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Section 1: 10-Q (10-Q)

20160930 Q3



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 10-Q



(Mark One)





 

 

[X]

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE



 

SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended:     September 30, 2016



OR



 

 



 

 

[  ]

 

TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE



 

SECURITIES EXCHANGE ACT OF 1934



For the transition period from: _____ to _____



Commission file number: 51018



THE BANCORP, INC.



(Exact name of registrant as specified in its charter)





 

 

Delaware

 

23-3016517

(State or other jurisdiction of

 

(IRS Employer

incorporation or organization)

 

Identification No.)





 

 

409 Silverside Road

 

 

Wilmington, DE 

 

19809

(Address of principal

 

(Zip code)

executive offices)

 

 



 

 



Registrant's telephone number, including area code:  (302) 385-5000



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  



Yes [X]   No [ ]



Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).



Yes [X]   No [ ]





 

 


 

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



(Check one):  



 

 

 



Large accelerated filer [ ]   

 

Accelerated filer [X]    



Non-accelerated filer [ ] 

 

Smaller reporting company [ ]



(Do not check if a smaller

 

 



   reporting company)

 

 



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).



Yes [ ]  No [X]



Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.



As of November 4, 2016 there were 55,319,204 outstanding shares of common stock, $1.00 par value.





 

 

 


 

THE BANCORP, INC



Form 10-Q Index



 

 



 

Page

Part I Financial Information

Item 1

Financial Statements:

3



 

 



Consolidated Balance Sheets – September 30, 2016 (unaudited) and December 31, 2015

3



 

 



Unaudited Consolidated Statements of Operations – Three and nine months ended September 30, 2016 and 2015

4



 

 



Unaudited Consolidated Statements of Comprehensive Income – Nine months ended September 30, 2016 and 2015

6



 

 



Unaudited Consolidated Statements of Changes in Shareholders’ Equity – Nine months ended September 30, 2016

7



 

 



Unaudited Consolidated Statements of Cash Flows – Nine months ended September 30, 2016 and 2015

8



 

 



Notes to Unaudited Consolidated Financial Statements

9



 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

38



 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

60



 

 

Item 4.

Controls and Procedures

61



 

 

Part II Other Information



 

 

Item 1.

Legal proceedings

62

Item 6.

Exhibits

63



 

 

Signatures

 

63



 

 







 

2


 



PART I – FINANCIAL INFORMATION



Item 1. Financial Statements



THE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS





 

 

 

 



 

September 30,

 

December 31,



 

2016

 

2015



 

(unaudited)

 

 



 

(in thousands)

ASSETS

 

 

 

 

Cash and cash equivalents

 

 

 

 

Cash and due from banks

 

$                    4,061 

 

$                    7,643 

Interest earning deposits at Federal Reserve Bank

 

312,605 

 

1,147,519 

Securities purchased under agreements to resell

 

39,463 

 

 -

Total cash and cash equivalents

 

356,129 

 

1,155,162 



 

 

 

 

Investment securities, available-for-sale, at fair value

 

1,334,927 

 

1,070,098 

Investment securities, held-to-maturity (fair value $91,787 and $91,599, respectively)

 

93,495 

 

93,590 

Commercial loans held for sale

 

562,957 

 

489,938 

Loans, net of deferred loan fees and costs

 

1,198,237 

 

1,078,077 

Allowance for loan and lease losses

 

(6,058)

 

(4,400)

Loans, net

 

1,192,179 

 

1,073,677 

Federal Home Loan Bank and Atlantic Central Bankers Bank stock

 

11,014 

 

1,062 

Premises and equipment, net

 

21,797 

 

21,631 

Accrued interest receivable

 

10,496 

 

9,471 

Intangible assets, net

 

5,682 

 

4,929 

Deferred tax asset, net

 

29,765 

 

36,207 

Investment in unconsolidated entity, at fair value

 

157,396 

 

178,520 

Assets held for sale from discontinued operations

 

386,155 

 

583,909 

Other assets

 

55,519 

 

47,629 

Total assets

 

$             4,217,511 

 

$             4,765,823 



 

 

 

 

LIABILITIES

 

 

 

