Press Release

The Bancorp, Inc. Reports Second Quarter 2018 Financial Results

Company Release - 7/26/2018 4:15 PM ET

WILMINGTON, Del.--(BUSINESS WIRE)-- The Bancorp, Inc. ("The Bancorp") (NASDAQ: TBBK), a financial holding company, today reported financial results for the second quarter of 2018.

Highlights

  • Pretax income from continuing operations increased 9% to $8.4 million for the quarter ended June 30, 2018 compared to $7.7 million for the quarter ended June 30, 2017.
  • Net interest income increased 9% to $29.5 million for the quarter ended June 30, 2018, compared to $27.2 million for the quarter ended June 30, 2017.
  • Interest income on security backed lines of credit (“SBLOC”) loans increased 43% to $7.4 million for the quarter ended June 30, 2018, compared to $5.2 million for the quarter ended June 30, 2017.
  • Net interest margin increased to 3.11% for the quarter ended June 30, 2018, compared to 3.10% for the quarter ended June 30, 2017.
  • Total prepaid and other payments revenue for the quarter ended June 30, 2018 increased to $16.1 million, or 9%, compared to the quarter ended June 30, 2017. Of that total, prepaid fees for the quarter ended June 30, 2018 increased to $14.1 million, or 6%, and card payment and ACH processing fees increased to $2.0 million, or 34% compared to the quarter ended June 30, 2017, respectively.
  • Loans increased 10% to $1.51 billion at June 30, 2018, compared to $1.37 billion at June 30, 2017.
  • SBLOC loans increased 11% to $795.8 million at June 30, 2018, compared to $718.7 million at June 30, 2017.
  • Small Business Administration (“SBA”) loans increased 17% to $439.5 million at June 30, 2018, compared to $376.6 million at June 30, 2017.
  • Direct lease financing increased 5% to $389.4 million at June 30, 2018, compared to $370.6 million at June 30, 2017.
  • The rate on $3.96 billion of average deposits and interest-bearing liabilities in the second quarter of 2018 was 0.59% with a rate of 0.8% for $2.14 billion of average prepaid card deposits.
  • Consolidated leverage ratio was 8.06% at June 30, 2018. The Bancorp and its subsidiary, The Bancorp Bank, remain well capitalized.
  • Book value per common share at June 30, 2018 was $5.91 per share.

Damian Kozlowski, The Bancorp’s Chief Executive Officer, said, “The sale of our Safe Harbor IRAs in July 2018 concludes our divestiture of non-core assets started when our new business plan was approved by our board of directors in the 3rd quarter of 2016. Like our European and HSA franchises, our safe harbor business was sub scale, carried regulatory risks and was unlikely to deliver longer-term growth or innovation to our business model. Therefore, its sale for $65 million or over 10 times 2017 fees will allow our company to likely hit long-term capital targets in the 3rd quarter of this year and provide capital and management focus for growth of our core strategic businesses.”

The Bancorp reported net income of $6.1 million, or $0.11 earnings per diluted share, for the quarter ended June 30, 2018, compared to net income of $18.9 million, or $0.34 income per diluted share, for the quarter ended June 30, 2017. Net income for 2017 included a $9.9 million net tax benefit resulting from the reversal of deferred tax valuation allowances which more than offset the impact of statutory tax rates. Pretax income from continuing operations for second quarter 2018 increased to $8.4 million, or approximately 9% higher than the $7.7 million reported for second quarter 2017. Income from continuing operations does not include any income which may result from the reinvestment of the proceeds from sales or repayment of the remaining assets in The Bancorp’s discontinued operations. Tier one capital to assets, tier one capital to risk-weighted assets, total capital to risk-weighted assets and common equity-tier 1 ratios were 8.06%, 18.60%, 19.02% and 18.60%, 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, July 27, 2018 by clicking on the webcast link on The Bancorp's homepage at www.thebancorp.com. Or, you may dial 844.775.2543, access code 1095334. You may listen to the replay of the webcast following the live call on The Bancorp's investor relations website or telephonically until Friday, August 3, 2018 by dialing 855.859.2056, access code 1095334.

