Attached files
| file | filename |
|---|---|
| 8-K - THE BANCORP, INC. FORM 8-K - Bancorp, Inc. | bancorp8k.htm |
Exhibit 99.1
The Bancorp, Inc. Reports Second Quarter 2018 Financial Results
Wilmington, DE – July 26, 2018 – The Bancorp, Inc. ("The Bancorp") (NASDAQ: TBBK), a financial holding company, today reported financial results for the second quarter of 2018.
Highlights
| · |
Pretax income from continuing operations increased 9% to $8.4 million for the quarter ended June 30, 2018 compared to $7.7 million for the quarter ended June 30, 2017.
|
| · |
Net interest income increased 9% to $29.5 million for the quarter ended June 30, 2018, compared to $27.2 million for the quarter ended June 30, 2017.
|
| · |
Interest income on security backed lines of credit (“SBLOC”) loans increased 43% to $7.4 million for the quarter ended June 30, 2018, compared to $5.2 million for the quarter ended June 30, 2017.
|
| · |
Net interest margin increased to 3.11% for the quarter ended June 30, 2018, compared to 3.10% for the quarter ended June 30, 2017.
|
| · |
Total prepaid and other payments revenue for the quarter ended June 30, 2018 increased to $16.1 million, or 9%, compared to the quarter ended June 30, 2017. Of that total, prepaid fees for the quarter ended June 30, 2018 increased to $14.1 million, or 6%, and card payment and ACH processing fees increased to $2.0 million, or 34% compared to the quarter ended June 30, 2017, respectively.
|
| · |
Loans increased 10% to $1.51 billion at June 30, 2018, compared to $1.37 billion at June 30, 2017.
|
| · |
SBLOC loans increased 11% to $795.8 million at June 30, 2018, compared to $718.7 million at June 30, 2017.
|
| · |
Small Business Administration (“SBA”) loans increased 17% to $439.5 million at June 30, 2018, compared to $376.6 million at June 30, 2017.
|
| · |
Direct lease financing increased 5% to $389.4 million at June 30, 2018, compared to $370.6 million at June 30, 2017.
|
| · |
The rate on $3.96 billion of average deposits and interest-bearing liabilities in the second quarter of 2018 was 0.59% with a rate of 0.8% for $2.14 billion of average prepaid card deposits.
|
| · |
Consolidated leverage ratio was 8.06% at June 30, 2018. The Bancorp and its subsidiary, The Bancorp Bank, remain well capitalized.
|
| · |
Book value per common share at June 30, 2018 was $5.91 per share.
|
Damian Kozlowski, The Bancorp’s Chief Executive Officer, said, “The sale of our Safe Harbor IRAs in July 2018 concludes our divestiture of non-core assets started when our new business plan was approved by our board of directors in the 3rd quarter of 2016. Like our European and HSA franchises, our safe harbor business was sub scale, carried regulatory risks and was unlikely to deliver longer-term growth or innovation to our business model. Therefore, its sale for $65 million or over 10 times 2017 fees will allow our company to likely hit long-term capital targets in the 3rd quarter of this year and provide capital and management focus for growth of our core strategic businesses.”
The Bancorp reported net income of $6.1 million, or $0.11 earnings per diluted share, for the quarter ended June 30, 2018, compared to net income of $18.9 million, or $0.34 income per diluted share, for the quarter ended June 30, 2017. Net income for 2017 included a $9.9 million net tax benefit resulting from the reversal of deferred tax valuation allowances which more than offset the impact of statutory tax rates. Pretax income from continuing operations for second quarter 2018 increased to $8.4 million, or approximately 9% higher than the $7.7 million reported for second quarter 2017. Income from continuing operations does not include any income which may result from the reinvestment of the proceeds from sales or repayment of the remaining assets in The Bancorp’s discontinued operations. Tier one capital to assets, tier one capital to risk-weighted assets, total capital to risk-weighted assets and common equity-tier 1 ratios were 8.06%, 18.60%, 19.02% and 18.60%, respectively, compared to well capitalized minimums of 5%, 8%, 10% and 6.5%, respectively.
1
Conference Call Webcast
You may access the LIVE webcast of The Bancorp's Quarterly Earnings Conference Call at 8:00 AM ET Friday, July 27, 2018 by clicking on the webcast link on The Bancorp's homepage at www.thebancorp.com. Or, you may dial 844.775.2543, access code 1095334. You may listen to the replay of the webcast following the live call on The Bancorp's investor relations website or telephonically until Friday, August 3, 2018 by dialing 855.859.2056, access code 1095334.
About The Bancorp
The Bancorp, Inc. (NASDAQ: TBBK) is dedicated to serving the unique needs of non-bank financial service companies, ranging from entrepreneurial start-ups to those on the Fortune 500. The company’s only subsidiary, The Bancorp Bank (Member FDIC, Equal Housing Lender), has been repeatedly recognized in the payments industry as the Top Issuer of Prepaid Cards (US), a top merchant sponsor bank and a top ACH originator. Specialized lending distinctions include National Preferred SBA Lender, a leading provider of securities-backed lines of credit, and one of the few bank-owned commercial vehicle leasing groups in the nation. For more information please visit www.thebancorp.com.
