The Bancorp, Inc. Reports First Quarter Financial Results

The Bancorp, Inc. (“The Bancorp” or “the Company” or “we” or “our”) (NASDAQ: TBBK), a financial holding company, today reported financial results for the first quarter of 2024.

Recent Developments

  • The Bancorp has increased its share repurchase authorization for the second quarter of 2024 from $50.0 million to $100.0 million.
  • In April 2024, the Company began purchasing additional fixed rate agency backed commercial and residential mortgage securities of varying maturities, with an approximate 5.11% weighted average yield, and estimated weighted average lives of eight years, to reduce its exposure to lower levels of net interest income, should the Federal Reserve begin decreasing rates. Such purchases would also reduce the additional net interest income which would result should the Federal Reserve increase rates. Through April 26, 2024, the Company purchased approximately $900 million of such securities. While there are many variables and limitations to estimating exposure to changes in rates, such purchases and continuing fixed rate loan originations are projected to reduce such exposure to modest levels.
  • We are pleased to announce Block, Inc. (“Block”) as a new partner to our fintech solutions ecosystem. The addition of this new relationship as well as the continued organic growth of the current portfolio should result in meaningful increases to the ACH, card and other processing fees line item.

Highlights

  • The Bancorp reported net income of $56.4 million, or $1.06 per diluted share (“EPS”), for the quarter ended March 31, 2024, compared to net income of $49.1 million, or $0.88 per diluted share, for the quarter ended March 31, 2023, or an EPS increase of 20%. While net income increased 15% between these periods, outstanding shares were decreased as a result of common stock share repurchases which have been significantly increased in 2024.
  • Return on assets and equity for the quarter ended March 31, 2024, amounted to 3.0% and 28%, respectively, compared to 2.6% and 28%, respectively, for the quarter ended March 31, 2023 (all percentages “annualized”).
  • Net interest income increased 10% to $94.4 million for the quarter ended March 31, 2024, compared to $85.8 million for the quarter ended March 31, 2023. Net interest income increases reflected the impact of Federal Reserve rate increases on The Bancorp’s variable rate loans and securities.
  • Net interest margin amounted to 5.15% for the quarter ended March 31, 2024, compared to 4.67% for the quarter ended March 31, 2023, and 5.26% for the quarter ended December 31, 2023. As noted above, the Company has begun purchasing fixed rate securities to reduce margin exposure to lower rate environments.
  • Loans, net of deferred fees and costs were $5.46 billion at March 31, 2024, compared to $5.36 billion at December 31, 2023 and $5.35 billion at March 31, 2023. Those changes reflected an increase of 2% quarter over linked quarter and an increase of 2% year over year.
  • Gross dollar volume (“GDV”), representing the total amounts spent on prepaid and debit cards, increased $3.93 billion, or 12%, to $37.94 billion for the quarter ended March 31, 2024, compared to the quarter ended March 31, 2023. The increase reflects continued organic growth with existing partners and the impact of clients added within the past year. Total prepaid, debit card, ACH, and other payment fees increased 7% to $27.3 million for the first quarter of 2024 compared to the first quarter of 2023. After adjusting first quarter 2023 for $600,000 of fees related to a prior period and a $1.4 million termination fee from a client which formed its own bank, those fees increased 16%.
  • Small business loans (“SBL”), including those held at fair value, amounted to $925.3 million at March 31, 2024, or 14% higher year over year, and 3% quarter over linked quarter, excluding the impact of $28.7 million of loans with related secured borrowings.
  • Direct lease financing balances increased 8% year over year to $702.5 million at March 31, 2024, and 2% over December 31, 2023.
  • At March 31, 2024, real estate bridge loans of $2.10 billion had grown 5% compared to the $2.00 billion balance at December 31, 2023, and 20% compared to the March 31, 2023 balance of $1.75 billion. These real estate bridge loans consist entirely of rehabilitation loans for apartment buildings.
  • Security backed lines of credit (“SBLOC”), insurance backed lines of credit (“IBLOC”) and investment advisor financing loans collectively decreased 21% year over year and decreased 4% quarter over linked quarter to $1.78 billion at March 31, 2024.
  • The average interest rate on $6.65 billion of average deposits and interest-bearing liabilities during the first quarter of 2024 was 2.49%. Average deposits of $6.50 billion for the first quarter of 2024 reflected a decrease of 2% from the $6.62 billion of average deposits for the quarter ended March 31, 2023. The decreases reflected the planned exit of $200 million of higher cost funds on July 1, 2023 and other planned exits of higher cost funds throughout the year.
  • As of March 31, 2024, 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 10.87%, 15.76%, 16.35% and 15.76%, respectively, compared to well-capitalized minimums of 5%, 8%, 10% and 6.5%, respectively. The Bancorp and its wholly-owned subsidiary, The Bancorp Bank, National Association, each remain well capitalized under banking regulations.
  • Book value per common share at March 31, 2024 was $15.63 compared to $13.11 per common share at March 31, 2023, an increase of 19%.
  • The Bancorp repurchased 1,262,212 shares of its common stock at an average cost of $39.61 per share during the quarter ended March 31, 2024.
  • The Bancorp emphasizes safety and soundness and its balance sheet has a risk profile enhanced by the special nature of the collateral supporting its loan niches, related underwriting, and the characteristics of its funding sources, including those highlighted in the bullets below. Those loan niches and funding sources have contributed to increased earnings levels, even during periods in which markets have experienced various economic stresses.
  • The vast majority of The Bancorp’s funding is comprised of FDIC-insured and/or small balance accounts, which adjust to only a portion of changes in rates. The Bancorp also has lines of credit with U.S. government agencies totaling approximately $2.7 billion as of March 31, 2024, as well as access to other forms of liquidity.
  • In prior years, The Bancorp deferred adding fixed rate securities when yields were particularly low, which has afforded the flexibility to benefit from, and secure, more advantageous securities and loan rates.
  • The $2.1 billion apartment bridge lending portfolio has a weighted average origination date “as is” LTV of 70%, based on third party appraisals. Further, the weighted average origination date “as stabilized” LTV, which measures the estimated value of the apartments after the rehabilitation is complete may provide even greater protection.
  • In its real estate bridge lending portfolio, The Bancorp has minimal exposure to non-multifamily commercial real estate such as office buildings, and instead has a portfolio largely comprised of rehabilitation bridge loans for apartment buildings. These loans generally have three year terms with two one-year extensions to allow for the rehabilitation work to be completed and rentals stabilized for an extended period, before being refinanced at lower rates through U.S. Government Sponsored Entities or other lenders. The rehabilitation real estate lending portfolio consists primarily of workforce housing, which we consider to be working class apartments at more affordable rental rates. Related collateral values should accordingly be more stable than higher rent properties, even in stressed economies. While the macro-economic environment has challenged the multifamily bridge space, the stability of The Bancorp’s rehabilitation bridge loan portfolio is evidenced by the estimated values of collateral for loans that have been classified as substandard. Recent third party appraisals of those loans reflect a weighted average “as is” loan to value ratio (“LTV”) of 79% and an “as stabilized” LTV of 76%. Accordingly, even with a higher interest rate environment and other stresses, LTVs for these loans have been significantly sustained and continue to provide protection against potential loss.
  • As part of the underwriting process, The Bancorp reviews borrowers’ previous rehabilitation experience in addition to overall financial wherewithal. These transactions also include significant borrower equity contributions with required performance metrics. Underwriting generally includes, but is not limited to, assessment of local market information relating to vacancy and rental rates, review of post rehabilitation rental rate assumptions against geo-specific affordability indices, negative news and lien searches, visitations by bank personnel and/or designated engineers, and other information sources.
  • Rehabilitation progress is monitored through ongoing draw requests and financial reporting covenants. This generally allows for early identification of potential issues, and expedited action to address on a timely basis.
  • Operations and ongoing loan evaluation are overseen by multiple levels of management, in addition to the real estate bridge lending team’s experienced professional staff and third party consultants utilized during the underwriting and asset management process. This oversight includes a separate loan committee specific to real estate bridge lending, which is comprised of seasoned and experienced lending professionals who do not directly report to anyone on the real estate bridge lending team. There is also a separate loan review department, a surveillance committee and additional staff which evaluate potential losses under the current expected credit losses methodology (“CECL”), all of which similarly do not report to anyone on the real estate bridge lending team.
  • SBLOC and IBLOC portfolios are respectively secured by marketable securities and the cash value of life insurance. The majority of SBA 7(a) loans are government guaranteed, while SBA 504 loans are made with 50-60% LTV’s.
  • Additional details regarding our loan portfolios are included in the related tables in this press release, as is the summarization of the earnings contributions of our payments businesses, which further enhances The Bancorp’s risk profile. The Company’s risk profile inherent in its loan portfolios, funding and earnings levels, may present opportunities to further increase shareholder value, while still prudently maintaining capital levels. Such opportunities include the recently increased planned stock repurchases noted above.

