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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2024
Stock-Based Compensation [Abstract] |
Stock-Based Compensation | Note M—Stock-Based Compensation The Company recognizes compensation expense for stock options and RSUs in accordance with FASB ASC 718, Stock Based Compensation. The expense of the option or RSU is generally measured at fair value at the grant date with compensation expense recognized over the service period, which is typically the vesting period. For option grants subject to a service condition, the Company utilizes the Black-Scholes option-pricing model to estimate the fair value of each option on the date of grant. The Black-Scholes model takes into consideration the exercise price and expected life of the options, the current price of the underlying stock and its expected volatility, the expected dividends on the stock and the current risk-free interest rate for the expected life of the option. The Company’s estimate of the fair value of a stock option is based on expectations derived from historical experience and may not necessarily equate to its market value when fully vested. In accordance with ASC 718, the Company estimates the number of options for which the requisite service is expected to be rendered. For RSUs, fair value is determined by the quoted price of the Company’s common stock on Nasdaq as of the date of grant. At December 31, 2024, the Company had three active stock-based compensation plans: The Bancorp, Inc. 2024 Equity Incentive Plan (the “2024 Plan”) The Bancorp, Inc. 2020 Equity Incentive Plan (the “2020 Plan”) and The Bancorp, Inc. 2018 Equity Incentive Plan (the “2018 Plan”). The 2024 Plan was adopted in May 2024. Employees and directors of the Company and the Bank and consultants (with restrictions) are eligible to participate in the 2024 Plan. Terms of options granted under the 2024 Plan may not exceed 10 years from the date of grant. Any employee or consultant who possesses more than 10% of voting power of all classes of stock of the Company, or any parent or subsidiary, may not have options with terms exceeding f ive years from the date of grant. An aggregate of 2,370,000 shares of common stock were reserved for issuance under the 2024 Plan. RSUs may also be granted under the 2024 Plan, with conditions similar to those for options. The 2020 Plan was adopted in May 2020. Employees and directors of the Company and the Bank and consultants (with restrictions) are eligible to participate in the 2020 Plan. Terms of options granted under the 2020 Plan may not exceed 10 years from the date of grant. Any employee or consultant who possesses more than 10% of voting power of all classes of stock of the Company, or any parent or subsidiary, may not have options with terms exceeding f ive years from the date of grant. An aggregate of 3,300,000 shares of common stock were reserved for issuance under the 2020 Plan, but none remain. RSUs may have also been granted under the 2020 Plan, with conditions similar to those for options. The 2018 Plan was adopted in May 2018. Employees and directors of the Company and the Bank and consultants (with restrictions) are eligible to participate in the 2018 Plan. Terms of options granted under the 2018 Plan may not exceed 10 years from the date of grant. Any employee or consultant who possesses more than 10% of voting power of all classes of stock of the Company, or any parent or subsidiary, may not have options with terms exceeding f ive years from the date of grant. An aggregate of 1,700,000 shares of common stock were reserved for issuance under the 2018 Plan, but none remain. Restricted stock units may have also been granted under the 2018 Plan, with conditions similar to those for options. During 2024, the Company granted 45,616 stock options with a vesting period of four years and a weighted average grant-date fair value of $21.92. During 2023, the Company granted 57,573 stock options with a vesting period of four years and a weighted average grant-date fair value of $17.37. During 2022, the Company granted 100,000 stock options with a vesting period of four years and a weighted average grant-date fair value of $14.01. There were no common stock options exercised in 2024. The total stock options exercised in 2023 and 2022 were 13,158 and 58,531, respectively. A summary of the Company’s stock options is presented below:
|  |  |  |  |  |  | Weighted-average |  |  |
|  |  |  |  |  |  | remaining |  |  |
|  |  |  | Weighted-average |  | contractual |  | Aggregate
