The Bancorp, Inc. ("The Bancorp" or “we”) (NASDAQ: TBBK), a
financial holding company, today reported financial results for the
second quarter of 2022.
Highlights
- For the quarter ended June 30, 2022, The Bancorp earned pre-tax
income of $41.1 million, compared to $37.0 million for the quarter
ended June 30, 2021. The 2021 quarter included $4.3 million of
Payroll Protection Program (“PPP”) related interest and fees,
substantially all of which were eliminated in the current year
quarter. For those respective periods, net income amounted to $30.4
million, or $0.53 diluted earnings per share, compared to net
income of $29.4 million, or $0.50 diluted earnings per share.
- Return on assets and equity for the quarter ended June 30, 2022
amounted to 1.7% and 19%, respectively, compared to 1.7% and 19%,
respectively, for the quarter ended June 30, 2021 (all percentages
“annualized”).
- Net interest margin amounted to 3.17% for the quarter ended
June 30, 2022, compared to 3.19% for the quarter ended June 30,
2021.
- Net interest income was $54.6 million for the quarter ended
June 30, 2022, compared to $54.1 million for the quarter ended June
30, 2021. The 2021 quarter included $4.3 million of PPP related
interest and fees, substantially all of which were eliminated in
the current year quarter.
- Excluding commercial loans, at fair value, which were
originally generated for sale, total loans increased to $4.75
billion at June 30, 2022, compared to $4.16 billion at March 31,
2022 and $2.92 billion at June 30, 2021. Those increases reflected
growth of 13% quarter over quarter and 61% year over year. Those
percentage increases exclude the impact of $55.6 million of June
30, 2022 balances previously included in discontinued assets which
were reclassified to loans in the first quarter of 2022.
- Gross dollar volume (“GDV”), representing the total amounts
spent on prepaid and debit cards, increased $1.29 billion, or 5%,
to $28.39 billion for the quarter ended June 30, 2022 compared to
the quarter ended June 30, 2021. GDV was increased in 2021 by the
impact of pandemic related government stimulus payments.
- SBLOC (securities backed lines of credit), IBLOC (insurance
backed lines of credit) and investment advisor financing loans
collectively increased 35% year over year and 10% quarter over
quarter to $2.43 billion at June 30, 2022.
- Small Business Loans, including those held at fair value, grew
6% year over year to $729.8 million at June 30, 2022, and 3.5%
quarter over quarter. That growth is exclusive of PPP loan balances
which amounted to $10.3 million and $129.4 million, respectively,
at June 30, 2022 and June 30, 2021.
- Direct lease financing balances increased 15% year over year to
$583.1 million at June 30, 2022, and 8% quarter over quarter.
- We resumed non-SBA commercial real estate bridge lending in the
third quarter of 2021. At June 30, 2022, the balance of such real
estate bridge loans was $1.11 billion compared to $803.5 million at
March 31, 2022, reflecting quarter over quarter growth of 38%.
- The average interest rate on $6.38 billion of average deposits
and interest-bearing liabilities during the second quarter of 2022
was 0.44%. Average deposits of $6.25 billion for second quarter
2022, reflected a decrease of 0.1% from the $6.26 billion of
average deposits for the quarter ended June 30, 2021, which had
increased 17% over the June 30, 2020 quarter. Deposit levels during
these periods reflected variability resulting from the pandemic and
related government stimulus payments.
- As of June 30, 2022, 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 9.51%, 13.46%, 13.84% and 13.46%, respectively,
compared to well-capitalized minimums of 5%, 8%, 10% and 6.5%,
respectively. The Bancorp and its wholly owned subsidiary, The
Bancorp Bank, each remain well capitalized under banking
regulations.
- Book value per common share at June 30, 2022 was $11.55 per
share compared to $10.77 per share at June 30, 2021, an increase of
7%, primarily as a result of retained earnings. Increases resulting
from retained earnings and reductions in shares from related
repurchases were partially offset by reductions in the market value
of securities, which are recognized through equity.
