Bancorp, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - THE BANCORP, INC. FORM 8-K - Bancorp, Inc.	bancorp8k.htm

Exhibit 99.1

The Bancorp, Inc. Reports Third Quarter 2012 Financial Results

Wilmington, DE – October 23, 2012 – The Bancorp, Inc. ("Bancorp") (NASDAQ: TBBK), a financial holding company, today reported financial results for the third quarter of 2012.

Net income for the third quarter of 2012 increased to $3.6 million compared to $2.3 million in the third quarter of 2011, an increase of 56%.

Financial Highlights

·	21% increase in total revenues to $35.6 million compared to $29.4 million in third quarter 2011.

57% increase in diluted earnings per share to $0.11 for the third quarter of 2012 versus $0.07 for the third quarter of 2011. Diluted earnings per share amounted to $0.34 for the nine months ended September 30, 2012 compared to diluted earnings per share of $0.18 for the nine months ended September 30, 2011.

·	85% increase in quarterly prepaid card fees to $7.5 million compared to $4.0 million in third quarter 2011.

·	67% increase in quarterly non-interest income (including prepaid card fees) to $11.1 million compared to $6.7 million in third quarter 2011 excluding security gains and other than temporary impairment (OTTI).

·	10% increase in quarterly net interest income to $21.6 million compared to $19.6 million in third quarter 2011. On a linked quarter basis, net interest income grew at an annualized 13% rate, primarily reflecting higher loan income.

·	The linked quarter net interest margin increased to 2.90% from 2.59%.

·	At September 30, 2012 the portfolio of loans and securities had grown to $2.5 billion, an increase of $372 million, or 17% over third quarter 2011. Outstanding loans increased 9% over that period.

·	Average deposits for third quarter 2012 totaled $2.8 billion, an increase of $295 million or 12% over 2011, reflecting growth in all major deposit categories. The interest paid on deposits between those respective periods decreased to 0.37% from 0.45%.

Betsy Z. Cohen, Bancorp’s Chief Executive Officer, said, “Third quarter 2012 saw a continuation in our earnings growth as a result of significant increases in both our non-interest and net interest income. Adjusted operating earnings, a non-GAAP measure, increased to $11.3 million, a $2.8 million, or 32% increase over the comparable prior year period. Our position as a leader in the prepaid card space continues to drive the increase in non-interest income. On the asset side, we grew our loans 9% over the year in a difficult lending environment. We continue to target what we believe to be lower risk assets including Small Business Administration (SBA) loans, security backed lines of credit and vehicle fleet leasing. Consumer loans, primarily security backed lines of credit, grew 35% over the past year, to $276 million. Due to the historically demonstrated strength of related collateral, losses on security backed loans have been virtually non-existent. The Company is well capitalized, and book value per share increased from $8.09 at September 30, 2011 to $8.73 at September 30, 2012, or an increase of 8%.”

Financial Results

Bancorp reported net income available to common shareholders for the three months ended September 30, 2012 of $3.6 million or diluted earnings per share of $0.11, based on 33,172,852 weighted average shares outstanding, compared to net income available to common shareholders of $2.3 million or diluted earnings per share of $0.07, based on 33,203,662 weighted average shares outstanding, for the three months ended September 30, 2011. Adjusted operating earnings, a non-GAAP measure, increased to $11.3 million for the three months ended September 30, 2012 compared to $8.6 million for the three months ended September 30, 2011. The following is a reconciliation of adjusted operating earnings to net income available to common shareholders (for the three month period):

	Quarter ended						Nine months ended
	September 30,			September 30,			September 30,			September 30,
	2012			2011			2012			2011

Net income available to common shareholders	$	3,561		$	2,282		$	11,387		$	5,630
Income tax expense		1,795			1,209			6,172			2,929
Gains on sales of investment securities		(107	)		(20	)		(107	)		(623	)
Other than temporary impairment in securities		-			-			126			75
Losses and writedowns on other real estate owned		533			64			2,405			555
Provision for loan and lease losses		5,540			5,019			15,047			16,654
Adjusted operating earnings (1)	$	11,322		$	8,554		$	35,030		$	25,220

(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. Management utilizes adjusted operating earnings to measure the combined impact of changes in net interest income, non-interest income and certain other expenses. Other companies may calculate adjusted operating 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 September 30, 2012, Bancorp's total assets amounted to $3.1 billion, a decrease of $280 million or 8% over total assets at September 30, 2011. During the year ended September 30, 2012, Bancorp terminated two large balance deposit relationships which totaled $1.1 billion at September 30, 2011. The relationships were terminated to eliminate certain seasonal deposit fluctuations and reduce interest expense. During that period, investments increased to $658 million, an increase of $223 million or 51%; loans increased to $1.9 billion, an increase of $149 million or 9%; and deposits decreased to $2.8 billion, a decrease of $292 million or 10%.

