The Bancorp, Inc. ("The Bancorp" or “we”) (NASDAQ: TBBK), a
financial holding company, today reported financial results for the
third quarter of 2022.
Highlights
- The Bancorp reported net income of $30.6 million, or $0.54 per
diluted share, for the quarter ended September 30, 2022, compared
to net income of $28.3 million, or $0.48 per diluted share, for the
quarter ended September 30, 2021. The $0.54 was impacted by a
reduction of approximately $0.03 per share resulting from a
non-deductible $1.75 million SEC civil money penalty. Additionally,
a $3.3 million net unrealized fair value loss was reflected in “Net
realized and unrealized gains on commercial loans, at fair value”,
which reduced diluted net income per share by approximately $0.04.
The loss resulted primarily from the only movie theater loan in the
Company’s portfolios. That loan was originated in 2015 and was a
legacy loan from the initial entry into the CMBS securitization
business which was subsequently discontinued in 2016. After
discontinuance, non-SBA loan originations were primarily comprised
of apartment building loans. Of the $2.15 billion of non-SBA
commercial loans, at fair value and real estate bridge loans
(“REBL”) which together comprise the non-SBA CRE portfolio, $2.05
billion are comprised of apartment building loans.
- For the quarter ended September 30, 2022, The Bancorp earned
pre-tax income of $42.4 million, which reflected the aforementioned
$1.75 million civil money penalty, compared to $36.5 million for
the quarter ended September 30, 2021, which included $1.2 million
of Payroll Protection Program (“PPP”) related interest and fees,
which did not recur in the current year quarter.
- Return on assets and equity for the quarter ended September 30,
2022 amounted to 1.7% and 18%, respectively, compared to 1.8% and
18%, respectively, for the quarter ended September 30, 2021 (all
percentages “annualized”).
- Net interest margin amounted to 3.69% for the quarter ended
September 30, 2022, compared to 3.35% for the quarter ended
September 30, 2021 and 3.17% for the quarter ended June 30,
2022.
- Net interest income increased 27% to $64.7 million for the
quarter ended September 30, 2022, compared to $50.9 million for the
quarter ended September 30, 2021. The 2021 quarter included $1.2
million of PPP related interest and fees, which did not recur in
the current year quarter.
- Excluding commercial loans, at fair value, which were
originally generated for sale, total loans increased to $5.27
billion at September 30, 2022, compared to $4.75 billion at June
30, 2022 and $3.14 billion at September 30, 2021. Those increases
reflected growth of 11% quarter over quarter and 66% year over
year. Those percentage increases exclude the impact of $54.2
million of September 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 $3.73 billion, or 15%,
to $28.12 billion for the quarter ended September 30, 2022 compared
to the quarter ended September 30, 2021. Total prepaid, debit card,
ACH and other payment fees increased 6% to $21.4 million for third
quarter 2022 compared to third quarter 2021.
- SBLOC (securities backed lines of credit), IBLOC (insurance
backed lines of credit) and investment advisor financing loans
collectively increased 32% year over year and 4% quarter over
quarter to $2.54 billion at September 30, 2022.
- Small Business Loans, including those held at fair value, grew
3% year over year to $732.4 million at September 30, 2022, and 0.4%
quarter over quarter. That growth is exclusive of PPP loan balances
which amounted to $6.7 million and $71.3 million, respectively, at
September 30, 2022 and September 30, 2021.
- Direct lease financing balances increased 17% year over year to
$599.8 million at September 30, 2022, and 3% quarter over
quarter.
- We resumed non-SBA commercial real estate bridge lending in the
third quarter of 2021. At September 30, 2022, the balance of such
real estate bridge loans was $1.49 billion compared to $1.11
billion at June 30, 2022, reflecting quarter over quarter growth of
34%.
- The average interest rate on $6.46 billion of average deposits
and interest-bearing liabilities during the third quarter of 2022
was 1.19%. Average deposits of $6.11 billion for third quarter
2022, reflected an increase of 10.5% from the $5.53 billion of
average deposits for the quarter ended September 30, 2021.
