UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

Form 8-K
 

Current Report
 
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): February 11, 2015
 

The Bancorp, Inc.
(Exact name of registrant as specified in its charter)
 

Commission File Number: 000-51018
 
   
Delaware
23-3016517
(State or other jurisdiction
of incorporation)
(IRS Employer
Identification No.)
 
409 Silverside Road
Wilmington, DE 19809
(Address of principal executive offices, including zip code)
 
302-385-5000
(Registrant’s telephone number, including area code)
 
 
(Former name or former address, if changed since last report)
 
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 
 
 
 
 
 
 
Item 7.01. Regulation FD Disclosure.
 
The Bancorp Inc. (the “Company”), will make available and distribute to analysts and prospective investors a slide presentation. The presentation materials include information regarding the Company’s operating and growth strategies and financial performance. The presentation materials will also be posted to the Company’s website. Pursuant to Regulation FD, the presentation materials are attached hereto as Exhibit 99.1.  The information in this Current Report, including the exhibit hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.
 
Item 9.01. Financial Statements and Exhibits.
 
(d) The following exhibits are included with this report:
 
     
 
Exhibit No.
  
Exhibit Description
   
99.1
  
 
 
 
 
 
 
 
 
 
Signature(s)
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
       
   
The Bancorp, Inc.
       
Date: February 11, 2015
  
By:
/S/    PAUL FRENKIEL
     
Paul Frenkiel
     
Chief Financial Officer
and Secretary
 
 
 
 
 
 
 




INVESTOR PRESENTATION
Fourth Quarter, 2014
 
 
 
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,” “intend,” “plan," or similar words. These forward-looking statements are based upon the
current beliefs and expectations of The Bancorp, Inc.’s management and are inherently subject to
significant business, economic, regulatory, and competitive uncertainties and contingencies, many of
which are difficult to predict and beyond our control. For further discussion of these risks and
uncertainties, see the “risk factors” sections of The Bancorp, Inc.’s Annual Report on Form 10-K for the
year ended December 31, 2013, Quarterly Report on Form 8-K for the three months, and year ended
December 31, 2014, and other of its public filings with the SEC. In addition, these forward-looking
statements are subject to assumptions with respect to future strategies and decisions that are subject to
change. Actual results may differ materially from the anticipated results discussed in these 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.
FORWARD LOOKING STATEMENTS
2
 
 
 
• 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
PLANNING FOR GROWTH WITH SAFETY AND SOUNDNESS
3
 
 
 
PLANNING FOR GROWTH
4
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
 
 
 
BUSINESS MODEL: A DISTINCT BUSINESS STRATEGY (1)
5
Specialty Finance              Payments
Securities Portfolio
Primarily highly rated government
obligations & corporate securities
• Interest Income
Government Guaranteed
Lending (GGL)
Includes loans to franchisees; 51% of
which have a 75% guaranty by the
U.S. government
• Interest Income
Commercial Mortgage-Backed
Securities (CMBS)
Commercial Loan Sales
• Non-Interest Income
• Interest Income
Leasing
Automobile Fleet Leasing
• Interest Income
• Non-Interest Income
Prepaid Cards
Open Loop Prepaid Cards
• Deposits
• Non-Interest Income
Healthcare
Health Savings Accounts and
Flexible Spending Accounts
• Deposits
• Non-Interest Income
Payment Acceptance
Credit, Debit Card, and ACH Processing
• Deposits
• Non-Interest Income
Institutional Banking
Deposits and Loans for Clients
of Wealth Firms
• Interest Income
• Deposits
• Non-Interest Income
REVENUE
Payments: 69%
Specialty
Finance: 31%
Corporate
(1) For reconciliation detail, please see Appendix, page 21.
 
 
 
REVENUE COMPOSITION
6
Post Provision Income (1)
$
 (1) For reconciliation detail, please see Appendix, page 22.
 (2) Compound annual growth rate is calculated for the years 2010 through 2014.
 
 
 
PREPAID GROSS DOLLAR VOLUME (GDV)(1) AND CARDHOLDER GROWTH
7
 (1) Gross Dollar Volume (GDV) is the total amount spent on all cards outstanding within a given period. GDV is further
 broken out according to volume by contract year.
 (2) Compound annual growth rate is calculated for the years 2010 through 2014.
$
$27,216,931
$6,285,271
$13,311,376
 
 
 
NON-INTEREST INCOME-GENERATING STRATEGIES:
GROWTH AND SUSTAINABILITY
8
15% Decrease
$
8%
-6%
28%
34%
14%
-120%
73%
$84,426
(2)
(1)Compound annual growth rate is calculated for the years 2010 through 2014.
(2)Excludes gains on sales of investment securities. For reconciliation detail, please refer to the
Non-Interest Income section of Post Provision Income Reconciliation, in the Appendix (page 22).
 
