The Bancorp, Inc.

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 Zeroslav. 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 to 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 will be a replay of the call available via webcast on our website beginning at approximately 12 p.m. Eastern Time today. The dial-in for the replay is 1-800-BANCORP. 770-2030 with a passcode of 954-5117. Before I turn the call over to Damian, I would like to remind everyone that our comments and responses to questions reflect management's view as of today, April 24, 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 that differ materially from the expectations and assumptions we mentioned today. These factors and uncertainties are discussed in our reports and filings with the Securities and Exchange Commission. In addition, we will 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, many 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 26 and 27 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 25. As previously stated, we expect to launch at least two significant additional programs in 26. 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 26. 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% per quarter. We expect more progress over the next few quarters. Lastly, we are maintaining our guidance at 590 EPS for 26, with $1.75 to share in the fourth quarter. Our expectation for 27 EPS is in a range of 810 to 830. 2026 buybacks are forecast to be 200 million total and 50 million quarter in 26, with 27 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 seven 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 mixed 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 four basis points of net interest margin. Non-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 rebel and leasing. Rebel 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 enhancements. 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. Non-interest expense 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 redefining 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 Yantounis of Raymond James. Your line is now open.

Thank you, and good morning, guys. Good morning, Joe. So 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, you know, this first partner after announcement? Obviously, partner delays are a thing in this space. I'm just hoping to get, you know, a little more color on that from your end.

Yeah, we have very little. revenue for embedded finance in 26. We have more in 27, but 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. You know, it could be very limited or it could be very broad. So that impact of embedded finance will really be fulfilled in 27 and 28. So very little revenue is in our own plan. for 26 for embedded. Now, we do have revenue in there for continued sponsored lending growth and for a potential announcement around two new partners. So that has more of an impact than the embedded would on our own budget.

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

It's both, right? So 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? In our own forecast, that's a small part. You know, it's basically gravy. The way we look at, you know, 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. You know, it's not a big part of our own planning. And they're volatile, right? And it depends on the program. But they will grow. We'll have forced growth. lower basis points on what we have to pay out as we take more higher yielding deposits off the balance sheet. And in a 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? And then additionally, has there been any thought behind redeploying those proceeds into share repurchases, or would you just decrease that 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. So that, you know, 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, so we continue to invest in the property, increase the occupancy rate. The occupancy rate of available rooms has been 80% even as we doubled it, and there are plans to continue to finish the remaining 50 units that need to be upgraded. You know, 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. And 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.

Um, okay, that, that was helpful. Um, but I should just want to kind of dig into something that you said, Damien. So I was under the impression that guys implied 50 million of share repurchases per quarter in 26, and then you returning a hundred percent of net income or putting up, making the buyback a hundred percent of net income in 27. Um, so would that mean if you sold the Aubrey and that mean you're gonna sell the Aubrey in 2027, kind of based on your answer?

We're looking to, 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. We have, there's close to 50 buildings on the property, right? And there are nine left. And we're reconditioning those nine buildings over three phases over the next nine months. So if we get the stabilization probably would happen, occur at the end of next year, where stabilization is in the high 80s, low 90s. And then we would be able at least to get obviously our basis covered, but the appraisals are in the low 50s. So, and if we were to, you know, monetize, it would be a rounding error to our buyback. You know, if we're 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. So the exit on the Aubrey, if stabilized, if someone doesn't come in and just write a check, but 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.

Good. Okay. Great. And then 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 and answer credit sponsor loans. Which one do you mean?

The credit-sponsored loans, the one that's- I thought that's what you meant.

So 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, you know, parts of bigger origination, slices of it, right, and keep it on the balance sheet. But of the sponsorship loans, I mean, it's possible- uh you know when we're looking at our pipeline that'll be a much big bigger part of our business now that's that's over many years so we're going to and many of remember any of our businesses like sba um you know the real estate business which we have distributed before are are fairly liquid assets the same is true their demand loans on the institutional so this is a multi-year And it really depends on the program. Chime is 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 is a very special case. So this is a very, you know, when we look at our Apex 2030 strategy, we might, you know, 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 question.

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. I'm 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 risk?

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

Sure. To your question, you know, the secured product did outperform the growth in the quarter. And so there was a mixed shift towards that product, which does have a lower loan loss reserve relative to the other products. But across all products, it 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. And 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 at 4Q. How does this adjust to other metrics like fee income or NIMH?

The success in the quarter we're very pleased with, and I think outrun ran 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. So while 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. So 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 DBW. Your line is now open.

Hey, good morning. Thanks for taking my questions.

Good morning, Tim.

