The Bancorp, Inc.NASDAQ: TBBK

The Bancorp, Inc. Reports Fourth Quarter 2021 Financial Results

Jan 27, 2022 · Issued by The Bancorp, Inc. via Business Wire

Watch The Bancorp explain itThe Bancorp, Inc. (TBBK) Q2 2026 Earnings Call · Replay · Jul 31

WILMINGTON, Del.--(BUSINESS WIRE)-- The Bancorp, Inc. ("The Bancorp") (NASDAQ: TBBK), a financial holding company, today reported financial results for the fourth quarter of 2021.

Highlights

For the quarter ended December 31, 2021, The Bancorp earned net income of $27.0 million, or $0.46 diluted earnings per share.

Return on assets and equity for the quarter ended December 31, 2021 amounted to 1.7% and 17%, respectively, compared to 1.6% and 17%, respectively, for the quarter ended December 31, 2020 (all percentages “annualized.”)

Net interest margin amounted to 3.51% for the quarter ended December 31, 2021, compared to 3.58% for the quarter ended December 31, 2020.

Net interest income was $52.2 million for the quarter ended December 31, 2021 compared to $51.7 million for the quarter ended December 31, 2020. In the fourth quarter of 2021, growth in net interest income was significantly offset by a reduction of $3.8 million resulting from non-SBA commercial loan prepayments. However, net realized and unrealized gains on commercial loans increased over $4 million over those respective periods, primarily as a result of fees related to those prepayments. We have resumed the origination of such loans, identified as real estate bridge loans, which are intended to offset the impact of prepayments and payoffs, and grow the portfolio.

Excluding loans at fair value, which were originally generated for sale, total loans increased 41% to $3.75 billion at December 31, 2021, compared to $2.65 billion at December 31, 2020.

Gross dollar volume (“GDV”), representing the total amounts spent on prepaid and debit cards, increased $2.44 billion, or 11%, to $24.96 billion for the quarter ended December 31, 2021 compared to the quarter ended December 31, 2020.

SBLOC (securities backed lines of credit), IBLOC (insurance backed lines of credit) and investment advisor financing loans collectively increased 28% year over year and 7% quarter over quarter to $2.05 billion at December 31, 2021.

Small Business Loans, including those held at fair value, grew 6% year over year to $696.2 million at December 31, 2021. That growth is exclusive of Paycheck Protection Program (“PPP”) loan balances of $44.8 million and $165.7 million, respectively, at December 31, 2021 and December 31, 2020.

Direct lease financing balances increased 15% year over year to $531.0 million at December 31, 2021.

We resumed non-SBA commercial real estate lending in the third quarter of 2021 classified as real estate bridge lending. As of December 31, 2021 total real estate bridge loans amounted to $621.7 million, collateralized by apartment buildings.

The average interest rate on $5.47 billion of average deposits and interest-bearing liabilities during the fourth quarter of 2021 was 0.19%. Average deposits of $5.31 billion for the fourth quarter 2021, reflected an increase of 1% from the $5.25 billion of average deposits for the quarter ended December 31, 2020.

As of December 31, 2021, substantially all the borrowers with COVID-19 related payment deferrals had resumed making payments.

As of December 31, 2021, 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 10.40%, 14.72%, 15.13% and 14.72%, 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 December 31, 2021 was $11.37 per share compared to $10.10 per share at December 31, 2020, an increase of 13%, primarily as a result of retained earnings.

The Bancorp repurchased 350,431 shares of its common stock at an average cost of $28.54 per share during the quarter ended December 31, 2021.

“Our lending platform and fin-tech ecosystem will support continued growth into 2022,” said The Bancorp CEO and President Damian Kozlowski. “We continue to improve our performance, while delivering enhanced capabilities to our many innovative partners which are revolutionizing the financial services industry. 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 $27.0 million, or $0.46 per diluted share, for the quarter ended December 31, 2021, compared to net income of $24.2 million, or $0.41 per diluted share, for the quarter ended December 31, 2020.

Conference Call Webcast

You may access the LIVE webcast of The Bancorp's Quarterly Earnings Conference Call at 8:00 AM ET Friday, January 28, 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 7390458. You may listen to the replay of the webcast following the live call on The Bancorp's investor relations website or telephonically until Friday, February 4, 2022 by dialing 855.859.2056, access code 7390458.