- The Bancorp repurchased 577,926 shares of its common stock at
an average cost of $25.95 per share during the quarter ended June
30, 2022.
“The second quarter continued to show strong growth across our
platform. With the anticipated continued increase in interest rates
based on fed funds futures and strong business pipelines, we expect
profitability to steadily increase over the next 18 months. We are
raising our guidance for 2022 from $2.15 per share to a range of
$2.25 to $2.30 per share. This range excludes the impact of 2022
share repurchases but includes interest rate assumptions based on
fed funds expectations.”
The Bancorp reported net income of $30.4 million, or $0.53 per
diluted share, for the quarter ended June 30, 2022, compared to net
income of $29.4 million, or $0.50 per diluted share, for the
quarter ended June 30, 2021.
Conference Call Webcast
You may access the LIVE webcast of The Bancorp's Quarterly
Earnings Conference Call at 8:00 AM ET Friday, July 29, 2022 by
clicking on the webcast link on The Bancorp's homepage at
www.thebancorp.com. Or you may dial 866.374.5140, access code
81692741. You may listen to the replay of the webcast following the
live call on The Bancorp's investor relations website.
About The Bancorp
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. in June 2021, 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. As evidence of its
company-wide commitment to excellence, The Bancorp has also been
ranked in October 2020 as one of the 100 Fastest-Growing Companies
by Fortune, a Top 50 Employer in March 2021 by Equal Opportunity
Magazine and was selected to be included in the S&P Small Cap
600 in May 2021. 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 “intend,” “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
Six months ended
June 30,
June 30,
Consolidated condensed income
statements
2022
2021
2022
2021
(in thousands, except per share
data)
Net interest income
$
54,569
$
54,069
$
107,422
$
107,826
Provision for (reversal of) credit
losses
(1,450)
(951)
3,509
(129)
Non-interest income
ACH, card and other payment processing
fees
2,338
1,904
4,322
3,700
Prepaid, debit card and related fees
20,038
19,447
38,690
38,655
Net realized and unrealized gains on
commercial
loans, at fair value
3,682
2,579
10,517
4,575
Leasing related income
1,545
1,767
2,518
2,732
Other non-interest income
350
164
470
273
Total non-interest income
27,953
25,861
56,517
49,935
Non-interest expense
Salaries and employee benefits
25,999
27,087
49,847
52,745
Data processing expense
1,246
1,146
2,435
2,272
Legal expense
1,474
2,044
2,268
4,098
Legal settlement
1,152
—
1,152
—
FDIC insurance
673
2,589
1,647
4,969
Software
4,165
3,706
8,029
7,390
Other non-interest expense
8,136
7,311
15,819
14,292
Total non-interest expense
42,845
43,883
81,197
85,766
Income from continuing operations before
income taxes
41,127
36,998
79,233
72,124
Income tax expense
10,725
7,840
19,865
16,906
Net income from continuing operations
30,402
29,158
59,368
55,218
Discontinued operations
Income from discontinued operations before
income taxes
—
361
—
237
Income tax expense
—
84
—
55
Net income from discontinued operations,
net of tax
—
277
—
182
Net income
$
30,402
$
29,435
$
59,368
$
55,400
Net income per share from continuing
operations - basic
$
0.54
$
0.51
$
1.04
$
0.96
Net income per share from discontinued
operations - basic
$
—
$
—
$
—
$
0.01
Net income per share - basic
$
0.54
$
0.51
$
1.04
$
0.97
Net income per share from continuing
operations - diluted
$
0.53
$
0.49
$
1.03
$
0.93
Net income per share from discontinued
operations - diluted
$
—
$
—
$
—
$
0.01
Net income per share - diluted
$
0.53
$
0.50
$
1.03
$
0.94
Weighted average shares - basic
56,801,518
57,230,576
56,962,000
57,232,557
Weighted average shares - diluted
57,453,730
59,022,925
57,772,538
59,086,956
Note: Compared to higher rates in recent periods, the effective
tax rate for the three months ended June 30, 2021 approximated 21%
as a result of the impact of 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 various grant dates.
