Business Wire | Jan 28, 2021 04:05PM EST

The Bancorp, Inc. Reports Fourth Quarter 2020 Financial Results

Jan. 28, 2021

WILMINGTON, Del.--(BUSINESS WIRE)--Jan. 28, 2021--The Bancorp, Inc. ("The Bancorp") (NASDAQ: TBBK), a financial holding company, today reported financial results for the fourth quarter of 2020.

Highlights

* For the quarter ended December 31, 2020, The Bancorp earned net income of $24.0 million from continuing operations, and $0.41 diluted earnings per share from combined continuing and discontinued operations.

* Annualized return on assets and equity for the quarter ended December 31, 2020 amounted to 1.6% and 17%, respectively, compared to 1.5% and 17% (annualized), respectively, for the quarter ended September 30, 2020.

* Net interest margin amounted to 3.58% for the quarter ended December 31, 2020, compared to 3.12% for the quarter ended December 31, 2019 and 3.37% for the quarter ended September 30, 2020.

* Net interest income increased 47% to $51.7 million for the quarter ended December 31, 2020, compared to $35.2 million for the quarter ended December 31, 2019.

* Average loans and leases, including loans at fair value, increased 72% to $4.34 billion for the quarter ended December 31, 2020, compared to $2.53 billion for the quarter ended December 31, 2019.

* Prepaid, debit card and related fees increased 5% to $17.8 million for the quarter ended December 31, 2020, compared to $17.0 million for the quarter ended December 31, 2019. Gross dollar volume (GDV), representing total spend on cards, increased 18% between those periods.

* SBLOC (securities-backed lines of credit), IBLOC (insurance backed lines of credit) and advisor financing loans increased 56% year over year and 10% quarter over quarter to $1.6 billion at December 31, 2020.

* Small Business Loans, including those held at fair value, increased 14% year over year to $654 million at December 31, 2020, exclusive of $166 million of Paycheck Protection Program balances.

* The average interest rate on $5.40 billion of average deposits and interest-bearing liabilities in the fourth quarter of 2020 was 0.24%. Average prepaid and debit card account deposits of $3.59 billion for fourth quarter 2020, reflected an increase of 33% over the $2.70 billion for the quarter ended December 31, 2019.

* Consolidated leverage ratio was 9.20% at December 31, 2020. The Bancorp and its subsidiary, The Bancorp Bank (the "Bank"), remain well capitalized.

* Book value per common share at December 31, 2020 was $10.10 per share compared to $8.52 at December 31, 2019, an increase of 19%, primarily as a result of retained earnings per share.

Damian Kozlowski, The Bancorp's Chief Executive Officer, said, "We have completed our strategic business plan, strategic agenda and budget for 2021. The main focus continues to be product and platform expansion with a rigorous focus on building the best payments ecosystem in the financial services industry. Our plan includes a comprehensive and integrated analysis of the market and competitors, and the needed investments to build towards the future and create scalable core competencies that our partners can use to innovate and grow. We also continue to invest heavily in anti-money laundering and compliance to have best-in-class capabilities to meet regulatory guidance and expectations. Our guidance target for 2021 is $1.70 a share or approximately $100 million in net income, which does not include the impact of planned share repurchases."

The Bancorp reported net income of $24.2 million, or $0.41 per diluted share, for the quarter ended December 31, 2020, compared to net income of $1.9 million, or $0.03 per diluted share, for the quarter ended December 31, 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 9.20%, 14.43%, 14.84% and 14.43%, 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, January 29, 2021 by clicking on the webcast link on The Bancorp's homepage at www.thebancorp.com. Or, you may dial 844.775.2543, access code 8952947. You may listen to the replay of the webcast following the live call on The Bancorp's investor relations website or telephonically until Friday, February 5, 2021 by dialing 855.859.2056, access code 8952947.

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 Year ended

December 31, December 31,

Condensedincome 2020 2019 2020 2019statement

(dollars in thousands except per share data)



Net interest $ 51,713 35,179 $ 194,866 $ 141,288income

Provision for 554 1,450 6,352 4,400credit losses

Non-interest income

Service feeson deposit 7 6 30 75accounts

ACH, card andother payment 1,788 1,962 7,101 9,376processing fees

Prepaid, debitcard and 17,818 17,004 74,465 65,141related fees

Net realizedand unrealized gains (losses) on commercial

loansoriginated for 1,538 (247 ) (3,874 ) 24,072sale

Change invalue ofinvestment in - - (45 ) -unconsolidatedentity

Leasing 499 932 3,294 3,243related income

Othernon-interest 1,650 841 3,646 2,220income

Totalnon-interest 23,300 20,498 84,617 104,127income

Non-interest expense

Salaries andemployee 27,087 24,067 101,737 94,259benefits

Dataprocessing 1,174 1,210 4,712 4,894expense

Legal expense 1,005 995 5,141 5,319

FDIC insurance 2,121 2,141 9,808 7,025

Software 3,570 3,551 14,028 12,731

SEC settlement - 7,500 - 8,900

Leasetermination - - - 908expense

Othernon-interest 6,826 8,258 29,421 34,485expense

Totalnon-interest 41,783 47,722 164,847 168,521expense

Income fromcontinuingoperations 32,676 6,505 108,284 72,494before incometaxes

Income tax 8,655 3,641 27,688 21,226expense

Net incomefrom 24,021 2,864 80,596 51,268continuing operations

Discontinued operations

Income (loss)fromdiscontinued (1,096 ) (1,365 ) (3,816 ) 510operations before incometaxes

Income taxexpense (1,246 ) (355 ) (3,304 ) 219(benefit)

Net income(loss) fromdiscontinued 150 (1,010 ) (512 ) 291operations,net of tax

Net income $ 24,171 $ 1,854 $ 80,084 $ 51,559



Net income pershare fromcontinuing $ 0.42 $ 0.05 $ 1.40 $ 0.90operations -basic

Net income(loss) pershare from $ - $ (0.02 ) $ (0.01 ) $ 0.01discontinued operations -basic

Net income per $ 0.42 $ 0.03 $ 1.39 $ 0.91share - basic



Net income pershare fromcontinuing $ 0.41 $ 0.05 $ 1.38 $ 0.89operations -diluted

Net income(loss) pershare from $ - $ (0.02 ) $ (0.01 ) $ 0.01discontinued operations -diluted

Net income pershare - $ 0.41 $ 0.03 $ 1.37 $ 0.90diluted

Weightedaverage shares 57,597,124 56,924,543 57,474,612 56,765,635- basic

Weightedaverage shares 59,146,222 57,847,509 58,411,222 57,338,985- diluted

Balance sheet

December 31,

September 30,

June 30,

December 31,

2020

2020

2020

2019

(dollars in thousands)

Assets:

Cash and cash equivalents

Cash and due from banks

$

5,984

$

6,220

$

5,094

$

19,928

Interest earning deposits at Federal Reserve Bank

339,531

294,758

475,627

924,544

Total cash and cash equivalents

345,515

300,978

480,721

944,472

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

1,206,164

1,264,903

1,324,447

1,320,692

Investment securities, held-to-maturity, at cost

-

-

-

84,387

Commercial loans, at fair value (held-for-sale at June 30, 2020 and December 31, 2019

1,810,812

1,849,947

1,807,630

1,180,546

Loans, net of deferred fees and costs

2,652,323

2,488,760

2,322,737

1,824,245

Allowance for credit losses

(16,082

)

(15,727

)

(14,625

)

(10,238

)

Loans, net

2,636,241

2,473,033

2,308,112

1,814,007

Federal Home Loan Bank & Atlantic Community Bancshares stock

1,368

1,368

1,368

5,342

Premises and equipment, net

17,608

15,849

16,701

17,538

Accrued interest receivable

20,458

18,852

18,897

13,619

Intangible assets, net

2,447

2,563

2,710

2,315

Deferred tax asset, net

10,611

7,952

7,921

12,538

Investment in unconsolidated entity

31,294

31,783

34,064

39,154

Assets held for sale from discontinued operations

113,650

122,253

128,463

140,657

Other assets

81,265

79,821

83,003

81,696

Total assets

$

6,277,433

$

6,169,302

$

6,214,037

$

5,656,963

Liabilities:

Deposits

Demand and interest checking

$

5,205,010

$

4,882,834

$

5,089,741

$

4,402,740

Savings and money market

257,050

505,928

455,458

174,290

Time deposits

-

-

-

475,000

Total deposits

5,462,060

5,388,762

5,545,199

5,052,030

Securities sold under agreements to repurchase

42

42

42

82

Senior debt

98,314

98,222

-

-

Subordinated debenture

13,401

13,401

13,401

13,401

Other long-term borrowings

40,277

40,462

40,639

40,991

Other liabilities

82,175

69,954

81,677

65,962

Total liabilities

$

5,696,269

$

5,610,843

$

5,680,958

$

5,172,466

Shareholders' equity:

Common stock - authorized, 75,000,000 shares of $1.00 par value; 57,650,629 and 56,940,521 shares issued and outstanding at December 31, 2020 and 2019, respectively

57,651

57,591

57,555

56,941

Treasury stock (100,000 shares)

(866

)

(866

)

(866

)

(866

)

Additional paid-in capital

378,218

376,751

374,578

371,633

Retained earnings

128,453

104,282

81,028

50,742

Accumulated other comprehensive income

17,708

20,701

20,784

6,047

Total shareholders' equity

581,164

558,459

533,079

484,497

Total liabilities and shareholders' equity

$

6,277,433

$

6,169,302

$

6,214,037

$

5,656,963





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

2020 2020 2020 2019

(dollars in thousands)

Assets:

Cash and cash equivalents

Cash and due from $ 5,984 $ 6,220 $ 5,094 $ 19,928 banks

Interest earningdeposits at Federal 339,531 294,758 475,627 924,544 Reserve Bank

Total cash and cash 345,515 300,978 480,721 944,472 equivalents



Investmentsecurities, 1,206,164 1,264,903 1,324,447 1,320,692 available-for-sale, at fair value

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

Commercial loans,at fair value(held-for-sale at 1,810,812 1,849,947 1,807,630 1,180,546 June 30, 2020 andDecember 31, 2019

Loans, net ofdeferred fees and 2,652,323 2,488,760 2,322,737 1,824,245 costs

Allowance for (16,082 ) (15,727 ) (14,625 ) (10,238 )credit losses

Loans, net 2,636,241 2,473,033 2,308,112 1,814,007

Federal Home LoanBank & Atlantic 1,368 1,368 1,368 5,342 Community Bancshares stock

Premises and 17,608 15,849 16,701 17,538 equipment, net

Accrued interest 20,458 18,852 18,897 13,619 receivable

Intangible assets, 2,447 2,563 2,710 2,315 net

Deferred tax asset, 10,611 7,952 7,921 12,538 net

Investment inunconsolidated 31,294 31,783 34,064 39,154 entity

Assets held forsale from 113,650 122,253 128,463 140,657 discontinued operations

Other assets 81,265 79,821 83,003 81,696

Total assets $ 6,277,433 $ 6,169,302 $ 6,214,037 $ 5,656,963



Liabilities:

Deposits

Demand and interest $ 5,205,010 $ 4,882,834 $ 5,089,741 $ 4,402,740 checking

Savings and money 257,050 505,928 455,458 174,290 market

Time deposits - - - 475,000

Total deposits 5,462,060 5,388,762 5,545,199 5,052,030



Securities soldunder agreements to 42 42 42 82 repurchase

Senior debt 98,314 98,222 - -

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

Other long-term 40,277 40,462 40,639 40,991 borrowings

Other liabilities 82,175 69,954 81,677 65,962

Total liabilities $ 5,696,269 $ 5,610,843 $ 5,680,958 $ 5,172,466



Shareholders' equity:

Common stock -authorized,75,000,000 sharesof $1.00 par value;57,650,629 and56,940,521 shares 57,651 57,591 57,555 56,941 issued andoutstanding atDecember 31, 2020and 2019,respectively

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

Additional paid-in 378,218 376,751 374,578 371,633 capital

Retained earnings 128,453 104,282 81,028 50,742

Accumulated othercomprehensive 17,708 20,701 20,784 6,047 income

Total shareholders' 581,164 558,459 533,079 484,497 equity



Total liabilitiesand shareholders' $ 6,277,433 $ 6,169,302 $ 6,214,037 $ 5,656,963 equity

Average balance sheet and net interest income

Three months ended December 31, 2020

Three months ended December 31, 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

$

4,329,794

$

45,524

4.21

%

$

2,514,401

$

31,177

4.96

%

Leases - bank qualified*

7,346

138

7.51

%

12,633

229

7.25

%

Investment securities-taxable

1,239,062

9,229

2.98

%

1,441,895

9,636

2.67

%

Investment securities-nontaxable*

4,041

35

3.46

%

5,825

47

3.23

%

Interest earning deposits at Federal Reserve Bank

193,560

48

0.10

%

569,804

2,505

1.76

%

Net interest earning assets

5,773,803

54,974

3.81

%

4,544,558

43,594

3.84

%

Allowance for credit losses

(15,804

)

(10,162

)

Assets held for sale from discontinued operations

117,482

965

3.29

%

149,301

1,416

3.79

%

Other assets

220,595

254,809

$

6,096,076

$

4,938,506

Liabilities and Shareholders' Equity:

Deposits:

Demand and interest checking

$

4,978,562

$

1,679

0.13

%

$

3,749,860

$

5,405

0.58

%

Savings and money market

270,820

134

0.20

%

66,151

51

0.31

%

Time

-

-

-

%

406,730

2,217

2.18

%

Total deposits

5,249,382

1,813

0.14

%

4,222,741

7,673

0.73

%

Short-term borrowings

32,989

17

0.21

%

102,832

507

1.97

%

Securities sold under agreements to repurchase

41

-

-

%

84

-

-

%

Subordinated debentures

13,401

116

3.46

%

13,401

177

5.28

%

Senior debt

100,031

1,279

5.12

%

-

-

-

%

Total deposits and liabilities

5,395,844

3,225

0.24

%

4,339,058

8,357

0.77

%

Other liabilities

130,420

115,112

Total liabilities

5,526,264

4,454,170

Shareholders' equity

569,812

484,336

$

6,096,076

$

4,938,506

Net interest income on tax equivalent basis*

$

52,714

$

36,653

Tax equivalent adjustment

36

58

Net interest income

$

52,678

$

36,595

Net interest margin *

3.58

%

3.12

%

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





Average balance sheet Three months ended December 31, Three months ended December 31,and net interest 2020 2019income

(dollars in thousands)

Average Average Average Average

Assets: Balance Interest Rate Balance Interest Rate



Interest earning assets:

Loans net of deferred $ 4,329,794 $ 45,524 4.21 % $ 2,514,401 $ 31,177 4.96 %fees and costs

Leases - bank 7,346 138 7.51 % 12,633 229 7.25 %qualified*

Investment 1,239,062 9,229 2.98 % 1,441,895 9,636 2.67 %securities-taxable

Investment 4,041 35 3.46 % 5,825 47 3.23 %securities-nontaxable*

Interest earningdeposits at Federal 193,560 48 0.10 % 569,804 2,505 1.76 %Reserve Bank

Net interest earning 5,773,803 54,974 3.81 % 4,544,558 43,594 3.84 %assets



Allowance for credit (15,804 ) (10,162 ) losses

Assets held for salefrom discontinued 117,482 965 3.29 % 149,301 1,416 3.79 %operations

Other assets 220,595 254,809

$ 6,096,076 $ 4,938,506



Liabilities and Shareholders' Equity:

Deposits:

Demand and interest $ 4,978,562 $ 1,679 0.13 % $ 3,749,860 $ 5,405 0.58 %checking

Savings and money 270,820 134 0.20 % 66,151 51 0.31 %market

Time - - - % 406,730 2,217 2.18 %

Total deposits 5,249,382 1,813 0.14 % 4,222,741 7,673 0.73 %



Short-term borrowings 32,989 17 0.21 % 102,832 507 1.97 %

Securities sold underagreements to 41 - - % 84 - - %repurchase

Subordinated 13,401 116 3.46 % 13,401 177 5.28 %debentures

Senior debt 100,031 1,279 5.12 % - - - %

Total deposits and 5,395,844 3,225 0.24 % 4,339,058 8,357 0.77 %liabilities



Other liabilities 130,420 115,112

Total liabilities 5,526,264 4,454,170



Shareholders' equity 569,812 484,336

$ 6,096,076 $ 4,938,506

Net interest income on $ 52,714 $ 36,653 tax equivalent basis*



Tax equivalent 36 58 adjustment



Net interest income $ 52,678 $ 36,595

Net interest margin * 3.58 % 3.12 %

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

Average balance sheet and net interest income

Year ended December 31, 2020

Year ended December 31, 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

$

3,931,758

$

170,449

4.34

%

$

2,402,686

$

126,176

5.25

%

Leases - bank qualified*

8,885

647

7.28

%

14,968

1,177

7.86

%

Investment securities-taxable

1,317,031

37,822

2.87

%

1,406,247

42,286

3.01

%

Investment securities-nontaxable*

4,412

145

3.29

%

6,533

215

3.29

%

Interest earning deposits at Federal Reserve Bank

381,290

1,885

0.49

%

472,279

10,007

2.12

%

Net interest earning assets

5,643,376

210,948

3.74

%

4,302,713

179,861

4.18

%

Allowance for credit losses

(13,878

)

(9,696

)

Assets held for sale from discontinued operations

127,519

4,222

3.31

%

169,986

6,710

3.95

%

Other assets

226,210

254,674

$

5,983,227

$

4,717,677

Liabilities and Shareholders' Equity:

Deposits:

Demand and interest checking

$

4,864,236

$

11,356

0.23

%

$

3,817,176

$

30,664

0.80

%

Savings and money market

291,204

442

0.15

%

37,671

181

0.48

%

Time

79,439

1,483

1.87

%

170,438

3,555

2.09

%

Total deposits

5,234,879

13,281

0.25

%

4,025,285

34,400

0.85

%

Short-term borrowings

27,322

198

0.72

%

129,031

3,131

2.43

%

Securities sold under agreements to repurchase

49

-

-

%

90

-

-

%

Subordinated debentures

13,401

524

3.91

%

13,401

750

5.60

%

Senior debt

38,532

1,913

4.96

%

-

-

-

%

Total deposits and liabilities

5,314,183

15,916

0.30

%

4,167,807

38,281

0.92

%

Other liabilities

137,983

104,233

Total liabilities

5,452,166

4,272,040

Shareholders' equity

531,061

445,637

$

5,983,227

$

4,717,677

Net interest income on tax equivalent basis*

$

199,254

$

148,290

Tax equivalent adjustment

166

292

Net interest income

$

199,088

$

147,998

Net interest margin *

3.45

%

3.32

%

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





Average balance sheetand net interest Year ended December 31, 2020 Year ended December 31, 2019income

(dollars in thousands)

Average Average Average Average

Assets: Balance Interest Rate Balance Interest Rate



Interest earning assets:

Loans net of deferred $ 3,931,758 $ 170,449 4.34 % $ 2,402,686 $ 126,176 5.25 %fees and costs

Leases - bank 8,885 647 7.28 % 14,968 1,177 7.86 %qualified*

Investment 1,317,031 37,822 2.87 % 1,406,247 42,286 3.01 %securities-taxable

Investment 4,412 145 3.29 % 6,533 215 3.29 %securities-nontaxable*

Interest earningdeposits at Federal 381,290 1,885 0.49 % 472,279 10,007 2.12 %Reserve Bank

Net interest earning 5,643,376 210,948 3.74 % 4,302,713 179,861 4.18 %assets



Allowance for credit (13,878 ) (9,696 ) losses

Assets held for salefrom discontinued 127,519 4,222 3.31 % 169,986 6,710 3.95 %operations

Other assets 226,210 254,674

$ 5,983,227 $ 4,717,677



Liabilities and Shareholders' Equity:

Deposits:

Demand and interest $ 4,864,236 $ 11,356 0.23 % $ 3,817,176 $ 30,664 0.80 %checking

