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 Second Quarter 2013 Financial Results

Wilmington, DE – July 24, 2013 – The Bancorp, Inc. ("Bancorp") (NASDAQ: TBBK), a financial holding company, today reported financial results for the second quarter of 2013.

Net income for the second quarter of 2013 increased to $5.6 million compared to $3.9 million in the second quarter of 2012, an increase of 45%.

Financial Highlights

·	72% increase in adjusted operating earnings, a non GAAP measure, to $18.7 million for the second quarter of 2013 versus $10.8 million for the quarter ended June 30, 2012.

·	25% increase in diluted earnings per share to $0.15 for the second quarter of 2013 versus $0.12 for the second quarter of 2012. The number of shares used in calculating diluted earnings per share increased to 38.0 million from 33.1 million in 2012.

·	41% increase in total quarterly revenues to $48.5 million compared to $34.4 million in second quarter 2012.

·	107% increase in quarterly non-interest income, to $21.9 million compared to $10.6 million in second quarter 2012, excluding security gains and other than temporary impairment charges.

·	63% increase in prepaid card fees, to $11.5 million compared to $7.1 million in second quarter 2012.

13% increase in quarterly net interest income to $23.6 million compared to $20.9 million in second quarter 2012.

Betsy Z. Cohen, Bancorp’s Chief Executive Officer, said, “Our earnings growth in the second quarter was propelled by increases both in net interest and non-interest income. These drivers resulted in growth of 72% in adjusted operating earnings, 45% in net income and 25% in earnings per diluted share. Our efficiency ratio of 61% was improved from 67% a year ago. Our leadership position in the prepaid card industry is a primary vector of growth and related fee income which increased 63% to $11.5 million for the quarter, compared to the prior year quarter. Average deposits for the second quarter, net of terminations, grew 35% and reflected growth in all major deposit categories. At June 30, 2013 our portfolio of loans and securities had grown to $3.1 billion, an increase of $730 million, or 30% over June 30, 2012. Outstanding loans increased 12% over that period. Asset growth within our targeted lending segments – Small Business Administration (SBA), security backed lines of credit and small fleet leasing – contributed disproportionately. Although total loans increased by 12%, SBA loans grew 111%, security backed lines of credit by 22% and small fleet leasing by 23%. Despite the growth, the Company remains well capitalized, with book value per share increasing 8%, from $8.54 at June 30, 2012 to $9.21 at June 30, 2013.”

Financial Results

Bancorp reported net income available to common shareholders for the three months ended June 30, 2013 of $5.6 million, or diluted earnings per share of $0.15, based on 37,974,814 weighted average diluted shares outstanding, compared to net income available to common shareholders of $3.9 million, or diluted earnings per share of $0.12, based on 33,147,791 weighted average diluted shares outstanding, for the three months ended June 30, 2012. Adjusted operating earnings, a non-GAAP measure, increased to $18.7 million for the three months ended June 30, 2013 compared to $10.8 million for the three months ended June 30, 2012. The following is a reconciliation of net income available to common shareholders to adjusted operating earnings, a non-GAAP measure:

	Quarter ended					For the six months ended
	June 30,			June 30,		June 30,			June 30,
	2013			2012		2013			2012

Net income available to common shareholders	$	5,592		$	3,854	$	12,998		$	7,826
Income tax expense		3,262			2,150		7,693			4,377
Gains on sales of investment securities		(476	)		-		(743	)		-
Other than temporary impairment on securities		-			126		20			126
Losses and write-downs on other real estate owned		815			421		1,066			1,872
Provision for loan and lease losses		9,500			4,287		15,000			9,507
Adjusted operating earnings (1)	$	18,693		$	10,838	$	36,034		$	23,708

(1)

As a supplement to GAAP, Bancorp has provided this non-GAAP performance measure. 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 net income calculated pursuant to GAAP.

Conference Call Webcast

You may access the LIVE webcast of Bancorp's Quarterly Earnings Conference Call at 8:00 AM EDT Thursday, July 25, 2013 by clicking on the webcast link on Bancorp's homepage at www.thebancorp.com. Or, you may dial 866.788.0542, access code 92497956. You may listen to the replay of the webcast following the live call on Bancorp's investor relations website or telephonically until Thursday, August 1, 2013 by dialing 888.286.8010, access code 66571819.

