Business Wire | Oct 28, 2021 04:06PM EDT

The Bancorp, Inc. Reports Third Quarter 2021 Financial Results

Oct. 28, 2021

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

Highlights

* For the quarter ended September 30, 2021, The Bancorp earned net income of $28.3 million, or $0.48 diluted earnings per share.

* Return on assets and equity for the quarter ended September 30, 2021 amounted to 1.8% and 18%, respectively, compared to 1.5% and 17%, respectively, for the quarter ended September 30, 2020 (all percentages "annualized.")

* Net interest margin amounted to 3.35% for the quarter ended September 30, 2021, compared to 3.37% for the quarter ended September 30, 2020 and 3.19% for the quarter ended June 30, 2021.

* Net interest income was $50.9 million for the quarter ended September 30, 2021 compared to $50.0 million for the quarter ended September 30, 2020. In third quarter 2021, growth in net interest income was significantly offset by the $1.9 million impact of loan prepayments on commercial real estate loan interest. However, net realized and unrealized gains on commercial loans increased $3.6 million in third quarter 2021 compared to third quarter 2020, which resulted primarily from fees related to those prepayments. In the third quarter of 2021, we recommenced the origination of such loans, identified as real estate bridge loans, which are intended to offset the impact of prepayments and payoffs.

* Average loans and leases, including loans at fair value, increased 9% to $4.58 billion for the quarter ended September 30, 2021, compared to $4.21 billion for the quarter ended September 30, 2020.

* Gross dollar volume ("GDV"), representing the total amounts spent on prepaid and debit cards, increased $428.7 million, or 2%, to $24.4 billion for the quarter ended September 30, 2021 compared to the quarter ended September 30, 2020. GDV for the 2020 quarter included the impact of significant government stimulus resulting from the Covid-19 pandemic.

* SBLOC (securities backed lines of credit), IBLOC (insurance backed lines of credit) and investment advisor financing loans collectively increased 32% year over year and 6% quarter over quarter to $1.92 billion at September 30, 2021.

* Small Business Loans, including those held at fair value, grew 12% year over year to $709.5 million at September 30, 2021. That growth and $709.5 million balance are exclusive of Paycheck Protection Program ("PPP") loan balances of $71.3 million and $207.9 million, respectively, at September 30, 2021 and September 30, 2020.

* Direct lease financing balances increased 19% year over year to $514.1 million at September 30, 2021.

* The average interest rate on $5.66 billion of average deposits and interest-bearing liabilities during the third quarter of 2021 was 0.18%. Average deposits of $5.53 billion for the third quarter 2021, reflected a decrease of 1% from the $5.56 billion of average deposits for the quarter ended September 30, 2020.

* As of September 30, 2021, substantially all of the borrowers with Covid-19 related payment deferrals had recommenced making payments, with only approximately $1.3 million of non-U.S. guaranteed loan principal remaining in deferral.

* Consolidated and The Bancorp Bank ("the Bank") leverage ratios were 9.82% and 10.24%, respectively, at September 30, 2021. The Bancorp and its subsidiary, The Bank, remain well capitalized.

* Book value per common share at September 30, 2021 was $11.13 per share compared to $9.71 per share at September 30, 2020, an increase of 15%, primarily as a result of retained earnings.

* The Bancorp repurchased 440,887 shares of its common stock at an average cost of $22.68 per share during the quarter ended September 30, 2021.

"We continue to experience business momentum across our platform and strong pipelines that will support continued growth into 2022", said CEO and President Damian Kozlowski. "We are issuing preliminary guidance of $2.15 a share for 2022 or approximately 21% growth over the current 2021 guidance of $1.78. The $2.15 does not include the impact of planned buybacks. In addition, in 2022, we intend to increase our stock buyback to $15 million a quarter from $10 million a quarter."

The Bancorp reported net income of $28.3 million, or $0.48 per diluted share, for the quarter ended September 30, 2021, compared to net income of $23.3 million, or $0.40 per diluted share, for the quarter ended September 30, 2020. 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 9.82%, 15.69%, 16.10% and 15.69%, respectively, compared to well-capitalized minimums of 5%, 8%, 10% and 6.5%, respectively.

Conference Call Webcast

You may access the LIVE webcast of The Bancorp's Quarterly Earnings Conference Call at 8:00 AM ET Friday, October 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 9257937. You may listen to the replay of the webcast following the live call on The Bancorp's investor relations website or telephonically until Friday, November 5, 2021 by dialing 855.859.2056, access code 9257937.

