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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):  10/24/2019

 

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. [ ]

  

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, par value $1.00 per share   TBBK   Nasdaq Global Select

  

 

 

 

  

Item 2.02.    Results of Operations and Financial Condition

 

On October 24, 2019, The Bancorp, Inc. (the "Company") issued a press release regarding its earnings for the three and nine months ended September 30, 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   Press release

 

 

 

 

 

 

 

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: October 24, 2019       By:   /s/Paul Frenkiel                                                    
                Paul Frenkiel
                Chief Financial Officer and Secretary
                 
                 

 

  


 

(Back To Top)

Section 2: EX-99.1 (THE BANCORP, INC. REPORTS THIRD QUARTER 2019 FINANCIAL RESULTS)

Exhibit 99.1 

 

The Bancorp, Inc. Reports Third Quarter 2019 Financial Results

 

Wilmington, DE – October 24, 2019 – The Bancorp, Inc. ("The Bancorp") (NASDAQ: TBBK), a financial holding company, today reported financial results for the third quarter of 2019.

 

Highlights

 

·The Bancorp earned $0.36 diluted earnings per share ($0.38 adjusted diluted earnings per share excluding a third quarter 2019 SEC settlement of $1.4 million), representing a 62% increase over third quarter 2018. *

 

·Net interest margin increased to 3.35% for the quarter ended September 30, 2019, compared to 3.22% for the quarter ended September 30, 2018.

 

·Net interest income increased 23% to $37.6 million for the quarter ended September 30, 2019, compared to $30.6 million for the quarter ended September 30, 2018.

 

·Average loans and leases, including loans held for sale, increased 31% to $2.6 billion for the quarter ended September 30, 2019, compared to $2.0 billion for the quarter ended September 30, 2018.

 

·Prepaid card and related fees increased 22% to $16.1 million for the quarter ended September 30, 2019, compared to $13.2 million for the quarter ended September 30, 2018. Gross dollar volume, representing total spend on cards, increased 38%.

 

·ACH (Automated Clearing House), card and other payment processing fees increased 14%, to $2.6 million for the quarter ended September 30, 2019, compared to $2.3 million for the quarter ended September 30, 2018.

 

·SBLOC (securities-backed lines of credit) and IBLOC (insurance backed lines of credit) loans increased 18% year over year and 10% quarter over second quarter 2019 to $920.5 million at September 30, 2019.

 

·Small Business Administration (“SBA”) loans, including those held-for-sale, increased 22% year over year and 8% over second quarter 2019 to $559 million at September 30, 2019.

 

·The rate on $4.5 billion of average deposits and interest-bearing liabilities in the third quarter of 2019 was 0.96%. Average prepaid card deposits of $2.5 billion for third quarter 2019, reflected an increase of 18% over the $2.1 billion for the quarter ended September 30, 2018.

 

·Consolidated leverage ratio was 9.36% at September 30, 2019. The Bancorp and its subsidiary, The Bancorp Bank, remain well capitalized.

 

·Book value per common share at September 30, 2019 was $8.52 per share compared to $6.95 a year earlier, an increase of 22%.

 

* In the third quarter of 2018, The Bancorp reported $1.07 diluted earnings per share, which included a $65.0 million gain on sale on the safe harbor IRA portfolio. After applying the 26% tax rate in that period, subtracting the net gain of $48 million resulted in adjusted earnings per share of $0.23. The third quarter 2019 $0.38 adjusted earnings per share divided by the third quarter 2018 $0.23 adjusted earnings per share resulted in an increase of 62%.

 

Damian Kozlowski, The Bancorp’s Chief Executive Officer, said, “This quarter we experienced across the board increases in both spread and fee income driven by significantly higher loan balances, and continued acceleration in the year over year Gross Dollar Volume of payment transactions. Based on our current momentum, we now have better visibility into next year and have set a minimum target of $1.25 earnings per share for 2020.”