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. 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

The Bancorp, Inc.
Financial highlights
(unaudited)
	Three months ended					Six months ended
	June 30,					June 30,
	2013		2012			2013			2012
	(dollars in thousands except per share data)
Condensed income statement
Net interest income	$	23,579	$	20,881		$	46,263		$	41,797
Provision for loan and lease losses		9,500		4,287			15,000			9,507
Non-interest income
Gain on sales of investment securities		476		-			743			-
Other than temporary impairment of investment securities		-		(126	)		(20	)		(126	)
Other non-interest income		21,886		10,575			40,771			22,865
Total non-interest income		22,362		10,449			41,494			22,739
Non-interest expense
Losses and write downs on other real estate owned		815		421			1,066			1,872
Other non-interest expense		26,772		20,618			51,000			40,954
Total non-interest expense		27,587		21,039			52,066			42,826
Income before income tax expense		8,854		6,004			20,691			12,203
Income tax expense		3,262		2,150			7,693			4,377
Net income available to common shareholders	$	5,592	$	3,854		$	12,998		$	7,826

Basic earnings per share	$	0.15	$	0.12		$	0.35		$	0.24

Diluted earnings per share	$	0.15	$	0.12		$	0.34		$	0.24
Weighted average shares - basic		37,343,396		33,101,281			37,317,750			33,099,303
Weighted average shares - diluted		37,974,814		33,147,791			37,877,712			33,114,968


Balance sheet	June 30,			March 31,			December 31,			June 30,
	2013			2013			2012			2012
	(dollars in thousands)
Assets:
Cash and cash equivalents
Cash and due from banks	$	21,560		$	14,108		$	19,982		$	5,560
Interest earning deposits at Federal Reserve Bank		622,989			1,102,217			948,111			692,582
Securities sold under agreements to repurchase		40,240			22,831			-			-
Total cash and cash equivalents		684,789			1,139,156			968,093			698,142

Investment securities, available-for-sale, at fair value		1,021,848			898,653			718,065			582,219
Investment securities, held-to-maturity		95,662			45,064			45,179			17,796
Federal Home Loan Bank & Atlantic Central Bankers Bank stock		3,209			3,094			3,621			4,596
Loans held for sale, at fair value		49,355			28,402			11,341			-
Loans, net of deferred fees and costs		1,967,382			1,968,890			1,902,854			1,804,312
Allowance for loan and lease losses		(40,274	)		(34,883	)		(33,040	)		(31,171	)
Loans, net		1,927,108			1,934,007			1,869,814			1,773,141
Premises and equipment, net		13,709			10,965			10,368			8,694
Accrued interest receivable		12,360			11,521			9,857			9,297
Intangible assets, net		6,503			6,753			7,004			7,504
Other real estate owned		6,308			4,543			4,241			4,919
Deferred tax asset, net		27,613			23,055			22,789			20,716
Other assets		28,031			26,882			29,287			23,178
Total assets	$	3,876,495		$	4,132,095		$	3,699,659		$	3,150,202

Liabilities:
Deposits
Demand and interest checking	$	2,963,170		$	3,197,039		$	2,775,207		$	2,335,960
Savings and money market		469,238			495,001			517,098			456,614
Time deposits		12,502			12,602			12,582			20,619
Time deposits, $100,000 and over		5,747			8,343			8,334			9,104
Total deposits		3,450,657			3,712,985			3,313,221			2,822,297

Securities sold under agreements to repurchase		19,059			16,672			18,548			21,948
Accrued interest payable		95			95			103			127
Subordinated debenture		13,401			13,401			13,401			13,401
Other liabilities		49,091			42,866			17,709			9,555
Total liabilities	$	3,532,303		$	3,786,019		$	3,362,982		$	2,867,328

Shareholders' equity:
Common stock - authorized, 50,000,000 shares of $1.00 par value; 37,462,939 and 33,196,281 shares issued at June 30, 2013 and 2012, respectively		37,463			37,434			37,247			33,201
Treasury stock (100,000 shares)		(866	)		(866	)		(866	)		(866	)
Additional paid-in capital		286,321			285,009			282,708			243,284
Retained earnings (accumulated deficit)		19,993			14,753			7,347			(1,451	)
Accumulated other comprehensive income		1,281			9,746			10,241			8,706
Total shareholders' equity		344,192			346,076			336,677			282,874
Total liabilities and shareholders' equity	$	3,876,495		$	4,132,095		$	3,699,659		$	3,150,202


