The Bancorp, Inc.NASDAQ: TBBK

The Bancorp, Inc. Reports Fourth Quarter and Full Year 2022 Financial Results and Updates 2023 Guidance

Jan 26, 2023 · 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" or “we”) (NASDAQ: TBBK), a financial holding company, today reported financial results for the fourth quarter of 2022.

Highlights

The Bancorp reported net income of $40.2 million, or $0.71 per diluted share, for the quarter ended December 31, 2022, compared to net income of $27.0 million, or $0.46 per diluted share, for the quarter ended December 31, 2021, or a 54% increase in income per diluted share.
Return on assets and equity for the quarter ended December 31, 2022 amounted to 2.1% and 24%, respectively, compared to 1.7% and 17%, respectively, for the quarter ended December 31, 2021 (all percentages “annualized”).
Net interest income increased 47% to $76.8 million for the quarter ended December 31, 2022, compared to $52.2 million for the quarter ended December 31, 2021.
Net interest margin amounted to 4.21% for the quarter ended December 31, 2022, compared to 3.51% for the quarter ended December 31, 2021, and 3.69% for the quarter ended September 30, 2022.
Excluding commercial loans, at fair value, which were originally generated for sale, total loans increased to $5.49 billion at December 31, 2022, compared to $5.27 billion at September 30, 2022 and $3.75 billion at December 31, 2021. Those increases reflected growth of 4% quarter over quarter and 45% year over year. Those percentage increases exclude the impact of $50.4 million of December 31, 2022 balances previously included in discontinued assets which were reclassified to loans held for investment in the first quarter of 2022.
Gross dollar volume (“GDV”), representing the total amounts spent on prepaid and debit cards, increased $3.25 billion, or 13%, to $28.07 billion for the quarter ended December 31, 2022 compared to the quarter ended December 31, 2021. Total prepaid, debit card, ACH and other payment fees increased 10% to $21.8 million for fourth quarter 2022 compared to the fourth quarter of 2021.
SBLOC (securities backed lines of credit), IBLOC (insurance backed lines of credit) and investment advisor financing loans collectively increased 22% year over year and decreased 1% quarter over quarter to $2.50 billion at December 31, 2022.
Small Business Loans, including those held at fair value, grew 10% year over year to $763.8 million at December 31, 2022, and 4% quarter over quarter. That growth is exclusive of PPP loan balances which amounted to $4.5 million and $44.8 million, respectively, at December 31, 2022 and December 31, 2021.
Direct lease financing balances increased 19% year over year to $632.2 million at December 31, 2022, and 5% quarter over quarter.
We resumed non-SBA commercial real estate bridge lending in the third quarter of 2021. At December 31, 2022, the balance of such real estate bridge loans, consisting of apartment buildings, was $1.67 billion compared to $1.49 billion at September 30, 2022, reflecting quarter over quarter growth of 12%. At December 31, 2021, these loans totaled $621.7 million.
The average interest rate on $6.80 billion of average deposits and interest-bearing liabilities during the fourth quarter of 2022 was 1.77%. Average deposits of $6.62 billion for the fourth quarter of 2022, reflected an increase of 25% from the $5.31 billion of average deposits for the quarter ended December 31, 2021.
As of December 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 9.63%, 13.40%, 13.87% and 13.40%, respectively, compared to well-capitalized minimums of 5%, 8%, 10% and 6.5%, respectively. The Bancorp and its wholly owned subsidiary, The Bancorp Bank, National Association, each remain well capitalized under banking regulations.
Book value per common share at December 31, 2022 was $12.46 per share compared to $11.37 per share at December 31, 2021, an increase of 10%. Increases resulting from retained earnings were partially offset by reductions in the market value of securities available for sale, which are recognized through equity.
The Bancorp repurchased 553,003 shares of its common stock at an average cost of $27.12 per share during the quarter ended December 31, 2022.

