The Bancorp, Inc. ("The Bancorp" or “we”) (NASDAQ: TBBK), a
financial holding company, today reported financial results for the
second quarter of 2023.
Highlights
- The Bancorp reported net income of $49.0 million, or $0.89 per
diluted share, for the quarter ended June 30, 2023, compared to net
income of $30.4 million, or $0.53 per diluted share, for the
quarter ended June 30, 2022, or a 68% increase in income per
diluted share.
- Return on assets and equity for the quarter ended June 30, 2023
amounted to 2.6% and 27%, respectively, compared to 1.7% and 19%,
respectively, for the quarter ended June 30, 2022 (all percentages
“annualized”).
- Net interest income increased 60% to $87.2 million for the
quarter ended June 30, 2023, compared to $54.6 million for the
quarter ended June 30, 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 4.83% for the quarter ended
June 30, 2023, compared to 3.17% for the quarter ended June 30,
2022, and 4.67% for the quarter ended March 31, 2023.
- Loans, net were $5.27 billion at June 30, 2023, compared to
$5.49 billion at December 31, 2022 and $4.75 billion at June 30,
2022. Those changes reflected a decrease of 2% quarter over linked
quarter and an increase of 11% year over year.
- Gross dollar volume (“GDV”), representing the total amounts
spent on prepaid and debit cards, increased $4.38 billion, or 15%,
to $32.78 billion for the quarter ended June 30, 2023, compared to
the quarter ended June 30, 2022. The increase reflects continued
organic growth with existing partners and the impact of clients
added within the past year. Total prepaid, debit card, ACH and
other payment fees increased 10% to $24.6 million for the second
quarter of 2023 compared to the second quarter of 2022.
- Small business loans (“SBL”), including those held at fair
value, grew 10% year over year to $804.0 million at June 30, 2023,
and 2% quarter over linked quarter. That growth excludes Paycheck
Protection Program (“PPP”) loan balances which amounted to $3.8
million and $10.3 million at June 30, 2023 and June 30, 2022,
respectively.
- Direct lease financing balances increased 13% year over year to
$657.3 million at June 30, 2023, and 1% quarter over linked
quarter.
- At June 30, 2023, real estate bridge loans of $1.83 billion had
grown 4% compared to the $1.75 billion balance at March 31, 2023,
and 65% compared to the June 30, 2022 balance of $1.11 billion.
These real estate bridge loans consist entirely of apartment
buildings.
- Security backed lines of credit (“SBLOC”), insurance backed
lines of credit (“IBLOC”) and investment advisor financing loans
collectively decreased 15% year over year and decreased 8% quarter
over linked quarter to $2.06 billion at June 30, 2023.
- The average interest rate on $6.60 billion of average deposits
and interest-bearing liabilities during the second quarter of 2023
was 2.37%. Average deposits of $6.48 billion for the second quarter
of 2023 reflected an increase of 4% from the $6.25 billion of
average deposits for the quarter ended June 30, 2022.
- The Bancorp emphasizes safety and soundness, and liquidity. The
vast majority of its funding is comprised of insured and small
balance accounts. The Bancorp also has lines of credit with U.S.
government agencies totaling approximately $2.8 billion as of June
30, 2023, as well as access to other liquidity.
- As of June 30, 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 10.42%, 14.97%, 15.47% and 14.97%, 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 June 30, 2023 was $13.74 per
share compared to $11.55 per common share at June 30, 2022, an
increase of 19%. 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 828,727 shares of its common stock at
an average cost of $30.17 per share during the quarter ended June
30, 2023.
CEO and President Damian Kozlowski commented, “The Bancorp
continued to produce record core profits and exemplar profitability
in the second quarter. The outlook remains positive for 2023 and
2024 and we expect increasing profitability and earnings per share,
while navigating a difficult market environment for most banks. We
are maintaining guidance at $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, July 28, 2023 by
clicking on the webcast link on The Bancorp's homepage at
www.thebancorp.com. Or you may dial 1.888.259.6580, conference code
93720317. 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 4, 2023 by dialing
1.877.674.7070, access code 720317#.
