Bryn Mawr Bank Corporation Reports Second Quarter Net Income of $14.7 Million, Continues Expansion With Domenick Acquisition, Increases Dividend 13.6% to $0.25 per share


BRYN MAWR, Pa., July 19, 2018 (GLOBE NEWSWIRE) -- Bryn Mawr Bank Corporation (NASDAQ:BMTC) (the “Corporation”), parent of The Bryn Mawr Trust Company (the “Bank”) today reported net income of $14.7 million, or $0.72 diluted earnings per share for the three months ended June 30, 2018, as compared to net income of $15.3 million, or $0.75 diluted earnings per share, for the three months ended March 31, 2018, and $9.4 million, or $0.55 diluted earnings per share, for the three months ended June 30, 2017.

On a non-GAAP basis, core net income, which excludes due diligence and merger-related expenses, income tax charges related to re-measurement of net deferred tax assets, and certain other non-core income and expense items, as detailed in the appendix to this earnings release, was $17.0 million, or $0.83 diluted earnings per share, for the three months ended June 30, 2018, as compared to $19.3 million, or $0.94 diluted earnings per share, for the three months ended March 31, 2018, and $10.2 million, or $0.59 diluted earnings per share, for the three months ended June 30, 2017. Management believes the core net income measure is important in evaluating the Corporation’s performance on a more comparable basis between periods. A reconciliation of this and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release.

“Our strategic initiatives and the benefits from the Royal Bank merger contributed to our strong second quarter results enabling us to increase the rate of growth of our loan portfolio by over 10% on an annualized basis and expand the contribution of key areas of fee income most notably in the wealth, insurance and capital markets groups," stated Frank Leto, President and Chief Executive Officer. Adding, "We expect to continue this momentum into the coming quarters."

"As I have noted in previous quarters, the benefits of the Tax Cuts and Jobs Act provides a unique opportunity for us to evaluate our strategy and the level and pace of the investments related to its execution. As we gain more clarity around the opportunity, it is apparent to us that we are uniquely positioned to exploit the current competitive landscape and that accelerating the investments in our business is an appropriate use for a portion of the excess earnings associated with the lower tax rates.” Leto continued, "To that end, we plan to invest additional resources to enhance our talent and technology with the explicit intent of improving our long-term growth trajectory, while at the same time increasing near-term shareholder return as evidenced by the increase in our quarterly dividend we announced today.”

The Board of Directors of the Corporation declared a quarterly dividend of $0.25 per share, an increase of $0.03 per share from the prior quarterly dividend, payable September 1, 2018 to shareholders of record as of August 1, 2018.

SIGNIFICANT ITEMS OF NOTE

Results of Operations – Second Quarter 2018 Compared to First Quarter 2018

  • Net income for the three months ended June 30, 2018 was $14.7 million, as compared to net income of $15.3 million for the three months ended March 31, 2018. The provision for loan and lease losses (the “Provision”) for the three months ended June 30, 2018 increased $2.1 million as compared to the first quarter 2018. Total noninterest income increased $539 thousand, total noninterest expense decreased $194 thousand, and income tax expense decreased $907 thousand for the three months ended June 30, 2018, as compared to the three months ended March 31, 2018.

    On a non-GAAP basis, core net income, which excludes Tax Cuts and Jobs Act ("Tax Reform") related income tax charges, due diligence and merger-related expenses and other non-core income and expense items, as detailed in the appendix to this earnings release, was $17.0 million, or $0.83 per diluted share, for the three months ended June 30, 2018, as compared to $19.3 million or $0.94 per diluted share, for the three months ended March 31, 2018. Management believes the core net income measure is important in evaluating the Corporation’s performance on a more comparable basis between periods. A reconciliation of this and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release.

  • Net interest income for the second quarter of 2018 remained relatively flat over the linked quarter ended March 31, 2018. Average interest-earning assets increased $75.1 million, primarily attributable to a $62.1 million increase of average loans and leases between the first and second quarters of 2018. The increase in interest-earning assets was accompanied by a $64.8 million increase in interest-bearing liabilities, which consisted of a $53.8 million increase of average interest-bearing deposits and an $11.0 million increase in average total borrowings between the first and second quarters of 2018.

  • Tax-equivalent net interest income for the three months ended June 30, 2018 was $37.4 million, a decrease of $96 thousand over the linked quarter. Excluding the effect of the accretion of purchase accounting fair value marks, the adjusted tax-equivalent net interest income increased $713 thousand between the second and first quarters of 2018.

    Tax-equivalent interest and fees on loans and leases for the three months ended June 30, 2018 increased $1.0 million over the linked quarter. Average loans and leases for the three months ended June 30, 2018 increased $62.1 million over the linked quarter and experienced a two basis point decrease in tax-equivalent yield.

    Average available for sale investment securities increased by $14.0 million over the linked quarter, and experienced a 7 basis point tax-equivalent yield increase. The increase in volume and yield on available for sale investment securities resulted in a $206 thousand increase in tax-equivalent interest income for the second quarter of 2018 as compared to the first quarter of 2018.

    Interest expense on deposits for the three months ended June 30, 2018 increased $1.0 million over the linked quarter. Average interest-bearing deposits increased $53.8 million accompanied by a 14 basis point increase in the rate paid on deposits. This increase of 14 basis points on our interest-bearing deposits was also a key driver in the decrease in the tax-equivalent net interest margin which decreased 4 basis points to 3.58% at June 30, 2018 compared to 3.62% in the linked quarter after adjusting for the impact of purchase accounting in both periods.

  • Noninterest income for the three months ended June 30, 2018 of $20.1 million increased $539 thousand from the first quarter of 2018. Items contributing to the increase included increases of $1.4 million, $350 thousand and $209 thousand in capital markets revenue, fees for wealth management services and insurance revenue, respectively.  The increases were partially offset by a $1.3 million decrease in other operating income primarily due to a $2.3 million recovery of a purchase accounting fair value mark recorded during the first quarter of 2018 as compared to a $710 thousand recovery of a purchase accounting fair value mark recorded during the second quarter of 2018.

  • Noninterest expense for the three months ended June 30, 2018 decreased $194 thousand, to $35.8 million, as compared to $36.0 million for the first quarter of 2018. The decrease on a linked quarter basis was primarily related to the decrease of $1.3 million in due diligence, merger-related and merger integration expenses. A reduction in merger-related expenses related to the Royal Bank merger was partially offset by increased merger-related expenses from the May 2018 acquisition of Domenick and Associates ("Domenick"). While much of the merger-related expenses associated with the Royal Bank merger were recorded at the time of the merger, certain expenses incurred in connection with the banking system conversion, contract terminations and lease terminations are recorded as they are incurred.

  • The Provision increased $1.0 million for the three months ended June 30, 2018 to $3.1 million, as compared the first quarter of 2018. The increase in the Provision was primarily related to the organic growth of the portfolio, and charge-offs of both collateral-dependent loans and leases that arose during the second quarter. For the three months ended June 30, 2018, net loan and lease charge-offs totaled $1.4 million, as compared to $893 thousand for the first quarter of 2018. Nonperforming loans and leases as of June 30, 2018 totaled $9.4 million, an increase of $1.9 million from March 31, 2018.

  • The effective tax rate for the second quarter of 2018 decreased to 20.2% from 23.3% for the first quarter of 2018.  The decrease was partially related to a decline in the projected effective tax rate for the year. In addition, a net discrete tax benefit of $111 thousand was recorded in the second quarter of 2018, as compared to a net discrete tax expense of $229 thousand in the first quarter of 2018. These discrete items were the result of excess tax benefits from stock-based compensation as well as the re-measurement of deferred tax items related to Tax Reform.

