Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries The Bancorp, Inc. Reports Fourth Quarter and Full Year 2022 Financial Results and Updates 2023 Guidance By: The Bancorp, Inc. via Business Wire January 26, 2023 at 16:05 PM EST The Bancorp, Inc. ("The Bancorp" or “we”) (NASDAQ: TBBK), a financial holding company, today reported financial results for the fourth quarter of 2022. Highlights The Bancorp reported net income of $40.2 million, or $0.71 per diluted share, for the quarter ended December 31, 2022, compared to net income of $27.0 million, or $0.46 per diluted share, for the quarter ended December 31, 2021, or a 54% increase in income per diluted share. Return on assets and equity for the quarter ended December 31, 2022 amounted to 2.1% and 24%, respectively, compared to 1.7% and 17%, respectively, for the quarter ended December 31, 2021 (all percentages “annualized”). Net interest income increased 47% to $76.8 million for the quarter ended December 31, 2022, compared to $52.2 million for the quarter ended December 31, 2021. Net interest margin amounted to 4.21% for the quarter ended December 31, 2022, compared to 3.51% for the quarter ended December 31, 2021, and 3.69% for the quarter ended September 30, 2022. Excluding commercial loans, at fair value, which were originally generated for sale, total loans increased to $5.49 billion at December 31, 2022, compared to $5.27 billion at September 30, 2022 and $3.75 billion at December 31, 2021. Those increases reflected growth of 4% quarter over quarter and 45% year over year. Those percentage increases exclude the impact of $50.4 million of December 31, 2022 balances previously included in discontinued assets which were reclassified to loans held for investment in the first quarter of 2022. Gross dollar volume (“GDV”), representing the total amounts spent on prepaid and debit cards, increased $3.25 billion, or 13%, to $28.07 billion for the quarter ended December 31, 2022 compared to the quarter ended December 31, 2021. Total prepaid, debit card, ACH and other payment fees increased 10% to $21.8 million for fourth quarter 2022 compared to the fourth quarter of 2021. SBLOC (securities backed lines of credit), IBLOC (insurance backed lines of credit) and investment advisor financing loans collectively increased 22% year over year and decreased 1% quarter over quarter to $2.50 billion at December 31, 2022. Small Business Loans, including those held at fair value, grew 10% year over year to $763.8 million at December 31, 2022, and 4% quarter over quarter. That growth is exclusive of PPP loan balances which amounted to $4.5 million and $44.8 million, respectively, at December 31, 2022 and December 31, 2021. Direct lease financing balances increased 19% year over year to $632.2 million at December 31, 2022, and 5% quarter over quarter. We resumed non-SBA commercial real estate bridge lending in the third quarter of 2021. At December 31, 2022, the balance of such real estate bridge loans, consisting of apartment buildings, was $1.67 billion compared to $1.49 billion at September 30, 2022, reflecting quarter over quarter growth of 12%. At December 31, 2021, these loans totaled $621.7 million. The average interest rate on $6.80 billion of average deposits and interest-bearing liabilities during the fourth quarter of 2022 was 1.77%. Average deposits of $6.62 billion for the fourth quarter of 2022, reflected an increase of 25% from the $5.31 billion of average deposits for the quarter ended December 31, 2021. As of December 31, 2022, tier one capital to assets (leverage), tier one capital to risk-weighted assets, total capital to risk-weighted assets and common equity-tier 1 to risk-weighted assets ratios were 9.63%, 13.40%, 13.87% and 13.40%, respectively, compared to well-capitalized minimums of 5%, 8%, 10% and 6.5%, respectively. The Bancorp and its wholly owned subsidiary, The Bancorp Bank, National Association, each remain well capitalized under banking regulations. Book value per common share at December 31, 2022 was $12.46 per share compared to $11.37 per share at December 31, 2021, an increase of 10%. Increases resulting from retained earnings were partially offset by reductions in the market value of securities available for sale, which are recognized through equity. The Bancorp repurchased 553,003 shares of its common stock at an average cost of $27.12 per share during the quarter ended December 31, 2022. “We finished 2022 with significant improvements in profitability, NIM and GDV growth, "said CEO and President Damian Kozlowski. "Our team continues to be focused on further improving our arguably best fintech ecosystem in banking, maintaining a lower risk balance sheet than peers, continuing our rigorous risk management and increasing profitability. We believe 2023 will be another substantial move forward on all fronts and we confirm our guidance of $3.20 a share, an improvement of approximately 40% over 2022 EPS. We expect to increase our share repurchases to $25 million per quarter, or $100 million in 2023, from $15 million a quarter, or $60 million, in 2022.” Conference Call Webcast You may access the LIVE webcast of The Bancorp's Quarterly Earnings Conference Call at 8:00 AM ET Friday, January 27, 2023 by clicking on the webcast link on The Bancorp's homepage at www.thebancorp.com. Or you may dial 1.888.396.8049, access code 92735961. You may listen to the replay of the webcast following the live call on The Bancorp's investor relations website or telephonically until Friday, February 3, 2023 by dialing 1.877.674.7070, access code 735961#. About The Bancorp The Bancorp, Inc. (NASDAQ: TBBK), headquartered in Wilmington, Delaware, through its subsidiary, The Bancorp Bank, National Association, (or “The Bancorp Bank, N. A.”) 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 “intend,” “may,” “believe,” “will,” “expect,” “look,” “anticipate,” “plan,” “estimate,” “continue,” or similar words , and are based on current expectations about important economic, political, and technological factors, among others, and are subject to risks and uncertainties, which could cause the actual results, events or achievements to differ materially from those set forth in or implied by the forward-looking statements and related assumptions. For further discussion of the risks and uncertainties to which these forward-looking statements may be subject, see The Bancorp’s filings with the Securities and Exchange Commission, including the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of those filings. The forward-looking statements speak only as of the date of this press release. The Bancorp does not undertake to publicly revise or update forward-looking statements in this press release to reflect events or circumstances that arise after the date of this press release, except as may be required under applicable law. The Bancorp, Inc. Financial highlights (unaudited) Three months ended Year ended December 31, December 31, Consolidated condensed income statements 2022 2021 2022 2021 (Dollars in thousands, except per share and share data) Net interest income $ 76,760 $ 52,157 $ 248,841 $ 210,876 Provision for credit losses 2,777 1,626 7,108 3,110 Non-interest income ACH, card and other payment processing fees 2,383 1,921 8,935 7,526 Prepaid, debit card and related fees 19,371 17,776 77,236 74,654 Net realized and unrealized gains on commercial loans, at fair value 2,269 6,004 13,531 14,885 Leasing related income 1,256 1,757 4,822 6,457 Other non-interest income 461 768 1,159 1,227 Total non-interest income 25,740 28,226 105,683 104,749 Non-interest expense Salaries and employee benefits 27,520 28,159 105,368 105,998 Data processing expense 1,245 1,183 4,972 4,664 Legal expense 703 1,499 3,878 6,848 Legal settlement — — 1,152 — Civil money penalty — — 1,750 — FDIC insurance 944 351 3,270 5,586 Software 4,181 4,224 16,211 15,659 Other non-interest expense 8,882 7,784 32,901 29,595 Total non-interest expense 43,475 43,200 169,502 168,350 Income from continuing operations before income taxes 56,248 35,557 177,914 144,165 Income tax expense 16,007 8,529 47,701 33,724 Net income from continuing operations 40,241 27,028 130,213 110,441 Discontinued operations (Loss) income from discontinued operations before income taxes — (36 ) — 288 Income tax expense — — — 76 Net (loss) income from discontinued operations, net of tax — (36 ) — 212 Net income $ 40,241 $ 26,992 $ 130,213 $ 110,653 Net income per share from continuing operations - basic $ 0.72 $ 0.47 $ 2.30 $ 1.93 Net income per share from discontinued operations - basic $ — $ — $ — $ — Net income per share - basic $ 0.72 $ 0.47 $ 2.30 $ 1.93 Net income per share from continuing operations - diluted $ 0.71 $ 0.46 $ 2.27 $ 1.88 Net income per share from discontinued operations - diluted $ — $ — $ — $ — Net income per share - diluted $ 0.71 $ 0.46 $ 2.27 $ 1.88 Weighted average shares - basic 55,885,015 56,966,661 56,556,303 57,190,311 Weighted average shares - diluted 56,588,011 58,369,204 57,268,946 58,830,437 Condensed consolidated balance sheets December 31, September 30, June 30, December 31, 2022 (unaudited) 2022 (unaudited) 2022 (unaudited) 2021 (Dollars in thousands, except per share and share data) Assets: Cash and cash equivalents Cash and due from banks $ 24,063 $ 22,537 $ 12,873 $ 5,382 Interest earning deposits at Federal Reserve Bank 864,126 700,175 329,992 596,402 Total cash and cash equivalents 888,189 722,712 342,865 601,784 Investment securities, available-for-sale, at fair value 766,016 790,594 826,616 953,709 Commercial loans, at fair value 589,143 818,040 995,493 1,388,416 Loans, net of deferred fees and costs 5,486,853 5,267,375 4,754,697 3,747,224 Allowance for credit losses (22,374 ) (19,689 ) (19,087 ) (17,806 ) Loans, net 5,464,479 5,247,686 4,735,610 3,729,418 Federal Home Loan Bank, Atlantic Central Bankers Bank, and Federal Reserve Bank stock 12,629 12,629 1,643 1,663 Premises and equipment, net 18,401 18,443 16,693 16,156 Accrued interest receivable 32,005 25,506 19,264 17,871 Intangible assets, net 2,049 2,149 2,248 2,447 Other real estate owned 21,210 18,873 18,873 18,873 Deferred tax asset, net 19,703 27,241 23,344 12,667 Assets held-for-sale from discontinued operations — — — 3,268 Other assets 89,176 93,201 137,086 96,967 Total assets $ 7,903,000 $ 7,777,074 $ 7,119,735 $ 6,843,239 Liabilities: Deposits Demand and interest checking $ 6,559,617 $ 5,934,591 $ 5,394,562 $ 5,561,365 Savings and money market 140,496 575,381 486,189 415,546 Time deposits, $100,000 and over 330,000 401,331 — — Total deposits 7,030,113 6,911,303 5,880,751 5,976,911 Securities sold under agreements to repurchase 42 42 42 42 Short-term borrowings — — 385,000 — Senior debt 99,050 98,958 98,866 98,682 Subordinated debenture 13,401 13,401 13,401 13,401 Other long-term borrowings 10,028 38,928 39,125 39,521 Other liabilities 56,335 50,704 46,014 62,228 Total liabilities $ 7,208,969 $ 7,113,336 $ 6,463,199 $ 6,190,785 Shareholders' equity: Common stock - authorized, 75,000,000 shares of $1.00 par value; 55,689,627 and 57,370,563 shares issued and outstanding at December 31, 2022 and 2021, respectively 55,690 56,202 56,865 57,371 Additional paid-in capital 299,279 311,569 323,774 349,686 Retained earnings 369,319 329,078 298,474 239,106 Accumulated other