The Bancorp, Inc. ("The Bancorp") (NASDAQ: TBBK), a financial
holding company, today reported financial results for the first
quarter of 2021.
Highlights
- For the quarter ended March 31, 2021, The Bancorp earned net
income of $26.1 million from continuing operations, and $0.44
diluted earnings per share from combined continuing and
discontinued operations.
- Return on assets and equity for the quarter ended March 31,
2021 amounted to 1.6% and 18%, respectively, compared to 1.6% and
17%, respectively, for the quarter ended December 31, 2020. (all
percentages “annualized”.)
- Net interest margin amounted to 3.34% for the quarter ended
March 31, 2021, compared to 3.34% for the quarter ended March 31,
2020 and 3.58% for the quarter ended December 31, 2020.
- Net interest income increased 25% to $53.8 million for the
quarter ended March 31, 2021, compared to $42.9 million for the
quarter ended March 31, 2020.
- Average loans and leases, including loans at fair value,
increased 37% to $4.48 billion for the quarter ended March 31,
2021, compared to $3.27 billion for the quarter ended March 31,
2020.
- Prepaid, debit card and related fees increased 4% to $19.2
million for the quarter ended March 31, 2021, compared to $18.5
million for the quarter ended March 31, 2020. Gross dollar volume
(GDV), representing total spend on cards, increased 23% period over
period.
- SBLOC (securities backed lines of credit), IBLOC (insurance
backed lines of credit) and advisor financing loans increased 45%
year over year and 5% quarter over quarter to $1.68 billion at
March 31, 2021.
- Small Business Loans, including those held at fair value,
increased 16% year over year to $692.1 million at March 31, 2021,
exclusive of $190.3 million of Paycheck Protection Program (PPP)
balances outstanding at that date. Those balances reflect payments
on previously outstanding PPP loans and $95 million of first
quarter 2021 PPP loans. There were 630 PPP loans made in first
quarter 2021, generating approximate fees of $3.4 million, with 90%
of such loans under $350,000. Those fees will be recognized
throughout full year 2021, which is the estimated period of
repayment by the U.S. government.
- Leasing increased 9% year over year to $484.3 million at March
31, 2021.
- The average interest rate on $6.04 billion of average deposits
and interest-bearing liabilities during the first quarter of 2021
was 0.21%. Average prepaid and debit card account deposits of $4.28
billion for first quarter 2021, reflected an increase of 36% over
the $3.15 billion for the quarter ended March 31, 2020.
- Consolidated and The Bancorp Bank (“the Bank”) leverage ratios
were 8.62% and 8.69%, respectively, at March 31, 2021. The Bancorp
and its subsidiary, The Bank, remain well capitalized.
- Book value per common share at March 31, 2021 was $10.42 per
share compared to $8.69 at March 31, 2020, an increase of 20%,
primarily as a result of retained earnings per share.
- The Bancorp repurchased 594,428 shares of its common stock at
an average cost of $16.82 per share during the three months ended
March 31, 2021.
Damian Kozlowski, The Bancorp’s Chief Executive Officer, said,
“Our business plan for 2021 is in full implementation. The main
focus continues to be product and platform expansion with a
rigorous focus on building the best payments ecosystem in the
financial services industry. Our plan includes a comprehensive and
integrated analysis of the market and competitors, and the needed
investments to build towards the future and create scalable core
competencies that our partners can use to innovate and grow. We
also continue to invest heavily in anti-money laundering and
compliance to have best-in-class capabilities to meet regulatory
guidance and expectations. We are currently on track to meet or
exceed our financial targets for 2021. We continue to closely watch
the impact of the full reopening of the US economy, Fed policy,
government stimulus, interest rates and the virtualization of
consumer spending to understand the likely impacts on TBBK.
Currently, those impacts are mostly positive for our business model
and should drive continued growth in business volumes and
profitability into 2022. Lastly, our guidance target for 2021
continues to be $1.70 a share or approximately $100 million in net
income. The earnings per share estimates do not include share
repurchases that have been previously announced.”
The Bancorp reported net income of $26.0 million, or $0.44 per
diluted share, for the quarter ended March 31, 2021, compared to
net income of $12.6 million, or $0.22 per diluted share, for the
quarter ended March 31, 2020. Tier one capital to assets
(leverage), tier one capital to risk-weighted assets, total capital
to risk-weighted assets and common equity-tier 1 to risk-weighted
assets ratios were 8.62%, 14.81%, 15.23% and 14.81%, respectively,
compared to well-capitalized minimums of 5%, 8%, 10% and 6.5%,
respectively.
