The Bancorp, Inc. Reports Third Quarter 2023 Financial Results
The Bancorp, Inc. ("The Bancorp" or “we”) (NASDAQ: TBBK), a financial holding company, today reported financial results for the third quarter of 2023.
The Bancorp, Inc. ("The Bancorp" or “we”) (NASDAQ: TBBK), a financial holding company, today reported financial results for the third quarter of 2023.
Highlights
- The Bancorp reported net income of $50.1 million, or $0.92 per diluted share, for the quarter ended September 30, 2023, compared to net income of $30.6 million, or $0.54 per diluted share, for the quarter ended September 30, 2022, or a 70% increase in income per diluted share.
- Return on assets and equity for the quarter ended September 30, 2023 amounted to 2.7% and 26%, respectively, compared to 1.7% and 18%, respectively, for the quarter ended September 30, 2022 (all percentages “annualized”).
- Net interest income increased 37% to $88.9 million for the quarter ended September 30, 2023, compared to $64.7 million for the quarter ended September 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 5.07% for the quarter ended September 30, 2023, compared to 3.69% for the quarter ended September 30, 2022, and 4.83% for the quarter ended June 30, 2023.
- Loans, net of deferred fees and costs were $5.20 billion at September 30, 2023, compared to $5.49 billion at December 31, 2022 and $5.27 billion at September 30, 2022. Those changes reflected a decrease of 1% quarter over linked quarter and a decrease of 1% year over year.
- Gross dollar volume (“GDV”), representing the total amounts spent on prepaid and debit cards, increased $4.85 billion, or 17%, to $32.97 billion for the quarter ended September 30, 2023, compared to the quarter ended September 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 12% to $24.1 million for the third quarter of 2023 compared to the third quarter of 2022.
- Small business loans (“SBL”), including those held at fair value, grew 13% year over year to $830.1 million at September 30, 2023, and 3% quarter over linked quarter. That growth excludes Paycheck Protection Program (“PPP”) loan balances which amounted to $2.3 million and $6.7 million at September 30, 2023 and September 30, 2022, respectively.
- Direct lease financing balances increased 12% year over year to $670.2 million at September 30, 2023, and 2% quarter over linked quarter.
- At September 30, 2023, real estate bridge loans of $1.85 billion had grown 1% compared to the $1.83 billion balance at June 30, 2023, and 24% compared to the September 30, 2022 balance of $1.49 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 24% year over year and decreased 7% quarter over linked quarter to $1.92 billion at September 30, 2023.
- The average interest rate on $6.41 billion of average deposits and interest-bearing liabilities during the third quarter of 2023 was 2.50%. Average deposits of $6.29 billion for the third quarter of 2023 reflected an increase of 3% from the $6.11 billion of average deposits for the quarter ended September 30, 2022, and a 3% decrease from $6.48 billion of average deposits in the second quarter of 2023. The decrease reflected the planned exit of $200 million of higher cost funds on July 1, 2023. Not included in deposit totals are deposits which are sold to other financial institutions totaling $334.7 million at September 30, 2023.
- 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 $2.7 billion as of September 30, 2023, as well as access to other liquidity.
- As of September 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 10.92%, 15.53%, 16.04% and 15.53%, 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 September 30, 2023 was $14.36 per share compared to $11.81 per common share at September 30, 2022, an increase of 22%.
- The Bancorp repurchased 685,478 shares of its common stock at an average cost of $36.47 per share during the quarter ended September 30, 2023.
CEO and President Damian Kozlowski commented, “The Bancorp continues to produce record core profitability and exemplar financial performance in a challenging interest rate and macro environment for most financial institutions. We are initiating 2024 preliminary guidance of $4.25 a share without including the impact of share buybacks. The 2024 guidance is 18% earnings growth over 2023 guidance. In addition, as a result of our investments in growth and efficiency, the Bancorp’s increased ROE is driving a continued increase in our regulatory capital ratios. With the reg ii Durbin balance sheet limit of $10 billion, we are fast approaching the maximum equity capital needed to support our business growth into the future. Therefore, we are significantly increasing our planned buyback in 2024 by $100 million to $200 million or $50 million a quarter from $25 million a quarter.”
Conference Call Webcast
You may access the LIVE webcast of The Bancorp's Quarterly Earnings Conference Call at 8:00 AM ET Friday, October 27, 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 63043391. You may listen to the replay of the webcast following the live call on The Bancorp's investor relations website or telephonically until Friday, November 3, 2023 by dialing 1.877.674.7070, access code 043391#.
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.
