Bancorp, Inc. 10-Q

Item 1. Financial Statements THE BANCORP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS June 30, 2026 December 31, 2025 (Dollars in thousands, except share data) (unaudited) ASSETS: Cash and cash equivalents Cash and due from banks $ 9,527 $ 8,038 Interest-earning deposits 70,556 104,611 Total cash and cash equivalents 80,083 112,649 Investment securities, available-for-sale, at fair value 1,614,890 1,671,750 Commercial loans, at fair value 114,162 139,389 Loans, net of deferred loan fees and costs 7,073,906 7,116,676 Allowance for credit losses ( 63,495 ) ( 66,200 ) Loans, net 7,010,411 7,050,476 Stock in Federal Reserve, Federal Home Loan and Atlantic Central Bankers Banks 50,115 25,205 Premises and equipment, net 28,282 29,834 Accrued interest receivable 43,342 43,090 Other real estate owned 62,011 60,695 Deferred tax asset, net 23,491 18,679 Credit enhancement asset 30,733 31,138 Other assets 158,457 169,520 Total assets $ 9,215,977 $ 9,352,425 LIABILITIES: Deposits Demand and interest checking $ 7,353,151 $ 7,827,037 Savings and money market 123,051 338,459 Total deposits 7,476,202 8,165,496 Short-term borrowings 744,000 199,000 Senior debt 196,528 196,253 Subordinated debentures 13,401 13,401 Other long-term borrowings 4,327 13,712 Other liabilities 76,138 74,767 Total liabilities 8,510,596 8,662,629 SHAREHOLDERS' EQUITY: Common stock - authorized, 75,000,000 shares of $ 1.00 par value; 48,805,314 and 41,043,479 shares issued and outstanding, respectively, at June 30, 2026 and 48,404,006 and 42,355,361 shares issued and outstanding, respectively, at December 31, 2025 48,805 48,404 Additional paid-in capital 33,858 24,207 Retained earnings 1,128,093 1,007,368 Accumulated other comprehensive (loss) income ( 3,595 ) 10,839 Treasury stock at cost, 7,761,835 shares at June 30, 2026 and 6,048,645 shares at December 31, 2025 ( 501,780 ) ( 401,022 ) Total shareholders' equity 705,381 689,796 Total liabilities and shareholders' equity $ 9,215,977 $ 9,352,425 The accompanying notes are an integral part of these consolidated statements. 3 Table of Contents THE BANCORP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED ) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (Dollars in thousands, except share and per share data) Interest income: Loans, including fees $ 110,583 $ 112,326 $ 218,128 $ 221,238 Investment securities: Taxable interest 19,924 22,393 39,844 40,520 Tax-exempt interest 156 103 286 186 Interest-earning deposits 1,386 8,326 3,582 21,006 132,049 143,148 261,840 282,950 Interest expense: Deposits 34,334 43,963 69,623 90,338 Short-term borrowings 2,949 5 4,330 5 Long-term borrowings 147 198 344 393 Senior debt 3,917 1,233 7,792 2,467 Subordinated debentures 236 257 471 512 41,583 45,656 82,560 93,715 Net interest income 90,466 97,492 179,280 189,235 Provision (reversal) for credit losses on non-fintech loans 365 1,494 ( 983 ) 2,368 Provision for credit losses on fintech loans 25,766 43,233 54,609 89,101 Provision (reversal) for unfunded commitments ( 42 ) ( 364 ) 64 ( 253 ) Provision for credit losses, total 26,089 44,363 53,690 91,216 Net interest income after provision for credit losses 64,377 53,129 125,590 98,019 Non-interest income: Fintech fees: ACH, card and other payment fees 6,559 5,562 12,355 10,694 Prepaid, debit card and related fees 27,790 26,113 54,467 51,827 Consumer credit fintech fees 6,545 3,970 12,141 7,570 Total fintech fees 40,894 35,645 78,963 70,091 Net realized and unrealized gains on commercial loans, at fair value 130 344 136 705 Leasing related income 1,773 2,131 3,674 4,103 Fintech loan credit enhancement 25,766 43,233 54,609 89,101 Other 4,477 2,390 8,183 3,385 Total non-interest income 73,040 83,743 145,565 167,385 Non-interest expense: Salaries and employee benefits 37,426 37,134 74,903 70,803 Depreciation 1,230 1,125 2,475 2,229 Rent and related occupancy cost 1,668 1,717 3,359 3,285 Data processing expense 1,387 1,227 2,696 2,432 Audit expense 498 545 1,139 1,199 Legal expense 1,221 1,863 2,811 3,820 Legal settlement (reimbursement) — — ( 2,000 ) — FDIC insurance 1,106 1,202 2,357 2,255 Software 5,632 5,144 11,001 10,157 Insurance 1,069 1,145 2,251 2,402 Telecom and IT network communications 292 308 576 641 Consulting 147 436 357 892 Other 4,800 5,377 9,577 10,402 Total non-interest expense 56,476 57,223 111,502 110,517 Income before income taxes 80,941 79,649 159,653 154,887 Income tax expense 20,285 19,828 38,928 37,893 Net income $ 60,656 $ 59,821 $ 120,725 $ 116,994 Net income per share - basic $ 1.46 $ 1.28 $ 2.89 $ 2.49 Net income per share - diluted $ 1.45 $ 1.27 $ 2.86 $ 2.46 Weighted average shares - basic 41,461,889 46,598,535 41,795,740 46,904,592 Weighted average shares - diluted 41,794,160 47,182,770 42,180,516 47,565,580 The accompanying notes are an integral part of these consolidated statements. 4 Table of Contents THE BANCORP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (Dollars in thousands) Net income $ 60,656 $ 59,821 $ 120,725 $ 116,994 Other comprehensive (loss) income, net— Investment securities available for sale: Change in net unrealized (loss) gain ( 9,407 ) 4,598 ( 19,247 ) 25,660 Income tax (benefit) expense related to items of other comprehensive income ( 2,353 ) 1,149 ( 4,813 ) 6,414 Other comprehensive (loss) income, net ( 7,054 ) 3,449 ( 14,434 ) 19,246 Comprehensive income $ 53,602 $ 63,270 $ 106,291 $ 136,240 The accompanying notes are an integral part of these consolidated statements. 5 Table of Contents THE BANCORP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) (Dollars in thousands, except share data) For the three and six months ended June 30, 2026 Common stock shares issued Common stock Additional paid-in capital Retained earnings Accumulated other comprehensive income (loss) Treasury stock Total Balance at January 1, 2026 48,404,006 $ 48,404 $ 24,207 $ 1,007,368 $ 10,839 $ ( 401,022 ) $ 689,796 Net income — — — 60,069 — — 60,069 Common stock issued from restricted units, net of tax benefits 346,245 346 ( 346 ) — — — — Stock-based compensation — — 4,755 — — — 4,755 Other comprehensive loss net of reclassification adjustments and tax — — — — ( 7,380 ) — ( 7,380 ) Common stock repurchases and excise tax (1) — — — — — ( 50,290 ) ( 50,290 ) Balance at March 31, 2026 48,750,251 48,750 28,616 1,067,437 3,459 ( 451,312 ) 696,950 Net income — — — 60,656 — — 60,656 Common stock issued from restricted units, net of tax benefits 55,063 55 ( 55 ) — — — — Stock-based compensation — — 5,297 — — — 5,297 Other comprehensive loss net of reclassification adjustments and tax — — — — ( 7,054 ) — ( 7,054 ) Common stock repurchases and excise tax (1) — — — — — ( 50,468 ) ( 50,468 ) Balance at June 30, 2026 48,805,314 $ 48,805 $ 33,858 $ 1,128,093 $ ( 3,595 ) $ ( 501,780 ) $ 705,381 (1) For the three months ended March 31, 2026 and June 30, 2026, common stock repurchases include 843,061 and 870,129 , respectively, of shares repurchased in connection with the Company's share repurchase program approved by the Board of Directors. See Note 8. Shareholders’ Equity for further information. The accompanying notes are an integral part of these consolidated statements. 6 Table of Contents THE BANCORP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) (CONTINUED) (Dollars in thousands, except share data) For the three and six months ended June 30, 2025 Common stock shares issued Common stock Additional paid-in capital Retained earnings Accumulated other comprehensive income (loss) Treasury stock Total Balance at January 1, 2025 47,713,481 $ 47,713 $ 3,233 $ 779,155 $ ( 17,637 ) $ ( 22,681 ) $ 789,783 Net income — — — 57,173 — — 57,173 Common stock issued from restricted units, net of tax benefits 353,697 354 ( 354 ) — — — — Stock-based compensation — — 4,591 — — — 4,591 Other comprehensive income net of reclassification adjustments and tax — — — — 15,797 — 15,797 Common stock repurchases and excise tax (1) — — — — — ( 37,657 ) ( 37,657 ) Balance at March 31, 2025 48,067,178 48,067 7,470 836,328 ( 1,840 ) ( 60,338 ) 829,687 Net income — — — 59,821 — — 59,821 Common stock issued from restricted units, net of tax benefits 36,828 37 ( 37 ) — — — — Stock-based compensation — — 5,175 — — — 5,175 Other comprehensive income net of reclassification adjustments and tax — — — — 3,449 — 3,449 Common stock repurchases and excise tax (1) — — — — ( 37,866 ) ( 37,866 ) Balance at June 30, 2025 48,104,006 $ 48,104 $ 12,608 $ 896,149 $ 1,609 $ ( 98,204 ) $ 860,266 (1) For the three months ended March 31, 2025 and June 30, 2025, common stock repurchases include 753,898 and 684,445 , respectively, of shares repurchased in connection with the Company's share repurchase program approved by the Board of Directors. See Note 8. Shareholders’ Equity for further information. The accompanying notes are an integral part of these consolidated statements. 