The Bancorp, Inc. ("The Bancorp") (NASDAQ: TBBK), a financial
holding company, today reported financial results for the third
quarter of 2021.
Highlights
- For the quarter ended September 30, 2021, The Bancorp earned
net income of $28.3 million, or $0.48 diluted earnings per
share.
- Return on assets and equity for the quarter ended September 30,
2021 amounted to 1.8% and 18%, respectively, compared to 1.5% and
17%, respectively, for the quarter ended September 30, 2020 (all
percentages “annualized.”)
- Net interest margin amounted to 3.35% for the quarter ended
September 30, 2021, compared to 3.37% for the quarter ended
September 30, 2020 and 3.19% for the quarter ended June 30,
2021.
- Net interest income was $50.9 million for the quarter ended
September 30, 2021 compared to $50.0 million for the quarter ended
September 30, 2020. In third quarter 2021, growth in net interest
income was significantly offset by the $1.9 million impact of loan
prepayments on commercial real estate loan interest. However, net
realized and unrealized gains on commercial loans increased $3.6
million in third quarter 2021 compared to third quarter 2020, which
resulted primarily from fees related to those prepayments. In the
third quarter of 2021, we recommenced the origination of such
loans, identified as real estate bridge loans, which are intended
to offset the impact of prepayments and payoffs.
- Average loans and leases, including loans at fair value,
increased 9% to $4.58 billion for the quarter ended September 30,
2021, compared to $4.21 billion for the quarter ended September 30,
2020.
- Gross dollar volume (“GDV”), representing the total amounts
spent on prepaid and debit cards, increased $428.7 million, or 2%,
to $24.4 billion for the quarter ended September 30, 2021 compared
to the quarter ended September 30, 2020. GDV for the 2020 quarter
included the impact of significant government stimulus resulting
from the Covid-19 pandemic.
- SBLOC (securities backed lines of credit), IBLOC (insurance
backed lines of credit) and investment advisor financing loans
collectively increased 32% year over year and 6% quarter over
quarter to $1.92 billion at September 30, 2021.
- Small Business Loans, including those held at fair value, grew
12% year over year to $709.5 million at September 30, 2021. That
growth and $709.5 million balance are exclusive of Paycheck
Protection Program (“PPP”) loan balances of $71.3 million and
$207.9 million, respectively, at September 30, 2021 and September
30, 2020.
- Direct lease financing balances increased 19% year over year to
$514.1 million at September 30, 2021.
- The average interest rate on $5.66 billion of average deposits
and interest-bearing liabilities during the third quarter of 2021
was 0.18%. Average deposits of $5.53 billion for the third quarter
2021, reflected a decrease of 1% from the $5.56 billion of average
deposits for the quarter ended September 30, 2020.
- As of September 30, 2021, substantially all of the borrowers
with Covid-19 related payment deferrals had recommenced making
payments, with only approximately $1.3 million of non-U.S.
guaranteed loan principal remaining in deferral.
- Consolidated and The Bancorp Bank (“the Bank”) leverage ratios
were 9.82% and 10.24%, respectively, at September 30, 2021. The
Bancorp and its subsidiary, The Bank, remain well capitalized.
- Book value per common share at September 30, 2021 was $11.13
per share compared to $9.71 per share at September 30, 2020, an
increase of 15%, primarily as a result of retained earnings.
- The Bancorp repurchased 440,887 shares of its common stock at
an average cost of $22.68 per share during the quarter ended
September 30, 2021.
“We continue to experience business momentum across our platform
and strong pipelines that will support continued growth into 2022”,
said CEO and President Damian Kozlowski. “We are issuing
preliminary guidance of $2.15 a share for 2022 or approximately 21%
growth over the current 2021 guidance of $1.78. The $2.15 does not
include the impact of planned buybacks. In addition, in 2022, we
intend to increase our stock buyback to $15 million a quarter from
$10 million a quarter.”
The Bancorp reported net income of $28.3 million, or $0.48 per
diluted share, for the quarter ended September 30, 2021, compared
to net income of $23.3 million, or $0.40 per diluted share, for the
quarter ended September 30, 2020. Tier one capital to assets
(leverage), tier one capital to risk-weighted assets, total capital
to risk-weighted assets and common equity-tier 1 to risk-weighted
assets ratios were 9.82%, 15.69%, 16.10% and 15.69%, respectively,
compared to well-capitalized minimums of 5%, 8%, 10% and 6.5%,
respectively.
Conference Call Webcast
You may access the LIVE webcast of The Bancorp's Quarterly
Earnings Conference Call at 8:00 AM ET Friday, October 29, 2021 by
clicking on the webcast link on The Bancorp's homepage at
www.thebancorp.com. Or, you may dial 844.775.2543, access code
9257937. You may listen to the replay of the webcast following the
live call on The Bancorp's investor relations website or
telephonically until Friday, November 5, 2021 by dialing
855.859.2056, access code 9257937.