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The Bancorp, Inc. |
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Financial highlights |
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(unaudited) |
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Three months ended |
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Nine months ended |
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September 30, |
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September 30, |
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Consolidated condensed income statements |
2023 |
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2022 |
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2023 |
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2022 |
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(Dollars in thousands, except per share and share data) |
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||||||
|
|
|
|
|
|
|
|
|
|
|
|
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Net interest income |
$ |
88,882 |
|
$ |
64,659 |
|
$ |
261,893 |
|
$ |
172,081 |
|
Provision for credit losses |
|
1,752 |
|
|
822 |
|
|
4,016 |
|
|
4,331 |
|
Non-interest income |
|
|
|
|
|
|
|
|
|
|
|
|
ACH, card and other payment processing fees |
|
2,553 |
|
|
2,230 |
|
|
7,153 |
|
|
6,552 |
|
Prepaid, debit card and related fees |
|
21,513 |
|
|
19,175 |
|
|
67,013 |
|
|
57,865 |
|
Net realized and unrealized gains on commercial |
|
|
|
|
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|
|
|
|
|
|
|
loans, at fair value |
|
525 |
|
|
745 |
|
|
4,171 |
|
|
11,262 |
|
Leasing related income |
|
1,767 |
|
|
1,048 |
|
|
4,768 |
|
|
3,566 |
|
Other non-interest income |
|
422 |
|
|
228 |
|
|
2,000 |
|
|
698 |
|
Total non-interest income |
|
26,780 |
|
|
23,426 |
|
|
85,105 |
|
|
79,943 |
|
Non-interest expense |
|
|
|
|
|
|
|
|
|
|
|
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Salaries and employee benefits |
|
30,475 |
|
|
28,001 |
|
|
93,427 |
|
|
77,848 |
|
Data processing expense |
|
1,404 |
|
|
1,292 |
|
|
4,123 |
|
|
3,727 |
|
Legal expense |
|
1,203 |
|
|
907 |
|
|
3,110 |
|
|
3,175 |
|
Legal settlement |
|
— |
|
|
— |
|
|
— |
|
|
1,152 |
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Civil money penalty |
|
— |
|
|
1,750 |
|
|
— |
|
|
1,750 |
|
FDIC insurance |
|
806 |
|
|
679 |
|
|
2,233 |
|
|
2,326 |
|
Software |
|
4,427 |
|
|
4,001 |
|
|
12,981 |
|
|
12,030 |
|
Other non-interest expense |
|
9,144 |
|
|
8,200 |
|
|
29,558 |
|
|
24,019 |
|
Total non-interest expense |
|
47,459 |
|
|
44,830 |
|
|
145,432 |
|
|
126,027 |
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Income before income taxes |
|
66,451 |
|
|
42,433 |
|
|
197,550 |
|
|
121,666 |
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Income tax expense |
|
16,314 |
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|
11,829 |
|
|
49,282 |
|
|
31,694 |
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Net income |
|
50,137 |
|
|
30,604 |
|
|
148,268 |
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|
89,972 |
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Net income per share - basic |
$ |
0.93 |
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$ |
0.54 |
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$ |
2.70 |
|
$ |
1.58 |
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Net income per share - diluted |
$ |
0.92 |
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$ |
0.54 |
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$ |
2.68 |
|
$ |
1.56 |
|
Weighted average shares - basic |
|
54,175,184 |
|
|
56,429,425 |
|
|
54,828,547 |
|
|
56,782,524 |
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Weighted average shares - diluted |
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54,738,610 |
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|
57,008,224 |
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|
55,336,354 |
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57,510,986 |
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Condensed consolidated balance sheets |
September 30, |
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June 30, |
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December 31, |
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September 30, |
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2023 (unaudited) |
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2023 (unaudited) |
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2022 |
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2022 (unaudited) |
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(Dollars in thousands, except share data) |
