The Bancorp, Inc. ("The Bancorp") (NASDAQ: TBBK), a financial
holding company, today reported financial results for the second
quarter of 2021.
Highlights
- For the quarter ended June 30, 2021, The Bancorp earned net
income of $29.2 million from continuing operations, and $0.50
diluted earnings per share from combined continuing and
discontinued operations.
- Return on assets and equity for the quarter ended June 30, 2021
amounted to 1.7% and 19%, respectively, compared to 1.3% and 16%,
respectively, for the quarter ended June 30, 2020 (all percentages
“annualized.”)
- Net interest margin amounted to 3.19% for the quarter ended
June 30, 2021, compared to 3.53% for the quarter ended June 30,
2020 and 3.34% for the quarter ended March 31, 2021.
- Net interest income increased 8% to $54.1 million for the
quarter ended June 30, 2021, compared to $50.2 million for the
quarter ended June 30, 2020.
- Average loans and leases, including loans at fair value,
increased 16% to $4.58 billion for the quarter ended June 30, 2021,
compared to $3.93 billion for the quarter ended June 30, 2020.
- Prepaid, debit card and other payment related fees increased 5%
to $21.4 million for the quarter ended June 30, 2021, compared to
$20.4 million for the quarter ended June 30, 2020.
- Gross dollar volume (GDV), representing the total amounts spent
on prepaid and debit cards, increased 15% for the quarter ended
June 30, 2021 compared to the quarter ended June 30, 2020.
- SBLOC (securities backed lines of credit), IBLOC (insurance
backed lines of credit) and advisor financing loans collectively
increased 38% year over year and 7% quarter over quarter to $1.80
billion at June 30, 2021.
- Small Business Loans, including those held at fair value,
increased 15% year over year to $689.5 million at June 30, 2021.
That growth is exclusive of Paycheck Protection Program (PPP) loan
balances of $129.4 million and $207.9 million, respectively, at
June 30, 2021 and June 30, 2020.
- Direct lease financing balances increased 20% year over year to
$506.4 million at June 30, 2021.
- The average interest rate on $6.38 billion of average deposits
and interest-bearing liabilities during the second quarter of 2021
was 0.18%. Average deposits of $6.26 billion for the second quarter
2021, reflected an increase of 17% over the $5.37 billion in
average deposits for the quarter ended June 30, 2020.
- Of the $48 million of loan balances with Covid related payment
deferrals at March 31, 2021, only borrowers representing $2.6
million of balances had not made their payments due on July 5,
2021, with an additional $968,000 remaining in deferral as of that
date. Those amounts represent .08% of total loans at June 30, 2021
compared to 1.0% at March 31, 2021.
- Consolidated and The Bancorp Bank (“the Bank”) leverage ratios
were 8.52% and 8.73%, respectively, at June 30, 2021. The Bancorp
and its subsidiary, The Bank, remain well capitalized.
- Book value per common share at June 30, 2021 was $10.77 per
share compared to $9.28 per share at June 30, 2020, an increase of
16%, primarily as a result of retained earnings per share.
- The Bancorp repurchased 449,315 shares of its common stock at
an average cost of $22.26 per share during the quarter ended June
30, 2021.
Damian Kozlowski, The Bancorp’s Chief Executive Officer, said,
“We had another strong quarter in both growth and profitability.
Growth continues to be supported by the acquisition of new clients
and the expansion of our capabilities and solutions in our payments
ecosystem. Based on our year-to-date performance of $0.94 a share
and our 2021 outlook, we are raising our guidance to $1.78 a share.
The $1.78 does not include the impact of buybacks in the 3rd and
4th quarters. We continue to see tailwinds that should drive
continued growth in 2021 earnings and beyond. We will issue
preliminary 2022 per share guidance in our 3rd quarter earnings
release. Current trends would suggest income growth for 2022 of 20%
or more over our revised 2021 guidance.”
The Bancorp reported net income of $29.4 million, or $0.50 per
diluted share, for the quarter ended June 30, 2021, compared to net
income of $20.1 million, or $0.35 per diluted share, for the
quarter ended June 30, 2020. Tier one capital to assets (leverage),
tier one capital to risk-weighted assets, total capital to
risk-weighted assets and common equity-tier 1 to risk-weighted
assets ratios were 8.52%, 15.39%, 15.78% and 15.39%, 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, July 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
2868852. You may listen to the replay of the webcast following the
live call on The Bancorp's investor relations website or
telephonically until Friday, August 6, 2021 by dialing
855.859.2056, access code 2868852.