The Bancorp, Inc. (NASDAQ: TBBK), headquartered in Wilmington,
Delaware, through its subsidiary, The Bancorp Bank, provides
non-bank financial companies with the people, processes, and
technology to meet their unique banking needs. Through its Fintech
Solutions, Institutional Banking, Commercial Lending, and Real
Estate Bridge Lending businesses, The Bancorp provides
partner-focused solutions paired with cutting-edge technology for
companies that range from entrepreneurial startups to Fortune 500
companies. With over 20 years of experience, The Bancorp has become
a leader in the financial services industry, earning recognition as
the #1 issuer of prepaid cards in the U.S., a nationwide provider
of bridge financing for real estate capital improvement plans, an
SBA National Preferred Lender, a leading provider of
securities-backed lines of credit, with one of the few bank-owned
commercial vehicle leasing groups. By its company-wide commitment
to excellence, The Bancorp has also been ranked as one of the 100
Fastest-Growing Companies by Fortune, a Top 50 Employer by Equal
Opportunity Magazine, and was selected to be included in the
S&P Small Cap 600. For more about The Bancorp, visit
https://thebancorp.com/.
Forward-Looking Statements
Statements in this earnings release regarding The Bancorp’s
business which are not historical facts are "forward-looking
statements." These statements may be identified by the use of
forward-looking terminology, including but not limited to the words
“may,” “believe,” “will,” “expect,” “look,” “anticipate,” “plan,”
“estimate,” “continue,” or similar words , and are based on current
expectations about important economic, political, and technological
factors, among others, and are subject to risks and uncertainties,
which could cause the actual results, events or achievements to
differ materially from those set forth in or implied by the
forward-looking statements and related assumptions. For further
discussion of the risks and uncertainties to which these
forward-looking statements may be subject, see The Bancorp’s
filings with the Securities and Exchange Commission, including the
“Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” sections of those
filings. The forward-looking statements speak only as of the date
of this press release. The Bancorp does not undertake to publicly
revise or update forward-looking statements in this press release
to reflect events or circumstances that arise after the date of
this press release, except as may be required under applicable
law.
The Bancorp, Inc.
Financial highlights
(unaudited)
Three months ended
Nine months ended
September 30,
September 30,
Condensed income statement
2021
2020
2021
2020
(in thousands, except per share
data)
Net interest income
$
50,893
$
49,996
$
158,719
$
143,153
Provision for credit losses
1,613
1,297
1,484
5,798
Non-interest income
ACH, card and other payment processing
fees
1,905
1,760
5,605
5,313
Prepaid, debit card and related fees
18,223
19,434
56,878
56,647
Net realized and unrealized gains (losses)
on commercial
loans, at fair value
4,306
684
8,881
(5,412)
Change in value of investment in
unconsolidated entity
—
—
—
(45)
Leasing related income
1,968
1,519
4,700
2,795
Other non-interest income
186
955
459
2,019
Total non-interest income
26,588
24,352
76,523
61,317
Non-interest expense
Salaries and employee benefits
25,094
26,417
77,839
74,650
Data processing expense
1,209
1,192
3,481
3,538
Legal expense
1,251
994
5,349
4,136
FDIC insurance
266
2,180
5,235
7,687
Software
4,045
3,595
11,435
10,458
Other non-interest expense
7,519
7,648
21,811
22,595
Total non-interest expense
39,384
42,026
125,150
123,064
Income from continuing operations before
income taxes
36,484
31,025
108,608
75,608
Income tax expense
8,289
7,894
25,195
19,033
Net income from continuing operations
28,195
23,131
83,413
56,575
Discontinued operations
Income (loss) from discontinued operations
before income taxes
87
(1,671)
324
(2,720)
Income tax expense (benefit)
21
(1,794)
76
(2,058)
Net income (loss) from discontinued
operations, net of tax
66
123
248
(662)
Net income
$
28,261
$
23,254
$
83,661
$
55,913
Net income per share from continuing
operations - basic
$
0.49
$
0.40
$
1.45
$
0.98
Net income (loss) per share from
discontinued operations - basic
$
—
$
—
$
0.01
$
(0.01)
Net income per share - basic
$
0.49
$
0.40
$
1.46
$
0.97
Net income per share from continuing
operations - diluted
$
0.48
$
0.40
$
1.41
$
0.97
Net income (loss) per share from
discontinued operations - diluted
$
—
$
—
$
0.01
$
(0.01)
Net income per share - diluted
$
0.48
$
0.40
$
1.42
$
0.96
Weighted average shares - basic
57,198,778
57,588,168
57,221,174
57,433,477
Weighted average shares - diluted
58,628,306
58,471,192
58,932,146
58,051,833
Note: Compared to higher rates in recent periods, the effective
tax rate for the three and nine months ended September 30, 2021
approximated 23% as a result of the impact of excess tax deductions
related to stock-based compensation, recorded as discrete items.
The large deductions and tax benefits resulted from the increase in
the Company’s stock price as compared to the original grant
date.
