WILMINGTON, Del.--(BUSINESS WIRE)--The Bancorp, Inc. ("The Bancorp") (NASDAQ: TBBK), a financial holding company, today reported financial results for the second quarter of 2021.
Highlights
- For the quarter ended June 30, 2021, The Bancorp earned net income of $29.2 million from continuing operations, and $0.50 diluted earnings per share from combined continuing and discontinued operations.
- Return on assets and equity for the quarter ended June 30, 2021 amounted to 1.7% and 19%, respectively, compared to 1.3% and 16%, respectively, for the quarter ended June 30, 2020 (all percentages “annualized.”)
- Net interest margin amounted to 3.19% for the quarter ended June 30, 2021, compared to 3.53% for the quarter ended June 30, 2020 and 3.34% for the quarter ended March 31, 2021.
- Net interest income increased 8% to $54.1 million for the quarter ended June 30, 2021, compared to $50.2 million for the quarter ended June 30, 2020.
- Average loans and leases, including loans at fair value, increased 16% to $4.58 billion for the quarter ended June 30, 2021, compared to $3.93 billion for the quarter ended June 30, 2020.
- Prepaid, debit card and other payment related fees increased 5% to $21.4 million for the quarter ended June 30, 2021, compared to $20.4 million for the quarter ended June 30, 2020.
- Gross dollar volume (GDV), representing the total amounts spent on prepaid and debit cards, increased 15% for the quarter ended June 30, 2021 compared to the quarter ended June 30, 2020.
- SBLOC (securities backed lines of credit), IBLOC (insurance backed lines of credit) and advisor financing loans collectively increased 38% year over year and 7% quarter over quarter to $1.80 billion at June 30, 2021.
- Small Business Loans, including those held at fair value, increased 15% year over year to $689.5 million at June 30, 2021. That growth is exclusive of Paycheck Protection Program (PPP) loan balances of $129.4 million and $207.9 million, respectively, at June 30, 2021 and June 30, 2020.
- Direct lease financing balances increased 20% year over year to $506.4 million at June 30, 2021.
- The average interest rate on $6.38 billion of average deposits and interest-bearing liabilities during the second quarter of 2021 was 0.18%. Average deposits of $6.26 billion for the second quarter 2021, reflected an increase of 17% over the $5.37 billion in average deposits for the quarter ended June 30, 2020.
- Of the $48 million of loan balances with Covid related payment deferrals at March 31, 2021, only borrowers representing $2.6 million of balances had not made their payments due on July 5, 2021, with an additional $968,000 remaining in deferral as of that date. Those amounts represent .08% of total loans at June 30, 2021 compared to 1.0% at March 31, 2021.
- Consolidated and The Bancorp Bank (“the Bank”) leverage ratios were 8.52% and 8.73%, respectively, at June 30, 2021. The Bancorp and its subsidiary, The Bank, remain well capitalized.
- Book value per common share at June 30, 2021 was $10.77 per share compared to $9.28 per share at June 30, 2020, an increase of 16%, primarily as a result of retained earnings per share.
- The Bancorp repurchased 449,315 shares of its common stock at an average cost of $22.26 per share during the quarter ended June 30, 2021.
Damian Kozlowski, The Bancorp’s Chief Executive Officer, said, “We had another strong quarter in both growth and profitability. Growth continues to be supported by the acquisition of new clients and the expansion of our capabilities and solutions in our payments ecosystem. Based on our year-to-date performance of $0.94 a share and our 2021 outlook, we are raising our guidance to $1.78 a share. The $1.78 does not include the impact of buybacks in the 3rd and 4th quarters. We continue to see tailwinds that should drive continued growth in 2021 earnings and beyond. We will issue preliminary 2022 per share guidance in our 3rd quarter earnings release. Current trends would suggest income growth for 2022 of 20% or more over our revised 2021 guidance.”
The Bancorp reported net income of $29.4 million, or $0.50 per diluted share, for the quarter ended June 30, 2021, compared to net income of $20.1 million, or $0.35 per diluted share, for the quarter ended June 30, 2020. 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 8.52%, 15.39%, 15.78% and 15.39%, 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, July 30, 2021 by clicking on the webcast link on The Bancorp's homepage at www.thebancorp.com. Or, you may dial 844.775.2543, access code 2868852. You may listen to the replay of the webcast following the live call on The Bancorp's investor relations website or telephonically until Friday, August 6, 2021 by dialing 855.859.2056, access code 2868852.
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., 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. By its company-wide commitment to excellence, The Bancorp has also been ranked as one of the 100 Fastest-Growing Companies by Fortune, a Top 50 Employer by Equal Opportunity Magazine, and was selected to be included in the S&P Small Cap 600. 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 “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.
|
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three months ended
|
|
Six months ended
|
||||||||||||
Condensed income statement |
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
|
(dollars in thousands, except per share data) |
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Net interest income |
$ |
54,069 |
|
|
$ |
50,246 |
|
|