The Bancorp, Inc. (NASDAQ: TBBK), headquartered in Wilmington,
Delaware, through its subsidiary, The Bancorp Bank, provides
non-bank financial companies with the people, processes, and
technology to meet their unique banking needs. Through its Fintech
Solutions, Institutional Banking, Commercial Lending, and Real
Estate Bridge Lending businesses, The Bancorp provides
partner-focused solutions paired with cutting-edge technology for
companies that range from entrepreneurial startups to Fortune 500
companies. With over 20 years of experience, The Bancorp has become
a leader in the financial services industry, earning recognition as
the #1 issuer of prepaid cards in the U.S., a nationwide provider
of bridge financing for real estate capital improvement plans, an
SBA National Preferred Lender, a leading provider of
securities-backed lines of credit, with one of the few bank-owned
commercial vehicle leasing groups. By its company-wide commitment
to excellence, The Bancorp has also been ranked as one of the 100
Fastest-Growing Companies by Fortune, a Top 50 Employer by Equal
Opportunity Magazine, and was selected to be included in the
S&P Small Cap 600. For more about The Bancorp, visit
https://thebancorp.com/.
Forward-Looking Statements Statements in this earnings
release regarding The Bancorp’s business which are not historical
facts are "forward-looking statements." These statements may be
identified by the use of forward-looking terminology, including but
not limited to the words “may,” “believe,” “will,” “expect,”
“look,” “anticipate,” “plan,” “estimate,” “continue,” or similar
words , and are based on current expectations about important
economic, political, and technological factors, among others, and
are subject to risks and uncertainties, which could cause the
actual results, events or achievements to differ materially from
those set forth in or implied by the forward-looking statements and
related assumptions. For further discussion of the risks and
uncertainties to which these forward-looking statements may be
subject, see The Bancorp’s filings with the Securities and Exchange
Commission, including the “Risk Factors” and “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” sections of those filings. The forward-looking
statements speak only as of the date of this press release. The
Bancorp does not undertake to publicly revise or update
forward-looking statements in this press release to reflect events
or circumstances that arise after the date of this press release,
except as may be required under applicable law.
The Bancorp, Inc. Financial
highlights (unaudited)
Three months ended June 30,
Six months ended June 30,
Condensed income statement
2021
2020
2021
2020
(dollars in thousands, except per
share data)
Net interest income
$
54,069
$
50,246
$
107,826
$
93,157
Provision for credit losses
(951
)
922
(129
)
4,501
Non-interest income
ACH, card and other payment processing
fees
1,904
1,707
3,700
3,553
Prepaid, debit card and related fees
19,447
18,673
38,655
37,213
Net realized and unrealized gains (losses)
on commercial
loans, at fair value
2,579
(940
)
4,575
(6,096
)
Change in value of investment in
unconsolidated entity
—
—
—
(45
)
Leasing related income
1,767
443
2,732
1,276
Other non-interest income
164
483
273
1,064
Total non-interest income
25,861
20,366
49,935
36,965
Non-interest expense
Salaries and employee benefits
27,087
25,492
52,745
48,233
Data processing expense
1,146
1,177
2,272
2,346
Legal expense
2,044
2,229
4,098
3,142
FDIC insurance
2,589
2,918
4,969
5,507
Software
3,706
3,386
7,390
6,863
Other non-interest expense
7,311
7,418
14,292
14,947
Total non-interest expense
43,883
42,620
85,766
81,038
Income from continuing operations before
income taxes
36,998
27,070
72,124
44,583
Income tax expense
7,840
6,787
16,906
11,139
Net income from continuing operations
29,158
20,283
55,218
33,444
Discontinued operations
Income (loss) from discontinued operations
before income taxes
361
(274
)
237
(1,049
)
Income tax expense (benefit)
84
(59
)
55
(264
)
Net income (loss) from discontinued
operations, net of tax
277
(215
)
182
(785
)
Net income
$
29,435
$
20,068
$
55,400
$
32,659
Net income per share from continuing
operations - basic
$
0.51
$
0.35
$
0.96
$
0.58
Net income (loss) per share from
discontinued operations - basic
$
—
$
—
$
0.01
$
(0.01
)
Net income per share - basic
$
0.51
$
0.35
$
0.97
$
0.57
Net income per share from continuing
operations - diluted
$
0.49
$
0.35
$
0.93
$
0.58
Net income (loss) per share from
discontinued operations - diluted
$
0.01
$
—
$
0.01
$
(0.01
)
Net income per share - diluted
$
0.50
$
0.35
$
0.94
$
0.57
Weighted average shares - basic
57,230,576
57,489,719
57,232,557
57,355,282
Weighted average shares - diluted
59,022,925
57,800,115
59,086,956
57,856,791
Note: Compared to higher rates in recent periods, the effective
tax rate in the second quarter of 2021 approximated 21% as a result
of the impact of excess tax deductions related to stock-based
compensation, recorded as a discrete item in the second quarter.
