The Bancorp, Inc. Reports First Quarter 2023 Financial Results

The Bancorp, Inc. ("The Bancorp" or “we”) (NASDAQ: TBBK), a financial holding company, today reported financial results for the first quarter of 2023.

Highlights

The Bancorp reported net income of $49.1 million, or $0.88 per diluted share, for the quarter ended March 31, 2023, compared to net income of $29.0 million, or $0.50 per diluted share, for the quarter ended March 31, 2022, or a 76% increase in income per diluted share.

Return on assets and equity for the quarter ended March 31, 2023 amounted to 2.6% and 28%, respectively, compared to 1.7% and 18%, respectively, for the quarter ended March 31, 2022 (all percentages “annualized”).

The increases in net income and return on assets and equity reflected increases in net interest income. Net interest income increased 62% to $85.8 million for the quarter ended March 31, 2023, compared to $52.9 million for the quarter ended March 31, 2022. Net interest income increases reflected the impact of continuing Federal Reserve rate increases on the Bancorp’s variable rate loans and securities.

Net interest margin amounted to 4.67% for the quarter ended March 31, 2023, compared to 3.12% for the quarter ended March 31, 2022, and 4.21% for the quarter ended December 31, 2022.

Loans, net were $5.35 billion at March 31, 2023, compared to $5.49 billion at December 31, 2022 and $4.16 billion at March 31, 2022. Those changes reflected a decrease of 2% quarter over quarter and an increase of 29% year over year.

Gross dollar volume (“GDV”), representing the total amounts spent on prepaid and debit cards, increased $5.45 billion, or 19%, to $34.01 billion for the quarter ended March 31, 2023 compared to the quarter ended March 31, 2022. The increase reflects continued organic growth with existing partners and the impact from new clients added throughout 2022. Total prepaid, debit card, ACH and other payment fees increased 24% to $25.5 million for first quarter 2023 compared to the first quarter of 2022.

Small business loans (“SBL”), including those held at fair value, grew 11% year over year to $785.8 million at March 31, 2023, and 3% quarter over quarter. That growth is exclusive of Paycheck Protection Program (“PPP”) loan balances which amounted to $4.0 million and $23.7 million, respectively, at March 31, 2023 and March 31, 2022.

Direct lease financing balances increased 21% year over year to $652.5 million at March 31, 2023, and 3% quarter over quarter.

At March 31, 2023, the $1.75 billion balance of real estate bridge loans, consisting entirely of apartment buildings, compared to $1.67 billion at December 31, 2022, reflecting quarter over quarter growth of 5%. At March 31, 2022, these loans totaled $803.5 million.

Security backed lines of credit (“SBLOC”), insurance backed lines of credit (“IBLOC”) and investment advisor financing loans collectively increased 1% year over year and decreased 10% quarter over quarter to $2.24 billion at March 31, 2023.

The average interest rate on $6.77 billion of average deposits and interest-bearing liabilities during the first quarter of 2023 was 2.15%. Average deposits of $6.62 billion for the first quarter of 2023, reflected an increase of 8% from the $6.11 billion of average deposits for the quarter ended March 31, 2022.

The Bancorp emphasizes safety and soundness, and liquidity. The vast majority of its funding is comprised of large numbers of insured and small balance accounts. The Bancorp also has lines of credit with U.S. government agencies totaling approximately $3.3 billion as of April 27, 2023 and access to significant other liquidity.

As of March 31, 2023, 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 9.88%, 14.34%, 14.84% and 14.34%, respectively, compared to well-capitalized minimums of 5%, 8%, 10% and 6.5%, respectively. The Bancorp and its wholly owned subsidiary, The Bancorp Bank, National Association, each remain well capitalized under banking regulations.

Book value per common share at March 31, 2023 was $13.11 per share compared to $11.41 per common share at March 31, 2022, an increase of 15%. Increases resulting from retained earnings were partially offset by reductions in the market value of securities available for sale, which are recognized through equity.

The Bancorp repurchased 778,442 shares of its common stock at an average cost of $32.12 per share during the quarter ended March 31, 2023.