About The Bancorp

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" that involve risks and uncertainties. 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,” “estimate,” “continue,” or similar words. For further discussion of the risks and uncertainties to which these forward-looking statements may be subject, see The Bancorp’s filings with the SEC, including the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of those filings. These risks and uncertainties could cause actual results to differ materially from those projected in the forward-looking statements. 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 presentation, except as may be required under applicable law.

               
The Bancorp, Inc.
Financial highlights
(unaudited)
 
 
Three months ended Six months ended
June 30, June 30,
Condensed income statement 2018 2017 2018 2017
(dollars in thousands except per share data)
 
Net interest income $ 29,534   $ 27,215   $ 59,608   $ 52,092  
Provision for loan and lease losses   900     350     1,600     1,350  
Non-interest income
Service fees on deposit accounts 1,646 1,520 3,222 3,195
Card payment and ACH processing fees 2,014 1,504 3,706 3,032
Prepaid card fees 14,073 13,234 28,355 26,781
Gain (loss) on sale of loans (454 ) 758 11,275 6,141
Gain on sale of investment securities - 586 26 1,089
Change in value of investment in unconsolidated entity (1,732 ) 3 (2,903 ) (16 )
Leasing income 1,108 832 1,595 1,383
Affinity fees 85 149 187 1,170
Gain on sale of health savings accounts - 2,538 - 2,538
Loss from sale of European prepaid card operations - (3,437 ) - (3,437 )
Other non-interest income   300     486     672     516  
Total non-interest income 17,040 18,173 46,135 42,392
Non-interest expense
Salaries and employee benefits 18,897 18,108 39,970 36,114
Data processing expense 1,356 2,641 3,361 6,121
Legal expense 1,770 1,427 4,201 3,165
FDIC Insurance 2,929 3,458 5,148 5,523
Software 2,995 3,012 6,286 6,240
Losses and write downs on other real estate owned - 19 45 19
Civil money penalty - - (290 ) -
Lease termination expense 395 - 395 -
Other non-interest expense   8,968     8,698     17,243     17,964  
Total non-interest expense   37,310     37,363     76,359     75,146  
Income from continuing operations before income taxes 8,364 7,675 27,784 17,988
Income tax expense (benefit)   2,209     (9,923 )   7,608     (5,912 )
Net income from continuing operations 6,155 17,598 20,176 23,900
Discontinued operations
Income (loss) from discontinued operations before income taxes (50 ) 1,992 106 4,659
Income tax expense (benefit)   (36 )   726     1     1,732  
Net income (loss) from discontinued operations, net of tax   (14 )   1,266     105     2,927  
Net income available to common shareholders $ 6,141   $ 18,864   $ 20,281   $ 26,827  
 
Net income per share from continuing operations - basic $ 0.11   $ 0.32   $ 0.36   $ 0.43  
Net income per share from discontinued operations - basic $ -   $ 0.02   $ -   $ 0.05  
Net income per share - basic $ 0.11   $ 0.34   $ 0.36   $ 0.48  
 
Net income per share from continuing operations - diluted $ 0.11   $ 0.32   $ 0.36   $ 0.43  
Net income per share from discontinued operations - diluted $ -   $ 0.02   $ -   $ 0.05  
Net income per share - diluted $ 0.11   $ 0.34   $ 0.36   $ 0.48  
Weighted average shares - basic 56,340,816 55,689,439 56,241,873 55,612,288
Weighted average shares - diluted 57,141,219 56,030,035 57,083,297 55,889,985
 
               
Balance sheet June 30, March 31, December 31, June 30,
2018 2018 2017 2017
(dollars in thousands)
Assets:
Cash and cash equivalents
Cash and due from banks $ 3,052 $ 1,999 $ 3,152 $ 6,458
Interest earning deposits at Federal Reserve Bank 373,782 508,847 841,471 475,387
Securities sold under agreements to resell   64,216     64,312     64,312     65,076  
Total cash and cash equivalents   441,050     575,158     908,935     546,921  
 
