The Bancorp, Inc. Reports Fourth Quarter 2020 Financial Results
01/28/2021 - 04:05 PM
The Bancorp, Inc. ("The Bancorp") (NASDAQ: TBBK), a financial holding company, today reported financial results for the fourth quarter of 2020.
Highlights
For the quarter ended December 31, 2020, The Bancorp earned net income of $24.0 million from continuing operations, and $0.41 diluted earnings per share from combined continuing and discontinued operations.
Annualized return on assets and equity for the quarter ended December 31, 2020 amounted to 1.6% and 17% , respectively, compared to 1.5% and 17% (annualized), respectively, for the quarter ended September 30, 2020.
Net interest margin amounted to 3.58% for the quarter ended December 31, 2020, compared to 3.12% for the quarter ended December 31, 2019 and 3.37% for the quarter ended September 30, 2020.
Net interest income increased 47% to $51.7 million for the quarter ended December 31, 2020, compared to $35.2 million for the quarter ended December 31, 2019.
Average loans and leases, including loans at fair value, increased 72% to $4.34 billion for the quarter ended December 31, 2020, compared to $2.53 billion for the quarter ended December 31, 2019.
Prepaid, debit card and related fees increased 5% to $17.8 million for the quarter ended December 31, 2020, compared to $17.0 million for the quarter ended December 31, 2019. Gross dollar volume (GDV), representing total spend on cards, increased 18% between those periods.
SBLOC (securities-backed lines of credit), IBLOC (insurance backed lines of credit) and advisor financing loans increased 56% year over year and 10% quarter over quarter to $1.6 billion at December 31, 2020.
Small Business Loans, including those held at fair value, increased 14% year over year to $654 million at December 31, 2020, exclusive of $166 million of Paycheck Protection Program balances.
The average interest rate on $5.40 billion of average deposits and interest-bearing liabilities in the fourth quarter of 2020 was 0.24% . Average prepaid and debit card account deposits of $3.59 billion for fourth quarter 2020, reflected an increase of 33% over the $2.70 billion for the quarter ended December 31, 2019.
Consolidated leverage ratio was 9.20% at December 31, 2020. The Bancorp and its subsidiary, The Bancorp Bank (the “Bank”), remain well capitalized.
Book value per common share at December 31, 2020 was $10.10 per share compared to $8.52 at December 31, 2019, an increase of 19% , primarily as a result of retained earnings per share.
Damian Kozlowski, The Bancorp’s Chief Executive Officer, said, “We have completed our strategic business plan, strategic agenda and budget for 2021. The main focus continues to be product and platform expansion with a rigorous focus on building the best payments ecosystem in the financial services industry. Our plan includes a comprehensive and integrated analysis of the market and competitors, and the needed investments to build towards the future and create scalable core competencies that our partners can use to innovate and grow. We also continue to invest heavily in anti-money laundering and compliance to have best-in-class capabilities to meet regulatory guidance and expectations. Our guidance target for 2021 is $1.70 a share or approximately $100 million in net income, which does not include the impact of planned share repurchases.”
The Bancorp reported net income of $24.2 million , or $0.41 per diluted share, for the quarter ended December 31, 2020, compared to net income of $1.9 million , or $0.03 per diluted share, for the quarter ended December 31, 2019. 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 9.20% , 14.43% , 14.84% and 14.43% , respectively, compared to well-capitalized minimums of 5% , 8% , 10% and 6.5% , respectively.
Conference Call Webcast
You may access the LIVE webcast of The Bancorp's Quarterly Earnings Conference Call at 8:00 AM ET Friday, January 29, 2021 by clicking on the webcast link on The Bancorp's homepage at www.thebancorp.com . Or, you may dial 844.775.2543, access code 8952947. 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 5, 2021 by dialing 855.859.2056, access code 8952947.
