Business Wire | Jul 30, 2020 04:06PM EDT

The Bancorp, Inc. Reports Second Quarter 2020 Financial Results

Jul. 30, 2020

WILMINGTON, Del.--(BUSINESS WIRE)--Jul. 30, 2020--The Bancorp, Inc. ("The Bancorp") (NASDAQ: TBBK), a financial holding company, today reported financial results for the second quarter of 2020.

Highlights

* For the quarter ended June 30, 2020, The Bancorp earned net income of $20.3 million from continuing operations, and $0.35 diluted earnings per share from combined continuing and discontinued operations.

* Return on assets and equity for the quarter ended June 30, 2020 increased to 1.3% and 15.6%, respectively, compared to 1.0% and 10.2% for the quarter ended June 30, 2019.

* Net interest margin increased to 3.53% for the quarter ended June 30, 2020, compared to 3.41% for the quarter ended June 30, 2019 and 3.34% for the quarter ended March 31, 2020.

* Net interest income increased 45% to $50.2 million for the quarter ended June 30, 2020, compared to $34.5 million for the quarter ended June 30, 2019.

* Average loans and leases, including loans held for sale, increased 76% to $3.93 billion for the quarter ended June 30, 2020, compared to $2.23 billion for the quarter ended June 30, 2019.

* Prepaid, debit card and related fees increased 18% to $18.7 million for the quarter ended June 30, 2020, compared to $15.8 million for the quarter ended June 30, 2019. Gross dollar volume (GDV), representing total spend on cards, increased 43%.

* SBLOC (securities-backed lines of credit) and IBLOC (insurance backed lines of credit) loans increased 54% year over year and 11% quarter over quarter to $1.3 billion at June 30, 2020.

* Small Business Loans, including those held-for-sale, increased 16% year over year to $601.4 million at June 30, 2020, exclusive of $208 million of Paycheck Protection Program loans.

* As of June 30, 2020, we have originated approximately 1,250 Paycheck Protection Program loans, totaling approximately $208 million, which we expect will generate approximately $5.5 million of fees and interest. We believe that income will be 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 $5.4 billion of average deposits and interest-bearing liabilities in the second quarter of 2020 was 0.12%. Average prepaid and debit card account deposits of $3.9 billion for second quarter 2020, reflected an increase of 56% over the $2.5 billion for the quarter ended June 30, 2019.

* Consolidated leverage ratio was 8.48% at June 30, 2020. The Bancorp and its subsidiary, The Bancorp Bank (the "Bank"), remain well capitalized.

* Book value per common share at June 30, 2020 was $9.28 per share compared to $8.07 at June 30, 2019, an increase of 15%.

Damian Kozlowski, The Bancorp's Chief Executive Officer, said, "We have continued to experience momentum in our core earnings driven by higher interest income with falling interest expense, increased loan balances and higher payment volumes. In the second quarter of 2020, the Bancorp earned 35 cents a share from both increased fee and spread revenue. 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, while also making investments in our platform. Our earnings guidance for full year 2020 continues to be $1.25 per share."

The Bancorp reported net income of $20.1 million, or $0.35 per diluted share, for the quarter ended June 30, 2020, compared to net income of $11.4 million, or $0.20 per diluted share, for the quarter ended June 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 8.48%, 14.84%, 15.27% and 14.84%, 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, July 31, 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 2755988. You may listen to the replay of the webcast following the live call on The Bancorp's investor relations website or telephonically until Friday, August 7, 2020 by dialing 855.859.2056, access code 2755988.

