EX-99.1 2 ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

The Bancorp, Inc. Reports Third Quarter 2021 Financial Results

Wilmington, DE – October 28, 2021 – The Bancorp, Inc. ("The Bancorp") (NASDAQ: TBBK), a financial holding company, today reported financial results for the third quarter of 2021.

Highlights

| · | For the quarter ended September 30, 2021, The Bancorp earned net income of $28.3 million, or $0.48 diluted earnings per share.

| · | Return on assets and equity for the quarter ended September 30, 2021 amounted to 1.8% and 18%, respectively, compared to 1.5% and 17%, respectively, for the quarter ended September 30, 2020 (all percentages “annualized.”)

| · | Net interest margin amounted to 3.35% for the quarter ended September 30, 2021, compared to 3.37% for the quarter ended September 30, 2020 and 3.19% for the quarter ended June 30, 2021.

| · | Net interest income was $50.9 million for the quarter ended September 30, 2021 compared to $50.0 million for the quarter ended September 30, 2020. In third quarter 2021, growth in net interest income was significantly offset by the $1.9 million impact of loan prepayments on commercial real estate loan interest. However, net realized and unrealized gains on commercial loans increased $3.6 million in third quarter 2021 compared to third quarter 2020, which resulted primarily from fees related to those prepayments. In the third quarter of 2021, we recommenced the origination of such loans, identified as real estate bridge loans, which are intended to offset the impact of prepayments and payoffs.

| · | Average loans and leases, including loans at fair value, increased 9% to $4.58 billion for the quarter ended September 30, 2021, compared to $4.21 billion for the quarter ended September 30, 2020.

| · | Gross dollar volume (“GDV”), representing the total amounts spent on prepaid and debit cards, increased $428.7 million, or 2%, to $24.4 billion for the quarter ended September 30, 2021 compared to the quarter ended September 30, 2020. GDV for the 2020 quarter included the impact of significant government stimulus resulting from the Covid-19 pandemic.

| · | SBLOC (securities backed lines of credit), IBLOC (insurance backed lines of credit) and investment advisor financing loans collectively increased 32% year over year and 6% quarter over quarter to $1.92 billion at September 30, 2021.

| · | Small Business Loans, including those held at fair value, grew 12% year over year to $709.5 million at September 30, 2021. That growth and $709.5 million balance are exclusive of Paycheck Protection Program (“PPP”) loan balances of $71.3 million and $207.9 million, respectively, at September 30, 2021 and September 30, 2020.

| · | Direct lease financing balances increased 19% year over year to $514.1 million at September 30, 2021.

| · | The average interest rate on $5.66 billion of average deposits and interest-bearing liabilities during the third quarter of 2021 was 0.18%. Average deposits of $5.53 billion for the third quarter 2021, reflected a decrease of 1% from the $5.56 billion of average deposits for the quarter ended September 30, 2020.

| · | As of September 30, 2021, substantially all of the borrowers with Covid-19 related payment deferrals had recommenced making payments, with only approximately $1.3 million of non-U.S. guaranteed loan principal remaining in deferral.

| · | Consolidated and The Bancorp Bank (“the Bank”) leverage ratios were 9.82% and 10.24%, respectively, at September 30, 2021. The Bancorp and its subsidiary, The Bank, remain well capitalized.

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| · | Book value per common share at September 30, 2021 was $11.13 per share compared to $9.71 per share at September 30, 2020, an increase of 15%, primarily as a result of retained earnings.

| · | The Bancorp repurchased 440,887 shares of its common stock at an average cost of $22.68 per share during the quarter ended September 30, 2021.

“We continue to experience business momentum across our platform and strong pipelines that will support continued growth into 2022”, said CEO and President Damian Kozlowski. “We are issuing preliminary guidance of $2.15 a share for 2022 or approximately 21% growth over the current 2021 guidance of $1.78. The $2.15 does not include the impact of planned buybacks. In addition, in 2022, we intend to increase our stock buyback to $15 million a quarter from $10 million a quarter.”

The Bancorp reported net income of $28.3 million, or $0.48 per diluted share, for the quarter ended September 30, 2021, compared to net income of $23.3 million, or $0.40 per diluted share, for the quarter ended September 30, 2020. 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 9.82%, 15.69%, 16.10% and 15.69%, 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, October 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 9257937. You may listen to the replay of the webcast following the live call on The Bancorp's investor relations website or telephonically until Friday, November 5, 2021 by dialing 855.859.2056, access code 9257937.

The Bancorp, Inc. (NASDAQ: TBBK), headquartered in Wilmington, Delaware, through its subsidiary, The Bancorp Bank, provides 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 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. 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 and 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 press release, except as may be required under applicable law.

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The Bancorp, Inc. Contact

Andres Viroslav

Director, Investor Relations

215-861-7990

andres.viroslav@thebancorp.com

Source: The Bancorp, Inc.

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The Bancorp, Inc.

Financial highlights

(unaudited)

|  | Three months ended |  | Nine months ended
|  | September 30, |  | September 30,
Condensed income statement |  | 2021 |  | 2020 |  | 2021 |  | 2020
|  | (in thousands, except per share data) |  |
Net interest income |  | $ | 50,893 |  |  | $ | 49,996 |  |  | $ | 158,719 |  |  | $ | 143,153 |
Provision for credit losses |  |  | 1,613 |  |  |  | 1,297 |  |  |  | 1,484 |  |  |  | 5,798 |
Non-interest income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
ACH, card and other payment processing fees |  |  | 1,905 |  |  |  | 1,760 |  |  |  | 5,605 |  |  |  | 5,313 |
Prepaid, debit card and related fees |  |  | 18,223 |  |  |  | 19,434 |  |  |  | 56,878 |  |  |  | 56,647 |
Net realized and unrealized gains (losses) on commercial loans, at fair value |  |  | 4,306 |  |  |  | 684 |  |  |  | 8,881 |  |  |  | (5,412 | )
Change in value of investment in unconsolidated entity |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (45 | )
Leasing related income |  |  | 1,968 |  |  |  | 1,519 |  |  |  | 4,700 |  |  |  | 2,795 |
Other non-interest income |  |  | 186 |  |  |  | 955 |  |  |  | 459 |  |  |  | 2,019 |
Total non-interest income |  |  | 26,588 |  |  |  | 24,352 |  |  |  | 76,523 |  |  |  | 61,317 |
Non-interest expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Salaries and employee benefits |  |  | 25,094 |  |  |  | 26,417 |  |  |  | 77,839 |  |  |  | 74,650 |
Data processing expense |  |  | 1,209 |  |  |  | 1,192 |  |  |  | 3,481 |  |  |  | 3,538 |
Legal expense |  |  | 1,251 |  |  |  | 994 |  |  |  | 5,349 |  |  |  | 4,136 |
FDIC insurance |  |  | 266 |  |  |  | 2,180 |  |  |  | 5,235 |  |  |  | 7,687 |
Software |  |  | 4,045 |  |  |  | 3,595 |  |  |  | 11,435 |  |  |  | 10,458 |
Other non-interest expense |  |  | 7,519 |  |  |  | 7,648 |  |  |  | 21,811 |  |  |  | 22,595 |
Total non-interest expense |  |  | 39,384 |  |  |  | 42,026 |  |  |  | 125,150 |  |  |  | 123,064 |
Income from continuing operations before income taxes |  |  | 36,484 |  |  |  | 31,025 |  |  |  | 108,608 |  |  |  | 75,608 |
Income tax expense |  |  | 8,289 |  |  |  | 7,894 |  |  |  | 25,195 |  |  |  | 19,033 |
Net income from continuing operations |  |  | 28,195 |  |  |  | 23,131 |  |  |  | 83,413 |  |  |  | 56,575 |
Discontinued operations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Income (loss) from discontinued operations before income taxes |  |  | 87 |  |  |  | (1,671 | ) |  |  | 324 |  |  |  | (2,720 | )
Income tax expense (benefit) |  |  | 21 |  |  |  | (1,794 | ) |  |  | 76 |  |  |  | (2,058 | )
Net income (loss) from discontinued operations, net of tax |  |  | 66 |  |  |  | 123 |  |  |  | 248 |  |  |  | (662 | )
Net income |  | $ | 28,261 |  |  | $ | 23,254 |  |  | $ | 83,661 |  |  | $ | 55,913 |
Net income per share from continuing operations - basic |  | $ | 0.49 |  |  | $ | 0.40 |  |  | $ | 1.45 |  |  | $ | 0.98 |
Net income (loss) per share from discontinued operations - basic |  | $ | — |  |  | $ | — |  |  | $ | 0.01 |  |  | $ | (0.01 | )
Net income per share - basic |  | $ | 0.49 |  |  | $ | 0.40 |  |  | $ | 1.46 |  |  | $ | 0.97 |
Net income per share from continuing operations - diluted |  | $ | 0.48 |  |  | $ | 0.40 |  |  | $ | 1.41 |  |  | $ | 0.97 |
Net income (loss) per share from discontinued operations - diluted |  | $ | — |  |  | $ | — |  |  | $ | 0.01 |  |  | $ | (0.01 | )
Net income per share - diluted |  | $ | 0.48 |  |  | $ | 0.40 |  |  | $ | 1.42 |  |  | $ | 0.96 |
Weighted average shares - basic |  |  | 57,198,778 |  |  |  | 57,588,168 |  |  |  | 57,221,174 |  |  |  | 57,433,477 |
Weighted average shares - diluted |  |  | 58,628,306 |  |  |  | 58,471,192 |  |  |  | 58,932,146 |  |  |  | 58,051,833 |

