. The interest expense shown for demand and interest checking is primarily comprised of interest paid to our affinity groups.
Previous wording
Non-interest income was $83.7 million in the second quarter of 2025 compared to $30.7 million in the second quarter of 2024. The $53.0 million, or 172.6%, increase between those respective periods reflected$43.2 million of consumer fintech loan credit enhancement income which correlated to a like amount for provision for credit losses on consumer fintech loans, and an increase in prepaid, debit card and related fees. The increase also reflected increased ACH, card and other payment processing fees. Prepaid, debit card and related fees increased $1.4 million, or 5.5%, to $26.1 million for the second quarter of 2025, compared to $24.8 million in the second quarter of 2024. The increase reflected higher transaction volume from new clients and organic growth from existing clients. ACH, card and other payment processing fees increased $2.6 million, or 85.4%, to $5.6 million for the second quarter of 2025, compared to $3.0 million in the second quarter of 2024, reflecting an increase in rapid funds transfer volume.
Current wording
Prepaid, debit card and related fees increased $1.6 million, or 6.7%, to $25.5 million for the third quarter of 2025, compared to $23.9 million in the third quarter of 2024. The increase reflected higher transaction volume from new clients and organic growth from existing clients. ACH, card and other payment processing fees increased $1.2 million, or 30.4%, to $5.1 million for the third quarter of 2025, compared to $3.9 million in the third quarter of 2024, reflecting an increase in rapid funds transfer volume.
Previous wording
Changes in non-interest expense were as follows:
Current wording
Total non-interest expense was $56.4 million for the third quarter of 2025, an increase of $3.1 million, or 5.9%, compared to $53.3 million for the third quarter of 2024. The increase reflected a $3.5 million increase in salaries and benefits expense. Primary drivers of changes in non-interest expense were as follows:
Previous wording
Salaries and employee benefits expense increased to $37.1 million for the second quarter of 2025, an increase of $3.3 million, or 9.7%, from $33.9 million for the second quarter of 2024. The 9.7% increase in salaries and employee benefits expense reflected higher stock and other incentive compensation, and employee insurance expense. The increase also reflected higher IT and cybersecurity, and higher financial crimes and risk management expense.
Current wording
Salaries and employee benefits expense increased $3.5 million, reflecting higher stock and other incentive compensation, and employee insurance expense. The increase also reflected higher IT and cybersecurity, and higher financial crimes and risk management expense.
Previous wording
Data processing expense decreased $196,000, or 13.8%, to $1.2 million in the second quarter of 2025 from $1.4 million in the second quarter of 2024 reflecting the impact of newly effective contract terms.
Current wording
Data processing expense decreased $149,000, reflecting the impact of newly effective contract terms.
Previous wording
Legal expense increased $1.2 million, or 194.3%, to $1.9 million in the second quarter of 2025 from $633,000 in the second quarter of 2024. The increase reflected payments related matters and higher expense for regulatory filings.
Current wording
Legal expense increased $428,000, reflecting the impact of fintech payments related matters and higher expense for regulatory filings.
Previous wording
Software expense increased $507,000, or 10.9%, to $5.1 million in the second quarter of 2025 from $4.6 million in the second quarter of 2024. The increase reflected higher expenditures for information technology infrastructure including leasing, institutional banking, cybersecurity, and enterprise risk.
Current wording
Software expense increased $479,000, reflecting higher expenditures for information technology infrastructure including leasing, institutional banking, cybersecurity, and enterprise risk.
Previous wording
Income tax expense was $19.8 million for the second quarter of 2025 compared to $18.1 million in the second quarter of 2024. A 24.9% effective tax rate in 2025 and a 25.2% effective tax rate in 2024 primarily reflected a 21% federal tax rate and the impact of various state income taxes.
Current wording
Income tax expense was $18.2 million for the third quarter of 2025 compared to $17.5 million in the third quarter of 2024. A 24.9% effective tax rate in 2025 and a 25.4% effective tax rate in 2024, based on a 21% federal tax rate and the impact of various state income taxes.
Previous wording
Comparison of first six months 2025 to first six months 2024
Current wording
Comparison of first nine months 2025 to first nine months 2024
Previous wording
Net income for the first six months of 2025 was $117.0 million, or $2.46 per diluted share, compared to $110.1 million, or $2.10 per diluted share, for the first six months of 2024. Income before income taxes was $154.9 million in the first six months of 2025 compared to $146.7 million in the first six months of 2024.
