The Bancorp, Inc. Reports Third Quarter 2012 Financial Results
The Bancorp, Inc. Reports Third Quarter 2012 Financial Results
WILMINGTON, Del.--(BUSINESS WIRE)-- The Bancorp, Inc. ("Bancorp") (NAS: TBBK) , a financial holding company, today reported financial results for the third quarter of 2012.
Net income for the third quarter of 2012 increased to $3.6 million compared to $2.3 million in the third quarter of 2011, an increase of 56%.
Financial Highlights
21% increase in total revenues to $35.6 million compared to $29.4 million in third quarter 2011.
57% increase in diluted earnings per share to $0.11 for the third quarter of 2012 versus $0.07 for the third quarter of 2011. Diluted earnings per share amounted to $0.34 for the nine months ended September 30, 2012 compared to diluted earnings per share of $0.18 for the nine months ended September 30, 2011.
85% increase in quarterly prepaid card fees to $7.5 million compared to $4.0 million in third quarter 2011.
67% increase in quarterly non-interest income (including prepaid card fees) to $11.1 million compared to $6.7 million in third quarter 2011 excluding security gains and other than temporary impairment (OTTI).
10% increase in quarterly net interest income to $21.6 million compared to $19.6 million in third quarter 2011. On a linked quarter basis, net interest income grew at an annualized 13% rate, primarily reflecting higher loan income.
The linked quarter net interest margin increased to 2.90% from 2.59%.
At September 30, 2012 the portfolio of loans and securities had grown to $2.5 billion, an increase of $372 million, or 17% over third quarter 2011. Outstanding loans increased 9% over that period.
Average deposits for third quarter 2012 totaled $2.8 billion, an increase of $295 million or 12% over 2011, reflecting growth in all major deposit categories. The interest paid on deposits between those respective periods decreased to 0.37% from 0.45%.
Betsy Z. Cohen, Bancorp's Chief Executive Officer, said, "Third quarter 2012 saw a continuation in our earnings growth as a result of significant increases in both our non-interest and net interest income. Adjusted operating earnings, a non-GAAP measure, increased to $11.3 million, a $2.8 million, or 32% increase over the comparable 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 9% 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 35% over the past year, to $276 million. Due to the historically demonstrated strength of related collateral, losses on security backed loans have been virtually non-existent. The Company is well capitalized, and book value per share increased from $8.09 at September 30, 2011 to $8.73 at September 30, 2012, or an increase of 8%."
Financial Results
Bancorp reported net income available to common shareholders for the three months ended September 30, 2012 of $3.6 million or diluted earnings per share of $0.11, based on 33,172,852 weighted average shares outstanding, compared to net income available to common shareholders of $2.3 million or diluted earnings per share of $0.07, based on 33,203,662 weighted average shares outstanding, for the three months ended September 30, 2011. Adjusted operating earnings, a non-GAAP measure, increased to $11.3 million for the three months ended September 30, 2012 compared to $8.6 million for the three months ended September 30, 2011. The following is a reconciliation of adjusted operating earnings to net income available to common shareholders (for the three month period):
Quarter ended | Nine months ended | |||||||||||||||||||
September 30, | September 30, | September 30, | September 30, | |||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||||
Net income available to common shareholders | $ | 3,561 | $ | 2,282 | $ | 11,387 | $ | 5,630 | ||||||||||||
Income tax expense | 1,795 | 1,209 | 6,172 | 2,929 | ||||||||||||||||
Gains on sales of investment securities | (107 | ) | (20 | ) | (107 | ) | (623 | ) | ||||||||||||
Other than temporary impairment in securities | - | - | 126 | 75 | ||||||||||||||||
Losses and writedowns on other real estate owned | 533 | 64 | 2,405 | 555 | ||||||||||||||||
Provision for loan and lease losses | 5,540 | 5,019 | 15,047 | 16,654 | ||||||||||||||||
Adjusted operating earnings (1) | $ | 11,322 | $ | 8,554 | $ | 35,030 | $ | 25,220 | ||||||||||||
(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 September 30, 2012, Bancorp's total assets amounted to $3.1 billion, a decrease of $280 million or 8% over total assets at September 30, 2011. During the year ended September 30, 2012, Bancorp terminated two large balance deposit relationships which totaled $1.1 billion at September 30, 2011. The relationships were terminated to eliminate certain seasonal deposit fluctuations and reduce interest expense. During that period, investments increased to $658 million, an increase of $223 million or 51%; loans increased to $1.9 billion, an increase of $149 million or 9%; and deposits decreased to $2.8 billion, a decrease of $292 million or 10%.
Conference Call Webcast
You may access the LIVE webcast of Bancorp's Quarterly Earnings Conference Call at 8:30 AM EDT Wednesday, October 24, 2012 by clicking on the webcast link on Bancorp's homepage at www.thebancorp.com. Or, you may dial 866.700.7101, access code 85269151. You may listen to the replay of the webcast following the live call on Bancorp's investor relations website or telephonically until Wednesday, October 31, 2012 by dialing 888.286.8010, access code 85079916.
