The Bancorp Class Action Lawsuit: Investors Urged to Act Before May 16 Lead Plaintiff Deadline

The Bancorp, Inc. (NASDAQ: TBBK) faces mounting legal pressure as a class action lawsuit (Linden v. The Bancorp, Inc., et al.) accelerates toward its critical May 16, 2025 deadline for investors to seek lead plaintiff status. The case, filed in Delaware federal court, alleges the financial holding company misled investors about risks in its commercial real estate bridge lending (REBL) portfolio and internal accounting flaws, resulting in significant stock declines.

A Storm of Allegations: Misstatements and Material Omissions

The lawsuit centers on The Bancorp’s alleged misrepresentations regarding its REBL loans, which totaled over $2 billion as of 2024. Plaintiffs claim executives falsely assured investors that the loans carried “no substantial risk of default or loss,” while the properties collateralizing these loans were in disrepair, plagued by high vacancies, and backed by borrowers lured into “get-rich-quick” schemes.

Key allegations include:
1. Understated Default Risks: The Bancorp allegedly ignored red flags, such as crumbling apartment buildings and borrowers with weak financial backgrounds. Culper Research’s March 2024 report revealed the REBL loan allowance of $4.7 million (0.24% of the portfolio) was “grossly insufficient,” per independent analysis.
2. Flawed CECL Methodology: The company’s credit loss estimates were deemed inadequate, leading to a $1.5 million reduction in net income in Q3 2024 after revising its calculations.
3. Internal Control Failures: The Bancorp admitted to material weaknesses in its financial reporting, including unapproved 2022–2024 financial statements.

Stock Price Drops: A Timeline of Truth Unveiled

Three pivotal events triggered investor losses, as detailed in the complaint:
- March 21, 2024: Culper Research’s report caused a 10.15% drop, closing the stock at $32.12.
- October 24, 2024: Revised CECL disclosures led to a 14.47% plunge, with shares closing at $47.01.
- March 4, 2025: The revelation of unapproved financial statements caused a 4.38% decline, ending the day at $51.25.

Legal Implications and Investor Action

The lawsuit seeks to recover losses for investors who bought TBBK shares between January 25, 2024, and March 4, 2025. The May 16, 2025 deadline is critical: investors with losses exceeding $100,000 are encouraged to contact law firms like Robbins Geller Rudman & Dowd LLP or Kessler Topaz Meltzer & Check LLP, which are representing the class.

Why This Matters: A Cautionary Tale for Investors

The Bancorp’s case underscores the risks of overreliance on opaque financial metrics and weak internal controls. The company’s REBL division, central to its growth strategy, now stands as a symbol of mismanagement. With the stock down over 40% from its 2023 highs, the lawsuit could set a precedent for holding financial institutions accountable for misleading disclosures.

Conclusion: Act Now or Risk Missing Recovery

Investors holding TBBK shares during the Class Period face a clear choice: act by May 16 to seek lead plaintiff status or risk forfeiting potential recovery. The data speaks plainly:
- The stock lost nearly $14 billion in market cap during the Class Period.
- Over $1.5 million in net income was erased due to accounting revisions.
- Multiple reputable law firms are offering contingency representation, ensuring no upfront costs to plaintiffs.

This case is not just about The Bancorp—it’s a reminder that transparency and accountability are non-negotiable in financial markets. For those affected, the path forward is clear: seek legal counsel promptly, as the clock is ticking.

The Bancorp, Inc. (TBBK) investors with questions should contact the law firms listed in the complaint for case-specific guidance.