Average balance sheet and net interest income	Three months ended June 30, 2013								Three months ended June 30, 2012
(dollars in thousands)	Average					Average			Average					Average
Assets:	Balance			Interest		Rate			Balance			Interest		Rate
Interest-earning assets:
Loans net of unearned fees and costs**	$	1,991,622		$	20,774		4.17	%	$	1,780,071		$	19,125		4.30	%
Leases - bank qualified*		13,800			208		6.03	%		13,770			207		6.01	%
Investment securities-taxable		836,299			3,801		1.82	%		435,903			3,371		3.09	%
Investment securities-nontaxable*		206,629			1,342		2.60	%		105,869			1,096		4.14	%
Interest earning deposits at Federal Reserve Bank		841,315			505		0.24	%		954,213			605		0.25	%
Federal funds sold/securities purchased under agreement to resell		33,761			98		1.16	%		-			-
Net interest earning assets		3,923,426			26,728		2.72	%		3,289,826			24,404		2.97	%

Allowance for loan and lease losses		(36,596	)							(32,101	)
Other assets		85,476								126,547
	$	3,972,306							$	3,384,272

Liabilities and Shareholders' Equity:
Deposits:
Demand and interest checking	$	3,083,831		$	1,901		0.25	%	$	2,580,647		$	2,094		0.32	%
Savings and money market		482,722			528		0.44	%		448,571			626		0.56	%
Time		18,310			47		1.03	%		29,862			106		1.42	%
Total deposits		3,584,863			2,476		0.28	%		3,059,080			2,826		0.37	%

Repurchase agreements		17,057			12		0.28	%		22,255			24		0.43	%
Subordinated debt		13,401			118		3.52	%		13,401			217		6.48	%
Total deposits and interest bearing liabilities		3,615,321			2,606		0.29	%		3,094,736			3,067		0.40	%

Other liabilities		9,379								9,551
Total liabilities		3,624,700								3,104,287

Shareholders' equity		347,606								279,985
	$	3,972,306							$	3,384,272
Net interest income on tax equivalent basis*					24,122								21,337

Tax equivalent adjustment					543								456

Net interest income				$	23,579							$	20,881
Net interest margin *							2.46	%							2.59	%

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


Average balance sheet and net interest income	Six months ended June 30, 2013								Six months ended June 30, 2012
(dollars in thousands)	Average					Average			Average					Average
Assets:	Balance			Interest		Rate			Balance			Interest		Rate
Interest-earning assets:
Loans net of unearned fees and costs**	$	1,960,399		$	40,964		4.18	%	$	1,756,910		$	37,948		4.32	%
Leases - bank qualified*		14,096			407		5.77	%		12,105			397		6.56	%
Investment securities-taxable		759,899			7,288		1.92	%		402,949			6,561		3.26	%
Investment securities-nontaxable*		166,648			2,460		2.95	%		101,126			2,161		4.27	%
Interest earning deposits at Federal Reserve Bank		1,091,219			1,343		0.25	%		1,325,250			1,658		0.25	%
Federal funds sold/securities purchased under agreement to resell		27,107			122		0.90	%		-			-
Net interest-earning assets		4,019,368			52,584		2.62	%		3,598,340			48,725		2.71	%

Allowance for loan and lease losses		(35,722	)							(31,388	)
Other assets		85,102								179,115
	$	4,068,748							$	3,746,067

Liabilities and Shareholders' Equity:
Deposits:
Demand and interest checking	$	3,170,543		$	3,767		0.24	%	$	2,936,649		$	4,088		0.28	%
Savings and money market		494,383			1,106		0.45	%		453,213			1,257		0.55	%
Time		19,607			101		1.03	%		30,608			203		1.33	%
Total deposits		3,684,533			4,974		0.27	%		3,420,470			5,548		0.32	%

Repurchase agreements		16,413			26		0.32	%		25,257			51		0.40	%
Subordinated debt		13,401			318		4.75	%		13,401			434		6.48	%
Total deposits and interest bearing liabilities		3,714,347			5,318		0.29	%		3,459,128			6,033		0.35	%

Other liabilities		10,455								10,078
Total liabilities		3,724,802								3,469,206

Shareholders' equity		343,946								276,861
	$	4,068,748							$	3,746,067
Net interest income on tax equivalent basis*					47,266								42,692

Tax equivalent adjustment					1,003								895

Net interest income				$	46,263							$	41,797
Net interest margin *							2.35	%							2.37	%

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

Allowance for loan and lease losses:	Six months ended						For year ended
	June 30,			June 30,			December 31,
	2013			2012			2012
	(dollars in thousands)

Balance in the allowance for loan and lease losses at beginning of period	$	33,040		$	29,568		$	29,568

Loans charged-off:
Commercial		3,733			4,099			9,508
Construction		4,382			4,838			11,318
Lease financing		-			87			87
Residential mortgage		54			-			-
Consumer		186			258			340
Total		8,355			9,282			21,253