About The Bancorp
The Bancorp, Inc. (NASDAQ: TBBK), headquartered in Wilmington,
Delaware, through its subsidiary, The Bancorp Bank, National
Association, (or “The Bancorp Bank, N. A.”) provides non-bank
financial companies with the people, processes, and technology to
meet their unique banking needs. Through its Fintech Solutions,
Institutional Banking, Commercial Lending, and Real Estate Bridge
Lending businesses, The Bancorp provides partner-focused solutions
paired with cutting-edge technology for companies that range from
entrepreneurial startups to Fortune 500 companies. With over 20
years of experience, The Bancorp has become a leader in the
financial services industry, earning recognition as the #1 issuer
of prepaid cards in the U.S., a nationwide provider of bridge
financing for real estate capital improvement plans, an SBA
National Preferred Lender, a leading provider of securities-backed
lines of credit, with one of the few bank-owned commercial vehicle
leasing groups. By its company-wide commitment to excellence, The
Bancorp has also been ranked as one of the 100 Fastest-Growing
Companies by Fortune, a Top 50 Employer by Equal Opportunity
Magazine and was selected to be included in the S&P Small Cap
600. For more about The Bancorp, visit https://thebancorp.com/.
Forward-Looking Statements
Statements in this earnings release regarding The Bancorp’s
business which are not historical facts are "forward-looking
statements." These statements may be identified by the use of
forward-looking terminology, including but not limited to the words
“intend,” “may,” “believe,” “will,” “expect,” “look,” “anticipate,”
“plan,” “estimate,” “continue,” or similar words , and are based on
current expectations about important economic, political, and
technological factors, among others, and are subject to risks and
uncertainties, which could cause the actual results, events or
achievements to differ materially from those set forth in or
implied by the forward-looking statements and related assumptions.
For further discussion of the risks and uncertainties to which
these forward-looking statements may be subject, see The Bancorp’s
filings with the Securities and Exchange Commission, including the
“Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” sections of those
filings. The forward-looking statements speak only as of the date
of this press release. The Bancorp does not undertake to publicly
revise or update forward-looking statements in this press release
to reflect events or circumstances that arise after the date of
this press release, except as may be required under applicable
law.
The Bancorp, Inc.
Financial highlights
(unaudited)
Three months ended
Six months ended
June 30,
June 30,
Consolidated condensed income
statements
2023
2022
2023
2022
(Dollars in thousands, except per
share and share data)
Net interest income
$
87,195
$
54,569
$
173,011
$
107,422
Provision for (reversal of) credit
losses
361
(1,450
)
2,264
3,509
Non-interest income
ACH, card and other payment processing
fees
2,429
2,338
4,600
4,322
Prepaid, debit card and related fees
22,177
20,038
45,500
38,690
Net realized and unrealized gains on
commercial
loans, at fair value
1,921
3,682
3,646
10,517
Leasing related income
1,511
1,545
3,001
2,518
Other non-interest income
1,298
350
1,578
470
Total non-interest income
29,336
27,953
58,325
56,517
Non-interest expense
Salaries and employee benefits
33,167
25,999
62,952
49,847
Data processing expense
1,398
