Bancorp, Inc.
For the period ended Sep 30, 2026. Filed Nov 5, 2026.
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, 2026 · Filed Nov 5, 2026
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 2026-06-30; filed 2026-08-06.
0001628280-26-054157
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0001628280-26-070894
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 232 previous paragraphs and 233 current paragraphs.
129 unchanged; 82 reworded; 20 added; 18 removed; 3 previous and 2 current paragraphs rearranged.
Tables are not compared: 22 previous and 22 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 (20)
Current report
•our ability to obtain the anticipated benefits and cost savings of our organizational restructuring activities;
Current report
As part of our long-term strategic plan, in September 2026, we announced that as part of our organizational restructuring, we intend to discontinue the origination of retail and wholesale SBL loans by the end of 2026. In addition, staffing adjustments were made across several other areas of the organization in connection with our efforts to refine workflows, expand automation and artificial intelligence, optimize costs and invest in our highest-value strategic priorities. We recognized restructuring costs of $4.3 million in the third quarter of 2026 in connection with those actions.
Current report
•Income tax expense decreased $9.3 million to $8.9 million in the third quarter of 2026 from $18.2 million in the third quarter of 2025. The third quarter of 2026 was favorably impacted by $10.3 million of total benefits related to purchased transferable tax credits, of which $3.0 million relates to 2026 taxes and $7.3 million relates to the carryback of credits to prior periods.
Current report
•Provision for credit losses, total decreased $4.5 million, to $40.6 million in the third quarter of 2026, from $45.1 million in the third quarter of 2025, primarily driven by a $5.1 million decrease in provision for non-fintech loans from estimated losses for the direct leasing portfolio that were recognized in the third quarter of 2025.
Current report
The above positive impacts to net income were partially offset by:
Current report
•Non-interest expense increased $7.1 million reflecting higher costs in the third quarter of 2026, including $4.3 million of costs related to the restructuring of our SBL business line and other departmental reductions, and $1.9 million related to an accrual for the estimated cost of a legal settlement.
Current report
At September 30, 2026, the ratio of equity to assets was 7.18%, compared to 7.38% at December 31, 2025, the decrease primarily driven by an accumulated other comprehensive loss in the year to date 2026 of $59.7 million from unrealized losses on our available for sale investment portfolio driven by market rate increases.
Current report
Our net interest income for the third quarter of 2026 decreased $4.1 million, or 4.4%, to $90.1 million from $94.2 million in the third quarter of 2025.
Current report
Interest expense for the third quarter of 2026 increased $3.3 million to $45.5 million from $42.2 million in the third quarter of 2025, driven by $4.6 million higher interest on short-term borrowings and $1.4 million higher interest expense on senior debt, partially offset by $2.7 million lower interest expense on deposits.
Current report
(1)Loans, total includes Commercial loans, at fair value and Loans, net of deferred loan fees and costs. Non-accrual loans are included in the Average balance.
Current report
Other non-interest income decreased $0.8 million for the third quarter of 2026, compared to the third quarter of 2025, primarily driven by$2.3 million recognized in the third quarter of 2025 from the forfeiture of an earnest money deposit for a terminated OREO sale agreement, partially offset by $1.2 million higher income in the third quarter of 2026, including $0.6 million higher other fee income from loans and $0.6 million of fees earned on deposit sweeps.
Current report
Total non-interest expense was $63.5 million for the third quarter of 2026, an increase of $7.1 million, or 12.6%, compared to $56.4 million for the third quarter of 2025. The increase is primarily driven by higher costs in the third quarter of 2026, including $4.3 million of costs related to the restructuring of our Small Business Lending business line and other departmental reductions, and $1.9 million related to an accrual for the estimated cost of a legal settlement.
Current report
In third quarter of 2026, as part of our tax strategy, we purchased transferable tax credits to reduce our cash tax obligation for 2026 and certain eligible prior years. Income tax expense for the third quarter of 2026 includes $10.3 million of total benefits related to transferable investment tax credits, of which $3.0 million relates to 2026 taxes and $7.3 million relates to carryback of credits to prior periods. We expect to continue to invest in tax credits in future periods, resulting in an estimated annual future effective tax rate of approximately 23.9%, compared to the full year 2025 effective tax rate of 24.7%.
Current report
Results of Operations - Nine Months Ended September 30, 2026 and 2025
Current report
Our net interest income for the nine months ended September 30, 2026 decreased $14.1 million, or 5.0%, to $269.3 million from $283.4 million in the nine months ended September 30, 2025.
Current report
(1)Loans, total includes Commercial loans, at fair value and Loans, net of deferred loan fees and costs. Non-accrual loans are included in the Average balance.
Current report
Total non-interest expense was $175.0 million for the nine months ended September 30, 2026, an increase of $8.1 million, or 4.9%, compared to $166.9 million for the nine months ended September 30, 2025. The increase is primarily driven by higher costs in the nine months ended September 30, 2026 including $5.2 million of costs related to the restructuring of our SBL business line and other departmental reductions, $1.9 million higher salaries and benefits expense primarily driven by higher costs from incentive compensation accruals and $1.8 million higher software expense primarily driven by increased adoption of artificial intelligence tools.
Current report
In third quarter of 2026, as part of our tax strategy, we invested in transferable tax credits to reduce our cash tax obligation for 2026 and certain eligible prior years. Income tax expense for the nine months ended September 30, 2026 includes $10.3 million of total benefits related to transferable investment tax credits, of which $3.0 million relates to 2026 taxes and $7.3 million relates to carryback of credits to prior periods. We expect to continue to invest in tax credits in future periods, resulting in an estimated annual future effective tax rate of approximately 23.9%, compared to the full year 2025 effective tax rate of 24.7%.
Current report
Total assets at September 30, 2026 were $9.43 billion, relatively consistent with $9.35 billion at December 31, 2025.
Current report
Net charge-offs to average loans was 1.73% for the nine months ended September 30, 2026 compared to 2.47% for the nine months ended September 30, 2025.
