Bancorp, Inc. — Call Transcript 2026

Hello everyone, and welcome to The Bancorp, Inc. first quarter 2026 earnings conference call. Please note that this call is being recorded. After the speaker's prepared remarks, there will be a question-and-answer session. If you'd like to ask a question during that time, please press star followed by one on your telephone keypad. Thank you. I'd now like to hand the call over to Andres Viroslav. Please go ahead. Thank you, operator. Good morning, and thank you for joining us today for The Bancorp's first quarter 2026 financial results conference call. On the call for me today are Damian Kozlowski, Chief Executive Officer, and Dominic Canuso, our Chief Financial Officer. This morning's call is being webcast on our website at www.thebancorp.com. There'll be a replay of the call available via webcast on our website beginning at approximately 12:00 P.M. Eastern Time today. The dial-in for the replay is +1 800-770-2030 with a passcode of 954517. Before I turn the call over to Damian, I would like to remind everyone that our comments and responses to questions reflects management's view as of today, April 24th, 2026. Yesterday, we issued our first quarter earnings release and updated investor presentation. Both are available on our investor relations website. We will make certain forward-looking statements on this call. These statements are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially from the expectations and assumptions we mention today. These factors and uncertainties are discussed in our reports and filings with the Securities and Exchange Commission. In addition, we'll be referring to certain non-GAAP financial measures during this call. Additional details and reconciliations of GAAP to adjusted non-GAAP financial measures are in the earnings release. Please note that The Bancorp undertakes no obligation to publicly release the results of any revisions to forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Now I'd like to turn the call over to The Bancorp's Chief Executive Officer, Damian Kozlowski. Damian? Thank you, Andres, and thank you for joining our call today. The Bancorp earned $1.41 a share in the fourth quarter. EPS growth year-over-year was 18%. First quarter ROE was 35.1% and ROA was 2.57%. Fintech GDV continues to grow above trend at 18% year-over-year. Revenue growth in the quarter, which includes both fee and spread revenue, was 15% year-over-year. Our three main fintech initiatives continue to move forward quickly and are well-positioned for success. Our onboarding of new programs and expansion of current programs continues at pace. Cash App program has been launched. It will ramp up during 2026 and 2027 and show progressive accretion to our financials. Credit sponsorship balances soared in the first quarter to $1.65 billion, a 50% not annualized increase over the fourth quarter of 2025. As previously stated, we expect to launch at least two significant additional programs in 2026. Announcements are subject to our partners' marketing timelines. Embedded finance platform is close to completing the development of its first operational use case. We plan to announce at least one client in this area in 2026. We also made continued progress in reducing our criticized assets, which includes both substandard and special mention assets. These assets declined from $194.5 million to $163.1 million or 16% quarter-over-quarter. We expect more progress over the next few quarters. Lastly, we are maintaining our guidance at $5.90 EPS for 2026 with $1.75 a share in the fourth quarter. Our expectation for 2027 EPS is in a range of $8.10-$8.30. 2026 buybacks are forecast to be $200 million total and $50 million quarter in 2026, with 2027 buybacks equal to near 100% of net income in the year. Our three major fintech initiatives, along with platform efficiency gains from restructuring and AI tools, plus a high level of capital return through continued buybacks, will be the driving forces behind EPS accretion. EPS gains are subject to development and implementation timelines in fintech. I now turn the call over to our CFO, Dominic Canuso. Dominic. Thanks, Damian. The first quarter builds on our momentum and strategy from 2025 and is setting up for a strong 2026. Ending loans for the quarter are $7.75 billion, which is a 9% non-annualized linked-quarter growth and 22% growth year-over-year. Credit sponsorship growth accounted for 88% of total loan growth linked-quarter and 83% of total loan growth year-over-year, bringing the segment to approximately 21% of total loans, up from 15% prior quarter and 9% a year ago. Our strategy is to continue to shift the loan mix towards the higher returning, lower cost credit sponsorship business. Average deposit growth was also a robust 9% non-annualized linked-quarter, fully funding the loan growth with an average deposit cost of 1.7% in the quarter, which was a 7 basis point decrease from prior quarter and 53 basis points lower than the prior year quarter. We also ended the quarter with $1.34 billion in off-balance sheet deposits comparing to $850 million at the end of the fourth quarter and $793 million prior year, demonstrating the continued growth of our partnership-based deposit franchise along with the strength of our overall liquidity position. NIM was 3.87% in the quarter, down 43 basis points from prior quarter and 20 basis points prior year's quarter. The decrease versus prior quarter is driven by both the mix shift in loans to credit sponsorship and the lagged impact of the lower short-term rates on variable rate loans. For some additional context on NIM, especially as we continue to mix shift loans towards fintech, our fintech lending fees are the equivalent to an additional 24 basis points of net interest margin. In addition, given the volume of off-balance-sheet deposits, we generated $900,000 from deposit sweep fees, which is recognized in other income, which equates to another 4 basis points of net interest margin. Net interest income mix, excluding credit enhancement, was 33%, compared to 30% in the fourth quarter and 29% in the first quarter of 2025. Fintech fee revenue is 29%, compared to 27% for both prior quarter and prior year quarter. It is important to note that the growth in the credit sponsorship loans that we saw in the quarter is a leading indicator of fintech fee growth both in the lending fees and higher transaction fees due to the higher volume of churn in that portfolio. Regarding credit, we continue to see improvement in both our current and leading credit metrics, with particular note in REBL and leasing. REBL criticized loans are down $24 million or 29% to $59 million from prior quarter, and down 75% over the last 18 months. When excluding fintech credit sponsorship loans, which are supported by full credit enhancement, our traditional lending portfolio saw a provision reversal of $1.3 million, even as the traditional lending portfolio grew in the quarter. The release of reserve was primarily driven by specific reserve reductions in our leasing portfolio that were established in the third quarter of 2025 as positive progress continues to be made with those borrowers. Net interest income for the quarter was $55 million, with an efficiency ratio of 41.5% when excluding the credit enhancement revenue. We continue to invest in the fintech platform, including building out embedded finance capabilities along with launching new products. At the same time, we are leveraging AI and redeploying costs across the organization to continue to improve efficiency and allocate resources to support our fintech initiatives. Operator, you may now open the call for questions. We are now opening the floor for question-and-answer session. If you'd like to ask a question, please press star followed by one on your telephone keypad. That's star followed by one on your telephone keypad. Your first question comes from the line of Joe Yanchunis of Raymond James. Your line is now open. Thank you, and good morning, guys. Good morning, Joe. With your 2026 EPS outlook reiterated, can you talk a little more about your embedded finance offering and this initiative's impact on 2026 results? I mean, how long will it take to onboard this first partner after announcement? Obviously, partner delays are a thing in this space, and just was hoping to get a little more color on that from your end. Yeah. We have very little revenue in store for embedded finance in 2026. We have more in 2027. You're exactly right. We're likely to announce at least one partner. It does take a while to fully build out the capability, depending on what the use case is. It could be very limited or it could be very broad. That impact of embedded finance will be felt in 2027 and 2028. Very little revenue is in our own plan for 2026 for embedded. Now, we do have revenue in there for continued sponsored lending growth and for a potential announcement around two new partners. That has more of an impact than the embedded would on our own budget. Got it. That's helpful. In your prepared remarks, you discussed some metrics behind your off-balance sheet deposit and that strategy. How should we expect this to evolve over the coming quarters? I assume the amount earned per deposit is based on the individual deposit costs, and correct me if I'm wrong there. Will the biggest driver of revenue growth from this be moving more deposits off balance sheet or getting better economics for deposits? It's both, right? Over time, we take the higher cost deposits off the balance sheet, and we do, depending on the program that we're taking off the balance sheet, we may get some spread on that. Right? It's in our own forecast, that's a small part. It's basically gravy. The way we look at our own forecasting over the next three to five years, it wouldn't be as we grow the other parts, the main initiatives, that's literally gravy on top. It's not a big part of our own planning. They're volatile, right? It depends on the program. They will grow. We'll have forced lower basis points on what we have to pay out as we take more higher yielding deposits off the balance sheet, and in select occasions, we will get some spread on transferring those deposits through our network to other banks. Okay. I appreciate that. What about The Aubrey? What are your current thoughts on the timing of selling that property, and has your expectation around the sale price changed given the recent softness that we've seen in rent prices? Additionally, has there been any thought behind redeploying those proceeds into share repurchases, or will you just accrete that to capital? Well, we're going to return 100%, as we've said before, of share buyback from our net income until we get a multiple that we think is appropriate for our ROE and growth. Whatever we get in net income, we'll distribute back to shareholders through buybacks. Dominic can give you a good Aubrey update. Sure. Good morning. Yeah. We continue to invest in the property, increase the occupancy rate. The occupancy rate of available rooms has been 80%, even as we've doubled it, and there are plans to continue to finish the remaining 50 units that need to be upgraded. We're just over 60% of occupancy on a total unit basis, and we expect to hit near 70% in the very near term. We expect the property to be operating break even by the end of this quarter, so its impact to our financials should be neutral. We've shifted a bit, given the significant progress and success in the continued occupancy from just removing it from the balance sheet to actually getting it to a stabilized valuation. Which may take a little longer, but ultimately result in better economics for the bank when we exit. Okay. That was helpful. I actually just want to dig into something that you said, Damian. I was under the impression that guidance implied $50 million of share repurchases per quarter in 2026, and then you returning 100% of net income or making the buyback 100% of net income in 2027. Would that mean if you sold The Aubrey? Does that mean you're going to sell The Aubrey in 2027, based on your answer? I think we'll be totally full if we're going to go to stabilization. That would probably be a first quarter next year event. There's close to 50 buildings on the property, right? There are nine left, and we're reconditioning those nine buildings over three phases over the next nine months. If we get to stabilization, probably would occur at the end of next year, where stabilization is in the high 80s, low 90s. We would be able at least to get obviously our basis covered. The appraisals are in the low 50s. If we were to monetize, it would be a rounding error to our buyback. We'll get our buyback. We're a little bit less than net income this year because we did so many buybacks last year that we're just building a little bit of extra equity into the end of this year, and then we would return 100% for the foreseeable future, we think, depending on the multiple. The exit on The Aubrey, if stabilized, if someone doesn't come in and just write a check. Our current intention is to fix those nine buildings, get it up to high 80s, 90, and then monetize it at this current time, because we've done so much work already. Right. Okay. Great. One last one from me here. How much of your balance sheet are you willing to dedicate to credit-enhanced loans over time? All of it. All of it? Okay. Oh, credit-enhanced or credit-sponsored loans? Which one do you mean? The credit sponsorship loans, the one that's I thought that's what you meant. There's two parts, right? There's credit-enhanced loans, and then there's also loans that we might do that are distributed, or we might take parts of bigger origination, slices of it, right? Keep it on the balance sheet. Of the sponsorship loans, it's possible when we're looking at our pipeline, that'll be a much bigger part of our business. Now, that's over many years. Remember, many of our businesses like SBA, the real estate business which we have distributed before, are fairly liquid assets. The same is true with our demand loans on the institutional. This is a multi-year thing, and it really depends on the programs. Chime's a very unique situation where we're using a lot of balance sheet. That's very unlikely to happen. There'll be some balance sheet used for future programs. Some might be bigger than others. Chime's a very special case. When we look at our APEX 2030 strategy, originally, we were thinking 10%, and then we thought more like 30% or 40% of the balance sheet possibly in the next three to four years. All right. That was helpful. Thank you for taking my questions. Your next question comes from the line of Manuel Navas of Piper Sandler. Your line is now open. Hey, good morning, guys. This is Grant on for Manuel. I just wanted to ask, could you talk a little bit more about the shift in LLR for fintech loans? It came in at 1.81% this quarter and was 2.84% last quarter. Could you just talk a little bit more about what drove that shift? Did you do more secured credit cards that require less? The economics, I'll let Dominic handle it. The overall economics, the NIM of the entire program, because it's in different places of the balance sheet and we fund it with non-interest-bearing deposits, is around 3% NIM. For the whole portfolio of products if you take a look at all the economics. The cost structure on that is not traditional lending, right? You're not supporting it with origination, all the things that you would on a traditional business. It's credit secured. The whole economics over the portfolio is around that would move up over time, potentially with different product sets. I'm only talking about Chime. Dominic, do you want to dig a little deeper? Sure. Grant, to your question, the secured product did outperform the growth in the quarter, and so there was a mix shift towards that product, which does have a lower loan loss reserve relative to the other products. Across all products, continues to improve, as you can see in those metrics. As the performance of customers along with the growth demonstrates the growth potential of the programs. Understood. Thank you. I also wanted to ask, what is kind of the pace of fintech loan growth from here? I see the goal was $2 billion by year-end. You're now at $1.67 billion, and you were at $1.1 billion at 4Q. How does this adjust other metrics like fee income or NIM? The success in the quarter we're very pleased with, and I think outran our internal expectations. It does not change our full year targets or expectations. I think what it does is demonstrate the strength of the balance sheet we'll see in the near term, along with the fees that we anticipate from the churn, particularly in that higher volume portfolio. Overall targets remain the same. I think there was just a little bit of a pull forward of volume that we anticipate, which is very positive, and we're excited to see. It just means that the balance sheet will be a little higher, earlier in this year than originally expected. All right. Thank