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|
Pretax income from continuing operations increased to $83.2 million for the quarter ended September 30, 2018 compared to $12.2 million for the quarter ended September 30, 2017. The increase reflected a $65.0 million gain on the sale of the Company’s Individual Retirement Account portfolio.
|
|
Diluted earnings per share for the quarter ended September 30, 2018 were $1.07 and $0.23, excluding the tax effected impact of the gain on sale of the IRA portfolio. That compares to $0.13 diluted earnings per share for the quarter ended September 30, 2017.
|
|
Net interest income increased 10% to $30.6 million for the quarter ended September 30, 2018, compared to $27.9 million for the quarter ended September 30, 2017.
|
|
Interest income on security backed lines of credit (“SBLOC”) loans increased 30% to $7.7 million for the quarter ended September 30, 2018, compared to $5.9 million for the quarter ended September 30, 2017.
|
|
Net interest margin increased to 3.22% for the quarter ended September 30, 2018, compared to 3.11% for the quarter ended June 30, 2018.
|
|
Total payments revenue, consisting of prepaid card fees and card payment and Automated Clearing House processing fees for the quarter ended September 30, 2018 increased to $15.5 million, or 10%, compared to the quarter ended September 30, 2017. Of that total, prepaid fees for the quarter ended September 30, 2018 increased to $13.2 million, or 6%, and ACH, card and other processing fees increased to $2.3 million, or 46% compared to the quarter ended September 30, 2017, respectively.
|
|
Loans increased 9% to $1.50 billion at September 30, 2018, compared to $1.37 billion at September 30, 2017.
|
|
SBLOC loans increased 8% to $778.6 million at September 30, 2018, compared to $720.3 million at September 30, 2017.
|
|
Small Business Administration (“SBA”) loans increased 19% to $459.8 million at September 30, 2018, compared to $386.8 million at September 30, 2017.
|
|
Direct lease financing increased 7% to $396.0 million at September 30, 2018, compared to $368.7 million at September 30, 2017.
|
|
The rate on $3.88 billion of average deposits and interest-bearing liabilities in the third quarter of 2018 was 0.83% with a rate of 0.94% for $2.11 billion of average prepaid card deposits.
|
|
Non-interest expense decreased to $37.3 million for the quarter ended September 30, 2018, a 15% decrease from the third quarter of 2017. Year-to-date non-interest expense was $113.7 million compared to $119.0 million for year-to-date 2017, a decrease of 5%.
|
|
The benefit of the lower federal tax rate in 2018 compared to 2017 was increased in the third quarter, as the lower federal statutory rate of 21% (compared to 34% in 2017) was applied to the $65 million gain on sale of IRA portfolio.
|
|
Consolidated leverage ratio was 9.61% at September 30, 2018. The Bancorp and its subsidiary, The Bancorp Bank, remain well capitalized.
|
|
Book value per common share at September 30, 2018 was $6.95 per share.
|
The Bancorp, Inc.
|
||||||||||||||||
Financial highlights
|
||||||||||||||||
(unaudited)
|
||||||||||||||||
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
Condensed income statement
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
