Investor Menu
View All News

The Bancorp, Inc. Reports First Quarter 2012 Financial Results

April 24, 2012

WILMINGTON, Del.--(BUSINESS WIRE)-- The Bancorp, Inc. ("Bancorp") (NASDAQ: TBBK), a financial holding company, today reported financial results for the quarter ended March 31, 2012.

Financial Highlights

  • Net income for the first quarter of 2012 increased by 48%, to $4.0 million compared to $2.7 million in the same quarter of 2011. Diluted earnings per share for the first quarter of 2012 increased to $0.12 on 33.1 million shares versus $0.10 on 28.1 million shares in the same quarter of 2011.

Key factors driving these results were:

  • 90% increase in quarterly prepaid card fees to $9.0 million compared to $4.8 million in first quarter 2011.
  • 15% increase in quarterly net interest income to $20.9 million compared to $18.2 million in first quarter 2011.
  • 58% increase in quarterly non-interest income (including prepaid card fees) to $12.3 million compared to $7.7 million in first quarter 2011 excluding security gains and other than temporary impairment (OTTI).
  • At March 31, 2012 the portfolio of loans and securities had grown to $2.2 billion, an increase of $323 million, or 17% over first quarter 2011. Outstanding loans increased 7% over that period.
  • Average deposits for first quarter 2012 totaled $3.8 billion, an increase of $1.1 billion or 39% over 2011, reflecting growth in all major deposit categories. The interest paid on deposits between those respective periods decreased to 0.29% from 0.38%.

Betsy Z. Cohen, Bancorp’s Chief Executive Officer, said, “First quarter 2012 saw a continuation in our earnings growth as a result of significant increases in both our non-interest and net-interest income. Quarterly net income of $4.0 million was achieved notwithstanding $1.5 million of other real estate owned (OREO) charges and an increase in the loan loss provision. Adjusted operating earnings, a non-GAAP measure, increased to $12.9 million, a $4.0 million, or 44% increase over the prior year period. Our position as a leader in the prepaid card space continues to drive the increase in non-interest income. On the asset side, we grew our loans 7% over the year in a difficult lending environment. We continue to target what we believe to be lower risk assets including Small Business Administration (SBA) loans, security backed lines of credit and vehicle fleet leasing. Leasing balances grew 21% over the year to $130 million and we have recently added relationships which should result in additional security backed line of credit balances. The Company is well capitalized, and book value per share increased from $7.76 at March 31, 2011 to $8.41, or an increase of 8%. We note that our leverage capital ratio was distorted during the quarter as a result of the seasonal deposits referenced earlier, and that we expect that the ratio will increase next quarter as these balances terminate.”

Financial Results

Bancorp reported net income available to common shareholders for the three months ended March 31, 2012 of $4.0 million or diluted earnings per share of $0.12, based on 33,107,037 weighted average shares outstanding, compared to net income available to common shareholders of $2.7 million or diluted earnings per share of $0.10, based on 28,058,333 weighted average shares outstanding, for the three months ended March 31, 2011. Adjusted operating earnings, a non-GAAP measure, increased to $12.9 million for the three months ended March 31, 2012 compared to $8.9 million for the three months ended March 31, 2011. The following is a reconciliation of adjusted operating earnings to net income available to common shareholders (for the three month period):

           
March 31, March 31,

2012

2011

 
Net income available to common shareholders $ 3,972 $ 2,688
Income tax expense 2,227 1,431
Other than temporary impairment in securities - 75
Losses and write downs on other real estate owned 1,451 52
Provision for loan and lease losses   5,220   4,672
Adjusted operating earnings (1) $12,870$8,918
 
   
(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 adjusted operating earnings to measure the combined impact of changes in net interest income, non-interest income and certain other expenses. Other companies may calculate adjusted operating 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.
 

