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Bryn Mawr Bank Corporation Reports Record Quarterly Net Income, Wealth Assets Top $12 Billion, Dividend Increases by 5%

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BRYN MAWR, Pa., July 20, 2017 (GLOBE NEWSWIRE) -- Bryn Mawr Bank Corporation (NASDAQ:BMTC) (the "Corporation"), parent of The Bryn Mawr Trust Company (the "Bank"), today reported net income of $9.4 million and diluted earnings per share of $0.55 for the three months ended June 30, 2017, as compared to net income of $9.0 million, or $0.53 diluted earnings per share, for the three months ended March 31, 2017 and $8.9 million, or $0.52 diluted earnings per share, for the three months ended June 30, 2016. Included in net income for the three months ended June 30, 2017 and March 31, 2017 were pre-tax due diligence and merger-related expenses of $1.2 million and $511 thousand, respectively, with the 2017 figures primarily related to the pending merger with Royal Bancshares of Pennsylvania, Inc. ("Royal Bank").

On a non-GAAP basis, core net income, which excludes certain non-core income and expense items, as detailed in the appendix to this earnings release, was $10.2 million, or $0.59 diluted earnings per share, for the three months ended June 30, 2017 as compared to $9.4 million, or $0.55 diluted earnings per share, for the three months ended March 31, 2017 and $9.0 million, or $0.53 diluted earnings per share, for the three months ended June 30, 2016. 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.

"We are very pleased with the results for the second quarter," commented Frank Leto, President and Chief Executive Officer, continuing, "For the first time in the Corporation's history, our core net income exceeded $10 million for the quarter and our wealth assets have exceeded the $12 billion mark."

Mr. Leto continued, "Not only is the growth in our loan portfolio strong, increasing 4.4% from March 31, 2017 to June 30, 2017, the credit quality of the portfolio remains stable, as evidenced by the reduced provision for loan and lease losses recorded this quarter. In addition, noninterest income was boosted by the outstanding performance of our newly established capital markets group, which opened for business in May 2017 and has already recorded revenue of $953 thousand for the quarter."

On the corporate development front, Mr. Leto noted, "The Royal Bank merger preparations are continuing, with the close of the transaction expected in the third quarter of 2017. In addition, the May 2017 acquisition of Hirshorn Boothby, located in Chestnut Hill, Philadelphia, along with the opening of our Princeton wealth management office, positions us well to capitalize on the expanded footprint that will be created by the addition of the Royal Bank branch network."

The acquisition of Royal Bank is subject to applicable regulatory approvals and is also subject to certain closing conditions.

On July 20, 2017, the Board of Directors of the Corporation declared a quarterly dividend of $0.22 per share, payable September 1, 2017 to shareholders of record as of August 2, 2017. This represents a $0.01, or 4.8%, increase from the previous quarter.

SIGNIFICANT ITEMS OF NOTE
Results of Operations – Second Quarter 2017 Compared to First Quarter 2017

  • Net income for the three months ended June 30, 2017 was $9.4 million, or $0.55 diluted earnings per share, as compared to $9.0 million, or $0.53 diluted earnings per share for the three months ended March 31, 2017. Contributing to the increase was a $562 thousand increase in net interest income, a $374 thousand decrease in provision for loan and lease loss (the "Provision") and an increase of $504 thousand in fees for wealth management services and the addition of $953 thousand in capital markets revenue, related to our newly-established capital markets group. Partially offsetting these items were increases of $1.1 million in salaries and wages, $725 thousand in due diligence, merger-related and merger integration costs and $477 thousand in other operating expenses.
     
  • Net interest income for the three months ended June 30, 2017 was $28.0 million, an increase of $562 thousand from $27.4 million for the three months ended March 31, 2017. Average interest-earning assets increased by $82.6 million, with average loans increasing $59.9 million and average available for sale investment securities increasing $34.4 million. The tax-equivalent yield earned on available for sale investment securities increased by 9 basis points while the tax-equivalent yield earned on loans decreased by 5 basis points.  In conjunction with the Royal Bank merger, management intends to immediately sell certain acquired investment securities. In anticipation of these investment sales, management has begun purchasing certain securities that more closely align with the management's desired liquidity and interest rate risk profile.
     
  • The tax-equivalent net interest margin of 3.68% for the second quarter of 2017 decreased 6 basis points from 3.74% for the first quarter of 2017.  During the second quarter of 2017, the accretion of purchase accounting adjustments contributed a 6 basis point increase in the tax-equivalent net interest margin as compared to an 11 basis point increase for the three months ended March 31, 2017.  Excluding the effect of the accretion of purchase accounting adjustments, the tax-equivalent net interest margin remained relatively flat quarter over quarter with the tax-equivalent yield on average loans increasing 1 basis point over the first quarter and the tax-equivalent yield on available for sale investment securities increasing 9 basis points, as management positions the investment portfolio in anticipation of the Royal Bank merger as described in the previous bullet point.
     
  • Non-interest income for the three months ended June 30, 2017 increased by $1.6 million from the first quarter of 2017. Largely contributing to this increase was an increase of $504 thousand in revenue for wealth management services, $310 thousand of which was related to tax services provided during the quarter, a $180 thousand increase in insurance revenues attributed to the May 2017 acquisition of Hirshorn Boothby, and a $953 thousand contribution from the newly-established capital markets group related to interest-rate swap fee income.
     
  • Non-interest expense for the three months ended June 30, 2017 increased $1.8 million, to $28.5 million, as compared to $26.7 million for the first quarter of 2017. The significant contributors to this increase included a $1.1 million increase in salaries and wages largely related to staffing additions in connection with the Hirshorn Boothby acquisition, the Capital Markets initiative and the Princeton wealth management office, as well as increases in incentive compensation along with an increase of $725 thousand in due diligence, merger-related and merger integration costs, most of which was related to the Royal Bank merger. Additionally, other operating expenses increased by $477 thousand related to a $117 thousand increase in deferred compensation expense associated with the valuation of Corporation stock held in the deferred compensation trusts and $200 thousand increase in impairment of other real estate owned ("OREO")  and repossessed assets. Partially offsetting these increases was a $367 thousand decrease in Pennsylvania bank shares tax resulting from changes in revenue apportionment for 2016 and tax credits connected to contributions to local schools under the Pennsylvania Educational Improvement Tax Credit (EITC) program.
     
  • For the three months ended June 30, 2017, net loan and lease charge-offs totaled $625 thousand, as compared to $670 thousand for the first quarter of 2017. The Provision for the three months ended June 30, 2017 was a release of $83 thousand as compared to a Provision of $291 thousand for the first quarter of 2017.  The decrease in the Provision was primarily related to a decline in certain historic charge-off rates over the look-back period, along with improvements in certain economic indicators which factor into the calculation of the overall allowance for loan and lease losses (the "Allowance") requirement.
     
  • Income tax expense for the second quarter of 2017 increased by $270 thousand as compared to the first quarter of 2016. The 33 basis point increase in the effective tax rate from the first quarter of 2017 to the second quarter of 2017 was primarily the result of certain non-deductible merger expenses incurred in the second quarter of 2017.