Removed paragraphs (18)
Previous report
We continue to invest in our infrastructure, with a focus on investing in artificial intelligence tools to gain efficiency and productivity of our people and platform, and reallocating or reducing resources where appropriate. We believe that our infrastructure can accommodate significant additional growth without proportionate increases in expense.
Previous report
•Provision for credit losses, total decreased $18.3 million, to $26.1 million in the second quarter of 2026, from $44.4 million in the second quarter of 2025. That decrease includes a $17.4 million decrease in provision for fintech loans, which directly relates to the credit enhancement income decrease outlined above. See further discussion of fintech loans and the related credit enhancement in “Financial Condition—Total Loan Portfolio—Fintech Programs” in this MD&A.
Previous report
Our efforts to return capital to shareholders through share repurchases have had an impact on our ratio of equity to assets. At June 30, 2026, the ratio of equity to assets was 7.65%, compared to 7.38% at December 31, 2025, primarily driven by reductions in equity from share repurchases partially offset by an increase in equity capital from retained earnings.
Previous report
Our net interest income for the second quarter of 2026 decreased $7.0 million, or 7.2%, to $90.5 million from $97.5 million in the second quarter of 2025.
Previous report
Interest expense for the second quarter of 2026 decreased $4.1 million to $41.6 million from $45.7 million in the second quarter of 2025, driven by $9.6 million lower interest expense on deposits, partially offset by $2.9 million higher interest on short-term borrowings and $2.7 million higher interest expense on senior debt.
Previous report
(1)Includes commercial loans, at fair value and non-accrual loans.
Previous report
(2)Full taxable equivalent basis, using 21% respective statutory federal tax rates in 2026 and 2025.
Previous report
Total non-interest expense was $56.5 million for the second quarter of 2026, a decrease of $0.7 million, or 1.3%, compared to $57.2 million for the second quarter of 2025. The decrease reflects a $0.6 million decrease in legal expense due to higher costs in 2025 for payments related matters and regulatory filings.
Previous report
Income Taxes
Previous report
Results of Operations - Six Months Ended June 30, 2026 and 2025
Previous report
Our net interest income for the six months ended June 30, 2026 decreased $10.0 million, or 5.3%, to $179.3 million from $189.2 million in the six months ended June 30, 2025.
Previous report
(1)Includes commercial loans, at fair value and non-accrual loans.
Previous report
(2)Full taxable equivalent basis, using 21% respective statutory federal tax rates in 2026 and 2025.
Previous report
Total non-interest expense was $111.5 million for the six months ended June 30, 2026, an increase of $1.0 million, or 0.9%, compared to $110.5 million for the six months ended June 30, 2025. Theincrease reflects$4.1 million higher salaries and benefits expense primarily driven by higher costs from incentive compensation accruals and costs related to organization changes, partially offset by a $2.0 million legal settlement reimbursement from insurance in the first quarter of 2026 related to a legal settlement that was previously expensed in fourth quarter of 2025 and a $1.0 million decrease in legal expense due to higher costs in 2025 for payments related matters and regulatory filings.
Previous report
Income Taxes
Previous report
Total assets at June 30, 2026 were $9.22 billion, a $136.4 million decrease from $9.35 billion at December 31, 2025. The change in total assets was primarily driven by a $40.1 million decrease in our total loan portfolio and a $56.9 million decrease in investment securities.
Previous report
Net charge-offs to average loans was 1.51% for the six months ended June 30, 2026 compared to 2.38% for the six months ended June 30, 2025.
Previous report
The ACL decreased $2.7 million from December 31, 2025, primarily driven by a $3.5 million decrease in reserves on direct lease financing, driven by improved credit performance on the underlying loan portfolio segment.
Reworded paragraphs (82)
Previous wording
Deposits generated through these partner relationships are deployed into loan and lease products offered by both Fintech sponsored lending and the Credit Solutions business line. As of June 30, 2026,96% of our total deposits were sourced from the Fintech Solutions business, primarily from program sponsorship.
Current wording
Deposits generated through these partner relationships are deployed into loan and lease products offered by both Fintech sponsored lending and the Credit Solutions business line. As of September 30, 2026,96.4% of our total deposits were sourced from the Fintech Solutions business, primarily from program sponsorship.
Previous wording
Credit Solutions is our lending business and is focused on offering flexible, specialty credit solutions, and we develop customized products and programs to meet the needs of our clients. Our loan programs include: (i) Real estate bridge lending (REBL), which is comprised primarily of apartment building rehabilitation loans; (ii) Institutional Banking, which is comprised of security-backed lines of credit (SBLOC), cash value insurance policy-backed lines of credit (IBLOC) and advisor financing; and (iii) Commercial Loans which includes Small Business Loans (“SBL”) which is comprised primarily of Small Business Administration (“SBA”) loans and direct lease financing. Our total loan portfolio also includes the Fintech loans generated by the Fintech Solutions business. The loans in our non-fintech portfolio are secured by collateral, and the fintech loans are backed by credit enhancement agreements from our partners.
Current wording
Credit Solutions is our lending business and is focused on offering flexible, specialty credit solutions, and we develop customized products and programs to meet the needs of our clients. Our loan programs include: (i) Real estate bridge lending (REBL), which is comprised primarily of apartment building rehabilitation loans; (ii) Institutional Banking, which is comprised of security-backed lines of credit (SBLOC), cash value insurance policy-backed lines of credit (IBLOC) and advisor financing; and (iii) Commercial Loans which includes direct lease financing and Small Business Loans (“SBL”) which is comprised primarily of Small Business Administration (“SBA”) loans. As previously disclosed in a Current Report on Form 8-K filed with the SEC in September 2026, we implemented an organizational restructuring of our resources and business to align our strategic priorities. As part of the restructuring, we intend to discontinue the origination of retail and wholesale SBL loans by the end of 2026 while continuing to manage the existing SBL loan portfolio.
