Investor Menu
View All News

The Bancorp, Inc. Reports Second Quarter 2011 Financial Results

July 21, 2011

WILMINGTON, Del.--(BUSINESS WIRE)-- The Bancorp, Inc. ("Bancorp") (NASDAQ: TBBK), a financial holding company, today reported results for the quarter ended June 30, 2011.

Financial Highlights

  • Prepaid card fee income increased 75% to $4.4 million from $2.5 million in second quarter 2010.
  • Total non-interest income, excluding security gains, increased 62% to $7.3 million compared to $4.5 million in second quarter 2010.
  • Tax equivalent net interest income increased 11% to $18.6 million from $16.9 million in second quarter 2010.
  • Core operating earnings increased by 30% to $7.7 million compared to second quarter 2010. For those respective periods, GAAP diluted earnings per share remained constant at $0.02 based on 33.2 million and 26.8 million shares respectively. For the six month period ended June 30, 2011 diluted earnings per share amounted to $0.11 compared to a loss per share of $0.14 in the comparable prior year period.
  • At June 30, 2010 loans had grown to $1.7 billion, and year to date grew at an annualized rate exceeding 7%. Period-end securities held at June 30, 2011 increased to $371 million, an increase of $141 million, or 62% over June 30, 2010.
  • Average deposits for second quarter 2011 totaled $2.3 billion, an increase of $490 million or 27% over second quarter 2010, while transaction accounts grew to 99% of total average deposits. The interest paid on deposits and interest bearing liabilities between those respective periods decreased to 0.53% from 0.81%.

Betsy Z. Cohen, Bancorp’s Chief Executive Officer, said, “The 75% increase in prepaid card fees and the increase in total non-interest income attest to the strength of our pipeline of new business as we continue to focus on growth markets. We continue to see opportunity in our SBA (Small Business Administration) program, and are adding new franchisors. We are devoting more efforts to accelerate SBA loan closings, and have begun to see some of those results. Another strategic goal, to increase our fixed rate but relatively short term direct leasing portfolio, has also begun to show results. Direct lease financing balances showed a significant increase over the year ended June 30, 2011 growing to $127 million from $96 million. As shown below, our core operating earnings (1) increased 30% or $1.9 million over the comparable prior year quarter, reflecting a $2.8 million increase in non-interest income and a $1.6 million increase in net interest income. These results reflect our commitment to fee businesses, especially prepaid cards, in addition to traditional banking, and careful expansion of the loan portfolio which has grown over 7% in 2011 on an annualized basis.”

Financial Results

Bancorp reported net income available to common shareholders for the three months ended June 30, 2011 of $660,000 or diluted earnings per share of $0.02, based on 33,205,741 weighted average shares, compared to net income available to common shareholders of $407,000 or diluted earnings per share of $0.02, based on 26,759,461 weighted average shares, for the three months ended June 30, 2010. Core operating earnings, a non-GAAP measure, increased to $7.7 million for the three months ended June 30, 2011 compared to $5.9 million for the three months ended June 30, 2010. The following is a reconciliation of core operating earnings to net income available to common shareholders (for the three month period):

  June 30,   June 30,

2011

2010

 
Net income available to common shareholders $ 660 $ 407
Income tax expense 289 197
(Gains) and losses on sales of investment securities (603 ) (469 )
(Gains) and losses on other real estate owned 439 -
Provision for loan and lease losses   6,963     5,806  
Core operating earnings (1) $ 7,748   $ 5,941  
 
     

(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. Management utilizes core operating earnings to measure the combined impact of changes in net interest income and non-interest income. 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 June 30, 2011
The Company 9.87% 14.88% 16.14%
The Bancorp Bank 6.89% 10.41% 11.66%
"Well capitalized" institution (under FDIC regulations) 5.00% 6.00% 10.00%
 
As of December 31, 2010
The Company 8.37% 11.99% 13.24%
The Bancorp Bank 7.39% 10.60% 11.85%
"Well capitalized" institution (under FDIC regulations) 5.00% 6.00% 10.00%
 

Balance Sheet Summary

At June 30, 2011, Bancorp's total assets were $2.5 billion, an increase of $342 million or 16% over total assets at June 30, 2010. During that period, investments increased to $371 million, an increase of $142 million or 62%; loans increased to $1.7 billion, an increase of $102 million or 6%; and deposits increased to $2.2 billion, an increase of $281 million or 15%. Total assets decreased compared to March 31, 2011, as a result of seasonal deposit variations.

