The Bancorp, Inc. · NASDAQ:TBBK
The Bancorp — Bancorp — Investor Presentation (January 2024)
32 slides from The Bancorp's investor presentation, Jan 25, 2024
Slide 1: The Bancorp Investor Presentation January 2024
THE BANCORP INVESTOR PRESENTATION JANUARY 2024
Slide 2: Disclosures
2 DISCLOSURES Statements in this presentation regarding The Bancorp, Inc.’s (“The Bancorp”) business that are not historical facts or concern earnings guidance or the 2030 plan are “forward - looking statements”. These statements may be identified by the use of forward - looking terminology, includi
Slide 3: Delivering Strong Financial Performance
3 FINANCIAL PERFORMANCE DELIVERING STRONG FINANCIAL PERFORMANCE 2023 2022 2021 2020 31% 12% 13% 14% REVENUE GROWTH 1 GROWTH 26% 19% 18% 15% ROE PROFITABILITY 2.6% 1.8% 1.7% 1.3% ROA 41% 48% 53% 59% EFFICIENCY RATIO 1 SCALABLE PLATFORM KEY FINANCIAL METRICS 1 Please see Appendix slide 31 for reconcil
Slide 4: Earnings Guidance
4 EARNINGS GUIDANCE DELIVERING STRONG FINANCIAL PERFORMANCE GUIDANCE Our 2024 guidance 1 is $4.25 per share as we maintain strong momentum across our platform 1 2024 guidance assumes achievement of management’s strategic goals as described elsewhere in this presentation and other budge tar y goals.
Slide 5: The Bancorp Core Business Model
5 THE BANCORP CORE BUSINESS MODEL FINTECH SOLUTIONS GENERATES NON - INTEREST INCOME AND ATTRACTS STABLE, LOWER - COST DEPOSITS DEPLOYED INTO LOWER RISK ASSETS IN SPECIALIZED MARKETS THE BANCORP BUSINESS MODEL FINTECH SOLUTIONS Enabling fintech companies by providing card sponsorship and facilitating
Slide 6: Fintech Partner Bank
6 FINTECH PARTNER BANK FINTECH LEADERSHIP PAYMENT NETWORKS FACILITATE payments between parties via the card networks. PROGRAM MANAGERS CLIENT FACING platforms deliver highly scalable banking solutions to customers with emphasis on customer acquisition and technology. REGULATORS OVERSIGHT of domestic
Slide 7: Specialized Lending
7 SPECIALIZED LENDING SPECIALIZED LENDING BUSINESS LINES LENDING BUSINESSES Core lending businesses are comprised of our main, lower risk lending activities Institutional Banking $1.8B Emphasize core business lines and add related products and enter adjacent markets Expand commercial real estate bri
Slide 8: New 2030 Strategy Overview
8 NEW 2030 STRATEGY OUR 2030 STRATEGY OVERVIEW Our new 2030 strategy encompasses previous goals outlined in Vison 700 while adding new fintech opportunities Build on our strengths Create new opportunities Sustain revenue growth Enhance profitability Avert substantial event - risk Keep balance sheet
Slide 9: New 2030 Strategy
NEW 2030 STRATEGY *Without competing with our partners 1 PROVIDE NEW FINTECH SERVICES 3 SUPPORT FINTECH LENDING 2 MONETIZE CORE COMPETENCIES Our new 2030 plan comprises new opportunities identified across various strategic pathways: 1 Long term guidance assumes achievement of management’s long - ter
Slide 10: Fintech Solutions: Deposit & Fee Generation
FINTECH SOLUTIONS: DEPOSIT & FEE GENERATION
Slide 11: Fintech Solutions: Fee & Deposit Generating Activities
11 FINTECH SOLUTIONS: FEE & DEPOSIT GENERATING ACTIVITIES ENABLING LEADING FINTECH COMPANIES DEBIT PROGRAM MANAGERS (CHALLENGER BANKS) PREPAID/STORED VALUE PROGRAM MANAGERS • Provides physical and virtual card issuing • Maintains deposit balances on cards • Facilitates payments into the card network
