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Investigation of The Bancorp by Faruqi & Faruqi, LLP

Faruqi & Faruqi, LLP, a prominent national securities law firm, has initiated an investigation into The Bancorp, Inc., often referred to as TBBK. This investigation centers on potential claims tied to the company’s compliance with federal securities laws and seeks to safeguard the rights of investors who may have suffered losses.

Context of the Investigation

Between January 25, 2024, and March 4, 2025, many investors purchased or acquired shares from The Bancorp. The firm highlights a significant deadline approaching: May 16, 2025. Investors are reminded that this date marks the deadline to assume the role of lead plaintiff in a federal securities class action lawsuit currently lodged against the company.

Allegations Against The Bancorp

Faruqi & Faruqi’s current investigation is driven by serious accusations against The Bancorp, which include claims of discrepancies in the financial reporting process. Legally, the firm alleges that both the corporation and its executives violated federal securities regulations. Specifically, these accusations include:

1. Failure to Disclose Risks: The Bancorp allegedly failed to adequately represent the risks related to its real estate bridge loan (REBL) portfolio, including potential defaults or losses.
2. Insufficient Methodology: The current expected credit loss (CECL) methodology employed by The Bancorp is reportedly insufficient for addressing credit losses provisions and allowances.
3. Oversight Failures: There were purported material weaknesses in internal controls over financial reporting.
4. Reliance Issues: Investors could not reliably depend on the company’s financial statements, leading to further complications.

On March 21, 2024, a report by Culper Research raised alarms about these issues, emphasizing that The Bancorp's loan portfolio was riskier than presented. The allegations included that the portfolio was filled with suboptimal borrowers and that an unrealistic low provision for credit losses was set, which could lead to substantial financial repercussions when adjusted appropriately.

Following this unsettling report, The Bancorp's stock witnessed a significant drop, falling by more than 10%, indicative of the market's reaction to the news. This alarming trend continued when financial results were released on October 24, 2024, reporting a notable net income but also revealing structural issues affecting net gains, which again resulted in yet another drop in share price post-announcement.

Call to Action for Investors

Faruqi & Faruqi encourages any investors affected by these developments or who may have information on The Bancorp's practices to contact the law firm directly. Specifically, former employees, whistleblowers, or shareholders can play a critical role in this ongoing investigation and possible litigation. It is apparent that the investors' rights are at stake, and those interested in pursuing legal recourse or learning more are urged to reach out.

Investors have the option to serve as lead plaintiffs through legal counsel of their choice or to decide to remain as class members without acting. Notably, their participation or absence as lead plaintiffs will not affect their potential recovery under the lawsuit.

For ongoing updates regarding this investigation or to obtain further information, interested parties can visit Faruqi & Faruqi's official website or directly contact partner Josh Wilson at 877-247-4292 or 212-983-9330 (Ext. 1310).

Faruqi & Faruqi continues to operate with the utmost confidentiality and diligence, committed to upholding the rights of justice for investors.