1,246
2,719
2,435
Legal expense
949
1,474
1,907
2,268
Legal settlement
—
1,152
—
1,152
FDIC insurance
472
673
1,427
1,647
Software
4,317
4,165
8,554
8,029
Other non-interest expense
9,640
8,136
20,414
15,819
Total non-interest expense
49,943
42,845
97,973
81,197
Income before income taxes
66,227
41,127
131,099
79,233
Income tax expense
17,218
10,725
32,968
19,865
Net income
49,009
30,402
98,131
59,368
Net income per share - basic
$
0.89
$
0.54
$
1.78
$
1.04
Net income per share - diluted
$
0.89
$
0.53
$
1.76
$
1.03
Weighted average shares - basic
54,871,681
56,801,518
55,160,642
56,962,000
Weighted average shares - diluted
55,269,640
57,453,730
55,653,950
57,772,538
Condensed consolidated balance
sheets
June 30,
March 31,
December 31,
June 30,
2023 (unaudited)
2023 (unaudited)
2022
2022 (unaudited)
(Dollars in thousands, except
share data)
Assets:
Cash and cash equivalents
Cash and due from banks
$
6,496
$
13,736
$
24,063
$
12,873
Interest earning deposits at Federal
Reserve Bank
874,050
773,446
864,126
329,992
Total cash and cash equivalents
880,546
787,182
888,189
342,865
Investment securities, available-for-sale,
at fair value
776,410
787,429
766,016
826,616
Commercial loans, at fair value
396,581
493,334
589,143
995,493
Loans, net of deferred fees and costs
5,267,574
5,354,347
5,486,853
4,754,697
Allowance for credit losses
(23,284
)
(23,794
)
(22,374
)
(19,087
)
Loans, net
5,244,290
5,330,553
5,464,479
4,735,610
Federal Home Loan Bank, Atlantic Central
Bankers Bank, and Federal Reserve Bank stock
20,157
12,629
12,629
1,643
Premises and equipment, net
26,408
21,319
18,401
16,693
Accrued interest receivable
34,062
33,729
32,005
19,264
Intangible assets, net
1,850
1,950
2,049
2,248
Other real estate owned
20,952
21,117
21,210
18,873
Deferred tax asset, net
19,215
18,290
19,703
23,344
Other assets
122,435
99,427
89,176
137,086
Total assets
$
7,542,906
$
7,606,959
$
7,903,000
$
7,119,735
Liabilities:
Deposits
Demand and interest checking
$
6,554,967
$
6,607,767
$
6,559,617
$
5,394,562
Savings and money market
68,084
96,890
140,496
486,189
Time deposits, $100,000 and over
—
—
330,000
—
Total deposits
6,623,051
6,704,657
7,030,113
5,880,751
Securities sold under agreements to
repurchase
42
42
42
42
Short-term borrowings
—
—
—
385,000
Senior debt
95,682
99,142
99,050
98,866
Subordinated debenture
13,401
13,401
13,401
13,401
Other long-term borrowings
9,917
9,972
10,028
39,125
Other liabilities
51,646
54,597
56,335
46,014
Total liabilities
$
6,793,739
$
6,881,811
$
7,208,969
$
6,463,199
Shareholders' equity:
Common stock - authorized, 75,000,000
shares of $1.00 par value; 54,542,284 and 56,865,494 shares issued
and outstanding at June 30, 2023 and 2022, respectively
54,542
55,330
55,690
56,865
Additional paid-in capital
256,115
277,814
299,279
323,774
Retained earnings
467,450
418,441
369,319
298,474
Accumulated other comprehensive loss
(28,940
)
(26,437
)
(30,257
)
(22,577
)
Total shareholders' equity
749,167
725,148
694,031
656,536
Total liabilities and shareholders'
equity
$
7,542,906
$
7,606,959
$
7,903,000
$
7,119,735
Average balance sheet and net interest
income
Three months ended June 30,
2023
Three months ended June 30,
2022
(Dollars in thousands;
unaudited)
Average
Average
Average
Average
Assets:
Balance
Interest(1)
Rate
Balance
Interest(1)
Rate
Interest earning assets:
Loans, net of deferred fees and
costs(2)
$
5,730,384
$
107,299
7.49
%
$
5,467,516
$
55,100
4.03
%
Leases-bank qualified(3)
3,801
100
10.52
%
3,665
