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 Fourth Quarter and Fiscal 2012 Financial Results

Wilmington, DE – January 23, 2013 – The Bancorp, Inc. ("Bancorp") (NASDAQ: TBBK), a financial holding company, today reported financial results for the fourth quarter and fiscal 2012.

Net income for the fourth quarter of 2012 increased to $5.2 million compared to $3.3 million in the fourth quarter of 2011, an increase of 59%.

Financial Highlights

50% increase in diluted earnings per share to $0.15 for the fourth quarter of 2012 versus $0.10 for the fourth quarter of 2011. Diluted earnings per share amounted to $0.50 for the year ended December 31, 2012 compared to diluted earnings per share of $0.28 for the year ended December 31, 2011, an increase of 79%.

·	27% increase in total quarterly revenues to $40.3 million compared to $31.7 million in fourth quarter 2011

·	84% increase in quarterly non-interest income, primarily prepaid card fees, to $15.1 million compared to $8.2 million in fourth quarter 2011, excluding security gains and other than temporary impairment (OTTI) charges.

·	8% increase in quarterly net interest income to $22.1 million compared to $20.4 million in fourth quarter 2011. On a linked quarter basis, net interest income grew at an annualized 10% rate, primarily reflecting higher loan income.

·	At December 31, 2012 our portfolio of loans and securities had grown to $2.7 billion, an increase of $466 million, or 21% over fourth quarter 2011. Outstanding loans increased 10% over that period.

·	Average deposits for fourth quarter 2012 totaled $3.0 billion, an increase of $274 million or 10% over 2011, reflecting growth in all major deposit categories. The interest paid on deposits between those respective periods decreased to 0.31% from 0.40%.

·	Issued $45 million of common stock accretive to book value.

Betsy Z. Cohen, Bancorp’s Chief Executive Officer, said, “Fourth quarter 2012 saw a significant earnings increase as a result of increases in both our non-interest and net interest income. Adjusted operating earnings, a non-GAAP measure, increased to $13.9 million, a $4.5 million, or 48% increase over the comparable prior year period. Notwithstanding increased loan loss provisions, our net income and earnings per share increased 59% and 50%, respectively. The increases in non-interest and net interest income also resulted in an efficiency ratio, a non-GAAP measure, of 63% for the quarter compared to 67% for the prior year quarter. Our leadership position in the prepaid card space continues as the major driver of the increase in non-interest income. On the asset side, we grew our loans 10% 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 42% over the past year, to $297 million, while leases grew 21%. The SBA loan portfolio will very shortly exceed $100 million. All three of these categories have demonstrated low levels of losses. During the quarter, we successfully completed a $45 million capital raise, accretive to book value. While we were not in immediate need of capital, our transaction account deposit growth continues to exceed our expectations and we decided to be proactive in building our capital to support that trend. We strategically exited two higher cost deposit relationships in 2012 which averaged over $800 million in deposits in fourth quarter 2011, to focus on lower cost deposits. If we exclude the impact of those changes, average fourth quarter deposits actually grew in excess of 57% year over year. The Company is well capitalized, and book value per share increased from $8.18 at December 31, 2011 to $9.06 at December 31, 2012, or an increase of 11%.”

Financial Results

Bancorp reported net income available to common shareholders for the three months ended December 31, 2012 of $5.2 million or diluted earnings per share of $0.15, based on 33,921,763 weighted average shares outstanding, compared to net income available to common shareholders of $3.3 million or diluted earnings per share of $0.10, based on 33,202,761 weighted average shares outstanding, for the three months ended December 31, 2011. Adjusted operating earnings, a non-GAAP measure, increased to $13.9 million for the three months ended December 31, 2012 compared to $9.4 million for the three months ended December 31, 2011. The following is a reconciliation of adjusted operating earnings to net income available to common shareholders:

	Quarter ended						Year ended
	December 31,			December 31,			December 31,			December 31,
	2012			2011			2012			2011

Net income available to common shareholders	$	5,237		$	3,288		$	16,624		$	8,918
Income tax expense		1,622			1,382			7,794			4,311
Gains on sales of investment securities		(554	)		(136	)		(661	)		(759	)
Other than temporary impairment in securities		76			-			202			75
Losses and writedowns on other real estate owned		103			-			2,508			555
Provision for loan and lease losses		7,391			4,844			22,438			21,498
Adjusted operating earnings (1)	$	13,875		$	9,378		$	48,905		$	34,598

(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 net income calculated pursuant to GAAP.

