EX-99.1 2 ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

 

The Bancorp, Inc. Reports First Quarter Financial Results 

 

Wilmington, DE – April 24, 2025 – The Bancorp, Inc. (“The Bancorp” or the “Company” or “we” or “our”) (NASDAQ: TBBK), a financial holding company, today reported its financial results for the first quarter of 2025.

 

Highlights

 

·The Bancorp reported net income of $57.2 million, or $1.19 per diluted share (“EPS”), for the quarter ended March 31, 2025, compared to net income of $56.4 million, or $1.06 per diluted share, for the quarter ended March 31, 2024, or an EPS increase of 12%. While net income increased 1% between these periods, outstanding shares were reduced as a result of increased repurchases that occurred during 2024.

 

·Return on assets and return on equity for the quarter ended March 31, 2025, amounted to 2.5% and 29%, respectively, compared to 3.0% and 28%, respectively, for the quarter ended March 31, 2024 (all percentages “annualized”).

 

·Net interest income decreased 3% to $91.7 million for the quarter ended March 31, 2025, compared to $94.4 million for the quarter ended March 31, 2024. Certain loan fees on consumer fintech loans are recorded as non-interest income. Such non-interest income amounted to $3.6 million for the quarter ended March 31, 2025 and $0 for the quarter ended March 31, 2024.

 

·Net interest margin amounted to 4.07% for the quarter ended March 31, 2025, compared to 5.15% for the quarter ended March 31, 2024, and 4.55% for the quarter ended December 31, 2024.

 

·Loans, net of deferred fees and costs were $6.38 billion at March 31, 2025, compared to $5.46 billion at March 31, 2024 and $6.11 billion at December 31, 2024. Those changes reflected an increase of 4% quarter over linked quarter and an increase of 17% year over year.

 

·Gross dollar volume (“GDV”), representing the total amounts spent on prepaid and debit cards, increased $6.71 billion, or 18%, to $44.65 billion for the quarter ended March 31, 2025, compared to the quarter ended March 31, 2024. The increase reflected continued organic growth with existing partners and the impact of clients added within the past year. Total prepaid, debit card, ACH, and other payment fees increased 13% to $30.8 million for the first quarter of 2025 compared to the first quarter of 2024. Consumer credit fintech fees amounted to $3.6 million for the first quarter 2025.

 

·Small business loans (“SBLs”), including those held at fair value, amounted to $1.01 billion at March 31, 2025, or 12% higher year over year, and 3% higher quarter over linked quarter, excluding the impact of loans with related secured borrowings.

 

·Direct lease financing balances increased 1% year over year to $710.0 million at March 31, 2025, and increased 1% from December 31, 2024.

 

·Real estate bridge loans of $2.21 billion increased 5% compared to a $2.11 billion balance at December 31, 2024, and increased 5% compared to the March 31, 2024 balance of $2.10 billion. These real estate bridge loans consist entirely of rehabilitation loans for apartment buildings.

 

·Security backed lines of credit (“SBLOC”), insurance backed lines of credit (“IBLOC”), and investment advisor financing loans collectively increased 3% year over year and increased less than 1% quarter over linked quarter to $1.84 billion at March 31, 2025.

 

·The average interest rate on $8.44 billion of average deposits and interest-bearing liabilities during the first quarter of 2025 was 2.28%. Average deposits of $8.31 billion for the first quarter of 2025 increased $1.81 billion, or 28% over first quarter 2024.

 

·As of March 31, 2025, the Company’s Tier 1 capital to average assets (leverage), Tier 1 capital to risk-weighted assets, total capital to risk-weighted assets and common equity Tier 1 to risk-weighted assets ratios were 8.93%, 13.94%, 14.86% and 13.94%, respectively, compared to well-capitalized minimums of 5%, 8%, 10% and 6.5%, respectively. The Bancorp Bank, National Association also remains well capitalized under banking regulations.

 

·Book value per common share at March 31, 2025, was $17.66 compared to $15.63 per common share at March 31, 2024, an increase of 13%.

 

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·The Bancorp repurchased 684,445 shares of its common stock at an average cost of $54.79 per share during the quarter ended March 31, 2025. As a result of share repurchases, outstanding shares at March 31, 2025 amounted to 47.0 million, compared to 52.3 million shares at March 31, 2024, or a reduction of 10%.

 

·The Bancorp emphasizes safety and soundness, and its balance sheet has a risk profile enhanced by the special nature of the collateral supporting its loan niches, related underwriting, and the characteristics of its funding sources, including those highlighted in the bullets below. Those loan niches and funding sources have contributed to increased earnings levels, even during periods in which markets have experienced various economic stresses.

 

·The vast majority of The Bancorp’s funding is comprised of FDIC-insured and/or small balance accounts, which adjust to only a portion of changes in rates. The Company also has lines of credit with U.S. government sponsored agencies totaling approximately $3.09 billion as of March 31, 2025, as well as access to other forms of liquidity.