CEO and President Damian Kozlowski stated “The recent dislocation in the banking industry did not materially impact our company. With granular deposits spread across more than 130 million insured small accounts through our Fin-tech ecosystem, a low risk variable rate and short duration credit book and significant liquidity and borrowing capacity, TBBK was well positioned to manage the increased volatility exhibited in the beginning of 2023. Our performance expectations for the first quarter were significantly surpassed. We are raising guidance from $3.20 a share to $3.60 a share, without including the impact of anticipated share buy backs of $25 million per quarter in 2023.”

Conference Call Webcast

You may access the LIVE webcast of The Bancorp's Quarterly Earnings Conference Call at 8:00 AM ET Friday, April 28, 2023 by clicking on the webcast link on The Bancorp's homepage at www.thebancorp.com. Or you may dial 1.888.886.7786, conference code 02423750. You may listen to the replay of the webcast following the live call on The Bancorp's investor relations website or telephonically until Friday, May 5, 2023 by dialing 1.877.674.7070, access code 423750#.

About The Bancorp

The Bancorp, Inc. (NASDAQ: TBBK), headquartered in Wilmington, Delaware, through its subsidiary, The Bancorp Bank, National Association, (or “The Bancorp Bank, N. A.”) 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 “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

Three months ended

Year ended

March 31,

December 31,

Consolidated condensed income statements

2023 (unaudited)

2022 (unaudited)

2022

(Dollars in thousands, except per share and share data)

Net interest income

85,816

52,853

248,841

Provision for credit losses

1,903

1,507

7,108

Non-interest income

ACH, card and other payment processing fees

2,171

1,984

8,935

Prepaid, debit card and related fees

23,323

18,652

77,236

Net realized and unrealized gains on commercial

loans, at fair value

1,725

3,383

13,531

Leasing related income

1,490

973

4,822

Other non-interest income

280

120

1,159

Total non-interest income

28,989

25,112

105,683

Non-interest expense

Salaries and employee benefits

29,785

23,848

105,368

Data processing expense

1,321

1,189

4,972

Legal expense

958

794

3,878

Legal settlement

—

1,152

Civil money penalty

—

1,750

FDIC insurance

955

974

3,270

Software

4,237

3,864

16,211

Other non-interest expense

10,774

7,683

32,901

Total non-interest expense

48,030

38,352

169,502

Income before income taxes

64,872

38,106

177,914

Income tax expense

15,750

9,140

47,701

Net income

49,122

28,966

130,213

Net income per share - basic

0.89

0.51

2.30

Net income per share - diluted

0.88

0.50

2.27

Weighted average shares - basic

55,452,815

57,115,903

56,556,303

Weighted average shares - diluted

56,048,142

58,095,980

57,268,946

Condensed consolidated balance sheets

March 31,

December 31,

September 30,

March 31,

2023 (unaudited)

2022

2022 (unaudited)

(Dollars in thousands, except per share and share data)

Assets:

Cash and cash equivalents

Cash and due from banks

13,736

24,063

22,537

11,399

Interest earning deposits at Federal Reserve Bank

773,446

864,126

700,175

662,827

Total cash and cash equivalents

787,182

888,189

722,712

674,226

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

787,429

766,016

790,594

907,338

Commercial loans, at fair value

493,334

589,143

818,040

1,180,885

Loans, net of deferred fees and costs

5,354,347

5,486,853

5,267,375

4,164,298

Allowance for credit losses

(23,794

)

(22,374

)

(19,689

)

(19,051

)

Loans, net

5,330,553

5,464,479

5,247,686

4,145,247

Federal Home Loan Bank, Atlantic Central Bankers Bank, and Federal Reserve Bank stock

12,629

1,663

Premises and equipment, net

21,319

18,401

18,443

16,314

Accrued interest receivable

33,729

32,005

25,506

17,284

Intangible assets, net

1,950

2,049

2,149

2,348

Other real estate owned

21,117

21,210

18,873

Deferred tax asset, net

18,290

19,703

27,241

18,521

Other assets

99,427

89,176

93,201

99,961

Total assets

7,606,959

7,903,000

7,777,074

7,082,660

Liabilities:

Deposits

Demand and interest checking

6,607,767

6,559,617

5,934,591

5,506,083

Savings and money market

96,890

140,496

575,381

722,240

Time deposits, $100,000 and over

—

330,000

401,331

—

Total deposits

6,704,657

7,030,113

6,911,303

6,228,323

Securities sold under agreements to repurchase

Senior debt

99,142

99,050

98,958

98,774

Subordinated debenture

13,401

Other long-term borrowings

9,972

10,028

38,928

39,318

Other liabilities

54,597

56,335

50,704

50,507

Total liabilities

6,881,811

7,208,969

7,113,336

6,430,365

Shareholders' equity:

Common stock - authorized, 75,000,000 shares of $1.00 par value; 55,329,629 and 57,155,028 shares issued and outstanding at March 31, 2023 and 2022, respectively

55,330

55,690

56,202

57,155

Additional paid-in capital

277,814

299,279

311,569

336,604

Retained earnings

418,441

369,319

329,078

268,072

Accumulated other comprehensive loss

(26,437

)

(30,257

)

(33,111

)

(9,536

)

Total shareholders' equity

725,148

694,031

663,738

652,295

Total liabilities and shareholders' equity

7,606,959

7,903,000

7,777,074

7,082,660

Average balance sheet and net interest income

Three months ended March 31, 2023

Three months ended March 31, 2022

(Dollars in thousands; unaudited)

Average

Assets:

Balance

Interest

Rate

Balance

Interest

Rate

Interest earning assets:

Loans, net of deferred fees and costs*

5,987,179

106,204

7.10

5,136,377

50,508

3.93

Leases-bank qualified**

3,361

8.21

4,015

105

10.46

Investment securities-taxable

774,055

9,300

4.81

939,511

4,891

2.08

Investment securities-nontaxable**

3,343

4.91

3,559

3.60

Interest earning deposits at Federal Reserve Bank

580,058

6,585

4.54

686,614

347

0.20

Net interest earning assets

7,347,996

122,199

6.65

6,770,076

55,883

3.30

Allowance for credit losses

(22,533

)

(17,810

)

Other assets

237,721

224,312

7,563,184

6,976,578

Liabilities and Shareholders' Equity:

Deposits:

Demand and interest checking

6,406,834

32,383

2.02

5,575,228

1,406

0.10

Savings and money market

132,279

1,219

3.69

532,047

200

0.15

Time deposits

84,333

858

4.07

—

Total deposits

6,623,446

34,460

2.08

6,107,275

1,606

0.11

Short-term borrowings

20,500

234

4.57

555

—

Repurchase agreements

—

Long-term borrowings

9,998

126

5.04

—

Subordinated debentures

13,401

261

7.79

13,401

116

3.46

Senior debt

99,092

1,279

5.16

98,724

1,279

5.18

Total deposits and liabilities

6,766,479

36,360

2.15

6,219,996

3,001

0.19

Other liabilities

87,116

104,207

Total liabilities

6,853,595

6,324,203

Shareholders' equity

709,589

652,375

7,563,184

6,976,578

Net interest income on tax equivalent basis**

85,839

52,882

Tax equivalent adjustment

Net interest income

85,816

52,853

Net interest margin **

4.67

3.12

* Includes commercial loans, at fair value. All periods include non-accrual loans.

** Full taxable equivalent basis, using a statutory Federal tax rate of 21% for 2023 and 2022.

NOTE: In the table above, interest on loans for 2023 and 2022 includes $10,000 and $440,000, respectively, of interest and fees on PPP loans.