Conference Call Webcast
You may access the LIVE webcast of The Bancorp's Quarterly
Earnings Conference Call at 8:00 AM ET Friday, April 30, 2021 by
clicking on the webcast link on The Bancorp's homepage at
www.thebancorp.com. Or, you may dial 844.775.2543, access code
5792244. 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 7, 2021 by dialing 855.859.2056,
access code 5792244.
The Bancorp, Inc. (NASDAQ: TBBK) is dedicated to serving the
unique needs of non-bank financial service companies, ranging from
entrepreneurial start-ups to those on the Fortune 500. The
company’s only subsidiary, The Bancorp Bank (Member FDIC, Equal
Housing Lender), has been repeatedly recognized in the payments
industry as the Top Issuer of Prepaid Cards (US), a top merchant
sponsor bank and a top ACH originator. Specialized lending
distinctions include National Preferred SBA Lender, a leading
provider of securities backed lines of credit, and one of the few
bank-owned commercial vehicle leasing groups in the nation. For
more information please visit www.thebancorp.com.
Forward-Looking Statements
Statements in this earnings release regarding The Bancorp’s
business which are not historical facts are "forward-looking
statements." These statements may be identified by the use of
forward-looking terminology, including but not limited to the words
“may,” “believe,” “will,” “expect,” “look,” “anticipate,” “plan,”
“estimate,” “continue,” or similar words , and are based on current
expectations about important economic, political, and technological
factors, among others, and are subject to risks and uncertainties,
which could cause the actual results, events or achievements to
differ materially from those set forth in or implied by the
forward-looking statements and related assumptions. These risks and
uncertainties include those relating to the on-going COVID-19
pandemic, the impact it will have on our business and the industry
as a whole, and the resulting governmental and societal responses.
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 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 earnings release, except as may be required under applicable
law.
The Bancorp, Inc.
Financial highlights
Three months ended
Year ended
March 31,
December,
Condensed income statement
2021 (unaudited)
2020 (unaudited)
2020
(dollars in thousands, except per
share data)
Net interest income
$
53,757
$
42,911
$
194,866
Provision for credit losses
822
3,579
6,352
Non-interest income
ACH, card and other payment processing
fees
1,796
1,846
7,101
Prepaid, debit card and related fees
19,208
18,540
74,465
Net realized and unrealized gains (losses)
on commercial
loans originated for sale
1,996
(5,156)
(3,874)
Change in value of investment in
unconsolidated entity
—
(45)
(45)
Leasing related income
965
833
3,294
Other non-interest income
109
581
3,676
Total non-interest income
24,074
16,599
84,617
Non-interest expense
Salaries and employee benefits
25,658
22,741
101,737
Data processing expense
1,126
1,169
4,712
Legal expense
2,054
913
5,141
FDIC insurance
2,380
2,589
9,808
Software
3,684
3,477
14,028
Other non-interest expense
6,981
7,529
29,421
Total non-interest expense
41,883
38,418
164,847
Income from continuing operations before
income taxes
35,126
17,513
108,284
Income tax expense
9,066
4,352
27,688
Net income from continuing operations
26,060
13,161
80,596
Discontinued operations
Loss from discontinued operations before
income taxes
(124)
(775)
(3,816)
Income tax benefit
(29)
(205)
(3,304)
Net loss from discontinued operations, net
of tax
(95)
(570)
(512)
Net income
$
25,965
$
12,591
$
80,084
Net income per share from continuing
operations - basic
$
0.45
$
0.23
$
1.40
Net loss per share from discontinued
operations - basic
$
—
$
(0.01)
$
(0.01)
Net income per share - basic
$
0.45
$
0.22
$
1.39
Net income per share from continuing
operations - diluted
$
0.44
$
0.23
$
1.38
Net loss per share from discontinued
operations - diluted
$
—
$
(0.01)
$
(0.01)
Net income per share - diluted
$
0.44
$
0.22
$
1.37
Weighted average shares - basic
57,372,337
57,220,844
57,474,612
Weighted average shares - diluted
59,294,081
57,926,785
58,411,222
Balance sheet
March 31,
December 31,
September 30,
March 31,
2021 (unaudited)
2020
2020 (unaudited)
2020 (unaudited)
(dollars in thousands)
Assets:
Cash and cash equivalents
Cash and due from banks
$
7,838
$
5,984
$
6,220
$
13,610
Interest earning deposits at Federal
Reserve Bank
1,738,749
339,531
294,758
105,978
Total cash and cash equivalents
1,746,587
345,515
300,978
119,588
Investment securities, available-for-sale,
at fair value
1,128,459
1,206,164
1,264,903
1,353,278