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," "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 Six months ended

June 30, June 30,

Condensed income 2020 2019 2020 2019statement

(dollars in thousands except per share data)

Net interest $ 50,246 $ 34,539 $ 93,157 $ 68,549income

Provision forloan and lease 922 600 4,501 2,300losses

Non-interestincome

Service fees on 5 14 15 61deposit accounts

ACH, card andother payment 1,707 2,521 3,553 4,824processing fees

Prepaid, debitcard and related 18,673 15,840 37,213 32,003fees

Net realized andunrealized gains(losses) oncommercial

loans originated (940 ) (148 ) (6,096 ) 10,615for sale

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

Leasing related 443 1,027 1,276 1,722income

Othernon-interest 478 495 1,049 889income

Totalnon-interest 20,366 19,749 36,965 50,114income

Non-interestexpense

Salaries and 25,492 21,826 48,233 45,666employee benefits

Data processing 1,177 1,223 2,346 2,492expense

Legal expense 2,229 1,534 3,142 2,858

FDIC Insurance 2,918 2,095 5,507 4,024

Software 3,386 3,060 6,863 5,981

Lease termination - 908 - 908expense

Othernon-interest 7,418 8,873 14,947 16,819expense

Totalnon-interest 42,620 39,519 81,038 78,748expense

Income fromcontinuing 27,070 14,169 44,583 37,615operations beforeincome taxes

Income tax 6,787 3,575 11,139 9,610expense

Net income fromcontinuing 20,283 10,594 33,444 28,005operations

Discontinuedoperations

Income (loss)from discontinued (274 ) 919 (1,049 ) 1,724operations beforeincome taxes

Income tax (59 ) 163 (264 ) 449expense (benefit)

Net income (loss)from discontinued (215 ) 756 (785 ) 1,275operations, netof tax

Net income $ 20,068 $ 11,350 $ 32,659 $ 29,280

Net income pershare fromcontinuing $ 0.35 $ 0.19 $ 0.58 $ 0.50operations -basic

Net income (loss)per share fromdiscontinued $ - $ 0.01 $ (0.01 ) $ 0.02operations -basic

Net income per $ 0.35 $ 0.20 $ 0.57 $ 0.52share - basic

Net income pershare fromcontinuing $ 0.35 $ 0.19 $ 0.58 $ 0.49operations -diluted

Net income (loss)per share fromdiscontinued $ - $ 0.01 $ (0.01 ) $ 0.02operations -diluted

Net income per $ 0.35 $ 0.20 $ 0.57 $ 0.51share - diluted

Weighted average 57,489,719 56,702,182 57,355,282 56,612,596shares - basic

Weighted average 57,800,115 57,197,433 57,856,791 57,031,206shares - diluted

Balance sheet June 30, March 31, December 31, June 30,

2020 2020 2019 2019

(dollars in thousands)

Assets:

Cash and cashequivalents

Cash and due from $ 5,094 $ 13,610 $ 19,928 $ 27,450 banks

Interest earning deposits at 475,627 105,978 924,544 284,823 Federal Reserve Bank

Total cash and 480,721 119,588 944,472 312,273 cash equivalents

Investmentsecurities, 1,324,447 1,353,278 1,320,692 1,361,779 available-for-sale,at fair value

Investmentsecurities, - - 84,387 84,414 held-to-maturity,at cost

Commercial loansheld for sale, at 1,807,630 1,716,450 1,180,546 934,452 fair value

Loans, net ofdeferred fees and 2,322,737 1,985,755 1,824,245 1,561,451 costs

Allowance for (14,625 ) (14,883 ) (10,238 ) (9,989 )credit losses

Loans, net 2,308,112 1,970,872 1,814,007 1,551,462

Federal Home LoanBank & Atlantic 1,368 1,142 5,342 6,342 CommunityBancshares stock

Premises and 16,701 17,148 17,538 17,380 equipment, net

Accrued interest 18,897 15,660 13,619 14,567 receivable

Intangible assets, 2,710 2,857 2,315 3,081 net

Deferred tax asset, 7,921 12,797 12,538 14,574 net

Investment inunconsolidated 34,064 34,273 39,154 58,012 entity

Assets held forsale from 128,463 134,118 140,657 169,109 discontinuedoperations

Other assets 83,003 79,925 81,696 76,123

Total assets $ 6,214,037 $ 5,458,108 $ 5,656,963 $ 4,603,568

Liabilities:

Deposits

Demand and $ 5,089,741 $ 4,512,949 $ 4,402,740 $ 3,964,905 interest checking

Savings and money 455,458 178,174 174,290 26,841 market

Time deposits - - 475,000 -

Total deposits 5,545,199 4,691,123 5,052,030 3,991,746

Securities soldunder agreements to 42 42 82 93 repurchase

Short-term - 140,000 - 45,000 borrowings

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

Long-term 40,639 40,813 40,991 41,334 borrowings

Other liabilities 81,677 74,625 65,962 53,862

Total liabilities $ 5,680,958 $ 4,960,004 $ 5,172,466 $ 4,145,436

Shareholders'equity:

Common stock -authorized,75,000,000 sharesof $1.00 par value;57,555,308 and 57,555 57,426 56,941 56,875 56,874,956 sharesissued andoutstanding atJune 30, 2020 and2019, respectively

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

Additional paid-in 374,578 372,984 371,633 368,771 capital

Retained earnings 81,028 60,960 50,742 28,463

Accumulated othercomprehensive 20,784 7,600 6,047 4,889 income

Total shareholders' 533,079 498,104 484,497 458,132 equity

Total liabilities and shareholders' $ 6,214,037 $ 5,458,108 $ 5,656,963 $ 4,603,568 equity

Average balance sheet and net Three months ended June 30, 2020 Three months ended June 30, 2019interest income

(dollars in thousands)

Average Average Average Average

Assets: Balance Interest Rate Balance Interest Rate

Interest earning assets:

Loans net of deferred fees and $ 3,925,515 $ 41,448 4.22 % $ 2,216,935 $ 29,737 5.37 % costs **

Leases - bank qualified* 9,217 162 7.03 % 15,446 268 6.94 %

Investment securities-taxable 1,334,368 10,188 3.05 % 1,443,671 11,634 3.22 %

Investment securities-nontaxable* 4,402 35 3.18 % 6,610 54 3.27 %

Interest earning deposits at 426,174 107 0.10 % 420,153 2,455 2.34 % Federal Reserve Bank

Net interest earning assets 5,699,676 51,940 3.65 % 4,102,815 44,148 4.30 %

Allowance for credit losses (14,822 ) (9,963 )

Assets held for sale from 130,530 1,094 3.35 % 154,057 1,659 4.31 %discontinued operations

Other assets 228,443 283,036

$ 6,043,827 $ 4,529,945

Liabilities and Shareholders'Equity:

Deposits:

Demand and interest checking $ 5,140,167 $ 1,390 0.11 % $ 3,847,623 $ 8,783 0.91 %

Savings and money market 234,201 120 0.20 % 26,497 40 0.60 %

Total deposits 5,374,368 1,510 0.11 % 3,874,120 8,823 0.91 %

Short-term borrowings 16,428 15 0.37 % 80,242 526 2.62 %

Securities sold under agreements to 41 - 0.00 % 92 - 0.00 %repurchase

Subordinated debentures 13,401 128 3.82 % 13,401 192 5.73 %

Total deposits and liabilities 5,404,238 1,653 0.12 % 3,967,855 9,541 0.96 %

Other liabilities 123,997 115,634

Total liabilities 5,528,235 4,083,489

Shareholders' equity 515,592 446,456

$ 6,043,827 $ 4,529,945

Net interest income on tax $ 51,381 $ 36,266 equivalent basis*

Tax equivalent adjustment 41 68

Net interest income $ 51,340 $ 36,198

Net interest margin * 3.53 % 3.41 %

__________________________________

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

** Includes loans held for sale.

Average balance sheet and net interest Six months ended June 30, 2020 Six months ended June 30, 2019income

(dollars in thousands)

Average Average Average Average

Assets: Balance Interest Rate Balance Interest Rate

Interest earning assets:

Loans net of deferred fees and costs $ 3,593,921 $ 80,607 4.49 % $ 2,241,746 $ 59,898 5.34 % **

Leases - bank qualified* 10,096 362 7.17 % 16,613 695 8.37 %

Investment securities-taxable 1,364,956 20,683 3.03 % 1,374,019 22,164 3.23 %

Investment securities-nontaxable* 4,788 75 3.13 % 7,075 114 3.22 %

Interest earning deposits at Federal 460,025 1,730 0.75 % 421,580 4,957 2.35 % Reserve Bank