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 | Nine months ended | |||||||||||||||||
September 30, | September 30, | |||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||
(dollars in thousands except per share data) | ||||||||||||||||||
Condensed income statement | ||||||||||||||||||
Net interest income | $ | 21,561 | $ | 19,595 | $ | 63,358 | $ | 56,050 | ||||||||||
Provision for loan and lease losses | 5,540 | 5,019 | 15,047 | 16,654 | ||||||||||||||
Non-interest income | ||||||||||||||||||
Gain on sales of investment securities | 107 | 20 | 107 | 623 | ||||||||||||||
Other than temporary impairment of investment securities | - | - | (126 | ) | (75 | ) | ||||||||||||
Other non-interest income | 11,126 | 6,653 | 33,991 | 21,595 | ||||||||||||||
Total non-interest income | 11,233 | 6,673 | 33,972 | 22,143 | ||||||||||||||
Non-interest expense | ||||||||||||||||||
Losses and write downs on other real estate owned | 533 | 64 | 2,405 | 555 | ||||||||||||||
Other non-interest expense | 21,365 | 17,694 | 62,319 | 52,425 | ||||||||||||||
Total non-interest expense | 21,898 | 17,758 | 64,724 | 52,980 | ||||||||||||||
Net income before income tax expense | 5,356 | 3,491 | 17,559 | 8,559 | ||||||||||||||
Income tax expense | 1,795 | 1,209 | 6,172 | 2,929 | ||||||||||||||
Net income available to common shareholders | $ | 3,561 | $ | 2,282 | $ | 11,387 | $ | 5,630 | ||||||||||
Basic earnings per share | $ | 0.11 | $ | 0.07 | $ | 0.34 | $ | 0.18 | ||||||||||
Diluted earnings per share | $ | 0.11 | $ | 0.07 | $ | 0.34 | $ | 0.18 | ||||||||||
Weighted average shares - basic | 33,105,194 | 33,196,281 | 33,101,281 | 31,500,347 | ||||||||||||||
Weighted average shares - diluted | 33,172,852 | 33,203,662 | 33,133,307 | 31,506,808 | ||||||||||||||
Balance sheet | September 30, | June 30, | December 31, | September 30, | ||||||||||||||||
2012 | 2012 | 2011 | 2011 | |||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||
Cash and due from banks | $ | 4,648 | $ | 5,560 | $ | 96,228 | $ | 259,116 | ||||||||||||
Interest earning deposits at Federal Reserve Bank | 540,010 | 692,582 | 652,946 | 932,152 | ||||||||||||||||
Total cash and cash equivalents | 544,658 | 698,142 | 749,174 | 1,191,268 | ||||||||||||||||
Investment securities, available-for-sale, at fair value | 634,894 | 582,219 | 448,204 | 416,362 | ||||||||||||||||
Investment securities, held-to-maturity | 22,707 | 17,796 | 18,044 | 18,095 | ||||||||||||||||
Federal Home Loan Bank & Atlantic Central Bankers Bank stock | 4,160 | 4,596 | 5,088 | 5,354 | ||||||||||||||||
Loans held for sale, at fair value | 7,970 | - | - | - | ||||||||||||||||
Loans, net of deferred costs | 1,856,992 | 1,804,312 | 1,744,828 | 1,715,648 | ||||||||||||||||
Allowance for loan and lease losses | (33,071 | ) | (31,171 | ) | (29,568 | ) | (27,671 | ) | ||||||||||||
Loans, net | 1,823,921 | 1,773,141 | 1,715,260 | 1,687,977 | ||||||||||||||||
Premises and equipment, net | 9,802 | 8,694 | 8,358 | 8,307 | ||||||||||||||||
Accrued interest receivable | 10,061 | 9,297 | 8,476 | 8,541 | ||||||||||||||||
Intangible assets, net | 7,254 | 7,504 | 8,004 | 8,254 | ||||||||||||||||
Other real estate owned | 3,065 | 4,919 | 7,405 | 6,415 | ||||||||||||||||
Deferred tax asset, net | 19,708 | 20,716 | 21,941 | 19,902 | ||||||||||||||||
Other assets | 24,925 | 23,178 | 20,727 | 22,538 | ||||||||||||||||
Total assets | $ | 3,113,125 | $ | 3,150,202 | $ | 3,010,681 | $ | 3,393,013 | ||||||||||||
Liabilities: | ||||||||||||||||||||
Deposits | ||||||||||||||||||||
Demand and interest checking | $ | 2,300,025 | $ | 2,335,960 | $ | 2,192,938 | $ | 2,649,005 | ||||||||||||
Savings and money market | 459,725 | 456,614 | 454,343 | 388,603 | ||||||||||||||||
Time deposits | 12,606 | 20,619 | 25,528 | 25,552 | ||||||||||||||||
Time deposits, $100,000 and over | 8,819 | 9,104 | 9,742 | 10,341 | ||||||||||||||||
Total deposits | ||||||||||||||||||||
