The Bancorp, Inc. 8K Reports Fourth Quarter and Fiscal 2016 Financial Results | TBBK 9 Feb 17

Exhibit 99.1

The Bancorp, Inc. Reports Fourth Quarter and Fiscal 2016 Financial Results

Wilmington, DE – February 9, 2017 – The Bancorp, Inc. ("The Bancorp") (NASDAQ: TBBK), a financial holding company, today reported financial results for fourth quarter and fiscal 2016.

Highlights



Net interest income increased 34% to $25.0 million for the quarter ended December 31, 2016 compared to $18.6 million for the quarter ended December 31, 2015. Year over year, net interest income increased 29% to $90.0 million from $69.9 million.



Net interest margin increased to 2.84% for the quarter ended December 31, 2016 compared to 2.52% for the quarter ended December 31, 2015. Year over year, the net interest margin was 2.74% compared to 2.37%.



Loans, excluding loans held for sale, increased 14% to $1.23 billion at December 31, 2016 compared to $1.08 billion at December 31, 2015.



Direct lease financing increased 50% to $346.6 million from $231.5 million at December 31, 2015.



Small Business Administration ("SBA") loans increased 20% to $369.8 million from $307.1 million at December 31, 2015.



Security backed lines of credit ("SBLOC") increased 9% to $630.4 million from $575.9 million at December 31, 2015.



Prepaid card fee income increased 2% to $12.0 million for the quarter ended December 31, 2016 from $11.7 million for the quarter ended December 31, 2015. Year over year, prepaid card fee income increased 8% to $51.3 million.



Gross dollar volume on prepaid cards ("GDV") ⁽¹⁾increased 8% to $10.6 billion for Q4 2016 from $9.8 billion for Q4 2015. Year over year, GDV increased over 12%.



Assets held for sale from discontinued operations decreased 38% from $583.9 million at December 31, 2015 to $360.7 million at December 31, 2016.



The rate on our average deposits and interest bearing liabilities of $3.88 billion in Q4 2016 was 0.30% with a rate of 0.14% for $1.86 billion of average prepaid card deposits.



The $1.86 billion of average Q4 2016 prepaid card deposits, which are among the lowest cost of our deposits, reflected a 16% increase over fourth quarter 2015.



Book value per common share at December 31, 2016 of $5.40 per share. The Bancorp and its subsidiary, The Bancorp Bank, remain well capitalized.

⁽¹⁾Gross dollar volume represents the total dollar amount spent on prepaid and debit cards issued by The Bancorp.

The Bancorp reported a net loss of $29.0 million, or $0.52 loss per diluted share, for the quarter ended December 31, 2016 compared to net income of $18.6 million, or $0.49 income per diluted share for the quarter ended December 31, 2015. Net loss from continuing operations for the quarter ended December 31, 2016 was $24.0 million or a loss of $0.43 per diluted share compared to net income from continuing operations of $17.3 million or income of $0.46 per diluted share for the quarter ended December 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 assets 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 7.06%, 13.84%, 14.13% and 13.84% compared to well capitalized minimums of 5%, 8%, 10% and 6.5%.

Damian Kozlowski, The Bancorp's Chief Executive Officer, said, "Discontinued operations and Walnut Street were reevaluated with updated values, which resulted in a significant charge during the fourth quarter. We've reviewed the related loan processes and enhanced related governance. A commercial credit, in the discontinued loan portfolio, was impacted by suspected fraud leading to a write-down and loss in discontinued operations. We've added additional details in this release on our credits from discontinued operations including a chart detailing the types of assets and other related information. Our goal, as stated before, is to reduce risk in the portfolios and complete an orderly wind-down with the least amount of future volatility. Our continuing operations results, excluding the charge to Walnut Street which resulted from the 2014 financing of the sale of certain discontinued operations loans, showed improvement this quarter. This improvement reflected the elimination of the BSA lookback expense which terminated in the prior quarter. It also reflected continuing revenue growth, while expense cuts and restructuring are also beginning to have an impact on profitability. While certain of the expense cuts are not immediate, we have targeted total 2017 expense reductions of $20 million."

Conference Call Webcast

You may access the LIVE webcast of The Bancorp's Quarterly Earnings Conference Call at 8:00 AM ET Friday, February 10, 2017 by clicking on the webcast link on Bancorp's homepage at www.thebancorp.com. Or, you may dial 844.775.2543, access code 51403334. You may listen to the replay of the webcast following the live call on The Bancorp's investor relations website or telephonically until Friday, February 17, 2017 by dialing 855.859.2056, access code 51403334.