7 Table of Contents THE BANCORP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Six Months Ended June 30, 2026 2025 (Dollars in thousands) Operating activities: Net income $ 120,725 $ 116,994 Adjustments to reconcile net income to net cash provided by operating activities Depreciation 2,475 2,229 Provision for credit losses, total 53,690 91,216 Fintech loan credit enhancement income ( 54,609 ) ( 89,101 ) Accretion of fees, premiums, and discounts, net ( 2,368 ) ( 1,137 ) Stock-based compensation expense 10,052 9,766 Realized gains on commercial loans, at fair value ( 136 ) ( 705 ) Gain on sale of fixed assets ( 38 ) ( 7 ) (Increase) decrease in accrued interest receivable ( 252 ) 1,106 (Increase) decrease in other assets ( 10,600 ) 19,127 Increase (decrease) in other liabilities 1,166 ( 4,425 ) Net cash provided by operating activities 120,105 145,063 Investing activities: Purchase of investment securities available-for-sale ( 9,113 ) ( 53,071 ) Proceeds from redemptions and prepayments of securities available-for-sale 49,068 125,978 Capitalized investment in other real estate owned ( 540 ) ( 1,756 ) Sale of repossessed assets 1,269 2,600 Proceeds from sale of other real estate owned 180 — Net increase in loans ( 18,655 ) ( 505,136 ) Credit enhancement agreement cash inflows 55,014 75,028 Proceeds from sale of fixed assets 49 121 Commercial loans, at fair value drawn during the period ( 133 ) ( 2,953 ) Payments on commercial loans, at fair value 16,176 41,174 Purchases of premises and equipment ( 934 ) ( 1,272 ) Net cash provided by (used in) investing activities 92,381 ( 319,287 ) Financing activities: Net (decrease) increase in deposits ( 689,294 ) 19,889 Proceeds from short-term borrowings 545,000 — Repurchases of common stock and excise tax ( 100,758 ) ( 75,523 ) Net cash used in financing activities ( 245,052 ) ( 55,634 ) Net decrease in cash and cash equivalents ( 32,566 ) ( 229,858 ) Cash and cash equivalents, beginning of period 112,649 570,123 Cash and cash equivalents, end of period $ 80,083 $ 340,265 Supplemental cash flow information: Interest paid $ 83,488 $ 95,231 Transfers (from) to other real estate owned from commercial loans, at fair value, and loans, net $ 956 $ 2,273 Leased vehicles transferred to repossessed assets $ 1,504 $ 2,395 The accompanying notes are an integral part of these consolidated statements. 8 Table of Contents THE BANCORP, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note 1. Organization and Nature of Operations The Bancorp, Inc. (the “Company”) is a Delaware corporation and a registered financial holding company. Its primary, wholly-owned subsidiary is The Bancorp Bank, National Association (the “Bank”), which is a federally chartered commercial bank located in Sioux Falls, South Dakota and is a Federal Deposit Insurance Corporation (“FDIC”) insured institution. As a federally chartered institution, its primary regulator is the Office of the Comptroller of the Currency (“OCC”). The Company has three reportable segments which consist of Fintech Solutions, Credit Solutions and Corporate. Through partner relationships, Fintech Solutions delivers payment, deposit, and lending products that attract deposits and generate fee income. 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. The Company primarily earns fee-based income from fintech products, and such products include sponsored issuance of deposit accounts and debit, credit, and prepaid cards; sponsored lending products for fintech partners; and payment processing solutions, including acquiring, ACH, and near-and real-time payment services in support of its partners. Credit Solutions is our lending operation and makes the following types of loans: (i) Real estate bridge lending (“REBL”); (ii) Institutional Banking 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. The Company and the Bank are affected by state and federal legislation and regulations and are subject to regulation by certain state and federal agencies. Accordingly, they are examined periodically by those regulatory authorities. Note 2. Significant Accounting Policies Basis of Presentation The financial statements of the Company, as of June 30, 2026 and for the three and six-month periods ended June 30, 2026 and 2025, are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted in this Quarterly Report on Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). However, in the opinion of management, these interim financial statements include all necessary adjustments to fairly present the results of the interim periods presented. The unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December, 31, 2025 (the “2025 Form 10-K”). The results of operations for the three and six-month periods ended June 30, 2026 may not necessarily be indicative of the results of operations anticipated for the full year ending December 31, 2026. Certain prior period amounts have been reclassified to conform to current period presentation. There have been no significant changes as of June 30, 2026 from the Company’s significant accounting policies as described in the 2025 Form 10-K. Subsequent Events The Company evaluated its June 30, 2026 financial statements for subsequent events through the date the consolidated financial statements were issued. The Company is not aware of any subsequent events which would require recognition or disclosure in the financial statements. 9 Table of Contents Note 3. Earnings Per Share The Company calculates earnings per share in accordance with ASC 260, Earnings Per Share . Basic earnings per share is computed by dividing income available to common shareholders by the weighted average common shares outstanding during the period. Diluted earnings per share is computed by dividing income available to common shareholders by the weighted average common shares outstanding during the period, assuming all potentially dilutive common shares were issued. Diluted earnings per share considers the potential dilution that could occur if securities, including stock options and RSUs or other contracts to issue common stock were exercised and converted into common stock. Stock options are dilutive if their exercise prices are less than the current stock price. RSUs are dilutive because they represent grants over vesting periods which do not require employees to pay exercise prices. The dilution shown in the tables below includes the potential dilution from both stock options and RSUs. The weighted-average computation of the dilutive effect of potentially issuable shares of Common stock under the treasury stock method excludes the effect of securities that would be anti-dilutive. The calculation of weighted-average common shares outstanding during each respective period includes activity related to share repurchases made under the Company’s share repurchase programs, as discussed further in “Note 8. Shareholders’ Equity.” The following table summarizes the calculation of earnings per share: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (Dollars in thousands except share and per share data) Net income $ 60,656 $ 59,821 $ 120,725 $ 116,994 Weighted average shares - basic 41,461,889 46,598,535 41,795,740 46,904,592 Effect of dilutive securities: Common stock options and RSUs 332,271 584,235 384,776 660,988 Weighted average shares - diluted 41,794,160 47,182,770 42,180,516 47,565,580 Basic and diluted earnings per share: Net income per share - basic $ 1.46 $ 1.28 $ 2.89 $ 2.49 Effect of dilutive securities: Common stock options and RSUs ( 0.01 ) ( 0.01 ) ( 0.03 ) ( 0.03 ) Net income per share - diluted $ 1.45 $ 1.27 $ 2.86 $ 2.46 Included in the computation of diluted shares: Stock options with exercise price below average market price Share count 368,293 622,677 368,293 622,677 Minimum exercise price $ 8.57 $ 6.87 $ 8.57 $ 6.87 Maximum exercise price $ 43.89 $ 