The Bancorp, Inc. · NASDAQ:TBBK
The Bancorp — Bancorp — Q2 2017 Earnings Presentation
28 slides from The Bancorp's earnings presentation, Sep 28, 2017
Slide 1: Business Review and Plan 2nd Quarter 2017
Business Review and Plan2nd Quarter 2017 9/27/2017
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 “ma
Slide 3: The Bancorp Strategy
The Bancorp Strategy The Bancorp has developed a client-driven business strategy which leverages our strategic assets and has significantly improved our financial performance BUSINESS STRATEGY ELEMENTS:Leverage Payments PlatformValue-added solutionsLow cost fundingSignificant fee incomeBuild out our
Slide 4: Serving the world's most successful companies
Serving the world’s most successful companies…. 99,000,000 Prepaid Cards in U.S. Distribution 1.1+ BillionMerchant Card Transactions Processed Annually $450 BillionCombined Annual Payments Processing Volume 70kMerchants served within Mastercard/Visa Networks 100+Private-Label Non-Bank Partners TOP 1
Slide 5: Unique deposit gathering platform linked to payments franchise
The Bancorp has a unique deposit gathering platform linked to our payments franchise …creates a stable, low cost deposit base… Deposits ($M)1 HIGHLIGHTS:Average deposit cost of 0.35%Payments represent the largest and fastest growing source of funds (16% compounded annual growth rate since 2013)Decli
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 m
Slide 7: Management Scorecard
Management Scorecard Completed capital raise of $75 million in Q3 2016 to enhance our ability to support our clients and maintain revenue growth Implemented Phase 1 of cost reduction plan designed to streamline business lines and corporate functions Made substantial investment in our senior manageme
Slide 8: Key differentiators for The Bancorp
Key differentiators for The Bancorp Leading payments franchise driving fee income growth Commencing Phase #3 re-engineering of platform to enable innovative growth Low cost payments deposits will only partially adjust to increases in market interest rates Asset sensitive balance sheet with majority
Slide 9: 2nd Quarter 2017 Financial and Business Highlights
2nd Quarter 2017 Financial and Business Highlights
Slide 10: Low Cost Deposit Base
Low Cost Deposit Base 1Average yearly balances The Bancorp has a unique deposit gathering platform linked to our payments franchise HighlightsAverage deposit cost of 0.35% Payments (Prepaid cards and Other payments) represent the largest and fastest growing source of funds (16% compound annual growt
Slide 11: Loan Growth Across Platform
Loan Growth Across Platform We continue to grow our key lending businesses which have had low loss histories Loan balance ($M)1 Non-performing loans/total loans1 Other Leasing Small Business Real EstateCapital Markets Institutional Banking2 $701 $1,083 $1,559 $1,878 $1,634 $2,056 $2,330 $3,633 Non-p
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 banks2 1For reconciliation of post provision income to GAAP, please see appendix (page 27)2Based on community banks $3.5B – $5.5B as
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 executionWe have significantly improved our cre
Slide 14: High Quality Investment Securities Portfolio
High Quality Investment Securities Portfolio Highlights95% of portfolio rated A or betterYield on securities portfolio >2.50% YTD with low duration relative to peersPortfolio managed by highly experienced internal teamLiquid assets are >40% of total assets vs. peers of 21%-24% since 20132 1End of pe
Slide 15: Commitment to a Well-capitalized Balance Sheet
Commitment to a Well-capitalized Balance Sheet Highlights$75M capital raise in Q3 2016Capital ratios increasing and Tier 1/Average Assets approaching near term target of 8.5% with longer term target of 9.0%Risk based ratios reflect preferential treatment of Securities-Backed Lines of Credit, SBA loa
Slide 16: Implemented an Integrated Compliance Plan
Implemented an Integrated Compliance Plan We launched a project in November 2016 to create a sustainable, integrated compliance program that includes BSA/AML1, Third Party Risk Management and Consumer Compliance PLAY VIDEO 1Bank Secrecy Act/Anti-Money Laundering
Slide 17: 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 LEAS
Slide 18: 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 banking
Slide 19: 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 Lending services (Securities-Backed lines of credit and advisor acq
Slide 20: 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 flexi
Slide 21: 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 lesso
Slide 22: 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 Business ModelLaunched in 2012, we have a dedicated team focused on the commercial real estate marketOriginate floating rate transactions for saleBank balance sheet pr
Slide 23: The Bancorp Business Plan – Key Enablers
The Bancorp Business Plan – Key Enablers We have taken action to build cross-organizational capabilities and processes to enable the execution of our strategy TALENTMANAGEMENT BUSINESSINTEGRATION GOVERNANCE SALES/PRACTICEMANAGEMENT TECHNOLOGY/INNOVATION Key Business EnablersQ2 2017 Highlights: Execu
Slide 24: Appendix
Appendix
Slide 25: Capital Ratios and Selected Financial Data
Capital Ratios and Selected Financial Data - The Bancorp, Inc. As of or for the twelve months ended December 31, 2016 As of or for the six months ended June 30, 2017 Selected Capital and Asset Quality Ratios: Equity/assets 6.15% 7.69% Tier 1 capital to average assets 6.90% 7.77% Tier 1 capital to to
Slide 26: Loan Portfolio and Asset Quality Overview
Loan Portfolio and Asset Quality Overview Category(000s) 2013 2014 2015 2016 Q2 2017 Balance % of Total Loans Non-accrual Loans OREO 30-89 Days Delinquent 90+ Days Delinquent Q2 2017 YTD Charge-offs (net) SBA1 $115,656 $165,134 $189,893 $209,629 $211,792 11% $3,612 - $770 - $134 SBA1 held for sale $
Slide 27: Adjusted Post Provision Income Reconciliation
Adjusted 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, change
Slide 28: Risk Factors
Risk Factors The risk factors discussed and identified in our Annual Report on Form 10-K for the year ended December 31, 2016, and in other of our public filings with the SEC include but are not limited to the following:weak economic and slow growth conditions in the U.S. economy and significant dis