The Bancorp (TBBK) Tops Q3 EPS by 3c
The Bancorp (NASDAQ: TBBK) reported Q3 EPS of $0.40, $0.03 better than the analyst estimate of $0.37.
- For the quarter ended September 30, 2020, The Bancorp earned net income of $23.1 million from continuing operations, and $0.40 diluted earnings per share from combined continuing and discontinued operations.
- Return on assets and equity for the quarter ended September 30, 2020 amounted to 1.5% and 17% (annualized), respectively, compared to 1.3% and 16% for the quarter ended June 30, 2020.
- Net interest margin amounted to 3.37% for the quarter ended September 30, 2020, compared to 3.35% for the quarter ended September 30, 2019 and 3.53% for the quarter ended June 30, 2020.
- Net interest income increased 33% to $50.0 million for the quarter ended September 30, 2020, compared to $37.6 million for the quarter ended September 30, 2019.
- Average loans and leases, including loans at fair value, increased 61% to $4.21 billion for the quarter ended September 30, 2020, compared to $2.62 billion for the quarter ended September 30, 2019.
- Prepaid, debit card and related fees increased 20% to $19.4 million for the quarter ended September 30, 2020, compared to $16.1 million for the quarter ended September 30, 2019. Gross dollar volume (GDV), representing total spend on cards, increased 39%.
- SBLOC (securities-backed lines of credit), IBLOC (insurance backed lines of credit) and advisor financing loans increased 58% year over year and 12% quarter over quarter to $1.5 billion at September 30, 2020.
- Small Business Loans, including those held at fair value, increased 13% year over year to $633 million at September 30, 2020, exclusive of $208 million of Paycheck Protection Program loans.
- As of September 30, 2020, The Bancorp originated approximately 1,250 Paycheck Protection Program loans, totaling approximately $208 million, which it expects will generate approximately $5.5 million of fees and interest. That income is being recognized over eleven months, beginning in April 2020. The average loan size was approximately $165,000 with 92% of the loans under $350,000.
- The average rate on $5.6 billion of average deposits and interest-bearing liabilities in the third quarter of 2020 was 0.18%. Average prepaid and debit card account deposits of $4.0 billion for third quarter 2020, reflected an increase of 62% over the $2.5 billion for the quarter ended September 30, 2019.
- Consolidated leverage ratio was 8.62% at September 30, 2020. The Bancorp and its subsidiary, The Bancorp Bank (the “Bank”), remain well capitalized.
- Book value per common share at September 30, 2020 was $9.71 per share compared to $8.52 at September 30, 2019, an increase of 14%, primarily as a result of retained earnings per share.
Damian Kozlowski, The Bancorp’s Chief Executive Officer, said, “We continued to add new card programs into our payments ecosystem in the 3rd quarter, as well as adding several new direct rapid funds partners. These new relationships will be announced as new products and services enter the marketplace. Our pipelines continue to be very robust and significantly above historic norms suggesting continued growth in transaction volumes. In the 3rd quarter, we made a strategic determination as to our securitization business. We have been evaluating our securitization platform and its loan portfolio. After assessing its current profitability, market conditions and credit risk, we have decided to discontinue future securitization activity. The loan portfolio, comprised almost entirely of multi-family loans that have experienced few deferrals and delinquencies, will amortize over the next 3-5 years and be replaced by loans originated in other areas. We expect income from the portfolio to be stable over the first 2 years. A portion of the portfolio may be sold as whole loans as space is needed on our balance sheet for other lending activities. Our real estate team in our commercial SBA business will continue to originate select transactions. For full year 2020, we believe we will achieve at least $1.25 earnings per share. We now believe we have enough information to issue preliminary guidance for 2021. We expect to earn between $1.65 and $1.70 per share. $1.70 per share or approximately $100 million in net income is our current company budget for 2021.”
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