35.17 $ 43.89 $ 35.17 Excluded from the computation of diluted shares: Antidilutive securities Outstanding stock-based compensation awards, shares 32,624 78,240 32,624 78,240 10 Table of Contents Note 4. Investment Securities The Company’s investments in debt securities are classified as available-for-sale, and are summarized as follows (dollars in thousands): June 30, 2026 Amortized cost Gross unrealized gains Gross unrealized losses Fair value U.S. Government agency securities $ 23,151 $ 8 $ ( 635 ) $ 22,524 Asset-backed securities 226,817 145 ( 393 ) 226,569 Tax-exempt obligations of states and political subdivisions 14,612 72 ( 48 ) 14,636 Taxable obligations of states and political subdivisions 16,677 49 ( 55 ) 16,671 Residential mortgage-backed securities 433,475 5,800 ( 4,362 ) 434,913 Collateralized mortgage obligation securities 52,889 — ( 1,377 ) 51,512 Commercial mortgage-backed securities 852,092 7,339 ( 11,366 ) 848,065 $ 1,619,713 $ 13,413 $ ( 18,236 ) $ 1,614,890 December 31, 2025 Amortized cost Gross unrealized gains Gross unrealized losses Fair value U.S. Government agency securities $ 25,503 $ 63 $ ( 457 ) $ 25,109 Asset-backed securities 234,029 205 ( 133 ) 234,101 Tax-exempt obligations of states and political subdivisions 9,614 62 ( 40 ) 9,636 Taxable obligations of states and political subdivisions 18,941 45 ( 59 ) 18,927 Residential mortgage-backed securities 454,837 13,039 ( 3,553 ) 464,323 Collateralized mortgage obligation securities 58,129 44 ( 593 ) 57,580 Commercial mortgage-backed securities 856,273 14,306 ( 8,505 ) 862,074 $ 1,657,326 $ 27,764 $ ( 13,340 ) $ 1,671,750 The amortized cost and fair value of the Company’s investment securities at June 30, 2026, by contractual maturity, are shown below (dollars in thousands). Expected maturities may differ from contractual maturities based on the timing of cashflows from the underlying collateral. Available-for-sale Amortized cost Fair value Due before one year $ 22,388 $ 22,293 Due after one year through five years 305,089 304,637 Due after five years through ten years 495,145 496,867 Due after ten years 797,091 791,093 $ 1,619,713 $ 1,614,890 11 Table of Contents The table below indicates the length of time individual securities had been in a continuous unrealized loss position (dollars in thousands): June 30, 2026 Less than 12 months 12 months or longer Total Fair Value Unrealized losses Fair Value Unrealized losses Fair Value Unrealized losses U.S. Government agency securities $ 8,423 $ ( 132 ) $ 10,304 $ ( 503 ) $ 18,727 $ ( 635 ) Asset-backed securities 107,184 ( 393 ) — — 107,184 ( 393 ) Tax-exempt obligations of states and political subdivisions 6,442 ( 45 ) 1,157 ( 3 ) 7,599 ( 48 ) Taxable obligations of states and political subdivisions 980 — 9,212 ( 55 ) 10,192 ( 55 ) Residential mortgage-backed securities 61,524 ( 622 ) 27,414 ( 3,740 ) 88,938 ( 4,362 ) Collateralized mortgage obligation securities 40,458 ( 776 ) 11,054 ( 601 ) 51,512 ( 1,377 ) Commercial mortgage-backed securities 245,216 ( 3,490 ) 104,297 ( 7,876 ) 349,513 ( 11,366 ) Total unrealized loss position investment securities $ 470,227 $ ( 5,458 ) $ 163,438 $ ( 12,778 ) $ 633,665 $ ( 18,236 ) December 31, 2025 Less than 12 months 12 months or longer Total Fair Value Unrealized losses Fair Value Unrealized losses Fair Value Unrealized losses U.S. Government agency securities $ 2,521 $ ( 1 ) $ 11,660 $ ( 456 ) $ 14,181 $ ( 457 ) Asset-backed securities 59,024 ( 133 ) — — 59,024 ( 133 ) Tax-exempt obligations of states and political subdivisions 3,456 ( 33 ) 1,153 ( 7 ) 4,609 ( 40 ) Taxable obligations of states and political subdivisions — — 14,053 ( 59 ) 14,053 ( 59 ) Residential mortgage-backed securities 18,630 ( 62 ) 28,886 ( 3,491 ) 47,516 ( 3,553 ) Collateralized mortgage obligation securities 34,149 ( 75 ) 12,721 ( 518 ) 46,870 ( 593 ) Commercial mortgage-backed securities 173,572 ( 873 ) 119,778 ( 7,632 ) 293,350 ( 8,505 ) Total unrealized loss position investment securities $ 291,352 $ ( 1,177 ) $ 188,251 $ ( 12,163 ) $ 479,603 $ ( 13,340 ) Note 5. Loans, net The Company’s loans originate from several lending lines of business, including: • SBL s , or small business loans, are comprised primarily of Small Business Administration “SBA” loans. • Direct lease financing include s lease financing for commercial and government vehicle fleets and, to a lesser extent, provides lease financing for other equipment. • SBLOC, or securities-backed lines of credit, are made to individuals, trusts and other entities and are secured by a pledge of marketable securities maintained in one or more accounts for which the Company obtains a securities account control agreement. • IBLOC, or insurance policy cash value-backed lines of credit, are collateralized by the cash surrender value of eligible insurance policies. • Advisor financing are loans to investment advisors for purposes of debt refinancing, acquisition of another firm or internal succession. • REBL, or real estate bridge lending, are transitional commercial mortgage loans which are made to improve and rehabilitate existing properties which already have cash flow, and which are collateralized by those properties. 12 Table of Contents • Fintech loans consist of short-term extensions of credit, including secured credit card loans, made in conjunction with marketers and servicers. • Other loans include warehouse financing of REBL loan sales to third-party purchasers, and loans the Company generally no longer offers, including commercial loans, CRA loans and HELOC. Major classifications of loans, excluding commercial loans at fair value, are as follows (dollars in thousands): June 30, 2026 December 31, 2025 Loans recorded at amortized cost: SBL non-real estate $ 255,424 $ 235,282 SBL commercial mortgage 757,154 749,234 SBL construction 21,686 22,382 SBLs 1,034,264 1,006,898 Direct lease financing 670,902 685,422 SBLOC / IBLOC 1,825,301 1,669,985 Advisor financing 240,049 294,236 Real estate bridge lending 2,233,688 2,188,952 Fintech (1) 901,502 1,097,998 Other loans (2) 152,604 157,416 Total loans 7,058,310 7,100,907 Unamortized loan fees and costs 15,596 15,769 Total loans, net of deferred loan fees and costs $ 7,073,906 $ 7,116,676 _________ (1) As of June 30, 2026 and December 31, 2025, fintech loans included $ 336.3 million and $ 729.1 million of secured credit card accounts which are backed dollar for dollar by cash collateral by each individual cardholder and are required to be repaid in full monthly. For secured credit card accounts, we recognize a loan receivable and a deposit liability for the cash collateral that secures those accounts. The remaining fintech loans consist of cashflow underwritten short-term liquidity products to individual borrowers ranging in maturity from 30 to 365 days. (2) As of June 30, 2026 and December 31, 2025, Other loans includes $ 110.0 million and $ 110.7 million, respectively, related to the warehouse financing of REBL sales to third-party purchasers. During the six months ended June 30, 2026 and 2025, the Company purchased $ 7.7 million and $ 19.8 million of SBLs, respectively, none of which were credit deteriorated. Additionally, in the six months ended June 30, 2026 and 2025 , the Company participated in SBLs with other institutions in the amount of $ 0.3 million and $ 4.7 million, respectively . Non-Accrual and Delinquency A detail of the Company’s delinquent and non-accrual loans by loan category is as follows (dollars in thousands): June 30, 2026 Past-due and Non-Accrual 30-59 days past due 60-89 days past due 90+ days still accruing Non-accrual Total past due and non-accrual Current Total loans SBL non-real estate $ 1,892 $ — $ — $ 10,756 $ 12,648 $ 242,776 $ 255,424 SBL commercial mortgage — — — 26,868 26,868 730,286 757,154 SBL construction — — — 2,660 2,660 19,026 21,686 Direct lease financing 1,642 165 506 9,120 11,433 659,469 670,902 SBLOC / IBLOC 3,222 119 — — 3,341 1,821,960 1,825,301 Advisor financing — — — — — 240,049 240,049 Real estate bridge lending — — — 22,454 22,454 2,211,234 2,233,688 Fintech 22,956 4,087 1,798 — 28,841 872,661 901,502 Other loans 431 — 1 390 822 151,782 152,604 $ 30,143 $ 4,371 $ 2,305 $ 72,248 $ 109,067 $ 6,949,243 $ 7,058,310 13 Table of Contents December 31, 2025 Past-due and Non-Accrual 30-59 days past due 60-89 days past due 90+ days still accruing