Current wording
Net income for the first nine months of 2025 was $171.9 million, or $3.64 per diluted share, compared to $161.6 million, or $3.15 per diluted share, for the first nine months of 2024. Income before income taxes was $228.0 million in the first nine months of 2025 compared to $215.8 million in the first nine months of 2024.
Previous wording
Our net interest income for the first six months of 2025 increased $1.0 million, or 0.5%, to $189.2 million from $188.2 million in the first six months of 2024. Our interest income for the first six months of 2025 increased to $283.0 million, an increase of $9.8 million, or 3.6%, from $273.1 million for the first six months of 2024. The increase in interest income reflected the impact of higher investment securities balances and $3.0 million of interest footnoted in the following “Average Daily Balances Table”. While our average loans and leases increased to $6.48 billion for the first six months of 2025 from $5.74 billion for the first six months of 2024, an increase of $739.9 million, or 12.9%, lower rates resulted in decreased interest income. Related interest income decreased $8.1 million on a tax equivalent basis. Additionally, fees on the majority of consumer fintech loan balances are recorded as non-interest income, which impacts both net interest income and net interest margin. The fees are included in non-interest income as most of the Bank’s current fintech loans do not charge interest to the consumer. The Bank generally earns fees on such loans based on transaction activity and volume; those fees are recorded as non-interest income. Of the total $8.1 million decrease in loan interest income on a tax equivalent basis, the largest decreases were $8.2 million for all real estate bridge loans and $5.9 million for SBLOC and IBLOC, while small business lending, investment advisor financing, and leasing increased $3.7 million, $1.8 million, and $1.2 million, respectively.
Current wording
Our net interest income for the first nine months of 2025 increased $1.5 million, or 0.5%, to $283.4 million from $281.9 million in the first nine months of 2024. Our interest income for the first nine months of 2025 increased to $419.3 million, an increase of $6.6 million, or 1.6%, from $412.8 million for the first nine months of 2024. The increase in interest income reflected the impact of higher investment securities balances and $3.0 million of interest footnoted in the following “Average Daily Balances Table”. While our average loans and leases increased to $6.55 billion for the first nine months of 2025 from $5.83 billion for the first nine months of 2024, an increase of $715.5 million, or 12.3%, lower rates resulted in decreased interest income. Related interest income decreased $9.6 million on a tax equivalent basis. Additionally, fees on the majority of consumer fintech loan balances are recorded as non-interest income, which impacts both net interest income and net interest margin. The fees are included in non-interest income as most of the Bank’s current fintech loans do not charge interest to the consumer. The Bank generally earns fees on such loans based on transaction activity and volume; those fees are recorded as non-interest income. Of the total $9.6 million decrease in loan interest income on a tax equivalent basis, the largest decreases were $11.9 million for all real estate bridge loans and $7.1 million for SBLOC and IBLOC, while small business lending, investment advisor financing, fintech, and leasing increased $6.1 million, $2.7 million, $1.8 million, and $696,000, respectively.
Previous wording
Our average investment securities of $1.48 billion for the first six months of 2025 increased $386.3 million from $1.10 billion for the first six months of 2024. Related tax equivalent interest income increased $13.5 million, reflecting an increase in balances and $3.0 million of prior period interest on CRE-2, which was repaid as a result of the sale of underlying collateral. That security was the only remaining security from the Company's prior securitizations.
Current wording
Our average investment securities of $1.46 billion for the first nine months of 2025 increased $205.6 million from $1.26 billion for the first nine months of 2024. Related tax equivalent interest income increased $11.2 million, reflecting an increase in balances and $3.0 million of prior period interest on CRE-2, which was repaid in the second quarter of 2025 as a result of the sale of underlying collateral. That security was the only remaining security from our prior securitizations.