you. That's it for me. Your next question comes from the line of Tim Switzer of KBW. Your line is now open. Hey, good morning. Thanks for taking my questions. Good morning, Tim. Damian, you mentioned in your opening comments that the new cash program has launched and will ramp up over the course of the year. It looks like we saw some acceleration in GDV. Was there any contribution at all this quarter? No, very little. No. Very little, right? Our partners are very meticulous when they launch these programs and so are we, so we go through a long testing phase, and then you start. We're in the full, I would say, turn the dial stage where everything is set. We're watching. You have incremental kind of gating issues. We've already passed the first gate, and we're ready to start turning up the dial. A lot of work has been done. Like I said, that by the end of the year, it should be fairly meaningful to our financials. It's all predicated on the timelines, right, of that gating. It's going very well so far. I think it's going to be good. You'll see that dial turned up through 2026 and then especially through the first part of 2027. Everything's going well and I think all of us, our partners, are all pleased with the implementation. Awesome. That's great to hear. It sounds like the real acceleration, like an inflection point kind of occurs in the beginning of 2027. Well, it'll ramp up this year. It'll start being meaningful. When we talk about our own forecast with our programs, we see a bump in the fourth quarter. That's part of the bump, right? It's not embedded finance like we were saying before, but it's definitely the Chime lending. It's definitely Cash App. Other programs that we'll announce other lending programs. We'll also announce other banking as a service programs over the course of the year. All those things will start meaningfully contributing by the end of this year, but then 2027, there will be multiple things ramping up together, which will really lead us into that 2027 guidance that we have. Okay, nice. You talked about this earlier with Grant's question on the 3% NIM, but I'm not sure if that was just the secured card or all the fintech loans, but could you kind of help us understand the economics? Yeah. The reason I said that is because I just wanted to give. There's a lot of confusion because we don't break it out separately, and it's in total economics, right? We're funding it, right, with non-interest bearing deposits, right? There's multiple different products. There's four, and it's growing. Different products. If you look at the entire economics of it today to The Bancorp, right? It's around 3% NIM for us, right? Because it's obviously being funded at zero. Is that just the secured card or all of the fintech? That's everything together. We don't give independent economics, but it's a blended economics. That's about what it is. Right? That potentially will grow over time, depending on the product mix. I think it's incredibly synergistic for both us and our partner. I think it works for us, for both of us. The programs have grown, obviously. It's been a great source of revenue, but also of relationship deepening for Chime, and we're trying to support their initiatives by using our balance sheet. Now, once again, that's a very unique relationship. I'm not saying that we will have 10 like we do with Chime. That's very unique, where we have a very deep relationship with them. Obviously, for the issuance of their cards and new products, and now their lending products. We look at the entire economics of the relationship. That 3% doesn't include, obviously, all the interchange. Our part of the interchange that Chime originates. On the secured card? No, not on secured card. If you look at all the products. Oh. Yeah, we're talking about all products, right? Any of their products where there's interchange involved, we get a portion of that. Plus, obviously, they have deposits that are sitting in the bank that are in excess of the non-interest-bearing deposits. There's some of their savings deposits. Some of those are off-balance-sheet, I would say. There's the lending part where if you add all the economics together, it's around 3%. Right? But it also has. It's secured. Remember, it's credit enhancement. Right? Separately, there's a whole stream of revenue, obviously, that appears in fees that's only linked to interchange. The third part of economics, there's other deposits that fund the bank. Excess deposits that aren't lent out that provide deposits to the bank too. It's such a broad, deep relationship that there's multiple revenue streams from the Chime relationship. Lending is just one of them. Yeah. Okay. I get that now. I'm getting a lot of questions about kind of the profitability on these loans. Because if we take the numbers that are, I guess, disclosed, then we can directly tie to those loans. If I take the fintech fees and the interest income and then those average balances, it looks like it's an annualized yield of about 2.7%. It's pushing off these non-fintech loans yielding nearly 7%. I know, obviously, you don't have credit risk. It's not a traditional loan where it costs as much to originate. Maybe it's just the broader parts of that relationship with Chime because I know all of this ties in together, like you mentioned. Well, you're not that far off, right? That's 2.7%. We're saying it's around 3% today, right? With the mix currently, right? The cost structure is radically different. It's only a fraction of traditional, right? You're getting a 3% NIM, and this, once again, is separate from the other two revenue streams. You're getting a 3% NIM, right? It's a fraction of the cost of traditional lending, and it has no risk of loss. Yeah. Think about that, right? That's like almost a bond, right? You could think about a short-term bond that's yielding 3%. Then you have all these other revenue streams that are coming off that, including increased spend. If you think about it, we're lending money out to people that wouldn't have used it otherwise, and that creates interchange, right? The velocity there is extremely quick. Right? We're talking about billions potentially every month that are going through those products, creating fees for Chime, obviously, but also creating economics for us. It's creating additional GDV spend. Yeah. That answers my question. Tim, this is Dominic. Just to add, I think the most important part here is the fact that each partner has unique expectations and unique designs, given the ability to generate deposits, generate transaction fees, whether it's debit or credit, parking loans on the balance sheet, and potentially off balance sheet in the future for loans, off balance sheet deposits that are excess, or funding other programs with deposits. We believe the economics to the partner are where they need to be for them to invest and grow in their programs, for us to see the returns on a total ROA and ROE basis that are accretive to where we are today, which is why we expect and intend to continue to shift the balance sheet towards these products. Got it. All that answered my question very clearly. Thank you. In terms of the velocity, can you maybe let us know what was the volume on the loans this quarter? How long are you holding these on the balance sheet on average? How might that change in the future, whether you guys change your strategy or these two upcoming credit sponsorship programs sound like they might be shorter duration. If you plan to transfer more with securitizations, anything like that would be really helpful. It's hard to give you clarity on that because we haven't announced. There's a bunch of different use cases, from wage access to longer-term installment loans. We intend to do all those things, right? We intend to provide some on-balance sheet, probably not as much as our current relationship with Chime, to other partners. We intend to securitize a lot of it, so you'll get incredibly high velocity. You'll hold those loans from three to 30 days, probably, at the most. Usually, it's only a few days. They'll be purchased back by the fintech partner, and then securitized. Then there is definitely a situation where we'll be holding pieces of loans at a much higher yield. Right? Loans that we like or if it's important to the product for us to hold, excuse me, partner to hold the strip, we will. Those loans will be very high. If you look at the NIM today of The Bancorp or where it is today, right? We're around 4% if you add back what Dominic was saying, the basis points and the fees that potentially could be viewed as interest, right? It's not that different. We had some deterioration in our NIM. If you add back the increased fees from this quarter versus last year, it's 12, 13 basis points different in NIM. Your net interest margin should go up over time, right? If you add back all those fees, depending on the programs. You're going to obviously have pressure on deposits going down, right? Because of our liquidity. We'll take more high-rate deposits off the balance sheet. When you look at these programs, the Chime situation is the lowest, probably the lowest NIM situation you would have because all the synergistic revenue. That over time, once again, adding back potential fees from the line that we have, that third line in our financials around fintech loan fees. Plus, you look, obviously the interest is. If there's any interest on those leases already in our NIM calculation, that after this initial stage should start moving up. Right? In many of these cases, these are velocity of loans. You'll be getting fees. You'll get effective yields, very short-term loans, very quick. Many of them will be backstop. They're securitized. You'll have a conversion of the balance sheet from traditional/non-traditional lending. There'll be less of a, potentially, traditional bank reserve. These are the structure of these loans. The velocity will go up very high. If you add back the fees on these loans, the NIM, the effective NIM on these loans over time will go up. Now, in the near term, they'll go down for the reasons that we've stated on the Chime program, but that should turn around as we add new partners. Great. Yeah. I mean, that's really helpful. I mean, regardless of where the reported NIM goes, APEX 2030, ROA 4%, ROTCE at 40%, bottom line is moving up. Yeah, just look at this quarter. We had a 35% ROE. Look at our ROA, right? If you consider that the fact that we're going to repatriating all our equity, our equity stays the same. Any increase as our net income moves up, obviously our ROE, ROA will continue to move up and our efficiency ratio is likely to move down. Yeah. That's great. Okay. Another area that has become a bigger and bigger opportunity in the fintech side of things for you guys is those off-balance sheet deposits, which I think have gotten to $1.3 billion right now. Your press release mentioned $900,000 earned on deposit sweeps in other income. Is that where all the revenue from your off-balance sheet deposits are reported? Just want to make sure I'm- I believe. capturing all the revenue. Yes. Dominic can answer that, but yes. That's correct. That's where it's located. Okay. Now, as Damian mentioned earlier on the call, the first quarter is seasonally high just because of tax season. We do expect it to contribute, but it's probably a secondary or tertiary benefit from all the strategies we just talked about. Okay. Yep. Makes sense. I think I'm the last analyst on this call, so I got a few more if that's okay. On the REBL book, good to see another quarter of improvement in the credit metrics there. Could you give us an update on how the maturities and refinancings within the REBL book are going right now? One thing I'm looking at is how the percentage of REBL balances maturing over the next 12 months declined meaningfully for the first time in a while in Q4. It's now less than 50%. Do you have that updated number for Q1? Because it kind of seems like that could indicate you're seeing less one-year extensions and more actual payoffs. Remember, we have great visibility. These are repositioning mostly of workforce housing, and they require work. There's constant draws, right? We have reserves and everything. The reason that we had that bubble when we did was because the origination period where we got back into the business, there were a lot of loans done at that time, right? We've maintained the portfolio, but that large bump in origination during that period that resulted in classified assets has worked through the system. Right? Those were the buildings that were having issues due to the supply shock, interest rate increases, sharp interest rate increases. That bubble has gone through the system. That's dropping because we just haven't had as many originations, right? If a project is completed, right, and it's on plan and everything, sometimes sponsors will want a year or two, and that's built into our contracts, two one-year extensions, and people take advantage of that sometimes. It's by mutual agreement. They're stabilized loans at that point. They may want to do an exit, and they don't exactly want to do it at this interest rate. Yeah, the reason that was so high was because of that bubble. That bubble is, I don't know the exact, maybe Dominic has it on his fingertips. Maybe we can publish it in the future. That is slowly working down quickly. Okay. All right. That's helpful. Kind of related to that, it looks like the average yield on the REBL book has gone down from about 8.5% to 7.6% in the last two quarters, which seems like a pretty quick decline. Could you talk about the drivers there in terms of maybe what new loans are coming on at versus rolling off? And how much of that decline could be due to some of these extensions or modifications? Go ahead, Dominic. You want to handle it? Sure. Yeah. Well, just as a reminder, a third of that portfolio is variable, so you'd clearly see a step down with the short-term interest rate environment that we've seen over the past year. To the point that you just spoke about, which was that large vintaging roll-through, again, they were on three-one-one contracts, many of which came to that second term and were either recapped or refinanced or sold out. Those recaps and refinances were at lower rates because they were at more stabilized values, previous investments, stronger investors. Those rates by the quality of the positioning of those loans brought down the rate combined with the variable rate environment. We do think we're at a good point now, having worked through that large vintage bubble and with the lower rates, that we should see much more stability going forward. You'll continue to see loans rolling off in the low eights and being put on in the mid sixes. You'll see that natural portfolio churn. That's just the interest rate environment we're in, nothing more than that. Okay. All right. That's helpful. The last one for me. Thanks for taking all these questions. Is there any risk or even opportunity from the proposed executive order on banks being required to obtain citizenship info? It seems like that would be a big lift for a lot of the BaaS banks, given the third-party relationships and how small some of these accounts are. On the opportunity side, would your prepaid card products be required to obtain citizenship info as well? Because it seems like it could push a lot of people towards those sort of products. Well, that would be a very difficult thing to do since prepaid cards, every prepaid card, that would be every incentive card. That'd be Cracker Barrel. You know what I mean? That'd be a restaurant card. That would be very difficult. Those deposits on those type of cards, in many cases, are not even insured deposits because you don't know who it is. We do have, I think versus many institutions, we have fairly good information in that area. If it gets implemented, if it becomes a requirement, everyone will have to do it, right? I'm sure there'll be an implementation phase. There might be new accounts. All those things aren't clear at this time, so we can't really comment on it. We do collect a lot of, depending on the type of account, and the use, there is a lot of ready information like Social Security numbers and everything for many of our, not of our clients, obviously, but of their clients that end up being deposits at our bank. There is requirements already in place. Right now, we don't know how that has to play out, how that actually gets worked through the system. Obviously, the regulators, everyone, FinCEN, everyone would have to be involved, and it would have to be implemented over long periods of time. Yeah. There's very little details exactly on how it works. Appreciate it. Thanks for taking all my questions, guys. No problem. Thank you. Thank you. I would now like to hand the call back to Damian Kozlowski for closing remarks. Thank you for joining us today, everyone. Operator, you may disconnect the call. Thank you for attending today's call. You may now disconnect. Goodbye

