The Bancorp, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Q4 2020, the Bank Core Earnings Conference call. At this time, all participant lines are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Andres Viraslav. Thank you. Please go ahead, sir.

Thank you, Operator. Good morning, and thank you for joining us today for the Bancorp's fourth quarter and fiscal 2020 financial results conference call. On the call with me today are Damian Kozlowski, Chief Executive Officer, and Paul Frankel, our Chief Financial Officer. This morning's call is being webcast on our website at www.thebancorp.com. There will be a replay of the call beginning at approximately 12 p.m. Eastern time today. The dial-in for the replay is 855-859-2056 with a confirmation code of 895-2947. Before I turn the call over to Damian, I would like to remind everyone that when used in this conference call, the words believes, anticipates, expects, and similar expressions are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties, which could cause actual results, performance, or achievements to differ materially from those anticipated or suggested by such statements. For further discussion of these risks and uncertainties, please see the Bancorp's filings with the SEC. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Bancorp undertakes no obligation to publicly release the results of any revisions to forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Now I'd like to turn the call over to Bancorp's Chief Executive Officer, Damian Kozlowski. Damian?

Thank you, Andres. Good morning, everyone. The Bancorp earned $0.41 a share on revenue of $75 million and expenses of $42 million. For the full year of 2020, TBPK generated $1.37 a share. This exceeded our original guidance range of $1.25 to $1.34 a share and our revised guidance target due to COVID of $1.25 a share. Revenue climbed 35% driven by year-over-year increase in net interest income of 47% and non-interest income of 14%. Cost of funds was down 61% year-over-year, illustrating the benefits of our payments funding model. For the full year 2020, revenue increased 14% over 2019. Expenses declined 12% for the quarter and 2% year-over-year. Cost control and efficiency continues to be a main focus of management. Net income from continual operations grew 132% quarter-over-quarter and 34% year-over-year after adjusting for prior year civil monetary penalties. In the fourth quarter, we saw continued business momentum led by gross dollar volume, GDV, and our cards business of 18%. This quarter's GDV growth was lower than previous quarters, likely due to the elections. We experienced a depression in spend in November prior to knowing the full outcome of the presidential election. This mostly restored in December and does not appear to be a long-term trend. We also added assets led by 56% year-over-year growth in our securities and insurance lending platforms. Additionally, our commercial business has continued momentum with SBA excluding PPP growing 3% and leasing growing 7% quarter over quarter. We have completed our strategic business plan, strategic agenda and budget for 2021. Main focus continues to be on product and platform expansion with a rigorous focus on building the best payments ecosystem in the financial services industry. Our plan includes a comprehensive and integrated analysis of the market and competitors and the needed investments to build towards the future, and create scalable core competencies that our partners can use to innovate and grow. We also continue to invest heavily in anti-money laundering and compliance to have best-in-class capabilities to meet regulatory guidance and expectations. As previously announced, our board has authorized a buyback of shares to commence in the first quarter of 2021. We are currently in the market repurchasing shares. The bank can purchase 10 million TBPK shares a quarter for the balance of 2021, totaling 40 million of shares repurchased. At this time, the bank believes that its shares are undervalued and buybacks will be the most efficient way to return capital to investors. Dividends were considered as an alternative, but with the current bank stock valuations and TBBK business prospects, buybacks were deemed economically advantaged. Dividends could be added to buybacks in the future as valuations rise or TBBK approaches its long-term return goals. Lastly, our guidance target for 2021 is $1.70 a share. or approximately $100 million in net income. The earnings per share estimates do not include share repurchases. I now turn over the call to Paul Frankel, our CFO, to give you more color on the fourth quarter.