comprehensive (loss) income (30,257 ) (33,111 ) (22,577 ) 6,291 Total shareholders' equity 694,031 663,738 656,536 652,454 Total liabilities and shareholders' equity $ 7,903,000 $ 7,777,074 $ 7,119,735 $ 6,843,239 Average balance sheet and net interest income Three months ended December 31, 2022 Three months ended December 31, 2021 (Dollars in thousands; unaudited) Average Average Average Average Assets: Balance Interest Rate Balance Interest Rate Interest earning assets: Loans, net of deferred fees and costs* $ 6,083,587 $ 94,477 6.21 % $ 4,766,271 $ 48,792 4.09 % Leases-bank qualified** 2,952 50 6.78 % 4,465 76 6.81 % Investment securities-taxable 782,046 8,483 4.34 % 954,172 5,770 2.42 % Investment securities-nontaxable** 3,559 32 3.60 % 3,558 31 3.49 % Interest earning deposits at Federal Reserve Bank 424,255 3,886 3.66 % 208,120 65 0.12 % Net interest earning assets 7,296,399 106,928 5.86 % 5,936,586 54,734 3.69 % Allowance for credit losses (20,227 ) (17,108 ) Assets held-for-sale from discontinued operations — — — 83,821 708 3.38 % Other assets 223,692 189,760 $ 7,499,864 $ 6,193,059 Liabilities and Shareholders' Equity: Deposits: Demand and interest checking $ 5,891,947 $ 21,350 1.45 % $ 4,931,891 $ 1,015 0.08 % Savings and money market 474,302 4,332 3.65 % 373,381 114 0.12 % Time deposits 257,231 2,193 3.41 % — — — Total deposits 6,623,480 27,875 1.68 % 5,305,272 1,129 0.09 % Short-term borrowings 26,847 271 4.04 % 53,315 34 0.26 % Repurchase agreements 42 — — 41 — — Long-term borrowings 38,951 498 5.11 % — — — Subordinated debentures 13,401 226 6.75 % 13,401 112 3.34 % Senior debt 99,005 1,280 5.17 % 100,419 1,280 5.10 % Total deposits and liabilities 6,801,726 30,150 1.77 % 5,472,448 2,555 0.19 % Other liabilities 19,254 75,395 Total liabilities 6,820,980 5,547,843 Shareholders' equity 678,884 645,216 $ 7,499,864 $ 6,193,059 Net interest income on tax equivalent basis** $ 76,778 $ 52,887 Tax equivalent adjustment 18 22 Net interest income $ 76,760 $ 52,865 Net interest margin ** 4.21 % 3.51 % * Includes commercial loans, at fair value. All periods include non-accrual loans. ** Full taxable equivalent basis, using a statutory Federal tax rate of 21% for 2022 and 2021. NOTE: In the table above, interest on loans for 2022 and 2021 includes $12,000 and $991,000, respectively, of interest and fees on PPP loans. Average balance sheet and net interest income Year ended December 31, 2022 Year ended December 31, 2021 (Dollars in thousands; unaudited) Average Average Average Average Assets: Balance Interest Rate Balance Interest Rate Interest earning assets: Loans, net of deferred fees and costs* $ 5,670,957 $ 275,651 4.86 % $ 4,597,977 $ 192,338 4.18 % Leases-bank qualified** 3,479 235 6.75 % 5,557 377 6.78 % Investment securities-taxable 855,629 25,598 2.99 % 1,059,229 28,661 2.71 % Investment securities-nontaxable** 3,559 125 3.51 % 3,757 130 3.46 % Interest earning deposits at Federal Reserve Bank 479,791 6,762 1.41 % 637,056 715 0.11 % Net interest earning assets 7,013,415 308,371 4.40 % 6,303,576 222,221 3.53 % Allowance for credit losses (19,374 ) (16,469 ) Assets held for sale from discontinued operations — — — 95,527 3,096 3.24 % Other assets 213,491 217,476 $ 7,207,532 $ 6,600,110 Liabilities and Shareholders' Equity: Deposits: Demand and interest checking $ 5,670,818 $ 39,872 0.70 % $ 5,321,283 $ 5,022 0.09 % Savings and money market 510,370 8,524 1.67 % 427,708 601 0.14 % Time deposits 86,907 2,740 3.15 % — — — Total deposits 6,268,095 51,136 0.82 % 5,748,991 5,623 0.10 % Short-term borrowings 60,312 1,538 2.55 % 19,958 49 0.25 % Repurchase agreements 41 — — 41 — — Long-term borrowings 39,202 1,004 2.56 % — — — Subordinated debentures 13,401 658 4.91 % 13,401 449 3.35 % Senior debt 98,865 5,118 5.18 % 100,283 5,118 5.10 % Total deposits and liabilities 6,479,916 59,454 0.92 % 5,882,674 11,239 0.19 % Other liabilities 54,374 100,627 Total liabilities 6,534,290 5,983,301 Shareholders' equity 673,242 616,809 $ 7,207,532 $ 6,600,110 Net interest income on tax equivalent basis** $ 248,917 $ 214,078 Tax equivalent adjustment 76 106 Net interest income $ 248,841 $ 213,972 Net interest margin ** 3.55 % 3.35 % * Includes commercial loans, at fair value. All periods include non-accrual loans. ** Full taxable equivalent basis, using a statutory Federal tax rate of 21% for 2022 and 2021. NOTE: In the table above, the 2021 interest on loans reflects $4.6 million of interest and fees which were earned on a short-term line of credit to another institution to initially fund PPP loans, which did not materially increase average loans or assets and which are not expected to recur. Interest on loans for 2022 and 2021 includes $514,000 and $5.8 million, respectively, of interest and fees on PPP loans. Allowance for credit losses Year ended December 31, December 31, 2022 (unaudited) 2021 (Dollars in thousands) Balance in the allowance for credit losses at beginning of period (1) $ 17,806 $ 16,082 Loans charged-off: SBA non-real estate 885 1,138 SBA commercial mortgage — 417 Direct lease financing 576 412 SBLOC — 15 Consumer - home equity — 10 Consumer - other — 14 Total 1,461 2,006 Recoveries: SBA non-real estate 140 51 SBA commercial mortgage — 9 Direct lease financing 124 58 Consumer - home equity — 1,099 Other loans 24 — Total 288 1,217 Net charge-offs 1,173 789 Provision for credit losses, excluding commitment provision 5,741 2,513 Balance in allowance for credit losses at end of period $ 22,374 $ 17,806 Net charge-offs/average loans 0.03 % 0.03 % Net charge-offs/average assets 0.02 % 0.01 % (1) Excludes activity from discontinued operations. Loan portfolio December 31, September 30, June 30, December 31, 2022 (unaudited) 2022 (unaudited) 2022 (unaudited) 2021 (Dollars in thousands) SBL non-real estate $ 108,954 $ 116,080 $ 112,854 $ 147,722 SBL commercial mortgage 474,496 429,865 425,219 361,171 SBL construction 30,864 26,841 27,042 27,199 Small business loans 614,314 572,786 565,115 536,092 Direct lease financing 632,160 599,796 583,086 531,012 SBLOC / IBLOC * 2,332,469 2,369,106 2,274,256 1,929,581 Advisor financing ** 172,468 168,559 155,235 115,770 Real estate bridge loans 1,669,031 1,488,119 1,106,875 621,702 Other loans *** 61,679 64,980 63,514 5,014 5,482,121 5,263,346 4,748,081 3,739,171 Unamortized loan fees and costs 4,732 4,029 6,616 8,053 Total loans, including unamortized fees and costs $ 5,486,853 $ 5,267,375 $ 4,754,697 $ 3,747,224 Small business portfolio December 31, September 30, June 30, December 31, 2022 (unaudited) 2022 (unaudited) 2022 (unaudited) 2021 (Dollars in thousands) SBL, including unamortized fees and costs $ 621,641 $ 579,156 $ 571,559 $ 541,437 SBL, included in loans, at fair value 146,717 159,914 168,579 199,585 Total small business loans **** $ 768,358 $ 739,070 $ 740,138 $ 741,022 * Securities Backed Lines of Credit, or SBLOC, are collateralized by marketable securities, while Insurance Backed Lines of Credit, or IBLOC, are collateralized by the cash surrender value of eligible life insurance policies. ** In 2020, we began originating loans to investment advisors for purposes of debt refinance, acquisition of another firm or internal succession. Maximum loan amounts are subject to 70% of the estimated 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. *** Includes demand deposit overdrafts reclassified as loan balances totaling $2.6 million and $322,000 at December 31, 2022 and December 31, 2021, respectively. Estimated overdraft charge-offs and recoveries are reflected in the allowance for credit losses and have been immaterial. ****The small business loans held at fair value are comprised of the government guaranteed portion of certain SBA loans at the dates indicated. Small business loans as of December 31, 2022 Loan principal (Dollars in millions) U.S. government guaranteed portion of SBA loans (a) $ 375 Paycheck Protection Program loans (PPP) (a) 5 Commercial mortgage SBA (b) 248 Construction SBA (c) 10 Non-guaranteed portion of U.S. government guaranteed loans (d) 100 Non-SBA small business loans 23 Total principal $ 761 Unamortized fees and costs 7 Total small business loans $ 768 (a) This is the portion of SBA 7a loans (7a) and PPP loans that 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 $10 million in Construction SBA loans, $9 million are 504 first mortgages with an origination date LTV of 50-60% and $1 million are SBA interim loans with an approved SBA post-construction full takeout/payoff. (d) The $100 million represents the unguaranteed portion of 7a loans which are generally 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. Small business loans by type as of December 31, 2022 (Excludes government guaranteed portion of SBA 7a loans and PPP loans) SBL commercial mortgage* SBL construction* SBL non-real estate Total % Total (Dollars in millions) Hotels and motels $ 79 $ — $ — $ 79 21% Car washes 18 1 — 19 5% Full-service restaurants 12 3 2 17 4% Lessors of nonresidential buildings 16 — — 16 4% Child day care services 14 — 1 15 4% Outpatient mental health and substance abuse centers 15 — — 15 4% Funeral homes and funeral services 10 — — �� 10 3% Assisted living facilities for the elderly 10 — — 10 3% Offices of lawyers 9 — — 9 2% Packaged frozen food merchant wholesalers 9 — — 9 2% Gasoline stations with convenience stores 8 — — 8 2% Lessors of other real estate property 8 — — 8 2% Fitness and recreational sports centers 6 — 2 8 2% General warehousing and storage 7 — — 7 2% Plumbing, heating, and air-conditioning contractors 6 — 1 7 2% Limited-service restaurants 1 2 2 5 1% Other miscellaneous durable goods merchant wholesalers 5 — — 5 1% Lessors of residential buildings and dwellings 5 — — 5 1% Other spectator sports 5 — — 5 1% All other amusement and recreation industries 4 — — 4 1% Gas stations 4 — — 4 1% Offices of dentists 3 1 — 4 1% Other warehousing and storage 3 — — 3 1% Vocational rehabilitation services 3 — — 3 1% Other** 74 3 29 106 29% Total $ 334 $ 10 $ 37 $ 381 100% * Of the SBL commercial mortgage and SBL construction loans, $85 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 $3 million are spread over a hundred different classifications such as Commercial Printing, Pet and Pet Supplies Stores, Securities Brokerage, etc. State diversification as of December 31, 2022 (Excludes government guaranteed portion of SBA 7a loans and PPP loans) SBL commercial mortgage* SBL construction* SBL non-real estate Total % Total (Dollars in millions) Florida $ 65 $ — $ 4 $ 69 18% California 61 3 3 67 18% North Carolina 40 7 2 49 13% New York 25 — 5 30 8% Pennsylvania 18 — 1 19 5% Georgia 15 — 2 17 4% Illinois 15 — 1 16 4% New Jersey 12 — 3 15 4% Texas 12 — 3 15 4% Tennessee 14 — — 14 4% Colorado 12 — 1 13 3% Ohio 11 — 1 12 3% Connecticut 10 — 1 11 3% Virginia 8 — 1 9 2% Michigan 4 — 1 5 1% Other States 12 — 8 20 6% Total $ 334 $ 10 $ 37 $ 381 100% * Of the SBL commercial mortgage and SBL construction loans, $85 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 December 31, 2022 Type State SBL commercial mortgage (Dollars in millions) Mental health and substance abuse center FL $ 10 Hotel FL 9 Lawyer's office CA 8 General warehousing and storage PA 7 Hotel NC 7 Hotel FL 6 Hotel NY 6 Hotel NC 5 Mental health and substance abuse center CT 5 Assisted living facility FL 5 Total $ 68 