 

·In its real estate bridge loans (“REBL”) portfolio, the Company has minimal exposure to non-multifamily commercial real estate such as office buildings, and instead has a portfolio largely comprised of rehabilitation bridge loans for apartment buildings. These loans generally have three-year terms with two one-year extensions to allow for the rehabilitation work to be completed and rentals stabilized for an extended period, before being refinanced at lower rates through U.S. Government Sponsored Entities or other lenders. The REBL portfolio consists primarily of workforce housing, which we consider to be working class apartments at more affordable rental rates. Related collateral values should accordingly be more stable than higher rent properties, even in stressed economies. While the macro-economic environment has challenged the multifamily bridge space, the stability of the Company’s REBL portfolio is evidenced by the estimated values of the underlying collateral. The Company’s $2.2 billion REBL portfolio at March 31, 2025, has a weighted average origination date “as is” loan-to-value ratio of 70%, based on third-party appraisals. Further, the weighted average origination date “as stabilized” LTV, which measures the estimated value of the apartments after the rehabilitation is complete may provide even greater protection.

 

·As part of the underwriting process, The Bancorp reviews prospective borrowers’ previous rehabilitation experience in addition to overall financial wherewithal. These transactions also include significant borrower equity contributions with required performance metrics. Underwriting generally includes, but is not limited to, assessment of local market information relating to vacancy and rental rates, review of post rehabilitation rental rate assumptions against geo-specific affordability indices, negative news searches, lien searches, visitations by bank personnel and/or designated engineers, and other information sources.

 

·Rehabilitation progress is monitored through ongoing draw requests and financial reporting covenants. This generally allows for early identification of potential issues, and expedited action to address on a timely basis.

 

·Operations and ongoing loan evaluation are overseen by multiple levels of management, in addition to the REBL team’s experienced professional staff and third-party consultants utilized during the underwriting and asset management process. This oversight includes a separate loan committee specific to REBL, which is comprised of seasoned and experienced lending professionals who do not directly report to anyone on the REBL team. There is also a separate loan review department, a surveillance committee and additional staff which evaluate potential losses under the current expected credit losses methodology (“CECL”), all of which similarly do not report to anyone on the REBL team.

 

·SBLOC and IBLOC portfolios are respectively secured by marketable securities and the cash value of life insurance. The majority of SBA 7(a) loans are government guaranteed, while SBA 504 loans are made with 50%-60% LTVs.

 

·Additional details regarding our loan portfolios are included in the related tables in this press release, as is the summarization of the earnings contributions of our payments businesses, which further enhances The Bancorp’s risk profile. The Company’s risk profile inherent in its loan portfolios, funding and earnings levels, may present opportunities to further increase stockholder value, while still prudently maintaining capital levels.

 

·In the second quarter of 2024, the Company purchased approximately $900 million of fixed rate government sponsored entity backed commercial and residential mortgage securities of varying maturities, with an approximate 5.11% weighted average yield, and estimated weighted average lives of eight years, to reduce its exposure to lower levels of net interest income. Such purchases would also reduce the additional net interest income which will result if the Federal Reserve increases rates. While there are many variables and limitations to estimating exposure to changes in rates, such purchases and continuing fixed rate loan originations are projected to reduce such exposure to modest levels. In prior years, The Bancorp deferred adding fixed rate securities when yields were particularly low, which has afforded the flexibility to benefit from, and secure, more advantageous securities and loan rates.

 

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“The Bancorp earned $1.19 a share in the first quarter of 2025 or a 12% increase in EPS over the first quarter of 2024,” said Damian Kozlowski, CEO of The Bancorp.  “While we had some pressure on revenue from rates, it was mitigated by our balance sheet strategy, and the growth of deposits.  Fintech Solutions continues to show significant momentum in both GDV (up 18% year-over-year) and fee growth (up 26% year-over-year).  We are confirming guidance of $5.25 a share for 2025.  EPS guidance does not include the impact of $150 million of authorized stock buybacks in 2025.”

 

Conference Call Webcast

 

You may access the LIVE webcast of The Bancorp’s Quarterly Earnings Conference Call at 8:00 AM ET Friday, April 25, 2025, by clicking on the webcast link on The Bancorp’s homepage at www.thebancorp.com or you may dial 1.800.549.8228, conference ID 80395. You may listen to the replay of the webcast following the live call on The Bancorp’s investor relations website (archived for one year) or telephonically until Friday, May 2, 2025, by dialing 1.888.660.6264, playback code 80395#.

 

About The Bancorp

 

The Bancorp, Inc. (NASDAQ: TBBK), headquartered in Wilmington, Delaware, through its subsidiary, The Bancorp Bank, National Association, provides a variety of services including providing 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 that 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. Forward-looking statements include, but are not limited to, statements regarding our anticipated 2025 results. Such forward-looking statements relate to our current assumptions, projections and expectations about our business and future events, including current expectations about important economic and political factors, among other factors, 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. Factors that could cause results to differ from those expressed in the forward-looking statements also include, but are not limited to the risks and uncertainties referenced or described in 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 the Company’s Annual Report on Form 10-K, as amended, for the fiscal year ended December 31, 2024 and other documents that the Company files from time to time with the Securities and Exchange Commission. The forward-looking statements speak only as of the date of this press release. The Bancorp does not undertake any duty 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. Contact

Andres Viroslav

Director, Investor Relations

215-861-7990

[email protected]

 

Source: The Bancorp, Inc. 