Previous wording
We remain focused on growing our fintech revenues through new partnerships, products and services. Fintech loans of $901.5 million as of June 30, 2026 increased 32% compared to the June 30, 2025 balance of $680.5 million. Certain loan fees on fintech loans are recorded as non-interest income and totaled $6.5 million for the quarter ended June 30, 2026, a 65% increase compared to $4.0 million for the quarter ended June 30, 2025.
Current wording
We remain focused on growing our fintech revenues through new partnerships, products and services. Fintech loans of $936.6 million as of September 30, 2026 increased 19.3% compared to the September 30, 2025 balance of $785.0 million. Certain loan fees on fintech loans are recorded as non-interest income and totaled $7.7 million for the quarter ended September 30, 2026, a 72.0% increase compared to $4.5 million for the quarter ended September 30, 2025.
Previous wording
We remain focused on returning capital through share repurchases, and repurchased 870,129 shares of our common stock at an average cost of $57.46 per share during the quarter ended June 30, 2026. Primarily driven by share repurchases, outstanding shares, net of treasury shares at June 30, 2026 decreased 3% to 41.043 million from 42.355 million shares at December 31, 2025.
Current wording
We remain focused on returning capital through share repurchases, and repurchased 822,229 shares of our common stock at an average cost of $60.81 per share during the quarter ended September 30, 2026. Primarily driven by share repurchases, outstanding shares, net of treasury shares at September 30, 2026 decreased 5.04% to 40.221 million from 42.355 million shares at December 31, 2025.
Previous wording
Our net income increased to $60.7 million in the second quarter of 2026 from $59.8 million in the second quarter of 2025, an increase of $0.9 million, or 1.4%.
Current wording
Our net income increased to $62.8 million in the third quarter of 2026 from $54.9 million in the third quarter of 2025, an increase of $7.9 million, or 14.3%.
Previous wording
Earnings per diluted share increased to $1.45 in the second quarter of 2026 from $1.27 in the second quarter of 2025, an increase of 14.2%, driven both by the increase in net income and a 5.4 million decrease in weighted average diluted shares, primarily driven by our share repurchase activity during the year.
Current wording
Earnings per diluted share increased to $1.53 in the third quarter of 2026 from $1.18 in the third quarter of 2025, an increase of 29.7%, driven both by the increase in net income and a 5.4 million decrease in weighted average diluted shares, primarily driven by our share repurchase activity during the year.
Previous wording
•Non-interest income decreased $10.7 million, to $73.0 million in the second quarter of 2026 from $83.7 million in the second quarter of 2025. That decrease is driven by a $17.4 million decrease in Fintech loan credit enhancement income driven by improved performance of fintech loans, partially offset by a $5.3 million increase in total fintech fees primarily driven by volume growth, and a $2.1 million increase in other non-interest income driven by higher other fee income on loans and deposit sweep income.
Current wording
•Non-interest income increased $5.4 million, to $85.8 million in the third quarter of 2026 from $80.4 million in the third quarter of 2025. That increase is driven by a $6.7 million increase in total fintech fees primarily driven by volume growth, partially offset by a $0.8 million decrease in other non-interest income.
Previous wording
•Net interest income decreased $7.0 million, consisting of an $11.1 million decrease in interest income partially offset by a $4.1 million decrease in interest expense. The most significant drivers of the decrease in interest income are$6.9 million lower interest income from deposits driven by elevated average interest-earning deposits from customers in the second quarter of 2025 due to wildfire insurance refund balances, a $3.0 million one-time gain recognized in investment interest incomein the second quarter of 2025 from the repayment of a CRE-2 investment security. The decrease in interest expense is primarily driven by$9.6 million lower interest expense on deposit balances partially offset by higher interest expense of$2.7 million from senior debt due to the August 2025 facility upsizing and increase in rate.
Current wording
•Net interest income decreased $4.1 million, driven by a $0.8 million decrease in interest income and a $3.3 million increase in interest expense. The increase in interest expense is primarily driven by higher interest expense of $1.4 million from senior debt due to the August 2025 facility upsizing and increase in rate and $2.0 million higher combined interest expense on short-term borrowings and deposit balances primarily due to higher average balances, partially offset by lower rates.
Previous wording
Detailed discussion of our financial results and the drivers of these fluctuations follows in “Results of Operations.”
Current wording
A detailed discussion of our financial results and the drivers of these fluctuations follows in “Results of Operations.”
Previous wording
Average loans and leases grew to $7.63 billion in the second quarter of 2026 from $6.57 billion in the second quarter of 2025, an increase of $1.06 billion or 16.1%, primarily driven by a $853.9 million increase in our average fintech portfolio, reflecting our continued strategic shift towards sponsored lending.
Current wording
Average loans and leases grew to $7.91 billion in the third quarter of 2026 from $6.69 billion in the third quarter of 2025, an increase of $1.22 billion or 18.2%, primarily driven by a $906.7 million increase in our average fintech portfolio, reflecting our continued strategic shift towards sponsored lending.
Previous wording
Non-interest income fintech fees increased $5.3 million, or 14.7%, to $40.9 million in the second quarter of 2026, which includes a $2.5 million increase in consumer credit fintech fees and a $2.7 million increase in prepaid, debit card, ACH and other fees. The growth in consumer credit fintech fees reflects continued organic volume growth with existing partners and products and the impact of new products launched within the past year. The growth in prepaid, debit card and related fees is driven by an increase in gross dollar volume (“GDV”) to $53.5 billion, a 22.5% increase from $43.6 billion in the second quarter of 2025. GDV growth may not have a direct impact on the related fee income due to the different product fee structures within the total mix.