 
 
SCALABLE BUSINESS MODEL:
NON-INTEREST INCOME / NON-INTEREST EXPENSE(1)
9
 (1) For reconciliation detail, please refer to Appendix, page 23.
 (2) Compound annual growth rate is calculated for the years 2010 through 2014.
 (3) Peers are comprised of insured commercial banks having assets greater than $3 billion; Data Source: Uniform Bank Performance Report;
 Peer data for 2014 is as of Q3 2014.
Columns represent TBBK
 
 
 
SCALABLE BUSINESS MODEL:
NON-INTEREST EXPENSE/AVERAGE EARNING ASSETS(1)
10
 (1) For reconciliation detail, please refer to Appendix, page 23. Assets Held for Sale, from discontinued operations, are assumed to be reinvested
 and are included in the calculation.
 (2) Source: BankRegData.com.
(2)
 
 
 
COMPRESSED INTEREST RATE ENVIRONMENT:
NET INTEREST INCOME GENERATORS
11
 (1) Compound annual growth rate is calculated for the years 2010 through 2014.
$
 
 
 
ADJUSTED OPERATING EARNINGS(1)
12
$
 (1) For reconciliation detail, please see Appendix, page 24.
 
 
 
CATEGORY
      
 (in thousands)
       
 
421,862
293,109
2.57%
 
211,364
148,109
4.23%
 
194,464
175,610
6.12%
 
178,376
55,196
3.33%
 
42,743
53,068
3.36%
 
46,990
67
2.50%
 Discontinued Business Line*
 (formerly Community Bank)
898,134
1,303,125
3.65%
13
• Investment Securities
 – High credit quality tax exempt municipal obligations
 – U.S. Government agency securities and other highly rated mortgage-backed
 securities
 – Corporate securities which, like other purchases, are validated and monitored
 by independent credit advisory specialists
• Institutional Banking
 – 15 affinity groups, managing & administering $2.7 trillion in assets
 • SEI Investments, Legg Mason, AssetMark Trust Company, Franklin Templeton
 – Generates security backed lines of credit and other loans
• Government Guaranteed Lending
 – Loans from $150,000 to $5.0 million including loans to franchisees such as
 UPS Stores, Massage Envy, FASTSIGNS and Save a Lot, approximately 51% of
 which have a 75% guaranty by the U.S. Small Business Administration
 – National lending in Financial Practice Acquisitions, Franchise and Healthcare-
 professionals
• Leasing
 – Well-collateralized automobile fleet leasing
 • Average transaction: 8-15 automobiles, $350,000
 • 31% of portfolio leased by local, state, and federal government agencies
• CMBS
 – Loans which are generated for sale into CMBS markets that are
 held until sold
• Consumer/Other
 – Home equity lines of credit and other consumer loans; commercial financing
 related to student loans
(1) Yield is on a tax equivalent basis.
*Discontinued Business Line is not included in the pie chart.
 
 
 
ASSET QUALITY OVERVIEW
14
 
Reserves/Loans
 
 
 (1) Source: BankRegData.com
 (2) 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.
 
 
 
15
PRIMARY DEPOSIT-GENERATING STRATEGIES: BUSINESS LINE OVERVIEW
Total Deposits: $4.4 billion
Average Cost: 0.29%
(Aggregate US Banks Average Cost: 0.33%) (1)
(1)Aggregate US Banks data as of Q3 2014, source: BankRegData.com
CATEGORY
Q4 2014 BALANCE
(in thousands)
Q4 2014 AVG. COST
 
$2,034,224
0.02%
 
1,157,512
0.37%
 
461,674
0.47%
 
699,239
0.67%
 
15,286
0.17%
 Discontinued Business Line*
223,154
0.16%
 Discontinued Product*
47,934
0.02%
*Discontinued Business Line and Discontinued Product are
not included in the pie chart.
 
 
 
DEPOSIT-GENERATING STRATEGIES: STICKY AND LONG-TERM
16
 (1) Percentages shown include deposits associated with private label agreements
 in the Healthcare, Institutional Banking, Prepaid and Payments Acceptance
 groups. Data is as of the end of the fourth quarter of 2014.
 (2) Contracts associated with over 99% of deposits in the <1 year segment are
 structured with an automatic renewal.
The Bancorp is deeply
integrated with its private label
banking partners, and has
long-term, often exclusive
agreements in place.
(2)
 
 
 
• 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
PLANNING FOR GROWTH WITH SAFETY AND SOUNDNESS
17
 
 
 
APPENDIX
18
 
 
 
19
Capital Ratios and Selected Financial Data
 
 
As of or for the three months ended
December 31, 2014
(dollars in thousands)
As of or for the three months ended
December 31, 2013
(dollars in thousands)
Selected Capital and Asset Quality Ratios:
 