 

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The Bancorp, Inc.

Financial highlights

(unaudited)

  

  Three months ended   Year ended
  March 31,   December 31,
Consolidated condensed income statements 2025    2024    2024 
  (Dollars in thousands, except per share and share data)
                 
Net interest income $  91,743    $  94,418    $  376,241 
Provision for credit losses on non-consumer fintech loans    874       2,363       9,319 
Provision for credit losses on consumer fintech loans    45,868       —      30,651 
Provision (reversal) for unfunded commitments    111       (194)      (596)
Provision (reversal) for credit loss on security    —      —      (1,000)
Non-interest income                
Fintech fees                
ACH, card and other payment processing fees    5,132       2,964       14,596 
Prepaid, debit card and related fees    25,714       24,286       97,413 
Consumer credit fintech fees    3,600       —      4,789 
Total fintech fees    34,446       27,250       116,798 
Net realized and unrealized gains (losses) on commercial loans, at fair value   361      1,096      2,732 
Leasing related income    1,972       388       3,921 
Consumer fintech loan credit enhancement    45,868       —      30,651 
Other non-interest income    995       648       3,412 
Total non-interest income    83,642       29,382       157,514 
Non-interest expense                
Salaries and employee benefits    33,669       30,280       131,597 
Data processing expense    1,205       1,421       5,666 
Legal expense    1,957       821       3,081 
FDIC insurance    1,053       845       3,579 
Software    5,013       4,489       17,913 
Other non-interest expense    10,397       8,856       41,389 
Total non-interest expense    53,294       46,712       203,225 
Income before income taxes    75,238       74,919       292,156 
Income tax expense    18,065       18,490       74,616 
Net income    57,173       56,429       217,540 
                 
Net income per share - basic $  1.21    $  1.07    $  4.35 
                 
Net income per share - diluted $  1.19    $  1.06    $  4.29 
Weighted average shares - basic    47,214,050       52,747,140       50,063,620 
Weighted average shares - diluted    47,959,292       53,326,588       50,713,140 

 

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Condensed consolidated balance sheets March 31,   December 31,   September 30,   March 31,
  2025 (unaudited)   2024   2024 (unaudited)   2024 (unaudited)
  (Dollars in thousands, except share data)
Assets:                      
Cash and cash equivalents                      
Cash and due from banks $  9,684    $  6,064    $  8,660    $  9,105 
Interest earning deposits at Federal Reserve Bank    1,011,585       564,059       47,105       1,241,363 
Total cash and cash equivalents    1,021,269       570,123       55,765       1,250,468 
                       
Investment securities, available-for-sale, at fair value, net of $10.0 million allowance for credit loss effective December 31, 2023, March 31, 2024, September 30, 2024, and $0 at December 31, 2024    1,488,184       1,502,860       1,588,289       718,247 
Commercial loans, at fair value    211,580       223,115       252,004       282,998 
Loans, net of deferred fees and costs    6,380,150       6,113,628       5,906,616       5,459,344 
Allowance for credit losses    (52,497)      (44,853)      (31,004)      (28,741)
Loans, net    6,327,653       6,068,775       5,875,612       5,430,603 
Federal Home Loan Bank, Atlantic Central Bankers Bank, and Federal Reserve Bank stock    16,250       15,642       21,717       15,642 
Premises and equipment, net    27,130       27,566       28,091       27,482 
Accrued interest receivable    42,464       41,713       42,915       37,861 
Intangible assets, net    1,154       1,254       1,353       1,552 
Other real estate owned    67,129       62,025       61,739       19,559 
Deferred tax asset, net    13,585       18,874       9,604       21,764 
Credit enhancement asset    20,199       12,909       —      —
Other assets    149,130       182,687       157,501       109,680 
Total assets $  9,385,727    $  8,727,543    $  8,094,590    $  7,915,856 
                       
Liabilities:                      
Deposits                      
Demand and interest checking $  8,283,262    $  7,434,212    $  6,844,128    $  6,828,159 
Savings and money market    81,320       311,834       81,624       62,597 
Total deposits    8,364,582       7,746,046       6,925,752       6,890,756 
                       
Short-term borrowings    —      —      135,000       —
Senior debt    96,303       96,214       96,125       95,948 
Subordinated debenture    13,401       13,401       13,401       13,401 
Other long-term borrowings    13,988       14,081       38,157       38,407 
Other liabilities    67,766       68,018       70,829       60,579 
Total liabilities $  8,556,040    $  7,937,760    $  7,279,264    $  7,099,091 
                       
