Le Lézard
Classified in: Business, Covid-19 virus
Subjects: EARNINGS, Conference Call, Webcast

The Bancorp, Inc. Reports Second Quarter 2021 Financial Results


The Bancorp, Inc. ("The Bancorp") (NASDAQ: TBBK), a financial holding company, today reported financial results for the second quarter of 2021.

Highlights

Damian Kozlowski, The Bancorp's Chief Executive Officer, said, "We had another strong quarter in both growth and profitability. Growth continues to be supported by the acquisition of new clients and the expansion of our capabilities and solutions in our payments ecosystem. Based on our year-to-date performance of $0.94 a share and our 2021 outlook, we are raising our guidance to $1.78 a share. The $1.78 does not include the impact of buybacks in the 3rd and 4th quarters. We continue to see tailwinds that should drive continued growth in 2021 earnings and beyond. We will issue preliminary 2022 per share guidance in our 3rd quarter earnings release. Current trends would suggest income growth for 2022 of 20% or more over our revised 2021 guidance."

The Bancorp reported net income of $29.4 million, or $0.50 per diluted share, for the quarter ended June 30, 2021, compared to net income of $20.1 million, or $0.35 per diluted share, for the quarter ended June 30, 2020. 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 8.52%, 15.39%, 15.78% and 15.39%, 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, July 30, 2021 by clicking on the webcast link on The Bancorp's homepage at www.thebancorp.com. Or, you may dial 844.775.2543, access code 2868852. 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 6, 2021 by dialing 855.859.2056, access code 2868852.

The Bancorp, Inc. (NASDAQ: TBBK), headquartered in Wilmington, Delaware, through its subsidiary, The Bancorp Bank, 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 "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
June 30,

 

Six months ended
June 30,

Condensed income statement

2021

 

2020

 

2021

 

2020

 

(dollars in thousands, except per share data)

 

 

 

 

 

 

 

 

Net interest income

$

54,069

 

 

$

50,246

 

 

$

107,826

 

 

$

93,157

 

Provision for credit losses

 

(951

)

 

 

922

 

 

 

(129

)

 

 

4,501

 

Non-interest income

 

 

 

 

 

 

 

ACH, card and other payment processing fees

 

1,904

 

 

 

1,707

 

 

 

3,700

 

 

 

3,553

 

Prepaid, debit card and related fees

 

19,447

 

 

 

18,673

 

 

 

38,655

 

 

 

37,213

 

Net realized and unrealized gains (losses) on commercial

 

 

 

 

 

 

 

loans, at fair value

 

2,579

 

 

 

(940

)

 

 

4,575

 

 

 

(6,096

)

Change in value of investment in unconsolidated entity

 

?

 

 

 

?

 

 

 

?

 

 

 

(45

)

Leasing related income

 

1,767

 

 

 

443

 

 

 

2,732

 

 

 

1,276

 

Other non-interest income

 

164

 

 

 

483

 

 

 

273

 

 

 

1,064

 

Total non-interest income

 

25,861

 

 

 

20,366

 

 

 

49,935

 

 

 

36,965

 

Non-interest expense

 

 

 

 

 

 

 

Salaries and employee benefits

 

27,087

 

 

 

25,492

 

 

 

52,745

 

 

 

48,233

 

Data processing expense

 

1,146

 

 

 

1,177

 

 

 

2,272

 

 

 

2,346

 

Legal expense

 

2,044

 

 

 

2,229

 

 

 

4,098

 

 

 

3,142

 

FDIC insurance

 

2,589

 

 

 

2,918

 

 

 

4,969

 

 

 

5,507

 

Software

 

3,706

 

 

 

3,386

 

 

 

7,390

 

 

 

6,863

 

Other non-interest expense

 

7,311

 

 

 

7,418

 

 

 

14,292

 

 

 

14,947

 

Total non-interest expense

 

43,883

 

 

 

42,620

 

 

 

85,766

 

 

 

81,038

 

Income from continuing operations before income taxes

 

36,998

 

 

 

27,070

 

 

 

72,124

 

 

 

44,583

 

Income tax expense

 

7,840

 

 

 

6,787

 

 

 

16,906

 

 

 

11,139

 

Net income from continuing operations

 

29,158

 

 

 

20,283

 

 

 

55,218

 

 

 

33,444

 

Discontinued operations

 

 

 

 

 

 

 

Income (loss) from discontinued operations before income taxes

 

361

 

 

 

(274

)

 

 

237

 

 

 

(1,049

)

Income tax expense (benefit)

 

84

 

 

 

(59

)

 

 

55

 

 

 

(264

)

Net income (loss) from discontinued operations, net of tax

 

277

 

 

 

(215

)

 

 

182

 

 

 

(785

)

Net income

$

29,435

 

 

$

20,068

 

 

$

55,400

 

 

$

32,659

 

 

 

 

 

 

 

 

 

Net income per share from continuing operations - basic

$

0.51

 

 

$

0.35

 

 

$

0.96

 

 

$

0.58

 

Net income (loss) per share from discontinued operations - basic

$

?

 

 

$

?

 

 

$

0.01

 

 

$

(0.01

)

Net income per share - basic

$

0.51

 

 

$

0.35

 

 

$

0.97

 

 

$

0.57

 

 

 

 

 

 

 

 

 

Net income per share from continuing operations - diluted

$

0.49

 

 

$

0.35

 

 

$

0.93

 

 

$

0.58

 

Net income (loss) per share from discontinued operations - diluted

$

0.01

 

 

$

?

 

 

$

0.01

 

 

$

(0.01

)

Net income per share - diluted

$

0.50

 

 

$

0.35

 

 

$

0.94

 

 

$

0.57

 

Weighted average shares - basic

 

57,230,576

 

 

 

57,489,719

 

 

 

57,232,557

 

 

 

57,355,282

 

Weighted average shares - diluted

 

59,022,925

 

 

 

57,800,115

 

 

 

59,086,956

 

 

 

57,856,791

 

Note: Compared to higher rates in recent periods, the effective tax rate in the second quarter of 2021 approximated 21% as a result of the impact of excess tax deductions related to stock-based compensation, recorded as a discrete item in the second quarter. The large deductions and tax benefit resulted from the increase in the Company's stock price as compared to the original grant date.