The Bancorp, Inc. (NASDAQ: TBBK), headquartered in Wilmington, Delaware, through its subsidiary, The Bancorp Bank, provides non-bank financial companies with the people, processes, and technology to meet their unique banking needs. Through its Fintech Solutions, Institutional Banking, Commercial Lending, and Real Estate Bridge Lending businesses, The Bancorp provides partner-focused solutions paired with cutting-edge technology for companies that range from entrepreneurial startups to Fortune 500 companies. With over 20 years of experience, The Bancorp has become a leader in the financial services industry, earning recognition as the #1 issuer of prepaid cards in the U.S., a nationwide provider of bridge financing for real estate capital improvement plans, an SBA National Preferred Lender, a leading provider of securities-backed lines of credit, with one of the few bank-owned commercial vehicle leasing groups. By its company-wide commitment to excellence, The Bancorp has also been ranked as one of the 100 Fastest-Growing Companies by Fortune, a Top 50 Employer by Equal Opportunity Magazine, and was selected to be included in the S&P Small Cap 600. For more about The Bancorp, visit https://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. 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 and 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 press release, except as may be required under applicable law.

The Bancorp, Inc.

Financial highlights

(unaudited)



Three months ended Nine months ended

September 30, September 30,

Condensed income 2021 2020 2021 2020statement

(in thousands, except per share data)



Net interest income $ 50,893 $ 49,996 $ 158,719 $ 143,153

Provision for credit 1,613 1,297 1,484 5,798losses

Non-interest income

ACH, card and otherpayment processing 1,905 1,760 5,605 5,313fees

Prepaid, debit card 18,223 19,434 56,878 56,647and related fees

Net realized andunrealized gains (losses) oncommercial

loans, at fair value 4,306 684 8,881 (5,412)

Change in value ofinvestment in - - - (45)unconsolidated entity

Leasing related 1,968 1,519 4,700 2,795income

Other non-interest 186 955 459 2,019income

Total non-interest 26,588 24,352 76,523 61,317income

Non-interest expense

Salaries and employee 25,094 26,417 77,839 74,650benefits

Data processing 1,209 1,192 3,481 3,538expense

Legal expense 1,251 994 5,349 4,136

FDIC insurance 266 2,180 5,235 7,687

Software 4,045 3,595 11,435 10,458

Other non-interest 7,519 7,648 21,811 22,595expense

Total non-interest 39,384 42,026 125,150 123,064expense

Income fromcontinuing operations 36,484 31,025 108,608 75,608before income taxes

Income tax expense 8,289 7,894 25,195 19,033

Net income from 28,195 23,131 83,413 56,575continuing operations

Discontinued operations

Income (loss) fromdiscontinued 87 (1,671) 324 (2,720)operations beforeincome taxes

Income tax expense 21 (1,794) 76 (2,058)(benefit)

Net income (loss)from discontinued 66 123 248 (662)operations, net oftax

Net income $ 28,261 $ 23,254 $ 83,661 $ 55,913



Net income per sharefrom continuing $ 0.49 $ 0.40 $ 1.45 $ 0.98operations - basic

Net income (loss) pershare from $ - $ - $ 0.01 $ (0.01)discontinuedoperations - basic

Net income per share $ 0.49 $ 0.40 $ 1.46 $ 0.97- basic



Net income per sharefrom continuing $ 0.48 $ 0.40 $ 1.41 $ 0.97operations - diluted

Net income (loss) pershare from $ - $ - $ 0.01 $ (0.01)discontinuedoperations - diluted

Net income per share $ 0.48 $ 0.40 $ 1.42 $ 0.96- diluted

Weighted average 57,198,778 57,588,168 57,221,174 57,433,477shares - basic

Weighted average 58,628,306 58,471,192 58,932,146 58,051,833shares - diluted

Note: Compared to higher rates in recent periods, the effective tax rate for the three and nine months ended September 30, 2021 approximated 23% as a result of the impact of excess tax deductions related to stock-based compensation, recorded as discrete items. The large deductions and tax benefits resulted from the increase in the Company's stock price as compared to the original grant date.





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

2021 2021 2020 2020 (unaudited) (unaudited) (unaudited)

(in thousands, except share data)

Assets:

Cash and cash equivalents

Cash and due from $ 6,687 $ 5,470 $ 5,984 $ 6,220 banks

Interest earningdeposits at Federal 310,642 583,498 339,531 294,758 Reserve Bank

Total cash and cash 317,329 588,968 345,515 300,978 equivalents



Investmentsecurities, 1,054,223 1,106,075 1,206,164 1,264,903 available-for-sale,at fair value

Commercial loans, 1,550,025 1,690,216 1,810,812 1,849,947 at fair value

Loans, net ofdeferred fees and 3,136,662 2,915,344 2,652,323 2,488,760 costs

Allowance for (16,159 ) (15,292 ) (16,082 ) (15,727 )credit losses

Loans, net 3,120,503 2,900,052 2,636,241 2,473,033

Federal Home LoanBank and Atlantic 1,663 1,667 1,368 1,368 Central BankersBank stock

