The Bancorp, Inc.

Good morning, ladies and gentlemen, and welcome to the Bancorp First Quarter 2023 Earnings Conference Call. At this time, our line is in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Friday, April 28, 2023. I would now like to turn the conference over to Andres Viroslav. Please go ahead, sir.

Thank you, Operator. Good morning, and thank you for joining us today for the Bancorp's first quarter 2023 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 1-877-674-7070. with a confirmation code of 423750. Before I turn the call over to Damien, 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, but 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 would like to turn the call over to the Bancorp's Chief Executive Officer, Damian Kozlowski. Damian?

Thank you, Andres. The Bancorp earned $0.88 a share on 47% revenue growth and 25% expense growth. Net income grew 70% year-over-year. ROE for the first quarter was 28% versus 18% in the first quarter of 22. ROA for the first quarter was 2.6 versus 1.6 in the first quarter of 22. GDV growth was 19% year-over-year. FinTech Solutions fee growth was 24% year-over-year. NIM expanded quarter-over-quarter from 421 to 467. Efficiency ratio remained at 42% quarter-over-quarter, and loan growth, excluding loans held for sale, was 29% year-over-year, with a slight 2% decrease quarter-over-quarter, reflecting the steep increase in client borrowing costs. The recent dislocation in the banking market did not materially impact our company. With granular deposits spread across more than 130 million insured small accounts through our FinTech ecosystem, a lower risk variable rate and short duration credit book, and significant liquidity and borrowing capacity. HBPK was well-possessioned to manage the increased volatility in the beginning of 23. Over the last three years plus, we have purposely and methodically built a platform that would benefit from rising rates and rigorously protect our company from an interest rate shock, or systemic event risk created from a banking system dislocation. We have included two new schedules in our earnings release. The first is more detail on our deposit base that has an overwhelming majority of insured and low-balance stored value card accounts, and the second is a review of our significant borrowing capacity. The first quarter significantly surpassed our expectations in ROE, ROA, GDV growth, FinTech Solutions fee growth, NIM, efficiency ratio, net income growth, and EPS. Indications are that continued financial momentum will result in further improved metrics in 2023. Moreover, other potentially positive tailwinds that might additionally improve performance in 2023. Number one, above-trend payments, GDV growth of more than 15%. Two, a Fed funds rate above 5%. Three, increased NIM performance due to slower loan growth versus higher deposit growth. And four, purchase of agency, treasury, and other securities which have not been included in our forecast. We have not purchased significant long-term fixed rate securities since 2018. Due to these factors in our first quarter performance, we are raising guidance from $320 a share to $360 a share without including the impact of share buybacks of $25 million per quarter for 2023. I now turn the call over to Paul Frankel, our CFO, for more on the first quarter.