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The Bancorp 8-K 2012
ex99-1.htm
 
Exhibit 99.1
 
NASDAQ: TBBK
The Bancorp, Inc. • Investor Presentation • JMP Securities Conference
May 16th, 2012
 
 

 
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 may be identified by the use of
forward-looking terminology, including the words “may,” “believe,” “will,” “expect,” “anticipate,” “estimate,”
“continue,” or similar words. For further discussion of these risks and uncertainties, see The Bancorp, Inc.’s
filings with the SEC, including the “risk factors” section of The Bancorp, Inc.’s Form 10-K. These risks and
uncertainties could cause actual results to differ materially from those projected in the forward-looking
statements. The forward-looking statements speak only as of the date of this presentation. The Bancorp, Inc.
does not undertake to publicly revise or update forward-looking statements in this presentation to reflect
events or circumstances that arise after the date of this presentation, except as may be required under
applicable law.
1
 
 

 
The Bancorp, Inc. - 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 - Utilize a branchless banking network to gather scalable deposits through strong
 contractual relationships at costs significantly below peers
 § Assets - Focus on asset classes including loans and securities appropriate to our expertise to
 achieve returns above risk-adjusted peer net interest margins
 § Non Interest Income - Grow non interest income disproportionately in relation to non interest
 expense through our deposit and asset approaches
 § Operating Leverage - Leverage infrastructure investment to grow earnings by creating efficiencies
 of scale
2
 
 

 
The Bancorp, Inc. - Planning for Growth
3
Consumer Distribution Channel Penetration
Percent of U.S. Households, 1980-2009
Source: Federal Reserve, FRB Boston, FRB Philadelphia, SRI Consulting, University of Michigan, Mintel, Celent, Bank of America, comScore, Nielsen Mobile, Wall Street Journal, Mercatus Analytics
 
 

 
Business Model: A Distinct Business Strategy (1)
4
Assets      Deposits
Prepaid Cards
Open Loop Prepaid Cards
 Deposits
 Non interest Income
Healthcare
Health Savings Accounts
and Flexible Spending
Accounts
 Deposits
 Non interest Income
Merchant Processing
Credit, Debit Card and
ACH Processing
 Deposits
 Non interest Income
Wealth Management
Deposit and Lending for
Clients of Wealth Firms
 Interest Income
 Deposits
 Non interest Income
Securities Portfolio
Primarily highly rated
government obligations
 Interest Income
Government Guaranteed
Lending
Loans to franchisees;
75% guaranteed by
U.S. government
 Interest Income
Automobile Fleet
Leasing
 Well-collateralized
Automobile Fleet Leasing
 Interest Income
 Non interest Income
Community Bank
Traditional Community
Banking Products
 Interest Income
 Deposits
 Non interest Income
36%
4%
3%
8%
34%
7%
GGL:
1%
7%
(1) For the above presentation, departmental revenue for asset-generators includes half the revenue on assets they do not fund, the other half of which is
 allocated to the deposit-producing departments. The balance of interest income is retained by the asset generators.
 
 

 
Revenue Composition
5
(1) Post provision net interest income and non interest income excluding securities gains and losses.
*Based on historical trends and is not intended to be, nor is, predictive of future results.
$
 
 

 
Non Interest Income-Generating Strategies: Growth and Sustainability
6
$
(1) Excludes gains on investment securities.
(2) Excluding a one time legal settlement of $485,000 for the first quarter 2011 the percentage increase would have been 134%.
(3) CAGR calculated 2009 through 2011
*Based on historical trends and is not intended to be, nor is, predictive of future results.
Continued Growth in Non Interest Income(1)
(2)
 
 

 
 
 
Prepaid Gross Dollar Volume (1) and Cardholder Growth  (2)
7
(1) Gross Dollar Volume is the total  amount spent on all cards outstanding within a given period.
(2) Number of active cards as of year-end of the stated year with the exception of 2012, which is end of the first quarter.
*Includes actual data from the first quarter and projected GDV for the remainder of the year. Projection for remainder of 2012 is not broken out by contracting year, is based on historical trends and is not
 intended to be, nor is, predictive of future results.
$
 
 

 
Net Interest Income Generators(1)
Compressed Interest Rate Environment
8
$
(1) CAGR calculated 2009 through 2011
*Based on historical trends and is not intended to be, nor is, predictive of future results.
 
