DEF 14A of Bancorp, Inc., Apr 8, 2024

DEF 14A of Bancorp, Inc.

Filed Apr 8, 2024 · FY20230001104659-24-044730

Open on EDGAR

  1. Incorporation by Reference and Website Information

    | PROXY SUMMARY | 5 | | PROPOSAL 1. ELECTION OF DIRECTORS | 11 | | CORPORATE GOVERNANCE | 20 | | STOCKHOLDER ENGAGEMENT | 25 | | DIRECTOR COMPENSATION | 26 | | CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS | 27 | | NON-DIRECTOR EXECUTIVE OFFICERS | 28 | | PROPOSAL 2. ADVISORY (NON-BINDING) VOTE ON EXECUTIVE COMPENSATION | 31 | | COMPENSATION DISCUSSION AND ANALYSIS | 32 | | COMPENSATION COMMITTEE REPORT | 42 | | EXECUTIVE COMPENSATION TABLES | 43 |

  2. Incorporation by Reference and Website Information

    | 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. |

  3. Incorporation by Reference and Website Information

    | 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. |

  4. Incorporation by Reference and Website Information

    | 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. |

  5. Incorporation by Reference and Website Information

    | 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. |

  6. Incorporation by Reference and Website Information

    | 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. |

  7. Incorporation by Reference and Website Information

    | 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. |

  8. Incorporation by Reference and Website Information

    | 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. |

  9. Incorporation by Reference and Website Information

    | 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. |

  10. Incorporation by Reference and Website Information

    | 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. |

  11. Incorporation by Reference and Website Information

    | 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. |

  12. STANDARD FOR ELECTION OF DIRECTORS

    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 proxy, in the absence of a contrary direction, to vote “FOR” the election of 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. 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.

  13. STANDARD FOR ELECTION OF DIRECTORS

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

  14. STANDARD FOR ELECTION OF DIRECTORS

    | Proxy Summary | Proposal #1 | Proposal #2 | Proposal #3 | Proposal #4 | Other Matters |

  15. STANDARD FOR ELECTION OF DIRECTORS

    CORPORATE GOVERNANCE

  16. DIRECTOR COMPENSATION TABLE

    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 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: ■ The Chair of the Audit Committee receives $10,000 annually; ■ Chairs of other committees receive $5,000 annually; ■ Audit Committee members receive $5,000 annually; ■ Other committee members receive $2,500 annually for each committee on which they serve; and ■ 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.

  17. DIRECTOR COMPENSATION TABLE

    | 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 |

  18. DIRECTOR COMPENSATION TABLE

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

  19. DIRECTOR COMPENSATION TABLE

    | 26 | 2024 PROXY STATEMENT | |

  20. DIRECTOR COMPENSATION TABLE

    | Proxy Summary | Proposal #1 | Proposal #2 | Proposal #3 | Proposal #4 | Other Matters |

  21. DIRECTOR COMPENSATION TABLE

    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 subsidiaries, was, is, or will be a participant, (ii) the amount of the 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 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 are 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 indirect material interest on the part of the related parties involved. Mr. 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 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 director.

  22. DIRECTOR COMPENSATION TABLE

    | Proxy Summary | Proposal #1 | Proposal #2 | Proposal #3 | Proposal #4 | Other Matters |

  23. DIRECTOR COMPENSATION TABLE

    NON-DIRECTOR EXECUTIVE OFFICERS Set forth below is information regarding the background of 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.”

  24. DIRECTOR COMPENSATION TABLE

    | 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. |

  25. DIRECTOR COMPENSATION TABLE

    | 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. |

  26. DIRECTOR COMPENSATION TABLE

    | 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. |

  27. DIRECTOR COMPENSATION TABLE

    | 28 | 2024 PROXY STATEMENT | |

  28. DIRECTOR COMPENSATION TABLE

    | Proxy Summary | Proposal #1 | Proposal #2 | Proposal #3 | Proposal #4 | Other Matters |

  29. DIRECTOR COMPENSATION TABLE

    | 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. |

  30. DIRECTOR COMPENSATION TABLE

    | 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. |

  31. DIRECTOR COMPENSATION TABLE

    | 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. |

  32. DIRECTOR COMPENSATION TABLE

    | Proxy Summary | Proposal #1 | Proposal #2 | Proposal #3 | Proposal #4 | Other Matters |

  33. DIRECTOR COMPENSATION TABLE

    | 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. |

  34. DIRECTOR COMPENSATION TABLE

    | 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. |

  35. DIRECTOR COMPENSATION TABLE

    | 30 | 2024 PROXY STATEMENT | |

  36. DIRECTOR COMPENSATION TABLE

    | Proxy Summary | Proposal #1 | Proposal #2 | Proposal #3 | Proposal #4 | Other Matters |

  37. DIRECTOR COMPENSATION TABLE

    In 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 its named executive officers as reported in this 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 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. At the Company’s 2023 annual meeting, approximately 96% of the votes cast approved the Company’s 2022 executive compensation program.