Speaker 5: Hello everyone, and welcome to The Bancorp, Inc. first quarter 2026 earnings conference call. Please note that this call is being recorded. After the speaker's prepared remarks, there will be a question-and-answer session. If you'd like to ask a question during that time, please press star followed by one on your telephone keypad. Thank you. I'd now like to hand the call over to Andres Viroslav. Please go ahead. Hello everyone, and welcome to The Bancorp, Inc. first quarter 2026 earnings conference call. hello everyone and welcome to the bancorp inc first quarter 2026 earnings conference call Please note that this call is being recorded. please note that this call is being recorded After the speaker's prepared remarks, there will be a question -and- answer session. after the speaker's prepared remarks there will be a question -and- answer session If you'd like to ask a question during that time, please press star followed by one on your telephone keypad. if you'd like to ask a question during that time please press star followed by one on your telephone keypad Thank you. thank you I'd now like to hand the call over to Andres Viroslav. i'd now like to hand the call over to andres viroslav Please go ahead. please go ahead

Speaker 1: Thank you, operator. Good morning, and thank you for joining us today for The Bancorp's first quarter 2026 financial results conference call. On the call for me today are Damian Kozlowski, Chief Executive Officer, and Dominic Canuso, our Chief Financial Officer. This morning's call is being webcast on our website at www.thebancorp.com. There'll be a replay of the call available via webcast on our website beginning at approximately 12:00 P.M. Eastern Time today. The dial-in for the replay is +1 800-770-2030 with a passcode of 954517. Before I turn the call over to Damian, I would like to remind everyone that our comments and responses to questions reflects management's view as of today, April 24th, 2026. Yesterday, we issued our first quarter earnings release and updated investor presentation. Both are available on our investor relations website. Thank you, operator. thank you operator Good morning, and thank you for joining us today for The Bancorp's first quarter 2026 financial results conference call. good morning and thank you for joining us today for the bancorp's first quarter 2026 financial results conference call On the call for me today are Damian Kozlowski, Chief Executive Officer, and Dominic Canuso, our Chief Financial Officer. on the call for me today are damian kozlowski chief executive officer and dominic canuso our chief financial officer This morning's call is being webcast on our website at www.thebancorp.com. this morning's call is being webcast on our website at www.thebancorp.com There'll be a replay of the call available via webcast on our website beginning at approximately 12:00 P.M. there'll be a replay of the call available via webcast on our website beginning at approximately 12:00 p.m Eastern Time today. eastern time today The dial-in for the replay is +1 800-770-2030 with a passcode of 954517. the dial-in for the replay is +1 800-770-2030 with a passcode of 954517 Before I turn the call over to Damian, I would like to remind everyone that our comments and responses to questions reflects management's view as of today, April 24th, 2026. before i turn the call over to damian i would like to remind everyone that our comments and responses to questions reflects management's view as of today april 24th 2026 Yesterday, we issued our first quarter earnings release and updated investor presentation. yesterday we issued our first quarter earnings release and updated investor presentation Both are available on our investor relations website. both are available on our investor relations website We will make certain forward-looking statements on this call. These statements are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially from the expectations and assumptions we mention today. These factors and uncertainties are discussed in our reports and filings with the Securities and Exchange Commission. In addition, we'll be referring to certain non-GAAP financial measures during this call. Additional details and reconciliations of GAAP to adjusted non-GAAP financial measures are in the earnings release. Please note that The Bancorp undertakes no obligation to publicly release the results of any revisions to forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. We will make certain forward-looking statements on this call. we will make certain forward-looking statements on this call These statements are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially from the expectations and assumptions we mention today. these statements are subject to the safe harbor provisions of the private securities litigation reform act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially from the expectations and assumptions we mention today These factors and uncertainties are discussed in our reports and filings with the Securities and Exchange Commission. these factors and uncertainties are discussed in our reports and filings with the securities and exchange commission In addition, we'll be referring to certain non-GAAP financial measures during this call. in addition we'll be referring to certain non-gaap financial measures during this call Additional details and reconciliations of GAAP to adjusted non-GAAP financial measures are in the earnings release. additional details and reconciliations of gaap to adjusted non-gaap financial measures are in the earnings release Please note that The Bancorp undertakes no obligation to publicly release the results of any revisions to forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. please note that the bancorp undertakes no obligation to publicly release the results of any revisions to forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events Now I'd like to turn the call over to The Bancorp's Chief Executive Officer, Damian Kozlowski. Damian? Now I'd like to turn the call over to The Bancorp's Chief Executive Officer, Damian Kozlowski. now i'd like to turn the call over to the bancorp's chief executive officer damian kozlowski Damian? damian

Speaker 2: Thank you, Andres, and thank you for joining our call today. The Bancorp earned $1.41 a share in the fourth quarter. EPS growth year-over-year was 18%. First quarter ROE was 35.1% and ROA was 2.57%. Fintech GDV continues to grow above trend at 18% year-over-year. Revenue growth in the quarter, which includes both fee and spread revenue, was 15% year-over-year. Our three main fintech initiatives continue to move forward quickly and are well-positioned for success. Our onboarding of new programs and expansion of current programs continues at pace. Cash App program has been launched. It will ramp up during 2026 and 2027 and show progressive accretion to our financials. Credit sponsorship balances soared in the first quarter to $1.65 billion, a 50% not annualized increase over the fourth quarter of 2025. Thank you, Andres, and thank you for joining our call today. thank you andres and thank you for joining our call today The Bancorp earned $1.41 a share in the fourth quarter. the bancorp earned $1.41 a share in the fourth quarter EPS growth year-over-year was 18%. eps growth year-over-year was 18% First quarter ROE was 35.1% and ROA was 2.57%. first quarter roe was 35.1% and roa was 2.57% Fintech GDV continues to grow above trend at 18% year-over-year. fintech gdv continues to grow above trend at 18% year-over-year Revenue growth in the quarter, which includes both fee and spread revenue, was 15% year-over-year. revenue growth in the quarter which includes both fee and spread revenue was 15% year-over-year Our three main fintech initiatives continue to move forward quickly and are well- positioned for success. our three main fintech initiatives continue to move forward quickly and are well- positioned for success Our onboarding of new programs and expansion of current programs continues at pace. our onboarding of new programs and expansion of current programs continues at pace Cash App program has been launched. cash app program has been launched It will ramp up during 2026 and 2027 and show progressive accretion to our financials. it will ramp up during 2026 and 2027 and show progressive accretion to our financials Credit sponsorship balances soared in the first quarter to $1.65 billion, a 50% not annualized increase over the fourth quarter of 2025. credit sponsorship balances soared in the first quarter to $1.65 billion a 50% not annualized increase over the fourth quarter of 2025 As previously stated, we expect to launch at least two significant additional programs in 2026. Announcements are subject to our partners' marketing timelines. Embedded finance platform is close to completing the development of its first operational use case. We plan to announce at least one client in this area in 2026. We also made continued progress in reducing our criticized assets, which includes both substandard and special mention assets. These assets declined from $194.5 million to $163.1 million or 16% quarter-over-quarter. We expect more progress over the next few quarters. Lastly, we are maintaining our guidance at $5.90 EPS for 2026 with $1.75 a share in the fourth quarter. Our expectation for 2027 EPS is in a range of $8.10-$8.30. As previously stated, we expect to launch at least two significant additional programs in 2026. as previously stated we expect to launch at least two significant additional programs in 2026 Announcements are subject to our partners' marketing timelines. announcements are subject to our partners' marketing timelines Embedded finance platform is close to completing the development of its first operational use case. embedded finance platform is close to completing the development of its first operational use case We plan to announce at least one client in this area in 2026. we plan to announce at least one client in this area in 2026 We also made continued progress in reducing our criticized assets, which includes both substandard and special mention assets. we also made continued progress in reducing our criticized assets which includes both substandard and special mention assets These assets declined from $194.5 million to $163.1 million or 16% quarter-over-quarter. these assets declined from $194.5 million to $163.1 million or 16% quarter-over-quarter We expect more progress over the next few quarters. we expect more progress over the next few quarters Lastly, we are maintaining our guidance at $5.90 EPS for 2026 with $1.75 a share in the fourth quarter. lastly we are maintaining our guidance at $5.90 eps for 2026 with $1.75 a share in the fourth quarter Our expectation for 2027 EPS is in a range of $8.10-$8.30. our expectation for 2027 eps is in a range of $8.10-$8.30 2026 buybacks are forecast to be $200 million total and $50 million quarter in 2026, with 2027 buybacks equal to near 100% of net income in the year. Our three major fintech initiatives, along with platform efficiency gains from restructuring and AI tools, plus a high level of capital return through continued buybacks, will be the driving forces behind EPS accretion. EPS gains are subject to development and implementation timelines in fintech. I now turn the call over to our CFO, Dominic Canuso. Dominic. 2026 buybacks are forecast to be $200 million total and $50 million quarter in 2026, with 2027 buybacks equal to near 100% of net income in the year. 2026 buybacks are forecast to be $200 million total and $50 million quarter in 2026 with 2027 buybacks equal to near 100% of net income in the year Our three major fintech initiatives, along with platform efficiency gains from restructuring and AI tools, plus a high level of capital return through continued buybacks, will be the driving forces behind EPS accretion. our three major fintech initiatives along with platform efficiency gains from restructuring and ai tools plus a high level of capital return through continued buybacks will be the driving forces behind eps accretion EPS gains are subject to development and implementation timelines in fintech. eps gains are subject to development and implementation timelines in fintech I now turn the call over to our CFO, Dominic Canuso. Dominic. i now turn the call over to our cfo dominic canuso. dominic

