Proxy Summary

Proposal #1

Proposal #2

Proposal #3

Proposal #4

Other Matters

2023 Financial Performance Highlights

The Bancorp delivered strong growth and increasing levels of profitability in financial results for ~~examination by the stockholders during the whole time~~fiscal year 2023. As of ~~the meeting and can be requested after stockholders login to the virtual Annual Meeting.~~

~~Whether or not you expect to attend the Annual Meeting virtually, please vote your shares in one of the ways described on the Proxy Card for the Annual Meeting as promptly as possible.~~

~~Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be held on May 19, 2021:~~

~~The Company’s Notice of Annual Meeting, Proxy Statement, Annual Report for the year ended~~ December 31, ~~2020~~2023:

$7.7B $192M 26% 2.6%
Our assets totaled approximately $7.7 billion. We recorded net income of $192 million compared to $130 million in 2022. We recorded 26% return on equity compared to 19% in 2022. We recorded 2.6% return on assets compared to 1.8% in 2022.
Executive Compensation Highlights

Set forth below is a table illustrating key highlights of our compensation practices used to support our business strategies, align with our pay-for-performance philosophy, and ~~Proxy Card are available~~at

~~https://investors.thebancorp.com/financial-information/proxy-materials/default.aspx~~

~~Revocation of Proxy~~

~~If a proxy in the accompanying form is executed and returned, it may nevertheless be revoked at any time before its~~ exercise ~~by giving written notice of revocation~~strong oversight to ~~the Secretary of the Company at its Wilmington address stated herein, by submitting a later dated proxy or by attending the Annual Meeting and voting in person.~~

~~Expenses and Manner of Solicitation~~

The cost of soliciting proxies will be borne by the Company. Directors, officers and regular employees of the Company may solicit proxies either personally, by letter or by telephone, but will not be specifically compensated for soliciting such proxies. The Company will reimburse banks, brokerage firms, other custodians, nominees and fiduciaries for reasonable expenses incurred in sending proxy materials to beneficial owners of the Common Shares.

mitigate excessive risk-taking.

2	Practices We Employ:	Practices We Avoid:
	Balanced Compensation Philosophy We have a balanced compensation philosophy, utilizing a mix of cash and equity, short-term and long-term elements, and fixed and variable (at risk) incentives.	No Employment Agreements We generally do not enter into employment agreements with our executive officers.
	Pay for Performance A significant percentage of our executive officers’ total compensation (bonus and equity grants) is discretionary, and awarded based on our performance.	No Guaranteed Incentive Payouts We do not provide absolute or guaranteed incentive payouts regardless of performance.
	Executives Subject to Clawback Policy We have an executive compensation clawback policy applicable to all executive officers that provides for the mandatory recovery, in the event of an accounting restatement, of erroneously awarded incentive-based compensation received by executive officers to the extent the compensation was awarded based on the attainment of a financial reporting measure.	No Significant Perquisites Our executive officers are entitled to only limited perquisites.
	Evaluate and Manage Risk The Compensation Committee reviews incentive compensation programs annually to ensure that our programs do not encourage excessive risk-taking.	No Hedging and Pledging We prohibit our employees, executive officers, and directors from engaging in pledging and hedging Company stock and derivatives.
	Independent Expert Advice Pay Governance LLC, an independent advisor free of conflicts of interest, provides the Compensation Committee with expert executive compensation advice.	No Tax Gross-Ups We do not provide our executive officers with tax gross-ups in any of our compensation plans or agreements.
	Benchmarking We use an appropriate peer group when establishing executive compensation.
	Stockholder Alignment Our compensation philosophy encourages executive officers to own a meaningful personal stake in the Company.

2024 PROXY STATEMENT

~~Annual Report and Report on Form 10-K~~

The Company’s Annual Report to Stockholders, including the financial statements and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2020, is being sent to stockholders of record as of March 23, 2021. Stockholders of record as of March 23, 2021, and beneficial owners of the Company’s Common Shares on that date, may obtain from the Company, without charge, a copy of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission, or the SEC, by a request therefor in writing. Any such request from a beneficial owner of the Common Shares must set forth a good faith representation that, as of the March 23, 2021 record date for this solicitation, the person making the request was the beneficial owner of the Common Shares. Such written requests should be directed to The Bancorp, Inc., Attention: Paul Frenkiel, Secretary, 409 Silverside Road, Suite 105, Wilmington, Delaware 19809.

~~Stockholders Sharing an Address~~

Stockholders sharing an address with another stockholder may receive only one annual report or one set of proxy materials at that address unless they have provided contrary instructions. Any such stockholder who wishes to receive a separate copy of the annual report or a separate set of proxy materials now or in the future may write or call the Company to request a separate copy of these materials from the Company at The Bancorp, Inc., Attention: Andres Viroslav, 409 Silverside Road, Suite 105, Wilmington, Delaware 19809, telephone number (215) 861-7990. The Company will promptly deliver a copy of the requested materials.

Similarly, a stockholder sharing an address with another stockholder who has received multiple copies of the Company’s proxy materials may use the contact information above to request delivery of a single copy of these materials.

~~Who May Vote at the Annual Meeting~~

At the Annual Meeting, only those holders of Common Shares at the close of business on March 23, 2021, the record date, will be entitled to vote. As of the record date, 57,942,341 Common Shares were outstanding. Each holder is entitled to one vote per share on each matter of business properly brought before the Annual Meeting. Stockholders do not have cumulative voting rights.

~~Quorum~~

The presence at the Annual Meeting in person or by proxy of a majority of all the votes entitled to be cast at the Annual Meeting will constitute a quorum. The presence of a quorum for any proposal establishes a quorum for all of the proposals, even if shareholders do not vote on all of the proposals.

~~Effect of Broker Non-Votes~~

A failure by brokers to vote Common Shares held by them in nominee name will mean that such Common Shares will not be counted for the purposes of establishing a quorum and will not be voted. If a broker does not receive voting instructions from the beneficial owner of Common Shares on a particular matter and does not have discretionary authority to vote on that matter but votes on another “routine” matter, those Common Shares will be counted to determine whether a quorum exists but will not be considered cast on any proposal on which they were not voted. Such shares are referred to as “broker non-votes.” Brokers generally only have discretion to vote on the approval of the selection of the auditor (Proposal 3 below) if you do not provide voting instructions, but do not have discretion to vote those shares with respect to the other proposals.

TABLE OF CONTENTS

Proxy Summary

Proposal #1

Proposal #2

Proposal #3

Proposal #4

Other Matters

~~Required Vote~~

~~Proposal 1.~~ The number of votes required in order to be elected as a director is dependent on whether an election is contested or uncontested. The Company’s bylaws define an election as “contested” if the number of nominees exceeds the number of directors to be elected. As no Company stockholders have provided proper notice to the Company of an intention to nominate director candidates, the director election described in Proposal 1 below is an uncontested election. To be elected as a director in an uncontested election, each director is elected by a majority of votes cast meaning that the number of votes cast “for” a director’s election exceeds the number of votes cast “against” that director’s election. Abstentions will have no effect on the outcome of the election.

~~Proposal 2~~. The affirmative vote of a majority of the votes cast at the Annual Meeting is required to approve the compensation of the Company’s named executive officers as described in Proposal 2 below. The vote is advisory, which allows stockholders to express to the Board of Directors how they feel about certain issues facing the Company, such as executive compensation. The results of an advisory vote are non-binding, which means that the Board of Directors is not required to take any specific action in response to the results of the vote. However, the Board of Directors strongly values feedback from the Company’s stockholders and will take the results of an advisory vote into account when considering future executive compensation.

~~Proposal 3~~. The affirmative vote of the holders of a majority of the votes cast at the Annual Meeting is required to approve the selection of Grant Thornton LLP, or Grant Thornton, as the Company’s independent registered public accounting firm. Abstentions will have no effect on the outcome of the proposal.

~~Any proxy not specifying to the contrary, and not designated as a broker non-vote, will be voted~~ ~~FOR~~:

~~the election of the directors;~~

~~the approval of the compensation for the named executive officers; and~~

~~the approval of the selection of Grant Thornton as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021.~~

Should any matters not described above be properly presented at the Annual Meeting, the persons named in the proxy will vote in accordance with their judgment. The proxy authorizes these persons, in their discretion, to vote upon such matters as may properly be brought before the Annual Meeting or any adjournment, postponement or continuation thereof.

~~No Appraisal Rights~~

Under Delaware law, holders of our voting stock are not entitled to demand appraisal of their shares or exercise similar rights of dissenters as a result of the approval of any of the proposals to be presented at the Annual Meeting.

Director Nominees

~~PROPOSAL 1. ELECTION OF DIRECTORS~~

~~Directors and Nominees~~

The Board of Directors consists of ~~thirteen~~10 members. All directors are elected for a term of one year or until their successors are elected and qualified. The Board of Directors, upon the recommendation of its Nominating and Governance Committee, has nominated Daniel G. Cohen, Walter T. Beach, Michael J. Bradley, John C. Chrystal, Matthew N. Cohn, John M. Eggemeyer, Hersh Kozlov, Damian M. Kozlowski, William H. Lamb, James J. McEntee III, Daniela A. Mielke, Stephanie B. Mudick and Mei-Mei H. Tuan,the individuals listed in the table below for election at the Annual Meeting for a term to expire at the annual meeting to be held in ~~2022~~2025 or until their successors are elected and qualified.

The Nominating and Governance Committee identifies and recommends candidates to serve on the Board of Directors. The Board of Directors has not adopted specific minimum qualifications for service on the Board, but rather has established a set of standards for evaluating director nominees as set forth in our Corporate Governance Guidelines, as described in further detail below in the “Director Nomination Selection Process” section. The Board of Directors seeks a mixture of skills that are relevant to the Company’s business as a financial holding company and the business of its subsidiary Bank.

The Board of Directors has nominated Mark E. Tryniski, who has not previously served on the Board of Directors. John M. Eggemeyer, who has served on the Board of Directors since 2016, is not standing for re-election at the Annual Meeting. The Board thanks Mr. Eggemeyer for his many contributions to the Company and the Bank.

NAME	AGE	PRINCIPAL OCCUPATION	INDEPENDENT	DIRECTOR SINCE
Michael J. Bradley	79	Retired Managing Director, BF Healthcare, Inc.		2005
Matthew N. Cohn	54	Vice Chairman, Advertising Specialty Institute, Inc.		1999
Cheryl D. Creuzot	64	President Emerita of Wealth Development Strategies, LLC & Wealth Development Strategies Investment Advisory, Inc.		2021
Hersh Kozlov	76	Partner, Duane Morris LLP		2014
Damian M. Kozlowski	59	Chief Executive Officer, The Bancorp, Inc. & President, The Bancorp Bank, N.A.		2016
William H. Lamb	84	Founding Partner, Lamb McErlane PC		2004
James J. McEntee III*	66	Managing Principal, StBWell, LLC		2000
Daniela A. Mielke	58	Managing Partner, Commerce Technology Advisors, LLC		2019
Stephanie B. Mudick	68	Retired Executive Vice President, JPMorgan Chase & Co.		2019
Mark E. Tryniski**	63	Retired President and Chief Executive Officer of Community Bank System, Inc.		N/A

Denotes Incumbent Chair of the Board

Denotes new director nominee

TABLE OF CONTENTS

Proxy Summary

Proposal #1

Proposal #2

Proposal #3

Proposal #4

Other Matters

Below are additional biographical summaries containing each director nominee’s background, business experience, and principal occupations, as well as a brief explanation regarding each nominee’s attributes that support the conclusion that he or ~~appointed.~~

she is qualified to serve on the Board.

	Michael J. Bradley
	Director
	Age: 79 Director Since: 2005 Independent Committees: Audit (Chair) and Executive Other Public Boards: None			Michael J. Bradley has served as a director of The Bancorp since 2005. From August 2015 until December 2021, he served as the Lead Independent Director of the Board. From 1998 until his retirement in 2014, Mr. Bradley was a co-owner and Managing Director of BF Healthcare, Inc., a supplier of physician services to hospitals and assisted living facilities. Since 1996, Mr. Bradley has also served on the board of directors of SourceCorp, a provider of business outsourcing solutions. Mr. Bradley has also served as Chief Executive Officer (“CEO”) of several university hospitals, including Columbia Presbyterian Medical Center and Thomas Jefferson University Hospital. Previously, Mr. Bradley served as Chairman of First Executive Bank and as Vice Chairman of First Republic Bank. Mr. Bradley is a certified public accountant. Reason for Nomination: Mr. Bradley has extensive experience serving on various boards of directors and also has significant managerial, accounting, and audit experience within complex, regulated industries.

	Matthew N. Cohn
	Director
	Age: 54 Director Since: 1999 Independent Committees: Audit, Compensation, ESG (Chair), and Nominating and Governance Other Public Boards: None			Matthew N. Cohn has served as a director of The Bancorp since 1999. Mr. Cohn founded The ASI Show, Inc., a leading producer of trade shows throughout the country, and has served as its Vice Chairman since 1992. In addition, since 1992, Mr. Cohn has been the Chairman of ASI Computer Systems, Inc., and the Vice Chairman of the Advertising Specialty Institute, Inc., a software as a service technology and media company. Mr. Cohn is currently the incoming Chair of the Global Mission Board for JDRF, the world’s largest charitable funder of diabetes research, and serves on its International Talent and Compensation Committee. Mr. Cohn is a former President of the board of directors of the Eastern Pennsylvania chapter of JDRF. Mr. Cohn has served on the international board of directors of the Young Presidents’ Organization (“YPO”) and was Chair of YPO’s International Event Committee. Mr. Cohn was the CEO of the Medical Data Institute from 1992 to 1997, as well as a former board member of The Society of Independent Show Organizers and Changing Attitudes, Decisions and Environments for Kids (also known as CADEKids). Reason for Nomination: Mr. Cohn has significant experience in founding, leading, and serving in senior roles in a variety of companies, including mid-sized businesses similar to many of the Bank’s clients. In addition, he has considerable experience with electronic distribution and technology-based companies. In February 2024, Mr. Cohn completed the National Association of Corporate Directors (“NACD”) Cyber-Risk Oversight Program and earned a CERT Certificate in Cybersecurity Oversight, which was developed by NACD, Ridge Global, and the CERT division of the Software Engineering Institute at Carnegie Mellon University.

2024 PROXY STATEMENT

TABLE OF CONTENTS

Proxy Summary

Proposal #1

Proposal #2

Proposal #3

Proposal #4

Other Matters

	Cheryl D. Creuzot
	Director
	Age: 64 Director Since: 2021 Independent Committees: Audit and Risk Other Public Boards: None			Cheryl D. Creuzot has served as a director of The Bancorp since 2021. Since 2018, Mrs. Creuzot has served as President Emerita of Wealth Development Strategies, LLC and Wealth Development Strategies Investment Advisory, Inc., firms regulated by the SEC and the Financial Industry Regulatory Authority, where she also served as Principal and Managing Partner from 2000 until 2018. Since October 2022, she has served as a member of the board of directors of VALIC Company I, a mutual fund complex affiliated with Corebridge Financial, Inc. (NYSE: CRBG). Since 2013, Mrs. Creuzot has served on the MD Anderson Cancer Center Board of Visitors where she serves on the Executive Committee. She also serves on the board of directors of The Frenchy’s Companies, a family-owned food manufacturing and restaurant organization. In 2022, Mrs. Creuzot was appointed as a director of the BeyGood Foundation where she serves on the Finance and Investment Committees. From 2020 to 2024, Mrs. Creuzot served as a Commissioner of The Port of Houston. Additionally, Mrs. Creuzot served on the board of directors of Amegy Bank from January 2021 to October 2021, and served on the board of directors of Unity National Bank from 2008 to 2015, where she chaired the Compliance, Audit, and Investment Committees. She is also a former board member and Vice Chair of the Texas Public Finance Authority, the former Chair of the University of Houston Board of Visitors, and a former board member of the Greater Houston Partnership. Reason for Nomination: Mrs. Creuzot has extensive experience in finance and has held numerous leadership positions in the public and private sectors. She has previously served as a director at other federally insured depository institutions, with specific focus on compliance, audit, and investment matters.

	Hersh Kozlov
	Director
	Age: 76 Director Since: 2014 Independent Committees: Risk Other Public Boards: None			Hersh Kozlov has served as a director of The Bancorp since 2014. He has been a partner at Duane Morris LLP (“Duane Morris”), an international law firm, since 2009 and serves on the governing board of the law firm. Previously, he was a partner at the law firm Wolf, Block, Schorr and Solis-Cohen LLP from 2001 to 2009. Mr. Kozlov previously served as an independent member of the board of directors of vTv Therapeutics, Inc. (Nasdaq: VTVT), a biopharmaceutical company, from September 2019 through February 2023, and also has served on the board of directors of Resource America, Inc., JeffBanks, Inc., TRM Corporation, Hudson United Bank, U.S. Healthcare Life Insurance Company, and Princeton Insurance Company. In addition, Mr. Kozlov was appointed by the President of the United States to be a member of the Advisory Committee for Trade Policy & Negotiations, serving in that role from 2002 to 2004. Reason for Nomination: Mr. Kozlov has extensive legal and business experience resulting from his partnerships at prominent law firms where he represented a variety of entities, including banks, insurance companies, and other financial institutions. He also has experience serving on boards of directors at multiple financial institutions and has substantive experience in all forms of general business matters.

TABLE OF CONTENTS

Proxy Summary

Proposal #1

Proposal #2

Proposal #3

Proposal #4

Other Matters

	Damian M. Kozlowski
	Director
	Age: 59 Director Since: 2016 Committees: None Other Public Boards: None			Damian M. Kozlowski has served as CEO and a director of The Bancorp, and as President of the Bank, since 2016. Mr. Kozlowski has more than 25 years of experience as a highly regarded financial services leader. Prior to joining The Bancorp in June 2016, Mr. Kozlowski served as CEO, President, and Director of Modern Bank, N.A. from 2010 to 2016. From 2007 to 2010, Mr. Kozlowski served as Chairman and CEO of Alpha Capital Financing Group, Inc., a private equity firm he founded. From 2000 through 2007, Mr. Kozlowski served in several executive capacities with Citigroup Private Bank as: CEO of its Global Private Bank (2005-2007); President of its U.S. Private Bank (2002-2005); Chief Operating Officer and Chief Financial Officer (“CFO”) (2001-2002); and Global Head of Business Development and Strategy (2000-2001). From 1998 to 1999, he was a Managing Director at Bank of America Securities, an investment bank. Mr. Kozlowski holds a Master of Business Administration degree in Finance from the Wharton School of the University of Pennsylvania and Master of Science and Bachelor of Arts degrees from Boston University. Reason for Nomination: Mr. Kozlowski has extensive experience in investment and commercial banking, wealth management, and private equity investment. Additionally, he has held numerous leadership positions in financial institutions, including his tenure with The Bancorp, and has a demonstrated record in improving both financial and regulatory performance.

	William H. Lamb
	Director
	Age: 84 Director Since: 2004 Independent Committees: Nominating and Governance and Compensation (Chair) Other Public Boards: None			William H. Lamb has served as a director of The Bancorp since 2004. Mr. Lamb is a founding partner of Lamb McErlane PC, a law firm. From January 2003 through January 2004, Mr. Lamb served as a Justice of the Pennsylvania Supreme Court. Mr. Lamb previously served as director and corporate secretary of JeffBanks, Inc. and Jefferson Bank until their acquisition by Hudson United Bank in 1999. Since 2004, Mr. Lamb has been appointed to the President’s Advisory Committee on the Arts, the Commonwealth of Pennsylvania’s Court of Judicial Discipline, and the Pennsylvania Elections Reform Task Force. Mr. Lamb also served as President Judge of the Pennsylvania Court of Judicial Discipline and on the Chester County Boy Scout Council. Reason for Nomination: Mr. Lamb has nearly fifty years of extensive experience as a director of public bank holding companies. Additionally, he has significant legal experience with respect to business and financial matters.

2024 PROXY STATEMENT

TABLE OF CONTENTS

Proxy Summary

Proposal #1

Proposal #2

Proposal #3

Proposal #4

Other Matters

	James J. McEntee III
	Director and Chair of the Board
	Age: 66 Director Since: 2000 Independent Committees: Executive (Chair) Other Public Boards: None			James J. McEntee III has served as Chair of the Board of The Bancorp since November 2021 and has served as a director of The Bancorp since 2000. Mr. McEntee has served as the Managing Principal of StBWell, LLC, an owner and operator of real estate since June 2010. From July 2016 to December 2022, Mr. McEntee served in a variety of senior executive roles, including as President and CFO, for a series of FinTech Acquisition special purpose acquisition companies, known as FinTech Acquisition Corp. and FinTech Acquisition Corp. II through FinTech Acquisition Corp. VI. In addition, Mr. McEntee was the CEO of Alesco Financial, Inc. from its incorporation in 2006 until its merger with Cohen & Company Inc. in December 2009, the Chief Operating Officer of Cohen & Company Inc. from March 2003 until December 2009, a managing director of Cohen & Company Inc., and the Vice-Chairman and Co-Chief Operating Officer of JVB Financial from December 2009 until October 2013. He was also a director of T-Rex Group, Inc., a provider of risk analytics software for investors in renewable energy, from November 2014 until January 2018. From 1990 through 1999 and 2000 to 2004, Mr. McEntee was a stockholder and of counsel, respectively, at Lamb McErlane PC. Mr. McEntee was previously a director of Pegasus Communications Corporation, a publicly held provider of communications and other services, and of several other private companies. Mr. McEntee served as a director of The Chester Fund, a nonprofit organization, from 2008 to June 2020, and served as its Chairman from July 2012 to January 2018. Reason for Nomination: Mr. McEntee has extensive experience in corporate law and financial institution management, as well as significant managerial experience in real estate, investments, and capital markets operations.

TABLE OF CONTENTS

Proxy Summary

Proposal #1

Proposal #2

Proposal #3

Proposal #4

Other Matters

	Daniela A. Mielke
	Director
	Age: 58 Director Since: 2019 Independent Committees: Risk, ESG, and Nominating and Governance (Chair) Other Public Boards: Nuvei (TSX: NVEI and NVEI.U) WisdomTree, Inc. (NYSE: WT)			Daniela A. Mielke has served as a director of The Bancorp since 2019. Ms. Mielke is Managing Partner of Commerce Technology Advisors, LLC, a privately held firm she founded in April 2016, which provides consulting services to technology, financial services, and private equity companies regarding organic and inorganic growth strategies including building payment businesses and using artificial intelligence. From 2018 to December 2020, Ms. Mielke served as the North American CEO of RS2 Inc., one of the leading providers of payment processing services in Europe and Asia Pacific, where she had responsibility for sales and marketing as well as product development and customer relationship management for the company’s operations in North America. From 2013 to 2016, Ms. Mielke was Chief Strategy and Product Officer at Vantiv, Inc., which was, at the time, the largest merchant acquirer in the United States. From 2010 to 2013, Ms. Mielke was the Vice President, Head of Global Strategy and Market Intelligence for PayPal Holdings, Inc. (NASDAQ: PYPL). Ms. Mielke co-founded A-Connect in 2001, a consulting firm focused on financial services and other consulting engagements, and rejoined in 2007 to establish and direct new operations for the West Coast and lead its global marketing function. From 2002 to 2007, Ms. Mielke served as Vice President of Product and Senior Vice President of Strategy and Market Intelligence at Visa International. From 1998 to 2002, Ms. Mielke was an Engagement Manager for McKinsey & Company, a worldwide management consulting firm. Since September 2022, Ms. Mielke has served on the board of directors of WisdomTree, Inc. (NYSE: WT), a New York-based exchange-traded fund and product sponsor, and asset manager. Since August 2020, Ms. Mielke has also served on the board of directors of Nuvei (TSX: NVEI and NVEI.U), a global payment technology provider. Ms. Mielke’s other board experience includes service on the board of directors of FTAC Athena Acquisition Corp., from February 2021 to February 2023, and service on the board of directors of FINCA International, a global non-governmental organization dedicated to alleviating poverty, from July 2018 to December 2023. Reason for Nomination: Ms. Mielke has significant experience as a senior officer of large payment processing companies, merchant acquiring companies, and payment network companies. She has also served as a technology and financial services consultant. This experience complements The Bancorp’s payments line of business as well as its focus on technology and the emerging fintech marketplace. Ms. Mielke also holds an NACD Directorship Certification. In addition, in November 2023, Ms. Mielke completed the NACD Cyber-Risk Oversight Program and earned a CERT Certificate in Cybersecurity Oversight, which was developed by NACD, Ridge Global, and the CERT division of the Software Engineering Institute at Carnegie Mellon University.

2024 PROXY STATEMENT

TABLE OF CONTENTS

Proxy Summary

Proposal #1

Proposal #2

Proposal #3

Proposal #4

Other Matters

	Stephanie B. Mudick
	Director
	Age: 68 Director Since: 2019 Independent Committees: ESG, Executive, and Risk (Chair) Other Public Boards: None			Stephanie B. Mudick has served as a director of The Bancorp since 2019. Ms. Mudick was Executive Vice President at JPMorgan Chase & Co. (NYSE: JPM) from 2008 through her retirement in 2018, where she also served as Head of Regulatory Strategy from 2010 through 2018. In that capacity, she managed the firm’s global regulatory agenda across all businesses and products. During this period, Ms. Mudick designed and drove the execution of that firm’s most significant regulatory deliverables, was central to the design and development of controls infrastructure, and managed conflicts of interest governance. From 2005 through 2007, she was Executive Vice President, Chief Administrative Officer, and Head of Consumer Operations of the Global Consumer Group at Citigroup, Inc. (NYSE: C), a business providing a wide array of banking, lending, insurance, and investment services to individual and small business consumers in over 50 countries. From 1993 to 2005, Ms. Mudick served in various roles in Citigroup, Inc.’s legal department, including Co-General Counsel and Corporate Secretary. At both JPMorgan Chase & Co. and Citigroup, Inc., Ms. Mudick served on senior management committees and regularly engaged with and advised their respective boards of directors and board committees. Ms. Mudick recently served on the board of directors of PacWest Bancorp from August 2022 until its merger with Banc of California, Inc. (NASDAQ: BANC) in 2023. She also serves on several not-for-profit boards, including HIAS and The Institute for International Education. Reason for Nomination: Ms. Mudick has extensive experience in bank regulatory matters as a senior regulatory officer and general counsel in major global banks and bank holding companies. She has extensive experience in consumer financial products, complementing her regulatory expertise with product expertise.

	Mark E. Tryniski
	New Director Nominee
	Age: 63 Director Since: N/A Independent Committees: N/A Other Public Boards: Community Bank System, Inc. (NYSE: CBU)			Mark E. Tryniski served as the President and Chief Executive Officer of Community Bank System, Inc. (NYSE: CBU), a financial holding company which provides community banking, employee benefits, wealth management, and insurance services, from August 2006 until his retirement at the end of December 2023. Following his retirement from Community Bank System, Inc., he continues to serve on its Board of Directors, which he first joined in 2006. Prior to serving as President and Chief Executive Officer of Community Bank System, Inc., from 2003 to 2006, Mr. Tryniski also held the positions of Chief Operating Officer and Chief Financial Officer. Prior to that time, Mr. Tryniski was a partner at PricewaterhouseCoopers LLP, where he gained a broad array of experience in numerous industries, including extensive experience in financial services. Mr. Tryniski has served on the Board of Directors of Pursuit BDC (formerly New York Business Development Corporation) since 2010 and also previously served on the Board of Directors of the New York Bankers Association for over fifteen years. From 2007 through 2022, Mr. Tryniski also served for fifteen years as a director of CONMED Corporation (NYSE: CNMD), a medical technology company, serving as the Chairman of the Board of Directors from 2014 to 2020. Reason for Nomination: Mr. Tryniski has significant experience regarding community banking and publicly traded companies which complements his extensive experience in finance, accounting, risk management, banking regulations, and corporate governance.

TABLE OF CONTENTS

Proxy Summary

Proposal #1

Proposal #2

Proposal #3

Proposal #4

Other Matters

Director Skills, Experience, and Diversity

Our Board believes that diversity, including differences in viewpoints, backgrounds, experiences, and other personal characteristics, is an important factor in Board oversight and considers this information when evaluating Board composition. As shown in the below skills and experience matrix, our director nominees have a set of skills and experience that we believe are relevant to the Company’s long-term strategy and success. Because the skills and experience matrix and board diversity matrix that follow are summaries, they do not include all of the qualifications, skills, attributes, experiences, and diversity that each director offers.

SKILLS & EXPERIENCE

BRADLEY

COHN

CREUZOT

KOZLOV

KOZLOWSKI

LAMB

MCENTEE

MIELKE

MUDICK

TRYNISKI

Banking and Financial Industry
Skill and experience in banking or the financial industry, with a practical understanding of banking-related protocols in connection with financials, credit, internal operations, and regulatory controls and requirements.

Payments, Fintechs, and Emerging Opportunities
Skill and experience in the payments and/or fintech marketplace, and emerging opportunities within banking and financial institutions.

Digital Technology
Skill and experience in using and implementing state-of-the-art technologies and methodologies, especially in the digital environment.

Finance and Accounting
Skill and experience related to understanding capital structures, financing, and investing activities, as well as financial reporting and internal controls.

Senior Leadership
Senior leadership skills and experience in public companies or any other private or non-profit corporate organizations, along with a well-developed understanding of corporate governance practices, internal corporate controls, and best practices as well as experience in human resources management.

[MISSING IMAGE: ic_roskmanagement-4c.jpg]

Risk Management
Skill and experience related to identifying, evaluating, and mitigating threats and other risks to complex organizations.

Marketing
Skill and experience in developing strategies to grow sales and market share through business development strategies, especially B2B strategies, as well as other brand and business development strategies.

Legal and Regulatory
Skill and experience working within organizations with complex legal issues and regulatory obligations as well as skill and experience in compliance and governmental relations.

Strategic Planning and Development
Skill and experience in mergers, acquisitions, and divestitures in the financial services industry, including experience navigating nascent companies and issues as well as skill in developing long-term strategic plans.

2024 PROXY STATEMENT

TABLE OF CONTENTS

Proxy Summary

Proposal #1

Proposal #2

Proposal #3

Proposal #4

Other Matters

The following Board Diversity Matrix is based on voluntary self-identification of each member of our Board as of March 31, 2024.

Board Diversity Matrix (As of March 31, 2024)
Total Number of Directors	10
	Female	Male
Part I: Gender Identity
Directors	3	7
Part II: Demographic Background
African American or Black	1	—
White	2	7

STANDARD FOR ELECTION OF DIRECTORS

In uncontested elections, or an election in which the number of nominees does not exceed the number of directors to be elected, director nominees receiving a majority of the votes cast will be elected. If an incumbent director fails to receive the required number of votes in an uncontested election, the director will tender his or her resignation to the Chair of the Board and the Nominating and Governance Committee for consideration. The Nominating and Governance Committee must consider any such resignation offer and, within 90 days following the certification of the stockholder vote, make a recommendation to the Board of Directors as to whether the director should serve. The Board of Directors must take action on the Nominating and Governance Committee’s recommendation within a reasonable period of time following the certification of the stockholder vote, and the Company must publicly disclose the Board’s decision. In contested elections, director nominees will be elected by the vote of a plurality of the votes cast.

If any nominee for director who is not an incumbent fails to receive a majority of votes cast in an uncontested election at a meeting of stockholders duly called and at which a quorum is present, such nominee will not be elected and will not take office. Except for Mr. Tryniski, all other Board of Director nominees are incumbents and previously served on the Board of Directors. If an incumbent director’s offer of resignation is accepted by the Board of Directors, or if a non-incumbent nominee for director is not elected, the Board of Directors may fill any resulting vacancy or may decrease the size of the Board of Directors pursuant to the Company’s Amended and Restated Bylaws (“Bylaws”).

It is the intention of the persons named in the ~~enclosed~~ proxy, in the absence of a contrary direction, to vote ~~for~~“FOR” the election of ~~all the current directors.~~each director nominee. Should any of the nominees become unable or refuse to accept nomination or election as a director, the persons named as proxies intend to vote for the election of such other person as the Nominating and Governance Committee of the Board of Directors may recommend. Alternatively, the Board of Directors may adopt a resolution to reduce the size of the Board of Directors. ~~The~~Each director nominee has indicated their willingness to serve on our Board, and the Board of Directors knows of no reason why any of the nominees might be unable or refuse to accept nomination or election. ~~There are no family relationships among the directors, nominees~~

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH NOMINEE.

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CORPORATE GOVERNANCE

DIRECTOR INDEPENDENCE

Pursuant to our Corporate Governance Guidelines and ~~executive officers~~Nasdaq listing standards, a majority of the ~~Company.~~

~~Following are summaries~~members of the ~~background, business experience~~Board must be independent. For a director to be considered independent, the Board must determine that the director meets the independence criteria of Nasdaq listing standards and ~~principal occupations~~the Company’s Director Independence Categorical Standards (the “Director Independence Standards”). The Board has determined that the following director nominees are independent: Mr. Bradley, Mr. Cohn, Mrs. Creuzot, Mr. Kozlov, Mr. Lamb, Mr. McEntee, Ms. Mielke, Ms. Mudick, and Mr. Tryniski. Mr. Kozlowski, as the CEO of the Company and President of the Bank, does not qualify as independent. In addition, in 2023, each member of the Audit Committee and the Compensation Committee met the heightened independence standards under Nasdaq rules to sit on those committees.

In making these determinations, the Board of Directors considers information from each of these director nominees concerning all their respective relationships with the Company and its affiliates and analyzes the materiality of those relationships. In considering the independence of Mr. Kozlov, the Board considered that Mr. Kozlov is a partner at Duane Morris, an international law firm, and that the Company paid amounts to Duane Morris for legal services during 2023, as described below under “Certain Relationships and Related Party Transactions.” The Board confirmed that these payments did not exceed the greater of $200,000 or 5% of Duane Morris’ consolidated gross revenues in the current ~~directors.~~

~~Daniel G. Cohen~~~~, age 51, currently~~fiscal year or any of the Company’s last three fiscal years and so did not preclude the Board from determining Mr. Kozlov to be independent under Nasdaq listing standards. The Board further determined that this relationship would not interfere with Mr. Kozlov’s exercise of independent judgment in carrying out his responsibilities as a director.

BOARD LEADERSHIP

Mr. McEntee, an independent director, serves as the ~~Chairman~~Company’s Chair of the Board and Mr. Kozlowski serves as its CEO and as a director. The ~~Bancorp, Inc.~~Company believes that the most effective leadership structure at the present time is to have separate Chair of the Board and CEO positions, because this allows the Board to benefit from having multiple knowledgeable voices bringing separate views and perspectives to its deliberations. During times at which the positions of Chair of the Board and CEO are combined, the Board may elect a Lead Independent Director.

The Chair’s specific duties and responsibilities are set forth in our Corporate Governance Guidelines and include the following principal responsibilities:

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Exercising leadership over the Board;

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Presiding over meetings of the Board;

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Reviewing and advising on information to be sent to the Board;

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Setting meeting agendas and schedules and determining, in consultation with the CEO and standing committees of the Board, whether there are major topics upon which the Board should focus at the meeting(s);

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Facilitating communication among directors; and

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Providing strategy and insight to the Company.

2024 PROXY STATEMENT

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BOARD COMMITTEES

The Board of Directors currently has six standing committees, each of which is described below. The responsibilities of the Audit, Compensation, Risk, Nominating and Governance, and Environmental, Social and Governance Committees are set forth in separate written charters. The committees on which directors currently serve, the chair of each committee, and the ~~head~~number of meetings held during 2023 are set forth below. Mr. Kozlowski did not serve on any committee during 2023.

BOARD MEMBER

AUDIT

COMPENSATION

RISK

NOMINATING AND
GOVERNANCE

EXECUTIVE

ESG

Michael J. Bradley

Matthew N. Cohn

Cheryl D. Creuzot

John M. Eggemeyer

Hersh Kozlov

William H. Lamb

James J. McEntee III

Daniela A. Mielke

Stephanie B. Mudick

Meetings held in 2023

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Chair

Member

Audit Committee

The Audit Committee is appointed by the Board of Directors to assist the Board in monitoring (a) the integrity of the Company’s financial statements, (b) the Company’s compliance with legal and regulatory requirements, (c) the independent auditor’s qualifications and independence, and (d) the performance of the Company’s internal audit function and independent auditors. The Audit Committee also prepares the report of the Audit Committee required to be included in the Company’s annual proxy statement by SEC rules. Each member of the Audit Committee meets the enhanced independence standards for Audit Committee members set forth in applicable Nasdaq rules, as well as those set forth in Rule 10A-3(b)(1) of the Exchange Act and in the Director Independence Standards. The Board of Directors has determined that Mr. Bradley qualifies as an “audit committee financial expert” as that term is defined in applicable SEC rules and regulations.

Compensation Committee

The Compensation Committee is appointed by the Board of Directors to carry out delegated responsibilities relating to the review and determination of executive and other compensation, including: (a) overseeing the Company’s executive compensation program, (b) evaluating and setting compensation for the Company’s CEO and other executive and senior officers and directors, (c) overseeing the evaluation of the CEO, and (d) overseeing the administration of the Company’s executive and other compensation plans. The Compensation Committee also prepares the report of the Compensation Committee required to be included in the Company’s annual proxy statement by SEC rules. Each member of the Compensation Committee has been determined by the Board of Directors to be independent under applicable Nasdaq rules and SEC rules and regulations, including the enhanced independence standards for compensation committee members under Nasdaq rules, as well as the standards set forth in the Director Independence Standards.

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Risk Committee

The Risk Committee is appointed by the Board of Directors to (a) oversee the Company’s enterprise risk management framework, including management’s efforts related to risk assessment and the implementation of risk-related policies, programs, and practices used in identifying, assessing, and managing Company risks, (b) evaluate and assess the Company’s business strategies and plan from an enterprise risk perspective, (c) oversee the establishment of the Company’s risk appetite through the approval of risk management standards and metrics related to enterprise-wide risks facing the Company, and (d) oversee such other risk-related matters as the Board may direct. All of the members of the Risk Committee have been determined by the Board of Directors to be independent under applicable Nasdaq rules and SEC rules and regulations, as well as the Director Independence Standards.

Nominating and Governance Committee

The Nominating and Governance Committee is appointed by the Board of Directors to (a) assist the Company and the Board of Directors in maintaining an effective and knowledgeable Board of Directors by identifying individuals qualified to become directors and recommending to the Board of Directors the director nominees for election at the next annual meeting of stockholders, (b) review the Board’s committee composition and make membership recommendations as needed, and (c) address other governance-related matters as set forth in its charter or as may be requested by the Board of Directors. All of the members of the Nominating and Governance Committee have been determined by the Board of Directors to be independent under applicable Nasdaq rules and SEC rules and regulations, as well as the Director Independence Standards.

Executive Committee

The Executive Committee generally has the authority to act in lieu of the Company’s Board of Directors in between meetings of the Board in limited circumstances where certain matters need to be addressed quickly. All of the members of the Executive Committee have been determined by the Board of Directors to be independent under applicable Nasdaq rules and SEC rules and regulations, as well as the Director Independence Standards.

ESG Committee

The Environmental, Social, and Governance Committee (the “ESG Committee”) is appointed by the Board of Directors to oversee the Company’s ongoing commitment to environmental, social and governance principles related to the Company’s business strategies and commercial activities. The ESG Committee’s responsibilities include (a) overseeing the work of a dedicated management ESG Working Group (comprised of key members of senior management) in the development of the Company’s overall ESG strategy, (b) monitoring management’s efforts to identify and mitigate current and emerging ESG-related issues and risks that may affect the business, operations, performance, or public image of the Company, and (c) reviewing and evaluating the Company’s ongoing ESG-related performance and risk profile. All of the members of the ESG Committee have been determined by the Board of Directors to be independent under applicable Nasdaq rules and SEC rules and regulations, as well as the Director Independence Standards.

RISK OVERSIGHT

The Board is actively involved in overseeing the management of risks that could impact the Company. This oversight is conducted primarily through the Board’s standing committees, but the full Board retains responsibility for general oversight.

During 2023, four committees assisted the Board of Directors with risk oversight: (i) the Risk Committee; (ii) the Audit Committee; (iii) the ESG Committee; and (iv) the Compensation Committee. ~~He has held both positions since 1999. In addition, he~~These committees each perform risk-related oversight functions on behalf of the Board and report regularly to the full Board, which also considers the Company’s entire risk profile, including additional strategic and reputational risks.

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The Risk Committee meets at least quarterly, and while the Board of Directors and all its committees are sensitive to risks related to the Company and its operations, the Risk Committee is ~~Chairman~~primarily responsible for overseeing the Company’s enterprise risk management framework on behalf of the Board of ~~Directors~~Directors. The Company’s Chief Risk Officer meets at least quarterly with the Risk Committee to discuss potential risk or control issues that are monitored through the Company’s enterprise risk management framework, and other key control function officers of the Company also regularly report to the Risk Committee. In addition, the Risk Committee provides oversight of the Company’s ~~wholly-owned subsidiary,~~cybersecurity and information security framework. The ~~Bancorp Bank,~~Risk Committee regularly receives reporting from the Company’s Chief Information Officer and ~~Chairman of~~Chief Information Security Officer regarding the ~~Bank’s Executive Committee. He is also employed by~~cybersecurity threat environment and cybersecurity risk mitigation efforts, and reviews and approves the ~~Bank in a senior advisory role within~~Cyber Risk Management Program Policy and Information Security Program Policy at least annually.

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The Audit Committee meets six times per year and at least once each quarter, and its ~~CRE lending~~responsibilities include discussing with management the Company’s major financial risk exposures and ~~asset management group. Mr. Cohen had served as~~steps taken to monitor and control such exposures, overseeing the ~~Chief Executive Officer~~accounting and financial reporting processes of the Company and the audits of the financial statements of the Company, ensuring compliance with legal and regulatory requirements, overseeing the Company’s internal audit function, and evaluating the effectiveness of internal and external audit efforts.

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The ESG Committee meets at least four times a year and oversees the Company’s management-level ESG Working Group in the development of the Company’s ESG strategy and, in collaboration with the ESG Working Group, makes recommendations to the Board regarding the Company’s ESG strategy. Through regular reports from the ESG Working Group, the ESG Committee evaluates the Company’s ongoing ESG-related risk profile and oversees management’s efforts to monitor current and emerging ESG-related risks.

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The Compensation Committee meets at least four times a year, and its ~~creation~~responsibilities include reviewing the Company’s incentive compensation arrangements to determine whether they encourage excessive risk-taking and annually reviewing the relationship between compensation and risk management policies.

These committees regularly receive reports from management regarding the Company’s assessment of risks and the adequacy and effectiveness of internal control systems. Through interaction with the Company’s senior management, these committees oversee strategic risk, reputational risk, credit risk, interest rate risk, liquidity risk, price risk, operational risk, compliance risk, compensation-related risk, cybersecurity risk, and ESG risk. While the ESG Committee and the Compensation Committee serve important roles, the Board has allocated a majority of its risk oversight responsibilities to the Audit Committee and the Risk Committee.

While the Board of Directors oversees the Company’s risk management across the enterprise, senior management at the Company and the Bank are responsible for risk management processes and the day-to-day implementation of risk management programs. The Company’s Enterprise Risk Management Committee, comprised of senior management, meets at least eight times per year and addresses various risks, controls, and related monitoring. While the Board of Directors believes that this division of responsibility is the most effective approach for addressing the risks facing the Company, it will continue to evaluate this structure on a regular basis, recognizing that different structures may be appropriate in ~~1999 through 2001. Since January 2021, Mr. Cohen has~~different situations faced by the Company.

BOARD MEETINGS

The Board of Directors held a total of six meetings during 2023. Each director attended all of the meetings held by the Board and at least 75% of the meetings of the committees on which he or she served and was eligible to attend during 2023. Pursuant to our Corporate Governance Guidelines, all directors are expected to attend the annual meeting of stockholders of the Company and all directors then serving attended the Company’s 2023 annual meeting of stockholders.

Director Nomination Selection Process

The Nominating and Governance Committee will consider candidates for nomination as ~~Chairman~~a director recommended by stockholders, directors, officers, third party search firms, and other sources. The procedures for nominations by stockholders are described below in a section titled “Stockholder Proposals and Nominations for the 2025 Annual Meeting.” The Company describes how it addresses such submissions in the “Submission of ~~FTAC Parnassus Acquisition Corporation, a SPAC. Since February 2018, Mr. Cohen has served as~~Director-Nominee Candidate to the ~~Chairman~~Nominating and Governance Committee” section of the Corporate Governance Guidelines which may be accessed at https://investors.thebancorp.com/corporate-information/governance-documents/default.aspx. In evaluating candidates, the Nominating and Governance Committee considers the attributes of the candidate (including independence, skills, experience, diversity, and age), legal and regulatory requirements, and the needs of the Board of Directors, and will review all candidates in the same manner, regardless of the source of the recommendation. In 2023 and 2024, Trewstar Corporate Board Services (“Trewstar”), a third-party search firm specializing in the placement of candidates on corporate boards of directors, was retained to assist with identifying potential nominees to the Board and to perform initial due diligence on such candidates. One of the candidates identified by Trewstar was Mr. Tryniski. Mr. Tryniski was subsequently recommended by the Nominating and Governance Committee to the Board to be nominated as a director of the Company.

The Nominating and Governance Committee has not adopted specific minimum qualifications or specific qualities or skills that must be met by a Nominating and Governance Committee-recommended nominee. The Board will consider the overall experience and expertise represented by the Board as well as the qualifications of each candidate. During the evaluation process, the Nominating and Governance Committee and the Board will take the following standards into account:

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At least a majority of the Board must be comprised of ~~Managers~~“independent” directors determined in accordance with the requirements of ~~Cohen & Company, LLC,~~Nasdaq rules, the Director Independence Standards, and ~~has, since September 2013, served~~any other additional “independence” standards established by the Board from time to time, as well as requirements and standards set by the ~~President~~Federal Reserve Board and ~~Chief Executive~~the Office of the ~~European Business~~Comptroller of ~~Cohen~~the Currency.

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Candidates should be capable of working in a collegial manner with persons of different educational, business, and ~~Company Inc.(NYSE American: COHN),~~cultural backgrounds and should possess skills and expertise that complement the attributes of the existing directors.

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Candidates should represent a ~~publicly-traded financial services company~~diversity of viewpoints, backgrounds, experiences, and other demographics, as well as ties to the Company’s markets.

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Candidates should demonstrate notable or significant achievement in one or more pertinent areas of business expertise that would benefit the Company.

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Candidates should be individuals of the highest character and integrity.

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Candidates should be free from any conflict of interest that would interfere with ~~approximately $2.65 billion in assets under management~~their ability to properly discharge their duties as ~~of September 30, 2020, and as President,~~ a director or would violate any applicable law or regulation.

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Candidates should be capable of devoting the necessary time to discharge their duties, taking into account memberships on other Boards and other responsibilities.

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Candidates should have the ~~Chief Investment Officer~~desire to represent the interests of Cohen & Company Inc.’s indirect majority owned subsidiary, Cohen & Company Financial Limited (formerly known as EuroDekania Management Limited), a Financial Conduct Authority regulated investment advisorall stockholders.

The Nominating and ~~broker dealer focusing on~~Governance Committee seeks to ensure that the ~~European capital markets. Mr. Cohen served as Vice Chairman~~membership of the Board of Directors and of the Board of Managers of Cohen & Company, LLC from September 2013 to February 2018. Mr. Cohen served as the Chief Executive Officer and Chief Investment Officer of Cohen & Company Inc. from December 2009 to September 2013 and as the Chairmaneach committee of the Board of Directors ~~from October 2006 to September 2013. Mr. Cohen served as the executive Chairman of Cohen & Company Inc. from October 2006 to December 2009. In addition, Mr. Cohen served as the Chairman~~satisfies all relevant Nasdaq rules, applicable laws, and regulations and all requirements of the ~~Board of Managers of Cohen & Company, LLC from 2001~~Company’s governance documents. The Nominating and Governance Committee seeks to September 2013, as the Chief Investment Officer of Cohen & Company, LLC from October 2008 to September 2013, and as Chief Executive Officer of Cohen & Company, LLC from December 2009 to September 2013. Mr. Cohen served as the Chairman and Chief Executive Officer of J.V.B. Financial Group, LLC (formerly C&Co/PrinceRidge Partners LLC), Cohen and Company, Inc.’s indirect broker dealer subsidiary (“JVB”), from July 2012 to September 2013. Mr. Cohen has served as the Chief Executive Officer of FinTech Acquisition Corp. IV, a special purpose acquisition company (SPAC), since May 2019, FinTech Acquisition Corp. V, a SPAC, since October 2020, and FTAC Hera Acquisition Corp., a SPAC, since January 2021. Mr. Cohen previously served as a director and Chief Executive Officer of FinTech Acquisition Corp. II from May 2015 until July 2018, and as Chief Executive Officer of FinTech Acquisition Corp. III from March 2017 to October 2020. He has also served as Chairman of INSU Acquisition Corp. III, a SPAC, since October 2020. He previously served as Chairman of Insurance Acquisition Corp., a SPAC, from December 2018 to October 2020, and INSU Acquisition Corp. II, a SPAC, from January 2019 to February 2021. Mr. Cohen previously served as Chief Executive Officer of RAIT Financial Trust, a real estate finance company focused on the commercial real estate industry, from December 2006 when it merged with Taberna Realty Finance Trust to February 2009 and served as a trustee from the date RAIT acquired Taberna in 2006 until his resignation from that position in February 2010. Mr. Cohen was Chairman of the board of trustees of Taberna Realty Finance Trust from its inception in March 2005 until December 2006 and its Chief Executive Officer from March 2005 to December 2006. Mr. Cohen served as a director of Star Asia, a joint venture investing in Asian commercial real estate, from February 2007 to February 2014 and as a director of Muni Funding Company of America, LLC, a company investing in middle-market non-profit organizations, from April 2007 to June 2011. Mr. Cohen is a member of the Academy of the University of Pennsylvania, a member of the Visiting Committees for the Humanities and a member of the Paris Center of the University of Chicago. Mr. Cohen is also a Trustee of the List College Board of the Jewish Theological Seminary, a member of the board of the Columbia Global Center in Paris, a Trustee of the Paideia Institute and a Trustee of the Arete Foundation.

~~Walter T. Beach~~, age 54, has been a director of The Bancorp, Inc. and the Bank since 1999. Mr. Beach has served as Managing Director of Beach Investment Counsel, Inc., an investment management firm, since 1997. Previously, from 1993 to 1997, Mr. Beach was a Senior Analyst and Director of Research at Widmann, Siff and Co., Inc., an investment management firm where, beginning in 1994, he was responsible for the firm’s investment decisions for its principal equity product. Before that, he was an associate and financial analyst at Essex Financial Group, a consulting and merchant banking firm, and an analyst at Industry Analysis Group, an industry and economic consulting firm. Since December 2020, he has been a member of the board of INSU Acquisition Corp. III, a SPAC, and he also currently serves on the board of directors of IG Wines, an internationally-focused company in the fine wines and spirits trade. From 2005 to 2020, Mr. Beach served as a director of Exantas Capital Corp., now known as ACRES Commercial Realty Corp. (NYSE: ACR), a publicly-traded real estate investment trust. Mr. Beach also served on the board of directors of FinTech I from November 2014 until July 2016, and also served on the board of directors of FinTech II from May 2015 until July 2018. Mr. Beach also served as a director of Institutional Financial Markets, Inc. and its predecessor, Cohen & Company, a publicly-traded financial services company specializing in credit related fixed income investments, from December 2009 to 2013.

