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

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

WILMINGTON, Del.--(BUSINESS WIRE)-- The Bancorp, Inc. ("Bancorp") (NAS: 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 endedYear ended
December 31, December 31,December 31, December 31,

2012

2011

2012

2011

 
Net income available to common shareholders$5,237$3,288$16,624$8,918
Income tax expense1,6221,3827,7944,311
Gains on sales of investment securities(554)(136)(661)(759)
Other than temporary impairment in securities76-20275
Losses and writedowns on other real estate owned103-2,508555
Provision for loan and lease losses 7,391  4,844  22,438  21,498 
Adjusted operating earnings (1)$13,875 $9,378 $48,905 $34,598 
 

(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 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 endedYear ended
December 31,December 31,
2012 20112012 2011
(dollars in thousands except per share data)
Condensed income statement
Net interest income$22,086 $20,356$85,444 $76,406 
Provision for loan and lease losses 7,391  4,844 22,438  21,498 
Non-interest income
Gain on sales of investment securities554136661759
Other than temporary impairment of investment securities(76)-(202)(75)
Other non-interest income 15,147  8,246 49,138  29,841 
Total non-interest income15,6258,38249,59730,525
Non-interest expense
Losses and write downs on other real estate owned103-2,508555
Other non-interest expense 23,358  19,224 85,677  71,649 
Total non-interest expense 23,461  19,224 88,185  72,204 
Net income before income tax expense6,8594,67024,41813,229
Income tax expense 1,622  1,382 7,794  4,311 
Net income available to common shareholders$5,237 $3,288$16,624 $8,918 
 
Basic earnings per share$0.15 $0.10$0.50 $0.28 
 
Diluted earnings per share$0.15 $0.10$0.50 $0.28 
Weighted average shares - basic33,603,87933,196,28133,227,75531,927,815
Weighted average shares - diluted33,921,76333,202,76133,288,27831,933,592
 
    

Balance sheet

December 31,

September 30,

June 30,December 31,
2012201220122011
(dollars in thousands)
Assets:
Cash and cash equivalents
Cash and due from banks$19,982$4,648$5,560$96,228
Interest earning deposits at Federal Reserve Bank 948,111  540,010  692,582  652,946 
Total cash and cash equivalents 968,093  544,658  698,142  749,174 
 
Investment securities, available-for-sale, at fair value718,065634,894582,219448,204
Investment securities, held-to-maturity45,17922,70717,79618,044
Federal Home Loan Bank & Atlantic Central Bankers Bank stock3,6214,1604,5965,088
Loans held for sale, at fair value11,3417,970--
Loans, net of deferred costs1,902,8541,856,9921,804,3121,744,828
Allowance for loan and lease losses (33,040) (33,071) (31,171) (29,568)
Loans, net 1,869,814  1,823,921  1,773,141  1,715,260 
Premises and equipment, net10,3689,8028,6948,358
Accrued interest receivable9,85710,0619,2978,476
Intangible assets, net7,0047,2547,5048,004
Other real estate owned4,2413,0654,9197,405
Deferred tax asset, net22,78919,70820,71621,941
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 checking$2,775,207$2,300,025$2,335,960$2,192,938
Savings and money market517,098459,725456,614454,343
Time deposits12,58212,60620,61925,528
Time deposits, $100,000 and over 8,334  8,819  9,104  9,742 
Total deposits 3,313,221  2,781,175  2,822,297  2,682,551 
 
Securities sold under agreements to repurchase18,54818,80221,94833,177
Accrued interest payable103100127123
Subordinated debenture13,40113,40113,40113,401
Other liabilities 17,709  10,662  9,555  9,950 
Total liabilities$3,362,982 $ Read Full Story

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