Note: Compared to higher rates in recent periods, the effective tax rate for the three and nine months ended September 30, 2021 approximated 23% as a result of the impact of excess tax deductions related to stock-based compensation, recorded as discrete items. The large deductions and tax benefits resulted from the increase in the Company’s stock price as compared to the original grant date.

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Balance sheet |  | September 30, |  | June 30, |  | December 31, |  | September 30,
|  | 2021 (unaudited) |  | 2021 (unaudited) |  | 2020 |  | 2020 (unaudited)
|  | (in thousands, except share data)
Assets: |  |  |  |  |  |  |  |
Cash and cash equivalents |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and due from banks |  | $ | 6,687 |  |  | $ | 5,470 |  |  | $ | 5,984 |  |  | $ | 6,220 |
Interest earning deposits at Federal Reserve Bank |  |  | 310,642 |  |  |  | 583,498 |  |  |  | 339,531 |  |  |  | 294,758 |
Total cash and cash equivalents |  |  | 317,329 |  |  |  | 588,968 |  |  |  | 345,515 |  |  |  | 300,978 |
Investment securities, available-for-sale, at fair value |  |  | 1,054,223 |  |  |  | 1,106,075 |  |  |  | 1,206,164 |  |  |  | 1,264,903 |
Commercial loans, at fair value |  |  | 1,550,025 |  |  |  | 1,690,216 |  |  |  | 1,810,812 |  |  |  | 1,849,947 |
Loans, net of deferred fees and costs |  |  | 3,136,662 |  |  |  | 2,915,344 |  |  |  | 2,652,323 |  |  |  | 2,488,760 |
Allowance for credit losses |  |  | (16,159 | ) |  |  | (15,292 | ) |  |  | (16,082 | ) |  |  | (15,727 | )
Loans, net |  |  | 3,120,503 |  |  |  | 2,900,052 |  |  |  | 2,636,241 |  |  |  | 2,473,033 |
Federal Home Loan Bank and Atlantic Central Bankers Bank stock |  |  | 1,663 |  |  |  | 1,667 |  |  |  | 1,368 |  |  |  | 1,368 |
Premises and equipment, net |  |  | 16,602 |  |  |  | 17,392 |  |  |  | 17,608 |  |  |  | 15,849 |
Accrued interest receivable |  |  | 17,180 |  |  |  | 18,668 |  |  |  | 20,458 |  |  |  | 18,852 |
Intangible assets, net |  |  | 2,547 |  |  |  | 2,646 |  |  |  | 2,845 |  |  |  | 2,563 |
Other real estate owned |  |  | 2,145 |  |  |  | — |  |  |  | — |  |  |  | — |
Deferred tax asset, net |  |  | 12,237 |  |  |  | 10,923 |  |  |  | 9,757 |  |  |  | 7,952 |
Investment in unconsolidated entity, at fair value |  |  | — |  |  |  | 24,988 |  |  |  | 31,294 |  |  |  | 31,783 |
Assets held-for-sale from discontinued operations |  |  | 87,904 |  |  |  | 97,496 |  |  |  | 113,650 |  |  |  | 122,253 |
Other assets |  |  | 86,105 |  |  |  | 91,516 |  |  |  | 81,129 |  |  |  | 79,821 |
Total assets |  | $ | 6,268,463 |  |  | $ | 6,550,607 |  |  | $ | 6,276,841 |  |  | $ | 6,169,302 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Demand and interest checking |  | $ | 4,734,352 |  |  | $ | 5,225,024 |  |  | $ | 5,205,010 |  |  | $ | 4,882,834 |
Savings and money market |  |  | 378,160 |  |  |  | 459,688 |  |  |  | 257,050 |  |  |  | 505,928 |
Total deposits |  |  | 5,112,512 |  |  |  | 5,684,712 |  |  |  | 5,462,060 |  |  |  | 5,388,762 |
Securities sold under agreements to repurchase |  |  | 42 |  |  |  | 42 |  |  |  | 42 |  |  |  | 42 |
Short-term borrowings |  |  | 300,000 |  |  |  | — |  |  |  | — |  |  |  | — |
Senior debt |  |  | 98,590 |  |  |  | 98,498 |  |  |  | 98,314 |  |  |  | 98,222 |
Subordinated debenture |  |  | 13,401 |  |  |  | 13,401 |  |  |  | 13,401 |  |  |  | 13,401 |
Other long-term borrowings |  |  | 39,715 |  |  |  | 39,901 |  |  |  | 40,277 |  |  |  | 40,462 |
Other liabilities |  |  | 66,226 |  |  |  | 94,944 |  |  |  | 81,583 |  |  |  | 69,954 |
Total liabilities |  | $ | 5,630,486 |  |  | $ | 5,931,498 |  |  | $ | 5,695,677 |  |  | $ | 5,610,843 |
Shareholders' equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common stock - authorized, 75,000,000 shares of $1.00 par value; 57,330,846 and 57,490,874 shares issued and outstanding at September 30, 2021 and 2020, respectively |  |  | 57,331 |  |  |  | 57,458 |  |  |  | 57,551 |  |  |  | 57,491 |
Additional paid-in capital |  |  | 357,528 |  |  |  | 363,241 |  |  |  | 377,452 |  |  |  | 375,985 |
Retained earnings |  |  | 212,114 |  |  |  | 183,853 |  |  |  | 128,453 |  |  |  | 104,282 |
Accumulated other comprehensive income |  |  | 11,004 |  |  |  | 14,557 |  |  |  | 17,708 |  |  |  | 20,701 |
Total shareholders' equity |  |  | 637,977 |  |  |  | 619,109 |  |  |  | 581,164 |  |  |  | 558,459 |
Total liabilities and shareholders' equity |  | $ | 6,268,463 |  |  | $ | 6,550,607 |  |  | $ | 6,276,841 |  |  | $ | 6,169,302 |

