Business Wire | Oct 29, 2020 04:06PM EDT

The Bancorp, Inc. Reports Third Quarter 2020 Financial Results

Oct. 29, 2020

WILMINGTON, Del.--(BUSINESS WIRE)--Oct. 29, 2020--The Bancorp, Inc. ("The Bancorp") (NASDAQ: TBBK), a financial holding company, today reported financial results for the third quarter of 2020.

Highlights

* For the quarter ended September 30, 2020, The Bancorp earned net income of $23.1 million from continuing operations, and $0.40 diluted earnings per share from combined continuing and discontinued operations.

* Return on assets and equity for the quarter ended September 30, 2020 amounted to 1.5% and 17% (annualized), respectively, compared to 1.3% and 16% for the quarter ended June 30, 2020.

* Net interest margin amounted to 3.37% for the quarter ended September 30, 2020, compared to 3.35% for the quarter ended September 30, 2019 and 3.53% for the quarter ended June 30, 2020.

* Net interest income increased 33% to $50.0 million for the quarter ended September 30, 2020, compared to $37.6 million for the quarter ended September 30, 2019.

* Average loans and leases, including loans at fair value, increased 61% to $4.21 billion for the quarter ended September 30, 2020, compared to $2.62 billion for the quarter ended September 30, 2019.

* Prepaid, debit card and related fees increased 20% to $19.4 million for the quarter ended September 30, 2020, compared to $16.1 million for the quarter ended September 30, 2019. Gross dollar volume (GDV), representing total spend on cards, increased 39%.

* SBLOC (securities-backed lines of credit), IBLOC (insurance backed lines of credit) and advisor financing loans increased 58% year over year and 12% quarter over quarter to $1.5 billion at September 30, 2020.

* Small Business Loans, including those held at fair value, increased 13% year over year to $633 million at September 30, 2020, exclusive of $208 million of Paycheck Protection Program loans.

* As of September 30, 2020, The Bancorp originated approximately 1,250 Paycheck Protection Program loans, totaling approximately $208 million, which it expects will generate approximately $5.5 million of fees and interest. That income is being recognized over eleven months, beginning in April 2020. The average loan size was approximately $165,000 with 92% of the loans under $350,000.

* The average rate on $5.6 billion of average deposits and interest-bearing liabilities in the third quarter of 2020 was 0.18%. Average prepaid and debit card account deposits of $4.0 billion for third quarter 2020, reflected an increase of 62% over the $2.5 billion for the quarter ended September 30, 2019.

* Consolidated leverage ratio was 8.62% at September 30, 2020. The Bancorp and its subsidiary, The Bancorp Bank (the "Bank"), remain well capitalized.

* Book value per common share at September 30, 2020 was $9.71 per share compared to $8.52 at September 30, 2019, an increase of 14%, primarily as a result of retained earnings per share.

Damian Kozlowski, The Bancorp's Chief Executive Officer, said, "We continued to add new card programs into our payments ecosystem in the 3rd quarter, as well as adding several new direct rapid funds partners. These new relationships will be announced as new products and services enter the marketplace. Our pipelines continue to be very robust and significantly above historic norms suggesting continued growth in transaction volumes. In the 3rd quarter, we made a strategic determination as to our securitization business. We have been evaluating our securitization platform and its loan portfolio. After assessing its current profitability, market conditions and credit risk, we have decided to discontinue future securitization activity. The loan portfolio, comprised almost entirely of multi-family loans that have experienced few deferrals and delinquencies, will amortize over the next 3-5 years and be replaced by loans originated in other areas. We expect income from the portfolio to be stable over the first 2 years. A portion of the portfolio may be sold as whole loans as space is needed on our balance sheet for other lending activities. Our real estate team in our commercial SBA business will continue to originate select transactions. For full year 2020, we believe we will achieve at least $1.25 earnings per share. We now believe we have enough information to issue preliminary guidance for 2021. We expect to earn between $1.65 and $1.70 per share. $1.70 per share or approximately $100 million in net income is our current company budget for 2021."

The Bancorp reported net income of $23.3 million, or $0.40 per diluted share, for the quarter ended September 30, 2020, compared to net income of $20.4 million, or $0.36 per diluted share, for the quarter ended September 30, 2019. Tier one capital to assets (leverage), tier one capital to risk-weighted assets, total capital to risk-weighted assets and common equity-tier 1 to risk-weighted assets ratios were 8.62%, 14.26%, 14.68% and 14.26%, respectively, compared to well-capitalized minimums of 5%, 8%, 10% and 6.5%, respectively.

Conference Call Webcast

You may access the LIVE webcast of The Bancorp's Quarterly Earnings Conference Call at 8:00 AM ET Friday, October 30, 2020 by clicking on the webcast link on The Bancorp's homepage at www.thebancorp.com. Or, you may dial 844.775.2543, access code 5682938. You may listen to the replay of the webcast following the live call on The Bancorp's investor relations website or telephonically until Friday, November 6, 2020 by dialing 855.859.2056, access code 5682938.

The Bancorp, Inc. (NASDAQ: TBBK) is dedicated to serving the unique needs of non-bank financial service companies, ranging from entrepreneurial start-ups to those on the Fortune 500. The company's only subsidiary, The Bancorp Bank (Member FDIC, Equal Housing Lender), has been repeatedly recognized in the payments industry as the Top Issuer of Prepaid Cards (US), a top merchant sponsor bank and a top ACH originator. Specialized lending distinctions include National Preferred SBA Lender, a leading provider of securities-backed lines of credit, and one of the few bank-owned commercial vehicle leasing groups in the nation. For more information please visit www.thebancorp.com.

Forward-Looking Statements

Statements in this earnings release regarding The Bancorp's business which are not historical facts are "forward-looking statements." These statements may be identified by the use of forward-looking terminology, including but not limited to the words "may," "believe," "will," "expect," "look," "anticipate," "plan," "estimate," "continue," or similar words , and are based on current expectations about important economic, political, and technological factors, among others, and are subject to risks and uncertainties, which could cause the actual results, events or achievements to differ materially from those set forth in or implied by the forward-looking statements and related assumptions. These risks and uncertainties include those relating to the on-going COVID-19 pandemic, the impact it will have on our business and the industry as a whole, and the resulting governmental and societal responses. For further discussion of the risks and uncertainties to which these forward-looking statements may be subject, see The Bancorp's filings with the Securities Exchange Commission, including the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of those filings. The forward-looking statements speak only as of the date of this press release. The Bancorp does not undertake to publicly revise or update forward-looking statements in this press release to reflect events or circumstances that arise after the date of this earnings release, except as may be required under applicable law.

The Bancorp, Inc.

Financial highlights

(unaudited)

Three months ended Nine months ended

September 30, September 30,

Condensed income 2020 2019 2020 2019statement

(dollars in thousands except per share data)

Net interest $ 49,996 $ 37,560 $ 143,153 $ 106,109income

Provision for 1,297 650 5,798 2,950credit losses

Non-interestincome

Service fees on 8 8 23 69deposit accounts

ACH, card andother payment 1,760 2,590 5,313 7,414processing fees

Prepaid, debitcard and related 19,434 16,134 56,647 48,137fees

Net realized andunrealized gains(losses) on 684 13,704 (5,412 24,319commercial loans )originated forsale

Change in valueof investment in - - (45 ) -unconsolidatedentity

Leasing related 1,519 589 2,795 2,311income

Othernon-interest 947 490 1,996 1,379income

Totalnon-interest 24,352 33,515 61,317 83,629income

Non-interestexpense

Salaries andemployee 26,417 24,526 74,650 70,192benefits

Data processing 1,192 1,192 3,538 3,684expense

Legal expense 994 1,466 4,136 4,324

FDIC Insurance 2,180 860 7,687 4,884

Software 3,595 3,199 10,458 9,180

SEC settlement - 1,400 - 1,400

Leasetermination - - - 908expense

Othernon-interest 7,648 9,408 22,595 26,227expense

Totalnon-interest 42,026 42,051 123,064 120,799expense

Income fromcontinuingoperations 31,025 28,374 75,608 65,989before incometaxes

Income tax 7,894 7,975 19,033 17,585expense

Net income fromcontinuing 23,131 20,399 56,575 48,404operations

Discontinuedoperations

Income (loss)fromdiscontinued (1,671 ) 151 (2,720 ) 1,875operationsbefore incometaxes

