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Jacob Owens September 30, 2022

WILMINGTON – The Bancorp, a non-traditional bank that was one of Delaware’s early financial service success stories, will move its designated headquarters to South Dakota amid an expansion set to […]

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The Bancorp will move its headquarters from the Wilmington suburbs to South Dakota next year, but will retain its local workforce. | DBT PHOTO BY JACOB OWENS[/caption] WILMINGTON – The Bancorp, a non-traditional bank that was one of Delaware’s early financial service success stories, will move its designated headquarters to South Dakota amid an expansion set to be completed next year. The company, which employs about 700 nationwide and operates specialty lending and payment services with a special focus on the financial technology sector, will retain its Wilmington suburb workforce of about 300 people following the switch, but it’s another symbolic loss for Delaware. Like Bancorp, the agribusiness company Corteva moved its designated headquarters to Indianapolis earlier this year while retaining a local workforce. Bancorp’s move will drop Delaware’s headquartered publicly traded companies to a dozen again following the spinout of Enovis Corp. earlier this year. Founded by Philadelphia banking veteran Betsy Cohen in 2000, Bancorp began as a branchless commercial bank but gradually moved toward servicing non-bank fintech companies. Led today by CEO Damian Kozlowski, Bancorp has $7.1 billion in assets, the bulwark of which are tied to fintech. The company backs debit and credit services by well-known digital payment companies like PayPal and Chime while also facilitating transactions between payment processors Mastercard and Visa. About a year ago, Bancorp announced that it was leasing 50,000 square feet of new office space in Sioux Falls, S.D. – another banking mecca built by a deregulated environment like Wilmington that today is home to headquarters for Citibank, Wells Fargo Bank and U.S. Bank. The company’s Fintech Solutions unit opened there in 2002 and today employs about 170 people. In conjunction with that expansion, Bancorp worked over the last year to switch to a national charter under the federal Office of the Comptroller of the Currency, allowing it to operate under a standardized set of regulations pertaining to deposits, lending, payments and more. “Having that national license allows you to operate under a single set of rules across the country, as opposed to individual state-by-state rules. It's much easier to do at scale and easier to manage from a risk management standpoint,” Gregor Garry, chief operating officer of Bancorp, told the Delaware Business Times. [caption id="attachment_226379" align="alignright" width="300"]

Bancorp is largest issuer of prepaid debit and credit cards in the country, including FSA and HSA accounts. | DBT PHOTO BY JACOB OWENS[/caption] Bancorp embraced fintech early in its advent about 15 years ago, becoming a top issuer of the reloadable debit and gift cards used by restaurants and retailers, government agencies and health savings plans, among others. Since partnering with PayPal, Chime and SoFi, Bancorp has become the seventh largest debit issuing bank in America. With 163 million cards issued across all partners, it’s likely that you have a Bancorp-backed card in your wallet without knowing it. “Everyone's like, who’s Bancorp? We're the company behind all the companies that you see ads for when you're streaming a show or watching network television,” Garry said. “What we do is that boring stuff no one cares about but is really important to do in banking and the middle office. We move money, we don't lose it. We make sure there's no money laundering. We do the sanctions, we do the compliance, we do the risk management.” With the deposits created by the Fintech Solutions unit, Bancorp lends through smaller operations in institutional banking, small business lending, commercial fleet leasing and real estate bridge lending, Garry said. “Those are low credit risk with good margins so that we don't have to worry about this credit exposure that a lot of traditional banks do,” he said of Bancorp’s limited lending strategy. The growth of Bancorp in Sioux Falls along with its top competitor Pathward, coupled with a number of smaller fintechs and banks aimed at the space, has developed a deep talent pool there that Bancorp hopes to tap into its expansion, Garry said. It’s building capacity for an additional 75 to 100 employees in its move to Cherapa Place, a 10-story, mixed-use office building that will sit alongside the Big Sioux River. But Garry said that Delaware’s mix of middle office employees at the Silverside Carr Corporate Center, including those in operations, risk management, compliance, information technology, cybersecurity, marketing, audit, and administration, shouldn’t worry about a future move to the Midwest. “It's never a relocation situation. We have a tremendous number of jobs posted in Wilmington right now. So, we'll continue to grow in both locations,” Garry said, noting company leaders will keep offices in both markets.

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