Net interest earning assets 5,433,786 103,457 3.81 % 4,061,033 87,828 4.33 %

Allowance for credit losses (12,532 ) (9,305 )

Assets held for sale from discontinued 133,903 2,368 3.54 % 163,874 3,684 4.50 %operations

Other assets 233,088 272,922

$ 5,788,245 $ 4,488,524

Liabilities and Shareholders' Equity:

Deposits:

Demand and interest checking $ 4,746,928 $ 8,085 0.34 % $ 3,838,868 $ 17,616 0.92 %

Savings and money market 203,888 170 0.17 % 28,931 77 0.53 %

Time 159,752 1,483 1.86 % - - -

Total deposits 5,110,568 9,738 0.38 % 3,867,799 17,693 0.91 %

Short-term borrowings 36,620 180 0.98 % 77,330 1,029 2.66 %

Securities sold under agreements to 57 - 0.00 % 91 - 0.00 %repurchase

Subordinated debentures 13,401 290 4.33 % 13,401 387 5.78 %

Total deposits and liabilities 5,160,646 10,208 0.40 % 3,958,621 19,109 0.97 %

Other liabilities 118,811 97,449

Total liabilities 5,279,457 4,056,070

Shareholders' equity 508,788 432,454

$ 5,788,245 $ 4,488,524

Net interest income on tax equivalent $ 95,617 $ 72,403 basis*

Tax equivalent adjustment 92 170

Net interest income $ 95,525 $ 72,233

Net interest margin * 3.43 % 3.43 %

__________________________________

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

** Includes loans held for sale.

Allowance for loan and lease losses: Six months ended Year ended

June 30, June 30, December 31,

2020 2019 2019

(dollars in thousands)

Balance in the allowance for loan and lease $ 12,874 $ 8,653 $ 8,653 losses at beginning of period (1)

Loans charged-off:

SBA non-real estate 1,048 893 1,362

Direct lease financing 1,552 185 528

Other consumer loans - 2 1,103

Total 2,600 1,080 2,993

Recoveries:

SBA non-real estate 54 100 125

Direct lease financing 90 16 51

Other consumer loans - - 2

Total 144 116 178

Net charge-offs 2,456 964 2,815

Provision credited to allowance, excluding 4,207 2,300 4,400 commitment provision

Balance in allowance for loan and lease $ 14,625 $ 9,989 $ 10,238 losses at end of period

Net charge-offs/average loans 0.06 % 0.04 % 0.12 %

Net charge-offs/average loans (annualized) 0.12 % 0.09 % 0.12 %

Net charge-offs/average assets 0.04 % 0.02 % 0.06 %

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

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

2020 2020 2019 2019

(in thousands)

SBL non-real estate $ 293,692 $ 84,946 $ 84,579 $ 75,475

SBL commercial mortgage 259,020 233,220 218,110 189,427

SBL construction 33,193 48,823 45,310 29,298

Small business loans * 585,905 366,989 347,999 294,200

Direct lease financing 422,505 445,967 434,460 407,907

SBLOC / IBLOC** 1,287,350 1,156,433 1,024,420 837,672

Advisor financing *** 15,529 - - -

Other specialty lending 2,706 2,711 3,055 3,432

Other consumer loans **** 4,003 4,023 4,554 7,898

2,317,998 1,976,123 1,814,488 1,551,109

Unamortized loan fees and 4,739 9,632 9,757 10,342costs

Total loans, net of $ 2,322,737 $ 1,985,755 $ 1,824,245 $ 1,561,451unamortized fees and costs

Small business portfolio: June 30, March 31, December June 30, 31,

2020 2020 2019 2019

(in thousands)

SBL, including unamortized 583,935 371,072 352,214 301,502fees and costs

SBL, included in 225,401 223,987 220,358 215,064held-for-sale

Total small business loans $ 809,336 $ 595,059 $ 572,572 $ 516,566

* The preceding table shows small business loans and small business loansheld-for-sale, which consist of the government guaranteed portion of SBA loansat the dates indicated (in thousands).