Results of Operations – Second Quarter 2018 Compared to Second Quarter 2017

  • Net income for the three months ended June 30, 2018 was $14.7 million, or $0.72 diluted earnings per share, as compared to $9.4 million, or diluted earnings per share of $0.55 for the same period in 2017. Contributing to the $5.3 million increase in net income was a $9.4 million increase in net interest income and increases of $1.8 million, $1.2 million, $959 thousand and $851 thousand in other operating income, capital markets revenue, insurance revenue and fees for wealth management services, respectively. These increases were partially offset by increases of $2.6 million, $1.8 million, $473 thousand and $450 thousand in salaries and wages, due diligence, merger-related and merger integration expenses, employee benefits and occupancy and bank premises expenses, respectively. These cost increases were primarily related to the addition of the Royal Bank staff and branch infrastructure and, to a lesser extent, the addition of Hirshorn Boothby in May 2017 and the establishment of our Capital Markets group in the second quarter of 2017. Also contributing to the net income increase was the reduction in our effective income tax rate as a result of Tax Reform, which decreased from 34.2% for the three months ended June 30, 2017 to 20.2% for the same period in 2018.

    On a non-GAAP basis, core net income, which excludes Tax Reform-related income tax charges, due diligence and merger-related expenses and other non-core income and expense items, as detailed in the appendix to this earnings release, was $17.0 million, or $0.83 per diluted share, for the three months ended June 30, 2018 as compared to $10.2 million, or $0.59 per diluted share, for the same period in 2017. Management believes the core net income measure is important in evaluating the Corporation’s performance on a more comparable basis between periods. A reconciliation of this and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release.
  • Tax-equivalent net interest income for the three months ended June 30, 2018 was $37.4 million, an increase of $9.2 million over the same period in 2017.

    Tax-equivalent interest and fees on loans and leases increased $12.5 million for the three months ended June 30, 2018 as compared to the same period in 2017.  Average loans and leases for the second quarter of 2018 increased $737.7 million from the same period in 2017 and experienced a 51 basis point increase in tax-equivalent yield.  Excluding the effect of the accretion of purchase accounting fair value marks on loans and leases, the adjusted tax-equivalent yield on loans and leases increased by 34 basis points between the second quarters of 2018 and 2017. The increase in average loans and leases for the second quarter of 2018 as compared to the same period in 2017 related to the loans and leases acquired in the Royal Bank merger which initially increased loans and leases by $567.3 million, as well as organic loan growth during the period.

    Average available for sale investment securities increased by $113.1 million for the three months ended June 30, 2018 as compared to the same period in 2017, and experienced a 24 basis point tax-equivalent yield increase. The increase in volume and yield on available for sale investment securities resulted in a $891 thousand increase in tax-equivalent interest income on available for sale investment securities for the second quarter of 2018 as compared to the same period in 2017.

    Partially offsetting the effect on net interest income associated with the increase in average loans and leases and available for sale investment securities was a $2.5 million increase in interest expense on deposits for the second quarter of 2018 as compared to the same period in 2017. Average interest-bearing deposits increased by $635.6 million, accompanied by a 29 basis point increase in rate paid between the second quarters of 2018 and 2017. The increase in average interest-bearing deposits between the second quarters of 2018 and 2017 was largely related to the interest-bearing deposits assumed in the Royal Bank merger, which initially totaled $494.8 million.

    In addition to the increased interest expense on deposits, a $556 thousand increase in interest expense on long- and short-term borrowings between the periods was attributed to a $36.9 million increase in average long- and short-term borrowings coupled with a 130 basis point increase in rate paid on long- and short-term borrowings for the three months ended June 30, 2018 as compared to the same period in 2017.

    Average subordinated notes for the three months ended June 30, 2018 increased $68.9 million as compared to the same period in 2017 with the rate paid decreasing by 36 basis points to 4.66% for the three months ended June 30, 2018.  The volume increase in subordinated notes was the result of the December 13, 2017 issuance of $70 million ten-year, 4.25% fixed-to-floating subordinated notes. Average junior subordinated debentures for the three months ended June 30, 2018 increased $21.5 million compared to the same period in 2017 as the Corporation acquired $21.4 million of floating rate junior subordinated debentures, currently at a 6.00% rate, in the Royal Bank merger.  The volume increase in both subordinated debt types and rate decrease in the subordinated notes in the second quarter of 2018 resulted in an increase in interest expense on subordinated notes and junior subordinated debentures of $773 thousand and $321 thousand, respectively, for the three months ended June 30, 2018 as compared to the same period in 2017.
  • The tax-equivalent net interest margin was 3.81% for the three months ended June 30, 2018 as compared to 3.68% for the same period in 2017. Adjusting for the impact of the accretion of purchase accounting fair value marks, the adjusted tax-equivalent net interest margin was 3.58% and 3.62% for three months ended June 30, 2018 and 2017, respectively. Key drivers responsible for the decrease four basis point decrease included the 29 basis point increase in rate paid on interest-bearing deposits coupled with increases of $68.9 million and $21.5 million in average subordinated notes and average junior subordinated debentures, respectively for the three months ended June 30, 2018 as compared to the same period in 2017.

  • Noninterest income for the three months ended June 30, 2018 increased by $5.3 million, to $20.1 million, from the same period in 2017. Increases of $1.8 million, $1.2 million, $959 thousand and $851 thousand in other operating income, capital markets revenue, insurance revenue and fees for wealth management services, respectively, were recorded. The increase in fees for wealth management services related to the $1.35 billion increase in wealth assets under management, administration, supervision and brokerage between June 30, 2018 and June 30, 2017. The increase in insurance commissions was primarily related to the May 2017 acquisition of Hirshorn Boothby and, to a lesser extent, the May 2018 acquisition of Domenick which further expanded our insurance division into the City of Philadelphia. Our Capital Markets group, which began operations in the second quarter of 2017, contributed significantly to our noninterest income totals. The $1.8 million increase in other operating income was primarily related to a $710 thousand recovery of a purchase accounting fair value mark resulting from the pay off, in full, of a purchased credit impaired loan acquired in the Royal Bank merger and a $310 thousand recovery during the second quarter of 2018 of loans and leases previously charged-off by Royal Bank.

  • Noninterest expense for the three months ended June 30, 2018 increased $7.3 million, to $35.8 million, from the same period in 2017. A majority of the increase related to the additional expenses associated with the staff and facilities assumed in the Royal Bank merger. In addition, the May 2017 acquisition of Hirshorn Boothby, the formation of our Capital Markets group in the second quarter of 2017, and, to a lesser extent, the May 2018 acquisition of Domenick contributed to the increase in noninterest expense. Due diligence, merger-related and merger integration expenses also experienced an increase of $1.8 million for the three months ended June 30, 2018 as compared to the same period in 2017, primarily related to the Royal Bank merger and the May 2018 acquisition of Domenick.

  • The Provision increased $3.2 million for the three months ended June 30, 2018 as compared to the same period in 2017. The increase in the Provision was primarily related to the organic growth of the portfolio, charge-offs of both collateral-dependent loans and non-performing leases that arose during the second quarter and to a lesser extent, adjustments in certain qualitative factors. Net charge-offs for the second quarter of 2018 were $1.4 million as compared to $625 thousand for the same period in 2017. Nonperforming loans and leases as of June 30, 2018 totaled $9.4 million, an increase of $2.2 million from June 30, 2017.

  • The effective tax rate for the second quarter of 2018 decreased to 20.2% from 34.2% for the second quarter of 2017, primarily due to the reduced tax rates as a result of Tax Reform.

Financial Condition – June 30, 2018 Compared to December 31, 2017

  • Total assets as of June 30, 2018 were $4.39 billion, a decrease of $55.5 million from December 31, 2017. Increases in portfolio loans and leases were largely offset by a decrease in available for sale investment securities discussed in the bullet point below.

  • Available for sale investment securities as of June 30, 2018 totaled $531.1 million, a decrease of $158.1 million from December 31, 2017. The decrease between the two periods is primarily due to the maturing, in January 2018, of $200 million of short-term U.S. Treasury bills, partially offset by increases of $32.2 million and $17.6 million in the U.S. government and agencies and the mortgage-backed securities segments of the portfolio, respectively.

  • Total portfolio loans and leases of $3.39 billion as of June 30, 2018 increased by $103.6 million from December 31, 2017, an increase of 3.2%. Increases of $90.3 million, $26.0 million, $17.2 million and $13.3 million in commercial mortgages, commercial and industrial loans, leases, and consumer loans, respectively, were offset by decreases of $21.6 million, $11.8 million and $9.8 million in construction loans, home equity loans and lines and residential mortgages, respectively, between the dates.