$ |
107,826 |
|
|
$ |
93,157 |
|
Provision for credit losses |
|
(951 |
) |
|
|
922 |
|
|
|
(129 |
) |
|
|
4,501 |
|
Non-interest income |
|
|
|
|
|
|
|
||||||||
ACH, card and other payment processing fees |
|
1,904 |
|
|
|
1,707 |
|
|
|
3,700 |
|
|
|
3,553 |
|
Prepaid, debit card and related fees |
|
19,447 |
|
|
|
18,673 |
|
|
|
38,655 |
|
|
|
37,213 |
|
Net realized and unrealized gains (losses) on commercial |
|
|
|
|
|
|
|
||||||||
loans, at fair value |
|
2,579 |
|
|
|
(940 |
) |
|
|
4,575 |
|
|
|
(6,096 |
) |
Change in value of investment in unconsolidated entity |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(45 |
) |
Leasing related income |
|
1,767 |
|
|
|
443 |
|
|
|
2,732 |
|
|
|
1,276 |
|
Other non-interest income |
|
164 |
|
|
|
483 |
|
|
|
273 |
|
|
|
1,064 |
|
Total non-interest income |
|
25,861 |
|
|
|
20,366 |
|
|
|
49,935 |
|
|
|
36,965 |
|
Non-interest expense |
|
|
|
|
|
|
|
||||||||
Salaries and employee benefits |
|
27,087 |
|
|
|
25,492 |
|
|
|
52,745 |
|
|
|
48,233 |
|
Data processing expense |
|
1,146 |
|
|
|
1,177 |
|
|
|
2,272 |
|
|
|
2,346 |
|
Legal expense |
|
2,044 |
|
|
|
2,229 |
|
|
|
4,098 |
|
|
|
3,142 |
|
FDIC insurance |
|
2,589 |
|
|
|
2,918 |
|
|
|
4,969 |
|
|
|
5,507 |
|
Software |
|
3,706 |
|
|
|
3,386 |
|
|
|
7,390 |
|
|
|
6,863 |
|
Other non-interest expense |
|
7,311 |
|
|
|
7,418 |
|
|
|
14,292 |
|
|
|
14,947 |
|
Total non-interest expense |
|
43,883 |
|
|
|
42,620 |
|
|
|
85,766 |
|
|
|
81,038 |
|
Income from continuing operations before income taxes |
|
36,998 |
|
|
|
27,070 |
|
|
|
72,124 |
|
|
|
44,583 |
|
Income tax expense |
|
7,840 |
|
|
|
6,787 |
|
|
|
16,906 |
|
|
|
11,139 |
|
Net income from continuing operations |
|
29,158 |
|
|
|
20,283 |
|
|
|
55,218 |
|
|
|
33,444 |
|
Discontinued operations |
|
|
|
|
|
|
|
||||||||
Income (loss) from discontinued operations before income taxes |
|
361 |
|
|
|
(274 |
) |
|
|
237 |
|
|
|
(1,049 |
) |
Income tax expense (benefit) |
|
84 |
|
|
|
(59 |
) |
|
|
55 |
|
|
|
(264 |
) |
Net income (loss) from discontinued operations, net of tax |
|
277 |
|
|
|
(215 |
) |
|
|
182 |
|
|
|
(785 |
) |
Net income |
$ |
29,435 |
|
|
$ |
20,068 |
|
|
$ |
55,400 |
|
|
$ |
32,659 |
|
|
|
|
|
|
|
|
|
||||||||
Net income per share from continuing operations - basic |
$ |
0.51 |
|
|
$ |
0.35 |
|
|
$ |
0.96 |
|
|
$ |
0.58 |
|
Net income (loss) per share from discontinued operations - basic |
$ |
— |
|
|
$ |
— |
|
|
$ |
0.01 |
|
|
$ |
(0.01 |
) |
Net income per share - basic |
$ |
0.51 |
|
|
$ |
0.35 |
|
|
$ |
0.97 |
|
|
$ |
0.57 |
|
|
|
|
|
|
|
|
|
||||||||
Net income per share from continuing operations - diluted |
$ |
0.49 |
|
|
$ |
0.35 |
|
|
$ |
0.93 |
|
|
$ |
0.58 |
|
Net income (loss) per share from discontinued operations - diluted |
$ |
0.01 |
|
|
$ |
— |
|
|
$ |
0.01 |
|
|
$ |
(0.01 |
) |
Net income per share - diluted |
$ |
0.50 |
|
|
$ |
0.35 |
|
|
$ |
0.94 |
|
|
$ |
0.57 |
|
Weighted average shares - basic |
|
57,230,576 |
|
|
|
57,489,719 |
|
|
|
57,232,557 |
|
|
|
57,355,282 |
|
Weighted average shares - diluted |
|
59,022,925 |
|
|
|
57,800,115 |
|
|
|
59,086,956 |
|
|
|
57,856,791 |
|
Note: Compared to higher rates in recent periods, the effective tax rate in the second quarter of 2021 approximated 21% as a result of the impact of excess tax deductions related to stock-based compensation, recorded as a discrete item in the second quarter. The large deductions and tax benefit resulted from the increase in the Company’s stock price as compared to the original grant date.
Balance sheet |
June 30,
|
|
March 31,
|
|
December 31,
|
|
June 30,
|
||||||||
|
(dollars in thousands) |
||||||||||||||
Assets: |
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents |
|
|
|
|
|
|
|
||||||||
Cash and due from banks |
$ |
5,470 |
|
|
$ |
7,838 |
|
|
$ |
5,984 |
|
|
$ |
5,094 |
|
Interest earning deposits at Federal Reserve Bank |
|
583,498 |
|
|
|
1,738,749 |
|
|
|
339,531 |
|
|
|
475,627 |
|
Total cash and cash equivalents |
|
588,968 |
|
|
|
1,746,587 |
|
|
|
345,515 |
|
|
|
480,721 |
|
|
|
|
|
|
|
|
|
||||||||
Investment securities, available-for-sale, at fair value |
|
1,106,075 |
|
|
|
1,128,459 |
|
|
|
1,206,164 |
|
|
|
1,324,447 |
|
Commercial loans, at fair value (held-for-sale at June 30, 2020) |
|
1,690,216 |
|
|
|
1,780,762 |
|
|
|
1,810,812 |
|
|
|
1,807,630 |
|
Loans, net of deferred fees and costs |
|
2,915,344 |
|
|
|
2,827,076 |
|
|
|
2,652,323 |
|
|
|
2,322,737 |
|
Allowance for credit losses |
|
(15,292 |
) |
|
|
(16,419 |
) |
|
|
(16,082 |
) |
|
|
(14,625 |
) |
Loans, net |
|
2,900,052 |
|
|
|
2,810,657 |
|
|
|
2,636,241 |
|
|
|
2,308,112 |
|
Federal Home Loan Bank and Atlantic Central Bankers Bank stock |
|
1,667 |
|
|
|
1,368 |
|
|
|
1,368 |
|
|
|
1,368 |
|
Premises and equipment, net |
|
17,392 |
|
|
|
17,196 |
|
|
|
17,608 |
|
|
|
16,701 |
|
Accrued interest receivable |
|
18,668 |
|
|
|
20,164 |
|
|
|
20,458 |
|
|
|
18,897 |
|
Intangible assets, net |
|
2,646 |
|
|
|
2,746 |
|
|
|
2,845 |
|
|
|
2,710 |
|
Deferred tax asset, net |
|
10,923 |
|
|
|
10,900 |
|
|
|
9,757 |
|
|
|
7,921 |
|
Investment in unconsolidated entity, at fair value |
|
24,988 |
|
|
|
31,047 |
|
|
|
31,294 |
|
|
|
34,064 |
|
Assets held-for-sale from discontinued operations |
|
97,496 |
|
|
|
106,925 |
|
|
|
113,650 |
|
|
|
128,463 |
|
Other assets |
|
91,516 |
|
|
|
90,530 |
|
|
|
81,129 |
|
|
|
83,003 |
|
Total assets |
$ |
6,550,607 |
|
|
$ |
7,747,341 |
|
|
$ |
6,276,841 |
|
|
$ |
6,214,037 |
|
|
|
|
|
|
|
|
|
||||||||
Liabilities: |
|
|
|
|
|
|
|
||||||||
Deposits |
|
|
|
|
|
|
|
||||||||