About The Bancorp

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. Contact

Andres Viroslav

215-861-7990

aviroslav@thebancorp.com

The Bancorp, Inc.
Financial highlights
(unaudited)
	Three months ended						Year ended
	December 31,						December 31,
Condensed income statement	2016			2015			2016			2015
	(dollars in thousands except per share data)

Net interest income	$	24,978		$	18,582		$	89,966		$	69,931
Provision for loan and lease losses		1,550			300			3,360			2,100
Non-interest income
Service fees on deposit accounts		1,789			1,889			5,124			7,468
Card payment and ACH processing fees		1,343			1,489			5,526			5,731
Prepaid card fees		11,993			11,744			51,326			47,496
Gain (loss) on sale of loans		2,092			3,333			2,901			10,080
Gain on sale of investment securities		40			14,497			3,171			14,435
Gain on sale of health savings portfolio		-			33,531			-			33,531
Change in value of investment in unconsolidated entity		(24,720	)		(1,412	)		(37,033	)		1,729
Leasing income		551			564			2,007			2,291
Debit card income		202			253			-			1,611
Affinity fees		1,056			967			4,563			3,358
Other non-interest income		508			3,412			5,401			5,337
Total non-interest income		(5,146	)		70,267			42,986			133,067
Non-interest expense
Bank Secrecy Act and lookback consulting expenses		5			14,801			29,081			41,444
Other non-interest expense		42,123			44,198			169,492			152,644
Total non-interest expense		42,128			58,999			198,573			194,088
Income (loss) from continuing operations before income tax expense		(23,846	)		29,550			(68,981	)		6,810
Income tax expense (benefit)		153			12,267			(15,171	)		1,450
Net income (loss) from continuing operations		(23,999	)		17,283			(53,810	)		5,360
Net income (loss) from discontinued operations, net of tax		(5,044	)		1,336			(42,953	)		8,072
Net income (loss) available to common shareholders	$	(29,043	)	$	18,619		$	(96,763	)	$	13,432

Net income (loss) per share from continuing operations - basic	$	(0.43	)	$	0.46		$	(1.21	)	$	0.14
Net income (loss) per share from discontinued operations - basic	$	(0.09	)	$	0.03		$	(0.96	)	$	0.21
Net income (loss) per share - basic	$	(0.52	)	$	0.49		$	(2.17	)	$	0.35

Net income (loss) per share from continuing operations - diluted	$	(0.43	)	$	0.46		$	(1.21	)	$	0.14
Net income (loss) per share from discontinued operations - diluted	$	(0.09	)	$	0.03		$	(0.96	)	$	0.21
Net income (loss) per share - diluted	$	(0.52	)	$	0.49		$	(2.17	)	$	0.35
Weighted average shares - basic		55,419,204			37,759,975			44,567,357			37,755,588
Weighted average shares - diluted		55,790,543			37,813,345			44,776,138			38,074,218

(a) For loss periods the weighted averages shares - basic is used in both the basic and diluted computations.

Balance sheet	December 31,			September 30,			June 30,			December 31,
	2016			2016			2016			2015
	(dollars in thousands)
Assets:
Cash and cash equivalents
Cash and due from banks	$	4,127		$	4,061		$	4,006		$	7,643
Interest earning deposits at Federal Reserve Bank		955,733			312,605			528,094			1,147,519
Securities sold under agreements to resell		39,199			39,463			39,360			-
Total cash and cash equivalents		999,059			356,129			571,460			1,155,162

Investment securities, available-for-sale, at fair value		1,248,613			1,334,927			1,328,693			1,070,098
Investment securities, held-to-maturity		93,467			93,495			93,537			93,590
Loans held for sale, at fair value		663,140			562,957			441,593			489,938
Loans, net of deferred fees and costs		1,222,911			1,198,237			1,182,106			1,078,077
Allowance for loan and lease losses		(6,332	)		(6,058	)		(5,398	)		(4,400	)
Loans, net		1,216,579			1,192,179			1,176,708			1,073,677
Federal Home Loan Bank & Atlantic Community Bancshares stock		1,614			11,014			12,289			1,062
Premises and equipment, net		24,125			21,797			22,429			21,631
Accrued interest receivable		10,589			10,496			10,271			9,471
Intangible assets, net		6,906			5,682			6,074			4,929
Other real estate owned		104			-			-			-
Deferred tax asset, net		37,862			29,765			28,870			36,207
Investment in unconsolidated entity		127,430			157,396			162,275			178,520
Assets held for sale from discontinued operations		360,711			386,155			487,373			583,909
Other assets		50,683			55,519			60,203			47,629
Total assets	$	4,840,882		$	4,217,511		$	4,401,775		$	4,765,823