  • The allowance for loan and lease losses (the “Allowance”) as of June 30, 2018 was $19.4 million, or 0.57% of portfolio loans and leases, as compared to $17.5 million, or 0.53% of portfolio loans and leases as of December 31, 2017. In addition to the ratio of Allowance to portfolio loans and leases, management also calculates two non-GAAP measures: the Allowance of originated loans and leases as a percentage of originated loans and leases, which was 0.71% as of June 30, 2018, as compared to 0.70% as of December 31, 2017, and the Allowance plus the remaining loan mark as a percentage of gross loans, which was 1.35% as of June 30, 2018, as compared to 1.58% as of December 31, 2017. A reconciliation of these and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release.

  • Deposits of $3.36 billion as of June 30, 2018 decreased $14.9 million from December 31, 2017. Decreases of $48.1 million, $46.7 million, $25.5 million, and $32.5 million in money market accounts, savings accounts, wholesale non-maturity deposits, and noninterest-bearing deposits, respectively, were partially offset by a $135.9 million increase in interest-bearing demand accounts.

  • Borrowings of $434.9 million as of June 30, 2018, which include short-term borrowings, long-term FHLB advances, subordinated notes and junior subordinated debentures, decreased $62.0 million from December 31, 2017. The decrease was comprised of a $51.3 million decrease in long-term FHLB advances, and a $10.8 million decrease in short-term borrowings.

  • Wealth assets under management, administration, supervision and brokerage totaled $13.40 billion as of June 30, 2018, an increase of $436.0 million from December 31, 2017.

  • The capital ratios for the Bank and the Corporation, as of June 30, 2018, as shown in the attached tables, indicate levels above the regulatory minimum to be considered “well capitalized.”

FORWARD LOOKING STATEMENTS AND SAFE HARBOR
This press release contains statements which, to the extent that they are not recitations of historical fact may constitute forward-looking statements for purposes of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Such forward-looking statements may include financial and other projections as well as statements regarding the Corporation’s future plans, objectives, performance, revenues, growth, profits, operating expenses or the Corporation’s underlying assumptions. The words “may,” “would,” “should,” “could,” “will,” “likely,” “possibly,” “expect,” “anticipate,” “intend,” “indicate,” “estimate,” “target,” “potentially,” “promising,” “probably,” “outlook,” “predict,” “contemplate,” “continue,” “plan,” “forecast,” “project,” “are optimistic,” “are looking,” “are looking forward” and “believe” or other similar words and phrases may identify forward-looking statements. Persons reading this press release are cautioned that such statements are only predictions, and that the Corporation’s actual future results or performance may be materially different.

Such forward-looking statements involve known and unknown risks and uncertainties.   A number of factors, many of which are beyond the Corporation's control, could cause our actual results, events or developments, or industry results, to be materially different from any future results, events or developments expressed, implied or anticipated by such forward-looking statements, and so our business and financial condition and results of operations could be materially and adversely affected. Such factors include, among others, our inability to successfully integrate acquired businesses, the possibility that integration may take longer than anticipated or be more costly to complete and that the anticipated benefits, including any anticipated cost savings or strategic gains may be significantly harder to achieve or take longer than anticipated or may not be achieved, our need for capital, our ability to control operating costs and expenses, and to manage loan and lease delinquency rates; the credit risks of lending activities and overall quality of the composition of our loan, lease and securities portfolio; the impact of economic conditions, consumer and business spending habits, and real estate market conditions on our business and in our market area; changes in the levels of general interest rates, deposit interest rates, or net interest margin and funding sources; changes in banking regulations and policies and the possibility that any banking agency approvals we might require for certain activities will not be obtained in a timely manner or at all or will be conditioned in a manner that would impair our ability to implement our business plans; changes in accounting policies and practices; the inability of key third-party providers to perform their obligations to us; our ability to attract and retain key personnel; competition in our marketplace; war or terrorist activities; material differences in the actual financial results, cost savings and revenue enhancements associated with our acquisitions; and other factors as described in our securities filings.  All forward-looking statements and information set forth herein are based on management’s current beliefs and assumptions as of the date hereof and speak only as of the date they are made.  The Corporation does not undertake to update forward-looking statements.

For a complete discussion of the assumptions, risks and uncertainties related to our business, you are encouraged to review our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, as updated by our quarterly or other reports subsequently filed with the SEC.


Bryn Mawr Bank Corporation   
Summary Financial Information (unaudited)   
(dollars in thousands, except per share data)   
    
 As of or For the Three Months Ended For the Six Months Ended
 June 30,
2018
 March 31,
2018
 December 31,
2017
 September 30,
2017
 June 30,
2017
 June 30,
2018
 June 30,
2017
Consolidated Balance Sheet (selected items)             
Interest-bearing deposits with banks$39,924  $24,589  $48,367  $36,870  $30,806     
Investment securities547,088  550,199  701,744  482,399  452,869     
Loans held for sale4,204  5,522  3,794  6,327  8,590     
Portfolio loans and leases3,389,501  3,305,795  3,285,858  2,677,345  2,666,651     
Allowance for loan and lease losses ("ALLL")(19,398) (17,662) (17,525) (17,004) (16,399)    
Goodwill and other intangible assets208,139  207,287  205,855  128,534  129,211     
Total assets4,394,203  4,300,376  4,449,720  3,476,821  3,438,219     
Deposits - interest-bearing2,466,529  2,452,421  2,448,954  1,923,567  1,863,288     
Deposits - non-interest-bearing892,386  863,118  924,844  760,614  818,475     
Short-term borrowings227,059  173,704  237,865  180,874  130,295     
Long-term FHLB advances87,808  107,784  139,140  134,651  164,681     
Subordinated notes98,491  98,448  98,416  29,573  29,559     
Jr. subordinated debentures21,497  21,456  21,416         
Total liabilities3,851,700  3,767,315  3,921,601  3,074,929  3,043,242     
Total shareholders' equity542,503  533,061  528,119  401,892  394,977     
Average Balance Sheet (selected items)             
Interest-bearing deposits with banks37,215  38,044  43,962  26,628  26,266  37,627  32,931 
Investment securities549,249  535,471  499,968  462,700  429,400  542,398  411,453 
Loans held for sale4,413  2,848  3,966  3,728  3,855  3,635  4,045 
Portfolio loans and leases3,348,926  3,288,364  2,801,289  2,676,589  2,611,755  3,318,812  2,581,764 
Total interest-earning assets3,939,803  3,864,727  3,349,185  3,169,645  3,071,276  3,902,472  3,030,193 
Goodwill and intangible assets208,039  205,529  142,652  128,917  126,537  206,790  125,715 
Total assets4,344,541  4,246,180  3,640,667  3,441,906  3,333,307  4,295,637  3,288,928 
Deposits - interest-bearing2,489,296  2,435,491  2,031,170  1,871,494  1,853,660  2,464,618  1,852,931 
Short-term borrowings205,323  172,534  180,650  182,845  98,869  189,019  73,378 
Long-term FHLB advances102,023  123,920  134,605  155,918  171,567  112,911  177,006 
Subordinated notes98,463  98,430  43,844  29,564  29,550  98,447  29,544 
Jr. subordinated debentures21,470  21,430  3,957      21,450   
Total interest-bearing liabilities2,916,575  2,851,805  2,394,226  2,239,821  2,153,646  2,886,445  2,132,859 
Total liabilities3,810,640  3,719,746  3,213,349  3,044,549  2,943,591  3,769,498  2,902,942 
Total shareholders' equity533,901  526,434  427,318  397,357  389,716  526,139  385,986 


Bryn Mawr Bank Corporation   
Summary Financial Information (unaudited)   
(dollars in thousands, except per share data)   
    