 

 
Primary Asset-Generating Strategies: Business Line Overview
 Community Bank 
 § Offers traditional community banking products and services
 targeting the highly fragmented Philadelphia/Wilmington banking
 market
 Automobile Fleet Leasing
 § Well-collateralized automobile fleet leasing
  Average transaction: 8-15 automobiles, $350,000
  25% of portfolio leased by state and federal agencies
 Wealth Management
 § 17 affinity groups, managing $400 billion in assets
  SEI Investments, Legg Mason, Genworth Financial Trust
 Company
 § Generates securities backed loans and other loans
 Government Guaranteed Lending
 § Loans from $250,000 to $1.5 million primarily to franchisees such
 as UPS Stores, Massage Envy, FASTSIGNS and Save a Lot
 which are 75% guaranteed by the U.S. government. Recently
 approved lines $365 +million
 Securities
 § High credit quality tax exempt municipal obligations
 § U.S. Government agency securities primarily 4-5 year average
 lives and other highly rated mortgage-backed securities
9
 
Category
(in thousands)
Avg. Yield
Community Bank
$ 1,408,910
4.27%
Government
Guaranteed Lending
 43,378
5.16%
Wealth Management
 166,258
2.90%
Leasing Portfolio
 130,321
7.32%
Investment Securities
 499,524
3.67%
 
 

 
Non-Accrual Loans/Total Loans(1)
Asset Quality Overview
10
(1) Regional peers include publicly traded Mid-Atlantic commercial banks with assets between $1 billion and $4 billion as of December 31, 2011; graphs represent median values. (2) Texas Ratio = (Non-
accrual Loans + Restructured Loans + Loans 90 + days past due + OREO)/(Loss Reserves + Tangible Equity). TBBK computed with consolidated capital. Source: SNL Financial
 
 

 
Deposit-Generating Strategies: Growth and Low Cost
The Bancorp has experienced strong growth in deposits at below-peer costs.
11
Growth in Average Deposits
 
YTD Average Deposits
(dollars in thousands)
Cost of Funds(2)
Peer Cost of Funds(1)
2012
  $ 3,781,858
 0.29%
  0.68%
2011
$ 2,730,507
0.38%
0.93%
Change
$ 1,051,351
-0.09%
-0.25%
% Change
39%
-24%
-27%
(1) Peer data source as of December 2011: Uniform Bank Performance Report for Banks $1-5 B in assets measuring interest expense to average interest earning assets.
(2) Bancorp cost of funds is lower after consideration of seasonal deposits.
 
 

 
Deposit-Generating Strategies: Sticky and Long-Term
The Bancorp has long-term, often exclusive agreements in place with its private label banking
partners. We have retained 99% of maturing contracts.
12
Private Label Agreements by Remaining Contractual Term(1)
(1) Calculation based upon amount of deposits generated through each agreement. Does not include deposits associated with a third party with which TBBK is disengaging in 2012.
 
 

 
Growth Engine: Where Do Deposits Come From?
13
March 31, 2012
Category
Balance
(in millions)
Avg. Cost
Community Bank
$ 358
0.38%
Healthcare
 435
0.91%
Prepaid Cards
(including demand deposit accounts)
 2,119
0.01%
Wealth Management
 544
0.57%
Merchant Processing
 167
0.69%
1031 Exchange
151
0.71%
Total Deposits: $3.8 billion
Average Cost: 0.29%
(Peer Average Cost: 0.68%)(1)
(1) Peer data source as of December 2011: Uniform Bank
 Performance Report for Banks $1-5 B in assets measuring
 interest expense to average interest earning assets.
 
 

 
Adjusted Operating Earnings(1),(2)
Operating Leverage
14
(1) As a supplement to GAAP, Bancorp has provided this non-GAAP performance result. The Bancorp believes that this non-GAAP financial measure is useful because it allows investors to assess its
 operating performance.  Management utilizes adjusted operating earnings to measure the combined impact of changes in net interest income, non-interest income and certain other expenses.  
 Adjusted operating earnings exclude the impact of the provision for loan losses, income taxes, securities gains and losses and certain non-recurring items.  Other companies may calculate adjusted
 operating earnings differently.  Although this non-GAAP financial measure is intended to enhance investors’ understanding of Bancorp’s business and performance, it should not be considered, and
 is not intended to be, a substitute for GAAP.
(2) CAGR calculated 2009 through 2011
$
 
 

