The Bancorp, Inc. Reports First Quarter 2023 Financial Results

WILMINGTON, Del., April 27, 2023--(BUSINESS WIRE)--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)				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				12,629				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				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			42				42				42				42
Senior debt			99,142				99,050				98,958				98,774
Subordinated debenture			13,401				13,401				13,401				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							Average				Average						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				69			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				41			4.91	%			3,559				32		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			42				—			—				41				—		—
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							23											29
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,			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		$	17,806
Loans charged-off:
SBA non-real estate			214			98			885
Direct lease financing			905			191			576
Consumer - other			3			—			—
Total			1,122			289			1,461
Recoveries:
SBA non-real estate			202			12			140
SBA commercial mortgage			75			—			—
Direct lease financing			67			19			124
Other loans			—			—			24
Total			344			31			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%			0.01%			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)			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)			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)			4
Commercial mortgage SBA (b)			257
Construction SBA (c)			11
Non-guaranteed portion of U.S. government guaranteed loans (d)			104
Non-SBA small business loans			23
Total principal		$	779
Unamortized fees and costs			11
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		$	74		$	—		$	—		$	74			19%
Full-service restaurants			16			3			2			21			5%
Lessors of nonresidential buildings			19			—			—			19			5%
Car washes			17			2			—			19			5%
Child day care services			14			—			1			15			4%
Homes for the elderly			16			—			—			16			4%
Outpatient mental health and substance abuse centers			15			—			—			15			4%
Funeral homes and funeral services			15			—			—			15			4%
Gasoline stations with convenience stores			13			—			—			13			3%
Fitness and recreational sports centers			8			—			2			10			3%
Offices of lawyers			9			—			—			9			2%
Lessors of other real estate property			8			—			—			8			2%
General warehousing and storage			7			—			—			7			2%
Plumbing, heating, and air-conditioning companies			6			—			1			7			2%
Limited-service restaurants			1			2			3			6			2%
Lessors of residential buildings and dwellings			5			—			—			5			1%
Miscellaneous durable goods merchants			5			—			—			5			1%
Technical and trade schools			—			5			—			5			1%
Packaged frozen food merchant wholesalers			5			—			—			5			1%
Other amusement and recreation industry			4			—			—			4			1%
Offices of dentists			2			1			—			3			1%
Other warehousing and storage			3			—			—			3			1%
Vocational rehabilitation services			3			—			—			3			1%
Miscellaneous wood product manufacturing			3			—			—			3			1%
Other**			75			2			28			105			25%
Total		$	343		$	15		$	37		$	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		$	71		$	3		$	3		$	77			19%
Florida			66			1			4			71			18%
North Carolina			34			7			2			43			11%
New York			26			—			5			31			8%
Pennsylvania			21			—			1			22			6%
Georgia			15			—			2			17			4%
New Jersey			12			—			4			16			4%
Illinois			14			—			1			15			4%
Texas			12			—			4			16			4%
Other States <$10 million			72			4			11			87			22%
Total		$	343		$	15		$	37		$	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.

Top 10 loans as of March 31, 2023
Type		State			SBL commercial mortgage
			(Dollars in millions)
Mental health and substance abuse center			FL		$	10
Hotel			FL			9
Lawyers office			CA			8
Hotel			NC			7
General warehousing and storage			PA			7
Hotel			FL			6
Hotel			NY			6
Hotel			NC			5
Mental health and substance abuse center			CT			5
Lessor of residential building			NC			5
Total					$	68

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)*			19		$	303			76%		8.20%
Hospitality (hotels and lodging)			3			30			65%		8.50%
Retail			2			12			72%		7.30%
Other			2			9			73%		5.20%
			26			354			75%		8.11%
Fair value adjustment						(2	)
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)									(Dollars in millions)
Texas		$	783			73%			Texas			$	42		75%
Florida			242			71%			Texas				40		72%
Georgia			239			70%			Texas				39		75%
Tennessee			99			72%			Texas				39		79%
Ohio			90			69%			Tennessee				37		72%
Michigan			68			70%			Texas				37		80%
Alabama			66			72%			Michigan				36		62%
Other States each <$55 million			517			75%			Florida				33		72%
Total		$	2,104			74%			Texas				32		67%
									Michigan				32		79%
									Texas				31		62%
									Tennessee				30		71%
									Indiana				30		76%
									Ohio				29		74%
									Texas				29		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		9%
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)
		$	20		54%
			18		40%
			13		28%
			9		35%
			9		65%
			9		43%
			9		61%
			8		68%
			7		69%
			6		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			85		13%
Government agencies and public institutions**			81		12%
Real estate and rental and leasing			67		10%
Retail trade			47		7%
Finance and insurance			40		6%
Health care and social assistance			31		5%
Manufacturing			22		3%
Professional, scientific, and technical services			22		3%
Wholesale trade			18		3%
Transportation and warehousing			12		2%
Educational services			9		1%
Mining, quarrying, and oil and gas extraction			8		1%
Other			99		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		$	91		14%
California			68		10%
Utah			64		10%
Pennsylvania			41		6%
New Jersey			40		6%
New York			33		5%
North Carolina			31		5%
Texas			29		4%
Maryland			28		4%
Connecticut			26		4%
Washington			16		2%
Georgia			16		2%
Idaho			15		2%
Ohio			13		2%
Illinois			12		2%
Other States			130		22%
Total		$	653		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 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			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			2022			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			2022			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			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			2022			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		1%		(42)%
Small business lending(4)		6.5%			790		11%		11%
Leasing		6.7%			653		21%		13%
Commercial real estate (non-SBA loans, at fair value)		8.1%			352		nm		nm
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		9%		nm		$	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			5%
Other uninsured			5%
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%			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.

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Contacts

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