Conference Call Webcast

You may access the LIVE webcast of Bancorp's Quarterly Earnings Conference Call at 10:00 AM EDT Thursday July 21, 2011 by clicking on the webcast link on Bancorp's homepage at www.thebancorp.com. Or, you may dial 866.804.6923 using access code 14761671. You may listen to the replay of the webcast following the live call on Bancorp's investor relations website or telephonically until Thursday, July 28, 2011 by dialing 888.286.8010, access code 74045158.

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 Six months ended
June 30, June 30,
2011   2010 2011   2010
 
(dollars in thousands except per share data)
Condensed income statement
Net interest income $ 18,257 $ 16,689 $ 36,455   $ 32,969  
Provision for loan and lease losses   6,963   5,806   11,635     9,954  
Non-interest income
Gain on sales of investment securities 603 469 603 1,219
Other than temporary impairment of investment securities - - (75 ) -
Other non-interest income   7,264   4,490   15,084     9,234  
Total non-interest income 7,867 4,959 15,612 10,453
Non-interest expense
Loss on other real estate owned 439 - 491 20
Other non-interest expense   17,773   15,238   34,873     29,425  
Total non-interest expense   18,212   15,238   35,364     29,445  
Net income before income tax expense 949 604 5,068 4,023
Income tax expense   289   197   1,720     1,430  
Net income 660 407 3,348 2,593
Less preferred stock dividends - - - (433 )
Less preferred stock accretion   -   -   -     (5,809 )
Net income (loss) available to common shareholders $ 660 $ 407 $ 3,348   $ (3,649 )
 
Basic earnings (loss) per share $ 0.02 $ 0.02 $ 0.11   $ (0.14 )
 
Diluted earnings (loss) per share $ 0.02 $ 0.02 $ 0.11   $ (0.14 )
Weighted average shares - basic 33,196,281 26,181,281 30,638,325 26,181,281
Weighted average shares - diluted 33,205,741 26,759,461 30,645,678 26,181,281
 
Balance sheet   June 30,   March 31,   December 31,   June 30,
2011 2011 2010 2010
(dollars in thousands)
Assets:
Cash and cash equivalents
Cash and due from banks $ 168,957 $ 223,420 $ 157,411 $ 92,620
Interest bearing deposits   199,866     630,524     314,908     171,054  
Total cash and cash equivalents   368,823     853,944     472,319     263,674  
 
Investment securities, available-for-sale, at fair value 353,099 273,643 231,165 208,080
Investment securities, held-to-maturity 18,102 21,298 21,364 21,496
Loans, net of deferred costs 1,678,660 1,636,253 1,619,195 1,576,525
Allowance for loan and lease losses   (27,685 )   (25,802 )   (24,063 )   (22,336 )
Loans, net of deferred costs   1,650,975     1,610,451     1,595,132     1,554,189  
Premises and equipment, net 8,296 8,533 8,767 8,229
Accrued interest receivable 7,839 8,807 8,878 8,483
Intangible assets, net 8,504 8,754 9,005 9,505
Other real estate owned 3,764 3,379 2,115 459
Deferred tax asset, net 21,960 23,817 24,365 20,258
Other assets   24,477     24,071     22,613     29,497  
Total assets $ 2,465,839   $ 2,836,697   $ 2,395,723   $ 2,123,870  
 
 
Liabilities:
Deposits
Demand (non-interest bearing) $ 1,073,228 $ 1,412,656 $ 945,605 $ 827,268
Savings, money market and interest checking 1,076,654 1,105,226 975,973 903,599
Time deposits 1,394 1,397 90,862 140,285
Time deposits, $100,000 and over   11,427     11,830     11,657     10,455  
Total deposits   2,162,703     2,531,109     2,024,097     1,881,607  
 
Securities sold under agreements to repurchase 20,258 19,783 14,383 7,552
Short-term borrowings - - 87,000 -
Federal funds purchased - - 49,000 -
Accrued interest payable 131 149 124 165
Subordinated debenture 13,401 13,401 13,401 13,401
Other liabilities   7,109     14,654     8,812     17,367  
Total liabilities $ 2,203,602   $ 2,579,096   $ 2,196,817   $ 1,920,092  
 
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 June 30, 2011 and 2010, respectively 33,196 33,196 26,181 26,181
Additional paid-in capital 241,011 240,640 192,711 197,027
Accumulated deficit (14,847 ) (15,507 ) (18,195 ) (20,824 )
Accumulated other comprehensive (loss) gain   2,877     (728 )   (1,791 )   1,394  
Total shareholders' equity 262,237 257,601 198,906 203,778
 