“We finished 2022 with significant improvements in profitability, NIM and GDV growth, "said CEO and President Damian Kozlowski. "Our team continues to be focused on further improving our arguably best fintech ecosystem in banking, maintaining a lower risk balance sheet than peers, continuing our rigorous risk management and increasing profitability. We believe 2023 will be another substantial move forward on all fronts and we confirm our guidance of $3.20 a share, an improvement of approximately 40% over 2022 EPS. We expect to increase our share repurchases to $25 million per quarter, or $100 million in 2023, from $15 million a quarter, or $60 million, in 2022.”

Conference Call Webcast

You may access the LIVE webcast of The Bancorp's Quarterly Earnings Conference Call at 8:00 AM ET Friday, January 27, 2023 by clicking on the webcast link on The Bancorp's homepage at www.thebancorp.com. Or you may dial 1.888.396.8049, access code 92735961. 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 3, 2023 by dialing 1.877.674.7070, access code 735961#.

About The Bancorp

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

Forward-Looking Statements

Statements in this earnings release regarding The Bancorp’s business which are not historical facts are "forward-looking statements." These statements may be identified by the use of forward-looking terminology, including but not limited to the words “intend,” “may,” “believe,” “will,” “expect,” “look,” “anticipate,” “plan,” “estimate,” “continue,” or similar words , 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,
Consolidated condensed income statements	2022		2021			2022		2021
		(Dollars in thousands, except per share and share data)

Net interest income	$	76,760	$	52,157		$	248,841	$	210,876
Provision for credit losses		2,777		1,626			7,108		3,110
Non-interest income
ACH, card and other payment processing fees		2,383		1,921			8,935		7,526
Prepaid, debit card and related fees		19,371		17,776			77,236		74,654
Net realized and unrealized gains on commercial
loans, at fair value		2,269		6,004			13,531		14,885
Leasing related income		1,256		1,757			4,822		6,457
Other non-interest income		461		768			1,159		1,227
Total non-interest income		25,740		28,226			105,683		104,749
Non-interest expense
Salaries and employee benefits		27,520		28,159			105,368		105,998
Data processing expense		1,245		1,183			4,972		4,664
Legal expense		703		1,499			3,878		6,848
Legal settlement		—		—			1,152		—
Civil money penalty		—		—			1,750		—
FDIC insurance		944		351			3,270		5,586
Software		4,181		4,224			16,211		15,659
Other non-interest expense		8,882		7,784			32,901		29,595
Total non-interest expense		43,475		43,200			169,502		168,350
Income from continuing operations before income taxes		56,248		35,557			177,914		144,165
Income tax expense		16,007		8,529			47,701		33,724
Net income from continuing operations		40,241		27,028			130,213		110,441
Discontinued operations
(Loss) income from discontinued operations before income taxes		—		(36	)		—		288
Income tax expense		—		—			—		76
Net (loss) income from discontinued operations, net of tax		—		(36	)		—		212
Net income	$	40,241	$	26,992		$	130,213	$	110,653

Net income per share from continuing operations - basic	$	0.72	$	0.47		$	2.30	$	1.93
Net income per share from discontinued operations - basic	$	—	$	—		$	—	$	—
Net income per share - basic	$	0.72	$	0.47		$	2.30	$	1.93

Net income per share from continuing operations - diluted	$	0.71	$	0.46		$	2.27	$	1.88
Net income per share from discontinued operations - diluted	$	—	$	—		$	—	$	—
Net income per share - diluted	$	0.71	$	0.46		$	2.27	$	1.88
Weighted average shares - basic		55,885,015		56,966,661			56,556,303		57,190,311
Weighted average shares - diluted		56,588,011		58,369,204			57,268,946		58,830,437


Condensed consolidated balance sheets	December 31,			September 30,			June 30,			December 31,
	2022 (unaudited)			2022 (unaudited)			2022 (unaudited)			2021
		(Dollars in thousands, except per share and share data)
Assets:
Cash and cash equivalents
Cash and due from banks	$	24,063		$	22,537		$	12,873		$	5,382
Interest earning deposits at Federal Reserve Bank		864,126			700,175			329,992			596,402
Total cash and cash equivalents		888,189			722,712			342,865			601,784