~~Michael J. Bradley~~, age 76, has been a director of The Bancorp, Inc. and the Bank since 2005. Since August 2015 he has served as the lead independent director of the Board of Directors. From 1998 to 2014, Mr. Bradley was a co-owner and Managing Director of BF Healthcare, Inc., a supplier of physician services to hospitals and assisted living facilities. Mr. Bradley has served on the Board of Directors of Resource America, Inc., a specialized asset management company, since 2005, and SourceCorp, a provider of business outsourcing solutions, since 1996. Mr. Bradley has served as Chief Executive Officer of several university hospitals, including Columbia Presbyterian Medical Center and Thomas Jefferson University Hospital. Previously, Mr. Bradley served as Chairman of First Executive Bank, and as Vice Chairman of First Republic Bank. Mr. Bradley is a certified public accountant.

~~John C. Chrystal~~, age 63, served as Interim Chief Executive Officer of The Bancorp, Inc., and President of the Bank from January 2016 to June 2016; and he has served as a Director of The Bancorp and the Bank since 2013. Mr. Chrystal’s service as Interim Chief Executive Officer did not disqualify his qualification as an independent Director. In April 2017, the Board of Directors of The Bancorp, Inc. named Mr. Chrystal as Vice Chairman. Mr. Chrystal has served as a director of MCAP Acquisition Corp, a SPAC, since February 2021. Mr. Chrystal has served as a director INSU Acquisition Corp. III, a SPAC, since December 2020, and previously served as a director of Insurance Acquisition Corp. from March 2018 to October 2020, as a director of INSU Acquisition Corp. II from September 2020 to February 2021. Mr. Chrystal has served as an independent director of MoneyLion, Inc., a privately held financial wellness, membership based mobile banking, and consumer lending platform, since November 2016; an independent director of Regatta Loan Management LLC, a privately held, SEC-registered Investment Adviser, since 2015; and an independent director of the Trust for Advised Portfolios, a mutual fund series trust focused on multiple asset classes, since 2010. Mr. Chrystal was an independent director of Morgan Stanley Derivative Products, Inc., an entity providing credit enhancement for select derivative transactions, from 2010 to 2017. Mr. Chrystal was an independent director of Javelin Mortgage Investments, Inc., a mortgage real estate investment trust, from 2012 through its sale in 2016. From 2009 to 2012, Mr. Chrystal was a Managing Member of Bent Gate Advisors, LLC, a firm providing strategic advice to financial institutions; from 2005 through 2008 was the Chief Risk Officer of DiMaio Ahmad Capital, an investment management firm focused on corporate credit markets, and from 1993 to 2005 was a Managing Director with multiple Credit Suisse entities, with oversight of asset management and financial product functions.

~~Matthew N. Cohn~~, age 51, has been a director of The Bancorp, Inc. and the Bank since 1999. Mr. Cohn founded and serves as Vice Chairman of The ASI Show, a leading producer of trade shows throughout the country and the recipient of prestigious awards, including the INC 500 Award twice. In addition, since 1992, Mr. Cohn has been the Chairman of ASI Computer Systems, and the Vice Chairman of the Advertising Specialty Institute, a SAAS, technology, and media company and a multi-year winner of the “Best Place to Work” award. Mr. Cohn has served on the international board of YPO (the Young Presidents’ Organization). Mr. Cohn was Chair of YPO’s International Event Committee. He was the recipient of YPO’s “Best of the Best” international event award in 2019. Mr. Cohn was the Chief Executive Officer of the Medical Data Institute as well as a past board member of The Society of Independent Show Organizers and Changing Attitudes, Decisions and Environments for Kids (CADEKids). Mr. Cohn is currently on the Global Mission Board for JDRF (the world’s largest charitable funder of diabetes research) and serves on the International Talent and Compensation Committee of the Board. Mr. Cohn is the immediate past President of the Board of the Eastern Pennsylvania Chapter of JDRF.

~~John M. Eggemeyer~~, age 74, has been a director of The Bancorp, Inc. and the Bank since August 2016. Mr. Eggemeyer is a Founder and Managing Principal of Castle Creek® Capital LLC which has been an investor in the banking industry since 1990. The firm is currently one of the most active investors in community banking with in excess of $900 million in assets under management in private equity. Mr. Eggemeyer has over 40 years of experience in the banking industry and has been involved in more than 75 bank acquisitions. In 2006, the ~~American Banker~~ honored Mr. Eggemeyer as “Community Banker of the Year” for his success as a builder of community banking companies. Prior to founding Castle Creek®, Mr. Eggemeyer spent nearly 20 years as a senior executive with some of the largest banking organizations in the U.S. with responsibilities across a broad spectrum of banking activities. Mr. Eggemeyer has served as the Chairman of PacWest Bancorp since its formation in 2000, is a Board member of Northpointe Bancshares, Inc. and was a founder and Director of Guaranty Bancorp. Previously, he was Chairman and Chief Executive Officer of White River Capital and a Board member of TCF Financial Corporation, Western Bancorp and American Financial Realty. Mr. Eggemeyer’s civic and philanthropic efforts have been focused in the areas of improving the quality of instruction in education and expanding educational opportunities for lower income students. He was a founder and past President of the Rancho Santa Fe Community School Endowment and was a member of the Rancho Santa Fe School Site Selection Committee. He also helped establish the Minnesota Charter of A Better Chance, a national organization committed to creating improved educational opportunities for minority high school students. Mr. Eggemeyer is a Life Trustee of Northwestern University where he serves on the Finance and Investment Committees and is a past Trustee of the Bishop’s School of La Jolla, California and the Parent Advisory Board at Stanford University. Mr. Eggemeyer holds a Bachelor of Science degree from Northwestern University and an M.B.A. from the University of Chicago.

~~Hersh Kozlov~~, age 73, has been a director of The Bancorp, Inc. and the Bank since 2014. He has also served as a director of vTv Therapeutics, Inc. a biopharmaceuticals company, since September 2019. He has been a partner at Duane Morris LLP (An international law firm) since 2009. Previously, he was a partner at Wolf, Block, Schorr and Solis-Cohen LLP (a law firm) from 2001 to 2009. Mr. Kozlov served as a member of the board of directors of Resource America, Inc. and was previously a member of the board of directors of JeffBanks, Inc., TRM Corporation, Hudson United Bank, US Healthcare Life Insurance Company, and Princeton Insurance Company. Mr. Kozlov has also served as counsel to the board of directors of US Healthcare, Inc. and was appointed by the President of the United States to be a member of the Advisory Committee for Trade Policy & Negotiations, serving in that role from 2002 to 2004.

~~Damian M. Kozlowski~~, age 56, serves as Chief Executive Officer of The Bancorp, Inc., President of the Bank, and a Director of the Company and the Bank. Mr. Kozlowski joined The Bancorp on June 1, 2016, after having served, since 2010, as Chief Executive Officer, President, and Director of Modern Bank, N.A. From 2008-2009, Mr. Kozlowski served as Chief Executive Officer of Alpha Capital Financing Group, Inc., a private equity firm he founded. From 2000 through 2006, Mr. Kozlowski served in executive capacities with Citigroup Private Bank; as the CEO of its Global Private Bank (2005-2006); President of its US Private Bank (2002-2005); Chief Operating Officer and Chief Financial Officer (2001-2002); and Global Head of Business Development and Strategy (2000-2001). Previously, from 1998-1999, he was a Managing Director of Bank of America Securities, an investment bank.

~~William H. Lamb~~, age 78, has been a director of The Bancorp, Inc. and the Bank since 2004. Mr. Lamb is a founding partner of Lamb McErlane PC. From January 2003 through January 2004, Mr. Lamb served as a Justice of the Pennsylvania Supreme Court and is the only former Pennsylvania Supreme Court Justice currently in practice. Mr. Lamb has been recognized as a Top 100 Pennsylvania Super Lawyer for appellate law and as a Pennsylvania Super Lawyer since 2005. Mr. Lamb previously served as director and corporate secretary of JeffBanks, Inc. and Jefferson Bank until their acquisition by Hudson United Bank in 1999. Since 2004, Mr. Lamb has been appointed to the President’s Advisory Committee on the Arts, the Commonwealth of Pennsylvania’s Court of Judicial Discipline, and the Pennsylvania Elections Reform Task Force. Mr. Lamb also served as President Judge of the Court of Judicial Discipline and on the Chester County Boy Scout Council.

~~James J. McEntee III~~, age 63, has been a director of both The Bancorp, Inc. and the Bank since 2000. Mr. McEntee has been President and Secretary of FinTech Acquisition Corp. IV, a SPAC, since May 2019, FinTech Acquisition Corp. V, a SPAC, since June 2019, and FinTech Acquisition Corp. VI, a SPAC, since November 2020. He previously served as President and Chief Financial Officer of FinTech Acquisition Corp. III, a SPAC, from March 2017 to October 2020. He previously served as Chief Financial Officer and Chief Operating Officer of FinTech Acquisition Corp., a SPAC, until July 2016, and served as President and Chief Financial Officer of FinTech Acquisition Corp. II, a SPAC, until July 2018. Mr. McEntee ~~has served as the Managing Principal of StBWell, LLC, an owner and operator of real estate, since June 2010.~~ Mr. McEntee was the Chief Executive Officer of Alesco Financial, Inc. from its incorporation in 2006 until its merger with Cohen & Company in December 2009 and was the Chief Operating Officer of Cohen & Company from March 2003 until December 2009 and was a managing director of Cohen & Company Inc. and was the Vice-Chairman and Co-Chief Operating Officer of JVB Financial through October 2013. He was also a director of T-Rex Group, Inc., a provider of risk analytics software for investors in renewable energy, from November 2014 until January 2018. From 1990 through 1999, Mr. McEntee was a stockholder at Lamb McErlane, PC, and from 2000 until 2004 was of counsel to Lamb McErlane. Mr. McEntee was previously a director of Pegasus Communications Corporation, a publicly held provider of communications and other services, and of several other private companies. ~~Mr. McEntee served as a director of The Chester Fund, a nonprofit organization, from 2008 to June 2020, and served as its Chairman from July 2012 to January 2018.~~

~~Daniela A. Mielke~~~~, age 55,~~ ~~has been a director of both The Bancorp, Inc. and the Bank since August 2019.~~ Ms. Mielke is Managing Partner of Commerce Technology Advisors, LLC, a privately held firm which she founded in April 2016, and which provides consulting services to technology, financial services and private equity companies on organic and inorganic growth strategies including building payment businesses and using artificial intelligence. From 2018 to December 2020, ~~Ms. Mielke~~ served as the North American CEO of RS2 Inc., one of the leading providers of payment processing services in Europe and Asia Pacific. She had responsibility for sales and marketing as well as product development and customer relationship management for the company’s operations in North America. From 2013 to 2016 Ms. Mielke was Chief Strategy and Product Officer at Vantiv, Inc., which was at the time the largest merchant acquirer in the US. From 2010 to 2013 Ms. Mielke was the VP, Head of Global Strategy and Market Intelligence for PayPal Inc. Ms. Mielke co-founded A-Connect in 2001, a consulting firm which provides financial services and other consulting and rejoined in 2007 to establish and direct new operations for the West Coast and lead its global marketing function. From 2002 to 2007 Ms. Mielke successively served as VP of Product and SVP of Strategy and Market Intelligence at Visa International. From 1998 to2002, Ms. Mielke was an Engagement Manager for McKinsey & Company, a worldwide management consulting firm. Since February 2021, she has served as a member of the board of directors of FTAC Athena Acquisition Corp., a SPAC. She also currently serves as a member of the board of FINCA International, a global NGO dedicated to alleviating poverty, and Nuvei (TSX: NVEI and NVEI.U), a global payment technology provider. Ms. Mielke is also a strategic advisor to Machinify, an artificial intelligence platform company, and Linquineq, a blockchain company focused banking solutions.

~~Stephanie B. Mudick~~~~, age 65,~~ ~~has been a director of both The Bancorp, Inc. and the Bank since August 2019. Ms. Mudick~~ was Executive Vice President of JPMorgan Chase from 2008 through 2018, where she also served as Head of Regulatory Strategy from 2010 through 2018. In that capacity, she managed the firm’s global regulatory agenda across all its businesses and products. During this period, Ms. Mudick designed and drove the execution of that firm’s most significant regulatory deliverables, was central to the design and development of controls infrastructure and managed conflicts of interest governance. From 2005 through 2007 she was EVP, CAO and Head of Consumer Operations of the Global Consumer Group at Citigroup, a business providing a wide array of banking, lending, insurance and investment services to individual and small business consumers in over 50 countries. From 1993 to 2005 Ms. Mudick served in various roles in Citigroup’s legal department including Co-General Counsel and Corporate Secretary. At both JPMorgan Chase and Citigroup, she served on senior management committees and regularly engaged with and advised their respective Boards of Directors and Board Committees. Ms. Mudick has previously served as a director of two public company Boards: The Student Loan Corporation (NYSE: STU) and Ixe Grupo Financiero (BMV:IXE), and several not-for-profit Boards, including City Year New York, which she chaired for six years, and the Institute for International Education.

~~Mei-Mei H. Tuan~~, age 54 has been a director of both The Bancorp, Inc. and the Bank since 2013. Ms. Tuan is the co-founder and co-owner of Notch Partners LLC, a firm providing leadership capital and managed-led buyout strategies exclusively for institutional private equity funds. Ms. Tuan is also a founder and the Chief Executive Officer of Phoenyx Partners LLC, a boutique search firm based in New York. Ms. Tuan has served as a director of FinTech Olympus Acquisition Corp., a SPAC, since August 2020, FTAC Athena Acquisition Corp., a SPAC, since February 2021, and FTAC Hera Acquisition Corp., a SPAC, since March 2021. She also served, from August 2018 until October 2020, as a director of FinTech Acquisition Corp. III, a SPAC. As an investment banker with Goldman Sachs, BankAmerica and BankAustria, Ms. Tuan led domestic and international transactions in project finance, mergers and acquisitions, real estate, syndications and sale leasebacks. Ms. Tuan’s operating experience includes serving as Chief Financial Officer and Chief Operating Officer at the Sierra Foundation, from 1996 through 1997, and the San Francisco Food Bank, from 1997 through 1998. Ms. Tuan is an active board member of Gorilla Commerce, Inc., the Clara Maass Medical Center and its Foundation, The Harvard Business School Asian-American Alumnae Association and Montclair Kimberley Academy. In the recent past, she has served on the Boards of Friends, Thirteen (WNET), the Museum of Chinese in America in New York City (Co-Chair), the Wellesley College Alumnae Association, the New Jersey Women’s Forum, the Mid-Manhattan Performing Arts Foundation, ~~Montclair Kimberley Academy~~ ~~and the New Jersey Network (NJN). Ms. Tuan is also a current board member of the Committee of 100, an organization that addresses issues concerning Sino-U.S. relations.~~

The Board of Directors has not adopted specific minimum qualifications for service on the board, but rather has established a set of standards as set forth in the Board’s Corporate Governance Guidelines. These standards may be accessed at https://investors.thebancorp.com/corporate-information/governance-documents/default.aspx and are summarized below. The Board of Directors seeksachieve a mixture of skills that are ~~relevant~~related to the Company’s business. The nature of the specific qualifications, qualities, or skills that the Nominating and Governance Committee may look for in any particular director nominee depends on the qualifications, qualities, and skills of the rest of the directors at the time of any vacancy on the Board of Directors.

CORPORATE GOVERNANCE MATERIALS

The following policies, charters, and other corporate governance materials are available on the “Investor Relations” page of the Company’s corporate website at https://investors.thebancorp.com/corporate-information/governance-documents/default.aspx:

■

Code of Ethics and Business Conduct (the “Code of Business Conduct”) which applies to all of our employees and incorporates Additional Ethics Guidelines for Employees with Financial Reporting Responsibilities, applicable to our principal executive officer and senior financial officers;

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Corporate Governance Guidelines;

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Director Independence Standards;

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Insider Trading Policy; and

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Charters of the Audit Committee, the Compensation Committee, the Nominating and Governance Committee, the Risk Committee, and the ESG Committee.

Information on our website is not incorporated into or a part of this Proxy Statement. Copies of these documents are available, free of charge, upon written request to: The Bancorp, Inc., Attention: Investor Relations, 409 Silverside Road, Suite 105, Wilmington, Delaware 19809. The Company will satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of the Code of Business Conduct by posting such information on the Company’s website.

2024 PROXY STATEMENT

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STOCKHOLDER ENGAGEMENT

VALUES THAT DRIVE ENGAGEMENT

We seek to actively engage with our stockholders and recognize the benefits of this interaction. We engage with stockholders throughout the year to:

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Provide visibility and transparency into our business, our performance, and our governance practices: Certain of the financial metrics and other targets utilized by the Company and Compensation Committee to assess performance and determine incentive compensation are described in our investor presentations which can be accessed at https://investors.thebancorp.com/presentations/default.aspx.

■

Discuss with our stockholders the issues that are important to them, hear their expectations for us, and share our views: The Company’s CEO and CFO host quarterly telephone calls in which all stockholders may participate, and which includes a question and answer session.

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Assess emerging issues that may affect our business, inform our decision making, enhance our corporate disclosures, and help shape our practices: Notwithstanding approximately 96% approval for the advisory vote on compensation received at the Company’s 2023 annual meeting, executive management reached out to stockholders to provide input on executive compensation or any topic they wished to discuss. The Company’s Board of Directors and management value direct interaction and communication with stockholders. We encourage stockholder communication to discuss compensation or any other topics of importance.

HOW WE ENGAGE

In addition to quarterly telephone calls in which all stockholders may participate, we provide institutional investors with many opportunities and events to provide feedback to our Board and senior management. We participate in:

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Formal events including industry and finance investor conferences;

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One-on-one sessions; and

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Group meetings throughout the year.

In 2023, senior management held more than 50 meetings and conference calls with most of the Company’s major stockholders, although some investors have a policy of not meeting directly with management. We use these meetings to obtain feedback from our stockholders including our business model, performance, corporate governance, compensation practices, and other investor topics.

The CEO, CFO, and the Bank’s Head of Fintech Solutions are the Company’s primary representatives who meet with investors. The CFO addresses outreach relating to CEO compensation. In 2023, these officers met with stockholders owning over 50% of the Company’s stock. A chart detailing the specific stockholder recommendations made and corresponding steps to implement pay for performance and other governance, is presented under “Stockholder Input and Company Actions” on page 40 of this Proxy Statement.

COMMUNICATIONS WITH THE BOARD

Stockholders, employees, and others who wish to communicate with the Board of Directors may do so by sending their correspondence to The Bancorp, Inc., Attention: Paul Frenkiel, Secretary, 409 Silverside Road, Suite 105, Wilmington, Delaware 19809. The mailing envelope must contain a clear notation indicating that the enclosed letter is a “Stockholder-Board Communication.” All such letters must identify the author as a ~~bank holding company~~stockholder of the Company and clearly state the intended recipients, which may be the full Board or individual members of the Board. The Secretary will make copies of all such letters and circulate them to the appropriate director or directors. The Secretary or the secretary of the designated Board committee may sort or summarize the communications as appropriate. The Secretary has been authorized to screen commercial solicitations and materials which pose security risks, are unrelated to the business or governance of the Company or are otherwise inappropriate.

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DIRECTOR COMPENSATION

The Compensation Committee also oversees an annual compensation evaluation of the Board of Directors. The Company’s peer group of 20 companies was evaluated to confirm that Board of Director compensation fell within appropriate peer ranges.

DIRECTOR COMPENSATION TABLE

The following table provides information concerning the compensation of the Company’s independent directors for 2023. The compensation of Mr. Kozlowski, the CEO of the Company and the ~~business~~President of the Bank, is not discussed in the Director Compensation Table; rather, his compensation is discussed in the Compensation Discussion and Analysis section given Mr. Kozlowski is a named executive officer. Mr. Kozlowski does not receive any additional compensation for serving as a member of the Board of Directors.

Each independent director receives an annual cash retainer of $75,000 and additional fees for serving on committees as follows:

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The Chair of the Audit Committee receives $10,000 annually;

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Chairs of other committees receive $5,000 annually;

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Audit Committee members receive $5,000 annually;

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Other committee members receive $2,500 annually for each committee on which they serve; and

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Additionally, except for committee-related fees, directors may elect to take some or all of their annual cash compensation amounts in the form of stock awards.

The non-executive Board Chair receives an additional $70,000 per year. In addition to the $75,000 retainer, the committee-related fees, and Board Chair fees described above, the Compensation Committee granted equity in the form of restricted stock units (“RSUs”) with a grant date market value of $90,000 to each independent director in fiscal year 2023 in order to align the directors’ interests with other stockholders.

NAME	FEES EARNED OR PAID IN CASH ($)		STOCK AWARDS ($)(1)		TOTAL ($)
Michael J. Bradley(2)		87,500		90,000		177,500
Matthew N. Cohn		81,208		115,000		196,208
Cheryl D. Creuzot		82,500		90,000		172,500
John M. Eggemeyer(3)		53,626		165,000		218,626
Hersh Kozlov		77,500		90,000		167,500
William H. Lamb		82,500		90,000		172,500
James J. McEntee III		123,626		165,000		288,626
Daniela A. Mielke		85,000		90,000		175,000
Stephanie B. Mudick		58,626		165,000		223,626

(1)

The values shown for stock awards in the Director Compensation Table reflect the grant date fair value of $32.34, which was the closing price of the Company’s stock on the RSU grant date, May 25, 2023. All values are calculated in accordance with FASB ASC Topic 718.

(2)

Does not reflect the January 3, 2023 exercise of 5,000 previously granted stock options, with an exercise price of $10.45, which had a grant date fair value of $4.24 per share.

(3)

Mr. Eggemeyer’s stock awards and other compensation are paid to Castle Creek Advisors IV LLC, the fund with which he is affiliated.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The Board of Directors has adopted a written Related Party Transactions Policy (the “RPT Policy”) regarding the review and approval, ratification or rejection of any “related party transactions,” or any transaction, arrangement, or relationship (or any series of similar transactions, arrangements or relationships) in which (i) the Company or any of its ~~subsidiary bank. The following presents~~subsidiaries, was, is, or will be a ~~brief summary~~participant, (ii) the amount of the ~~attributes of each director that led~~transaction(s) exceeds $120,000, and (iii) in which a “related party” has or will have a direct or indirect material interest. Pursuant to the ~~conclusion~~RPT Policy, all related party transactions, other than those falling into certain exempt categories because they do not present a direct or indirect material interest on the part of the related party, are presented to the Audit Committee for approval, ratification, or rejection. The Audit Committee may take into consideration any facts and circumstances it deems relevant in taking formal action to approve, ratify, or reject the related party transaction, including the nature of the related party’s relationship to the Company, the material facts of the proposed transaction, and whether the transaction would impact the judgment of a director or executive officer or their ability to act in the best interest of the Company.

The Bank has entered into lending transactions or other financial services transactions in the ordinary course of business with directors, executive officers, principal stockholders and affiliates of such persons. All loans were made on substantially the same terms, including interest rate and collateral, as those prevailing at the time for comparable loans with persons not related to the lender. As of December 31, 2023, these loans were current as to principal and interest payments and did not involve more than normal risk of collectability or present other unfavorable features. As of December 31, 2023, loans to these related parties amounted to $5.5 million. Lending transactions and other financial services of this nature that heare made in compliance with applicable law, including Regulation O of the Federal Reserve Board, do not require Audit Committee approval under the RPT Policy because they do not present a direct or ~~she should serve as such:~~

indirect material interest on the part of the related parties involved.

Mr. ~~Cohen has served as~~Hersh Kozlov, a director of the Company, is a partner at Duane Morris. The Company paid Duane Morris approximately $174,000 in 2023 for various legal services. These engagements had a de minimis impact on Duane Morris, Mr. Kozlov did not have a material interest in these engagements, and the Company’s relationship with Duane Morris is not attributable to Mr. Kozlov. Although we do not consider this to be a related party transaction within the meaning of applicable SEC rules, we are providing this information in ~~other significant management capacities,~~the interest of transparency. As stated above, the Board has determined that the limited engagement of Duane Morris would not interfere with Mr. Kozlov’s exercise of independent judgment in carrying out his responsibilities as a ~~number~~director.

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NON-DIRECTOR EXECUTIVE OFFICERS

Set forth below is information regarding the background of ~~financial companies.~~ each of the Company’s executive officers who is not also a director. Background information for Mr. Kozlowski, the only executive officer who is a director nominee, can be found above under “Proposal 1. Election of Directors.”

	Mark Connolly
	Executive Vice President, Head of Credit Markets
				Mark Connolly, age 56, joined The Bancorp in June 2016 and has served as Head of Credit Markets since February 2017 and Chief Credit Officer since December 2019. From 2013 to 2015, Mr. Connolly held a variety of senior management roles, including CFO, Head of Operations, and Head of Financial Services, at Tresata, Inc., a data analytics software company. Previously, from 2010 to 2012, Mr. Connolly served as Managing Director, Private Bank Head of Products, which included U.S. Lending, Mortgages, Banking, and Trust Services, at Morgan Stanley Wealth Management. Additionally, Mr. Connolly served as the Co-CEO/Chief Operating Officer of the U.S. Private Bank at Citi Global Wealth Management from 2009 to 2010 and served as the Head of U.S. Lending, Mortgages, Banking, and Trust Services at Citi Global Wealth Management from 2005 to 2010. Before joining Citigroup, Mr. Connolly also held a senior management position within Bank of America’s Corporate and Investment Bank from 1998 to 2005.

	Olek DeRowe
	Executive Vice President, Head of Commercial Real Estate
				Olek DeRowe, age 44, serves as Head of Commercial Real Estate for The Bancorp and has led the Real Estate Bridge Lending business line since September 2020. Mr. DeRowe has served in other capacities at The Bancorp since May 2015, including Real Estate Capital Markets Manager. Mr. DeRowe has over 20 years of experience in the commercial real estate finance industry from pricing, structuring, and distribution of commercial mortgage loans to brokerage and consulting. Prior to joining The Bancorp, Mr. DeRowe held various roles within the commercial real estate finance industry, including senior positions at Capmark Finance (formerly GMAC Commercial Mortgage), CWCapital, Amherst Securities, and Rainieri Partners.

	Paul Frenkiel
	Executive Vice President, Chief Financial Officer and Secretary
				Paul Frenkiel, age 71, has served as CFO and Secretary for The Bancorp since joining the organization in September 2009. From November 2000 through October 2008, he was CFO and Executive Vice President of Republic First Bancorp Inc. From January 2005 through September 2009, Mr. Frenkiel also served as CFO and in other capacities at First Bank of Delaware, which was spun off from Republic First Bancorp Inc. Additionally, he served as CFO of JeffBanks, Inc. from 1987 through its acquisition by Hudson United Bancorp in 2000, and he has also served as CFO at Dominion Bank. Mr. Frenkiel is a member of the American Institute of Certified Public Accountants and is a chartered bank auditor.

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	Gregor Garry
	Executive Vice President, Chief Operating Officer
				Gregor Garry, age 40, has served as Chief Operating Officer for The Bancorp since July 2019. He has also served as the organization’s Deputy Chief Operating Officer, Chief Risk Officer, Chief Audit Executive, and Vice President of Internal Audit since joining The Bancorp in October 2014. From December 2009 to October 2014, he served as the Internal Audit Manager and in other capacities for The First National Bank in Sioux Falls, South Dakota. From July 2007 to December 2009, Mr. Garry was a Senior Management Consultant for Milo Belle Consultants. Mr. Garry is a Certified Internal Auditor, a Certified Fiduciary and Investment Risk Specialist, and holds a certification in Risk Management Assurance.

	Ryan Harris
	Executive Vice President, Head of Fintech Solutions
				Ryan Harris, age 46, has served as the Head of Fintech Solutions for The Bancorp since November 2019, and as Co-Head of Fintech Solutions from November 2018 to November 2019. Prior to serving in these capacities, Mr. Harris served as the Head of Business Development for The Bancorp’s Payment Solutions Group from December 2007 to November 2018. From January 2006 to November 2007, he served as Senior Vice President of Business Development for the payment systems division of BankFirst, a subsidiary of Marshall BankFirst Corporation. From January 1999 to December 2005, Mr. Harris served in various capacities for both the credit card and prepaid card divisions of BankFirst. Mr. Harris started his career working in the credit card operations division for Citibank (South Dakota), N.A. in 1997.

	John Leto
	Executive Vice President, Head of Institutional Banking
				John Leto, age 60, has served as Head of Institutional Banking for The Bancorp since January 2019, and he also served as Chief Administrative Officer at The Bancorp from July 2016 to January 2019. From June 2012 to June 2016, he served as Senior Vice President and Head of National Sales of Wealth Management at TD Bank, where he managed the sales expansion strategy throughout the U.S. From December 2009 to April 2012, he was President and CEO of Standard Chartered Americas Private Bank, where he also served as Chairman, President and CEO of StanChart Securities International. From June 2007 to November 2009, Mr. Leto was Founder and Partner of Alpha Capital, a de novo private bank. From July 1995 to April 2007, he held several senior management roles at Citigroup, where he served as Citi Private Bank’s Chief Administrative Officer with responsibility for the U.S., Latin America, Asia, Europe, and the Middle East.

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	Jeff Nager
	Executive Vice President, Head of Commercial Lending
				Jeff Nager, age 51, has served as Head of Commercial Lending for The Bancorp since January 2019 and leads the Small Business Lending and Commercial Fleet Leasing Teams. He has more than 25 years of experience in small business lending. From June 2016 to January 2019, he served as The Bancorp’s Head of Small Business Lending. He served as the Division Manager of the Small Business Administration (“SBA”) Lending Team at SunTrust Bank from April 2010 through June 2016. He was Regional Sales Manager at Wells Fargo SBA from January 2009 through March 2010 and SBA National Sales Manager at Community South Bank from August 2003 through December 2009. Mr. Nager was Regional Sales Manager/Business Development Officer at Temecula Valley Bank from 2000 to 2003, Business Development Officer at Imperial Bank from 1998 to 2000, and Business Development Officer at Triangle Bank from 1996 to 1998. Mr. Nager is currently a Board Member for the National Association of Government Guaranteed Lenders (NAGGL), the trade organization for lending pursuant to the SBA’s 7(a) Loan Program.

	Thomas G. Pareigat
	Executive Vice President, General Counsel
				Thomas Pareigat, age 64, has served as General Counsel for The Bancorp since February 2011. From 2003 to 2005 and from 2007 to 2011 he was a partner in the Minneapolis, Minnesota law firm of Lindquist & Vennum LLP (now Ballard Spahr LLP), where he concentrated his practice on banking law and regulatory compliance matters as a member of the firm’s Financial Institutions Practice Group. Between 2005 and 2007, he served as Senior Vice President and Regulatory Counsel for Marshall BankFirst Corporation. From 2001 to 2002, Mr. Pareigat was Vice President and Corporate Counsel for Marquette Bancshares, Inc. and its subsidiary banks until their acquisition by Wells Fargo. From 1989 to 2001, he served as Senior Attorney with Bankers Systems, Inc. (now Wolters Kluwer Financial Services). Mr. Pareigat serves on the Editorial Board of the American Bankers Association’s Risk and Compliance magazine and has served on the faculty of the ABA’s National Compliance School and Graduate School for Compliance Risk Management.

2024 PROXY STATEMENT

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Other Matters

In ~~addition~~accordance with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), as implemented by Rule 14a-21(a) under the Exchange Act, and as a matter of good corporate governance, the Company is seeking a stockholder advisory vote on the compensation paid to ~~experience in commercial real estate, he has considerable experience in securities, investment management and capital markets.~~

~~Mr. Beach has extensive experience in investment management, corporate finance and capital markets. While currently not serving~~its named executive officers as reported in this ~~capacity, Mr. Beach is deemed~~Proxy Statement.

We encourage stockholders to read the Compensation Discussion and Analysis portion of this Proxy Statement, which discusses the compensation program under which the Company’s named executive officers were compensated for fiscal year 2023. As described in the Compensation Discussion and Analysis, the Compensation Committee has developed an ~~audit committee financial expert which, among other factors, reflects~~executive compensation program designed to align the ~~quantitative and analytical skills developed in his experience as a director of research for an investment management firm.~~

Mr. Bradley has served as chairman and in other significant capacities for financial institutions and served as Chief Executive Officer of several university hospitals, including Columbia Presbyterian Medical Center and Thomas Jefferson University Hospital. Within these capacities, he was involved in significant management functions with respect to business and financial matters.

Mr. Chrystal has extensive financial, investment and financial risk management experience, enabling him to provide the Company with advice and oversight regarding financial markets, risk management and investments.

~~Mr. Cohn has significant experience in founding, leading and having senior roles in a variety of companies, including mid-size businesses~~long-term interests of the ~~type that are~~Company’s named executive officers with the ~~Bank’s clients. In addition, he has considerable experience with electronic distribution and technology-based companies.~~

~~Mr. Eggemeyer has served as chairman and in other significant management capacities with a number~~long-term interests of ~~financial companies. He is experienced in evaluating financial performance of financial institutions.~~

Mr. Kozlov has extensive legal and business experience resulting from his partnerships at prominent law firms where he represented companies which included banks, insurance companies and other financial institutions. He has board of director’s experience at multiple financial institutions. His experience in general business matters also reflects service as a Presidential Appointee to the Advisory Commission for Trade Policy and Negotiations of the United States.

Mr. Kozlowski has extensive experience in commercial banking, wealth management, and investment banking. Additionally, he has held numerous leadership positions in financial institutions and has a demonstrated record in improving both financial and regulatory performance.

Mr. Lamb has extensive experience as a director of public bank holding companies, beginning in 1974. Additionally, he has significant legal experience with respect to business and financial matters and has particular knowledge of the southeastern region of Pennsylvania which is one market served by the Company.

~~Mr. McEntee has extensive experience in corporate law and financial institution management, as well as significant managerial experience in real estate, investments and capital markets operations.~~

Ms. Mielke has significant experience as a senior officer of large payment processing and merchant acquiring companies. She has also served as a technology and financial services consultant. This experience complementsits stockholders. At the Company’s ~~payment processing and merchant acquiring lines of business as well as its focus on technology and the emerging fintech marketplace.~~

Ms. Mudick has extensive experience in bank regulatory matters as a senior regulatory officer and general counsel in major global banks and bank holding companies. She has extensive experience in consumer financial products, complementing her regulatory expertise with product expertise.

Ms. Tuan has significant experience in financing real estate projects and a variety of other investment banking experience. She has served as a Chief Financial Officer and Chief Operating Officer and holds an M.B.A. from Harvard Business School.

~~Standard for Election of Directors~~

~~The director nominees receiving a majority~~2023 annual meeting, approximately 96% of the votes cast ~~in uncontested elections, will be elected. If an incumbent director~~approved the Company’s 2022 executive compensation program.

ADVISORY OR NON-BINDING EFFECT OF VOTE

Under the Dodd-Frank Act and related SEC rules, your vote on this resolution is advisory and non-binding. This means that the Board of Directors is not ~~elected~~required by law to take any action in response to the stockholder vote. However, the Board of Directors values the Company’s stockholders’ opinions and intends to evaluate the results of the vote carefully when making future decisions regarding compensation of the named executive officers. The Company believes that providing its stockholders with an advisory vote on its executive compensation program will further enhance communication with stockholders, while also meeting the Company’s obligations under the Dodd-Frank Act and applicable SEC rules. The Board’s current policy is to hold this advisory vote each year, and we expect to hold the next advisory vote on executive compensation at the 2025 annual meeting of stockholders.

RESOLUTION

The Board of Directors recommends that stockholders approve the following non-binding advisory resolution:

RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed in the Company’s Proxy Statement for its 2024 Annual Meeting of Stockholders pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE ”FOR” APPROVAL OF THE COMPENSATION PAID TO NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT.

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COMPENSATION
DISCUSSION AND ANALYSIS

TABLE OF CONTENTS
	PAGE
NAMED EXECUTIVE OFFICERS		32
EXECUTIVE SUMMARY		33
COMPENSATION OBJECTIVES AND ELEMENTS		33
COMPENSATION PRACTICES		33
COMPENSATION PROCESS AND METHODOLOGY		34
NEO COMPENSATION FOR FISCAL YEAR 2023		35
DETERMINATION OF COMPENSATION AMOUNTS		35
CEO COMPENSATION DETERMINATION		37
BALANCED SCORECARD: CEO PERFORMANCE MATRIX		38
COMPENSATION RISK ANALYSIS		39
STOCKHOLDER INPUT AND COMPANY ACTIONS		40
COMPENSATION CLAWBACK POLICY		41
STOCK OWNERSHIP GUIDELINES		41
ANTI-HEDGING POLICY		41
TAX AND ACCOUNTING CONSIDERATIONS		41

NAMED EXECUTIVE OFFICERS

In accordance with SEC rules, this Compensation Discussion and Analysis discusses material elements of compensation for the Company’s named executive officers (“NEOs”) for fiscal year 2023 and should be read in conjunction with the detailed tables and narrative descriptions under “Executive Compensation Tables.” In fiscal year 2023, the Company’s NEOs were its CEO, CFO, and three other most highly compensated executive officers.

For fiscal year 2023, the NEOs were:

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Damian M.
Kozlowski

Chief Executive
Officer

Paul Frenkiel

Executive Vice
President,
Chief Financial
Officer

Olek DeRowe

Executive Vice
President,
Head of Commercial
Real Estate

Ryan Harris

Executive Vice
President,
Head of Fintech
Solutions

John Leto

Executive Vice
President,
Head of Institutional
Banking

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EXECUTIVE SUMMARY

The Compensation Committee has established specific pay for performance requirements with significant “at-risk” compensation components, consisting of cash bonus and equity incentives. The Compensation Committee continues to emphasize multi-year financial performance as the primary basis for this pay for performance analysis.

As to CEO compensation, while the balanced scorecard considers other factors, specific return on assets (“ROA”) and return on equity (“ROE”) factors were required to be met for a ~~majority~~targeted $5 million of ~~votes cast,~~total incentive compensation consisting of cash bonus and stock awards. The specific ROA and ROE requirements are derived from the Company’s budget, and multi-year periods are considered, reflecting achievement of the pre-set ROA and ROE requirements as follows. In 2021, budgeted respective ROE and ROA of 16% and 1.6% compared to actuals of 18% and 1.7%. In 2022, budgeted respective ROE and ROA of 18% and 1.7% compared to actuals of 19% and 1.8%. In 2023, budgeted respective ROE and ROA of 23.1% and 2.36% compared to actuals of 25.6% and 2.59%. The requirements for the $5 million of incentive compensation were exceeded, suggesting that the $5 million could be increased. As shown in the Summary Compensation Table, total bonus and stock awards have been increased in steps, based upon multi-year ROA and ROE. In setting the $5 million incentive target, the Compensation Committee considered that amount had a de minimis impact on ROA and ROE. In 2023, the cash bonus was increased to $3 million from $2.25 million in the prior two years. The increase was made after the Company had consistently exceeded the above referenced requirements for the $5 million targeted incentive compensation. It uses a scorecard which balances financial performance comparisons to internal budgets and peer groups, risk management, regulatory compliance, and other strategic objectives. In addition to exceeding the ROA and ROE metrics noted above, net income in years 2019 through 2022 increased year over year, from $52 million in 2019 to $130 million in 2022. In 2023, net income amounted to $192 million.

Over these periods, significant amounts of total compensation have been awarded in the form of equity to align management’s interests with those of stockholders. The Compensation Committee believes that its multi-year assessments and such equity grants support a culture which will manage risk for the longer term. The Compensation Committee believes that the compensation mix is validated by the aforementioned ROA and ROE results over a multi-year period.

COMPENSATION OBJECTIVES AND ELEMENTS

The Company’s compensation policies are intended to provide appropriate compensation packages to motivate, reward, attract, and retain talented and experienced executive officers, and support the Company’s management succession plan. The policies are also intended to manage the Company’s compensation costs.

The Compensation Committee believes that an ~~uncontested election,~~appropriate compensation program should balance providing motivation to executive officers and effectively controlling compensation costs. Executive officers are compensated at levels designed to attract and retain highly qualified individuals and to motivate them to perform in a manner that maximizes corporate performance.

The Company’s executive compensation program consists of three elements to compensate and motivate its executive officers in line with the ~~incumbent~~Compensation Committee’s objectives described above:

■

Base salary;

■

Cash bonuses; and

■

Long-term equity incentives reflected in grants of stock options and restricted stock awards.

COMPENSATION PRACTICES

We strive to utilize sound governance and risk management practices that align with our compensation objectives. Under “Executive Compensation Highlights” above, we summarize certain practices we have implemented to drive performance and those we have not implemented because we do not believe they would serve our stockholders’ long-term interests.

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COMPENSATION PROCESS AND METHODOLOGY

Role of the Compensation Committee. The Compensation Committee ordinarily determines compensation amounts for individual NEOs for 12-month periods. The CEO typically provides the Compensation Committee with input regarding key elements of both the Company’s and the NEOs’ (other than the CEO’s) performance, as well as recommendations to assist it in determining compensation levels. The Compensation Committee reviews the Company’s performance during the fourth quarter of each year and determines the amount of equity awards and cash bonuses, if any, that should be awarded at its discretion. Cash bonuses have generally been paid and equity awards generally made in the first quarter of the following year and reported in the compensation tables in the year of payment and grant. Such incentive compensation is based on sustained multi-year financial performance and to motivate future performance to achieve the Company’s financial goals. With the full Board, the Compensation Committee compares financial performance to the budget and those financial goals on a quarterly basis.

Role of the Independent Compensation Consultant. In fiscal year 2023, the Compensation Committee utilized the compensation consulting firm of Pay Governance LLC (“Pay Governance”) to advise on matters related to our executive and director ~~will tender~~compensation practices and to provide independent confirmation to the Compensation Committee that the Company’s pay and performance are aligned. Specifically, Pay Governance (i) reviewed our compensation peer group to ensure it was relevant for competitive analyses of executive and director pay, (ii) reviewed the compensation of our executive officers relative to pay levels of the peer group, and (iii) reviewed non-executive director compensation levels and practices relative to pay levels and practices of companies comprising the peer group. Pay Governance is hired by, and reports directly to, the Compensation Committee and did not provide any other services to the Company in fiscal year 2023.

In engaging Pay Governance in fiscal year 2023, the Compensation Committee determined that Pay Governance was independent in accordance with SEC rules and that its work did not raise any conflict of interest.

Benchmarking. The Compensation Committee benchmarks the CEO’s compensation to a peer group of banking institutions based upon its review of financial statements and other publicly available data. The peer group for fiscal year 2023, comprised of 20 banking institutions, is listed below. In establishing the peer group, the Compensation Committee considers the level of these institutions’ total assets and their regional location, as well as whether they offer certain specialized banking products, such as prepaid card accounts. Publicly available compensation information from these peers is utilized in setting CEO compensation. As to NEOs other than the CEO, the Compensation Committee utilizes peer compensation information drawn from regional and community banks as supplied by McLagan, a company which maintains related salary databases. Although considerable knowledge about the competitiveness of the Company’s compensation programs is gained through the benchmarking process, the Compensation Committee recognizes that each financial institution is unique and that significant differences in executive compensation practices exist. The Compensation Committee also considers the added complexity and earnings stream resulting from payments businesses unique to the Company. For instance, while Green Dot Corporation and Pathward Financial, Inc. also engage in certain payments businesses, they do not engage in the specialized securities-backed line of credit (“SBLOC”), insurance policy cash value-backed line of credit (“IBLOC”), SBA and leasing businesses. While the Compensation Committee considered compensation information in the whole peer group, it concluded that the following banks had the most comparable lines of business and related complexities and would be the most relevant: Axos Financial, Inc., Green Dot Corporation, Live Oak Bancshares Inc., and Pathward Financial, Inc.

FISCAL YEAR 2023 PEER GROUP(a)

	Axos Financial, Inc.			Live Oak Bancshares Inc.
	Brookline Bancorp Inc.			Metropolitan Bank Holding Corp.
	Camden National Corp.			Pathward Financial, Inc.
	ConnectOne Bancorp, Inc.			ServisFirst Bancshares, Inc.
	Customers Bancorp, Inc.			Silvergate Capital Corporation
	Financial Institutions, Inc.			Stock Yards Bancorp, Inc.
	First Commonwealth Financial Corp.			Tompkins Financial Corporation
	Flushing Financial Corp.			Triumph Bancorp, Inc.
	Green Dot Corporation			Univest Corp. of Pennsylvania
	Lakeland Bancorp, Inc.			Washington Trust Bancorp, Inc.

(a)

The fiscal year 2022 peer group included three entities that were removed from the peer group for fiscal year 2023 due to acquisition (Bryn Mawr Bank Corp., Meridian Bancorp, Inc., and TriState Capital Holdings Inc.). Reflecting a review of the peer group by Pay Governance, additions to the prior year’s peer group were comprised of Customers Bancorp, Inc., Metropolitan Bank Holding Corp.,ServisFirst Bancshares, Inc., Silvergate Capital Corporation, Stock Yards Bancorp, Inc., and Triumph Bancorp, Inc., with deletions of Eagle Bancorp, Inc., OceanFirst Financial Corp., Peapack-Gladstone Financial Corp., Provident Financial Services Inc., Sandy Spring Bancorp, Inc., S&T Bancorp, Inc., and Trustco Bank Corp NY.

The median asset size of the peer group was approximately $7.9 billion at December 31, 2021, and the Company’s asset size at December 31, 2021 was $6.8 billion. The median revenue of the peer group for 2021 was $278 million, and the Company’s revenues for 2021 were

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$316 million. In determining the peer group, the asset size range was set with a minimum asset size of $5 billion, except for Green Dot Corporation, which had $4.7 billion of assets. Green Dot Corporation was included because it has a payments business component which resulted in a basis for peer comparison with the Company’s payment business. An upper limit of $20 billion in total assets was set. While that asset level was higher than the Company’s assets, the complexities of the Company’s niche businesses as described in the paragraph directly preceding the table above, creates at least a partial basis for comparability with larger entities.

NEO COMPENSATION FOR FISCAL YEAR 2023

The chart below summarizes the specific elements of the Company’s fiscal year 2023 compensation program for each NEO and shows the percentage of total compensation comprised of each individual component — base salary, cash bonus, and long-term equity grant.

NAME	PRINCIPAL POSITION	BASE SALARY ($)		BASE SALARY %		CASH BONUS ($)		CASH BONUS %		LONG-TERM EQUITY GRANT ($)		LONG- TERM EQUITY GRANT %		TOTAL ($)
Damian M. Kozlowski	Chief Executive Officer		750,000		13		3,000,000		52		2,000,000		35		5,750,000
Paul Frenkiel	EVP, Chief Financial Officer		400,000		35		—		—		750,000		65		1,150,000
Olek DeRowe	EVP, Head of Comm. Real Estate		400,000		21		—		—		1,500,000		79		1,900,000
Ryan Harris	EVP, Head of Fintech Solutions		400,000		20		—		—		1,562,500		80		1,962,500
John Leto	EVP, Head of Institutional Banking		400,000		20		—		—		1,562,500		80		1,962,500

DETERMINATION OF COMPENSATION AMOUNTS

Base Salary. The Company believes that it is important to maintain a competitive compensation structure to retain qualified executive officers, which includes base salary consistent with similarly situated executives at similarly sized banking institutions. The Company believes that a key objective of its salary structure is to maintain reasonable “fixed” compensation costs by targeting base salaries at a competitive average, considering the Company’s and the individual’s performance. Base salaries are generally reviewed annually by the Compensation Committee, as described under “Compensation Process and Methodology” above. Any change in base salary is normally determined after considering:

■

The executive’s total itemized compensation for the prior year;

■

The executive’s current base pay position relative to the peer group;

■

The Company’s performance and the individual’s contribution to that performance for a sustained period;

■

The impact of the complexity of certain of the Company’s payments and specialized lending businesses on the individual’s responsibilities; and

■

National and regional economic conditions, their effect upon the Company, and how the executive has dealt with them within his or her ~~resignation~~area of responsibility.

As noted previously, the Compensation Committee utilizes peer data to benchmark compensation. For fiscal year 2023, the peer data utilized for NEOs other than the CEO was drawn from regional and community banks and provided by McLagan.

The following chart shows base salaries of the NEOs for fiscal year 2023 and the respective peer range base salary:

NAME

PRINCIPAL POSITION

BASE SALARY
2023
($)(b)

PEER
RANGE OF
BASE SALARY
($)(a)

Damian M. Kozlowski

Chief Executive Officer

750,000

(b)

Paul Frenkiel

EVP, Chief Financial Officer

400,000

331,000-495,000

Olek DeRowe

EVP, Head of Commercial Real Estate

400,000

658,000-948,000

Ryan Harris

EVP, Head of Fintech Solutions

400,000

362,000-526,000

John Leto

EVP, Head of Institutional Banking

400,000

483,000-654,000

(a)

Peer ranges reflect 50th to 90th percentile for base salary.

(b)

Mr. Kozlowski’s salary continued to be maintained at its 2019 level. The other NEOs had not received an increase to their $400,000 base salary since 2020, except for Mr. DeRowe, whose salary was increased to $400,000 in 2023.

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Cash Bonus. In evaluating possible cash bonuses, the Compensation Committee primarily focuses on the sustained contributions made to the ~~Board for~~Company by the NEO under consideration. The ~~Nominating~~CEO makes recommendations to the Compensation Committee with respect to annual bonuses for the other named executive officers, based on their respective sustained contributions to the performance of the areas for which they are responsible. While the Compensation Committee examines pre-established requirements in determining whether to pay a cash bonus to any NEO and ~~Governance~~the amount of such bonus, the Compensation Committee has determined it is in the Company’s best interest to retain full discretion with respect to these cash bonuses to retain flexibility as opposed to requiring set payments for various levels of satisfying these requirements.

Long-Term Equity Incentive Compensation. Long-term equity incentives were provided to NEOs in fiscal year 2023 through the Company’s 2020 Equity Incentive Plan. The 2020 Equity Incentive Plan permits the grant of stock options, restricted stock awards, stock appreciation rights and phantom units. Stock options are granted to NEOs at exercise prices equal to the then current market price of the Common Stock. Awards under the 2020 Equity Incentive Plan are granted based on the Company’s financial performance and each executive’s contribution to such performance. Overall, the objective of long-term equity incentive compensation awards is to tie the interests of NEOs directly to increases in stockholder value. The criteria utilized for each NEO is that which is used for cash bonuses as discussed directly above under “Cash Bonus.” In 2023, the percentage of equity granted compared to total salary and incentive compensation was 35% for Mr. Kozlowski. In addition to RSUs, Mr. Kozlowski’s 2023 long-term equity grants included 57,573 stock options, which were valued on the day of grant under the Black-Scholes method at $17.37 each. In 2023, to increase equity ownership of the other NEOs, no cash bonuses were paid to them, and all incentive compensation was awarded in the form of equity grants. For those NEOs, the percentage of equity grants to total salary and incentive compensation ranged from 65% to 80%. Since 2019, a significant amount of equity compensation for Mr. Kozlowski has been awarded in the form of stock options, such that he benefits only to the extent of further increases in share price. Upon the accumulation of a significant equity position, the proportion of cash bonus was increased in 2021, 2022, and 2023 compensation.

The chart below summarizes the percentage cash bonus and long-term equity grant compensation for NEOs for fiscal year 2023 as it relates to each NEO’s base salary. The footnotes to the chart refer to the performance requirements which must ~~promptly consider~~be sustained for cash bonus and long-term equity grants.

NAME	PRINCIPAL POSITION	BASE SALARY ($)		CASH BONUS ($)		% OF BASE SALARY		LONG-TERM EQUITY GRANT ($)		% OF BASE SALARY
Damian M. Kozlowski(1)	Chief Executive Officer		750,000		3,000,000		400%		2,000,000		267%
Paul Frenkiel(2)	EVP, Chief Financial Officer		400,000		—		—		750,000		188%
Olek DeRowe(3)	EVP, Head of Commercial Real Estate		400,000		—		—		1,500,000		375%
Ryan Harris(4)	EVP, Head of Fintech Solutions		400,000		—		—		1,562,500		391%
John Leto(5)	EVP, Head of Institutional Banking		400,000		—		—		1,562,500		391%

(1)

See “CEO Compensation Determination” below for information regarding the performance requirements related to Mr. Kozlowksi’s compensation for fiscal year 2023.

