Equibles

8-K

Bancorp, Inc. (TBBK)

8-K 2020-07-30 For: 2020-07-30
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Added on April 04, 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

Current Report

Pursuant to Section 13 or 15(d) of the SecuritiesExchange Act of 1934

Date of Report (Date of earliest event reported):  July30, 2020

The Bancorp, Inc.

(Exact name of registrant as specified inits charter)

Commission File Number:  000-51018

Delaware 23-3016517
(State or other jurisdiction of (IRS Employer
incorporation) Identification No.)

409 Silverside Road

Wilmington, DE 19809

(Address of principal executive offices,including zip code)

302-385-5000

(Registrant’s telephone number, includingarea code)

(Former name or former address, if changedsince last report)

Check the appropriate box below if the Form 8-K filingis intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]   Written communications pursuant toRule 425 under the Securities Act (17 CFR 230.425)[  ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)[  ]   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))[  ]   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b)of the Act:

Title of each class Trading<br><br> <br>Symbol(s) Name of each exchange on which registered
Common Stock, par value $1.00 per share TBBK Nasdaq Global Select

Indicate by check mark whether the registrant is an emerginggrowth company as defined in Rule 405 of the Securities Act of 1933 (§230.405) or Rule 12b-2 of the Securities Exchange Actof 1934 (§240.12b-2).

[ ] Emerging growth company

If an emerging growth company, indicate by check mark if theregistrant has elected not to use the extended transition period for complying with any new or revised financial accounting standardsprovided pursuant to Section 13(a) of the Exchange Act. [ ]

Item 2.02.    Resultsof Operations and Financial Condition

On July 30, 2020, The Bancorp, Inc. (the "Company") issued a press release regarding its earnings for the three and six months ended June 30, 2020. A copy of this press release is furnished with this report as Exhibit 99.1.

Item 7.01. Regulation FD Disclosure.

The information being furnished pursuant to Item 2.02 in this Current Report, including the exhibit hereto, is to be considered “furnished” pursuant to Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.

Item 9.01.  Financial Statements and Exhibits

(d)          Exhibits

99.1       Press Release

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:  July 30, 2020 The Bancorp, Inc.
By: /s/ Paul Frenkiel
Name: Paul Frenkiel
Title: Chief Financial Officer and Secretary

Exhibit 99.1

TheBancorp, Inc. Reports Second Quarter 2020 Financial Results

Wilmington, DE – July 30, 2020 – The Bancorp, Inc. ("The Bancorp") (NASDAQ: TBBK), a financial holding company, today reported financial results for the second quarter of 2020.

Highlights

· For the quarter ended June 30, 2020, The Bancorp earned net income of $20.3 million from continuing operations, and $0.35 diluted<br>earnings per share from combined continuing and discontinued operations.
· Return on assets and equity for the quarter ended June 30, 2020 increased to 1.3% and 15.6%, respectively, compared to 1.0%<br>and 10.2% for the quarter ended June 30, 2019.
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· Net interest margin increased to 3.53% for the quarter ended June 30, 2020, compared to 3.41% for the quarter ended June 30,<br>2019 and 3.34% for the quarter ended March 31, 2020.
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· Net interest income increased 45% to $50.2 million for the quarter ended June 30, 2020, compared to $34.5 million for the quarter<br>ended June 30, 2019.
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· Average loans and leases, including loans held for sale, increased 76% to $3.93 billion for the quarter ended June 30, 2020,<br>compared to $2.23 billion for the quarter ended June 30, 2019.
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· Prepaid, debit card and related fees increased 18% to $18.7 million for the quarter ended June 30, 2020, compared to $15.8<br>million for the quarter ended June 30, 2019. Gross dollar volume (GDV), representing total spend on cards, increased 43%.
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· SBLOC (securities-backed lines of credit) and IBLOC (insurance backed lines of credit) loans increased 54% year over year and<br>11% quarter over quarter to $1.3 billion at June 30, 2020.
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· Small Business Loans, including those held-for-sale, increased 16% year over year to $601.4 million at June 30, 2020, exclusive<br>of $208 million of Paycheck Protection Program loans.
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· As of June 30, 2020, we have originated approximately 1,250 Paycheck Protection Program loans, totaling approximately $208<br>million, which we expect will generate approximately $5.5 million of fees and interest. We believe that income will be recognized<br>over eleven months, beginning in April 2020. The average loan size was approximately $165,000 with 92% of the loans under $350,000.
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· The average rate on $5.4 billion of average deposits and interest-bearing liabilities in the second quarter of 2020 was 0.12%.<br>Average prepaid and debit card account deposits of $3.9 billion for second quarter 2020, reflected an increase of 56% over the<br>$2.5 billion for the quarter ended June 30, 2019.
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· Consolidated leverage ratio was 8.48% at June 30, 2020. The Bancorp and its subsidiary, The Bancorp Bank (the “Bank”),<br>remain well capitalized.
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· Book value per common share at June 30, 2020 was $9.28 per share compared to $8.07 at June 30,<br>2019, an increase of 15%.
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Damian Kozlowski, The Bancorp’s Chief Executive Officer, said, “We have continued to experience momentum in our core earnings driven by higher interest income with falling interest expense, increased loan balances and higher payment volumes. In the second quarter of 2020, the Bancorp earned 35 cents a share from both increased fee and spread revenue. While the pandemic continues to be a significant source of market uncertainty, we have been able to achieve better revenue productivity and operating efficiency during this time, while also making investments in our platform. Our earnings guidance for full year 2020 continues to be $1.25 per share.”

