Slide 1: The Bancorp Investor Presentation April 2023
APRIL 2023 THE BANCORP INVESTOR PRESENTATION
Slide 2: Forward Looking Statements & Other Disclosures
2 FORWARD LOOKING STATEMENTS & OTHER DISCLOSURES DISCLOSURES 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 identified by th
Slide 3: The Bancorp Has Delivered Strong Financial Performance
3 THE BANCORP HAS DELIVERED S TRONG FINANCIAL PERFORMANCE Q1 2023 2022 2021 2020 47% 12% 13% 14% REVENUE GROWTH 1 GROWTH 28% 19% 18% 15% ROE PROFITABILITY 2.6% 1.8% 1.7% 1.3% ROA 42% 48% 53% 59% EFFICIENCY RATIO 1 SCALABLE PLATFORM KEY FINANCIAL METRICS Increasing levels of profitability Platform de
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 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 2020 2021 2022 2023 Guidance EARNINGS PER SHARE EARNINGS GUIDANCE GUIDANCE Our updated 2023 guidance 1 is $3.60 per share as we maintain
Slide 5: Financial Industry Leader: Recognized Performance
5 FINANCIAL INDUSTRY LEADER FORTUNE 100 FASTEST GROWING COMPANY RANKED #28 OCT. 2020 FORUM OF EXECUTIVE WOMEN Champion of Board Diversity Honoree OCT. 2022 IPA CONSUMER CHAMPION APR. 2021 NILSON REPORT RANKED #1 PREPAID CARD ISSUER JUNE 2021 EQUAL OPPORTUNITY PUBLICATION TOP EMPLOYER READERS CHOICE
Slide 6: The Bancorp Is a 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 Real Estate Bridge Lending $2.1B 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
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 PAYMENTS ECOSYSTEM Enhance plan to max
Slide 10: The Bancorp Business Model
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 Generates Non-Interest Income and Stable Deposits
DEPOSITS & FEES: FINTECH SOLUTIONS GENERATES NON - INTEREST INCOME AND STABLE, LOWER - COST DEPOSITS
Slide 12: Fintech Solutions: Fee Generating Activities
12 FINTECH SOLUTIONS: FEE GENERATING ACTIVITIES % TOTAL BANK REVENUE Q1 2023 1 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 balances on
Slide 13: Fintech Solutions: Established Operating Platform
13 FINTECH SOLUTIONS: ESTABLISHED OPERATING PLATFORM 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 efficient onboarding • Continued technolo
Slide 14: Deposit Growth From Payments Business
14 DEPOSIT GROWTH FROM PAYMENTS BUSINESS FINTECH SOLUTIONS: STABLE, LOWER - COST DEPOSIT GENERATOR $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 2019 2020 2021 2022 Q1 2023 AVERAGE DEPOSITS BY PERIOD ($ BILLIONS) Fintech Solutions Group (Prepaid and Debit Card Issuance and other payments) Institutional Ba
Slide 15: Stable Deposits with Significant Balance Sheet Liquidity
15 STABLE DEPOSITS WITH SIGNIFICANT BALANCE SHEET LIQUIDITY FINTECH SOLUTIONS: STABLE, LOWER - COST DEPOSIT GENERATOR ESTIMATED INSURED VS OTHER UNINSURED DEPOSITS March 31, 2023 90% Insured 5% Low balance stored value 5% Other uninsured 100% Total deposits SUMMARY OF CREDIT LINES AVAILABLE April 15
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 LOANS & LEASES: CREDIT ROADMAP 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 IMPROVE NIM AND MONITOR INTEREST RATE SENSITIVITY MANAGE REAL
Slide 18: Lower Credit Risk Loan Portfolio
18 LOWER CREDIT RISK LOAN PORTFOLIO LOANS & LEASES: STRONG COLLATERAL AND GOVERNMENT GUARANTEES % OF TOTAL PORTFOLIO Q1 2023 PRINCIPAL BALANCE ($ MILLIONS) BALANCE SHEET CATEGORY BUSINESS LINE 19% 1,132 Securities - backed lines of credit (SBLOC) ( A) Institutional Banking 16% 922 Insurance - backed
Slide 19: Institutional Banking
19 INSTITUTIONAL BANKING LOANS & LEASES: INSTITUTIONAL BANKING BUSINESS OVERVIEW: • Automated loan application platform, Talea, provides industry - leading speed and delivery • Securities - backed lines of credit provide fast and flexible liquidity for investment portfolios • Insurance - backed line
Slide 20: Institutional Banking Loan Portfolio
20 INSTITUTIONAL BANKING PRIMARILY COMPRISED OF SECURITIES & CASH VALUE LIFE INSURANCE LENDING LOANS & LEASES: INSTITUTIONAL BANKING LOAN PORTFOLIO % OF PORTFOLIO PRINCIPAL BALANCE LOAN TYPE 50% $ 1,132 Securities - backed lines of credit (SBLOC) 41% 922 Insurance - backed lines of credit (IBLOC) 9%
Slide 21: Small Business Lending