Balance sheet
September 30,
June 30,
December 31,
September 30,
2021 (unaudited)
2021 (unaudited)
2020
2020 (unaudited)
(in thousands, except share
data)
Assets:
Cash and cash equivalents
Cash and due from banks
$
6,687
$
5,470
$
5,984
$
6,220
Interest earning deposits at Federal
Reserve Bank
310,642
583,498
339,531
294,758
Total cash and cash equivalents
317,329
588,968
345,515
300,978
Investment securities, available-for-sale,
at fair value
1,054,223
1,106,075
1,206,164
1,264,903
Commercial loans, at fair value
1,550,025
1,690,216
1,810,812
1,849,947
Loans, net of deferred fees and costs
3,136,662
2,915,344
2,652,323
2,488,760
Allowance for credit losses
(16,159
)
(15,292
)
(16,082
)
(15,727
)
Loans, net
3,120,503
2,900,052
2,636,241
2,473,033
Federal Home Loan Bank and Atlantic
Central Bankers Bank stock
1,663
1,667
1,368
1,368
Premises and equipment, net
16,602
17,392
17,608
15,849
Accrued interest receivable
17,180
18,668
20,458
18,852
Intangible assets, net
2,547
2,646
2,845
2,563
Other real estate owned
2,145
—
—
—
Deferred tax asset, net
12,237
10,923
9,757
7,952
Investment in unconsolidated entity, at
fair value
—
24,988
31,294
31,783
Assets held-for-sale from discontinued
operations
87,904
97,496
113,650
122,253
Other assets
86,105
91,516
81,129
79,821
Total assets
$
6,268,463
$
6,550,607
$
6,276,841
$
6,169,302
Liabilities:
Deposits
Demand and interest checking
$
4,734,352
$
5,225,024
$
5,205,010
$
4,882,834
Savings and money market
378,160
459,688
257,050
505,928
Total deposits
5,112,512
5,684,712
5,462,060
5,388,762
Securities sold under agreements to
repurchase
42
42
42
42
Short-term borrowings
300,000
—
—
—
Senior debt
98,590
98,498
98,314
98,222
Subordinated debenture
13,401
13,401
13,401
13,401
Other long-term borrowings
39,715
39,901
40,277
40,462
Other liabilities
66,226
94,944
81,583
69,954
Total liabilities
$
5,630,486
$
5,931,498
$
5,695,677
$
5,610,843
Shareholders' equity:
Common stock - authorized, 75,000,000
shares of $1.00 par value; 57,330,846 and 57,490,874 shares issued
and outstanding at September 30, 2021 and 2020, respectively
57,331
57,458
57,551
57,491
Additional paid-in capital
357,528
363,241
377,452
375,985
Retained earnings
212,114
183,853
128,453
104,282
Accumulated other comprehensive income
11,004
14,557
17,708
20,701
Total shareholders' equity
637,977
619,109
581,164
558,459
Total liabilities and shareholders'
equity
$
6,268,463
$
6,550,607
$
6,276,841
$
6,169,302
Note: Previous balance sheets included investment in
unconsolidated entity, which reflected Bancorp’s balance of the
Walnut Street investment. Walnut Street was comprised of Bancorp
loans sold to that entity, which was partially financed by an
independent investor. In the third quarter of 2021, The Bancorp and
that investor dissolved the entity, as the remaining balance did
not warrant ongoing administrative and accounting expenses. As a
result of the dissolution, the investment in unconsolidated entity,
which had a June 30, 2021 balance of $25.0 million, was
reclassified as follows. Approximately $22.9 million of loans were
reclassified to commercial loans, at fair value and $2.1 million
was reclassified to other real estate owned, as those assets
continue to be reported at fair value.
Average balance sheet and net interest
income
Three months ended September 30,
2021
Three months ended September 30,
2020
(dollars in thousands;
unaudited)
Average
Average
Average
Average
Assets:
Balance
Interest
Rate
Balance
Interest
Rate
Interest earning assets:
Loans, net of deferred fees and
costs**
$
4,573,431
$
46,357
4.05%
$
4,202,054
$
44,318
4.22%
Leases-bank qualified*
5,031
87
6.92%
8,026
146
7.28%
Investment securities-taxable
1,012,007
6,882
2.72%
1,300,191
7,911
2.43%
Investment securities-nontaxable*
3,558
32
3.60%
4,041
35
3.46%
Interest earning deposits at Federal
Reserve Bank
479,350
167
0.14%
413,259
106
0.10%
Net interest earning assets
6,073,377
53,525
3.53%
5,927,571
52,516
3.54%
Allowance for credit losses
(16,277)
(14,587)
Assets held-for-sale from discontinued
operations
90,598
754
3.33%
124,916
890
2.85%
Other assets
214,715
195,125
$
6,362,413
$
6,233,025
Liabilities and Shareholders'
Equity:
Deposits:
Demand and interest checking
$
5,124,189
$
1,063
0.08%
$
5,079,711
$
1,591
0.13%
Savings and money market
404,775
146
0.14%
484,323
139
0.11%
Total deposits
5,528,964
1,209
0.09%
5,564,034
1,730
0.12%
Short-term borrowings
13,097
7
0.21%
3,260
1
0.12%
Repurchase agreements
41
—
—
41
—
—
Subordinated debentures
13,401
112
3.34%
13,401
118
3.52%
Senior debt
100,329
1,279
5.10%
53,260
633
4.75%
Total deposits and liabilities
5,655,832
2,607
0.18%
5,633,996
2,482
0.18%
Other liabilities
78,038
53,260
Total liabilities
5,733,870
5,687,256
Shareholders' equity
628,543
545,769
$
6,362,413
$
6,233,025
Net interest income on tax equivalent
basis*
$
51,672
$
50,924
Tax equivalent adjustment
25
38
Net interest income
$
51,647
$
50,886
Net interest margin *
3.35%
3.37%
* Full taxable equivalent basis, using a statutory Federal tax
rate of 21% for 2021 and 2020. ** Includes commercial loans, at
fair value. All periods include non-accrual loans.
