The Bancorp (TBBK) saw its stock price plummet over 15% in premarket trading on Thursday, October 25, 2024, following the release of its third-quarter earnings report. The financial holding company reported disappointing results that fell short of analysts' expectations, primarily due to a higher provision for credit losses and weaker-than-expected earnings.
For the third quarter of 2024, The Bancorp reported earnings of $51.5 million, or $1.04 per share, which missed the consensus estimate of $56.4 million, or $1.12 per share. The company's earnings were weighed down by a higher provision for credit losses, which increased to $3.48 million from $1.78 million in the same period last year.
Despite reporting a 5% year-over-year increase in net interest income to $93.7 million, driven by loan growth and higher interest rates, The Bancorp's profitability was impacted by the elevated provision for credit losses. This cautious move reflects the company's efforts to brace for potential loan losses amid the current economic environment.
Adding to the negative sentiment, The Bancorp 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.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.