The Bancorp, Inc. ("The Bancorp") (NASDAQ: TBBK), a financial holding company, today reported financial results for the fourth quarter and full year of 2019.
Highlights
- For the quarter ended December 31, 2019, The Bancorp earned net income of $2.9 million from continuing operations and $0.03 diluted earnings per share from combined continuing and discontinued operations. That net income adjusted for a $7.5 million non-deductible FDIC civil money penalty, was $10.3 million, or $0.18 per diluted share. This compares to $0.11 diluted earnings per share from continuing operations for the quarter ended December 31, 2018.
- Net interest margin increased to 3.32% for the year ended December 31, 2019, compared to 3.19% for the year ended December 31, 2018.
- Net interest income increased 15% to $35.2 million for the quarter ended December 31, 2019, compared to $30.6 million for the quarter ended December 31, 2018.
- Average loans and leases, including loans held for sale, increased 31% to $2.5 billion for the quarter ended December 31, 2019, compared to $1.9 billion for the quarter ended December 31, 2018.
- Prepaid, debit card and related fees increased 30% to $17.0 million for the quarter ended December 31, 2019, compared to $13.1 million for the quarter ended December 31, 2018. Gross dollar volume (GDV), representing total spend on cards, increased 41%.
- Total year-end SBLOC (securities-backed lines of credit) and IBLOC (insurance backed lines of credit) loans increased 30% year over year and 11% quarter over third quarter 2019 to $1.0 billion at December 31, 2019.
- Small Business Loans, including those held-for-sale, increased 22% year over year to $572.6 million at December 31, 2019.
- The average rate on $4.3 billion of average deposits and interest-bearing liabilities in the fourth quarter of 2019 was 0.77%. Average prepaid card deposits of $2.7 billion for fourth quarter 2019, reflected an increase of 22% over the $2.2 billion for the quarter ended December 31, 2018.
- Consolidated leverage ratio was 9.65% at December 31, 2019. The Bancorp and its subsidiary, The Bancorp Bank, remain well capitalized.
- Book value per common share at December 31, 2019 was $8.52 per share compared to $7.22 a year earlier, an increase of 18%.
Damian Kozlowski, The Bancorp’s Chief Executive Officer, said, “This quarter we again experienced across the board increases in both spread and fee income driven by significantly higher loan balances and GDV growth. Performance in the 4th quarter positioned us well for continued progress in 2020. Based on our current momentum, we reaffirm a minimum of $1.25 earnings per share and a $1.34 EPS target for 2020.”
The Bancorp reported net income of $1.9 million, or $0.03 income per diluted share, for the quarter ended December 31, 2019, compared to net income of $7.1 million, or $0.13 income per diluted share, for the quarter ended December 31, 2018. Results for the fourth quarter of 2019 reflect a $7.5 million non-deductible FDIC civil money penalty. 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 9.65%, 18.94%, 19.34% and 18.94%, respectively, compared to well-capitalized minimums of 5%, 8%, 10% and 6.5%, respectively.
Conference Call Webcast
You may access the LIVE webcast of The Bancorp's Quarterly Earnings Conference Call at 8:00 AM ET Friday, January 31, 2020 by clicking on the webcast link on The Bancorp's homepage at www.thebancorp.com. Or, you may dial 844.775.2543, access code 7997238. 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 7, 2020 by dialing 855.859.2056, access code 7997238.
The Bancorp, Inc. (NASDAQ: TBBK) is dedicated to serving the unique needs of non-bank financial service companies, ranging from entrepreneurial start-ups to those on the Fortune 500. The company’s only subsidiary, The Bancorp Bank (Member FDIC, Equal Housing Lender), has been repeatedly recognized in the payments industry as the Top Issuer of Prepaid Cards (US), a top merchant sponsor bank and a top ACH originator. Specialized lending distinctions include National Preferred SBA Lender, a leading provider of securities-backed lines of credit, and one of the few bank-owned commercial vehicle leasing groups in the nation. For more information please visit www.thebancorp.com.