 

Deposits

 

 

 

 

Demand and interest checking

 

$             3,364,103 

 

$             3,602,376 

Savings and money market

 

402,832 

 

383,832 

Time deposits

 

 -

 

428,549 

Total deposits

 

3,766,935 

 

4,414,757 



 

 

 

 

Securities sold under agreements to repurchase

 

353 

 

925 

Short-term borrowings

 

70,000 

 

-

Subordinated debenture

 

13,401 

 

13,401 

Other liabilities

 

27,744 

 

16,739 

Total liabilities

 

3,878,433 

 

4,445,822 



 

 

 

 

SHAREHOLDERS' EQUITY

 

 

 

 

Common stock - authorized, 75,000,000 shares of $1.00 par value; 55,419,204 and 37,861,218

 

 

 

 

shares issued at September 30, 2016 and December 31, 2015, respectively

 

55,419 

 

37,861 

Treasury stock, at cost (100,000 shares)

 

(866)

 

(866)

Additional paid-in capital

 

359,793 

 

300,549 

Accumulated deficit

 

(83,169)

 

(15,449)

Accumulated other comprehensive income (loss)

 

7,901 

 

(2,094)

Total shareholders' equity

 

339,078 

 

320,001 



 

 

 

 

Total liabilities and shareholders' equity

 

$             4,217,511 

 

$             4,765,823 



The accompanying notes are an integral part of these consolidated statements.



3

 


 







THE BANCORP, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS







 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 



 

For the three months ended September 30,

 

For the nine months ended September 30,



 

2016

 

2015

 

2016

 

2015



 

(in thousands, except per share data)

Interest income

 

 

 

 

 

 

 

 

Loans, including fees

 

$               17,697 

 

$               12,811 

 

$               48,928 

 

$               35,042 

Interest on investment securities:

 

 

 

 

 

 

 

 

Taxable interest

 

8,350 

 

4,562 

 

22,782 

 

14,628 

Tax-exempt interest

 

142 

 

3,097 

 

639 

 

9,388 

Federal funds sold/securities purchased under agreements to resell

 

146 

 

143 

 

301 

 

465 

Interest earning deposits

 

397 

 

580 

 

1,677 

 

1,759 



 

26,732 

 

21,193 

 

74,327 

 

61,282 

Interest expense

 

 

 

 

 

 

 

 

Deposits

 

2,906 

 

3,277 

 

8,692 

 

9,591 

Securities sold under agreements to repurchase

 

 -

 

 

 

14 

Short-term borrowings

 

153 

 

 -

 

263 

 

 -

Subordinated debenture

 

131 

 

117 

 

383 

 

328 



 

3,190 

 

3,395 

 

9,339 

 

9,933 

Net interest income

 

23,542 

 

17,798 

 

64,988 

 

51,349 

Provision for loan and lease losses

 

750 

 

625 

 

1,810 

 

1,800 

Net interest income after provision for loan and lease losses

 

22,792 

 

17,173 

 

63,178 

 

49,549 



 

 

 

 

 

 

 

 

Non-interest income

 

 

 

 

 

 

 

 

Service fees on deposit accounts

 

1,510 

 

1,919 

 

3,335 

 

5,579 

Card payment and ACH processing fees

 

1,459 

 

1,493 

 

4,183 

 

4,242 

Prepaid card fees

 

12,249 

 

11,492 

 

39,333 

 

35,752 

Gain (loss) on sale of loans

 

903 

 

(830)

 

809 

 

6,747 

Gain on sale of investment securities

 

981 

 

(335)

 

3,131 

 

(62)

Change in value of investment in unconsolidated entity

 

811 

 

1,040 

 

(12,313)

 

3,141 

Leasing income

 

588 

 

552 

 

1,456 

 

1,727 

Debit card income (loss)

 

(45)

 

427 

 

(202)

 

1,358 

Affinity fees

 

1,091 

 

1,083 

 

3,507 

 

2,391 

Other

 

357 

 

458 

 

4,893 

 

1,925 

Total non-interest income

 

19,904 

 

17,299 

 

48,132 

 

62,800 



 

 

 

 

 

 

 

