Exhibit 99.1
 
 

The Bancorp, Inc. Reports Fourth Quarter 2010 Financial Results

Wilmington, Delaware – January 26, 2011 - The Bancorp, Inc. ("Bancorp") (NASDAQ: TBBK), a financial holding company, today reported results for the quarter ended December 31, 2010.

Financial Highlights

-  
Fourth quarter 2010 diluted earnings per share of $0.08, as compared to diluted loss per share of $0.04 in the fourth quarter 2009.

-  
Net income increased to $2.0 million in the fourth quarter of 2010 from $33,000 in fourth quarter 2009, before preferred stock dividends and accretion (TARP repaid March 10, 2010).

-  
Non-interest income, excluding security gains and losses, increased to $5.4 million, representing a 64% increase over fourth quarter 2009.

-  
Net interest income increased by 8% to $18.2 million over fourth quarter 2009.

-  
Total non-performing loans and loans 90 days past due and accruing interest declined to 1.08% of total loans at December 31, 2010, compared to 1.66% at the prior year end.

-  
Average loans for the fourth quarter totaled $1.6 billion, an increase of $85 million or 6% over fourth quarter 2009.

-  
Average deposits for the fourth quarter totaled $2.1 billion, an increase of $524 million or 32% over fourth quarter 2009, while transaction accounts grew to 99% of total average deposits. The average cost of funds between those respective periods decreased to 0.61% from 0.86%.

Betsy Z. Cohen, Bancorp’s Chief Executive Officer, said, “We are pleased to report meaningful increases in non-interest income and net interest income. Although the provision for loan and lease losses remained elevated during the quarter; operating earnings, excluding the provision, amounted to $7.2 million compared to $5.8 million in fourth quarter 2009. Additionally, improvement in several key asset quality indicators is reflected in the decrease in total non-performing assets and loans over 90 days past due still accruing. Those categories totaled $19.6 million at December 31, 2010, compared to $25.7 million at the prior year end, or a decrease of 24%, while the allowance for loan losses to total loans increased to 1.49% from 1.26% over that period.  In a weak economy, we grew our average quarterly loans by 6%, and have begun closing Small Business Administration loans. We also have developed new relationships to market our security backed lines of credit and are optimistic about growth in that area.  We continue to grow prepaid relationships with our pipeline of prepaid customers.”

Financial Results

Bancorp reported net income available to common shareholders for the three months ended December 31, 2010 of $2.0 million or $0.08 diluted earnings per share, on 26,181,354 weighted average shares, compared to a net loss available to common shareholders of $932,000 or a diluted loss per share of $0.04, based on 26,181,291 weighted average shares, for the three months ended December 31, 2009.  Core operating earnings as shown below, a non-GAAP measure, increased to $7.2 million for the three months ended December 31, 2010 as compared to $5.8 million for the three months ended December 31, 2009.  The following is a reconciliation of core operating earnings to GAAP net income available to common shareholders (for the three month periods):
 
 
 
 
 
 
 

   
December 31,
    
December 31,
  
   
2010
    
2009
  
             
Net income (loss) available to common shareholders
   $ 2,041     $ (932 )
Preferred stock dividends and accretion
     -       965  
Income tax expense
     946       17  
                 
(Gains) and losses on securities
     14       (436 )
Other than  temporary impairment in securities
     -       2,225  
 
Provision for loan and lease losses
     4,212       4,000  
Core operating earnings (1)
   $ 7,213     $ 5,839  

(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, specifically its overall earnings capacity.  Other companies may calculate core 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 December 31, 2010, Bancorp's total assets were $2.4 billion, an increase of $350 million or 17% over December 31, 2009. During that period, investments increased to $253 million, an increase of $138 million or 120%; loans increased to $1.6 billion, an increase of $95 million or 6%; and deposits increased to $2.0 billion, an increase of $370 million or 22%.

Conference Call Webcast

You may access the LIVE webcast of Bancorp's Quarterly Earnings Conference Call at 10:30 AM EST Thursday, January 27, 2011 by clicking on the webcast link on Bancorp's homepage at www.thebancorp.com. Or, you may dial 866.730.5769 using access code 21625636.  You may listen to the replay of the webcast following the live call on Bancorp's investor relations website or telephonically until Thursday, February 3, 2011 by dialing 888.286.8010, access code 16943233.