Premises and 16,602 17,392 17,608 15,849 equipment, net

Accrued interest 17,180 18,668 20,458 18,852 receivable

Intangible assets, 2,547 2,646 2,845 2,563 net

Other real estate 2,145 - - - owned

Deferred tax asset, 12,237 10,923 9,757 7,952 net

Investment inunconsolidated - 24,988 31,294 31,783 entity, at fairvalue

Assetsheld-for-sale from 87,904 97,496 113,650 122,253 discontinuedoperations

Other assets 86,105 91,516 81,129 79,821

Total assets $ 6,268,463 $ 6,550,607 $ 6,276,841 $ 6,169,302



Liabilities:

Deposits

Demand and interest $ 4,734,352 $ 5,225,024 $ 5,205,010 $ 4,882,834 checking

Savings and money 378,160 459,688 257,050 505,928 market

Total deposits 5,112,512 5,684,712 5,462,060 5,388,762



Securities soldunder agreements to 42 42 42 42 repurchase

Short-term 300,000 - - - borrowings

Senior debt 98,590 98,498 98,314 98,222

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

Other long-term 39,715 39,901 40,277 40,462 borrowings

Other liabilities 66,226 94,944 81,583 69,954

Total liabilities $ 5,630,486 $ 5,931,498 $ 5,695,677 $ 5,610,843



Shareholders' equity:

Common stock -authorized,75,000,000 sharesof $1.00 par value;57,330,846 and57,490,874 shares 57,331 57,458 57,551 57,491 issued andoutstanding atSeptember 30, 2021and 2020,respectively

Additional paid-in 357,528 363,241 377,452 375,985 capital

Retained earnings 212,114 183,853 128,453 104,282

Accumulated othercomprehensive 11,004 14,557 17,708 20,701 income

Total shareholders' 637,977 619,109 581,164 558,459 equity



Total liabilitiesand shareholders' $ 6,268,463 $ 6,550,607 $ 6,276,841 $ 6,169,302 equity

Note: Previous balance sheets included investment in unconsolidated entity, which reflected Bancorp's balance of the Walnut Street investment. Walnut Street was comprised of Bancorp loans sold to that entity, which was partially financed by an independent investor. In the third quarter of 2021, The Bancorp and that investor dissolved the entity, as the remaining balance did not warrant ongoing administrative and accounting expenses. As a result of the dissolution, the investment in unconsolidated entity, which had a June 30, 2021 balance of $25.0 million, was reclassified as follows. Approximately $22.9 million of loans were reclassified to commercial loans, at fair value and $2.1 million was reclassified to other real estate owned, as those assets continue to be reported at fair value.





Average balance sheet Three months ended September 30, Three months ended September 30,and net interest 2021 2020income

(dollars in thousands; unaudited)

Average Average Average Average

Assets: Balance Interest Rate Balance Interest Rate



Interest earning assets:

Loans, net of deferred $ 4,573,431 $ 46,357 4.05% $ 4,202,054 $ 44,318 4.22%fees and costs**

Leases-bank qualified* 5,031 87 6.92% 8,026 146 7.28%

Investment 1,012,007 6,882 2.72% 1,300,191 7,911 2.43%securities-taxable

Investment 3,558 32 3.60% 4,041 35 3.46%securities-nontaxable*

Interest earningdeposits at Federal 479,350 167 0.14% 413,259 106 0.10%Reserve Bank

Net interest earning 6,073,377 53,525 3.53% 5,927,571 52,516 3.54%assets



Allowance for credit (16,277) (14,587) losses

Assets held-for-salefrom discontinued 90,598 754 3.33% 124,916 890 2.85%operations

Other assets 214,715 195,125

$ 6,362,413 $ 6,233,025



Liabilities and Shareholders' Equity:

Deposits:

Demand and interest $ 5,124,189 $ 1,063 0.08% $ 5,079,711 $ 1,591 0.13%checking

Savings and money 404,775 146 0.14% 484,323 139 0.11%market

Total deposits 5,528,964 1,209 0.09% 5,564,034 1,730 0.12%



Short-term borrowings 13,097 7 0.21% 3,260 1 0.12%

Repurchase agreements 41 - - 41 - -

Subordinated 13,401 112 3.34% 13,401 118 3.52%debentures

Senior debt 100,329 1,279 5.10% 53,260 633 4.75%

Total deposits and 5,655,832 2,607 0.18% 5,633,996 2,482 0.18%liabilities



Other liabilities 78,038 53,260

Total liabilities 5,733,870 5,687,256



Shareholders' equity 628,543 545,769

$ 6,362,413 $ 6,233,025

Net interest income on $ 51,672 $ 50,924 tax equivalent basis*



Tax equivalent 25 38 adjustment



Net interest income $ 51,647 $ 50,886

Net interest margin * 3.35% 3.37%

* Full taxable equivalent basis, using a statutory Federal tax rate of 21% for 2021 and 2020. ** Includes commercial loans, at fair value. All periods include non-accrual loans.