CEO and President Damian Kozlowski commented, “We had another quarter of continued progress and a strong start to 2024 with earnings of $1.06 a share and an ROE of 28%,” said Damian Kozlowski CEO and President of The Bancorp. “We expect continued increases in volumes and profitability throughout 2024 and beyond as we continue to invest and build our capabilities for the future, while adding new business partners and expanding our current client relationships. We are also reaffirming our 2024 guidance of $4.25 a share without the impact of $50 million per quarter of share buybacks and the additional $50 million buyback in the second quarter.”

Conference Call Webcast

You may access the LIVE webcast of The Bancorp's Quarterly Earnings Conference Call at 8:00 AM ET Friday, April 26, 2024 by clicking on the webcast link on The Bancorp's homepage at www.thebancorp.com. Or you may dial 1.800.267.6316, conference code BANCORP. You may listen to the replay of the webcast following the live call on The Bancorp's investor relations website or telephonically until Friday, May 3, 2024 by dialing 1.800.938.2241, access code BANCORP.

About The Bancorp

The Bancorp, Inc. (NASDAQ: TBBK), headquartered in Wilmington, Delaware, through its subsidiary, The Bancorp Bank, National Association, (or “The Bancorp Bank, N.A.”) provides non-bank financial companies with the people, processes, and technology to meet their unique banking needs. Through its Fintech Solutions, Institutional Banking, Commercial Lending, and Real Estate Bridge Lending businesses, The Bancorp provides partner-focused solutions paired with cutting-edge technology for companies that range from entrepreneurial startups to Fortune 500 companies. With over 20 years of experience, The Bancorp has become a leader in the financial services industry, earning recognition as the #1 issuer of prepaid cards in the U.S., a nationwide provider of bridge financing for real estate capital improvement plans, an SBA National Preferred Lender, a leading provider of securities-backed lines of credit, with one of the few bank-owned commercial vehicle leasing groups. By its company-wide commitment to excellence, The Bancorp has also been ranked as one of the 100 Fastest-Growing Companies by Fortune, a Top 50 Employer by Equal Opportunity Magazine and was selected to be included in the S&P Small Cap 600. For more about The Bancorp, visit https://thebancorp.com/.

Forward-Looking Statements

Statements in this earnings release regarding The Bancorp’s business which are not historical facts are "forward-looking statements." These statements may be identified by the use of forward-looking terminology, including but not limited to the words “intend,” “may,” “believe,” “will,” “expect,” “look,” “anticipate,” “plan,” “estimate,” “continue,” or similar words. These statements, including, without limitation, statements regarding our annual fiscal 2024 results, profitability, and increased volumes, relate to our current assumptions, projections, and expectations about our business and future events, including 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 the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and other documents that the Company files from time to time with the Securities and Exchange Commission. The forward-looking statements speak only as of the date of this press release. The Bancorp does not undertake to publicly revise or update forward-looking statements in this press release to reflect events or circumstances that arise after the date of this press release, except as may be required under applicable law.

The Bancorp, Inc.