Previous wording
Our net interest margin (calculated by dividing net interest income by average interest-earning assets) for the first six months of 2025 was 4.25% compared to 5.06% for the first six months of 2024, a decrease of 81 basis points. While the yield on interest-earning assets decreased 98 basis points, the cost of deposits and interest-bearing liabilities decreased 24 basis points, or a net change of 74 basis points. Average interest-earning deposits at the Federal Reserve Bank increased $337.5 million, or 55.5%, to $945.5 million in the first six months of 2025 from $608.0 million in the first six months of 2024. In the first six months of 2025, the average yield on our loans decreased to 6.83% from 7.99% for the first six months of 2024, a decrease of 116 basis points. The yield on taxable investment securities in the first six months of 2025 was 5.49% compared to 4.96% for the first six months of 2024, also reflecting the aforementioned $3.0 million of prior period interest on CRE-2.
Current wording
Our net interest margin (calculated by dividing net interest income by average interest-earning assets) for the first nine months of 2025 was 4.32% compared to 4.96% for the first nine months of 2024, a decrease of 64 basis points. While the yield on interest-earning assets decreased 87 basis points, the cost of deposits and interest-bearing liabilities decreased 29 basis points, or a net change of 58 basis points. Average interest-earning deposits at the Federal Reserve Bank increased $259.6 million, or 53.3%, to $746.5 million in the first nine months of 2025 from $486.9 million in the first nine months of 2024. In the first nine months of 2025, the average yield on our loans decreased to 6.84% from 7.90% for the first nine months of 2024, a decrease of 106 basis points. The yield on taxable investment securities in the first nine months of 2025 was 5.30% compared to 4.98% for the first nine months of 2024, also reflecting the aforementioned $3.0 million of prior period interest on CRE-2.
Previous wording
(3) The second quarter of 2025 included $3.0 million of interest income from a security that was known as “CRE-2” and which was related to the Company’s discontinued commercial real estate securitization business. The CRE-2 interest was repaid in the quarter as a result of the final sale of underlying collateral related to that security. CRE-2 was the last security remaining related to the Company’s discontinued commercial real estate securitization business. The $3.0 million of prior period interest income was excluded from change due to rate.
Current wording
(3) The nine months ended September 30, 2025 includes $3.0 million of interest income from a security that was known as “CRE-2” and which was related to our discontinued commercial real estate securitization business. The CRE-2 interest was repaid in the second quarter as a result of the final sale of underlying collateral related to that security. CRE-2 was the last security remaining related to the discontinued commercial real estate securitization business. The $3.0 million of prior period interest income was excluded from change due to rate.
Previous wording
For the first six months of 2025, average interest-earning assets increased to $8.91 billion, an increase of $1.46 billion, or 19.7%, from $7.44 billion in the first six months of 2024. The increase reflected increased average interest-earning deposits at the Federal Reserve Bank of $337.5 million, increased average balances of loans and leases of $739.9 million, or 12.9%, and increased average investment securities of $386.3 million, or 35.2%. For those respective periods, average demand and interest checking deposits increased $1.53 billion, or 23.3%. The interest expense shown for demand and interest checking is primarily comprised of interest paid to our affinity groups.
Current wording
For the first nine months of 2025, average interest-earning assets increased to $8.76 billion, an increase of $1.18 billion, or 15.6%, from $7.58 billion in the first nine months of 2024. The increase reflected increased average interest-earning deposits at the Federal Reserve Bank of $259.6 million, increased average balances of loans and leases of $715.5 million, or 12.3%, and increased average investment securities of $205.6 million, or 16.3%. For those respective periods, average demand and interest checking deposits increased $1.22 billion, or 18.3%. The interest expense shown for demand and interest checking is primarily comprised of interest paid to our affinity groups.
Previous wording
Non-interest income was $167.4 million in the first six months of 2025 compared to $60.1 million in the first six months of 2024. The $107.3 million, or 178.5%, increase between those respective periods reflected$89.1 million of consumer fintech loan credit enhancement income which correlated to a like amount for provision for credit losses on consumer fintech loans, and an increase in prepaid, debit card and related fees. The increase also reflected increased ACH, card and other payment processing fees. Prepaid, debit card and related fees increased $2.8 million, or 5.7%, to $51.8 million for the first six months of 2025, compared to $49.0 million in the first six months of 2024. The increase reflected higher transaction volume from new clients and organic growth from existing clients. ACH, card and other payment processing fees increased $4.7 million, or 79.3%, to $10.7 million for the first six months of 2025, compared to $6.0 million in the first six months of 2024, reflecting an increase in rapid funds transfer volume.
