The Bancorp, Inc. · NASDAQ:TBBK
The Bancorp — Bancorp — Q1 2018 Earnings Presentation
32 slides from The Bancorp's earnings presentation, Jun 28, 2018
Slide 1: Business Review and Plan 1st Quarter 2018
Business Review and Plan1st Quarter 2018 June 2018
Slide 2: Forward Looking Statements and Other Disclosures
Forward Looking Statements and Other Disclosures 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, i
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…. >100,000,000 Prepaid Cards in U.S. Distribution 1.1+ BillionMerchant Card Transactions Processed Annually $459 BillionCombined Annual Payments Processing Volume 70kMerchants served within Mastercard/Visa Networks 100+Private-Label Non-Bank Partners TOP
Slide 5: Unique deposit gathering platform linked to payments franchise
The Bancorp has a unique deposit gathering platform linked to our payments franchise …creates a stable, low cost deposit base… Deposits ($M)1 HIGHLIGHTS:Average deposit cost of 0.49% for the quarter ended 3/31/2018Payments represent the largest and fastest growing source of deposits (14% compounded
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 balances ($M)1 Institutional Banking Real Estate Capital Markets Small Business Leasing 1 End of period balances Niche vehicle fleet leasing
Slide 7: Management Scorecard
Management Scorecard Developed multi-year business plan that was approved by The Bancorp Board of Directors Delivered positive and improving financial performance from the business Executed against Phase 1 and 2 of cost reduction plan Executing against Integrated Compliance plan to address regulator
Slide 8: Key differentiators for The Bancorp
Key differentiators for The Bancorp Leading payments franchise, driving fee income growth Commencing Phase #3 re-engineering of platform to enable innovative growth Low cost payments deposits will only partially adjust to increases in market interest rates Asset sensitive balance sheet with majority
Slide 9: 1st Quarter 2018 Financial and Business Highlights
1st Quarter 2018 Financial and Business Highlights
Slide 10: Low Cost Deposit Base
Low Cost Deposit Base 1 Based on average annual or YTD balances through 3/31/2018 The Bancorp has a unique deposit gathering platform linked to our payments franchise HighlightsAverage deposit cost of 0.49% for the quarter ended 3/31/2018Payments (Prepaid cards and Other payments) represent the larg
Slide 11: Loan Growth Across Platform
Loan Growth Across Platform We continue to grow our key lending businesses which have had low loss histories Loan balances ($M)1 Non-performing loans/total loans1 Other Leasing Small Business Real EstateCapital Markets Institutional Banking2 $1,083 $1,559 $1,878 $2,056 $2,330 $3,633 Non-performing l
Slide 12: Consistent Generation of Non-Interest Income
Consistent Generation of Non-Interest Income HighlightsPayments franchise a key generator of non-interest income51% non-interest income vs. 22% for average community banks2 1 For reconciliation of post provision income to GAAP, please see appendix (page 31)2 Based on peer group community banks. Sour
Slide 13: Focus on Reducing Non-strategic Assets
Focus on Reducing Non-strategic Assets HighlightsThe Bancorp discontinued its Philadelphia-based commercial real estate operations in 2014 Significant reductions over past two yearsDisposing remainder of portfolio as soon as practical with optimal executionWhile credit risk remains, discontinued cre
Slide 14: High Quality Investment Securities Portfolio
High Quality Investment Securities Portfolio Highlights95% of portfolio rated A- or betterYield on securities portfolio >2.75% YTD with low duration relative to peersPortfolio managed by highly experienced internal teamHighly liquid assets2 are >45% of total assets. Peer on balance sheet liquidity <
Slide 15: Commitment to a Well-capitalized Balance Sheet
Commitment to a Well-capitalized Balance Sheet HighlightsCapital ratios increasing with Tier 1/Average Assets approaching near term target of 8.5% with longer term target of 9.0%Risk based ratios reflect lower risk based requirements for Securities-Backed Lines of Credit, SBA loans and select invest
Slide 16: Implemented an Integrated Compliance Plan
Implemented an Integrated Compliance Plan We are executing against our integrated compliance plan that includes BSA/AML1, Third Party Risk Management and Consumer Compliance 1 Bank 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 Franchise
Our Payments capability is comprised of the Payments Solutions Group (Issuance) and Payment Acceptance Group (Acceptance) Payment Solutions Group Issuing bank for leading prepaid card and debit programs Payment Acceptance Group Merchant acquiring and ACH services BUSINESS OVERVIEW Sponsorship of pro
Slide 19: Business Unit Strategies – Payments Financial Performance
Business Unit Strategies – Payments Financial Performance Sources: National Automated Clearing House Association (NACHA); Nilson Report Our growing Payments business is the primary driver of non-interest income and the largest source of our deposits Compound Annual Growth 10% Compound Annual Growth
Slide 20: Business Unit Strategies – Payments Ecosystem
Business Unit Strategies – Payments Ecosystem The Bancorp plays a key role within a highly developed marketplace ISSUANCE ACCEPTANCE Payment Network BIN1 Sponsor“Issuer” ProgramManager ISO3/ Third Party Sender Merchant/ Originator BIN Sponsor“Acquirer”/ODFI2 The BancorpWells FargoFifth Third Global
Slide 21: Payments Ecosystem (Key Roles)
Business Unit Strategies – Payments Ecosystem (Key Roles) The Bancorp works in a highly integrated manner with our Program Managers and Processors Principal Member and conduit to card networksPrincipal oversight and control of program Facilitates the flow of and assumes fiduciary responsibility for
Slide 22: Payments (Market Sources of Demand)
Business Unit Strategies – Payments (Market Sources of Demand) The Bancorp delivers the ability to access funds across a wide spectrum of markets General Purpose Reloadable (GPR)TravelTax RefundGift Cards Consumer Corporate Government Payroll CardsIncentives and RebatesHealthcare (FSA, HSA, HRA)Insu
Slide 23: Payments Growth Opportunity
Business Unit Strategies – Payments Growth Opportunity The Bancorp has significant opportunities to grow our core payments business and expand into related markets Expanding relationships with long-term strategic clients in a consolidating marketEnhancing payment solutions offering across market seg
Slide 24: 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 25: 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 26: 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 27: 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 28: Appendix
Appendix
Slide 29: 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, 2017 As of or for the three months ended March 31, 2018 Selected Capital and Asset Quality Ratios: Equity/assets 6.88% 7.55% Tier 1 capital to average assets 7.90% 7.69% Tier 1 capital to
Slide 30: Loan Portfolio and Asset Quality Overview
Loan Portfolio and Asset Quality Overview Category(000s) 2014 2015 2016 2017 Q1 2018 Balance % of Total Loans Non-accrual Loans OREO 30-89 Days Delinquent 90+ Days Delinquent Q1 2018 YTD Charge-offs (net) SBA1 $165,134 $189,893 $209,629 $229,205 $244,595 14% $2,105 $405 $658 $268 $499 SBA1 held for
Slide 31: Adjusted Post Provision Income Reconciliation
Adjusted Post Provision Income Reconciliation1 1 Post 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 32: Risk Factors
Risk Factors The following risk factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in this presentation The risk factors discussed and identified in our Annual Report on Form 10-K for the year ended December 31, 2017, a