第99.1展示文本
the bancorp公司報告其第三季度財務 結果
2024年10月24日，特拉華州威明頓 – the bancorp公司（「the bancorp」或「公司」或「我們」）（納斯達克股票代碼: TBBK），一家金融控股公司，今天宣佈了其2024年第三季度的財務業績。
2024年第三季度的淨利潤爲5150萬美元。
有助於理解第三季度淨收益的因素
| 1. | 根據下文最近的發展說明，新增了一個CECL因素，增加了信用損失準備金，導致淨利潤減少了150萬美元。 |
| 2. | 將轉移至非應計或調整的房地產橋樑貸款上的以前期間的利息收入逆轉，導致淨利潤減少120萬美元。 |
| 3. | 由於交易處理延遲導致的損失增加了非利息支出，並導致淨利潤減少了約90萬美元。 |
近期事件
根據我們的第二季度新聞稿所述，公司與其全資子公司銀行國家協會（「銀行」）簽訂了購買和出售協議，該協議涉及通過處置房地產橋樑貸款（REBL）貸款而獲得的一處公寓物業。截至2024年9月30日，相關4030萬美元的餘額佔據了公司其他房地產業的大部分。在此之前的2024年7月125,000美元的定金存入後，買方已經存入額外的定金25,000美元，使2024年的存款總額達到375,000美元。預計到2024年12月31日交割期限前，還需存入額外的定金總額將達到500,000美元。預計銷售價格將包括公司目前擁有的其他房地產業餘額以及用於改善物業的預測成本。不能保證買方將完成物業的出售，但如果未完成，定金將歸屬於公司。
雖然在本季度，被歸類爲特別提及或次級的房地產橋樑貸款增加，但我們認爲這些分類已經或即將達到峯值。這一結論至少部分基於第三季度由一家專門進行此類分析的公司對REBL投資組合的重要部分進行的獨立審查。此外，50個點子的聯邦儲備利率下調可能爲借款人提供即時的現金流益處，而進一步下降的遠期收益曲線應支持更多的流動性益處，因爲固定利率下降。此外，根據過去十二個月的評估，「按現狀」和「按穩定狀態」的平均貸款價值比率（「LTVs」分別爲77%和68%），繼續爲減少損失提供重要保護。支持此類獨立LTVs所支持的基礎財產價值，繼續促進從現金流問題中起作用的借款人向具有更強財務實力的借款人的再資本化。2024年9月30日，被歸類爲特別提及和次級的房地產橋樑貸款分別爲$8440萬和$15540萬，而2024年6月30日分別爲$9600萬和$8040萬。根據上述第三方對公寓樓抵押品的評估，對每筆歸類貸款是否存在可能增加信貸損失撥備（「ACL」）進行了評估。根據「按現狀」和「按穩定狀態」的LTV，不需要提高撥備。REBL的當前信貸損失撥備主要基於多家庭貸款的歷史行業損失，不存在公司REBL投資組合中的重大核銷。然而，正如在我們的第二季度新聞發佈中所述，由於被歸類爲特別提及和次級的貸款金額增加，公司在第三季度評估了REBL相關敏感性。這樣的評估在本質上是主觀的，因爲它需要可能會隨着更多信息的提供而發生變化的重要估計。因此，公司將上述新的定性因素添加到其季度ACL中，其累計稅後影響約爲$150萬（稅前$200萬）。
亮點
| · | The bancorp報告2024年9月30日結束的季度淨利潤爲5150萬美元，每股攤薄收益(「EPS」)爲1.04美元，相較於2023年9月30日結束的季度淨利潤爲5010萬美元，每股攤薄收益爲0.92美元，EPS增長13%。雖然這些時期之間淨利潤增長了3%，但因普通股回購導致流通股減少，所以在2024年大幅增加。 |
| · | 截至2024年9月30日，資產收益率和淨資產收益率分別爲2.5%和26%，相比之下，截至2023年9月30日的季度分別爲2.7%和26%（所有百分比均爲「年化」）。 |
| · | 截至2024年9月30日的這個季度，淨利息收入增長了5%，達到9370萬美元，而2023年9月30日的這個季度爲8890萬美元。2024年第三季度的淨利息收入因本季度將房地產橋貸款轉移到非應計狀態及對具有追溯性利率降低的貸款進行修改而導致的以160萬美元（扣除稅後120萬美元）的利息逆轉而減少。 |
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| · | 截至2024年9月30日，淨利息收益率爲4.78%，相比於2023年9月30日的5.07%，以及2024年6月30日的4.97%。2024年第三季度的淨利息收益率受到上述往期利息逆轉的影響而下降。 |
| · | 2024年9月30日，貸款淨額扣除遞延費用和成本爲59.1億美元，相比之下，2023年12月31日爲53.6億美元，而2023年9月30日爲52億美元。這些變化反映了季度相對於上季度的5%增長，以及年度相對之前年度的14%增長。 |
| · | 總交易額（「GDV」），代表預付和借記卡的總消費金額，截至2024年9月30日的季度比截至2023年9月30日的季度增加了49.3億美元，增長15%，達到了379億美元。這一增長反映出我們與現有合作伙伴的持續有機增長以及過去一年內新增客戶的影響。與2023年第三季度相比，總預付、借記卡、ACH和其他付款費用增長了16%，達到了2780萬美元。2024年第三季度，消費金融科技費用增加到了160萬美元，這是由於我們在2024年初進入信用贊助領域的結果。 |
| · | 截至2024年9月30日，小額企業貸款（「SBLs」），包括持有的公允價值，達到了9.792億美元，同比增長14％，環比季度增長2％，不包括相關擔保借款的2850萬美元影響。 |
| · | 到2024年9月30日，直接租賃融資餘額同比增長6%，達到71180萬美元，較6月30日略高1%。 |
| · | At September 30, 2024, real estate bridge loans of $2.19 billion had grown 3% compared to a $2.12 billion balance at June 30, 2024, and 18% compared to the September 30, 2023 balance of $1.85 billion. These real estate bridge loans consist entirely of rehabilitation loans for apartment buildings. |
| · | Security backed lines of credit (“SBLOC”), insurance backed lines of credit (“IBLOC”), and investment advisor financing loans collectively decreased 7% year over year and less than 1% quarter over linked quarter to $1.79 billion at September 30, 2024. |
| · | The average interest rate on $7.23 billion of average deposits and interest-bearing liabilities during the third quarter of 2024 was 2.54%. Average deposits of $7.01 billion for the third quarter of 2024 increased $720.9 million, or 11% over third quarter 2023. |
| · | As of September 30, 2024, tier 1 capital to average assets (leverage), tier 1 capital to risk-weighted assets, total capital to risk-weighted assets and common equity tier 1 to risk-weighted assets ratios were 9.86%, 13.62%, 14.19% and 13.62%, respectively, compared to well-capitalized minimums of 5%, 8%, 10% and 6.5%, respectively. The Bancorp Bank, National Association, remains well capitalized under banking regulations. |
| · | Book value per common share at September 30, 2024 was $16.90 compared to $14.36 per common share at September 30, 2023, an increase of 18%. |
| · | The Bancorp repurchased 1,037,069 shares of its common stock at an average cost of $48.21 per share during the quarter ended September 30, 2024. As a result of share repurchases, outstanding shares at September 30, 2024 amounted to 48.2 million, compared to 53.2 million shares at December 31, 2023, or a reduction of 9%. |
| · | The Bancorp emphasizes safety and soundness and its balance sheet has a risk profile enhanced by the special nature of the collateral supporting its loan niches, related underwriting, and the characteristics of its funding sources, including those highlighted in the bullets below. Those loan niches and funding sources have contributed to increased earnings levels, even during periods in which markets have experienced various economic stresses. |
| · | The vast majority of The Bancorp’s funding is comprised of FDIC-insured and/or small balance accounts, which adjust to only a portion of changes in rates. The Company also has lines of credit with U.S. government sponsored agencies totaling approximately $3.1 billion as of September 30, 2024, as well as access to other forms of liquidity. |
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| · | In its REBL portfolio, the Company has minimal exposure to non-multifamily commercial real estate such as office buildings, and instead has a portfolio largely comprised of rehabilitation bridge loans for apartment buildings. These loans generally have three-year terms with two one-year extensions to allow for the rehabilitation work to be completed and rentals stabilized for an extended period, before being refinanced at lower rates through U.S. Government Sponsored Entities or other lenders. The REBL portfolio consists primarily of workforce housing, which we consider to be working class apartments at more affordable rental rates. Related collateral values should accordingly be more stable than higher rent properties, even in stressed economies. While the macro-economic environment has challenged the multifamily bridge space, the stability of the Company’s REBL portfolio is evidenced by the estimated values of the underlying collateral. The Company’s $2.2 billion apartment bridge lending portfolio at September 30, 2024, has a weighted average origination date “as is” loan-to-value ratio of 70%, based on third-party appraisals. Further, the weighted average origination date “as stabilized” LTV, which measures the estimated value of the apartments after the rehabilitation is complete may provide even greater protection. |