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Assets: |
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Cash and cash equivalents |
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Cash and due from banks |
$ |
4,881 |
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$ |
6,496 |
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$ |
24,063 |
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|
$ |
22,537 |
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|
Interest earning deposits at Federal Reserve Bank |
|
898,533 |
|
|
|
874,050 |
|
|
|
864,126 |
|
|
|
700,175 |
|
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Total cash and cash equivalents |
|
903,414 |
|
|
|
880,546 |
|
|
|
888,189 |
|
|
|
722,712 |
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|
|
|
|
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|
|
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|
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|
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Investment securities, available-for-sale, at fair value |
|
756,636 |
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|
|
776,410 |
|
|
|
766,016 |
|
|
|
790,594 |
|
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Commercial loans, at fair value |
|
379,603 |
|
|
|
396,581 |
|
|
|
589,143 |
|
|
|
818,040 |
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Loans, net of deferred fees and costs |
|
5,198,972 |
|
|
|
5,267,574 |
|
|
|
5,486,853 |
|
|
|
5,267,375 |
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Allowance for credit losses |
|
(24,145 |
) |
|
|
(23,284 |
) |
|
|
(22,374 |
) |
|
|
(19,689 |
) |
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Loans, net |
|
5,174,827 |
|
|
|
5,244,290 |
|
|
|
5,464,479 |
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|
|
5,247,686 |
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Federal Home Loan Bank, Atlantic Central Bankers Bank, and Federal Reserve Bank stock |
|
20,157 |
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|
|
20,157 |
|
|
|
12,629 |
|
|
|
12,629 |
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Premises and equipment, net |
|
28,978 |
|
|
|
26,408 |
|
|
|
18,401 |
|
|
|
18,443 |
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Accrued interest receivable |
|
34,159 |
|
|
|
34,062 |
|
|
|
32,005 |
|
|
|
25,506 |
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Intangible assets, net |
|
1,751 |
|
|
|
1,850 |
|
|
|
2,049 |
|
|
|
2,149 |
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Other real estate owned |
|
18,756 |
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|
|
20,952 |
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|
|
21,210 |
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|
|
18,873 |
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Deferred tax asset, net |
|
20,379 |
|
|
|
19,215 |
|
|
|
19,703 |
|
|
|
27,241 |
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Other assets |
|
127,107 |
|
|
|
122,435 |
|
|
|
89,176 |
|
|
|
93,201 |
|
|
Total assets |
$ |
7,465,767 |
|
|
$ |
7,542,906 |
|
|
$ |
7,903,000 |
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|
$ |
7,777,074 |
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Liabilities: |
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Deposits |
|
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|
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Demand and interest checking |
$ |
6,455,043 |
|
|
$ |
6,554,967 |
|
|
$ |
6,559,617 |
|
|
$ |
5,934,591 |
|
|
Savings and money market |
|
49,428 |
|
|
|
68,084 |
|
|
|
140,496 |
|
|
|
575,381 |
|
|
Time deposits, $100,000 and over |
|
— |
|
— |
|
330,000 |
|
401,331 |
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Total deposits |
|
6,504,471 |
|
6,623,051 |
|
7,030,113 |
|
6,911,303 |
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Securities sold under agreements to repurchase |
|
42 |
|
|
|
42 |
|
|
|
42 |
|
|
|
42 |
|
|
Senior debt |
|
95,771 |
|
|
|
95,682 |
|
|
|
99,050 |
|
|
|
98,958 |
|
|
Subordinated debenture |
|
13,401 |
|
|
|
13,401 |
|
|
|
13,401 |
|
|
|
13,401 |
|
|
Other long-term borrowings |
|
9,861 |
|
|
|
9,917 |
|
|
|
10,028 |
|
|
|
38,928 |
|
|
Other liabilities |
|
68,533 |
|
51,646 |
|
56,335 |
|
50,704 |
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Total liabilities |
$ |
6,692,079 |
|
$ |
6,793,739 |
|
$ |
7,208,969 |
|
$ |
7,113,336 |
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Shareholders' equity: |
|