Slide 12: Fintech Solutions: Established Operating Platform
12 FINTECH SOLUTIONS : ESTABLISHED OPERATING PLATFORM SCALABLE PLATFORM ESTABLISHED OPERATING PLATFORM • Infrastructure in place to support significant growth • Long - term relationships with multiple processors enable efficient onboarding • Continued technology investments without changes to expens
Slide 13: Fintech Solutions: Stable, Lower-Cost Deposit Generator
13 FINTECH SOLUTIONS : STABLE, LOWER - COST DEPOSIT GENERATOR DEPOSIT GROWTH FROM FINTECH BUSINESS HIGHLIGHTS • Stable, lower - cost deposit base anchored by multi - year, contractual relationships in our Fintech Solutions business • Fintech Solutions growth driven by increased transactional volume
Slide 14: Stable Deposits & Significant Balance Sheet Liquidity
14 FINTECH SOLUTIONS : STABLE, LOWER - COST DEPOSIT GENERATOR STABLE DEPOSITS & SIGNIFICANT BALANCE SHEET LIQUIDITY STRONG POSITIONING Our deposit base is primarily comprised of granular, small balance, FDIC insured accounts and we maintain significant borrowing capacity on our credit lines ESTIMATE
Slide 15: Loans & Leases: Specialized with Low Loss Histories
LOANS & LEASES: SPECIALIZED WITH LOW LOSS HISTORIES
Slide 16: Loans & Leases Strategic Outlook
16 LOANS & LEASES STRATEGIC OUTLOOK Optimize balance sheet and r emain positioned to capitalize on credit sponsorship opportunities KEY CONSIDERATIONS FOR LENDING GROWTH MANAGE CREDIT RISK TO DESIRED LEVELS OPTIMIZE NET INTEREST MARGIN AND MONITOR INTEREST RATE SENSITIVITY MANAGE REAL ESTATE EXPOSUR
Slide 17: Strong Collateral and Government Guarantees
17 LOANS & LEASES: STRONG COLLATERAL AND GOVERNMENT GUARANTEES LOWER RISK LOAN PORTFOLIO % OF TOTAL PORTFOLIO 12/31/2023 PRINCIPAL BALANCE ($ MILLIONS) BALANCE SHEET CATEGORY BUSINESS LINE 38% $ 2,168 Multifamily - commercial real estate (A) Real Estate Bridge Lending <1% 27 Hospitality - commercial
Slide 18: Loans & Leases: Real Estate Bridge Lending
18 LOANS & LEASES: REAL ESTATE BRIDGE LENDING COMMERCIAL REAL ESTATE BRIDGE LENDING % TOTAL WEIGHTED AVG INTEREST RATE ORIGINATION DATE LTV BALANCE # LOANS TYPE 98% 9.3% 71% $ 2,168 157 Multifamily (apartments) 1% 9.8% 65% 27 2 Hospitality (hotels and lodging) <1% 8.2% 72% 12 2 Retail <1% 5.0% 73% 9
Slide 19: Loans & Leases: Institutional Banking
19 LOANS & LEASES: INSTITUTIONAL BANKING 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 LOANS & LEASES: INSTITUTIONAL BANKING LOAN PORTFOLIO PRIMARILY COMPRISED OF SECURITIES & CASH VALUE LIFE INSURANCE LENDING % OF PORTFOLIO PRINCIPAL BALANCE LOAN TYPE 53% $ 980 Securities - backed lines of credit (SBLOC) 35% 647 Insurance - backed lines of credit (IBLOC) 12% 222 Advisor Financing
Slide 21: Loans & Leases: Small Business Lending
21 LOANS & LEASES: SMALL BUSINESS LENDING SMALL BUSINESS LENDING $ 885 B Q4 2023 PORTFOLIO SIZE 7.3 % 12/31/2023 EST. YIELD BUSINESS OVERVIEW: • Established a distinct platform within the fragmented SBA market • National portfolio approach allows pricing and client flexibility • Solid credit perform
Slide 22: Strong Collateral & Government Guarantees: Small Business Lending
