Executive Summary

Q1 2025 EPS came in at $1.19, up 12% y/y but below S&P Global consensus of $1.24 (3 estimates), as NIM compressed to 4.07% (vs 5.15% y/y; 4.55% q/q) amid a mix-driven uptick in deposit costs and lower loan yields; management reaffirmed FY25 EPS guidance of $5.25 . EPS actual $1.19 vs consensus $1.2367* (S&P Global); NIM drivers discussed by management .
Revenue (S&P Global basis) beat: $128.53M actual vs $107.72M consensus*, supported by 26% growth in total fintech fees and recognition of offsetting consumer fintech credit enhancement income; ex-credit enhancement, noninterest income rose 29% y/y to $37.8M and GDV rose 18% y/y to $44.65B .
Fintech credit sponsorship balances reached ~$574M at quarter-end (up 26% q/q), with management expecting >$1B by YE25; fees largely flow through noninterest income today, with some programs migrating to interest income over time .
Asset quality remained stable in core books; REBL criticized assets are at/near peak and expected to decline over coming quarters; OREO sale remains on track pending buyer-related ownership change, with management still confident in closing .
Potential stock catalysts: confirmed FY25 EPS guide of $5.25, expected NIM improvement in Q2 as higher-cost insurance-related deposits roll off and offloading of higher-cost deposits continues, and accelerating fintech credit sponsorship trajectory .

What Went Well and What Went Wrong

What Went Well

Fintech growth and monetization: GDV +18% y/y to $44.65B, fintech fees +26% y/y (ACH/card/other +13% to $30.8M; consumer credit fintech fees $3.6M), reflecting organic partner growth and new client adds .
Credit sponsorship scaling: Balances up ~26% q/q to ~$574M; management expects >$1B by YE25; CFO reiterated offsetting accounting (provision and credit enhancement income equal) with no net EPS impact this quarter .
Capital and deposit quality: 95% of deposits estimated insured; leverage ratio 8.93% at HoldCo; average deposits +28% y/y to $8.31B, supporting liquidity and growth .

“Fintech Solutions continues to show significant momentum in both GDV (up 18% year-over-year) and fee growth (up 26% year-over-year). We are confirming guidance of $5.25 a share for 2025.” — CEO, Damian Kozlowski .

What Went Wrong

EPS miss vs consensus amid NIM compression: NIM fell to 4.07% (vs 5.15% y/y; 4.55% q/q) as loan yields fell more than deposit costs; deposit mix included a ~$500M insurance-settlement related surge that temporarily lifted funding costs .
NII down 3% y/y to $91.7M as rates drifted lower in late 2024 and consumer fintech balances shift economics toward fees (noninterest income), mechanically pressuring reported NIM despite profitability .
Efficiency deteriorated: Efficiency ratio rose to 41% from 38% y/y (non-GAAP definition excluding credit enhancement), as operating expenses grew with scaling payments/compliance/IT and incentive comp .

Financial Results

Headline Actuals vs Consensus and Prior Periods

Metric	Q1 2024	Q4 2024	Q1 2025	Consensus (Q1 2025)
Diluted EPS ($)	$1.06	$1.15	$1.19	$1.2367*
Revenue ($M, S&P Global basis)	—	—	$128.53*	$107.72*
Net Interest Margin (%)	5.15%	4.55%	4.07%	—
Net Interest Income ($M)	$94.42	—	$91.74	—
Noninterest Income ($M, total GAAP)	$29.38	—	$83.64	—
Noninterest Income ex-credit enhancement ($M, management view)	$29.38	$34.7	$37.77	—

Notes: “Consensus” metrics from S&P Global; see Estimates Context for details. Ex-credit enhancement noninterest income per company methodology (credit enhancement income equals provision, offsetting P&L impact) .