Demand and interest checking |
$ |
5,225,024 |
|
|
$ |
6,231,220 |
|
|
$ |
5,205,010 |
|
|
$ |
5,089,741 |
|
Savings and money market |
|
459,688 |
|
|
|
690,281 |
|
|
|
257,050 |
|
|
|
455,458 |
|
Total deposits |
|
5,684,712 |
|
|
|
6,921,501 |
|
|
|
5,462,060 |
|
|
|
5,545,199 |
|
|
|
|
|
|
|
|
|
||||||||
Securities sold under agreements to repurchase |
|
42 |
|
|
|
42 |
|
|
|
42 |
|
|
|
42 |
|
Senior debt |
|
98,498 |
|
|
|
98,406 |
|
|
|
98,314 |
|
|
|
— |
|
Subordinated debenture |
|
13,401 |
|
|
|
13,401 |
|
|
|
13,401 |
|
|
|
13,401 |
|
Other long-term borrowings |
|
39,901 |
|
|
|
40,085 |
|
|
|
40,277 |
|
|
|
40,639 |
|
Other liabilities |
|
94,944 |
|
|
|
77,142 |
|
|
|
81,583 |
|
|
|
81,677 |
|
Total liabilities |
$ |
5,931,498 |
|
|
$ |
7,150,577 |
|
|
$ |
5,695,677 |
|
|
$ |
5,680,958 |
|
|
|
|
|
|
|
|
|
||||||||
Shareholders' equity: |
|
|
|
|
|
|
|
||||||||
Common stock - authorized, 75,000,000 shares of $1.00 par value; 57,458,287 and 57,455,308 shares issued and outstanding at June 30, 2021 and 2020, respectively |
|
57,458 |
|
|
|
57,248 |
|
|
|
57,551 |
|
|
|
57,455 |
|
Additional paid-in capital |
|
363,241 |
|
|
|
370,481 |
|
|
|
377,452 |
|
|
|
373,812 |
|
Retained earnings |
|
183,853 |
|
|
|
154,418 |
|
|
|
128,453 |
|
|
|
81,028 |
|
Accumulated other comprehensive income |
|
14,557 |
|
|
|
14,617 |
|
|
|
17,708 |
|
|
|
20,784 |
|
Total shareholders' equity |
|
619,109 |
|
|
|
596,764 |
|
|
|
581,164 |
|
|
|
533,079 |
|
|
|
|
|
|
|
|
|
||||||||
Total liabilities and shareholders' equity |
$ |
6,550,607 |
|
|
$ |
7,747,341 |
|
|
$ |
6,276,841 |
|
|
$ |
6,214,037 |
|
Average balance sheet and net interest income |
Three months ended June 30, 2021 |
|
Three months ended June 30, 2020 |
||||||||||||||||
|
(dollars in thousands; unaudited) |
||||||||||||||||||
Assets: |
Average
|
|
Interest |
|
Average
|
|
Average
|
|
Interest |
|
Average
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest earning assets: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loans, net of deferred fees and costs** |
$ |
4,572,712 |
|
|
$ |
49,378 |
|
4.32 |
% |
|
$ |
3,925,515 |
|
|
$ |
41,448 |
|
4.22 |
% |
Leases-bank qualified* |
|
5,783 |
|
|
|
96 |
|
6.64 |
% |
|
|
9,217 |
|
|
|
162 |
|
7.03 |
% |
Investment securities-taxable |
|
1,081,419 |
|
|
|
7,201 |
|
2.66 |
% |
|
|
1,334,368 |
|
|
|
10,188 |
|
3.05 |
% |
Investment securities-nontaxable* |
|
3,878 |
|
|
|
32 |
|
3.30 |
% |
|
|
4,402 |
|
|
|
35 |
|
3.18 |
% |
Interest earning deposits at Federal Reserve Bank |
|
1,120,039 |
|
|
|
300 |
|
0.11 |
% |
|
|
426,174 |
|
|
|
107 |
|
0.10 |
% |
Net interest earning assets |
|
6,783,831 |
|
|
|
57,007 |
|
3.36 |
% |
|
|
5,699,676 |
|
|
|
51,940 |
|
3.65 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance for credit losses |
|
(16,406 |
) |
|
|
|
|
|
|
(14,822 |
) |
|
|
|
|
||||
Assets held-for-sale from discontinued operations |
|
98,895 |
|
|
|
781 |
|
3.16 |
% |
|
|
130,530 |
|
|
|
1,094 |
|
3.35 |
% |
Other assets |
|
201,539 |
|
|
|
|
|
|
|
228,443 |
|
|
|
|
|
||||
|
$ |
7,067,859 |
|
|
|
|
|
|
$ |
6,043,827 |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities and Shareholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Demand and interest checking |
$ |
5,736,776 |
|
|
$ |
1,327 |
|
0.09 |
% |
|
$ |
5,140,167 |
|
|
$ |
1,390 |
|
0.11 |
% |
Savings and money market |
|
526,112 |
|
|
|
192 |
|
0.15 |
% |
|
|
234,201 |
|
|
|
120 |
|
0.20 |
% |
Total deposits |
|
6,262,888 |
|
|
|
1,519 |
|
0.10 |
% |
|
|
5,374,368 |
|
|
|
1,510 |
|
0.11 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Short-term borrowings |
|
— |
|
|
|
— |
|
— |
|
|
|
16,428 |
|
|
|
15 |
|
0.37 |
% |
Repurchase agreements |
|
41 |
|
|
|
— |
|
— |
|
|
|
41 |
|
|
|
— |
|
— |
|
Subordinated debentures |
|
13,401 |
|
|
|
112 |
|
3.34 |
% |
|
|
13,401 |
|
|
|
128 |
|
3.82 |
% |
Senior debt |
|
100,239 |
|
|
|
1,280 |
|
5.11 |
% |
|
|
— |
|
|
|
— |
|
— |
|
Total deposits and liabilities |
|
6,376,569 |
|
|
|
2,911 |
|
0.18 |
% |
|
|
5,404,238 |
|
|
|
1,653 |
|
0.12 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other liabilities |
|
83,353 |
|
|
|
|
|
|
|
123,997 |
|
|
|
|
|
||||
Total liabilities |
|
6,459,922 |
|
|
|
|
|
|
|
5,528,235 |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Shareholders' equity |
|
607,937 |
|
|
|
|
|
|
|
515,592 |
|
|
|
|
|
||||
|
$ |
7,067,859 |
|
|
|
|
|
|
$ |
6,043,827 |
|
|
|
|
|
||||
Net interest income on tax equivalent basis* |
|
|
$ |
54,877 |
|
|
|
|
|
$ |
51,381 |
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Tax equivalent adjustment |
|
|
|
27 |
|
|
|
|
|
|
41 |
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net interest income |
|
|
$ |
54,850 |
|
|
|
|
|
$ |
51,340 |
|
|
||||||
Net interest margin * |
|
|
|
|
3.19 |
% |
|
|
|
|
|
3.53 |
% |
||||||
* Full taxable equivalent basis, using a statutory Federal tax rate of 21% for 2021 and 2020.
** Includes commercial loans, at fair value for 2021 previously classified as held-for-sale at June 30, 2020. All periods include non-accrual loans.
NOTE: In the table above, the 2021 interest on loans reflects $3.0 million of 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. These fees are not expected to recur. Interest on loans also includes $1.3 million of interest and fees on PPP loans. In 2020 the table above includes comparable PPP interest and fees of $1.6 million. Increases in interest earning deposits at the Federal Reserve Bank reflect increased deposits resulting from stimulus payments distributed to a large segment of the population, resulting from December 2020 federal legislation.
