WILMINGTON, Del.–The Bancorp Inc., a financial holding company, today reported financial results for fourth quarter and fiscal 2016.
- 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.”