63
6.88
%
Investment securities-taxable
778,100
9,873
5.08
%
879,112
5,432
2.47
%
Investment securities-nontaxable(3)
3,234
53
6.56
%
3,559
31
3.48
%
Interest earning deposits at Federal
Reserve Bank
701,057
8,997
5.13
%
545,027
1,004
0.74
%
Net interest earning assets
7,216,576
126,322
7.00
%
6,898,879
61,630
3.57
%
Allowance for credit losses
(23,895
)
(20,295
)
Other assets
231,035
243,459
$
7,423,716
$
7,122,043
Liabilities and Shareholders'
Equity:
Deposits:
Demand and interest checking
$
6,399,750
$
36,688
2.29
%
$
5,697,507
$
4,390
0.31
%
Savings and money market
78,252
728
3.72
%
556,847
1,200
0.86
%
Total deposits
6,478,002
37,416
2.31
%
6,254,354
5,590
0.36
%
Short-term borrowings
—
—
—
11,593
32
1.10
%
Repurchase agreements
41
—
—
41
—
—
Long-term borrowings
9,949
128
5.15
%
—
—
—
Subordinated debentures
13,401
271
8.09
%
13,401
139
4.15
%
Senior debt
96,890
1,280
5.28
%
98,816
1,280
5.18
%
Total deposits and liabilities
6,598,283
39,095
2.37
%
6,378,205
7,041
0.44
%
Other liabilities
88,276
89,422
Total liabilities
6,686,559
6,467,627
Shareholders' equity
737,157
654,416
$
7,423,716
$
7,122,043
Net interest income on tax equivalent
basis(3)
$
87,227
$
54,589
Tax equivalent adjustment
32
20
Net interest income
$
87,195
$
54,569
Net interest margin(3)
4.83
%
3.17
%
(1)Interest on loans for 2023 and 2022
includes $10,000 and $41,000, respectively, of interest and fees on
PPP loans.
(2)Includes commercial loans, at fair
value. All periods include non-accrual loans.
(3)Full taxable equivalent basis, using
21% respective statutory federal tax rates in 2023 and 2022.
Average balance sheet and net interest
income
Six months ended June 30,
2023
Six months ended June 30,
2022
(Dollars in thousands;
unaudited)
Average
Average
Average
Average
Assets:
Balance
Interest(1)
Rate
Balance
Interest(1)
Rate
Interest earning assets:
Loans, net of deferred fees and
costs(2)
$
5,858,040
$
213,503
7.29
%
$
5,302,850
$
105,638
3.98
%
Leases-bank qualified(3)
3,582
169
9.44
%
3,839
130
6.77
%
Investment securities-taxable
776,089
19,173
4.94
%
909,017
10,323
2.27
%
Investment securities-nontaxable(3)
3,288
94
5.72
%
3,559
62
3.48
%
Interest earning deposits at Federal
Reserve Bank
640,864
15,582
4.86
%
616,865
1,351
0.44
%
Net interest earning assets
7,281,863
248,521
6.83
%
6,836,130
117,504
3.44
%
Allowance for credit losses
(23,215
)
(19,075
)
Other assets
234,037
232,402
$
7,492,685
$
7,049,457
Liabilities and Shareholders'
Equity:
Deposits:
Demand and interest checking
$
6,401,678
$
69,071
2.16
%
$
5,636,415
$
5,796
0.21
%
Savings and money market
105,105
1,947
3.70
%
544,515
1,400
0.51
%
Time deposits
41,933
858
4.09
%
—
—
—
Total deposits
6,548,716
71,876
2.20
%
6,180,930
7,196
0.23
%
Short-term borrowings
10,193
234
4.59
%
6,104
32
1.05
%
Repurchase agreements
41
—
—
41
—
—
Long-term borrowings
9,973
254
5.09
%
—
—
—
Subordinated debentures
13,401
532
7.94
%
13,401
255
3.81
%
Senior debt
97,985
2,559
5.22
%
98,770
2,559
5.18
%
Total deposits and liabilities
6,680,309
75,455
2.26
%
6,299,246
10,042
0.32
%
Other liabilities
90,777
95,716
Total liabilities
6,771,086
6,394,962
Shareholders' equity
721,599
654,495
$
7,492,685
$
7,049,457
Net interest income on tax equivalent
basis(3)
$
173,066
$
107,462
Tax equivalent adjustment
55
40
Net interest income
$
173,011
$
107,422
Net interest margin(3)
4.75
%
3.14
%
(1)Interest on loans for 2023 and 2022
includes $20,000 and $481,000, respectively, of interest and fees
on PPP loans.
