The Bancorp Hits 52-Week Low Following Violation Investigations

Eileen Meng Lu |

The Bancorp, Inc. (TBBK) plummeted dramatically as much as 37 percent on June 11, dropping from the day prior's closing price of $16.20 per share to as low as $10.20 per share.

The plunge was driven by an investor sell-off in response to subsidiary The Bancorp Bank's responsed to FDIC allegations of impropriety. In their response, the bank neither admitted nor denied any charges of unsound banking practices or violations of law related to the Bank Secrecy Act Compliance Program. Simultaneously, they faced shareholder lawsuits from three separate firms.

Wohl & Fruchter LLP, Law Offices of Howard G. Smith and Pomerantz Law Firm all announced that they will look into investigation of possible violations of federal securities laws by officers and directors of The Bancorp, Inc. 

Bancorp Responds to FDIC Accusations

The FDIC order went into effect on June 5, requiring the Bank to take affirmative actions to comply with its BSA. According to the order, the Bancorp Bank now is not eligible to sign and board new Independent Sales Organizations, issue non-profit related reloadable prepaid card programs, or engage in Originating Automated Clearing House transactions for new merchant-related payments.

To address the requirements of the order, the Bank has appointed a new qualified BSA and Office of Foreign Assets Control, increased staffs of BSA Compliance program, strengthened staff training, improved bank transaction security, and also planned to take an independent testing program to reach the BSA standards. Increasing expenses on these movements are expected, but analysts said it should be covered by long-term growth in the various lines of business.

Troubles Push Bancorp to New Low

The Bancorp Bank's movement pushed its parent company, Wilmington, DE-based Bancorp, Inc. to hit a new low for 2014. The company had previously hit a one year low of $13.80 per share, compared to a one year high of $20.05. In 2014, the company has gone tumbled several times. Its stock sank 15.1 percent to $15.80 per share after the company posted lower-than-expected earnings and revenue in Q1 report on April 24. 

According to that Q1 report, the company had $0.01 per share EPS in the first quarter, or net income of $ 28,000, compared to $0.02 EPS per share, or $7.4 million net income in the year-ago period.  The result missed Thomson Reuters estimate  $0.28 a share by $0.27. After the report, its stock price remained at $14.87-$16.20 range, until its subsidiary's move brings a 52-week new low on Wednesday, June 11.   

The company seems to mix strength and weaknesses. But the stock could be low for a while due to its subsidiary's move, based on the already continuous decline in earnings per share. 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


Symbol Name Price Change % Volume
SGUJ Saguaro Holdings Corp 0.00 0.00 0.00 0
TBBK The Bancorp Inc. 7.13 0.11 1.57 288,601


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