(dollars in thousands except per share data)
|
||||||||||||||||
Net interest income
|
$
|
30,632
|
$
|
27,901
|
$
|
90,240
|
$
|
79,993
|
||||||||
Provision for loan and lease losses
|
1,060
|
800
|
2,660
|
2,150
|
||||||||||||
Non-interest income
|
||||||||||||||||
Service fees on deposit accounts
|
402
|
1,700
|
3,624
|
4,895
|
||||||||||||
Card payment and ACH processing fees
|
2,281
|
1,564
|
6,275
|
4,596
|
||||||||||||
Prepaid card fees
|
13,204
|
12,491
|
41,559
|
39,272
|
||||||||||||
Gain on sale of loans
|
8,999
|
11,394
|
20,274
|
17,535
|
||||||||||||
Gain on sale of investment securities
|
15
|
506
|
41
|
1,595
|
||||||||||||
Change in value of investment in unconsolidated entity
|
(78
|
)
|
(4
|
)
|
(2,981
|
)
|
(20
|
)
|
||||||||
Leasing income
|
758
|
705
|
2,353
|
2,088
|
||||||||||||
Affinity fees
|
84
|
275
|
271
|
1,445
|
||||||||||||
Gain on sale of IRA portfolio
|
65,000
|
-
|
65,000
|
-
|
||||||||||||
Gain on sale of health savings accounts
|
-
|
-
|
-
|
2,538
|
||||||||||||
Loss from sale of European prepaid card operations
|
-
|
-
|
-
|
(3,437
|
)
|
|||||||||||
Other non-interest income
|
305
|
376
|
689
|
892
|
||||||||||||
Total non-interest income
|
90,970
|
29,007
|
137,105
|
71,399
|
||||||||||||
Non-interest expense
|
||||||||||||||||
Salaries and employee benefits
|
19,243
|
21,788
|
59,213
|
57,902
|
||||||||||||
Data processing expense
|
1,380
|
1,926
|
4,741
|
8,047
|
||||||||||||
Legal expense
|
1,610
|
2,744
|
5,811
|
5,909
|
||||||||||||
FDIC Insurance
|
2,241
|
2,063
|
7,389
|
7,586
|
||||||||||||
Software
|
3,593
|
3,088
|
9,879
|
9,328
|
||||||||||||
Losses and write downs on other real estate owned
|
-
|
-
|
45
|
19
|
||||||||||||
Civil money penalty
|
-
|
2,500
|
(290
|
)
|
2,500
|
|||||||||||
Lease termination expense
|
-
|
-
|
395
|
-
|
||||||||||||
Other non-interest expense
|
9,232
|
9,774
|
26,475
|
27,738
|
||||||||||||
Total non-interest expense
|
37,299
|
43,883
|
113,658
|
119,029
|
||||||||||||
Income from continuing operations before income taxes
|
83,243
|
12,225
|
111,027
|
30,213
|
||||||||||||
Income tax expense (benefit)
|
21,942
|
5,455
|
29,550
|
(457
|
)
|
|||||||||||
Net income from continuing operations
|
61,301
|
6,770
|
81,477
|
30,670
|
||||||||||||
Discontinued operations
|
||||||||||||||||
Income (loss) from discontinued operations before income taxes
|
(370
|
)
|
829
|
(264
|
)
|
5,488
|
||||||||||
Income tax expense (benefit)
|
(346
|
)
|
318
|
(345
|
)
|
2,050
|
||||||||||
Net income (loss) from discontinued operations, net of tax
|
(24
|
)
|
511
|
81
|
3,438
|
|||||||||||
Net income available to common shareholders
|
$
|
61,277
|
$
|
7,281
|
$
|
81,558
|
$
|
34,108
|
||||||||
Net income per share from continuing operations - basic
|
$
|
1.09
|
$
|
0.12
|
$
|
1.45
|
$
|
0.55
|
||||||||
Net income per share from discontinued operations - basic
|
$
|
-
|
$
|
0.01
|
$
|
-
|
$
|
0.06
|
||||||||
Net income per share - basic
|
$
|
1.09
|
$
|
0.13
|
$
|
1.45
|
$
|
0.61
|
||||||||
Net income per share from continuing operations - diluted
|
$
|
1.07
|
$
|
0.12
|
$
|
1.43
|
$
|
0.55
|
||||||||
Net income per share from discontinued operations - diluted
|
$
|
-
|
$
|
0.01
|
$
|
-
|
$
|
0.06
|
||||||||
Net income per share - diluted
