GRANDSOUTH BANCORPORATION Rapport de gestion et analyse de la situation financière et des résultats d'exploitation (formulaire 10-K)
Bancorp : Reports Second Quarter 2022 Financial Results and Updates Full Year 2022 Guidance – Form 8-K

The Bancorp, Inc. Reports Second Quarter 2022 Financial Results and Updates Full Year 2022 Guidance

Wilmington, DE – July 28, 2022 – The Bancorp, Inc. (“The Bancorp” or “we”) (NASDAQ: TBBK), a financial holding company, today reported financial results for the second quarter of 2022.

Highlights

· For the quarter ended June 30, 2022, The Bancorp earned pre-tax income of $41.1 million, compared to $37.0 million for the quarter ended June 30, 2021. The 2021 quarter included $4.3 million of Payroll Protection Program (“PPP”) related interest and fees, substantially all of which were eliminated in the current year quarter. For those respective periods, net income amounted to $30.4 million, or $0.53 diluted earnings per share, compared to net income of $29.4 million, or $0.50 diluted earnings per share.
· Return on assets and equity for the quarter ended June 30, 2022 amounted to 1.7% and 19%, respectively, compared to 1.7% and 19%, respectively, for the quarter ended June 30, 2021 (all percentages “annualized”).
· Net interest margin amounted to 3.17% for the quarter ended June 30, 2022, compared to 3.19% for the quarter ended June 30, 2021.
· Net interest income was $54.6 million for the quarter ended June 30, 2022, compared to $54.1 million for the quarter ended June 30, 2021. The 2021 quarter included $4.3 million of PPP related interest and fees, substantially all of which were eliminated in the current year quarter.
· Excluding commercial loans, at fair value, which were originally generated for sale, total loans increased to $4.75 billion at June 30, 2022, compared to $4.16 billion at March 31, 2022 and $2.92 billion at June 30, 2021. Those increases reflected growth of 13% quarter over quarter and 61% year over year. Those percentage increases exclude the impact of $55.6 million of June 30, 2022 balances previously included in discontinued assets which were reclassified to loans in the first quarter of 2022.
· Gross dollar volume (“GDV”), representing the total amounts spent on prepaid and debit cards, increased $1.29 billion, or 5%, to $28.39 billion for the quarter ended June 30, 2022 compared to the quarter ended June 30, 2021. GDV was increased in 2021 by the impact of pandemic related government stimulus payments.
· SBLOC (securities backed lines of credit), IBLOC (insurance backed lines of credit) and investment advisor financing loans collectively increased 35% year over year and 10% quarter over quarter to $2.43 billion at June 30, 2022.
· Small Business Loans, including those held at fair value, grew 6% year over year to $729.8 million at June 30, 2022, and 3.5% quarter over quarter. That growth is exclusive of PPP loan balances which amounted to $10.3 million and $129.4 million, respectively, at June 30, 2022 and June 30, 2021.
· Direct lease financing balances increased 15% year over year to $583.1 million at June 30, 2022, and 8% quarter over quarter.
· We resumed non-SBA commercial real estate bridge lending in the third quarter of 2021. At June 30, 2022, the balance of such real estate bridge loans was $1.11 billion compared to $803.5 million at March 31, 2022, reflecting quarter over quarter growth of 38%.
· The average interest rate on $6.38 billion of average deposits and interest-bearing liabilities during the second quarter of 2022 was 0.44%. Average deposits of $6.25 billion for second quarter 2022, reflected a decrease of 0.1% from the $6.26 billion of average deposits for the quarter ended June 30, 2021, which had increased 17% over the June 30, 2020 quarter. Deposit levels during these periods reflected variability resulting from the pandemic and related government stimulus payments.
· As of June 30, 2022, 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 9.51%, 13.46%, 13.84% and 13.46%, respectively, compared to well-capitalized minimums of 5%, 8%, 10% and 6.5%, respectively. The Bancorp and its wholly owned subsidiary, The Bancorp Bank, each remain well capitalized under banking regulations.
· Book value per common share at June 30, 2022 was $11.55 per share compared to $10.77 per share at June 30, 2021, an increase of 7%, primarily as a result of retained earnings. Increases resulting from retained earnings and reductions in shares from related repurchases were partially offset by reductions in the market value of securities, which are recognized through equity.
· The Bancorp repurchased 577,926 shares of its common stock at an average cost of $25.95 per share during the quarter ended June 30, 2022.

“The second quarter continued to show strong growth across our platform. With the anticipated continued increase in interest rates based on fed funds futures and strong business pipelines, we expect profitability to steadily increase over the next 18 months. We are raising our guidance for 2022 from $2.15 per share to a range of $2.25 to $2.30 per share. This range excludes the impact of 2022 share repurchases but includes interest rate assumptions based on fed funds expectations.”

