TBBK Bancorp Inc

The Bancorp, Inc. ("Bancorp") (NASDAQ:TBBK), a financial holding company, today reported financial results for fourth quarter and fiscal 2015.

Bancorp reported net income of $19.6 million or diluted earnings per share of $0.52 for fourth quarter 2015 compared to net income of $20.2 million or $0.52 earnings per diluted share in fourth quarter 2014. Year to date net income was $14.4 million or diluted earnings per share of $0.38 for 2015 compared to net income of $57.1 million or $1.49 earnings per diluted share in 2014. Net income from continuing operations for fourth quarter 2015 was $19.1 million or $0.51 per diluted share compared to net income of $11.1 million or $0.30 per diluted share in fourth quarter 2014. Income from continuing operations does not include any income which may result upon the reinvestment of the proceeds of sales we are pursuing from the approximately $568.3 million of commercial and residential loans in the Bancorp’s discontinued operations.

Financial Highlights

Continuing Operations:

• Gain of $33.5 million on the sale of the majority of the health savings account (“H.S.A.”) administration business.
• Gain of $14.5 million on sales of tax exempt securities for tax planning purposes.
• Increases over prior year loan balances in security-backed lines of credit (“SBLOC”) 37%, Small Business Administration (“SBA”) 45% and Leasing 19%.
• 18% increase in net interest income to $18.6 million in fourth quarter 2015 compared to $15.7 million in fourth quarter 2014.
• Regulatory lookback expense of $14.8 million.*
• Loans and continuing operations loans held for sale totaled $1.57 billion at December 31, 2015 compared to $1.09 billion at December 31, 2014, a 44% increase.

• Tier one capital to assets, tier one capital to risk-weighted assets, total capital to risk-weighted assets and common equity-tier 1 were 7.21%, 14.74%, 14.93% and 14.74%, compared to well capitalized minimums of 5%, 8%, 10% and 6.5%.

John Chrystal, Bancorp’s Interim Chief Executive Officer, said, “The fourth quarter continued to show progress in the transition to what we believe, and our historical results evidence, are better performing lines of business. Our portfolio loans exceeded the $1 billion threshold at year end 2015, with a 44% increase over the prior year end for the total of portfolio loans and loans held for sale. We earn carry interest on loans held for sale until such loans are sold. This growth was achieved in loan segments with historically low loan losses, which continued to be the case in 2015. Growth in those SBLOC, SBA, and Leasing segments drove a net interest income increase of 18% to $18.6 million for the quarter. Prepaid and payment sponsorship fee income, our principal non-interest income driver, reflected an exited relationship and other factors; however, we believe that year over year increases will result in 2016. During the quarter we sold the majority of our health savings account (“H.S.A.”) administration business and approximately $385 million of related deposits with higher interest costs than the majority of our other deposits. With expense savings, this exit is projected to be accretive. Those H.S.A. client relationships were sold at a gain of $33.5 million. Additionally during the quarter, we sold approximately $400 million of tax exempt municipal securities to accelerate the Bank’s utilization of deferred tax assets. The majority of the sales proceeds have been reinvested in taxable securities with slightly higher rates and lower duration. The balance of the sales proceeds are anticipated to be similarly invested by the end of first quarter 2016. The gains on the H.S.A. and the investment securities sales also increased our regulatory capital ratios. The H.S.A. deposit exit reduced excess balances maintained at the Federal Reserve Bank (“FRB”). While that reduction was partially offset by other deposit increases, future scheduled deposit exits are projected to further reduce balances maintained at the FRB in 2016. These balances earn relatively low rates of interest and increase average assets thereby lowering capital ratios. The deposits being exited do not have significant impact on profitability, nor do they provide opportunities for future non-interest income.

While the lookback consultant has continued to make progress toward final completion, costs continue to be in excess of estimates and amounted to $14.8 million during the quarter. Based on estimates by the consultant, this work should be complete sometime in the second quarter of 2016.