| · | As part of the underwriting process, The Bancorp reviews prospective borrowers’ previous rehabilitation experience in addition to overall financial wherewithal. These transactions also include significant borrower equity contributions with required performance metrics. Underwriting generally includes, but is not limited to, assessment of local market information relating to vacancy and rental rates, review of post rehabilitation rental rate assumptions against geo-specific affordability indices, negative news searches, lien searches, visitations by bank personnel and/or designated engineers, and other information sources. |
| · | Rehabilitation progress is monitored through ongoing draw requests and financial reporting covenants. This generally allows for early identification of potential issues, and expedited action to address on a timely basis. |
| · | Operations and ongoing loan evaluation are overseen by multiple levels of management, in addition to the REBL team’s experienced professional staff and third-party consultants utilized during the underwriting and asset management process. This oversight includes a separate loan committee specific to REBL, which is comprised of seasoned and experienced lending professionals who do not directly report to anyone on the REBL team. There is also a separate loan review department, a surveillance committee and additional staff which evaluate potential losses under the current expected credit losses methodology (“CECL”), all of which similarly do not report to anyone on the REBL team. |
| · | SBLOC and IBLOC portfolios are respectively secured by marketable securities and the cash value of life insurance. The majority of SBA 7(a) loans are government guaranteed, while SBA 504 loans are made with 50%-60% LTVs. |
| · | Additional details regarding our loan portfolios are included in the related tables in this press release, as is the summarization of the earnings contributions of our payments businesses, which further enhances The Bancorp’s risk profile. The Company’s risk profile inherent in its loan portfolios, funding and earnings levels, may present opportunities to further increase stockholder value, while still prudently maintaining capital levels. |
| · | In the second quarter of 2024, the Company purchased approximately $900 million of fixed rate government sponsored entity backed commercial and residential mortgage securities of varying maturities, with an approximate 5.11% weighted average yield, and estimated weighted average lives of eight years, to reduce its exposure to lower levels of net interest income. Such purchases would also reduce the additional net interest income which will result if the Federal Reserve increases rates. While there are many variables and limitations to estimating exposure to changes in rates, such purchases and continuing fixed rate loan originations are projected to reduce such exposure to modest levels. In prior years, The Bancorp deferred adding fixed rate securities when yields were particularly low, which has afforded the flexibility to benefit from, and secure, more advantageous securities and loan rates. |
“We saw strong growth in the third quarter across our Fintech Solutions activities with a robust pipeline”, said Damian Kozlowski, CEO of The Bancorp. “We expect this growth to support an increase in profitability in 2025 and continued gains in EPS. We are issuing preliminary guidance of $5.25 a share for 2025. This 2025 guidance does not include the impact of planned stock buybacks of $150 million. Guidance for 2024 remains $4.35, which includes the positive impact of buybacks during the year. Planned stock buybacks are being reduced in 2025 by $100 million from 2024 levels of $250 million to facilitate the currently planned repayment of senior secured debt of $96 million.”
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, 2024, by clicking on the webcast link on The Bancorp's homepage at www.thebancorp.com or you may dial 1.800.225.9448, conference code BANCORP. You may listen to the replay of the webcast following the live call on The Bancorp's investor relations website (archived for one year) or telephonically until Friday, November 1, 2024, by dialing 1.800.839.1162.
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About The Bancorp
The Bancorp, Inc. (NASDAQ: TBBK), headquartered in Wilmington, Delaware, through its subsidiary, The Bancorp Bank, National Association provides a variety of services including providing 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 that are not historical facts, are “forward-looking statements.” These statements may be identified by the use of forward-looking terminology, including, but not limited to the words “intend,” “may,” “believe,” “will,” “expect,” “look,” “anticipate,” “plan,” “estimate,” “continue,” or similar words. Forward-looking statements include, but are not limited to, statements regarding our annual fiscal 2024 results, our anticipated 2025 profitability, increased growth and the impact of stock buybacks, relate to our current assumptions, projections and expectations about our business and future events, including current expectations about important economic, political, and technological factors, among other factors, 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. Factors that could cause results to differ from those expressed in the forward-looking statements also include, but are not limited to the risks and uncertainties referenced or described in 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 the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and Quarterly Reports on Forms 10-Q for the periods ended March 31, 2024 and June 30, 2024, and other documents that the Company files from time to time with the Securities and Exchange Commission. The forward-looking statements speak only as of the date of this press release. The Bancorp does not undertake any duty to publicly revise or update forward-looking statements in this press release to reflect events or circumstances that arise after the date of this press release, except as may be required under applicable law.
The Bancorp, Inc. Contact
Andres Viroslav
Director, Investor Relations
215-861-7990
andres.viroslav@thebancorp.com
Source: The Bancorp, Inc.
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The Bancorp, Inc.