Commercial real estate loans, excluding SBA loans, are as follows including LTV at origination: Type as of December 31, 2022 Type # Loans Balance Weighted average origination date LTV Weighted average interest rate (Dollars in millions) Real estate bridge loans (multi-family apartment loans recorded at amortized cost)* 130 $ 1,669 72 % 7.69 % Non-SBA commercial real estate loans, at fair value: Multi-family (apartment bridge loans)* 22 $ 354 76 % 7.52 % Hospitality (hotels and lodging) 4 36 65 % 8.00 % Retail 3 42 72 % 7.30 % Other 3 11 73 % 5.20 % 32 443 74 % 7.48 % Fair value adjustment (1 ) Total non-SBA commercial real estate loans, at fair value 442 Total commercial real estate loans $ 2,111 73 % 7.65 % *In the third quarter of 2021, we resumed the origination of multi-family apartment loans. These are similar to the multi-family apartment loans carried at fair value, but at origination are intended to be held on the balance sheet, so are not accounted for at fair value. State diversification as of December 31, 2022 15 largest loans as of December 31, 2022 State Balance Origination date LTV State Balance Origination date LTV (Dollars in millions) (Dollars in millions) Texas $ 760 74% Texas $ 42 75% Georgia 232 71% Texas 39 75% Florida 217 71% Texas 39 79% Ohio 95 69% Texas 39 72% Tennessee 98 72% Tennessee 37 72% Alabama 62 72% Texas 37 80% Michigan 72 70% Michigan 36 62% Other States each <$55 million 575 74% Florida 32 72% Total $ 2,111 74% Texas 32 67% Michigan 31 79% Tennessee 30 71% Missouri 30 72% Texas 30 62% Ohio 29 74% Texas 29 77% 15 Largest loans $ 512 73% Institutional banking loans outstanding at December 31, 2022 Type Principal % of total (Dollars in millions) Securities backed lines of credit (SBLOC) $ 1,209 48% Insurance backed lines of credit (IBLOC) 1,124 45% Advisor financing 172 7% Total $ 2,505 100% 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 December 31, 2022 Principal amount % Principal to collateral (Dollars in millions) $ 20 55% 18 41% 13 32% 9 34% 9 66% 9 45% 9 62% 8 73% 7 38% 6 39% Total and weighted average $ 108 48% 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, nine insurance companies have been approved and, as of December 31, 2022, all were rated A- or better by AM BEST. Direct lease financing* by type as of December 31, 2022 Principal balance % Total (Dollars in millions) Construction $ 115 18% Government agencies and public institutions** 99 16% Waste management and remediation services 69 11% Real estate and rental and leasing 59 9% Retail trade 49 8% Transportation and warehousing 33 5% Health care and social assistance 32 5% Finance and insurance 31 5% Professional, scientific, and technical services 19 3% Manufacturing 18 3% Wholesale trade 18 3% Educational services 8 1% Mining, quarrying, and gas extraction 4 1% Other 78 12% Total $ 632 100% * Of the total $632 million of direct lease financing, $555 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 December 31, 2022 State Principal balance % Total (Dollars in millions) Florida $ 88 14% California 68 11% Utah 65 10% New Jersey 42 7% Pennsylvania 41 6% New York 29 5% North Carolina 29 5% Texas 28 4% Maryland 27 4% Connecticut 23 4% Washington 16 3% Idaho 15 2% Georgia 14 2% Illinois 12 2% Ohio 11 2% Other States 124 19% Total $ 632 100% Capital ratios Tier 1 capital Tier 1 capital Total capital Common equity to average to risk-weighted to risk-weighted tier 1 to risk assets ratio assets ratio assets ratio weighted assets As of December 31, 2022 The Bancorp, Inc. 9.63% 13.40% 13.87% 13.40% The Bancorp Bank, National Association 10.73% 14.95% 15.42% 14.95% "Well capitalized" institution (under federal regulations-Basel III) 5.00% 8.00% 10.00% 6.50% As of December 31, 2021 The Bancorp, Inc. 10.40% 14.72% 15.13% 14.72% The Bancorp Bank, National Association 10.98% 15.48% 15.88% 15.48% "Well capitalized" institution (under federal regulations-Basel III) 5.00% 8.00% 10.00% 6.50% Three months ended Year ended December 31, December 31, 2022 2021 2022 2021 Selected operating ratios Return on average assets (1) 2.13% 1.73% 1.81% 1.68% Return on average equity (1) 23.52% 16.60% 19.34% 17.94% Net interest margin 4.21% 3.51% 3.55% 3.35% (1) Annualized Book value per share table December 31, September 30, June 30, December 31, 2022 2022 2022 2021 Book value per share $ 12.46 $ 11.81 $ 11.55 $ 11.37 Loan quality table December 31, September 30, June 30, December 31, 2022 2022 2022 2021 (Dollars in thousands) Nonperforming loans to total loans 0.33 % 0.16 % 0.18 % 0.10 % Nonperforming assets to total assets 0.50 % 0.35 % 0.39 % 0.33 % Allowance for credit losses to total loans 0.41 % 0.37 % 0.40 % 0.48 % Nonaccrual loans (1) $ 10,356 $ 3,860 $ 3,698 $ 3,161 Loans 90 days past due still accruing interest (2) 7,775 4,415 4,848 461 Other real estate owned 21,210 18,873 18,873 18,873 Total nonperforming assets $ 39,341 $ 27,148 $ 27,419 $ 22,495 (1) Of the $10.4 million of nonaccrual loans at December 31, 2022, $3.1 million were guaranteed under various SBA loan programs, with the majority of such loans classified as nonaccrual in the fourth quarter of 2022. The majority of the balance of the increase in that quarter resulted from $3.1 million representing 78 vehicles from one leasing relationship which were marked to their estimated market value. (2) The majority of the fourth quarter increase resulted from $2.0 million for an IBLOC loan which is in process of pay-off from the cash value of life insurance, and $878,000 from an SBLOC loan which was brought current in January 2023. To the extent that IBLOC loans become non-performing or are not repaid by borrowers, the Bank can utilize the related cash value of life insurance collateral for loan repayment. Similarly, marketable securities collateralizing SBLOC loans may be sold to repay those loans. Gross dollar volume (GDV) (1) Three months ended December 31, September 30, June 30, December 31, 2022 2022 2022 2021 (Dollars in thousands) Prepaid and debit card GDV $ 28,066,895 $ 28,119,428 $ 28,394,897 $ 24,821,576 (1) Gross dollar volume represents the total dollar amount spent on prepaid and debit cards issued by The Bancorp Bank, N.A. Business line quarterly summary Quarter ended December 31, 2022 (Dollars in millions) Balances % Growth Major business lines Average approximate rates * Balances ** Year over year Linked quarter annualized Loans Institutional banking *** 5.3% $ 2,505 22% (5)% Small business lending**** 6.1% 768 10% 17% Leasing 6.3% 632 19% 22% Commercial real estate (non-SBA loans, at fair value) 7.3% 443 nm nm Real estate bridge loans (recorded at book value) 7.4% 1,669 nm nm Weighted average yield 6.2% $ 6,017 Non-interest income % Growth Deposits: Fintech solutions group Current quarter Year over year Prepaid and debit card issuance, and other payments 1.8% $ 5,685 15% nm $ 21.8 10% * Average rates are for the quarter ended December 31, 2022. ** Loan and deposit categories are respectively based on period-end and average quarterly balances. *** Institutional Banking loans are comprised of security backed lines of credit (SBLOC), collateralized by marketable securities, insurance backed lines of credit (IBLOC), collateralized by the cash surrender value of eligible life insurance policies, and investment advisor financing. **** Small Business Lending is substantially comprised of SBA loans. Loan growth percentages exclude short-term PPP loans. View source version on businesswire.com: https://www.businesswire.com/news/home/20230124005844/en/Contacts The Bancorp, Inc. Andres Viroslav Director, Investor Relations 215-861-7990 andres.viroslav@thebancorp.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
The Bancorp, Inc. Reports Fourth Quarter and Full Year 2022 Financial Results and Updates 2023 Guidance By: The Bancorp, Inc. via Business Wire January 26, 2023 at 16:05 PM EST The Bancorp, Inc. ("The Bancorp" or “we”) (NASDAQ: TBBK), a financial holding company, today reported financial results for the fourth quarter of 2022. Highlights The Bancorp reported net income of $40.2 million, or $0.71 per diluted share, for the quarter ended December 31, 2022, compared to net income of $27.0 million, or $0.46 per diluted share, for the quarter ended December 31, 2021, or a 54% increase in income per diluted share. Return on assets and equity for the quarter ended December 31, 2022 amounted to 2.1% and 24%, respectively, compared to 1.7% and 17%, respectively, for the quarter ended December 31, 2021 (all percentages “annualized”). Net interest income increased 47% to $76.8 million for the quarter ended December 31, 2022, compared to $52.2 million for the quarter ended December 31, 2021. Net interest margin amounted to 4.21% for the quarter ended December 31, 2022, compared to 3.51% for the quarter ended December 31, 2021, and 3.69% for the quarter ended September 30, 2022. Excluding commercial loans, at fair value, which were originally generated for sale, total loans increased to $5.49 billion at December 31, 2022, compared to $5.27 billion at September 30, 2022 and $3.75 billion at December 31, 2021. Those increases reflected growth of 4% quarter over quarter and 45% year over year. Those percentage increases exclude the impact of $50.4 million of December 31, 2022 balances previously included in discontinued assets which were reclassified to loans held for investment in the first quarter of 2022. Gross dollar volume (“GDV”), representing the total amounts spent on prepaid and debit cards, increased $3.25 billion, or 13%, to $28.07 billion for the quarter ended December 31, 2022 compared to the quarter ended December 31, 2021. Total prepaid, debit card, ACH and other payment fees increased 10% to $21.8 million for fourth quarter 2022 compared to the fourth quarter of 2021. SBLOC (securities backed lines of credit), IBLOC (insurance backed lines of credit) and investment advisor financing loans collectively increased 22% year over year and decreased 1% quarter over quarter to $2.50 billion at December 31, 2022. Small Business Loans, including those held at fair value, grew 10% year over year to $763.8 million at December 31, 2022, and 4% quarter over quarter. That growth is exclusive of PPP loan balances which amounted to $4.5 million and $44.8 million, respectively, at December 31, 2022 and December 31, 2021. Direct lease financing balances increased 19% year over year to $632.2 million at December 31, 2022, and 5% quarter over quarter. We resumed non-SBA commercial real estate bridge lending in the third quarter of 2021. At December 31, 2022, the balance of such real estate bridge loans, consisting of apartment buildings, was $1.67 billion compared to $1.49 billion at September 30, 2022, reflecting quarter over quarter growth of 12%. At December 31, 2021, these loans totaled $621.7 million. The average interest rate on $6.80 billion of average deposits and interest-bearing liabilities during the fourth quarter of 2022 was 1.77%. Average deposits of $6.62 billion for the fourth quarter of 2022, reflected an increase of 25% from the $5.31 billion of average deposits for the quarter ended December 31, 2021. As of December 31, 2022, tier one capital to assets (leverage), tier one capital to risk-weighted assets, total capital to risk-weighted assets and common equity-tier 1 to risk-weighted