So, 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 GDP. Was there any contribution at all this quarter? No, very little.

No, so very little, right? So our partners are very, you know, they're meticulous when they launch these programs in solar waste, 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, you know, we're watching, you have incremental kind of gating issues, so we've already past the first gate, and we're ready to start turning up the dial. So, 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, but, you know, things can, I think it's going to be good. So, you'll see that dial turned up through 26, and then especially through the first part of 27. So everything's going well. And I think all of us, our partner, are all pleased with the implementation.

Awesome. That's great to hear. So it sounds like the real acceleration, like an inflection point, kind of occurs in the beginning of 27.

Well, it'll ramp up this year. It'll start being meaningful, you know, when we talk about our our own forecast with our programs, you know, 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 is, you know, it's definitely, you know, the Chime Lending, it's definitely Cash App, other programs that, you know, we will announce other lending programs. We'll also announce other banking as a service programs over the course of the year. And all those things will start meaningfully contributing uh by the end of this year but then 27 there will be multiple things ramping up together which will really lead us into that 20 that 27 guidance that we have okay nice um and so you talked about this earlier with grant's question on the three percent name but i'm not sure if that was just the secured card or all the fintech loans but could you

Kind of help economic.

Yeah. The reason I said that is because I just wanted to give the, there's a lot of confusion because it's in different, you know, it's, it's, we don't break it out separately and it's in total economics. Right. So we're funding it right. With non-interest bearing deposits, right. There's multiple, um, you know, different products there's four and it's growing, uh, different products. But if you look at the entire economics of it today to the bank core, Right? It's around 3% NIM for us. Right? Because it's obviously being funded at zero.

Is that the tiered part 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. And it's a very, I think it's incredibly synergistic for both us and our partner. I think it's a, you know, works for us. for both of us the programs have grown obviously it's been a great uh source of a great source for of revenue but also of relationship uh deepening for time and you know we're trying to support their initiatives as you know by using our party that uh by using our balance sheet now that's once again that's a very unique relationship it's i'm not saying that we will um have And like we do with Chime, that's very unique where we've, you know, we have a very deep relationship with them, obviously, for the issuance of their cards and new products and now their lending products. So, 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, so.

On the secured card.

No, not on SecureCard. That would be in the – if you look at all the products, the lending products that we – Yeah, we're talking about all products, right? So any of their products, whether 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 the saving deposits. Some of those are off balance sheets, I would say. There's the lending part where if you add all the economics together, it's around 3%. But it also has, it's secured, remember, it's credit enhancement. Then separately, there's a whole stream of revenue, obviously, that appears in fees that's only linked to interchange. And then 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. So 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. And 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%. And it's, you know, pushing off these non-Fintech loans yielding, you know, nearly seven. And I know Obviously, on credit risk, it's not a traditional loan where it costs as much to originate. Where are the, and maybe just the broader parts of that relationship with Chimes? I know all of this ties in together, like you mentioned.

Well, you're not that far off, right? So that's 2.7. We're saying it's around 3 today, right, with the mix currently, right? But the cost structure is radically different. It's only a fraction of traditional loans. So you're getting a 3% NIM. And this, once again, is separate from the other two revenue streams. You're getting a 3% NIM, but it's a fraction of the cost of traditional lending, and it has no risk of loss. So think about that. So it's almost a bond. You could think about a short-term bond that's yielding 3%. And then you have all these other revenue streams that are coming off that, including increased spend. So if you think about it, we're lending money out to people that wouldn't have used it otherwise, and that creates interchange, right? And the velocity there is extremely quick, right? So 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 GDP spend.

Just to add, I think the most important part here is the fact that each partner has unique expectations and unique designs. And given the ability to generate deposits, generate transaction fees, whether it's debit or credit, you know, parking loans on the balance sheet and potentially off-balance sheet in the future for loans, off-balance sheeting 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. And 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.