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

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

**** Included in the table above under Other consumer loans are demand depositoverdrafts reclassified as loan balances totaling $361,000 and $882,000 at June30, 2020 and December 31, 2019, respectively. Estimated overdraft charge-offsand recoveries are reflected in the allowance for loan and lease losses.

Small business loans as of June 30, 2020

Loan principal

(in millions)

U.S. government guaranteed portion of SBA loans (a) $ 306

Paycheck Protection Program Loans (PPP) (a) 208

Commercial mortgage SBA (b) 165

Construction SBA (c) 16

Unguaranteed portion of U.S. government guaranteed loans (d) 89

Non-SBA small business loans (e) 22

Total principal $ 806

Fair value adjustment (f) 5

Unamortized fees (2)

Total small business loans $ 809

(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 $16 million Construction SBA loans, $12 million are 504 firstmortgages with an origination date LTV of 50-60% and $4 million are SBA interimloans with an approved SBA post-construction full takeout/payoff.

(d) The $89 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) Of the $22 million in non-SBA loans, $3 million are bridge loans withpermanent lender takeout commitments, $2 million is a secured conventional loanwith an 80% origination date LTV and $17 million consist 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 recently passed CARES Act of 2020 has provided significantsupport for SBA loans including funding intended to provide six months ofinterest payments on SBA loans, as well as other accommodations to provide forthe payment of payroll and other operating expenses.

Type as of June 30,2020



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

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

(in millions)

Hotels $ 68 $ 7 $ - $ 75 26%

Professional services 22 - 2 24 8%offices

Full-service 15 1 5 21 7%restaurants

Child day care and 15 - 1 16 6%youth services

Bakeries 4 - 12 16 6%

Fitness/rec centers 8 - 4 12 4%and instruction

General warehousing 11 - - 11 4%and storage

Limited-servicerestaurants and 7 - 4 11 4%catering

Elderly assisted 2 7 2 11 4%living facilities

Amusement and 5 1 1 7 2%recreation industries

Car washes 3 3 - 6 2%

Funeral homes 5 - - 5 2%

New and used car 4 - - 4 1%dealers

Automotive servicing 3 - 1 4 1%

Other 45 1 23 69 23%

Total $ 217 $ 20 $ 55 $ 292 100%

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

State diversificationas of June 30, 2020

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

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

(in millions)

Florida $ 33 $ 7 $ 7 $ 47 16%

California 34 2 5 41 14%

Pennsylvania 30 - 4 34 11%

Illinois 28 - 4 32 11%

North Carolina 24 1 3 28 10%

Texas 11 - 5 16 6%

New York 10 1 5 16 5%

Tennessee 7 6 1 14 5%

New Jersey 2 1 7 10 4%

Virginia 8 1 2 11 4%

Georgia 5 - 2 7 2%

Michigan 3 - 1 4 2%

Colorado 2 - 1 3 1%

Ohio 3 - - 3 1%

Other states 17 1 8 26 8%

Total $ 217 $ 20 $ 55 $ 292 100%

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

Top 10 loans as of June30, 2020

Type* State SBL commercial SBL Total mortgage* construction*

(in millions)

Professional services CA $ 9 $ - $ 9office

Hotel FL 9 - 9

General warehouse PA 8 - 8

Hotel NC 6 - 6

Assisted living facility FL - 5 5

Hotel NC 5 - 5

Fitness and rec center PA 4 - 4

Hotel PA 4 - 4

Hotel TN - 4 4

Gas Station VA 3 - 3

Total $ 48 $ 9 $ 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 for sale which were originated for sale or securitization, excluding SBA loans, are as follows including LTV at origination:

Type as of June 30,2020

Type # Balance Origination Weighted average Loans date LTV minimum interest rate

(dollars in millions)

Multifamily 181 $ 1,450 76% 4.77%(apartments)

Hospitality (hotels 11 60 65% 5.70%and lodging)*

Retail 7 52 72% 4.96%

Other 8 25 69% 5.20%

207 $ 1,587 75% 4.82%

Fair value (5)adjustment *

Total $ 1,582

*Of the total $5 million fair value adjustment, $2 million was related to hospitality loans.

