Slide 1: The Bancorp Investor Presentation
OC T OB E R 2 9 th , 20 20 THE BANCORP INVESTOR PRESENTATION
Slide 2: Forward Looking Statements & Other Disclosures
2 FORWARD LOOKING STATEMENTS & OTHER D I S C L O S U RE S D I S C L O S U R E S 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, inc
Slide 3: The Bancorp partners with some of the world's most successful companies
3 ACROSS OUR BUSINESS LINES, THE BANCORP PARTNERS WITH SOME OF THE WORLD’S MOST SUCCESSFUL COMPANIES K E Y P L A Y E R I N T H E P A Y M E N T S & B A N K I N G E C O S Y S T E M $ 6 . 2 B I N A SSE T S # 1 P R E P A I D C A R D I S S U I NG B A NK 1 PR E P AI D C A R D S I N U . S . D I S T R I BUT
Slide 4: Straight quarters of positive pre-tax income; established earnings momentum
4 WE HAVE NOW RECORDED 15 STRAIGHT QUARTERS OF POSITIVE PRE - TAX INCOME E S T A B L I S H E D E A R N I N G S M O M E N T U M 1 Q4 2019 pre - tax income excluding $7.5 million civil money penalty was $12.6 million. $9.7 $13.1 $ 8 .7 $19.6 $ 8 .3 $17.9 $1 0 .5 $24.2 $15.1 $2 8 .5 $5.1 $16.7 $26.8 $2
Slide 5: Business plan outlines path to expand leadership; 2021 guidance
5 OUR BUSINESS PLAN OUTLINES THE PATH TO EXPAND OUR LEADERSHIP AMONG PEER BANKS AND IN THE PAYMENTS INDUSTRY S T R A T E G I C P L A N : 2 0 2 1 G U I D A N C E $ 1.65 - $ 1.70 2 0 2 1 E P S T A R G E T R A N GE OUR 2021 TARGET I S A R A NG E W I T H $ 1 . 7 0 E P S O R A P P R O X I M A T E L Y $ 1
Slide 6: Executing strategic plan to deliver market-leading returns
6 BY EXECUTING OUR STRATEGIC PLAN, WE EXPECT TO DELIVER MARKET - LEADING RETURNS & CREATE VALUE FOR SHAREHOLDERS S T R A T E G I C P L A N : F I N A N C I A L G O A L S K E Y S T O A C H I E V I N G F I N A N C I A L T A R G E T S x Establish a new Payments Ecosystem 2.0 x Invest in technology/innov
Slide 7: Pandemic response and working closely with borrowers
7 WE ARE WORKING CLOSELY WITH OUR BORROWERS TO MEET THEIR NEEDS AS THE PANDEMIC UNFOLDS F I N A N C I A L R E V I E W : P A N D E M I C R E S P O N S E 1 At risk sectors include Hospitality and Retail. HI GHLIGHTS • Implemented procedures to support employees working from home • Team members deemed
Slide 8: Payments business generates non-interest income and stable, lower cost deposits
8 Note: Financial data for deposits is average for the quarter ended September 30, 2020 and loans for the quarter ended September 30, 2020. PAYMENTS BUSINESS GENERATES NON - INTEREST INCOME AND COLLECTS STABLE, LOWER COST DEPOSITS DEPLOYED INTO LOWER RISK ASSET BASE IN SPECIALIZED MARKETS PAYMENT AC
Slide 9: Deposits & Fees: Payments business generates non-interest income and stable deposits
DEPOSITS & FEES: PAYMENTS BUSINESS GENERATES NON - INTEREST INCOME AND STABLE, LOWER COST DEPOSITS
Slide 10: Business Overview: Payments
10 B U S I N E S S O V E R V I E W : P A Y M E N T S 1 # PR E P AI D C A R D I S S U I NG B A NK 2 39 % G R OS S D OL L A R V OL U ME G R OW T H 3 1. PAYMENT SOLUTIONS GROUP Issuing bank for leading prepaid card and debit programs B U S I N E S S O V E R V I E W : I S S U A N C E • Sponsorship of pr
Slide 11: Payments Business: Payment Solutions Group
11 P A Y M E N T S B U S I N E S S : P A Y M E N T S O L U T I O N S G R O U P 39 % G R OS S D OL L A R V OL U ME G R OW T H 1. PAYMENT SOLUTIONS GROUP Issuing bank for leading prepaid card and debit programs B U S I N E S S O V E R V I E W : • Unique non - branch platform which leverages technology
Slide 12: Payments Business: Payment Acceptance Group
12 P A Y M E N T S B U S I N E S S : P A Y M E N T A C C E P T A N C E G R O U P 2. PAYMENT ACCEPTANCE GROUP Rapid Funds, merchant acquiring and ACH services B U S I N E S S O V E R V I E W : • Pioneering real - time payments offering has recognized consistent and significant growth • 2018 VISA Inno
Slide 13: Consistent deposit growth from payments businesses
