Betsy Z. Cohen - Chief Executive, Officer, Director Frank M. Mastrangelo – Pres and Chief Operating Officer Martin F. Egan – Chief Financial Officer –:

James Abbott – Friedman, Billings, Ramsey & Co. Matthew Kelly – Sterne, Agee & Leach Albert Cuber - Fidelity Co. Inc.

Good day ladies and gentlemen and welcome to the Fourth Quarter 2007 The Bancorp Inc. Earnings Conference Call. (Operator’s Instructions) Now, let us turn the presentation over to your host for today’s call, Mr. Andres Viroslav, Director of Corporate Communications, please proceed.

Good morning to everyone, thank you for joining us today to review The Bancorp Inc. Fourth Quarter and Fiscal 2007 Financial Results. On the call of me today are Betzy Cohen, Chief Executive Officer; Frank Mastrengelo, President and Martin Egan, our Chief Financial Officer. This morning is call is being web cast on our website www.thebancorp.com. There will be a replay the call beginning at approximately 1 pm eastern time today. The dialing number for the replay is 888-286-8010 with the confirmation code of 492-14952, before I turn the call over to Betsy, I would like to remind everyone that when using this conference call, the words: believes, anticipates, expects, and similar expressions are intended to identify forward-looking statements within the meeting of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties, which could cause actual results that differ materially from those anticipated or suggested by such statements. For further discussion of these risks and uncertainties, please see The Bancorp Inc. filings with the SEC. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date here of. The Bancorp Inc. undertakes no obligation to publicly release the results of any revisions to forward-looking statements, which maybe made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Now, I would like to turn the call over to Betzy Cohen.

Welcome to all of you, we are delighted to have you joined us today for our fourth quarter call. I would like to start with what I think or the high points of the year in the quarter, focusing first on the fact that in Fiscal 2007 Earnings, that net income increase by 15% over Fiscal Year 2006. Loans increased by approximately 21% to about a billion three, but I think it is important to stop at that point and look at the categories, in which the increases were felt. Residential construction lending on a year-to-year basis are traditional lending and we have done it here for many, many years was up approximately 10%. While the balance with the loan category, primarily in the C&I area and commercial mortgages were up about 30%, this diversification effort away from residential construction lending began about 18 months, 24 months ago. But, it certainly takes time for us to build and to have balance sheet impact, if you take a look at the balances for the last three quarters in the residential construction lending area and I note that is an area of great concern. They have essentially been flat down a little bit, but basically flat and the statistics that we tracked that has provided us with some insight into the turn-over despite dollar amounts, the properties that are under agreement of sale and we have been running between 20% and 25%. We track it weekly, so obviously it varies from time to time of the outstanding are represented by properties under agreement of sales, so the movement of the portfolio remains. We are looking forward to what we believe would be a reduction in that total amount of residential construction lending outstanding, perhaps starting at the end of the second quarter as we are not replacing loans with new construction lending, but rather the delivery of homes is preceding a pace. In this particular area and just very recently, we have seen signs of purchasing, that are apparently are not present in other parts of the country or at least within our footprint, we are seeing that. So, we remain optimistic as to the performance of that portfolio. As of November 30, 2007, we added stored value solutions by acquisition. It came at the end of the quarter, so what you see is a little bit more expense than there is benefit, during that quarter. Non-intrinsic expense expanded by million dollars in the months that they were with us and that represents an increase in our non-interest expense, which is difficult to non-interest income because there are some time for a start-up that is required. The other additional expense that was reflected in the quarter was the increase in the provisioning for loan loss. It was increased on a quarterly basis from $850,000.00 to $3.2 million. It reflected our view of essentially two loans that we felt were appropriately accounted for as a loss within and so, we felt that we should take that loss now, whether there would be recoveries. I am not prognosticating, we think that there will be some recoveries, but at the moment, we felt that it was best to address to front to link. Only $200,000 of the charge was related to a construction loan and it was the last piece of a disposition, which we began two quarters ago and have to take through foreclosure, had a purchaser and then, actually sold the property and had expenses that we had anticipated. Non-performing assets or non-performing loans, the increase is represented primarily and probably as much as 90% by first mortgage loans that are in the process. Residential first mortgage loans that are in the process of resolution at one place or another and where we will work toward disposition of those properties and/or the restoration of current payments, as in the case of one of the, over the course of the next 90 days. Since September 18 and through the fourth quarter, there were three rate decreases, totaling a hundred basis points. Two of those came relative, in the middle and the end of that fourth quarter. It takes us approximately, 60 to 90 days to completely rebalance the portfolio, 65% of approximately of our portfolio is floating 35% fixed and there are liabilities, which do not re-price immediately. During the first quarter, we will have the re-pricing for example; of $150 million in CD, our highest costs of fund and anticipate that they will be reduced in cost by approximately 120 basis points, so that is the last piece of the cycle. Of course, we will then have the absorption of the further rate creases, so that you may see during the firs and the second quarter, some pressure on the margin. We hope to some extent it will be offset by the low cost deposits that we are experiencing in two areas. One, as a result of our stored value acquisition. At the time of acquisition, the deposits that were transformed that now have an interest rate just over 1% on average, were $160 million that was increased in January to about $180 million and we hope to see further increases as the business grows. The second stream of low cost deposits is a result of our health savings account programs, those deposits as of now are about $120 million about double the amount that they were last year at this time. So, we do have an excellent low cost deposit growth and re-pricing opportunities within the highest cost deposits, which we believe over the course of 60 or 90 days as I said will rebalance at our goal of approximately 400 basis points. But, again as I said maybe slightly lower during this quarter, during the rebalancing periods. If we take a look at transaction accounts for December 31, 2007 you will see there $865 million as suppose to $611 million at the end of the 2006. Significant growth and it means that we are able to reduce our time deposits from $457 million to $412 million. If you take, a look at the average loans outstanding and I think that is probably the best way to do it. You will see again, what I was talking about before the difference in the growth rates among the various categories of loans. But, you will see that total loans grew during the course of this year, from on average during the fourth quarter of last year a billion 064 to a billion 286. We continued to grow our deposit programs significantly and to manage our loan portfolio. We think appropriately to talk about our private label businesses. I am going to ask Frank to talk for a few minutes.