 

Non-interest expense

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

21,508 

 

16,768 

 

62,400 

 

49,677 

Depreciation and amortization

 

1,241 

 

1,171 

 

3,751 

 

3,568 

Rent and related occupancy cost

 

1,638 

 

1,558 

 

4,797 

 

4,471 

Data processing expense

 

3,769 

 

3,747 

 

11,459 

 

10,735 

Printing and supplies

 

825 

 

622 

 

2,194 

 

1,805 

Audit expense

 

246 

 

397 

 

746 

 

1,596 

Legal expense

 

814 

 

427 

 

3,786 

 

2,480 

Amortization of intangible assets

 

394 

 

298 

 

1,032 

 

893 

FDIC insurance

 

2,436 

 

2,700 

 

7,118 

 

8,306 

Software

 

2,770 

 

1,920 

 

7,756 

 

4,793 

Insurance

 

631 

 

482 

 

1,695 

 

1,441 

Telecom and IT network communications

 

582 

 

458 

 

1,547 

 

1,420 

Securitization and servicing expense

 

 -

 

398 

 

747 

 

1,250 

Consulting

 

1,701 

 

1,125 

 

4,214 

 

3,345 

Bank Secrecy Act and lookback consulting expenses

 

1,340 

 

11,687 

 

29,076 

 

26,643 

Other

 

4,276 

 

4,037 

 

14,127 

 

12,666 

Total non-interest expense

 

44,171 

 

47,795 

 

156,445 

 

135,089 

Loss from continuing operations before income taxes

 

(1,475)

 

(13,323)

 

(45,135)

 

(22,740)

4

 


 

Income tax provision (benefit)

55 

 

(5,706)

 

(15,324)

 

(10,817)

Net loss from continuing operations

 

$               (1,530)

 

$               (7,617)

 

$             (29,811)

 

$             (11,923)

Discontinued operations

 

 

 

 

 

 

 

 

Income (loss) from discontinued operations before income taxes

 

(21,490)

 

2,997 

 

(38,073)

 

10,193 

Income tax provision (benefit)

2,531 

 

955 

 

(164)

 

3,457 

Income (loss) from discontinued operations, net of tax

 

(24,021)

 

2,042 

 

(37,909)

 

6,736 

Net income (loss) available to common shareholders

 

$             (25,551)

 

$               (5,575)

 

$             (67,720)

 

$               (5,187)



 

 

 

 

 

 

 

 

Net loss per share from continuing operations - basic

 

$                 (0.03)

 

$                 (0.20)

 

$                 (0.73)

 

$                 (0.32)

Net income (loss) per share from discontinued operations - basic

 

$                 (0.51)

 

$                   0.05 

 

$                 (0.92)

 

$                   0.18 

Net income (loss) per share - basic

 

$                 (0.54)

 

$                 (0.15)

 

$                 (1.65)

 

$                 (0.14)



 

 

 

 

 

 

 

 

Net loss per share from continuing operations - diluted

 

$                 (0.03)

 

$                 (0.20)

 

$                 (0.73)

 

$                 (0.32)

Net income (loss) per share from discontinued operations - diluted

 

$                 (0.51)

 

$                   0.05 

 

$                 (0.92)

 

$                   0.18 

Net income (loss) per share - diluted

 

$                 (0.54)

 

$                 (0.15)

 

$                 (1.65)

 

$                 (0.14)



The accompanying notes are an integral part of these consolidated statements.

5

 


 





THE BANCORP INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME







 

 

 



 

 

 



For the nine months



ended September 30,



2016

 

2015



(in thousands)

Net income (loss)

 

 

 

Other comprehensive income (loss) net of reclassifications into net income:

$                (67,720)

 

$                (5,187)



 

 

 

Other comprehensive income (loss)

 

 

 

Change in net unrealized gain (loss) during the period

19,207 

 

(1,598)

Reclassification adjustments for losses included in income

(3,131)

 

62 

Reclassification adjustments for foreign currency translation (gains)/losses

335 

 

(449)

Amortization of losses previously held as available-for-sale

25 

 

42 

Net unrealized gain (loss)

16,436 

 