NOTE: In the table above, interest on loans for 2021 includes $1.2 million of interest and fees on PPP loans. In 2020 the table above includes comparable PPP interest and fees of $2.1 million.





Average balance sheet Nine months ended September 30, Nine months ended September 30,and net interest 2021 2020income

(dollars in thousands; unaudited)

Average Average Average Average

Assets: Balance Interest Rate Balance Interest Rate



Interest earning assets:

Loans, net of deferred $ 4,541,262 $ 143,546 4.21% $ 3,798,104 $ 124,924 4.39%fees and costs**

Leases-bank qualified* 5,925 301 6.77% 9,401 509 7.22%

Investment 1,094,633 22,891 2.79% 1,343,211 28,594 2.84%securities-taxable

Investment 3,824 99 3.45% 4,537 110 3.23%securities-nontaxable*

Interest earningdeposits at Federal 781,606 650 0.11% 444,323 1,836 0.55%Reserve Bank

Net interest earning 6,427,250 167,487 3.47% 5,599,576 155,973 3.71%assets



Allowance for credit (16,254) (13,225) losses

Assets held for salefrom discontinued 99,472 2,388 3.20% 130,880 3,259 3.32%operations

Other assets 225,802 243,629

$ 6,736,270 $ 5,960,860



Liabilities and Shareholders' Equity:

Deposits:

Demand and interest $ 5,452,604 $ 4,007 0.10% $ 4,858,666 $ 9,676 0.27%checking

Savings and money 446,016 487 0.15% 298,049 309 0.14%market

Time deposits - - - 106,113 1,483 1.86%

Total deposits 5,898,620 4,494 0.10% 5,262,828 11,468 0.29%



Short-term borrowings 8,717 15 0.23% 25,419 181 0.95%

Repurchase agreements 41 - - 51 - -

Subordinated 13,401 337 3.35% 13,401 408 4.06%debentures

Senior debt 100,237 3,838 5.11% 17,883 633 4.72%

Total deposits and 6,021,016 8,684 0.19% 5,319,582 12,690 0.32%liabilities



Other liabilities 105,683 119,961

Total liabilities 6,126,699 5,439,543



Shareholders' equity 609,571 521,317

$ 6,736,270 $ 5,960,860

Net interest income on $ 161,191 $ 146,542 tax equivalent basis*



Tax equivalent 84 130 adjustment



Net interest income $ 161,107 $ 146,412

Net interest margin * 3.29% 3.41%

* Full taxable equivalent basis, using a statutory Federal tax rate of 21% for 2021 and 2020. ** Includes commercial loans, at fair value. All periods include non-accrual loans.

NOTE: In the table above, the 2021 interest on loans reflects $4.6 million of interest and fees which were earned on a short-term line of credit to another institution to initially fund PPP loans, which did not significantly increase average loans or assets and which are not expected to recur. Interest on loans in 2021 also includes $4.9 million of interest and fees on PPP loans. In 2020 the table above includes comparable PPP interest and fees of $3.7 million. Increases in interest earning deposits at the Federal Reserve Bank reflect increased deposits resulting from stimulus payments distributed to a large segment of the population, resulting from December 2020 federal legislation.



Allowance for credit losses Nine months ended Year ended

September September December 30, 30, 31,

2021 2020 2020 (unaudited) (unaudited)

(dollars in thousands)



Balance in the allowance for credit losses $ 16,082 $ 12,875 $ 12,875at beginning of period (1)



Loans charged-off:

SBA non-real estate 896 1,350 1,350

SBA commercial mortgage 23 - -

Direct lease financing 248 2,178 2,243

SBLOC 15 - -

Consumer - home equity 10 - -

Total 1,192 3,528 3,593



Recoveries:

SBA non-real estate 18 82 103

SBA commercial mortgage 9 - -

Direct lease financing 50 502 570

Total 77 584 673

Net charge-offs 1,115 2,944 2,920

Provision credited to allowance, excluding 1,192 5,796 6,127commitment provision



Balance in allowance for credit losses at $ 16,159 $ 15,727 $ 16,082end of period

Net charge-offs/average loans 0.04% 0.08% 0.07%

Net charge-offs/average assets 0.02% 0.05% 0.05%

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





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

2021 2021 2020 2020

(in thousands)