(2)

For the CFO, Paul Frenkiel, the cash bonus of $0 in 2023 compared to $360,000 in 2022, and $350,000 in 2021. Mr. Frenkiel’s responsibilities include all financial functions of the Company, including supporting each line of business in managing their financial operations. The increased awards reflected the impact of those financial functions on the sustained improved financial performance of the Company, including management of rate sensitivity. Additionally, Mr. Frenkiel is responsible for the investment portfolio which has consistently ranked in the upper quartile of peers. The upper quartile peer ranking requirement was based on the yields reported in the Uniform Bank Performance Report for FDIC insured banks.

(3)

For the Head of Commercial Real Estate, Olek DeRowe, the cash bonus of $0 in 2023 compared to $480,000 in 2022 and $300,000 in 2021. Mr. DeRowe’s salary was increased to $400,000 annually in 2023, representing a 28% increase over the prior year. Mr. DeRowe oversees the real estate bridge lending function, consisting primarily of real estate bridge loans for apartment buildings. Mr. DeRowe is primarily responsible for growing the portfolio and managing related credit risks. At December 31, 2022, 2021, and 2020, total real estate bridge lending balances were $1.7 billion, $622 million, and $0, respectively. At December 31, 2023, balances amounted to $2.0 billion. Mr. DeRowe rebuilt this lending area, from scratch, after the pandemic hiatus which stretched between 2020 and 2021. He re-established the brand in the market and significantly increased profitability, which resulted from those increased balances.

(4)

For the Head of Fintech Solutions, Ryan Harris, the cash bonus of $0 in 2023 compared to $750,000 in 2022 and $700,000 in 2021. Mr. Harris is responsible for the development and execution of fintech and other payment revenue growth initiatives, including sales and marketing. Prepaid, debit card and related fees for 2022, 2021, and 2020 respectively amounted to $77.2 million, $74.7 million, and $74.5 million, reflecting a 4% increase over that period. ACH, card and other payment fees increased from $7.1 million to $8.9 million over that period, or an increase of 26% over that period. In 2023, those fees amounted to $9.8 million.

(5)

For the Head of Institutional Banking, John Leto, the cash bonus of $0 in 2023 compared to $750,000 in 2022 and $700,000 in 2021. Mr. Leto’s responsibilities include sales and marketing of the SBLOC, IBLOC and registered investment advisor loans, and certain oversight functions. Mr. Leto has achieved loan growth in excess of budgeted goals on a sustained basis. At December 31, 2022, 2021, and 2020, total SBLOC, IBLOC and registered investment advisor financing balances respectively amounted to $2.5 billion, $2.05 billion, and $1.6 billion. At December 31, 2023, SBLOC, IBLOC and registered investment advisor financing balances decreased to $1.8 billion. The decrease in 2023 was believed to have resulted from customer sensitivity to higher rates. However, the rate sensitivity of this portfolio resulted in an increase in yield and net interest income which more than offset the impact of principal reductions.

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CEO COMPENSATION DETERMINATION

The following factors impact the Compensation Committee’s determination of the amounts of cash bonus and equity awards for pay for performance for the CEO:

1. Sustaining Financial Performance Validated By Pre-Established Financial Goals

In determining the CEO’s compensation, the Compensation Committee establishes specific, pre-set financial goals and monitors the Company’s financial performance. These goals were exceeded in fiscal years 2022 through 2020 and prior years. Beginning in 2022 and for 2023, this multi-year history of performance was further validated as financial goals were again exceeded. ROA has continued its multi-year sustained increases and amounted to 1.09%, 1.34%, 1.68%, and 1.81% in 2019 through 2022, respectively. In 2023, ROA amounted to 2.59%. Net income in years 2019 through 2022, increased year over year, from $52 million in 2019 to $130 million in 2022. In 2023, net income amounted to $192 million. Specifically, the balance sheet, with particular emphasis on the investment securities portfolio, had been managed between 2020 and 2022 to maximize asset sensitivity. Thus, when rates normalized to historical levels and increased further as the Federal Reserve raised rates in response to inflation, increased net interest income was reflected in growth in ROA and equity. The Compensation Committee also considered the sustainability of the Company’s financial performance under the CEO’s leadership. In 2023, approximately 87% of total CEO compensation was comprised of cash bonus and equity incentive compensation for achieving and exceeding pre-established requirements for a multi-year period. The Compensation Committee also considered the level of cash bonus as a percentage of base salary. For the CEO, the 2022 cash bonus was maintained at the prior year $2,250,000 level, representing 3x base salary, compared to $1,650,000 in 2020. In 2023, after the accumulation of increased amounts of equity, the cash bonus was increased to $3 million, which was 4x base salary. The increases reflected the improved financial performance of the Company which had been sustained for a multi-year period. Accordingly, most of the CEO compensation is “at risk” as it is dependent on the achievement of financial performance and other requirements. The “Balanced Scorecard: CEO Performance Matrix” below summarizes the requirements for incentive at-risk compensation.

In addition to the improvements in income noted above, other financial highlights are as follows:

■

At December 31, 2022, 2021, and 2020, total SBLOC, IBLOC and registered investment advisor financing balances respectively amounted to $2.5 billion, $2.05 billion, and $1.6 billion. At December 31, 2023, SBLOC, IBLOC and registered investment advisor financing balances had decreased to $1.8 billion. The decrease in 2023 was believed to have resulted from customer sensitivity to higher rates. However, the rate sensitivity of this portfolio resulted in an increase in yield and net interest income which more than offset the impact of principal reductions.

■

At December 31, 2022, 2021, and 2020, total Small Business Loan (“SBL”) balances respectively amounted to $764 million, $696 million, and $654 million, representing a 17% increase over the three-year period. Those amounts and resulting growth percentage exclude short-term Payroll Protection Program (“PPP”) loans of $165.7 million, $44.8 million, and $4.5 million, respectively, at December 31, 2020, 2021 and 2022. At December 31, 2023, SBL balances had increased to $896 million.

■

At December 31, 2022, 2021, and 2020, total loan balances including loans at fair value, respectively, amounted to $6.08 billion, $5.14 billion, and $4.46 billion, reflecting growth of 36% over the three-year period. At December 31, 2023, total loans including loans at fair value amounted to $5.69 billion. The decrease in 2023 was believed to have resulted from customer sensitivity to higher rates on SBLOC and IBLOC. However, the rate sensitivity of this portfolio resulted in an increase in yield and net interest income which more than offset the impact of principal reductions.

■

The net interest margins for 2022, 2021, 2020, and 2019 were 3.55%, 3.35%, 3.45%, and 3.32%, respectively. In 2023, the net interest margin was 4.95%.

■

The average rate on deposits for 2022, 2021, and 2020 was .82%, .10%, and .25%, respectively. In 2023, the average rate on deposits was 2.32%.

2. Forward-Looking Considerations

In addition to achieving specific pay for performance requirements and sustained financial performance, both the cash bonus and equity awards are forward looking to motivate further progress toward the long-term financial goals set by the Board. Financial goals include ROA and ROE. As prior period financial performance requirements were achieved, the Company increased future financial performance requirements. In 2023, the at-risk components of the CEO’s total compensation consisted of cash bonus and equity awards and amounted to $5.0 million, or 87% of total compensation. The CEO’s base salary of $750,000 comprised approximately 13% of total compensation.

After sustained incremental financial progress in prior years and to motivate achievement of increased financial goals, the CEO’s total cash bonus and stock awards in 2021 and 2022 were, respectively, approximately $3.9 million and $4.4 million. ROA for 2020, 2021, and 2022 was, respectively, 1.34%, 1.68%, and 1.81%. In each year, the budgetary goals for both ROA and ROE were met or exceeded. With achieving or exceeding budgeted increases in income, ROA and ROE, Mr. Kozlowski’s total compensation in 2022 and 2021 was, respectively, $5.2 million and $4.6 million. After additional increases in income, ROA and ROE, total compensation for 2023 amounted to $5.8 million.

The Compensation Committee believes that its forward-looking approach of providing cash bonus and equity to motivate future performance has been validated by the above historical results since Mr. Kozlowski’s tenure began in 2016. The Compensation Committee also believes that its consideration of multi-year historical performance, rather than a focus on any ~~resignation offer~~single year, has contributed to the steady increase in income and other financial performance measures.

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3. Peer Comparison

The Compensation Committee peer group for compensation paid or awarded in 2023 is detailed under “Compensation Process and Methodology” and consists of 20 peers, reflecting the changes detailed in the related footnotes. Peer averages for ROA, ROE, net interest margin and stockholder return were exceeded.

The Compensation Committee considered the CEO compensation of Live Oak, Pathward, Axos and Green Dot, the group it considered the Company’s most comparable peers. In 2021, the total CEO compensation for those peers respectively amounted to $884,000, $4.7 million, $13.7 million, and $14.0 million. In 2021, Mr. Kozlowski’s total compensation was $4.6 million. As a result of the steady increases in income, ROA, ROE and stock performance, the Compensation Committee increased Mr. Kozlowski’s incentive compensation for 2022 in the form of stock options. The estimated fair value of those options in 2022 amounted to $1.4 million compared to $851,000 in 2021. In 2023, after significant cumulative equity grants, the total stock and option award value of $2.0 million was maintained at approximately the prior year’s amount, and the cash bonus was increased.

4. Strategic Agenda Goals

In addition to pre-established financial requirements and related performance comparisons with peer groups, the Board pre-established other goals in the form of a strategic agenda. The strategic agenda included specific strategic objectives which are required to be met. Those goals are shown in footnote (b) to the “Balanced Scorecard: CEO Performance Matrix”.

5. Risk Considerations

The Compensation Committee viewed the Board’s financial and other goals in tandem with the institution’s risk profile. For financial performance especially, levels of risk required ongoing consideration so ~~tendered~~as not to incentivize excessive risk taking. Accordingly, specific percentages of additional compensation were not assigned to specific measures of performance. Instead, risk would be considered as part of a balanced scorecard approach. Upon its review, the Compensation Committee determined that risk had been appropriately managed, while financial performance had been significantly improved. The Compensation Committee’s consideration of risk includes credit compliance and ~~make a recommendation~~regulatory risks, and inherent interest rate and liquidity risk, which are monitored by the Board of Directors.

All factors above supported increased compensation levels. All the pre-established financial goals were either achieved or exceeded while risk was decreased. Pre-established strategic, non-quantifiable goals, which would impact financial performance in the future were all either met or showed expected progress.

BALANCED SCORECARD: CEO PERFORMANCE MATRIX

An analysis of the metrics and other criteria used by the Compensation Committee in determining CEO compensation for fiscal year 2023 is as follows.

PRE-ESTABLISHED REQUIREMENTS FOR INCENTIVE
COMPENSATION

DID NOT MEET

SUBSTANTIALLY MET

EXCEEDED

Financial & Strategic Performance

Financial Metrics to Budget(a)

Strategic Agenda(b)

Integrated Business Plan Objectives(c)

Stock Performance

Competitor Peer Group(d)

Dow Jones U.S. Bank Index(d)

KBW Bank Index (d)

Enterprise Risk Management

Credit Risk Management(e)

Compliance Risk Management(f)

Regulatory Requirements(f)

(a)

Financial Metrics to Budget: In 2021, budgeted respective ROE and ROA of 16% and 1.6% compared to actuals of 18% and 1.7%. In 2022, budgeted respective ROE and ROA of 18% and 1.7% compared to actuals of 19% and 1.8%. In 2023, budgeted respective ROE and ROA of 23.1% and 2.36% compared to actuals of 25.6% and 2.59%.

(b)

Strategic Agenda: (i) progress made in adding credit sponsorship products, (ii) operating platforms were enhanced, (iii) real estate bridge lending and institutional banking were expanded, and (iv) ESG reporting strategy and Company culture were enhanced.

(c)

Integrated Business Plan Objectives: As part of the budget process, each line of business established goals which supported the attainment of company-wide financial goals as detailed previously. Actual results are compared to each line of business’s pre-established goals and reported to the Board of Directors quarterly. The specific line of business goals for all six operating departments were concluded to have been exceeded, as the overall financial requirements had been exceeded. Of the 50 annual departmental goals reviewed by the Compensation Committee, the vast majority were concluded to have been achieved.

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(d)

Stock Performance: From the ~~response~~beginning of 2020, through November 30, 2022, the Company’s stock performance exceeded its designated peer group banks consisting of Pathward, Live Oak, Green Dot and Axos, and exceeded both the Dow Jones U.S. Bank Index and the KBW Bank Index. While the market value of the Company’s stock increased 131% over that period, those peers increased 30% and the Dow Jones and KBW indices both increased 4%.

(e)

Credit Risk: Credit risk was deemed acceptable as charge-offs, for a sustained multi-year period, remained at relatively low levels. Results met or exceeded the budget, and the factors above resulted in an exceeded rating. Interest rate risk has similarly remained low, as the balance sheet had consistently been managed to an asset sensitive position. Asset sensitivity results in higher net interest income with increases in market rates, thereby lowering the ~~resignation offer.~~risk of funding fixed rate investments with higher cost funding in periods of increasing rates.

(f)

Compliance Risk Management and Regulatory Requirements: The Board of Directors ~~must take action~~monitors compliance issues on an ongoing basis. Significant multi-year progress in addressing regulatory requirements was sustained and warranted an exceeded rating.

A graphic representation of income before taxes, in thousands, shows the ~~Nominating~~increases in income from 2019.

The following chart compares actual ROE to total CEO compensation as reported in the Summary Compensation Table. Specific pre-set ROE (and ROA) targets were required to be met, over multi-year periods, before the compensation shown below was awarded. ROE (and ROA) pre-set requirements were either achieved or exceeded in all periods.

COMPENSATION RISK ANALYSIS

As a financial holding company regulated by the Federal Reserve Bank, which has a subsidiary bank regulated by the Office of the Comptroller of the Currency, the Company adheres to defined risk guidelines, practices, and ~~Governance Committee’s recommendation~~controls to ensure the safety and soundness of the institution. The Company’s management and Board of Directors conduct regular reviews of its business to ensure that it is operating within ~~90 days following certification~~appropriate regulatory guidelines and with appropriate practices, supplemented by its internal audit function.

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senior executives with those of the Company and its stockholders, and (4) cash bonuses are balanced with other compensation to incent financial performance and safety and soundness while managing compensation expense. In light of regulatory releases, the ultimate goal of the review is to assess the design, governance, policies, and procedures of the Company’s compensation structure to ensure that, as designed and executed, it does not motivate excessive risk-taking that could adversely impact the long-term value of the Company.

After conducting this review in fiscal year 2023, the Compensation Committee concluded that the Company’s incentive programs do not motivate or encourage unnecessary or excessive risk-taking. This conclusion reflected a review of the Company’s structure to determine that credit and other new business approvals are independent of new business efforts. Other factors, such as fostering an appropriate risk management culture, were also considered. The Company will continue to review and monitor its compensation programs to ensure that they continue to not motivate excessive risk-taking that could adversely impact the long-term value of the Company.

STOCKHOLDER INPUT AND COMPANY ACTIONS

The Company’s management meets with stockholders to obtain feedback on Company performance and any other matters of interest to stockholders. The CFO, CEO, and the Head of Fintech Solutions are the Company’s primary representatives who meet with investors. Mr. Frenkiel has addressed executive compensation with stockholders who engage with management on that and other relevant topics. In 2023, these officers met with stockholders owning more than 50% of the Common Stock as they had in previous years. Related stockholder feedback from prior meetings had resulted in structural changes to the CEO’s compensation determination and other changes which were sustained. A summary of the stockholder ~~vote. Any~~input and resulting actions are as follows:

	STOCKHOLDER INPUT						COMPANY ACTIONS
	Prior to 2019, the CEO’s base salary exceeded the peer median. A lower base salary better aligns pay for performance which places greater emphasis on incentive compensation and less emphasis on base salary.						In 2019, the CEO’s base salary was $755,000, compared to $900,000 in 2018. In 2020, base salary was set at $750,000 and maintained at that level through 2023.
	The CEO’s equity awards upon his hire included stock options, but prior to 2019 grants consisted solely of RSUs. Stock options provide incentive for pay for performance, as their value equals the increase in stock price after the grant date.						In 2019 through 2022, a significant allocation of equity compensation granted was awarded as stock options.
	Comparisons to peers on key financial metrics provide a tool to help determine that financial goals adequately reward stockholders.						The Compensation Committee added peer comparisons for ROA and ROE to its decisioning parameters.
	Some companies use grids or assign percentages to their various pre-established metrics which weight those factors in incentive compensation awards.						The Compensation Committee required that the Company achieve pre-established metrics for the award of incentive compensation. The related grid precedes this section under “Balanced Scorecard: CEO Performance Matrix.” The Compensation Committee determined that grid component requirements have been exceeded in every year beginning in 2019.

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COMPENSATION CLAWBACK POLICY

Effective December 1, 2023, the Board adopted an Executive Compensation Clawback Policy (the “Clawback Policy”), based upon the recommendation of the Compensation Committee. The Clawback Policy is designed to comply with Section 10D of the Exchange Act, the rules promulgated thereunder and applicable Nasdaq listing standards and applies to current and former Executive Officers (as defined in the Clawback Policy). Pursuant to the Clawback Policy, in the event the Company is required to prepare an accounting restatement to correct material noncompliance with any financial reporting requirement under securities laws, the Company will recover erroneously awarded Incentive-Based Compensation (as defined in the Clawback Policy) from its Executive Officers. The Clawback Policy was filed with the SEC on February 29, 2024 as Exhibit 97.0 to our Annual Report.

STOCK OWNERSHIP GUIDELINES

In order to align the interests of the Company’s executive officers and directors with those of the Company’s stockholders, the Board has adopted minimum stock ownership requirements as outlined in the Company’s Corporate Governance Guidelines. Under these minimum stock ownership guidelines, each director ~~whose resignation~~ is ~~under consideration must abstain from participating in any board or committee deliberations regarding the acceptance of~~required to own two times his or her ~~offer~~annual fees in Common Stock, the CEO is required to own three times his or her annual salary in Common Stock and all other executive officers are required to own Common Stock in amounts as determined by Compensation Committee policy. As of ~~resignation~~the date of this Proxy Statement, all of our directors and executive officers are currently in compliance with these stock ownership guidelines, to the extent applicable.

ANTI-HEDGING POLICY

The Company’s Insider Trading Policy applies to all employees, directors, and officers of the Company and its subsidiaries. Under the Insider Trading Policy, transactions in puts, calls, or other derivative securities involving the ~~offer~~Company’s equity securities, as well as hedging transactions involving the Company’s equity securities, such as collars and forward sale contracts, are prohibited. The Insider Trading Policy can be found on the Company’s corporate website at https://investors.thebancorp.com/corporate-information/governance-documents/default.aspx:

TAX AND ACCOUNTING CONSIDERATIONS

The Company claims tax deductions in connection with stock awards under its equity compensation plans in an amount equal to the ordinary income reported to the Internal Revenue Service for the recipient. The amount reported as ordinary income to the recipient, and deducted by the Company, is based on the stock price at the date stock options are exercised or restricted stock vests, subject to a $1 million limit for each NEO. While the Compensation Committee considers the deductibility of ~~resignation~~compensation as one factor in determining executive compensation, the Compensation Committee retains the discretion to award and pay compensation that is not deductible as it believes that it is in the best interests of our stockholders to maintain flexibility in our approach to executive compensation and to structure a program that we consider to be the most effective in attracting, motivating and retaining key employees.

The compensation that we pay to our executive officers is expensed in our financial statements as required by U.S. generally accepted accounting principles (“GAAP”). As one of many factors, the Compensation Committee considers the financial statement impact in determining the amount of, and allocation among the elements of, compensation. Stock-based compensation is accounted for as required under Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”). Timing of equity compensation is at the discretion of the Compensation Committee.

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COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the “Compensation Discussion and Analysis” section of this Proxy Statement and has discussed it with management. Based on its review and discussions with management, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

William H. Lamb, Chair
Matthew N. Cohn
John M. Eggemeyer

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EXECUTIVE COMPENSATION TABLES

SUMMARY COMPENSATION TABLE

The following table provides information concerning total compensation earned by or paid to the NEOs for the years ended December 31, 2023, 2022, and 2021.

NAME AND PRINCIPAL POSITION	YEAR		SALARY ($)		BONUS		STOCK AWARDS ($)(1)		OPTION AWARDS ($)(2)		ALL OTHER COMPENSATION ($)(3)		TOTAL
Damian M. Kozlowski Chief Executive Officer		2023		750,000		3,000,000		1,000,000		1,000,000		26,593		5,776,593
		2022		750,000		2,250,000		750,000		1,401,000		12,721		5,163,721
		2021		750,000		2,250,000		750,000		851,000		9,714		4,610,714
Paul Frenkiel EVP, Chief Financial Officer		2023		400,000		—		750,000		—		34,481		1,184,481
		2022		400,000		360,000		240,000		—		23,211		1,023,211
		2021		400,000		350,000		150,000		—		18,426		918,426
Olek DeRowe(4) EVP, Head of Commercial Real Estate		2023		400,000		—		1,500,000		—		10,770		1,910,770
		2022		311,539		480,000		320,000		—		9,847		1,121,386
		2021		246,923		300,000		200,000		—		8,832		755,755
Ryan Harris EVP, Head of Fintech Solutions		2023		400,000		—		1,562,500		—		20,593		1,983,093
		2022		400,000		750,000		500,000		—		11,576		1,661,576
		2021		400,000		700,000		300,000		—		9,120		1,409,120
John Leto EVP, Head of Institutional Banking		2023		400,000		—		1,562,500		—		23,611		1,986,111
		2022		400,000		750,000		500,000		—		13,327		1,663,327
		2021		400,000		700,000		300,000		—		10,164		1,410,164

(1)

Reflects the aggregate grant date fair value of stock awards granted in accordance with FASB ASC Topic 718. The values of stock awards were determined by multiplying the grant date closing price of the Common Stock, by the number of shares granted. The assumptions utilized in determining the fair value of stock awards are described in footnote M to the annual financial statements included in the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2023.

(2)

Reflects the aggregate grant date fair value of stock options granted in accordance with FASB ASC Topic 718. The assumptions utilized in determining the fair value of stock options are described in footnote M to the annual financial statements included in the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2023.

(3)

Represents the aggregate dollar amount of perquisites and other personal benefits, which in 2023 were comprised of contributions to the NEOs’ 401(k) savings plans, insurance premiums paid on behalf of the NEOs, financial services provided to the NEOs and auto allowances. In 2023, Mr. Kozlowski received $15,979 of financial services related benefits, while Messrs. Frenkiel and Leto received $12,983 of such benefits.

(4)

Mr. DeRowe’s salary was increased to $400,000 annually in 2023, representing a 28% increase over the prior year. Mr. DeRowe oversees the real estate bridge lending function, consisting primarily of real estate bridge loans for apartment buildings. Mr. DeRowe is primarily responsible for growing the portfolio and managing related credit risks. At December 31, 2022, 2021, and 2020, total real estate bridge lending balances were $1.7 billion, $622 million, and $0. At December 31, 2023, balances amounted to $2.0 billion. Mr. DeRowe rebuilt this lending area, from scratch, after the pandemic hiatus which stretched between 2020 and 2021. He re-established the brand in the market and significantly increased profitability, which resulted from those increased balances.

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GRANTS OF PLAN-BASED AWARDS TABLE

The following table provides information concerning grants of plan-based awards made to the NEOs during fiscal year 2023.

NAME	GRANT DATE		ALL OTHER STOCK AWARDS: NUMBER OF SHARES OF STOCK OR UNITS(1) (#)		ALL OTHER OPTION AWARDS: NUMBER OF SECURITIES UNDERLYING OPTIONS (#)(2)		EXERCISE PRICE OF STOCK OPTIONS(2) ($/SHARE)		CLOSING PRICE ON DATE OF GRANT ($/SHARE)		GRANT DATE FAIR VALUE OF STOCK AND OPTION AWARDS ($)(3)
Damian M. Kozlowski		02/09/23		28,433						35.17		1,000,000
Damian M. Kozlowski		02/09/23				57,573		35.17				1,000,000
Paul Frenkiel		02/09/23		21,324		—		—		35.17		750,000
Olek DeRowe		02/09/23		42,649		—		—		35.17		1,500,000
Ryan Harris		02/09/23		44,427		—		—		35.17		1,562,500
John Leto		02/09/23		44,427		—		—		35.17		1,562,500

(1)

These stock awards vest over a period of three years from grant date, with one third vesting on each grant anniversary date.

(2)

These stock options had a $17.37 per share grant date fair value, as computed consistent with FASB ASC Topic 718, and vest over a period of four years from grant date, with one fourth vesting on each grant anniversary date.

(3)

Represents the grant date fair value, as computed consistent with FASB ASC Topic 718.

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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE

The following table provides information on the outstanding equity awards held by the NEOs as of December 31, 2023.

			OPTION AWARDS(1)						STOCK AWARDS
NAME	GRANT DATE		NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS EXERCISABLE (#)		NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS UNEXERCISABLE (#)		OPTION EXERCISE PRICE ($)		OPTION EXPIRATION DATE		NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED(2) (#)		MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED(3) ($)
Damian M. Kozlowski		2/8/2019		65,104				8.57		2/8/2029
		5/20/2020		225,000		75,000		6.87		5/20/2030
		2/9/2021										13,291		512,501
		2/9/2021		50,000		50,000		18.81		2/9/2031
		2/9/2022										16,491		635,893
		2/9/2022		25,000		75,000		30.32		2/9/2032
		2/9/2023										28,433		1,096,377
		2/9/2023				57,573		35.17		2/9/2033
		Total		365,104		257,573		—		—		58,215		2,244,771
Paul Frenkiel		2/9/2021										2,658		102,492
		2/9/2022		—		—		—		—		5,276		203,443
		2/9/2023		—		—		—		—		21,324		822,254
		Total		—		—		—		—		29,258		1,128,189
Olek DeRowe		2/9/2021		—		—		—		—		3,544		136,657
		2/9/2022		—		—		—		—		7,036		271,308
		2/9/2023		—		—		—		—		42,649		1,644,545
		Total		—		—		—		—		53,229		2,052,510
Ryan Harris		2/9/2021		—		—		—		—		5,316		204,985
		2/9/2022		—		—		—		—		10,993		423,890
		2/9/2023		—		—		—		—		44,427		1,713,105
		Total		—		—		—		—		60,736		2,341,980
John Leto		2/9/2021		—		—		—		—		5,316		204,985
		2/9/2022		—		—		—		—		10,993		423,890
		2/9/2023		—		—		—		—		44,427		1,713,105
		Total		—		—		—		—		60,736		2,341,980
		Total		365,104		257,573		—		—		262,174		10,109,430

(1)

All options listed in the table vest at a rate of one fourth per year over a period of four years from grant date.

(2)

All stock awards listed in the table are RSUs that vest at a rate of one third per year over a period of three years from grant date, except those granted in 2020, which vest at a rate of one third on the first and second anniversaries of grant date, with the balance vesting after eight months. Upon vesting, shares of Common Stock equal to the number of RSUs vested are issued to the NEO.

(3)

Market value is based on the closing market price of the Common Stock on December 31, 2023, which was $38.56.

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OPTION EXERCISES AND STOCK VESTED TABLE

The following table provides information for the NEOs regarding RSUs vested and options exercised in fiscal year 2023.

	OPTION AWARDS		STOCK AWARDS
NAME	NUMBER OF SHARES ACQUIRED ON EXERCISE (#)	VALUE REALIZED ON EXERCISE ($)	NUMBER OF SHARES ACQUIRED ON VESTING (#)		VALUE REALIZED ON VESTING ($)
Damian M. Kozlowski				87,038		3,191,475
Paul Frenkiel				14,030		510,816
Olek DeRowe				20,163		735,204
Ryan Harris				27,188		988,790
John Leto				29,371		1,069,910

AWARDS UNDER THE COMPANY’S EQUITY COMPENSATION PLANS

The Company has granted awards of stock options and/or RSUs to each of the NEOs under one or more of the 2018 Equity Incentive Plan and 2020 Equity Incentive Plan (collectively, the “Equity Compensation Plans”). The currently outstanding awards granted to the NEOs are described above in the Outstanding Equity Awards at Fiscal Year-End Table. The terms of these awards would be affected by certain trigger events and represent our only obligation to make any potential payments to our NEOs upon termination or change of control. As described in this table, these awards are comprised of unvested options (not exercisable), vested options (exercisable), and unvested RSUs.

Mr. Kozlowski has been granted stock options under the 2018 Equity Incentive Plan and the 2020 Equity Incentive Plan. With respect to such vested options, in the event of death, disability, or retirement, the exercise period is one year from the trigger date, subject to termination on the expiration date of the option, if earlier. In the event of an involuntary termination following a change in control, all vested options would remain exercisable (subject to the expiration provisions otherwise applicable to the option) and would be exercisable for a period of one year following such termination. If his employment is terminated for cause, all vested options that have not been exercised will expire and be forfeited. If his employment terminates for any other reason, these vested options may thereafter be exercised, to the extent exercisable at the time of such termination, for a period of three months following termination, subject to termination on the option’s expiration date, if earlier.

With respect to unvested options, in the event of death, disability, or retirement, such options would vest on the one-year anniversary of the date of termination of service and, since the one year vesting period would coincide with the one year permitted exercise period, notice of exercise would be required to be provided prior to the expiration of the one year period following termination, with exercise permitted immediately after the one year period, provided that no option would become vested after the expiration of its term and subject to restrictions based on incentive stock option treatment. In the event of an involuntary termination following a change in control, all unvested options would become exercisable (subject to the expiration provisions otherwise applicable to the option) and would be exercisable for a period of one year following such termination. If employment is terminated for cause or for any other reason, unvested options would expire and be forfeited.

All NEOs, including Mr. Kozlowski, have been granted RSUs under the 2018 Equity Incentive Plan and the 2020 Equity Incentive Plan. With respect to unvested RSUs, in the event of death, disability, or retirement, the unvested RSUs would vest on the one-year anniversary of such termination of service. In the event of an involuntary termination following a change in control, all unvested RSUs would become fully earned and vested immediately. In the event of a termination for cause or other termination, unvested RSUs would be forfeited.

See Exhibits 10.1.1 and 10.3 to our Annual Report on Form 10-K for the year ended December 31, 2023 for plan documents which detail the definitions related to the trigger events summarized above.

The following table sets forth the approximate payments that would have been made to the NEOs in the event of the termination of employment under the circumstances described below, assuming such termination took place on December 31, 2023.

NAME	PRINCIPAL POSITION	INVOLUNTARY TERMINATION FOLLOWING A CHANGE IN CONTROL ($)		DEATH, DISABILITY, RETIREMENT ($)
Damian M. Kozlowski(1)	Chief Executive Officer		6,422,193		6,422,193
Paul Frenkiel(2)	EVP, Chief Financial Officer		1,128,189		1,128,189
Olek DeRowe(2)	EVP, Head of Commercial Real Estate		2,052,510		2,052,510
John Leto(2)	EVP, Head of Institutional Banking		2,341,980		2,341,980
Ryan Harris(2)	EVP, Head of Fintech Solutions		2,341,980		2,341,980

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(1)

Amounts for Mr. Kozlowski were computed by (i) multiplying the December 31, 2023 share price of $38.56 times the number of his unvested RSUs and (ii) multiplying the number of his unvested stock options times the difference between the December 31, 2023 share price and the options’ exercise prices.

(2)

Amounts for Messrs. Frenkiel, DeRowe, Leto, and Harris consisted of multiplying the December 31, 2023 share price of $38.56 times the number of their unvested RSUs, as they had no unvested stock options.

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

The following discussion presents the potential payments for each of our NEOs upon a termination of employment or change in control. Pursuant to applicable SEC rules, the analysis contained in this discussion does not consider or include payments made to a NEO respect to contracts, agreements, plans, or arrangements to the extent they do not discriminate in scope, terms, or operation in favor of NEOs of the Company and that are available generally to all salaried employees. The actual amounts that would be paid upon a NEO’s termination of employment can only be determined at the time of such NEO’s termination. Due to the number of factors that affect the nature and amount of any ~~other director tendered because that director received~~compensation or benefits provided upon the termination events, such as the timing of a ~~majority against vote.~~termination event and the Company’s stock price, any actual amounts paid or distributed may be higher or lower than reported above. In ~~contested elections,~~accordance with SEC rules, this discussion assumes the ~~Company will use plurality voting. Each director nominee has indicated their willingness to~~relevant trigger event occurred on December 31, 2023.

The Company’s NEOs serve ~~on our Board. Each proxy will be voted “FOR”~~at the ~~election of such director nominees unless instructions are given on the proxy to vote “AGAINST” such director nominees.~~

If any nominee for director who is not an incumbent fails in an uncontested election to receive a majority of votes cast at a meeting of stockholders duly called and at which a quorum is present, such nominee will not be elected and will not take office. Alldiscretion of the Board of ~~Directors’ nominees~~Directors. We have not entered into formal employment agreements with any of our NEOs. In connection with Mr. Kozlowski’s hire in 2016, however, we provided him with a Letter Agreement (the “DK Letter Agreement”) outlining his basic compensation terms and providing for ~~election~~certain grants of equity compensation, among other things. The DK Letter Agreement specified that his employment was terminable by either party at any time with or without cause or advance notice. In the event of a NEO termination of employment for any reason whatsoever, any severance benefits or other cash payments, if any, would be negotiated on an individual basis.

CEO PAY RATIO

The following information about the relationship between the compensation of our median employee and the compensation of the Company's CEO, is provided in compliance with the requirements of Item 402(u) of Regulation S-K. For 2023, the median of the annual total compensation of all employees of the Company, other than the CEO, was $103,711, and the total compensation of the CEO was $5,776,593, as reported in the Summary Compensation Table above. Based on this information, for 2023, the ratio of the annual total compensation of the CEO to the annual total compensation of the median employee of the Company was approximately 56:1.

To identify the median employee and to determine the annual total compensation of the median employee and the CEO, the Company took the following steps:

■

The Company determined that as of December 29, 2023, the last payroll date in the last three months of fiscal year 2023, there were 757 employees. This population consisted of the Company’s full-time employees and an insignificant number of part-time employees. Independent contractors were not included in the employee count.

■

To identify the employee receiving the median amount of compensation in our employee population, the Company analyzed the salary, wages, and overtime pay of all employees, to account for employees who had only worked a ~~director~~portion of the year. The Company also considered additional compensation, consisting of 401(k) matches and health insurance. Since approximately 12% or less of Company employees receive equity awards, such awards were excluded from the compensation measure used to identify the median employee.

■

The Company identified its median employee using this compensation measure, which was consistently applied to all employees included in the calculation. Since all Company employees, including the CEO, are located in the United States, the Company did not make any cost-of-living adjustments.

■

Once the median employee was identified, the Company added together the elements of such employee’s compensation for 2023 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in total compensation of $103,711. The employee’s annual total compensation included the value of health care benefits, which were estimated at $11,284 per employee, including coverage for dependents. The Company’s 401(k) match was also included in the annual total compensation.

■

With respect to the total annual compensation of the CEO, the Company used the amount reported in the “Total” column of the Summary Compensation Table above.

PAY VERSUS PERFORMANCE TABLE

The following table and related disclosure are provided in compliance with SEC rules to summarize information regarding the relationship between “compensation actually paid” (as calculated under SEC rules) (“CAP”) for our CEO, who serves as our principal executive officer (“PEO”), and our non-PEO NEOs, on an average basis, and the Company’s financial performance.

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The methodology for calculating amounts presented in the “CAP” column for the PEO and “Average CAP” column for the non-PEO NEOs, including amounts that were deducted from and added to the Summary Compensation Table totals, is provided in the footnotes to the table.

	PEO				NON-PEO NEOS				VALUE OF INITIAL FIXED $100 INVESTMENT BASED ON:
YEAR(1)	SUMMARY COMPENSATION TABLE TOTAL ($)		CAP ($)(2)		AVERAGE SUMMARY COMPENSATION TABLE TOTAL ($)		AVERAGE CAP ($)(2)		COMPANY TOTAL SHAREHOLDER RETURN ($)		PEER GROUP TOTAL SHAREHOLDER RETURN ($)(3)		NET INCOME ($) (IN MILLIONS)		ROA		ROE(4)
2023		5,776,593		9,308,843		1,766,114		2,208,717		136		93		192.3		2.6%		26%
2022		5,163,721		6,111,718		1,440,330		1,454,993		112		82		130.2		1.8%		19%
2021		4,610,714		11,894,580		1,063,578		1,635,704		185		140		110.7		1.7%		18%
2020		4,665,714		7,714,341		913,486		1,121,643		105		89		80.1		1.3%		15%

(1)

Non-PEO NEOs consisted of Messrs. Frenkiel, DeRowe, Leto, and Harris in 2023, Frenkiel, Garry, Leto, and Harris in 2022, and Frenkiel, Connolly, Garry, and Pareigat in 2021 and 2020.

(2)

Values included in the “CAP” and “Average CAP” columns reflect the following adjustments from the values shown in the “Summary Compensation Table Total” and “Average Summary Compensation Table Total” columns, respectively (amounts shown for the non-PEO NEOs are averages).

(3)

For purposes of calculating peer group total shareholder return, the Nasdaq Bank Stock Index was used pursuant to Item 201(e) of Regulation S-K and as reflected in our Annual ~~Meeting~~Report on Form 10-K for the fiscal year ended December 31, 2023.

(4)

ROE was identified as our “company-selected measure” (“CSM”) for fiscal year 2023 because it represents, in our view, the most important measure used to link CAP to performance.

Reconciliation of Summary Compensation Table Total to CAP

YEAR	EXECUTIVE(S)	SUMMARY COMPENSATION TABLE TOTAL ($)		DEDUCT EQUITY AWARDS REPORTED IN SUMMARY COMPENSATION TABLE ($)		ADD YEAR END VALUE OF UNVESTED EQUITY AWARDS GRANTED IN YEAR ($)		CHANGE IN VALUE OF UNVESTED EQUITY AWARDS GRANTED IN PRIOR YEARS ($)		CHANGE IN VALUE OF EQUITY AWARDS GRANTED IN PRIOR YEARS WHICH VESTED IN YEAR ($)		CAP ($)
2023	PEO		5,776,593		2,000,000		2,554,581		2,046,475		931,194		9,308,843
2023	Non-PEO NEOs		1,766,114		1,343,750		1,473,252		130,347		182,753		2,208,717
2022	PEO		5,163,721		2,151,000		2,481,987		849,070		(232,060)		6,111,718
2022	Non-PEO NEOs		1,440,330		410,000		383,747		66,332		(25,416)		1,454,993
2021	PEO		4,610,714		1,601,000		2,645,690		5,404,398		834,778		11,894,580
2021	Non-PEO NEOs		1,063,578		195,000		262,370		337,484		167,272		1,635,704
2020	PEO		4,665,714		2,256,000		5,595,944		(199,002)		(92,315)		7,714,341
2020	Non-PEO NEOs		913,486		230,625		458,220		11,358		(30,796)		1,121,643

PAY VERSUS PERFORMANCE DESCRIPTIVE DISCLOSURE

Total shareholder returns are ~~incumbents. If an incumbent director’s offer~~one of ~~resignation~~the criteria in the scorecard and the Nasdaq Bank Stock Index is ~~accepted~~used for the table above. ROA and net income are also components of the “Balanced Scorecard: CEO Performance Matrix”in the financial metrics to budget comparison. While there is generally a direct relationship between these factors and the amount of compensation actually paid, final compensation paid is also impacted by the ~~Board of Directors, or if a non-incumbent nominee for director is not elected,~~other criteria in the ~~Board of Directors may fill any resulting vacancy or may decrease the size~~balanced scorecard. Additionally, based on progress over multi-year periods, amounts paid are intended to motivate management to further achieve longer-term financial goals. The Compensation Committee also compares total shareholder return and ROA (which incorporates net income) of the ~~Board~~Company to its proxy peer group in its determination of ~~Directors pursuant~~compensation which is also a component of the balanced scorecard. A more qualitative analysis is necessitated by considering financial performance being achieved versus risk associated with that performance. Such risk could negatively impact financial performance in the future after compensation has already been paid. These risks include credit, compliance, and regulatory risk. Assessment of these risks is also included in the balanced scorecard.

The amount actually paid to the ~~Company’s bylaws.~~

CEO in the pay for performance table reflected the appreciation in the stock price, which was consistent with the Compensation Committee’s intention to motivate management toward multiple year sustained financial progress and resulting shareholder returns.

2024 PROXY STATEMENT

TABLE OF CONTENTS

Proxy Summary

Proposal #1

Proposal #2

Proposal #3

Proposal #4

Other Matters

NEO compensation actually paid is also directly related to total shareholder return, net income, and ROA. While the NEOs’ roles within each of these criteria vary, their performance directly impacts financial measures. However, independent of those financial measures, compensation actually paid may reflect individual performance and achievements not adequately reflected in those measures.

TABULAR LIST OF IMPORTANT PERFORMANCE MEASURES

The ~~Board~~following is an unranked list of ~~Directors unanimously recommends a vote “FOR”~~ the ~~election~~most important financial performance measures, including the CSM, linking CAP to Company performance for fiscal year 2023:

	■ Return on Equity
	■ Return on Assets
	■ Net Income

EQUITY COMPENSATION PLAN INFORMATION

The following table summarizes equity compensation plan information for the 2018 Equity Incentive Plan and the 2020 Equity Incentive Plan as of ~~each nominee.~~

December 31, 2023.

PLAN CATEGORY	NUMBER OF SECURITIES TO BE ISSUED UPON EXERCISE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS (A)	WEIGHTED-AVERAGE EXERCISE PRICE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS (B)	NUMBER OF SECURITIES REMAINING AVAILABLE FOR FUTURE ISSUANCE UNDER EQUITY COMPENSATION PLANS (EXCLUDING SECURITIES REFLECTED IN COLUMN (A)) (C)
Equity compensation plans approved by security holders	1,374,932(1)	$15.35(2)	427,117
Equity compensation plans not approved by security holders	Not applicable	Not applicable	Not applicable
Total	1,374,932	$15.35	427,117

(1)

Includes 752,255 outstanding unvested RSUs which are awarded upon vesting without consideration from the recipient. RSUs have reduced the number of securities remaining available for future issuance in column (C).

(2)

Excludes 752,255 outstanding unvested RSUs which are awarded upon vesting without consideration from the recipient.

TABLE OF CONTENTS

Proxy Summary

Proposal #1

Proposal #2

Proposal #3

Proposal #4

Other Matters

STOCK OWNERSHIP AND SECTION 16
COMPLIANCE ~~AND HEDGING POLICY~~

The following table sets forth the number and percentage of the ~~Company’s~~shares of Common ~~Shares~~Stock beneficially owned as of ~~March 23, 2021,~~the Record Date by (i) each of the Company’s directors and named executive officers, (ii) all of the directors and executive officers as a group, and (iii) other persons who are known to the Company to beneficially own more than 5% of the ~~Company’s~~ outstanding ~~voting securities.~~shares of Common Stock. This information is reported in accordance with the beneficial ownership rules of the SEC, under which a person is deemed to be the beneficial owner of a security if that person has or shares voting power or investment power with respect to such security or has the right to acquire such ownership within 60 days. Shares issuable pursuant to options or warrants are deemed to be outstanding for purposes of computing the percentage of the person or group holding such options or warrants, but are not deemed to be outstanding for purposes of computing the percentage of any other person.

Common Percent
Non-NEO Directors ⁽²⁾ Shares ⁽¹⁾ of Class
Cohen, Daniel G. 226,868 ⁽³⁾ 0.4 %
Beach, Walter T. 65,100 ⁽⁴⁾ *
Bradley, Michael J. 110,100 ⁽⁵⁾ *
Chrystal, John C. 230,916 ⁽⁶⁾ *
Cohn, Matthew N. 136,163 ⁽⁷⁾ *
Eggemeyer, John M. 43,100 ⁽⁸⁾ *
Kozlov, Hersh 98,100 ⁽⁹⁾ *
Lamb, William H. 220,841 ⁽¹⁰⁾ *
McEntee III, James J. 119,070 ⁽¹¹⁾ *
Mielke, Daniela A. 35,370 ⁽¹²⁾ *
Mudick, Stephanie B. 15,100 ⁽¹³⁾ *
Tuan, Mei-Mei H. 51,100 ⁽¹⁴⁾ *

Named Executive Officers ⁽²⁾

Kozlowski, Damian 851,642 ⁽¹⁵⁾ 1.4 %
Frenkiel, Paul 198,209 ⁽¹⁶⁾ *
Connolly, Mark 123,283 ⁽¹⁷⁾ *
Garry, Gregor 32,320 ⁽¹⁸⁾ *
Pareigat, Thomas 74,994 ⁽¹⁹⁾ *

All executive officers and directors (17) persons 2,632,276 4.5 %

Owners of more than 5% of outstanding shares
Frontier Capital Management Co. LLC 5,024,953 ⁽²⁰⁾ 8.7 %
BlackRock, Inc. 4,440,623 ⁽²¹⁾ 7.7 %
Dimensional Fund Advisors, L.P. 3,772,269 ⁽²²⁾ 6.5 %

NAME AND ADDRESS OF BENEFICIAL OWNER

AMOUNT AND
NATURE OF
BENEFICIAL
OWNERSHIP(1)

PERCENT
OF CLASS

Independent Directors(2)

Bradley, Michael J.

65,422(3)

Cohn, Matthew N.

213,837(4)

Creuzot, Cheryl D.

5,620(5)

Eggemeyer, John M.

38,046(6)

Kozlov, Hersh

110,264(7)

Lamb, William H.

233,005(8)

McEntee III, James J.

132,000(9)

Mielke, Daniela A.

57,469(10)

Mudick, Stephanie B.

31,584(11)

Named Executive Officers(2)

Kozlowski, Damian M.

1,044,837(12)

2.0%

Frenkiel, Paul

156,694(13)

DeRowe, Olek

24,181(14)

Leto, John

155,019(15)

Harris, Ryan

66,865(16)

All executive officers and directors (18 persons)

2,720,330

5.2%

Owners of more than 5% of outstanding shares

BlackRock, Inc.

7,832,810(17)

14.8%

FMR LLC

4,724,668(18)

9.0%

The Vanguard Group

3,606,491(19)

6.8%

Less than 1%

(1)

Includes: (a) shares of Common Stock, (b) shares of Common Stock receivable upon vesting of RSUs within 60 days and (c) shares of Common Stock receivable upon exercise of options held by such person which are vested or will vest within 60 days.

(2)

The address of all the Company’s directors and executive officers is c/o The Bancorp, Inc., 409 Silverside Road, Suite 105, Wilmington, Delaware 19809.

(3)

Consists of: (a) 65,422 shares of Common Stock owned directly.

(4)

Consists of: (a) 52,061 shares of Common Stock owned directly, (b) 161,776 shares owned for the benefit of Mr. Cohn’s children.

(5)

Consists of: (a) 5,620 shares of Common Stock owned directly.

~~(1)~~50

Includes: (a) Common Shares, (b) Common Shares receivable upon vesting of restricted stock within 60 days of March 23, 2021 and (c) Common Shares receivable upon exercise of options held by such person which are vested or will vest within 60 days of March 23, 2021.

2024 PROXY STATEMENT

TABLE OF CONTENTS

~~(2)~~

~~The address of all of the Company’s directors and executive officers is c/o The Bancorp, Inc., 409 Silverside Road, Suite 105, Wilmington, Delaware 19809.~~

Proxy Summary

Proposal #1

Proposal #2

Proposal #3

Proposal #4

Other Matters

~~(3)~~

Consists of: (a) 116,633 Common Shares owned directly, (b) 50,000 Common Shares issuable upon exercise of options, (c) 235 Common Shares held in a 401(k) plan account for the benefit of Mr. Cohen, (d) 30,000 Common Shares owned by a charitable trust of which Mr. Cohen is a co-trustee and (e) 30,000 Common Shares owned by a family trust of which Mr. Cohen is a co-trustee. Mr. Cohen disclaims beneficial interest in shares owned by these trusts except for pecuniary interest.

~~(4)~~

~~Consists of: (a) 50,100 Common Shares owned directly and (b) options to purchase 15,000 Common Shares.~~

~~(5)~~

~~Consists of: (a) 95,100 Common Shares owned directly and (b) 15,000 Common Shares issuable upon exercise of options.~~

~~(6)~~

~~Consists of: (a) 225,916 Common Shares owned directly and (b) 5,000 Common Shares issuable upon exercise of options.~~

~~(7)~~

~~Consists of: (a) 121,163 Common Shares owned directly and (b) 15,000 Common Shares issuable upon exercise of options.~~

~~(8)~~

Consists of (a) 30,000 Common Shares and (b) 13,100 restricted stock units vesting on May 20, 2021 issued to Castle Creek Advisors IV LLC on behalf of Mr. Eggemeyer in his capacity as a member of the Board of Directors of the Company. Mr. Eggemeyer is a managing principal of Castle Creek Capital VI LLC, or CCC VI, the sole general partner of Castle Creek Capital Partners VI, LP, or CC Fund VI. Based solely on the Form 13D/A filed on February 8, 2021 by CC Fund VI, CC Fund VI has shared voting and dispositive power regarding 2,828,234 shares of Company common stock with CCC VI, the general partner of CC Fund VI and they ceased to be the beneficial owners of more than five percent of the outstanding shares of the Company’s common stock on February 5, 2021. Based solely on the Form 13D/A filed on June 4, 2020 by CC Fund VI, CCC VI has established a six-person investment committee to exercise such voting and dispositive power and no person other than Fund VI and CCC VI has beneficial ownership of the shares of Company common stock held by Fund VI. Based solely on the Form 4 filed by Mr. Eggemeyer on February 10, 2021, Mr. Eggemeyer disclaims beneficial ownership of the shares of the Company common stock owned by Fund VI and they are not included in the shares reported for Mr. Eggemeyer.

~~(9)~~

~~Consists of 98,100 Common Shares owned directly.~~

~~(10)~~

Consists of: (a) 191,673 Common Shares owned directly, (b) 14,168 Common Shares held in trusts for the benefit of members of Mr. Lamb’s immediate family, and (c) 15,000 Common Shares issuable upon exercise of options.

~~(11)~~

~~Consists of: (a) 104,070 Common Shares owned directly and (b) 15,000 Common Shares issuable upon exercise of options.~~

~~(12)~~

~~Consists of (a) 18,590 Common Shares owned directly and (b) 16,780 shares owned indirectly by a family member.~~

~~(13)~~

~~Consists of 15,100 Common Shares owned directly.~~

~~(14)~~

~~Consists of 51,100 Common Shares owned directly.~~

~~(15)~~

~~Consists of: (a)~~ 399,296 Common Shares owned directly, (b) 4,460 Common Shares held for the benefit of members of Mr. Kozlowski’s immediate family (c) 432,552 Common Shares issuable upon exercise of options and (d) 15,334 Common Shares held in a 401(k) plan account for the benefit of Mr. Kozlowski.

~~(16)~~

Consists of: (a) 94,988 Common Shares owned directly, (b) 98,000 Common Shares issuable upon exercise of options and (c) 5,221 Common Shares held in a 401(k) plan account for the benefit of Mr. Frenkiel.

~~(17)~~

~~Consists of 120,105 Common Shares owned directly and (b) 3,178 Common Shares held in a 401(k) plan account for the benefit of Mr. Connolly.~~

~~(18)~~

~~Consists of 28,439 Common Shares owned directly and (b) 3,881 Common Shares held in a 401(k) plan account for the benefit of Mr. Garry.~~

~~(19)~~

Consists of: (a) 35,676 Common Shares owned directly, (b) 35,000 Common Shares issuable upon exercise of options and (c) 4,318 Common shares held in a 401 (k) plan account for the benefit of Mr. Pareigat.