Non-accrual Total past due and non-accrual Current Total loans SBL non-real estate $ 1,515 $ 344 $ — $ 8,639 $ 10,498 $ 224,784 $ 235,282 SBL commercial mortgage 224 — — 21,977 22,201 727,033 749,234 SBL construction — — — 2,660 2,660 19,722 22,382 Direct lease financing 2,461 894 1,457 12,066 16,878 668,544 685,422 SBLOC / IBLOC 5,328 65 251 446 6,090 1,663,895 1,669,985 Advisor financing — — — — — 294,236 294,236 Real estate bridge lending — — 14,459 9,755 24,214 2,164,738 2,188,952 Fintech 24,701 3,791 2,030 — 30,522 1,067,476 1,097,998 Other loans 209 111 2 142 464 156,952 157,416 $ 34,438 $ 5,205 $ 18,199 $ 55,685 $ 113,527 $ 6,987,380 $ 7,100,907 The following table summarizes non-accrual loans with and without a specific ACL (dollars in thousands): June 30, 2026 December 31, 2025 Non-accrual loans with a related ACL Related ACL Non-accrual loans without a related ACL Total non-accrual loans Non-accrual loans with a related ACL Related ACL Non-accrual loans without a related ACL Total non-accrual loans SBL non-real estate $ 8,233 $ 1,504 $ 2,523 $ 10,756 $ 5,361 $ 963 $ 3,278 $ 8,639 SBL commercial mortgage 4,797 690 22,071 26,868 3,009 801 18,968 21,977 SBL construction 710 37 1,950 2,660 710 35 1,950 2,660 Direct lease financing 7,679 2,175 1,441 9,120 11,881 4,211 185 12,066 SBLOC / IBLOC — — — — 446 207 — 446 Real estate bridge lending 12,700 796 9,754 22,454 — — 9,755 9,755 Other loans — — 390 390 — — 142 142 $ 34,119 $ 5,202 $ 38,129 $ 72,248 $ 21,407 $ 6,217 $ 34,278 $ 55,685 Interest which would have been earned on loans classified as non-accrual for the six months ended June 30, 2026 and 2025, was $ 2.5 million and $ 1.1 million, respectively. No income on non-accrual loans was recognized during the three and six months ended June 30, 2026 or 2025. During the six months ended June 30, 2026 amounts reversed from interest income totaled $ 0.8 million, and primarily consist of $ 0.4 millio n of REBL, $ 0.3 million of SBL commercial mortgage and $ 0.1 million of SBL non-real estate. During the six months ended June 30, 2025 amounts reversed from interest income totaled $ 1.7 million and primarily consist of $ 1.2 million of REBL and $ 0.3 million of SBL commercial mortgage . The interest reversals represent interest receivable balance on loans at the time of transfer into non-accrual status. Loan Modifications Loans modified to borrowers experiencing financial difficulty, and related information are as follows (dollars in thousands): Three months ended June 30, 2026 Six months ended June 30, 2026 Payment deferral Payment delay and term extension Total Percent of total loan category Payment deferral Payment delay and term extension Total Percent of total loan category SBL non-real estate $ 2,098 $ 35 $ 2,133 0.84 % $ 2,098 $ 35 $ 2,133 0.84 % SBL commercial mortgage 697 — 697 0.09 % 697 — 697 0.09 % Total $ 2,795 $ 35 $ 2,830 0.04 % $ 2,795 $ 35 $ 2,830 0.04 % 14 Table of Contents Three months ended June 30, 2025 Six months ended June 30, 2025 Payment deferral Interest rate reduction and payment deferral Total Percent of total loan category Payment deferral Interest rate reduction and payment deferral Total Percent of total loan category SBL non-real estate $ — $ 1,348 $ 1,348 0.66 % $ 4,991 $ 1,348 $ 6,339 3.11 % SBL commercial mortgage — — — — 2,738 — 2,738 0.38 % Total $ — $ 1,348 $ 1,348 0.02 % $ 7,729 $ 1,348 $ 9,077 0.14 % The following tables show an analysis of the delinquency status at the end of the respective periods for loans that were modified during the periods presented (dollars in thousands): Three months ended June 30, 2026 30-59 days past due 60-89 days past due 90+ days still accruing Non-accrual Total delinquent Current Total SBL non-real estate $ — $ — $ — $ 1,723 $ 1,723 $ 410 $ 2,133 SBL commercial mortgage — — — 697 697 — 697 $ — $ — $ — $ 2,420 $ 2,420 $ 410 $ 2,830 Three months ended June 30, 2025 30-59 days past due 60-89 days past due 90+ days still accruing Non-accrual Total delinquent Current Total SBL non-real estate $ — $ 1,348 $ — $ — $ 1,348 $ — $ 1,348 SBL commercial mortgage — — — — — — — $ — $ 1,348 $ — $ — $ 1,348 $ — $ 1,348 Six months ended June 30, 2026 30-59 days past due 60-89 days past due 90+ days still accruing Non-accrual Total delinquent Current Total SBL non-real estate $ — $ — $ — $ 1,723 $ 1,723 $ 410 $ 2,133 SBL commercial mortgage — — — 697 697 — 697 $ — $ — $ — $ 2,420 $ 2,420 $ 410 $ 2,830 Six months ended June 30, 2025 30-59 days past due 60-89 days past due 90+ days still accruing Non-accrual Total delinquent Current Total SBL non-real estate $ — $ 1,348 $ — $ — $ 1,348 $ 4,991 $ 6,339 SBL commercial mortgage — — — — — 2,738 2,738 $ — $ 1,348 $ — $ — $ 1,348 $ 7,729 $ 9,077 The following tables describe the financial effect of modifications made during the periods presented: Three months ended June 30, 2026 Six months ended June 30, 2026 Combined Rate and Maturity Combined Rate and Maturity Weighted average interest reduction Weighted average term extension (in months) More-than-insignificant-payment delay Weighted average interest reduction Weighted average term extension (in months) More-than-insignificant-payment delay SBL non-real estate — 44 0.84 % — 44 0.84 % SBL commercial mortgage — — 0.09 % — — 0.09 % Three months ended June 30, 2025 Six months ended June 30, 2025 Combined Rate and Maturity Combined Rate and Maturity Weighted average interest reduction Weighted average term extension (in months) More-than-insignificant-payment delay Weighted average interest reduction Weighted average term extension (in months) More-than-insignificant-payment delay SBL non-real estate 1.00 % — — 1.00 % — 2.45 % SBL commercial mortgage — — — — — 0.38 % 15 Table of Contents The Company had no commitments to extend additional credit to loans classified as modified as of June 30, 2026, and t here were $ 0.3 million specific reserves on the $ 2.8 million of loans classified as modified . Allowance for Credit Loss The Company had no significant changes to its quantitative and qualitative measures used in measuring the allowance for credit losses as of June 30, 2026. For additional information regarding the Company’s allowance estimate, see Note 2, “Summary of Significant Accounting Policies” and Note 5, “Loans, net,” in the 2025 Form 10-K. A summary of the Company’s primary portfolio pools and loans accordingly classified by year of origination is as follows (dollars in thousands): As of June 30, 2026 2026 2025 2024 2023 2022 Prior Revolving Total Pass $ 34,924 $ 70,539 $ 46,520 $ 55,570 $ 14,163 $ 15,705 $ — $ 237,421 Special mention — — — 1,952 1,388 43 — 3,383 Substandard — — 2,104 6,847 4,678 991 — 14,620 SBL non-real estate, total 34,924 70,539 48,624 64,369 20,229 16,739 — 255,424 Non-rated 154 — — — — — — 154 Pass 67,301 112,280 142,557 75,000 92,774 211,081 — 700,993 Special mention — — 494 733 8,113 11,382 — 20,722 Substandard — — 2,377 13,511 8,025 11,372 — 35,285 SBL commercial mortgage, total 67,455 112,280 145,428 89,244 108,912 233,835 — 757,154 Pass 3,643 11,976 — 3,408 — — — 19,027 Substandard — — — — — 2,659 — 2,659 SBL construction, total 3,643 11,976 — 3,408 — 2,659 — 21,686 Non-rated 1,199 — — — — — — 1,199 Pass 131,306 209,481 143,471 94,643 64,870 13,079 — 656,850 Special mention 194 320 211 149 166 66 — 1,106 Substandard — — 2,149 5,661 3,003 934 — 11,747 Direct lease financing, total 132,699 209,801 145,831 100,453 68,039 14,079 — 670,902 Non-rated — — — — — — 14,631 14,631 Pass — — — — — — 1,810,661 1,810,661 Substandard — — — — — — 9 9 SBLOC/IBLOC, total — — — — — — 1,825,301 1,825,301 Pass 5,638 58,826 64,039 46,510 37,056 19,245 — 231,314 Special mention — — — — 957 7,778 — 8,735 Advisor financing, total 5,638 58,826 64,039 46,510 38,013 27,023 — 240,049 Pass 407,408 707,145 386,489 150,852 473,513 62,069 — 2,187,476 Substandard — — 23,757 — 12,700 9,755 — 46,212 REBL, total 407,408 707,145 410,246 150,852 486,213 71,824 — 2,233,688 Non-rated 274,510 7,415 — — — — 617,779 899,704 Substandard 1,313 485 — — — — — 1,798 Fintech, total 275,823 7,900 — — — — 617,779 901,502 Non-rated 3,315 — — — — 11,820 1,038 16,173 Pass 227 56,994 53,830 159 250 24,582 — 136,042 Substandard — — — — — 389 — 389 Other loans, total 3,542 56,994 53,830 159 250 36,791 1,038 152,604 Total loans $ 931,132 $ 1,235,461 $ 867,998 $ 454,995 $ 721,656 $ 402,950 $ 2,444,118 $ 7,058,310 