WILMINGTON, Del.--(BUSINESS WIRE)-- The Bancorp, Inc. ("The Bancorp") (NASDAQ: TBBK), a financial holding company, today reported financial results for the first quarter of 2022.
Highlights
- For the quarter ended March 31, 2022, The Bancorp earned net income of $29.0 million, or $0.50 diluted earnings per share, compared to net income of $26.0 million, or $0.44 diluted earnings per share for the quarter ended March 31, 2021.
- Return on assets and equity for the quarter ended March 31, 2022 amounted to 1.7% and 18%, respectively, compared to 1.6% and 18%, respectively, for the quarter ended March 31, 2021 (all percentages “annualized”).
- Net interest margin amounted to 3.12% for the quarter ended March 31, 2022, compared to 3.34% for the quarter ended March 31, 2021.
- Net interest income was $52.9 million for the quarter ended March 31, 2022 compared to $53.8 million for the quarter ended March 31, 2021. In the first quarter of 2022, growth in net interest income was significantly offset by a $3.4 million reduction in Payroll Protection Program (“PPP”) related interest and fees.
- Excluding commercial loans, at fair value, which were originally generated for sale, total loans increased to $4.16 billion at March 31, 2022, compared to $3.75 billion at December 31, 2021 and $2.83 billion at March 31, 2021. Those increases reflected growth of 10% quarter over quarter and 45% year over year. Those percentage increases exclude the impact of $56.1 million of discontinued loans previously included in discontinued assets which were reclassified to loans in the first quarter of 2022.
- Gross dollar volume (“GDV”), representing the total amounts spent on prepaid and debit cards, increased $469.7 million, or 2%, to $28.56 billion for the quarter ended March 31, 2022 compared to the quarter ended March 31, 2021, which included the impact of COVID-19 related stimulus payments.
- SBLOC (securities backed lines of credit), IBLOC (insurance backed lines of credit) and investment advisor financing loans collectively increased 32% year over year and 8% quarter over quarter to $2.21 billion at March 31, 2022.
- Small Business Loans, including those held at fair value, grew 2% year over year to $705.2 million at March 31, 2022. That growth is exclusive of PPP loan balances of $23.7 million and $190.3 million, respectively, at March 31, 2022 and March 31, 2021.
- Direct lease financing balances increased 11% year over year to $538.6 million at March 31, 2022.
- We resumed non-SBA commercial real estate bridge lending in the third quarter of 2021. At March 31, 2022 the balance of such real estate bridge loans was $803.5 million compared to $621.7 million at December 31, 2021, reflecting quarter over quarter growth of 29%.
- The average interest rate on $6.22 billion of average deposits and interest-bearing liabilities during the first quarter of 2022 was 0.19%. Average deposits of $6.11 billion for first quarter 2022, reflected an increase of 3% from the $5.91 billion of average deposits for the quarter ended March 31, 2021, which included the impact of COVID-19 related stimulus payments.
- As of March 31, 2022, 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 9.47%, 14.15%, 14.56% and 14.15%, respectively, compared to well-capitalized minimums of 5%, 8%, 10% and 6.5%, respectively. The Bancorp and The Bank each remain well capitalized under banking regulations.
- Book value per common share at March 31, 2022 was $11.41 per share compared to $10.42 per share at March 31, 2021, an increase of 10%, primarily as a result of retained earnings.
- The Bancorp repurchased 527,393 shares of its common stock at an average cost of $28.44 per share during the quarter ended March 31, 2022.
“We got off to a great start in 2022,” said The Bancorp CEO and President Damian Kozlowski. “Our first quarter highlighted the continued progress we are making in building our Fintech franchise as we were able to show gains in GDV even with significant headwinds due to government stimulus in 2021. Additionally, we reaffirm our 2022 guidance of $2.15 per share, which excludes the net impact of planned stock repurchases.”
The Bancorp reported net income of $29.0 million, or $0.50 per diluted share, for the quarter ended March 31, 2022, compared to net income of $26.0 million, or $0.44 per diluted share, for the quarter ended March 31, 2021.