Savings and money 291,204 442 0.15 % 37,671 181 0.48 %market

Time 79,439 1,483 1.87 % 170,438 3,555 2.09 %

Total deposits 5,234,879 13,281 0.25 % 4,025,285 34,400 0.85 %



Short-term borrowings 27,322 198 0.72 % 129,031 3,131 2.43 %

Securities sold underagreements to 49 - - % 90 - - %repurchase

Subordinated 13,401 524 3.91 % 13,401 750 5.60 %debentures

Senior debt 38,532 1,913 4.96 % - - - %

Total deposits and 5,314,183 15,916 0.30 % 4,167,807 38,281 0.92 %liabilities



Other liabilities 137,983 104,233

Total liabilities 5,452,166 4,272,040



Shareholders' equity 531,061 445,637

$ 5,983,227 $ 4,717,677

Net interest income on $ 199,254 $ 148,290 tax equivalent basis*



Tax equivalent 166 292 adjustment



Net interest income $ 199,088 $ 147,998

Net interest margin * 3.45 % 3.32 %

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

Allowance for credit losses:

Year ended

December 31,

December 31,

2020

2019

(dollars in thousands)

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

$

12,875

$

8,653

Loans charged-off:

SBA non-real estate

1,350

1,362

Direct lease financing

2,243

528

Other consumer loans

-

1,103

Total

3,593

2,993

Recoveries:

SBA non-real estate

103

125

Direct lease financing

570

51

Other consumer loans

-

2

Total

673

178

Net charge-offs

2,920

2,815

Provision credited to allowance, excluding commitment provision

6,127

4,400

Balance in allowance for credit losses at end of period

$

16,082

$

10,238

Net charge-offs/average loans

0.07

%

0.12

%

Net charge-offs/average assets

0.05

%

0.06

%

(1) Excludes activity from assets held for sale from discontinued operations. The beginning balance for the 2020 activity differs from the December 31, 2019 balance as a result of the implementation of Current Expected Credit Loss accounting.



Allowance for credit losses: Year ended

December December 31, 31,

2020 2019

(dollars in thousands)



Balance in the allowance for loan and lease losses at $ 12,875 $ 8,653 beginning of period (1)



Loans charged-off:

SBA non-real estate 1,350 1,362

Direct lease financing 2,243 528

Other consumer loans - 1,103

Total 3,593 2,993



Recoveries:

SBA non-real estate 103 125

Direct lease financing 570 51

Other consumer loans - 2

Total 673 178

Net charge-offs 2,920 2,815

Provision credited to allowance, excluding commitment 6,127 4,400 provision



Balance in allowance for credit losses at end of period $ 16,082 $ 10,238

Net charge-offs/average loans 0.07 % 0.12 %

Net charge-offs/average assets 0.05 % 0.06 %

(1) Excludes activity from assets held for sale from discontinued operations.The beginning balance for the 2020 activity differs from the December 31, 2019balance as a result of the implementation of Current Expected Credit Lossaccounting.

Loan portfolio:

December 31,

September 30,

June 30,

December 31,

2020

2020

2020

2019

(in thousands)

SBL non-real estate

$

255,318

$

293,488

$

293,692

84,579

SBL commercial mortgage

300,817

270,264

259,020

218,110

SBL construction

20,273

27,169

33,193

45,310

Small business loans *

576,408

590,921

585,905

347,999

Direct lease financing

462,182

430,675

422,505

434,460

SBLOC / IBLOC**

1,550,086

1,428,253

1,287,350

1,024,420

Advisor financing ***

48,282

26,600

15,529

-

Other specialty lending

2,179

2,194

2,706

3,055

Other consumer loans ****

4,247

3,809

4,003

4,554

2,643,384

2,482,452

2,317,998

1,814,488

Unamortized loan fees and costs

8,939

6,308

4,739

9,757

Total loans, net of unamortized fees and costs

$

2,652,323

$

2,488,760

$

2,322,737

1,824,245



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

2020 2020 2020 2019

(in thousands)



SBL non-real estate $ 255,318 $ 293,488 $ 293,692 84,579

SBL commercial mortgage 300,817 270,264 259,020 218,110

SBL construction 20,273 27,169 33,193 45,310

Small business loans * 576,408 590,921 585,905 347,999

Direct lease financing 462,182 430,675 422,505 434,460

SBLOC / IBLOC** 1,550,086 1,428,253 1,287,350 1,024,420

Advisor financing *** 48,282 26,600 15,529 -

Other specialty lending 2,179 2,194 2,706 3,055

Other consumer loans 4,247 3,809 4,003 4,554****

2,643,384 2,482,452 2,317,998 1,814,488

Unamortized loan fees 8,939 6,308 4,739 9,757and costs

Total loans, net ofunamortized fees and $ 2,652,323 $ 2,488,760 $ 2,322,737 1,824,245costs

Small business portfolio:

December 31,

September 30,

June 30,

December 31,

2020

2020

2020

2019

(in thousands)

SBL, including unamortized fees and costs

577,944

590,314

583,935

352,214

SBL, included in commercial loans held at fair value

243,562

250,958

225,401

220,358

Total small business loans

$

821,506

$

841,272

$

809,336

$

572,572





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

2020 2020 2020 2019

(in thousands)



SBL, including unamortized fees 577,944 590,314 583,935 352,214and costs

SBL, included in commercial loans 243,562 250,958 225,401 220,358held at fair value

Total small business loans $ 821,506 $ 841,272 $ 809,336 $ 572,572

* The preceding table shows small business loans and small business loans held at fair value. The small business loans held at fair value are comprised of the government guaranteed portion of SBA 7a loans at the dates indicated (in thousands). A reduction in SBL non-real estate from $293.5 million to $255.3 million in the fourth quarter resulted from the commencement of U.S. treasury repayments of PPP loans which totaled $42.1 million in fourth quarter 2020.

** 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 $663,000 and $882,000 at December 31, 2020 and December 31, 2019, respectively. Estimated overdraft charge-offs and recoveries are reflected in the allowance for credit losses and have been immaterial.

* The preceding table shows small business loans and small business loans heldat fair value. The small business loans held at fair value are comprised of thegovernment guaranteed portion of SBA 7a loans at the dates indicated (inthousands). A reduction in SBL non-real estate from $293.5 million to $255.3million in the fourth quarter resulted from the commencement of U.S. treasuryrepayments of PPP loans which totaled $42.1 million in fourth quarter 2020.

** 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 $663,000 and $882,000 atDecember 31, 2020 and December 31, 2019, respectively. Estimated overdraftcharge-offs and recoveries are reflected in the allowance for credit losses andhave been immaterial.

Small business loans as of December 31, 2020

Loan principal

(in millions)

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

$

338

Paycheck Protection Program Loans (PPP) (a)

168

Commercial mortgage SBA (b)

176

Construction SBA (c)

14

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

101

Non-SBA small business loans (e)

18

Total principal

$

815

Unamortized fees and costs

7

Total small business loans

$

822

Small business loans as of December 31, 2020



Loan principal

(in millions)

U.S. government guaranteed portion of SBA loans (a) $ 338

Paycheck Protection Program Loans (PPP) (a) 168

Commercial mortgage SBA (b) 176

Construction SBA (c) 14

Unguaranteed portion of U.S. government guaranteed loans (d) 101

Non-SBA small business loans (e) 18

Total principal $ 815

Unamortized fees and costs 7

Total small business loans $ 822

(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 $14 million Construction SBA loans, $11 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 $101 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.