Results of Operations – Second Quarter 2017 Compared to Second Quarter 2016

  • Net income for the three months ended June 30, 2017 was $9.4 million, or $0.55 diluted earnings per share, as compared to $8.9 million, or diluted earnings per share of $0.52, for the same period in 2016. Contributing to the increase in net income was an increase of $1.3 million in net interest income, a decrease of $528 thousand in Provision, as well as increases of $376 thousand in fees for wealth management services and $953 thousand in capital markets revenue. Partially offsetting these changes were decreases of $337 thousand in gain on sale of loans, along with increases of $1.4 million in salaries and wages and $1.2 million in due diligence, merger-related and merger integration costs.
     
  • Net interest income for the three months ended June 30, 2017 was $28.0 million, an increase of $1.3 million, or 5.0%, from $26.6 million for the same period in 2016.  The accretion of purchase accounting adjustments positively impacted the tax-equivalent net interest income recorded for the second quarter of 2017 by $450 thousand, as compared to $1.2 million for the same period in 2016. Average loans and leases for the three months ended June 30, 2017 increased by $203.0 million from the same period in 2016. Excluding the effect of the accretion of purchase accounting adjustments, the tax-equivalent yield on loans and leases decreased 2 basis points. The net effect of the yield decrease and volume increase on average loans and leases was a $2.2 million increase in tax-equivalent interest income on loans. Average available for sale investment securities increased by $55.0 million for the three months ended June 30, 2017 as compared to the same period in 2016, and experienced a 22 basis point tax-equivalent yield increase. The increase in volume and yield on available for sale investment securities resulted in a $470 thousand increase in tax-equivalent interest income for the second quarter of 2017 as compared to the same period in 2016. Partially offsetting the increase in average loans and available for sale investment securities was a $136.4 million increase in average interest-bearing deposits accompanied by a 10 basis point increase in rate paid on deposits resulting in a $581 thousand increase in interest expense for the second quarter of 2017 as compared to the same period in 2016.
     
  • The tax-equivalent net interest margin of 3.68% for the three months ended June 30, 2017 was a 13 basis point decrease from 3.81% for the same period in 2016. The decrease was largely related to the lower contribution to the tax-equivalent net interest margin from the accretion of purchase accounting adjustments. For the second quarter of 2017, the accretion of purchase accounting adjustments contributed 6 basis points to the tax-equivalent net interest margin as compared to 17 basis points for the same period in 2016.   Excluding the effect of the accretion of purchase accounting adjustments, the tax-equivalent net interest margin decreased 2 basis points over the prior year quarter with the tax-equivalent yield on average loans decreasing 2 basis points over the prior year quarter. The tax-equivalent yield on available for sale investment securities increased 22 basis points, as management positions the investment portfolio in anticipation of the Royal Bank merger. The slight decline in the margin was also attributed to a 10 basis point increase in rate paid on deposits.
     
  • Non-interest income for the three months ended June 30, 2017 increased by $1.0 million from the same period in 2016. An increase of $376 thousand in fees for wealth management services, as a 25.1% increase in wealth assets from the June 30, 2016 level, and the $953 thousand in revenue generated by the Capital Markets initiative, were partially offset by a decrease of $337 thousand in gain on sale of loans, as origination activity has slowed from the same period in 2016.
     
  • Non-interest expense for the three months ended June 30, 2017 increased $2.3 million from the same period in 2016. The increase was related to a $1.4 million increase in salary and wages due to staffing increases from the Capital Markets initiative, the Hirshorn Boothby acquisition and the Princeton wealth management office, in addition to annual salary and wage increases and increases in incentive compensation, and a $1.2 million increase in due diligence, merger-related and merger integration costs primarily related to the Royal Bank merger, and a $782 thousand increase in other operating expenses, largely related to increases in contributions (which were offset by tax credits for Pennsylvania bank shares tax) and impairments of OREO and repossessed assets recorded in the second quarter of 2017.
     
  • For the three months ended June 30, 2017, the Corporation recorded a release from Allowance of $83 thousand as compared to a Provision of $445 thousand for the same period in 2016. Net charge-offs for the second quarter of 2017 were $625 thousand as compared to $254 thousand for the same period in 2016. The decrease in the Provision was primarily related to a decline in certain historic charge-off rates over the look-back period, along with improvements in certain economic indicators which factor into the calculation of the overall Allowance.

Financial Condition – June 30, 2017 Compared to December 31, 2016

  • Total portfolio loans and leases of $2.67 billion as of June 30, 2017, increased by $131.2 million from December 31, 2016. Loan growth was concentrated in the commercial mortgage, construction and commercial and industrial sections of the portfolio, which increased by $87.0 million, or  7.8%, $14.6 million, or 10.3% and $19.4 million, or 3.4%, respectively.
     
  • The Allowance as of June 30, 2017 was $16.4 million, or 0.61% of portfolio loans as compared to $17.5 million, or 0.69% of portfolio loans and leases, as of December 31, 2016. In addition to the ratio of Allowance to portfolio loans, management also calculates two non-GAAP measures: the Allowance as a percentage of originated loans and leases, which was 0.68% as of June 30, 2017, as compared to 0.78% as of December 31, 2016, and the Allowance plus the remaining loan mark as a percentage of gross loans, which was 1.03% as of June 30, 2017, as compared to 1.17% as of December 31, 2016. A reconciliation of these and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release. The decrease in the Allowance ratios was primarily the result of improvements in certain economic indicators as well as decreases in average historic charge-off rates over the lookback period, both of which factor into the calculation of the overall Allowance requirement.
     
  • Available for sale investment securities as of June 30, 2017 were $443.7 million, a decrease of $123.3 million from December 31, 2016. Excluding the maturing, in January 2017, of $200 million of short-term U.S. Treasury bills, the available for sale investment portfolio has increased by $76.7 million since December 31, 2016, primarily in the U.S. government and agencies and the mortgage-backed securities segments of the portfolio. As previously mentioned the Corporation has begun positioning the investment portfolio in anticipation of the Royal Bank merger.
     
  • Total assets as of June 30, 2017 were $3.44 billion, an increase of $16.7 million from December 31, 2016. Increases in portfolio loans and leases were largely offset by a decrease in available for sale investment securities discussed in the previous bullet point.
     
  • Wealth assets under management, administration, supervision and brokerage totaled $12.05 billion as of June 30, 2017, an increase of $722.1 million from December 31, 2016. The increase in wealth assets was comprised of a $291.5 million increase in account balances whose fees are based on market value, and a $430.6 million increase in fixed rate flat-fee account types.
     
  • Deposits of $2.68 billion as of June 30, 2017 increased $102.1 million from December 31, 2016. Over 80% of this increase was in noninterest-bearing deposits, which grew by $82.3 million. The increase in noninterest-bearing deposits was primarily in small business accounts.
     
  • Borrowings of $295.0 million as of June 30, 2017 decreased $98.9 million from December 31, 2016. The decrease was comprised of a $73.9 million decrease in short-term borrowings and a $25.1 million decrease in long-term FHLB advances. In January 2017, $200 million of short-term borrowings associated with the maturing of $200 million of short-term U.S. Treasury bills were repaid.  The net increase in short-term borrowings of $126.1 million were utilized to support the available for sale investment purchases and to replace $25.1 million of long-term FHLB advances which matured during the first half of 2017.