Forward-Looking Statements
Statements in this earnings release regarding The Bancorp’s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. These statements may be identified by the use of forward-looking terminology, including but not limited to the words “may,” “believe,” “will,” “expect,” “look,” “anticipate,” “estimate,” “continue,” or similar words. For further discussion of the risks and uncertainties to which these forward-looking statements may be subject, see The Bancorp’s filings with the SEC, 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 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 presentation, except as may be required under applicable law.
The Bancorp, Inc. Contact
Andres Viroslav
215-861-7990
aviroslav@thebancorp.com
2
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The Bancorp, Inc.
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Financial highlights
|
||||||||||||||||
|
(unaudited)
|
||||||||||||||||
|
Three months ended
|
Six months ended
|
|||||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||||
|
Condensed income statement
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
|
(dollars in thousands except per share data)
|
||||||||||||||||
|
Net interest income
|
$
|
29,534
|
$
|
27,215
|
$
|
59,608
|
$
|
52,092
|
||||||||
|
Provision for loan and lease losses
|
900
|
350
|
1,600
|
1,350
|
||||||||||||
|
Non-interest income
|
||||||||||||||||
|
Service fees on deposit accounts
|
1,646
|
1,520
|
3,222
|
3,195
|
||||||||||||
|
Card payment and ACH processing fees
|
2,014
|
1,504
|
3,706
|
3,032
|
||||||||||||
|
Prepaid card fees
|
14,073
|
13,234
|
28,355
|
26,781
|
||||||||||||
|
Gain (loss) on sale of loans
|
(454
|
)
|
758
|
11,275
|
6,141
|
|||||||||||
|
Gain on sale of investment securities
|
-
|
586
|
26
|
1,089
|
||||||||||||
|
Change in value of investment in unconsolidated entity
|
(1,732
|
)
|
3
|
(2,903
|
)
|
(16
|
)
|
|||||||||
|
Leasing income
|
1,108
|
832
|
1,595
|
1,383
|
||||||||||||
|
Affinity fees
|
85
|
149
|
187
|
1,170
|
||||||||||||
|
Gain on sale of health savings accounts
|
-
|
2,538
|
-
|
2,538
|
||||||||||||
|
Loss from sale of European prepaid card operations
|
-
|
(3,437
|
)
|
-
|
(3,437
|
)
|
||||||||||
|
Other non-interest income
|
300
|
486
|
672
|
516
|
||||||||||||
|
Total non-interest income
|
17,040
|
18,173
|
46,135
|
42,392
|
||||||||||||
|
Non-interest expense
|
||||||||||||||||
|
Salaries and employee benefits
|
18,897
|
18,108
|
39,970
|
36,114
|
||||||||||||
|
Data processing expense
|
1,356
|
2,641
|
3,361
|
6,121
|
||||||||||||
|
Legal expense
|
1,770
|
1,427
|
4,201
|
3,165
|
||||||||||||
|
FDIC Insurance
|
2,929
|
3,458
|
5,148
|
5,523
|
||||||||||||
|
Software
|
2,995
|
3,012
|
6,286
|
6,240
|
||||||||||||
|
Losses and write downs on other real estate owned
|
-
|
19
|
45
|
19
|
||||||||||||
|
Civil money penalty
|
-
|
-
|
(290
|
)
|
-
|
|||||||||||
|
Lease termination expense
|
395
|
-
|
395
|
-
|
||||||||||||
|
Other non-interest expense
|
8,968
|
8,698
|
17,243
|
17,964
|
||||||||||||
|
Total non-interest expense
|
37,310
|
37,363
|
76,359
|
75,146
|
||||||||||||
|
Income from continuing operations before income taxes
|
8,364
|
7,675
|
27,784
|
17,988
|
||||||||||||
|
Income tax expense (benefit)
|
2,209
|
(9,923
|
)
|
7,608
|
(5,912
|
)
|
||||||||||
|
Net income from continuing operations
|
6,155
|
17,598
|
20,176
|
23,900
|
||||||||||||
|
Discontinued operations
|
||||||||||||||||
|
Income (loss) from discontinued operations before income taxes
|
(50
|
)
|
1,992
|
106
|
4,659
|
|||||||||||
|
Income tax expense (benefit)
|
(36
|
)
|
726
|
1
|
1,732
|
|||||||||||
|
Net income (loss) from discontinued operations, net of tax
|
(14
|
)
|
1,266
|
105
|
2,927
|
|||||||||||
|
Net income available to common shareholders
|