Average balance sheet and net interest income |
Six months ended June 30, 2021 |
|
Six months ended June 30, 2020 |
||||||||||||||||
|
(dollars in thousands; unaudited) |
||||||||||||||||||
Assets: |
Average
|
|
Interest |
|
Average
|
|
Average
|
|
Interest |
|
Average
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest earning assets: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loans, net of deferred fees and costs** |
$ |
4,524,911 |
|
|
$ |
97,189 |
|
4.30 |
% |
|
$ |
3,593,921 |
|
|
$ |
80,607 |
|
4.49 |
% |
Leases - bank qualified* |
|
6,379 |
|
|
|
214 |
|
6.71 |
% |
|
|
10,096 |
|
|
|
362 |
|
7.17 |
% |
Investment securities-taxable |
|
1,136,631 |
|
|
|
16,009 |
|
2.82 |
% |
|
|
1,364,956 |
|
|
|
20,683 |
|
3.03 |
% |
Investment securities-nontaxable* |
|
3,960 |
|
|
|
67 |
|
3.38 |
% |
|
|
4,788 |
|
|
|
75 |
|
3.13 |
% |
Interest earning deposits at Federal Reserve Bank |
|
935,239 |
|
|
|
483 |
|
0.10 |
% |
|
|
460,025 |
|
|
|
1,730 |
|
0.75 |
% |
Net interest earning assets |
|
6,607,120 |
|
|
|
113,962 |
|
3.45 |
% |
|
|
5,433,786 |
|
|
|
103,457 |
|
3.81 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance for credit losses |
|
(16,241 |
) |
|
|
|
|
|
|
(12,532 |
) |
|
|
|
|
||||
Assets held for sale from discontinued operations |
|
103,983 |
|
|
|
1,634 |
|
3.14 |
% |
|
|
133,903 |
|
|
|
2,368 |
|
3.54 |
% |
Other assets |
|
203,821 |
|
|
|
|
|
|
|
233,088 |
|
|
|
|
|
||||
|
$ |
6,898,683 |
|
|
|
|
|
|
$ |
5,788,245 |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities and Shareholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Demand and interest checking |
$ |
5,619,608 |
|
|
$ |
2,944 |
|
0.10 |
% |
|
$ |
4,746,928 |
|
|
$ |
8,085 |
|
0.34 |
% |
Savings and money market |
|
466,978 |
|
|
|
341 |
|
0.15 |
% |
|
|
203,888 |
|
|
|
170 |
|
0.17 |
% |
Time deposits |
|
— |
|
|
|
— |
|
— |
|
|
|
159,752 |
|
|
|
1,483 |
|
1.86 |
% |
Total deposits |
|
6,086,586 |
|
|
|
3,285 |
|
0.11 |
% |
|
|
5,110,568 |
|
|
|
9,738 |
|
0.38 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Short-term borrowings |
|
6,491 |
|
|
|
8 |
|
0.25 |
% |
|
|
36,620 |
|
|
|
180 |
|
0.98 |
% |
Repurchase agreements |
|
41 |
|
|
|
— |
|
— |
|
|
|
57 |
|
|
|
— |
|
— |
|
Subordinated debentures |
|
13,401 |
|
|
|
225 |
|
3.36 |
% |
|
|
13,401 |
|
|
|
290 |
|
4.33 |
% |
Senior debt |
|
100,190 |
|
|
|
2,559 |
|
5.11 |
% |
|
|
— |
|
|
|
— |
|
— |
|
Total deposits and liabilities |
|
6,206,709 |
|
|
|
6,077 |
|
0.20 |
% |
|
|
5,160,646 |
|
|
|
10,208 |
|
0.40 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other liabilities |
|
91,837 |
|
|
|
|
|
|
|
118,811 |
|
|
|
|
|
||||
Total liabilities |
|
6,298,546 |
|
|
|
|
|
|
|
5,279,457 |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Shareholders' equity |
|
600,137 |
|
|
|
|
|
|
|
508,788 |
|
|
|
|
|
||||
|
$ |
6,898,683 |
|
|
|
|
|
|
$ |
5,788,245 |
|
|
|
|
|
||||
Net interest income on tax equivalent basis* |
|
|
$ |
109,519 |
|
|
|
|
|
$ |
95,617 |
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Tax equivalent adjustment |
|
|
|
59 |
|
|
|
|
|
|
92 |
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net interest income |
|
|
$ |
109,460 |
|
|
|
|
|
$ |
95,525 |
|
|
||||||
Net interest margin * |
|
|
|
|
3.26 |
% |
|
|
|
|
|
3.43 |
% |
||||||
* Full taxable equivalent basis, using a statutory Federal tax rate of 21% for 2021 and 2020.
** Includes commercial loans, at fair value for 2021 previously classified as held-for-sale at June 30, 2020. All periods include non-accrual loans.
NOTE: In the table above, the 2021 interest on loans reflects $4.5 million of 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. These fees are not expected to recur. Interest on loans also includes $3.7 million of interest and fees on PPP loans. In 2020 the table above includes comparable PPP interest and fees of $1.6 million. Increases in interest earning deposits at the Federal Reserve Bank reflect increased deposits resulting from stimulus payments distributed to a large segment of the population, resulting from December 2020 federal legislation.
Allowance for credit losses |
Six months ended |
|
Year ended |
||||||||
|
June 30,
|
|
June 30,
|
|
December 31,
|
||||||
|
(dollars in thousands) |
||||||||||
|
|
|
|
|
|||||||
Balance in the allowance for credit losses at beginning of period (1) |
$ |
16,082 |
|
|
$ |
12,875 |
|
|
$ |
12,875 |
|
|
|
|
|
|
|
||||||
Loans charged-off: |
|
|
|
|
|
||||||
SBA non-real estate |
|
321 |
|
|
|
1,048 |
|
|
|
1,350 |
|
SBA commercial mortgage |
|
23 |
|
|
|
– |
|
|
|
– |
|
Direct lease financing |
|
193 |
|
|
|
1,552 |
|
|
|
2,243 |
|
SBLOC |
|
15 |
|
|
|
– |
|
|
|
– |
|
Total |
|
552 |
|
|
|
2,600 |
|
|
|
3,593 |
|
|
|
|
|
|
|
||||||
Recoveries: |
|
|
|
|
|
||||||
SBA non-real estate |
|
15 |
|
|
|
60 |
|
|
|
103 |
|
Direct lease financing |
|
7 |
|
|
|
84 |
|
|
|
570 |
|
Total |
|
22 |
|
|
|
144 |
|
|
|
673 |
|
Net charge-offs |
|
530 |
|
|
|
2,456 |
|
|
|
2,920 |
|
(Reversal of) provision credited to allowance, excluding commitment provision |
|
(260 |
) |
|
|
4,206 |
|
|
|
6,127 |
|
|
|
|
|
|
|
||||||
Balance in allowance for credit losses at end of period |
$ |
15,292 |
|
|
$ |
14,625 |
|
|
$ |
16,082 |
|
Net charge-offs/average loans |
|
0.02 |
% |
|
|
0.06 |
% |
|
|
0.07 |
% |
Net charge-offs/average assets |
|
0.01 |
% |
|
|
0.04 |
% |
|
|
0.05 |
% |
(1) Excludes activity from assets held-for-sale from discontinued operations.