Current wording
Non-interest income—fintech fees increased $6.7 million, or 19.2%, to $41.8 million in the third quarter of 2026, which includes a $3.2 million increase in consumer credit fintech fees and a $3.5 million increase in prepaid, debit card, ACH and other fees. The growth in consumer credit fintech fees reflects continued organic volume growth with existing partners and products and the impact of new products launched within the past year. The growth in prepaid, debit card and related fees is driven by an increase in GDV to $54.3 billion, a 23.4% increase from $44.0 billion in the third quarter of 2025. GDV growth may not have a direct impact on the related fee income due to the different product fee structures within the total mix.
Previous wording
Net interest margin decreased to 3.85% in the second quarter of 2026 from 4.44% in the second quarter of 2025, driven by the shift in our loan portfolio to a greater percentage of fintech loans, for which we primarily earn fee income and not interest income, combined with the impact of Federal Reserve rate decreases from the third and fourth quarters of 2025. See further discussion of the growth in Fintech lending contributing to margin compression under “Results of Operations—Net Interest Income—Growth of Fintech Lending” in the following section.
Current wording
Net interest margin decreased to 3.75% in the third quarter of 2026 from 4.45% in the third quarter of 2025, driven by the shift in our loan portfolio to a greater percentage of fintech loans, for which we primarily earn fee income and not interest income, combined with the impact of Federal Reserve rate decreases from the fourth quarter of 2025. See further discussion of the growth in Fintech lending contributing to margin compression under “Results of Operations—Net Interest Income—Growth of Fintech Lending” in the following section.
Previous wording
Growth of Fintech Lending. Our strategy is to continue to drive growth in our Fintech lending business, as seen by the shift in mix to Fintech representing 18.2% of our total average loan portfolio in the second quarter of 2026, compared to 8.2% for the second quarter of 2025. A significant portion of these loans are zero percent interest and, as such, do not recognize interest income, however we do generate fee revenue from these loans, through our partnership agreements. This mix shift to non-interest earning loans results in a reduction of the calculated average rate earned by total loans, average rate earned by our total interest-earning assets, and net interest margin in the above analysis. Offsetting these impacts is the growth in Consumer fintech fee income recognized within non-interest income in our Consolidated Statements of Operations which was $6.5 million and $4.0 million for the second quarters of 2026 and 2025, respectively.
Current wording
Growth of Fintech Lending. Our strategy is to continue to drive growth in our Fintech lending business, as seen by the shift in mix to Fintech representing 19.6% of our total average loan portfolio in the third quarter of 2026, compared to 9.6% for the third quarter of 2025. A significant portion of these loans are zero percent interest and, as such, do not recognize interest income; however, we do generate fee revenue from these loans, through our partnership agreements. This mix shift to non-interest earning loans results in a reduction of the calculated average rate earned by total loans, average rate earned by our total interest-earning assets, and net interest margin in the above analysis. Offsetting these impacts is the growth in Consumer credit fintech fee income recognized within non-interest income in our Consolidated Statements of Operations which was $7.7 million and $4.5 million for the third quarters of 2026 and 2025, respectively.
Previous wording
Interest income for the second quarter of 2026 was $132.0 million, a decrease of $11.1 million from $143.1 million in the second quarter of 2025, primarily drivenby$6.9 million lower income on interest-earning deposits and a one-time gain in 2025 of $3.0 million from a CRE-2 investment security, which was repaid in full. In the second quarter of 2025, average deposits on balance sheet from customers of $756.6 million wassignificantly higher than $155.5 million in second quarter of 2026, driven by higher fintech on-balance sheet volumes.
Current wording
Interest income for the third quarter of 2026 was $135.6 million, a decrease of $0.8 million from $136.4 million in the third quarter of 2025, primarily drivenby$3.0 million lower income on interest-earning deposits partially offset by$2.1 million higher income on investment securities. In the third quarter of 2025, average interest earning deposits on balance sheet of $355.0 million wassignificantly higher than $100.9 million in third quarter of 2026, driven by higher fintech on-balance sheet volumes.
Previous wording
Interest income from loans was $110.6 million in the second quarter of 2026, $1.7 million lower than $112.3 million in the second quarter of 2025, driven by $4.1 million lower interest earned on non-fintech loans partially offset by $2.3 million higher interest earned on fintech loans. For non-fintech loans, lower interest earned was primarily driven by lower rates, as the average rate decreased to 6.91% for the second quarter of 2026, compared to 7.42% for the second quarter of 2025, while average balance was 3.4% higher. The loan portfolio average rate reflects the impact of Federal Reserve rate decreases which continued in the third and fourth quarters of 2025. For fintech loans, higher interest income of $2.3 million was driven by higher volumes of interest-earning fintech loans. See “Growth of Fintech Lending” discussion above for further information.
Current wording
Interest income from loans was $114.4 million in the third quarter of 2026, $0.6 million lower than $115.0 million in the third quarter of 2025, driven by $3.7 million lower interest earned on non-fintech loans partially offset by $3.1 million higher interest earned on fintech loans. For non-fintech loans, lower interest earned was primarily driven by lower rates, as the average rate decreased to 6.93% for the third quarter of 2026, compared to 7.53% for the third quarter of 2025, while average balance was 5.2% higher. The loan portfolio average rate reflects the impact of Federal Reserve rate decreases which continued in the third and fourth quarters of 2025. For fintech loans, higher interest income of $3.1 million was driven by higher volumes of interest-earning fintech loans. See “Growth of Fintech Lending” discussion above for further information.
Previous wording
Interest expense on deposits was $9.6 million lower, primarily driven by lower rates in 2026. Interest expense on short-term deposits was $2.9 million higher in 2026, as that funding source was utilized to fund higher average loans on balance sheet in the second quarter of 2026, compared to limited utilization in second quarter of 2025. Interest expense on senior debt was $2.7 million higher, due to higher outstanding principal and higher rate on senior debt. In August 2025, $200 million of 7.375% Senior Notes due 2030 were issued, the proceeds of which were used in part to repay at maturity the $100 million of outstanding 4.75% Senior notes due 2025.