|
$
|
1.07
|
$
|
0.13
|
$
|
1.43
|
$
|
0.61
|
||||||||
Weighted average shares - basic
|
56,442,222
|
55,758,433
|
56,309,390
|
55,661,538
|
||||||||||||
Weighted average shares - diluted
|
57,103,301
|
56,312,838
|
57,084,844
|
56,043,909
|
Balance sheet
|
September 30,
|
June 30,
|
December 31,
|
September 30,
|
||||||||||||
2018
|
2018
|
2017
|
2017
|
|||||||||||||
(dollars in thousands)
|
||||||||||||||||
Assets:
|
||||||||||||||||
Cash and cash equivalents
|
||||||||||||||||
Cash and due from banks
|
$
|
2,245
|
$
|
3,052
|
$
|
3,152
|
$
|
5,813
|
||||||||
Interest earning deposits at Federal Reserve Bank
|
710,816
|
373,782
|
841,471
|
328,023
|
||||||||||||
Securities sold under agreements to resell
|
64,518
|
64,216
|
64,312
|
65,095
|
||||||||||||
Total cash and cash equivalents
|
777,579
|
441,050
|
908,935
|
398,931
|
||||||||||||
Investment securities, available-for-sale, at fair value
|
1,274,417
|
1,305,494
|
1,294,484
|
1,196,956
|
||||||||||||
Investment securities, held-to-maturity
|
84,433
|
86,354
|
86,380
|
86,402
|
||||||||||||
Commercial loans held for sale, at fair value
|
308,470
|
447,997
|
503,316
|
380,272
|
||||||||||||
Loans, net of deferred fees and costs
|
1,496,773
|
1,506,812
|
1,392,228
|
1,374,060
|
||||||||||||
Allowance for loan and lease losses
|
(8,092
|
)
|
(8,014
|
)
|
(7,096
|
)
|
(7,283
|
)
|
||||||||
Loans, net
|
1,488,681
|
1,498,798
|
1,385,132
|
1,366,777
|
||||||||||||
Federal Home Loan Bank & Atlantic Community Bancshares stock
|
1,113
|
1,113
|
991
|
991
|
||||||||||||
Premises and equipment, net
|
17,686
|
18,275
|
20,051
|
21,087
|
||||||||||||
Accrued interest receivable
|
11,621
|
11,810
|
10,900
|
10,131
|
||||||||||||
Intangible assets, net
|
4,229
|
4,612
|
5,377
|
5,185
|
||||||||||||
Other real estate owned
|
405
|
405
|
450
|
-
|
||||||||||||
Deferred tax asset, net
|
40,991
|
39,779
|
34,802
|
53,017
|
||||||||||||
Investment in unconsolidated entity
|
64,212
|
67,994
|
74,473
|
107,711
|
||||||||||||
Assets held for sale from discontinued operations
|
226,026
|
241,694
|
304,313
|
314,994
|
||||||||||||
Other assets
|
60,337
|
56,499
|
78,543
|
51,164
|
||||||||||||
Total assets
|
$
|
4,360,200
|
$
|
4,221,874
|
$
|
4,708,147
|
$
|
3,993,618
|
||||||||
Liabilities:
|
||||||||||||||||
Deposits
|
||||||||||||||||
Demand and interest checking
|
$
|
3,540,605
|
$
|
3,287,682
|
$
|
3,806,965
|
$
|
3,113,212
|
||||||||
Savings and money market
|
317,453
|
511,598
|
453,877
|
452,183
|
||||||||||||
Total deposits
|
3,858,058
|
3,799,280
|
4,260,842
|
3,565,395
|
||||||||||||
Securities sold under agreements to repurchase
|
158
|
161
|
217
|
180
|
||||||||||||
Subordinated debenture
|
13,401
|
13,401
|
13,401
|
13,401
|
||||||||||||
Long-term borrowings
|
41,841
|
42,000
|
42,323
|
42,482
|
||||||||||||
Other liabilities
|
54,868
|
34,485
|
67,215
|
32,699
|
||||||||||||
Total liabilities
|
$
|
3,968,326
|
$
|
3,889,327
|
$
|
4,383,998
|
$
|
3,654,157
|
||||||||
Shareholders' equity:
|
||||||||||||||||
Common stock - authorized, 75,000,000 shares of $1.00 par value; 56,446,088 and 55,859,660 shares issued at September 30, 2018 and 2017, respectively
|
56,446
|
56,411
|
55,861
|
55,860
|
||||||||||||
Treasury stock (100,000 shares)
|
(866
|
)
|