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 and products 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.


The Bancorp, Inc. Contact
Andres Viroslav
215-861-7990
andres.viroslav@thebancorp.com
 
 

 
2
 

The Bancorp, Inc.
  
Financial highlights
  
(unaudited)
  
   
Three months ended
    
Year ended
  
   
December 31,
    
December 31,
  
   
2010
  
2009
    
2010
    
2009
  
   
(dollars in thousands except per share data)
    
(dollars in thousands except per share data)
  
Condensed income statement
                        
Net interest income
   $ 18,174     $ 16,849     $ 68,193     $ 63,709  
Provision for loan and lease losses
     4,212       4,000       19,287       13,000  
Non-interest income
                                
     Gain and losses on securities
     (14 )     436       1,207       1,106  
     Other than temporary impairment of investment securities
     -       (2,225 )     (135 )     (2,225 )
     Other non-interest income
     5,372       3,272       19,524       12,576  
Total non-interest income
     5,358       1,483       20,596       11,457  
Non-interest expense
                                
    Loss on other real estate owned
     -       -       22       1,700  
    Other non-interest expense
     16,333       14,282       61,726       54,116  
Total non-interest expense
     16,333       14,282       61,748       55,816  
Net income before income tax expense
     2,987       50       7,754       6,350  
Income tax expense
     946       17       2,532       2,248  
Net income
     2,041       33       5,222       4,102  
Less preferred stock dividends
     -       (565 )     (433 )     (2,293 )
Less preferred stock accretion
     -       (400 )     (5,809 )     (1,467 )
Net income (loss) available to common shareholders
   $ 2,041     $ (932 )   $ (1,020 )   $ 342  
                                 
Basic earnings (loss) per share
   $ 0.08     $ (0.04 )   $ (0.04 )   $ 0.02  
                                 
Diluted earnings (loss) per share
   $ 0.08     $ (0.04 )   $ (0.04 )   $ 0.02  
Weighted average shares - basic
     26,181,281       26,181,291       26,181,281       18,794,590  
Weighted average shares - diluted
     26,181,354       26,181,291       26,181,281       19,324,335  
 
 

 
3
 

Balance sheet
  
December 31
    
September 30
    
June 30
    
December 31
  
   
2010
    
2010
    
2010
    
2009
  
Assets:
                        
Cash and cash equivalents
                        
Cash and due from banks
   $ 157,411     $ 164,948     $ 92,620     $ 135,246  
Interest bearing deposits
     314,908       584,857       171,054       219,213  
     Total cash and cash equivalents
     472,319       749,805       263,674       354,459  
                                 
Investment securities, available-for-sale, at fair value
     231,165       249,342       208,080       93,478  
Investment securities, held-to-maturity
     21,364       21,354       21,496       21,468  
Loans, net of deferred costs
     1,619,195       1,590,507       1,576,525       1,523,722  
Allowance for loan and lease losses
     (24,063 )     (21,798 )     (22,336 )     (19,123 )
Loans, net
     1,595,132       1,568,709       1,554,189       1,504,599  
Premises and equipment, net
     8,767       8,602       8,229       7,942  
Accrued interest receivable
     8,878       8,396       8,483       7,722  
Intangible assets, net
     9,005       9,255       9,505       10,005  
Other real estate owned
     2,115       225       459       459  
Deferred tax asset, net
     21,872       19,434       20,258       20,875  
Other assets
     23,327       24,554       29,497       22,527  
     Total assets
   $ 2,393,944     $ 2,659,676     $ 2,123,870     $ 2,043,534  
                                 
Liabilities:
                                
Deposits
                                
Demand  (non-interest bearing)
   $ 945,605     $ 1,402,538     $ 827,268     $ 661,383  
Savings, money market and interest checking
     975,973       1,001,959       903,599       850,306  
Time deposits
     90,862       9,218       1,178       125,255  
Time deposits, $100,000 and over
     11,657       8,672       149,562       17,565  
     Total deposits
     2,024,097       2,422,387       1,881,607       1,654,509  
Securities sold under agreements to repurchase
     14,383       9,429       7,552       2,588  
Short-term borrowings
     87,000       -       -       100,000  
Federal funds purchased
     49,000       -       -       -  
Accrued interest payable
     124       109       165       362  
Subordinated debenture
     13,401       13,401       13,401       13,401  
Other liabilities
     7,033       12,918       17,367       27,471  
     Total liabilities
   $ 2,195,038     $ 2,458,244     $ 1,920,092     $ 1,798,331  
                                 