Loan portfolio |
June 30,
|
|
March 31,
|
|
December 31,
|
|
June 30,
|
||||
|
(in thousands) |
||||||||||
|
|
|
|
|
|
|
|
||||
SBL non-real estate |
$ |
228,958 |
|
$ |
305,446 |
|
$ |
255,318 |
|
$ |
293,692 |
SBL commercial mortgage |
|
343,487 |
|
|
320,013 |
|
|
300,817 |
|
|
259,020 |
SBL construction |
|
18,494 |
|
|
20,692 |
|
|
20,273 |
|
|
33,193 |
Small business loans * |
|
590,939 |
|
|
646,151 |
|
|
576,408 |
|
|
585,905 |
Direct lease financing |
|
506,424 |
|
|
484,316 |
|
|
462,182 |
|
|
422,505 |
SBLOC / IBLOC** |
|
1,729,628 |
|
|
1,622,359 |
|
|
1,550,086 |
|
|
1,287,350 |
Advisor financing *** |
|
72,190 |
|
|
58,919 |
|
|
48,282 |
|
|
15,529 |
Other specialty lending |
|
2,092 |
|
|
2,251 |
|
|
2,179 |
|
|
2,706 |
Other consumer loans **** |
|
3,748 |
|
|
4,201 |
|
|
4,247 |
|
|
4,003 |
|
|
2,905,021 |
|
|
2,818,197 |
|
|
2,643,384 |
|
|
2,317,998 |
Unamortized loan fees and costs |
|
10,323 |
|
|
8,879 |
|
|
8,939 |
|
|
4,739 |
Total loans, net of unamortized fees and costs |
$ |
2,915,344 |
|
$ |
2,827,076 |
|
$ |
2,652,323 |
|
$ |
2,322,737 |
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||
Small business portfolio
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
June 30,
|
||||
|
(in thousands) |
||||||||||
|
|
|
|
|
|
|
|
||||
SBL, including unamortized fees and costs |
$ |
593,401 |
|
$ |
647,445 |
|
$ |
577,944 |
|
$ |
583,935 |
SBL, included in commercial loans, at fair value |
|
225,534 |
|
|
234,908 |
|
|
243,562 |
|
|
225,401 |
Total small business loans |
$ |
818,935 |
|
$ |
882,353 |
|
$ |
821,506 |
|
$ |
809,336 |
* The preceding table shows small business loans and small business loans held at fair value. The small business loans held at fair value are comprised of the government guaranteed portion of SBA 7a loans at the dates indicated. A reduction in SBL non-real estate loans from $305.4 million at March 31, 2021 to $229.0 million at June 30, 2021 resulted from U.S. government repayments of $60.8 million of PPP loans authorized by The Consolidated Appropriations Act, 2021 and the repayment of $19.7 million of a line of credit to another institution related to PPP loans. PPP loans totaled $129.4 million at June 30, 2021 and $165.7 million at December 31, 2020, respectively.
** 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.
*** 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.
**** Included in the table above under Other consumer loans are demand deposit overdrafts reclassified as loan balances totaling $424,000 and $663,000 at June 30, 2021 and December 31, 2020, respectively. Estimated overdraft charge-offs and recoveries are reflected in the allowance for credit losses and have been immaterial.
Small business loans as of June 30, 2021 |
||
|
|
|
|
Loan principal
|
|
U.S. government guaranteed portion of SBA loans (a) |
$ |
358 |
Paycheck Protection Program Loans (PPP) (a) |
|
129 |
Commercial mortgage SBA (b) |
|
189 |
Construction SBA (c) |
|
9 |
Non-guaranteed portion of U.S. government guaranteed 7a loans (d) |
|
106 |
Non-SBA small business loans (e) |
|
18 |
Total principal |
$ |
809 |
Unamortized fees and costs |
|
10 |
Total small business loans |
$ |
819 |
(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 $9 million in Construction SBA loans, $8 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 $106 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 $18 million of non-SBA loans is comprised of approximately 20 conventional coffee/doughnut/carryout franchisee note purchases. The majority of purchased notes were made to multi-unit operators, are considered seasoned and have performed as agreed. A $2 million guaranty by the seller, for an 11% first loss piece, is in place until August 2021.
Additionally, the CARES Act of 2020 (“the CARES Act”) provided for six months of principal and interest payments on 7a loans which generally ended in fourth quarter 2020 or in first quarter 2021. The Consolidated Appropriations Act, 2021, became law in December 2020 and provides for at least an additional two months of such payments on SBA 7a loans, with up to five months of payments on hotel, restaurant, and other more highly impacted loans. Unlike the six months of CARES Act payments, these additional payments are capped at $9,000 per month.
Small business loans by type as of June 30, 2021 |
||||||||||||||||
(Excludes government guaranteed portion of SBA 7a loans, PPP loans, and a line of credit to initially fund PPP loans) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
SBL commercial
|
|
SBL construction* |
|
SBL non-real estate |
|
Total |
|
|
% Total |
|||||
|
|
(in millions) |
||||||||||||||
Hotels (except casino hotels) and motels |
|
$ |
66 |
|
$ |
3 |
|
$ |
— |
|
$ |
69 |
|
|
22 |
% |
Full-service restaurants |
|
|
16 |
|
|
1 |
|
|
3 |
|
|
20 |
|
|
6 |
% |
Child day care services |
|
|
16 |
|
|
— |
|
|
1 |
|
|
17 |
|
|
5 |
% |
Baked goods stores |
|
|
4 |
|
|
— |
|
|
11 |
|
|
15 |
|
|
5 |
% |
Car washes |
|
|
10 |
|
|
2 |
|
|
— |
|
|
12 |
|
|
4 |
% |
Assisted living facilities for the elderly |
|
|
10 |
|
|
— |
|
|
— |
|
|
10 |
|
|
3 |
% |
Offices of lawyers |
|
|
9 |
|
|
— |
|
|
— |
|
|
9 |
|
|
3 |
% |
Lessors of nonresidential buildings (except miniwarehouses) |
|
|
9 |
|
|
— |
|
|
— |
|
|
9 |
|
|
3 |
% |
Funeral homes and funeral services |
|
|
8 |
|
|
— |
|
|
— |
|
|
8 |
|
|
2 |
% |
Limited-service restaurants |
|
|
2 |
|
|
1 |
|
|
5 |
|
|
8 |
|
|
2 |
% |
General warehousing and storage |
|
|
7 |
|
|
— |
|
|
— |
|
|
7 |
|
|
2 |
% |
All other amusement and recreation industries |
|
|
5 |
|
|
— |
|
|
1 |
|
|
6 |
|
|
2 |
% |
Outpatient mental health and substance abuse centers |
|
|
5 |
|
|
— |
|
|
— |
|
|
5 |
|
|
2 |
% |
Other spectator sports |
|
|
5 |
|
|
— |
|
|
— |
|
|
5 |
|
|
1 |
% |
Fitness and recreational sports centers |
|
|
— |
|
|
2 |
|
|
2 |
|
|
4 |
|
|
1 |
% |
Gasoline stations with convenience stores |
|
|
4 |
|
|
— |
|
|
— |
|
|
4 |
|
|
1 |
% |
Offices of dentists |
|
|
3 |
|
|
— |
|
|
— |
|
|
3 |
|
|
1 |
% |
Other warehousing and storage |
|
|
3 |
|
|
— |
|
|
— |
|
|
3 |
|
|
1 |
% |
New car dealers |
|
|
3 |
|
|
— |
|
|
— |
|
|
3 |
|
|
1 |
% |
All other miscellaneous wood product manufacturing |
|
|
3 |
|
|
— |
|
|
— |
|
|
3 |
|
|
1 |
% |
Offices of physicians (except mental health specialists) |
|
|
3 |
|
|
— |
|
|
— |
|
|
3 |
|
|
1 |
% |
All other miscellaneous general purpose machinery manufacturing |