Investment securities, available-for-sale, at fair value 1,305,494 1,381,020 1,294,484 1,149,116
Investment securities, held-to-maturity 86,354 86,370 86,380 93,419
Loans held for sale, at fair value 447,997 349,806 503,316 542,819
Loans, net of deferred fees and costs 1,506,812 1,463,064 1,392,228 1,370,263
Allowance for loan and lease losses   (8,014 )   (7,285 )   (7,096 )   (7,353 )
Loans, net   1,498,798     1,455,779     1,385,132     1,362,910  
Federal Home Loan Bank & Atlantic Community Bancshares stock 1,113 991 991 6,211
Premises and equipment, net 18,275 19,052 20,051 22,004
Accrued interest receivable 11,810 11,778 10,900 10,880
Intangible assets, net 4,612 4,995 5,377 5,515
Other real estate owned 405 405 450 -
Deferred tax asset, net 39,779 38,139 34,802 53,226
Investment in unconsolidated entity 67,994 70,016 74,473 120,862
Assets held for sale from discontinued operations 241,694 289,038 304,313 336,246
Other assets   56,499     86,553     78,543     53,888  
Total assets $ 4,221,874   $ 4,369,100   $ 4,708,147   $ 4,304,017  
 
Liabilities:
Deposits
Demand and interest checking $ 3,287,682 $ 3,461,881 $ 3,806,965 $ 3,437,482
Savings and money market   511,598     493,288     453,877     438,602  
Total deposits   3,799,280     3,955,169     4,260,842     3,876,084  
 
Securities sold under agreements to repurchase 161 182 217 273
Subordinated debenture 13,401 13,401 13,401 13,401
Long-term borrowings 42,000 42,157 42,323 42,680
Other liabilities   34,485     28,299     67,215     40,560  
Total liabilities $ 3,889,327   $ 4,039,208   $ 4,383,998   $ 3,972,998  
 
Shareholders' equity:
Common stock - authorized, 75,000,000 shares of $1.00 par value; 56,410,525 and 55,757,559 shares issued at June 30, 2018 and 2017, respectively 56,411 56,307 55,861 55,858
Treasury stock (100,000 shares) (866 ) (866 ) (866 ) (866 )
Additional paid-in capital 364,460 363,605 363,196 361,478
Accumulated deficit (69,213 ) (75,345 ) (89,485 ) (85,114 )
Accumulated other comprehensive loss   (18,245 )   (13,809 )   (4,557 )   (337 )
Total shareholders' equity   332,547     329,892     324,149     331,019  
 
Total liabilities and shareholders' equity $ 4,221,874   $ 4,369,100   $ 4,708,147   $ 4,304,017  
 
                       
Average balance sheet and net interest income Three months ended June 30, 2018 Three months ended June 30, 2017
(dollars in thousands)
Average Average Average Average
Assets: Balance Interest Rate Balance Interest Rate
Interest earning assets:
Loans net of unearned fees and costs ** $ 1,828,398 $ 21,704 4.75 % $ 1,770,226 $ 19,748 4.46 %
Leases - bank qualified* 20,214 337 6.67 % 21,539 415 7.71 %
Investment securities-taxable 1,435,598 10,770 3.00 % 1,249,890 9,138 2.92 %
Investment securities-nontaxable* 8,702 63 2.90 % 14,632 107 2.93 %
Interest earning deposits at Federal Reserve Bank 458,695 2,095 1.83 % 480,417 1,255 1.04 %
Federal funds sold and securities purchased under agreement to resell   64,300     475 2.95 %   65,355     333 2.04 %
Net interest earning assets 3,815,907 35,444 3.72 % 3,602,059 30,996 3.44 %
 
Allowance for loan and lease losses (7,168 ) (7,190 )
Assets held for sale from discontinued operations 281,476 2,066 2.94 % 348,452 3,135 3.60 %
Other assets   212,397     274,335  
$ 4,302,612   $ 4,217,656  
 
Liabilities and Shareholders' Equity:
Deposits:
Demand and interest checking $ 3,439,265 $ 5,022 0.58 % $ 3,437,845 $ 2,912 0.34 %
Savings and money market   502,783     617 0.49 %   434,792     520 0.48 %
Total deposits 3,942,048 5,639 0.57 % 3,872,637 3,432 0.35 %
 
Short-term borrowings 1,648 9 2.18 % 6,516 22 1.35 %
Securities sold under agreements to repurchase 171 - 0.00 % 273 - 0.00 %
Subordinated debentures   13,401     178 5.31 %   13,401     144 4.30 %
Total deposits and liabilities 3,957,268 5,826 0.59 % 3,892,827 3,598 0.37 %
 
Other liabilities   14,124     4,434  
Total liabilities 3,971,392 3,897,261
 
Shareholders' equity   331,220     320,395  
$ 4,302,612   $ 4,217,656  
Net interest income on tax equivalent basis* $ 31,684 $ 30,533
 
Tax equivalent adjustment   84   183
 
Net interest income $ 31,600 $ 30,350
Net interest margin * 3.11 % 3.10 %
 

* Full taxable equivalent basis, using a statutory rate of 21% for 2018 and 35% for 2017, respectively.

