The Bancorp (TBBK)
We’re firm believers in The Bancorp. Its elite revenue growth and returns on capital demonstrate it can grow rapidly and profitably.― StockStory Analyst Team
1. News
2. Summary
Why We Like The Bancorp
Operating behind the scenes of many popular fintech apps and prepaid cards you might use daily, The Bancorp (NASDAQ:TBBK) is a bank holding company that specializes in providing banking services to fintech companies and offering specialty lending products.
- Market share has increased this cycle as its 21.3% annual revenue growth over the last five years was exceptional
- Incremental sales over the last five years have been highly profitable as its earnings per share increased by 33% annually, topping its revenue gains
- Annual tangible book value per share growth of 12.5% over the past five years was outstanding, reflecting strong capital accumulation this cycle
The Bancorp is a market leader. The valuation seems reasonable when considering its quality, so this might be a prudent time to invest in some shares.
Why Is Now The Time To Buy The Bancorp?
The Bancorp’s stock price of $67.15 implies a valuation ratio of 4.2x forward P/B. Sure, the valuation multiple seems high and could make for some share price rockiness. But given its fundamentals, we think the multiple is justified.
Our analysis and backtests consistently tell us that buying high-quality companies and holding them for many years leads to market outperformance. Over the long term, entry price doesn’t matter nearly as much as business fundamentals.
3. The Bancorp (TBBK) Research Report: Q4 CY2025 Update
Financial services company The Bancorp (NASDAQ:TBBK) missed Wall Street’s revenue expectations in Q4 CY2025, but sales rose 16.1% year on year to $172.6 million. Its GAAP profit of $1.28 per share was 9.9% below analysts’ consensus estimates.
The Bancorp (TBBK) Q4 CY2025 Highlights:
- Net Interest Income: $92.08 million vs analyst estimates of $101.1 million (2.4% year-on-year decline, 8.9% miss)
- Net Interest Margin: 4.3% vs analyst estimates of 4.6% (28 basis point miss)
- Revenue: $172.6 million vs analyst estimates of $194.1 million (16.1% year-on-year growth, 11.1% miss)
- Efficiency Ratio: 42.5% vs analyst estimates of 37.9% (465 basis point miss)
- EPS (GAAP): $1.28 vs analyst expectations of $1.42 (9.9% miss)
- Tangible Book Value per Share: $16.29 vs analyst estimates of $16.23 (1.6% year-on-year decline, in line)
- Market Capitalization: $2.95 billion
Company Overview
Operating behind the scenes of many popular fintech apps and prepaid cards you might use daily, The Bancorp (NASDAQ:TBBK) is a bank holding company that specializes in providing banking services to fintech companies and offering specialty lending products.
The Bancorp operates through two main segments: specialty lending and payments (also called Fintech Solutions). In its specialty lending business, the company offers securities-backed lines of credit, insurance policy-backed loans, commercial real estate bridge loans, and small business loans, many of which are backed by the Small Business Administration. It also provides vehicle fleet leasing services to businesses.
The payments segment generates most of The Bancorp's deposits and non-interest income. Here, the company issues debit and prepaid cards for various purposes—from general consumer spending to payroll, healthcare benefits, and corporate incentives. These cards are typically distributed through partnerships with fintech companies and other organizations that want to offer financial services to their customers without becoming banks themselves.
For example, when a fintech startup wants to offer banking services, it might partner with The Bancorp to handle the regulated banking functions while the startup focuses on the customer experience and technology. The Bancorp provides the necessary infrastructure, regulatory compliance, and payment processing capabilities behind the scenes.
The company also offers payment processing services for businesses, including ACH (Automated Clearing House) processing and card payment settlement. Through its Institutional Banking division, The Bancorp serves investment advisors, broker-dealers, and trust companies with specialized banking products.
The Bancorp's business model differs from traditional banks in that it focuses less on branch-based retail banking and more on providing banking-as-a-service infrastructure to other companies. This allows The Bancorp to reach customers nationwide without maintaining an extensive branch network.
4. Regional Banks
Regional banks, financial institutions operating within specific geographic areas, serve as intermediaries between local depositors and borrowers. They benefit from rising interest rates that improve net interest margins (the difference between loan yields and deposit costs), digital transformation reducing operational expenses, and local economic growth driving loan demand. However, these banks face headwinds from fintech competition, deposit outflows to higher-yielding alternatives, credit deterioration (increasing loan defaults) during economic slowdowns, and regulatory compliance costs. Recent concerns about regional bank stability following high-profile failures and significant commercial real estate exposure present additional challenges.
The Bancorp's competitors include Pathward Financial (NASDAQ:CASH) in the prepaid and debit card space, TriState Capital (acquired by Raymond James) for securities-backed lending, Live Oak Bank (NASDAQ:LOB) for SBA loans, and Bridge Investment Group (NYSE:BRDG) for real estate bridge lending.