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The Bancorp reported net income of $20.1 million, or $0.35 per diluted share, for the quarter ended June 30, 2020, compared to net income of $11.4 million, or $0.20 per diluted share, for the quarter ended June 30, 2019. 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 8.48%, 14.84%, 15.27% and 14.84%, 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 31, 2020 by clicking on the webcast link on The Bancorp's homepage at www.thebancorp.com. Or, you may dial 844.775.2543, access code 2755988. 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 7, 2020 by dialing 855.859.2056, access code 2755988.

The Bancorp, Inc. (NASDAQ: TBBK) is dedicated to serving the unique needs of non-bank financial service companies, ranging from entrepreneurial start-ups to those on the Fortune 500. The company’s only subsidiary, The Bancorp Bank (Member FDIC, Equal Housing Lender), has been repeatedly recognized in the payments industry as the Top Issuer of Prepaid Cards (US), a top merchant sponsor bank and a top ACH originator. Specialized lending distinctions include National Preferred SBA Lender, a leading provider of securities-backed lines of credit, and one of the few bank-owned commercial vehicle leasing groups in the nation. For more information please visit www.thebancorp.com.

Forward-Looking Statements

Statements in this earnings release regarding The Bancorp’s business which are not historical facts are "forward-looking statements." These statements may be identified by the use of forward-looking terminology, including but not limited to the words “may,” “believe,” “will,” “expect,” “look,” “anticipate,” “estimate,” “continue,” or similar words , 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. These risks and uncertainties include those relating to the on-going COVID-19 pandemic, the impact it will have on our business and the industry as a whole, and the resulting governmental and societal responses. For further discussion of the risks and uncertainties to which these forward-looking statements may be subject, see The Bancorp’s filings with the Securities Exchange Commission, including the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of those filings. The forward-looking statements speak only as of the date of this press release. The Bancorp does not undertake to publicly revise or update forward-looking statements in this press release to reflect events or circumstances that arise after the date of this earnings release, except as may be required under applicable law.