~~(20)~~

Based solely on Form 13G/A filed by Frontier Capital Management Co., LLC, or Frontier, on February 16, 2021 reporting that Frontier has sole dispositive power over 5,024,953 shares of Company common stock and sole voting power over 2,121,976 shares of Company common stock. The address of Frontier is 99 Summer Street, Boston, MA 02110.

~~(21)~~

Based solely on Form 13G/A filed by BlackRock, Inc, or BlackRock, on January 29, 2021, on behalf of itself and its subsidiaries, BlackRock Life Limited, BlackRock Advisors, LLC, BlackRock Investment Management (UK) Limited, BlackRock Asset Management Canada Limited, BlackRock (Netherlands) B.V., BlackRock Fund Advisors, BlackRock Asset Management Ireland Limited, BlackRock Institutional Trust Company, National Association, BlackRock Financial Management, Inc., BlackRock Japan Co., Ltd., BlackRock Asset Management Schweiz AG and BlackRock Investment Management, LLC. This Form 13G/A reports that BlackRock and these subsidiaries have sole dispositive power over 4,440,623 shares of Company common stock and sole voting power over 4,250,106 shares of Company common stock. The address of BlackRock, Inc. is 55 East 52^nd ~~Street, New York, New York 10055.~~

~~(22)~~

Based solely on Form 13G/A filed by Dimensional Fund Advisors LP, or Dimensional Fund, on March 9, 2021, Dimensional Fund has sole dispositive power regarding 3,772,269 shares of Company common stock and sole voting power regarding 3,588,083 shares of Company common stock. Such Form 13G/A reports that Dimensional Fund, an investment adviser, furnishes investment advice to four investment companies and serves as investment manager or sub-adviser to certain other commingled funds, group trusts and separate accounts (collectively referred to as the “Funds”). Such Form 13G/A reports that, in these roles, Dimensional Fund may possess voting and/or investment power over the securities of the Issuer that are owned by the Funds and may be deemed to be the beneficial owner of the shares of the Issuer held by the funds. Such Form 13G/A reports that all securities being are owned by the Funds and Dimensional Fund disclaims beneficial ownership of such securities. The address of Dimensional Fund is 6300 Bee Cave Road, Building One, Austin, TX 78746.

~~Section 16 Compliance~~

(6)

Consists of: (a) 9,700 shares of Common Stock held by Castle Creek Advisors IV LLC, which were issued to Castle Creek Advisors IV LLC on behalf of Mr. Eggemeyer in his capacity as a member of the Board of Directors of the Company; and (b) 28,346 shares of Common Stock that Mr. Eggemeyer holds directly, as reported on a Form 4 filed by Mr. Eggemeyer on May 31, 2023.

(7)

Consists of 110,264 shares of Common Stock owned directly.

(8)

Consists of: (a) 211,727 shares of Common Stock owned directly and (b) 21,278 shares of Common Stock held in trusts for the benefit of members of Mr. Lamb’s immediate family.

(9)

Consists of: (a) 132,000 shares of Common Stock owned directly.

(10)

Consists of (a) 30,754 shares of Common Stock owned directly and (b) 26,715 shares owned indirectly by a family member.

(11)

Consists of 31,584 shares of Common Stock owned directly.

(12)

Consists of: (a) 520,043 shares of Common Stock owned directly, (b) 4,460 shares of Common Stock held for the benefit of members of Mr. Kozlowski’s immediate family (c) 504,497 shares of Common Stock issuable upon exercise of options and (d) 15,837 shares of Common Stock held in a 401(k) plan account for the benefit of Mr. Kozlowski.

(13)

Consists of: (a) 151,471 shares of Common Stock owned directly and (c) 5,222 shares of Common Stock held in a 401(k) plan account for the benefit of Mr. Frenkiel.

(14)

Consists of 20,707 shares of Common Stock owned directly and (b) 3,474 shares of Common Stock held in a 401(k) plan account for the benefit of Mr. DeRowe.

(15)

Consists of 151,859 shares of Common Stock owned directly and (b) 3,160 shares of Common Stock held in a 401(k) plan account for the benefit of Mr. Leto.

(16)

Consists of: (a) 64,506 shares of Common Stock owned directly and (b) 2,359 shares of Common Stock held in a 401(k) plan account for the benefit of Mr. Harris.

(17)

Based solely on Schedule 13G/A filed by BlackRock, Inc, or BlackRock, on January 23, 2024, on behalf of itself and its subsidiaries, BlackRock Life Limited, BlackRock Advisors, LLC, Aperio Group, LLC, BlackRock Fund Advisors (beneficially owns 5% or greater of the outstanding shares of the security class being reported on), BlackRock Institutional Trust Company, National Association, BlackRock Asset Management Ireland Limited, BlackRock Financial Management, Inc., BlackRock Asset Management Schweiz AG, BlackRock Investment Management, LLC, BlackRock Investment Management (UK) Limited, BlackRock Asset Management Canada Limited, BlackRock Investment Management (Australia) Limited and BlackRock Fund Managers Ltd. This Schedule 13G/A reports that BlackRock and these subsidiaries have sole dispositive power over 7,832,810 shares of Common Stock and sole voting power over 7,779,578 shares of Common Stock. The address of BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055.

(18)

Based solely on Schedule 13G filed by FMR LLC and Abigail P. Johnson, the Chairman and CEO of FMR LLC, on February 8, 2024. The address of FMR LLC and Ms. Johnson is 245 Summer Street, Boston, MA 02210.

(19)

Based solely on Schedule 13G/A filed by The Vanguard Group on February 13, 2024. The Vanguard Group reports that the aggregate amount it beneficially owns is 3,606,491 shares of Common Stock, and it has sole dispositive power regarding 3,459,782 shares of Common Stock, shared dispositive power regarding 146,709 shares of Common Stock and shared voting power regarding 98,112 shares of Common Stock. The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355.

DELINQUENT SECTION 16(A) REPORTS

Section 16(a) of the ~~Securities~~ Exchange Act, ~~of 1934, as amended (the “Exchange Act”),~~ requires the Company’s officers, directors, and persons who beneficially own more than ten percent (10%) of a registered class of the Company’s equity securities to file reports of ownership and changes in ownership with the SEC and to furnish the Company with copies of all such reports.

Based solely on its review of such beneficial ownership reports electronically filed with the ~~reports received by it,~~SEC, the Company believes that, during ~~2020,~~2023, no officers, directors, or beneficial owners of more than ten percent (10%) of the Company’s Common Stock failed to file reports of ownership and changes of ownership on a timely ~~basis.~~

~~Hedging Policy~~

basis, except for one Form 4 filed on March 27, 2023 related to a single sales transaction for Mr. DeRowe which occurred on February 14, 2023.

TABLE OF CONTENTS

Proxy Summary

Proposal #1

Proposal #2

Proposal #3

Proposal #4

Other Matters

The ~~Company~~Audit Committee has an Insider Trading Policy that prohibits hedging transactions. The policy may be accessed at https://investors.thebancorp.com/corporate-information/governance-documents/default.aspx. The prohibition against hedging isappointed Crowe LLP (“Crowe”) as ~~follows:~~

PROHIBITED TRANSACTIONS. The Company considers it improper and inappropriate for any employee, officer or director to engage in speculative transactions in Company securities. It therefore is Company policy that insiders may not engage in any of the following transactions:

Hedging Transactions. Certain forms of hedging or monetization transactions, such as zero-cost collars and forward sale contracts, allow an employee, officer or director to lock in much of the value of his or her stock holdings, often in exchange for all or part of the potential for upside appreciation in the stock. These transactions allow the employee, officer or director to continue to own the covered securities, but without the full risks and rewards of ownership. In these situations, the employee, officer or director may no longer have the same objectives as other shareholders. Therefore, employees, officers and directors are prohibited from engaging in any such transactions.

~~NAMED EXECUTIVE OFFICERS~~

~~Information is set forth below regarding the background of each of~~ the Company’s executive officers who is not also a director. For the Company’s officer who is a director nominee, Damian Kozlowski, this information can be found above under “Proposal 1. Election of Directors—Directors and Nominees.”

~~Mark Connolly,~~ ~~age 53, joined The Bancorp in June 2016 and has served as Executive Vice President and Head of Credit Markets since February 2017 and Chief Credit Officer since December 2019. From 2013~~independent registered public accounting firm to 2015, Mr. Connolly held a variety of senior management roles including Chief Financial Officer, Head of Operations and Head of Financial Services of Tresata, Inc., a data analytics software company. Previously, from 2010 to 2012, Mr. Connolly served as Managing Director – Private Bank Head of Products which included US Lending, Mortgages, Banking and Trust Services at Morgan Stanley Wealth Management. Additionally, Mr. Connolly served as the Co-Chief Executive Officer/Chief Operating Officer of the U.S. Private Bank at Citi Global Wealth Management from 2009 to 2010 and served as the Head of U.S. Lending, Mortgages, Banking and Trust Services at Citi Global Wealth Management from 2005 to 2010. Before joining Citigroup, Mr. Connolly also held a senior management position within Bank of America’s Corporate and Investment Bank from 1998 to 2005.

~~Paul Frenkiel~~, age 68, has served as Chief Financial Officer and Executive Vice President of Strategy at The Bancorp since joining the organization in September 2009; he also serves as the organization’s Principal Accounting Officer. From November 2000 through October 2008 he was Chief Financial Officer and Executive Vice President of Republic First Bancorp Inc. From January 2005 through September 2009, Mr. Frenkiel also served as Chief Financial Officer and in other capacities for First Bank of Delaware, which was spun off from Republic First Bancorp Inc. Additionally, he served as Chief Financial Officer of JeffBanks, Inc., from 1987 through its acquisition by Hudson United Bancorp in 2000, and also served as Chief Financial Officer at Dominion Bank. A chartered bank auditor and certified public accountant, Mr. Frenkiel is a member of the American Institute of Certified Public Accountants.

~~Gregor Garry,~~ age 37, has served as the Chief Operating Officer and Executive Vice President at The Bancorp since July 2019. He has also served as the organization’s Chief Risk Officer, Deputy Chief Operating Officer, Chief Audit Executive, and Vice President of Internal Audit since joining The Bancorp in October 2014. From December 2009 – October 2014 he served as the Internal Audit Manager and in other capacities for The First National Bank in Sioux Falls, Sioux Falls, South Dakota. From July 2007 – December 2009 Mr. Garry was a Senior Management Consultant for Milo Belle Consultants. Mr. Garry is a Certified Internal Auditor, a Certified Fiduciary and Investment Risk Specialist, and holds a certification in Risk Management Assurance.

~~Thomas Pareigat~~, age 61, has served as General Counsel since February 2011. From 2003 to 2005 and from 2007 to 2011 he was a partner in the Minneapolis, Minnesota law firm of Lindquist & Vennum LLP, where he concentrated his practice on banking law and regulatory compliance matters as a member of the firm’s Financial Institutions Practice Group. Between 2005 and 2007 he served as Senior Vice President and Regulatory Counsel for Marshall BankFirst Corp. From 2001 to 2002, Mr. Pareigat was Vice President and Corporate Counsel for Marquette Bancshares, Inc. and its subsidiary banks until their acquisition by Wells Fargo. From 1989 to 2001 he served as Senior Attorney with Bankers Systems, Inc. (now Wolters Kluwer Financial Services). A frequent speaker on emerging risk issues withinaudit the financial services industry, Mr. Pareigat serves on the Editorial Board of the American Bankers Association’s Bank Compliance magazine and has served on the faculty of the ABA’s National Compliance School and Graduate School for Compliance Risk Management.

~~CORPORATE GOVERNANCE~~

~~Director Independence~~

The Common Shares are listed on the NASDAQ Global Select Market under the symbol “TBBK.” The Board of Directors has determined that each of the directors meet the definition of an independent director set forth in the NASDAQ listing standards and the Bancorp Director Independence Categorical Standards, or the Director Independence Standards, except for Messrs. Cohen and Kozlowski who are Chairman of the Board and Chief Executive Officer and Presidentstatements of the Company ~~and~~for the ~~Bank, respectively. The Company’s independent directors are~~ ~~Mr. Beach, Mr.~~ ~~Bradley, Mr.~~ ~~Chrystal, Mr.~~ ~~Cohn, Mr. Eggemeyer, Mr. Kozlov, Mr. Lamb, Mr.~~ ~~McEntee, Ms.~~ ~~Mielke, Ms.~~ ~~Mudick and Ms.~~ ~~Tuan.~~ In making these determinations, the Board of Directors reviewed information from each of these directors concerning all their respective relationships with the Company and its affiliates and analyzed the materiality of those relationships. In considering the independence of Mr. Kozlov, the Board considered that Mr. Kozlov is a partner at Duane Morris LLP, or Duane Morris, an international law firm, and that the Company paid amounts to Duane Morris for legal services described below under “Certain Relationships and Related Party Transactions.” The Board confirmed that these payments did not exceed 5% of Duane Morris’ consolidated gross revenues for 2020 and so did not preclude the Board determining Mr. Kozlov to be independent under NASDAQ listing standards and further determined that this relationship would not interfere with his exercise of independent judgment in carrying out his responsibilities as a director.

~~Board Leadership and Committee Structure and Role in Risk Oversight~~

~~Daniel G. Cohen serves as~~fiscal year ending December 31, 2024. Although the Company’s ~~Chairman~~governing documents do not require the submission of Crowe’s appointment to the ~~Board and Damian M. Kozlowski serves as its Chief Executive Officer and as a director. The~~Company’s stockholders for ratification, the Company believes that soliciting stockholders’ input is a matter of good corporate governance. If the ~~most effective leadership structure at~~appointment of Crowe is not ratified, our Audit Committee may reconsider the present time is to have separate Chairman of the Board and Chief Executive Officer positions because this allows the board to benefit from having two strong voices bringing separate views and perspectives to meetings. In addition, since August 2015, Michael J. Bradley has served as the lead independent director of the Board of Directors. In this role, Mr. Bradley acts as an alternative point of contact between other directors and the Chairman of the Board, and facilitates executive sessions held by the independent directors.

During 2020, five of the seven standing committees of the Board assisted the Board of Directors with risk oversight: the Risk Committee, the Complaint and Error Claim Committee, the Bank Secrecy Act, or BSA Committee,appointment; however, the Audit Committee ~~and the Compensation Committee. These committees each perform risk-related oversight functions on behalf of the Board and report regularly~~will not be obligated to ~~the Board of Directors, which also considers the Company’s entire risk profile, including additional strategic and reputational risks.~~

~~The Risk Committee meets at least quarterly, and, while the Board of Directors and all of its committees are sensitive to risks related to the Company and its operations, the Risk Committee~~change or retain a different independent registered public accounting firm. Even if Crowe’s appointment is primarily responsible for overseeing the Company’s enterprise risk management processes on behalf of the Board of Directors. The Company’s Chief Risk Officer meets at least quarterly with the Risk Committee to discuss potential risk or control issues that are monitored through the Company’s enterprise risk management framework. Other key control function officers of the Company also provide reporting to the Risk Committee. Members of the Risk Committee also serve as members of a subcommittee, known as the Consent Order Oversight Committee, or Oversight Committee which was formed as a requirement of the Bank’s 2015 Consent Order, or the 2015 Consent Order, with the Federal Deposit Insurance Corporation, or the FDIC. The Oversight Committee meets at least quarterly to oversee the Bank’s compliance with the requirements of the 2015 Consent Order as it relates to the Bank’s consumer compliance, third-party risk management and compliance auditing functions. The 2015 Consent Order which required the formation of the Oversight Committee was terminated by the FDIC on November 17, 2020.

The Complaint and Error Claim Committee, or the CECC, is also comprised of directors who serve on the Risk Committee. The CECC was formed as a requirement of the 2015 Consent Order. This committee meets monthly and focuses on the process for handling, monitoring and resolving customer complaints and Regulation E error claims received directly by the Bank or through its third-party product contributors. The 2015 Consent Order which required the formation of CECC was terminated by the FDIC on November 17, 2020.

The BSA Committee, required by a 2014 Consent Order, or the 2014 Consent Order, between the Bank and the FDIC, meets monthly and oversees compliance with BSA and anti-money laundering regulations and identified risks, compliance with the requirements of the 2014 Consent Order, and the implementation of the Company’s financial crimes risk management program. The 2014 Consent Order, which required the formation of the BSA Committee was terminated by the FDIC on May 20, 2020.

~~The Audit Committee meets at least quarterly, and focuses on financial reporting risk, oversees the entire audit function and evaluates the effectiveness of internal and external audit efforts.~~

~~The role of the Compensation Committee in providing oversight of compensation risk is described below.~~

These committees receive reports from management regularly regarding the Company’s assessment of risks and the adequacy and effectiveness of internal control systems. Through their interaction with the Company’s senior management, these committees oversee credit risk, market risk (including liquidity and interest rate risk) and operational risk (including compliance and legal risk). With the Bank’s successful emergence from the terminated 2014 Consent Order and 2015 Consent Order, the Board evaluated the Board’s committee structure related to risk management and determined that it would be consistent with the Board’s commitment to effective risk oversight to consolidate the CECC and the BSA Committee into the oversight duties of the Risk Committee. The Board has determined to make this consolidation effective as of April 1, 2021.

While the Board of Directors oversees the Company’s risk management across the enterprise, senior management at the Company and Bank are responsible for the day-to-day risk management processes and implementation of risk management programs. Senior management comprises the Company’s Enterprise Risk Management Committee which meets at least quarterly and addresses various risks, controls and related monitoring. While the Board of Directors believes that this division of responsibility is the most effective approach for addressing the risks facing the Company, it will continue to re-examine this structure on a regular basis, recognizing that different structures may be appropriate in different situations faced by the Company.

~~Board Meetings~~

The Board of Directors held a total of 12 meetings during 2020. During 2020 all directors attended at least 75% of the aggregate of (a) the total number of meetings of the Board of Directors held during the period for which the director had been a director and (b) the total number of meetings held by all committees of the Board of Directors on which the director served during the periods that the director served. It is the policy of the Board of Directors that all directors attend the annual meeting of stockholders of the Company, if practicable. All directors attended the last annual meeting.

~~Communications with the Board~~

Stockholders, employees and others who wish to communicate with the Board of Directors may do so by sending their correspondence to The Bancorp, Inc., Attention: Paul Frenkiel, Secretary, 409 Silverside Road, Suite 105, Wilmington, Delaware 19809. The mailing envelope must contain a clear notation indicating that the enclosed letter is a “Stockholder-Board Communication.” All such letters must identify the author as a stockholder of the Company and clearly state whether the intended recipients are all or individual members of the Board. The Secretary will make copies of all such letters and circulate them to the appropriate director or directors. The Secretary has been authorized to screen commercial solicitations and materials which pose security risks, are unrelated to the business or governance of the Company or are otherwise inappropriate.

~~Corporate Governance Materials~~

The Company’s Code of Ethics and Business Conduct (the “Code of Business Conduct”) which applies to all employees, including our principal executive officer, principal financial officer and principal accounting officer, Corporate Governance Guidelines, Director Independence Standards, Insider Trading Policy and the charters ofratified, the Audit Committee may select a different independent registered public accounting firm at any time during the ~~Compensation Committee and the Nominating and Governance Committee are available on the Company’s website: https://investors.thebancorp.com/corporate-information/governance-documents/default.aspx.~~

Copies of these documents are available, free of charge, upon written request to: The Bancorp, Inc., Attention: Andres Viroslav, Investor Relations, 409 Silverside Road, Suite 105, Wilmington, Delaware 19809. The Company will satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of the Code of Business Conduct by posting such information on the Company’s website.

~~Board Committees~~

During 2020, the Board of Directors had seven standing committees: Audit Committee, Compensation Committee, Risk Committee, Complaint and Error Claim Committee, BSA Committee, Nominating and Governance Committee and Executive Committee. The committees on which directors serve, the chairperson of each committee, and the number of meetings held during 2020 are set forth below. Mr. Kozlowski is not listed because he did not serve on any committee during 2020.

Board Member Audit Compensation Risk
Bank
Secrecy
Act
Nominating
and
Governance
Executive
Complaint
and
Error Claim
Daniel G. Cohen Chair
Walter T. Beach Chair
Michael J. Bradley Chair X
John C. Chrystal X X Chair X X
Matthew N. Cohn X X
John M. Eggemeyer X X
William H. Lamb X X
Hersh Kozlov (1) X X
James J. McEntee III Chair X Chair
Daniela A. Mielke X X X
Stephanie B. Mudick X X X
Mei-Mei H. Tuan (2) X Chair X

Meetings held in 2020
7 4 4 12 5 - 12

~~(1)~~

~~Mr. Kozlov resigned from the Compensation Committee effective April 29, 2020 and was added to the Risk Committee and the Complaint and Error Claim Committee effective October 21, 2020.~~

~~(2)~~

~~Ms. Tuan was added to the Compensation Committee effective October 21, 2020.~~

~~Audit Committee.~~ The Audit Committee is appointed by the Board of Directors to assist the Board of Directors’ audit-related oversight of (a) the integrity of the Company’s financial statements, (b) the Company’s compliance with legal and regulatory requirements, (c) the independent auditor’s qualifications and independence and (d) the performance of the Company’s internal audit function and independent auditors. The Audit Committee also preparesyear if the Audit Committee ~~Report required by the rules of the SEC to~~determines that such change would be ~~included~~ in the Company’s annual Proxy Statement. Each member of the Audit Committee meets the independence standards for Audit Committee members set forth in applicable NASDAQ rules, as well as those set forth in Rule 10A-3(b)(1) of the Exchange Act. The Board of Directors has determined that Mr. Bradley qualifies as an “Audit Committee financial expert” as that term is defined in applicable SEC rules and regulations.

~~Compensation Committee.~~ The Compensation Committee is appointed by the Board of Directors to have direct responsibility for approving the compensation of the Chief Executive Officer and certain other officers and the non-management directors of the Company as described in “Compensation Committee Report” and the related “Compensation Discussion and Analysis” below. The Compensation Committee also (a) administers the Company’s equity-based compensation plans and (b) reviews any extraordinary bonus or other compensatory payments to any employee of the Company. For officers and employees reporting to named executive officers, or NEOs, the Compensation Committee has delegated primary responsibility for recommending salary changes to the President and Chief Executive Officer. All of the members of this committee have been determined by the Board of Directors to be independent under applicable NASDAQ and SEC rules and regulations, as well as the Director Independence Standards.

~~Risk Committee.~~ The Risk Committee is appointed by the Board of Directors to oversee the Company’s enterprise risk management framework, including management’s efforts related to risk assessment and the implementation of risk-related policies, programs and practices used in identifying and managing Company risks. The Committee meets at least quarterly with the Company’s Chief Risk Officer and other key control function officers. A subset of members of this committee served as the Bank’s Consent Order Oversight Committee for purposes of confirming compliance with the requirements of the 2015 Consent Order which was terminated by the FDIC on November 17, 2020. Additionally, the members of this Committee served as members of the CECC and the BSA Committee, which focused on consumer compliance risks and BSA risks, respectively. See “—Board Leadership and Committee Structure and Role in Risk Oversight.”

~~Nominating and Governance Committee.~~ The Nominating and Governance Committee is appointed by the Board of Directors to (i) assist the Company and the Board of Directors in maintaining an effective and knowledgeable Board of Directors, including assisting the Board of Directors in identifying individuals qualified to become directors and recommending to the Board of Directors the director nominees for the next annual meeting of stockholders; (ii) reviewing the Board’s committee composition and making membership recommendations as needed; and (iii) overseeing the Company’s environmental, social and governance, or ESG, practices and related policies and practices including human capital management, diversity and inclusion, health and safety issues, corporate social responsibility and other ESG-related activities. All of the members of this committee have been determined by the Board of Directors to be independent under applicable NASDAQ and SEC rules and regulations, as well as the Director Independence Standards.

The Nominating and Governance Committee will consider candidates for nomination as a director recommended by stockholders, directors, officers, third party search firms and other sources. The procedures for nominations by stockholders are described below in a section titled “Stockholder Proposals and Nominations”. The Company describes how it addresses such submissions in the “Submission of Director-Nominee Candidate” section of the Corporate Governance Guidelines which may be accessed at https://investors.thebancorp.com/corporate-information/governance-documents/default.aspx. In evaluating candidates, the Nominating and Governance Committee considers the attributes of the candidate (including skills, experience, diversity, age, and legal and regulatory requirements) and the needs of the Board of Directors, and will review all candidates in the same manner, regardless of the source of the recommendation.

The Nominating and Governance Committee has not adopted specific, minimum qualifications or specific qualities or skills that must be met by a Nominating and Governance Committee-recommended nominee. The Board will consider the overall experience and expertise represented by the Board as well as the qualifications of each candidate. During the evaluation process, the Committee and the Board will take the following standards into account:

At least a majority of the Board must be comprised of “independent” directors determined in accordance with the requirements of the Nasdaq Rules and any additional “independence” standards established by the Board from time to time.

Candidates should be capable of working in a collegial manner with persons of different educational, business and cultural backgrounds and should possess skills and expertise that complement the attributes of the existing directors.

~~Candidates should represent a diversity of viewpoints, backgrounds, experiences and other demographics, and ties to the Company’s markets.~~

~~Candidates should demonstrate notable or significant achievement and possess senior-level business, management, legal or regulatory experience that would benefit the Company.~~

~~Candidates shall be individuals of the highest character and integrity.~~

~~Candidates shall be free from any conflict of interest that would interfere with their ability to properly discharge their duties as a director or would violate any applicable law or regulation.~~

~~Candidates shall be capable of devoting the necessary time to discharge their duties, taking into account memberships on other Boards and other responsibilities.~~

~~Candidates shall have the desire to represent the~~best interests ~~of all stockholders.~~

The Nominating and Governance Committee seeks to ensure that the membership of the Board of Directors and each committee of the Board of Directors satisfies all relevant NASDAQ rules and applicable laws and regulations and all requirements of the Company’s governance documents. The Nominating and Governance Committee seeks to achieve a mixture of skills that are related to the Company’s business. The nature of the specific qualifications, qualities or skills that the Nominating and Governance Committee may look for in any particular director nominee depends on the qualifications, qualities and skills of the rest of the directors at the time of any vacancy on the Board of Directors.

~~Executive Committee.~~ ~~The Executive Committee has the delegated authority to act in lieu of the Company’s Board of Directors in between meetings of the Board.~~

~~Compensation Committee Interlocks and Insider Participation~~

Messrs. Beach, Lamb, Kozlov and Ms. Tuan were all directors who served as a member of the Compensation Committee during 2020. Ms. Tuan served on the Compensation Committee since October 21, 2020. Mr. Kozlov served on the Compensation Committee during 2020 until he resigned from the Compensation Committee effective April 29, 2020. As described below under “Certain Relationships and Related Party Transactions,” Mr. Kozlov is a partner at Duane Morris LLP, or Duane Morris, an international law firm. The Company paid Duane Morris $1.7 million in 2020 for legal services.

No executive officer of the Company served on the board of directors or compensation committee of any entity that has one or more executive officers serving as members of the Company’s Board of Directors or Compensation Committee.

~~CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS~~

Under the Code of Business Conduct, the Company has established a procedure regarding the review and approval of transactions that would be required to be reported under Item 404 of Regulation S-K. Under this procedure, the Audit Committee must approve any such transaction and find it to be on terms comparable to those available on an arms’ length basis from an unaffiliated third party or find that it otherwise does not create a conflict of interest. If the Audit Committee finds a conflict of interest to exist with respect to a particular transaction, that transaction is prohibited unless a waiver of the Code of Business Conduct is approved by the Audit Committee.

The Bank has entered into lending transactions in the ordinary course of business with directors, executive officers, principal stockholders and affiliates of such persons. All loans were made on substantially the same terms, including interest rate and collateral, as those prevailing at the time for comparable loans with persons not related to the lender. At December 31, 2020, these loans were current as to principal and interest payments and did not involve more than normal risk of collectability or present other unfavorable features. At December 31, 2020, loans to these related parties amounted to $4.7 million.

The Bank has periodically purchased securities under agreements to resell and engaged in other securities transactions through J.V.B. Financial Group, LLC, or JVB, a broker dealer in which the Company’s Chairman is a registered representative and has a minority interest. The Company’s Chairman also serves as the President, a director and the Chief Investment Officer of Cohen & Company Financial Limited (formerly Euro Dekania Management Ltd.), a wholly-owned subsidiary of Cohen & Company Inc. (formerly Institutional Financial Markets Inc.), the parent company of JVB. In 2020, the Company did not purchase any securities from JVB. In 2019, the Company purchased $2.3 million of government guaranteed SBA loans for Community Reinvestment Act purposes from JVB. Prices for the SBA loans are verified to market rates and no separate commissions or fees are paid to that firm. The Company previously purchased securities under agreements to resell through JVB primarily consisting of Government National Mortgage Association certificates which are full faith and credit obligations of the United States government issued at competitive rates. JVB fully complied with the terms of the repurchase agreements. There were no repurchase agreements outstanding at December 31, 2020 respectively.

~~Mr. Hersh Kozlov, a director of the Company, is a partner at Duane Morris LLP, or Duane Morris, an international law firm. The Company paid Duane Morris $1.7 million in 2020 for legal services.~~

~~PROPOSAL 2. ADVISORY (NON-BINDING) VOTE ON EXECUTIVE COMPENSATION~~

~~Introduction~~

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) requires public companies to provide their stockholders with a non-binding vote to approve executive compensation at least once every three years, or more frequently, as directed by stockholder vote. The Company is seeking this stockholder advisory vote on its executive compensation in accordance with applicable SEC rules and pursuant to the stockholder vote of the Company’s 2017 annual meeting that required the advisory vote to be on an annual basis.

~~The Board of Directors Supports a Say-On-Pay Vote and Will Consider the Results Carefully.~~

At the Company’s 2020 Annual Meeting, 96% of the votes cast approved the Company’s 2019 executive compensation program, compared to 70% of the votes cast for the Company’s 2018 executive compensation program at the Company’s 2019 Annual Meeting. At the Company’s 2018 Annual Meeting, 53% of the votes cast approved the Company’s 2017 executive compensation program. Notwithstanding that 70% of stockholders approved the 2018 program, the Compensation Committee acted on stockholder feedback to increase the approval rate. The Compensation Committee restructured the CEO’s compensation to “pay for performance” and made other changes to address input from stockholders and their advisors. The restructuring of the CEO’s compensation and other changes are described in a chart in the Compensation Discussion and Analysis, or CD&A, below. The Board of Directors values the Company’s stockholders’ opinions. As it does each year, the Board of Directors intends to evaluate the results of the advisory vote on compensation carefully when making future decisions regarding compensation of the named executive officers.

~~Compensation of Named Executive Officers~~

As described in the CD&A below, the Compensation Committee has developed an executive compensation program designed to align the long-term interests of the Company’s named executive officers with the long-term interests of its stockholders. The disclosure in the CD&A and the disclosure included in the section entitled “Executive and Director Compensation” below have been provided in response to the requirements of SEC rules and explain the compensation policies under which the Company paid its named executive officers in 2020.

~~Advisory or Non-Binding Effect of Vote~~

Under the Dodd-Frank Act and the related SEC rules, your vote on this resolution is an advisory or “non-binding” vote. This means that the purpose of the vote is to provide stockholders with a method to give their opinion to the Board of Directors about certain issues, like executive compensation. The Board of Directors is not required by law to take any action in response to the stockholder vote. However, the Board of Directors values the Company’s stockholders’ opinions, and the Board of Directors intends to evaluate the results of the vote carefully when making future decisions regarding compensation of the named executive officers. The Company believes that providing its stockholders with an advisory vote on its executive compensation program will further enhance communication with stockholders, while also meeting the Company’s obligations under the Dodd-Frank Act and applicable SEC’s rules.

~~Resolution~~

~~The Board of Directors recommends that stockholders approve the following resolution:~~

RESOLVED, that the compensation paid to named executive officers, as disclosed in the Company’s Proxy Statement for its 2021 Annual Meeting of Stockholders pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.

~~The Board of Directors unanimously recommends a vote “FOR” approval of the compensation of executive officers as described in this Proxy Statement.~~

~~COMPENSATION DISCUSSION AND ANALYSIS~~

~~General~~

The Company is required under SEC disclosure rules to provide information in this Proxy Statement regarding its compensation program in place for its Chief Executive Officer, Chief Financial Officer and its three other most highly compensated executive officers. The Company must also provide compensation information for up to two additional individuals who would have been included but for the fact that they were not executive officers at the end of the fiscal year. There were no such additional individuals during 2020. This discussion refers to the Company’s Chief Executive Officer, Chief Financial Officer and the three other most highly-compensated executive officers as “Named Executive Officers” or “NEOs.” This discussion should be read in conjunction with the detailed tables and narrative descriptions under “Executive and Director Compensation.”

The Compensation Committee is responsible for formulating and presenting recommendations to the Board of Directors with respect to the compensation of the Company’s NEOs. The Compensation Committee is also responsible for administering the Company’s employee benefit plans, including incentive plans. The Compensation Committee is comprised solely of independent directors.

~~Executive Summary~~

~~The Compensation Committee has established specific~~ ~~pay for performance~~ ~~requirements with significant~~ ~~“at-risk”~~ compensation components. It emphasizes sustained multi-year performance in determining incentive compensation, which comprises the majority of CEO compensation. In 2020, approximately 84% of total CEO compensation was comprised of incentive compensation for achieving and exceeding these pre-established requirements for a multi-year period. Accordingly, most of the CEO compensation is “at risk” as it is dependent on the achievement of specific shareholder return, financial performance and other requirements. The Company periodically discloses its long-term strategic plans, financial goals and guidance in presentations it publicly furnishes to the SEC and makes available on its website (the most recent being available at ~~https://investors.thebancorp.com/presentations/default.aspx)~~. They include return on assets, or ROA, and return on equity, or ROE. As prior period financial performance requirements were achieved, the Company updated its website in October 2020 with increased future financial performance requirements. The “~~Balanced Score Card: CEO Performance Matrix”~~ set forth in “Determination of Compensation Amounts” summarizes the requirements for incentive at-risk compensation for the CEO. In 2020, the at-risk components of the CEO’s total compensation consisted of cash bonus and equity awards and amounted to $3,906,000, or 84% of total compensation. Base salary of $750,000 comprised approximately 16% of total compensation.

In addition to achieving specific pay for performance requirements, both the cash bonus and equity awards are forward looking to motivate further progress toward the long-term financial goals set by the Board of Directors and published on the Company’s website. As part of the evaluation process, sustained multi-year financial progress toward those long-term goals is emphasized. Accordingly, in 2018, the cash bonus and equity compensation were maintained at the same level as 2017, at $300,000 each. After sustained incremental financial progress in 2018 and 2017, the cash bonus and equity compensation were both increased to $675,000 in 2019, with an additional $250,000 value assigned to stock options which were also awarded. In 2020, the CEO received $1,650,000 for cash bonus, $1,350,000 for equity, with a $906,000 value assigned to stock options which were also awarded, which reflected further sustained financial improvements.

~~Excluding the Company’s gain on sale of the~~ ~~of the Safe Harbor Individual Retirement Account (SHIRA) portfolio in 2018~~, income before tax increased to $72.5 million in 2019 from $54.8 million in 2018 and $40.4 million in 2017. In 2020, further progress was made toward long term financial goals which were further increased, as income before tax increased to $108.3 million. Budgets, with formal quarterly reports of progress toward financial goals, are presented to the full Board of Directors which continuously monitors financial performance, to validate incentive compensation. Budget targets in each year since Mr. Kozlowski was engaged have been increased and have been met or exceeded. As published on the Company’s website, long-term targets have been increased to 20% for ROE and 2.00% for ROA. For 2019, the previously published goals were an ROA of 1.20% and an ROE of 14% which were achieved or exceeded. After adding back civil money penalties of $1.4 million and $7.5 million, which related to orders and actions prior to Mr. Kozlowski’s employment, the 2019 ROA was 1.28% and the ROE was 13.5%. In 2018, the ROA and ROE were 2.07% and 24.3%, respectively, which reflected the sale of the safe harbor IRA deposit portfolio. In 2020, further progress was made toward the long-term goals noted above. ROA amounted to 1.34% while ROE amounted to 15.1%.

The Compensation Committee believes that its forward-looking approach of providing cash bonus and equity to motivate future performance has been validated by the above historical results since Mr. Kozlowski’s tenure began in 2016, as income before tax has increased significantly each year under his leadership. Additionally, the Compensation Committee performs a peer analysis to compare the Company’s compensation analysis with its peers. The Compensation Committee believes that the complexities of the Company’s niche lending business and payments businesses are only partially present in any single peer. Accordingly, peer comparisons are considered with the other factors discussed throughout this presentation.

In summary, notwithstanding that the Company exceeded all requirements and metrics for the payment of bonus and equity grants, Mr. Kozlowski’s total compensation in 2018 was kept at 2017 levels as the Compensation Committee monitored financial performance sustainability. Cash bonus and equity increases in 2019 and 2020 reflected the sustained multi-year financial improvements in 2017, 2018 and 2019. Financial results in 2020 showed further improvements in financial performance as detailed throughout this report. Additionally, to address shareholder input, base salary was lowered from $900,000 for 2018 to $755,000 in 2019 and it was maintained at approximately that lower level in 2020. Further, in 2019 and 2020, the Compensation Committee allocated a significant portion of equity grants to options instead of restricted stock units. The salary reduction and maintenance at that lower level and the allocation of a portion of equity grants to options resulted from stockholder input, as noted in the chart appearing later in this report ~~“Stockholder Input and Company Actions”~~. The financial results described above and the other elements in the CEO Performance Matrix were significant reasons why the Compensation Committee decided to substantially increase the CEO’s total compensation through increased incentive compensation and equity compensation in the years from 2018 to 2020.

~~Compensation Objectives and the Focus of Compensation Awards~~

The Company’s compensation policies are intended to provide appropriate compensation packages to motivate, reward, attract and retain talented and experienced executive officers, and support the management succession plan. The policies are also intended to manage the Company’s compensation costs.

The Compensation Committee believes that an appropriate compensation program should draw a balance between providing motivation to executive officers while at the same time effectively controlling compensation costs. Executive officers are compensated at levels to attract and retain highly qualified individuals and to motivate them to perform in a manner that maximizes corporate performance.

~~The Company’s executive compensation program consists of three elements to compensate and motivate its executive officers in line with the Compensation Committee’s objectives described above:~~

~~base salary;~~

~~cash bonuses; and~~

~~long-term equity incentives reflected in grants of stock options, restricted stock awards and phantom units.~~

~~The criteria for CEO cash bonuses and long-term equity incentives are shown in~~ ~~the “Balanced Score Card: CEO Performance”~~ section. The Compensation Committee has required sustained multi-year improvements in financial performance, consistent with the financial goals which are posted to the Company’s website, as a determinant for cash bonuses and equity awards. This compensation is forward-looking, as motivation to achieve the long-term financial goals on the Company’s website. As published on the Company’s website, long-term targets have been increased to 20% for ROE and 2.00% for ROA, as the prior goals of 1.2% ROA and 14% ROE were achieved.

Generally, the Compensation Committee reviews annually the Company’s mix of short-term performance incentives versus longer-term incentives. It primarily focuses compensation on base salary and equity incentives with additional consideration for cash bonuses. The Compensation Committee has not established set percentages of short-term versus long-term incentives. Instead, it looks to provide a reasonable balance between those incentives and base salary. The Compensation Committee’s policy for allocating between long-term and currently paid compensation is to set base compensation at levels adequate to attract and retain personnel, while providing incentives to maximize long-term value for the Company and its stockholders. As discussed in “Specific Elements of the Compensation Program,” below, the Company provides cash compensation in the form of base salary to meet competitive salary norms. The Company also provides non-cash equity compensation to align this form of compensation with shareholder interests and the Company’s long-term strategic goals. Cash bonuses provide a shorter-term incentive which may align with competitive norms, acknowledge and motivate the achievement of individual goals and assist in compensation expense management. They are also forward looking to motivate management to sustain performance and reach the longer-term financial goals of 2% ROA and 20% ROE and other Company goals as published on its website. Because of performance generally in years prior to 2017, cash bonuses were not previously paid. As a result of either achieving or exceeding pre-established financial goals, including revenue increases and sustainable expense reductions, cash bonuses were subsequently paid to selected named executive officers. See rationales and conclusions noted in “Determination of Compensation Amounts”. As noted previously, the Compensation Committee has required sustained multi-year improvements in financial performance, which it has monitored and validated since Mr. Kozlowski’s tenure began in 2016.

In order to further confirm its objectives, the Compensation Committee also “benchmarks” the Company’s compensation programs to a peer group of banking institutions based upon its review of financial statements and other publicly available data. The level of these institution’s total assets and their regional location are factors the Compensation Committee considers in establishing the peer group. In 2019, the Compensation Committee added two peers with certain lines of business similar to that of the Company: Greendot Corporation (prepaid card accounts) and Axos Financial, Inc. (specialized banking products). Additionally, the Compensation Committee’s peer group includes other banks supplied by McLagan, a company which provides salary databases for peer comparisons. This expanded peer group of twenty-six banks provides a wider peer group on which to assess the Company’s performance, especially ROA and ROE. The peer group is also used to compare the CEO’s compensation to peers. Although considerable knowledge about the competitiveness of the Company’s compensation programs is gained through the benchmarking process, the Compensation Committee recognizes that each financial institution is unique and that significant differences in executive compensation practices exist. The Compensation Committee also considered the added complexity and earnings stream resulting from the payments businesses unique to the Company. For instance, while Green Dot Corporation and Meta Financial Group Inc. also engaged in certain payments businesses, they did not engage in the specialized SBLOC and SBA businesses. While the Compensation Committee considered CEO salaries in the whole 26 bank peer group, it concluded that the following banks had the most comparable lines of business and related complexities and would be the most relevant: Axos Financial, Inc., Green Dot Corporation, Live Oak Bancshares Inc., Meta Financial Group Inc. and TriState Holdings Inc. After the additions discussed above, the expanded peer group is comprised of the following banks.

~~Axos Financial, Inc.~~	~~Meta Financial Group Inc.~~
~~Brookline Bancorp Inc.~~	~~OceanFirst Financial Corp.~~
~~Bryn Mawr Bank Corp.~~	~~Peapack-Gladstone Financial~~
~~Camden National Corp.~~	~~Provident Financial Services~~
~~ConnectOne Bancorp, Inc.~~	~~S&T Bancorp Inc.~~
~~Eagle Bancorp Inc.~~	~~Sandy Spring Bancorp Inc.~~
~~Financial Institutions Inc.~~	~~Tompkins Financial Corporation~~
~~First Commonwealth Financial~~	~~TriState Capital Holdings Inc.~~
~~Flushing Financial Corp.~~	~~TrustCo Bank Corp NY~~
~~Green Dot Corporation~~	~~United Financial Bancorp~~
~~Lakeland Bancorp~~	~~Univest Corp. of Pennsylvania~~
~~Live Oak Bancshares Inc.~~	~~Washington Trust Bancorp Inc.~~
~~Meridian Bancorp Inc.~~	~~WSFS Financial Corp.~~

The median asset size of the peer group is approximately $6.5 billion at December 31, 2019 and Bancorp’s asset size at December 31, 2019 was $5.7 billion. The range of revenues for the peer group was $150-$380 million during 2019 and Bancorp’s revenues for 2019 were $245 million.

The Compensation Committee believes that the combination of short and long-term compensation that the Company provides fulfills its objectives of providing a competitive level of compensation and benefits in order to attract and retain key executives. The Compensation Committee also believes that the Company’s incentive programs appropriately motivate performance to achieve sustained profitability and growth to achieve its financial goals while at the same time allowing the Company to maintain controls over its compensation costs.

~~The Company did not utilize an outside compensation consultant in assessing compensation.~~

~~Compensation Methodology~~

The Compensation Committee ordinarily determines compensation amounts for individual NEOs for 12-month periods. The Chief Executive Officer typically provides the Compensation Committee with key elements of both the Company’s and the NEOs’ (other than the Chief Executive Officer’s) performance as well as recommendations to assist it in determining compensation levels. The Compensation Committee determines the amount of equity awards and cash bonuses, if any, at its discretion and reviews the Company’s performance during the fourth quarter of each year and at interim periods at its discretion. With the full Board of Directors, the Compensation Committee compares financial performance to the financial goals published on the Company’s website on a quarterly basis.

~~Specific Elements of the Compensation Program~~

Below are the specific elements of the Company’s compensation program for named executive officers. A chart showing the percentage of each component to the total of salary, cash bonus and equity in 2020 is as follows:

Name Principal Position Salary % 2020 Cash Bonus ($) Cash Bonus % 2020 Equity Grant ($) Equity Grant % Total ($)

Damian Kozlowski
Chief Executive Officer 16 1,650,000 35 2,256,000 49 4,656,000

Paul Frenkiel
Chief Financial Officer 50 220,000 28 180,000 22 800,000

Mark Connolly
Chief Credit Officer 31 412,500 38 337,500 31 1,100,000

Gregor Garry
Chief Operating Officer 50 220,000 28 180,000 22 800,000

Thomas Pareigat
General Counsel 44 275,000 31 225,000 25 900,000

Base Salary. The Company believes that it is important to maintain a competitive salary structure to retain its existing qualified executive officers which includes base pay consistent with similarly situated executives at similarly sized banking institutions. The Company believes that a key objective of its salary structure is to maintain reasonable “fixed” compensation costs by targeting base salaries at a competitive average, considering the Company’s and the individual’s performance. Base salaries are paid to executive officers on a bi-weekly basis and are generally reviewed annually by the Compensation Committee as described in “Compensation Methodology,” above. Base pay change, if any, is normally determined after considering:

~~the executive’s total itemized compensation for the prior year;~~

~~the executive’s current base pay position relative to the peer group;~~

~~the Company’s performance and the individual’s contribution to that performance for a sustained period;~~

~~the impact of the complexity of certain of the Company’s payments and specialized lending businesses on the individual’s responsibilities; and~~

~~national and regional economic conditions, their effect upon the Company and how the executive has dealt with them within his or her area of responsibility.~~

The CEO’s base salary was lowered from $900,000 in 2018 to $755,000 in 2019 reflecting an adjustment based on the median of the Compensation Committee’s peer group and stockholder input. It was further lowered to $750,000 in 2020. For 2019, the base salary of Messrs. Frenkiel, Connolly and Pareigat was increased from 2018 in consideration of peer data for their positions, with further low single digit increases in 2020 as shown in the table below. The peer data utilized was provided by McLagan, a company which provides salary databases for peer comparisons. The data consisted of regional and community banks for Messrs. Frenkiel, Pareigat and Garry, and regional and national banks for Mr. Connolly. Mr. Garry received increases to base salary from 2018 to 2019 and from 2019 to 2020. Those increases reflected Mr. Garry’s promotions from Chief Audit Officer, to Deputy Operations Officer and then to Chief Operating Officer in that period and reflected the peer comparisons. A chart showing the changes in base salary in 2020 compared to 2019 detailing the ranges in the peer data utilized is as follows.

Name Principal Position Base Salary 2019 ($) Base Salary 2020 ($) Percentage Increase/ (Decrease)
Peer
Range of
Base Salary ($) (a)

Damian Kozlowski
Chief Executive Officer 755,000 750,000 (1) % (b)

Paul Frenkiel Chief Financial Officer 396,500 400,000 1% 304,500-500,000

Mark Connolly
Chief Credit Officer 348,000 350,000 1%
290,000-437,700

Gregor Garry Chief Operating Officer 323,000 400,000 24% 325,000-578,200

Thomas Pareigat
General Counsel 398,462 400,000 1%
279,000-418,300

~~(a)~~

~~Peer ranges reflect 50~~^th ~~to 90~~^th ~~percentile for base salary.~~

~~(b)~~

In 2019, Mr. Kozlowski’s base salary was lowered to adjust to approximately the median of the Compensation Committee’s peer group and was maintained at approximately that level in 2020. Thus, incentive compensation only awarded by the achievement of pre-established requirements, detailed in the “~~Balanced Scorecard: CEO Performance Matrix”~~~~, now comprises the majority of his total compensation. These requirements include financial goals published on the Company’s website.~~

~~Cash Bonus.~~ In evaluating providing a cash bonus to an NEO, the Compensation Committee primarily focuses on the sustained contributions made to the Company by the NEO under consideration. The Chief Executive Officer makes recommendations to the Compensation Committee with respect to annual bonuses for the other named executive officers, based on their respective sustained contributions to the performance of the areas for which they are responsible. Because of improved financial performance, cash bonuses have been awarded since 2017. While the Compensation Committee examines pre-established requirements in determining whether to pay a cash bonus to any NEO and the amount of such bonus, the Compensation Committee has determined it is in the Company’s best interest to retain full discretion with respect to these cash bonuses to retain flexibility as opposed to requiring set payments for various levels of satisfying these requirements.

~~The primary factor in the CEO cash bonus award was achieving or exceeding pre-established requirements on a sustained basis as detailed in the~~ ~~“Balanced Score Card: CEO Performance Matrix~~” under “Determination of Compensation Amounts”. Sustained multi-year financial performance and achievement of financial performance goals published on the Company’s website are central to compensation decisions. Each of the pre-established criteria as shown in that matrix was determined to have been exceeded. The Compensation Committee also considered the cash bonus as a percentage of base salary. For the Chief Executive Officer, the 2020 cash bonus of $1.65 million compared to $675,000 in 2019 and $300,000 in 2018. Cash bonus represented approximately 2.2x base salary in 2020, compared to 89% in the prior year. The increase reflected the improved financial performance of the Company which had been sustained for a multi-year period. Please see the chart entitled ~~“Balanced Score Card: CEO Performance Matrix”~~ in the “Determination of Compensation Amounts” for the performance metrics for a cash bonus for the CEO. Please see the chart and footnotes under “Determination of Compensation Amounts- “Other NEO Compensation”, which summarize the metrics and other factors for a cash bonus for the other NEOs.

~~Long-Term Equity Incentive Compensation.~~ Long-term equity incentives in 2020 were provided to Named Executive Officers through the Company’s 2020 Equity Incentive Plan, or the 2020 Plan. The 2020 Plan permits the grant of stock options, restricted stock awards, stock appreciation rights and phantom units. Stock options are granted to NEOs at exercise prices equal to the then current market price of the Company’s Common Shares. Awards under the 2020 Plan are granted based on the Company’s financial performance and each executive’s contribution to such performance. Overall, the objective of long-term equity incentive compensation awards is to tie the interests of named executive officers directly to increases in stockholder value. The criteria utilized for each NEO is that which is used for cash bonuses as discussed directly above under “Cash Bonus” and presented in a chart under “Other NEOs”. In 2020, to balance the short-term incentive of cash bonus, equity grants were granted equal in value to 45% of the total of cash bonus and equity. Additionally, Mr. Kozlowski received 300,000 stock options, which were valued on the day of grant under the Black-Scholes method at $3.02 each.

~~Compensation Risk Analysis~~

As a financial holding company regulated by the Federal Reserve Bank, which has a subsidiary bank regulated by the FDIC and the State of Delaware, the Company adheres to defined risk guidelines, practices and controls to ensure the safety and soundness of the institution. The Company’s management and Board of Directors conduct regular reviews of its business to ensure that it is operating within appropriate regulatory guidelines and with appropriate practices, supplemented by its internal audit function.

On an annual basis, the Compensation Committee reviews the Company’s compensation practices to determine that (1) base salaries are appropriately competitive in light of overall compensation; (2) the Company’s use of equity grants provides appropriate long term incentives; (3) the Company offered an appropriate mix of cash and equity compensation to facilitate the alignment of the interests of the Company’s senior executives with those of the Company and its stockholders; and (4) cash bonuses are balanced with other compensation to incent financial performance and safety and soundness while managing compensation expense. In light of regulatory releases, the ultimate goal of the review is to assess the design, governance, policies and procedures ofstockholders.