 

 

The Bancorp reported net income of $20.4 million, or $0.36 income per diluted share, for the quarter ended September 30, 2019, compared to net income of $61.3 million, or $1.07 income per diluted share, for the quarter ended September 30, 2018, which included approximately $0.84 earnings per share resulting from the sale of the Company’s safe harbor IRA portfolio. 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 9.36%, 25.09%, 25.64% and 25.09%, respectively, compared to well-capitalized minimums of 5%, 8%, 10% and 6.5%, respectively.

 

Recent Developments

 

On October 22, 2019, certain ACH transactions were returned from another financial institution, resulting in a receivable in the amount of $11.2 million on the books of The Bancorp Bank (“the Bank”), which amount is net of $5.5 million in funds on deposit which the Bank believes it can offset against the receivable. The returns resulted from the failure by an ACH customer to properly fund its disbursements. The Bank is working with the relevant parties to resolve the issue as soon as possible. Any amounts not recovered from those responsible parties or reimbursed by the Bank’s insurance carriers will result in a loss to the Bank.

 

Conference Call Webcast

 

You may access the LIVE webcast of The Bancorp's Quarterly Earnings Conference Call at 8:00 AM ET Friday, October 25, 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 4468437. 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 1, 2019 by dialing 855.859.2056, access code 4468437.

 

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 Securities Exchange Commission, 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, performance or achievements 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 earnings release, except as may be required under applicable law.

 

The Bancorp, Inc. Contact

Andres Viroslav

215-861-7990

[email protected]

 

 

Financial highlights
(unaudited)
             
   Three months ended  Nine months ended
   September 30,  September 30,
Condensed income statement  2019  2018  2019  2018
   (dollars in thousands except per share data)
             
Net interest income  $37,560   $30,632   $106,109   $90,240 
Provision for loan and lease losses   650    1,060    2,950    2,660 
Non-interest income                    
Service fees on deposit accounts   8    402    69    3,624 
ACH, card and other payment processing fees   2,590    2,281    7,414    6,275 
Prepaid card and debit card and related fees   16,134    13,204    48,137    41,559 
Net realized and unrealized gains on commercial loans originated for sale   13,704    8,999    24,319    20,274 
Change in value of investment in unconsolidated entity   —      (78)   —      (2,981)
Leasing related income   589    758    2,311    2,353 
Affinity fees   —      84    —      271 
Gain on sale of IRA portfolio   —      65,000    —      65,000 
Other non-interest income   490    320    1,379    730 
Total non-interest income   33,515    90,970    83,629    137,105 
Non-interest expense                    
Salaries and employee benefits   24,526    19,243    70,192    59,213 
Data processing expense   1,192    1,380    3,684    4,741 
Legal expense   1,466    1,610    4,324    5,811 
FDIC Insurance   860    2,241    4,884    7,389 
Software   3,199    3,593    9,180    9,879 
SEC settlement   1,400    —      1,400    —   
Lease termination expense   —      —      908    395 
Other non-interest expense   9,408    9,232    26,227    26,230 
Total non-interest expense   42,051    37,299    120,799    113,658 
Income from continuing operations before income taxes   28,374    83,243    65,989    111,027 
Income tax expense   7,975    21,942    17,585    29,550 
Net income from continuing operations   20,399    61,301    48,404    81,477 
Discontinued operations                    
Income (loss) from discontinued operations before income taxes   151    (370)   1,875    (264)
Income tax expense (benefit)   125    (346)   574    (345)
Net income (loss) from discontinued operations, net of tax   26    (24)   1,301    81 
Net income  $20,425   $61,277   $49,705   $81,558 
                     
Net income per share from continuing operations - basic  $0.36   $1.09   $0.85   $1.45 
Net income per share from discontinued operations - basic  $—     $—     $0.02   $—   
Net income per share - basic  $0.36   $1.09   $0.87   $1.45 
                     
Net income per share from continuing operations - diluted  $0.36   $1.07   $0.85   $1.43 
Net income per share from discontinued operations - diluted  $—     $—     $0.02   $—   
Net income per share - diluted  $0.36   $1.07   $0.87   $1.43 
Weighted average shares - basic   56,907,815    56,442,222    56,712,084    56,309,390 
Weighted average shares - diluted   57,413,297    57,103,301    57,152,371    57,084,844 
 

 

 