(866
|
)
|
(866
|
)
|
(866
|
)
|
||||||||
Additional paid-in capital
|
365,749
|
364,460
|
363,196
|
362,340
|
||||||||||||
Accumulated deficit
|
(7,936
|
)
|
(69,213
|
)
|
(89,485
|
)
|
(77,850
|
)
|
||||||||
Accumulated other comprehensive loss
|
(21,519
|
)
|
(18,245
|
)
|
(4,557
|
)
|
(23
|
)
|
||||||||
Total shareholders' equity
|
391,874
|
332,547
|
324,149
|
339,461
|
||||||||||||
Total liabilities and shareholders' equity
|
$
|
4,360,200
|
$
|
4,221,874
|
$
|
4,708,147
|
$
|
3,993,618
|
Average balance sheet and net interest income
|
Three months ended September 30, 2018
|
Three months ended September 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 **
|
$
|
1,980,814
|
$
|
24,708
|
4.99
|
%
|
$
|
1,816,751
|
$
|
21,147
|
4.66
|
%
|
||||||||||||
Leases - bank qualified*
|
19,343
|
346
|
7.16
|
%
|
20,787
|
419
|
8.06
|
%
|
||||||||||||||||
Investment securities-taxable
|
1,362,529
|
10,906
|
3.20
|
%
|
1,235,615
|
8,847
|
2.86
|
%
|
||||||||||||||||
Investment securities-nontaxable*
|
8,145
|
63
|
3.09
|
%
|
13,238
|
133
|
4.02
|
%
|
||||||||||||||||
Interest earning deposits at Federal Reserve Bank
|
445,765
|
2,239
|
2.01
|
%
|
366,724
|
1,190
|
1.30
|
%
|
||||||||||||||||
Federal funds sold and securities purchased under agreement to resell
|
64,186
|
480
|
2.99
|
%
|
65,008
|
371
|
2.28
|
%
|
||||||||||||||||
Net interest earning assets
|
3,880,782
|
38,742
|
3.99
|
%
|
3,518,123
|
32,107
|
3.65
|
%
|
||||||||||||||||
Allowance for loan and lease losses
|
(7,971
|
)
|
(6,961
|
)
|
||||||||||||||||||||
Assets held for sale from discontinued operations
|
233,732
|
2,295
|
3.93
|
%
|
325,912
|
3,098
|
3.80
|
%
|
||||||||||||||||
Other assets
|
141,204
|
235,070
|
||||||||||||||||||||||
$
|
4,247,747
|
$
|
4,072,144
|
|||||||||||||||||||||
Liabilities and Shareholders' Equity:
|
||||||||||||||||||||||||
Deposits:
|
||||||||||||||||||||||||
Demand and interest checking
|
$
|
3,418,878
|
$
|
6,224
|
0.73
|
%
|
$
|
3,224,167
|
$
|
3,136
|
0.39
|
%
|
||||||||||||
Savings and money market
|
419,121
|
1,466
|
1.40
|
%
|
439,688
|
552
|
0.50
|
%
|
||||||||||||||||
Total deposits
|
3,837,999
|
7,690
|
0.80
|
%
|
3,663,855
|
3,688
|
0.40
|
%
|
||||||||||||||||
Short-term borrowings
|
25,602
|
148
|
2.31
|
%
|
51,413
|
175
|
1.36
|
%
|
||||||||||||||||
Securities sold under agreements to repurchase
|
160
|
-
|
0.00
|
%
|
189
|
-
|
0.00
|
%
|
||||||||||||||||
Subordinated debentures
|
13,401
|
186
|
5.55
|
%
|
13,401
|
150
|
4.48
|
%
|
||||||||||||||||
Total deposits and liabilities
|
3,877,162
|
8,024
|
0.83
|
%
|
3,728,858
|
4,013
|
0.43
|
%
|
||||||||||||||||
Other liabilities
|
8,374
|
8,046
|
||||||||||||||||||||||
Total liabilities
|
3,885,536
|
3,736,904
|
||||||||||||||||||||||
Shareholders' equity
|
362,211
|
335,240
|
||||||||||||||||||||||
$
|
4,247,747
|
$
|
4,072,144
|
|||||||||||||||||||||
Net interest income on tax equivalent basis*
|
$
|
33,013
|
$
|
31,192
|
||||||||||||||||||||
Tax equivalent adjustment
|
86
|
193
|
||||||||||||||||||||||
Net interest income
|
$
|
32,927
|
$
|
30,999
|
||||||||||||||||||||
Net interest margin *
|
3.22
|
%
|
3.26
|
%
|
||||||||||||||||||||
|
||||||||||||||||||||||||
* Full taxable equivalent basis, using a statutory rate of 21% for 2018 and 35% for 2017.