Liabilities:
Deposits
Demand and interest checking	$	3,816,524		$	3,364,103		$	3,569,669		$	3,602,376
Savings and money market		421,780			402,832			389,851			383,832
Time deposits		-			-			101,160			428,549
Total deposits		4,238,304			3,766,935			4,060,680			4,414,757

Securities sold under agreements to repurchase		274			353			318			925
Short-term borrowings		-			70,000			-			-
Long-term borrowings		263,099			-			-			-
Subordinated debenture		13,401			13,401			13,401			13,401
Other liabilities		27,112			27,744			37,094			16,739
Total liabilities	$	4,542,190		$	3,878,433		$	4,111,493		$	4,445,822

Shareholders' equity:
Common stock - authorized, 75,000,000 shares of $1.00 par value; 55,419,204 and 37,861,303 shares issued at December 31, 2016 and 2015, respectively		55,419			55,419			37,945			37,861
Treasury stock (100,000 shares)		(866	)		(866	)		(866	)		(866	)
Additional paid-in capital		360,564			359,793			301,680			300,549
Accumulated deficit		(112,212	)		(83,169	)		(57,721	)		(15,449	)
Accumulated other comprehensive income (loss)		(4,213	)		7,901			9,244			(2,094	)
Total shareholders' equity		298,692			339,078			290,282			320,001

Total liabilities and shareholders' equity	$	4,840,882		$	4,217,511		$	4,401,775		$	4,765,823

Average balance sheet and net interest income	Three months ended December 31, 2016								Three months ended December 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 **	$	1,717,927		$	18,374		4.28	%	$	1,416,176		$	14,502		4.10	%
Leases - bank qualified*		21,018			414		7.88	%		28,658			487		6.80	%
Investment securities-taxable		1,371,209			8,437		2.46	%		1,022,914			5,290		2.07	%
Investment securities-nontaxable*		37,529			156		1.66	%		248,662			2,203		3.54	%
Interest earning deposits at Federal Reserve Bank		403,834			560		0.55	%		751,126			595		0.32	%
Federal funds sold and securities purchased under agreement to resell		39,485			151		1.53	%		31,406			112		1.43	%
Net interest earning assets		3,591,002			28,092		3.13	%		3,498,942			23,189		2.65	%

Allowance for loan and lease losses		(5,781	)							(4,178	)
Assets held for sale from discontinued operations		377,044			3,238		3.44	%		617,983			6,650		4.30	%
Other assets		257,469								321,170
	$	4,219,734							$	4,433,917

Liabilities and Shareholders' Equity:
Deposits:
Demand and interest checking	$	3,405,296		$	2,182		0.26	%	$	3,518,223		$	2,689		0.31	%
Savings and money market		407,039			498		0.49	%		378,301			581		0.61	%
Time		-			-		0.00	%		174,530			263		0.60	%
Total deposits		3,812,335			2,680		0.28	%		4,071,054			3,533		0.35	%

Short-term borrowings		55,913			96		0.69	%		18,152			12		0.00	%
Repurchase agreements		304			-		0.00	%		1,148			1		0.35	%
Subordinated debt		13,401			137		4.09	%		13,401			120		3.58	%
Total deposits and interest bearing liabilities		3,881,953			2,913		0.30	%		4,103,755			3,666		0.36	%

Other liabilities		18,896								13,313
Total liabilities		3,900,849								4,117,068

Shareholders' equity		318,885								316,849
	$	4,219,734							$	4,433,917
Net interest income on tax equivalent basis*				$	28,417							$	26,173

Tax equivalent adjustment					200								942

Net interest income				$	28,217							$	25,231
Net interest margin *							2.84	%							2.52	%