Balance Sheet Summary

At March 31, 2012, Bancorp's total assets were $4.1 billion, an increase of $1.3 billion or 45% over total assets at March 31, 2011. During that period, investments increased to $500 million, an increase of $211 million or 73%; loans increased to $1.7 billion, an increase of $113 million or 7%; and deposits increased to $3.8 billion, an increase of $1.2 billion or 49%. Total assets increased compared to March 31, 2011, primarily as a result of deposit growth.

Conference Call Webcast

You may access the LIVE webcast of Bancorp's Quarterly Earnings Conference Call at 8:30 AM EDT Wednesday, April 25, 2012 by clicking on the webcast link on Bancorp's homepage at www.thebancorp.com. Or, you may dial 888.268.4176, access code 16809756. You may listen to the replay of the webcast following the live call on Bancorp's investor relations website or telephonically until Wednesday, May 2, 2012 by dialing 888.286.8010, access code 65379042.

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.

           
Three months ended Year ended
March 31, December 31,
2012 2011 2011
(dollars in thousands except per share data)
Condensed income statement
Net interest income $20,916$18,198   $76,406  
Provision for loan and lease losses   5,220   4,672     21,498  
Non-interest income
Gain on sales of investment securities - - 759
Other than temporary impairment of investment securities - (75 ) (75 )
Other non-interest income   12,290   7,758     29,841  
Total non-interest income 12,290 7,683 30,525
Non-interest expense
Losses and write downs on other real estate owned 1,451 52 555
Other non-interest expense   20,336   17,038     71,649  
Total non-interest expense   21,787   17,090     72,204  
Net income before income tax expense 6,199 4,119 13,229
Income tax expense   2,227   1,431     4,311  
Net income 3,972 2,688 8,918
Less preferred stock dividends - - -
Less preferred stock accretion   -   -     -  
Net income available to common shareholders $3,972$2,688   $8,918  
 
Basic earnings per share $0.12$0.10   $0.28  
 
Diluted earnings per share $0.12$0.10   $0.28  
Weighted average shares - basic 33,097,325 28,051,948 31,927,815
Weighted average shares - diluted 33,107,037 28,058,333 31,933,592
 
               
Balance sheetMarch 31, December 31, September 30, March 31,
2012 2011 2011 2011
(dollars in thousands)
Assets:
Cash and cash equivalents
Cash and due from banks $ 142,123 $ 96,228 $ 259,116 $ 223,420
Interest earning deposits at Federal Reserve Bank   1,663,664     652,946     932,152     630,524  
Total cash and cash equivalents   1,805,787     749,174     1,191,268     853,944  
 
Investment securities, available-for-sale, at fair value 481,553 448,204 416,362 267,715
Investment securities, held-to-maturity 17,971 18,044 18,095 21,298
Federal Home Loan Bank & Atlantic Central Bankers Bank stock 4,836 5,088 5,354 5,928
 
Loans, net of deferred costs 1,748,867 1,744,828 1,715,648 1,636,253
Allowance for loan and lease losses   (31,500)   (29,568)   (27,671)   (25,802)
Loans, net of deferred costs   1,717,367     1,715,260     1,687,977     1,610,451  
Premises and equipment, net 8,514 8,358 8,307 8,533
Accrued interest receivable 9,032 8,476 8,541 8,807
Intangible assets, net 7,754 8,004 8,254 8,754
Other real estate owned 7,726 7,405 6,415 3,379
Deferred tax asset, net 20,804 21,941 19,902 23,817
Other assets   22,703     20,727     22,538     24,071  
Total assets $4,104,047   $3,010,681   $3,393,013   $2,836,697  
 
Liabilities:
Deposits
Demand (non-interest bearing) $ 2,441,256 $ 1,424,913 $ 1,866,259 $ 1,412,656
Savings, money market and interest checking 1,302,538 1,222,368 1,171,349 1,105,226
Time deposits 20,637 25,528 25,552 1,397
Time deposits, $100,000 and over   9,447     9,742     10,341     11,830  
Total deposits   3,773,878     2,682,551     3,073,501     2,531,109  
 