Income taxexpense (1,794 ) 125 (2,058 ) 574(benefit)

Net income(loss) fromdiscontinued 123 26 (662 ) 1,301operations, netof tax

Net income $ 23,254 $ 20,425 $ 55,913 $ 49,705

Net income pershare fromcontinuing $ 0.40 $ 0.36 $ 0.98 $ 0.85operations -basic

Net income(loss) per sharefrom $ - $ - $ (0.01 ) $ 0.02discontinuedoperations -basic

Net income per $ 0.40 $ 0.36 $ 0.97 $ 0.87share - basic

Net income pershare fromcontinuing $ 0.40 $ 0.36 $ 0.97 $ 0.85operations -diluted

Net income(loss) per sharefrom $ - $ - $ (0.01 ) $ 0.02discontinuedoperations -diluted

Net income per $ 0.40 $ 0.36 $ 0.96 $ 0.87share - diluted

Weighted average 57,588,168 56,907,815 57,433,477 56,712,084shares - basic

Weighted average 58,471,192 57,413,297 58,051,833 57,152,371shares - diluted

Balance sheet

September 30,

June 30,

December 31,

September 30,

2020

2020

2019

2019

(dollars in thousands)

Assets:

Cash and cash equivalents

Cash and due from banks$

6,220

$

5,094

$

19,928

$

24,068

Interest earning deposits at Federal Reserve Bank294,758

475,627

924,544

932,440

Total cash and cash equivalents300,978

480,721

944,472

956,508

Investment securities, available-for-sale, at fair value

1,264,903

1,324,447

1,320,692

1,382,437

Investment securities, held-to-maturity, at cost

-

-

84,387

84,399

Commercial loans, at fair value

1,849,947

1,807,630

1,180,546

489,240

Loans, net of deferred fees and costs

2,488,760

2,322,737

1,824,245

1,683,377

Allowance for credit losses

(15,727

)

(14,625

)

(10,238

)

(10,360

)

Loans, net

2,473,033

2,308,112

1,814,007

1,673,017

Federal Home Loan Bank & Atlantic Community Bancshares stock

1,368

1,368

5,342

4,342

Premises and equipment, net

15,849

16,701

17,538

17,857

Accrued interest receivable

18,852

18,897

13,619

13,898

Intangible assets, net

2,563

2,710

2,315

2,698

Deferred tax asset, net

7,952

7,921

12,538

13,006

Investment in unconsolidated entity

31,783

34,064

39,154

49,431

Assets held for sale from discontinued operations

122,253

128,463

140,657

162,098

Other assets

79,821

83,003

81,696

94,605

Total assets$

6,169,302

$

6,214,037

$

5,656,963

$

4,943,536

Liabilities:

Deposits

Demand and interest checking$

4,882,834

$

5,089,741

$

4,402,740

$

3,844,747

Savings and money market505,928

455,458

174,290

25,950

Time deposits-

-

475,000

475,000

Total deposits5,388,762

5,545,199

5,052,030

4,345,697

Securities sold under agreements to repurchase

42

42

82

93

Senior debt

98,222

-

-

-

Subordinated debenture

13,401

13,401

13,401

13,401

Other long-term borrowings

40,462

40,639

40,991

41,166

Other liabilities

69,954

81,677

65,962

59,005

Total liabilities$

5,610,843

$

5,680,958

$

5,172,466

$

4,459,362

Shareholders' equity:

Common stock - authorized, 75,000,000 shares of $1.00 par value; 57,590,874 and 56,940,521 shares issued and outstanding at September 30, 2020 and 2019, respectively

57,591

57,555

56,941

56,911

Treasury stock (100,000 shares)

(866

)

(866

)

(866

)

(866

)

Additional paid-in capital

376,751

374,578

371,633

370,113

Retained earnings

104,282

81,028

50,742

48,888

Accumulated other comprehensive income

20,701

20,784

6,047

9,128

Total shareholders' equity

558,459

533,079

484,497

484,174

Total liabilities and shareholders' equity$

6,169,302

$

6,214,037

$

5,656,963

$

4,943,536

Balance sheet September 30, June 30, December 31, September 30,

2020 2020 2019 2019

(dollars in thousands)

Assets:

Cash and cashequivalents

Cash and due from $ 6,220 $ 5,094 $ 19,928 $ 24,068 banksInterest earning 294,758 475,627 924,544 932,440 deposits at FederalReserve BankTotal cash and cash 300,978 480,721 944,472 956,508 equivalents Investmentsecurities, 1,264,903 1,324,447 1,320,692 1,382,437 available-for-sale,at fair value

Investmentsecurities, - - 84,387 84,399 held-to-maturity,at cost

Commercial loans, 1,849,947 1,807,630 1,180,546 489,240 at fair value

Loans, net ofdeferred fees and 2,488,760 2,322,737 1,824,245 1,683,377 costs

Allowance for (15,727 ) (14,625 ) (10,238 ) (10,360 )credit losses

Loans, net 2,473,033 2,308,112 1,814,007 1,673,017

Federal Home LoanBank & Atlantic 1,368 1,368 5,342 4,342 CommunityBancshares stock

Premises and 15,849 16,701 17,538 17,857 equipment, net

Accrued interest 18,852 18,897 13,619 13,898 receivable

Intangible assets, 2,563 2,710 2,315 2,698 net

Deferred tax asset, 7,952 7,921 12,538 13,006 net

Investment inunconsolidated 31,783 34,064 39,154 49,431 entity

Assets held forsale from 122,253 128,463 140,657 162,098 discontinuedoperations

Other assets 79,821 83,003 81,696 94,605

Total assets $ 6,169,302 $ 6,214,037 $ 5,656,963 $ 4,943,536

Liabilities:

Deposits

Demand and interest $ 4,882,834 $ 5,089,741 $ 4,402,740 $ 3,844,747 checkingSavings and money 505,928 455,458 174,290 25,950 marketTime deposits - - 475,000 475,000

Total deposits 5,388,762 5,545,199 5,052,030 4,345,697

Securities soldunder agreements to 42 42 82 93 repurchase

Senior debt 98,222 - - -

Subordinated 13,401 13,401 13,401 13,401 debenture

Other long-term 40,462 40,639 40,991 41,166 borrowings

Other liabilities 69,954 81,677 65,962 59,005

Total liabilities $ 5,610,843 $ 5,680,958 $ 5,172,466 $ 4,459,362

Shareholders'equity:

Common stock -authorized,75,000,000 sharesof $1.00 par value;57,590,874 and56,940,521 shares 57,591 57,555 56,941 56,911 issued andoutstanding atSeptember 30, 2020and 2019,respectively

Treasury stock (866 ) (866 ) (866 ) (866 )(100,000 shares)

Additional paid-in 376,751 374,578 371,633 370,113 capital

Retained earnings 104,282 81,028 50,742 48,888

Accumulated othercomprehensive 20,701 20,784 6,047 9,128 income

Total shareholders' 558,459 533,079 484,497 484,174 equity

Total liabilities $ 6,169,302 $ 6,214,037 $ 5,656,963 $ 4,943,536 and shareholders'equity Average balance sheet and net interest income

Three months ended

September 30, 2020

Three months ended

September 30, 2019

(dollars in thousands)

Average

Average

Average

Average

Assets:

Balance

Interest

Rate

Balance

Interest

Rate

Interest earning assets:

Loans net of deferred fees and costs **$

4,202,054

$

44,318

4.22

%

$

2,608,427

$

35,103

5.38

%

Leases - bank qualified*8,026

146

7.28

%

14,067

252

7.17

%

Investment securities-taxable1,300,191

7,911

2.43

%

1,429,222

10,485

2.93

%

Investment securities-nontaxable*4,041

35

3.46

%

6,172

54

3.50

%

Interest earning deposits at Federal Reserve Bank413,259

106

0.10

%

474,499

2,545

2.15

%

Net interest earning assets

5,927,571

52,516

3.54

%

4,532,387

48,439

4.27

%

Allowance for credit losses

(14,587

)

(9,988

)

Assets held for sale from discontinued operations

124,916

890

2.85

%

145,347

1,609

4.43

%

Other assets

195,125

298,191

$

6,233,025

$

4,965,937

Liabilities and Shareholders' Equity:

Deposits:

Demand and interest checking$

5,079,711

$

1,591

0.13

%

$

3,829,457

$

7,644

0.80

%

Savings and money market

484,323

139

0.11

%

26,444

52

0.79

%

Time-

-

0.00

%

269,464

1,338

1.99

%

Total deposits

5,564,034

1,730

0.12

%

4,125,365

9,034

0.88

%

Short-term borrowings

3,260

1

0.12

%

256,945

1,595

2.48

%

Securities sold under agreements to repurchase

41

-

0.00

%

93

-

0.00

%

Subordinated debentures

13,401

118

3.52

%

13,401

186

5.55

%

Senior debt

53,260

633

4.75

%

-

-

0.00

%

Total deposits and liabilities

5,633,996

2,482

0.18

%

4,395,804

10,815

0.98

%

Other liabilities

53,260

98,980

Total liabilities

5,687,256

4,494,784

Shareholders' equity

545,769

471,153

$

6,233,025

$

4,965,937

Net interest income on tax equivalent basis*$

50,924

$

39,233

Tax equivalent adjustment38

64

Net interest income$

50,886

$

39,169

Net interest margin *3.37

%

3.35

%

* Full taxable equivalent basis, using a statutory Federal tax rate of 21% for 2020 and 2019.

** Includes loans held at fair value.

Average balance sheet Three months ended Three months endedand net interest income September 30, 2020 September 30, 2019

(dollars in thousands)

Average Average Average Average

Assets: Balance Interest Rate Balance Interest Rate

Interest earningassets:

Loans net of deferred $ 4,202,054 $ 44,318 4.22 % $ 2,608,427 $ 35,103 5.38 %fees and costs **Leases - bank 8,026 146 7.28 % 14,067 252 7.17 %qualified*Investment 1,300,191 7,911 2.43 % 1,429,222 10,485 2.93 %securities-taxableInvestment 4,041 35 3.46 % 6,172 54 3.50 %securities-nontaxable*Interest earning 413,259 106 0.10 % 474,499 2,545 2.15 %deposits at FederalReserve BankNet interest earning 5,927,571 52,516 3.54 % 4,532,387 48,439 4.27 %assets

Allowance for credit (14,587 ) (9,988 )losses

Assets held for salefrom discontinued 124,916 890 2.85 % 145,347 1,609 4.43 %operations

Other assets 195,125 298,191

$ 6,233,025 $ 4,965,937

Liabilities andShareholders' Equity:

Deposits:

Demand and interest $ 5,079,711 $ 1,591 0.13 % $ 3,829,457 $ 7,644 0.80 %checkingSavings and money 484,323 139 0.11 % 26,444 52 0.79 %market

Time - - 0.00 % 269,464 1,338 1.99 %

Total deposits 5,564,034 1,730 0.12 % 4,125,365 9,034 0.88 %



Short-term borrowings 3,260 1 0.12 % 256,945 1,595 2.48 %

Securities sold underagreements to 41 - 0.00 % 93 - 0.00 %repurchase

Subordinated 13,401 118 3.52 % 13,401 186 5.55 %debentures

Senior debt 53,260 633 4.75 % - - 0.00 %

Total deposits and 5,633,996 2,482 0.18 % 4,395,804 10,815 0.98 %liabilities

Other liabilities 53,260 98,980

Total liabilities 5,687,256 4,494,784



Shareholders' equity 545,769 471,153

$ 6,233,025 $ 4,965,937

Net interest income on $ 50,924 $ 39,233tax equivalent basis*

Tax equivalent 38 64adjustment

Net interest income $ 50,886 $ 39,169

Net interest margin * 3.37 % 3.35 %



* Full taxable equivalent basis, using a statutory Federal tax rate of 21% for2020 and 2019.

** Includes loans held at fair value.



Average balance sheet and net interest income

Nine months ended

September 30, 2020

Nine months ended

September 30, 2019

(dollars in thousands)

Average

Average

Average

Average

Assets:

Balance

Interest

Rate

Balance

Interest

Rate

Interest earning assets:

Loans net of deferred fees and costs **$

3,798,104

$

124,924

4.39

%

$

2,365,317

$

95,001

5.36

%

Leases - bank qualified*9,401

509

7.22

%

15,755

947

8.01

%

Investment securities-taxable1,343,211

28,594

2.84

%

1,394,234

32,649

3.12

%

Investment securities-nontaxable*4,537

110

3.23

%

6,771

168

3.31

%

Interest earning deposits at Federal Reserve Bank444,323

1,836

0.55

%

439,414

7,502

2.28

%

Net interest earning assets

5,599,576

155,973

3.71

%

4,221,491

136,267

4.30

%

Allowance for credit losses

(13,225

)

(9,537

)

Assets held for sale from discontinued operations

130,880

3,259

3.32

%

157,630

5,293

4.48

%

Other assets

243,629

285,843

$

5,960,860

$

4,655,427

Liabilities and Shareholders' Equity:

Deposits:

Demand and interest checking$

4,858,666

$

9,676

0.27

%

$

3,840,141

$

25,260

0.88

%

Savings and money market298,049

309

0.14

%

28,073

129

0.61

%

Time106,113

1,483

1.86

%

90,808

1,338

1.96

%

Total deposits

5,262,828

11,468

0.29

%

3,959,022

26,727

0.90

%

Short-term borrowings

25,419

181

0.95

%

137,860

2,624

2.54

%

Securities sold under agreements to repurchase

51

-

0.00

%

92

-

0.00

%

Subordinated debentures

13,401

408

4.06

%

13,401

573

5.70

%

Senior debt

17,883

633

4.72

%

-

-

0.00

%

Total deposits and liabilities

5,319,582

12,690

0.32

%

4,110,375

29,924

0.97

%

Other liabilities

119,961

99,577

Total liabilities

5,439,543

4,209,952

Shareholders' equity

521,317

445,475

$

5,960,860

$

4,655,427

Net interest income on tax equivalent basis*$

146,542

$

111,636

Tax equivalent adjustment130

234

Net interest income$

146,412

$

111,402

Net interest margin *3.41

%

3.40

%

* Full taxable equivalent basis, using a statutory rate of 21% for 2020 and 2019.

** Includes loans held at fair value.

Average balance sheet and net Nine months ended Nine months endedinterest income September 30, 2020 September 30, 2019

(dollars in thousands)

Average Average Average Average

Assets: Balance Interest Rate Balance Interest Rate

Interest earning assets:

Loans net of deferred fees $ 3,798,104 $ 124,924 4.39 % $ 2,365,317 $ 95,001 5.36 %and costs **Leases - bank qualified* 9,401 509 7.22 % 15,755 947 8.01 %

Investment securities-taxable 1,343,211 28,594 2.84 % 1,394,234 32,649 3.12 %

Investment 4,537 110 3.23 % 6,771 168 3.31 %securities-nontaxable*Interest earning deposits at 444,323 1,836 0.55 % 439,414 7,502 2.28 %Federal Reserve BankNet interest earning assets 5,599,576 155,973 3.71 % 4,221,491 136,267 4.30 %

Allowance for credit losses (13,225 ) (9,537 )

Assets held for sale from 130,880 3,259 3.32 % 157,630 5,293 4.48 %discontinued operations

Other assets 243,629 285,843

$ 5,960,860 $ 4,655,427

Liabilities and Shareholders'Equity:

Deposits:

Demand and interest checking $ 4,858,666 $ 9,676 0.27 % $ 3,840,141 $ 25,260 0.88 %

Savings and money market 298,049 309 0.14 % 28,073 129 0.61 %

Time 106,113 1,483 1.86 % 90,808 1,338 1.96 %

Total deposits 5,262,828 11,468 0.29 % 3,959,022 26,727 0.90 %

Short-term borrowings 25,419 181 0.95 % 137,860 2,624 2.54 %

Securities sold under 51 - 0.00 % 92 - 0.00 %agreements to repurchase

Subordinated debentures 13,401 408 4.06 % 13,401 573 5.70 %

Senior debt 17,883 633 4.72 % - - 0.00 %

Total deposits and 5,319,582 12,690 0.32 % 4,110,375 29,924 0.97 %liabilities

Other liabilities 119,961 99,577

Total liabilities 5,439,543 4,209,952

Shareholders' equity 521,317 445,475

$ 5,960,860 $ 4,655,427

Net interest income on tax $ 146,542 $ 111,636equivalent basis* Tax equivalent adjustment 130 234

Net interest income $ 146,412 $ 111,402

Net interest margin * 3.41 % 3.40 %



* Full taxable equivalent basis, using a statutory rate of 21% for 2020 and2019.

** Includes loans held at fair value.



Allowance for credit losses:

Nine months ended

Year ended

September 30,

September 30,

December 31,

2020

2019

2019

(dollars in thousands)

Balance in the allowance for loan and lease losses at beginning of period (1)

$

12,875

$

8,653

$

8,653

Loans charged-off:

SBA non-real estate

1,350

995

1,362

Direct lease financing

2,178

391

528

Other consumer loans

-

3

1,103

Total

3,528

1,389

2,993

Recoveries:

SBA non-real estate

82

94

125

Direct lease financing

502

51

51

Other consumer loans

-

1

2

Total

584

146

178

Net charge-offs

2,944

1,243

2,815

Provision credited to allowance, excluding commitment provision

5,796

2,950

4,400

Balance in allowance for credit losses at end of period

$

15,727

$

10,360

$

10,238

Net charge-offs/average loans

0.08

%

0.05

%

0.12

%

Net charge-offs/average loans (annualized)

0.10

%

0.06

%

0.12

%

Net charge-offs/average assets

0.05

%

0.03

%

0.06

%

(1) Excludes activity from assets held for sale from discontinued operations.

Loan portfolio:

September 30,

June 30,

December 31,

September 30,

2020

2020

2019

2019

(in thousands)

SBL non-real estate

$

293,488

$

293,692

$

84,579

$

84,181

SBL commercial mortgage

270,264

259,020

218,110

209,008

SBL construction

27,169

33,193

45,310

38,116

Small business loans *

590,921

585,905

347,999

331,305

Direct lease financing

430,675

422,505

434,460

412,755

SBLOC / IBLOC**

1,428,253

1,287,350

1,024,420

920,463

Advisor financing ***

26,600

15,529

-

-

Other specialty lending

2,194

2,706

3,055

3,167

Other consumer loans ****

3,809

4,003

4,554

6,388

2,482,452

2,317,998

1,814,488

1,674,078

Unamortized loan fees and costs

6,308

4,739

9,757

9,299

Total loans, net of unamortized fees and costs

$

2,488,760

$

2,322,737

$

1,824,245

$

1,683,377

Small business portfolio:

September 30,

June 30,

December 31,

September 30,

2020

2020

2019

2019

(in thousands)

SBL, including unamortized fees and costs

590,314

583,935

352,214

337,440

SBL, included in commercial loans held at fair value

250,958

225,401

220,358

222,007

Total small business loans

$

841,272

$

809,336

$

572,572

$

559,447

* The preceding table shows small business loans and small business loans held at fair value, which consist of the government guaranteed portion of SBA loans at the dates indicated (in thousands).

** Securities Backed Lines of Credit (SBLOC) are collateralized by marketable securities, while Insurance Backed Lines of Credit (IBLOC) are collateralized by the cash surrender value of insurance policies.

*** In 2020, we began originating loans to investment advisors for purposes of debt refinance, acquisition of another firm or internal succession. Maximum loan amounts are subject to loan to value ratios of 70%, based on third party business appraisals, but may be increased depending upon the debt service coverage ratio. Personal guarantees and blanket business liens are obtained as appropriate.

**** Included in the table above under Other consumer loans are demand deposit overdrafts reclassified as loan balances totaling $151,000 and $882,000 at September 30, 2020 and December 31, 2019, respectively. Estimated overdraft charge-offs and recoveries are reflected in the allowance for credit losses.

Allowance for Nine months ended Year ended credit losses:

September 30, September 30, December 31,

2020 2019 2019

(dollars in thousands)



Balance in theallowance for loanand lease losses $ 12,875 $ 8,653 $ 8,653 at beginning ofperiod (1)



Loans charged-off:

SBA non-real 1,350 995 1,362 estate

Direct lease 2,178 391 528 financing

Other consumer - 3 1,103 loans

Total 3,528 1,389 2,993



Recoveries:

SBA non-real 82 94 125 estate

Direct lease 502 51 51 financing

Other consumer - 1 2 loans

Total 584 146 178

Net charge-offs 2,944 1,243 2,815

Provision creditedto allowance,excluding 5,796 2,950 4,400 commitmentprovision



Balance inallowance for $ 15,727 $ 10,360 $ 10,238 credit losses atend of period

Net charge-offs/ 0.08 % 0.05 % 0.12 % average loans

Net charge-offs/average loans 0.10 % 0.06 % 0.12 % (annualized)

Net charge-offs/ 0.05 % 0.03 % 0.06 % average assets

(1) Excludes activity from assets held for sale from discontinued operations.

Loan portfolio: September 30, June 30, December 31, September 30,

2020 2020 2019 2019

(in thousands)

SBL non-real $ 293,488 $ 293,692 $ 84,579 $ 84,181estate

SBL commercial 270,264 259,020 218,110 209,008mortgage

SBL construction 27,169 33,193 45,310 38,116

Small business 590,921 585,905 347,999 331,305loans *

Direct lease 430,675 422,505 434,460 412,755financing

SBLOC / IBLOC** 1,428,253 1,287,350 1,024,420 920,463

Advisor financing 26,600 15,529 - -***

Other specialty 2,194 2,706 3,055 3,167lending

Other consumer 3,809 4,003 4,554 6,388loans ****

2,482,452 2,317,998 1,814,488 1,674,078

Unamortized loan 6,308 4,739 9,757 9,299fees and costs

Total loans, netof unamortized $ 2,488,760 $ 2,322,737 $ 1,824,245 $ 1,683,377fees and costs

Small business September 30, June 30, December 31, Septemberportfolio: 30,

2020 2020 2019 2019

(in thousands)

SBL, includingunamortized fees 590,314 583,935 352,214 337,440and costs

SBL, included incommercial loans 250,958 225,401 220,358 222,007held at fair value

Total small $ 841,272 $ 809,336 $ 572,572 $ 559,447business loans



* The preceding table shows small business loans and small business loans held at fair value, which consist of the government guaranteed portion of SBA loans at the dates indicated (in thousands).

** Securities Backed Lines of Credit (SBLOC) are collateralized by marketable securities, while Insurance Backed Lines of Credit (IBLOC) are collateralized by the cash surrender value of insurance policies.

*** In 2020, we began originating loans to investment advisors for purposes of debt refinance, acquisition of another firm or internal succession. Maximum loan amounts are subject to loan to value ratios of 70%, based on third party business appraisals, but may be increased depending upon the debt service coverage ratio. Personal guarantees and blanket business liens are obtained as appropriate.

**** Included in the table above under Other consumer loans are demand deposit overdrafts reclassified as loan balances totaling $151,000 and $882,000 at September 30, 2020 and December 31, 2019, respectively. Estimated overdraft charge-offs and recoveries are reflected in the allowance for credit losses.