Investment securities, available-for-sale, at fair value		766,016			790,594			826,616			953,709
Commercial loans, at fair value		589,143			818,040			995,493			1,388,416
Loans, net of deferred fees and costs		5,486,853			5,267,375			4,754,697			3,747,224
Allowance for credit losses		(22,374	)		(19,689	)		(19,087	)		(17,806	)
Loans, net		5,464,479			5,247,686			4,735,610			3,729,418
Federal Home Loan Bank, Atlantic Central Bankers Bank, and Federal Reserve Bank stock		12,629			12,629			1,643			1,663
Premises and equipment, net		18,401			18,443			16,693			16,156
Accrued interest receivable		32,005			25,506			19,264			17,871
Intangible assets, net		2,049			2,149			2,248			2,447
Other real estate owned		21,210			18,873			18,873			18,873
Deferred tax asset, net		19,703			27,241			23,344			12,667
Assets held-for-sale from discontinued operations		—			—			—			3,268
Other assets		89,176			93,201			137,086			96,967
Total assets	$	7,903,000		$	7,777,074		$	7,119,735		$	6,843,239

Liabilities:
Deposits
Demand and interest checking	$	6,559,617		$	5,934,591		$	5,394,562		$	5,561,365
Savings and money market		140,496			575,381			486,189			415,546
Time deposits, $100,000 and over		330,000			401,331			—			—
Total deposits		7,030,113			6,911,303			5,880,751			5,976,911

Securities sold under agreements to repurchase		42			42			42			42
Short-term borrowings		—			—			385,000			—
Senior debt		99,050			98,958			98,866			98,682
Subordinated debenture		13,401			13,401			13,401			13,401
Other long-term borrowings		10,028			38,928			39,125			39,521
Other liabilities		56,335			50,704			46,014			62,228
Total liabilities	$	7,208,969		$	7,113,336		$	6,463,199		$	6,190,785

Shareholders' equity:
Common stock - authorized, 75,000,000 shares of $1.00 par value; 55,689,627 and 57,370,563 shares issued and outstanding at December 31, 2022 and 2021, respectively		55,690			56,202			56,865			57,371
Additional paid-in capital		299,279			311,569			323,774			349,686
Retained earnings		369,319			329,078			298,474			239,106
Accumulated other comprehensive (loss) income		(30,257	)		(33,111	)		(22,577	)		6,291
Total shareholders' equity		694,031			663,738			656,536			652,454

Total liabilities and shareholders' equity	$	7,903,000		$	7,777,074		$	7,119,735		$	6,843,239


Average balance sheet and net interest income		Three months ended December 31, 2022							Three months ended December 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*	$	6,083,587		$	94,477	6.21	%	$	4,766,271		$	48,792	4.09	%
Leases-bank qualified**		2,952			50	6.78	%		4,465			76	6.81	%
Investment securities-taxable		782,046			8,483	4.34	%		954,172			5,770	2.42	%
Investment securities-nontaxable**		3,559			32	3.60	%		3,558			31	3.49	%
Interest earning deposits at Federal Reserve Bank		424,255			3,886	3.66	%		208,120			65	0.12	%
Net interest earning assets		7,296,399			106,928	5.86	%		5,936,586			54,734	3.69	%

Allowance for credit losses		(20,227	)						(17,108	)
Assets held-for-sale from discontinued operations		—			—	—			83,821			708	3.38	%
Other assets		223,692							189,760
	$	7,499,864						$	6,193,059

Liabilities and Shareholders' Equity:
Deposits:
Demand and interest checking	$	5,891,947		$	21,350	1.45	%	$	4,931,891		$	1,015	0.08	%
Savings and money market		474,302			4,332	3.65	%		373,381			114	0.12	%
Time deposits		257,231			2,193	3.41	%		—			—	—
Total deposits		6,623,480			27,875	1.68	%		5,305,272			1,129	0.09	%