Securities sold under agreements to repurchase 25,906 33,177 25,057 19,783
Accrued interest payable 129 123 113 149
Subordinated debenture 13,401 13,401 13,401 13,401
Other liabilities   12,500     9,950     12,262     14,654  
Total liabilities $3,825,814   $2,739,202   $3,124,334   $2,579,096  
 
Shareholders' equity:
Common stock - authorized, 50,000,000 shares of $1.00 par value; 33,101,281 and 33,196,281 shares issued at March 31, 2012 and 2011, respectively 33,201 33,196 33,196 33,196
Treasury stock (100,000 shares) (866 ) (866 ) - -
Additional paid-in capital 242,661 241,997 241,473 240,640
Accumulated deficit (5,305 ) (9,277 ) (12,565 ) (15,507 )
Accumulated other comprehensive (loss) gain   8,542     6,429     6,575     (728)
Total shareholders' equity 278,233 271,479 268,679 257,601
 
Total liabilities and shareholders' equity $4,104,047   $3,010,681   $3,393,013   $2,836,697  
 
       
Average balance sheet and net interest income Three months ended March 31, 2012 Three months ended March 31, 2011
(dollars in thousands) Average         Average Average         Average
Assets:BalanceInterestRateBalanceInterestRate
Interest-earning assets:
Loans net of unearned discount $ 1,733,736 $ 18,823 4.34 % $ 1,627,928 $ 18,260 4.49 %
Leases - bank qualified* 10,439 189 7.24 % 2,344 50 8.53 %
Investment securities-taxable 369,921 3,190 3.45 % 179,469 1,557 3.47 %
Investment securities-nontaxable* 96,384 1,066 4.42 % 77,592 1,011 5.21 %
Interest earning deposits at Federal Reserve Bank   1,698,456     1,053 0.25 %   833,085     515 0.25 %
Net interest earning assets 3,908,936 24,321 2.49 % 2,720,418 21,393 3.15 %
 
Allowance for loan and lease losses (30,638 ) (24,811 )
Other assets   229,504     292,667  
$ 4,107,802   $ 2,988,274  
 
Liabilities and Shareholders' Equity:
Deposits:
Demand (non-interest bearing)** $ 2,487,860 $ 412 0.07 % $ 1,647,682 $ 425 0.10 %
Interest bearing deposits
Interest checking 804,788 1,582 0.79 % 714,846 1,279 0.72 %
Savings and money market 457,855 631 0.55 % 321,472 797 0.99 %
Time   31,355     97 1.24 %   46,507     104 0.89 %
Total interest bearing deposits 1,293,998 2,310 0.71 % 1,082,825 2,180 0.81 %
Total deposits 3,781,858 2,722 0.29 % 2,730,507 2,605 0.38 %
 
Short-term borrowings - - 0.00 % 3,022 3 0.40 %
Repurchase agreements 28,259 27 0.38 % 17,030 16 0.38 %
Subordinated debt   13,401     217 6.48 %   13,401     215 6.42 %
Net interest bearing liabilities 1,335,658 2,554 0.76 % 1,116,278 2,414 0.87 %
Total deposits and interest bearing liabilities 3,823,518 2,966 0.31 % 2,763,960 2,839 0.41 %
 
Other liabilities   10,598     9,435  
Total liabilities 3,834,116 2,773,395
 
Shareholders' equity   273,686     214,879  
$ 4,107,802   $ 2,988,274  
Net interest income on tax equivalent basis* $ 21,355 $ 18,554
 
Tax equivalent adjustment 439 356
 
Net interest income $ 20,916 $ 18,198
Net interest margin * 2.19%2.73%
                   
* Full taxable equivalent basis, using a 35% statutory tax rate.
 
** Non-interest bearing demand accounts are not paid interest. The amount shown as interest reflects the fees paid to affinity groups, which are based upon a rate index, and therefore classified as interest expense.
 
