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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Bancorp Inc | NASDAQ:TBBK | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.61 | 1.19% | 51.91 | 51.89 | 51.93 | 53.18 | 48.0001 | 49.91 | 784,563 | 20:09:22 |
The Bancorp, Inc. ("The Bancorp" “the Company” or “we” or “our”) (NASDAQ: TBBK), a financial holding company, today reported financial results for the second quarter of 2024.
Recent Developments
The Company entered into a purchase and sale agreement for an apartment property acquired by The Bancorp Bank through foreclosure in connection with a real estate bridge lending (“REBL”) loan. At June 30, 2024, the related $39.4 million balance, comprised the majority of our other real estate owned. The purchaser made an earnest money deposit of $125,000 in July 2024, with additional required deposits projected to total $500,000 prior to the December 31, 2024, closing deadline. The sales price is expected to cover the Company’s current other real estate owned balance plus the forecasted cost of improvements to the property. There can be no assurance that the purchaser will consummate the sale of the property, but if not consummated, earnest money deposits would accrue to the Company.
One of the accounting estimates as described in the notes to our financial statements, is the allowance for credit losses (“ACL”), which is sensitive to a variety of inherent portfolio and external factors. REBL may be one of the more sensitive portfolios to such factors. In the second quarter of 2024, REBL loans classified as either special mention or substandard increased to $177.1 million from $165.2 million at March 31, 2024. Each classified loan was evaluated for a potential increase in the ACL on the basis of third-party appraisals of related apartment building collateral. On the basis of “as is” and “as stabilized” loan to values (“LTV’s”), increases to the allowance for specific loans was not required. The respective weighted average “as is” and “as stabilized” LTVs were 81% and 69%, based on third party appraisals, the majority of which were performed in 2024. The current allowance for credit losses for REBL, is primarily based upon historical industry losses for multi-family loans, in the absence of significant historical losses within the Company’s REBL portfolio. However, as a result of increasing amounts of loans classified as special mention and substandard, the Company will evaluate potential related sensitivity of that factor for REBL. This evaluation is inherently subjective as it requires material estimates that may be susceptible to change as more information becomes available.
The Company has a single $12.6 million par value security in its investment portfolio, which is the only security remaining from its securitization business, which was exited in 2020. As a result of appraisals received from the servicer in the second quarter of 2024, the Company placed the security into non-accrual status, notwithstanding that those appraisals, with lower values than prior appraisals, exceeded principal and accrued interest. The following table reflects the related non-GAAP second quarter impact.
Net Income (000’s)
EPS
GAAP
$
53,686
$
1.05
Interest income impact of legacy security transferred to nonaccrual, net of tax
1,009
0.02
As adjusted, non-GAAP
$
54,695
$
1.07
In the second quarter of 2024, the Company initiated its measured entry into consumer fintech lending, by which the Company makes consumer loans with the marketing and servicing assistance of its existing and planned new fintech relationships. While the $72.4 million of such loans at June 30, 2024 did not significantly impact income during the quarter, such lending is expected to meaningfully impact both the balance sheet and income in the future. We expect that impact will be reflected in a lower cost of funds for related deposits and increased transaction fees.
Highlights
“The second quarter, which usually reflects greater tax refund related runoff, instead showed continued broad based momentum in deposit volumes, and deposit stability,” said Damian Kozlowski CEO and President of The Bancorp.” Growth trends and the reduction of shares through buybacks should support continued strong EPS growth in 2024 and beyond. We are lifting our 2024 guidance to $4.35 a share from $4.25 a share without including the impact of $50 million of quarterly share buybacks. We intend to issue preliminary 2025 guidance in our 3rd quarter press release.”
Conference Call Webcast
You may access the LIVE webcast of The Bancorp's Quarterly Earnings Conference Call at 8:00 AM ET Friday, July 26, 2024 by clicking on the webcast link on The Bancorp's homepage at www.thebancorp.com. Or you may dial 1.800.225.9448, conference code BANCORP. 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 2, 2024, by dialing 1.800.934.5153.