13 CONSISTENT DEPOSIT GROWTH FROM PAYMENTS BUSINESSES P A Y M E N T S B U S I N E S 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 1 Time deposits have rarely been used due to lower cost deposit growth and previous balances are included in “Other”. 2 Average for the quarter ende
Slide 14: Loans & Leases: Highly specialized lending with low loss histories
LOANS & LEASES: HIGHLY SPECIALIZED LENDING WITH LOW LOSS HISTORIES
Slide 15: Lower credit risk loan portfolio
15 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 BUSINESS LINE BALANCE SHEET CATEGORY Q 3 2020 PRINCIPAL BALANCE ($ MILLIONS) % OF TOTAL PO R T F O L I O Multifamily - commercial real estate (A) $ 1 , 463 3 4%
Slide 16: Institutional Banking
16 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 invest
Slide 17: Institutional Banking loan portfolio
17 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 LOAN TYPE PRINCIPAL BALANCE % OF PORTFOLIO Securities backed lines of credit (SBLOC) $ 1, 0 6 9 7 3% Insurance ba
Slide 18: Small Business Lending
18 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 19: Small business loans: strong collateral & government guarantees
19 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 S MALL BUS INESS LO ANS BY T YP E 1 ( $ M I L LIO N S ) 9/ 30/ 2020 1 Excludes $334M of SBA loans that are government guaranteed and $208M PPP loans. TYPE DISTRIBUTION • Diverse product mix • Comme
Slide 20: Commercial Fleet Leasing
20 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 that 150 vehicles) • Direct lessor (The Bancorp Bank sources opportunities directly and provides value - add servic
Slide 21: Commercial Fleet Leasing portfolio
21 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 OVERVIEW • Largest concentration is government sector • Of the $431M total portfolio, $401M is vehicle leases with the remaining $30M made up of equipment leases PORTFOLIO ATTRIBUTES TYPE B A L A NCE TOTAL Gov
Slide 22: Real Estate Capital Markets
22 REAL ESTATE CAPITAL MARKETS L O A N S & L E A S E S : R E A L E S T A T E C A P I T A L M A R K E T S TYPE # LOANS B A L ANCE O RI GI N A T I O N DATE LTV WEIGHTED AVG MIN INTEREST RATE % TOTAL Multifamily (apartments) 173 $ 1,463 76% 4 . 8% 91% Hospitality (hotels and lodging) 11 63 65% 5 . 7% 4
Slide 23: Financial
FINANCIAL The Bancorp"
Slide 24: 3.4% NIM and significant net interest income growth in Q3
24 3.4% NIM & SIGNIFICANT NET INTEREST INCOME GROWTH IN Q3 DESPITE 0% FRB RATE ENVIRONMENT 1 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 In the unlikely event of negative interest rates, $1.1B of demand securities loans and $0.4B of cash value insurance loans woul
Slide 25: Revenue growth since 2016 with tightly managed expenses
25 REVENUE HAS GROWN CONSISTENTLY SINCE 2016 WHILE EXPENSES HAVE BEEN TIGHTLY MANAGED, CREATING OPERATING LEVERAGE 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 Core revenue is net interest income plus non - interest income excluding gains/losses from sales of sec
Slide 26: Allowance for credit losses reflects lower risk loan portfolio
26 $0 $2 $4 $6 $8 $ 10 $ 12 $ 14 $ 16 2 0 17 2 0 18 2 0 19 Q3 2020 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
Slide 27: Capital Position
27 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 HI GHLIGHTS • Corporate governance requires periodic assessment of capital minimums • Financial and strategic planning emphasize capital • Capital planning includes stress testing for unexpected con
Slide 28: Financial Review: Earnings and Profitability
28 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 K E Y S T O A C H I E V I N G F I N A N C I A L T A R G E T S x Established a new Payments Ecosystem 2 . 0 which satisfies regulators and i s scalable x Invested in technology/innovation x Maintained an industry leadi