The Bancorp, Inc. Contact

Andres Viroslav

Director, Investor Relations

215-861-7990

aviroslav@thebancorp.com

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The Bancorp, Inc.
Financial highlights
(unaudited)
Three months ended Six months ended
June 30, June 30,
Condensed income statement 2020 2019 2020 2019
(dollars in thousands except per share data)
Net interest income $ 50,246 $ 34,539 $ 93,157 $ 68,549
Provision for loan and lease losses 922 600 4,501 2,300
Non-interest income
Service fees on deposit accounts 5 14 15 61
ACH, card and other payment processing fees 1,707 2,521 3,553 4,824
Prepaid, debit card and related fees 18,673 15,840 37,213 32,003
Net realized and unrealized gains (losses) on commercial loans originated for sale (940 ) (148 ) (6,096 ) 10,615
Change in value of investment in unconsolidated entity — — (45 ) —
Leasing related income 443 1,027 1,276 1,722
Other non-interest income 478 495 1,049 889
Total non-interest income 20,366 19,749 36,965 50,114
Non-interest expense
Salaries and employee benefits 25,492 21,826 48,233 45,666
Data processing expense 1,177 1,223 2,346 2,492
Legal expense 2,229 1,534 3,142 2,858
FDIC Insurance 2,918 2,095 5,507 4,024
Software 3,386 3,060 6,863 5,981
Lease termination expense — 908 — 908
Other non-interest expense 7,418 8,873 14,947 16,819
Total non-interest expense 42,620 39,519 81,038 78,748
Income from continuing operations before income taxes 27,070 14,169 44,583 37,615
Income tax expense 6,787 3,575 11,139 9,610
Net income from continuing operations 20,283 10,594 33,444 28,005
Discontinued operations
Income (loss) from discontinued operations before income taxes (274 ) 919 (1,049 ) 1,724
Income tax expense (benefit) (59 ) 163 (264 ) 449
Net income<br>(loss) from discontinued operations, net of tax (215 ) 756 (785 ) 1,275
Net income $ 20,068 $ 11,350 $ 32,659 $ 29,280
Net income per share from continuing operations - basic $ 0.35 $ 0.19 $ 0.58 $ 0.50
Net income (loss) per share from discontinued operations - basic $ — $ 0.01 $ (0.01 ) $ 0.02
Net income per share - basic $ 0.35 $ 0.20 $ 0.57 $ 0.52
Net income per share from continuing operations - diluted $ 0.35 $ 0.19 $ 0.58 $ 0.49
Net income (loss) per share from discontinued operations - diluted $ — $ 0.01 $ (0.01 ) $ 0.02
Net income per share - diluted $ 0.35 $ 0.20 $ 0.57 $ 0.51
Weighted average shares - basic 57,489,719 56,702,182 57,355,282 56,612,596
Weighted average shares - diluted 57,800,115 57,197,433 57,856,791 57,031,206 
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Balance sheet March 31, December 31, June 30,
2020 2019 2019
Assets:
Cash and cash equivalents
Cash and due from banks 5,094 $ 13,610 $ 19,928 $ 27,450
Interest earning deposits at Federal Reserve Bank 475,627 105,978 924,544 284,823
Total cash and cash equivalents 480,721 119,588 944,472 312,273
Investment securities, available-for-sale, at fair value 1,324,447 1,353,278 1,320,692 1,361,779
Investment securities, held-to-maturity, at cost — — 84,387 84,414
Commercial loans held for sale, at fair value 1,807,630 1,716,450 1,180,546 934,452
Loans, net of deferred fees and costs 2,322,737 1,985,755 1,824,245 1,561,451
Allowance for credit losses (14,625 ) (14,883 ) (10,238 ) (9,989 )
Loans, net 2,308,112 1,970,872 1,814,007 1,551,462
Federal Home Loan Bank & Atlantic Community Bancshares stock 1,368 1,142 5,342 6,342
Premises and equipment, net 16,701 17,148 17,538 17,380
Accrued interest receivable 18,897 15,660 13,619 14,567
Intangible assets, net 2,710 2,857 2,315 3,081
Deferred tax asset, net 7,921 12,797 12,538 14,574
Investment in unconsolidated entity 34,064 34,273 39,154 58,012
Assets held for sale from discontinued operations 128,463 134,118 140,657 169,109
Other assets 83,003 79,925 81,696 76,123
Total assets 6,214,037 $ 5,458,108 $ 5,656,963 $ 4,603,568
Liabilities:
Deposits
Demand and interest checking 5,089,741 $ 4,512,949 $ 4,402,740 $ 3,964,905
Savings and money market 455,458 178,174 174,290 26,841
Time deposits — — 475,000 —
Total deposits 5,545,199 4,691,123 5,052,030 3,991,746
Securities sold under agreements to repurchase 42 42 82 93
Short-term borrowings — 140,000 — 45,000
Subordinated debenture 13,401 13,401 13,401 13,401
Long-term borrowings 40,639 40,813 40,991 41,334
Other liabilities 81,677 74,625 65,962 53,862
Total liabilities 5,680,958 $ 4,960,004 $ 5,172,466 $ 4,145,436
Shareholders' equity:
Common stock - authorized, 75,000,000 shares of 1.00 par value; 57,555,308 and 56,874,956 shares issued and outstanding at June 30, 2020 and 2019, respectively 57,555 57,426 56,941 56,875
Treasury stock (100,000 shares) (866 ) (866 ) (866 ) (866 )
Additional paid-in capital 374,578 372,984 371,633 368,771
Retained earnings 81,028 60,960 50,742 28,463
Accumulated other comprehensive income 20,784 7,600 6,047 4,889
Total shareholders' equity 533,079 498,104 484,497 458,132
Total liabilities and shareholders' equity 6,214,037 $ 5,458,108 $ 5,656,963 $ 4,603,568

All values are in US Dollars.

