The Bancorp, Inc. Reports Fourth Quarter and Fiscal 2012 Financial Results

  The Bancorp, Inc. Reports Fourth Quarter and Fiscal 2012 Financial Results

Business Wire

WILMINGTON, Del. -- January 23, 2013

The Bancorp, Inc. ("Bancorp") (NASDAQ: TBBK), a financial holding company,
today reported financial results for the fourth quarter and fiscal 2012.

Net income for the fourth quarter of 2012 increased to $5.2 million compared
to $3.3 million in the fourth quarter of 2011, an increase of 59%.

Financial Highlights

  *50% increase in diluted earnings per share to $0.15 for the fourth quarter
    of 2012 versus $0.10 for the fourth quarter of 2011. Diluted earnings per
    share amounted to $0.50 for the year ended December 31, 2012 compared to
    diluted earnings per share of $0.28 for the year ended December 31, 2011,
    an increase of 79%.
  *27% increase in total quarterly revenues to $40.3 million compared to
    $31.7 million in fourth quarter 2011
  *84% increase in quarterly non-interest income, primarily prepaid card
    fees, to $15.1 million compared to $8.2 million in fourth quarter 2011,
    excluding security gains and other than temporary impairment (OTTI)
    charges.
  *8% increase in quarterly net interest income to $22.1 million compared to
    $20.4 million in fourth quarter 2011. On a linked quarter basis, net
    interest income grew at an annualized 10% rate, primarily reflecting
    higher loan income.
  *At December 31, 2012 our portfolio of loans and securities had grown to
    $2.7 billion, an increase of $466 million, or 21% over fourth quarter
    2011. Outstanding loans increased 10% over that period.
  *Average deposits for fourth quarter 2012 totaled $3.0 billion, an increase
    of $274 million or 10% over 2011, reflecting growth in all major deposit
    categories. The interest paid on deposits between those respective periods
    decreased to 0.31% from 0.40%.
  *Issued $45 million of common stock accretive to book value.

Betsy Z. Cohen, Bancorp’s Chief Executive Officer, said, “Fourth quarter 2012
saw a significant earnings increase as a result of increases in both our
non-interest and net interest income. Adjusted operating earnings, a non-GAAP
measure, increased to $13.9 million, a $4.5 million, or 48% increase over the
comparable prior year period. Notwithstanding increased loan loss provisions,
our net income and earnings per share increased 59% and 50%, respectively. The
increases in non-interest and net interest income also resulted in an
efficiency ratio, a non-GAAP measure, of 63% for the quarter compared to 67%
for the prior year quarter. Our leadership position in the prepaid card space
continues as the major driver of the increase in non-interest income. On the
asset side, we grew our loans 10% 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. Consumer loans, primarily security backed
lines of credit, grew 42% over the past year, to $297 million, while leases
grew 21%. The SBA loan portfolio will very shortly exceed $100 million. All
three of these categories have demonstrated low levels of losses. During the
quarter, we successfully completed a $45 million capital raise, accretive to
book value. While we were not in immediate need of capital, our transaction
account deposit growth continues to exceed our expectations and we decided to
be proactive in building our capital to support that trend. We strategically
exited two higher cost deposit relationships in 2012 which averaged over $800
million in deposits in fourth quarter 2011, to focus on lower cost deposits.
If we exclude the impact of those changes, average fourth quarter deposits
actually grew in excess of 57% year over year. The Company is well
capitalized, and book value per share increased from $8.18 at December 31,
2011 to $9.06 at December 31, 2012, or an increase of 11%.”

Financial Results

Bancorp reported net income available to common shareholders for the three
months ended December 31, 2012 of $5.2 million or diluted earnings per share
of $0.15, based on 33,921,763 weighted average shares outstanding, compared to
net income available to common shareholders of $3.3 million or diluted
earnings per share of $0.10, based on 33,202,761 weighted average shares
outstanding, for the three months ended December 31, 2011. Adjusted operating
earnings, a non-GAAP measure, increased to $13.9 million for the three months
ended December 31, 2012 compared to $9.4 million for the three months ended
December 31, 2011. The following is a reconciliation of adjusted operating
earnings to net income available to common shareholders:

                                                
                     Quarter ended                 Year ended
                     December 31,  December 31,   December 31,  December 31,
                     2012           2011           2012           2011
                                                                  