(1,943)



 

 

 

Deferred tax expense

 

 

 

 Securities available-for-sale:

 

 

 

Change in net unrealized gain during the period

7,683 

 

(315)

Reclassification adjustments for losses included in income

(1,252)

 

29 

Amortization of losses previously held as available-for-sale

10 

 

14 

Income tax expense (benefit) related to items of other comprehensive income

6,441 

 

(272)



 

 

 

Other comprehensive income (loss) net of tax and reclassifications into net income

9,995 

 

(1,671)

Comprehensive loss

$                (57,725)

 

$                (6,858)



The accompanying notes are an integral part of these consolidated statements.





 

6

 


 





THE BANCORP INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY





 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the nine months ended September 30, 2016



 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands, except share data)



 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 



 

Common

 

 

 

 

 

Additional

 

 

 

other

 

 



 

stock

 

Common

 

Treasury

 

paid-in

 

Retained

 

comprehensive

 

 



 

shares

 

stock

 

stock

 

capital

 

earnings

 

income

 

Total



 

 

 

 

Balance at January 1, 2016

 

37,861,218 

 

$        37,861 

 

$        (866)

 

$      300,549 

 

$       (15,449)

 

$              (2,094)

 

$          320,001 

Net loss

 

 

 

 

 

 

 

 

 

(67,720)

 

 

 

(67,720)

Issuance of common stock

 

17,473,881 

 

17,474 

 

 -

 

57,338 

 

 -

 

 -

 

74,812 

Common stock issued as restricted shares,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

net of tax benefits

 

84,020 

 

84 

 -

 -

 

(84)

 

 -

 

 -

 

 -

Stock-based compensation

 

 -

 

 -

 

 -

 

1,990 

 

 -

 

 -

 

1,990 

Other comprehensive income net of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

reclassification adjustments and tax

 

 -

 

 -

 

 -

 

 -

 

 -

 

9,995 

 

9,995 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at September 30, 2016

 

55,419,119 

 

$        55,419 

 

$        (866)

 

$      359,793 

 

$       (83,169)

 

$                7,901 

 

$          339,078 



The accompanying notes are an integral part of this consolidated statement.





7

 


 





THE BANCORP, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS









 

 

 

 



 

 

 

 



 

 



 

For the nine months



 

ended September 30,



 

2016

 

2015



 

(in thousands)

Operating activities

 

 

 

 

Net loss from continuing operations

 

$          (29,811)

 

$          (11,923)

Net income (loss) from discontinued operations

 

(37,909)

 

6,736 

Adjustments to reconcile net income to net cash

 

 

 

 

provided by operating activities

 

 

 

 

Depreciation and amortization

 

4,783 

 

4,461 

Provision for loan and lease losses

 

1,810 

 

1,800 

Net amortization of investment securities discounts/premiums

 

6,066 

 

10,279 

Stock-based compensation expense

 

1,990 

 

1,532 

Loans originated for sale

 

(372,065)

 

(427,680)

Sale of loans originated for resale

 

299,855 

 

296,907 

Loss (gain) on sales of loans originated for resale

 

(809)

 

(6,747)

Gain on sale of fixed assets

 

(21)

 

(10)

Fair value adjustment on investment in unconsolidated entity

 

14,753 

 

 -

Loss (gain) on sales of investment securities

 

(3,131)

 

62 

Decrease (increase) in accrued interest receivable

 

(1,025)

 

19 

Increase in other assets

 

(19,290)

 

(8,190)

Increase in discontinued assets held for sale

 

(5,779)

 

(2,516)

Increase (decrease) in other liabilities

 

10,505 

 

(5,595)

 Net cash provided by (used in) operating activities

 

(130,078)

 

(140,865)



 

 

 

 

Investing activities

 

 

 

 

Purchase of investment securities available-for-sale

 

(499,969)

 

(97,045)

Proceeds from sale of investment securities available-for-sale

 

115,637 

 

94,288 

Proceeds from redemptions and prepayments of securities held-to-maturity

 

51 

 

118 

Proceeds from redemptions and prepayments of securities available-for-sale

 

133,212 

 