Balance sheet

June 30,
2021 (unaudited)

 

March 31,
2021 (unaudited)

 

December 31,
2020

 

June 30,
2020 (unaudited)

 

(dollars in thousands)

Assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

Cash and due from banks

$

5,470

 

 

$

7,838

 

 

$

5,984

 

 

$

5,094

 

Interest earning deposits at Federal Reserve Bank

 

583,498

 

 

 

1,738,749

 

 

 

339,531

 

 

 

475,627

 

Total cash and cash equivalents

 

588,968

 

 

 

1,746,587

 

 

 

345,515

 

 

 

480,721

 

 

 

 

 

 

 

 

 

Investment securities, available-for-sale, at fair value

 

1,106,075

 

 

 

1,128,459

 

 

 

1,206,164

 

 

 

1,324,447

 

Commercial loans, at fair value (held-for-sale at June 30, 2020)

 

1,690,216

 

 

 

1,780,762

 

 

 

1,810,812

 

 

 

1,807,630

 

Loans, net of deferred fees and costs

 

2,915,344

 

 

 

2,827,076

 

 

 

2,652,323

 

 

 

2,322,737

 

Allowance for credit losses

 

(15,292

)

 

 

(16,419

)

 

 

(16,082

)

 

 

(14,625

)

Loans, net

 

2,900,052

 

 

 

2,810,657

 

 

 

2,636,241

 

 

 

2,308,112

 

Federal Home Loan Bank and Atlantic Central Bankers Bank stock

 

1,667

 

 

 

1,368

 

 

 

1,368

 

 

 

1,368

 

Premises and equipment, net

 

17,392

 

 

 

17,196

 

 

 

17,608

 

 

 

16,701

 

Accrued interest receivable

 

18,668

 

 

 

20,164

 

 

 

20,458

 

 

 

18,897

 

Intangible assets, net

 

2,646

 

 

 

2,746

 

 

 

2,845

 

 

 

2,710

 

Deferred tax asset, net

 

10,923

 

 

 

10,900

 

 

 

9,757

 

 

 

7,921

 

Investment in unconsolidated entity, at fair value

 

24,988

 

 

 

31,047

 

 

 

31,294

 

 

 

34,064

 

Assets held-for-sale from discontinued operations

 

97,496

 

 

 

106,925

 

 

 

113,650

 

 

 

128,463

 

Other assets

 

91,516

 

 

 

90,530

 

 

 

81,129

 

 

 

83,003

 

Total assets

$

6,550,607

 

 

$

7,747,341

 

 

$

6,276,841

 

 

$

6,214,037

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

Demand and interest checking

$

5,225,024

 

 

$

6,231,220

 

 

$

5,205,010

 

 

$

5,089,741

 

Savings and money market

 

459,688

 

 

 

690,281

 

 

 

257,050

 

 

 

455,458

 

Total deposits

 

5,684,712

 

 

 

6,921,501

 

 

 

5,462,060

 

 

 

5,545,199

 

 

 

 

 

 

 

 

 

Securities sold under agreements to repurchase

 

42

 

 

 

42

 

 

 

42

 

 

 

42

 

Senior debt

 

98,498

 

 

 

98,406

 

 

 

98,314

 

 

 

?

 

Subordinated debenture

 

13,401

 

 

 

13,401

 

 

 

13,401

 

 

 

13,401

 

Other long-term borrowings

 

39,901

 

 

 

40,085

 

 

 

40,277

 

 

 

40,639

 

Other liabilities

 

94,944

 

 

 

77,142

 

 

 

81,583

 

 

 

81,677

 

Total liabilities

$

5,931,498

 

 

$

7,150,577

 

 

$

5,695,677

 

 

$

5,680,958

 

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

Common stock - authorized, 75,000,000 shares of $1.00 par value; 57,458,287 and 57,455,308 shares issued and outstanding at June 30, 2021 and 2020, respectively

 

57,458

 

 

 

57,248

 

 

 

57,551

 

 

 

57,455

 

Additional paid-in capital

 

363,241

 

 

 

370,481

 

 

 

377,452

 

 

 

373,812

 

Retained earnings

 

183,853

 

 

 

154,418

 

 

 

128,453

 

 

 

81,028

 

Accumulated other comprehensive income

 

14,557

 

 

 

14,617

 

 

 

17,708

 

 

 

20,784

 

Total shareholders' equity

 

619,109

 

 

 

596,764

 

 

 

581,164

 

 

 

533,079

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

$

6,550,607

 

 

$

7,747,341

 

 

$

6,276,841

 

 

$

6,214,037

 

Average balance sheet and net interest income

Three months ended June 30, 2021

 

Three months ended June 30, 2020

 

(dollars in thousands; unaudited)

Assets:

Average
Balance

 

Interest

 

Average
Rate

 

Average
Balance

 

Interest

 

Average
Rate

 

 

 

 

 

 

 

 

 

 

 

 

Interest earning assets:

 

 

 

 

 

 

 

 

 

 

 

Loans, net of deferred fees and costs**

$

4,572,712

 

 

$

49,378

 

4.32

%

 

$

3,925,515

 

 

$

41,448

 

4.22

%

Leases-bank qualified*

 

5,783

 

 

 

96

 

6.64

%

 

 

9,217

 

 

 

162

 

7.03

%

Investment securities-taxable

 

1,081,419

 

 

 

7,201

 

2.66

%

 

 

1,334,368

 

 

 

10,188

 

3.05

%

Investment securities-nontaxable*

 

3,878

 

 

 

32

 

3.30

%

 

 

4,402

 

 

 

35

 