The large deductions and tax benefit resulted from the increase in
the Company’s stock price as compared to the original grant
date.
Balance sheet
June 30, 2021 (unaudited)
March 31, 2021 (unaudited)
December 31, 2020
June 30, 2020 (unaudited)
(dollars in thousands)
Assets:
Cash and cash equivalents
Cash and due from banks
$
5,470
$
7,838
$
5,984
$
5,094
Interest earning deposits at Federal
Reserve Bank
583,498
1,738,749
339,531
475,627
Total cash and cash equivalents
588,968
1,746,587
345,515
480,721
Investment securities, available-for-sale,
at fair value
1,106,075
1,128,459
1,206,164
1,324,447
Commercial loans, at fair value
(held-for-sale at June 30, 2020)
1,690,216
1,780,762
1,810,812
1,807,630
Loans, net of deferred fees and costs
2,915,344
2,827,076
2,652,323
2,322,737
Allowance for credit losses
(15,292
)
(16,419
)
(16,082
)
(14,625
)
Loans, net
2,900,052
2,810,657
2,636,241
2,308,112
Federal Home Loan Bank and Atlantic
Central Bankers Bank stock
1,667
1,368
1,368
1,368
Premises and equipment, net
17,392
17,196
17,608
16,701
Accrued interest receivable
18,668
20,164
20,458
18,897
Intangible assets, net
2,646
2,746
2,845
2,710
Deferred tax asset, net
10,923
10,900
9,757
7,921
Investment in unconsolidated entity, at
fair value
24,988
31,047
31,294
34,064
Assets held-for-sale from discontinued
operations
97,496
106,925
113,650
128,463
Other assets
91,516
90,530
81,129
83,003
Total assets
$
6,550,607
$
7,747,341
$
6,276,841
$
6,214,037
Liabilities:
Deposits
Demand and interest checking
$
5,225,024
$
6,231,220
$
5,205,010
$
5,089,741
Savings and money market
459,688
690,281
257,050
455,458
Total deposits
5,684,712
6,921,501
5,462,060
5,545,199
Securities sold under agreements to
repurchase
42
42
42
42
Senior debt
98,498
98,406
98,314
—
Subordinated debenture
13,401
13,401
13,401
13,401
Other long-term borrowings
39,901
40,085
40,277
40,639
Other liabilities
94,944
77,142
81,583
81,677
Total liabilities
$
5,931,498
$
7,150,577
$
5,695,677
$
5,680,958
Shareholders' equity:
Common stock - authorized, 75,000,000
shares of $1.00 par value; 57,458,287 and 57,455,308 shares issued
and outstanding at June 30, 2021 and 2020, respectively
57,458
57,248
57,551
57,455
Additional paid-in capital
363,241
370,481
377,452
373,812
Retained earnings
183,853
154,418
128,453
81,028
Accumulated other comprehensive income
14,557
14,617
17,708
20,784
Total shareholders' equity
619,109
596,764
581,164
533,079
Total liabilities and shareholders'
equity
$
6,550,607
$
7,747,341
$
6,276,841
$
6,214,037
Average balance sheet and net interest
income
Three months ended June 30,
2021
Three months ended June 30,
2020
(dollars in thousands;
unaudited)
Assets:
Average Balance
Interest
Average Rate
Average Balance
Interest
Average Rate
Interest earning assets:
Loans, net of deferred fees and
costs**
$
4,572,712
$
49,378
4.32
%
$
3,925,515
$
41,448
4.22
%
Leases-bank qualified*
5,783
96
6.64
%
9,217
162
7.03
%
Investment securities-taxable
1,081,419
7,201
2.66
%
1,334,368
10,188
3.05
%
Investment securities-nontaxable*
3,878
32
3.30
%
4,402
35
3.18
%
Interest earning deposits at Federal
Reserve Bank
1,120,039
300
0.11
%
426,174
107
0.10
%
Net interest earning assets
6,783,831
57,007
3.36
%
5,699,676
51,940
3.65
%
Allowance for credit losses
(16,406
)
(14,822
)
Assets held-for-sale from discontinued
operations
98,895
781
3.16
%
130,530
1,094
3.35
%
Other assets
201,539
228,443
$
7,067,859
$
6,043,827
Liabilities and Shareholders'
Equity:
Deposits:
Demand and interest checking
$
5,736,776
$
1,327
0.09
%
$
5,140,167
$
1,390
0.11
%
Savings and money market
526,112
192
0.15
%
234,201
120
0.20
%
Total deposits
6,262,888
1,519
0.10
%
5,374,368
1,510
0.11
%
Short-term borrowings
—
—
—
16,428
15
0.37
%
Repurchase agreements
41
—
—
41
—
—
Subordinated debentures
13,401
112
3.34
%
13,401
128
3.82
%
Senior debt
100,239
1,280
5.11
%
—
—
—
Total deposits and liabilities
6,376,569
2,911
0.18
%
5,404,238
1,653
0.12
%
Other liabilities
83,353
123,997
Total liabilities
6,459,922
5,528,235
Shareholders' equity
607,937
515,592
$
7,067,859
$
6,043,827
Net interest income on tax equivalent
basis*
$
54,877
$
51,381
Tax equivalent adjustment
27
41
Net interest income
$
54,850
$
51,340
Net interest margin *
3.19
%
3.53
%
* Full taxable equivalent basis, using a statutory Federal tax
rate of 21% for 2021 and 2020. ** Includes commercial loans, at
fair value for 2021 previously classified as held-for-sale at June
30, 2020. All periods include non-accrual loans.