167,898 

Net increase in loans

 

(120,312)

 

(121,169)

Net decrease in discontinued loans held for sale

 

203,533 

 

278,717 

Proceeds from sale of fixed assets

 

341 

 

220 

Purchases of premises and equipment

 

(4,237)

 

(4,974)

Investment in unconsolidated entity

 

6,371 

 

6,939 

 Net cash provided by (used in) by investing activities

 

(165,373)

 

324,992 



 

 

 

 

Financing activities

 

 

 

 

Net decrease in deposits

 

(647,822)

 

(242,569)

Net decrease in securities sold under agreements to repurchase

 

(572)

 

(18,380)

Proceeds of short-term borrowings and federal funds purchased

 

70,000 

 

 -

Proceeds from issuance of common stock

 

74,812 

 

 -

 Net cash used in financing activities

 

(503,582)

 

(260,949)



 

 

 

 

 Net decrease in cash and cash equivalents

 

(799,033)

 

(76,822)



 

 

 

 

Cash and cash equivalents, beginning of period

 

1,155,162 

 

1,114,235 



 

 

 

 

Cash and cash equivalents, end of period

 

$          356,129 

 

$       1,037,413 



 

 

 

 

Supplemental disclosure:

 

 

 

 

Interest paid

 

$              9,514 

 

$              9,584 

Taxes paid

 

$                 366 

 

$                 592 











The accompanying notes are an integral part of these consolidated statements.

8

 


 

THE BANCORP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLDIATED FINANCIAL STATEMENTS



Note 1. Structure of Company

The Bancorp, Inc. (the Company) is a Delaware corporation and a registered financial holding company. Its primary subsidiary is The Bancorp Bank (the Bank) which is wholly owned by the Company. The Bank is a Delaware chartered commercial bank located in Wilmington, Delaware and is a Federal Deposit Insurance Corporation (FDIC) insured institution.  In its continuing operations, the Bank has four primary lines of specialty lending: securities-backed lines of credit (SBLOC), leasing, Small Business Administration (SBA) loans and loans generated for sale into capital markets primarily through commercial mortgage backed securities (CMBS). Through the Bank, the Company also provides banking services nationally, which include prepaid cards, private label banking, institutional banking, card payment and other payment processing.  European operations are comprised of three operational service subsidiaries, Transact Payment Services Group Limited, Transact Payment Services Limited and Transact Payment Services Group-Bulgaria EOOD and its subsidiary, Transact Payments Limited, which offer prepaid card and electronic money issuing services.

The Company and the Bank are subject to regulation by certain state and federal agencies and, accordingly, they are examined periodically by those regulatory authorities.  As a consequence of the extensive regulation of commercial banking activities, the Company’s and the Bank’s businesses may be affected by state and federal legislation and regulations.

Note 2. Significant Accounting Policies



Basis of Presentation

The financial statements of the Company, as of September 30, 2016 and for the three and nine month periods ended September 30, 2016 and 2015, are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP)  have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. However, in the opinion of management, these interim financial statements include all necessary adjustments to fairly present the results of the interim periods presented. The unaudited interim consolidated financial statements should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (2015 Form 10-K Report). Note T in those financial statements presents restated interim financial statements as described therein. The results of operations for the nine month period ended September 30, 2016 may not necessarily be indicative of the results of operations for the full year ending December 31, 2016.

Note 3. Share-based Compensation



The Company recognizes compensation expense for stock options in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 718, Stock Based Compensation. The expense of the option is generally measured at fair value at the grant date with compensation expense recognized over the service period, which is typically the vesting period. For grants subject to a service condition, the Company utilizes the Black-Scholes option-pricing model to estimate the fair value of each option on the date of grant. The Black-Scholes model takes into consideration the exercise price and expected life of the options, the current price of the underlying stock and its expected volatility, the expected dividends on the stock and the current risk-free interest rate for the expected life of the option. The Company’s estimate of the fair value of a stock option is based on expectations derived from historical experience and may not necessarily equate to its market value when fully vested. In accordance with ASC 718, the Company estimates the number of options for which the requisite service is expected to be rendered. At September 30, 2016, the Company had three stock-based compensation plans, which are more fully described in its 2015 Form 10-K Report.  



