Business Wire | Jan 27, 2022 04:05PM EST

The Bancorp, Inc. Reports Fourth Quarter 2021 Financial Results

Jan. 27, 2022

WILMINGTON, Del.--(BUSINESS WIRE)--Jan. 27, 2022--The Bancorp, Inc. ("The Bancorp") (NASDAQ: TBBK), a financial holding company, today reported financial results for the fourth quarter of 2021.

Highlights

* For the quarter ended December 31, 2021, The Bancorp earned net income of $27.0 million, or $0.46 diluted earnings per share.

* Return on assets and equity for the quarter ended December 31, 2021 amounted to 1.7% and 17%, respectively, compared to 1.6% and 17%, respectively, for the quarter ended December 31, 2020 (all percentages "annualized.")

* Net interest margin amounted to 3.51% for the quarter ended December 31, 2021, compared to 3.58% for the quarter ended December 31, 2020.

* Net interest income was $52.2 million for the quarter ended December 31, 2021 compared to $51.7 million for the quarter ended December 31, 2020. In the fourth quarter of 2021, growth in net interest income was significantly offset by a reduction of $3.8 million resulting from non-SBA commercial loan prepayments. However, net realized and unrealized gains on commercial loans increased over $4 million over those respective periods, primarily as a result of fees related to those prepayments. We have resumed the origination of such loans, identified as real estate bridge loans, which are intended to offset the impact of prepayments and payoffs, and grow the portfolio.

* Excluding loans at fair value, which were originally generated for sale, total loans increased 41% to $3.75 billion at December 31, 2021, compared to $2.65 billion at December 31, 2020.

* Gross dollar volume ("GDV"), representing the total amounts spent on prepaid and debit cards, increased $2.44 billion, or 11%, to $24.96 billion for the quarter ended December 31, 2021 compared to the quarter ended December 31, 2020.

* SBLOC (securities backed lines of credit), IBLOC (insurance backed lines of credit) and investment advisor financing loans collectively increased 28% year over year and 7% quarter over quarter to $2.05 billion at December 31, 2021.

* Small Business Loans, including those held at fair value, grew 6% year over year to $696.2 million at December 31, 2021. That growth is exclusive of Paycheck Protection Program ("PPP") loan balances of $44.8 million and $165.7 million, respectively, at December 31, 2021 and December 31, 2020.

* Direct lease financing balances increased 15% year over year to $531.0 million at December 31, 2021.

* We resumed non-SBA commercial real estate lending in the third quarter of 2021 classified as real estate bridge lending. As of December 31, 2021 total real estate bridge loans amounted to $621.7 million, collateralized by apartment buildings.

* The average interest rate on $5.47 billion of average deposits and interest-bearing liabilities during the fourth quarter of 2021 was 0.19%. Average deposits of $5.31 billion for the fourth quarter 2021, reflected an increase of 1% from the $5.25 billion of average deposits for the quarter ended December 31, 2020.

* As of December 31, 2021, substantially all the borrowers with COVID-19 related payment deferrals had resumed making payments.

* As of December 31, 2021, 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 10.40%, 14.72%, 15.13% and 14.72%, respectively, compared to well-capitalized minimums of 5%, 8%, 10% and 6.5%, respectively. The Bancorp and The Bank each remain well capitalized under banking regulations.

* Book value per common share at December 31, 2021 was $11.37 per share compared to $10.10 per share at December 31, 2020, an increase of 13%, primarily as a result of retained earnings.

* The Bancorp repurchased 350,431 shares of its common stock at an average cost of $28.54 per share during the quarter ended December 31, 2021.

"Our lending platform and fin-tech ecosystem will support continued growth into 2022," said The Bancorp CEO and President Damian Kozlowski. "We continue to improve our performance, while delivering enhanced capabilities to our many innovative partners which are revolutionizing the financial services industry. Additionally, we reaffirm our 2022 guidance of $2.15 per share, which excludes the net impact of planned stock repurchases."

The Bancorp reported net income of $27.0 million, or $0.46 per diluted share, for the quarter ended December 31, 2021, compared to net income of $24.2 million, or $0.41 per diluted share, for the quarter ended December 31, 2020.