3.18

%

Interest earning deposits at Federal Reserve Bank

 

1,120,039

 

 

 

300

 

0.11

%

 

 

426,174

 

 

 

107

 

0.10

%

Net interest earning assets

 

6,783,831

 

 

 

57,007

 

3.36

%

 

 

5,699,676

 

 

 

51,940

 

3.65

%

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses

 

(16,406

)

 

 

 

 

 

 

(14,822

)

 

 

 

 

Assets held-for-sale from discontinued operations

 

98,895

 

 

 

781

 

3.16

%

 

 

130,530

 

 

 

1,094

 

3.35

%

Other assets

 

201,539

 

 

 

 

 

 

 

228,443

 

 

 

 

 

 

$

7,067,859

 

 

 

 

 

 

$

6,043,827

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

Demand and interest checking

$

5,736,776

 

 

$

1,327

 

0.09

%

 

$

5,140,167

 

 

$

1,390

 

0.11

%

Savings and money market

 

526,112

 

 

 

192

 

0.15

%

 

 

234,201

 

 

 

120

 

0.20

%

Total deposits

 

6,262,888

 

 

 

1,519

 

0.10

%

 

 

5,374,368

 

 

 

1,510

 

0.11

%

 

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings

 

?

 

 

 

?

 

?

 

 

 

16,428

 

 

 

15

 

0.37

%

Repurchase agreements

 

41

 

 

 

?

 

?

 

 

 

41

 

 

 

?

 

?

 

Subordinated debentures

 

13,401

 

 

 

112

 

3.34

%

 

 

13,401

 

 

 

128

 

3.82

%

Senior debt

 

100,239

 

 

 

1,280

 

5.11

%

 

 

?

 

 

 

?

 

?

 

Total deposits and liabilities

 

6,376,569

 

 

 

2,911

 

0.18

%

 

 

5,404,238

 

 

 

1,653

 

0.12

%

 

 

 

 

 

 

 

 

 

 

 

 

Other liabilities

 

83,353

 

 

 

 

 

 

 

123,997

 

 

 

 

 

Total liabilities

 

6,459,922

 

 

 

 

 

 

 

5,528,235

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

607,937

 

 

 

 

 

 

 

515,592

 

 

 

 

 

 

$

7,067,859

 

 

 

 

 

 

$

6,043,827

 

 

 

 

 

Net interest income on tax equivalent basis*

 

 

$

54,877

 

 

 

 

 

$

51,381

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax equivalent adjustment

 

 

 

27

 

 

 

 

 

 

41

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

$

54,850

 

 

 

 

 

$

51,340

 

 

Net interest margin *

 

 

 

 

3.19

%

 

 

 

 

 

3.53

%

* Full taxable equivalent basis, using a statutory Federal tax rate of 21% for 2021 and 2020.
** Includes commercial loans, at fair value for 2021 previously classified as held-for-sale at June 30, 2020. All periods include non-accrual loans.

NOTE: In the table above, the 2021 interest on loans reflects $3.0 million of fees which were earned on a short-term line of credit to another institution to initially fund PPP loans, which did not significantly increase average loans or assets. These fees are not expected to recur. Interest on loans also includes $1.3 million of interest and fees on PPP loans. In 2020 the table above includes comparable PPP interest and fees of $1.6 million. Increases in interest earning deposits at the Federal Reserve Bank reflect increased deposits resulting from stimulus payments distributed to a large segment of the population, resulting from December 2020 federal legislation.

Average balance sheet and net interest income

Six months ended June 30, 2021

 

Six months ended June 30, 2020

 

(dollars in thousands; unaudited)

Assets:

Average
Balance

 

Interest

 

Average
Rate

 

Average
Balance

 

Interest

 

Average
Rate

 

 

 

 

 

 

 

 

 

 

 

 

Interest earning assets:

 

 

 

 

 

 

 

 

 

 

 

Loans, net of deferred fees and costs**

$

4,524,911

 

 

$

97,189

 

4.30

%

 

$

3,593,921

 

 

$

80,607

 

4.49

%

Leases - bank qualified*

 

6,379

 

 

 

214

 

6.71

%

 

 

10,096

 

 

 

362

 

7.17

%

Investment securities-taxable

 

1,136,631

 

 

 

16,009

 

2.82

%

 

 

1,364,956

 

 

 

20,683

 

3.03

%

Investment securities-nontaxable*

 

3,960

 

 

 

67

 

3.38

%

 

 

4,788

 

 

 

75

 

3.13

%

Interest earning deposits at Federal Reserve Bank

 

935,239

 

 

 

483

 

0.10

%

 

 

460,025

 

 

 

1,730

 

0.75

%

Net interest earning assets

 

6,607,120

 

 

 

113,962

 

3.45

%

 

 

5,433,786

 

 

 

103,457

 

3.81

%

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses

 

(16,241

)

 

 

 

 

 

 

(12,532

)

 

 

 

 

Assets held for sale from discontinued operations

 

103,983

 

 

 

1,634

 

3.14

%

 

 

133,903

 

 

 

2,368

 

3.54

%

Other assets

 

203,821

 

 

 

 

 

 

 

233,088

 

 

 

 

 

 

$

6,898,683

 

 

 

 

 

 

$

5,788,245

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

Demand and interest checking

$

5,619,608

 

 

$

2,944

 

0.10

%

 

$

4,746,928

 

 

$

8,085

 

0.34

%

Savings and money market

 

466,978

 

 

 

341

 

0.15

%

 

 

203,888

 

 

 

170

 

0.17

%

Time deposits

 

?

 

 

 

?

 

?

 

 

 

159,752

 

 

 

1,483

 

1.86

%

Total deposits

 

6,086,586

 

 

 

3,285

 

0.11

%

 

 

5,110,568

 

 

 

9,738

 

0.38

%

 

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings

 

6,491

 

 

 

8

 

0.25

%

 

 

36,620

 

 

 

180

 

0.98

%

Repurchase agreements

 

41

 

 

 

?