  • The capital ratios for the Bank and the Corporation, as of June 30, 2017, as shown in the attached tables, indicate levels well above the regulatory minimum to be considered "well capitalized." At both the Bank and Corporation levels, the capital ratios to risk-weighted assets have all decreased from their December 31, 2016 levels largely as a result of the increase in risk-weighted assets, much of which was in the commercial mortgage, construction, and commercial and industrial segments of the loan portfolio, which are typically risk-weighted at 100%.

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 obtain applicable regulatory approvals with respect to, or our inability to complete, the contemplated Royal Bank acquisition, that the integration of acquired businesses with the Corporation 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, 2017   March 31, 2017   December 31, 2016   September 30, 2016   June 30, 2016   June 30, 2017   June 30, 2016    
Consolidated Balance Sheet (selected items)                              
Interest-bearing deposits with banks $ 30,806     $ 69,978     $ 34,206     $ 30,118     $ 20,481              
Investment securities (AFS, HTM and Trading)   452,869       400,360       573,763       373,508       371,906              
Loans held for sale   8,590       3,015       9,621       11,506       11,882              
Portfolio loans and leases   2,666,651       2,555,589       2,535,425       2,493,357       2,423,821              
Allowance for loan and lease losses ("ALLL")   (16,399 )     (17,107 )     (17,486 )     (17,744 )     (17,036 )            
Goodwill and other intangible assets   129,211       124,629       125,170       126,000       126,888              
Total assets   3,438,219       3,292,617       3,421,530       3,174,080       3,090,090              
Deposits - interest-bearing   1,863,288       1,865,009       1,843,495       1,759,862       1,720,477              
Deposits - non-interest-bearing   818,475       771,556       736,180       718,015       689,214              
Short-term borrowings   130,295       23,613       204,151       50,065       19,119              
Long-term FHLB advances and other borrowings   164,681       174,711       189,742       204,772       224,802              
Subordinated notes   29,559       29,546       29,532       29,518       29,505              
Total liabilities   3,043,242       2,904,522       3,040,403       2,795,621       2,717,623              
Shareholders' equity   394,977       388,095       381,127       378,459       372,467              
                               
Average Balance Sheet (selected items)                              
Interest-bearing deposits with banks $ 26,266     $ 39,669     $ 55,298     $ 33,532     $ 44,950     $ 32,931     $ 42,000      
Investment securities (AFS, HTM and Trading)   429,400       393,306       386,658       373,616       371,153       411,453       366,055      
Loans held for sale   3,855       4,238       11,591       12,887       7,844       4,045       6,662      
Portfolio loans and leases   2,611,755       2,551,439       2,506,376       2,464,085       2,404,799       2,581,764       2,353,951      
Total interest-earning assets   3,071,276       2,988,652       2,959,923       2,884,120       2,828,746       3,030,193       2,768,668      
Goodwill and intangible assets   126,537       124,884       125,614       126,505       127,402       125,715       127,849      
Total assets   3,333,307       3,244,060       3,215,868       3,142,019       3,089,953       3,288,928       3,031,550      
Deposits - interest-bearing   1,853,660       1,852,194       1,809,276       1,729,689       1,717,252       1,852,931       1,675,451      
Short-term borrowings   98,869       47,603       40,629       40,966       32,328       73,378       33,243      
Long-term FHLB advances and other borrowings   171,567       182,507       198,454       218,920       236,248       177,006       243,131      
Subordinated notes   29,550       29,537       29,523       29,509       29,496       29,544       29,489      
Total interest-bearing liabilities   2,153,646       2,111,841       2,077,882       2,019,084       2,015,324       2,132,859       1,981,314      
Total liabilities   2,943,591       2,861,846       2,837,825       2,769,065       2,723,838       2,902,942       2,668,056      
Shareholders' equity   389,716       382,214       378,043       372,954       366,115       385,986       363,494      
                               
Income Statement                              
Net interest income $ 27,965     $ 27,403     $ 26,990     $ 26,717     $ 26,627     $ 55,368     $ 52,529      
Provision for loan and lease losses   (83 )     291       1,059       1,412       445       208       1,855      
Noninterest income   14,785       13,227       13,248       13,786       13,781       28,012       27,028      
Noninterest expense   28,495       26,660       25,087       25,371       26,220       55,155       51,310      
Income tax expense (benefit)     4,905         4,635         4,684         4,346         4,810         9,540         9,137      
Net income   9,433       9,044       9,408       9,374       8,933       18,477       17,255      
Basic earnings per share   0.56       0.53       0.56       0.56       0.53       1.09       1.02      
Diluted earnings per share   0.55       0.53       0.55       0.55       0.52       1.07       1.01      
Net income (core) (1)   10,236       9,375       9,402       9,392       8,961       19,612       17,232      
Basic earnings per share (core) (1)   0.60       0.55       0.56       0.56       0.53       1.16       1.02      
Diluted earnings per share (core) (1)   0.59       0.55       0.55       0.55       0.53       1.14       1.02      
Cash dividends paid per share   0.21       0.21       0.21       0.21       0.20       0.42       0.40      
Profitability Indicators                                                          
Return on average assets   1.14%       1.13%       1.16%       1.19%       1.16%       1.13%       1.14%      
Return on average equity   9.71%       9.60%       9.90%       10.00%       9.81%       9.65%       9.55%      
Return on tangible equity(1)   15.06%       14.96%       15.68%       16.06%       16.02%       15.01%       15.71%      
Tax-equivalent net interest margin   3.68%       3.74%       3.65%       3.71%       3.81%       3.71%       3.84%      
Efficiency ratio(1)   62.16%       62.66%       62.66%       60.30%       60.41%       62.40%       62.21%      
Mortgage Banking Information                                                          
Mortgage loans originated $ 46,848     $ 48,550     $ 78,749     $ 84,885     $ 64,893     $ 95,398     $ 117,425      
Residential mortgage loans sold - servicing retained   20,312       27,690       44,763       40,462       26,944       48,002       52,909      
Residential mortgage loans sold - servicing released     3,819         4,981         4,632         10,522         5,278         8,800         7,676      
Total residential mortgage loans sold $ 24,131     $ 32,671     $ 49,395     $ 50,984     $ 32,222     $ 56,802     $ 60,585      
Residential mortgage loans serviced for others $ 641,165     $ 638,553     $ 631,889     $ 618,134     $ 610,418              
Share Data                              
Closing share price $ 42.50     $ 39.50     $ 42.15     $ 31.99     $ 29.20              
Book value per common share $ 23.25     $ 22.87     $ 22.50     $ 22.40     $ 22.14              
Tangible book value per common share $ 15.64     $ 15.53     $ 15.11     $ 14.94     $ 14.60              
Price / book value   182.81%       172.71%       187.34%       142.80%       131.90%              
Price / tangible book value   271.69%       254.41%       278.96%       214.07%       200.05%              
Weighted average diluted shares outstanding   17,232,767       17,182,689       17,164,675       17,072,358       17,027,419       17,207,812       16,954,116      
Shares outstanding, end of period   16,989,849       16,969,451       16,939,715       16,893,878       16,824,564              
Wealth Management Information:                              
Wealth assets under mgmt, administration, supervision and brokerage (2) $ 12,050,555     $ 11,725,460     $ 11,328,457     $ 9,969,745     $ 9,632,521              
Fees for wealth management services $ 9,807     $ 9,303     $ 9,327     $ 9,100     $ 9,431              
Capital Ratios                              
Bryn Mawr Trust Company                              
Tier I capital to risk weighted assets ("RWA")   10.29%       10.58%       10.50%       10.99%       10.94%              
Total (Tier II) capital to RWA   10.90%       11.25%       11.19%       11.70%       11.65%              
Tier I leverage ratio   8.76%       8.83%       8.73%       9.17%       9.06%              
Tangible equity ratio (1)   8.24%       8.46%       7.85%       8.85%       8.79%              
Common equity Tier I capital to RWA   10.29%       10.58%       10.50%       10.99%       10.94%              
                               