The Company granted 300,000 stock options with a vesting period of four years in the first nine months of 2016. The weighted average grant-date fair value was $2.89. The Company did not grant stock options in the first nine months of 2015There were no stock options exercised in the nine month periods ended September 30, 2016 or September 30, 2015.  



9

 


 

A summary of the status of the Company’s equity compensation plans is presented below.







 

 

 

 

 

 

 



 

 

 

 

 

 

 



 

 

 

 

Weighted-

 

 



 

 

 

 

average

 

 



 

 

Weighted

 

remaining

 

 



 

 

average

 

contractual

 

Aggregate



 

 

exercise

 

term

 

intrinsic



Shares

 

price

 

(years)

 

value

Outstanding at January 1, 2016

1,977,500 

 

$                   8.58 

 

5.47 

 

$                         - 

Granted

300,000 

 

6.75 

 

3.67 

 

 -

Exercised

 -

 

 -

 

 -

 

 -

Expired

(1,000)

 

20.98 

 

 -

 

 -

Forfeited

(240,000)

 

8.28 

 

 -

 

 -

Outstanding at September 30, 2016

2,036,500 

 

$                   8.34 

 

5.49 

 

$                         - 

Exercisable at September 30, 2016

1,661,500 

 

$                   8.55 

 

4.66 

 

$                         - 





The Company granted 789,000 restricted stock units (RSUs) in the first nine months of 2016 of which 620,000 have a vesting period of three years and 169,000 have a vesting period of one year489,000 RSUs have a fair value of $4.50 and 300,000 RSUs have a fair value of $6.75.  The Company granted 86,992 RSUs with a vesting period of two years at a fair value of $9.11 in the first nine months of 2015.  The total fair value of RSUs vested for the nine months ended September 30, 2016 and 2015 was $830,000 and $517,000, respectively.



A summary of the status of the Company’s RSUs is presented below.





 

 

 

 

 



 

 

 

 

 



 

 

 

 

Average



 

 

Weighted-

 

remaining



 

 

average

 

contractual



 

 

grant date

 

term



Shares

 

fair value

 

(years)

Outstanding at January 1, 2016

168,045 

 

$                9.88

 

1.12 

Granted

789,000 

 

5.36 

 

 -

Vested

(84,020)

 

9.88 

 

                   -  

Forfeited

(41,250)

 

6.12 

 

                   -  

Outstanding at September 30, 2016

831,775 

 

$                5.77

 

1.88 



As of September 30, 2016, there was a total of $4.3 million of unrecognized compensation cost related to unvested awards under share-based plans.  This cost is expected to be recognized over a weighted average period of approximately two years.  Related compensation expense for the nine months ended September 30, 2016 and 2015 was $2.0 million and $1.5 million, respectively.



Note 4. Earnings Per Share



The Company calculates earnings per share under ASC 260, Earnings Per Share. Basic earnings per share exclude dilution and are computed by dividing income available to common shareholders by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock.



10

 


 

The following tables show the Company’s earnings per share for the periods presented:







 

 

 

 

 

 



 

 

 

 

 

 



 

For the three months ended



 

September 30, 2016



 

Income

 

Shares

 

Per share



 

(numerator)

 

(denominator)

 

amount



 

 

 

 

 

 



 

(dollars in thousands except share and per share data)

Basic loss per share from continuing operations

 

 

 

 

 

 

Net loss available to common shareholders

 

$               (1,530)

 

47,153,658 

 

$                 (0.03)

Effect of dilutive securities

 

 

 

 

 

 

Common stock options

 

 -

 

 -

 

 -

Diluted loss per share

 

 

 

 

 

 

Net loss available to common shareholders

 

$               (1,530)

 

47,153,658 

 

$                 (0.03)







 

 

 

 

 

 



 

 

 

 

 

 



 

For the three months ended



 

September 30, 2016



 

Income

 

Shares

 

Per share



 

(numerator)

 

(denominator)

 

amount



 

 

 

 

 

 



 

(dollars in thousands except share and per share data)

Basic loss per share from discontinued operations

 