Forward-Looking Statements
Statements in this earnings release regarding The Bancorp’s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. These statements may be identified by the use of forward-looking terminology, including but not limited to the words “may,” “believe,” “will,” “expect,” “look,” “anticipate,” “estimate,” “continue,” or similar words. For further discussion of the risks and uncertainties to which these forward-looking statements may be subject, see The Bancorp’s filings with the Securities Exchange Commission, including the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of those filings. These risks and uncertainties could cause actual results, performance or achievements to differ materially from those projected in the forward-looking statements. The forward-looking statements speak only as of the date of this press release. The Bancorp does not undertake to publicly revise or update forward-looking statements in this press release to reflect events or circumstances that arise after the date of this earnings release, except as may be required under applicable law.
Financial highlights | ||||||||||||
(unaudited) | ||||||||||||
Three months ended | Year ended | |||||||||||
December 31, | December 31, | |||||||||||
Condensed income statement | 2019 | 2018 | 2019 | 2018 | ||||||||
(dollars in thousands except per share data) | ||||||||||||
Net interest income | $ | 35,179 | $ | 30,609 | $ | 141,288 | $ | 120,849 | ||||
Provision for loan and lease losses | 1,450 | 925 | 4,400 | 3,585 | ||||||||
Non-interest income | ||||||||||||
Service fees on deposit accounts | 6 | - | 75 | 3,622 | ||||||||
ACH, card and other payment processing fees | 1,962 | 2,378 | 9,376 | 8,653 | ||||||||
Prepaid, debit card and related fees | 17,004 | 13,068 | 65,141 | 54,627 | ||||||||
Net realized and unrealized gains (losses) on commercial loans originated for sale | (247) | 224 | 24,072 | 20,498 | ||||||||
Change in value of investment in unconsolidated entity | - | (708) | - | (3,689) | ||||||||
Leasing related income | 932 | 718 | 3,243 | 3,071 | ||||||||
Affinity fees | - | 10 | - | 281 | ||||||||
Gain on sale of IRA portfolio | - | - | - | 65,000 | ||||||||
Other non-interest income | 841 | 1,000 | 2,220 | 1,732 | ||||||||
Total non-interest income | 20,498 | 16,690 | 104,127 | 153,795 | ||||||||
Non-interest expense | ||||||||||||
Salaries and employee benefits | 24,067 | 20,603 | 94,259 | 79,816 | ||||||||
Data processing expense | 1,210 | 1,446 | 4,894 | 6,187 | ||||||||
Legal expense | 995 | 2,034 | 5,319 | 7,845 | ||||||||
FDIC Insurance | 2,141 | 1,430 | 7,025 | 8,819 | ||||||||
Software | 3,551 | 3,425 | 12,731 | 13,304 | ||||||||
Civil money penalties (recoveries) | 7,500 | - | 8,900 | (290) | ||||||||
Prepaid relationship exit expense | - | 672 | - | 672 | ||||||||
Lease termination expense | - | - | 908 | 395 | ||||||||
Other non-interest expense | 8,258 | 8,010 | 34,485 | 34,530 | ||||||||
Total non-interest expense | 47,722 | 37,620 | 168,521 | 151,278 | ||||||||
Income from continuing operations before income taxes | 6,505 | 8,754 | 72,494 | 119,781 | ||||||||
Income tax expense | 3,641 | 2,691 | 21,226 | 32,241 | ||||||||
Net income from continuing operations | 2,864 | 6,063 | 51,268 | 87,540 | ||||||||
Discontinued operations | ||||||||||||
Income (loss) from discontinued operations before income taxes | (1,365) | 1,755 | 510 | 1,491 | ||||||||
Income tax expense (benefit) | (355) | 699 | 219 | 354 | ||||||||
Net income (loss) from discontinued operations, net of tax | (1,010) | 1,056 | 291 | 1,137 | ||||||||
Net income | $ | 1,854 | $ | 7,119 | $ | 51,559 | $ | 88,677 | ||||