** Includes loans held for sale.

 
                       
Average balance sheet and net interest income Six months ended June 30, 2018 Six months ended June 30, 2017
(dollars in thousands)
Average Average Average Average
Assets: Balance Interest Rate Balance Interest Rate
Interest earning assets:
Loans net of unearned fees and costs ** $ 1,887,511 $ 44,743 4.74 % $ 1,700,508 $ 37,119 4.37 %
Leases - bank qualified* 20,623 671 6.51 % 21,361 811 7.59 %
Investment securities-taxable 1,405,749 20,469 2.91 % 1,287,360 18,143 2.82 %
Investment securities-nontaxable* 9,294 138 2.97 % 15,025 218 2.90 %
Interest earning deposits at Federal Reserve Bank 480,343 3,927 1.64 % 616,345 2,771 0.90 %
Federal funds sold and securities purchased under agreement to resell   64,258     889 2.77 %   57,635     560 1.94 %
Net interest earning assets 3,867,778 70,837 3.66 % 3,698,234 59,622 3.22 %
 
Allowance for loan and lease losses (7,076 ) (6,708 )
Assets held for sale from discontinued operations 288,050 4,593 3.19 % 340,900 6,496 3.81 %
Other assets   199,981     285,428  
$ 4,348,733   $ 4,317,854  
 
Liabilities and Shareholders' Equity:
Deposits:
Demand and interest checking $ 3,487,205 $ 9,323 0.53 % $ 3,547,820 $ 5,699 0.32 %
Savings and money market   495,124     1,285 0.52 %   432,267     1,167 0.54 %
Total deposits 3,982,329 10,608 0.53 % 3,980,087 6,866 0.35 %
 
Short-term borrowings 13,182 113 1.71 % 3,276 22 1.34 %
Securities sold under agreements to repurchase 188 - 0.00 % 274 - 0.00 %
Subordinated debentures   13,401     338 5.04 %   13,401     282 4.21 %
Total deposits and liabilities 4,009,100 11,059 0.55 % 3,997,038 7,170 0.36 %
 
Other liabilities   11,285     5,824  
Total liabilities 4,020,385 4,002,862
 
Shareholders' equity   328,348     314,992  
$ 4,348,733   $ 4,317,854  
Net interest income on tax equivalent basis* $ 64,371 $ 58,948
 
Tax equivalent adjustment   170   360
 
Net interest income $ 64,201 $ 58,588
Net interest margin * 3.11 % 2.90 %
 

* Full taxable equivalent basis, using a statutory rate of 21% for 2018 and 35% for 2017.

** Includes loans held for sale.

 
               
Allowance for loan and lease losses: Six months ended Year ended
June 30, June 30, December 31,
2018 2017 2017
(dollars in thousands)
 
Balance in the allowance for loan and lease losses at beginning of period (1) $ 7,096   $ 6,332   $ 6,332  
 
Loans charged-off:
SBA non-real estate 388 136 1,171
SBA commercial mortgage 157 - -
Direct lease financing 244 202 926
Other consumer loans   15     16     110  
Total   804     354     2,207  
 
Recoveries:
SBA non-real estate 47 2 18
SBA commercial mortgage 11 - -
Direct lease financing 64 - 7
Other consumer loans   -     23     26  
Total   122     25     51  
Net charge-offs 682 329 2,156
Provision charged to operations   1,600     1,350     2,920  
 
Balance in allowance for loan and lease losses at end of period $ 8,014   $ 7,353   $ 7,096  
Net charge-offs/average loans 0.04 % 0.02 % 0.12 %
Net charge-offs/average loans (annualized) 0.07 % 0.04 % 0.12 %
Net charge-offs/average assets 0.02 % 0.01 % 0.05 %
(1) Excludes activity from assets held for sale from discontinued operations.
 
