WILMINGTON, Del.--(BUSINESS WIRE)--The Bancorp, Inc. ("The Bancorp") (NASDAQ: TBBK), a financial holding company, today reported financial results for the first quarter 2019.
Highlights
- Diluted earnings per share increased to $0.32 for the quarter ended March 31, 2019, compared to $0.25 for the quarter ended March 31, 2018, an increase of 27%.
- Net income increased to $17.9 million for the quarter ended March 31, 2019, compared to $14.1 million for the quarter ended March 31, 2018, an increase of 27%.
- Net interest margin increased to 3.41% for the quarter ended March 31, 2019, compared to 3.12% for the quarter ended March 31, 2018.
- Net interest income increased 13% to $34.0 million for the quarter ended March 31, 2019, compared to $30.1 million for the quarter ended March 31, 2018.
- Average loans and leases, including loans held for sale, increased 16% to $2.28 billion for the quarter ended March 31, 2019, compared to $1.97 billion for the quarter ended March 31, 2018.
- Prepaid card fees increased to $16.2 million for the quarter ended March 31, 2019, or 13%, compared to $14.3 million for the quarter ended March 31, 2018.
- ACH (Automated Clearing House), card and other payment processing fees increased 36%, to $2.3 million for the quarter ended March 31, 2019, compared to $1.7 million for the quarter ended March 31, 2018.
- Small Business Administration (“SBA”) loans increased 16% to $493.7 million at March 31, 2019, compared to $424.5 million at March 31, 2018.
- The rate on $3.92 billion of average deposits and interest-bearing liabilities in the first quarter of 2019 was 0.98%. Average prepaid deposits of $2.54 billion for first quarter 2019 reflected an increase of 14.7% compared to $2.22 billion for the quarter ended March 31, 2018.
- Consolidated leverage ratio was 9.9% at March 31, 2019. The Bancorp and its subsidiary, The Bancorp Bank, remain well capitalized.
- Book value per common share at March 31, 2019 was $7.70 per share.
Damian Kozlowski, The Bancorp’s Chief Executive Officer, said, “Our strategic agenda in 2019 encompasses nine items that should further position our institution for revenue growth and profitability. Most of the initiatives focus on new products or reengineering of our platform to be best in class and highly efficient. The balance of initiatives include finishing our remediation process with our regulators and building a stronger community with all our Bancorp partners. Impact from all these initiatives should mostly be felt in increased revenue growth as expenses remain rigorously managed and reengineering has improved productivity and reduced unit costs in many areas.”
The Bancorp reported net income of $17.9 million, or $0.32 income per diluted share, for the quarter ended March 31, 2019, compared to net income of $14.1 million, or $0.25 income per diluted share, for the quarter ended March 31, 2018. Tier one capital to assets (leverage), tier one capital to risk-weighted assets, total capital to risk-weighted assets and common equity-tier 1 to risk-weighted assets ratios were 9.90%, 23.61%, 24.15% and 23.61%, respectively, compared to well-capitalized minimums of 5%, 8%, 10% and 6.5%, respectively.
Conference Call Webcast
You may access the LIVE webcast of The Bancorp's Quarterly Earnings Conference Call at 8:00 AM ET Friday, April 26, 2019 by clicking on the webcast link on The Bancorp's homepage at www.thebancorp.com. Or, you may dial 844.775.2543, access code 1496107. You may listen to the replay of the webcast following the live call on The Bancorp's investor relations website or telephonically until Friday, May 3, 2019 by dialing 855.859.2056, access code 1496107.
About The Bancorp
The Bancorp, Inc. (NASDAQ: TBBK) is dedicated to serving the unique needs of non-bank financial service companies, ranging from entrepreneurial start-ups to those on the Fortune 500. The company’s only subsidiary, The Bancorp Bank (Member FDIC, Equal Housing Lender), has been repeatedly recognized in the payments industry as the Top Issuer of Prepaid Cards (US), a top merchant sponsor bank and a top ACH originator. Specialized lending distinctions include National Preferred SBA Lender, a leading provider of securities-backed lines of credit, and one of the few bank-owned commercial vehicle leasing groups in the nation. For more information please visit www.thebancorp.com.