Net income
available to         $  5,237       $  3,288       $  16,624      $  8,918
common
shareholders
Income tax expense      1,622          1,382          7,794          4,311
Gains on sales of
investment              (554    )      (136   )       (661    )      (759    )
securities
Other than
temporary               76             -              202            75
impairment in
securities
Losses and
writedowns on           103            -              2,508          555
other real estate
owned
Provision for loan     7,391        4,844        22,438       21,498  
and lease losses
Adjusted operating   $  13,875     $  9,378      $  48,905     $  34,598  
earnings (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
(1)  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 net income calculated pursuant to GAAP.
      

Balance Sheet Summary

At December 31, 2012, Bancorp's total assets amounted to $3.7 billion, an
increase of $689 million or 23% over total assets at December 31, 2011. During
that period, investments increased to $763 million, an increase of $297
million or 64%; loans increased to $1.9 billion, an increase of $169 million
or 10%; and deposits increased to $3.3 billion, an increase of $631 million or
24%. During the year ended December 31, 2012, Bancorp strategically exited two
large balance deposit relationships which totaled $455 million at December 31,
2011. The relationships were terminated to eliminate certain seasonal deposit
fluctuations and reduce interest expense.

Conference Call Webcast

You may access the LIVE webcast of Bancorp's Quarterly Earnings Conference
Call at 8:30 AM EDT Thursday, January 24, 2013 by clicking on the webcast link
on Bancorp's homepage at www.thebancorp.com. Or, you may dial 866.510.0676,
access code 88069381. You may listen to the replay of the webcast following
the live call on Bancorp's investor relations website or telephonically until
Thursday, January 31, 2013 by dialing 888.286.8010, access code 81909498.

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
               December 31,                    December 31,
               2012            2011           2012            2011
               (dollars in thousands except per share data)
Condensed
income
statement
Net interest   $ 22,086        $ 20,356       $ 85,444        $ 76,406     
income
Provision
for loan and    7,391          4,844         22,438         21,498     
lease losses
Non-interest
income
Gain on
sales of         554              136            661              759
investment
securities
Other than
temporary
impairment       (76        )     -              (202       )     (75        )
of
investment
securities
Other
non-interest    15,147         8,246         49,138         29,841     
income
Total
non-interest     15,625           8,382          49,597           30,525
income
Non-interest
expense
Losses and
write downs
on other         103              -              2,508            555
real estate
owned
Other
non-interest    23,358         19,224        85,677         71,649     
expense
Total
non-interest    23,461         19,224        88,185         72,204     
expense
Net income
before           6,859            4,670          24,418           13,229
income tax
expense
Income tax      1,622          1,382         7,794          4,311      
expense
Net income
available to   $ 5,237         $ 3,288        $ 16,624        $ 8,918      
common
shareholders
                                                                
Basic
earnings per   $ 0.15          $ 0.10         $ 0.50          $ 0.28       
share
                                                                
Diluted
earnings per   $ 0.15          $ 0.10         $ 0.50          $ 0.28       
share
Weighted
average          33,603,879       33,196,281     33,227,755       31,927,815
shares -
basic
Weighted
average          33,921,763       33,202,761     33,288,278       31,933,592
shares -
diluted
                                                                             

                                                                 
Balance sheet         December 31,    September 30,   June 30,        December 31,
                      2012            2012            2012            2011
                      (dollars in thousands)
Assets:
Cash and cash
equivalents
Cash and due from     $ 19,982        $ 4,648         $ 5,560         $ 96,228
banks
Interest earning
deposits at Federal    948,111       540,010       692,582       652,946   
Reserve Bank
Total cash and cash    968,093       544,658       698,142       749,174   
equivalents
                                                                      
