The Bancorp, Inc.NASDAQ: TBBK

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

Jul 28, 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" or “we”) (NASDAQ: TBBK), a financial holding company, today reported financial results for the second quarter of 2022.

Highlights

For the quarter ended June 30, 2022, The Bancorp earned pre-tax income of $41.1 million, compared to $37.0 million for the quarter ended June 30, 2021. The 2021 quarter included $4.3 million of Payroll Protection Program (“PPP”) related interest and fees, substantially all of which were eliminated in the current year quarter. For those respective periods, net income amounted to $30.4 million, or $0.53 diluted earnings per share, compared to net income of $29.4 million, or $0.50 diluted earnings per share.

Return on assets and equity for the quarter ended June 30, 2022 amounted to 1.7% and 19%, respectively, compared to 1.7% and 19%, respectively, for the quarter ended June 30, 2021 (all percentages “annualized”).

Net interest margin amounted to 3.17% for the quarter ended June 30, 2022, compared to 3.19% for the quarter ended June 30, 2021.

Net interest income was $54.6 million for the quarter ended June 30, 2022, compared to $54.1 million for the quarter ended June 30, 2021. The 2021 quarter included $4.3 million of PPP related interest and fees, substantially all of which were eliminated in the current year quarter.

Excluding commercial loans, at fair value, which were originally generated for sale, total loans increased to $4.75 billion at June 30, 2022, compared to $4.16 billion at March 31, 2022 and $2.92 billion at June 30, 2021. Those increases reflected growth of 13% quarter over quarter and 61% year over year. Those percentage increases exclude the impact of $55.6 million of June 30, 2022 balances 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 $1.29 billion, or 5%, to $28.39 billion for the quarter ended June 30, 2022 compared to the quarter ended June 30, 2021. GDV was increased in 2021 by the impact of pandemic related government stimulus payments.

SBLOC (securities backed lines of credit), IBLOC (insurance backed lines of credit) and investment advisor financing loans collectively increased 35% year over year and 10% quarter over quarter to $2.43 billion at June 30, 2022.

Small Business Loans, including those held at fair value, grew 6% year over year to $729.8 million at June 30, 2022, and 3.5% quarter over quarter. That growth is exclusive of PPP loan balances which amounted to $10.3 million and $129.4 million, respectively, at June 30, 2022 and June 30, 2021.

Direct lease financing balances increased 15% year over year to $583.1 million at June 30, 2022, and 8% quarter over quarter.

We resumed non-SBA commercial real estate bridge lending in the third quarter of 2021. At June 30, 2022, the balance of such real estate bridge loans was $1.11 billion compared to $803.5 million at March 31, 2022, reflecting quarter over quarter growth of 38%.

The average interest rate on $6.38 billion of average deposits and interest-bearing liabilities during the second quarter of 2022 was 0.44%. Average deposits of $6.25 billion for second quarter 2022, reflected a decrease of 0.1% from the $6.26 billion of average deposits for the quarter ended June 30, 2021, which had increased 17% over the June 30, 2020 quarter. Deposit levels during these periods reflected variability resulting from the pandemic and related government stimulus payments.

As of June 30, 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 9.51%, 13.46%, 13.84% and 13.46%, respectively, compared to well-capitalized minimums of 5%, 8%, 10% and 6.5%, respectively. The Bancorp and its wholly owned subsidiary, The Bancorp Bank, each remain well capitalized under banking regulations.

Book value per common share at June 30, 2022 was $11.55 per share compared to $10.77 per share at June 30, 2021, an increase of 7%, primarily as a result of retained earnings. Increases resulting from retained earnings and reductions in shares from related repurchases were partially offset by reductions in the market value of securities, which are recognized through equity.

The Bancorp repurchased 577,926 shares of its common stock at an average cost of $25.95 per share during the quarter ended June 30, 2022.

“The second quarter continued to show strong growth across our platform. With the anticipated continued increase in interest rates based on fed funds futures and strong business pipelines, we expect profitability to steadily increase over the next 18 months. We are raising our guidance for 2022 from $2.15 per share to a range of $2.25 to $2.30 per share. This range excludes the impact of 2022 share repurchases but includes interest rate assumptions based on fed funds expectations.”

The Bancorp reported net income of $30.4 million, or $0.53 per diluted share, for the quarter ended June 30, 2022, compared to net income of $29.4 million, or $0.50 per diluted share, for the quarter ended June 30, 2021.

