The Bancorp, Inc. · NASDAQ:TBBK
The Bancorp — Bancorp — Investor Presentation (October 2023)
34 slides from The Bancorp's investor presentation, Oct 26, 2023
Slide 1: The Bancorp Investor Presentation October 2023
O C T O B ER 2023 THE BANCORP INVESTOR PRESENTATION
Slide 2: Forward Looking Statements & Other Disclosures
2 FORWARD LOOKING STATEMENTS & OTHER DISCLOSURES D I S C L O S U R E S Statements in this presentation regarding The Bancorp, Inc.’s (“The Bancorp”) business that are not historical facts or concern our earnings guidance or 2030 plan are “forward - looking statements”. These statements may be identi
Slide 3: The Bancorp Has Delivered Strong Financial Performance
3 THE BANCORP HAS DELIVERED S TRONG FINANCIAL PERFORMANCE KEY FINANCIAL METRICS F I N A N C I A L P E R F O R M A N C E SUSTAINED PERFORMANCE The Bancorp is continuing to deliver high quality financial performance across key financial metrics 1 Please see Appendix slide 33 for reconciliation of reve
Slide 4: Business Plan Outlines Path to Expand Leadership; Earnings Guidance
4 OUR BUSINESS PLAN OUTLINES THE PATH TO EXPAND OUR LEADERSHIP AMONG PEER BANKS AND IN THE PAYMENTS INDUSTRY $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 2020 2021 2022 2023 Guidance 2024 Preliminary Guidance EARNINGS PER SHARE E A R N I N G S G U I D A N C E GUIDANCE Our 2024 prelimi
Slide 5: Recognized Performance: Industry Leadership
5 FINANCIAL INDUSTRY LEADER FORTUNE 100 FASTEST GROWING COMPANY RANKED #28 OCT. 2020 FORUM OF EXECUTIVE WOMEN Champion of Board Diversity Honoree OCT . 2022 & 2023 IPA CONSUMER CHAMPION APR. 2021 NILSON REPORT RANKED #1 PREPAID CARD ISSUER APRIL 2023 EQUAL OPPORTUNITY PUBLICATION TOP EMPLOYER READER
Slide 6: Fintech Leadership: Key Player in the Payments Ecosystem
6 FINTECH LEADERSHIP THE BANCORP IS A KEY PLAYER IN THE PAYMENTS ECOSYSTEM FINTECH ECOSYSTEM Enabling fintech companies by providing industry leading card issuing, payments facilitation and regulatory expertise to a diversified portfolio of clients PAYMENT NETWORKS FACILITATE payments between partie
Slide 7: Specialized Lending Business Lines and Credit Roadmap
7 SPECIALIZED LENDING BUSINESS LINES AND CREDIT ROADMAP Emphasis on core business lines with expectation to add related products and enter adjacent markets Expand commercial real estate bridge lending business with focus on multi - family assets Remain positioned to capitalize on credit - linked pay
Slide 8: Our Strategic Positioning Should Drive Earnings and Profitability
8 OUR STRATEGIC POSITIONING SHOULD DRIVE EARNINGS AND PROFITABILITY HIGHLIGHTS Our platform can deliver growth from our specialized lending activities while remaining positioned to capitalize on new and higher - growth fintech partnerships SPECIALIZED COMMERCIAL BANKS Efficient platforms Products in
Slide 9: Financial Targets
9 FINANCIAL TARGETS We have amended our Vision 500 to include enhanced 2030 financial targets that can be achieved by unlocking the full potential of The Bancorp’s payments and lending businesses CAPITAL RETURN Established the plan to optimize our balance sheet Enhance plan to maximize capital retur
Slide 10: Fintech Solutions Generates Non-Interest Income and Stable Deposits
10 FINTECH SOLUTIONS GENERATES NON - INTEREST INCOME AND ATTRACTS STABLE, LOWER - COST DEPOSITS DEPLOYED INTO LOWER RISK ASSETS IN SPECIALIZED MARKETS FINTECH SOLUTIONS Enabling fintech companies by providing card sponsorship and facilitating other payments activities INSTITUTIONAL BANKING Lending s
Slide 11: Deposits & Fees: Fintech Solutions
DEPOSITS & FEES: FINTECH SOLUTIONS GENERATES NON - INTEREST INCOME AND STABLE, LOWER - COST DEPOSITS