Investment
securities,             718,065         634,894         582,219         448,204
available-for-sale,
at fair value
Investment
securities,             45,179          22,707          17,796          18,044
held-to-maturity
Federal Home Loan
Bank & Atlantic         3,621           4,160           4,596           5,088
Central Bankers
Bank stock
Loans held for          11,341          7,970           -               -
sale, at fair value
Loans, net of           1,902,854       1,856,992       1,804,312       1,744,828
deferred costs
Allowance for loan     (33,040   )    (33,071   )    (31,171   )    (29,568   )
and lease losses
Loans, net             1,869,814     1,823,921     1,773,141     1,715,260 
Premises and            10,368          9,802           8,694           8,358
equipment, net
Accrued interest        9,857           10,061          9,297           8,476
receivable
Intangible assets,      7,004           7,254           7,504           8,004
net
Other real estate       4,241           3,065           4,919           7,405
owned
Deferred tax asset,     22,789          19,708          20,716          21,941
net
Other assets           29,287        24,925        23,178        20,727    
Total assets          $ 3,699,659    $ 3,113,125    $ 3,150,202    $ 3,010,681 
                                                                      
Liabilities:
Deposits
Demand and interest   $ 2,775,207     $ 2,300,025     $ 2,335,960     $ 2,192,938
checking
Savings and money       517,098         459,725         456,614         454,343
market
Time deposits           12,582          12,606          20,619          25,528
Time deposits,         8,334         8,819         9,104         9,742     
$100,000 and over
Total deposits         3,313,221     2,781,175     2,822,297     2,682,551 
                                                                      
Securities sold
under agreements to     18,548          18,802          21,948          33,177
repurchase
Accrued interest        103             100             127             123
payable
Subordinated            13,401          13,401          13,401          13,401
debenture
Other liabilities      17,709        10,662        9,555         9,950     
Total liabilities     $ 3,362,982    $ 2,824,140    $ 2,867,328    $ 2,739,202 
                                                                      
Shareholders'
equity:
Common stock -
authorized,
50,000,000 shares
of $1.00 par value;
37,246,655 and          37,247          33,209          33,201          33,196
33,196,281 shares
issued at December
31, 2012 and 2011,
respectively
Treasury stock          (866      )     (866      )     (866      )     (866      )
(100,000 shares)
Additional paid-in      282,708         243,954         243,284         241,997
capital
Retained earnings
(accumulated            7,347           2,110           (1,451    )     (9,277    )
deficit)
Accumulated other      10,241        10,578        8,706         6,429     
comprehensive gain
Total shareholders'     336,677         288,985         282,874         271,479
equity
                                                                      
Total liabilities
and shareholders'     $ 3,699,659    $ 3,113,125    $ 3,150,202    $ 3,010,681 
equity
                                                                      

                                                             
Average balance sheet
and net interest         Three months ended December 31, 2012   Three months ended December 31, 2011
income
(dollars in thousands)     Average                  Average     Average                  Average
Assets:                    Balance         Interest   Rate        Balance         Interest   Rate
Interest-earning
assets:
Loans net of unearned    $ 1,888,755     $ 20,091     4.25  %   $ 1,722,161     $ 19,082     4.43  %
discount **
Leases - bank              15,030          211        5.62  %     7,356           149        8.10  %
qualified*
Investment                 602,749         3,310      2.20  %     377,071         3,054      3.24  %
securities-taxable
Investment                 107,370         1,078      4.02  %     86,259          1,044      4.84  %
securities-nontaxable*
Interest earning
deposits at Federal        681,272         419        0.25  %     678,768         420        0.25  %
Reserve Bank
Federal funds
sold/securities           1,689         7          1.65  %    -             -          0.00  %
purchased under
agreement to resell
Net interest earning       3,296,865       25,116     3.05  %     2,871,615       23,749     3.31  %
assets
                                                                                             
Allowance for loan and     (34,018   )                            (28,166   )
lease losses
Other assets              78,755                               211,356   
                         $ 3,341,602                           $ 3,054,805 
                                                                                             
Liabilities and
Shareholders' Equity:
Deposits:
Demand and interest      $ 2,502,314     $ 1,719      0.27  %   $ 2,287,085     $ 2,046      0.36  %
checking
Savings and money          480,473         569        0.47  %     407,536         544        0.53  %
market
Time                      21,323        55         1.03  %    35,390        113        1.28  %
Total deposits             3,004,110       2,343      0.31  %     2,730,011       2,703      0.40  %
                                                                                             
Repurchase agreements      19,090          20         0.42  %     32,150          57         0.71  %
Subordinated debt         13,401        216        6.45  %    13,401        216        6.45  %
Total deposits and
interest bearing           3,036,601       2,579      0.34  %     2,775,562       2,976      0.43  %
liabilities
                                                                                             