Balance sheet  September 30,  June 30,  December 31,  September 30,
   2019  2019  2018  2018
   (dollars in thousands)
Assets:            
Cash and cash equivalents                    
Cash and due from banks  $24,068   $27,450   $2,440   $2,245 
Interest earning deposits at Federal Reserve Bank   932,440    284,823    551,862    710,816 
Securities sold under agreements to resell   —      —      —      64,518 
     Total cash and cash equivalents   956,508    312,273    554,302    777,579 
                     
Investment securities, available-for-sale, at fair value   1,382,437    1,361,779    1,236,324    1,274,417 
Investment securities, held-to-maturity   84,399    84,414    84,432    84,433 
Commercial loans held for sale, at fair value   489,240    934,452    688,471    308,470 
Loans, net of deferred fees and costs   1,683,377    1,561,451    1,501,976    1,496,773 
Allowance for loan and lease losses   (10,360)   (9,989)   (8,653)   (8,092)
Loans, net   1,673,017    1,551,462    1,493,323    1,488,681 
Federal Home Loan Bank & Atlantic Community Bancshares stock   4,342    6,342    1,113    1,113 
Premises and equipment, net   17,857    17,380    18,895    17,686 
Accrued interest receivable   13,898    14,567    12,753    11,621 
Intangible assets, net   2,698    3,081    3,846    4,229 
Other real estate owned   —      —      —      405 
Deferred tax asset, net   13,006    14,574    21,622    40,991 
Investment in unconsolidated entity   49,431    58,012    59,273    64,212 
Assets held for sale from discontinued operations   162,098    169,109    197,831    226,026 
Other assets   94,605    76,123    65,726    60,337 
     Total assets  $4,943,536   $4,603,568   $4,437,911   $4,360,200 
                     
Liabilities:                    
Deposits                    
Demand and interest checking  $3,844,747   $3,964,905   $3,904,638   $3,540,605 
Savings and money market   25,950    26,841    31,076    317,453 
Time deposits   475,000    —      —      —   
     Total deposits   4,345,697    3,991,746    3,935,714    3,858,058 
                     
Securities sold under agreements to repurchase   93    93    93    158 
Short-term borrowings   —      45,000    —      —   
Subordinated debenture   13,401    13,401    13,401    13,401 
Long-term borrowings   41,166    41,334    41,674    41,841 
Other liabilities   59,005    53,862    40,253    54,868 
     Total liabilities  $4,459,362   $4,145,436   $4,031,135   $3,968,326 
                     
Shareholders' equity:                    
Common stock - authorized, 75,000,000 shares of $1.00 par value; 56,910,521 and 56,446,088 shares issued and outstanding at September 30, 2019 and 2018, respectively   56,911    56,875    56,446    56,446 
Treasury stock (100,000 shares)   (866)   (866)   (866)   (866)
Additional paid-in capital   370,113    368,771    366,181    365,749 
Accumulated earnings (deficit)   48,888    28,463    (817)   (7,936)
Accumulated other comprehensive income (loss)   9,128    4,889    (14,168)   (21,519)
Total shareholders' equity   484,174    458,132    406,776    391,874 
                     
     Total liabilities and shareholders' equity  $4,943,536   $4,603,568   $4,437,911   $4,360,200 
 

 

 

Average balance sheet and net interest income  Three months ended September 30, 2019  Three months ended September 30, 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 **  $2,608,427   $35,103    5.38%  $1,980,814   $24,708    4.99%
Leases - bank qualified*   14,067    252    7.17%   19,343    346    7.16%
Investment securities-taxable   1,429,222    10,485    2.93%   1,362,529    10,906    3.20%
Investment securities-nontaxable*   6,172    54    3.50%   8,145    63    3.09%
Interest earning deposits at Federal Reserve Bank   474,499    2,545    2.15%   445,765    2,239    2.01%
Federal funds sold and securities purchased under agreement to resell   —      —      —      64,186    480    2.99%
Net interest earning assets   4,532,387    48,439    4.27%   3,880,782    38,742    3.99%
                               
Allowance for loan and lease losses   (9,988)             (7,971)          
Loans held for sale from discontinued operations   145,347    1,609    4.43%   233,732    2,295    3.93%
Other assets   389,718              141,204           
   $5,057,464             $4,247,747           
                               