 As of or For the Three Months Ended For the Six Months Ended
 June 30,
2018
 March 31,
2018
 December 31,
2017
 September 30,
2017
 June 30,
2017
 June 30,
2018
 June 30,
2017
Income Statement             
Net interest income$37,316  $37,439  $30,321  $29,438  $27,965  $74,755  $55,368 
Provision for loan and lease losses3,137  1,030  1,077  1,333  (83) 4,167  208 
Noninterest income20,075  19,536  15,536  15,584  14,785  39,611  28,012 
Noninterest expense35,836  36,030  31,056  28,184  28,495  71,866  55,155 
Income tax expense3,723  4,630  19,924  4,766  4,905  8,353  9,540 
Net income14,695  15,285  (6,200) 10,739  9,433  29,980  18,477 
Net income (loss) attributable to noncontrolling interest7  (1)       6   
Net income (loss) attributable to Bryn Mawr Bank Corporation14,688  15,286  (6,200) 10,739  9,433  29,974  18,477 
Basic earnings per share0.73  0.76  (0.35) 0.63  0.56  1.48  1.09 
Diluted earnings per share0.72  0.75  (0.35) 0.62  0.55  1.47  1.07 
Net income (core) (1)17,031  19,282  11,255  11,245  10,236  36,313  19,612 
Basic earnings per share (core) (1)0.84  0.95  0.64  0.66  0.60  1.80  1.16 
Diluted earnings per share (core) (1)0.83  0.94  0.63  0.65  0.59  1.78  1.14 
Dividends paid or accrued per share0.22  0.22  0.22  0.22  0.21  0.44  0.42 
Profitability Indicators             
Return on average assets1.36% 1.46% (0.68)% 1.24% 1.14% 1.41% 1.13%
Return on average equity11.03% 11.78% (5.76)% 10.72% 9.71% 11.49% 9.65%
Return on tangible equity(1)18.90% 20.15% (8.02)% 16.52% 15.06% 19.77% 15.01%
Return on tangible equity (core)(1)21.78% 25.19% 16.29% 17.27% 16.28% 23.76% 15.89%
Return on average assets (core)(1)1.57% 1.84% 1.23% 1.30% 1.23% 1.70% 1.20%
Return on average equity (core)(1)12.79% 14.85% 10.45% 11.23% 10.53% 13.92% 10.25%
Tax-equivalent net interest margin3.81% 3.94% 3.62% 3.71% 3.68% 3.87% 3.71%
Efficiency ratio(1)55.57% 54.12% 58.64% 59.30% 62.16% 54.85% 62.40%
Share Data             
Closing share price$46.30  $43.95  $44.20  $43.80  $42.50     
Book value per common share$26.80  $26.35  $26.19  $23.57  $23.25     
Tangible book value per common share$16.55  $16.14  $16.02  $16.03  $15.64     
Price / book value172.76% 166.79% 168.74% 185.82% 182.81%    
Price / tangible book value279.74% 272.35% 275.94% 273.19% 271.69%    
Weighted average diluted shares outstanding20,447,360  20,450,494  17,844,672  17,253,982  17,232,767  20,442,717  17,207,812 
Shares outstanding, end of period20,242,893  20,229,896  20,161,395  17,050,151  16,989,849     
Wealth Management Information:             
Wealth assets under mgmt, administration, supervision and brokerage (2)$13,404,723  $13,146,926  $12,968,738  $12,431,370  $12,050,555     
Fees for wealth management services$10,658  $10,308  $9,974  $9,651  $9,807     


Bryn Mawr Bank Corporation   
Summary Financial Information (unaudited)   
(dollars in thousands, except per share data)   
    
 As of or For the Three Months Ended For the Six Months Ended
 June 30,
2018
 March 31,
2018
 December 31,
2017
 September 30,
2017
 June 30,
2017
 June 30,
2018
 June 30,
2017
Capital Ratios             
Bryn Mawr Trust Company ("BMTC")             
Tier I capital to risk weighted assets ("RWA") (3)11.32% 11.29% 11.10% 10.78% 10.29%    
Total capital to RWA (3)11.89% 11.82% 11.65% 11.42% 10.90%    
Tier I leverage ratio (3)9.49% 9.39% 10.76% 8.79% 8.76%    
Tangible equity ratio (1)(3)9.27% 9.19% 8.67% 8.46% 8.24%    
Common equity Tier I capital to RWA (3)11.32% 11.29% 11.10% 10.78% 10.29%    
              
Bryn Mawr Bank Corporation ("BMBC")             
Tier I capital to RWA (3)10.44% 10.46% 10.42% 10.50% 10.10%    
Total capital to RWA (3)13.84% 13.93% 13.92% 12.23% 11.79%    
Tier I leverage ratio (3)8.75% 8.71% 10.10% 8.53% 8.63%    
Tangible equity ratio (1)(3)8.00% 7.98% 7.61% 8.16% 8.03%    
Common equity Tier I capital to RWA (3)9.84% 9.85% 9.87% 10.50% 10.10%    
              
Asset Quality Indicators             
Net loan and lease charge-offs ("NCO"s)$1,401  $893  $556  $728  $625  $3,578  $1,295 
              
Nonperforming loans and leases ("NPL"s)$9,448  $7,533  $8,579  $4,472  $7,237     
Other real estate owned ("OREO")531  300  304  865  1,122     
Total nonperforming assets ("NPA"s)$9,979  $7,833  $8,883  $5,337  $8,359     
              
Nonperforming loans and leases 30 or more days past due$6,749  $5,775  $6,983  $2,337  $4,076     
Performing loans and leases 30 to 89 days past due10,378  6,547  7,958  4,558  6,258     
Performing loans and leases 90 or more days past due             
Total delinquent loans and leases$17,127  $12,322  $14,941  $6,895  $10,334     
              
Delinquent loans and leases to total loans and leases0.50% 0.37% 0.45% 0.26% 0.39%    
Delinquent performing loans and leases to total loans and leases0.31% 0.20% 0.24% 0.17% 0.23%    
NCOs / average loans and leases (annualized)0.17% 0.11% 0.08% 0.11% 0.10% 0.22% 0.10%
NPLs / total portfolio loans and leases0.28% 0.23% 0.26% 0.17% 0.27%    
NPAs / total loans and leases and OREO0.29% 0.24% 0.27% 0.20% 0.31%    
NPAs / total assets0.23% 0.18% 0.20% 0.15% 0.24%    
ALLL / NPLs205.31% 234.46% 204.28% 380.23% 226.60%    
ALLL / portfolio loans0.57% 0.53% 0.53% 0.64% 0.61%    
ALLL on originated loans and leases / Originated loans and leases (1)0.71% 0.69% 0.70% 0.70% 0.68%    
(Total ALLL + Loan mark) / Total Gross portfolio loans and leases (1)1.35% 1.50% 1.58% 1.01% 1.03%    
              
Troubled debt restructurings ("TDR"s) included in NPLs$1,044  $1,125  $3,289  $2,033  $2,470     
TDRs in compliance with modified terms4,117  5,235  5,800  6,597  6,148     
Total TDRs$5,161  $6,360  $9,089  $8,630  $8,618     

(1)  Non-GAAP measure - see Appendix for Non-GAAP to GAAP reconciliation.
(2)  Brokerage assets represent assets held at a registered broker dealer under a clearing agreement.
(3)  Capital Ratios for the current quarter are to be considered preliminary until the Call Reports are filed.


Bryn Mawr Bank Corporation         
Detailed Balance Sheets (unaudited)         
(dollars in thousands)         
          
 June 30,
2018
 March 31,
2018
 December 31,
2017
 September 30,
2017
 June 30,
2017
Assets         
Cash and due from banks$7,318  $7,804  $11,657  $8,682  $19,352 
Interest-bearing deposits with banks39,924  24,589  48,367  36,870  30,806 
Cash and cash equivalents47,242  32,393  60,024  45,552  50,158 
Investment securities, available for sale531,075  534,103  689,202  471,721  443,687 
Investment securities, held to maturity7,838  7,885  7,932  6,255  5,161 
Investment securities, trading8,175  8,211  4,610  4,423  4,021 
Loans held for sale4,204  5,522  3,794  6,327  8,590 
Portfolio loans and leases, originated2,700,815  2,564,827  2,487,296  2,433,054  2,409,964 
Portfolio loans and leases, acquired688,686  740,968  798,562  244,291  256,687 
Total portfolio loans and leases3,389,501  3,305,795  3,285,858  2,677,345  2,666,651 
Less: Allowance for losses on originated loan and leases(19,181) (17,570) (17,475) (16,957) (16,374)
Less: Allowance for losses on acquired loan and leases(217) (92) (50) (47) (25)
Total allowance for loan and lease losses(19,398) (17,662) (17,525) (17,004) (16,399)
Net portfolio loans and leases3,370,103  3,288,133  3,268,333  2,660,341  2,650,252 
Premises and equipment54,185  54,986  54,458  44,544  44,446 
Accrued interest receivable13,115  12,521  14,246  9,287  8,717 
Mortgage servicing rights5,511  5,706  5,861  5,732  5,683 
Bank owned life insurance57,243  56,946  56,667  39,881  39,680 
Federal Home Loan Bank ("FHLB") stock16,678  15,499  20,083  16,248  15,168 
Goodwill183,162  182,200  179,889  107,127  107,127 
Intangible assets24,977  25,087  25,966  21,407  22,084 
Other investments16,774  11,720  12,470  8,941  8,682 
Other assets53,921  59,464  46,185  29,035  24,763 
Total assets$4,394,203  $4,300,376  $4,449,720  $3,476,821  $3,438,219 
          