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Common stock - authorized, 75,000,000 shares of $1.00 par value; 53,867,129 and 56,201,560 shares issued and outstanding at September 30, 2023 and 2022, respectively |
|
53,867 |
|
|
|
54,542 |
|
|
|
55,690 |
|
|
|
56,202 |
|
|
Additional paid-in capital |
|
234,320 |
|
|
|
256,115 |
|
|
|
299,279 |
|
|
|
311,569 |
|
|
Retained earnings |
|
517,587 |
|
|
|
467,450 |
|
|
|
369,319 |
|
|
|
329,078 |
|
|
Accumulated other comprehensive loss |
|
(32,086 |
) |
(28,940 |
) |
(30,257 |
) |
(33,111 |
) |
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Total shareholders' equity |
|
773,688 |
|
|
|
749,167 |
|
|
|
694,031 |
|
|
|
663,738 |
|
|
|
|
|
|
|
|
|
|
||||||||
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Total liabilities and shareholders' equity |
$ |
7,465,767 |
|
$ |
7,542,906 |
|
$ |
7,903,000 |
|
$ |
7,777,074 |
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|||
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|
|
|
|
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||||
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Average balance sheet and net interest income |
|
Three months ended September 30, 2023 |
|
|
Three months ended September 30, 2022 |
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(Dollars in thousands; unaudited) |
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|
|
Average |
|
|
|
|
|
Average |
|
|
Average |
|
|
|
|
Average |
||||
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Assets: |
|
Balance |
|
|
Interest(1) |
|
|
Rate |
|
|
Balance |
|
|
Interest(1) |
|
Rate |
||||
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|
|
|
|
|
|
|
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|
|
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|
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|
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|
||||
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Interest earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Loans, net of deferred fees and costs(2) |
$ |
5,603,514 |
|
|
$ |
110,506 |
|
|
7.89 |
% |
|
$ |
5,904,996 |
|
|
$ |
75,536 |
|
5.12 |
% |
|
Leases-bank qualified(3) |
|
4,585 |
|
|
|
110 |
|
|
9.60 |
% |
|
|
3,299 |
|
|
|
55 |
|
6.67 |
% |
|
Investment securities-taxable |
|
768,364 |
|
|
|
9,647 |
|
|
5.02 |
% |
|
|
824,178 |
|
|
|
6,792 |
|
3.30 |
% |
|
Investment securities-nontaxable(3) |
|
3,005 |
|
|
|
50 |
|
|
6.66 |
% |
|
|
3,559 |
|
|
|
31 |
|
3.48 |
% |
|
Interest earning deposits at Federal Reserve Bank |
|
639,946 |
|
|
|
8,689 |
|
|
5.43 |
% |
|
|
267,424 |
|
|
|
1,525 |
|
2.28 |
% |
|
Net interest earning assets |
|
7,019,414 |
|
|
|
129,002 |
|
|
7.35 |
% |
|
|
7,003,456 |
|
|
|
83,939 |
|
4.79 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
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Allowance for credit losses |
|
(23,147 |
) |
|
|
|
|
|
|
|
|
(19,111 |
) |
|
|
|
|
|
||
|
Other assets |
|
338,085 |
|
|
|
|
|
|
|
|
|
212,078 |
|
|
|
|
|
|
||
|
|
$ |
7,334,352 |
|
|
|
|
|
|
|
|
$ |
7,196,423 |
|
|
|
|
|
|
||
|
|
|
|
|
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|
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|
|
|
|
|
|
|
||||
|
Liabilities and Shareholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Demand and interest checking |
$ |
6,229,668 |
|
|
$ |
37,913 |
|
|
2.43 |
% |
|
$ |
5,545,115 |
|
|
$ |
12,726 |
|
0.92 |
% |
|
Savings and money market |
|
56,538 |
|
|
|
518 |
|
|
3.66 |
% |
|
|
479,260 |
|
|
|
2,792 |
|
2.33 |
% |
|
Time deposits |
|
— |
|
|
|
— |
— |
|
|
|
87,562 |
|
|
|
547 |
2.50 |
% |
|||
|
Total deposits |
|
6,286,206 |
|
|
|
38,431 |
|
|
2.45 |
% |
|
|
6,111,937 |
|
|
|
16,065 |
|
1.05 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Short-term borrowings |
|
— |
|
|
|
— |
|
|
— |
|
|
|
200,423 |
|
|
|
1,235 |
|
2.46 |
% |
|
Repurchase agreements |
|
41 |
|
|
|
— |
|
|
— |
|
|
|
41 |
|
|
|
— |
|
— |
|
|
Long-term borrowings |
|
9,889 |
|
|
|
128 |
|
|
5.18 |
% |
|
|
39,035 |
|
|
|
506 |
|
5.19 |
% |
|
Subordinated debentures |
|
13,401 |
|
|
|
293 |
8.75 |
% |
|
|
13,401 |
|
|
|
177 |
5.28 |
% |
|||
|
Senior debt |
|
95,714 |
|
|
|
1,234 |
5.16 |
% |
|
|
98,910 |
|
|
|
1,279 |
5.17 |
% |
|||
|
Total deposits and liabilities |
|
6,405,251 |
|
|
|
40,086 |
|
|
2.50 |
% |
|
|
6,463,747 |
|
|
|
19,262 |
|
1.19 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Other liabilities |
|
167,673 |
|
|
|
|
|
|
|
|
|
72,539 |
|
|
|
|
|
|
||
|
Total liabilities |
|
6,572,924 |
|
|
|
|
|
|
|
|
|
6,536,286 |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Shareholders' equity |
|
761,428 |
|
|
|
|
|
|
|
|
|
660,137 |
|
|
|
|
|
|
||
|
|
$ |
7,334,352 |
|
|
|
|
|
|
|
|
$ |
7,196,423 |
|
|
|
|