Net income per share from continuing operations - basic | $ | 0.05 | $ | 0.11 | $ | 0.90 | $ | 1.55 | ||||
Net income (loss) per share from discontinued operations - basic | $ | (0.02) | $ | 0.02 | $ | 0.01 | $ | 0.02 | ||||
Net income per share - basic | $ | 0.03 | $ | 0.13 | $ | 0.91 | $ | 1.57 | ||||
Net income per share from continuing operations - diluted | $ | 0.05 | $ | 0.11 | $ | 0.89 | $ | 1.53 | ||||
Net income (loss) per share from discontinued operations - diluted | $ | (0.02) | $ | 0.02 | $ | 0.01 | $ | 0.02 | ||||
Net income per share - diluted | $ | 0.03 | $ | 0.13 | $ | 0.90 | $ | 1.55 | ||||
Weighted average shares - basic | 56,924,543 | 56,446,088 | 56,765,635 | 56,343,845 | ||||||||
Weighted average shares - diluted | 57,847,509 | 56,964,074 | 57,338,985 | 57,068,306 | ||||||||
Balance sheet | December 31, | September 30, | June 30, | December 31, | ||||||||
2019 | 2019 | 2019 | 2018 | |||||||||
(dollars in thousands) | ||||||||||||
Assets: | ||||||||||||
Cash and cash equivalents | ||||||||||||
| Cash and due from banks | $ | 19,928 | $ | 24,068 | $ | 27,450 | $ | 2,440 | ||||
| Interest earning deposits at Federal Reserve Bank | 924,544 | 932,440 | 284,823 | 551,862 | ||||||||
| Total cash and cash equivalents | 944,472 | 956,508 | 312,273 | 554,302 | ||||||||
Investment securities, available-for-sale, at fair value | 1,320,692 | 1,382,437 | 1,361,779 | 1,236,324 | ||||||||
Investment securities, held-to-maturity | 84,387 | 84,399 | 84,414 | 84,432 | ||||||||
Commercial loans held for sale, at fair value | 1,177,118 | 489,240 | 934,452 | 688,471 | ||||||||
Loans, net of deferred fees and costs | 1,827,673 | 1,683,377 | 1,561,451 | 1,501,976 | ||||||||
Allowance for loan and lease losses | (10,238) | (10,360) | (9,989) | (8,653) | ||||||||
Loans, net | 1,817,435 | 1,673,017 | 1,551,462 | 1,493,323 | ||||||||
Federal Home Loan Bank & Atlantic Community Bancshares stock | 5,342 | 4,342 | 6,342 | 1,113 | ||||||||
Premises and equipment, net | 17,538 | 17,857 | 17,380 | 18,895 | ||||||||
Accrued interest receivable | 13,619 | 13,898 | 14,567 | 12,753 | ||||||||
Intangible assets, net | 2,315 | 2,698 | 3,081 | 3,846 | ||||||||
Deferred tax asset, net | 14,145 | 13,006 | 14,574 | 21,622 | ||||||||
Investment in unconsolidated entity | 39,154 | 49,431 | 58,012 | 59,273 | ||||||||
Assets held for sale from discontinued operations | 140,657 | 162,098 | 169,109 | 197,831 | ||||||||
Other assets | 81,696 | 94,605 | 76,123 | 65,726 | ||||||||
| Total assets | $ | 5,658,570 | $ | 4,943,536 | $ | 4,603,568 | $ | 4,437,911 | ||||
Liabilities: | ||||||||||||
Deposits | ||||||||||||
| Demand and interest checking | $ | 4,402,740 | $ | 3,844,747 | $ | 3,964,905 | $ | 3,904,638 | ||||
| Savings and money market | 174,290 | 25,950 | 26,841 | 31,076 | ||||||||
| Time deposits | 475,000 | 475,000 | - | - | ||||||||
| Total deposits | 5,052,030 | 4,345,697 | 3,991,746 | 3,935,714 | ||||||||
Securities sold under agreements to repurchase | 82 | 93 | 93 | 93 | ||||||||
Short-term borrowings | - | - | 45,000 | - | ||||||||
Subordinated debenture | 13,401 | 13,401 | 13,401 | 13,401 | ||||||||
Long-term borrowings | 40,991 | 41,166 | 41,334 | 41,674 | ||||||||
Other liabilities | 67,569 | 59,005 | 53,862 | 40,253 | ||||||||
| Total liabilities | $ | 5,174,073 | $ | 4,459,362 | $ | 4,145,436 | $ | 4,031,135 | ||||
Shareholders' equity: | ||||||||||||
Common stock - authorized, 75,000,000 shares of $1.00 par value; 56,940,521 and 56,446,088 shares issued and outstanding at December 31, 2019 and 2018, respectively | 56,941 | 56,911 | 56,875 | 56,446 | ||||||||
Treasury stock (100,000 shares) | (866) | (866) | (866) | (866) | ||||||||