| Options |  | exercise price |  | term (years) |  | intrinsic value
|  | (Dollars in thousands except per share data)
Outstanding at January 1, 2024 |  | 622,677 |  | $ | 15.35 |  |  | 6.90 |  | $ | 14,453,641
Granted |  | 45,616 |  |  | 43.89 |  |  | 9.12 |  |  | —
Exercised |  | — |  |  | — |  |  | — |  |  | —
Expired |  | — |  |  | — |  |  | — |  |  | —
Forfeited |  | — |  |  | — |  |  | — |  |  | —
Outstanding at December 31, 2024 |  | 668,293 |  |  | 17.30 |  |  | 6.12 |  |  | 23,613,391
Exercisable at December 31, 2024 |  | 504,497 |  | $ | 12.00 |  |  | 5.58 |  | $ | 20,499,784
A summary of the Company’s non-vested options under the Equity Plans as of December 31, 2024, and changes during 2024, is presented below:
|  |  |  | Weighted-average
|  |  |  | grant date
|  | Options |  | fair value
Non-Vested at January 1, 2024 |  | 257,573 |  | $ | 10.49
Granted |  | 45,616 |  |  | 21.92
Vested |  | (139,393) |  |  | 7.46
Expired |  | — |  |  | —
Forfeited |  | — |  |  | —
Non-Vested at December 31, 2024 |  | 163,796 |  | $ | 16.26
The Company granted 390,305 RSUs in 2024, of which 355,965 have a vesting period of three years and 34,340 have a vesting period of one year. At issuance, the 390,305 RSUs granted in 2024 had a fair value of $42.87 per unit. The Company granted 547,556 RSUs in 2023, of which 514,785 have a vesting period of three years and 32,771 have a vesting period of one year. At issuance, the 547,556 RSUs granted in 2023 had a fair value of $35.00 per unit. The Company granted 260,693 RSUs in 2022, of which 219,311 have a vesting period of three years and 41,382 had a vesting period of one year. At issuance, the 260,693 RSUs granted in 2022 had a fair value of $28.61 per unit. A summary of the Company’s RSUs is presented below:
|  |  |  | Weighted-average |  | Average remaining
|  |  |  | grant date |  | contractual
|  | RSUs |  | fair value |  | term (years)
Outstanding at January 1, 2024 |  | 752,255 |  | $ | 32.53 |  |  | 1.66
Granted |  | 390,305 |  |  | 42.87 |  |  | 1.96
Vested |  | (345,390) |  |  | 30.39 |  |  | —
Forfeited |  | (2,784) |  |  | 32.32 |  |  | —
Outstanding at December 31, 2024 |  | 794,386 |  | $ | 38.29 |  |  | 1.44
There were 345,390 options exercised and RSUs vested in 2024, 470,149 options exercised and RSUs vested in 2023 and 641,320 options exercised and RSUs vested in 2022. The total intrinsic value of the options exercised and RSUs vested in 2024, 2023 and 2022 was $14.8 million, $16.8 million and $15.7 million, respectively. The total issuance date fair value of options that were exercised and RSUs which vested during the years ended December 31, 2024, 2023, 2022, was $10.5 million, $6.4 million, and $6.1 million, respectively. As of December 31, 2024, there was a total of $19.1 million of unrecognized compensation cost related to unvested awards under stock-based compensation plans. This cost is expected to be recognized over a weighted average period of approximately 1.2 years. Related compensation expense for the years ended December 31, 2024, 2023 and 2022 was $15.0 million, $11.4 million and $7.6 million respectively, and the related tax benefits recognized were $3.2 million, $2.4 million and $1.6 million, respectively. For the years ended December 31, 2024, 2023 and 2022, the Company estimated the fair value of each stock option grant on the date of grant using the Black-Scholes options pricing model with the following weighted average assumptions:
|  | December 31,
|  | 2024 |  | 2023 |  | 2022
Risk-free interest rate |  | 4.17% |  |  | 3.67% |  |  | 1.94%
Expected dividend yield |  | — |  |  | — |  |  | —
Expected volatility |  | 44.76% |  |  | 45.21% |  |  | 45.10%
Expected lives (years) |  | 6.3 |  |  | 6.3 |  |  | 6.3
Expected volatility is based on the historical volatility of the Company’s stock and peer group comparisons over the expected life of the option. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury Separate Trading of Registered Interest and Principal of Securities (“STRIPS”) rate in effect at the time of the grant. The life of the option is based on historical factors which include the contractual term, vesting period, exercise behavior and employee terminations. In accordance with the ASC 718, stock-based compensation expense for the year ended December 31, 2024 is based on awards that are ultimately expected to vest. As only one individual has outstanding options, the Company estimates outstanding lives utilizing acceptable expedients in lieu of forfeiture history.

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