|
|
3 |
|
|
— |
|
|
— |
|
|
3 |
|
|
1 |
% |
Pet care (except veterinary) services |
|
|
2 |
|
|
— |
|
|
— |
|
|
2 |
|
|
1 |
% |
Automotive body, paint, and interior repair and maintenance |
|
|
2 |
|
|
— |
|
|
— |
|
|
2 |
|
|
1 |
% |
Sewing, needlework, and piece goods stores |
|
|
2 |
|
|
— |
|
|
— |
|
|
2 |
|
|
1 |
% |
Caterers |
|
|
2 |
|
|
— |
|
|
— |
|
|
2 |
|
|
1 |
% |
Amusement arcades |
|
|
2 |
|
|
— |
|
|
— |
|
|
2 |
|
|
1 |
% |
Lessors of other real estate property |
|
|
2 |
|
|
— |
|
|
— |
|
|
2 |
|
|
1 |
% |
Plumbing, heating, and air-conditioning contractors |
|
|
2 |
|
|
— |
|
|
— |
|
|
2 |
|
|
1 |
% |
Landscaping services |
|
|
— |
|
|
— |
|
|
2 |
|
|
2 |
|
|
1 |
% |
Offices of real estate agents and brokers |
|
|
2 |
|
|
— |
|
|
— |
|
|
2 |
|
|
1 |
% |
Independent artists, writers, and performers |
|
|
2 |
|
|
— |
|
|
— |
|
|
2 |
|
|
1 |
% |
Other** |
|
|
46 |
|
|
2 |
|
|
28 |
|
|
76 |
|
|
20 |
% |
Total |
|
$ |
258 |
|
$ |
11 |
|
$ |
53 |
|
$ |
322 |
|
|
100 |
% |
* Of the SBL commercial mortgage and SBL construction loans, $61.0 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 $2.0 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, 2021 |
||||||||||||||||
(Excludes government guaranteed portion of SBA 7a loans, PPP loans, and a line of credit to initially fund PPP loans) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
SBL commercial
|
|
SBL construction* |
|
SBL non-real estate |
|
Total |
|
|
% Total |
|||||
|
|
(in millions) |
||||||||||||||
Florida |
|
$ |
54 |
|
$ |
— |
|
$ |
8 |
|
$ |
62 |
|
|
19 |
% |
California |
|
|
42 |
|
|
1 |
|
|
4 |
|
|
47 |
|
|
15 |
% |
North Carolina |
|
|
23 |
|
|
2 |
|
|
3 |
|
|
28 |
|
|
9 |
% |
Pennsylvania |
|
|
23 |
|
|
— |
|
|
3 |
|
|
26 |
|
|
8 |
% |
New York |
|
|
17 |
|
|
3 |
|
|
5 |
|
|
25 |
|
|
8 |
% |
Illinois |
|
|
22 |
|
|
— |
|
|
3 |
|
|
25 |
|
|
8 |
% |
Texas |
|
|
12 |
|
|
— |
|
|
5 |
|
|
17 |
|
|
5 |
% |
New Jersey |
|
|
7 |
|
|
— |
|
|
6 |
|
|
13 |
|
|
4 |
% |
Virginia |
|
|
9 |
|
|
— |
|
|
2 |
|
|
11 |
|
|
3 |
% |
Tennessee |
|
|
10 |
|
|
— |
|
|
1 |
|
|
11 |
|
|
3 |
% |
Georgia |
|
|
7 |
|
|
— |
|
|
2 |
|
|
9 |
|
|
3 |
% |
Colorado |
|
|
3 |
|
|
4 |
|
|
2 |
|
|
9 |
|
|
3 |
% |
Michigan |
|
|
3 |
|
|
— |
|
|
2 |
|
|
5 |
|
|
2 |
% |
Washington |
|
|
3 |
|
|
— |
|
|
— |
|
|
3 |
|
|
1 |
% |
Ohio |
|
|
3 |
|
|
— |
|
|
— |
|
|
3 |
|
|
1 |
% |
Other states |
|
|
20 |
|
|
1 |
|
|
7 |
|
|
28 |
|
|
8 |
% |
Total |
|
$ |
258 |
|
$ |
11 |
|
$ |
53 |
|
$ |
322 |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
* Of the SBL commercial mortgage and SBL construction loans, $61.0 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, 2021 |
|
|||||
|
|
|
|
|
|
|
Type* |
|
State |
|
SBL commercial mortgage* |
|
|
|
|
(in millions) |
||||
Lawyers' office |
|
CA |
|
$ |
9 |
|
Hotel |
|
FL |
|
|
9 |
|
General warehouse and storage |
|
PA |
|
|
7 |
|
Hotel |
|
NC |
|
|
6 |
|
Assisted living facility |
|
FL |
|
|
5 |
|
Outpatient mental health and substance abuse center |
|
FL |
|
|
5 |
|
Hotel |
|
NC |
|
|
5 |
|
Hotel |
|
PA |
|
|
4 |
|
Hotel |
|
TN |
|
|
4 |
|
Gasoline station |
|
VA |
|
|
4 |
|
Total |
|
|
|
$ |
58 |
|
* 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, at fair value, excluding SBA loans, are as follows including LTV at origination:
Type as of June 30, 2021 |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
||||
Type |
|
|
# Loans |
|
Balance |
|
Weighted average
|
|
Weighted average
|
||||
|
|
|
(dollars in millions) |
||||||||||
Multifamily (apartments) |
|
|
136 |
|
$ |
1,323 |
|
|
76 |
% |
|
4.75 |
% |
Hospitality (hotels and lodging) |
|
|
11 |
|
|
75 |
|
|
65 |
% |
|
5.74 |
% |
Retail |
|
|
6 |
|
|
44 |
|
|
71 |
% |
|
4.65 |
% |
Other |
|
|
7 |
|
|
28 |
|
|
70 |
% |
|
5.24 |
% |
|
|
|
160 |
|
$ |
1,470 |
|
|
75 |
% |
|
4.81 |
% |
Fair value adjustment |
|
|
|
|
|
(5 |
) |
|
|
|
|
||
Total |
|
|
|
|
$ |
1,465 |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
State diversification as of June 30, 2021 |
|
|
15 largest loans (all multifamily) as of June 30, 2021 |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
State |
|
Balance |
|
|
Origination date LTV |
|
|
State |
|
|
Balance |
|
Origination date LTV |
||||
(in millions) |
|
|
(in millions) |
||||||||||||||
Texas |
|
$ |
427 |
|
|
77 |
% |
|
|
North Carolina |
|
|
$ |
44 |
|
78 |
% |
Georgia |
|
|
174 |
|
|
77 |
% |
|
|
Texas |
|
|
|
38 |
|
79 |
% |
Arizona |
|
|
108 |
|
|
76 |
% |
|
|
Texas |
|
|
|
36 |
|
80 |
% |
North Carolina |
|
|
69 |
|
|
78 |
% |
|
|
Pennsylvania |
|
|
|
33 |
|
77 |
% |
Alabama |
|
|
56 |
|
|
76 |
% |
|
|
Texas |
|
|
|
30 |
|
75 |
% |
Ohio |
|
|
57 |
|
|
69 |
% |
|
|
Nevada |
|
|
|
28 |
|
80 |
% |
Other states each <$55 million |
|
|
579 |
|
|
73 |
% |
|
|
Texas |
|
|
|
27 |
|
77 |
% |
Total |
|
$ |
1,470 |
|
|
75 |
% |
|
|
Arizona |
|
|
|
27 |
|
79 |
% |
|
|
|
|
|
|
|
|
Mississippi |
|
|
|
27 |
|
79 |
% |
||
|
|
|
|
|
|
|
|
North Carolina |
|
|
|
25 |
|
77 |
% |
||
|
|
|
|
|
|
|
|
Texas |
|
|
|
25 |
|
77 |
% |
||
|
|
|
|
|
|
|
|
Texas |
|
|
|
24 |
|
77 |
% |
||
|
|
|
|
|
|
|
|
Alabama |
|
|
|
23 |
|
77 |
% |
||
|
|
|
|
|
|
|
|
Georgia |
|
|
|
21 |
|
79 |
% |
||
|
|
|
|
|
|
|
|
Texas |
|
|
|
21 |
|
79 |
% |
||
|
|
|
|
|
|
|
|
15 Largest loans |
|
|
$ |
429 |
|
78
|
%
|
||
Institutional banking loans outstanding at June 30, 2021 |
|||||
|
|
|
|
||
Type |
Principal |
|
% of total |
||
|
(in millions) |
|
|
||
Securities backed lines of credit (SBLOC) |
$ |
1,133 |
|
63 |
% |
Insurance backed lines of credit (IBLOC) |
|
597 |
|
33 |
% |
Advisor financing |
|
72 |
|
4 |
% |
Total |
$ |
1,802 |
|
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, 2021 |
|||||
|
|
|
|
||
|
Principal amount |
|
% Principal to collateral |
||
|
(in millions) |
||||
|
$ |
60 |
|
41 |
% |
|
|
17 |
|
37 |
% |
|
|
16 |
|
54 |
% |
|
|
14 |
|
26 |
% |
|
|
12 |
|
29 |
% |
|
|
10 |
|
38 |
% |
|
|
9 |
|
30 |
% |
|
|
8 |
|
71 |
% |
|
|
8 |
|
23 |
% |
|
|
8 |
|
51 |
% |
Total and weighted average |
$ |
162 |
|
40 |
% |
Insurance backed lines of credit (IBLOC)
IBLOC loans are backed by the cash value of life insurance policies which have been assigned to us. We lend up to 100% of such cash value. Our underwriting standards require approval of the insurance companies which carry the policies backing these loans. Currently, seven insurance companies have been approved and, as of April 17, 2021, all were rated Superior (A+ or better) by AM BEST.