Current wording
Non-interest income was $247.8 million in the first nine months of 2025 compared to $92.2 million in the first nine months of 2024. The $155.6 million, or 168.7%, increase between those respective periods reflected$128.9 million of consumer fintech loan credit enhancement income which correlated to a like amount for provision for credit losses on consumer fintech loans, and an increase in prepaid, debit card and related fees. The increase also reflected increased ACH, card and other payment processing fees. Prepaid, debit card and related fees increased $4.4 million, or 6.0%, to $77.3 million for the first nine months of 2025, compared to $72.9 million in the first nine months of 2024. The increase reflected higher transaction volume from new clients and organic growth from existing clients. ACH, card and other payment processing fees increased $5.9 million, or 60.0%, to $15.8 million for the first nine months of 2025, compared to $9.9 million in the first nine months of 2024, reflecting an increase in rapid funds transfer volume.
Previous wording
Consumer credit fintech fees amounted to $7.6 million for the first six months of 2025. The impact of such lending may also be reflected in a lower cost of deposits, as a result of deposits required for secured credit card loans.
Current wording
Consumer credit fintech fees amounted to $12.1 million for the first nine months of 2025, compared to $1.7 million for the comparable prior year period. The impact of such lending may also be reflected in a lower cost of deposits, as a result of deposits required for secured credit card loans.
Previous wording
Net realized and unrealized gains on commercial loans, at fair value, decreased $894,000, or 55.9%, to $705,000 for the first six months of 2025 from $1.6 million for the first six months of 2024, as related loan balances continue to paydown.
Current wording
Net realized and unrealized gains on commercial loans, at fair value, decreased $495,000, or 22.4%, to $1.7 million for the first nine months of 2025 from $2.2 million for the first nine months of 2024, as related loan balances continue to paydown.
Previous wording
Leasing related income increased $2.3 million, or 125.8%, to $4.1 million for the first six months of 2025 from $1.8 million for the first six months of 2024.
Current wording
Leasing related income increased $2.6 million, or 90.4%, to $5.5 million for the first nine months of 2025 from $2.9 million for the first nine months of 2024.
Previous wording
Other non-interest income increased $1.8 million, or 119.4%, to $3.4 for the first six months of 2025 from $1.5 million in the first six months of 2024 which reflected increased payoff fees on REBL loans.
Current wording
Other non-interest income increased $4.0 million, or 153.5%, to $6.5 million for the first nine months of 2025 from $2.6 million in the first nine months of 2024 which reflected increased payoff fees on REBL loans and $2.3 million from the forfeiture of an earnest money deposit for a terminated OREO sale agreement.
Previous wording
Total non-interest expense was $110.5 million for the first six months of 2025, an increase of $12.4 million, or 12.6%, compared to $98.2 million for the first six months of 2024. Of the $12.4 million increase, $6.7 million resulted from an increase in salaries and benefits expense.
Current wording
Total non-interest expense was $166.9 million for the first nine months of 2025, an increase of $15.5 million, or 10.2%, compared to $151.4 million for the first nine months of 2024. Of the $15.5 million increase, $10.2 million resulted from an increase in salaries and benefits expense. Primary drivers of changes in non-interest expense were as follows:
Previous wording
Salaries and employee benefits expense increased to $70.8 million for the first six months of 2025, an increase of $6.7 million, or 10.4%, from $64.1 million for the first six months of 2024. The 10.4% increase in salaries and employee benefits expense reflected higher stock and other incentive compensation, and employee insurance expense. The increase also reflected higher IT and cybersecurity, and higher financial crimes and risk management expense.
Current wording
Salaries and employee benefits expense increased $10.2 million, reflecting higher stock and other incentive compensation, and employee insurance expense. The increase also reflected higher IT and cybersecurity, and higher financial crimes and risk management expense.
Previous wording
FDIC insurance expense increased $333,000, or 38.3%, to $1.2 million for the second quarter of 2025 from $869,000 in the second quarter of 2024, reflecting an increase in the assessment rate in the second quarter of 2025.
Current wording
FDIC insurance expense increased $542,000, reflecting an increase in the assessment rate in the second quarter of 2025.
