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Section 1: 8-K (THE BANCORP, INC. FORM 8-K)


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported):  4/25/2019
 
The Bancorp, Inc.
(Exact name of registrant as specified in its charter)
 
Commission File Number:  000-51018
 
Delaware
  
23-3016517
(State or other jurisdiction of
  
(IRS Employer
incorporation)
  
Identification No.)
 
409 Silverside Road
Wilmington, DE 19809
(Address of principal executive offices, including zip code)
 
302-385-5000
(Registrant’s telephone number, including area code)
 
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
[  ]   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ]   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ]   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  [ ]


 
  
Item 2.02.    Results of Operations and Financial Condition
 
On April 25, 2019, The Bancorp, Inc. (the "Company") issued a press release regarding its earnings for the three months ended March 31, 2019. A copy of this press release is furnished with this report as exhibit 99.1. The information in this Current Report, including the exhibit hereto, is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.
  
Item 9.01.    Financial Statements and Exhibits
 
(d) Exhibits
 
The exhibit furnished as part of this Current Report on Form 8-K is identified in the Exhibit Index immediately following the signature page of this report. Such Exhibit Index is incorporated herein by reference.
 
 

 
 
 EXHIBIT INDEX
 
Exhibit No.
  
Description
 
EX-99.1
  



 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
 
The Bancorp, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Date: April 25, 2019
 
 
 
By:
 
/s/Paul Frenkiel                                                    
 
 
 
 
 
 
 
 
Paul Frenkiel
 
 
 
 
 
 
 
 
Chief Financial Officer and Secretary
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  


(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)


Exhibit 99.1

The Bancorp, Inc. Reports First Quarter 2019 Financial Results

Wilmington, DE – April 25, 2019 – The Bancorp, Inc. ("The Bancorp") (NASDAQ: TBBK), a financial holding company, today reported financial results for the first quarter 2019.

Highlights

·
Diluted earnings per share increased to $0.32 for the quarter ended March 31, 2019, compared to $0.25 for the quarter ended March 31, 2018, an increase of 27%.

·
Net income increased to $17.9 million for the quarter ended March 31, 2019, compared to $14.1 million for the quarter ended March 31, 2018, an increase of 27%.

·
Net interest margin increased to 3.41% for the quarter ended March 31, 2019, compared to 3.12% for the quarter ended March 31, 2018.

·
Net interest income increased 13% to $34.0 million for the quarter ended March 31, 2019, compared to $30.1 million for the quarter ended March 31, 2018.

·
Average loans and leases, including loans held for sale, increased 16% to $2.28 billion for the quarter ended March 31, 2019, compared to $1.97 billion for the quarter ended March 31, 2018.

·
Prepaid card fees increased to $16.2 million for the quarter ended March 31, 2019, or 13%, compared to $14.3 million for the quarter ended March 31, 2018.

·
ACH (Automated Clearing House), card and other payment processing fees increased 36%, to $2.3 million for the quarter ended March 31, 2019, compared to $1.7 million for the quarter ended March 31, 2018.

·
Small Business Administration (“SBA”) loans increased 16% to $493.7 million at March 31, 2019, compared to $424.5 million at March 31, 2018.

·
The rate on $3.92 billion of average deposits and interest-bearing liabilities in the first quarter of 2019 was 0.98%. Average prepaid deposits of $2.54 billion for first quarter 2019 reflected an increase of 14.7% compared to $2.22 billion for the quarter ended March 31, 2018.

·
Consolidated leverage ratio was 9.9% at March 31, 2019. The Bancorp and its subsidiary, The Bancorp Bank, remain well capitalized.

·
Book value per common share at March 31, 2019 was $7.70 per share.

Damian Kozlowski, The Bancorp’s Chief Executive Officer, said, “Our strategic agenda in 2019 encompasses nine items that should further position our institution for revenue growth and profitability. Most of the initiatives focus on new products or reengineering of our platform to be best in class and highly efficient. The balance of initiatives include finishing our remediation process with our regulators and building a stronger community with all our Bancorp partners. Impact from all these initiatives should mostly be felt in increased revenue growth as expenses remain rigorously managed and reengineering has improved productivity and reduced unit costs in many areas.”

