管理層發言
Hello, everyone. Thank you for joining us, and welcome to The Bancorp, Inc. Second Quarter 2026 Earnings Conference Call. I will now hand the conference over to Andres Viroslav. Andres, please go ahead.
Thank you, operator. Good morning, and thank you for joining us today for The Bancorp's Second Quarter 2026 Financial Results Conference Call. On the call with me today are Damian Kozlowski, Chief Executive Officer; and Dominic Canuso, our Chief Financial Officer. This morning's call is being webcast on our website at https://www.thebancorp.com. There will be a replay of the call available via webcast on our website beginning at approximately 12:00 p.m. Eastern Time today. Before I turn the call over to Damian, I would like to remind everyone that our comments and responses to questions reflect management's view as of today, July 31, 2026. Yesterday, we issued our second quarter earnings release and updated investor presentation. Both are available on our Investor Relations website. We will make certain forward-looking statements on this call; these statements are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially from the expectations and assumptions we mentioned today.
These factors and uncertainties are discussed in our reports and filings with the Securities and Exchange Commission. In addition, we will be referring to certain non-GAAP financial measures during this call. Additional details and reconciliations of GAAP to adjusted non-GAAP financial measures are in the earnings release. Please note that The Bancorp undertakes no obligation to publicly release the results of any revisions to forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Now I'd like to turn the call over to The Bancorp's Chief Executive Officer, Damian Kozlowski. Damian?
Thank you, Andres. Good morning, everyone. The Bancorp earned $1.45 a share in the second quarter. EPS growth year-over-year was 14.2%. ROE was 34.7%, continuing on its upward path. The Bancorp already has an ROE roughly triple the average of the banking industry, and we expect sizable increases over the next three years. Consistent with our capital return philosophy, profitability increases are expected to be returned to our shareholders through share repurchases. In the last 4.5 years, The Bancorp has returned the equivalent of 100% of equity capital back to shareholders through buybacks. We expect that time frame to decrease to around three years over the next three years. After that, buying back the equivalent of our capital base in two years or less is a reasonable forecast. This results in annual EPS accretion of approximately 5% to 10% depending on the price of shares purchased and before our projected increase in net income, which should result in dramatic EPS accretion over the next five years.
Fintech GDV continues to grow significantly above trend at 22.5% year-over-year for the second quarter of 2026. Fintech revenue growth in the quarter, which includes both fee and spread revenue, was 21% year-over-year. Our three main fintech initiatives that underpin our Apex 2030 strategy continue to progress quickly and are well positioned for substantial long-term success. Our onboarding of new programs and expansion of current programs continues within or exceeding our targets. The Cash App program is now ramping up and should start contributing to GDV growth and profitability over the coming quarters with more material contributions coming in late Q4 and Q1 of 2027. Credit sponsorship balances continue to surpass our expectations. We anticipate announcing two new programs that, subject to implementation timing and other customary factors, would be expected to come online in the next six months.
Embedded finance platform development continues with significant progress in building a robust integrated platform connected to our one-of-a-kind ecosystem. We should soon make an announcement on our first embedded finance partner. Lastly, we're increasing our full year guidance to a range of $5.95 to $6.05 EPS for 2026. We are targeting a range of $1.65 to $1.75 a share in the fourth quarter of 2026 and we are maintaining a preliminary guidance for 2027 of $8.10 to $8.30 a share. Our guidance in 2026 and 2027 includes anticipated stock buybacks. 2026 buybacks are forecast to be $200 million in total or $50 million a quarter, and we forecast future share repurchases to be near 100% of annual net income. We expect that our three main fintech initiatives along with platform efficiency and productivity gains from restructuring and AI tools, plus a high level of capital returned through buybacks will be the driving forces behind continued EPS accretion. EPS gains are subject to development and implementation timelines in fintech and our stock price for any future buybacks. And now I'll turn the call over to our CFO, Dominic Canuso. Dominic?
Thank you, Damian. The second quarter was a very strong quarter, topping off record level earnings for the first half of the year and positioning us well to achieve our expectations for the second half of 2026 and full year 2027. While ending loans were down from the first quarter, this was due to a change in month-end customer billing cycle and payment due dates with our lending partner. This does not affect customer performance or our economics. Average loans for the quarter of $7.63 billion increased 5%, not annualized, from the first quarter and 16% compared to the second quarter of 2025. Average fintech loans in the quarter were $1.39 billion or 18% of average total loans, up from 15% in the first quarter and 8% in the second quarter of 2025. Our strategy is to continue to shift the loan mix towards the higher velocity, higher returning credit sponsorship business. Average deposits increased $97 million or 1.2% not annualized from the first quarter and $357 million or 4.4% from the second quarter of last year.