21 SMALL BUSINESS LENDING LOANS & LEASES : SMALL BUSINESS LENDING BUSINESS OVERVIEW: • Established a distinct platform within the fragmented SBA market • National portfolio approach allows pricing and client flexibility • Solid credit performance demonstrated over time • Client segment strategy tail
Slide 22: Small Business Loans: Strong Collateral & Government Guarantees
22 LOANS & LEASES: STRONG COLLATERAL & GOVERNMENT GUARANTEES SMALL BUSINESS LOANS BY TYPE 1 ($MILLIONS) 3/31/2023 1 Excludes the government guaranteed portion of SBA 7a loans and PPP loans. TYPE DISTRIBUTION • Diverse product mix • Commercial mortgage and construction are generally originated with 5
Slide 23: Commercial Fleet Leasing
23 COMMERCIAL FLEET LEASING LOANS & LEASES : COMMERCIAL FLEET LEASING BUSINESS OVERVIEW: • Niche provider of vehicle leasing solutions • Focus on smaller fleets (less than 150 vehicles) • Direct lessor (The Bancorp Bank sources opportunities directly and provides value - add services such as outfitt
Slide 24: Commercial Fleet Leasing Portfolio
24 LOANS & LEASES: COMMERCIAL FLEET LEASING PORTFOLIO • Largest concentration is construction and government sectors • Of the $653M total portfolio, $575M are vehicle leases with the remaining $78M comprised of equipment leases PORTFOLIO ATTRIBUTES TOTAL BALANCE TYPE 17% $ 112 Construction 13% 85 Wa
Slide 25: Commercial Real Estate Bridge Lending
25 COMMERCIAL REAL ESTATE BRIDGE LENDING LOANS & LEASES: REAL ESTATE BRIDGE LENDING % TOTAL WEIGHTED AVG INTEREST RATE ORIGINATION DATE LTV BALANCE # LOANS TYPE 98% 8.4% 73% 2,055 152 Multifamily (apartments) 1% 8.5% 65% 30 3 Hospitality (hotels and lodging) <1% 7.3% 72% 12 2 Retail <1% 5.2% 73% 9 2
Slide 26: Financial Review
FINANCIAL R The Bancorp
Slide 27: Loans Repricing to Higher Rates Will Positively Impact NIM
27 LOANS REPRICING TO HIGHER RATES WILL POSITIVELY IMPACT NIM AS BENCHMARK RATES HAVE CONTINUED TO RISE FINANCIAL REVIEW: INTEREST RATE SENSITIVITY 1 Loans are as of March 31, 2023, and deposits are average balance for Q1 2023. 2 Institutional Banking substantially comprised of securities backed loa
Slide 28: Revenue Growth Has Significantly Exceeded Expense Growth
28 REVENUE GROWTH HAS SIGNIFICANTLY EXCEEDED EXPENSE GROWTH FINANCIAL REVIEW: EARNINGS AND PROFITABILITY 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 top 11% of the uniform bank perfor
Slide 29: Allowance for Credit Losses Reflects Lower-Risk Loan Portfolio
29 $0 $5 $10 $15 $20 $25 2019 2020 2021 2022 Q1 2023 ALLOWANCE FOR CREDIT LOSSES REFLECTS OUR LOWER - RISK LOAN PORTFOLIO FINANCIAL REVIEW: LOAN LOSS RESERVE ALLOWANCE FOR CREDIT LOSSES ($MILLIONS) Small Business HELOC/Consumer/Other SBLOC/IBLOC/Advisor Financing 0.4% 0.4% 0.5% 0.6% 0.6% Allowance f
Slide 30: Capital Position
30 CAPITAL POSITION FINANCIAL REVIEW: HISTORICAL CAPITAL POSITION HIGHLIGHTS • 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 for unexpected conditions and events 0%
Slide 31: We Have Executed Against Our Strategic Plan
31 WE HAVE EXECUTED AGAINST OUR STRATEGIC PLAN AND CONTINUE TO IMPROVE FINANCIAL PERFORMANCE FINANCIAL REVIEW: EARNINGS AND PROFITABILITY LONG - TERM TARGETS Q1 2023 2022 2021 2020 PERFORMANCE METRICS 30% 28.1% 19.3% 17.9% 15.1% ROE > 2.5% 2.63% 1.81% 1.68% 1.34% ROA $0.88 $2.27 $1.88 $1.37 EPS >9%
Slide 32: Appendix
The Bancorp
Slide 33: GAAP Revenue and Efficiency Ratio Calculations
33 GAAP REVENUE AND EFFICIENCY RATIO CALCULATIONS APPENDIX ($ millions) Q1 2023 Q1 2022 2022 2021 2020 2019 The Bancorp $85,816 $52,853 $248,841 $ 210,876 $ 194,866 $ 141,288 Net interest income 28,989 25,112 105,683 104,749 84,617 104,127 Non - interest income 114,805 77,965 354,524 315,625 279,483
Slide 34: Reconciliation of Non-GAAP Financial Metrics to GAAP
34 RECONCILIATION OF NON - GAAP FINANCIAL METRICS TO GAAP APPENDIX ($ millions) Q1 2023 2022 2021 2020 2019 $ 23,794 $ 22,374 $ 17,806 $ 16,082 $ 10,238 Allowance for credit losses on loans and leases GAAP 1,027 1,167 964 775 553 Allowance for credit losses on SBLOC & IBLOC 22,767 21,207 16,842 15,3
Slide 35: Reconciliation of Non-GAAP Financial Metrics to GAAP
35 RECONCILIATION OF NON - GAAP FINANCIAL METRICS TO GAAP APPENDIX ($ millions) Q1 2023 Small Business Loans 1 $ 380 U.S. government guaranteed portion of SBA loans 4 Paycheck Protection Program Loans (PPP) 257 Commercial mortgage SBA 11 Construction SBA 104 Non - guaranteed portion of U.S. governme