Total liabilities and shareholders' equity $ 2,465,839   $ 2,836,697   $ 2,395,723   $ 2,123,870  
 
Average balance sheet and net interest income   Three months ended June 30, 2011   Three months ended June 30, 2010
(dollars in thousands) Average     Average Average     Average
Assets:

Balance

Interest

Rate

Balance

Interest

Rate

Interest-earning assets:
Loans net of unearned discount $ 1,642,867 $ 18,064 4.40 % $ 1,572,787 $ 18,374 4.67 %
Leases - bank qualified* 4,820 120 9.96 % - - 0.00 %
Investment securities-taxable 270,535 2,341 3.46 % 173,447 1,702 3.93 %
Investment securities-nontaxable* 76,123 1,006 5.29 % 31,948 520 6.51 %
Interest bearing deposits at Federal Reserve Bank   389,794     230 0.24 %   179,874     82 0.18 %
Net interest-earning assets 2,384,139 21,761 3.65 % 1,958,056 20,678 4.22 %
 
Allowance for loan and lease losses (26,463 ) (21,094 )
Other assets   271,564     166,798  
$ 2,629,240   $ 2,103,760  
 
Liabilities and Shareholders' Equity:
Deposits:
Demand (non-interest bearing)** $ 1,224,208 $ 343 0.11 % $ 853,413 $ 279 0.13 %
Interest bearing deposits
Interest checking 753,863 1,705 0.90 % 601,861 2,096 1.39 %
Savings and money market 336,244 794 0.94 % 290,447 1,039 1.43 %
Time   12,812     43 1.34 %   91,561     120 0.52 %
Total interest bearing deposits 1,102,919 2,542 0.92 % 983,869 3,255 1.32 %
Total deposits 2,327,127 2,885 0.50 % 1,837,282 3,534 0.77 %
 
Short-term borrowings - - 0.00 % 34,835 59 0.68 %
Repurchase agreements 19,832 26 0.52 % 8,134 7 0.34 %
Subordinated debt   13,401     216 6.45 %   13,401     216 6.45 %
Net interest bearing liabilities 1,136,152 2,784 0.98 % 1,040,239 3,537 1.36 %
Total deposits and interest bearing liabilities 2,360,360 3,127 0.53 % 1,893,652 3,816 0.81 %
 
Other liabilities   9,668     7,230  
Total liabilities 2,370,028 1,900,882
 
Shareholders' equity   259,212     202,878  
$ 2,629,240   $ 2,103,760  
Net interest income on tax equivalent basis* $ 18,634 $ 16,862
 
Tax equivalent adjustment 377 173
 
Net interest income $ 18,257 $ 16,689
Net interest margin * 3.13 % 3.44 %
 
* 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.
 
Average balance sheet and net interest income   Six months ended June 30, 2011   Six months ended June 30, 2010
(Dollars in thousands) Average     Average Average     Average
Assets:

Balance

Interest

Rate

Balance

Interest

Rate

Interest-earning assets:
Loans net of unearned discount $ 1,635,432 $ 36,324 4.44 % $ 1,545,859 $ 36,289 4.69 %
Leases - bank qualified 3,589 170 9.47 % - - 0.00 %
Investment securities-taxable 228,302 3,897 3.41 % 152,060 3,010 3.96 %
Investment securities-nontaxable* 76,854 2,018 5.25 % 31,405 1,107 7.05 %
Interest bearing deposits at Federal Reserve Bank   610,215     745 0.24 %   327,096     434 0.27 %
Net interest-earning assets 2,554,392 43,154 3.38 % 2,056,420 40,840 3.97 %
 
Allowance for loan and lease losses (25,648 ) (20,472 )
Other assets   279,032     178,762  
$ 2,807,776   $ 2,214,710  
 
Liabilities and Shareholders' Equity:
Deposits:
Demand (non-interest bearing) $ 1,434,775 $ 768 0.11 % $ 985,453 $ 498 0.10 %
Interest bearing deposits
Interest checking 734,463 2,983 0.81 % 570,980 4,020 1.41 %
Savings and money market 328,899 1,592 0.97 % 323,746 2,221 1.37 %
Time   29,567     147 0.99 %   71,029     253 0.71 %
Total interest bearing deposits 1,092,929 4,722 0.86 % 965,755 6,494 1.34 %
Total deposits 2,527,704 5,490 0.43 % 1,951,208 6,992 0.72 %
 