Current wording
Interest expense on deposits was $2.7 million lower, primarily driven by lower rates in 2026. Interest expense on short-term borrowings was $4.6 million higher in 2026, as that funding source was utilized to fund higher average loans on balance sheet in the third quarter of 2026, compared to limited utilization in third quarter of 2025. Interest expense on senior debt was $1.4 million higher, due to higher outstanding principal and higher rate on senior debt. In August 2025, $200 million of 7.375% Senior Notes due 2030 were issued, the proceeds of which were used in part to repay at maturity the $100 million of outstanding 4.75% Senior notes due 2025.
Previous wording
For the second quarter of 2026 compared to second quarter of 2025, average interest-earning assets increased $620.5 million, reflecting a $1.06 billion increase in average loans and leases and a $161.4 million increase in average investment securities, partially offset by a decrease in average interest-earning deposits of $601.1 million. For those respective periods, average deposits and liabilities increased $755.3 million, driven by a $357.2 million increase in deposits, $301.8 million increase in short-term borrowings and a $100.1 million increase in senior debt.
Current wording
For the third quarter of 2026 compared to third quarter of 2025, average interest-earning assets increased $1.13 billion, reflecting a $1.22 billion increase in average loans and leases and a $162.0 million increase in average investment securities, partially offset by a decrease in average interest-earning deposits of $254.1 million. For those respective periods, average deposits and liabilities increased $1.31 billion, driven by a $794.2 million increase in deposits, a $466.3 million increase in short-term borrowings and a $55.6 million increase in senior debt.
Previous wording
Our net interest margin (calculated by dividing net interest income by average interest-earning assets) for the second quarter of 2026 was 3.85% compared to 4.44% for the second quarter of 2025, a decrease of 59 basis points. The average yield on interest-earning assets decreased 90 basis points, due to the shift of our portfolio mix to more fintech loans where we primarily earn fee income as discussed further under “Growth of Fintech Lending”above, plus lower market short-term interest rates. In addition, the cost of deposits and interest-bearing liabilities decreased 37 basis points, or a net change of 53 basis points, driven primarily by a 55 basis point decrease in average rate on deposits primarily due to a lower rate environment in the second quarter of 2026.
Current wording
Our net interest margin (calculated by dividing net interest income by average interest-earning assets) for the third quarter of 2026 was 3.75% compared to 4.45% for the third quarter of 2025, a decrease of 70 basis points. The average yield on interest-earning assets decreased 79 basis points, due to the shift of our portfolio mix to more fintech loans where we primarily earn fee income as discussed further under “Growth of Fintech Lending”above, plus lower market short-term interest rates. In addition, the cost of deposits and interest-bearing liabilities decreased 16 basis points, or a net change of 63 basis points, driven primarily by a 32 basis point decrease in average rate on deposits primarily due to a lower rate environment in the third quarter of 2026.
Previous wording
In addition, the provision for credit losses on non-fintech loans was $0.4 million in the second quarter of 2026 compared to provision expense of $1.5 million in the second quarter of 2025.
Current wording
Our provision for credit losses was $40.6 million for the third quarter of 2026, a decrease of $4.5 million compared to a provision of $45.1 million for the third quarter of 2025. In addition, the provision for credit losses on non-fintech loans was $0.7 million in the third quarter of 2026 compared to provision expense of $5.8 million in the third quarter of 2025 driven by estimated losses for the direct leasing portfolio in the third quarter of 2025.
Previous wording
Our provision for credit losses was $26.1 million for the second quarter of 2026, a decrease of $18.3 million compared to a provision of $44.4 million for the second quarter of 2025. The decrease is primarily attributable to $17.4 million lower provision for fintech loans driven by improved performance of that loan portfolio. The lower fintech loan provision correlates to a lower amount of related non-interest income from a credit enhancement contractually provided by a third party. Accordingly, there was no related net impact from these amounts. See further discussion of this program in “Financial Condition—Allowance for Credit Loss—Fintech Programs” in MD&A.
Current wording
The fintech loan provision correlates to the amount of related non-interest income from a credit enhancement contractually provided by a third party. Accordingly, there was no related net impact from these amounts. See further discussion of this program in “Financial Condition—Allowance for Credit Losses—Fintech Programs” in MD&A.
Previous wording
Non-interest income was $73.0 million in the second quarter of 2026, a decrease of $10.7 million compared to $83.7 million in the second quarter of 2025. The decrease between those respective periods is primarily driven by a $17.4 million decrease infintech loan credit enhancement income, which was partially offset by$5.3 million in higher total fintech fees and $2.1 million of higher other non-interest income.
Current wording
Non-interest income was $85.8 million in the third quarter of 2026, an increase of $5.4 million compared to $80.4 million in the third quarter of 2025. The increase between those respective periods is primarily driven by $6.7 million of higher total fintech fees, partially offset by $0.8 million of lower other non-interest income.
Previous wording
Total fintech fees increased $5.3 million, which includes a $1.7 million increase in prepaid, debit card and related fees, or 6.4%, to $27.8 million for the second quarter of 2026, compared to $26.1 million in the second quarter of 2025, driven byhigher transaction volume from new clients and organic growth from existing clients. In addition, ACH, card and other payment processing fees increased $1.0 million, or 17.9%, to $6.6 million for the second quarter of 2026, compared to $5.6 million in the second quarter of 2025, reflecting an increase in rapid funds transfer volume. Consumer credit fintech fees increased $2.5 million, or 64.9%, to $6.5 million for the second quarter of 2026, compared to $4.0 million in the second quarter of 2025, reflecting increased loan volume.
Current wording
Total fintech fees increased $6.7 million, which includes a $2.5 million increase in prepaid, debit card and related fees, or 9.7%, to $28.0 million for the third quarter of 2026, compared to $25.5 million in the third quarter of 2025, driven byhigher transaction volume from new clients and organic growth from existing clients. In addition, ACH, card and other payment processing fees increased $1.0 million, or 20.2%, to $6.1 million for the third quarter of 2026, compared to $5.1 million in the third quarter of 2025, reflecting an increase in rapid funds transfer volume. Consumer credit fintech fees increased $3.2 million, or 72.0%, to $7.7 million for the third quarter of 2026, compared to $4.5 million in the third quarter of 2025, reflecting increased loan volume.