Liabilities and Shareholders' Equity:                              
Deposits:                              
Demand and interest checking  $3,920,984   $7,644    0.78%  $3,418,878   $6,224    0.73%
Savings and money market   26,444    52    0.79%   419,121    1,466    1.40%
Time   269,464    1,338    1.99%   —      —      0.00%
Total deposits   4,216,892    9,034    0.86%   3,837,999    7,690    0.80%
                               
Short-term borrowings   256,945    1,595    2.48%   25,602    148    2.31%
Securities sold under agreements to repurchase   93    —      0.00%   160    —      0.00%
Subordinated debentures   13,401    186    5.55%   13,401    186    5.55%
Total deposits and liabilities   4,487,331    10,815    0.96%   3,877,162    8,024    0.83%
                               
Other liabilities   98,980              8,374           
Total liabilities   4,586,311              3,885,536           
                               
Shareholders' equity   471,153              362,211           
   $5,057,464             $4,247,747           
Net interest income on tax equivalent basis*       $39,233             $33,013      
                               
Tax equivalent adjustment        64              86      
                               
Net interest income       $39,169             $32,927      
Net interest margin *             3.35%             3.22%
                               
* Full taxable equivalent basis, using a statutory rate of 21% for 2019 and 2018.                              
** Includes loans held for sale.                              

 

 

 

 

Average balance sheet and net interest income  Nine months ended September 30, 2019  Nine months ended September 30, 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 **  $2,365,317   $95,001    5.36%  $1,918,950   $69,451    4.83%
Leases - bank qualified*   15,755    947    8.01%   20,192    1,017    6.72%
Investment securities-taxable   1,394,234    32,649    3.12%   1,391,175    31,375    3.01%
Investment securities-nontaxable*   6,771    168    3.31%   8,907    201    3.01%
Interest earning deposits at Federal Reserve Bank   439,414    7,502    2.28%   468,691    6,166    1.75%
Federal funds sold and securities purchased under agreement to resell   —      —      —      64,234    1,369    2.84%
Net interest earning assets   4,221,491    136,267    4.30%   3,872,149    109,579    3.77%
                               
Allowance for loan and lease losses   (9,537)             (7,378)          
Loans held for sale from discontinued operations   157,630    5,293    4.48%   269,857    6,888    3.40%
Other assets   347,363              197,114           
   $4,716,947             $4,331,742           
                               
Liabilities and Shareholders' Equity:                              
Deposits:                              
Demand and interest checking  $3,901,661   $25,260    0.86%  $3,463,756   $15,547    0.60%
Savings and money market   28,073    129    0.61%   469,511    2,751    0.78%
Time   90,808    1,338    1.96%   —      —      0.00%
Total deposits   4,020,542    26,727    0.89%   3,933,267    18,298    0.62%
                               
Short-term borrowings   137,860    2,624    2.54%   17,367    261    2.00%
Securities sold under agreements to repurchase   92    —      0.00%   178    —      0.00%
Subordinated debentures   13,401    573    5.70%   13,401    524    5.21%
Total deposits and liabilities   4,171,895    29,924    0.96%   3,964,213    19,083    0.64%
                               
Other liabilities   99,577              9,517           
Total liabilities   4,271,472              3,973,730           
                               
Shareholders' equity   445,475              358,012           
   $4,716,947             $4,331,742           
Net interest income on tax equivalent basis*       $111,636             $97,384      
                               
Tax equivalent adjustment        234              256      
                               
Net interest income       $111,402             $97,128      
Net interest margin *             3.40%             3.15%
                               
* Full taxable equivalent basis, using a statutory rate of 21% for 2019 and 2018.                              
** Includes loans held for sale.                              
 