Previous wording
Income tax expense was $37.9 million for the first six months of 2025 compared to $36.6 million in the first six months of 2024. A 24.5% effective tax rate in 2025 and a 25.0% effective tax rate in 2024 primarily reflected a 21% federal tax rate and the impact of various state income taxes.
Current wording
Income tax expense was $56.1 million for the first nine months of 2025 compared to $54.1 million in the first nine months of 2024. A 24.6% effective tax rate in 2025 and a 25.1% effective tax rate in 2024 based on a 21% federal tax rate and the impact of various state income taxes.
Previous wording
Our primary source of funding has been deposits. Average total deposits increased by $1.34 billion, or 19.9%, to $8.06 billion for the second quarter of 2025 compared to the second quarter of 2024. Federal Reserve average balances increased to $756.6 million in the second quarter of 2025 from $341.9 million in the second quarter of 2024.
Current wording
Our primary source of funding has been deposits. Average total deposits increased by $618.2 million, or 8.8%, to $7.63 billion for the third quarter of 2025 compared to the third quarter of 2024. Federal Reserve average balances increased to $355.0 million in the third quarter of 2025 from $247.3 million in the third quarter of 2024.
Previous wording
One source of contingent liquidity is available-for-sale securities, which amounted to $1.48 billion at June 30, 2025, compared to $1.50 billion at December 31, 2024. At June 30, 2025, outstanding loans amounted to $6.54 billion, compared to $6.11 billion at the prior year end, an increase of $421.8 million representing a use of funds. Commercial loans, at fair value, decreased to $185.5 million from $223.1 million between those respective dates, a decrease of $37.6 million, which provided funding. In 2019 and previous years, these loans were generally originated for securitization and sale, but in 2020 we decided to retain such loans on the balance sheet. While we suspended originating such loans after the first quarter of 2020, we resumed originations, which consist primarily of non-SBA commercial real estate bridge loans, in the third quarter of 2021. Such originations are held for investment and are included in “Loans, net of deferred loan fees and costs” on the balance sheet. Accordingly, commercial loans, at fair value will continue to run off. Our liquidity planning has not previously placed undue reliance on securitizations, and while our future planning excludes the impact of securitizations, other liquidity sources, primarily deposits, are determined to be adequate.
Current wording
One source of contingent liquidity is available-for-sale securities, which amounted to $1.38 billion at September 30, 2025, compared to $1.50 billion at December 31, 2024. At September 30, 2025, outstanding loans amounted to $6.67 billion, compared to $6.11 billion at the prior year end, an increase of $559.0 million representing a use of funds. Commercial loans, at fair value, decreased to $142.7 million from $223.1 million between those respective dates, a decrease of $80.5 million, which provided funding as that portfolio is in runoff.
Previous wording
While we do not have a traditional branch system, we believe that our core deposits, which include our demand, interest checking, savings and money market accounts, have similar characteristics to those of a bank with a branch system. The majority of our deposit accounts are obtained with the assistance of third-parties and as a result have historically been classified as brokered by the FDIC. Prior to December 2020, FDIC guidance for classification of deposit accounts as brokered was relatively broad, and generally included accounts which were referred to or “placed” with the institution by other companies. If the Bank ceases to be categorized as “well capitalized” under banking regulations, it will be prohibited from accepting, renewing or rolling over any of its deposits classified as brokered without the consent of the FDIC. In such a case, the FDIC’s refusal to grant consent to our accepting, renewing or rolling over brokered deposits could effectively restrict or eliminate the ability of the Bank to operate its business lines as presently conducted. In December 2020, the FDIC issued a new regulation which, in the third quarter of 2021, resulted in the majority of our deposits being reclassified from brokered to non-brokered. On July 30, 2024, the FDIC proposed a regulation eliminating certain automatic exceptions which resulted in the reclassification of significant amounts of our deposits from brokered to non-brokered as a result of the December 2020 rules changes, while retaining the ability of financial institutions to reapply. If the proposed regulation were to be adopted, significant amounts of our deposits could be reclassified as brokered, which could also result in an increase in our federal deposit insurance rate and expense. On January 21, 2025, the FDIC announced that the proposed regulation would not be adopted. Of our total deposits of $7.77 billion as of June 30, 2025, $458.1 million were classified as brokered and an estimated $560.1 million were not insured by FDIC insurance, which requires identification of the depositor and is limited to $250,000 per identified depositor. Uninsured accounts may represent a greater liquidity risk than FDIC-insured accounts should large depositors withdraw funds as a result of negative financial developments either at the Bank or in the economy. Significant amounts of our uninsured deposits are comprised of small balances, such as anonymous gift cards and corporate incentive cards for which there is no identified depositor. We do not believe that such uninsured accounts present a significant liquidity risk.