Liabilities         
Deposits         
Noninterest-bearing$892,386  $863,118  $924,844  $760,614  $818,475 
Interest-bearing2,466,529  2,452,421  2,448,954  1,923,567  1,863,288 
Total deposits3,358,915  3,315,539  3,373,798  2,684,181  2,681,763 
Short-term borrowings227,059  173,704  237,865  180,874  130,295 
Long-term FHLB advances87,808  107,784  139,140  134,651  164,681 
Subordinated notes98,491  98,448  98,416  29,573  29,559 
Jr. subordinated debentures21,497  21,456  21,416     
Accrued interest payable5,230  4,814  3,527  2,267  2,830 
Other liabilities52,700  45,570  47,439  43,383  34,114 
Total liabilities3,851,700  3,767,315  3,921,601  3,074,929  3,043,242 
          
Shareholders' equity         
Common stock24,453  24,439  24,360  21,248  21,162 
Paid-in capital in excess of par value372,227  371,319  371,486  235,412  234,654 
Less: common stock held in treasury, at cost(68,943) (68,787) (68,179) (68,134) (67,091)
Accumulated other comprehensive (loss) income, net of tax(11,191) (9,664) (4,414) (1,400) (1,564)
Retained earnings226,635  216,438  205,549  214,766  207,816 
Total Bryn Mawr Bank Corporation shareholders' equity543,181  533,745  528,802  401,892  394,977 
Noncontrolling interest(678) (684) (683)    
Total shareholders' equity542,503  533,061  528,119  401,892  394,977 
Total liabilities and shareholders' equity$4,394,203  $4,300,376  $4,449,720  $3,476,821  $3,438,219 


Bryn Mawr Bank Corporation 
Supplemental Balance Sheet Information (unaudited) 
(dollars in thousands) 
  
 Portfolio Loans and Leases as of
 June 30, March 31, December 31, September 30, June 30,
20182018201720172017
Commercial mortgages$1,613,721  $1,541,457  $1,523,377  $1,224,571  $1,197,936 
Home equity loans and lines206,429  211,469  218,275  206,974  208,480 
Residential mortgages449,060  453,655  458,886  422,524  416,488 
Construction190,874  202,168  212,454  133,505  156,581 
Total real estate loans2,460,084  2,408,749  2,412,992  1,987,574  1,979,485 
Commercial & Industrial745,306  727,231  719,312  597,595  599,203 
Consumer51,462  48,423  38,153  31,306  28,485 
Leases132,649  121,392  115,401  60,870  59,478 
Total non-real estate loans and leases929,417  897,046  872,866  689,771  687,166 
Total portfolio loans and leases$3,389,501  $3,305,795  $3,285,858  $2,677,345  $2,666,651 
                    
 Nonperforming Loans and Leases as of
 June 30, March 31, December 31, September 30, June 30,
20182018201720172017
Commercial mortgages$1,010  $138  $872  $193  $818 
Home equity loans and lines2,323  1,949  1,481  613  1,535 
Residential mortgages2,647  2,603  4,417  1,589  2,589 
Total nonperforming real estate loans5,980  4,690  6,770  2,395  4,942 
Commercial & Industrial1,585  2,499  1,706  1,977  2,112 
Consumer        10 
Leases1,883  344  103  100  173 
Total nonperforming non-real estate loans and leases3,468  2,843  1,809  2,077  2,295 
Total nonperforming portfolio loans and leases$9,448  $7,533  $8,579  $4,472  $7,237 
                    
 Net Loan and Lease Charge-Offs (Recoveries) for the Three Months Ended
 June 30, March 31, December 31, September 30, June 30,
20182018201720172017
Commercial mortgage$13  $(3) $51  $(3) $(3)
Home equity loans and lines199  25  (5) 69  169 
Residential(1)   88  3  43 
Construction(1) (1) (1) (1) (1)
Total net charge-offs of real estate loans210  21  133  68  208 
Commercial & Industrial467  283  125  298  185 
Consumer41  48  55  36  16 
Leases683  541  243  326  216 
Total net charge-offs of non-real estate loans and leases1,191  872  423  660  417 
Total net charge-offs$1,401  $893  $556  $728  $625 
                    
  
 Investment Securities Available for Sale, at Fair Value
 June 30, March 31, December 31, September 30, June 30,
20182018201720172017
U.S. Treasury securities$100  $100  $200,088  $100  $100 
Obligations of the U.S. Government and agencies183,256  175,107  151,044  142,711  126,468 
State & political subdivisions - tax-free17,254  19,746  21,138  23,556  26,958 
State & political subdivisions - taxable171  171  172  524  524 
Mortgage-backed securities292,563  303,902  274,990  260,680  230,617 
Collateralized mortgage obligations36,634  33,980  36,662  39,595  42,549 
Other debt securities1,097  1,097  1,599  1,100  1,099 
Bond mutual funds        11,956 
Other investments    3,509  3,455  3,416 
Total investment securities available for sale, at fair value$531,075  $534,103  $689,202  $471,721  $443,687 
                    
 Unrealized Gain (Loss) on Investment Securities Available for Sale
 June 30, March 31, December 31, September 30, June 30,
20182018201720172017
U.S. Treasury securities$  $  $11  $  $ 
Obligations of the U.S. Government and agencies(4,594) (3,756) (1,984) (920) (699)
State & political subdivisions - tax-free(57) (74) (42) 23  11 
State & political subdivisions - taxable(1) (1)   1  1 
Mortgage-backed securities(6,141) (5,169) (968) 869  480 
Collateralized mortgage obligations(1,443) (1,322) (934) (640) (662)
Other debt securities(3) (3) (1)   (1)
Other investments    296  230  203 
Total unrealized (losses) gains on investment securities available for sale$(12,239) $(10,325) $(3,622) $(437) $(667)
                    
 Deposits
 June 30, March 31, December 31, September 30, June 30,
20182018201720172017
Interest-bearing deposits:         
Interest-bearing demand$617,258  $529,478  $481,336  $395,383  $381,345 
Money market814,530  856,072  862,639  720,613  729,859 
Savings291,858  308,925  338,572  264,273  254,903 
Retail time deposits536,287  523,138  532,202  316,068  321,982 
Wholesale non-maturity deposits36,826  63,449  62,276  48,620  54,675 
Wholesale time deposits169,770  171,359  171,929  178,610  120,524 
Total interest-bearing deposits2,466,529  2,452,421  2,448,954  1,923,567  1,863,288 
Noninterest-bearing deposits892,386  863,118  924,844  760,614  818,475 
Total deposits$3,358,915  $3,315,539  $3,373,798  $2,684,181  $2,681,763 
                    

 

Bryn Mawr Bank Corporation   
Detailed Income Statements (unaudited)   
(dollars in thousands, except per share data)   
    
