After losing out on the support of its bank partner, which cut off most of the money that the firm had been using for tax refund loans, Jackson Hewitt Tax Service's shares tumbled by 23% on Thursday.

Santa Barbara Bank & Trust was ordered by the regulators to stop providing the loan funds, which took care of nearly 75% of Jackson's financial products program, as per a regulatory filing undertaken by the company.

The second-ranked tax preparer after H&R Block, lost much of it’s per share value when it dropped by $1.34 to $4.50.

On December 18, the Office of the Comptroller of the Currency informed Santa Barbara Bank & Trust that the lender would not be able to receive "regulatory approval to originate the refund anticipation loans in 2010, according to a statement from the bank’s parent, the Pacific Capital Bancorp".

Tony Rossi, a spokesperson of the bank said that "the tax refund loan business is a sort of niche business that falls outside of what would be considered core banking operations".

Jackson Hewitt has not shared any reactions of the developments yet.