(2)Includes commercial loans, at fair
value. All periods include non-accrual loans.
(3)Full taxable equivalent basis, using
21% respective statutory federal tax rates in 2023 and 2022.
Allowance for credit losses
Six months ended
Year ended
June 30,
June 30,
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
871
844
885
Direct lease financing
1,439
199
576
Consumer - other
3
—
—
Total
2,313
1,043
1,461
Recoveries:
SBA non-real estate
298
33
140
SBA commercial mortgage
75
—
—
Direct lease financing
175
93
124
Consumer - home equity
49
—
—
Other loans
—
—
24
Total
597
126
288
Net charge-offs
1,716
917
1,173
Provision for credit losses, excluding
commitment provision
2,626
2,198
5,741
Balance in allowance for credit losses at
end of period
$
23,284
$
19,087
$
22,374
Net charge-offs/average loans
0.03
%
0.02
%
0.03
%
Net charge-offs/average assets
0.02
%
0.01
%
0.02
%
Loan portfolio
June 30,
March 31,
December 31,
June 30,
2023 (unaudited)
2023 (unaudited)
2022
2022 (unaudited)
(Dollars in thousands)
SBL non-real estate
$
117,621
$
114,334
$
108,954
$
112,854
SBL commercial mortgage
515,008
492,798
474,496
425,219
SBL construction
32,471
33,116
30,864
27,042
Small business loans
665,100
640,248
614,314
565,115
Direct lease financing
657,316
652,541
632,160
583,086
SBLOC / IBLOC(1)
1,883,607
2,053,450
2,332,469
2,274,256
Advisor financing(2)
173,376
189,425
172,468
155,235
Real estate bridge loans
1,826,227
1,752,322
1,669,031
1,106,875
Other loans(3)
55,644
60,210
61,679
63,514
5,261,270
5,348,196
5,482,121
4,748,081
Unamortized loan fees and costs
6,304
6,151
4,732
6,616
Total loans, including unamortized fees
and costs
$
5,267,574
$
5,354,347
$
5,486,853
$
4,754,697
Small business portfolio
June 30,
March 31,
December 31,
June 30,
2023 (unaudited)
2023 (unaudited)
2022
2022 (unaudited)
(Dollars in thousands)
SBL, including unamortized fees and
costs
$
673,667
$
648,858
$
621,641
$
571,559
SBL, included in loans, at fair value
134,131
140,909
146,717
168,579
Total small business loans(4)
$
807,798
$
789,767
$
768,358
$
740,138
(1)SBLOC are collateralized by marketable
securities, while IBLOC are collateralized by the cash surrender
value of insurance policies. At June 30, 2023 and December 31,
2022, IBLOC loans amounted to $806.1 million and $1.12 billion,
respectively.
(2)In 2020 The Bancorp began originating
loans to investment advisors for purposes of debt refinancing,
acquisition of another firm or internal succession. Maximum loan
amounts are subject to loan-to-value (“LTV”) 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.
(3)Includes demand deposit overdrafts
reclassified as loan balances totaling $403,000 and $2.6 million at
June 30, 2023 and December 31, 2022, respectively. Estimated
overdraft charge-offs and recoveries are reflected in the ACL and
are immaterial.
(4)The SBLs held at fair value are
comprised of the government guaranteed portion of 7(a) Program
loans at the dates indicated.
Small business loans as of June 30,
2023
Loan principal
(Dollars in millions)
U.S. government guaranteed portion of SBA
loans(1)
$
382
PPP loans(1)
4
Commercial mortgage SBA(2)
259
Construction SBA(3)
12
Non-guaranteed portion of U.S. government
guaranteed 7(a) Program loans(4)
105
Non-SBA SBLs
35
Total principal
$
797
Unamortized fees and costs
11
Total SBLs
$
808
(1)Includes the portion of SBA 7(a)
Program loans and PPP loans which have been guaranteed by the U.S.
government, and therefore are assumed to have no credit risk.
