The Bancorp Inc. (NASDAQ:TBBK) Q2 2020 Earnings Conference Call - Final Transcript

Jul 31, 2020 • 08:00 am ET


The Bancorp Inc. (NASDAQ:TBBK) Q2 2020 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by, and welcome to the Q2 2020 The Bancorp, Inc. Earnings Conference Call. [Operator Instructions] After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Andres Viroslav. Thank you. Please go ahead, sir.

Andres Viroslav

Thank you, operator. Good morning and thank you for joining us today for the Bancorp's second quarter 2020 financial results conference call. On the call with me today are Damian Kozlowski, Chief Executive Officer; and Paul Frenkiel, our Chief Financial Officer. This morning's call is being webcast on our website at There will be a replay of the call beginning at approximately 12:00 PM Eastern Time today. The dial-in for the replay is (855) 859-2056 with a confirmation code of 2755988.

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 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 these 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 the 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?

Damian Kozlowski

Thank you, Andres. Good morning, everyone, and thank you for joining us. We have continued to experience momentum in our core earnings, driven by higher interest income with falling interest expense, increased loan balances and higher payments volumes. In the second quarter 2020, Bancorp earned $0.35 a share from both increased fee and spread revenue.

Some of the highlights. Total loans increased 49% year-over-year. Loan interest, including loans held for sale, increased 39%. Total revenue increased 30% year-over-year, with net interest income climbing 45%. Net interest margins increased quarter-over-quarter 19 basis points to 3.53%. Payment card gross dollar volume (GDV) increased 43% year-over-year, while fees increased 18%. Non-interest expense was up 8% year-over-year, as expenses continue to be tightly managed even as total revenue climbed 30%. Pre-tax income increased 91% year-over-year and 55% quarter-over-quarter.

While the pandemic continues to be a significant source of market uncertainty, we have been able to achieve better revenue, productivity and operating efficiency during this time. We also are making investments in our platform. In addition, the impact of Fed actions, the government's SBA support, the macro retail trend from the physical to the virtual and financial services, and the removal of the BSA