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 (unaudited)

		Three months ended				Year ended
		December 31,				December 31,
Condensed income statement	2021		2020		2021		2020
		(in thousands, except per share data)

Net interest income	$	52,157	$	51,713	$	210,876	$	194,866
Provision for credit losses		1,626		554		3,110		6,352
Non-interest income
ACH, card and other payment processing fees		1,921		1,788		7,526		7,101
Prepaid, debit card and related fees		17,776		17,818		74,654		74,465
Net realized and unrealized gains (losses) on commercial
loans, at fair value		6,004		1,538		14,885		(3,874)
Change in value of investment in unconsolidated entity		—		—		—		(45)
Leasing related income		1,757		499		6,457		3,294
Other non-interest income		768		1,657		1,227		3,676
Total non-interest income		28,226		23,300		104,749		84,617
Non-interest expense
Salaries and employee benefits		28,159		27,087		105,998		101,737
Data processing expense		1,183		1,174		4,664		4,712
Legal expense		1,499		1,005		6,848		5,141
FDIC insurance		351		2,121		5,586		9,808
Software		4,224		3,570		15,659		14,028
Other non-interest expense		7,784		6,826		29,595		29,421
Total non-interest expense		43,200		41,783		168,350		164,847
Income from continuing operations before income taxes		35,557		32,676		144,165		108,284
Income tax expense		8,529		8,655		33,724		27,688
Net income from continuing operations		27,028		24,021		110,441		80,596
Discontinued operations
(Loss) income from discontinued operations before income taxes		(36)		(1,096)		288		(3,816)
Income tax (benefit) expense		—		(1,246)		76		(3,304)
Net (loss) income from discontinued operations, net of tax		(36)		150		212		(512)
Net income	$	26,992	$	24,171	$	110,653	$	80,084

Net income per share from continuing operations - basic	$	0.47	$	0.42	$	1.93	$	1.40
Net income (loss) per share from discontinued operations - basic	$	—	$	—	$	—	$	(0.01)
Net income per share - basic	$	0.47	$	0.42	$	1.93	$	1.39

Net income per share from continuing operations - diluted	$	0.46	$	0.41	$	1.88	$	1.38
Net income (loss) per share from discontinued operations - diluted	$	—	$	—	$	—	$	(0.01)
Net income per share - diluted	$	0.46	$	0.41	$	1.88	$	1.37
Weighted average shares - basic		56,966,661		57,597,124		57,190,311		57,474,612
Weighted average shares - diluted		58,369,204		59,146,222		58,830,437		58,411,222

Note: Compared to higher rates in recent periods, the respective effective tax rates for the three and twelve months ended December 31, 2021 approximated 24% and 23% as a result of the impact of excess 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.


Balance sheet	December 31,		September 30,		June 30,		December 31,
	2021 (unaudited)		2021 (unaudited)		2021 (unaudited)		2020
		(in thousands, except share data)
Assets:
Cash and cash equivalents
Cash and due from banks	$	5,382	$	6,687	$	5,470	$	5,984
Interest earning deposits at Federal Reserve Bank		596,402		310,642		583,498		339,531
Total cash and cash equivalents		601,784		317,329		588,968		345,515

Investment securities, available-for-sale, at fair value		953,709		1,054,223		1,106,075		1,206,164
Commercial loans, at fair value		1,326,836		1,550,025		1,690,216		1,810,812
Loans, net of deferred fees and costs		3,747,224		3,136,662		2,915,344		2,652,323
Allowance for credit losses		(17,806)		(16,159)		(15,292)		(16,082)
Loans, net		3,729,418		3,120,503		2,900,052		2,636,241
Federal Home Loan Bank and Atlantic Central Bankers Bank stock		1,663		1,663		1,667		1,368
Premises and equipment, net		16,156		16,602		17,392		17,608
Accrued interest receivable		17,871		17,180		18,668		20,458
Intangible assets, net		2,447		2,547		2,646		2,845
Other real estate owned		1,530		2,145		—		—
Deferred tax asset, net		12,667		12,237		10,923		9,757
Investment in unconsolidated entity, at fair value		—		—		24,988		31,294
Assets held-for-sale from discontinued operations		82,191		87,904		97,496		113,650
Other assets		96,967		86,105		91,516		81,129
Total assets	$	6,843,239	$	6,268,463	$	6,550,607	$	6,276,841

Liabilities:
Deposits
Demand and interest checking	$	5,561,365	$	4,734,352	$	5,225,024	$	5,205,010
Savings and money market		415,546		378,160		459,688		257,050
Total deposits		5,976,911		5,112,512		5,684,712		5,462,060