Additional paid-in capital | 371,633 | 370,113 | 368,771 | 366,181 | ||||||||
Accumulated earnings (deficit) | 50,742 | 48,888 | 28,463 | (817) | ||||||||
Accumulated other comprehensive income (loss) | 6,047 | 9,128 | 4,889 | (14,168) | ||||||||
Total shareholders' equity | 484,497 | 484,174 | 458,132 | 406,776 | ||||||||
| Total liabilities and shareholders' equity | $ | 5,658,570 | $ | 4,943,536 | $ | 4,603,568 | $ | 4,437,911 | ||||
Average balance sheet and net interest income | Three months ended December 31, 2019 | Three months ended December 31, 2018 | ||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Average | Average | Average | Average | |||||||||||||||||
Assets: | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||
Interest earning assets: | ||||||||||||||||||||
| Loans net of deferred fees and costs ** | $ | 2,514,401 | $ | 31,177 | 4.96 | % | $ | 1,905,089 | $ | 24,782 | 5.20 | % | ||||||||
| Leases - bank qualified* | 12,633 | 229 | 7.25 | % | 19,531 | 353 | 7.23 | % | ||||||||||||
| Investment securities-taxable | 1,441,895 | 9,636 | 2.67 | % | 1,329,249 | 10,619 | 3.20 | % | ||||||||||||
| Investment securities-nontaxable* | 5,825 | 47 | 3.23 | % | 7,814 | 60 | 3.07 | % | ||||||||||||
| Interest earning deposits at Federal Reserve Bank | 569,804 | 2,505 | 1.76 | % | 436,501 | 2,571 | 2.36 | % | ||||||||||||
| Federal funds sold and securities purchased under agreement to resell | - | - | - | 44,093 | 340 | 3.08 | % | |||||||||||||
Net interest earning assets | 4,544,558 | 43,594 | 3.84 | % | 3,742,277 | 38,725 | 4.14 | % | ||||||||||||
Allowance for loan and lease losses | (10,162 | ) | (7,973 | ) | ||||||||||||||||
Loans held for sale from discontinued operations | 149,301 | 1,416 | 3.79 | % | 204,354 | 1,921 | 3.76 | % | ||||||||||||
Other assets | 254,809 | 178,770 | ||||||||||||||||||
$ | 4,938,506 | $ | 4,117,428 | |||||||||||||||||
Liabilities and Shareholders' Equity: | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
| Demand and interest checking | $ | 3,749,860 | $ | 5,405 | 0.58 | % | $ | 3,602,089 | $ | 7,522 | 0.84 | % | ||||||||
| Savings and money market | 66,151 | 51 | 0.31 | % | 44,029 | 127 | 1.15 | % | ||||||||||||
| Time | 406,730 | 2,217 | 2.18 | % | - | - | - | |||||||||||||
Total deposits | 4,222,741 | 7,673 | 0.73 | % | 3,646,118 | 7,649 | 0.84 | % | ||||||||||||
Short-term borrowings | 102,832 | 507 | 1.97 | % | 29,184 | 190 | 2.60 | % | ||||||||||||
Securities sold under agreements to repurchase | 84 | - | 0.00 | % | 156 | - | 0.00 | % | ||||||||||||
Subordinated debentures | 13,401 | 177 | 5.28 | % | 13,401 | 190 | 5.67 | % | ||||||||||||
Total deposits and liabilities | 4,339,058 | 8,357 | 0.77 | % | 3,688,859 | 8,029 | 0.87 | % | ||||||||||||
Other liabilities | 115,112 | 29,244 | ||||||||||||||||||
Total liabilities | 4,454,170 | 3,718,103 | ||||||||||||||||||
Shareholders' equity | 484,336 | 399,325 | ||||||||||||||||||
$ | 4,938,506 | $ | 4,117,428 | |||||||||||||||||
| Net interest income on tax equivalent basis* | $ | 36,653 | $ | 32,617 | ||||||||||||||||
| Tax equivalent adjustment | 58 | 87 | ||||||||||||||||||
| Net interest income | $ | 36,595 | $ | 32,530 | ||||||||||||||||
| Net interest margin * | 3.12 | % | 3.32 | % | ||||||||||||||||
* Full taxable equivalent basis, using a statutory Federal tax rate of 21% for 2019 and 2018. | ||||||||||||||||||||
** Includes loans held for sale. | ||||||||||||||||||||
Average balance sheet and net interest income | Year ended December 31, 2019 | Year ended December 31, 2018 | ||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Average | Average | Average | Average | |||||||||||||||||