Forward-Looking Statements
Statements in this earnings release regarding The Bancorp’s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. These statements may be identified by the use of forward-looking terminology, including but not limited to the words “may,” “believe,” “will,” “expect,” “look,” “anticipate,” “estimate,” “continue,” or similar words. For further discussion of the risks and uncertainties to which these forward-looking statements may be subject, see The Bancorp’s filings with the SEC, including the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of those filings. These risks and uncertainties could cause actual results to differ materially from those projected in the forward-looking statements. The forward-looking statements speak only as of the date of this press release. The Bancorp does not undertake to publicly revise or update forward-looking statements in this press release to reflect events or circumstances that arise after the date of this presentation, except as may be required under applicable law.
| Financial highlights | |||||||||
| (unaudited) | |||||||||
| Three months ended | Year ended | ||||||||
| March 31, | December 31, | ||||||||
| Condensed income statement | 2019 | 2018 | 2018 | ||||||
| (dollars in thousands except per share data) | |||||||||
| Net interest income | $ | 34,010 | $ | 30,074 | $ | 120,849 | |||
| Provision for loan and lease losses | 1,700 | 700 | 3,585 | ||||||
| Non-interest income | |||||||||
| Service fees on deposit accounts | 47 | 1,576 | 3,622 | ||||||
| ACH, card and other payment processing fees | 2,303 | 1,692 | 8,653 | ||||||
| Prepaid card fees | 16,163 | 14,282 | 54,627 | ||||||
|
Net realized and unrealized gains on commercial loans originated for sale |
10,763 | 11,729 | 20,498 | ||||||
| Gain on sale of investment securities | - | 26 | 41 | ||||||
| Change in value of investment in unconsolidated entity | - | (1,171) | (3,689) | ||||||
| Leasing income | 695 | 487 | 3,071 | ||||||
| Affinity fees | - | 102 | 281 | ||||||
| Gain on sale of IRA portfolio | - | - | 65,000 | ||||||
| Other non-interest income | 394 | 372 | 1,691 | ||||||
| Total non-interest income | 30,365 | 29,095 | 153,795 | ||||||
| Non-interest expense | |||||||||
| Salaries and employee benefits | 23,840 | 21,073 | 79,816 | ||||||
| Data processing expense | 1,269 | 2,005 | 6,187 | ||||||
| Legal expense | 1,324 | 2,431 | 7,845 | ||||||
| FDIC Insurance | 1,929 | 2,219 | 8,819 | ||||||
| Software | 2,921 | 3,291 | 13,304 | ||||||
| Losses and write downs on other real estate owned | - | 45 | - | ||||||
| Civil money penalty | - | (290) | (290) | ||||||
| Prepaid relationship exit expense | - | - | 672 | ||||||
| Lease termination expense | - | - | 395 | ||||||
| Other non-interest expense | 7,946 | 8,275 | 34,530 | ||||||
| Total non-interest expense | 39,229 | 39,049 | 151,278 | ||||||
| Income from continuing operations before income taxes | 23,446 | 19,420 | 119,781 | ||||||
| Income tax expense | 6,035 | 5,399 | 32,241 | ||||||
| Net income from continuing operations | 17,411 | 14,021 | 87,540 | ||||||
| Discontinued operations | |||||||||
| Income from discontinued operations before income taxes | 805 | 156 | 1,491 | ||||||
| Income tax expense | 286 | 37 | 354 | ||||||
| Net income from discontinued operations, net of tax | 519 | 119 | 1,137 | ||||||
| Net income available to common shareholders | $ | 17,930 | $ | 14,140 | $ | 88,677 | |||
| Net income per share from continuing operations - basic | $ | 0.31 | $ | 0.25 | $ | 1.55 | |||
| Net income per share from discontinued operations - basic | $ | 0.01 | $ | - | $ | 0.02 | |||