Profitability and Returns

Metric	Q1 2024	Q1 2025
ROA (annualized)	2.97%	2.49%
ROE (annualized)	27.95%	28.64%
Efficiency Ratio (non-GAAP)	38%	41%

Fintech KPIs and Payments

KPI	Q1 2024	Q4 2024	Q1 2025
GDV ($B)	$37.94	$39.66	$44.65
ACH, card and other payment fees ($M)	$2.96	—	$5.13
Prepaid/debit & related fees ($M)	$24.29	—	$25.71
Consumer credit fintech fees ($M)	$0.00	$3.00	$3.60
Total fintech fees ($M)	$27.25	—	$34.45

Balance Sheet and Capital

Metric	Q1 2024	Q4 2024	Q1 2025
Average Deposits ($B)	$6.50	—	$8.31
Est. Insured Deposits (%)	—	—	95%
Total Assets ($B)	$7.92	$8.73	$9.39
Leverage Ratio (The Bancorp, Inc.)	—	9.41%	8.93%
CET1 / Tier 1 RBC / Total RBC (HoldCo)	—	13.85% / 13.85% / 14.65%	13.94% / 13.94% / 14.86%

Segment/Business Line Snapshot (Balances; yoy growth where provided)

Business Line	Balance ($M)	YoY Growth	Notes
Institutional Banking (SBLOC/IBLOC/Advisor)	1,843	+3%	~6.1% avg yield Q1
Small Business Lending (incl. FV)	1,009	+12%	Majority SBA; FV government-guaranteed piece $391M
Leasing (Direct Lease Financing)	710	+1%	Vehicle-heavy; diversified by state/sector
Real Estate Bridge Loans (REBL)	2,212	+5%	Workforce multifamily; ~70% origination LTV
Non-SBA CRE at FV	128	n/m	Mostly multifamily
Consumer fintech loans (interest-bearing)	25	n/m	Growing program will aid NIM
Consumer fintech loans (non-interest-bearing)	549	n/m	Economics recognized in fees

Credit Quality and Allowance

Metric	Q1 2024	Q1 2025
Allowance for Credit Losses ($M)	$28.74	$52.50
Net Charge-offs / Avg Loans	0.02%	0.63%
NPLs / Total Loans	1.05%	0.51%
NPAs / Total Assets	0.97%	1.07%

Company emphasized that consumer fintech loan provisions ($45.9M) are offset by equal “credit enhancement” income, net neutral to EPS .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
EPS (Diluted)	FY 2025	$5.25 (affirmed on Q4 call)	$5.25 (confirmed)	Maintained
Share Repurchases (Authorization)	FY 2025	$150M planned in 2025	$150M authorized in 2025 (does not affect EPS guide)	Maintained
Capital Actions (Debt)	2025	Repay ~$96–100M senior secured debt; consider refinancing more for buybacks depending on market	Same plan reiterated; may raise more than repayment to enhance buybacks, subject to Board/market	Maintained/Under Consideration

No quantitative NIM/expense/revenue guidance provided; commentary suggests Q2 NIM improvement as higher-cost insurance-related deposits roll off and higher-cost deposits are offloaded .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024)	Current Period (Q1 2025)	Trend
NIM and Asset Sensitivity	NIM 4.55%; near-term NIM erosion possible as credit sponsorship initially runs through fees; asset sensitivity reduced via ~$900M fixed-rate securities	NIM 4.07%; asset sensitivity targeted near ~1%; Q2 NIM to improve as ~$500M insurance-related deposits roll off and offloading higher-cost deposits continues	Near-term trough, improving into Q2
Fintech Credit Sponsorship	Entered in 2H24; rapid build with YE plan to approach ~$1B in 2025	Balances ~$574M (+26% q/q); >$1B YE25 expected; 4 programs active; mix of fee vs interest income evolving	Accelerating
Payments/GDV Momentum	GDV +19% y/y in Q4; fee growth 29% y/y in Q4	GDV +18% y/y; ACH/card/other +13%; advise viewing combined fee lines vs GDV due to multi-product pricing	Sustained double-digit
Deposit Mix/Costs	Strong deposit growth; average Fintech deposits +16% y/y in Q4	Average deposits +28% y/y; temporary ~$500M insurance settlements lifted deposit costs; expected to roll off	Transient cost headwind, easing
REBL Asset Quality	Substandard down in Q4 via sale/repayments; near peak	At/near peak; expect declines over next several quarters; OREO sale progressing	Improving over time
BaaS/Industry Consolidation	—	Competitor retrenchment creating opportunities to expand large relationships and product set (e.g., embedded finance)	Opportunity set widening