Small business loans as of September 30, 2020

Loan principal

(in millions)

U.S. government guaranteed portion of SBA loans (a) $ 334

Paycheck Protection Program Loans (PPP) (a) 208

Commercial mortgage SBA (b) 165

Construction SBA (c) 13

Unguaranteed portion of U.S. government guaranteed loans (d) 98

Non-SBA small business loans (e) 18

Total principal $ 836

Fair value adjustment (f) 6

Unamortized fees (1 )

Total small business loans $ 841

(a) This is the portion of SBA 7a loans (7a) and PPP which have been guaranteed by the U.S. government, and therefore are assumed to have no credit risk.

(b) Substantially all of these loans are made under the SBA 504 Fixed Asset Financing program (504) which dictates origination date loan to value percentages (LTV), generally 50-60%, to which the bank adheres.

(c) Of the $13 million Construction SBA loans, $10 million are 504 first mortgages with an origination date LTV of 50-60% and $3 million are SBA interim loans with an approved SBA post-construction full takeout/payoff.

(d) The $98 million represents the unguaranteed portion of 7a loans which are 70% or more guaranteed by the U.S. government. 7a loans are not made on the basis of real estate LTV; however, they are subject to SBA's "All Available Collateral" rule which mandates that to the extent a borrower or its 20% or greater principals have available collateral (including personal residences), the collateral must be pledged to fully collateralize the loan, after applying SBA-determined liquidation rates. In addition, all 7a and 504 loans require the personal guaranty of all 20% or greater owners.

(e) The $18 million non-SBA loans are mainly comprised of approximately 20 conventional coffee/doughnut/carryout franchisee note purchases. The majority of purchased notes were made to multi-unit operators and are considered seasoned and have performed as agreed. A $2 million guaranty by the seller, for an 11% first loss piece, is in place until August 2021.

(f) The fair value adjustment applies to the U.S. government guaranteed portion of SBA loans.

Additionally, the CARES Act of 2020 has provided significant support for SBA loans including funding intended to provide six months of interest payments on SBA loans, as well as other accommodations to provide for the payment of payroll and other operating expenses. This support is expiring in the fourth quarter of 2020.

(a) This is the portion of SBA 7a loans (7a) and PPP which have been guaranteedby the U.S. government, and therefore are assumed to have no credit risk.

(b) Substantially all of these loans are made under the SBA 504 Fixed AssetFinancing program (504) which dictates origination date loan to valuepercentages (LTV), generally 50-60%, to which the bank adheres.

(c) Of the $13 million Construction SBA loans, $10 million are 504 firstmortgages with an origination date LTV of 50-60% and $3 million are SBA interimloans with an approved SBA post-construction full takeout/payoff.

(d) The $98 million represents the unguaranteed portion of 7a loans which are70% or more guaranteed by the U.S. government. 7a loans are not made on thebasis of real estate LTV; however, they are subject to SBA's "All AvailableCollateral" rule which mandates that to the extent a borrower or its 20% orgreater principals have available collateral (including personal residences),the collateral must be pledged to fully collateralize the loan, after applyingSBA-determined liquidation rates. In addition, all 7a and 504 loans require thepersonal guaranty of all 20% or greater owners.

(e) The $18 million non-SBA loans are mainly comprised of approximately 20conventional coffee/doughnut/carryout franchisee note purchases. The majorityof purchased notes were made to multi-unit operators and are consideredseasoned and have performed as agreed. A $2 million guaranty by the seller, foran 11% first loss piece, is in place until August 2021.

(f) The fair value adjustment applies to the U.S. government guaranteed portionof SBA loans.

Additionally, the CARES Act of 2020 has provided significant support for SBAloans including funding intended to provide six months of interest payments onSBA loans, as well as other accommodations to provide for the payment ofpayroll and other operating expenses. This support is expiring in the fourthquarter of 2020.

Type as of September 30, 2020

(Excludes government guaranteed portion of SBA 7a and PPP loans)

SBL commercial mortgage*

SBL construction*

SBL non-real estate

Total

% Total

(dollars in millions)

Hotels

$

66

$

2

$

-

$

68

24

%

Professional services offices

21

-

3

24

8

%

Full-service restaurants

15

1

4

20

7

%

Child day care and youth services

15

-

1

16

5

%

Bakeries

4

-

12

16

5

%

Elderly assisted living facilities

2

8

2

12

4

%

General warehousing and storage

11

-

-

11

4

%

Limited-service restaurants and catering

7

-

3

10

3

%

Fitness/rec centers and instruction

7

-

2

9

3

%

Amusement and recreation industries

4

2

3

9

3

%

Car washes

5

3

-

8

3

%

Funeral homes

7

-

-

7

2

%

New and used car dealers

4

-

-

4

1

%

Automotive servicing

3

-

-

3

1

%

Other

51

-

26

77

27

%

Total

$

222

$

16

$

56

$

294

100

%

* Substantially all are SBA loans with 50-60% loan to value ratios at their origination.

Type as of September30, 2020

(Excludes government guaranteedportion of SBA 7a and PPP loans)

SBL SBL SBL % commercial construction* non-real Total Total mortgage* estate

(dollars in millions)

Hotels $ 66 $ 2 $ - $ 68 24 %

Professional services 21 - 3 24 8 %offices

Full-service 15 1 4 20 7 %restaurants

Child day care and 15 - 1 16 5 %youth services

Bakeries 4 - 12 16 5 %

Elderly assisted living 2 8 2 12 4 %facilities

General warehousing and 11 - - 11 4 %storage

Limited-servicerestaurants and 7 - 3 10 3 %catering

Fitness/rec centers and 7 - 2 9 3 %instruction

Amusement and 4 2 3 9 3 %recreation industries

Car washes 5 3 - 8 3 %

Funeral homes 7 - - 7 2 %

New and used car 4 - - 4 1 %dealers

Automotive servicing 3 - - 3 1 %

Other 51 - 26 77 27 %

Total $ 222 $ 16 $ 56 $ 294 100 %

* Substantially all are SBA loans with 50-60% loan to value ratios at theirorigination.

State diversification as of September 30, 2020

(Excludes government guaranteed portion of SBA 7a and PPP loans)

SBL commercial mortgage*

SBL construction*

SBL non-real estate

Total

% Total

(dollars in millions)

Florida

$

35

$

8

$

8

$

51

17

%

California

36

2

5

43

15

%

Pennsylvania

30

-

4

34

12

%

Illinois

26

-

3

29

10

%

North Carolina

19

3

3

25

9

%

New York

10

2

5

17

6

%

Texas

11

-

5

16

5

%

Tennessee

11

-

1

12

4

%

New Jersey

3

1

7

11

4

%

Virginia

9

-

2

11

4

%

Georgia

5

-

2

7

2

%

Colorado

3

-

1

4

1

%

Michigan

3

-

1

4

1

%

Washington

3

-

-

3

1

%

Ohio

2

-

1

3

1

%

Other states

16

-

8

24

8

%

Total

$

222

$

16

$

56

$

294

100

%

* Substantially all are SBA loans with 50-60% loan to value ratios at their origination.

State diversification as of September 30, 2020

(Excludes government guaranteed portion of SBA 7a and PPP loans)

SBL commercial SBL SBL non-real Total % mortgage* construction* estate Total

(dollars in millions)

Florida $ 35 $ 8 $ 8 $ 51 17 %

California 36 2 5 43 15 %

Pennsylvania 30 - 4 34 12 %

Illinois 26 - 3 29 10 %

North Carolina 19 3 3 25 9 %

New York 10 2 5 17 6 %

Texas 11 - 5 16 5 %

Tennessee 11 - 1 12 4 %

New Jersey 3 1 7 11 4 %

Virginia 9 - 2 11 4 %

Georgia 5 - 2 7 2 %

Colorado 3 - 1 4 1 %

Michigan 3 - 1 4 1 %

Washington 3 - - 3 1 %

Ohio 2 - 1 3 1 %

Other states 16 - 8 24 8 %

Total $ 222 $ 16 $ 56 $ 294 100 %

* Substantially all are SBA loans with 50-60% loan to value ratios at theirorigination.