Recoveries:
Commercial		51			1,272			2,093
Construction		481			9			96
Lease financing		8			12			13
Residential mortgage		-			85			85
Consumer		49			-			-
Total		589			1,378			2,287
Net charge-offs		7,766			7,904			18,966
Provision charged to operations		15,000			9,507			22,438

Balance in allowance for loan and lease losses at end of period	$	40,274		$	31,171		$	33,040
Net charge-offs/average loans		0.39	%		0.45	%		1.04	%
Net charge-offs/average loans (annualized)		0.79	%		0.89	%		1.04	%

Loan portfolio:	June 30,		March 31,		December 31,		June 30,
	2013		2013		2012		2012
	(dollars in thousands)

Commercial	$	481,537	$	477,690	$	470,109	$	441,167
Commercial mortgage (1)		651,034		673,916		617,069		596,639
Construction		266,911		263,579		258,684		269,636
Total commercial loans		1,399,482		1,415,185		1,345,862		1,307,442
Direct lease financing		172,250		157,508		156,697		140,012
Residential mortgage		93,960		94,238		97,717		97,226
Consumer loans and others		295,576		296,370		296,915		255,769
		1,961,268		1,963,301		1,897,191		1,800,449
Unamortized loan fees and costs		6,114		5,589		5,663		3,863
Total loans, net of deferred loan fees and costs	$	1,967,382	$	1,968,890	$	1,902,854	$	1,804,312

Supplemental loan data:
Construction 1-4 family	$	64,144	$	65,669	$	60,343	$	79,546
Commercial construction, acquisition and development		202,767		197,910		198,341		190,090
	$	266,911	$	263,579	$	258,684	$	269,636
(1) At June 30, 2013 our owner-occupied loans amounted to $173 million, or 26.3% 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 June 30, 2013
Bancorp		8.83	%		14.47	%		15.73	%
The Bancorp Bank		6.83	%		11.23	%		12.48	%
"Well capitalized" institution (under FDIC regulations)		5.00	%		6.00	%		10.00	%

As of December 31, 2012
Bancorp		10.00	%		16.39	%		17.64	%
The Bancorp Bank		7.25	%		11.91	%		13.16	%
"Well capitalized" institution (under FDIC regulations)		5.00	%		6.00	%		10.00	%

	Three months ended						Six months ended
	June 30,						June 30,
	2013			2012			2013			2012
Selected operating ratios:
Return on average assets (annualized)		0.56	%		0.46	%		0.64	%		0.42	%
Return on average equity (annualized)		6.45	%		5.54	%		7.62	%		5.72	%
Net interest margin		2.46	%		2.59	%		2.35	%		2.37	%
Efficiency ratio (1)		60.68	%		67.15	%		59.84	%		66.36	%
Book value per share	$	9.21		$	8.54		$	9.21		$	8.54

	June 30,			March 31,			December 31,			June 30,
	2013			2013			2012			2012
Asset quality ratios:
Nonperforming loans to total loans (2)		2.16	%		1.80	%		1.56	%		1.55	%
Nonperforming assets to total assets (2)		1.26	%		0.97	%		0.92	%		1.04	%
Allowance for loan and lease losses to total loans		2.05	%		1.77	%		1.74	%		1.73	%

Nonaccrual loans	$	41,743		$	34,063		$	25,190		$	24,815
Other real estate owned		6,308			4,543			4,241			4,919
Total nonperforming assets	$	48,051		$	38,606		$	29,431		$	29,734

Loans 90 days past due still accruing interest	$	755		$	1,291		$	4,435		$	3,105

(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 the efficiency ratio to measure overhead as a percentage of revenue. Other companies may calculate the efficiency ratio 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 net income calculated pursuant to GAAP.

	Three months ended						Six months ended
	June 30,						June 30,
	2013			2012			2013			2012
Reconciliation of the efficiency ratio, a non-GAAP measure:
Non-interest expense (a)	$	27,587		$	21,039		$	52,066		$	42,826

Net interest income		23,579			20,881			46,263			41,797
Non-interest income		22,362			10,449			41,494			22,739
Less: Gain on sale of securities		(476	)		-			(743	)		-
Adjusted net interest and non-interest income (b)	$	45,465		$	31,330		$	87,014		$	64,536

(a) divided by (b)		60.68	%		67.15	%		59.84	%		66.36	%

(2) Nonperforming loan and asset ratios include nonaccrual loans and loans 90 days past due still accruing interest.

Bancorp, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - July 24, 2013

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