Bryn Mawr Bank Corporation                              
Tier I capital to RWA   10.12%       10.50%       10.51%       10.42%       10.45%              
Total (Tier II) capital to RWA   11.82%       12.30%       12.35%       12.30%       12.35%              
Tier I leverage ratio   8.63%       8.77%       8.73%       8.70%       8.65%              
Tangible equity ratio (1)   8.03%       8.32%       7.76%       8.28%       8.29%              
Common equity Tier I capital to RWA   10.12%       10.50%       10.51%       10.42%       10.45%              
                               
Asset Quality Indicators                              
                               
Net loan and lease charge-offs ("NCO"s) $ 625     $ 670     $ 1,317     $ 704     $ 254     $ 1,295     $ 676      
Nonperforming loans and leases ("NPL"s) $ 7,237     $ 7,329     $ 8,363     $ 9,883     $ 9,617              
Other real estate owned ("OREO")     1,122         978         1,017         867         784              
Total nonperforming assets ("NPA"s) $    8,359     $    8,307     $    9,380     $    10,750     $    10,401              
                                                   
Nonperforming loans and leases 30 or more days past due $ 4,076     $ 5,097     $ 6,072     $ 6,684     $ 5,599              
Performing loans and leases 30 to 89 days past due   6,258       6,077       3,062       2,537       3,564              
Performing loans and leases 90 or more days past due     -         -         -         -         -              
Total delinquent loans and leases $    10,334     $    11,174     $    9,134     $    9,221     $    9,163              
                                                   
Delinquent loans and leases to total loans and leases   0.39%       0.44%       0.36%       0.37%       0.38%              
Delinquent performing loans and leases to total loans and leases   0.23%       0.24%       0.12%       0.10%       0.15%              
NCOs / average loans and leases (annualized)   0.10%       0.11%       0.21%       0.11%       0.04%       0.10 %     0.06 %    
NPLs / total portfolio loans and leases   0.27%       0.29%       0.33%       0.40%       0.40%              
NPAs / total loans and leases and OREO   0.31%       0.32%       0.37%       0.43%       0.43%              
NPAs / total assets   0.24%       0.25%       0.27%       0.34%       0.34%              
ALLL / NPLs   226.60%       233.42%       209.09%       179.54%       177.14%              
ALLL / portfolio loans   0.61%       0.67%       0.69%       0.71%       0.70%              
ALLL on originated loans and leases / Originated loans and leases (1)   0.68%       0.75%       0.78%       0.81%       0.81%              
(Total Allowance + Loan mark) / Total Gross portfolio loans and leases (1)   1.03%       1.12%       1.17%       1.24%       1.30%              
                                                   
Troubled debt restructurings ("TDR"s) included in NPLs $ 2,470     $ 2,681     $ 2,632     $ 1,680     $ 1,779              
TDRs in compliance with modified terms     6,148         6,492         6,395         6,305         4,984              
Total TDRs $    8,618     $    9,173     $    9,027     $    7,985     $    6,763              
                               
(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.
   
                               

 

Bryn Mawr Bank Corporation                          
Detailed Balance Sheets (unaudited)                          
(dollars in thousands)                          
                           
  June 30, 2017   March 31, 2017   December 31, 2016   September 30, 2016   June 30, 2016        
Assets                          
Cash and due from banks $   19,352     $   17,457     $   16,559     $   18,905     $   13,710          
Interest-bearing deposits with banks     30,806         69,978         34,206         30,118         20,481          
Cash and cash equivalents     50,158         87,435         50,765         49,023         34,191          
Investment securities, available for sale     443,687         391,028         566,996         366,910         365,470          
Investment securities, held to maturity     5,161         5,194         2,879         2,896         2,915          
Investment securities, trading     4,021         4,138         3,888         3,702         3,521          
Loans held for sale     8,590         3,015         9,621         11,506         11,882          
Portfolio loans and leases, originated     2,409,964         2,286,814         2,240,987         2,176,549         2,090,070          
Portfolio loans and leases, acquired     256,687         268,775         294,438         316,808         333,751          
Total portfolio loans and leases     2,666,651         2,555,589         2,535,425         2,493,357         2,423,821          
Less: Allowance for losses on originated loan and leases     (16,374 )       (17,069 )       (17,458 )       (17,716 )       (17,008 )        
Less: Allowance for losses on acquired loan and leases     (25 )       (38 )       (28 )       (28 )       (28 )        
Total allowance for loan and lease losses     (16,399 )       (17,107 )       (17,486 )       (17,744 )       (17,036 )        
Net portfolio loans and leases     2,650,252         2,538,482         2,517,939         2,475,613         2,406,785          
Premises and equipment     44,446         40,515         41,778         42,559         43,607          
Accrued interest receivable     8,717         8,392         8,533         8,066         8,144          
Mortgage servicing rights     5,683         5,686         5,582         4,793         4,646          
Bank owned life insurance     39,680         39,479         39,279         39,055         38,836          
Federal Home Loan Bank ("FHLB") stock     15,168         8,505         17,305         13,185         10,618          
Goodwill     107,127         104,765         104,765         104,765         104,765          
Intangible assets     22,084         19,864         20,405         21,235         22,123          
Other investments     8,682         8,716         8,627         9,121         8,722          
Other assets     24,763         27,403         23,168         21,651         23,865          
Total assets $   3,438,219     $   3,292,617     $   3,421,530     $   3,174,080     $   3,090,090          
                                               
Liabilities                                              
Deposits                                              
Noninterest-bearing $   818,475     $   771,556     $   736,180     $   718,015     $   689,214          
Interest-bearing     1,863,288         1,865,009         1,843,495         1,759,862         1,720,477          
Total deposits     2,681,763         2,636,565         2,579,675         2,477,877         2,409,691          
Short-term borrowings     130,295         23,613         204,151         50,065         19,119          
Long-term FHLB advances     164,681         174,711         189,742         204,772         224,802          
Subordinated notes     29,559         29,546         29,532         29,518         29,505          
Accrued interest payable     2,830         2,722         2,734         1,854         1,846          
Other liabilities     34,114         37,365         34,569         31,535         32,660          
Total liabilities     3,043,242         2,904,522         3,040,403         2,795,621         2,717,623          
                                               