|
||||||||||||||||||||||||
** Includes loans held for sale.
|
Average balance sheet and net interest income
|
Nine months ended September 30, 2018
|
Nine months ended September 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 **
|
$
|
1,918,950
|
$
|
69,451
|
4.83
|
%
|
$
|
1,740,655
|
$
|
58,266
|
4.46
|
%
|
||||||||||||
Leases - bank qualified*
|
20,192
|
1,017
|
6.72
|
%
|
21,167
|
1,231
|
7.75
|
%
|
||||||||||||||||
Investment securities-taxable
|
1,391,175
|
31,375
|
3.01
|
%
|
1,269,922
|
26,990
|
2.83
|
%
|
||||||||||||||||
Investment securities-nontaxable*
|
8,907
|
201
|
3.01
|
%
|
14,423
|
351
|
3.24
|
%
|
||||||||||||||||
Interest earning deposits at Federal Reserve Bank
|
468,691
|
6,166
|
1.75
|
%
|
532,223
|
3,961
|
0.99
|
%
|
||||||||||||||||
Federal funds sold and securities purchased under agreement to resell
|
64,234
|
1,369
|
2.84
|
%
|
60,119
|
931
|
2.06
|
%
|
||||||||||||||||
Net interest earning assets
|
3,872,149
|
109,579
|
3.77
|
%
|
3,638,509
|
91,730
|
3.36
|
%
|
||||||||||||||||
Allowance for loan and lease losses
|
(7,378
|
)
|
(6,793
|
)
|
||||||||||||||||||||
Assets held for sale from discontinued operations
|
269,857
|
6,888
|
3.40
|
%
|
337,102
|
9,594
|
3.79
|
%
|
||||||||||||||||
Other assets
|
197,114
|
251,629
|
||||||||||||||||||||||
$
|
4,331,742
|
$
|
4,220,447
|
|||||||||||||||||||||
Liabilities and Shareholders' Equity:
|
||||||||||||||||||||||||
Deposits:
|
||||||||||||||||||||||||
Demand and interest checking
|
$
|
3,463,756
|
$
|
15,547
|
0.60
|
%
|
$
|
3,433,027
|
$
|
8,836
|
0.34
|
%
|
||||||||||||
Savings and money market
|
469,511
|
2,751
|
0.78
|
%
|
434,768
|
1,718
|
0.53
|
%
|
||||||||||||||||
Total deposits
|
3,933,267
|
18,298
|
0.62
|
%
|
3,867,795
|
10,554
|
0.36
|
%
|
||||||||||||||||
Short-term borrowings
|
17,367
|
261
|
2.00
|
%
|
19,498
|
197
|
1.35
|
%
|
||||||||||||||||
Securities sold under agreements to repurchase
|
178
|
-
|
0.00
|
%
|
245
|
-
|
0.00
|
%
|
||||||||||||||||
Subordinated debentures
|
13,401
|
524
|
5.21
|
%
|
13,401
|
432
|
4.30
|
%
|
||||||||||||||||
Total deposits and liabilities
|
3,964,213
|
19,083
|
0.64
|
%
|
3,900,939
|
11,183
|
0.38
|
%
|
||||||||||||||||
Other liabilities
|
9,517
|
431
|
||||||||||||||||||||||
Total liabilities
|
3,973,730
|
3,901,370
|
||||||||||||||||||||||
Shareholders' equity
|
358,012
|
319,077
|
||||||||||||||||||||||
$
|
4,331,742
|
$
|
4,220,447
|
|||||||||||||||||||||
Net interest income on tax equivalent basis*
|
$
|
97,384
|
$
|
90,141
|
||||||||||||||||||||
Tax equivalent adjustment
|
256
|
554
|
||||||||||||||||||||||
Net interest income
|
$
|
97,128
|
$
|
89,587
|
||||||||||||||||||||
Net interest margin *
|
3.15
|
%
|
3.02
|
%
|
||||||||||||||||||||
|
||||||||||||||||||||||||
* Full taxable equivalent basis, using a statutory rate of 21% for 2018 and 35% for 2017.