PRIOR CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

As previously reported on the Company’s ~~compensation structure to ensure that, as designed and executed, it does not motivate excessive risk-taking that could adversely impact~~Current Report on Form 8-K, filed with the ~~long-term value~~SEC on March 8, 2024 (the “Change of ~~the Company.~~

After conducting the review, the Compensation Committee concluded that the Company’s incentive programs do not motivate or encourage unnecessary or excessive risk-taking. This conclusion reflected a review of the Company’s structure to determine that credit and other new business approvals are independent of new business efforts. Other factors, such as fostering an appropriate risk management culture, were also considered. The Company will continue to review and monitor its compensation programs to ensure that they continue to not motivate excessive risk-taking that could adversely impact the long-term value of the Company.

~~Tax and Accounting Considerations~~

~~The Company claims tax deductions~~Auditor Current Report”), in connection with ~~stock awards under~~the appointment of Crowe, the Audit Committee dismissed its equity compensation plans in an amount equal to the ordinary income reported to the I.R.S. for the recipient. The amount reported as ordinary income to the recipient, and deducted by the Company, is basedprior independent registered public accounting firm, Grant Thornton LLP (“Grant Thornton”).

Grant Thornton’s audit reports on the stock price at the date stock options are exercised or restricted stock vests, subject to a $1 million limit for each named executive officer. While the Compensation Committee considers the deductibility of compensation as one factor in determining executive compensation, the Compensation Committee retains the discretion to award and pay compensation that is not deductible as it believes that it is in the best interests of our stockholders to maintain flexibility in our approach to executive compensation and to structure a program that we consider to be the most effective in attracting, motivating and retaining key employees.

~~The compensation that we pay to our executive officers is expensed in our~~Company’s consolidated financial statements as ~~required by U.S. generally accepted accounting principles. As one of many factors, the Compensation Committee considers the financial statement impact in determining the amount~~ of and ~~allocation among the elements of, compensation. Stock-based compensation is accounted for as required under Financial Accounting Standards Board Accounting Standards Codification Topic 718.~~

~~Determination of Compensation Amounts~~

~~CEO Compensation Determination Factors~~

~~Pay for Performance and “At-Risk” Compensation.~~ The Compensation Committee has established specific pay for performance requirements which must be achieved before incentive compensation, which comprises the majority of CEO compensation, is awarded. In 2020, approximately 84% of total CEO compensation was comprised of incentive compensation for achieving and exceeding these pre-established requirements Accordingly, most of the CEO compensation is “at risk” as it is dependent on the achievement of specific shareholder return, financial performance and other requirements. The financial goals have been established in advance and are publicly available on the Company’s website. As prior period financial performance requirements were achieved, the website has been updated for future financial performance requirements, which have been further increased. The ~~“Balanced Score Card: CEO Performance Matrix”~~ below summarizes the requirements for incentive at-risk compensation. In 2020, the at-risk component of the CEO’s total compensation was $3,906,000 (84% of total compensation), while base salary of $750,000 comprised approximately 16% of total compensation.

~~Forward-Looking~~. In addition to achieving specific pay for performance requirements and sustained financial performance, both the cash bonus and equity awards are forward looking to motivate further progress toward the long-term financial goals set by the Board of Directors and published on the Company’s website. As part of the evaluation process, sustained multi-year financial progress toward those long-term goals is emphasized. Accordingly, in 2018, the cash bonus and equity compensation were maintained at the same level as 2017, at $300,000 each. After sustained incremental financial progress in 2018 and 2017, the cash bonus and equity compensation were both increased to $675,000 in 2019. In 2020, $1,650,000 for cash bonus and $1,350,000 for equity compensation were awarded, which reflected multi-year sustained financial improvements in 2019. Excluding the gain on sale of the safe harbor in 2018, income before tax increased to $72.5 million in 2019 from $54.8 million in 2018 and $40.4 million in 2017. In 2020, further progress was made toward long term financial goals, as income before tax increased to $108.3 million. Budgets, with formal quarterly reports of progress toward financial goals, are presented to the full Board of Directors reflecting a continuous monitoring of financial performance, to validate incentive compensation. ~~Budget targets in each year since Mr. Kozlowski was engaged have been met or exceeded. As published on the Company’s website~~, long-term targets for 2020 have been increased from 2019 to 20% for ROE and 2.00% for ROA. For 2019, the previously published goals were: ROA of 1.20% and ROE of 14%, which were achieved. After adding back civil money penalties of $1.4 million and $7.5 million, which related to orders and actions prior to Mr. Kozlowski’s employment, the 2019 ROA was 1.28% and the ROE was 13.5%. In 2018, the ROA and ROE were 2.07% and 24.3%, which reflected the sale of the safe harbor IRA deposit portfolio. In 2020, further progress was made toward the long-term goals noted above, as ROA amounted to 1.34% while ROE amounted to 15.1%.

The Compensation Committee believes that its forward-looking approach of providing cash bonus and equity to motivate future performance, has been validated by the above historical results since Mr. Kozlowski’s 2016 tenure began. Additionally, the Compensation Committee performs a peer analysis to compare the Company’s compensation analysis with its peers. The Compensation Committee believes that the complexities of the Company’s niche lending businesses and payments businesses are only partially present in any single peer. Accordingly, peer comparisons are considered with the other factors noted above and in the “Balanced Scorecard: CEO Performance Matrix” below.

~~Financial Performance.~~ ~~The Compensation Committee monitors financial performance. In addition to the improvements in income noted above, other recent financial highlights are as follows:~~

Total year-end SBLOC (securities-backed lines of credit) and IBLOC (insurance backed lines of credit) loans increased 30% year over year to $1.0 billion at December 31, 2019, after increasing 8% in the comparable prior year period. At December 31, 2020, balances had increased 56%, to $1,598 billion year over year.

Small Business Loans, including those held-for-sale, increased 22% year over year to $572.6 million at December 31, 2019, after increasing 17% in the comparable prior year period. At December 31, 2020, balances had increased 14%, to $654 million year over year.

Average loans and leases, including loans held for sale, increased 31% to $2.5 billion for the quarter ended December 31, 2019, compared to $1.9 billion for fourth quarter 2018. At December 31, 2020, balances had increased 72%, to $4.3 billion year over year.

Average prepaid card deposits of $2.7 billion for the fourth quarter 2019, reflected an increase of 22% over the $2.2 billion for fourth quarter 2018. At December 31, 2020, balances had increased 33%, to $3.59 billion.

Book value per common share at December 31, 2019 was $8.52 per share compared to $7.22 a year earlier, an increase of 18%, after increasing 24% in the prior year period. At December 31, 2020, book value amounted to $10.10, an increase of 19% over the prior year.

~~Significant multi-year progress in addressing FDIC regulatory issues culminated in the lifting of consent orders.~~

In summary, notwithstanding that the Company exceeded all requirements and metrics for the payment of bonus and equity grants, Mr. Kozlowski’s total compensation in 2018 was kept at 2017 levels as the Compensation Committee monitored financial performance sustainability. Cash bonus and equity increases in 2019 and 2020 reflected the sustained multi-year financial improvements in 2017, 2018 and 2019. Financial results in 2020 showed further improvements in financial performance as noted above. Additionally, to address shareholder input, his base salary was lowered from $900,000 for 2018 to $755,000 in 2019 and then to $750,000 in 2020. Further, in 2019 and 2020, the Compensation Committee allocated a significant portion of equity grants to options instead of restricted stock units. The salary reduction and maintenance at that lower level and the allocation of a portion of equity grants to options resulted from stockholder input, as noted in the chart appearing later in this report “Stockholder Input and Company Actions”. Cash bonus was increased after financial goals published on the Company’s website were met and ultimately exceeded, and the other requirements on the balanced scorecard were also exceeded for a sustained multi-year period.

~~Metrics and other criteria~~. ~~An analysis of the metrics and other criteria for the payment of CEO compensation is as follows.~~

~~Balanced Score Card: CEO Performance Matrix~~

	~~Pre-established requirements for incentive compensation~~	~~Did not meet~~	~~Substantially met~~	~~Exceeded~~
~~Financial & Strategic Performance~~	~~Publicly Announced Financial Metrics (a)~~			x
	~~Strategic Agenda (b)~~			x
	~~Integrated Business Plan Objectives (c)~~			x
~~Stock Performance~~	~~Competitor Peer Group (d)~~			x
	~~Russell 2000 Index (d)~~			x
	~~KBW Bank Index (d)~~			x
~~Enterprise Risk Management~~	~~Credit Risk Management (e)~~			x
	~~Compliance Risk Management (f)~~			x
	~~Regulatory (f)~~			x

~~(a)~~

Publicly Announced Financial Metrics: The Company publishes its financial goals on its website. For 2019, the previously published goals were: ROA of 1.20%, ROE of 14% and a tier 1 capital to average assets ratio of at least 8.5%. After adding back civil money penalties of $1.4 million and $7.5 million, which related to orders and actions prior to Mr. Kozlowski’s employment, the ROA was 1.28% and the ROE was 13.5%. The tier 1 capital to average assets ratio was 9.6% at December 31, 2019. Thus, financial parameters were exceeded in 2019. In 2018, the ROA and ROE were 2.07% and 24.3%, respectively, which reflected the sale of the safe harbor IRA deposit portfolio. In October 2020, the previous goals of 1.20% ROA and 14% ROE were increased to future goals of 2% ROA and 20% ROE. In 2020, further multi-year progress was sustained and further improved toward the increased financial goals. In 2020, ROA amounted to 1.34% while ROE amounted to 15.1%.

~~(b)~~

Strategic Agenda: The strategic agenda included specific strategic objectives which are required to be met. Those objectives and related performance are as follows. (i) Capture securities backed lines of credit (SBLOC) and insurance backed lines of credit (IBLOC) market share with a newly automated origination application: Additional SBLOC and IBLOC market share was captured with the implementation of Talea software. In 2018, year-end over year-end balances for these categories increased by 8%, and in 2019 balances increased by 30%. Further increases were achieved in 2020, for which there was a 56% increase in year end balances over the prior year end. (ii) Expand commercial real estate securitizations: Commercial real estate securitizations in 2019 were expanded with greater than projected results. In 2020, the Company decided to retain loans previously originated for securitization on its balance sheet, resulting in an approximate $1.5 billion portfolio. (iii) Create core values statement and strengthen the Bancorp community through diversity and inclusion: The Company has expanded its diversity and related outreach structure.

~~(c)~~

Integrated Business Plan Objectives: As part of the budget process, each line of business establishes goals which supported the attainment of companywide financial goals as detailed above. Actual results are compared to each line of business’s pre-established goals and reported to the Board of Directors quarterly. The specific line of business goals for all six operating departments were concluded to have been exceeded, as the overall financial requirements had been exceeded. However, in addition to revenue goals, certain of the 58 goals related to departmental improvements warranted review. Upon such review, it was concluded that of the 58 departmental goals for 2019, 54 were concluded to have been achieved, which exceeded expectations. In 2020, of 44 goals, 40 were considered to have been met.

~~(d)~~

Stock Performance: In the three-year period ended December 31, 2019, the KBW Bank Index appreciated 24%. Bancorp (stock symbol TBBK), appreciated 65% over that period, more than two times that index. In the three-year period ended December 31, 2020, the KBW Bank Index depreciated 12% while Bancorp appreciated 38%, again exceeding industry performance.

~~(e)~~

Credit Risk and Loan Growth Management: Exceeding those two defined parameters resulted in the exceeded rating. Total loans outstanding increased 21% at year-end 2019 over the prior year-end with an 8% increase in the prior year. Comparable growth for 2020 was 49% and further validated the already established sustained multi-year growth history. Credit risk was deemed acceptable as charge-offs, for a sustained multi-year period, remained at relatively low levels. Results met or exceeded the budget, and the factors above resulted in an exceeded rating.

~~(f)~~

Compliance Risk Management and Regulatory: The Board of Directors monitors compliance issues at its monthly meetings. Significant multi-year progress in addressing FDIC regulatory issues culminated in the lifting of consent orders. Improvements in compliance controls continue to be sustained and warranted an exceeded rating.

~~Stockholder Input and Company Actions~~

Notwithstanding receiving more than a 90% affirmative advisory vote on executive compensation at its 2020 annual meeting, the Company reached out to its stockholders to obtain feedback on company performance and any other matters of interest to stockholders. The Chief Financial Officer and Chief Executive Officer are the Company’s primary representatives who meet with investors. Mr. Frenkiel addressed executive compensation with stockholders. In 2020, these officers met with stockholders owning more than 50% of the Company’s Common Shares as they had in previous years. Related stockholder feedback from prior meetings had resulted in structural changes to the CEO’s compensation determination and other changes which were sustained. A summary of the stockholder input and resulting actions are as follows:

~~Stockholder Input~~	~~Company Actions~~
~~The CEO’s base salary exceeded the peer median. A lower base salary better aligns pay for performance which places greater emphasis on incentive compensation and less emphasis on base salary.~~	~~In 2019, the CEO’s base salary was $755,000, compared to $900,000 in 2018. In 2020, salary was set at $750,000.~~
The CEO’s equity awards upon his hire included stock options, but 2017 and 2018 grants consisted solely of restricted stock units. Stock options provide incentive for pay for performance, as their value equals the increase in stock price after the grant date.	In 2019 and 2020, a significant allocation of equity compensation granted was awarded as stock options. As of December 31, 2020, Mr. Kozlowski had 258,049 unvested restricted stock units versus 665,104 stock options.
~~Publicizing the pre-established financial targets required to be achieved for pay for performance awards on the Company’s website, creates transparency and accountability for pay for performance.~~	Pre-established financial and other goals are presented on the Company’s website and were used in the determination of cash bonus and equity incentive compensation. https://investors.thebancorp.com/presentations/default.aspx
~~Increases in net income and other performance measures have been significant, but related financial performance sustainability should be considered.~~	Total CEO compensation for 2018 was maintained at 2017 levels, notwithstanding the significant increases in income, ROA and ROE in 2017, with further increases in 2018. After continued sustained earnings, cash bonus and equity compensation in 2019 was increased while base salary was decreased. The Compensation Committee continues to validate sustainability of financial performance including ROA, ROE and other measures, which showed further improvement in 2020.
~~Comparisons to peers on key financial metrics provide a tool to help determine that financial goals adequately reward stockholders.~~	The Compensation Committee added peer comparisons for ROA and ROE to its decisioning parameters. The detailed financial targets required for pay for performance awards on the Company’s website are also compared to peers.
~~Some companies use grids or assign percentages to their various pre-established metrics which weight those factors in incentive compensation awards.~~	In 2019, the Compensation Committee required that the Company achieve pre-established metrics for the award of incentive compensation. The grid precedes this section under “Balanced Score Card: CEO Performance Matrix”. The Compensation Committee determined that grid component requirements were exceeded for 2019. The grid has been maintained in 2020 and grid components were also exceeded in that year.

~~Other Considerations Impacting CEO Compensation~~

Mr. Kozlowski was named the Company’s CEO in June 2016, a year in which the Company had significant regulatory requirements outstanding, and in which it incurred losses. He was engaged because of his proven experience in financial turnaround, improving compliance with regulatory requirements, and reducing financial and regulatory risk, while sustaining financial performance. The Compensation committee continues to evaluate the Company’s performance in each of the areas above as follows. Mr. Kozlowski was engaged as CEO in June 2016 and charged with engineering a financial turnaround from the losses in that year. The Company has since exceeded the required financial targets set by the Board of Directors and published on the Bancorp website. Excluding the gain on sale of the safe harbor in 2018, income before tax increased to $72.5 million in 2019 from $54.8 million in 2018 and $40.4 million in 2017. In 2020, further progress was made toward long term financial goals which were further increased, as income before tax increased to $108.3 million. The Compensation Committee considered earnings results for the above multi-year period in concluding that the turn-around had exceeded expectations. The Board of Directors including the Compensation Committee has monitored the implementation of a unique software system for BSA, as well as other infrastructure improvements. These include the creation of a Center of Excellence for BSA and related regulatory requirements. The system and infrastructure have been largely implemented and enhancements continue to be made. Based on its monitoring, these improvements were concluded to have been sustained. Significant multi-year progress in addressing FDIC regulatory issues culminated in the lifting of FDIC consent orders. During Mr. Kozlowski’s tenure, the Company has sold or otherwise disposed of the majority of its higher risk discontinued assets and related investment in unconsolidated entity. Additionally, higher risk lines of business such as European operations were sold, while lower charge-off lending lines have grown significantly, with total loans outstanding increasing 21% at year-end 2019 over the prior year end with a comparable 8% increase at year end 2018. In 2020, loan growth continued, and loans outstanding were 49% higher than the prior year-end. In addition to the key areas set forth above, under the oversight of the CEO, new sources of revenue, including the rapid funds product, were initiated, an innovation framework and process was created, operating platforms were reengineered, including a securities-backed line of credit platform to facilitate scalability, and corporate culture was enhanced to include a formal diversity and inclusion program.

A graphic representation of income before taxes, in thousands, shows the improvement in income from 2016. Mr. Kozlowski has served as CEO since June 2016 and financial performance during his tenure shows dramatic sustained improvements. Excluding the gain on sale of the safe harbor in 2018, income before tax increased to $72.5 million in 2019 from $54.8 million in 2018 and $40.4 million in 2017. In 2020, income before tax amounted to $108.3 million.

*Continuing Operations** 2018 excludes sale of Safe Harbor IRA. Total income before income taxes for 2018 including the Safe Harbor IRA sale was $119,781

~~CEO Compensation~~

~~The following factors impact the Compensation Committee’s determination of the amounts of cash bonus and equity awards for pay for performance:~~

1. ~~Sustaining Improved Financial Performance Validated by Pre-established, Publicly Disclosed Financial Goals~~

In determining the Chief Executive Officer’s compensation, the Compensation Committee established specific, pre-set financial goals. See “Balanced Score Card: CEO Performance Matrix” above. For transparency, these goals were posted on the Company’s website. These goals were achieved sooner than expected and the goals were increased and updated on the Company’s website in October 2020. Mr. Kozlowski has maintained a consistent record of achieving and exceeding these goals since he joined the Company in June 2016. His performance through 2018 validated maintenance of base salary for 2018 at the original level necessary to retain him. After further sustained financial improvement, and exceeding pre-set financial and other targets, cash bonus and equity compensation were increased in 2019. Base salary was decreased in that year, to emphasize “pay for performance” and continued to be maintained at the lower level in 2020. After sustained, multi-year improvements in financial performance, his cash and equity awards were further increased in 2020 to reflect that performance, while his salary was maintained at approximately the same level as the prior year. At the CEO’s request and as determined appropriate by the compensation committee, his total compensation in 2018 was maintained at the same level as 2017. Both the CEO and the committee were focused on sustaining financial improvements as a primary determinant for additional compensation, which was awarded beginning in 2019.

2. ~~Performance versus Peers~~

The Compensation Committee refined its peer group in 2019 as detailed under “Compensation Objectives and the Focus of Compensation Awards”. While it did review the results of comparisons with its prior smaller peer group, the Compensation Committee now utilizes only one peer group, comprised of twenty-six banks. For 2018, the Company’s 2.07% ROA was significantly more than the peer group which averaged in the 1.2% range, which was also the approximate median. The Company’s 24.26% ROE also significantly exceeded peer averages in the 11% range, which was also the approximate median. Both the ROA and ROE were in the top quartile of these peer groups. For 2019, peer groups were also exceeded. In 2020, while the peer group financial performance generally declined, Bancorp’s ROA and ROE respectively increased to 1.34% and 15.1%. The Company’s progress toward ultimately achieving 2018 performance in the top quartile of peers validated maintenance of CEO base salary for 2018 at the original level necessary to engage the CEO in 2016. It also validated the 2018 cash and restricted stock equity awards at the levels necessary to retain the CEO’s service. The sustained multiyear improvements in financial performance validated the subsequent increases in cash bonus and equity compensation. As noted previously, base salary was nonetheless reduced to the approximate median of the Compensation Committee’s peer group effective January 2, 2019, to increase the pay for performance element of compensation.

3. ~~Multi-Year Analysis of CEO Compensation and Comparison of CEO Total Compensation to Peers~~

Mr. Kozlowski’s total compensation was $1.5 million in both 2017 and 2018. In 2018, the Compensation Committee considered the following: (a) that pre-established financial goals were exceeded ahead of schedule, (b) financial performance now exceeded peers, and (c) the other pre-established goals set by the Board of Directors had been satisfied. Nonetheless, total compensation in 2018 was maintained at the same level as 2017. For 2017 and 2018, the CEO’s total compensation was below the 2017 total compensation (the most recent year available) of the Compensation Committee’s 26 bank peer group. Mr. Kozlowski’s total compensation for 2018 of $1.5 million, compared to 2017 median compensation of $2.0 million for the 26-bank peer group. After monitoring the sustained multi-year financial performance of the Company and the exceeding of financial and non-financial metrics, the Compensation Committee increased cash bonus and equity awards in subsequent years. While various peer comparisons show that total compensation in subsequent years is above average, sustained multi-year financial improvement and the exceeding of all items on the balanced scorecard validate above average performance. While the Compensation Committee considered CEO salaries in the whole 26 bank peer group, it concluded that the banks with the most comparable lines of business and related complexities were more relevant. Accordingly, it considered the CEO compensation of Axos, Green Dot, Tri-State, Meta and Live Oak for 2019. The CEO compensation for those banks ranged from $511,000 to $6.1 million, with two banks higher and two banks lower than Bancorp’s 2020 compensation of $4.7 million, with one bank approximately the same.

4. ~~Other Goals~~

In addition to pre-established and publicly disclosed financial parameters on the Company’s website and financial performance comparisons with peer groups, the Board of Directors pre-established other goals in the form of a strategic agenda. The strategic agenda was comprised of the following: capture securities backed lines of credit and insurance backed lines of credit market share with a newly automated origination application, build out rapid funds transfer capability, improve data analysis, improve the leasing platform, mature financial crimes center of excellence and create core value statement and strengthen the Bancorp community. The Board of Directors and Compensation Committee were advised of progress on these goals and determined that results exceeded these targets. The Compensation Committee reviewed each of these goals and determined that they had been either fully implemented or significant progress had been made to satisfy the Compensation Committee as outlined above. Especially important to the Compensation Committee was the progress made on regulatory issues.

5. ~~Risk Considerations~~

The Compensation Committee viewed the Board of Director’s financial and other publicly disclosed goals in tandem with the institution’s risk profile. For financial performance especially, levels of risk required ongoing consideration so as not to incentivize excessive risk taking. Accordingly, specific percentages of additional compensation were not assigned to specific measures of performance. Instead, risk would be considered as part of a balanced scorecard approach. Upon its review, the Compensation Committee determined that risk had been reduced, while financial performance had been significantly improved. Significant reductions in higher risk discontinued operations loans had been exceeded by growth in lower credit loss lines of business such as securities-backed lines of credit. The sale of the IRA portfolio concluded the sale of niche deposit lines of business which had unique risk elements. A significant component of the improvement in financial performance resulted from expense reductions which also had been demonstrated not to result in additional risk. Accordingly, risk had been reduced, while financial performance had been significantly improved over a sustained period.

All five factors above supported increased compensation levels. All the pre-established financial goals were either achieved or significantly exceeded while risk was decreased. Pre-established strategic, non-quantifiable goals, which would impact financial performance in the future were all either met or showed expected progress. The Compensation Committee received frequent updates from Board subcommittees and other reporting to monitor the regulatory related and other goals to reach this conclusion.

In addition to achieving specific pay for performance requirements as described above, both the cash bonus and equity awards are forward looking to motivate further progress toward the long-term financial goals set by the Board of Directors and published on the Company’s website. As part of the evaluation process, sustained multi-year financial progress toward those long-term goals is emphasized. Accordingly, in 2018, the cash bonus and equity compensation were maintained at the same level as 2017, at $300,000 each. After sustained incremental financial progress in 2018 and 2017, the cash bonus and equity compensation were both increased to $675,000 in 2019. In 2020, $1,650,000 for cash bonus and $2,256,000 for equity compensation were awarded, which reflected further sustained financial improvements in 2019. Total compensation in 2020 was comprised of the $1,650,000, the $2,256,000 and $750,000 base salary, for a total of $4,656,000. The amount of compensation exceeding $1,000,000 is not deductible for federal tax purposes. At the federal tax rate of 21% for 2020, the resulting impact on tax expense was considered, as it was reflected in tax expense for the year ended 2020. Excluding the gain on sale of the safe harbor in 2018, income before tax increased to $72.5 million in 2019 from $54.8 million in 2018 and $40.4 million in 2017. In 2020, further progress was made toward long term financial goals, as income before tax increased to $108.3. Budgets, with formal quarterly reports of progress toward financial goals, are presented to the full Board of Directors reflecting a continuous monitoring of financial performance, to validate incentive compensation. Budget targets in each year since Mr. Kozlowski was engaged have been met or exceeded. As published on the Company’s website, long-term targets have been increased to 20% for ROE and 2.00% ROA. For 2019, the previously published goals were: ROA of 1.20% and ROE of 14%, which were achieved. After adding back civil money penalties of $1.4 million and $7.5 million, which related to orders and actions prior to Mr. Kozlowski’s employment, the 2019 ROA was 1.28% and the ROE was 13.5%. In 2018, the ROA and ROE were 2.07% and 24.3%, which reflected the sale of the safe harbor IRA deposit portfolio. In 2020, further progress was made toward the long-term goals noted above. ROA amounted to 1.34% while ROE amounted to 15.1%.

The Compensation Committee will continue to evaluate Mr. Kozlowski’s performance with respect to the Company’s multi-year plan which projects increasing profitability in each year. For shareholder transparency, financial goals are published on the Company’s website and as a result of the achievement of prior goals, long-term targets have been increased to 20% for ROE and 2.00% for ROA.

~~Other NEO Compensation~~

~~A chart of NEO compensation is as follows: The footnotes to the chart list the performance requirements which must be sustained for cash bonus and equity grants.~~

Name Principal Position Base Salary 2020 ($) 2020 Cash Bonus ($) % of Base Salary 2020 Equity Grant ($) % of Base Salary
Damian Kozlowski Chief Executive Officer 750,000 1,650,000 220% 2,256,000 301%
Paul Frenkiel ⁽¹⁾ Chief Financial Officer 400,000 220,000 55% 180,000 45%
Mark Connolly ⁽²⁾ Chief Credit Officer 350,000 412,500 118% 337,500 96%
Gregor Garry ⁽³⁾ Chief Operating Officer 400,000 220,000 55% 180,000 45%
Thomas Pareigat ⁽⁴⁾ General Counsel 400,000 275,000 69% 225,000 56%

~~(1)~~

For the Chief Financial Officer, Paul Frenkiel, the cash bonus of $220,000 in 2020, compared to $125,000 in 2019 and $100,000 in 2018, and was 55% of his base salary. Mr. Frenkiel’s responsibilities include all financial functions of the Company, including supporting each line of business in managing their financial operations. The increased awards reflected the impact of those financial functions on the sustained improved financial performance of the Company. Additionally, Mr. Frenkiel is responsible for the investment portfolio which has consistently ranked in the upper quartile of peers. The upper quartile peer ranking requirement was based on the yields reported in the Uniform Bank Performance Report for FDIC insured banks.

~~(2)~~

For the Head of Credit Markets and Chief Credit Officer, Mark Connolly, the cash bonus of $412,500 in 2020, compared to $300,000 in 2019 and $225,000 in 2018, and was 118% of his base salary. Mr. Connolly oversees all lending operations and is also responsible for the disposition of the balance of discontinued operations to maximize shareholder value. Under Mr. Connolly’s leadership, loan revenues have continued their consistent increases and amounted to $171 million in 2020 from $127 million in 2019, $95 million in 2018 and $79 million in 2017. These higher revenues reflected 22% and 30% respective growth in 2019 year-end loan balances for SBA and SBLOC with a 9% increase in year over year lease balances, after a 17% increase in year-end 2018 SBA balances. In 2020, total loan balances again were increased significantly, by 49%. Additionally, Mr. Connolly exceeded his targeted 25% year over year reduction in discontinued assets, which were reduced 29% to $140.7 million at year end 2019, and 35% to $197.8 million at year end 2018 from $304.3 million at year end 2017.

~~(3)~~

For the Chief Operating Officer, Gregor Garry, the cash bonus of $220,000 in 2020, compared to $100,000 in 2019 and $50,000 in 2018, and was 55% of his base salary. Mr. Garry is responsible for Operations, Financial Crimes Risk Management, Enterprise Risk Management, and Consumer Compliance. In addition to supporting cost reductions related to operations, Mr. Garry completed the build out of an infrastructure which managed all outstanding regulatory issues. In the performance of those duties, he managed the further maturation of the financial crimes Center of Excellence. Additionally, Mr. Garry oversaw the completion of an Integrated Compliance Plan which addressed root causes for regulatory issues. This performance was acknowledged by the Compensation Committee even though Mr. Garry’s contributions are not immediately reflected in financial results.

~~(4)~~ For the General Counsel, Thomas Pareigat, the cash bonus of $275,000 in 2020, compared to $150,000 in 2019 and $100,000 in 2018, and was 69% of base salary. Mr. Pareigat’s primary responsibilities include oversight, management and resolution of all legal matters affecting the Company. Mr. Pareigat reports on legal matters to the Board of Directors at its monthly meetings. The Board of Directors includes several attorneys who can assess Mr. Pareigat’s performance. Mr. Pareigat also manages a legal staff which is charged with minimizing external legal costs. Mr. Pareigat’s performance was determined to exceed expectations in these areas.

~~Director Compensation~~

The Compensation Committee also oversees an annual compensation evaluation of the Board of Directors. A survey of twenty-four institutions was performed to confirm that Board of Director compensation fell within appropriate peer ranges based on that survey. The Compensation Committee granted equity with a market value at date of grant of approximately $90,000 to independent directors in 2020, to align their interests with other stockholders. The $90,000 was added to cash compensation and that total was compared to the survey of other institutions. Independent Directors also received an annual fee of $75,000 and are paid separately for committee meetings. The annual fee and per meeting fees for Independent Directors have not been increased since 2018. See “Director Compensation Table.”

~~Compensation Recoupment Policy~~

~~The Compensation Committee reiterated its previously approved compensation recoupment policy as follows:~~

The compensation recoupment policy applies if the Company is required to provide an accounting restatement for any of the prior three fiscal years for which audited financial statements have been completed, due to material noncompliance with any financial reporting requirement under the federal securities laws. In the event of such a restatement, the Compensation Committee will determine, in its discretion, whether (1) NEOs, regardless of whether they were directly responsible for the restatement, or (2) all other recipients of cash-based or equity-based incentive compensation who were directly responsible for the restatement, have received any cash-based or equity-based incentive compensation that they would not have been entitled to receive under the restated results. In the event of any future financial restatements, the Audit Committee will evaluate the facts and formally consider whether any compensation recoupment (clawback) from any Company officer is warranted.

The Compensation Committee then will take such actions as it deems necessary or appropriate, depending on all the facts and circumstances as determined during its review, including (i) the recoupment of all or part of any such excess compensation, (ii) recommending disciplinary actions to the Board of Directors, up to and including termination, and/or (iii) the pursuit of other available remedies.

~~COMPENSATION COMMITTEE REPORT~~

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis above and has discussed that analysis with management. Based on its review and discussions with management, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

~~Walter T. Beach, Chairman~~
~~William H. Lamb~~
~~Mei-Mei H. Tuan~~

~~EXECUTIVE COMPENSATION~~

~~Summary Compensation Table~~

~~The following table provides information concerning total compensation earned or paid to the NEOs~~ for the years ended December 31, ~~2020, 2019~~2023 and ~~2018.~~

Name and Principal Position
Year
Salary
($)
Bonus
Stock
Awards
($) ⁽¹⁾
Option
Awards
($) ⁽²⁾
All other compensation
($) ⁽³⁾
Total

Damian Kozlowski 2020 750,000 1,650,000 1,350,000 906,000 9,714 4,665,714
Chief Executive Officer ⁽⁴⁾ 2019 755,000 675,000 675,000 250,000 10,476 2,365,476
2018 900,000 300,000 300,000 - 9,324 1,509,324

Paul Frenkiel 2020 400,000 220,000 180,000 - 18,426 818,426
Chief Financial Officer/ 2019 396,500 125,000 125,000 - 18,560 665,060
Secretary 2018 310,660 100,000 100,000 - 18,396 529,096

Mark Connolly 2020 350,000 412,500 337,500 - 9,354 1,109,354
Executive Vice President/ 2019 348,000 300,000 300,000 - 9,424 957,424
Chief Credit Officer 2018 300,000 225,000 225,000 - 8,862 758,862

Gregor Garry 2020 400,000 220,000 180,000 - 8,837 808,837
Executive Vice President/ 2019 323,000 100,000 100,000 - 6,559 529,559
Chief Operating Officer 2018 273,000 50,000 50,000 - 8,929 381,929

Thomas Pareigat 2020 400,000 275,000 225,000 - 17,328 917,328
Executive Vice President/ 2019 398,462 150,000 150,000 - 17,321 715,783
General Counsel 2018 360,000 100,000 100,000 - 16,884 576,884

2022 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles.

During the fiscal years ended December 31, 2023 and 2022, and the subsequent interim period through March 4, 2024, there were: (i) no disagreements within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the related instructions between the Company and Grant Thornton on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to Grant Thornton’s satisfaction, would have caused Grant Thornton to make reference thereto in its reports; and (ii) no “reportable events” within the meaning of Item 304(a)(1)(v) of Regulation S-K.

The Company provided to Grant Thornton the disclosure contained in the Change of Auditor Current Report and requested Grant Thornton to furnish a letter addressed to the Commission stating whether it agrees with the statements made by the Company (the “Grant Thornton Letter”), and, if not, stating the respects in which it does not agree. The Grant Thornton Letter has been filed as Exhibit 16.1 to the Change of Auditor Current Report.

On March 4, 2024, the Audit Committee appointed Crowe as the Company’s independent registered public accounting firm for the year ending December 31, 2024, to be effective upon the execution of an engagement letter and related completion of Crowe’s standard client acceptance procedures, including independence procedures.

During the fiscal years ended December 31, 2023 and 2022, and the subsequent interim period through March 4, 2024, neither the Company nor anyone on its behalf consulted with Crowe regarding: (i) the application of accounting principles to a specified transaction, either completed or proposed, nor the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report was provided to the Company nor oral advice provided that Crowe concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing, or financial reporting issue; or (ii) any matter that was the subject of a disagreement or a “reportable event” as described in Items 304(a)(1)(iv) and (v), respectively, of Regulation S-K.

~~(1)~~52

Reflects the aggregate grant date fair value of stock awards granted during each of the last three fiscal years in accordance with FASB ASC Topic 718. The values of stock awards were determined by multiplying the grant date closing price of the stock, by the number of shares granted. The assumptions utilized in determining the fair value of stock awards are described in footnote M to the annual financial statements included in the Company’s Annual Report on Form 10-K for its fiscal year ending December 31, 2020.

2024 PROXY STATEMENT

TABLE OF CONTENTS

~~(2)~~

Reflects the aggregate grant date fair value of stock options granted in accordance with FASB ASC Topic 718. There were no option awards granted in 2018. The assumptions utilized in determining the fair value of stock options are described in footnote M to the annual financial statements included in the Company’s Annual Report on Form 10-K for its fiscal year ending December 31, 2020.

Proxy Summary

Proposal #1

Proposal #2

Proposal #3

Proposal #4

Other Matters

~~(3)~~

~~Represents the aggregate dollar amount~~

FEES AND SERVICES

The following table presents the aggregate fees billed by Grant Thornton for each ~~NEO for perquisites and other personal benefits comprised of the Company’s contributions to its 401(k) savings plan, insurance premiums and personal use of automobiles.~~

~~(4)~~

Effective January 1, 2019, the Compensation Committee reduced Mr. Kozlowski’s base salary from $900,000 per year to $755,000 per year, to increase the proportion of his incentive compensation as a result of stockholder feedback. Base salary was further reduced to $750,000 in 2020.

~~Ratio of Chief Executive Officer Pay to Median Pay~~

~~For 2020, the median~~ of the annual total compensation of all employees of the Company, other than the Chief Executive Officer (CEO), was $89,421, and the total compensation of the CEO was $4,665,714, as reported in the Summary Compensation Table above. Based on this information,services listed below for ~~2020, the CEO’s annual total compensation was 52 times that of the median of the annual total compensation of all employees.~~

~~To identify the median of the annual total compensation of all~~each of the Company’s ~~employees, as well as to determine the annual total compensation~~last two fiscal years.

	2023			2022
Audit Fees(1)		$	978,700		$	925,928
Audit-Related Fees(2)			49,875			100,275
Tax Fees(3)			206,540			178,579
All Other Fees			—			—
Total		$	1,235,115		$	1,204,782

(1)

Audit fees consisted of the ~~median employee~~aggregate fees billed for professional services rendered by Grant Thornton in connection with its audit of the Company’s consolidated financial statements and its limited reviews of the ~~CEO,~~unaudited consolidated interim financial statements that are normally provided in connection with statutory and regulatory filings or engagements for these fiscal years.

(2)

In 2023, audit-related fees were primarily comprised of services related to the ~~Company took~~audit of the ~~following steps:~~

The Company determined that as of the payroll for December 18, 2020, there were 614 employees. This population consisted of the Company’s full-time and an insignificant number of part-time workers. Independent contractors were not included in the analysis. December 18, 2020 was selected as the date to identify the “median employee” because it was the last payroll date within the last three months of 2020, and it enabled the Company to make such identification in a reasonably efficient and economical manner.

To identify the “median employee”, the Company analyzed the salary, wages and overtime pay of all employees, to account for employees who had only worked a portion of the year. It also considered additional compensation consisting of 401(k) matches and health insurance. Since less than 10% of Company employees receive equity awards, such awards were excluded from the compensation measure.

The Company identified its median employee using this compensation measure, which was consistently applied to all employees included in the calculation. Since all Company employees are located in the United States, including the CEO, the Company did not make any cost of living adjustments.

Once the median employee was identified, the Company combined the elements of such employee’s compensation for 2020 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in total compensation of $89,421. The difference between such employee’s salary, wages and overtime pay and the employee’s annual total compensation represents the estimated value of health care benefits which were estimated at $10,441 per employee, which includes coverage for dependents. The Company’s 401(k) match was also included in the compensation analysis.

~~With respect to the total annual compensation of the CEO, the Company used the amount reported in the “Total” column of the Summary Compensation Table above.~~

Company’s 401(k) plan and assistance with the filing of Form 11-K. In 2022, these fees were incurred for the audit of the Company’s 401(k) plan and assistance with the filing of Form 11-K and secondarily for services related to the registration of additional securities.

~~Equity Compensation Plan Information~~

(3)

Tax fees consisted of ~~December 31, 2020,~~ the ~~status of our equity compensation plans is as follows:~~

Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
(a) (b) (c)
Equity compensation plans approved by security holders

2,949,547⁽¹⁾

$7.62⁽²⁾

1,720,120
Equity compensation plans not approved by security holders Not applicable Not applicable Not applicable
Total 2,949,547 $7.62 1,720,120

~~(1)~~

Includes 1,787,943 outstanding unvested restricted stock units which are awarded upon vesting without consideration from the recipient. Restricted stock units have reduced the number of securities remaining available for future issuance in column c.

~~(2)~~

~~Excludes 1,787,943 outstanding unvested restricted stock units which are awarded upon vesting without consideration from the recipient.~~

aggregate fees billed for professional services rendered by Grant Thornton for tax compliance, tax advice, and tax planning in 2023 and 2022.

~~Grants of Plan-Based Awards~~

~~The following table provides information concerning each grant~~

AUDIT COMMITTEE PRE-APPROVAL POLICY

Exchange Act rules generally require any engagement by a public company of an ~~award made~~accountant to ~~an NEO during 2020 under any plan of the Company. In the following table, the values of stock awards were determined by multiplying the grant date closing price of the stock~~provide audit or non-audit services to be pre-approved by the ~~number~~audit committee of shares granted. The values of stock options granted were determined in accordance with FASB ASC Topic 718. The assumptions utilized in determining the fair value of stock options are described in footnote M to the annual financial statements. The stock options vest over a period of four years from grant date, while the stock awards vest over a period of two years and eight months from grant date.

Name Grant Date All Other Stock Awards: Number of Shares of Stock or Units (#) Fair Market Value on Date of Grant ($/Share) All Other Option Awards: Number of Securities Underlying Options (#) ⁽¹⁾
Exercise Price of Stock Options ⁽¹⁾
($/Share)
Grant Date Fair Value of Stock and Option Awards ($)
Damian Kozlowski 05/20/20 196,506 6.87 1,350,000

Damian Kozlowski 05/20/20 300,000 6.87 906,000

Paul Frenkiel 05/20/20 26,200 6.87 - - 180,000

Mark Connolly 05/20/20 49,126 6.87 - - 337,500

Gregor Garry 05/20/20 26,200 6.87 - - 180,000

Thomas Pareigat 05/20/20 32,751 6.87 - - 225,000

~~(1)~~

~~These stock options had a $3.02 per share fair value as of date of grant computed consistent with FASB ASC Topic 718.~~

~~Outstanding Equity Awards at Fiscal Year-End Table~~

~~The following table provides information on the holdings by the Company’s NEOs as of year-end December 31, 2020 which details unexercised stock options and stock awards~~ that ~~have not vested.~~

Option Awards Stock Awards
Number of securities underlying unexercised options Exercisable Number of securities underlying unexercised options Unexercisable Options exercise price Option expiration Number of shares or units of stock that have not vested ⁽²⁾ Market value of shares or units of stock that have not vested ⁽³⁾
Name Grant Date (#) (#) ($) date (#) ($)
Damian Kozlowski 6/01/2016 300,000 - 6.75 6/1/2026 - -
5/16/2018 - - - - 9,034 123,314
  2/8/2019 16,276 48,828 8.57 2/8/2029 - -
  2/8/2019 - - - - 52,509 716,748
5/20/2020 300,000 6.87 5/20/2030
5/20/2020 196,506 2,682,307
Total 316,276 348,828 - - 258,049 3,522,369

Paul Frenkiel 8/11/2011 38,000 - 7.36 8/11/2021 - -
1/25/2012 40,000 - 8.50 1/25/2022 - -
1/23/2013 20,000 - 10.45 1/23/2023 - -
5/16/2018 - - - - 3,011 41,100
  2/8/2019 9,724 132,733
5/20/2020 - - - - 26,200 357,630
Total 98,000 - - - 38,935 531,463

Mark Connolly 5/16/2018 - - - - 6,775 92,479
  2/8/2019 - - - - 23,338 318,564
5/20/2020 - - - - 49,126 670,570
Total - - - - 79,239 1,081,613

Gregor Garry 5/16/2018 - - - - 1,506 20,557
  2/8/2019 - - - - 7,780 106,197
5/20/2020 - - - - 26,200 357,630
Total - - - - 35,486 484,384

Thomas Pareigat 1/25/2012 25,000 - 8.50 1/25/2022 - -
1/23/2013 10,000 - 10.45 1/23/2023 - -
5/16/2018 - - - - 3,011 41,100
  2/8/2019 - - - - 11,669 159,282
5/20/2020 - - - - 32,751 447,051
Total 35,000 - - - 47,431 647,433

Total 449,276 348,828 - - 459,140 6,267,262

~~(1)~~

~~All options listed vest at a rate of one fourth per year over a period of four years from grant date.~~

~~(2)~~

All stock awards listed are Restricted Stock Units, or RSUs, which vest at a rate of one third per year over three years from grant date, except those issued in 2018 and 2020 which vest one third each after years one and two, with the balance vesting after eight months. Upon vesting, shares of Company common stock equal to the number of units vested are issued to the NEO.

~~(3)~~

Market value is based on the closing market price of the Company’s common stock on December 31, 2020, which was $13.65. In the event of death, disability or retirement, unvested RSUs would vest to the benefit of the recipient. In the event of a change of control, vesting could occur if the recipient were not offered comparable employment after the change of control. While the values shown are as of year-end, the value actually realized would be determined by the stock price at the date of these occurrences.

~~Option Exercises and Stock Vested~~

~~The following disclosures provide information for the Company’s NEOs regarding restricted stock units vested and options exercised in 2020.~~

Name Option awards Stock awards
Number of shares
acquired on
exercise
(#) Value
realized on
exercise
($) Number of shares
acquired on vesting
(#) Value
realized on
vesting
($)
(a) (b) (c) (d) (e)
Damian Kozlowski 55,050 621,863
Paul Frenkiel 25,000 118,000 7,873 78,760
Mark Connolly 13,361 265,951
Gregor Garry 7,865 87,554
Thomas Pareigat 12,139 130,769

~~Potential Payments Upon Termination or Change in Control~~

The following discussion presents the potential payments for each of our named executive officers upon a termination of employment or change in control. Pursuant to applicable SEC rules, the analysis contained in this discussion does not consider or include payments made to a named executive officerpublic company. This pre-approval requirement is waived with respect to ~~contracts, agreements, plans~~the provision of services other than audit, review, or ~~arrangements~~attest services if certain conditions set forth in Rule 2-01(c)(7)(i)(C) under the Exchange Act are met. None of the audit-related and tax services described above were subject to this rule and the approval procedures set forth therein. All services provided to the ~~extent they do not discriminate~~Company by Grant Thornton in ~~scope, terms or operation in favor of named executive officers of~~2023 and 2022 were pre-approved by the Company and that are available generally to all salaried employees. The actual amounts that would be paid upon a named executive officer’s termination of employment can only be determined at the time of such executive officer’s termination. Due to the number of factors that affect the nature and amount of any compensation or benefits provided upon the termination events, any actual amounts paid or distributed may be higher or lower than reported below. Among other factors that could affect these amounts are the timing during the year of any such event and our stock price. This discussion assumes the relevant trigger event occurred on December 31, 2020, in accordance with SEC rules.

The Company’s named executive officers serve at the discretion of the Board of Directors. We have not entered into formal employment agreements with any of our named executive officers. In connection with Mr. Kozlowski’s hire in 2016, however, we provided him with a Letter Agreement, or the DK Letter Agreement, outlining his basic compensation terms and providing for grants of equity compensation, among other things. The DK Letter Agreement specified that his employment was terminable by either party at any time with or without cause or advance notice. In the event of a named executive officer’s termination of employment for any reason whatsoever, any severance benefits or other cash payments, if any, would be negotiated on an individual basis.

Audit Committee.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE RATIFICATION OF CROWE AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2024.

~~Awards Under the Company’s Equity Compensation Plans~~

The Company has granted awards of stock options, restricted stock units and restricted stock to each of the NEOs under one or more of the Company’s Stock Option and Equity Plan of 2011, Stock Option and Equity Plan of 2013, 2018 Equity Incentive Plan and 2020 Equity Incentive Plan (collectively, the “Equity Compensation Plans”). The currently outstanding wards granted to the NEOs are described above in the “Outstanding Equity Awards at Fiscal Year-End” table. These awards are subject to certain trigger events which would affect their terms and as a result represent our only obligation to make any potential payments upon termination or change of control of our NEOs. As described in this table, these awards are comprised of unvested options (not exercisable) and vested options (exercisable) and unvested RSUs.

Mr. Kozlowski received stock options from the 2018 Equity Incentive Plan and the 2020 Equity Incentive Plan. With respect to such vested options, in the event of death, disability or retirement, the exercise period is one year from the trigger date, subject to termination on the expiration date of this option, if earlier. In the event of an involuntary termination following a change in control, all options would remain exercisable (subject to the expiration provisions otherwise applicable to the option) and would be exercisable for a period of one year following such termination. If his employment is terminated for cause, all options that have not been exercised will expire and be forfeited. If his employment terminates for any other reason, these options may thereafter be exercised, to the extent exercisable at the time of such termination, for a period of three months following termination, subject to termination on the option’s expiration date, if earlier.

With respect to unvested options, in the event of death, disability or retirement, such options would vest on the one year anniversary of the date of termination of service and, since the one year vesting period would coincide with the one year permitted exercise period, notice of exercise would be required to be provided prior to the expiration of the one year period following termination, with exercise permitted immediately after the one year period, provided that no option would become vested after the expiration of its term and subject to restrictions based on ISO treatment. In the event of an involuntary termination following a change in control, all options would become exercisable (subject to the expiration provisions otherwise applicable to the option) and would be exercisable for a period of one year following such termination. If employment has been terminated for cause or for any other reason, these options would expire and be forfeited.

With respect to unvested RSUs, in the event of death, disability or retirement, the unvested RSUs would vest on the one-year anniversary of such termination of service. In the event of an involuntary termination following a change in control, all such RSUs would become fully earned and vested immediately. In the event of a termination for cause or other termination, unvested RSUs would be forfeited. All RSUs were granted from the 2018 Equity Incentive Plan and the 2020 Equity Incentive Plan, thus these conditions additionally apply to the other NEOs, all of whose RSUs were granted from those two plans.

See Exhibits 10.15 and 10.7.1 to our Annual Report on Form 10K for the year ended December 31, 2020 (“the 2020 Annual Report”) for plan documents which detail the definitions related to the trigger events summarized above.

Mr. Frenkiel and Mr. Pareigat received stock options from the Stock Option and Equity Plan of 2011 which are now fully vested. In the event of death, disability or retirement or other circumstances, the plan document specifies that the Compensation Committee has discretion to determine amounts payable pursuant to the grant instruments. Accordingly, it could make both these vested options payable to grantees at its discretion, subject to Treasury regulations. In the event of a change of control, the Compensation Committee also has discretion as to the payment or disposition of options. See Exhibit 10.1 to the 2020 Annual Report for the plan document which details the definitions related to trigger events.

~~The amount each NEO would accrue under the relevant trigger event is set forth below.~~

Name Principal Position Involuntary Termination following a Change in Control ($)
Death, Disability,
Retirement ($)
Damian Kozlowski ⁽¹⁾ Chief Executive Officer 5,804,415 5,804,415
Paul Frenkiel ⁽²⁾ Chief Financial Officer 531,463 531,463
Mark Connolly ⁽²⁾ Chief Credit Officer 1,081,612 1,081,612
Gregor Garry ⁽²⁾ Chief Operating Officer 484,384 484,384
Thomas Pareigat ⁽²⁾ General Counsel 647,433 647,433

~~(1)~~

Amounts for Mr. Kozlowski were computed by adding the December 31, 2020 share price of $13.65 times the number of unvested RSUs, plus the number of unvested stock options times the difference of that share price and exercise prices.

~~(2)~~

~~Amounts for Messrs. Frenkiel, Connolly, Garry and Pareigat consisted of multiplying the share price of $13.65 times the number of unvested RSUs, as they had no unvested stock options.~~

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Proxy Summary

Proposal #1

Proposal #2

Proposal #3

Proposal #4

Other Matters

~~DIRECTOR COMPENSATION~~

~~Director Compensation Table~~

The following table provides information concerning the compensation of the Company’s non-NEO directors for 2020. The compensation of the only director who is an NEO, Mr. Kozlowski, is described above and he receives no additional compensation for his services as a member of the Board. Mr. Cohen is employed by the Company and serves as its Chairman of the Board and his salary and other compensation for these services are described below. Each independent director receives annual cash compensation of $75,000, paid quarterly. In addition, each independent director receives $500 for each meeting of a committee of the Board of Directors he or she attends; the Chairman of the Audit Committee and the Chairman of the Risk Committee receives $1,500 for each committee meeting attended; and the chairmen of the other committees receive $1,000 for each committee meeting attended. The independent lead director, Michael J. Bradley, receives additional annual cash compensation of $20,000 per annum. As independent lead director, Mr. Bradley serves on the executive, audit, risk and compensation committees, which allows him to provide independent leadership. The Compensation Committee granted equity with a market value at date of grant of $90,000 to independent directors, to align their interests with other stockholders. The annual cash compensation of $75,000 and individual meeting fees were not increased in 2020 compared to the prior year.