Shareholders' equity                                              
Common stock     21,162         21,141         21,111         21,064         20,972          
Paid-in capital in excess of par value     234,654         233,910         232,806         231,398         230,298          
Less: common stock held in treasury, at cost     (67,091 )       (66,969 )       (66,950 )       (66,895 )       (66,200 )        
Accumulated other comprehensive income (loss), net of tax     (1,564 )       (1,990 )       (2,409 )       2,128         2,488          
Retained earnings     207,816         202,003         196,569         190,764         184,909          
Total shareholders equity     394,977         388,095         381,127         378,459         372,467          
Total liabilities and shareholders' equity $   3,438,219     $   3,292,617     $   3,421,530     $   3,174,080     $   3,090,090          
                                               

 

Bryn Mawr Bank Corporation                          
Supplemental Balance Sheet Information (unaudited)                          
(dollars in thousands)                          
  Portfolio Loans and Leases as of        
  June 30, 2017   March 31, 2017   December 31, 2016   September 30, 2016   June 30, 2016        
Commercial mortgages $   1,197,936     $   1,137,870     $   1,110,897     $   1,089,621     $   1,055,934          
Home equity loans and lines     208,480         203,962         208,000         206,578         202,989          
Residential mortgages     416,488         418,264         413,540         418,408         414,863          
Construction     156,581         145,699         141,964         133,269         133,313          
Total real estate loans     1,979,485         1,905,795         1,874,401         1,847,876         1,807,099          
Commercial & Industrial     599,203         567,917         579,791         565,497         538,684          
Consumer     28,485         23,932         25,341         23,717         21,561          
Leases     59,478         57,945         55,892         56,267         56,477          
Total non-real estate loans and leases     687,166         649,794         661,024         645,481         616,722          
Total portfolio loans and leases $   2,666,651     $   2,555,589     $   2,535,425     $   2,493,357     $   2,423,821          
                                               
                           
  Nonperforming Loans and Leases as of        
  June 30, 2017   March 31, 2017   December 31, 2016   September 30, 2016   June 30, 2016        
Commercial mortgages $   819     $   315     $   320     $   139     $   139          
Home equity loans and lines     1,535         1,828         2,289         2,827         3,011          
Residential mortgages     2,589         2,640         2,658         2,845         2,909          
Construction     -         -         -         -         -          
Total nonperforming real estate loans     4,943         4,783         5,267         5,811         6,059          
Commercial & Industrial     2,112         2,471         2,957         3,960         3,457          
Consumer     10         -         2         2         4          
Leases     173         75         137         110         97          
Total nonperforming non-real estate loans and leases     2,295         2,546         3,096         4,072         3,558          
Total nonperforming portfolio loans and leases $   7,238     $   7,329     $   8,363     $   9,883     $   9,617          
                                               
                           
  Net Loan and Lease Charge-Offs (Recoveries) for the Three Months Ended        
  June 30, 2017   March 31, 2017   December 31, 2016   September 30, 2016   June 30, 2016        
Commercial mortgage $   (3 )   $   (3 )   $   (51 )   $   (4 )   $   (3 )        
Home equity loans and lines     169         438         69         375         11          
Residential     43         27         28         2         262          
Construction     (1 )       (1 )       (1 )       -         (62 )        
Total net charge-offs (recoveries) of real estate loans     208         461         45         373         208          
Commercial & Industrial     185         59         1,128         95         (44 )        
Consumer     16         39         42         58         30          
Leases     216         111         102         178         60          
Total net charge-offs of non-real estate loans and leases     417         209         1,272         331         46          
Total net charge-offs $   625     $   670     $   1,317     $   704     $   254          
                                               

 

Bryn Mawr Bank Corporation                        
Supplemental Balance Sheet Information (unaudited)                        
(dollars in thousands)                        
  Investment Securities Available for Sale, at Fair Value      
  June 30, 2017   March 31, 2017   December 31, 2016   September 30, 2016   June 30, 2016      
U.S. Treasury securities $   100     $   100     $   200,097     $   101     $   102        
Obligations of the U.S. Government and agencies     126,468         100,476         82,198         76,598         86,134        
State & political subdivisions - tax-free     26,958         30,416         33,005         36,735         39,047        
State & political subdivisions - taxable     524         524         525         529         532        
Mortgage-backed securities     230,617         197,420         185,951         184,919         186,354        
Collateralized mortgage obligations     42,549         45,476         48,694         51,344         36,702        
Other debt securities     1,099         1,299         1,299         1,450         1,450        
Bond mutual funds     11,956         11,920         11,895         11,847         11,774        
Other investments     3,416         3,397         3,332         3,387         3,375        
Total $   443,687     $   391,028     $   566,996     $   366,910     $   365,470        
                                             
                         
  Unrealized Gain (Loss) on Investment Securities Available for Sale      
  June 30, 2017   March 31, 2017   December 31, 2016   September 30, 2016   June 30, 2016      
U.S. Treasury securities $   -     $   -     $   3     $   -     $   1        
Obligations of the U.S. Government and agencies     (699 )       (803 )       (913 )       946         1,183        
State & political subdivisions - tax-free     11         (10 )       (96 )       131         240        
State & political subdivisions - taxable     1         1         2         5         8        
Mortgage-backed securities     480         196         (47 )       3,801         3,958        
Collateralized mortgage obligations     (662 )       (777 )       (794 )       253         496        
Other debt securities     (1 )       (1 )       (1 )       -         -        
Bond mutual funds     -         (36 )       (61 )       (109 )       (182 )      
Other investments     203         132         13         34         (66 )      
Total $   (667 )   $   (1,298 )   $   (1,894 )   $   5,061     $   5,638        
                                             
                         
  Deposits      
  June 30, 2017   March 31, 2017   December 31, 2016   September 30, 2016   June 30, 2016      
Interest-bearing deposits:                        
Interest-bearing checking $   381,345     $   395,131     $   379,424     $   333,055     $   333,425        
Money market     729,859         757,071         761,657         725,116         718,144        
Savings     254,903         255,791         232,193         228,391         217,877        
Wholesale non-maturity deposits     54,675         69,471         74,272         64,664         58,690        
Wholesale time deposits     120,524         68,164         73,037         99,052         113,274        
Retail time deposits     321,982         319,381         322,912         309,584         279,067        
Total interest-bearing deposits     1,863,288         1,865,009         1,843,495         1,759,862         1,720,477        
Noninterest-bearing deposits     818,475         771,556         736,180         718,015         689,214        
Total deposits $   2,681,763     $   2,636,565     $   2,579,675     $   2,477,877     $   2,409,691        
                                             

 