Short-term borrowings		26,847			271	4.04	%		53,315			34	0.26	%
Repurchase agreements		42			—	—			41			—	—
Long-term borrowings		38,951			498	5.11	%		—			—	—
Subordinated debentures		13,401			226	6.75	%		13,401			112	3.34	%
Senior debt		99,005			1,280	5.17	%		100,419			1,280	5.10	%
Total deposits and liabilities		6,801,726			30,150	1.77	%		5,472,448			2,555	0.19	%

Other liabilities		19,254							75,395
Total liabilities		6,820,980							5,547,843

Shareholders' equity		678,884							645,216
	$	7,499,864						$	6,193,059
Net interest income on tax equivalent basis**				$	76,778						$	52,887

Tax equivalent adjustment					18							22

Net interest income				$	76,760						$	52,865
Net interest margin **						4.21	%						3.51	%

* Includes commercial loans, at fair value. All periods include non-accrual loans. ** Full taxable equivalent basis, using a statutory Federal tax rate of 21% for 2022 and 2021.

NOTE: In the table above, interest on loans for 2022 and 2021 includes $12,000 and $991,000, respectively, of interest and fees on PPP loans.


Average balance sheet and net interest income	Year ended December 31, 2022							Year ended December 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*	$	5,670,957		$	275,651	4.86	%	$	4,597,977		$	192,338	4.18	%
Leases-bank qualified**		3,479			235	6.75	%		5,557			377	6.78	%
Investment securities-taxable		855,629			25,598	2.99	%		1,059,229			28,661	2.71	%
Investment securities-nontaxable**		3,559			125	3.51	%		3,757			130	3.46	%
Interest earning deposits at Federal Reserve Bank		479,791			6,762	1.41	%		637,056			715	0.11	%
Net interest earning assets		7,013,415			308,371	4.40	%		6,303,576			222,221	3.53	%

Allowance for credit losses		(19,374	)						(16,469	)
Assets held for sale from discontinued operations		—			—	—			95,527			3,096	3.24	%
Other assets		213,491							217,476
	$	7,207,532						$	6,600,110

Liabilities and Shareholders' Equity:
Deposits:
Demand and interest checking	$	5,670,818		$	39,872	0.70	%	$	5,321,283		$	5,022	0.09	%
Savings and money market		510,370			8,524	1.67	%		427,708			601	0.14	%
Time deposits		86,907			2,740	3.15	%		—			—	—
Total deposits		6,268,095			51,136	0.82	%		5,748,991			5,623	0.10	%

Short-term borrowings		60,312			1,538	2.55	%		19,958			49	0.25	%
Repurchase agreements		41			—	—			41			—	—
Long-term borrowings		39,202			1,004	2.56	%		—			—	—
Subordinated debentures		13,401			658	4.91	%		13,401			449	3.35	%
Senior debt		98,865			5,118	5.18	%		100,283			5,118	5.10	%
Total deposits and liabilities		6,479,916			59,454	0.92	%		5,882,674			11,239	0.19	%

Other liabilities		54,374							100,627
Total liabilities		6,534,290							5,983,301

Shareholders' equity		673,242							616,809
	$	7,207,532						$	6,600,110
Net interest income on tax equivalent basis**				$	248,917						$	214,078

Tax equivalent adjustment					76							106

Net interest income				$	248,841						$	213,972
Net interest margin **						3.55	%						3.35	%

* Includes commercial loans, at fair value. All periods include non-accrual loans. ** Full taxable equivalent basis, using a statutory Federal tax rate of 21% for 2022 and 2021.

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 materially increase average loans or assets and which are not expected to recur. Interest on loans for 2022 and 2021 includes $514,000 and $5.8 million, respectively, of interest and fees on PPP loans.