Slide 12: Tech Solutions: Fee Generating Activities
12 F I N T E C H S O L U T I O N S : F E E G E N E R A T I N G A C T I V I T I E S OUR FINTECH SOLUTIONS BUSINESS ENABLES LEADING FINTECH COMPANIES DEBIT PROGRAM MANAGERS (CHALLENGER BANKS) PREPAID/STORED VALUE PROGRAM MANAGERS • Provides physical and virtual card issuing • Maintains deposit balance
Slide 13: Tech Solutions: Established Operating Platform
13 F I N T E C H S O L U T I O N S : E S T A B L I S H E D O P E R A T I N G P L A T F O R M HIGHLY SCALABLE PLATFORM TO SUPPORT OUR STRATEGIC PARTNERS ESTABLISHED OPERATING PLATFORM • Infrastructure in place to support significant growth • Long - term relationships with multiple processors enable e
Slide 14: Deposit Growth from Payments Business
14 DEPOSIT GROWTH FROM PAYMENTS BUSINESS F I N T E C H S O L U T I O N S : S T A B L E , L O W E R - C O S T D E P O S I T G E N E R A T O R $2.0 $1.0 $0.0 $3.0 $4.0 $5.0 $6.0 $7.0 2019 2020 2021 2022 Q3 2023 A V E R A G E D E P O S I T S B Y P E R I O D ( $ B I L L I O N S ) Fintech Solutions Group
Slide 15: Stable Deposits with Significant Balance Sheet Liquidity
15 STABLE DEPOSITS WITH SIGNIFICANT BALANCE SHEET LIQUIDITY F I N T E C H S O L U T I O N S : S T A B L E , L O W E R - C O S T D E P O S I T G E N E R A T O R ESTIMATED INSURED VS OTHER UNINSURED DEPOSITS September 30 , 2023 91% Insured 5% Low balance accounts 4% Other uninsured 100% Total deposits
Slide 16: Loans & Leases: Highly Specialized Lending with Low Loss Histories
LOANS & LEASES: HIGHLY SPECIALIZED LENDING WITH LOW LOSS HISTORIES
Slide 17: Loans & Leases: Credit Roadmap
17 L O A N S & L E A S E S : C R E D I T R O A D M A P CREDIT ROADMAP Delivering enterprise value from our balance sheet is an important element of our business strategy and a primary focus of our credit roadmap initiative MANAGE CREDIT RISK TO DESIRED LEVELS OPTIMIZE NET INTEREST MARGIN AND MONITOR
Slide 18: Lower Credit Risk Loan Portfolio
18 LOWER CREDIT RISK LOAN PORTFOLIO L O A N S & L E A S E S : S T R O N G C O L L A T E R A L A N D G O V E R N M E N T G U A R A N T E E S % OF TOTAL PORTF OLIO Q 3 2023 PRINC IPAL B ALANC E ( $ MILLIONS ) B ALANC E S HEET C ATEG ORY B USINESS LINE 18% $ 1,008 Securities - backed lines of credit (S
Slide 19: Institutional Banking
19 INSTITUTIONAL BANKING L O A N S & L E A S E S : I N S T I T U T I O N A L B A N K I N G B U S I N E S S O V E R V I E W : • Automated loan application platform, Talea, provides industry - leading speed and delivery • Securities - backed lines of credit provide fast and flexible liquidity for inve
Slide 20: Institutional Banking Loan Portfolio
20 INSTITUTIONAL BANKING PRIMARILY COMPRISED OF SECURITIES & CASH VALUE LIFE INSURANCE LENDING L O A N S & L E A S E S : I N S T I T U T I O N A L B A N K I N G L O A N P O R T F O L I O % OF PORTFOLIO PRINCIPAL BALANCE LOAN TYPE 53% $ 1,008 Securities - backed lines of credit (SBLOC) 37% 713 Insura
Slide 21: Small Business Lending
21 SMALL BUSINESS LENDING L O A N S & L E A S E S : S M A L L B U S I N E S S L E N D I N G B U S I N E S S O V E R V I E W : • Established a distinct platform within the fragmented SBA market • National portfolio approach allows pricing and client flexibility • Solid credit performance demonstrated
Slide 22: Small Business Loans by Type and State
22 L O A N S & L E A S E S : S T R O N G C O L L A T E R A L & G O V E R N M E N T G U A R A N T E E S SM A LL B U SI N E S S LO A N S B Y T YP E 1 ( $ M IL LI O N S ) 9/ 30/ 2 0 23 1 Excludes the government guaranteed portion of SBA 7(a) loans and PPP loans. TYPE DISTRIBUTION • Diverse product mix
