Betsy Z. Cohen – Chief Executive Officer Frank M. Mastrangelo – President, Chief Operating Officer Martin F. Egan – Senior Vice President, Chief Financial Officer Andres Viroslav – Director – Corporate Communications

James Abbott – Friedman, Billings, Ramsey & Co. Andy Stapp – B. Riley & Company Matthew Kelley – Stern, Agee & Leach Eric [Swergeld] – [Groover] & McBain

Good morning, ladies and gentlemen, and welcome to the Q4 2008 Bancorp, Inc., earnings conference call. My name is Becky and I will be your coordinator for today. At this time all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of this conference. (Operator Instructions). I would now like to turn the presentation over to your host for today’s call, Mr. Andres Viroslav, Director of Corporate Communications. Please proceed.

Thank you, Becky. Good morning and thank you for joining us today to review The Bancorp’s fourth quarter fiscal 2008 financial results. On the call with me today are Betsy Cohan, Chief Executive Officer, Frank Mastrangelo, President, and Marty Egan, our chief financial officer. This morning’s call is being webcast on our website at www.thebancorp.com. There will be a replay of the call beginning at approximately 12:30 p.m. Eastern Time today. The dial-in for the replay is 888-286-8010 with a confirmation code of 52288789. 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 meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties which can cause actual results to differ materially from those anticipated or suggested by such statements. For further discussion of these risks and uncertainties please see The Bancorp’s filings with the SEC. Listeners are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. The Bancorp takes no obligation to publicly release the results of any revisions to forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect their cause as unanticipated events. Now I would like to turn the call over to Betsy Cohen. Betsy? Betsy Z. Cohen: Thank you, Andres, and thank you all for taking the time to join us today. The fourth quarter results for The Bancorp show a loss for the quarter and a loss for the year. These losses are due in part to the choppiness of the securities market and the deteriorating economic factors at work in the country. On the securities side during the fourth quarter we experienced a $1.9 million loss, after-tax loss or charge, as a result of marks taken in response to both the liquidity and the economic factors at work in the marketplace as it relates to the value of securities. We’ve taken the opportunity during the course of this year to increase the allowance for loan and lease losses from a coverage ratio of 0.8 at December 31, 2007, to a coverage ratio of 1.2 at December of 2008. The coverage has increased despite an increase in the loan portfolio itself during the year of approximately 13%. One of the things that gives us a moment of pleasure in a world in which there are not many moments of pleasure is what we think to be a validation of our deposit strategy. During the course of 2008 we’ve seen transaction accounts grow by 32% and we have been able to increase our penetration in both the prepaid area together with our acquisition/reacquisition we made in November 2007 of stored value solution and in health savings accounts, which as you know has been a major line of business for us over the course of the last several years. I’m going to ask Frank Mastrangelo just to give you some information around those two lines of business and then we’ll come back to discuss the rest of the balance sheet. Frank? Frank M. Mastrangelo: Thank you, Betsy, and good morning, everyone. In the health care line of business we increased health savings accounts, the number of accounts, almost 72% year over year adding over 70,000 accounts the end of December 31st, 2004. Average balances of those accounts increased more than $400 year over year and we grew deposits in that business segment to $211 million in total deposits, up 133% from the end of calendar year 2007. The stored value solution segment of our business we ended the calendar year with almost $381 million in total deposits, up 136% year over year, and I think more importantly we actually decreased the cost of funds of those deposits from 179 basis points for the fourth quarter 2007 down to 56 basis points in the fourth quarter of 2008. Along the same lines in the health care line of business the cost of funds in that line came down a little over 100 basis points over that 12-month period. Betsy Z. Cohen: Thank you, Frank. I think that together with our ability as renewals and other events occurred within our loan portfolio has enabled us finally over the course of the fourth quarter to increase our net interest margin from 3.28 in the third quarter to 3.69. I just caution that clearly with a major influx of deposits and the time that it takes to fully utilize those deposits we hope to, but are not certain of, maintaining that increase in the net interest margin. Over each of the next four quarters we think that we will be very close to it, but we’re not sure exactly whether we will improve it again in the first quarter. On the loan portfolio, we are in an area geographically and our loans, community bank loans, are in an area that surrounds Philadelphia in the nine-county area. To some extent it’s an area in which there is a wider range of growing businesses than in some of the other areas of the country. Education, hot farma, hospitals, etcetera. I think the stimulus bill will be supportive of those areas and continue that growth. On the other hand, the depth of the contraction in economic activity across the country certainly can’t be escaped in the mid-Atlantic or really, not the whole mid-Atlantic for us but that nine-county area. The greatest concern that we have is not actually in the value of or decrease in value of the properties that underlie our loans because the decreases have been manageable but on the residential side in the velocity of sales and we’re hopeful to see a stimulus in economic activity increase the number of sales, which would be an enormous benefit to us. During the quarter we decreased non-accrual loans for quarter to quarter from $13.6 million to $8.7 million, taking into our portfolio a piece of OREO. One piece of OREO that we have we’ve disposed with others as they’ve come in. Which has been a long time in the process. We, I think, are optimistic that in the next several quarters we will be able to dispose of that property. I think that I’m going to stop there and ask for questions. Becky, if you would open it up to questions now I would appreciate it.