Condensed consolidated balance
sheets
June 30,
March 31,
December 31,
June 30,
2022 (unaudited)
2022 (unaudited)
2021
2021 (unaudited)
(in thousands, except share
data)
Assets:
Cash and cash equivalents
Cash and due from banks
$
12,873
$
11,399
$
5,382
$
5,470
Interest earning deposits at Federal
Reserve Bank
329,992
662,827
596,402
583,498
Total cash and cash equivalents
342,865
674,226
601,784
588,968
Investment securities, available-for-sale,
at fair value
826,616
907,338
953,709
1,106,075
Commercial loans, at fair value
995,493
1,180,885
1,388,416
1,758,264
Loans, net of deferred fees and costs
4,754,697
4,164,298
3,747,224
2,915,344
Allowance for credit losses
(19,087)
(19,051)
(17,806)
(15,292)
Loans, net
4,735,610
4,145,247
3,729,418
2,900,052
Federal Home Loan Bank and Atlantic
Central Bankers Bank stock
1,643
1,663
1,663
1,667
Premises and equipment, net
16,693
16,314
16,156
17,392
Accrued interest receivable
19,264
17,284
17,871
18,668
Intangible assets, net
2,248
2,348
2,447
2,646
Other real estate owned
18,873
18,873
18,873
17,343
Deferred tax asset, net
23,344
18,521
12,667
10,923
Investment in unconsolidated entity, at
fair value
—
—
—
24,988
Assets held-for-sale from discontinued
operations
—
—
3,268
12,105
Other assets
124,511
99,961
96,967
91,516
Total assets
$
7,107,160
$
7,082,660
$
6,843,239
$
6,550,607
Liabilities:
Deposits
Demand and interest checking
$
5,394,562
$
5,506,083
$
5,561,365
$
5,225,024
Savings and money market
486,189
722,240
415,546
459,688
Total deposits
5,880,751
6,228,323
5,976,911
5,684,712
Securities sold under agreements to
repurchase
42
42
42
42
Short-term borrowings
385,000
—
—
—
Senior debt
98,866
98,774
98,682
98,498
Subordinated debenture
13,401
13,401
13,401
13,401
Other long-term borrowings
39,125
39,318
39,521
39,901
Other liabilities
33,439
50,507
62,228
94,944
Total liabilities
$
6,450,624
$
6,430,365
$
6,190,785
$
5,931,498
Shareholders' equity:
Common stock - authorized, 75,000,000
shares of $1.00 par value; 56,865,494 and 57,458,287 shares issued
and outstanding at June 30, 2022 and 2021, respectively
56,865
57,155
57,371
57,458
Additional paid-in capital
323,774
336,604
349,686
363,241
Retained earnings
298,474
268,072
239,106
183,853
Accumulated other comprehensive (loss)
income
(22,577)
(9,536)
6,291
14,557
Total shareholders' equity
656,536
652,295
652,454
619,109
Total liabilities and shareholders'
equity
$
7,107,160
$
7,082,660
$
6,843,239
$
6,550,607
Note: Previous balance sheets included assets held-for-sale from
discontinued operations, which were reclassified to continuing
operations in the first quarter of 2022. Previous balance sheets
also 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.