Speaker 3: Thanks, Damian. The first quarter builds on our momentum and strategy from 2025 and is setting up for a strong 2026. Ending loans for the quarter are $7.75 billion, which is a 9% non-annualized linked-quarter growth and 22% growth year-over-year. Credit sponsorship growth accounted for 88% of total loan growth linked-quarter and 83% of total loan growth year-over-year, bringing the segment to approximately 21% of total loans, up from 15% prior quarter and 9% a year ago. Our strategy is to continue to shift the loan mix towards the higher returning, lower cost credit sponsorship business. Average deposit growth was also a robust 9% non-annualized linked-quarter, fully funding the loan growth with an average deposit cost of 1.7% in the quarter, which was a 7 basis point decrease from prior quarter and 53 basis points lower than the prior year quarter. Thanks, Damian. thanks damian The first quarter builds on our momentum and strategy from 2025 and is setting up for a strong 2026. the first quarter builds on our momentum and strategy from 2025 and is setting up for a strong 2026 Ending loans for the quarter are $7.75 billion, which is a 9% non-annualized linked-quarter growth and 22% growth year-over-year. ending loans for the quarter are $7.75 billion which is a 9% non-annualized linked-quarter growth and 22% growth year-over-year Credit sponsorship growth accounted for 88% of total loan growth linked-quarter and 83% of total loan growth year-over-year, bringing the segment to approximately 21% of total loans, up from 15% prior quarter and 9% a year ago. credit sponsorship growth accounted for 88% of total loan growth linked-quarter and 83% of total loan growth year-over-year bringing the segment to approximately 21% of total loans up from 15% prior quarter and 9% a year ago Our strategy is to continue to shift the loan mix towards the higher returning, lower cost credit sponsorship business. our strategy is to continue to shift the loan mix towards the higher returning lower cost credit sponsorship business Average deposit growth was also a robust 9% non-annualized linked-quarter, fully funding the loan growth with an average deposit cost of 1.7% in the quarter, which was a 7 basis point decrease from prior quarter and 53 basis points lower than the prior year quarter. average deposit growth was also a robust 9% non-annualized linked-quarter fully funding the loan growth with an average deposit cost of 1.7% in the quarter which was a 7 basis point decrease from prior quarter and 53 basis points lower than the prior year quarter We also ended the quarter with $1.34 billion in off-balance sheet deposits comparing to $850 million at the end of the fourth quarter and $793 million prior year, demonstrating the continued growth of our partnership-based deposit franchise along with the strength of our overall liquidity position. NIM was 3.87% in the quarter, down 43 basis points from prior quarter and 20 basis points prior year's quarter. The decrease versus prior quarter is driven by both the mix shift in loans to credit sponsorship and the lagged impact of the lower short-term rates on variable rate loans. We also ended the quarter with $1.34 billion in off-balance sheet deposits comparing to $850 million at the end of the fourth quarter and $793 million prior year, demonstrating the continued growth of our partnership-based deposit franchise along with the strength of our overall liquidity position. we also ended the quarter with $1.34 billion in off-balance sheet deposits comparing to $850 million at the end of the fourth quarter and $793 million prior year demonstrating the continued growth of our partnership-based deposit franchise along with the strength of our overall liquidity position NIM was 3.87% in the quarter, down 43 basis points from prior quarter and 20 basis points prior year's quarter. nim was 3.87% in the quarter down 43 basis points from prior quarter and 20 basis points prior year's quarter The decrease versus prior quarter is driven by both the mix shift in loans to credit sponsorship and the lagged impact of the lower short-term rates on variable rate loans. the decrease versus prior quarter is driven by both the mix shift in loans to credit sponsorship and the lagged impact of the lower short-term rates on variable rate loans For some additional context on NIM, especially as we continue to mix shift loans towards fintech, our fintech lending fees are the equivalent to an additional 24 basis points of net interest margin. In addition, given the volume of off-balance-sheet deposits, we generated $900,000 from deposit sweep fees, which is recognized in other income, which equates to another 4 basis points of net interest margin. Net interest income mix, excluding credit enhancement, was 33%, compared to 30% in the fourth quarter and 29% in the first quarter of 2025. Fintech fee revenue is 29%, compared to 27% for both prior quarter and prior year quarter. For some additional context on NIM, especially as we continue to mix shift loans towards fintech, our fintech lending fees are the equivalent to an additional 24 basis points of net interest margin. for some additional context on nim especially as we continue to mix shift loans towards fintech our fintech lending fees are the equivalent to an additional 24 basis points of net interest margin In addition, given the volume of off-balance-sheet deposits, we generated $900,000 from deposit sweep fees, which is recognized in other income, which equates to another 4 basis points of net interest margin. in addition given the volume of off-balance-sheet deposits we generated $900,000 from deposit sweep fees which is recognized in other income which equates to another 4 basis points of net interest margin Net interest income mix, excluding credit enhancement, was 33%, compared to 30% in the fourth quarter and 29% in the first quarter of 2025. net interest income mix excluding credit enhancement was 33% compared to 30% in the fourth quarter and 29% in the first quarter of 2025 Fintech fee revenue is 29%, compared to 27% for both prior quarter and prior year quarter. fintech fee revenue is 29% compared to 27% for both prior quarter and prior year quarter It is important to note that the growth in the credit sponsorship loans that we saw in the quarter is a leading indicator of fintech fee growth both in the lending fees and higher transaction fees due to the higher volume of churn in that portfolio. Regarding credit, we continue to see improvement in both our current and leading credit metrics, with particular note in REBL and leasing. REBL criticized loans are down $24 million or 29% to $59 million from prior quarter, and down 75% over the last 18 months. When excluding fintech credit sponsorship loans, which are supported by full credit enhancement, our traditional lending portfolio saw a provision reversal of $1.3 million, even as the traditional lending portfolio grew in the quarter. It is important to note that the growth in the credit sponsorship loans that we saw in the quarter is a leading indicator of fintech fee growth both in the lending fees and higher transaction fees due to the higher volume of churn in that portfolio. it is important to note that the growth in the credit sponsorship loans that we saw in the quarter is a leading indicator of fintech fee growth both in the lending fees and higher transaction fees due to the higher volume of churn in that portfolio Regarding credit, we continue to see improvement in both our current and leading credit metrics, with particular note in REBL and leasing. regarding credit we continue to see improvement in both our current and leading credit metrics with particular note in rebl and leasing REBL criticized loans are down $24 million or 29% to $59 million from prior quarter, and down 75% over the last 18 months. rebl criticized loans are down $24 million or 29% to $59 million from prior quarter and down 75% over the last 18 months When excluding fintech credit sponsorship loans, which are supported by full credit enhancement, our traditional lending portfolio saw a provision reversal of $1.3 million, even as the traditional lending portfolio grew in the quarter. when excluding fintech credit sponsorship loans which are supported by full credit enhancement our traditional lending portfolio saw a provision reversal of $1.3 million even as the traditional lending portfolio grew in the quarter The release of reserve was primarily driven by specific reserve reductions in our leasing portfolio that were established in the third quarter of 2025 as positive progress continues to be made with those borrowers. Net interest income for the quarter was $55 million, with an efficiency ratio of 41.5% when excluding the credit enhancement revenue. We continue to invest in the fintech platform, including building out embedded finance capabilities along with launching new products. At the same time, we are leveraging AI and redeploying costs across the organization to continue to improve efficiency and allocate resources to support our fintech initiatives. Operator, you may now open the call for questions. The release of reserve was primarily driven by specific reserve reductions in our leasing portfolio that were established in the third quarter of 2025 as positive progress continues to be made with those borrowers. the release of reserve was primarily driven by specific reserve reductions in our leasing portfolio that were established in the third quarter of 2025 as positive progress continues to be made with those borrowers Net interest income for the quarter was $55 million, with an efficiency ratio of 41.5% when excluding the credit enhancement revenue. net interest income for the quarter was $55 million with an efficiency ratio of 41.5% when excluding the credit enhancement revenue We continue to invest in the fintech platform, including building out embedded finance capabilities along with launching new products. we continue to invest in the fintech platform including building out embedded finance capabilities along with launching new products At the same time, we are leveraging AI and redeploying costs across the organization to continue to improve efficiency and allocate resources to support our fintech initiatives. at the same time we are leveraging ai and redeploying costs across the organization to continue to improve efficiency and allocate resources to support our fintech initiatives Operator, you may now open the call for questions. operator you may now open the call for questions

Speaker 5: We are now opening the floor for question-and-answer session. If you'd like to ask a question, please press star followed by one on your telephone keypad. That's star followed by one on your telephone keypad. Your first question comes from the line of Joe Yanchunis of Raymond James. Your line is now open. We are now opening the floor for question- and- answer session. we are now opening the floor for question- and- answer session If you'd like to ask a question, please press star followed by one on your telephone keypad. if you'd like to ask a question please press star followed by one on your telephone keypad That's star followed by one on your telephone keypad. that's star followed by one on your telephone keypad Your first question comes from the line of Joe Yanchunis of Raymond James. your first question comes from the line of joe yanchunis of raymond james Your line is now open. your line is now open

Speaker 4: Thank you, and good morning, guys. Thank you, and good morning, guys. thank you and good morning guys

Speaker 2: Good morning, Joe. Good morning, Joe. good morning joe

Speaker 4: With your 2026 EPS outlook reiterated, can you talk a little more about your embedded finance offering and this initiative's impact on 2026 results? I mean, how long will it take to onboard this first partner after announcement? Obviously, partner delays are a thing in this space, and just was hoping to get a little more color on that from your end. With your 2026 EPS outlook reiterated, can you talk a little more about your embedded finance offering and this initiative's impact on 2026 results? with your 2026 eps outlook reiterated can you talk a little more about your embedded finance offering and this initiative's impact on 2026 results I mean, how long will it take to onboard this first partner after announcement? i mean how long will it take to onboard this first partner after announcement Obviously, partner delays are a thing in this space, and just was hoping to get a little more color on that from your end. obviously partner delays are a thing in this space and just was hoping to get a little more color on that from your end

Speaker 2: Yeah. We have very little revenue in store for embedded finance in 2026. We have more in 2027. You're exactly right. We're likely to announce at least one partner. It does take a while to fully build out the capability, depending on what the use case is. It could be very limited or it could be very broad. That impact of embedded finance will be felt in 2027 and 2028. Very little revenue is in our own plan for 2026 for embedded. Now, we do have revenue in there for continued sponsored lending growth and for a potential announcement around two new partners. That has more of an impact than the embedded would on our own budget. Yeah. yeah We have very little revenue in store for embedded finance in 2026. we have very little revenue in store for embedded finance in 2026 We have more in 2027. we have more in 2027 You're exactly right. you're exactly right We're likely to announce at least one partner. we're likely to announce at least one partner It does take a while to fully build out the capability, depending on what the use case is. it does take a while to fully build out the capability depending on what the use case is It could be very limited or it could be very broad. it could be very limited or it could be very broad That impact of embedded finance will be felt in 2027 and 2028. that impact of embedded finance will be felt in 2027 and 2028 Very little revenue is in our own plan for 2026 for embedded. very little revenue is in our own plan for 2026 for embedded Now, we do have revenue in there for continued sponsored lending growth and for a potential announcement around two new partners. now we do have revenue in there for continued sponsored lending growth and for a potential announcement around two new partners That has more of an impact than the embedded would on our own budget. that has more of an impact than the embedded would on our own budget

Speaker 4: Got it. That's helpful. In your prepared remarks, you discussed some metrics behind your off-balance sheet deposit and that strategy. How should we expect this to evolve over the coming quarters? I assume the amount earned per deposit is based on the individual deposit costs, and correct me if I'm wrong there. Will the biggest driver of revenue growth from this be moving more deposits off balance sheet or getting better economics for deposits? Got it. got it That's helpful. that's helpful In your prepared remarks, you discussed some metrics behind your off-balance sheet deposit and that strategy. in your prepared remarks you discussed some metrics behind your off-balance sheet deposit and that strategy How should we expect this to evolve over the coming quarters? how should we expect this to evolve over the coming quarters I assume the amount earned per deposit is based on the individual deposit costs, and correct me if I'm wrong there. i assume the amount earned per deposit is based on the individual deposit costs and correct me if i'm wrong there Will the biggest driver of revenue growth from this be moving more deposits off balance sheet or getting better economics for deposits? will the biggest driver of revenue growth from this be moving more deposits off balance sheet or getting better economics for deposits

Speaker 2: It's both, right? Over time, we take the higher cost deposits off the balance sheet, and we do, depending on the program that we're taking off the balance sheet, we may get some spread on that. Right? It's in our own forecast, that's a small part. It's basically gravy. The way we look at our own forecasting over the next three to five years, it wouldn't be as we grow the other parts, the main initiatives, that's literally gravy on top. It's not a big part of our own planning. They're volatile, right? It depends on the program. They will grow. We'll have forced lower basis points on what we have to pay out as we take more higher yielding deposits off the balance sheet, and in select occasions, we will get some spread on transferring those deposits through our network to other banks. It's both, right? it's both right Over time, we take the higher cost deposits off the balance sheet, and we do, depending on the program that we're taking off the balance sheet, we may get some spread on that. over time we take the higher cost deposits off the balance sheet and we do depending on the program that we're taking off the balance sheet we may get some spread on that Right? right It's in our own forecast, that's a small part. it's in our own forecast that's a small part It's basically gravy. it's basically gravy The way we look at our own forecasting over the next three to five years, it wouldn't be as we grow the other parts, the main initiatives, that's literally gravy on top. the way we look at our own forecasting over the next three to five years it wouldn't be as we grow the other parts the main initiatives that's literally gravy on top It's not a big part of our own planning. it's not a big part of our own planning They're volatile, right? they're volatile right It depends on the program. it depends on the program They will grow. they will grow We'll have forced lower basis points on what we have to pay out as we take more higher yielding deposits off the balance sheet, and in select occasions, we will get some spread on transferring those deposits through our network to other banks. we'll have forced lower basis points on what we have to pay out as we take more higher yielding deposits off the balance sheet and in select occasions we will get some spread on transferring those deposits through our network to other banks

Speaker 4: Okay. I appreciate that. What about The Aubrey? What are your current thoughts on the timing of selling that property, and has your expectation around the sale price changed given the recent softness that we've seen in rent prices? Additionally, has there been any thought behind redeploying those proceeds into share repurchases, or will you just accrete that to capital? Okay. okay I appreciate that. i appreciate that What about The Aubrey? what about the aubrey What are your current thoughts on the timing of selling that property, and has your expectation around the sale price changed given the recent softness that we've seen in rent prices? what are your current thoughts on the timing of selling that property and has your expectation around the sale price changed given the recent softness that we've seen in rent prices Additionally, has there been any thought behind redeploying those proceeds into share repurchases, or will you just accrete that to capital? additionally has there been any thought behind redeploying those proceeds into share repurchases or will you just accrete that to capital

Speaker 2: Well, we're going to return 100%, as we've said before, of share buyback from our net income until we get a multiple that we think is appropriate for our ROE and growth. Whatever we get in net income, we'll distribute back to shareholders through buybacks. Dominic can give you a good Aubrey update. Well, we're going to return 100%, as we've said before, of share buyback from our net income until we get a multiple that we think is appropriate for our ROE and growth. well we're going to return 100% as we've said before of share buyback from our net income until we get a multiple that we think is appropriate for our roe and growth Whatever we get in net income, we'll distribute back to shareholders through buybacks. whatever we get in net income we'll distribute back to shareholders through buybacks Dominic can give you a good Aubrey update. dominic can give you a good aubrey update