Short-term Borrowings 1,503 3 0.40 % 19,097 64 0.67 %
Repurchase agreements 18,439 42 0.46 % 6,464 14 0.43 %
Subordinated debt   13,401     431 6.43 %   13,179     431 6.54 %
Net interest bearing liabilities 1,126,272 5,198 0.92 % 1,004,495 7,003 1.39 %
Total deposits and interest bearing liabilities 2,561,047 5,966 0.47 % 1,989,948 7,501 0.75 %
 
Other liabilities   9,553     9,978  
Total liabilities 2,570,600 1,999,926
 
Shareholders' equity   237,176     214,784  
 
$ 2,807,776   $ 2,214,710  
Net interest income on tax equivalent basis*   37,188   33,339
 
Tax equivalent adjustment 733 370
 
Net interest income $ 36,455 $ 32,969
Net interest margin * 2.91 % 3.24 %
 
Allowance for loan and lease losses:   Six months ended   For year ended
June 30,   June 30, 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 4,804 6,484 13,513
Construction 2,496 - -
Lease financing - - 3
Residential mortgage 49 223 1,254
Consumer   681   138   618
Total   8,030   6,845   15,388
 
Recoveries:
Commercial 15 79 279
Construction 2 3 4
Lease financing - - 10
Residential mortgage - 16 742
Consumer   -   6   6
Total   17   104   1,041
Net charge-offs 8,013 6,741 14,347
Provision charged to operations   11,635   9,954   19,287
 
Balance in allowance for loan and lease losses at end of period $ 27,685 $ 22,336 $ 24,063
Net charge-offs/average loans 0.49% 0.44% 0.92%
 
Loan portfolio:   June 30,   March 31,   December 31,   June 30,
2011 2011 2010 2010
(dollars in thousands)
 
Commercial $ 450,916 $ 430,081 $ 441,799 $ 403,320
Commercial mortgage (1) 593,842 601,046 580,780 580,542
Construction   205,730   202,105   203,120   207,846
Total commercial loans 1,250,488 1,233,232 1,225,699 1,191,708
Direct financing leases 127,016 107,624 103,289 96,319
Residential mortgage 98,113 94,682 93,004 95,542
Consumer loans and others   200,132   197,876   194,320   190,729
1,675,749 1,633,414 1,616,312 1,574,298
Unamortized costs (fees)   2,911   2,839   2,883   2,227
Total loans, net of deferred loan costs $ 1,678,660 $ 1,636,253 $ 1,619,195 $ 1,576,525
 
Supplemental loan data:
Construction 1-4 family $ 93,422 $ 96,240 $ 92,190 $ 106,273
Construction commercial, acquisition and development   112,308   105,865   110,930   101,573
$ 205,730 $ 202,105 $ 203,120 $ 207,846
(1) At June 30, 2011 our owner-occupied loans amounted to $132 million, or 22.2% of commercial mortgages.
 
  June 30,   December 31,   September 30,   June 30,
2011 2010 2010 2010
Asset quality ratios:
Nonperforming loans to total loans (1) 1.43% 1.08% 1.51% 1.82%
Nonperforming assets to total assets (1) 1.12% 0.82% 0.91% 1.37%
Allowance for loan and lease losses to total loans 1.65% 1.49% 1.37% 1.42%
 
Nonaccrual loans $ 19,526 $ 15,298 $ 19,640 $ 18,193
Total nonperforming loans 19,526 15,298 19,640 18,193
Other real estate owned 3,764 2,115 225 459
Total nonperforming assets $ 23,290 $ 17,413 $ 19,865 $ 18,652
 
Loans 90 days past due still accruing interest $ 4,397 $ 2,219 $ 4,352 $ 10,529
(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
June 30,   December 31, December 31,

2011

 

2010

2010

2010

Selected operating ratios:
Return on average assets 0.10% 0.08% 0.34% 0.23%
Return on average equity 1.02% 0.80% 4.01% 2.45%
Net interest margin 3.13% 3.44% 3.36% 3.28%
Efficiency ratio 71.36% 71.95% 69.37% 70.52%
Book value per share $ 7.90 $ 7.78 $ 7.60 $ 7.60
 

Source: The Bancorp, Inc.

Contact:

The Bancorp, Inc.

Andres Viroslav, 215-861-7990

andres.viroslav@thebancorp.com

View All News