Conference Call Webcast
You may access the LIVE webcast of The Bancorp's Quarterly Earnings Conference Call at 8:00 AM ET Friday, April 29, 2022 by clicking on the webcast link on The Bancorp's homepage at www.thebancorp.com. Or you may dial 844.775.2543, access code 6984967. 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 6, 2022 by dialing 855.859.2056, access code 6984967.
About The Bancorp
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. in June 2021, 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. As evidence of its company-wide commitment to excellence, The Bancorp has also been ranked in October 2020 as one of the 100 Fastest-Growing Companies by Fortune, a Top 50 Employer in March 2021 by Equal Opportunity Magazine and was selected to be included in the S&P Small Cap 600 in May 2021. 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 , 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 |
|||||||||
Three months ended |
Year ended |
||||||||
March 31, |
December 31, |
||||||||
Consolidated condensed income statements |
2022 (unaudited) |
2021 (unaudited) |
2021 |
||||||
(in thousands, except per share data) |
|||||||||
Net interest income |
$ |
52,853 |
$ |
53,757 |
$ |
210,876 |
|||
Provision for credit losses |
1,507 |
822 |
3,110 |
||||||
Non-interest income |
|||||||||
ACH, card and other payment processing fees |
1,984 |
1,796 |
7,526 |
||||||
Prepaid, debit card and related fees |
18,652 |
19,208 |
74,654 |
||||||
Net realized and unrealized gains on commercial |
|||||||||
loans, at fair value |
3,383 |
1,996 |
14,885 |
||||||
Leasing related income |
973 |
965 |
6,457 |
||||||
Other non-interest income |
120 |
109 |
1,227 |
||||||
Total non-interest income |
25,112 |
24,074 |
104,749 |
||||||
Non-interest expense |
|||||||||
Salaries and employee benefits |
23,848 |
25,658 |
105,998 |
||||||
Data processing expense |
1,189 |
1,126 |
4,664 |
||||||
Legal expense |
794 |
2,054 |
6,848 |
||||||
FDIC insurance |
974 |
2,380 |
5,586 |
||||||
Software |
3,864 |
3,684 |
15,659 |
||||||
Other non-interest expense |
7,683 |
6,981 |
29,595 |
||||||
Total non-interest expense |
38,352 |
41,883 |
168,350 |
||||||
Income from continuing operations before income taxes |
38,106 |
35,126 |
144,165 |
||||||
Income tax expense |
9,140 |
9,066 |
33,724 |
||||||
Net income from continuing operations |
28,966 |
26,060 |
110,441 |
||||||
Discontinued operations |
|||||||||
(Loss) income from discontinued operations before income taxes |
— |
(124 |
) |
288 |
|||||
Income tax (benefit) expense |
— |
(29 |
) |
76 |
|||||
Net (loss) income from discontinued operations, net of tax |
— |
(95 |
) |
212 |
|||||
Net income |
$ |
28,966 |
$ |
25,965 |
$ |
110,653 |
|||
Net income per share from continuing operations - basic |
$ |
0.51 |
$ |
0.45 |
$ |
1.93 |
|||
Net income (loss) per share from discontinued operations - basic |
$ |
— |
$ |
— |
$ |
— |
|||
Net income per share - basic |
$ |
0.51 |
$ |
0.45 |
$ |
1.93 |
|||
Net income per share from continuing operations - diluted |
$ |
0.50 |
$ |
0.44 |
$ |
1.88 |
|||
Net income (loss) per share from discontinued operations - diluted |
$ |
— |
$ |
— |
$ |
— |
|||
Net income per share - diluted |
$ |