|
|
||
|
Net interest income on tax equivalent basis(3) |
|
|
|
$ |
88,916 |
|
|
|
|
|
$ |
64,677 |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Tax equivalent adjustment |
|
|
|
34 |
|
|
|
|
|
|
18 |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net interest income |
|
|
$ |
88,882 |
|
|
|
$ |
64,659 |
|||||||||||
|
Net interest margin(3) |
|
|
|
|
|
|
|
5.07 |
% |
|
|
|
|
|
|
|
3.69 |
% |
||
|
(1)Interest on loans for 2023 and 2022 includes $7,000 and $21,000, 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 |
Nine months ended September 30, 2023 |
|
Nine months ended September 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) |
$ |
5,772,266 |
|
|
$ |
324,009 |
|
|
7.48 |
% |
|
$ |
5,531,902 |
|
|
$ |
181,174 |
|
4.37 |
% |
|
Leases-bank qualified(3) |
|
3,920 |
|
|
|
279 |
|
|
9.49 |
% |
|
|
3,657 |
|
|
|
185 |
|
6.75 |
% |
|
Investment securities-taxable |
|
773,485 |
|
|
|
28,820 |
|
|
4.97 |
% |
|
|
880,426 |
|
|
|
17,115 |
|
2.59 |
% |
|
Investment securities-nontaxable(3) |
|
3,193 |
|
|
|
144 |
|
|
6.01 |
% |
|
|
3,559 |
|
|
|
93 |
|
3.48 |
% |
|
Interest earning deposits at Federal Reserve Bank |
|
640,554 |
|
|
|
24,271 |
|
|
5.05 |
% |
|
|
499,104 |
|
|
|
2,876 |
|
0.77 |
% |
|
Net interest earning assets |
|
7,193,418 |
|
|
|
377,523 |
|
|
7.00 |
% |
|
|
6,918,648 |
|
|
|
201,443 |
|
3.88 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Allowance for credit losses |
|
(23,192 |
) |
|
|
|
|
|
|
|
|
(19,087 |
) |
|
|
|
|
|
||
|
Other assets |
|
269,072 |
|
|
|
|
|
|
|
|
|
203,143 |
|
|
|
|
|
|
||
|
|
$ |
7,439,298 |
|
|
|
|
|
|
|
|
$ |
7,102,704 |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Liabilities and Shareholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Demand and interest checking |
$ |
6,343,711 |
|
|
$ |
106,984 |
|
|
2.25 |
% |
|
$ |
5,598,028 |
|
|
$ |
18,522 |
|
0.44 |
% |
|
Savings and money market |
|
88,738 |
|
|
|
2,465 |
|
|
3.70 |
% |
|
|
522,525 |
|
|
|
4,192 |
|
1.07 |
% |
|
Time deposits |
|
27,802 |
|
|
|
858 |
4.11 |
% |
|
|
29,508 |
|
|
|
547 |
2.47 |
% |
|||
|
Total deposits |
|
6,460,251 |
|
|
|
110,307 |
|
|
2.28 |
% |
|
|
6,150,061 |
|
|
|
23,261 |
|
0.50 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Short-term borrowings |
|
6,758 |
|
|
|
234 |
|
|
4.62 |
% |
|
|
71,589 |
|
|
|
1,267 |
|
2.36 |
% |
|
Repurchase agreements |
|
41 |
|
|
|
— |
|
|
— |
|
|
|
41 |
|
|
|
— |
|
— |
|
|
Long-term borrowings |
|
9,945 |
|
|
|
382 |
|
|
5.12 |
% |
|
|
39,286 |
|
|
|
506 |
|
1.72 |
% |
|
Subordinated debentures |
|
13,401 |
|
|
|
825 |
8.21 |
% |
|
|
13,401 |
|
|
|
432 |
4.30 |
% |
|||
|
Senior debt |
|
97,220 |
|
|
|
3,793 |
5.20 |
% |
|
|
98,817 |
|
|
|
3,838 |
5.18 |
% |
|||
|
Total deposits and liabilities |
|
6,587,616 |
|
|
|
115,541 |
|
|
2.34 |
% |
|
|
6,373,195 |
|
|
|
29,304 |
|
0.61 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Other liabilities |
|
117,822 |
|
|
|
|
|
|
|
|
|
71,413 |
|
|
|
|
|
|
||
|
Total liabilities |
|
6,705,438 |
|
|
|
|
|
|
|
|
|
6,444,608 |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Shareholders' equity |
|
733,860 |
|
|
|
|
|
|
|
|
|
658,096 |
|
|
|
|
|
|
||
|
|
$ |
7,439,298 |
|
|
|
|
|
|
|
|
$ |
7,102,704 |
|
|
|
|
|
|
||
|
Net interest income on tax equivalent basis(3) |
|
|
|
$ |
261,982 |
|
|
|
|
|
$ |
172,139 |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Tax equivalent adjustment |
|
|
|
89 |
|
|
|
|
|
|
58 |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net interest income |
|
|
$ |
261,893 |
|
|
|
$ |
172,081 |
|||||||||||
|
Net interest margin(3) |
|
|
|
|
|
|
|
4.86 |
% |
|
|
|
|
|
|
|
3.32 |
% |
||
|
(1)Interest on loans for 2023 and 2022 includes $27,000 and $502,000, 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 |
Nine months ended |
|
Year ended |
||||||||
|
|
September 30, |
|
September 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 |
|
|
|
861 |
|
|
|
885 |
|
|
Direct lease financing |
|
2,804 |
|
|
|
312 |
|
|
|
576 |
|
|
Consumer - other |
|
3 |
|
|
|
— |
|
|
— |
|
|
|
Total |
|
3,678 |
|
|
|
1,173 |
|
|
1,461 |
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Recoveries: |
|
|
|
|
|
|
|
|
|||
|
SBA non-real estate |
|
446 |
|
|
|
57 |
|
|
|
140 |
|
|
SBA commercial mortgage |
|
75 |
|
|
|
— |
|
|
|
— |
|
|
Direct lease financing |
|
220 |
|
|
|
108 |
|
|
|
124 |
|
|
Consumer - home equity |
|
299 |
|
|
|
— |
|
|
— |
|
|
|
Other loans |
|
— |
|
|
|
— |
|
|
24 |
|
|
|
Total |
|
1,040 |
|
|
|
165 |
|
|
288 |
|
|
|
Net charge-offs |
|
2,638 |
|
|
|
1,008 |
|
|
|
1,173 |
|
|
Provision for credit losses, excluding commitment provision |
|
4,409 |
|
|
|
2,891 |
|
|
5,741 |