Note: Previous balance sheets included investment in unconsolidated entity, which reflected Bancorp’s balance of the Walnut Street investment. Walnut Street was comprised of Bancorp loans sold to that entity, which was partially financed by an independent investor. In the third quarter of 2021, The Bancorp and that investor dissolved the entity, as the remaining balance did not warrant ongoing administrative and accounting expenses. As a result of the dissolution, the investment in unconsolidated entity, which had a June 30, 2021 balance of $25.0 million, was reclassified as follows. Approximately $22.9 million of loans were reclassified to commercial loans, at fair value and $2.1 million was reclassified to other real estate owned, as those assets continue to be reported at fair value.

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Average balance sheet and net interest income |  | Three months ended September 30, 2021 |  | Three months ended September 30, 2020
|  | (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** |  | $ | 4,573,431 |  |  | $ | 46,357 |  |  |  | 4.05 | % |  | $ | 4,202,054 |  |  | $ | 44,318 |  |  |  | 4.22 | %
Leases-bank qualified* |  |  | 5,031 |  |  |  | 87 |  |  |  | 6.92 | % |  |  | 8,026 |  |  |  | 146 |  |  |  | 7.28 | %
Investment securities-taxable |  |  | 1,012,007 |  |  |  | 6,882 |  |  |  | 2.72 | % |  |  | 1,300,191 |  |  |  | 7,911 |  |  |  | 2.43 | %
Investment securities-nontaxable* |  |  | 3,558 |  |  |  | 32 |  |  |  | 3.60 | % |  |  | 4,041 |  |  |  | 35 |  |  |  | 3.46 | %
Interest earning deposits at Federal Reserve Bank |  |  | 479,350 |  |  |  | 167 |  |  |  | 0.14 | % |  |  | 413,259 |  |  |  | 106 |  |  |  | 0.10 | %
Net interest earning assets |  |  | 6,073,377 |  |  |  | 53,525 |  |  |  | 3.53 | % |  |  | 5,927,571 |  |  |  | 52,516 |  |  |  | 3.54 | %
Allowance for credit losses |  |  | (16,277 | ) |  |  |  |  |  |  |  |  |  |  | (14,587 | ) |  |  |  |  |  |  |  |
Assets held-for-sale from discontinued operations |  |  | 90,598 |  |  |  | 754 |  |  |  | 3.33 | % |  |  | 124,916 |  |  |  | 890 |  |  |  | 2.85 | %
Other assets |  |  | 214,715 |  |  |  |  |  |  |  |  |  |  |  | 195,125 |  |  |  |  |  |  |  |  |
|  | $ | 6,362,413 |  |  |  |  |  |  |  |  |  |  | $ | 6,233,025 |  |  |  |  |  |  |  |  |
Liabilities and Shareholders' Equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Demand and interest checking |  | $ | 5,124,189 |  |  | $ | 1,063 |  |  |  | 0.08 | % |  | $ | 5,079,711 |  |  | $ | 1,591 |  |  |  | 0.13 | %
Savings and money market |  |  | 404,775 |  |  |  | 146 |  |  |  | 0.14 | % |  |  | 484,323 |  |  |  | 139 |  |  |  | 0.11 | %
Total deposits |  |  | 5,528,964 |  |  |  | 1,209 |  |  |  | 0.09 | % |  |  | 5,564,034 |  |  |  | 1,730 |  |  |  | 0.12 | %
Short-term borrowings |  |  | 13,097 |  |  |  | 7 |  |  |  | 0.21 | % |  |  | 3,260 |  |  |  | 1 |  |  |  | 0.12 | %
Repurchase agreements |  |  | 41 |  |  |  | — |  |  |  | — |  |  |  | 41 |  |  |  | — |  |  |  | — |
Subordinated debentures |  |  | 13,401 |  |  |  | 112 |  |  |  | 3.34 | % |  |  | 13,401 |  |  |  | 118 |  |  |  | 3.52 | %
Senior debt |  |  | 100,329 |  |  |  | 1,279 |  |  |  | 5.10 | % |  |  | 53,260 |  |  |  | 633 |  |  |  | 4.75 | %
Total deposits and liabilities |  |  | 5,655,832 |  |  |  | 2,607 |  |  |  | 0.18 | % |  |  | 5,633,996 |  |  |  | 2,482 |  |  |  | 0.18 | %
Other liabilities |  |  | 78,038 |  |  |  |  |  |  |  |  |  |  |  | 53,260 |  |  |  |  |  |  |  |  |
Total liabilities |  |  | 5,733,870 |  |  |  |  |  |  |  |  |  |  |  | 5,687,256 |  |  |  |  |  |  |  |  |
Shareholders' equity |  |  | 628,543 |  |  |  |  |  |  |  |  |  |  |  | 545,769 |  |  |  |  |  |  |  |  |
|  | $ | 6,362,413 |  |  |  |  |  |  |  |  |  |  | $ | 6,233,025 |  |  |  |  |  |  |  |  |
Net interest income on tax equivalent basis* |  |  |  |  |  | $ | 51,672 |  |  |  |  |  |  |  |  |  |  | $ | 50,924 |  |  |  |  |
Tax equivalent adjustment |  |  |  |  |  |  | 25 |  |  |  |  |  |  |  |  |  |  |  | 38 |  |  |  |  |
Net interest income |  |  |  |  |  | $ | 51,647 |  |  |  |  |  |  |  |  |  |  | $ | 50,886 |  |  |  |  |
Net interest margin * |  |  |  |  |  |  |  |  |  |  | 3.35 | % |  |  |  |  |  |  |  |  |  |  | 3.37 | %

* Full taxable equivalent basis, using a statutory Federal tax rate of 21% for 2021 and 2020.

** Includes commercial loans, at fair value. All periods include non-accrual loans.

NOTE: In the table above, interest on loans for 2021 includes $1.2 million of interest and fees on PPP loans. In 2020 the table above includes comparable PPP interest and fees of $2.1 million.