Shareholders' equity:                      
Common stock - authorized, 75,000,000 shares of $1.00 par value; 48,067,178 and 46,980,002 shares issued and outstanding, respectively, at March 31, 2025 and 52,253,037 shares issued and outstanding  at March 31, 2024    48,067       47,713       48,231       52,253 
Additional paid-in capital    7,470       3,233       26,573       166,335 
Retained earnings    836,328       779,155       723,247       618,044 
Accumulated other comprehensive (loss) income    (1,840)      (17,637)      17,275       (19,867)
Treasury stock at cost, 1,087,176 shares at March 31, 2025 and 0 shares at March 31, 2024, respectively    (60,338)      (22,681)      —      —
Total shareholders' equity    829,687       789,783       815,326       816,765 
                       
Total liabilities and shareholders' equity $  9,385,727    $  8,727,543    $  8,094,590    $  7,915,856 

 

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Average balance sheet and net interest income   Three months ended March 31, 2025   Three months ended March 31, 2024
    (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(1)   $  6,380,615    $  108,802       6.82%   $  5,717,262    $  114,160     7.99%
Leases-bank qualified(2)      5,853       139       9.50%      4,746       116     9.78%
Investment securities-taxable      1,489,329       18,127       4.87%      733,599       9,634     5.25%
Investment securities-nontaxable(2)      6,256       105       6.71%      2,895       50     6.91%
Interest earning deposits at Federal Reserve Bank      1,136,402       12,680       4.46%      874,073       11,884     5.44%
Net interest earning assets      9,018,455       139,853       6.20%      7,332,575       135,844     7.41%
                                   
Allowance for credit losses      (44,915)                  (27,158)          
Other assets      345,791                   331,756           
    $  9,319,331                $  7,637,173           
                                   
Liabilities and Shareholders' Equity:                                  
Deposits:                                  
Demand and interest checking   $  8,174,676    $  45,045       2.20%   $  6,453,866    $  38,714     2.40%
Savings and money market      136,688       1,330       3.89%      50,970       447     3.51%
Total deposits      8,311,364       46,375       2.23%      6,504,836       39,161     2.41%
                                   
Short-term borrowings      —      —      —      1,373       19     5.54%
Repurchase agreements      —      —      —      13       —    —
Long-term borrowings      14,050       195       5.55%      38,517       686     7.12%
Subordinated debentures      13,401       255       7.61%      13,401       292     8.72%
Senior debt      96,244       1,234       5.13%      95,894       1,233     5.14%
Total deposits and liabilities      8,435,059       48,059       2.28%      6,654,034       41,391     2.49%
                                   
Other liabilities      74,537                   171,116           
Total liabilities      8,509,596                   6,825,150           
                                   
Shareholders' equity      809,735                   812,023           
    $  9,319,331                $  7,637,173           
Net interest income on tax equivalent basis(2)         $  91,794                $  94,453     
                                   
Tax equivalent adjustment            51                   35     
                                   
Net interest income         $  91,743                $  94,418     
Net interest margin(2)                  4.07%                5.15%

 

(1) Includes commercial loans, at fair value. All periods include non-accrual loans.
(2) Full taxable equivalent basis, using 21% respective statutory federal tax rates in 2025 and 2024.

 

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Allowance for credit losses Three months ended   Year ended
  March 31,   March 31,   December 31,
  2025 (unaudited)   2024 (unaudited)   2024 
  (Dollars in thousands)
                 
Balance in the allowance for credit losses at beginning of period $  44,853    $  27,378    $  27,378 
                 
Loans charged-off:                
SBA non-real estate    62       111       708 
Direct lease financing    736       919       4,575 
Consumer - home equity    —      —      10 
Consumer fintech    44,224       —      19,619 
Other loans    —      6       8 
Total    45,022       1,036       24,920 
                 
Recoveries:                
SBA non-real estate    18       4       229 
Direct lease financing    260       32       318 
Consumer fintech    5,646       —      1,877 
Consumer - home equity    —      —      1 
Total    5,924       36       2,425 
Net charge-offs    39,098       1,000       22,495 
Provision for credit losses on non-consumer fintech loans    874       2,363       9,319 
Provision for credit losses on consumer fintech loans    45,868       —      30,651 
                 
Balance in allowance for credit losses at end of period $  52,497    $  28,741    $  44,853 
Net charge-offs/average loans    0.63%      0.02%      0.40%
Net charge-offs/average assets    0.42%      0.01%      0.28%

 

 

 

 

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Loan portfolio March 31,   December 31,   September 30,   March 31,
  2025 (unaudited)   2024   2024 (unaudited)   2024 (unaudited)
  (Dollars in thousands)
                       
SBL non-real estate $  191,750    $  190,322    $  179,915    $  140,956 
SBL commercial mortgage    681,454       662,091       665,608       637,926 
SBL construction    42,026       34,685       30,158       27,290 
Small business loans    915,230       887,098       875,681       806,172 
Direct lease financing    709,978       700,553       711,836       702,512 
SBLOC / IBLOC(1)    1,577,170       1,564,018       1,543,215       1,550,313 
Advisor financing(2)    265,950       273,896       248,422       232,206 
Real estate bridge loans    2,212,054       2,109,041       2,189,761       2,101,896 
Consumer fintech(3)    574,048       454,357       280,092       —
Other loans(4)    112,322       111,328       46,586       56,163 
     6,366,752       6,100,291       5,895,593       5,449,262 
Unamortized loan fees and costs    13,398       13,337       11,023       10,082 
Total loans, including unamortized fees and costs $  6,380,150    $  6,113,628    $  5,906,616    $  5,459,344 