The Bancorp reported net income of $30.4 million, or $0.53 per diluted share, for the quarter ended June 30, 2022, compared to net income of $29.4 million, or $0.50 per diluted share, for the quarter ended June 30, 2021.

Conference Call Webcast

You may access the LIVE webcast of The Bancorp’s Quarterly Earnings Conference Call at 8:00 AM ET Friday, July 29, 2022 by clicking on the webcast link on The Bancorp’s homepage at www.thebancorp.com. Or you may dial 866.374.5140, access code 81692741. You may listen to the replay of the webcast following the live call on The Bancorp’s investor relations website.

About The Bancorp

The Bancorp, Inc. (NASDAQ: TBBK), headquartered in Wilmington, Delaware, through its subsidiary, The Bancorp Bank, provides non-bank financial companies with the people, processes, and technology to meet their unique banking needs. Through its Fintech Solutions, Institutional Banking, Commercial Lending, and Real Estate Bridge Lending businesses, The Bancorp provides partner-focused solutions paired with cutting-edge technology for companies that range from entrepreneurial startups to Fortune 500 companies. With over 20 years of experience, The Bancorp has become a leader in the financial services industry, earning recognition as the #1 issuer of prepaid cards in the U.S. in June 2021, a nationwide provider of bridge financing for real estate capital improvement plans, an SBA National Preferred Lender, a leading provider of securities-backed lines of credit, with one of the few bank-owned commercial vehicle leasing groups. As evidence of its company-wide commitment to excellence, The Bancorp has also been ranked in October 2020 as one of the 100 Fastest-Growing Companies by Fortune, a Top 50 Employer in March 2021 by Equal Opportunity Magazine and was selected to be included in the S&P Small Cap 600 in May 2021. For more about The Bancorp, visit https://thebancorp.com/.

Forward-Looking Statements

Statements in this earnings release regarding The Bancorp’s business which are not historical facts are “forward-looking statements.” These statements may be identified by the use of forward-looking terminology, including but not limited to the words “intend,” “may,” “believe,” “will,” “expect,” “look,” “anticipate,” “plan,” “estimate,” “continue,” or similar words , and are based on current expectations about important economic, political, and technological factors, among others, and are subject to risks and uncertainties, which could cause the actual results, events or achievements to differ materially from those set forth in or implied by the forward-looking statements and related assumptions. For further discussion of the risks and uncertainties to which these forward-looking statements may be subject, see The Bancorp’s filings with the Securities and Exchange Commission, including the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of those filings. The forward-looking statements speak only as of the date of this press release. The Bancorp does not undertake to publicly revise or update forward-looking statements in this press release to reflect events or circumstances that arise after the date of this press release, except as may be required under applicable law.

The Bancorp, Inc. Contact

Andres Viroslav

Director, Investor Relations

215-861-7990

andres.viroslav@thebancorp.com

Source: The Bancorp, Inc.

The Bancorp, Inc.

Financial highlights

(unaudited)

Three months ended Six months ended
June 30, June 30,
Consolidated condensed income statements 2022 2021 2022 2021
(in thousands, except per share data)
Net interest income $ 54,569 $ 54,069 $ 107,422 $ 107,826
Provision for (reversal of) credit losses (1,450) (951) 3,509 (129)
Non-interest income
ACH, card and other payment processing fees 2,338 1,904 4,322 3,700
Prepaid, debit card and related fees 20,038 19,447 38,690 38,655
Net realized and unrealized gains on commercial
loans, at fair value 3,682 2,579 10,517 4,575
Leasing related income 1,545 1,767 2,518 2,732
Other non-interest income 350 164 470 273
Total non-interest income 27,953 25,861 56,517 49,935
Non-interest expense
Salaries and employee benefits 25,999 27,087 49,847 52,745
Data processing expense 1,246 1,146 2,435 2,272
Legal expense 1,474 2,044 2,268 4,098
Legal settlement 1,152 1,152
FDIC insurance 673 2,589 1,647 4,969
Software 4,165 3,706 8,029 7,390
Other non-interest expense 8,136 7,311 15,819 14,292
Total non-interest expense 42,845 43,883 81,197 85,766
Income from continuing operations before income taxes 41,127 36,998 79,233 72,124
Income tax expense 10,725 7,840 19,865 16,906
Net income from continuing operations 30,402 29,158 59,368 55,218
Discontinued operations
Income from discontinued operations before income taxes 361 237
Income tax expense 84 55
Net income from discontinued operations, net of tax 277 182
Net income $ 30,402 $ 29,435 $ 59,368 $ 55,400
Net income per share from continuing operations – basic $ 0.54 $ 0.51 $ 1.04 $ 0.96
Net income per share from discontinued operations – basic $ $ $ $ 0.01
Net income per share – basic $ 0.54 $ 0.51 $ 1.04 $ 0.97
Net income per share from continuing operations – diluted $ 0.53 $ 0.49 $ 1.03 $ 0.93
Net income per share from discontinued operations – diluted $ $ $ $ 0.01
Net income per share – diluted $ 0.53 $ 0.50 $ 1.03 $ 0.94
Weighted average shares – basic 56,801,518 57,230,576 56,962,000 57,232,557
Weighted average shares – diluted 57,453,730 59,022,925 57,772,538 59,086,956