NOTE: In the table above, the 2021 interest on loans reflects
$3.0 million of 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. These fees
are not expected to recur. Interest on loans also includes $1.3
million of interest and fees on PPP loans. In 2020 the table above
includes comparable PPP interest and fees of $1.6 million.
Increases in interest earning deposits at the Federal Reserve Bank
reflect increased deposits resulting from stimulus payments
distributed to a large segment of the population, resulting from
December 2020 federal legislation.
Average balance sheet and net interest
income
Six months ended June 30,
2021
Six months ended June 30,
2020
(dollars in thousands;
unaudited)
Assets:
Average Balance
Interest
Average Rate
Average Balance
Interest
Average Rate
Interest earning assets:
Loans, net of deferred fees and
costs**
$
4,524,911
$
97,189
4.30
%
$
3,593,921
$
80,607
4.49
%
Leases - bank qualified*
6,379
214
6.71
%
10,096
362
7.17
%
Investment securities-taxable
1,136,631
16,009
2.82
%
1,364,956
20,683
3.03
%
Investment securities-nontaxable*
3,960
67
3.38
%
4,788
75
3.13
%
Interest earning deposits at Federal
Reserve Bank
935,239
483
0.10
%
460,025
1,730
0.75
%
Net interest earning assets
6,607,120
113,962
3.45
%
5,433,786
103,457
3.81
%
Allowance for credit losses
(16,241
)
(12,532
)
Assets held for sale from discontinued
operations
103,983
1,634
3.14
%
133,903
2,368
3.54
%
Other assets
203,821
233,088
$
6,898,683
$
5,788,245
Liabilities and Shareholders'
Equity:
Deposits:
Demand and interest checking
$
5,619,608
$
2,944
0.10
%
$
4,746,928
$
8,085
0.34
%
Savings and money market
466,978
341
0.15
%
203,888
170
0.17
%
Time deposits
—
—
—
159,752
1,483
1.86
%
Total deposits
6,086,586
3,285
0.11
%
5,110,568
9,738
0.38
%
Short-term borrowings
6,491
8
0.25
%
36,620
180
0.98
%
Repurchase agreements
41
—
—
57
—
—
Subordinated debentures
13,401
225
3.36
%
13,401
290
4.33
%
Senior debt
100,190
2,559
5.11
%
—
—
—
Total deposits and liabilities
6,206,709
6,077
0.20
%
5,160,646
10,208
0.40
%
Other liabilities
91,837
118,811
Total liabilities
6,298,546
5,279,457
Shareholders' equity
600,137
508,788
$
6,898,683
$
5,788,245
Net interest income on tax equivalent
basis*
$
109,519
$
95,617
Tax equivalent adjustment
59
92
Net interest income
$
109,460
$
95,525
Net interest margin *
3.26
%
3.43
%
* Full taxable equivalent basis, using a statutory Federal tax
rate of 21% for 2021 and 2020. ** Includes commercial loans, at
fair value for 2021 previously classified as held-for-sale at June
30, 2020. All periods include non-accrual loans.
NOTE: In the table above, the 2021 interest on loans reflects
$4.5 million of 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. These fees
are not expected to recur. Interest on loans also includes $3.7
million of interest and fees on PPP loans. In 2020 the table above
includes comparable PPP interest and fees of $1.6 million.