Allowance for credit losses		Year ended
	December 31,			December 31,
	2022 (unaudited)			2021
	(Dollars in thousands)

Balance in the allowance for credit losses at beginning of period (1)	$	17,806		$	16,082

Loans charged-off:
SBA non-real estate		885			1,138
SBA commercial mortgage		—			417
Direct lease financing		576			412
SBLOC		—			15
Consumer - home equity		—			10
Consumer - other		—			14
Total		1,461			2,006

Recoveries:
SBA non-real estate		140			51
SBA commercial mortgage		—			9
Direct lease financing		124			58
Consumer - home equity		—			1,099
Other loans		24			—
Total		288			1,217
Net charge-offs		1,173			789
Provision for credit losses, excluding commitment provision		5,741			2,513

Balance in allowance for credit losses at end of period	$	22,374		$	17,806
Net charge-offs/average loans		0.03	%		0.03	%
Net charge-offs/average assets		0.02	%		0.01	%

(1) Excludes activity from discontinued operations.


Loan portfolio	December 31,		September 30,		June 30,		December 31,
	2022 (unaudited)		2022 (unaudited)		2022 (unaudited)		2021
	(Dollars in thousands)

SBL non-real estate	$	108,954	$	116,080	$	112,854	$	147,722
SBL commercial mortgage		474,496		429,865		425,219		361,171
SBL construction		30,864		26,841		27,042		27,199
Small business loans		614,314		572,786		565,115		536,092
Direct lease financing		632,160		599,796		583,086		531,012
SBLOC / IBLOC *		2,332,469		2,369,106		2,274,256		1,929,581
Advisor financing **		172,468		168,559		155,235		115,770
Real estate bridge loans		1,669,031		1,488,119		1,106,875		621,702
Other loans ***		61,679		64,980		63,514		5,014
		5,482,121		5,263,346		4,748,081		3,739,171
Unamortized loan fees and costs		4,732		4,029		6,616		8,053
Total loans, including unamortized fees and costs	$	5,486,853	$	5,267,375	$	4,754,697	$	3,747,224

Small business portfolio		December 31,		September 30,		June 30,		December 31,
		2022 (unaudited)		2022 (unaudited)		2022 (unaudited)		2021
		(Dollars in thousands)

SBL, including unamortized fees and costs	$	621,641	$	579,156	$	571,559	$	541,437
SBL, included in loans, at fair value		146,717		159,914		168,579		199,585
Total small business loans ****	$	768,358	$	739,070	$	740,138	$	741,022

* 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 70% of the estimated business enterprise value, based on a third-party valuation, but may be increased depending upon the debt service coverage ratio. Personal guarantees and blanket business liens are obtained as appropriate. *** Includes demand deposit overdrafts reclassified as loan balances totaling $2.6 million and $322,000 at December 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 small business loans held at fair value are comprised of the government guaranteed portion of certain SBA loans at the dates indicated.

Small business loans as of December 31, 2022

	Loan principal
	(Dollars in millions)
U.S. government guaranteed portion of SBA loans (a)	$	375
Paycheck Protection Program loans (PPP) (a)		5
Commercial mortgage SBA (b)		248
Construction SBA (c)		10
Non-guaranteed portion of U.S. government guaranteed loans (d)		100
Non-SBA small business loans		23
Total principal	$	761
Unamortized fees and costs		7
Total small business loans	$	768

(a) This is the portion of SBA 7a loans (7a) and PPP loans that 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 $10 million in Construction SBA loans, $9 million are 504 first mortgages with an origination date LTV of 50-60% and $1 million are SBA interim loans with an approved SBA post-construction full takeout/payoff. (d) The $100 million represents the unguaranteed portion of 7a loans which are generally 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.