Note: Compared to higher rates in recent periods, the effective tax rate for the three months ended June 30, 2021 approximated 21% as a result of the impact of tax deductions related to stock-based compensation, recorded as discrete items. The large deductions and tax benefits resulted from the increase in the Company’s stock price as compared to the original various grant dates.

Condensed consolidated balance sheets June 30, March 31, December 31, June 30,
2022 (unaudited) 2022 (unaudited) 2021 2021 (unaudited)
(in thousands, except share data)
Assets:
Cash and cash equivalents
Cash and due from banks $ 12,873 $ 11,399 $ 5,382 $ 5,470
Interest earning deposits at Federal Reserve Bank 329,992 662,827 596,402 583,498
Total cash and cash equivalents 342,865 674,226 601,784 588,968
Investment securities, available-for-sale, at fair value 826,616 907,338 953,709 1,106,075
Commercial loans, at fair value 995,493 1,180,885 1,388,416 1,758,264
Loans, net of deferred fees and costs 4,754,697 4,164,298 3,747,224 2,915,344
Allowance for credit losses (19,087) (19,051) (17,806) (15,292)
Loans, net 4,735,610 4,145,247 3,729,418 2,900,052
Federal Home Loan Bank and Atlantic Central Bankers Bank stock 1,643 1,663 1,663 1,667
Premises and equipment, net 16,693 16,314 16,156 17,392
Accrued interest receivable 19,264 17,284 17,871 18,668
Intangible assets, net 2,248 2,348 2,447 2,646
Other real estate owned 18,873 18,873 18,873 17,343
Deferred tax asset, net 23,344 18,521 12,667 10,923
Investment in unconsolidated entity, at fair value 24,988
Assets held-for-sale from discontinued operations 3,268 12,105
Other assets 124,511 99,961 96,967 91,516
Total assets $ 7,107,160 $ 7,082,660 $ 6,843,239 $ 6,550,607
Liabilities:
Deposits
Demand and interest checking $ 5,394,562 $ 5,506,083 $ 5,561,365 $ 5,225,024
Savings and money market 486,189 722,240 415,546 459,688
Total deposits 5,880,751 6,228,323 5,976,911 5,684,712
Securities sold under agreements to repurchase 42 42 42 42
Short-term borrowings 385,000
Senior debt 98,866 98,774 98,682 98,498
Subordinated debenture 13,401 13,401 13,401 13,401
Other long-term borrowings 39,125 39,318 39,521 39,901
Other liabilities 33,439 50,507 62,228 94,944
Total liabilities $ 6,450,624 $ 6,430,365 $ 6,190,785 $ 5,931,498
Shareholders’ equity:
Common stock – authorized, 75,000,000 shares of $1.00 par value; 56,865,494 and 57,458,287 shares issued and outstanding at June 30, 2022 and 2021, respectively 56,865 57,155 57,371 57,458
Additional paid-in capital 323,774 336,604 349,686 363,241
Retained earnings 298,474 268,072 239,106 183,853
Accumulated other comprehensive (loss) income (22,577) (9,536) 6,291 14,557
Total shareholders’ equity 656,536 652,295 652,454 619,109
Total liabilities and shareholders’ equity $ 7,107,160 $ 7,082,660 $ 6,843,239 $ 6,550,607

Note: Previous balance sheets included assets held-for-sale from discontinued operations, which were reclassified to continuing operations in the first quarter of 2022. Previous balance sheets also included investment in unconsolidated entity, which reflected Bancorp’s balance of the Walnut Street investment. Walnut Street was comprised of Bancorp loans sold to that entity, which was partially financed by an independent investor. In the third quarter of 2021, The Bancorp and that investor dissolved the entity, as the remaining balance did not warrant ongoing administrative and accounting expenses.