Top 10 loans as of September 30, 2020

Type*

State

SBL commercial mortgage*

SBL construction*

Total

(in millions)

Professional services office

CA

$

9

$

-

$

9

Hotel

FL

9

-

9

General warehouse

PA

7

-

7

Hotel

NC

6

-

6

Assisted living facility

FL

-

5

5

Hotel

NC

5

-

5

Fitness and rec center

PA

5

-

5

Hotel

PA

4

-

4

Hotel

TN

4

-

4

Gas Station

VA

3

-

3

Total

$

52

$

5

$

57

* All of the top 10 loans are SBA and with the rest of the commercial real estate portfolio were originated with an approximate loan to value ratio between 50% and 60% at origination.

Commercial real estate loans held at fair value which were originated for sale or securitization, excluding SBA loans, are as follows including LTV at origination:

Top 10 loans as ofSeptember 30, 2020

Type* State SBL commercial SBL Total mortgage* construction*

(in millions)

Professional services CA $ 9 $ - $ 9office

Hotel FL 9 - 9

General warehouse PA 7 - 7

Hotel NC 6 - 6

Assisted living facility FL - 5 5

Hotel NC 5 - 5

Fitness and rec center PA 5 - 5

Hotel PA 4 - 4

Hotel TN 4 - 4

Gas Station VA 3 - 3

Total $ 52 $ 5 $ 57

* All of the top 10 loans are SBA and with the rest of the commercial real estate portfolio were originated with an approximate loan to value ratio between 50% and 60% at origination.

Commercial real estate loans held at fair value which were originated for sale or securitization, excluding SBA loans, are as follows including LTV at origination:

Type as of September 30,2020

Origination Weighted averageType # Balance Loans date LTV minimum interest rate

(dollars in millions)

Multifamily (apartments) 173 $ 1,463 76 % 4.77 %

Hospitality (hotels and 11 63 65 % 5.73 %lodging)

Retail 8 52 70 % 4.62 %

Other 7 25 70 % 5.21 %

199 $ 1,603 75 % 4.81 %

Fair value adjustment (4 )

Total $ 1,599

State diversification as of September 30, 2020

15 Largest loans (all multifamily) as of September 30, 2020

State

Balance

Origination

date LTV

State

Balance

Origination

date LTV

(dollars in millions)

(dollars in millions)

Texas

$

396

76

%

North Carolina

$

43

78

%

Georgia

252

78

%

Texas

38

79

%

Arizona

123

76

%

Texas

35

80

%

North Carolina

111

77

%

Pennsylvania

32

77

%

Nevada

56

80

%

Georgia

31

80

%

Alabama

54

76

%

Nevada

28

80

%

Other states each <$50 million

611

73

%

Texas

28

75

%

Total

$

1,603

75

%

Texas

27

77

%

Arizona

26

79

%

Mississippi

25

79

%

Texas

24

77

%

North Carolina

24

77

%

Texas

24

77

%

California

23

65

%

Georgia

23

79

%

15 Largest loans

$

431

77

%

State diversification as of September 15 Largest loans (all multifamily) as30, 2020 of September 30, 2020

Origination OriginationState Balance State Balance date LTV date LTV

(dollars (dollars in in millions) millions)

Texas $ 396 76 % North $ 43 78 % Carolina

Georgia 252 78 % Texas 38 79 %

Arizona 123 76 % Texas 35 80 %

North 111 77 % Pennsylvania 32 77 %Carolina

Nevada 56 80 % Georgia 31 80 %

Alabama 54 76 % Nevada 28 80 %

Otherstates each 611 73 % Texas 28 75 %<$50million

Total $ 1,603 75 % Texas 27 77 %

Arizona 26 79 %

Mississippi 25 79 %

Texas 24 77 %

North 24 77 % Carolina

Texas 24 77 %

California 23 65 %

Georgia 23 79 %

15 Largest $ 431 77 % loans

Institutional banking loans outstanding at September 30, 2020

Type

Principal

% of total

(dollars in millions)

Securities backed lines of credit (SBLOC)

$

1,069

73

%

Insurance backed lines of credit (IBLOC)

359

25

%

Advisor financing

27

2

%

Total

$

1,455

100

%

For SBLOC, we generally lend up to 50% of the value of equities and 80% for investment grade securities. While equities have fallen in excess of 30% in recent periods, the reduction in collateral value of brokerage accounts collateralizing SBLOCs generally has been less, for two reasons. First, many collateral accounts are "balanced" and accordingly have a component of debt securities, which have either not decreased in value as much as equities, or in some cases may have increased in value. Secondly, many of these accounts have the benefit of professional investment advisors who provided some protection against market downturns, through diversification and other means. Additionally, borrowers often utilize only a portion of collateral value, which lowers the % principal to collateral.

Institutional banking loans outstanding atSeptember 30, 2020

Type Principal % of total

(dollars in millions)

Securities backed lines of credit (SBLOC) $ 1,069 73 %

Insurance backed lines of credit (IBLOC) 359 25 %

Advisor financing 27 2 %

Total $ 1,455 100 %

For SBLOC, we generally lend up to 50% of the value of equities and 80% for investment grade securities. While equities have fallen in excess of 30% in recent periods, the reduction in collateral value of brokerage accounts collateralizing SBLOCs generally has been less, for two reasons. First, many collateral accounts are "balanced" and accordingly have a component of debt securities, which have either not decreased in value as much as equities, or in some cases may have increased in value. Secondly, many of these accounts have the benefit of professional investment advisors who provided some protection against market downturns, through diversification and other means. Additionally, borrowers often utilize only a portion of collateral value, which lowers the % principal to collateral.

Top 10 SBLOC loans at September 30, 2020

Principal amount % Principal to collateral

(dollars in millions)

$ 33 30 %

17 39 %

14 22 %

12 33 %

10 47 %

10 31 %

9 23 %

9 75 %

9 49 %

8 22 %

Total $ 131 35 %

Insurance backed lines of credit (IBLOC)

IBLOC loans are backed by the cash value of life insurance policies which have been assigned to us. We lend up to 100% of such cash value. Our underwriting standards require approval of the insurance companies which carry the policies backing these loans. Currently, seven insurance companies have been approved and, as of January 21, 2020 all were rated Superior (A+ or better) by AM BEST. Moody's ratings were at least A rated, and ranged from A3 to Aa2.

Direct lease financing* by type as of September30, 2020

Principal balance % Total

(dollars in millions)

Government agencies and public institutions** $ 76 18 %

Construction 74 18 %

Waste management and remediation services 61 14 %

Real estate, rental and leasing 44 10 %

Retail trade 36 8 %

Transportation and warehousing 35 8 %

Health care and social assistance 26 6 %

Professional, scientific, and technical services 19 4 %

Wholesale trade 14 3 %

Manufacturing 14 3 %

Educational services 9 2 %

Arts, entertainment, and recreation 5 1 %

Other 18 5 %

Total $ 431 100 %

* Of the total $431 million of direct lease financing, $401 million consisted of vehicle leases with the remaining balance consisting of equipment leases.

** Includes public universities and school districts

* Of the total $431 million of direct lease financing, $401 million consistedof vehicle leases with the remaining balance consisting of equipment leases.

** Includes public universities and school districts

Direct lease financing by state as of September 30, 2020

State

Principal balance

% Total

(dollars in millions)

Florida

$

92

20

%

California

30

7

%

New Jersey

29

7

%

Pennsylvania

26

6

%

New York

25

6

%

North Carolina

22

5

%

Utah

21

5

%

Maryland

20

5

%

Washington

16

4

%

Georgia

12

3

%

Missouri

12

3

%

Connecticut

12

3

%

Texas

12

3

%

Alabama

11

3

%

South Carolina

9

2

%

Other states

82

18

%

Total

$

431

100

%

Direct lease financing by state as of September30, 2020

State Principal balance % Total

(dollars in millions)

Florida $ 92 20 %

California 30 7 %

New Jersey 29 7 %

Pennsylvania 26 6 %

New York 25 6 %

North Carolina 22 5 %

Utah 21 5 %

Maryland 20 5 %

Washington 16 4 %

Georgia 12 3 %

Missouri 12 3 %

Connecticut 12 3 %

Texas 12 3 %

Alabama 11 3 %

South Carolina 9 2 %

Other states 82 18 %

Total $ 431 100 %

Capital ratios:

Tier 1 capital

Tier 1 capital

Total capital

Common equity

to average

to risk-weighted

to risk-weighted

tier 1 to risk

assets ratio

assets ratio

assets ratio

weighted assets

As of September 30, 2020

The Bancorp, Inc.