0.50 |
$ |
0.44 |
$ |
1.88 |
|||
Weighted average shares - basic |
57,115,903 |
57,372,337 |
57,190,311 |
||||||
Weighted average shares - diluted |
58,095,980 |
59,294,081 |
58,830,437 |
||||||
Note: Compared to higher rates in recent periods, the effective tax rate for the three months ended March 31, 2022 approximated 24% as a result of the impact of tax deductions related to stock-based compensation, recorded as discrete items. The large deductions and tax benefits resulted from the increase in the Company’s stock price as compared to the original grant date. |
Condensed consolidated balance sheets |
March 31, |
December 31, |
September 30, |
March 31, |
|||||||||||
2022 (unaudited) |
2021 |
2021 (unaudited) |
2021 (unaudited) |
||||||||||||
(in thousands, except share data) |
|||||||||||||||
Assets: |
|||||||||||||||
Cash and cash equivalents |
|||||||||||||||
Cash and due from banks |
$ |
11,399 |
$ |
5,382 |
$ |
6,687 |
$ |
7,838 |
|||||||
Interest earning deposits at Federal Reserve Bank |
662,827 |
596,402 |
310,642 |
1,738,749 |
|||||||||||
Total cash and cash equivalents |
674,226 |
601,784 |
317,329 |
1,746,587 |
|||||||||||
Investment securities, available-for-sale, at fair value |
907,338 |
953,709 |
1,054,223 |
1,128,459 |
|||||||||||
Commercial loans, at fair value |
1,180,885 |
1,388,416 |
1,615,312 |
1,851,724 |
|||||||||||
Loans, net of deferred fees and costs |
4,164,298 |
3,747,224 |
3,136,662 |
2,827,076 |
|||||||||||
Allowance for credit losses |
(19,051 |
) |
(17,806 |
) |
(16,159 |
) |
(16,419 |
) |
|||||||
Loans, net |
4,145,247 |
3,729,418 |
3,120,503 |
2,810,657 |
|||||||||||
Federal Home Loan Bank and Atlantic Central Bankers Bank stock |
1,663 |
1,663 |
1,663 |
1,368 |
|||||||||||
Premises and equipment, net |
16,314 |
16,156 |
16,602 |
17,196 |
|||||||||||
Accrued interest receivable |
17,284 |
17,871 |
17,180 |
20,164 |
|||||||||||
Intangible assets, net |
2,348 |
2,447 |
2,547 |
2,746 |
|||||||||||
Other real estate owned |
18,873 |
18,873 |
19,488 |
17,343 |
|||||||||||
Deferred tax asset, net |
18,521 |
12,667 |
12,237 |
10,900 |
|||||||||||
Investment in unconsolidated entity, at fair value |
— |
— |
— |
31,047 |
|||||||||||
Assets held-for-sale from discontinued operations |
— |
3,268 |
5,274 |
18,620 |
|||||||||||
Other assets |
99,961 |
96,967 |
86,105 |
90,530 |
|||||||||||
Total assets |
$ |
7,082,660 |
$ |
6,843,239 |
$ |
6,268,463 |
$ |
7,747,341 |
|||||||
Liabilities: |
|||||||||||||||
Deposits |
|||||||||||||||
Demand and interest checking |
$ |
5,506,083 |
$ |
5,561,365 |
$ |
4,734,352 |
$ |
6,231,220 |
|||||||
Savings and money market |
722,240 |
415,546 |
378,160 |
690,281 |
|||||||||||
Total deposits |
6,228,323 |
5,976,911 |
5,112,512 |
6,921,501 |
|||||||||||
Securities sold under agreements to repurchase |
42 |
42 |
42 |
42 |
|||||||||||
Short-term borrowings |
— |
— |
300,000 |
— |
|||||||||||
Senior debt |
98,774 |
98,682 |
98,590 |
98,406 |
|||||||||||
Subordinated debenture |
13,401 |
13,401 |
13,401 |
13,401 |
|||||||||||
Other long-term borrowings |
39,318 |
39,521 |
39,715 |
40,085 |
|||||||||||
Other liabilities |
50,507 |
62,228 |
66,226 |
77,142 |
|||||||||||
Total liabilities |
$ |
6,430,365 |
$ |