$
|
6,141
|
$
|
18,864
|
$
|
20,281
|
$
|
26,827
|
||||||||
|
Net income per share from continuing operations - basic
|
$
|
0.11
|
$
|
0.32
|
$
|
0.36
|
$
|
0.43
|
||||||||
|
Net income per share from discontinued operations - basic
|
$
|
-
|
$
|
0.02
|
$
|
-
|
$
|
0.05
|
||||||||
|
Net income per share - basic
|
$
|
0.11
|
$
|
0.34
|
$
|
0.36
|
$
|
0.48
|
||||||||
|
Net income per share from continuing operations - diluted
|
$
|
0.11
|
$
|
0.32
|
$
|
0.36
|
$
|
0.43
|
||||||||
|
Net income per share from discontinued operations - diluted
|
$
|
-
|
$
|
0.02
|
$
|
-
|
$
|
0.05
|
||||||||
|
Net income per share - diluted
|
$
|
0.11
|
$
|
0.34
|
$
|
0.36
|
$
|
0.48
|
||||||||
|
Weighted average shares - basic
|
56,340,816
|
55,689,439
|
56,241,873
|
55,612,288
|
||||||||||||
|
Weighted average shares - diluted
|
57,141,219
|
56,030,035
|
57,083,297
|
55,889,985
|
||||||||||||
3
|
Balance sheet
|
June 30,
|
March 31,
|
December 31,
|
June 30,
|
||||||||||||
|
2018
|
2018
|
2017
|
2017
|
|||||||||||||
|
(dollars in thousands)
|
||||||||||||||||
|
Assets:
|
||||||||||||||||
|
Cash and cash equivalents
|
||||||||||||||||
|
Cash and due from banks
|
$
|
3,052
|
$
|
1,999
|
$
|
3,152
|
$
|
6,458
|
||||||||
|
Interest earning deposits at Federal Reserve Bank
|
373,782
|
508,847
|
841,471
|
475,387
|
||||||||||||
|
Securities sold under agreements to resell
|
64,216
|
64,312
|
64,312
|
65,076
|
||||||||||||
|
Total cash and cash equivalents
|
441,050
|
575,158
|
908,935
|
546,921
|
||||||||||||
|
Investment securities, available-for-sale, at fair value
|
1,305,494
|
1,381,020
|
1,294,484
|
1,149,116
|
||||||||||||
|
Investment securities, held-to-maturity
|
86,354
|
86,370
|
86,380
|
93,419
|
||||||||||||
|
Loans held for sale, at fair value
|
447,997
|
349,806
|
503,316
|
542,819
|
||||||||||||
|
Loans, net of deferred fees and costs
|
1,506,812
|
1,463,064
|
1,392,228
|
1,370,263
|
||||||||||||
|
Allowance for loan and lease losses
|
(8,014
|
)
|
(7,285
|
)
|
(7,096
|
)
|
(7,353
|
)
|
||||||||
|
Loans, net
|
1,498,798
|
1,455,779
|
1,385,132
|
1,362,910
|
||||||||||||
|
Federal Home Loan Bank & Atlantic Community Bancshares stock
|
1,113
|
991
|
991
|
6,211
|
||||||||||||
|
Premises and equipment, net
|
18,275
|
19,052
|
20,051
|
22,004
|
||||||||||||
|
Accrued interest receivable
|
11,810
|
11,778
|
10,900
|
10,880
|
||||||||||||
|
Intangible assets, net
|
4,612
|
4,995
|
5,377
|
5,515
|
||||||||||||
|
Other real estate owned
|
405
|
405
|
450
|
-
|
||||||||||||
|
Deferred tax asset, net
|
39,779
|
38,139
|
34,802
|
53,226
|
||||||||||||
|
Investment in unconsolidated entity
|
67,994
|
70,016
|
74,473
|
120,862
|
||||||||||||
|
Assets held for sale from discontinued operations
|
241,694
|
289,038
|
304,313
|
336,246
|
||||||||||||
|
Other assets
|
56,499
|
86,553
|
78,543
|
53,888
|
||||||||||||
|
Total assets
|
$
|
4,221,874
|
$
|
4,369,100
|
$
|
4,708,147
|
$
|
4,304,017
|
||||||||
|
Liabilities:
|
||||||||||||||||
|
Deposits
|
||||||||||||||||
|
Demand and interest checking
|
$
|
3,287,682
|
$
|
3,461,881
|
$
|
3,806,965
|
$
|
3,437,482
|
||||||||
|
Savings and money market
|
511,598
|
493,288
|
453,877
|
438,602
|
||||||||||||
|
Total deposits
|
3,799,280
|
3,955,169
|
4,260,842
|
3,876,084
|
||||||||||||
|
Securities sold under agreements to repurchase
|
161
|
182
|
217
|
273
|
||||||||||||
|
Subordinated debenture
|
13,401
|
13,401
|
13,401
|
13,401
|
||||||||||||
|
Long-term borrowings
|
42,000
|
42,157
|
42,323
|
42,680
|
||||||||||||
|
Other liabilities
|
34,485
|
28,299
|
67,215
|
40,560
|
||||||||||||
|
Total liabilities
|
$
|
3,889,327
|
$
|
4,039,208
|
$
|
4,383,998
|
$
|
3,972,998
|
||||||||
|
Shareholders' equity:
|
||||||||||||||||
|
Common stock - authorized, 75,000,000 shares of $1.00 par value; 56,410,525 and 55,757,559 shares issued at June 30, 2018 and 2017, respectively
