Faruqi & Faruqi, LLP Securities Litigation Partner James (Josh) Wilson Encourages Investors Who Suffered Losses Exceeding $50,000 In The Bancorp To Contact Him Directly To Discuss Their Options
If you suffered losses exceeding $50,000 in The Bancorp between January 25, 2024 and March 4, 2025 and would like to discuss your legal rights, call Faruqi & Faruqi partner Josh Wilson directly at 877-247-4292 or 212-983-9330 (Ext. 1310).
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NEW YORK, May 11, 2025 (GLOBE NEWSWIRE) — Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential claims against The Bancorp, Inc. (“TBBK” or the “Company”) (NASDAQ: TBBK) and reminds investors of the May 16, 2025 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the Company.
Faruqi & Faruqi is a leading national securities law firm with offices in New York, Pennsylvania, California and Georgia. The firm has recovered hundreds of millions of dollars for investors since its founding in 1995. See www.faruqilaw.com.
As detailed below, the complaint alleges that the Company and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose that: (1) that Bancorp had underrepresented the significant risk of default or loss on its REBL loan portfolio; (2) that the Company’s current expected credit loss methodology was insufficient to account for the provision and/or allowance of credit losses; (3) that, as a result of the foregoing, the Company was reasonably likely to increase its provision for credit losses; (4) that there were material weakness in its internal control over financial reporting; (5) that its financial statements had not been approved by its independent auditor; (6) that, as a result of the foregoing, the Company’s financial statements could not be relied upon; and (7) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
On March 21, 2024, at approximately 9:45 a.m. EST, Culper Research issued a report, alleging that the Company had underrepresented significant risks of default and/or loss on certain real estate bridge loans (“REBLs”). The report alleged the Company’s loan book is “rife with unsophisticated syndicated borrowers” who were “coaxed by promises of generational wealth through passive income” with “get rich quick” promises. The report alleged that the Company’s REBL loan portfolio is filled with apartments which are “quite literally, crumbling,” with high vacancies and multiple condemnations. The report stated the Company “blindly reassures investors that its book contains ‘no substantial risk of default or loss,’” but, in reality, the Company’s “REBL portfolio faces meaningful risks and will result in meaningful losses.” The report concluded that the Company’s reserve of only “$4.7 million in REBL loan allowances, representing a mere 0.24% of the total REBL book” is “short by an order of magnitude or more.”
On this news, the Company’s share price fell $3.63, or 10.15%, to close at $32.12 per share on March 21, 2024, on unusually heavy trading volume.
Then, on October 24, 2024, after the market closed, the Company announced its third quarter 2024 financial results in a press release for the period ended September 30, 2024, reporting $51.5 million in net income. The Company attributed the results in part, to “a new CECL [current expected credit losses methodology] factor” to the Company’s analysis of REBL loans classified as either special mention or substandard “which increased the provision for credit losses and resulted in an after-tax reduction in net income of $1.5 million.” The Company further explained its results also reflected “prior period interest income reversals on real estate bridge loans transferred to nonaccrual or modified” which “resulted in an after-tax reduction in net income of $1.2 million.”
On this news, the Company’s share price fell $7.95, or 14.47%, to close at $47.01 per share on October 25, 2024, on unusually heavy trading volume.
Finally, on March 4, 2025, after the market closed, Bancorp disclosed that its “financial statements for the fiscal years ended December 31, 2022 through 2024 as shown in the Annual Report should no longer be relied upon.” The Company explained that its auditors for those years “did not provide approval to include [the] audit opinion . . . or [the] consent to the incorporation by reference of their audit report in certain registration statements.” The Company further revealed it is “working expeditiously to perform and complete additional closing procedures related to accounting for consumer fintech loans in the allowance for credit losses” in order to file an amended annual report. The Company also revealed it “is evaluating the impact of this non-reliance on its conclusions regarding disclosure controls and procedures and internal control over financial reporting.” As a result of the foregoing, the Company stated it would be unable to file timely its fiscal year 2024 annual report.
On this news, the Company’s share price fell $2.34, or 4.38%, to close at $51.25 per share on March 5, 2025, on unusually heavy trading volume.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding The Bancorp’s conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
To learn more about the Bancorp class action, go to www.faruqilaw.com/TBBK or call Faruqi & Faruqi partner Josh Wilson directly at 877-247-4292 or 212-983-9330 (Ext. 1310).
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