The Bancorp, Inc. ("The Bancorp" or “we”) (NASDAQ: TBBK), a
financial holding company, today reported financial results for the
first quarter of 2023.
Highlights
- The Bancorp reported net income of $49.1 million, or $0.88 per
diluted share, for the quarter ended March 31, 2023, compared to
net income of $29.0 million, or $0.50 per diluted share, for the
quarter ended March 31, 2022, or a 76% increase in income per
diluted share.
- Return on assets and equity for the quarter ended March 31,
2023 amounted to 2.6% and 28%, respectively, compared to 1.7% and
18%, respectively, for the quarter ended March 31, 2022 (all
percentages “annualized”).
- The increases in net income and return on assets and equity
reflected increases in net interest income. Net interest income
increased 62% to $85.8 million for the quarter ended March 31,
2023, compared to $52.9 million for the quarter ended March 31,
2022. Net interest income increases reflected the impact of
continuing Federal Reserve rate increases on the Bancorp’s variable
rate loans and securities.
- Net interest margin amounted to 4.67% for the quarter ended
March 31, 2023, compared to 3.12% for the quarter ended March 31,
2022, and 4.21% for the quarter ended December 31, 2022.
- Loans, net were $5.35 billion at March 31, 2023, compared to
$5.49 billion at December 31, 2022 and $4.16 billion at March 31,
2022. Those changes reflected a decrease of 2% quarter over quarter
and an increase of 29% year over year.
- Gross dollar volume (“GDV”), representing the total amounts
spent on prepaid and debit cards, increased $5.45 billion, or 19%,
to $34.01 billion for the quarter ended March 31, 2023 compared to
the quarter ended March 31, 2022. The increase reflects continued
organic growth with existing partners and the impact from new
clients added throughout 2022. Total prepaid, debit card, ACH and
other payment fees increased 24% to $25.5 million for first quarter
2023 compared to the first quarter of 2022.
- Small business loans (“SBL”), including those held at fair
value, grew 11% year over year to $785.8 million at March 31, 2023,
and 3% quarter over quarter. That growth is exclusive of Paycheck
Protection Program (“PPP”) loan balances which amounted to $4.0
million and $23.7 million, respectively, at March 31, 2023 and
March 31, 2022.
- Direct lease financing balances increased 21% year over year to
$652.5 million at March 31, 2023, and 3% quarter over quarter.
- At March 31, 2023, the $1.75 billion balance of real estate
bridge loans, consisting entirely of apartment buildings, compared
to $1.67 billion at December 31, 2022, reflecting quarter over
quarter growth of 5%. At March 31, 2022, these loans totaled $803.5
million.
- Security backed lines of credit (“SBLOC”), insurance backed
lines of credit (“IBLOC”) and investment advisor financing loans
collectively increased 1% year over year and decreased 10% quarter
over quarter to $2.24 billion at March 31, 2023.
- The average interest rate on $6.77 billion of average deposits
and interest-bearing liabilities during the first quarter of 2023
was 2.15%. Average deposits of $6.62 billion for the first quarter
of 2023, reflected an increase of 8% from the $6.11 billion of
average deposits for the quarter ended March 31, 2022.
- The Bancorp emphasizes safety and soundness, and liquidity. The
vast majority of its funding is comprised of large numbers of
insured and small balance accounts. The Bancorp also has lines of
credit with U.S. government agencies totaling approximately $3.3
billion as of April 27, 2023 and access to significant other
liquidity.
- As of March 31, 2023, 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 9.88%, 14.34%, 14.84% and 14.34%, 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 March 31, 2023 was $13.11 per
share compared to $11.41 per common share at March 31, 2022, an
increase of 15%. Increases resulting from retained earnings were
partially offset by reductions in the market value of securities
available for sale, which are recognized through equity.
- The Bancorp repurchased 778,442 shares of its common stock at
an average cost of $32.12 per share during the quarter ended March
31, 2023.
CEO and President Damian Kozlowski stated “The recent
dislocation in the banking industry did not materially impact our
company. With granular deposits spread across more than 130 million
insured small accounts through our Fin-tech ecosystem, a low risk
variable rate and short duration credit book and significant
liquidity and borrowing capacity, TBBK was well positioned to
manage the increased volatility exhibited in the beginning of 2023.
