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.
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Financial highlights |
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(unaudited) |
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Three months ended |
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Nine months ended |
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September 30, |
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September 30, |
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Condensed income statement |
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2019 |
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2018 |
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2019 |
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2018 |
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(dollars in thousands except per share data) |
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Net interest income |
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$ |
37,560 |
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$ |
30,632 |
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$ |
106,109 |
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$ |
90,240 |
Provision for loan and lease losses |
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|
650 |
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1,060 |
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2,950 |
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|
2,660 |
Non-interest income |
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|
|
|
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|
|
|
Service fees on deposit accounts |
|
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8 |
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|
402 |
|
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69 |
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3,624 |
ACH, card and other payment processing fees |
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2,590 |
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2,281 |
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7,414 |
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6,275 |
Prepaid and debit card and related fees |
|
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16,134 |
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|
13,204 |
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48,137 |
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41,559 |
Net realized and unrealized gains on commercial loans originated for sale |
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13,704 |
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8,999 |
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24,319 |
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20,274 |
Change in value of investment in unconsolidated entity |
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- |
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(78) |
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- |
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(2,981) |
Leasing related income |
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589 |
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|
758 |
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|
2,311 |
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2,353 |
Affinity fees |
|
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- |
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84 |
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- |
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|
271 |
Gain on sale of IRA portfolio |
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- |
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65,000 |
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- |
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65,000 |
Other non-interest income |
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|
490 |
|
|
320 |
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|
1,379 |
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|
730 |
Total non-interest income |
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33,515 |
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90,970 |
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83,629 |
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137,105 |
Non-interest expense |
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|
Salaries and employee benefits |
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24,526 |
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19,243 |
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70,192 |
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|
59,213 |
Data processing expense |
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|
1,192 |
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|
1,380 |
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|
3,684 |
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|
4,741 |
Legal expense |
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1,466 |
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|
1,610 |
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|
4,324 |
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5,811 |
FDIC Insurance |
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|
860 |
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|
2,241 |
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4,884 |
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7,389 |
Software |
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|
3,199 |
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3,593 |
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|
9,180 |
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9,879 |
SEC settlement |
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1,400 |
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- |
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1,400 |
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- |
Lease termination expense |
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- |
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- |
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|
908 |
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|
395 |
Other non-interest expense |
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9,408 |
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9,232 |
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26,227 |
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|
26,230 |
Total non-interest expense |
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42,051 |
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37,299 |
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120,799 |
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113,658 |
Income from continuing operations before income taxes |
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28,374 |
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83,243 |
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|
65,989 |
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|
111,027 |
Income tax expense |
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7,975 |
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|
21,942 |
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|
17,585 |
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|
29,550 |
Net income from continuing operations |
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20,399 |
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61,301 |
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|
48,404 |
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|
81,477 |
Discontinued operations |
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Income (loss) from discontinued operations before income taxes |
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151 |
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(370) |
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1,875 |
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(264) |
Income tax expense (benefit) |
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|
125 |
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(346) |
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|
574 |
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(345) |
Net income (loss) from discontinued operations, net of tax |
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26 |
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(24) |
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1,301 |
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|
81 |
Net income |
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$ |
20,425 |
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$ |
61,277 |
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$ |
49,705 |
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$ |
81,558 |
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Net income per share from continuing operations - basic |
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$ |
0.36 |
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$ |
1.09 |
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$ |
0.85 |
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$ |
1.45 |
Net income per share from discontinued operations - basic |
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$ |
- |
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$ |
- |
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$ |
0.02 |
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$ |
- |
Net income per share - basic |
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$ |
0.36 |
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$ |
1.09 |
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$ |
0.87 |
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$ |
1.45 |
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Net income per share from continuing operations - diluted |
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$ |
0.36 |
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$ |
1.07 |
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$ |
0.85 |
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$ |
1.43 |
Net income per share from discontinued operations - diluted |
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$ |
- |
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$ |
- |
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$ |
0.02 |
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$ |
- |
Net income per share - diluted |