Balance Sheet Summary

At December 31, 2012, Bancorp's total assets amounted to $3.7 billion, an increase of $689 million or 23% over total assets at December 31, 2011. During that period, investments increased to $763 million, an increase of $297 million or 64%; loans increased to $1.9 billion, an increase of $169 million or 10%; and deposits increased to $3.3 billion, an increase of $631 million or 24%. During the year ended December 31, 2012, Bancorp strategically exited two large balance deposit relationships which totaled $455 million at December 31, 2011. The relationships were terminated to eliminate certain seasonal deposit fluctuations and reduce interest expense.

Conference Call Webcast

You may access the LIVE webcast of Bancorp's Quarterly Earnings Conference Call at 8:30 AM EDT Thursday, January 24, 2013 by clicking on the webcast link on Bancorp's homepage at www.thebancorp.com. Or, you may dial 866.510.0676, access code 88069381. You may listen to the replay of the webcast following the live call on Bancorp's investor relations website or telephonically until Thursday, January 31, 2013 by dialing 888.286.8010, access code 81909498.

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					Year ended
	December 31,					December 31,
	2012			2011		2012			2011

	(dollars in thousands except per share data)
Condensed income statement
Net interest income	$	22,086		$	20,356	$	85,444		$	76,406
Provision for loan and lease losses		7,391			4,844		22,438			21,498
Non-interest income
Gain on sales of investment securities		554			136		661			759
Other than temporary impairment of investment securities		(76	)		-		(202	)		(75	)
Other non-interest income		15,147			8,246		49,138			29,841
Total non-interest income		15,625			8,382		49,597			30,525
Non-interest expense
Losses and write downs on other real estate owned		103			-		2,508			555
Other non-interest expense		23,358			19,224		85,677			71,649
Total non-interest expense		23,461			19,224		88,185			72,204
Net income before income tax expense		6,859			4,670		24,418			13,229
Income tax expense		1,622			1,382		7,794			4,311
Net income available to common shareholders	$	5,237		$	3,288	$	16,624		$	8,918

Basic earnings per share	$	0.15		$	0.10	$	0.50		$	0.28

Diluted earnings per share	$	0.15		$	0.10	$	0.50		$	0.28
Weighted average shares - basic		33,603,879			33,196,281		33,227,755			31,927,815
Weighted average shares - diluted		33,921,763			33,202,761		33,288,278			31,933,592

Balance sheet	December 31,			September 30,			June 30,			December 31,
	2012			2012			2012			2011
	(dollars in thousands)
Assets:
Cash and cash equivalents
Cash and due from banks	$	19,982		$	4,648		$	5,560		$	96,228
Interest earning deposits at Federal Reserve Bank		948,111			540,010			692,582			652,946
Total cash and cash equivalents		968,093			544,658			698,142			749,174

Investment securities, available-for-sale, at fair value		718,065			634,894			582,219			448,204
Investment securities, held-to-maturity		45,179			22,707			17,796			18,044
Federal Home Loan Bank & Atlantic Central Bankers Bank stock		3,621			4,160			4,596			5,088
Loans held for sale, at fair value		11,341			7,970			-			-
Loans, net of deferred costs		1,902,854			1,856,992			1,804,312			1,744,828
Allowance for loan and lease losses		(33,040	)		(33,071	)		(31,171	)		(29,568	)
Loans, net		1,869,814			1,823,921			1,773,141			1,715,260
Premises and equipment, net		10,368			9,802			8,694			8,358
Accrued interest receivable		9,857			10,061			9,297			8,476
Intangible assets, net		7,004			7,254			7,504			8,004
Other real estate owned		4,241			3,065			4,919			7,405
Deferred tax asset, net		22,789			19,708			20,716			21,941
Other assets		29,287			24,925			23,178			20,727
Total assets	$	3,699,659		$	3,113,125		$	3,150,202		$	3,010,681

Liabilities:
Deposits
Demand and interest checking	$	2,775,207		$	2,300,025		$	2,335,960		$	2,192,938
Savings and money market		517,098			459,725			456,614			454,343
Time deposits		12,582			12,606			20,619			25,528
Time deposits, $100,000 and over		8,334			8,819			9,104			9,742
Total deposits		3,313,221			2,781,175			2,822,297			2,682,551

Securities sold under agreements to repurchase		18,548			18,802			21,948			33,177
Accrued interest payable		103			100			127			123
Subordinated debenture		13,401			13,401			13,401			13,401
Other liabilities		17,709			10,662			9,555			9,950
Total liabilities	$	3,362,982		$	2,824,140		$	2,867,328		$	2,739,202