Conference Call Webcast

You may access the LIVE webcast of The Bancorp's Quarterly Earnings Conference Call at 8:00 AM ET Friday, January 28, 2022 by clicking on the webcast link on The Bancorp's homepage at www.thebancorp.com. Or, you may dial 844.775.2543, access code 7390458. 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 4, 2022 by dialing 855.859.2056, access code 7390458.

About The Bancorp

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. in June 2021, 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. As evidence of its company-wide commitment to excellence, The Bancorp has also been ranked in October 2020 as one of the 100 Fastest-Growing Companies by Fortune, a Top 50 Employer in March 2021 by Equal Opportunity Magazine and was selected to be included in the S&P Small Cap 600 in May 2021. 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 "intend," "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 Year ended

December 31, December 31,

Condensed income 2021 2020 2021 2020statement

(in thousands, except per share data)



Net interest income $ 52,157 $ 51,713 $ 210,876 $ 194,866

Provision for credit 1,626 554 3,110 6,352losses

Non-interest income

ACH, card and otherpayment processing 1,921 1,788 7,526 7,101fees

Prepaid, debit card 17,776 17,818 74,654 74,465and related fees

Net realized andunrealized gains (losses) oncommercial

loans, at fair value 6,004 1,538 14,885 (3,874)

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

Leasing related 1,757 499 6,457 3,294income

Other non-interest 768 1,657 1,227 3,676income

Total non-interest 28,226 23,300 104,749 84,617income

Non-interest expense

Salaries and employee 28,159 27,087 105,998 101,737benefits

Data processing 1,183 1,174 4,664 4,712expense

Legal expense 1,499 1,005 6,848 5,141

FDIC insurance 351 2,121 5,586 9,808

Software 4,224 3,570 15,659 14,028

Other non-interest 7,784 6,826 29,595 29,421expense

Total non-interest 43,200 41,783 168,350 164,847expense

Income fromcontinuing operations 35,557 32,676 144,165 108,284before income taxes

Income tax expense 8,529 8,655 33,724 27,688

Net income from 27,028 24,021 110,441 80,596continuing operations

Discontinued operations

(Loss) income fromdiscontinued (36) (1,096) 288 (3,816)operations beforeincome taxes

Income tax (benefit) - (1,246) 76 (3,304)expense

Net (loss) incomefrom discontinued (36) 150 212 (512)operations, net oftax

Net income $ 26,992 $ 24,171 $ 110,653 $ 80,084



Net income per sharefrom continuing $ 0.47 $ 0.42 $ 1.93 $ 1.40operations - basic

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

Net income per share $ 0.47 $ 0.42 $ 1.93 $ 1.39- basic



Net income per sharefrom continuing $ 0.46 $ 0.41 $ 1.88 $ 1.38operations - diluted

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

Net income per share $ 0.46 $ 0.41 $ 1.88 $ 1.37- diluted

Weighted average 56,966,661 57,597,124 57,190,311 57,474,612shares - basic

Weighted average 58,369,204 59,146,222 58,830,437 58,411,222shares - diluted

Note: Compared to higher rates in recent periods, the respective effective tax rates for the three and twelve months ended December 31, 2021 approximated 24% and 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 December September June 30, December 31, 30, 31,

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

(in thousands, except share data)

Assets:

Cash and cash equivalents

Cash and due from banks $ 5,382 $ 6,687 $ 5,470 $ 5,984

Interest earning deposits 596,402 310,642 583,498 339,531at Federal Reserve Bank

Total cash and cash 601,784 317,329 588,968 345,515equivalents



Investment securities,available-for-sale, at 953,709 1,054,223 1,106,075 1,206,164fair value

Commercial loans, at fair 1,326,836 1,550,025 1,690,216 1,810,812value

Loans, net of deferred 3,747,224 3,136,662 2,915,344 2,652,323fees and costs

Allowance for credit (17,806) (16,159) (15,292) (16,082)losses

Loans, net 3,729,418 3,120,503 2,900,052 2,636,241

Federal Home Loan Bankand Atlantic Central 1,663 1,663 1,667 1,368Bankers Bank stock