Commercial loans, at fair value
(held-for-sale at March 31, 2020)
1,780,762
1,810,812
1,849,947
1,716,450
Loans, net of deferred fees and costs
2,827,076
2,652,323
2,488,760
1,985,755
Allowance for credit losses
(16,419)
(16,082)
(15,727)
(14,883)
Loans, net
2,810,657
2,636,241
2,473,033
1,970,872
Federal Home Loan Bank and Atlantic
Central Bankers Bank stock
1,368
1,368
1,368
1,142
Premises and equipment, net
17,196
17,608
15,849
17,148
Accrued interest receivable
20,164
20,458
18,852
15,660
Intangible assets, net
2,746
2,845
2,563
2,857
Deferred tax asset, net
10,900
9,757
7,952
12,797
Investment in unconsolidated entity, at
fair value
31,047
31,294
31,783
34,273
Assets held-for-sale from discontinued
operations
106,925
113,650
122,253
134,118
Other assets
90,530
81,129
79,821
79,925
Total assets
$
7,747,341
$
6,276,841
$
6,169,302
$
5,458,108
Liabilities:
Deposits
Demand and interest checking
$
6,231,220
$
5,205,010
$
4,882,834
$
4,512,949
Savings and money market
690,281
257,050
505,928
178,174
Total deposits
6,921,501
5,462,060
5,388,762
4,691,123
Securities sold under agreements to
repurchase
42
42
42
42
Short-term borrowings
—
—
—
140,000
Senior debt
98,406
98,314
98,222
—
Subordinated debenture
13,401
13,401
13,401
13,401
Other long-term borrowings
40,085
40,277
40,462
40,813
Other liabilities
77,142
81,583
69,954
74,625
Total liabilities
$
7,150,577
$
5,695,677
$
5,610,843
$
4,960,004
Shareholders' equity:
Common stock - authorized, 75,000,000
shares of $1.00 par value; 57,247,913 and 57,325,556 shares issued
and outstanding at March 31, 2021 and 2020, respectively
57,248
57,551
57,491
57,326
Additional paid-in capital
370,481
377,452
375,985
372,218
Retained earnings
154,418
128,453
104,282
60,960
Accumulated other comprehensive income
14,617
17,708
20,701
7,600
Total shareholders' equity
596,764
581,164
558,459
498,104
Total liabilities and shareholders'
equity
$
7,747,341
$
6,276,841
$
6,169,302
$
5,458,108
Average balance sheet and net interest
income
Three months ended March 31,
2021
Three months ended March 31,
2020
(dollars in thousands;
unaudited)
Average
Average
Average
Average
Assets:
Balance
Interest
Rate
Balance
Interest
Rate
Interest earning assets:
Loans, net of deferred fees and
costs**
$
4,476,617
$
47,811
4.27%
$
3,262,378
$
39,159
4.80%
Leases-bank qualified*
6,982
118
6.76%
10,975
200
7.29%
Investment securities-taxable
1,193,009
8,808
2.95%
1,395,545
10,495
3.01%
Investment securities-nontaxable*
4,042
35
3.46%
5,174
39
3.02%
Interest earning deposits at Federal
Reserve Bank
747,845
183
0.10%
493,876
1,623
1.31%
Net interest earning assets
6,428,495
56,955
3.54%
5,167,948
51,516
3.99%
Allowance for credit losses
(16,069)
(10,176)
Assets held-for-sale from discontinued
operations
109,128
853
3.13%
137,286
1,275
3.71%
Other assets
214,171
226,881
$
6,735,725
$
5,521,939
Liabilities and Shareholders'
Equity:
Deposits:
Demand and interest checking
$
5,501,697
$
1,617
0.12%
$
4,353,690
$
6,695
0.62%
Savings and money market
407,186
149
0.15%
173,575
50
0.12%
Time deposits
—
—
—
319,505
1,483
1.86%
Total deposits
5,908,883
1,766
0.12%
4,846,770
8,228
0.68%
Short-term borrowings
13,055
8
0.25%
56,813
165
1.16%
Repurchase agreements
41
—
—
72
—
—
Subordinated debentures
13,401
113
3.37%
13,401
162
4.84%
Senior debt
100,140
1,279
5.11%
—
—
—
Total deposits and liabilities
6,035,520
3,166
0.21%
4,917,056
8,555
0.70%
Other liabilities
111,241
113,582
Total liabilities
6,146,761
5,030,638
Shareholders' equity
588,964
491,301
$
6,735,725
$
5,521,939
Net interest income on tax equivalent
basis*
$
54,642
$
44,236
Tax equivalent adjustment
32
50
Net interest income
$
54,610
$
44,186
Net interest margin *
3.34%
3.34%
* Full taxable equivalent basis, using a statutory Federal tax rate
of 21% for 2021 and 2020. ** Includes loans held-for-sale at March
31, 2020. All periods include commercial loans, at fair value and
non-accrual loans. NOTE: In the table above, the 2021 interest on
loans reflects $1.4 million of fees which are not expected to
recur. The fees 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. Interest on loans
also includes $2.4 million of interest and fees on PPP loans, which
represents the remaining recognition of fees on PPP loans made in
2020, and the initial recognition of fees on PPP loans made in
2021. Approximately $3.4 million of fees on the 2021 PPP loans is
being recognized throughout full year 2021. Increases in interest
earning deposits at the Federal Reserve Bank reflect increased
deposits resulting from stimulus payments distributed to a large
segment of the population, resulting from December 2020 federal
legislation.