Financial highlights

(unaudited)

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Year ended

 

March 31,

 

December 31,

Consolidated condensed income statements

2024

 

2023

 

2023

 

(Dollars in thousands, except per share and share data)

 

 

 

 

 

 

 

 

 

Net interest income

$

94,418

 

$

85,816

 

$

354,052

Provision for credit losses on loans

 

2,169

 

 

1,903

 

 

8,330

Provision for credit loss on security

 

 

 

 

 

10,000

Non-interest income

 

 

 

 

 

 

 

 

ACH, card and other payment processing fees

 

2,964

 

 

2,171

 

 

9,822

Prepaid, debit card and related fees

 

24,286

 

 

23,323

 

 

89,417

Net realized and unrealized gains on commercial

 

 

 

 

 

 

 

 

loans, at fair value

 

1,096

 

 

1,725

 

 

3,745

Leasing related income

 

388

 

 

1,490

 

 

6,324

Other non-interest income

 

648

 

 

280

 

 

2,786

Total non-interest income

 

29,382

 

 

28,989

 

 

112,094

Non-interest expense

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

30,280

 

 

29,785

 

 

121,055

Data processing expense

 

1,421

 

 

1,321

 

 

5,447

Legal expense

 

821

 

 

958

 

 

3,850

FDIC insurance

 

845

 

 

955

 

 

2,957

Software

 

4,489

 

 

4,237

 

 

17,349

Other non-interest expense

 

8,856

 

 

10,774

 

 

40,384

Total non-interest expense

 

46,712

 

 

48,030

 

 

191,042

Income before income taxes

 

74,919

 

 

64,872

 

 

256,774

Income tax expense

 

18,490

 

 

15,750

 

 

64,478

Net income

 

56,429

 

 

49,122

 

 

192,296

 

 

 

 

 

 

 

 

 

Net income per share - basic

$

1.07

 

$

0.89

 

$

3.52

 

 

 

 

Net income per share - diluted

$

1.06

 

$

0.88

 

$

3.49

Weighted average shares - basic

 

52,747,140

 

 

55,452,815

 

 

54,506,065

Weighted average shares - diluted

 

53,326,588

 

 

56,048,142

 

 

55,053,497

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed consolidated balance sheets

March 31,

 

December 31,

 

September 30,

 

March 31,

 

2024 (unaudited)

 

2023

 

2023 (unaudited)

 

2023 (unaudited)

 

 

(Dollars in thousands, except share data)

Assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

$

9,105

 

 

$

4,820

 

 

$

4,881

 

 

$

13,736

 

Interest earning deposits at Federal Reserve Bank

 

1,241,363

 

 

 

1,033,270

 

 

 

898,533

 

 

 

773,446

 

Total cash and cash equivalents

 

1,250,468

 

 

 

1,038,090

 

 

 

903,414

 

 

 

787,182

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities, available-for-sale, at fair value, net of $10.0 million allowance for credit loss

 

718,247

 

 

 

747,534

 

 

 

756,636

 

 

 

787,429

 

Commercial loans, at fair value

 

282,998

 

 

 

332,766

 

 

 

379,603

 

 

 

493,334

 

Loans, net of deferred fees and costs

 

5,459,344

 

 

 

5,361,139

 

 

 

5,198,972

 

 

 

5,354,347

 

Allowance for credit losses

 

(28,741

)

 

 

(27,378

)

 

 

(24,145

)

 

 

(23,794

)

Loans, net

 

5,430,603

 

 

 

5,333,761

 

 

 

5,174,827

 

 

 

5,330,553

 

Federal Home Loan Bank, Atlantic Central Bankers Bank, and Federal Reserve Bank stock

 

15,642

 

 

 

15,591

 

 

 

20,157

 

 

 

12,629

 

Premises and equipment, net

 

27,482

 

 

 

27,474

 

 

 

28,978

 

 

 

21,319

 

Accrued interest receivable

 

37,861

 

 

 

37,534

 

 

 

34,159

 

 

 

33,729

 

Intangible assets, net

 

1,552

 

 

 

1,651

 

 

 

1,751

 

 

 

1,950

 

Other real estate owned

 

19,559

 

 

 

16,949

 

 

 

18,756

 

 

 

21,117

 

Deferred tax asset, net

 

21,764

 

 

 

21,219

 

 

 

20,379

 

 

 

18,290

 

Other assets

 

109,680

 

 

 

133,126

 

 

 

127,107

 

 

 

99,427

 

Total assets

$

7,915,856

 

 

$

7,705,695

 

 

$

7,465,767

 

 

$

7,606,959

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

Demand and interest checking

$

6,828,159

 

 

$

6,630,251

 

 

$

6,455,043

 

 

$

6,607,767

 

Savings and money market

 

62,597

 

 

 

50,659

 

 

 

49,428

 

 

 

96,890

 

Total deposits

 

6,890,756

 

6,680,910

 

6,504,471

 

6,704,657

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities sold under agreements to repurchase

 

 

 

 

42

 

 

 

42

 

 

 

42

 

Senior debt

 

95,948

 

 

 

95,859

 

 

 

95,771

 

 

 

99,142

 

Subordinated debenture

 

13,401

 

 

 

13,401

 

 

 

13,401

 

 

 

13,401

 

Other long-term borrowings

 

38,407

 

 

 

38,561

 

 

 

9,861

 

 

 

9,972

 

Other liabilities

 

60,579

 

69,641

 

68,533

 

54,597

 

Total liabilities

$

7,099,091

 

$

6,898,414

 

$

6,692,079

 

$

6,881,811

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

Common stock - authorized, 75,000,000 shares of $1.00 par value; 52,253,037 and 55,329,629 shares issued and outstanding at March 31, 2024 and 2023, respectively

 

52,253

 

 

 

53,203

 

 

 

53,867

 

 

 

55,330

 

Additional paid-in capital

 

166,335

 

 

 

212,431

 

 

 

234,320

 

 

 

277,814

 

Retained earnings

 

618,044

 

 

 

561,615

 