Conference Call Webcast

You may access the LIVE webcast of The Bancorp's Quarterly Earnings Conference Call at 8:00 AM ET Friday, July 29, 2022 by clicking on the webcast link on The Bancorp's homepage at www.thebancorp.com. Or you may dial 866.374.5140, access code 81692741. You may listen to the replay of the webcast following the live call on The Bancorp's investor relations website.

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				Six months ended
		June 30,				June 30,
Consolidated condensed income statements	2022		2021		2022		2021
		(in thousands, except per share data)

Net interest income	$	54,569	$	54,069	$	107,422	$	107,826
Provision for (reversal of) credit losses		(1,450)		(951)		3,509		(129)
Non-interest income
ACH, card and other payment processing fees		2,338		1,904		4,322		3,700
Prepaid, debit card and related fees		20,038		19,447		38,690		38,655
Net realized and unrealized gains on commercial
loans, at fair value		3,682		2,579		10,517		4,575
Leasing related income		1,545		1,767		2,518		2,732
Other non-interest income		350		164		470		273
Total non-interest income		27,953		25,861		56,517		49,935
Non-interest expense
Salaries and employee benefits		25,999		27,087		49,847		52,745
Data processing expense		1,246		1,146		2,435		2,272
Legal expense		1,474		2,044		2,268		4,098
Legal settlement		1,152		—		1,152		—
FDIC insurance		673		2,589		1,647		4,969
Software		4,165		3,706		8,029		7,390
Other non-interest expense		8,136		7,311		15,819		14,292
Total non-interest expense		42,845		43,883		81,197		85,766
Income from continuing operations before income taxes		41,127		36,998		79,233		72,124
Income tax expense		10,725		7,840		19,865		16,906
Net income from continuing operations		30,402		29,158		59,368		55,218
Discontinued operations
Income from discontinued operations before income taxes		—		361		—		237
Income tax expense		—		84		—		55
Net income from discontinued operations, net of tax		—		277		—		182
Net income	$	30,402	$	29,435	$	59,368	$	55,400

Net income per share from continuing operations - basic	$	0.54	$	0.51	$	1.04	$	0.96
Net income per share from discontinued operations - basic	$	—	$	—	$	—	$	0.01
Net income per share - basic	$	0.54	$	0.51	$	1.04	$	0.97

Net income per share from continuing operations - diluted	$	0.53	$	0.49	$	1.03	$	0.93
Net income per share from discontinued operations - diluted	$	—	$	—	$	—	$	0.01
Net income per share - diluted	$	0.53	$	0.50	$	1.03	$	0.94
Weighted average shares - basic		56,801,518		57,230,576		56,962,000		57,232,557
Weighted average shares - diluted		57,453,730		59,022,925		57,772,538		59,086,956

Note: Compared to higher rates in recent periods, the effective tax rate for the three months ended June 30, 2021 approximated 21% 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 various grant dates.



Condensed consolidated balance sheets	June 30,		March 31,		December 31,		June 30,
	2022 (unaudited)		2022 (unaudited)		2021		2021 (unaudited)
		(in thousands, except share data)
Assets:
Cash and cash equivalents
Cash and due from banks	$	12,873	$	11,399	$	5,382	$	5,470
Interest earning deposits at Federal Reserve Bank		329,992		662,827		596,402		583,498
Total cash and cash equivalents		342,865		674,226		601,784		588,968

Investment securities, available-for-sale, at fair value		826,616		907,338		953,709		1,106,075
Commercial loans, at fair value		995,493		1,180,885		1,388,416		1,758,264
Loans, net of deferred fees and costs		4,754,697		4,164,298		3,747,224		2,915,344
Allowance for credit losses		(19,087)		(19,051)		(17,806)		(15,292)
Loans, net		4,735,610		4,145,247		3,729,418		2,900,052
Federal Home Loan Bank and Atlantic Central Bankers Bank stock		1,643		1,663		1,663		1,667
Premises and equipment, net		16,693		16,314		16,156		17,392
Accrued interest receivable		19,264		17,284		17,871		18,668
Intangible assets, net		2,248		2,348		2,447		2,646
Other real estate owned		18,873		18,873		18,873		17,343
Deferred tax asset, net		23,344		18,521		12,667		10,923
Investment in unconsolidated entity, at fair value		—		—		—		24,988
Assets held-for-sale from discontinued operations		—		—		3,268		12,105
Other assets		124,511		99,961		96,967		91,516
Total assets	$	7,107,160	$	7,082,660	$	6,843,239	$	6,550,607