Allowance for credit losses

Three months ended

Year ended

March 31,

December 31,

2023 (unaudited)

2022 (unaudited)

2022

(Dollars in thousands)

Balance in the allowance for credit losses at beginning of period

22,374

17,806

Loans charged-off:

SBA non-real estate

214

885

Direct lease financing

905

191

576

Consumer - other

—

Total

1,122

289

1,461

Recoveries:

SBA non-real estate

202

140

SBA commercial mortgage

—

Direct lease financing

124

Other loans

—

Total

344

288

Net charge-offs

778

258

1,173

Provision for credit losses, excluding commitment provision

2,198

1,503

5,741

Balance in allowance for credit losses at end of period

23,794

19,051

22,374

Net charge-offs/average loans

0.01%

0.03%

Net charge-offs/average assets

0.01%

—

0.02%

Loan portfolio

March 31,

December 31,

September 30,

March 31,

2023 (unaudited)

2022

2022 (unaudited)

(Dollars in thousands)

SBL non-real estate

114,334

108,954

116,080

122,387

SBL commercial mortgage

492,798

474,496

429,865

385,559

SBL construction

33,116

30,864

26,841

31,432

Small business loans

640,248

614,314

572,786

539,378

Direct lease financing

652,541

632,160

599,796

538,616

SBLOC / IBLOC *

2,053,450

2,332,469

2,369,106

2,067,233

Advisor financing **

189,425

172,468

168,559

146,461

Real estate bridge loans

1,752,322

1,669,031

1,488,119

803,477

Other loans ***

60,210

61,679

64,980

61,096

5,348,196

5,482,121

5,263,346

4,156,261

Unamortized loan fees and costs

6,151

4,732

4,029

8,037

Total loans, including unamortized fees and costs

5,354,347

5,486,853

5,267,375

4,164,298

Small business portfolio

March 31,

December 31,

September 30,

March 31,

2023 (unaudited)

2022

2022 (unaudited)

(Dollars in thousands)

SBL, including unamortized fees and costs

648,858

621,641

579,156

545,462

SBL, included in loans, at fair value

140,909

146,717

159,914

183,408

Total small business loans ****

789,767

768,358

739,070

728,870

* 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 70% of the estimated business enterprise value, based on a third-party valuation, but may be increased depending upon the debt service coverage ratio. Personal guarantees and blanket business liens are obtained as appropriate.

*** Includes demand deposit overdrafts reclassified as loan balances totaling $4.8 million and $2.6 million at March 31, 2023 and December 31, 2022, respectively. Estimated overdraft charge-offs and recoveries are reflected in the allowance for credit losses and have been immaterial.

****The small business loans held at fair value are comprised of the government guaranteed portion of certain SBA loans at the dates indicated.

Small business loans as of March 31, 2023

Loan principal

(Dollars in millions)

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

380

Paycheck Protection Program loans (PPP) (a)

Commercial mortgage SBA (b)

257

Construction SBA (c)

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

104

Non-SBA small business loans

Total principal

779

Unamortized fees and costs

Total small business loans

790

(a) This is the portion of SBA 7a loans (7a) and PPP loans that 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 $11 million in Construction SBA loans, $9 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 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.

Small business loans by type as of March 31, 2023

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

SBL commercial mortgage*

SBL construction*

SBL non-real estate

Total

% Total

(Dollars in millions)

Hotels and motels

—

19%

Full-service restaurants

Lessors of nonresidential buildings

—

Car washes

—

Child day care services

—

Homes for the elderly

—

Outpatient mental health and substance abuse centers

—

Funeral homes and funeral services

—

Gasoline stations with convenience stores

—

Fitness and recreational sports centers

—

Offices of lawyers

—

Lessors of other real estate property

—

General warehousing and storage

—

Plumbing, heating, and air-conditioning companies

—

Limited-service restaurants

Lessors of residential buildings and dwellings

—

Miscellaneous durable goods merchants

—

Technical and trade schools

—

Packaged frozen food merchant wholesalers

—

Other amusement and recreation industry

—

Offices of dentists

—

Other warehousing and storage

—

Vocational rehabilitation services

—

Miscellaneous wood product manufacturing

—

Other**

105

25%

Total

343

395

100%

* Of the SBL commercial mortgage and SBL construction loans, $90 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 $3 million are spread over a hundred different classifications such as Commercial Printing, Pet and Pet Supplies Stores, Securities Brokerage, etc.

