KBRA Affirms Ratings for The Bancorp, Inc.

KBRA affirms the senior unsecured debt rating of BBB+, the subordinated debt rating of BBB, and the short-term debt rating of K2 for Wilmington, Delaware based The Bancorp, Inc. (NASDAQ: TBBK) (“the company”). In addition, KBRA affirms the deposit and senior unsecured debt ratings of A-, the subordinated debt rating of BBB+, and the short-term deposit and debt ratings of K2 for its subsidiary, The Bancorp Bank, National Association (based in Sioux Falls, South Dakota). The Outlook for all long-term ratings is Stable.

Key Credit Considerations

The ratings are supported by TBBK’s long standing position as a leader in the BaaS industry, particularly within the prepaid and debit card space, where it is the largest issuer by transaction volume. Through the company’s various BaaS product lines, TBBK is able to generate above-peer fee revenues, with a demonstrated ability to meaningfully grow its noninterest income as reflected by the 16% YoY growth in 1H26 (excludes fintech loan credit enhancement). Additionally, with the bulk of its deposits sourced through its BaaS business lines, TBBK maintains an enviable funding position with a highly granular and durable deposit base, with comparatively lower funding costs (TBBK reported total cost of funds of 1.86% for 1H26) and no associated branch costs due to its lack of a branch network. Further underpinning ratings are the company’s consistent and comparatively strong earnings. Benefitting from outsized revenue generation including peer leading fee income (~1.9% of average assets in 1H26) and an above average NIM, TBBK has reported an ROAA at or above 2.5% since 2023.

KBRA recognizes the concentration risks with TBBK’s business model, in terms of revenues and balance sheet (both deposits and loans). However, the company has demonstrated effective partner management, sourcing mature companies secured with long-term contracts, with partnerships generally spread across multiple business lines. Finally, TBBK meaningfully reduced capital ratios (at 11.4% at 2Q26, its CET1 ratio was ~300 bps lower YoY), primarily through share repurchase activity ($375 million in 2025), though KBRA considers the company’s capital position to be sufficient given its greater internal capital generation and more liquid balance sheet.

Rating Sensitivities

The Stable Outlook reflects KBRA's view that a rating change is unlikely over the medium term. However, increased diversification, particularly in terms of partner concentration, along with management of capital ratios more in line with rated peers and continued strong earnings would be viewed favorably. Conversely, should TBBK experience considerable deterioration in credit metrics, including the onset of materially elevated credit losses, the loss of an economically significant partner that results in a material reduction in revenues, or a change in the company’s management of capital, rating pressure could result.

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