Average balance sheet and net interest
income
Three months ended June 30,
2022
Three months ended June 30,
2021
(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**
$
5,467,516
$
55,100
4.03%
$
4,572,712
$
49,378
4.32%
Leases-bank qualified*
3,665
63
6.88%
5,783
96
6.64%
Investment securities-taxable
879,112
5,432
2.47%
1,081,419
7,201
2.66%
Investment securities-nontaxable*
3,559
31
3.48%
3,878
32
3.30%
Interest earning deposits at Federal
Reserve Bank
545,027
1,004
0.74%
1,120,039
300
0.11%
Net interest earning assets
6,898,879
61,630
3.57%
6,783,831
57,007
3.36%
Allowance for credit losses
(20,295)
(16,406)
Assets held-for-sale from discontinued
operations
—
—
—
98,895
781
3.16%
Other assets
243,459
201,539
$
7,122,043
$
7,067,859
Liabilities and Shareholders'
Equity:
Deposits:
Demand and interest checking
$
5,697,507
$
4,390
0.31%
$
5,736,776
$
1,327
0.09%
Savings and money market
556,847
1,200
0.86%
526,112
192
0.15%
Total deposits
6,254,354
5,590
0.36%
6,262,888
1,519
0.10%
Short-term borrowings
11,593
32
1.10%
—
—
—
Repurchase agreements
41
—
—
41
—
—
Subordinated debentures
13,401
139
4.15%
13,401
112
3.34%
Senior debt
98,816
1,280
5.18%
100,239
1,280
5.11%
Total deposits and liabilities
6,378,205
7,041
0.44%
6,376,569
2,911
0.18%
Other liabilities
89,422
83,353
Total liabilities
6,467,627
6,459,922
Shareholders' equity
654,416
607,937
$
7,122,043
$
7,067,859
Net interest income on tax equivalent
basis*
$
54,589
$
54,877
Tax equivalent adjustment
20
27
Net interest income
$
54,569
$
54,850
Net interest margin *
3.17%
3.19%
* Full taxable equivalent basis, using a statutory Federal tax
rate of 21% for 2022 and 2021. ** Includes commercial loans, at
fair value. All periods include non-accrual loans.
NOTE: In the table above, the 2021 interest on loans reflects
$3.0 million of interest and fees which were earned on a short-term
line of credit to another institution to initially fund Payroll
Protection Program (“PPP”) loans, which did not significantly
increase average loans or assets and which are not expected to
recur. Interest on loans for 2022 and 2021 includes $41,000 and
$1.3 million, respectively, of interest and fees on PPP loans.
Average balance sheet and net interest
income
Six months ended June 30,
2022
Six months ended June 30,
2021
(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**
$
5,302,850
$
105,638
3.98%
$
4,524,911
$
97,189
4.30%
Leases-bank qualified*
3,839
130
6.77%
6,379
214
6.71%
Investment securities-taxable
909,017
10,323
2.27%
1,136,631
16,009
2.82%
Investment securities-nontaxable*
3,559
62
3.48%
3,960
67
3.38%
Interest earning deposits at Federal
Reserve Bank
616,865
1,351
0.44%
935,239
483
0.10%
Net interest earning assets
6,836,130
117,504
3.44%
6,607,120
113,962
3.45%
Allowance for credit losses
(19,075)
(16,241)
Assets held for sale from discontinued
operations
—
—
—
103,983
1,634
3.14%
Other assets
232,402
203,821
$
7,049,457
$
6,898,683
Liabilities and Shareholders'
Equity:
Deposits:
Demand and interest checking
$
5,636,415
$
5,796
0.21%
$
5,619,608
$
2,944
0.10%
Savings and money market
544,515
1,400
0.51%
466,978
341
0.15%
Total deposits
6,180,930
7,196
0.23%
6,086,586
3,285
0.11%
Short-term borrowings
6,104
32
1.05%
6,491
8
0.25%
Repurchase agreements
41
—
—
41
—
—
Subordinated debentures
13,401
255
3.81%
13,401
225
3.36%
Senior debt
98,770
2,559
5.18%
100,190
2,559
5.11%
Total deposits and liabilities
6,299,246
10,042
0.32%
6,206,709
6,077
0.20%
Other liabilities
95,716
91,837
Total liabilities
6,394,962
6,298,546
Shareholders' equity
654,495
600,137
$
7,049,457
$
6,898,683
Net interest income on tax equivalent
basis*
$
107,462
$
109,519
Tax equivalent adjustment
40
59
Net interest income
$
107,422
$
109,460
Net interest margin *
3.14%
3.26%
* Full taxable equivalent basis, using a statutory Federal tax
rate of 21% for 2022 and 2021. ** Includes commercial loans, at
fair value. All periods include non-accrual loans.