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$ |
0.36 |
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$ |
1.07 |
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$ |
0.87 |
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$ |
1.43 |
Weighted average shares - basic |
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56,907,815 |
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56,442,222 |
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56,712,084 |
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|
56,309,390 |
Weighted average shares - diluted |
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|
57,413,297 |
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57,103,301 |
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57,152,371 |
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57,084,844 |
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Balance sheet |
September 30, |
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June 30, |
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December 31, |
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September 30, |
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2019 |
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2019 |
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2018 |
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2018 |
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(dollars in thousands) |
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Assets: |
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Cash and cash equivalents |
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| Cash and due from banks | $ |
24,068 |
$ |
27,450 |
$ |
2,440 |
$ |
2,245 |
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| Interest earning deposits at Federal Reserve Bank |
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932,440 |
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284,823 |
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551,862 |
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710,816 |
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| Securities sold under agreements to resell |
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- |
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- |
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- |
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64,518 |
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| Total cash and cash equivalents |
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956,508 |
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312,273 |
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554,302 |
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777,579 |
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Investment securities, available-for-sale, at fair value |
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1,382,437 |
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1,361,779 |
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1,236,324 |
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1,274,417 |
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Investment securities, held-to-maturity |
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84,399 |
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84,414 |
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84,432 |
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84,433 |
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Commercial loans held for sale, at fair value |
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489,240 |
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934,452 |
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688,471 |
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308,470 |
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Loans, net of deferred fees and costs |
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1,683,377 |
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1,561,451 |
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1,501,976 |
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1,496,773 |
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Allowance for loan and lease losses |
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(10,360) |
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(9,989) |
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(8,653) |
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(8,092) |
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Loans, net |
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1,673,017 |
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1,551,462 |
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1,493,323 |
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1,488,681 |
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Federal Home Loan Bank & Atlantic Community Bancshares stock |
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4,342 |
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6,342 |
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1,113 |
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1,113 |
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Premises and equipment, net |
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17,857 |
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17,380 |
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18,895 |
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17,686 |
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Accrued interest receivable |
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13,898 |
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14,567 |
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12,753 |
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11,621 |
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Intangible assets, net |
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2,698 |
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3,081 |
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3,846 |
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4,229 |
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Other real estate owned |
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- |
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- |
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- |
|
405 |
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Deferred tax asset, net |
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13,006 |
|
14,574 |
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21,622 |
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40,991 |
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Investment in unconsolidated entity |
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49,431 |
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58,012 |
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59,273 |
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64,212 |
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Assets held for sale from discontinued operations |
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162,098 |
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169,109 |
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197,831 |
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226,026 |
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Other assets |
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94,605 |
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76,123 |
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65,726 |
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60,337 |
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| Total assets | $ |
4,943,536 |
$ |
4,603,568 |
$ |
4,437,911 |
$ |
4,360,200 |
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Liabilities: |
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Deposits |
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| Demand and interest checking | $ |
3,844,747 |
$ |
3,964,905 |
$ |
3,904,638 |
$ |
3,540,605 |
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| Savings and money market |
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25,950 |
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26,841 |
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31,076 |
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317,453 |
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| Time deposits |
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475,000 |
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- |
|
- |
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- |
||||
| Total deposits |
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4,345,697 |
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3,991,746 |
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3,935,714 |
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3,858,058 |
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Securities sold under agreements to repurchase |
|
93 |
|
93 |
|
93 |
|
158 |
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Short-term borrowings |
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- |
|
45,000 |
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- |
|
- |
||||
Subordinated debenture |
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13,401 |
|
13,401 |
|
13,401 |
|
13,401 |
||||
Long-term borrowings |
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41,166 |
|
41,334 |
|
41,674 |
|
41,841 |
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Other liabilities |
|
59,005 |
|
53,862 |
|
40,253 |
|
54,868 |
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| 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 |
||||
|
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Average balance sheet and net interest income |
Three months ended September 30, 2019 |
Three months ended September 30, 2018 |
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(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% |
||||||
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|
|
|
|
|
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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 |
|
|
|||||||||
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|
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|
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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% |
||||||
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|
|
|
|
|
|||||||||||
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% |
|||