State diversification 15 Largest loans (all multifamily) asas of June 30, 2020 of June 30, 2020

State Balance Origination State Balance Origination date LTV date LTV

(in (in millions) millions)

Texas $ 407 77% North $ 43 78% Carolina

Georgia 234 78% Texas 37 79%

Arizona 121 76% Texas 35 80%

North 109 78% Pennsylvania 31 77%Carolina

Nevada 56 80% Georgia 31 80%

Alabama 54 76% Nevada 28 80%

Otherstates each 606 73% Texas 28 75%<$50million

Total $ 1,587 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 $ 429 77% loans

Institutional banking loans outstanding at June 30,2020

Type Principal % of total

(in millions)

Securities backed lines of credit (SBLOC) $ 1,003 77 %

Insurance backed lines of credit (IBLOC) 284 22 %

Advisor financing 16 1 %

Total $ 1,303 100 %



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. As a result, the accounts monitored by management and related information as of June 30, 2020 were as follows:

Top 10 SBLOC loans

Principal amount % Principal to collateral

(in millions)

$ 33 31 %

19 44 %

14 23 %

11 29 %

11 80 %

10 49 %

10 27 %

9 75 %

8 22 %

8 71 %

Total $ 133 40 %

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 June 30,2020 Principal % Total balance

(in millions)

Government agencies and public institutions** $ 77 18 %

Construction 74 18 %

Waste management and remediation services 61 15 %

Retail trade 39 9 %

Transportation and warehousing 39 9 %

Real estate, rental and leasing 33 8 %

Health care and social assistance 26 6 %

Professional, scientific, and technical services 19 5 %

Manufacturing 13 3 %

Wholesale trade 13 3 %

Educational services 10 2 %

Arts, entertainment, and recreation 5 1 %

Other 14 3 %

Total $ 423 100 %

* Of the total $423 million of direct lease financing, $388 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 June 30,2020

State Principal balance % Total

(in millions)

Florida $ 99 23 %

New Jersey 30 7 %

Pennsylvania 27 6 %

New York 27 6 %

North Carolina 26 6 %

Maryland 24 6 %

California 21 5 %

Utah 19 4 %

Washington 16 4 %

Georgia 15 4 %

Connecticut 11 3 %

Alabama 11 3 %

Illinois 11 3 %

Texas 10 2 %

Missouri 7 2 %

Other states 69 16 %

Total $ 423 100 %

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 June 30, 2020

The Bancorp, Inc. 8.48 % 14.84 % 15.27 % 14.84 %

The Bancorp Bank 8.34 % 14.56 % 14.98 % 14.56 %

"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 Six months ended

June 30, June 30,

2020 2019 2020 2019

Selected operating ratios:

Return on average assets ^(1) 1.33 % 1.00 % 1.13 % 1.32 %

Return on average equity ^(1) 15.61 % 10.20 % 12.87 % 13.65 %

Net interest margin 3.53 % 3.41 % 3.43 % 3.43 %

^(1) Annualized

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

2020 2020 2019 2019

Book value per $ 9.28 $ 8.69 $ 8.52 $ 8.07 share

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

2020 2020 2019 2019

Nonperformingloans to total 0.44 % 0.40 % 0.50 % 0.57 %loans^

Nonperformingassets to total 0.17 % 0.14 % 0.16 % 0.19 %assets

Allowance forloan and lease 0.63 % 0.75 % 0.56 % 0.64 %losses to totalloans

Nonaccrual $ 9,957 $ 5,645 $ 5,796 $ 6,456 loans

Loans 90 dayspast due still 352 2,245 3,264 2,373 accruinginterest

Other real - - - - estate owned

Totalnonperforming $ 10,309 $ 7,890 $ 9,060 $ 8,829 assets

Three months ended

June 30, March 31, December 31, June 30,

2020 2020 2019 2019

(in thousands)

Gross dollarvolume (GDV) ^(2):

Prepaid and $ 23,680,749 $ 22,982,188 $ 19,104,327 $ 16,611,551 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 June 30, 2020