The Bancorp reported net income of $17.9 million, or $0.32 income per diluted share, for the quarter ended March 31, 2019, compared to net income of $14.1 million, or $0.25 income per diluted share, for the quarter ended March 31, 2018.  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 9.90%, 23.61%, 24.15% and 23.61%, respectively, compared to well-capitalized minimums of 5%, 8%, 10% and 6.5%, respectively.


1


Conference Call Webcast

You may access the LIVE webcast of The Bancorp's Quarterly Earnings Conference Call at 8:00 AM ET Friday, April 26, 2019 by clicking on the webcast link on The Bancorp's homepage at www.thebancorp.com. Or, you may dial 844.775.2543, access code 1496107.  You may listen to the replay of the webcast following the live call on The Bancorp's investor relations website or telephonically until Friday, May 3, 2019 by dialing 855.859.2056, access code 1496107.

About The Bancorp

The Bancorp, Inc. (NASDAQ: TBBK) is dedicated to serving the unique needs of non-bank financial service companies, ranging from entrepreneurial start-ups to those on the Fortune 500. The company’s only subsidiary, The Bancorp Bank (Member FDIC, Equal Housing Lender), has been repeatedly recognized in the payments industry as the Top Issuer of Prepaid Cards (US), a top merchant sponsor bank and a top ACH originator. Specialized lending distinctions include National Preferred SBA Lender, a leading provider of securities-backed lines of credit, and one of the few bank-owned commercial vehicle leasing groups in the nation. For more information please visit www.thebancorp.com.

Forward-Looking Statements

Statements in this earnings release regarding The Bancorp’s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. These statements may be identified by the use of forward-looking terminology, including but not limited to the words “may,” “believe,” “will,” “expect,” “look,” “anticipate,” “estimate,” “continue,” or similar words.  For further discussion of the risks and uncertainties to which these forward-looking statements may be subject, see The Bancorp’s filings with the SEC, including the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of those filings. These risks and uncertainties could cause actual results to differ materially from those projected in the forward-looking statements. 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 presentation, except as may be required under applicable law.

The Bancorp, Inc. Contact
Andres Viroslav
215-861-7990
aviroslav@thebancorp.com
2


Financial highlights
 
(unaudited)
 
                   
   
Three months ended
   
Year ended
 
   
March 31,
   
December 31,
 
Condensed income statement
 
2019
   
2018
   
2018
 
   
(dollars in thousands except per share data)
 
                   
Net interest income
 
$
34,010
   
$
30,074
   
$
120,849
 
Provision for loan and lease losses
   
1,700
     
700
     
3,585
 
Non-interest income
                       
Service fees on deposit accounts
   
47
     
1,576
     
3,622
 
ACH, card and other payment processing fees
   
2,303
     
1,692
     
8,653
 
Prepaid card fees
   
16,163
     
14,282
     
54,627
 
Net realized and unrealized gains on commercial
                       
   loans originated for sale
   
10,763
     
11,729
     
20,498
 
Gain on sale of investment securities
   
-
     
26
     
41
 
Change in value of investment in unconsolidated entity
   
-
     
(1,171
)
   
(3,689
)
Leasing income
   
695
     
487
     
3,071
 
Affinity fees
   
-
     
102
     
281
 
Gain on sale of IRA portfolio
   
-
     
-
     
65,000
 
Other non-interest income
   
394
     
372
     
1,691
 
Total non-interest income
   
30,365
     
29,095
     
153,795
 
Non-interest expense
                       
Salaries and employee benefits
   
23,840
     
21,073
     
79,816
 
Data processing expense
   
1,269
     
2,005
     
6,187
 
Legal expense
   
1,324
     
2,431
     
7,845
 
FDIC Insurance
   
1,929
     
2,219
     
8,819
 
Software
   
2,921
     
3,291
     
13,304
 
Losses and write downs on other real estate owned
   
-
     
45
     
-
 
Civil money penalty
   
-
     
(290
)
   