Book value per common share at December 31, 2015 amounted to $8.50 compared to $8.46 at December 31, 2014. The Bancorp and its subsidiary, The Bancorp Bank, remain well capitalized.”

Non-recurring income/expense Three months ended   Year ended December 31, 2015 December 31, 2015 (dollars in thousands) Pre-tax income - continuing operations $ 31,156 $ 8,416 Pre-tax income - discontinued operations 3,607 13,800   Continuing operations Gain on sale of health savings portfolio (33,531 ) (33,531 ) Gain on sale of securities (14,497 ) (14,435 ) Gain on sale of warrants (2,691 ) (2,691 ) BSA consultant and lookback fees * 14,801 41,444 Civil money penalty 3,000 3,000 Additional FDIC assessment 920 920 Severance for health savings division 550 550 Regulatory/governance related legal fees 603 2,292 Discontinued operations Restatement related audit fees - 2,560 Other real estate owned expense   1,423     3,199   Pre-tax income after analysis of non-recurring income/expense $ 5,341 $ 25,524   * Lookback expense is being incurred to analyze historical transactions for compliance with suspicious activity reporting requirements.

Conference Call Webcast

You may access the LIVE webcast of Bancorp's Quarterly Earnings Conference Call at 10:00 AM ET Monday, February 1, 2016 by clicking on the webcast link on Bancorp's homepage at www.thebancorp.com. Or, you may dial 877.787.4143, access code 31514831. You may listen to the replay of the webcast following the live call on Bancorp's investor relations website or telephonically until Monday, February 8, 2016 by dialing 855.859.2056, access code 31514831.

About Bancorp

With operations in the US and Europe, 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 December 31, December 31, Condensed income statement   2015     2014     2015     2014   (dollars in thousands except per share data)   Net interest income $ 18,582 $ 15,715   $ 69,931 $ 59,425   Provision for loan and lease losses   300   (1,404 )   2,100   1,202   Non-interest income Service fees on deposit accounts 1,889 2,060 7,468 6,339 Card payment and ACH processing fees 1,489 1,413 5,731 5,402 Prepaid card fees 11,744 12,614 47,496 51,287 Gain (loss) on sale of loans 3,333 (926 ) 10,080 12,542 Gain on sale of investment securities 14,497 85 14,435 450 Gain on sale of health savings portfolio 33,531 - 33,531 - Leasing income 367 663 2,094 2,899 Debit card income 253 383 1,611 1,679 Affinity fees 967 745 3,358 2,596 Other non-interest income   4,430   638     9,496   1,855   Total non-interest income 72,500 17,675 135,300 85,049 Non-interest expense Bank Secrecy Act and lookback consulting expenses 14,801 3,883 41,444 8,801 Other non-interest expense   44,825   33,745     153,271   127,179   Total non-interest expense   59,626   37,628     194,715   135,980   Income (loss) from continuing operations before income tax expense 31,156 (2,834 ) 8,416 7,292 Income tax expense (benefit)   12,082   (13,929 )   1,265   (14,523 ) Net income from continuing operations 19,074 11,095 7,151 21,815 Net income from discontinued operations, net of tax   498   9,096     7,234   35,294   Net income available to common shareholders $ 19,572 $ 20,191   $ 14,385 $ 57,109     Net income per share from continuing operations - basic $ 0.51 $ 0.31   $ 0.19 $ 0.58   Net income per share from discontinued operations - basic $ 0.01 $ 0.24   $ 0.19 $ 0.94   Net income per share - basic $ 0.52 $ 0.55   $ 0.38 $ 1.52     Net income per share from continuing operations - diluted $ 0.51 $ 0.30   $ 0.19 $ 0.57   Net income per share from discontinued operations - diluted $ 0.01 $ 0.22   $ 0.19 $ 0.92   Net income per share - diluted $ 0.52 $ 0.52   $ 0.38 $ 1.49   Common stock shares outstanding 37,861,303 37,808,777 37,861,303 37,808,777   Balance sheet   December 31,   September 30,   June 30,   December 31,     2015     2015     2015     2014   (dollars in thousands) Assets: Cash and cash equivalents Cash and due from banks $ 7,643 $ 4,002 $ 13,269 $ 8,665 Interest earning deposits at Federal Reserve Bank 1,147,519 995,441 936,989 1,059,320 Securities sold under agreements to resell   -     37,970     40,068     46,250   Total cash and cash equivalents   1,155,162     1,037,413     990,326     1,114,235     Investment securities, available-for-sale, at fair value 1,070,098 1,316,705 1,370,027 1,493,639 Investment securities, held-to-maturity 93,590 93,604 93,649 93,765 Loans held for sale, at fair value 489,938 354,600 284,501 217,080 Loans, net of deferred fees and costs 1,078,077 994,518 968,033 874,593 Allowance for loan and lease losses   (4,400 )   (4,194 )   (4,352 )   (3,638 ) Loans, net   1,073,677     990,324     963,681     870,955   Federal Home Loan Bank & Atlantic Central Bankers Bank stock 1,062 1,063 1,063 1,002 Premises and equipment, net 21,631 18,893 19,271 17,697 Accrued interest receivable 9,471 11,232 11,526 11,251 Intangible assets, net 4,929 5,248 5,541 6,228 Deferred tax asset, net 35,457 33,857 35,874 33,673 Investment in unconsolidated entity 180,950 186,656 187,186 193,595 Assets held for sale 584,916 611,729 651,158 887,929 Other assets   46,806     53,123     43,804     45,268   Total assets $ 4,767,687   $ 4,714,447   $ 4,657,607   $ 4,986,317     Liabilities: Deposits Demand and interest checking $ 3,602,376 $ 4,002,638 $ 3,993,393 $ 4,289,586 Savings and money market 383,832 376,577 321,264 330,798 Time deposits   428,549     -     1,400     1,400   Total deposits   4,414,757     4,379,215     4,316,057     4,621,784     Securities sold under agreements to repurchase 925 1,034 2,357 19,414 Subordinated debenture 13,401 13,401 13,401 13,401 Other liabilities   17,649     7,100     10,038     12,695   Total liabilities $ 4,446,732   $ 4,400,750   $ 4,341,853   $ 4,667,294     Shareholders' equity:

Common stock - authorized, 50,000,000 shares of $1.00 par value;37,861,303 and 37,808,777 shares issued at December 31, 2015and 2014, respectively

37,861 37,858 37,858 37,809 Treasury stock (100,000 shares) (866 ) (866 ) (866 ) (866 ) Additional paid-in capital 300,549 299,470 298,978 297,987 Accumulated deficit (14,495 ) (33,429 ) (27,854 ) (28,242 ) Accumulated other comprehensive income (loss)   (2,094 )   10,664     7,638     12,335   Total shareholders' equity   320,955     313,697     315,754     319,023     Total liabilities and shareholders' equity $ 4,767,687   $ 4,714,447   $ 4,657,607   $ 4,986,317     Average balance sheet and net interest income   Three months ended December 31, 2015   Three months ended December 31, 2014   (dollars in thousands) Average     Average Average     Average Assets: Balance Interest Rate Balance Interest Rate Interest-earning assets: Loans net of unearned fees and costs ** $ 1,416,176 $ 14,502 4.10% $ 1,036,760 $ 9,869 3.81% Leases - bank qualified* 28,658 487 6.80% 16,341 229 5.61% Investment securities-taxable 1,022,914 5,290 2.07% 1,014,491 4,859 1.92% Investment securities-nontaxable* 248,662 2,203 3.54% 530,431 4,843 3.65%