Assets: | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||
Interest earning assets: | ||||||||||||||||||||
| Loans net of deferred fees and costs ** | $ | 2,402,686 | $ | 126,176 | 5.25 | % | $ | 1,915,456 | $ | 94,232 | 4.92 | % | ||||||||
| Leases - bank qualified* | 14,968 | 1,177 | 7.86 | % | 20,025 | 1,370 | 6.84 | % | ||||||||||||
| Investment securities-taxable | 1,406,247 | 42,286 | 3.01 | % | 1,375,566 | 41,994 | 3.05 | % | ||||||||||||
| Investment securities-nontaxable* | 6,533 | 215 | 3.29 | % | 8,631 | 262 | 3.04 | % | ||||||||||||
| Interest earning deposits at Federal Reserve Bank | 472,279 | 10,007 | 2.12 | % | 460,577 | 8,737 | 1.90 | % | ||||||||||||
| Federal funds sold and securities purchased under agreement to resell | - | - | - | 59,157 | 1,708 | 2.89 | % | |||||||||||||
Net interest earning assets | 4,302,713 | 179,861 | 4.18 | % | 3,839,412 | 148,303 | 3.86 | % | ||||||||||||
Allowance for loan and lease losses | (9,696 | ) | (7,528 | ) | ||||||||||||||||
Loans held for sale from discontinued operations | 169,986 | 6,710 | 3.95 | % | 253,348 | 8,810 | 3.48 | % | ||||||||||||
Other assets | 254,674 | 190,252 | ||||||||||||||||||
$ | 4,717,677 | $ | 4,275,484 | |||||||||||||||||
Liabilities and Shareholders' Equity: | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
| Demand and interest checking | $ | 3,817,176 | $ | 30,664 | 0.80 | % | $ | 3,499,288 | $ | 23,068 | 0.66 | % | ||||||||
| Savings and money market | 37,671 | 181 | 0.48 | % | 362,267 | 2,878 | 0.79 | % | ||||||||||||
| Time | 170,438 | 3,555 | 2.09 | % | - | - | - | |||||||||||||
Total deposits | 4,025,285 | 34,400 | 0.85 | % | 3,861,555 | 25,946 | 0.67 | % | ||||||||||||
Short-term borrowings | 129,031 | 3,131 | 2.43 | % | 20,346 | 451 | 2.22 | % | ||||||||||||
Securities sold under agreements to repurchase | 90 | - | 0.00 | % | 173 | - | 0.00 | % | ||||||||||||
Subordinated debentures | 13,401 | 750 | 5.60 | % | 13,401 | 714 | 5.33 | % | ||||||||||||
Total deposits and liabilities | 4,167,807 | 38,281 | 0.92 | % | 3,895,475 | 27,111 | 0.70 | % | ||||||||||||
Other liabilities | 104,233 | 14,546 | ||||||||||||||||||
Total liabilities | 4,272,040 | 3,910,021 | ||||||||||||||||||
Shareholders' equity | 445,637 | 365,463 | ||||||||||||||||||
$ | 4,717,677 | $ | 4,275,484 | |||||||||||||||||
| Net interest income on tax equivalent basis* | $ | 148,290 | $ | 130,002 | ||||||||||||||||
| Tax equivalent adjustment | 292 | 343 | ||||||||||||||||||
| Net interest income | $ | 147,998 | $ | 129,659 | ||||||||||||||||
| Net interest margin * | 3.32 | % | 3.19 | % | ||||||||||||||||
* Full taxable equivalent basis, using a statutory Federal rate of 21% for 2019 and 2018. | ||||||||||||||||||||
** Includes loans held for sale. | ||||||||||||||||||||
Allowance for loan and lease losses: | Year ended | Year ended | ||||
December 31, | December 31, | |||||
2019 | 2018 | |||||
(dollars in thousands) | ||||||
Balance in the allowance for loan and lease losses at beginning of period (1) | $ | 8,653 | $ | 7,096 | ||
Loans charged-off: | ||||||
| SBA non-real estate | 1,362 | 1,348 | ||||
| SBA commercial mortgage | - | 157 | ||||
| Direct lease financing | 529 | 637 | ||||
| Other consumer loans | 1,102 | 21 | ||||
| Total | 2,993 | 2,163 | ||||
Recoveries: | ||||||
| SBA non-real estate | 125 | 57 | ||||
| SBA commercial mortgage | - | 13 | ||||
| Direct lease financing | 51 | 64 | ||||
| Other consumer loans | 2 | 1 | ||||
| Total | 178 | 135 | ||||
Net charge-offs | 2,815 | 2,028 | ||||
Provision charged to operations | 4,400 | 3,585 | ||||
Balance in allowance for loan and lease losses at end of period | $ | 10,238 | $ | 8,653 | ||