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
2024
2023
2024
2023
(Dollars in thousands, except per share and share data)
Net interest income
$
93,795
$
87,195
$
188,213
$
173,011
Provision for credit losses on loans
1,252
361
3,421
2,264
Non-interest income
ACH, card and other payment processing fees
3,000
2,429
5,964
4,600
Prepaid, debit card and related fees
24,755
22,177
49,041
45,500
Net realized and unrealized gains on commercial
loans, at fair value
503
1,921
1,599
3,646
Leasing related income
1,429
1,511
1,817
3,001
Consumer credit fintech fees
140
—
140
—
Other non-interest income
895
1,298
1,543
1,578
Total non-interest income
30,722
29,336
60,104
58,325
Non-interest expense
Salaries and employee benefits
33,863
33,167
64,143
62,952
Data processing expense
1,423
1,398
2,844
2,719
Legal expense
633
949
1,454
1,907
FDIC insurance
869
472
1,714
1,427
Software
4,637
4,317
9,126
8,554
Other non-interest expense
10,021
9,640
18,877
20,414
Total non-interest expense
51,446
49,943
98,158
97,973
Income before income taxes
71,819
66,227
146,738
131,099
Income tax expense
18,133
17,218
36,623
32,968
Net income
53,686
49,009
110,115
98,131
Net income per share - basic
$
1.05
$
0.89
$
2.12
$
1.78
Net income per share - diluted
$
1.05
$
0.89
$
2.10
$
1.76
Weighted average shares - basic
50,937,055
54,871,681
51,842,097
55,160,642
Weighted average shares - diluted
51,337,491
55,269,640
52,327,122
55,653,950
Condensed consolidated balance sheets
June 30,
March 31,
December 31,
June 30,
2024 (unaudited)
2024 (unaudited)
2023
2023 (unaudited)
(Dollars in thousands, except share data)
Assets:
Cash and cash equivalents
Cash and due from banks
$
5,741
$
9,105
$
4,820
$
6,496
Interest earning deposits at Federal Reserve Bank
399,853
1,241,363
1,033,270
874,050
Total cash and cash equivalents
405,594
1,250,468
1,038,090
880,546
Investment securities, available-for-sale, at fair value, net of $10.0 million allowance for credit loss effective December 31, 2023
1,581,006
718,247
747,534
776,410
Commercial loans, at fair value
265,193
282,998
332,766
396,581
Loans, net of deferred fees and costs
5,605,727
5,459,344
5,361,139
5,267,574
Allowance for credit losses
(28,575)
(28,741)
(27,378)
(23,284)
Loans, net
5,577,152
5,430,603
5,333,761
5,244,290
Federal Home Loan Bank, Atlantic Central Bankers Bank, and Federal Reserve Bank stock
15,642
15,642
15,591
20,157
Premises and equipment, net
28,038
27,482
27,474
26,408
Accrued interest receivable
43,720
37,861
37,534
34,062
Intangible assets, net
1,452
1,552
1,651
1,850
Other real estate owned
57,861
19,559
16,949
20,952
Deferred tax asset, net
20,556
21,764
21,219
19,215
Other assets
149,187
109,680
133,126
122,435
Total assets
$
8,145,401
$
7,915,856
$
7,705,695
$
7,542,906
Liabilities:
Deposits
Demand and interest checking
$
7,095,391
$
6,828,159
$
6,630,251
$
6,554,967
Savings and money market
60,297
62,597
50,659
68,084
Total deposits
7,155,688
6,890,756
6,680,910
6,623,051
Securities sold under agreements to repurchase
—
—
42
42
Senior debt
96,037
95,948
95,859
95,682
Subordinated debenture
13,401
13,401
13,401
13,401
Other long-term borrowings
38,283
38,407
38,561
9,917
Other liabilities
65,001
60,579
69,641
51,646
Total liabilities
$
7,368,410
$
7,099,091
$
6,898,414
$
6,793,739
Shareholders' equity:
Common stock - authorized, 75,000,000 shares of $1.00 par value; 49,267,403 and 54,542,284 shares issued and outstanding at June 30, 2024 and 2023, respectively
49,268
52,253
53,203
54,542
Additional paid-in capital
72,171
166,335
212,431
256,115
Retained earnings
671,730
618,044
561,615
467,450
Accumulated other comprehensive loss
(16,178)
(19,867)
(19,968)
(28,940)
Total shareholders' equity