Allowance for credit losses
Three months ended
Year ended
March 31,
March 31,
December 31,
2021 (unaudited)
2020 (unaudited)
2020
(dollars in thousands)
Balance in the allowance for credit losses
at beginning of period (1)
$
16,082
$
12,875
$
12,875
Loans charged-off:
SBA non-real estate
144
265
1,350
Direct lease financing
97
1,193
2,243
SBLOC
15
–
–
Total
256
1,458
3,593
Recoveries:
SBA non-real estate
4
19
103
Direct lease financing
2
84
570
Total
6
103
673
Net charge-offs
250
1,355
2,920
Provision credited to allowance, excluding
commitment provision
587
3,363
6,127
Balance in allowance for credit losses at
end of period
$
16,419
$
14,883
$
16,082
Net charge-offs/average loans
0.01%
0.04%
0.07%
Net charge-offs/average assets
—
0.02%
0.05%
(1)
Excludes activity from assets held-for-sale from
discontinued operations.
Loan portfolio
March 31,
December 31,
September 30,
March 31,
2021
2020
2020
2020
(in thousands)
SBL non-real estate
$
305,446
$
255,318
$
293,488
$
84,946
SBL commercial mortgage
320,013
300,817
270,264
233,220
SBL construction
20,692
20,273
27,169
48,823
Small business loans *
646,151
576,408
590,921
366,989
Direct lease financing
484,316
462,182
430,675
445,967
SBLOC / IBLOC**
1,622,359
1,550,086
1,428,253
1,156,433
Advisor financing ***
58,919
48,282
26,600
–
Other specialty lending
2,251
2,179
2,194
2,711
Other consumer loans ****
4,201
4,247
3,809
4,023
2,818,197
2,643,384
2,482,452
1,976,123
Unamortized loan fees and costs
8,879
8,939
6,308
9,632
Total loans, net of unamortized fees and
costs
$
2,827,076
$
2,652,323
$
2,488,760
$
1,985,755
Small business portfolio
March 31,
December 31,
September 30,
March 31,
2021
2020
2020
2020
(in thousands)
SBL, including unamortized fees and
costs
$
647,445
$
577,944
$
590,314
$
371,072
SBL, included in commercial loans, at fair
value
234,908
243,562
250,958
223,987
Total small business loans
$
882,353
$
821,506
$
841,272
$
595,059
* The preceding table shows small business loans and small business
loans held at fair value. The small business loans held at fair
value are comprised of the government guaranteed portion of SBA 7a
loans at the dates indicated. An increase in SBL non-real estate
loans from $255.3 million to $305.4 million in the first quarter of
2021 reflected an increase of $24.5 million of PPP loans authorized
by The Consolidated Appropriations Act, 2021. PPP loans totaled
$190.3 million at March 31, 2021 and $165.7 million at December 31,
2020. In addition, the Bank provided a short-term line of credit to
another institution at March 31, 2021 in the amount of $14.6
million to initially fund PPP loans, which is included in the SBL
non-real estate category. ** Securities Backed Lines of Credit
(SBLOC) are collateralized by marketable securities, while
Insurance Backed Lines of Credit (IBLOC) are collateralized by the
cash surrender value of insurance policies. *** In 2020, we began
originating loans to investment advisors for purposes of debt
refinance, acquisition of another firm or internal succession.
Maximum loan amounts are subject to loan to value ratios of 70%,
based on third party business appraisals, but may be increased
depending upon the debt service coverage ratio. Personal guarantees
and blanket business liens are obtained as appropriate. ****
Included in the table above under Other consumer loans are demand
deposit overdrafts reclassified as loan balances totaling $932,000
and $663,000 at March 31, 2021 and December 31, 2020, respectively.
Estimated overdraft charge-offs and recoveries are reflected in the
allowance for credit losses and have been immaterial.