State diversification as of March 31, 2023

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

SBL commercial mortgage*

SBL construction*

SBL non-real estate

Total

% Total

(Dollars in millions)

California

19%

Florida

18%

North Carolina

11%

New York

—

Pennsylvania

—

Georgia

—

New Jersey

—

Illinois

—

Texas

—

Other States <$10 million

22%

Total

343

395

100%

Top 10 loans as of March 31, 2023

Type

State

SBL commercial mortgage

(Dollars in millions)

Mental health and substance abuse center

Hotel

Lawyers office

Hotel

General warehousing and storage

Hotel

Mental health and substance abuse center

Lessor of residential building

Total

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

Type as of March 31, 2023

Type

# Loans

Balance

Weighted average

origination date

LTV

Weighted average

interest rate

(Dollars in millions)

Real estate bridge loans (multi-family apartment loans recorded at amortized cost)*

133

1,752

72%

8.40%

Non-SBA commercial real estate loans, at fair value:

Multi-family (apartment bridge loans)*

303

76%

8.20%

Hospitality (hotels and lodging)

65%

8.50%

Retail

72%

7.30%

Other

73%

5.20%

354

75%

8.11%

Fair value adjustment

)

Total non-SBA commercial real estate loans, at fair value

352

Total commercial real estate loans

2,104

73%

8.36%

*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 March 31, 2023

15 largest loans as of March 31, 2023

State

Balance

Origination

date LTV

State

Balance

Origination

date LTV

(Dollars in millions)

Texas

783

73%

Texas

75%

Florida

242

71%

Texas

72%

Georgia

239

70%

Texas

75%

Tennessee

72%

Texas

79%

Ohio

69%

Tennessee

72%

Michigan

70%

Texas

80%

Alabama

72%

Michigan

62%

Other States each <$55 million

517

75%

Florida

72%

Total

2,104

74%

Texas

67%

Michigan

79%

Texas

62%

Tennessee

71%

Indiana

76%

Ohio

74%

Texas

77%

15 Largest loans

516

73%

Institutional banking loans outstanding at March 31, 2023

Type

Principal

% of total

(Dollars in millions)

Securities backed lines of credit (SBLOC)

1,132

50%

Insurance backed lines of credit (IBLOC)

922

41%

Advisor financing

189

Total

2,243

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 March 31, 2023

Principal amount

% Principal to

collateral

(Dollars in millions)

54%

40%

28%

35%

65%

43%

61%

68%

69%

38%

Total and weighted average

108

49%

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 generally lend up to 95% of such cash value. Our underwriting standards require approval of the insurance companies which carry the policies backing these loans. Currently, nine insurance companies have been approved and, as of March 31, 2023, all were rated A- or better by AM BEST.

Direct lease financing* by type as of March 31, 2023

Principal balance

% Total

(Dollars in millions)

Construction

112

17%

Waste management and remediation services

13%

Government agencies and public institutions**

12%

Real estate and rental and leasing

10%

Retail trade

Finance and insurance

Health care and social assistance

Manufacturing

Professional, scientific, and technical services

Wholesale trade

Transportation and warehousing

Educational services

Mining, quarrying, and oil and gas extraction

Other

17%

Total

653

100%

* Of the total $653 million of direct lease financing, $575 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 March 31, 2023

State

Principal balance

% Total

(Dollars in millions)

Florida

14%

California

10%

Utah

10%

Pennsylvania

New Jersey

New York

North Carolina

Texas

Maryland

Connecticut

Washington

Georgia

Idaho

Ohio

Illinois

Other States

130

22%

Total

653

100%

Capital ratios

Tier 1 capital

Total capital

Common equity

to average

to risk-weighted

tier 1 to risk

assets ratio

weighted assets

As of March 31, 2023

The Bancorp, Inc.

9.88%

14.34%

14.84%

14.34%

The Bancorp Bank, National Association

11.00%

15.94%

16.44%

15.94%

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

5.00%

8.00%

10.00%

6.50%

As of December 31, 2022

The Bancorp, Inc.