776,991
816,765
807,281
749,167
Total liabilities and shareholders' equity
$
8,145,401
$
7,915,856
$
7,705,695
$
7,542,906
Average balance sheet and net interest income
Three months ended June 30, 2024
Three months ended June 30, 2023
(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(1)
$
5,749,565
$
114,970
8.00%
$
5,730,384
$
107,299
7.49%
Leases-bank qualified(2)
4,621
117
10.13%
3,801
100
10.52%
Investment securities-taxable
1,454,393
17,520
4.82%
778,100
9,873
5.08%
Investment securities-nontaxable(2)
2,895
50
6.91%
3,234
53
6.56%
Interest earning deposits at Federal Reserve Bank
341,863
4,677
5.47%
701,057
8,997
5.13%
Net interest earning assets
7,553,337
137,334
7.27%
7,216,576
126,322
7.00%
Allowance for credit losses
(28,568)
(23,895)
Other assets
266,061
231,035
$
7,790,830
$
7,423,716
Liabilities and Shareholders' Equity:
Deposits:
Demand and interest checking
$
6,657,386
$
39,542
2.38%
$
6,399,750
$
36,688
2.29%
Savings and money market
60,212
457
3.04%
78,252
728
3.72%
Total deposits
6,717,598
39,999
2.38%
6,478,002
37,416
2.31%
Short-term borrowings
92,412
1,295
5.61%
—
—
—
Repurchase agreements
—
—
—
41
—
—
Long-term borrowings
38,362
685
7.14%
9,949
128
5.15%
Subordinated debentures
13,401
291
8.69%
13,401
271
8.09%
Senior debt
95,984
1,234
5.14%
96,890
1,280
5.28%
Total deposits and liabilities
6,957,757
43,504
2.50%
6,598,283
39,095
2.37%
Other liabilities
36,195
88,276
Total liabilities
6,993,952
6,686,559
Shareholders' equity
796,878
737,157
$
7,790,830
$
7,423,716
Net interest income on tax equivalent basis(2)
$
93,830
$
87,227
Tax equivalent adjustment
35
32
Net interest income
$
93,795
$
87,195
Net interest margin(2)
4.97%
4.83%
(1) Includes commercial loans, at fair value. All periods include non-accrual loans.
(2) Full taxable equivalent basis, using 21% respective statutory federal tax rates in 2024 and 2023.
Average balance sheet and net interest income
Six months ended June 30, 2024
Six months ended June 30, 2023
(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(1)
$
5,733,413
$
229,130
7.99%
$
5,858,040
$
213,503
7.29%
Leases-bank qualified(2)
4,683
233
9.95%
3,582
169
9.44%
Investment securities-taxable
1,093,996
27,154
4.96%
776,089
19,173
4.94%
Investment securities-nontaxable(2)
2,895
100
6.91%
3,288
94
5.72%
Interest earning deposits at Federal Reserve Bank
607,968
16,561
5.45%
640,864
15,582
4.86%
Net interest earning assets
7,442,955
273,178
7.34%
7,281,863
248,521
6.83%
Allowance for credit losses
(27,862)
(23,215)
Other assets
323,244
234,037
$
7,738,337
$
7,492,685
Liabilities and Shareholders' Equity:
Deposits:
Demand and interest checking
$
6,553,107
$
78,256
2.39%
$
6,401,678
$
69,071
2.16%
Savings and money market
55,591
904
3.25%
105,105
1,947
3.70%
Time deposits
—
—
—
41,933
858
4.09%
Total deposits
6,608,698
79,160
2.40%
6,548,716
71,876
2.20%
Short-term borrowings
46,892
1,314
5.60%
10,193
234
4.59%
Repurchase agreements
6
—
—
41
—
—
Long-term borrowings
38,439
1,371
7.13%
9,973
254
5.09%
Subordinated debentures
13,401
583
8.70%
13,401
532
7.94%
Senior debt
95,939
2,467
5.14%
97,985
2,559
5.22%
Total deposits and liabilities
6,803,375
84,895
2.50%
6,680,309
75,455
2.26%
Other liabilities
142,826
90,777
Total liabilities
6,946,201
6,771,086
Shareholders' equity
792,136
721,599
$
7,738,337
$
7,492,685
Net interest income on tax equivalent basis(2)
$
188,283
$
173,066
Tax equivalent adjustment
70
55
Net interest income
$
188,213
$
173,011
Net interest margin(2)
5.06%
4.75%
(1) Includes commercial loans, at fair value. All periods include non-accrual loans.
(2) Full taxable equivalent basis, using 21% respective statutory federal tax rates in 2024 and 2023.
