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On Thursday, Keefe, Bruyette & Woods maintained a positive stance on The Bancorp (NASDAQ:TBBK) shares, reiterating their Outperform rating and a $72.00 price target. This affirmation comes despite a second delay in the closing date for The Bancorp’s $40 million sale of Other Real Estate Owned (OREO) assets, now postponed to May 2025. The sale pertains to the Aubrey property, a significant portion of the company’s non-performing assets (NPAs).
The analysts acknowledged that the postponement may have disappointed investors but pointed out the earnest money deposit of $3.0 million, which now represents 7% of the loan balance. This substantial deposit, coupled with the buyer’s commitment to invest further in the property, provides The Bancorp with some financial cushion and makes it less likely that the buyer will withdraw from the agreement. InvestingPro analysis shows the company maintains a GREAT financial health score of 3.39, with particularly strong profitability metrics.
Despite the delay, The Bancorp’s management remains confident that the sale will be completed, which would be a substantial positive development for the company. The OREO assets, including the Aubrey property, accounted for 43% of the company’s NPAs in Q4. The sale price is anticipated to cover both the current OREO balance, which stood at $42.3 million as of March 25, 2025, and the projected costs for property improvements.
Furthermore, The Bancorp did not finance the buyer’s purchase, meaning the bank’s risk exposure to the property will cease once the sale concludes. In the interim, The Bancorp has continued with property enhancements and plans to lease out upgraded units through a property manager before the property’s sale is finalized. The company has demonstrated strong performance, with InvestingPro data showing a remarkable 58.56% return over the past year. Discover more insights and 10+ additional ProTips about TBBK’s performance and outlook in the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, The Bancorp reported its fourth-quarter 2024 earnings, with an earnings per share (EPS) of $1.15, aligning with analyst expectations, and revenue of $148.56 million, surpassing the projected $133.01 million. The company also announced plans for a $150 million share buyback in 2025. Meanwhile, Bancorp is revising its financial statements for fiscal years 2022 to 2024 due to pending audit approvals from Crowe LLP and Grant Thornton LLP, focusing on accounting for consumer fintech loans. In analyst activity, Raymond (NSE:RYMD) James raised its price target for The Bancorp to $67, maintaining an Outperform rating, following the company’s strong fourth-quarter results and ambitious growth targets. Piper Sandler also maintained its Overweight rating with a $68 price target, highlighting the strength of The Bancorp’s payments business despite volatility and high short interest. The Bancorp’s new credit sponsorship initiative aims to exceed $1 billion by the end of 2025, contributing to fee income growth and reducing loan portfolio risk. These developments underscore The Bancorp’s strategic efforts in managing its portfolio and expanding its fintech partnerships.
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