(2)Substantially all these loans are made
under the 504 Program, which dictates origination date LTV
percentages, generally 50-60%, to which the Bancorp adheres.
(3)Includes $8.0 million in 504 Program
first mortgages with an origination date LTV of 50-60%, and $4.0
million in SBA interim loans with an approved SBA post-construction
full takeout/payoff.
(4)Includes the unguaranteed portion of
7(a) Program loans which are 70% or more guaranteed by the U.S.
government. SBA 7(a) Program 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 7(a) Program loans and 504 Program loans
require the personal guaranty of all 20% or greater owners.
Small business loans by type as of June
30, 2023
(Excludes government guaranteed portion of
SBA 7(a) Program and PPP loans)
SBL commercial mortgage(1)
SBL construction(1)
SBL non-real estate
Total
% Total
(Dollars in millions)
Hotels and motels
$
74
$
—
$
—
$
74
18%
Full-service restaurants
24
4
2
30
7%
Funeral homes and funeral services
27
—
—
27
7%
Car washes
17
2
—
19
5%
Child day care services
15
1
1
17
4%
Outpatient mental health and substance
abuse centers
16
—
—
16
4%
Homes for the elderly
13
—
—
13
3%
Gasoline stations with convenience
stores
12
—
—
12
3%
Offices of lawyers
9
—
—
9
2%
Fitness and recreational sports
centers
8
—
2
10
2%
Lessors of other real estate property
8
—
1
9
2%
Limited-service restaurants
2
2
3
7
2%
General warehousing and storage
7
—
—
7
2%
Plumbing, heating, and air-conditioning
companies
6
—
1
7
2%
Specialty trade contractors
5
—
1
6
1%
Lessors of residential buildings and
dwellings
5
—
—
5
1%
Other miscellaneous durable goods
merchant
5
—
—
5
1%
Technical and trade schools
—
5
—
5
1%
Packaged frozen food merchant
wholesalers
5
—
—
5
1%
Amusement and recreation industries
4
—
—
4
1%
Offices of dentists
2
1
—
3
1%
Warehousing and storage
3
—
—
3
1%
Vocational rehabilitation services
3
—
—
3
1%
Miscellaneous wood product
manufacturing
3
—
—
3
1%
Other(2)
88
—
24
112
27%
Total
$
361
$
15
$
35
$
411
100%
(1)Of the SBL commercial mortgage and SBL
construction loans, $106.0 million represents the total of the
non-guaranteed portion of SBA 7(a) Program loans and non-SBA loans.
The balance of those categories represents SBA 504 Program loans
with 50%-60% origination date LTVs.
(2)Loan types of less than $3.0 million
are spread over approximately one hundred different business
types.
State diversification as of June 30,
2023
(Excludes government guaranteed portion of
SBA 7(a) Program loans and PPP loans)
SBL commercial mortgage(1)
SBL construction(1)
SBL non-real estate
Total
% Total
(Dollars in millions)
California
$
74
$
4
$
3
$
81
20%
Florida
68
1
3
72
18%
North Carolina
33
7
2
42
10%
New York
26
—
3
29
7%
New Jersey
20
—
3
23
6%
Pennsylvania
21
—
—
21
5%
Georgia
16
—
1
17
4%
Illinois
14
—
1
15
4%
Texas
12
—
4
16
4%
Other States <$15 million
77
3
15
95
22%
Total
$
361
$
15
$
35
$
411
100%
(1)Of the SBL commercial mortgage and SBL
construction loans, $106.0 million represents the total of the
non-guaranteed portion of SBA 7(a) Program loans and non-SBA loans.
The balance of those categories represents SBA 504 Program loans
with 50%-60% origination date LTVs.