- As of September 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 9.66%, 13.13%, 13.56% and 13.13%, respectively,
compared to well-capitalized minimums of 5%, 8%, 10% and 6.5%,
respectively. The Bancorp and its wholly owned subsidiary, The
Bancorp Bank, National Association, each remain well capitalized
under banking regulations.
- Book value per common share at September 30, 2022 was $11.81
per share compared to $11.13 per share at September 30, 2021, an
increase of 6%. Increases resulting from retained earnings were
partially offset by reductions in the market value of securities,
which are recognized through equity.
- The Bancorp repurchased 663,934 shares of its common stock at
an average cost of $22.59 per share during the quarter ended
September 30, 2022.
CEO Damian Kozlowski stated “Revenue growth continues across our
platform as lending volumes steadily increase and new payment
partners are added to our ecosystem. The expansion of both net
interest margin due to rising rates and payment fees across our
verticals should support significantly increased profitability in
2023. We are issuing preliminary guidance for 2023 of $3.20 per
share excluding the net impact of future share buybacks but
including the expected impact of rate increases based on fed funds
futures. We also reiterate $2.25 to $2.30 guidance for 2022. The
$3.20 guidance for 2023 would represent approximately a 40%
increase in earnings per share over 2022 and would result in an ROE
percentage in the mid-20s and an ROA above 2%. We expect to
increase our share repurchases to $25 million per quarter, or $100
million in 2023, from $15 million a quarter, or $60 million, in
2022.”
Conference Call Webcast
You may access the LIVE webcast of The Bancorp's Quarterly
Earnings Conference Call at 8:00 AM ET Friday, October 28, 2022 by
clicking on the webcast link on The Bancorp's homepage at
www.thebancorp.com. Or you may dial 1.866.652.5200 and ask to join
The Bancorp, Inc. call. 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 4, 2022 by dialing
1.877.344.7529, access code 5997176.
About The Bancorp
The Bancorp, Inc. (NASDAQ: TBBK), headquartered in Wilmington,
Delaware, through its subsidiary, The Bancorp Bank, National
Association, (or “The Bancorp Bank, N. A.”) 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
“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
Nine months ended
September 30,
September 30,
Consolidated condensed income
statements
2022
2021
2022
2021
(Dollars in thousands, except per
share and share data)
Net interest income
$
64,659
$
50,893
$
172,081
$
158,719
Provision for credit losses
822
1,613
4,331
1,484
Non-interest income
ACH, card and other payment processing
fees
2,230
1,905
6,552
5,605
Prepaid, debit card and related fees
19,175
18,223
57,865
56,878
Net realized and unrealized gains on
commercial
loans, at fair value
745
4,306
11,262
8,881
Leasing related income
1,048
1,968
3,566
4,700
Other non-interest income
228
186
698
459
Total non-interest income
23,426
26,588
79,943
76,523
Non-interest expense
Salaries and employee benefits
28,001
25,094
77,848
77,839
Data processing expense
1,292
1,209
3,727
3,481
Legal expense
907
1,251
3,175
5,349
Legal settlement
—
—
1,152
—
Civil money penalty
1,750
—
1,750
—
FDIC insurance
679
266
2,326
5,235
Software
4,001
4,045
12,030
11,435
Other non-interest expense
8,200
7,519
24,019
21,811
Total non-interest expense
44,830
39,384
126,027
125,150
Income from continuing operations before
income taxes
42,433
36,484
121,666
108,608
Income tax expense
11,829
8,289
31,694
25,195
Net income from continuing operations
30,604
