Culper Research short The Bancorp, says ‘misrepresented’ REBL portfolio

In a recently published report, Culper Research says it is short The Bancorp as it believes the company “has misrepresented the quality of its real estate bridge loan, or REBL, portfolio.” “Over the past 10 quarters, TBBK‘s REBL book has ballooned from zero to $2 billion, or 2.5x the value of the Company’s common equity and only provisioned $4.7 million. Despite widely acknowledged stress across TBBK’s Class C Sunbelt markets, the Company claims that ‘we don’t have any substantial risk of default and loss.’ We think otherwise. Utilizing UCCs, liens, deeds, and local property records, we uncovered loans totaling $141.6 million, or 50% of the Company’s $283 million in loans coming due just this year, that we believe harbor meaningful risks,” the report reads. “We believe many of TBBK’s borrowers are left in a precarious position. When loans come due, we see four main options: agency refinancing, non-agency refinancing, “extending and pretending”, and foreclosing.” Shares of The Bancorp have dropped almost 4% to $34.40 in morning trading.