Securities sold under agreements to repurchase		42		42		42		42
Short-term borrowings		—		300,000		—		—
Senior debt		98,682		98,590		98,498		98,314
Subordinated debenture		13,401		13,401		13,401		13,401
Other long-term borrowings		39,521		39,715		39,901		40,277
Other liabilities		62,228		66,226		94,944		81,583
Total liabilities	$	6,190,785	$	5,630,486	$	5,931,498	$	5,695,677

Shareholders' equity:
Common stock - authorized, 75,000,000 shares of $1.00 par value; 57,370,563 and 57,550,629 shares issued and outstanding at December 30, 2021 and 2020, respectively		57,371		57,331		57,458		57,551
Additional paid-in capital		349,686		357,528		363,241		377,452
Retained earnings		239,106		212,114		183,853		128,453
Accumulated other comprehensive income		6,291		11,004		14,557		17,708
Total shareholders' equity		652,454		637,977		619,109		581,164

Total liabilities and shareholders' equity	$	6,843,239	$	6,268,463	$	6,550,607	$	6,276,841

Note: Previous balance sheets 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 December 31, 2021						Three months ended December 31, 2020
		(dollars in thousands)
	Average				Average		Average				Average
Assets:	Balance		Interest		Rate		Balance		Interest		Rate

Interest earning assets:
Loans, net of deferred fees and costs**	$	4,766,271	$	48,792		4.09%	$	4,329,794	$	45,524	4.21%
Leases-bank qualified*		4,465		76		6.81%		7,346		138	7.51%
Investment securities-taxable		954,172		5,770		2.42%		1,239,062		9,229	2.98%
Investment securities-nontaxable*		3,558		31		3.49%		4,041		35	3.46%
Interest earning deposits at Federal Reserve Bank		208,120		65		0.12%		193,560		48	0.10%
Net interest earning assets		5,936,586		54,734		3.69%		5,773,803		54,974	3.81%

Allowance for credit losses		(17,108)						(15,804)
Assets held-for-sale from discontinued operations		83,821		708		3.38%		117,482		965	3.29%
Other assets		189,760						220,595
	$	6,193,059					$	6,096,076

Liabilities and Shareholders' Equity:
Deposits:
Demand and interest checking	$	4,931,891	$	1,015		0.08%	$	4,978,562	$	1,679	0.13%
Savings and money market		373,381		114		0.12%		270,820		134	0.20%
Total deposits		5,305,272		1,129		0.09%		5,249,382		1,813	0.14%

Short-term borrowings		53,315		34		0.26%		32,989		17	0.21%
Repurchase agreements		41		—		—		41		—	—
Subordinated debentures		13,401		112		3.34%		13,401		116	3.46%
Senior debt		100,419		1,280		5.10%		100,031		1,279	5.12%
Total deposits and liabilities		5,472,448		2,555		0.19%		5,395,844		3,225	0.24%

Other liabilities		75,395						130,420
Total liabilities		5,547,843						5,526,264

Shareholders' equity		645,216						569,812
	$	6,193,059					$	6,096,076
Net interest income on tax equivalent basis*			$	52,887					$	52,714

Tax equivalent adjustment				22						36

Net interest income			$	52,865					$	52,678
Net interest margin *						3.51%					3.58%

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

NOTE: In the table above, interest on loans for 2021 includes $991,000 of interest and fees on PPP loans. In 2020 the table above includes comparable PPP interest and fees of $2.1 million.


Average balance sheet and net interest income	Year ended December 31, 2021					Year ended December 31, 2020
		(dollars in thousands)
	Average				Average	Average				Average
Assets:	Balance		Interest		Rate	Balance		Interest		Rate

Interest earning assets:
Loans, net of deferred fees and costs**	$	4,597,977	$	192,338	4.18%	$	3,931,758	$	170,449	4.34%
Leases-bank qualified*		5,557		377	6.78%		8,885		647	7.28%
Investment securities-taxable		1,059,229		28,661	2.71%		1,317,031		37,822	2.87%
Investment securities-nontaxable*		3,757		130	3.46%		4,412		145	3.29%
Interest earning deposits at Federal Reserve Bank		637,056		715	0.11%		381,290		1,885	0.49%
Net interest earning assets		6,303,576		222,221	3.53%		5,643,376		210,948	3.74%

Allowance for credit losses		(16,469)					(13,878)
Assets held for sale from discontinued operations		95,527		3,096	3.24%		127,519		4,222	3.31%
Other assets		217,476					226,210
	$	6,600,110				$	5,983,227