 

 

Small business portfolio   March 31,     December 31,     September 30,     March 31,
    2025 (unaudited)     2024     2024 (unaudited)     2024 (unaudited)
    (Dollars in thousands)
                       
SBL, including unamortized fees and costs $  925,877   $  897,077   $  885,263   $  816,151
SBL, included in loans, at fair value    83,448      89,902      93,888      109,131
Total small business loans(5) $  1,009,325   $  986,979   $  979,151   $  925,282

 

(1) SBLOC loans are collateralized by marketable securities, while IBLOC are collateralized by the cash surrender value of insurance policies. At March 31, 2025 and December 31, 2024, IBLOC loans amounted to $535.2 million and $548.1 million, respectively.

(2) In 2020 The Bancorp began originating loans to investment advisors for purposes of debt refinancing, acquisition of another firm or internal succession. Maximum loan amounts are subject to loan-to-value ratios of 70% of the 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.

(3) Consumer fintech loans consist of $305.3 million of secured credit card loans, with the balance comprised of other short-term extensions of credit.

(4) Includes demand deposit overdrafts reclassified as loan balances totaling $3.3 million and $1.2 million at March 31, 2025 and December 31, 2024, respectively. Estimated overdraft charge-offs and recoveries are reflected in the allowance for credit losses and are immaterial.

(5) The SBLs held at fair value are comprised of the government guaranteed portion of 7(a) Program loans at the dates indicated.

 

 

Small business loans as of March 31, 2025

    Loan principal
    (Dollars in millions)
U.S. government guaranteed portion of SBA loans(1)   $ 391
Commercial mortgage SBA(2)     369
Construction SBA(3)     18
Non-guaranteed portion of U.S. government guaranteed 7(a) Program loans(4)     113
Non-SBA SBLs     102
Other(5)     4
Total principal   $ 997
Unamortized fees and costs     12
Total SBLs   $ 1,009

 

(1) Includes the portion of SBA 7(a) Program loans which have been guaranteed by the U.S. government, and therefore are assumed to have no credit risk.

(2) Substantially all these loans are made under the 504 Program, which dictates origination date LTV percentages, generally 50%-60%, to which The Bancorp adheres.

(3) Includes $15 million in 504 Program first mortgages with an origination date LTV of 50%-60%, and $3 million in SBA interim loans with an approved SBA post-construction full takeout/payoff.

(4) Includes the unguaranteed portion of 7(a) Program loans which are 70% or more guaranteed by the U.S. government. SBA 7(a) Program 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 7(a) Program loans and 504 Program loans require the personal guaranty of all 20% or greater owners.

(5) Comprised of $4 million of loans sold that do not qualify for true sale accounting.

 

  8 

 

 

 

Small business loans by type as of March 31, 2025

 

(Excludes government guaranteed portion of SBA 7(a) Program)

 

    SBL commercial mortgage(1)   SBL construction(1)   SBL non-real estate   Total     % Total
      (Dollars in millions)
Hotels (except casino hotels) and motels   $  87   $ —   $ —   $  87      14%
Funeral homes and funeral services      30      —      32      62      10%
Full-service restaurants      29      2      2      33      5%
Child day care services      24      1      2      27      5%
Car washes      11      10      —      21      4%
Homes for the elderly      16     —     —      16      3%
Outpatient mental health and substance abuse centers      15     —     —      15      3%
General line grocery merchant wholesalers      13     —     —      13      2%
Gasoline stations with convenience stores      12     —      —      12      2%
Fitness and recreational sports centers      8     —      2     10      2%
Nursing care facilities      9     —      —      9      2%
Offices of lawyers      9      —      —      9      1%
Caterers      7      —      —      7      1%
All other specialty trade contractors      6     —      1      7      1%
Used car dealers      7      —      —      7      1%
Plumbing, heating, and air-conditioning companies      6     —      1      7      1%
Limited-service restaurants      4     —      3      7      1%
General warehousing and storage      6      —     —      6      1%
Appliance repair and maintenance      6     —      —      6      1%
Automotive body, paint, and interior repair      5     —     —      5      1%
Other accounting services      5      —     —      5      1%
Residential remodelers      5     —     —      5      1%
Offices of dentists      5      —     —      5      1%
Other miscellaneous durable goods merchant      5      —     —      5      1%
Other(2)      168      13      35      216      35%
Total   $  498   $  26   $  78   $  602      100%

 

(1) Of the SBL commercial mortgage and SBL construction loans, $137 million represents the total of the non-guaranteed portion of SBA 7(a) Program loans and non-SBA loans. The balance of those categories represents SBA 504 Program loans with 50%-60% origination date LTVs. SBL Commercial excludes $4 million of loans sold that do not qualify for true sale accounting.

