TBBK Bancorp Inc

The Bancorp, Inc. ("The Bancorp") (NASDAQ: TBBK), a financial holding company, today reported financial results for first quarter 2016.

Highlights

• Net interest income increased 24% to $20.6 million for the quarter ended March 31, 2016 compared to $16.5 million for the quarter ended March 31, 2015.
• Loans and continuing operations loans held for sale increased 29% to $1.43 billion at March 31, 2016 compared to $1.11 billion at March 31, 2015.
• Small Business Administration (“SBA”) loans increased 51% to $334.4 million from $221.9 million at March 31, 2015.
• Security backed lines of credit (“SBLOC”) increased 32% to $592.7 million from $447.6 million at March 31, 2015.
• Direct lease financing increased 9% to $240.7 million from $220.6 million at March 31, 2015.
• Prepaid card fee income increased 3.4% to $13.6 million for the quarter ended March 31, 2016 from $13.1 million at March 31, 2015.
• Gross dollar volume (“GDV”) (1) increased 15.4% to $13.5 billion for Q1 2016 from $11.7 billion for Q1 2015.
• Assets held for sale from discontinued operations decreased 8% from December 31, 2015 and 36% from March 31, 2015.
• The rate payable by us for average deposits and interest bearing liabilities of $4.08 billion in Q1 2016 was 0.30% with a rate of 0.08% for $2.03 billion of average prepaid card deposits.
• Book value per common share at March 31, 2016 of $8.35 per share. The Bancorp and its subsidiary, The Bancorp Bank, remain well capitalized.

John Chrystal, The Bancorp’s Interim Chief Executive Officer, said, “During the quarter, our core lending businesses continued to drive healthy net interest income growth while non-interest income was anchored by a 3.4% growth in prepaid card fees to $13.6 million. As anticipated, earnings were negatively impacted by continued high regulatory look back expenses totaling $14.3 million for the quarter. We believe that lookback expenses will be greatly reduced after the second quarter of 2016 and minimal by year-end. While the CMBS business has generated positive revenue each year on an annual basis, we expect some quarter to quarter volatility. Losses from commercial real estate loan sales affected our earnings and resulted from volatility in secondary markets.”

The Bancorp reported a net loss of $10.9 million, or $0.29 loss per diluted share, for the quarter ended March 31, 2016 compared to net income of $214,000, or $0.00 net income per share, for the quarter ended March 31, 2015. Net loss from continuing operations for the quarter ended March 31, 2016 was $10.6 million or a loss of $0.28 per diluted share compared to net loss from continuing operations of $1.8 million or a loss of $0.05 per diluted share for the quarter ended March 31, 2015. Loss from continuing operations does not include any income which may result from the reinvestment of the proceeds from sales of the remaining $523.6 million of commercial and residential loans 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 6.97%, 14.35%, 14.55% and 14.35% compared to well capitalized minimums of 5%, 8%, 10% and 6.5%.

Conference Call Webcast

You may access the LIVE webcast of The Bancorp's Quarterly Earnings Conference Call at 8:00 AM ET Friday, April 29, 2016 by clicking on the webcast link on Bancorp's homepage at www.thebancorp.com. Or, you may dial 877.787.4143, access code 90268500. 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 6, 2016 by dialing 855.859.2056, access code 90268500.