Speaker 3: Sure. Good morning. Yeah. We continue to invest in the property, increase the occupancy rate. The occupancy rate of available rooms has been 80%, even as we've doubled it, and there are plans to continue to finish the remaining 50 units that need to be upgraded. We're just over 60% of occupancy on a total unit basis, and we expect to hit near 70% in the very near term. We expect the property to be operating break even by the end of this quarter, so its impact to our financials should be neutral. We've shifted a bit, given the significant progress and success in the continued occupancy from just removing it from the balance sheet to actually getting it to a stabilized valuation. Which may take a little longer, but ultimately result in better economics for the bank when we exit. Sure. sure Good morning. good morning Yeah. yeah We continue to invest in the property, increase the occupancy rate. we continue to invest in the property increase the occupancy rate The occupancy rate of available rooms has been 80%, even as we've doubled it, and there are plans to continue to finish the remaining 50 units that need to be upgraded. the occupancy rate of available rooms has been 80% even as we've doubled it and there are plans to continue to finish the remaining 50 units that need to be upgraded We're just over 60% of occupancy on a total unit basis, and we expect to hit near 70% in the very near term. we're just over 60% of occupancy on a total unit basis and we expect to hit near 70% in the very near term We expect the property to be operating break even by the end of this quarter, so its impact to our financials should be neutral. we expect the property to be operating break even by the end of this quarter so its impact to our financials should be neutral We've shifted a bit, given the significant progress and success in the continued occupancy from just removing it from the balance sheet to actually getting it to a stabilized valuation. we've shifted a bit given the significant progress and success in the continued occupancy from just removing it from the balance sheet to actually getting it to a stabilized valuation Which may take a little longer, but ultimately result in better economics for the bank when we exit. which may take a little longer but ultimately result in better economics for the bank when we exit

Speaker 4: Okay. That was helpful. I actually just want to dig into something that you said, Damian. I was under the impression that guidance implied $50 million of share repurchases per quarter in 2026, and then you returning 100% of net income or making the buyback 100% of net income in 2027. Would that mean if you sold The Aubrey? Does that mean you're going to sell The Aubrey in 2027, based on your answer? Okay. okay That was helpful. that was helpful I actually just want to dig into something that you said, Damian. i actually just want to dig into something that you said damian I was under the impression that guidance implied $50 million of share repurchases per quarter in 2026, and then you returning 100% of net income or making the buyback 100% of net income in 2027. i was under the impression that guidance implied $50 million of share repurchases per quarter in 2026 and then you returning 100% of net income or making the buyback 100% of net income in 2027 Would that mean if you sold The Aubrey? would that mean if you sold the aubrey Does that mean you're going to sell The Aubrey in 2027, based on your answer? does that mean you're going to sell the aubrey in 2027 based on your answer

Speaker 2: I think we'll be totally full if we're going to go to stabilization. That would probably be a first quarter next year event. There's close to 50 buildings on the property, right? There are nine left, and we're reconditioning those nine buildings over three phases over the next nine months. If we get to stabilization, probably would occur at the end of next year, where stabilization is in the high 80s, low 90s. We would be able at least to get obviously our basis covered. The appraisals are in the low 50s. If we were to monetize, it would be a rounding error to our buyback. We'll get our buyback. I think we'll be totally full if we're going to go to stabilization. i think we'll be totally full if we're going to go to stabilization That would probably be a first quarter next year event. that would probably be a first quarter next year event There's close to 50 buildings on the property, right? there's close to 50 buildings on the property right There are nine left, and we're reconditioning those nine buildings over three phases over the next nine months. there are nine left and we're reconditioning those nine buildings over three phases over the next nine months If we get to stabilization, probably would occur at the end of next year, where stabilization is in the high 80s, low 90s. if we get to stabilization probably would occur at the end of next year where stabilization is in the high 80s, low 90s We would be able at least to get obviously our basis covered. we would be able at least to get obviously our basis covered The appraisals are in the low 50s. the appraisals are in the low 50s If we were to monetize, it would be a rounding error to our buyback. if we were to monetize it would be a rounding error to our buyback We'll get our buyback. we'll get our buyback We're a little bit less than net income this year because we did so many buybacks last year that we're just building a little bit of extra equity into the end of this year, and then we would return 100% for the foreseeable future, we think, depending on the multiple. The exit on The Aubrey, if stabilized, if someone doesn't come in and just write a check. Our current intention is to fix those nine buildings, get it up to high 80s, 90, and then monetize it at this current time, because we've done so much work already. We're a little bit less than net income this year because we did so many buybacks last year that we're just building a little bit of extra equity into the end of this year, and then we would return 100% for the foreseeable future, we think, depending on the multiple. we're a little bit less than net income this year because we did so many buybacks last year that we're just building a little bit of extra equity into the end of this year and then we would return 100% for the foreseeable future we think depending on the multiple The exit on The Aubrey, if stabilized, if someone doesn't come in and just write a check. the exit on the aubrey if stabilized if someone doesn't come in and just write a check Our current intention is to fix those nine buildings, get it up to high 80s, 90, and then monetize it at this current time, because we've done so much work already. our current intention is to fix those nine buildings get it up to high 80s, 90 and then monetize it at this current time because we've done so much work already

Speaker 4: Right. Okay. Great. One last one from me here. How much of your balance sheet are you willing to dedicate to credit-enhanced loans over time? Right. right Okay. okay Great. great One last one from me here. one last one from me here How much of your balance sheet are you willing to dedicate to credit-enhanced loans over time? how much of your balance sheet are you willing to dedicate to credit-enhanced loans over time

Speaker 2: All of it. All of it. all of it

Speaker 4: All of it? Okay. All of it? all of it Okay. okay

Speaker 2: Oh, credit-enhanced or credit-sponsored loans? Which one do you mean? Oh, credit-enhanced or credit-sponsored loans? oh credit-enhanced or credit-sponsored loans Which one do you mean? which one do you mean

Speaker 4: The credit sponsorship loans, the one that's The credit sponsorship loans, the one that's the credit sponsorship loans the one that's

Speaker 2: I thought that's what you meant. There's two parts, right? There's credit-enhanced loans, and then there's also loans that we might do that are distributed, or we might take parts of bigger origination, slices of it, right? Keep it on the balance sheet. Of the sponsorship loans, it's possible when we're looking at our pipeline, that'll be a much bigger part of our business. Now, that's over many years. Remember, many of our businesses like SBA, the real estate business which we have distributed before, are fairly liquid assets. The same is true with our demand loans on the institutional. This is a multi-year thing, and it really depends on the programs. Chime's a very unique situation where we're using a lot of balance sheet. That's very unlikely to happen. There'll be some balance sheet used for future programs. Some might be bigger than others. I thought that's what you meant. i thought that's what you meant There's two parts, right? there's two parts right There's credit-enhanced loans, and then there's also loans that we might do that are distributed, or we might take parts of bigger origination, slices of it, right? there's credit-enhanced loans and then there's also loans that we might do that are distributed or we might take parts of bigger origination slices of it right Keep it on the balance sheet. keep it on the balance sheet Of the sponsorship loans, it's possible when we're looking at our pipeline, that'll be a much bigger part of our business. of the sponsorship loans it's possible when we're looking at our pipeline that'll be a much bigger part of our business Now, that's over many years. now that's over many years Remember, many of our businesses like SBA, the real estate business which we have distributed before, are fairly liquid assets. remember many of our businesses like sba the real estate business which we have distributed before are fairly liquid assets The same is true with our demand loans on the institutional. the same is true with our demand loans on the institutional This is a multi-year thing, and it really depends on the programs. this is a multi-year thing and it really depends on the programs Chime's a very unique situation where we're using a lot of balance sheet. chime's a very unique situation where we're using a lot of balance sheet That's very unlikely to happen. that's very unlikely to happen There'll be some balance sheet used for future programs. there'll be some balance sheet used for future programs Some might be bigger than others. some might be bigger than others Chime's a very special case. When we look at our APEX 2030 strategy, originally, we were thinking 10%, and then we thought more like 30% or 40% of the balance sheet possibly in the next three to four years. Chime's a very special case. chime's a very special case When we look at our APEX 2030 strategy, originally, we were thinking 10%, and then we thought more like 30% or 40% of the balance sheet possibly in the next three to four years. when we look at our apex 2030 strategy originally we were thinking 10% and then we thought more like 30% or 40% of the balance sheet possibly in the next three to four years

Speaker 4: All right. That was helpful. Thank you for taking my questions. All right. all right That was helpful. that was helpful Thank you for taking my questions. thank you for taking my questions

Speaker 5: Your next question comes from the line of Manuel Navas of Piper Sandler. Your line is now open. Your next question comes from the line of Manuel Navas of Piper Sandler. your next question comes from the line of manuel navas of piper sandler Your line is now open. your line is now open

Speaker 7: Hey, good morning, guys. This is Grant on for Manuel. I just wanted to ask, could you talk a little bit more about the shift in LLR for fintech loans? It came in at 1.81% this quarter and was 2.84% last quarter. Could you just talk a little bit more about what drove that shift? Did you do more secured credit cards that require less? Hey, good morning, guys. hey good morning guys This is Grant on for Manuel. this is grant on for manuel I just wanted to ask, could you talk a little bit more about the shift in LLR for fintech loans? i just wanted to ask could you talk a little bit more about the shift in llr for fintech loans It came in at 1.81% this quarter and was 2.84% last quarter. it came in at 1.81% this quarter and was 2.84% last quarter Could you just talk a little bit more about what drove that shift? could you just talk a little bit more about what drove that shift Did you do more secured credit cards that require less? did you do more secured credit cards that require less

Speaker 2: The economics, I'll let Dominic handle it. The overall economics, the NIM of the entire program, because it's in different places of the balance sheet and we fund it with non-interest-bearing deposits, is around 3% NIM. For the whole portfolio of products if you take a look at all the economics. The cost structure on that is not traditional lending, right? You're not supporting it with origination, all the things that you would on a traditional business. It's credit secured. The whole economics over the portfolio is around that would move up over time, potentially with different product sets. I'm only talking about Chime. Dominic, do you want to dig a little deeper? The economics, I'll let Dominic handle it. the economics i'll let dominic handle it The overall economics, the NIM of the entire program, because it's in different places of the balance sheet and we fund it with non-interest-bearing deposits, is around 3% NIM. the overall economics the nim of the entire program because it's in different places of the balance sheet and we fund it with non-interest-bearing deposits is around 3% nim For the whole portfolio of products if you take a look at all the economics. for the whole portfolio of products if you take a look at all the economics The cost structure on that is not traditional lending, right? the cost structure on that is not traditional lending right You're not supporting it with origination, all the things that you would on a traditional business. you're not supporting it with origination all the things that you would on a traditional business It's credit secured. it's credit secured The whole economics over the portfolio is around that would move up over time, potentially with different product sets. the whole economics over the portfolio is around that would move up over time potentially with different product sets I'm only talking about Chime. i'm only talking about chime Dominic, do you want to dig a little deeper? dominic do you want to dig a little deeper

Speaker 3: Sure. Grant, to your question, the secured product did outperform the growth in the quarter, and so there was a mix shift towards that product, which does have a lower loan loss reserve relative to the other products. Across all products, continues to improve, as you can see in those metrics. As the performance of customers along with the growth demonstrates the growth potential of the programs. Sure. sure Grant, to your question, the secured product did outperform the growth in the quarter, and so there was a mix shift towards that product, which does have a lower loan loss reserve relative to the other products. grant to your question the secured product did outperform the growth in the quarter and so there was a mix shift towards that product which does have a lower loan loss reserve relative to the other products Across all products, continues to improve, as you can see in those metrics. across all products continues to improve as you can see in those metrics As the performance of customers along with the growth demonstrates the growth potential of the programs. as the performance of customers along with the growth demonstrates the growth potential of the programs

Speaker 7: Understood. Thank you. I also wanted to ask, what is kind of the pace of fintech loan growth from here? I see the goal was $2 billion by year-end. You're now at $1.67 billion, and you were at $1.1 billion at 4Q. How does this adjust other metrics like fee income or NIM? Understood. understood Thank you. thank you I also wanted to ask, what is kind of the pace of fintech loan growth from here? i also wanted to ask what is kind of the pace of fintech loan growth from here I see the goal was $2 billion by year-end. i see the goal was $2 billion by year-end You're now at $1.67 billion, and you were at $1.1 billion at 4Q. you're now at $1.67 billion and you were at $1.1 billion at 4q How does this adjust other metrics like fee income or NIM? how does this adjust other metrics like fee income or nim

