The Bancorp Charts Aggressive Fintech Growth Path, Unveils Upbeat Profit Outlook Through 2027
The Bancorp (NASDAQ: TBBK) concluded its fiscal year on a high note, using its fourth-quarter earnings call to chart an ambitious course for the coming years. Beyond solid quarterly results, executives painted a picture of a bank in transformation, where fintech partnerships are becoming the primary engine for growth and profitability.
CEO Damian Kozlowski reported quarterly earnings of $1.28 per share, an 11% increase from the prior year. A key growth indicator, gross dollar volume (GDV) from payments, jumped 16% year-over-year. For the full year, the momentum was even clearer: GDV rose 17% and total fee income surged 21%.
Perhaps more critical for investor confidence was the marked improvement in asset quality. Criticized assets plummeted 28% sequentially to $194 million, while delinquencies fell to 1.6% of loans from 2.19% the previous quarter. "We are seeing the benefits of our underwriting discipline and portfolio management," Kozlowski noted.
The core of the strategy rests on three fintech pillars. First, its credit sponsorship portfolio ballooned to $1.1 billion, smashing its year-end target. Management boldly projected this portfolio could reach $2 to $3 billion by the end of 2026. Second, an embedded finance platform is on track for a phased launch, aiming for completion by early 2026. Third, major program implementations, including with Cash App, remain on schedule to boost revenues starting next year.
CFO Dominic Canuso highlighted record profitability, with a quarterly return on equity (ROE) of 30.4%. The bank's balance sheet expanded to $9.4 billion in assets, fueled by a $919 million increase in loans—notably, $644 million came from consumer fintech lending. Capital return remained aggressive, with $375 million spent on buybacks in 2025, reducing shares outstanding by 12%.
Looking ahead, management issued confident guidance. They forecast 2026 EPS of $5.90 and provided a preliminary 2027 outlook of $8.25 per share. This trajectory implies a significant step-up in earnings, supported by planned $200 million in share repurchases next year. Canuso acknowledged that the revenue mix shift toward fee-generating fintech activities may pressure the net interest margin "near 4%," but expects fee income to rise to 35% of total revenue.
Analyst & Investor Commentary:
"The numbers speak for themselves—especially the credit metrics," said Michael Thorne, a portfolio manager at Horizon Capital. "A 28% drop in criticized assets in one quarter is exceptional. Their guidance for '27 is ambitious, but the fintech pipeline seems to justify it."
"I'm cautiously optimistic," noted Sarah Chen, a fintech analyst at Clearwater Research. "The embedded finance platform could be a game-changer if they execute. My concern is the scalability of their risk management as these partnerships grow exponentially."
"This is pure hype until we see sustained execution," argued David R. Feld, an independent banking consultant, striking a more skeptical tone. "Projecting a portfolio to triple in two years? Guiding to $8.25 EPS in 2027? They're asking for a huge leap of faith. The moment fintech growth stutters, this house of cards wobbles. The market is pricing in perfection."
The Bancorp's model, heavily reliant on Banking-as-a-Service (BaaS) partnerships, positions it at the intersection of finance and technology. Its latest results suggest this niche strategy is gaining powerful traction, though it also ties the bank's fate closely to the volatile fintech sector's health.
This analysis is based on The Bancorp's Q4 2025 earnings call and financial report.