Liabilities:
Deposits
Demand and interest checking	$	5,394,562	$	5,506,083	$	5,561,365	$	5,225,024
Savings and money market		486,189		722,240		415,546		459,688
Total deposits		5,880,751		6,228,323		5,976,911		5,684,712

Securities sold under agreements to repurchase		42		42		42		42
Short-term borrowings		385,000		—		—		—
Senior debt		98,866		98,774		98,682		98,498
Subordinated debenture		13,401		13,401		13,401		13,401
Other long-term borrowings		39,125		39,318		39,521		39,901
Other liabilities		33,439		50,507		62,228		94,944
Total liabilities	$	6,450,624	$	6,430,365	$	6,190,785	$	5,931,498

Shareholders' equity:
Common stock - authorized, 75,000,000 shares of $1.00 par value; 56,865,494 and 57,458,287 shares issued and outstanding at June 30, 2022 and 2021, respectively		56,865		57,155		57,371		57,458
Additional paid-in capital		323,774		336,604		349,686		363,241
Retained earnings		298,474		268,072		239,106		183,853
Accumulated other comprehensive (loss) income		(22,577)		(9,536)		6,291		14,557
Total shareholders' equity		656,536		652,295		652,454		619,109

Total liabilities and shareholders' equity	$	7,107,160	$	7,082,660	$	6,843,239	$	6,550,607

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.



Average balance sheet and net interest income		Three months ended June 30, 2022					Three months ended June 30, 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**	$	5,467,516	$	55,100	4.03%	$	4,572,712	$	49,378	4.32%
Leases-bank qualified*		3,665		63	6.88%		5,783		96	6.64%
Investment securities-taxable		879,112		5,432	2.47%		1,081,419		7,201	2.66%
Investment securities-nontaxable*		3,559		31	3.48%		3,878		32	3.30%
Interest earning deposits at Federal Reserve Bank		545,027		1,004	0.74%		1,120,039		300	0.11%
Net interest earning assets		6,898,879		61,630	3.57%		6,783,831		57,007	3.36%

Allowance for credit losses		(20,295)					(16,406)
Assets held-for-sale from discontinued operations		—		—	—		98,895		781	3.16%
Other assets		243,459					201,539
	$	7,122,043				$	7,067,859

Liabilities and Shareholders' Equity:
Deposits:
Demand and interest checking	$	5,697,507	$	4,390	0.31%	$	5,736,776	$	1,327	0.09%
Savings and money market		556,847		1,200	0.86%		526,112		192	0.15%
Total deposits		6,254,354		5,590	0.36%		6,262,888		1,519	0.10%

Short-term borrowings		11,593		32	1.10%		—		—	—
Repurchase agreements		41		—	—		41		—	—
Subordinated debentures		13,401		139	4.15%		13,401		112	3.34%
Senior debt		98,816		1,280	5.18%		100,239		1,280	5.11%
Total deposits and liabilities		6,378,205		7,041	0.44%		6,376,569		2,911	0.18%

Other liabilities		89,422					83,353
Total liabilities		6,467,627					6,459,922

Shareholders' equity		654,416					607,937
	$	7,122,043				$	7,067,859
Net interest income on tax equivalent basis*			$	54,589				$	54,877

Tax equivalent adjustment				20					27

Net interest income			$	54,569				$	54,850
Net interest margin *					3.17%					3.19%

* 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 $3.0 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 $41,000 and $1.3 million, respectively, of interest and fees on PPP loans.



Average balance sheet and net interest income	Six months ended June 30, 2022					Six months ended June 30, 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**	$	5,302,850	$	105,638	3.98%	$	4,524,911	$	97,189	4.30%
Leases-bank qualified*		3,839		130	6.77%		6,379		214	6.71%
Investment securities-taxable		909,017		10,323	2.27%		1,136,631		16,009	2.82%
Investment securities-nontaxable*		3,559		62	3.48%		3,960		67	3.38%
Interest earning deposits at Federal Reserve Bank		616,865		1,351	0.44%		935,239		483	0.10%
Net interest earning assets		6,836,130		117,504	3.44%		6,607,120		113,962	3.45%

Allowance for credit losses		(19,075)					(16,241)
Assets held for sale from discontinued operations		—		—	—		103,983		1,634	3.14%
Other assets		232,402					203,821
	$	7,049,457				$	6,898,683