Previous wording
Income tax expense was $20.3 million for the second quarter of 2026 compared to $19.8 million in the second quarter of 2025. Our effective tax rate was 25.1%, and 24.9% in the second quarters of 2026 and 2025, respectively, based on a 21% federal tax rate and the impact of various state income taxes.
Current wording
Income tax expense was $8.9 million for the third quarter of 2026 compared to $18.2 million in the third quarter of 2025. Our effective tax rate was 12.5% and 24.9% in the third quarters of 2026 and 2025, respectively, with each period based on a 21% federal tax rate, the impact of various state income taxes and the third quarter of 2026 was favorably impacted by purchased tax credits.
Previous wording
Growth of Fintech Lending. Our strategy is to continue to drive growth in our Fintech lending business, as seen in the shift in mix to Fintech representing 16.8% of our total average loan portfolio in the six months ended June 30, 2026, compared to 7.8% for the six months ended June 30, 2025. A significant portion of these loans are zero percent interest and, as such, do not recognize interest income, however we do generate fee revenue from these loans, through our partnership agreements. The shift to non-interest earning loans results in a reduction of the calculated average rate earned by total loans, average rate earned by our total interest-earning assets, and net interest margin in the above analysis. Offsetting these impacts is the growth in Consumer fintech fee income recognized within non-interest income in our Consolidated Statements of Operations which was $12.1 million and $7.6 million for the six months ended June 30, 2026 and 2025, respectively.
Current wording
Growth of Fintech Lending. Our strategy is to continue to drive growth in our Fintech lending business, as seen in the shift in mix to Fintech representing 17.8% of our total average loan portfolio in the nine months ended September 30, 2026, compared to 8.4% for the nine months ended September 30, 2025. A significant portion of these loans are zero percent interest and, as such, do not recognize interest income; however, we do generate fee revenue from these loans, through our partnership agreements. The shift to non-interest earning loans results in a reduction of the calculated average rate earned by total loans, average rate earned by our total interest-earning assets, and net interest margin in the above analysis. Offsetting these impacts is the growth in Consumer credit fintech fee income recognized within non-interest income in our Consolidated Statements of Operations which was $19.9 million and $12.1 million for the nine months ended September 30, 2026 and 2025, respectively.
Previous wording
Interest income for the six months ended June 30, 2026 was $261.8 million, a decrease of $21.2 million from $283.0 million in the six months ended June 30, 2025, primarily driven by $17.4 million lower income on interest-earning deposits and a one-time gain in 2025 of $3.0 million from a CRE-2 investment security which was repaid in full. In the six months ended June 30, 2025, average interest earning deposits on balance sheet of $945.5 million was significantly higher than $202.5 million in six months ended June 30, 2026, driven by one-time volumes from wildfire insurance refunds and higher fintech on-balance sheet volumes.
Current wording
Interest income for the nine months ended September 30, 2026 was $397.4 million, a decrease of $21.9 million from $419.3 million in the nine months ended September 30, 2025, primarily driven by $20.4 million lower income on interest-earning deposits and a one-time gain in 2025 of $3.0 million from a CRE-2 investment security which was repaid in full. In the nine months ended September 30, 2025, average interest earning deposits on balance sheet of $746.5 million was significantly higher than $168.3 million in nine months ended September 30, 2026, driven by one-time volumes in 2025 from wildfire insurance refunds and higher fintech on-balance sheet volumes.
Previous wording
Interest income from loans was $218.1 million in the six months ended June 30, 2026, $3.1 million lower than $221.2 million in the six months ended June 30, 2025, driven by $7.0 million lower interest earned on non-fintech loans partially offset by $3.9 million higher interest earned on fintech loans. For non-fintech loans, lower interest earned was primarily driven by lower rates, as the average rate decreased to 6.90% for the six months ended June 30, 2026, compared to 7.38% for the six months ended June 30, 2025, while average balance was 3.6% higher. The loan portfolio average rate reflects the impact of Federal Reserve rate decreases which continued in the third and fourth quarters of 2025. For fintech loans, higher interest income of $3.9 million was driven by higher volumes of interest-earning fintech loans. See “Growth of Fintech Lending” discussion above for further information.
Current wording
Interest income from loans was $332.6 million in the nine months ended September 30, 2026, $3.6 million lower than $336.2 million in the nine months ended September 30, 2025, primarily driven by $10.7 million lower interest earned on non-fintech loans partially offset by $7.1 million higher interest earned on fintech loans. For non-fintech loans, lower interest earned was primarily driven by lower rates, as the average rate decreased to 6.91% for the nine months ended September 30, 2026, compared to 7.43% for the nine months ended September 30, 2025, while average balance was 4.1% higher. The loan portfolio average rate reflects the impact of Federal Reserve rate decreases which continued in the third and fourth quarters of 2025. For fintech loans, higher interest income of $7.1 million was driven by higher volumes of interest-earning fintech loans. See “Growth of Fintech Lending” discussion above for further information.
Previous wording
Interest expense for the six months ended June 30, 2026 decreased $11.1 million to $82.6 million from $93.7 million in the six months ended June 30, 2025, driven by $20.7 million lower interest expense on deposits, partially offset by $4.3 million higher interest on short-term borrowings and $5.3 million higher interest expense on senior debt.
Current wording
Interest expense for the nine months ended September 30, 2026 decreased $7.9 million to $128.0 million from $135.9 million in the nine months ended September 30, 2025, driven by $23.3 million lower interest expense on deposits, partially offset by $9.0 million higher interest on short-term borrowings and $6.8 million higher interest expense on senior debt.