| Net income per share - basic | $ | 0.32 | $ | 0.25 | $ | 1.57 | |||
| Net income per share from continuing operations - diluted | $ | 0.31 | $ | 0.25 | $ | 1.53 | |||
| Net income per share from discontinued operations - diluted | $ | 0.01 | $ | - | $ | 0.02 | |||
| Net income per share - diluted | $ | 0.32 | $ | 0.25 | $ | 1.55 | |||
| Weighted average shares - basic | 56,522,015 | 56,141,830 | 56,343,845 | ||||||
| Weighted average shares - diluted | 56,876,662 | 57,023,121 | 57,068,306 | ||||||
| Balance sheet | March 31, | December 31, | September 30, | March 31, | ||||||||
| 2019 | 2018 | 2018 | 2018 | |||||||||
| (dollars in thousands) | ||||||||||||
| Assets: | ||||||||||||
| Cash and cash equivalents | ||||||||||||
| Cash and due from banks | $ | 11,678 | $ | 2,440 | $ | 2,245 | $ | 1,999 | ||||
| Interest earning deposits at Federal Reserve Bank | 714,514 | 551,862 | 710,816 | 508,847 | ||||||||
| Securities sold under agreements to resell | - | - | 64,518 | 64,312 | ||||||||
| Total cash and cash equivalents | 726,192 | 554,302 | 777,579 | 575,158 | ||||||||
| Investment securities, available-for-sale, at fair value | 1,368,602 | 1,236,324 | 1,274,417 | 1,381,020 | ||||||||
| Investment securities, held-to-maturity | 84,428 | 84,432 | 84,433 | 86,370 | ||||||||
| Commercial loans held for sale, at fair value | 570,426 | 688,471 | 308,470 | 349,806 | ||||||||
| Loans, net of deferred fees and costs | 1,510,395 | 1,501,976 | 1,493,932 | 1,459,881 | ||||||||
| Allowance for loan and lease losses | (9,954) | (8,653) | (8,092) | (7,285) | ||||||||
| Loans, net | 1,500,441 | 1,493,323 | 1,485,840 | 1,452,596 | ||||||||
| Federal Home Loan Bank & Atlantic Community Bancshares stock | 1,113 | 1,113 | 1,113 | 991 | ||||||||
| Premises and equipment, net | 18,056 | 18,895 | 17,686 | 19,052 | ||||||||
| Accrued interest receivable | 13,907 | 12,753 | 11,621 | 11,778 | ||||||||
| Intangible assets, net | 3,463 | 3,846 | 4,229 | 4,995 | ||||||||
| Other real estate owned | - | - | 405 | 405 | ||||||||
| Deferred tax asset, net | 18,423 | 21,622 | 40,991 | 38,139 | ||||||||
| Investment in unconsolidated entity | 58,258 | 59,273 | 64,212 | 70,016 | ||||||||
| Assets held for sale from discontinued operations | 188,025 | 197,831 | 226,026 | 289,038 | ||||||||
| Other assets | 75,642 | 65,726 | 63,178 | 89,736 | ||||||||
| Total assets | $ | 4,626,976 | $ | 4,437,911 | $ | 4,360,200 | $ | 4,369,100 | ||||
| Liabilities: | ||||||||||||
| Deposits | ||||||||||||
| Demand and interest checking | $ | 3,993,828 | $ | 3,904,638 | $ | 3,540,605 | $ | 3,461,881 | ||||
| Savings and money market | 31,470 | 31,076 | 317,453 | 493,288 | ||||||||
| Total deposits | 4,025,298 | 3,935,714 | 3,858,058 | 3,955,169 | ||||||||
| Securities sold under agreements to repurchase | 93 | 93 | 158 | 182 | ||||||||
| Subordinated debenture | 13,401 | 13,401 | 13,401 | 13,401 | ||||||||
| Long-term borrowings | 41,499 | 41,674 | 41,841 | 42,157 | ||||||||
| Other liabilities | 111,905 | 40,253 | 54,868 | 28,299 | ||||||||
| Total liabilities | $ | 4,192,196 | $ | 4,031,135 | $ | 3,968,326 | $ | 4,039,208 | ||||
| Shareholders' equity: | ||||||||||||
| Common stock - authorized, 75,000,000 shares of $1.00 par value; 56,568,004 and 56,307,088 shares issued and outstanding at March 31, 2019 and 2018, respectively | 56,568 | 56,446 | 56,446 | 56,307 | ||||||||
| Treasury stock (100,000 shares) | (866) | (866) | (866) | (866) | ||||||||
| Additional paid-in capital | 367,483 | 366,181 | 365,749 | 363,605 | ||||||||
