The Bancorp reports net income of $62.8 million as diluted EPS grows 29.7%
Key Facts
The Bancorp reported net income of $62.8 million and diluted earnings of $1.53 per share in the third quarter of 2026, a year-over-year increase of 29.7% in diluted EPS. CEO Damian Kozlowski said the company "continued its strong momentum in fintech and took steps to support future growth and increase productivity and efficiency." The results reveal two diverging trends in the business: growth in loans, deposits and fintech fees, alongside a decline in net interest margin from its level a year earlier. At the same time, the company set core EPS guidance at $5.95 to $6.05 for 2026 and a core range of $7.00 to $7.20 for 2027.
Outstanding loans stood at $7.3 billion on September 30, up 9% from the third quarter of 2025, driven by growth in mortgage, group and fintech lending, according to the company's filing. Average deposits reached $8.419 billion in the third quarter, compared with $7.625 billion in the same period a year earlier. The expansion in loans and deposits shows that the balance sheet continued to grow during the period. However, in the second quarter the company had attributed the decline in net interest margin mainly to a shift in the portfolio mix toward fintech loans that primarily generate fees. In the second quarter, the margin was 3.85%, compared with 4.44% a year earlier, while net income was $60.7 million and diluted EPS was $1.45, a year-over-year increase of 14.2% in diluted EPS.
In its second-quarter earnings announcement, the company said performance exceeded its expectations for earnings and growth in card spending, and that it had raised its 2026 EPS guidance while keeping its 2027 range unchanged. In September, it announced plans to stop originating new small-business loans, both retail and wholesale, by the end of 2026, while continuing to serve existing customers and manage their portfolio. Management linked the reorganization to aligning employees, capital and technology with the opportunities it believes are best positioned to create sustainable value. In its September announcement, the company estimated that the restructuring would eliminate 64 jobs, or 9% of its workforce, and cost about $5.6 million, with $4.5 million expected to be recorded in the third quarter. The announcement places the organizational efficiency measures in the context of the company's shift in how it allocates resources and activities.
The Bancorp maintained its 2026 core EPS guidance at a range of $5.95 to $6.05 and provided a 2027 core range of $7.00 to $7.20 per share. In its second-quarter earnings announcement, management said that period's performance exceeded its expectations for earnings and card spending growth, and raised 2026 guidance while keeping the 2027 range unchanged at the time. The current guidance updates the level of core earnings the company is targeting for the current year and extends into next year. The announced information does not include guidance for 2028. Management will discuss the results and guidance on a call scheduled for October 30, 2026, at 8:00 a.m. Eastern Time.
The company is scheduled to hold a review call on its third-quarter results on October 30, 2026, at 8:00 a.m. Eastern Time. The call is set to be the next opportunity for management to present the period's results and its published guidance for 2026 and 2027. It follows the company's second-quarter announcement of net income of $60.7 million and diluted EPS of $1.45. These figures continue the comparison between earnings growth and shifts in the business mix and interest margin.