Absolutely. (Operator Instructions). Your first question comes from James Abbott – FBR Capital Markets. James Abbott – Friedman, Billings, Ramsey & Co.: Hi. Good morning. Questions on a couple of areas. Trying to understand that on the deposit side the end-of-period deposits [inaudible] were up sequentially but the average was down. The average was down $60 million or $70 million. Any insight into what the trends are that are going on there? Betsy Z. Cohen: Well, a lot of our businesses are seasonal. We have a peak right at the end of the third quarter and we have a peak right at the end of the fourth quarter. They’re not necessarily one higher than the other. So since the averages are back end weighted in the quarter, at least in the fourth quarter which is in part of retail cycle, and not so much in the third quarter the averages might have been greater. And different lines of business. James Abbott – Friedman, Billings, Ramsey & Co.: Okay. You acquired or developed a business relationship in stored value solutions, I think, that was a very large relationship last quarter. There is some seasonality to that. Can you go through what that sort of looks like on an annual basis? Betsy Z. Cohen: Sure. There’s seasonality which peaks at the end of the third quarter, has a pick up in the first quarter, and then a second dip through the end of the second quarter and builds up through the third quarter. James Abbott – Friedman, Billings, Ramsey & Co.: Okay. And can you tell us the nature of that business? Is it retail oriented? Betsy Z. Cohen: It’s a business in which items are processed for a significant number of institutions. James Abbott – Friedman, Billings, Ramsey & Co.: Okay. All right. That’s helpful. And on the credit front, well, actually, one more question on a margin-related topic. Pet funds sold close to $110 million at this point and I understand there will be some runoff in that large deposit relationship we just talked about. What’s your appetite for investing that $110 million, some portion of that $110 million pet fund, and if so what sort of maturities do you think you’ll go into? Betsy Z. Cohen: Well, I think, are you talking about investment in securities? James Abbott – Friedman, Billings, Ramsey & Co.: Yeah. I wouldn’t imagine you’d put it into loans. Betsy Z. Cohen: Yeah. No, no, no, no. I was just clarifying for the conversation. I think that we do have an appetite. We think that we would like to season the relationship a little bit more to be able to get our arms around what the exact incremental pieces are. So I think we would have to be at the short end of that cycle, maybe in the two-year range to start, and then as we gain more confidence and visibility and insight we perhaps could extend that. James Abbott – Friedman, Billings, Ramsey & Co.: Okay. So not looking for a lot of increase in the margin coming from that money being invested then in the near term. Is that correct? Betsy Z. Cohen: Well, anything would be an increase in margin out of our pet fund. So I think certainly at a two-year point, depending on the security, you can get some increase. James Abbott – Friedman, Billings, Ramsey & Co.: You don’t anticipate you’ll invest that in the next one or two quarters in [inaudible]? Or you do? Betsy Z. Cohen: I am not committing to invest that. James Abbott – Friedman, Billings, Ramsey & Co.: Okay. We’ll let it be an upside surprise then. How’s that? Betsy Z. Cohen: Right. Everybody needs one. In our business, line of business. Right? James Abbott – Friedman, Billings, Ramsey & Co.: Okay. And then on the, maybe getting into credit, is the loan or loans, maybe it’s multiple, that are 90 days past due and still accruing, can you tell us about the nature of that and what the collateral of the LPVs and why you’re comfortable with hit on the non – Betsy Z. Cohen: Generally if we have loans that are 90 days and non-accruing, non-accruing, 90 days and accruing – I’m sorry, I misspoke – it’s because they are subject to agreements of sale or subject to some other element of takeout that has just not matured within the appropriate period of time. James Abbott – Friedman, Billings, Ramsey & Co.: Okay. And are there any specific reserve in the return to loan, reserve ratio that we need to consider that might be associated with a loss on that credit when the sale takes place? Betsy Z. Cohen: No, I think that they’re looked at on an individual basis. James Abbott – Friedman, Billings, Ramsey & Co.: So you’re not, are you anticipating loss on that loan or loans when you sell it? Betsy Z. Cohen: No, we would not be accruing if we anticipated loans. I’m sorry; if we anticipated loss. James Abbott – Friedman, Billings, Ramsey & Co.: Correct. Okay. Betsy Z. Cohen: Yes. James Abbott – Friedman, Billings, Ramsey & Co.: Okay. So there’s not a substantial amount of the reserve that’s allocated to that loan, then. Betsy Z. Cohen: No. James Abbott – Friedman, Billings, Ramsey & Co.: You need to think about backing out. Betsy Z. Cohen: Okay. James Abbott – Friedman, Billings, Ramsey & Co.: I’ll let others ask questions. Thank you for your time.

