The Bancorp (TBBK) Stumble Raises Questions About Loan Portfolio – Hagens Berman

/EIN News/ -- SAN FRANCISCO, March 12, 2025 (GLOBE NEWSWIRE) -- The Bancorp, Inc. saw its shares plummet $2.35 on March 5, 2025, as investors grappled with the company’s startling admission that its recently filed financial statements should no longer be relied upon. This financial fumble, however, was not entirely unexpected, as it followed a prescient warning from short-seller Culper Research nearly a year earlier.

Hagens Berman is now investigating whether possible securities laws violations have occurred and urges investors who purchased Bancorp shares and suffered substantial losses to submit your losses now. The firm also encourages persons with knowledge that may assist the firm’s investigation to contact its attorneys.

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The Bancorp, Inc. (TBBK) Investigation:

In a late-night announcement on March 4, 2025, Bancorp dropped a bombshell on investors. The company revealed that with respect to the Annual Report filed just one day earlier, the "filed financial statements for the fiscal years ended December 31, 2022 through 2024 as shown in the Annual Report, should no longer be relied upon." This stunning disclosure effectively invalidated three years of financial reporting, sending shockwaves through the investment community.

Furthermore, Bancorp stated it was "working expeditiously" to complete additional procedures related to accounting for consumer fintech loans in its allowance for credit losses. The company also disclosed that neither its former auditor, Grant Thornton LLP, nor its current auditor, Crowe LLP, had provided final approval for the inclusion of their audit opinions in the report.

This financial fumble, however, was not entirely unexpected, as it followed a prescient warning from short-seller Culper Research nearly a year earlier. On March 21, 2024, Culper Research published a scathing report titled "The Bancorp Inc.: Bridge to Nowhere," which accused the company of misrepresenting the quality of its real estate bridge loan portfolio and significantly under-reserving for potential loan losses. The report, based on a loan-by-loan analysis and visits to 21 Bancorp-funded properties, raised serious concerns about the company's financial practices.

The Culper report's allegations seem to have foreshadowed these events. It pointed out that Bancorp's $4.7 million in reserves, at just 0.24% of its real estate bridge loan book, were "a total farce". A former Bancorp real estate bridge loan underwriter interviewed by Culper suggested that the company's losses could be 10 to 15 times higher than its actual reserves.

The controversy has sparked an investigation into whether Bancorp misled investors about the quality of its loan portfolios, its adherence to accounting rules, and the effectiveness of its internal controls.

"Our investigation is focused on uncovering whether Bancorp's financial statements accurately reflected the true state of its loan portfolios and whether the company adhered to proper accounting standards," said Reed Kathrein, the Hagens Berman Partner leading the firm’s probe.

If you invested in Bancorp and have substantial losses, or have knowledge that may assist the firm’s investigation, submit your losses now.

Whistleblowers: Persons with non-public information regarding Bancorp should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email TBBK@hbsslaw.com.

About Hagens Berman
Hagens Berman is a global plaintiffs’ rights complex litigation firm focusing on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings. Hagens Berman’s team has secured more than $2.9 billion in this area of law. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.

Contact:
Reed Kathrein, 844-916-0895