The Bancorp, Inc. (TBBK) 8-K The Bancorp, Inc. Reports Third Quarter 2011 Financial Results

Exhibit 99.1

The Bancorp, Inc. Reports Third Quarter 2011 Financial Results

Wilmington, Delaware – October 20, 2011 – The Bancorp, Inc. ("Bancorp") (NASDAQ: TBBK), a financial holding company, today reported results for the quarter ended September 30, 2011.

Financial Highlights

-   Core operating earnings for third quarter 2011 increased by 40% to $8.6 million over third quarter 2010. For those respective periods, GAAP diluted earnings per share increased to $0.07 from $0.02 based on 33.2 million and 26.6 million shares outstanding respectively.  For the nine month period ended September 30, 2011 diluted earnings per share amounted to $0.18 compared to a loss per share of $0.12 in the comparable prior year period.

Key factors driving these results were:

-   Tax equivalent net interest income increased 15% in third quarter 2011 to $19.9 million from $17.3 million in third quarter 2010.

-   The provision for loan and lease losses increased $1.6 million year to date, over the prior year to date but decreased $1.9 million from the quarter ended June 30, 2011.

-   Year to date prepaid card fee income increased 62% to $13.2 million from $8.1 million in 2010, reflecting a 45% increase in third quarter 2011 over third quarter 2010.

-   Year to date non-interest income, excluding security gains and OTTI but including prepaid card fee income, increased 53% to $21.6 million compared to $14.2 million in 2010, reflecting a 35% increase in third quarter 2011 over third quarter 2010.

-   At September 30, 2011 the portfolio of loans and securities had grown to $2.2 billion, an increase of $294 million, or 16% over the prior year. Outstanding loans increased 8% year over year.

-   Year to date average deposits for 2011 totaled $2.5 billion, an increase of $525 million or 27% over 2010, reflecting a 20% increase in third quarter 2011 over third quarter 2010. The interest paid on deposits between those respective periods decreased to 0.45% from 0.68%.

Betsy Z. Cohen, Bancorp’s Chief Executive Officer, said, “The third quarter saw a  continuation of the growth in operating leverage as expressed by the 40% increase in core operating earnings and the 5.5 point decrease or 8% improvement in the efficiency ratio.  Loans and securities grew by an aggregate of 16% over the prior year including growth in our SBA loan initiative and our pipeline for new SBA loans continues to increase. Another initiative, vehicle leasing, also exhibited strong growth of 25% on a year over year basis. These are areas in which we are comfortable in a difficult lending environment.  Our focus on increasing non-interest income is also evident, especially for prepaid cards for which fee income increased 62% on a year to date basis over the prior year. Our positioning as a leader in providing services in the prepaid card space continues to drive the increase.  Book value per share increased from $7.69 at September 30, 2010 to $8.09, or an increase of 5%, while outstanding shares increased to 33 million from 26 million.”

Financial Results

Bancorp reported net income available to common shareholders for the three months ended September 30, 2011 of $2.3 million or diluted earnings per share of $0.07, based on 33,203,662weighted average shares outstanding, compared to net income available to common shareholders of $588,000 or diluted earnings per share of $0.02, based on 26,569,565weighted average shares outstanding, for the three months ended September 30, 2010.  Core operating earnings, a non-GAAP measure, increased to $8.6 million for the three months ended September 30, 2011 compared to $6.1 million for the three months ended September 30, 2010.  The following is a reconciliation of core operating earnings to net income available to common shareholders (for the three month period):

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	September 30,			September 30,
	2011			2010
Net income available to common shareholders	$	2,282		$	588
Income tax expense		1,209			156
Gains on sales of investment securities		(20	)		(2	)
Other than temporary impairment in securities		-			135
Losses on other real estate owned		64			22
Provision for loan and lease losses and other credit costs		5,019			5,219
Core operating earnings (1)	$	8,554		$	6,118

(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 core operating earnings to measure the combined impact of changes in net interest income, non-interest income and certain other expenses.  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.

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 September 30, 2011
The Company		9.60	%		14.90	%		16.16	%
The Bancorp Bank		6.76	%		10.52	%		11.77	%
"Well capitalized" institution (under FDIC regulations)		5.00	%		6.00	%		10.00	%
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	%

Balance Sheet Summary

At September 30, 2011, Bancorp's total assets were $3.4 billion, an increase of $733 million or 28% over total assets at September 30, 2010. During that period, investments increased to $440 million, an increase of $169 million or 62%; loans increased to $1.7 billion, an increase of $125 million or 8%; and deposits increased to $3.1 billion, an increase of $651 million or 27%. Total assets increased compared to June 30, 2011, primarily as a result of seasonal deposit variations.