Guy, all of that answers my question very clearly. Thank you. And in terms of like the velocity, can you, maybe let us know, like, what was the volume on the loans this quarter or how long are you holding these on the balance sheet on average? And then, you know, how might that change in the future, whether you guys change your strategy or, you know, these two upcoming credit sponsorship programs sound like they might be shorter duration. You know, if you plan to transfer more or securitization, 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. And we intend to do all those things, right? So we tend 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. And 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 FedTech partner and then securitized. And then there is definitely a situation where we'll be holding pieces of loans at a much higher yield, right? So loans that we like, or if it's important to the product for us to hold, excuse me, partner to hold a strip, we will. But those loans will be very, very high. So if you look at the NIM today, of the Bancorp 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? So it's not that different. You know, we had some deterioration in our NIM, but if you add back the increased fees from this quarter versus last year, it's, you know, 12 basis, 13 basis points different than NIM. Your NIM is going to, your net interest margin should go up over time, right, if you add back all those fees depending on the programs. Because you're going to obviously have pressure on deposits going down, right, because of our liquidity. So we'll take more high-rent deposits off the balance sheet. And then if when you look at these programs, the CHIME situation is the lowest, probably the lowest NIMS situation you would have because all the synergistic revenue. So 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 loans that's already in our NIM calculation, that, after this initial stage, should start moving up, right? And then in many of these cases, these are the velocity of loans, you'll be getting fees And so you'll get effective yields, very short-term loans, very quick. Many of them will be backstopped or securitized. So you'll have a conversion of the balance sheet from traditional, nontraditional lending. There'll be less of a, potentially, of a traditional bank reserve. These are the structure of these loans. The velocity will go up very high. And 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, you know, regardless of where the reported NIM goes, APEX 2030, far away 4%, ROTC at 40, you know, bottom line is moving up.

Yeah, but just look at this quarter. We had a 35% ROE. Look at our ROA, right? And if you consider that the fact that we're going to be repatriating all our equity or equity stays the same. So any incredible, you know, 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 suites and other income. Is that where all the revenue from your off-balance sheet deposits are reported? Just want to make sure I'm 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, you know, 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, you know, benefit from all the strategies we just talked about.

Okay. Yep. Makes sense. Okay. I think on the last end of this call, I got a few more if that's okay. On the Rebel book, it's good to see another quarter of improvement in the credit metrics there. Could you give us an update on how the maturities and refinancing within the Rebel book are going right now? And like one thing I'm looking at, It's how the percentage of rubble balance is maturing over the next 12 months declined meaningfully for the first time in a while. Q4, it's now less than 50%. Do you have that updated number for Q1? Because it kind of seems like they can indicate you're seeing less one-year extensions and more actual payoffs.

Yeah, so remember, we have great visibility. These are repositioning mostly of workforce housing, and they require... So there's constant draws, right? We have reserves and everything. So we, we don't, the reason that we had that bubble when we did was that because the origination period where we got back into the business, there were a lot of loans done at that time, right? We haven't, we've maintained the portfolio, but that bump in origin, that large bump in origination during that period that we spotted that resulted in classified assets has worked through the system. Right? So, those were the buildings that were having issues due to the supply shock, interest rate increases, sharp interest rate increases. So, that bubble has gone through the system. So, that's dropping because we just haven't had as many originations, right? So, and if a project is completed, right, and it's on plan and everything, um 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 at both of our agreement uh and they're stabilized loans at that point they may want to do an exit and they're not exactly want to do it at this interest rate so yeah that's that the reason that was so high was because of that bubble and that bubble is i don't know the exact maybe dominic has it on his fingertips maybe we can We can publish it in the future. But that is slowly working down quickly.

Okay. All right. That's helpful. And kind of related to that, it looks like the average yield on the Rebel book has gone down from about 8.5% to 7.6% in the last two quarters. It 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 that... 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. But to the point that you just spoke about, which was that large vintaging roll-through, again... They were on 3-1-1 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. So 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 mid sixes. So you'll see that natural portfolio churn. But that's just, you know, the interest rate environment. We're in nothing more than that.

Okay. All right. That's helpful. And then 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 funds? citizenship info it seems like that would be a big lift for a lot of the fast things given like the third party relationships and how small some of these accounts are and like on the opportunity side you know would your prepaid card products be required to obtain citizen like citizenship info as well because it seems like it could push a lot of people towards those sort of products well i that would be a very difficult thing to do since prepaid cards you know

every prepaid card that would be every incentive card, you know, that'd be cracker barrel. You know what I mean? That'd be a restaurant card. That would be very difficult. The, um, there, there are some, and those deposits on those types of cards in many cases are not even insured deposits because you don't know who it is. Uh, we do have, um, I think verse, uh, many institutions, we have, uh, 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 will 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, but we do collect a lot of, depending on the type of account and the use, there is a lot of already information like social security numbers and everything for many of our, not of our clients, obviously, but of their clients that end up being you know, deposits at our bank. So there is requirements already in place. And we, right now, we don't know how that has to play out, whether that, how that actually gets worked through the system. Obviously, the regulators, everyone, it would be, you know, FinCEN would be, everyone would have to be involved and it would have to be implemented over long periods of time.

Yeah, yeah. I mean, there's very little details exactly on how it works. So 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.