CEO Doubles Down as The Bancorp Weathers FDIC Order

Just as The Bancorp‘s stock was plummeting 30% after the company was hit with a Federal Deposit Insurance Corp. consent order over too-lax anti-money laundering practices in its prepaid card business, the company’s chief executive officer did something unexpected: she bought more company stock.

Betsy Z. Cohen, The Bancorp’s CEO, purchased slightly more than $1 million of TBBK stock last Friday, two days after news broke that the company had signed an FDIC consent order, which sent the stock down 30%. The insider purchase was disclosed by the company this morning.

Cohen paid an average of about $11.48 per share on Friday. The stock closed on June 10 at $16.20 per share. Cohen’s disclosure noted that nearly $282,000 of TBBK stock was purchased by her spouse.

The Bancorp has seen steep growth from its prepaid card business in recent years, enjoying 71% compounded annual growth in the business from 2010 through the first quarter of 2014, company documents show. The company generated $11.8 billion of gross prepaid volume last quarter, in part by issuing prepaid cards for third parties, such as Mobile Money by T-Mobile, The Approved Card by Suze Orman, and Simple. The Bancorp has more than 60 million prepaid cards in circulation today.

According to American Banker, the consent “places a moratorium on new contractual relationships with third-party companies that use the automated clearing house network to process payments for its customers. And it prohibits, for the time being, Bancorp Bank’s existing third-party payment processing customers from adding any new merchants as clients.”