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.

FREQUENTLY ASKED QUESTIONS ABOUT THE CASE

What is the TBBK investigation about?

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.

WHAT SHOULD I DO?

I worked at TBBK. What should I do?

If you were an employee of TBBK, you may have valuable information that could be relevant to the investigation. Hagens Berman is one of the nation’s top whistleblower law firms, and has successfully represented many individuals who come forward with information regarding corporate malfeasance. Under the new SEC Whistleblower 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, contact Reed Kathrein at 844-916-0895 or [email protected].

There are multiple law firms participating, do I need to contact all of them?

No, you do not need to contact all participating law firms. Generally, class-action investigations and lawsuits are consolidated into a single case to streamline the legal process, and attorneys from only a few law firms are selected to serve in a leadership role on the consolidated case. Hagens Berman has a proven track record of being appointed to leadership roles in complex, multidistrict litigation regarding investor fraud and other consumer rights issues, and your claim will be handled by attorneys who have helped secure approximately $325 billion in class-action settlements on behalf of individuals who have suffered due to corporate malfeasance and the wrongdoing of other powerful institutions.

AM I ELIGIBLE?

What is the threshold amount to be eligible? What are “substantial” losses?

The threshold amount and the definition of "substantial" losses may vary depending on a number of factors specific to the case, including the size of the company, market cap, shares outstanding and who holds them and the damages alleged by the fraud. In general, to be eligible to participate in a class-action lawsuit, you must be able to demonstrate that you suffered financial losses as a result of the alleged wrongdoing and that your losses meet the criteria set by the court or law firm. Fill out the form and submit your losses.

CAN I PARTICIPATE?

Am I affected? What do I need to do to participate?

If you were an investor in TBBK, you may be affected and eligible to participate in the case. To determine your eligibility and potential involvement, fill out the form and submit your losses.

Can any TBBK investor participate?

In most class-action investigations and cases, any investor who meets the eligibility criteria, including purchasing the shares during the relevant period, can participate, regardless of the size of their investment. Fill out the form to find out your rights.

I bought on a non-U.S. Exchange. Can I participate?

No. This investigation only covers shares bought on a U.S. exchange, i.e. NASDAQ or NYSE. Fill out the form to find out your rights.

Am I included if I still hold my shares, or do I need to sell to participate?

Participation is based on purchasing shares during the relevant period, rather than your current holdings. Accordingly, you do not need to sell to participate. Fill out the form to find out your rights.