 

 

517,587

 

 

 

418,441

 

Accumulated other comprehensive loss

 

(19,867

)

(19,968

)

(32,086

)

(26,437

)

Total shareholders' equity

 

816,765

 

 

 

807,281

 

 

 

773,688

 

 

 

725,148

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

$

7,915,856

 

$

7,705,695

 

$

7,465,767

 

$

7,606,959

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average balance sheet and net interest income

 

Three months ended March 31, 2024

 

 

Three months ended March 31, 2023

 

 

(Dollars in thousands; unaudited)

 

 

Average

 

 

 

 

 

Average

 

 

Average

 

 

 

 

Average

Assets:

 

Balance

 

 

Interest

 

 

Rate

 

 

Balance

 

 

Interest

 

Rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, net of deferred fees and costs(1)

$

5,717,262

 

 

$

114,160

 

 

7.99

%

 

$

5,987,179

 

 

$

106,204

 

7.10

%

Leases-bank qualified(2)

 

4,746

 

 

 

116

 

 

9.78

%

 

 

3,361

 

 

 

69

 

8.21

%

Investment securities-taxable

 

733,599

 

 

 

9,634

 

 

5.25

%

 

 

774,055

 

 

 

9,300

 

4.81

%

Investment securities-nontaxable(2)

 

2,895

 

 

 

50

 

 

6.91

%

 

 

3,343

 

 

 

41

 

4.91

%

Interest earning deposits at Federal Reserve Bank

 

874,073

 

 

 

11,884

 

 

5.44

%

 

 

580,058

 

 

 

6,585

 

4.54

%

Net interest earning assets

 

7,332,575

 

 

 

135,844

 

 

7.41

%

 

 

7,347,996

 

 

 

122,199

 

6.65

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses

 

(27,158

)

 

 

 

 

 

 

 

 

(22,533

)

 

 

 

 

 

Other assets

 

331,756

 

 

 

 

 

 

 

 

 

237,721

 

 

 

 

 

 

 

$

7,637,173

 

 

 

 

 

 

 

 

$

7,563,184

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand and interest checking

$

6,453,866

 

 

$

38,714

 

 

2.40

%

 

$

6,406,834

 

 

$

32,383

 

2.02

%

Savings and money market

 

50,970

 

 

 

447

 

 

3.51

%

 

 

132,279

 

 

 

1,219

 

3.69

%

Time deposits

 

 

 

 

 

 

 

84,333

 

 

 

858

4.07

%

Total deposits

 

6,504,836

 

 

 

39,161

 

 

2.41

%

 

 

6,623,446

 

 

 

34,460

 

2.08

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings

 

1,373

 

 

 

19

 

 

5.54

%

 

 

20,500

 

 

 

234

 

4.57

%

Repurchase agreements

 

13

 

 

 

 

 

 

 

 

42

 

 

 

 

 

Long-term borrowings

 

38,517

 

 

 

686

 

 

7.12

%

 

 

9,998

 

 

 

126

 

5.04

%

Subordinated debentures

 

13,401

 

 

 

292

8.72

%

 

 

13,401

 

 

 

261

7.79

%

Senior debt

 

95,894

 

 

 

1,233

5.14

%

 

 

99,092

 

 

 

1,279

5.16

%

Total deposits and liabilities

 

6,654,034

 

 

 

41,391

 

 

2.49

%

 

 

6,766,479

 

 

 

36,360

 

2.15

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other liabilities

 

171,116

 

 

 

 

 

 

 

 

 

87,116

 

 

 

 

 

 

Total liabilities

 

6,825,150

 

 

 

 

 

 

 

 

 

6,853,595

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

812,023

 

 

 

 

 

 

 

 

 

709,589

 

 

 

 

 

 

 

$

7,637,173

 

 

 

 

 

 

 

 

$

7,563,184

 

 

 

 

 

 

Net interest income on tax equivalent basis(2)

 

 

 

$

94,453

 

 

 

 

 

$

85,839

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax equivalent adjustment

 

 

 

35

 

 

 

 

 

 

23

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

$

94,418

 

 

 

$

85,816

Net interest margin(2)

 

 

 

 

 

 

 

5.15

%

 

 

 

 

 

 

 

4.67

%

(1)Includes commercial loans, at fair value. All periods include non-accrual loans.

(2)Full taxable equivalent basis, using 21% respective statutory federal tax rates in 2024 and 2023.

 

 

 

 

 

 

 

 

 

Allowance for credit losses

Three months ended

 

Year ended

 

March 31,

 

March 31,

 

December 31,

 

2024 (unaudited)

 

2023 (unaudited)

2023

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

Balance in the allowance for credit losses at beginning of period

$

27,378

 

 

$

22,374

 

$

22,374

 

 

 

 

 

 

 

 

 

 

Loans charged-off:

 

 

 

 

 

 

 

 

SBA non-real estate

 

111

 

 

 

214

 

 

 

871

 

SBA commercial mortgage

 

 

 

 

 

 

 

76

 

Direct lease financing

 

919

 

 

 

905

 

 

 

3,666

 

IBLOC

 

 

 

 

 

 

 

24

 

Consumer - other

 

6

 

 

 

3

 

 

3

 

Total

 

1,036

 

 

 

1,122

 

 

4,640

 

 

 

 

 

 

 

 

 

 

Recoveries:

 

 

 

 

 

 

 

 

SBA non-real estate

 

4

 

 

 

202

 

 

 

475

 

SBA commercial mortgage

 

 

 

 

75

 

 

 

75

 

Direct lease financing

 

32

 

 

 

67

 

 

 

330

 

Consumer - home equity

 

 

 

 

 

 

299

 

Total

 

36

 

 

 

344

 

 

1,179

 

Net charge-offs

 

1,000

 

 

 

778

 

 

 

3,461

 

Provision for credit losses, excluding commitment provision

 

2,363

 

 

 

2,198

 

 

8,465

 

 

 

 

 

 

 

 

 

 

Balance in allowance for credit losses at end of period

$

28,741

 