As Betsy has mentioned we have seen continued growth in our health savings account portfolio our year-over-year increase in deposits has been significant and even our quarter-to-quarter growth has been significant. We actually ended the year with just about $92 million in deposits, which were up a little over $10 million from the previous quarter, but as Betsy mentioned today, as of today we have slightly over $120 million in healthcare deposits. We are seeing continued strong funding, our health care accounts that we had on balance sheet for sometime and expect to continue to see that we are seeing a very strong season for account openings there also. And, our private client group segment on a year-over-year basis being freezed, outstanding loans by 21%, continued to see escalation of commitments quarter-over-quarter, commitments in that segment are up $11 million or 4 1/2 % from last quarter. 18% year-over-year and we are seeing continued growth in our Safe Harbor IRA Business, as a segment of our private client group. We ended the year, they are with $32 million have increased that, actually in the fourth quarter up to $37 million as a current number and that was beginning at the starting point of zero in the beginning of 2007. So, that is a business fine that we fully grew during the calendar year. Merchant processing, we continue to see growth there n year-over-year basis. Our volume has increased almost 13% and believed we will see continued opportunity to grow that business segment. And lastly, our remote deposit capture business continues to grow at a very, very healthy pace. We processed an increase of 44% in transactional volume quarter-over-quarter and processed almost $200 million and deposit transactions in the fourth quarter and almost $600 million in total deposits for the calendar year of 2007.

I think it is important to underscore the remote deposits, gathering function is one of the things we do naturally, as a bank without branches and the increase is from a $160 million to almost $600 million in processing in that methodology or its distribution mechanism and therefore gathering core deposits to us. I think we will be more and more significant and certainly adds to what will be an ongoing efficient operation. We have recently added in the remote deposit area, electronic safe as an additional mechanism for gathering deposits. And, we are beginning to see real traction with chains of restaurants and other cash dependent organizations. I think the only last statistic in that regard that I would like to highlight is that during Q4 with the addition of stored value systems, which I think many of you know is the secondary service largest of prepaid card, open loop issuer and what I think is the largest nationally gift card programmatic issuer. We continue to expand our deposit gathering within high growth segment of the industry. The addition of those deposits at the end of ’07 meant that as of that date our affinity programs represented 48% of our core deposits and over a quarter of our total deposits. I think with that information, I am going to pause and ask whether there are any questions.