Speaker 3: The success in the quarter we're very pleased with, and I think outran our internal expectations. It does not change our full year targets or expectations. I think what it does is demonstrate the strength of the balance sheet we'll see in the near term, along with the fees that we anticipate from the churn, particularly in that higher volume portfolio. Overall targets remain the same. I think there was just a little bit of a pull forward of volume that we anticipate, which is very positive, and we're excited to see. It just means that the balance sheet will be a little higher, earlier in this year than originally expected. The success in the quarter we're very pleased with, and I think outran our internal expectations. the success in the quarter we're very pleased with and i think outran our internal expectations It does not change our full year targets or expectations. it does not change our full year targets or expectations I think what it does is demonstrate the strength of the balance sheet we'll see in the near term, along with the fees that we anticipate from the churn, particularly in that higher volume portfolio. i think what it does is demonstrate the strength of the balance sheet we'll see in the near term along with the fees that we anticipate from the churn particularly in that higher volume portfolio Overall targets remain the same. overall targets remain the same I think there was just a little bit of a pull forward of volume that we anticipate, which is very positive, and we're excited to see. i think there was just a little bit of a pull forward of volume that we anticipate which is very positive and we're excited to see It just means that the balance sheet will be a little higher, earlier in this year than originally expected. it just means that the balance sheet will be a little higher earlier in this year than originally expected

Speaker 7: All right. Thank you. That's it for me. All right. all right Thank you. thank you That's it for me. that's it for me

Speaker 5: Your next question comes from the line of Tim Switzer of KBW. Your line is now open. Your next question comes from the line of Tim Switzer of KBW. your next question comes from the line of tim switzer of kbw Your line is now open. your line is now open

Speaker 6: Hey, good morning. Thanks for taking my questions. Hey, good morning. hey good morning Thanks for taking my questions. thanks for taking my questions

Speaker 2: Good morning, Tim. Good morning, Tim. good morning tim

Speaker 6: Damian, you mentioned in your opening comments that the new cash program has launched and will ramp up over the course of the year. It looks like we saw some acceleration in GDV. Was there any contribution at all this quarter? Damian, you mentioned in your opening comments that the new cash program has launched and will ramp up over the course of the year. damian you mentioned in your opening comments that the new cash program has launched and will ramp up over the course of the year It looks like we saw some acceleration in GDV. it looks like we saw some acceleration in gdv Was there any contribution at all this quarter? was there any contribution at all this quarter

Speaker 2: No, very little. No. Very little, right? Our partners are very meticulous when they launch these programs and so are we, so we go through a long testing phase, and then you start. We're in the full, I would say, turn the dial stage where everything is set. We're watching. You have incremental kind of gating issues. We've already passed the first gate, and we're ready to start turning up the dial. A lot of work has been done. Like I said, that by the end of the year, it should be fairly meaningful to our financials. It's all predicated on the timelines, right, of that gating. It's going very well so far. I think it's going to be good. You'll see that dial turned up through 2026 and then especially through the first part of 2027. No, very little. no very little No. no Very little, right? very little right Our partners are very meticulous when they launch these programs and so are we, so we go through a long testing phase, and then you start. our partners are very meticulous when they launch these programs and so are we so we go through a long testing phase and then you start We're in the full, I would say, turn the dial stage where everything is set. we're in the full i would say turn the dial stage where everything is set We're watching. we're watching You have incremental kind of gating issues. you have incremental kind of gating issues We've already passed the first gate, and we're ready to start turning up the dial. we've already passed the first gate and we're ready to start turning up the dial A lot of work has been done. a lot of work has been done Like I said, that by the end of the year, it should be fairly meaningful to our financials. like i said that by the end of the year it should be fairly meaningful to our financials It's all predicated on the timelines, right, of that gating. it's all predicated on the timelines right of that gating It's going very well so far. it's going very well so far I think it's going to be good. i think it's going to be good You'll see that dial turned up through 2026 and then especially through the first part of 2027. you'll see that dial turned up through 2026 and then especially through the first part of 2027 Everything's going well and I think all of us, our partners, are all pleased with the implementation. Everything's going well and I think all of us, our partners, are all pleased with the implementation. everything's going well and i think all of us our partners are all pleased with the implementation

Speaker 6: Awesome. That's great to hear. It sounds like the real acceleration, like an inflection point kind of occurs in the beginning of 2027. Awesome. awesome That's great to hear. that's great to hear It sounds like the real acceleration, like an inflection point kind of occurs in the beginning of 2027. it sounds like the real acceleration like an inflection point kind of occurs in the beginning of 2027

Speaker 2: Well, it'll ramp up this year. It'll start being meaningful. When we talk about our own forecast with our programs, we see a bump in the fourth quarter. That's part of the bump, right? It's not embedded finance like we were saying before, but it's definitely the Chime lending. It's definitely Cash App. Other programs that we'll announce other lending programs. We'll also announce other banking as a service programs over the course of the year. All those things will start meaningfully contributing by the end of this year, but then 2027, there will be multiple things ramping up together, which will really lead us into that 2027 guidance that we have. Well, it'll ramp up this year. well it'll ramp up this year It'll start being meaningful. it'll start being meaningful When we talk about our own forecast with our programs, we see a bump in the fourth quarter. when we talk about our own forecast with our programs we see a bump in the fourth quarter That's part of the bump, right? that's part of the bump right It's not embedded finance like we were saying before, but it's definitely the Chime lending. it's not embedded finance like we were saying before but it's definitely the chime lending It's definitely Cash App. it's definitely cash app Other programs that we'll announce other lending programs. other programs that we'll announce other lending programs We'll also announce other banking as a service programs over the course of the year. we'll also announce other banking as a service programs over the course of the year All those things will start meaningfully contributing by the end of this year, but then 2027, there will be multiple things ramping up together, which will really lead us into that 2027 guidance that we have. all those things will start meaningfully contributing by the end of this year but then 2027 there will be multiple things ramping up together which will really lead us into that 2027 guidance that we have

Speaker 6: Okay, nice. You talked about this earlier with Grant's question on the 3% NIM, but I'm not sure if that was just the secured card or all the fintech loans, but could you kind of help us understand the economics? Okay, nice. okay nice You talked about this earlier with Grant's question on the 3% NIM, but I'm not sure if that was just the secured card or all the fintech loans, but could you kind of help us understand the economics? you talked about this earlier with grant's question on the 3% nim but i'm not sure if that was just the secured card or all the fintech loans but could you kind of help us understand the economics

Speaker 2: Yeah. The reason I said that is because I just wanted to give. There's a lot of confusion because we don't break it out separately, and it's in total economics, right? We're funding it, right, with non-interest bearing deposits, right? There's multiple different products. There's four, and it's growing. Different products. If you look at the entire economics of it today to The Bancorp, right? It's around 3% NIM for us, right? Because it's obviously being funded at zero. Yeah. yeah The reason I said that is because I just wanted to give. the reason i said that is because i just wanted to give There's a lot of confusion because we don't break it out separately, and it's in total economics, right? there's a lot of confusion because we don't break it out separately and it's in total economics right We're funding it, right, with non-interest bearing deposits, right? we're funding it right with non-interest bearing deposits right There's multiple different products. there's multiple different products There's four, and it's growing. there's four and it's growing Different products. different products If you look at the entire economics of it today to The Bancorp , right? if you look at the entire economics of it today to the bancorp right It's around 3% NIM for us, right? it's around 3% nim for us right Because it's obviously being funded at zero. because it's obviously being funded at zero

Speaker 6: Is that just the secured card or all of the fintech? Is that just the secured card or all of the fintech? is that just the secured card or all of the fintech

Speaker 2: That's everything together. We don't give independent economics, but it's a blended economics. That's about what it is. Right? That potentially will grow over time, depending on the product mix. I think it's incredibly synergistic for both us and our partner. I think it works for us, for both of us. The programs have grown, obviously. It's been a great source of revenue, but also of relationship deepening for Chime, and we're trying to support their initiatives by using our balance sheet. Now, once again, that's a very unique relationship. I'm not saying that we will have 10 like we do with Chime. That's very unique, where we have a very deep relationship with them. Obviously, for the issuance of their cards and new products, and now their lending products. We look at the entire economics of the relationship. That 3% doesn't include, obviously, all the interchange. That's everything together. that's everything together We don't give independent economics, but it's a blended economics. we don't give independent economics but it's a blended economics That's about what it is. that's about what it is Right? right That potentially will grow over time, depending on the product mix. that potentially will grow over time depending on the product mix I think it's incredibly synergistic for both us and our partner. i think it's incredibly synergistic for both us and our partner I think it works for us, for both of us. i think it works for us for both of us The programs have grown, obviously. the programs have grown obviously It's been a great source of revenue, but also of relationship deepening for Chime, and we're trying to support their initiatives by using our balance sheet. it's been a great source of revenue but also of relationship deepening for chime and we're trying to support their initiatives by using our balance sheet Now, once again, that's a very unique relationship. I'm not saying that we will have 10 like we do with Chime. now once again that's a very unique relationship. i'm not saying that we will have 10 like we do with chime That's very unique, where we have a very deep relationship with them. that's very unique where we have a very deep relationship with them Obviously, for the issuance of their cards and new products, and now their lending products. obviously for the issuance of their cards and new products and now their lending products We look at the entire economics of the relationship. we look at the entire economics of the relationship That 3% doesn't include, obviously, all the interchange. that 3% doesn't include obviously all the interchange Our part of the interchange that Chime originates. Our part of the interchange that Chime originates. our part of the interchange that chime originates

Speaker 6: On the secured card? On the secured card? on the secured card

Speaker 2: No, not on secured card. If you look at all the products. No, not on secured card. no not on secured card If you look at all the products. if you look at all the products

Speaker 6: Oh. Oh. oh

Speaker 2: Yeah, we're talking about all products, right? Any of their products where there's interchange involved, we get a portion of that. Plus, obviously, they have deposits that are sitting in the bank that are in excess of the non-interest-bearing deposits. There's some of their savings deposits. Some of those are off-balance-sheet, I would say. There's the lending part where if you add all the economics together, it's around 3%. Right? But it also has. It's secured. Remember, it's credit enhancement. Right? Separately, there's a whole stream of revenue, obviously, that appears in fees that's only linked to interchange. The third part of economics, there's other deposits that fund the bank. Excess deposits that aren't lent out that provide deposits to the bank too. It's such a broad, deep relationship that there's multiple revenue streams from the Chime relationship. Lending is just one of them. Yeah, we're talking about all products, right? yeah we're talking about all products right Any of their products where there's interchange involved, we get a portion of that. any of their products where there's interchange involved we get a portion of that Plus, obviously, they have deposits that are sitting in the bank that are in excess of the non-interest-bearing deposits. plus obviously they have deposits that are sitting in the bank that are in excess of the non-interest-bearing deposits There's some of their savings deposits. there's some of their savings deposits Some of those are off-balance-sheet, I would say. some of those are off-balance-sheet i would say There's the lending part where if you add all the economics together, it's around 3%. there's the lending part where if you add all the economics together it's around 3% Right? right But it also has. but it also has It's secured. it's secured Remember, it's credit enhancement. remember it's credit enhancement Right? right Separately, there's a whole stream of revenue, obviously, that appears in fees that's only linked to interchange. separately there's a whole stream of revenue obviously that appears in fees that's only linked to interchange The third part of economics, there's other deposits that fund the bank. the third part of economics there's other deposits that fund the bank Excess deposits that aren't lent out that provide deposits to the bank too. excess deposits that aren't lent out that provide deposits to the bank too It's such a broad, deep relationship that there's multiple revenue streams from the Chime relationship. it's such a broad deep relationship that there's multiple revenue streams from the chime relationship Lending is just one of them. lending is just one of them

Speaker 6: Yeah. Okay. I get that now. I'm getting a lot of questions about kind of the profitability on these loans. Because if we take the numbers that are, I guess, disclosed, then we can directly tie to those loans. If I take the fintech fees and the interest income and then those average balances, it looks like it's an annualized yield of about 2.7%. It's pushing off these non-fintech loans yielding nearly 7%. I know, obviously, you don't have credit risk. It's not a traditional loan where it costs as much to originate. Maybe it's just the broader parts of that relationship with Chime because I know all of this ties in together, like you mentioned. Yeah. yeah Okay. okay I get that now. i get that now I'm getting a lot of questions about kind of the profitability on these loans. i'm getting a lot of questions about kind of the profitability on these loans Because if we take the numbers that are, I guess, disclosed, then we can directly tie to those loans. because if we take the numbers that are i guess disclosed then we can directly tie to those loans If I take the fintech fees and the interest income and then those average balances, it looks like it's an annualized yield of about 2.7%. if i take the fintech fees and the interest income and then those average balances it looks like it's an annualized yield of about 2.7% It's pushing off these non-fintech loans yielding nearly 7%. it's pushing off these non-fintech loans yielding nearly 7% I know, obviously, you don't have credit risk. i know obviously you don't have credit risk It's not a traditional loan where it costs as much to originate. it's not a traditional loan where it costs as much to originate Maybe it's just the broader parts of that relationship with Chime because I know all of this ties in together, like you mentioned. maybe it's just the broader parts of that relationship with chime because i know all of this ties in together like you mentioned