Increases in interest earning deposits at the Federal Reserve Bank
reflect increased deposits resulting from stimulus payments
distributed to a large segment of the population, resulting from
December 2020 federal legislation.
Allowance for credit losses
Six months ended
Year ended
June 30, 2021 (unaudited)
June 30, 2020 (unaudited)
December 31, 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
321
1,048
1,350
SBA commercial mortgage
23
–
–
Direct lease financing
193
1,552
2,243
SBLOC
15
–
–
Total
552
2,600
3,593
Recoveries:
SBA non-real estate
15
60
103
Direct lease financing
7
84
570
Total
22
144
673
Net charge-offs
530
2,456
2,920
(Reversal of) provision credited to
allowance, excluding commitment provision
(260
)
4,206
6,127
Balance in allowance for credit losses at
end of period
$
15,292
$
14,625
$
16,082
Net charge-offs/average loans
0.02
%
0.06
%
0.07
%
Net charge-offs/average assets
0.01
%
0.04
%
0.05
%
(1) Excludes activity from assets held-for-sale from
discontinued operations.
Loan portfolio
June 30, 2021
March 31, 2021
December 31, 2020
June 30, 2020
(in thousands)
SBL non-real estate
$
228,958
$
305,446
$
255,318
$
293,692
SBL commercial mortgage
343,487
320,013
300,817
259,020
SBL construction
18,494
20,692
20,273
33,193
Small business loans *
590,939
646,151
576,408
585,905
Direct lease financing
506,424
484,316
462,182
422,505
SBLOC / IBLOC**
1,729,628
1,622,359
1,550,086
1,287,350
Advisor financing ***
72,190
58,919
48,282
15,529
Other specialty lending
2,092
2,251
2,179
2,706
Other consumer loans ****
3,748
4,201
4,247
4,003
2,905,021
2,818,197
2,643,384
2,317,998
Unamortized loan fees and costs
10,323
8,879
8,939
4,739
Total loans, net of unamortized fees and
costs
$
2,915,344
$
2,827,076
$
2,652,323
$
2,322,737
Small business portfolio
June 30, 2021
March 31, 2021
December 31, 2020
June 30, 2020
(in thousands)
SBL, including unamortized fees and
costs
$
593,401
$
647,445
$
577,944
$
583,935
SBL, included in commercial loans, at fair
value
225,534
234,908
243,562
225,401
Total small business loans
$
818,935
$
882,353
$
821,506
$
809,336
* The preceding table shows small business loans and small
business loans held at fair value. The small business loans held at
fair value are comprised of the government guaranteed portion of
SBA 7a loans at the dates indicated. A reduction in SBL non-real
estate loans from $305.4 million at March 31, 2021 to $229.0
million at June 30, 2021 resulted from U.S. government repayments
of $60.8 million of PPP loans authorized by The Consolidated
Appropriations Act, 2021 and the repayment of $19.7 million of a
line of credit to another institution related to PPP loans. PPP
loans totaled $129.4 million at June 30, 2021 and $165.7 million at
December 31, 2020, respectively. ** 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 $424,000
and $663,000 at June 30, 2021 and December 31, 2020, respectively.
Estimated overdraft charge-offs and recoveries are reflected in the
allowance for credit losses and have been immaterial.