NOTE: In the table above, the 2021 interest on loans reflects
$4.5 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 for 2022 and
2021 includes $481,000 and $3.7 million, respectively, of interest
and fees on PPP loans.
Allowance for credit losses
Six months ended
Year ended
June 30,
June 30,
December 31,
2022 (unaudited)
2021 (unaudited)
2021
(dollars in thousands)
Balance in the allowance for credit losses
at beginning of period (1)
$
17,806
$
16,082
$
16,082
Loans charged-off:
SBA non-real estate
844
321
1,138
SBA commercial mortgage
—
23
417
Direct lease financing
199
193
412
SBLOC
—
15
15
Consumer - home equity
—
—
10
Consumer - other
—
—
14
Total
1,043
552
2,006
Recoveries:
SBA non-real estate
33
15
51
SBA commercial mortgage
—
—
9
Direct lease financing
93
7
58
Consumer - home equity
—
—
1,099
Total
126
22
1,217
Net charge-offs
917
530
789
Provision for (reversal of) credit losses,
excluding unfunded commitments
2,198
(260)
2,513
Balance in allowance for credit losses at
end of period
$
19,087
$
15,292
$
17,806
Net charge-offs/average loans
0.02%
0.02%
0.03%
Net charge-offs/average assets
0.01%
0.01%
0.01%
(1) Excludes activity from discontinued operations.
Loan portfolio
June 30,
March 31,
December 31,
June 30,
2022
2022
2021
2021
(in thousands)
SBL non-real estate
$
112,854
$
122,387
$
147,722
$
228,958
SBL commercial mortgage
425,219
385,559
361,171
343,487
SBL construction
27,042
31,432
27,199
18,494
Small business loans
565,115
539,378
536,092
590,939
Direct lease financing
583,086
538,616
531,012
506,424
SBLOC / IBLOC *
2,274,256
2,067,233
1,929,581
1,729,628
Advisor financing **
155,235
146,461
115,770
72,190
Real estate bridge loans
1,106,875
803,477
621,702
—
Other loans ***
63,514
61,096
5,014
5,840
4,748,081
4,156,261
3,739,171
2,905,021
Unamortized loan fees and costs
6,616
8,037
8,053
10,323
Total loans, including unamortized fees
and costs
$
4,754,697
$
4,164,298
$
3,747,224
$
2,915,344
Small business portfolio
June 30,
March 31,
December 31,
June 30,
2022
2022
2021
2021
(in thousands)
SBL, including unamortized fees and
costs
$
571,559
$
545,462
$
541,437
$
593,401
SBL, included in loans, at fair value
168,579
183,408
199,585
225,534
Total small business loans ****
$
740,138
$
728,870
$
741,022
$
818,935
* 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 eligible life 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. ***
Includes demand deposit overdrafts reclassified as loan balances
totaling $170,000 and $322,000 at June 30, 2022 and December 31,
2021, respectively. Estimated overdraft charge-offs and recoveries
are reflected in the allowance for credit losses and have been
immaterial. ****The small business loans held at fair value are
comprised of the government guaranteed portion of certain SBA loans
at the dates indicated (in thousands). A reduction in SBL non-real
estate from $122.4 million to $112.9 million in the second quarter
of 2022 resulted primarily from U.S. government repayments of PPP
loans authorized by The Consolidated Appropriations Act, 2021. PPP
loans totaled $10.3 million at June 30, 2022, $23.7 million at
March 31, 2022 and $129.4 million at June 30, 2021.
