Bancorp posts loss as regulatory costs take toll

The Bancorp, Inc. reported a loss in the first quarter as the company works through hefty  regulatory  expenses.

The company  based in north Wilmington,  reported a net loss of $10.9 million, compared to net income of $214,000 in the three-month period.

John Chrystal, The Bancorp’s interim  CEO  said, “During the quarter, our core lending businesses continued to drive healthy net interest income growth while non-interest income was anchored by a 3.4% growth in prepaid card fees to $13.6 million. As anticipated, earnings were negatively impacted by continued high regulatory look back expenses totaling $14.3 million for the quarter. We believe that lookback expenses will be greatly reduced after the second quarter of 2016 and minimal by year-end.

Bancorp has new management and saw delays in issuing shareholder reports, while dealing with troubled real estate loans, both of which triggered  regulatory oversight and associated costs.

The bank remained solidly capitalized with 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 6.97%, 14.35%, 14.55% and 14.35%,  compared to well capitalized minimums of 5%, 8%, 10% and 6.5%.

 Other  developments that were mentioned by the company:

• Net interest income increased 24% to $20.6 million for the quarter ended March 31, 2016 compared to $16.5 million for the quarter ended March 31, 2015.
• Loans and continuing operations loans held for sale increased 29% to $1.43 billion at March 31, 2016 compared to $1.11 billion at March 31, 2015.
• Small Business Administration (“SBA”) loans increased 51% to $334.4 million from $221.9 million at March 31, 2015.
• Security backed lines of credit (“SBLOC”) increased 32% to $592.7 million from $447.6 million at March 31, 2015.
• Direct lease financing increased 9% to $240.7 million from $220.6 million at March 31, 2015.
• Prepaid card fee income increased 3.4% to $13.6 million for the quarter ended March 31, 2016 from $13.1 million at March 31, 2015.
• Gross dollar volume (“GDV”) ⁽¹⁾ increased 15.4% to $13.5 billion for Q1 2016 from $11.7 billion for Q1 2015.
• Assets held for sale from discontinued operations decreased 8% from December 31, 2015 and 36% from March 31, 2015.
• The rate payable by us for average deposits and interest bearing liabilities of $4.08 billion in Q1 2016 was 0.30% with a rate of 0.08% for $2.03 billion of average prepaid card deposits.
• Book value per common share at March 31, 2016 of $8.35 per share.

 The Bancorp, Inc. serves  non-bank financial service companies, ranging from entrepreneurial start-ups to those on the Fortune 500.