SBL non-real estate $ 171,845 $ 228,958 $ 255,318 $ 293,488

SBL commercial mortgage 367,272 343,487 300,817 270,264

SBL construction 23,117 18,494 20,273 27,169

Small business loans * 562,234 590,939 576,408 590,921

Direct lease financing 514,068 506,424 462,182 430,675

SBLOC / IBLOC** 1,834,523 1,729,628 1,550,086 1,428,253

Advisor financing *** 81,143 72,190 48,282 26,600

Real estate bridge 128,699 - - -lending

Other loans **** 4,917 5,840 6,426 6,003

3,125,584 2,905,021 2,643,384 2,482,452

Unamortized loan fees and 11,078 10,323 8,939 6,308costs

Total loans, net ofunamortized fees and $ 3,136,662 $ 2,915,344 $ 2,652,323 $ 2,488,760costs

Small business portfolio

September 30,

June 30,

December 31,

September 30,

2021

2021

2020

2020

(in thousands)

SBL, including unamortized fees and costs

$

566,472

$

593,401

$

577,944

$

590,314

SBL, included in commercial loans, at fair value

214,301

225,534

243,562

250,958

Total small business loans

$

780,773

$

818,935

$

821,506

$

841,272

* 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. A reduction in SBL non-real estate loans from $229.0 million at June 30, 2021 to $171.8 million at September 30, 2021 resulted from U.S. government repayments of $58.2 million of PPP loans authorized by The Consolidated Appropriations Act, 2021. PPP loans totaled $71.3 million at September 30, 2021 and $165.7 million at December 31, 2020, respectively. ** Securities Backed Lines of Credit, or SBLOC, are collateralized by marketable securities, while Insurance Backed Lines of Credit, or 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 loans are demand deposit overdrafts reclassified as loan balances totaling $272,000 and $663,000 at September 30, 2021 and December 31, 2020, respectively. Estimated overdraft charge-offs and recoveries are reflected in the allowance for credit losses and have been immaterial.





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

2021 2021 2020 2020

(in thousands)



SBL, including unamortized fees $ 566,472 $ 593,401 $ 577,944 $ 590,314and costs

SBL, included in commercial loans, 214,301 225,534 243,562 250,958at fair value

Total small business loans $ 780,773 $ 818,935 $ 821,506 $ 841,272

* 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. A reduction in SBL non-real estate loans from $229.0 million at June 30, 2021 to $171.8 million at September 30, 2021 resulted from U.S. government repayments of $58.2 million of PPP loans authorized by The Consolidated Appropriations Act, 2021. PPP loans totaled $71.3 million at September 30, 2021 and $165.7 million at December 31, 2020, respectively. ** Securities Backed Lines of Credit, or SBLOC, are collateralized by marketable securities, while Insurance Backed Lines of Credit, or 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 loans are demand deposit overdrafts reclassified as loan balances totaling $272,000 and $663,000 at September 30, 2021 and December 31, 2020, respectively. Estimated overdraft charge-offs and recoveries are reflected in the allowance for credit losses and have been immaterial.

Small business loans as of September 30, 2021



Loan principal

(in millions)

U.S. government guaranteed portion of SBA loans (a) $ 370

Paycheck Protection Program loans (PPP) (a) 71

Commercial mortgage SBA (b) 195

Construction SBA (c) 13

Non-guaranteed portion of U.S. government guaranteed 7a loans 104(d)

Non-SBA small business loans (e) 18

Total principal $ 771

Unamortized fees and costs 10

Total small business loans $ 781

(a) This is the portion of SBA 7a loans (7a) and PPP loans which have been guaranteed by the U.S. government, and therefore are assumed to have no credit risk. (b) Substantially all these loans are made under the SBA 504 Fixed Asset Financing program (504) which dictates origination date loan-to-value percentages ("LTV"), generally 50-60%, to which the Bank adheres. (c) Of the $13 million in Construction SBA loans, $11 million are 504 first mortgages with an origination date LTV of 50-60% and $2 million are SBA interim loans with an approved SBA post-construction full takeout/payoff. (d) The $104 million represents the non-guaranteed 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 of non-SBA loans is comprised of approximately 20 conventional coffee/doughnut/carryout franchisee note purchases. The majority of purchased notes were made to multi-unit operators, are considered seasoned and have performed as agreed.

