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The Bancorp, Inc. Reports First Quarter 2013 Financial Results



  The Bancorp, Inc. Reports First Quarter 2013 Financial Results

Business Wire

WILMINGTON, Del. -- April 24, 2013

The Bancorp, Inc. ("Bancorp") (NASDAQ: TBBK), a financial holding company,
today reported financial results for the first quarter of 2013.

Net income for the first quarter of 2013 increased to $7.4 million compared to
$4.0 million in the first quarter of 2012, an increase of 86%.

Financial Highlights

  * 67% increase in diluted earnings per share to $0.20 for the first quarter
    of 2013 versus $0.12 for the first quarter of 2012. The number of shares
    for diluted earnings per share increased to 37.8 million from 33.1 million
    in 2012.
  * 23% increase in total quarterly revenues to $44.5 million compared to
    $36.2 million in first quarter 2012.
  * 54% increase in quarterly non-interest income, primarily in prepaid card
    fees, to $18.9 million compared to $12.3 million in first quarter 2012,
    excluding security gains.
  * 8% increase in quarterly net interest income to $22.7 million compared to
    $20.9 million in first quarter 2012.
  * At March 31, 2013 our portfolio of loans and securities had grown to $2.9
    billion, an increase of $692 million, or 31% over March 31, 2012.
    Outstanding loans increased 14% over that period.
  * Average deposits for the first quarter, net of terminations, grew 40% and
    reflected growth in all major deposit categories. After consideration of
    those terminations, our other deposits had grown 40% in the first quarter
    compared to the prior year first quarter. *

Betsy Z. Cohen, Bancorp’s Chief Executive Officer, said, “For the quarter
ending March 31, 2013, Bancorp experienced increased operating earnings of
$17.3 million, an increase of $4.5 million or 35% from the quarter ending
March 31, 2012. This growth was propelled by increases both in net interest
and non-interest income. These drivers resulted in growth of 86% in net
income, 67% in earnings per diluted share and an efficiency ratio of 59% (down
from 66% a year ago). Our leadership position in the prepaid card industry is
the primary vector of growth. However, asset growth within our targeted
lending segments – Small Business Administration (SBA), security backed lines
of credit and small fleet leasing – contributed disproportionately. Although
total loans increased by 14%, SBA grew 179%, security backed lines of credit
by 42% and small fleet leasing by 21%. Despite the growth, the Company remains
well capitalized, with book value per share increasing 10%, from $8.41 at
March 31, 2012 to $9.27 at March 31, 2013.”

* First quarter deposits include seasonal deposits from tax refunds.

Financial Results

Bancorp reported net income available to common shareholders for the three
months ended March 31, 2013 of $7.4 million, or diluted earnings per share of
$0.20, based on 37,772,122 weighted average diluted shares outstanding,
compared to net income available to common shareholders of $4.0 million, or
diluted earnings per share of $0.12, based on 33,107,037 weighted average
diluted shares outstanding, for the three months ended March 31, 2012.
Adjusted operating earnings, a non-GAAP measure, increased to $17.3 million
for the three months ended March 31, 2013 compared to $12.9 million for the
three months ended March 31, 2012. The following is a reconciliation of net
income available to common shareholders to adjusted operating earnings, a
non-GAAP measure:

                                                     
                                                      Three months ended
                                                      March 31,      March 31,
                                                      2013           2012
                                                      (in thousands)
Net income available to common shareholders           $ 7,406        $  3,972
Income tax expense                                      4,431           2,227
Gains on sales of investment securities                 (267   )        -
Losses and write-downs on other real estate owned       251             1,451
Provision for loan and lease losses                     5,500           5,220
Adjusted operating earnings (1)                       $ 17,321       $  12,870
                                                                         

           
            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
      (1)   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.
             

Conference Call Webcast

You may access the LIVE webcast of Bancorp's Quarterly Earnings Conference
Call at 8:30 AM EDT Thursday, April 25, 2013 by clicking on the webcast link
on Bancorp's homepage at www.thebancorp.com. Or, you may dial 866.277.1184,
access code 72650408. You may listen to the replay of the webcast following
the live call on Bancorp's investor relations website or telephonically until
Thursday, May 2, 2013 by dialing 888.286.8010, access code 51978128.