Shareholders' equity:
                                
Series B, $1,000 liquidation value, 0 and 45,220 shares issued and outstanding at December 31, 2010 and 2009, respectively
     -       -       -       39,411  
Common stock - authorized, 50,000,000 shares of $1.00  par value; 26,181,281 issued and outstanding at December 31, 2010 and 2009, respectively
     26,181       26,181       26,181       26,181  
Additional paid-in capital
     192,711       192,492       197,027       196,875  
Accumulated deficit
     (18,195 )     (20,236 )     (20,824 )     (17,175 )
Accumulated other comprehensive (loss) gain
     (1,791 )     2,995       1,394       (89 )
Total shareholders' equity
     198,906       201,432       203,778       245,203  
                                 
     Total liabilities and shareholders' equity
   $ 2,393,944     $ 2,659,676     $ 2,123,870     $ 2,043,534  

 
4
 


Average balance sheet and net interest income
  
Three months ended December 31, 2010
    
Three months ended December 31, 2009
  
(Dollars in thousands)
  
Average
          
Average
    
Average
          
Average
  
Assets:
  
Balance
    
Interest
    
Rate
    
Balance
    
Interest
    
Rate
  
Interest-earning assets:
                                    
Loans net of unearned discount
   $ 1,597,630     $ 19,048       4.77 %   $ 1,515,632     $ 18,666       4.93 %
Leases – nontaxable*
     2,646       48       7.26 %     -       -          
Investment securities-taxable
     192,716       1,530       3.18 %     111,548       1,198       4.30 %
Investment securities-nontaxable*
     76,401       1,029       5.39 %     34,709       712       8.21 %
Interest bearing deposits at Federal Reserve Bank
     332,010       207       0.25 %     79,122       51       0.26 %
Federal funds sold
     -       -       0.00 %     39,243       30       0.31 %
Net interest-earning assets
     2,201,403       21,862       3.97 %     1,780,254       20,657       4.64 %
                                                 
Allowance for loan and lease losses
     (22,660 )                     (18,946 )                
Other assets
     200,647                       157,708                  
    $ 2,379,390                     $ 1,919,016                  
                                                 
Liabilities and Shareholders' Equity:
                                                
Deposits:
                                                
Demand  (non-interest bearing)
   $ 1,119,463     $ 417       0.15 %   $ 741,239     $ 97       0.05 %
Interest bearing deposits
                                                
Interest checking
     684,740       1,793       1.05 %     420,498       1,688       1.61 %
Savings and money market
     303,749       823       1.08 %     375,530       1,297       1.38 %
Time
     29,481       63       0.85 %     76,192       218       1.14 %
Total interest bearing deposits
     1,017,970       2,679       1.05 %     872,220       3,203       1.47 %
Total deposits
     2,137,433       3,096       0.58 %     1,613,459       3,300       0.82 %
                                                 
Short-term borrowings
     4,272       8       0.75 %     29,837       50       0.67 %
Repurchase agreements
     12,126       9       0.30 %     1,602       4       1.00 %
Subordinated debt
     13,401       216       6.45 %     13,401       216       6.45 %
Net interest bearing liabilities
     1,047,769       2,912       1.11 %     917,060       3,473       1.51 %
Total cost of funds
     2,167,232       3,329       0.61 %     1,658,299       3,570       0.86 %
                                                 
Other liabilities
     8,423                       12,456                  
Total Liabilities
     2,175,655                       1,670,755                  
                                                 
Shareholders' equity
     203,735                       248,261                  
    $ 2,379,390                     $ 1,919,016                  
Net interest income on tax equivalent basis*
             18,533                       17,087          
                                                 
Tax equivalent adjustment
             359                       238          
                                                 
Net interest income
           $ 18,174                     $ 16,849          
Net interest margin *
                     3.36 %                     3.84 %
                                                 
