Investor Menu
View All News

The Bancorp, Inc. Reports First Quarter 2011 Financial Results

April 26, 2011

WILMINGTON, Del.--(BUSINESS WIRE)-- The Bancorp, Inc. ("Bancorp") (NASDAQ: TBBK), a financial holding company, today reported results for the quarter ended March 31, 2011.

Financial Highlights

  • Net income increased to $2.7 million in first quarter 2011 compared to $2.2 million in first quarter 2010, prior to $6.2 million of charges in 2010 related to the repayment of TARP and other TARP costs.
  • First quarter 2011 diluted earnings per share increased to $0.10, compared to $0.08 in first quarter 2010, prior to $6.2 million of charges in 2010 related to the repayment of TARP and other TARP costs.
  • Non-interest income, excluding security gains, increased to $7.8 million compared to $4.7 million in first quarter 2010, reflecting significant increases in prepaid and debit card income. Non-interest income excluding a $485,000 legal settlement in favor of the Bancorp in 2011, increased 55% between those periods. That increase was driven primarily by prepaid card income, which increased $1.9 million or 69% between those periods.
  • Average loans and leases for first quarter 2011 totaled $1.6 billion, an increase of $112 million or 7% over first quarter 2010. Average securities for first quarter 2011 totaled $263 million, an increase of $102 million, or 63% over first quarter 2010.
  • Average deposits for first quarter 2011 totaled $2.7 billion, an increase of $645 million or 31% over first quarter 2010, while transaction accounts grew to 98% of total average deposits. The average cost of funds between those respective periods decreased to 0.41% from 0.70%.
  • A successful stock offering was concluded during the quarter. Shareholders’ equity was increased by approximately $54.5 million to fund our continuing growth opportunities.

Betsy Z. Cohen, Bancorp’s Chief Executive Officer, said, “Our net-interest income totaled $18.2 million in first quarter 2011, an increase of $1.9 million, or 12% over first quarter 2010. Larger loan and security balances and a lower cost of funds were the drivers behind the increase. Our core earnings for the quarter, as detailed below, increased $2.1 million over the prior year same quarter reflecting the increase in net interest income and the 69% increase in prepaid card income. Our SBA (Small Business Administration) program is moving forward, and we are carefully approving new franchisors. Our recent SBA PLP (Preferred Lending Program) designation should add momentum to the program’s growth.”

Financial Results

Bancorp reported net income available to common shareholders for the three months ended March 31, 2011 of $2.7 million or diluted earnings per share of $0.10, based on 28,058,333 weighted average shares, compared to a net loss available to common shareholders of $4.1 million or a loss per share of $0.15, based on 26,181,281 weighted average shares, for the three months ended March 31, 2010. Core operating earnings, a non-GAAP measure, increased to $8.9 million for the three months ended March 31, 2011 compared to $6.8 million for the three months ended March 31, 2010. The following is a reconciliation of core operating earnings to net income available to common shareholders (for the three month period):

 
March 31, March 31,

2011

2010

 
Net income (loss) available to common shareholders $ 2,688 $ (4,056 )
Preferred stock dividend and accretion - 6,242
Income tax expense 1,431 1,233
Gains on sales of investment securities - (750 )
Other than temporary impairment of securities 75 -
Provision for loan and lease losses   4,672   4,148  
Core operating earnings (1) $ 8,866 $ 6,817  
 
(1)   As a supplement to GAAP, Bancorp has provided this non-GAAP performance result. The Bancorp believes that this non-GAAP financial measure is useful because it allows investors to assess its operating performance, specifically its overall earnings capacity. Other companies may calculate core earnings differently. Although this non-GAAP financial measure is intended to enhance investors’ understanding of Bancorp’s business and performance, it should not be considered, and is not intended to be, a substitute for GAAP.
 
   

Capital Ratios

Tier 1 capital Tier 1 capital Total capital
to average to risk-weighted to risk-weighted
assets ratio assets ratio assets ratio
 
As of March 31, 2011
The Company 8.62% 15.33% 16.58%
The Bancorp Bank 6.00% 10.69% 11.94%
"Well capitalized" institution (under FDIC regulations) 5.00% 6.00% 10.00%
 
As of March 31, 2010
The Company 8.64% 13.08% 14.33%
The Bancorp Bank 7.41% 11.23% 12.48%
"Well capitalized" institution (under FDIC regulations) 5.00% 6.00% 10.00%
 

Balance Sheet Summary

At March 31, 2011, Bancorp's total assets were $2.8 billion, an increase of $744 million or 36% over total assets at March 31, 2010. During that period, investments increased to $295 million, an increase of $117 million or 66%; loans increased to $1.6 billion, an increase of $109 million or 7%; and deposits increased to $2.5 billion, an increase of $669 million or 36%.