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,
                            2013               2012             2012
Condensed income            (dollars in thousands except per share data)
statement
                                                                              
Net interest income         $ 22,684           $ 20,916         $ 85,444      
Provision for loan and        5,500              5,220            22,438      
lease losses
Non-interest income
Gain on sales of              267                -                661
investment securities
Other than temporary
impairment of                 (20        )       -                (202       )
investment securities
Other non-interest            18,885             12,290           49,138      
income
Total non-interest            19,132             12,290           49,597
income
Non-interest expense
Losses and write downs
on other real estate          251                1,451            2,508
owned
Other non-interest            24,228             20,336           85,677      
expense
Total non-interest            24,479             21,787           88,185      
expense
Income before income          11,837             6,199            24,418
tax expense
Income tax expense            4,431              2,227            7,794       
Net income available to     $ 7,406            $ 3,972          $ 16,624      
common shareholders
                                                                              
Basic earnings per          $ 0.20             $ 0.12           $ 0.50        
share
                                                                              
Diluted earnings per        $ 0.20             $ 0.12           $ 0.50        
share
Weighted average shares       37,291,820         33,097,325       33,227,755
- basic
Weighted average shares       37,772,122         33,107,037       33,288,278
- diluted
                                                                              

                                                                             
                        March 31,         December 31,      September 30,     March 31,
                        2013              2012              2012              2012
                        (dollars in thousands)
Balance sheets
                                                                                           
Assets:
Cash and cash
equivalents
Cash and due from       $ 14,108          $ 19,982          $ 4,648           $ 142,123
banks
Interest earning
deposits at Federal       1,102,217         948,111           540,010           1,663,664
Reserve Bank
Securities
purchases under           22,831            -                 -                 -          
agreements to
resell
Total cash and cash       1,139,156         968,093           544,658           1,805,787  
equivalents
                                                                                           
Investment
securities,               898,011           718,065           634,894           481,553
available-for-sale,
at fair value
Investment
securities,               45,179            45,179            22,707            17,971
held-to-maturity
Federal Home Loan
Bank & Atlantic           3,621             3,621             4,160             4,836
Central Bankers
Bank stock
Loans held for            28,402            11,341            7,970             -
sale, at fair value
Loans, net of
deferred costs and        1,968,890         1,902,854         1,856,992         1,748,867
fees
Allowance for loan        (34,883   )       (33,040   )       (33,071   )       (31,500   )
and lease losses
Loans, net                1,934,007         1,869,814         1,823,921         1,717,367  
Premises and              10,965            10,368            9,802             8,514
equipment, net
Accrued interest          11,521            9,857             10,061            9,032
receivable
Intangible assets,        6,753             7,004             7,254             7,754
net
Other real estate         4,543             4,241             3,065             7,726
owned
Deferred tax asset,       23,055            22,789            19,708            20,804
net
Other assets              26,882            29,287            24,925            22,703     
Total assets            $ 4,132,095       $ 3,699,659       $ 3,113,125       $ 4,104,047  
                                                                                           
Liabilities:
Deposits
Demand and interest     $ 3,197,039       $ 2,775,207       $ 2,300,025       $ 3,275,611
checking
Savings and money         495,001           517,098           459,725           468,183
market
Time deposits             12,602            12,582            12,606            20,637
Time deposits,            8,343             8,334             8,819             9,447      
$100,000 and over
Total deposits            3,712,985         3,313,221         2,781,175         3,773,878  
                                                                                           
Securities sold
under agreements to       16,672            18,548            18,802            25,906
repurchase
Accrued interest          95                103               100               129
payable
Subordinated              13,401            13,401            13,401            13,401
debenture
Other liabilities         42,866            17,709            10,662            12,500     
Total liabilities       $ 3,786,019       $ 3,362,982       $ 2,824,140       $ 3,825,814  
                                                                                           
Shareholders'
equity:
Common stock -
authorized,
50,000,000 shares
of $1.00 par value;
37,333,594 and            37,434            37,247            33,209            33,201
33,101,281 shares
issued at March 31,
2013 and 2012,
respectively
Treasury stock            (866      )       (866      )       (866      )       (866      )
(100,000 shares)
Additional paid-in        285,009           282,708           243,954           242,661
capital
Retained earnings
(accumulated              14,753            7,347             2,110             (5,305    )
deficit)
Accumulated other
comprehensive             9,746             10,241            10,578            8,542      
income, net
Total shareholders'       346,076           336,677           288,985           278,233
equity
                                                                                           
