The Bancorp, Inc. Reports Second Quarter 2008 Results
Loan and deposit growth continue although securities impairment charge causes loss
Wilmington, De - July 23, 2008 - The Bancorp, Inc. ("Bancorp") (Nasdaq: TBBK), a bank holding company, today reported results for the quarter ended June 30, 2008.
Bancorp reported a net loss available to common shareholders for the three months ended June 30, 2008 of $4.3 million or a total loss per share - diluted of $0.29, based on 14,563,218 weighted average shares outstanding.
Betsy Z. Cohen, Bancorp's Chief Executive Officer, said, "The loss is attributable to an impairment charge of $8.3 million against our $15 million portfolio of structured finance securities. The bank remains well capitalized after the recognition of this loss and we expect to return to profitability in the third quarter. Without this impairment charge the Bancorp would have recorded a profit for the three months ended June 30, 2008. We continue to experience significant growth in our core deposit generation programs. Deposits from health saving accounts increased 60% to over $150 million since December 31, 2007 and deposits attributable to our SVS platform have grown 152% to $290 million since its acquisition in November 2007. Loans are also increasing even after a decrease in both outstandings and commitments in our residential construction loan portfolio. Nonperforming loans at June 30, 2008 represented .63% of total assets compared to .58% of total assets at March 31, 2008."
Bancorp maintains an investment securities portfolio to generate cash flow, to help manage interest rate risk, and to provide collateral for deposits and other liabilities. Sharp declines in the market valuations of $15 million of structured finance securities, which were purchased in 2004 and 2005, coupled with uncertainty about future market conditions, led management to determine that these investments had become "other than temporarily impaired" under GAAP. The amount of the decrease - $8.3 million - was recorded as a securities loss for the quarter ended June 30, 2008. An additional $2 million was included in the loan and lease loss provision over the first quarter 2008. The allowance for loan and leases increased to 1.00% of loans and leases from .86% at March 31, 2008.
The total loss per share - diluted of $0.29 for the three months ended June 30, 2008 described above compares to net income available to common shareholders of $3.9 million, or $0.27 diluted earnings per share, based on 14,393,184 weighted average shares outstanding, for the three months ended June 30, 2007. Bancorp reported a net loss available to common shares for the six-months ended June 30, 2008 of $1.5 million, or a total loss per share - diluted of $0.10 based on 14,562,434 weighted-average shares outstanding - diluted, as compared to net income available to common shares for the six-months ended June 30, 2007 of $7.4 million, or total earnings per share - diluted of $0.51 based on 14,396,481 weighted-average shares outstanding - diluted.
At June 30, 2008, Bancorp's total assets were $1.6 billion, an increase of $109.0 million or 7.0% from December 31, 2007, loans grew to $1.428 billion, an increase of $140.8 million or 10.9% from December 31, 2007 and deposits grew to $1.314 billion, an increase of $36.0 million or 2.8% from December 31, 2007.
Conference Call Webcast
Interested parties can access the LIVE webcast of Bancorp's Quarterly Earnings Conference Call at 8:30 AM EDT on July 24, 2008 by clicking on the webcast link on Bancorp's homepage at www.thebancorp.com. The conference call may also be listened to by dialing 866.578.5784 using passcode 98494786. For those who are not available to listen to the live broadcast, the replay of the webcast will be available following the live call on Bancorp's investor relations website and telephonically until Thursday, July 31, 2008, by dialing 888-286-8010, access code 16798331.
About Bancorp
The Bancorp, Inc. is a bank holding company that operates The Bancorp Bank, an FDIC-insured commercial bank that delivers a full array of financial services and products both directly and through private-label affinity partner programs nationwide. The Bancorp Bank's regional community bank division serves the needs of small and mid-size businesses and their principals in the Philadelphia-Wilmington region.
