Betsy Cohen - Chief Executive Officer Paul Frenkiel - Chief Financial Officer Frank Mastrangelo - President Andres Viroslav - Director of Corporate Communication

John Hecks - JMP Securities Bob Ramsey - FBR Capital Markets Frank Schiraldi, - Sandler O'Neill Andy Stapp - B. Riley: Matthew Kelley - Sterne, Agee & Leach

Good day ladies and gentlemen, and welcome to the first quarter 2010, The Bancorp earnings conference call. My name is Caressa 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 today’s 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 Communication; please proceed.

Thank you, Caressa. Good morning, and thank you for joining us today to review The Bancorp’s first 2010 financial results. On the call with me today are Betsy Cohen, Chief Executive Officer; Frank Mastrangelo, President; and Paul Frenkiel, 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 01:00pm Eastern Time today. The dial-in for the replay is 888-286-8010, with a confirmation code of 31649563. Before I turn the call over to Betsy, I would like to remind everyone that when used in 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 could cause actual results to differ materially from those anticipated or suggested by such statements. For a 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 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’d like to turn the call over to Betsy Cohen. Betsy.

Thank you very much Andres, and thank you all for joining us. The first quarter 2010 included many indicators that progressed for TBBK. On the credit side, on a linked quarter basis we reduced the non-performing loans to total loans from 1.66 to 1.44, and an even greater increase if you do it on an annual basis. Non-performing assets to total assets decreased on a linked quarter basis from 1.26 to 1.08. 90-day loans plus, still accruing increased $4 million from about $13 million and overall NPA’s were up slightly from $13 million to $17 million in aggregate, a decrease by about 12%. Further information on that bucket of loans indicates that $7 million of the approximately $21 million in 90 days plus and non-accrual are under agreement of sales scheduled to close this quarter. We did not only do work on loans that are past due, but also have generated new loans. Some of the net loan growth is masked by our conscious run-off of residential construction loans, and some other components of the portfolio, but new loans in the first quarter aggregated about $36 million, and they had been $50 million in the fourth quarter of 2009. In addition to that, we closed the first $2 million of loans under our new SVA program, which launched at the very beginning of April. We have great hope for that program in terms of loan growth, given the initial response that we’ve had from our partners. We also increased on the asset side, increased securities on a linked quarter basis by over $50 million. In-part we are responding to the significant growth in deposits. If one looks at this on a seasonal basis as it has been shown in the past, we have some uncertainty in the first quarter when deposits grew significantly as to the exact amount of the retention of those deposits, and so we have traditionally helped them on a very short-term basis, primarily in FED funds. We are though adding, we gained more confidence on the average deposit level in the second quarter and have been able to grow assets in a corresponding way. That will offset, we believe the decrease in net interest margin which is totally a result of those asset deposits. In a low interest free environment such as we have, it’s very difficult to sustain the margins when the deposits start to flush in. Our deposit strategy continues to be successful. As you know we are interested in market penetration within our several lines of business; one, to have a better customer base and better customer opportunities, but also to have what we think is a better pricing control. We’ve achieve a top 10 position in healthcare and Frank will talk more about these in a bit; and we are making progress in merchant acquiring where we moved year-over-year from about 48th in the country to 21st; and in ACH [donation] where we moved from 54th to 44th and joined as a principal bank of North Shore. The cost of those deposits though do reflect the influx of significant low cost deposits, and year-over-year that cost moved from 106 basis points to 65 basis points. On the income side, we have concentrated over the last year in moving the deposit strategy and the line of business strategy of tipped, slightly toured; those components which increased our non-interest income, and if you can see, that has been somewhat successful when that non-interest income increased year-over-year by 46%. This quarter we tried to add information to the press release by providing you with a reconciliation of core deposits, core operating deposits. Again as one book said March 31, 2009 to March 31, 2010 there is an increase from approximately $5 million to approximately $7 million, and so we think we are making core earnings progress. That is reflected in-part in the improvement of our efficiency ratio, which on the basis of March 31, 2009 to March 31, 2010 decreased by some 500 basis points. I would like Paul now to walk you through the TARP reconciliation as we have promised or anticipated, we couldn’t promise. We paid TARP this quarter and that has certain accounting implications simply for the quarter. Paul would you like to go through that calculation?