 
The Bancorp, Inc. - 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 - Utilize a branchless banking network to gather scalable deposits through strong
 contractual relationships at costs significantly below peers
 § Assets - Focus on asset classes including loans and securities appropriate to our expertise to
 achieve returns above risk-adjusted peer net interest margins
 § Non Interest Income - Grow non interest income disproportionately in relation to non interest
 expense through our deposit and asset approaches
 § Operating Leverage - Leverage infrastructure investment to grow earnings by creating efficiencies
 of scale
15
 
 

 
NASDAQ: TBBK
APPENDIX
 
 

 
Capital Ratios and Selected Financial Data
17
 
 
As of or for the three months ended
As of or for the three months ended
 
 
March 31, 2012
March 31, 2011
 
 
(dollars in thousands)
(dollars in thousands)
Selected Capital and Asset Quality Ratios:
 
 
 
Equity/assets
6.78%
9.08%
 
Tier 1 capital to average assets
6.59%
8.62%
 
Tier 1 capital to total risk-weighted assets
14.94%
15.33%
 
Total Capital to total risk-weighted assets
16.19%
16.58%
 
Allowance for loan and lease losses to total loans
1.80%
1.58%
 
Balance Sheet Data:
 
 
 
Total assets
$ 4,104,047
$2,836,697
 
Total loans, net of unearned costs (fees)
 1,748,867
1,636,253
 
Allowance for loan and lease losses
31,500
25,802
 
Total cash and cash equivalents
1,805,787
853,944
`
Total investments
499,524
294,941
 
Deposits
3,773,878
2,531,109
 
Shareholders’ equity
278,233
257,601
 
Selected Ratios:
 
 
 
Return on average assets
0.39%
0.36%
 
Return on average common equity
5.84%
5.07%
 
Net interest margin
2.19%
2.73%
 
Book value per share
$ 8.41
$ 7.76
 
 

 
Current Loan Portfolio and Asset Quality Overview at 3/31/2012
Category
(dollars in thousands)
 
Balance
% of Total
Loans
Nonaccrual
Loans
Nonaccrual/
Total Loans
OREO
30-89
Days
Delinquent
90+ Days
Delinquent
Q1 2012
Quarterly
Charge-offs
(net)
Commercial
$ 445,912
26%
$6,018
0.34%
$ 2,785
$241
$ 955
$ (1,421)
Commercial mortgage
 617,871
36%
3,609
0.21%
1,845
-
1,900
(991)
Construction
 248,232
14%
10,375
0.60%
-
3,009
667
( 701)
Direct financing leases
(auto leases)
 130,321
7%
-
0.00%
-
1,314
392
(86)
Residential mortgage
 94,438
5%
-
0.00%
3,096
-
-
83
Securities backed loans
and other
 208,584
12%
 927
0.05%
 -
20
 -
 (172)
Total
$ 1,745,358
100%
$ 20,929
1.20%
$7,726
$ 4,584
$3,914
$ (3,288)
18
 
 

 
Bancorp’s Real Estate Lending Business Targets Well-Positioned Attractive,
Stable Markets
 Commercial lending is substantially all in greater Philadelphia/Wilmington metropolitan area
 § Consists of the 12 counties surrounding Philadelphia and Wilmington, including Philadelphia,
 Delaware, Chester, Montgomery, Bucks and Lehigh Counties in Pennsylvania; New Castle County in
 Delaware; and Mercer, Burlington, Camden, Ocean and Cape May Counties in New Jersey.
 Philadelphia/Wilmington and the surrounding markets encompass a large population, stable economic
 activity and attractive demographics.
 Throughout the current down cycle and in prior cycles, the Philadelphia region has exhibited significant
 stability, which is reflected in a lesser reduction in housing prices and negative equity compared to the rest
 of the nation, as shown below.
19
 
Home Prices Q4-2008 to Q4-2011
(1)
Home Prices Q4-2010 to Q4-2011
(1)
United States
-13.4%
-3.9%
Philadelphia, PA
-10.10%
-3.9%
4th Quarter 2011 (2)
US
NJ
DE
PA
% of Homes with
Negative Equity
22.8%
17.5%
15.8%
8.4%
(1) Source: Fiserv Case-Shiller Home Price Indexes
(2) Source: CoreLogic
 
 

 
Notes
20
 
 

 
NASDAQ: TBBK
www.thebancorp.com
 
 

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