Total liabilities
and shareholders'       $ 4,132,095       $ 3,699,659       $ 3,113,125       $ 4,104,047  
equity
                                                                                           

                                                                                                    
Average balance sheet
and net interest
income
(dollars in thousands)     Three months ended March 31, 2013          Three months ended March 31, 2012
                           Average                        Average     Average                        Average
Assets:                    Balance           Interest     Rate        Balance           Interest     Rate
Interest-earning
assets:
Loans net of unearned      $ 1,928,786       $ 20,191     4.19  %     $ 1,733,736       $ 18,823     4.34  %
discount **
Leases - bank                14,393            200        5.56  %       10,439            189        7.24  %
qualified*
Investment                   682,676           3,487      2.04  %       369,921           3,190      3.45  %
securities-taxable
Investment                   126,221           1,116      3.54  %       96,384            1,066      4.42  %
securities-nontaxable*
Interest earning
deposits at Federal          1,343,899         838        0.25  %       1,698,456         1,053      0.25  %
Reserve Bank
Federal funds
sold/securities              20,380            24         0.47  %       -                 -          0.00  %
purchased under
agreement to resell
Net interest earning         4,116,355         25,856     2.51  %       3,908,936         24,321     2.49  %
assets
                                                                                                            
Allowance for loan and       (34,839   )                                (30,638   )
lease losses
Other assets                 83,902                                     229,504    
                           $ 4,165,418                                $ 4,107,802  
                                                                                                            
Liabilities and
Shareholders' Equity:
Deposits:
Demand and interest        $ 3,257,692       $ 1,866      0.23  %     $ 3,292,648       $ 1,994      0.24  %
checking
Savings and money            506,174           578        0.46  %       457,855           631        0.55  %
market
Time                         20,919            54         1.03  %       31,355            97         1.24  %
Total deposits               3,784,785         2,498      0.26  %       3,781,858         2,722      0.29  %
                                                                                                            
Repurchase agreements        15,762            14         0.36  %       28,259            27         0.38  %
Subordinated debt            13,401            199        5.94  %       13,401            217        6.48  %
Total deposits and
interest bearing             3,813,948         2,711      0.28  %       3,823,518         2,966      0.31  %
liabilities
                                                                                                            
Other liabilities            11,344                                     10,598     
Total liabilities            3,825,292                                  3,834,116
                                                                                                            
Shareholders' equity         340,126                                    273,686    
                           $ 4,165,418                                $ 4,107,802  
Net interest income on                       $ 23,145                                   $ 21,355
tax equivalent basis*
                                                                                                            
Tax equivalent                                 461                                        439
adjustment
                                                                                                            
Net interest income                          $ 22,684                                   $ 20,916
Net interest margin *                                     2.25  %                                    2.19  %
 
* Full taxable equivalent basis, using a 35% statutory tax rate.
** Includes loans held for sale.
 

                                                                     
Allowance for loan and lease      Three months ended                  Year ended
losses:
                                  March 31,         March 31,         December 31,
                                  2013              2012              2012
                                  (dollars in thousands)
                                                                                   
Balance in the allowance for
loan and lease losses at          $ 33,040          $ 29,568          $ 29,568     
beginning of period
                                                                                   
Loans charged-off:
Commercial                          2,073             2,448             9,508
Construction                        1,608             702               11,318
Lease financing                     -                 86                87
Residential mortgage                -                 -                 -
Consumer                            54                172               340        
Total                               3,735             3,408             21,253     
                                                                                   
Recoveries:
Commercial                          35                36                2,093
Construction                        -                 1                 96
Lease financing                     -                 -                 13
Residential mortgage                -                 83                85
Consumer                            43                -                 -          
Total                               78                120               2,287      
Net charge-offs                     3,657             3,288             18,966
Provision charged to                5,500             5,220             22,438     
operations
                                                                                   
Balance in allowance for loan
and lease losses at end of        $ 34,883          $ 31,500          $ 33,040     
period
Net charge-offs/average loans       0.19      %       0.19      %       1.04      %
                                                                                   
                                                                                   
                                                                                   