               
Allowance for loan and lease losses: Three months ended For year ended
March 31, March 31, December 31,
2012 2011 2011
(dollars in thousands)
 
Balance in the allowance for loan and lease losses at beginning of period $29,568   $24,063   $24,063  
 
Loans charged-off:
Commercial 2,448 106 8,651
Construction 702 2,143 3,254
Lease financing 86 - 39
Residential mortgage - 31 2,870
Consumer   172     668     1,280  
Total   3,408     2,948     16,094  
 
Recoveries:
Commercial 36 14 91
Construction 1 1 4
Lease financing - - -
Residential mortgage 83 - -
Consumer   -     -     6  
Total   120     15     101  
Net charge-offs 3,288 2,933 15,993
Provision charged to operations   5,220     4,672     21,498  
 
Balance in allowance for loan and lease losses at end of period $31,500   $25,802   $29,568  
Net charge-offs/average loans 0.19 % 0.18 % 0.96 %
 
 
Loan portfolio:March 31, December 31, September 30, March 31,
2012 2011 2011 2011
(dollars in thousands)
 
Commercial $ 445,912 $ 450,411 $ 461,679 $ 430,081
Commercial mortgage (1) 617,871 609,487 577,237 601,046
Construction   248,232     246,611     242,806     202,105
Total commercial loans 1,312,015 1,306,509 1,281,722 1,233,232
Direct lease financing 130,321 129,682 129,400 107,624
Residential mortgage 94,438 96,110 96,139 94,682
Consumer loans and others   208,584     209,041     205,243     197,876
1,745,358 1,741,342 1,712,504 1,633,414
Unamortized loan costs   3,509     3,486     3,144     2,839
Total loans, net of deferred loan costs $1,748,867   $1,744,828   $1,715,648   $1,636,253
 
Supplemental loan data:
Construction 1-4 family $ 85,461 $ 85,189 $ 91,783 $ 96,240
Commercial construction, acquisition and development   162,771     161,422     151,023     105,865
  $248,232   $246,611   $242,806   $202,105

(1) At March 31, 2012 our owner-occupied loans amounted to $144 million, or 23.3% of commercial mortgages.

 
           

Capital Ratios

Tier 1 capital

to average

assets ratio

Tier 1 capital

to risk-weighted

assets ratio

Total capital

to risk-weighted

assets ratio

 
As of March 31, 2012
The Company 6.59 % 14.94 % 16.19 %
The Bancorp Bank 5.41 % 12.29 % 13.54 %
"Well capitalized" institution (under FDIC regulations) 5.00 % 6.00 % 10.00 %
 
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 %
 
               
Three months ended Year ended
March 31, December 31, December 31,

2012

2011

2011

2011

Selected operating ratios:
Return on average assets 0.39 % 0.36 % 0.43 % 0.31 %
Return on average equity 5.84 % 5.07 % 4.84 % 3.54 %
Net interest margin

2.19

%

2.73

% 2.89 % 2.96 %
Efficiency ratio (1) 65.61 % 66.03 % 67.21 % 67.96 %
Book value per share $ 8.41 $ 7.76 $ 8.18 $ 8.18
 
(1) Excluding the impact of the OREO losses in the first quarter of 2012 the efficiency ratio would have been 61.24%
 
 
March 31, December 31, September 30, March 31,
2012 2011 2011 2011
Asset quality ratios:
Nonperforming loans to total loans (1) 1.42 % 1.24 % 1.33 % 1.05 %
Nonperforming assets to total assets (1) 0.79 % 0.97 % 0.86 % 0.73 %
Allowance for loan and lease losses to total loans 1.80 % 1.69 % 1.61 % 1.58 %
 
Nonaccrual loans $ 20,929 $ 17,587 $ 17,201 $ 14,228
Other real estate owned   7,726     7,405     6,415     3,379  
Total nonperforming assets $28,655   $24,992   $23,616   $17,607  
 
Loans 90 days past due still accruing interest $3,914   $4,101   $5,550   $3,028  
 
(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.
 

The Bancorp, Inc.
Andres Viroslav, 215-861-7990
aviroslav@thebancorp.com

Source: The Bancorp, Inc.

View All News