Top 10 loans as of June 30,
2023
Type(1)
State
SBL commercial mortgage
(Dollars in millions)
Mental health and substance abuse
center
FL
$
10
Funeral homes and funeral services
ME
9
Hotel
FL
9
Lawyer's office
CA
8
Hotel
NC
7
General warehousing and storage
PA
7
Hotel
FL
6
Hotel
NY
6
Hotel
NC
6
Mental health and substance abuse
center
NJ
5
Total
$
73
(1)All ten largest loans in our SBL
portfolio are SBA 504 Program loans with 50%-60% origination date
LTVs. The table above does not include loans to the extent that
they are U.S. government guaranteed.
Commercial real estate loans, excluding SBA loans, are as
follows including LTV at origination:
Type as of June 30, 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)(1)
136
$
1,826
71%
8.90%
Non-SBA commercial real estate loans, at
fair value:
Multi-family (apartment bridge
loans)(1)
12
$
216
76%
8.70%
Hospitality (hotels and lodging)
2
28
65%
9.10%
Retail
2
12
72%
7.30%
Other
2
9
73%
5.20%
18
265
74%
8.55%
Fair value adjustment
(3)
Total non-SBA commercial real estate
loans, at fair value
262
Total commercial real estate loans
$
2,088
72%
8.87%
(1)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
they are not accounted for at fair value.
State diversification as of
June 30, 2023
15 largest loans as of June
30, 2023
State
Balance
Origination date LTV
State
Balance
Origination date LTV
(Dollars in millions)
(Dollars in millions)
Texas
$
768
73%
Texas
$
43
72%
Georgia
258
70%
Texas
42
75%
Florida
220
70%
Texas
39
75%
Ohio
91
69%
Tennessee
37
72%
Tennessee
84
70%
Michigan
37
62%
Michigan
69
70%
Florida
33
72%
Alabama
67
72%
Texas
33
67%
Other States each <$65 million
531
72%
Michigan
33
79%
Total
$
2,088
72%
Oklahoma
31
78%
Texas
31
62%
Indiana
30
76%
Ohio
29
74%
Georgia
29
69%
Texas
29
77%
New Jersey
28
77%
15 largest commercial real estate
loans
$
504
73%
Institutional banking loans outstanding
at June 30, 2023
Type
Principal
% of total
(Dollars in millions)
SBLOC
$
1,078
52%
IBLOC
806
39%
Advisor financing
173
9%
Total
$
2,057
100%
For SBLOC, we generally lend up to 50% of the value of equities
and 80% for investment grade securities. While the value of
equities has 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. Second,
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,
2023
Principal amount
% Principal to collateral
(Dollars in millions)
$
18
41%
16
62%
14
35%
10
32%
9
64%
9
44%
8
70%
8
73%
6
29%
6
51%
Total and weighted average
$
104
49%
Insurance backed lines of credit (IBLOC)
IBLOC loans are backed by the cash value of eligible life
insurance policies which have been assigned to us. We generally
lend up to 95% of such cash value. Our underwriting standards
require approval of the insurance companies which carry the
policies backing these loans. Currently, fifteen insurance
companies have been approved and, as of June 30, 2023, all were
rated A- (Excellent) or better by AM BEST.
Direct lease financing by type as of
June 30, 2023
Principal balance(1)
% Total
(Dollars in millions)
Construction
$
118
18%
Government agencies and public
institutions(2)
82
12%
Waste management and remediation
services
81
12%
Real estate and rental and leasing
71
11%
Retail trade
47
7%
Health care and social assistance
30
5%
Manufacturing
22
3%
Professional, scientific, and technical
services
21
3%
Finance and insurance
18
3%
Wholesale trade
17
3%
Transportation and warehousing
12
2%
Educational services
9
1%
Mining, quarrying, and oil and gas
extraction
8
1%
Other
121
19%
Total
$
657
100%
(1)Of the total $657.0 million of direct
lease financing, $579.0 million consisted of vehicle leases with
the remaining balance consisting of equipment leases.
(2)Includes public universities and school
districts.