Net charge-offs/average loans | 0.12% | 0.10% | ||||
Net charge-offs/average assets | 0.06% | 0.05% | ||||
| (1) Excludes activity from assets held for sale from discontinued operations. | ||||||
Loan portfolio: | December 31, | September 30, | June 30, | December 31, | ||||||||
2019 | 2019 | 2019 | 2018 | |||||||||
(in thousands) | ||||||||||||
SBL non-real estate | $ | 84,579 | $ | 84,181 | $ | 75,475 | $ | 76,340 | ||||
SBL commercial mortgage | 218,110 | 209,008 | 189,427 | 165,406 | ||||||||
SBL construction | 45,310 | 38,116 | 29,298 | 21,636 | ||||||||
Small business loans* | 347,999 | 331,305 | 294,200 | 263,382 | ||||||||
Direct lease financing | 434,460 | 412,755 | 407,907 | 394,770 | ||||||||
SBLOC / IBLOC** | 1,024,420 | 920,463 | 837,672 | 785,303 | ||||||||
Other specialty lending | 3,055 | 3,167 | 3,432 | 31,836 | ||||||||
Other consumer loans *** | 4,554 | 6,388 | 7,898 | 16,302 | ||||||||
1,814,488 | 1,674,078 | 1,551,109 | 1,491,593 | |||||||||
Unamortized loan fees and costs | 13,185 | 9,299 | 10,342 | 10,383 | ||||||||
Total loans, net of deferred fees and costs | $ | 1,827,673 | $ | 1,683,377 | $ | 1,561,451 | $ | 1,501,976 | ||||
Small business portfolio: | December 31, | September 30, | June 30, | December 31, | ||||||||
2019 | 2019 | 2019 | 2018 | |||||||||
(in thousands) | ||||||||||||
SBL, including deferred fees and costs | 355,641 | 337,440 | 301,502 | 270,860 | ||||||||
SBL, included in held-for-sale | 216,930 | 222,007 | 215,064 | 199,977 | ||||||||
Total small business loans | $ | 572,571 | $ | 559,447 | $ | 516,566 | $ | 470,837 | ||||
* The preceding table shows small business loans and small business loans held-for-sale, which consist of the government guaranteed portion of SBA loans, at the dates indicated (in thousands). |
** Securities Backed Lines of Credit (SBLOC) are collateralized by marketable securities, while Insurance Backed Lines of Credit (IBLOC) are collateralized by the cash surrender value of insurance policies. |
*** Included in the table above under Other consumer loans are demand deposit overdrafts reclassified as loan balances totaling $882,000 and $7.2 million at December 31, 2019 and December 31, 2018, respectively. Estimated overdraft charge-offs and recoveries are reflected in the allowance for loan and lease losses. |
Capital ratios: | Tier 1 capital | Tier 1 capital | Total capital | Common equity | ||||
to average | to risk-weighted | to risk-weighted | tier 1 to risk | |||||
assets ratio | assets ratio | assets ratio | weighted assets | |||||
As of December 31, 2019 | ||||||||
The Bancorp, Inc. | 9.65% | 18.94% | 19.34% | 18.94% | ||||
The Bancorp Bank | 9.46% | 18.61% | 19.01% | 18.61% | ||||
"Well capitalized" institution (under FDIC regulations-Basel III) | 5.00% | 8.00% | 10.00% | 6.50% | ||||
As of December 31, 2018 | ||||||||
The Bancorp, Inc. | 10.11% | 20.64% | 21.07% | 20.64% | ||||
The Bancorp Bank | 9.70% | 20.18% | 20.61% | 20.18% | ||||
"Well capitalized" institution (under FDIC regulations) | 5.00% | 8.00% | 10.00% | 6.50% |
Three months ended | Year ended | |||||||
December 31, | December 31, | |||||||
2019 | 2018 | 2019 | 2018 | |||||
Selected operating ratios: | ||||||||
Return on average assets (1) | 0.15% | 0.69% | 1.09% | 2.07% | ||||
Return on average equity (1) | 1.52% | 7.07% | 11.57% | 24.26% | ||||
Net interest margin | 3.12% | 3.32% | 3.32% | 3.19% | ||||
(1) Annualized | ||||||||
NOTE: For continuing operations and excluding civil money penalties, return on assets for fourth quarter and full year 2019 was 0.83% and 1.28% while return on equity was 8.5% and 13.5%, respectively.