|
56,411
|
56,307
|
55,861
|
55,858
|
||||||||||||
|
Treasury stock (100,000 shares)
|
(866
|
)
|
(866
|
)
|
(866
|
)
|
(866
|
)
|
||||||||
|
Additional paid-in capital
|
364,460
|
363,605
|
363,196
|
361,478
|
||||||||||||
|
Accumulated deficit
|
(69,213
|
)
|
(75,345
|
)
|
(89,485
|
)
|
(85,114
|
)
|
||||||||
|
Accumulated other comprehensive loss
|
(18,245
|
)
|
(13,809
|
)
|
(4,557
|
)
|
(337
|
)
|
||||||||
|
Total shareholders' equity
|
332,547
|
329,892
|
324,149
|
331,019
|
||||||||||||
|
Total liabilities and shareholders' equity
|
$
|
4,221,874
|
$
|
4,369,100
|
$
|
4,708,147
|
$
|
4,304,017
|
||||||||
4
|
Average balance sheet and net interest income
|
Three months ended June 30, 2018
|
Three months ended June 30, 2017
|
||||||||||||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||||
|
Average
|
Average
|
Average
|
Average
|
|||||||||||||||||||||
|
Assets:
|
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
||||||||||||||||||
|
Interest earning assets:
|
||||||||||||||||||||||||
|
Loans net of unearned fees and costs **
|
$
|
1,828,398
|
$
|
21,704
|
4.75
|
%
|
$
|
1,770,226
|
$
|
19,748
|
4.46
|
%
|
||||||||||||
|
Leases - bank qualified*
|
20,214
|
337
|
6.67
|
%
|
21,539
|
415
|
7.71
|
%
|
||||||||||||||||
|
Investment securities-taxable
|
1,435,598
|
10,770
|
3.00
|
%
|
1,249,890
|
9,138
|
2.92
|
%
|
||||||||||||||||
|
Investment securities-nontaxable*
|
8,702
|
63
|
2.90
|
%
|
14,632
|
107
|
2.93
|
%
|
||||||||||||||||
|
Interest earning deposits at Federal Reserve Bank
|
458,695
|
2,095
|
1.83
|
%
|
480,417
|
1,255
|
1.04
|
%
|
||||||||||||||||
|
Federal funds sold and securities purchased under agreement to resell
|
64,300
|
475
|
2.95
|
%
|
65,355
|
333
|
2.04
|
%
|
||||||||||||||||
|
Net interest earning assets
|
3,815,907
|
35,444
|
3.72
|
%
|
3,602,059
|
30,996
|
3.44
|
%
|
||||||||||||||||
|
Allowance for loan and lease losses
|
(7,168
|
)
|
(7,190
|
)
|
||||||||||||||||||||
|
Assets held for sale from discontinued operations
|
281,476
|
2,066
|
2.94
|
%
|
348,452
|
3,135
|
3.60
|
%
|
||||||||||||||||
|
Other assets
|
212,397
|
274,335
|
||||||||||||||||||||||
|
$
|
4,302,612
|
$
|
4,217,656
|
|||||||||||||||||||||
|
Liabilities and Shareholders' Equity:
|
||||||||||||||||||||||||
|
Deposits:
|
||||||||||||||||||||||||
|
Demand and interest checking
|
$
|
3,439,265
|
$
|
5,022
|
0.58
|
%
|
$
|
3,437,845
|
$
|
2,912
|
0.34
|
%
|
||||||||||||
|
Savings and money market
|
502,783
|
617
|
0.49
|
%
|
434,792
|
520
|
0.48
|
%
|
||||||||||||||||
|
Total deposits
|
3,942,048
|
5,639
|
0.57
|
%
|
3,872,637
|
3,432
|
0.35
|
%
|
||||||||||||||||
|
Short-term borrowings
|
1,648
|
9
|
2.18
|
%
|
6,516
|
22
|
1.35
|
%
|
||||||||||||||||
|
Securities sold under agreements to repurchase
|
171
|
-
|
0.00
|
%
|
273
|
-
|
0.00
|
%
|
||||||||||||||||
|
Subordinated debentures
|
13,401
|
178
|
5.31
|
%
|
13,401
|
144
|
4.30
|
%
|
||||||||||||||||
|
Total deposits and liabilities
|
3,957,268
|
5,826
|
0.59
|
%
|
3,892,827
|
3,598
|
0.37
|
%
|
||||||||||||||||
|
Other liabilities
|
14,124
|
4,434
|
||||||||||||||||||||||
|
Total liabilities
|
3,971,392
|
3,897,261
|
||||||||||||||||||||||
|
Shareholders' equity
|
331,220
|
320,395
|
||||||||||||||||||||||
|
$
|
4,302,612
|
$
|
4,217,656
|
|||||||||||||||||||||
|
Net interest income on tax equivalent basis*
|
$
|
31,684
|
$
|
30,533
|
||||||||||||||||||||
|
Tax equivalent adjustment
|
84
|
183
|
||||||||||||||||||||||
|
Net interest income
|
$
|
31,600
|
$
|
30,350
|
||||||||||||||||||||
|
Net interest margin *
|
3.11
|
%
|
3.10
|
%
|
||||||||||||||||||||
|
|
||||||||||||||||||||||||
|
* Full taxable equivalent basis, using a statutory rate of 21% for 2018 and 35% for 2017, respectively.