Conference Call Webcast

You may access the LIVE webcast of Bancorp's Quarterly Earnings Conference Call at 8:30 AM EDT Friday, October 21, 2011 by clicking on the webcast link on Bancorp's homepage at www.thebancorp.com. Or, you may dial 888.396.2369 using access code 74604081.  You may listen to the replay of the webcast following the live call on Bancorp's investor relations website or telephonically until Friday, October 28, 2011 by dialing 888.286.8010, access code 91908919.

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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

andres.viroslav@thebancorp.com

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The Bancorp, Inc.
Financial highlights
(unaudited)
	Three months ended					Nine months ended
	September 30,					September 30,
	2011		2010			2011			2010
	(dollars in thousands except per share data)
Condensed income statement
Net interest income	$	19,595	$	17,050		$	56,050		$	50,019
Provision for loan and lease losses		5,019		5,121			16,654			15,075
Non-interest income
Gain on sales of investment securities		20		2			623			1,221
Other than temporary impairment of investment securities		-		(135	)		(75	)		(135	)
Other non-interest income		6,653		4,918			21,595			14,152
Total non-interest income		6,673		4,785			22,143			15,238
Non-interest expense
Loss on other real estate owned		64		22			555			22
Other non-interest expense		17,694		15,948			52,425			45,393
Total non-interest expense		17,758		15,970			52,980			45,415
Net income before income tax expense		3,491		744			8,559			4,767
Income tax expense		1,209		156			2,929			1,586
Net income		2,282		588			5,630			3,181
Less preferred stock dividends		-		-			-			(433	)
Less preferred stock accretion		-		-			-			(5,809	)
Net income (loss) available to common shareholders	$	2,282	$	588		$	5,630		$	(3,061	)
Basic earnings (loss) per share	$	0.07	$	0.02		$	0.18		$	(0.12	)
Diluted earnings (loss) per share	$	0.07	$	0.02		$	0.18		$	(0.12	)
Weighted average shares - basic		33,196,281		26,181,281			31,500,347			26,181,281
Weighted average shares - diluted		33,203,662		26,569,565			31,506,808			26,181,281

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Balance sheet	September 30,			June 30,			December 31,			September 30,
	2011			2011			2010			2010
	(dollars in thousands)
Assets:
Cash and cash equivalents
Cash and due from banks	$	259,116		$	168,957		$	157,411		$	164,948
Interest bearing deposits		932,152			199,866			314,908			584,857
Total cash and cash equivalents		1,191,268			368,823			472,319			749,805
Investment securities, available-for-sale, at fair value		421,716			353,099			231,165			249,342
Investment securities, held-to-maturity		18,095			18,102			21,364			21,354
Loans, net of deferred costs		1,715,648			1,678,660			1,619,195			1,590,507
Allowance for loan and lease losses		(27,671	)		(27,685	)		(24,063	)		(21,798	)
Loans, net of deferred costs		1,687,977			1,650,975			1,595,132			1,568,709
Premises and equipment, net		8,307			8,296			8,767			8,602
Accrued interest receivable		8,541			7,839			8,878			8,396
Intangible assets, net		8,254			8,504			9,005			9,255
Other real estate owned		6,415			3,764			2,115			225
Deferred tax asset, net		19,902			21,960			24,365			19,434
Other assets		22,538			24,477			22,613			24,554
Total assets	$	3,393,013		$	2,465,839		$	2,395,723		$	2,659,676
Liabilities:
Deposits
Demand (non-interest bearing)	$	1,866,259		$	1,073,228		$	945,605		$	1,402,538
Savings, money market and interest checking		1,171,349			1,076,654			975,973			1,001,959
Time deposits		25,552			1,394			90,862			9,218
Time deposits, $100,000 and over		10,341			11,427			11,657			8,672
Total deposits		3,073,501			2,162,703			2,024,097			2,422,387
Securities sold under agreements to repurchase		25,057			20,258			14,383			9,429
Short-term borrowings		-			-			87,000			-
Federal funds purchased		-			-			49,000			-
Accrued interest payable		113			131			124			109
Subordinated debenture		13,401			13,401			13,401			13,401
Other liabilities		12,262			7,109			8,812			12,918
Total liabilities	$	3,124,334		$	2,203,602		$	2,196,817		$	2,458,244
Shareholders' equity:
Common stock - authorized, 50,000,000 shares of $1.00 par value; 33,196,281 and 26,181,281 shares issued and outstanding at September 30, 2011 and  2010, respectively		33,196			33,196			26,181			26,181
Additional paid-in capital		241,473			241,011			192,711			192,492
Accumulated deficit		(12,565	)		(14,847	)		(18,195	)		(20,236	)
Accumulated other comprehensive (loss) gain		6,575			2,877			(1,791	)		2,995
Total shareholders' equity		268,679			262,237			198,906			201,432
Total liabilities and shareholders' equity	$	3,393,013		$	2,465,839		$	2,395,723		$	2,659,676