6,190,785 |
$ |
5,630,486 |
$ |
7,150,577 |
|||||||
Shareholders' equity: |
|||||||||||||||
Common stock - authorized, 75,000,000 shares of $1.00 par value; 57,155,028 and 57,247,913 shares issued and outstanding at March 31, 2022 and 2021, respectively |
57,155 |
57,371 |
57,331 |
57,248 |
|||||||||||
Additional paid-in capital |
336,604 |
349,686 |
357,528 |
370,481 |
|||||||||||
Retained earnings |
268,072 |
239,106 |
212,114 |
154,418 |
|||||||||||
Accumulated other comprehensive (loss) income |
(9,536 |
) |
6,291 |
11,004 |
14,617 |
||||||||||
Total shareholders' equity |
652,295 |
652,454 |
637,977 |
596,764 |
|||||||||||
Total liabilities and shareholders' equity |
$ |
7,082,660 |
$ |
6,843,239 |
$ |
6,268,463 |
$ |
7,747,341 |
|||||||
Note: Previous balance sheets included assets held-for-sale from discontinued operations, which were reclassified to continuing operations in the first quarter of 2022. Previous balance sheets also included investment in unconsolidated entity, which reflected Bancorp’s balance of the Walnut Street investment. Walnut Street was comprised of Bancorp loans sold to that entity, which was partially financed by an independent investor. In the third quarter of 2021, The Bancorp and that investor dissolved the entity, as the remaining balance did not warrant ongoing administrative and accounting expenses. As a result of the dissolution, the investment in unconsolidated entity, which had a June 30, 2021 balance of $25.0 million, was reclassified as follows: approximately $22.9 million of loans were reclassified to commercial loans, at fair value and $2.1 million was reclassified to other real estate owned, as those assets continue to be reported at fair value. |
Average balance sheet and net interest income |
Three months ended March 31, 2022 |
Three months ended March 31, 2021 |
||||||||||||||||||
(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** |
$ |
5,136,377 |
$ |
50,508 |
3.93 |
% |
$ |
4,476,617 |
$ |
47,811 |
4.27 |
% |
||||||||
Leases-bank qualified* |
4,015 |
105 |
10.46 |
% |
6,982 |
118 |
6.76 |
% |
||||||||||||
Investment securities-taxable |
939,511 |
4,891 |
2.08 |
% |
1,193,009 |
8,808 |
2.95 |
% |
||||||||||||
Investment securities-nontaxable* |
3,559 |
32 |
3.60 |
% |
4,042 |
35 |
3.46 |
% |
||||||||||||
Interest earning deposits at Federal Reserve Bank |
686,614 |
347 |
0.20 |
% |
747,845 |
183 |
0.10 |
% |
||||||||||||
Net interest earning assets |
6,770,076 |
55,883 |
3.30 |
% |
6,428,495 |
56,955 |
3.54 |
% |
||||||||||||
Allowance for credit losses |
(17,810 |
) |
(16,069 |
) |
||||||||||||||||
Assets held-for-sale from discontinued operations |
— |
— |
— |
109,128 |
853 |
3.13 |
% |
|||||||||||||
Other assets |
224,312 |
214,171 |
||||||||||||||||||
$ |
6,976,578 |
$ |
6,735,725 |
|||||||||||||||||
Liabilities and Shareholders' Equity: |
||||||||||||||||||||
Deposits: |
||||||||||||||||||||
Demand and interest checking |
$ |
5,575,228 |
$ |
1,406 |
0.10 |
% |
$ |
5,501,697 |
$ |
1,617 |
0.12 |
% |
||||||||
Savings and money market |
532,047 |
200 |
0.15 |
% |
407,186 |
149 |
0.15 |
% |
||||||||||||
Total deposits |
6,107,275 |
1,606 |
0.11 |
% |
5,908,883 |
1,766 |
0.12 |
% |
||||||||||||