Our performance expectations for the first quarter were
significantly surpassed. We are raising guidance from $3.20 a share
to $3.60 a share, without including the impact of anticipated share
buy backs of $25 million per quarter in 2023.”
Conference Call Webcast
You may access the LIVE webcast of The Bancorp's Quarterly
Earnings Conference Call at 8:00 AM ET Friday, April 28, 2023 by
clicking on the webcast link on The Bancorp's homepage at
www.thebancorp.com. Or you may dial 1.888.886.7786, conference code
02423750. You may listen to the replay of the webcast following the
live call on The Bancorp's investor relations website or
telephonically until Friday, May 5, 2023 by dialing 1.877.674.7070,
access code 423750#.
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
Three months ended
Year ended
March 31,
December 31,
Consolidated condensed income
statements
2023 (unaudited)
2022 (unaudited)
2022
(Dollars in thousands, except per
share and share data)
Net interest income
$
85,816
$
52,853
$
248,841
Provision for credit losses
1,903
1,507
7,108
Non-interest income
ACH, card and other payment processing
fees
2,171
1,984
8,935
Prepaid, debit card and related fees
23,323
18,652
77,236
Net realized and unrealized gains on
commercial
loans, at fair value
1,725
3,383
13,531
Leasing related income
1,490
973
4,822
Other non-interest income
280
120
1,159
Total non-interest income
28,989
25,112
105,683
Non-interest expense
Salaries and employee benefits
29,785
23,848
105,368
Data processing expense
1,321
1,189
4,972
Legal expense
958
794
3,878
Legal settlement
—
—
1,152
Civil money penalty
—
—
1,750
FDIC insurance
955
974
3,270
Software
4,237
3,864
16,211
Other non-interest expense
10,774
7,683
32,901
Total non-interest expense
48,030
38,352
169,502
Income before income taxes
64,872
38,106
177,914
Income tax expense
15,750
9,140
47,701
Net income
49,122
28,966
130,213
Net income per share - basic
$
0.89
$
0.51
$
2.30
Net income per share - diluted
$
0.88
$
0.50
$
2.27
Weighted average shares - basic
55,452,815
57,115,903
56,556,303
Weighted average shares - diluted
56,048,142
58,095,980
57,268,946
Condensed consolidated balance
sheets
March 31,
December 31,
September 30,
March 31,
2023 (unaudited)
2022
2022 (unaudited)
2022 (unaudited)
(Dollars in thousands, except per
share and share data)
Assets:
Cash and cash equivalents
Cash and due from banks
$
13,736
$
24,063
$
22,537
$
11,399
Interest earning deposits at Federal
Reserve Bank
773,446
864,126
700,175
662,827
Total cash and cash equivalents
787,182
888,189
722,712
674,226
Investment securities, available-for-sale,
at fair value
787,429
766,016
790,594
907,338
Commercial loans, at fair value
493,334
589,143
818,040
1,180,885
Loans, net of deferred fees and costs
5,354,347
5,486,853
5,267,375
4,164,298
Allowance for credit losses
(23,794
)
(22,374
)
(19,689
)
(19,051
)
Loans, net
5,330,553
5,464,479
5,247,686
4,145,247
Federal Home Loan Bank, Atlantic Central
Bankers Bank, and Federal Reserve Bank stock
12,629
12,629
12,629
1,663
Premises and equipment, net
21,319
18,401
18,443
16,314
Accrued interest receivable
33,729
32,005
25,506
17,284
Intangible assets, net
1,950
