The Bancorp, Inc. · NASDAQ:TBBK
The Bancorp — Bancorp — Investor Presentation (July 2021)
30 slides from The Bancorp's investor presentation, Jul 29, 2021
Slide 1: The Bancorp Investor Presentation July 2021
JULY 2021 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 business that are not historical facts are “forward - looking statements”. These statements may be identified by the use of forward - looking terminology, including the words “m
Slide 3: The Bancorp Has Delivered Strong Financial Performance
3 THE BANCORP HAS DELIVERED STRONG FINANCIAL PERFORMANCE 2019 2020 Q2 YTD 2021 PROFITABILITY ROE 12% 15% 19% 1 GROWTH REVENUE GROWTH 2 15% 15% 16% SCALABLE PLATFORM EFFICIENCY RATIO 69% 59% 54% KEY FINANCIAL METRICS Increasing levels of profitability Consistent double digit growth Platform deliverin
Slide 4: Business Plan Outlines Path to Expand Leadership; Increased 2021 Guidance
4 OUR BUSINESS PLAN OUTLINES THE PATH TO EXPAND OUR LEADERSHIP AMONG PEER BANKS AND IN THE PAYMENTS INDUSTRY $0.90 $1.37 $0.94 $1.78 $0.00 $0.25 $0.50 $0.75 $1.00 $1.25 $1.50 $1.75 $2.00 2019 2020 Q2 YTD 2021 2021 Target EARNINGS PER SHARE INCREASED 2021 GUIDANCE 2021 EARNINGS GUIDANCE 2021 GUIDANCE
Slide 5: Financial Industry Leader: Recognized Performance
5 FINANCIAL INDUSTRY LEADER CIO OUTLOOK TOP PAYMENT & CARD SOLUTIONS PROVIDER JUL. 2020 FORTUNE 100 FASTEST GROWING COMPANY RANKED #28 OCT. 2020 CIO REVIEW TOP BANKING TECHNOLOGY SOLUTIONS PROVIDER FEB. 2020 IPA CONSUMER CHAMPION APR. 2021 NILSON REPORT RANKED #1 PREPAID CARD ISSUER JUNE 2021 EQUAL
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 highly diversified portfolio of clients. PAYMENT NETWORKS FACILITATE payments betwee
Slide 7: Specialized Lending Business Lines and Credit Roadmap
7 SPECIALIZED LENDING BUSINESS LINES AND CREDIT ROADMAP Real Estate Bridge Lending $1.5B Emphasis on core business lines with expectation to add related products and enter adjacent markets Re - enter commercial real estate bridge lending business with focus on multi - family assets Remain positioned
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 i
Slide 9: Financial Targets
9 FINANCIAL TARGETS Our multi - year plan outlines the path to deliver shareholder value by activating payments ecosystem 2.0, executing on our credit roadmap and enhancing our capital return program. CAPITAL RETURN INTRODUCING OUR 2025 PLAN VISION 500 Established the plan to optimize our balance sh
Slide 10: The Bancorp Business Model
10 FINTECH SOLUTIONS GENERATES NON - INTEREST INCOME AND ATTRACTS STABLE, LOW - 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 sol
Slide 11: Deposits & Fees: Payments Business Generates Non-Interest Income and Deposits
DEPOSITS & FEES: PAYMENTS BUSINESS 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 Q2 YTD 2021 1 19 % GROSS DOLLAR VOLUME GROWTH 2 OUR FINTECH SOLUTIONS BUSINESS ENABLES LEADING FINTECH COMPANIES DEBIT PROGRAM MANAGERS (CHALLENGER BANKS) PREPAID/STORED VALUE PROGRAM MANAGERS • Provides physical and virtual card i
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 enables efficient onboarding • Continued technol
Slide 14: Deposit Growth from Payments Businesses
14 DEPOSIT GROWTH FROM PAYMENTS BUSINESSES FINTECH SOLUTIONS: STABLE, LOWER - COST DEPOSIT GENERATOR 1 Time deposits have rarely been used due to lower cost deposit growth and previous balances are included in “Other”. 2 Average for Q2 YTD 2021 $3,819 $3,812 $3,862 $4,025 $5,564 $6,086 $0 $500 $1,00
Slide 15: Loans & Leases: Highly Specialized Lending with Low Loss Histories
LOANS & LEASES: HIGHLY SPECIALIZED LENDING WITH LOW LOSS HISTORIES
Slide 16: Loans & Leases: Credit Roadmap
16 LOANS & LEASES: CREDIT ROADMAP CREDIT ROADMAP Delivering enterprise value from our balance sheet is an important element of our business strategy and a primary focus of our credit roadmap initiative. MANAGE CREDIT RISK TO DESIRED LEVELS IMPROVE NIM AND MONITOR INTEREST RATE SENSITIVITY MANAGE REA