Sure. Accounting rules require that when the TARP was originated, that the accounting for it was to record $38 million to the balance of the bonds outstanding to the treasury, and the balance was credited to additional paid in capital. Now with the payoff, the accounting is to debit retained earnings and credit the preferred stock, which is now being repaid. So the bottom line is, that $7 million was transferred from additional paid-in capital. That debit now, and that charge now is reflected in retained earnings. So, I think the thing to take away is that it was a totally non-cash charge, and was really just a transfer from retained earnings to additional paid in capital.

Thank you Paul. Frank is now going to give you a little bit more color on what we continue to believe has been a very successful deposit season. Frank.

Thank you Betsy. As Betsy has mentioned, we have a goal to grow a number of focused lines of business into recognized leaders in those particular niches. In the number of instances we’ve been able to do that, where we are the second largest flexible spending account issuer today. We have the sixth largest book that’s held savings accounts; we are third largest prepaid issuer in the US today, and as Betsy mentioned, in a number of other business lines, merchant acquiring we’ve made significant progress growing that business from the, lets say the bottom 50, around 48, 49, to 21, looking first quarter 2009, first quarter 2010, and recently North Shore released their top 50 ODFI’s for 2009, of which we were number 44 up from number 54, just outside of the top 50 the prior year. The net-net of the growth of those businesses, as we look at how that affects deposits, how that affects non-interest income, you’ll see that our affinity, our private label business deposits year-over-year, looking at first quarter 2009 to first quarter 2010, we are up almost $700 millions over that period. Those deposits comprised 69% of core deposits in the first quarter of 2009. In the first quarter of 2010, they comprised almost 88% of core deposits and have been a significant contributor of decreasing the average cost of funds for the institution, and further the growth of those businesses, specifically merchant processing and ODFI and the prepaid business has really driven non-interest income forward, and is a key factor in that year-over-year increase in non interest income.

Thank you Frank, and I think now we’ll open the floor for questions.

(Operator Instructions) Your first question comes from John Hecks - JMP Securities. John Hecks – JMP Securities: My first question is related to the deposits. You had a large in-flow of non-interest bearing deposits that occurred, and I’m wondering is there some seasonality with respect to this, and your new relationships for instance with Heartland Payment or AccountNow, or is this a good level to go off of? Then the final portion on the deposits is, do these inflows and non-interest bearing deposits occur later in the quarter or was it sort of spread out over the quarter?

Let me start, and then I’ll let Frank give you some more detail. There is seasonality to many of our customers businesses. We reach a high point for the year, or it may not be the high point, but we have a serge of -- to use an Iraqi term I guess, we have a serge of deposits in the first quarter as a result of many of our customers having businesses that are seasonally tipped to the first quarter. We have a second level observed in the third quarter, and a more modest one in the fourth and we are still looking for businesses that have seasonality in the second quarter. This is comprised of healthcare of companies like Heartland in merchant acquiring, but a whole variety of businesses which gather around the first quarter. We don’t always retain all of those deposits on an average basis throughout the year, but we generally have built-out on an average basis in the fourth quarter, to what may have been a peak in the first quarter, and I don’t know if that’s a helpful way for you to think about it. Frank would you like to add to that.