Shareholders' equity:
Common stock - authorized, 50,000,000 shares of $1.00 par value; 37,246,655 and 33,196,281 shares issued at December 31, 2012 and 2011, respectively		37,247			33,209			33,201			33,196
Treasury stock (100,000 shares)		(866	)		(866	)		(866	)		(866	)
Additional paid-in capital		282,708			243,954			243,284			241,997
Retained earnings (accumulated deficit)		7,347			2,110			(1,451	)		(9,277	)
Accumulated other comprehensive gain		10,241			10,578			8,706			6,429
Total shareholders' equity		336,677			288,985			282,874			271,479

Total liabilities and shareholders' equity	$	3,699,659		$	3,113,125		$	3,150,202		$	3,010,681

Average balance sheet and net interest income	Three months ended December 31, 2012								Three months ended December 31, 2011
(dollars in thousands)	Average					Average			Average					Average
Assets:	Balance			Interest		Rate			Balance			Interest		Rate
Interest-earning assets:
Loans net of unearned discount **	$	1,888,755		$	20,091		4.25	%	$	1,722,161		$	19,082		4.43	%
Leases - bank qualified*		15,030			211		5.62	%		7,356			149		8.10	%
Investment securities-taxable		602,749			3,310		2.20	%		377,071			3,054		3.24	%
Investment securities-nontaxable*		107,370			1,078		4.02	%		86,259			1,044		4.84	%
Interest earning deposits at Federal Reserve Bank		681,272			419		0.25	%		678,768			420		0.25	%
Federal funds sold/securities purchased under agreement to resell		1,689			7		1.65	%		-			-		0.00	%
Net interest earning assets		3,296,865			25,116		3.05	%		2,871,615			23,749		3.31	%

Allowance for loan and lease losses		(34,018	)							(28,166	)
Other assets		78,755								211,356
	$	3,341,602							$	3,054,805

Liabilities and Shareholders' Equity:
Deposits:
Demand and interest checking	$	2,502,314		$	1,719		0.27	%	$	2,287,085		$	2,046		0.36	%
Savings and money market		480,473			569		0.47	%		407,536			544		0.53	%
Time		21,323			55		1.03	%		35,390			113		1.28	%
Total deposits		3,004,110			2,343		0.31	%		2,730,011			2,703		0.40	%

Repurchase agreements		19,090			20		0.42	%		32,150			57		0.71	%
Subordinated debt		13,401			216		6.45	%		13,401			216		6.45	%
Total deposits and interest bearing liabilities		3,036,601			2,579		0.34	%		2,775,562			2,976		0.43	%

Other liabilities		9,157								9,712
Total liabilities		3,045,758								2,785,274

Shareholders' equity		295,844								269,531
	$	3,341,602							$	3,054,805
Net interest income on tax equivalent basis*				$	22,537							$	20,773

Tax equivalent adjustment					451								417

Net interest income				$	22,086							$	20,356
Net interest margin *							2.73	%							2.89	%

* 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, 2012								Year ended December 31, 2011
(Dollars in thousands)	Average					Average			Average					Average
Assets:	Balance			Interest		Rate			Balance			Interest		Rate
Interest-earning assets:
Loans net of unearned discount **	$	1,807,770		$	77,685		4.30	%	$	1,671,940		$	74,347		4.45	%
Leases - bank qualified*		13,571			826		6.09	%		4,976			438		8.80	%
Investment securities-taxable		482,463			13,378		2.77	%		289,002			9,682		3.35	%
Investment securities-nontaxable*		103,901			4,331		4.17	%		77,509			4,111		5.30	%
Interest earning deposits at Federal Reserve Bank		974,762			2,433		0.25	%		588,689			1,461		0.25	%
Federal funds sold/securities purchased under agreement to resell		425			7		1.65	%		-			-		0.00	%
Net interest-earning assets		3,382,892			98,660		2.92	%		2,632,116			90,039		3.42	%

Allowance for loan and lease losses		(32,320	)							(26,999	)
Other assets		127,486								255,444
	$	3,478,058							$	2,860,561

Liabilities and Shareholders' Equity:
Deposits:
Demand and interest checking	$	2,666,493		$	7,691		0.29	%	$	2,175,972		$	8,035		0.37	%
Savings and money market		455,860			2,401		0.53	%		355,094			2,550		0.72	%
Time		26,624			356		1.34	%		31,066			354		1.14	%
Total deposits		3,148,977			10,448		0.33	%		2,562,132			10,939		0.43	%