Current wording
While we do not have a traditional branch system, we believe that our core deposits, which include our demand, interest checking, savings and money market accounts, have similar characteristics to those of a bank with a branch system. The majority of our deposit accounts are obtained with the assistance of third-parties and as a result have historically been classified as brokered by the FDIC. Prior to December 2020, FDIC guidance for classification of deposit accounts as brokered was relatively broad, and generally included accounts which were referred to or “placed” with the institution by other companies. If the Bank ceases to be categorized as “well capitalized” under banking regulations, it will be prohibited from accepting, renewing or rolling over any of its deposits classified as brokered without the consent of the FDIC. In such a case, the FDIC’s refusal to grant consent to our accepting, renewing or rolling over brokered deposits could effectively restrict or eliminate the ability of the Bank to operate its business lines as presently conducted. In December 2020, the FDIC issued a new regulation which, in the third quarter of 2021, resulted in the majority of our deposits being reclassified from brokered to non-brokered. On July 30, 2024, the FDIC proposed a regulation eliminating certain automatic exceptions which resulted in the reclassification of significant amounts of our deposits from brokered to non-brokered as a result of the December 2020 rules changes, while retaining the ability of financial institutions to reapply. If the proposed regulation were to be adopted, significant amounts of our deposits could be reclassified as brokered, which could also result in an increase in our federal deposit insurance rate and expense. On January 21, 2025, the FDIC announced that the proposed regulation would not be adopted. Of our total deposits of $7.33 billion as of September 30, 2025, $509.3 million were classified as brokered and an estimated $623.4 million were not insured by FDIC insurance, which requires identification of the depositor and is limited to $250,000 per identified depositor. Uninsured accounts may represent a greater liquidity risk than FDIC-insured accounts should large depositors withdraw funds as a result of negative financial developments either at the Bank or in the economy. Significant amounts of our uninsured deposits are comprised of small balances, such as anonymous gift cards and corporate incentive cards for which there is no identified depositor. We do not believe that such uninsured accounts present a significant liquidity risk.
Showing the first 40 of 97 pairs. Open the source sections for the rest.
Rearranged current paragraphs (17)
Current report — wording carried from elsewhere
Data processing expense decreased $561,000, reflecting the impact of newly effective contract terms.
Current report — wording carried from elsewhere
Legal expense increased $2.8 million, reflecting payments related matters and higher expense for regulatory filings.
Current report — wording carried from elsewhere
Software expense increased $1.5 million, reflecting higher expenditures for information technology infrastructure including leasing, institutional banking, cybersecurity, and enterprise risk.
Current report — wording carried from elsewhere
Historically we have originated loans for securitization and sale, but in recent years we are retaining substantially all loans on our balance sheet. Our liquidity planning has not previously placed undue reliance on securitizations, and while our future planning excludes the impact of securitizations, other liquidity sources, primarily deposits, are determined to be adequate.
Current report — wording carried from elsewhere
The management of rate sensitive assets and liabilities is essential to controlling interest rate risk and optimizing interest margins. An interest rate sensitive asset or liability is one that, within a defined time period, either matures or experiences an interest rate change in line with general market rates. Interest rate sensitivity measures the relative volatility of an institution’s interest margin resulting from changes in market interest rates. While it is difficult to predict the impact of inflation and responsive Federal Reserve rate changes on our net interest income, the Federal Reserve has historically utilized increases in the overnight federal funds rate as one tool in fighting inflation. As a result of high rates of inflation, the Federal Reserve raised rates in 2022 and in 2023. In the third quarter of 2024 the
Current report — wording carried from elsewhere
The following table summarizes our loan portfolio, by loan category (dollars in thousands):
Current report — wording carried from elsewhere
The ratio of the ACL to non-performing loans decreased to 71.33% at September 30, 2025, from 101.70% at September 30, 2024, primarily as a result of theincrease in non-performing loans which proportionately exceeded the increase in the ACL. As a result, the ratio of non-performing loans to total loans increased to 1.35% at September 30, 2025 from 0.52% at September 30, 2024. The increase in non-performing loans also was reflected in the ratio of non-performing assets to total assets which increased to 1.77% at September 30, 2025 from 1.28% at September 30, 2024. See further discussion of the increases in our non-performing loans under “Portfolio Performance.”