Conference Call Webcast

You may access the LIVE webcast of Bancorp's Quarterly Earnings Conference Call at 8:30 AM EDT Wednesday, October 24, 2012 by clicking on the webcast link on Bancorp's homepage at www.thebancorp.com. Or, you may dial 866.700.7101, access code 85269151. You may listen to the replay of the webcast following the live call on Bancorp's investor relations website or telephonically until Wednesday, October 31, 2012 by dialing 888.286.8010, access code 85079916.

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 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

aviroslav@thebancorp.com

	Three months ended				Nine months ended
	September 30,				September 30,
	2012		2011		2012			2011

	(dollars in thousands except per share data)
Condensed income statement
Net interest income	$	21,561	$	19,595	$	63,358		$	56,050
Provision for loan and lease losses		5,540		5,019		15,047			16,654
Non-interest income
Gain on sales of investment securities		107		20		107			623
Other than temporary impairment of investment securities		-		-		(126	)		(75	)
Other non-interest income		11,126		6,653		33,991			21,595
Total non-interest income		11,233		6,673		33,972			22,143
Non-interest expense
Losses and write downs on other real estate owned		533		64		2,405			555
Other non-interest expense		21,365		17,694		62,319			52,425
Total non-interest expense		21,898		17,758		64,724			52,980
Net income before income tax expense		5,356		3,491		17,559			8,559
Income tax expense		1,795		1,209		6,172			2,929
Net income available to common shareholders	$	3,561	$	2,282	$	11,387		$	5,630

Basic earnings per share	$	0.11	$	0.07	$	0.34		$	0.18

Diluted earnings per share	$	0.11	$	0.07	$	0.34		$	0.18
Weighted average shares - basic		33,105,194		33,196,281		33,101,281			31,500,347
Weighted average shares - diluted		33,172,852		33,203,662		33,133,307			31,506,808

Balance sheet	September 30,			June 30,			December 31,			September 30,
	2012			2012			2011			2011
	(dollars in thousands)
Assets:
Cash and cash equivalents
Cash and due from banks	$	4,648		$	5,560		$	96,228		$	259,116
Interest earning deposits at Federal Reserve Bank		540,010			692,582			652,946			932,152
Total cash and cash equivalents		544,658			698,142			749,174			1,191,268

Investment securities, available-for-sale, at fair value		634,894			582,219			448,204			416,362
Investment securities, held-to-maturity		22,707			17,796			18,044			18,095
Federal Home Loan Bank & Atlantic Central Bankers Bank stock		4,160			4,596			5,088			5,354
Loans held for sale, at fair value		7,970			-			-			-
Loans, net of deferred costs		1,856,992			1,804,312			1,744,828			1,715,648
Allowance for loan and lease losses		(33,071	)		(31,171	)		(29,568	)		(27,671	)
Loans, net		1,823,921			1,773,141			1,715,260			1,687,977
Premises and equipment, net		9,802			8,694			8,358			8,307
Accrued interest receivable		10,061			9,297			8,476			8,541
Intangible assets, net		7,254			7,504			8,004			8,254
Other real estate owned		3,065			4,919			7,405			6,415
Deferred tax asset, net		19,708			20,716			21,941			19,902
Other assets		24,925			23,178			20,727			22,538
Total assets	$	3,113,125		$	3,150,202		$	3,010,681		$	3,393,013

Liabilities:
Deposits
Demand and interest checking	$	2,300,025		$	2,335,960		$	2,192,938		$	2,649,005
Savings and money market		459,725			456,614			454,343			388,603
Time deposits		12,606			20,619			25,528			25,552
Time deposits, $100,000 and over		8,819			9,104			9,742			10,341
Total deposits		2,781,175			2,822,297			2,682,551			3,073,501

Securities sold under agreements to repurchase		18,802			21,948			33,177			25,057
Accrued interest payable		100			127			123			113
Subordinated debenture		13,401			13,401			13,401			13,401
Other liabilities		10,662			9,555			9,950			12,262
Total liabilities	$	2,824,140		$	2,867,328		$	2,739,202		$	3,124,334