The average cost of deposits decreased 7 basis points in the quarter to 1.63%, which is 55 basis points lower than the second quarter of 2025. We ended the quarter with $1.1 billion in net deposits swept off the balance sheet, which is down 16% from the first quarter due to seasonality but up 32% from year-end 2025. While there may be quarter-to-quarter fluctuations in our off-balance-sheet sweeps due to seasonality or other factors, due to the strength of our partnership model and their growth, we expect this to increase over time. NIM of 3.85% in the second quarter was relatively flat with the first quarter and consistent with expectations. Our fintech lending fees, which are recognized as fee revenue, generate an equivalent to an additional 28 basis points of NIM compared to 24 basis points in the prior quarter and 18 basis points in the second quarter of 2025. In addition, we generated $680,000 in fee revenue from our deposit sweeps, which would equate to 3 basis points of additional NIM.
Noninterest income, excluding credit enhancement, was $47.3 million, an 8.2% increase not annualized compared to the first quarter and 16.7% versus the prior year quarter. This equates to 34.3% of total revenue with 29.7% of total revenue coming from fintech fees, up 1 percentage point from the first quarter and 4 percentage points from the second quarter of 2025. As I mentioned last quarter, growth in credit sponsorship loans is a leading indicator of fintech fees due to the velocity of the portfolio and was demonstrated in the growth in fintech fees in the quarter, including the 17% nonannualized growth from the first quarter, specifically from the consumer credit fintech fee line. Credit performance was strong across all asset classes with continued improvements in REBL and leasing. REBL criticized loans were down another $13 million or 22% to $46 million, the lowest level since mid-2023.
When excluding the fintech credit sponsorship loans, which are supported by full credit enhancement, our traditional lending portfolio saw a provision of $0.4 million in the quarter, consistent with the loan growth and overall credit performance from the traditional lending portfolio. Noninterest expense in the quarter was $56.5 million with an efficiency ratio of 41%. Costs continue to be managed prudently, generating continued positive operating leverage driven by our investments in AI, repositioning our revenues towards fintech and the demonstrated scale of our fintech platform. Operator, you may now open the call for questions.
分析師問答
Your first question comes from the line of Joe Yanchunis with Raymond James.
So I was hoping to start with the fintech loans. Can you provide a little more detail on the payment timing dynamic that you called out that impacted the period-end balances? And should we think of average balances as a better indicator of the underlying trajectory? And do you expect the period-end balance to normalize over the next couple of quarters?
Yes. It doesn't affect our economics, but Dominic will go into detail.
Sure. Thanks, Joe. Yes, I would say, overall, average balances in each quarter are more indicative of our economics because traditionally, the fintech lending products are short-term in nature and are affected by seasonality. With that said, this was a one-time change, particularly with the fintech lending product where we actually accelerated the payment due date by one day to align with the terms and conditions with the customer. So there was no contractual change, no change with our customer performance and no change in our economics. And you saw that in both the loans stepping down and deposits on an ending balance basis. From here, it's normalized. So this was a one-time change. While average balances will be more indicative of economic performance, the ending balance from here forward will also be in line with the change in average balances.
Got it. I appreciate that. And then you mentioned expecting two additional sponsored lending programs to come online over the next couple of quarters. Can you help us think about the characteristics of those programs? Are they going to be similar to Chime and be balance sheet intensive or something a little more higher velocity that drives fee income?
No, they will be much higher velocity. Our Chime relationship is extremely synergistic, and these will not use the balance sheet in the same way that Chime does. They will be very structured and with partners you will know. They will be similar types of loan products, though we'll have changes as we go forward in different categories.
Got it. So would that volume show up under GDV then?
Well, no, the loans will be booked as loans, of course, and there may be some spend in these programs off the back of the loans in certain cases. But no, they will be booked in the fintech loan line and may have some ancillary impact on GDV.
Understood. And then last one for me here. Just kind of want to talk about your outlook for a moment. You made a couple of tweaks to the fourth quarter number and reiterated your preliminary 2027 outlook. Can you walk us through some of the factors behind the change in the fourth quarter number?