 

?

 

 

 

57

 

 

 

?

 

?

 

Subordinated debentures

 

13,401

 

 

 

225

 

3.36

%

 

 

13,401

 

 

 

290

 

4.33

%

Senior debt

 

100,190

 

 

 

2,559

 

5.11

%

 

 

?

 

 

 

?

 

?

 

Total deposits and liabilities

 

6,206,709

 

 

 

6,077

 

0.20

%

 

 

5,160,646

 

 

 

10,208

 

0.40

%

 

 

 

 

 

 

 

 

 

 

 

 

Other liabilities

 

91,837

 

 

 

 

 

 

 

118,811

 

 

 

 

 

Total liabilities

 

6,298,546

 

 

 

 

 

 

 

5,279,457

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

600,137

 

 

 

 

 

 

 

508,788

 

 

 

 

 

 

$

6,898,683

 

 

 

 

 

 

$

5,788,245

 

 

 

 

 

Net interest income on tax equivalent basis*

 

 

$

109,519

 

 

 

 

 

$

95,617

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax equivalent adjustment

 

 

 

59

 

 

 

 

 

 

92

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

$

109,460

 

 

 

 

 

$

95,525

 

 

Net interest margin *

 

 

 

 

3.26

%

 

 

 

 

 

3.43

%

* Full taxable equivalent basis, using a statutory Federal tax rate of 21% for 2021 and 2020.
** Includes commercial loans, at fair value for 2021 previously classified as held-for-sale at June 30, 2020. All periods include non-accrual loans.

NOTE: In the table above, the 2021 interest on loans reflects $4.5 million of fees which were earned on a short-term line of credit to another institution to initially fund PPP loans, which did not significantly increase average loans or assets. These fees are not expected to recur. Interest on loans also includes $3.7 million of interest and fees on PPP loans. In 2020 the table above includes comparable PPP interest and fees of $1.6 million. Increases in interest earning deposits at the Federal Reserve Bank reflect increased deposits resulting from stimulus payments distributed to a large segment of the population, resulting from December 2020 federal legislation.

Allowance for credit losses

Six months ended

 

Year ended

 

June 30,
2021 (unaudited)

 

June 30,
2020 (unaudited)

 

December 31,
2020

 

(dollars in thousands)

 

 

 

 

 

Balance in the allowance for credit losses at beginning of period (1)

$

16,082

 

 

$

12,875

 

 

$

12,875

 

 

 

 

 

 

 

Loans charged-off:

 

 

 

 

 

SBA non-real estate

 

321

 

 

 

1,048

 

 

 

1,350

 

SBA commercial mortgage

 

23

 

 

 

?

 

 

 

?

 

Direct lease financing

 

193

 

 

 

1,552

 

 

 

2,243

 

SBLOC

 

15

 

 

 

?

 

 

 

?

 

Total

 

552

 

 

 

2,600

 

 

 

3,593

 

 

 

 

 

 

 

Recoveries:

 

 

 

 

 

SBA non-real estate

 

15

 

 

 

60

 

 

 

103

 

Direct lease financing

 

7

 

 

 

84

 

 

 

570

 

Total

 

22

 

 

 

144

 

 

 

673

 

Net charge-offs

 

530

 

 

 

2,456

 

 

 

2,920

 

(Reversal of) provision credited to allowance, excluding commitment provision

 

(260

)

 

 

4,206

 

 

 

6,127

 

 

 

 

 

 

 

Balance in allowance for credit losses at end of period

$

15,292

 

 

$

14,625

 

 

$

16,082

 

Net charge-offs/average loans

 

0.02

%

 

 

0.06

%

 

 

0.07

%

Net charge-offs/average assets

 

0.01

%

 

 

0.04

%

 

 

0.05

%

(1) Excludes activity from assets held-for-sale from discontinued operations.

Loan portfolio

June 30,
2021

 

March 31,
2021

 

December 31,
2020

 

June 30,
2020

 

(in thousands)

 

 

 

 

 

 

 

 

SBL non-real estate

$

228,958

 

$

305,446

 

$

255,318

 

$

293,692

SBL commercial mortgage

 

343,487

 

 

320,013

 

 

300,817

 

 

259,020

SBL construction

 

18,494

 

 

20,692

 

 

20,273

 

 

33,193

Small business loans *

 

590,939

 

 

646,151

 

 

576,408

 

 

585,905

Direct lease financing

 

506,424

 

 

484,316

 

 

462,182

 

 

422,505

SBLOC / IBLOC**

 

1,729,628

 

 

1,622,359

 

 

1,550,086

 

 

1,287,350

Advisor financing ***

 

72,190

 

 

58,919

 

 

48,282

 

 

15,529

Other specialty lending

 

2,092

 

 

2,251

 

 

2,179

 

 

2,706

Other consumer loans ****

 

3,748

 

 

4,201

 

 

4,247

 

 

4,003

 

 

2,905,021

 

 

2,818,197

 

 

2,643,384

 

 

2,317,998

Unamortized loan fees and costs

 

10,323

 

 

8,879

 

 

8,939

 

 

4,739

Total loans, net of unamortized fees and costs

$

2,915,344

 

$

2,827,076

 

$

2,652,323

 

$

2,322,737

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small business portfolio

June 30,
2021

 

March 31,
2021

 

December 31,
2020

 

June 30,
2020

 

(in thousands)

 

 

 

 

 

 

 

 

SBL, including unamortized fees and costs

$

593,401

 

$

647,445

 

$

577,944

 

$

583,935

SBL, included in commercial loans, at fair value

 

225,534

 

 

234,908

 

 

243,562

 

 

225,401

Total small business loans

$

818,935

 

$

882,353

 

$

821,506

 

