TBBK Bancorp Inc

The Bancorp, Inc. ("The Bancorp") (NASDAQ: TBBK), a financial holding company, today reported financial results for first quarter 2017.

Highlights

• Net income of $8.0 million and diluted earnings per share of $0.14.
• Net interest income increased 21% to $24.9 million for the quarter ended March 31, 2017, compared to $20.6 million for the quarter ended March 31, 2016.
• Non-interest income increased 30% to $24.2 million for the quarter ended March 31, 2017, compared to $18.7 million for the quarter ended March 31, 2016.
• Net interest margin increased to 2.70% for the quarter ended March 31, 2017, compared to 2.56% for the quarter ended March 31, 2016.
• Loans and loans held for sale from continuing operations increased 22% to $1.75 billion at March 31, 2017, compared to $1.43 billion at March 31, 2016.
• Direct lease financing increased 51% to $363.2 million at March 31, 2017, from $240.7 million at March 31, 2016, reflecting the impact of organic growth and the purchase of lease receivables.
• Small Business Administration (“SBA”) loans increased 11% to $369.8 million at March 31, 2017, from $334.4 million at March 31, 2016.
• The rate on our average deposits and interest bearing liabilities of $4.10 billion in Q1 2017 was 0.35% with a rate of 0.27% for $2.18 billion of average prepaid card deposits.
• Assets held for sale from discontinued operations decreased 36% to $341.3 million at March 31, 2017, from $536.5 million at March 31, 2016.
• Non-interest expense was reduced by $3.0 million, to $37.8 million for the quarter ended March 31, 2017, compared to $40.8 million for the quarter ended March 31, 2016, excluding BSA lookback expense for 2016.
• Book value per common share at March 31, 2017, of $5.57 per share. The Bancorp and its subsidiary, The Bancorp Bank, remain well capitalized.

The Bancorp reported net income of $8.0 million, or $0.14 earnings per diluted share, for the quarter ended March 31, 2017, compared to a net loss of $10.9 million, or $0.29 loss per diluted share for the quarter ended March 31, 2016. Net income from continuing operations for the quarter ended March 31, 2017, was $6.3 million, or $0.11 earnings per diluted share, compared to a net loss of $10.6 million from continuing operations, or $0.28 loss per diluted share, for the quarter ended March 31, 2016. Income from continuing operations does not include any income which may result from the reinvestment of the proceeds from sales or repayment of the remaining assets in The Bancorp’s discontinued operations. Tier one capital to assets, tier one capital to risk-weighted assets, total capital to risk-weighted assets and common equity-tier 1 ratios were 6.96%, 14.74%, 15.09%, and 14.74% respectively, compared to well capitalized minimums of 5%, 8%, 10% and 6.5%, respectively.

Damian Kozlowski, The Bancorp’s Chief Executive Officer, said, “While 2016 was a very difficult year for The Bancorp, first quarter 2017 financial results reflect the planned return to profitability. While we did incur financial losses in 2016, it did set the stage to make progress on many key issues that faced The Bancorp. I believe that the actions taken in 2016 have resulted in a much stronger platform and the first quarter was the start of what we believe will be a year of improving performance. In the first quarter, The Bancorp earned $8.0 million in net income or $0.14 cents a share off of $49 million of total revenue, less interest expense. Our earnings showed substantial improvement and revenue momentum continues, while expense cuts and restructuring had a noticeable impact on profitability. I believe this first quarter is a turning point. We have a long way to go to fully implement our integrated business plan but we are on track to deliver better results for all the constituencies that comprise The Bancorp community.”

Conference Call Webcast

You may access the LIVE webcast of The Bancorp's Quarterly Earnings Conference Call at 8:00 AM ET Friday, April 28, 2017 by clicking on the webcast link on Bancorp's homepage at www.thebancorp.com. Or, you may dial 844.775.2543, access code 6292817. You may listen to the replay of the webcast following the live call on The Bancorp's investor relations website or telephonically until Friday, May 5, 2017 by dialing 855.859.2056, access code 6292817.