| Accumulated earnings (deficit) | 17,113 | (817) | (7,936) | (75,345) | ||||||||
| Accumulated other comprehensive loss | (5,518) | (14,168) | (21,519) | (13,809) | ||||||||
| Total shareholders' equity | 434,780 | 406,776 | 391,874 | 329,892 | ||||||||
| Total liabilities and shareholders' equity | $ | 4,626,976 | $ | 4,437,911 | $ | 4,360,200 | $ | 4,369,100 | ||||
| Average balance sheet and net interest income | Three months ended March 31, 2019 | Three months ended March 31, 2018 | ||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||
| Average | Average | Average | Average | |||||||||||||||||||
| Assets: | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||
| Interest earning assets: | ||||||||||||||||||||||
| Loans net of deferred fees and costs ** | $ | 2,266,834 | $ | 30,161 | 5.32 | % | $ | 1,947,320 | $ | 23,039 | 4.73 | % | ||||||||||
| Leases - bank qualified* | 17,793 | 428 | 9.62 | % | 21,036 | 334 | 6.35 | % | ||||||||||||||
| Investment securities-taxable | 1,303,491 | 10,530 | 3.23 | % | 1,375,568 | 9,699 | 2.82 | % | ||||||||||||||
| Investment securities-nontaxable* | 7,546 | 59 | 3.13 | % | 9,893 | 75 | 3.03 | % | ||||||||||||||
| Interest earning deposits at Federal Reserve Bank | 423,024 | 2,502 | 2.37 | % | 502,233 | 1,832 | 1.46 | % | ||||||||||||||
|
Federal funds sold and securities purchased under agreement to resell |
- | - | - | 64,216 | 414 | 2.58 | % | |||||||||||||||
| Net interest earning assets | 4,018,688 | 43,680 | 4.35 | % | 3,920,266 | 35,393 | 3.61 | % | ||||||||||||||
| Allowance for loan and lease losses | (8,638 | ) | (6,976 | ) | ||||||||||||||||||
| Loans held for sale from discontinued operations | 173,800 | 2,025 | 4.66 | % | 276,370 | 2,527 | 3.66 | % | ||||||||||||||
| Other assets | 234,174 | 221,433 | ||||||||||||||||||||
| $ | 4,418,024 | $ | 4,411,093 | |||||||||||||||||||
| Liabilities and Shareholders' Equity: | ||||||||||||||||||||||
| Deposits: | ||||||||||||||||||||||
| Demand and interest checking | $ | 3,798,837 | $ | 8,833 | 0.93 | % | $ | 3,535,791 | $ | 4,301 | 0.49 | % | ||||||||||
| Savings and money market | 31,392 | 37 | 0.47 | % | 487,380 | 668 | 0.55 | % | ||||||||||||||
| Total deposits | 3,830,229 | 8,870 | 0.93 | % | 4,023,171 | 4,969 | 0.49 | % | ||||||||||||||
| Short-term borrowings | 74,386 | 503 | 2.70 | % | 24,844 | 104 | 1.67 | % | ||||||||||||||
| Securities sold under agreements to repurchase | 90 | - | 0.00 | % | 205 | - | 0.00 | % | ||||||||||||||
| Subordinated debentures | 13,401 | 195 | 5.82 | % | 13,401 | 160 | 4.78 | % | ||||||||||||||
| Total deposits and liabilities | 3,918,106 | 9,568 | 0.98 | % | 4,061,621 | 5,233 | 0.52 | % | ||||||||||||||
| Other liabilities | 79,140 | 22,452 | ||||||||||||||||||||
| Total liabilities | 3,997,246 | 4,084,073 | ||||||||||||||||||||
| Shareholders' equity | 420,778 | 327,020 | ||||||||||||||||||||
| $ | 4,418,024 | $ | 4,411,093 | |||||||||||||||||||
| Net interest income on tax equivalent basis* | $ | 36,137 | $ | 32,687 | ||||||||||||||||||
| Tax equivalent adjustment | 102 | 86 | ||||||||||||||||||||
| Net interest income | $ | 36,035 | $ | 32,601 | ||||||||||||||||||
| Net interest margin * | 3.41 | % | 3.12 | % | ||||||||||||||||||
| * Full taxable equivalent basis, using a statutory rate of 21% for 2019 and 2018. | ||||||||||||||||||||||
| ** Includes loans held for sale. | ||||||||||||||||||||||
| Allowance for loan and lease losses: | Three months ended | Year ended | ||||||||||
| March 31, | March 31, | December 31, | ||||||||||
| 2019 | 2018 | 2018 | ||||||||||
| (dollars in thousands) | ||||||||||||