Fees Earned or Paid in Cash ($)
Stock Awards ($)⁽⁴⁾
Total ($)
Walter T. Beach 79,000 90,000 169,000
Michael J. Bradley 105,500 90,000 195,500
John C. Chrystal ⁽¹⁾ 96,000 90,000 186,800
Daniel G. Cohen ⁽²⁾ 602,500 247,500 850,000
Matthew N. Cohn 81,000 90,000 171,000
John M. Eggemeyer 80,500 90,000 170,500
Hersh Kozlov 77,000 90,000 167,000
William H. Lamb 79,500 90,000 169,500
James J. McEntee III 96,000 90,000 186,000
Daniela A. Mielke 88,000 90,000 178,000
Stephanie B. Mudick 86,500 90,000 176,500
Mei-Mei H. Tuan 80,000 90,000 170,000

~~(1)~~

~~Mr. Chrystal serves as Vice Chairman.~~

~~(2)~~

Mr. Cohen’s fees and stock awards reflect his compensation as Chairman of the Board and for his role in the commercial real estate securitization division, which he established. His compensation is comprised of salary of $300,000 per year and, in 2020, of additional cash and stock awards, respectively, of $302,500 and $247,500. The commercial real estate securitization division, prior to 2020, originated commercial real estate loans which it sold into securitizations. Related gains on sale amounted to approximately $24 million in 2019, $21 million in 2018, and $18 million in 2017. In 2020, this division originated approximately $722 million of these loans and the Company decided to retain loans originated on the balance sheet. Including loans generated in the prior year, the portfolio amounted to approximately $1.5 billion at year end.

~~(3)~~

Outstanding restricted stock units and stock options as of December 31, 2020 are as follows. Each director in the table above, except for Mr. Cohen, had 13,100 of restricted stock units outstanding. Mr. Cohen had 57,606 restricted stock units outstanding. Directors Beach, Bradley, Cohn, Lamb and McEntee had 15,000 options, comprised of three 5,000 share grants with exercise prices of $7.36, $8.50 and $10.45. Mr. Cohen had two 50,000 option grants outstanding at $7.36 and $8.50 exercise prices. Mr. Chrystal had 5,000 options outstanding with a $10.45 exercise price. The fair values of the options at the respective exercise prices of $7.36, $8.50 and $10.45, were $3.54, $4.51 and $4.24 as of the date of grant. Directors Eggemeyer, Kozlov, Tuan, Mielke and Mudick had no options outstanding. The compensation and stock awards to Mr. Eggemeyer are made to Castle Creek Partners VI L.P., the fund with which he is affiliated.

AUDIT COMMITTEE REPORT

In connection with the preparation and filing of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020~~2023 (the ~~“2020~~“2023 Annual Report on Form 10-K”):

~~the Audit Committee reviewed and discussed the audited financial statements included in the 2020 Annual Report on Form 10-K with the Company’s management;~~

the Audit Committee discussed with the Company’s independent registered public accounting firm, Grant Thornton LLP (“Grant Thornton”), the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC;

the Audit Committee received the written disclosures and the letter from Grant Thornton required by applicable requirements of the PCAOB regarding Grant Thornton’s communications with the Audit Committee concerning independence, and has discussed with Grant Thornton the independence of Grant Thornton; and

based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors of the Company that the audited financial statements be included in the Company’s 2020 Annual Report on Form 10-K for filing with the SEC.

The Audit Committee reviewed and discussed the audited financial statements included in the 2023 Annual Report on Form 10-K with the Company’s management;

The Audit Committee discussed with the Company’s independent registered public accounting firm at the time, Grant Thornton, the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC;

The Audit Committee received the written disclosures and the letter from Grant Thornton required by applicable requirements of the PCAOB regarding Grant Thornton’s communications with the Audit Committee concerning independence, and has discussed with Grant Thornton the independence of Grant Thornton; and

Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors of the Company that the audited financial statements be included in the Company’s 2023 Annual Report on Form 10-K for filing with the SEC.

In performing its functions, the Audit Committee acts only in an oversight capacity. In its oversight role, the Audit Committee relies on the work and assurances of the Company’s management, which has the primary responsibility for financial statements and reports, and of the independent registered public accounting firm who, in its report, expressed an opinion on the conformity of the Company’s consolidated financial statements to ~~generally accepted accounting principles (“GAAP”).~~GAAP. The Audit Committee’s oversight does not provide it with an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or policies, or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the Audit Committee’s considerations and discussions with management and the independent registered public accounting firm do not assure that the financial statements are presented in accordance with GAAP, that the audit of the financial statements has been carried out in accordance with GAAP, or that the independent registered public accounting firm is “independent.”

The Audit Committee of the Board of Directors of the Company has provided this report. This report shall not be deemed to be filed under, nor shall it be deemed to be incorporated by reference by any general statement incorporating this Proxy Statement into any filing under the Securities Act of 1933, as amended, and the Exchange Act (collectively, the “Acts”), except to the extent the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under such Acts.

Michael J. Bradley, ~~Chairman~~
Chair
Matthew N. Cohn
~~John C. Chrystal~~
~~Stephanie B. Mudick~~

Cheryl D. Creuzot

2024 PROXY STATEMENT

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~~PROPOSAL 3. APPROVAL OF ACCOUNTANTS~~

We are asking our stockholders to approve a proposal to adopt The Bancorp, Inc. 2024 Equity Incentive Plan (the “2024 Equity Incentive Plan”) at our Annual Meeting. The Board of Directors ~~unanimously recommends~~has adopted, subject to stockholder approval, the 2024 Equity Incentive Plan on March 28, 2024, upon recommendation of the Compensation Committee, to provide additional incentives for our employees and directors to promote our growth and performance and to further align their interests with those of our stockholders. If approved by our stockholders, the 2024 Equity Incentive Plan will become effective as of the date of the stockholder approval (the “Effective Date”).

The 2024 Equity Incentive Plan is intended to replace The Bancorp, Inc. 2020 Equity Incentive Plan (the “Prior Plan”). If the 2024 Equity Incentive Plan is approved by our stockholders, no additional grants will be made under the Prior Plan following the Effective Date. Outstanding grants under the Prior Plan will continue in effect according to their terms.

Any shares of our Common Stock that remained available for grants under the Prior Plan as of the Effective Date, and any shares of Common Stock (“Shares”) subject to outstanding grants under the Prior Plan as of the Effective Date that are payable in Shares and that expire, are forfeited, or are otherwise terminated without having been exercised, vested, or settled in full, as applicable, on or after the Effective Date, may be issued with respect to awards under the 2024 Equity Incentive Plan.

If our stockholders do not approve the 2024 Equity Incentive Plan, we will continue to be able to grant awards under the Prior Plan following the date of our Annual Meeting. As of April 2, 2024, 25,536 Shares were available for grant under the Prior Plan.

The Board is seeking stockholder approval of the 2024 Equity Incentive Plan in order to (i) meet Nasdaq listing requirements, (ii) allow incentive stock options awarded under the 2024 Equity Incentive Plan to meet the requirements of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder (the “Code”), (iii) maintain a limit on annual compensation of non-employee directors, and (iv) conform to good corporate governance.

WHY WE ARE SEEKING APPROVAL OF THE 2024 EQUITY INCENTIVE PLAN

Equity incentive compensation plays a key role in the Company’s efforts to attract and retain key personnel essential to the Company’s long-term growth and financial success. We are asking our stockholders to approve the 2024 Equity Incentive Plan to assist the Company in attracting, motivating, and retaining highly qualified employees and directors by offering a competitive compensation program that is linked to the performance of our Common Stock.

Offering a broad-based equity compensation program is vital to attracting and retaining highly skilled people in the highly competitive financial services industry. We use equity awards to increase incentives on the part of employees and directors who provide important services to the Company. We believe that providing an equity stake in the future success of our Company motivates these individuals to achieve our long-term business goals and to increase stockholder value. Their innovation and productivity are critical to our success. Accordingly, approving the 2024 Equity Incentive Plan is in the best interest of our stockholders because equity awards help us to:

■

Attract, motivate, and retain talented employees and directors;

■

Align the interests of award recipients and stockholders; and

■

Link compensation with Company performance.

We strongly believe that approval of the 2024 Equity Incentive Plan will enable us to achieve our goals in attracting and retaining our most valuable asset: our employees and directors.

Without an appropriate reserve of Shares to grant competitive equity-based incentives, we would be forced to consider cash replacement alternatives to provide a market-competitive total compensation package necessary to attract, retain, and motivate the talent critical to our future successes. These cash replacement alternatives could, among other things, reduce the cash available for investment in growth and

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Other Matters

development and cause a loss of motivation by employees to achieve superior performance over a longer period of time. Equity-based incentives, by contrast, directly align a portion of the compensation of our employees and directors with the economic interests of our stockholders.

For that reason, the Company has structured the 2024 Equity Incentive Plan to provide flexibility in designing equity incentive programs with a broad array of equity incentives, such as stock options, restricted stock awards, and restricted stock unit awards, and implement competitive incentive compensation programs for its employees and directors. The 2024 Equity Incentive Plan will be the only plan under which new equity awards may be granted to our employees and directors. If this Proposal 4 is not approved, then we would be at a disadvantage against our competitors for recruiting, retaining, and motivating individuals critical to our success and could be forced to increase cash compensation, thereby reducing resources available to meet our business needs.

HOW WE DETERMINED THE SIZE AND TERMS OF THE 2024 EQUITY INCENTIVE PLAN

If this Proposal 4 is approved by our stockholders, subject to adjustments as described below, the maximum aggregate number of Shares that may be issued under the 2024 Equity Incentive Plan will be 2,370,000. In addition, subject to adjustment described below, Shares that remained available for grants under the Prior Plan as of the Effective Date and Shares subject to outstanding grants under the Prior Plan as of the Effective Date that are payable in Shares and that expire, are forfeited, or are otherwise terminated without having been exercised, vested, or settled in full, as applicable, on or after the Effective Date, may be issued with respect to awards under the 2024 Equity Incentive Plan.

When determining the number of Shares to be authorized for issuance under the 2024 Equity Incentive Plan, the Compensation Committee worked with Pay Governance and considered a number of factors, including: 1) competitive data from peer companies, 2) industry practices related to the adoption of equity incentive plans, 3) applicable regulations related to the adoption of equity incentive plans, 4) guidance provided by major shareholder advisory firms regarding equity-based incentive plans, 5) burn rate and a dilution analysis, and 6) the number of Shares needed for future awards.

HIGHLIGHTS OF THE 2024 EQUITY INCENTIVE PLAN

■

Minimum Vesting Periods for Awards. The 2024 Equity Incentive Plan requires a one-year minimum vesting schedule for awards, except that, subject to adjustment, up to 5% of the Shares reserved for issuance (subject to certain adjustments) are available for grant without regard to this requirement.

■

Limits on Grants to Participants. The maximum number of Shares, in the aggregate, that may be covered by an award granted to anyone (other than a non-employee member of the Board) during any calendar year is 500,000 Shares. The 2024 Equity Incentive Plan imposes an aggregate limit on the value of awards that may be granted, when aggregated with cash fees that may be paid, to each non-employee member of the Board for services as a non-employee member of the Board in any year to $600,000 in total value.

■

No Liberal Share Recycling. The 2024 Equity Incentive Plan prohibits the re-use of Shares withheld or delivered to satisfy the exercise price of a stock option or to satisfy tax withholding requirements associated with any award. The 2024 Equity Incentive Plan also prohibits “net share counting” upon the exercise of stock options and prohibits the re-use of Shares purchased on the open market with the proceeds of option exercises.

■

No Single-Trigger Vesting for Time-Based Awards Upon a Change in Control. The 2024 Equity Incentive Plan does not provide for “single-trigger” vesting of time-based equity awards upon the occurrence of a Change in Control (as defined below). Instead, the 2024 Equity Incentive Plan provides for automatic acceleration of vesting of a participant’s time-based awards only if the participant experiences an involuntary termination of employment at or following a Change in Control of the Company. Awards subject to performance-based vesting conditions will vest according to the terms set forth in the applicable award agreement.

■

No Dividends Paid on Stock Options. The 2024 Equity Incentive Plan prohibits dividends or dividend equivalent rights to be granted in connection with stock options. The Compensation Committee may grant dividends and dividend equivalent rights with respect to restricted stock awards and restricted stock unit awards, respectively, but such dividends or dividend equivalent rights will not be payable until the underlying awards have vested.

■

Awards Subject to Applicable Clawback Policies. Awards granted under the 2024 Equity Incentive Plan are subject to any applicable clawback or recoupment policies adopted or implemented by the Board from time to time.

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No Repricing of Stock Options. The 2024 Equity Incentive Plan prohibits repricing and exchange of underwater options for cash or Shares without stockholder approval.

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No Evergreen Authorization. The 2024 Equity Incentive Plan does not contain an “evergreen” Share reserve, meaning that the Share reserve will not be increased without further stockholder approval.

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Administered by an Independent Committee. The 2024 Equity Incentive Plan will be administered by an independent committee of the Board.

2024 PROXY STATEMENT

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Proposal #2

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Other Matters

DILUTION ANALYSIS

The table below shows our potential dilution levels based on our Common Stock outstanding as of April 2, 2024, the new Shares requested for issuance under the 2024 Equity Incentive Plan, and our total equity awards outstanding as of April 2, 2024. The Board believes that the number of Shares requested under the 2024 Equity Incentive Plan represents a reasonable amount of potential equity dilution and will allow us to continue granting equity awards.

Potential Overhang with 2,370,000 Requested Shares

Stock Options Outstanding as of April 2, 2024(1)			668,293
Weighted Average Exercise Price of Stock Options Outstanding as of April 2, 2024		$	17.30
Weighted Average Remaining Term of Stock Options Outstanding as of April 2, 2024	6.90 years
Full Value Awards Outstanding as of April 2, 2024(2)			795,601
Total Equity Awards Outstanding as of April 2, 2024(3)			1,463,894
Shares Available for Grant under the Prior Plan as of April 2, 2024(4)			25,563
Shares Requested for the 2024 Equity Incentive Plan			2,370,000
Total Potential Overhang under the 2024 Equity Incentive Plan(5)			3,859,457
Shares of Common Stock Outstanding as of April 2, 2024			52,253,037
Fully Diluted Shares(6)			56,112,494
Potential Dilution of 2,370,000 Shares as a Percentage of Fully Diluted Shares(7)			4.2%

(1)

“Stock Options Outstanding” include awards granted under the Prior Plan and the 2018 Equity Incentive Plan.

(2)

“Full Value Awards Outstanding” include restricted stock unit awards granted under the Prior Plan.

(3)

“Total Equity Awards Outstanding” represents the sum of Stock Options Outstanding and Full Value Awards Outstanding, in each case as of April 2, 2024.

(4)

As of the Effective Date, Shares available for grant under the Prior Plan will be available for grant under the 2024 Equity Incentive Plan and no Shares will be available for grant under the Prior Plan.

(5)

“Total Potential Overhang” includes the sum of the Total Equity Awards Outstanding as of April 2, 2024, the number of Shares Available for Grant under the Prior Plan as of April 2, 2024, and the number of Shares requested for the 2024 Equity Incentive Plan.

(6)

“Fully Diluted Shares” reflects the sum of the Total Equity Awards Outstanding as of April 2, 2024, the number of Shares Available for Grant under the Prior Plan as of April 2, 2024, and the number of additional Shares requested for grant under the 2024 Equity Incentive Plan added to the number of Shares of Common Stock Outstanding as of April 2, 2024.

(7)

“Potential Dilution” is computed by dividing the additional Shares requested for the 2024 Equity Incentive Plan by Fully Diluted Shares.

BURN RATE

In connection with our stock-based compensation programs, we are committed to using equity incentive awards prudently and within reasonable limits. Accordingly, we closely monitor our past Share usage (referred to as “burn rate”) each year and over time. The table below sets forth the following information regarding the awards granted under the Prior Plan: (i) the burn rate for each of the last three calendar years and (ii) the average burn rate over the last three calendar years. The burn rate for a year has been calculated as follows: (1) all stock options and full value awards granted in the applicable year, divided by (2) the weighted average number of Shares outstanding for the applicable year.

Element	2023		2022		2021		3-Year Average
Stock Options Granted		57,573		100,000		100,000		85,858
Full Value Awards Granted		547,556		260,693		313,697		373,982
Total Granted		605,129		360,693		413,697		459,840
Weighted Average Shares of Common Stock Outstanding as of applicable fiscal year-end		54,506,065		56,556,303		57,190,311		56,084,226
Burn Rate		1.11%		0.64%		0.72%		0.82%

The burn rate means that we used an annual average of 0.82% of the weighted average Shares outstanding for awards granted or earned over the past three years.

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Proxy Summary

Proposal #1

Proposal #2

Proposal #3

Proposal #4

Other Matters

SUMMARY OF MATERIAL FEATURES OF THE 2024 EQUITY INCENTIVE PLAN

The following is a summary of the material features of the 2024 Equity Incentive Plan, a full copy of which is attached hereto as Appendix A. This summary of the 2024 Equity Incentive Plan is not intended to be a complete description of the 2024 Equity Incentive Plan and is qualified in its entirety by the actual text of the 2024 Equity Incentive Plan to which reference is made.

Purpose

The 2024 Equity Incentive Plan is intended to promote the long-term financial success of the Company and its subsidiaries by providing a means to attract, retain, and reward individuals who contribute to such success and to further align their interests with those of the Company’s stockholders ~~approve~~through the ~~selection~~ownership of ~~Grant Thornton LLP, independent registered public accounting firm,~~Common Stock of the Company.

Administration

The 2024 Equity Incentive Plan will be administered by the Compensation Committee. The Compensation Committee has the authority and discretion to: (1) select the persons who will receive awards; (2) determine the time(s) of receipt, types of awards, and the number of Shares covered by awards; (3) establish the terms, conditions, restrictions, and other provisions relating to ~~audit~~each award; (4) cancel or suspend awards and reduce, eliminate or accelerate any restrictions or vesting requirements applicable to awards after the date of grant (subject to certain restrictions described below); (5) extend the time period to exercise a stock option in a manner consistent with Section 409A of the Code; (6) suspend a participant’s right to exercise a stock option during a blackout period (or similar restricted period) or exercise a stock option in a particular manner to the extent the Compensation Committee deems it necessary or in the Company’s best interests; (7) adopt, amend, or rescind any rules and regulations relating to the 2024 Equity Incentive Plan; (8) interpret the 2024 Equity Incentive Plan; and (9) deal with any other matters arising under the 2024 Equity Incentive Plan.

Subject to applicable law and stock exchange requirements, the Compensation Committee may delegate all or any portion of its responsibilities and powers to any of its members or to any person selected by it. The Compensation Committee may revoke any such delegation of authority at any time. In addition, the Board (or, as necessary to maintain compliance with applicable law, those members of the Board who are “independent directors” under corporate governance statutes or stock exchange requirements) may exercise the powers of the Compensation Committee at any time in their discretion.

Shares Subject to the 2024 Equity Incentive Plan

The maximum number of Shares of Common Stock that will be available for awards under the 2024 Equity Incentive Plan, subject to adjustment described below, will be equal to 2,370,000 Shares. In addition, subject to adjustment described below, any Shares available for grants under the Prior Plan as of the Effective Date and any Shares subject to outstanding grants under the Prior Plan as of the Effective Date that are payable in Shares and that expire, are forfeited, or are otherwise terminated without having been exercised, vested, or settled in full, as applicable, on or after the Effective Date, may be issued with respect to awards granted under the 2024 Equity Incentive Plan. The maximum number of Shares that may be delivered to participants and their beneficiaries pursuant to incentive stock options under the 2024 Equity Incentive Plan on or after the Effective Date will be 2,370,000 Shares.

The 2024 Equity Incentive Plan does not use liberal Share recycling in determining the number of Shares available for issuance under the 2024 Equity Incentive Plan, meaning that each Share issued pursuant to any type of award will reduce the number of Shares available under the 2024 Equity Incentive Plan by one Share. To the extent any Shares covered by an award under the 2024 Equity Incentive Plan (including grants made under the Prior Plan) are not delivered to a participant or beneficiary for any reason on or at the Effective Date, including because the award is forfeited or canceled or because a stock option is not exercised, such Shares will not be deemed to have been delivered for purposes of determining the maximum number of Shares available for delivery under the 2024 Equity Incentive Plan.

To the extent (i) a stock option (including a stock option granted under the Prior Plan) is exercised by using an exchange of Shares to pay the exercise price, (ii) Shares are withheld to satisfy withholding taxes upon exercise, vesting, settlement of an award (including an award granted under the Prior Plan), or (iii) Shares are withheld to satisfy the exercise price of stock options in a net settlement, the number of Shares available under the 2024 Equity Incentive Plan will be reduced by the gross number of Shares subject to the awards exercised or vested rather than by the net number of Shares subject to the awards. In addition, Shares purchased on the open market with the cash proceeds from the exercise price of a stock option under the 2024 Equity Incentive Plan or the Prior Plan will not be added back to the number of Shares authorized for grant under the 2024 Equity Incentive Plan.

The number of Shares available under the 2024 Equity Incentive Plan will not be reduced by the Shares that are issued or transferred under awards made pursuant to an assumption, substitution, or exchange for previously granted awards of a company acquired by the Company in a transaction. Additionally, subject to applicable stock exchange listing and Code requirements, Shares available under an acquired company’s stockholder approved plan, as adjusted, may be used by the Company for grants of awards under the 2024 Equity Incentive Plan, and they will not reduce the 2024 Equity Incentive Plan’s Share reserve.

Adjustments

In the event of a corporate transaction involving the Common Stock of the Company (including any recapitalization, merger, consolidation, spin-off, reorganization, stock split, reverse split, repurchase, combination or exchange of Shares, stock dividend or other distribution (whether in

2024 PROXY STATEMENT

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cash, securities, or other property) liquidation, dissolution, or other similar corporate transaction), the Compensation Committee will equitably adjust (i) the number and kind of Shares for which grants of awards may be made under the 2024 Equity Incentive Plan, (ii) the number and kind of Shares that may be delivered or that are deliverable with respect to outstanding awards, and (iii) the exercise price of stock options. In addition, the Compensation Committee is authorized to adjust the terms and conditions (including performance goals) of, and the criteria included in, awards in recognition of unusual or nonrecurring events affecting the Company or its parent or subsidiary (including those events affecting the financial statements of the Company or its parent or subsidiary) or in response to changes in applicable laws, regulations, or accounting principles.

Limitations on Grants to EMPLOYEES AND DIRECTORS

Subject to adjustment described above, the maximum number of Shares, in the aggregate, that may be subject to an award granted to anyone (other than a non-employee member of the Board) in any calendar year will be 500,000 Shares. In addition, the maximum grant date value of Shares subject to awards granted to any non-employee member of the Board for services rendered during the calendar year will not exceed $600,000 in total value.

Eligibility

Any employees and directors of the Company or its subsidiaries may receive awards under the 2024 Equity Incentive Plan. The Compensation Committee will select which employees and directors will receive grants of awards under the 2024 Equity Incentive Plan. As of April 2, 2024, there were 10 directors, all of whom are members of the Board, and 764 employees. As a result of our internal policies, we typically only grant awards to approximately 9 to 12% of our employees.

Vesting and Minimum Vesting Requirements

The Compensation Committee determines the vesting schedule or conditions of each award granted under the 2024 Equity Incentive Plan. Generally, the 2024 Equity Incentive Plan requires that awards will be granted with regular vesting schedules that provide that no portion of awards will vest earlier than the one-year anniversary of the date of grant. This requirement does not apply to up to 5% of the Shares reserved under the 2024 Equity Incentive Plan as of the Effective Date (subject to adjustment described above), which may be granted without regard to this minimum vesting requirement. The Compensation Committee has the discretion to provide that vesting will accelerate in the event of a participant’s death, disability, retirement, involuntary termination following a Change in Control, or other circumstances determined by the Compensation Committee.

Types of Awards

The 2024 Equity Incentive Plan provides for the issuance of restricted stock awards, restricted stock unit awards, incentive stock options, non-qualified stock options, or any other right or interest relating to Common Stock or cash, to employees and directors of the Company or its subsidiaries. Awards may be granted singularly or in any combination with another award. Awards may also be granted in substitution for or replacement to an existing award under the 2024 Equity Incentive Plan or any other compensation plan.

Stock Options

Under the 2024 Equity Incentive Plan, the Compensation Committee may grant incentive stock options and nonqualified stock options. Incentive stock options may be granted to employees of the Company or any parent or subsidiary of the Company, according to Section 424 of the Code. Nonqualified stock options may be granted to employees and directors. The exercise price of an option may not be less than the fair market value of a Share on the date the stock option is granted. If an incentive stock option is granted to a 10% stockholder, the exercise price cannot be less than 110% of the fair market value of a Share on the date the option is granted. The exercise price of an option may be lower than fair market value on the date of grant if the requirements of Section 409A are met with respect to the substitution and assumption of stock rights in a corporate transaction.

The Compensation Committee will establish the term of a stock option, but, in no event may the term of an option be longer than 10 years from the date of grant (or five years in the case of incentive stock options granted to a 10% stockholder). Subject to the minimum vesting requirements described above, stock options will become exercisable according to the terms and conditions set forth in the award agreement. The Compensation Committee will determine in the award agreement the vesting period, conditions to vesting, and any other terms and conditions applicable to the award, including the effects of a participant’s termination of service on the award.

The exercise price of a stock option may be payable either in cash, or, as determined by the Compensation Committee, (i) by tendering Common Stock of the Company owned by the participant in satisfaction of the exercise price, (ii) by a “cashless exercise” through a third party, (iii) by a net settlement of the stock option, using a portion of the Shares obtained on exercise in payment of the exercise price of the stock option, (iv) by personal, certified or cashier’s check, (v) by other property deemed acceptable by the Compensation Committee, or (vi) by a combination of the foregoing. The total number of Shares that may be acquired upon the exercise of a stock option will be rounded down to the nearest whole Share, with cash-in-lieu paid by the Company, at its discretion, for the value of any fractional Share. No dividends or dividend equivalent rights will accrue or be paid on any stock options granted under the 2024 Equity Incentive Plan.

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Restricted Stock Awards

The Compensation Committee may grant restricted stock awards to anyone eligible to participate in the 2024 Equity Incentive Plan. A restricted stock award means a grant of Shares for no consideration or such consideration as determined by the Compensation Committee, subject to restrictions imposed by the Compensation Committee, including conditioning vesting on the participant’s continued service with the Company or the attainment of specified performance measures determined by the Compensation Committee. The award agreement will specify the vesting period and any other terms and conditions not inconsistent with the 2024 Equity Incentive Plan as prescribed by the Compensation Committee.

Unless the Compensation Committee determines otherwise, (i) no dividend will be paid with respect to any restricted stock awards unless and until the award fully vests, (ii) any stock dividends declared on Shares subject to a restricted stock award will not vest, accrue, or be paid; and (iii) dividends will only be paid with respect to any dividends declared after the award’s vesting date. However, if the Compensation Committee specifies that dividends will be paid with respect to restricted stock awards in the applicable award agreement, no dividends on the underlying award will vest and become payable until the restricted stock award vests.

Unless otherwise determined by the Compensation Committee and specified in the applicable award agreement, a participant will have voting rights with respect to the unvested, non-forfeited restricted stock, which may be exercised at the participant’s discretion. Each holder of a restricted stock award will have the right to respond, or to direct the response, with respect to the related Shares of restricted stock, to any tender offer, exchange offer, cash/stock merger consideration election or other offer made to, or elections made by, the holders of Shares.

Restricted Stock Units

The Compensation Committee may grant restricted stock units to anyone eligible to participate in the 2024 Equity Incentive Plan. The holder of restricted stock units will be subject to restrictions imposed by the Compensation Committee, including any holding requirements or sale restrictions placed by the Company on the vesting of the restricted stock units and any restrictions imposed by applicable law or under the requirements of any national exchange or market upon which the Shares are listed. Restricted stock units may be subject to vesting, market, or performance conditions, as established by the Compensation Committee (including a requirement of the participant’s continued service) and set forth in the award agreement, along with any other terms and conditions to which the award is subject.

Restricted stock units are denominated in Shares. If and when the restrictions on the restricted stock units lapse, each represents a right of a participant to receive at the time of vesting, or such other date as specified in the award agreement, Shares, or, if the Compensation Committee so determines, an amount of cash based on the fair market value of the Common Stock, or a combination of cash and Shares.

Participants have no voting rights with respect to any restricted stock units granted under the 2024 Equity Incentive Plan, and unless the Compensation Committee determines otherwise, no dividend equivalent rights will accrue or be paid on restricted stock units. If the Compensation Committee determines that dividend equivalent rights will be granted in connection with a restricted stock unit award, such dividend equivalents may be paid or credited (either in cash or in actual or phantom Shares) on outstanding restricted stock units, subject to any terms and conditions set forth in the applicable award agreement; provided that, no dividend equivalents will vest or become payable until the underlying award vests and become payable.

Prohibition on Repricing

Except in connection with a corporate transaction involving the Company, and reductions of the exercise price approved by the Company’s stockholders, neither the Compensation Committee nor the Board may adjust or amend the terms of any outstanding stock options in a manner that would reduce or have the effect of reducing the exercise price of such stock option, whether through amendment, cancellation, replacement grants, or other means.

Change in Control

In the event of a corporate transaction in which the Company is not the surviving entity, unless the Compensation Committee determines otherwise, all outstanding awards will be converted into replacement awards with respect to voting common equity securities of the surviving entity that have comparable terms by the surviving corporation and reflect the same economic benefit, as determined by the Compensation Committee prior to the consummation of the transaction. The Compensation Committee may also determine that all of the outstanding awards be cancelled as of the effective date of the transaction in exchange for (i) in the case of stock options, a payment (in cash or Common Stock) per Share equal to the excess of the value exchanged for an outstanding Share in the transaction over the exercise price of such stock options (except in the case of underwater stock options, which may be canceled and terminated without option holder consent and without any payment to such holder), and (ii) in the case of restricted stock awards and restricted stock unit awards, a payment (in cash or Common Stock) per Share equal to the value exchanged for an outstanding Share in the transaction.

Unless the Compensation Committee determines otherwise and it is provided in the applicable award agreement, upon the involuntary termination of a participant by the Company or subsidiary (other than termination for cause) or the termination of employment by a participant for good reason at or following a Change in Control, all outstanding awards subject to time-based vesting conditions then held by a participant will immediately become fully earned, vested, and, in the case of stock options, exercisable (subject to the expiration provisions otherwise applicable to stock options). All stock options may be exercised for a period of one year following a participant’s involuntary termination other than for cause by the Company or subsidiary or termination of employment by a participant for good reason, but in no event later than the

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expiration of the term of the stock option. No stock options will be eligible for incentive stock option treatment if they are exercised more than three months following such involuntary termination. The award agreements governing awards that vest based on the attainment of specified performance measures will specify how to calculate the vesting of such awards.

To the extent not otherwise specified in the applicable award agreement, if there is a Change in Control and all outstanding awards are not assumed by or replaced with grants that have comparable terms by the surviving entity, then the Compensation Committee has the discretion (but not the obligation) to determine the treatment of outstanding unvested awards, including, without limitation, taking any of the following actions with respect to any outstanding awards:

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Determine that outstanding stock options will accelerate and become exercisable, in whole or in part, upon the Change in Control or upon such other event as the Compensation Committee determines, provided that the Compensation Committee may cancel and terminate any outstanding stock options that are underwater without the consent of the option holder and without any payment to such holder;

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Determine that the restrictions and conditions on outstanding restricted stock awards or restricted stock unit awards will lapse, in whole or in part, upon the Change in Control or upon such other event as the Compensation Committee determines;

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Determine that participants holding restricted stock units or dividend equivalent rights will receive a payment in settlement of such restricted stock units or dividend equivalent rights in an amount determined by the Compensation Committee;

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Require that participants surrender their outstanding stock options in exchange for a payment by the Company, in cash or Common Stock, as determined by the Compensation Committee, in an amount equal to the difference between the exercise price and the fair market value of the Shares underlying the stock option, provided that if the per Share fair market value of the Company’s Common Stock does not exceed the per Share stock option exercise price, the Company will not be required to make any payment to the participant upon surrender of the stock option;

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After giving participants an opportunity to exercise their outstanding stock options, terminate any unexercised stock options at such time as the Compensation Committee determines.

In general terms, a “Change in Control” for purposes of the 2024 Equity Incentive Plan occurs when:

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Consummation of a merger or consolidation of the Company or the Bank, and as a result, less than a majority of the combined voting power of the resulting corporation immediately after the merger or consolidation is held by persons who were stockholders of the Company or the Bank immediately before the merger or consolidation;

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The acquisition by a person or persons acting in concert of 25% or more of a class of the Company’s or the Bank’s voting securities (subject to certain excepted transactions set forth in the 2024 Equity Incentive Plan);

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A majority of the members of the Board or the members of the Bank’s board of directors are replaced during any consecutive two-year period by directors who are not first elected by the applicable board (or first nominated by the board for election by the stockholders) by a vote of at least two-thirds of the directors who were directors at the beginning of the two-year period or who are appointed as a director as a result of a directive, supervisory agreement or order issued by the primary federal regulator of the Company or the Bank, or by the Federal Deposit Insurance Corporation; or

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The Company or the Bank sells to a third party all or substantially all of its assets.

Forfeiture

The Compensation Committee may specify in an award agreement that, in addition to the otherwise applicable vesting or performance conditions of the award, the rights and benefits with respect to an award may be subject to reduction, cancellation, forfeiture, or recoupment upon certain events, including: termination of employment for cause; termination of the provision of services to the Company or any subsidiary; any violation of material policies of the Company or its subsidiaries; breach of noncompetition, confidentiality or other restrictive covenants that apply to the participant; or any other conduct that is detrimental to the business or reputation of the Company or any subsidiary.

Clawback or Recoupment

If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, any participant who is subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 will be required to reimburse the Company the amount of any payment in settlement of an award earned or accrued during the 12-month period following the first public issuance or filing with the SEC (whichever first occurred) of the financial document embodying such financial reporting requirement. In addition, awards granted under the 2024 Equity Incentive Plan are subject to any clawback policy adopted by the Board of Directors from time to time.

Withholding

All awards under the 2024 Equity Incentive Plan are subject to applicable U.S. federal (including FICA), state and local tax, foreign tax, or other tax withholding requirements. The Company may require participants receiving or exercising awards to pay to the Company the amount sufficient to satisfy any tax withholding requirements with respect to such awards. The Compensation Committee may satisfy tax withholding

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obligations by retaining Shares up to an amount that does not exceed the participant’s highest marginal tax rate for U.S. federal (including FICA), state and local tax liabilities, or as otherwise determined by the Compensation Committee.

Transferability

Except as otherwise provided by the Compensation Committee, incentive stock options under the 2024 Equity Incentive Plan are not transferable except: (i) as designated by the participant by will or by the laws of descent and distribution; (ii) to a trust established by the participant, if under Code Section 671 and applicable state law, the participant is considered the sole beneficial owner of the stock option while held in trust; or (iii) between spouses incident to a divorce or pursuant to a domestic relations order. If transfers are made pursuant to subsection (iii), the stock option will cease to qualify as an incentive stock option as of the date of transfer.

In addition, the Compensation Committee may provide in an award agreement or at any time following the date of grant, that a participant may transfer nonqualified stock options or restricted stock awards to immediate family members, trusts and partnerships established for the primary benefit of such family members or to charitable organizations in accordance with terms set by the Compensation Committee. In each of these cases, the participant may not receive consideration for the transfer of the award and the transferred award will continue to be subject to the terms and conditions applicable to them immediately preceding the transfer.

Lastly, awards of restricted stock are not transferable before such awards are fully vested, and restricted stock unit awards are not transferable, except in the event of a participant’s death pursuant to a beneficiary designation or by will or by the laws of descent and distribution.

Amendment and Termination

Subject to applicable law, the Board may, at any time, amend or terminate the 2024 Equity Incentive Plan or any award granted under the 2024 Equity Incentive Plan. Except as provided in the 2024 Equity Incentive Plan, no amendment or termination may cause the repricing of a stock option or adversely impair the rights of a participant or beneficiary under an award without the participant’s (or affected beneficiary’s) written consent prior to the date such amendment is approved by the Board. No amendment may be made without stockholder approval to the extent such approval is required under applicable law, including the Code and applicable stock exchange requirements.

Notwithstanding the foregoing, the Compensation Committee may amend the 2024 Equity Incentive Plan or any award agreement thereunder, to take effect retroactively or otherwise, for the following purposes, which, in the sole discretion of the Compensation Committee, may materially and adversely affect the financial condition or results of operations of the Company: (i) conforming the 2024 Equity Incentive Plan or the award agreement to current or future law; or (ii) avoiding an accounting treatment resulting from an accounting pronouncement or interpretation issued by the SEC or Financial Accounting Standards Board subsequent to the adoption of the 2024 Equity Incentive Plan or the making of the award affected thereby.

Duration of Plan

The 2024 Equity Incentive Plan will become effective upon approval by the stockholders at the Annual Meeting occurring on May 29, 2024. The 2024 Equity Incentive Plan will remain in effect as long as any awards under it are outstanding. No award may be granted under the 2024 Equity Incentive Plan after the day immediately preceding the ten-year anniversary of the Effective Date. The Board may terminate the 2024 Equity Incentive Plan at any time, provided that any termination of the 2024 Equity Incentive Plan will not affect outstanding awards. On and after the Effective Date, no further awards will be granted under the Prior Plan, which will remain in existence for the sole purpose of administering outstanding grants made thereunder.

FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of the federal income tax consequences that may arise in conjunction with participation in the 2024 Equity Incentive Plan. It does not purport to be a complete description of all applicable rules, and those rules (including those summarized here) are subject to change.

Non-Qualified Stock Options

A participant generally will not recognize taxable income upon the grant of a non-statutory option. Rather, at the time of exercise of the option, the participant will recognize ordinary income for income tax purposes in an amount equal to the excess, if any, of the fair market value of the Shares purchased over the exercise price. The Company generally will be entitled to a corresponding tax deduction at such time and in the same amount, if any, that the participant recognizes as ordinary income. The participant’s tax basis in any Shares received upon the exercise of an option will be the fair market value of the Shares on the date of exercise, and if the Shares are later sold or exchanged, then the difference between the amount received upon such sale or exchange and the fair market value of such Shares on the date of exercise will generally be taxable as long-term or short-term capital gain or loss (if the Shares are a capital asset of the participant) depending upon the length of time such Shares were held by the participant.

Incentive Stock Options

Incentive stock options are eligible for favorable U.S. federal income tax treatment if certain requirements are satisfied. An incentive stock option must have an option price that is not less than the fair market value of the stock at the time the option is granted and must be exercisable

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within ten years from the date of grant. A participant granted an incentive stock option generally does not realize compensation income for U.S. federal income tax purposes upon the grant of the option. At the time of exercise of an incentive stock option, no compensation income is realized by the participant other than tax preference income for purposes of the federal alternative minimum tax on individual income. If the Shares acquired on exercise of an incentive stock option are held for at least two years after grant of the option and one year after exercise, the excess of the amount realized on the sale over the exercise price will be taxed as capital gain. If the Shares acquired on exercise of an incentive stock option are disposed of within less than two years after grant or one year of exercise, the optionee will realize taxable compensation income equal to the lesser of (i) the excess of the fair market value of the Shares on the date of exercise over the option price or (ii) the excess of the amount realized on the sale over the option price. Any additional amount realized will be taxed as capital gain.

Restricted Stock Awards

A participant who has been granted a restricted stock award will not realize taxable income at the time of grant, provided that the Shares subject to the award are not delivered at the time of grant, or if the Shares are delivered, it is subject to restrictions that constitute a “substantial risk of forfeiture” (within the meaning of the Code). A participant will recognize ordinary income in an amount equal to the fair market value of the Shares at the time the Shares are no longer subject to a substantial risk of forfeiture. The Company will generally be entitled to a deduction at the time when, and in the amount that, the participant recognizes ordinary income on account of the lapse of the restrictions.

A participant’s tax basis in the Shares will equal their fair market value at the time the restrictions lapse, and the participant’s holding period for capital gains purposes will begin at that time. Any cash dividends paid on the restricted stock before the restrictions lapse will be taxable to the participant as additional compensation (and not as dividend income). Under Section 83(b) of the Code, a participant may elect to recognize ordinary income at the time the Shares of stock are awarded in an amount equal to their fair market value at that time, notwithstanding the fact that such Shares of stock are subject to restrictions and a substantial risk of forfeiture. If such an election is made, no additional taxable income will be recognized by such participant at the time the restrictions lapse, the participant will have a tax basis in the Shares equal to their fair market value on the date of their award, and the participant’s holding period for capital gains purposes will begin at that time. The Company generally will be entitled to a tax deduction at the time when, and to the extent that, ordinary income is recognized by such participant.

Restricted Stock Units

A participant who has been granted a restricted stock unit award will not realize taxable income at the time of grant and will not be entitled to make an election under Code Section 83(b) of the Code since no Shares are actually transferred to the participant on the date of grant. Upon the settlement of a restricted stock unit award in cash or Shares, the participant will recognize ordinary income equal to the aggregate value of the payment received, and we generally will be entitled to a tax deduction at the same time and in the same amount.

Change in Control

Any acceleration of the vesting or payment of awards under the 2024 Equity Incentive Plan in the event of a change in control or termination of service following a change in control may cause part or all of the consideration involved to be treated as an “excess parachute payment” under the Section 280G of the Code, which may subject the participant to a 20% excise tax and preclude deduction by the Company.

Impact of Section 409A

Section 409A of the Code applies to deferred compensation, which is generally defined as compensation earned currently, the payment of which is deferred to a later taxable year. Awards under the 2024 Equity Incentive Plan are intended to be exempt from the requirements of Section 409A of the Code or to satisfy its requirements. An award that is subject to Section 409A of the Code and fails to satisfy its requirements will subject the holder of the award to immediate taxation, interest, and an additional 20% tax on the vested amount underlying the award.

Section 162(m) of the Code

Section 162(m) of the Code generally disallows a tax deduction to a publicly held company for compensation in excess of $1 million paid to its “covered employees” which generally includes all named executive officers. While the Compensation Committee considers the tax deductibility of each element of executive compensation as a factor in our overall compensation program, the Compensation Committee retains the discretion to approve compensation that may not qualify for the compensation deduction.

Tax Advice

The preceding discussion is based on federal tax laws and regulations presently in effect, which are subject to change, and the discussion does not purport to be a complete description of the federal income tax aspects of the 2024 Equity Incentive Plan. A participant may also be subject to state and local taxes in connection with the grant of awards under the 2024 Equity Incentive Plan. The Company suggests that participants consult with their individual tax advisors to determine the applicability of the tax rules to the awards granted to them in their personal circumstances.

NEW PLAN BENEFITS

Future benefits under the 2024 Equity Incentive Plan generally will be granted at the discretion of the Compensation Committee and are therefore not currently determinable.

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Because future grants of awards under the 2024 Equity Incentive Plan, if approved, would be subject to the discretion of the Board or Compensation Committee, the amount and terms of future awards to particular participants or groups of participants are not determinable at this time. No awards have been previously granted that are contingent on the approval of the 2024 Equity Incentive Plan.

The closing price of our Common Stock as reported on Nasdaq on April 2, 2024 was $32.43.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” APPROVAL OF THE BANCORP, INC. 2024 EQUITY INCENTIVE PLAN.

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GENERAL INFORMATION ABOUT THE
2024 ANNUAL MEETING

The 2024 Annual Meeting will be held on Wednesday, May 29, 2024 at 10:00 a.m., Eastern Time, at 409 Silverside Road, Suite 105, Wilmington, Delaware 19809 for the purposes set forth in the accompanying notice. Only stockholders who held our Common Stock at the close of business on April 2, 2024, which is the Record Date, will be entitled to notice of and to vote at the Annual Meeting.

This Proxy Statement is furnished in connection with the solicitation by the Board of proxies from holders of Common Stock to be used at the Annual Meeting, and at any adjournments thereof. Properly executed proxies duly returned to the Company, and not revoked, will be voted at the Annual Meeting and any and all adjournments thereof.

Questions and Answers About the Annual Meeting

HOW DO I ATTEND THE ANNUAL MEETING?

Holders of Common Stock at the close of business on the Record Date may attend the Annual Meeting in person at 409 Silverside Road, Suite 105, Wilmington, Delaware 19809. All stockholders who intend to appear in person should register in advance by calling or submitting a written notice to The Bancorp, Inc., Attention: Investor Relations, 409 Silverside Road, Suite 105, Wilmington, Delaware 19809, telephone number (215) 861-7990.

WHAT IS A PROXY?

It is your designation of another person to vote stock you own. Your designee is called a proxy. If you designate someone as your proxy in a written document, that document is also called a proxy or a proxy card. When you designate a proxy, you also may direct the proxy how to vote your shares. We refer to this as your “proxy vote.” Damian M. Kozlowski, the Company’s CEO, President and Director, and Paul Frenkiel, the Company’s Executive Vice President, CFO and Secretary, have been designated as the proxies to cast the votes of our stockholders at our Annual Meeting.

HOW ARE WE DISTRIBUTING OUR PROXY MATERIALS?

In accordance with rules adopted by the SEC, instead of mailing a printed copy of our proxy materials to each stockholder of record, we are permitted to furnish our proxy materials, including the Notice of Annual Meeting, this Proxy Statement, and our Annual Report, by providing access to such documents over the internet. Generally, stockholders will not receive printed copies of the proxy materials unless they request them. As a result, beginning on or about April 9, 2024, we mailed to stockholders a Notice of Internet Availability containing instructions on how to access our proxy materials, including the Notice of Annual Meeting, this Proxy Statement, and the Annual Report, over the internet. The Notice of Internet Availability is not a proxy card that can be submitted to vote your shares. Instead, the Notice of Internet Availability instructs you on how to access and review all of the important information contained in the proxy materials and how to vote online. If you received the Notice of Internet Availability, you will not receive paper copies of the proxy materials unless you request the materials by following the instructions in the notice.

Stockholders who have requested paper copies of the proxy materials will receive paper copies in the mail. If you received paper copies of the proxy materials, but instead in the future would like to receive only the proxy materials electronically, you can elect to do so by: (i) following the instructions provided in the proxy card, if your shares are registered in your name as a stockholder of record, or (ii) by contacting your broker, trustee, bank or other intermediary, if you hold your shares in street name as a beneficial owner.

WHAT IS HOUSEHOLDING?

In order to reduce expenses, we are taking advantage of certain SEC rules, commonly known as “householding,” that permit us to send (i) a single annual report (including our Annual Report) and/or a single proxy statement or (ii) a single Notice of Internet Availability to multiple registered stockholders who share an address, unless we have received contrary instructions from one or more of such stockholders. Any such stockholder who wishes to receive a separate copy of the Annual Report or a separate set of proxy materials now or in the future may write or call the Company to request a separate copy of these materials from the Company at The Bancorp, Inc., Attention: Investor Relations, 409 Silverside Road, Suite 105, Wilmington, Delaware 19809, telephone number (215) 861-7990. The Company will promptly deliver a copy of the requested materials.

Similarly, a stockholder sharing an address with another stockholder who has received multiple copies of the Company’s Annual Report or proxy materials may use the contact information above to request delivery of a single copy of these materials.

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WHAT IS THE DIFFERENCE BETWEEN HOLDING SHARES AS A HOLDER OF RECORD AND AS A BENEFICIAL OWNER?

If, at the close of business on the Record Date, your shares of Common Stock were registered directly in your name with the Company’s transfer agent, you are considered a holder of record with respect to those shares, and the accompanying notice was sent directly to you. As a holder of record, you may vote your shares at the Annual Meeting or by proxy.

If, at the close of business on the Record Date, your shares of Common Stock were held through a bank, brokerage firm, trust, or other nominee, you are considered the beneficial owner of those shares and your shares are considered held in “street name.” If you are the beneficial owner of shares of Common Stock, your broker or other nominee, as the record holder of the shares, will send you a request for directions for voting those shares and will vote such shares in accordance with your instructions.

WHO MAY VOTE AT THE ANNUAL MEETING?

At the Annual Meeting, only those holders of Common Stock at the close of business on the Record Date will be entitled to vote. As of the Record Date, 52,253,037 shares of Common Stock were outstanding and, therefore, eligible to vote at the meeting.

WHAT ARE MY VOTING RIGHTS?

Each holder is entitled to one vote per share of Common Stock on each matter of business properly brought before the Annual Meeting. Stockholders do not have cumulative voting rights.

HOW MANY SHARES MUST BE PRESENT TO HOLD THE ANNUAL MEETING?

The holders of a majority in voting power of the issued and outstanding shares of Common Stock entitled to vote as of the Record Date must be present or represented by proxy at the Annual Meeting in order to hold the Annual Meeting and conduct business. This presence is called a quorum. The presence of a quorum for any proposal establishes a quorum for all of the proposals, even if stockholders do not vote on all of the proposals. Broker non-votes and abstentions will be counted as present for purposes of determining whether there is a quorum.

HOW DO I VOTE MY SHARES?

Holders of record (that is, stockholders who hold their shares directly with our transfer agent) can vote in any of the following ways:

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Via the Internet: Go to “www.voteproxy.com” to vote via the Internet. You will need to follow the on-screen instructions on the website and have your proxy card or Notice of Internet Availability on hand to vote your shares via the internet.

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By Mail: If you received a paper copy in the mail of the proxy materials and a proxy card, you may complete, sign, date and return your proxy card in the postage-paid envelope enclosed with the proxy materials.

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In Person: Attend the Annual Meeting in Delaware and vote in person by written ballot. For information about how to attend the Annual Meeting, please see “How Do I Attend the Annual Meeting?” above.

If you are a beneficial owner whose shares are held in street name, you will receive instructions from the holder of record that you must follow in order for your shares to be voted. If you wish to vote in person at the meeting, you must obtain a legal proxy from the holder of record for your shares, and bring the legal proxy with you to the Annual Meeting. A legal proxy is a written document that authorizes the beneficial owner to vote the shares held in street name at the Annual Meeting. In order for the in-person vote to be counted, the beneficial owner must hand both the copy of the legal proxy and the completed written ballot to the inspector of election.

HOW WILL MY SHARES BE VOTED?

All proxies that are properly completed and timely received will be voted in accordance with the instructions you give. If no instructions are given (except in the case of broker non-votes), the persons designated as proxies will vote the shares of Common Stock in accordance with the recommendations of the Board of Directors, which are as follows:

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FOR the election of each director nominee;

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FOR the approval, in an advisory (non-binding) vote, of the compensation of the Company’s named executive officers for the fiscal year ~~ending~~ended December 31, ~~2021. Representatives~~2023;

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FOR the ratification, in an advisory (non-binding) vote, of Grant Thornton are expected to be present at the Annual Meeting. These representatives will have the opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions.

~~The following table presents the aggregate fees billed by Grant Thornton for each of the services listed below for each of the Company’s last two fiscal years.~~

2020 2019
Audit Fees ⁽¹⁾ $ 819,001 $ 820,627
Audit – Related Fees ⁽²⁾ 140,700 25,521

Tax Fees ⁽³⁾ 174,892 97,930
Other Fees - -
Total $ 1,134,593 $ 944,078

~~(1)~~

Audit fees consisted of the aggregate fees billed for professional services rendered by Grant Thornton in connection with its audit of the Company’s consolidated financial statements and its limited reviews of the unaudited consolidated interim financial statements that are normally provided in connection with statutory and regulatory filings or engagements for these fiscal years.

~~(2)~~

In 2020, audit-related fees were primarily comprised of services related to the Company’s 2020 debt offering and secondarily for an audit of its 401k plan. In 2019, these fees were incurred for the audit of the Company’s 401k plan.

~~(3)~~

~~Tax fees consisted of the aggregate fees billed for professional services rendered by Grant Thornton for tax compliance, tax advice and tax planning in 2020 and 2019.~~

~~Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm~~

Exchange Act rules generally require any engagement by a public company of an accountant to provide audit or non-audit services to be pre-approved by the audit committee of that public company. This pre-approval requirement is waived with respect to the provision of services other than audit, review or attest services if certain conditions set forth in rule 2-01(c)(7)(i)(C) under the Exchange Act are met. None of the audit-related and tax services described above were subject to this Rule and the approval procedures set forth therein. All services provided to the Company by Grant Thornton in 2020 and 2019 were pre-approved by the Audit Committee.