Small business loans as of June 30,
2021
Loan principal (in millions)
U.S. government guaranteed portion of SBA
loans (a)
$
358
Paycheck Protection Program Loans (PPP)
(a)
129
Commercial mortgage SBA (b)
189
Construction SBA (c)
9
Non-guaranteed portion of U.S. government
guaranteed 7a loans (d)
106
Non-SBA small business loans (e)
18
Total principal
$
809
Unamortized fees and costs
10
Total small business loans
$
819
(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 $9 million
in Construction SBA loans, $8 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 $106 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 $18 million of non-SBA loans is comprised of
approximately 20 conventional coffee/doughnut/carryout franchisee
note purchases. The majority of purchased notes were made to
multi-unit operators, are considered seasoned and have performed as
agreed. 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 June
30, 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 (except casino hotels) and
motels
$
66
$
3
$
—
$
69
22
%
Full-service restaurants
16
1
3
20
6
%
Child day care services
16
—
1
17
5
%
Baked goods stores
4
—
11
15
5
%
Car washes
10
2
—
12
4
%
Assisted living facilities for the
elderly
10
—
—
10
3
%
Offices of lawyers
9
—
—
9
3
%
Lessors of nonresidential buildings
(except miniwarehouses)
9
—
—
9
3
%
Funeral homes and funeral services
8
—
—
8
2
%
Limited-service restaurants
2
1
5
8
2
%
General warehousing and storage
7
—
—
7
2
%
All other amusement and recreation
industries
5
—
1
6
2
%
Outpatient mental health and substance
abuse centers
5
—
—
5
2
%
Other spectator sports
5
—
—
5
1
%
Fitness and recreational sports
centers
—
2
2
4
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
%
All other miscellaneous wood product
manufacturing
3
—
—
3
1
%
Offices of physicians (except mental
health specialists)
3
—
—
3
1
%
All other miscellaneous general purpose
machinery manufacturing
3
—
—
3
1
%
Pet care (except veterinary) services
2
—
—
2
1
%
Automotive body, paint, and interior
repair and maintenance
2
—
—
2
1
%
Sewing, needlework, and piece goods
stores
2
—
—
2
1
%
Caterers
2
—
—
2
1
%
Amusement arcades
2
—
—
2
1
%
Lessors of other real estate property
2
—
—
2
1
%
Plumbing, heating, and air-conditioning
contractors
2
—
—
2
1
%
Landscaping services
—
—
2
2
1
%
Offices of real estate agents and
brokers
2
—
—
2
1
%
Independent artists, writers, and
performers
2
—
—
2
1
%
Other**
46
2
28
76
20
%
Total
$
258
$
11
$
53
$
322
100
%
* Of the SBL commercial mortgage and SBL construction loans,
$61.0 million represents the total of the non-guaranteed portion of
SBA 7a loans and non-SBA loans. The balance of those categories
represents SBA 504 loans with 50%-60% origination date
loan-to-values. **Loan types less than $2.0 million are spread over
a hundred different classifications such as Commercial Printing,
Pet and Pet Supplies Stores, Securities Brokerage, etc.
State diversification as of June 30,
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
$
54
$
—
$
8
$
62
19
%
California
42
1
4
47
15
%
North Carolina
23
2
3
28
9
%
Pennsylvania
23
—
3
26
8
%
New York
17
3
5
25
8
%
Illinois
22
—
3
25
8
%
Texas
12
—
5
17
5
%
New Jersey
7
—
6
13
4
%
Virginia
9
—
2
11
3
%
Tennessee
10
—
1
11
3
%
Georgia
7
—
2
9
3
%
Colorado
3
4
2
9
3
%
Michigan
3
—
2
5
2
%
Washington
3
—
—
3
1
%
Ohio
3
—
—
3
1
%
Other states
20
1
7
28
8
%
Total
$
258
$
11
$
53
$
322
100
%
* Of the SBL commercial mortgage and SBL construction loans,
$61.0 million represents the total of the non-guaranteed portion of
SBA 7a loans and non-SBA loans. The balance of those categories
represents SBA 504 loans with 50%-60% origination date
loan-to-values.
Top 10 loans as of June 30,
2021
Type*
State
SBL commercial mortgage*
(in millions)
Lawyers' office
CA
$
9
Hotel
FL
9
General warehouse and storage
PA
7
Hotel
NC
6
Assisted living facility
FL
5
Outpatient mental health and substance
abuse center
FL
5
Hotel
NC
5
Hotel
PA
4
Hotel
TN
4
Gasoline station
VA
4
Total
$
58
* 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, at fair value, excluding SBA
loans, are as follows including LTV at origination:
Type as of June 30, 2021
Type
# Loans
Balance
Weighted average origination date
LTV
Weighted average minimum interest
rate
(dollars in millions)
Multifamily (apartments)
136
$
1,323
76
%
4.75
%
Hospitality (hotels and lodging)
11
75
65
%
5.74
%
Retail
6
44
71
%
4.65
%
Other
7
28
70
%
5.24
%
160
$
1,470
75
%
4.81
%
Fair value adjustment
(5
)
Total
$
1,465
State diversification as of June
30, 2021
15 largest loans (all
multifamily) as of June 30, 2021
State
Balance
Origination date LTV
State
Balance
Origination date LTV
(in millions)
(in millions)
Texas
$
427
77
%
North Carolina
$
44
78
%
Georgia
174
77
%
Texas
38
79
%
Arizona
108
76
%
Texas
36
80
%
North Carolina
69
78
%
Pennsylvania
33
77
%
Alabama
56
76
%
Texas
30
75
%
Ohio
57
69
%
Nevada
28
80
%
Other states each <$55 million
579
73
%
Texas
27
77
%
Total
$
1,470
75
%
Arizona
27
79
%
Mississippi
27
79
%
North Carolina
25
77
%
Texas
25
77
%
Texas
24
77
%
Alabama
23
77
%
Georgia
21
79
%
Texas
21
79
%
15 Largest loans
$
429
78
%
Institutional banking loans outstanding
at June 30, 2021
Type
Principal
% of total
(in millions)
Securities backed lines of credit
(SBLOC)
$
1,133
63
%
Insurance backed lines of credit
(IBLOC)
597
33
%
Advisor financing
72
4
%
Total
$
1,802
100
%
For SBLOC, we generally lend up to 50% of the value of equities
and 80% for investment grade securities. While equities have fallen
in excess of 30% in recent years, the reduction in collateral value
of brokerage accounts collateralizing SBLOCs generally has been
less, for two reasons. First, many collateral accounts are
“balanced” and accordingly have a component of debt securities,
which have either not decreased in value as much as equities, or in
some cases may have increased in value. Secondly, many of these
accounts have the benefit of professional investment advisors who
provided some protection against market downturns, through
diversification and other means. Additionally, borrowers often
utilize only a portion of collateral value, which lowers the
percentage of principal to collateral.
