Workflow
The Bancorp (TBBK) Stumble Raises Questions About Loan Portfolio – Hagens Berman
TBBKThe Bancorp(TBBK) GlobeNewswire News Room·2025-03-13 00:40

Core Insights - The Bancorp, Inc. experienced a significant drop in share price following the announcement that its recently filed financial statements should no longer be relied upon, leading to a loss of 2.35pershareonMarch5,2025[1][3]−Thecompanyinvalidatedthreeyearsoffinancialreporting,specificallyforthefiscalyearsendedDecember31,2022through2024,whichraisedseriousconcernsamonginvestors[3][4]−Thesituationwasforeshadowedbyareportfromshort−sellerCulperResearch,whichaccusedBancorpofmisrepresentingthequalityofitsrealestatebridgeloanportfolioandunder−reservingforpotentialloanlosses[5][6]FinancialReportingIssues−Bancorp′slate−nightannouncementonMarch4,2025,revealedthatthefinancialstatementsfiledintheAnnualReportwerenolongerreliable,invalidatingthreeyearsoffinancialdata[3][4]−Thecompanyiscurrentlyworkingonadditionalproceduresrelatedtoaccountingforconsumerfintechloansinitsallowanceforcreditlosses[4]−Neithertheformerauditor,GrantThorntonLLP,northecurrentauditor,CroweLLP,providedfinalapprovalfortheirauditopinionsincludedinthereport[4]InvestigationsandAllegations−HagensBermanisinvestigatingpotentialsecuritieslawsviolationsandisurginginvestorswhosufferedlossestocomeforward[2][7]−TheinvestigationfocusesonwhetherBancorpmisledinvestorsregardingthequalityofitsloanportfoliosandadherencetoaccountingstandards[7]−TheCulperResearchreporthighlightedthatBancorp′sreservesof2.35 per share on March 5, 2025 [1][3] - The company invalidated three years of financial reporting, specifically for the fiscal years ended December 31, 2022 through 2024, which raised serious concerns among investors [3][4] - The situation was foreshadowed by a report from short-seller Culper Research, which accused Bancorp of misrepresenting the quality of its real estate bridge loan portfolio and under-reserving for potential loan losses [5][6] Financial Reporting Issues - Bancorp's late-night announcement on March 4, 2025, revealed that the financial statements filed in the Annual Report were no longer reliable, invalidating three years of financial data [3][4] - The company is currently working on additional procedures related to accounting for consumer fintech loans in its allowance for credit losses [4] - Neither the former auditor, Grant Thornton LLP, nor the current auditor, Crowe LLP, provided final approval for their audit opinions included in the report [4] Investigations and Allegations - Hagens Berman is investigating potential securities laws violations and is urging investors who suffered losses to come forward [2][7] - The investigation focuses on whether Bancorp misled investors regarding the quality of its loan portfolios and adherence to accounting standards [7] - The Culper Research report highlighted that Bancorp's reserves of 4.7 million were only 0.24% of its real estate bridge loan book, suggesting that actual losses could be significantly higher [6]