Premises and equipment, 16,156 16,602 17,392 17,608net

Accrued interest 17,871 17,180 18,668 20,458receivable

Intangible assets, net 2,447 2,547 2,646 2,845

Other real estate owned 1,530 2,145 - -

Deferred tax asset, net 12,667 12,237 10,923 9,757

Investment inunconsolidated entity, at - - 24,988 31,294fair value

Assets held-for-sale from 82,191 87,904 97,496 113,650discontinued operations

Other assets 96,967 86,105 91,516 81,129

Total assets $ 6,843,239 $ 6,268,463 $ 6,550,607 $ 6,276,841



Liabilities:

Deposits

Demand and interest $ 5,561,365 $ 4,734,352 $ 5,225,024 $ 5,205,010checking

Savings and money market 415,546 378,160 459,688 257,050

Total deposits 5,976,911 5,112,512 5,684,712 5,462,060



Securities sold under 42 42 42 42agreements to repurchase

Short-term borrowings - 300,000 - -

Senior debt 98,682 98,590 98,498 98,314

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

Other long-term 39,521 39,715 39,901 40,277borrowings

Other liabilities 62,228 66,226 94,944 81,583

Total liabilities $ 6,190,785 $ 5,630,486 $ 5,931,498 $ 5,695,677



Shareholders' equity:

Common stock -authorized, 75,000,000shares of $1.00 parvalue; 57,370,563 and 57,371 57,331 57,458 57,55157,550,629 shares issuedand outstanding atDecember 30, 2021 and2020, respectively

Additional paid-in 349,686 357,528 363,241 377,452capital

Retained earnings 239,106 212,114 183,853 128,453

Accumulated other 6,291 11,004 14,557 17,708comprehensive income

Total shareholders' 652,454 637,977 619,109 581,164equity



Total liabilities and $ 6,843,239 $ 6,268,463 $ 6,550,607 $ 6,276,841shareholders' 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 December Three months ended Decemberand net interest 31, 2021 31, 2020income

(dollars in thousands)

Average Average Average Average

Assets: Balance Interest Rate Balance Interest Rate

Interest earning assets:

Loans, net of deferred $ 4,766,271 $ 48,792 4.09% $ 4,329,794 $ 45,524 4.21%fees and costs**

Leases-bank qualified* 4,465 76 6.81% 7,346 138 7.51%

Investment 954,172 5,770 2.42% 1,239,062 9,229 2.98%securities-taxable

Investment 3,558 31 3.49% 4,041 35 3.46%securities-nontaxable*

Interest earningdeposits at Federal 208,120 65 0.12% 193,560 48 0.10%Reserve Bank

Net interest earning 5,936,586 54,734 3.69% 5,773,803 54,974 3.81%assets



Allowance for credit (17,108) (15,804) losses

Assets held-for-salefrom discontinued 83,821 708 3.38% 117,482 965 3.29%operations

Other assets 189,760 220,595

$ 6,193,059 $ 6,096,076



Liabilities and Shareholders' Equity:

Deposits:

Demand and interest $ 4,931,891 $ 1,015 0.08% $ 4,978,562 $ 1,679 0.13%checking

Savings and money 373,381 114 0.12% 270,820 134 0.20%market

Total deposits 5,305,272 1,129 0.09% 5,249,382 1,813 0.14%



Short-term borrowings 53,315 34 0.26% 32,989 17 0.21%

Repurchase agreements 41 - - 41 - -

Subordinated 13,401 112 3.34% 13,401 116 3.46%debentures

Senior debt 100,419 1,280 5.10% 100,031 1,279 5.12%

Total deposits and 5,472,448 2,555 0.19% 5,395,844 3,225 0.24%liabilities



Other liabilities 75,395 130,420

Total liabilities 5,547,843 5,526,264



Shareholders' equity 645,216 569,812

$ 6,193,059 $ 6,096,076

Net interest income on $ 52,887 $ 52,714 tax equivalent basis*



Tax equivalent 22 36 adjustment



Net interest income $ 52,865 $ 52,678

Net interest margin * 3.51% 3.58%

* 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 $991,000 of interest and fees on PPP loans. In 2020 the table above includes comparable PPP interest and fees of $2.1 million.



