Bancorp (TBBK) risk factors, 2026 10-K

Other

1. 01Business and Strategy – contains discussion of risks related to our strategic goals, growth, new lines of business, products and services, digital delivery channels, acquisitions, artificial intelligence, and liquidity management
2. 02Economic—contains discussion of the impact on our business of periods of negative economic conditions, U.S. federal government shutdown, and changes in interest rates
3. 03Taxes and Accounting—contains discussion of accounting estimates risk, change in accounting policy or standard risk, and internal control risk
4. 04We cannot assure you that we will be able to accomplish our strategic goals as necessary to meet our financial targets
5. 05We could encounter challenges in managing strong growth across various aspects of our business simultaneously and may require diverting resources or otherwise incurring additional costs, and potentially limit our ability to expand our operations successfully
6. 06New lines of business, and new products and services may result in exposure to new risks and the value and earnings related to existing lines of business are subject to market conditions
7. 07We are dependent upon digital delivery channels for our banking and fintech services, and are subject to the risks associated with those channels
8. 08Potential acquisitions may disrupt our business and dilute stockholder value
9. 09The development and use of artificial intelligence (“AI”) presents risks and challenges that may adversely impact our business
10. 10Ineffective liquidity management could adversely affect our financial condition and results of operation
11. 11We are subject to and may be affected by extensive government regulation or material changes in the regulatory landscape
12. 12Failure to comply with personal data protection and privacy laws can adversely affect our business
13. 13Our enterprise-wide risk management framework, processes and strategies must be effective
14. 14We will be subject to heightened regulatory requirements and experience adverse business consequences if our total assets exceed $10 billion as of December 31 of any calendar year
15. 15We operate in highly competitive markets, and our partnership marketing strategy has been adopted by other institutions with which we compete
16. 16Periods of weak economic, slow growth, and/or inflationary conditions in the U.S. economy have had, and could have significant adverse effects on our business performance, growth prospects, and operating results
17. 17A prolonged U.S. federal government shutdown or default by the United States on government obligations could harm our results of operations
18. 18Changes in interest rates could reduce our income and asset valuations, and adversely affect our business, results of operations and financial condition
19. 19The impact of interest rates on our investment portfolio and consolidated financial results, including AOCI, can also affect our ability to maintain our capital ratios within our target ranges as well as the amount and timing of our future share repurchases
20. 20There is a significant concentration of deposits and non-interest income that are sourced through partner relationships in our Fintech Solutions business
21. 21There is a significant concentration of deposits and non-interest income that are sourced through these partner relationships
22. 22We may terminate relationships for various reasons, such as a partner’s failure to implement or maintain sufficient compliance and operational controls, increased financial or regulatory risk, or material changes in applicable law or our business
23. 23Regulatory and legal requirements applicable to the prepaid and debit card industry are unique and can be subject to frequent change
24. 24Changes in rules or standards set by the payment networks, or changes in debit network fees or products or interchange rates, could adversely affect our business, financial position and results of operations
25. 25The potential for fraud in the card payment industry is significant and could adversely affect our business and results of operations
26. 26If our prepaid and debit card and other deposit accounts generated by third-parties were no longer classified as non-brokered, our FDIC insurance expense might increase
27. 27We face fund transfer and payments-related risks
28. 28Agreements between the Bank and its partners related to marketing and servicing fintech loans may subject the Bank to unique compliance, oversight, and other risks
29. 29Unclaimed funds from deposit accounts or represented by unused value on prepaid cards present compliance and other risks
30. 30We are subject to lending risks
31. 31Although the Bank believes that its underwriting criteria are appropriate for the various kinds of loans it makes, the Bank may incur losses on loans that meet its underwriting criteria, and these losses may exceed the amounts set aside as reserves in the Bank’s allowance for credit losses
32. 32The quantitative models we use to manage certain accounting and risk management functions may not be effective, which may cause adverse effects on our results of operations and financial condition
33. 33monitoring, and regulators increasingly expect the use of robust model governance in these areas. In addition to technical flaws, misunderstanding or misuse of model outputs could result in suboptimal decision-making, regulatory scrutiny or financial loss
34. 34Agreements between the Bank and its partners to market and service Bank-originated consumer loans may subject the Bank to credit, fraud and other risks, as well as claims from regulatory agencies and our partners that, if successful, could negatively impact the Bank's current and future business
35. 35We are exposed to credit risks specific to the population of real estate bridge loans, including risks related to the real estate collateral value and risks related to the execution of the properties’ business plan
36. 36The success of our SBA lending program is dependent upon the continued availability of SBA loan programs, our status as a Preferred Lender under the SBA loan programs, our ability to comply with applicable SBA lending requirements and our ability to successfully manage related risks
37. 37Our operations depend on our ability, as well as that of our service providers, to protect our computer systems and network infrastructure against interruptions in service due to damage from fire, power loss, telecommunications failure, software or hardware defects, physical attacks, computer hacking or similar events
38. 38Cybersecurity risks, including the loss of data or disruption in our operations, could result in a loss of customers, cause disclosure of confidential information, adversely affect our operations, cause reputational damage, and create significant legal and financial exposure
39. 39We seek to continuously monitor for and nimbly react to any and all such malicious cyber activity, and we develop our systems to protect our technology infrastructure and data from misuse, misappropriation or corruption
40. 40increases to our costs and/or other financial losses
41. 41We obtain essential technological, marketing and customer services support for our systems from third-party providers. For example, we outsource our check processing, check imaging, transaction processing, electronic bill payment, statement rendering, and other services to third-party vendors
42. 42The loss or transition of key members of our senior management team or key staff in the Bank's divisions, or our inability to attract and retain qualified personnel, could adversely affect our business
43. 43Our financial statements are based in part on assumptions and estimates made by our management. Our earnings may decrease if amounts realized vary significantly from our estimates, or from updates to assumptions
44. 44Changes in accounting policies or accounting standards, or changes in how accounting standards are interpreted or applied, could materially affect how we report our financial results and condition
45. 45If we fail to maintain effective internal control over financial reporting, our ability to accurately and timely report our financial results may be impacted, which could result in a loss of investor confidence and adversely impact our stock price and our business
46. 46The Bank’s ability to pay dividends is subject to regulatory limitations which, to the extent we require such dividends in the future, may affect our ability to pay our obligations and return capital to shareholders
47. 47We have historically returned capital to shareholders through share repurchase programs. There can be no assurances that this will continue into the future or that this is the optimal use of our capital
48. 48Anti-takeover provisions of our certificate of incorporation, bylaws and Delaware law may make it more difficult for holders of our common stock to receive a change in control premium