 

$

23,794

 

 

$

27,378

 

Net charge-offs/average loans

 

0.02

%

 

 

0.01

%

 

 

0.07

%

Net charge-offs/average assets

 

0.01

%

 

 

0.01

%

 

 

0.05

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan portfolio

March 31,

 

December 31,

 

September 30,

 

March 31,

 

2024 (unaudited)

 

2023

 

2023 (unaudited)

 

2023 (unaudited)

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

SBL non-real estate

$

140,956

 

$

137,752

 

$

130,579

 

$

114,334

SBL commercial mortgage

 

637,926

 

 

606,986

 

 

547,107

 

 

492,798

SBL construction

 

27,290

22,627

19,204

33,116

Small business loans

 

806,172

 

 

767,365

 

 

696,890

 

 

640,248

Direct lease financing

 

702,512

 

 

685,657

 

 

670,208

 

 

652,541

SBLOC / IBLOC(1)

 

1,550,313

 

 

1,627,285

 

 

1,720,513

 

 

2,053,450

Advisor financing(2)

 

232,206

 

 

221,612

 

 

199,442

 

 

189,425

Real estate bridge loans

 

2,101,896

 

 

1,999,782

 

 

1,848,224

 

 

1,752,322

Other loans(3)

 

56,163

50,638

55,800

60,210

 

 

5,449,262

 

 

5,352,339

 

 

5,191,077

 

 

5,348,196

Unamortized loan fees and costs

 

10,082

8,800

7,895

6,151

Total loans, including unamortized fees and costs

$

5,459,344

$

5,361,139

$

5,198,972

$

5,354,347

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small business portfolio

March 31,

 

December 31,

 

September 30,

 

March 31,

 

2024 (unaudited)

 

2023

 

2023 (unaudited)

 

2023 (unaudited)

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

SBL, including unamortized fees and costs

$

816,151

$

776,867

$

705,790

 

$

648,858

SBL, included in loans, at fair value

 

109,131

119,287

126,543

 

 

140,909

Total small business loans(4)

$

925,282

$

896,154

$

832,333

 

$

789,767

(1)SBLOC are collateralized by marketable securities, while IBLOC are collateralized by the cash surrender value of insurance policies. At March 31, 2024 and December 31, 2023, IBLOC loans amounted to $595.6 million and $646.9 million, respectively.

(2)In 2020 The Bancorp began originating loans to investment advisors for purposes of debt refinancing, acquisition of another firm or internal succession. Maximum loan amounts are subject to loan-to-value (“LTV”) ratios of 70% of the business enterprise value based on a third-party valuation, but may be increased depending upon the debt service coverage ratio. Personal guarantees and blanket business liens are obtained as appropriate.

(3)Includes demand deposit overdrafts reclassified as loan balances totaling $239,000 and $1.7 million at March 31, 2024 and December 31, 2023, respectively. Estimated overdraft charge-offs and recoveries are reflected in the allowance for credit losses and are immaterial.

(4)The SBLs held at fair value are comprised of the government guaranteed portion of 7(a) Program loans at the dates indicated.

Small business loans as of March 31, 2024

 

 

 

 

 

 

 

 

 

 

Loan principal

 

 

(Dollars in millions)

U.S. government guaranteed portion of SBA loans(1)

 

$

395

PPP loans(1)

 

 

2

Commercial mortgage SBA(2)

 

 

311

Construction SBA(3)

 

 

14

Non-guaranteed portion of U.S. government guaranteed 7(a) Program loans(4)

 

 

114

Non-SBA SBLs

 

 

49

Other(5)

 

 

29

Total principal

 

$

914

Unamortized fees and costs

 

 

11

Total SBLs

 

$

925

(1)Includes the portion of SBA 7(a) Program loans and PPP loans which have been guaranteed by the U.S. government, and therefore are assumed to have no credit risk.

(2)Substantially all these loans are made under the 504 Program, which dictates origination date LTV percentages, generally 50-60%, to which The Bancorp adheres.

(3)Includes $6.0 million in 504 Program first mortgages with an origination date LTV of 50-60%, and $8.0 million in SBA interim loans with an approved SBA post-construction full takeout/payoff.

(4)Includes the unguaranteed portion of 7(a) Program loans which are 70% or more guaranteed by the U.S. government. SBA 7(a) Program 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 7(a) Program loans and 504 Program loans require the personal guaranty of all 20% or greater owners.

(5)Comprised of $29.0 million of loans sold that do not qualify for true sale accounting.

Small business loans by type as of March 31, 2024



(Excludes government guaranteed portion of SBA 7(a) Program and PPP loans)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SBL commercial mortgage(1)

 

SBL construction(1)

 

SBL non-real estate

 

Total

 

 

% Total

 

 

 

(Dollars in millions)

Hotels and motels

 

$

75

 

$

 

$

 

$

75

 

 

15

%

Funeral homes and funeral services

 

 

40

 

 

 

 

 

 

40

 

 

8

%

Full-service restaurants

 

 

24

 

 

7

 

 

2

 

 

33

 

 

7

%

Car washes

 

 

21

 

 

 

 

 

 

21

 

 

4

%

Child day care services

 

 

17

 

 

1

 

 

2

 

 

20

 

 

4

%

General line grocery merchant wholesalers

 

 

17

 

 

 

 

 

 

17

 

 

4

%

Homes for the elderly

 

 

16

 

 

 

 

 

 

16

 

 

3

%

Outpatient mental health and substance abuse centers

 

 

15

 

 

 

 

 

 

15

 

 

3

%

Gasoline stations with convenience stores

 

 

12

 

 

 

 

 

 

12

 

 

2

%

Fitness and recreational sports centers

 

 

8

 

 

 

 

2

 

 

10

 

 

2

%

Nursing care facilities

 

 

10

 

 

 

 

 

 

10

 

 

2

%

Offices of lawyers

 

 

9

 

 

 

 

 

 

9

 

 

2

%

Limited-service restaurants

 

 

5

 

 

1

 

 