Your next question comes from Andy Stapp – B. Riley & Company. Andy Stapp – B. Riley & Company: Good morning. Do you still have offers for the home that went into OREO? Betsy Z. Cohen: Yes. Andy Stapp – B. Riley & Company: But you think it might, the colour you gave in your discussion in the call is that it might take several quarters to dispose of this? Betsy Z. Cohen: Well, I’m just trying to be realistic about the market. Andy Stapp – B. Riley & Company: Okay. Betsy Z. Cohen: You know, to bring it to conclusion in terms of the offer and the acceptance and then to have an appropriate period for closing could take us into the second quarter. Andy Stapp – B. Riley & Company: Oh, okay. I thought you were talking several quarters. Okay. What did your 30 to 89 delinquencies stand at year end? Betsy Z. Cohen: I think you’ll see that number in the cole report and I don’t have it right in front of me. Andy Stapp – B. Riley & Company: Were the trends favourable or unfavourable? Betsy Z. Cohen: I think the trends were unfavourable in the sense that they were higher. I think that again a significant portion of those loans are in the process of being resolved through sale or another mechanism and therefore should cause a decrease in that number in the first quarter. Andy Stapp – B. Riley & Company: Okay. Can you give us some colour on what sign you’re seeing on the commercial real estate front? Betsy Z. Cohen: I think we have seen a relatively steady state. We have not seen deep pressure on the commercial real estate front. Many of our commercial real estate loans are loans that are occupied by owners, not individual owners but by business owners. So we really haven’t seen a huge amount of pressure yet on those loans. Andy Stapp – B. Riley & Company: Okay. Could you refresh my memory where stored value solution deposits stood at September 30th, if you have that handy? Betsy Z. Cohen: At September 30, I don’t have it handy. Frank M. Mastrangelo: Yeah, at September 30th they were $475 million. Andy Stapp – B. Riley & Company: Okay. And the OTTI charge, was that on the RNBS you have? Betsy Z. Cohen: Was it on the – No. It was not. We don’t really have any RNBS. Andy Stapp – B. Riley & Company: I thought you did have residential CDO, like $15 million or so. Betsy Z. Cohen: Well, it’s not a, well, it’s an ABS. I would differentiate it from an RNBS. It’s an ABS CDO and yes, it did occur on that. I’m sorry. I misunderstood your question. Andy Stapp – B. Riley & Company: Okay. Thank you.