(2) Loan types of less than $5 million are spread over approximately one hundred different business types.

 

State diversification as of March 31, 2025

 

(Excludes government guaranteed portion of SBA 7(a) Program loans)

 

    SBL commercial mortgage(1)   SBL construction(1)   SBL non-real estate   Total     % Total
      (Dollars in millions)
California   $  133   $  5   $  6   $  144      24%
Florida      78      11      4      93      15%
North Carolina      44      —      4      48      8%
New York      41     —      3      44      7%
New Jersey      32      —      7      39      6%
Texas      25      3      6      34      6%
Pennsylvania      19      —      13      32      5%
Georgia      25      2      1      28      5%
Other States      101      5      34      140      24%
Total   $  498   $  26   $  78   $  602      100%

 

(1) Of the SBL commercial mortgage and SBL construction loans, $137 million represents the total of the non-guaranteed portion of SBA 7(a) Program loans and non-SBA loans. The balance of those categories represents SBA 504 Program loans with 50%-60% origination date LTVs. SBL Commercial excludes $4 million of loans that do not qualify for true sale accounting.

 

  9 

 

 

 

Top 10 loans as of March 31, 2025

 

 

               
Type(1)   State   SBL commercial mortgage  
      (Dollars in millions)
General line grocery merchant wholesalers     CA   $  13   
Funeral homes and funeral services     ME      13   
Funeral homes and funeral services     PA      12   
Outpatient mental health and substance abuse center     FL      10   
Hotel     FL      8   
Lawyer's office     CA      8   
Hotel     VA      7   
Hotel     NC      7   
Charter bus industry     NY      6   
Used car dealer     CA      6   
Total         $  90   

 

(1) The table above does not include loans to the extent that they are U.S. government guaranteed.

 

  10 

 

 

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

 

Type as of March 31, 2025

  

Type     # Loans     Balance   Weighted average origination date LTV   Weighted average interest rate
      (Dollars in millions)
Real estate bridge loans (multifamily apartment loans recorded at amortized cost)(1)     175   $  2,212     70%    8.53%
                     
Non-SBA commercial real estate loans, at fair value:                    
Multifamily (apartment bridge loans)(1)      4    $  88     70%    7.47%
Hospitality (hotels and lodging)      1       19     66%    9.75%
Retail      2       12     72%    8.19%
Other      2       9     71%    4.96%
       9       128     69%    7.70%
Fair value adjustment            —        
Total non-SBA commercial real estate loans, at fair value            128         
Total commercial real estate loans         $  2,340     70%    8.49%

 

(1) In the third quarter of 2021, we resumed the origination of bridge loans for multi-family apartment rehabilitation which comprise these categories. Such loans held at fair value were originally intended for sale, but are now being retained on the balance sheet. In addition to “as is” origination date appraisals, on which the weighted average origination date LTVs are based, third-party appraisers also estimated “as stabilized” values, which represents additional potential collateral value as rehabilitation progresses, and units are re-leased at stabilized rental rates. The weighted average origination date “as stabilized” LTV was estimated at 61%.

 

 

State diversification as of March 31, 2025     15 largest loans as of March 31, 2025
                               
State     Balance     Origination date LTV     State       Balance   Origination date LTV
(Dollars in millions)     (Dollars in millions)
Texas   $  720     70%     Texas     $  46    75%
Georgia      304     70%     Tennessee        40    72%
Florida      230     68%     Texas        39    64%
Indiana      129     71%     Michigan        39    62%
New Jersey      115     68%     Texas        36    67%
Ohio      114     71%     Florida        35    72%
Michigan      105     65%     New Jersey        34    62%
Other States each <$65 million      623     70%     Pennsylvania        34    63%
Total   $  2,340     70%     Indiana        34    76%
                  Texas        33    62%
                  New Jersey        31    71%
                  Oklahoma        31    78%
                  Texas        31    77%
                  Michigan        31    66%
                  Georgia        30    69%
                  15 largest commercial real estate loans     $  524    69%
  11 

 

 

Institutional banking loans outstanding at March 31, 2025

 

Type Principal   % of total
  (Dollars in millions)
SBLOC $  1,042   57%
IBLOC    535   29%
Advisor financing    266   14%
Total $  1,843    100%

 

For SBLOC, we generally lend up to 50% of the value of equities and 80% for investment grade securities. While the value of equities has fallen in excess of 30% in recent years, the reduction in collateral value of brokerage accounts collateralizing SBLOC loans generally has been less, for two reasons. First, many collateral accounts are “balanced” and accordingly have a component of debt securities, which have either not decreased in value as much as equities, or in some cases may have increased in value. Second, many of these accounts have the benefit of professional investment advisors who provided some protection against market downturns, through diversification and other means. Additionally, borrowers often utilize only a portion of collateral value, which lowers the percentage of principal to collateral.