Conference Call Webcast

You may access the LIVE webcast of Bancorp's Quarterly Earnings Conference Call at 10:00 AM EDT Tuesday, April 26, 2011 by clicking on the webcast link on Bancorp's homepage at www.thebancorp.com. Or, you may dial 800.901.5248 using access code 21180968. You may listen to the replay of the webcast following the live call on Bancorp's investor relations website or telephonically until Tuesday, May 3, 2011 by dialing 888.286.8010, access code 97477604.

About Bancorp

The Bancorp, Inc. is a financial holding company that operates The Bancorp Bank, an FDIC-insured commercial bank that delivers a full array of financial services both directly and through private-label affinity programs nationwide. The Bancorp Bank’s regional community bank operations serve the needs of small and mid-size businesses and their principals in the Philadelphia-Wilmington region.

Forward Looking Statements

Statements in this earnings release regarding The Bancorp, Inc.’s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. These statements may be identified by the use of forward-looking terminology, including but not limited to the words “may,” “believe,” “will,” “expect,” “look,” “anticipate,” “estimate,” “continue,” or similar words. For further discussion of the risks and uncertainties to which these forward-looking statements may be subject, see The Bancorp, Inc.’s filings with the SEC, including the “Risk Factors” sections of The Bancorp Inc.’s filings. These risks and uncertainties could cause actual results to differ materially from those projected in the forward-looking statements. The forward-looking statements speak only as of the date of this presentation. The Bancorp, Inc. does not undertake to publicly revise or update forward-looking statements in this presentation to reflect events or circumstances that arise after the date of this presentation, except as may be required under applicable law.

 
The Bancorp, Inc.
Financial highlights
(unaudited)
  Three months ended   Year ended
March 31, December 31,
2011   2010 2010
 
(dollars in thousands except per share data)
Condensed income statement
Net interest income $ 18,198   $ 16,280   $ 68,193  
Provision for loan and lease losses   4,672     4,148     19,287  
Non-interest income
Gain on sales of investment securities - 750 1,207
Other than temporary impairment of investment securities (75 ) - (135 )
Other non-interest income   7,820     4,744     19,524  
Total non-interest income 7,745 5,494 20,596
Non-interest expense
Loss on other real estate owned 52 20 22
Other non-interest expense   17,100     14,187     61,726  
Total non-interest expense   17,152     14,207     61,748  
Net income before income tax expense 4,119 3,419 7,754
Income tax expense   1,431     1,233     2,532  
Net income 2,688 2,186 5,222
Less preferred stock dividends - (433 ) (433 )
Less preferred stock accretion   -     (5,809 )   (5,809 )
Net income (loss) available to common shareholders $ 2,688   $ (4,056 ) $ (1,020 )
 
Basic earnings (loss) per share $ 0.10   $ (0.15 ) $ (0.04 )
 
Diluted earnings (loss) per share $ 0.10   $ (0.15 ) $ (0.04 )
Weighted average shares – basic 28,051,948 26,181,281 26,181,281
Weighted average shares – diluted 28,058,333 26,181,281 26,181,281
 
       
Balance sheet March 31, December 31, September 30, March 31,
2011 2010 2010 2010

 

(dollars in thousands)

Assets:
Cash and cash equivalents
Cash and due from banks $ 223,420 $ 157,411 $ 164,948 $ 106,316
Interest bearing deposits   630,524     314,908     584,857     232,117  
Total cash and cash equivalents   853,944     472,319     749,805     338,433  
 
Investment securities, available-for-sale, at fair value 273,643 231,165 249,342 156,191
Investment securities, held-to-maturity 21,298 21,364 21,354 21,488
Loans, net of deferred costs 1,636,253 1,619,195 1,590,507 1,527,691
Allowance for loan and lease losses   (25,802 )   (24,063 )   (21,798 )   (20,357 )
Loans, net of deferred costs   1,610,451     1,595,132     1,568,709     1,507,334  
Premises and equipment, net 8,533 8,767 8,602 8,140
Accrued interest receivable 8,807 8,878 8,396 7,589
Intangible assets, net 8,754 9,005 9,255 9,755
Other real estate owned 3,379 2,115 225 648
Deferred tax asset, net 23,817 24,365 19,434 20,872
Other assets   24,071     22,613     24,554     22,063  
Total assets $ 2,836,697   $ 2,395,723   $ 2,659,676   $ 2,092,513  
 
