TBBK

Bancorp Inc. (The)

Finance/Real Estate


Presented:04/04/2024
Price:$32.03
Cap:$1.69B
Current Price:$57.25
Cap:$2.80B

Presented

Date04/04/2024
Price$32.03
Market Cap$1.69B
Ent Value$2.23B
P/E Ratio9.17x
Book Value$15.17
Div Yield0%
Shares O/S52.75M
Ave Daily Vol655,913
Short Int10.64%

Current

Price$57.25
Market Cap$2.80B
The Bancorp, Inc. is a financial holding company, which engages in the provision of private label banking and financial services through the Bank. It operates through the following segments: Specialty Finance, Payments, and Corporate. The Specialty Finance segment includes the origination of non-SBA commercial real estate loans, SBA loans, direct lease financing, SBLOC, IBLOC, advisor financing, and deposits generated by those business lines. The Payments segment consists of prepaid and debit cards, card payments, automated clearing house processing, and healthcare accounts. The Corporate segment refers to the company’s investment portfolio, corporate overhead, and non-allocated expenses. The company was founded by Betzy Z. Cohen on July 20, 1999 and is headquartered in Wilmington, DE.

Publicly traded companies mentioned herein: The Bancorp Inc - (TBBK)

Highlights

The presenter is short shares of The Bancorp Inc (TBBK), based on concerns regarding its exposure to real estate bridge loans, which make up ~40% of its loan book and are heavily concentrated in Texas. These loans are tied to properties purchased at high prices in weak commercial real estate markets that exhibit troubling indicators such as low occupancy rates and legal disputes. Despite recent declines, The Bancorp's stock trades at a substantial premium to peers, at 2.2x book value. The presenter anticipates potential losses of 30-35% on these troubled loans, which could significantly impact the company's financial health given its risk-based capital ratios and over-earning in the current economic climate. The looming maturity of these loans underscores the risks for the company as they could need to raise equity creating the potential for 30% downside in the stock to $20 per share.

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Idea Discussion

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