|
||||||||||||||||||||||||
|
** Includes loans held for sale.
|
||||||||||||||||||||||||
5
|
Average balance sheet and net interest income
|
Six months ended June 30, 2018
|
Six months ended June 30, 2017
|
||||||||||||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||||
|
Average
|
Average
|
Average
|
Average
|
|||||||||||||||||||||
|
Assets:
|
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
||||||||||||||||||
|
Interest earning assets:
|
||||||||||||||||||||||||
|
Loans net of unearned fees and costs **
|
$
|
1,887,511
|
$
|
44,743
|
4.74
|
%
|
$
|
1,700,508
|
$
|
37,119
|
4.37
|
%
|
||||||||||||
|
Leases - bank qualified*
|
20,623
|
671
|
6.51
|
%
|
21,361
|
811
|
7.59
|
%
|
||||||||||||||||
|
Investment securities-taxable
|
1,405,749
|
20,469
|
2.91
|
%
|
1,287,360
|
18,143
|
2.82
|
%
|
||||||||||||||||
|
Investment securities-nontaxable*
|
9,294
|
138
|
2.97
|
%
|
15,025
|
218
|
2.90
|
%
|
||||||||||||||||
|
Interest earning deposits at Federal Reserve Bank
|
480,343
|
3,927
|
1.64
|
%
|
616,345
|
2,771
|
0.90
|
%
|
||||||||||||||||
|
Federal funds sold and securities purchased under agreement to resell
|
64,258
|
889
|
2.77
|
%
|
57,635
|
560
|
1.94
|
%
|
||||||||||||||||
|
Net interest earning assets
|
3,867,778
|
70,837
|
3.66
|
%
|
3,698,234
|
59,622
|
3.22
|
%
|
||||||||||||||||
|
Allowance for loan and lease losses
|
(7,076
|
)
|
(6,708
|
)
|
||||||||||||||||||||
|
Assets held for sale from discontinued operations
|
288,050
|
4,593
|
3.19
|
%
|
340,900
|
6,496
|
3.81
|
%
|
||||||||||||||||
|
Other assets
|
199,981
|
285,428
|
||||||||||||||||||||||
|
$
|
4,348,733
|
$
|
4,317,854
|
|||||||||||||||||||||
|
Liabilities and Shareholders' Equity:
|
||||||||||||||||||||||||
|
Deposits:
|
||||||||||||||||||||||||
|
Demand and interest checking
|
$
|
3,487,205
|
$
|
9,323
|
0.53
|
%
|
$
|
3,547,820
|
$
|
5,699
|
0.32
|
%
|
||||||||||||
|
Savings and money market
|
495,124
|
1,285
|
0.52
|
%
|
432,267
|
1,167
|
0.54
|
%
|
||||||||||||||||
|
Total deposits
|
3,982,329
|
10,608
|
0.53
|
%
|
3,980,087
|
6,866
|
0.35
|
%
|
||||||||||||||||
|
Short-term borrowings
|
13,182
|
113
|
1.71
|
%
|
3,276
|
22
|
1.34
|
%
|
||||||||||||||||
|
Securities sold under agreements to repurchase
|
188
|
-
|
0.00
|
%
|
274
|
-
|
0.00
|
%
|
||||||||||||||||
|
Subordinated debentures
|
13,401
|
338
|
5.04
|
%
|
13,401
|
282
|
4.21
|
%
|
||||||||||||||||
|
Total deposits and liabilities
|
4,009,100
|
11,059
|
0.55
|
%
|
3,997,038
|
7,170
|
0.36
|
%
|
||||||||||||||||
|
Other liabilities
|
11,285
|
5,824
|
||||||||||||||||||||||
|
Total liabilities
|
4,020,385
|
4,002,862
|
||||||||||||||||||||||
|
Shareholders' equity
|
328,348
|
314,992
|
||||||||||||||||||||||
|
$
|
4,348,733
|
$
|
4,317,854
|
|||||||||||||||||||||
|
Net interest income on tax equivalent basis*
|
$
|
64,371
|
$
|
58,948
|
||||||||||||||||||||
|
Tax equivalent adjustment
|
170
|
360
|
||||||||||||||||||||||
|
Net interest income
|
$
|
64,201
|
$
|
58,588
|
||||||||||||||||||||
|
Net interest margin *
|
3.11
|
%
|
2.90
|
%
|
||||||||||||||||||||
|
|
||||||||||||||||||||||||
|
* Full taxable equivalent basis, using a statutory rate of 21% for 2018 and 35% for 2017.