Allowance for credit losses
Six months ended
Year ended
June 30,
June 30,
December 31,
2024 (unaudited)
2023 (unaudited)
2023
(Dollars in thousands)
Balance in the allowance for credit losses at beginning of period
$
27,378
$
22,374
$
22,374
Loans charged-off:
SBA non-real estate
417
871
871
SBA commercial mortgage
—
—
76
Direct lease financing
2,301
1,439
3,666
IBLOC
—
—
24
Consumer - home equity
10
—
—
Other loans
6
3
3
Total
2,734
2,313
4,640
Recoveries:
SBA non-real estate
32
298
475
SBA commercial mortgage
—
75
75
Direct lease financing
59
175
330
Consumer - home equity
—
49
299
Total
91
597
1,179
Net charge-offs
2,643
1,716
3,461
Provision for credit losses, excluding commitment provision
3,840
2,626
8,465
Balance in allowance for credit losses at end of period
$
28,575
$
23,284
$
27,378
Net charge-offs/average loans
0.05%
0.03%
0.07%
Net charge-offs/average assets
0.03%
0.02%
0.05%
Loan portfolio
June 30,
March 31,
December 31,
June 30,
2024 (unaudited)
2024 (unaudited)
2023
2023 (unaudited)
(Dollars in thousands)
SBL non-real estate
$
171,893
$
140,956
$
137,752
$
117,621
SBL commercial mortgage
647,894
637,926
606,986
515,008
SBL construction
30,881
27,290
22,627
32,471
Small business loans
850,668
806,172
767,365
665,100
Direct lease financing
711,403
702,512
685,657
657,316
SBLOC / IBLOC(1)
1,558,095
1,550,313
1,627,285
1,883,607
Advisor financing(2)
238,831
232,206
221,612
173,376
Real estate bridge loans
2,119,324
2,101,896
1,999,782
1,826,227
Consumer fintech(3)
70,081
—
—
—
Other loans(4)
46,592
56,163
50,638
55,644
5,594,994
5,449,262
5,352,339
5,261,270
Unamortized loan fees and costs
10,733
10,082
8,800
6,304
Total loans, including unamortized fees and costs
$
5,605,727
$
5,459,344
$
5,361,139
$
5,267,574
Small business portfolio
June 30, 2024 (unaudited)
March 31, 2024 (unaudited)
December 31, 2023
June 30, 2023 (unaudited)
(Dollars in thousands)
SBL, including unamortized fees and costs
$
860,226
$
816,151
$
776,867
$
673,667
SBL, included in loans, at fair value
104,146
109,131
119,287
134,131
Total small business loans(5)
$
964,372
$
925,282
$
896,154
$
807,798
(1) SBLOC are collateralized by marketable securities, while IBLOC are collateralized by the cash surrender value of insurance policies. At June 30, 2024 and December 31, 2023, IBLOC loans amounted to $582.8 million and $646.9 million, 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% of the business enterprise value based on a third-party valuation, but may be increased depending upon the debt service coverage ratio. Personal guarantees and blanket business liens are obtained as appropriate. (3) Consumer fintech loans consist primarily of secured credit card loans. (4) Includes demand deposit overdrafts reclassified as loan balances totaling $279,000 and $1.7 million at June 30, 2024 and December 31, 2023, respectively. Estimated overdraft charge-offs and recoveries are reflected in the allowance for credit losses and are immaterial. (5) 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, 2024
Loan principal
(Dollars in millions)
U.S. government guaranteed portion of SBA loans(1)
$
400
PPP loans(1)
2
Commercial mortgage SBA(2)
336
Construction SBA(3)
14
Non-guaranteed portion of U.S. government guaranteed 7(a) Program loans(4)
117
Non-SBA SBLs
56
Other(5)
28
Total principal
$
953
Unamortized fees and costs
11
Total SBLs
$
964
(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 $6 million in 504 Program first mortgages with an origination date LTV of 50-60%, and $8 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. (5) Comprised of $29 million of loans sold that do not qualify for true sale accounting.Small business loans by type as of June 30, 2024
(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