28,195
89,972
83,413
Discontinued operations
Income from discontinued operations before
income taxes
—
87
—
324
Income tax expense
—
21
—
76
Net income from discontinued operations,
net of tax
—
66
—
248
Net income
$
30,604
$
28,261
$
89,972
$
83,661
Net income per share from continuing
operations - basic
$
0.54
$
0.49
$
1.58
$
1.45
Net income per share from discontinued
operations - basic
$
—
$
—
$
—
$
0.01
Net income per share - basic
$
0.54
$
0.49
$
1.58
$
1.46
Net income per share from continuing
operations - diluted
$
0.54
$
0.48
$
1.56
$
1.41
Net income per share from discontinued
operations - diluted
$
—
$
—
$
—
$
0.01
Net income per share - diluted
$
0.54
$
0.48
$
1.56
$
1.42
Weighted average shares - basic
56,429,425
57,198,778
56,782,524
57,221,174
Weighted average shares - diluted
57,008,224
58,628,306
57,510,986
58,932,146
Condensed consolidated balance
sheets
September 30,
June 30,
December 31,
September 30,
2022 (unaudited)
2022 (unaudited)
2021
2021 (unaudited)
(Dollars in thousands, except per
share and share data)
Assets:
Cash and cash equivalents
Cash and due from banks
$
22,537
$
12,873
$
5,382
$
6,687
Interest earning deposits at Federal
Reserve Bank
700,175
329,992
596,402
310,642
Total cash and cash equivalents
722,712
342,865
601,784
317,329
Investment securities, available-for-sale,
at fair value
790,594
826,616
953,709
1,054,223
Commercial loans, at fair value
818,040
995,493
1,388,416
1,615,312
Loans, net of deferred fees and costs
5,267,375
4,754,697
3,747,224
3,136,662
Allowance for credit losses
(19,689
)
(19,087
)
(17,806
)
(16,159
)
Loans, net
5,247,686
4,735,610
3,729,418
3,120,503
Federal Home Loan Bank, Atlantic Central
Bankers Bank, and Federal Reserve Bank stock
12,629
1,643
1,663
1,663
Premises and equipment, net
18,443
16,693
16,156
16,602
Accrued interest receivable
25,506
19,264
17,871
17,180
Intangible assets, net
2,149
2,248
2,447
2,547
Other real estate owned
18,873
18,873
18,873
19,488
Deferred tax asset, net
27,241
23,344
12,667
12,237
Assets held-for-sale from discontinued
operations
—
—
3,268
5,274
Other assets
93,201
137,086
96,967
86,105
Total assets
$
7,777,074
$
7,119,735
$
6,843,239
$
6,268,463
Liabilities:
Deposits
Demand and interest checking
$
5,934,591
$
5,394,562
$
5,561,365
$
4,734,352
Savings and money market
575,381
486,189
415,546
378,160
Time deposits, $100,000 and over
401,331
—
—
—
Total deposits
6,911,303
5,880,751
5,976,911
5,112,512
Securities sold under agreements to
repurchase
42
42
42
42
Short-term borrowings
—
385,000
—
300,000
Senior debt
98,958
98,866
98,682
98,590
Subordinated debenture
13,401
13,401
13,401
13,401
Other long-term borrowings
38,928
39,125
39,521
39,715
Other liabilities
50,704
46,014
62,228
66,226
Total liabilities
$
7,113,336
$
6,463,199
$
6,190,785
$
5,630,486
Shareholders' equity:
Common stock - authorized, 75,000,000
shares of $1.00 par value; 56,201,560 and 57,330,846 shares issued
and outstanding at September 30, 2022 and 2021, respectively
56,202
56,865
57,371
57,331
Additional paid-in capital
311,569
323,774
349,686
357,528
Retained earnings
329,078
298,474
239,106
212,114
Accumulated other comprehensive (loss)
income
(33,111
)
(22,577
)
6,291
11,004
Total shareholders' equity
663,738
656,536
652,454
637,977
Total liabilities and shareholders'
equity
$
7,777,074
$
7,119,735
$
6,843,239
$
6,268,463
Average balance sheet and net interest
income
Three months ended September 30,
2022
Three months ended September 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*
$
5,904,996
$
75,536
5.12
%
$
4,573,431
$
46,357
4.05
%
Leases-bank qualified**
3,299
55
6.67
%
5,031
