The Bancorp in Wilmington, Del., swung to a first-quarter loss on higher costs to review and improve its compliance with anti-money-laundering laws.
The $4.4 billion-asset company reported a net loss of $10.9 million, or 29 cents a share, after reporting a profit of $214,000 for the first quarter of 2015. It announced the results Thursday.
Noninterest expense rose 35% to $55.1 million. Bank Secrecy Act and "lookback consulting expenses" nearly tripled to $14.3 million. In 2014, The Bancorp entered a consent order with the FDIC over deficiencies in its Bank Secrecy Act compliance programs. The "lookback" expenses refer to a consultant's work in reviewing The Bancorp's "historical transactions to confirm that suspicious activity was properly identified and reported in accordance with applicable law," according to the company's 10-K.
The Bancorp expects BSA/AML-related audits and the lookback review to be completed by the early part of the third quarter, John Chrystal, its interim chief executive, said Friday during a conference call.
Net interest income rose 24% to $20.6 million. There was no loan-loss provision. The net interest margin improved by 30 basis points to 2.56%.
Noninterest income fell 10% to $18.7 million on lower deposit service charges and a $1.4 million loss on the sale of commercial mortgage-backed securities. Prepaid card fees rose 3.4% to $13.6 million. Affinity fees nearly doubled to $1.1 million.