Your next question comes from Matthew Kelley – Stern Agee. Betsy Z. Cohen: Hi, Matt. How are you doing?

Your line is open, Sir. Please check your mute function. Matthew Kelley – Stern, Agee & Leach: Hello? Betsy Z. Cohen: Maybe he changed his mind. Matthew Kelley – Stern, Agee & Leach: Are you there? Betsy Z. Cohen: Oh, I’m sorry. Yes, we’re here. Matthew Kelley – Stern, Agee & Leach: Sorry about that. Just curious on the leveraging of your TARP proceeds, the $45 million and the $2.3 million dividend associated with that in terms of investing to kind of offset that dividend expense. How much securities growth should we anticipate? Betsy Z. Cohen: Well, you should anticipate some securities growth, but I think that we’re hopeful that we’ll be able to do what we believe is supposed to be done with the TARP funding and that’s to increase our loan portfolio to some extent as well. We just received the funds about a month ago and so we’re still in the process of parceling them out. Matthew Kelley – Stern, Agee & Leach: Okay. On the expense front how should we be thinking about expenses for 2009 versus the full year of $46 million? Maybe discuss just your FDIC deposit premiums and maybe just total expense growth we should be looking for. Betsy Z. Cohen: Marty, do you want to talk to that? Martin F. Egan: Sure. I think from an expense standpoint we’re taking a hard look at controlling and trying to see here we can make reductions. Matthew Kelley – Stern, Agee & Leach: And what is the dollar amount of the FDIC premium increase? Martin F. Egan: We haven’t, I can get it for you. I don’t have it in front of me, but it will go up based on our participation and transaction guarantee. Matthew Kelley – Stern, Agee & Leach: Okay. And then a question on the non-performance. I know there was a bankruptcy recently, Bensalem Buffets Realty, $3.3 million mortgage that you guys had. Was that included in your $8.7 million non-accruals? Betsy Z. Cohen: Yes. Matthew Kelley – Stern, Agee & Leach: It was. Okay. And the bankruptcy docket indicated there was a value of $4.5 million in the property. Is that – Betsy Z. Cohen: No, actually the franchisor is identifying entities from its stable of franchisees to take over that property. Matthew Kelley – Stern, Agee & Leach: Okay. So on the $3.3 million loan what kind of a loss if any do you anticipate? Betsy Z. Cohen: I think we don’t anticipate any. Matthew Kelley – Stern, Agee & Leach: Okay. Okay. All right. Thank you very much.

Your next question comes from Eric [Swergeld] – [Groover] and McBain. Eric [Swergeld] – [Groover] & McBain: Thank you. For those of us who are generalists as opposed to bank analysts, looking forward at the potential outcomes here under the new administration, of course on purely theoretical terms, if they do create a bad bank what does it do or not do for you? And then if they come up with or increase the TARP availability is that something you would take at this point? Give your amount of deposits that you have and the amount of TARP money that you’ve already taken and the fact that you stated that you might need some time to put it to work that if there were more TARP available you’d be likely to turn it down. Thanks. Betsy Z. Cohen: It’s always so hard to turn down capital, isn’t it? But I think that we feel comfortable where we are, if I might put it that way in terms of our capital ratios. Certainly with respect to our liquidity, which we think is a tremendously important aspect of bank security or safety in these days. So I said we would look very carefully at another round of TARP financing because we do think that we don’t want to take more capital than we can use effectively. I think that your first question, which related to the proposal now being talked about of having a bad bank and/or having guarantees on further losses of assets within the banking institutions, is really a hard one to respond to in our particular case simply because although the general outline has been put forward it’s really the specifics of the guarantee or the purchase price or the removal of the asset from the banks books or what is the mechanism that they’re actually going to use? So we really need to see what it is that they’re proposing before we can give good comment on it. I think one of the strengths of this institution is that it’s both proactive with respect to its loan portfolio. The loan portfolio is all very local within the knowledge and easy driving range of the loan officers, that we’ve been a relationship bank and so have a good understanding and, indeed, good relationships with our borrowers. And that we have a decent skill set in terms of working out issues which inevitably arise during economic circumstances such as we’re experiencing today. I think that combination of things might make us more reluctant to give our assets to be worked out by somebody else than keeping control of them ourselves. I think those factors are not present in every banking institution, so we will have to see the details. Eric [Swergeld] – [Groover] & McBain: Thanks, Betsy.