Average balance sheet and net interest income Three months ended June 30, 2022 Three months ended June 30, 2021
(dollars in thousands; unaudited)
Average Average Average Average
Assets: Balance Interest Rate Balance Interest Rate
Interest earning assets:
Loans, net of deferred fees and costs** $ 5,467,516 $ 55,100 4.03% $ 4,572,712 $ 49,378 4.32%
Leases-bank qualified* 3,665 63 6.88% 5,783 96 6.64%
Investment securities-taxable 879,112 5,432 2.47% 1,081,419 7,201 2.66%
Investment securities-nontaxable* 3,559 31 3.48% 3,878 32 3.30%
Interest earning deposits at Federal Reserve Bank 545,027 1,004 0.74% 1,120,039 300 0.11%
Net interest earning assets 6,898,879 61,630 3.57% 6,783,831 57,007 3.36%
Allowance for credit losses (20,295) (16,406)
Assets held-for-sale from discontinued operations 98,895 781 3.16%
Other assets 243,459 201,539
$ 7,122,043 $ 7,067,859
Liabilities and Shareholders’ Equity:
Deposits:
Demand and interest checking $ 5,697,507 $ 4,390 0.31% $ 5,736,776 $ 1,327 0.09%
Savings and money market 556,847 1,200 0.86% 526,112 192 0.15%
Total deposits 6,254,354 5,590 0.36% 6,262,888 1,519 0.10%
Short-term borrowings 11,593 32 1.10%
Repurchase agreements 41 41
Subordinated debentures 13,401 139 4.15% 13,401 112 3.34%
Senior debt 98,816 1,280 5.18% 100,239 1,280 5.11%
Total deposits and liabilities 6,378,205 7,041 0.44% 6,376,569 2,911 0.18%
Other liabilities 89,422 83,353
Total liabilities 6,467,627 6,459,922
Shareholders’ equity 654,416 607,937
$ 7,122,043 $ 7,067,859
Net interest income on tax equivalent basis* $ 54,589 $ 54,877
Tax equivalent adjustment 20 27
Net interest income $ 54,569 $ 54,850
Net interest margin * 3.17% 3.19%

* Full taxable equivalent basis, using a statutory Federal tax rate of 21% for 2022 and 2021.

** Includes commercial loans, at fair value. All periods include non-accrual loans.

NOTE: In the table above, the 2021 interest on loans reflects $3.0 million of interest and fees which were earned on a short-term line of credit to another institution to initially fund Payroll Protection Program (“PPP”) loans, which did not significantly increase average loans or assets and which are not expected to recur. Interest on loans for 2022 and 2021 includes $41,000 and $1.3 million, respectively, of interest and fees on PPP loans.

Average balance sheet and net interest income Six months ended June 30, 2022 Six months ended June 30, 2021
(dollars in thousands; unaudited)
Average Average Average Average
Assets: Balance Interest Rate Balance Interest Rate
Interest earning assets:
Loans, net of deferred fees and costs** $ 5,302,850 $ 105,638 3.98% $ 4,524,911 $ 97,189 4.30%
Leases-bank qualified* 3,839 130 6.77% 6,379 214 6.71%
Investment securities-taxable 909,017 10,323 2.27% 1,136,631 16,009 2.82%
Investment securities-nontaxable* 3,559 62 3.48% 3,960 67 3.38%
Interest earning deposits at Federal Reserve Bank 616,865 1,351 0.44% 935,239 483 0.10%
Net interest earning assets 6,836,130 117,504 3.44% 6,607,120 113,962 3.45%
Allowance for credit losses (19,075) (16,241)
Assets held for sale from discontinued operations 103,983 1,634 3.14%
Other assets 232,402 203,821
$ 7,049,457 $ 6,898,683
Liabilities and Shareholders’ Equity:
Deposits:
Demand and interest checking $ 5,636,415 $ 5,796 0.21% $ 5,619,608 $ 2,944 0.10%
Savings and money market 544,515 1,400 0.51% 466,978 341 0.15%
Total deposits 6,180,930 7,196 0.23% 6,086,586 3,285 0.11%
Short-term borrowings 6,104 32 1.05% 6,491 8 0.25%
Repurchase agreements 41 41
Subordinated debentures 13,401 255 3.81% 13,401 225 3.36%
Senior debt 98,770 2,559 5.18% 100,190 2,559 5.11%
Total deposits and liabilities 6,299,246 10,042 0.32% 6,206,709 6,077 0.20%
Other liabilities 95,716 91,837
Total liabilities 6,394,962 6,298,546
Shareholders’ equity 654,495 600,137
$ 7,049,457 $ 6,898,683
Net interest income on tax equivalent basis* $ 107,462 $ 109,519
Tax equivalent adjustment 40 59
Net interest income $ 107,422 $ 109,460
Net interest margin * 3.14% 3.26%

* Full taxable equivalent basis, using a statutory Federal tax rate of 21% for 2022 and 2021.