| Balance in the allowance for loan and lease losses at beginning of period (1) | $ | 8,653 | $ | 7,096 | $ | 7,096 | ||||||
| Loans charged-off: | ||||||||||||
| SBA non-real estate | 322 | 388 | 1,348 | |||||||||
| SBA commercial mortgage | - | 157 | 157 | |||||||||
| Direct lease financing | 106 | 56 | 637 | |||||||||
| Other consumer loans | - | 14 | 21 | |||||||||
| Total | 428 | 615 | 2,163 | |||||||||
| Recoveries: | ||||||||||||
| SBA non-real estate | 17 | 40 | 57 | |||||||||
| SBA commercial mortgage | - | 6 | 13 | |||||||||
| Direct lease financing | 12 | 58 | 64 | |||||||||
| Other consumer loans | - | - | 1 | |||||||||
| Total | 29 | 104 | 135 | |||||||||
| Net charge-offs | 399 | 511 | 2,028 | |||||||||
| Provision charged to operations | 1,700 | 700 | 3,585 | |||||||||
| Balance in allowance for loan and lease losses at end of period | $ | 9,954 | $ | 7,285 | $ | 8,653 | ||||||
| Net charge-offs/average loans | 0.02% | 0.03% | 0.10% | |||||||||
| Net charge-offs/average loans (annualized) | 0.07% | 0.11% | 0.10% | |||||||||
| Net charge-offs/average assets | 0.01% | 0.01% | 0.05% | |||||||||
| (1) Excludes activity from assets held for sale from discontinued operations. | ||||||||||||
| Loan portfolio: | March 31, | December 31, | September 30, | March 31, | ||||||||
| 2019 | 2018 | 2018 | 2018 | |||||||||
| (in thousands) | ||||||||||||
| SBA non-real estate | $ | 76,112 | $ | 76,340 | $ | 74,408 | $ | 75,225 | ||||
| SBA commercial mortgage | 179,397 | 165,406 | 166,432 | 149,227 | ||||||||
| SBA construction | 23,979 | 21,636 | 17,978 | 20,143 | ||||||||
| Total SBA loans | 279,488 | 263,382 | 258,818 | 244,595 | ||||||||
| Direct lease financing | 384,930 | 394,770 | 393,135 | 382,284 | ||||||||
| SBLOC | 791,986 | 785,303 | 778,552 | 759,369 | ||||||||
| Other specialty lending | 34,425 | 31,836 | 40,799 | 45,729 | ||||||||
| Other consumer loans | 9,301 | 16,302 | 12,172 | 17,416 | ||||||||
| 1,500,130 | 1,491,593 | 1,483,476 | 1,449,393 | |||||||||
| Unamortized loan fees and costs | 10,265 | 10,383 | 10,456 | 10,488 | ||||||||
| Total loans, net of deferred fees and costs | $ | 1,510,395 | $ | 1,501,976 | $ | 1,493,932 | $ | 1,459,881 | ||||
| Small business lending portfolio: | March 31, | December 31, | September 30, | March 31, | ||||||||
| 2019 | 2018 | 2018 | 2018 | |||||||||
| (in thousands) | ||||||||||||
| SBA loans, including deferred fees and costs | 286,814 | 270,860 | 266,433 | 252,457 | ||||||||
| SBA loans included in HFS | 206,901 | 199,977 | 193,372 | 172,030 | ||||||||
| Total SBA loans | $ | 493,715 | $ | 470,837 | $ | 459,805 | $ | 424,487 | ||||
| Capital ratios: | Tier 1 capital | Tier 1 capital | Total capital | Common equity | ||||
| to average | to risk-weighted | to risk-weighted | tier 1 to risk | |||||
| assets ratio | assets ratio | assets ratio | weighted assets | |||||
| As of March 31, 2019 | ||||||||
| The Bancorp, Inc. | 9.90% | 23.64% | 24.18% | 23.64% | ||||
| The Bancorp Bank | 9.63% | 23.17% | 23.71% | 23.17% | ||||
| "Well capitalized" institution (under FDIC regulations) | 5.00% | 8.00% | 10.00% | 6.50% | ||||
| As of December 31, 2018 | ||||||||
| The Bancorp, Inc. | 10.11% | 20.64% | 21.07% | 20.64% | ||||
| The Bancorp Bank | 9.70% | 20.18% | 20.61% | 20.18% | ||||
| "Well capitalized" institution (under FDIC regulations) | 5.00% | 8.00% | 10.00% | 6.50% | ||||
| Three months ended | Year ended | |||||||||||
| March 31, | December 31, | |||||||||||
| 2019 | 2018 | 2018 | ||||||||||
| Selected operating ratios: | ||||||||||||
| Return on average assets (1) | 1.65% | 1.30% | 2.07% | |||||||||
| Return on average equity (1) | 17.28% | 17.54% | 24.26% | |||||||||