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Balance in allowance for credit losses at end of period |
$ |
24,145 |
|
|
$ |
19,689 |
|
|
$ |
22,374 |
|
|
Net charge-offs/average loans |
|
0.05 |
% |
|
|
0.02 |
% |
|
|
0.03 |
% |
|
Net charge-offs/average assets |
|
0.04 |
% |
|
|
0.01 |
% |
|
|
0.02 |
% |
|
|
|
|||||||||||
|
Loan portfolio |
September 30, |
|
June 30, |
|
December 31, |
|
September 30, |
|||||
|
|
2023 (unaudited) |
|
2023 (unaudited) |
|
2022 |
|
2022 (unaudited) |
|||||
|
|
(Dollars in thousands) |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SBL non-real estate |
$ |
130,579 |
|
$ |
117,621 |
|
$ |
108,954 |
|
$ |
116,080 |
|
|
SBL commercial mortgage |
|
547,107 |
|
|
515,008 |
|
|
474,496 |
|
|
429,865 |
|
|
SBL construction |
|
19,204 |
32,471 |
30,864 |
26,841 |
|||||||
|
Small business loans |
|
696,890 |
|
|
665,100 |
|
|
614,314 |
|
|
572,786 |
|
|
Direct lease financing |
|
670,208 |
|
|
657,316 |
|
|
632,160 |
|
|
599,796 |
|
|
SBLOC / IBLOC(1) |
|
1,720,513 |
|
|
1,883,607 |
|
|
2,332,469 |
|
|
2,369,106 |
|
|
Advisor financing(2) |
|
199,442 |
|
|
173,376 |
|
|
172,468 |
|
|
168,559 |
|
|
Real estate bridge loans |
|
1,848,224 |
|
|
1,826,227 |
|
|
1,669,031 |
|
|
1,488,119 |
|
|
Other loans(3) |
|
55,800 |
55,644 |
61,679 |
64,980 |
|||||||
|
|
|
5,191,077 |
|
|
5,261,270 |
|
|
5,482,121 |
|
|
5,263,346 |
|
|
Unamortized loan fees and costs |
|
7,895 |
6,304 |
4,732 |
4,029 |
|||||||
|
Total loans, including unamortized fees and costs |
$ |
5,198,972 |
$ |
5,267,574 |
$ |
5,486,853 |
$ |
5,267,375 |
||||
|
Small business portfolio |
|
September 30, |
|
|
June 30, |
|
|
December 31, |
|
|
September 30, |
|
|
|
2023 (unaudited) |
|
|
2023 (unaudited) |
|
|
2022 |
|
|
2022 (unaudited) |
|
|
|
(Dollars in thousands) |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SBL, including unamortized fees and costs |
$ |
705,790 |
$ |
673,667 |
$ |
621,641 |
|
$ |
579,156 |
||
|
SBL, included in loans, at fair value |
|
126,543 |
134,131 |
146,717 |
|
|
159,914 |
||||
|
Total small business loans(4) |
$ |
832,333 |
$ |
807,798 |
$ |
768,358 |
|
$ |
739,070 |
||
|
(1)SBLOC are collateralized by marketable securities, while IBLOC are collateralized by the cash surrender value of insurance policies. At September 30, 2023 and December 31, 2022, IBLOC loans amounted to $712.6 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% 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)Includes demand deposit overdrafts reclassified as loan balances totaling $215,000 and $2.6 million at September 30, 2023 and December 31, 2022, respectively. Estimated overdraft charge-offs and recoveries are reflected in the allowance for credit losses 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 September 30, 2023
|
|
|
Loan principal |
|
|
|
|
(Dollars in millions) |
|
|
U.S. government guaranteed portion of SBA loans(1) |
|
$ |
392 |
|
PPP loans(1) |
|
|
2 |
|
Commercial mortgage SBA(2) |
|
|
273 |
|
Construction SBA(3) |
|
|
11 |
|
Non-guaranteed portion of U.S. government guaranteed 7(a) Program loans(4) |
|
|
109 |
|
Non-SBA SBLs |
|
|
35 |
|
Total principal |
|
$ |
822 |
|
Unamortized fees and costs |
|
|
10 |
|
Total SBLs |
|
$ |
832 |
|
(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 $4.0 million in 504 Program first mortgages with an origination date LTV of 50-60%, and $7.0 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 September 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 (except casino hotels) and motels |
|
$ |
74 |
|
$ |
— |
|
$ |
— |
|
$ |
74 |
|
|
17% |
|
Full-service restaurants |
|
|
24 |
|
|
6 |
|
|
2 |
|
|
32 |
|
|
7% |
|
Funeral homes and funeral services |
|
|
27 |
|
|
— |
|
|
— |
|
|
27 |
|
|
6% |
|
Car washes |
|
|
19 |
|
|
— |
|
|
— |
|
|
19 |
|
|
4% |
|
Child day care services |
|
|
15 |
|
|
1 |
|
|
1 |
|
|
17 |
|
|
4% |
|
Outpatient mental health and substance abuse centers |
|
|
15 |
|
|
— |
|
|
— |
|
|
15 |
|
|
4% |
|
Homes for the elderly |
|
|
13 |
|
|
— |
|
|
— |
|
|
13 |
|
|
3% |
|
Gasoline stations with convenience stores |
|
|
12 |
|
|
— |
|
|
— |
|
|
12 |
|
|
3% |
|
Fitness and recreational sports centers |
|
|
8 |
|
|
— |
|
|
2 |
|
|
10 |
|
|
2% |
|
Lessors of other real estate property |
|
|
9 |
|
|
— |
|
|
1 |
|
|
10 |
|
|
2% |
|
Offices of lawyers |
|
|
9 |
|
|
— |
|
|
— |
|
|
9 |
|
|
2% |
|
General warehousing and storage |
|
|
7 |
|
|
— |
|
|
— |
|
|
7 |
|
|
2% |
|
Plumbing, heating, and air-conditioning companies |
|
|
6 |
|
|
— |
|
|
1 |
|
|
7 |
|
|
2% |
|
Caterers |
|
|
6 |
|
|
— |
|
|
— |
|
|
6 |
|
|
1% |
|
Limited-service restaurants |
|
|
3 |
|
|
1 |
|
|
3 |
|
|
7 |
|
|
2% |
|
Specialty trade contractors |