2,049
2,149
2,348
Other real estate owned
21,117
21,210
18,873
18,873
Deferred tax asset, net
18,290
19,703
27,241
18,521
Other assets
99,427
89,176
93,201
99,961
Total assets
$
7,606,959
$
7,903,000
$
7,777,074
$
7,082,660
Liabilities:
Deposits
Demand and interest checking
$
6,607,767
$
6,559,617
$
5,934,591
$
5,506,083
Savings and money market
96,890
140,496
575,381
722,240
Time deposits, $100,000 and over
—
330,000
401,331
—
Total deposits
6,704,657
7,030,113
6,911,303
6,228,323
Securities sold under agreements to
repurchase
42
42
42
42
Senior debt
99,142
99,050
98,958
98,774
Subordinated debenture
13,401
13,401
13,401
13,401
Other long-term borrowings
9,972
10,028
38,928
39,318
Other liabilities
54,597
56,335
50,704
50,507
Total liabilities
$
6,881,811
$
7,208,969
$
7,113,336
$
6,430,365
Shareholders' equity:
Common stock - authorized, 75,000,000
shares of $1.00 par value; 55,329,629 and 57,155,028 shares issued
and outstanding at March 31, 2023 and 2022, respectively
55,330
55,690
56,202
57,155
Additional paid-in capital
277,814
299,279
311,569
336,604
Retained earnings
418,441
369,319
329,078
268,072
Accumulated other comprehensive loss
(26,437
)
(30,257
)
(33,111
)
(9,536
)
Total shareholders' equity
725,148
694,031
663,738
652,295
Total liabilities and shareholders'
equity
$
7,606,959
$
7,903,000
$
7,777,074
$
7,082,660
Average balance sheet and net interest
income
Three months ended March 31,
2023
Three months ended March 31,
2022
(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*
$
5,987,179
$
106,204
7.10
%
$
5,136,377
$
50,508
3.93
%
Leases-bank qualified**
3,361
69
8.21
%
4,015
105
10.46
%
Investment securities-taxable
774,055
9,300
4.81
%
939,511
4,891
2.08
%
Investment securities-nontaxable**
3,343
41
4.91
%
3,559
32
3.60
%
Interest earning deposits at Federal
Reserve Bank
580,058
6,585
4.54
%
686,614
347
0.20
%
Net interest earning assets
7,347,996
122,199
6.65
%
6,770,076
55,883
3.30
%
Allowance for credit losses
(22,533
)
(17,810
)
Other assets
237,721
224,312
$
7,563,184
$
6,976,578
Liabilities and Shareholders'
Equity:
Deposits:
Demand and interest checking
$
6,406,834
$
32,383
2.02
%
$
5,575,228
$
1,406
0.10
%
Savings and money market
132,279
1,219
3.69
%
532,047
200
0.15
%
Time deposits
84,333
858
4.07
%
—
—
—
Total deposits
6,623,446
34,460
2.08
%
6,107,275
1,606
0.11
%
Short-term borrowings
20,500
234
4.57
%
555
—
—
Repurchase agreements
42
—
—
41
—
—
Long-term borrowings
9,998
126
5.04
%
—
—
—
Subordinated debentures
13,401
261
7.79
%
13,401
116
3.46
%
Senior debt
99,092
1,279
5.16
%
98,724
1,279
5.18
%
Total deposits and liabilities
6,766,479
36,360
2.15
%
6,219,996
3,001
0.19
%
Other liabilities
87,116
104,207
Total liabilities
6,853,595
6,324,203
Shareholders' equity
709,589
652,375
$
7,563,184
$
6,976,578
Net interest income on tax equivalent
basis**
$
85,839
$
52,882
Tax equivalent adjustment
23
29
Net interest income
$
85,816
$
52,853
Net interest margin **
4.67
%
3.12
%
* 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 2023 and 2022.
NOTE: In the table above,
interest on loans for 2023 and 2022 includes $10,000 and $440,000,
respectively, of interest and fees on PPP loans.
