The Bancorp, Inc.NASDAQ: TBBK

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

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

Highlights

The Bancorp reported net income of $30.6 million, or $0.54 per diluted share, for the quarter ended September 30, 2022, compared to net income of $28.3 million, or $0.48 per diluted share, for the quarter ended September 30, 2021. The $0.54 was impacted by a reduction of approximately $0.03 per share resulting from a non-deductible $1.75 million SEC civil money penalty. Additionally, a $3.3 million net unrealized fair value loss was reflected in “Net realized and unrealized gains on commercial loans, at fair value”, which reduced diluted net income per share by approximately $0.04. The loss resulted primarily from the only movie theater loan in the Company’s portfolios. That loan was originated in 2015 and was a legacy loan from the initial entry into the CMBS securitization business which was subsequently discontinued in 2016. After discontinuance, non-SBA loan originations were primarily comprised of apartment building loans. Of the $2.15 billion of non-SBA commercial loans, at fair value and real estate bridge loans (“REBL”) which together comprise the non-SBA CRE portfolio, $2.05 billion are comprised of apartment building loans.

For the quarter ended September 30, 2022, The Bancorp earned pre-tax income of $42.4 million, which reflected the aforementioned $1.75 million civil money penalty, compared to $36.5 million for the quarter ended September 30, 2021, which included $1.2 million of Payroll Protection Program (“PPP”) related interest and fees, which did not recur in the current year quarter.

Return on assets and equity for the quarter ended September 30, 2022 amounted to 1.7% and 18%, respectively, compared to 1.8% and 18%, respectively, for the quarter ended September 30, 2021 (all percentages “annualized”).

Net interest margin amounted to 3.69% for the quarter ended September 30, 2022, compared to 3.35% for the quarter ended September 30, 2021 and 3.17% for the quarter ended June 30, 2022.

Net interest income increased 27% to $64.7 million for the quarter ended September 30, 2022, compared to $50.9 million for the quarter ended September 30, 2021. The 2021 quarter included $1.2 million of PPP related interest and fees, which did not recur in the current year quarter.

Excluding commercial loans, at fair value, which were originally generated for sale, total loans increased to $5.27 billion at September 30, 2022, compared to $4.75 billion at June 30, 2022 and $3.14 billion at September 30, 2021. Those increases reflected growth of 11% quarter over quarter and 66% year over year. Those percentage increases exclude the impact of $54.2 million of September 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 $3.73 billion, or 15%, to $28.12 billion for the quarter ended September 30, 2022 compared to the quarter ended September 30, 2021. Total prepaid, debit card, ACH and other payment fees increased 6% to $21.4 million for third quarter 2022 compared to third quarter 2021.

SBLOC (securities backed lines of credit), IBLOC (insurance backed lines of credit) and investment advisor financing loans collectively increased 32% year over year and 4% quarter over quarter to $2.54 billion at September 30, 2022.

Small Business Loans, including those held at fair value, grew 3% year over year to $732.4 million at September 30, 2022, and 0.4% quarter over quarter. That growth is exclusive of PPP loan balances which amounted to $6.7 million and $71.3 million, respectively, at September 30, 2022 and September 30, 2021.

Direct lease financing balances increased 17% year over year to $599.8 million at September 30, 2022, and 3% quarter over quarter.

We resumed non-SBA commercial real estate bridge lending in the third quarter of 2021. At September 30, 2022, the balance of such real estate bridge loans was $1.49 billion compared to $1.11 billion at June 30, 2022, reflecting quarter over quarter growth of 34%.

The average interest rate on $6.46 billion of average deposits and interest-bearing liabilities during the third quarter of 2022 was 1.19%. Average deposits of $6.11 billion for third quarter 2022, reflected an increase of 10.5% from the $5.53 billion of average deposits for the quarter ended September 30, 2021.

As of September 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 9.66%, 13.13%, 13.56% and 13.13%, 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 September 30, 2022 was $11.81 per share compared to $11.13 per share at September 30, 2021, an increase of 6%. Increases resulting from retained earnings were partially offset by reductions in the market value of securities, which are recognized through equity.

The Bancorp repurchased 663,934 shares of its common stock at an average cost of $22.59 per share during the quarter ended September 30, 2022.