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Average balance sheet and net interest income |  | Nine months ended September 30, 2021 |  | Nine months ended September 30, 2020
|  | (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** |  | $ | 4,541,262 |  |  | $ | 143,546 |  |  |  | 4.21 | % |  | $ | 3,798,104 |  |  | $ | 124,924 |  |  |  | 4.39 | %
Leases-bank qualified* |  |  | 5,925 |  |  |  | 301 |  |  |  | 6.77 | % |  |  | 9,401 |  |  |  | 509 |  |  |  | 7.22 | %
Investment securities-taxable |  |  | 1,094,633 |  |  |  | 22,891 |  |  |  | 2.79 | % |  |  | 1,343,211 |  |  |  | 28,594 |  |  |  | 2.84 | %
Investment securities-nontaxable* |  |  | 3,824 |  |  |  | 99 |  |  |  | 3.45 | % |  |  | 4,537 |  |  |  | 110 |  |  |  | 3.23 | %
Interest earning deposits at Federal Reserve Bank |  |  | 781,606 |  |  |  | 650 |  |  |  | 0.11 | % |  |  | 444,323 |  |  |  | 1,836 |  |  |  | 0.55 | %
Net interest earning assets |  |  | 6,427,250 |  |  |  | 167,487 |  |  |  | 3.47 | % |  |  | 5,599,576 |  |  |  | 155,973 |  |  |  | 3.71 | %
Allowance for credit losses |  |  | (16,254 | ) |  |  |  |  |  |  |  |  |  |  | (13,225 | ) |  |  |  |  |  |  |  |
Assets held for sale from discontinued operations |  |  | 99,472 |  |  |  | 2,388 |  |  |  | 3.20 | % |  |  | 130,880 |  |  |  | 3,259 |  |  |  | 3.32 | %
Other assets |  |  | 225,802 |  |  |  |  |  |  |  |  |  |  |  | 243,629 |  |  |  |  |  |  |  |  |
|  | $ | 6,736,270 |  |  |  |  |  |  |  |  |  |  | $ | 5,960,860 |  |  |  |  |  |  |  |  |
Liabilities and Shareholders' Equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Demand and interest checking |  | $ | 5,452,604 |  |  | $ | 4,007 |  |  |  | 0.10 | % |  | $ | 4,858,666 |  |  | $ | 9,676 |  |  |  | 0.27 | %
Savings and money market |  |  | 446,016 |  |  |  | 487 |  |  |  | 0.15 | % |  |  | 298,049 |  |  |  | 309 |  |  |  | 0.14 | %
Time deposits |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 106,113 |  |  |  | 1,483 |  |  |  | 1.86 | %
Total deposits |  |  | 5,898,620 |  |  |  | 4,494 |  |  |  | 0.10 | % |  |  | 5,262,828 |  |  |  | 11,468 |  |  |  | 0.29 | %
Short-term borrowings |  |  | 8,717 |  |  |  | 15 |  |  |  | 0.23 | % |  |  | 25,419 |  |  |  | 181 |  |  |  | 0.95 | %
Repurchase agreements |  |  | 41 |  |  |  | — |  |  |  | — |  |  |  | 51 |  |  |  | — |  |  |  | — |
Subordinated debentures |  |  | 13,401 |  |  |  | 337 |  |  |  | 3.35 | % |  |  | 13,401 |  |  |  | 408 |  |  |  | 4.06 | %
Senior debt |  |  | 100,237 |  |  |  | 3,838 |  |  |  | 5.11 | % |  |  | 17,883 |  |  |  | 633 |  |  |  | 4.72 | %
Total deposits and liabilities |  |  | 6,021,016 |  |  |  | 8,684 |  |  |  | 0.19 | % |  |  | 5,319,582 |  |  |  | 12,690 |  |  |  | 0.32 | %
Other liabilities |  |  | 105,683 |  |  |  |  |  |  |  |  |  |  |  | 119,961 |  |  |  |  |  |  |  |  |
Total liabilities |  |  | 6,126,699 |  |  |  |  |  |  |  |  |  |  |  | 5,439,543 |  |  |  |  |  |  |  |  |
Shareholders' equity |  |  | 609,571 |  |  |  |  |  |  |  |  |  |  |  | 521,317 |  |  |  |  |  |  |  |  |
|  | $ | 6,736,270 |  |  |  |  |  |  |  |  |  |  | $ | 5,960,860 |  |  |  |  |  |  |  |  |
Net interest income on tax equivalent basis* |  |  |  |  |  | $ | 161,191 |  |  |  |  |  |  |  |  |  |  | $ | 146,542 |  |  |  |  |
Tax equivalent adjustment |  |  |  |  |  |  | 84 |  |  |  |  |  |  |  |  |  |  |  | 130 |  |  |  |  |
Net interest income |  |  |  |  |  | $ | 161,107 |  |  |  |  |  |  |  |  |  |  | $ | 146,412 |  |  |  |  |
Net interest margin * |  |  |  |  |  |  |  |  |  |  | 3.29 | % |  |  |  |  |  |  |  |  |  |  | 3.41 | %

* Full taxable equivalent basis, using a statutory Federal tax rate of 21% for 2021 and 2020.

** Includes commercial loans, at fair value. All periods include non-accrual loans.

NOTE: In the table above, the 2021 interest on loans reflects $4.6 million of interest and fees which were earned on a short-term line of credit to another institution to initially fund PPP loans, which did not significantly increase average loans or assets and which are not expected to recur. Interest on loans in 2021 also includes $4.9 million of interest and fees on PPP loans. In 2020 the table above includes comparable PPP interest and fees of $3.7 million. Increases in interest earning deposits at the Federal Reserve Bank reflect increased deposits resulting from stimulus payments distributed to a large segment of the population, resulting from December 2020 federal legislation.

7

Allowance for credit losses |  | Nine months ended |  | Year ended
|  | September 30, |  | September 30, |  | December 31,
|  | 2021 (unaudited) |  | 2020 (unaudited) |  | 2020
|  | (dollars in thousands)
Balance in the allowance for credit losses at beginning of period (1) |  | $ | 16,082 |  |  | $ | 12,875 |  |  | $ | 12,875 |
Loans charged-off: |  |  |  |  |  |  |  |  |  |  |  |
SBA non-real estate |  |  | 896 |  |  |  | 1,350 |  |  |  | 1,350 |
SBA commercial mortgage |  |  | 23 |  |  |  | — |  |  |  | — |
Direct lease financing |  |  | 248 |  |  |  | 2,178 |  |  |  | 2,243 |
SBLOC |  |  | 15 |  |  |  | — |  |  |  | — |
Consumer - home equity |  |  | 10 |  |  |  | — |  |  |  | — |
Total |  |  | 1,192 |  |  |  | 3,528 |  |  |  | 3,593 |
Recoveries: |  |  |  |  |  |  |  |  |  |  |  |
SBA non-real estate |  |  | 18 |  |  |  | 82 |  |  |  | 103 |
SBA commercial mortgage |  |  | 9 |  |  |  | — |  |  |  | — |
Direct lease financing |  |  | 50 |  |  |  | 502 |  |  |  | 570 |
Total |  |  | 77 |  |  |  | 584 |  |  |  | 673 |
Net charge-offs |  |  | 1,115 |  |  |  | 2,944 |  |  |  | 2,920 |
Provision credited to allowance, excluding commitment provision |  |  | 1,192 |  |  |  | 5,796 |  |  |  | 6,127 |
Balance in allowance for credit losses at end of period |  | $ | 16,159 |  |  | $ | 15,727 |  |  | $ | 16,082 |
Net charge-offs/average loans |  |  | 0.04 | % |  |  | 0.08 | % |  |  | 0.07 | %
Net charge-offs/average assets |  |  | 0.02 | % |  |  | 0.05 | % |  |  | 0.05 | %

(1) Excludes activity from assets held-for-sale from discontinued operations.