assets ratios were 9.63%, 13.40%, 13.87% and 13.40%, respectively, compared to well-capitalized minimums of 5%, 8%, 10% and 6.5%, respectively. The Bancorp and its wholly owned subsidiary, The Bancorp Bank, National Association, each remain well capitalized under banking regulations. Book value per common share at December 31, 2022 was $12.46 per share compared to $11.37 per share at December 31, 2021, an increase of 10%. Increases resulting from retained earnings were partially offset by reductions in the market value of securities available for sale, which are recognized through equity. The Bancorp repurchased 553,003 shares of its common stock at an average cost of $27.12 per share during the quarter ended December 31, 2022. “We finished 2022 with significant improvements in profitability, NIM and GDV growth, "said CEO and President Damian Kozlowski. "Our team continues to be focused on further improving our arguably best fintech ecosystem in banking, maintaining a lower risk balance sheet than peers, continuing our rigorous risk management and increasing profitability. We believe 2023 will be another substantial move forward on all fronts and we confirm our guidance of $3.20 a share, an improvement of approximately 40% over 2022 EPS. We expect to increase our share repurchases to $25 million per quarter, or $100 million in 2023, from $15 million a quarter, or $60 million, in 2022.” Conference Call Webcast You may access the LIVE webcast of The Bancorp's Quarterly Earnings Conference Call at 8:00 AM ET Friday, January 27, 2023 by clicking on the webcast link on The Bancorp's homepage at www.thebancorp.com. Or you may dial 1.888.396.8049, access code 92735961. You may listen to the replay of the webcast following the live call on The Bancorp's investor relations website or telephonically until Friday, February 3, 2023 by dialing 1.877.674.7070, access code 735961#. About The Bancorp The Bancorp, Inc. (NASDAQ: TBBK), headquartered in Wilmington, Delaware, through its subsidiary, The Bancorp Bank, National Association, (or “The Bancorp Bank, N. A.”) 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 “intend,” “may,” “believe,” “will,” “expect,” “look,” “anticipate,” “plan,” “estimate,” “continue,” or similar words , and are based on current expectations about important economic, political, and technological factors, among others, and are subject to risks and uncertainties, which could cause the actual results, events or achievements to differ materially from those set forth in or implied by the forward-looking statements and related assumptions. For further discussion of the risks and uncertainties to which these forward-looking statements may be subject, see The Bancorp’s filings with the Securities and Exchange Commission, including the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of those filings. The forward-looking statements speak only as of the date of this press release. The Bancorp does not undertake to publicly revise or update forward-looking statements in this press release to reflect events or circumstances that arise after the date of this press release, except as may be required under applicable law. The Bancorp, Inc. Financial highlights (unaudited) Three months ended Year ended December 31, December 31, Consolidated condensed income statements 2022 2021 2022 2021 (Dollars in thousands, except per share and share data) Net interest income $ 76,760 $ 52,157 $ 248,841 $ 210,876 Provision for credit losses 2,777 1,626 7,108 3,110 Non-interest income ACH, card and other payment processing fees 2,383 1,921 8,935 7,526 Prepaid, debit card and related fees 19,371 17,776 77,236 74,654 Net realized and unrealized gains on commercial loans, at fair value 2,269 6,004 13,531 14,885 Leasing related income 1,256 1,757 4,822 6,457 Other non-interest income 461 768 1,159 1,227 Total non-interest income 25,740 28,226 105,683 104,749 Non-interest expense Salaries and employee benefits 27,520 28,159 105,368 105,998 Data processing expense 1,245 1,183 4,972 4,664 Legal expense 703 1,499 3,878 6,848 Legal settlement — — 1,152 — Civil money penalty — — 1,750 — FDIC insurance 944 351 3,270 5,586 Software 4,181 4,224 16,211 15,659 Other non-interest expense 8,882 7,784 32,901 29,595 Total non-interest expense 43,475 43,200 169,502 168,350 Income from continuing operations before income taxes 56,248 35,557 177,914 144,165 Income tax expense 16,007 8,529 47,701 33,724 Net income from continuing operations 40,241 27,028 130,213 110,441 Discontinued operations (Loss) income from discontinued operations before income taxes — (36 ) — 288 Income tax expense — — — 76 Net (loss) income from discontinued operations, net of tax — (36 ) — 212 Net income $ 40,241 $ 26,992 $ 130,213 $ 110,653 Net income per share from continuing operations - basic $ 0.72 $ 0.47 $ 2.30 $ 1.93 Net income per share from discontinued operations - basic $ — $ — $ — $ — Net income per share - basic $ 0.72 $ 0.47 $ 2.30 $ 1.93 Net income per share from continuing operations - diluted $ 0.71 $ 0.46 $ 2.27 $ 1.88 Net income per share from discontinued operations - diluted $ — $ — $ — $ — Net income per share - diluted $ 0.71 $ 0.46 $ 2.27 $ 1.88 Weighted average shares - basic 55,885,015 56,966,661 56,556,303 57,190,311 Weighted average shares - diluted 56,588,011 58,369,204 57,268,946 58,830,437 Condensed consolidated balance sheets December 31, September 30, June 30, December 31, 2022 (unaudited) 2022 (unaudited) 2022 (unaudited) 2021 (Dollars in thousands, except per share and share data) Assets: Cash and cash equivalents Cash and due from banks $ 24,063 $ 22,537 $ 12,873 $ 5,382 Interest earning deposits at Federal Reserve Bank 864,126 700,175 329,992 596,402 Total cash and cash equivalents 888,189 722,712 342,865 601,784 Investment securities, available-for-sale, at fair value 766,016 790,594 826,616 953,709 Commercial loans, at fair value 589,143 818,040 995,493 1,388,416 Loans, net of deferred fees and costs 5,486,853 5,267,375 4,754,697 3,747,224 Allowance for credit losses (22,374 ) (19,689 ) (19,087 ) (17,806 ) Loans, net 5,464,479 5,247,686 4,735,610 3,729,418 Federal Home Loan Bank, Atlantic Central Bankers Bank, and Federal Reserve Bank stock 12,629 12,629 1,643 1,663 Premises and equipment, net 18,401 18,443 16,693 16,156 Accrued interest receivable 32,005 25,506 19,264 17,871 Intangible assets, net 2,049 2,149 2,248 2,447 Other real estate owned 21,210 18,873 18,873 18,873 Deferred tax asset, net 19,703 27,241 23,344 12,667 Assets held-for-sale from discontinued operations — — — 3,268 Other assets 89,176 93,201 137,086 96,967 Total assets $ 7,903,000 $ 7,777,074 $ 7,119,735 $ 6,843,239 Liabilities: Deposits Demand and interest checking $ 6,559,617 $ 5,934,591 $ 5,394,562 $ 5,561,365 Savings and money market 140,496 575,381 486,189 415,546 Time deposits, $100,000 and over 330,000 401,331 — — Total deposits 7,030,113 6,911,303 5,880,751 5,976,911 Securities sold under agreements to repurchase 42 42 42 42 Short-term borrowings — — 385,000 — Senior debt 99,050 98,958 98,866 98,682 Subordinated debenture 13,401 13,401 13,401 13,401 Other long-term borrowings 10,028 38,928 39,125 39,521 Other liabilities 56,335 50,704 46,014 62,228 Total liabilities $ 7,208,969 $ 7,113,336 $ 6,463,199 $ 6,190,785 Shareholders' equity: Common stock - authorized, 75,000,000 shares of $1.00 par value; 55,689,627 and 57,370,563 shares issued and outstanding at December 31, 2022 and 2021, respectively 55,690 56,202 56,865 57,371 Additional paid-in capital 299,279 311,569 323,774 349,686 Retained earnings 369,319 329,078 298,474 239,106 Accumulated other comprehensive (loss) income (30,257 ) (33,111 ) (22,577 ) 6,291 Total shareholders' equity 694,031 663,738 656,536 652,454 Total liabilities and shareholders' equity $ 7,903,000 $ 7,777,074 $ 7,119,735 $ 6,843,239 Average balance sheet and net interest income Three months ended December 31, 2022 Three months ended December 31, 2021 (Dollars in thousands; unaudited) Average Average Average Average Assets: Balance Interest Rate Balance Interest Rate Interest earning assets: Loans, net of deferred fees and costs* $ 6,083,587 $ 94,477 6.21 % $ 4,766,271 $ 48,792 4.09 % Leases-bank qualified** 2,952 50 6.78 % 4,465 76 6.81 % Investment securities-taxable 782,046 8,483 4.34 % 954,172 5,770 2.42 % Investment securities-nontaxable** 3,559 32 3.60 % 3,558 31 3.49 % Interest earning deposits at Federal Reserve Bank 424,255 3,886 3.66 % 208,120 65 0.12 % Net interest earning assets 7,296,399 106,928 5.86 % 5,936,586 54,734 3.69 % Allowance for credit losses (20,227 ) (17,108 ) Assets held-for-sale from discontinued operations — — — 83,821 708 3.38 % Other assets 223,692 189,760 $ 7,499,864 $ 6,193,059 Liabilities and Shareholders' Equity: Deposits: Demand and interest checking $ 5,891,947 $ 21,350 1.45 % $ 4,931,891 $ 1,015 0.08 % Savings and money market 474,302 4,332 3.65 % 373,381 114 0.12 % Time deposits 257,231 2,193 3.41 % — — — Total deposits 6,623,480 27,875 1.68 % 5,305,272 1,129 0.09 % Short-term borrowings 26,847 271 4.04 % 53,315 34 0.26 % Repurchase agreements 42 — — 41 — — Long-term borrowings 38,951 498 5.11 % — — — Subordinated debentures 13,401 226 6.75 % 13,401 112 3.34 % Senior debt 99,005 1,280 5.17 % 100,419 1,280 5.10 % Total deposits and liabilities 6,801,726 30,150 1.77 % 5,472,448 2,555 0.19 % Other liabilities 19,254 75,395 Total liabilities 6,820,980 5,547,843 Shareholders' equity 678,884 645,216 $ 7,499,864 $ 6,193,059 Net interest income on tax equivalent basis** $ 76,778 $ 52,887 Tax equivalent adjustment 18 22 Net interest income $ 76,760 $ 52,865 Net interest margin ** 4.21 % 3.51 % * Includes commercial loans, at fair value. All periods include non-accrual loans. ** Full taxable equivalent basis, using a statutory Federal tax rate of 21% for 2022 and 2021. NOTE: In the table above, interest on loans for 2022 and 2021 includes $12,000 and $991,000, respectively, of interest and fees on PPP loans. Average balance sheet and net interest income Year ended December 31, 2022 Year ended December 31, 2021 (Dollars in thousands; unaudited) Average Average Average Average Assets: Balance Interest Rate Balance Interest Rate Interest earning assets: Loans, net of deferred fees and costs* $ 5,670,957 $ 275,651 4.86 % $ 4,597,977 $ 192,338 4.18 % Leases-bank qualified** 3,479 235 6.75 % 5,557 377 6.78 % Investment securities-taxable 855,629 25,598 2.99 % 1,059,229 28,661 2.71 % Investment securities-nontaxable** 3,559 125 3.51 % 3,757 130 3.46 % Interest earning deposits at Federal Reserve Bank 479,791 6,762 1.41 % 637,056 715 0.11 % Net interest earning assets 7,013,415 308,371 4.40 % 6,303,576 222,221 3.53 % Allowance for credit losses (19,374 ) (16,469 ) Assets held for sale from discontinued operations — — — 95,527 3,096 3.24 % Other assets 213,491 217,476 $ 7,207,532 $ 6,600,110 Liabilities and Shareholders' Equity: Deposits: Demand and interest checking $ 5,670,818 $ 39,872 0.70 % $ 5,321,283 $ 5,022 0.09 % Savings and money market 510,370 8,524 1.67 % 427,708 601 0.14 % Time deposits 86,907 2,740 3.15 % — — — Total deposits 6,268,095 51,136 0.82 % 5,748,991 5,623 0.10 % Short-term borrowings 60,312 1,538 2.55 % 19,958 49 0.25 % Repurchase agreements 41 — — 41 — — Long-term borrowings 39,202 1,004 2.56 % — — — Subordinated debentures 