$

809,336

* The preceding table shows small business loans and small business loans held at fair value. The small business loans held at fair value are comprised of the government guaranteed portion of SBA 7a loans at the dates indicated. A reduction in SBL non-real estate loans from $305.4 million at March 31, 2021 to $229.0 million at June 30, 2021 resulted from U.S. government repayments of $60.8 million of PPP loans authorized by The Consolidated Appropriations Act, 2021 and the repayment of $19.7 million of a line of credit to another institution related to PPP loans. PPP loans totaled $129.4 million at June 30, 2021 and $165.7 million at December 31, 2020, respectively.
** 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.
*** 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 loan to value ratios of 70%, based on third party business appraisals, but may be increased depending upon the debt service coverage ratio. Personal guarantees and blanket business liens are obtained as appropriate.
**** Included in the table above under Other consumer loans are demand deposit overdrafts reclassified as loan balances totaling $424,000 and $663,000 at June 30, 2021 and December 31, 2020, respectively. Estimated overdraft charge-offs and recoveries are reflected in the allowance for credit losses and have been immaterial.

Small business loans as of June 30, 2021

 

 

 

Loan principal
(in millions)

U.S. government guaranteed portion of SBA loans (a)

$

358

Paycheck Protection Program Loans (PPP) (a)

 

129

Commercial mortgage SBA (b)

 

189

Construction SBA (c)

 

9

Non-guaranteed portion of U.S. government guaranteed 7a loans (d)

 

106

Non-SBA small business loans (e)

 

18

Total principal

$

809

Unamortized fees and costs

 

10

Total small business loans

$

819

(a) This is the portion of SBA 7a loans (7a) and PPP loans which 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 $9 million in Construction SBA loans, $8 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 $106 million represents the unguaranteed portion of 7a loans which are 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.
(e) The $18 million of non-SBA loans is comprised of approximately 20 conventional coffee/doughnut/carryout franchisee note purchases. The majority of purchased notes were made to multi-unit operators, are considered seasoned and have performed as agreed. A $2 million guaranty by the seller, for an 11% first loss piece, is in place until August 2021.

Additionally, the CARES Act of 2020 ("the CARES Act") provided for six months of principal and interest payments on 7a loans which generally ended in fourth quarter 2020 or in first quarter 2021. The Consolidated Appropriations Act, 2021, became law in December 2020 and provides for at least an additional two months of such payments on SBA 7a loans, with up to five months of payments on hotel, restaurant, and other more highly impacted loans. Unlike the six months of CARES Act payments, these additional payments are capped at $9,000 per month.

Small business loans by type as of June 30, 2021

 

(Excludes government guaranteed portion of SBA 7a loans, PPP loans, and a line of credit to initially fund PPP loans)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SBL commercial
mortgage*

 

SBL construction*

 

SBL non-real estate

 

Total

 

 

% Total

 

 

(in millions)

Hotels (except casino hotels) and motels

 

$

66

 

$

3

 

$

?

 

$

69

 

 

22

%

Full-service restaurants

 

 

16

 

 

1

 

 

3

 

 

20

 

 

6

%

Child day care services

 

 

16

 

 

?

 

 

1

 

 

17

 

 

5

%

Baked goods stores

 

 

4

 

 

?

 

 

11

 

 

15

 

 

5

%

Car washes

 

 

10

 

 

2

 

 

?

 

 

12

 

 

4

%

Assisted living facilities for the elderly

 

 

10

 

 

?

 

 

?

 

 

10

 

 

3

%

Offices of lawyers

 

 

9

 

 

?

 

 

?

 

 

9

 

 

3

%

Lessors of nonresidential buildings (except miniwarehouses)

 

 

9

 

 

?

 

 

?

 

 

9

 

 

3

%

Funeral homes and funeral services

 

 

8

 

 

?

 

 

?

 

 

8

 

 

2

%

Limited-service restaurants

 

 

2

 

 

1

 

 

5

 

 

8

 

 

2

%

General warehousing and storage

 

 

7

 

 

?

 

 

?

 

 

7

 

 

2

%

All other amusement and recreation industries

 

 

5

 

 

?

 

 

1

 

 

6

 

 

2

%

Outpatient mental health and substance abuse centers

 

 

5

 

 

?

 

 

?

 

 

5

 

 

2

%

Other spectator sports

 

 

5

 

 

?

 

 

?

 

 

5

 

 

1

%

Fitness and recreational sports centers

 

 

?

 

 

2

 

 

2

 

 

4

 

 

1

%

Gasoline stations with convenience stores

 

 

4

 

 

?

 

 

?

 

 

4

 

 

1

%

Offices of dentists

 

 

3

 

 

?

 

 

?

 

 

3

 

 

1

%

Other warehousing and storage

 

 

3

 

 

?

 

 

?

 

 

3

 

 

1

%

New car dealers

 

 

3

 

 

?

 

 

?

 

 

3

 

 

1

%

All other miscellaneous wood product manufacturing

 

 

3

 

 

?

 

 

?

 

 

3

 

 

1

%

Offices of physicians (except mental health specialists)

 

 

3

 

 

?

 

 

?

 

 

3

 

 

1

%

All other miscellaneous general purpose machinery manufacturing

 

 

3

 

 

?

 

 

?

 

 

3

 

 

1

%

Pet care (except veterinary) services

 

 

2

 

 

?

 

 

?

 

 

2

 

 

1

%

Automotive body, paint, and interior repair and maintenance

 

 

2

 

 

?

 

 

?

 

 

2

 

 

1

%

Sewing, needlework, and piece goods stores

 

 

2

 

 

?

 

 

?

 

 

2

 

 

1

%

Caterers

 

 

2

 

 

?

 

 

?

 

 

2

 

 

1

%

Amusement arcades

 

 

2

 

 

?

 

 

?

 

 

2

 

 

1

%

Lessors of other real estate property

 

 

2

 

 

?

 

 

?

 

 

2

 

 

1

%

Plumbing, heating, and air-conditioning contractors

 

 

2

 

 

?

 

 

?