The Bancorp, Inc. (NASDAQ: TBBK) is dedicated to serving the unique needs of non-bank financial service companies, ranging from entrepreneurial start-ups to those on the Fortune 500. The company’s only subsidiary, The Bancorp Bank (Member FDIC, Equal Housing Lender), has been repeatedly recognized in the payments industry as the Top Issuer of Prepaid Cards (US), a top merchant sponsor bank and a top ACH originator. Specialized lending distinctions include National Preferred SBA Lender, a leading provider of securities-backed lines of credit, and one of the few bank-owned commercial vehicle leasing groups in the nation. For more information please visit www.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 “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. These risks and uncertainties include those relating to the on-going COVID-19 pandemic, the impact it will have on our business and the industry as a whole, and the resulting governmental and societal responses. 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 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 earnings 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
2020
2019
2020
2019
(dollars in thousands except per share data)
Net interest income
$
51,713
35,179
$
194,866
$
141,288
Provision for credit losses
554
1,450
6,352
4,400
Non-interest income
Service fees on deposit accounts
7
6
30
75
ACH, card and other payment processing fees
1,788
1,962
7,101
9,376
Prepaid, debit card and related fees
17,818
17,004
74,465
65,141
Net realized and unrealized gains (losses) on commercial
loans originated for sale
1,538
(247
)
(3,874
)
24,072
Change in value of investment in unconsolidated entity
—
—
(45
)
—
Leasing related income
499
932
3,294
3,243
Other non-interest income
1,650
841
3,646
2,220
Total non-interest income
23,300
20,498
84,617
104,127
Non-interest expense
Salaries and employee benefits
27,087
24,067
101,737
94,259
Data processing expense
1,174
1,210
4,712
4,894
Legal expense
1,005
995
5,141
5,319
FDIC insurance
2,121
2,141
9,808
7,025
Software
3,570
3,551
14,028
12,731
SEC settlement
—
7,500
—
8,900
Lease termination expense
—
—
—
908
Other non-interest expense
6,826
8,258
29,421
34,485
Total non-interest expense
41,783
47,722
164,847
168,521
Income from continuing operations before income taxes
32,676
6,505
108,284
72,494
Income tax expense
8,655
3,641
27,688
21,226
Net income from continuing operations
24,021
2,864
80,596
51,268
Discontinued operations
Income (loss) from discontinued operations before income taxes
(1,096
)
(1,365
)
(3,816
)
510
Income tax expense (benefit)
(1,246
)
(355
)
(3,304
)
219
Net income (loss) from discontinued operations, net of tax
150
(1,010
)
(512
)
291
Net income
$
24,171
$
1,854
$
80,084
$
51,559
Net income per share from continuing operations - basic
$
0.42
$
0.05
$
1.40
$
0.90
Net income (loss) per share from discontinued operations - basic
$
—
$
(0.02
)
$
(0.01
)
$
0.01
Net income per share - basic
$
0.42
$
0.03
$
1.39
$
0.91
Net income per share from continuing operations - diluted
$
0.41
$
0.05
$
1.38
$
0.89
Net income (loss) per share from discontinued operations - diluted
$
—
$
(0.02
)
$
(0.01
)
$
0.01
Net income per share - diluted
$
0.41
$
0.03
$
1.37
$
0.90
Weighted average shares - basic
57,597,124
56,924,543
57,474,612
56,765,635
Weighted average shares - diluted
59,146,222
57,847,509
58,411,222
57,338,985
Balance sheet
December 31,
September 30,
June 30,
December 31,
2020
2020
2020
2019
(dollars in thousands)
Assets:
Cash and cash equivalents
Cash and due from banks
$
5,984
$
6,220
$
5,094
$
19,928
Interest earning deposits at Federal Reserve Bank
339,531
294,758
475,627
924,544
Total cash and cash equivalents
345,515
300,978
480,721
944,472
Investment securities, available-for-sale, at fair value
1,206,164
1,264,903
1,324,447
1,320,692
Investment securities, held-to-maturity, at cost
—
—
—
84,387