Loan              March 31,       December 31,      September 30,     March 31,
portfolio:
                  2013            2012              2012              2012
                  (dollars in thousands)
                                                                                   
Commercial        $ 477,690       $ 470,109         $ 453,444         $ 445,912
Commercial          673,916         617,069           614,410           617,871
mortgage (1)
Construction        263,579         258,684           263,726           248,232    
Total
commercial          1,415,185       1,345,862         1,331,580         1,312,015
loans
Direct lease        157,508         156,697           146,728           130,321
financing
Residential         94,238          97,717            97,589            94,438
mortgage
Consumer
loans and           296,370         296,915           276,427           208,584    
others
                    1,963,301       1,897,191         1,852,324         1,745,358
Unamortized
loan costs          5,589           5,663             4,668             3,509      
and fees
Total loans,
net of
deferred loan     $ 1,968,890     $ 1,902,854       $ 1,856,992       $ 1,748,867  
costs and
fees
                                                                                   
Supplemental
loan data:
Construction      $ 65,669        $ 60,343          $ 71,599          $ 85,461
1-4 family
Commercial
construction,
acquisition         197,910         198,341           192,127           162,771    
and
development
                  $ 263,579       $ 258,684         $ 263,726         $ 248,232    
 
(1) At March 31, 2013 our owner-occupied loans amounted to $199 million, or 29.5%
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 March 31, 2013
The Company               8.26%          15.52%               16.78%
The Bancorp Bank          6.36%          11.98%               13.24%
"Well capitalized"
institution (under        5.00%          6.00%                10.00%
FDIC regulations)
                                                               
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        5.00%          6.00%                10.00%
FDIC regulations)
                                                               

                                                                  
                      Three months ended                           Year ended
                      March 31,                     December       December
                                                    31,            31,
                      2013           2012           2012           2012
Selected
operating
ratios:
Return on               0.72   %       0.39   %       0.62   %       0.48    %
average assets
Return on               8.83   %       5.84   %       7.04   %       5.86    %
average equity
Net interest            2.25   %       2.19   %       2.73   %       2.58    %
margin
Efficiency              58.89  %       65.61  %       63.01  %       65.53   %
ratio (1)
Book value per        $ 9.27         $ 8.41         $ 9.06         $ 9.06
share
                                                                              
                                                                              
                      March 31,      December       September      March 31,
                                     31,            30,
                      2013           2012           2012           2012
Asset quality
ratios:
Nonperforming
loans to total          1.80   %       1.56   %       1.63   %       1.42    %
loans (2)
Nonperforming
assets to total         0.97   %       0.92   %       1.07   %       0.79    %
assets (2)
Allowance for
loan and lease          1.77   %       1.74   %       1.78   %       1.80    %
losses to total
loans
                                                                              
Nonaccrual            $ 34,063       $ 25,190       $ 26,454       $ 20,929
loans
Other real              4,543          4,241          3,065          7,726    
estate owned
Total
nonperforming         $ 38,606       $ 29,431       $ 29,519       $ 28,655   
assets
                                                                              
Loans 90 days
past due still        $ 1,291        $ 4,435        $ 3,861        $ 3,914    
accruing
interest
                                                                              
 
(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 the efficiency ratio to measure overhead as a percentage of revenue.
Other companies may calculate the efficiency ratio 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.
 
                                                                              
                      Three months ended                           Year ended
                      March 31,                     December       December
                                                    31,            31,
                      2013           2012           2012           2012
Reconciliation
of the
efficiency
ratio, a
non-GAAP
measure:
Non-interest          $ 24,479       $ 21,787       $ 23,461       $ 88,185
expense (a)
Net interest          $ 22,684       $ 20,916       $ 22,086       $ 85,444
income
Non-interest            19,132         12,290         15,625         49,597
income
Less: Gain on
sale of                 (267   )       -              (554   )       (661    )
securities
Add: Other than
temporary               20             -              76             202      
impairment
Adjusted net
interest and          $ 41,569       $ 33,206       $ 37,233       $ 134,582
non-interest
income (b)
                                                                              
(a) divided by          58.89  %       65.61  %       63.01  %       65.53   %
(b)
                                                                              
(2) Nonperforming loan and asset ratios include nonaccrual loans and loans 90
days past due still accruing interest.
 

Contact:

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