Shareholders' equity:
Common stock - authorized, 50,000,000 shares of $1.00 par value; 33,208,781 and 33,196,281 shares issued at September 30, 2012 and 2011, respectively		33,209			33,201			33,196			33,196
Treasury stock (100,000 shares)		(866	)		(866	)		(866	)		-
Additional paid-in capital		243,954			243,284			241,997			241,473
Retained earnings (accumulated deficit)		2,110			(1,451	)		(9,277	)		(12,565	)
Accumulated other comprehensive gain		10,578			8,706			6,429			6,575
Total shareholders' equity		288,985			282,874			271,479			268,679

Total liabilities and shareholders' equity	$	3,113,125		$	3,150,202		$	3,010,681		$	3,393,013

Average balance sheet and net interest income	Three months ended September 30, 2012								Three months ended September 30, 2011
(dollars in thousands)	Average					Average			Average					Average
Assets:	Balance			Interest		Rate			Balance			Interest		Rate
Interest-earning assets:
Loans net of unearned discount **	$	1,827,348		$	19,646		4.30	%	$	1,693,500		$	18,927		4.47	%
Leases - bank qualified*		15,012			217		5.78	%		5,328			128		9.61	%
Investment securities-taxable		519,377			3,507		2.70	%		314,800			2,732		3.47	%
Investment securities-nontaxable*		105,918			1,091		4.12	%		70,049			1,003		5.73	%
Interest earning deposits at Federal Reserve Bank		570,667			356		0.25	%		456,260			296		0.26	%
Net interest earning assets		3,038,322			24,817		3.27	%		2,539,937			23,086		3.64	%

Allowance for loan and lease losses		(32,385	)							(28,415	)
Other assets		78,241								258,610
	$	3,084,178							$	2,770,132

Liabilities and Shareholders' Equity:
Deposits:
Demand and interest checking	$	2,296,193		$	1,884		0.33	%	$	2,078,118		$	1,993		0.38	%
Savings and money market		436,484			574		0.53	%		354,189			696		0.79	%
Time		24,042			98		1.63	%		29,690			94		1.27	%
Total deposits		2,756,719			2,556		0.37	%		2,461,997			2,783		0.45	%

Repurchase agreements		20,489			24		0.47	%		23,271			96		1.65	%
Subordinated debt		13,401			218		6.51	%		13,401			216		6.45	%
Total deposits and interest bearing liabilities		2,790,609			2,798		0.40	%		2,498,669			3,095		0.50	%

Other liabilities		8,462								7,757
Total liabilities		2,799,071								2,506,426

Shareholders' equity		285,107								263,706
	$	3,084,178							$	2,770,132
Net interest income on tax equivalent basis*				$	22,019							$	19,991

Tax equivalent adjustment					458								396

Net interest income				$	21,561							$	19,595
Net interest margin *							2.90	%							3.15	%

* Full taxable equivalent basis, using a 35% statutory tax rate.
** Includes loans held for sale.

	Nine months ended September 30,
	2012								2011
	Average					Average			Average					Average
	Balance			Interest		Rate			Balance			Interest		Rate
				(dollars in thousands)								(dollars in thousands)
Assets:
Interest earning assets:
Loans net of unearned discount **	$	1,780,565		$	57,594		4.31	%	$	1,655,013		$	55,252		4.45	%
Leases - bank qualified*		13,081			614		6.26	%		4,174			302		9.65	%
Investment securities-taxable		442,043			10,068		3.04	%		253,507			6,629		3.49	%
Investment securities-nontaxable*		102,736			3,252		4.22	%		74,560			3,066		5.48	%
Interest earning deposits at Federal Reserve Bank		1,073,305			2,014		0.25	%		558,333			1,041		0.25	%
Net interest earning assets		3,411,730			73,542		2.87	%		2,545,587			66,290		3.47	%

Allowance for loan and lease losses		(31,728	)							(26,597	)
Other assets		143,839								276,095
	$	3,523,841							$	2,795,085

Liabilities and shareholders' equity:
Deposits:
Demand and interest checking	$	2,721,620		$	5,971		0.29	%	$	2,138,525		$	5,991		0.37	%
Savings and money market		447,596			1,832		0.55	%		337,422			2,006		0.79	%
Time		28,403			301		1.41	%		29,608			241		1.09	%
Total deposits		3,197,619			8,104		0.34	%		2,505,555			8,238		0.44	%

Short term borrowings		-			-		0.00	%		996			3		0.40	%
Repurchase agreements		23,656			75		0.42	%		20,067			173		1.15	%
Subordinated debt		13,401			652		6.49	%		13,401			647		6.44	%
Total deposits and interest bearing liabilities		3,234,676			8,831		0.36	%		2,540,019			9,061		0.48	%

Other liabilities		9,526								8,944
Total liabilities		3,244,202								2,548,963

Shareholders' equity		279,639								246,122
	$	3,523,841							$	2,795,085

Net interest income on tax equivalent basis *				$	64,711							$	57,229

Tax equivalent adjustment					1,353								1,179

Net interest income				$	63,358							$	56,050

Net interest margin *							2.53	%							3.00	%

* Full taxable equivalent basis, using a 35% statutory tax rate.
** Includes loans held for sale.