Book value per share table: | December 31, | September 30, | June 30, | December 31, | ||||||||
2019 | 2019 | 2019 | 2018 | |||||||||
Book value per share | $ | 8.52 | $ | 8.52 | $ | 8.07 | $ | 7.22 | ||||
Loan quality table: | December 31, | September 30, | June 30, | December 31, | ||||||||
2019 | 2019 | 2019 | 2018 | |||||||||
Nonperforming loans to total loans | 0.50% | 0.55% | 0.57% | 0.36% | ||||||||
Nonperforming assets to total assets | 0.16% | 0.19% | 0.19% | 0.12% | ||||||||
Allowance for loan and lease losses to total loans | 0.56% | 0.62% | 0.64% | 0.58% | ||||||||
Nonaccrual loans | $ | 5,796 | $ | 6,420 | $ | 6,456 | $ | 4,516 | ||||
Loans 90 days past due still accruing interest | 3,264 | 2,788 | 2,373 | 954 | ||||||||
Other real estate owned | - | - | - | - | ||||||||
Total nonperforming assets | $ | 9,060 | $ | 9,208 | $ | 8,829 | $ | 5,470 | ||||
Three months ended | ||||||||||||
December 31, | September 30, | June 30, | December 31, | |||||||||
2019 | 2019 | 2019 | 2018 | |||||||||
(in thousands) | ||||||||||||
Gross dollar volume (GDV) (2): | ||||||||||||
Prepaid and debit card GDV | $ | 19,104,327 | $ | 17,264,890 | $ | 16,611,551 | $ | 13,526,647 | ||||
(2) Gross dollar volume represents the total dollar amount spent on prepaid and debit cards issued by The Bancorp Bank. | ||||||||||||
Business line quarterly summary: | ||||||||||||||
Quarter ended December 31, 2019 | ||||||||||||||
(dollars in millions) | ||||||||||||||
Balances | Non-interest income | |||||||||||||
% Growth | % Growth | |||||||||||||
Major business lines |
Average
| Balances* |
Year
|
Linked
|
Current
|
Year
| ||||||||
Loans | ||||||||||||||
Institutional banking ** | 3.7% | $ | 1,024 | 30% | 45% | na | na | |||||||
SBA | 5.7% | 572 | 22% | 9% | na | na | ||||||||
Leasing | 6.5% | 434 | 10% | 21% | $ | 0.9 | nm | |||||||
Commercial real estate securitization | 5.5% | 960 | nm | nm | nm | nm | ||||||||
Weighted average yield | 5.1% | $ | 2,990 | |||||||||||
Deposits | ||||||||||||||
Payment solutions (prepaid and debit card issuance) *** | 0.7% | $ | 2,696 | 22% | nm | $ | 17.0 | 23% | ||||||
Card payment and ACH processing | 0.7% | 735 | -27% | nm | 2.0 | nm | ||||||||
* Loan categories are based on period end balance and deposits are based on average quarterly balances. | ||
** Comprised of Securities Backed Lines of Credit (SBLOC), collateralized by marketable securities and Insurance Backed Lines of Credit (IBLOC), collateralized by the cash surrender value of insurance policies. | ||
*** 2018 had been adjusted for an atypical $739,000 write-down to revenue on one relationship |
| Analysis of Walnut Street* marks: | ||||||
Loan activity | Marks | |||||
(dollars in millions) | ||||||
Original Walnut Street loan balance, December 31, 2014 | $ | 267 | ||||
Marks through December 31, 2014 sale date | (58) | $ | (58) | |||
Sales price of Walnut Street | 209 | |||||
Equity investment from independent investor | (16) | |||||
December 31, 2014 Bancorp book value | 193 | |||||
Additional marks 2015 - 2018 | (46) | (46) | ||||
2019 Marks | - | |||||
Payments received | (108) | |||||
December 31, 2019 Bancorp book value ** | $ | 39 | ||||
Total marks | ($ | 104) | ||||
Divided by: | ||||||
Original Walnut Street loan balance | $ | 267 | ||||
Percentage of total mark to original balance | 39% | |||||
* Walnut Street is the investment in unconsolidated entity on the balance sheet which reflects the Bank's investment in a securitization of certain loans from the bank’s discontinued loan portfolio. | ||||||
