Press Release

The Bancorp, Inc. Reports Third Quarter 2019 Financial Results

Company Release - 10/24/2019 6:11 PM ET

WILMINGTON, Del.--(BUSINESS WIRE)-- 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

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 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%

 

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

Nonperforming

Total

Performing

Nonperforming

Total

loan principal

loan principal

loan principal

loan marks

loan marks

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

 

 

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)

%

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%

 

 

The Bancorp, Inc. Contact
Andres Viroslav
215-861-7990
[email protected]

Source: The Bancorp, Inc.