Top 10 SBLOC loans at June 30,
2021
Principal amount
% Principal to collateral
(in millions)
$
60
41
%
17
37
%
16
54
%
14
26
%
12
29
%
10
38
%
9
30
%
8
71
%
8
23
%
8
51
%
Total and weighted average
$
162
40
%
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
June 30, 2021
Principal balance
% Total
(in millions)
Construction
$
83
16
%
Government agencies and public
institutions**
77
15
%
Real estate and rental and leasing
66
13
%
Waste management and remediation
services
63
12
%
Retail trade
48
10
%
Wholesale trade
40
8
%
Transportation and warehousing
28
6
%
Health care and social assistance
25
5
%
Professional, scientific, and technical
services
19
4
%
Educational services
16
3
%
Manufacturing
15
3
%
Finance and insurance
7
1
%
Other
19
4
%
Total
$
506
100
%
* Of the total $506 million of direct lease financing, $465
million consisted of vehicle leases with the remaining balance
consisting of equipment leases. ** Includes public universities and
school districts.
Direct lease financing by state as of
June 30, 2021
State
Principal balance
% Total
(in millions)
Florida
$
92
18
%
California
53
11
%
New Jersey
37
7
%
New York
33
6
%
Pennsylvania
31
6
%
Utah
31
6
%
Maryland
24
5
%
North Carolina
24
5
%
Texas
17
3
%
Connecticut
16
3
%
Washington
16
3
%
Missouri
14
3
%
Georgia
11
2
%
Idaho
9
2
%
Alabama
9
2
%
Other states
89
18
%
Total
$
506
100
%
Capital ratios
Tier 1 capital to average assets
ratio
Tier 1 capital to risk-weighted
assets ratio
Total capital to risk-weighted
assets ratio
Common equity tier 1 to risk
weighted assets
As of June 30, 2021
The Bancorp, Inc.
8.52
%
15.39
%
15.78
%
15.39
%
The Bancorp Bank
8.73
%
15.75
%
16.14
%
15.75
%
"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 June 30,
Six months ended June 30,
2021
2020
2021
2020
Selected operating ratios
Return on average assets (1)
1.67
%
1.33
%
1.62
%
1.13
%
Return on average equity (1)
19.42
%
15.61
%
18.62
%
12.87
%
Net interest margin
3.19
%
3.53
%
3.26
%
3.43
%
(1) Annualized
Book value per share table
June 30, 2021
March 31, 2021
December 31, 2020
June 30, 2020
Book value per share
$
10.77
$
10.42
$
10.10
$
9.28
Loan quality table
June 30, 2021
March 31, 2021
December 31, 2020
June 30, 2020
(dollars in thousands)
Nonperforming loans to total loans
0.31
%
0.49
%
0.48
%
0.44
%
Nonperforming assets to total assets
0.14
%
0.18
%
0.20
%
0.17
%
Allowance for credit losses
0.52
%
0.58
%
0.61
%
0.63
%
Nonaccrual loans
$
7,346
$
11,961
$
12,227
$
9,957
Loans 90 days past due still accruing
interest
1,550
1,762
497
352
Other real estate owned
—
—
—
—
Total nonperforming assets
$
8,896
$
13,723
$
12,724
$
10,309
Gross dollar volume (GDV) (1)
Three months ended
June 30, 2021
March 31, 2021
December 31, 2020
June 30, 2020
(in thousands)
Prepaid and debit card GDV
$
27,106,763
$
28,094,930
$
22,523,855
$
23,539,694
(1) Gross dollar volume represents the total dollar amount spent
on prepaid and debit cards issued by The Bancorp Bank.