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Average balance sheet and net interest income Three months ended June 30, 2020 Three months ended June 30, 2019
(dollars in thousands)
Average Average Average Average
Assets: Balance Interest Rate Balance Interest Rate
Interest earning assets:
Loans net of deferred fees and costs ** $ 3,925,515 $ 41,448 4.22 % $ 2,216,935 $ 29,737 5.37 %
Leases - bank qualified* 9,217 162 7.03 % 15,446 268 6.94 %
Investment securities-taxable 1,334,368 10,188 3.05 % 1,443,671 11,634 3.22 %
Investment securities-nontaxable* 4,402 35 3.18 % 6,610 54 3.27 %
Interest earning deposits at Federal Reserve Bank 426,174 107 0.10 % 420,153 2,455 2.34 %
Net interest earning assets 5,699,676 51,940 3.65 % 4,102,815 44,148 4.30 %
Allowance for credit losses (14,822 ) (9,963 )
Assets held for sale from discontinued operations 130,530 1,094 3.35 % 154,057 1,659 4.31 %
Other assets 228,443 283,036
$ 6,043,827 $ 4,529,945
Liabilities and Shareholders' Equity:
Deposits:
Demand and interest checking $ 5,140,167 $ 1,390 0.11 % $ 3,847,623 $ 8,783 0.91 %
Savings and money market 234,201 120 0.20 % 26,497 40 0.60 %
Total deposits 5,374,368 1,510 0.11 % 3,874,120 8,823 0.91 %
Short-term borrowings 16,428 15 0.37 % 80,242 526 2.62 %
Securities sold under agreements to repurchase 41 — 0.00 % 92 — 0.00 %
Subordinated debentures 13,401 128 3.82 % 13,401 192 5.73 %
Total deposits and liabilities 5,404,238 1,653 0.12 % 3,967,855 9,541 0.96 %
Other liabilities 123,997 115,634
Total liabilities 5,528,235 4,083,489
Shareholders' equity 515,592 446,456
$ 6,043,827 $ 4,529,945
Net interest income on tax equivalent basis* $ 51,381 $ 36,266
Tax equivalent adjustment 41 68
Net interest income $ 51,340 $ 36,198
Net interest margin * 3.53 % 3.41 %
* Full taxable equivalent basis, using a statutory Federal tax rate of 21% for 2020 and 2019.
** Includes loans held for sale. 
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Average balance sheet and net interest income Six months ended June 30, 2020 Six months ended June 30, 2019
(dollars in thousands)
Average Average Average Average
Assets: Balance Interest Rate Balance Interest Rate
Interest earning assets:
Loans net of deferred fees and costs ** $ 3,593,921 $ 80,607 4.49 % $ 2,241,746 $ 59,898 5.34 %
Leases - bank qualified* 10,096 362 7.17 % 16,613 695 8.37 %
Investment securities-taxable 1,364,956 20,683 3.03 % 1,374,019 22,164 3.23 %
Investment securities-nontaxable* 4,788 75 3.13 % 7,075 114 3.22 %
Interest earning deposits at Federal Reserve Bank 460,025 1,730 0.75 % 421,580 4,957 2.35 %
Net interest earning assets 5,433,786 103,457 3.81 % 4,061,033 87,828 4.33 %
Allowance for credit losses (12,532 ) (9,305 )
Assets held for sale from discontinued operations 133,903 2,368 3.54 % 163,874 3,684 4.50 %
Other assets 233,088 272,922
$ 5,788,245 $ 4,488,524
Liabilities and Shareholders' Equity:
Deposits:
Demand and interest checking $ 4,746,928 $ 8,085 0.34 % $ 3,838,868 $ 17,616 0.92 %
Savings and money market 203,888 170 0.17 % 28,931 77 0.53 %
Time 159,752 1,483 1.86 % — — —
Total deposits 5,110,568 9,738 0.38 % 3,867,799 17,693 0.91 %
Short-term borrowings 36,620 180 0.98 % 77,330 1,029 2.66 %
Securities sold under agreements to repurchase 57 — 0.00 % 91 — 0.00 %
Subordinated debentures 13,401 290 4.33 % 13,401 387 5.78 %
Total deposits and liabilities 5,160,646 10,208 0.40 % 3,958,621 19,109 0.97 %
Other liabilities 118,811 97,449
Total liabilities 5,279,457 4,056,070
Shareholders' equity 508,788 432,454
$ 5,788,245 $ 4,488,524
Net interest income on tax equivalent basis* $ 95,617 $ 72,403
Tax equivalent adjustment 92 170
Net interest income $ 95,525 $ 72,233
Net interest margin * 3.43 % 3.43 %
* Full taxable equivalent basis, using a statutory rate of 21% for 2020 and 2019.
** Includes loans held for sale. 
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Allowance for loan and lease losses: Six months ended Year ended
June 30, June 30, December 31,
2020 2019 2019
(dollars in thousands)
Balance in the allowance for loan and lease losses at beginning of period (1) $ 12,874 $ 8,653 $ 8,653
Loans charged-off:
SBA non-real estate 1,048 893 1,362
Direct lease financing 1,552 185 528
Other consumer loans — 2 1,103
Total 2,600 1,080 2,993
Recoveries:
SBA non-real estate 54 100 125
Direct lease financing 90 16 51
Other consumer loans — — 2
Total 144 116 178
Net charge-offs 2,456 964 2,815
Provision credited to allowance, excluding commitment provision 4,207 2,300 4,400
Balance in allowance for loan and lease losses at end of period $ 14,625 $ 9,989 $ 10,238
Net charge-offs/average loans 0.06 % 0.04 % 0.12 %
Net charge-offs/average loans (annualized) 0.12 % 0.09 % 0.12 %
Net charge-offs/average assets 0.04 % 0.02 % 0.06 %
(1) Excludes activity from assets held for sale from discontinued operations.
Loan portfolio: June 30, March 31, December 31, June 30,
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2020 2020 2019 2019