Small business loans as of March 31,
2021
Loan principal
(in millions)
U.S. government guaranteed portion of SBA
loans (a)
$
349
Paycheck Protection Program loans (a)
190
Commercial mortgage SBA (b)
180
Construction SBA (c)
14
Unguaranteed portion of U.S. government
guaranteed loans (d)
105
Non-SBA small business loans (e)
34
Total principal
$
872
Unamortized fees and costs
10
Total small business loans
$
882
(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 $14 million
in Construction SBA loans, $11 million are 504 first mortgages with
an origination date LTV of 50-60% and $3 million are SBA interim
loans with an approved SBA post-construction full takeout/payoff.
(d) The $105 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 $34 million of non-SBA loans is comprised of a $15
million short-term line of credit to initially fund PPP loans with
the remaining $19 million mainly comprised of approximately 20
conventional coffee/doughnut/carryout franchisee note purchases.
The majority of purchased notes were made to multi-unit operators,
are considered seasoned and have performed as agreed. A $2 million
guaranty by the seller, for an 11% first loss piece, is in place
until August 2021. Additionally, the CARES Act of 2020 (“the
CARES Act”) provided for six months of principal and interest
payments on 7a loans which generally ended in fourth quarter 2020
or in first quarter 2021. The Consolidated Appropriations Act,
2021, became law in December 2020 and provides for at least an
additional two months of such payments on SBA 7a loans, with up to
five months of payments on hotel, restaurant and other more highly
impacted loans. Unlike the six months of CARES Act payments, these
additional payments are capped at $9,000 per month.
Small business loans by type as of
March 31, 2021
(Excludes government guaranteed portion of
SBA 7a loans, PPP loans, and a line of credit to initially fund PPP
loans)
SBL commercial mortgage*
SBL construction*
SBL non-real estate
Total
% Total
(in millions)
Hotels
$
66
$
3
$
—
$
69
22%
Full-service restaurants
15
1
3
19
5%
Baked goods stores
4
—
12
16
5%
Child day care services
15
—
1
16
5%
Car washes
10
1
—
11
5%
Offices of lawyers
10
—
—
10
3%
Assisted living facilities for the
elderly
1
8
—
9
3%
Limited-service restaurants
4
1
4
9
3%
Funeral homes and funeral services
8
—
—
8
2%
Fitness and recreational sports
centers
5
1
2
8
2%
Lessors of nonresidential buildings
(except miniwarehouses)
8
—
—
8
2%
General warehousing and storage
7
—
1
8
2%
All other amusement and recreation
industries
5
—
—
5
1%
Outpatient mental health and substance
abuse centers
5
—
—
5
1%
Gasoline stations with convenience
stores
4
—
—
4
1%
Offices of dentists
3
—
—
3
1%
Other warehousing and storage
3
—
—
3
1%
New car dealers
3
—
—
3
1%
Offices of physicians (except mental
health specialists)
3
—
—
3
1%
All other miscellaneous general purpose
machinery manufacturing
3
—
—
3
1%
Automotive body, paint, and interior
repair and maintenance
2
—
1
3
1%
All other specialty trade contractors
1
—
1
2
1%
Pet care (except veterinary) services
2
—
—
2
1%
Sewing, needlework, and piece goods
stores
2
—
—
2
1%
Caterers
2
—
—
2
1%
Amusement arcades
2
—
1
3
1%
Plumbing, heating, and air- conditioning
contractors
2
—
—
2
1%
Offices of real estate agents and
brokers
2
—
—
2
1%
Landscaping services
—
—
2
2
1%
Independent artists, writers, and
performers
2
—
—
2
1%
Drinking places (alcoholic beverages)
1
—
1
2
1%
All other miscellaneous food
manufacturing
1
—
1
2
1%
Sports and recreation instruction
—
—
2
2
1%
Other**
45
1
24
70
20%
Total
$
246
$
16
$
56
$
318
100%
* Of the SBL commercial mortgage and SBL construction loans, $63.5
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 $1.5 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,
2021
(Excludes government guaranteed portion of
SBA 7a loans, PPP loans, and a line of credit to initially fund PPP
loans)
SBL commercial mortgage*
SBL construction*
SBL non-real estate
Total
% Total
(in millions)
Florida
$
45
$
8
$
8
$
61
19%
California
40
1
5
46
14%
Pennsylvania
30
—
4
34
11%
Illinois
23
—
3
26
8%
North Carolina
22
1
3
26
8%
New York
15
3
5
23
7%
Texas
12
—
5
17
5%
Tennessee
11
—
1
12
4%
New Jersey
4
—
7
11
3%
Virginia
9
—
2
11
3%
Georgia
7
—
2
9
3%
Colorado
3
2
1
6
2%
Michigan
3
—
1
4
1%
Washington
3
—
—
3
1%
Ohio
3
—
—
3
1%
Other States
16
1
9
26
10%
Total
$
246
$
16
$
56
$
318
100%
* Of the SBL commercial mortgage and SBL construction loans, $63.5
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,
2021
Type*
State
SBL commercial mortgage*
SBL construction*
Total
(in millions)
Lawyers office
CA
$
9
$
—
$
9
Hotel
FL
9
—
9
General warehouse and storage
PA
7
—
7
Hotel
NC
6
—
6
Assisted living facility
FL
—
5
5
Outpatient mental health and substance
abuse center
FL
5
—
5
Hotel
NC
5
—
5
Fitness and recreation sports center
PA
4
—
4
Hotel
PA
4
—
4
Hotel
TN
4
—
4
Total
$
53
$
5
$
58
* All the top 10 loans are 504 SBA loans with 50%-60% origination
date loan-to-values. The top 10 loan table above does not include
loans to the extent that they are U.S. government guaranteed.