13,401 658 4.91 % 13,401 449 3.35 % Senior debt 98,865 5,118 5.18 % 100,283 5,118 5.10 % Total deposits and liabilities 6,479,916 59,454 0.92 % 5,882,674 11,239 0.19 % Other liabilities 54,374 100,627 Total liabilities 6,534,290 5,983,301 Shareholders' equity 673,242 616,809 $ 7,207,532 $ 6,600,110 Net interest income on tax equivalent basis** $ 248,917 $ 214,078 Tax equivalent adjustment 76 106 Net interest income $ 248,841 $ 213,972 Net interest margin ** 3.55 % 3.35 % * Includes commercial loans, at fair value. All periods include non-accrual loans. ** Full taxable equivalent basis, using a statutory Federal tax rate of 21% for 2022 and 2021. NOTE: In the table above, the 2021 interest on loans reflects $4.6 million of interest and fees which were earned on a short-term line of credit to another institution to initially fund PPP loans, which did not materially increase average loans or assets and which are not expected to recur. Interest on loans for 2022 and 2021 includes $514,000 and $5.8 million, respectively, of interest and fees on PPP loans. Allowance for credit losses Year ended December 31, December 31, 2022 (unaudited) 2021 (Dollars in thousands) Balance in the allowance for credit losses at beginning of period (1) $ 17,806 $ 16,082 Loans charged-off: SBA non-real estate 885 1,138 SBA commercial mortgage — 417 Direct lease financing 576 412 SBLOC — 15 Consumer - home equity — 10 Consumer - other — 14 Total 1,461 2,006 Recoveries: SBA non-real estate 140 51 SBA commercial mortgage — 9 Direct lease financing 124 58 Consumer - home equity — 1,099 Other loans 24 — Total 288 1,217 Net charge-offs 1,173 789 Provision for credit losses, excluding commitment provision 5,741 2,513 Balance in allowance for credit losses at end of period $ 22,374 $ 17,806 Net charge-offs/average loans 0.03 % 0.03 % Net charge-offs/average assets 0.02 % 0.01 % (1) Excludes activity from discontinued operations. Loan portfolio December 31, September 30, June 30, December 31, 2022 (unaudited) 2022 (unaudited) 2022 (unaudited) 2021 (Dollars in thousands) SBL non-real estate $ 108,954 $ 116,080 $ 112,854 $ 147,722 SBL commercial mortgage 474,496 429,865 425,219 361,171 SBL construction 30,864 26,841 27,042 27,199 Small business loans 614,314 572,786 565,115 536,092 Direct lease financing 632,160 599,796 583,086 531,012 SBLOC / IBLOC * 2,332,469 2,369,106 2,274,256 1,929,581 Advisor financing ** 172,468 168,559 155,235 115,770 Real estate bridge loans 1,669,031 1,488,119 1,106,875 621,702 Other loans *** 61,679 64,980 63,514 5,014 5,482,121 5,263,346 4,748,081 3,739,171 Unamortized loan fees and costs 4,732 4,029 6,616 8,053 Total loans, including unamortized fees and costs $ 5,486,853 $ 5,267,375 $ 4,754,697 $ 3,747,224 Small business portfolio December 31, September 30, June 30, December 31, 2022 (unaudited) 2022 (unaudited) 2022 (unaudited) 2021 (Dollars in thousands) SBL, including unamortized fees and costs $ 621,641 $ 579,156 $ 571,559 $ 541,437 SBL, included in loans, at fair value 146,717 159,914 168,579 199,585 Total small business loans **** $ 768,358 $ 739,070 $ 740,138 $ 741,022 * Securities Backed Lines of Credit, or SBLOC, are collateralized by marketable securities, while Insurance Backed Lines of Credit, or IBLOC, are collateralized by the cash surrender value of eligible life insurance policies. ** In 2020, we began originating loans to investment advisors for purposes of debt refinance, acquisition of another firm or internal succession. Maximum loan amounts are subject to 70% of the estimated 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. *** Includes demand deposit overdrafts reclassified as loan balances totaling $2.6 million and $322,000 at December 31, 2022 and December 31, 2021, respectively. Estimated overdraft charge-offs and recoveries are reflected in the allowance for credit losses and have been immaterial. ****The small business loans held at fair value are comprised of the government guaranteed portion of certain SBA loans at the dates indicated. Small business loans as of December 31, 2022 Loan principal (Dollars in millions) U.S. government guaranteed portion of SBA loans (a) $ 375 Paycheck Protection Program loans (PPP) (a) 5 Commercial mortgage SBA (b) 248 Construction SBA (c) 10 Non-guaranteed portion of U.S. government guaranteed loans (d) 100 Non-SBA small business loans 23 Total principal $ 761 Unamortized fees and costs 7 Total small business loans $ 768 (a) This is the portion of SBA 7a loans (7a) and PPP loans that 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 $10 million in Construction SBA loans, $9 million are 504 first mortgages with an origination date LTV of 50-60% and $1 million are SBA interim loans with an approved SBA post-construction full takeout/payoff. (d) The $100 million represents the unguaranteed portion of 7a loans which are generally 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. Small business loans by type as of December 31, 2022 (Excludes government guaranteed portion of SBA 7a loans and PPP loans) SBL commercial mortgage* SBL construction* SBL non-real estate Total % Total (Dollars in millions) Hotels and motels $ 79 $ — $ — $ 79 21% Car washes 18 1 — 19 5% Full-service restaurants 12 3 2 17 4% Lessors of nonresidential buildings 16 — — 16 4% Child day care services 14 — 1 15 4% Outpatient mental health and substance abuse centers 15 — — 15 4% Funeral homes and funeral services 10 — — �� 10 3% Assisted living facilities for the elderly 10 — — 10 3% Offices of lawyers 9 — — 9 2% Packaged frozen food merchant wholesalers 9 — — 9 2% Gasoline stations with convenience stores 8 — — 8 2% Lessors of other real estate property 8 — — 8 2% Fitness and recreational sports centers 6 — 2 8 2% General warehousing and storage 7 — — 7 2% Plumbing, heating, and air-conditioning contractors 6 — 1 7 2% Limited-service restaurants 1 2 2 5 1% Other miscellaneous durable goods merchant wholesalers 5 — — 5 1% Lessors of residential buildings and dwellings 5 — — 5 1% Other spectator sports 5 — — 5 1% All other amusement and recreation industries 4 — — 4 1% Gas stations 4 — — 4 1% Offices of dentists 3 1 — 4 1% Other warehousing and storage 3 — — 3 1% Vocational rehabilitation services 3 — — 3 1% Other** 74 3 29 106 29% Total $ 334 $ 10 $ 37 $ 381 100% * Of the SBL commercial mortgage and SBL construction loans, $85 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 $3 million are spread over a hundred different classifications such as Commercial Printing, Pet and Pet Supplies Stores, Securities Brokerage, etc. State diversification as of December 31, 2022 (Excludes government guaranteed portion of SBA 7a loans and PPP loans) SBL commercial mortgage* SBL construction* SBL non-real estate Total % Total (Dollars in millions) Florida $ 65 $ — $ 4 $ 69 18% California 61 3 3 67 18% North Carolina 40 7 2 49 13% New York 25 — 5 30 8% Pennsylvania 18 — 1 19 5% Georgia 15 — 2 17 4% Illinois 15 — 1 16 4% New Jersey 12 — 3 15 4% Texas 12 — 3 15 4% Tennessee 14 — — 14 4% Colorado 12 — 1 13 3% Ohio 11 — 1 12 3% Connecticut 10 — 1 11 3% Virginia 8 — 1 9 2% Michigan 4 — 1 5 1% Other States 12 — 8 20 6% Total $ 334 $ 10 $ 37 $ 381 100% * Of the SBL commercial mortgage and SBL construction loans, $85 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 December 31, 2022 Type State SBL commercial mortgage (Dollars in millions) Mental health and substance abuse center FL $ 10 Hotel FL 9 Lawyer's office CA 8 General warehousing and storage PA 7 Hotel NC 7 Hotel FL 6 Hotel NY 6 Hotel NC 5 Mental health and substance abuse center CT 5 Assisted living facility FL 5 Total $ 68 Commercial real estate loans, excluding SBA loans, are as follows including LTV at origination: Type as of December 31, 2022 Type # Loans Balance Weighted average origination date LTV Weighted average interest rate (Dollars in millions) Real estate bridge loans (multi-family apartment loans recorded at amortized cost)* 130 $ 1,669 72 % 7.69 % Non-SBA commercial real estate loans, at fair value: Multi-family (apartment bridge loans)* 22 $ 354 76 % 7.52 % Hospitality (hotels and lodging) 4 36 65 % 8.00 % Retail 3 42 72 % 7.30 % Other 3 11 73 % 5.20 % 32 443 74 % 7.48 % Fair value adjustment (1 ) Total non-SBA commercial real estate loans, at fair value 442 Total commercial real estate loans $ 2,111 73 % 7.65 % *In the third quarter of 2021, we resumed the origination of multi-family apartment loans. These are similar to the multi-family apartment loans carried at fair value, but at origination are intended to be held on the balance sheet, so are not accounted for at fair value. State diversification as of December 31, 2022 15 largest loans as of December 31, 2022 State Balance Origination date LTV State Balance Origination date LTV (Dollars in millions) (Dollars in millions) Texas $ 760 74% Texas $ 42 75% Georgia 232 71% Texas 39 75% Florida 217 71% Texas 39 79% Ohio 95 69% Texas 39 72% Tennessee 98 72% Tennessee 37 72% Alabama 62 72% Texas 37 80% Michigan 72 70% Michigan 36 62% Other States each <$55 million 575 74% Florida 32 72% Total $ 2,111 74% Texas 32 67% Michigan 31 79% Tennessee 30 71% Missouri 30 72% Texas 30 62% Ohio 29 74% Texas 29 77% 15 Largest loans $ 512 73% Institutional banking loans outstanding at December 31, 2022 Type Principal % of total (Dollars in millions) Securities backed lines of credit (SBLOC) $ 1,209 48% Insurance backed lines of credit (IBLOC) 1,124 45% Advisor financing 172 7% Total $ 2,505 100% 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 December 31, 2022 Principal amount % Principal to collateral (Dollars in millions) $ 20 55% 18 41% 13 32% 9 34% 9 66% 9 45% 9 62% 8 73% 7 38% 6 39% Total and weighted average $ 108 48% 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, nine insurance companies have been approved and, as of December 31, 2022, all were rated A- or better by AM BEST. Direct lease financing* by type as of December 31, 2022 Principal balance % Total (Dollars in millions) Construction $ 115 18% Government agencies and public institutions** 99 16% Waste management and remediation services 69 11% Real estate and rental and leasing 59 9% Retail trade 49 8% Transportation and warehousing 33 5% Health care and social assistance 32 5% Finance and insurance 31 5% Professional, scientific, and technical services 19 3% Manufacturing 18 3% Wholesale trade 18 3% Educational services 8 1% Mining, quarrying, and gas extraction 4 1% Other 78 12% Total $ 632 100% * Of the total $632 million of direct lease financing, $555 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 December 31, 2022 State Principal balance % Total (Dollars in millions) Florida $ 88 14% California 68 11% Utah 65 10% New Jersey 42 7% Pennsylvania 41 6% New York 29 5% North Carolina 29 5% Texas 28 4% Maryland 27 4% Connecticut 23 4% Washington 16 3% Idaho 15 2% Georgia 14 2% Illinois 12 2% Ohio 11 2% Other States 124 19% Total $ 632 100% Capital ratios Tier 1 capital Tier 1 capital Total capital Common equity to average to risk-weighted to risk-weighted tier 1 to risk assets ratio assets ratio assets ratio weighted assets As of December 31, 2022 The Bancorp, Inc. 9.63% 13.40% 13.87% 13.40% The Bancorp Bank, National Association 10.73% 14.95% 15.42% 14.95% "Well capitalized" institution (under federal regulations-Basel III) 5.00% 8.00% 