** Includes commercial loans, at fair value. All periods include non-accrual loans.

NOTE: In the table above, the 2021 interest on loans reflects $4.5 million of interest and fees which were earned on a short-term line of credit to another institution to initially fund PPP loans, which did not significantly increase average loans or assets and which are not expected to recur. Interest on loans for 2022 and 2021 includes $481,000 and $3.7 million, respectively, of interest and fees on PPP loans.

Allowance for credit losses Six months ended Year ended
June 30, June 30, December 31,
2022 (unaudited) 2021 (unaudited) 2021
(dollars in thousands)
Balance in the allowance for credit losses at beginning of period (1) $ 17,806 $ 16,082 $ 16,082
Loans charged-off:
SBA non-real estate 844 321 1,138
SBA commercial mortgage 23 417
Direct lease financing 199 193 412
SBLOC 15 15
Consumer – home equity 10
Consumer – other 14
Total 1,043 552 2,006
Recoveries:
SBA non-real estate 33 15 51
SBA commercial mortgage 9
Direct lease financing 93 7 58
Consumer – home equity 1,099
Total 126 22 1,217
Net charge-offs 917 530 789
Provision for (reversal of) credit losses, excluding unfunded commitments 2,198 (260) 2,513
Balance in allowance for credit losses at end of period $ 19,087 $ 15,292 $ 17,806
Net charge-offs/average loans 0.02% 0.02% 0.03%
Net charge-offs/average assets 0.01% 0.01% 0.01%

(1) Excludes activity from discontinued operations.

Loan portfolio June 30, March 31, December 31, June 30,
2022 2022 2021 2021
(in thousands)
SBL non-real estate $ 112,854 $ 122,387 $ 147,722 $ 228,958
SBL commercial mortgage 425,219 385,559 361,171 343,487
SBL construction 27,042 31,432 27,199 18,494
Small business loans 565,115 539,378 536,092 590,939
Direct lease financing 583,086 538,616 531,012 506,424
SBLOC / IBLOC * 2,274,256 2,067,233 1,929,581 1,729,628
Advisor financing ** 155,235 146,461 115,770 72,190
Real estate bridge loans 1,106,875 803,477 621,702
Other loans *** 63,514 61,096 5,014 5,840
4,748,081 4,156,261 3,739,171 2,905,021
Unamortized loan fees and costs 6,616 8,037 8,053 10,323
Total loans, including unamortized fees and costs $ 4,754,697 $ 4,164,298 $ 3,747,224 $ 2,915,344
Small business portfolio June 30, March 31, December 31, June 30,
2022 2022 2021 2021
(in thousands)
SBL, including unamortized fees and costs $ 571,559 $ 545,462 $ 541,437 $ 593,401
SBL, included in loans, at fair value 168,579 183,408 199,585 225,534
Total small business loans **** $ 740,138 $ 728,870 $ 741,022 $ 818,935

* Securities Backed Lines of Credit, or SBLOC, are collateralized by marketable securities, while Insurance Backed Lines of Credit, or IBLOC, are collateralized by the cash surrender value of eligible life insurance policies.

** In 2020, we began originating loans to investment advisors for purposes of debt refinance, acquisition of another firm or internal succession. Maximum loan amounts are subject to loan-to-value ratios of 70%, based on third-party business appraisals, but may be increased depending upon the debt service coverage ratio. Personal guarantees and blanket business liens are obtained as appropriate.

*** Includes demand deposit overdrafts reclassified as loan balances totaling $170,000 and $322,000 at June 30, 2022 and December 31, 2021, respectively. Estimated overdraft charge-offs and recoveries are reflected in the allowance for credit losses and have been immaterial.

****The small business loans held at fair value are comprised of the government guaranteed portion of certain SBA loans at the dates indicated (in thousands). A reduction in SBL non-real estate from $122.4 million to $112.9 million in the second quarter of 2022 resulted primarily from U.S. government repayments of PPP loans authorized by The Consolidated Appropriations Act, 2021. PPP loans totaled $10.3 million at June 30, 2022, $23.7 million at March 31, 2022 and $129.4 million at June 30, 2021.

Small business loans as of June 30, 2022

Loan principal
(in millions)
U.S. government guaranteed portion of SBA loans (a) $ 375
Paycheck Protection Program loans (PPP) (a) 10
Commercial mortgage SBA (b) 216
Construction SBA (c) 12
Non-guaranteed portion of U.S. government guaranteed loans (d) 100
Non-SBA small business loans (e) 21
Total principal $ 734
Unamortized fees and costs 6
Total small business loans $ 740

(a) This is the portion of SBA 7a loans (7a) and PPP loans which have been guaranteed by the U.S. government, and therefore are assumed to have no credit risk.

(b) Substantially all these loans are made under the SBA 504 Fixed Asset Financing program (504) which dictates origination date loan-to-value percentages (“LTV”), generally 50-60%, to which the Bank adheres.