Short-term borrowings		-			-		0.00	%		745			3		0.40	%
Repurchase agreements		22,508			95		0.42	%		23,113			231		1.00	%
Subordinated debt		13,401			869		6.48	%		13,401			863		6.44	%
Total deposits and interest bearing liabilities		3,184,886			11,412		0.36	%		2,599,391			12,036		0.46	%

Other liabilities		9,440								9,138
Total liabilities		3,194,326								2,608,529

Shareholders' equity		283,732								252,032

	$	3,478,058							$	2,860,561
Net interest income on tax equivalent basis*					87,248								78,003

Tax equivalent adjustment					1,804								1,597

Net interest income				$	85,444							$	76,406
Net interest margin *							2.58	%							2.96	%

* Full taxable equivalent basis to be comparable to the interest income of all other categories, using a 35% statutory tax rate
** Includes loans held for sale.

Allowance for loan and lease losses:	Year ended
	December 31,		December 31,
	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		9,508		8,651
Construction		11,318		3,254
Lease financing		87		39
Residential mortgage		-		2,870
Consumer		340		1,280
Total		21,253		16,094

Recoveries:
Commercial		2,093		91
Construction		96		4
Lease financing		13		-
Residential mortgage		85		-
Consumer		-		6
Total		2,287		101
Net charge-offs		18,966		15,993
Provision charged to operations		22,438		21,498

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



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

Commercial	$	470,109	$	453,444	$	441,167	$	450,411
Commercial mortgage (1)		617,069		614,410		596,639		609,487
Construction		258,684		263,726		269,636		246,611
Total commercial loans		1,345,862		1,331,580		1,307,442		1,306,509
Direct lease financing		156,697		146,728		140,012		129,682
Residential mortgage		97,717		97,589		97,226		96,110
Consumer loans and others		296,915		276,427		255,769		209,041
		1,897,191		1,852,324		1,800,449		1,741,342
Unamortized loan costs		5,663		4,668		3,863		3,486
Total loans, net of deferred loan costs	$	1,902,854	$	1,856,992	$	1,804,312	$	1,744,828

Supplemental loan data:
Construction 1-4 family	$	60,343	$	71,599	$	79,546	$	85,189
Commercial construction, acquisition and development		198,341		192,127		190,090		161,422
	$	258,684	$	263,726	$	269,636	$	246,611
(1) At December 31, 2012 our owner-occupied loans amounted to $173 million, or 28.0% 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 December 31, 2012
The Company		9.99	%		16.39	%		17.65	%
The Bancorp Bank		7.24	%		11.91	%		13.16	%
"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						Year ended
	December 31,						December 31,
	2012			2011			2012			2011
Selected operating ratios:
Return on average assets		0.62	%		0.43	%		0.48	%		0.31	%
Return on average equity		7.04	%		4.84	%		5.86	%		3.54	%
Net interest margin		2.73	%		2.89	%		2.58	%		2.96	%
Efficiency ratio (1)		63.01	%		67.21	%		65.53	%		67.96	%
Book value per share	$	9.06		$	8.18		$	9.06		$	8.18



	December 31,			September 30,			June 30,			December 31,
	2012			2012			2012			2011
Asset quality ratios:
Nonperforming loans to total loans (2)		1.56	%		1.63	%		1.55	%		1.24	%
Nonperforming assets to total assets (2)		0.92	%		1.07	%		1.04	%		0.97	%
Allowance for loan and lease losses to total loans		1.74	%		1.78	%		1.73	%		1.69	%
Net charge-offs/average loans		1.04	%		0.64	%		0.45	%		0.96	%

Nonaccrual loans	$	25,190		$	26,454		$	24,815		$	17,587
Other real estate owned		4,241			3,065			4,919			7,405
Total nonperforming assets	$	29,431		$	29,519		$	29,734		$	24,992

Loans 90 days past due still accruing interest	$	4,435		$	3,861		$	3,105		$	4,101
(1) Non-GAAP measure

Reconciliation of the efficiency ratio:
Non-interest expense	$	23,461		$	19,224		$	88,185		$	72,204

Net interest income		22,086			20,356			85,444			76,406
Non-interest income		15,625			8,382			49,597			30,525
Less: Gain on sale of securities		(554	)		(136	)		(661	)		(759	)
Less: Other than temporary impairment		76			-			202			75
		37,233			28,602			134,582			106,247

		63.01	%		67.21	%		65.53	%		67.96	%

(2) 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.

Bancorp, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - January 23, 2013

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