NOTE: In the table above, interest on loans for 2021 includes
$1.2 million of interest and fees on PPP loans. In 2020 the table
above includes comparable PPP interest and fees of $2.1
million.
Average balance sheet and net interest
income
Nine months ended September 30,
2021
Nine months ended September 30,
2020
(dollars in thousands;
unaudited)
Average
Average
Average
Average
Assets:
Balance
Interest
Rate
Balance
Interest
Rate
Interest earning assets:
Loans, net of deferred fees and
costs**
$
4,541,262
$
143,546
4.21%
$
3,798,104
$
124,924
4.39%
Leases-bank qualified*
5,925
301
6.77%
9,401
509
7.22%
Investment securities-taxable
1,094,633
22,891
2.79%
1,343,211
28,594
2.84%
Investment securities-nontaxable*
3,824
99
3.45%
4,537
110
3.23%
Interest earning deposits at Federal
Reserve Bank
781,606
650
0.11%
444,323
1,836
0.55%
Net interest earning assets
6,427,250
167,487
3.47%
5,599,576
155,973
3.71%
Allowance for credit losses
(16,254)
(13,225)
Assets held for sale from discontinued
operations
99,472
2,388
3.20%
130,880
3,259
3.32%
Other assets
225,802
243,629
$
6,736,270
$
5,960,860
Liabilities and Shareholders'
Equity:
Deposits:
Demand and interest checking
$
5,452,604
$
4,007
0.10%
$
4,858,666
$
9,676
0.27%
Savings and money market
446,016
487
0.15%
298,049
309
0.14%
Time deposits
—
—
—
106,113
1,483
1.86%
Total deposits
5,898,620
4,494
0.10%
5,262,828
11,468
0.29%
Short-term borrowings
8,717
15
0.23%
25,419
181
0.95%
Repurchase agreements
41
—
—
51
—
—
Subordinated debentures
13,401
337
3.35%
13,401
408
4.06%
Senior debt
100,237
3,838
5.11%
17,883
633
4.72%
Total deposits and liabilities
6,021,016
8,684
0.19%
5,319,582
12,690
0.32%
Other liabilities
105,683
119,961
Total liabilities
6,126,699
5,439,543
Shareholders' equity
609,571
521,317
$
6,736,270
$
5,960,860
Net interest income on tax equivalent
basis*
$
161,191
$
146,542
Tax equivalent adjustment
84
130
Net interest income
$
161,107
$
146,412
Net interest margin *
3.29%
3.41%
* Full taxable equivalent basis, using a statutory Federal tax
rate of 21% for 2021 and 2020. ** Includes commercial loans, at
fair value. All periods include non-accrual loans.
NOTE: In the table above, the 2021 interest on loans reflects
$4.6 million of interest and fees which were earned on a short-term
line of credit to another institution to initially fund PPP loans,
which did not significantly increase average loans or assets and
which are not expected to recur. Interest on loans in 2021 also
includes $4.9 million of interest and fees on PPP loans. In 2020
the table above includes comparable PPP interest and fees of $3.7
million. Increases in interest earning deposits at the Federal
Reserve Bank reflect increased deposits resulting from stimulus
payments distributed to a large segment of the population,
resulting from December 2020 federal legislation.
Allowance for credit losses
Nine months ended
Year ended
September 30,
September 30,
December 31,
2021 (unaudited)
2020 (unaudited)
2020
(dollars in thousands)
Balance in the allowance for credit losses
at beginning of period (1)
$
16,082
$
12,875
$
12,875
Loans charged-off:
SBA non-real estate
896
1,350
1,350
SBA commercial mortgage
23
–
–
Direct lease financing
248
2,178
2,243
SBLOC
15
–
–
Consumer - home equity
10
–
–
Total
1,192
3,528
3,593
Recoveries:
SBA non-real estate
18
82
103
SBA commercial mortgage
9
–
–
Direct lease financing
50
502
570
Total
77
584
673
Net charge-offs
1,115
2,944
2,920
Provision credited to allowance, excluding
commitment provision
1,192
5,796
6,127
Balance in allowance for credit losses at
end of period
$
16,159
$
15,727
$
16,082
Net charge-offs/average loans
0.04%
0.08%
0.07%
Net charge-offs/average assets
0.02%
0.05%
0.05%
(1) Excludes activity from assets held-for-sale from
discontinued operations.