Small business loans by type as of September 30, 2021

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



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

(in millions)

Hotels and motels $ 67 $ 4 $ - $ 71 21%

Full-service 16 1 3 20 6%restaurants

Baked goods stores 4 - 11 15 5%

Child day care services 14 - 1 15 5%

Car washes 10 2 - 12 4%

Lessors ofnonresidential 10 - - 10 3%buildings (exceptminiwarehouses)

Assisted livingfacilities for the 10 - - 10 3%elderly

Offices of lawyers 9 - - 9 3%

Funeral homes and 9 - - 9 3%funeral services

General warehousing and 7 - - 7 2%storage

Limited-service 2 1 3 6 2%restaurants

Fitness andrecreational sports - 4 2 6 2%centers

Amusement and 5 - 1 6 2%recreation industries

Outpatient mentalhealth and substance 5 - - 5 1%abuse centers

Spectator sports 5 - - 5 1%

Perishable prepared 5 - - 5 1%food manufacturing

Gasoline stations with 5 - - 5 1%convenience stores

Offices of dentists 3 - - 3 1%

Warehousing and storage 3 - - 3 1%

New car dealers 3 - - 3 1%

Miscellaneous wood 3 - - 3 1%product manufacturing

Plumbing, heating, andair-conditioning 3 - - 3 1%contractors

Offices of physicians(except mental health 3 - - 3 1%specialists)

Technical and trade - 3 - 3 1%schools

General purpose 2 - - 2 1%machinery manufacturing

Pet care (except 2 - - 2 1%veterinary) services

Landscaping services 1 - 2 3 1%

Sewing, needlework, and 2 - - 2 1%piece goods stores

Automotive body, paint,and interior repair and 2 - - 2 1%maintenance

Vocational 2 - 2 4 1%rehabilitation services

Amusement arcades 2 - - 2 1%

Lessors of real estate 2 - - 2 1%property

Other** 49 1 25 75 20%

Total $ 265 $ 16 $ 50 $ 331 100%

* Of the SBL commercial mortgage and SBL construction loans, $62 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.

State diversification as of September 30, 2021

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



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

(in millions)

Florida $ 56 $ - $ 8 $ 64 19%

California 42 1 4 47 14%

North Carolina 23 2 3 28 9%

Pennsylvania 23 4 3 30 8%

Illinois 22 - 3 25 8%

New York 14 4 3 21 6%

New Jersey 12 - 6 18 6%

Texas 12 - 4 16 5%

Virginia 9 - 2 11 3%

Tennessee 10 - - 10 3%

Colorado 3 5 2 10 3%

Georgia 7 - 2 9 3%

Michigan 4 - 1 5 2%

Washington 3 - - 3 1%

Ohio 3 - - 3 1%

Other states 22 - 9 31 9%

Total $ 265 $ 16 $ 50 $ 331 100%

* Of the SBL commercial mortgage and SBL construction loans, $62 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.

Top 10 loans as of September 30, 2021



Type* State SBL commercial mortgage*

(in millions)

Hotel FL $ 9

Lawyer's office CA 9

Warehouse PA 7

Hotel NC 6

Assisted living facility FL 5

Mental health and substance abuse centers FL 5

Hotel NC 5

Prepared food manufacturing NJ 4

Hotel PA 4

Hotel TN 4

Total $ 58

* All the top 10 loans are 504 SBA loans with 50%-60% origination dateloan-to-value and are in the commercial mortgage category. The top 10 loantable above does not include loans to the extent that they are U.S. governmentguaranteed.

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

Type as of September 30, 2021

Type

# Loans

Balance

Weighted average origination date LTV

Weighted average interest rate

(dollars in millions)

Real estate bridge lending (multi-family apartments)*

15

$

129

75%

4.22%

Commercial real estate loans, at fair value:

Multi-family (apartments)*

115

$

1,193

76%

4.75%

Hospitality (hotels and lodging)

9

66

65%

5.69%

Retail

6

61

71%

4.33%

Other

8

21

73%

5.16%

138

1,341

75%

4.78%

Fair value adjustment

(6)

Total commercial real estate loans, at fair value

1,335

Total commercial real estate loans

$

1,464

75%

4.75%

*In the third quarter of 2021, we recommenced the origination of multi-family apartment loans. These are similar to the multi-family apartment loans carried at fair value, but at origination are intended to be held on the balance sheet, so are not accounted for at fair value.

Commercial real estate loans, excluding SBA loans, are as follows including LTVat origination:

Type as of September 30, 2021



Weighted Weighted # average averageType Loans Balance origination interest date rate LTV

(dollars in millions)

Real estate bridge lending 15 $ 129 75% 4.22%(multi-family apartments)*



Commercial real estate loans, at fair value:

Multi-family (apartments)* 115 $ 1,193 76% 4.75%

Hospitality (hotels and 9 66 65% 5.69%lodging)

Retail 6 61 71% 4.33%

Other 8 21 73% 5.16%

138 1,341 75% 4.78%

Fair value adjustment (6)

Total commercial real estate 1,335 loans, at fair value

Total commercial real estate $ 1,464 75% 4.75%loans

*In the third quarter of 2021, we recommenced the origination of multi-family apartment loans. These are similar to the multi-family apartment loans carried at fair value, but at origination are intended to be held on the balance sheet, so are not accounted for at fair value.



