Shares of The Bancorp (TBBK) plummeted over 15% in premarket trading on Thursday, October 25, 2024, following the company's disappointing third-quarter earnings report and higher provision for credit losses.
The financial holding company reported earnings of $51.5 million, or $1.04 per share, for the third quarter of 2024, falling short of analysts' expectations of $56.4 million, or $1.12 per share. The Bancorp's earnings were weighed down by a higher provision for credit losses, which rose to $3.48 million from $1.78 million in the same period last year.
Despite a 5% year-over-year increase in net interest income to $93.7 million, driven by loan growth and higher interest rates, the company's profitability was impacted by the elevated provision for credit losses. This move reflects The Bancorp's cautious stance in anticipation of potential loan losses amid the current economic environment.
Adding to the negative sentiment, The Bancorp also announced that it is cutting its planned stock buybacks for 2025 by $100 million from the 2024 level. The company cited the need to allocate funds towards the repayment of $96 million in senior secured debt as the reason for the reduced share repurchases.
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