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
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