CEO Damian Kozlowski stated “Revenue growth continues across our platform as lending volumes steadily increase and new payment partners are added to our ecosystem. The expansion of both net interest margin due to rising rates and payment fees across our verticals should support significantly increased profitability in 2023. We are issuing preliminary guidance for 2023 of $3.20 per share excluding the net impact of future share buybacks but including the expected impact of rate increases based on fed funds futures. We also reiterate $2.25 to $2.30 guidance for 2022. The $3.20 guidance for 2023 would represent approximately a 40% increase in earnings per share over 2022 and would result in an ROE percentage in the mid-20s and an ROA above 2%. 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, October 28, 2022 by clicking on the webcast link on The Bancorp's homepage at www.thebancorp.com. Or you may dial 1.866.652.5200 and ask to join The Bancorp, Inc. call. You may listen to the replay of the webcast following the live call on The Bancorp's investor relations website or telephonically until Friday, November 4, 2022 by dialing 1.877.344.7529, access code 5997176.

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				Nine months ended
		September 30,				September 30,
Consolidated condensed income statements	2022		2021		2022		2021
		(Dollars in thousands, except per share and share data)

Net interest income	$	64,659	$	50,893	$	172,081	$	158,719
Provision for credit losses		822		1,613		4,331		1,484
Non-interest income
ACH, card and other payment processing fees		2,230		1,905		6,552		5,605
Prepaid, debit card and related fees		19,175		18,223		57,865		56,878
Net realized and unrealized gains on commercial
loans, at fair value		745		4,306		11,262		8,881
Leasing related income		1,048		1,968		3,566		4,700
Other non-interest income		228		186		698		459
Total non-interest income		23,426		26,588		79,943		76,523
Non-interest expense
Salaries and employee benefits		28,001		25,094		77,848		77,839
Data processing expense		1,292		1,209		3,727		3,481
Legal expense		907		1,251		3,175		5,349
Legal settlement		—		—		1,152		—
Civil money penalty		1,750		—		1,750		—
FDIC insurance		679		266		2,326		5,235
Software		4,001		4,045		12,030		11,435
Other non-interest expense		8,200		7,519		24,019		21,811
Total non-interest expense		44,830		39,384		126,027		125,150
Income from continuing operations before income taxes		42,433		36,484		121,666		108,608
Income tax expense		11,829		8,289		31,694		25,195
Net income from continuing operations		30,604		28,195		89,972		83,413
Discontinued operations
Income from discontinued operations before income taxes		—		87		—		324
Income tax expense		—		21		—		76
Net income from discontinued operations, net of tax		—		66		—		248
Net income	$	30,604	$	28,261	$	89,972	$	83,661

Net income per share from continuing operations - basic	$	0.54	$	0.49	$	1.58	$	1.45
Net income per share from discontinued operations - basic	$	—	$	—	$	—	$	0.01
Net income per share - basic	$	0.54	$	0.49	$	1.58	$	1.46

Net income per share from continuing operations - diluted	$	0.54	$	0.48	$	1.56	$	1.41
Net income per share from discontinued operations - diluted	$	—	$	—	$	—	$	0.01
Net income per share - diluted	$	0.54	$	0.48	$	1.56	$	1.42
Weighted average shares - basic		56,429,425		57,198,778		56,782,524		57,221,174
Weighted average shares - diluted		57,008,224		58,628,306		57,510,986		58,932,146


Condensed consolidated balance sheets	September 30,			June 30,			December 31,			September 30,
	2022 (unaudited)			2022 (unaudited)			2021			2021 (unaudited)
		(Dollars in thousands, except per share and share data)
Assets:
Cash and cash equivalents
Cash and due from banks	$	22,537		$	12,873		$	5,382		$	6,687
Interest earning deposits at Federal Reserve Bank		700,175			329,992			596,402			310,642
Total cash and cash equivalents		722,712			342,865			601,784			317,329