(Operator’s Instruction) Your first question comes from the line of James Abbott with Friedman, Billings, Ramsey & Co. James Abbott – Friedman, Billings, Ramsey & Co.: I have a couple of questions on the credit quality fund and I was wondering if you can give us a sense of the commercial loan that we are charged off and what they were by type. Are these true C&I loans, were they are more commercial real estate?

No, true C&I loans, one was a receivables loan, in which we had spoken on a call James about this I believe. I am going to estimate, but I believe it was in June, at the end of the June quarter. One was is a receivables loan, in which fraud appeared and so we are making an estimate of our on-going recovery and we said we would look at this again at the end of the year, which we did and this is our best guess. The second was a loan to a corporate entity, in which the business itself, which was in the music publication business. He lost a contract and therefore, had less ability to repay, and so we decided even there are recoveries down the road that this is the time to write it off. James Abbott – Friedman, Billings, Ramsey & Co.: Okay, can you give a sense as to dollar amount for each one of those that that was incorporated in the charge-off number?

They were approximately $1 million each, it might have been a little over, it might be a little under, but approximately. James Abbott – Friedman, Billings, Ramsey & Co.: Of the receivable loan, is there are a lot left or you have most of it off or...

We have ripped it most of it off, we see in the payment pipeline, the ability for it to be reduced further and we will look at it again, probably March 31 or June 30. We will see which is appropriate. James Abbott – Friedman, Billings, Ramsey & Co.: And, as receivable are from?

From food companies, food distribution company. James Abbott – Friedman, Billings, Ramsey & Co.: Larger corporation?

Absolutely. James Abbott – Friedman, Billings, Ramsey & Co.: Are there any personal guarantees, or any other ... I am trying to get it under writing a little bit on these loans.

Sure they were personal guarantees from the founder of the company, with the family company. Going back several generations, I am going to say two generations and they brought it to the business as second and third person. There are any guarantees from all of these people. James Abbott – Friedman, Billings, Ramsey & Co.: Okay, well there is a possibility for some recovery in the future.

Yes, but I am not promising. James Abbott – Friedman, Billings, Ramsey & Co.: Okay, and is it fair to suggest then that this is not a run rate, in terms of charge offs and this was ...

I agree with you that this is not run rate. James Abbott – Friedman, Billings, Ramsey & Co.: You have sense, because a non-performing asset also went up, as well.

Yes, I think I mentioned earlier in the conversation that those are primarily and very substantially of residential first mortgages that are either delinquent or we are waiting ... some and I do not remember what the life was been that intervened, but you may remember, it occurred to us once before. In my mind, if somebody is late, death is too good, but I am not sure that these people die, so they are delinquent and I believe in the process of bringing occurrence. I do not know what the disruption was and in the second case we are in the process of taking the property of approved foreclosure and are pretty firm on an agreement or letter that have been intended this point of sale. But, it just has to come through the process. James Abbott – Friedman, Billings, Ramsey & Co.: And, the loans of values are those --

Were we recover a $110, is that what you are asking? James Abbott – Friedman, Billings, Ramsey & Co.: I guess that is another way of asking.

Yes, I mean on the once that are delinquent and where we believe that it is just an interruption and not a consistent pattern. I think the properties are fine, I think we will recover and there always expenses so; we will recover most of what, if not all on the sale of the property that we are taking through for foreclosure. James Abbott – Friedman, Billings, Ramsey & Co.: Maybe, I will just go back at the end of the call, if there is nobody else ask question. My final question is kind of more on house keeping issue, but on a fee income line item. Is there a run rate that you would help us out with there for the fourth quarter, because that was a little bit higher than what we expected for the fourth quarter, given the amount of time that store value solutions was embedded in the company. Are there any non-recurring items in that line, in the fourth quarter?

I think if there are some fourth quarter items, which has a little different response, remember the fourth quarter is always a higher quarter for us, in terms of non-interest income. So, that run rate is really a seasonal business and that will be true even to a greater extent restored value. It only includes a little bit of stored value, and so I would like to just take a pass on saying that that is a run rate or not a run rate.

