The Bancorp, Inc.

Good day and welcome to the first quarter 2022, the Bancorp, Inc. earnings conference call. At this time, all participants 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 then 1 on your touchstone telephone. If anyone should require assistance during the conference, please press star then 0 to reach an operator. As a reminder, this call is being recorded. I would like to turn the call over to Andrea Fioslav. You may begin.

Thank you, Operator. Good morning, and thank you for joining us today for the Bancorp's first quarter 2022 Financial Resource Conference call. On the call with me today are Damon 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 698-4967. Before I turn the call over to Damian, I'd like to remind everyone that when using this conference call, the words the least, anticipates, expects, and similar expressions are intended to identify forward-looking statements within the meaning of a 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 bank for its filings with the SEC. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date you're of. 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. In the first quarter, the Bancorp earned $29 million in net income, or $0.50 a share, from 5% year-over revenue year revenue growth excluding the impact of PPP-related interest and fees with an 8% reduction in expense. Loan interest income excluding PPP and discontinued loans increased 12% while non-interest income increased 4% year-over-year. Total loans excluding loans at fair value and reclassified discontinued operations loans grew 45% year-over-year and 10% quarter-over-quarter. Balance growth year-over-year was led by institutional banking, which includes our securities-backed line of credit, insurance-backed line of credit, and RIA financing, and real estate bridge lending. Real estate bridge lending has generated over $800 million in loans since inception, while institutional banking balances increased 32% year-over-year. All businesses continue to grow quarter-over-quarter, with real estate bridge lending growing 29%, institutional 8%, and leasing and SBA growth each growing 1%, excluding PPP loans. Gross dollar volume from McCart's business grew 2% year over year, even with the impact of one-time stimulus and other government payments in 21. Payments fees decreased 2%, reflecting the impact of VARO, which exited the bank in the second quarter of 21. GDV grew 15% over Q4 21, reflecting the impact of first quarter tax refund spending and other growth. We continue to experience business momentum in 22. Loan pipelines across our businesses remain robust and should offset any repayments in our loan book due to increasing interest rates. Our mostly floating rate real estate and institutional businesses grew significantly in the quarter. Our commercial business, which includes SBA and fleet leasing, was mostly flat during the quarter due to some maturities and repayments, but we should have growth in those portfolios for the balance of the year. With the predicted rise in interest rates throughout 2022, our lending portfolios, which are 70% floating, will increase net interest income after the impact of rate floors are exceeded. Our payments business showed resilience in the first quarter. In 2021, significant government stimulus in the first quarter made the 2021 GDVs hard to beat. However, due to continued growth in our existing and new programs, 22 first quarter was able to show a year-over-year increase of 2% in GDV, even without this stimulus, and additionally without borrow volume that exits the bank in the second quarter. We continue to see significant opportunities grow in 22 and beyond and should show increasing growth as the year progresses. Lastly, we have previously announced both our new FinTech hub in Sioux Falls and our proposed switch to licensing to an OCC-regulated national bank. We believe these changes solidify our commitment to the economic development of Sioux Falls and more appropriately reflect our nationally-based franchises and help align regulatory oversight with our primary competitor set. We look forward to completing the construction and build-out of our facilities in 2023 and our regulatory changes by the end of this year. I now turn our call over to our CFO, Paul Frankel, to give more details about the first quarter.