* Taxable equivalent basis for comparability to other interest categories, using a 34% statutory tax rate
                  


 
5
 


Average balance sheet and net interest income
  
Year ended December 31, 2010
    
Year ended December 31, 2009
  
(Dollars in thousands)
  
Average
          
Average
    
Average
          
Average
  
Assets:
  
Balance
    
Interest
    
Rate
    
Balance
    
Interest
    
Rate
  
Interest-earning assets:
                                    
Loans net of unearned discount
   $ 1,567,947     $ 73,741       4.70 %   $ 1,477,614     $ 73,074       4.95 %
Leases - bank qualified
     1,038       48       4.62 %     -       -       0.00 %
Investment securities-taxable
     164,238       6,181       3.76 %     107,695       5,017       4.66 %
Investment securities-nontaxable*
     48,913       2,919       5.97 %     25,449       2,041       8.02 %
Interest bearing deposits at Federal Reserve Bank
     327,943       817       0.25 %     39,271       87       0.22 %
Federal funds sold
     -       -       0.00 %     70,061       234       0.33 %
Net interest-earning assets
     2,110,079       83,706       3.97 %     1,720,090       80,453       4.68 %
                                                 
Allowance for loan and lease losses
     (21,676 )                     (18,632 )                
Other assets
     183,850                       135,917                  
    $ 2,272,253                     $ 1,837,375                  
                                                 
Liabilities and Shareholders' Equity:
                                                
Deposits:
                                                
Demand (non-interest bearing)
   $ 1,011,667     $ 1,311       0.13 %   $ 529,477     $ 406       0.08 %
Interest bearing deposits
                                                
Interest checking
     622,116       7,870       1.27 %     365,715       5,937       1.62 %
Savings and money market
     311,251       3,921       1.26 %     516,356       5,959       1.15 %
Time
     69,169       457       0.66 %     151,791       2,510       1.65 %
Total interest bearing deposits
     1,002,536       12,248       1.22 %     1,033,862       14,406       1.39 %
Total deposits
     2,014,203       13,559       0.67 %     1,563,339       14,812       0.95 %
                                                 
Short-term Borrowings
     13,464       89       0.66 %     44,895       329       0.73 %
Repurchase agreements
     8,637       27       0.31 %     2,175       26       1.20 %
Subordinated debt
     13,211       864       6.54 %     13,401       883       6.59 %
Net interest bearing liabilities
     1,037,848       13,228       1.27 %     1,094,333       15,644       1.43 %
Total cost of funds
     2,049,515       14,539       0.71 %     1,623,810       16,050       0.99 %
                                                 
Other liabilities
     9,569                       7,608                  
Total Liabilities
     2,059,084                       1,631,418                  
                                                 
Shareholders' equity
     213,169                       205,957                  
                                                 
    $ 2,272,253                     $ 1,837,375                  
Net interest income on tax equivalent basis*
             69,167                       64,403          
                                                 
Tax equivalent adjustment
             974                       694          
                                                 
Net interest income
           $ 68,193                     $ 63,709          
Net interest margin *
                     3.28 %                     3.74 %
                                                 
* Full taxable equivalent basis to be comparable to the interest income of all other categories, using a 34% statutory tax rate
                  



 
6
 




Allowance for loan and lease losses:
  
For year ended
    
For year ended
  
   
December 31,
    
December 31,
  
   
2010
    
2009
  
             
Balance in the allowance for loan and lease losses at beginning of period
   $ 19,123     $ 17,361  
                 
Loans charged-off:
                
Commercial
     12,948       6,314  
Construction
     565       4,546  
Lease financing
     3       49  
Residential mortgage
     1,254       328  
Consumer
     618       127  
Total
     15,388       11,364  
                 
Recoveries:
                
Commercial
     254       53  
Construction
     29       32  
Lease financing
     10       27  
Residential mortgage
     742       12  
Consumer
     6       2  
Total
     1,041       126  
Net charge-offs
     14,347       11,238  
Provision charged to operations
     19,287       13,000  
                 
Balance in allowance for loan and lease losses at end of period
   $ 24,063     $ 19,123  
Net charge-offs/average loans
     0.92 %     0.76 %