Your next question comes from Andy Stapp – B. Riley & Company. Andy Stapp – B. Riley & Company: Yeah, I neglected to ask what is the loss on the sale or do you anticipate a loss on the sale of your OREO? Betsy Z. Cohen: No, we marked it down significantly before we took it into OREO and so we don’t anticipate a further loss. Andy Stapp – B. Riley & Company: Okay. And could you also give me or us some colour on the financial condition of the developers you deal with? How much stress they’re experiencing? Betsy Z. Cohen: I only laugh because everybody’s experiencing debt. So we haven’t done a Rorschach test on our portfolio. We can say that our group of developers are primarily, not exclusively but primarily in the area of what we call rental equivalent properties. So they have stressed in terms of the velocity of sales not being what they anticipated and any assumed supporting projects out of pocket, but they have an alternative strategy which perhaps is to rent the units on a temporary basis. So we see them beginning to play out some of their strategies and to say that they’re not stressed would be ridiculous. But I think that they’re level of stress still remains manageable. Andy Stapp – B. Riley & Company: Okay. Great. Thank you.

Your next question comes from James Abbott – FBR Capital Markets. James Abbott – Friedman, Billings, Ramsey & Co.: Hi, again. Can you just remind us of the par value and the current carrying value on the securities, the CDOs, the bank trust referred. I think it was $30 million at one time as the par value, but maybe you can correct me if that’s not right. Betsy Z. Cohen: Hi, James. Marty? Martin F. Egan: Hi, James. Now it’s about 25 and the carrying value is probably about 20. Betsy Z. Cohen: Twenty-two is it? Martin F. Egan: Twenty. Betsy Z. Cohen: Twenty. Sorry. James Abbott – Friedman, Billings, Ramsey & Co.: Okay. That’s helpful. Any change in the methodology in valuing those on an inter-quarter basis? Martin F. Egan: No. James Abbott – Friedman, Billings, Ramsey & Co.: More aggressive? More, anything? No? Martin F. Egan: Not really. Betsy Z. Cohen: No. James Abbott – Friedman, Billings, Ramsey & Co.: Okay. And then a follow up on the construction. Remind us of how much is kind of in the high discretionary category, the large property Jersey shore, those kind of things. I think the Jersey shore was maybe $16 million, if I remember correctly. Betsy Z. Cohen: I don’t have that number in front of me, but I’ll be glad to get the breakout of the portfolio for you. James Abbott – Friedman, Billings, Ramsey & Co.: And on, are you seeing, have you done any re-appraisals on the construction portfolio and what kind of, I know you started out with a lending value near 60% on the construction portfolio and you probably haven’t re-appraised everything, but if you – Betsy Z. Cohen: No, we only, we re-appraise as there is either an issue or a maturity, a renewal or an event. Something that occurs. We’re not in a wholesale way re-appraising the whole portfolio. James Abbott – Friedman, Billings, Ramsey & Co.: And what are you seeing as far as a change in value on those select properties that you have re-appraised. Is it 10%, 20%, 30%, 50%? Betsy Z. Cohen: I would say that it’s depending upon the property. Someplace on average in the 16% range. It could be 12% on some properties and 20% on others. There’s often a range. But I’d say that’s a good number on average. James Abbott – Friedman, Billings, Ramsey & Co.: Okay. That’s helpful. Thank you very much.

And there are no further questions. At this point I would like to turn the call back over to Betsy Cohen for closing remarks. Betsy Z. Cohen: Thank you, Becky. Thank you to everyone for not only joining the call but for your good questions. If I could apologize for the economy being so stressful and therefore making your jobs more stressful and your investments also I’d give you my apology, but thanks. [Inaudible) think of what to do about it. Anyway, we look forward to continuing to report to you some optimistic news from the banking front as we did this quarter in the following quarters and look forward to hopefully a sunnier day ahead. Thank you.

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Have a great day.