BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, DC 20551

January 25, 2017

Mark Chorazak, Esq.

Simpson Thacher & Bartlett LLP
425 Lexington Avenue

New York, New York 10017

Dear Mr. Chorazak:

This is in response to your request on behalf of Castle Creek Capital
LLC (“Castle Creek”), Rancho Santa Fe, California, for an exemption from the
prohibitions of the Depository Institution Management Interlocks Act
(“Interlocks Act”)! and the Board’s Regulation L? to permit
Mr. John M. Eggemeyer to become a management official of The Bancorp, Inc.
(“Bancorp”), Wilmington, Delaware, while at the same time serving as a
management official of PacWest Bancorp (“PacWest”), Beverly Hills, California,
and Guaranty Bancorp (“Guaranty”), Denver, Colorado.

The Interlocks Act and Regulation L prohibit a management official
of a depository institution or a depository holding company with total assets
exceeding $2.5 billion (or of any affiliate of such an organization) from serving at
the same time as a management official of an unaffiliated depository organization
with total assets exceeding $1.5 billion (or of any affiliate of such an
organization), regardless of the location of the two depository organizations
(“major assets prohibition”).> Bancorp-and each of PacWest-and- Guaranty have
assets that exceed the applicable thresholds of the major assets prohibition.

Mr. Eggemeyer has served as a management official of PacWest and
Guaranty since 2000 and 2004, respectively. Castle Creek is an investor in
Bancorp and has a contractual right to appoint a director to each of the boards of

' 12 U.S.C. § 3201 et seq.
2? 12 CFR part 212.
3 12 U.S.C. § 3203; 12 CFR 212.3(c).

www. federalreserve.gov


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directors of Bancorp and its subsidiary state nonmember bank, The Bancorp Bank,
Wilmington, Delaware.* Castle Creek has selected Mr. Eggemeyer as its director
representative for Bancorp.

Under the general exemption provision of Regulation L, the Board
may permit an interlock that otherwise would be prohibited by the Interlocks Act
if the Board determines that the interlock would not result in a monopoly or ina
substantial lessening of competition and would not present safety and soundness
concerns.> While the Board applies a strong presumption against granting a
general exemption, the Board has allowed exemptions to be granted in certain
limited situations. The Board has delegated to its General Counsel, in consultation
with the Director of the Division of Supervision and Regulation (“Director”),
authority to grant exemptions under this provision of Regulation L.

The proposed interlocks between Bancorp and each of PacWest and
Guaranty would not result in a monopoly or in a substantial lessening of
competition. Bancorp does not compete in the same local banking markets as any
of the other institutions.® The interlocks also would not appear to have any
substantial effect on competition with respect to the nonbanking activities of
Bancorp and each of PacWest and Guaranty.

In addition, the interlocks do not present safety and soundness
concerns. Castle Creek contends that Mr. Eggemeyer is qualified to serve as
Castle Creek’s management official of Bancorp given his experience and overall
availability.

Based on all the facts of this case and for the reasons discussed
above, the General Counsel, acting pursuant to authority delegated by the Board
and after consultation with the Director, has granted an exemption to allow
Mr. Eggemeyer to serve as a management official of Bancorp while also serving
as a management official of PacWest and Guaranty.

‘ Mr. Eggemeyer’s service as a management official of The Bancorp Bank while
at the same time serving as a management official of PacWest and Guaranty is
subject to approval by the Federal Deposit Insurance Corporation (“FDIC”). The
FDIC approved Castle Creek’s request by letter dated December 15, 2016.

5 12 CFR 212.6(a).

§ Bancorp operates one office in Delaware. PacWest operates 83 offices in
California and one office in North Carolina. Guaranty operates 36 offices in
Colorado. Bancorp does not have any overlapping banking markets with PacWest
or Guaranty.


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The Board reserves the right to revoke the exemption should the
interlocks result in a monopoly or a substantial lessening of competition or present
safety and soundness concerns.

Sincerely yours,

Margaret McCloskey Shanks
Deputy Secretary of the Board