(c) Of the $12 million in Construction SBA loans, $11 million are 504 first mortgages with an origination date LTV of 50-60% and $1 million are SBA interim loans with an approved SBA post-construction full takeout/payoff.

(d) The $100 million represents the unguaranteed portion of 7a loans which are 70% or more guaranteed by the U.S. government. 7a loans are not made on the basis of real estate LTV; however, they are subject to SBA’s “All Available Collateral” rule which mandates that to the extent a borrower or its 20% or greater principals have available collateral (including personal residences), the collateral must be pledged to fully collateralize the loan, after applying SBA-determined liquidation rates. In addition, all 7a and 504 loans require the personal guaranty of all 20% or greater owners.

(e) The $21 million of non-SBA loans are primarily comprised of approximately 20 conventional coffee/doughnut/carryout franchisee note purchases.

Small business loans by type as of June 30, 2022

(Excludes government guaranteed portion of SBA 7a loans and PPP loans)

SBL commercial mortgage* SBL construction* SBL non-real estate Total % Total
(dollars in millions)
Hotels (except casino hotels) and motels $ 69 $ $ $ 69 19%
Full-service restaurants 13 2 2 17 5%
Car washes 16 1 17 5%
Child day care services 15 1 16 4%
Outpatient mental health and substance abuse centers 15 15 4%
Baked goods stores 4 9 13 4%
Funeral homes and funeral services 10 10 3%
Fitness and recreational sports centers 5 2 2 9 3%
Offices of lawyers 9 9 3%
Assisted living facilities for the elderly 9 9 3%
Gasoline stations with convenience stores 8 8 2%
Lessors of nonresidential buildings 8 8 2%
General warehousing and storage 7 7 2%
Lessors of other real estate property 6 6 2%
All other amusement and recreation industries 5 1 6 2%
Limited-service restaurants 1 2 2 5 1%
Other miscellaneous durable goods merchant wholesalers 5 5 1%
Other technical and trade schools 5 5 1%
Other spectator sports 5 5 1%
Plumbing, heating, and air-conditioning contractors 3 1 4 1%
Offices of dentists 2 1 3 1%
Landscaping services 2 1 3 1%
Other warehousing and storage 3 3 1%
All other miscellaneous wood product manufacturing 3 3 1%
Offices of physicians (except mental health specialists) 3 3 1%
Vocational rehabilitation services 3 3 1%
Elementary and secondary schools 2 2 1%
All other miscellaneous general purpose machinery manufacturing 2 2 1%
Sewing, needlework, and piece goods stores 2 2 1%
Pet care (except veterinary) services 2 2 1%
Automotive body, paint, and interior repair and maintenance 2 2 1%
Amusement arcades 2 2 1%
Offices of real estate agents and brokers 2 2 1%
Other** 49 1 23 73 19%
Total $ 292 $ 14 $ 42 $ 348 100%

* Of the SBL commercial mortgage and SBL construction loans, $79 million represents the total of the non-guaranteed portion of SBA 7a loans and non-SBA loans. The balance of those categories represents SBA 504 loans with 50%-60% origination date loan-to-values.

**Loan types less than $2 million are spread over a hundred different classifications such as Commercial Printing, Pet and Pet Supplies Stores, Securities Brokerage, etc.

State diversification as of June 30, 2022

(Excludes government guaranteed portion of SBA 7a loans and PPP loans)

SBL commercial mortgage* SBL construction* SBL non-real estate Total % Total
(dollars in millions)
Florida $ 67 $ $ 5 $ 72 20%
California 48 2 3 53 15%
North Carolina 23 7 2 32 9%
New York 25 3 28 8%
Pennsylvania 22 2 24 6%
Colorado 11 4 1 16 5%
Illinois 15 2 17 5%
Texas 12 4 16 5%
New Jersey 7 7 14 4%
Virginia 9 1 10 3%
Connecticut 10 10 3%
Georgia 7 2 9 3%
Tennessee 8 8 2%
Ohio 6 6 2%
Michigan 3 3 1%
Other States 19 1 10 30 9%
Total $ 292 $ 14 $ 42 $ 348 100%

* Of the SBL commercial mortgage and SBL construction loans, $79 million represents the total of the non-guaranteed portion of SBA 7a loans and non-SBA loans. The balance of those categories represents SBA 504 loans with 50%-60% origination date loan-to-values.

Top 10 loans as of June 30, 2022

Type* State SBL commercial mortgage*
(in millions)
Mental health and substance abuse center FL $ 10
Hotel FL 9
Lawyer’s office CA 9
General warehousing and storage PA 7
Hotel NY 6
Hotel NC 5
Assisted living facility FL 5
Mental health and substance abuse center CT 5
Technical and trade school NC 5
Hotel PA 5
Total $ 66
* All of the top 10 loans are 504 SBA loans with 50%-60% origination date loan-to-value and are in the commercial mortgage category. The top 10 loan table above does not include loans to the extent that they are U.S. government guaranteed.