  38. COMPENSATION OBJECTIVES AND ELEMENTS

    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 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 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. 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 “Determination of Compensation Amounts” 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 stockholder 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.

  39. COMPENSATION PROCESS AND METHODOLOGY

    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 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.

  40. FISCAL YEAR 2023 PEER GROUP(a)

    FISCAL YEAR 2023 PEER GROUP(a)

  41. 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. |

  42. FISCAL YEAR 2023 PEER GROUP(a)

    (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

  43. FISCAL YEAR 2023 PEER GROUP(a)

    | 34 | 2024 PROXY STATEMENT | |

  44. FISCAL YEAR 2023 PEER GROUP(a)

    | Proxy Summary | Proposal #1 | Proposal #2 | Proposal #3 | Proposal #4 | Other Matters |

  45. FISCAL YEAR 2023 PEER GROUP(a)

    $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.

  46. NEO COMPENSATION FOR FISCAL YEAR 2023

    | 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 |

  47. DETERMINATION OF COMPENSATION AMOUNTS

    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 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:

  48. DETERMINATION OF COMPENSATION AMOUNTS

    Cash Bonus. In evaluating possible cash bonuses, the Compensation Committee primarily focuses on the sustained contributions made to the Company by the NEO under consideration. The 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 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 be sustained for cash bonus and long-term equity grants.

  49. DETERMINATION OF COMPENSATION AMOUNTS

    | 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% |

  50. CEO COMPENSATION DETERMINATION

    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 single year, has contributed to the steady increase in income and other financial performance measures.

  51. STOCKHOLDER INPUT AND COMPANY ACTIONS

    | 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. |

  52. TAX AND ACCOUNTING CONSIDERATIONS

    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 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.

  53. SUMMARY COMPENSATION TABLE

    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.

  54. SUMMARY COMPENSATION TABLE

    | 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 |

  55. SUMMARY COMPENSATION TABLE

    (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. 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.

  56. SUMMARY COMPENSATION TABLE

    | Proxy Summary | Proposal #1 | Proposal #2 | Proposal #3 | Proposal #4 | Other Matters |

  57. GRANTS OF PLAN-BASED AWARDS TABLE

    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.

  58. GRANTS OF PLAN-BASED AWARDS TABLE

    | 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 |

  59. GRANTS OF PLAN-BASED AWARDS TABLE

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

  60. GRANTS OF PLAN-BASED AWARDS TABLE

    | 44 | 2024 PROXY STATEMENT | |

  61. GRANTS OF PLAN-BASED AWARDS TABLE

    | Proxy Summary | Proposal #1 | Proposal #2 | Proposal #3 | Proposal #4 | Other Matters |

  62. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE

    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.

  63. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE

    | | | 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 |

  64. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE

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

  65. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE

    | Proxy Summary | Proposal #1 | Proposal #2 | Proposal #3 | Proposal #4 | Other Matters |

  66. OPTION EXERCISES AND STOCK VESTED TABLE

    OPTION EXERCISES AND STOCK VESTED TABLE The following table provides information for the NEOs regarding RSUs vested and options exercised in fiscal year 2023.

  67. OPTION EXERCISES AND STOCK VESTED TABLE

    | | 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 |

  68. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

    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 compensation or benefits provided upon the termination events, such as the timing of a termination event and the Company’s stock price, any actual amounts paid or distributed may be higher or lower than reported above. In accordance with SEC rules, this discussion assumes the relevant trigger event occurred on December 31, 2023. The Company’s NEOs serve at the discretion of the Board of 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 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.

  69. CEO PAY RATIO

    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 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.

  70. PAY VERSUS PERFORMANCE TABLE

    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.

  71. PAY VERSUS PERFORMANCE TABLE

    | Proxy Summary | Proposal #1 | Proposal #2 | Proposal #3 | Proposal #4 | Other Matters |

  72. PAY VERSUS PERFORMANCE TABLE

    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.

  73. PAY VERSUS PERFORMANCE 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% |

  74. PAY VERSUS PERFORMANCE TABLE

    (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 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.

  75. PAY VERSUS PERFORMANCE DESCRIPTIVE DISCLOSURE

    PAY VERSUS PERFORMANCE DESCRIPTIVE DISCLOSURE Total shareholder returns are one of the criteria in the scorecard and the Nasdaq Bank Stock Index is 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 other criteria in the 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 Company to its proxy peer group in its determination of 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 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.

  76. PAY VERSUS PERFORMANCE DESCRIPTIVE DISCLOSURE

    | 48 | 2024 PROXY STATEMENT | |

  77. PAY VERSUS PERFORMANCE DESCRIPTIVE DISCLOSURE

    | Proxy Summary | Proposal #1 | Proposal #2 | Proposal #3 | Proposal #4 | Other Matters |

  78. PAY VERSUS PERFORMANCE DESCRIPTIVE DISCLOSURE

    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.