(in thousands)
SBL non-real estate $ 293,692 $ 84,946 $ 84,579 $ 75,475
SBL commercial mortgage 259,020 233,220 218,110 189,427
SBL construction 33,193 48,823 45,310 29,298
Small business loans * 585,905 366,989 347,999 294,200
Direct lease financing 422,505 445,967 434,460 407,907
SBLOC / IBLOC** 1,287,350 1,156,433 1,024,420 837,672
Advisor financing *** 15,529 — — —
Other specialty lending 2,706 2,711 3,055 3,432
Other consumer loans **** 4,003 4,023 4,554 7,898
2,317,998 1,976,123 1,814,488 1,551,109
Unamortized loan fees and costs 4,739 9,632 9,757 10,342
Total loans, net of unamortized fees and costs $ 2,322,737 $ 1,985,755 $ 1,824,245 $ 1,561,451
Small business portfolio: June 30,<br><br> <br>2020 March 31, 2020 December 31,<br><br> <br>2020 June 30,<br><br> <br>2020
(in thousands)
SBL, including unamortized fees and costs 583,935 371,072 352,214 301,502
SBL, included in held-for-sale 225,401 223,987 220,358 215,064
Total small business loans $ 809,336 $ 595,059 $ 572,572 $ 516,566
* The preceding table<br> shows small business loans and small business loans held-for-sale, which consist of the government guaranteed portion of SBA<br> loans at the dates indicated (in thousands).
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** Securities<br> Backed Lines of Credit (SBLOC) are collateralized by marketable securities, while Insurance Backed Lines of Credit (IBLOC)<br> are collateralized by the cash surrender value of insurance policies.
*** In<br> 2020 we began originating loans to investment advisors for purposes of debt refinance, acquisition of another firm or internal<br> succession.  Maximum loan amounts are subject to loan to value ratios of 70%, based on third party business appraisals,<br> but may be increased depending upon the debt service coverage ratio.  Personal guarantees and blanket business liens<br> are obtained as appropriate.
**** Included<br> in the table above under Other consumer loans are demand deposit overdrafts reclassified as loan balances totaling $361,000<br> and $882,000 at June 30, 2020 and December 31, 2019, respectively.  Estimated overdraft charge-offs and recoveries<br> are reflected in the allowance for loan and lease losses. 
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Small business loans as of June 30, 2020
Loan principal
(in millions)
U.S. government guaranteed portion of SBA loans (a) $ 306
Paycheck Protection Program Loans (PPP) (a) 208
Commercial mortgage SBA (b) 165
Construction SBA (c) 16
Unguaranteed portion of U.S. government guaranteed loans (d) 89
Non-SBA small business loans (e) 22
Total principal $ 806
Fair value adjustment (f) 5
Unamortized fees (2 )
Total small business loans $ 809
(a)   This is the portion of SBA 7a loans (7a) and PPP which have been guaranteed by the U.S. government, and therefore are assumed to have no credit risk.
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(b)   Substantially all of 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 $16 million Construction SBA loans, $12 million are 504 first mortgages with an origination date LTV of 50-60% and $4 million are SBA interim loans with an approved SBA post-construction full takeout/payoff.
(d)  The $89 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)   Of the $22 million in non-SBA loans, $3 million are bridge loans with permanent lender takeout commitments, $2 million is a secured conventional loan with an 80% origination date LTV and $17 million consist of approximately 20 conventional coffee/doughnut/carryout franchisee note purchases. The majority of purchased notes were made to multi-unit operators and 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.
(f)   The fair value adjustment applies to the U.S. government guaranteed portion of SBA loans.
Additionally, the recently passed CARES Act of 2020 has provided significant support for SBA loans including funding intended to provide six months of interest payments on SBA loans, as well as other accommodations to provide for the payment of payroll and other operating expenses.
Type as of June 30, 2020
--- --- --- --- --- --- --- --- --- --- --- ---
(Excludes government guaranteed portion of SBA 7a and PPP loans)
SBL commercial mortgage* SBL construction* SBL non-real estate Total % Total
(in millions)
Hotels $ 68 $ 7 $ — $ 75 26 %
Professional services offices 22 — 2 24 8 %
Full-service restaurants 15 1 5 21 7 %
Child day care and youth services 15 — 1 16 6 %
Bakeries 4 — 12 16 6 %
Fitness/rec centers and instruction 8 — 4 12 4 %
General warehousing and storage 11 — — 11 4 %
Limited-service restaurants and catering 7 — 4 11 4 %
Elderly assisted living facilities 2 7 2 11 4 %
Amusement and recreation industries 5 1 1 7 2 %
Car washes 3 3 — 6 2 %
Funeral homes 5 — — 5 2 %
New and used car dealers 4 — — 4 1 %
Automotive servicing 3 — 1 4 1 %
Other 45 1 23 69 23 %
Total $ 217 $ 20 $ 55 $ 292 100 %