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, 2017   March 31, 2017   December 31, 2016   September 30, 2016   June 30, 2016   June 30, 2017   June 30, 2016    
Interest income:                              
Interest and fees on loans and leases $   29,143     $   28,482     $   28,230     $   27,931     $   27,679     $   57,625     $   54,375      
Interest on cash and cash equivalents     35         66         53         27         42         101         88      
Interest on investment securities     2,059         1,778         1,639         1,556         1,565         3,837         3,092      
Total interest income     31,237         30,326         29,922         29,514         29,286         61,563         57,555      
Interest expense:                                                          
Interest on deposits     1,983         1,828         1,780         1,575         1,402         3,811         2,478      
Interest on short-term borrowings     237         27         22         34         20         264         37      
Interest on FHLB advances and other borrowings     682         698         760         818         867         1,380         1,775      
Interest on subordinated notes     370         370         370         370         370         740         736      
Total interest expense     3,272         2,923         2,932         2,797         2,659         6,195         5,026      
Net interest income     27,965         27,403         26,990         26,717         26,627         55,368         52,529      
Provision for loan and lease losses (the "Provision")     (83 )       291         1,059         1,412         445         208         1,855      
Net interest income after Provision     28,048         27,112         25,931         25,305         26,182         55,160         50,674      
Noninterest income:                                                          
Fees for wealth management services      9,807         9,303         9,327         9,100         9,431         19,110         18,263      
Insurance revenue     943         763         715         886         845         1,706         2,121      
Capital markets revenue     953         -         -         -         -         953         -      
Service charges on deposits     630         647         688         688         713         1,277         1,415      
Loan servicing and other fees     519         503         411         497         539         1,022         1,031      
Net gain on sale of loans     520         629         607         879         857         1,149         1,656      
Net gain (loss) on sale of investment securities available for sale     -         1         9         (28 )       (43 )       1         (58 )    
Net (loss) gain on sale of other real estate owned     (12 )       -         -         -         -         (12 )       (76 )    
Dividends on FHLB and FRB stocks     218         214         309         277         263         432         477      
Other operating income     1,207         1,167         1,182         1,487         1,176         2,374         2,199      
Total noninterest income     14,785         13,227         13,248         13,786         13,781         28,012         27,028      
Noninterest expense:                                                          
Salaries and wages      13,580         12,450         11,855         11,621         12,197         26,030         23,935      
Employee benefits      2,475         2,559         2,207         2,420         2,436         5,034         4,921      
Loss on pension termination     -         -         -         -         -         -              
Occupancy and bank premises     2,247         2,526         2,407         2,349         2,367         4,773         4,855      
Branch lease termination expense     -         -         -         -         -         -              
Furniture, fixtures and equipment     1,869         1,974         1,869         1,837         1,895         3,843         3,814      
Advertising     405         386         391         334         372         791         656      
Amortization of intangible assets     688         693         830         888         889         1,381         1,780      
Impairment of intangible assets     -         -         -         -         -         -              
Impairment (recovery) of mortgage servicing rights ("MSRs")     43         3         (580 )       29         599         46         682      
Due diligence, merger-related and merger integration expenses     1,236         511         -         -         -         1,747         -      
Professional fees     1,049         711         963         937         946         1,760         1,759      
Pennsylvania bank shares tax     297         664         (204 )       675         640         961         1,278      
Information technology     820         874         857         881         875         1,694         1,923      
Other operating expenses     3,786         3,309         4,492         3,400         3,004         7,095         5,707      
Total noninterest expense     28,495         26,660         25,087         25,371         26,220         55,155         51,310      
Income before income taxes     14,338         13,679         14,092         13,720         13,743         28,017         26,392      
Income tax expense     4,905         4,635         4,684         4,346         4,810         9,540         9,137      
Net income $   9,433     $   9,044     $   9,408     $   9,374     $   8,933     $   18,477     $   17,255      
Per share data:                                                          
Weighted average shares outstanding     16,984,563         16,954,132         16,916,705         16,860,727         16,812,219         16,969,431         16,830,211      
Dilutive common shares     248,204         228,557         247,970         211,631         215,200         238,381         123,905      
Adjusted weighted average diluted shares     17,232,767         17,182,689         17,164,675         17,072,358         17,027,419         17,207,812         16,954,116      
Basic earnings (loss) per common share $   0.56     $   0.53     $   0.56     $   0.56     $   0.53     $   1.09     $   1.03      
Diluted earnings (loss) per common share $   0.55     $   0.53     $   0.55     $   0.55     $   0.52     $   1.07     $   1.02      
Dividend declared per share $   0.21     $   0.21     $   0.21     $   0.21     $   0.20     $   0.42     $   0.40      
Effective tax rate   34.21%       33.88%       33.24%       31.68%       35.09%       34.05%       34.62%      
                               

 

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, 2017 March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016   June 30, 2017 June 30, 2016
(dollars in thousands)   Average
Balance
Interest
Income/
Expense
Average
Rates
Earned/
Paid
Average
 Balance
Interest
 Income/
 Expense
Average
 Rates
 Earned/
 Paid
Average
 Balance
Interest
 Income/
 Expense
Average
 Rates
 Earned/
 Paid
Average
 Balance
Interest
 Income/
 Expense
Average
 Rates
 Earned/
 Paid
Average
 Balance
Interest
 Income/
 Expense
Average
 Rates
 Earned/
 Paid
  Average
 Balance
Interest
 Income/
 Expense
Average
 Rates
 Earned/
 Paid
Average
 Balance
Interest
 Income/
 Expense
Average
 Rates
 Earned/
 Paid
                                               
Assets:                                              
Interest-bearing deposits with other banks   $   26,266   $   35   0.53 % $   39,669   $   66   0.67 % $   55,298   $   53   0.38 % $   33,532   $   27   0.32 % $   44,950   $   42   0.38 %   $   32,931   $   101   0.62 % $   42,000   $   88   0.42 %
Investment securities - available for sale:                                              
Taxable       391,112       1,940   1.99 %     354,229       1,653   1.89 %     344,931       1,498   1.73 %     329,293       1,423   1.72 %     325,893       1,433   1.77 %       372,772       3,620   1.96 %     321,123       2,832   1.77 %
Tax-exempt       28,970       150   2.08 %     31,485       164   2.11 %     34,985       175   1.99 %     37,893       189   1.98 %     39,193       187   1.92 %       30,221       314   2.10 %     39,925       378   1.90 %
Total investment securities - available for sale       420,082       2,090   2.00 %     385,714       1,817   1.91 %     379,916       1,673   1.75 %     367,186       1,612   1.75 %     365,086       1,620   1.78 %       402,993       3,934   1.97 %     361,048       3,210   1.79 %
                                               
Investment securities  - held to maturity       5,181       5   0.39 %     3,702       7   0.77 %     2,889       7   0.96 %     2,907       6   0.82 %     2,427       4   0.66 %       4,446       4   0.18 %     1,214       4   0.66 %
Investment securities  - trading       4,137       13   1.26 %     3,890       8   0.83 %     3,853       16   1.65 %     3,523       2   0.23 %     3,640       2   0.22 %       4,014       2   0.10 %     3,793       2   0.11 %
                                               