Interest earning deposits at Federal Reserve Bank

751,126 595 0.32% 504,612 332 0.26%

Federal funds sold and securities purchased underagreement to resell

31,406 113 1.44% 49,250 166 1.35% Net interest earning assets 3,498,942 23,190 2.65% 3,151,885 20,298 2.58%   Allowance for loan and lease losses (4,178) (8,028) Assets held for sale 617,983 6,650 4.30% 1,234,255 11,161 3.62% Other assets 322,901 28,509 $ 4,435,648 $ 4,406,621   Liabilities and Shareholders' Equity: Deposits: Demand and interest checking $ 3,518,223 $ 2,689 0.31% $ 3,709,957 $ 2,302 0.25% Savings and money market 378,301 581 0.61% 323,101 345 0.43% Time 174,530 263 0.60% 3,077 13 1.69% Total deposits 4,071,054 3,533 0.35% 4,036,135 2,660 0.26%   Short-term borrowings 18,152 12 0.26% - - 0.00% Repurchase agreements 1,148 1 0.35% 18,191 13 0.29% Subordinated debt 13,401 120 3.58% 13,401 135 4.03% Total deposits and interest bearing liabilities 4,103,755 3,666 0.36% 4,067,727 2,808 0.28%   Other liabilities 13,313 20,884 Total liabilities 4,117,068 4,088,611   Shareholders' equity 318,580 318,010 $ 4,435,648 $ 4,406,621 Net interest income on tax equivalent basis* $ 26,174 $ 28,651   Tax equivalent adjustment 942 1,775   Net interest income $ 25,232 $ 26,876 Net interest margin * 2.52% 2.62%               * Full taxable equivalent basis, using a 35% statutory tax rate. ** Includes loans held for sale.   Average balance sheet and net interest income   Year ended December 31, 2015   Year ended December 31, 2014   (dollars in thousands) Average     Average Average     Average Assets: Balance Interest Rate Balance Interest Rate Interest-earning assets: Loans net of unearned fees and costs ** $ 1,245,189 $ 48,733 3.91% $ 903,681 $ 35,849 3.97% Leases - bank qualified* 25,126 1,734 6.90% 17,400 938 5.39% Investment securities-taxable 989,705 19,918 2.01% 1,031,584 20,662 2.00% Investment securities-nontaxable* 452,526 16,646 3.68% 477,384 17,454 3.66% Interest earning deposits at Federal Reserve Bank 935,093 2,354 0.25% 720,240 1,792 0.25%