(290
)
Prepaid relationship exit expense
   
-
     
-
     
672
 
Lease termination expense
   
-
     
-
     
395
 
Other non-interest expense
   
7,946
     
8,275
     
34,530
 
Total non-interest expense
   
39,229
     
39,049
     
151,278
 
Income from continuing operations before income taxes
   
23,446
     
19,420
     
119,781
 
Income tax expense
   
6,035
     
5,399
     
32,241
 
Net income from continuing operations
   
17,411
     
14,021
     
87,540
 
Discontinued operations
                       
Income from discontinued operations before income taxes
   
805
     
156
     
1,491
 
Income tax expense
   
286
     
37
     
354
 
Net income from discontinued operations, net of tax
   
519
     
119
     
1,137
 
Net income available to common shareholders
 
$
17,930
   
$
14,140
   
$
88,677
 
                         
Net income per share from continuing operations - basic
 
$
0.31
   
$
0.25
   
$
1.55
 
Net income per share from discontinued operations - basic
 
$
0.01
   
$
-
   
$
0.02
 
Net income per share - basic
 
$
0.32
   
$
0.25
   
$
1.57
 
                         
Net income per share from continuing operations - diluted
 
$
0.31
   
$
0.25
   
$
1.53
 
Net income per share from discontinued operations - diluted
 
$
0.01
   
$
-
   
$
0.02
 
Net income per share - diluted
 
$
0.32
   
$
0.25
   
$
1.55
 
Weighted average shares - basic
   
56,522,015
     
56,141,830
     
56,343,845
 
Weighted average shares - diluted
   
56,876,662
     
57,023,121
     
57,068,306
 
3


Balance sheet
 
March 31,
   
December 31,
   
September 30,
   
March 31,
 
   
2019
   
2018
   
2018
   
2018
 
   
(dollars in thousands)
 
Assets:
                       
Cash and cash equivalents
                       
Cash and due from banks
 
$
11,678
   
$
2,440
   
$
2,245
   
$
1,999
 
Interest earning deposits at Federal Reserve Bank
   
714,514
     
551,862
     
710,816
     
508,847
 
Securities sold under agreements to resell
   
-
     
-
     
64,518
     
64,312
 
     Total cash and cash equivalents
   
726,192
     
554,302
     
777,579
     
575,158
 
                                 
Investment securities, available-for-sale, at fair value
   
1,368,602
     
1,236,324
     
1,274,417
     
1,381,020
 
Investment securities, held-to-maturity
   
84,428
     
84,432
     
84,433
     
86,370
 
Commercial loans held for sale, at fair value
   
570,426
     
688,471
     
308,470
     
349,806
 
Loans, net of deferred fees and costs
   
1,510,395
     
1,501,976
     
1,493,932
     
1,459,881
 
Allowance for loan and lease losses
   
(9,954
)
   
(8,653
)
   
(8,092
)
   
(7,285
)
Loans, net
   
1,500,441
     
1,493,323
     
1,485,840
     
1,452,596
 
Federal Home Loan Bank & Atlantic Community Bancshares stock
   
1,113
     
1,113
     
1,113
     
991
 
Premises and equipment, net
   
18,056
     
18,895
     
17,686
     
19,052
 
Accrued interest receivable
   
13,907
     
12,753
     
11,621
     
11,778
 
Intangible assets, net
   
3,463
     
3,846
     
4,229
     
4,995
 
Other real estate owned
   
-
     
-
     
405
     
405
 
Deferred tax asset, net
   
18,423
     
21,622
     
40,991
     
38,139
 
Investment in unconsolidated entity
   
58,258
     
59,273
     
64,212
     
70,016
 
Assets held for sale from discontinued operations
   
188,025
     
197,831
     
226,026
     
289,038
 
Other assets
   
75,642
     
65,726
     
63,178
     
89,736
 
     Total assets
 
$
4,626,976
   
$
4,437,911
   
$
4,360,200
   
$
4,369,100
 
                                 
Liabilities:
                               
Deposits
                               
Demand and interest checking
 
$
3,993,828
   
$
3,904,638
   
$
3,540,605
   
$
3,461,881
 
Savings and money market
   
31,470
     
31,076
     
317,453
     
493,288
 
     Total deposits
   
4,025,298
     
3,935,714
     
3,858,058
     
3,955,169
 
                                 
Securities sold under agreements to repurchase
   
93
     
93
     
158
     
182
 
Subordinated debenture
   
13,401
     
13,401
     
13,401
     
13,401
 
Long-term borrowings
   
41,499
     
41,674
     
41,841
     
42,157
 
Other liabilities
   
111,905
     
40,253
     
54,868
     
28,299
 
     Total liabilities
 
$
4,192,196
   
$
4,031,135
   
$
3,968,326
   
$
4,039,208
 
                                 
Shareholders' equity:
                               