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Average balance sheet and net interest income	Three months ended September 30, 2011								Three months ended September 30, 2010
(dollars in thousands)	Average					Average			Average					Average
Assets:	Balance			Interest		Rate			Balance			Interest		Rate
Interest-earning assets:
Loans net of unearned discount	$	1,693,500		$	18,927		4.47	%	$	1,581,924		$	18,406		4.65	%
Leases - bank qualified*		5,328			128		9.61	%		1,284			14		4.36	%
Investment securities-taxable		320,239			2,732		3.41	%		159,617			1,641		4.11	%
Investment securities-nontaxable*		70,049			1,003		5.73	%		55,819			784		5.62	%
Interest earning deposits at Federal Reserve Bank		456,260			296		0.26	%		325,513			176		0.22	%
Net interest-earning assets		2,545,376			23,086		3.63	%		2,124,157			21,021		3.96	%
Allowance for loan and lease losses		(28,415	)							(23,003	)
Other assets		253,171								198,534
	$	2,770,132							$	2,299,688
Liabilities and Shareholders' Equity:
Deposits:
Demand (non-interest bearing)**	$	1,321,031		$	314		0.10	%	$	992,474		$	395		0.16	%
Interest bearing deposits
Interest checking		757,087			1,553		0.82	%		660,094			2,055		1.25	%
Savings and money market		354,189			822		0.93	%		294,171			878		1.19	%
Time		29,690			94		1.27	%		105,197			142		0.54	%
Total interest bearing deposits		1,140,966			2,469		0.87	%		1,059,462			3,075		1.16	%
Total deposits		2,461,997			2,783		0.45	%		2,051,936			3,470		0.68	%
Short-term borrowings		-			-		0.00	%		11,576			17		0.59	%
Repurchase agreements		23,271			96		1.65	%		9,424			5		0.21	%
Subordinated debt		13,401			216		6.45	%		13,401			218		6.51	%
Net interest bearing liabilities		1,177,638			2,781		0.94	%		1,093,863			3,315		1.21	%
Total deposits and interest bearing liabilities		2,498,669			3,095		0.50	%		2,086,337			3,710		0.71	%
Other liabilities		7,757								9,617
Total liabilities		2,506,426								2,095,954
Shareholders' equity		263,706								203,734
	$	2,770,132							$	2,299,688
Net interest income on tax equivalent basis*				$	19,991							$	17,311
Tax equivalent adjustment					396								261
Net interest income				$	19,595							$	17,050
Net interest margin *							3.14	%							3.26	%

* Full taxable equivalent basis to be comparable to the interest income of all other categories, using a 35% statutory tax rate

** Interest includes fees paid to affinity groups.

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Average balance sheet and net interest income	Nine months ended September 30, 2011								Nine months ended September 30, 2010
(Dollars in thousands)	Average					Average			Average					Average
Assets:	Balance			Interest		Rate			Balance			Interest		Rate
Interest-earning assets:
Loans net of unearned discount	$	1,655,013		$	55,252		4.45	%	$	1,557,950		$	54,693		4.68	%
Leases - bank qualified*		4,174			302		9.65	%		497			15		4.02	%
Investment securities-taxable		259,301			6,629		3.41	%		154,632			4,651		4.01	%
Investment securities-nontaxable*		74,560			3,066		5.48	%		39,649			1,890		6.36	%
Interest earning deposits at Federal Reserve Bank		558,333			1,041		0.25	%		326,562			610		0.25	%
Net interest-earning assets		2,551,381			66,290		3.46	%		2,079,290			61,859		3.97	%
Allowance for loan and lease losses		(26,597	)							(21,335	)
Other assets		270,301								182,135
	$	2,795,085							$	2,240,090
Liabilities and Shareholders' Equity:
Deposits:
Demand (non-interest bearing)**	$	1,396,438		$	1,047		0.10	%	$	982,437		$	894		0.12	%
Interest bearing deposits
Interest checking		742,087			4,536		0.81	%		601,011			6,075		1.35	%
Savings and money market		337,422			2,414		0.95	%		313,779			3,098		1.32	%
Time		29,608			241		1.09	%		82,544			394		0.64	%
Total interest bearing deposits		1,109,117			7,191		0.86	%		997,334			9,567		1.28	%
Total deposits		2,505,555			8,238		0.44	%		1,979,771			10,461		0.70	%
Short-term borrowings		996			3		0.40	%		16,562			81		0.65	%
Repurchase agreements		20,067			173		1.15	%		7,461			19		0.34	%
Subordinated debt		13,401			647		6.44	%		13,211			648		6.54	%
Net interest bearing liabilities		1,143,581			8,014		0.93	%		1,034,568			10,315		1.33	%
Total deposits and interest bearing liabilities		2,540,019			9,061		0.48	%		2,017,005			11,209		0.74	%
Other liabilities		8,944								9,916
Total liabilities		2,548,963								2,026,921
Shareholders' equity		246,122								213,169
	$	2,795,085							$	2,240,090
Net interest income on tax equivalent basis*					57,229								50,650
Tax equivalent adjustment					1,179								631
Net interest income				$	56,050							$	50,019
Net interest margin *							2.99	%							3.25	%
* Full taxable equivalent basis to be comparable to the interest income of all other categories, using a 35% statutory tax rate
** Interest includes fees paid to affinity groups.