 For the Three Months Ended For the Six Months Ended
 June 30,
2018
 March 31,
2018
 December 31,
2017
 September 30,
2017
 June 30,
2017
 June 30,
2018
 June 30,
2017
Interest income:             
Interest and fees on loans and leases$41,689  $40,689  $32,245  $30,892  $29,143  $82,378  $57,625 
Interest on cash and cash equivalents64  53  37  36  35  117  101 
Interest on investment securities3,001  2,792  2,516  2,270  2,059  5,793  3,837 
Total interest income44,754  43,534  34,798  33,198  31,237  88,288  61,563 
Interest expense:             
Interest on deposits4,499  3,472  2,739  2,198  1,983  7,971  3,811 
Interest on short-term borrowings985  630  579  547  237  1,615  264 
Interest on FHLB advances and other borrowings490  562  595  645  682  1,052  1,380 
Interest on jr. subordinated debentures321  288  46      609   
Interest on subordinated notes1,143  1,143  518  370  370  2,286  740 
Total interest expense7,438  6,095  4,477  3,760  3,272  13,533  6,195 
Net interest income37,316  37,439  30,321  29,438  27,965  74,755  55,368 
Provision for (recovery of) loan and lease losses (the "Provision")3,137  1,030  1,077  1,333  (83) 4,167  208 
Net interest income after Provision34,179  36,409  29,244  28,105  28,048  70,588  55,160 
Noninterest income:             
Fees for wealth management services10,658  10,308  9,974  9,651  9,807  20,966  19,110 
Insurance revenue1,902  1,693  1,510  1,373  943  3,595  1,706 
Capital markets revenue2,105  666  600  843  953  2,771  953 
Service charges on deposits752  713  655  676  630  1,465  1,277 
Loan servicing and other fees475  686  536  548  519  1,161  1,022 
Net gain on sale of loans528  518  493  799  520  1,046  1,149 
Net gain on sale of investment securities available for sale  7  28  72    7  1 
Net gain (loss) on sale of other real estate owned111  176  (92)   (12) 287  (12)
Dividends on FHLB and FRB stocks510  431  290  217  218  941  432 
Other operating income3,034  4,338  1,542  1,405  1,207  7,372  2,374 
Total noninterest income20,075  19,536  15,536  15,584  14,785  39,611  28,012 
Noninterest expense:             
Salaries and wages16,240  15,982  13,619  13,602  13,580  32,222  26,030 
Employee benefits2,877  3,708  2,717  2,560  2,404  6,585  4,893 
Occupancy and bank premises2,697  3,050  2,648  2,485  2,247  5,747  4,773 
Furniture, fixtures and equipment2,069  1,898  1,816  1,726  1,869  3,967  3,843 
Advertising369  461  386  277  405  830  791 
Amortization of intangible assets889  879  677  677  687  1,768  1,380 
(Recovery) impairment of mortgage servicing rights ("MSRs")(1) (50) (94) 3  43  (51) 46 
Due diligence, merger-related and merger integration expenses3,053  4,319  3,507  850  1,236  7,372  1,747 
Professional fees932  748  769  739  1,049  1,680  1,760 
Pennsylvania bank shares tax473  473  16  317  297  946  961 
Information technology1,252  1,195  1,006  880  821  2,447  1,695 
Other operating expenses4,986  3,367  3,989  4,068  3,857  8,353  7,236 
Total noninterest expense35,836  36,030  31,056  28,184  28,495  71,866  55,155 
Income before income taxes18,418  19,915  13,724  15,505  14,338  38,333  28,017 
Income tax expense3,723  4,630  19,924  4,766  4,905  8,353  9,540 
Net income$14,695  $15,285  $(6,200) $10,739  $9,433  $29,980  $18,477 
Net income (loss) attributable to noncontrolling interest7  (1)       6   
Net income attributable to Bryn Mawr Bank Corporation$14,688  $15,286  $(6,200) $10,739  $9,433  $29,974  $18,477 
              
Per share data:             
Weighted average shares outstanding20,238,852  20,202,969  17,632,697  17,023,046  16,984,563  20,221,010  16,969,431 
Dilutive common shares208,508  247,525  211,975  230,936  248,204  221,707  238,381 
Weighted average diluted shares20,447,360  20,450,494  17,844,672  17,253,982  17,232,767  20,442,717  17,207,812 
Basic earnings (loss) per common share$0.73  $0.76  $(0.35) $0.63  $0.56  $1.48  $1.09 
Diluted earnings (loss) per common share$0.72  $0.75  $(0.35) $0.62  $0.55  $1.47  $1.07 
Dividends paid or accrued per share$0.22  $0.22  $0.22  $0.22  $0.21  $0.44  $0.42 
Effective tax rate20.21% 23.25% 145.18% 30.74% 34.21% 21.79% 34.05%


Bryn Mawr Bank Corporation 
Tax-Equivalent Net Interest Margin (unaudited) 
(dollars in thousands, except per share data) 
  
 For The Three Months Ended
 For The Six Months Ended
 
 June 30, 2018
March 31, 2018
December 31, 2017
September 30, 2017
June 30, 2017
 June 30, 2018
June 30, 2017
 
(dollars in thousands)Average
 Interest
 Average
Average
 Interest
 Average
Average
 Interest
 Average
Average
 Interest
 Average
Average
 Interest
 Average 
 Average
 Interest
 Average
Average
 Interest
 Average
 
Balance
 Income/
 Rates Earned/
Balance
 Income/
 Rates Earned/
Balance
 Income/
 Rates Earned/
Balance
 Income/ 
 Rates Earned/
Balance
 Income/
 Rates Earned/
Balance
 Income/
 Rates Earned/
Balance
 Income/
 Rates Earned/
 
    Expense
 Paid
    Expense
 Paid
    Expense
 Paid
    Expense
 Paid
    Expense
 Paid
    Expense
 Paid
    Expense
 Paid
 
                          
Assets:                         
Interest-bearing deposits with other banks$37,215  $64 0.69%$38,044  $53 0.56%$43,962  $37 0.33%$26,628  $36 0.54%$26,266  $35 0.53% $37,627  $117 0.63%$32,931  $101 0.62% 
Investment securities - available for sale:                         
Taxable 514,966   2,888 2.25% 498,718   2,675 2.18% 465,393   2,394 2.04% 427,106   2,160 2.01% 391,112   1,940 1.99%  506,887   5,625 2.24% 372,772   3,620 1.96% 
Tax-exempt 18,215   93 2.05% 20,501   100 1.98% 22,640   127 2.23% 25,268   134 2.10% 28,970   150 2.08%  19,352   193 2.01% 30,221   314 2.10% 
Total investment securities - available for sale 533,181   2,981 2.24% 519,219   2,775 2.17% 488,033   2,521 2.05% 452,374   2,294 2.01% 420,082   2,090 2.00%  526,239   5,818 2.23% 402,993   3,934 1.97% 
                          
Investment securities - held to maturity 7,866   13 0.66% 7,913   12 0.62% 7,510   11 0.58% 6,044   11 0.72% 5,181   5 0.39%  7,889   4 0.10% 4,446   4 0.18% 
Investment securities - trading 8,202   22 1.08% 8,339   21 1.02% 4,425   25 2.24% 4,282   8 0.74% 4,137   13 1.26%  8,270   2 0.05% 4,014   2 0.10% 
                          
Loans and leases * 3,353,339   41,782 5.00% 3,291,212   40,754 5.02% 2,805,255   32,403 4.58% 2,680,317   31,058 4.60% 2,615,610   29,309 4.49%  3,322,447   82,536 5.01% 2,585,809   57,931 4.52% 
                          
Total interest-earning assets 3,939,803   44,862 4.57% 3,864,727   43,615 4.58% 3,349,185   34,997 4.15% 3,169,645   33,407 4.18% 3,071,276   31,452 4.11%  3,902,472   88,477 4.57% 3,030,193   61,972 4.12% 
                          
Cash and due from banks 7,153       10,698     6,855     15,709     15,727      8,916     15,336     
Less: allowance for loan and lease losses (18,043)      (17,628)    (17,046)    (16,564)    (17,549)     (17,837)    (17,564)    
Other assets 415,628       388,383     301,673     273,116     263,853      402,086     260,963     
                          
Total assets$4,344,541      $4,246,180    $3,640,667    $3,441,906    $3,333,307     $4,295,637    $3,288,928     
                          
Liabilities:                         
                          
