The Bancorp, Inc.

Good day and welcome to the Bancorp, Inc. Q2 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a question and answer session. You may register to ask a question at any time by pressing star 1 on your telephone keypad. You may withdraw your question by pressing star 2. Please note today's call will be recorded and I will be standing by if you should need any assistance. It is now my pleasure to turn the call over to Andres Biroslav. Please go ahead.

Thank you, Operator. Good morning, and thank you for joining us today for the Bancorp's second quarter 2024 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 1-800-934-5153. 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 in 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 the Bancorp's Chief Executive Officer, Damian Kozlowski. Damian?

Thank you, Andres. Good morning, everyone. The Bancorp earned $1.05 a share, or $1.07 adjusted for interest on a residual security from the securitization business exited in 2020. With revenue growth year-over-year of 7% and expense growth of 3%. ROE was 27%. NIM contracted to $4.97 from 5.15. quarter-over-quarter versus 43 year-over-year. This contraction was primarily due to the purchase of $900 million of long-term fixed-rate securities in April at a 5-11 yield. These purchases have mostly been financed through ongoing FinTech program deposits with limited borrowings. Thus, the impact of NIM has been lower than anticipated. The FinTech Solutions Group continues to show significant growth momentum from the ramp-up and expansion of new and existing programs broadly across the portfolio, and especially in B2B payments. GDP increased 13% year-over-year, and total fees from all FinTech activities increased 13%. This quarter is the first where we will begin to break out our credit sponsorship loan balances and fees in our financial reporting, with balances reported as consumer FinTech loans. As a key strategic initiative of the bank and objective Of our APEX 2030 strategy, we have spent the last few years building a platform that will enable existing and new partners to issue credit solutions to their customers. These loans will be generally short-term and mostly secured by our partners or distribute to investors. Over the next five years, we intend to build a diversified group of regulator-compliant credit sponsor programs that will mirror our best-in-class innovative capabilities in our FinTech payments ecosystem. On the lending side, we had year over year growth across the portfolio of 6%, led by small business lending with growth of 16% year over year and 4% quarter over quarter. Most notably, our institutional book has continued to stabilize and showed incremental growth quarter over quarter of 1%. Concerning our commercial real estate portfolio of multifamily transitional loans, we continue to expect little or no losses due to the current portfolio and individual loan leverage, and our underwriting standards for loans at their inception. We recently entered into an agreement to sell our one Oreo multifamily property, expected to close in December 24, with a sales price to cover the current other real estate-owned balance, plus the forecasted cost of improvements in process. Lastly, with continued strong growth in our FinTech activities, including credit sponsorship and growth across our lending portfolio, we are lifting our guidance to 435 from 525 a share without the impact of 50 million per quarter of share buybacks in 24. We intend to issue preliminary 2025 guidance in our third quarter press release. I now turn over the call to Paul Frankel for more color on the first quarter.