Direct lease financing* by type as of June 30, 2021 |
|||||
|
|
|
|
||
|
Principal balance |
|
% Total |
||
|
(in millions) |
|
|
||
Construction |
$ |
83 |
|
16 |
% |
Government agencies and public institutions** |
|
77 |
|
15 |
% |
Real estate and rental and leasing |
|
66 |
|
13 |
% |
Waste management and remediation services |
|
63 |
|
12 |
% |
Retail trade |
|
48 |
|
10 |
% |
Wholesale trade |
|
40 |
|
8 |
% |
Transportation and warehousing |
|
28 |
|
6 |
% |
Health care and social assistance |
|
25 |
|
5 |
% |
Professional, scientific, and technical services |
|
19 |
|
4 |
% |
Educational services |
|
16 |
|
3 |
% |
Manufacturing |
|
15 |
|
3 |
% |
Finance and insurance |
|
7 |
|
1 |
% |
Other |
|
19 |
|
4 |
% |
Total |
$ |
506 |
|
100 |
% |
* Of the total $506 million of direct lease financing, $465 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, 2021 |
|||||
|
|
|
|
||
State |
Principal balance |
|
% Total |
||
|
(in millions) |
|
|
||
Florida |
$ |
92 |
|
18 |
% |
California |
|
53 |
|
11 |
% |
New Jersey |
|
37 |
|
7 |
% |
New York |
|
33 |
|
6 |
% |
Pennsylvania |
|
31 |
|
6 |
% |
Utah |
|
31 |
|
6 |
% |
Maryland |
|
24 |
|
5 |
% |
North Carolina |
|
24 |
|
5 |
% |
Texas |
|
17 |
|
3 |
% |
Connecticut |
|
16 |
|
3 |
% |
Washington |
|
16 |
|
3 |
% |
Missouri |
|
14 |
|
3 |
% |
Georgia |
|
11 |
|
2 |
% |
Idaho |
|
9 |
|
2 |
% |
Alabama |
|
9 |
|
2 |
% |
Other states |
|
89 |
|
18 |
% |
Total |
$ |
506 |
|
100 |
% |
Capital ratios |
Tier 1 capital
|
|
Tier 1 capital
|
|
Total capital
|
|
Common equity
|
||||
As of June 30, 2021 |
|
|
|
|
|
|
|
||||
The Bancorp, Inc. |
8.52 |
% |
|
15.39 |
% |
|
15.78 |
% |
|
15.39 |
% |
The Bancorp Bank |
8.73 |
% |
|
15.75 |
% |
|
16.14 |
% |
|
15.75 |
% |
"Well capitalized" institution (under FDIC regulations-Basel III) |
5.00 |
% |
|
8.00 |
% |
|
10.00 |
% |
|
6.50 |
% |
|
|
|
|
|
|
|
|
||||
As of December 31, 2020 |
|
|
|
|
|
|
|
||||
The Bancorp, Inc. |
9.20 |
% |
|
14.43 |
% |
|
14.84 |
% |
|
14.43 |
% |
The Bancorp Bank |
9.11 |
% |
|
14.27 |
% |
|
14.68 |
% |
|
14.27 |
% |
"Well capitalized" institution (under FDIC regulations-Basel III) |
5.00 |
% |
|
8.00 |
% |
|
10.00 |
% |
|
6.50 |
% |
|
|
|
|
|
|
|
|
||||
|
Three months ended
|
|
Six months ended
|
||||||||
|
2021 |
2020 |
2021 |
|
2020 |
||||||
Selected operating ratios |
|
|
|
|
|
|
|
||||
Return on average assets (1) |
1.67 |
% |
|
1.33 |
% |
|
1.62 |
% |
|
1.13 |
% |
Return on average equity (1) |
19.42 |
% |
|
15.61 |
% |
|
18.62 |
% |
|
12.87 |
% |
Net interest margin |
3.19 |
% |
|
3.53 |
% |
|
3.26 |
% |
|
3.43 |
% |
(1) Annualized
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||
Book value per share table |
June 30,
|
|
March 31,
|
|
December 31,
|
|
June 30,
|
||||
Book value per share |
$ |
10.77 |
|
$ |
10.42 |
|
$ |
10.10 |
|
$ |
9.28 |
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Loan quality table |
June 30,
|
|
March 31,
|
|
December 31,
|
|
June 30,
|
||||||||
|
(dollars in thousands) |
||||||||||||||
Nonperforming loans to total loans |
|
0.31 |
% |
|
|
0.49 |
% |
|
|
0.48 |
% |
|
|
0.44 |
% |
Nonperforming assets to total assets |
|
0.14 |
% |
|
|
0.18 |
% |
|
|
0.20 |
% |
|
|
0.17 |
% |
Allowance for credit losses |
|
0.52 |
% |
|
|
0.58 |
% |
|
|
0.61 |
% |
|
|
0.63 |
% |
|
|
|
|
|
|
|
|
||||||||
Nonaccrual loans |
$ |
7,346 |
|
|
$ |
11,961 |
|
|
$ |
12,227 |
|
|
$ |
9,957 |
|
Loans 90 days past due still accruing interest |
|
1,550 |
|
|
|
1,762 |
|
|
|
497 |
|
|
|
352 |
|
Other real estate owned |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total nonperforming assets |
$ |
8,896 |
|
|
$ |
13,723 |
|
|
$ |
12,724 |
|
|
$ |
10,309 |
|
Gross dollar volume (GDV) (1) |
Three months ended |
||||||||||
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
June 30,
|
||||
|
(in thousands) |
||||||||||
|
|
|
|
|
|
|
|
||||
Prepaid and debit card GDV |
$ |
27,106,763 |
|
$ |
28,094,930 |
|
$ |
22,523,855 |
|
$ |
23,539,694 |
(1) Gross dollar volume represents the total dollar amount spent on prepaid and debit cards issued by The Bancorp Bank.