Interest-bearing deposits:                         
Savings, NOW and market rate deposits$1,722,328  $2,073 0.48%$1,676,733  $1,479 0.36%$1,410,461  $897 0.25%$1,359,293  $823 0.24%$1,375,949  $813 0.24% $1,701,732  $3,552 0.42%$1,382,220  $1,569 0.23% 
Wholesale deposits 233,714   973 1.67% 231,289   733 1.29% 262,643   822 1.24% 190,849   548 1.14% 154,424   378 0.98%  232,508   1,706 1.48% 148,973   695 0.94% 
Retail time deposits 533,254   1,453 1.09% 527,469   1,260 0.97% 358,066   1,020 1.13% 321,352   827 1.02% 323,287   792 0.98%  530,378   2,713 1.03% 321,738   1,547 0.97% 
Total interest-bearing deposits 2,489,296   4,499 0.72% 2,435,491   3,472 0.58% 2,031,170   2,739 0.53% 1,871,494   2,198 0.47% 1,853,660   1,983 0.43%  2,464,618   7,971 0.65% 1,852,931   3,811 0.41% 
                          
Borrowings:                         
Short-term borrowings 205,323   985 1.92% 172,534   630 1.48% 180,650   579 1.27% 182,845   547 1.19% 98,869   237 0.96%  189,019   1,615 1.72% 73,378   264 0.73% 
Long-term FHLB advances 102,023   490 1.93% 123,920   562 1.84% 134,605   595 1.75% 155,918   645 1.64% 171,567   682 1.59%  112,911   1,052 1.88% 177,006   1,380 1.57% 
Jr. subordinated debt 21,470   321 6.00% 21,430   288 5.45% 3,957   46 4.61%              21,450   609 5.73%     % 
Subordinated notes 98,463   1,143 4.66% 98,430   1,143 4.71% 43,844   518 4.69% 29,564   370 4.97% 29,550   370 5.02%  98,447   2,286 4.68% 29,544   740 5.05% 
Total borrowings 427,279   2,939 2.76% 416,314   2,623 2.56% 363,056   1,738 1.90% 368,327   1,562 1.68% 299,986   1,289 1.72%  421,827   5,562 2.66% 279,928   2,384 1.72% 
                          
Total interest-bearing liabilities 2,916,575   7,438 1.02% 2,851,805   6,095 0.87% 2,394,226   4,477 0.74% 2,239,821   3,760 0.67% 2,153,646   3,272 0.61%  2,886,445   13,533 0.95% 2,132,859   6,195 0.59% 
                          
Noninterest-bearing deposits 841,676       835,476     771,519     764,562     755,597      840,571     733,817     
Other liabilities 52,389       32,465     47,604     40,166     34,348      42,482     36,266     
Total noninterest-bearing liabilities 894,065       867,941     819,123     804,728     789,945      883,053     770,083     
                          
Total liabilities 3,810,640       3,719,746     3,213,349     3,044,549     2,943,591      3,769,498     2,902,942     
                          
Shareholders' equity 533,901       526,434     427,318     397,357     389,716      526,139     385,986     
                          
Total liabilities and shareholders' equity$4,344,541      $4,246,180    $3,640,667    $3,441,906    $3,333,307     $4,295,637    $3,288,928     
                          
Net interest spread    3.55%  3.71%  3.41%  3.51%  3.50%   3.62%  3.53% 
Effect of noninterest-bearing sources    0.26%  0.23%  0.21%  0.20%  0.18%   0.25%  0.18% 
                          
Tax-equivalent net interest margin $37,424 3.81% $37,520 3.94% $30,520 3.62% $29,647 3.71% $28,180 3.68%  $74,944 3.87% $55,777 3.71% 
                          
Tax-equivalent adjustment $108 0.01% $81 0.01% $199 0.02% $209 0.03% $215 0.03%  $189 0.01% $409 0.03% 
                          
                                                                  


Bryn Mawr Bank Corporation
Tax-Equivalent Net Interest Margin (unaudited)
(dollars in thousands, except per share data)
 
Supplemental Information Regarding Accretion of Fair Value Marks
 For The Three Months Ended For The Six Months Ended
 June 30, 2018March 31, 2018December 31, 2017September 30, 2017June 30, 2017 June 30, 2018June 30, 2017
(dollars in thousands)InterestInc. /
(Dec.)
Effect on
Yield or
Rate
 Inc. /
(Dec.)
Effect on
Yield or
Rate
 Inc. /
(Dec.)
Effect on
Yield or
Rate
 Inc. /
(Dec.)
Effect on
Yield or
Rate
 Inc. /
(Dec.)
Effect on
Yield or
Rate
  Inc. /
(Dec.)
Effect on
Yield or
Rate
 Inc. /
(Dec.)
Effect on
Yield or
Rate
Loans and leasesIncome$1,945 0.23% $2,702 0.33% $276 0.04% $708 0.10% $402 0.06%  $4,647 0.28% $1,128 0.09%
Retail time depositsExpense(339)(0.25)% (380)(0.29)% (13)(0.01)% (15)(0.02)% (18)(0.02)%  (719)(0.27)% (37)(0.02)%
Long-term FHLB advances and other borrowingsExpense25 0.10% 15 0.05% (31)(0.09)% (30)(0.08)% (30)(0.07)%  40 0.07% (60)(0.07)%
Jr. subordinated debtExpense41 0.77% 40 0.76%  %  %  %  81 0.76%  %
Net interest income from fair value marks $2,218   $3,027   $320   $753   $450    $5,245   $1,225  
Purchase accounting effect on tax-equivalent margin  0.23%  0.32%  0.04%  0.09%  0.06%   0.27%  0.08%


Bryn Mawr Bank Corporation
Appendix - Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Performance Measures (unaudited)
(dollars in thousands, except per share data)
 
Statement on Non-GAAP Measures: The Corporation believes the presentation of the following non-GAAP financial measures provides useful supplemental information that is essential to an investor’s proper understanding of the results of operations and financial condition of the Corporation. Management uses non-GAAP financial measures in its analysis of the Corporation’s performance. These non-GAAP measures should not be viewed as substitutes for the financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
              
 As of or For the Three Months Ended For the Six Months Ended
 June 30,
2018
 March 31,
2018
 December 31,
2017
 September 30,
2017
 June 30,
2017
 June 30,
2018
 June 30,
2017
Reconciliation of Net Income to Net Income (core):             
Net income (loss) attributable to BMBC (a GAAP measure)$14,688  $15,286  $(6,200) $10,739  $9,433  $29,974  $18,477 
Less: Tax-effected non-core noninterest income:             
(Gain) loss on sale of investment securities available for sale  (6) (18) (47)   (6) (1)
Add: Tax-effected non-core noninterest expense items:             
Due diligence, merger-related and merger integration expenses2,412  3,412  2,280  553  803  5,824  1,136 
Add: Federal income tax expense related to re-measurement of net deferred tax asset due to tax reform legislation(69) 590  15,193      521   
Net income (core) (a non-GAAP measure)$17,031  $19,282  $11,255  $11,245  $10,236  $36,313  $19,612 
              
Calculation of Basic and Diluted Earnings per Common Share (core):             
Weighted average common shares outstanding20,238,852  20,202,969  17,632,697  17,023,046  16,984,563  20,221,010  16,969,431 
Dilutive common shares208,508  247,525  211,975  230,936  248,204  221,707  238,381 
Weighted average diluted shares20,447,360  20,450,494  17,844,672  17,253,982  17,232,767  20,442,717  17,207,812 
Basic earnings per common share (core) (a non-GAAP measure)$0.84  $0.95  $0.64  $0.66  $0.60  $1.80  $1.16 
Diluted earnings per common share (core) (a non-GAAP measure)$0.83  $0.94  $0.63  $0.65  $0.59  $1.78  $1.14 
              
Calculation of Return on Average Tangible Equity:             
Net income (loss) attributable to BMBC (a GAAP measure)$14,688  $15,286  $(6,200) $10,739  $9,433  $29,974  $18,477 
Add: Tax-effected amortization and impairment of intangible assets702  694  440  440  447  1,397  897 
Net tangible income (numerator)$15,390  $15,980  $(5,760) $11,179  $9,880  $31,371  $19,374 
              