87
6.92
%
Investment securities-taxable
824,178
6,792
3.30
%
1,012,007
6,882
2.72
%
Investment securities-nontaxable**
3,559
31
3.48
%
3,558
32
3.60
%
Interest earning deposits at Federal
Reserve Bank
267,424
1,525
2.28
%
479,350
167
0.14
%
Net interest earning assets
7,003,456
83,939
4.79
%
6,073,377
53,525
3.53
%
Allowance for credit losses
(19,111
)
(16,277
)
Assets held-for-sale from discontinued
operations
—
—
—
90,598
754
3.33
%
Other assets
212,078
214,715
$
7,196,423
$
6,362,413
Liabilities and Shareholders'
Equity:
Deposits:
Demand and interest checking
$
5,545,115
$
12,726
0.92
%
$
5,124,189
$
1,063
0.08
%
Savings and money market
479,260
2,792
2.33
%
404,775
146
0.14
%
Time deposits
87,562
547
2.50
%
—
—
—
Total deposits
6,111,937
16,065
1.05
%
5,528,964
1,209
0.09
%
Short-term borrowings
200,423
1,235
2.46
%
13,097
7
0.21
%
Repurchase agreements
41
—
—
41
—
—
Long-term borrowings
39,035
506
5.19
%
—
—
—
Subordinated debentures
13,401
177
5.28
%
13,401
112
3.34
%
Senior debt
98,910
1,279
5.17
%
100,329
1,279
5.10
%
Total deposits and liabilities
6,463,747
19,262
1.19
%
5,655,832
2,607
0.18
%
Other liabilities
72,539
78,038
Total liabilities
6,536,286
5,733,870
Shareholders' equity
660,137
628,543
$
7,196,423
$
6,362,413
Net interest income on tax equivalent
basis**
$
64,677
$
51,672
Tax equivalent adjustment
18
25
Net interest income
$
64,659
$
51,647
Net interest margin **
3.69
%
3.35
%
* Includes commercial loans, at fair value. All periods include
non-accrual loans. ** Full taxable equivalent basis, using a
statutory Federal tax rate of 21% for 2022 and 2021.
NOTE: In the table above, interest on loans for 2022 and 2021
includes $21,000 and $1.2 million, respectively, of interest and
fees on PPP loans.
Average balance sheet and net interest
income
Nine months ended September 30,
2022
Nine months ended September 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*
$
5,531,902
$
181,174
4.37
%
$
4,541,262
$
143,546
4.21
%
Leases-bank qualified**
3,657
185
6.75
%
5,925
301
6.77
%
Investment securities-taxable
880,426
17,115
2.59
%
1,094,633
22,891
2.79
%
Investment securities-nontaxable**
3,559
93
3.48
%
3,824
99
3.45
%
Interest earning deposits at Federal
Reserve Bank
499,104
2,876
0.77
%
781,606
650
0.11
%
Net interest earning assets
6,918,648
201,443
3.88
%
6,427,250
167,487
3.47
%
Allowance for credit losses
(19,087
)
(16,254
)
Assets held for sale from discontinued
operations
—
—
—
99,472
2,388
3.20
%
Other assets
203,143
225,802
$
7,102,704
$
6,736,270
Liabilities and Shareholders'
Equity:
Deposits:
Demand and interest checking
$
5,598,028
$
18,522
0.44
%
$
5,452,604
$
4,007
0.10
%
Savings and money market
522,525
4,192
1.07
%
446,016
487
0.15
%
Time deposits
29,508
547
2.47
%
—
—
—
Total deposits
6,150,061
23,261
0.50
%
5,898,620
4,494
0.10
%
Short-term borrowings
71,589
1,267
2.36
%
8,717
15
0.23
%
Repurchase agreements
41
—
—
41
—
—
Long-term borrowings
39,286
506
1.72
%
—
—
—
Subordinated debentures
13,401
432
4.30
%
13,401
337
3.35
%
Senior debt
98,817
3,838
5.18
%
100,237
3,838
5.11
%
Total deposits and liabilities
6,373,195
29,304
0.61
%
6,021,016
8,684
0.19
%
Other liabilities
71,413
105,683
Total liabilities
6,444,608
6,126,699
Shareholders' equity
658,096
609,571
$
7,102,704
$
6,736,270
Net interest income on tax equivalent
basis**
$
172,139
$
161,191
Tax equivalent adjustment
58
84
Net interest income
$
172,081
$
161,107
Net interest margin **
3.32
%
3.29
%
* Includes commercial loans, at fair value. All periods include
non-accrual loans. ** Full taxable equivalent basis, using a
statutory Federal tax rate of 21% for 2022 and 2021.