Commercial loans, at fair value (held-for-sale at June 30, 2020 and December 31, 2019
1,810,812
1,849,947
1,807,630
1,180,546
Loans, net of deferred fees and costs
2,652,323
2,488,760
2,322,737
1,824,245
Allowance for credit losses
(16,082
)
(15,727
)
(14,625
)
(10,238
)
Loans, net
2,636,241
2,473,033
2,308,112
1,814,007
Federal Home Loan Bank & Atlantic Community Bancshares stock
1,368
1,368
1,368
5,342
Premises and equipment, net
17,608
15,849
16,701
17,538
Accrued interest receivable
20,458
18,852
18,897
13,619
Intangible assets, net
2,447
2,563
2,710
2,315
Deferred tax asset, net
10,611
7,952
7,921
12,538
Investment in unconsolidated entity
31,294
31,783
34,064
39,154
Assets held for sale from discontinued operations
113,650
122,253
128,463
140,657
Other assets
81,265
79,821
83,003
81,696
Total assets
$
6,277,433
$
6,169,302
$
6,214,037
$
5,656,963
Liabilities:
Deposits
Demand and interest checking
$
5,205,010
$
4,882,834
$
5,089,741
$
4,402,740
Savings and money market
257,050
505,928
455,458
174,290
Time deposits
—
—
—
475,000
Total deposits
5,462,060
5,388,762
5,545,199
5,052,030
Securities sold under agreements to repurchase
42
42
42
82
Senior debt
98,314
98,222
—
—
Subordinated debenture
13,401
13,401
13,401
13,401
Other long-term borrowings
40,277
40,462
40,639
40,991
Other liabilities
82,175
69,954
81,677
65,962
Total liabilities
$
5,696,269
$
5,610,843
$
5,680,958
$
5,172,466
Shareholders' equity:
Common stock - authorized, 75,000,000 shares of $1.00 par value; 57,650,629 and 56,940,521 shares issued and outstanding at December 31, 2020 and 2019, respectively
57,651
57,591
57,555
56,941
Treasury stock (100,000 shares)
(866
)
(866
)
(866
)
(866
)
Additional paid-in capital
378,218
376,751
374,578
371,633
Retained earnings
128,453
104,282
81,028
50,742
Accumulated other comprehensive income
17,708
20,701
20,784
6,047
Total shareholders' equity
581,164
558,459
533,079
484,497
Total liabilities and shareholders' equity
$
6,277,433
$
6,169,302
$
6,214,037
$
5,656,963
Average balance sheet and net interest income
Three months ended December 31, 2020
Three months ended December 31, 2019
(dollars in thousands)
Average
Average
Average
Average
Assets:
Balance
Interest
Rate
Balance
Interest
Rate
Interest earning assets:
Loans net of deferred fees and costs
$
4,329,794
$
45,524
4.21
%
$
2,514,401
$
31,177
4.96
%
Leases - bank qualified*
7,346
138
7.51
%
12,633
229
7.25
%
Investment securities-taxable
1,239,062
9,229
2.98
%
1,441,895
9,636
2.67
%
Investment securities-nontaxable*
4,041
35
3.46
%
5,825
47
3.23
%
Interest earning deposits at Federal Reserve Bank
193,560
48
0.10
%
569,804
2,505
1.76
%
Net interest earning assets
5,773,803
54,974
3.81
%
4,544,558
43,594
3.84
%
Allowance for credit losses
(15,804
)
(10,162
)
Assets held for sale from discontinued operations
117,482
965
3.29
%
149,301
1,416
3.79
%
Other assets
220,595
254,809
$
6,096,076
$
4,938,506
Liabilities and Shareholders' Equity:
Deposits:
Demand and interest checking
$
4,978,562
$
1,679
0.13
%
$
3,749,860
$
5,405
0.58
%
Savings and money market
270,820
134
0.20
%
66,151
51
0.31
%
Time
—
—
—
%
406,730
2,217
2.18
%
Total deposits
5,249,382
1,813
0.14
%
4,222,741
7,673
0.73
%
Short-term borrowings
32,989
17
0.21
%
102,832
507
1.97
%
Securities sold under agreements to repurchase
41
—
—
%
84
—
—
%
Subordinated debentures
13,401
116
3.46
%
13,401
177
5.28
%
Senior debt
100,031
1,279
5.12
%
—
—
—
%
Total deposits and liabilities
5,395,844
3,225
0.24
%
4,339,058
8,357
0.77
%
Other liabilities
130,420
115,112
Total liabilities
5,526,264
4,454,170
Shareholders' equity
569,812
484,336
$
6,096,076
$
4,938,506
Net interest income on tax equivalent basis*
$
52,714
$
36,653
Tax equivalent adjustment
36
58
Net interest income
$
52,678
$
36,595
Net interest margin *
3.58
%
3.12
%
* Full taxable equivalent basis, using a statutory Federal tax rate of 21% for 2020 and 2019.