Average shareholders' equity$533,901  $526,434  $427,318  $397,357  $389,716  $526,139  $385,986 
Less: Average Noncontrolling interest685  683  126      684   
Less: Average goodwill and intangible assets(208,039) (205,529) (142,652) (128,917) (126,537) (206,790) (125,715)
Net average tangible equity (denominator)$326,547  $321,588  $284,792  $268,440  $263,179  $320,033  $260,271 
              
Return on tangible equity (a non-GAAP measure)18.90% 20.15% (8.02)% 16.52% 15.06% 19.77% 15.01%
              
Calculation of Return on Average Tangible Equity (core):             
Net income (core) (a non-GAAP measure)$17,031  $19,282  $11,255  $11,245  $10,236  $36,313  $19,612 
Add: Tax-effected amortization and impairment of intangible assets702  694  440  440  447  1,397  897 
Net tangible income (core) (numerator)$17,733  $19,976  $11,695  $11,685  $10,683  $37,710  $20,509 
              
Average shareholders' equity$533,901  $526,434  $427,318  $397,357  $389,716  $526,139  $385,986 
Less: Average Noncontrolling interest685  683  126      684   
Less: Average goodwill and intangible assets(208,039) (205,529) (142,652) (128,917) (126,537) (206,790) (125,715)
Net average tangible equity (denominator)$326,547  $321,588  $284,792  $268,440  $263,179  $320,033  $260,271 
              
Return on tangible equity (core) (a non-GAAP measure)21.78% 25.19% 16.29% 17.27% 16.28% 23.76% 15.89%


Bryn Mawr Bank Corporation
Appendix - Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Performance Measures (unaudited)
(dollars in thousands, except per share data)
 
Statement on Non-GAAP Measures: The Corporation believes the presentation of the following non-GAAP financial measures provides useful supplemental information that is essential to an investor’s proper understanding of the results of operations and financial condition of the Corporation. Management uses non-GAAP financial measures in its analysis of the Corporation’s performance. These non-GAAP measures should not be viewed as substitutes for the financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
              
 As of or For the Three Months Ended For the Six Months Ended
 June 30,
2018
 March 31,
2018
 December 31,
2017
 September 30,
2017
 June 30,
2017
 June 30,
2018
 June 30,
2017
Calculation of Tangible Equity Ratio (BMBC):             
Total shareholders' equity$542,503  $533,061  $528,119  $401,892  $394,977     
Less: Noncontrolling interest678  684  683         
Less: Goodwill and intangible assets(208,139) (207,287) (205,855) (128,534) (129,211)    
Net tangible equity (numerator)$335,042  $326,458  $322,947  $273,358  $265,766     
              
Total assets$4,394,203  $4,300,376  $4,449,720  $3,476,821  $3,438,219     
Less: Goodwill and intangible assets(208,139) (207,287) (205,855) (128,534) (129,211)    
Tangible assets (denominator)$4,186,064  $4,093,089  $4,243,865  $3,348,287  $3,309,008     
              
Tangible equity ratio (BMBC)(1)8.00% 7.98% 7.61% 8.16% 8.03%    
              
Calculation of Tangible Equity Ratio (BMTC):             
Total shareholders' equity$582,354  $569,670  $559,581  $398,431  $388,529     
Less: Noncontrolling interest678  684  683         
Less: Goodwill and intangible assets(195,245) (194,316) (192,807) (115,410) (116,009)    
Net tangible equity (numerator)$387,787  $376,038  $367,457  $283,021  $272,520     
              
Total assets$4,378,508  $4,284,334  $4,430,528  $3,459,996  $3,421,587     
Less: Goodwill and intangible assets(195,245) (194,316) (192,807) (115,410) (116,009)    
Tangible assets (denominator)$4,183,263  $4,090,018  $4,237,721  $3,344,586  $3,305,578     
              
Tangible equity ratio (BMTC)(1)9.27% 9.19% 8.67% 8.46% 8.24%    
              
Calculation of Return on Average Assets (core)             
Return on average assets (GAAP)1.36% 1.46% (0.68)% 1.24% 1.14% 1.41% 1.13%
Effect of adjustment to GAAP net income to core net income0.22% 0.38% 1.90% 0.06% 0.10% 0.30% 0.07%
Return on average assets (core)1.57% 1.84% 1.23% 1.30% 1.23% 1.70% 1.20%
              
Calculation of Return on Average Equity (core)             
Return on average equity (GAAP)11.03% 11.78% (5.76)% 10.72% 9.71% 11.49% 9.65%
Effect of adjustment to GAAP net income to core net income1.76% 3.08% 16.21% 0.51% 0.83% 2.43% 0.59%
Return on average equity (core)12.79% 14.85% 10.45% 11.23% 10.53% 13.92% 10.25%

(1)  Capital Ratios for the current quarter are to be considered preliminary until the Call Reports are filed.


Bryn Mawr Bank Corporation
Appendix - Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Performance Measures (unaudited)
(dollars in thousands, except per share data)
 
Statement on Non-GAAP Measures: The Corporation believes the presentation of the following non-GAAP financial measures provides useful supplemental information that is essential to an investor’s proper understanding of the results of operations and financial condition of the Corporation. Management uses non-GAAP financial measures in its analysis of the Corporation’s performance. These non-GAAP measures should not be viewed as substitutes for the financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
              
 As of or For the Three Months Ended For the Six Months Ended
 June 30,
2018
 March 31,
2018
 December 31,
2017
 September 30,
2017
 June 30,
2017
 June 30,
2018
 June 30,
2017
Calculation of Efficiency Ratio:             
Noninterest expense$35,836  $36,030  $31,056  $28,184  $28,495  $71,866  $55,155 
Less: certain noninterest expense items*:             
Amortization of intangibles(889) (879) (677) (677) (687) (1,768) (1,380)
Due diligence, merger-related and merger integration expenses(3,053) (4,319) (3,507) (850) (1,236) (7,372) (1,747)
Noninterest expense (adjusted) (numerator)$31,894  $30,832  $26,872  $26,657  $26,572  $62,726  $52,028 
              
Noninterest income$20,075  $19,536  $15,536  $15,584  $14,785  $39,611  $28,012 
Less: non-core noninterest income items:             
Loss (gain) on sale of investment securities available for sale  (7) (28) (72)   (7) (1)
Noninterest income (core)$20,075  $19,529  $15,508  $15,512  $14,785  $39,604  $28,011 
Net interest income37,316  37,439  30,321  29,438  27,965  74,755  55,368 
Noninterest income (core) and net interest income (denominator)$57,391  $56,968  $45,829  $44,950  $42,750  $114,359  $83,379 
              
Efficiency ratio55.57% 54.12% 58.64% 59.30% 62.16% 54.85% 62.40%
              
Supplemental Loan and Allowance Information Used to Calculate Non-GAAP Measures             
Total Allowance$19,398  $17,662  $17,525  $17,004  $16,399     
Less: Allowance on acquired loans217  92  50  47  25     
Allowance on originated loans and leases$19,181  $17,570  $17,475  $16,957  $16,374     
              
Total Allowance$19,398  $17,662  $17,525  $17,004  $16,399     
Loan mark on acquired loans26,705  32,260  34,790  10,223  11,084     
Total Allowance + Loan mark$46,103  $49,922  $52,315  $27,227  $27,483     
              
Total Portfolio loans and leases$3,389,501  $3,305,795  $3,285,858  $2,677,345  $2,666,651     
Less: Originated loans and leases2,700,815  2,564,827  2,487,296  2,433,054  2,409,964     
Net acquired loans$688,686  $740,968  $798,562  $244,291  $256,687     
Add: Loan mark on acquired loans26,705  32,260  34,790  10,223  11,084     
Gross acquired loans (excludes loan mark)$715,391  $773,228  $833,352  $254,514  $267,771     
Originated loans and leases2,700,815  2,564,827  2,487,296  2,433,054  2,409,964     
Total Gross portfolio loans and leases$3,416,206  $3,338,055  $3,320,648  $2,687,568  $2,677,735     

*  In calculating the Corporation's efficiency ratio, which is used by Management to identify the cost of generating each dollar of core revenue, certain non-core income and expense items as well as the amortization of intangible assets, are excluded.


FOR MORE INFORMATION CONTACT:
Frank Leto, President, CEO
610-581-4730
Mike Harrington, CFO
610-526-2466