10.00% 6.50% As of December 31, 2021 The Bancorp, Inc. 10.40% 14.72% 15.13% 14.72% The Bancorp Bank, National Association 10.98% 15.48% 15.88% 15.48% "Well capitalized" institution (under federal regulations-Basel III) 5.00% 8.00% 10.00% 6.50% Three months ended Year ended December 31, December 31, 2022 2021 2022 2021 Selected operating ratios Return on average assets (1) 2.13% 1.73% 1.81% 1.68% Return on average equity (1) 23.52% 16.60% 19.34% 17.94% Net interest margin 4.21% 3.51% 3.55% 3.35% (1) Annualized Book value per share table December 31, September 30, June 30, December 31, 2022 2022 2022 2021 Book value per share $ 12.46 $ 11.81 $ 11.55 $ 11.37 Loan quality table December 31, September 30, June 30, December 31, 2022 2022 2022 2021 (Dollars in thousands) Nonperforming loans to total loans 0.33 % 0.16 % 0.18 % 0.10 % Nonperforming assets to total assets 0.50 % 0.35 % 0.39 % 0.33 % Allowance for credit losses to total loans 0.41 % 0.37 % 0.40 % 0.48 % Nonaccrual loans (1) $ 10,356 $ 3,860 $ 3,698 $ 3,161 Loans 90 days past due still accruing interest (2) 7,775 4,415 4,848 461 Other real estate owned 21,210 18,873 18,873 18,873 Total nonperforming assets $ 39,341 $ 27,148 $ 27,419 $ 22,495 (1) Of the $10.4 million of nonaccrual loans at December 31, 2022, $3.1 million were guaranteed under various SBA loan programs, with the majority of such loans classified as nonaccrual in the fourth quarter of 2022. The majority of the balance of the increase in that quarter resulted from $3.1 million representing 78 vehicles from one leasing relationship which were marked to their estimated market value. (2) The majority of the fourth quarter increase resulted from $2.0 million for an IBLOC loan which is in process of pay-off from the cash value of life insurance, and $878,000 from an SBLOC loan which was brought current in January 2023. To the extent that IBLOC loans become non-performing or are not repaid by borrowers, the Bank can utilize the related cash value of life insurance collateral for loan repayment. Similarly, marketable securities collateralizing SBLOC loans may be sold to repay those loans. Gross dollar volume (GDV) (1) Three months ended December 31, September 30, June 30, December 31, 2022 2022 2022 2021 (Dollars in thousands) Prepaid and debit card GDV $ 28,066,895 $ 28,119,428 $ 28,394,897 $ 24,821,576 (1) Gross dollar volume represents the total dollar amount spent on prepaid and debit cards issued by The Bancorp Bank, N.A. Business line quarterly summary Quarter ended December 31, 2022 (Dollars in millions) Balances % Growth Major business lines Average approximate rates * Balances ** Year over year Linked quarter annualized Loans Institutional banking *** 5.3% $ 2,505 22% (5)% Small business lending**** 6.1% 768 10% 17% Leasing 6.3% 632 19% 22% Commercial real estate (non-SBA loans, at fair value) 7.3% 443 nm nm Real estate bridge loans (recorded at book value) 7.4% 1,669 nm nm Weighted average yield 6.2% $ 6,017 Non-interest income % Growth Deposits: Fintech solutions group Current quarter Year over year Prepaid and debit card issuance, and other payments 1.8% $ 5,685 15% nm $ 21.8 10% * Average rates are for the quarter ended December 31, 2022. ** Loan and deposit categories are respectively based on period-end and average quarterly balances. *** Institutional Banking loans are comprised of security backed lines of credit (SBLOC), collateralized by marketable securities, insurance backed lines of credit (IBLOC), collateralized by the cash surrender value of eligible life insurance policies, and investment advisor financing. **** Small Business Lending is substantially comprised of SBA loans. Loan growth percentages exclude short-term PPP loans. View source version on businesswire.com: https://www.businesswire.com/news/home/20230124005844/en/Contacts The Bancorp, Inc. Andres Viroslav Director, Investor Relations 215-861-7990 andres.viroslav@thebancorp.com
The Bancorp, Inc. ("The Bancorp" or “we”) (NASDAQ: TBBK), a financial holding company, today reported financial results for the fourth quarter of 2022. Highlights The Bancorp reported net income of $40.2 million, or $0.71 per diluted share, for the quarter ended December 31, 2022, compared to net income of $27.0 million, or $0.46 per diluted share, for the quarter ended December 31, 2021, or a 54% increase in income per diluted share. Return on assets and equity for the quarter ended December 31, 2022 amounted to 2.1% and 24%, respectively, compared to 1.7% and 17%, respectively, for the quarter ended December 31, 2021 (all percentages “annualized”). Net interest income increased 47% to $76.8 million for the quarter ended December 31, 2022, compared to $52.2 million for the quarter ended December 31, 2021. Net interest margin amounted to 4.21% for the quarter ended December 31, 2022, compared to 3.51% for the quarter ended December 31, 2021, and 3.69% for the quarter ended September 30, 2022. Excluding commercial loans, at fair value, which were originally generated for sale, total loans increased to $5.49 billion at December 31, 2022, compared to $5.27 billion at September 30, 2022 and $3.75 billion at December 31, 2021. Those increases reflected growth of 4% quarter over quarter and 45% year over year. Those percentage increases exclude the impact of $50.4 million of December 31, 2022 balances previously included in discontinued assets which were reclassified to loans held for investment in the first quarter of 2022. Gross dollar volume (“GDV”), representing the total amounts spent on prepaid and debit cards, increased $3.25 billion, or 13%, to $28.07 billion for the quarter ended December 31, 2022 compared to the quarter ended December 31, 2021. Total prepaid, debit card, ACH and other payment fees increased 10% to $21.8 million for fourth quarter 2022 compared to the fourth quarter of 2021. SBLOC (securities backed lines of credit), IBLOC (insurance backed lines of credit) and investment advisor financing loans collectively increased 22% year over year and decreased 1% quarter over quarter to $2.50 billion at December 31, 2022. Small Business Loans, including those held at fair value, grew 10% year over year to $763.8 million at December 31, 2022, and 4% quarter over quarter. That growth is exclusive of PPP loan balances which amounted to $4.5 million and $44.8 million, respectively, at December 31, 2022 and December 31, 2021. Direct lease financing balances increased 19% year over year to $632.2 million at December 31, 2022, and 5% quarter over quarter. We resumed non-SBA commercial real estate bridge lending in the third quarter of 2021. At December 31, 2022, the balance of such real estate bridge loans, consisting of apartment buildings, was $1.67 billion compared to $1.49 billion at September 30, 2022, reflecting quarter over quarter growth of 12%. At December 31, 2021, these loans totaled $621.7 million. The average interest rate on $6.80 billion of average deposits and interest-bearing liabilities during the fourth quarter of 2022 was 1.77%. Average deposits of $6.62 billion for the fourth quarter of 2022, reflected an increase of 25% from the $5.31 billion of average deposits for the quarter ended December 31, 2021. As of December 31, 2022, tier one capital to assets (leverage), tier one capital to risk-weighted assets, total capital to risk-weighted assets and common equity-tier 1 to risk-weighted assets ratios were 9.63%, 13.40%, 13.87% and 13.40%, respectively, compared to well-capitalized minimums of 5%, 8%, 10% and 6.5%, respectively. The Bancorp and its wholly owned subsidiary, The Bancorp Bank, National Association, each remain well capitalized under banking regulations. Book value per common share at December 31, 2022 was $12.46 per share compared to $11.37 per share at December 31, 2021, an increase of 10%. Increases resulting from retained earnings were partially offset by reductions in the market value of securities available for sale, which are recognized through equity. The Bancorp repurchased 553,003 shares of its common stock at an average cost of $27.12 per share during the quarter ended December 31, 2022. “We finished 2022 with significant improvements in profitability, NIM and GDV growth, "said CEO and President Damian Kozlowski. "Our team continues to be focused on further improving our arguably best fintech ecosystem in banking, maintaining a lower risk balance sheet than peers, continuing our rigorous risk management and increasing profitability. We believe 2023 will be another substantial move forward on all fronts and we confirm our guidance of $3.20 a share, an improvement of approximately 40% over 2022 EPS. We expect to increase our share repurchases to $25 million per quarter, or $100 million in 2023, from $15 million a quarter, or $60 million, in 2022.” Conference Call Webcast You may access the LIVE webcast of The Bancorp's Quarterly Earnings Conference Call at 8:00 AM ET Friday, January 27, 2023 by clicking on the webcast link on The Bancorp's homepage at www.thebancorp.com. Or you may dial 1.888.396.8049, access code 92735961. You may listen to the replay of the webcast following the live call on The Bancorp's investor relations website or telephonically until Friday, February 3, 2023 by dialing 1.877.674.7070, access code 735961#. About The Bancorp The Bancorp, Inc. (NASDAQ: TBBK), headquartered in Wilmington, Delaware, through its subsidiary, The Bancorp Bank, National Association, (or “The Bancorp Bank, N. A.”) 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 “intend,” “may,” “believe,” “will,” “expect,” “look,” “anticipate,” “plan,” “estimate,” “continue,” or similar words , and are based on current expectations about important economic, political, and technological factors, among others, and are subject to risks and uncertainties, which could cause the actual results, events or achievements to differ materially from those set forth in or implied by the forward-looking statements and related assumptions. For further discussion of the risks and uncertainties to which these forward-looking statements may be subject, see The Bancorp’s filings with the Securities and Exchange Commission, including the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of those filings. The forward-looking statements speak only as of the date of this press release. The Bancorp does not undertake to publicly revise or update forward-looking statements in this press release to reflect events or circumstances that arise after the date of this press release, except as may be required under applicable law. The Bancorp, Inc. Financial highlights (unaudited) Three months ended Year ended December 31, December 31, Consolidated condensed income statements 2022 2021 2022 2021 (Dollars in thousands, except per share and share data) Net interest income $ 76,760 $ 52,157 $ 248,841 $ 210,876 Provision for credit losses 2,777 1,626 7,108 3,110 Non-interest income ACH, card and other payment processing fees 2,383 1,921 8,935 7,526 Prepaid, debit card and related fees 19,371 17,776 77,236 74,654 Net realized and unrealized gains on commercial loans, at fair value 2,269 6,004 13,531 14,885 Leasing related income 1,256 1,757 4,822 6,457 Other non-interest income 461 768 1,159 1,227 Total non-interest income 25,740 28,226 105,683 104,749 Non-interest expense Salaries