The only other thing that I would add to that, remember John, many of these new relationships, since you mentioned some of the newer relationships that you saw in the press release over the last quarter -- many of these new relationships are a very long lead time, both in signing and then in impact from a balance sheet and income statement standpoint. So the relationship that we might sign in the first quarter of 2010, really might not have any significant balance sheet impact or income statement impact for another two to three quarter as the program is integrated and ultimately there is a ramp up in penetration or conversion of our book of business over to us. So many of the gains that you are seeing here today in the first quarter of 2010 are really driven from deals that we saw sometime in 2009. John Hecks – JMP Securities: Okay. Now moving to credits, fairly consistent results, but you did have some commercial charge offs. Were these scattered about or was any just lumpy charge-offs or how should we look at that?

No, I think they are across the lines of the credit book. John I don’t think anything is startling. There was a little less than $3 million in charge-offs and they really were spread, really not much in construction, about $300,000 and very little in consumer, but otherwise just spread across the book. John Hecks – JMP Securities: Okay. And my final question is related to the non-interest income. You’ve obviously showed some very strong growth there, even when excluding some gains on the sale securities. Is there seasonal influences in this line item as well or is there just because you broadened out you infinity partnerships, there is a much larger core number that we should assume going forward.

I think both. That’s why I think we made the comparison to the first quarter of 2009 rather than having you look at it on a linked quarter basis, because that’s really the measure of new relationship, expanded relationship, etc., that we think is the appropriate nature for sort of prognostication. But its on an annual first quarter to first quarter basis, because there is seasonality, and so it’s that combination that Frank referred to in answer to your last question, which is the combination of new relationships which are working their way into our business, but they don’t come on full strength on day one, and the increase in our current relationships, but with all of those having a certain amount of seasonality. The first quarter is a good way to access the growth.

Your next question comes from Bob Ramsey - FBR Capital Markets. Bob Ramsey – FBR Capital Markets: I know we’ve talked a lot about the core deposit growths you all showed, and some of the relationships you all have added recently. if I look over the last year, it looks like sort of on a year-over-year basis you’ve added about $500 million to core deposits, pretty consistently. Is that a good run rate for annual deposit growths, sort of stripping out the seasonality as we go forward, or you expect some acceleration given the few relationships?

Well, it wasn’t hard for us to predict timing with any specificity or pin point specificity Robin, and the reason for that is again something that Frank has done, which is that when we announced as we have, a number of new relationships, the time to implement and to convert, and to ultimately get a full year of deposit relationship, which is what we need to have it be reflective, is a continuing process. So its hard for us to say to you, but we entered into so many relationships, and in the third quarter you will see X amount of growth, because they each have a different set of technology issues and implementation issues and conversion issues. So we like to think that we are showing significant run rate growth, but precisely what it is we would hesitate to be predictive in that way. Bob Ramsey – FBR Capital Markets: Okay. In terms of the new SVA loan program, its great to see that’s off and running. Do you have targets for that program for 2010, and sort of what are you seeing more broadly in terms of loaned demand?

Do you have internal targets, which we don’t share with the market, but we are seeing enormous demand, and so we are very optimistic that this will contribute significantly to loan growth. Bob Ramsey – FBR Capital Markets: Okay, and more generally, loan demand, what do you got?

Loan demand is there for the taking, and so it’s a matter of our sorting through our current categories of loans and seeing now we want to balance or rebalance the book, to reflect what we think of our current economic condition. Bob Ramsey – FBR Capital Markets: Okay, and then maybe a final question; you all did highlight the efficiency improvement you made over the last year. How are you thinking about expenses going forward and what we see continued improvement in the efficiency ratio?

We are very hopeful. We think that it’s more top and that’s one of the reasons we added core earnings, operating earnings. That’s another for you to look at it in the press release. We think it’s more a function of us increasing now our core operating earnings, and that will drive the down-tick in efficiency. We don’t see expense as a major difficulty.

Your next question comes from Frank Schiraldi - Sandler O'Neill. Frank Schiraldi, - Sandler O'Neill: Just a couple of questions, and my first question is probably -- it’s tough to do, but I am just sort of looking at last year. I am looking at deposits from the first quarter to the second quarter of last year, and they’re sort of flattish, obviously because of the seasonality, but my question is, this time around do you sort of feel like we are going to see similar results or is that now that you are so much larger the new business will be trumped by seasonality, and we might see just total end-of-period deposits being down linked quarter.