8

Loan portfolio |  | September 30, |  | June 30, |  | December 31, |  | September 30,
|  | 2021 |  | 2021 |  | 2020 |  | 2020
|  | (in thousands)
SBL non-real estate |  | $ | 171,845 |  |  | $ | 228,958 |  |  | $ | 255,318 |  |  | $ | 293,488 |
SBL commercial mortgage |  |  | 367,272 |  |  |  | 343,487 |  |  |  | 300,817 |  |  |  | 270,264 |
SBL construction |  |  | 23,117 |  |  |  | 18,494 |  |  |  | 20,273 |  |  |  | 27,169 |
Small business loans * |  |  | 562,234 |  |  |  | 590,939 |  |  |  | 576,408 |  |  |  | 590,921 |
Direct lease financing |  |  | 514,068 |  |  |  | 506,424 |  |  |  | 462,182 |  |  |  | 430,675 |
SBLOC / IBLOC** |  |  | 1,834,523 |  |  |  | 1,729,628 |  |  |  | 1,550,086 |  |  |  | 1,428,253 |
Advisor financing *** |  |  | 81,143 |  |  |  | 72,190 |  |  |  | 48,282 |  |  |  | 26,600 |
Real estate bridge lending |  |  | 128,699 |  |  |  | — |  |  |  | — |  |  |  | — |
Other loans **** |  |  | 4,917 |  |  |  | 5,840 |  |  |  | 6,426 |  |  |  | 6,003 |
|  |  | 3,125,584 |  |  |  | 2,905,021 |  |  |  | 2,643,384 |  |  |  | 2,482,452 |
Unamortized loan fees and costs |  |  | 11,078 |  |  |  | 10,323 |  |  |  | 8,939 |  |  |  | 6,308 |
Total loans, net of unamortized fees and costs |  | $ | 3,136,662 |  |  | $ | 2,915,344 |  |  | $ | 2,652,323 |  |  | $ | 2,488,760 |

Small business portfolio |  | September 30, |  | June 30, |  | December 31, |  | September 30,
|  | 2021 |  | 2021 |  | 2020 |  | 2020
|  | (in thousands)
SBL, including unamortized fees and costs |  | $ | 566,472 |  |  | $ | 593,401 |  |  | $ | 577,944 |  |  | $ | 590,314 |
SBL, included in commercial loans, at fair value |  |  | 214,301 |  |  |  | 225,534 |  |  |  | 243,562 |  |  |  | 250,958 |
Total small business loans |  | $ | 780,773 |  |  | $ | 818,935 |  |  | $ | 821,506 |  |  | $ | 841,272 |

* The preceding table shows small business loans and small business loans held at fair value. The small business loans held at fair value are comprised of the government guaranteed portion of SBA 7a loans at the dates indicated. A reduction in SBL non-real estate loans from $229.0 million at June 30, 2021 to $171.8 million at September 30, 2021 resulted from U.S. government repayments of $58.2 million of PPP loans authorized by The Consolidated Appropriations Act, 2021. PPP loans totaled $71.3 million at September 30, 2021 and $165.7 million at December 31, 2020, respectively.

** Securities Backed Lines of Credit, or SBLOC, are collateralized by marketable securities, while Insurance Backed Lines of Credit, or IBLOC, are collateralized by the cash surrender value of insurance policies.

*** In 2020, we began originating loans to investment advisors for purposes of debt refinance, acquisition of another firm or internal succession. Maximum loan amounts are subject to loan-to-value ratios of 70%, based on third-party business appraisals, but may be increased depending upon the debt service coverage ratio. Personal guarantees and blanket business liens are obtained as appropriate.

**** Included in the table above under Other loans are demand deposit overdrafts reclassified as loan balances totaling $272,000 and $663,000 at September 30, 2021 and December 31, 2020, respectively. Estimated overdraft charge-offs and recoveries are reflected in the allowance for credit losses and have been immaterial.

Small business loans as of September 30, 2021

|  | Loan principal
|  | (in millions)
U.S. government guaranteed portion of SBA loans (a) |  | $ | 370 |
Paycheck Protection Program loans (PPP) (a) |  |  | 71 |
Commercial mortgage SBA (b) |  |  | 195 |
Construction SBA (c) |  |  | 13 |
Non-guaranteed portion of U.S. government guaranteed 7a loans (d) |  |  | 104 |
Non-SBA small business loans (e) |  |  | 18 |
Total principal |  | $ | 771 |
Unamortized fees and costs |  |  | 10 |
Total small business loans |  | $ | 781 |

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

(b) Substantially all these loans are made under the SBA 504 Fixed Asset Financing program (504) which dictates origination date loan-to-value percentages (“LTV”), generally 50-60%, to which the Bank adheres.

(c) Of the $13 million in Construction SBA loans, $11 million are 504 first mortgages with an origination date LTV of 50-60% and $2 million are SBA interim loans with an approved SBA post-construction full takeout/payoff.

(d) The $104 million represents the non-guaranteed portion of 7a loans which are 70% or more guaranteed by the U.S. government. 7a 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 7a and 504 loans require the personal guaranty of all 20% or greater owners.

(e) The $18 million of non-SBA loans is comprised of approximately 20 conventional coffee/doughnut/carryout franchisee note purchases. The majority of purchased notes were made to multi-unit operators, are considered seasoned and have performed as agreed.

9

Small business loans by type as of September 30, 2021

(Excludes government guaranteed portion of SBA 7a loans and PPP loans)