* Substantially all are SBA loans with 50-60% loan to value ratios at their origination.

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State diversification as of June 30, 2020
(Excludes government guaranteed portion of SBA 7a and PPP loans)
SBL commercial mortgage* SBL construction* SBL non-real estate Total % Total
(in millions)
Florida $ 33 $ 7 $ 7 $ 47 16 %
California 34 2 5 41 14 %
Pennsylvania 30 — 4 34 11 %
Illinois 28 — 4 32 11 %
North Carolina 24 1 3 28 10 %
Texas 11 — 5 16 6 %
New York 10 1 5 16 5 %
Tennessee 7 6 1 14 5 %
New Jersey 2 1 7 10 4 %
Virginia 8 1 2 11 4 %
Georgia 5 — 2 7 2 %
Michigan 3 — 1 4 2 %
Colorado 2 — 1 3 1 %
Ohio 3 — — 3 1 %
Other states 17 1 8 26 8 %
Total $ 217 $ 20 $ 55 $ 292 100 %

* Substantially all are SBA loans with 50-60% loan to value ratios at their origination.

.

Top 10 loans as of June 30, 2020
Type* State SBL commercial mortgage* SBL construction* Total
(in millions)
Professional services office CA $ 9 $ — $ 9
Hotel FL 9 — 9
General warehouse PA 8 — 8
Hotel NC 6 — 6
Assisted living facility FL — 5 5
Hotel NC 5 — 5
Fitness and rec center PA 4 — 4
Hotel PA 4 — 4
Hotel TN — 4 4
Gas Station VA 3 — 3
Total $ 48 $ 9 $ 57

* All of the top 10 loans are SBA and with the rest of the commercial real estate portfolio were originated with an approximate loan to value ratio between 50% and 60% at origination .

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Commercial real estate loans held for sale which were originated for sale or securitization, excluding SBA loans, are as follows including LTV at origination:

Type as of June 30, 2020
Type # Loans Balance Origination date LTV Weighted average minimum interest rate
(dollars in millions)
Multifamily (apartments) 181 $ 1,450 76 % 4.77 %
Hospitality (hotels and lodging)* 11 60 65 % 5.70 %
Retail 7 52 72 % 4.96 %
Other 8 25 69 % 5.20 %
207 $ 1,587 75 % 4.82 %
Fair value adjustment * (5 )
Total $ 1,582

*Of the total $5 million fair value adjustment, $2 million was related to hospitality loans.

State diversification as of June 30, 2020 15 Largest loans (all multifamily) as of June 30, 2020
State Balance Origination date LTV State Balance Origination date LTV
(in millions) (in millions)
Texas 407 77 % North Carolina $ 43 78 %
Georgia 234 78 % Texas 37 79 %
Arizona 121 76 % Texas 35 80 %
North Carolina 109 78 % Pennsylvania 31 77 %
Nevada 56 80 % Georgia 31 80 %
Alabama 54 76 % Nevada 28 80 %
Other states each <50 million 606 73 % Texas 28 75 %
Total 1,587 75 % Texas 27 77 %
Arizona 26 79 %
Mississippi 25 79 %
Texas 24 77 %
North Carolina 24 77 %
Texas 24 77 %
California 23 65 %
Georgia 23 79 %
15 Largest loans $ 429 77 %

All values are in US Dollars.