 

Top 10 SBLOC loans at March 31, 2025

 

  Principal amount   % Principal to collateral
  (Dollars in millions)
  $  10    39%
     9    55%
     9    15%
     8    87%
     8    48%
     8    21%
     7    33%
     6    20%
     6    39%
     5    42%
Total and weighted average $  76    41%

 

Insurance backed lines of credit (IBLOC)

 

IBLOC loans are backed by the cash value of eligible life insurance policies which have been assigned to us. We generally lend up to 95% of such cash value. Our underwriting standards require approval of the insurance companies which carry the policies backing these loans. Currently, fifteen insurance companies have been approved and, as of April 17, 2025, all were rated A- (Excellent) or better by AM BEST.

  12 

 

 

Direct lease financing by type as of March 31, 2025

 

  Principal balance(1)   % Total
  (Dollars in millions)    
Government agencies and public institutions(2) $  129     18%
Construction    128     18%
Real estate and rental and leasing    98     14%
Waste management and remediation services    95     13%
Health care and social assistance    29     4%
Other services (except public administration)    24     3%
Professional, scientific, and technical services    22     3%
Wholesale trade    19     3%
General freight trucking    17     2%
Finance and insurance    14     2%
Transit and other transportation    12     2%
Arts, entertainment, and recreation    10     1%
Other    113     17%
Total $  710     100%

 

(1) Of the total $710 million of direct lease financing, $651 million consisted of vehicle leases with the remaining balance consisting of equipment leases.

(2) Includes public universities as well as school districts.

 

 

Direct lease financing by state as of March 31, 2025

 

State Principal balance   % Total
  (Dollars in millions)    
Florida $  115    16%
New York    60    8%
Utah    53    7%
Connecticut    52    7%
California    46    6%
Pennsylvania    42    6%
North Carolina    38    5%
New Jersey    37    5%
Maryland    36    5%
Texas    23    3%
Idaho    19    3%
Georgia    15    2%
Washington    14    2%
Ohio    13    2%
Iowa    13    2%
Other States    134    21%
Total $  710    100%

 

 

  13 

 

 

Capital ratios Tier 1 capital   Tier 1 capital   Total capital   Common equity
  to average   to risk-weighted   to risk-weighted   tier 1 to risk
  assets ratio   assets ratio   assets ratio   weighted assets
As of March 31, 2025              
The Bancorp, Inc.  8.93%    13.94%    14.86%    13.94%
The Bancorp Bank, National Association  9.79%    15.28%    16.19%    15.28%
"Well capitalized" institution (under federal regulations-Basel III)  5.00%    8.00%    10.00%    6.50%
               
As of December 31, 2024              
The Bancorp, Inc.  9.41%    13.85%    14.65%    13.85%
The Bancorp Bank, National Association  10.38%    15.25%    16.06%    15.25%
"Well capitalized" institution (under federal regulations-Basel III)  5.00%    8.00%    10.00%    6.50%

 

 

Three months ended

March 31,

  

Year ended

December 31,

  2025   2024   2024
Selected operating ratios                
Return on average assets(1)    2.49%      2.97%      2.71%
Return on average equity(1)    28.64%      27.95%      27.24%
Net interest margin    4.07%      5.15%      4.85%

 

(1) Annualized

 

Book value per share table March 31,   December 31,     September 30,   March 31,
  2025   2024   2024   2024
Book value per share $  17.66   $  16.69   $  16.90   $  15.63

 

Loan delinquency and other real estate owned March 31, 2025
 

30-59 days

past due

  

60-89 days

past due

  

90+ days

still accruing

   Non-accrual  

Total

past due

   Current  

Total

loans

SBL non-real estate $  659    $  61    $  204    $  6,148    $  7,072    $  184,678    $  191,750 
SBL commercial mortgage    2,742       —      —      6,893       9,635       671,819       681,454 
SBL construction    —      —      —      1,578       1,578       40,448       42,026 
Direct lease financing    11,152       5,925       442       6,969       24,488       685,490       709,978 
SBLOC / IBLOC    9,242       3,036       —      503       12,781       1,564,389       1,577,170 
Advisor financing    —      —      —      —      —      265,950       265,950 
Real estate bridge loans    —      —      —      9,754       9,754       2,202,300       2,212,054 
Consumer fintech    16,114       841       346       —      17,301       556,747       574,048 
Other loans    47       —      2       —      49       112,273       112,322 
Unamortized loan fees and costs    —      —      —      —      —      13,398       13,398 
  $  39,956    $  9,863    $  994    $  31,845    $  82,658    $  6,297,492    $  6,380,150 

 

Other loan information

 

Of the $67.5 million special mention and $132.5 million substandard loans real estate bridge loans at March 31, 2025, none were modified in the first quarter of 2025.