Liabilities and Shareholders' Equity:
Deposits:
Demand and interest checking	$	5,321,283	$	5,022	0.09%	$	4,864,236	$	11,356	0.23%
Savings and money market		427,708		601	0.14%		291,204		442	0.15%
Time deposits		—		—	—		79,439		1,483	1.87%
Total deposits		5,748,991		5,623	0.10%		5,234,879		13,281	0.25%

Short-term borrowings		19,958		49	0.25%		27,322		198	0.72%
Repurchase agreements		41		—	—		49		—	—
Subordinated debentures		13,401		449	3.35%		13,401		524	3.91%
Senior debt		100,283		5,118	5.10%		38,532		1,913	4.96%
Total deposits and liabilities		5,882,674		11,239	0.19%		5,314,183		15,916	0.30%

Other liabilities		100,627					137,983
Total liabilities		5,983,301					5,452,166

Shareholders' equity		616,809					531,061
	$	6,600,110				$	5,983,227
Net interest income on tax equivalent basis*			$	214,078				$	199,254

Tax equivalent adjustment				106					166

Net interest income			$	213,972				$	199,088
Net interest margin *					3.35%					3.45%

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

NOTE: In the table above, the 2021 interest on loans reflects $4.6 million of interest and fees which were earned on a short-term line of credit to another institution to initially fund PPP loans, which did not significantly increase average loans or assets and which are not expected to recur. Interest on loans in each of 2021 and 2020 also includes $5.8 million of interest and fees on PPP loans. Increases in interest earning deposits at the Federal Reserve Bank reflect increased deposits resulting from stimulus payments distributed to a large segment of the population, resulting from December 2020 federal legislation.


Allowance for credit losses	Year ended
	December 31,		December 31,
	2021		2020
	(dollars in thousands)

Balance in the allowance for credit losses at beginning of period (1)	$	16,082	$	12,875

Loans charged-off:
SBA non-real estate		1,138		1,350
SBA commercial mortgage		417		–
Direct lease financing		412		2,243
SBLOC		15		–
Consumer - home equity		10		–
Consumer - other		14		–
Total		2,006		3,593

Recoveries:
SBA non-real estate		51		103
SBA commercial mortgage		9		–
Direct lease financing		58		570
Consumer - home equity		1,099		–
Total		1,217		673
Net charge-offs		789		2,920
Provision credited to allowance, excluding commitment provision		2,513		6,127

Balance in allowance for credit losses at end of period	$	17,806	$	16,082
Net charge-offs/average loans		0.03%		0.07%
Net charge-offs/average assets		0.01%		0.05%

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



Loan portfolio	December 31,		September 30,		June 30,		December 31,
	2021		2021		2021		2020
	(in thousands)

SBL non-real estate	$	147,722	$	171,845	$	228,958	$	255,318
SBL commercial mortgage		361,171		367,272		343,487		300,817
SBL construction		27,199		23,117		18,494		20,273
Small business loans *		536,092		562,234		590,939		576,408
Direct lease financing		531,012		514,068		506,424		462,182
SBLOC / IBLOC**		1,929,581		1,834,523		1,729,628		1,550,086
Advisor financing ***		115,770		81,143		72,190		48,282
Real estate bridge lending		621,702		128,699		–		–
Other loans ****		5,014		4,917		5,840		6,426
		3,739,171		3,125,584		2,905,021		2,643,384
Unamortized loan fees and costs		8,053		11,078		10,323		8,939
Total loans, net of unamortized fees and costs	$	3,747,224	$	3,136,662	$	2,915,344	$	2,652,323


Small business portfolio		December 31,		September 30,		June 30,		December 31,
		2021		2021		2021		2020
		(in thousands)

SBL, including unamortized fees and costs	$	541,437	$	566,472	$	593,401	$	577,944
SBL, included in commercial loans, at fair value		199,585		214,301		225,534		243,562
Total small business loans	$	741,022	$	780,773	$	818,935	$	821,506

* 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 $171.8 million to $147.7 million in the fourth quarter of 2021 resulted from U.S. government repayments of $26.5 million of PPP loans authorized by The Consolidated Appropriations Act, 2021. PPP loans totaled $44.8 million at December 31, 2021 and $165.7 million at December 31, 2020, respectively. ** 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 $322,000 and $663,000 at December 31, 2021 and December 31, 2020, respectively. Estimated overdraft charge-offs and recoveries are reflected in the allowance for credit losses and have been immaterial.