Short-term borrowings |
555 |
— |
— |
13,055 |
8 |
0.25 |
% |
|||||||||||||
Repurchase agreements |
41 |
— |
— |
41 |
— |
— |
||||||||||||||
Subordinated debentures |
13,401 |
116 |
3.46 |
% |
13,401 |
113 |
3.37 |
% |
||||||||||||
Senior debt |
98,724 |
1,279 |
5.18 |
% |
100,140 |
1,279 |
5.11 |
% |
||||||||||||
Total deposits and liabilities |
6,219,996 |
3,001 |
0.19 |
% |
6,035,520 |
3,166 |
0.21 |
% |
||||||||||||
Other liabilities |
104,207 |
111,241 |
||||||||||||||||||
Total liabilities |
6,324,203 |
6,146,761 |
||||||||||||||||||
Shareholders' equity |
652,375 |
588,964 |
||||||||||||||||||
$ |
6,976,578 |
$ |
6,735,725 |
|||||||||||||||||
Net interest income on tax equivalent basis* |
$ |
52,882 |
$ |
54,642 |
||||||||||||||||
Tax equivalent adjustment |
29 |
32 |
||||||||||||||||||
Net interest income |
$ |
52,853 |
$ |
54,610 |
||||||||||||||||
Net interest margin * |
3.12 |
% |
3.34 |
% |
||||||||||||||||
* Full taxable equivalent basis, using a statutory Federal tax rate of 21% for 2022 and 2021. |
** Includes commercial loans, at fair value. All periods include non-accrual loans. |
NOTE: In the table above, the 2021 interest on loans reflects $1.4 million of interest and fees which were earned on a short-term line of credit to another institution to initially fund Payroll Protection Program (“PPP”) loans, which did not significantly increase average loans or assets, and which are not expected to recur. Interest on loans for 2022 and 2021 includes $440,000 and $2.4 million, respectively, of interest and fees on PPP loans. |
Allowance for credit losses |
Three months ended |
Year ended |
|||||||||
March 31, |
March 31, |
December 31, |
|||||||||
2022 (unaudited) |
2021 (unaudited) |
2021 |
|||||||||
(dollars in thousands) |
|||||||||||
Balance in the allowance for credit losses at beginning of period (1) |
$ |
17,806 |
$ |
16,082 |
$ |
16,082 |
|||||
Loans charged-off: |
|||||||||||
SBA non-real estate |
98 |
144 |
1,138 |
||||||||
SBA commercial mortgage |
— |
— |
417 |
||||||||
Direct lease financing |
191 |
97 |
412 |
||||||||
SBLOC |
— |
15 |
15 |
||||||||
Consumer - home equity |
— |
— |
10 |
||||||||
Consumer - other |
— |
— |
14 |
||||||||
Total |
289 |
256 |
2,006 |
||||||||
Recoveries: |
|||||||||||
SBA non-real estate |
12 |
4 |
51 |
||||||||
SBA commercial mortgage |
— |
— |
9 |
||||||||
Direct lease financing |
19 |
2 |
58 |
||||||||
Consumer - home equity |
— |
— |
1,099 |
||||||||
Total |
31 |
6 |
1,217 |
||||||||
Net charge-offs |
258 |
250 |
789 |
||||||||
Provision credited to allowance, excluding commitment provision |
1,503 |
587 |
2,513 |
||||||||
Balance in allowance for credit losses at end of period |
$ |
19,051 |
$ |
16,419 |
$ |
17,806 |
|||||
Net charge-offs/average loans |
0.01 |
% |
0.01 |
% |
0.03 |
% |
|||||
Net charge-offs/average assets |
— |
— |
0.01 |
% |
|||||||
(1) Excludes activity from discontinued operations. |
Loan portfolio |
March 31, |
December 31, |
September 30, |
March 31, |
|||||||
2022 |
2021 |
2021 |
2021 |
||||||||
(in thousands) |
|||||||||||
SBL non-real estate |
$ |
122,387 |
$ |
147,722 |
$ |
171,845 |
$ |
305,446 |
|||
SBL commercial mortgage |
385,559 |
361,171 |
367,272 |
320,013 |
|||||||