Speaker 2: Well, you're not that far off, right? That's 2.7%. We're saying it's around 3% today, right? With the mix currently, right? The cost structure is radically different. It's only a fraction of traditional, right? You're getting a 3% NIM, and this, once again, is separate from the other two revenue streams. You're getting a 3% NIM, right? It's a fraction of the cost of traditional lending, and it has no risk of loss. Well, you're not that far off, right? well you're not that far off right That's 2.7%. that's 2.7% We're saying it's around 3% today, right? we're saying it's around 3% today right With the mix currently, right? with the mix currently right The cost structure is radically different. the cost structure is radically different It's only a fraction of traditional, right? it's only a fraction of traditional right You're getting a 3% NIM, and this, once again, is separate from the other two revenue streams. you're getting a 3% nim and this once again is separate from the other two revenue streams You're getting a 3% NIM, right? you're getting a 3% nim right It's a fraction of the cost of traditional lending, and it has no risk of loss. it's a fraction of the cost of traditional lending and it has no risk of loss

Speaker 6: Yeah. Yeah. yeah

Speaker 2: Think about that, right? That's like almost a bond, right? You could think about a short-term bond that's yielding 3%. Then you have all these other revenue streams that are coming off that, including increased spend. If you think about it, we're lending money out to people that wouldn't have used it otherwise, and that creates interchange, right? The velocity there is extremely quick. Right? We're talking about billions potentially every month that are going through those products, creating fees for Chime, obviously, but also creating economics for us. It's creating additional GDV spend. Think about that, right? think about that right That's like almost a bond, right? that's like almost a bond right You could think about a short-term bond that's yielding 3%. you could think about a short-term bond that's yielding 3% Then you have all these other revenue streams that are coming off that, including increased spend. then you have all these other revenue streams that are coming off that including increased spend If you think about it, we're lending money out to people that wouldn't have used it otherwise, and that creates interchange, right? if you think about it we're lending money out to people that wouldn't have used it otherwise and that creates interchange right The velocity there is extremely quick. the velocity there is extremely quick Right? right We're talking about billions potentially every month that are going through those products, creating fees for Chime, obviously, but also creating economics for us. we're talking about billions potentially every month that are going through those products creating fees for chime obviously but also creating economics for us It's creating additional GDV spend. it's creating additional gdv spend

Speaker 6: Yeah. That answers my question. Yeah. yeah That answers my question. that answers my question

Speaker 3: Tim, this is Dominic. Just to add, I think the most important part here is the fact that each partner has unique expectations and unique designs, given the ability to generate deposits, generate transaction fees, whether it's debit or credit, parking loans on the balance sheet, and potentially off balance sheet in the future for loans, off balance sheet deposits that are excess, or funding other programs with deposits. We believe the economics to the partner are where they need to be for them to invest and grow in their programs, for us to see the returns on a total ROA and ROE basis that are accretive to where we are today, which is why we expect and intend to continue to shift the balance sheet towards these products. Tim, this is Dominic. tim this is dominic Just to add, I think the most important part here is the fact that each partner has unique expectations and unique designs, given the ability to generate deposits, generate transaction fees, whether it's debit or credit, parking loans on the balance sheet, and potentially off balance sheet in the future for loans, off balance sheet deposits that are excess, or funding other programs with deposits. just to add i think the most important part here is the fact that each partner has unique expectations and unique designs given the ability to generate deposits generate transaction fees whether it's debit or credit parking loans on the balance sheet and potentially off balance sheet in the future for loans off balance sheet deposits that are excess or funding other programs with deposits We believe the economics to the partner are where they need to be for them to invest and grow in their programs, for us to see the returns on a total ROA and ROE basis that are accretive to where we are today, which is why we expect and intend to continue to shift the balance sheet towards these products. we believe the economics to the partner are where they need to be for them to invest and grow in their programs for us to see the returns on a total roa and roe basis that are accretive to where we are today which is why we expect and intend to continue to shift the balance sheet towards these products

Speaker 6: Got it. All that answered my question very clearly. Thank you. In terms of the velocity, can you maybe let us know what was the volume on the loans this quarter? How long are you holding these on the balance sheet on average? How might that change in the future, whether you guys change your strategy or these two upcoming credit sponsorship programs sound like they might be shorter duration. If you plan to transfer more with securitizations, anything like that would be really helpful. Got it. got it All that answered my question very clearly. all that answered my question very clearly Thank you. thank you In terms of the velocity, can you maybe let us know what was the volume on the loans this quarter? in terms of the velocity can you maybe let us know what was the volume on the loans this quarter How long are you holding these on the balance sheet on average? how long are you holding these on the balance sheet on average How might that change in the future, whether you guys change your strategy or these two upcoming credit sponsorship programs sound like they might be shorter duration. how might that change in the future whether you guys change your strategy or these two upcoming credit sponsorship programs sound like they might be shorter duration If you plan to transfer more with securitizations, anything like that would be really helpful. if you plan to transfer more with securitizations anything like that would be really helpful

Speaker 2: It's hard to give you clarity on that because we haven't announced. There's a bunch of different use cases, from wage access to longer-term installment loans. We intend to do all those things, right? We intend to provide some on-balance sheet, probably not as much as our current relationship with Chime, to other partners. We intend to securitize a lot of it, so you'll get incredibly high velocity. You'll hold those loans from three to 30 days, probably, at the most. Usually, it's only a few days. They'll be purchased back by the fintech partner, and then securitized. Then there is definitely a situation where we'll be holding pieces of loans at a much higher yield. Right? Loans that we like or if it's important to the product for us to hold, excuse me, partner to hold the strip, we will. It's hard to give you clarity on that because we haven't announced. it's hard to give you clarity on that because we haven't announced There's a bunch of different use cases, from wage access to longer-term installment loans. there's a bunch of different use cases from wage access to longer-term installment loans We intend to do all those things, right? we intend to do all those things right We intend to provide some on-balance sheet, probably not as much as our current relationship with Chime, to other partners. we intend to provide some on-balance sheet probably not as much as our current relationship with chime to other partners We intend to securitize a lot of it, so you'll get incredibly high velocity. we intend to securitize a lot of it so you'll get incredibly high velocity You'll hold those loans from three to 30 days, probably, at the most. you'll hold those loans from three to 30 days probably at the most Usually, it's only a few days. usually it's only a few days They'll be purchased back by the fintech partner, and then securitized. they'll be purchased back by the fintech partner and then securitized Then there is definitely a situation where we'll be holding pieces of loans at a much higher yield. then there is definitely a situation where we'll be holding pieces of loans at a much higher yield Right? right Loans that we like or if it's important to the product for us to hold, excuse me, partner to hold the strip, we will. loans that we like or if it's important to the product for us to hold excuse me partner to hold the strip we will Those loans will be very high. If you look at the NIM today of The Bancorp or where it is today, right? We're around 4% if you add back what Dominic was saying, the basis points and the fees that potentially could be viewed as interest, right? It's not that different. We had some deterioration in our NIM. If you add back the increased fees from this quarter versus last year, it's 12, 13 basis points different in NIM. Your net interest margin should go up over time, right? If you add back all those fees, depending on the programs. You're going to obviously have pressure on deposits going down, right? Because of our liquidity. We'll take more high-rate deposits off the balance sheet. Those loans will be very high. those loans will be very high If you look at the NIM today of The Bancorp or where it is today, right? if you look at the nim today of the bancorp or where it is today right We're around 4% if you add back what Dominic was saying, the basis points and the fees that potentially could be viewed as interest, right? we're around 4% if you add back what dominic was saying the basis points and the fees that potentially could be viewed as interest right It's not that different. it's not that different We had some deterioration in our NIM. we had some deterioration in our nim If you add back the increased fees from this quarter versus last year, it's 12, 13 basis points different in NIM. if you add back the increased fees from this quarter versus last year it's 12 13 basis points different in nim Your net interest margin should go up over time, right? your net interest margin should go up over time right If you add back all those fees, depending on the programs. if you add back all those fees depending on the programs You're going to obviously have pressure on deposits going down, right? you're going to obviously have pressure on deposits going down right Because of our liquidity. because of our liquidity We'll take more high-rate deposits off the balance sheet. we'll take more high-rate deposits off the balance sheet When you look at these programs, the Chime situation is the lowest, probably the lowest NIM situation you would have because all the synergistic revenue. That over time, once again, adding back potential fees from the line that we have, that third line in our financials around fintech loan fees. Plus, you look, obviously the interest is. If there's any interest on those leases already in our NIM calculation, that after this initial stage should start moving up. Right? In many of these cases, these are velocity of loans. You'll be getting fees. You'll get effective yields, very short-term loans, very quick. Many of them will be backstop. They're securitized. You'll have a conversion of the balance sheet from traditional/non-traditional lending. There'll be less of a, potentially, traditional bank reserve. These are the structure of these loans. When you look at these programs, the Chime situation is the lowest, probably the lowest NIM situation you would have because all the synergistic revenue. when you look at these programs the chime situation is the lowest probably the lowest nim situation you would have because all the synergistic revenue That over time, once again, adding back potential fees from the line that we have, that third line in our financials around fintech loan fees. that over time once again adding back potential fees from the line that we have that third line in our financials around fintech loan fees Plus, you look, obviously the interest is. plus you look obviously the interest is If there's any interest on those leases already in our NIM calculation, that after this initial stage should start moving up. if there's any interest on those leases already in our nim calculation that after this initial stage should start moving up Right? right In many of these cases, these are velocity of loans. in many of these cases these are velocity of loans You'll be getting fees. you'll be getting fees You'll get effective yields, very short-term loans, very quick. you'll get effective yields very short-term loans very quick Many of them will be backstop. many of them will be backstop They're securitized. they're securitized You'll have a conversion of the balance sheet from traditional/non-traditional lending. you'll have a conversion of the balance sheet from traditional/non-traditional lending There'll be less of a, potentially, traditional bank reserve. there'll be less of a potentially traditional bank reserve These are the structure of these loans. these are the structure of these loans The velocity will go up very high. If you add back the fees on these loans, the NIM, the effective NIM on these loans over time will go up. Now, in the near term, they'll go down for the reasons that we've stated on the Chime program, but that should turn around as we add new partners. The velocity will go up very high. the velocity will go up very high If you add back the fees on these loans, the NIM, the effective NIM on these loans over time will go up. if you add back the fees on these loans the nim the effective nim on these loans over time will go up Now, in the near term, they'll go down for the reasons that we've stated on the Chime program, but that should turn around as we add new partners. now in the near term they'll go down for the reasons that we've stated on the chime program but that should turn around as we add new partners

Speaker 6: Great. Yeah. I mean, that's really helpful. I mean, regardless of where the reported NIM goes, APEX 2030, ROA 4%, ROTCE at 40%, bottom line is moving up. Great. great Yeah. yeah I mean, that's really helpful. i mean that's really helpful I mean, regardless of where the reported NIM goes, APEX 2030, ROA 4%, ROTCE at 40%, bottom line is moving up. i mean regardless of where the reported nim goes apex 2030 roa 4% rotce at 40% bottom line is moving up

Speaker 2: Yeah, just look at this quarter. We had a 35% ROE. Look at our ROA, right? If you consider that the fact that we're going to repatriating all our equity, our equity stays the same. Any increase as our net income moves up, obviously our ROE, ROA will continue to move up and our efficiency ratio is likely to move down. Yeah, just look at this quarter. yeah just look at this quarter We had a 35% ROE. we had a 35% roe Look at our ROA, right? look at our roa right If you consider that the fact that we're going to repatriating all our equity, our equity stays the same. if you consider that the fact that we're going to repatriating all our equity our equity stays the same Any increase as our net income moves up, obviously our ROE, ROA will continue to move up and our efficiency ratio is likely to move down. any increase as our net income moves up obviously our roe roa will continue to move up and our efficiency ratio is likely to move down

Speaker 6: Yeah. That's great. Okay. Another area that has become a bigger and bigger opportunity in the fintech side of things for you guys is those off-balance sheet deposits, which I think have gotten to $1.3 billion right now. Your press release mentioned $900,000 earned on deposit sweeps in other income. Is that where all the revenue from your off-balance sheet deposits are reported? Just want to make sure I'm- Yeah. yeah That's great. that's great Okay. okay Another area that has become a bigger and bigger opportunity in the fintech side of things for you guys is those off-balance sheet deposits, which I think have gotten to $1.3 billion right now. another area that has become a bigger and bigger opportunity in the fintech side of things for you guys is those off-balance sheet deposits which i think have gotten to $1.3 billion right now Your press release mentioned $900,000 earned on deposit sweeps in other income. your press release mentioned $900,000 earned on deposit sweeps in other income Is that where all the revenue from your off-balance sheet deposits are reported? is that where all the revenue from your off-balance sheet deposits are reported Just want to make sure I'm- just want to make sure i'm-

Speaker 2: I believe. I believe. i believe

Speaker 6: capturing all the revenue. capturing all the revenue. capturing all the revenue

Speaker 2: Yes. Dominic can answer that, but yes. Yes. yes Dominic can answer that, but yes. dominic can answer that but yes

Speaker 3: That's correct. That's where it's located. That's correct. that's correct That's where it's located. that's where it's located