Financial highlights
(unaudited)
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| Consolidated condensed income statements | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| (Dollars in thousands, except per share and share data) | ||||||||||||||||
| Net interest income | $ | 93,732 | $ | 88,882 | 281,945 | 261,893 | ||||||||||
| Provision for credit losses on loans | 3,476 | 1,783 | 7,316 | 4,409 | ||||||||||||
| Provision (reversal) for unfunded commitments | 79 | (31 | ) | (340 | ) | (393 | ) | |||||||||
| Non-interest income | ||||||||||||||||
| Fintech fees | ||||||||||||||||
| ACH, card and other payment processing fees | 3,892 | 2,553 | 9,856 | 7,153 | ||||||||||||
| Prepaid, debit card and related fees | 23,907 | 21,513 | 72,948 | 67,013 | ||||||||||||
| Consumer credit fintech fees | 1,600 | — | 1,740 | — | ||||||||||||
| Total fintech fees | 29,399 | 24,066 | 84,544 | 74,166 | ||||||||||||
| Net realized and unrealized gains on commercial loans, at fair value | 606 | 525 | 2,205 | 4,171 | ||||||||||||
| Leasing related income | 1,072 | 1,767 | 2,889 | 4,768 | ||||||||||||
| Other non-interest income | 1,031 | 422 | 2,574 | 2,000 | ||||||||||||
| Total non-interest income | 32,108 | 26,780 | 92,212 | 85,105 | ||||||||||||
| Non-interest expense | ||||||||||||||||
| Salaries and employee benefits | 33,821 | 30,475 | 97,964 | 93,427 | ||||||||||||
| Data processing expense | 1,408 | 1,404 | 4,252 | 4,123 | ||||||||||||
| Legal expense | 1,055 | 1,203 | 2,509 | 3,110 | ||||||||||||
| FDIC insurance | 904 | 806 | 2,618 | 2,233 | ||||||||||||
| Software | 4,561 | 4,427 | 13,687 | 12,981 | ||||||||||||
| Other non-interest expense | 11,506 | 9,144 | 30,383 | 29,558 | ||||||||||||
| Total non-interest expense | 53,255 | 47,459 | 151,413 | 145,432 | ||||||||||||
| Income before income taxes | 69,030 | 66,451 | 215,768 | 197,550 | ||||||||||||
| Income tax expense | 17,513 | 16,314 | 54,136 | 49,282 | ||||||||||||
| Net income | 51,517 | 50,137 | 161,632 | 148,268 | ||||||||||||
| Net income per share - basic | $ | 1.06 | 0.93 | 3.18 | 2.70 | |||||||||||
| Net income per share - diluted | $ | 1.04 | 0.92 | 3.15 | 2.68 | |||||||||||
| Weighted average shares - basic | 48,759,369 | 54,175,184 | 50,807,021 | 54,828,547 | ||||||||||||
| Weighted average shares - diluted | 49,478,236 | 54,738,610 | 51,361,104 | 55,336,354 | ||||||||||||
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| Condensed consolidated balance sheets | September 30, | June 30, | December 31, | September 30, | ||||||||||||
| 2024 (unaudited) | 2024 (unaudited) | 2023 | 2023 (unaudited) | |||||||||||||
| (Dollars in thousands, except share data) | ||||||||||||||||
| Assets: | ||||||||||||||||
| Cash and cash equivalents | ||||||||||||||||
| Cash and due from banks | $ | 8,660 | $ | 5,741 | $ | 4,820 | $ | 4,881 | ||||||||
| Interest earning deposits at Federal Reserve Bank | 47,105 | 399,853 | 1,033,270 | 898,533 | ||||||||||||
| Total cash and cash equivalents | 55,765 | 405,594 | 1,038,090 | 903,414 | ||||||||||||
| Investment securities, available-for-sale, at fair value, net of $10.0 million allowance for credit loss | 1,588,289 | 1,581,006 | 747,534 | 756,636 | ||||||||||||
| Commercial loans, at fair value | 252,004 | 265,193 | 332,766 | 379,603 | ||||||||||||
| Loans, net of deferred fees and costs | 5,906,616 | 5,605,727 | 5,361,139 | 5,198,972 | ||||||||||||
| Allowance for credit losses | (31,004 | ) | (28,575 | ) | (27,378 | ) | (24,145 | ) | ||||||||
| Loans, net | 5,875,612 | 5,577,152 | 5,333,761 | 5,174,827 | ||||||||||||
| Federal Home Loan Bank, Atlantic Central Bankers Bank, and Federal Reserve Bank stock | 21,717 | 15,642 | 15,591 | 20,157 | ||||||||||||
| Premises and equipment, net | 28,091 | 28,038 | 27,474 | 28,978 | ||||||||||||
| Accrued interest receivable | 42,915 | 43,720 | 37,534 | 34,159 | ||||||||||||
| Intangible assets, net | 1,353 | 1,452 | 1,651 | 1,751 | ||||||||||||
| Other real estate owned | 61,739 | 57,861 | 16,949 | 18,756 | ||||||||||||
| Deferred tax asset, net | 9,604 | 20,556 | 21,219 | 20,379 | ||||||||||||
| Other assets | 157,501 | 149,187 | 133,126 | 127,107 | ||||||||||||
| Total assets | $ | 8,094,590 | $ | 8,145,401 | $ | 7,705,695 | $ | 7,465,767 | ||||||||
| Liabilities: | ||||||||||||||||
| Deposits | ||||||||||||||||
| Demand and interest checking | $ | 6,844,128 | $ | 7,095,391 | $ | 6,630,251 | $ | 6,455,043 | ||||||||
| Savings and money market | 81,624 | 60,297 | 50,659 | 49,428 | ||||||||||||
| Total deposits | 6,925,752 | 7,155,688 | 6,680,910 | 6,504,471 | ||||||||||||
| Securities sold under agreements to repurchase | — | — | 42 | 42 | ||||||||||||
| Short-term borrowings | 135,000 | — | — | — | ||||||||||||
| Senior debt | 96,125 | 96,037 | 95,859 | 95,771 | ||||||||||||
| Subordinated debenture | 13,401 | 13,401 | 13,401 | 13,401 | ||||||||||||
| Other long-term borrowings | 38,157 | 38,283 | 38,561 | 9,861 | ||||||||||||
| Other liabilities | 70,829 | 65,001 | 69,641 | 68,533 | ||||||||||||
| Total liabilities | $ | 7,279,264 | $ | 7,368,410 | $ | 6,898,414 | $ | 6,692,079 | ||||||||
| Shareholders' equity: | ||||||||||||||||
| Common stock - authorized, 75,000,000 shares of $1.00 par value; 48,230,334 and 53,867,129 shares issued and outstanding at September 30, 2024 and 2023, respectively | 48,231 | 49,268 | 53,203 | 53,867 | ||||||||||||
| Additional paid-in capital | 26,573 | 72,171 | 212,431 | 234,320 | ||||||||||||
| Retained earnings | 723,247 | 671,730 | 561,615 | 517,587 | ||||||||||||
| Accumulated other comprehensive income (loss) | 17,275 | (16,178 | ) | (19,968 | ) | (32,086 | ) | |||||||||
| Total shareholders' equity | 815,326 | 776,991 | 807,281 | 773,688 | ||||||||||||
| Total liabilities and shareholders' equity | $ | 8,094,590 | $ | 8,145,401 | $ | 7,705,695 | $ | 7,465,767 | ||||||||
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| Average balance sheet and net interest income | Three months ended September 30, 2024 | Three months ended September 30, 2023 | ||||||||||||||||||||||
| (Dollars in thousands; unaudited) | ||||||||||||||||||||||||
| Average | Average | Average | Average | |||||||||||||||||||||
| Assets: | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||
| Interest earning assets: | ||||||||||||||||||||||||
| Loans, net of deferred fees and costs(1) | $ | 6,017,911 | $ | 116,367 | 7.73 | % | $ | 5,603,514 | $ | 110,506 | 7.89 | % | ||||||||||||
| Leases-bank qualified(2) | 5,151 | 146 | 11.34 | % | 4,585 | 110 | 9.60 | % | ||||||||||||||||