Commercial real estate loans, excluding SBA loans, are as follows including LTV at origination:

Type as of June 30, 2022

Type # Loans Balance Weighted average origination date LTV Weighted average interest rate
(dollars in millions)
Real estate bridge loans (multi-family apartment loans recorded at book value)* 95 $ 1,107 74% 4.52%
Non-SBA commercial real estate loans, at fair value:
Multi-family (apartment bridge loans)* 48 $ 697 76% 4.74%
Hospitality (hotels and lodging) 8 71 65% 5.65%
Retail 4 52 71% 5.01%
Other 5 13 74% 5.06%
65 833 74% 4.84%
Fair value adjustment (6)
Total non-SBA commercial real estate loans, at fair value 827
Total commercial real estate loans $ 1,934 74% 4.67%

*In the third quarter of 2021, we resumed the origination of multi-family apartment loans. These are similar to the multi-family apartment loans carried at fair value, but at origination are intended to be held on the balance sheet, so are not accounted for at fair value.

State diversification as of June 30, 2022 15 largest loans as of June 30, 2022
State Balance Origination date LTV State Balance Origination date LTV
(dollars in millions) (dollars in millions)
Texas $ 678 76% Texas $ 41 75%
Georgia 189 73% Texas 39 79%
Ohio 115 72% Texas 39 72%
Florida 103 73% Tennessee 38 72%
Tennessee 101 70% Texas 37 75%
Alabama 89 74% Texas 37 80%
Arizona 56 72% Michigan 31 79%
Other States each <$55 million 603 74% Tennessee 30 62%
Total $ 1,934 74% Missouri 30 72%
Mississippi 29 79%
Texas 28 77%
Texas 27 77%
New Jersey 27 77%
Ohio 27 74%
Oklahoma 27 78%
15 Largest loans $ 487 75%

Institutional banking loans outstanding at June 30, 2022

Type Principal % of total
(dollars in millions)
Securities backed lines of credit (SBLOC) $ 1,257 52%
Insurance backed lines of credit (IBLOC) 1,017 42%
Advisor financing 155 6%
Total $ 2,429 100%

For SBLOC, we generally lend up to 50% of the value of equities and 80% for investment grade securities. While equities have fallen in excess of 30% in recent years, the reduction in collateral value of brokerage accounts collateralizing SBLOCs generally has been less, for two reasons. First, many collateral accounts are “balanced” and accordingly have a component of debt securities, which have either not decreased in value as much as equities, or in some cases may have increased in value. Secondly, many of these accounts have the benefit of professional investment advisors who provided some protection against market downturns, through diversification and other means. Additionally, borrowers often utilize only a portion of collateral value, which lowers the percentage of principal to collateral.

Top 10 SBLOC loans at June 30, 2022

Principal amount % Principal to collateral
(dollars in millions)
$ 18 41%
16 62%
14 35%
9 32%
9 64%
9 44%
9 70%
8 73%
6 29%
6 51%
Total and weighted average $ 104 49%

Insurance backed lines of credit (IBLOC)

IBLOC loans are backed by the cash value of eligible life insurance policies which have been assigned to us. We generally lend up to 95% of such cash value. Our underwriting standards require approval of the insurance companies which carry the policies backing these loans. Currently, eight insurance companies have been approved and, as of April 21, 2022, all were rated Excellent (A or better) by AM BEST.

Direct lease financing* by type as of June 30, 2022

Principal balance % Total
(dollars in millions)
Construction $ 116 20%
Government agencies and public institutions** 91 16%
Waste management and remediation services 68 12%
Real estate and rental and leasing 60 10%
Retail trade 49 8%
Health care and social assistance 31 5%
Transportation and warehousing 31 5%
Professional, scientific, and technical services 20 3%
Wholesale trade 17 3%
Manufacturing 17 3%
Educational services 8 1%
Finance and insurance 7 1%
Arts, entertainment and recreation 4 1%
Other 64 12%
Total $ 583 100%

* Of the total $583 million of direct lease financing, $500 million consisted of vehicle leases with the remaining balance consisting of equipment leases.