and employee benefits 27,520 28,159 105,368 105,998 Data processing expense 1,245 1,183 4,972 4,664 Legal expense 703 1,499 3,878 6,848 Legal settlement — — 1,152 — Civil money penalty — — 1,750 — FDIC insurance 944 351 3,270 5,586 Software 4,181 4,224 16,211 15,659 Other non-interest expense 8,882 7,784 32,901 29,595 Total non-interest expense 43,475 43,200 169,502 168,350 Income from continuing operations before income taxes 56,248 35,557 177,914 144,165 Income tax expense 16,007 8,529 47,701 33,724 Net income from continuing operations 40,241 27,028 130,213 110,441 Discontinued operations (Loss) income from discontinued operations before income taxes — (36 ) — 288 Income tax expense — — — 76 Net (loss) income from discontinued operations, net of tax — (36 ) — 212 Net income $ 40,241 $ 26,992 $ 130,213 $ 110,653 Net income per share from continuing operations - basic $ 0.72 $ 0.47 $ 2.30 $ 1.93 Net income per share from discontinued operations - basic $ — $ — $ — $ — Net income per share - basic $ 0.72 $ 0.47 $ 2.30 $ 1.93 Net income per share from continuing operations - diluted $ 0.71 $ 0.46 $ 2.27 $ 1.88 Net income per share from discontinued operations - diluted $ — $ — $ — $ — Net income per share - diluted $ 0.71 $ 0.46 $ 2.27 $ 1.88 Weighted average shares - basic 55,885,015 56,966,661 56,556,303 57,190,311 Weighted average shares - diluted 56,588,011 58,369,204 57,268,946 58,830,437 Condensed consolidated balance sheets December 31, September 30, June 30, December 31, 2022 (unaudited) 2022 (unaudited) 2022 (unaudited) 2021 (Dollars in thousands, except per share and share data) Assets: Cash and cash equivalents Cash and due from banks $ 24,063 $ 22,537 $ 12,873 $ 5,382 Interest earning deposits at Federal Reserve Bank 864,126 700,175 329,992 596,402 Total cash and cash equivalents 888,189 722,712 342,865 601,784 Investment securities, available-for-sale, at fair value 766,016 790,594 826,616 953,709 Commercial loans, at fair value 589,143 818,040 995,493 1,388,416 Loans, net of deferred fees and costs 5,486,853 5,267,375 4,754,697 3,747,224 Allowance for credit losses (22,374 ) (19,689 ) (19,087 ) (17,806 ) Loans, net 5,464,479 5,247,686 4,735,610 3,729,418 Federal Home Loan Bank, Atlantic Central Bankers Bank, and Federal Reserve Bank stock 12,629 12,629 1,643 1,663 Premises and equipment, net 18,401 18,443 16,693 16,156 Accrued interest receivable 32,005 25,506 19,264 17,871 Intangible assets, net 2,049 2,149 2,248 2,447 Other real estate owned 21,210 18,873 18,873 18,873 Deferred tax asset, net 19,703 27,241 23,344 12,667 Assets held-for-sale from discontinued operations — — — 3,268 Other assets 89,176 93,201 137,086 96,967 Total assets $ 7,903,000 $ 7,777,074 $ 7,119,735 $ 6,843,239 Liabilities: Deposits Demand and interest checking $ 6,559,617 $ 5,934,591 $ 5,394,562 $ 5,561,365 Savings and money market 140,496 575,381 486,189 415,546 Time deposits, $100,000 and over 330,000 401,331 — — Total deposits 7,030,113 6,911,303 5,880,751 5,976,911 Securities sold under agreements to repurchase 42 42 42 42 Short-term borrowings — — 385,000 — Senior debt 99,050 98,958 98,866 98,682 Subordinated debenture 13,401 13,401 13,401 13,401 Other long-term borrowings 10,028 38,928 39,125 39,521 Other liabilities 56,335 50,704 46,014 62,228 Total liabilities $ 7,208,969 $ 7,113,336 $ 6,463,199 $ 6,190,785 Shareholders' equity: Common stock - authorized, 75,000,000 shares of $1.00 par value; 55,689,627 and 57,370,563 shares issued and outstanding at December 31, 2022 and 2021, respectively 55,690 56,202 56,865 57,371 Additional paid-in capital 299,279 311,569 323,774 349,686 Retained earnings 369,319 329,078 298,474 239,106 Accumulated other comprehensive (loss) income (30,257 ) (33,111 ) (22,577 ) 6,291 Total shareholders' equity 694,031 663,738 656,536 652,454 Total liabilities and shareholders' equity $ 7,903,000 $ 7,777,074 $ 7,119,735 $ 6,843,239 Average balance sheet and net interest income Three months ended December 31, 2022 Three months ended December 31, 2021 (Dollars in thousands; unaudited) Average Average Average Average Assets: Balance Interest Rate Balance Interest Rate Interest earning assets: Loans, net of deferred fees and costs* $ 6,083,587 $ 94,477 6.21 % $ 4,766,271 $ 48,792 4.09 % Leases-bank qualified** 2,952 50 6.78 % 4,465 76 6.81 % Investment securities-taxable 782,046 8,483 4.34 % 954,172 5,770 2.42 % Investment securities-nontaxable** 3,559 32 3.60 % 3,558 31 3.49 % Interest earning deposits at Federal Reserve Bank 424,255 3,886 3.66 % 208,120 65 0.12 % Net interest earning assets 7,296,399 106,928 5.86 % 5,936,586 54,734 3.69 % Allowance for credit losses (20,227 ) (17,108 ) Assets held-for-sale from discontinued operations — — — 83,821 708 3.38 % Other assets 223,692 189,760 $ 7,499,864 $ 6,193,059 Liabilities and Shareholders' Equity: Deposits: Demand and interest checking $ 5,891,947 $ 21,350 1.45 % $ 4,931,891 $ 1,015 0.08 % Savings and money market 474,302 4,332 3.65 % 373,381 114 0.12 % Time deposits 257,231 2,193 3.41 % — — — Total deposits 6,623,480 27,875 1.68 % 5,305,272 1,129 0.09 % Short-term borrowings 26,847 271 4.04 % 53,315 34 0.26 % Repurchase agreements 42 — — 41 — — Long-term borrowings 38,951 498 5.11 % — — — Subordinated debentures 13,401 226 6.75 % 13,401 112 3.34 % Senior debt 99,005 1,280 5.17 % 100,419 1,280 5.10 % Total deposits and liabilities 6,801,726 30,150 1.77 % 5,472,448 2,555 0.19 % Other liabilities 19,254 75,395 Total liabilities 6,820,980 5,547,843 Shareholders' equity 678,884 645,216 $ 7,499,864 $ 6,193,059 Net interest income on tax equivalent basis** $ 76,778 $ 52,887 Tax equivalent adjustment 18 22 Net interest income $ 76,760 $ 52,865 Net interest margin ** 4.21 % 3.51 % * Includes commercial loans, at fair value. All periods include non-accrual loans. ** Full taxable equivalent basis, using a statutory Federal tax rate of 21% for 2022 and 2021. NOTE: In the table above, interest on loans for 2022 and 2021 includes $12,000 and $991,000, respectively, of interest and fees on PPP loans. Average balance sheet and net interest income Year ended December 31, 2022 Year ended December 31, 2021 (Dollars in thousands; unaudited) Average Average Average Average Assets: Balance Interest Rate Balance Interest Rate Interest earning assets: Loans, net of deferred fees and costs* $ 5,670,957 $ 275,651 4.86 % $ 4,597,977 $ 192,338 4.18 % Leases-bank qualified** 3,479 235 6.75 % 5,557 377 6.78 % Investment securities-taxable 855,629 25,598 2.99 % 1,059,229 28,661 2.71 % Investment securities-nontaxable** 3,559 125 3.51 % 3,757 130 3.46 % Interest earning deposits at Federal Reserve Bank 479,791 6,762 1.41 % 637,056 715 0.11 % Net interest earning assets 7,013,415 308,371 4.40 % 6,303,576 222,221 3.53 % Allowance for credit losses (19,374 ) (16,469 ) Assets held for sale from discontinued operations — — — 95,527 3,096 3.24 % Other assets 213,491 217,476 $ 7,207,532 $ 6,600,110 Liabilities and Shareholders' Equity: Deposits: Demand and interest checking $ 5,670,818 $ 39,872 0.70 % $ 5,321,283 $ 5,022 0.09 % Savings and money market 510,370 8,524 1.67 % 427,708 601 0.14 % Time deposits 86,907 2,740 3.15 % — — — Total deposits 6,268,095 51,136 0.82 % 5,748,991 5,623 0.10 % Short-term borrowings 60,312 1,538 2.55 % 19,958 49 0.25 % Repurchase agreements 41 — — 41 — — Long-term borrowings 39,202 1,004 2.56 % — — — Subordinated debentures 13,401 658 4.91 % 13,401 449 3.35 % Senior debt 98,865 5,118 5.18 % 100,283 5,118 5.10 % Total deposits and liabilities 6,479,916 59,454 0.92 % 5,882,674 11,239 0.19 % Other liabilities 54,374 100,627 Total liabilities 6,534,290 5,983,301 Shareholders' equity 673,242 616,809 $ 7,207,532 $ 6,600,110 Net interest income on tax equivalent basis** $ 248,917 $ 214,078 Tax equivalent adjustment 76 106 Net interest income $ 248,841 $ 213,972 Net interest margin ** 3.55 % 3.35 % * Includes commercial loans, at fair value. All periods include non-accrual loans. ** Full taxable equivalent basis, using a statutory Federal tax rate of 21% for 2022 and 2021. NOTE: In the table above, the 2021 interest on loans reflects $4.6 million of interest and fees which were earned on a short-term line of credit to another institution to initially fund PPP loans, which did not materially increase average loans or assets and which are not expected to recur. Interest on loans for 2022 and 2021 includes $514,000 and $5.8 million, respectively, of interest and fees on PPP loans. Allowance for credit losses Year ended December 31, December 31, 2022 (unaudited) 2021 (Dollars in thousands) Balance in the allowance for credit losses at beginning of period (1) $ 17,806 $ 16,082 Loans charged-off: SBA non-real estate 885 1,138 SBA commercial mortgage — 417 Direct lease financing 576 412 SBLOC — 15 Consumer - home equity — 10 Consumer - other — 14 Total 1,461 2,006 Recoveries: SBA non-real estate 140 51 SBA commercial mortgage — 9 Direct lease financing 124 58 Consumer - home equity — 1,099 Other loans 24 — Total 288 1,217 Net charge-offs 1,173 789 Provision for credit losses, excluding commitment provision 5,741 2,513 Balance in allowance for credit losses at end of period $ 22,374 $ 17,806 Net charge-offs/average loans 0.03 % 0.03 % Net charge-offs/average assets 0.02 % 0.01 % (1) Excludes activity from discontinued operations. Loan portfolio December 31, September 30, June 30, December 31, 2022 (unaudited) 2022 (unaudited) 2022 (unaudited) 2021 (Dollars in thousands) SBL non-real estate $ 108,954 $ 116,080 $ 112,854 $ 147,722 SBL commercial mortgage 474,496 429,865 425,219 361,171 SBL construction 30,864 26,841 27,042 27,199 Small business loans 614,314 572,786 565,115 536,092 Direct lease financing 632,160 599,796 583,086 531,012 SBLOC / IBLOC * 2,332,469 2,369,106 2,274,256 1,929,581 Advisor financing ** 172,468 168,559 155,235 115,770 Real estate bridge loans 1,669,031 1,488,119 1,106,875 621,702 Other loans *** 61,679 64,980 63,514 5,014 5,482,121 5,263,346 4,748,081 3,739,171 Unamortized loan fees and costs 4,732 4,029 6,616 8,053 Total loans, including unamortized fees and costs $ 5,486,853 $ 5,267,375 $ 4,754,697 $ 3,747,224 Small business portfolio December 31, September 30, June 30, December 31, 2022 (unaudited) 2022 (unaudited) 2022 (unaudited) 2021 (Dollars in thousands) SBL, including unamortized fees and costs $ 621,641 $ 579,156 $ 571,559 $ 541,437 SBL, included in loans, at fair value 146,717 159,914 168,579 199,585 Total small business loans **** $ 768,358 $ 739,070 $ 740,138 $ 741,022 * Securities Backed Lines of Credit, or SBLOC, are collateralized by marketable securities, while Insurance Backed Lines of Credit, or IBLOC, are collateralized by the cash surrender value of eligible life insurance policies. ** In 2020, we began originating loans to investment advisors for purposes of debt refinance, acquisition of another firm or internal succession. Maximum loan amounts are subject to 70% of the estimated 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. *** Includes demand deposit overdrafts reclassified as loan balances totaling $2.6 million and $322,000 at December 31, 2022 and December 31, 2021, respectively. Estimated overdraft charge-offs and recoveries are reflected in the allowance for credit losses and have been immaterial. ****The small business loans held at fair