|
||||||||||||||||||||||||
|
** Includes loans held for sale.
|
||||||||||||||||||||||||
6
|
Allowance for loan and lease losses:
|
Six months ended
|
Year ended
|
||||||||||||||
|
June 30,
|
June 30,
|
December 31,
|
||||||||||||||
|
2018
|
2017
|
2017
|
||||||||||||||
|
(dollars in thousands)
|
||||||||||||||||
|
Balance in the allowance for loan and lease losses at beginning of period (1)
|
$
|
7,096
|
$
|
6,332
|
$
|
6,332
|
||||||||||
|
Loans charged-off:
|
||||||||||||||||
|
SBA non-real estate
|
388
|
136
|
1,171
|
|||||||||||||
|
SBA commercial mortgage
|
157
|
-
|
-
|
|||||||||||||
|
Direct lease financing
|
244
|
202
|
926
|
|||||||||||||
|
Other consumer loans
|
15
|
16
|
110
|
|||||||||||||
|
Total
|
804
|
354
|
2,207
|
|||||||||||||
|
Recoveries:
|
||||||||||||||||
|
SBA non-real estate
|
47
|
2
|
18
|
|||||||||||||
|
SBA commercial mortgage
|
11
|
-
|
-
|
|||||||||||||
|
Direct lease financing
|
64
|
-
|
7
|
|||||||||||||
|
Other consumer loans
|
-
|
23
|
26
|
|||||||||||||
|
Total
|
122
|
25
|
51
|
|||||||||||||
|
Net charge-offs
|
682
|
329
|
2,156
|
|||||||||||||
|
Provision charged to operations
|
1,600
|
1,350
|
2,920
|
|||||||||||||
|
Balance in allowance for loan and lease losses at end of period
|
$
|
8,014
|
$
|
7,353
|
$
|
7,096
|
||||||||||
|
Net charge-offs/average loans
|
0.04
|
%
|
0.02
|
%
|
0.12
|
%
|
||||||||||
|
Net charge-offs/average loans (annualized)
|
0.07
|
%
|
0.04
|
%
|
0.12
|
%
|
||||||||||
|
Net charge-offs/average assets
|
0.02
|
%
|
0.01
|
%
|
0.05
|
%
|
||||||||||
|
(1) Excludes activity from assets held for sale from discontinued operations.
|
||||||||||||||||
|
Loan portfolio:
|
June 30,
|
March 31,
|
December 31,
|
June 30,
|
||||||||||||
|
2018
|
2018
|
2017
|
2017
|
|||||||||||||
|
(dollars in thousands)
|
||||||||||||||||
|
SBA non-real estate
|
$
|
75,141
|
$
|
75,225
|
$
|
70,379
|
$
|
73,476
|
||||||||
|
SBA commercial mortgage
|
156,268
|
149,227
|
142,086
|
126,224
|
||||||||||||
|
SBA construction
|
17,781
|
20,143
|
16,740
|
11,057
|
||||||||||||
|
Total SBA loans
|
249,190
|
244,595
|
229,205
|
210,757
|
||||||||||||
|
Direct lease financing
|
389,387
|
385,467
|
377,660
|
370,556
|
||||||||||||
|
SBLOC
|
795,823
|
759,369
|
730,462
|
718,707
|
||||||||||||
|
Other specialty lending
|
48,253
|
45,729
|
30,720
|
44,389
|
||||||||||||
|
Other consumer loans
|
13,174
|
17,416
|
14,133
|
15,858
|
||||||||||||
|
1,495,827
|
1,452,576
|
1,382,180
|
1,360,267
|
|||||||||||||
|
Unamortized loan fees and costs
|
10,985
|
10,488
|
10,048
|
9,996
|
||||||||||||
|
Total loans, net of deferred loan fees and costs
|
$
|
1,506,812
|
$
|
1,463,064
|
$
|
1,392,228
|
$
|
1,370,263
|
||||||||
|
Small business lending portfolio:
|
June 30,
|
March 31,
|
December 31,
|
June 30,
|
||||||||||||
|
2018
|
2018
|
2017
|
2017
|
|||||||||||||
|
(dollars in thousands)
|
||||||||||||||||
|
SBA loans, including deferred fees and costs
|
257,412
|
252,457
|
236,724
|
218,253
|
||||||||||||
|
SBA loans included in HFS
|
182,072
|
172,030
|
165,177
|
158,389
|
||||||||||||
|
Total SBA loans
|
$
|
439,484
|
$
|
424,487
|
$
|
401,901
|
$
|
376,642
|
||||||||
7
|
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 June 30, 2018
|
||||||||||||||||
|
The Bancorp, Inc.
|
8.06
|
%
|
18.60
|
%
|
19.02
|
%
|
18.60
|
%
|
||||||||
|
The Bancorp Bank
|
7.69
|
%
|
18.11
|
%
|
18.54
|
%
|
18.11
|
%
|
||||||||
|
"Well capitalized" institution (under FDIC regulations)
|
5.00
|
%
|
8.00
|
%
|
10.00
|
%
|
6.50
|
%
|
||||||||
|
As of December 31, 2017
|
||||||||||||||||
|
The Bancorp, Inc.