$
76
$
—
$
—
$
76
15%
Funeral homes and funeral services
22
—
25
47
9%
Full-service restaurants
29
5
2
36
7%
Child day care services
23
1
2
26
5%
Car washes
17
1
—
18
3%
General line grocery merchant wholesalers
17
—
—
17
3%
Homes for the elderly
16
—
—
16
3%
Outpatient mental health and substance abuse centers
15
—
—
15
3%
Gasoline stations with convenience stores
15
—
—
15
3%
Fitness and recreational sports centers
8
—
2
10
2%
Nursing care facilities
9
—
—
9
2%
Lawyer's office
9
—
—
9
2%
Limited-service restaurants
4
1
3
8
2%
Caterers
7
—
—
7
1%
All other specialty trade contractors
7
—
—
7
1%
General warehousing and storage
6
—
—
6
1%
Plumbing, heating, and air-conditioning contractors
5
—
1
6
1%
Other accounting services
5
—
—
5
1%
Offices of real estate agents and brokers
5
—
—
5
1%
Other miscellaneous durable goods merchant
5
—
—
5
1%
Other technical and trade schools
5
—
—
5
1%
Packaged frozen food merchant wholesalers
5
—
—
5
1%
Lessors of nonresidential buildings (except miniwarehouses)
5
—
—
5
1%
All other amusement and recreation industries
4
—
—
4
1%
Other(2)
122
10
29
161
30%
Total
$
441
$
18
$
64
$
523
100%
(1) Of the SBL commercial mortgage and SBL construction loans, $109 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. SBL Commercial excludes $29 million of loans sold that do not qualify for true sale accounting. (2) Loan types of less than $4 million are spread over approximately one hundred different business types.State diversification as of June 30, 2024
(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
$
117
$
3
$
5
$
125
24%
Florida
76
4
3
83
16%
North Carolina
38
1
5
44
8%
Pennsylvania
21
—
14
35
7%
New York
28
2
2
32
6%
Texas
22
2
6
30
6%
Georgia
26
1
1
28
5%
New Jersey
21
3
3
27
5%
Other States
92
2
25
119
23%
Total
$
441
$
18
$
64
$
523
100%
(1) Of the SBL commercial mortgage and SBL construction loans, $109 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. SBL Commercial excludes $29 million of loans that do not qualify for true sale accounting.Top 10 loans as of June 30, 2024
Type(1)
State
SBL commercial mortgage
(Dollars in millions)
General line grocery merchant wholesalers
CA
$
13
Funeral homes and funeral services
PA
13
Outpatient mental health and substance abuse center
FL
10
Funeral homes and funeral services
ME
9
Hotel
FL
8
Lawyer's office
CA
8
Hotel
NC
7
General warehousing and storage
PA
6
Hotel
FL
6
Hotel
NY
6
Total
$
86
(1) 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, 2024
Type
# Loans
Balance
Weighted average origination date LTV
Weighted average interest rate
(Dollars in millions)
Real estate bridge loans (multifamily apartment loans recorded at amortized cost)(1)
160
$
2,119
70%
9.19%
Non-SBA commercial real estate loans, at fair value:
Multifamily (apartment bridge loans)(1)
7
$
116
76%
9.20%
Hospitality (hotels and lodging)
2
27
65%
9.82%
Retail
2
12
72%
8.19%
Other
2
9
73%
5.10%
13
164
74%
9.18%
Fair value adjustment
(3)
Total non-SBA commercial real estate loans, at fair value
161
Total commercial real estate loans
$
2,280
70%
9.19%
(1) In the third quarter of 2021, we resumed the origination of bridge loans for multi-family apartment rehabilitation which comprise these categories. Such loans held at fair value were originally intended for sale, but are now being retained on the balance sheet. In addition to “as is” origination date appraisals, on which the weighted average origination date LTVs are based, third party appraisers also estimated “as stabilized” values, which represents additional potential collateral value as rehabilitation progresses, and units are re-leased at stabilized rental rates. The weighted average origination date “as stabilized” LTV was estimated at 61%.