Common stock - authorized, 75,000,000 shares of $1.00 par value; 56,568,004 and 56,307,088 shares issued and outstanding at March 31, 2019 and 2018, respectively
   
56,568
     
56,446
     
56,446
     
56,307
 
Treasury stock (100,000 shares)
   
(866
)
   
(866
)
   
(866
)
   
(866
)
Additional paid-in capital
   
367,483
     
366,181
     
365,749
     
363,605
 
Accumulated earnings (deficit)
   
17,113
     
(817
)
   
(7,936
)
   
(75,345
)
Accumulated other comprehensive loss
   
(5,518
)
   
(14,168
)
   
(21,519
)
   
(13,809
)
Total shareholders' equity
   
434,780
     
406,776
     
391,874
     
329,892
 
                                 
     Total liabilities and shareholders' equity
 
$
4,626,976
   
$
4,437,911
   
$
4,360,200
   
$
4,369,100
 
                                 
4



Average balance sheet and net interest income
 
Three months ended March 31, 2019
   
Three months ended March 31, 2018
 
   
(dollars in thousands)
 
   
Average
         
Average
   
Average
         
Average
 
Assets:
 
Balance
   
Interest
   
Rate
   
Balance
   
Interest
   
Rate
 
Interest earning assets:
                                   
Loans net of deferred fees and costs **
 
$
2,266,834
   
$
30,161
     
5.32
%
 
$
1,947,320
   
$
23,039
     
4.73
%
Leases - bank qualified*
   
17,793
     
428
     
9.62
%
   
21,036
     
334
     
6.35
%
Investment securities-taxable
   
1,303,491
     
10,530
     
3.23
%
   
1,375,568
     
9,699
     
2.82
%
Investment securities-nontaxable*
   
7,546
     
59
     
3.13
%
   
9,893
     
75
     
3.03
%
Interest earning deposits at Federal Reserve Bank
   
423,024
     
2,502
     
2.37
%
   
502,233
     
1,832
     
1.46
%
Federal funds sold and securities purchased under
                                               
  agreement to resell
   
-
     
-
     
-
     
64,216
     
414
     
2.58
%
Net interest earning assets
   
4,018,688
     
43,680
     
4.35
%
   
3,920,266
     
35,393
     
3.61
%
                                                 
Allowance for loan and lease losses
   
(8,638
)
                   
(6,976
)
               
Loans held for sale from discontinued operations
   
173,800
     
2,025
     
4.66
%
   
276,370
     
2,527
     
3.66
%
Other assets
   
234,174
                     
221,433
                 
   
$
4,418,024
                   
$
4,411,093
                 
                                                 
Liabilities and Shareholders' Equity:
                                               
Deposits:
                                               
Demand and interest checking
 
$
3,798,837
   
$
8,833
     
0.93
%
 
$
3,535,791
   
$
4,301
     
0.49
%
Savings and money market
   
31,392
     
37
     
0.47
%
   
487,380
     
668
     
0.55
%
Total deposits
   
3,830,229
     
8,870
     
0.93
%
   
4,023,171
     
4,969
     
0.49
%
                                                 
Short-term borrowings
   
74,386
     
503
     
2.70
%
   
24,844
     
104
     
1.67
%
Securities sold under agreements to repurchase
   
90
     
-
     
0.00
%
   
205
     
-
     
0.00
%
Subordinated debentures
   
13,401
     
195
     
5.82
%
   
13,401
     
160
     
4.78
%
Total deposits and liabilities
   
3,918,106
     
9,568
     
0.98
%
   
4,061,621
     
5,233
     
0.52
%
                                                 
Other liabilities
   
79,140
                     
22,452
                 
Total liabilities
   
3,997,246
                     
4,084,073
                 
                                                 
Shareholders' equity
   
420,778
                     
327,020
                 
   
$
4,418,024
                   
$
4,411,093
                 
Net interest income on tax equivalent basis*
         
$
36,137
                   
$
32,687
         
                                                 
Tax equivalent adjustment
           
102
                     
86
         
                                                 
Net interest income
         
$
36,035
                   
$
32,601
         
Net interest margin *
                   
3.41
%
                   
3.12
%
 
                                               
* Full taxable equivalent basis, using a statutory rate of 21% for 2019 and 2018.
 