|
7.90
|
%
|
16.73
|
%
|
17.09
|
%
|
16.73
|
%
|
||||||||
|
The Bancorp Bank
|
7.61
|
%
|
16.23
|
%
|
16.59
|
%
|
16.23
|
%
|
||||||||
|
"Well capitalized" institution (under FDIC regulations)
|
5.00
|
%
|
8.00
|
%
|
10.00
|
%
|
6.50
|
%
|
||||||||
|
Three months ended
|
Six months ended
|
|||||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||||
|
2018
|
2017
|
2018
|
2017
|
|||||||||||||
|
Selected operating ratios:
|
||||||||||||||||
|
Return on average assets (1)
|
0.57
|
%
|
1.79
|
%
|
0.94
|
%
|
1.25
|
%
|
||||||||
|
Return on average equity (1)
|
7.44
|
%
|
23.62
|
%
|
12.46
|
%
|
17.17
|
%
|
||||||||
|
Net interest margin
|
3.11
|
%
|
3.10
|
%
|
3.11
|
%
|
2.90
|
%
|
||||||||
|
Book value per share
|
-
|
-
|
$
|
5.91
|
$
|
5.94
|
||||||||||
|
(1) Annualized
|
||||||||||||||||
|
June 30,
|
March 31,
|
December 31,
|
June 30,
|
|||||||||||||
|
2018
|
2018
|
2017
|
2017
|
|||||||||||||
|
Nonperforming loans to total loans (2)
|
0.42
|
%
|
0.42
|
%
|
0.30
|
%
|
0.41
|
%
|
||||||||
|
Nonperforming assets to total assets (2)
|
0.16
|
%
|
0.15
|
%
|
0.10
|
%
|
0.13
|
%
|
||||||||
|
Allowance for loan and lease losses to total loans
|
0.53
|
%
|
0.50
|
%
|
0.51
|
%
|
0.54
|
%
|
||||||||
|
Nonaccrual loans
|
$
|
4,915
|
$
|
3,516
|
$
|
3,996
|
$
|
5,115
|
||||||||
|
Other real estate owned
|
405
|
405
|
450
|
104
|
||||||||||||
|
Total nonperforming assets
|
$
|
5,320
|
$
|
3,921
|
$
|
4,446
|
$
|
5,219
|
||||||||
|
Loans 90 days past due still accruing interest
|
$
|
1,458
|
$
|
2,643
|
$
|
227
|
$
|
494
|
||||||||
|
(2) Nonperforming loan and asset ratios include nonaccrual loans and loans 90 days past due still accruing interest.
|
||||||||||||||||
|
Three months ended
|
||||||||||||||||
|
June 30,
|
March 31,
|
December 31,
|
June 30,
|
|||||||||||||
|
2018
|
2017
|
2017
|
2017
|
|||||||||||||
|
(in thousands)
|
||||||||||||||||
|
Gross dollar volume (GDV) (3):
|
||||||||||||||||
|
Prepaid card GDV
|
$
|
12,799,531
|
$
|
13,402,496
|
$
|
10,963,456
|
$
|
11,894,601
|
||||||||
|
(3) Gross dollar volume represents the total dollar amount spent on prepaid and debit cards issued by The Bancorp.
|
||||||||||||||||
8
|
Business line quarterly summary:
|
||||||||||||||||||||||||
|
Quarter ended June 30, 2018
|
||||||||||||||||||||||||
|
(dollars in millions)
|
||||||||||||||||||||||||
|
Balances
|
Non interest income
|
|||||||||||||||||||||||
|
% Growth
|
% Growth
|
|||||||||||||||||||||||
|
Major business lines
|
Average approximate
rates
|
Balances*
|
Year
over year
|
Linked
quarter
annualized
|
Current
quarter
|
Year
over year
|
||||||||||||||||||
|
Loans
|
||||||||||||||||||||||||
|
Institutional banking **
|
3.8
|
%
|
$
|
796
|
11
|
%
|
19
|
%
|
$
|
1.6
|
nm
|
|||||||||||||
|
SBA
|
5.2
|
%
|
439
|
17
|
%
|
14
|
%
|
-
|
-
|
|||||||||||||||
|
Leasing
|
6.1
|
%
|
389
|
5
|
%
|
4
|
%
|
1.1
|
33
|
%
|
||||||||||||||
|
Commercial real estate securitization ***
|
5.6
|
%
|
266
|
nm
|
nm
|
-
|
nm
|
|||||||||||||||||
|
Weighted average yield
|
4.8
|
%
|
$
|
1,890
|
||||||||||||||||||||
|
Deposits
|
||||||||||||||||||||||||
|
Payment solutions (primarily prepaid)
|
0.8
|
%
|
$
|
2,138
|
4
|
%
|
-4
|
%
|
$
|
14.1
|
6
|
%
|
||||||||||||
|
Card payment and ACH processing
|
0.4
|
%
|
905
|
3
|
%
|
1
|
%
|
2.0
|
34
|
%
|
||||||||||||||
|
* Loan categories based on period end balance and deposit categories based on average quarterly balances.
|
||||||||||||||||||||||||
|
** Includes SBLOC loans; includes safe harbor individual retirement fee income prior to sale.
|
||||||||||||||||||||||||
|
*** Balances reflect timing of related sales.
|
||||||||||||||||||||||||
9
|
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 - 2017
|
(42
|
)
|
(42
|
)
|
||||
|
2018 Marks
|
(3
|
)
|
(3
|
)
|
||||
|
Payments received
|
(80
|
)
|
||||||
|
June 30, 2018 Bancorp book value**
|
$
|
68
|
||||||
|
Total marks
|
$
|
(103
|
)
|
|||||
|
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 and is comprised of notes from the sale of certain loans from the discontinued loan portfolio to a third party.