Small business loans as of June
30, 2022
Loan principal
(in millions)
U.S. government guaranteed portion of SBA
loans (a)
$
375
Paycheck Protection Program loans (PPP)
(a)
10
Commercial mortgage SBA (b)
216
Construction SBA (c)
12
Non-guaranteed portion of U.S. government
guaranteed loans (d)
100
Non-SBA small business loans (e)
21
Total principal
$
734
Unamortized fees and costs
6
Total small business loans
$
740
(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 $12 million
in Construction SBA loans, $11 million are 504 first mortgages with
an origination date LTV of 50-60% and $1 million are SBA interim
loans with an approved SBA post-construction full takeout/payoff.
(d) The $100 million represents the unguaranteed 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 $21 million of non-SBA loans are primarily
comprised of approximately 20 conventional coffee/doughnut/carryout
franchisee note purchases.
Small business loans by type as of June
30, 2022
(Excludes government guaranteed portion of
SBA 7a loans and PPP loans)
SBL commercial mortgage*
SBL construction*
SBL non-real estate
Total
% Total
(dollars in millions)
Hotels (except casino hotels) and
motels
$
69
$
—
$
—
$
69
19%
Full-service restaurants
13
2
2
17
5%
Car washes
16
1
—
17
5%
Child day care services
15
—
1
16
4%
Outpatient mental health and substance
abuse centers
15
—
—
15
4%
Baked goods stores
4
—
9
13
4%
Funeral homes and funeral services
10
—
—
10
3%
Fitness and recreational sports
centers
5
2
2
9
3%
Offices of lawyers
9
—
—
9
3%
Assisted living facilities for the
elderly
9
—
—
9
3%
Gasoline stations with convenience
stores
8
—
—
8
2%
Lessors of nonresidential buildings
8
—
—
8
2%
General warehousing and storage
7
—
—
7
2%
Lessors of other real estate property
6
—
—
6
2%
All other amusement and recreation
industries
5
—
1
6
2%
Limited-service restaurants
1
2
2
5
1%
Other miscellaneous durable goods merchant
wholesalers
5
—
—
5
1%
Other technical and trade schools
—
5
—
5
1%
Other spectator sports
5
—
—
5
1%
Plumbing, heating, and air-conditioning
contractors
3
—
1
4
1%
Offices of dentists
2
1
—
3
1%
Landscaping services
2
—
1
3
1%
Other warehousing and storage
3
—
—
3
1%
All other miscellaneous wood product
manufacturing
3
—
—
3
1%
Offices of physicians (except mental
health specialists)
3
—
—
3
1%
Vocational rehabilitation services
3
—
—
3
1%
Elementary and secondary schools
2
—
—
2
1%
All other miscellaneous general purpose
machinery manufacturing
2
—
—
2
1%
Sewing, needlework, and piece goods
stores
2
—
—
2
1%
Pet care (except veterinary) services
2
—
—
2
1%
Automotive body, paint, and interior
repair and maintenance
2
—
—
2
1%
Amusement arcades
2
—
—
2
1%
Offices of real estate agents and
brokers
2
—
—
2
1%
Other**
49
1
23
73
19%
Total
$
292
$
14
$
42
$
348
100%
* Of the SBL commercial mortgage and SBL construction loans, $79
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 June 30,
2022
(Excludes government guaranteed portion of
SBA 7a loans and PPP loans)
SBL commercial mortgage*
SBL construction*
SBL non-real estate
Total
% Total
(dollars in millions)
Florida