 
 
Equity/assets
7.10%
7.64%
 
Tier 1 capital to average assets
8.04%
8.58%
 
Tier 1 capital to total risk-weighted assets
12.58%
14.57%
 
Total capital to total risk-weighted assets
12.71%
15.83%
 
Allowance for loan and lease losses to total loans
0.41%
0.33%
 
Tangible common equity
 6.98%
 7.49 %
 
Balance Sheet Data:
 
 
 
Total assets
$5,017,989
$4,706,065
 
Total loans, net of unearned costs (fees)
879,533
655,320
 
Allowance for loan and lease losses
3,638
2,163
 
Total cash and cash equivalents
1,114,235
1,235,949
 
Total investments
1,587,404
1,350,322
 
Discontinued assets held for sale
926,278
1,299,914
 
Deposits
4,399,151
4,020,317
 
Shareholders’ equity
354,930
359,604
 
Selected Ratios:
 
 
 
Return on average assets
nm*
0.68%
 
Return on average common equity
nm
8.17%
 
Net interest margin
 2.62%
2.54%
 
Book value per share
$9.44
$9.53
*not meaningful
 
 
 
20
Current Loan Portfolio and Asset Quality Overview at 12/31/2014
Category
(dollars in thousands)
 
Balance
% of Total
Loans
Nonaccrual
Loans
Nonaccrual/
Total Loans
OREO
30-89 Days
Delinquent
90+ Days
Delinquent
Q4 2014
Quarterly
Charge-offs
(net)
SBA
$172,660
16%
$-
-%
$-
$-
$ -
$(253)
SBA held for sale
38,704
4%
-
-
-
-
-
-
Leasing
194,464
18%
-
-
-
6,915
149
(25)
Security backed lines of
credit
421,862
38%
-
-
-
-
-
(3)
Other consumer lending
42,743
4%
1,907
0.2%
-
466
-
(672)
Other specialty lending
46,990
4%
-
-
-
-
-
-
CMBS
178,376
16%
-
-
-
-
-
-
Total
$1,095,799
100%
$1,907
0.2%
$-
$7,381
$149
($953)
 
 
 
 
Specialty Finance
Payments
Corporate
Category
(dollars in thousands)
Institutional
Banking
GGL
CMBS
Leasing
Prepaid
General
Affinity
HSA
Payment
Acceptance
Investment
Securities
Interest income
11,753
8,344
4,354
11,951
-
-
1
56
34,261
Interest expense
4,647
-
-
-
325
268
2,149
3,396
-
Non interest income
2,721
1,126
12,197
2,873
51,288
2,842
5,570
5,809
450
Allocated income,
based on deposits
6,603
(4,172)
(2,177)
(5,975)
3,620
235
930
936
-
Allocated income,
investment securities
-
-
-
-
21,846
1,422
5,583
5,860
(34,711)
Total
16,430
5,298
14,374
8,849
76,429
4,231
9,935
9,265
-
Percentage
11%
4%
10%
6%
56%
7%
6%
-
21
Revenue By Segment Reconciliation(1)
 
Specialty Finance
Payments
Category
(dollars in thousands,
average balances)
Institutional
Banking
GGL
CMBS
Leasing
Prepaid
General
Affinity
HSA
Payment
Acceptance
Deposits
814,754
-
-
-
1,712,560
111,500
437,701
459,435
Loans
371,050
190,535
120,397
189,910
-
-
-
-
Net
443,704
-
-
-
1,712,560
111,500
437,701
459,435
Percentage of total
allocated income to be
received
14%
-
-
-
58%
14%
14%
Percent of Securities
allocation to Payments,
based on deposits
-
-
-
-
67%
16%
17%
 (1) Revenue for Specialty Finance departments includes all revenue from the assets they fund with deposits they generate. It also includes half
 the revenue from assets they generate but do not fund. The other half of the revenue is allocated to Payments departments and Institutional
 Banking for funding they provide. Additionally, revenue generated through the bank’s Investment Securities portfolio is allocated amongst the
 Payments business lines, based on each group’s deposits.
 