Loan portfolio
September 30,
June 30,
December 31,
September 30,
2021
2021
2020
2020
(in thousands)
SBL non-real estate
$
171,845
$
228,958
$
255,318
$
293,488
SBL commercial mortgage
367,272
343,487
300,817
270,264
SBL construction
23,117
18,494
20,273
27,169
Small business loans *
562,234
590,939
576,408
590,921
Direct lease financing
514,068
506,424
462,182
430,675
SBLOC / IBLOC**
1,834,523
1,729,628
1,550,086
1,428,253
Advisor financing ***
81,143
72,190
48,282
26,600
Real estate bridge lending
128,699
–
–
–
Other loans ****
4,917
5,840
6,426
6,003
3,125,584
2,905,021
2,643,384
2,482,452
Unamortized loan fees and costs
11,078
10,323
8,939
6,308
Total loans, net of unamortized fees and
costs
$
3,136,662
$
2,915,344
$
2,652,323
$
2,488,760
Small business portfolio
September 30,
June 30,
December 31,
September 30,
2021
2021
2020
2020
(in thousands)
SBL, including unamortized fees and
costs
$
566,472
$
593,401
$
577,944
$
590,314
SBL, included in commercial loans, at fair
value
214,301
225,534
243,562
250,958
Total small business loans
$
780,773
$
818,935
$
821,506
$
841,272
* The preceding table shows small business loans and small
business loans held at fair value. The small business loans held at
fair value are comprised of the government guaranteed portion of
SBA 7a loans at the dates indicated. A reduction in SBL non-real
estate loans from $229.0 million at June 30, 2021 to $171.8 million
at September 30, 2021 resulted from U.S. government repayments of
$58.2 million of PPP loans authorized by The Consolidated
Appropriations Act, 2021. PPP loans totaled $71.3 million at
September 30, 2021 and $165.7 million at December 31, 2020,
respectively. ** Securities Backed Lines of Credit, or SBLOC, are
collateralized by marketable securities, while Insurance Backed
Lines of Credit, or IBLOC, are collateralized by the cash surrender
value of insurance policies. *** In 2020, we began originating
loans to investment advisors for purposes of debt refinance,
acquisition of another firm or internal succession. Maximum loan
amounts are subject to loan-to-value ratios of 70%, based on
third-party business appraisals, but may be increased depending
upon the debt service coverage ratio. Personal guarantees and
blanket business liens are obtained as appropriate. **** Included
in the table above under Other loans are demand deposit overdrafts
reclassified as loan balances totaling $272,000 and $663,000 at
September 30, 2021 and December 31, 2020, respectively. Estimated
overdraft charge-offs and recoveries are reflected in the allowance
for credit losses and have been immaterial.
Small business loans as of September
30, 2021
Loan principal
(in millions)
U.S. government guaranteed portion of SBA
loans (a)
$
370
Paycheck Protection Program loans (PPP)
(a)
71
Commercial mortgage SBA (b)
195
Construction SBA (c)
13
Non-guaranteed portion of U.S. government
guaranteed 7a loans (d)
104
Non-SBA small business loans (e)
18
Total principal
$
771
Unamortized fees and costs
10
Total small business loans
$
781
(a) This is the portion of SBA 7a loans (7a) and PPP loans which
have been guaranteed by the U.S. government, and therefore are
assumed to have no credit risk. (b) Substantially all these loans
are made under the SBA 504 Fixed Asset Financing program (504)
which dictates origination date loan-to-value percentages (“LTV”),
generally 50-60%, to which the Bank adheres. (c) Of the $13 million
in Construction SBA loans, $11 million are 504 first mortgages with
an origination date LTV of 50-60% and $2 million are SBA interim
loans with an approved SBA post-construction full takeout/payoff.
(d) The $104 million represents the non-guaranteed portion of 7a
loans which are 70% or more guaranteed by the U.S. government. 7a
loans are not made on the basis of real estate LTV; however, they
are subject to SBA's "All Available Collateral" rule which mandates
that to the extent a borrower or its 20% or greater principals have
available collateral (including personal residences), the
collateral must be pledged to fully collateralize the loan, after
applying SBA-determined liquidation rates. In addition, all 7a and
504 loans require the personal guaranty of all 20% or greater
owners. (e) The $18 million of non-SBA loans is comprised of
approximately 20 conventional coffee/doughnut/carryout franchisee
note purchases. The majority of purchased notes were made to
multi-unit operators, are considered seasoned and have performed as
agreed.