Liabilities:
Deposits
Demand (non-interest bearing) $ 1,412,656 $ 945,605 $ 1,402,538 $ 973,116
Savings, money market and interest checking 1,105,226 975,973 1,001,959 875,511
Time deposits 1,397 90,862 9,218 1,317
Time deposits, $100,000 and over   11,830     11,657     8,672     12,339  
Total deposits   2,531,109     2,024,097     2,422,387     1,862,283  
 
Securities sold under agreements to repurchase 19,783 14,383 9,429 8,245
Short-term borrowings - 87,000 - -
Federal funds purchased - 49,000 - -
Accrued interest payable 149 124 109 136
Subordinated debenture 13,401 13,401 13,401 13,401
Other liabilities   14,654     8,812     12,918     6,401  
Total liabilities $ 2,579,096   $ 2,196,817   $ 2,458,244   $ 1,890,466  
 
Shareholders' equity:
Preferred stock – authorized 5,000,000 shares, Series A, $0.01 par value; 0 shares issued and outstanding at March 31, 2011 and 2010; - - - -
Common stock - authorized, 50,000,000 shares of $1.00 par value; 33,196,281 and 26,181,281 shares issued and outstanding at March 31, 2011 and 2010, respectively 33,196 26,181 26,181 26,181
Additional paid-in capital 240,640 192,711 192,492 196,898
Accumulated deficit (15,507 ) (18,195 ) (20,236 ) (21,231 )
Accumulated other comprehensive (loss) gain   (728 )   (1,791 )   2,995     199  
Total shareholders' equity 257,601 198,906 201,432 202,047
 
Total liabilities and shareholders' equity $ 2,836,697   $ 2,395,723   $ 2,659,676   $ 2,092,513  
 
 

Average balance sheet and net interest income

 
Three months ended March 31, 2011 Three months ended March 31, 2010
(dollars in thousands) Average   Average Average   Average
Assets:

Balance

Interest

Rate

Balance

Interest

Rate

Interest-earning assets:
Loans net of unearned discount $ 1,627,928 $ 18,260 4.49 % $ 1,518,631 $ 17,916 4.72 %
Leases - bank qualified* 2,344 50 8.53 % - -
Investment securities-taxable 185,583 1,557 3.36 % 130,432 1,308 4.01 %
Investment securities-nontaxable* 77,592 1,011 5.21 % 30,855 587 7.61 %
Interest bearing deposits at Federal Reserve Bank 833,085   515 0.25 % 472,388   351 0.30 %
Net interest-earning assets 2,726,532 21,393 3.14 % 2,152,306 20,162 3.75 %
 
Allowance for loan and lease losses (24,811 ) (19,821 )
Other assets 286,553   201,340  
$ 2,988,274   $ 2,333,825  
 
Liabilities and Shareholders' Equity:
Deposits:
Demand (non-interest bearing)** $ 1,647,682 $ 425 0.10 % $ 950,319 $ 219 0.09 %
Interest bearing deposits
Interest checking 714,846 1,279 0.72 % 539,757 1,924 1.43 %
Savings and money market 321,472 797 0.99 % 544,758 1,182 0.87 %
Time 46,507   104 0.89 % 50,270   133 1.06 %
Total interest bearing deposits 1,082,825 2,180 0.81 % 1,134,785 3,239 1.14 %
Total deposits 2,730,507 2,605 0.38 % 2,085,104 3,458 0.66 %
 
Short-term borrowings 3,022 3 0.40 % 3,183 5 0.63 %
Repurchase agreements 17,030 16 0.38 % 4,774 7 0.59 %
Subordinated debt 13,401   215 6.42 % 13,401   215 6.42 %
Net interest bearing liabilities 1,116,278 2,414 0.87 % 1,156,143 3,466 1.20 %
Total cost of funds 2,763,960 2,839 0.41 % 2,106,462 3,685 0.70 %
 