Current report — wording carried from elsewhere
The ratio of net charge-offs to average loans was 1.85% for the nine months ended September 30, 2025, and 0.07% for the nine months ended September 30, 2024. The increase in net charge-offs reflected consumer fintech net charge-offs, which were correlated to a like amount of consumer fintech loan credit enhancement income, with no impact on net income.
Current report — wording carried from elsewhere
Our product mix includes prepaid card accounts for salary, medical spending, commercial, general purpose reloadable, corporate and other incentive, gift, government payments and transaction accounts accessed by debit cards. Balances are subject to daily fluctuations, which may comprise a significant component of variances between dates. Our funding is comprised primarily of millions of small transaction-based consumer balances, the vast majority of which are FDIC-insured. We have multi-year, contractual relationships with affinity groups which sponsor such accounts and with whom we have had long-term relationships (see Item 1. “Business—Our
Current report — wording carried from elsewhere
Strategies” in our Annual Report on Form 10-K, as amended, for the year ended December 31, 2024). Those long-term relationships comprise the majority of our deposits while we continue to grow and add new client relationships. Of our deposits at September 30, 2025, the top three affinity groups accounted for approximately $3.91 billion, the next three largest $1.28 billion, and the four subsequent largest $709.9 million. Of our deposits at year-end 2024, the top three affinity groups accounted for approximately $3.79 billion, the next three largest accounted for $1.64 billion, and the four subsequent largest accounted for $756.9 million. While certain of these relationships may have changed their ranking in the top ten, the affinity groups themselves were generally identical at both dates, with some movement in the tenth and eleventh largest relationships.
Current report — wording carried from elsewhere
We believe that payroll, debit, and government-based accounts such as child support are comparable to traditional consumer checking accounts. Such balances in the top ten relationships at September 30, 2025 totaled $3.24 billion while balances related to consumer and business payment companies, including companies sponsoring incentive payments, amounted to $2.66 billion. Such balances in the top ten relationships at year-end 2024 totaled $3.81 billion while balances related to consumer and business payment companies, including companies sponsoring incentive and gift card payments, amounted to $2.38 billion.
Current report — wording carried from elsewhere
We pay interest directly to consumer account holders for an immaterial amount of deposit balances, while the vast majority of interest expense results from fees paid to affinity groups. While affinity groups may decide to pay interest or other remuneration to account holders, they do not currently do so for the vast majority of balances. The vast majority of payments to affinity groups are variable rate and equate to varying contractual percentages tied to the effective federal funds rate, which results from Federal Reserve rate hikes and reductions. The effective federal funds rate also reflects a market rate which might be required to replace lower cost deposits, or fund loan growth in excess of deposit growth, at least in the short-term. Because underlying balances have generally exhibited stability, so too have trends in the cost of funds. The more consequential impact to cost of funds are market changes and the effective federal funds rate, specifically the impact of Federal Reserve rate hikes and reductions. We model significant fee-based relationships in our net interest income sensitivity modeling (see “Item 2 – Asset and Liability Management” above). The following discussion is applicable to our transaction accounts, comprising the majority of our deposits, in the 100 and 200 basis point rate increase and decrease scenarios as presented in the applicable table in that Asset and Liability Management section, above. The impact of the Federal Reserve rate hikes or reductions, which respectively increase or decrease interest expense, has approximated the ratio of our cost of funds divided by the effective federal funds rate, all else equal. However, there can be no assurance that such ratios could not change significantly given the other variables discussed in the Asset and Liability Management section.
