The Bancorp (TBBK, Financial) reported an earnings per share (EPS) of $1.19 for the first quarter of 2025, marking a 12% increase compared to the same period in 2024. The positive earnings performance was driven by strategic adjustments to the balance sheet and an increase in deposits, which helped offset revenue pressures due to fluctuating interest rates.
The company saw its net interest margin decline to 4.07% in the first quarter of 2025, down from 5.15% in the first quarter of 2024 and 4.55% in the fourth quarter of 2024. Despite this decrease, The Bancorp's Fintech Solutions division demonstrated robust growth, with gross dollar volume (GDV) rising by 18% year-over-year and fee growth increasing by 26% year-over-year.
Looking ahead, the company reiterated its guidance for an EPS of $5.25 for the full year of 2025, not accounting for the impact of a $150 million stock buyback program authorized for the year. This forward guidance underscores The Bancorp's confidence in its ongoing strategic initiatives and market positioning.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 3 analysts, the average target price for The Bancorp Inc (TBBK, Financial) is $69.00 with a high estimate of $72.00 and a low estimate of $67.00. The average target implies an upside of 38.86% from the current price of $49.69. More detailed estimate data can be found on the The Bancorp Inc (TBBK) Forecast page.
Based on the consensus recommendation from 3 brokerage firms, The Bancorp Inc's (TBBK, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for The Bancorp Inc (TBBK, Financial) in one year is $40.84, suggesting a downside of 17.81% from the current price of $49.69. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the The Bancorp Inc (TBBK) Summary page.
TBBK Key Business Developments
Release Date: January 31, 2025
- Earnings Per Share (EPS): $1.50 for Q4 and $4.29 for the full year 2024; 41% increase for Q4 and 23% for the full year.
- Total Revenue Growth: 8% year-over-year, excluding $19.6 million of consumer fintech noninterest income.
- Fintech Fees Growth: 18% for the year, 29% in Q4 year-over-year.
- Gross Dollar Volume (GDV) Growth: 15% for the full year, 19% in Q4 year-over-year.
- Net Interest Margin: 4.55% in Q4 2024, compared to 4.78% in Q3 2024.
- Noninterest Income: $34.7 million in Q4 2024, 28% higher than Q4 2023.
- Noninterest Expense: $51.8 million in Q4 2024, 14% higher than Q4 2023.
- Year-End Deposits Growth: 16% year-over-year, reaching $6.99 billion.
- Credit Sponsorship Fee Growth: 91% quarter-over-quarter in Q4.
- Provision for Credit Losses: $2 million in Q4 2024, compared to $4.1 million in Q4 2023.
- Share Buyback: $250 million in 2024, with a planned $150 million in 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- The Bancorp Inc (TBBK, Financial) reported a significant year-over-year EPS increase of 41% for Q4 and 23% for the full year 2024.
- Fintech Solutions group drove profitability with a 16% year-over-year growth in deposits and a 19% growth in GDV for Q4.
- The company achieved a substantial reduction in shares by approximately 10% due to a $250 million buyback.
- Credit sponsorship fees grew 91% quarter over quarter, with loan balances increasing from $280 million to $454 million.
- The Bancorp Inc (TBBK) affirmed its 2025 guidance of $5.25 EPS, excluding $150 million of planned share buybacks.
Negative Points
- The net interest margin decreased to 4.55% in Q4 from 4.78% in Q3 2024, partly due to interest reversals on rebel loans.
- Noninterest expense increased by 14% year-over-year, driven by a 22% rise in salaries and benefits.
- The company recorded a $19.6 million provision for credit losses, offset by noninterest income, resulting in no net income impact.
- There were two smaller nonaccrual loans post-quarter end, totaling just under $10 million, indicating potential credit quality concerns.
- Buybacks for 2025 are reduced by $100 million compared to 2024 to facilitate the repayment of $96 million of senior secured debt.