3

 

 

9

 

 

2

%

All other specialty trade contractors

 

 

7

 

 

 

 

 

 

7

 

 

1

%

Caterers

 

 

7

 

 

 

 

 

 

7

 

 

1

%

General warehousing and storage

 

 

6

 

 

 

 

 

 

6

 

 

1

%

Plumbing, heating, and air-conditioning

 

 

5

 

 

 

 

1

 

 

6

 

 

1

%

Other accounting services

 

 

5

 

 

 

 

 

 

5

 

 

1

%

Other miscellaneous durable goods merchant

 

 

5

 

 

 

 

 

 

5

 

 

1

%

Packaged frozen food merchant wholesalers

 

 

5

 

 

 

 

 

 

5

 

 

1

%

Other technical and trade schools

 

 

5

 

 

 

 

 

 

5

 

 

1

%

All other amusement and recreation

 

 

4

 

 

 

 

 

 

4

 

 

1

%

Furniture merchant wholesalers

 

 

4

 

 

 

 

 

 

4

 

 

1

%

Offices of Dentists

 

 

3

 

 

 

 

 

 

3

 

 

1

%

Other(2)

 

 

109

 

 

7

 

 

28

 

 

144

 

 

31

%

Total

 

$

434

 

$

16

 

$

38

 

$

488

 

 

100

%

(1)Of the SBL commercial mortgage and SBL construction loans, $125.0 million represents the total of the non-guaranteed portion of SBA 7(a) Program loans and non-SBA loans. The balance of those categories represents SBA 504 Program loans with 50%-60% origination date LTVs. SBL Commercial excludes $29.0 million of loans sold that do not qualify for true sale accounting.

(2)Loan types of less than $3.5 million are spread over approximately one hundred different business types.

State diversification as of March 31, 2024



(Excludes government guaranteed portion of SBA 7(a) Program loans and PPP loans)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SBL commercial mortgage(1)

 

SBL construction(1)

 

SBL non-real estate

 

Total

 

 

% Total

 

 

 

(Dollars in millions)

California

 

$

103

 

$

4

 

$

4

 

$

111

 

 

23

%

Florida

 

 

73

 

 

2

 

 

3

 

 

78

 

 

16

%

North Carolina

 

 

37

 

 

1

 

 

2

 

 

40

 

 

8

%

Pennsylvania

 

 

35

 

 

 

 

1

 

 

36

 

 

7

%

New York

 

 

28

 

 

2

 

 

2

 

 

32

 

 

6

%

Texas

 

 

19

 

 

1

 

 

6

 

 

26

 

 

5

%

New Jersey

 

 

17

 

 

3

 

 

3

 

 

23

 

 

5

%

Georgia

 

 

21

 

 

1

 

 

2

 

 

24

 

 

5

%

Other States

 

 

101

 

 

2

 

 

15

 

 

118

 

 

25

%

Total

 

$

434

 

$

16

 

$

38

 

$

488

 

 

100

%

(1)Of the SBL commercial mortgage and SBL construction loans, $125.0 million represents the total of the non-guaranteed portion of SBA 7(a) Program loans and non-SBA loans. The balance of those categories represents SBA 504 Program loans with 50%-60% origination date LTVs. SBL Commercial excludes $29.0 million of loans that do not qualify for true sale accounting.

Top 10 loans as of March 31, 2024

 

 

 

 

 

 

 

 

Type(1)

 

State

 

SBL commercial mortgage

 

 

 

 

(Dollars in millions)

General line grocery merchant wholesalers

 

 

CA

 

$

13

 

Funeral homes and funeral services

 

 

PA

 

 

13

 

Outpatient mental health and substance abuse center

 

 

FL

 

 

10

 

Funeral homes and funeral services

 

 

ME

 

 

9

 

Hotel

 

 

FL

 

 

8

 

Lawyer's office

 

 

CA

 

 

8

 

Hotel

 

 

NC

 

 

7

 

General warehousing and storage

 

 

PA

 

 

6

 

Hotel

 

 

FL

 

 

6

 

Hotel

 

 

NY

 

 

6

 

Total

 

 

 

 

$

86

 

(1)The table above does not include loans to the extent that they are U.S. government guaranteed.

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

Type as of March 31, 2024

 

 

 

 

 

 

 

 

 

 

 

Type

 

 

# Loans

 

Balance

 

Weighted average origination date LTV

 

Weighted average interest rate

 

 

 

(Dollars in millions)

Real estate bridge loans (multi-family apartment loans recorded at amortized cost)(1)

 

 

156

 

$

2,102

 

 

70

%

 

9.27

%

 

 

 

 

 

 

 

 

 

 

 

Non-SBA commercial real estate loans, at fair value:

 

 

 

 

 

 

 

 

 

 

Multi-family (apartment bridge loans)(1)

 

 

8

 

$

129

 

 

77

%

 

9.15

%

Hospitality (hotels and lodging)

 

 

2

 

 

27

 

 

65

%

 

9.82

%

Retail

 

 

2

 

 

12

 

 

72

%

 

8.19

%

Other

 

 

2

 

 

9

 

 

73

%

 

4.97

%

 

 

 

14

 

 

177

 

 

74

%

 

8.97

%

Fair value adjustment

 

 

 

 

 

(3

)

 

 

 

 

Total non-SBA commercial real estate loans, at fair value

 

 

 

 

 

174

 

 

 

 

 

Total commercial real estate loans

 

 

 

 

$

2,276

 

 

70

%

 

9.26

%

(1)In the third quarter of 2021, we resumed the origination of bridge loans for multi-family apartment rehabilitation which comprise these categories. Such loans held at fair value were originally intended for sale, but are now being retained on the balance sheet. In addition to “as is” origination date appraisals, on which the weighted average origination date LTVs are based, third party appraisers also estimated “as stabilized” values, which represents additional potential collateral value as rehabilitation progresses, and units are re-leased at stabilized rental rates. The weighted average origination date “as stabilized” LTV was estimated at 61%.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State diversification as of March 31, 2024