Your next question comes from the line Matthew Kelly with Sterne, Agee & Leach. Matthew Kelly – Sterne, Agee & Leach: Yes, just a follow-up on couple of those questions, I guess the tangible solutions came in a little bit more significant, looks like they must have been a hired good will, peace booked with the deal and yet you get 32% tangible delusion of this transaction. I know that in the past two previous calls, you indicated pre-significant accretion levels from the stored value transaction.

Nobody could have accretion in a month. Matthew Kelly – Sterne, Agee & Leach: I understand I really want to know forward and ..., you need a lot of earnings accretion and make that deal work.

And, were you accounting for ... there was $4 million goodwill on the books already. Can it be the difference you are looking at? Matthew Kelly – Sterne, Agee & Leach: What was the final goodwill book for the transaction?

The goodwill’s approximately $48 million and with customer list intangibles is going to be around $10 million. Matthew Kelly – Sterne, Agee & Leach: Okay, well that is the piece that is different, because just going back to the last transcripts, we are looking about 50, 55, so that is the one that came in a little bit higher then.

I think we are looking at 55 and it did come in at 58. It is really hard to make that estimate, before you actually get… Matthew Kelly – Sterne, Agee & Leach: I guess, more important than that specific question, deal accretion going forward, building off of James question there on fee income. I mean the two big pieces here, you know that $160 million in deposits at 1%, but the fee income piece is also the second part of the puzzle here to make it still work and so, help us understand what fee incomes look like in Q1. As we think about your ability to meet some of those deal accretion numbers that have been provided over the last two quarters.

Sure, I do not think that we have any different view with the deal accretion items. I think that Frank can talk to the non-interest income.

Mat, I think that is exactly right, we do not expect the matrix of the deal to be changed in any manner, the range of earnings impact, I think if you recall we gave a high and low range of that impact being somewhere in the 21% to 41% range and had mentioned that we expected the impact to land somewhere in the middle of that as we would take down deposits overtime and lend them out. We believe that is exactly what will occur across calendar year 2008. The impact specifically from the non-interest income last year was running in the range of $2 million to $2.1 million a quarter was it growing year-over-year in almost 40% clip and we expect that to continue to play out through calendar year 2008. Matthew Kelly – Sterne, Agee & Leach: That was $2 million to $2.1 million per quarter for SVS you said?

I believe that is correct. Matthew Kelly – Sterne, Agee & Leach: Okay, and what was the expense run rate, that they are running at in 2007?

We will get back to you on that number; I do not think that was the number that we brought with us today. Matthew Kelly – Sterne, Agee & Leach: Okay, I guess are there any cost savings opportunities you have identified?

Well, the only cost saving that we see at the moment and I do not think that we went on this suggesting that there any cost savings, other than those on as a result of the lower cost of deposits and the increased business being done. Expanding our own base businesses, such as health savings account to there 50% of their portfolio, that is payroll oriented. But, we did speak about the fact that there would be a range in accretion and it has to be at the low end of that range for the six months. Because, essentially the only impact you will see would be the repayment of the highest cost deposits as they come down to the 1% of the benefit from lending out those funds incrementally. We will see in the second half, so the accretion rate will increase, but not until Q3 and 4. Matthew Kelly – Sterne, Agee & Leach: Okay, so you mean the magnitude of the margin compression that we saw this quarter in 25 basis points should not be repeated then.

No, and well in the sense that it should not be repeated below the level at which it was yes. But, remember we have had another rate decrease during this quarter. We rebalanced, we think pretty quickly, but there is as I gave you an example some slide in that $150 million in CDs. So, we re-price down 120 basis points, but not on day one of the quarter. So, you will have a little bit of like what we have looked at during the month of January is what is the net interest margin was and on an estimated basis it is 375, so that is before we get the benefit of the down check in a re-pricing the CDs. You know, if there is a little bit of room in there, yes, to take up for the quarter, we think yes and it has been good loan production month, but we are not through the quarter yet. Matthew Kelly – Sterne, Agee & Leach: Okay, and then, just last question on the construction portfolio; there have been kind of any restructured or renegotiated types of terms on the loans. I mean, it sounds like you continue to believe that portfolio is holding up okay, just anymore detail there would be helpful.