| Investment securities-taxable | 1,575,091 | 19,767 | 5.02 | % | 768,364 | 9,647 | 5.02 | % | ||||||||||||||||
| Investment securities-nontaxable(2) | 2,927 | 55 | 7.52 | % | 3,005 | 50 | 6.66 | % | ||||||||||||||||
| Interest earning deposits at Federal Reserve Bank | 247,344 | 3,387 | 5.48 | % | 639,946 | 8,689 | 5.43 | % | ||||||||||||||||
| Net interest earning assets | 7,848,424 | 139,722 | 7.12 | % | 7,019,414 | 129,002 | 7.35 | % | ||||||||||||||||
| Allowance for credit losses | (28,254 | ) | (23,147 | ) | ||||||||||||||||||||
| Other assets | 222,646 | 338,085 | ||||||||||||||||||||||
| $ | 8,042,816 | $ | 7,334,352 | |||||||||||||||||||||
| Liabilities and Shareholders' Equity: | ||||||||||||||||||||||||
| Deposits: | ||||||||||||||||||||||||
| Demand and interest checking | $ | 6,942,029 | $ | 42,149 | 2.43 | % | $ | 6,229,668 | $ | 37,913 | 2.43 | % | ||||||||||||
| Savings and money market | 65,079 | 549 | 3.37 | % | 56,538 | 518 | 3.66 | % | ||||||||||||||||
| Total deposits | 7,007,108 | 42,698 | 2.44 | % | 6,286,206 | 38,431 | 2.45 | % | ||||||||||||||||
| Short-term borrowings | 73,480 | 1,030 | 5.61 | % | — | — | — | |||||||||||||||||
| Repurchase agreements | — | — | — | 41 | — | — | ||||||||||||||||||
| Long-term borrowings | 38,235 | 689 | 7.21 | % | 9,889 | 128 | 5.18 | % | ||||||||||||||||
| Subordinated debentures | 13,401 | 297 | 8.87 | % | 13,401 | 293 | 8.75 | % | ||||||||||||||||
| Senior debt | 96,071 | 1,234 | 5.14 | % | 95,714 | 1,234 | 5.16 | % | ||||||||||||||||
| Total deposits and liabilities | 7,228,295 | 45,948 | 2.54 | % | 6,405,251 | 40,086 | 2.50 | % | ||||||||||||||||
| Other liabilities | 18,362 | 167,673 | ||||||||||||||||||||||
| Total liabilities | 7,246,657 | 6,572,924 | ||||||||||||||||||||||
| Shareholders' equity | 796,159 | 761,428 | ||||||||||||||||||||||
| $ | 8,042,816 | $ | 7,334,352 | |||||||||||||||||||||
| Net interest income on tax equivalent basis(2) | $ | 93,774 | $ | 88,916 | ||||||||||||||||||||
| Tax equivalent adjustment | 42 | 34 | ||||||||||||||||||||||
| Net interest income | $ | 93,732 | $ | 88,882 | ||||||||||||||||||||
| Net interest margin(2) | 4.78 | % | 5.07 | % | ||||||||||||||||||||
| (1) Includes commercial loans, at fair value. All periods include non-accrual loans. |
| (2) Full taxable equivalent basis, using 21% respective statutory federal tax rates in 2024 and 2023. |
| 7 |
| Average balance sheet and net interest income | Nine months ended September 30, 2024 | Nine months ended September 30, 2023 | ||||||||||||||
| (Dollars in thousands; unaudited) | ||||||||||||||||
| Average | Average | Average | Average | |||||||||||||
| Assets: | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||
| Interest earning assets: | ||||||||||||||||
| Loans, net of deferred fees and costs(1) | $ | 5,828,938 | $ | 345,497 | 7.90% | $ | 5,772,266 | $ | 324,009 | 7.48% | ||||||
| Leases-bank qualified(2) | 4,840 | 379 | 10.44% | 3,920 | 279 | 9.49% | ||||||||||
| Investment securities-taxable | 1,255,532 | 46,921 | 4.98% | 773,485 | 28,820 | 4.97% | ||||||||||
| Investment securities-nontaxable(2) | 2,905 | 155 | 7.11% | 3,193 | 144 | 6.01% | ||||||||||
| Interest earning deposits at Federal Reserve Bank | 486,883 | 19,948 | 5.46% | 640,554 | 24,271 | 5.05% | ||||||||||
| Net interest earning assets | 7,579,098 | 412,900 | 7.26% | 7,193,418 | 377,523 | 7.00% | ||||||||||
| Allowance for credit losses | (27,993) | (23,192) | ||||||||||||||
| Other assets | 280,733 | 269,072 | ||||||||||||||
| $ | 7,831,838 | $ | 7,439,298 | |||||||||||||
| Liabilities and Shareholders' Equity: | ||||||||||||||||
| Deposits: | ||||||||||||||||
| Demand and interest checking | $ | 6,684,671 | $ | 120,405 | 2.40% | $ | 6,343,711 | $ | 106,984 | 2.25% | ||||||
| Savings and money market | 58,777 | 1,453 | 3.30% | 88,738 | 2,465 | 3.70% | ||||||||||
| Time deposits | — | — | — | 27,802 | 858 | 4.11% | ||||||||||
| Total deposits | 6,743,448 | 121,858 | 2.41% | 6,460,251 | 110,307 | 2.28% | ||||||||||
| Short-term borrowings | 55,820 | 2,344 | 5.60% | 6,758 | 234 | 4.62% | ||||||||||
| Repurchase agreements | 4 | — | — | 41 | — | — | ||||||||||
| Long-term borrowings | 38,371 | 2,060 | 7.16% | 9,945 | 382 | 5.12% | ||||||||||
| Subordinated debentures | 13,401 | 880 | 8.76% | 13,401 | 825 | 8.21% | ||||||||||
| Senior debt | 95,983 | 3,701 | 5.14% | 97,220 | 3,793 | 5.20% | ||||||||||
| Total deposits and liabilities | 6,947,027 | 130,843 | 2.51% | 6,587,616 | 115,541 | 2.34% | ||||||||||
| Other liabilities | 73,507 | 117,822 | ||||||||||||||
| Total liabilities | 7,020,534 | 6,705,438 | ||||||||||||||
| Shareholders' equity | 811,304 | 733,860 | ||||||||||||||
| $ | 7,831,838 | $ | 7,439,298 | |||||||||||||
| Net interest income on tax equivalent basis(2) | $ | 282,057 | $ | 261,982 | ||||||||||||
| Tax equivalent adjustment | 112 | 89 | ||||||||||||||
| Net interest income | $ | 281,945 | $ | 261,893 | ||||||||||||
| Net interest margin(2) | 4.96% | 4.86% | ||||||||||||||
| (1) Includes commercial loans, at fair value. All periods include non-accrual loans. |
| (2) Full taxable equivalent basis, using 21% respective statutory federal tax rates in 2024 and 2023. |
| 8 |
| Allowance for credit losses | Nine months ended | Year ended | ||||||
| September 30, | September 30, | December 31, | ||||||
| 2024 (unaudited) | 2023 (unaudited) | 2023 | ||||||
| (Dollars in thousands) | ||||||||
| Balance in the allowance for credit losses at beginning of period | $ | 27,378 | $ | 22,374 | $ | 22,374 | ||
| Loans charged-off: | ||||||||
| SBA non-real estate | 431 | 871 | 871 | |||||
| SBA commercial mortgage | — | — | 76 | |||||
| Direct lease financing | 3,625 | 2,804 | 3,666 | |||||
| IBLOC | — | — | 24 | |||||
| Consumer - home equity | 10 | — | — | |||||
| Other loans | 6 | 3 | 3 | |||||
| Total | 4,072 | 3,678 | 4,640 | |||||
| Recoveries: | ||||||||
| SBA non-real estate | 102 | 446 | 475 | |||||
| SBA commercial mortgage | — | 75 | 75 | |||||
| Direct lease financing | 279 | 220 | 330 | |||||
| Consumer - home equity | 1 | 299 | 299 | |||||
| Total | 382 | 1,040 | 1,179 | |||||
| Net charge-offs | 3,690 | 2,638 | 3,461 | |||||
| Provision for credit losses on loans | 7,316 | 4,409 | 8,465 | |||||
| Balance in allowance for credit losses at end of period | $ | 31,004 | $ | 24,145 | $ | 27,378 | ||
| Net charge-offs/average loans | 0.07% | 0.05% | 0.07% | |||||
| Net charge-offs/average assets | 0.05% | 0.04% | 0.05% | |||||
| 9 |
| Loan portfolio | September 30, | June 30, | December 31, | September 30, | ||||||||
| 2024 (unaudited) | 2024 (unaudited) | 2023 | 2023 (unaudited) | |||||||||