| Net interest margin | 3.41% | 3.12% | 3.19% | |||||||||
| (1) Annualized | ||||||||||||
| Book value per share table: | March 31, | December 31, | September 30, | March 31, | ||||||||
| 2019 | 2018 | 2018 | 2018 | |||||||||
| Book value per share | $ | 7.70 | $ | 7.22 | $ | 6.95 | $ | 5.87 | ||||
| Loan quality table: | March 31, | December 31, | September 30, | March 31, | ||||||||
| 2019 | 2018 | 2018 | 2018 | |||||||||
| Nonperforming loans to total loans (2) | 0.55% | 0.36% | 0.35% | 0.42% | ||||||||
| Nonperforming assets to total assets (2) | 0.18% | 0.12% | 0.13% | 0.15% | ||||||||
| Allowance for loan and lease losses to total loans | 0.66% | 0.58% | 0.54% | 0.50% | ||||||||
| Nonaccrual loans | $ | 5,863 | $ | 4,516 | $ | 4,234 | $ | 3,516 | ||||
| Other real estate owned | - | - | 405 | 405 | ||||||||
| Total nonperforming assets | $ | 5,863 | $ | 4,516 | $ | 4,639 | $ | 3,921 | ||||
| Loans 90 days past due still accruing interest | $ | 2,483 | $ | 954 | $ | 1,015 | $ | 2,643 | ||||
| (2) Nonperforming loan and asset ratios include nonaccrual loans and loans 90 days past due still accruing interest. | ||||||||||||
| Three months ended | ||||||||||||
| March 31, | December 31, | September 30, | March 31, | |||||||||
| 2019 | 2018 | 2018 | 2018 | |||||||||
| (in thousands) | ||||||||||||
| Gross dollar volume (GDV) (3): | ||||||||||||
| Prepaid card GDV | $ | 16,937,325 | $ | 13,526,647 | $ | 12,525,527 | $ | 13,402,496 | ||||
| (3) Gross dollar volume represents the total dollar amount spent on prepaid and debit cards issued by The Bancorp Bank. | ||||||||||||
| Business line quarterly summary: | ||||||||||||||
| Quarter ended March 31, 2019 | ||||||||||||||
| (dollars in millions) | ||||||||||||||
| Balances | Non interest income | |||||||||||||
| % Growth | % Growth | |||||||||||||
| Major business lines |
Average |
Balances* |
Year |
Linked |
Current |
Year |
||||||||
|
Loans |
||||||||||||||
| Institutional banking ** | 4.4% | $ | 792 | 4% | 4% | na | na | |||||||
| SBA | 5.6% | 494 | 16% | 19% | na | na | ||||||||
| Leasing | 6.3% | 395 | - | - | $ | 0.7 | 43% | |||||||
| Commercial real estate securitization | 5.9% | 364 | nm | nm | 10.8 | - | ||||||||
| Weighted average yield | 5.3% | $ | 2,045 | |||||||||||
|
|
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|
Deposits |
||||||||||||||
| Payment solutions (primarily prepaid) *** | 1.2% | $ | 2,542 | 15% | nm | $ | 16.2 | 13% | ||||||
| Card payment and ACH processing | 0.8% | 893 | - | nm | 2.3 | 36% | ||||||||
| * Loan categories based on period end balance and Payment Solutions based on average quarterly balances. | ||||||||||||||
| ** Comprised of SBLOC loans. | ||||||||||||||
| *** Includes $900,000 of fee income related to 2018 incentives. | ||||||||||||||
| Analysis of Walnut Street* marks: | ||||||||||
| Loan activity | Marks | |||||||||
| (dollars in millions) | ||||||||||
| Original Walnut Street loan balance, December 31, 2014 | $ | 267 | ||||||||
| Marks through December 31, 2014 sale date | (58 | ) | $ | (58 | ) | |||||
| Sales price of Walnut Street | 209 | |||||||||
| Equity investment from independent investor | (16 | ) | ||||||||
| December 31, 2014 Bancorp book value | 193 | |||||||||
| Additional marks 2015 - 2018 | (46 | ) | (46 | ) | ||||||
| 2019 Marks | - | - | ||||||||
| Payments received | (89 | ) | ||||||||
| March 31, 2019 Bancorp book value** | $ | 58 | ||||||||
| Total marks | $ | (104 | ) | |||||||
| Divided by: | ||||||||||
| Original Walnut Street loan balance | $ | 267 | ||||||||
