The Bancorp, Inc.

Good day and welcome to the Bancorp Inc's third quarter 2022 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note today's event is being recorded. I would now like to turn the conference over to Andres Viraslav, Investor Relations. Please go ahead.

Thank you, Operator. Good morning, and thank you for joining us today for the Bancorp's third quarter 2022 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 available via webcast on our website beginning at approximately 12 p.m. Eastern time today. The dial-in for the replay is 1-877-344-7529 with a confirmation code of 599-7176. 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 Security Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties which could cause actual results performance, or achievements that differ materially from those anticipated or suggested by such statements. For further discussions of these risks and uncertainties, please see the Bancorp's filing 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 the Bancorp's Chief Executive Officer, Damian Kozlowski. Damian?

Thank you, Andres. Good morning, everyone. The Bancorp generated 54 cents per share earnings from 14% revenue growth and 9% year-over-year expense growth, exclusive of a $1.75 million SEC civil monetary penalty this quarter. Net income climbed 8% year-over-year, with strong increases in net interest income and GDV, gross dollar value of transactions, with the impact of those increases partially offset by the SEC settlement. Pre-tax income rose 21%, excluding that settlement. Net interest income and net interest margin significantly increased this quarter. Net interest income was up 27%, driven by our 70% mix of variable rate loans and higher balances. NIM increased from 3.17% in Q2 to to 3.69 in Q3, as Fed fund increases disproportionately affect loan rates versus funding costs, which are contractually contained. Period end total loan balances, excluding health for sale, increased 11% over the linked quarter, led by real estate bridge lending, with 34% quarterly growth. GDV grew 15% compared to Q3 21, with significant growth across most verticals, with the exception of general purpose reloadable programs which continue to show modest declines, due mostly to the adoption of debit by our FinTech partners. Card fees year-over-year increased 5%, and other payment fees increased 17%. For the total envelope of activities in FinTech Solutions Group, fees in aggregate grew 6%. Due to product and customer expansion from our current partners and new members to our ecosystem, we returned to historical trend growth in the third quarter. First quarter of 22 showed only 2% GDV growth over 21%, due to the impact of stimulus in 21 and the loss of Vara. The second quarter showed improvement growing 5% over 2021 as these impacts lessened. We believe the third quarter reflected a more normalized GDV run rate and anticipate high single to mid double digit growth rates to be sustained over the foreseeable future. Revenue growth continues across our platform as lending volumes steadily increase and new payment partners are added to our ecosystem. The expansion of both net interest margin due to rising rates and payment fees across our verticals should support significantly increased profitability in 2023. We are issuing preliminary guidance for 23 of 320 a share, excluding the impact of future buybacks, but including the impact of rate increases based on Fed fund futures. We also reiterate 225 to 230 guidance for 22. The 320 guidance for 2023 would represent approximately a 40% increase in earnings per share over 2022, and result in an ROE percentage in the mid-20s and an ROA above 2%. We are also planning to increase our share repurchases to $25 million a quarter, or $100 million in 2023, from $15 million a quarter, or $60 million in 2022. I now turn the call over to Paul Frankel to give you more details on the third quarter.