State diversification as of 15 largest loans (all multi-family) asSeptember 30, 2021 of September 30, 2021



State Balance Origination State Balance Origination date LTV date LTV

(in millions) (in millions)

Texas $ 459 77% North $ 44 78% Carolina

Georgia 193 76% Texas 39 79%

Arizona 79 75% Texas 36 80%

North 79 77% Missouri 30 72%Carolina

Ohio 58 69% Texas 30 75%

Alabama 57 76% Nevada 29 80%

Virginia 57 73% Texas 27 77%

Otherstateseach 482 73% Arizona 27 79%<$55million

Total $ 1,464 75% Mississippi 27 79%

North 25 77% Carolina

Texas 25 77%

Texas 24 77%

Alabama 23 77%

Texas 21 79%

Georgia 20 79%

15 Largest $ 427 78% loans

Institutional banking loans outstanding at September 30, 2021

Type

Principal

% of total

(in millions)

Securities backed lines of credit (SBLOC)

$

1,148

60%

Insurance backed lines of credit (IBLOC)

687

36%

Advisor financing

81

4%

Total

$

1,916

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 years, 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 September30, 2021



Type Principal % of total

(in millions)

Securities backed lines of credit (SBLOC) $ 1,148 60%

Insurance backed lines of credit (IBLOC) 687 36%

Advisor financing 81 4%

Total $ 1,916 100%

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 years, 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 September 30, 2021



Principal amount % Principal to collateral

(in millions)

$ 19 65%

17 37%

14 27%

12 29%

9 33%

9 36%

9 53%

8 71%

8 23%

8 46%

Total and weighted average $ 113 43%

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, 2021, all were rated Superior (A+ or better) by AM BEST.

Direct lease financing* by type as of September 30,2021



Principal % balance Total

(in millions)

Construction $ 95 18%

Government agencies and public institutions** 77 15%

Waste management and remediation services 64 12%

Real estate and rental and leasing 56 11%

Retail trade 47 9%

Wholesale purchase 34 7%

Transportation and warehousing 29 6%

Health care and social assistance 26 5%

Professional, scientific, and technical services 19 4%

Manufacturing 16 3%

Wholesale trade 14 3%

Educational services 8 2%

Other 29 5%

Total $ 514 100%

* Of the total $514 million of direct lease financing, $464 million consisted of vehicle leases with the remaining balance consisting of equipment leases. ** Includes public universities and school districts.

Direct lease financing by state as of September 30,2021



State Principal % balance Total

(in millions)

Florida $ 93 18%

California 48 9%

New Jersey 39 8%

Utah 35 7%

New York 33 6%

Pennsylvania 32 6%

Maryland 25 5%

North Carolina 25 5%

Texas 19 4%

Connecticut 16 3%

Washington 15 3%

Georgia 12 2%

Idaho 11 2%

Tennessee 10 2%

Alabama 9 2%

Other states 92 18%

Total $ 514 100%

Capital ratios

Tier 1 capital

Tier 1 capital

Total capital

Common equity

to average

to risk-weighted

to risk-weighted

tier 1 to risk

assets ratio

assets ratio

assets ratio

weighted assets

As of September 30, 2021

The Bancorp, Inc.

9.82%

15.69%

16.10%

15.69%

The Bancorp Bank

10.24%

16.29%

16.69%

16.29%

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

5.00%

8.00%

10.00%

6.50%

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%





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

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

assets assets ratio assets ratio weighted ratio assets

As of September 30, 2021

The Bancorp, Inc. 9.82% 15.69% 16.10% 15.69%

The Bancorp Bank 10.24% 16.29% 16.69% 16.29%

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



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)

Three months ended

Nine months ended

September 30,

September 30,

2021

2020

2021

2020

Selected operating ratios

Return on average assets (1)

1.76%

1.48%

1.66%

1.25%

Return on average equity (1)

17.84%

16.90%

18.35%

14.29%

Net interest margin

3.35%

3.37%

3.29%

3.41%

(1) Annualized



Three months ended Nine months ended

September 30, September 30,

2021 2020 2021 2020

Selected operating ratios

Return on average assets ^(1) 1.76% 1.48% 1.66% 1.25%

Return on average equity ^(1) 17.84% 16.90% 18.35% 14.29%

Net interest margin 3.35% 3.37% 3.29% 3.41%

(1) Annualized





Book value per share September June 30, December Septembertable 30, 31, 30,

2021 2021 2020 2020

Book value per share $ 11.13 $ 10.77 $ 10.10 $ 9.71

Loan quality table

September 30,

June 30,

December 31,

September 30,

2021

2021

2020

2020

(dollars in thousands)