About The 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 March 31, December 31, Condensed income statement 2016   2015 2015 (dollars in thousands except per share data)   Net interest income $ 20,556   $ 16,514   $ 69,931 Provision for loan and lease losses   -     665     2,100 Non-interest income Service fees on deposit accounts 847 1,760 7,468 Card payment and ACH processing fees 1,267 1,253 5,731 Prepaid card fees 13,574 13,132 47,496 Gain (loss) on sale of loans (1,433 ) 1,676 10,080 Gain on sale of investment securities 2,026 80 14,435 Gain on sale of health savings portfolio - - 33,531 Change in value of investment in unconsolidated entity 812 1,045 1,729 Leasing income 404 519 2,291 Debit card income (92 ) 460 1,611 Affinity fees 1,094 412 3,358 Other non-interest income   189     440     5,337 Total non-interest income 18,688 20,777 133,067 Non-interest expense Bank Secrecy Act and lookback consulting expenses 14,315 5,744 41,444 Other non-interest expense   40,823     35,116     152,644 Total non-interest expense   55,138     40,860     194,088 Income (loss) from continuing operations before income tax expense (15,894 ) (4,234 ) 6,810 Income tax expense (benefit)   (5,272 )   (2,427 )   1,450 Net income (loss) from continuing operations (10,622 ) (1,807 ) 5,360 Net income (loss) from discontinued operations, net of tax   (290 )   2,021     8,072 Net income (loss) available to common shareholders $ (10,912 ) $ 214   $ 13,432   Net income (loss) per share from continuing operations - basic $ (0.28 ) $ (0.05 ) $ 0.14 Net income (loss) per share from discontinued operations - basic $ (0.01 ) $ 0.05   $ 0.21 Net income (loss) per share - basic $ (0.29 ) $ -   $ 0.35   Net income (loss) per share from continuing operations - diluted $ (0.28 ) $ (0.05 ) $ 0.14 Net income (loss) per share from discontinued operations - diluted $ (0.01 ) $ 0.05   $ 0.21 Net income (loss) per share - diluted $ (0.29 ) $ -   $ 0.35 Common stock shares outstanding 37,945,153 37,858,152 37,861,218           Balance sheet March 31, December 31, September 30, March 31, 2016 2015 2015 2015 (dollars in thousands) Assets: Cash and cash equivalents Cash and due from banks $ 8,542 $ 7,643 $ 4,002 $ 18,636 Interest earning deposits at Federal Reserve Bank 757,773 1,147,519 995,441 994,400 Securities sold under agreements to resell   10,208     -     37,970     46,250   Total cash and cash equivalents   776,523     1,155,162     1,037,413     1,059,286     Investment securities, available-for-sale, at fair value 1,252,755 1,070,098 1,316,705 1,442,665 Investment securities, held-to-maturity 93,550 93,590 93,604 93,662 Loans held for sale, at fair value 313,595 489,938 354,600 239,820 Loans, net of deferred fees and costs 1,114,053 1,078,077 994,518 870,901 Allowance for loan and lease losses   (4,378 )   (4,400 )   (4,194 )   (4,243 ) Loans, net   1,109,675     1,073,677     990,324     866,658   Federal Home Loan Bank & Atlantic Community Bancshares Inc stock 1,062 1,062 1,063 1,003 Premises and equipment, net 21,692 21,631 18,893 19,158 Accrued interest receivable 9,172 9,471 11,232 11,290 Intangible assets, net 4,672 4,929 5,248 5,791 Deferred tax asset, net 32,462 36,207 33,857 32,025 Investment in unconsolidated entity 177,211 178,520 186,656 190,783 Assets held for sale from discontinued operations 536,548 583,909 611,729 842,574 Other assets   50,802     47,629     53,123     43,734   Total assets $ 4,379,719   $ 4,765,823   $ 4,714,447   $ 4,848,449     Liabilities: Deposits Demand and interest checking $ 3,610,003 $ 3,602,376 $ 4,002,638 $ 4,182,656 Savings and money market 388,953 383,832 376,577 307,988 Time deposits   -     428,549     -     1,400   Total deposits   3,998,956     4,414,757     4,379,215     4,492,044     Securities sold under agreements to repurchase 671 925 1,034 7,959 Subordinated debenture 13,401 13,401 13,401 13,401 Other liabilities   51,102     16,739     7,100     12,992   Total liabilities $ 4,064,130   $ 4,445,822   $ 4,400,750   $ 4,526,396     Shareholders' equity: Common stock - authorized, 50,000,000 shares of $1.00 par value; 37,945,153 and 37,858,152 shares issued at March 31, 2016 and 2015, respectively 37,945 37,861 37,858 37,858 Treasury stock (100,000 shares) (866 ) (866 ) (866 ) (866 ) Additional paid-in capital 301,018 300,549 299,470 298,402 Accumulated deficit (26,361 ) (15,449 ) (33,429 ) (28,029 ) Accumulated other comprehensive income (loss)   3,853     (2,094 )   10,664     14,688   Total shareholders' equity   315,589     320,001     313,697     322,053     Total liabilities and shareholders' equity $ 4,379,719   $ 4,765,823   $ 4,714,447   $ 4,848,449         Average balance sheet and net interest income Three months ended March 31, 2016 Three months ended March 31, 2015 (dollars in thousands) Average     Average Average     Average Assets: Balance Interest Rate Balance Interest Rate Interest-earning assets: Loans net of unearned fees and costs ** $ 1,476,112 $ 15,556 4.22 % $ 1,110,804 $ 10,507 3.78 % Leases - bank qualified* 27,798 482 6.94 % 17,555 292 6.65 % Investment securities-taxable 1,149,101 6,532 2.27 % 1,028,718 5,060 1.97 % Investment securities-nontaxable* 75,846 493 2.60 % 532,324 4,883 3.67 % Interest earning deposits at Federal Reserve Bank 799,398 902 0.45 % 1,096,344 622 0.23 % Federal funds sold and securities purchased under agreement to resell   7,422     27 1.46 %   46,250     164 1.42 % Net interest earning assets 3,535,677 23,992 2.71 % 3,831,995 21,528 2.25 %   Allowance for loan and lease losses (4,399 ) (3,640 ) Assets held for sale from discontinued operations 588,685 5,819 3.95 % 861,685 8,536 3.96 % Other assets   299,551     278,667   $ 4,419,514   $ 4,968,707     Liabilities and Shareholders' Equity: Deposits: Demand and interest checking $ 3,471,909 $ 2,441 0.28 % $ 4,290,835 $ 2,606 0.24 % Savings and money market 387,651 225 0.23 % 318,776 487 0.61 % Time   206,393     305 0.59 %   1,400     6 1.71 % Total deposits 4,065,953 2,971 0.29 % 4,611,011 3,099 0.27 %   Repurchase agreements 856 - 0.00 % 13,147 9 0.27 % Subordinated debt   13,401     124 3.70 %   13,401     95 2.84 % Total deposits and interest bearing liabilities 4,080,210 3,095 0.30 % 4,637,559 3,203 0.28 %   Other liabilities   21,329     10,610   Total liabilities 4,101,539 4,648,169   Shareholders' equity   317,975     320,538   $ 4,419,514   $ 4,968,707   Net interest income on tax equivalent basis* $ 26,716 $ 26,861   Tax equivalent adjustment   341   1,811   Net interest income $ 26,375 $ 25,050 Net interest margin * 2.56 % 2.26 %      