10
Institutional banking loans outstanding at June 30, 2020
Type Principal % of total
(in millions)
Securities backed lines of credit (SBLOC) $1,003 77%
Insurance backed lines of credit (IBLOC) 284 22%
Advisor financing 16 1%
Total $1,303 100%

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 periods, 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 % principal to collateral. As a result, the accounts monitored by management and related information as of June 30, 2020 were as follows:

Top 10 SBLOC loans
Principal amount % Principal to collateral
(in millions)
$ 33 31 %
19 44 %
14 23 %
11 29 %
11 80 %
10 49 %
10 27 %
9 75 %
8 22 %
8 71 %
Total $ 133 42 %
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 January 21, 2020 all were rated Superior (A+ or better) by AM BEST. Moody’s ratings were at least A rated, and ranged from A3 to Aa2. 
11
Direct lease financing* by type as of June 30, 2020
Principal balance % Total
(in millions)
Government agencies and public institutions** $ 77 18 %
Construction 74 18 %
Waste management and remediation services 61 15 %
Retail trade 39 9 %
Transportation and warehousing 39 9 %
Real estate, rental and leasing 33 8 %
Health care and social assistance 26 6 %
Professional, scientific, and technical services 19 5 %
Manufacturing 13 3 %
Wholesale trade 13 3 %
Educational services 10 2 %
Arts, entertainment, and recreation 5 1 %
Other 14 3 %
Total $ 423 100 %
* Of the total $423 million of direct lease financing, $388 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, 2020
--- --- --- --- --- ---
State Principal balance % Total
(in millions)
Florida $ 99 23 %
New Jersey 30 7 %
Pennsylvania 27 6 %
New York 27 6 %
North Carolina 26 6 %
Maryland 24 6 %
California 21 5 %
Utah 19 4 %
Washington 16 4 %
Georgia 15 4 %
Connecticut 11 3 %
Alabama 11 3 %
Illinois 11 3 %
Texas 10 2 %
Missouri 7 2 %
Other states 69 16 %
Total $ 423 100 % 
12
Capital ratios: Tier 1 capital Tier 1 capital Total capital Common equity
to average to risk-weighted to risk-weighted tier 1 to risk
assets ratio assets ratio assets ratio weighted assets
As of June 30, 2020
The Bancorp, Inc. 8.48 % 14.84 % 15.27 % 14.84 %
The Bancorp Bank 8.34 % 14.56 % 14.98 % 14.56 %
"Well capitalized" institution (under FDIC regulations-Basel III) 5.00 % 8.00 % 10.00 % 6.50 %
As of December 31, 2019
The Bancorp, Inc. 9.63 % 19.04 % 19.45 % 19.04 %
The Bancorp Bank 9.46 % 18.71 % 19.11 % 18.71 %
"Well capitalized" institution (under FDIC regulations-Basel III) 5.00 % 8.00 % 10.00 % 6.50 %
Three months ended Six months ended
--- --- --- --- --- --- --- --- --- --- --- --- ---
June 30, June 30,
2020 2019 2020 2019
Selected operating ratios:
Return on average assets ^(1)^ 1.33 % 1.00 % 1.13 % 1.32 %
Return on average equity ^(1)^ 15.61 % 10.20 % 12.87 % 13.65 %
Net interest margin 3.53 % 3.41 % 3.43 % 3.43 %
(1) Annualized
Book value per share table: June 30, March 31, December 31, June 30,
--- --- --- --- --- --- --- --- --- --- --- --- --- ---
2020 2020 2019 2019
Book value per share $ 9.28 $ 8.69 $ 8.52 $ 8.07
Loan quality table: June 30, March 31, December 31, June 30,
2020 2020 2019 2019
Nonperforming loans to total loans 0.44 % 0.40 % 0.50 % 0.57 %
Nonperforming assets to total assets 0.17 % 0.14 % 0.16 % 0.19 %
Allowance for loan and lease losses to total loans 0.63 % 0.75 % 0.56 % 0.64 %
Nonaccrual loans $ 9,957 $ 5,645 $ 5,796 $ 6,456
Loans 90 days past due still accruing interest 352 2,245 3,264 2,373
Other real estate owned — — — —
Total nonperforming assets $ 10,309 $ 7,890 $ 9,060 $ 8,829
Three months ended
June 30,<br><br> <br>2020 March 31,<br><br> <br>2020 December 31,<br><br> <br>2019 June 30,<br><br> <br>2019
(in thousands)
Gross dollar volume (GDV) ^(2)^:
Prepaid and debit card GDV $ 23,680,749 $ 22,982,188 $ 19,104,327 $ 16,611,551
(2) Gross dollar volume represents the total dollar amount spent on prepaid and debit cards issued by The Bancorp Bank. 
13
Business line quarterly summary:
Quarter ended June 30, 2020
(dollars in millions)
Balances
% Growth
Major business lines Average approximate rates * Balances ** Year over year Linked quarter annualized
Loans
Institutional banking *** 2.5 % $ 1,303 56 % 51 %
Small Business Lending**** 5.0 % 601 16 % 4 %
Leasing 5.8 % 422 4 % nm
Commercial real estate securitization 4.8 % 1,582 nm nm
Weighted average yield 4.2 % $ 3,908 Non-interest income
% Growth
Deposits Current quarter Year<br><br> <br>over year
Payment solutions (prepaid and debit card issuance) 0.1 % $ 3,908 56 % nm $ 18.7 18 %
Card payment and ACH processing 0.3 % 723 -27 % nm 1.7 nm
* Average rates are for the quarter ended June 30, 2020
---
** 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.  The balance above excludes $208M Paycheck Protection Program loans. 
14
Analysis of Walnut Street* marks:
Loan activity
(dollars in millions)
Original Walnut Street loan balance, December 31, 2014 267
Marks through December 31, 2014 sale date (58)
Sales price of Walnut Street 209
Equity investment from independent investor (16)
December 31, 2014 Bancorp book value 193
Additional marks 2015 - 2019 (46)
2020 Marks -
Payments received (113)
June 30, 2020 Bancorp book value** 34
Total marks
Divided by:
Original Walnut Street loan balance
Percentage of total mark to original balance