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 for 2022 and
2021 includes $502,000 and $4.9 million, respectively, of interest
and fees on PPP loans.
Allowance for credit losses
Nine months ended
Year ended
September 30,
September 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
861
896
1,138
SBA commercial mortgage
—
23
417
Direct lease financing
312
248
412
SBLOC
—
15
15
Consumer - home equity
—
10
10
Consumer - other
—
—
14
Total
1,173
1,192
2,006
Recoveries:
SBA non-real estate
57
18
51
SBA commercial mortgage
—
9
9
Direct lease financing
108
50
58
Consumer - home equity
—
—
1,099
Total
165
77
1,217
Net charge-offs
1,008
1,115
789
Provision for credit losses, excluding
commitment provision
2,891
1,192
2,513
Balance in allowance for credit losses at
end of period
$
19,689
$
16,159
$
17,806
Net charge-offs/average loans
0.02%
0.04%
0.03%
Net charge-offs/average assets
0.01%
0.02%
0.01%
(1) Excludes activity from discontinued operations.
Loan portfolio
September 30,
June 30,
December 31,
September 30,
2022 (unaudited)
2022 (unaudited)
2021
2021 (unaudited)
(Dollars in thousands)
SBL non-real estate
$
116,080
$
112,854
$
147,722
$
171,845
SBL commercial mortgage
429,865
425,219
361,171
367,272
SBL construction
26,841
27,042
27,199
23,117
Small business loans
572,786
565,115
536,092
562,234
Direct lease financing
599,796
583,086
531,012
514,068
SBLOC / IBLOC *
2,369,106
2,274,256
1,929,581
1,834,523
Advisor financing **
168,559
155,235
115,770
81,143
Real estate bridge loans
1,488,119
1,106,875
621,702
128,699
Other loans ***
64,980
63,514
5,014
4,917
5,263,346
4,748,081
3,739,171
3,125,584
Unamortized loan fees and costs
4,029
6,616
8,053
11,078
Total loans, including unamortized fees
and costs
$
5,267,375
$
4,754,697
$
3,747,224
$
3,136,662
Small business portfolio
September 30,
June 30,
December 31,
September 30,
2022 (unaudited)
2022 (unaudited)
2021
2021 (unaudited)
(Dollars in thousands)
SBL, including unamortized fees and
costs
$
579,156
$
571,559
$
541,437
$
566,472
SBL, included in loans, at fair value
159,914
168,579
199,585
214,301
Total small business loans ****
$
739,070
$
740,138
$
741,022
$
780,773
* 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 $1.0 million and $322,000 at September 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.
Small business loans as of September 30, 2022
Loan principal
(Dollars in millions)
U.S. government guaranteed portion of SBA
loans (a)
$
371
Paycheck Protection Program loans (PPP)
(a)
7
Commercial mortgage SBA (b)
223
Construction SBA (c)
10
Non-guaranteed portion of U.S. government
guaranteed loans (d)
99
Non-SBA small business loans
21
Total principal
$
731
Unamortized fees and costs
8
Total small business loans
$
739
(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 Bancorp Bank N.A. adheres. (c) Of
the $10 million in Construction SBA loans, $9 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 $99 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.