Direct lease financing by state as of
June 30, 2023
State
Principal balance
% Total
(Dollars in millions)
Florida
$
93
14%
Utah
65
10%
California
61
9%
Pennsylvania
40
6%
New Jersey
39
6%
New York
33
5%
North Carolina
32
5%
Texas
30
5%
Maryland
29
4%
Connecticut
27
4%
Washington
16
2%
Idaho
16
2%
Georgia
14
2%
Iowa
13
2%
Ohio
12
2%
Other States
137
22%
Total
$
657
100%
Capital ratios
Tier 1 capital
Tier 1 capital
Total capital
Common equity
to average
to risk-weighted
to risk-weighted
tier 1 to risk
assets ratio
assets ratio
assets ratio
weighted assets
As of June 30, 2023
The Bancorp, Inc.
10.42%
14.97%
15.47%
14.97%
The Bancorp Bank, National Association
11.59%
16.67%
17.16%
16.67%
"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
Six months ended
June 30,
June 30,
2023
2022
2023
2022
Selected operating ratios
Return on average assets(1)
2.65%
1.71%
2.64%
1.70%
Return on average equity(1)
26.67%
18.63%
27.42%
18.29%
Net interest margin
4.83%
3.17%
4.75%
3.14%
(1)Annualized
Book value per share table
June 30,
March 31,
December 31,
June 30,
2023
2023
2022
2022
Book value per share
$
13.74
$
13.11
$
12.46
11.55
Loan quality table
June 30,
March 31,
December 31,
June 30,
2023
2022
2022
2022
(Dollars in thousands)
Nonperforming loans to total loans
0.28%
0.26%
0.33%
0.18%
Nonperforming assets to total assets
0.47%
0.46%
0.50%
0.39%
Allowance for credit losses to total
loans
0.44%
0.44%
0.41%
0.40%
Nonaccrual loans
$
14,027
$
12,938
$
10,356
$
3,698
Loans 90 days past due still accruing
interest
563
873
7,775
4,848
Other real estate owned
20,952
21,117
21,210
18,873
Total nonperforming assets
$
35,542
$
34,928
$
39,341
$
27,419
Gross dollar volume (GDV) (1)
Three months ended
June 30,
March 31,
December 31,
June 30,
2023
2022
2022
2022
(Dollars in thousands)
Prepaid and debit card GDV
$
32,776,154
$
34,011,792
$
29,454,074
$
28,394,897
(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 June 30, 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)
6.4%
$
2,057
(15%)
(33%)
Small business lending(4)
6.8%
808
10%
9%
Leasing
6.9%
657
13%
2%
Commercial real estate (non-SBA loans, at
fair value)
8.5%
262
nm
nm
Real estate bridge loans (recorded at book
value)
9.0%
1,826
65%
17%
Weighted average yield
7.5%
$
5,610
Non-interest income
% Growth
Deposits: Fintech
solutions group
Current quarter
Year over year
Prepaid and debit card issuance, and other
payments
2.3%
$
5,985
6%
nm
$
24.6
10%
(1)Average rates are for the three months
ended June 30, 2023.
(2)Loan and deposit categories are based
on period-end and average quarterly balances, respectively.
(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.
Summary of credit lines available
Notwithstanding that the vast majority of The Bancorp’s funding
is comprised of insured and small balance accounts, The Bancorp
maintains lines of credit exceeding potential liquidity
requirements as follows. The Bancorp also has access to other
substantial sources of liquidity.
June 30, 2023
(Dollars in thousands)
Federal Reserve Bank
$
2,055,492
Federal Home Loan Bank
752,400
Total lines of credit available
$
2,807,892
Estimated insured vs uninsured deposits
The vast majority of The Bancorp’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.
June 30, 2023
Insured
91%
Low balance accounts
5%
Other uninsured
4%
Total deposits
100%
Calculation of efficiency
ratio(1)
Three months ended
June 30,
December 31,
2023
2022
(Dollars in thousands)
Net interest income
$
87,195
$
76,760
Non-interest income
29,336
25,740
Total revenue
$
116,531
$
102,500
Non-interest expense
$
49,943
$
43,475
Efficiency ratio
43%
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/20230726581251/en/
The Bancorp, Inc. Andres Viroslav Director, Investor
Relations 215-861-7990 andres.viroslav@thebancorp.com
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