Slide 23: Commercial Fleet Leasing
23 L O A N S & L E A S E S : C O M M E R C I A L F L E E T L E A S I N G B U S I N E S S O V E R V I E W : • Niche provider of vehicle leasing solutions • Focus on smaller fleets (less than 150 vehicles) • Direct lessor (The Bancorp Bank, N . A . sources opportunities directly and provides value - a
Slide 24: Commercial Fleet Leasing Portfolio
24 L O A N S & L E A S E S : C O M M E R C I A L F L E E T L E A S I N G P O R T F O L I O • Largest concentration is construction and government sectors • Of the $670M total portfolio, $588M are vehicle leases with the remaining $82M comprised of equipment leases POR T F OL I O A TTR I B U TES TOTA
Slide 25: Commercial Real Estate Bridge Lending
25 COMMERCIAL REAL ESTATE BRIDGE LENDING L O A N S & L E A S E S : R E A L E S T A T E B R I D G E L E N D I N G % TOTAL WEIGHTED AVG INTEREST RATE ORIGINATION DATE LTV BALANCE # LOANS TYPE 98% 9.2% 72% $ 2,055 150 Multifamily (apartments) 1% 9.8% 65% 27 2 Hospitality (hotels and lodging) <1% 7.3% 7
Slide 26: Financial Review
FINANCIAL R The Bancorp
Slide 27: Loans Repricing to Higher Rates Have Positively Impacted NIM
27 LOANS REPRICING TO HIGHER RATES HAVE POSITIVELY IMPACTED NIM AS BENCHMARK RATES HAVE CONTINUED TO RISE F I N A N C I A L R E V I E W : I N T E R E S T R A T E S E N S I T I V I T Y 1 Loans are as of September 30, 2023, and deposits are average balance for Q3 2023. 2 Institutional Banking substant
Slide 28: Revenue Growth Has Significantly Exceeded Expense Growth
28 REVENUE GROWTH HAS SIGNIFICANTLY EXCEEDED EXPENSE GROWTH F I N A N C I A L R E V I E W : E A R N I N G S A N D P R O F I T A B I L I T Y 1 Revenue includes net interest income and non - interest income. Please see Appendix slide 33. 2 Non - interest income as percentage of average assets ranks in
Slide 29: Allowance for Credit Losses Reflects Lower-Risk Loan Portfolio
29 $0 $5 $10 $15 $20 $25 2019 2020 2021 2022 Q3 2023 ALLOWANCE FOR CREDIT LOSSES REFLECTS OUR LOWER - RISK LOAN PORTFOLIO F I N A N C I A L R E V I E W : L O A N L O S S R E S E R V E A L L O W A N C E F O R C R E D I T L O S S E S ( $ M I L L I O N S ) Small Business SBLOC/IBLOC/Advisor Financing H
Slide 30: Capital Position
30 CAPITAL POSITION F I N A N C I A L R E V I E W : H I S T O R I C A L C A P I T A L P O S I T I O N HIG HL IG HT S • Increased the stock buyback program to $25M per quarter in 2023 2 • Corporate governance requires periodic assessment of capital minimums • Capital planning includes stress testing
Slide 31: We Have Executed Our Strategic Plan and Continue to Improve Performance
31 WE HAVE EXECUTED OUR STRATEGIC PLAN AND CONTINUE TO IMPROVE FINANCIAL PERFORMANCE F I N A N C I A L R E V I E W : E A R N I N G S A N D P R O F I T A B I L I T Y L O N G - T E R M T A R G E T S Q 3 Y T D 2 0 2 3 2 0 2 2 2 0 2 1 2 0 2 0 P E R F O R M A N C E M E T R I C S >30% 27.0% 19.3% 17.9% 15
Slide 32: Appendix
The Bancorp
Slide 33: GAAP Revenue and Efficiency Ratio Calculations
33 GAAP REVENUE AND EFFICIENCY RATIO CALCULATIONS A P P E N D I X ( $ m i l l i o n s ) Q3 YTD 2023 Q3 YTD 2022 2 0 2 2 2 0 2 1 2 0 2 0 2 0 1 9 The Bancorp $ 261,893 $ 172,081 $ 248,841 $ 210,876 $ 194,866 $ 141,288 Net interest income 85,105 79,943 105,683 104,749 84,617 104,127 Non - interest inco
Slide 34: Reconciliation of Non-GAAP Financial Metrics to GAAP
34 RECONCILIATION OF NON - GAAP FINANCIAL METRICS TO GAAP A P P E N D I X ( $ m i l l i o n s ) Q 3 2 0 2 3 2 0 2 2 2 0 2 1 2 0 2 0 2 0 1 9 $ 24,145 $ 22,374 $ 17,806 $ 16,082 $ 10,238 Allowance for credit losses on loans and leases GAAP 877 1,167 964 775 553 Allowance for credit losses on SBLOC & I