Additionally, the CARES Act of 2020 provided six months of principal and interest payments on 7a loans which generally ended in fourth quarter 2020 or in first quarter 2021. The Consolidated Appropriations Act, 2021, became law in December 2020 and provided for at least an additional three months of such payments on 7a loans, with up to eight months of payments on hotel and restaurant loans. Unlike the six months of CARES Act payments, these additional payments will be capped at $9,000 per month.

(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 $14 million Construction SBA loans, $11 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 $101 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.



Additionally, the CARES Act of 2020 provided six months of principal andinterest payments on 7a loans which generally ended in fourth quarter 2020 orin first quarter 2021. The Consolidated Appropriations Act, 2021, became law inDecember 2020 and provided for at least an additional three months of suchpayments on 7a loans, with up to eight months of payments on hotel andrestaurant loans. Unlike the six months of CARES Act payments, these additionalpayments will be capped at $9,000 per month.

Small business loans by type as of December 31, 2020

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

SBL commercial mortgage*

SBL construction*

SBL non-real estate

Total

% Total

(in millions)

Hotels

$

66

$

3

$

-

$

69

22%

Full-service restaurants

12

1

3

16

5%

Baked goods stores

4

-

12

16

5%

Child day care services

14

1

1

16

5%

Car washes

10

1

-

11

4%

Offices of lawyers

10

-

-

10

3%

Assisted living facilities for the elderly

1

8

-

9

3%

Limited-service restaurants

4

-

4

8

2%

Funeral homes and funeral services

8

-

-

8

3%

Fitness and recreational sports centers

5

1

2

8

3%

General warehousing and storage

7

-

-

7

2%

All other amusement and recreation industries

5

-

1

6

2%

Outpatient mental health and substance abuse centers

5

-

-

5

2%

Gasoline stations with convenience stores

5

-

-

5

2%

Caterers

4

-

-

4

1%

Offices of dentists

4

-

-

4

1%

Other warehousing and storage

3

-

-

3

1%

New car dealers

3

-

-

3

1%

Drinking places (alcoholic beverages)

2

-

1

3

1%

Other**

66

-

32

98

32%

Total

$

238

$

15

$

56

$

309

100%

Small business loans by type as of December 31, 2020

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



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

(in millions)

Hotels $ 66 $ 3 $ - $ 69 22%

Full-service 12 1 3 16 5%restaurants

Baked goods stores 4 - 12 16 5%

Child day care services 14 1 1 16 5%

Car washes 10 1 - 11 4%

Offices of lawyers 10 - - 10 3%

Assisted livingfacilities for the 1 8 - 9 3%elderly

Limited-service 4 - 4 8 2%restaurants

Funeral homes and 8 - - 8 3%funeral services

Fitness andrecreational sports 5 1 2 8 3%centers

General warehousing and 7 - - 7 2%storage

All other amusement and 5 - 1 6 2%recreation industries

Outpatient mentalhealth and substance 5 - - 5 2%abuse centers

Gasoline stations with 5 - - 5 2%convenience stores

Caterers 4 - - 4 1%

Offices of dentists 4 - - 4 1%

Other warehousing and 3 - - 3 1%storage

New car dealers 3 - - 3 1%

Drinking places 2 - 1 3 1%(alcoholic beverages)

Other** 66 - 32 98 32%

Total $ 238 $ 15 $ 56 $ 309 100%

* Of the SBL commercial mortgage and SBL construction loans, $63.3 million represents the total of the non-guaranteed portion of SBA 7a loans and non-SBA loans. The balance of those categories represents SBA 504 loans with 50%-60% origination date loan-to-values.

**Loan types less than $2 million are spread over a hundred different classifications such as Commercial Printing, Pet and Pet Supplies Stores, Securities Brokerage, etc.

* Of the SBL commercial mortgage and SBL construction loans, $63.3 millionrepresents the total of the non-guaranteed portion of SBA 7a loans and non-SBAloans. The balance of those categories represents SBA 504 loans with 50%-60%origination date loan-to-values.

**Loan types less than $2 million are spread over a hundred differentclassifications such as Commercial Printing, Pet and Pet Supplies Stores,Securities Brokerage, etc.

State diversification as of December 31, 2020

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

SBL commercial mortgage*

SBL construction*

SBL non-real estate

Total

% Total

(in millions)

Florida

$

45

$

8

$

8

$

61

20%

California

37

1

5

43

14%

Pennsylvania

30

-

4

34

11%

Illinois

25

1

3

29

9%

North Carolina

22

1

3

26

9%

New York

10

3

5

18

6%

Texas

12

-

5

17

6%

Tennessee

11

-

1

12

4%

New Jersey

4

-

7

11

4%

Virginia

9

-

2

11

4%

Georgia

5

-

2

7

2%

Colorado

3

1

2

6

2%

Michigan

3

-

1

4

1%

Ohio

3

-

1

4

1%

Washington

3

-

-

3

1%

Other States

16

-

7

23

6%

Total

$

238

$

15

$

56

$

309

100%

State diversification as of December 31, 2020

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



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

(in millions)

Florida $ 45 $ 8 $ 8 $ 61 20%

California 37 1 5 43 14%

Pennsylvania 30 - 4 34 11%

Illinois 25 1 3 29 9%

North 22 1 3 26 9%Carolina

New York 10 3 5 18 6%

Texas 12 - 5 17 6%

Tennessee 11 - 1 12 4%

New Jersey 4 - 7 11 4%

Virginia 9 - 2 11 4%

Georgia 5 - 2 7 2%

Colorado 3 1 2 6 2%

Michigan 3 - 1 4 1%

Ohio 3 - 1 4 1%

Washington 3 - - 3 1%

Other States 16 - 7 23 6%

Total $ 238 $ 15 $ 56 $ 309 100%

* Of the SBL commercial mortgage and SBL construction loans, $63.3 million represents the total of the non-guaranteed portion of SBA 7a loans and non-SBA loans. The balance of those categories represents SBA 504 loans with 50%-60% origination date loan-to-values.

* Of the SBL commercial mortgage and SBL construction loans, $63.3 millionrepresents the total of the non-guaranteed portion of SBA 7a loans and non-SBAloans. The balance of those categories represents SBA 504 loans with 50%-60%origination date loan-to-values.