I didn’t think so, but I am going to ask Frank to speak to that and then maybe I will come back on the line. Frank.

Sure. I think you are asking about the expectations for the second quarter, as in Q1 to Q2 or…? Frank Schiraldi, - Sandler O'Neill: Right, just that deposit flow. I am just looking at last year and saw end-of-period between 1Q and 2Q ’09, core deposits being flatter.

Right, some of the first quarter run up in deposits is so fluid that a portion of it does run out in Q2. Q2 tends to be our weakest quarter across all business lines. It’s the one quarter where we don’t have anything that peaks or spikes from a seasonality standpoint. So I think that’s probably a good assumption that deposits are flat or maybe a minimal run off quarter-to-quarter.

And I think, I would only add to that, that this year we have a bigger pipeline of new relationships which is coming onto the books, and so there may or may not be a down-tick in this year, but there maybe an up-tick. Frank Schiraldi, - Sandler O'Neill: And then just on the asset side, just looking real short-term, looking into the second quarter again, loan growth is obviously not going to be able to sop up all that impressive core deposit growth. So what are you guys thinking in terms of securities purchases to use?

Yes, I thought I had mentioned before on a linked quarter basis our securities were up about almost $60 million. We are not suggesting they’d be up $60 million in every quarter, but Paul if you’d like to talk about second quarter security purchases, that might be helpful.

Sure. We clearly have capacity in terms of interest rate risk to take some modest positions in securities. We purchased municipals that were kind of intermediate range so they might range from 10 to 15 years primarily, and we are buying some very short term structured mortgage backs, all agencies and all strong credits, so credit isn’t an initiative. Its totally the interest rate risk that we look at, but even if you can get, which we did on our mortgage backs around 3.5% for average lives of between 3.5 and 5 years that seems like at least in a measured portion a worthwhile deployment of our assets. So what we do anticipate that rates will go up in about a year. The interest that we would have lost by doing nothing seem to justify those purchases. Frank Schiraldi, - Sandler O'Neill: :

I think we’re cautious Frank, and we are trying to do it in a measured way, but I think that’s your basic point which is that removing funds from Fed funds into securities and new loans is in fact true. Frank Schiraldi - Sandler O'Neill: Then just turning to just credit, I just wondered if you were able to give total delinquencies or just 30 to 89 days, that bucket, 30 to 89 days past due what that did; linked quarter.

On an annual basis from 03/31/09, 30 to 90 days was a little over $12 million and its now over $14 million. Its getting down in between, but the total of all 30 to 90, 90 plus in non accrual is just down slightly over March 31, ’09 and just about flat with 12/31/09.

Your next question comes from Andy Stapp - B. Riley. Andy Stapp - B. Riley: Could you give a little bit more color on what you might expect in terms of loan growth in just general terms. In other words, flat to modest, moderate, whatever might be appropriate.

Will I think we hope to be able to show you our loan growth as the year goes on. For the second quarter we have agreements of sale and the residential brokerage we anticipate will reduce that growth by another $10 million or provide us proceeds for $10 million, and we think that’s the right thing to do to reduce the residential construction work. We believe that by the third quarter, on an aggregate basis was the second quarters settlement time for residential, that we will infect begin to show you net growth, but we continue to make theses loans as we go along. Andy Stapp - B. Riley: And how close do you think you are to releasing rather than building reserves?

I didn’t know that backing still contains the word releasing reserves, you took me a little by surprised, but I think we think that as we grow the portfolio, there will be a requirement for more reserves even if the coverage becomes lower as the growth becomes more significant. So I don’t think the leasing reserves in a growing environment is really within our strategy at the moment. Andy Stapp - B. Riley: But the reserve coverage alone could be down by year-end.