|
||||||||||||||||||||||||
** Includes loans held for sale.
|
Allowance for loan and lease losses:
|
Nine months ended
|
Year ended
|
||||||||||||||
September 30,
|
September 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
|
1,081
|
344
|
1,171
|
|||||||||||||
SBA commercial mortgage
|
157
|
-
|
-
|
|||||||||||||
Direct lease financing
|
531
|
779
|
926
|
|||||||||||||
Other consumer loans
|
19
|
113
|
110
|
|||||||||||||
Total
|
1,788
|
1,236
|
2,207
|
|||||||||||||
Recoveries:
|
||||||||||||||||
SBA non-real estate
|
46
|
12
|
18
|
|||||||||||||
SBA commercial mortgage
|
13
|
-
|
-
|
|||||||||||||
Direct lease financing
|
64
|
-
|
7
|
|||||||||||||
Other consumer loans
|
1
|
25
|
26
|
|||||||||||||
Total
|
124
|
37
|
51
|
|||||||||||||
Net charge-offs
|
1,664
|
1,199
|
2,156
|
|||||||||||||
Provision charged to operations
|
2,660
|
2,150
|
2,920
|
|||||||||||||
Balance in allowance for loan and lease losses at end of period
|
$
|
8,092
|
$
|
7,283
|
$
|
7,096
|
||||||||||
Net charge-offs/average loans
|
0.09
|
%
|
0.07
|
%
|
0.12
|
%
|
||||||||||
Net charge-offs/average loans (annualized)
|
0.11
|
%
|
0.09
|
%
|
0.12
|
%
|
||||||||||
Net charge-offs/average assets
|
0.04
|
%
|
0.03
|
%
|
0.05
|
%
|
||||||||||
(1) Excludes activity from assets held for sale from discontinued operations.
|
||||||||||||||||
Loan portfolio:
|
September 30,
|
June 30,
|
December 31,
|
September 30,
|
||||||||||||
2018
|
2018
|
2017
|
2017
|
|||||||||||||
(in thousands)
|
||||||||||||||||
SBA non-real estate
|
$
|
74,408
|
$
|
75,141
|
$
|
70,379
|
$
|
71,094
|
||||||||
SBA commercial mortgage
|
166,432
|
156,268
|
142,086
|
132,997
|
||||||||||||
SBA construction
|
17,978
|
17,781
|
16,740
|
14,205
|
||||||||||||
Total SBA loans
|
258,818
|
249,190
|
229,205
|
218,296
|
||||||||||||
Direct lease financing
|
395,976
|
389,387
|
377,660
|
368,662
|
||||||||||||
SBLOC
|
778,552
|
795,823
|
730,462
|
720,279
|
||||||||||||
Other specialty lending
|
40,799
|
48,253
|
30,720
|
36,664
|
||||||||||||
Other consumer loans
|
12,172
|
13,174
|
14,133
|
20,107
|
||||||||||||
1,486,317
|
1,495,827
|
1,382,180
|
1,364,008
|
|||||||||||||
Unamortized loan fees and costs
|
10,456
|
10,985
|
10,048
|
10,052
|
||||||||||||
Total loans, net of deferred loan fees and costs
|
$
|
1,496,773
|
$
|
1,506,812
|
$
|
1,392,228
|
$
|
1,374,060
|
||||||||
Small business lending portfolio:
|
September 30,
|
June 30,
|
December 31,
|
September 30,
|
||||||||||||
2018
|
2018
|
2017
|
2017
|
|||||||||||||
(in thousands)
|
||||||||||||||||
SBA loans, including deferred fees and costs
|
266,433
|
257,412
|
236,724
|
225,909
|
||||||||||||
SBA loans included in HFS
|
193,372
|
182,072
|
165,177
|
160,855
|
||||||||||||
Total SBA loans
|
$
|
459,805
|
$
|
439,484
|
$
|
401,901
|
$
|
386,764
|
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 September 30, 2018
|
||||||||||||||||
The Bancorp, Inc.