All values are in US Dollars.

* 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 33% of expected principal recoveries were from loans and properties pending liquidation or other resolution as of June 30, 2020.
Walnut Street portfolio composition as of June 30, 2020
--- ---
Collateral type % of Portfolio
Commercial real estate non-owner occupied
Retail 58.0%
Office -
Other 5.2%
Construction and land 28.1%
First mortgage residential owner occupied 7.4%
First mortgage residential non-owner occupied 1.3%
Total 100.0% 
15
Cumulative analysis of marks on discontinued commercial loan principal as of June 30, 2020
Discontinued Cumulative % to original
loan principal marks principal
(dollars in millions)
Commercial loan discontinued principal before marks $ 67
Florida mall held in discontinued other real estate owned 42 (27 )
Previous mark charges 10 (10 )
Mark at June 30, 2020 (4 )
Cumulative mark at June 30, 2020 $ 119 $ (41 ) 34 %

Analysis of discontinued commercial loan relationships as ofJune 30, 2020

Nonperforming loan principal Total loan principal Performing loan marks Nonperforming loan marks Total marks
5 loan relationships > 6 million 45 $ — $ 45 $ (3 ) $ — $ (3 )
Loan relationships < 6 million 14 4 18 — (1 ) (1 )
59 $ 4 $ 63 $ (3 ) $ (1 ) $ (4 )

All values are in US Dollars.

Quarterly activity for commercial loan discontinued principal
Commercial
loan principal
(in millions)
Commercial loan discontinued principal March 31, 2020 before marks $ 72
Quarterly paydowns and other reductions (5 )
Commercial loan discontinued principal June 30, 2020 before marks $ 67
Marks June 30, 2020 (4 )
Net commercial loan exposure June 30, 2020 $ 63
Residential mortgages 39
Net loans $ 102
Florida mall in other real estate owned 15
11 properties in other real estate owned 11
Total discontinued assets at June 30, 2020 $ 128 
16

Discontinued commercial loan composition as of June 30, 2020

Collateral type Unpaid principal balance Mark<br> June 30, 2020 Mark as % of portfolio
(in millions)
Commercial real estate - non-owner occupied:
Retail $ 4 $ (0.6 ) 15 %
Office 2 — 0 %
Other 19 (0.1 ) 1 %
Construction and land 11 (0.1 ) 1 %
Commercial non-real estate and industrial 2 — —
1 to 4 family construction 11 (2.8 ) 25 %
First mortgage residential non-owner occupied 9 — 0 %
Commercial real estate owner occupied:
Retail 7 — —
Office — — —
Other — — —
Residential junior mortgage 1 — —
Other 1 — —
Total $ 67 $ (3.6 ) 5 %
Less: mark (4 )
Net commercial loan exposure June 30, 2020 $ 63 $ (3.6 )
Loan payment deferrals as of June 30, 2020
--- --- --- --- --- --- ---
Principal for loans with deferrals Total principal by loan category % of total loan principal with deferrals
(in millions)
Commercial real estate loans held for sale (excluding SBA loans) $ 31 $ 1,587 2 %
Securities backed lines of credit, insurance backed lines of credit & advisor financing 2 1,303 <1 %
Small business lending, substantially all SBA loans 187 806 23 %
Direct lease financing 80 422 19 %
Discontinued operations 18 106 17 %
Other consumer loans and specialty lending — 7 0 %
Total $ 318 $ 4,231 7.5 % 
17

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