Average balance sheetand net interest Year ended December 31, 2021 Year ended December 31, 2020income

(dollars in thousands)

Average Average Average Average

Assets: Balance Interest Rate Balance Interest Rate



Interest earning assets:

Loans, net of deferred $ 4,597,977 $ 192,338 4.18% $ 3,931,758 $ 170,449 4.34%fees and costs**

Leases-bank qualified* 5,557 377 6.78% 8,885 647 7.28%

Investment 1,059,229 28,661 2.71% 1,317,031 37,822 2.87%securities-taxable

Investment 3,757 130 3.46% 4,412 145 3.29%securities-nontaxable*

Interest earningdeposits at Federal 637,056 715 0.11% 381,290 1,885 0.49%Reserve Bank

Net interest earning 6,303,576 222,221 3.53% 5,643,376 210,948 3.74%assets



Allowance for credit (16,469) (13,878) losses

Assets held for salefrom discontinued 95,527 3,096 3.24% 127,519 4,222 3.31%operations

Other assets 217,476 226,210

$ 6,600,110 $ 5,983,227



Liabilities and Shareholders' Equity:

Deposits:

Demand and interest $ 5,321,283 $ 5,022 0.09% $ 4,864,236 $ 11,356 0.23%checking

Savings and money 427,708 601 0.14% 291,204 442 0.15%market

Time deposits - - - 79,439 1,483 1.87%

Total deposits 5,748,991 5,623 0.10% 5,234,879 13,281 0.25%



Short-term borrowings 19,958 49 0.25% 27,322 198 0.72%

Repurchase agreements 41 - - 49 - -

Subordinated 13,401 449 3.35% 13,401 524 3.91%debentures

Senior debt 100,283 5,118 5.10% 38,532 1,913 4.96%

Total deposits and 5,882,674 11,239 0.19% 5,314,183 15,916 0.30%liabilities



Other liabilities 100,627 137,983

Total liabilities 5,983,301 5,452,166



Shareholders' equity 616,809 531,061

$ 6,600,110 $ 5,983,227

Net interest income on $ 214,078 $ 199,254 tax equivalent basis*



Tax equivalent 106 166 adjustment



Net interest income $ 213,972 $ 199,088

Net interest margin * 3.35% 3.45%

* 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 each of 2021 and 2020 also includes $5.8 million of interest and fees on PPP loans. 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 Year ended

December December 31, 31,

2021 2020

(dollars in thousands)



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



Loans charged-off:

SBA non-real estate 1,138 1,350

SBA commercial mortgage 417 -

Direct lease financing 412 2,243

SBLOC 15 -

Consumer - home equity 10 -

Consumer - other 14 -

Total 2,006 3,593



Recoveries:

SBA non-real estate 51 103

SBA commercial mortgage 9 -

Direct lease financing 58 570

Consumer - home equity 1,099 -

Total 1,217 673

Net charge-offs 789 2,920

Provision credited to allowance, excluding commitment 2,513 6,127provision



Balance in allowance for credit losses at end of period $ 17,806 $ 16,082

Net charge-offs/average loans 0.03% 0.07%

Net charge-offs/average assets 0.01% 0.05%

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





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

2021 2021 2021 2020

(in thousands)



SBL non-real estate $ 147,722 $ 171,845 $ 228,958 $ 255,318

SBL commercial mortgage 361,171 367,272 343,487 300,817

SBL construction 27,199 23,117 18,494 20,273

Small business loans * 536,092 562,234 590,939 576,408

Direct lease financing 531,012 514,068 506,424 462,182

SBLOC / IBLOC** 1,929,581 1,834,523 1,729,628 1,550,086

Advisor financing *** 115,770 81,143 72,190 48,282

Real estate bridge 621,702 128,699 - -lending

Other loans **** 5,014 4,917 5,840 6,426

3,739,171 3,125,584 2,905,021 2,643,384

Unamortized loan fees and 8,053 11,078 10,323 8,939costs

Total loans, net ofunamortized fees and $ 3,747,224 $ 3,136,662 $ 2,915,344 $ 2,652,323costs

Small business portfolio

December 31,

September 30,

June 30,

December 31,

2021

2021

2021

2020

(in thousands)

SBL, including unamortized fees and costs

$

541,437

$

566,472

$

593,401

$

577,944

SBL, included in commercial loans, at fair value

199,585

214,301

225,534

243,562

Total small business loans

$

741,022

$

780,773

$

818,935

$

821,506

* 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 certain SBA loans at the dates indicated (in thousands). A reduction in SBL non-real estate from $171.8 million to $147.7 million in the fourth quarter of 2021 resulted from U.S. government repayments of $26.5 million of PPP loans authorized by The Consolidated Appropriations Act, 2021. PPP loans totaled $44.8 million at December 31, 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 eligible life 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 $322,000 and $663,000 at December 31, 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 December 31, 2021