Previous wording
Interest expense on deposits was $20.7 million lower due to higher average balance of deposits in 2025 related to wildfire insurance refunds, and lower rates in 2026. Interest expense on short-term borrowings was $4.3 million higher in 2026, as that funding source was utilized to fund higher average loans on balance sheet in the six months ended June 30, 2026, compared to limited utilization in 2025. Interest expense on senior debt was $5.3 million higher, due to higher outstanding principal and higher rate on senior debt. In August 2025, $200 million of 7.375% Senior Notes due 2030 were issued, the proceeds of which were used in part to repay at maturity the $100 million of outstanding 4.75% Senior notes due 2025.
Current wording
Interest expense on deposits was $23.3 million lower due to lower average rate of 1.68% in 2026 compared to 2.15% in 2025. Interest expense on short-term borrowings was $9.0 million higher in 2026, as that funding source was utilized to fund growth of loans on balance sheet in the nine months ended September 30, 2026, compared to limited utilization in 2025. Interest expense on senior debt was $6.8 million higher, due to higher outstanding principal and higher rate on senior debt. In August 2025, $200 million of 7.375% Senior Notes due 2030 were issued, the proceeds of which were used in part to repay at maturity the $100 million of outstanding 4.75% Senior Notes due 2025.
Previous wording
(3)Interest income in 2025 includes $3.0 million from a security that was known as “CRE-2” and which was related to the Company’s discontinued commercial real estate securitization business. CRE-2 was repaid in full in the second quarter of 2025, resulting in a one-time gain of $3.0 million, which was excluded from change due to rate in the above analysis.
Current wording
(2)Interest income in 2025 includes $3.0 million from a security that was known as “CRE-2” and which was related to the Company’s discontinued commercial real estate securitization business. CRE-2 was repaid in full in the second quarter of 2025, resulting in a one-time gain of $3.0 million, which was excluded from change due to rate in the above analysis.
Previous wording
For the six months ended June 30, 2026 compared to six months ended June 30, 2025, average interest-earning assets increased $391.2 million, reflecting a $964.9 million increase in average loans and leases and a $169.3 million increase in average investment securities, partially offset by a decrease in average interest-earning deposits of $743.0 million. For those respective periods, average deposits and liabilities increased $504.4 million, primarily driven by a $224.3 million increase in short-term borrowings and a $100.0 million increase in senior debt.
Current wording
For the nine months ended September 30, 2026 compared to nine months ended September 30, 2025, average interest-earning assets increased $639.0 million, reflecting a $1.1 billion increase in average loans and leases and a $166.8 million increase in average investment securities, partially offset by a decrease in average interest-earning deposits of $578.2 million. For those respective periods, average deposits and liabilities increased $774.7 million, primarily driven by a $388.5 million increase in average deposits, a $305.8 million increase in short-term borrowings and an $85.0 million increase in senior debt.
Previous wording
Our net interest margin (calculated by dividing net interest income by average interest-earning assets) for the six months ended June 30, 2026 was 3.86% compared to 4.25% for the six months ended June 30, 2025, a decrease of 39 basis points. The average yield on interest-earning assets decreased 72 basis points, due to the shift of our portfolio mix to more fintech loans where we primarily earn fee income as discussed further under “Growth of Fintech Lending”above, plus lower market short-term interest rates. In addition, the cost of deposits and interest-bearing liabilities decreased 39 basis points, or a net change of 33 basis points, driven primarily by a 55 basis point decrease in average rate on deposits primarily due to a lower rate environment in the six months ended June 30, 2026.
Current wording
Our net interest margin (calculated by dividing net interest income by average interest-earning assets) for the nine months ended September 30, 2026 was 3.82% compared to 4.32% for the nine months ended September 30, 2025, a decrease of 50 basis points. The average yield on interest-earning assets decreased 74 basis points, due to the shift of our portfolio mix to more fintech loans where we primarily earn fee income as discussed further under “Growth of Fintech Lending”above, plus lower market short-term interest rates. In addition, the cost of deposits and interest-bearing liabilities decreased 31 basis points, or a net change of 43 basis points, driven primarily by a 47 basis point decrease in average rate on deposits primarily due to a lower rate environment in the nine months ended September 30, 2026.
Previous wording
Our provision for credit losses was $53.7 million for the six months ended June 30, 2026, a decrease of $37.5 million compared to a provision of $91.2 million for the six months ended June 30, 2025. The decrease is primarily attributable to $34.5 million lower provision for fintech loans driven by improved performance of that loan portfolio. The lower fintech loan provision correlates to a lower amount of related non-interest income from a credit enhancement contractually provided by a third party. Accordingly, there was no related net impact from these amounts. See further discussion of this program in “Financial Condition—Allowance for Credit Loss—Fintech Programs” in MD&A.
Current wording
Our provision for credit losses was $94.3 million for the nine months ended September 30, 2026, a decrease of $42.0 million compared to a provision of $136.3 million for the nine months ended September 30, 2025. The decrease is primarily attributable to $34.3 million lower provision for fintech loans driven by improved performance of that loan portfolio. The lower fintech loan provision correlates to a lower amount of related non-interest income from a credit enhancement contractually provided by a third party. Accordingly, there was no related net impact from these amounts. See further discussion of this program in “Financial Condition—Allowance for Credit Losses—Fintech Programs” in MD&A.
Previous wording
In addition, the provision for credit losses on non-fintech loans was a release of $1.0 million in the six months ended June 30, 2026 compared to provision expense of $2.4 million in the six months ended June 30, 2025. The provision release in the six months ended June 30, 2026 is primarily driven by improvements in credit quality of the direct lease financing portfolio.
Current wording
In addition, the provision for credit losses on non-fintech loans was a release of $0.3 million in the nine months ended September 30, 2026 compared to provision expense of $8.1 million in the nine months ended September 30, 2025. The provision release in the nine months ended September 30, 2026 is primarily driven by improvements in credit quality of the direct lease financing portfolio.