* 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, 2016 2015 2015 (dollars in thousands)   Balance in the allowance for loan and lease losses at beginning of period (1) $ 4,400   $ 3,638   $ 3,638     Loans charged-off: SBA non real estate - 9 112 Direct lease financing 20 - 30 SBLOC - - - Other consumer loans   12     52     1,219   Total   32     61     1,361     Recoveries: SBA non real estate - - - Direct lease financing 6 - - Other consumer loans   4     1     23   Total   10     1     23   Net charge-offs 22 60 1,338 Provision charged to operations   -     665     2,100     Balance in allowance for loan and lease losses at end of period $ 4,378   $ 4,243   $ 4,400   Net charge-offs/average loans 0.00 % 0.00 % 0.11 % Net charge-offs/average loans (annualized) 0.01 % 0.02 % 0.11 % 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, 2016 2015 2015 2015 (dollars in thousands)   SBA non real estate $ 71,220 $ 68,887 $ 64,988 $ 62,385 SBA commercial mortgage 120,415 114,029 116,545 84,430 SBA construction   9,736     6,977     5,191     15,181 Total SBA loans 201,371 189,893 186,724 161,996 Direct lease financing 240,670 231,514 223,929 220,559 SBLOC 592,656 575,948 539,240 447,649 Other specialty lending 48,153 48,315 12,119 1,862 Other consumer loans   21,782     23,180     23,502     30,120 1,104,632 1,068,850 985,514 862,186 Unamortized loan fees and costs   9,421     9,227     9,004     8,715 Total loans, net of deferred loan fees and costs $ 1,114,053   $ 1,078,077   $ 994,518   $ 870,901   Small business lending portfolio: March 31, December 31, September 30, March 31, 2016 2015 2015 2015 (dollars in thousands)   SBA loans, including deferred fees and costs 209,605 197,966 194,612 169,721 SBA loans included in HFS   124,763     109,174     86,245     52,219 Total SBA loans $ 334,368   $ 307,140   $ 280,857   $ 221,940           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, 2016 The Bancorp 6.97 % 14.35 % 14.55 % 14.35 % The Bancorp Bank 6.68 % 13.75 % 13.96 % 13.75 % "Well capitalized" institution (under FDIC regulations) 5.00 % 8.00 % 10.00 % 6.50 %   As of December 31, 2015 The Bancorp 7.17 % 14.67 % 14.88 % 14.67 % The Bancorp Bank 6.90 % 13.98 % 14.18 % 13.98 % "Well capitalized" institution (under FDIC regulations) 5.00 % 8.00 % 10.00 % 6.50 %         Three months ended Year ended March 31, December 31, 2016   2015 2015 Selected operating ratios: Return on average assets (annualized) nm 0.02 % 0.29 % Return on average equity (annualized) nm 0.26 % 4.20 % Net interest margin 2.56 % 2.26 % 2.37 % Book value per share $ 8.34 $ 8.53 $ 8.47   March 31, December 31, September 30, March 31, 2016 2015 2015 2015 Asset quality ratios: Nonperforming loans to total loans (2) 0.24 % 0.22 % 0.25 % 0.52 % Nonperforming assets to total assets (2) 0.06 % 0.05 % 0.05 % 0.09 % Allowance for loan and lease losses to total loans 0.39 % 0.41 % 0.42 % 0.49 %   Nonaccrual loans $ 1,908 $ 1,927 $ 2,157 $ 3,744 Other real estate owned   -     -     -     -   Total nonperforming assets $ 1,908   $ 1,927   $ 2,157   $ 3,744     Loans 90 days past due still accruing interest $ 787   $ 403   $ 294   $ 769     (2) 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, 2016 2015 2015 2015 (in thousands) Gross dollar volume (GDV) (1): Prepaid card GDV $ 13,512,318   $ 9,839,782   $ 9,465,687   $ 11,712,072     (1) Gross dollar volume represents the total dollar amount spent on prepaid and debit cards issued by The Bancorp.  

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