Business line quarterly summary
|
|||||||||||||||||||
Balances |
|||||||||||||||||||
% Growth |
|||||||||||||||||||
Major business lines |
Average
|
Balances ** |
Year over year |
|
Linked
|
||||||||||||||
Loans |
|||||||||||||||||||
Institutional banking *** |
2.5 |
% |
$ |
1,802 |
38 |
% |
29 |
% |
|||||||||||
Small Business Lending**** |
5.0 |
% |
|
819 |
15 |
% |
10 |
% |
|||||||||||
Leasing |
6.0 |
% |
|
506 |
20 |
% |
18 |
% |
|||||||||||
Commercial real estate (non-SBA at fair value) |
4.8 |
% |
|
1,465 |
nm |
nm |
|||||||||||||
Weighted average yield |
4.1 |
% |
$ |
4,592 |
Non-interest income |
||||||||||||||
% Growth |
|||||||||||||||||||
Deposits: Fintech solutions group |
Current quarter |
Year over
|
|||||||||||||||||
Prepaid and debit card issuance |
0.1 |
% |
$ |
4,836 |
24 |
% |
nm |
$ |
19.4 |
4 |
% |
||||||||
Card payment and ACH processing |
0.2 |
% |
$ |
885 |
22 |
% |
nm |
$ |
1.9 |
nm |
|||||||||
* Average rates are for the quarter ended June 30, 2021.
** Loan and deposit categories are respectively based on period-end and average quarterly balances.
*** Institutional Banking loans are comprised of Securities Backed Lines of Credit (SBLOC), collateralized by marketable securities, Insurance Backed Lines of Credit (IBLOC), collateralized by the cash surrender value of insurance policies, and Advisor financing.
**** Small Business Lending is substantially comprised of SBA loans. Loan growth percentages exclude short-term PPP loans. The linked quarter annualized percentage excludes a short-term line of credit to another institution to fund PPP loans, with a balance of $19.7 million at March 31, 2021, which was repaid in the second quarter.
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 - 2020 |
|
(46 |
) |
|
|
(46 |
) |
2021 Marks |
|
— |
|
|
|
||
Payments received |
|
(122 |
) |
|
|
||
June 30, 2021 Bancorp book value** |
$ |
25 |
|
|
|
||
|
|
|
|
||||
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 investment in a securitization of certain loans from the Bank's discontinued loan portfolio.
** Approximately 21% of expected principal recoveries were from loans and properties pending liquidation or other resolution as of June 30, 2021.
Walnut Street portfolio composition as of June 30, 2021 |
|
|
|
Collateral type |
% of Portfolio |
Commercial real estate non-owner occupied - Retail |
80.0% |
Construction and land |
13.3% |
Other |
6.7% |
Total |
100.0% |
Cumulative analysis of marks on discontinued commercial loan principal as of June 30, 2021 |
|||||||||
|
|
|
|
|
|
||||
|
Discontinued
|
|
Cumulative
|
|
% to original
|
||||
|
(dollars in millions) |
||||||||
Commercial loan discontinued principal before marks |
$ |
53 |
|
|
|
|
|||
Florida mall held in discontinued other real estate owned |
|
42 |
|
$ |
(27 |
) |
|
|
|
Mark at June 30, 2021 |
|
|
|
(4 |
) |
|
|
||
Cumulative mark at June 30, 2021 |
$ |
95 |
|
$ |
(31 |
) |
|
33 |
% |
Analysis of discontinued commercial loan relationships as of June 30, 2021 |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Performing
|
|
Nonperforming
|
|
Total
|
|
Performing
|
|
Nonperforming
|
|
Total
|
|||||||||
|
(in millions) |
|||||||||||||||||||
4 loan relationships > $5 million |
$ |
33 |
|
$ |
— |
|
$ |
33 |
|
$ |
(2 |
) |
|
$ |
— |
|
|
$ |
(2 |
) |
Loan relationships < $5 million |
|
12 |
|
|
4 |
|
|
16 |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
|
$ |
45 |
|
$ |
4 |
|
$ |
49 |
|
$ |
(3 |
) |
|
$ |
(1 |
) |
|
$ |
(4 |
) |
Quarterly activity for commercial loan discontinued principal |
|||
|
|
||
|
Commercial
|
||
|
(in millions) |
||
|
|
||
Commercial loan discontinued principal March 31, 2021 before marks |
$ |
61 |
|
Quarterly paydowns and other reductions |
|
(8 |
) |
Commercial loan discontinued principal June 30, 2021 before marks |
|
53 |
|
Marks June 30, 2021 |
|
(4 |
) |
Net commercial loan exposure June 30, 2021 |
|
49 |
|
Residential mortgages |
|
27 |
|
Net loans |
|
76 |
|
Florida mall in other real estate owned |
|
15 |
|
5 properties in other real estate owned |
|
6 |
|
Total discontinued assets at June 30, 2021 |
$ |
97 |
|
Discontinued commercial loan composition as of June 30, 2021 |
||||||||||
|
|
|
|
|
|
|||||
Collateral type |
Unpaid principal
|
|
Mark at
|
|
Mark as % of portfolio |
|||||
|
(in millions) |
|||||||||
Commercial real estate - non-owner occupied: |
|
|
|
|
|
|||||
Retail |
$ |
4 |
|
|
$ |
(0.6 |
) |
|
15 |
% |
Office |
|
2 |
|
|
|
— |
|
|
— |
|
Other |
|
18 |
|
|
|
(0.1 |
) |
|
1 |
% |
Construction and land |
|
10 |
|
|
|
(0.1 |
) |
|
1 |
% |
Commercial non-real estate and industrial |
|
3 |
|
|
|
(0.1 |
) |
|
3 |
% |
1 to 4 family construction |
|
7 |
|
|
|
(2.6 |
) |
|
37 |
% |
First mortgage residential non-owner occupied |
|
5 |
|
|
|
— |
|
|
— |
|
Commercial real estate owner occupied: |
|
|
|
|
|
|||||
Retail |
|
2 |
|
|
|
— |
|
|
— |
|
Residential junior mortgage |
|
1 |
|
|
|
— |
|
|
— |
|
Other |
|
1 |
|
|
|
— |
|
|
— |
|
Total |
$ |
53 |
|
|
$ |
(3.5 |
) |
|
7 |
% |
Less: mark |
|
(4 |
) |
|
|
|
|
|||
Net commercial loan exposure June 30, 2021 |
$ |
49 |
|
|
$ |
(3.5 |
) |
|
|
|
Loan payment deferrals related to Covid-19
Total non-U.S. guaranteed loan balances for borrowers with Covid-19 payment deferrals amounted to $48 million as of March 31, 2021. The vast majority of these borrowers had begun making their payments as of July 5, 2021. As of that date, $968,000 of discontinued operations loans were still in deferral, and small business (SBA) borrowers with unguaranteed principal balances totaling $2.6 million, have not made their payments due on that date. Of the $2.6 million, we are considering further deferrals for borrowers with unguaranteed balances of $1.7 million.
