Slide 1: Investor Presentation Second Quarter, 2014
INVESTOR PRESENTATION Second Quarter, 2014
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: 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 ma
Slide 3: Planning for Growth with Safety and Soundness
PLANNING FOR GROWTH WITH SAFETY AND SOUNDNESS • Strategic Goal: – Create and grow a stable, profitable institution with the optimum reliance on capital, risk management and technology, and manage it with knowledgeable and experienced management and senior officers • Tactical Approach: – Deposits - U
Slide 4: Planning for Growth
PLANNING FOR GROWTH Sources: Federal Reserve, FRB Boston, FRB Philadelphia, SRI Consulting, University of Michigan, Mintel, Celent, Bank of America, comScore, Nielsen Mobile, Wall Street Journal, AlixPartners, Pew Research Center
Slide 5: Business Model: A Distinct Business Strategy
BUSINESS MODEL: A DISTINCT BUSINESS STRATEGY") WW Securities Portfolio REVENUE WH Prepaid Cards Prmaniy nigh rated government (Open Loop Prepaid Caras ‘oigatons & corporate secures 2010 ropa -Deposis sinterest Income Cards 30% ‘Non-inerest income bg poor“ ace WH Healthcare ‘nudes loans fo ranchsees,
Slide 6: Revenue Composition
REVENUE COMPOSITION Post Provision Income |) $147,843 "= Net interest income Post Provision 29% CAGR® $112,148 "= Non-interest income $69,148 0% Change 40,000 $35,965 $95,968 20,000 ° 2010 2011 2012 2013 YTDe/a02014 G22013 a22014 (1) Post roasion incomeis calculated a follows: net inerst income! fr
Slide 7: Prepaid Gross Dollar Volume (GDV) and Cardholder Growth
PREPAID GROSS DOLLAR VOLUME (GDV)") AND CARDHOLDER GROWTH®) $35,000,000 70,000,000 Gross Dollar Volume $31,680,764 71% CAGR 30,000,000 (60) geratsoat 60,000,000 01 —2019 pq Bates soratnste some | cor 22 20.000000 sooo0c00 = | 211 # 2 | —2o10 Se 31% Increase 2 23 15,000.00 30,000000 $ | mmm 2009 28 1
Slide 8: Non-Interest Income-Generating Strategies: Growth and Sustainability
NON-INTEREST INCOME-GENERATING STRATEGIES: GROWTH AND SUSTAINABILITY (1) Compound annual growth rate is calculated for the years 2010 through 2013. (2) Excludes gains on sales of investment securities. For reconciliation detail, please refer to the Non-Interest Income section of Post Provision Incom
Slide 9: Scalable Business Model: Non-Interest Income / Non-Interest Expense
SCALABLE BUSINESS MODEL: NON-INTEREST INCOME / NON-INTEREST EXPENSE (1) Compound annual growth rate is calculated for the years 2010 through 2013. (2) Excludes gains on sales of investment securities and expenses we believe to be mostly nonrecurring, such as lookback consulting expenses; 2011 includ
Slide 10: Compressed Interest Rate Environment: Net Interest Income Generators
COMPRESSED INTEREST RATE ENVIRONMENT: NET INTEREST INCOME GENERATORS (2) $ (1) Compound annual growth rate is calculated for the years 2010 through 2013. (2) Other is comprised of net interest income produced by the following areas: Investment Securities, Leasing, Government Guaranteed Lending, Inst
Slide 11: Operating Leverage: Adjusted Operating Earnings
OPERATING LEVERAGE: ADJUSTED OPERATING EARNINGS (1) Compound annual growth rate is calculated for the second quarters of 2010 through 2014. (2) For reconciliation detail, please see Appendix. $
Slide 12: Primary Asset-Generating Strategies: Business Line Overview
PRIMARY ASSET-GENERATING STRATEGIES: BUSINESS LINE OVERVIEW AS WITH FUNDING, THE BANCORP EMPLOYSA MULTI-CHANNEL GROWTH STRATEGY FOR ASSET ORIGINATION. 3% + Investment Securities — High ereit quality tax exempt municipal obligations =USS. Goveinment agency secuntes and ober highly rated mertgage-back
Slide 13: Asset Quality Overview
ASSET QUALITY OVERVIEW Reserves/Loans (1) Texas Ratio = (Non-accrual Loans + Restructured Loans + Loans 90+ days past due + OREO)/(Loss Reserves + Tangible Equity). TBBK computed with consolidated capital. Sources: SNL Financial; FDIC Call Reports.