Top 10 loans as of December 31, 2020

Type*

State

SBL commercial mortgage*

SBL construction*

Total

(in millions)

Lawyers office

CA

$

9

$

-

$

9

Hotel

FL

9

-

9

General warehouse and storage

PA

7

-

7

Hotel

NC

6

-

6

Assisted living facility for the elderly

FL

-

5

5

Outpatient mental health and substance abuse center

FL

5

-

5

Hotel

NC

5

-

5

Fitness and recreation sports center

PA

4

-

4

Hotel

PA

4

-

4

Hotel

TN

4

-

4

Total

$

53

$

5

$

58

Top 10 loans as of December 31, 2020



SBL SBLType* State commercial construction* Total mortgage*

(in millions)

Lawyers office CA $ 9 $ - $ 9

Hotel FL 9 - 9

General warehouse and storage PA 7 - 7

Hotel NC 6 - 6

Assisted living facility for the FL - 5 5elderly

Outpatient mental health and FL 5 - 5substance abuse center

Hotel NC 5 - 5

Fitness and recreation sports PA 4 - 4center

Hotel PA 4 - 4

Hotel TN 4 - 4

Total $ 53 $ 5 $ 58

* All of the top 10 loans are 504 SBA loans with 50%-60% origination date loan-to-value. The top 10 loan table above does not include loans to the extent that they are U.S. government guaranteed.

Commercial real estate loans, at fair value, excluding SBA loans, are as follows including LTV at origination:

* All of the top 10 loans are 504 SBA loans with 50%-60% origination dateloan-to-value. The top 10 loan table above does not include loans to the extentthat they are U.S. government guaranteed.



Commercial real estate loans, at fair value, excluding SBA loans, are asfollows including LTV at origination:

Type as of December 31, 2020

Type

# Loans

Balance

Origination date LTV

Weighted average minimum interest rate

(dollars in millions)

Multifamily (apartments)

161

$

1,427

76

%

4.77

%

Hospitality (hotels and lodging)

11

68

65

%

5.75

%

Retail

8

52

70

%

4.62

%

Other

7

25

70

%

5.22

%

187

$

1,572

76

%

4.82

%

Fair value adjustment

(5

)

Total

$

1,567

Type as of December 31, 2020



Weighted # Origination averageType Loans Balance date minimum LTV interest rate

(dollars in millions)

Multifamily (apartments) 161 $ 1,427 76 % 4.77 %

Hospitality (hotels and 11 68 65 % 5.75 %lodging)

Retail 8 52 70 % 4.62 %

Other 7 25 70 % 5.22 %

187 $ 1,572 76 % 4.82 %

Fair value adjustment (5 )

Total $ 1,567

State diversification as of December 31, 2020

15 largest loans (all multifamily) as of December 31, 2020

State

Balance

Origination date LTV

State

Balance

Origination date LTV

(in millions)

(in millions)

Texas

$

419

77%

North Carolina

$

44

78%

Georgia

215

77%

Texas

38

79%

Arizona

123

76%

Texas

36

80%

North Carolina

114

77%

Pennsylvania

32

77%

Ohio

56

69%

Texas

29

75%

Alabama

55

76%

Nevada

28

80%

Other states

590

73%

Texas

27

77%

Total

$

1,572

76%

Arizona

27

79%

Mississippi

26

79%

North Carolina

25

77%

Texas

25

77%

Texas

24

77%

Georgia

23

79%

California

23

65%

Alabama

21

77%

15 Largest loans

$

428

77%



State diversification as of December 15 largest loans (all multifamily) as of31, 2020 December 31, 2020



State Balance Origination State Balance Origination date LTV date LTV

(in millions) (in millions)

Texas $ 419 77% North $ 44 78% Carolina

Georgia 215 77% Texas 38 79%

Arizona 123 76% Texas 36 80%

North 114 77% Pennsylvania 32 77%Carolina

Ohio 56 69% Texas 29 75%

Alabama 55 76% Nevada 28 80%

Other 590 73% Texas 27 77%states

Total $ 1,572 76% Arizona 27 79%

Mississippi 26 79%

North 25 77% Carolina

Texas 25 77%

Texas 24 77%

Georgia 23 79%

California 23 65%

Alabama 21 77%

15 Largest $ 428 77% loans

Institutional banking loans outstanding at December 31, 2020

Type

Principal

% of total

(in millions)

Securities backed lines of credit (SBLOC)

$

1,113

70%

Insurance backed lines of credit (IBLOC)

437

27%

Advisor financing

48

3%

Total

$

1,598

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 percentage of principal to collateral.

Institutional banking loans outstanding at December 31, 2020



Type Principal % of total

(in millions)

Securities backed lines of credit (SBLOC) $ 1,113 70%

Insurance backed lines of credit (IBLOC) 437 27%

Advisor financing 48 3%

Total $ 1,598 100%

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 percentage of principal to collateral.

Top 10 SBLOC loans at December 31, 2020



Principal % Principal to amount collateral

(in millions)

$ 49 37%

17 38%

14 31%

12 25%

12 30%

10 42%

10 21%

9 28%

9 35%

8 73%

Total $ 150 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 August 14, 2020, all were rated Superior (A+ or better) by AM BEST.

Direct lease financing* by type as of December 31, 2020



Principal balance % Total

(in millions)

Government agencies and public institutions** $ 84 18%

Construction 77 17%

Waste management and remediation services 64 14%

Real estate, rental and leasing 52 11%

Retail trade 41 9%

Health care and social assistance 27 6%

Transportation and Warehousing 24 5%

Professional, scientific, and technical 20 4%services

Manufacturing 16 4%

Wholesale trade 16 3%

Educational services 9 2%

Arts, entertainment, and recreation 6 1%

Other 26 6%

Total $ 462 100%

* Of the total $462 million of direct lease financing, $421 million consisted of vehicle leases with the remaining balance consisting of equipment leases.

** Includes public universities and school districts

* Of the total $462 million of direct lease financing, $421 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 December 31, 2020

State

Principal balance

% Total

(in millions)

Florida

$

94

20%

California

36

8%

New Jersey

33

7%

New York

32

7%

Pennsylvania

30

6%

North Carolina

25

5%

Maryland

24

5%

Utah

23

5%

Washington

16

4%

Connecticut

15

3%

Texas

13

3%

Missouri

13

3%

Georgia

11

2%

Alabama

10

2%

Idaho

9

2%

Other states

78

18%

Total

$

462

100%

Direct lease financing by state as of December 31, 2020



State Principal balance % Total

(in millions)

Florida $ 94 20%

California 36 8%

New Jersey 33 7%

New York 32 7%

Pennsylvania 30 6%

North Carolina 25 5%

Maryland 24 5%

Utah 23 5%

Washington 16 4%

Connecticut 15 3%

Texas 13 3%

Missouri 13 3%

Georgia 11 2%

Alabama 10 2%

Idaho 9 2%

Other states 78 18%

Total $ 462 100%

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 December 31, 2020

The Bancorp, Inc.