* 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, 2016								Year ended December 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 **	$	1,587,306		$	66,436		4.19	%	$	1,245,189		$	48,733		3.91	%
Leases - bank qualified*		20,718			1,748		8.44	%		25,126			1,734		6.90	%
Investment securities-taxable		1,303,445			31,219		2.40	%		989,705			19,918		2.01	%
Investment securities-nontaxable*		54,271			1,139		2.10	%		452,526			16,646		3.68	%
Interest earning deposits at Federal Reserve Bank		466,728			2,237		0.48	%		935,093			2,354		0.25	%
Federal funds sold and securities purchased under agreement to resell		30,448			450		1.48	%		40,402			578		1.43	%
Net interest-earning assets		3,462,916			103,229		2.98	%		3,688,041			89,963		2.44	%

Allowance for loan and lease losses		(4,741	)							(4,111	)
Assets held for sale		490,115			18,275		3.73	%		715,116			28,925		4.04	%
Other assets		266,777								311,501
	$	4,215,067							$	4,710,547

Liabilities and Shareholders' Equity:
Deposits:
Demand and interest checking	$	3,347,191		$	9,399		0.28	%	$	3,975,475		$	10,982		0.28	%
Savings and money market		394,434			1,526		0.39	%		337,168			1,867		0.55	%
Time		77,576			447		0.58	%		44,789			275		0.61	%
Total deposits		3,819,201			11,372		0.30	%		4,357,432			13,124		0.30	%

Short-term borrowings		57,517			359		0.62	%		4,575			12		0.26	%
Repurchase agreements		685			2		0.29	%		5,224			15		0.29	%
Subordinated debt		13,401			520		3.88	%		13,401			448		3.34	%
Total deposits and interest bearing liabilities		3,890,804			12,253		0.31	%		4,380,632			13,599		0.31	%

Other liabilities		14,916								10,403
Total liabilities		3,905,720								4,391,035

Shareholders' equity		309,347								319,512
	$	4,215,067							$	4,710,547
Net interest income on tax equivalent basis*					109,251								105,289

Tax equivalent adjustment					1,010								6,433

Net interest income				$	108,241							$	98,856
Net interest margin *							2.74	%							2.37	%

* 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,
	2016			2015
	(dollars in thousands)

Balance in the allowance for loan and lease losses at beginning of period (1)	$	4,400		$	3,638

Loans charged-off:
SBA non real estate		128			111
SBA commercial mortgage		-			-
Direct lease financing		119			30
Other consumer loans		1,211			1,220
Total		1,458			1,361

Recoveries:
SBA non real estate		1			-
Direct lease financing		17			-
Other consumer loans		12			23
Total		30			23
Net charge-offs		1,428			1,338
Provision charged to operations		3,360			2,100

Balance in allowance for loan and lease losses at end of period	$	6,332		$	4,400
Net charge-offs/average loans		0.09	%		0.11	%
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,
	2016			2016			2016		2015
	(dollars in thousands)

SBA non real estate	$	74,644		$	74,262		$	71,596	$	68,887
SBA commercial mortgage		126,159			117,053			116,617		114,029
SBA construction		8,826			6,317			3,751		6,977
Total SBA loans		209,629			197,632			191,964		189,893
Direct lease financing		346,645			332,632			315,639		231,514
SBLOC		630,400			621,456			607,017		575,948
Other specialty lending		11,073			20,076			40,543		48,315
Other consumer loans		17,374			19,375			20,005		23,180
		1,215,121			1,191,171			1,175,168		1,068,850
Unamortized loan fees and costs		7,790			7,066			6,938		9,227
Total loans, net of deferred loan fees and costs	$	1,222,911		$	1,198,237		$	1,182,106	$	1,078,077

Small business lending portfolio:	December 31,			September 30,			June 30,		December 31,
	2016			2016			2016		2015
	(dollars in thousands)

SBA loans, including deferred fees and costs		215,786			203,196			197,544		197,966
SBA loans included in HFS		154,016			146,450			136,660		109,174
Total SBA loans	$	369,802		$	349,646		$	334,204	$	307,140

Capital ratios:	Tier 1 capital to average			Tier 1 capital to risk-weighted			Total capital to risk-weighted			Common equity tier 1 to risk
	assets ratio			assets ratio			assets ratio			weighted assets
As of December 31, 2016
The Bancorp, Inc.		7.06	%		13.84	%		14.13	%		13.84	%
The Bancorp Bank		6.83	%		13.31	%		13.60	%		13.31	%
"Well capitalized" institution (under FDIC regulations)		5.00	%		8.00	%		10.00	%		6.50	%