Investment securities, available-for-sale, at fair value		790,594			826,616			953,709			1,054,223
Commercial loans, at fair value		818,040			995,493			1,388,416			1,615,312
Loans, net of deferred fees and costs		5,267,375			4,754,697			3,747,224			3,136,662
Allowance for credit losses		(19,689	)		(19,087	)		(17,806	)		(16,159	)
Loans, net		5,247,686			4,735,610			3,729,418			3,120,503
Federal Home Loan Bank, Atlantic Central Bankers Bank, and Federal Reserve Bank stock		12,629			1,643			1,663			1,663
Premises and equipment, net		18,443			16,693			16,156			16,602
Accrued interest receivable		25,506			19,264			17,871			17,180
Intangible assets, net		2,149			2,248			2,447			2,547
Other real estate owned		18,873			18,873			18,873			19,488
Deferred tax asset, net		27,241			23,344			12,667			12,237
Assets held-for-sale from discontinued operations		—			—			3,268			5,274
Other assets		93,201			137,086			96,967			86,105
Total assets	$	7,777,074		$	7,119,735		$	6,843,239		$	6,268,463

Liabilities:
Deposits
Demand and interest checking	$	5,934,591		$	5,394,562		$	5,561,365		$	4,734,352
Savings and money market		575,381			486,189			415,546			378,160
Time deposits, $100,000 and over		401,331			—			—			—
Total deposits		6,911,303			5,880,751			5,976,911			5,112,512

Securities sold under agreements to repurchase		42			42			42			42
Short-term borrowings		—			385,000			—			300,000
Senior debt		98,958			98,866			98,682			98,590
Subordinated debenture		13,401			13,401			13,401			13,401
Other long-term borrowings		38,928			39,125			39,521			39,715
Other liabilities		50,704			46,014			62,228			66,226
Total liabilities	$	7,113,336		$	6,463,199		$	6,190,785		$	5,630,486

Shareholders' equity:
Common stock - authorized, 75,000,000 shares of $1.00 par value; 56,201,560 and 57,330,846 shares issued and outstanding at September 30, 2022 and 2021, respectively		56,202			56,865			57,371			57,331
Additional paid-in capital		311,569			323,774			349,686			357,528
Retained earnings		329,078			298,474			239,106			212,114
Accumulated other comprehensive (loss) income		(33,111	)		(22,577	)		6,291			11,004
Total shareholders' equity		663,738			656,536			652,454			637,977

Total liabilities and shareholders' equity	$	7,777,074		$	7,119,735		$	6,843,239		$	6,268,463


Average balance sheet and net interest income		Three months ended September 30, 2022							Three months ended September 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*	$	5,904,996		$	75,536	5.12	%	$	4,573,431		$	46,357	4.05	%
Leases-bank qualified**		3,299			55	6.67	%		5,031			87	6.92	%
Investment securities-taxable		824,178			6,792	3.30	%		1,012,007			6,882	2.72	%
Investment securities-nontaxable**		3,559			31	3.48	%		3,558			32	3.60	%
Interest earning deposits at Federal Reserve Bank		267,424			1,525	2.28	%		479,350			167	0.14	%
Net interest earning assets		7,003,456			83,939	4.79	%		6,073,377			53,525	3.53	%

Allowance for credit losses		(19,111	)						(16,277	)
Assets held-for-sale from discontinued operations		—			—	—			90,598			754	3.33	%
Other assets		212,078							214,715
	$	7,196,423						$	6,362,413

Liabilities and Shareholders' Equity:
Deposits:
Demand and interest checking	$	5,545,115		$	12,726	0.92	%	$	5,124,189		$	1,063	0.08	%
Savings and money market		479,260			2,792	2.33	%		404,775			146	0.14	%
Time deposits		87,562			547	2.50	%		—			—	—
Total deposits		6,111,937			16,065	1.05	%		5,528,964			1,209	0.09	%

Short-term borrowings		200,423			1,235	2.46	%		13,097			7	0.21	%
Repurchase agreements		41			—	—			41			—	—
Long-term borrowings		39,035			506	5.19	%		—			—	—
Subordinated debentures		13,401			177	5.28	%		13,401			112	3.34	%
Senior debt		98,910			1,279	5.17	%		100,329			1,279	5.10	%
Total deposits and liabilities		6,463,747			19,262	1.19	%		5,655,832			2,607	0.18	%

Other liabilities		72,539							78,038
Total liabilities		6,536,286							5,733,870

Shareholders' equity		660,137							628,543
	$	7,196,423						$	6,362,413
Net interest income on tax equivalent basis**				$	64,677						$	51,672

Tax equivalent adjustment					18							25

Net interest income				$	64,659						$	51,647
Net interest margin **						3.69	%						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, interest on loans for 2022 and 2021 includes $21,000 and $1.2 million, respectively, of interest and fees on PPP loans.