Loans and leases *       2,615,610       29,309   4.49 %     2,555,677       28,622   4.54 %     2,517,967       28,354   4.48 %     2,476,972       28,032   4.50 %     2,412,643       27,761   4.63 %       2,585,809       57,931   4.52 %     2,360,613       54,539   4.65 %
                                               
Total interest-earning assets       3,071,276       31,452   4.11 %     2,988,652       30,520   4.14 %     2,959,923       30,103   4.05 %     2,884,120       29,679   4.09 %     2,828,746       29,429   4.18 %       3,030,193       61,972   4.12 %     2,768,668       57,843   4.20 %
                                               
Cash and due from banks       15,727           14,942           16,127           16,228           16,413             15,336           16,457      
Less: allowance for loan and lease losses       (17,549 )         (17,580 )         (17,858 )         (17,257 )         (17,271 )           (17,564 )         (16,755 )    
Other assets       263,853           258,046           257,676           258,928           262,065             260,963           263,180      
                                               
Total assets   $   3,333,307       $   3,244,060       $   3,215,868       $   3,142,019       $   3,089,953         $   3,288,928       $   3,031,550      
                                               
Liabilities:                                              
                                               
Interest-bearing deposits:                                              
Savings, NOW and market rate deposits   $   1,375,949   $   813   0.24 % $   1,388,561   $   756   0.22 % $   1,328,577   $   686   0.21 % $   1,286,404   $   641   0.20 % $   1,273,964   $   589   0.19 %   $   1,382,220   $   1,569   0.23 % $   1,276,797   $   1,158   0.18 %
Wholesale deposits       154,424       378   0.98 %     143,461       317   0.90 %     156,541       319   0.81 %     164,706       327   0.79 %     196,517       361   0.74 %       148,973       695   0.94 %     166,859       594   0.72 %
Retail time deposits       323,287       792   0.98 %     320,172       755   0.96 %     324,158       775   0.95 %     278,579       607   0.87 %     246,771       452   0.74 %       321,738       1,547   0.97 %     231,795       726   0.63 %
Total interest-bearing deposits       1,853,660       1,983   0.43 %     1,852,194       1,828   0.40 %     1,809,276       1,780   0.39 %     1,729,689       1,575   0.36 %     1,717,252       1,402   0.33 %       1,852,931       3,811   0.41 %     1,675,451       2,478   0.30 %
                                               
Borrowings:                                              
Short-term borrowings       98,869       237   0.96 %     47,603       27   0.23 %     40,629       22   0.22 %     40,966       34   0.33 %     32,328       20   0.25 %       73,378       264   0.73 %     33,243       37   0.22 %
Long-term FHLB advances       171,567       682   1.59 %     182,507       698   1.55 %     198,454       760   1.52 %     218,920       818   1.49 %     236,248       867   1.48 %       177,006       1,380   1.57 %     243,131       1,775   1.47 %
Subordinated notes       29,550       370   5.02 %     29,537       370   5.08 %     29,523       370   4.99 %     29,509       370   4.99 %     29,496       370   5.05 %       29,544       740   5.05 %     29,489       736   5.02 %
Total borrowings       299,986       1,289   1.72 %     259,647       1,095   1.71 %     268,606       1,152   1.71 %     289,395       1,222   1.68 %     298,072       1,257   1.70 %       279,928       2,384   1.72 %     305,863       2,548   1.68 %
                                               
Total interest-bearing liabilities       2,153,646       3,272   0.61 %     2,111,841       2,923   0.56 %     2,077,882       2,932   0.56 %     2,019,084       2,797   0.55 %     2,015,324       2,659   0.53 %       2,132,859       6,195   0.59 %     1,981,314       5,026   0.51 %
                                               
Noninterest-bearing deposits       755,597           711,794           724,465           716,581           675,710             733,817           653,379      
Other liabilities       34,348           38,211           35,478           33,400           32,804             36,266           33,363      
Total noninterest-bearing liabilities       789,945           750,005           759,943           749,981           708,514             770,083           686,742      
                                               
Total liabilities       2,943,591           2,861,846           2,837,825           2,769,065           2,723,838             2,902,942           2,668,056      
                                               
Shareholders' equity       389,716           382,214           378,043           372,954           366,115             385,986           363,494      
                                               
Total liabilities and shareholders' equity   $   3,333,307       $   3,244,060       $   3,215,868       $   3,142,019       $   3,089,953         $   3,288,928       $   3,031,550      
                                               
Interest income to earning assets       4.11 %     4.14 %     4.05 %     4.09 %     4.18 %       4.12 %     4.20 %
                                               
Net interest spread       3.50 %     3.58 %     3.49 %     3.54 %     3.65 %       3.53 %     3.69 %
Effect of noninterest-bearing sources           0.18 %           0.16 %           0.16 %           0.17 %           0.16 %           0.18 %         0.15 %
                                                                                                                 
Tax-equivalent net interest margin     $   28,180   3.68 %   $   27,597   3.74 %   $   27,171   3.65 %   $   26,882   3.71 %   $   26,770   3.81 %     $   55,777   3.71 %   $   52,817   3.84 %
                                               
Tax-equivalent adjustment     $   215   0.02 %   $   194   0.02 %   $   181   0.02 %   $   165   0.02 %   $   143   0.02 %     $   409   0.02 %   $   288   0.02 %
                                               
Supplemental Information Regarding Accretion of Fair Value Marks                                          
       Interest
 Income
 (Expense)
 Effect 
Effect
 on Yield or
 Rate
   Interest
 Income
 (Expense)
 Effect 
Effect
 on Yield or
 Rate
   Interest
 Income
 (Expense)
 Effect 
Effect on
Yield or
 Rate
   Interest
 Income
 (Expense)
 Effect 
Effect on
 Yield or
 Rate
   Interest
 Income
 (Expense)
 Effect 
Effect
 on
 Yield or
 Rate
     Interest
 Income
 (Expense)
 Effect 
Effect on
 Yield or
 Rate
   Interest
 Income
 (Expense)
 Effect 
Effect on
 Yield or
 Rate
Loans and leases     $   402   0.06 %   $   726   0.12 %   $   742   0.12 %   $   578   0.09 %   $   1,076   0.18 %     $   1,128   0.09 %   $   2,029   0.17 %
Retail time deposits         (18 ) -0.02 %       (19 ) -0.02 %       (19 ) -0.02 %       (29 ) -0.04 %       (61 ) -0.10 %         (37 ) -0.02 %       (171 ) -0.15 %
Short-term borrowings         -   0.00 %       -   0.00 %       -   0.00 %       -   0.00 %       -   0.00 %         -   0.00 %       (12 ) -0.07 %
Long-term FHLB advances and other borrowings         (30 ) -0.07 %       (30 ) -0.07 %       (30 ) -0.06 %       (30 ) -0.05 %       (30 ) -0.05 %         (60 ) -0.07 %       (60 ) -0.05 %
Net interest income from fair value marks     $   450       $   775       $   791       $   637       $   1,167         $   1,225       $   2,272    
Purchase accounting effect on tax-equivalent margin         0.06 %         0.11 %         0.11 %         0.09 %         0.17 %           0.08 %         0.17 %
* Average loans and leases include portfolio loans and leases, and loans held for sale. Non-accrual loans are also included in the average loan and leases balances.
                                               