** Includes loans held for sale.
 
5


Allowance for loan and lease losses:
 
Three months ended
   
Year ended
       
   
March 31,
   
March 31,
   
December 31,
       
   
2019
   
2018
   
2018
       
   
(dollars in thousands)
       
                         
Balance in the allowance for loan and lease losses at beginning of period (1)
 
$
8,653
   
$
7,096
   
$
7,096
       
                               
Loans charged-off:
                             
SBA non-real estate
   
322
     
388
     
1,348
       
SBA commercial mortgage
   
-
     
157
     
157
       
Direct lease financing
   
106
     
56
     
637
       
Other consumer loans
   
-
     
14
     
21
       
Total
   
428
     
615
     
2,163
       
                               
Recoveries:
                             
SBA non-real estate
   
17
     
40
     
57
       
SBA commercial mortgage
   
-
     
6
     
13
       
Direct lease financing
   
12
     
58
     
64
       
Other consumer loans
   
-
     
-
     
1
       
Total
   
29
     
104
     
135
       
Net charge-offs
   
399
     
511
     
2,028
       
Provision charged to operations
   
1,700
     
700
     
3,585
       
                               
Balance in allowance for loan and lease losses at end of period
 
$
9,954
   
$
7,285
   
$
8,653
       
Net charge-offs/average loans
   
0.02
%
   
0.03
%
   
0.10
%
     
Net charge-offs/average loans (annualized)
   
0.07
%
   
0.11
%
   
0.10
%
     
Net charge-offs/average assets
   
0.01
%
   
0.01
%
   
0.05
%
     
(1) Excludes activity from assets held for sale from discontinued operations.
              
 
                               
Loan portfolio:
 
March 31,
   
December 31,
   
September 30,
   
March 31,
 

 
2019
   
2018
   
2018
   
2018
 
   
(in thousands)
 
                                 
SBA non-real estate
 
$
76,112
   
$
76,340
   
$
74,408
   
$
75,225
 
SBA commercial mortgage
   
179,397
     
165,406
     
166,432
     
149,227
 
SBA construction
   
23,979
     
21,636
     
17,978
     
20,143
 
Total SBA loans
   
279,488
     
263,382
     
258,818
     
244,595
 
Direct lease financing
   
384,930
     
394,770
     
393,135
     
382,284
 
SBLOC
   
791,986
     
785,303
     
778,552
     
759,369
 
Other specialty lending
   
34,425
     
31,836
     
40,799
     
45,729
 
Other consumer loans
   
9,301
     
16,302
     
12,172
     
17,416
 
     
1,500,130
     
1,491,593
     
1,483,476
     
1,449,393
 
Unamortized loan fees and costs
   
10,265
     
10,383
     
10,456
     
10,488
 
Total loans, net of deferred fees and costs
 
$
1,510,395
   
$
1,501,976
   
$
1,493,932
   
$
1,459,881
 
                                 
Small business lending portfolio:
 
March 31,
   
December 31,
   
September 30,
   
March 31,
 
   
2019
   
2018
   
2018
   
2018
 
   
(in thousands)
 
                                 
SBA loans, including deferred fees and costs
   
286,814
     
270,860
     
266,433
     
252,457
 
SBA loans included in HFS
   
206,901
     
199,977
     
193,372
     
172,030
 
Total SBA loans
 
$
493,715
   
$
470,837
   
$
459,805
   
$
424,487
 

6


Capital ratios:
 
Tier 1 capital
   
Tier 1 capital
   
Total capital
   
Common equity
 
   
to average
   
to risk-weighted
   
to risk-weighted
   
tier 1 to risk
 
   
assets ratio
   
assets ratio
   
assets ratio
   
weighted assets
 
As of March 31, 2019
                       
The Bancorp, Inc.
   
9.90
%
   
23.64
%
   
24.18
%
   
23.64
%
The Bancorp Bank
   
9.63
%
   
23.17
%
   
23.71
%
   
23.17
%
"Well capitalized" institution (under FDIC regulations)
   
5.00
%
   
8.00
%
   
10.00
%
   
6.50
%
                                 
As of December 31, 2018
                               
The Bancorp, Inc.
   
