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: September 30, 2020



o		TRANSITION REPORT PURSUANT TO SECTION 13 OF 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)

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 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 o	Accelerated filer x	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 Act). Yes o No x

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

As of October 30, 2020, there were 57,590,874 outstanding shares of common stock, $1.00 par value.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

THE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


	September 30,	December 31,
	2020	2019
	(unaudited)
	(in thousands)
ASSETS
Cash and cash equivalents
Cash and due from banks	$ 6,220	$ 19,928
Interest earning deposits at Federal Reserve Bank	294,758	924,544
Total cash and cash equivalents	300,978	944,472

Investment securities, available-for-sale, at fair value	1,264,903	1,320,692
Investment securities, held-to-maturity (fair value $83,002 at December 31, 2019)	-	84,387
Commercial loans, at fair value (held-for-sale at December 31, 2019)	1,849,947	1,180,546
Loans, net of deferred loan fees and costs	2,488,760	1,824,245
Allowance for credit losses	(15,727)	(10,238)
Loans, net	2,473,033	1,814,007
Federal Home Loan Bank and Atlantic Central Bankers Bank stock	1,368	5,342
Premises and equipment, net	15,849	17,538
Accrued interest receivable	18,852	13,619
Intangible assets, net	2,563	2,315
Deferred tax asset, net	7,952	12,538
Investment in unconsolidated entity, at fair value	31,783	39,154
Assets held-for-sale from discontinued operations	122,253	140,657
Other assets	79,821	81,696
Total assets	$ 6,169,302	$ 5,656,963

LIABILITIES
Deposits
Demand and interest checking	$ 4,882,834	$ 4,402,740
Savings and money market	505,928	174,290
Time deposits	-	475,000
Total deposits	5,388,762	5,052,030

Securities sold under agreements to repurchase	42	82
Senior debt	98,222	-
Subordinated debentures	13,401	13,401
Other long-term borrowings	40,462	40,991
Other liabilities	69,954	65,962
Total liabilities	5,610,843	5,172,466

SHAREHOLDERS' EQUITY
Common stock - authorized, 75,000,000 shares of $1.00 par value; 57,590,874 and 56,940,521
shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively	57,591	56,941
Treasury stock, at cost (100,000 shares)	(866)	(866)
Additional paid-in capital	376,751	371,633
Retained earnings	104,282	50,742
Accumulated other comprehensive income	20,701	6,047
Total shareholders' equity	558,459	484,497

Total liabilities and shareholders' equity	$ 6,169,302	$ 5,656,963

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

‎

THE BANCORP, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS



	For the three months ended September 30,		For the nine months ended September 30,
	2020	2019	2020	2019
	(in thousands, except per share data)
Interest income
Loans, including fees	$ 44,433	$ 35,302	$ 125,326	$ 95,749
Investment securities:
Taxable interest	7,911	10,485	28,594	32,649
Tax-exempt interest	28	43	87	133
Interest earning deposits	106	2,545	1,836	7,502
	52,478	48,375	155,843	136,033
Interest expense
Deposits	1,730	9,034	11,468	26,727
Short-term borrowings	1	1,595	181	2,624
Senior debt	633	-	633	-
Subordinated debentures	118	186	408	573
	2,482	10,815	12,690	29,924
Net interest income	49,996	37,560	143,153	106,109
Provision for credit losses	1,297	650	5,798	2,950
Net interest income after provision for credit losses	48,699	36,910	137,355	103,159

Non-interest income
Service fees on deposit accounts	8	8	23	69
ACH, card and other payment processing fees	1,760	2,590	5,313	7,414
Prepaid, debit card and related fees	19,434	16,134	56,647	48,137
Net realized and unrealized gains (losses) on commercial loans
originated for sale	684	13,704	(5,412)	24,319
Change in value of investment in unconsolidated entity	-	-	(45)	-
Leasing related income	1,519	589	2,795	2,311
Other	947	490	1,996	1,379
Total non-interest income	24,352	33,515	61,317	83,629

Non-interest expense
Salaries and employee benefits	26,417	24,526	74,650	70,192
Depreciation and amortization	785	885	2,457	2,825
Rent and related occupancy cost	1,376	1,432	4,191	4,304
Data processing expense	1,192	1,192	3,538	3,684
Printing and supplies	114	164	440	506
Audit expense	397	402	1,205	1,265
Legal expense	994	1,466	4,136	4,324
Amortization of intangible assets	147	382	441	1,148
FDIC insurance	2,180	860	7,687	4,884
Software	3,595	3,199	10,458	9,180
Insurance	741	663	2,059	1,874
Telecom and IT network communications	392	417	1,186	1,060
Consulting	410	934	1,011	2,576
SEC Settlement	-	1,400	-	1,400
Lease termination expense	-	-	-	908
Other	3,286	4,129	9,605	10,669
Total non-interest expense	42,026	42,051	123,064	120,799
Income from continuing operations before income taxes	31,025	28,374	75,608	65,989
Income tax expense	7,894	7,975	19,033	17,585
Net income from continuing operations	$ 23,131	$ 20,399	$ 56,575	$ 48,404
Discontinued operations
Income (loss) from discontinued operations before income taxes	(1,671)	151	(2,720)	1,875
Income tax expense (benefit)	(1,794)	125	(2,058)	574


		Page
Part I Financial Information
Item 1	Financial Statements:	4

	Consolidated Balance Sheets – September 30, 2020 (unaudited) and December 31, 2019	4

	Unaudited Consolidated Statements of Operations – Three and nine months ended September 30, 2020 and 2019	5

	Unaudited Consolidated Statements of Comprehensive Income – Three and nine months ended September 30, 2020 and 2019	7

	Unaudited Consolidated Statements of Changes in Shareholders’ Equity – Nine months ended September 30, 2020 and 2019	8

	Unaudited Consolidated Statements of Cash Flows – Nine months ended September 30, 2020 and 2019	10

	Notes to Unaudited Consolidated Financial Statements	11

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	49

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	75

Item 4.	Controls and Procedures	75

Part II Other Information

Item 1.	Legal Proceedings	76
Item 1A.	Risk Factors	76
Item 6.	Exhibits	79

Signatures		80

Section 1: 10-Q (10-Q)

THE BANCORP, INC.