|
||||||||
|
** Approximately 47% of expected principal recoveries were from loans and properties pending liquidation or other resolution as of June 30, 2018.
|
||||||||
|
Walnut Street portfolio composition as of June 30, 2018
|
||||||||
|
Collateral type
|
% of Portfolio
|
|||||||
|
Commercial real estate non-owner occupied
|
||||||||
|
Retail
|
47.4
|
%
|
||||||
|
Office
|
12.7
|
%
|
||||||
|
Other
|
4.4
|
%
|
||||||
|
Construction and land
|
23.4
|
%
|
||||||
|
Commercial non real estate and industrial
|
1.3
|
%
|
||||||
|
First mortgage residential owner occupied
|
5.6
|
%
|
||||||
|
First mortgage residential non-owner occupied
|
4.4
|
%
|
||||||
|
Other
|
0.8
|
%
|
||||||
|
Total
|
100.0
|
%
|
||||||
10
|
Cumulative analysis of marks on discontinued commercial loan principal as of June 30, 2018
|
|||||||||
|
Discontinued
|
Cumulative
|
% to original
|
|||||||
|
loan principal
|
marks
|
principal
|
|||||||
|
(dollars in millions)
|
|||||||||
|
Commercial loan discontinued principal before marks
|
$
|
167
|
$
|
-
|
|||||
|
Florida mall held in discontinued other real estate owned
|
42
|
27
|
|||||||
|
Previous mark charges
|
10
|
10
|
|||||||
|
Commercial loan mark at June 30, 2018
|
-
|
14
|
|||||||
|
Total
|
$
|
219
|
$
|
51
|
23%
|
||||
|
Analysis of discontinued commercial loan relationships as of June 30, 2018
|
||||||||||||||||||||||||
|
Performing
|
Nonperforming
|
Total
|
Performing
|
Nonperforming
|
Total
|
|||||||||||||||||||
|
loan principal
|
loan principal
|
loan principal
|
loan marks
|
loan marks
|
marks
|
|||||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||
|
7 loan relationships > $8 million
|
$
|
82
|
$
|
25
|
$
|
107
|
$
|
4
|
$
|
-
|
$
|
4
|
||||||||||||
|
Loan relationships < $8 million
|
37
|
9
|
46
|
4
|
6
|
10
|
||||||||||||||||||
|
$
|
119
|
$
|
34
|
$
|
153
|
$
|
8
|
$
|
6
|
$
|
14
|
|||||||||||||
|
Quarterly activity for discontinued commercial loan principal
|
||||
|
Commercial
|
||||
|
loan principal
|
||||
|
(in millions)
|
||||
|
Commercial loan discontinued principal March 31, 2018 before marks
|
$
|
210
|
||
|
Quarterly paydowns
|
(41
|
)
|
||
|
Quarterly charge downs
|
(2
|
)
|
||
|
Commercial loan discontinued principal June 30, 2018 before marks
|
$
|
167
|
||
|
Mark June 30, 2018
|
(14
|
)
|
||
|
Net commercial loan exposure June 30, 2018
|
$
|
153
|
||
|
Residential mortgages
|
57
|
|||
|
Net loans
|
$
|
210
|
||
|
Florida mall in other real estate owned
|
15
|
|||
|
Other 25 properties in other real estate owned
|
16
|
|||
|
Other assets related to discontinued operations
|
1
|
|||
|
Total discontinued assets at June 30, 2018
|
$
|
242
|
||
11
|
Discontinued commercial loan composition June 30, 2018
|
||||||||||||
|
Collateral type
|
Unpaid
principal
balance
|
Mark June 30, 2018
|
Mark as %
of portfolio
|
|||||||||
|
(dollars in millions)
|
||||||||||||
|
Commercial real estate - non-owner occupied:
|
||||||||||||
|
Retail
|
$
|
10
|
$
|
0.7
|
6
|
%
|
||||||
|
Office
|
8
|
0.7
|
9
|
%
|
||||||||
|
Other
|
41
|
0.6
|
1
|
%
|
||||||||
|
Construction and land
|
43
|
1.2
|
3
|
%
|
||||||||
|
Commercial non-real estate and industrial
|
12
|
1.6
|
13
|
%
|
||||||||
|
1 to 4 family construction
|
25
|
4.7
|
19
|
%
|
||||||||
|
First mortgage residential non-owner occupied
|
17
|
4.5
|
27
|
%
|
||||||||
|
Commercial real estate owner occupied:
|
||||||||||||
|
Retail
|
9
|
0.3
|
-
|
|||||||||
|
Office
|
-
|
-
|
-
|
|||||||||
|
Other
|
-
|
-
|
-
|
|||||||||
|
Residential junior mortgage
|
1
|
-
|
-
|
|||||||||
|
Other
|
1
|
-
|
-
|
|||||||||
|
Total
|
$
|
167
|
||||||||||
|
Less: mark
|
(14
|
)
|
||||||||||
|
Net commercial loan exposure June 30, 2018
|
$
|
153
|
$
|
14.3
|
9
|
%
|
||||||
12