~~The Board of Directors unanimously recommends a vote “FOR”~~ the selection of ~~Grant Thornton~~Crowe as the Company’s independent registered public accounting firm for the fiscal year ending December 31, ~~2021.~~

2024; and

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FOR the approval of The Bancorp, Inc. 2024 Equity Incentive Plan.

CAN I REVOKE MY PROXY?

If a proxy in the accompanying form is executed and returned, it may nevertheless be revoked by:

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Notifying the Secretary of the Company in writing, at The Bancorp, Inc., 409 Silverside Road, Suite 105, Wilmington, Delaware 19809 (which must be received by May 28, 2024);

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Submitting a new proxy with a later date (which must be received by May 28, 2024); or

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Attending the Annual Meeting and voting in person.

WHAT ARE BROKER NON-VOTES?

Under Nasdaq rules, brokers or other nominees that hold shares in “street name” for their beneficial owners have discretionary authority to vote such shares without instructions from beneficial owners only on matters deemed “routine.” On non-routine matters, brokers are not permitted to vote shares without instructions from beneficial owners. A “broker non-vote” occurs when a broker does not vote shares on a particular matter because it has not received voting instructions with respect to those shares. If you are a beneficial owner of shares of Common Stock, your broker will not be able to vote your shares with respect to Proposal 1, Proposal 2, or Proposal 4 without your instructions. Brokers will have discretionary authority to vote on Proposal 3.

WHAT ARE THE VOTING REQUIREMENTS FOR THE PROPOSALS TO BE ACTED UPON AT THE ANNUAL MEETING?

The table below describes the proposals to be considered at the Annual Meeting and the vote required for each proposal:

PROPOSAL

VOTE REQUIRED

EFFECT OF
ABSTENTIONS
AND BROKER
NON-VOTES

BROKER
DISCRETIONARY
VOTING ALLOWED

Election of Directors

A nominee for director must be elected by a majority of the votes cast, meaning that the number of shares voted “FOR” a director’s election exceeds the number of shares voted “AGAINST” that director’s election.

No effect

No
Brokers without voting instructions will not be able to vote on this proposal.

Advisory (Non-Binding) Approval of Executive Compensation

Advisory (non-binding) approval is obtained by a majority of the votes cast, meaning that the number of shares voted “FOR” the proposal exceeds the number of shares voted “AGAINST” the proposal. The Board strongly values feedback of the Company’s stockholders and will take the results of this advisory vote into account when considering future executive compensation.

No effect

No
Brokers without voting instructions will not be able to vote on this proposal.

Advisory (Non-Binding) Ratification of the Appointment of Crowe LLP

Advisory (non-binding) ratification is obtained by a majority of the votes cast, meaning that the number of shares voted “FOR” the proposal exceeds the number of shares voted “AGAINST” the proposal.

No effect

Yes
Brokers without voting instructions will have discretionary authority to vote.

Approval of The Bancorp, Inc. 2024 Equity Incentive Plan

Approval is obtained by a majority of the votes cast, meaning that the number of shares voted “FOR” the proposal exceeds the number of shares voted “AGAINST” the proposal.

No effect

No
Brokers without voting instructions will not be able to vote on this proposal.

HOW WILL VOTES BE TABULATED?

Equiniti Trust Company, LLC will serve as the official proxy tabulator. Paul Frenkiel, the Company’s Executive Vice President, CFO and Secretary, will act as the inspector of election and will count the votes at the Annual Meeting.

WHAT SHOULD I DO IF I HAVE QUESTIONS REGARDING VOTING?

If you have any questions regarding voting your shares of Common Stock, please contact The Bancorp, Inc., Attention: Investor Relations, 409 Silverside Road, Suite 105, Wilmington, Delaware 19809, telephone number (215) 861-7990.

WHO IS PAYING FOR THE COST OF THIS PROXY SOLICITATION?

The cost of soliciting proxies will be borne by the Company. Directors, officers, and select employees of the Company may solicit proxies either personally, by e-mail, by letter, by telephone, or through other means, but will not be specifically compensated for soliciting such proxies.

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Proxy Summary

Proposal #1

Proposal #2

Proposal #3

Proposal #4

Other Matters

The Company will reimburse banks, brokerage firms, other custodians, nominees, and fiduciaries for reasonable expenses incurred in sending proxy materials to beneficial owners of the Common Stock.

HOW CAN I REQUEST A COPY OF THE COMPANY’S ANNUAL REPORT?

The Company’s Annual Report is being made available concurrently with this Proxy Statement to all stockholders entitled to notice of and to vote at the Annual Meeting. Stockholders of record as of the Record Date, and beneficial owners of Common Stock as of the Record Date, may obtain from the Company, without charge, a copy of the Annual Report as filed with the SEC by submitting a request therefor in writing. Any such request from a beneficial owner of the Common Stock must set forth a good faith representation that, as of the Record Date, the person making the request was the beneficial owner of the Common Stock. Such written requests should be directed to The Bancorp, Inc., Attention: Paul Frenkiel, Secretary, 409 Silverside Road, Suite 105, Wilmington, Delaware 19809. Our Annual Report is not incorporated into this Proxy Statement and shall not be deemed to be solicitation material.

2024 PROXY STATEMENT

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Proxy Summary

Proposal #1

Proposal #2

Proposal #3

Proposal #4

Other Matters

OTHER MATTERS

As of the date of this Proxy Statement, the Board of Directors does not intend to present and has not been informed that any other person intends to present any other matters for action at the Annual Meeting. However, if other matters do properly come before the Annual Meeting or any any adjournment, recess, postponement, continuation, or ~~continuation~~rescheduling thereof, it is the intention of the persons named as proxies to vote upon them in accordance with their best judgment. For any other matter which may properly come before the Annual Meeting, the affirmative vote of the holders of at least a majority of the votes cast at the Annual Meeting at which a quorum is present is required, either in person or by proxy, for approval, unless otherwise required by law.

Except as set forth in this section, all shares of Common ~~Shares~~Stock represented by valid proxies received will be voted in accordance with the ~~provisions~~instructions of the proxy.

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Proxy Summary

Proposal #1

Proposal #2

Proposal #3

Proposal #4

Other Matters

STOCKHOLDER PROPOSALS AND NOMINATIONS

FOR THE 2025 ANNUAL MEETING

Proposals for Inclusion in Proxy Statement for 2025 Annual Meeting

Rule 14a-8 under the Exchange Act (“Rule 14a-8”) establishes ~~the~~ eligibility requirements and ~~the~~ procedures that must be followed for a stockholder’s proposal to be included in ~~a public company’s~~the Company’s proxy ~~materials.~~statement. Proposals submitted for inclusion in the Company’s ~~Proxy Statement~~proxy statement for its ~~2022~~2025 annual meeting of stockholders must be received by the Company’s Secretary ~~on or before~~no later than the close of business on December 10, ~~2021.~~ ~~If next year’s annual meeting is held on a date~~2024. Only those proposals that is more than 30 calendar days from May 19, 2022, a stockholder proposal must be received by a reasonable time before the Company’s printer begins to print and mail its proxy solicitation materials for such annual meeting. Any stockholder proposals will be subject to the requirements of the proxy rules adopted by the Securities and Exchange Commission. Notice of a shareholder proposal submitted outside of Rule 14a-8 is considered untimely if submitted after 45 days prior to the mailing date of the proxy. Additionally, the persons named as proxies in the Proxy Statement and/or form of proxy will have discretionary authority to vote on a stockholder proposal received before February 23, 2022, if we briefly describe the matter in the Proxy Statement and how management’s proxy holders intend to vote on it, or if the stockholder does not comply with the requirements of Rule ~~14a-4(c) (2) under~~14a-8 will be included in the ~~Exchange Act.~~

Company’s proxy statement for the 2025 annual meeting of stockholders.

Proposals and Director Nominations for 2025 Annual Meeting

Stockholders ~~who wish~~seeking to ~~submit their recommendations~~bring business before the 2025 annual meeting of stockholders outside of Rule 14a-8, or to nominate candidates for ~~director candidates~~election as directors at the 2025 annual meeting of stockholders must provide timely written notice to the ~~Nominating~~Company and ~~Governance Committee should send their~~comply with other procedural and informational requirements set forth in our Bylaws. To be considered timely, the written ~~recommendation~~notice of a proposing or nominating stockholder must be delivered to the Company’s ~~executive offices, The Bancorp, Inc., and Attention: Nominating and Governance Committee Chairman,~~Secretary at 409 Silverside Road, Suite 105, Wilmington, Delaware ~~19809. These~~19809, not later than the close of business on the 90th day nor earlier than the 120th day prior to the May 29, 2025 anniversary date of the Annual Meeting. As a result, notice with respect to proposed business outside of Rule 14a-8 or nominations of director candidates for the 2025 annual meeting of stockholders must ~~represent~~be received not later than the close of business on February 28, 2025 and not earlier than January 29, 2025. Notice of any proposed business or nomination must comply with the applicable informational requirements set forth in Section 2.10 of our Bylaws.

2024 PROXY STATEMENT

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THE BANCORP, INC.
2024 EQUITY INCENTIVE PLAN

ARTICLE 1 — GENERAL

Section 1.1 Purpose, Effective Date and Term. The purpose of The Bancorp, Inc. 2024 Equity Incentive Plan (the “Plan”) is to promote the long-term financial success of The Bancorp, Inc. (the “Company”), and its Subsidiaries, including The Bancorp Bank, National Association (the “Bank”), by providing a means to attract, retain and reward individuals who contribute to such success and to further align their interests with those of the Company’s stockholders through the ownership of additional common stock of the Company. The “Effective Date” of the Plan shall be the date the Plan first satisfies the applicable stockholder approval requirements, which is expected to be at the Annual Meeting occurring on May 29, 2024. The Plan shall remain in effect as long as any Awards are outstanding; provided, however, that ~~they~~no Awards may be granted under the Plan after the day immediately prior to the ten-year anniversary of the Effective Date. On and after the Effective Date, no further awards shall be granted under The Bancorp, Inc. 2020 Equity Incentive Plan (“2020 Plan”), which shall remain in existence solely for the purpose of administering outstanding grants made thereunder.

Section 1.2 Administration. The Plan shall be administered by the Committee, in accordance with Section 5.1.

Section 1.3 Participation. The grant of Awards shall be limited to Employees and Directors of the Company or any Subsidiary. Each Employee or Director of the Company or any Subsidiary of the Company who is granted an Award in accordance with the terms of the Plan shall be a “Participant” in the Plan.

Section 1.4 Definitions. Capitalized terms used in this Plan are defined in Article 8 and elsewhere in this Plan.

ARTICLE 2 — AWARDS

Section 2.1 General. Any Award under the Plan may be granted singularly or in combination with another Award (or Awards). Each Award under the Plan shall be subject to the terms and conditions of the Plan and any additional terms, conditions, limitations and restrictions as the Committee shall provide with respect to the Award and as evidenced in the Award Agreement. Subject to the provisions of Section 2.6, an Award may be granted as an alternative to or replacement of an existing Award under the Plan or any other plan of the Company or any Subsidiary or as the form of payment for grants or rights earned or due under any other compensation plan or arrangement of the Company or its Subsidiaries, including as a Substitute Award. The types of Awards that may be granted under the Plan include:

(a) Stock Options. A Stock Option means a grant under Section 2.2 that represents the right to purchase shares of Stock at an Exercise Price established by the Committee. Any Stock Option may be either an Incentive Stock Option (an “ISO”) that is intended to satisfy the requirements applicable to an “Incentive Stock Option” described in Code Section 422(b), or a Non-Qualified Stock Option (a “Non-Qualified Option”) that is not intended to be an ISO; provided, however, that no ISOs may be granted (i) after the day immediately prior to the ten-year anniversary of the Effective Date or the date the Plan is approved by the Board, whichever is earlier; or (ii) to a non-Employee. Unless otherwise specifically provided by its terms, any Stock Option granted to an Employee under this Plan shall be an ISO to the maximum extent permitted. Any ISO granted under this Plan that does not qualify as an ISO for any reason (whether at the time of grant or as the result of a subsequent event) shall be deemed to be a Non-Qualified Option. In addition, any ISO granted under this Plan may be unilaterally modified by the Committee to disqualify such Stock Option from ISO treatment such that it shall become a Non-Qualified Option; provided, however, that any such modification shall be ineffective if it causes the Award to be subject to Code Section 409A (unless, as modified, the Award complies with Code Section 409A).

(b) Restricted Stock Awards. A Restricted Stock Award means a grant of shares of Stock under Section 2.3 for no consideration, or such consideration as may be determined by the Committee, either alone or in addition to other Awards granted under the Plan, subject to a vesting schedule or the satisfaction of market conditions or performance conditions.

(c) Restricted Stock Units. A Restricted Stock Unit Award means a grant under Section 2.4 denominated in shares of Stock that is similar to a Restricted Stock Award except no shares of Stock are actually awarded on the date of grant of a Restricted Stock Unit Award. A Restricted Stock Unit Award is subject to a vesting schedule or the satisfaction of market conditions or performance conditions and shall be settled in shares of Stock, provided, however, that in the sole discretion of the Committee, determined at the time of settlement, a Restricted Stock Unit

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Award may be settled in cash based on the Fair Market Value of a share of Stock multiplied by the number of Restricted Stock Units being settled.

Section 2.2 Stock Options.

(a) Grant of Stock Options. Each Stock Option shall be evidenced by an Award Agreement that shall specify (i) the number of shares of Stock covered by the Stock Option; (ii) the date of grant of the Stock Option; (iii) the vesting period or conditions to vesting; and (iv) any other terms and conditions not inconsistent with the Plan, including the effect of termination of a Participant’s Service, as the Committee may, in its discretion, prescribe.

(b) Terms and Conditions. A Stock Option shall be exercisable in accordance with such terms and conditions and during such periods as may be established by the Committee. In no event, however, shall a Stock Option expire later than ten years after the date of its grant (or five years after the date of its grant with respect to ISOs granted to an Employee who is a 10% Stockholder). The “Exercise Price” of each Stock Option shall not be less than 100% of the Fair Market Value of a share of Stock on the date of grant; provided, however, that the Exercise Price of an ISO shall not be less than 110% of the Fair Market Value of a share of Stock on the date of grant if granted to a 10% Stockholder; provided further, that the Exercise Price per share of Stock underlying a Stock Option that is a Substitute Award may be less than 100% of the Fair Market Value of a share of Stock on the date of grant, provided the requirements of Treasury Regulation Section 1.409A-1(b)(5)(v)(D) are met. The payment of the Exercise Price of a Stock Option shall be by cash or, subject to limitations imposed by applicable law, by such other means as the Committee may from time to time permit, including: (i) by tendering, either actually or constructively by attestation, shares of Stock valued at Fair Market Value as of the day of exercise; (ii) by irrevocably authorizing a third party, acceptable to the Committee, to sell shares of Stock (or a sufficient portion of the shares) acquired upon exercise of the Stock Option and to remit to the Company a sufficient portion of the sale proceeds to pay the entire Exercise Price and any tax withholding resulting from such exercise; (iii) by a net settlement of the Stock Option, using a portion of the shares obtained on exercise in payment of the Exercise Price of the Stock Option (and if applicable, any required tax withholding); (iv) by personal, certified or cashier’s check; (v) by other property deemed acceptable by the Committee; or (vi) by any combination thereof. The total number of shares that may be acquired upon the exercise of a Stock Option shall be rounded down to the nearest whole share, with cash-in-lieu paid by the Company, at its discretion, for the value of any fractional share.

Section 2.3 Restricted Stock Awards.

(a) Grant of Restricted Stock. Each Restricted Stock Award shall be evidenced by an Award Agreement that shall specify (i) the number of shares of Stock covered by the Restricted Stock Award; (ii) the date of grant of the Restricted Stock Award; (iii) the vesting period; and (iv) any other terms and conditions not inconsistent with the Plan, including the effect of termination of a Participant’s Service, as the Committee may, in its discretion, prescribe. All Restricted Stock Awards shall be in the form of issued and outstanding shares of Stock that, at the discretion of the Committee, shall be either (x) registered in the name of the Participant and held by or on behalf of the Company, together with a stock power executed by the Participant in favor of the Company, pending the vesting or forfeiture of the Restricted Stock; or (y) registered in the name of, and delivered to, the Participant. In any event, the certificates evidencing the Restricted Stock Award shall at all times prior to the applicable vesting date bear such restrictive legend as the Committee, in its discretion, may specify.

Notwithstanding the foregoing, the Company may in its sole discretion issue Restricted Stock in any other approved format (e.g., electronically) in order to facilitate the paperless transfer of such Awards. In the event Restricted Stock is not issued in certificate form, the Company and the transfer agent shall maintain appropriate bookkeeping entries that evidence Participants’ ownership of such Awards. Restricted Stock that is not issued in certificate form shall be subject to the same terms and conditions of the Plan as certificated shares, including the restrictions on transferability and the provision of a stock power executed by the Participant in favor of the Company, until the satisfaction of the conditions to which the Restricted Stock Award is subject.

(b) Terms and Conditions. Each Restricted Stock Award shall be subject to the following terms and conditions:

(i) Dividends. Unless the Committee determines otherwise, no dividends shall be paid with respect to any Restricted Stock Awards (whether subject to time-based or performance-based vesting conditions) unless and

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until the Participant vests in the Restricted Stock Award and only for dividends declared after the vesting date. Unless the Committee determines otherwise, any stock dividends declared on shares of Stock subject to a Restricted Stock Award shall not vest, accrue or be paid and only dividends declared after the vesting date will be paid. If the Committee determines that dividends shall be paid with respect to Restricted Stock Awards and specifies such determination in the relevant Award Agreement, no dividends on a Restricted Stock Award shall vest and be payable until the underlying Restricted Stock Award vests.

(ii) Voting Rights. Unless the Committee determines otherwise with respect to any Restricted Stock Award and specifies such determination in the relevant Award Agreement, a Participant shall have voting rights related to the unvested, non-forfeited Restricted Stock and the voting rights shall be exercised by the Participant in the Participant’s discretion.

(iii) Tender Offers and Merger Elections. Each Participant to whom a Restricted Stock Award is granted shall have the right to respond, or to direct the response, with respect to the related shares of Restricted Stock, to any tender offer, exchange offer, cash/stock merger consideration election or other offer made to, or elections made by, the holders of shares of Stock. Such a direction for any such shares of Restricted Stock shall be given by proxy or ballot (if the Participant is the beneficial owner of the shares of Restricted Stock for voting purposes) or by completing and filing, with the inspector of elections, the trustee or such other person who shall be independent of the Company as the Committee shall designate in the direction (if the Participant is not such a beneficial owner), a written direction in the form and manner prescribed by the Committee. If no such direction is given, then the shares of Restricted Stock shall not be tendered.

(iv) The Committee may, in connection with the grant of Restricted Stock Awards, condition the vesting thereof upon the continued Service of the Participant or the attainment of specified performance measures determined by the Committee. The conditions for grant or vesting and the other provisions of Restricted Stock Awards (including without limitation any applicable performance measures) need not be the same with respect to each recipient.

Section 2.4 Restricted Stock Units.

(a) Grant of Restricted Stock Unit Awards. Each Restricted Stock Unit Award shall be evidenced by an Award Agreement which shall specify (i) the number of Restricted Stock Units covered by the Award; (ii) the date of grant of the Restricted Stock Unit Award; (iii) the restriction period (or vesting period) or market conditions or performance conditions that must be satisfied in order to vest in the Award; and (iv) any other terms and conditions not inconsistent with the Plan, including the effect of termination of a Participant’s Service, as the Committee may, in its discretion, prescribe. Restricted Stock Unit Awards shall be paid in shares of Stock, or in the sole discretion of the Committee determined at the time of settlement, in cash or a combination of cash and shares of Stock.

(b) Terms and Conditions. Each Restricted Stock Unit Award shall be subject to the following terms and conditions:

(i) A Restricted Stock Unit Award shall be similar to a Restricted Stock Award except that no shares of Stock are actually awarded to the recipient on the date of grant. The Committee shall impose any conditions and/or restrictions on any Restricted Stock Unit Award granted pursuant to the Plan as it may deem advisable, including, without limitation, time-based restrictions under applicable laws or under the requirements of any Exchange or market upon which such shares may be listed, or holding requirements or sale restrictions placed by the Company upon vesting of such Restricted Stock Units.

(ii) The Committee may, in connection with the grant of Restricted Stock Units, condition the vesting thereof upon the continued Service of the Participant or attainment of performance measures. The conditions for grant or vesting and the other provisions of Restricted Stock Unit Awards need not be the same with respect to each recipient. A Restricted Stock Unit Award shall be settled in shares of Stock or, if the Committee so determines, in cash, as and when the Restricted Stock Units vest, or at such other date as may be determined by the Committee and specified in the applicable Award Agreement.

(iii) Subject to the provisions of the Plan and the applicable Award Agreement, the Participant shall not be permitted to sell, assign, transfer, pledge or otherwise encumber Restricted Stock Units.

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(iv) A Participant shall have no voting rights with respect to any Restricted Stock Units. Unless the Committee determines otherwise, no Dividend Equivalent Rights shall accrue or be paid on Restricted Stock Units. If the Committee determines that Dividend Equivalent Rights will be granted in connection with a Restricted Stock Unit Award, Dividend Equivalents may be paid or credited, either in cash or in actual or phantom shares of Stock, on outstanding Restricted Stock Units, subject to such terms and conditions as the Committee may deem appropriate and specify in the Award Agreement; provided however, that no Dividend Equivalents shall vest or become payable until the underlying Restricted Stock Units vest and become payable.

Section 2.5 Vesting of Awards. The Committee shall specify the vesting schedule or conditions of each Award. The required period of Service for full vesting shall be determined by the Committee and evidenced in the Award Agreement (subject to acceleration of vesting, to the extent permitted by the Committee or set forth in the Award Agreement, in the event of the Participant’s death, Disability, Retirement, Involuntary Termination following a Change in Control, or other circumstances determined by the Committee ). Notwithstanding the generality of the foregoing, Awards granted under the Plan shall include regular vesting schedules under which no portion of an Award may vest or become exercisable prior to the first anniversary of the date of grant; provided however that, subject to any adjustments as described in Section 3.4 below, up to 5% of the shares of Stock authorized under the Plan as set forth in Section 3.2(a) as of the Effective Date may be granted pursuant to Awards hereunder without regard to the one-year minimum vesting requirement.

Section 2.6 Prohibition Against Option Repricing. Except for adjustments pursuant to Section 3.4, and reductions of the Exercise Price approved by the Company’s stockholders, neither the Committee nor the Board shall have the right or authority to make any adjustment or amendment that reduces or would have the effect of reducing the Exercise Price of a Stock Option previously granted under the Plan, whether through amendment, cancellation (including cancellation in exchange for a cash payment in excess of the Stock Option’s in-the-money value or in exchange for Options or other Awards) or replacement grants, or other means.

Section 2.7 Effect of Termination of Service on Awards. The Committee shall establish the effect of a Termination of Service on the continuation of rights and benefits available under an Award and, in so doing, may make distinctions based upon, among other things, the cause of Termination of Service and type of Award. The effect of a Change in Control on the vesting/exercisability of Stock Options, Restricted Stock Awards and Restricted Stock Unit Awards is as set forth in Article 4.

ARTICLE 3 — SHARES SUBJECT TO PLAN

Section 3.1 Available Shares. The shares of Stock with respect to which Awards may be made under the Plan shall be shares currently authorized but unissued, currently held in treasury or, to the extent permitted by applicable law, subsequently acquired by the Company, including shares purchased in the open market or in private transactions.

Section 3.2 Share Limitations.

(a) Share Reserve. Subject to the following provisions of this Section 3.2, the maximum number of shares of Stock that may be delivered to Participants and their beneficiaries pursuant to Awards granted under the Plan on or after the Effective Date shall be equal to 2,370,000 shares of Stock. In addition, any shares of Stock that remained available for grants under the 2020 Plan as of the Effective Date, and any shares of Stock subject to outstanding grants under the 2020 Plan as of the Effective Date that are payable in shares of Stock and that expire, are forfeited or are otherwise terminate without having been exercised, vested or settled in full, as applicable, on or after the Effective Date, may be issued with respect to Awards granted under this Plan. The maximum number of shares of Stock that may be delivered to Participants and their beneficiaries pursuant to ISOs granted under the Plan on or after the Effective Date shall be equal to 2,370,000 shares of Stock. The aggregate number of shares of Stock available for grant under this Plan, the number of shares of Stock available for grant subject to ISOs and the number of shares of Stock subject to outstanding Awards shall be subject to adjustment as provided in Section 3.4.

(b) Prohibition on Liberal Share Recycling. For purposes of this Section 3.2, the number of shares of Stock available for the grant of additional Awards shall be reduced by the number of shares of Stock subject to Awards previously granted, subject to the following in this Section 3.2(b). To the extent any shares of Stock covered by an Award (including Restricted Stock Awards and Restricted Stock Unit Awards) under the Plan (including grants made under the 2020 Plan) are not delivered to a Participant or beneficiary for any reason, including because the Award is forfeited or canceled or because a Stock Option is not exercised, then such shares shall not be deemed to have been delivered for purposes of determining the maximum number of shares of Stock available for delivery under the

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Plan. To the extent (i) a Stock Option (including a stock option granted under the 2020 Plan) is exercised by using an actual or constructive exchange of shares of Stock to pay the Exercise Price; (ii) shares of Stock are withheld to satisfy withholding taxes upon exercise, vesting or settlement of an Award granted hereunder (or under the 2020 Plan); or (iii) shares are withheld to satisfy the Exercise Price of Stock Options in a net settlement of Stock Options (including stock options granted under the 2020 Plan), then the number of shares of Stock available shall be reduced by the gross number of shares of Stock subject to the Award rather than by the net number of shares of Stock issued. In addition, Stock purchased on the open market with the cash proceeds from the Exercise Price of Stock Options under the Plan (or exercise price of stock options granted under the 2020 Plan) will not be added to the number of shares of Stock authorized for grant under Section 3.2(a) and will not be available for future grants of Awards under the Plan.

(c) Substitute Awards. Shares issued or transferred under Awards made pursuant to an assumption, substitution or exchange for previously granted awards of a company acquired by the Company in a transaction (“Substitute Awards”) shall not reduce the number of shares of Stock available under the Plan and available shares under a stockholder approved plan of an acquired company (as appropriately adjusted to reflect the transaction) may be used for Awards under the Plan and shall not reduce the Plan’s share reserve (subject to applicable Exchange and Code requirements).

Section 3.3 Limitations on Grants to Individuals.

(a) Subject to Section 3.4 the maximum number of shares of Stock, in the aggregate, that may be covered by an Award granted to any one Employee or Director (other than a Company Non-Employee Director) during any calendar year shall be 500,000.

(b) The maximum grant date value of shares of Stock subject to Awards granted to any Company Non-Employee Director under the Plan during any calendar year, taken together with any cash fees payable to such Company Non-Employee Director for services rendered as a Company Non-Employee Director during the calendar year, shall not exceed $600,000 in total value. For purposes of this limit, the value of such Awards shall be calculated based on the grant date fair value of such Awards for financial reporting purposes.

(c) The aggregate number of shares of Stock available for grant under this Plan and the aggregate number of shares of Stock available for grant pursuant to ISOs, in each case pursuant to Section 3.2(a), and the number of shares subject to outstanding Awards, including the limit set forth above in Section 3.3(a) shall be subject to adjustment as provided in Section 3.4.

Section 3.4 Corporate Transactions.

(a) General. In the event any recapitalization, forward or reverse stock split, reorganization, merger, consolidation, spin-off, combination, repurchase, or exchange of shares of Stock or other securities, stock dividend or other special and nonrecurring dividend or distribution (whether in the form of cash, securities or other property), liquidation, dissolution, or other similar corporate transaction or event, affects the shares of Stock such that an adjustment is appropriate in order to prevent dilution or enlargement of the rights of Participants under the Plan and/or under any Award granted under the Plan, then the Committee shall, in an equitable manner, adjust any or all of (i) the number and kind of securities deemed to be available thereafter for grants of Stock Options, Restricted Stock Awards and Restricted Stock Unit Awards to all Participants and individually to any one individual as set forth in Section 3.3(a); (ii) the number and kind of securities that may be delivered or deliverable in respect of outstanding Stock Options, Restricted Stock Awards and Restricted Stock Unit Awards; and (iii) the Exercise Price of Stock Options. In addition, the Committee is authorized to make adjustments in the terms and conditions (including performance goals) of, and the criteria included in, Stock Options, Restricted Stock Awards and Restricted Stock Unit Awards (including, without limitation, cancellation of Stock Options, Restricted Stock Awards and Restricted Stock Unit Awards in exchange for the in-the-money value, if any, of the vested portion thereof, or substitution or exchange of Stock Options, Restricted Stock Awards and Restricted Stock Unit Awards using stock of a successor or other entity) in recognition of unusual or nonrecurring events (including, without limitation, events described in the preceding sentence) affecting the Company or any parent or Subsidiary or the financial statements of the Company or any parent or Subsidiary, or in response to changes in applicable laws, regulations, or accounting principles.

(b) Merger in which Company is Not Surviving Entity. In the event of any merger, consolidation, or other business reorganization (including, but not limited to, a Change in Control) in which the Company is not the

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surviving entity, unless otherwise determined by the Committee at any time at or after grant and prior to the consummation of such merger, consolidation or other business reorganization, any Stock Options, Restricted Stock Awards and Restricted Stock Unit Awards, respectively, granted under the Plan which remain outstanding shall be converted into Stock Options, Restricted Stock Awards and Restricted Stock Unit Awards, as applicable, with respect to voting common equity securities of the business entity which survives such merger, consolidation or other business reorganization having substantially the same terms and conditions as the outstanding Stock Options, Restricted Stock Awards and Restricted Stock Unit Awards, as applicable, under this Plan and reflecting the same economic benefit (for Stock Options, as measured by the difference between the aggregate Exercise Price and the value exchanged for outstanding shares of Stock in such merger, consolidation or other business reorganization), all as determined by the Committee prior to the consummation of such merger, consolidation or other business reorganization; provided, however, that the Committee may, at any time prior to the consummation of such merger, consolidation or other business reorganization, direct that all, but not less than all, outstanding Stock Options, Restricted Stock Awards and Restricted Stock Unit Awards, as applicable, be canceled as of the effective date of such merger, consolidation or other business reorganization in exchange: (i) for Stock Options, a payment (in cash or stock, as determined by the Committee) per share of Stock equal to the excess (if any) of the value exchanged for an outstanding share of Stock in such merger, consolidation or other business reorganization over the Exercise Price of the Stock Option being canceled; provided, further, that in the event the Exercise Price of outstanding Stock Options exceed the value to be exchanged for an outstanding share of Stock (an “Underwater Stock Option”) in such merger, consolidation or other business reorganization, the Committee may, in its discretion, cancel and terminate such Underwater Stock Options without the consent of the holder of the Stock Option and without any payment to such holder, and (ii) for Restricted Stock Awards and Restricted Stock Unit Awards, as applicable, a payment (in cash or stock, as determined by the Committee) per share of Stock equal to the value exchanged for an outstanding share of Stock in such merger, consolidation or other business reorganization.

Section 3.5 Delivery of Shares. Delivery of shares of Stock or other amounts under the Plan shall be subject to the following:

(a) Compliance with Applicable Laws. Notwithstanding any other provision of the Plan, the Company shall have no obligation to deliver any shares of Stock or make any other distribution of benefits under the Plan unless such delivery or distribution complies with all applicable laws (including, the requirements of the Securities Act), and the applicable requirements of any Exchange or similar entity.

(b) Certificates. To the extent that the Plan provides for the issuance of shares of Stock, the issuance may be effected on a non-certificated basis, to the extent not prohibited by applicable law or the applicable rules of any Exchange.

ARTICLE 4 — CHANGE IN CONTROL

Section 4.1 Consequence of a Change in Control. Subject to the provisions of Section 3.4 (relating to the adjustment of shares), and except as otherwise provided in the Plan or as determined by the Committee and set forth in the terms of any Award Agreement or as set forth in an employment, change in control or severance agreement entered into by and between the Company and/or a Subsidiary and an Employee:

(a) At the time of an Involuntary Termination at or following a Change in Control, all Stock Options then held by the Participant shall become fully earned, vested and exercisable (subject to the expiration provisions otherwise applicable to the Stock Option). All Stock Options may be exercised for a period of one year following the Participant’s Involuntary Termination, but not later than the expiration of the term of the Stock Option; provided, however, that no Stock Option shall be eligible for treatment as an ISO in the event such Stock Option is exercised more than three months following such Involuntary Termination.

(b) At the time of an Involuntary Termination at or following Change in Control, all Awards of Restricted Stock described in Section 2.1(b) and Restricted Stock Units described in Section 2.1(c) shall become fully earned and vested immediately. Notwithstanding the above, any Awards, the vesting of which are based on satisfaction of performance-based conditions will be vested as specified in subsection (c) hereof.

(c) All Awards that vest based on the attainment of specified performance measures shall vest and be payable in accordance with the terms set forth in the applicable Award Agreement.

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(d) To the extent not specified herein or in the Award Agreement, the Committee shall have the discretion to determine the treatment of outstanding unvested Awards, provided, however, that any such Awards will be deemed earned and shall vest upon consummation of a Change in Control if not assumed or replaced by a successor entity.

(e) Notwithstanding the foregoing, in the event of a Change in Control, the Committee may take any of the following actions with respect to any or all outstanding Awards: the Committee may (i) determine that outstanding Stock Options shall accelerate and become exercisable, in whole or in part, upon the Change in Control or upon such other event as the Committee determines, (ii) determine that the restrictions and conditions on outstanding Restricted Stock Awards or Restricted Stock Unit Awards shall lapse, in whole or in part, upon the Change in Control or upon such other event as the Committee determines, (iii) determine that Participants holding Restricted Stock Units or Dividend Equivalent Rights shall receive a payment in settlement of such Restricted Stock Units or Dividend Equivalent Rights in an amount determined by the Committee, (iv) require that Participants surrender their outstanding Stock Options in exchange for a payment by the Company, in cash or Stock, as determined by the Committee, in an amount equal to the amount by which the then Fair Market Value of the shares of Stock subject to the Participant’s unexercised Stock Options exceeds the Exercise Price of the Stock Options, or (v) after giving Participants an opportunity to exercise their outstanding Stock Options, terminate any or all unexercised Stock Options at such time as the Committee deems appropriate. The Committee may, in its discretion, cancel and terminate any Underwater Stock Options without the consent of the holder of the Stock Option and without any payment to such holder. Such surrender, termination or settlement shall take place as of the date of the Change in Control or such other date as the Committee may specify. The Committee shall have no obligation to take any of the foregoing actions.

Section 4.2 Definition of Change in Control. For purposes of this Agreement, the term “Change in Control” shall mean the consummation by the Company or the Bank, in a single transaction or series of related transactions, of any of the following:

(a) Merger: The Company or the Bank merges into or consolidates with another entity, or merges another bank or corporation into the Company or the Bank, and as a result, less than a majority of the combined voting power of the resulting corporation immediately after the merger or consolidation is held by persons who were stockholders of the Company or the Bank immediately before the merger or consolidation;

(b) Acquisition of Significant Share Ownership: A person or persons acting in concert has or have become the beneficial owner of 25% or more of a class of the Company’s or the Bank’s Voting Securities; provided, however, that this clause (b) shall not apply to beneficial ownership of the Company’s or the Bank’s voting shares held in a fiduciary capacity by an entity of which the Company directly or indirectly beneficially owns 50% or more of its outstanding Voting Securities;

(c) Change in Board Composition: During any period of two consecutive years, individuals who constitute members of the Board or members of the Bank’s board of directors at the beginning of the two-year period cease for any reason to constitute at least a majority of the Board or the Bank’s board of directors; provided, however, that for purposes of this clause (c), each director who is first elected by the applicable board (or first nominated by the board for election by the stockholders) by a vote of at least two-thirds of the directors who were directors at the beginning of the two-year period shall be deemed to have also been a director at the beginning of such period, and each director who is appointed as a director as a result of a directive, supervisory agreement or order issued by the primary federal regulator of the Company or the Bank or by the Federal Deposit Insurance Corporation shall be deemed to have also been a director at the beginning of such period; or

(d) Sale of Assets: The Company or the Bank sells to a third party all or substantially all of its assets.

Notwithstanding the foregoing, in the event that an Award constitutes Deferred Compensation, and the settlement of, or distribution of benefits under, such Award is to be triggered solely by a Change in Control, then with respect to such Award, a Change in Control shall be defined as required under Code Section 409A, as in effect at the time of such transaction.

ARTICLE 5 — COMMITTEE

Section 5.1 Administration. The Plan shall be administered by the Committee. The Board (or if necessary to maintain compliance with the applicable list of standards, those members of the Board who are “independent directors” under the corporate governance statutes or rules of any national Exchange on which the Company lists, has listed or seeks

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to list its securities) may, in their discretion, take any action and exercise any power, privilege or discretion conferred on the Committee under the Plan with the same force and effect under the Plan as if done or exercised by the Committee.

Section 5.2 Powers of Committee. The administration of the Plan by the Committee shall be subject to the following:

(a) The Committee will ~~remain~~have the authority and discretion to select from among the Company’s and its Subsidiaries’ Employees and Directors those persons who shall receive Awards, to determine the time or times of receipt, to determine the types of Awards and the number of shares covered by the Awards, to establish the terms, conditions, features (including automatic exercise in accordance with Section 7.19 hereof), performance criteria, restrictions (including without limitation, provisions relating to non-competition, non-solicitation and confidentiality), and other provisions of such Awards (subject to the restrictions imposed by Article 6), to cancel or suspend Awards and to reduce, eliminate or accelerate any restrictions or vesting requirements applicable to an Award at any time after the grant of the Award or to extend the time period to exercise a Stock Option, provided that such extension is consistent with Code Section 409A. Notwithstanding the foregoing, if and for so long as the Bank may be designated as being in troubled condition by its primary Federal banking regulator, no Awards under this Plan that would be subject to 12 C.F.R. Part 359 shall be granted without the prior approval of the Company’s primary Federal banking regulator with the concurrence of the Federal Deposit Insurance Corporation.

(b) The Committee will have the authority and discretion to interpret the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, and to make all other determinations that may be necessary or advisable for the administration of the Plan.

(d) Any interpretation of the Plan by the Committee and any decision made by it under the Plan is final and binding on all persons.

(e) In controlling and managing the operation and administration of the Plan, the Committee shall take action in a manner that conforms to the charter and bylaws of the Company and applicable corporate law.

(f) The Committee will have the authority to (i) suspend a Participant’s right to exercise a Stock Option during a blackout period (or similar restricted period) or to exercise in a particular manner (i.e., such as a “cashless exercise” or “broker-assisted exercise”) to the extent that the Committee deems it necessary or in the best interests of the Company in order to comply with the securities laws and regulations issued by the SEC (the “Blackout Period”); and (ii) to extend the period to exercise a Stock Option by a period of time equal to the Blackout Period, provided that such extension does not violate Code Section 409A, the ISO requirements or applicable laws and regulations.

Section 5.3 Delegation by Committee. Except to the extent prohibited by applicable law, the applicable rules of an Exchange upon which the Company lists its shares or the Plan, or as necessary to comply with the exemptive provisions of Rule 16b-3 promulgated under the Exchange Act, the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by it, including: (a) delegating to a committee of one or more members of the Board the authority to grant Awards under the Plan; or (b) delegating to a committee of one or more members of the Board who are not Company Non-Employee Directors, the authority to grant Awards under the Plan to eligible persons who are not then subject to Section 16 of the Exchange Act; or (c) delegating to a committee of one or more members of the Board who would be eligible to serve on the Compensation Committee of the Company pursuant to the listing requirements imposed by any Exchange on which the Company lists, has listed or seeks to list its securities, the authority to grant awards under the Plan. The acts of such delegates shall be treated hereunder as acts of the Committee and such delegates shall report regularly to the Committee regarding the delegated duties and responsibilities and any Awards so granted. Any such allocation or delegation may be revoked by the Committee at any time.

Section 5.4 Information to be Furnished to Committee. As may be permitted by applicable law, the Company and its Subsidiaries shall furnish the Committee with such data and information as it determines may be required for it to discharge its duties. The records of the Company and its Subsidiaries as to a Participant’s employment, termination of employment, leave of absence, reemployment and compensation shall be conclusive on all persons unless determined by the Committee to be manifestly incorrect. Subject to applicable law, Participants and other persons entitled to benefits under the Plan must furnish the Committee such evidence, data or information as the Committee considers desirable to carry out the terms of the Plan.

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Section 5.5 Committee Action. All actions of the Committee (or its delegate pursuant to Section 5.3) shall be final and conclusive and shall be binding upon the Company, Participants and all other interested parties. Any person dealing with the Committee shall be fully protected in relying upon any written notice, instruction, direction or other communication signed by a member of the Committee or by a representative of the Committee authorized to sign the same in its behalf.

ARTICLE 6 — AMENDMENT AND TERMINATION

Section 6.1 General. The Board may, as permitted by law, at any time, amend or terminate the Plan, and may amend any Award Agreement, provided that no amendment or termination (except as provided in Section 3.4, Section 6.2 and Section 6.3) may cause the repricing of a Stock Option, or, in the absence of written consent to the change by the affected Participant (or, if the Participant is not then living, the affected beneficiary), adversely impair the rights of any Participant or beneficiary under any Award granted under the Plan prior to the date such amendment is adopted by the Board; provided, however, that, no amendment may made without stockholder approval to the extent such stockholder approval is required under applicable law, including the Code, or an Exchange.

Section 6.2 Amendment to Conform to Law and Accounting Changes. Notwithstanding any provision in this Plan or any Award Agreement to the contrary, the Committee may amend the Plan or any Award Agreement, to take effect retroactively or otherwise, as deemed necessary or advisable for the purpose of (i) conforming the Plan or the Award Agreement to any present or future law relating to plans of this or similar nature (including, but not limited to, Code Section 409A in accordance with Section 6.3); or (ii) avoiding an accounting treatment resulting from an accounting pronouncement or interpretation thereof issued by the SEC or Financial Accounting Standards Board (“FASB”) subsequent to the adoption of the Plan or the making of the Award affected thereby, which, in the sole discretion of the Committee, may materially and adversely affect the financial condition or results of operations of the Company. By accepting an Award under this Plan, each Participant agrees and consents to any amendment made pursuant to this Section 6.2 or Section 6.3 to any Award granted under the Plan without further consideration or action.

Section 6.3 If any Award would be considered “deferred compensation” as defined under Code Section 409A (“Deferred Compensation”), the Committee reserves the absolute right (including the right to delegate such right) to unilaterally amend the Plan or the Award Agreement, without the consent of the Participant, to maintain exemption from, or to comply with, Code Section 409A. Any amendment by the Committee to the Plan or an Award Agreement pursuant to this Section shall maintain, to the extent practicable, the original intent of the applicable provision without violating Code Section 409A. A Participant’s acceptance of any Award under the Plan constitutes acknowledgement and consent to such rights of the Committee, without further consideration or action. Any discretionary authority retained by the Committee pursuant to the terms of this Plan or pursuant to an Award Agreement shall not be applicable to an Award which is determined to constitute Deferred Compensation, if such discretionary authority would contravene Code Section 409A.

ARTICLE 7 — GENERAL TERMS

Section 7.1 No Implied Rights.

(a) No Rights to Specific Assets. Neither a Participant nor any other person shall by reason of participation in the Plan acquire any right in or title to any assets, funds or property of the Company or any Subsidiary whatsoever, including any specific funds, assets, or other property which the Company or any Subsidiary, in its sole discretion, may set aside in anticipation of a liability under the Plan. A Participant shall have only a contractual right to the shares of Stock or amounts, if any, payable or distributable under the Plan, unsecured by any assets of the Company or any Subsidiary, and nothing contained in the Plan shall constitute a guarantee that the assets of the Company or any Subsidiary shall be sufficient to pay any benefits to any person.

(b) No Contractual Right to Employment or Future Awards. The Plan does not constitute a contract of employment or service, and selection as a Participant will not give any Participant the right to be retained in the employ of, or provide services to, the Company or any Subsidiary or any right or claim to any benefit under the Plan, unless such right or claim has specifically accrued under the terms of the Plan. No individual shall have the right to be selected to receive an Award under the Plan, or, having been so selected, to receive a future Award under the Plan.

(c) No Rights as a Stockholder. Except as otherwise provided in the Plan or in the Award Agreement, no Award under the Plan shall confer upon the holder thereof any rights as a stockholder of the Company prior to the date on which the individual fulfills all conditions for receipt of such rights.

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Section 7.2 Transferability. Except as otherwise so provided by the Committee, ISOs under the Plan are not transferable except (i) as designated by the Participant by will or by the laws of descent and distribution; (ii) to a trust established by the Participant, if under Code Section 671 and applicable state law, the Participant is considered the sole beneficial owner of the Stock Option while held in trust; or (iii) between spouses incident to a divorce or pursuant to a domestic relations order, provided, however, that in the case of a transfer within the meaning of this subparagraph (iii), the Stock Option shall not qualify as an ISO as of the day of such transfer. The Committee may provide, in an Award Agreement or at such other time after the grant of the Award, that a Participant may transfer Stock Options (other than ISOs) or Restricted Stock Awards to Immediate Family Members, trusts and partnerships established for the primary benefit of such family members or to charitable organizations according to such terms as the Committee may determine; provided that the Participant receives no consideration for the transfer of a Stock Option or Restricted Stock Award and the transferred Stock Option or Restricted Stock Award shall continue to be subject to the same terms and conditions as were applicable to the Stock Option or Restricted Stock Award immediately before the transfer.

Awards of Restricted Stock shall not be transferable prior to the time that such Awards vest in the Participant. A Restricted Stock Unit is not transferable, except in the event of death pursuant to a Beneficiary Designation or by will or by the laws of descent and distribution.

Section 7.3 Designation of Beneficiaries. A Participant hereunder may file with the Company a written designation of a beneficiary or beneficiaries under this Plan and may from time to time revoke or amend any such designation (“Beneficiary Designation”). Any designation of beneficiary under this Plan shall be controlling over any other disposition, testamentary or otherwise (unless such disposition is pursuant to a domestic relations order); provided, however, that if the Committee is in doubt as to the entitlement of any such beneficiary to any Award, the Committee may determine to recognize only the legal representative of the Participant, in which case the Company, the Committee and the members thereof shall not be under any further liability to anyone.

Section 7.4 Non-Exclusivity. Neither the adoption of this Plan by the Board nor the submission of the Plan to the stockholders of the Company for approval shall be construed as creating any limitations on the power of the Board or the Committee to adopt such other incentive arrangements as either may deem desirable, including, without limitation, the granting of Restricted Stock Awards, Restricted Stock Units or Stock Options, and such arrangements may be either generally applicable or applicable only in specific cases.

Section 7.5 Award Agreement. Each Award granted under the Plan shall be evidenced by an Award Agreement acknowledged by the Participant. A copy of the Award Agreement, in any medium chosen by the Committee, shall be provided (or made available electronically) to the Participant.

Section 7.6 Form and Time of Elections/Notification Under Code Section 83(b). Unless otherwise specified herein, each election required or permitted to be made by any Participant or other person entitled to benefits under the Plan, and any permitted modification or revocation thereof, shall be filed with the Company at such times, in such form, and subject to such restrictions and limitations, not inconsistent with the terms of the Plan, as the Committee shall require. Notwithstanding anything herein to the contrary, the Committee may, on the date of grant or at a later date, as applicable, prohibit an individual from making an election under Code Section 83(b). If the Committee has not prohibited an individual from making this election, an individual who makes this election shall notify the Committee of the election within ten days of filing notice of the election with the Internal Revenue Service. This requirement is in addition to any filing and notification required under the regulations issued under the authority of Code Section 83(b).

Section 7.7 Evidence. Evidence required of anyone under the Plan may be by certificate, affidavit, document or other information upon which the person is acting considers pertinent and reliable, and signed, made or presented by the proper party or parties.

Section 7.8 Tax Withholding. Where a Participant is entitled to receive shares of Stock upon the vesting, exercise or settlement of an Award, the Company shall have the right to require such Participant to pay to the Company the amount of any tax that the Company is required to withhold with respect to such vesting, exercise or settlement, or, in lieu thereof, to retain, or to sell without notice, a sufficient number of shares of Stock to cover the amount required to be withheld. To the extent determined by the Committee pursuant to procedures established by the Committee and specified in an Award Agreement, applicable tax withholding may be satisfied by the Company retaining shares of Stock with a value up an amount up to a Participant’s highest marginal tax rate provided such withholding does not trigger liability accounting under FASB ASC Topic 718 or its successor required for federal, state and local tax withholding by (i) with respect to a Stock Option, reducing the number of shares of Stock subject to the Stock Option (without issuance of such

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shares of Stock to the Stock Option holder) by a number equal to the quotient of (a) the total minimum amount of required tax withholding divided by (b) the excess of the Fair Market Value of a share of Stock on the exercise date over the Exercise Price per share of Stock; and (ii) with respect to Restricted Stock Awards and Restricted Stock Unit Awards, withholding a number of shares (based on the Fair Market Value on the vesting or settlement date, respectively) otherwise vesting or becoming payable that would satisfy the tax withholding in an amount up to a Participant’s highest marginal rate provided such withholding does not trigger liability accounting under FASB ASC Topic 718 or its successor.

Section 7.9 Action by Company or Subsidiary. Any action required or permitted to be taken by the Company or any Subsidiary shall be by resolution of its board of directors, or by action of one or more members of the Board (including a committee of the Board) who are duly authorized to act for the Board, or (except to the extent prohibited by applicable law or applicable rules of the Exchange on which the Company lists its securities) by a duly authorized officer of the Company or such Subsidiary.

Section 7.10 Successors. All obligations of the Company under the Plan shall be binding upon and inure to the benefit of any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all of the business, stock, and/or assets of the Company.

Section 7.11 Indemnification. To the fullest extent permitted by law and the Company’s governing documents, each person who is or shall have been a member of the Committee, or of the Board, or an officer of the Company to whom authority was delegated in accordance with Section 5.3, or an Employee of the Company, shall be indemnified and held harmless by the Company against and from any loss (including amounts paid in settlement), cost, liability or expense (including reasonable attorneys’ fees) that may be imposed upon or reasonably incurred by such person in connection with or resulting from any claim, action, suit, or proceeding to which such person may be a party or in which such person may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by such person in settlement thereof, with the Company’s approval, or paid by such person in satisfaction of any judgment in any such action, suit, or proceeding against such person, provided that such person shall give the Company an opportunity, at its own expense, to handle and defend the same before such person undertakes to handle and defend it on such person’s own behalf, unless such loss, cost, liability, or expense is a result of such person’s own willful misconduct or except as expressly provided by statute or regulation. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s charter or bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless. The foregoing right to indemnification shall include the right to be paid by the Company the expenses incurred in defending any such proceeding in advance of its final disposition, provided, however, that, if required by applicable law, an advancement of expenses shall be made only upon delivery to the Company of an undertaking, by or on behalf of such persons to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such person is not entitled to be indemnified for such expenses.

Section 7.12 No Fractional Shares. Unless otherwise permitted by the Committee, no fractional shares of Stock shall be issued or delivered pursuant to the Plan or any Award. The Committee shall determine whether cash or other property shall be issued or paid in lieu of fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated by rounding down.