About The Bancorp

The Bancorp, Inc. (NASDAQ: TBBK) is dedicated to serving the unique needs of non-bank financial service companies, ranging from entrepreneurial start-ups to those on the Fortune 500. The company’s chief financial institution, The Bancorp Bank (Member FDIC, Equal Housing Lender), has been repeatedly recognized in the payments industry as the Top Issuer of Prepaid Cards (US), a top merchant sponsor bank and a top ACH originator. Specialized lending distinctions include National Preferred SBA Lender, a leading provider of securities-backed lines of credit, and one of the few bank-owned commercial leasing groups in the nation. For more information please visit www.thebancorp.com.

Forward-Looking Statements

Statements in this earnings release regarding Bancorp’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 Bancorp’s filings with the SEC, including the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of those 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 press release. The Bancorp does not undertake to publicly revise or update forward-looking statements in this press release 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, Condensed income statement 2017   2016 2016 (dollars in thousands except per share data)   Net interest income $ 24,877   $ 20,556   $ 89,966   Provision for loan and lease losses   1,000     -     3,360   Non-interest income Service fees on deposit accounts 1,675 847 5,124 Card payment and ACH processing fees 1,528 1,267 5,526 Prepaid card fees 13,547 13,574 51,326 Gain (loss) on sale of loans 5,383 (1,433 ) 2,901 Gain on sale of investment securities 503 2,026 3,171 Change in value of investment in unconsolidated entity (19 ) 812 (37,533 ) Leasing income 551 404 2,007 Affinity fees 1,021 1,094 4,563 Other non-interest income   30     97     5,401   Total non-interest income 24,219 18,688 42,486 Non-interest expense Bank Secrecy Act and lookback consulting expenses - 14,315 29,081 Other non-interest expense   37,783     40,823     169,492   Total non-interest expense   37,783     55,138     198,573   Income (loss) from continuing operations before income tax expense 10,313 (15,894 ) (69,481 ) Income tax expense (benefit)   4,011     (5,272 )   (12,664 ) Net income (loss) from continuing operations 6,302 (10,622 ) (56,817 ) Net income (loss) from discontinued operations, net of tax   1,661     (290 )   (39,675 ) Net income (loss) available to common shareholders $ 7,963   $ (10,912 ) $ (96,492 )   Net income (loss) per share from continuing operations - basic $ 0.11   $ (0.28 ) $ (1.28 ) Net income (loss) per share from discontinued operations - basic $ 0.03   $ (0.01 ) $ (0.89 ) Net income (loss) per share - basic $ 0.14   $ (0.29 ) $ (2.17 )   Net income (loss) per share from continuing operations - diluted $ 0.11   $ (0.28 ) $ (1.28 ) Net income (loss) per share from discontinued operations - diluted $ 0.03   $ (0.01 ) $ (0.89 ) Net income (loss) per share - diluted $ 0.14   $ (0.29 ) $ (2.17 ) Weighted average shares - basic 55,534,279 37,804,741 44,567,357 Weighted average shares - diluted 55,752,496 37,860,665 44,776,138

 