** Approximately 26% of expected principal recoveries were from loans and properties pending liquidation or other resolution as of December 31, 2019. | ||||||
Walnut Street portfolio composition as of December 31, 2019 | ||||||
Collateral type | % of Portfolio | |||||
Commercial real estate non-owner occupied | ||||||
Retail | 51.3% | |||||
Office | - | |||||
Other | 13.3% | |||||
Construction and land | 23.6% | |||||
First mortgage residential owner occupied | 8.6% | |||||
First mortgage residential non-owner occupied | 3.2% | |||||
Total | 100.0% | |||||
Cumulative analysis of marks on discontinued commercial loan principal as of December 31, 2019 | ||||||||
Discontinued | Cumulative | % to original | ||||||
loan principal | marks | principal | ||||||
(dollars in millions) | ||||||||
Commercial loan discontinued principal before marks | $ | 75 | ||||||
Florida mall held in discontinued other real estate owned | 42 | $ | (27) | |||||
Previous mark charges | 10 | (10) | ||||||
Mark at December 31, 2019 | (4) | |||||||
Total | $ | 127 | $ | (41) | 32% | |||
Analysis of discontinued commercial loan relationships as of December 31, 2019 | ||||||||||||||||||
Performing | Nonperforming | Total | Performing | Nonperforming | Total | |||||||||||||
loan principal | loan principal | loan principal | loan marks | loan marks | marks | |||||||||||||
(in millions) | ||||||||||||||||||
5 loan relationships > $6 million | $ | 46 | $ | - | $ | 46 | $ | (3) | $ | - | $ | (3) | ||||||
Loan relationships < $6 million | 18 | 7 | 25 | (1) | - | (1) | ||||||||||||
$ | 64 | $ | 7 | $ | 71 | $ | (4) | $ | - | $ | (4) | |||||||
Quarterly activity for discontinued commercial loan principal | |||
Commercial | |||
loan principal | |||
(in millions) | |||
Commercial loan discontinued principal September 30, 2019 before marks | $ | 94 | |
Quarterly paydowns and other reductions | (19) | ||
Commercial loan discontinued principal December 31, 2019 before marks | $ | 75 | |
Marks December 31, 2019 | (4) | ||
Net commercial loan exposure December 31, 2019 | $ | 71 | |
Residential mortgages | 45 | ||
Net loans | $ | 116 | |
Florida Mall in other real estate owned | 15 | ||
12 Properties in other real estate owned | 9 | ||
Total discontinued assets at December 31, 2019 | $ | 140 | |
Discontinued commercial loan composition as of December 31, 2019 | ||||||||
Collateral type |
Unpaid
|
Mark
|
Mark as %
| |||||
(dollars in millions) | ||||||||
Commercial real estate - non-owner occupied: | ||||||||
Retail | $ | 4 | $ | (0.6) | 15% | |||
Office | 3 | - | - | |||||
Other | 24 | (0.3) | 1% | |||||
Construction and land | 12 | - | 0% | |||||
Commercial non-real estate and industrial | 3 | - | 0% | |||||
1 to 4 family construction | 11 | (2.5) | 23% | |||||
First mortgage residential non-owner occupied | 9 | (0.2) | 2% | |||||
Commercial real estate owner occupied: | ||||||||
Retail | 7 | - | - | |||||
Office | - | - | - | |||||
Other | - | - | - | |||||
Residential junior mortgage | 1 | - | - | |||||
Other | 1 | - | - | |||||
Total | $ | 75 | ||||||
Less: mark | (4) | |||||||
Net commercial loan exposure December 31, 2019 | $ | 71 | $ | (3.6) | 5% | |||
View source version on businesswire.com: https://www.businesswire.com/news/home/20200130005794/en/
Contacts:
Andres Viroslav
Director, Investor Relations
215-861-7990
aviroslav@thebancorp.com