Federal funds sold and securities purchased underagreement to resell

40,402 578 1.43% 33,814 462 1.37% Net interest-earning assets 3,688,041 89,963 2.44% 3,184,103 77,157 2.42%   Allowance for loan and lease losses (4,111) (3,521) Assets held for sale 715,116 28,925 4.04% 1,162,319 49,891 4.29% Other assets 313,232 109,888 $ 4,712,278 $ 4,452,789   Liabilities and Shareholders' Equity: Deposits: Demand and interest checking $ 3,975,475 $ 10,982 0.28% $ 3,746,958 $ 9,097 0.24% Savings and money market 337,168 1,867 0.55% 366,160 1,574 0.43% Time 44,789 275 0.61% 7,974 96 1.20% Total deposits 4,357,432 13,124 0.30% 4,121,092 10,767 0.26%   Short-term borrowings 4,575 12 0.26% 5 - 0.00% Repurchase agreements 5,224 15 0.29% 17,496 50 0.29% Subordinated debt 13,401 448 3.34% 13,401 478 3.57% Total deposits and interest bearing liabilities 4,380,632 13,599 0.31% 4,151,994 11,295 0.27%   Other liabilities 10,403 17,721 Total liabilities 4,391,035 4,169,715   Shareholders' equity 321,243 283,074 $ 4,712,278 $ 4,452,789 Net interest income on tax equivalent basis* 105,289 115,753   Tax equivalent adjustment 6,433 6,437   Net interest income $ 98,856 $ 109,316 Net interest margin * 2.37% 2.60%               * Full taxable equivalent basis, using a 35% statutory tax rate. ** Includes loans held for sale. Allowance for loan and lease losses:     Year ended       December 31,   December 31,   2015     2014   (dollars in thousands)   Balance in the allowance for loan and lease losses at beginning of period (1) $ 3,638   $ 3,881     Loans charged-off: SBA non real estate 112 307 Direct lease financing 30 323 SBLOC - 3 Other consumer loans   1,219     871   Total   1,361     1,504     Recoveries: SBA non real estate - 12 Direct lease financing - 25 Other consumer loans   23     22   Total   23     59   Net charge-offs 1,338 1,445 Provision charged to operations   2,100     1,202     Balance in allowance for loan and lease losses at end of period $ 4,400   $ 3,638   Net charge-offs/average loans 0.11 % 0.16 % Net charge-offs/average assets 0.03 % 0.03 % (1) Excludes activity from assets held for sale   Loan portfolio: December 31, September 30, June 30, December 31, 2015 2015 2015 2014 (dollars in thousands)   SBA non real estate $ 68,887 $ 64,988 $ 63,390 $ 62,425 SBA commercial mortgage 114,029 116,545 85,234 82,317 SBA construction   6,977     5,191     16,977   20,392 Total SBA loans 189,893 186,724 165,601 165,134 Direct lease financing 231,514 223,929 222,169 194,464 SBLOC 575,948 539,240 512,269 421,862 Other specialty lending 48,315 12,119 32,118 48,625 Other consumer loans   23,180     23,502     27,044   36,168 1,068,850 985,514 959,201 866,253 Unamortized loan fees and costs   9,227     9,004     8,832   8,340 Total loans, net of deferred loan fees and costs $ 1,078,077   $ 994,518   $ 968,033 $ 874,593   Small business lending portfolio: December 31, September 30, June 30, December 31, 2015 2015 2015 2014 (dollars in thousands)   SBA loans, including deferred fees and costs 197,966 194,612 173,357 172,660 SBA loans included in HFS   109,174     86,245     65,885   38,704 Total SBA loans $ 307,140   $ 280,857   $ 239,242 $ 211,364   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 December 31, 2015 The Bancorp 7.21% 14.74% 14.93% 14.74% The Bancorp Bank 6.94% 14.03% 14.22% 14.03% "Well capitalized" institution (under FDIC regulations) 5.00% 8.00% 10.00% 6.50%   As of December 31, 2014 The Bancorp 7.07% 11.54% 11.67% n/a The Bancorp Bank 6.46% 10.46% 10.59% n/a "Well capitalized" institution (under FDIC regulations) 5.00% 6.00% 10.00% n/a     Three months ended   Year ended December 31, December 31, 2015   2014 2015   2014 Selected operating ratios: Return on average assets (annualized) 1.75 % nm 0.31 % nm Return on average equity (annualized) 24.47 % nm 4.50 % nm Net interest margin 2.52 % 2.62 % 2.37 % 2.60 % Book value per share $ 8.50 $ 8.46 $ 8.50 $ 8.46   December 31, September 30, June 30, December 31,   2015     2015     2015     2014   Asset quality ratios: Nonperforming loans to total loans (1) 0.22 % 0.25 % 0.34 % 0.24 % Nonperforming assets to total assets (1) 0.05 % 0.05 % 0.07 % 0.04 % Allowance for loan and lease losses to total loans 0.41 % 0.42 % 0.45 % 0.42 %   Nonaccrual loans $ 1,927 $ 2,157 $ 2,666 $ 1,907 Other real estate owned   -     -     -     -   Total nonperforming assets $ 1,927   $ 2,157   $ 2,666   $ 1,907     Loans 90 days past due still accruing interest $ 403   $ 294   $ 620   $ 149     (1) Nonperforming loan and asset ratios include nonaccrual loans and loans 90 days past due still accruing interest.   Three months ended December 31, September 30, June 30, December 31, 2015 2015 2015 2014 (in thousands) Gross dollar volume (GDV): Prepaid card GDV $ 9,839,782   $ 9,465,687   $ 10,006,333   $ 9,119,682  

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The Bancorp, Inc.Andres Viroslav, 215-861-7990aviroslav@thebancorp.com