Liabilities and Shareholders' Equity:
Deposits:
Demand and interest checking	$	5,636,415	$	5,796	0.21%	$	5,619,608	$	2,944	0.10%
Savings and money market		544,515		1,400	0.51%		466,978		341	0.15%
Total deposits		6,180,930		7,196	0.23%		6,086,586		3,285	0.11%

Short-term borrowings		6,104		32	1.05%		6,491		8	0.25%
Repurchase agreements		41		—	—		41		—	—
Subordinated debentures		13,401		255	3.81%		13,401		225	3.36%
Senior debt		98,770		2,559	5.18%		100,190		2,559	5.11%
Total deposits and liabilities		6,299,246		10,042	0.32%		6,206,709		6,077	0.20%

Other liabilities		95,716					91,837
Total liabilities		6,394,962					6,298,546

Shareholders' equity		654,495					600,137
	$	7,049,457				$	6,898,683
Net interest income on tax equivalent basis*			$	107,462				$	109,519

Tax equivalent adjustment				40					59

Net interest income			$	107,422				$	109,460
Net interest margin *					3.14%					3.26%

* 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 $4.5 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 for 2022 and 2021 includes $481,000 and $3.7 million, respectively, of interest and fees on PPP loans.


Allowance for credit losses		Six months ended			Year ended
	June 30,		June 30,		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		844		321		1,138
SBA commercial mortgage		—		23		417
Direct lease financing		199		193		412
SBLOC		—		15		15
Consumer - home equity		—		—		10
Consumer - other		—		—		14
Total		1,043		552		2,006

Recoveries:
SBA non-real estate		33		15		51
SBA commercial mortgage		—		—		9
Direct lease financing		93		7		58
Consumer - home equity		—		—		1,099
Total		126		22		1,217
Net charge-offs		917		530		789
Provision for (reversal of) credit losses, excluding unfunded commitments		2,198		(260)		2,513

Balance in allowance for credit losses at end of period	$	19,087	$	15,292	$	17,806
Net charge-offs/average loans		0.02%		0.02%		0.03%
Net charge-offs/average assets		0.01%		0.01%		0.01%

(1) Excludes activity from discontinued operations.



Loan portfolio	June 30,		March 31,		December 31,		June 30,
	2022		2022		2021		2021
	(in thousands)

SBL non-real estate	$	112,854	$	122,387	$	147,722	$	228,958
SBL commercial mortgage		425,219		385,559		361,171		343,487
SBL construction		27,042		31,432		27,199		18,494
Small business loans		565,115		539,378		536,092		590,939
Direct lease financing		583,086		538,616		531,012		506,424
SBLOC / IBLOC *		2,274,256		2,067,233		1,929,581		1,729,628
Advisor financing **		155,235		146,461		115,770		72,190
Real estate bridge loans		1,106,875		803,477		621,702		—
Other loans ***		63,514		61,096		5,014		5,840
		4,748,081		4,156,261		3,739,171		2,905,021
Unamortized loan fees and costs		6,616		8,037		8,053		10,323
Total loans, including unamortized fees and costs	$	4,754,697	$	4,164,298	$	3,747,224	$	2,915,344



Small business portfolio	June 30,		March 31,		December 31,		June 30,
	2022		2022		2021		2021
		(in thousands)

SBL, including unamortized fees and costs	$	571,559	$	545,462	$	541,437	$	593,401
SBL, included in loans, at fair value		168,579		183,408		199,585		225,534
Total small business loans ****	$	740,138	$	728,870	$	741,022	$	818,935

* 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. *** Includes demand deposit overdrafts reclassified as loan balances totaling $170,000 and $322,000 at June 30, 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 (in thousands). A reduction in SBL non-real estate from $122.4 million to $112.9 million in the second quarter of 2022 resulted primarily from U.S. government repayments of PPP loans authorized by The Consolidated Appropriations Act, 2021. PPP loans totaled $10.3 million at June 30, 2022, $23.7 million at March 31, 2022 and $129.4 million at June 30, 2021.

Small business loans as of June 30, 2022

	Loan principal
	(in millions)
U.S. government guaranteed portion of SBA loans (a)	$	375
Paycheck Protection Program loans (PPP) (a)		10
Commercial mortgage SBA (b)		216
Construction SBA (c)		12
Non-guaranteed portion of U.S. government guaranteed loans (d)		100
Non-SBA small business loans (e)		21
Total principal	$	734
Unamortized fees and costs		6
Total small business loans	$	740

(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 $12 million in Construction SBA loans, $11 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 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 $21 million of non-SBA loans are primarily comprised of approximately 20 conventional coffee/doughnut/carryout franchisee note purchases.