The Bancorp, Inc. Contact
Andres Viroslav
215-861-7990
andres.viroslav@thebancorp.com
The Bancorp, Inc. |
Financial highlights |
(unaudited) |
| Three months ended | | Six months ended |
| June 30, | | June 30, |
| 2008 | | 2007 | | 2008 | | 2007 |
| (dollars in thousands except per share data) | | (dollars in thousands except per share data) |
| | | |
Condensed income statement | | | | | | | |
Net interest income | $ 12,921 | | $ 12,812 | | $ 25,817 | | $ 25,366 |
Provision for loan and lease losses | 3,350 | | 750 | | 4,700 | | 1,500 |
Non-interest income | 3,024 | | 1,675 | | 6,500 | | 3,181 |
Realized loss from impaired securities | 8,275 | | - | | 8,275 | | - |
Non-interest expense | 11,210 | | 7,303 | | 21,572 | | 14,738 |
Net (loss) income before income tax expense | (6,890) | | 6,434 | | (2,230) | | 12,309 |
Income tax (benefit) expense | (2,619) | | 2,511 | | (785) | | 4,804 |
Net (loss) income | (4,271) | | 3,923 | | (1,445) | | 7,505 |
Less preferred stock dividends and accretion | (16) | | (17) | | (33) | | (35) |
Income allocated to Series A preferred shareholders | 31 | | (32) | | 10 | | (61) |
Net (loss) income available to common shareholders | $ (4,256) | | $ 3,874 | | $ (1,468) | | $ 7,409 |
| | | | | | | |
Basic (loss) earnings per share | $ (0.29) | | $ 0.28 | | $ (0.10) | | $ 0.54 |
| | | | | | | |
Diluted (loss) earnings per share | $ (0.29) | | $ 0.27 | | $ (0.10) | | $ 0.51 |
Weighted average shares - basic | 14,563,218 | | 13,793,621 | | 14,562,434 | | 13,773,771 |
Weighted average shares - diluted | 14,563,218 | | 14,393,184 | | 14,562,434 | | 14,396,481 |
| | | | | | | |
| | | | | | | |
| June 30, | | March 31, | | December 31, | | June 30, |
| 2008 | | 2008 | | 2007 | | 2007 |
Condensed balance sheet | | | | | | | |
Assets | | | | | | | |
Federal funds sold | $ 18,047 | | $ 45,714 | | $ 40,783 | | $ 136,290 |
Investment securities | 118,897 | | 127,962 | | 122,215 | | 115,810 |
Loans | 1,427,578 | | 1,362,653 | | 1,286,789 | | 1,181,391 |
Allowance for loan and lease losses | (14,245) | | (11,328) | | (10,233) | | (9,387) |
Other assets | 127,129 | | 122,453 | | 128,828 | | 44,309 |
Total assets | $ 1,677,406 | | $ 1,647,454 | | $ 1,568,382 | | $ 1,468,413 |
| | | | | | | |
Liabilities and shareholders' equity | | | | | | | |
Transaction accounts | $ 786,785 | | $ 829,611 | | $ 864,254 | | $ 716,202 |
Time deposits | 527,582 | | 425,159 | | 414,064 | | 434,885 |
Total deposits | 1,314,367 | | 1,254,770 | | 1,278,318 | | 1,151,087 |
Short term borrowings | 152,005 | | 175,000 | | 93,846 | | 150,000 |
Subordinated debt | 13,401 | | 13,401 | | 13,401 | | - |
Long term borrowings | 20,000 | | 15,000 | | - | | - |
Other liabilities | 4,968 | | 9,095 | | 6,558 | | 10,402 |
Shareholder's equity | 172,665 | | 180,188 | | 176,259 | | 156,924 |
Total liabilities and shareholders' equity | $ 1,677,406 | | $ 1,647,454 | | $ 1,568,382 | | $ 1,468,413 |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Second | | First | | Fourth | | Second |
| quarter | | quarter | | quarter | | quarter |
Average condensed balance sheet | average 2008 | | average 2008 | | average 2007 | | average 2007 |
Assets | | | | | | | |
Federal funds sold | $ 21,566 | | $ 28,708 | | $ 31,880 | | $ 70,432 |
Investment securities | 127,544 | | 122,161 | | 118,313 | | 112,343 |
Loans | 1,396,421 | | 1,330,566 | | 1,269,324 | | 1,132,682 |
Allowance for loan and lease losses | (11,875) | | (10,928) | | (9,863) | | (9,221) |
Other assets | 116,715 | | 124,654 | | 60,842 | | 37,405 |
Total assets | $ 1,650,371 | | $ 1,595,161 | | $ 1,470,496 | | $ 1,343,641 |
| | | | | | | |
Liabilities and shareholders' equity | | | | | | | |
Transaction accounts | $ 799,675 | | $ 886,567 | | $ 731,571 | | $ 743,402 |
Time deposits | 476,468 | | 392,594 | | 423,617 | | 404,912 |
Total deposits | 1,276,143 | | 1,279,161 | | 1,155,188 | | 1,148,314 |
Short term borrowings | 155,338 | | 119,176 | | 144,937 | | - |