Sure. Yes, I would say this was a minor change in our expectations, and it really comes down to honing in on the timing of that pipeline that we just talked about, which is why we reiterated our 2027 expectations. From our perspective, we continue to anticipate a ramp-up in profitability from the second quarter to the fourth quarter and the ability for that step-off point to hit our 2027 target. So the changes to that range are really a function of aligning with the phasing of onboarding and the growth anticipated from those programs.
Your next question comes from the line of Tim Switzer with KBW.
The first one I have is on net interest margin—or maybe more appropriately NII for you guys. How should we think about the trajectory of NII going forward and the potential impact of Fed rate hikes? What's the impact of higher rates on your loan yields now that that portfolio has changed a little bit?
Dominic will go into detail, but we're fairly neutral on the balance sheet. We're slightly asset sensitive on that side, so rate hikes won't really help us that much, but they will definitely not hurt us.
Sure. Just to hone in on that, we try to manage to an interest rate neutral position. However, there could be some intra-month or intra-quarter impact from the timing of any Fed rate changes due to the timing in which they impact loans versus deposit repricing resets. But over a quarter or two, it's a very neutral impact, and we've been disciplined in managing to that level. From an NII perspective, as we look through the rest of the year, I would say on a dollar basis it's relatively neutral. We should see some compression in NIM as we migrate further to fintech lending, but that should be offset by continued strength in traditional lending average balances for the second half of the year. On a NIM equivalent basis, like you saw this quarter, we may see a slight tick down in that traditional calculation of NIM, but when you normalize for the fintech lending fees like we saw this quarter, when incorporating those, it actually blended up a couple of basis points. In summary, NII should be nearly flat for the second half of the year with a step down in NIM and a slight flat-to-up on the NIM equivalent.
Very helpful. On the card fees, good to see some of the acceleration in GDV. Is there any color on how much was driven by Square, Cash App and the other new programs versus legacy ones? And Damian, in your comments about Cash App making a more significant contribution in late Q4 and Q1 of next year—that seems like it changed from your commentary previously about the second half of this year. Is that a delay, or are other programs making up for it right now?
Cash App is very unique because of the potential volume there; it's an ongoing program and very large compared to the portfolio, so it can produce a lot of incremental growth. It's impacting us now and will ramp through the end of the year. It will have a meaningful impact on GDV as we approach the end of the year. We don't provide program-by-program detail; we'll let the programs comment on their own growth. But the growth is very broad-based across our 15 verticals: virtual, neobank, virtual wallet, health care, corporate payments—it's across the board.
Okay. So if I'm interpreting correctly, the acceleration would have happened regardless of Cash App's further acceleration over the course of the year, quarter-over-quarter?
Yes. There's very little Cash App in the current quarter number—maybe up one percentage point or less at this point—but it's quickly ramping and should start to affect GDV as we approach the end of the year.
I know this has been a common discussion point recently: you have some prominent partners who have applied for a bank charter, others who have indicated they may eventually apply. Could you provide examples of how Bancorp could still provide BaaS services to companies with an ILC or other type of charter and what those partnerships could look like?
We provide a very scalable infrastructure. Many segments, such as corporate payments or healthcare, will never be a bank. For neobanks, we're providing an incredibly scalable middle-office platform that can't be replicated easily. The cost to replicate it is enormous, and we're a small expense on their financial lines. You enter our ecosystem and benefit from scale and sophistication hard to replicate. It takes a very long time to build these platforms correctly. You lose information and sophistication with regulators if you try to replicate. We don't think it will impact us in the near- to medium-term. As we continue to build scale and efficiency, we can add value to those regardless of the license. We think we can add substantial value to these large programs.
Tim, just to add, one consideration is the velocity of loans generated, particularly by neobanks. Having their own balance sheet allows them to be the buyer of first choice and control the economics around holding loans. To the extent there are partners with bank charters that want to hold loans, we actually see that as a potential benefit because as velocity increases, we are looking to off-balance-sheet these loans over time as we grow that business, and it would be logical for that partner, if they had a charter, to hold their own loans after we originate and go through our compliance efficiencies. So we think there could be a net benefit in that situation.
To make sure I understand your point here, it would make a lot of sense for Bancorp to still be the originator of these loans for a lot of the neobanks because you have the regulatory expertise. Damian, going back to your comment about how expensive it is to build this infrastructure and your investment over five-plus years, could you go into that just a little bit behind it, please?