 

Allowance for loan and lease losses:  Nine months ended  Year ended   
   September 30,  September 30,  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   995    1,081    1,348      
SBA commercial mortgage   —      157    157      
Direct lease financing   391    531    637      
Other consumer loans   3    19    21      
Total   1,389    1,788    2,163      
                     
Recoveries:                    
SBA non-real estate   94    46    57      
SBA commercial mortgage   —      13    13      
Direct lease financing   51    64    64      
Other consumer loans   1    1    1      
Total   146    124    135      
Net charge-offs   1,243    1,664    2,028      
Provision charged to operations   2,950    2,660    3,585      
                     
Balance in allowance for loan and lease losses at end of period  $10,360   $8,092   $8,653      
Net charge-offs/average loans   0.05%   0.09%   0.10%     
Net charge-offs/average loans (annualized)   0.06%   0.11%   0.10%     
Net charge-offs/average assets   0.02%   0.04%   0.05%     
(1) Excludes activity from assets held for sale from discontinued operations.
                     
Loan portfolio:   September 30,      June 30,      December 31,     September 30,  
    2019    2019    2018    2018 
    (in thousands)
SBA non-real estate  $84,181   $75,475   $76,340   $74,408 
SBA commercial mortgage   209,008    189,427    165,406    166,432 
SBA construction   38,116    29,298    21,636    17,978 
SBA loans *   331,305    294,200    263,382    258,818 
Direct lease financing   412,755    407,907    394,770    395,976 
SBLOC / IBLOC**   920,463    837,672    785,303    778,552 
Other specialty lending   3,167    3,432    31,836    40,799 
Other consumer loans ***   6,388    7,898    16,302    12,172 
    1,674,078    1,551,109    1,491,593    1,486,317 
Unamortized loan fees and costs   9,299    10,342    10,383    10,456 
Total loans, net of deferred fees and costs  $1,683,377   $1,561,451   $1,501,976   $1,496,773 
                     
Small business lending portfolio:   September 30,      June 30,      December 31,     September 30,  
    2019    2019    2018    2018 
    (in thousands)
SBA loans, including deferred fees and costs   337,440    301,502    270,860    266,433 
SBA loans included in held-for-sale   222,007    215,064    199,977    193,372 
Total SBA loans  $559,447   $516,566   $470,837   $459,805 
 * The preceding table shows SBA loans and SBA loans held-for-sale at the dates indicated (in thousands).
** Securities Backed Lines of Credit (SBLOC) are collateralized by marketable securities, while Insurance Backed Lines of Credit (IBLOC) are collateralized by the cash surrender value of insurance policies.
*** Included in the table above under Other consumer loans are demand deposit overdrafts reclassified as loan balances totaling $771,000 and $7.2 million at September 30, 2019 and December 31, 2018, respectively.  Estimated overdraft charge-offs and recoveries are reflected in the allowance for loan and lease losses.
 

 

 

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, 2019              
The Bancorp, Inc. 9.36%   25.09%   25.64%   25.09%
The Bancorp Bank 9.09%   24.63%   25.18%   24.63%
"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   Nine months ended
    September 30,   September 30,
    2019   2018   2019   2018
Selected operating ratios:                
Return on average assets (1)   1.60%   5.72%   1.41%   2.52%
Return on average equity (1)   17.20%   67.12%   14.92%   30.46%
Net interest margin   3.35%   3.22%   3.40%   3.15%
                 
(1) Annualized                
                 
Book value per share table:   September 30,   March 31,   December 31,   September 30,
    2019   2019   2018   2018
Book value per share    $              8.52    $              7.70    $              7.22    $               6.95
                 
                 
Loan quality table:   September 30,   June 30,   December 31,   September 30,
    2019   2019   2018   2018
Nonperforming loans to total loans   0.55%   0.57%   0.36%   0.35%
Nonperforming assets to total assets   0.19%   0.19%   0.12%   0.13%
Allowance for loan and lease losses to total loans   0.62%   0.64%   0.58%   0.54%
                 
Nonaccrual loans    $            6,420    $            6,456    $            4,516    $             4,234
Loans 90 days past due still accruing interest                  2,788                  2,373                     954                   1,015
Other real estate owned                          -                          -                          -                      405
     Total nonperforming assets    $            9,208    $            8,829    $            5,470    $             5,654
                 
                 
                 
    Three months ended
    September 30,   June 30,   December 31,   September 30,
    2019   2019   2018   2018
    (in thousands)
Gross dollar volume (GDV) (2):                
Prepaid card GDV    $   17,264,890    $   16,611,551    $   13,526,647    $    12,525,527
                 
(2) Gross dollar volume represents the total dollar amount spent on prepaid cards issued by The Bancorp Bank.