9.20%

14.43%

14.84%

14.43%

The Bancorp Bank

9.11%

14.27%

14.68%

14.27%

"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 December 31, 2020

The Bancorp, Inc. 9.20% 14.43% 14.84% 14.43%

The Bancorp Bank 9.11% 14.27% 14.68% 14.27%

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

Three months ended

Year ended

December 31, (1)

December 31,

2020

2019

2020

2019

Selected operating ratios:

Return on average assets

1.57%

0.15%

1.34%

1.09%

Return on average equity

16.83%

1.52%

15.08%

11.57%

Net interest margin

3.58%

3.12%

3.45%

3.32%

(1) Annualized





Three months ended Year ended

December 31, (1) December 31,

2020 2019 2020 2019

Selected operating ratios:

Return on average assets 1.57% 0.15% 1.34% 1.09%

Return on average equity 16.83% 1.52% 15.08% 11.57%

Net interest margin 3.58% 3.12% 3.45% 3.32%

^(1) Annualized

Book value per share table:

December 31,

September 30,

June 30,

December 31,

2020

2020

2020

2019

Book value per share

$

10.10

$

9.71

$

9.28

$

8.52





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

2020 2020 2020 2019

Book value per share $ 10.10 $ 9.71 $ 9.28 $ 8.52

Loan quality table:

December 31,

September 30,

June 30,

December 31,

2020

2020

2020

2019

Nonperforming loans to total loans

0.48%

0.49%

0.44%

0.50%

Nonperforming assets to total assets

0.20%

0.20%

0.17%

0.16%

Allowance for credit losses

0.61%

0.63%

0.63%

0.56%

Nonaccrual loans

$

12,227

$

12,275

$

9,957

$

5,796

Loans 90 days past due still accruing interest

497

24

352

3,264

Other real estate owned

-

-

-

-

Total nonperforming assets

$

12,724

$

12,299

$

10,309

$

9,060





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

2020 2020 2020 2019

Nonperforming loans to total 0.48% 0.49% 0.44% 0.50%loans

Nonperforming assets to total 0.20% 0.20% 0.17% 0.16%assets

Allowance for credit losses 0.61% 0.63% 0.63% 0.56%



Nonaccrual loans $ 12,227 $ 12,275 $ 9,957 $ 5,796

Loans 90 days past due still 497 24 352 3,264accruing interest

Other real estate owned - - - -

Total nonperforming assets $ 12,724 $ 12,299 $ 10,309 $ 9,060

Three months ended

December 31,

September 30,

June 30,

December 31,

2020

2020

2020

2019

(in thousands)

Gross dollar volume (GDV)(2)

Prepaid and debit card GDV

$

22,523,855

$

23,964,508

$

23,680,749

$

19,104,327

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





Three months ended

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

2020 2020 2020 2019

(in thousands)

Gross dollar volume (GDV) ^(2):

Prepaid and debit $ 22,523,855 $ 23,964,508 $ 23,680,749 $ 19,104,327card 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 December 31, 2020

(dollars in millions)

Balances

% Growth

Major business lines

Average approximate rates *

Balances **

Year over year

Linked quarter annualized

Loans

Institutional banking ***

2.5%

$

1,598

56%

39%

Small Business Lending****

4.9%

822

14%

13%

Leasing

6.4%

462

6%

29%

Commercial real estate (non SBA at fair value)

4.8%

1,567

nm

nm

Weighted average yield

4.2%

$

4,449

Non-interest income

% Growth

Deposits

Current quarter

Year over year

Payment solutions (prepaid and debit card issuance)

0.1%

$

3,586

33%

nm

$

17.8

5%

Card payment and ACH processing

0.3%

$

1,037

41%

nm

$

1.8

nm

Business line quarterly summary:

Quarter ended December 31, 2020

(dollars in millions)

Balances

% Growth

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

Loans

Institutional 2.5% $ 1,598 56% 39%banking ***

Small Business 4.9% 822 14% 13%Lending****

Leasing 6.4% 462 6% 29%

Commercial realestate (non SBA at 4.8% 1,567 nm nmfair value)

Weighted average 4.2% $ 4,449 Non-interestyield income

% Growth

Current YearDeposits quarter over year

Payment solutions(prepaid and debit 0.1% $ 3,586 33% nm $ 17.8 5%card issuance)

Card payment and 0.3% $ 1,037 41% nm $ 1.8 nmACH processing

* Average rates are for the quarter ended December 31, 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. Loan growth percentages exclude short-term PPP loans.

* Average rates are for the quarter ended December 31, 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. Loangrowth percentages exclude short-term PPP 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

(116

)

December 31, 2020 Bancorp book value**

$

31

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, $ 267 2014

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 (116 )

December 31, 2020 Bancorp book value** $ 31



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 December 31, 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 December 31, 2020.

Walnut Street portfolio composition as of December 31, 2020

Collateral type

% of Portfolio

Commercial real estate non-owner occupied - Retail

67.4

%

Construction and land

24.3

%

Other

8.3

%

Total

100.0

%

Walnut Street portfolio composition as of December 31, 2020



Collateral type % of Portfolio

Commercial real estate non-owner occupied - Retail 67.4 %

Construction and land 24.3 %

Other 8.3 %

Total 100.0 %

Cumulative analysis of marks on discontinued commercial loan principal as of December 31, 2020

Discontinued

Cumulative

% to original

loan principal

marks

principal

(dollars in millions)

Commercial loan discontinued principal before marks

$

64

Florida mall held in discontinued other real estate owned

42

(27

)

Mark at December 31, 2020

(5

)

Cumulative mark at December 31, 2020

$

106

$

(32

)

30

%

Cumulative analysis of marks on discontinued commercial loan principal as ofDecember 31, 2020



Discontinued Cumulative % to original

loan marks principal principal

(dollars in millions)

Commercial loan discontinued principal $ 64 before marks

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

Mark at December 31, 2020 (5 )

Cumulative mark at December 31, 2020 $ 106 $ (32 ) 30 %

Analysis of discontinued commercial loan relationships as of December 31, 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

$

42

$

-

$

42

$

(3

)

$

-

$

(3

)

Loan relationships < $5 million

9

9

18

-

(1

)

(1

)

$

51

$

9

$

60

$

(3

)

$

(1

)

$

(4

)

Analysis of discontinued commercial loan relationships as of December 31, 2020



Performing Nonperforming Total Performing Nonperforming Total

loan loan loan loan marks loan marks marks principal principal principal

(in millions)

5 loanrelationships > $ 42 $ - $ 42 $ (3 ) $ - $ (3 )$5 million

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

$ 51 $ 9 $ 60 $ (3 ) $ (1 ) $ (4 )

Quarterly activity for commercial loan discontinued principal

Commercial

loan principal

(in millions)

Commercial loan discontinued principal September 30, 2020 before marks

$

66

Quarterly paydowns and other reductions

(2

)

Commercial loan discontinued principal December 31, 2020 before marks

$

64

Marks December 31, 2020

(4

)

Net commercial loan exposure December 31, 2020

$

60

Residential mortgages

32

Net loans

$

92

Florida mall in other real estate owned

15

7 properties in other real estate owned

7

Total discontinued assets at December 31, 2020

$

114

Quarterly activity for commercial loan discontinued principal



Commercial

loan principal

(in millions)



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

Quarterly paydowns and other reductions (2 )