I don’t anticipate it, but I’m saying it’s a possibility depending upon how strong the net loan growth is; and you know pay-offs are often difficult to anticipate exactly. Andy Stapp - B. Riley: Going back to the net interest margin, do you think is that gathering that bills; certainly an increased from Q1, but it may not likely get back to Q4 levels.

Well, if you take a look at the FED funds level, Q4 to Q1 on a linked quarter basis, you’ll see that these are just approximate members; about $400 million of what we would call just for this conversation excess or unused deposits, and if you strip those out, because in this interest rate environment its impossible to make much money on them. If you strip them out and look at the remaining spread, it’s just about where it was in Q4. So it both a use of those deposits, and the more measured growth of the deposit growth, not that kind of serge that will reinstate them in.

Your next question comes from Matthew Kelley - Sterne, Agee & Leach. Matthew Kelley - Sterne, Agee & Leach: Just looking over the last three or four months you’ve had eight or nine press releases out announcing new relationships, the team up in the relationships with the Back Corp. Can you just kind of go though and prioritize the top two or three that will have a financial impact and walk us though a little bit of a prioritization of the ones that’s building assets and will have the largest impact.

I think the one that we’ve certainly seen impact from the quickest and one of the more important relationships that we’ve signed, not that any are unimportant, but first was the relationships with Heartland Payments, we actually signed that relationship in the fourth quarter, converted a portion of the book of business over to Bankcorp’s sponsorships in February 2010 and hope to continue to grow the services that we provide Hartland out from there. So that early impact on the income statement, much earlier than a typical relationship that we signed. Another relationship I believe that we press released was one for the prepaid groups, specifically the Unit Rush Relationship where we are moving/issuing bins from another institution over to Bankcorp at the same time, that new issuing and program is ramping up there. Its an important relationship that will grow nicely for us. Past that I would say account now, another very nice new relationships for our prepaid group, which will make impact, but is not making impact. They will because of integration and setup and things like that, it will likely take a couple of quarters before there’s any realized impact.

Matt, if I could just step back from what Frank said and maybe put it in two categories, which may make future releases sort of more understandable in this way. Where we are taking a book of business from another institution, we have a much faster impact because the book is there, where we are growing our business together with the growth, a newer offering, or an offering where we are taking a piece of new business from an existing offer, the impact is slower. So I think that we’d break it down into the two categories that we see. Matthew Kelley - Sterne, Agee & Leach: And then, can you quantify the prepaid business in terms of balances and fee income contribution during the quarter?

I am going to have to ask either Frank or Paul, which of you would like to do this? Frank if not, we’ll get back to you on the allocation to prepaid of non interest income and average balances, but do you have those numbers that hand?

Betsy, I have the deposit balance, but I would have to get back to Matt on the non-interest income contribution for the quarter.

So let’s do half of those.

So our payment services group which comprises of prepaid and some of the bank, whole bank and debit sponsorship programs which is what we’ve been reporting there, the end of the quarter with $857 million in total deposits, up from 520 actually from the quarter before and up from 518 in the first quarter of 2009. Matthew Kelley - Sterne, Agee & Leach: Then just help from modeling that fee income component, the non-interest income component, any non recurring items there or what were the biggest drivers of that year-over-year increase of $2 million buck?

Of course security gains are non-recurring, and they are not included in those numbers, but I think we haven done two things; one is to expand the number of relationships that we have, and so there is a lot of new business growth in there, but secondly we’ve tilted it a little bit towards -- you seen a lot of growth in ACH and in merchant acquiring, and not that you haven’t seen big growth in other areas, but those two are more closely tied to non-interest income growth and so if one might consider the growth there disproportionate.

There are no further questions. At this time I like to turn the call back over to Betsy Cohen for closing remarks.

Thank you Caressa, and thank you all for your very good and probing questions. We are delighted that you joined with us today, and hope to continue to make good progress as we go forward in the second quarter.

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