(dollars in millions)



Balances

% Growth

Major business Average Balances Year Linkedlines approximate ** over quarter rates * year annualized

Loans

Institutional 2.5 % $ 1,303 56 % 51 %banking ***

Small Business 5.0 % 601 16 % 4 %Lending****

Leasing 5.8 % 422 4 % nm

Commercial realestate 4.8 % 1,582 nm nmsecuritization

Weighted average 4.2 % $ 3,908 Non-interestyield income

% Growth

Current YearDeposits quarter over year

Payment solutions(prepaid and debit 0.1 % $ 3,908 56 % nm $ 18.7 18 %card issuance)

Card payment and 0.3 % 723 -27 % nm 1.7 nmACH processing



* Average rates are for the quarter ended June 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 BackedLines of Credit (IBLOC), collateralized by the cash surrender value ofinsurance policies, and Advisor financing

**** Small Business Lending is substantially comprised of SBA loans. Thebalance above excludes $208M 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 (113 )

June 30, 2020 Bancorp book value** $ 34



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 sheetwhich reflects the investment in a securitization of certain loans from thebank's discontinued loan portfolio.

** Approximately 33% of expected principal recoveries were from loans andproperties pending liquidation or other resolution as of June 30, 2020.

Walnut Street portfolio composition as of June 30, 2020

Collateral type % of Portfolio

Commercial real estate non-owner occupied

Retail 58.0 %

Office -

Other 5.2 %

Construction and land 28.1 %

First mortgage residential owner occupied 7.4 %

First mortgage residential non-owner occupied 1.3 %

Total 100.0 %

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

Discontinued Cumulative % to original

loan marks principal principal

(dollars in millions)

Commercial loan discontinued principal $ 67before marks

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

Previous mark charges 10 (10 )

Mark at June 30, 2020 (4 )

Cumulative mark at June 30, 2020 $ 119 $ (41 ) 34 %

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

Performing Nonperforming Total Performing Nonperforming Total

loan loan loan loan marks loan marks marks principal principal principal

(in millions)

5 loanrelationships $ 45 $ - $ 45 $ (3 ) $ - $ (3 )> $6 million

Loanrelationships 14 4 18 - (1 ) (1 )< $6 million

$ 59 $ 4 $ 63 $ (3 ) $ (1 ) $ (4 )

Quarterly activity for commercial loan discontinued principal

Commercial

loan principal

(in millions)

Commercial loan discontinued principal March 31, 2020 before $ 72 marks

Quarterly paydowns and other reductions (5 )

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

Marks June 30, 2020 (4 )

Net commercial loan exposure June 30, 2020 $ 63

Residential mortgages 39

Net loans $ 102

Florida mall in other real estate owned 15

11 properties in other real estate owned 11

Total discontinued assets at June 30, 2020 $ 128

Discontinued commercial loan composition as of June 30, 2020

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

(in millions)

Commercial real estate - non-owneroccupied:

Retail $ 4 $ (0.6 ) 15 %

Office 2 - 0 %

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 (2.8 ) 25 %

First mortgage residential non-owner 9 - 0 %occupied

Commercial real estate owner occupied:

Retail 7 - -

Office - - -

Other - - -

Residential junior mortgage 1 - -

Other 1 - -

Total $ 67 $ (3.6 ) 5 %

Less: mark (4 )

Net commercial loan exposure June 30, $ 63 $ (3.6 )2020

Loan payment deferrals as of June 30, 2020

Principal Total % of total for loans principal loan

with by loan principal deferrals category with deferrals

(in millions)

Commercial real estate loans held for sale $ 31 $ 1,587 2%(excluding SBA loans)

Securities backed lines of credit, insurance 2 1,303 <1%backed lines of credit & advisor financing

Small business lending, substantially all SBA 187 806 23%loans

Direct lease financing 80 422 19%

Discontinued operations 18 106 17%

Other consumer loans and specialty lending - 7 0%

Total $ 318 $ 4,231 7.5%

View source version on businesswire.com: https://www.businesswire.com/news/home/20200730005952/en/

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