|
9.64
|
%
|
24.05
|
%
|
24.53
|
%
|
24.05
|
%
|
||||||||
The Bancorp Bank
|
9.19
|
%
|
23.47
|
%
|
23.94
|
%
|
23.47
|
%
|
||||||||
"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
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Selected operating ratios:
|
||||||||||||||||
Return on average assets (1)
|
5.72
|
%
|
0.71
|
%
|
2.52
|
%
|
1.08
|
%
|
||||||||
Return on average equity (1)
|
67.12
|
%
|
8.62
|
%
|
30.46
|
%
|
14.29
|
%
|
||||||||
Net interest margin
|
3.22
|
%
|
3.26
|
%
|
3.15
|
%
|
3.02
|
%
|
||||||||
(1) Annualized
|
||||||||||||||||
Book value per share table:
|
September 30,
|
June 30,
|
December 31,
|
September 30,
|
||||||||||||
2018
|
2018
|
2017
|
2017
|
|||||||||||||
Book value per share
|
$
|
6.95
|
$
|
5.91
|
$
|
5.81
|
$
|
6.09
|
||||||||
Loan quality table:
|
September 30,
|
June 30,
|
December 31,
|
September 30,
|
||||||||||||
2018
|
2018
|
2017
|
2017
|
|||||||||||||
Nonperforming loans to total loans (2)
|
0.35
|
%
|
0.42
|
%
|
0.30
|
%
|
0.39
|
%
|
||||||||
Nonperforming assets to total assets (2)
|
0.13
|
%
|
0.16
|
%
|
0.10
|
%
|
0.13
|
%
|
||||||||
Allowance for loan and lease losses to total loans
|
0.54
|
%
|
0.53
|
%
|
0.51
|
%
|
0.53
|
%
|
||||||||
Nonaccrual loans
|
$
|
4,234
|
$
|
4,915
|
$
|
3,996
|
$
|
4,953
|
||||||||
Other real estate owned
|
405
|
405
|
450
|
-
|
||||||||||||
Total nonperforming assets
|
$
|
4,639
|
$
|
5,320
|
$
|
4,446
|
$
|
4,953
|
||||||||
Loans 90 days past due still accruing interest
|
$
|
1,015
|
$
|
1,459
|
$
|
227
|
$
|
354
|
||||||||
(2) Nonperforming loan and asset ratios include nonaccrual loans and loans 90 days past due still accruing interest.
|
||||||||||||||||
Three months ended
|
||||||||||||||||
September 30,
|
June 30,
|
December 31,
|
September 30,
|
|||||||||||||
2018
|
2018
|
2017
|
2017
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Gross dollar volume (GDV) (3):
|
||||||||||||||||
Prepaid card GDV
|
$
|
12,525,527
|
$
|
12,799,531
|
$
|
10,963,456
|
$
|
10,970,085
|
||||||||
(3) 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 September 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 **
|
4.1
|
%
|
$
|
779
|
8
|
%
|
-9
|
%
|
nm
|
nm
|
||||||||||||||||||||
SBA
|
5.4
|
%
|
460
|
19
|
%
|
18
|
%
|
na
|
na
|
|||||||||||||||||||||
Leasing
|
6.2
|
%
|
396
|
7
|
%
|
7
|
%
|
0.8
|
8
|
%
|
||||||||||||||||||||
Commercial real estate securitization
|
5.9
|
%
|
115
|
nm
|
nm
|
9.0
|
nm
|
|||||||||||||||||||||||
Weighted average yield
|
5.0
|
%
|
$
|
1,750
|
||||||||||||||||||||||||||
Deposits
|
||||||||||||||||||||||||||||||
Payment solutions (primarily prepaid)
|
0.9
|
%
|
$
|
2,114
|
10
|
%
|
nm
|
$
|
13.2
|
6
|
%
|
|||||||||||||||||||
Card payment and ACH processing
|
0.7
|
%
|
876
|
2
|
%
|
nm
|
2.3
|
46
|
%
|
|||||||||||||||||||||
* Loan categories based on period end balance and Payment Solutions based on average quarterly balances.
|
||||||||||||||||||||||||||||||
** Comprised of SBLOC loans.
|
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
|
(84
|
)
|
||||||
September 30, 2018 Bancorp book value**
|
$
|
64
|
||||||
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 which reflects the Bank's investment in a securitization of certain loans from the Bank’s discontinued loan portfolio.
|
||||||||
** Approximately 45% of expected principal recoveries are from loans and properties pending liquidation or other resolution as of September 30, 2018.