                                               

 

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   As of or For the Six Months Ended  
  June 30, 2017   March 31, 2017   December 31, 2016   September 30, 2016   June 30, 2016   June 30, 2017   June 30, 2016  
Reconciliation of Net Income to Net Income (core):                            
Net income (loss) (a GAAP measure) $   9,433     $   9,044     $   9,408     $   9,374     $   8,933     $   18,477   # $   17,255    
Less: Tax-effected non-core noninterest income:                            
Loss (gain) on sale of investment securities available for sale     -         (1 )       (6 )       18         28         (1 )       38    
Add: Tax-effected non-core noninterest expense items:                            
Loss on pension termination     -         -         -         -         -         -         -    
Severance expense (Salaries and wages)     -         -         -         -         -         -         -    
Branch lease termination expense     -         -         -         -         -         -         -    
Debt and swap prepayment penalty (Other operating expenses)     -         -         -         -         -         -         -    
Impairment of intangible assets     -         -         -         -         -         -         -    
Due diligence, merger-related and merger integration  expenses     803         332         -         -         -         1,136         -    
Net income (core) (a non-GAAP measure) $    10,236     $    9,375     $    9,402     $    9,392     $    8,961     $    19,612     $    17,293    
                                                         
Calculation of Basic and Diluted Earnings per Common Share (core):                          
Weighted average common shares outstanding   16,984,563       16,954,132       16,916,705       16,860,727       16,812,219       16,969,431       16,830,211    
Dilutive common shares     248,204         228,557         247,970         211,631         215,200         238,381         123,905    
Adjusted weighted average diluted shares   17,232,767       17,182,689       17,164,675       17,072,358       17,027,419       17,207,812       16,954,116    
Basic earnings per common share (core) (a non-GAAP measure) $   0.60     $   0.55     $   0.56     $   0.56     $   0.53     $   1.16     $   1.03    
Diluted earnings per common share (core) (a non-GAAP measure) $   0.59     $   0.55     $   0.55     $   0.55     $   0.53     $   1.14     $   1.02    
                             
Calculation of Return on Average Tangible Equity:                            
Net income (loss) $   9,433     $   9,044     $   9,408     $   9,374     $   8,933     $   18,477     $   17,255    
Add: Tax-effected amortization and impairment of intangible assets     447         450         540         577         578         898         1,157    
Net tangible income (numerator) $   9,880     $   9,494     $   9,948     $   9,951     $   9,511     $   19,375     $   18,412    
                                                         
Average shareholders' equity $   389,716     $   382,214     $   378,043     $   372,954     $   366,115     $   385,986     $   363,494    
Less: Average goodwill and intangible assets     (126,537 )       (124,884 )       (125,614 )       (126,505 )       (127,402 )       (125,715 )       (127,849 )  
Net average tangible equity (denominator) $   263,179     $   257,330     $   252,429     $   246,449     $   238,713     $   260,271     $   235,645    
                                                         
Return on tangible equity (a non-GAAP measure)   15.06 %     14.96 %     15.68 %     16.06 %     16.02 %     15.01 %     15.71 %  
                                                     
Calculation of Tangible Equity Ratio:                                                    
Total shareholders' equity $   394,977     $   388,095     $   381,127     $   378,459     $   372,467            
Less: Goodwill and intangible assets     (129,211 )       (124,629 )       (125,170 )       (126,000 )       (126,888 )          
Net tangible equity (numerator) $   265,766     $   263,466     $   255,957     $   252,459     $   245,579            
                                                 
Total assets $   3,438,219     $   3,292,617     $   3,421,530     $   3,174,080     $   3,090,090            
Less: Goodwill and intangible assets     (129,211 )       (124,629 )       (125,170 )       (126,000 )       (126,888 )          
Tangible assets (denominator) $   3,309,008     $   3,167,988     $   3,296,360     $   3,048,080     $   2,963,202            
                             
Tangible equity ratio   8.03 %     8.32 %     7.76 %     8.28 %     8.29 %          
                             
Calculation of Efficiency Ratio:                            
Noninterest expense $   28,495     $   26,660     $   25,087     $   25,371     $   26,220     $   55,155     $   51,310    
Less: certain noninterest expense items*:                            
Loss on pension termination     -         -         -         -         -         -         -    
Severance expense (Salaries and wages)     -         -         -         -         -         -         -    
Branch lease termination expense     -         -         -         -         -         -         -    
Debt and swap prepayment penalty (Other operating expenses)     -         -         -         -         -         -         -    
Amortization of intangibles     (688 )       (693 )       (830 )       (888 )       (889 )       (1,381 )       (1,780 )  
Impairment of intangible assets     -         -         -         -         -         -         -    
Due diligence, merger-related and merger integration  expenses     (1,235 )       (511 )       -         -         -         (1,747 )       -    
Noninterest expense (adjusted) (numerator) $   26,572     $   25,456     $   24,257     $   24,483     $   25,331     $   52,027     $   49,530    
                                                         
Noninterest income $   14,785     $   13,227     $   13,248     $   13,786     $   13,781     $   28,012     $   27,028    
Less: non-core noninterest income items:                                                        
Loss (gain) on sale of investment securities available for sale     -         (2 )       (9 )       28         43         (1 )       58    
Noninterest income (core) $   14,785     $   13,225     $   13,239     $   13,814     $   13,824     $   28,011     $   27,086    
Net interest income     27,965         27,403         26,990         26,717         26,627         55,368         52,529    
Noninterest income (core) and net interest income (denominator) $   42,750     $   40,628     $   40,229     $   40,531     $   40,451     $   83,379     $   79,615    
                                                         
Efficiency ratio   62.16 %     62.66 %     60.30 %     60.41 %     62.62 %     62.40 %     62.21 %  
* 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.          
                             
Supplemental Loan and Allowance Information Used to Calculate Non-GAAP Measures                          
                             
Total Allowance $   16,399     $   17,107     $   17,486     $   17,744     $   17,036            
less: Allowance on acquired loans     25         38         28         28         28            
Allowance on originated loans and leases $   16,374     $   17,069     $   17,458     $   17,716     $   17,008            
                                                 
Total Allowance $   16,399     $   17,107     $   17,486     $   17,744     $   17,036            
Loan mark on acquired loans     11,084         11,544         12,286         13,391         14,566            
Total Allowance + Loan mark $   27,483     $   28,651     $   29,772     $   31,135     $   31,602            
                                                 
Total Portfolio loans and leases $   2,666,651     $   2,555,589     $   2,535,425     $   2,493,357     $   2,423,821            
less: Originated loans and leases     2,409,964         2,286,814         2,240,987         2,176,549         2,090,070            
Net acquired loans $   256,687     $   268,775     $   294,438     $   316,808     $   333,751            
add: Loan mark on acquired loans     11,084         11,544         12,286         13,391         14,566            
Gross acquired loans (excludes loan mark) $   267,771     $   280,319     $   306,724     $   330,199     $   348,317            
Originated loans and leases     2,409,964         2,286,814         2,240,987         2,176,549         2,090,070