State diversification as of June 30, 2024
15 largest loans as of June 30, 2024
State
Balance
Origination date LTV
State
Balance
Origination date LTV
(Dollars in millions)
(Dollars in millions)
Texas
$
778
71%
Texas
$
47
72%
Georgia
259
69%
Texas
46
75%
Florida
245
69%
Tennessee
40
72%
Michigan
132
68%
Michigan
38
62%
Indiana
105
70%
Texas
37
80%
Ohio
73
67%
Texas
36
67%
New Jersey
71
68%
Florida
35
72%
Other States each <$60 million
617
71%
Pennsylvania
34
63%
Total
$
2,280
70%
Indiana
34
76%
Texas
33
62%
New Jersey
32
62%
Michigan
32
79%
Oklahoma
31
78%
Texas
31
77%
Michigan
29
66%
15 largest commercial real estate loans
$
535
71%
Institutional banking loans outstanding at June 30, 2024
Type
Principal
% of total
(Dollars in millions)
SBLOC
$
975
54%
IBLOC
583
32%
Advisor financing
239
14%
Total
$
1,797
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, 2024
Principal amount
% Principal to collateral
(Dollars in millions)
$
11
17%
9
48%
8
36%
8
68%
8
65%
8
80%
8
24%
8
34%
7
22%
7
44%
Total and weighted average
$
82
43%
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 April 17, 2024, all were rated A- (Excellent) or better by AM BEST.
Direct lease financing by type as of June 30, 2024
Principal balance(1)
% Total
(Dollars in millions)
Government agencies and public institutions(2)
$
129
18%
Construction
111
16%
Waste management and remediation services
98
14%
Real estate and rental and leasing
82
12%
Health care and social assistance
28
4%
Other services (except public administration)
23
3%
Professional, scientific, and technical services
23
3%
General freight trucking
21
3%
Finance and insurance
13
2%
Transit and other transportation
13
2%
Wholesale trade
10
1%
Educational services
7
1%
Other
153
21%
Total
$
711
100%
(1) Of the total $711 million of direct lease financing, $642 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, 2024
State
Principal balance
% Total
(Dollars in millions)
Florida
$
106
15%
New York
66
9%
Utah
60
8%
California
52
7%
Pennsylvania
43
6%
Connecticut
41
6%
New Jersey
39
5%
North Carolina
36
5%
Maryland
34
5%
Texas
28
4%
Idaho
18
3%
Washington
15
2%
Georgia
15
2%
Ohio
13
2%
Alabama
12
2%
Other States
133
19%
Total
$
711
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, 2024
The Bancorp, Inc.
10.07%
14.13%
14.68%
14.13%
The Bancorp Bank, National Association
11.21%
15.69%
16.24%
15.69%
"Well capitalized" institution (under federal regulations-Basel III)
5.00%
8.00%
10.00%
6.50%
As of December 31, 2023
The Bancorp, Inc.
11.19%
15.66%
16.23%
15.66%
The Bancorp Bank, National Association
12.37%
17.35%
17.92%
17.35%
"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,
2024
2023
2024
2023
Selected operating ratios
Return on average assets(1)
2.77%
2.65%
2.86%
2.64%
Return on average equity(1)
27.10%
26.67%
27.95%
27.42%
Net interest margin
4.97%
4.83%
5.06%
4.75%
(1) Annualized
Book value per share table
June 30,
March 31,
December 31,
June 30,
2024
2024
2023
2023
Book value per share
$
15.77
$
15.63
$
15.17
$
13.74
Loan delinquency and other real estate owned
June 30, 2024
30-59 days
60-89 days
90+ days
Total
Total
past due
past due
still accruing
Non-accrual
past due
Current
loans
SBL non-real estate
$
78
$
311
$
764
$
2,448
$
3,601
$
168,292
$
171,893
SBL commercial mortgage
—
336
—
5,211
5,547
642,347
647,894
SBL construction
—
—
—
3,385
3,385
27,496
30,881
Direct lease financing
4,575
4,415
2,224
3,870
15,084
696,319
711,403
SBLOC / IBLOC
12,448
2,101
1,284
—
15,833
1,542,262
1,558,095
Advisor financing
—
—
—
—
—
238,831
238,831
Real estate bridge loans(1)
—
12,300
—
—
12,300
2,107,024
2,119,324
Consumer fintech
—
—
—
—
—
70,081
70,081
Other loans
96
—
4
—
100
46,492
46,592
Unamortized loan fees and costs
—
—
—
—
—
10,733
10,733
$
17,197
$
19,463
$
4,276
$
14,914
$
55,850
$
5,549,877
$
5,605,727
(1) The $12.3 million shown in the 60-89 days past due column for real estate bridge loans is collateralized by apartment building property with 72% and 56% “as is” and “as stabilized” LTVs, respectively, based upon a May 2024 appraisal. “As stabilized” LTVs represent additional potential collateral value as rehabilitation progresses, and units are re-leased at stabilized rental rates. See footnote (2) to the tables directly below for additional information on this loan.Other real estate owned year to date activity
June 30, 2024
Beginning balance
$
16,949
