The Bancorp, Inc. Reports Fourth Quarter 2020 Financial Results

Rhea-AI Summary

The Bancorp, Inc. (NASDAQ: TBBK) reported robust financial results for Q4 2020, achieving a net income of $24.0 million, or $0.41 diluted EPS. Key metrics include an annualized return on assets of 1.6% and a return on equity of 17%. The bank's net interest income surged 47% to $51.7 million, supported by a 72% rise in average loans to $4.34 billion. Notably, prepaid card fees increased by 5%, while the book value per share climbed to $10.10, a 19% increase year-over-year. The 2021 guidance targets a net income of approximately $100 million, or $1.70 per share.

Positive

• Net income increased 1,168% year-over-year to $24.0 million.
• Diluted EPS rose to $0.41 from $0.03 in the prior year.
• Net interest income up 47% to $51.7 million.
• Average loans increased 72% to $4.34 billion.
• Book value per share rose to $10.10, a 19% increase.

Negative

• None.

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		{ "@context": "https://schema.org", "@type": "FAQPage", "name": "The Bancorp, Inc. Reports Fourth Quarter 2020 Financial Results FAQs", "mainEntity": [ { "@type": "Question", "name": "What were The Bancorp's financial results for Q4 2020?", "acceptedAnswer": { "@type": "Answer", "text": "The Bancorp reported a net income of $24.0 million, or $0.41 diluted earnings per share, in Q4 2020." } }, { "@type": "Question", "name": "How did The Bancorp's earnings compare to the previous year?", "acceptedAnswer": { "@type": "Answer", "text": "In Q4 2019, The Bancorp earned a net income of $1.9 million, or $0.03 per diluted share, marking a significant increase in 2020." } }, { "@type": "Question", "name": "What is The Bancorp's guidance for 2021?", "acceptedAnswer": { "@type": "Answer", "text": "The Bancorp's guidance for 2021 targets a net income of approximately $100 million, or $1.70 per share." } }, { "@type": "Question", "name": "How much did The Bancorp's net interest margin increase?", "acceptedAnswer": { "@type": "Answer", "text": "The net interest margin increased to 3.58% for Q4 2020, up from 3.12% in Q4 2019." } }, { "@type": "Question", "name": "What was the growth in average loans for The Bancorp?", "acceptedAnswer": { "@type": "Answer", "text": "Average loans rose 72% year-over-year, reaching $4.34 billion in Q4 2020." } } ] } FAQ What were The Bancorp's financial results for Q4 2020? The Bancorp reported a net income of $24.0 million, or $0.41 diluted earnings per share, in Q4 2020. How did The Bancorp's earnings compare to the previous year? In Q4 2019, The Bancorp earned a net income of $1.9 million, or $0.03 per diluted share, marking a significant increase in 2020. What is The Bancorp's guidance for 2021? The Bancorp's guidance for 2021 targets a net income of approximately $100 million, or $1.70 per share. How much did The Bancorp's net interest margin increase? The net interest margin increased to 3.58% for Q4 2020, up from 3.12% in Q4 2019. What was the growth in average loans for The Bancorp? Average loans rose 72% year-over-year, reaching $4.34 billion in Q4 2020. The Bancorp Inc. NASDAQ:TBBK TBBK Rankings #1766 Ranked by Market Cap N/A Ranked by Dividends TBBK Latest News Oct 24, 2024 The Bancorp, Inc. Reports its Third Quarter Financial Results Oct 11, 2024 The Bancorp, Inc. Sets Third Quarter 2024 Financial Results Release Date and Conference Call Aug 28, 2024 The Bancorp Announces Todd Brockman to Join Its Board of Directors Jul 25, 2024 The Bancorp, Inc. Reports Second Quarter Financial Results Jul 12, 2024 The Bancorp, Inc. Sets Second Quarter 2024 Financial Results Release Date and Conference Call TBBK Stock Data Market Cap 2.75B Float 43.84M Insiders Ownership 3.96% Institutions Ownership 108.31% Short Percent 13.51% Industry Banks - Regional Sector National Commercial Banks Website Link Country United States of America City WILMINGTON Explore About Rhea-AI Sitemap Legal Terms of Use Cookie Notice Privacy Policy Links RSS feed Patreon Discord Server Facebook Reddit Google News © 2020-2024 StockTitan.net