Business line quarterly summary
Quarter ended June 30, 2021 (dollars in millions)
Balances
% Growth
Major business lines
Average approximate rates *
Balances **
Year over year
Linked quarter annualized
Loans
Institutional banking ***
2.5
%
$
1,802
38
%
29
%
Small Business Lending****
5.0
%
819
15
%
10
%
Leasing
6.0
%
506
20
%
18
%
Commercial real estate (non-SBA at fair
value)
4.8
%
1,465
nm
nm
Weighted average yield
4.1
%
$
4,592
Non-interest income
% Growth
Deposits: Fintech
solutions group
Current quarter
Year over year
Prepaid and debit card issuance
0.1
%
$
4,836
24
%
nm
$
19.4
4
%
Card payment and ACH processing
0.2
%
$
885
22
%
nm
$
1.9
nm
* Average rates are for the quarter ended June 30, 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. The linked quarter
annualized percentage excludes a short-term line of credit to
another institution to fund PPP loans, with a balance of $19.7
million at March 31, 2021, which was repaid in the second
quarter.
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
(122
)
June 30, 2021 Bancorp book value**
$
25
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 21% of expected principal recoveries were from loans
and properties pending liquidation or other resolution as of June
30, 2021.
Walnut Street portfolio composition as
of June 30, 2021
Collateral type
% of Portfolio
Commercial real estate non-owner occupied
- Retail
80.0%
Construction and land
13.3%
Other
6.7%
Total
100.0%
Cumulative analysis of marks on
discontinued commercial loan principal as of June 30, 2021
Discontinued loan principal
Cumulative marks
% to original principal
(dollars in millions)
Commercial loan discontinued principal
before marks
$
53
Florida mall held in discontinued other
real estate owned
42
$
(27
)
Mark at June 30, 2021
(4
)
Cumulative mark at June 30, 2021
$
95
$
(31
)
33
%
Analysis of discontinued commercial
loan relationships as of June 30, 2021
Performing loan principal
Nonperforming loan principal
Total loan principal
Performing loan marks
Nonperforming loan marks
Total marks
(in millions)
4 loan relationships > $5 million
$
33
$
—
$
33
$
(2
)
$
—
$
(2
)
Loan relationships < $5 million
12
4
16
(1
)
(1
)
(2
)
$
45
$
4
$
49
$
(3
)
$
(1
)
$
(4
)
Quarterly activity for commercial loan
discontinued principal
Commercial loan principal
(in millions)
Commercial loan discontinued principal
March 31, 2021 before marks
$
61
Quarterly paydowns and other
reductions
(8
)
Commercial loan discontinued principal
June 30, 2021 before marks
53
Marks June 30, 2021
(4
)
Net commercial loan exposure June 30,
2021
49
Residential mortgages
27
Net loans
76
Florida mall in other real estate
owned
15
5 properties in other real estate
owned
6
Total discontinued assets at June 30,
2021
$
97
Discontinued commercial loan
composition as of June 30, 2021
Collateral type
Unpaid principal balance
Mark at June 30, 2021
Mark as % of portfolio
(in millions)
Commercial real estate - non-owner
occupied:
Retail
$
4
$
(0.6
)
15
%
Office
2
—
—
Other
18
(0.1
)
1
%
Construction and land
10
(0.1
)
1
%
Commercial non-real estate and
industrial
3
(0.1
)
3
%
1 to 4 family construction
7
(2.6
)
37
%
First mortgage residential non-owner
occupied
5
—
—
Commercial real estate owner occupied:
Retail
2
—
—
Residential junior mortgage
1
—
—
Other
1
—
—
Total
$
53
$
(3.5
)
7
%
Less: mark
(4
)
Net commercial loan exposure June 30,
2021
$
49
$
(3.5
)
Loan payment deferrals related to Covid-19
Total non-U.S. guaranteed loan balances for borrowers with
Covid-19 payment deferrals amounted to $48 million as of March 31,
2021. The vast majority of these borrowers had begun making their
payments as of July 5, 2021. As of that date, $968,000 of
discontinued operations loans were still in deferral, and small
business (SBA) borrowers with unguaranteed principal balances
totaling $2.6 million, have not made their payments due on that
date. Of the $2.6 million, we are considering further deferrals for
borrowers with unguaranteed balances of $1.7 million.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210729006073/en/
The Bancorp, Inc. Andres Viroslav Director, Investor
Relations 215-861-7990 andres.viroslav@thebancorp.com
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