Small business loans by type as of
September 30, 2021
(Excludes government guaranteed portion of
SBA 7a loans and PPP loans)
SBL commercial mortgage*
SBL construction*
SBL non-real estate
Total
% Total
(in millions)
Hotels and motels
$
67
$
4
$
—
$
71
21%
Full-service restaurants
16
1
3
20
6%
Baked goods stores
4
—
11
15
5%
Child day care services
14
—
1
15
5%
Car washes
10
2
—
12
4%
Lessors of nonresidential buildings
(except miniwarehouses)
10
—
—
10
3%
Assisted living facilities for the
elderly
10
—
—
10
3%
Offices of lawyers
9
—
—
9
3%
Funeral homes and funeral services
9
—
—
9
3%
General warehousing and storage
7
—
—
7
2%
Limited-service restaurants
2
1
3
6
2%
Fitness and recreational sports
centers
—
4
2
6
2%
Amusement and recreation industries
5
—
1
6
2%
Outpatient mental health and substance
abuse centers
5
—
—
5
1%
Spectator sports
5
—
—
5
1%
Perishable prepared food manufacturing
5
—
—
5
1%
Gasoline stations with convenience
stores
5
—
—
5
1%
Offices of dentists
3
—
—
3
1%
Warehousing and storage
3
—
—
3
1%
New car dealers
3
—
—
3
1%
Miscellaneous wood product
manufacturing
3
—
—
3
1%
Plumbing, heating, and air-conditioning
contractors
3
—
—
3
1%
Offices of physicians (except mental
health specialists)
3
—
—
3
1%
Technical and trade schools
—
3
—
3
1%
General purpose machinery
manufacturing
2
—
—
2
1%
Pet care (except veterinary) services
2
—
—
2
1%
Landscaping services
1
—
2
3
1%
Sewing, needlework, and piece goods
stores
2
—
—
2
1%
Automotive body, paint, and interior
repair and maintenance
2
—
—
2
1%
Vocational rehabilitation services
2
—
2
4
1%
Amusement arcades
2
—
—
2
1%
Lessors of real estate property
2
—
—
2
1%
Other**
49
1
25
75
20%
Total
$
265
$
16
$
50
$
331
100%
* Of the SBL commercial mortgage and SBL construction loans, $62
million represents the total of the non-guaranteed portion of SBA
7a loans and non-SBA loans. The balance of those categories
represents SBA 504 loans with 50%-60% origination date
loan-to-values. **Loan types less than $2 million are spread over a
hundred different classifications such as Commercial Printing, Pet
and Pet Supplies Stores, Securities Brokerage, etc.
State diversification as of September
30, 2021
(Excludes government guaranteed portion of
SBA 7a loans and PPP loans)
SBL commercial mortgage*
SBL construction*
SBL non-real estate
Total
% Total
(in millions)
Florida
$
56
$
—
$
8
$
64
19%
California
42
1
4
47
14%
North Carolina
23
2
3
28
9%
Pennsylvania
23
4
3
30
8%
Illinois
22
—
3
25
8%
New York
14
4
3
21
6%
New Jersey
12
—
6
18
6%
Texas
12
—
4
16
5%
Virginia
9
—
2
11
3%
Tennessee
10
—
—
10
3%
Colorado
3
5
2
10
3%
Georgia
7
—
2
9
3%
Michigan
4
—
1
5
2%
Washington
3
—
—
3
1%
Ohio
3
—
—
3
1%
Other states
22
—
9
31
9%
Total
$
265
$
16
$
50
$
331
100%
* Of the SBL commercial mortgage and SBL construction loans, $62
million represents the total of the non-guaranteed portion of SBA
7a loans and non-SBA loans. The balance of those categories
represents SBA 504 loans with 50%-60% origination date
loan-to-values.
Top 10 loans as of September 30,
2021
Type*
State
SBL commercial mortgage*
(in millions)
Hotel
FL
$
9
Lawyer's office
CA
9
Warehouse
PA
7
Hotel
NC
6
Assisted living facility
FL
5
Mental health and substance abuse
centers
FL
5
Hotel
NC
5
Prepared food manufacturing
NJ
4
Hotel
PA
4
Hotel
TN
4
Total
$
58
* All the top 10 loans are 504 SBA loans
with 50%-60% origination date loan-to-value and are in the
commercial mortgage category. The top 10 loan table above does not
include loans to the extent that they are U.S. government
guaranteed.
Commercial real estate loans, excluding
SBA loans, are as follows including LTV at origination:
Type as of September 30, 2021
Type
# Loans
Balance
Weighted average origination date
LTV
Weighted average interest
rate
(dollars in millions)
Real estate bridge lending (multi-family
apartments)*
15
$
129
75%
4.22%
Commercial real estate loans, at fair
value:
Multi-family (apartments)*
115
$
1,193
76%
4.75%
Hospitality (hotels and lodging)
9
66
65%
5.69%
Retail
6
61
71%
4.33%
Other
8
21
73%
5.16%
138
1,341
75%
4.78%
Fair value adjustment
(6)
Total commercial real estate loans, at
fair value
1,335
Total commercial real estate loans
$
1,464
75%
4.75%
*In the third quarter of 2021, we recommenced the origination of
multi-family apartment loans. These are similar to the multi-family
apartment loans carried at fair value, but at origination are
intended to be held on the balance sheet, so are not accounted for
at fair value.