 

 

 

 

 

Net loss available to common shareholders

 

$             (24,021)

 

47,153,658 

 

$                 (0.51)

Effect of dilutive securities

 

 

 

 

 

 

Common stock options

 

 -

 

 -

 

 -

Diluted loss per share

 

 

 

 

 

 

Net loss available to common shareholders

 

$             (24,021)

 

47,153,658 

 

$                 (0.51)







 

 

 

 

 

 



 

 

 

 

 

 



 

For the three months ended



 

September 30, 2016



 

Income

 

Shares

 

Per share



 

(numerator)

 

(denominator)

 

amount



 

 

 

 

 

 



 

(dollars in thousands except share and per share data)

Basic loss per share

 

 

 

 

 

 

Net loss available to common shareholders

 

$             (25,551)

 

47,153,658 

 

$                 (0.54)

Effect of dilutive securities

 

 

 

 

 

 

Common stock options

 

 -

 

 -

 

 -

Diluted loss per share

 

 

 

 

 

 

Net loss available to common shareholders

 

$             (25,551)

 

47,153,658 

 

$                 (0.54)



Stock options for 2,036,500 shares, exercisable at prices between $6.75 and $25.43 per share, were outstanding at September 30, 2016, but were not included in the dilutive shares because the Company had a net loss available to common shareholders.





11

 


 



 

 

 

 

 

 



 

 

 

 

 

 



 

For the nine months ended



 

September 30, 2016



 

Income

 

Shares

 

Per share



 

(numerator)

 

(denominator)

 

amount



 

(dollars in thousands except share and per share data)

Basic loss per share from continuing operations

 

 

 

 

 

 

Net loss available to common shareholders

 

$             (29,811)

 

40,957,247 

 

$                 (0.73)

Effect of dilutive securities

 

 

 

 

 

 

Common stock options

 

 -

 

 -

 

 -

Diluted loss per share

 

 

 

 

 

 

Net loss available to common shareholders

 

$             (29,811)

 

40,957,247 

 

$                 (0.73)







 

 

 

 

 

 



 

 

 

 

 

 



 

For the nine months ended



 

September 30, 2016



 

Income

 

Shares

 

Per share



 

(numerator)

 

(denominator)

 

amount



 

(dollars in thousands except share and per share data)

Basic loss per share from discontinued operations

 

 

 

 

 

 

Net loss available to common shareholders

 

$             (37,909)

 

40,957,247 

 

$                 (0.92)

Effect of dilutive securities

 

 

 

 

 

 

Common stock options

 

 -

 

 -

 

 -

Diluted loss per share

 

 

 

 

 

 

Net loss available to common shareholders

 

$             (37,909)

 

40,957,247 

 

$                 (0.92)







 

 

 

 

 

 



 

 

 

 

 

 



 

For the nine months ended



 

September 30, 2016



 

Income

 

Shares

 

Per share



 

(numerator)

 

(denominator)

 

amount



 

 

 

 

 

 



 

(dollars in thousands except share and per share data)

Basic loss per share

 

 

 

 

 

 

Net loss available to common shareholders

 

$             (67,720)

 

40,957,247 

 

$                 (1.65)

Effect of dilutive securities

 

 

 

 

 

 

Common stock options

 

 -

 

 -

 

 -

Diluted loss per share

 

 

 

 

 

 

Net loss available to common shareholders

 

$             (67,720)

 

40,957,247 

 

$                 (1.65)



Stock options for 2,036,500 shares, exercisable at prices between $6.75 and $25.43 per share, were outstanding at September 30, 2016, but were not included in the dilutive shares because the Company had a net loss available to common shareholders.



 

 

 

 

 

 



 

 

 

 

 

 



 

For the three months ended



 

September 30, 2015



 

Income

 

Shares

 

Per share



 

(numerator)

 

(denominator)

 

amount



 

 

 

 

 

 



 

(dollars in thousands except share and per share data)

Basic earnings (loss) per share from continuing operations

 

 

 

 

 

 

Net income (loss) available to common shareholders

 

$               (7,617)

 

37,758,322 

 

$                 (0.20)

Effect of dilutive securities