Allowance for credit losses
Three months ended
Year ended
March 31,
March 31,
December 31,
2023 (unaudited)
2022 (unaudited)
2022
(Dollars in thousands)
Balance in the allowance for credit losses
at beginning of period
$
22,374
$
17,806
$
17,806
Loans charged-off:
SBA non-real estate
214
98
885
Direct lease financing
905
191
576
Consumer - other
3
—
—
Total
1,122
289
1,461
Recoveries:
SBA non-real estate
202
12
140
SBA commercial mortgage
75
—
—
Direct lease financing
67
19
124
Other loans
—
—
24
Total
344
31
288
Net charge-offs
778
258
1,173
Provision for credit losses, excluding
commitment provision
2,198
1,503
5,741
Balance in allowance for credit losses at
end of period
$
23,794
$
19,051
$
22,374
Net charge-offs/average loans
0.01%
0.01%
0.03%
Net charge-offs/average assets
0.01%
—
0.02%
Loan portfolio
March 31,
December 31,
September 30,
March 31,
2023 (unaudited)
2022
2022 (unaudited)
2022 (unaudited)
(Dollars in thousands)
SBL non-real estate
$
114,334
$
108,954
$
116,080
$
122,387
SBL commercial mortgage
492,798
474,496
429,865
385,559
SBL construction
33,116
30,864
26,841
31,432
Small business loans
640,248
614,314
572,786
539,378
Direct lease financing
652,541
632,160
599,796
538,616
SBLOC / IBLOC *
2,053,450
2,332,469
2,369,106
2,067,233
Advisor financing **
189,425
172,468
168,559
146,461
Real estate bridge loans
1,752,322
1,669,031
1,488,119
803,477
Other loans ***
60,210
61,679
64,980
61,096
5,348,196
5,482,121
5,263,346
4,156,261
Unamortized loan fees and costs
6,151
4,732
4,029
8,037
Total loans, including unamortized fees
and costs
$
5,354,347
$
5,486,853
$
5,267,375
$
4,164,298
Small business portfolio
March 31,
December 31,
September 30,
March 31,
2023 (unaudited)
2022
2022 (unaudited)
2022 (unaudited)
(Dollars in thousands)
SBL, including unamortized fees and
costs
$
648,858
$
621,641
$
579,156
$
545,462
SBL, included in loans, at fair value
140,909
146,717
159,914
183,408
Total small business loans ****
$
789,767
$
768,358
$
739,070
$
728,870
* 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 70% of the estimated business enterprise value, based on
a third-party valuation, 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 $4.8 million and $2.6
million at March 31, 2023 and December 31, 2022, 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 March 31, 2023
Loan principal
(Dollars in millions)
U.S. government guaranteed portion of SBA
loans (a)
$
380
Paycheck Protection Program loans (PPP)
(a)
4
Commercial mortgage SBA (b)
257
Construction SBA (c)
11
Non-guaranteed portion of U.S. government
guaranteed loans (d)
104
Non-SBA small business loans
23
Total principal
$
779
Unamortized fees and costs
11
Total small business loans
$
790
(a) This is the portion of SBA 7a loans
(7a) and PPP loans that 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 $11 million in Construction SBA
loans, $9 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
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 March 31, 2023
(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
$
74
$
—
$
—
$
74
19%
Full-service restaurants
16
3
2
21
5%
Lessors of nonresidential buildings
19
—
—
19
5%
Car washes
17
2
—
19
5%
Child day care services
14
—
1
15
4%
Homes for the elderly
16
—
—
16
4%
Outpatient mental health and substance
abuse centers
15
—
—
15
4%
Funeral homes and funeral services
15
—
—
15
4%
Gasoline stations with convenience
stores
13
—
—
13
3%
Fitness and recreational sports
centers
8
—
2
10
3%
Offices of lawyers
9
—
—
9
2%
Lessors of other real estate property
8
—
—
8
2%
General warehousing and storage
7
—
—
7
2%
Plumbing, heating, and air-conditioning
companies
6
—
1
7
2%
Limited-service restaurants
1
2
3
6
2%
Lessors of residential buildings and
dwellings
5
—
—
5
1%
Miscellaneous durable goods merchants
5
—
—
5
1%
Technical and trade schools
—
5
—
5
1%
Packaged frozen food merchant
wholesalers
5
—
—
5
1%
Other amusement and recreation
industry
4
—
—
4
1%
Offices of dentists
2
1
—
3
1%
Other warehousing and storage
3
—
—
3
1%
Vocational rehabilitation services
3
—
—
3
1%
Miscellaneous wood product
manufacturing
3
—
—
3
1%
Other**
75
2
28
105
25%
Total
$