 

 

2

 

 

1

%

Landscaping services

 

 

?

 

 

?

 

 

2

 

 

2

 

 

1

%

Offices of real estate agents and brokers

 

 

2

 

 

?

 

 

?

 

 

2

 

 

1

%

Independent artists, writers, and performers

 

 

2

 

 

?

 

 

?

 

 

2

 

 

1

%

Other**

 

 

46

 

 

2

 

 

28

 

 

76

 

 

20

%

Total

 

$

258

 

$

11

 

$

53

 

$

322

 

 

100

%

* Of the SBL commercial mortgage and SBL construction loans, $61.0 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 $2.0 million are spread over a hundred different classifications such as Commercial Printing, Pet and Pet Supplies Stores, Securities Brokerage, etc.

State diversification as of June 30, 2021

 

(Excludes government guaranteed portion of SBA 7a loans, PPP loans, and a line of credit to initially fund PPP loans)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SBL commercial
mortgage*

 

SBL construction*

 

SBL non-real estate

 

Total

 

 

% Total

 

 

(in millions)

Florida

 

$

54

 

$

?

 

$

8

 

$

62

 

 

19

%

California

 

 

42

 

 

1

 

 

4

 

 

47

 

 

15

%

North Carolina

 

 

23

 

 

2

 

 

3

 

 

28

 

 

9

%

Pennsylvania

 

 

23

 

 

?

 

 

3

 

 

26

 

 

8

%

New York

 

 

17

 

 

3

 

 

5

 

 

25

 

 

8

%

Illinois

 

 

22

 

 

?

 

 

3

 

 

25

 

 

8

%

Texas

 

 

12

 

 

?

 

 

5

 

 

17

 

 

5

%

New Jersey

 

 

7

 

 

?

 

 

6

 

 

13

 

 

4

%

Virginia

 

 

9

 

 

?

 

 

2

 

 

11

 

 

3

%

Tennessee

 

 

10

 

 

?

 

 

1

 

 

11

 

 

3

%

Georgia

 

 

7

 

 

?

 

 

2

 

 

9

 

 

3

%

Colorado

 

 

3

 

 

4

 

 

2

 

 

9

 

 

3

%

Michigan

 

 

3

 

 

?

 

 

2

 

 

5

 

 

2

%

Washington

 

 

3

 

 

?

 

 

?

 

 

3

 

 

1

%

Ohio

 

 

3

 

 

?

 

 

?

 

 

3

 

 

1

%

Other states

 

 

20

 

 

1

 

 

7

 

 

28

 

 

8

%

Total

 

$

258

 

$

11

 

$

53

 

$

322

 

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

* Of the SBL commercial mortgage and SBL construction loans, $61.0 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 June 30, 2021

 

 

 

 

 

 

 

 

Type*

 

State

 

SBL commercial mortgage*

 

 

 

(in millions)

Lawyers' office

 

CA

 

$

9

 

Hotel

 

FL

 

 

9

 

General warehouse and storage

 

PA

 

 

7

 

Hotel

 

NC

 

 

6

 

Assisted living facility

 

FL

 

 

5

 

Outpatient mental health and substance abuse center

 

FL

 

 

5

 

Hotel

 

NC

 

 

5

 

Hotel

 

PA

 

 

4

 

Hotel

 

TN

 

 

4

 

Gasoline station

 

VA

 

 

4

 

Total

 

 

 

$

58

 

* All of the top 10 loans are 504 SBA loans with 50%-60% origination date loan-to-value and are in the commercial mortgage category. The top 10 loan table above does not include loans to the extent that they are U.S. government guaranteed.

Commercial real estate loans, at fair value, excluding SBA loans, are as follows including LTV at origination:

Type as of June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

Type

 

 

# Loans

 

Balance

 

Weighted average
origination date
LTV

 

Weighted average
minimum interest
rate

 

 

 

(dollars in millions)

Multifamily (apartments)

 

 

136

 

$

1,323

 

 

76

%

 

4.75

%

Hospitality (hotels and lodging)

 

 

11

 

 

75

 

 

65

%

 

5.74

%

Retail

 

 

6

 

 

44

 

 

71

%

 

4.65

%

Other

 

 

7

 

 

28

 

 

70

%

 

5.24

%

 

 

 

160

 

$

1,470

 

 

75

%

 

4.81

%

Fair value adjustment

 

 

 

 

 

(5

)

 

 

 

 

Total

 

 

 

 

$

1,465

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State diversification as of June 30, 2021

 

 

15 largest loans (all multifamily) as of June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State

 

Balance

 

 

Origination date LTV

 

 

State

 

 

Balance

 

Origination date LTV

(in millions)

 

 

(in millions)

Texas

 

$

427

 

 

77

%

 

 

North Carolina

 

 

$

44

 

78

%

Georgia

 

 

174

 

 

77

%

 

 

Texas

 

 

 

38

 

79

%

Arizona

 

 

108

 

 

76

%

 

 

Texas

 

 

 

36

 

80

%

North Carolina

 

 

69

 

 

78

%

 

 

Pennsylvania

 

 

 

33

 

77

%

Alabama

 

 

56

 

 

76

%

 

 

Texas

 

 

 

30

 

75

%

Ohio

 

 

57

 

 

69

%

 

 

Nevada

 

 

 

28

 

80

%

Other states each <$55 million

 

 

579

 

 

73

%

 

 

Texas

 

 

 

27

 

77

%

Total

 

$

1,470

 

 

75

%

 

 

Arizona

 

 

 

27

 

79

%

 

 

 

 

 

 

 

 

Mississippi

 

 

 

27

 

79

%

 

 

 

 

 

 

 

 

North Carolina

 

 

 

25

 

77

%

 

 

 

 

 

 

 

 

Texas

 

 

 

25

 

77

%

 

 

 

 

 

 

 

 

Texas

 

 

 

24

 

77

%

 

 

 

 

 

 

 

 

Alabama

 

 

 

23

 