Allowance for loan and lease losses:	Nine months ended
	September 30,			September 30,
	2012			2011
	(dollars in thousands)

Balance in the allowance for loan and lease losses at beginning of period	$	29,568		$	24,063

Loans charged-off:
Commercial		5,953			7,371
Construction		6,931			3,003
Lease financing		87			-
Residential mortgage		-			1,876
Consumer		299			815
Total		13,270			13,065

Recoveries:
Commercial		1,533			16
Construction		95			3
Lease financing		13			-
Residential mortgage		85			-
Consumer		-			-
Total		1,726			19
Net charge-offs		11,544			13,046
Provision charged to operations		15,047			16,654

Balance in allowance for loan and lease losses at end of period	$	33,071		$	27,671
Net charge-offs/average loans		0.64	%		0.79	%


Loan portfolio:	September 30,			June 30,			December 31,		September 30,
	2012			2012			2011		2011
	(dollars in thousands)

Commercial	$	453,444		$	441,167		$	450,411	$	461,679
Commercial mortgage (1)		614,410			596,639			609,487		577,237
Construction		263,726			269,636			246,611		242,806
Total commercial loans		1,331,580			1,307,442			1,306,509		1,281,722
Direct lease financing		146,728			140,012			129,682		129,400
Residential mortgage		97,589			97,226			96,110		96,139
Consumer loans and others		276,427			255,769			209,041		205,243
		1,852,324			1,800,449			1,741,342		1,712,504
Unamortized loan costs		4,668			3,863			3,486		3,144
Total loans, net of deferred loan costs	$	1,856,992		$	1,804,312		$	1,744,828	$	1,715,648

Supplemental loan data:
Construction 1-4 family	$	71,599		$	79,546		$	85,189	$	91,783
Commercial construction, acquisition and development		192,127			190,090			161,422		151,023
	$	263,726		$	269,636		$	246,611	$	242,806
(1) At September 30, 2012 our owner-occupied loans amounted to $157 million, or 25.6% of commercial mortgages.

Capital Ratios

	Tier 1 capital			Tier 1 capital			Total capital
	to average assets			to risk-weighted assets			to risk-weighted assets

As of September 30, 2012
The Company		9.20	%		14.51	%		15.77	%
The Bancorp Bank		7.58	%		11.98	%		13.24	%
"Well capitalized" institution (under FDIC regulations)		5.00	%		6.00	%		10.00	%

As of December 31, 2011
The Company		8.69	%		14.64	%		15.89	%
The Bancorp Bank		6.13	%		10.34	%		11.60	%
"Well capitalized" institution (under FDIC regulations)		5.00	%		6.00	%		10.00	%

	Three months ended						Nine months ended
	September 30,						September 30,
	2012			2011			2012			2011
Selected operating ratios:
Return on average assets		0.46	%		0.33	%		0.43	%		0.27	%
Return on average equity		4.97	%		3.43	%		5.44	%		3.06	%
Net interest margin		2.90	%		3.15	%		2.53	%		3.00	%
Efficiency ratio		66.99	%		67.65	%		66.49	%		68.23	%
Book value per share	$	8.73		$	8.09		$	8.73		$	8.09




	September 30,			June 30,			December 31,			September 30,
	2012			2012			2011			2011
Asset quality ratios:
Nonperforming loans to total loans (1)		1.63	%		1.55	%		1.24	%		1.33	%
Nonperforming assets to total assets (1)		1.07	%		1.04	%		0.97	%		0.86	%
Allowance for loan and lease losses to total loans		1.78	%		1.73	%		1.69	%		1.61	%

Nonaccrual loans	$	26,454		$	24,815		$	17,587		$	17,201
Other real estate owned		3,065			4,919			7,405			6,415
Total nonperforming assets	$	29,519		$	29,734		$	24,992		$	23,616

Loans 90 days past due still accruing interest	$	3,861		$	3,105		$	4,101		$	5,550
(1) Nonperforming loans are defined as nonaccrual loans and restructured loans. Loans 90 days past due and still accruing interest are also included in these ratios.

Bancorp, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - October 23, 2012

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Bancorp, Inc. Reports