Other borrowings | 2,300 | | 13,169 | | - | | 30,512 |
Other liabilities | 35,082 | | 6,257 | | 6,325 | | 9,977 |
Shareholders' equity | 181,508 | | 177,398 | | 164,046 | | 154,838 |
Total liabilities and shareholders' equity | $ 1,650,371 | | $ 1,595,161 | | $ 1,470,496 | | $ 1,343,641 |
| | | | | | | |
Loan Portfolio | | | | | | | |
| June 30 | | March 31 | | December 31 | | June 30 |
| 2008 | | 2008 | | 2007 | | 2007 |
| Amount | | Amount | | Amount | | Amount |
| | | | | | | |
Commercial | $ 341,304 | | $ 324,824 | | $ 325,166 | | $ 256,362 |
Commercial mortgage | 461,170 | | 419,764 | | 369,124 | | 355,717 |
Construction (1) | 332,088 | | 348,133 | | 307,614 | | 297,007 |
Total commercial loans | 1,134,562 | | 1,092,721 | | 1,001,904 | | 909,086 |
Direct financing leases, net | 90,201 | | 87,772 | | 89,519 | | 88,076 |
Residential mortgage | 52,389 | | 48,764 | | 50,193 | | 53,743 |
Consumer loans and others | 149,186 | | 132,671 | | 144,882 | | 130,598 |
| 1,426,338 | | 1,361,928 | | 1,286,498 | | 1,181,503 |
Unamortized costs (fees) | 1,240 | | 725 | | 291 | | (112) |
Total loans, net of unamortized fees and costs | $ 1,427,578 | | $ 1,362,653 | | $ 1,286,789 | | $ 1,181,391 |
| | | | | | | |
Supplemental loan data (1): | | | | | | | |
Construction 1-4 family | $ 174,196 | | $ 177,843 | | $ 167,485 | | |
Construction commercial, acquisition and development | 157,892 | | 170,290 | | 140,129 | | |
| $ 332,088 | | $ 348,133 | | $ 307,614 | | |
| | | | | | | |
(1) Prior to December 31, 2007, construction loans were reported as a single line item. | | | | | | |
| | | | | | | |
| Three months ended | | Six months ended |
| June 30, | | June 30, |
| 2008 | | 2007 | | 2008 | | 2007 |
Selected operating ratios | | | | | | | |
Return on average assets excluding realized security loss (1) | 0.27% | | 1.17% | | 0.48% | | 1.13% |
Return on average equity excluding realized security loss (1) | 2.44% | | 10.13% | | 4.37% | | 9.84% |
Return on average tangible equity excluding realized security loss | 3.70% | | 10.40% | | 6.69% | | 10.10% |
Return on average assets | (1.04)% | | 1.17% | | (0.18)% | | 1.13% |
Return on average equity | (9.41)% | | 10.13% | | (1.61)% | | 9.84% |
Return on average tangible equity | (14.27)% | | 10.40% | | (2.46)% | | 10.10% |
Net interest margin | 3.34% | | 3.89% | | 3.41% | | 3.88% |
Efficiency ratio | 70.30% | | 50.41% | | 66.75% | | 51.63% |
Book value per share | $ 11.77 | | $ 11.27 | | $ 11.77 | | $ 11.27 |
| | | | | | | |
(1) Reconciliation table for non-GAAP financial measure | | | | | | | |
Return on average equity excluding realized security loss | 2.44% | | 10.13% | | 4.37% | | 9.84% |
Effect of goodwill and intangibles excluding realized security loss | 1.26% | | 0.27% | | 2.32% | | 0.26% |
Return on average tangible equity excluding realized security loss | 3.70% | | 10.40% | | 6.69% | | 10.10% |
| | | | | | | |
Return on average equity | -9.41% | | 10.13% | | -1.61% | | 9.84% |
Effect of goodwill and intangibles | -4.86% | | 0.27% | | -0.85% | | 0.26% |
Return on average tangible equity | -14.27% | | 10.40% | | -2.46% | | 10.10% |
| | | | | | | |
Average tangible equity excludes acquisition related | | | | | | | |
average goodwill and intangibles: | | | | | | | |
Average shareholders' equity | 181,508 | | 154,838 | | 179,981 | | 152,503 |
Average goodwill and intangibles | (61,810) | | (3,951) | | (62,447) | | (3,951) |
Average tangible equity | 119,698 | | 150,887 | | 117,534 | | 148,552 |
| | | | | | | |
| | | | | | | |
| | | | | As of or for the period ended |
| | | | | June 30, |
Asset quality ratios | | | | | 2008 | | 2007 |
Nonperforming loans to total loans | | | | | 0.74% | | 0.39% |
Nonperforming assets to total assets | | | | | 0.63% | | 0.31% |
Allowance for loan and lease losses to total loans | | | | | 1.00% | | 0.79% |
Nonaccrual loans | | | | | $ 10,053 | | $ 4,442 |
Loans 90 days past due still accruing interest | | | | | $ 492 | | $ 120 |