Transfer from loans, net
40,032
Transfer from commercial loans, at fair value
880
Ending balance
$
57,861
June 30,
March 31,
December 31,
June 30,
2024
2024
2023
2023
(Dollars in thousands)
Asset quality ratios:
Nonperforming loans to total loans(1)
0.34%
1.05%
0.25%
0.28%
Nonperforming assets to total assets(1)
0.95%
0.97%
0.39%
0.47%
Allowance for credit losses to total loans
0.51%
0.53%
0.51%
0.44%
(1) In the first quarter of 2024, a $39.4 million apartment building rehabilitation bridge loan was transferred to nonaccrual status. On April 2, 2024, the same loan was transferred from nonaccrual status to other real estate owned. We intend to complete the improvements, which have already begun, on the underlying apartment building. During the time that improvements are being completed, the Company intends to have a property manager lease improved units as they become available, prior to the sale of the property. The $39.4 million loan balance compares to a September 2023 third party “as is” appraisal of $47.8 million, or an 82% “as is” LTV, with additional potential collateral value as construction progresses, and units are re-leased at stabilized rental rates. (2) Borrowers for a $12.3 million apartment property real estate bridge loan which had a six month payment deferral granted in the fourth quarter of 2023 have not resumed payments, and are reflected in the 60-89 days past due column in the table above. The related “as is” and “as stabilized” LTVs based on a May 2024 appraisal were respectively 72% and 56%. The “as stabilized” loan to value measures the apartment property’s value after renovations have been completed and units have generally been released. The Company originated a new loan with a new borrower for a previously reported $9.5 million REBL loan that was 60 to 89 days delinquent at March 31, 2024. The new borrower has greater financial capacity to complete the related project and negotiated three quarters of payment deferrals and a lower rate. The “as stabilized” LTV is approximately 85% after considering additional estimated future fundings to complete renovations. The aforementioned LTVs are based on third party appraisals performed within the past year.
Gross dollar volume (GDV)(1)
Three months ended
June 30,
March 31,
December 31,
June 30,
2024
2024
2023
2023
(Dollars in thousands)
Prepaid and debit card GDV
$
37,139,200
$
37,943,338
$
33,292,350
$
32,776,154
(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, 2024
(Dollars in millions)
Balances
% Growth
Major business lines
Average approximate rates(1)
Balances(2)
Year over year
Linked quarter annualized
Loans
Institutional banking(3)
6.8%
$
1,797
(13%)
3%
Small business lending(4)
7.4%
964
16%
17%
Leasing
8.0%
711
8%
5%
Commercial real estate (non-SBA loans, at fair value)
9.0%
161
nm
nm
Real estate bridge loans (recorded at book value)
9.2%
2,119
16%
3%
Weighted average yield
8.0%
$
5,752
Non-interest income(5)
% Growth
Deposits: Fintech Solutions group
Current quarter
Year over year
Prepaid and debit card issuance, and other payments
2.4%
$
6,441
8%
nm
$
27.8
13%
(1) Average rates are for the three months ended June 30, 2024. (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. Growth rates exclude $29 million of loans that do not qualify for true sale accounting. (5) Growth rate excludes Q1 2023 adjustments of $600,000 of fees related to a prior period and a $1.4 million termination fee from a client which formed its own bank.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, 2024
(Dollars in thousands)
Federal Reserve Bank
$
1,936,240
Federal Home Loan Bank
1,116,765
Total lines of credit available
$
3,053,005
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, 2024
Insured
93%
Low balance accounts
4%
Other uninsured
3%
Total deposits
100%
Calculation of efficiency ratio(1)
Three months ended
Year ended
June 30,
June 30,
December 31,
2024
2023
2023
(Dollars in thousands)
Net interest income
$
93,795
$
87,195
$
354,052
Non-interest income
30,722
29,336
112,094
Total revenue
$
124,517
$
116,531
$
466,146
Non-interest expense
$
51,446
$
49,943
$
191,042
Efficiency ratio
41%
43%
41%
(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/20240723377870/en/
The Bancorp, Inc. Contact Andres Viroslav Director, Investor Relations 215-861-7990 andres.viroslav@thebancorp.com
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