8.62

%

14.26

%

14.68

%

14.26

%

The Bancorp Bank

8.50

%

14.04

%

14.45

%

14.04

%

"Well capitalized" institution (under FDIC regulations-Basel III)

5.00

%

8.00

%

10.00

%

6.50

%

As of December 31, 2019

The Bancorp, Inc.

9.63

%

19.04

%

19.45

%

19.04

%

The Bancorp Bank

9.46

%

18.71

%

19.11

%

18.71

%

"Well capitalized" institution (under FDIC regulations-Basel III)

5.00

%

8.00

%

10.00

%

6.50

%

Capital ratios: Tier 1 Tier 1 Total capital Common capital capital equity

to to to tier 1 average risk-weighted risk-weighted to risk

assets assets ratio assets ratio weighted ratio assets

As of September 30, 2020

The Bancorp, Inc. 8.62 % 14.26 % 14.68 % 14.26 %

The Bancorp Bank 8.50 % 14.04 % 14.45 % 14.04 %

"Well capitalized" institution(under FDIC regulations-Basel 5.00 % 8.00 % 10.00 % 6.50 %III)

As of December 31, 2019

The Bancorp, Inc. 9.63 % 19.04 % 19.45 % 19.04 %

The Bancorp Bank 9.46 % 18.71 % 19.11 % 18.71 %

"Well capitalized" institution(under FDIC regulations-Basel 5.00 % 8.00 % 10.00 % 6.50 %III)

Three months ended

Nine months ended

September 30,

September 30,

2020

2019

2020

2019

Selected operating ratios:

Return on average assets (1)

1.48

%

1.63

%

1.25

%

1.41

%

Return on average equity (1)

16.90

%

17.20

%

14.29

%

14.92

%

Net interest margin

3.37

%

3.35

%

3.41

%

3.40

%

(1) Annualized

Book value per share table:

September 30,

June 30,

December 31,

September 30,

2020

2020

2019

2019

Book value per share

$

9.71

$

9.28

$

8.52

$

8.52

Loan quality table:

September 30,

June 30,

December 31,

September 30,

2020

2020

2019

2019

Nonperforming loans to total loans

0.49

%

0.44

%

0.50

%

0.55

%

Nonperforming assets to total assets

0.20

%

0.17

%

0.16

%

0.19

%

Allowance for loan and lease losses to total loans

0.63

%

0.63

%

0.56

%

0.62

%

Nonaccrual loans

$

12,275

$

9,957

$

5,796

$

6,420

Loans 90 days past due still accruing interest

24

352

3,264

2,788

Other real estate owned

-

-

-

-

Total nonperforming assets

$

12,299

$

10,309

$

9,060

$

9,208

Three months ended

September 30,

June 30,

December 31,

September 30,

2020

2020

2019

2019

(in thousands)

Gross dollar volume (GDV)(2)

Prepaid and debit card GDV

$

23,963,508

$

23,680,749

$

19,104,327

$

17,264,690

(2) Gross dollar volume represents the total dollar amount spent on prepaid and debit cards issued by The Bancorp Bank.

Three months ended Nine months ended

September 30, September 30,

2020 2019 2020 2019

Selectedoperatingratios:

Return onaverage assets 1.48 % 1.63 % 1.25 % 1.41 %^(1)

Return onaverage equity 16.90 % 17.20 % 14.29 % 14.92 %^(1)

Net interest 3.37 % 3.35 % 3.41 % 3.40 %margin

^(1) Annualized

Book value per September 30, June 30, December 31, September 30,share table:

2020 2020 2019 2019

Book value per $ 9.71 $ 9.28 $ 8.52 $ 8.52 share

Loan quality September 30, June 30, December 31, September 30,table:

2020 2020 2019 2019

Nonperformingloans to total 0.49 % 0.44 % 0.50 % 0.55 %loans^

Nonperformingassets to total 0.20 % 0.17 % 0.16 % 0.19 %assets

Allowance forloan and lease 0.63 % 0.63 % 0.56 % 0.62 %losses to totalloans

Nonaccrual $ 12,275 $ 9,957 $ 5,796 $ 6,420 loans

Loans 90 dayspast due still 24 352 3,264 2,788 accruinginterest

Other real - - - - estate owned

Totalnonperforming $ 12,299 $ 10,309 $ 9,060 $ 9,208 assets

Three months ended

September 30, June 30, December 31, September 30,

2020 2020 2019 2019

(in thousands)

Gross dollarvolume (GDV) ^(2):

Prepaid and $ 23,963,508 $ 23,680,749 $ 19,104,327 $ 17,264,690 debit card GDV

^(2) Gross dollar volume represents the total dollar amount spent on prepaidand debit cards issued by The Bancorp Bank.

Business line quarterly summary:Quarter ended September 30, 2020

(dollars in millions)

Balances

% Growth

Major business lines

Average

approximate

rates *

Balances **

Year

over year

Linked

quarter

annualized

Loans

Institutional banking ***

2.5

%

$

1,455

58%

47%

Small Business Lending****

4.9

%

633

13%

21%

Leasing

6.3

%

431

4%

8%

Commercial real estate (non SBA at fair value)

4.8

%

1,603

nm

nm

Weighted average yield

4.2

%

$

4,122

Non-interest income

% Growth

Deposits

Current

quarter

Year

over year

Payment solutions (prepaid and debit card issuance)

0.1

%

$

4,038

62%

nm

$

19.4

20%

Card payment and ACH processing

0.3

%

834

(14%)

nm

1.8

nm

Business linequarterly summary:Quarter endedSeptember 30, 2020

(dollars inmillions)

Balances

% Growth

Average Year Linked BalancesMajor business lines approximate ** over quarter year rates * annualized

Loans

Institutional 2.5 % $ 1,455 58% 47%banking ***

Small Business 4.9 % 633 13% 21%Lending****

Leasing 6.3 % 431 4% 8%

Commercial realestate (non SBA at 4.8 % 1,603 nm nmfair value)

Weighted average 4.2 % $ 4,122 Non-interestyield income

% Growth

Current YearDeposits quarter over year

Payment solutions(prepaid and debit 0.1 % $ 4,038 62% nm $ 19.4 20%card issuance)

Card payment and ACH 0.3 % 834 (14%) nm 1.8 nmprocessing

* Average rates are for the quarter ended September 30, 2020

** Loan and deposit categories are respectively based on period-end and average quarterly balances.

*** Institutional Banking loans are comprised of Securities Backed Lines of Credit (SBLOC), collateralized by marketable securities, Insurance Backed Lines of Credit (IBLOC), collateralized by the cash surrender value of insurance policies, and Advisor financing.

**** Small Business Lending is substantially comprised of SBA loans. The balance above excludes $208 million of Paycheck Protection Program loans.

* Average rates are for the quarter ended September 30, 2020

** Loan and deposit categories are respectively based on period-end and averagequarterly balances.

*** Institutional Banking loans are comprised of Securities Backed Lines ofCredit (SBLOC), collateralized by marketable securities, Insurance Backed Linesof Credit (IBLOC), collateralized by the cash surrender value of insurancepolicies, and Advisor financing.

**** Small Business Lending is substantially comprised of SBA loans. Thebalance above excludes $208 million of Paycheck Protection Program loans.

