The Bancorp, Inc. Reports Second Quarter 2013 Financial Results

The Bancorp, Inc. Reports Second Quarter 2013 Financial Results

WILMINGTON, Del.--(BUSINESS WIRE)-- The Bancorp, Inc. ("Bancorp") (NAS: TBBK) , a financial holding company, today reported financial results for the second quarter of 2013.

Net income for the second quarter of 2013 increased to $5.6 million compared to $3.9 million in the second quarter of 2012, an increase of 45%.

Financial Highlights

  • 72% increase in adjusted operating earnings, a non GAAP measure, to $18.7 million for the second quarter of 2013 versus $10.8 million for the quarter ended June 30, 2012.
  • 25% increase in diluted earnings per share to $0.15 for the second quarter of 2013 versus $0.12 for the second quarter of 2012. The number of shares used in calculating diluted earnings per share increased to 38.0 million from 33.1 million in 2012.
  • 41% increase in total quarterly revenues to $48.5 million compared to $34.4 million in second quarter 2012.
  • 107% increase in quarterly non-interest income, to $21.9 million compared to $10.6 million in second quarter 2012, excluding security gains and other than temporary impairment charges.
  • 63% increase in prepaid card fees, to $11.5 million compared to $7.1 million in second quarter 2012.
  • 13% increase in quarterly net interest income to $23.6 million compared to $20.9 million in second quarter 2012.

Betsy Z. Cohen, Bancorp's Chief Executive Officer, said, "Our earnings growth in the second quarter was propelled by increases both in net interest and non-interest income. These drivers resulted in growth of 72% in adjusted operating earnings, 45% in net income and 25% in earnings per diluted share. Our efficiency ratio of 61% was improved from 67% a year ago. Our leadership position in the prepaid card industry is a primary vector of growth and related fee income which increased 63% to $11.5 million for the quarter, compared to the prior year quarter. Average deposits for the second quarter, net of terminations, grew 35% and reflected growth in all major deposit categories. At June 30, 2013 our portfolio of loans and securities had grown to $3.1 billion, an increase of $730 million, or 30% over June 30, 2012. Outstanding loans increased 12% over that period. 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 12%, SBA loans grew 111%, security backed lines of credit by 22% and small fleet leasing by 23%. Despite the growth, the Company remains well capitalized, with book value per share increasing 8%, from $8.54 at June 30, 2012 to $9.21 at June 30, 2013."

Financial Results

Bancorp reported net income available to common shareholders for the three months ended June 30, 2013 of $5.6 million, or diluted earnings per share of $0.15, based on 37,974,814 weighted average diluted shares outstanding, compared to net income available to common shareholders of $3.9 million, or diluted earnings per share of $0.12, based on 33,147,791 weighted average diluted shares outstanding, for the three months ended June 30, 2012. Adjusted operating earnings, a non-GAAP measure, increased to $18.7 million for the three months ended June 30, 2013 compared to $10.8 million for the three months ended June 30, 2012. The following is a reconciliation of net income available to common shareholders to adjusted operating earnings, a non-GAAP measure:

Quarter endedFor the six months ended
June 30,  June 30,June 30,  June 30,





Net income available to common shareholders$5,592$3,854$12,998$7,826
Income tax expense3,2622,1507,6934,377
Gains on sales of investment securities(476)-(743)-
Other than temporary impairment on securities-12620126
Losses and write-downs on other real estate owned8154211,0661,872
Provision for loan and lease losses 9,500  4,287 15,000  9,507
Adjusted operating earnings (1)$18,693 $10,838$36,034 $23,708
(1)As a supplement to GAAP, Bancorp has provided this non-GAAP performance measure. 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.

Conference Call Webcast

You may access the LIVE webcast of Bancorp's Quarterly Earnings Conference Call at 8:00 AM EDT Thursday, July 25, 2013 by clicking on the webcast link on Bancorp's homepage at Or, you may dial 866.788.0542, access code 92497956. You may listen to the replay of the webcast following the live call on Bancorp's investor relations website or telephonically until Thursday, August 1, 2013 by dialing 888.286.8010, access code 66571819.

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. 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
  Three months ended  Six months ended
June 30,June 30,
2013  20122013  2012
(dollars in thousands except per share data)
Condensed income statement
Net interest income$23,579$20,881 $46,263 $41,797 
Provision for loan and lease losses 9,500 4,287  15,000  9,507 
Non-interest income
Gain on sales of investment securities476-743-
Other than temporary impairment of investment securities-(126)(20)(126)
Other non-interest income 21,886 10,575  40,771  22,865 
Total non-interest income22,36210,44941,49422,739
Non-interest expense
Losses and write downs on other real estate owned8154211,0661,872
Other non-interest expense 26,772 20,618  51,000  40,954 
Total non-interest expense 27,587 21,039  52,066  42,826 
Income before income tax expense8,8546,00420,69112,203
Income tax expense 3,262 2,150  7,693  4,377 
Net income available to common shareholders$5,592$3,854 $12,998 $7,826 
Basic earnings per share$0.15$0.12 $0.35 $0.24 
Diluted earnings per share$0.15$0.12 $0.34 $0.24 
Weighted average shares - basic37,343,39633,101,28137,317,75033,099,303
Weighted average shares - diluted37,974,81433,147,79137,877,71233,114,968
Balance sheetJune 30,March 31,December 31,June 30,
(dollars in thousands)
Cash and cash equivalents
Cash and due from banks$21,560$14,108$19,982$5,560
Interest earning deposits at Federal Reserve Bank622,9891,102,217948,111692,582
Securities sold under agreements to repurchase 40,240  22,831  -  - 
Total cash and cash equivalents 684,789  1,139,156  968,093  698,142 
Investment securities, available-for-sale, at fair value1,021,848898,653718,065582,219
Investment securities, held-to-maturity95,66245,06445,17917,796
Federal Home Loan Bank & Atlantic Central Bankers Bank stock3,2093,0943,6214,596
Loans held for sale, at fair value49,35528,40211,341-
Loans, net of deferred fees and costs1,967,3821,968,8901,902,8541,804,312
Allowance for loan and lease losses (40,274) (34,883) (33,040) (31,171)
Loans, net 1,927,108  1,934,007  1,869,814  1,773,141 
Premises and equipment, net13,70910,96510,3688,694
Accrued interest receivable12,36011,5219,8579,297
Intangible assets, net6,5036,7537,0047,504
Other real estate owned6,3084,5434,2414,919
Deferred tax asset, net27,61323,05522,78920,716
Other assets 28,031  26,882  29,287  23,178 
Total assets$3,876,495 $4,132,095 $3,699,659 $3,150,202 
Demand and interest checking$2,963,170$3,197,039$2,775,207$2,335,960
Savings and money market469,238495,001517,098456,614
Time deposits12,50212,60212,58220,619
Time deposits, $100,000 and over 5,747  8,343  8,334  9,104 
Total deposits 3,450,657  3,712,985  3,313,221  2,822,297 
Securities sold under agreements to repurchase19,05916,67218,54821,948
Accrued interest payable95<
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