343
$
15
$
37
$
395
100%
* Of the SBL commercial mortgage and SBL
construction loans, $90 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 March 31,
2023
(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)
California
$
71
$
3
$
3
$
77
19%
Florida
66
1
4
71
18%
North Carolina
34
7
2
43
11%
New York
26
—
5
31
8%
Pennsylvania
21
—
1
22
6%
Georgia
15
—
2
17
4%
New Jersey
12
—
4
16
4%
Illinois
14
—
1
15
4%
Texas
12
—
4
16
4%
Other States <$10 million
72
4
11
87
22%
Total
$
343
$
15
$
37
$
395
100%
* Of the SBL commercial mortgage and SBL
construction loans, $90 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 March 31,
2023
Type
State
SBL commercial mortgage
(Dollars in millions)
Mental health and substance abuse
center
FL
$
10
Hotel
FL
9
Lawyers office
CA
8
Hotel
NC
7
General warehousing and storage
PA
7
Hotel
FL
6
Hotel
NY
6
Hotel
NC
5
Mental health and substance abuse
center
CT
5
Lessor of residential building
NC
5
Total
$
68
Commercial real estate loans, excluding SBA loans, are as
follows including LTV at origination:
Type as of March 31, 2023
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)*
133
$
1,752
72%
8.40%
Non-SBA commercial real estate loans, at
fair value:
Multi-family (apartment bridge loans)*
19
$
303
76%
8.20%
Hospitality (hotels and lodging)
3
30
65%
8.50%
Retail
2
12
72%
7.30%
Other
2
9
73%
5.20%
26
354
75%
8.11%
Fair value adjustment
(2
)
Total non-SBA commercial real estate
loans, at fair value
352
Total commercial real estate loans
$
2,104
73%
8.36%
*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 March
31, 2023
15 largest loans as of March 31,
2023
State
Balance
Origination
date LTV
State
Balance
Origination
date LTV
(Dollars in millions)
(Dollars in millions)
Texas
$
783
73%
Texas
$
42
75%
Florida
242
71%
Texas
40
72%
Georgia
239
70%
Texas
39
75%
Tennessee
99
72%
Texas
39
79%
Ohio
90
69%
Tennessee
37
72%
Michigan
68
70%
Texas
37
80%
Alabama
66
72%
Michigan
36
62%
Other States each <$55 million
517
75%
Florida
33
72%
Total
$
2,104
74%
Texas
32
67%
Michigan
32
79%
Texas
31
62%
Tennessee
30
71%
Indiana
30
76%
Ohio
29
74%
Texas
29
77%
15 Largest loans
$
516
73%
Institutional banking loans outstanding
at March 31, 2023
Type
Principal
% of total
(Dollars in millions)
Securities backed lines of credit
(SBLOC)
$
1,132
50%
Insurance backed lines of credit
(IBLOC)
922
41%
Advisor financing
189
9%
Total
$
2,243
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 March 31,
2023
Principal amount
% Principal to
collateral
(Dollars in millions)
$
20
54%
18
40%
13
28%
9
35%
9
65%
9
43%
9
61%
8
68%
7
69%
6
38%
Total and weighted average
$
108
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, nine insurance companies
have been approved and, as of March 31, 2023, all were rated A- or
better by AM BEST.
Direct lease financing* by
type as of March 31, 2023
Principal balance
% Total
(Dollars in millions)
Construction
$
112
17%
Waste management and remediation
services
85
13%
Government agencies and public
institutions**
81
12%
Real estate and rental and leasing
67
10%
Retail trade
47
7%
Finance and insurance
40
6%
Health care and social assistance
31
5%
Manufacturing
22
3%
Professional, scientific, and technical
services
22
3%
Wholesale trade
18
3%
Transportation and warehousing
12
2%
Educational services
9
1%
Mining, quarrying, and oil and gas
extraction
8
1%
Other
99
17%
Total
$
653
100%
* Of the total $653 million of direct lease financing, $575 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 March 31, 2023
State
Principal balance
% Total
(Dollars in millions)
Florida
$
91
14%
California
68
10%
Utah
64
10%
Pennsylvania
41
6%
New Jersey
40
6%
New York
33
5%
North Carolina
31
5%
Texas
29
4%
Maryland
28
4%
Connecticut
26
4%
Washington
16
2%
Georgia
16
2%
Idaho
15
2%
Ohio
13
2%
Illinois
12
2%
Other States
130
22%
Total
$
653
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 March 31, 2023
The Bancorp, Inc.
9.88%
14.34%
14.84%
14.34%
The Bancorp Bank, National Association
11.00%
15.94%
16.44%
15.94%
"Well capitalized" institution (under
federal regulations-Basel III)
5.00%
8.00%
10.00%
6.50%
As of December 31, 2022
The Bancorp, Inc.