 
Loan portfolio: June 30, March 31, December 31, June 30,
2018 2018 2017 2017
(dollars in thousands)
 
SBA non-real estate $ 75,141 $ 75,225 $ 70,379 $ 73,476
SBA commercial mortgage 156,268 149,227 142,086 126,224
SBA construction   17,781     20,143     16,740     11,057
Total SBA loans 249,190 244,595 229,205 210,757
Direct lease financing 389,387 385,467 377,660 370,556
SBLOC 795,823 759,369 730,462 718,707
Other specialty lending 48,253 45,729 30,720 44,389
Other consumer loans   13,174     17,416     14,133     15,858
1,495,827 1,452,576 1,382,180 1,360,267
Unamortized loan fees and costs   10,985     10,488     10,048     9,996
Total loans, net of deferred loan fees and costs $ 1,506,812   $ 1,463,064   $ 1,392,228   $ 1,370,263
 
 
Small business lending portfolio: June 30, March 31, December 31, June 30,
2018 2018 2017 2017
(dollars in thousands)
 
SBA loans, including deferred fees and costs 257,412 252,457 236,724 218,253
SBA loans included in HFS   182,072     172,030     165,177     158,389
Total SBA loans $ 439,484   $ 424,487   $ 401,901   $ 376,642
 
               
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 June 30, 2018
The Bancorp, Inc. 8.06 % 18.60 % 19.02 % 18.60 %
The Bancorp Bank 7.69 % 18.11 % 18.54 % 18.11 %
"Well capitalized" institution (under FDIC regulations) 5.00 % 8.00 % 10.00 % 6.50 %
 
As of December 31, 2017
The Bancorp, Inc. 7.90 % 16.73 % 17.09 % 16.73 %
The Bancorp Bank 7.61 % 16.23 % 16.59 % 16.23 %
"Well capitalized" institution (under FDIC regulations) 5.00 % 8.00 % 10.00 % 6.50 %
 
               
Three months ended Six months ended
June 30, June 30,
2018 2017 2018 2017
Selected operating ratios:
Return on average assets (1) 0.57 % 1.79 % 0.94 % 1.25 %
Return on average equity (1) 7.44 % 23.62 % 12.46 % 17.17 %
Net interest margin 3.11 % 3.10 % 3.11 % 2.90 %
Book value per share - - $ 5.91 $ 5.94
 
(1) Annualized
 
 
June 30, March 31, December 31, June 30,
2018 2018 2017 2017
Nonperforming loans to total loans (2) 0.42 % 0.42 % 0.30 % 0.41 %
Nonperforming assets to total assets (2) 0.16 % 0.15 % 0.10 % 0.13 %
Allowance for loan and lease losses to total loans 0.53 % 0.50 % 0.51 % 0.54 %
 
Nonaccrual loans $ 4,915 $ 3,516 $ 3,996 $ 5,115
Other real estate owned   405     405     450     104  
Total nonperforming assets $ 5,320   $ 3,921   $ 4,446   $ 5,219  
 
Loans 90 days past due still accruing interest $ 1,458   $ 2,643   $ 227   $ 494  
 
(2) Nonperforming loan and asset ratios include nonaccrual loans and loans 90 days past due still accruing interest.
 
 
Three months ended
June 30, March 31, December 31, June 30,
2018 2017 2017 2017
(in thousands)
Gross dollar volume (GDV) (3):
Prepaid card GDV $ 12,799,531   $ 13,402,496   $ 10,963,456   $ 11,894,601  
 

(3) Gross dollar volume represents the total dollar amount spent on prepaid and debit cards issued by The Bancorp.

 
                       
Business line quarterly summary:
Quarter ended June 30, 2018
(dollars in millions)
 
Balances Non interest income
% Growth % Growth
Major business lines

Average

approximate

rates

Balances*

Year

over year

   

Linked

quarter

annualized

Current

quarter

Year

over year

Loans

Institutional banking ** 3.8 % $ 796 11 % 19 % $ 1.6 nm
SBA 5.2 % 439 17 % 14 % - -
Leasing 6.1 % 389 5 % 4 % 1.1 33 %
Commercial real estate securitization *** 5.6 %       266 nm nm - nm
Weighted average yield 4.8 % $ 1,890
 

Deposits

Payment solutions (primarily prepaid) 0.8 % $ 2,138 4 % -4 % $ 14.1 6 %
Card payment and ACH processing 0.4 % 905 3 % 1 % 2.0 34 %
 
* Loan categories based on period end balance and deposit categories based on average quarterly balances.
** Includes SBLOC loans; includes safe harbor individual retirement fee income prior to sale.
*** Balances reflect timing of related sales.
 