** Includes public universities and school districts.

Direct lease financing by state as of June 30, 2022

State Principal balance % Total
(dollars in millions)
Florida $ 93 16%
Utah 52 9%
California 49 8%
New Jersey 40 7%
Pennsylvania 39 7%
Texas 39 7%
New York 31 5%
North Carolina 26 4%
Maryland 24 4%
Connecticut 17 3%
Washington 17 3%
Georgia 14 2%
Idaho 12 2%
Alabama 10 2%
Illinois 10 2%
Other States 110 19%
Total $ 583 100%
Capital ratios Tier 1 capital Tier 1 capital Total capital Common equity
to average to risk-weighted to risk-weighted tier 1 to risk
assets ratio assets ratio assets ratio weighted assets
As of June 30, 2022
The Bancorp, Inc. 9.51% 13.46% 13.84% 13.46%
The Bancorp Bank 10.45% 14.84% 15.22% 14.84%
“Well capitalized” institution (under FDIC regulations-Basel III) 5.00% 8.00% 10.00% 6.50%
As of December 31, 2021
The Bancorp, Inc. 10.40% 14.72% 15.13% 14.72%
The Bancorp Bank 10.98% 15.48% 15.88% 15.48%
“Well capitalized” institution (under FDIC regulations-Basel III) 5.00% 8.00% 10.00% 6.50%
Three months ended Six months ended
June 30, June 30,
2022 2021 2022 2021
Selected operating ratios
Return on average assets (1) 1.71% 1.67% 1.70% 1.62%
Return on average equity (1) 18.63% 19.42% 18.29% 18.62%
Net interest margin 3.17% 3.19% 3.14% 3.26%

(1) Annualized

Book value per share table June 30, March 31, December 31, June 30,
2022 2022 2021 2021
Book value per share $ 11.55 $ 11.41 $ 11.37 $ 10.77
Loan quality table June 30, March 31, December 31, June 30,
2022 2022 2021 2021
(dollars in thousands)
Nonperforming loans to total loans 0.18% 0.20% 0.10% 0.31%
Nonperforming assets to total assets 0.39% 0.38% 0.33% 0.40%
Allowance for credit losses to total loans 0.40% 0.46% 0.48% 0.52%
Nonaccrual loans $ 3,698 $ 3,621 $ 3,161 $ 7,346
Loans 90 days past due still accruing interest 4,848 4,597 461 1,550
Other real estate owned 18,873 18,873 18,873 17,343
Total nonperforming assets $ 27,419 $ 27,091 $ 22,495 $ 26,239
Gross dollar volume (GDV) (1) Three months ended
June 30, March 31, December 31, June 30,
2022 2021 2021 2021
(in thousands)
Prepaid and debit card GDV $ 28,394,897 $ 28,564,582 $ 24,821,576 $ 27,106,763

(1) Gross dollar volume represents the total dollar amount spent on prepaid and debit cards issued by The Bancorp Bank.

Business line quarterly summary
Quarter ended June 30, 2022
(dollars in millions)
Balances
% Growth
Major business lines Average approximate rates * Balances ** Year over year Linked quarter annualized
Loans
Institutional banking *** 2.9% $ 2,429 35% 39%
Small business lending**** 4.9% 740 6% 14%
Leasing 6.0% 583 15% 33%
Commercial real estate (non-SBA loans, at fair value) 4.8% 827 nm nm
Real estate bridge loans (recorded at book value) 4.5% 1,107 nm nm
Weighted average yield 4.1% $ 5,686 Non-interest income
% Growth
Deposits: Fintech solutions group Current quarter Year over year
Prepaid and debit card issuance, and other payments 0.4% $ 5,650 (1%) nm $ 22.4 5%

* Average rates are for the quarter ended June 30, 2022.

** Loan and deposit categories are respectively based on period-end and average quarterly balances.

*** Institutional Banking loans are comprised of security backed lines of credit (SBLOC), collateralized by marketable securities, insurance backed lines of credit (IBLOC), collateralized by the cash surrender value of eligible life insurance policies, and investment advisor financing.

**** Small Business Lending is substantially comprised of SBA loans. Loan growth percentages exclude short-term PPP loans.

Disclaimer

The Bancorp Inc. published this content on 28 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 July 2022 20:27:41 UTC.

Publicnow 2022

All news about THE BANCORP, INC.

Analyst Recommendations on THE BANCORP, INC.

Sales 2022 236 M

Net income 2022 131 M

Net Debt 2022

P/E ratio 2022 10,5x
Yield 2022
Capitalization 1 360 M
1 360 M
Capi. / Sales 2022 5,77x
Capi. / Sales 2023 4,71x
Nbr of Employees 650
Free-Float 95,3%


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The Bancorp, Inc. Technical Analysis Chart | MarketScreener

Technical analysis trends THE BANCORP, INC.

Short Term Mid-Term Long Term
Trends Bullish Neutral Neutral

Income Statement Evolution

Sell

Buy

Mean consensus OUTPERFORM
Number of Analysts 2
Last Close Price 24,04 $
Average target price 34,50 $
Spread / Average Target 43,5%

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