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

2021 2021 2021 2020

(in thousands)



SBL, including unamortized fees $ 541,437 $ 566,472 $ 593,401 $ 577,944and costs

SBL, included in commercial 199,585 214,301 225,534 243,562loans, at fair value

Total small business loans $ 741,022 $ 780,773 $ 818,935 $ 821,506

* 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 certain SBA loans at the dates indicated (in thousands). A reduction in SBL non-real estate from $171.8 million to $147.7 million in the fourth quarter of 2021 resulted from U.S. government repayments of $26.5 million of PPP loans authorized by The Consolidated Appropriations Act, 2021. PPP loans totaled $44.8 million at December 31, 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 eligible life 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 $322,000 and $663,000 at December 31, 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 December 31, 2021



Loan principal

(in millions)

U.S. government guaranteed portion of SBA loans (a) $ 371

Paycheck Protection Program loans (PPP) (a) 45

Commercial mortgage SBA (b) 183

Construction SBA (c) 17

Non-guaranteed portion of U.S. government guaranteed loans (d) 100

Non-SBA small business loans (e) 17

Total principal $ 733

Unamortized fees and costs 8

Total small business loans $ 741

(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 $17 million in Construction SBA loans, $13 million are 504 first mortgages with an origination date LTV of 50-60% and $4 million are SBA interim loans with an approved SBA post-construction full takeout/payoff. (d) The $100 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 $17 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 December 31, 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 $ 65 $ 4 $ - $ 69 22%

Full-service 13 2 3 18 6%restaurants

Child day care services 14 - 1 15 5%

Outpatient mentalhealth and substance 14 - - 14 5%abuse centers

Baked goods stores 4 - 9 13 4%

Lessors ofnonresidential 11 - - 11 4%buildings

Car washes 10 - - 10 3%

Offices of lawyers 9 - - 9 3%

Funeral homes and 8 - - 8 3%funeral services

All other amusement and 7 - 1 8 2%recreation industries

General warehousing and 7 - - 7 2%storage

Fitness andrecreational sports - 5 2 7 2%centers

Assisted livingfacilities for the 6 - - 6 2%elderly

Limited-service 1 2 3 6 1%restaurants

Gasoline stations with 4 - - 4 1%convenience stores

Other technical and - 4 - 4 1%trade schools

Offices of dentists 3 - - 3 1%

Other warehousing and 3 - - 3 1%storage

All other miscellaneouswood product 3 - - 3 1%manufacturing

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

Other performing arts 3 - - 3 1%companies

Offices of physicians 3 - - 3 1%

Lessors of other real 2 - - 2 1%estate property

All other miscellaneousgeneral purpose 2 - - 2 1%machinery manufacturing

Landscaping services 1 - 1 2 1%

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

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

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

Amusement arcades 2 - - 2 1%

Caterers 2 - - 2 1%

Offices of real estate 2 - - 2 1%agents and brokers

Other** 45 - 26 71 19%

Total $ 253 $ 17 $ 46 $ 316 100%

* Of the SBL commercial mortgage and SBL construction loans, $65 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 December 31, 2021

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



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

(in millions)

Florida $ 59 $ - $ 6 $ 65 21%

California 42 2 4 48 15%

North 23 5 3 31 10%Carolina

Pennsylvania 27 - 3 30 9%

New York 14 5 3 22 7%

Illinois 16 - 2 18 6%

Texas 12 - 4 16 5%

New Jersey 6 - 7 13 4%

Virginia 9 - - 9 3%

Tennessee 10 - - 10 3%

Colorado 3 5 1 9 3%

Michigan 4 - 1 5 2%

Georgia 3 - 1 4 1%

Ohio 3 - 1 4 1%

Washington 3 - - 3 1%

Other States 19 - 10 29 9%

Total $ 253 $ 17 $ 46 $ 316 100%

* Of the SBL commercial mortgage and SBL construction loans, $65 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 December 31, 2021



Type* State SBL commercial mortgage*

(in millions)