| (Dollars in thousands) | ||||||||||||
| SBL non-real estate | $ | 179,915 | $ | 171,893 | $ | 137,752 | $ | 130,579 | ||||
| SBL commercial mortgage | 665,608 | 647,894 | 606,986 | 547,107 | ||||||||
| SBL construction | 30,158 | 30,881 | 22,627 | 19,204 | ||||||||
| Small business loans | 875,681 | 850,668 | 767,365 | 696,890 | ||||||||
| Direct lease financing | 711,836 | 711,403 | 685,657 | 670,208 | ||||||||
| SBLOC / IBLOC(1) | 1,543,215 | 1,558,095 | 1,627,285 | 1,720,513 | ||||||||
| Advisor financing(2) | 248,422 | 238,831 | 221,612 | 199,442 | ||||||||
| Real estate bridge loans | 2,189,761 | 2,119,324 | 1,999,782 | 1,848,224 | ||||||||
| Consumer fintech(3) | 280,092 | 70,081 | — | — | ||||||||
| Other loans(4) | 46,586 | 46,592 | 50,638 | 55,800 | ||||||||
| 5,895,593 | 5,594,994 | 5,352,339 | 5,191,077 | |||||||||
| Unamortized loan fees and costs | 11,023 | 10,733 | 8,800 | 7,895 | ||||||||
| Total loans, including unamortized fees and costs | $ | 5,906,616 | $ | 5,605,727 | $ | 5,361,139 | $ | 5,198,972 | ||||
| Small business portfolio | September 30, | June 30, | December 31, | September 30, | |||||||
| 2024 (unaudited) | 2024 (unaudited) | 2023 | 2023 (unaudited) | ||||||||
| (Dollars in thousands) | |||||||||||
| SBL, including unamortized fees and costs | $ | 885,263 | $ | 860,226 | $ | 776,867 | $ | 705,790 | |||
| SBL, included in loans, at fair value | 93,888 | 104,146 | 119,287 | 126,543 | |||||||
| Total small business loans(5) | $ | 979,151 | $ | 964,372 | $ | 896,154 | $ | 832,333 | |||
(1) SBLOC loans are collateralized by marketable securities, while IBLOC are collateralized by the cash surrender value of insurance policies. At September 30, 2024 and December 31, 2023, IBLOC loans amounted to $554.0 million and $646.9 million, respectively.
(2) In 2020 The Bancorp began originating loans to investment advisors for purposes of debt refinancing, acquisition of another firm or internal succession. Maximum loan amounts are subject to loan-to-value ratios of 70% of the business enterprise value based on a third-party valuation, but may be increased depending upon the debt service coverage ratio. Personal guarantees and blanket business liens are obtained as appropriate.
(3) Consumer fintech loans consist primarily of secured credit card loans.
(4) Includes demand deposit overdrafts reclassified as loan balances totaling $960,000 and $1.7 million at September 30, 2024 and December 31, 2023, respectively. Estimated overdraft charge-offs and recoveries are reflected in the allowance for credit losses and are immaterial.
(5) The SBLs held at fair value are comprised of the government guaranteed portion of 7(a) Program loans at the dates indicated.
Small business loans as of September 30, 2024
| Loan principal | |||
| (Dollars in millions) | |||
| U.S. government guaranteed portion of SBA loans(1) | $ | 392 | |
| PPP loans(1) | 2 | ||
| Commercial mortgage SBA(2) | 349 | ||
| Construction SBA(3) | 10 | ||
| Non-guaranteed portion of U.S. government guaranteed 7(a) Program loans(4) | 114 | ||
| Non-SBA SBLs | 73 | ||
| Other(5) | 28 | ||
| Total principal | $ | 968 | |
| Unamortized fees and costs | 11 | ||
| Total SBLs | $ | 979 | |
(1) Includes the portion of SBA 7(a) Program loans and PPP loans which have been guaranteed by the U.S. government, and therefore are assumed to have no credit risk.
(2) Substantially all these loans are made under the 504 Program, which dictates origination date LTV percentages, generally 50%-60%, to which The Bancorp adheres.
(3) Includes $9 million in 504 Program first mortgages with an origination date LTV of 50%-60%, and $1 million in SBA interim loans with an approved SBA post-construction full takeout/payoff.
(4) Includes the unguaranteed portion of 7(a) Program loans which are 70% or more guaranteed by the U.S. government. SBA 7(a) Program 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 7(a) Program loans and 504 Program loans require the personal guaranty of all 20% or greater owners.
(5) Comprised of $28 million of loans sold that do not qualify for true sale accounting.
| 10 |
Small business loans by type as of September 30, 2024
(Excludes government guaranteed portion of SBA 7(a) Program and PPP loans)
| SBL commercial mortgage(1) | SBL construction(1) | SBL non-real estate | Total | % Total | |||||||||||
| (Dollars in millions) | |||||||||||||||
| Hotels (except casino hotels) and motels | $ | 88 | $ | — | $ | — | $ | 88 | 16% | ||||||
| Funeral homes and funeral services | 20 | — | 28 | 48 | 9% | ||||||||||
| Full-service restaurants | 29 | 2 | 2 | 33 | 6% | ||||||||||
| Child day care services | 23 | 1 | 1 | 25 | 5% | ||||||||||
| Car washes | 16 | 4 | — | 20 | 4% | ||||||||||
| General line grocery merchant wholesalers | 17 | — | — | 17 | 3% | ||||||||||
| Homes for the elderly | 16 | — | — | 16 | 3% | ||||||||||
| Outpatient mental health and substance abuse centers | 15 | — | — | 15 | 3% | ||||||||||
| Gasoline stations with convenience stores | 14 | — | — | 14 | 3% | ||||||||||
| Fitness and recreational sports centers | 8 | — | 2 | 10 | 2% | ||||||||||
| Nursing care facilities | 9 | — | — | 9 | 2% | ||||||||||
| Lawyer's office | 9 | — | — | 9 | 2% | ||||||||||
| Limited-service restaurants | 4 | 1 | 3 | 8 | 1% | ||||||||||
| Caterers | 7 | — | — | 7 | 1% | ||||||||||
| All other specialty trade contractors | 7 | — | — | 7 | 1% | ||||||||||
| General warehousing and storage | 6 | — | — | 6 | 1% | ||||||||||
| Appliance repair and maintenance | 6 | — | — | 6 | 1% | ||||||||||
| Other accounting services | 5 | — | — | 5 | 1% | ||||||||||
| Plumbing, heating, and air-conditioning contractors | 5 | — | 1 | 6 | 1% | ||||||||||
| Other miscellaneous durable goods merchant | 5 | — | — | 5 | 1% | ||||||||||
| Packaged frozen food merchant wholesalers | 5 | — | — | 5 | 1% | ||||||||||
| Lessors of nonresidential buildings (except miniwarehouses) | 5 | — | — | 5 | 1% | ||||||||||
| Other technical and trade schools | 5 | — | — | 5 | 1% | ||||||||||
| All other amusement and recreation industries | 4 | — | — | 4 | 1% | ||||||||||
| Other(2) | 136 | 8 | 29 | 173 | 30% | ||||||||||
| Total | $ | 464 | $ | 16 | $ | 66 | $ | 546 | 100% | ||||||
(1) Of the SBL commercial mortgage and SBL construction loans, $121 million represents the total of the non-guaranteed portion of SBA 7(a) Program loans and non-SBA loans. The balance of those categories represents SBA 504 Program loans with 50%-60% origination date LTVs. SBL Commercial excludes $28 million of loans sold that do not qualify for true sale accounting.