  Balance sheet   March 31,   December 31,   September 30,   March 31, 2017 2016 2016 2016 (dollars in thousands) Assets: Cash and cash equivalents Cash and due from banks $ 4,671 $ 4,127 $ 4,061 $ 8,542 Interest earning deposits at Federal Reserve Bank 669,042 955,733 312,605 757,773 Securities sold under agreements to resell   65,248     39,199     39,463     10,208   Total cash and cash equivalents   738,961     999,059     356,129     776,523     Investment securities, available-for-sale, at fair value 1,215,892 1,248,614 1,334,927 1,252,754 Investment securities, held-to-maturity 93,443 93,467 93,495 93,550 Loans held for sale, at fair value 480,913 663,140 562,957 313,595 Loans, net of deferred fees and costs 1,264,127 1,222,911 1,198,237 1,114,053 Allowance for loan and lease losses   (7,294 )   (6,332 )   (6,058 )   (4,378 ) Loans, net   1,256,833     1,216,579     1,192,179     1,109,675   Federal Home Loan Bank & Atlantic Community Bancshares stock 2,589 1,613 11,014 1,063 Premises and equipment, net 22,993 24,125 21,797 21,692 Accrued interest receivable 10,296 10,589 10,496 9,172 Intangible assets, net 5,844 6,906 5,682 4,672 Other real estate owned 104 104 - - Deferred tax asset, net 54,155 55,666 29,765 32,462 Investment in unconsolidated entity 125,982 126,930 157,396 177,211 Assets held for sale from discontinued operations 341,286 360,711 386,155 536,548 Other assets   55,351     50,611     55,519     50,802   Total assets $ 4,404,642   $ 4,858,114   $ 4,217,511   $ 4,379,719     Liabilities: Deposits Demand and interest checking $ 3,607,076 $ 3,816,524 $ 3,364,103 $ 3,610,003 Savings and money market   428,723     421,780     402,832     388,953   Total deposits   4,035,799     4,238,304     3,766,935     3,998,956     Securities sold under agreements to repurchase 273 274 353 671 Short-term borrowings - - 70,000 - Subordinated debenture 13,401 13,401 13,401 13,401 Long-term borrowings - 263,099 - - Other liabilities   45,400     44,073     27,744     51,102   Total liabilities $ 4,094,873   $ 4,559,151   $ 3,878,433   $ 4,064,130     Shareholders' equity: Common stock - authorized, 75,000,000 shares of $1.00 par value; 55,757,559 and 37,945,153 shares issued at March 31, 2017 and 2016, respectively 55,758 55,419 55,419 37,945 Treasury stock (100,000 shares) (866 ) (866 ) (866 ) (866 ) Additional paid-in capital 360,801 360,564 359,793 301,018 Accumulated deficit (103,978 ) (111,941 ) (83,169 ) (26,361 ) Accumulated other comprehensive income (loss)   (1,946 )   (4,213 )   7,901     3,853   Total shareholders' equity   309,769     298,963     339,078     315,589     Total liabilities and shareholders' equity $ 4,404,642   $ 4,858,114   $ 4,217,511   $ 4,379,719         Average balance sheet and net interest income Three months ended March 31, 2017 Three months ended March 31, 2016 (dollars in thousands) Average     Average Average     Average Assets: Balance Interest Rate Balance Interest Rate Interest-earning assets: Loans net of unearned fees and costs ** $ 1,634,136 $ 17,371 4.25 % $ 1,476,112 $ 15,556 4.22 % Leases - bank qualified* 21,180 396 7.48 % 27,798 482 6.94 % Investment securities-taxable 1,325,247 9,005 2.72 % 1,149,101 6,532 2.27 % Investment securities-nontaxable* 15,423 111 2.88 % 75,846 493 2.60 % Interest earning deposits at Federal Reserve Bank 771,529 1,516 0.79 % 799,398 902 0.45 % Federal funds sold and securities purchased under agreement to resell 49,829   227 1.82 % 7,422   27 1.46 % Net interest earning assets 3,817,344 28,626 3.00 % 3,535,677 23,992 2.71 %   Allowance for loan and lease losses (6,221 ) (4,399 ) Assets held for sale from discontinued operations 335,929 3,361 4.00 % 588,685 5,819 3.95 % Other assets 276,597   299,551   $ 4,423,649   $ 4,419,514     Liabilities and Shareholders' Equity: Deposits: Demand and interest checking $ 3,653,505 $ 2,787 0.31 % $ 3,471,909 $ 2,441 0.28 % Savings and money market 429,713 647 0.60 % 387,651 225 0.23 % Time -   - 0.00 % 206,393   305 0.59 % Total deposits 4,083,218 3,434 0.34 % 4,065,953 2,971 0.29 %   Repurchase agreements 275 - 0.00 % 856 - 0.00 % Subordinated debt 13,401   138 4.12 % 13,401   124 3.70 % Total deposits and interest bearing liabilities 4,096,894 3,572 0.35 % 4,080,210 3,095 0.30 %   Other liabilities 20,234   21,329   Total liabilities 4,117,128 4,101,539   Shareholders' equity 306,521   317,975   $ 4,423,649   $ 4,419,514   Net interest income on tax equivalent basis* $ 28,415 $ 26,716   Tax equivalent adjustment 177 341   Net interest income $ 28,238 $ 26,375 Net interest margin * 2.70 % 2.56 %             * Full taxable equivalent basis, using a 35% statutory tax rate. ** Includes loans held for sale.         