Analysis of Walnut Street* marks:

Loan activity

Marks

(dollars in millions)

Original Walnut Street loan balance, December 31, 2014

$

267

Marks through December 31, 2014 sale date

(58

)

$

(58

)

Sales price of Walnut Street

209

Equity investment from independent investor

(16

)

December 31, 2014 Bancorp book value

193

Additional marks 2015 - 2019

(46

)

(46

)

2020 Marks

-

Payments received

(115

)

September 30, 2020 Bancorp book value**

$

32

Total marks

$

(104

)

Divided by:

Original Walnut Street loan balance

$

267

Percentage of total mark to original balance

39

%

Analysis of Walnut Street* marks:

Loan Marks activity

(dollars in millions)

Original Walnut Street loan balance, December 31, 2014 $ 267

Marks through December 31, 2014 sale date (58 ) $ (58 )

Sales price of Walnut Street 209

Equity investment from independent investor (16 )

December 31, 2014 Bancorp book value 193

Additional marks 2015 - 2019 (46 ) (46 )

2020 Marks -

Payments received (115 )

September 30, 2020 Bancorp book value** $ 32



Total marks $ (104 )

Divided by:

Original Walnut Street loan balance $ 267

Percentage of total mark to original balance 39 %

* Walnut Street is the investment in unconsolidated entity on the balance sheet which reflects the investment in a securitization of certain loans from the bank's discontinued loan portfolio.

** Approximately 34% of expected principal recoveries were from loans and properties pending liquidation or other resolution as of September 30, 2020.

* Walnut Street is the investment in unconsolidated entity on the balance sheetwhich reflects the investment in a securitization of certain loans from thebank's discontinued loan portfolio.

** Approximately 34% of expected principal recoveries were from loans andproperties pending liquidation or other resolution as of September 30, 2020.

Walnut Street portfolio composition as of September 30, 2020

Collateral type

% of Portfolio

Commercial real estate non-owner occupied

Retail

61.1%

Office

-

Other

5.5%

Construction and land

29.6%

First mortgage residential owner occupied

2.4%

First mortgage residential non-owner occupied

1.4%

Total

100.0%

Walnut Street portfolio composition as of September 30, 2020

Collateral type % of Portfolio

Commercial real estate non-owner occupied

Retail 61.1%

Office -

Other 5.5%

Construction and land 29.6%

First mortgage residential owner occupied 2.4%

First mortgage residential non-owner occupied 1.4%

Total 100.0%

Cumulative analysis of marks on discontinued commercial loan principal as of September 30, 2020

Discontinued

Cumulative

% to original

loan principal

marks

principal

(dollars in millions)

Commercial loan discontinued principal before marks

$

66

Florida mall held in discontinued other real estate owned

42

(27

)

Mark at September 30, 2020

(4

)

Cumulative mark at September 30, 2020

$

108

$

(31

)

29

%

Cumulative analysis of marks on discontinued commercial loanprincipal as of September 30, 2020

Discontinued Cumulative % to original

loan marks principal principal

(dollars in millions)

Commercial loan discontinued principal $ 66before marks

Florida mall held in discontinued other 42 (27 )real estate owned

Mark at September 30, 2020 (4 )

Cumulative mark at September 30, 2020 $ 108 $ (31 ) 29 %

Analysis of discontinued commercial loan relationships as of September 30, 2020

Performing

Nonperforming

Total

Performing

Nonperforming

Total

loan principal

loan principal

loan principal

loan marks

loan marks

marks

(in millions)

5 loan relationships > $5 million

$

44

$

-

$

44

$

(3

)

$

-

$

(3

)

Loan relationships < $5 million

9

9

18

-

(1

)

(1

)

$

53

$

9

$

62

$

(3

)

$

(1

)

$

(4

)

Analysis of discontinued commercial loan relationships as of September 30, 2020

Performing Nonperforming Total Performing Nonperforming Total

loan loan loan loan marks loan marks marks principal principal principal

(in millions)

5 loanrelationships $ 44 $ - $ 44 $ (3 ) $ - $ (3 )> $5 million

Loanrelationships 9 9 18 - (1 ) (1 )< $5 million

$ 53 $ 9 $ 62 $ (3 ) $ (1 ) $ (4 )

Quarterly activity for commercial loan discontinued principal

Commercial

loan principal

(in millions)

Commercial loan discontinued principal June 30, 2020 before marks

$

67

Quarterly paydowns and other reductions

(1

)

Commercial loan discontinued principal September 30, 2020 before marks

$

66

Marks September 30, 2020

(4

)

Net commercial loan exposure September 30, 2020

$

62

Residential mortgages

37

Net loans

$

99

Florida mall in other real estate owned

15

8 properties in other real estate owned

8

Total discontinued assets at September 30, 2020

$

122

Quarterly activity for commercial loan discontinued principal

Commercial

loan principal

(in millions)

Commercial loan discontinued principal June 30, 2020 before $ 67 marks

Quarterly paydowns and other reductions (1 )

Commercial loan discontinued principal September 30, 2020 before $ 66 marks

Marks September 30, 2020 (4 )

Net commercial loan exposure September 30, 2020 $ 62

Residential mortgages 37

Net loans $ 99

Florida mall in other real estate owned 15

8 properties in other real estate owned 8

Total discontinued assets at September 30, 2020 $ 122

Discontinued commercial loan composition as of September 30, 2020

Collateral type

Unpaid principal

balance

Mark September 30,

2020

Mark as %

of portfolio

(dollars in millions)

Commercial real estate - non-owner occupied:

Retail

$

4

$

(0.6

)

15

%

Office

2

-

-

Other

19

(0.1

)

1

%

Construction and land

11

(0.1

)

1

%

Commercial non-real estate and industrial

2

-

-

1 to 4 family construction

11

(2.7

)

25

%

First mortgage residential non-owner occupied

8

-

-

Commercial real estate owner occupied:

Retail

7

(0.6

)

9

%

Residential junior mortgage

1

-

-

Other

1

-

-

Total

$

66

$

(4.1

)

6

%

Less: mark

(4

)

Net commercial loan exposure September 30, 2020

$

62

$

(4.1

)

Discontinued commercial loan composition as of September 30, 2020

Unpaid Mark Mark as % principal SeptemberCollateral type 30, of balance portfolio 2020

(dollars in millions)

Commercial real estate - non-owneroccupied:

Retail $ 4 $ (0.6 ) 15 %

Office 2 - -

Other 19 (0.1 ) 1 %

Construction and land 11 (0.1 ) 1 %

Commercial non-real estate and 2 - - industrial

1 to 4 family construction 11 (2.7 ) 25 %

First mortgage residential non-owner 8 - - occupied

Commercial real estate owner occupied:

Retail 7 (0.6 ) 9 %

Residential junior mortgage 1 - -

Other 1 - -

Total $ 66 $ (4.1 ) 6 %

Less: mark (4 )

Net commercial loan exposure September $ 62 $ (4.1 )30, 2020

Loan payment deferrals as of September 30, 2020

Principal for

loans with

deferrals

Total principal

by loan category

% of total loan

principal with

deferrals

(dollars in millions)

Commercial real estate loans held at fair value (excluding SBA loans)

$

30

$

1,603

2

%

Securities backed lines of credit, insurance backed lines of credit & advisor financing

-

1,455

0

%

Small business lending, substantially all SBA loans

18

836

2

%

Direct lease financing

4

430

1

%

Discontinued operations

2

103

2

%

Other consumer loans and specialty lending

-

6

0

%

Total

$

54

$

4,433

1.2

%

Note: At September 30, 2020, SBA 7a loans, included in Small business lending above, totaled $433 million, of which $98 million was not U.S. government guaranteed. The CARES Act of 2020, or CARES ACT, provides support to SBA borrowers through six months of principal and interest payments. A large percentage of these payments will expire in fourth quarter 2020 which could lead to an increase in deferrals and relief provided to these borrowers.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201029006179/en/

CONTACT: The Bancorp, Inc. Contact Andres Viroslav Director, Investor Relations 215-861-7990 aviroslav@thebancorp.com