5. Sales Growth
From lending activities to service fees, most banks build their revenue model around two income sources. Interest rate spreads between loans and deposits create the first stream, with the second coming from charges on everything from basic bank accounts to complex investment banking transactions. Thankfully, The Bancorp’s 20.3% annualized revenue growth over the last five years was incredible. Its growth surpassed the average banking company and shows its offerings resonate with customers, a great starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. The Bancorp’s annualized revenue growth of 22.9% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, The Bancorp’s revenue grew by 16.1% year on year to $172.6 million but fell short of Wall Street’s estimates.
Net interest income made up 67.3% of the company’s total revenue during the last five years, meaning lending operations are The Bancorp’s largest source of revenue.
Our experience and research show the market cares primarily about a bank’s net interest income growth as non-interest income is considered a lower-quality and non-recurring revenue source.
6. Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
The Bancorp’s EPS grew at an astounding 29% compounded annual growth rate over the last five years, higher than its 20.3% annualized revenue growth. However, this alone doesn’t tell us much about its business quality because its efficiency ratio didn’t improve.
Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.
For The Bancorp, its two-year annual EPS growth of 18.7% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.
In Q4, The Bancorp reported EPS of $1.28, up from $1.15 in the same quarter last year. Despite growing year on year, this print missed analysts’ estimates, but we care more about long-term EPS growth than short-term movements. Over the next 12 months, Wall Street expects The Bancorp’s full-year EPS of $4.92 to grow 30.6%.
7. Tangible Book Value Per Share (TBVPS)
Banks profit by intermediating between depositors and borrowers, making them fundamentally balance sheet-driven enterprises. Market participants emphasize balance sheet quality and sustained book value growth when evaluating these institutions.
When analyzing banks, tangible book value per share (TBVPS) takes precedence over many other metrics. This measure isolates genuine per-share value by removing intangible assets of debatable liquidation worth. EPS can become murky due to acquisition impacts or accounting flexibility around loan provisions, and TBVPS resists financial engineering manipulation.
The Bancorp’s TBVPS grew at an incredible 10.4% annual clip over the last five years. However, TBVPS growth has recently decelerated to 4% annual growth over the last two years (from $15.05 to $16.29 per share).
Over the next 12 months, Consensus estimates call for The Bancorp’s TBVPS to grow by 16.3% to $18.95, solid growth rate.
8. Balance Sheet Assessment
Leverage is core to a financial firm’s business model (loans funded by deposits). To ensure economic stability and avoid a repeat of the 2008 GFC, regulators require certain levels of capital and liquidity, focusing on the Tier 1 capital ratio.
Tier 1 capital is the highest-quality capital that a firm holds, consisting primarily of common stock and retained earnings, but also physical gold. It serves as the primary cushion against losses and is the first line of defense in times of financial distress.
This capital is divided by risk-weighted assets to derive the Tier 1 capital ratio. Risk-weighted means that cash and US treasury securities are assigned little risk while unsecured consumer loans and equity investments get much higher risk weights, for example.
New regulation after the 2008 financial crisis requires that all firms must maintain a Tier 1 capital ratio greater than 4.5%. On top of this, there are additional buffers based on scale, risk profile, and other regulatory classifications, so that at the end of the day, firms generally must maintain a 7-10% ratio at minimum.
Over the last two years, The Bancorp has averaged a Tier 1 capital ratio of 13.7%, which is considered safe and well capitalized in the event that macro or market conditions suddenly deteriorate.
9. Return on Equity
Return on equity, or ROE, tells us how much profit a company generates for each dollar of shareholder equity, a key funding source for banks. Over a long period, banks with high ROE tend to compound shareholder wealth faster through retained earnings, buybacks, and dividends.
Over the last five years, The Bancorp has averaged an ROE of 23.8%, exceptional for a company operating in a sector where the average shakes out around 7.5% and those putting up 15%+ are greatly admired. This shows The Bancorp has a strong competitive moat.
10. Key Takeaways from The Bancorp’s Q4 Results
We struggled to find many positives in these results. Its revenue missed and its net interest income fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 2.7% to $68.53 immediately after reporting.
11. Is Now The Time To Buy The Bancorp?
Updated: January 29, 2026 at 5:55 PM EST
Are you wondering whether to buy The Bancorp or pass? We urge investors to not only consider the latest earnings results but also longer-term business quality and valuation as well.
The Bancorp is a high-quality business worth owning. For starters, its revenue growth was exceptional over the last five years and is expected to accelerate over the next 12 months. And while its declining net interest margin shows its loan book is becoming less profitable, its admirable net interest margin a wonderful starting point for the overall profitability of the business. Additionally, The Bancorp’s astounding EPS growth over the last five years shows its profits are trickling down to shareholders.
The Bancorp’s P/B ratio based on the next 12 months is 3.7x. You get what you pay for, and in this case, the higher valuation is warranted because The Bancorp’s fundamentals shine bright. We think the stock is attractive here.
Wall Street analysts have a consensus one-year price target of $76.50 on the company (compared to the current share price of $68.53), implying they see 11.6% upside in buying The Bancorp in the short term.