Commercial loan discontinued principal December 31, 2020 before $ 64 marks

Marks December 31, 2020 (4 )

Net commercial loan exposure December 31, 2020 $ 60

Residential mortgages 32

Net loans $ 92

Florida mall in other real estate owned 15

7 properties in other real estate owned 7

Total discontinued assets at December 31, 2020 $ 114

Discontinued commercial loan composition as of December 31, 2020

Collateral type

Unpaid principal balance

Mark December 31, 2020

Mark as % of portfolio

(in millions)

Commercial real estate - non-owner occupied:

Retail

$

4

$

(0.6

)

15

%

Office

2

-

-

%

Other

18

(0.1

)

1

%

Construction and land

11

(0.1

)

1

%

Commercial non-real estate and industrial

3

(0.1

)

3

%

1 to 4 family construction

9

(2.5

)

28

%

First mortgage residential non-owner occupied

8

-

-

%

Commercial real estate owner occupied:

Retail

7

(0.7

)

10

%

Residential junior mortgage

1

-

-

%

Other

1

-

-

%

Total

64

$

(4.1

)

6

%

Less: mark

(4

)

Net commercial loan exposure December 31, 2020

$

60

$

(4.1

)

Discontinued commercial loan composition as of December 31, 2020



Unpaid Mark Mark as % ofCollateral type principal December 31, portfolio balance 2020

(in millions)

Commercial real estate - non-owner occupied:

Retail $ 4 $ (0.6 ) 15 %

Office 2 - - %

Other 18 (0.1 ) 1 %

Construction and land 11 (0.1 ) 1 %

Commercial non-real estate and 3 (0.1 ) 3 %industrial

1 to 4 family construction 9 (2.5 ) 28 %

First mortgage residential 8 - - %non-owner occupied

Commercial real estate owner occupied:

Retail 7 (0.7 ) 10 %

Residential junior mortgage 1 - - %

Other 1 - - %

Total 64 $ (4.1 ) 6 %

Less: mark (4 )

Net commercial loan exposure $ 60 $ (4.1 ) December 31, 2020

Loan payment deferrals as of December 31, 2020

Cumulative

Total

Total

% of

months

loan

loan

loan balances

deferred (1)

balance deferrals

balances

with deferrals

(dollars in millions)

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

6.8

$

50

$

1,572

3.2

%

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

-

-

1,598

-

%

SBL commercial mortgage

5.6

67

419

16.0

%

SBL construction

-

-

20

-

%

SBL non-real estate and PPP

4.5

24

382

6.3

%

Direct lease financing

3.0

1

462

0.2

%

Discontinued operations

6.2

6

96

6.3

%

Other consumer loans and specialty lending

-

-

7

-

%

Total

5.8

$

148

$

4,556

3.2

%

(1) Weighted average of cumulative months deferred for loans currently on deferral

Loan payment deferrals as of December 31, 2020



Cumulative Total Total % of

months loan loan loan balances

deferred balance balances with (1) deferrals deferrals

(dollars in millions)

Commercial real estate loansheld at fair value (excluding 6.8 $ 50 $ 1,572 3.2 %SBA loans shown below)

Securities backed lines ofcredit, insurance backed lines - - 1,598 - %of credit & advisor financing

SBL commercial mortgage 5.6 67 419 16.0 %

SBL construction - - 20 - %

SBL non-real estate and PPP 4.5 24 382 6.3 %

Direct lease financing 3.0 1 462 0.2 %

Discontinued operations 6.2 6 96 6.3 %

Other consumer loans and - - 7 - %specialty lending

Total 5.8 $ 148 $ 4,556 3.2 %

(1) Weighted average of cumulative months deferred for loans currently ondeferral

Note: At December 31, 2020, SBA 7a loans, included in the three SBL loan balance categories above, totaled $439.0 million of which $101.0 million was not U.S. government guaranteed. The CARES Act of 2020, or ("the CARES Act"), provided SBA 7a borrowers six months of principal and interest payments. The Consolidated Appropriations Act, 2021, became law in December 2020 and provided for an additional three months of payments on SBA 7a loans which begin on February 1, 2021. Accordingly, we expect deferrals to decrease when those payments are reinstituted at that date.

Note: At December 31, 2020, SBA 7a loans, included in the three SBL loanbalance categories above, totaled $439.0 million of which $101.0 million wasnot U.S. government guaranteed. The CARES Act of 2020, or ("the CARES Act"),provided SBA 7a borrowers six months of principal and interest payments. TheConsolidated Appropriations Act, 2021, became law in December 2020 and providedfor an additional three months of payments on SBA 7a loans which begin onFebruary 1, 2021. Accordingly, we expect deferrals to decrease when thosepayments are reinstituted at that date.

SBA 7a deferral distribution by type as of December 31, 2020

(comprised of the unguaranteed portion of SBA 7a loans)

Total

% Total

(in thousands)

Hotels*

$

4,924

34

%

Sports and recreation instruction

1,157

8

%

Offices of dentists

1,096

7

%

Car washes

861

6

%

Child and youth services

810

5

%

Full-service restaurants*

763

5

%

Limited-service restaurants*

512

3

%

Sporting and athletic goods manufacturing

476

3

%

All other miscellaneous food manufacturing

434

3

%

Coin-operated laundries and drycleaners

405

3

%

Administrative management and general management consulting services

333

2

%

Commercial printing (except screen and books)

332

2

%

Pet care (except veterinary) services

308

2

%

Funeral homes and funeral services

308

2

%

Industrial machinery and equipment merchant wholesalers

302

2

%

Other

1,755

13

%

Total

$

14,776

100

%

SBA 7a deferral distribution by type as of December 31, 2020

(comprised of the unguaranteed portion of SBA 7a loans)



Total % Total

(in thousands)

Hotels* $ 4,924 34 %

Sports and recreation instruction 1,157 8 %

Offices of dentists 1,096 7 %

Car washes 861 6 %

Child and youth services 810 5 %

Full-service restaurants* 763 5 %

Limited-service restaurants* 512 3 %

Sporting and athletic goods manufacturing 476 3 %

All other miscellaneous food manufacturing 434 3 %

Coin-operated laundries and drycleaners 405 3 %

Administrative management and general management consulting 333 2 %services

Commercial printing (except screen and books) 332 2 %

Pet care (except veterinary) services 308 2 %

Funeral homes and funeral services 308 2 %

Industrial machinery and equipment merchant wholesalers 302 2 %

Other 1,755 13 %

Total $ 14,776 100 %

* At December 31, 2020, SBA 7a loans, included in SBL, totaled $439.0 million of which $101.0 million was not U.S. government guaranteed. The CARES Act of 2020, or ("the CARES Act"), provided SBA 7a borrowers six months of principal and interest payments. The Consolidated Appropriations Act, 2021, became law in December 2020 and provided for an additional three months of payments on SBA 7a loans which begin on February 1, 2021. Accordingly, we expect deferrals to decrease when those payments are reinstituted at that date.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210128005982/en/

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