The Bancorp, Inc. · NASDAQ:TBBK
The Bancorp — Bancorp — Investor Presentation (December 2016)
31 slides from The Bancorp's investor presentation, Dec 12, 2016
Slide 1: Business Review and Plan 3rd Quarter 2016
Business Review and Plan3rd Quarter 2016 12/12/2016
Slide 2: Forward Looking Statements
* Forward Looking Statements Statements in this presentation regarding The Bancorp, Inc.’s business that 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 the words “
Slide 3: The Bancorp Strategy
* The Bancorp Strategy The Bancorp has developed a client-driven business strategy which leverages our strategic assets and should significantly improve our financial performance BUSINESS STRATEGY ELEMENTS:Leverage Payments PlatformValue-added solutionsLow cost fundingSignificant fee incomeBuild out
Slide 4: Serving the world's most successful companies
* Serving the world’s most successful companies…. 88,000,000 Prepaid Cards in U.S. Distribution $4.2 Billion Total Assets 1.1+ BillionMerchant Card Transactions Processed Annually $450 BillionCombined Annual Payments Processing Volume 70kMerchants served within Mastercard/Visa Networks 100+Private-L
Slide 5: Unique deposit gathering platform linked to payments franchise
* The Bancorp has a unique deposit gathering platform linked to our payments franchise …creates a stable, low cost deposit base… Deposits ($M)1 HIGHLIGHTS:Average total deposit cost of 0.32%2 and average prepaid card deposit cost of 0.12%2Payments represent the largest and fastest growing source of
Slide 6: Utilizing deposits to build our lending franchise
* …which we are utilizing to build our lending franchise We will continue to grow our historically low losslending activities within our key business lines Loan balance ($M)1 Institutional Banking Real Estate Capital Markets Small Business Leasing 1End of period balances Niche auto fleet leasing and
Slide 7: Management Scorecard
* Management Scorecard Completed capital raise of $75 million to enhance our ability to support our clients and maintain revenue growth Implemented Phase 1 of cost reduction plan designed to streamline business lines and corporate functions Made substantial investment in our senior management teams
Slide 8: Key differentiators for The Bancorp
* Key differentiators for The Bancorp Leading payments franchise driving fee income growth Cost cutting initiatives in process are projected to reduce 20-25% of expense base Low cost payments deposits will only partially adjust to increases in market interest rates Rate sensitive balance sheet with
Slide 9: 3rd Quarter 2016 Financial and Business Highlights
* 3rd Quarter 2016 Financial and Business Highlights
Slide 10: Low Cost Deposit Growth Engine
* Low Cost Deposit Growth Engine 1Average cost for the first nine months in 20162Average yearly balances The Bancorp has a unique deposit gathering platform linked to our payments franchise HighlightsTotal deposit cost of 0.32%1 and average prepaid card deposit cost of 0.12%11Payments (Prepaid cards
Slide 11: Loan Growth Across Platform
* Loan Growth Across Platform We will continue to grow our historically low loss lending activities within our key business lines Loan balance ($M)1 Non-performing asset and loan ratios1 Other Leasing Small Business Real EstateCapital Markets Institutional Banking2 $701 $1,083 $1,559 $1,754 $1,634 $
Slide 12: Consistent Generation of Non Interest Income
* Consistent Generation of Non Interest Income HighlightsPayments franchise a key generator of non-interest income~50% non-interest income vs. 20% for average community banks3 1For reconciliation of post provision income, post provision interest income and adjusted non interest income to net interes
Slide 13: Focus on Reducing Non-strategic Assets
* Focus on Reducing Non-strategic Assets HighlightsThe Bancorp discontinued its Philadelphia-based commercial real estate operation in 2014 Significant reductions over past two yearsDisposing remainder of portfolio as soon as practical with best possible execution While we took a fair value mark of
Slide 14: Investment Securities Portfolio
* Investment Securities Portfolio Highlights95% of portfolio rated [A] or better, no securities below investment gradeYield on securities portfolio 2.36% YTD with low duration relative to peersPortfolio managed by highly experienced internal team 1End of period balances We have maintained our liquid
Slide 15: Commitment to a well-capitalized balance sheet
* Commitment to a well-capitalized balance sheet Highlights$75M capital raise in Q3 2016Capital ratios improving and Tier 1/Average Assets approaching near term target of 8.0% and longer term target of 8.5%Risk based ratios reflect preferential treatment of Securities Backed Lines of Credit, SBA loa
Slide 16: The Bancorp Business Plan
* The Bancorp Business Plan We are focused on executing our business unit strategies while building cross-organizational enablers to implement our business plan Implement specialized business unit strategies to increase revenue growth and productivity PAYMENTS INSTITUTIONAL BANKING SMALL BUSINESS LE