Speaker 6: Okay. Okay. okay

Speaker 3: Now, as Damian mentioned earlier on the call, the first quarter is seasonally high just because of tax season. We do expect it to contribute, but it's probably a secondary or tertiary benefit from all the strategies we just talked about. Now, as Damian mentioned earlier on the call, the first quarter is seasonally high just because of tax season. now as damian mentioned earlier on the call the first quarter is seasonally high just because of tax season We do expect it to contribute, but it's probably a secondary or tertiary benefit from all the strategies we just talked about. we do expect it to contribute but it's probably a secondary or tertiary benefit from all the strategies we just talked about

Speaker 6: Okay. Yep. Makes sense. I think I'm the last analyst on this call, so I got a few more if that's okay. On the REBL book, good to see another quarter of improvement in the credit metrics there. Could you give us an update on how the maturities and refinancings within the REBL book are going right now? One thing I'm looking at is how the percentage of REBL balances maturing over the next 12 months declined meaningfully for the first time in a while in Q4. It's now less than 50%. Do you have that updated number for Q1? Because it kind of seems like that could indicate you're seeing less one-year extensions and more actual payoffs. Okay. okay Yep. yep Makes sense. makes sense I think I'm the last analyst on this call, so I got a few more if that's okay. i think i'm the last analyst on this call so i got a few more if that's okay On the REBL book, good to see another quarter of improvement in the credit metrics there. on the rebl book good to see another quarter of improvement in the credit metrics there Could you give us an update on how the maturities and refinancings within the REBL book are going right now? could you give us an update on how the maturities and refinancings within the rebl book are going right now One thing I'm looking at is how the percentage of REBL balances maturing over the next 12 months declined meaningfully for the first time in a while in Q4. one thing i'm looking at is how the percentage of rebl balances maturing over the next 12 months declined meaningfully for the first time in a while in q4 It's now less than 50%. it's now less than 50% Do you have that updated number for Q1? do you have that updated number for q1 Because it kind of seems like that could indicate you're seeing less one-year extensions and more actual payoffs. because it kind of seems like that could indicate you're seeing less one-year extensions and more actual payoffs

Speaker 2: Remember, we have great visibility. These are repositioning mostly of workforce housing, and they require work. There's constant draws, right? We have reserves and everything. The reason that we had that bubble when we did was because the origination period where we got back into the business, there were a lot of loans done at that time, right? We've maintained the portfolio, but that large bump in origination during that period that resulted in classified assets has worked through the system. Right? Those were the buildings that were having issues due to the supply shock, interest rate increases, sharp interest rate increases. That bubble has gone through the system. That's dropping because we just haven't had as many originations, right? Remember, we have great visibility. remember we have great visibility These are repositioning mostly of workforce housing, and they require work. these are repositioning mostly of workforce housing and they require work There's constant draws, right? there's constant draws right We have reserves and everything. we have reserves and everything The reason that we had that bubble when we did was because the origination period where we got back into the business, there were a lot of loans done at that time, right? the reason that we had that bubble when we did was because the origination period where we got back into the business there were a lot of loans done at that time right We've maintained the portfolio, but that large bump in origination during that period that resulted in classified assets has worked through the system. we've maintained the portfolio but that large bump in origination during that period that resulted in classified assets has worked through the system Right? right Those were the buildings that were having issues due to the supply shock, interest rate increases, sharp interest rate increases. those were the buildings that were having issues due to the supply shock interest rate increases sharp interest rate increases That bubble has gone through the system. that bubble has gone through the system That's dropping because we just haven't had as many originations, right? that's dropping because we just haven't had as many originations right If a project is completed, right, and it's on plan and everything, sometimes sponsors will want a year or two, and that's built into our contracts, two one-year extensions, and people take advantage of that sometimes. It's by mutual agreement. They're stabilized loans at that point. They may want to do an exit, and they don't exactly want to do it at this interest rate. Yeah, the reason that was so high was because of that bubble. That bubble is, I don't know the exact, maybe Dominic has it on his fingertips. Maybe we can publish it in the future. That is slowly working down quickly. If a project is completed, right, and it's on plan and everything, sometimes sponsors will want a year or two, and that's built into our contracts, two one-year extensions, and people take advantage of that sometimes. if a project is completed right and it's on plan and everything sometimes sponsors will want a year or two and that's built into our contracts two one-year extensions and people take advantage of that sometimes It's by mutual agreement. it's by mutual agreement They're stabilized loans at that point. they're stabilized loans at that point They may want to do an exit, and they don't exactly want to do it at this interest rate. they may want to do an exit and they don't exactly want to do it at this interest rate Yeah, the reason that was so high was because of that bubble. yeah the reason that was so high was because of that bubble That bubble is, I don't know the exact, maybe Dominic has it on his fingertips. that bubble is i don't know the exact maybe dominic has it on his fingertips Maybe we can publish it in the future. maybe we can publish it in the future That is slowly working down quickly. that is slowly working down quickly

Speaker 6: Okay. All right. That's helpful. Kind of related to that, it looks like the average yield on the REBL book has gone down from about 8.5% to 7.6% in the last two quarters, which seems like a pretty quick decline. Could you talk about the drivers there in terms of maybe what new loans are coming on at versus rolling off? And how much of that decline could be due to some of these extensions or modifications? Okay. okay All right. all right That's helpful. that's helpful Kind of related to that, it looks like the average yield on the REBL book has gone down from about 8.5% to 7.6% in the last two quarters, which seems like a pretty quick decline. kind of related to that it looks like the average yield on the rebl book has gone down from about 8.5% to 7.6% in the last two quarters which seems like a pretty quick decline Could you talk about the drivers there in terms of maybe what new loans are coming on at versus rolling off? could you talk about the drivers there in terms of maybe what new loans are coming on at versus rolling off And how much of that decline could be due to some of these extensions or modifications? and how much of that decline could be due to some of these extensions or modifications

Speaker 2: Go ahead, Dominic. You want to handle it? Go ahead, Dominic. go ahead dominic You want to handle it? you want to handle it

Speaker 3: Sure. Yeah. Well, just as a reminder, a third of that portfolio is variable, so you'd clearly see a step down with the short-term interest rate environment that we've seen over the past year. To the point that you just spoke about, which was that large vintaging roll-through, again, they were on three-one-one contracts, many of which came to that second term and were either recapped or refinanced or sold out. Those recaps and refinances were at lower rates because they were at more stabilized values, previous investments, stronger investors. Those rates by the quality of the positioning of those loans brought down the rate combined with the variable rate environment. We do think we're at a good point now, having worked through that large vintage bubble and with the lower rates, that we should see much more stability going forward. Sure. sure Yeah. yeah Well, just as a reminder, a third of that portfolio is variable, so you'd clearly see a step down with the short-term interest rate environment that we've seen over the past year. well just as a reminder a third of that portfolio is variable so you'd clearly see a step down with the short-term interest rate environment that we've seen over the past year To the point that you just spoke about, which was that large vintaging roll-through, again, they were on three-one-one contracts, many of which came to that second term and were either recapped or refinanced or sold out. to the point that you just spoke about which was that large vintaging roll-through again they were on three-one-one contracts many of which came to that second term and were either recapped or refinanced or sold out Those recaps and refinances were at lower rates because they were at more stabilized values, previous investments, stronger investors. those recaps and refinances were at lower rates because they were at more stabilized values previous investments stronger investors Those rates by the quality of the positioning of those loans brought down the rate combined with the variable rate environment. those rates by the quality of the positioning of those loans brought down the rate combined with the variable rate environment We do think we're at a good point now, having worked through that large vintage bubble and with the lower rates, that we should see much more stability going forward. we do think we're at a good point now having worked through that large vintage bubble and with the lower rates that we should see much more stability going forward You'll continue to see loans rolling off in the low eights and being put on in the mid sixes. You'll see that natural portfolio churn. That's just the interest rate environment we're in, nothing more than that. You'll continue to see loans rolling off in the low eights and being put on in the mid sixes. you'll continue to see loans rolling off in the low eights and being put on in the mid sixes You'll see that natural portfolio churn. you'll see that natural portfolio churn That's just the interest rate environment we're in, nothing more than that. that's just the interest rate environment we're in nothing more than that

Speaker 6: Okay. All right. That's helpful. The last one for me. Thanks for taking all these questions. Is there any risk or even opportunity from the proposed executive order on banks being required to obtain citizenship info? It seems like that would be a big lift for a lot of the BaaS banks, given the third-party relationships and how small some of these accounts are. On the opportunity side, would your prepaid card products be required to obtain citizenship info as well? Because it seems like it could push a lot of people towards those sort of products. Okay. okay All right. all right That's helpful. that's helpful The last one for me. the last one for me Thanks for taking all these questions. thanks for taking all these questions Is there any risk or even opportunity from the proposed executive order on banks being required to obtain citizenship info? is there any risk or even opportunity from the proposed executive order on banks being required to obtain citizenship info It seems like that would be a big lift for a lot of the BaaS banks, given the third-party relationships and how small some of these accounts are. it seems like that would be a big lift for a lot of the baas banks given the third-party relationships and how small some of these accounts are On the opportunity side, would your prepaid card products be required to obtain citizenship info as well? on the opportunity side would your prepaid card products be required to obtain citizenship info as well Because it seems like it could push a lot of people towards those sort of products. because it seems like it could push a lot of people towards those sort of products

Speaker 2: Well, that would be a very difficult thing to do since prepaid cards, every prepaid card, that would be every incentive card. That'd be Cracker Barrel. You know what I mean? That'd be a restaurant card. That would be very difficult. Those deposits on those type of cards, in many cases, are not even insured deposits because you don't know who it is. We do have, I think versus many institutions, we have fairly good information in that area. If it gets implemented, if it becomes a requirement, everyone will have to do it, right? I'm sure there'll be an implementation phase. There might be new accounts. All those things aren't clear at this time, so we can't really comment on it. Well, that would be a very difficult thing to do since prepaid cards, every prepaid card, that would be every incentive card. well that would be a very difficult thing to do since prepaid cards every prepaid card that would be every incentive card That'd be Cracker Barrel. that'd be cracker barrel You know what I mean? you know what i mean That'd be a restaurant card. that'd be a restaurant card That would be very difficult. that would be very difficult Those deposits on those type of cards, in many cases, are not even insured deposits because you don't know who it is. those deposits on those type of cards in many cases are not even insured deposits because you don't know who it is We do have, I think versus many institutions, we have fairly good information in that area. we do have i think versus many institutions we have fairly good information in that area If it gets implemented, if it becomes a requirement, everyone will have to do it, right? if it gets implemented if it becomes a requirement everyone will have to do it right I'm sure there'll be an implementation phase. i'm sure there'll be an implementation phase There might be new accounts. there might be new accounts All those things aren't clear at this time, so we can't really comment on it. all those things aren't clear at this time so we can't really comment on it We do collect a lot of, depending on the type of account, and the use, there is a lot of ready information like Social Security numbers and everything for many of our, not of our clients, obviously, but of their clients that end up being deposits at our bank. There is requirements already in place. Right now, we don't know how that has to play out, how that actually gets worked through the system. Obviously, the regulators, everyone, FinCEN, everyone would have to be involved, and it would have to be implemented over long periods of time. We do collect a lot of, depending on the type of account, and the use, there is a lot of ready information like Social Security numbers and everything for many of our, not of our clients, obviously, but of their clients that end up being deposits at our bank. we do collect a lot of depending on the type of account and the use there is a lot of ready information like social security numbers and everything for many of our not of our clients obviously but of their clients that end up being deposits at our bank There is requirements already in place. there is requirements already in place Right now, we don't know how that has to play out, how that actually gets worked through the system. right now we don't know how that has to play out how that actually gets worked through the system Obviously, the regulators, everyone, FinCEN, everyone would have to be involved, and it would have to be implemented over long periods of time. obviously the regulators everyone fincen everyone would have to be involved and it would have to be implemented over long periods of time

Speaker 6: Yeah. There's very little details exactly on how it works. Appreciate it. Thanks for taking all my questions, guys. Yeah. yeah There's very little details exactly on how it works. there's very little details exactly on how it works Appreciate it. appreciate it Thanks for taking all my questions, guys. thanks for taking all my questions guys

Speaker 2: No problem. Thank you. No problem. no problem Thank you. thank you

Speaker 5: Thank you. I would now like to hand the call back to Damian Kozlowski for closing remarks. Thank you. thank you I would now like to hand the call back to Damian Kozlowski for closing remarks. i would now like to hand the call back to damian kozlowski for closing remarks

Speaker 2: Thank you for joining us today, everyone. Operator, you may disconnect the call. Thank you for joining us today, everyone. thank you for joining us today everyone Operator, you may disconnect the call. operator you may disconnect the call

Speaker 5: Thank you for attending today's call. You may now disconnect. Goodbye Thank you for attending today's call. thank you for attending today's call You may now disconnect. you may now disconnect Goodbye goodbye