|  | SBL commercial mortgage* |  | SBL construction* |  | SBL non-real estate |  | Total |  | % Total
|  | (in millions)
Hotels and motels |  | $ | 67 |  |  | $ | 4 |  |  | $ | — |  |  | $ | 71 |  |  |  | 21 | %
Full-service restaurants |  |  | 16 |  |  |  | 1 |  |  |  | 3 |  |  |  | 20 |  |  |  | 6 | %
Baked goods stores |  |  | 4 |  |  |  | — |  |  |  | 11 |  |  |  | 15 |  |  |  | 5 | %
Child day care services |  |  | 14 |  |  |  | — |  |  |  | 1 |  |  |  | 15 |  |  |  | 5 | %
Car washes |  |  | 10 |  |  |  | 2 |  |  |  | — |  |  |  | 12 |  |  |  | 4 | %
Lessors of nonresidential buildings (except miniwarehouses) |  |  | 10 |  |  |  | — |  |  |  | — |  |  |  | 10 |  |  |  | 3 | %
Assisted living facilities for the elderly |  |  | 10 |  |  |  | — |  |  |  | — |  |  |  | 10 |  |  |  | 3 | %
Offices of lawyers |  |  | 9 |  |  |  | — |  |  |  | — |  |  |  | 9 |  |  |  | 3 | %
Funeral homes and funeral services |  |  | 9 |  |  |  | — |  |  |  | — |  |  |  | 9 |  |  |  | 3 | %
General warehousing and storage |  |  | 7 |  |  |  | — |  |  |  | — |  |  |  | 7 |  |  |  | 2 | %
Limited-service restaurants |  |  | 2 |  |  |  | 1 |  |  |  | 3 |  |  |  | 6 |  |  |  | 2 | %
Fitness and recreational sports centers |  |  | — |  |  |  | 4 |  |  |  | 2 |  |  |  | 6 |  |  |  | 2 | %
Amusement and recreation industries |  |  | 5 |  |  |  | — |  |  |  | 1 |  |  |  | 6 |  |  |  | 2 | %
Outpatient mental health and substance abuse centers |  |  | 5 |  |  |  | — |  |  |  | — |  |  |  | 5 |  |  |  | 1 | %
Spectator sports |  |  | 5 |  |  |  | — |  |  |  | — |  |  |  | 5 |  |  |  | 1 | %
Perishable prepared food manufacturing |  |  | 5 |  |  |  | — |  |  |  | — |  |  |  | 5 |  |  |  | 1 | %
Gasoline stations with convenience stores |  |  | 5 |  |  |  | — |  |  |  | — |  |  |  | 5 |  |  |  | 1 | %
Offices of dentists |  |  | 3 |  |  |  | — |  |  |  | — |  |  |  | 3 |  |  |  | 1 | %
Warehousing and storage |  |  | 3 |  |  |  | — |  |  |  | — |  |  |  | 3 |  |  |  | 1 | %
New car dealers |  |  | 3 |  |  |  | — |  |  |  | — |  |  |  | 3 |  |  |  | 1 | %
Miscellaneous wood product manufacturing |  |  | 3 |  |  |  | — |  |  |  | — |  |  |  | 3 |  |  |  | 1 | %
Plumbing, heating, and air-conditioning contractors |  |  | 3 |  |  |  | — |  |  |  | — |  |  |  | 3 |  |  |  | 1 | %
Offices of physicians (except mental health specialists) |  |  | 3 |  |  |  | — |  |  |  | — |  |  |  | 3 |  |  |  | 1 | %
Technical and trade schools |  |  | — |  |  |  | 3 |  |  |  | — |  |  |  | 3 |  |  |  | 1 | %
General purpose machinery manufacturing |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | 2 |  |  |  | 1 | %
Pet care (except veterinary) services |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | 2 |  |  |  | 1 | %
Landscaping services |  |  | 1 |  |  |  | — |  |  |  | 2 |  |  |  | 3 |  |  |  | 1 | %
Sewing, needlework, and piece goods stores |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | 2 |  |  |  | 1 | %
Automotive body, paint, and interior repair and maintenance |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | 2 |  |  |  | 1 | %
Vocational rehabilitation services |  |  | 2 |  |  |  | — |  |  |  | 2 |  |  |  | 4 |  |  |  | 1 | %
Amusement arcades |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | 2 |  |  |  | 1 | %
Lessors of real estate property |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | 2 |  |  |  | 1 | %
Other** |  |  | 49 |  |  |  | 1 |  |  |  | 25 |  |  |  | 75 |  |  |  | 20 | %
Total |  | $ | 265 |  |  | $ | 16 |  |  | $ | 50 |  |  | $ | 331 |  |  |  | 100 | %

* Of the SBL commercial mortgage and SBL construction loans, $62 million represents the total of the non-guaranteed portion of SBA 7a loans and non-SBA loans. The balance of those categories represents SBA 504 loans with 50%-60% origination date loan-to-values.

**Loan types less than $2 million are spread over a hundred different classifications such as Commercial Printing, Pet and Pet Supplies Stores, Securities Brokerage, etc.

10

State diversification as of September 30, 2021

(Excludes government guaranteed portion of SBA 7a loans and PPP loans)

|  | SBL commercial mortgage* |  | SBL construction* |  | SBL non-real estate |  | Total |  | % Total
|  | (in millions)
Florida |  | $ | 56 |  |  | $ | — |  |  | $ | 8 |  |  | $ | 64 |  |  |  | 19 | %
California |  |  | 42 |  |  |  | 1 |  |  |  | 4 |  |  |  | 47 |  |  |  | 14 | %
North Carolina |  |  | 23 |  |  |  | 2 |  |  |  | 3 |  |  |  | 28 |  |  |  | 9 | %
Pennsylvania |  |  | 23 |  |  |  | 4 |  |  |  | 3 |  |  |  | 30 |  |  |  | 8 | %
Illinois |  |  | 22 |  |  |  | — |  |  |  | 3 |  |  |  | 25 |  |  |  | 8 | %
New York |  |  | 14 |  |  |  | 4 |  |  |  | 3 |  |  |  | 21 |  |  |  | 6 | %
New Jersey |  |  | 12 |  |  |  | — |  |  |  | 6 |  |  |  | 18 |  |  |  | 6 | %
Texas |  |  | 12 |  |  |  | — |  |  |  | 4 |  |  |  | 16 |  |  |  | 5 | %
Virginia |  |  | 9 |  |  |  | — |  |  |  | 2 |  |  |  | 11 |  |  |  | 3 | %
Tennessee |  |  | 10 |  |  |  | — |  |  |  | — |  |  |  | 10 |  |  |  | 3 | %
Colorado |  |  | 3 |  |  |  | 5 |  |  |  | 2 |  |  |  | 10 |  |  |  | 3 | %
Georgia |  |  | 7 |  |  |  | — |  |  |  | 2 |  |  |  | 9 |  |  |  | 3 | %
Michigan |  |  | 4 |  |  |  | — |  |  |  | 1 |  |  |  | 5 |  |  |  | 2 | %
Washington |  |  | 3 |  |  |  | — |  |  |  | — |  |  |  | 3 |  |  |  | 1 | %
Ohio |  |  | 3 |  |  |  | — |  |  |  | — |  |  |  | 3 |  |  |  | 1 | %
Other states |  |  | 22 |  |  |  | — |  |  |  | 9 |  |  |  | 31 |  |  |  | 9 | %
Total |  | $ | 265 |  |  | $ | 16 |  |  | $ | 50 |  |  | $ | 331 |  |  |  | 100 | %

* Of the SBL commercial mortgage and SBL construction loans, $62 million represents the total of the non-guaranteed portion of SBA 7a loans and non-SBA loans. The balance of those categories represents SBA 504 loans with 50%-60% origination date loan-to-values.

Top 10 loans as of September 30, 2021

Type* |  | State |  | SBL commercial mortgage*
|  | (in millions)
Hotel |  | FL |  | $ | 9 |
Lawyer's office |  | CA |  |  | 9 |
Warehouse |  | PA |  |  | 7 |
Hotel |  | NC |  |  | 6 |
Assisted living facility |  | FL |  |  | 5 |
Mental health and substance abuse centers |  | FL |  |  | 5 |
Hotel |  | NC |  |  | 5 |
Prepared food manufacturing |  | NJ |  |  | 4 |
Hotel |  | PA |  |  | 4 |
Hotel |  | TN |  |  | 4 |
Total |  |  |  | $ | 58 |

* All the top 10 loans are 504 SBA loans with 50%-60% origination date loan-to-value and are in the commercial mortgage category. The top 10 loan table above does not include loans to the extent that they are U.S. government guaranteed.

11

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

Type as of September 30, 2021

Type |  | # Loans |  | Balance |  | Weighted average origination date LTV |  | Weighted average interest rate
|  | (dollars in millions)
Real estate bridge lending (multi-family apartments)* |  |  | 15 |  |  | $ | 129 |  |  |  | 75 | % |  |  | 4.22 | %
Commercial real estate loans, at fair value: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Multi-family (apartments)* |  |  | 115 |  |  | $ | 1,193 |  |  |  | 76 | % |  |  | 4.75 | %
Hospitality (hotels and lodging) |  |  | 9 |  |  |  | 66 |  |  |  | 65 | % |  |  | 5.69 | %
Retail |  |  | 6 |  |  |  | 61 |  |  |  | 71 | % |  |  | 4.33 | %
Other |  |  | 8 |  |  |  | 21 |  |  |  | 73 | % |  |  | 5.16 | %
|  |  | 138 |  |  |  | 1,341 |  |  |  | 75 | % |  |  | 4.78 | %
Fair value adjustment |  |  |  |  |  |  | (6 | ) |  |  |  |  |  |  |  |
Total commercial real estate loans, at fair value |  |  |  |  |  |  | 1,335 |  |  |  |  |  |  |  |  |
Total commercial real estate loans |  |  |  |  |  | $ | 1,464 |  |  |  | 75 | % |  |  | 4.75 | %

*In the third quarter of 2021, we recommenced the origination of multi-family apartment loans. These are similar to the multi-family apartment loans carried at fair value, but at origination are intended to be held on the balance sheet, so are not accounted for at fair value.