|
|
5 |
|
|
— |
|
|
— |
|
|
5 |
|
|
1% |
|
Lessors of residential buildings and dwellings |
|
|
5 |
|
|
— |
|
|
— |
|
|
5 |
|
|
1% |
|
Miscellaneous durable goods merchant |
|
|
5 |
|
|
— |
|
|
— |
|
|
5 |
|
|
1% |
|
Packaged frozen food merchant wholesalers |
|
|
5 |
|
|
— |
|
|
— |
|
|
5 |
|
|
1% |
|
Technical and trade schools |
|
|
5 |
|
|
— |
|
|
— |
|
|
5 |
|
|
1% |
|
All other amusement and recreation |
|
|
4 |
|
|
— |
|
|
— |
|
|
4 |
|
|
1% |
|
Offices of dentists |
|
|
3 |
|
|
— |
|
|
— |
|
|
3 |
|
|
1% |
|
Vocational rehabilitation services |
|
|
— |
|
|
3 |
|
|
— |
|
|
3 |
|
|
1% |
|
Other warehousing and storage |
|
|
3 |
|
|
— |
|
|
— |
|
|
3 |
|
|
1% |
|
Other(2) |
|
|
96 |
|
|
1 |
|
|
28 |
|
|
125 |
|
|
30% |
|
Total |
|
$ |
378 |
|
$ |
12 |
|
$ |
38 |
|
$ |
428 |
|
|
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 September 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 |
|
$ |
78 |
|
$ |
4 |
|
$ |
3 |
|
$ |
85 |
|
|
20% |
|
Florida |
|
|
69 |
|
|
1 |
|
|
3 |
|
|
73 |
|
|
17% |
|
North Carolina |
|
|
39 |
|
|
1 |
|
|
2 |
|
|
42 |
|
|
10% |
|
New York |
|
|
24 |
|
|
1 |
|
|
3 |
|
|
28 |
|
|
7% |
|
New Jersey |
|
|
17 |
|
|
3 |
|
|
4 |
|
|
24 |
|
|
6% |
|
Texas |
|
|
19 |
|
|
— |
|
|
4 |
|
|
23 |
|
|
5% |
|
Pennsylvania |
|
|
21 |
|
|
— |
|
|
1 |
|
|
22 |
|
|
5% |
|
Georgia |
|
|
18 |
|
|
1 |
|
|
2 |
|
|
21 |
|
|
5% |
|
Other States <$15 million |
|
|
93 |
|
|
1 |
|
|
16 |
|
|
110 |
|
|
25% |
|
Total |
|
$ |
378 |
|
$ |
12 |
|
$ |
38 |
|
$ |
428 |
|
|
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 September 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 |
|
|
8 |
|
|
Offices of lawyers |
|
|
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 |
|
|
|
|
$ |
72 |
|
|
(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 September 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) |
|
|
139 |
|
$ |
1,848 |
|
|
71% |
|
9.30% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-SBA commercial real estate loans, at fair value: |
|
|
|
|
|
|
|
|
|
|
|
|
Multi-family (apartment bridge loans)(1) |
|
|
11 |
|
$ |
207 |
|
|
76% |
|
8.80% |
|
Hospitality (hotels and lodging) |
|
|
2 |
|
|
27 |
|
|
65% |
|
9.80% |
|
Retail |
|
|
2 |
|
|
12 |
|
|
72% |
|
7.30% |
|
Other |
|
|
2 |
|
|
9 |
|
|
73% |
|
5.00% |
|
|
|
|
17 |
|
|
255 |
|
|
75% |
|
8.69% |
|
Fair value adjustment |
|
|
|
|
|
(2 |
) |
|
|
|
|
|
Total non-SBA commercial real estate loans, at fair value |
|
|
|
|
|
253 |
|
|
|
|
|
|
Total commercial real estate loans |
|
|
|
|
$ |
2,101 |
|
|
72% |
|
9.24% |
|
(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 September 30, 2023 |
|
|
15 largest loans as of September 30, 2023 |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State |
|
|
Balance |
|
|
Origination date LTV |
|
|
State |
|
|
|
Balance |
|
Origination date LTV |
|
(Dollars in millions) |
|
|
(Dollars in millions) |
||||||||||||
|
Texas |
|
$ |
780 |
|
|
73% |
|
|
Texas |
|
|
$ |
46 |
|
75% |
|
Georgia |
|
|
243 |
|
|
69% |
|
|
Texas |
|
|
|
44 |
|
72% |
|
Florida |
|
|
204 |
|
|
70% |
|
|
Tennessee |
|
|
|
40 |
|
72% |
|
Tennessee |
|
|
88 |
|
|
70% |
|
|
Texas |
|
|
|
39 |
|
75% |
|
Michigan |
|
|
82 |
|
|
71% |
|
|
Texas |
|
|
|
39 |
|
79% |
|
Ohio |
|
|
72 |
|
|
67% |
|
|
Texas |
|
|
|
37 |
|
80% |
|
Indiana |
|
|
66 |
|
|
72% |
|
|
Michigan |
|
|
|
37 |
|
62% |
|
Other States each <$65 million |
|
|
566 |
|
|
73% |
|
|
Florida |
|
|
|
35 |
|
72% |
|
Total |
|
$ |
2,101 |
|
|
72% |
|
|
Indiana |
|
|
|
34 |
|
76% |
|
|
|
|
|
|
|
|
|
|
Texas |
|
|
|
33 |
|
62% |
|
|
|
|
|
|
|
|
|
|
Texas |
|
|
|
33 |
|
67% |
|
|
|
|
|
|
|
|
|
|
Michigan |
|
|
|
33 |
|
79% |
|
|
|
|
|
|
|
|
|
|
Oklahoma |
|
|
|
31 |
|
78% |
|
|
|
|
|
|
|
|
|
|
Tennessee |
|
|
|
30 |
|
71% |
|
|
|
|
|
|
|
|
|
|
Georgia |
|
|
|
29 |
|
69% |
|
|
|
|
|
|
|
|
|
|
15 largest commercial real estate loans |
|
|
$ |
540 |
|
73% |
Institutional banking loans outstanding at September 30, 2023
|
Type |
Principal |
|
% of total |
|
|
|
|
(Dollars in millions) |
|
|
|
SBLOC |
$ |
1,008 |
|
53% |
|
IBLOC |
|
713 |
|
37% |
|
Advisor financing |
|
199 |
|
10% |
|
Total |
$ |
1,920 |
|
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 September 30, 2023
|
|
Principal amount |
|
% Principal to collateral |
|
|
|
(Dollars in millions) |
|||
|
|
$ |
12 |
|
25% |
|
|
|
9 |
|
39% |
|
|
|
9 |
|
44% |
|
|
|
9 |
|
62% |
|
|
|
9 |
|
95% |
|
|
|
8 |
|
77% |
|
|
|
8 |
|
71% |
|
|
|
8 |
|
28% |
|
|
|
7 |
|
75% |
|
|
|
7 |
|
34% |
|
Total and weighted average |
$ |
86 |
|
54% |
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 September 30, 2023, all were rated A- (Excellent) or better by AM BEST.