 

 

15 largest loans as of March 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State

 

Balance

 

 

Origination date LTV

 

 

State

 

 

Balance

 

Origination date LTV

(Dollars in millions)

 

 

(Dollars in millions)

Texas

 

$

827

 

 

72

%

 

 

Texas

 

 

$

47

 

72

%

Georgia

 

 

251

 

 

69

%

 

 

Texas

 

 

 

46

 

75

%

Florida

 

 

244

 

 

69

%

 

 

Tennessee

 

 

 

40

 

72

%

Michigan

 

 

131

 

 

68

%

 

 

Texas

 

 

 

39

 

75

%

Indiana

 

 

105

 

 

71

%

 

 

Michigan

 

 

 

37

 

62

%

Ohio

 

 

73

 

 

67

%

 

 

Texas

 

 

 

37

 

80

%

New Jersey

 

 

69

 

 

68

%

 

 

Texas

 

 

 

36

 

67

%

Other States each <$60 million

 

 

576

 

 

71

%

 

 

Florida

 

 

 

35

 

72

%

Total

 

$

2,276

 

 

70

%

 

 

Indiana

 

 

 

34

 

76

%

 

 

 

 

 

 

 

 

 

Texas

 

 

 

33

 

62

%

 

 

 

 

 

 

 

 

 

Michigan

 

 

 

33

 

79

%

 

 

 

 

 

 

 

 

 

Oklahoma

 

 

 

31

 

78

%

 

 

 

 

 

 

 

 

 

Texas

 

 

 

31

 

77

%

 

 

 

 

 

 

 

 

 

New Jersey

 

 

 

31

 

62

%

 

 

 

 

 

 

 

 

 

Michigan

 

 

 

30

 

66

%

 

 

 

 

 

 

 

 

 

15 largest commercial real estate loans

 

 

$

540

 

72

%

Institutional banking loans outstanding at March 31, 2024

 

 

 

 

 

Type

Principal

 

% of total

 

 

(Dollars in millions)

 

 

SBLOC

$

955

 

54

%

IBLOC

 

595

 

33

%

Advisor financing

 

232

 

13

%

Total

$

1,782

 

100

%

For SBLOC, we generally lend up to 50% of the value of equities and 80% for investment grade securities. While the value of equities has 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. Second, 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 March 31, 2024

 

 

 

 

 

 

Principal amount

 

% Principal to collateral

 

(Dollars in millions)

 

$

11

 

18

%

 

 

9

 

43

%

 

 

9

 

38

%

 

 

8

 

70

%

 

 

8

 

67

%

 

 

8

 

24

%

 

 

7

 

74

%

 

 

7

 

22

%

 

 

7

 

42

%

 

 

7

 

32

%

Total and weighted average

$

81

 

42

%

Insurance backed lines of credit (IBLOC)

IBLOC loans are backed by the cash value of eligible life insurance policies which have been assigned to us. We generally lend up to 95% of such cash value. Our underwriting standards require approval of the insurance companies which carry the policies backing these loans. Currently, fifteen insurance companies have been approved and, as of March 31, 2024, all were rated A- (Excellent) or better by AM BEST.

Direct lease financing by type as of March 31, 2024

 

 

 

 

 

 

Principal balance(1)

 

% Total

 

(Dollars in millions)

 

 

Government agencies and public institutions(2)

$

122

 

17

%

Construction

 

114

 

16

%

Waste management and remediation services

 

108

 

15

%

Real estate and rental and leasing

 

70

 

10

%

Health care and social assistance

 

29

 

4

%

General freight trucking

 

25

 

4

%

Professional, scientific, and technical services

 

25

 

4

%

Other services (except public administration)

 

24

 

3

%

Wholesale trade

 

19

 

3

%

Transportation and warehousing

 

14

 

2

%

Finance and insurance

 

11

 

2

%

Food manufacturing

 

9

 

1

%

Other

 

133

 

19

%

Total

$

703

 

100

%

(1)Of the total $703.0 million of direct lease financing, $631.0 million consisted of vehicle leases with the remaining balance consisting of equipment leases.

(2)Includes public universities and school districts.

Direct lease financing by state as of March 31, 2024

 

 

 

 

 

State

Principal balance

 

% Total

 

(Dollars in millions)

 

 

Florida

$

101

 

14

%

Utah

 

68

 

10

%

New York

 

61

 

9

%

California

 

55

 

8

%

Pennsylvania

 

41

 

6

%

New Jersey

 

40

 

6

%

North Carolina

 

36

 

5

%

Connecticut

 

34

 

5

%

Maryland

 

33

 

5

%

Texas

 

29

 

4

%

Idaho

 

18

 

3

%

Washington

 

16

 

2

%

Georgia

 

15

 

2

%

Ohio

 

12

 

2

%

Alabama

 

12

 

2

%

Other States

 

132

 

17

%

Total

$

703

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital ratios

Tier 1 capital

 

Tier 1 capital

 

Total capital

 

Common equity

 

to average

 

to risk-weighted

 

to risk-weighted

 

tier 1 to risk

 

assets ratio

 

assets ratio

 

assets ratio

 

weighted assets

As of March 31, 2024

 

 

 

 

 

 

 

The Bancorp, Inc.

10.87

%

 

15.76

%

 

16.35

%

 

15.76

%

The Bancorp Bank, National Association

12.05

%

 

17.43

%

 

18.02

%

 

17.43

%

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

5.00

%

 

8.00

%

 

10.00

%

 

6.50

%

 

 

 

 

 

 

 

 

As of December 31, 2023

 

 

 

 

 

 

 

The Bancorp, Inc.