Small business loans as of December 31, 2021


	Loan principal
	(in millions)
U.S. government guaranteed portion of SBA loans (a)	$	371
Paycheck Protection Program loans (PPP) (a)		45
Commercial mortgage SBA (b)		183
Construction SBA (c)		17
Non-guaranteed portion of U.S. government guaranteed loans (d)		100
Non-SBA small business loans (e)		17
Total principal	$	733
Unamortized fees and costs		8
Total small business loans	$	741

(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 $17 million in Construction SBA loans, $13 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 $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 December 31, 2021

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


	SBL commercial mortgage*		SBL construction*		SBL non-real estate		Total		% Total
		(in millions)
Hotels and motels	$	65	$	4	$	—	$	69	22%
Full-service restaurants		13		2		3		18	6%
Child day care services		14		—		1		15	5%
Outpatient mental health and substance abuse centers		14		—		—		14	5%
Baked goods stores		4		—		9		13	4%
Lessors of nonresidential buildings		11		—		—		11	4%
Car washes		10		—		—		10	3%
Offices of lawyers		9		—		—		9	3%
Funeral homes and funeral services		8		—		—		8	3%
All other amusement and recreation industries		7		—		1		8	2%
General warehousing and storage		7		—		—		7	2%
Fitness and recreational sports centers		—		5		2		7	2%
Assisted living facilities for the elderly		6		—		—		6	2%
Limited-service restaurants		1		2		3		6	1%
Gasoline stations with convenience stores		4		—		—		4	1%
Other technical and trade schools		—		4		—		4	1%
Offices of dentists		3		—		—		3	1%
Other warehousing and storage		3		—		—		3	1%
All other miscellaneous wood product manufacturing		3		—		—		3	1%
Plumbing, heating, and air-conditioning contractors		3		—		—		3	1%
Other performing arts companies		3		—		—		3	1%
Offices of physicians		3		—		—		3	1%
Lessors of other real estate property		2		—		—		2	1%
All other miscellaneous general purpose machinery manufacturing		2		—		—		2	1%
Landscaping services		1		—		1		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%
Other**		45		—		26		71	19%
Total	$	253	$	17	$	46	$	316	100%

* Of the SBL commercial mortgage and SBL construction loans, $65 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 December 31, 2021

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


	SBL commercial mortgage*		SBL construction*		SBL non-real estate		Total		% Total
		(in millions)
Florida	$	59	$	—	$	6	$	65	21%
California		42		2		4		48	15%
North Carolina		23		5		3		31	10%
Pennsylvania		27		—		3		30	9%
New York		14		5		3		22	7%
Illinois		16		—		2		18	6%
Texas		12		—		4		16	5%
New Jersey		6		—		7		13	4%
Virginia		9		—		—		9	3%
Tennessee		10		—		—		10	3%
Colorado		3		5		1		9	3%
Michigan		4		—		1		5	2%
Georgia		3		—		1		4	1%
Ohio		3		—		1		4	1%
Washington		3		—		—		3	1%
Other States		19		—		10		29	9%
Total	$	253	$	17	$	46	$	316	100%

Top 10 loans as of December 31, 2021


Type*	State		SBL commercial mortgage*
		(in millions)
Mental health and substance abuse center		FL	$	10
Hotel		FL		9
Lawyers office		CA		9
General warehousing and storage		PA		7
Hotel		NC		6
Assisted living facility		FL		5
Hotel		NY		5
Hotel		NC		5
Mental health and substance abuse center		PA		4
Hotel		PA		4
Total			$	64

* 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 December 31, 2021


Type	# Loans		Balance	Weighted average origination date LTV	Weighted average interest rate
	(dollars in millions)
Real estate bridge lending (multi-family apartments)*	57	$	622	74%	3.99%

Commercial real estate loans, at fair value:
Multi-family (apartments)*	86	$	988	76%	4.75%
Hospitality (hotels and lodging)	9		69	65%	5.68%
Retail	6		61	71%	4.33%
Other	7		13	73%	5.12%
	108		1,131	75%	4.79%
Fair value adjustment			(4)
Total commercial real estate loans, at fair value			1,127
Total commercial real estate loans		$	1,749	75%	4.52%

*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 December 31, 2021				15 largest loans (all multi-family) as of December 31, 2021

State		Balance	Origination date LTV	State		Balance	Origination date LTV
(in millions)				(in millions)
Texas	$	607	76%	Texas	$	39	79%
Georgia		168	75%	Texas		37	75%
Ohio		111	72%	Texas		37	80%
Alabama		90	74%	Tennessee		30	62%
Florida		76	74%	Missouri		30	72%
Arizona		65	74%	Texas		30	75%
Tennessee		64	66%	Mississippi		29	79%
Other States each