Allowance for loan and lease losses: Three months ended Year ended March 31,   March 31, December 31, 2017 2016 2016 (dollars in thousands)   Balance in the allowance for loan and lease losses at beginning of period (1) $ 6,332   $ 4,400   $ 4,400     Loans charged-off: SBA non real estate - - 128 Direct lease financing 35 20 119 Other consumer loans   12     12     1,211   Total   47     32     1,458     Recoveries: SBA non real estate - - 1 Direct lease financing - 6 17 Other consumer loans   9     4     12   Total   9     10     30   Net charge-offs 38 22 1,428 Provision charged to operations   1,000     -     3,360     Balance in allowance for loan and lease losses at end of period $ 7,294   $ 4,378   $ 6,332   Net charge-offs/average loans 0.00 % 0.00 % 0.09 % Net charge-offs/average loans (annualized) 0.01 % 0.01 % 0.09 % Net charge-offs/average assets 0.00 % 0.00 % 0.03 % (1) Excludes activity from assets held for sale   Loan portfolio: March 31, December 31, September 30, March 31, 2017 2016 2016 2016 (dollars in thousands)   SBA non real estate $ 75,800 $ 74,644 $ 74,262 $ 71,220 SBA commercial mortgage 114,703 126,159 117,053 120,415 SBA construction   12,985     8,826     6,317     9,736 Total SBA loans 203,488 209,629 197,632 201,371 Direct lease financing 363,172 346,645 332,632 240,670 SBLOC 660,423 630,400 621,456 592,656 Other specialty lending 12,443 11,073 20,076 48,153 Other consumer loans   16,318     17,374     19,375     21,782 1,255,844 1,215,121 1,191,171 1,104,632 Unamortized loan fees and costs   8,283     7,790     7,066     9,421 Total loans, net of deferred loan fees and costs $ 1,264,127   $ 1,222,911   $ 1,198,237   $ 1,114,053   Small business lending portfolio: March 31, December 31, September 30, March 31, 2017 2016 2016 2016 (dollars in thousands)   SBA loans, including deferred fees and costs 209,980 215,786 203,196 209,605 SBA loans included in HFS   159,831     154,016     146,450     124,763 Total SBA loans $ 369,811   $ 369,802   $ 349,646   $ 334,368           Capital ratios: Tier 1 capital Tier 1 capital Total capital Common equity to average to risk-weighted to risk-weighted tier 1 to risk assets ratio assets ratio assets ratio weighted assets As of March 31, 2017 The Bancorp, Inc. 6.96 % 14.74 % 15.09 % 14.74 % The Bancorp Bank 6.74 % 14.28 % 14.63 % 14.28 % "Well capitalized" institution (under FDIC regulations) 5.00 % 8.00 % 10.00 % 6.50 %   As of December 31, 2016 The Bancorp, Inc. 6.90 % 13.34 % 13.63 % 13.34 % The Bancorp Bank 6.84 % 13.24 % 13.53 % 13.24 % "Well capitalized" institution (under FDIC regulations) 5.00 % 8.00 % 10.00 % 6.50 %         Three months ended Year ended March 31, December 31, 2017   2016 2016 Selected operating ratios: Return on average assets (annualized) 0.73 % nm nm Return on average equity (annualized) 10.54 % nm nm Net interest margin 2.70 % 2.56 % 2.74 % Book value per share $ 5.57 $ 8.34 $ 5.40   March 31, December 31, September 30, March 31, 2017 2016 2016 2016 Asset quality ratios: Nonperforming loans to total loans (1) 0.55 % 0.30 % 0.58 % 0.24 % Nonperforming assets to total assets (1) 0.16 % 0.08 % 0.16 % 0.06 % Allowance for loan and lease losses to total loans 0.58 % 0.52 % 0.51 % 0.39 %   Nonaccrual loans $ 5,369 $ 2,972 $ 4,021 $ 1,908 Other real estate owned   104     104     -     -   Total nonperforming assets $ 5,473   $ 3,076   $ 4,021   $ 1,908     Loans 90 days past due still accruing interest $ 1,534   $ 661   $ 2,933   $ 787     (1) Nonperforming loan and asset ratios include nonaccrual loans and loans 90 days past due still accruing interest.   Three months ended March 31, December 31, September 30, March 31, 2017 2016 2016 2016 (in thousands) Gross dollar volume (GDV) (1): Prepaid card GDV $ 13,342,180   $ 10,647,520   $ 10,459,097   $ 13,512,318     (1) Gross dollar volume represents the total dollar amount spent on prepaid and debit cards issued by The Bancorp.   Analysis of Walnut Street marks:         Loan activity   Marks (dollars in millions)   Original Walnut Street loan balance 12/31/14 $ 267 Marks through 12/31/14 sale date   (58 ) $ (58 ) Sales price of Walnut Street 209 Equity investment from independent investor   (16 ) 12/31/14 Bancorp book value 193 Additional marks 2015 and 2016 (42 ) (42 ) Payments received   (25 ) 3/31/17 Bancorp book value* $ 126   Total marks $ (100 ) Divided by: Original Walnut Street loan balance $ 267 Percentage of total mark to original balance 37 %   * Approximately 21% of expected principal recoveries were classified as non performing as of 3/31/17   Walnut Street portfolio composition 3/31/17:   Collateral type   % of Portfolio Commercial real estate non-owner occupied Retail 26.7 % Office 20.9 % Other 19.4 % Construction and land 21.0 % Commercial non real estate and industrial 5.0 % First mortgage residential owner occupied 3.4 % First mortgage residential non-owner occupied 3.2 % Other     0.4 % Total 100.0 %     Cumulative analysis of marks on discontinued commercial loan principal as of 3/31/17       Discontinued Cumulative % to loan principal   marks  