State diversification as of September 30, 2021 |  |  | 15 largest loans (all multi-family) as of September 30, 2021
State |  |  | Balance |  |  | Origination date LTV |  |  | State |  |  |  | Balance |  | Origination date LTV
(in millions) |  |  | (in millions)
Texas |  | $ | 459 |  |  | 77% |  |  | North Carolina |  |  | $ | 44 |  | 78%
Georgia |  |  | 193 |  |  | 76% |  |  | Texas |  |  |  | 39 |  | 79%
Arizona |  |  | 79 |  |  | 75% |  |  | Texas |  |  |  | 36 |  | 80%
North Carolina |  |  | 79 |  |  | 77% |  |  | Missouri |  |  |  | 30 |  | 72%
Ohio |  |  | 58 |  |  | 69% |  |  | Texas |  |  |  | 30 |  | 75%
Alabama |  |  | 57 |  |  | 76% |  |  | Nevada |  |  |  | 29 |  | 80%
Virginia |  |  | 57 |  |  | 73% |  |  | Texas |  |  |  | 27 |  | 77%
Other states each <$55 million |  |  | 482 |  |  | 73% |  |  | Arizona |  |  |  | 27 |  | 79%
Total |  | $ | 1,464 |  |  | 75% |  |  | Mississippi |  |  |  | 27 |  | 79%
|  |  |  |  |  |  |  |  | North Carolina |  |  |  | 25 |  | 77%
|  |  |  |  |  |  |  |  | Texas |  |  |  | 25 |  | 77%
|  |  |  |  |  |  |  |  | Texas |  |  |  | 24 |  | 77%
|  |  |  |  |  |  |  |  | Alabama |  |  |  | 23 |  | 77%
|  |  |  |  |  |  |  |  | Texas |  |  |  | 21 |  | 79%
|  |  |  |  |  |  |  |  | Georgia |  |  |  | 20 |  | 79%
|  |  |  |  |  |  |  |  | 15 Largest loans |  |  | $ | 427 |  | 78%

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Institutional banking loans outstanding at September 30, 2021

Type |  | Principal |  | % of total
|  |  | (in millions) |  |  |  |  |
Securities backed lines of credit (SBLOC) |  | $ | 1,148 |  |  |  | 60 | %
Insurance backed lines of credit (IBLOC) |  |  | 687 |  |  |  | 36 | %
Advisor financing |  |  | 81 |  |  |  | 4 | %
Total |  | $ | 1,916 |  |  |  | 100 | %

For SBLOC, we generally lend up to 50% of the value of equities and 80% for investment grade securities. While equities have fallen in excess of 30% in recent years, the reduction in collateral value of brokerage accounts collateralizing SBLOCs 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. Secondly, 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 September 30, 2021

| Principal amount |  | % Principal to collateral
| (in millions)
| $ | 19 |  | 65%
|  | 17 |  | 37%
|  | 14 |  | 27%
|  | 12 |  | 29%
|  | 9 |  | 33%
|  | 9 |  | 36%
|  | 9 |  | 53%
|  | 8 |  | 71%
|  | 8 |  | 23%
|  | 8 |  | 46%
Total and weighted average | $ | 113 |  | 43%

Insurance backed lines of credit (IBLOC)

IBLOC loans are backed by the cash value of life insurance policies which have been assigned to us. We lend up to 100% of such cash value. Our underwriting standards require approval of the insurance companies which carry the policies backing these loans. Currently, seven insurance companies have been approved and, as of August 14, 2021, all were rated Superior (A+ or better) by AM BEST.

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Direct lease financing* by type as of September 30, 2021

| Principal balance |  | % Total
| (in millions) |  |
Construction | $ | 95 |  | 18%
Government agencies and public institutions** |  | 77 |  | 15%
Waste management and remediation services |  | 64 |  | 12%
Real estate and rental and leasing |  | 56 |  | 11%
Retail trade |  | 47 |  | 9%
Wholesale purchase |  | 34 |  | 7%
Transportation and warehousing |  | 29 |  | 6%
Health care and social assistance |  | 26 |  | 5%
Professional, scientific, and technical services |  | 19 |  | 4%
Manufacturing |  | 16 |  | 3%
Wholesale trade |  | 14 |  | 3%
Educational services |  | 8 |  | 2%
Other |  | 29 |  | 5%
Total | $ | 514 |  | 100%

* Of the total $514 million of direct lease financing, $464 million consisted of vehicle leases with the remaining balance consisting of equipment leases.

** Includes public universities and school districts.

Direct lease financing by state as of September 30, 2021

State | Principal balance |  | % Total
| (in millions) |  |
Florida | $ | 93 |  | 18%
California |  | 48 |  | 9%
New Jersey |  | 39 |  | 8%
Utah |  | 35 |  | 7%
New York |  | 33 |  | 6%
Pennsylvania |  | 32 |  | 6%
Maryland |  | 25 |  | 5%
North Carolina |  | 25 |  | 5%
Texas |  | 19 |  | 4%
Connecticut |  | 16 |  | 3%
Washington |  | 15 |  | 3%
Georgia |  | 12 |  | 2%
Idaho |  | 11 |  | 2%
Tennessee |  | 10 |  | 2%
Alabama |  | 9 |  | 2%
Other states |  | 92 |  | 18%
Total | $ | 514 |  | 100%

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Capital ratios |  | Tier 1 capital to average assets ratio |  | Tier 1 capital to risk-weighted assets ratio |  | Total capital to risk-weighted assets ratio |  | Common equity tier 1 to risk weighted assets
As of September 30, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
The Bancorp, Inc. |  |  | 9.82 | % |  |  | 15.69 | % |  |  | 16.10 | % |  |  | 15.69 | %
The Bancorp Bank |  |  | 10.24 | % |  |  | 16.29 | % |  |  | 16.69 | % |  |  | 16.29 | %
"Well capitalized" institution (under FDIC regulations-Basel III) |  |  | 5.00 | % |  |  | 8.00 | % |  |  | 10.00 | % |  |  | 6.50 | %
As of December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
The Bancorp, Inc. |  |  | 9.20 | % |  |  | 14.43 | % |  |  | 14.84 | % |  |  | 14.43 | %
The Bancorp Bank |  |  | 9.11 | % |  |  | 14.27 | % |  |  | 14.68 | % |  |  | 14.27 | %
"Well capitalized" institution (under FDIC regulations-Basel III) |  |  | 5.00 | % |  |  | 8.00 | % |  |  | 10.00 | % |  |  | 6.50 | %

|  | Three months ended |  | Nine months ended
|  | September 30, |  | September 30,
|  | 2021 |  | 2020 |  | 2021 |  | 2020
Selected operating ratios |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Return on average assets (1) |  |  | 1.76 | % |  |  | 1.48 | % |  |  | 1.66 | % |  |  | 1.25 | %
Return on average equity (1) |  |  | 17.84 | % |  |  | 16.90 | % |  |  | 18.35 | % |  |  | 14.29 | %
Net interest margin |  |  | 3.35 | % |  |  | 3.37 | % |  |  | 3.29 | % |  |  | 3.41 | %