$
67
$
—
$
5
$
72
20%
California
48
2
3
53
15%
North Carolina
23
7
2
32
9%
New York
25
—
3
28
8%
Pennsylvania
22
—
2
24
6%
Colorado
11
4
1
16
5%
Illinois
15
—
2
17
5%
Texas
12
—
4
16
5%
New Jersey
7
—
7
14
4%
Virginia
9
—
1
10
3%
Connecticut
10
—
—
10
3%
Georgia
7
—
2
9
3%
Tennessee
8
—
—
8
2%
Ohio
6
—
—
6
2%
Michigan
3
—
—
3
1%
Other States
19
1
10
30
9%
Total
$
292
$
14
$
42
$
348
100%
* Of the SBL commercial mortgage and SBL construction loans, $79
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 June 30,
2022
Type*
State
SBL commercial mortgage*
(in millions)
Mental health and substance abuse
center
FL
$
10
Hotel
FL
9
Lawyer’s office
CA
9
General warehousing and storage
PA
7
Hotel
NY
6
Hotel
NC
5
Assisted living facility
FL
5
Mental health and substance abuse
center
CT
5
Technical and trade school
NC
5
Hotel
PA
5
Total
$
66
* All of 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 June 30, 2022
Type
# Loans
Balance
Weighted average origination date
LTV
Weighted average interest
rate
(dollars in millions)
Real estate bridge loans (multi-family
apartment loans recorded at book value)*
95
$
1,107
74%
4.52%
Non-SBA commercial real estate loans, at
fair value:
Multi-family (apartment bridge loans)*
48
$
697
76%
4.74%
Hospitality (hotels and lodging)
8
71
65%
5.65%
Retail
4
52
71%
5.01%
Other
5
13
74%
5.06%
65
833
74%
4.84%
Fair value adjustment
(6)
Total non-SBA commercial real estate
loans, at fair value
827
Total commercial real estate loans
$
1,934
74%
4.67%
*In the third quarter of 2021, we resumed 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 June
30, 2022
15 largest loans as of June 30,
2022
State
Balance
Origination date LTV
State
Balance
Origination date LTV
(dollars in millions)
(dollars in millions)
Texas
$
678
76%
Texas
$
41
75%
Georgia
189
73%
Texas
39
79%
Ohio
115
72%
Texas
39
72%
Florida
103
73%
Tennessee
38
72%
Tennessee
101
70%
Texas
37
75%
Alabama
89
74%
Texas
37
80%
Arizona
56
72%
Michigan
31
79%
Other States each <$55 million
603
74%
Tennessee
30
62%
Total
$
1,934
74%
Missouri
30
72%
Mississippi
29
79%
Texas
28
77%
Texas
27
77%
New Jersey
27
77%
Ohio
27
74%
Oklahoma
27
78%
15 Largest loans
$
487
75%
Institutional banking loans outstanding
at June 30, 2022
Type
Principal
% of total
(dollars in millions)
Securities backed lines of credit
(SBLOC)
$
1,257
52%
Insurance backed lines of credit
(IBLOC)
1,017
42%
Advisor financing
155
6%
Total
$
2,429
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 June 30,
2022
Principal amount
% Principal to collateral
(dollars in millions)
$
18
41%
16
62%
14
35%
9
32%
9
64%
9
44%
9
70%
8
73%
6
29%
6
51%
Total and weighted average
$
104
49%
Insurance backed lines of credit (IBLOC)
IBLOC loans are backed by the cash value of eligible life
insurance policies which have been assigned to us. We generally
lend up to 95% of such cash value. Our underwriting standards
require approval of the insurance companies which carry the
policies backing these loans. Currently, eight insurance companies
have been approved and, as of April 21, 2022, all were rated
Excellent (A or better) by AM BEST.