Slide 17: Lower Credit Risk Loan Portfolio
17 LOWER CREDIT RISK LOAN PORTFOLIO LOANS & LEASES: STRONG COLLATERAL AND GOVERNMENT GUARANTEES BUSINESS LINE BALANCE SHEET CATEGORY Q2 2021 PRINCIPAL BALANCE ($ MILLIONS) % OF TOTAL PORTFOLIO Institutional Banking Securities - backed lines of credit (SBLOC) ( A) 1,133 25% Insurance - backed lines o
Slide 18: Institutional Banking
18 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 lin
Slide 19: Institutional Banking Loan Portfolio
19 INSTITUTIONAL BANKING PRIMARILY COMPRISED OF SECURITIES & CASH VALUE LIFE INSURANCE LENDING LOANS & LEASES: INSTITUTIONAL BANKING LOAN PORTFOLIO LOAN TYPE PRINCIPAL BALANCE % OF PORTFOLIO Securities - backed lines of credit (SBLOC) $ 1,133 63% Insurance - backed lines of credit (IBLOC) 597 33% Ad
Slide 20: Small Business Lending
20 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 21: Strong Collateral & Government Guarantees: Small Business Loans
21 LOANS & LEASES: STRONG COLLATERAL & GOVERNMENT GUARANTEES SMALL BUSINESS LOANS BY TYPE 1 ($MILLIONS) 6/30/2021 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 22: Commercial Fleet Leasing
22 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 23: Commercial Fleet Leasing Portfolio
23 LOANS & LEASES: COMMERCIAL FLEET LEASING PORTFOLIO OVERVIEW • Largest concentration is construction sector • Of the $506M total portfolio, $465M is vehicle leases with the remaining $41M made up of equipment leases PORTFOLIO ATTRIBUTES TYPE BALANCE TOTAL Construction $ 83 16% Government agencies
Slide 24: Real Estate Bridge Lending
24 REAL ESTATE BRIDGE LENDING LOANS & LEASES: REAL ESTATE BRIDGE LENDING TYPE # LOANS BALANCE ORIGINATION DATE LTV WEIGHTED AVG MIN INTEREST RATE % TOTAL Multifamily (apartments) 136 $ 1,323 76% 4.8% 90% Hospitality (hotels and lodging) 11 75 65% 5.7% 5% Retail 6 44 71% 4.7% 3% Other 7 28 70% 5.2% 2
Slide 25: Financial Review
FINANCIAL REVIEW The Bancorp
Slide 26: 3.2% NIM for Q2 2021 Despite 0% FRB Rate Environment
26 3.2% NIM FOR Q2 2021 DESPITE 0% FRB RATE ENVIRONMENT 1 FINANCIAL REVIEW: INTEREST RATE SENSITIVITY 1 Loans are as of June 30, 2021 and deposits are average balance for Q2 YTD 2021. 2 Institutional Banking substantially comprised of securities backed loans and insurance backed loans. 3 Excludes $1
Slide 27: Revenue Has Grown Consistently Since 2016 While Expenses Managed
27 REVENUE HAS GROWN CONSISTENTLY SINCE 2016 WHILE EXPENSES HAVE BEEN TIGHTLY MANAGED, CREATING OPERATING LEVERAGE FINANCIAL REVIEW: EARNINGS AND PROFITABILITY 1 Core revenue is net interest income plus non - interest income excluding net losses on commercial loans at fair value, gains/losse s from
Slide 28: Allowance for Credit Losses Reflects Lower-Risk Loan Portfolio
28 $0 $2 $4 $6 $8 $10 $12 $14 $16 $18 $20 2017 2018 2019 2020 Q2 2021 ALLOWANCE FOR CREDIT LOSSES REFLECTS OUR LOWER - RISK LOAN PORTFOLIO FINANCIAL REVIEW: LOAN LOSS RESERVE ALLOWANCE FOR CREDIT LOSSES ($MILLIONS) Small Business HELOC/Consumer/Other SBLOC/IBLOC/Advisor Financing Allowance for credi
Slide 29: Capital Position
29 CAPITAL POSITION FINANCIAL REVIEW: HISTORICAL CAPITAL POSITION HIGHLIGHTS • Established and executing share buyback program of $10M a quarter for 2021 • Corporate governance requires periodic assessment of capital minimums • Capital planning includes stress testing for unexpected conditions and e
Slide 30: Executing Against Strategic Plan and Improving Financial Performance
30 WE HAVE BEEN EXECUTING AGAINST OUR STRATEGIC PLAN AND IMPROVING FINANCIAL PERFORMANCE FINANCIAL REVIEW: EARNINGS AND PROFITABILITY PERFORMANCE METRICS 2017 2018 2019 2020 Q2 YTD 2021 LONG - TERM TARGETS ROE 7.0% 24.3% 11.6% 15.1% 18.6% 1 22% ROA 0.52% 2.07% 1.09% 1.34% 1.62% 1 > 2.0% EPS $0.39 $1