16 Table of Contents As of December 31, 2025 2025 2024 2023 2022 2021 Prior Revolving Total Pass $ 70,191 $ 50,083 $ 60,331 $ 17,797 $ 12,295 $ 6,765 $ — $ 217,462 Special mention — 262 992 1,480 — 71 — 2,805 Substandard — 1,171 6,635 4,276 1,360 1,573 — 15,015 SBL non-real estate, total 70,191 51,516 67,958 23,553 13,655 8,409 — 235,282 Pass 107,357 156,610 83,047 105,359 69,554 166,921 — 688,848 Special mention — 2,749 2,708 4,406 4,275 7,459 — 21,597 Substandard — 706 9,622 14,656 8,579 5,226 — 38,789 SBL commercial mortgage, total 107,357 160,065 95,377 124,421 82,408 179,606 — 749,234 Pass 4,769 10,449 4,504 — — — — 19,722 Substandard — — — — 1,950 710 — 2,660 SBL construction, total 4,769 10,449 4,504 — 1,950 710 — 22,382 Non-rated 1,777 — — — — — — 1,777 Pass 253,367 177,838 121,969 87,456 20,241 4,269 — 665,140 Special mention 719 410 759 295 3 — — 2,186 Substandard 16 2,741 7,321 4,335 1,839 67 — 16,319 Direct lease financing, total 255,879 180,989 130,049 92,086 22,083 4,336 — 685,422 Non-rated — — — — — — 6,882 6,882 Pass — — — — — — 1,662,616 1,662,616 Substandard — — — — — — 487 487 SBLOC/IBLOC, total — — — — — — 1,669,985 1,669,985 Pass 68,249 69,705 70,411 48,197 16,471 12,253 — 285,286 Special mention — — — 979 7,971 — — 8,950 Advisor financing, total 68,249 69,705 70,411 49,176 24,442 12,253 — 294,236 Pass 689,651 453,603 271,554 569,730 120,938 — — 2,105,476 Special mention — — — — 9,576 — — 9,576 Substandard — 42,735 — 21,411 9,754 — — 73,900 REBL, total 689,651 496,338 271,554 591,141 140,268 — — 2,188,952 Non-rated 141,605 — — — — — 954,364 1,095,969 Substandard 2,029 — — — — — — 2,029 Fintech, total 143,634 — — — — — 954,364 1,097,998 Non-rated 494 — — — — 8,852 — 9,346 Pass 56,998 54,458 160 252 343 34,621 1,096 147,928 Substandard — — — — — 142 — 142 Other loans, total 57,492 54,458 160 252 343 43,615 1,096 157,416 Total loans $ 1,397,222 $ 1,023,520 $ 640,013 $ 880,629 $ 285,149 $ 248,929 $ 2,625,445 $ 7,100,907 In the above tables, the special mention classification indicates weaknesses that may, if not cured, threaten the borrower’s future repayment ability. A substandard classification reflects an existing weakness indicating the possible inadequacy of net worth and other repayment sources. These classifications are used both by regulators and peers, as they have been correlated with an increased probability of credit losses. 17 Table of Contents A detail of the changes in the ACL is as follows (in thousands): June 30, 2026 SBL non-real estate SBL commercial mortgage SBL construction Direct lease financing SBLOC / IBLOC Advisor financing REBL Fintech Other loans Total Beginning 1/1/2026 $ 6,337 $ 3,118 $ 235 $ 15,675 $ 1,041 $ 2,207 $ 5,949 $ 31,137 $ 501 $ 66,200 Charge-offs ( 172 ) ( 486 ) — ( 956 ) ( 446 ) — — ( 89,106 ) — ( 91,166 ) Recoveries 75 — — 167 — — — 34,093 500 34,835 Provision (reversal) 998 813 ( 25 ) ( 2,670 ) 318 ( 407 ) 536 54,609 ( 546 ) 53,626 Ending balance $ 7,238 $ 3,445 $ 210 $ 12,216 $ 913 $ 1,800 $ 6,485 $ 30,733 $ 455 $ 63,495 June 30, 2025 SBL non-real estate SBL commercial mortgage SBL construction Direct lease financing SBLOC / IBLOC Advisor financing REBL Fintech Other loans Total Beginning 1/1/2025 $ 4,972 $ 3,203 $ 342 $ 13,125 $ 1,195 $ 2,054 $ 6,603 $ 12,909 $ 450 $ 44,853 Charge-offs ( 171 ) — — ( 1,520 ) — — — ( 89,627 ) ( 704 ) ( 92,022 ) Recoveries 61 — — 429 — — — 14,599 4 15,093 Provision (reversal) 326 ( 190 ) 124 1,504 ( 188 ) ( 13 ) 16 89,101 789 91,469 Ending balance $ 5,188 $ 3,013 $ 466 $ 13,538 $ 1,007 $ 2,041 $ 6,619 $ 26,982 $ 539 $ 59,393 A summary of the Company’s gross charge-offs classified by portfolio segment and year of origination are as follows (dollars in thousands): Six months ended June 30, 2026 2026 2025 2024 2023 2022 Prior Revolving Total SBL non-real estate $ — $ — $ — $ — $ ( 172 ) $ — $ — $ ( 172 ) SBL commercial mortgage — — — — — ( 486 ) — ( 486 ) Direct lease financing — — ( 191 ) ( 309 ) ( 386 ) ( 70 ) — ( 956 ) IBLOC — — — — — — ( 446 ) ( 446 ) Fintech ( 1,862 ) ( 14,966 ) — — — — ( 72,278 ) ( 89,106 ) Total Charge-offs $ ( 1,862 ) $ ( 14,966 ) $ ( 191 ) $ ( 309 ) $ ( 558 ) $ ( 556 ) $ ( 72,724 ) $ ( 91,166 ) Six months ended June 30, 2025 2025 2024 2023 2022 2021 Prior Revolving Total SBL non-real estate $ — $ — $ — $ ( 62 ) $ — $ ( 109 ) $ — $ ( 171 ) Direct lease financing — ( 139 ) ( 320 ) ( 884 ) ( 177 ) — — ( 1,520 ) Fintech ( 369 ) ( 2,184 ) — — — — ( 87,074 ) ( 89,627 ) Other loans — — — — — ( 704 ) — ( 704 ) Total Charge-offs $ ( 369 ) $ ( 2,323 ) $ ( 320 ) $ ( 946 ) $ ( 177 ) $ ( 813 ) $ ( 87,074 ) $ ( 92,022 ) The Company has agreements with a partner to originate and service fintech loans, which includes credit enhancement provisions through which incurred losses on fintech loans are covered by the partner. The Company recognizes an estimate of loss on this portfolio through its allowance for credit losses on its fintech loans on the Condensed Consolidated Balance Sheets, with provision for credit losses on fintech loans recognized on the Condensed Consolidated Statements of Operations. In addition, the Company recognizes a corresponding amount of credit enhancement asset on the Condensed Consolidated Balance Sheets and non-interest income — fintech loan credit enhancement in the Condensed Consolidated Statements of Operations. The measurement of the expected loan losses and the related credit enhancement are based on the same estimate and are equal and correlate to like amounts in the Condensed Consolidated Statements of Operations. The Company has recognized a credit enhancement asset on the Condensed Consolidated Balance Sheets related to the estimated recovery of its realized losses on fintech loans of $ 30.7 million and $ 31.1 million as of June 30, 2026 and December 31, 2025, respectively. All fintech loans are covered by credit enhancement agreements as of June 30, 2026. 18 Table of Contents Direct lease financing The scheduled maturities of the direct financing leases reconciled to the total lease receivables as of June 30, 2026 are as follows (dollars in thousands): Remaining 2026 $ 171,677 2027 158,455 2028 106,615 2029 63,329 2030 28,964 2031 and thereafter 8,118 Total undiscounted cash flows 537,158 Residual value (1) 218,114 Difference between undiscounted cash flows and discounted cash flows ( 84,370 ) Present value of lease payments recorded as lease receivables $ 670,902 (1) Of the total residual value, $ 41.1 million is not guaranteed by the lessee or other guarantors. Off-Balance Sheet Exposure In addition to estimating credit loss for outstanding loans, the Company estimates expected credit losses over the entire period in which there is exposure to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancelable by the Company. The estimate of loss for unfunded loan commitments relates to our off-balance sheet credit exposure, and is adjusted through the provision for unfunded commitments. The estimate considers the likelihood that funding will occur over the estimated life of the commitment. The amount of the reserve on such exposures as of June 30, 2026 and as of December 31, 2025 was $ 1.5 million and $ 1.4 million, respectively, and is recognized within Other liabilities in the Condensed Consolidated Balance Sheets. Note 6. Debt The Company’s debt and borrowing arrangements consist of: June 30, 2026 December 31, 2025 (Dollars in thousands) Short-term borrowings $ 744,000 $ 199,000 Senior debt: Senior notes due 2030 $ 200,000 $ 200,000 Debt issuance costs ( 3,472 ) ( 3,747 ) Senior debt, net $ 196,528 $ 196,253 Subordinated debentures $ 13,401 $ 13,401 Other long-term borrowings $ 4,327 $ 13,712 Assets pledged as collateral that are not available to pay the Company’s general obligations as of June 30, 2026 consisted of $ 4.87 billion of loans held for investment at amortized cost and $ 1.36 billion of investment securities that were pledged for short-term-borrowing agreements. In addition, there were $ 4.3 million of loans held for investment at amortized cost that were pledged for other long-term borrowings at June 30, 2026 . Short-term borrowings The Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank lines are periodically utilized to manage liquidity. The amount of loans pledged varies and the collateral may be unpledged at any time to the extent the collateral exceeds advances. As of June 30, 2026, based on the amount of loans and investment securities pledged, as outlined above, total capacity of short-term borrowings was $ 4.53 billion, t here was $ 744.0 million borrowed and $ 3.79 billion available capacity . 