The Bancorp in Wilmington, Del., said on Friday that it has eliminated its commercial lending operations, amid pressure from regulators to fix its anti-money laundering procedures.
The $4.2 billion-asset bank said that it will focus its loan portfolio, instead, on specialty finance, including small fleet leasing, security backed lines of credit and Small Business Administration lending.
"As part of our strategic evaluation of the asset composition of the bank, we have decided to replace our commercial lending with greater emphasis on the specialty lending segments," said Betsy Cohen, the bank's chief executive, in a press release Friday.
The bank was hit in June with a consent order from the Federal Deposit Insurance Corp., over weaknesses in its Bank Secrecy Act compliance program.
The bank reported a net loss for the third quarter of $16.8 million, compared to a $4.8 million profit last year. The decline was driven by an $18.3 million loss from its discontinued operations.
Net income from continuing operations was $1.5 million, or 31% lower than in the same period last year. Net operating expenses rose 26%, to $33.1 million, as the bank recorded $2.7 million in BSA-related expenses.
Net interest income climbed 44%, to $15.4 million. Fee-based income rose 6%, to $20.2 million.
The Bancorp's shares were trading at $9.58 midday Friday, up 4% from Thursday's close.