Small business loans by type as of September 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 and motels
$
61
$
—
$
—
$
61
17%
Car washes
17
1
—
18
5%
Full-service restaurants
13
3
2
18
5%
Lessors of nonresidential buildings
16
—
—
16
5%
Child day care services
14
—
1
15
4%
Outpatient mental health and substance
abuse centers
15
—
—
15
4%
Funeral homes and funeral services
12
—
—
12
3%
Offices of lawyers
9
—
—
9
3%
Assisted living facilities for the
elderly
9
—
—
9
3%
Gasoline stations with convenience
stores
8
—
—
8
2%
Fitness and recreational sports
centers
6
—
2
8
2%
General warehousing and storage
7
—
—
7
2%
Solar electric power generation
—
—
7
7
2%
Plumbing, heating, and air-conditioning
contractors
6
—
1
7
2%
Baked goods stores
—
—
6
6
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%
Lessors of residential buildings and
dwellings
5
—
—
5
1%
Other technical and trade schools
—
5
—
5
1%
Other spectator sports
5
—
—
5
1%
Offices of dentists
3
1
—
4
1%
Other warehousing and storage
3
—
—
3
1%
Vocational rehabilitation services
3
—
—
3
1%
Other**
66
1
23
90
27%
Total
$
295
$
13
$
45
$
353
100%
* Of the SBL commercial mortgage and SBL construction loans, $74
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 $3 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, 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
$
63
$
—
$
4
$
67
19%
California
50
3
4
57
16%
North Carolina
30
7
2
39
11%
New York
23
—
9
32
9%
Pennsylvania
18
—
2
20
6%
New Jersey
12
—
7
19
5%
Illinois
15
—
2
17
5%
Texas
12
—
3
15
4%
Colorado
11
2
1
14
4%
Connecticut
10
—
1
11
3%
Virginia
9
—
1
10
3%
Georgia
7
—
2
9
3%
Tennessee
8
—
—
8
2%
Ohio
6
—
1
7
2%
Michigan
3
—
—
3
1%
Other States
18
1
6
25
7%
Total
$
295
$
13
$
45
$
353
100%
* Of the SBL commercial mortgage and SBL construction loans, $74
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, 2022
Type*
State
SBL commercial mortgage*
(Dollars in millions)
Mental health and substance abuse
center
FL
$
10
Hotel
FL
9
Lawyer's office
CA
8
General warehousing and storage
PA
7
Hotel
NY
6
Hotel
NC
6
Mental health and substance abuse
center
CT
5
Assisted living facility
FL
5
Lessors of nonresidential buildings
NC
5
Lessors of residential buildings and
dwellings
NJ
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 September 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 amortized cost)*
115
$
1,488
73
%
6.18
%
Non-SBA commercial real estate loans, at
fair value:
Multi-family (apartment bridge loans)*
35
$
564
76
%
5.82
%
Hospitality (hotels and lodging)
5
38
65
%
6.56
%
Retail
4
52
71
%
5.56
%
Other
5
14
73
%
5.07
%
49
668
75
%
5.83
%
Fair value adjustment
(10
)
Total non-SBA commercial real estate
loans, at fair value
658
Total commercial real estate loans
$
2,146
74
%
6.10
%
*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
September 30, 2022
15 largest loans as of September
30, 2022
State
Balance
Origination
date LTV
State
Balance
Origination
date LTV
(Dollars in millions)
(Dollars in millions)
Texas
$
815
74%
Texas
$
41
75%
Georgia
220
72%
Texas
39
79%
Florida
187
72%
Texas
39
72%
Ohio
100
71%
Tennessee
37
72%
Tennessee
92
70%
Texas
37
75%
Alabama
73
74%
Texas
37
80%
Michigan
73
74%
Michigan
36
71%
Other States each <$50 million
586
74%
Florida
33
72%
Total
$
2,146
74%
Texas
31
67%
Michigan
31
79%
Tennessee
30
62%
Missouri
30
72%
Texas
30
62%
Texas
29
77%
Texas
27
77%
15 Largest loans
$
507
73%
Institutional banking loans outstanding at September 30,
2022
Type
Principal
% of total
(Dollars in millions)
Securities backed lines of credit
(SBLOC)
$
1,265
50%
Insurance backed lines of credit
(IBLOC)
1,104
43%
Advisor financing
169
7%
Total
$
2,538
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, 2022
Principal amount
% Principal to
collateral
(Dollars in millions)
$
20
58%
18
42%
17
72%
14
38%
10
33%
9
66%
9
48%
9
71%
8
75%
6
32%
Total and weighted average
$
120
54%
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 August 2, 2022, all were rated A- or
better by AM BEST.