Commercial real estate loans, at fair
value, excluding SBA loans, are as follows including LTV at
origination:
Type as of March 31, 2021
Type
# Loans
Balance
Weighted average origination date
LTV
Weighted average minimum interest
rate
(dollars in millions)
Multifamily (apartments)
155
$
1,405
76%
4.77%
Hospitality (hotels and lodging)
11
71
65%
5.75%
Retail
7
48
71%
4.55%
Other
7
27
70%
5.23%
180
$
1,551
76%
4.82%
Fair value adjustment
(5)
Total
$
1,546
State diversification as of March
31, 2021
15 largest loans (all
multifamily) as of March 31, 2021
State
Balance
Origination date LTV
State
Balance
Origination date LTV
(in millions)
(in millions)
Texas
$
432
77%
North Carolina
$
44
78%
Georgia
211
77%
Texas
38
79%
North Carolina
114
77%
Texas
36
80%
Arizona
112
76%
Pennsylvania
34
77%
Alabama
57
76%
Texas
30
75%
Ohio
56
69%
Nevada
29
80%
Other states each <$50 million
569
73%
Texas
27
77%
Total
$
1,551
76%
Arizona
27
79%
Mississippi
26
79%
North Carolina
25
77%
Texas
25
77%
Texas
24
77%
Georgia
23
79%
Alabama
23
77%
Georgia
20
79%
15 Largest loans
$
431
78%
Institutional banking loans outstanding
at March 31, 2021
Type
Principal
% of total
(in millions)
Securities backed lines of credit
(SBLOC)
$
1,117
66%
Insurance backed lines of credit
(IBLOC)
505
30%
Advisor financing
59
4%
Total
$
1,681
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 periods, 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,
2021
Principal amount
% Principal to collateral
(in millions)
$
60
43%
17
38%
14
27%
12
29%
10
40%
10
20%
10
32%
8
72%
8
23%
8
34%
Total and weighted average
$
157
35%
Insurance backed lines of credit (IBLOC) IBLOC loans are
backed by the cash value of life insurance policies which have been
assigned to us. We lend up to 100% of such cash value. Our
underwriting standards require approval of the insurance companies
which carry the policies backing these loans. Currently, seven
insurance companies have been approved and, as of April 17, 2021,
all were rated Superior (A+ or better) by AM BEST.
Direct lease financing* by type as of
March 31, 2021
Principal balance
% Total
(in millions)
Government agencies and public
institutions**
$
79
16%
Construction
75
16%
Waste management and remediation
services
63
13%
Real estate, rental and leasing
56
12%
Retail trade
46
9%
Transportation and warehousing
29
6%
Health care and social assistance
26
5%
Professional, scientific, and technical
services
18
4%
Wholesale trade
15
3%
Manufacturing
11
2%
Educational services
8
2%
Arts, entertainment, and recreation
6
1%
Other
52
11%
Total
$
484
100%
* Of the total $484 million of direct lease financing, $447 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, 2021
State
Principal balance
% Total
(in millions)
Florida
$
83
17%
California
44
9%
New Jersey
34
7%
New York
31
6%
Pennsylvania
25
5%
Utah
25
5%
North Carolina
24
5%
Maryland
23
5%
Washington
15
3%
Connecticut
15
3%
Texas
13
3%
Missouri
12
2%
Georgia
10
2%
Alabama
9
2%
Idaho
9
2%
Other states
112
24%
Total
$
484
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, 2021
The Bancorp, Inc.
8.62%
14.81%
15.23%
14.81%
The Bancorp Bank
8.69%
14.95%
15.37%
14.95%
"Well capitalized" institution (under FDIC
regulations-Basel III)
5.00%
8.00%
10.00%
6.50%
As of December 31, 2020
The Bancorp, Inc.