Previous wording
Non-interest income was $145.6 million in the six months ended June 30, 2026, a decrease of $21.8 million compared to $167.4 million in the six months ended June 30, 2025. The decrease between those respective periods is primarily driven by a $34.5 million decrease in fintech loan credit enhancement income, which was partially offset by $8.9 million in higher total fintech fees and $4.8 million of higher other non-interest income.
Current wording
Non-interest income was $231.4 million in the nine months ended September 30, 2026, a decrease of $16.4 million compared to $247.8 million in the nine months ended September 30, 2025. The decrease between those respective periods is primarily driven by a $34.3 million decrease in fintech loan credit enhancement income, which was partially offset by $15.6 million in higher total fintech fees and $4.0 million of higher other non-interest income.
Previous wording
Fintech loan credit enhancement income decreased$17.4 million driven by improved performance of fintech loans, which correlates to a like amount for provision for credit losses on fintech loans. See further discussion above under “Provision for Credit Losses.”
Current wording
Fintech loan credit enhancement income decreased$34.3 million driven by improved performance of fintech loans, which correlates to a like amount for provision for credit losses on fintech loans. See further discussion above under “Provision for Credit Losses.”
Previous wording
Total fintech fees increased $8.9 million, which includes a $2.7 million increase in prepaid, debit card and related fees, or 5.1%, to $54.5 million for the six months ended June 30, 2026, compared to $51.8 million in the six months ended June 30, 2025, driven by higher transaction volume from new clients and organic growth from existing clients. In addition, ACH, card and other payment processing fees increased $1.7 million, or 15.5%, to $12.4 million for the six months ended June 30, 2026, compared to $10.7 million in the six months ended June 30, 2025, reflecting an increase in rapid funds transfer volume. Consumer credit fintech fees increased $4.5 million to $12.1 million for the six months ended June 30, 2026, compared to $7.6 million in the six months ended June 30, 2025, reflecting increased loan volume.
Current wording
Total fintech fees increased $15.6 million, which includes a consumer credit fintech fees increase of $7.8 million to $19.9 million for the nine months ended September 30, 2026, compared to $12.1 million in the nine months ended September 30, 2025, reflecting increased loan volume. Prepaid, debit card and related fees increased $5.2 million, or 6.6%, to $82.5 million for the nine months ended September 30, 2026, compared to $77.3 million in the nine months ended September 30, 2025, driven by higher transaction volume from new clients and organic growth from existing clients. In addition, ACH, card and other payment processing fees increased $2.7 million, or 17.0%, to $18.5 million for the nine months ended September 30, 2026, compared to $15.8 million in the nine months ended September 30, 2025, reflecting an increase in rapid funds transfer volume.
Previous wording
Other non-interest income increased $4.8 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily driven by $2.5 million higher other fee income from loans and $1.6 million of fees earned on deposit sweeps.
Current wording
Other non-interest income increased $4.0 million for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, primarily driven by $3.1 million higher other fee income from loans and $2.2 million of fees earned on deposit sweeps, partially offset by $2.3 million recognized in third quarter of 2025 from the forfeiture of an earnest money deposit for a terminated OREO sale agreement.
Previous wording
Income tax expense was $38.9 million for the six months ended June 30, 2026 compared to $37.9 million in the six months ended June 30, 2025. Our effective tax rate was 24.4% and 24.5% in the six months ended June 30, 2026 and 2025, respectively, based on a 21% federal tax rate and the impact of various state income taxes.
Current wording
Income tax expense was $47.9 million for the nine months ended September 30, 2026 compared to $56.1 million in the nine months ended September 30, 2025. Our effective tax rate was 20.7% and 24.6% in the nine months ended September 30, 2026 and 2025, respectively, based on a 21% federal tax rate and the impact of various state income taxes. The nine months ended September 30, 2026 was favorably impacted by purchased tax credits.
Previous wording
The following table presents a summary of our available-for-sale investment securities, by major category:
Current wording
The following table presents a summary of our available-for-sale investment securities, by major category (dollars in thousands):
Previous wording
(2) As of June 30, 2026 and December 31, 2025, Other loans includes $110.0 million and $110.7 million, respectively, related to warehouse financing of REBL loan sales to third-party purchasers.
Current wording
(2) As of September 30, 2026 and December 31, 2025, Other loans includes $109.9 million and $110.7 million, respectively, related to warehouse financing of REBL loan sales to third-party purchasers.
Showing the first 40 of 82 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Our total loan portfolio also includes the Fintech loans generated by the Fintech Solutions business. The loans in our non-fintech portfolio are secured by collateral, and the fintech loans are backed by credit enhancement agreements from our partners.
Current report — wording carried from elsewhere
Other Funding Sources. While consumer deposit accounts, including prepaid and debit card accounts, comprise the vast majority of our funding sources, we maintain secured borrowing lines with the FHLB and the Federal Reserve that are collateralized by pledged loans and investment securities. Average short-term borrowings increased by $466.3 million to $511.3 million for the third quarter of 2026 compared to $45.1 million in the third quarter of 2025, as we utilized more short-term borrowings to fund growth in our loan portfolio.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
(3)Interest income in the second quarter of 2025 includes $3.0 million from a security that was known as “CRE-2” and which was related to the Company’s discontinued commercial real estate securitization business. CRE-2 was repaid in full in the quarter resulting in a one-time gain of $3.0 million, which was excluded from change due to rate in the above analysis.
Previous report — wording carried elsewhere
Other non-interest income increased $2.1 million for the second quarter of 2026, compared to the second quarter of 2025, primarily driven by $1.3 million higher other fee income from loans and $0.7 million of fees earned on deposit sweeps.
Previous report — wording carried elsewhere
Fintech loan credit enhancement income decreased$34.5 million driven by improved performance of fintech loans, which correlates to a like amount for provision for credit losses on fintech loans. See further discussion above under “Provision for Credit Losses.”