10.11
%
   
20.64
%
   
21.07
%
   
20.64
%
The Bancorp Bank
   
9.70
%
   
20.18
%
   
20.61
%
   
20.18
%
"Well capitalized" institution (under FDIC regulations)
   
5.00
%
   
8.00
%
   
10.00
%
   
6.50
%


   
Three months ended
   
Year ended
       
   
March 31,
   
December 31,
       
   
2019
   
2018
   
2018
       
Selected operating ratios:
                       
Return on average assets (1)
   
1.65
%
   
1.30
%
   
2.07
%
     
Return on average equity (1)
   
17.28
%
   
17.54
%
   
24.26
%
     
Net interest margin
   
3.41
%
   
3.12
%
   
3.19
%
     
                               
(1) Annualized
                             
                               
Book value per share table:
 
March 31,
   
December 31,
   
September 30,
   
March 31,
 
   
2019
   
2018
   
2018
   
2018
 
Book value per share
 
$
7.70
   
$
7.22
   
$
6.95
   
$
5.87
 
                                 
                                 
Loan quality table:
 
March 31,
   
December 31,
   
September 30,
   
March 31,
 
   
2019
   
2018
   
2018
   
2018
 
Nonperforming loans to total loans (2)
   
0.55
%
   
0.36
%
   
0.35
%
   
0.42
%
Nonperforming assets to total assets (2)
   
0.18
%
   
0.12
%
   
0.13
%
   
0.15
%
Allowance for loan and lease losses to total loans
   
0.66
%
   
0.58
%
   
0.54
%
   
0.50
%
                                 
Nonaccrual loans
 
$
5,863
   
$
4,516
   
$
4,234
   
$
3,516
 
Other real estate owned
   
-
     
-
     
405
     
405
 
     Total nonperforming assets
 
$
5,863
   
$
4,516
   
$
4,639
   
$
3,921
 
                                 
Loans 90 days past due still accruing interest
 
$
2,483
   
$
954
   
$
1,015
   
$
2,643
 
                                 
(2) Nonperforming loan and asset ratios include nonaccrual loans and loans 90 days past due still accruing interest.
 
                                 
   
Three months ended
 
   
March 31,
   
December 31,
   
September 30,
   
March 31,
 
   
2019
   
2018
   
2018
   
2018
 
   
(in thousands)
 
Gross dollar volume (GDV) (3):
                               
Prepaid card GDV
 
$
16,937,325
   
$
13,526,647
   
$
12,525,527
   
$
13,402,496
 
                                 
(3) Gross dollar volume represents the total dollar amount spent on prepaid and debit cards issued by The Bancorp Bank.
 

7

Business line quarterly summary:
 
Quarter ended March 31, 2019
     
(dollars in millions)
                                     
         
Balances
   
Non interest income
 
               
% Growth
         
% Growth
 
Major business lines
 
Average approximate rates
   
Balances*
   
Year over year
   
Linked quarter annualized
   
Current quarter
   
Year over year
 
Loans
                                   
Institutional banking **
   
4.4
%
 
$
792
     
4
%
   
4
%
 
na
   
na
 
SBA
   
5.6
%
   
494
     
16
%
   
19
%
 
na
   
na
 
Leasing
   
6.3
%
   
395
     
-
     
-
   
$
0.7
     
43
%
Commercial real estate securitization
   
5.9
%
   
364
   
nm
   
nm
     
10.8
     
-
 
Weighted average yield
   
5.3
%
 
$
2,045
                                 
                                                 
Deposits
                                               
Payment solutions (primarily prepaid) ***
   
1.2
%
 
$
2,542
     
15
%
 
nm
   
$
16.2
     
13
%
Card payment and ACH processing
   
0.8
%
   
893
     
-
   
nm
     
2.3
     
36
%
                                                 
* Loan categories based on period end balance and Payment Solutions based on average quarterly balances.
 