 
7
 


Loan portfolio:
  
December 31
    
September 30,
    
June 30,
    
December 31,
  
   
2010
    
2010
    
2010
    
2009
  
                         
                         
Commercial
   $ 441,835     $ 409,697     $ 403,320     $ 402,232  
Commercial mortgage  (1)
     580,780       580,491       580,542       569,434  
Construction
     203,120       206,551       207,846       207,184  
Total commercial loans
     1,225,735       1,196,739       1,191,708       1,178,850  
Direct financing leases
     103,289       103,278       96,319       78,802  
Residential mortgage
     93,004       93,833       95,542       85,759  
Consumer loans and others
     194,320       193,968       190,729       178,608  
      1,616,348       1,587,818       1,574,298       1,522,019  
Unamortized costs (fees)
     2,847       2,689       2,227       1,703  
Total loans, net of unamortized fees and costs
   $ 1,619,195     $ 1,590,507     $ 1,576,525     $ 1,523,722  
                                 
Supplemental loan data :
                                
Construction 1-4 family
     92,190       95,905       102,730       100,088  
Construction commercial, acquisition and development
     110,930       110,646       105,116       107,096  
    $ 203,120     $ 206,551     $ 207,846     $ 207,184  
(1) At December 31, 2010 our owner-occupied loans amounted to $127 million, or 22% of commercial mortgages.
                  
                                 

 
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December 31,
    
September 30,
    
June 30,
    
March 31,
     December 31,  
   
2010
    
2010
    
2010
    
2010
    
2009
  
Asset quality ratios:
                              
Nonperforming loans to total loans (1)
     1.08 %     1.51 %     1.82 %     1.44 %     1.66 %
Nonperforming assets to total assets (1)
     0.82 %     0.91 %     1.37 %     1.08 %     1.26 %
Allowance for loan and lease losses to total loans
     1.49 %     1.37 %     1.42 %     1.33 %     1.26 %
                                         
Nonaccrual loans
   $ 15,298     $ 19,640     $ 18,193     $ 17,863     $ 12,270  
     Total nonperforming loans
     15,298       19,640       18,193       17,863       12,270  
Other real estate owned
     2,115       225       459       648       459  
     Total nonperforming assets
   $ 17,413     $ 19,865     $ 18,652     $ 18,511     $ 12,729  
                                         
Loans 90 days past due still accruing interest
   $ 2,219     $ 4,352     $ 10,529     $ 4,071     $ 12,994  
           
(1) Nonperforming loans are defined as nonaccrual loans and restructure loans. Loans 90 days past due and still accruing interest are also included in these ratios.
          
          
          

   
Three months ended
    
Year ended
  
   
December 31,
    
December 31,
  
   
2010
    
2009
    
2010
    
2009
  
Selected operating ratios:
                        
Return on average assets
     0.34 %     0.01 %     0.23 %     0.22 %
Return on average equity
     4.01 %     0.05 %     2.45 %     1.99 %
Net interest margin
     3.36 %     3.84 %     3.28 %     3.74 %
Efficiency ratio (1)
     69.37 %     71.11 %     70.52 %     73.29 %
Book value per share (2)
   $ 7.60     $ 7.64     $ 7.60     $ 7.64  
                                 
(1) Excludes OREO loss in 2009.
                          
(2) Excludes Series B Preferred Shares issued to the U.S. Treasury and the associated book value.
                  


Capital Ratios
   
Tier 1 capital
    
Tier 1 capital
    
Total capital
  
   
to average
    
to risk-weighted
    
to risk-weighted
  
   
assets ratio
    
assets ratio
    
assets ratio
  
                   
As of  December  31, 2010
                  
The Company
     8.37 %     11.99 %     13.24 %
The Bancorp Bank
     7.39 %     10.60 %     11.85 %
"Well capitalized" institution (under FDIC regulations)
     5.00 %     6.00 %     10.00 %
                         
As of December 31, 2009
                        
The Company
     12.68 %     15.81 %     17.06 %
The Bancorp Bank
     8.78 %     10.97 %     12.22 %
"Well capitalized" institution (under FDIC regulations)
     5.00 %     6.00 %     10.00 %

 
 
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