9.20%
14.43%
14.84%
14.43%
The Bancorp Bank
9.11%
14.27%
14.68%
14.27%
"Well capitalized" institution (under FDIC
regulations-Basel III)
5.00%
8.00%
10.00%
6.50%
Three months ended
Year ended
March 31,
December
2021
2020
2020
Selected operating ratios
Return on average assets (1)
1.56%
0.91%
1.34%
Return on average equity (1)
17.88%
10.28%
15.08%
Net interest margin
3.34%
3.34%
3.45%
(1)
Annualized
Book value per share table
March 31,
December 31,
September 30,
March 31,
2021
2020
2020
2020
Book value per share
$
10.42
$
10.10
$
9.71
$
8.69
Loan quality table
March 31,
December 31,
September 30,
March 31,
2021
2020
2020
2020
(dollars in thousands)
Nonperforming loans to total loans
0.49%
0.48%
0.49%
0.40%
Nonperforming assets to total assets
0.18%
0.20%
0.20%
0.14%
Allowance for credit losses
0.58%
0.61%
0.63%
0.75%
Nonaccrual loans
$
11,961
$
12,227
$
12,275
$
5,645
Loans 90 days past due still accruing
interest
1,762
497
24
2,245
Other real estate owned
—
—
—
—
Total nonperforming assets
$
13,723
$
12,724
$
12,299
$
7,890
Gross dollar volume (GDV) (1)
Three months ended
March 31,
December 31,
September 30,
March 31,
2021
2020
2020
2020
(in thousands)
Prepaid and debit card GDV
$
28,094,930
$
22,523,855
$
23,964,508
$
22,752,931
(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 March 31, 2021
(dollars in millions)
Balances
% Growth
Major business lines
Average approximate rates *
Balances **
Year over year
Linked quarter annualized
Loans
Institutional banking ***
2.5%
$ 1,681
45%
21%
Small Business Lending****
5.0%
882
16%
22%
Leasing
6.4%
484
9%
19%
Commercial real estate (non-SBA at fair
value)
4.8%
1,546
nm
nm
Weighted average yield
4.2%
$ 4,593
Non-interest income
% Growth
Deposits
Current quarter
Year over year
Payment solutions (prepaid and debit card
issuance)
0.1%
$ 4,281
36%
nm
$ 19.2
4%
Card payment and ACH processing
0.2%
$ 1,048
32%
nm
$ 1.8
nm
* Average rates are for the quarter ended March 31, 2021. **
Loan and deposit categories are respectively based on period-end
and average quarterly balances. *** Institutional Banking loans are
comprised of Securities Backed Lines of Credit (SBLOC),
collateralized by marketable securities, Insurance Backed Lines of
Credit (IBLOC), collateralized by the cash surrender value of
insurance policies, and Advisor financing. **** Small Business
Lending is substantially comprised of SBA loans. Loan growth
percentages exclude short-term PPP loans.
Analysis of Walnut Street*
marks
Loan activity
Marks
(dollars in millions)
Original Walnut Street loan balance,
December 31, 2014
$
267
Marks through December 31, 2014 sale
date
(58)
$
(58)
Sales price of Walnut Street
209
Equity investment from independent
investor
(16)
December 31, 2014 Bancorp book value
193
Additional marks 2015 - 2020
(46)
(46)
2021 Marks
—
Payments received
(116)
March 31, 2021 Bancorp book value**
$
31
Total marks
$
(104)
Divided by:
Original Walnut Street loan balance
$
267
Percentage of total mark to original
balance
39%
* Walnut Street is the investment in unconsolidated entity on the
balance sheet which reflects the investment in a securitization of
certain loans from the Bank's discontinued loan portfolio. **
Approximately 34% of expected principal recoveries were from loans
and properties pending liquidation or other resolution as of March
31, 2021.