Small business loans by type as of June 30, 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 (except casino hotels) and motels	$	69	$	—	$	—	$	69	19%
Full-service restaurants		13		2		2		17	5%
Car washes		16		1		—		17	5%
Child day care services		15		—		1		16	4%
Outpatient mental health and substance abuse centers		15		—		—		15	4%
Baked goods stores		4		—		9		13	4%
Funeral homes and funeral services		10		—		—		10	3%
Fitness and recreational sports centers		5		2		2		9	3%
Offices of lawyers		9		—		—		9	3%
Assisted living facilities for the elderly		9		—		—		9	3%
Gasoline stations with convenience stores		8		—		—		8	2%
Lessors of nonresidential buildings		8		—		—		8	2%
General warehousing and storage		7		—		—		7	2%
Lessors of other real estate property		6		—		—		6	2%
All other amusement and recreation industries		5		—		1		6	2%
Limited-service restaurants		1		2		2		5	1%
Other miscellaneous durable goods merchant wholesalers		5		—		—		5	1%
Other technical and trade schools		—		5		—		5	1%
Other spectator sports		5		—		—		5	1%
Plumbing, heating, and air-conditioning contractors		3		—		1		4	1%
Offices of dentists		2		1		—		3	1%
Landscaping services		2		—		1		3	1%
Other warehousing and storage		3		—		—		3	1%
All other miscellaneous wood product manufacturing		3		—		—		3	1%
Offices of physicians (except mental health specialists)		3		—		—		3	1%
Vocational rehabilitation services		3		—		—		3	1%
Elementary and secondary schools		2		—		—		2	1%
All other miscellaneous general purpose machinery manufacturing		2		—		—		2	1%
Sewing, needlework, and piece goods stores		2		—		—		2	1%
Pet care (except veterinary) services		2		—		—		2	1%
Automotive body, paint, and interior repair and maintenance		2		—		—		2	1%
Amusement arcades		2		—		—		2	1%
Offices of real estate agents and brokers		2		—		—		2	1%
Other**		49		1		23		73	19%
Total	$	292	$	14	$	42	$	348	100%

* Of the SBL commercial mortgage and SBL construction loans, $79 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 June 30, 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	$	67	$	—	$	5	$	72	20%
California		48		2		3		53	15%
North Carolina		23		7		2		32	9%
New York		25		—		3		28	8%
Pennsylvania		22		—		2		24	6%
Colorado		11		4		1		16	5%
Illinois		15		—		2		17	5%
Texas		12		—		4		16	5%
New Jersey		7		—		7		14	4%
Virginia		9		—		1		10	3%
Connecticut		10		—		—		10	3%
Georgia		7		—		2		9	3%
Tennessee		8		—		—		8	2%
Ohio		6		—		—		6	2%
Michigan		3		—		—		3	1%
Other States		19		1		10		30	9%
Total	$	292	$	14	$	42	$	348	100%

Top 10 loans as of June 30, 2022

Type*	State		SBL commercial 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		NY		6
Hotel		NC		5
Assisted living facility		FL		5
Mental health and substance abuse center		CT		5
Technical and trade school		NC		5
Hotel		PA		5
Total			$	66

* 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 June 30, 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)*	95	$	1,107	74%	4.52%

Non-SBA commercial real estate loans, at fair value:
Multi-family (apartment bridge loans)*	48	$	697	76%	4.74%
Hospitality (hotels and lodging)	8		71	65%	5.65%
Retail	4		52	71%	5.01%
Other	5		13	74%	5.06%
	65		833	74%	4.84%
Fair value adjustment			(6)
Total non-SBA commercial real estate loans, at fair value			827
Total commercial real estate loans		$	1,934	74%	4.67%

*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 June 30, 2022				15 largest loans as of June 30, 2022

State		Balance	Origination date LTV	State		Balance	Origination date LTV
(dollars in millions)				(dollars in millions)
Texas	$	678	76%	Texas	$	41	75%
Georgia		189	73%	Texas		39	79%
Ohio		115	72%	Texas		39	72%
Florida		103	73%	Tennessee		38	72%
Tennessee		101	70%	Texas		37	75%
Alabama		89	74%	Texas		37	80%
Arizona		56	72%	Michigan		31	79%
Other States each