Current report — wording carried from elsewhere
In third quarter of 2025, our demand and interest checking balances averaged $7.56 billion, compared to $6.94 billion in third quarter of 2024. The growth primarily reflected increases in payment company balances. Average savings and money market balances decreased to $64.5 million the third quarter of 2025, compared to $65.1 million in the third quarter of 2024. We sweep deposits off our balance sheet to other institutions to optimize diversity within our funding structure by managing the percentage of individual client deposits to total deposits.
Current report — wording carried from elsewhere
In 2024 and the first nine months of 2025, we did not use short-term time deposits. Short-term time deposits are generated through established intermediaries such as banks and other financial companies. These deposits generally originate with investment or trust companies or banks, which offer those deposits at market rates to FDIC-insured institutions, such that the balances are fully FDIC-insured. These deposits are generally classified as brokered.
Current report — wording carried from elsewhere
As a means of returning capital to shareholders, we implemented the stock repurchase programs described below. Under the repurchase programs, we intend 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 repurchase programs may be modified or terminated at any time.
Current report — wording carried from elsewhere
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. On July 7, 2025, the Board of the Company authorized the increase of the capacity of the Company’s existing share repurchase program for the third and fourth quarters of 2025 to $300.0 million and $200.0 million for 2026 (the “Repurchase Plan”). This increase cumulatively represents up to $500.0 million in share repurchases through year-end 2026.
Current report — wording carried from elsewhere
During the three and nine months ended September 30, 2025, the Company repurchased 2,034,053 and 3,472,396 shares of its common stock in the open market under the 2025 Repurchase Program at an average price of $73.74 per share and $64.80 per share, respectively.
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Previous report — wording carried elsewhere
Our average investment securities of $1.47 billion for the second quarter of 2025 increased $13.7 million from $1.46 billion for the second quarter of 2024. Related tax equivalent interest income increased $5.0 million, reflecting $3.0 million of prior period interest on CRE-2, which was repaid as a result of the sale of underlying collateral. That security was the only remaining security from the Company's prior securitizations.
Previous report — wording carried elsewhere
(3)The second quarter of 2025 included $3.0 million of interest income from a security that was known as “CRE-2” and which was related to the Company’s discontinued commercial real estate securitization business. The CRE-2 interest was repaid in the quarter as a result of the final sale of underlying collateral related to that security. CRE-2 was the last security remaining related to the Company’s discontinued commercial real estate securitization business. The $3.0 million of prior period interest income was excluded from change due to rate.
Previous report — wording carried elsewhere
Consumer credit fintech fees amounted to $4.0 million for the second quarter of 2025. The impact of such lending may also be reflected in a lower cost of deposits, as a result of deposits required for secured credit card loans.
Previous report — wording carried elsewhere
Net realized and unrealized gains on commercial loans, at fair value, decreased $159,000, or 31.6%, to $344,000 for the second quarter of 2025 from $503,000 for the second quarter of 2024, as related loan balances continue to paydown.
Previous report — wording carried elsewhere
Changes in non-interest expense were as follows:
Previous report — wording carried elsewhere
Software expense increased $1.0 million or 11.3%, to $10.2 million in the first six months of 2025 from $9.1 million in the first six months of 2024. The increase reflected higher expenditures for information technology infrastructure including leasing, institutional banking, cybersecurity, and enterprise risk.
Previous report — wording carried elsewhere
(1)Of the SBL commercial mortgage and SBL construction loans, $152.7 million represents the total of the non-guaranteed portion of SBA 7(a) Program loans and non-SBA loans. The balance of those categories represents SBA 504 Program loans with 50%-60% origination date LTVs. SBL Commercial excludes $4.5 million of loans sold that do not qualify for true sale accounting.
Previous report — wording carried elsewhere
The current allowance for credit losses for REBL, is primarily based upon historical industry losses for multi-family loans, in the absence of significant charge-offs within the Company’s REBL portfolio. As a result of increasing amounts of loans classified as special mention and substandard, the Company evaluated potential related sensitivity for REBL in the third quarter of 2024. Such evaluation is inherently subjective as it requires material estimates that may be susceptible to change as more information becomes available. As a result, the Company added a new qualitative factor to its ACL analysis.
Previous report — wording carried elsewhere
Financial instruments whose contract amounts represent potential credit risk for us, are our unused commitments to extend credit and standby letters of credit which were approximately $1.91 billion and $305,000, respectively, at June 30, 2025 and $1.97 billion and