9.63%
13.40%
13.87%
13.40%
The Bancorp Bank, National Association
10.73%
14.95%
15.42%
14.95%
"Well capitalized" institution (under
federal regulations-Basel III)
5.00%
8.00%
10.00%
6.50%
Three months ended
Year ended
March 31,
December 31,
2023
2022
2022
Selected operating ratios
Return on average assets (1)
2.63%
1.68%
1.81%
Return on average equity (1)
28.07%
18.01%
19.34%
Net interest margin
4.67%
3.12%
3.55%
(1) Annualized
Book value per share table
March 31,
December 31,
September 30,
March 31,
2023
2022
2022
2022
Book value per share
$
13.11
$
12.46
$
11.81
11.41
Loan quality table
March 31,
December 31,
September 30,
March 31,
2023
2022
2022
2022
(Dollars in thousands)
Nonperforming loans to total loans
0.26%
0.33%
0.16%
0.20%
Nonperforming assets to total assets
0.46%
0.50%
0.35%
0.38%
Allowance for credit losses to total
loans
0.44%
0.41%
0.37%
0.46%
Nonaccrual loans
$
12,938
$
10,356
$
3,860
$
3,621
Loans 90 days past due still accruing
interest
873
7,775
4,415
4,597
Other real estate owned
21,117
21,210
18,873
18,873
Total nonperforming assets
$
34,928
$
39,341
$
27,148
$
27,091
Gross dollar volume (GDV) (1)
Three months ended
March 31,
December 31,
September 30,
March 31,
2023
2022
2022
2022
(Dollars in thousands)
Prepaid and debit card GDV
$
34,011,792
$
29,454,074
$
28,119,428
$
28,564,582
(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 March 31, 2023
(Dollars in millions)
Balances
% Growth
Major business lines
Average
approximate
rates(1)
Balances(2)
Year over
year
Linked
quarter
annualized
Loans
Institutional banking(3)
6.1%
$
2,243
1%
(42)%
Small business lending(4)
6.5%
790
11%
11%
Leasing
6.7%
653
21%
13%
Commercial real estate (non-SBA loans, at
fair value)
8.1%
352
nm
nm
Real estate bridge loans (recorded at book
value)
8.4%
1,752
118%
20%
Weighted average yield
7.0%
$
5,790
Non-interest income
% Growth
Deposits: Fintech
solutions group
Current
quarter(5)
Year over
year
Prepaid and debit card issuance, and other
payments
2.2%
$
5,968
9%
nm
$
25.5
24%
(1)Average rates are for the quarter ended
March 31, 2023.
(2)Loan and deposit categories are
respectively based on period-end and average quarterly
balances.
(3)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.
(4)Small Business Lending is substantially
comprised of SBA loans. Loan growth percentages exclude short-term
PPP loans.
(5)Includes $1.4 million from termination
of a partner contract and $0.6 million from reclassified fees.
Adjusted Year over Year growth is 14%.
Summary of credit lines available
Notwithstanding that the vast majority of the Company’s funding
is comprised of insured and small balance accounts, the Company
maintains lines of credit exceeding potential liquidity
requirements as follows. The Company also has access to other
substantial sources of liquidity.
April 15, 2023
(Dollars in thousands)
Federal Reserve Bank
$
2,081,498
Federal Home Loan Bank
1,246,883
Total lines of credit available
$
3,328,381
Estimated insured vs Other uninsured deposits
The vast majority of the Company’s deposits are insured and low
balance and accordingly do not constitute the liquidity risk
experienced by certain institutions. Accordingly the deposit base
is comprised as follows.
March 31, 2023
Insured
90%
Low balance stored value
5%
Other uninsured
5%
Total deposits
100%
Calculation of efficiency
ratio(1)
Three months ended
March 31,
December 31,
2003
2022
(Dollars in thousands)
Net interest income
$
85,816
$
76,760
Non-interest income
28,989
25,740
Total revenue
$
114,805
$
102,500
Non-interest expense
$
48,030
$
43,475
Efficiency ratio
42%
42%
(1) The efficiency ratio is calculated by
dividing GAAP total non-interest expense by the total of GAAP net
interest income and non-interest income. This ratio compares
revenues generated with the amount of expense required to generate
such revenues, and may be used as one measure of overall
efficiency.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230426005969/en/
The Bancorp, Inc. Andres Viroslav Director, Investor
Relations 215-861-7990 andres.viroslav@thebancorp.com
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