Section 7.13 Governing Law. The Plan, all Awards granted hereunder, and all actions taken in connection herewith shall be governed by and construed in accordance with the laws of the State of Delaware without reference to principles of conflict of laws, except as superseded by applicable federal law. The federal and state courts located in the State of Delaware, shall have exclusive jurisdiction over any claim, action, complaint or lawsuit brought under the terms of the Plan. By accepting any award under this Plan, each Participant and any other person claiming any rights under the Plan agrees to submit himself or herself and any legal action that the Participant brings under the Plan, to the sole jurisdiction of such courts for the adjudication and resolution of any such disputes.

Section 7.14 Benefits Under Other Plans. Except as otherwise provided by the Committee or as set forth in a Qualified Retirement Plan, Awards to a Participant (including the grant and the receipt of benefits) under the Plan shall be disregarded for purposes of determining the Participant’s benefits under, or contributions to, any Qualified Retirement Plan, non-qualified plan and any other benefit plans maintained by the Participant’s employer. The term “Qualified Retirement Plan” means any plan of the Company or a Subsidiary that is intended to be qualified under Code Section 401(a).

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Section 7.15 Compliance with Law.

(a) With respect to persons subject to Section 16 of the Exchange Act, it is the intent of the Company that the Plan and all transactions under the Plan comply with all applicable provisions of Rule 16b-3 or its successors under the Exchange Act. In addition, it is the intent of the Company that ISOs comply with the applicable provisions of Code Section 422, and that, to the extent applicable, Awards comply with the requirements of Code Section 409A. To the extent that any legal requirement of Section 16 of the Exchange Act or Code Sections 422 or 409A as set forth in the Plan ceases to be required under Section 16 of the Exchange Act or Code Sections 422 or 409A, as applicable, that Plan provision shall cease to apply. The Committee may revoke any Award if it is contrary to law or modify an Award to bring it into compliance with any valid and mandatory government regulation. The Committee may, in its sole discretion, agree to limit its authority under this Section.

(b) The Plan is intended to comply with the requirements of Code Section 409A, to the extent applicable. Each Award shall be construed and administered such that the Award either (i) qualifies for an exemption from the requirements of Code Section 409A of or (ii) satisfies the requirements of Code Section 409A. If an Award is subject to Code Section 409A, (A) distributions shall only be made in a manner and upon an event permitted under Code Section 409A, (B) payments to be made upon a Termination of Service shall only be made upon a “Separation from Service” under Code Section 409A, in accordance with Section 8.1(gg)(iv), (C) unless the Award specifies otherwise, each installment payment shall be treated as a separate payment for purposes of Code Section 409A, and (D) in no event shall a Participant, directly or indirectly, designate the calendar year in which a distribution is made except in accordance with Code Section 409A.

(c) Notwithstanding anything in the Plan or any Award Agreement to the contrary, each Participant shall be solely responsible for the tax consequences of Awards under the Plan, and in no event shall the Company or any Subsidiary have any responsibility or liability if an Award does not meet any applicable requirements of Code Section 409A. Although the Company intends to administer the Plan to prevent taxation under Code Section 409A, the Company does not represent or warrant that the Plan or any Award complies with any provision of federal, state, local or other tax law.

Section 7.16 Validity. If any provision of this Plan is determined to be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal or invalid provision has never been included herein.

Section 7.17 Notice. Unless otherwise provided in an Award Agreement or through an electronic Award administration process communicated by the Company, all written notices and all other written communications to the Company provided for in the Plan or in any Award Agreement, shall be delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid (provided that international mail shall be sent via overnight or two-day delivery), or sent by facsimile, email or prepaid overnight courier to the Company at its principal executive office. Such notices, demands, claims and other communications shall be deemed given:

(a) in the case of delivery by overnight service with guaranteed next day delivery, the next day or the day designated for delivery;

(b) in the case of certified or registered U.S. mail, five days after deposit in the U.S. mail; or

(c) in the case of facsimile or email, the date upon which the transmitting party received confirmation of receipt; provided, however, that in no event shall any such communications be deemed to be given later than the date they are actually received, provided they are actually received.

In the event a communication is not received, it shall only be deemed received upon the showing of an original of the applicable receipt, registration or confirmation from the applicable delivery service. Communications that are to be delivered by U.S. mail or by overnight service to the Company shall be directed to the attention of the Company’s Corporate Secretary, unless otherwise provided in the Participant’s Award Agreement.

Section 7.18 Forfeiture Events. The Committee may specify in an Award Agreement that the Participant’s rights, payments, and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events include, but are not limited to, termination of employment for cause, termination of the Participant’s provision of services to the Company or any Subsidiary, violation of material Company or Subsidiary policies,

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breach of noncompetition, confidentiality, or other restrictive covenants that may apply to the Participant, or other conduct of the Participant that is detrimental to the business or reputation of the Company or any Subsidiary.

Section 7.19 Automatic Exercise. In the sole discretion of the Committee exercised in accordance with Section 5.2(a) above, any Stock Options that are exercisable but unexercised as of the day immediately before the tenth anniversary of the date of grant may be automatically exercised, in accordance with procedures established for this purpose by the Committee, but only if the Exercise Price is less than the Fair Market Value of a share of Stock on such date and the automatic exercise will result in the issuance of at least one whole share of Stock to the Participant after payment of the Exercise Price and any applicable minimum tax withholding requirements. Payment of the Exercise Price and any applicable tax withholding requirements shall be made by a net settlement of the Stock Option whereby the number of shares of Stock to be issued upon exercise are reduced by a number of shares having a Fair Market Value on the date of exercise equal to the Exercise Price and any applicable minimum tax withholding.

Section 7.20 Regulatory Requirements. The grant and settlement of Awards under this Plan shall be conditioned upon and subject to compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. 1828(k), and the rules and regulations promulgated thereunder.

Section 7.21 Clawback Policy. If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the federal securities laws, any Participant who is subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 shall reimburse the Company the amount of any payment in settlement of an Award earned or accrued during the 12-month period following the first public issuance or filing with the SEC (whichever first occurred) of the financial document embodying such financial reporting requirement.

In addition, Awards granted hereunder are subject to any clawback policy adopted by the Board from time to time.

ARTICLE 8 — DEFINED TERMS; CONSTRUCTION

Section 8.1 In addition to the other definitions contained herein, unless otherwise specifically provided in an Award Agreement, the following definitions shall apply:

(a) “10% Stockholder” means an individual who, at the time of grant, owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company.

(b) “Award” means any Stock Option, Restricted Stock or Restricted Stock Unit or any or all of them, or any other right or interest relating to stock or cash, granted to a Participant under the Plan.

(c) “Award Agreement” means the document (in whatever medium prescribed by the Committee) which evidences the terms and conditions of an Award under the Plan. The document is referred to as an agreement, regardless of whether a Participant’s signature is required.

(d) “Board” means the Board of Directors of the Company.

(e) “Cause” means if the Participant is subject to a written employment agreement (or other similar written agreement) with the Company or a Subsidiary that provides a definition of termination for “Cause,” then, for purposes of this Plan, the term “Cause” shall have the meaning set forth in such agreement. In the absence of such a definition, unless otherwise defined in the Award Agreement, “Cause” means termination because of a Participant’s personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, material breach of the Bank’s Code of Ethics, material violation of the Sarbanes-Oxley requirements for officers of public companies that in the reasonable opinion of the Chief Executive Officer of the Bank or the Board will likely cause substantial financial harm or substantial injury to the reputation of the Bank, willfully engaging in actions that in the reasonable opinion of the Board will likely cause substantial financial harm or substantial injury to the business reputation of the Bank, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than routine traffic violations or similar offenses) or final cease-and-desist order, or material breach of any provision of the contract.

(f) “Change in Control” has the meaning ascribed to it in Section 4.2.

(g) “Code” means the Internal Revenue Code of 1986, as amended, and any rules, regulations and guidance promulgated thereunder, as modified from time to time.

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(h) “Committee” means the Compensation Committee of the Board, which shall at all relevant times be comprised solely of three or more Company Non-Employee Directors, each of whom is intended to qualify as (i) a “non-employee director” (as defined in Rule 16b-3 under the Exchange Act); (ii) an “independent director” under the rules of any Exchange or automated quotation system on which the Stock is then listed, quoted or traded and (iii) independent under the Company’s Director Independence Standards, as in effect from time to time.

(i) “Company Non-Employee Director” means a member of the Board who is not an Employee of the Company or a Subsidiary.

(j) “Director” means (i) a member of the Board or of the board of directors of a Subsidiary; or (ii) a member of an advisory board to the Board or the board of directors of a Subsidiary.

(k) If the Participant is subject to a written employment agreement (or other similar written agreement) with the Company or a Subsidiary that provides a definition of “Disability” or “Disabled,” then, for purposes of this Plan, the terms “Disability” or “Disabled” shall have meaning set forth in such agreement. In the absence of such a definition, unless otherwise defined in the Award Agreement, “Disability” shall be defined in accordance with the Bank’s long-term disability plan, or in the absence of a long-term disability plan, in accordance with Code Section 409A. To the extent that an Award hereunder is subject to Code Section 409A, “Disability” or “Disabled” shall mean that a Participant: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering Employees. Except to the extent prohibited under Code Section 409A, if applicable, the Committee shall have discretion to determine if a termination due to Disability has occurred.

(l) “Dividend Equivalent Rights” means the right to receive a payment, in cash or stock, as applicable, equal to the amount of dividends paid on a share of Stock, as specified in the Award Agreement.

(m) “Employee” means any person employed by the Company or any Subsidiary as an employee. Directors who are also employed by the Company or a Subsidiary shall be considered Employees under the Plan. Any change of characterization of an individual by the Internal Revenue Service or any court or government agency shall have no effect upon the classification of an individual as an Employee for purposes of this Plan, unless the Committee determines otherwise.

(n) “Exchange” means any national securities exchange on which the Stock may from time to time be listed or traded.

(o) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

(p) “Exercise Price” means the price established with respect to a Stock Option pursuant to Section 2.2.

(q) “Fair Market Value” on any date, means (i) if the Stock is listed on an Exchange, the closing sales price on such Exchange or over such system on such date or, in the absence of reported sales on such date, the closing sales price on the immediately preceding date on which sales were reported; or (ii) if the Stock is not listed on an Exchange, “Fair Market Value” shall mean a price determined by the Committee in good faith on the basis of objective criteria consistent with the requirements of Code Section 422 and applicable provisions of Code Section 409A.

(r) A termination of employment by an Employee shall be deemed a termination of employment for “Good Reason” as a result of the Participant’s resignation from the employ of the Company or any Subsidiary upon the occurrence of any of the following events (or such other events set forth in an Award Agreement to constitute Good Reason):

(i) a material diminution in the Participant’s base compensation;

(ii) a material diminution in the Participant’s authority, duties or responsibilities;

(iii) a change in the geographic location at which the Participant must perform the Participant’s duties that is more than 25 miles from the location of the Participant’s principal workplace immediately prior to the change; or

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(iv) in the event a Participant is a party to an employment, change in control or similar agreement that provides a definition for “Good Reason” or a substantially similar term, then the occurrence of any event set forth in such definition.

None of the foregoing events or conditions will constitute Good Reason unless the Participant provides the Company or the Subsidiary employing the Participant with written objection to the event or condition within 30 days following the occurrence thereof, the Company or Subsidiary does not cure the event or condition within 30 days following receipt of that written objection, and the Participant resigns the Participant’s employment within 30 days following the expiration of that 30-day cure period.

(s) “Immediate Family Member” means with respect to any Participant (i) any of the Participant’s children, stepchildren, grandchildren, parents, stepparents, grandparents, spouses, former spouses, siblings, nieces, nephews, mothers-in-law, fathers-in-law, sons-in-law, daughters-in-law, brothers-in-law or sisters-in-law, including relationships created by adoption; (ii) any natural person sharing the Participant’s household (other than as a tenant or employee, directly or indirectly, of the Participant); (iii) a trust in which any combination of the Participant and persons described in section (i) and (ii) above own more than 50% of the beneficial interests; (iv) a foundation in which any combination of the Participant and persons described in sections (i) and (ii) above control management of the assets; or (v) any other corporation, partnership, limited liability company or other entity in which any combination of the Participant and persons described in sections (i) and (ii) above control more than 50% of the voting interests.

(t) “Involuntary Termination” means the Termination of Service of a Participant by the Company or Subsidiary (other than termination for Cause) or termination of employment by an Employee Participant for Good Reason.

(u) “ISO” has the meaning ascribed to it in Section 2.1(a).

(v) “Non-Qualified Option” means the right to purchase shares of Stock that is either (i) granted to a Participant who is not an Employee; or (ii) granted to an Employee and either is not designated by the Committee to be an ISO or does not satisfy the requirements of Code Section 422.

(w) “Participant” means any individual who has received, and currently holds, an outstanding Award under the Plan.

(x) “Restricted Stock” or “Restricted Stock Award” has the meaning ascribed to it in Sections 2.1(b) and 2.3.

(y) “Restricted Stock Unit” or “Restricted Stock Unit Award” has the meaning ascribed to it in Sections 2.1(c) and 2.4.

(z) “Retirement” means, unless otherwise specified in an Award Agreement, retirement from employment as an Employee on or after the attainment of age 65, or Termination of Service as a Director on or after the attainment of the latest age at which a Director is eligible for election or appointment as a voting member of the board of directors under the charter, or if there are no age limitations for serving as a Director, then age 70, provided, however, that unless otherwise specified in an Award Agreement, an Employee who is also a Director shall not be deemed to have terminated due to Retirement for purposes of vesting of Awards and exercise of Stock Options until both Service as an Employee and Service as a Director has ceased. A non-Employee Director will be deemed to have terminated due to Retirement under the provisions of this Plan only if the non-Employee Director has terminated Service on the board(s) of directors of the Company and any Subsidiary or affiliate in accordance with applicable Company policy, following the provision of written notice to such board(s) of directors of the non-Employee Director’s intention to retire. Unless otherwise specified in an Award Agreement, a non-employee Director who continues in Service as a director emeritus or advisory director shall be deemed to be in Service for purposes of vesting of Awards and exercise of Stock Options.

(aa) “SEC” means the United States Securities and Exchange Commission.

(bb) “Securities Act” means the Securities Act of 1933, as amended from time to time.

(cc) “Service” means service as an Employee or Director of the Company or a Subsidiary, as the case may be, and shall include service as a director emeritus or advisory director. With respect to Employees, Service shall not be deemed interrupted in the case of sick leave, military leave or any other absence approved by the Company or a Subsidiary, in the case of transferees between payroll locations or between the Company, a Subsidiary or a successor.

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(dd) “Stock” means the common stock of the Company, $1.00 par value per share.

(ee) “Stock Option” has the meaning ascribed to it in Sections 2.1(a) and 2.2.

(ff) “Subsidiary” means any corporation, affiliate, bank or other entity which would be a subsidiary corporation with respect to the Company as defined in Code Section 424(f) and, other than with respect to an ISO, shall also mean any partnership or joint venture in which the Company and/or other Subsidiary owns more than 50% of the capital or profits interests.

(gg) “Termination of Service” means the first day occurring on or after a grant date on which the Participant ceases to be an Employee or Director (including a director emeritus or advisory director) of the Company or any Subsidiary, regardless of the reason for such cessation, subject to the following:

(i) The Participant’s cessation as an Employee shall not be deemed to occur by reason of the transfer of the Participant between the Company and a Subsidiary or between two Subsidiaries.

(ii) The Participant’s cessation as an Employee shall not be deemed to occur by reason of the Participant’s being on a bona fide leave of absence from the Company or a Subsidiary approved by the Company or Subsidiary otherwise receiving the Participant’s services, provided such leave of absence does not exceed six months, or if longer, so long as the Employee retains a right to reemployment with the Company or Subsidiary under an applicable statute or by contract. For these purposes, a leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the Employee will return to perform services for the Company or Subsidiary. If the period of leave exceeds six months and the Employee does not retain a right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first day immediately following such six-month period. For purposes of this sub-section, to the extent applicable, an Employee’s leave of absence shall be interpreted by the Committee in a manner consistent with Treasury Regulation Section 1.409A-1(h)(1).

(iii) If, as a result of a sale or other transaction, the Subsidiary for whom Participant is employed (or to whom the Participant is providing services) ceases to be a Subsidiary, and the Participant is not, following the transaction, an Employee of the Company or an entity that is then a Subsidiary, then the occurrence of such transaction shall be treated as the Participant’s Termination of Service caused by the Participant being discharged by the entity for whom the Participant is employed or to whom the Participant is providing services.

(iv) Except to the extent Code Section 409A may be applicable to an Award, and subject to the foregoing paragraphs of this sub-section, the Committee shall have discretion to determine if a Termination of Service has occurred and the date on which it occurred. In the event that any Award under the Plan constitutes Deferred Compensation, the term Termination of Service shall be interpreted by the Committee in a manner consistent with the definition of “Separation from Service” as defined under Code Section 409A and under Treasury Regulation Section 1.409A-1(h)(ii). For purposes of this Plan, a “Separation from Service” shall have occurred if the Company or Subsidiary and the Participant reasonably anticipate that no further services will be performed by the Participant after the date of the ~~relevant annual meeting~~Termination of ~~stockholders~~Service (whether as an employee or as an independent contractor) or the level of further services performed will be less than 50% of the ~~Company~~average level of bona fide services in the 36 months immediately preceding the Termination of Service. If a Participant is a “Specified Employee,” as defined in Code Section 409A and ~~include~~any payment to be made hereunder shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the ~~written consent~~minimum extent possible) shall be delayed and shall be paid on the first day of the ~~person so recommended~~seventh month following Participant’s Separation from Service.

(v) With respect to ~~serve~~a Participant who is a Director, cessation as a Director will not be deemed to have occurred if the Participant continues as a director ~~if nominated~~emeritus or advisory director. With respect to a Participant who is both an Employee and ~~elected and~~a Director, termination of employment as an Employee shall not constitute a Termination of Service for purposes of the Plan so long as the Participant continues to provide ~~such information as the Nominating and the Governance Committee may request, as well~~Service as a ~~description of~~Director or director emeritus or advisory director.

(hh) “Voting Securities” means any securities which ordinarily possess the nominee’s background and qualifications. All stockholder recommendations received by the Nominating and Governance Committee will be reviewed at the first meeting of the Nominating and Governance Committee held after receipt of the recommendation. The Nominating and Governance Committee will consider nominees recommended by security holders for the annual meeting of stockholderspower to ~~be held in 2022, if submitted as described above by December 10, 2021. The Company describes how it addresses such submissions in greater detail~~vote in the ~~“Submission~~election of ~~Director-Nominee Candidate” section~~directors without the happening of any pre-condition or contingency.

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Section 8.2 In this Plan, unless otherwise stated or the ~~Corporate Governance Guidelines which~~context otherwise requires, the following uses apply:

(a) actions permitted under this Plan may be accessed at https://investors.thebancorp.com/corporate-information/governance-documents/default.aspx. These Corporate Governance Guidelines were adopted by the Board on December 16, 2020 and largely memorialized prior practices of the Nominating and Governance Committee. The candidate attributes examined by the Nominating and Governance Committee and the standards taken ~~into account by the Nominating and Governance Committee are summarized above. See “Corporate Governance.”~~

~~STOCKHOLDER OUTREACH~~

~~We seek to actively engage with our stockholders. We recognize the benefits that come from this interaction. We engage with stockholders throughout the year to:~~

✓

Provide visibility and transparency into our business, our performance and our governance practices: The financial metrics and other targets utilized by the Company and Compensation Committee to assess performance and determine incentive compensation are at https://investors.thebancorp.com/presentations/default.aspx.

✓

Discuss with our stockholders the issues that are important to them, hear their expectations for us, and share our views: The Company’s Chief Executive Officer and Chief Financial Officer host quarterly phone calls in which all stockholders may participate, and which includes a question and answer session.

✓

Assess emerging issues that may affect our business, inform our decision making, enhance our corporate disclosures and help shape our practices: Notwithstanding more than a 90% approval for the advisory vote on compensation taken at the Company’s annual meeting held in 2020, executive management reached out to stockholders to provide input on that or any topic they wished. The Chief Financial Officer and Chief Executive Officer are the Company’s primary representatives who meet with investors. The Chief Financial Officer addresses outreach relating to CEO compensation. In 2020, these officers met with stockholders owning over 50% of the Company’s stock. A chart detailing the specific stockholder recommendations made and corresponding steps to implement pay for performance and other governance, is presented in “Determination of Compensation Amounts” under ~~“Stockholder Input and Company Actions”~~.

~~How We Engage~~

In addition to quarterly phone calls in which all stockholders may participate, we provide institutional investors with many opportunities and events to provide feedback to our Board and senior management. We participate in:

✓

~~Formal events~~

✓

~~One-on-one sessions~~

✓

~~Group meetings throughout the year~~

~~The Company’s Board of Directors and management value direct interaction and communication with stockholders. The Company encourages stockholders to contact it~~ at any time and from time to ~~discuss compensation~~time in the actor’s reasonable discretion;

(b) references to a statute shall refer to the statute and any ~~other topics of importance~~successor statute, and to ~~them. In 2020, senior management held more than 50 meetings~~all regulations promulgated under or implementing the statute or its successor, as in effect at the relevant time;

(c) in computing periods from a specified date to a later specified date, the words “from” and ~~conference calls with most~~“commencing on” (and the like) mean “from and including,” and the words “to,” “until” and “ending on” (and the like) mean “to, but excluding”;

(d) references to a governmental or quasi-governmental agency, authority or instrumentality shall also refer to a regulatory body that succeeds to the functions of the ~~Company’s major stockholders, although some investors~~agency, authority or instrumentality;

(e) “indications of time of day mean Eastern Time;

(f) “including” means “including, but not limited to”;

(g) all references to sections, schedules and exhibits are to sections, schedules and exhibits in or to this Plan unless otherwise specified;

(h) all words used in this Plan will be construed to be of such gender or number as the circumstances and context require;

(i) the captions and headings of articles, sections, schedules and exhibits appearing in or attached to this Plan have been inserted solely for convenience of reference and shall not be considered a ~~policy~~part of ~~not meeting directly with management. The Company uses these meetings~~this Plan nor shall any of them affect the meaning or interpretation of this Plan or any of its provisions;

(j) any reference to ~~obtain feedback from its stockholders about areas important to them; including the Company’s business model, performance, corporate governance, compensation practices and other investor topics.~~

~~Based upon continuing stockholder engagement throughout the past two years, we believe there is~~ a ~~more positive view~~document or set of ~~executive compensation resulting from sustained multi-year improvement~~documents in ~~quarterly and annual results. The Company maintains a stockholder relations department headed by Andres Viroslav,~~this Plan, and the ~~Company encourages you~~rights and obligations of the parties under any such documents, shall mean such document or documents as amended from time to ~~call either him at 215.861.7990~~time, and any and all modifications, extensions, renewals, substitutions or ~~its Corporate Secretary~~replacements thereof; and ~~Chief Financial Officer, Paul Frenkiel at 302.385.5122 for your feedback and financially-related or other questions.~~

(k) all accounting terms not specifically defined herein shall be construed in accordance with Generally Accepted Accounting Principles.

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[MISSING IMAGE: px_24bancorpproxy1pg01-bw.jpg]

2024 ANNUAL MEETING OF STOCKHOLDERS OF

~~THE~~OFTHE BANCORP, ~~INC.~~

INC.to be held at 10:00 A.M. ET on May ~~19, 2021~~

~~PROXY VOTING INSTRUCTIONS~~

~~INTERNET~~29, 2024 at 409 Silverside Road, Suite 105, Wilmington, Delaware 19809INTERNET - Access “www.voteproxy.com” and follow the on-screen instructions or scan the QR code with ~~your smartphone. Have~~ your smartphone. Have this document available when you access the web page.Vote online until 11:59 P.M. ET on May 28, 2024 (the day before the meeting).MAIL - Sign, date and mail your proxy card in the postage-paid envelope provided as soon as possible. If you vote by mail, your vote must be received no later than 11:59 P.M. ET on May 28, 2024 (the day before the meeting).IN PERSON - You may vote your shares in person by attending the Annual Meeting.GO GREEN - e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via https://equiniti.com/us/ast-access to enjoy online access.Please complete, sign and date the below proxy card, ~~available when you access the web page.~~ ~~Vote online until 11:59 PM EST the day before the meeting.~~
~~MAIL~~- ~~Sign, date and mail your proxy card in the envelope provided as soon as possible.~~ ~~VIRTUALLY AT THE MEETING~~ - The company will be hosting the meeting live via the Internet this year. To attend the meeting via the Internet, please visit https://web.lumiagm.com/239103630 (password: bancorp2021) and be sure to have your control number available.		~~COMPANY NUMBER~~
~~GO GREEN~~ - e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.astfinancial.com to enjoy online access.		~~ACCOUNT NUMBER~~

~~IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS~~

~~FOR THE STOCKHOLDER MEETING TO BE HELD ON MAY 19, 2021~~:

~~The Notice of Annual Meeting, Proxy Statement, Annual Report and Proxy Card~~

~~are available at - https://investors.thebancorp.com/financial-information/proxy-materials/default.aspx~~

\/ ~~Please~~ detach along perforated line and mail it in the postage-paid envelope ~~provided~~ IF ~~you~~provided.052924THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH DIRECTOR NOMINEE IN PROPOSAL 1, AND A VOTE "FOR" PROPOSALS 2, 3 AND 4.PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE: x 1.Election of ten directors to serve for a term of one year. Michael J. BradleyMatthew N. Cohn Cheryl D. Creuzot Hersh Kozlov Damian M. KozlowskiWilliam H. Lamb FOR AGAINST ABSTAIN 2.Advisory (non-binding) approval of the 2023 compensation of The Bancorp, Inc.'s named executive officers.3.Advisory (non-binding) ratification of the appointment of Crowe LLP as The Bancorp, Inc.'s independent registered public accounting firm for the fiscal year ending December 31, 2024.4.Approval of The Bancorp, Inc. 2024 Equity Incentive Plan. FOR AGAINST ABSTAINFOR AGAINST ABSTAINFOR AGAINST ABSTAIN James J. McEntee III Daniela A. Mielke Stephanie B. Mudick Mark E. Tryniski In their discretion, the designated proxies named in the Proxy Statement are authorized to vote upon such other business as may properly come before the meeting and any adjournment, postponement or continuation thereof.This proxy is solicited on behalf of the Board of Directors of The Bancorp, Inc. This proxy, if properly executed, will be voted in the manner instructed above. If no instruction is given, this proxy will be voted "FOR" the election of each director nominee in Proposal 1, and "FOR" Proposals 2, 3 and 4. To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not ~~voting~~be submitted via ~~the Internet.~~ \/

~~THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF DIRECTORS~~

~~AND “FOR” ITEMS 2 AND 3.~~

~~PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE: ☒~~


~~1. Election of Directors~~					~~FOR~~	~~AGAINST~~	~~ABSTAIN~~
	~~FOR~~	~~AGAINST~~	~~ABSTAIN~~	~~William H. Lamb~~	☐	☐	☐
~~Daniel G. Cohen~~	☐	☐	☐	~~James J. McEntee lll~~	☐	☐	☐
~~Damian Kozlowski~~	☐	☐	☐	~~Daniela A. Mielke~~	☐	☐	☐

~~Walter T. Beach~~	☐	☐	☐	~~Stephanie B. Mudick~~	☐	☐	☐

~~Michael J. Bradley~~	☐	☐	☐	~~Mei-Mei Tuan~~	☐	☐	☐
~~John C. Chrystal~~	☐	☐	☐	~~2. Proposal to approve a non-binding advisory vote on the Company’s compensation program for its named executive officers.~~	☐	☐	☐
~~Matthew Cohn~~	☐	☐	☐
~~John Eggemeyer~~	☐	☐	☐	~~3. Proposal to approve the selection of Grant Thornton LLP as independent public accountants for the Company for the fiscal year ending December 31, 2021.~~	☐	☐	☐
~~Hersh Kozlov~~	☐	☐	☐

				~~4. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting and any adjournment, postponement, or continuation thereof.~~ This proxy is solicited on behalf of the Board of Directors of the Company. This proxy, when properly executed, will be voted in accordance with the instructions given above. If no instructions are given, this proxy will be voted “FOR” election of the Directors and “FOR” proposals 2 and 3.
To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.		☐

~~Signature of Stockholder~~

~~Date:~~

~~Signature of Stockholder~~

~~Date:~~

this method. Signature of Stockholder Date: Signature of Stockholder Date: Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the ~~signer~~signatory is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If ~~signer~~the signatory is a partnership, please sign in partnership name by authorized person.

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[MISSING IMAGE: px_24bancorpproxy1pg03-bw.jpg]

2024 ANNUAL MEETING OF STOCKHOLDERS OF

~~THE~~OFTHE BANCORP, ~~INC.~~

INC.to be held at 10:00 A.M. ET on May ~~19, 2021~~

~~GO GREEN~~

e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.astfinancial.com to enjoy online access.

~~IMPORTANT~~29, 2024 at 409 Silverside Road, Suite 105, Wilmington, Delaware 19809IMPORTANT NOTICE REGARDING THE INTERNET AVAILABILITY OF PROXY ~~MATERIALS~~

~~FOR~~MATERIALSFOR THE STOCKHOLDER MEETING TO BE HELD ON MAY ~~19, 2021:~~

29, 2024:The Notice of Annual Meeting, Proxy Statement and Annual ~~Report and Proxy Card~~

~~are~~Reportare also available at - https://investors.thebancorp.com/financial-information/proxy-materials/~~default.aspx~~

~~Please~~default.aspxPlease complete, sign, ~~date and~~dateand mail

your proxy card ~~in the~~

inthe envelope provided assoon as ~~soon~~

~~as possible.~~

\/ ~~Please detach along perforated line and mail in the envelope provided.~~ \/

~~THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF DIRECTORS~~

~~AND “FOR” ITEMS 2 AND 3.~~

~~PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE: ☒~~


~~1. Election of Directors~~					~~FOR~~	~~AGAINST~~	~~ABSTAIN~~
	~~FOR~~	~~AGAINST~~	~~ABSTAIN~~	~~William H. Lamb~~	☐	☐	☐
~~Daniel G. Cohen~~	☐	☐	☐	~~James J. McEntee lll~~	☐	☐	☐
~~Damian Kozlowski~~	☐	☐	☐	~~Daniela A. Mielke~~	☐	☐	☐

~~Walter T. Beach~~	☐	☐	☐	~~Stephanie B. Mudick~~	☐	☐	☐

~~Michael J. Bradley~~	☐	☐	☐	~~Mei-Mei Tuan~~	☐	☐	☐
~~John C. Chrystal~~	☐	☐	☐	~~2. Proposal to approve a non-binding advisory vote on the Company’s compensation program for its named executive officers.~~	☐	☐	☐
~~Matthew Cohn~~	☐	☐	☐
~~John Eggemeyer~~	☐	☐	☐	~~3. Proposal to approve the selection of Grant Thornton LLP as independent public accountants for the Company for the fiscal year ending December 31, 2021.~~	☐	☐	☐
~~Hersh Kozlov~~	☐	☐	☐

				~~4. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting and any adjournment, postponement or continuation thereof.~~ This proxy is solicited on behalf of the Board of Directors of the Company. This proxy, when properly executed, will be voted in accordance with the instructions given above. If no instructions are given, this proxy will be voted “FOR” election of the Directors and “FOR” proposals 2 and 3.
To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.		☐

~~Signature of Stockholder~~

possible.Signature of Stockholder Date: Signature of Stockholder Date:

~~Signature of Stockholder~~

~~Date:~~

Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give ~~full title~~fulltitle as such. If the ~~signer~~signatory is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If ~~signer~~the signatory is a partnership, please sign in partnership name by authorizedperson.To change the address on your account, please check the box at right andindicate your new address in the address space above. Please note thatchanges to the registered name(s) on the account may not be submitted viathis method.1. Election of ten directors to serve for a term of one year.Michael J. BradleyMatthew N. CohnCheryl D. CreuzotHersh KozlovDamian M. KozlowskiWilliam H. LambJames J. McEntee IIIDaniela A. MielkeStephanie B. MudickMark E. Tryniski2. Advisory (non-binding) approval of the 2023 compensation of TheBancorp, Inc.'s named executive officers.3. Advisory (non-binding) ratification of the appointment of Crowe LLP asThe Bancorp, Inc.'s independent registered public accounting firm forthe fiscal year ending December 31, 2024.4. Approval of The Bancorp, Inc. 2024 Equity Incentive Plan.In their discretion, the designated proxies named in the Proxy Statement are authorized ~~person.~~tovote upon such other business as may properly come before the meeting and anyadjournment, postponement or continuation thereof.This proxy is solicited on behalf of the Board of Directors of The Bancorp, Inc. Thisproxy, if properly executed, will be voted in the manner instructed above. If noinstruction is given, this proxy will be voted "FOR" the election of each directornominee in Proposal 1, and "FOR" Proposals 2, 3 and 4.THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH DIRECTOR NOMINEE IN PROPOSAL 1,AND A VOTE "FOR" PROPOSALS 2, 3 AND 4.PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE: xPlease complete, sign and date the below proxy card, detach along perforated line and mail it in the postage-paid ------------------ e n v e l o p e p r o v i d e d . ----------------052924FOR AGAINST ABSTAINGO GREENe-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxymaterial, statements and other eligible documents online, while reducing costs, clutter andpaper waste. Enroll today via https://equiniti.com/us/ast-access to enjoy online access.FOR AGAINST ABSTAINFOR AGAINST ABSTAINFOR AGAINST ABSTAIN

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[MISSING IMAGE: px_24bancorpproxy1pg02-bw.jpg]

THE BANCORP, INC.

ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY ~~19, 2021~~

29, 2024 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Damian M. Kozlowski and Paul Frenkiel as proxies, each with full power of substitution, to represent and vote as designated on the reverse side, all the ~~Common Shares~~shares of common stock, par value $1.00 per share, of The Bancorp, Inc. (the “Company”) held of record by the undersigned as of the close of business on ~~March 23, 2021,~~April 2, 2024, at the Annual Meeting of Stockholders to be held ~~virtually~~ at ~~https://web.lumiagm.com/239103630 (password: bancorp2021),~~409 Silverside Road, Suite 105, Wilmington, Delaware 19809, at 10:00 A.M. ET on May ~~19, 2021,~~29, 2024, or any adjournment, postponement or ~~postponement~~continuation thereof.

~~(Continued~~ (Continued and to be signed on the reverse side)

1.114475

0001295401 3 2023-01-01 2023-12-31


TIME & DATE:	LOCATION:	RECORD DATE:
Wednesday, May 29, 2024 at 10:00 a.m. Eastern Time	409 Silverside Road, Suite 105 Wilmington, Delaware 19809	Close of business on April 2, 2024

	1. PROPOSALS TO BE VOTED			BOARD’S RECOMMENDATION
	Proposal 1: To elect the ~~thirteen directors~~10 director nominees named in the ~~enclosed Proxy Statement~~proxy statement (the “Proxy Statement”) to serve until the ~~next~~2025 annual meeting of stockholders.			FOR

	MEETING			DATE AND TIME			PLACE
	2024 Annual Meeting of Stockholders			Wednesday, May 29, 2024 at 10:00 a.m. Eastern Time			409 Silverside Road, Suite 105 Wilmington, DE

	EXCHANGE AND TICKER SYMBOL			STATE OF INCORPORATION			RECORD DATE
	Nasdaq Global Select : TBBK			Delaware			Close of business on April 2, 2024


VIA THE INTERNET	BY MAIL	IN PERSON
Go to www.voteproxy.com.	If you received paper proxy materials, you can vote by written proxy card. Complete, sign and date your proxy card, and mail it back in the envelope provided.	Attend the Annual Meeting in person and vote your shares via ballot.

	Sincerely,

	James J. McEntee III Board Chair			Damian M. Kozlowski Director and CEO, The Bancorp, Inc. President, The Bancorp Bank, N.A.

	3.	Proposal 3: To ~~approve~~ratify, in an advisory (non-binding) vote, the ~~selection~~appointment of ~~Grant Thornton~~Crowe LLP as the independent registered public accounting firm for the Company for the fiscal year ending December 31, ~~2021.~~2024.			FOR
	Proposal 4: To approve the Company’s 2024 Equity Incentive Plan.			FOR

	By order of the Board of Directors, Paul Frenkiel Secretary
Wilmington, Delaware April 8, 2024			IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON MAY 29, 2024: IN ACCORDANCE WITH U.S. SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) RULES, WE ARE USING THE INTERNET AS OUR PRIMARY MEANS OF FURNISHING PROXY MATERIALS TO STOCKHOLDERS. ON OR ABOUT APRIL 9, ~~2021~~ 2024, WE WILL MAIL TO STOCKHOLDERS A NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS (THE “NOTICE OF INTERNET AVAILABILITY”), WHICH WILL CONTAIN INSTRUCTIONS FOR ACCESSING THE PROXY MATERIALS AND VOTING VIA THE INTERNET. THE NOTICE OF INTERNET AVAILABILITY WILL ALSO CONTAIN INSTRUCTIONS ON HOW YOU MAY ELECT TO RECEIVE A PAPER OR E-MAIL COPY OF THE PROXY MATERIALS AT NO CHARGE. THE COMPANY’S NOTICE OF ANNUAL MEETING, THIS PROXY STATEMENT, AND OUR 2023 ANNUAL REPORT (THE “ANNUAL REPORT”), WHICH INCLUDES OUR ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2023, ARE AVAILABLE FREE OF CHARGE ON OUR CORPORATE WEBSITE ATHTTPS://INVESTORS.THEBANCORP.COM/ FINANCIAL-INFORMATION/PROXY-MATERIALS/DEFAULT.ASPX.

~~GENERAL~~	1 PROXY SUMMARY		5
	PROPOSAL 1. ELECTION OF DIRECTORS	5	11
~~STOCK OWNERSHIP, SECTION 16 COMPLIANCE AND HEDGING POLICY~~	11 CORPORATE GOVERNANCE		20
~~NAMED EXECUTIVE OFFICERS~~	14 STOCKHOLDER ENGAGEMENT		25
~~CORPORATE GOVERNANCE~~	15 DIRECTOR COMPENSATION		26
	CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	20	27
	NON-DIRECTOR EXECUTIVE OFFICERS		28
	PROPOSAL 2. ADVISORY (NON-BINDING) VOTE ON EXECUTIVE COMPENSATION	21	31
	COMPENSATION DISCUSSION AND ANALYSIS	22	32
	COMPENSATION COMMITTEE REPORT	37	42
	EXECUTIVE COMPENSATION TABLES	38
~~AUDIT COMMITTEE REPORT~~	47
~~PROPOSAL 3. APPROVAL OF ACCOUNTANTS~~	48
~~OTHER MATTERS~~	49
~~STOCKHOLDER PROPOSALS AND NOMINATIONS~~	49
~~STOCKHOLDER OUTREACH~~43	50

	STOCK OWNERSHIP AND SECTION 16 COMPLIANCE					50
	PROPOSAL 3. RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2024					52
	AUDIT COMMITTEE REPORT					54
	PROPOSAL 4. APPROVAL OF THE BANCORP, INC. 2024 EQUITY INCENTIVE PLAN					55
	GENERAL INFORMATION ABOUT THE 2024 ANNUAL MEETING					65
	OTHER MATTERS					69
	STOCKHOLDER PROPOSALS AND NOMINATIONS FOR THE 2025 ANNUAL MEETING					70
	APPENDIX A.The Bancorp, Inc. 2024 Equity Incentive Plan					A-1

PROPOSALS	BOARD’S RECOMMENDATION	PAGE
1 Election of 10 director nominees to serve until the 2025 annual meeting of stockholders	FOR	11
2 Advisory (non-binding) approval of named executive officers’ compensation for fiscal year 2023	FOR	31
3 Advisory (non-binding) ratification of the appointment of Crowe LLP as the Company’s independent registered public accounting firm for fiscal year 2024	FOR	52
4 Approval of the Company’s 2024 Equity Incentive Plan	FOR	55

	AGE	DIRECTOR SINCE	INDEPENDENT	AUDIT	COMPENSATION	RISK	NOMINATING AND GOVERNANCE	EXECUTIVE	ESG
Michael J. Bradley	79	2005
Matthew N. Cohn	54	1999
Cheryl D. Creuzot	64	2021
Hersh Kozlov	76	2014
Damian M. Kozlowski	59	2016
William H. Lamb	84	2004
James J. McEntee III*	66	2000
Daniela A. Mielke	58	2019
Stephanie B. Mudick	68	2019
Mark E. Tryniski**	63	N/A

	BOARD INDEPENDENCE
	Strong, Independent Leadership Structure: We have an independent Board Chair under applicable Nasdaq standards, and our standing committees are led by and composed exclusively of independent directors.
	Substantial Majority of Independent Directors: The Board is composed of a substantial majority of independent directors. All director nominees are considered independent under applicable Nasdaq standards except the Company’s Chief Executive Officer.
	Executive Sessions of Independent Directors: The Board and all Board Committees hold executive sessions without management present.
	BOARD ACCOUNTABILITY
	Annual Elections: All directors must be elected annually with no staggered or multi-year terms.
	Majority Voting Standard: We utilize a majority of votes cast standard for uncontested director elections.
	Actively Engaged Directors: We had 100% Board meeting attendance for each director in fiscal year 2023, and at least 75% committee meeting attendance for each director in fiscal year 2023.
	Stock Ownership Requirements and Clawback: We have stock ownership guidelines for our directors and CEO, and an executive compensation clawback policy applicable to all executive officers that provides for the mandatory recovery, in the event of an accounting restatement, of erroneously awarded incentive-based compensation received by executive officers to the extent the compensation was awarded based on the attainment of a financial reporting measure.
	Stockholder Engagement and Rights: We have adopted a one-share, one-vote standard—and we proactively engage with stockholders throughout the year. Stockholder feedback is regularly shared with the Board.
	BOARD EFFECTIVENESS
	Annual Evaluations: The Board and its standing Committees conduct an annual self-evaluation to assess effectiveness and identify opportunities for continuous improvement.
	Director Skills and Succession Planning: The Board performs a periodic review of directors’ skill sets and identifies additional skills and experience desired as additional directors are appointed.
	Committee Charters and Corporate Governance Guidelines: Committee charters are typically reviewed annually, in addition to other key documents, such as our Corporate Governance Guidelines, Conflicts of Interest Policy, Insider Trading Policy, and Code of Ethics and Business Conduct.
	Performance Oversight: The Board regularly monitors Company and management performance against strategic agenda benchmarks.
	Regular Board Committee Engagement with Management: Most Board Committees meet regularly and receive reporting from management at various levels.

	$7.7B			$192M			26%			2.6%
	Our assets totaled approximately $7.7 billion.			We recorded net income of $192 million compared to $130 million in 2022.			We recorded 26% return on equity compared to 19% in 2022.			We recorded 2.6% return on assets compared to 1.8% in 2022.

	Common			Percent
Non-NEO Directors ⁽²⁾	Shares ⁽¹⁾			of Class
Cohen, Daniel G.		226,868	⁽³⁾		0.4	%
Beach, Walter T.		65,100	⁽⁴⁾		*
Bradley, Michael J.		110,100	⁽⁵⁾		*
Chrystal, John C.		230,916	⁽⁶⁾		*
Cohn, Matthew N.		136,163	⁽⁷⁾		*
Eggemeyer, John M.		43,100	⁽⁸⁾		*
Kozlov, Hersh		98,100	⁽⁹⁾		*
Lamb, William H.		220,841	⁽¹⁰⁾		*
McEntee III, James J.		119,070	⁽¹¹⁾		*
Mielke, Daniela A.		35,370	⁽¹²⁾		*
Mudick, Stephanie B.		15,100	⁽¹³⁾		*
Tuan, Mei-Mei H.		51,100	⁽¹⁴⁾		*
Named Executive Officers ⁽²⁾
Kozlowski, Damian		851,642	⁽¹⁵⁾		1.4	%
Frenkiel, Paul		198,209	⁽¹⁶⁾		*
Connolly, Mark		123,283	⁽¹⁷⁾		*
Garry, Gregor		32,320	⁽¹⁸⁾		*
Pareigat, Thomas		74,994	⁽¹⁹⁾		*

All executive officers and directors (17) persons		2,632,276			4.5	%

Owners of more than 5% of outstanding shares
Frontier Capital Management Co. LLC		5,024,953	⁽²⁰⁾		8.7	%
BlackRock, Inc.		4,440,623	⁽²¹⁾		7.7	%
Dimensional Fund Advisors, L.P.		3,772,269	⁽²²⁾		6.5	%

Name	Principal Position	Salary %	2020 Cash Bonus ($)	Cash Bonus %	2020 Equity Grant ($)	Equity Grant %	Total ($)
Damian Kozlowski	Chief Executive Officer	16	1,650,000	35	2,256,000	49	4,656,000
Paul Frenkiel	Chief Financial Officer	50	220,000	28	180,000	22	800,000
Mark Connolly	Chief Credit Officer	31	412,500	38	337,500	31	1,100,000
Gregor Garry	Chief Operating Officer	50	220,000	28	180,000	22	800,000
Thomas Pareigat	General Counsel	44	275,000	31	225,000	25	900,000

Name	Principal Position	Base Salary 2019 ($)	Base Salary 2020 ($)	Percentage Increase/ (Decrease)	Peer Range of Base Salary ($) (a)
Damian Kozlowski	Chief Executive Officer	755,000	750,000	(1) %	(b)

Paul Frenkiel	Chief Financial Officer	396,500	400,000	1%	304,500-500,000
Mark Connolly	Chief Credit Officer	348,000	350,000	1%	290,000-437,700

Gregor Garry	Chief Operating Officer	323,000	400,000	24%	325,000-578,200
Thomas Pareigat	General Counsel	398,462	400,000	1%	279,000-418,300

Name and Principal Position	Year	Salary ($)	Bonus	Stock Awards ($) ⁽¹⁾	Option Awards ($) ⁽²⁾	All other compensation ($) ⁽³⁾	Total

Damian Kozlowski	2020	750,000	1,650,000	1,350,000	906,000	9,714	4,665,714
Chief Executive Officer ⁽⁴⁾	2019	755,000	675,000	675,000	250,000	10,476	2,365,476
	2018	900,000	300,000	300,000	-	9,324	1,509,324

Paul Frenkiel	2020	400,000	220,000	180,000	-	18,426	818,426
Chief Financial Officer/	2019	396,500	125,000	125,000	-	18,560	665,060
Secretary	2018	310,660	100,000	100,000	-	18,396	529,096

Mark Connolly	2020	350,000	412,500	337,500	-	9,354	1,109,354
Executive Vice President/	2019	348,000	300,000	300,000	-	9,424	957,424
Chief Credit Officer	2018	300,000	225,000	225,000	-	8,862	758,862

Gregor Garry	2020	400,000	220,000	180,000	-	8,837	808,837
Executive Vice President/	2019	323,000	100,000	100,000	-	6,559	529,559
Chief Operating Officer	2018	273,000	50,000	50,000	-	8,929	381,929

Thomas Pareigat	2020	400,000	275,000	225,000	-	17,328	917,328
Executive Vice President/	2019	398,462	150,000	150,000	-	17,321	715,783
General Counsel	2018	360,000	100,000	100,000	-	16,884	576,884

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)	(b)	(c)
Equity compensation plans approved by security holders	2,949,547⁽¹⁾	$7.62⁽²⁾	1,720,120
Equity compensation plans not approved by security holders	Not applicable	Not applicable	Not applicable
Total	2,949,547	$7.62	1,720,120

Name	Grant Date	All Other Stock Awards: Number of Shares of Stock or Units (#)	Fair Market Value on Date of Grant ($/Share)	All Other Option Awards: Number of Securities Underlying Options (#) ⁽¹⁾	Exercise Price of Stock Options ⁽¹⁾ ($/Share)	Grant Date Fair Value of Stock and Option Awards ($)
Damian Kozlowski	05/20/20	196,506	6.87			1,350,000

Damian Kozlowski	05/20/20			300,000	6.87	906,000

Paul Frenkiel	05/20/20	26,200	6.87	-	-	180,000

Mark Connolly	05/20/20	49,126	6.87	-	-	337,500

Gregor Garry	05/20/20	26,200	6.87	-	-	180,000

Thomas Pareigat	05/20/20	32,751	6.87	-	-	225,000

			Option Awards			Stock Awards
		Number of securities underlying unexercised options Exercisable	Number of securities underlying unexercised options Unexercisable	Options exercise price	Option expiration	Number of shares or units of stock that have not vested ⁽²⁾	Market value of shares or units of stock that have not vested ⁽³⁾
Name	Grant Date	(#)	(#)	($)	date	(#)	($)
Damian Kozlowski	6/01/2016	300,000	-	6.75	6/1/2026	-	-
	5/16/2018	-	-	-	-	9,034	123,314
	2/8/2019	16,276	48,828	8.57	2/8/2029	-	-
	2/8/2019	-	-	-	-	52,509	716,748
	5/20/2020		300,000	6.87	5/20/2030
	5/20/2020					196,506	2,682,307
	Total	316,276	348,828	-	-	258,049	3,522,369

Paul Frenkiel	8/11/2011	38,000	-	7.36	8/11/2021	-	-
	1/25/2012	40,000	-	8.50	1/25/2022	-	-
	1/23/2013	20,000	-	10.45	1/23/2023	-	-
	5/16/2018	-	-	-	-	3,011	41,100
	2/8/2019					9,724	132,733
	5/20/2020	-	-	-	-	26,200	357,630
	Total	98,000	-	-	-	38,935	531,463

Mark Connolly	5/16/2018	-	-	-	-	6,775	92,479
	2/8/2019	-	-	-	-	23,338	318,564
	5/20/2020	-	-	-	-	49,126	670,570
	Total	-	-	-	-	79,239	1,081,613

Gregor Garry	5/16/2018	-	-	-	-	1,506	20,557
	2/8/2019	-	-	-	-	7,780	106,197
	5/20/2020	-	-	-	-	26,200	357,630
	Total	-	-	-	-	35,486	484,384

Thomas Pareigat	1/25/2012	25,000	-	8.50	1/25/2022	-	-
	1/23/2013	10,000	-	10.45	1/23/2023	-	-
	5/16/2018	-	-	-	-	3,011	41,100
	2/8/2019	-	-	-	-	11,669	159,282
	5/20/2020	-	-	-	-	32,751	447,051
	Total	35,000	-	-	-	47,431	647,433

	Total	449,276	348,828	-	-	459,140	6,267,262

Name	Principal Position	Involuntary Termination following a Change in Control ($)	Death, Disability, Retirement ($)
Damian Kozlowski ⁽¹⁾	Chief Executive Officer	5,804,415	5,804,415
Paul Frenkiel ⁽²⁾	Chief Financial Officer	531,463	531,463
Mark Connolly ⁽²⁾	Chief Credit Officer	1,081,612	1,081,612
Gregor Garry ⁽²⁾	Chief Operating Officer	484,384	484,384
Thomas Pareigat ⁽²⁾	General Counsel	647,433	647,433

	Fees Earned or Paid in Cash ($)	Stock Awards ($)⁽⁴⁾	Total ($)
Walter T. Beach	79,000	90,000	169,000
Michael J. Bradley	105,500	90,000	195,500
John C. Chrystal ⁽¹⁾	96,000	90,000	186,800
Daniel G. Cohen ⁽²⁾	602,500	247,500	850,000
Matthew N. Cohn	81,000	90,000	171,000
John M. Eggemeyer	80,500	90,000	170,500
Hersh Kozlov	77,000	90,000	167,000
William H. Lamb	79,500	90,000	169,500
James J. McEntee III	96,000	90,000	186,000
Daniela A. Mielke	88,000	90,000	178,000
Stephanie B. Mudick	86,500	90,000	176,500
Mei-Mei H. Tuan	80,000	90,000	170,000

	2020		2019
Audit Fees ⁽¹⁾	$	819,001	$	820,627
Audit – Related Fees ⁽²⁾		140,700		25,521

Tax Fees ⁽³⁾		174,892		97,930
Other Fees		-		-
Total	$	1,134,593	$	944,078