Yes, I would say not really, which does not mean it might have been taken some 90 days longer to sell the houses, but I just do not think there is still anything major that shifted in, in terms of a re-structure. I think that the obviously the down will take an interest rate and makes it easier for the borrowers to make payments and that is a helpful thing it makes it easier for the buyers to get mortgages at a lower rate. And, that is a good thing, so we began to see some up-take in momentum, in terms of sales. So, I think all and all that is an imbalance portfolio. Matthew Kelly – Sterne, Agee & Leach: Okay, we heard comments in the beginning and just indicated that portfolio will be coming down, in terms of dollar amount or percentage, composition of the portfolios.

I think you have seen that we kept it relatively flat over the last three quarters, really the “ins and outs” of it, it has not buried more than $10 million and that is really the result of how when the health pay offs or when you make an advance. So, it is essentially a flat portfolio. I think as I said at the beginning of the call about a year and a half ago. We began to strengthen our lending core, in terms our loans and focus more on income producing commercial real estate and so to the extent that we began our diversification early and securities back loans, you are beginning to see the rebalancing of the portfolio. I do not think we are exiting the business. We are just looking at business with more choice at side as we should be and so I would not be surprised to find that, that remains flat for a quarter or two and then trends down on a dollar basis and as the portfolio grows, reduces as a percentage.

Your next question comes from the line of Albert Cuber with Fidelity Co. Inc. Albert Cuber - Fidelity Co. Inc.: Out of the $1.3 billion of deposits at the end of ’07, how much from affiliated company would impact?

I do not have that number, right in front of me Albert, but I will get it to you off line. Albert Cuber - Fidelity Co. Inc.: Okay and also has the buy back program started?

No, it has not. We were watching our calculations on being well capitalized in terms of the SVS acquisition and once that all settles down, we will be able to take another look. Albert Cuber - Fidelity Co. Inc.: Okay, idea that on line one, it may be starting.

No.

Your next question comes from the line of Bryan Hackler with Kennedy Capitals. Bryan Hackler - Kennedy Capitals: A lot of my questions that has been touched on, but expanding a couple. Going back to the non-performing assets, I know you said that 90% plus are first residential mortgages. What was the average LPV on those, that origination, roughly?

I do not want to give it to you without having it - I do not have that number in front of me. Yes, I will get that for you and you are asking at origination, I will absolutely get that for you. Bryan Hackler - Kennedy Capitals: Can I get an update on your private label banking business, maybe you touched on this and I missed it, what the deposits looked like in that segment, maybe last quarter and the end of this quarter.

Sure, I think that the summary numbers, I did touch on it and I would be glad to get you more details if you would like. But, the summary numbers are that at the end of Q3 of 2007, private labels, core deposits represented about 30% of our core deposits and as of the end of Q4, they represent about 48%. As of the end of Q3, they represented about 14% of total deposits and the end of Q4 about 26%. Bryan Hackler - Kennedy Capitals: Okay, great I appreciate that.

There are two drivers, one being, our value systems and the other being health care. Bryan Hackler - Kennedy Capitals: Okay, I am sorry to jump around but back to the NPAs again, what kind of your average first home mortgage – I mean is it a couple hundred thousands. I was trying to get a sense of how many mortgages this may represent.

No, I think that these are all jumbos, remember that is essentially what we would do on our balance sheet for people, because we are doing relationship lending. Bryan Hackler - Kennedy Capitals: Okay, so over the 417 threshold on mostly on average?

I would say over a million on average rate, because otherwise it would not make sense to come to us. Bryan Hackler - Kennedy Capitals: Okay, that is it for now, thanks.

You have a follow up question from the line of James Abbott with FBR Capital Markets. James Abbott – Friedman, Billings, Ramsey & Co.: You did build the reserve for loan ratio this quarter, I was wondering if you could give us a sense whether you changed some factors in there or that is a function of loans that are moving to non-performing status and then, as you look out into the year I would imagine that every company would be building reserves. It is just some of the other side of the table that is a little bit harder to project exactly how fast it will go if do not know what is the formulas are. Have you looked out and you have a sense of to where they might be trending towards. You think it will be a hundred basis points at the end of the year?