Slide 14: Primary Deposit-Generating Strategies: Business Line Overview
PRIMARY DEPOSIT-GENERATING STRATEGIES: BUSINESS LINE OVERVIEW CATEGORY Q2 2014 BALANCE (in thousands) Q2 2014 AVG. COST $1,679,583 0.02% 953,165 0.40% 382,248 0.74% 445,616 0.49% 360,489 0.19% 60,709 0.11% Total Deposits: $3.9 billion Average Cost: 0.28% (Aggregate US Banks Average Cost: 0.36%) (1)
Slide 15: Deposit-Generating Strategies: Sticky and Long-Term
DEPOSIT-GENERATING STRATEGIES: STICKY AND LONG-TERM The Bancorp has long- term, often exclusive agreements in place with its private label banking partners. (1) Percentages shown include deposits associated with private label agreements in the Healthcare, Institutional Banking, Prepaid and Payments
Slide 16: Planning for Growth with Safety and Soundness
PLANNING FOR GROWTH WITH SAFETY AND SOUNDNESS • Strategic Goal: – Create and grow a stable, profitable institution with the optimum reliance on capital, risk management and technology, and manage it with knowledgeable and experienced management and senior officers • Tactical Approach: – Deposits - U
Slide 17: Appendix
APPENDIX
Slide 18: Capital Ratios and Selected Financial Data
Capital Ratios and Selected Financial Data + ‘As of or forthe three months ende {As of o forthe three months ended Selected Capital and Asset Quality Ratios: Equtviassets ‘Tier 1 capital to average assets ‘Tier 1 capital to total isk-weighted assets Total captal to fotalsk.weighted assets ‘Allowance
Slide 19: Current Loan Portfolio and Asset Quality Overview at 6/30/2014
FA Current Loan Portfolio and Asset Quality Overviewat 6/30/2014 22014 category 3 s a 2 Commercial mortgage 99,622 20% 10,790 | 059% 14782 665 | : (1.273) = ceo =) 5]) a acme | ams) za | om | aus =| = a sma] sax | azn | aa | smn | aman | sum | sua
Slide 20: Post Provision Income Reconciliation
(4 Post Provision Income Reconciliation x (dollars in mitions) a a z fewer | wen | em | eo | @e | ee [en | me So | ie : =| | ee ee includes a one-tine gan of $718,000 related to a legal settement 2
Slide 21: Scalable Business Model Reconciliation
Category (dollars in millions) 2010 2011 (1) 2012 2013 YTD 6/30/2014 Q2 2013 Q2 2014 Total Non-Interest Income $20.6 $30.6 $49.6 $83.4 $47.9 $22.4 $23.7 Gain on Sales of Investment Securities (1.2) (0.8) (0.7) (1.9) (0.4) (0.5) (0.1) Other Than Temporary Impairment 0.1 - 0.2 - - - - Non-Interest Inc
Slide 22: Adjusted Operating Earnings Reconciliation
(4 Adjusted Operating Earnings Reconciliation() me goss)_| Shasta | a | | $5,297 | $3561 | $3084 53.972 | $3288 | $2282] s660 | 2.688 |s2.041 | ssee | si07 aoe | 5200 | 7.3 APPENDIX cael ; Teo eee 66 | 4.090 | 203s | 3260 | 4431 | x622 | 1795 | 2.150 | 2227 | 1.392 | 1209 | 269 | 1431 | a6 | 156 | t
Slide 23: The Bancorp
<7? The Bghedtp
Slide 24: www.thebancorp.com
www.thebancorp.com