| Percentage of total mark to original balance | 39 | % | ||||||||
| * Walnut Street is the investment in unconsolidated entity on the balance sheet which reflects the Bank's investment in a securitization of certain loans from the Bank's discontinued loan portfolio. | ||||||||||
| ** Approximately 44% of expected principal recoveries were from loans and properties pending liquidation or other resolution as of March 31, 2019. | ||||||||||
| Walnut Street portfolio composition as of March 31, 2019 | ||||||||||
| Collateral type | % of Portfolio | |||||||||
| Commercial real estate non-owner occupied | ||||||||||
| Retail | 52.2 | % | ||||||||
| Office | 13.2 | % | ||||||||
| Other | 5.9 | % | ||||||||
| Construction and land | 18.4 | % | ||||||||
| Commercial non real estate and industrial | 0.5 | % | ||||||||
| First mortgage residential owner occupied | 6.1 | % | ||||||||
| First mortgage residential non-owner occupied | 2.8 | % | ||||||||
| Other | 0.9 | % | ||||||||
| Total | 100.0 | % | ||||||||
| Cumulative analysis of marks on discontinued commercial loan principal as of March 31, 2019 | ||||||||
| Discontinued | Cumulative | % to original | ||||||
| loan principal | marks | principal | ||||||
| (dollars in millions) | ||||||||
| Commercial loan discontinued principal before marks | $ | 115 | ||||||
| Florida mall held in discontinued other real estate owned | 42 | $ | 27 | |||||
| Previous mark charges | 14 | 14 | ||||||
| Mark at March 31, 2019 | 7 | |||||||
| Total | $ | 171 | $ | 48 | 28% | |||
|
Analysis of discontinued loan relationships as of March 31, 2019 |
||||||||||||||||||
| Performing | Nonperforming | Total | Performing | Nonperforming | Total | |||||||||||||
| loan principal | loan principal | loan principal | loan marks | loan marks | marks | |||||||||||||
| (in millions) | ||||||||||||||||||
| 6 loan relationships > $7 million | $ | 61 | $ | 14 | $ | 75 | $ | 3 | $ | 2 | $ | 5 | ||||||
| Loan relationships < $7 million |
28 |
5 |
33 | 2 | - | 2 | ||||||||||||
| $ |
89 |
$ |
19 |
$ | 108 | $ | 5 | $ | 2 | $ | 7 | |||||||
| Quarterly activity for discontinued commercial loan principal | |||
| Commercial | |||
| loan principal | |||
| (in millions) | |||
| Commercial loan discontinued principal December 31, 2018 before marks | $ | 125 | |
| Quarterly paydowns | (10) | ||
| Commercial loan discontinued principal March 31, 2019 before marks | $ | 115 | |
| Marks March 31, 2019 | (7) | ||
| Net commercial loan exposure March 31, 2019 | $ | 108 | |
| Residential mortgages | 51 | ||
| Net loans | $ | 159 | |
| Florida Mall in other real estate owned | 15 | ||
| 18 Properties in other real estate owned | 14 | ||
| Total discontinued assets at March 31, 2019 | $ | 188 | |
| Discontinued commercial loan composition March 31, 2019 | ||||||||
| Collateral type |
Unpaid |
Mark |
Mark as % |
|||||
| (dollars in millions) | ||||||||
| Commercial real estate - non-owner occupied: | ||||||||
| Retail | $ | 4 | $ | 0.6 | 14% | |||
| Office | 4 | 0.0 | - | |||||
| Other | 38 | 1.9 | 5% | |||||
| Construction and land | 24 | 0.1 | - | |||||
| Commercial non-real estate and industrial | 10 | 0.5 | 4% | |||||
| 1 to 4 family construction | 13 | 3.8 | 30% | |||||
| First mortgage residential non-owner occupied | 12 | 0.4 | 4% | |||||
| Commercial real estate owner occupied: | ||||||||
| Retail | 8 | - | - | |||||
| Office | - | - | 4% | |||||
| Other | - | - | 1% | |||||
| Residential junior mortgage | 1 | - | - | |||||
| Other | 1 | - | - | |||||
| Total | $ | 115 | ||||||
| Less: mark | (7) | |||||||
| Net commercial loan exposure March 31, 2019 | $ | 108 | $ | 7.3 | 6% | |||
