Denver, CO, 06/12/2014 (Stocksntrade) – Bancorp Inc (NASDAQ:TBBK) filed a SEC update on 10th June updating the regulator that it has agreed to the issuance of “Stipulation and Consent to the Issuance of a Consent Order” to its 100 percent owned subsidiary The Bancorp Bank from the Federal Deposit Insurance Corporation. The order became effective on 5th June the banking firm noted. The regional bank went on to also clarify that it had not admitted to any charges related to weakness in its adherence to various banking laws related to Bank Secrecy Act.
On the back of the announcement, a host of analyst firms came out with downgrade calls on the stock of the banking firm. Sterne Agee downgraded the stock to a Neutral from previous Buy rating. In a similar exercise, BTIG downgraded the stock to Neutral from its earlier Buy rating by linking it to the order passed by the Federal regulator, which is in turn expected to put a restriction on certain banking activities of the regional bank.
As per the FDIC Order, Bancorp Inc (NASDAQ:TBBK) has to appoint a regulator approved BSA/OFAC officer and make sure that its staff are well versed with the written BSA Compliance Program. It is also required to invest in new procedures which will help the banking staff identify suspicious activity by monitoring them proactively and reporting the same when identified.
The order also places restrictions on the banking operations of Bancorp Inc (NASDAQ:TBBK). These restrictions include a temporary stoppage in hiring up new Independent Sales organizations and restrictions on issuance of new prepaid cards. Additionally, the order also conditions the bank from initiating automated clearing house transactions in context to payment related requests from merchants.
The bank has gone on to state that these restrictions are not going to have any impact on the revenue.