Slide 17: Business Unit Strategies – Payments
* Business Unit Strategies – Payments The Bancorp’s leading payments franchise empowers many of the most innovative companies across markets and drives deposits and fee income Business ModelIssuance business:Sponsorship of products/services across the payments spaceSponsorship of private label banki
Slide 18: Business Unit Strategies – Institutional Banking
* Business Unit Strategies – Institutional Banking Institutional Banking delivers private label lending and banking services to wealth management providers Business ModelIntegrated banking solutions for wealth managersDeposit services (checking and MDA)Lending services (securities based lines of cre
Slide 19: Business Unit Strategies – Small Business
* Business Unit Strategies – Small Business The Bancorp is building a focused small business lending platform in attractive regional markets and client segments Business ModelBuilding a distinct platform within the fragmented SBA marketNational portfolio lender approach allows pricing and client fle
Slide 20: Business Unit Strategies – Leasing
* Business Unit Strategies – Leasing The Bancorp has built a leasing business that is focused on delivering solutions to commercial and government entities with small auto/truck fleets Business ModelNiche provider of vehicle leasing solutionsFocus on smaller fleets (less than 100 vehicles)Direct les
Slide 21: Business Unit Strategies – Real Estate Capital Markets
* Business Unit Strategies – Real Estate Capital Markets The Bancorp has built a niche commercial real estate capital markets business over the past several years Business ModelLaunched in 2012, dedicated team focused on the CMBS businessOriginate fixed/floating rate transactions for saleBank balanc
Slide 22: Key Enablers – Business Integration
* Key Enablers – Business Integration Improve Business Unit integrationIdentify and support cross-sell opportunitiesManage banking services to support multiple BUsEvaluate opportunities to improve our centralized operating platformAssess impact of fragmentation of important functions and redundant a
Slide 23: Key Enablers – Technology/Innovation
* Key Enablers – Technology/Innovation Invest to support technology-enabled business growthInstitutional Banking: automate loan application processPayments: continue to build platform to support key partners in target marketsCross-business: assess tools to support BU sales/business development activ
Slide 24: Key Enablers – Sales/Practice Management
* Key Enablers – Sales/Practice Management Align incentive programsReview all existing sales incentive plansDevelop incentive programs that are consistent across business lines and are in line with market standards and business objectives within business units for 2017Improve performance and sales m
Slide 25: Key Enablers – Talent Management
* Key Enablers – Talent Management Initiate level-setting program across organizationIdentify high performersEstablish guidelines and provide support to ensure consistencyDevelop succession plans for key executives in strategic rolesFocus near-term retention and development efforts on key talent in
Slide 26: Key Enablers – Governance
* Key Enablers – Governance Enhance communication with key board committeesKey committees: audit, risk oversight, compensationUtilize business plan as roadmap for continued dialogueImprove key business processes and committeesEstablish Executive Committee and new leadership teamImprove budgeting/fin
Slide 27: Appendix
* Appendix
Slide 28: Capital Ratios and Selected Financial Data
* Capital Ratios and Selected Financial Data - The Bancorp, Inc. As of or for the nine months endedSeptember 30, 2016 As of or for the 12 months endedDecember 31, 2015 Selected Capital and Asset Quality Ratios: Equity/assets 8.04% 6.71% Tier 1 capital to average assets 7.81% 7.17% Tier 1 capital to
Slide 29: Loan Portfolio and Asset Quality Overview
* Loan Portfolio and Asset Quality Overview Category(000s) 2013 2014 2015 Q3 2016 Balance % of Total Loans Non-accrual Loans Non-accrual/Total Loans OREO 30-89 Days Delinquent 90+ Days Delinquent Q3 2016 YTD Charge-offs (net) SBA $115,656 $165,134 $189,893 $197,632 11% $1,920 1.0% - - - $75 SBA held
Slide 30: Post Provision Income Reconciliation
* Post Provision Income Reconciliation1 1Post provision income for continuing operations is calculated as follows: Net interest income less provision for loan and lease losses plus non-interest income excluding (gain)/loss on sales of investment securities and Health Savings Accounts and change in v
Slide 31: Risk Factors
* Risk Factors The risk factors discussed and identified in our Annual Report on Form 10-K for the year ended December 31, 2015, and in other of our public filings with the SEC:weak economic and slow growth conditions in the U.S. economy and significant dislocations in the credit markets have had, a