11.19

%

 

15.66

%

 

16.23

%

 

15.66

%

The Bancorp Bank, National Association

12.37

%

 

17.35

%

 

17.92

%

 

17.35

%

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

5.00

%

 

8.00

%

 

10.00

%

 

6.50

%

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Year ended

 

March 31,

 

December 31,

 

2024

 

2023

 

2023

Selected operating ratios

 

 

 

 

 

 

 

 

Return on average assets(1)

 

2.97

%

 

 

2.63

%

 

 

2.59

%

Return on average equity(1)

 

27.95

%

 

 

28.07

%

 

 

25.62

%

Net interest margin

 

5.15

%

 

 

4.67

%

 

 

4.95

%

(1)Annualized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share table

March 31,

 

December 31,

 

September 30,

 

March 31,

 

2024

 

2023

 

2023

 

2023

Book value per share

$

15.63

 

$

15.17

 

$

14.36

 

$

13.11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan quality table

March 31,

 

December 31,

 

September 30,

 

March 31,

 

2024

 

2023

 

2023

 

2023

 

 

(Dollars in thousands)

Nonperforming loans to total loans(1)

 

1.05

%

 

 

0.25

%

 

 

0.30

%

 

 

0.26

%

Nonperforming assets to total assets(1)

 

0.97

%

 

 

0.39

%

 

 

0.46

%

 

 

0.46

%

Allowance for credit losses to total loans

 

0.53

%

 

 

0.51

%

 

 

0.46

%

 

 

0.44

%

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans(1)

$

53,024

 

 

$

11,525

 

 

$

15,100

 

 

$

12,938

 

Loans 90 days past due still accruing interest

 

4,108

 

 

 

1,744

 

 

 

677

 

 

 

873

 

Other real estate owned

 

19,559

 

 

16,949

 

 

18,756

 

 

21,117

 

Total nonperforming assets(1)

$

76,691

 

 

$

30,218

 

 

$

34,533

 

 

$

34,928

 

(1) In the first quarter of 2024, a $39.4 million apartment building rehabilitation bridge loan was transferred to nonaccrual status. On April 2, 2024 the same loan was transferred from nonaccrual status to other real estate owned. We intend to complete the improvements, which have already begun, on the underlying apartment building. During the time that improvements are being completed, the Company intends to have a property manager lease improved units as they become available, prior to the sale of the property. The $39.4 million loan balance compares to a September 2023 third party “as is” appraisal of $47.8 million, or an 82% “as is” LTV, with additional potential collateral value as construction progresses, and units are re-leased at stabilized rental rates.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross dollar volume (GDV) (1)

Three months ended

 

March 31,

 

December 31,

 

 

September 30,

 

March 31,

 

2024

 

2023

 

 

2023

 

2023

 

(Dollars in thousands)

Prepaid and debit card GDV

$

37,943,338

 

$

33,292,350

 

 

$

32,972,249

 

$

34,011,792

 

(1)Gross dollar volume represents the total dollar amount spent on prepaid and debit cards issued by The Bancorp Bank, N.A.

 

 
 

Business line quarterly summary

Quarter ended March 31, 2024

(Dollars in millions)

 

Balances

% Growth

Major business lines

Average approximate rates(1)

Balances(2)

Year over year

 

Linked quarter annualized

Loans

Institutional banking(3)

6.8

%

$

1,782

(21

%)

(14

%)

Small business lending(4)

7.1

%

 

925

14

%

13

%

Leasing

8.0

%

 

703

8

%

10

%

Commercial real estate (non-SBA loans, at fair value)

9.0

%

 

174

nm

 

nm

 

Real estate bridge loans (recorded at book value)

 

9.2

%

 

 

2,102

 

20

%

 

20

%

 

 

 

 

 

Weighted average yield

8.0

%

$

5,686

Non-interest income(5)

% Growth

Deposits: Fintech solutions group

Current quarter

Year over year

Prepaid and debit card issuance, and other payments

2.5

%

$

6,179

4

%

nm

 

$

27.3

16

%

(1)Average rates are for the three months ended March 31, 2024.

(2)Loan and deposit categories are based on period-end and average quarterly balances, respectively.

(3)Institutional Banking loans are comprised of security backed lines of credit (SBLOC), collateralized by marketable securities, insurance backed lines of credit (IBLOC), collateralized by the cash surrender value of eligible life insurance policies, and investment advisor financing.

(4)Small Business Lending is substantially comprised of SBA loans. Growth rates exclude $29.0 million of loans that do not qualify for true sale accounting.

(5)Growth rate excludes Q1 2023 adjustments of $600,000 of fees related to a prior period and a $1.4 million termination fee from a client which formed its own bank.

Summary of credit lines available

Notwithstanding that the vast majority of The Bancorp’s funding is comprised of insured and small balance accounts, The Bancorp maintains lines of credit exceeding potential liquidity requirements as follows. The Bancorp also has access to other substantial sources of liquidity.

 

 

 

 

March 31, 2024

 

 

(Dollars in thousands)

Federal Reserve Bank

$

1,945,876

Federal Home Loan Bank

 

731,500

Total lines of credit available

$

2,677,376

Estimated insured vs uninsured deposits

The vast majority of The Bancorp’s deposits are insured and low balance and accordingly do not constitute the liquidity risk experienced by certain institutions. Accordingly the deposit base is comprised as follows.

 

 

 

 

March 31, 2024

Insured

 

92

%

Low balance accounts

 

4

%

Other uninsured

 

4

%

Total deposits

 

100

%

Calculation of efficiency ratio(1)

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Year ended

 

March 31,

 

March 31,

 

December 31,

 

2024

 

2023

 

2023

 

(Dollars in thousands)

Net interest income

$

94,418

 

 

$

85,816

 

 

$

354,052

 

Non-interest income

 

29,382

 

 

 

28,989

 

 

 

112,094

 

Total revenue

$

123,800

 

 

$

114,805

 

 

$

466,146

 

Non-interest expense

$

46,712

 

 

$

48,030

 

 

$

191,042

 

 

 

 

 

 

 

 

 

 

Efficiency ratio

 

38

%

 

 

42

%

 

 

41

%

(1) The efficiency ratio is calculated by dividing GAAP total non-interest expense by the total of GAAP net interest income and non-interest income. This ratio compares revenues generated with the amount of expense required to generate such revenues and may be used as one measure of overall efficiency.

 

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