The Bancorp, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Q3 2021, the Bancorp, Inc. Earnings Conference Call. At this time, all participants' 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 the 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 Biroslav. Thank you. Please go ahead, sir.

Thank you, Lisa. Good morning, and thank you for joining us today for the Bancorp's third quarter 2021 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 925-7937. 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 Legation Reform Act of 1995. Such statements are subject to risk 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 of 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 the Bancorp's Chief Executive Officer, Damian Kozlowski. Damian?

Thank you, Andres. Good morning, everyone. The Bancorp earned $28.3 million in net income, or 48 cents per share, from 4% year-over-year revenue growth with a 6% expense decrease. Interest income increased 2%, while net interest income increased 9% year-over-year. Loan balances grew 26% year-over-year and 8% quarter-over-quarter. Balance growth year-over-year was led by institutional banking, which includes S-Block, I-Block, and RIA financing. with a 32% increase in balances. All businesses continue to grow quarter over quarter, with institutional growing six, SBA three, and leasing two. Gross dollar volume from our cards business grew 2% year over year, while payments related fee income decreased slightly. Both GDV and fee income were impacted by the loss of RO volume. This quarter also had a year over year impact of 2020 stimulus that contributed to slower growth. Our relaunched commercial real estate business exceeded our expectations and has already closed approximately $200 million of our new floating rate loans, with at least another $300 million set to close in the fourth quarter. Our current estimate is approximately $550 million for the full year 2021 and new CRE loans. These loans, like our previous securitization business credits, which were mark-to-market, are reserved against and will not be securitized, but may be sold to institutions. Our current target is approximately 300 percent of capital for CRE floating rate exposure in aggregate. Due to changes in FDIC guidance regarding the definition of broker deposits, FDIC insurance costs have been meaningfully reduced from 16 to 10 basis points. This may reduce total expense by approximately $4 million a year or $1 million a quarter. The majority of our deposits are no longer classified as brokered, and our insurance costs for the quarter were very close to the minimum cost of nine basis points per $1 of deposits. We also announced the departure of our chairman, Daniel Cohen, who has been a member of the TPP community since its founding. The board would like to thank Daniel for all his contributions and wish him great success on his many ventures. I would additionally like to thank Daniel personally for his significant support during our company's transformation into a leader in the fintech industry and across our thriving specialty lending businesses. The board has selected board member Jay McEntee III to succeed Daniel as chairman effective November 1st. In addition, Cheryl Crusoe has been appointed as a new director, and John Crystal has notified the board of his plans to resign in effect of February 28, 2022. Lastly, based on our year-to-date performance of $1.42 a share in our 2021 outlook, we now believe that exceeding our 2021 guidance of 178 is likely. However, we are not issuing new guidance, but note that the bias is toward overperformance. We continue to see tailwinds. head tailwinds that should drive continued growth in 2020, 2021 earnings and beyond. We are also issuing preliminary guidance for 2022 of 215 a share. This 2022 guidance does not include stock buybacks. This is approximately 21% income growth over 2021. I now turn our call over to CFO Paul Franco to give more details about the second quarter. Paul?