Direct lease financing* by type as of September 30,
2022
Principal balance
% Total
(Dollars in millions)
Construction
$
110
18%
Government agencies and public
institutions**
90
15%
Waste management and remediation
services
68
11%
Real estate and rental and leasing
60
10%
Retail trade
48
8%
Health care and social assistance
32
5%
Transportation and warehousing
31
5%
Finance and insurance
27
5%
Professional, scientific, and technical
services
20
3%
Manufacturing
17
3%
Wholesale trade
16
3%
Educational services
8
1%
Mining, Quarrying, and Oil and Gas
Extractions for Oil and Gas Operations
4
1%
Other
69
12%
Total
$
600
100%
* Of the total $600 million of direct lease financing, $520
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,
2022
State
Principal balance
% Total
(Dollars in millions)
Florida
$
97
16%
Utah
56
9%
California
52
9%
New Jersey
42
7%
Pennsylvania
39
7%
New York
30
5%
North Carolina
27
5%
Maryland
26
4%
Texas
26
4%
Connecticut
20
3%
Washington
16
3%
Georgia
15
3%
Idaho
14
2%
Illinois
11
2%
Alabama
10
2%
Other states and non-classified
119
19%
Total
$
600
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, 2022
The Bancorp, Inc.
9.66%
13.13%
13.56%
13.13%
The Bancorp Bank, National Association
10.79%
14.73%
15.15%
14.73%
"Well capitalized" institution (under
federal 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, National Association
10.98%
15.48%
15.88%
15.48%
"Well capitalized" institution (under
federal regulations-Basel III)
5.00%
8.00%
10.00%
6.50%
Three months ended
Nine months ended
September 30,
September 30,
2022
2021
2022
2021
Selected operating ratios
Return on average assets (1)
1.69%
1.76%
1.69%
1.66%
Return on average equity (1)
18.39%
17.84%
18.28%
18.35%
Net interest margin
3.69%
3.35%
3.32%
3.29%
(1) Annualized
Book value per share table
September 30,
June 30,
December 31,
September 30,
2022
2022
2021
2021
Book value per share
$
11.81
$
11.55
$
11.37
$
11.13
Loan quality table
September 30,
June 30,
December 31,
September 30,
2022
2022
2021
2021
(Dollars in thousands)
Nonperforming loans to total loans
0.16%
0.18%
0.10%
0.24%
Nonperforming assets to total assets
0.35%
0.39%
0.33%
0.43%
Allowance for credit losses to total
loans
0.37%
0.40%
0.48%
0.52%
Nonaccrual loans
$
3,860
$
3,698
$
3,161
$
6,106
Loans 90 days past due still accruing
interest
4,415
4,848
461
1,569
Other real estate owned
18,873
18,873
18,873
19,488
Total nonperforming assets
$
27,148
$
27,419
$
22,495
$
27,163
Gross dollar volume (GDV) (1)
Three months ended
September 30,
June 30,
December 31,
September 30,
2022
2022
2021
2021
(Dollars in thousands)
Prepaid and debit card GDV
$
28,119,428
$
28,394,897
$
24,821,576
$
24,392,188
(1) Gross dollar volume represents the total dollar amount spent
on prepaid and debit cards issued by The Bancorp Bank, N.A.
Business line quarterly summary
Quarter ended September 30, 2022
(Dollars in millions)
Balances
% Growth
Major business lines
Average
approximate
rates *
Balances **
Year over
year
Linked
quarter
annualized
Loans
Institutional banking ***
4.2%
$ 2,538
32%
18%
Small business lending****
5.6%
739
3%
1%
Leasing
6.1%
600
17%
11%
Commercial real estate (non-SBA loans, at
fair value)
5.4%
658
nm
nm
Real estate bridge loans (recorded at book
value)
6.0%
1,488
nm
nm
Weighted average yield
5.1%
$ 6,023
Non-interest income
% Growth
Deposits: Fintech
solutions group
Current
quarter
Year over
year
Prepaid and debit card issuance, and other
payments
1.1%
$ 5,397
5%
nm
$ 21.4
6%
* Average rates are for the quarter ended September 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/20221026005704/en/
The Bancorp, Inc. Andres Viroslav Director, Investor
Relations 215-861-7990 andres.viroslav@thebancorp.com
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