Mental health and substance abuse center FL $ 10

Hotel FL 9

Lawyers office CA 9

General warehousing and storage PA 7

Hotel NC 6

Assisted living facility FL 5

Hotel NY 5

Hotel NC 5

Mental health and substance abuse center PA 4

Hotel PA 4

Total $ 64

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

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

Type as of December 31, 2021



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

(dollars in millions)

Real estate bridgelending (multi-family 57 $ 622 74% 3.99%apartments)*



Commercial real estate loans, at fair value:

Multi-family 86 $ 988 76% 4.75%(apartments)*

Hospitality (hotels 9 69 65% 5.68%and lodging)

Retail 6 61 71% 4.33%

Other 7 13 73% 5.12%

108 1,131 75% 4.79%

Fair value adjustment (4)

Total commercial realestate loans, at fair 1,127 value

Total commercial real $ 1,749 75% 4.52%estate loans

*In the third quarter of 2021, we resumed 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 December 15 largest loans (all multi-family) as31, 2021 of December 31, 2021



State Balance Origination State Balance Origination date LTV date LTV

(in millions) (in millions)

Texas $ 607 76% Texas $ 39 79%

Georgia 168 75% Texas 37 75%

Ohio 111 72% Texas 37 80%

Alabama 90 74% Tennessee 30 62%

Florida 76 74% Missouri 30 72%

Arizona 65 74% Texas 30 75%

Tennessee 64 66% Mississippi 29 79%

OtherStates 568 73% Texas 29 77%each <$55million

Total $ 1,749 74% North 28 77% Carolina

Texas 27 77%

New Jersey 27 77%

Oklahoma 27 78%

Ohio 26 74%

Texas 26 77%

Ohio 22 75%

15 Largest $ 444 76% loans



Institutional banking loans outstanding at December 31, 2021



Type Principal % of total

(in millions)

Securities backed lines of credit (SBLOC) $ 1,141 56%

Insurance backed lines of credit (IBLOC) 788 39%

Advisor financing 116 5%

Total $ 2,045 100%

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 December 31, 2021



Principal amount % Principal to collateral

(in millions)

$ 18 37%

14 25%

9 31%

9 56%

9 35%

8 70%

8 65%

7 13%

7 44%

6 32%

Total and weighted average $ 95 40%

Insurance backed lines of credit (IBLOC)

IBLOC loans are backed by the cash value of eligible 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, eight insurance companies have been approved and, as of August 14, 2021, all were rated Excellent (A or better) by AM BEST.

Direct lease financing* by type as of December 31, 2021



Principal balance % Total

(in millions)

Construction $ 100 19%

Government agencies and public institutions** 78 15%

Waste management and remediation services 62 12%

Real estate and rental and leasing 54 10%

Retail trade 46 9%

Wholesale purchase 39 7%

Health care and social assistance 30 6%

Transportation and warehousing 28 5%

Professional, scientific, and technical services 19 4%

Wholesale trade 16 3%

Manufacturing 16 3%

Educational services 8 2%

Other 35 5%

Total $ 531 100%

* Of the total $531 million of direct lease financing, $475 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 December 31, 2021



State Principal balance % Total

(in millions)

Florida $ 92 17%

California 49 9%

Utah 42 8%

New Jersey 40 8%

Pennsylvania 34 6%

New York 32 6%

North Carolina 24 5%

Maryland 24 5%

Texas 20 4%

Connecticut 16 3%

Washington 15 3%

Georgia 12 2%

Idaho 11 2%

Alabama 10 2%

Tennessee 9 2%

Other States 101 18%

Total $ 531 100%

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, 2021

The Bancorp, Inc.