** Comprised of SBLOC loans.
 
*** Includes $900,000 of fee income related to 2018 incentives.
 



8



Analysis of Walnut Street* marks:
           
             
   
Loan activity
   
Marks
 
   
(dollars in millions)
 
             
Original Walnut Street loan balance, December 31, 2014
 
$
267
       
Marks through December 31, 2014 sale date
   
(58
)
 
$
(58
)
Sales price of Walnut Street
   
209
         
Equity investment from independent investor
   
(16
)
       
December 31, 2014 Bancorp book value
   
193
         
Additional marks 2015 - 2018
   
(46
)
   
(46
)
2019 Marks
   
-
     
-
 
Payments received
   
(89
)
       
March 31, 2019 Bancorp book value**
 
$
58
         
                 
Total marks
         
$
(104
)
Divided by:
               
Original Walnut Street loan balance
         
$
267
 
Percentage of total mark to original balance
           
39
%
                 
* Walnut Street is the investment in unconsolidated entity on the balance sheet which reflects the Bank's investment in a securitization of certain loans from the Bank's discontinued loan portfolio.
 
** Approximately 44% of expected principal recoveries were from loans and properties pending liquidation or other resolution as of March 31, 2019.
 
                 
Walnut Street portfolio composition as of March 31, 2019
         
                 
Collateral type
 
% of Portfolio
         
Commercial real estate non-owner occupied
               
Retail
   
52.2
%
       
Office
   
13.2
%
       
Other
   
5.9
%
       
Construction and land
   
18.4
%
       
Commercial non real estate and industrial
   
0.5
%
       
First mortgage residential owner occupied
   
6.1
%
       
First mortgage residential non-owner occupied
   
2.8
%
       
Other
   
0.9
%
       
Total
   
100.0
%
       
9


Cumulative analysis of marks on discontinued commercial loan principal as of March 31, 2019
                  
   
Discontinued
   
Cumulative
 
% to original
   
loan principal
   
marks
 
principal
   
(dollars in millions)
                  
Commercial loan discontinued principal before marks
 
$
115
          
Florida mall held in discontinued other real estate owned
   
42
   
$
27
   
Previous mark charges
   
14
     
14
   
Mark at March 31, 2019
           
7
   
Total
 
$
171
   
$
48
 
28%

Analysis of discontinued loan relationships as of March 31, 2019

   
Performing
   
Nonperforming
   
Total
   
Performing
   
Nonperforming
   
Total
 
   
loan principal
   
loan principal
   
loan principal
   
loan marks
   
loan marks
   
marks
 
   
(in millions)
 
                                     
6 loan relationships > $7 million
 
$
61
   
$
14
   
$
75
   
$
3
   
$
2
   
$
5
 
Loan relationships < $7 million
   
28
     
5
     
33
     
2
     
-
     
2
 
   
$
89
   
$
19
   
$
108
   
$
5
   
$
2
   
$
7
 

Quarterly activity for discontinued commercial loan principal
 
       
   
Commercial
 
   
loan principal
 
   
(in millions)
 
       
Commercial loan discontinued principal December 31, 2018 before marks
 
$
125
 
Quarterly paydowns
   
(10
)
Commercial loan discontinued principal March 31, 2019 before marks
 
$
115
 
Marks March 31, 2019
   
(7
)
Net commercial loan exposure March 31, 2019
 
$
108
 
Residential mortgages
   
51
 
Net loans
 
$
159
 
Florida Mall in other real estate owned
   
15
 
18 Properties in other real estate owned
   
14
 
Total discontinued assets at March 31, 2019
 
$
188
 
10


Discontinued commercial loan composition March 31, 2019
 
                   
Collateral type
 
Unpaid principal balance
   
Mark
March 31, 2019
   
Mark as % of portfolio
 
   
(dollars in millions)
 
Commercial real estate - non-owner occupied:
                 
Retail
 
$
4
   
$
0.6
     
14
%
Office
   
4
     
0.0
     
-
 
Other
   
38
     
1.9
     
5
%
Construction and land
   
24
     
0.1
     
-
 
Commercial non-real estate and industrial
   
10
     
0.5
     
4
%
1 to 4 family construction
   
13
     
3.8
     
30
%
First mortgage residential non-owner occupied
   
12
     
0.4
     
4
%
Commercial real estate owner occupied:
                       
Retail
   
8
     
-
     
-
 
Office
   
-
     
-
     
4
%
Other
   
-
     
-
     
1
%
Residential junior mortgage
   
1
     
-
     
-
 
Other
   
1
     
-
     
-
 
Total
 
$
115
                 
Less: mark
   
(7
)
               
Net commercial loan exposure March 31, 2019
 
$
108
   
$
7.3
     
6
%

11
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