Direct lease financing* by type as of
June 30, 2022
Principal balance
% Total
(dollars in millions)
Construction
$
116
20%
Government agencies and public
institutions**
91
16%
Waste management and remediation
services
68
12%
Real estate and rental and leasing
60
10%
Retail trade
49
8%
Health care and social assistance
31
5%
Transportation and warehousing
31
5%
Professional, scientific, and technical
services
20
3%
Wholesale trade
17
3%
Manufacturing
17
3%
Educational services
8
1%
Finance and insurance
7
1%
Arts, entertainment and recreation
4
1%
Other
64
12%
Total
$
583
100%
* Of the total $583 million of direct lease financing, $500
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
June 30, 2022
State
Principal balance
% Total
(dollars in millions)
Florida
$
93
16%
Utah
52
9%
California
49
8%
New Jersey
40
7%
Pennsylvania
39
7%
Texas
39
7%
New York
31
5%
North Carolina
26
4%
Maryland
24
4%
Connecticut
17
3%
Washington
17
3%
Georgia
14
2%
Idaho
12
2%
Alabama
10
2%
Illinois
10
2%
Other States
110
19%
Total
$
583
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 June 30, 2022
The Bancorp, Inc.
9.51%
13.46%
13.84%
13.46%
The Bancorp Bank
10.45%
14.84%
15.22%
14.84%
"Well capitalized" institution (under FDIC
regulations-Basel III)
5.00%
8.00%
10.00%
6.50%
As of December 31, 2021
The Bancorp, Inc.
10.40%
14.72%
15.13%
14.72%
The Bancorp Bank
10.98%
15.48%
15.88%
15.48%
"Well capitalized" institution (under FDIC
regulations-Basel III)
5.00%
8.00%
10.00%
6.50%
Three months ended
Six months ended
June 30,
June 30,
2022
2021
2022
2021
Selected operating ratios
Return on average assets (1)
1.71%
1.67%
1.70%
1.62%
Return on average equity (1)
18.63%
19.42%
18.29%
18.62%
Net interest margin
3.17%
3.19%
3.14%
3.26%
(1) Annualized
Book value per share table
June 30,
March 31,
December 31,
June 30,
2022
2022
2021
2021
Book value per share
$
11.55
$
11.41
$
11.37
$
10.77
Loan quality table
June 30,
March 31,
December 31,
June 30,
2022
2022
2021
2021
(dollars in thousands)
Nonperforming loans to total loans
0.18%
0.20%
0.10%
0.31%
Nonperforming assets to total assets
0.39%
0.38%
0.33%
0.40%
Allowance for credit losses to total
loans
0.40%
0.46%
0.48%
0.52%
Nonaccrual loans
$
3,698
$
3,621
$
3,161
$
7,346
Loans 90 days past due still accruing
interest
4,848
4,597
461
1,550
Other real estate owned
18,873
18,873
18,873
17,343
Total nonperforming assets
$
27,419
$
27,091
$
22,495
$
26,239
Gross dollar volume (GDV) (1)
Three months ended
June 30,
March 31,
December 31,
June 30,
2022
2021
2021
2021
(in thousands)
Prepaid and debit card GDV
$
28,394,897
$
28,564,582
$
24,821,576
$
27,106,763
(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 June 30, 2022
(dollars in millions)
Balances
% Growth
Major business lines
Average approximate rates *
Balances **
Year over year
Linked quarter annualized
Loans
Institutional banking ***
2.9%
$ 2,429
35%
39%
Small business lending****
4.9%
740
6%
14%
Leasing
6.0%
583
15%
33%
Commercial real estate (non-SBA loans, at
fair value)
4.8%
827
nm
nm
Real estate bridge loans (recorded at book
value)
4.5%
1,107
nm
nm
Weighted average yield
4.1%
$ 5,686
Non-interest income
% Growth
Deposits: Fintech
solutions group
Current quarter
Year over year
Prepaid and debit card issuance, and other
payments
0.4%
$ 5,650
(1%)
nm
$ 22.4
5%
* Average rates are for the quarter ended June 30, 2022. ** 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
eligible life insurance policies, and investment advisor financing.
**** Small Business Lending is substantially comprised of SBA
loans. Loan growth percentages exclude short-term PPP loans.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220727005832/en/
The Bancorp, Inc. Andres Viroslav Director, Investor
Relations 215-861-7990 andres.viroslav@thebancorp.com
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