Average balance sheet and net interest income	Nine months ended September 30, 2022							Nine months ended September 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*	$	5,531,902		$	181,174	4.37	%	$	4,541,262		$	143,546	4.21	%
Leases-bank qualified**		3,657			185	6.75	%		5,925			301	6.77	%
Investment securities-taxable		880,426			17,115	2.59	%		1,094,633			22,891	2.79	%
Investment securities-nontaxable**		3,559			93	3.48	%		3,824			99	3.45	%
Interest earning deposits at Federal Reserve Bank		499,104			2,876	0.77	%		781,606			650	0.11	%
Net interest earning assets		6,918,648			201,443	3.88	%		6,427,250			167,487	3.47	%

Allowance for credit losses		(19,087	)						(16,254	)
Assets held for sale from discontinued operations		—			—	—			99,472			2,388	3.20	%
Other assets		203,143							225,802
	$	7,102,704						$	6,736,270

Liabilities and Shareholders' Equity:
Deposits:
Demand and interest checking	$	5,598,028		$	18,522	0.44	%	$	5,452,604		$	4,007	0.10	%
Savings and money market		522,525			4,192	1.07	%		446,016			487	0.15	%
Time deposits		29,508			547	2.47	%		—			—	—
Total deposits		6,150,061			23,261	0.50	%		5,898,620			4,494	0.10	%

Short-term borrowings		71,589			1,267	2.36	%		8,717			15	0.23	%
Repurchase agreements		41			—	—			41			—	—
Long-term borrowings		39,286			506	1.72	%		—			—	—
Subordinated debentures		13,401			432	4.30	%		13,401			337	3.35	%
Senior debt		98,817			3,838	5.18	%		100,237			3,838	5.11	%
Total deposits and liabilities		6,373,195			29,304	0.61	%		6,021,016			8,684	0.19	%

Other liabilities		71,413							105,683
Total liabilities		6,444,608							6,126,699

Shareholders' equity		658,096							609,571
	$	7,102,704						$	6,736,270
Net interest income on tax equivalent basis**				$	172,139						$	161,191

Tax equivalent adjustment					58							84

Net interest income				$	172,081						$	161,107
Net interest margin **						3.32	%						3.29	%

* 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 significantly increase average loans or assets and which are not expected to recur. Interest on loans for 2022 and 2021 includes $502,000 and $4.9 million, respectively, of interest and fees on PPP loans.


Allowance for credit losses		Nine months ended			Year ended
	September 30,		September 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		861		896		1,138
SBA commercial mortgage		—		23		417
Direct lease financing		312		248		412
SBLOC		—		15		15
Consumer - home equity		—		10		10
Consumer - other		—		—		14
Total		1,173		1,192		2,006

Recoveries:
SBA non-real estate		57		18		51
SBA commercial mortgage		—		9		9
Direct lease financing		108		50		58
Consumer - home equity		—		—		1,099
Total		165		77		1,217
Net charge-offs		1,008		1,115		789
Provision for credit losses, excluding commitment provision		2,891		1,192		2,513

Balance in allowance for credit losses at end of period	$	19,689	$	16,159	$	17,806
Net charge-offs/average loans		0.02%		0.04%		0.03%
Net charge-offs/average assets		0.01%		0.02%		0.01%

(1) Excludes activity from discontinued operations.


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

SBL non-real estate	$	116,080	$	112,854	$	147,722	$	171,845
SBL commercial mortgage		429,865		425,219		361,171		367,272
SBL construction		26,841		27,042		27,199		23,117
Small business loans		572,786		565,115		536,092		562,234
Direct lease financing		599,796		583,086		531,012		514,068
SBLOC / IBLOC *		2,369,106		2,274,256		1,929,581		1,834,523
Advisor financing **		168,559		155,235		115,770		81,143
Real estate bridge loans		1,488,119		1,106,875		621,702		128,699
Other loans ***		64,980		63,514		5,014		4,917
		5,263,346		4,748,081		3,739,171		3,125,584
Unamortized loan fees and costs		4,029		6,616		8,053		11,078
Total loans, including unamortized fees and costs	$	5,267,375	$	4,754,697	$	3,747,224	$	3,136,662



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

SBL, including unamortized fees and costs	$	579,156	$	571,559	$	541,437	$	566,472
SBL, included in loans, at fair value		159,914		168,579		199,585		214,301
Total small business loans ****	$	739,070	$	740,138	$	741,022	$	780,773

* 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 $1.0 million and $322,000 at September 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.