77

%

 

 

 

 

 

 

 

 

Georgia

 

 

 

21

 

79

%

 

 

 

 

 

 

 

 

Texas

 

 

 

21

 

79

%

 

 

 

 

 

 

 

 

15 Largest loans

 

 

$

429

 

78

 

%

 

Institutional banking loans outstanding at June 30, 2021

 

 

 

 

Type

Principal

 

% of total

 

(in millions)

 

 

Securities backed lines of credit (SBLOC)

$

1,133

 

63

%

Insurance backed lines of credit (IBLOC)

 

597

 

33

%

Advisor financing

 

72

 

4

%

Total

$

1,802

 

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 June 30, 2021

 

 

 

 

 

Principal amount

 

% Principal to collateral

 

(in millions)

 

$

60

 

41

%

 

 

17

 

37

%

 

 

16

 

54

%

 

 

14

 

26

%

 

 

12

 

29

%

 

 

10

 

38

%

 

 

9

 

30

%

 

 

8

 

71

%

 

 

8

 

23

%

 

 

8

 

51

%

Total and weighted average

$

162

 

40

%

Insurance backed lines of credit (IBLOC)

IBLOC loans are backed by the cash value of life insurance policies which have been assigned to us. We lend up to 100% of such cash value. Our underwriting standards require approval of the insurance companies which carry the policies backing these loans. Currently, seven insurance companies have been approved and, as of April 17, 2021, all were rated Superior (A+ or better) by AM BEST.

Direct lease financing* by type as of June 30, 2021

 

 

 

 

 

Principal balance

 

% Total

 

(in millions)

 

 

Construction

$

83

 

16

%

Government agencies and public institutions**

 

77

 

15

%

Real estate and rental and leasing

 

66

 

13

%

Waste management and remediation services

 

63

 

12

%

Retail trade

 

48

 

10

%

Wholesale trade

 

40

 

8

%

Transportation and warehousing

 

28

 

6

%

Health care and social assistance

 

25

 

5

%

Professional, scientific, and technical services

 

19

 

4

%

Educational services

 

16

 

3

%

Manufacturing

 

15

 

3

%

Finance and insurance

 

7

 

1

%

Other

 

19

 

4

%

Total

$

506

 

100

%

* Of the total $506 million of direct lease financing, $465 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 June 30, 2021

 

 

 

 

State

Principal balance

 

% Total

 

(in millions)

 

 

Florida

$

92

 

18

%

California

 

53

 

11

%

New Jersey

 

37

 

7

%

New York

 

33

 

6

%

Pennsylvania

 

31

 

6

%

Utah

 

31

 

6

%

Maryland

 

24

 

5

%

North Carolina

 

24

 

5

%

Texas

 

17

 

3

%

Connecticut

 

16

 

3

%

Washington

 

16

 

3

%

Missouri

 

14

 

3

%

Georgia

 

11

 

2

%

Idaho

 

9

 

2

%

Alabama

 

9

 

2

%

Other states

 

89

 

18

%

Total

$

506

 

100

%

Capital ratios

Tier 1 capital
to average
assets ratio

 

Tier 1 capital
to risk-weighted
assets ratio

 

Total capital
to risk-weighted
assets ratio

 

Common equity
tier 1 to risk
weighted assets

As of June 30, 2021

 

 

 

 

 

 

 

The Bancorp, Inc.

8.52

%

 

15.39

%

 

15.78

%

 

15.39

%

The Bancorp Bank

8.73

%

 

15.75

%

 

16.14

%

 

15.75

%

"Well capitalized" institution (under FDIC regulations-Basel III)

5.00

%

 

8.00

%

 

10.00

%

 

6.50

%

 

 

 

 

 

 

 

 

As of December 31, 2020

 

 

 

 

 

 

 

The Bancorp, Inc.

9.20

%

 

14.43

%

 

14.84

%

 

14.43

%

The Bancorp Bank

9.11

%

 

14.27

%

 

14.68

%

 

14.27

%

"Well capitalized" institution (under FDIC regulations-Basel III)

5.00

%

 

8.00

%

 

10.00

%

 

6.50

%

 

 

 

 

 

 

 

 

 

Three months ended
June 30,

 

Six months ended
June 30,

 

2021

2020

2021

 

2020

Selected operating ratios

 

 

 

 

 

 

 

Return on average assets (1)

1.67

%

 

1.33

%

 

1.62

%

 

1.13

%

Return on average equity (1)

19.42

%

 

15.61

%

 

18.62

%

 

12.87

%

Net interest margin

3.19

%

 

3.53

%

 

3.26

%

 

3.43

%

(1) Annualized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share table

June 30,
2021

 

March 31,
2021

 

December 31,
2020

 

June 30,
2020

Book value per share

$

10.77

 

$

10.42

 

$

10.10

 

$

9.28

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan quality table

June 30,
2021

 

March 31,
2021

 

December 31,
2020

 

June 30,
2020

 

(dollars in thousands)

Nonperforming loans to total loans

 

0.31

%

 

 

0.49

%

 

 

0.48

%

 

 

0.44

%

Nonperforming assets to total assets

 

0.14

%

 

 

0.18

%

 

 

0.20

%

 

 

0.17

%

Allowance for credit losses

 

0.52

%

 

 

0.58

%

 

 

0.61

%

 

 

0.63

%

 

 

 

 

 

 

 

 

Nonaccrual loans

$

7,346

 

 

$

11,961

 

 

$

12,227

 

 

$

9,957

 

Loans 90 days past due still accruing interest

 

1,550

 

 

 

1,762

 

 

 

497

 

 

 

352

 

Other real estate owned

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

Total nonperforming assets

$

8,896

 

 

$

13,723

 

 

$

12,724

 

 

$

10,309

 

Gross dollar volume (GDV) (1)

Three months ended

 

June 30,
2021

 

March 31,
2021

 

December 31,
2020

 

June 30,
2020

 

(in thousands)

 