19 Table of Contents Note 7. Fair Value Measurements Recurring Measurements Assets measured at fair value on a recurring basis are outlined below, summarized by fair value hierarchy (dollars in thousands): June 30, 2026 Total Level 1 Level 2 Level 3 Investment securities, available-for-sale: U.S. Government agency securities $ 22,524 $ — $ 22,524 $ — Asset-backed securities 226,569 — 226,569 — Obligations of states and political subdivisions 31,307 — 31,307 — Residential mortgage-backed securities 434,913 — 434,913 — Collateralized mortgage obligation securities 51,512 — 51,512 — Commercial mortgage-backed securities 848,065 — 848,065 — Total investment securities, available-for-sale 1,614,890 — 1,614,890 — Commercial loans, at fair value 114,162 — — 114,162 Credit enhancement asset 30,733 — 30,733 — $ 1,759,785 $ — $ 1,645,623 $ 114,162 December 31, 2025 Total Level 1 Level 2 Level 3 Investment securities, available-for-sale: U.S. Government agency securities $ 25,109 $ — $ 25,109 $ — Asset-backed securities 234,101 — 234,101 — Obligations of states and political subdivisions 28,563 — 28,563 — Residential mortgage-backed securities 464,323 — 464,323 — Collateralized mortgage obligation securities 57,580 — 57,580 — Commercial mortgage-backed securities 862,074 — 862,074 — Total investment securities, available-for-sale 1,671,750 — 1,671,750 — Commercial loans, at fair value 139,389 — — 139,389 Credit enhancement asset 31,138 — 31,138 — $ 1,842,277 $ — $ 1,702,888 $ 139,389 Activity in Level 3 Commercial loans at fair value is summarized below (dollars in thousands): Six Months Ended June 30, 2026 2025 Beginning balance $ 139,389 $ 223,115 Total net gains (realized/unrealized) included in earnings (1) 136 705 Purchases, advances, sales and settlements: Advances 133 2,953 Settlements ( 25,496 ) ( 41,297 ) Ending balance $ 114,162 $ 185,476 Amount included in earnings attributable to the change in unrealized gains (losses) related to assets still held at period end $ — $ — (1) For commercial loans at fair value, gains or losses are recognized in Non-interest income—Net realized and unrealized gains on commercial loans, at fair value in the Condensed Consolidated Statement of Operations. 20 Table of Contents Information related to assumptions used in the valuation of Level 3 instruments is as follows: Discount Rate Assumption At June 30, 2026 At December 31, 2025 Range Weighted average Range Weighted average Commercial loans, at fair value: Commercial - SBA 5.71 % 5.71 % 5.73 % 5.73 % Non-SBA commercial real estate 8.50 % 8.50 % 6.50 %- 8.98 % 6.94 % Non-Recurring Measurements Assets measured at fair value on a nonrecurring basis consist of certain loans that are collateral-dependent with specific reserves that are recognized in Loans, net on our Condensed Consolidated Balance Sheets, and Other real estate owned. Collateral-dependent loans were $ 28.9 million and $ 15.2 million as of June 30, 2026 and December 31, 2025, respectively. Loans recorded at amortized cost that are in non-accrual status are treated as collateral dependent to the extent they have resulted from borrower financial difficulty (and not from administrative delays or other mitigating factors) and are not brought current. For these loans, fair value is measured based on inputs including recent sales of similar collateral, and is a Level 3 measurement. At June 30, 2026, the Company’s basis in the non-accrual loans, or the loan principal of $ 34.1 million was reduced by specific reserves of $ 5.2 million within the ACL as of that date, representing the deficiency between principal and estimated collateral values, which were reduced by estimated costs to sell. Other real estate owned (OREO) were $ 62.0 million and $ 60.7 million as of June 30, 2026 and December 31, 2025, respectively and are periodically measured for impairment based on any decline in fair value below carrying value. For OREO, fair value is based upon appraisals of the underlying collateral by third-party appraisers, reduced by 7 % to 10 % for estimated selling costs, and is a Level 3 non-recurring measurement. During the three and six months ended June 30, 2026 and 2025, the Company did not recognize any unrealized losses from the impairment of OREO and did not recognize any gains (losses) on the disposition of OREO. Unrealized and realized gains or losses on OREO are recognized in Other Non-interest expense in the Condensed Consolidated Statements. Fair Value of Other Financial Instruments The following tables provide information regarding carrying amounts and estimated fair values of all the Company’s financial instruments (dollars in thousands): June 30, 2026 Fair Value Carrying amount Total Fair Value Level 1 Level 2 Level 3 ASSETS: Investment securities, available-for-sale $ 1,614,890 $ 1,614,890 $ — $ 1,614,890 $ — Commercial loans, at fair value 114,162 114,162 — — 114,162 Loans, net of deferred loan fees and costs 7,073,906 7,046,464 — — 7,046,464 Stock in Federal Reserve, Federal Home Loan and Atlantic Central Bankers Banks 50,115 50,115 — — 50,115 Accrued interest receivable 43,342 43,342 — 43,342 — Credit enhancement asset 30,733 30,733 — 30,733 — LIABILITIES: Deposits Demand and interest checking $ 7,353,151 $ 7,353,151 $ — $ 7,353,151 $ — Savings and money market 123,051 123,051 — 123,051 — Short-term borrowings 744,000 744,000 — 744,000 — Senior debt 196,528 204,262 — 204,262 — Subordinated debentures 13,401 9,668 — — 9,668 Other long-term borrowings 4,327 4,327 — 4,327 — Other liabilities: Accrued interest payable 5,457 5,457 — 5,457 — 21 Table of Contents December 31, 2025 Fair Value Carrying amount Total Fair Value Level 1 Level 2 Level 3 ASSETS: Investment securities, available-for-sale $ 1,671,750 $ 1,671,750 $ — $ 1,671,750 $ — Commercial loans, at fair value 139,389 139,389 — — 139,389 Loans, net of deferred loan fees and costs 7,116,676 7,073,348 — — 7,073,348 Stock in Federal Reserve, Federal Home Loan and Atlantic Central Bankers Banks 25,205 25,205 — — 25,205 Accrued interest receivable 43,090 43,090 — 43,090 — Credit enhancement asset 31,138 31,138 — 31,138 — LIABILITIES: Deposits Demand and interest checking $ 7,827,037 $ 7,827,037 $ — $ 7,827,037 $ — Savings and money market 338,459 338,459 — 338,459 — Short-term borrowings 199,000 199,000 — 199,000 — Senior debt 196,253 202,503 — 202,503 — Subordinated debentures 13,401 11,220 — — 11,220 Other long-term borrowings 13,712 13,712 — 13,712 — Other liabilities: Accrued interest payable 6,802 6,802 — 6,802 — Note 8. Shareholders’ Equity Share Repurchases 2026 Repurchase Program On July 7, 2025, the Board authorized a share repurchase program of up to $ 200.0 million for 2026 (the “2026 Repurchase Plan”). During the three and six months ended June 30, 2026 , the Company repurchased 870,129 and 1,713,190 shares of its common stock in the open market under the 2026 Repurchase Program at an average price of $ 57.46 and $ 58.37 per share, respectively. 