SBL construction |
31,432 |
27,199 |
23,117 |
20,692 |
|||||||
Small business loans |
539,378 |
536,092 |
562,234 |
646,151 |
|||||||
Direct lease financing |
538,616 |
531,012 |
514,068 |
484,316 |
|||||||
SBLOC / IBLOC * |
2,067,233 |
1,929,581 |
1,834,523 |
1,622,359 |
|||||||
Advisor financing ** |
146,461 |
115,770 |
81,143 |
58,919 |
|||||||
Real estate bridge loans |
803,477 |
621,702 |
128,699 |
— |
|||||||
Other loans *** |
61,096 |
5,014 |
4,917 |
6,452 |
|||||||
4,156,261 |
3,739,171 |
3,125,584 |
2,818,197 |
||||||||
Unamortized loan fees and costs |
8,037 |
8,053 |
11,078 |
8,879 |
|||||||
Total loans, net of unamortized fees and costs |
$ |
4,164,298 |
$ |
3,747,224 |
$ |
3,136,662 |
$ |
2,827,076 |
|||
Small business portfolio |
March 31, |
December 31, |
September 30, |
March 31, |
|||||||
2022 |
2021 |
2021 |
2021 |
||||||||
(in thousands) |
|||||||||||
SBL, including unamortized fees and costs |
$ |
545,462 |
$ |
541,437 |
$ |
566,472 |
$ |
647,445 |
|||
SBL, included in commercial loans, at fair value |
183,408 |
199,585 |
214,301 |
234,908 |
|||||||
Total small business loans **** |
$ |
728,870 |
$ |
741,022 |
$ |
780,773 |
$ |
882,353 |
|||
* Securities Backed Lines of Credit, or SBLOC, are collateralized by marketable securities, while Insurance Backed Lines of Credit, or IBLOC, are collateralized by the cash surrender value of eligible life 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 loans are demand deposit overdrafts reclassified as loan balances totaling $310,000 and $322,000 at March 31, 2022 and December 31, 2021, respectively. Estimated overdraft charge-offs and recoveries are reflected in the allowance for credit losses and have been immaterial. |
**** 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 certain SBA loans at the dates indicated (in thousands). A reduction in SBL non-real estate from $147.7 million to $122.4 million in the first quarter of 2022 resulted from U.S. government repayments of $21.1 million of PPP loans authorized by The Consolidated Appropriations Act, 2021. PPP loans totaled $23.7 million at March 31, 2022 and $190.3 million at March 31, 2021, respectively. |
Small business loans as of March 31, 2022 |
|||
Loan principal |
|||
(in millions) |
|||
U.S. government guaranteed portion of SBA loans (a) |
$ |
369 |
|
Paycheck Protection Program loans (PPP) (a) |
24 |
||
Commercial mortgage SBA (b) |
191 |
||
Construction SBA (c) |
19 |
||
Non-guaranteed portion of U.S. government guaranteed loans (d) |
100 |
||
Non-SBA small business loans (e) |
17 |
||
Total principal |
$ |
720 |
|
Unamortized fees and costs |
9 |
||
Total small business loans |
$ |
729 |
|
(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 $19 million in Construction SBA loans, $16 million are 504 first mortgages with an origination date LTV of 50-60% and $3 million are SBA interim loans with an approved SBA post-construction full takeout/payoff. |
(d) The $100 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 $17 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. |
Small business loans by type as of March 31, 2022 |
||||||||||||||||
(Excludes government guaranteed portion of SBA 7a loans and PPP loans) |
||||||||||||||||