9.63%

13.40%

13.87%

13.40%

The Bancorp Bank, National Association

10.73%

14.95%

15.42%

14.95%

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

5.00%

8.00%

10.00%

6.50%

Three months ended

Year ended

March 31,

December 31,

2023

2022

Selected operating ratios

Return on average assets (1)

2.63%

1.68%

1.81%

Return on average equity (1)

28.07%

18.01%

19.34%

Net interest margin

4.67%

3.12%

3.55%

(1) Annualized

Book value per share table

March 31,

December 31,

September 30,

March 31,

2023

2022

Book value per share

13.11

12.46

11.81

11.41

Loan quality table

March 31,

December 31,

September 30,

March 31,

2023

2022

(Dollars in thousands)

Nonperforming loans to total loans

0.26%

0.33%

0.16%

0.20%

Nonperforming assets to total assets

0.46%

0.50%

0.35%

0.38%

Allowance for credit losses to total loans

0.44%

0.41%

0.37%

0.46%

Nonaccrual loans

12,938

10,356

3,860

3,621

Loans 90 days past due still accruing interest

873

7,775

4,415

4,597

Other real estate owned

21,117

21,210

18,873

Total nonperforming assets

34,928

39,341

27,148

27,091

Gross dollar volume (GDV) (1)

Three months ended

March 31,

December 31,

September 30,

March 31,

2023

2022

(Dollars in thousands)

Prepaid and debit card GDV

34,011,792

29,454,074

28,119,428

28,564,582

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

Business line quarterly summary

Quarter ended March 31, 2023

(Dollars in millions)

Balances

% Growth

Major business lines

Average

approximate

rates(1)

Balances(2)

Year over

year

Linked

quarter

annualized

Loans

Institutional banking(3)

6.1%

2,243

(42)%

Small business lending(4)

6.5%

790

11%

Leasing

6.7%

653

21%

13%

Commercial real estate (non-SBA loans, at fair value)

8.1%

352

Real estate bridge loans (recorded at book value)

8.4%

1,752

118%

20%

Weighted average yield

7.0%

5,790

Non-interest income

% Growth

Deposits: Fintech solutions group

Current

quarter(5)

Year over

year

Prepaid and debit card issuance, and other payments

2.2%

5,968

25.5

24%

(1)Average rates are for the quarter ended March 31, 2023.

(2)Loan and deposit categories are respectively based on period-end and average quarterly balances.

(3)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.

(4)Small Business Lending is substantially comprised of SBA loans. Loan growth percentages exclude short-term PPP loans.

(5)Includes $1.4 million from termination of a partner contract and $0.6 million from reclassified fees. Adjusted Year over Year growth is 14%.

Summary of credit lines available

Notwithstanding that the vast majority of the Company’s funding is comprised of insured and small balance accounts, the Company maintains lines of credit exceeding potential liquidity requirements as follows. The Company also has access to other substantial sources of liquidity.

April 15, 2023

(Dollars in thousands)

Federal Reserve Bank

2,081,498

Federal Home Loan Bank

1,246,883

Total lines of credit available

3,328,381

Estimated insured vs Other uninsured deposits

The vast majority of the Company’s deposits are insured and low balance and accordingly do not constitute the liquidity risk experienced by certain institutions. Accordingly the deposit base is comprised as follows.

March 31, 2023

Insured

90%

Low balance stored value

Other uninsured

Total deposits

100%

Calculation of efficiency ratio(1)

Three months ended

March 31,

December 31,

2003

2022

(Dollars in thousands)

Net interest income

85,816

76,760

Non-interest income

28,989

25,740

Total revenue

114,805

102,500

Non-interest expense

48,030

43,475

Efficiency ratio

42%

(1) The efficiency ratio is calculated by dividing GAAP total non-interest expense by the total of GAAP net interest income and non-interest income. This ratio compares revenues generated with the amount of expense required to generate such revenues, and may be used as one measure of overall efficiency.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230426005969/en/

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

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