Walnut Street portfolio composition as
of March 31, 2021
Collateral type
% of Portfolio
Commercial real estate non-owner occupied
- Retail
67.4%
Construction and land
24.3%
Other
8.3%
Total
100.0%
Cumulative analysis of marks on
discontinued commercial loan principal as of March 31, 2021
Discontinued
Cumulative
% to original
loan principal
marks
principal
(dollars in millions)
Commercial loan discontinued principal
before marks
$
61
Florida mall held in discontinued other
real estate owned
42
$
(27)
Mark at March 31, 2021
(4)
Cumulative mark at March 31, 2021
$
103
$
(31)
30%
Analysis of discontinued commercial
loan relationships as of March 31, 2021
Performing
Nonperforming
Total
Performing
Nonperforming
Total
loan principal
loan principal
loan principal
loan marks
loan marks
marks
(in millions)
5 loan relationships > $5 million
$
39
$
—
$
39
$
(3)
$
—
$
(3)
Loan relationships < $5 million
9
9
18
—
(1)
(1)
$
48
$
9
$
57
$
(3)
$
(1)
$
(4)
Quarterly activity for commercial loan
discontinued principal
Commercial
loan principal
(in millions)
Commercial loan discontinued principal
December 31, 2020 before marks
$
64
Quarterly paydowns and other
reductions
(3)
Commercial loan discontinued principal
March 31, 2021 before marks
61
Marks March 31, 2021
(4)
Net commercial loan exposure March 31,
2021
57
Residential mortgages
29
Net loans
86
Florida mall in other real estate
owned
15
6 properties in other real estate
owned
6
Total discontinued assets at March 31,
2021
$
107
Discontinued commercial loan
composition as of March 31, 2021
Collateral type
Unpaid principal balance
Mark at March 31, 2021
Mark as % of portfolio
(in millions)
Commercial real estate - non-owner
occupied:
Retail
$
4
$
(0.6)
15%
Office
2
—
—
Other
18
(0.1)
1%
Construction and land
10
(0.1)
1%
Commercial non-real estate and
industrial
3
(0.1)
3%
1 to 4 family construction
7
(2.5)
36%
First mortgage residential non-owner
occupied
8
—
—
Commercial real estate owner occupied:
Retail
7
(0.7)
10%
Residential junior mortgage
1
—
—
Other
1
—
—
Total
$
61
$
(4.1)
7%
Less: mark
(4)
Net commercial loan exposure March 31,
2021
$
57
$
(4.1)
Loan payment deferrals as of March 31,
2021
Cumulative months deferred
(1)
Total loan balance deferrals
Total non- guaranteed loan
balance deferrals
Total loan balances
% of total loan balances with
deferrals
% of total non- guaranteed loan
balances with deferrals
(dollars in millions)
Commercial real estate loans held at fair
value (excluding SBA loans shown below)
6.0
$
19
$
19
$
1,546
1.2%
1.2%
Securities backed lines of credit,
insurance backed lines of credit & advisor financing
—
—
—
1,681
—
—
SBL commercial mortgage
8.6
44
24
437
10.1%
5.5%
SBL construction
—
—
—
21
—
—
SBL non-real estate and PPP
7.6
15
4
424
3.5%
0.9%
Direct lease financing
—
—
—
484
—
—
Discontinued operations
8.5
1
1
90
1.1%
1.1%
Other consumer loans and specialty
lending
—
—
—
7
—
—
Total
7.8
$
79
$
48
$
4,690
1.7%
1.0%
(1)
Weighted average of cumulative months deferred for loan
payments currently on deferral.
Note: SBL balances above include loans
reported in commercial loans, at fair value, in the balance
sheet.
Note: At March 31, 2021, SBA 7a loans, included in the three SBL
loan balance categories above, totaled $454.0 million of which
$105.0 million was not U.S. government guaranteed. The CARES Act
provided SBA 7a borrowers six months of principal and interest
payments. The Consolidated Appropriations Act, 2021, became law in
December 2020 and provided for at least an additional two months of
such payments on SBA 7a loans, with up to five months of payments
on hotel, restaurant and other more highly impacted loans which
began on February 1, 2021.
SBA 7a deferral distribution by type as
of March 31, 2021 (comprised of the unguaranteed portion of SBA
7a loans)
Total
% Total
(in thousands)
Full-service restaurants
$
3,115
30%
Hotels*
1,535
15%
Sports and recreation instruction
1,157
11%
Services for the elderly and persons with
disabilities
947
9%
Offices of dentists
829
8%
Drinking places (alcoholic beverages)
726
7%
All other amusement and recreation
industries
580
6%
Administrative management services
334
3%
Commercial printing
333
3%
Automotive glass replacement shops
315
3%
Cosmetology and barber schools
244
2%
Clothing and furnishings merchant
wholesalers
220
2%
Janitorial services
184
1%
Total
$
10,519
100%
* At March 31, 2021, SBA 7a loans, included in SBL, totaled $454.0
million of which $105.0 million was not U.S. government guaranteed.
The CARES Act provided SBA 7a borrowers six months of principal and
interest payments. The Consolidated Appropriations Act, 2021,
became law in December 2020 and provided for at least an additional
two months of such payments on SBA 7a loans, with up to five months
of payments on hotel, restaurant and other more highly impacted
loans which began on February 1, 2021.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210429006055/en/
The Bancorp, Inc. Andres Viroslav Director, Investor
Relations 215-861-7990 aviroslav@thebancorp.com
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