State diversification as of
September 30, 2021
15 largest loans (all
multi-family) as of September 30, 2021
State
Balance
Origination date LTV
State
Balance
Origination date LTV
(in millions)
(in millions)
Texas
$
459
77%
North Carolina
$
44
78%
Georgia
193
76%
Texas
39
79%
Arizona
79
75%
Texas
36
80%
North Carolina
79
77%
Missouri
30
72%
Ohio
58
69%
Texas
30
75%
Alabama
57
76%
Nevada
29
80%
Virginia
57
73%
Texas
27
77%
Other states each <$55 million
482
73%
Arizona
27
79%
Total
$
1,464
75%
Mississippi
27
79%
North Carolina
25
77%
Texas
25
77%
Texas
24
77%
Alabama
23
77%
Texas
21
79%
Georgia
20
79%
15 Largest loans
$
427
78%
Institutional banking loans outstanding
at September 30, 2021
Type
Principal
% of total
(in millions)
Securities backed lines of credit
(SBLOC)
$
1,148
60%
Insurance backed lines of credit
(IBLOC)
687
36%
Advisor financing
81
4%
Total
$
1,916
100%
For SBLOC, we generally lend up to 50% of the value of equities
and 80% for investment grade securities. While equities have fallen
in excess of 30% in recent years, the reduction in collateral value
of brokerage accounts collateralizing SBLOCs generally has been
less, for two reasons. First, many collateral accounts are
“balanced” and accordingly have a component of debt securities,
which have either not decreased in value as much as equities, or in
some cases may have increased in value. Secondly, many of these
accounts have the benefit of professional investment advisors who
provided some protection against market downturns, through
diversification and other means. Additionally, borrowers often
utilize only a portion of collateral value, which lowers the
percentage of principal to collateral.
Top 10 SBLOC loans at September 30,
2021
Principal amount
% Principal to collateral
(in millions)
$
19
65%
17
37%
14
27%
12
29%
9
33%
9
36%
9
53%
8
71%
8
23%
8
46%
Total and weighted average
$
113
43%
Insurance backed lines of credit (IBLOC)
IBLOC loans are backed by the cash value of life insurance
policies which have been assigned to us. We lend up to 100% of such
cash value. Our underwriting standards require approval of the
insurance companies which carry the policies backing these loans.
Currently, seven insurance companies have been approved and, as of
August 14, 2021, all were rated Superior (A+ or better) by AM
BEST.
Direct lease financing* by type as of
September 30, 2021
Principal balance
% Total
(in millions)
Construction
$
95
18%
Government agencies and public
institutions**
77
15%
Waste management and remediation
services
64
12%
Real estate and rental and leasing
56
11%
Retail trade
47
9%
Wholesale purchase
34
7%
Transportation and warehousing
29
6%
Health care and social assistance
26
5%
Professional, scientific, and technical
services
19
4%
Manufacturing
16
3%
Wholesale trade
14
3%
Educational services
8
2%
Other
29
5%
Total
$
514
100%
* Of the total $514 million of direct lease financing, $464
million consisted of vehicle leases with the remaining balance
consisting of equipment leases. ** Includes public universities and
school districts.
Direct lease financing by state as of
September 30, 2021
State
Principal balance
% Total
(in millions)
Florida
$
93
18%
California
48
9%
New Jersey
39
8%
Utah
35
7%
New York
33
6%
Pennsylvania
32
6%
Maryland
25
5%
North Carolina
25
5%
Texas
19
4%
Connecticut
16
3%
Washington
15
3%
Georgia
12
2%
Idaho
11
2%
Tennessee
10
2%
Alabama
9
2%
Other states
92
18%
Total
$
514
100%
Capital ratios
Tier 1 capital
Tier 1 capital
Total capital
Common equity
to average
to risk-weighted
to risk-weighted
tier 1 to risk
assets ratio
assets ratio
assets ratio
weighted assets
As of September 30, 2021
The Bancorp, Inc.
9.82%
15.69%
16.10%
15.69%
The Bancorp Bank
10.24%
16.29%
16.69%
16.29%
"Well capitalized" institution (under FDIC
regulations-Basel III)
5.00%
8.00%
10.00%
6.50%
As of December 31, 2020
The Bancorp, Inc.