I do not think that there will be a hundred basis points, but I think that they will be higher it will be higher. James Abbott – Friedman, Billings, Ramsey & Co.: And, it is that based on incoming non-performing assets, is that based on economic factors?

I think it is a macro economic analysis. James Abbott – Friedman, Billings, Ramsey & Co.: Okay, so you would not expect non-performing assets to increase going forward.

No, I hope not, no. James Abbott – Friedman, Billings, Ramsey & Co.: One other question that I had was on the prime based loans. What percentage on the loan portfolio is variable rate, prime based or libor?

The total variable is it varies between 65% and 68% pretty consistently. James Abbott – Friedman, Billings, Ramsey & Co.: The typical light of the CD is?

Five to six months.

Six months. James Abbott – Friedman, Billings, Ramsey & Co.: Okay, so you might have actually more compression on the margin, because of the strong rate cuts than in the – So the January number of 375 is probably not reflective of what it will be for the quarter, because of the mismatch on timing there for the quarter.

What we are saying is that we have 120 basis points, which is an excess of the rate cut on certain portions of the deposit portfolio. So, it picks up a little bit of a slack, so we are estimating for you that we can sustain the 375 over the quarter by at the end of which time that being the end of March, we would have caught up, so to speak, in terms of balancing the portfolio. James Abbott – Friedman, Billings, Ramsey & Co.: Okay, in the March compression in the quarter, the 25 basis points, have you identified where the primary source of that was?

In which quarter? James Abbott – Friedman, Billings, Ramsey & Co.: The fourth quarter.

In the fourth quarter, I think it was the timing of loans, on an average basis, which is how we have to measure it; loans for the quarter were only up to $25 million. So, the timing of the loans, the lack of having them on the books for the whole quarter, combined with the rate changes, I mean it is like a three ring circuit.

You have a follow-up question from the line of Matthew Kelly with Sterne, Agee & Leach. Matthew Kelly – Sterne, Agee & Leach: I was really trying to figure out what is the next quarter going to look like here and the expense side and loose it unclear on kind of what is driving the hard and anticipated fee income items during the quarter at $3.3 million. With only a quarter worth of SVS, would it be fair to say that 1 month of SVS on the expense side could result in the full quarters of expenses of $11 million for the fourth quarter of ’08, is that right?

I think that is a little high, but we will get back to you with the number. Matthew Kelly – Sterne, Agee & Leach: It is kind of $10 million or $11 million bucks then.

I mean you can use it, but we can get back to you with a more precise number, if you want. Matthew Kelly – Sterne, Agee & Leach: That would be helpful.

Your next question comes from the line of Michael Collins with the Nova Capitals. Michael Collins - Nova Capitals: I am just wondering. I was just trying to sort of put all the puts and takes together and try to come and get a sense of – you know, kind of where you see the run rate shaking out.

On what ratio? Michael Collins - Nova Capitals: More sort of overall earnings on a quarterly basis, where you think you will kind of end, kind of after March, giving all the sort of movements in the margin, where you think it all add out to. You know, giving sort of margin and then kind of your outlook for credit being, you know, reasonable off but nothing, catastrophic, it does not sound like--

Well, I can give you a data point, but it is does not lot of depth to it, that during the month of December, which we did experience at 25 basis point down. But, in which we had for the full month, the $160 million in relatively lower price additional deposits and in which the loans began to roll on, which they were late and sort of the low average. In fact, they got there; – for the month of December it was four even. We are working our way back to the 400 basis points spread, it is not as steady as we would like, because there are into announcing small timing differences impact. Is that an answer to your question? Michael Collins - Nova Capitals: That sort of framed some margin and I think you kind of framed the income – or let me phrase this differently. Does the 20 to 40 cent benefit from the recent acquisition include the margin benefit or is that just reflective of the income that it was created?

No, I think it is aggregate of both and I said further that in the first half of the year, we expect that we would only be experiencing the lower ends of that range.

At this time there are no further questions, I would now turn the call back over to Ms. Betzy Cohen for closing remarks.

Thank you, I think with all of your good questions, I really do not have anything to say.