As of December 31, 2015
The Bancorp, Inc.		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
	December 31,						December 31,
	2016			2015			2016			2015
Selected operating ratios:
Return on average assets (annualized)	nm				1.67	%	nm				0.28	%
Return on average equity (annualized)	nm				23.31	%	nm				4.19	%
Net interest margin		2.84	%		2.52	%		2.74	%		2.37	%
Book value per share	$	5.40		$	8.47		$	5.40		$	8.47

	December 31,			September 30,			June 30,			December 31,
		2016			2016			2016			2015
Asset quality ratios:
Nonperforming loans to total loans⁽²⁾		0.30	%		0.58	%		0.53	%		0.22	%
Nonperforming assets to total assets ⁽²⁾		0.08	%		0.16	%		0.14	%		0.05	%
Allowance for loan and lease losses to total loans		0.52	%		0.51	%		0.46	%		0.41	%

Nonaccrual loans	$	2,972		$	4,021		$	3,147		$	1,927
Other real estate owned		104			-			-			-
Total nonperforming assets	$	3,076		$	4,021		$	3,147		$	1,927

Loans 90 days past due still accruing interest	$	661		$	2,933		$	3,172		$	403

⁽²⁾ 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,
		2016			2016			2016			2015
	(in thousands)
Gross dollar volume (GDV) ⁽¹⁾:
Prepaid card GDV	$	10,647,520		$	10,459,097		$	11,442,294		$	9,839,782

⁽¹⁾Gross dollar volume represents the total dollar amount spent on prepaid and debit cards issued by The Bancorp.

Cumulative analysis of marks on discontinued commercial loan principal
(dollars in millions)

	Commercial loan principal 12.31.16				Cumulative marks 12.31.16		Mark chargedowns 6.30.16		Cumulative marks		% to principal
12 loan relationships >$8 million	$	232	$	232
Add back mark chargedowns to principal				20
Total principal to compare to cumulative marks			$	252	$	40	$	20	$	60		24	%

Other loans		92				10		-		10		11	%
Total discontinued loan principal *	$	324			$	50	$	20	$	70

* Of the $324 million commercial loan principal at 12.31.16, $93.5 million was non performing.

Discontinued operations portfolio composition 12/31/2016:

Collateral type	Unpaid principal balance		Mark 12.31.16		Mark as % of portfolio
	(dollars in millions)
Commercial real estate - non-owner occupied:
Retail	$	60	$	24.5		41	%
Other		51		0.2		-
Office		15		0.2		1	%
Construction and land		83		2.1		3	%
Commercial non-real estate and industrial		38		15.5		41	%
1 to 4 family construction		31		1.3		4	%
First mortgage residential non-owner occupied		21		5.2		25	%
Commercial real estate owner occupied:
Retail		11		0.2		2	%
Other		2		-		-
Office		-		-		-
First mortgage residential owner occupied		4		0.2		5	%
Multifamily		3		-		-
Residential junior mortgage		3		0.1		3	%
Other		2		-		-
Total	$	324	$	49.5		15	%

Analysis of Walnut Street marks:

	Loan activity			Marks
	(dollars in millions)

Original Walnut Street loan balance 12.31.14	$	267
Marks through 12.31.14 sale date		(58	)	$	(58	)
Sales price of Walnut Street		209
Equity investment from independent investor		(16	)
12.31.2014 Bancorp book value		193
Additional marks 2015 and 2016		(42	)		(42	)
Payments received		(24	)
12.31.2016 Bancorp book value*	$	127

Total marks				$	(100	)
Divided by:
Original Walnut Street loan balance				$	267
Percentage of total mark to original balance					37	%

* Approximately 21% of expected principal recoveries were classified as non performing as of 12.31.16.

Walnut Street portfolio composition 12/31/2016:

Collateral type	% of Portfolio
Commercial real estate non-owner occupied
Retail	25.2%
Other	23.4%
Office	19.7%
Construction and land	19.7%
Commercial non real estate and industrial	4.7%
First mortgage residential owner occupied	3.5%
First mortgage residential non-owner occupied	2.7%
Other	1.1%
Total	100.0%

The Bancorp, Inc. (TBBK) 8-KThe Bancorp, Inc. Reports Fourth Quarter and Fiscal 2016 Financial Results