It's very expensive. Over the last ten years, we've spent well north of $100 million just for the base platform. And that's every year—you keep investing to build for the future, and that adds up. It's not just the amount of money; it's the time it takes. It takes multiple years to build a platform robust enough to handle the broad middle office, compliance, regulatory relationships and the tech stack. We've invested to have best-in-class capability over ten years. To catch up in a shorter timeframe costs a lot more. If you're going to do it in three years, your costs balloon. This has been seen when people try to build it elsewhere: the shorter the time, the higher the cost and the lower the quality initially. It starts as a multi-year, often three- to five-year project and requires increased upfront investment, which has a significant premium to what we charge. The payback on that investment, and you're going to get less quality, especially early on. So there's real value we bring; the investment is prohibitive to get to where we are. And you'll never get to our scale; the unit economics we achieve across our portfolio are difficult to replicate.
Just to add a finer point to that, there is a significant benefit to all of our partners from what we call the halo effect. We're at roughly $200 billion of GDV in the last 12 months, so our ability to see across payment types, partners, programs and ongoing fraud and financial crimes allows us to transfer benefits across all partners—that's not achievable with one program or a few programs. We have added slides in our investor presentation, particularly Slide 11, that demonstrate the scale and efficiency of our platform on a cost-per-GDV basis and our ability to improve operating leverage and increase it over time, which again underscores the difficulty of replication.
Your next question comes from the line of Manuel Navas with Piper Sandler.
Talk about the fintech loan balances. Is the target still the same in terms of growth by the end of the year? How would you judge the progression of growth so far this year? It's $1.4 billion on an average basis—should that be the number we grow from in the third quarter?
I would say we do expect that to continue to improve both with our existing partners and the pipeline. The exact amount is a function of the timing of the launch of partners and the velocity and product that are launched, so we do expect it to increase. We talked about working towards a $2 billion level by the end of this year. We expect to work towards that; however, we could have programs that just have higher velocity and lower average balances, but ultimately deliver the fourth quarter expectations and full year 2027 outlook that we've provided.
Just to confirm on the client side, was there any disruption in services from this payment date processing shift?
Not at all. It was just an acceleration of a couple of days of the payment from the credit builder Chime card product to align with the actual terms and conditions. It was seamless and effectively unnoticeable. It just changed the ending balance by one or two days depending. Again, no change in economics, customer impact, customer terms or performance.
Okay. The progression and growth of that program is going as expected outside of these nuts-and-bolts items, but progression continues well?
Absolutely. It's on, if not better than, expected as you've seen in the average balance growth demonstrated in the quarter.
You still have the range on 2027. Based on this quarter's results and your progression with programs expected to hit, what are the updated factors driving the low end or the high end of the '27 EPS guide?
At the end of the day, the range we're talking about is $0.20 on $8, so it's an incredibly small range from a percentage perspective and captures the recognition of significant growth from where we are today to the fourth quarter into a full year of next year. It recognizes the fact that our pipeline is strong and that the exact timing, launch and phasing of those programs have some variability to it. We're comfortable with that because when we launch new products and partners we want to be disciplined with the right controls and enterprise risk management around it. The range we're offering is very tight and demonstrates that while there could be some phasing, the overall economics and growth in ROA and ROE are expected to be significantly above this year.
The next question comes from Joe Yanchunis with Raymond James.
As sponsored lending becomes a larger part of the balance sheet, can you discuss how the framework for monitoring fintech counterparties has evolved? Beyond credit enhancements, what ongoing financial, liquidity or operational metrics do you track to ensure your partners remain capable of supporting their obligations?
First, remember we're dealing with very large enterprises, many of which are public, so the disclosure is extensive. We go through a very rigorous process around partners and third-party risk management. We delve into understanding their liquidity, business plans, metrics, expected marketing spend. We get full disclosure of not only their current financial position but their future forecast, and we test that. We monitor it very closely and ensure the partner has the wherewithal to continue business and build. We do disengage when necessary and do it early; we don't wait until we have an impact. We take a proactive, high-scrutiny, continuous approach through our third-party risk management process.
And could you provide an update on your AI initiatives? Are the productivity gains still tracking in line with expectations, and where do you see the next opportunities for AI?
It's incredibly exciting. The improvement in AI has been dramatic over the last year. It's impacting us in two ways: enterprise-level empowerment where our people are getting more productive and their jobs more interesting, and specific use cases such as financial crimes where we have AI-empowered narrative writing capability that's improving monthly and making our people much more productive. This helps us manage staffing while increasing productivity. We're growing GDV four to six times what the market is growing, and we're able to handle the new volume by using these tools. We're embedding AI both at the enterprise level and in specific use cases, and it's having a dramatic impact on our ability to grow and control expenses.