 
 
22
Post Provision Income Reconciliation(1)
Category
(dollars in millions)
2010
2011(2)
2012
2013
2014
Q4 2013
Q4 2014
Interest income
$24.4
$31.1
$39.4
$51.2
$70.7
$14.3
$18.5
Interest expense
(12.4)
(10.3)
(10.1)
(10.0)
(10.8)
(2.5)
(2.7)
Net interest income
12.0
20.8
29.3
41.1
59.9
11.8
15.8
Provision for loan and lease losses
(1.4)
(1.7)
(0.9)
(0.2)
(3.6)
0.2
(0.2)
Net interest income post provision
10.6
19.1
28.4
40.9
56.4
12.0
15.6
Total non-interest income
19.8
29.7
49.3
81.9
84.9
21.8
17.6
Gain on sales of investment securities
(1.2)
(0.7)
(0.6)
(1.9)
(0.5)
1.1
-
Less other than temporary impairment
0.1
-
0.2
-
-
-
-
Non-interest income
18.7
29.0
48.9
80.0
84.4
20.7
17.6
Post provision income
$29.3
$48.1
$77.3
$120.9
$140.8
$32.7
$33.2
 (1) Post provision income is calculated as follows: net interest income less provision for loan and lease losses plus non-interest income excluding
 gains on sales of investment securities and other than temporary impairment on securities.
 (2) 2011 includes a one-time gain of $718,000 related to a legal settlement.
 
 
 
23
Category
(dollars in thousands)
Q4
2014
Q3
2014
Q2
2014
Q1
2014
Q4
2013
Q3
2013
Q2
2013
Q1
2013
Q4
2012
Q3
2012
Q2
2012
Q1
2012
Average assets
4,443,016
4,293,960
4,475,754
4,955,143
4,261,727
3,984,728
3,972,306
4,165,418
3,341,602
3,084,178
3,384,272
4,107,802
Other assets
64,904
85,541
132,332
115,646
95,629
76,321
85,476
83,902
78,755
78,241
126,547
229,504
Average earning assets
4,378,112
4,208,419
4,343,422
4,839,497
4,166,098
3,908,407
3,886,830
4,081,516
3,262,847
3,005,937
3,257,725
3,878,298
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest expense
36,567
33,135
33,996
31,227
27,126
26,384
25,353
22,954
21,990
20,018
19,176
19,007
BSA & lookback consulting
expenses
3,883
2,749
2,169
-
-
-
-
-
-
-
-
-
Adjusted non-interest expense
32,684
30,386
31,827
31,227
27,126
26,384
25,353
22,954
21,990
20,018
19,176
19,007
Non-interest expense ratio
2.99%
2.89%
2.93%
2.58%
2.60%
2.70%
2.61%
2.25%
2.70%
2.66%
2.35%
1.96%
Scalable Business Model:  Non-Interest Expense/Average Earning Assets
Reconciliation
Category
(dollars in millions)
2010
2011(1)
2012
2013
2014
Q4 2013
Q4 2014
Total non-interest income
$19.8
$29.7
$49.3
$81.9
$84.9
$21.8
$17.6
Gain on sales of investment securities
(1.2)
(0.8)
(0.7)
(1.9)
(0.5)
(1.1)
(0.1)
Other than temporary impairment
0.1
-
0.2
-
-
-
-
Non-interest income
18.7
28.9
48.6
80.0
84.4
20.7
17.5
Total non-interest expense
$58.1
$69.1
$80.2
$101.8
$134.6
$27.1
$36.6
BSA & lookback consulting expenses
-
-
-
-
(8.8)
-
(3.9)
Non-interest expense
58.1
69.1
80.2
101.8
125.8
27.1
32.7
Non-interest income/Non-interest
expense
32%
42%
61%
79%
67%
76%
54%
Scalable Business Model: Non-Interest Income/Non-Interest Expense
Reconciliation
 
 
 
24
 (1) Excludes gains on sales of investment securities and expenses we believe to be mostly nonrecurring, such as Bank Secrecy Act related expenses and lookback consulting expenses;
 2011 includes a one-time gain of $718,000 related to a legal settlement.
 (2) 2011 includes a one-time gain of $718,000 related to a legal settlement.
 (3) 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 performance. Management utilizes adjusted earnings to measure the combined impact of changes in net interest income, non-interest income and certain other expenses.
 Adjusted earnings exclude the impact of income taxes, securities gains and losses and certain items we believe to be mostly non-recurring, such as lookback consulting expenses. Other
 companies may calculate adjusted 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 net income calculated pursuant to GAAP.
Adjusted Operating Earnings Reconciliation(3)
Category
(dollars in thousands)
Q4
2014
Q3
2014
Q2
2014
Q1
2014
Q4
2013
Q3
2013
Q2
2013
Q1
2013
Q4
2012
Q3
2012
Q2
2012
Q1
2012
Income before income tax
expense
(3,264)
1,535
3,404
4,936
6,696
3,060
6,025
5,206
1,220
(1,151)
(2,365)
(133)
BSA and lookback consulting
expense
3,883
2,749
2,169
-
-
-
-
-
-
-
-
-
Gain (loss) on sale of
investment securities
85
(35)
159
241
1,104
42
476
267
554
107
-
-
Adjusted earnings
$534
$4,319
$5,414
$4,695
$5,592
$3,018
$5,549
$4,939
$666
($1,258)
($2,365)
($133)
 
 
 
NOTES
25
 
 
 
www.thebancorp.com
26
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