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Allowance for loan and lease losses:	Nine months ended						For year ended
	September 30,			September 30,			December 31,
	2011			2010			2010
	(dollars in thousands)
Balance in the allowance for loan and lease losses at beginning of period	$	24,063		$	19,123		$	19,123
Loans charged-off:
Commercial		7,371			12,260			13,513
Construction		3,003			-			-
Lease financing		-			-			3
Residential mortgage		1,876			760			1,254
Consumer		815			372			618
Total		13,065			13,392			15,388
Recoveries:
Commercial		16			230			279
Construction		3			4			4
Lease financing		-			10			10
Residential mortgage		-			742			742
Consumer		-			6			6
Total		19			992			1,041
Net charge-offs		13,046			12,400			14,347
Provision charged to operations		16,654			15,075			19,287
Balance in allowance for loan and lease losses at end of period	$	27,671		$	21,798		$	24,063
Net charge-offs/average loans		0.79	%		0.80	%		0.92	%

Loan portfolio:	September 30,		June 30,		December 31,		September 30,
	2011		2011		2010		2010
	(dollars in thousands)
Commercial	$	461,679	$	450,916	$	441,799	$	409,697
Commercial mortgage (1)		577,237		593,842		580,780		580,491
Construction		242,806		205,730		203,120		206,551
Total commercial loans		1,281,722		1,250,488		1,225,699		1,196,739
Direct financing leases		129,400		127,016		103,289		103,278
Residential mortgage		96,139		98,113		93,004		93,833
Consumer loans and others		205,243		200,132		194,320		193,968
		1,712,504		1,675,749		1,616,312		1,587,818
Unamortized costs (fees)		3,144		2,911		2,883		2,689
Total loans, net of deferred loan costs	$	1,715,648	$	1,678,660	$	1,619,195	$	1,590,507
Supplemental loan data:
Construction 1-4 family	$	91,783	$	93,422	$	92,190	$	100,848
Construction commercial, acquisition and development		151,023		112,308		110,930		105,703
	$	242,806	$	205,730	$	203,120	$	206,551
(1) At September 30, 2011 our owner-occupied loans amounted to $128 million, or 22.1% of commercial mortgages.

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	September 30,			June 30,			December 31,			September 30,
	2011			2011			2010			2010
Asset quality ratios:
Nonperforming loans to total loans (1)		1.33	%		1.43	%		1.08	%		1.51	%
Nonperforming assets to total assets (1)		0.86	%		1.12	%		0.82	%		0.91	%
Allowance for loan and lease losses to total loans		1.61	%		1.65	%		1.49	%		1.37	%
Nonaccrual loans	$	17,201		$	19,526		$	15,298		$	19,640
Total nonperforming loans		17,201			19,526			15,298			19,640
Other real estate owned		6,415			3,764			2,115			225
Total nonperforming assets	$	23,616		$	23,290		$	17,413		$	19,865
Loans 90 days past due still accruing interest	$	5,550		$	4,397		$	2,219		$	4,352
(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						Nine months ended
	September 30,						September 30,
	2011			2010			2011			2010
Selected operating ratios:
Return on average assets		0.33	%		0.10	%		0.27	%		0.19	%
Return on average equity		3.47	%		1.15	%		3.06	%		1.98	%
Net interest margin		3.14	%		3.26	%		2.99	%		3.25	%
Efficiency ratio		67.65	%		73.21	%		68.30	%		70.95	%
Book value per share	$	8.09		$	7.69		$	8.09		$	7.69

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