Thursday, July 7, 2022

Bancorp Inc (NASDAQ:TBBK) Explodes Higher on Positive Results

Bancorp Inc (NASDAQ:TBBK) is a small cap banking stock that’s clearly begun to spur some interest among players in the marketplace as shares bounce up off recent lows. The big launch higher on Friday to close out the week was driven by the company’s positive earnings news. The data squeezed shares nearly 28% higher on massive volume.

In a nutshell, the company reported first-quarter net income of $8 million, after reporting a loss in the same period a year earlier. The bank, based in Wilmington, Delaware, said it had earnings of 14 cents per share. Earnings, adjusted to account for discontinued operations, were 11 cents per share. The Bancorp shares have declined 36 percent since the beginning of the year. In the final minutes of trading on Thursday, shares hit $5.06, a decline of 18 percent in the last 12 months.

Bancorp Inc (NASDAQ:TBBK) promulgates itself as a company dedicated to serving the unique needs of non-bank financial service companies, ranging from entrepreneurial start-ups to those on the Fortune 500.

The Bancorp, Inc. operates as the financial holding company for The Bancorp Bank that provides banking products and services to individuals, and small and mid-size businesses in the United States. The company offers a range of deposit products and services, including checking accounts, savings accounts, money market accounts, commercial accounts, and prepaid and payroll cards. It also provides securities backed lines of credit, automobile fleet and other equipment leasing, small business administration loans, and loans generated for sale into capital markets primarily through commercial mortgage-backed securities and collateralized loan obligations. In addition, it offers private label banking for investment advisory companies; credit and debit card payment processing for merchants affiliated with independent service organizations; institutional banking to investment advisors; and Internet banking services.

The Bancorp, Inc. was founded in 1999 and is based in Wilmington, Delaware.

According to company materials, “The company’s chief financial institution, The Bancorp Bank (Member FDIC, Equal Housing Lender), has been repeatedly recognized in the payments industry as the Top Issuer of Prepaid Cards (US), a top merchant sponsor bank, and a top ACH originator. Specialized lending distinctions include National Preferred SBA Lender, a leading provider of securities-backed lines of credit, and one of the few bank-owned commercial leasing groups in the nation.”

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As the company sees it, “here are some of the highlights from the first quarter that underpin our progress: our integrated business plan has been completed, and we are now in full execution stage, with a copy of the plan on our website. As part of the plan’s implementation, we created a detailed 2017 budget and strategic agenda for the company. This budget has been approved by our board and is consistent with the 3-year plan.”

From the company’s conference call, the notes continue on to state, “In the first quarter, we exceeded our internal budget and are tracking well with all our key initiatives. We see opportunity on the upside of our financial targets, with potential recoveries upon the disposal of certain assets, such as the Florida mall, which we hold as other real estate owned… Interest rate increases in December and March are having a positive impact on operating revenue. Future consensus increases are also expected to have a significant positive impact…. Our expenses continue to show improvement. Our cost reduction effort has identified approximately $20 million operating cost savings from 2017 over 2016, a portion of which we began to realize in the first quarter.”

Traders will note 31% tacked on to share pricing for the name in the past week, a rally that has pushed up against longer standing distributive pressure in the stock. This is emblematic of the stock. TBBK has evidenced sudden upward volatility on many prior occasions. Furthermore, the company has seen an influx in interest of late, with the stock’s recent average trading volume running exceeding 140% over the long run average.

At this time, carrying a capital value in the market of $457.9M, TBBK has virtually no reported cash on the books, which compares with about $274K in total current liabilities. The company is pre-revenue at this point. This may be a very interesting story and we will look forward to updating it again soon. For continuing coverage on shares of $TBBK stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

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