Small business loans as of September 30, 2022



	Loan principal
	(Dollars in millions)
U.S. government guaranteed portion of SBA loans (a)	$	371
Paycheck Protection Program loans (PPP) (a)		7
Commercial mortgage SBA (b)		223
Construction SBA (c)		10
Non-guaranteed portion of U.S. government guaranteed loans (d)		99
Non-SBA small business loans		21
Total principal	$	731
Unamortized fees and costs		8
Total small business loans	$	739

(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 Bancorp Bank N.A. 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 $99 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.

Small business loans by type as of September 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 and motels	$	61	$	—	$	—	$	61	17%
Car washes		17		1		—		18	5%
Full-service restaurants		13		3		2		18	5%
Lessors of nonresidential buildings		16		—		—		16	5%
Child day care services		14		—		1		15	4%
Outpatient mental health and substance abuse centers		15		—		—		15	4%
Funeral homes and funeral services		12		—		—		12	3%
Offices of lawyers		9		—		—		9	3%
Assisted living facilities for the elderly		9		—		—		9	3%
Gasoline stations with convenience stores		8		—		—		8	2%
Fitness and recreational sports centers		6		—		2		8	2%
General warehousing and storage		7		—		—		7	2%
Solar electric power generation		—		—		7		7	2%
Plumbing, heating, and air-conditioning contractors		6		—		1		7	2%
Baked goods stores		—		—		6		6	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%
Lessors of residential buildings and dwellings		5		—		—		5	1%
Other technical and trade schools		—		5		—		5	1%
Other spectator sports		5		—		—		5	1%
Offices of dentists		3		1		—		4	1%
Other warehousing and storage		3		—		—		3	1%
Vocational rehabilitation services		3		—		—		3	1%
Other**		66		1		23		90	27%
Total	$	295	$	13	$	45	$	353	100%

* Of the SBL commercial mortgage and SBL construction loans, $74 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 September 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	$	63	$	—	$	4	$	67	19%
California		50		3		4		57	16%
North Carolina		30		7		2		39	11%
New York		23		—		9		32	9%
Pennsylvania		18		—		2		20	6%
New Jersey		12		—		7		19	5%
Illinois		15		—		2		17	5%
Texas		12		—		3		15	4%
Colorado		11		2		1		14	4%
Connecticut		10		—		1		11	3%
Virginia		9		—		1		10	3%
Georgia		7		—		2		9	3%
Tennessee		8		—		—		8	2%
Ohio		6		—		1		7	2%
Michigan		3		—		—		3	1%
Other States		18		1		6		25	7%
Total	$	295	$	13	$	45	$	353	100%

Top 10 loans as of September 30, 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		NY		6
Hotel		NC		6
Mental health and substance abuse center		CT		5
Assisted living facility		FL		5
Lessors of nonresidential buildings		NC		5
Lessors of residential buildings and dwellings		NJ		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 September 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 amortized cost)*	115	$	1,488		73	%	6.18	%

Non-SBA commercial real estate loans, at fair value:
Multi-family (apartment bridge loans)*	35	$	564		76	%	5.82	%
Hospitality (hotels and lodging)	5		38		65	%	6.56	%
Retail	4		52		71	%	5.56	%
Other	5		14		73	%	5.07	%
	49		668		75	%	5.83	%
Fair value adjustment			(10	)
Total non-SBA commercial real estate loans, at fair value			658
Total commercial real estate loans		$	2,146		74	%	6.10	%

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

State	Balance		Origination date LTV	State	Balance		Origination date LTV
(Dollars in millions)				(Dollars in millions)
Texas	$	815	74%	Texas	$	41	75%
Georgia		220	72%	Texas		39	79%
Florida		187	72%	Texas		39	72%
Ohio		100	71%	Tennessee		37	72%
Tennessee		92	70%	Texas		37	75%
Alabama		73	74%	Texas		37	80%
Michigan		73	74%	Michigan		36	71%
Other States each