 

Other real estate owned year to date activity

 

  March 31, 2025
Beginning balance $  62,025 
Transfer from loans, net    3,722 
Advances    1,382 
Ending balance $  67,129 

 

    March 31,     December 31,     September 30,     March 31,
    2025     2024     2024     2024
Asset quality ratios:                      
Nonperforming loans to total loans(1)    0.51%      0.55%      0.52%      1.05%
Nonperforming assets to total assets(1)    1.07%      1.10%      1.14%      0.97%
Allowance for credit losses to total loans    0.82%      0.73%      0.52%      0.53%

 

(1) In the first quarter of 2024, a $39.4 million apartment building rehabilitation bridge loan was transferred to nonaccrual status. On April 2, 2024, the same loan was transferred from nonaccrual status to other real estate owned. We completed the majority of the capital improvements at the property and have agreed to a sale with a sales price that is expected to cover the current balance plus the forecasted cost of improvements to the property. The March 31, 2025, other real estate owned

 

  14 

 

 

 

balance of $42.5 million compares to a September 2023 third-party “as is” appraisal of $47.8 million, or an 86% “as is” LTV, after considering the $1.6 million of earnest money deposits in connection with the property’s sale in process.  Although the payment date for the additional earnest money deposit of $1.4 million was extended to April 28, 2025 to facilitate a change in ownership by the purchaser, the purchaser has made additional investments, including providing insurance coverage at the property.  The closing date remains May 23, 2025, with an option for two additional, 30-day extensions in exchange for additional consideration of $1.0 million per extension.

 

Gross dollar volume (GDV)(1) Three months ended
  March 31,   December 31,   September 30,   March 31,
  2025   2024   2024   2024
    (Dollars in thousands)
Prepaid and debit card GDV $  44,650,422   $  39,656,909   $  37,898,006   $  37,943,338
                       

 

(1) Gross dollar volume represents the total dollar amount spent on prepaid and debit cards issued by The Bancorp Bank, N.A.

 

  15 

 

 

 

Business line quarterly summary:
Quarter ended March 31, 2025
(Dollars in millions)
          Balances          
              % Growth          
Major business lines   Average approximate rates(1)     Balances(2)   Year over Year   Linked quarter annualized          
Loans                            
Institutional banking(3)   6.1%   $  1,843    3%   1%          
Small business lending(4)   7.1%      1,009    12%   11%          
Leasing   8.1%      710    1%   5%          
Commercial real estate (non-SBA loans, at fair value)   7.7%      128    nm   nm          
Real estate bridge loans (recorded at book value)   8.5%      2,212    5%   20%          
Consumer fintech loans - interest bearing   5.0%      25    nm   nm          
Consumer fintech loans - non-interest bearing(5)    —      549    nm   nm          
Weighted average yield   6.8%   $  6,476              Non-interest income
                            % Growth
Deposits: Fintech solutions group                       Current quarter   Year over Year
Prepaid and debit card issuance, consumer fintech loan fees, and other payments fees   2.2%   $  7,814    26%   nm   $  34.4    26%

 

(1) Average rates are for the three months ended March 31, 2025.

(2) Loan and deposit categories are based on period-end and average quarterly balances, respectively.

(3) Institutional Banking loans are comprised of SBLOC loans collateralized by marketable securities, IBLOC loans collateralized by the cash surrender value of eligible life insurance policies, and investment advisor financing.

(4) Small Business Lending is substantially comprised of SBA-guaranteed loans. Growth rates exclude the impact of $4 million of loans that do not qualify for true sale accounting at March 31, 2025 compared to $9 million at prior quarter end and $29 million at March 31, 2024.

(5) Income related to non-interest-bearing balances is included in non-interest income.

 

Summary of credit lines available

 

The Bancorp maintains lines of credit exceeding potential liquidity requirements as follows. The Bancorp also has access to other substantial sources of liquidity.

 

  March 31, 2025
  (Dollars in thousands)
Federal Reserve Bank $  2,014,390 
Federal Home Loan Bank    1,071,418 
Total lines of credit available $  3,085,808 

 

Estimated insured vs uninsured deposits

 

The vast majority of The Bancorp’s deposits are insured and low balance and accordingly do not constitute the liquidity risk experienced by certain institutions. Accordingly, the deposit base is comprised as follows.

 

  March 31, 2025
Insured   95%
Low balance accounts   3%
Other uninsured   2%
Total deposits   100%

 

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Calculation of efficiency ratio (non-GAAP)(1)

 

  Three months ended   Year ended
  March 31,   March 31,   December 31,
  2025   2024   2024
  (Dollars in thousands)
Net interest income $  91,743    $  94,418    $  376,241 
Non-interest income(2)    37,774       29,382       126,863 
Total revenue $  129,517    $  123,800    $  503,104 
Non-interest expense $  53,294    $  46,712    $  203,225 
                 
Efficiency ratio    41%      38%      40%
                 
(1)The efficiency ratio is calculated by dividing GAAP total non-interest expense by the total of GAAP net interest income and non-interest income.  This ratio compares revenues generated with the amount of expense required to generate such revenues and may be used as one measure of overall efficiency.
(2)Excludes consumer fintech loan credit enhancement income of $45.9 million and $30.7 million at March 31, 2025 and December 31, 2024, respectively.

 

 

 

 

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