2025 Repurchase Program On October 23, 2024, the Board approved a common stock repurchase program for the 2025 fiscal year (the “2025 Repurchase Program”), which authorizes the Company to repurchase $ 37.5 million in value of the Company’s common stock per fiscal quarter in 2025, for a maximum amount of $ 150.0 million. On July 7, 2025, the Board authorized the increase of the capacity of the Company’s existing share repurchase program for the third and fourth quarters of 2025 to $ 300.0 million. During the three and six months ended June 30, 2025 , the Company repurchased 753,898 and 1,438,343 shares of its common stock in the open market under the 2025 Repurchase Program at an average price of $ 49.75 and $ 52.15 per share, respectively. Stock-Based Compensation Restricted Stock Units (RSUs) In the first quarter of 2026, the Company granted 388,821 RSUs, having a vesting period of three years . At issuance, the RSUs had a fair value of $ 62.05 per unit. For additional information regarding the Company’s stock-based compensation plans, see Note 13, “Stock-Based Compensation,” in the 2025 Form 10-K. 22 Table of Contents Note 9. Regulatory Matters It is the policy of the Federal Reserve that financial holding companies should pay cash dividends on common stock only out of income available over the past year and only if prospective earnings retention is consistent with the organization’s expected future needs and financial condition. The policy provides that a financial holding company should not maintain a level of cash dividends that undermines the financial holding company’s ability to serve as a source of strength to its banking subsidiaries. Various federal and state statutory provisions limit the amount of dividends that subsidiary banks can pay to their holding companies without regulatory approval. Without the prior approval of the OCC, a dividend may not be paid if the total of all dividends declared by a bank in any calendar year is in excess of the current year’s net income combined with the retained net income of the two preceding years. Additionally, a dividend may not be paid in excess of a bank’s retained earnings. Moreover, an insured depository institution may not pay a dividend if the payment would cause it to be less than “adequately capitalized” under the prompt corrective action framework as defined in the Federal Deposit Insurance Act or if the institution is in default in the payment of an assessment due to the FDIC. Similarly, a banking organization that fails to satisfy regulatory minimum capital conservation buffer requirements will be subject to certain limitations, which include restrictions on capital distributions. In addition to these explicit limitations, federal and state regulatory agencies are authorized to prohibit a banking subsidiary or financial holding company from engaging in an unsafe or unsound practice. Depending upon the circumstances, the agencies could take the position that paying a dividend would constitute an unsafe or unsound banking practice. As of June 30, 2026, the Bank met all regulatory requirements for classification as well capitalized under the regulatory framework for prompt corrective action. The following table sets forth our regulatory capital ratios for the periods indicated: Tier 1 capital to average assets ratio Tier 1 capital to risk-weighted assets ratio Total capital to risk-weighted assets ratio Common equity Tier 1 to risk weighted assets As of June 30, 2026 The Bancorp, Inc. 7.26 % 11.41 % 12.45 % 11.41 % The Bancorp Bank, National Association 9.09 % 14.27 % 15.32 % 14.27 % "Well capitalized" institution (under federal regulations-Basel III) 5.00 % 8.00 % 10.00 % 6.50 % As of December 31, 2025 The Bancorp, Inc. 7.64 % 11.08 % 12.19 % 11.08 % The Bancorp Bank, National Association 9.70 % 14.03 % 15.13 % 14.03 % "Well capitalized" institution (under federal regulations-Basel III) 5.00 % 8.00 % 10.00 % 6.50 % Note 10. Commitments and Contingencies THE CFPB CID Matter. On March 27, 2023, the Bank received a Civil Investigative Demand (“CID”) from the Consumer Financial Protection Bureau (“CFPB”) seeking documents and information related to the Bank’s escheatment practices in connection with certain accounts offered through one of the Bank’s program partners. The Bank responded to the CID and has not received further inquiries from the CFPB regarding the matter. The City Attorney of San Francisco Matter. On November 21, 2023, TBBK Card Services, Inc. (“TBBK Card”), a wholly-owned subsidiary of the Bank, was served with a complaint filed in the Superior Court of the State of California (the “California Superior Court”), captioned People of the State of California, acting by and through San Francisco City Attorney David Chiu, Plaintiff v. InComm Financial Services, Inc., TBBK Card Services, Inc., Sutton Bank, Pathward, N.A., and Does 1-10, Defendants. The complaint principally alleges that the defendants engaged in unlawful, unfair, or fraudulent business acts and practices related to the packaging of “Vanilla” prepaid cards and the refund process for unauthorized transactions that occurred due to card draining practices. On December 14, 2023, the case was removed to the U.S. District Court for the Northern District of California. On March 26, 2024, the case was remanded to the California 23 Table of Contents Superior Court. TBBK Card has vigorously defended against the claims. On May 6, 2024, TBBK Card filed a motion to quash service of the summons as to TBBK Card for lack of personal jurisdiction. TBBK Card’s motion to quash, and subsequent related appeals, were denied. On December 12, 2025, an amended complaint containing additional factual allegations was filed in the California Superior Court. The Company is not yet able to determine whether the ultimate resolution of this matter will have a material adverse effect on the Company’s financial condition or operations. The Oxygen Matter. On November 25, 2024, the Bank commenced arbitration through the American Arbitration Association seeking approximately $ 1.808 million from Oxygen, Inc. (“Oxygen”) owed under a Private Label Account Program Agreement related to unpaid invoices and indemnification obligations owed by Oxygen. On January 13, 2025, Oxygen answered the Bank’s arbitration demand, generally denying the allegations made by the Bank, and filed a Counterclaim against the Bank. The Counterclaim alleges (i) that the termination of the Private Label Account Program Agreement was pretextual, (ii) the Bank breached its notification obligations in terminating the Private Label Account Program Agreement, (iii) the Bank breached the implied covenant of good faith and fair dealing, and (iv) conversion of $ 1.2 million by the Bank. The ad damnum clause of the Counterclaim also seeks compensatory damages in an amount not less than $ 40 million. The Bank believes it has meritorious defenses and intends to vigorously defend against the Counterclaim. The Company is not yet able to determine whether the ultimate resolution of this matter will have a material adverse effect on the Company’s financial condition or operations. The Putative Class Action Matter. On March 14, 2025, Nathan Linden filed a putative securities class action complaint captioned Nathan Linden v. The Bancorp, Inc., et al. in the U.S. District Court for the District of Delaware against the Company and certain of its current and former officers. The complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder and purports to assert a class action on behalf of persons and entities that purchased or otherwise acquired Company securities between January 25, 2024 and March 4, 2025. The complaint alleges, among other things, that the defendants made materially false and/or misleading statements and omissions about the Company’s business, prospects, and operations, with a focus on the Company’s commercial real estate bridge loan (“REBL”) portfolio and related provision for credit losses. On September 29, 2025, the court appointed Southeastern Pennsylvania Transportation Authority (“SEPTA”) as lead plaintiff; the case is now captioned Southeastern Pennsylvania Transportation Authority v. The Bancorp, Inc., et al. On December 22, 2025, SEPTA filed its amended class action complaint, which alleges that between January 26, 2024 and March 25, 2025, the defendants made materially false and/or misleading statements and omissions about certain loans in the Company’s REBL portfolio and related provision for credit losses. The named plaintiff seeks unspecified damages, fees, interest, and costs. The Company intends to vigorously defend against the allegations in the amended complaint. On February 20, 2026, the Company filed its motion to dismiss the amended complaint. On April 21, 2026, SEPTA filed its opposition to the Company’s motion to dismiss. On June 5, 2026, the Company filed its reply in support of its motion to dismiss. The Court’s decision on the Company’s motion to dismiss the amended complaint remains pending.. The Company is not yet able to determine whether the ultimate resolution of the matter will have a material adverse effect on the Company’s financial condition or operations. The Ingenium Matter . On February 2, 2026, the Bank was made aware of a complaint filed in the Delaware Superior Court, Complex Commercial Division by Ingenium Capital Group, LLC (“Ingenium”) captioned as Ingenium Capital Group, LLC v. The Bancorp Bank, N.A., C.A. No. N26C-01-487 PAW CCLD. Prior to service of the complaint, on February 19, 2026, Ingenium filed its amended complaint. In the amended complaint, Ingenium alleges that the Bank committed fraud or breached a letter of understanding signed in January 2023 by inducing Ingenium to invest upwards of $ 10 million in Oxygen, Inc. (the same entity that the Bank is arbitrating against in the Oxygen Matter described above) and then by terminating its contract with Oxygen in February 2024. The amended complaint seeks not less than $ 10 million in damages, plus costs of litigation, and interest. The Bank intends to vigorously defend against the claims. On May 19, 2026, the Bank filed its motion to dismiss the amended complaint. On June 26, 2026, Ingenium filed its opposition to the Bank’s motion to dismiss. As of June 30, 2026, briefing on the Bank’s motion to dismiss had not yet been completed. We are not yet able to estimate any potential liability of the Bank. In addition, we are a party to various routine legal proceedings arising out of the ordinary course of our business. Management believes that none of these actions, individually or in the aggregate, will have a material adverse effect on our financial condition or operation. 