 

 

 

 

 

 

 

Prepaid and debit card GDV

$

27,106,763

 

$

28,094,930

 

$

22,523,855

 

$

23,539,694

(1) 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 June 30, 2021
(dollars in millions)

 

Balances

% Growth

Major business lines

Average
approximate
rates *

Balances **

Year over year

 

Linked
quarter
annualized

Loans

Institutional banking ***

2.5

%

$

1,802

38

%

29

%

Small Business Lending****

5.0

%

 

819

15

%

10

%

Leasing

6.0

%

 

506

20

%

18

%

Commercial real estate (non-SBA at fair value)

4.8

%

 

1,465

nm

nm

Weighted average yield

4.1

%

$

4,592

Non-interest income

% Growth

Deposits: Fintech solutions group

Current quarter

Year over
year

Prepaid and debit card issuance

0.1

%

$

4,836

24

%

nm

$

19.4

4

%

Card payment and ACH processing

0.2

%

$

885

22

%

nm

$

1.9

nm

 

* Average rates are for the quarter ended June 30, 2021.
** Loan and deposit categories are respectively based on period-end and average quarterly balances.
*** Institutional Banking loans are comprised of Securities Backed Lines of Credit (SBLOC), collateralized by marketable securities, Insurance Backed Lines of Credit (IBLOC), collateralized by the cash surrender value of insurance policies, and Advisor financing.
**** Small Business Lending is substantially comprised of SBA loans. Loan growth percentages exclude short-term PPP loans. The linked quarter annualized percentage excludes a short-term line of credit to another institution to fund PPP loans, with a balance of $19.7 million at March 31, 2021, which was repaid in the second quarter.

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 - 2020

 

(46

)

 

 

(46

)

2021 Marks

 

?

 

 

 

Payments received

 

(122

)

 

 

June 30, 2021 Bancorp book value**

$

25

 

 

 

 

 

 

 

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 investment in a securitization of certain loans from the Bank's discontinued loan portfolio.
** Approximately 21% of expected principal recoveries were from loans and properties pending liquidation or other resolution as of June 30, 2021.

Walnut Street portfolio composition as of June 30, 2021

 

 

 

Collateral type

% of Portfolio

Commercial real estate non-owner occupied - Retail

80.0%

Construction and land

13.3%

Other

6.7%

Total

100.0%

 

Cumulative analysis of marks on discontinued commercial loan principal as of June 30, 2021

 

 

 

 

 

 

 

Discontinued
loan principal

 

Cumulative
marks

 

% to original
principal

 

(dollars in millions)

Commercial loan discontinued principal before marks

$

53

 

 

 

 

Florida mall held in discontinued other real estate owned

 

42

 

$

(27

)

 

 

Mark at June 30, 2021

 

 

 

(4

)

 

 

Cumulative mark at June 30, 2021

$

95

 

$

(31

)

 

33

%

Analysis of discontinued commercial loan relationships as of June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing
loan principal

 

Nonperforming
loan principal

 

Total
loan principal

 

Performing
loan marks

 

Nonperforming
loan marks

 

Total
marks

 

(in millions)

4 loan relationships > $5 million

$

33

 

$

?

 

$

33

 

$

(2

)

 

$

?

 

 

$

(2

)

Loan relationships < $5 million

 

12

 

 

4

 

 

16

 

 

(1

)

 

 

(1

)

 

 

(2

)

 

$

45

 

$

4

 

$

49

 

$

(3

)

 

$

(1

)

 

$

(4

)

Quarterly activity for commercial loan discontinued principal

 

 

 

Commercial
loan principal

 

(in millions)

 

 

Commercial loan discontinued principal March 31, 2021 before marks

$

61

 

Quarterly paydowns and other reductions

 

(8

)

Commercial loan discontinued principal June 30, 2021 before marks

 

53

 

Marks June 30, 2021

 

(4

)

Net commercial loan exposure June 30, 2021

 

49

 

Residential mortgages

 

27

 

Net loans

 

76

 

Florida mall in other real estate owned

 

15

 

5 properties in other real estate owned

 

6

 

Total discontinued assets at June 30, 2021

$

97

 

Discontinued commercial loan composition as of June 30, 2021

 

 

 

 

 

 

Collateral type

Unpaid principal
balance

 

Mark at
June 30, 2021

 

Mark as % of portfolio

 

(in millions)

Commercial real estate - non-owner occupied:

 

 

 

 

 

Retail

$

4

 

 

$

(0.6

)

 

15

%

Office

 

2

 

 

 

?

 

 

?

 

Other

 

18

 

 

 

(0.1

)

 

1

%

Construction and land

 

10

 

 

 

(0.1

)

 

1

%

Commercial non-real estate and industrial

 

3

 

 

 

(0.1

)

 

3

%

1 to 4 family construction

 

7

 

 

 

(2.6

)

 

37

%

First mortgage residential non-owner occupied

 

5

 

 

 

?

 

 

?

 

Commercial real estate owner occupied:

 

 

 

 

 

Retail

 

2

 

 

 

?

 

 

?

 

Residential junior mortgage

 

1

 

 

 

?

 

 

?

 

Other

 

1

 

 

 

?

 

 

?

 

Total

$

53

 

 

$

(3.5

)

 

7

%

Less: mark

 

(4

)

 

 

 

 

Net commercial loan exposure June 30, 2021

$

49

 

 

$

(3.5

)

 

 

Loan payment deferrals related to Covid-19

Total non-U.S. guaranteed loan balances for borrowers with Covid-19 payment deferrals amounted to $48 million as of March 31, 2021. The vast majority of these borrowers had begun making their payments as of July 5, 2021. As of that date, $968,000 of discontinued operations loans were still in deferral, and small business (SBA) borrowers with unguaranteed principal balances totaling $2.6 million, have not made their payments due on that date. Of the $2.6 million, we are considering further deferrals for borrowers with unguaranteed balances of $1.7 million.


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