value are comprised of the government guaranteed portion of certain SBA loans at the dates indicated. Small business loans as of December 31, 2022 Loan principal (Dollars in millions) U.S. government guaranteed portion of SBA loans (a) $ 375 Paycheck Protection Program loans (PPP) (a) 5 Commercial mortgage SBA (b) 248 Construction SBA (c) 10 Non-guaranteed portion of U.S. government guaranteed loans (d) 100 Non-SBA small business loans 23 Total principal $ 761 Unamortized fees and costs 7 Total small business loans $ 768 (a) This is the portion of SBA 7a loans (7a) and PPP loans that 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 $10 million in Construction SBA loans, $9 million are 504 first mortgages with an origination date LTV of 50-60% and $1 million are SBA interim loans with an approved SBA post-construction full takeout/payoff. (d) The $100 million represents the unguaranteed portion of 7a loans which are generally 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. Small business loans by type as of December 31, 2022 (Excludes government guaranteed portion of SBA 7a loans and PPP loans) SBL commercial mortgage* SBL construction* SBL non-real estate Total % Total (Dollars in millions) Hotels and motels $ 79 $ — $ — $ 79 21% Car washes 18 1 — 19 5% Full-service restaurants 12 3 2 17 4% Lessors of nonresidential buildings 16 — — 16 4% Child day care services 14 — 1 15 4% Outpatient mental health and substance abuse centers 15 — — 15 4% Funeral homes and funeral services 10 — — �� 10 3% Assisted living facilities for the elderly 10 — — 10 3% Offices of lawyers 9 — — 9 2% Packaged frozen food merchant wholesalers 9 — — 9 2% Gasoline stations with convenience stores 8 — — 8 2% Lessors of other real estate property 8 — — 8 2% Fitness and recreational sports centers 6 — 2 8 2% General warehousing and storage 7 — — 7 2% Plumbing, heating, and air-conditioning contractors 6 — 1 7 2% Limited-service restaurants 1 2 2 5 1% Other miscellaneous durable goods merchant wholesalers 5 — — 5 1% Lessors of residential buildings and dwellings 5 — — 5 1% Other spectator sports 5 — — 5 1% All other amusement and recreation industries 4 — — 4 1% Gas stations 4 — — 4 1% Offices of dentists 3 1 — 4 1% Other warehousing and storage 3 — — 3 1% Vocational rehabilitation services 3 — — 3 1% Other** 74 3 29 106 29% Total $ 334 $ 10 $ 37 $ 381 100% * Of the SBL commercial mortgage and SBL construction loans, $85 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 $3 million are spread over a hundred different classifications such as Commercial Printing, Pet and Pet Supplies Stores, Securities Brokerage, etc. State diversification as of December 31, 2022 (Excludes government guaranteed portion of SBA 7a loans and PPP loans) SBL commercial mortgage* SBL construction* SBL non-real estate Total % Total (Dollars in millions) Florida $ 65 $ — $ 4 $ 69 18% California 61 3 3 67 18% North Carolina 40 7 2 49 13% New York 25 — 5 30 8% Pennsylvania 18 — 1 19 5% Georgia 15 — 2 17 4% Illinois 15 — 1 16 4% New Jersey 12 — 3 15 4% Texas 12 — 3 15 4% Tennessee 14 — — 14 4% Colorado 12 — 1 13 3% Ohio 11 — 1 12 3% Connecticut 10 — 1 11 3% Virginia 8 — 1 9 2% Michigan 4 — 1 5 1% Other States 12 — 8 20 6% Total $ 334 $ 10 $ 37 $ 381 100% * Of the SBL commercial mortgage and SBL construction loans, $85 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 December 31, 2022 Type State SBL commercial mortgage (Dollars in millions) Mental health and substance abuse center FL $ 10 Hotel FL 9 Lawyer's office CA 8 General warehousing and storage PA 7 Hotel NC 7 Hotel FL 6 Hotel NY 6 Hotel NC 5 Mental health and substance abuse center CT 5 Assisted living facility FL 5 Total $ 68 Commercial real estate loans, excluding SBA loans, are as follows including LTV at origination: Type as of December 31, 2022 Type # Loans Balance Weighted average origination date LTV Weighted average interest rate (Dollars in millions) Real estate bridge loans (multi-family apartment loans recorded at amortized cost)* 130 $ 1,669 72 % 7.69 % Non-SBA commercial real estate loans, at fair value: Multi-family (apartment bridge loans)* 22 $ 354 76 % 7.52 % Hospitality (hotels and lodging) 4 36 65 % 8.00 % Retail 3 42 72 % 7.30 % Other 3 11 73 % 5.20 % 32 443 74 % 7.48 % Fair value adjustment (1 ) Total non-SBA commercial real estate loans, at fair value 442 Total commercial real estate loans $ 2,111 73 % 7.65 % *In the third quarter of 2021, we resumed the origination of multi-family apartment loans. These are similar to the multi-family apartment loans carried at fair value, but at origination are intended to be held on the balance sheet, so are not accounted for at fair value. State diversification as of December 31, 2022 15 largest loans as of December 31, 2022 State Balance Origination date LTV State Balance Origination date LTV (Dollars in millions) (Dollars in millions) Texas $ 760 74% Texas $ 42 75% Georgia 232 71% Texas 39 75% Florida 217 71% Texas 39 79% Ohio 95 69% Texas 39 72% Tennessee 98 72% Tennessee 37 72% Alabama 62 72% Texas 37 80% Michigan 72 70% Michigan 36 62% Other States each <$55 million 575 74% Florida 32 72% Total $ 2,111 74% Texas 32 67% Michigan 31 79% Tennessee 30 71% Missouri 30 72% Texas 30 62% Ohio 29 74% Texas 29 77% 15 Largest loans $ 512 73% Institutional banking loans outstanding at December 31, 2022 Type Principal % of total (Dollars in millions) Securities backed lines of credit (SBLOC) $ 1,209 48% Insurance backed lines of credit (IBLOC) 1,124 45% Advisor financing 172 7% Total $ 2,505 100% 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 December 31, 2022 Principal amount % Principal to collateral (Dollars in millions) $ 20 55% 18 41% 13 32% 9 34% 9 66% 9 45% 9 62% 8 73% 7 38% 6 39% Total and weighted average $ 108 48% 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, nine insurance companies have been approved and, as of December 31, 2022, all were rated A- or better by AM BEST. Direct lease financing* by type as of December 31, 2022 Principal balance % Total (Dollars in millions) Construction $ 115 18% Government agencies and public institutions** 99 16% Waste management and remediation services 69 11% Real estate and rental and leasing 59 9% Retail trade 49 8% Transportation and warehousing 33 5% Health care and social assistance 32 5% Finance and insurance 31 5% Professional, scientific, and technical services 19 3% Manufacturing 18 3% Wholesale trade 18 3% Educational services 8 1% Mining, quarrying, and gas extraction 4 1% Other 78 12% Total $ 632 100% * Of the total $632 million of direct lease financing, $555 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 December 31, 2022 State Principal balance % Total (Dollars in millions) Florida $ 88 14% California 68 11% Utah 65 10% New Jersey 42 7% Pennsylvania 41 6% New York 29 5% North Carolina 29 5% Texas 28 4% Maryland 27 4% Connecticut 23 4% Washington 16 3% Idaho 15 2% Georgia 14 2% Illinois 12 2% Ohio 11 2% Other States 124 19% Total $ 632 100% Capital ratios Tier 1 capital Tier 1 capital Total capital Common equity to average to risk-weighted to risk-weighted tier 1 to risk assets ratio assets ratio assets ratio weighted assets As of December 31, 2022 The Bancorp, Inc. 9.63% 13.40% 13.87% 13.40% The Bancorp Bank, National Association 10.73% 14.95% 15.42% 14.95% "Well capitalized" institution (under federal regulations-Basel III) 5.00% 8.00% 10.00% 6.50% As of December 31, 2021 The Bancorp, Inc. 10.40% 14.72% 15.13% 14.72% The Bancorp Bank, National Association 10.98% 15.48% 15.88% 15.48% "Well capitalized" institution (under federal regulations-Basel III) 5.00% 8.00% 10.00% 6.50% Three months ended Year ended December 31, December 31, 2022 2021 2022 2021 Selected operating ratios Return on average assets (1) 2.13% 1.73% 1.81% 1.68% Return on average equity (1) 23.52% 16.60% 19.34% 17.94% Net interest margin 4.21% 3.51% 3.55% 3.35% (1) Annualized Book value per share table December 31, September 30, June 30, December 31, 2022 2022 2022 2021 Book value per share $ 12.46 $ 11.81 $ 11.55 $ 11.37 Loan quality table December 31, September 30, June 30, December 31, 2022 2022 2022 2021 (Dollars in thousands) Nonperforming loans to total loans 0.33 % 0.16 % 0.18 % 0.10 % Nonperforming assets to total assets 0.50 % 0.35 % 0.39 % 0.33 % Allowance for credit losses to total loans 0.41 % 0.37 % 0.40 % 0.48 % Nonaccrual loans (1) $ 10,356 $ 3,860 $ 3,698 $ 3,161 Loans 90 days past due still accruing interest (2) 7,775 4,415 4,848 461 Other real estate owned 21,210 18,873 18,873 18,873 Total nonperforming assets $ 39,341 $ 27,148 $ 27,419 $ 22,495 (1) Of the $10.4 million of nonaccrual loans at December 31, 2022, $3.1 million were guaranteed under various SBA loan programs, with the majority of such loans classified as nonaccrual in the fourth quarter of 2022. The majority of the balance of the increase in that quarter resulted from $3.1 million representing 78 vehicles from one leasing relationship which were marked to their estimated market value. (2) The majority of the fourth quarter increase resulted from $2.0 million for an IBLOC loan which is in process of pay-off from the cash value of life insurance, and $878,000 from an SBLOC loan which was brought current in January 2023. To the extent that IBLOC loans become non-performing or are not repaid by borrowers, the Bank can utilize the related cash value of life insurance collateral for loan repayment. Similarly, marketable securities collateralizing SBLOC loans may be sold to repay those loans. Gross dollar volume (GDV) (1) Three months ended December 31, September 30, June 30, December 31, 2022 2022 2022 2021 (Dollars in thousands) Prepaid and debit card GDV $ 28,066,895 $ 28,119,428 $ 28,394,897 $ 24,821,576 (1) Gross dollar volume represents the total dollar amount spent on prepaid and debit cards issued by The Bancorp Bank, N.A. Business line quarterly summary Quarter ended December 31, 2022 (Dollars in millions) Balances % Growth Major business lines Average approximate rates * Balances ** Year over year Linked quarter annualized Loans Institutional banking *** 5.3% $ 2,505 22% (5)% Small business lending**** 6.1% 768 10% 17% Leasing 6.3% 632 19% 22% Commercial real estate (non-SBA loans, at fair value) 7.3% 443 nm nm Real estate bridge loans (recorded at book value) 7.4% 1,669 nm nm Weighted average yield 6.2% $ 6,017 Non-interest income % Growth Deposits: Fintech solutions group Current quarter Year over year Prepaid and debit card issuance, and other payments 1.8% $ 5,685 15% nm $ 21.8 10% * Average rates are for the quarter ended December 31, 2022. ** Loan and deposit categories are respectively based on period-end and average quarterly balances. *** Institutional Banking loans are comprised of security backed lines of credit (SBLOC), collateralized by marketable securities, insurance backed lines of credit (IBLOC), collateralized by the cash surrender value of eligible life insurance policies, and investment advisor financing. **** Small Business Lending is substantially comprised of SBA loans. Loan growth percentages exclude short-term PPP loans. View source version on businesswire.com: https://www.businesswire.com/news/home/20230124005844/en/
The Bancorp, Inc. Andres Viroslav Director, Investor Relations 215-861-7990 andres.viroslav@thebancorp.com