22 LOANS & LEASES: STRONG COLLATERAL & GOVERNMENT GUARANTEES SMALL BUSINESS LENDING SMALL BUSINESS LOANS BY TYPE 1 ($MILLIONS) 12/31/2023 SMALL BUSINESS LOANS BY STATE 1 ($MILLIONS) 12/31/2023 TOTAL SBL NON - REAL ESTATE SBL CONSTRUCTION SBL COMMERCIAL MORTGAGE STATE $ 90 $ 3 $ 5 $ 82 California 72
Slide 23: Loans & Leases: Commercial Fleet Leasing
23 LOANS & LEASES: COMMERCIAL FLEET LEASING COMMERCIAL FLEET LEASING BUSINESS OVERVIEW: • Niche provider of vehicle leasing solutions • Focus on smaller fleets (less than 150 vehicles) • Direct lessor (The Bancorp Bank, N.A. sources opportunities directly and provides value - add services such as ou
Slide 24: Commercial Fleet Leasing Portfolio
24 LOANS & LEASES: COMMERCIAL FLEET LEASING PORTFOLIO COMMERCIAL FLEET LEASING • Largest concentration is construction and government sectors • Of the $686M total portfolio, $612M are vehicle leases with the remaining $74M comprised of equipment leases PORTFOLIO ATTRIBUTES TOTAL BALANCE TYPE 16% $ 1
Slide 25: Financial Review
FINANCIAL REVIEW
Slide 26: Revenue Growth Has Significantly Exceeded Expense Growth
26 FINANCIAL REVIEW: LOAN LOSS RESERVE REVENUE GROWTH HAS SIGNIFICANTLY EXCEEDED EXPENSE GROWTH 1 Revenue includes net interest income and non - interest income. Please see Appendix slide 31. 2 Non - interest income as percentage of average assets ranks in top 10% of the uniform bank performance rep
Slide 27: Allowance for Credit Losses Reflects Lower-Risk Loan Portfolio
27 FINANCIAL REVIEW: EARNINGS AND PROFITABILITY ALLOWANCE FOR CREDIT LOSSES REFLECTS OUR LOWER - RISK LOAN PORTFOLIO 1 Please see Appendix slide 32 for GAAP to Non - GAAP reconciliation of adjusted allowance for credit losses to GAAP allowance for c redit losses as % of adjusted loan balance (exclud
Slide 28: Financial Review: Historical Capital Position
28 FINANCIAL REVIEW: HISTORICAL CAPITAL POSITION CAPITAL POSITION HIGHLIGHTS • Increased the planned stock buyback 2 to $50M per quarter for 2024 • Corporate governance requires periodic assessment of capital minimums • Capital planning includes stress testing for unexpected conditions and events 0%
Slide 29: We Have Executed Our Strategic Plan and Continue to Improve
29 WE HAVE EXECUTED OUR STRATEGIC PLAN AND CONTINUE TO IMPROVE FINANCIAL PERFORMANCE FINANCIAL REVIEW: EARNINGS AND PROFITABILITY LONG - TERM TARGETS 2023 2022 2021 2020 PERFORMANCE METRICS >40% 25.6% 19.3% 17.9% 15.1% ROE > 4.0% 2.59% 1.81% 1.68% 1.34% ROA $3.49 $2.27 $1.88 $1.37 EPS >10% 12.4% 10.
Slide 30: Appendix
APPENDIX
Slide 31: GAAP Revenue & Efficiency Ratio Calculations
31 GAAP REVENUE & EFFICIENCY RATIO CALCULATIONS APPENDIX ($ millions) 2023 2022 2021 2020 2019 The Bancorp $ 354,052 $ 248,841 $ 210,876 $ 194,866 $ 141,288 Net interest income 112,094 105,683 104,749 84,617 104,127 Non - interest income 466,146 354,524 315,625 279,483 245,415 Total revenue 31% 12%
Slide 32: Reconciliation of Non-GAAP Financial Metrics to GAAP
32 RECONCILIATION OF NON - GAAP FINANCIAL METRICS TO GAAP APPENDIX ($ millions) 2023 2022 2021 2020 2019 $ 27,378 $ 22,374 $ 17,806 $ 16,082 $ 10,238 Allowance for credit losses on loans and leases GAAP 814 1,167 964 775 553 Allowance for credit losses on SBLOC & IBLOC 26,564 21,207 16,842 15,307 9,