Your next question comes from the line of Arif Gangat with Cygnus Capital.
I had a question about the debt balance on the balance sheet. It increased meaningfully both sequentially and year-over-year. Could you share your thinking around funding the business with additional debt and if we should expect that to continue?
Dominic, do you want to handle that?
Sure. Year-over-year increases were impacted by the upsizing of debt issuance in late 2025, which was strategic as we saw an opportunistic position to raise debt, repurchase our shares and have an accretive impact for shareholders. That has played out meaningfully and aligns with our capital return philosophy. The quarter-over-quarter increase was more related to some short-term borrowings for liquidity as we manage the balance sheet. We're focused on optimizing returns and have significant access to borrowing. Ninety-five percent of our deposits are from fintech and FDIC-insured—they're stable, granular and low cost. We have $1.1 billion of deposits off balance sheet that we can pull back and optimize to fund the business and/or generate revenue. More than 50% of our deposit base is in readily accessible borrowings at market costs. Strategically, we expect fintech to continue to grow deposits, and we see ample opportunity to continue to fund the business without taking on long-term debt. Any short-term borrowings would be to fund intra-month or intra-quarter seasonality.
Sequentially, debt went up roughly $265 million. From a liquidity point of view, given the fintech loan book shrunk on the period-end basis for the reasons you outlined, what drove the liquidity need?
First, the first quarter is a seasonally high deposit-generating quarter, so there's an expectation of a seasonal step-down from first to second quarter. Plus, we saw continued average balance growth on both the traditional lending and fintech sides. The impact from Q1 to Q2 is more seasonal in nature and not a change in business trend. The long-term trend is our ability to fund the business, and we expect for the rest of this year deposit growth to outpace lending growth, which will reduce that short-term borrowing. We have many levers to optimize liquidity. The cost and access to liquidity are incorporated into our expectations for continued earnings and EPS growth reflected in our guidance.
Thanks. A few questions on the REBL portfolio. The 10-Q is not filed yet, but ballpark, how much of the REBL book do you expect to mature within the next 12 months?
As a reminder, the REBL portfolio is structured as three-year loans with plus two one-year extensions. Generally, you can expect about a third of the portfolio to churn or be re-done in any given year because of that natural term structure. With continued improvements—the maturation of investments in the loan portfolio, improved loan-to-value and stronger sponsors—we're comfortable with current pricing relative to contractual pricing, and we don't see a credit or price cliff given the short-term nature of the portfolio. We're comfortable with its performance and its expectation to contribute meaningfully on an ROA and ROE basis going forward.
Yes, we did have a bump in the past when we re-entered that business in the early 2020s—the 2022 vintage experienced migrated credit quality due to pandemic-related issues. We've worked through that. Now it's much more normal as we're originating a replacement cycle, so you're getting more normal performance on the portfolio.
If memory serves from March, as of 3/31, just shy of $1 billion was slated to come due. Is it your expectation those loans as they mature would generally be refinanced by external third-party lenders, or would you look to refinance with a new loan to the same sponsor?
We generally don't do the stabilized permanent financing ourselves. These loans are structured with options to extend depending on project completion. Often sponsors will extend for a year or two while they complete their takeout strategy or wait for market timing. Many times, stabilized loans are refinanced by other banks or agencies that provide that permanent financing. We accommodate extensions as appropriate; ultimately it's often the sponsor's decision, and that's built into the structure of the credits.
Lastly, could we have an update on the status of Aubrey stabilization and how you're thinking about getting that asset out of OREO?
It's past 70% occupancy. There's a lot of buildings at the site, but we're down to the last few buildings and we're in three phases of renovation for those. We're well north of 70% of the buildings completed. The appraisal is now well above 50% and our basis is in the low 40s. We're at the point where we'll get to a stabilized takeout. This is a different market than a financial sponsor; a lot of work has been done. We're at breakeven and as occupancy continues, it will move to profit positive rather than a drag. We expect completion and stabilization from the first quarter forward.
We have reached the end of the Q&A session. I will now turn the call back to Damian Kozlowski for closing remarks.
Thank you, everyone, for joining us on the call today. We will be attending various investor conferences during the third quarter, and we'll be on the road with investors in the coming weeks. We look forward to meeting with many of you throughout the quarter. Thank you, operator. You may discontinue the call.
This concludes today's call. Thank you for attending. You may now disconnect.