SBL commercial |
SBL non-real |
|||||||||||||||
mortgage* |
SBL construction* |
estate |
Total |
% Total |
||||||||||||
(in millions) |
||||||||||||||||
Hotels (except casino hotels) and motels |
$ |
66 |
$ |
5 |
$ |
— |
$ |
71 |
22 |
% |
||||||
Full-service restaurants |
13 |
2 |
2 |
17 |
5 |
% |
||||||||||
Outpatient mental health and substance abuse centers |
15 |
— |
— |
15 |
4 |
% |
||||||||||
Child day care services |
12 |
— |
1 |
13 |
4 |
% |
||||||||||
Baked goods stores |
4 |
— |
9 |
13 |
4 |
% |
||||||||||
Car washes |
10 |
1 |
— |
11 |
3 |
% |
||||||||||
Offices of lawyers |
9 |
— |
— |
9 |
3 |
% |
||||||||||
Assisted living facilities for the elderly |
9 |
— |
— |
9 |
3 |
% |
||||||||||
Funeral homes and funeral services |
8 |
— |
— |
8 |
2 |
% |
||||||||||
Gasoline stations with convenience stores |
8 |
— |
— |
8 |
2 |
% |
||||||||||
Lessors of nonresidential buildings (except miniwarehouses) |
8 |
— |
— |
8 |
2 |
% |
||||||||||
General warehousing and storage |
7 |
— |
— |
7 |
2 |
% |
||||||||||
Fitness and recreational sports centers |
— |
5 |
2 |
7 |
2 |
% |
||||||||||
Limited-service restaurants |
1 |
2 |
3 |
6 |
1 |
% |
||||||||||
All other amusement and recreation industries |
4 |
— |
1 |
5 |
1 |
% |
||||||||||
Other technical and trade schools |
— |
5 |
— |
5 |
1 |
% |
||||||||||
Other spectator sports |
5 |
— |
— |
5 |
1 |
% |
||||||||||
Other warehousing and storage |
3 |
— |
— |
3 |
1 |
% |
||||||||||
Plumbing, heating, and air-conditioning contractors |
3 |
— |
— |
3 |
1 |
% |
||||||||||
Offices of dentists |
3 |
— |
— |
3 |
1 |
% |
||||||||||
All other miscellaneous wood product manufacturing |
3 |
— |
— |
3 |
1 |
% |
||||||||||
Offices of physicians |
3 |
— |
— |
3 |
1 |
% |
||||||||||
Elementary and secondary schools |
2 |
— |
— |
2 |
1 |
% |
||||||||||
Landscaping services |
1 |
— |
1 |
2 |
1 |
% |
||||||||||
Lessors of other real estate property |
2 |
— |
— |
2 |
1 |
% |
||||||||||
All other miscellaneous general purpose machinery manufacturing |
2 |
— |
— |
2 |
1 |
% |
||||||||||
Sewing, needlework, and piece goods stores |
2 |
— |
— |
2 |
1 |
% |
||||||||||
Automotive body, paint, and interior repair and maintenance |
2 |
— |
— |
2 |
1 |
% |
||||||||||
Pet care (except veterinary) services |
2 |
— |
— |
2 |
1 |
% |
||||||||||
Amusement arcades |
2 |
— |
— |
2 |
1 |
% |
||||||||||
Caterers |
2 |
— |
— |
2 |
1 |
% |
||||||||||
Offices of real estate agents and brokers |
2 |
— |
— |
2 |
1 |
% |
||||||||||
Vocational rehabilitation services |
2 |
— |
— |
2 |
1 |
% |
||||||||||
Other** |
47 |
1 |
25 |
73 |
22 |
% |
||||||||||
Total |
$ |
262 |
$ |
21 |
$ |
44 |
$ |
327 |
100 |
% |
||||||
* Of the SBL commercial mortgage and SBL construction loans, $73 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 million are spread over a hundred different classifications such as Commercial Printing, Pet and Pet Supplies Stores, Securities Brokerage, etc. |
State diversification as of March 31, 2022 |
|||||||||||||||
(Excludes government guaranteed portion of SBA 7a loans and PPP loans) |
|||||||||||||||
SBL commercial |
SBL non-real |
||||||||||||||
mortgage* |
SBL construction* |
estate |
Total |
% Total |
|||||||||||
(in millions) |