9.20%
14.43%
14.84%
14.43%
The Bancorp Bank
9.11%
14.27%
14.68%
14.27%
"Well capitalized" institution (under FDIC
regulations-Basel III)
5.00%
8.00%
10.00%
6.50%
Three months ended
Nine months ended
September 30,
September 30,
2021
2020
2021
2020
Selected operating ratios
Return on average assets (1)
1.76%
1.48%
1.66%
1.25%
Return on average equity (1)
17.84%
16.90%
18.35%
14.29%
Net interest margin
3.35%
3.37%
3.29%
3.41%
(1) Annualized
Book value per share table
September 30,
June 30,
December 31,
September 30,
2021
2021
2020
2020
Book value per share
$
11.13
$
10.77
$
10.10
$
9.71
Loan quality table
September 30,
June 30,
December 31,
September 30,
2021
2021
2020
2020
(dollars in thousands)
Nonperforming loans to total loans
0.24%
0.31%
0.48%
0.49%
Nonperforming assets to total assets
0.16%
0.14%
0.20%
0.20%
Allowance for credit losses to total
loans
0.52%
0.52%
0.61%
0.63%
Nonaccrual loans
$
6,106
$
7,346
$
12,227
$
12,275
Loans 90 days past due still accruing
interest
1,569
1,550
497
24
Other real estate owned
2,145
—
—
—
Total nonperforming assets
$
9,820
$
8,896
$
12,724
$
12,299
Gross dollar volume (GDV) (1)
Three months ended
September 30,
June 30,
December 31,
September 30,
2021
2021
2020
2020
(in thousands)
Prepaid and debit card GDV
$
24,392,188
$
27,106,763
$
22,523,855
$
23,963,508
(1) Gross dollar volume represents the total dollar amount spent
on prepaid and debit cards issued by The Bancorp Bank.
Business line quarterly summary
Quarter ended September 30, 2021
(dollars in millions)
Balances
% Growth
Major business lines
Average approximate rates *
Balances **
Year over year
Linked quarter annualized
Loans
Institutional banking ***
2.6%
$ 1,916
32%
25%
Small business lending****
5.0%
781
12%
12%
Leasing
5.9%
514
19%
6%
Commercial real estate (non-SBA at fair
value)
4.7%
1,335
nm
nm
Real estate bridge lending
4.2%
129
nm
nm
Weighted average yield
4.0%
$ 4,675
Non-interest income
% Growth
Deposits: Fintech
solutions group
Current quarter
Year over year
Prepaid and debit card issuance, and other
payments
0.1%
$ 5,146
6%
nm
$ 20.1
(5%)
* Average rates are for the quarter ended September 30, 2021. **
Loan and deposit categories are respectively based on period-end
and average quarterly balances. *** Institutional Banking loans are
comprised of security backed lines of credit (SBLOC),
collateralized by marketable securities, insurance backed lines of
credit (IBLOC), collateralized by the cash surrender value of
insurance policies, and investment advisor financing. **** Small
Business Lending is substantially comprised of SBA loans. Loan
growth percentages exclude short-term PPP loans.
Dissolution of Walnut Street
Previous press releases included tables related to the Walnut
Street investment, shown as investment in unconsolidated entity on
the balance sheet. Walnut Street was comprised of Bancorp loans
sold to that entity, which was partially financed by an independent
investor. In the third quarter of 2021, The Bancorp and that
investor dissolved the entity, as the remaining balance did not
warrant ongoing administrative and accounting expenses. As a result
of the dissolution, the investment in unconsolidated entity, which
had a June 30, 2021 balance of $25.0 million, was reclassified as
follows. Approximately $22.9 million of loans were reclassified to
commercial loans, at fair value and $2.1 million was reclassified
to other real estate owned, as those assets continue to be reported
at fair value.
Quarterly activity for commercial loan
discontinued principal
Commercial
loan principal
(in millions)
Commercial loan discontinued principal
June 30, 2021 before marks
$
53
Quarterly paydowns and other
reductions
(5)
Commercial loan discontinued principal
September 30, 2021 before marks
48
Marks September 30, 2021
(3)
Net commercial loan exposure September 30,
2021
45
Residential mortgages
25
Net loans
70
Florida mall in other real estate
owned
15
3 properties in other real estate
owned
3
Total discontinued assets at September 30,
2021
$
88
Discontinued commercial loan
composition as of September 30, 2021
Collateral type
Unpaid principal balance
Mark at September 30, 2021
Mark as % of portfolio
(in millions)
Commercial real estate - non-owner
occupied:
Retail
$
4
$
(0.6)
15%
Office
2
—
—
Other
18
(0.1)
1%
Construction and land
9
(0.1)
1%
Commercial non-real estate and
industrial
2
(0.1)
5%
1 to 4 family construction
5
(2.3)
46%
First mortgage residential non-owner
occupied
4
—
—
Commercial real estate owner occupied:
Retail
2
—
—
Residential junior mortgage
1
—
—
Other
1
—
—
Total
$
48
$
(3.2)
7%
Less: mark
(3)
Net commercial loan exposure September 30,
2021
$
45
$
(3.2)
Loan payment deferrals related to Covid-19 Total non-U.S.
guaranteed loan balances for borrowers with Covid-19 payment
deferrals amounted to $1.3 million as of September 30, 2021.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211028006051/en/
The Bancorp, Inc. Contact Andres Viroslav Director,
Investor Relations 215-861-7990 andres.viroslav@thebancorp.com
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