10.40%

14.72%

15.13%

14.72%

The Bancorp Bank

10.98%

15.48%

15.88%

15.48%

"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 December 31, 2021

The Bancorp, Inc. 10.40% 14.72% 15.13% 14.72%

The Bancorp Bank 10.98% 15.48% 15.88% 15.48%

"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

Year ended

December 31,

December 31,

2021

2020

2021

2020

Selected operating ratios

Return on average assets (1)

1.73%

1.57%

1.68%

1.34%

Return on average equity (1)

16.60%

16.83%

17.94%

15.08%

Net interest margin

3.51%

3.58%

3.35%

3.45%

(1) Annualized



Three months ended Year ended

December 31, December 31,

2021 2020 2021 2020

Selected operating ratios

Return on average assets ^(1) 1.73% 1.57% 1.68% 1.34%

Return on average equity ^(1) 16.60% 16.83% 17.94% 15.08%

Net interest margin 3.51% 3.58% 3.35% 3.45%

(1) Annualized



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

2021 2021 2021 2020

Book value per share $ 11.37 $ 11.13 $ 10.77 $ 10.10

Loan quality table

December 31,

September 30,

June 30,

December 31,

2021

2021

2021

2020

(dollars in thousands)

Nonperforming loans to total loans

0.10%

0.24%

0.31%

0.48%

Nonperforming assets to total assets

0.08%

0.16%

0.14%

0.20%

Allowance for credit losses to total loans

0.48%

0.52%

0.52%

0.61%

Nonaccrual loans

$

3,161

$

6,106

$

7,346

$

12,227

Loans 90 days past due still accruing interest

461

1,569

1,550

497

Other real estate owned

1,530

2,145

-

-

Total nonperforming assets

$

5,152

$

9,820

$

8,896

$

12,724



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

2021 2021 2021 2020

(dollars in thousands)

Nonperforming loans to total 0.10% 0.24% 0.31% 0.48%loans

Nonperforming assets to total 0.08% 0.16% 0.14% 0.20%assets

Allowance for credit losses to 0.48% 0.52% 0.52% 0.61%total loans



Nonaccrual loans $ 3,161 $ 6,106 $ 7,346 $ 12,227

Loans 90 days past due still 461 1,569 1,550 497accruing interest

Other real estate owned 1,530 2,145 - -

Total nonperforming assets $ 5,152 $ 9,820 $ 8,896 $ 12,724

Gross dollar volume (GDV)(1)

Three months ended

December 31,

September 30,

June 30,

December 31,

2021

2021

2021

2020

(in thousands)

Prepaid and debit card GDV

$

24,964,135

$

24,392,188

$

27,106,763

$

22,523,855

(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)

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

2021 2021 2021 2020

(in thousands)



Prepaid and debit card $ 24,964,135 $ 24,392,188 $ 27,106,763 $ 22,523,855GDV

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

Business linequarterlysummary

Quarter endedDecember 31,2021

(dollars inmillions)

Balances

% Growth

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

Loans

Institutional 2.6% $ 2,045 28% 27%banking ***

Small business 5.0% 741 6% (8%)lending****

Leasing 5.9% 531 15% 13%

Commercial realestate (non-SBA 4.7% 1,127 nm nmat fair value)

Real estate 4.0% 622 nm nm bridge lending

Weighted 3.9% $ 5,066 Non-interestaverage yield income

% Growth

Deposits: Current YearFintech quarter oversolutions group year

Prepaid and debitcard issuance, 0.1% $ 4,948 7% nm $ 19.7 1%and otherpayments

* Average rates are for the quarter ended December 31, 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 eligible life 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 September 30, 2021 before $ 48marks

Quarterly paydowns and other reductions (4)

Commercial loan discontinued principal December 31, 2021 before 44marks

Marks December 31, 2021 (3)

Net commercial loan exposure December 31, 2021 41

Residential mortgages 23

Net loans 64

Florida mall in other real estate owned 15

2 properties in other real estate owned 3

Total discontinued assets at December 31, 2021 $ 82

Discontinued commercial loan composition as of December 31, 2021



Mark atCollateral type Unpaid principal Mark as % of balance December portfolio 31, 2021

(in millions)

Commercial real estate - non-owner occupied:

Retail $ 4 $ (0.6) 15%

Office 2 - -

Other 17 (0.1) 1%

Construction and land 10 (0.1) 1%

Commercial non-real estate and 2 (0.1) 5%industrial

1 to 4 family construction 3 (2.3) 77%

First mortgage residential 3 - -non-owner occupied

Commercial real estate owner occupied:

Retail 1 - -

Residential junior mortgage 1 - -

Other 1 - -

Total $ 44 $ (3.2) 7%

Less: mark (3)

Net commercial loan exposure $ 41 $ (3.2) December 31, 2021

View source version on businesswire.com: https://www.businesswire.com/news/home/20220126005705/en/

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