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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2024

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from: _____ to _____

Commission file number: 000-51018

THE BANCORP, INC.

(Exact name of registrant as specified in its charter)

Delaware

23-3016517

(State or other jurisdiction of incorporation or organization)

(IRS Employer Identification No.)

409 Silverside Road, Wilmington, DE 19809

(302) 385-5000

(Address of principal executive offices and zip code)

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of each Exchange on Which Registered

Common Stock, par value $1.00 per share

TBBK

 Nasdaq Global Select 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x

Accelerated filer o

Non-accelerated filer o

Smaller reporting company o

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of April 29, 2024, there were 51,764,683 outstanding shares of common stock, $1.00 par value.

1


THE BANCORP, INC

Form 10-Q Index

Page

Part I Financial Information

Item 1.

Financial Statements:

3

Consolidated Balance Sheets – March 31, 2024 (unaudited) and December 31, 2023

3

Unaudited Consolidated Statements of Operations – Three months ended March 31, 2024 and 2023

4

Unaudited Consolidated Statements of Comprehensive Income – Three months ended March 31, 2024 and 2023

5

Unaudited Consolidated Statements of Changes in Shareholders’ Equity – Three months ended March 31, 2024 and 2023

6

Unaudited Consolidated Statements of Cash Flows – Three months ended March 31, 2024 and 2023

8

Notes to Unaudited Consolidated Financial Statements

9

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

39

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

66

Item 4.

Controls and Procedures

66

Part II Other Information

Item 1.

Legal Proceedings

67

Item 1A.

Risk Factors

67

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

67

Item 6.

Exhibits

68

Signatures

69


PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

THE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

March 31,

December 31,

2024

2023

(in thousands, except share data)

(unaudited)

ASSETS

Cash and cash equivalents

Cash and due from banks

$

9,105 

$

4,820 

Interest-earning deposits at Federal Reserve Bank

1,241,363 

1,033,270 

Total cash and cash equivalents

1,250,468 

1,038,090 

Investment securities, available-for-sale, at fair value, net of $10.0 million allowance for credit loss

718,247 

747,534 

Commercial loans, at fair value

282,998 

332,766 

Loans, net of deferred loan fees and costs

5,459,344 

5,361,139 

Allowance for credit losses

(28,741)

(27,378)

Loans, net

5,430,603 

5,333,761 

Stock in Federal Reserve, Federal Home Loan and Atlantic Central Bankers Banks

15,642 

15,591 

Premises and equipment, net

27,482 

27,474 

Accrued interest receivable

37,861 

37,534 

Intangible assets, net

1,552 

1,651 

Other real estate owned

19,559 

16,949 

Deferred tax asset, net

21,764 

21,219 

Other assets

109,680 

133,126 

Total assets

$

7,915,856 

$

7,705,695 

LIABILITIES

Deposits

Demand and interest checking

$

6,828,159 

$

6,630,251 

Savings and money market

62,597 

50,659 

Total deposits

6,890,756 

6,680,910 

Securities sold under agreements to repurchase

42 

Senior debt

95,948 

95,859 

Subordinated debentures

13,401 

13,401 

Other long-term borrowings

38,407 

38,561 

Other liabilities

60,579 

69,641 

Total liabilities

7,099,091 

6,898,414 

SHAREHOLDERS' EQUITY

Common stock - authorized, 75,000,000 shares of $1.00 par value; 52,253,037 and 53,202,630

shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

52,253 

53,203 

Additional paid-in capital

166,335 

212,431 

Retained earnings

618,044 

561,615 

Accumulated other comprehensive loss

(19,867)

(19,968)

Total shareholders' equity

816,765 

807,281 

Total liabilities and shareholders' equity

$

7,915,856 

$

7,705,695 

The accompanying notes are an integral part of these consolidated statements.


3


THE BANCORP, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

For the three months ended March 31,

2024

2023

(Dollars in thousands, except per share data)

Interest income

Loans, including fees

$

114,252 

$

106,259 

Investment securities:

Taxable interest

9,634 

9,300 

Tax-exempt interest

39 

32 

Interest-earning deposits

11,884 

6,585 

135,809 

122,176 

Interest expense

Deposits

39,161 

34,460 

Short-term borrowings

19 

234 

Long-term borrowings

686 

126 

Senior debt

1,233 

1,279 

Subordinated debentures

292 

261 

41,391 

36,360 

Net interest income

94,418 

85,816 

Provision for credit losses on loans

2,169 

1,903 

Net interest income after provision for credit losses

92,249 

83,913 

Non-interest income

ACH, card and other payment processing fees

2,964 

2,171 

Prepaid, debit card and related fees

24,286 

23,323 

Net realized and unrealized gains

on commercial loans, at fair value

1,096 

1,725 

Leasing related income

388 

1,490 

Other

648 

280 

Total non-interest income

29,382 

28,989 

Non-interest expense

Salaries and employee benefits

30,280 

29,785 

Depreciation and amortization

949 

721 

Rent and related occupancy cost

1,640 

1,394 

Data processing expense

1,421 

1,321 

Printing and supplies

103 

145 

Audit expense

359 

392 

Legal expense

821 

958 

Amortization of intangible assets

99 

99 

FDIC insurance

845 

955 

Software

4,489 

4,237 

Insurance

1,338 

1,306 

Telecom and IT network communications

271 

376 

Consulting

578 

322 

Write-downs and other losses on other real estate owned

1,019 

Other

3,519 

5,000 

Total non-interest expense

46,712 

48,030 

Income before income taxes

74,919 

64,872 

Income tax expense

18,490 

15,750 

Net income

$

56,429 

$

49,122 

Net income per share - basic

$

1.07 

$

0.89 

Net income per share - diluted

$

1.06 

$

0.88 

Weighted average shares - basic

52,747,140 

55,452,815 

Weighted average shares - diluted

53,326,588 

56,048,142 

The accompanying notes are an integral part of these consolidated statements.


4


THE BANCORP, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the three months ended March 31,

2024

2023

(Dollars in thousands)

Net income

$

56,429 

$

49,122 

Other comprehensive income, net of reclassifications into net income:

Other comprehensive income

Securities available-for-sale:

Change in net unrealized gains

126 

5,229 

Reclassification adjustments for losses included in income

2 

4 

Other comprehensive income

128 

5,233 

Income tax expense related to items of other comprehensive income

Securities available-for-sale:

Change in net unrealized gains

27 

1,412 

Reclassification adjustments for losses included in income

1 

Income tax expense related to items of other comprehensive income

27 

1,413 

Other comprehensive income, net of tax and reclassifications into net income

101 

3,820 

Comprehensive income

$

56,530 

$

52,942 

The accompanying notes are an integral part of these consolidated statements.

5


THE BANCORP, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

For the three months ended March 31, 2024

(Dollars in thousands, except share data)

Accumulated

Common

Additional

other

stock

Common

paid-in

Retained

comprehensive

shares

stock

capital

earnings

(loss) income

Total

Balance at January 1, 2024