Direct lease financing by type as of September 30, 2023
|
|
|
Principal balance(1) |
|
% Total |
|
|
|
(Dollars in millions) |
|
|
|
Construction |
$ |
118 |
|
18% |
|
Waste management and remediation services |
|
91 |
|
14% |
|
Government agencies and public institutions(2) |
|
89 |
|
13% |
|
Real estate and rental and leasing |
|
58 |
|
9% |
|
Manufacturing |
|
41 |
|
6% |
|
Health care and social assistance |
|
34 |
|
5% |
|
Retail trade |
|
34 |
|
5% |
|
Finance and insurance |
|
31 |
|
5% |
|
Professional, scientific, and technical services |
|
27 |
|
4% |
|
Wholesale trade |
|
16 |
|
2% |
|
Transportation and warehousing |
|
11 |
|
2% |
|
Mining, quarrying, and oil and gas extraction |
|
11 |
|
2% |
|
Water supply and irrigation systems |
|
9 |
|
1% |
|
Other |
|
100 |
|
14% |
|
Total |
$ |
670 |
|
100% |
|
(1)Of the total $670.0 million of direct lease financing, $588.0 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 September 30, 2023
|
State |
|
Principal balance |
|
% Total |
|
|
|
(Dollars in millions) |
|
|
|
Florida |
$ |
100 |
|
15% |
|
Utah |
|
66 |
|
10% |
|
California |
|
60 |
|
9% |
|
Pennsylvania |
|
41 |
|
6% |
|
New Jersey |
|
38 |
|
6% |
|
New York |
|
35 |
|
5% |
|
North Carolina |
|
34 |
|
5% |
|
Texas |
|
31 |
|
5% |
|
Maryland |
|
31 |
|
5% |
|
Connecticut |
|
28 |
|
4% |
|
Idaho |
|
17 |
|
3% |
|
Washington |
|
15 |
|
2% |
|
Georgia |
|
14 |
|
2% |
|
Ohio |
|
13 |
|
2% |
|
Alabama |
|
11 |
|
2% |
|
Other States |
|
136 |
|
19% |
|
Total |
$ |
670 |
|
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 September 30, 2023 |
|
|
|
|
|
|
|
|
The Bancorp, Inc. |
10.92% |
|
15.53% |
|
16.04% |
|
15.53% |
|
The Bancorp Bank, National Association |
12.13% |
|
17.26% |
|
17.77% |
|
17.26% |
|
"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 |
|
Nine months ended |
||||||||
|
|
September 30, |
|
September 30, |
||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||
|
Selected operating ratios |
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets(1) |
|
2.71% |
|
|
1.69% |
|
|
2.66% |
|
|
1.69% |
|
Return on average equity(1) |
|
26.12% |
|
|
18.39% |
|
|
27.01% |
|
|
18.28% |
|
Net interest margin |
|
5.07% |
|
|
3.69% |
|
|
4.86% |
|
|
3.32% |
|
(1)Annualized |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per share table |
September 30, |
|
June 30, |
|
|
December 31, |
|
September 30, |
|||
|
|
2023 |
|
2023 |
|
2022 |
|
2022 |
||||
|
Book value per share |
$ |
14.36 |
|
$ |
13.74 |
|
$ |
12.46 |
|
$ |
11.81 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
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Loan quality table |
|
September 30, |
|
|
June 30, |
|
|
December 31, |
|
|
September 30, |
|
|
|
2023 |
|
2022 |
|
2022 |
|
2022 |
|||
|
|
|
(Dollars in thousands) |
|||||||||
|
Nonperforming loans to total loans |
|
0.30% |
|
|
0.28% |
|
|
0.33% |
|
|
0.16% |
|
Nonperforming assets to total assets |
|
0.46% |
|
|
0.47% |
|
|
0.50% |
|
|
0.35% |
|
Allowance for credit losses to total loans |
|
0.46% |
|
|
0.44% |
|
|
0.41% |
|
|
0.37% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans |
$ |
15,100 |
|
$ |
14,027 |
|
$ |
10,356 |
|
$ |
3,860 |
|
Loans 90 days past due still accruing interest |
|
677 |
|
|
563 |
|
|
7,775 |
|
|
4,415 |
|
Other real estate owned |
|
18,756 |
|
20,952 |
|
21,210 |
|
18,873 |
|||
|
Total nonperforming assets |
$ |
34,533 |
|
$ |
35,542 |
|
$ |
39,341 |
|
$ |
27,148 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross dollar volume (GDV) (1) |
Three months ended |
||||||||||
|
|
September 30, |
|
June 30, |
|
December 31, |
|
September 30, |
||||
|
|
2023 |
|
2023 |
|
2022 |
|
2022 |
||||
|
|
|
(Dollars in thousands) |
|||||||||
|
Prepaid and debit card GDV |
$ |
32,972,249 |
|
$ |
32,776,154 |
|
$ |
29,454,074 |
|
$ |
28,119,428 |
|
(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 September 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) |
6.7 |
% |
$ |
1,920 |
(24 |
%) |
(27 |
%) |
|||||||||||
|
Small business lending(4) |
7.0 |
% |
|
832 |
13 |
% |
12 |
% |
|||||||||||
|
Leasing |
7.1 |
% |
|
670 |
12 |
% |
8 |
% |
|||||||||||
|
Commercial real estate (non-SBA loans, at fair value) |
8.7 |
% |
|
253 |
nm |
nm |
|||||||||||||
|
Real estate bridge loans (recorded at book value) |
|
9.3 |
% |
|
|
1,848 |
|
24 |
% |
|
5 |
% |
|
|
|
|
|
||
|
Weighted average yield |
7.8 |
% |
$ |
5,523 |
Non-interest income |
||||||||||||||
|
% Growth |
|||||||||||||||||||
|
Deposits: Fintech solutions group |
Current quarter |
Year over year |
|||||||||||||||||
|
Prepaid and debit card issuance, and other payments |
2.5 |
% |
$ |
6,007 |
11 |
% |
nm |
$ |
24.1 |
12 |
% |
||||||||
|
(1)Average rates are for the three months ended September 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.
|
|
September 30, 2023 |
|
|
|
|
(Dollars in thousands) |
|
Federal Reserve Bank |
$ |
1,938,195 |
|
Federal Home Loan Bank |
|
731,500 |
|
Total lines of credit available |
$ |
2,669,695 |
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.
|
|
September 30, 2023 |
|
|
Insured |
|
91% |
|
Low balance accounts |
|
5% |
|
Other uninsured |
|
4% |
|
Total deposits |
|
100% |
Calculation of efficiency ratio(1)
|
|
Three months ended |
||||
|
|
September 30, |
|
December 31, |
||
|
|
2023 |
|
2022 |
||
|
|
(Dollars in thousands) |
||||
|
Net interest income |
$ |
88,882 |
|
$ |
76,760 |
|
Non-interest income |
|
26,780 |
|
|
25,740 |
|
Total revenue |
$ |
115,662 |
|
$ |
102,500 |
|
Non-interest expense |
$ |
47,459 |
|
$ |
43,475 |
|
|
|
|
|
|
|
|
Efficiency ratio |
|
41% |
|
|
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/20231024091378/en/