Average balance sheet and net interest income
Year ended December 31, 2020
Year ended December 31, 2019
(dollars in thousands)
Average
Average
Average
Average
Assets:
Balance
Interest
Rate
Balance
Interest
Rate
Interest earning assets:
Loans net of deferred fees and costs
$
3,931,758
$
170,449
4.34
%
$
2,402,686
$
126,176
5.25
%
Leases - bank qualified*
8,885
647
7.28
%
14,968
1,177
7.86
%
Investment securities-taxable
1,317,031
37,822
2.87
%
1,406,247
42,286
3.01
%
Investment securities-nontaxable*
4,412
145
3.29
%
6,533
215
3.29
%
Interest earning deposits at Federal Reserve Bank
381,290
1,885
0.49
%
472,279
10,007
2.12
%
Net interest earning assets
5,643,376
210,948
3.74
%
4,302,713
179,861
4.18
%
Allowance for credit losses
(13,878
)
(9,696
)
Assets held for sale from discontinued operations
127,519
4,222
3.31
%
169,986
6,710
3.95
%
Other assets
226,210
254,674
$
5,983,227
$
4,717,677
Liabilities and Shareholders' Equity:
Deposits:
Demand and interest checking
$
4,864,236
$
11,356
0.23
%
$
3,817,176
$
30,664
0.80
%
Savings and money market
291,204
442
0.15
%
37,671
181
0.48
%
Time
79,439
1,483
1.87
%
170,438
3,555
2.09
%
Total deposits
5,234,879
13,281
0.25
%
4,025,285
34,400
0.85
%
Short-term borrowings
27,322
198
0.72
%
129,031
3,131
2.43
%
Securities sold under agreements to repurchase
49
–
—
%
90
–
—
%
Subordinated debentures
13,401
524
3.91
%
13,401
750
5.60
%
Senior debt
38,532
1,913
4.96
%
–
–
—
%
Total deposits and liabilities
TBBK Rankings
#738 Ranked by Stock Gains
TBBK Stock Data
Industry
Commercial Banking
Sector
Finance and Insurance
Tags
Finance, Regional Banks, Finance and Insurance, Commercial Banking
About TBBK
the bancorp, inc. (nasdaq: tbbk) is dedicated to serving the unique needs of non-bank financial service companies, ranging from entrepreneurial start-ups to those on the fortune 500. the company’s subsidiary, the bancorp bank (member fdic, equal housing lender), has been repeatedly recognized in the payments industry as the top issuer of prepaid cards (us), a top merchant sponsor bank and a top ach originator. specialized lending distinctions include national preferred sba lender, a leading provider of securities-backed lines of credit, and one of the few bank-owned commercial vehicle leasing groups in the nation. for more information please visit www.thebancorp.com