(1) Annualized

Book value per share table |  | September 30, |  | June 30, |  | December 31, |  | September 30,
|  | 2021 |  | 2021 |  | 2020 |  | 2020
Book value per share |  | $ | 11.13 |  |  | $ | 10.77 |  |  | $ | 10.10 |  |  | $ | 9.71 |

Loan quality table |  | September 30, |  | June 30, |  | December 31, |  | September 30,
|  | 2021 |  | 2021 |  | 2020 |  | 2020
|  | (dollars in thousands)
Nonperforming loans to total loans |  |  | 0.24 | % |  |  | 0.31 | % |  |  | 0.48 | % |  |  | 0.49 | %
Nonperforming assets to total assets |  |  | 0.16 | % |  |  | 0.14 | % |  |  | 0.20 | % |  |  | 0.20 | %
Allowance for credit losses to total loans |  |  | 0.52 | % |  |  | 0.52 | % |  |  | 0.61 | % |  |  | 0.63 | %
Nonaccrual loans |  | $ | 6,106 |  |  | $ | 7,346 |  |  | $ | 12,227 |  |  | $ | 12,275 |
Loans 90 days past due still accruing interest |  |  | 1,569 |  |  |  | 1,550 |  |  |  | 497 |  |  |  | 24 |
Other real estate owned |  |  | 2,145 |  |  |  | — |  |  |  | — |  |  |  | — |
Total nonperforming assets |  | $ | 9,820 |  |  | $ | 8,896 |  |  | $ | 12,724 |  |  | $ | 12,299 |

Gross dollar volume (GDV) (1) |  | Three months ended
|  | September 30, |  | June 30, |  | December 31, |  | September 30,
|  | 2021 |  | 2021 |  | 2020 |  | 2020
|  | (in thousands)
Prepaid and debit card GDV |  | $ | 24,392,188 |  |  | $ | 27,106,763 |  |  | $ | 22,523,855 |  |  | $ | 23,963,508 |

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

15

Business line quarterly summary |
Quarter ended September 30, 2021 |
(dollars in millions) |
|  |  |  | Balances |  |  |  |  |
|  |  |  |  |  | % Growth |  |  |  |  |
Major business lines |  | Average approximate rates * |  | Balances ** |  | Year over year |  | Linked quarter annualized |  |  |  |  |
Loans |  |  |  |  |  |  |  |  |  |  |  |  |
Institutional banking *** |  | 2.6% |  | $ 1,916 |  | 32% |  | 25% |  |  |  |  |
Small business lending**** |  | 5.0% |  | 781 |  | 12% |  | 12% |  |  |  |  |
Leasing |  | 5.9% |  | 514 |  | 19% |  | 6% |  |  |  |  |
Commercial real estate (non-SBA at fair value) |  | 4.7% |  | 1,335 |  | nm |  | nm |  |  |  |  |
Real estate bridge lending |  | 4.2% |  | 129 |  | nm |  | nm |  |  |  |  |
Weighted average yield |  | 4.0% |  | $ 4,675 |  |  |  |  |  | Non-interest income
|  |  |  |  |  |  |  |  |  |  |  | % Growth
Deposits: Fintech solutions group |  |  |  |  |  |  |  |  |  | Current quarter |  | Year over year |
Prepaid and debit card issuance, and other payments | 0.1% |  | $ 5,146 |  | 6% |  | nm |  | $ 20.1 |  | (5%) |

* Average rates are for the quarter ended September 30, 2021.

** Loan and deposit categories are respectively based on period-end and average quarterly balances.

*** Institutional Banking loans are comprised of security backed lines of credit (SBLOC), collateralized by marketable securities, insurance backed lines of credit (IBLOC), collateralized by the cash surrender value of insurance policies, and investment advisor financing.

**** Small Business Lending is substantially comprised of SBA loans. Loan growth percentages exclude short-term PPP loans.

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Dissolution of Walnut Street

Previous press releases included tables related to the Walnut Street investment, shown as investment in unconsolidated entity on the balance sheet. Walnut Street was comprised of Bancorp loans sold to that entity, which was partially financed by an independent investor. In the third quarter of 2021, The Bancorp and that investor dissolved the entity, as the remaining balance did not warrant ongoing administrative and accounting expenses. As a result of the dissolution, the investment in unconsolidated entity, which had a June 30, 2021 balance of $25.0 million, was reclassified as follows. Approximately $22.9 million of loans were reclassified to commercial loans, at fair value and $2.1 million was reclassified to other real estate owned, as those assets continue to be reported at fair value.

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Quarterly activity for commercial loan discontinued principal

|  | Commercial
|  | loan principal
|  |  | (in millions) |
Commercial loan discontinued principal June 30, 2021 before marks |  | $ | 53 |
Quarterly paydowns and other reductions |  |  | (5 | )
Commercial loan discontinued principal September 30, 2021 before marks |  |  | 48 |
Marks September 30, 2021 |  |  | (3 | )
Net commercial loan exposure September 30, 2021 |  |  | 45 |
Residential mortgages |  |  | 25 |
Net loans |  |  | 70 |
Florida mall in other real estate owned |  |  | 15 |
3 properties in other real estate owned |  |  | 3 |
Total discontinued assets at September 30, 2021 |  | $ | 88 |

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Discontinued commercial loan composition as of September 30, 2021

Collateral type |  | Unpaid principal balance |  | Mark at September 30, 2021 |  | Mark as % of portfolio
|  | (in millions)
Commercial real estate - non-owner occupied: |  |  |  |  |  |  |  |  |  |  |  |
Retail |  | $ | 4 |  |  | $ | (0.6 | ) |  |  | 15 | %
Office |  |  | 2 |  |  |  | — |  |  |  | — |
Other |  |  | 18 |  |  |  | (0.1 | ) |  |  | 1 | %
Construction and land |  |  | 9 |  |  |  | (0.1 | ) |  |  | 1 | %
Commercial non-real estate and industrial |  |  | 2 |  |  |  | (0.1 | ) |  |  | 5 | %
1 to 4 family construction |  |  | 5 |  |  |  | (2.3 | ) |  |  | 46 | %
First mortgage residential non-owner occupied |  |  | 4 |  |  |  | — |  |  |  | — |
Commercial real estate owner occupied: |  |  |  |  |  |  |  |  |  |  |  |
Retail |  |  | 2 |  |  |  | — |  |  |  | — |
Residential junior mortgage |  |  | 1 |  |  |  | — |  |  |  | — |
Other |  |  | 1 |  |  |  | — |  |  |  | — |
Total |  | $ | 48 |  |  | $ | (3.2 | ) |  |  | 7 | %
Less: mark |  |  | (3 | ) |  |  |  |  |  |  |  |
Net commercial loan exposure September 30, 2021 |  | $ | 45 |  |  | $ | (3.2 | ) |  |  |  |

Loan payment deferrals related to Covid-19

Total non-U.S. guaranteed loan balances for borrowers with Covid-19 payment deferrals amounted to $1.3 million as of September 30, 2021.

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