Other liabilities         9,157                                9,712     
Total liabilities          3,045,758                              2,785,274
                                                                                             
Shareholders' equity      295,844                              269,531   
                         $ 3,341,602                           $ 3,054,805 
Net interest income on                   $ 22,537                               $ 20,773
tax equivalent basis*
                                                                                             
Tax equivalent                             451                                    417
adjustment
                                                                                             
Net interest income                      $ 22,086                               $ 20,356
Net interest margin *                                 2.73  %                                2.89  %
                                                                                             
* Full taxable equivalent basis, using a 35% statutory tax rate.
** Includes loans held for sale.
                                                                                             

                                                             
Average balance sheet
and net interest         Year ended December 31, 2012           Year ended December 31, 2011
income
(Dollars in thousands)     Average                  Average     Average                  Average
Assets:                    Balance         Interest   Rate        Balance         Interest   Rate
Interest-earning
assets:
Loans net of unearned    $ 1,807,770     $ 77,685     4.30  %   $ 1,671,940     $ 74,347     4.45  %
discount **
Leases - bank              13,571          826        6.09  %     4,976           438        8.80  %
qualified*
Investment                 482,463         13,378     2.77  %     289,002         9,682      3.35  %
securities-taxable
Investment                 103,901         4,331      4.17  %     77,509          4,111      5.30  %
securities-nontaxable*
Interest earning
deposits at Federal        974,762         2,433      0.25  %     588,689         1,461      0.25  %
Reserve Bank
Federal funds
sold/securities           425           7          1.65  %    -             -          0.00  %
purchased under
agreement to resell
Net interest-earning       3,382,892       98,660     2.92  %     2,632,116       90,039     3.42  %
assets
                                                                                             
Allowance for loan and     (32,320   )                            (26,999   )
lease losses
Other assets              127,486                              255,444   
                         $ 3,478,058                           $ 2,860,561 
                                                                                             
Liabilities and
Shareholders' Equity:
Deposits:
Demand and interest      $ 2,666,493     $ 7,691      0.29  %   $ 2,175,972     $ 8,035      0.37  %
checking
Savings and money          455,860         2,401      0.53  %     355,094         2,550      0.72  %
market
Time                      26,624        356        1.34  %    31,066        354        1.14  %
Total deposits             3,148,977       10,448     0.33  %     2,562,132       10,939     0.43  %
                                                                                             
Short-term borrowings      -               -          0.00  %     745             3          0.40  %
Repurchase agreements      22,508          95         0.42  %     23,113          231        1.00  %
Subordinated debt         13,401        869        6.48  %    13,401        863        6.44  %
Total deposits and
interest bearing           3,184,886       11,412     0.36  %     2,599,391       12,036     0.46  %
liabilities
                                                                                             
Other liabilities         9,440                                9,138     
Total liabilities          3,194,326                              2,608,529
                                                                                             
Shareholders' equity      283,732                              252,032   
                                                                                             
                         $ 3,478,058                           $ 2,860,561 
Net interest income on                    87,248                                78,003
tax equivalent basis*
                                                                                             
Tax equivalent                             1,804                                  1,597
adjustment
                                                                                             
Net interest income                      $ 85,444                               $ 76,406
Net interest margin *                                 2.58  %                                2.96  %
                                                                                             
* Full taxable equivalent basis to be comparable to the interest income of all other categories,
using a 35% statutory tax rate
** Includes loans held for sale.
                                                                                             

                                                              
Allowance for loan   Year ended
and lease losses:
                     December 31,  December 31,
                     2012          2011
                     (dollars in thousands)
                                                                  
Balance in the
allowance for loan
and lease losses     $  29,568      $   24,063
at beginning of
period
                                                                  
Loans charged-off:
Commercial              9,508           8,651
Construction            11,318          3,254
Lease financing         87              39
Residential             -               2,870
mortgage
Consumer               340            1,280
Total                  21,253         16,094
                                                                  
Recoveries:
Commercial              2,093           91
Construction            96              4
Lease financing         13              -
Residential             85              -
mortgage
Consumer               -              6
Total                  2,287          101
Net charge-offs         18,966          15,993
Provision charged      22,438         21,498
to operations
                                                                  