Small business loans by type as of December 31, 2022

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

	SBL commercial mortgage*		SBL construction*		SBL non-real estate		Total		% Total
		(Dollars in millions)
Hotels and motels	$	79	$	—	$	—	$	79	21%
Car washes		18		1		—		19	5%
Full-service restaurants		12		3		2		17	4%
Lessors of nonresidential buildings		16		—		—		16	4%
Child day care services		14		—		1		15	4%
Outpatient mental health and substance abuse centers		15		—		—		15	4%
Funeral homes and funeral services		10		—		—		10	3%
Assisted living facilities for the elderly		10		—		—		10	3%
Offices of lawyers		9		—		—		9	2%
Packaged frozen food merchant wholesalers		9		—		—		9	2%
Gasoline stations with convenience stores		8		—		—		8	2%
Lessors of other real estate property		8		—		—		8	2%
Fitness and recreational sports centers		6		—		2		8	2%
General warehousing and storage		7		—		—		7	2%
Plumbing, heating, and air-conditioning contractors		6		—		1		7	2%
Limited-service restaurants		1		2		2		5	1%
Other miscellaneous durable goods merchant wholesalers		5		—		—		5	1%
Lessors of residential buildings and dwellings		5		—		—		5	1%
Other spectator sports		5		—		—		5	1%
All other amusement and recreation industries		4		—		—		4	1%
Gas stations		4		—		—		4	1%
Offices of dentists		3		1		—		4	1%
Other warehousing and storage		3		—		—		3	1%
Vocational rehabilitation services		3		—		—		3	1%
Other**		74		3		29		106	29%
Total	$	334	$	10	$	37	$	381	100%

* Of the SBL commercial mortgage and SBL construction loans, $85 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 $3 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, 2022

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

	SBL commercial mortgage*		SBL construction*		SBL non-real estate		Total		% Total
		(Dollars in millions)
Florida	$	65	$	—	$	4	$	69	18%
California		61		3		3		67	18%
North Carolina		40		7		2		49	13%
New York		25		—		5		30	8%
Pennsylvania		18		—		1		19	5%
Georgia		15		—		2		17	4%
Illinois		15		—		1		16	4%
New Jersey		12		—		3		15	4%
Texas		12		—		3		15	4%
Tennessee		14		—		—		14	4%
Colorado		12		—		1		13	3%
Ohio		11		—		1		12	3%
Connecticut		10		—		1		11	3%
Virginia		8		—		1		9	2%
Michigan		4		—		1		5	1%
Other States		12		—		8		20	6%
Total	$	334	$	10	$	37	$	381	100%

Top 10 loans as of December 31, 2022

Type	State		SBL commercial mortgage
		(Dollars in millions)
Mental health and substance abuse center		FL	$	10
Hotel		FL		9
Lawyer's office		CA		8
General warehousing and storage		PA		7
Hotel		NC		7
Hotel		FL		6
Hotel		NY		6
Hotel		NC		5
Mental health and substance abuse center		CT		5
Assisted living facility		FL		5
Total			$	68

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

Type as of December 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 amortized cost)*	130	$	1,669		72	%	7.69	%

Non-SBA commercial real estate loans, at fair value:
Multi-family (apartment bridge loans)*	22	$	354		76	%	7.52	%
Hospitality (hotels and lodging)	4		36		65	%	8.00	%
Retail	3		42		72	%	7.30	%
Other	3		11		73	%	5.20	%
	32		443		74	%	7.48	%
Fair value adjustment			(1	)
Total non-SBA commercial real estate loans, at fair value			442
Total commercial real estate loans		$	2,111		73	%	7.65	%

*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, 2022				15 largest loans as of December 31, 2022

State		Balance	Origination date LTV	State		Balance	Origination date LTV
(Dollars in millions)				(Dollars in millions)
Texas	$	760	74%	Texas	$	42	75%
Georgia		232	71%	Texas		39	75%
Florida		217	71%	Texas		39	79%
Ohio		95	69%	Texas		39	72%
Tennessee		98	72%	Tennessee		37	72%
Alabama		62	72%	Texas		37	80%
Michigan		72	70%	Michigan		36	62%
Other States each