|
||||||||
Walnut Street portfolio composition as of September 30, 2018
|
||||||||
Collateral type
|
% of Portfolio
|
|||||||
Commercial real estate non-owner occupied
|
||||||||
Retail
|
49.3
|
%
|
||||||
Office
|
12.8
|
%
|
||||||
Other
|
3.8
|
%
|
||||||
Construction and land
|
23.0
|
%
|
||||||
Commercial non real estate and industrial
|
0.6
|
%
|
||||||
First mortgage residential owner occupied
|
6.2
|
%
|
||||||
First mortgage residential non-owner occupied
|
3.5
|
%
|
||||||
Other
|
0.8
|
%
|
||||||
Total
|
100.0
|
%
|
||||||
Cumulative analysis of marks on discontinued commercial loan principal as of September 30, 2018
|
||||||||||
Discontinued
|
Cumulative
|
% to original
|
||||||||
loan principal
|
marks
|
principal
|
||||||||
(dollars in millions)
|
||||||||||
Commercial loan discontinued principal before marks
|
$
|
149
|
$
|
-
|
||||||
Florida mall held in discontinued other real estate owned
|
42
|
27
|
||||||||
Previous mark charges
|
14
|
14
|
||||||||
Commercial loan mark at September 30, 2018
|
-
|
8
|
||||||||
Total
|
$
|
205
|
$
|
49
|
24%
|
Analysis of discontinued commercial loan relationships as of September 30, 2018
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||
Performing
loan principal |
Nonperforming
loan principal |
Total
loan principal |
Performing
loan marks |
Nonperforming
loan marks |
Total
marks |
|||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||
7 loan relationships > $7 million
|
$
|
80
|
$
|
23
|
$
|
103
|
$
|
3
|
$
|
2
|
$
|
5
|
||||||||||||||
Loan relationships < $7 million
|
35
|
3
|
38
|
2
|
1
|
3
|
||||||||||||||||||||
$
|
115
|
$
|
26
|
$
|
141
|
$
|
5
|
$
|
3
|
$
|
8
|
Quarterly activity for discontinued commercial loan principal
|
||||
Commercial
|
||||
loan principal
|
||||
(in millions)
|
||||
Commercial loan discontinued principal, June 30, 2018 before marks
|
$
|
167
|
||
Quarterly paydowns
|
(10
|
)
|
||
Quarterly charge downs
|
(8
|
)
|
||
Commercial loan discontinued principal, September 30, 2018 before marks
|
$
|
149
|
||
Marks, September 30, 2018
|
(8
|
)
|
||
Net commercial loan exposure, September 30, 2018
|
$
|
141
|
||
Residential mortgages
|
55
|
|||
Net loans
|
$
|
196
|
||
Florida mall in other real estate owned
|
15
|
|||
Other 21 properties in other real estate owned
|
14
|
|||
Other assets related to discontinued operations
|
1
|
|||
Total discontinued assets at September 30, 2018
|
$
|
226
|
Discontinued commercial loan composition September 30, 2018
|
||||||||||||
Collateral type
|
Unpaid
principal
balance
|
Mark
September 30,
2018
|
Mark as %
of portfolio
|
|||||||||
(dollars in millions)
|
||||||||||||
Commercial real estate - non-owner occupied:
|
||||||||||||
Retail
|
$
|
7
|
$
|
0.6
|
9
|
%
|
||||||
Office
|
5
|
0.1
|
2
|
%
|
||||||||
Other
|
38
|
1.7
|
5
|
%
|
||||||||
Construction and land
|
43
|
0.2
|
-
|
|||||||||
Commercial non-real estate and industrial
|
11
|
0.7
|
6
|
%
|
||||||||
1 to 4 family construction
|
22
|
3.5
|
16
|
%
|
||||||||
First mortgage residential non-owner occupied
|
12
|
0.4
|
3
|
%
|
||||||||
Commercial real estate owner occupied:
|
||||||||||||
Retail
|
9
|
0.3
|
-
|
|||||||||
Office
|
-
|
-
|
-
|
|||||||||
Other
|
-
|
-
|
-
|
|||||||||
Residential junior mortgage
|
1
|
-
|
-
|
|||||||||
Other
|
1
|
-
|
-
|
|||||||||
Total
|
$
|
149
|
||||||||||
Less: mark
|
(8
|
)
|
||||||||||
Net commercial loan exposure, September 30, 2018
|
$
|
141
|
$
|
7.5
|
5
|
%
|
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