Nonperforming loans to total loans

0.24%

0.31%

0.48%

0.49%

Nonperforming assets to total assets

0.16%

0.14%

0.20%

0.20%

Allowance for credit losses to total loans

0.52%

0.52%

0.61%

0.63%

Nonaccrual loans

$

6,106

$

7,346

$

12,227

$

12,275

Loans 90 days past due still accruing interest

1,569

1,550

497

24

Other real estate owned

2,145

-

-

-

Total nonperforming assets

$

9,820

$

8,896

$

12,724

$

12,299





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

2021 2021 2020 2020

(dollars in thousands)

Nonperforming loans to total loans 0.24% 0.31% 0.48% 0.49%

Nonperforming assets to total 0.16% 0.14% 0.20% 0.20%assets

Allowance for credit losses to 0.52% 0.52% 0.61% 0.63%total loans



Nonaccrual loans $ 6,106 $ 7,346 $ 12,227 $ 12,275

Loans 90 days past due still 1,569 1,550 497 24accruing interest

Other real estate owned 2,145 - - -

Total nonperforming assets $ 9,820 $ 8,896 $ 12,724 $ 12,299

Gross dollar volume (GDV)(1)

Three months ended

September 30,

June 30,

December 31,

September 30,

2021

2021

2020

2020

(in thousands)

Prepaid and debit card GDV

$

24,392,188

$

27,106,763

$

22,523,855

$

23,963,508

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





Gross dollar volume Three months ended(GDV) ^(1)

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

2021 2021 2020 2020

(in thousands)



Prepaid and debit card $ 24,392,188 $ 27,106,763 $ 22,523,855 $ 23,963,508GDV

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

Business linequarterly summary

Quarter endedSeptember 30,2021

(dollars inmillions)

Balances

% Growth

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

Loans

Institutional 2.6% $ 1,916 32% 25%banking ***

Small business 5.0% 781 12% 12%lending****

Leasing 5.9% 514 19% 6%

Commercial realestate (non-SBA 4.7% 1,335 nm nmat fair value)

Real estate 4.2% 129 nm nm bridge lending

Weighted 4.0% $ 4,675 Non-interestaverage yield income

% Growth

Deposits: Fintech Current Yearsolutions group quarter over year

Prepaid and debitcard issuance, 0.1% $ 5,146 6% nm $ 20.1 (5%)and otherpayments

* Average rates are for the quarter ended September 30, 2021. ** Loan and deposit categories are respectively based on period-end and average quarterly balances. *** Institutional Banking loans are comprised of security 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 investment advisor financing. **** Small Business Lending is substantially comprised of SBA loans. Loan growth percentages exclude short-term PPP loans.

Dissolution of Walnut Street

Previous press releases included tables related to the Walnut Street investment, shown as investment in unconsolidated entity on the balance sheet. Walnut Street was comprised of Bancorp loans sold to that entity, which was partially financed by an independent investor. In the third quarter of 2021, The Bancorp and that investor dissolved the entity, as the remaining balance did not warrant ongoing administrative and accounting expenses. As a result of the dissolution, the investment in unconsolidated entity, which had a June 30, 2021 balance of $25.0 million, was reclassified as follows. Approximately $22.9 million of loans were reclassified to commercial loans, at fair value and $2.1 million was reclassified to other real estate owned, as those assets continue to be reported at fair value.

Quarterly activity for commercial loan discontinued principal



Commercial

loan principal

(in millions)



Commercial loan discontinued principal June 30, 2021 before marks $ 53

Quarterly paydowns and other reductions (5)

Commercial loan discontinued principal September 30, 2021 before 48marks

Marks September 30, 2021 (3)

Net commercial loan exposure September 30, 2021 45

Residential mortgages 25

Net loans 70

Florida mall in other real estate owned 15

3 properties in other real estate owned 3

Total discontinued assets at September 30, 2021 $ 88

Discontinued commercial loan composition as of September 30, 2021

Collateral type

Unpaid principal balance

Mark at September 30, 2021

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

9

(0.1)

1%

Commercial non-real estate and industrial

2

(0.1)

5%

1 to 4 family construction

5

(2.3)

46%

First mortgage residential non-owner occupied

4

-

-

Commercial real estate owner occupied:

Retail

2

-

-

Residential junior mortgage

1

-

-

Other

1

-

-

Total

$

48

$

(3.2)

7%

Less: mark

(3)

Net commercial loan exposure September 30, 2021

$

45

$

(3.2)

Loan payment deferrals related to Covid-19Total non-U.S. guaranteed loan balances for borrowers with Covid-19 payment deferrals amounted to $1.3 million as of September 30, 2021.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211028006051/en/

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