Balance in
allowance for loan   $  33,040      $   29,568
and lease losses
at end of period
                                                                  
                                                                  
                                                                  
Loan portfolio:      December 31,   September 30,   June 30,      December 31,
                     2012           2012            2012          2011
                     (dollars in thousands)
                                                                  
Commercial           $  470,109     $   453,444     $ 441,167     $  450,411
Commercial              617,069         614,410       596,639        609,487
mortgage (1)
Construction           258,684        263,726      269,636       246,611
Total commercial        1,345,862       1,331,580     1,307,442      1,306,509
loans
Direct lease            156,697         146,728       140,012        129,682
financing
Residential             97,717          97,589        97,226         96,110
mortgage
Consumer loans and     296,915        276,427      255,769       209,041
others
                        1,897,191       1,852,324     1,800,449      1,741,342
Unamortized loan       5,663          4,668        3,863         3,486
costs
Total loans, net
of deferred loan     $  1,902,854   $   1,856,992   $ 1,804,312   $  1,744,828
costs
                                                                  
Supplemental loan
data:
Construction 1-4     $  60,343      $   71,599      $ 79,546      $  85,189
family
Commercial
construction,          198,341        192,127      190,090       161,422
acquisition and
development
                    $  258,684     $   263,726     $ 269,636     $  246,611
(1) At December 31, 2012 our owner-occupied loans amounted to $173 million, or
28.0% of commercial mortgages.
                                                                  

                                                          
Capital Ratios
                                                              
                              Tier 1       Tier 1 capital     Total capital
                              capital
                              to average   to risk-weighted   to risk-weighted
                              assets       assets             assets
                                                              
As of December 31, 2012
The Company                   9.99%        16.39%             17.65%
The Bancorp Bank              7.24%        11.91%             13.16%
"Well capitalized"
institution (under FDIC       5.00%        6.00%              10.00%
regulations)
                                                              
As of December 31, 2011
The Company                   8.69%        14.64%             15.89%
The Bancorp Bank              6.13%        10.34%             11.60%
"Well capitalized"
institution (under FDIC       5.00%        6.00%              10.00%
regulations)
                                                              

                                                  
                        Three months ended           Year ended
                        December 31,                 December 31,
                        2012           2011         2012         2011
Selected operating
ratios:
Return on average          0.62    %      0.43   %     0.48    %     0.31    %
assets
Return on average          7.04    %      4.84   %     5.86    %     3.54    %
equity
Net interest margin        2.73    %      2.89   %     2.58    %     2.96    %
Efficiency ratio (1)       63.01   %      67.21  %     65.53   %     67.96   %
Book value per share    $  9.06         $ 8.18       $ 9.06        $ 8.18
                                                                   
                                                                   
                                                                   
                        December 31,    September    June 30,      December
                                        30,                        31,
                        2012            2012         2012          2011
Asset quality
ratios:
Nonperforming loans        1.56    %      1.63   %     1.55    %     1.24    %
to total loans (2)
Nonperforming assets       0.92    %      1.07   %     1.04    %     0.97    %
to total assets (2)
Allowance for loan
and lease losses to        1.74    %      1.78   %     1.73    %     1.69    %
total loans
Net
charge-offs/average        1.04    %      0.64   %     0.45    %     0.96    %
loans
                                                                   
Nonaccrual loans        $  25,190       $ 26,454     $ 24,815      $ 17,587
Other real estate         4,241        3,065      4,919       7,405   
owned
Total nonperforming     $  29,431      $ 29,519    $ 29,734     $ 24,992  
assets
                                                                   
Loans 90 days past
due still accruing      $  4,435       $ 3,861     $ 3,105      $ 4,101   
interest


(1) Non-GAAP measure
                                                                   
Reconciliation of
the efficiency
ratio:
Non-interest expense    $  23,461       $ 19,224     $ 88,185      $ 72,204
                                                                   
Net interest income        22,086         20,356       85,444        76,406
Non-interest income        15,625         8,382        49,597        30,525
Less: Gain on sale         (554    )      (136   )     (661    )     (759    )
of securities
Less: Other than          76           -          202         75      
temporary impairment
                           37,233         28,602       134,582       106,247
                                                                   
                           63.01   %      67.21  %     65.53   %     67.96   %
                                                                   
(2) 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.


Contact:

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