(2) Loan types of less than $4 million are spread over approximately one hundred different business types.
State diversification as of September 30, 2024
(Excludes government guaranteed portion of SBA 7(a) Program loans and PPP loans)
| SBL commercial mortgage(1) | SBL construction(1) | SBL non-real estate | Total | % Total | |||||||||||
| (Dollars in millions) | |||||||||||||||
| California | $ | 126 | $ | 3 | $ | 5 | $ | 134 | 25% | ||||||
| Florida | 76 | 5 | 4 | 85 | 16% | ||||||||||
| North Carolina | 45 | 1 | 5 | 51 | 9% | ||||||||||
| New York | 32 | — | 2 | 34 | 6% | ||||||||||
| Pennsylvania | 20 | — | 13 | 33 | 6% | ||||||||||
| Texas | 21 | 3 | 6 | 30 | 5% | ||||||||||
| New Jersey | 21 | — | 7 | 28 | 5% | ||||||||||
| Georgia | 25 | 2 | 1 | 28 | 5% | ||||||||||
| Other States | 98 | 2 | 23 | 123 | 23% | ||||||||||
| Total | $ | 464 | $ | 16 | $ | 66 | $ | 546 | 100% | ||||||
(1) Of the SBL commercial mortgage and SBL construction loans, $121 million represents the total of the non-guaranteed portion of SBA 7(a) Program loans and non-SBA loans. The balance of those categories represents SBA 504 Program loans with 50%-60% origination date LTVs. SBL Commercial excludes $28 million of loans that do not qualify for true sale accounting.
| 11 |
Top 10 loans as of September 30, 2024
| Type(1) | State | SBL commercial mortgage | |||||
| (Dollars in millions) | |||||||
| General line grocery merchant wholesalers | CA | $ | 13 | ||||
| Funeral homes and funeral services | PA | 13 | |||||
| Outpatient mental health and substance abuse center | FL | 10 | |||||
| Funeral homes and funeral services | ME | 8 | |||||
| Hotel | FL | 8 | |||||
| Lawyer's office | CA | 8 | |||||
| Hotel | VA | 7 | |||||
| Hotel | NC | 7 | |||||
| General warehousing and storage | PA | 6 | |||||
| Appliance repair and maintenance | NY | 6 | |||||
| Total | $ | 86 | |||||
(1) The table above does not include loans to the extent that they are U.S. government guaranteed.
| 12 |
Commercial real estate loans, excluding SBA loans, are as follows including LTV at origination:
Type as of September 30, 2024
| Type | # Loans | Balance | Weighted average origination date LTV | Weighted average interest rate | ||||||
| (Dollars in millions) | ||||||||||
| Real estate bridge loans (multifamily apartment loans recorded at amortized cost)(1) | 172 | $ | 2,190 | 70% | 9.13% | |||||
| Non-SBA commercial real estate loans, at fair value: | ||||||||||
| Multifamily (apartment bridge loans)(1) | 7 | $ | 113 | 74% | 7.98% | |||||
| Hospitality (hotels and lodging) | 2 | 27 | 65% | 9.82% | ||||||
| Retail | 2 | 12 | 72% | 8.19% | ||||||
| Other | 2 | 9 | 72% | 5.01% | ||||||
| 13 | 161 | 72% | 8.14% | |||||||
| Fair value adjustment | (3) | |||||||||
| Total non-SBA commercial real estate loans, at fair value | 158 | |||||||||
| Total commercial real estate loans | $ | 2,348 | 70% | 9.07% | ||||||
(1) In the third quarter of 2021, we resumed the origination of bridge loans for multi-family apartment rehabilitation which comprise these categories. Such loans held at fair value were originally intended for sale, but are now being retained on the balance sheet. In addition to “as is” origination date appraisals, on which the weighted average origination date LTVs are based, third-party appraisers also estimated “as stabilized” values, which represents additional potential collateral value as rehabilitation progresses, and units are re-leased at stabilized rental rates. The weighted average origination date “as stabilized” LTV was estimated at 61%.
| State diversification as of September 30, 2024 | 15 largest loans as of September 30, 2024 | ||||||||||||||
| State | Balance | Origination date LTV | State | Balance | Origination date LTV | ||||||||||
| (Dollars in millions) | (Dollars in millions) | ||||||||||||||
| Texas | $ | 735 | 71% | Texas | $ | 46 | 75% | ||||||||
| Georgia | 262 | 70% | Tennessee | 40 | 72% | ||||||||||
| Florida | 230 | 68% | Michigan | 38 | 62% | ||||||||||
| Michigan | 136 | 68% | Texas | 37 | 64% | ||||||||||
| Indiana | 108 | 70% | Texas | 36 | 67% | ||||||||||
| New Jersey | 107 | 69% | Florida | 35 | 72% | ||||||||||
| Ohio | 92 | 66% | Pennsylvania | 34 | 63% | ||||||||||
| Other States each <$65 million | 678 | 71% | Indiana | 34 | 76% | ||||||||||
| Total | $ | 2,348 | 70% | New Jersey | 34 | 62% | |||||||||
| Texas | 33 | 62% | |||||||||||||
| Michigan | 33 | 79% | |||||||||||||
| Oklahoma | 31 | 78% | |||||||||||||
| Texas | 31 | 77% | |||||||||||||
| New Jersey | 31 | 71% | |||||||||||||
| Michigan | 29 | 66% | |||||||||||||
| 15 largest commercial real estate loans | $ | 522 | 70% | ||||||||||||
| 13 |
Institutional banking loans outstanding at September 30, 2024
| Type | Principal | % of total | ||
| (Dollars in millions) | ||||
| SBLOC | $ | 989 | 55% | |
| IBLOC | 554 | 31% | ||
| Advisor financing | 249 | 14% | ||
| Total | $ | 1,792 | 100% | |
For SBLOC, we generally lend up to 50% of the value of equities and 80% for investment grade securities. While the value of equities has fallen in excess of 30% in recent years, the reduction in collateral value of brokerage accounts collateralizing SBLOC loans 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. Second, 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 September 30, 2024
| Principal amount | % Principal to collateral | |||
| (Dollars in millions) | ||||
| $ | 9 | 41% | ||
| 8 | 84% | |||
| 8 | 62% | |||
| 8 | 63% | |||
| 7 | 44% | |||
| 5 | 57% | |||
| 5 | 65% | |||
| 5 | 58% | |||
| 5 | 56% | |||
| 5 | 43% | |||
| Total and weighted average | $ | 65 | 58% | |
Insurance backed lines of credit (IBLOC)
IBLOC loans are backed by the cash value of eligible life insurance policies which have been assigned to us. We generally lend up to 95% of such cash value. Our underwriting standards require approval of the insurance companies which carry the policies backing these loans. Currently, fifteen insurance companies have been approved and, as of October 17, 2024, all were rated A- (Excellent) or better by AM BEST.
| 14 |
Direct lease financing by type as of September 30, 2024
| Principal balance(1) | % Total | |||
| (Dollars in millions) | ||||
| Government agencies and public institutions(2) | $ | 131 | 18% | |
| Construction | 112 | 16% | ||
| Waste management and remediation services | 97 | 14% | ||
| Real estate and rental and leasing | 86 | 12% | ||
| Health care and social assistance | 29 | 4% | ||
| Other services (except public administration) | 22 | 3% | ||
| Professional, scientific, and technical services | 22 | 3% | ||
| General freight trucking | 21 | 3% | ||
| Finance and insurance | 14 | 2% | ||
| Transit and other transportation | 13 | 2% | ||
| Wholesale trade | 10 | 1% | ||
| Educational services | 7 | 1% | ||
| Other | 148 | 21% | ||
| Total | $ | 712 | 100% |
(1) Of the total $712 million of direct lease financing, $648 million consisted of vehicle leases with the remaining balance consisting of equipment leases.