24 Table of Contents Note 11. Segment Financials The Company's operations are substantially all located in the United States, and are reported under three segments: Fintech, Credit Solutions (which has three sub-segments) and Corporate. The following tables provide segment information for the periods indicated (dollars in thousands): Three months ended June 30, 2026 Credit Solutions Fintech REBL Institutional Banking Commercial Corporate Total Interest income $ 2,834 $ 45,103 $ 29,104 $ 32,883 $ 22,125 $ 132,049 Interest allocation 63,802 ( 24,265 ) ( 18,502 ) ( 17,894 ) ( 3,141 ) — Interest expense 32,897 — 1,226 10 7,450 41,583 Net interest income 33,739 20,838 9,376 14,979 11,534 90,466 Provision for credit losses (1) 25,765 ( 294 ) 60 1,071 ( 513 ) 26,089 Non-interest income (1) 67,366 2,772 733 1,929 240 73,040 Direct non-interest expense: Salaries and employee benefits 4,875 1,203 776 4,678 25,894 37,426 Data processing expense 378 48 647 1 313 1,387 Software 284 28 645 440 4,235 5,632 Other 2,482 1,192 274 1,823 6,260 12,031 Total direct non-interest expense 8,019 2,471 2,342 6,942 36,702 56,476 Income before non-interest expense allocations 67,321 21,433 7,707 8,895 ( 24,415 ) 80,941 Non-interest expense allocations: Risk, financial crimes, and compliance 7,838 713 942 1,541 ( 11,034 ) — Information technology and operations 3,735 242 1,123 2,133 ( 7,233 ) — Other allocated expenses 4,069 838 1,426 1,966 ( 8,299 ) — Total non-interest expense allocations 15,642 1,793 3,491 5,640 ( 26,566 ) — Income before taxes 51,679 19,640 4,216 3,255 2,151 80,941 Income tax expense 12,951 4,922 1,057 816 539 20,285 Net income $ 38,728 $ 14,718 $ 3,159 $ 2,439 $ 1,612 $ 60,656 Three months ended June 30, 2025 Credit Solutions Fintech REBL Institutional Banking Commercial Corporate Total Interest income $ 486 $ 48,904 $ 29,069 $ 32,990 $ 31,699 $ 143,148 Interest allocation 64,622 ( 23,479 ) ( 16,583 ) ( 16,947 ) ( 7,613 ) — Interest expense 42,814 — 888 10 1,944 45,656 Net interest income 22,294 25,425 11,598 16,033 22,142 97,492 Provision for credit losses (1) 43,233 ( 116 ) ( 146 ) 1,425 ( 33 ) 44,363 Non-interest income (1) 78,907 2,283 79 2,443 31 83,743 Direct non-interest expense: Salaries and employee benefits 4,401 1,160 2,545 4,688 24,340 37,134 Data processing expense 335 46 497 1 348 1,227 Software 148 27 717 505 3,747 5,144 Other 2,988 1,249 275 2,141 7,065 13,718 Total direct non-interest expense 7,872 2,482 4,034 7,335 35,500 57,223 Income before non-interest expense allocations 50,096 25,342 7,789 9,716 ( 13,294 ) 79,649 Non-interest expense allocations: Risk, financial crimes, and compliance 7,490 604 839 1,365 ( 10,298 ) — Information technology and operations 3,613 199 1,535 2,101 ( 7,448 ) — Other allocated expenses 4,091 833 1,755 1,958 ( 8,637 ) — Total non-interest expense allocations 15,194 1,636 4,129 5,424 ( 26,383 ) — Income before taxes 34,902 23,706 3,660 4,292 13,089 79,649 Income tax expense 8,689 5,901 911 1,068 3,259 19,828 Net income $ 26,213 $ 17,805 $ 2,749 $ 3,224 $ 9,830 $ 59,821 25 Table of Contents Six months ended June 30, 2026 Credit Solutions Fintech REBL Institutional Banking Commercial Corporate Total Interest income $ 4,660 $ 89,810 $ 56,948 $ 65,261 $ 45,161 $ 261,840 Interest allocation 120,762 ( 45,928 ) ( 34,137 ) ( 33,887 ) ( 6,810 ) — Interest expense 64,761 — 2,732 20 15,047 82,560 Net interest income 60,661 43,882 20,079 31,354 23,304 179,280 Provision for credit losses (1) 54,609 553 ( 100 ) ( 826 ) ( 546 ) 53,690 Non-interest income (1) 135,797 3,939 1,051 4,516 262 145,565 Direct non-interest expense Salaries and employee benefits 9,624 2,328 1,816 9,699 51,436 74,903 Data processing expense 759 92 1,228 3 614 2,696 Software 527 56 1,269 948 8,201 11,001 Other 5,169 2,428 550 3,864 10,891 22,902 Total direct non-interest expense 16,079 4,904 4,863 14,514 71,142 111,502 Income before non-interest expense allocations 125,770 42,364 16,367 22,182 ( 47,030 ) 159,653 Non-interest expense allocations: Risk, financial crimes, and compliance 15,649 1,420 1,881 3,071 ( 22,021 ) — Information technology and operations 7,538 497 2,335 4,436 ( 14,806 ) — Other allocated expenses 8,193 1,732 2,910 4,032 ( 16,867 ) — Total non-interest expense allocations 31,380 3,649 7,126 11,539 ( 53,694 ) — Income before taxes 94,390 38,715 9,241 10,643 6,664 159,653 Income tax expense 23,068 9,440 2,247 2,566 1,607 38,928 Net income $ 71,322 $ 29,275 $ 6,994 $ 8,077 $ 5,057 $ 120,725 Six months ended June 30, 2025 Credit Solutions Fintech REBL Institutional Banking Commercial Corporate Total Interest income $ 726 $ 96,775 $ 57,081 $ 64,897 $ 63,471 $ 282,950 Interest allocation 138,002 ( 47,848 ) ( 33,319 ) ( 34,663 ) ( 22,172 ) — Interest expense 85,557 — 2,531 20 5,607 93,715 Net interest income 53,171 48,927 21,231 30,214 35,692 189,235 Provision for credit losses (1) 89,101 192 ( 214 ) 2,189 ( 52 ) 91,216 Non-interest income (1) 159,249 2,803 354 4,785 194 167,385 Direct non-interest expense Salaries and employee benefits 8,730 2,374 5,345 9,978 44,376 70,803 Data processing expense 622 82 990 4 734 2,432 Software 306 53 1,483 979 7,336 10,157 Other 5,599 2,809 594 4,258 13,865 27,125 Total direct non-interest expense 15,257 5,318 8,412 15,219 66,311 110,517 Income before non-interest expense allocations 108,062 46,220 13,387 17,591 ( 30,373 ) 154,887 Non-interest expense allocations: Risk, financial crimes, and compliance 14,529 1,180 1,627 2,662 ( 19,998 ) — Information technology and operations 7,119 389 3,051 4,111 ( 14,670 ) — Other allocated expenses 8,178 1,657 3,444 3,884 ( 17,163 ) — Total non-interest expense allocations 29,826 3,226 8,122 10,657 ( 51,831 ) — Income before taxes 78,236 42,994 5,265 6,934 21,458 154,887 Income tax expense 19,140 10,518 1,288 1,696 5,251 37,893 Net income $ 59,096 $ 32,476 $ 3,977 $ 5,238 $ 16,207 $ 116,994 26 Table of Contents _______________ (1) The following table summarizes the Non-interest income of the Fintech segment from the above segment net income tables. Fintech loan credit enhancement income represents the estimated recovery from a Fintech partner for losses on Fintech loans, where the measurement of the expected loan loss recorded in Provision for credit losses and estimated recovery from credit enhancement are based on the same estimate. The remaining amount of Fintech non-interest income is other fee income. Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Fintech loan credit enhancement $ 25,766 $ 43,233 $ 54,609 $ 89,101 Fintech - other fee income 41,600 35,674 81,188 70,148 Fintech - Non-interest income, total $ 67,366 $ 78,907 $ 135,797 $ 159,249 June 30, 2026 Credit Solutions Fintech REBL Institutional Banking Commercial Corporate Total Total assets $ 1,014,634 $ 2,396,193 $ 2,081,888 $ 1,772,547 $ 1,950,715 $ 9,215,977 Total liabilities $ 7,146,532 $ 1,350 $ 240,205 $ 6,673 $ 1,115,836 $ 8,510,596 December 31, 2025 Credit Solutions Fintech REBL Institutional Banking Commercial Corporate Total Total assets $ 1,177,306 $ 2,362,489 $ 1,981,479 $ 1,762,882 $ 2,068,269 $ 9,352,425 Total liabilities $ 7,377,441 $ 1,817 $ 269,743 $ 5,591 $ 1,008,037 $ 8,662,629 27 Table of Contents