 

 

 

 

Business line quarterly summary:
Quarter ended September 30, 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 **   4.1%    $       920   18%   40%    na   na  
SBA   5.7%             559   22%   33%    na   na  
Leasing   6.5%             413   4%   5%    $       0.6   nm  
Commercial real estate securitization   6.0%             267   nm   nm           13.7   nm  
Weighted average yield   5.2%    $    2,159                  
                           
Deposits                          
Payment solutions   0.9%    $    2,495   18%   nm    $     16.1   22%  
Card payment and ACH processing   0.7%             968   11%   nm             2.6   14%  
                           
* Loan categories based on period end balance and deposit categories based on average quarterly balances.
** Comprised of Securities Backed Lines of Credit (SBLOC), collateralized by marketable securities and Insurance Backed Lines of Credit (IBLOC), collateralized by the cash surrender value of insurance policies.  
 

 

 

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   (98)     
September 30, 2019 Bancorp book value**  $49      
           
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 banks discontinued loan portfolio.
** Approximately 37% of expected principal recoveries were from loans and properties pending liquidation or other resolution as of September 30, 2019.
           
Walnut Street portfolio composition as of September 30, 2019          
           
Collateral type   % of Portfolio      
Commercial real estate non-owner occupied          
Retail   51.5%     
Office   14.7%     
Other   3.8%     
Construction and land   19.7%     
First mortgage residential owner occupied   7.1%     
First mortgage residential non-owner occupied   3.2%     
Total   100.0%     
10 
 

 

 

Cumulative analysis of marks on discontinued commercial loan principal as of September 30, 2019
         
    Discontinued Cumulative % to original
    loan principal marks principal
    (dollars in millions)
         
Commercial loan discontinued principal before marks    $                94    
Florida mall held in discontinued other real estate owned                      42  $              (27)  
Previous mark charges                      14                  (14)  
Mark at September 30, 2019                        (6)  
Total    $              150  $              (47) 31%

 

Analysis of discontinued loan relationships as of September 30, 2019

 

                   
   Performing loan principal  Nonperforming loan principal  Total loan principal  Performing loan marks  Nonperforming loan marks  Total marks
   (in millions)
                   
6 loan relationships > $6 million  $47   $13   $60   $(3)  $(1)  $(4)
Loan relationships < $6 million   24    4    28    (2)   —      (2)
   $71   $17   $88   $(5)  $(1)  $(6)

 

Quarterly activity for discontinued commercial loan principal
     
    Commercial
    loan principal
    (in millions)
     
Commercial loan discontinued principal June 30, 2019 before marks  $                99
Quarterly paydowns                      (5)
Commercial loan discontinued principal September 30, 2019 after marks  $                94
Marks September 30, 2019                      (6)
Net commercial loan exposure September 30, 2019    $                88
Residential mortgages                      48
Net loans    $              136
Florida Mall in other real estate owned                      15
14 Properties in other real estate owned                      11
Total discontinued assets at September 30, 2019    $              162
11 
 

 

 

Discontinued commercial loan composition as of September 30, 2019
           
Collateral type   Unpaid principal balance Mark
September 30, 2019
Mark as % of portfolio  
    (dollars in millions)  
Commercial real estate - non-owner occupied:          
Retail     $                  4 (0.6) 13%  
Office    3 - -  
Other    35 (1.9) 5%  
Construction and land    12 (0.1) 0%  
Commercial non-real estate and industrial    9 (0.2) 2%  
1 to 4 family construction    11 (2.5) 23%  
First mortgage residential non-owner occupied    11 (0.3) 3%  
Commercial real estate owner occupied:          
Retail    7 - -  
Office   - - -  
Other   - - -  
Residential junior mortgage    1 - -  
Other    1 - -  
Total    $                94      
Less: mark                      (6)      
Net commercial loan exposure September 30, 2019    $                88  $             (5.6) 6%  

 

12 

 

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