             
Analysis of Walnut Street* marks:
 
Loan activity     Marks
(dollars in millions)
 
Original Walnut Street loan balance, December 31, 2014 $ 267
Marks through December 31, 2014 sale date   (58 ) $ (58 )
Sales price of Walnut Street 209
Equity investment from independent investor   (16 )
December 31, 2014 Bancorp book value 193
Additional marks 2015 - 2017 (42 ) (42 )
2018 Marks (3 ) (3 )
Payments received   (80 )
June 30, 2018 Bancorp book value** $ 68
 
Total marks $ (103 )
Divided by:
Original Walnut Street loan balance $ 267
Percentage of total mark to original balance 39 %
 
* Walnut Street is the “investment in unconsolidated entity” on the balance sheet and is comprised of notes from the sale of certain loans from the discontinued loan portfolio to a third party.

** Approximately 47% of expected principal recoveries were from loans and properties pending liquidation or other resolution as of June 30, 2018.

 
 
Walnut Street portfolio composition as of June 30, 2018
 
Collateral type           % of Portfolio
Commercial real estate non-owner occupied
Retail 47.4 %
Office 12.7 %
Other 4.4 %
Construction and land 23.4 %
Commercial non real estate and industrial 1.3 %
First mortgage residential owner occupied 5.6 %
First mortgage residential non-owner occupied 4.4 %
Other             0.8 %
Total 100.0 %
 
 
Cumulative analysis of marks on discontinued commercial loan principal as of June 30, 2018
           
Discontinued Cumulative % to original
loan principal     marks     principal
(dollars in millions)
 
Commercial loan discontinued principal before marks $ 167 $ -
Florida mall held in discontinued other real estate owned 42 27
Previous mark charges 10 10
Commercial loan mark at June 30, 2018   -       14
Total $ 219     $ 51 23 %
 
 
Analysis of discontinued commercial loan relationships as of June 30, 2018
                       
Performing Nonperforming Total Performing Nonperforming Total
loan principal     loan principal     loan principal     loan marks     loan marks     marks
(in millions)
 
7 loan relationships > $8 million $ 82 $ 25 $ 107 $ 4 $ - $ 4
Loan relationships < $8 million   37       9       46   4       6       10
$ 119     $ 34     $ 153 $ 8     $ 6     $ 14
 
 
Quarterly activity for discontinued commercial loan principal
   
Commercial
loan principal
(in millions)
 
Commercial loan discontinued principal March 31, 2018 before marks $ 210
Quarterly paydowns (41 )
Quarterly charge downs   (2 )
Commercial loan discontinued principal June 30, 2018 before marks $ 167
Mark June 30, 2018   (14 )
Net commercial loan exposure June 30, 2018 $ 153
Residential mortgages   57  
Net loans $ 210
Florida mall in other real estate owned 15
Other 25 properties in other real estate owned 16
Other assets related to discontinued operations   1  
Total discontinued assets at June 30, 2018 $ 242  
           
Discontinued commercial loan composition June 30, 2018
 
Collateral type

Unpaid

principal

balance

   

Mark

June 30,

2018

   

Mark as %

of portfolio

(dollars in millions)
Commercial real estate - non-owner occupied:
Retail $ 10 $ 0.7 6 %
Office 8 0.7 9 %
Other 41 0.6 1 %
Construction and land 43 1.2 3 %
Commercial non-real estate and industrial 12 1.6 13 %
1 to 4 family construction 25 4.7 19 %
First mortgage residential non-owner occupied 17 4.5 27 %
Commercial real estate owner occupied:
Retail 9 0.3 -
Office - - -
Other - - -
Residential junior mortgage 1 - -
Other       1   - -
Total $ 167
Less: mark   (14 )        
Net commercial loan exposure June 30, 2018 $ 153 $ 14.3 9 %

The Bancorp, Inc. Contact
Andres Viroslav, 215-861-7990
aviroslav@thebancorp.com

Source: The Bancorp, Inc.