(2) Includes public universities as well as school districts.
Direct lease financing by state as of September 30, 2024
| State | Principal balance | % Total | ||
| (Dollars in millions) | ||||
| Florida | $ | 108 | 15% | |
| New York | 70 | 10% | ||
| Utah | 58 | 8% | ||
| California | 49 | 7% | ||
| Connecticut | 45 | 6% | ||
| Pennsylvania | 42 | 6% | ||
| New Jersey | 39 | 5% | ||
| North Carolina | 36 | 5% | ||
| Maryland | 36 | 5% | ||
| Texas | 26 | 4% | ||
| Idaho | 19 | 3% | ||
| Washington | 16 | 2% | ||
| Ohio | 14 | 2% | ||
| Georgia | 14 | 2% | ||
| Alabama | 13 | 2% | ||
| Other States | 127 | 18% | ||
| Total | $ | 712 | 100% |
| 15 |
| Capital ratios | ||||||||||||||||
Tier 1 capital to average assets ratio | Tier 1 capital to risk-weighted assets ratio | Total capital to risk-weighted assets ratio | Common equity tier 1 to risk weighted assets | |||||||||||||
| As of September 30, 2024 | ||||||||||||||||
| The Bancorp, Inc. | 9.86% | 13.62% | 14.19% | 13.62% | ||||||||||||
| The Bancorp Bank, National Association | 10.94% | 15.11% | 15.67% | 15.11% | ||||||||||||
| "Well capitalized" institution (under federal regulations-Basel III) | 5.00% | 8.00% | 10.00% | 6.50% | ||||||||||||
| As of December 31, 2023 | ||||||||||||||||
| The Bancorp, Inc. | 11.19% | 15.66% | 16.23% | 15.66% | ||||||||||||
| The Bancorp Bank, National Association | 12.37% | 17.35% | 17.92% | 17.35% | ||||||||||||
| "Well capitalized" institution (under federal regulations-Basel III) | 5.00% | 8.00% | 10.00% | 6.50% | ||||||||||||
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Selected operating ratios | ||||||||||||||||
| Return on average assets(1) | 2.55% | 2.71% | 2.76% | 2.66% | ||||||||||||
| Return on average equity(1) | 25.74% | 26.12% | 26.61% | 27.01% | ||||||||||||
| Net interest margin | 4.78% | 5.07% | 4.96% | 4.86% | ||||||||||||
(1) Annualized
| Book value per share table | September 30, | June 30, | December 31, | September 30, | ||||||||||||
| 2024 | 2024 | 2023 | 2023 | |||||||||||||
| Book value per share | $ | 16.90 | $ | 15.77 | $ | 15.17 | $ | 14.36 | ||||||||
| Loan delinquency and other real estate owned | September 30, 2024 | |||||||||||||||||||||||||||
| 30-59 days past due | 60-89 days past due | 90+ days still accruing | Non-accrual | Total past due | Current | Total loans | ||||||||||||||||||||||
| SBL non-real estate | $ | 72 | $ | 322 | $ | 758 | $ | 3,047 | $ | 4,199 | $ | 175,716 | $ | 179,915 | ||||||||||||||
| SBL commercial mortgage | — | — | 336 | 4,898 | 5,234 | 660,374 | 665,608 | |||||||||||||||||||||
| SBL construction | — | — | — | 1,585 | 1,585 | 28,573 | 30,158 | |||||||||||||||||||||
| Direct lease financing | 5,791 | 12,883 | 1,260 | 3,919 | 23,853 | 687,983 | 711,836 | |||||||||||||||||||||
| SBLOC / IBLOC | 10,251 | 2,014 | 2,383 | — | 14,648 | 1,528,567 | 1,543,215 | |||||||||||||||||||||
| Advisor financing | — | — | — | — | — | 248,422 | 248,422 | |||||||||||||||||||||
| Real estate bridge loans(1) | — | — | — | 12,300 | 12,300 | 2,177,461 | 2,189,761 | |||||||||||||||||||||
| Consumer fintech | 4,021 | 4 | — | — | 4,025 | 276,067 | 280,092 | |||||||||||||||||||||
| Other loans | — | — | — | — | — | 46,586 | 46,586 | |||||||||||||||||||||
| Unamortized loan fees and costs | — | — | — | — | — | 11,023 | 11,023 | |||||||||||||||||||||
| $ | 20,135 | $ | 15,223 | $ | 4,737 | $ | 25,749 | $ | 65,844 | $ | 5,840,772 | $ | 5,906,616 | |||||||||||||||
(1) The $12.3 million shown in the non-accrual column for real estate bridge loans is collateralized by apartment building property with respective 72% and 56% “as is” and “as stabilized” LTVs, respectively, based upon a May 2024 appraisal. “As stabilized” LTVs represent additional potential collateral value as rehabilitation progresses, and units are re-leased at stabilized rental rates. This loan had a prior six-month payment deferral granted in the fourth quarter of 2024 and did not resume making payments. The table above does not include an $11.2 million loan accounted for at fair value, and, as such, not reflected in delinquency tables. In third quarter 2024, the borrower notified the Company that he would no longer be making payments on the loan, which is collateralized by a vacant retail property. Based upon a July 2024 appraisal, the “as is” LTV is 84% and the “as stabilized” LTV is 62%. Since 2021, real estate bridge lending originations have consisted of apartment buildings, while this loan was originated previously.
Other loan information
Of the $84.4 million special mention and $155.4 million substandard loans at September 30, 2024, $55.3 million were modified in the third quarter of 2024 and received reductions in interest rates and payment deferrals. Included in that total was $26.9 million which had been modified in first quarter 2024 with a six-month payment deferral. The third quarter additional modification was for an additional three-month payment deferral and a partial nine-month payment deferral. Not included in that modification total were $19.3 million which was recapitalized with a new borrower, who negotiated a partial interest deferral and rate reduction, and $37.3 million which is accounted for at fair value, and as such, not reflected in modification totals. While payment deferrals have generally been for three to twelve months, that loan was granted a 15-month payment deferral, followed by a nine-month partial payment deferral, in addition to an interest rate reduction. Going forward, the Company will not be accruing interest on this loan. The weighted average “as is” and “as stabilized” LTVs for the $19.3 million balance were 72% and 68%, respectively, while those LTVs for the $37.3 million were 73% and 65%, respectively. Those respective LTVs for the $26.9 million loan were 65% and 61%. These LTVs are based upon appraisals performed within the past twelve months.