|||||||||||||||
Florida |
$ |
62 |
$ |
— |
$ |
5 |
$ |
67 |
21% |
||||||
California |
44 |
2 |
4 |
50 |
15% |
||||||||||
North Carolina |
24 |
7 |
2 |
33 |
10% |
||||||||||
Pennsylvania |
29 |
— |
2 |
31 |
9% |
||||||||||
New York |
18 |
5 |
3 |
26 |
7% |
||||||||||
Illinois |
15 |
— |
2 |
17 |
6% |
||||||||||
Texas |
12 |
— |
4 |
16 |
5% |
||||||||||
New Jersey |
7 |
— |
7 |
14 |
4% |
||||||||||
Colorado |
4 |
6 |
1 |
11 |
3% |
||||||||||
Virginia |
9 |
— |
1 |
10 |
3% |
||||||||||
Tennessee |
8 |
— |
— |
8 |
3% |
||||||||||
Georgia |
3 |
— |
1 |
4 |
2% |
||||||||||
Ohio |
4 |
— |
— |
4 |
1% |
||||||||||
Michigan |
3 |
— |
1 |
4 |
1% |
||||||||||
Washington |
3 |
— |
— |
3 |
1% |
||||||||||
Other States |
17 |
1 |
11 |
29 |
9% |
||||||||||
Total |
$ |
262 |
$ |
21 |
$ |
44 |
$ |
327 |
100% |
||||||
* Of the SBL commercial mortgage and SBL construction loans, $73 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 March 31, 2022 |
|||||||
SBL commercial |
|||||||
Type* |
State |
mortgage* |
|||||
(in millions) |
|||||||
Mental health and substance abuse center |
FL |
$ |
10 |
||||
Hotel |
FL |
9 |
|||||
Lawyer's office |
CA |
9 |
|||||
General warehousing and storage |
PA |
7 |
|||||
Hotel |
NC |
6 |
|||||
Hotel |
NY |
5 |
|||||
Assisted living facility |
FL |
5 |
|||||
Technical and trade school |
NC |
5 |
|||||
Hotel |
NC |
5 |
|||||
Mental health and substance abuse center |
PA |
4 |
|||||
Total |
$ |
65 |
|||||
* 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, excluding SBA loans, are as follows including LTV at origination: |
|||||||||||||
Type as of March 31, 2022 |
|||||||||||||
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 book value)* |
74 |
$ |
803 |
74 |
% |
3.99 |
% |
||||||
Non-SBA commercial real estate loans, at fair value: |
|||||||||||||
Multi-family (apartment bridge loans)* |
67 |
$ |
858 |
76 |
% |
4.71 |
% |
||||||
Hospitality (hotels and lodging) |
9 |
71 |
65 |
% |
5.68 |
% |
|||||||
Retail |
5 |
59 |
71 |
% |
4.28 |
% |
|||||||
Other |
6 |
16 |
73 |
% |
5.13 |
% |
|||||||
87 |
1,004 |
75 |
% |
4.76 |
% |
||||||||
Fair value adjustment |
(6 |
) |
|||||||||||
Total non-SBA commercial real estate loans, at fair value |
998 |
||||||||||||
Total commercial real estate loans |
$ |
1,801 |
75 |
% |
4.43 |
% |
|||||||
*In the third quarter of 2021, we resumed the origination of multi-family apartment loans. These are similar to the multi-family apartment loans carried at fair value, but at origination are intended to be held on the balance sheet, so are not accounted for at fair value. |
State diversification as of March 31, 2022 |
15 largest loans as of March 31, 2022 |
||||||||||||||
State |
Balance |
Origination date LTV |
State |
Balance |
Origination date LTV |
||||||||||
(in millions) |
(in millions) |
||||||||||||||
Texas |
$ |
708 |
76% |
Texas |
$ |
41 |
79% |
||||||||
Georgia |
171 |
74% |
Texas |
39 |
75% |
||||||||||
Ohio |
123 |
72% |
Texas |
37 |
80% |
||||||||||
Alabama |
90 |
74% |
Texas |
37 |
62% |
||||||||||
Florida |
80 |
73% |
Tennessee |
30 |
72% |
||||||||||
Arizona |
65 |
68% |
Missouri |
30 |
75% |
||||||||||
Tennessee |
55 |
74% |
Texas |
30 |
79% |
||||||||||
Other States each | |||||||||||||||