Management Commentary

“The Bancorp earned $1.19 per diluted share… 12% increase over the first quarter of '24… Fintech Solutions Group continues to show significant momentum… We are confirming guidance of $5.25 per diluted share for '25.” — CEO, Damian Kozlowski .
“Net interest income was 3% lower… first quarter NIM of 4.07% compared to 4.55% for the fourth quarter… fees on the majority of our growing consumer fintech loan balances are recorded as noninterest income… Excluding consumer fintech credit enhancement income, noninterest income… was $37.8 million, 29% higher than Q1 2024.” — Interim CFO, Martin Egan .
“Our programs vary… how it’s split between deposit and fees… one of our programs… deposit-based… ballooned in the first quarter due to insurance payments… about $500 million… will roll off.” — CEO, Damian Kozlowski .
“We continue to believe that we are at the peak of substandard assets and believe we will show progress in reducing substandard assets over the next several quarters.” — CEO, Damian Kozlowski .

Q&A Highlights

NIM mechanics and outlook: NIM compressed as loan yields fell more than deposit costs; ~$500M insurance-related deposits temporarily raised costs; management expects NIM improvement in Q2 as these balances roll off and as higher-cost deposits are offloaded .
Credit sponsorship economics: Many programs recognize economics in fees (with 0% deposit cost on balances and ~~5% loan yield equivalent framed as fees); one interest-bearing program (~~$25M at Q4) is growing and will support NIM over time .
Asset sensitivity reduced: Target “slightly asset sensitive” around ~1% after fixed-rate bond purchases; varies with deposit surges .
BaaS consolidation opportunity: Pullbacks at smaller competitors create room to expand with large partners and add products; management sees potential to sustain GDV growth and reach mid-20s CAGR with credit sponsorship .
OREO disposition: Buyer ownership change not expected to derail closing; property performance improving (lease-up ~65–70%); management remains confident .

Estimates Context

Q1 2025 EPS: Actual $1.19 vs consensus $1.2367 (3 est.) — slight miss driven by NIM pressure and mix shift toward fees . EPS actual and consensus from S&P Global*.
Q1 2025 Revenue: Actual $128.53M vs consensus $107.72M (3 est.) — beat aided by stronger noninterest income from fintech fees and recognition of consumer fintech credit enhancement income (offset by provision; net neutral to EPS) . Revenue actual and consensus from S&P Global*.

Values with asterisks (*) are retrieved from S&P Global.

Key Takeaways for Investors

Fintech engine intact: Double-digit GDV and fee growth, plus accelerating credit sponsorship (> $1B YE25 target), underpin reaffirmed $5.25 FY25 EPS guide despite NIM pressure .
Near-term NIM inflection: Q1’s NIM trough reflected temporary insurance-related deposit inflows; management expects Q2 improvement as mix normalizes and as higher-cost deposits are offloaded .
Quality/liquidity strengths: 95% insured deposits and ample contingent liquidity (~$3.09B credit lines) reduce funding/contagion risk; capital above well-cap thresholds .
Accounting optics vs economics: Consumer fintech credit enhancement accounting inflates both provision and noninterest income with no net EPS effect; some programs will migrate more into NII over time, smoothing NIM optics .
Watch REBL de-risking cadence: Management sees criticized assets at/near peak with expected sequential improvement; monitor OREO sale timing and broader multifamily stabilization .
Capital deployment: $150M buyback authorization maintained; potential refinancing to increase repurchase capacity under consideration, subject to market/Board .
Medium-term thesis: Sustained GDV growth and product layering (embedded finance, credit sponsorship diversification) support fee growth resilience; migration of some credit programs to interest-earning should re-accelerate NII/NIM as the model matures .

Appendix: Detailed S&P Global Consensus vs Actuals (Q1 2025)

Metric	Actual	Consensus	Surprise
EPS (Primary)	$1.19*	$1.2367*	-$0.0467*
Revenue ($M)	$128.532*	$107.718*	+$20.814*