Other liabilities 9,435   12,658  
Total liabilities 2,773,395 2,119,120
 
Shareholders' equity 214,879   214,705  
$ 2,988,274   $ 2,333,825  
Net interest income on tax equivalent basis* $ 18,554 $ 16,477
 
Tax equivalent adjustment 356 197
 
Net interest income $ 18,198 $ 16,280
Net interest margin * 2.72 % 3.06 %
       
* Full taxable equivalent basis to be comparable to the interest income of all other categories, using a 34% statutory tax rate

** Interest includes fees paid to affinity groups.

 
   
Allowance for loan and lease losses: Three months ended For year ended
March 31,   March 31, December 31,
2011 2010 2010

 

(dollars in thousands)

 
Balance in the allowance for loan and lease losses at beginning of period $ 24,063   $ 19,123   $ 19,123  
 
Loans charged-off:
Commercial 106 2,728 13,513
Construction 2,143 - -
Lease financing - - 3
Residential mortgage 31 223 1,254
Consumer   668     44     618  
Total   2,948     2,995     15,388  
 
Recoveries:
Commercial 14 79 279
Construction 1 1 4
Lease financing - - 10
Residential mortgage - - 742
Consumer   -     1     6  
Total   15     81     1,041  
Net charge-offs 2,933 2,914 14,347
Provision charged to operations   4,672     4,148     19,287  
 
Balance in allowance for loan and lease losses at end of period $ 25,802   $ 20,357   $ 24,063  
Net charge-offs/average loans 0.18 % 0.19 % 0.92 %
 
       
Loan portfolio: March 31, December 31, September 30, March 31,
2011 2010 2010 2010

 

(dollars in thousands)

 
Commercial $ 430,081 $ 441,799 $ 409,697 $ 413,361
Commercial mortgage (1) 601,046 580,780 580,491 557,713
Construction   202,105   203,120   206,551   206,275
Total commercial loans 1,233,232 1,225,699 1,196,739 1,177,349
Direct financing leases 107,624 103,289 103,278 81,904
Residential mortgage 94,682 93,004 93,833 89,005
Consumer loans and others   197,876   194,320   193,968   177,456
1,633,414 1,616,312 1,587,818 1,525,714
Unamortized costs (fees)   2,839   2,883   2,689   1,977
Total loans, net of unamortized fees and costs $ 1,636,253 $ 1,619,195 $ 1,590,507 $ 1,527,691
 
Supplemental loan data:
Construction 1-4 family $ 96,240 $ 100,689 $ 100,848 $ 104,213
Construction commercial, acquisition and development   105,865   102,431   105,703   102,062
  $ 202,105 $ 203,120 $ 206,551 $ 206,275
(1) At March 31, 2011 our owner-occupied loans amounted to $136 million, or 22.7% of commercial mortgages.
 
       
March 31, December 31, September 30, March 31,
2011 2010 2010 2010
Asset quality ratios:
Nonperforming loans to total loans (1) 1.05 % 1.08 % 1.51 % 1.44 %
Nonperforming assets to total assets (1) 0.73 % 0.82 % 0.91 % 1.08 %
Allowance for loan and lease losses to total loans 1.58 % 1.49 % 1.37 % 1.33 %
 
Nonaccrual loans $ 14,228   $ 15,298   $ 19,640   $ 17,863  
Total nonperforming loans 14,228 15,298 19,640 17,863
Other real estate owned 3,379 2,115 225 648
Total nonperforming assets $ 17,607   $ 17,413   $ 19,865   $ 18,511  
 
Loans 90 days past due still accruing interest $ 3,028   $ 2,219   $ 4,352   $ 4,071  
(1) Nonperforming loans are defined as nonaccrual loans and restructure loans. Loans 90 days past due and still accruing interest are also included in these ratios.
 
   
Three months ended Year ended
March 31,   December 31, December 31,

2011

 

2010

2010

2010

Selected operating ratios:
Return on average assets 0.36 % 0.37 % 0.34 % 0.23 %
Return on average equity 5.07 % 4.07 % 4.01 % 2.45 %
Net interest margin 2.72 % 3.06 % 3.36 % 3.28 %
Efficiency ratio 66.11 % 67.58 % 69.37 % 70.52 %
Book value per share $ 7.76 $ 7.72 $ 7.60 $ 7.60
 

Source: The Bancorp, Inc.

Contact:

The Bancorp, Inc.

Andres Viroslav, 215-861-7990

andres.viroslav@thebancorp.com

View All News