original principal

(dollars in millions)   Commercial loan discontinued principal before marks $ 269 Florida mall held in discontinued OREO 42 24 Previous mark charges 20 20 Mark at 3/31/17       27 Total $ 331   $ 71 21 %    

Analysis of large loan relationship principal, non performing loans and distribution of marks as of 3/31/17

            Performing Non performing Total Performing Non performing Total loan principal   loan principal   loan principal   loan marks   loan marks   marks (in millions)   12 loan relationships > $8 million $ 160 $ 30 $ 190 $ 4 $ 12 $ 16 Loan relationships < $8 million  

32

    20    

52

  5     6     11 $

192

  $ 50   $

242

$ 9   $ 18   $ 27     Quarterly activity for commercial loan discontinued principal   Commercial loan principal (in millions)   Commercial loan discontinued principal 12/31/16 before marks $ 324 Transfer of Florida mall to other real estate owned (42 ) Net paydowns   (13 ) Commercial loan discontinued principal 3/31/17 before marks $ 269 Marks at 3/31/17   (27 ) Net commercial loan exposure 3/31/17 $ 242 Residential mortgages   66   Net loans $ 308 Florida mall in other real estate owned 18 Other 28 properties in other real estate owned   15   Total discontinued assets at 3/31/17 $ 341       Discontinued commercial loan composition as of 3/31/17       Unpaid principal Mark as % of Collateral type balance   Mark 3/31/17   portfolio (dollars in millions) Commercial real estate - non-owner occupied: Retail $ 14 $ 0.7 5 % Office 14 0.2 1 % Other 50 0.2 - Construction and land 82 3.3 4 % Commercial non-real estate and industrial 38 15.9 42 % 1 to 4 family construction 29 1.1 4 % First mortgage residential non-owner occupied: 20 5.1 25 % Commercial real estate owner occupied: Retail 10 0.1 1 % Office - - - Other 2 0.1 5 % First mortgage residential owner occupied 4 0.2 5 % Residential junior mortgage 3 0.1 3 % Other   3     - - Total $ 269 $ 27.0 10 %  

View source version on businesswire.com: http://www.businesswire.com/news/home/20170427006637/en/

The Bancorp Investor RelationsAndres Viroslav, Director, Investor Relations215-861-7990aviroslav@thebancorp.comorThe Bancorp Media RelationsRob Tacey, Director, Public Relations302-385-1418rtacey@thebancorp.com