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Other real estate owned year to date activity
| September 30, 2024 | ||
| Beginning balance | $ | 16,949 |
| Transfer from loans, net | 42,120 | |
| Transfer from commercial loans, at fair value | 1,744 | |
| Advances | 926 | |
| Ending balance | $ | 61,739 |
| September 30, | June 30, | December 31, | September 30, | ||||||||
| 2024 | 2024 | 2023 | 2023 | ||||||||
| (Dollars in thousands) | |||||||||||
| Asset quality ratios: | |||||||||||
| Nonperforming loans to total loans(1) | 0.52% | 0.34% | 0.25% | 0.30% | |||||||
| Nonperforming assets to total assets(1) | 1.14% | 0.95% | 0.39% | 0.46% | |||||||
| Allowance for credit losses to total loans | 0.52% | 0.51% | 0.51% | 0.46% | |||||||
(1) In the first quarter of 2024, a $39.4 million apartment building rehabilitation bridge loan with a September 30, 2024 balance of $40.3 million was transferred to nonaccrual status. On April 2, 2024, the same loan was transferred from nonaccrual status to other real estate owned. We intend to complete the improvements, which have already begun, on the underlying apartment building. During the time that improvements are being completed, the Company intends to have a property manager lease improved units as they become available, prior to the sale of the property. The $40.3 million loan balance compares to a September 2023 third-party “as is” appraisal of $47.8 million, or an 84% “as is” LTV, with additional potential collateral value as construction progresses, and units are re-leased at stabilized rental rates. Please see “Recent Developments” which summarizes the agreement of sale for this property.
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| Gross dollar volume (GDV)(1) | Three months ended | ||||||||||
| September 30, | June 30, | December 31, | September 30, | ||||||||
| 2024 | 2024 | 2023 | 2023 | ||||||||
| (Dollars in thousands) | |||||||||||
| Prepaid and debit card GDV | $ | 37,898,006 | $ | 37,139,200 | $ | 33,292,350 | $ | 32,972,249 | |||
(1) Gross dollar volume represents the total dollar amount spent on prepaid and debit cards issued by The Bancorp Bank, N.A.
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| Business line quarterly summary | |||||||||||||
| Quarter ended September 30, 2024 | |||||||||||||
| (Dollars in millions) | |||||||||||||
| Balances | |||||||||||||
| % Growth | |||||||||||||
| Major business lines | Average approximate rates(1) | Balances(2) | Year over year | Linked quarter annualized | |||||||||
| Loans | |||||||||||||
| Institutional banking(3) | 6.9% | $ 1,792 | (7%) | (1%) | |||||||||
| Small business lending(4) | 7.5% | 979 | 14% | 6% | |||||||||
| Leasing | 8.1% | 712 | 6% | — | |||||||||
| Commercial real estate (non-SBA loans, at fair value) | 8.1% | 158 | nm | nm | |||||||||
| Real estate bridge loans (recorded at book value) | 9.1% | 2,189 | 18% | 13% | |||||||||
| Consumer fintech loans - interest bearing | 5.5% | 10 | nm | nm | |||||||||
| Consumer fintech loans - non-interest bearing(5) | — | 270 | nm | nm | |||||||||
| Weighted average yield | 7.6% | $ 6,110 | Non-interest income | ||||||||||
| % Growth | |||||||||||||
| Deposits: Fintech Solutions group | Current quarter | Year over year | |||||||||||
| Prepaid and debit card issuance, and other payments | 2.5% | $ 6,649 | 11% | nm | $ 27.8 | 16% | |||||||
(1) Average rates are for the three months ended September 30, 2024.
(2) Loan and deposit categories are based on period-end and average quarterly balances, respectively.
(3) Institutional Banking loans are comprised of SBLOC loans collateralized by marketable securities, IBLOC loans collateralized by the cash surrender value of eligible life insurance policies, and investment advisor financing.
(4) Small Business Lending is substantially comprised of SBA-guaranteed loans. Growth rates exclude $28 million of loans that do not qualify for true sale accounting.
(5) Income related to non-interest-bearing balances is included in non-interest income.
Summary of credit lines available
The Bancorp maintains lines of credit exceeding potential liquidity requirements as follows. The Bancorp also has access to other substantial sources of liquidity.
| September 30, 2024 | ||
| (Dollars in thousands) | ||
| Federal Reserve Bank | $ | 1,974,022 |
| Federal Home Loan Bank | 1,106,517 | |
| Total lines of credit available | $ | 3,080,539 |
Estimated insured vs uninsured deposits
The vast majority of The Bancorp’s deposits are insured and low balance and accordingly do not constitute the liquidity risk experienced by certain institutions. Accordingly, the deposit base is comprised as follows.
| September 30, 2024 | ||
| Insured | 93% | |
| Low balance accounts | 3% | |
| Other uninsured | 4% | |
| Total deposits | 100% | |
Calculation of efficiency ratio(1)
| Three months ended | Year ended | |||||||
| September 30, | September 30, | December 31, | ||||||
| 2024 | 2023 | 2023 | ||||||
| (Dollars in thousands) | ||||||||
| Net interest income | $ | 93,732 | $ | 88,882 | $ | 354,052 | ||
| Non-interest income | 32,108 | 26,780 | 112,094 | |||||
| Total revenue | $ | 125,840 | $ | 115,662 | $ | 466,146 | ||
| Non-interest expense | $ | 53,255 | $ | 47,459 | $ | 191,042 | ||
| Efficiency ratio | 42% | 41% | 41% | |||||
| (1) | The efficiency ratio is calculated by dividing GAAP total non-interest expense by the total of GAAP net interest income and non-interest income. This ratio compares revenues generated with the amount of expense required to generate such revenues and may be used as one measure of overall efficiency. |
| 18 |
Segment Reporting
| For the nine months ended September 30, 2024 | |||||||||||||||||||
| Payments | REBL | Institutional Banking | Commercial | Corporate | Total | ||||||||||||||
| Interest income | $ | 33 | $ | 157,010 | $ | 91,987 | $ | 92,316 | $ | 71,442 | $ | 412,788 | |||||||
| Interest allocation | 196,251 | (73,570) | (53,111) | (52,499) | (17,071) | — | |||||||||||||
| Interest expense | 117,884 | — | 2,607 | 25 | 10,327 | 130,843 | |||||||||||||
| Net interest income | 78,400 | 83,440 | 36,269 | 39,792 | 44,044 | 281,945 | |||||||||||||
| Provision for credit losses | — | 2,555 | 166 | 4,427 | (172) | 6,976 | |||||||||||||
| Non-interest income | 84,639 | 2,646 | 214 | 4,251 | 462 | 92,212 | |||||||||||||
| Direct non-interest expense | |||||||||||||||||||
| Salaries and employee benefits | 11,433 | 2,917 | 6,784 | 13,653 | 63,177 | 97,964 | |||||||||||||
| Data processing expense | 1,155 | 125 | 1,771 | 5 | 1,196 | 4,252 | |||||||||||||
| Software | 364 | 78 | 2,253 | 1,343 | 9,649 | 13,687 | |||||||||||||
| Other | 6,728 | 2,601 | 1,663 | 5,836 | 18,682 | 35,510 | |||||||||||||
| Income before non-interest expense allocations | 143,359 | 77,810 | 23,846 | 18,779 | (48,026) | 215,768 | |||||||||||||
| Non-interest expense allocations | |||||||||||||||||||
| Risk, financial crimes, and compliance | 20,150 | 1,621 | 2,248 | 3,665 | (27,684) | — | |||||||||||||
| Information technology and operations | 10,151 | 539 | 4,449 | 5,533 | (20,672) | — | |||||||||||||
| Other allocated expenses | 11,830 | 2,244 | 4,904 | 5,266 | (24,244) | — | |||||||||||||
| Total non-interest expense allocations | 42,131 | 4,404 | 11,601 | 14,464 | (72,600) | — | |||||||||||||
| Income before taxes | 101,228 | 73,406 | 12,245 | 4,315 | 24,574 | 215,768 | |||||||||||||
| Income tax expense | 25,398 | 18,418 | 3,072 | 1,083 | 6,165 | 54,136 | |||||||||||||
| Net income | $ | 75,830 | $ | 54,988 | $ | 9,173 | $ | 3,232 | $ | 18,409 | $ | 161,632 | |||||||
| 19 |