Before I turn the call over to Betsy, I would like to remind everyone that when using this conference call, the words believes, anticipates, expects, and similar expressions are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risk and uncertainties, which could cause actual results to differ materially from those anticipated or suggested by such statements. For further discussion of these risks and uncertainties, please see The Bancorp’s filings with the SEC. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Bancorp undertakes no obligation to publicly release the results of any revisions or forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.Now, I’d like to turn the call over to Betsy Cohen. Betsy? Betsy Zubrow Cohen Thank you very much, Andres and thank you all for joining us today. During the third quarter, we continued to pursue vigorously our existing business model. On the asset side, we not only increase loans on a year-over-year basis by 8%, but within that category saw growth and both in balance sheet impact and in pipeline from our SBA business, and our direct leasing business, which grew year-over-year from about $100 million to about $130 million, and we foresee further increases. Again, pursuing the past that we have discussed before, we continue to buy securities to broaden our net interest margin, and so total assets grew, securities and loans grew by 16% on a year-over-year basis. If one were to back out, what we consider to be excess deposits on a seasonal basis, the net interest margin for the third quarter was approximately 3.62%, compared to the linked-quarter at 3.54%, and on a comparable year-over-year basis to the quarter ending 12/31/10 sorry, for the quarter ending 12/31/10 at approximately 3.75%.
On the deposit side, we feel that not only do we have a significant pipeline of very significant partners with whom we will be launching. We have and we will be launching projects, but the Dodd-Frank Act has really been a help to us in that it has identified an opportunity within the market for us to pursue clients who are eager to not have the restrictions imposed by their relationships with banks, $10 billion and above. Some of these large clients take longer to launch than the smaller members or partners, potential partners within the pipeline. And I think Frank is going to talk about that in a little bit, in the context of linked-quarter non-interest income in the prepaid area.On the deposit side, however, we continue to have a very significant growth and it is as a result not only of new relationships, but of the volume increases in old relationships. If we were to compare our non-interest income on a third quarter to third quarter basis, and remembering the seasonality of our business, we think that’s the appropriate approach. Prepaid card fees increased 62% from the same quarter 2010 and a 45% increase in third-quarter excuse me, year-to-date and the third, and a 45% increase in third quarter 2011 over third quarter 2010 both of those are very good numbers we feel. We think we have achieved some operating leverage during this quarter that is expressed both in quarter earnings of 40% increase year-over-year, and also in the efficiency ratio, which is improved from approximately 67%, excuse me to approximately 67% from approximately 73%. And that of course is a result of increased revenues, and so given the increases that we’ve just reported we would hope that you would see further improvement in net efficiency ratios as the quarters go forward.
This is a quarter in which credit losses were stable, but credit allocations and provisions were reduced from the link quarter on a year-to-date basis, 2011 over 2010. The aggregate provision was up by about $1.6 million. We have experienced during this quarter we will have link quarter basis at down tick in expenses. We cautioned you that not all of that is from efficiencies in operations although some portion of it is, but primarily due to the absence this quarter of any, or reduction in OREO expenses and other credit related expenses. Not bad news, but not totally from the operating side.Read the rest of this transcript for free on seekingalpha.com