Market Overview

Bryn Mawr Bank Corporation Reports Fourth Quarter Earnings Impacted by $15.2 Million One-Time Income Tax Charge Related to the Tax Cuts and Jobs Act, Declares $0.22 Dividend, Completes Royal Bank Merger

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BRYN MAWR, Pa., Jan. 29, 2018 (GLOBE NEWSWIRE) -- H.R. 1, originally known as the "Tax Cuts and Jobs Act" ("Tax Reform"), signed into law on December 22, 2017, reduced the top federal corporate income tax rate from 35% to 21%. As a result, Bryn Mawr Bank Corporation (NASDAQ:BMTC) (the "Corporation"), parent of The Bryn Mawr Trust Company (the "Bank") was required to re-measure its net deferred tax asset to this lower rate, resulting in a one-time income tax charge of $15.2 million, or $0.85 diluted earnings per share. Additionally, the Corporation incurred after-tax due diligence and merger-related expenses of $2.3 million during the fourth quarter of 2017. As a result, the Corporation today reported a net loss of $6.2 million and diluted earnings per share of ($0.35) for the three months ended December 31, 2017, as compared to net income of $10.7 million, or $0.62 diluted earnings per share, for the three months ended September 30, 2017, and $9.4 million, or $0.55 diluted earnings per share, for the three months ended December 31, 2016. For the twelve months ended December 31, 2017, the Corporation posted net income of $23.0 million, or $1.32 diluted earnings per share, as compared to $36.0 million, or $2.12 diluted earnings per share for the same period in 2016.

On a non-GAAP basis, core net income, which excludes this one-time income tax charge, due diligence and merger-related expenses and certain other non-core income and expense items, as detailed in the appendix to this earnings release, was $11.3 million, or $0.63 diluted earnings per share, for the three months ended December 31, 2017 as compared to $11.2 million, or $0.65 diluted earnings per share, for the three months ended September 30, 2017 and $9.4 million, or $0.55 diluted earnings per share, for the three months ended December 31, 2016. For the twelve months ended December 31, 2017, core net income was $42.1 million, or $2.42 per share, as compared to $36.1 million, or $2.12 diluted earnings per share for the same period in 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 were pleased to finish the year on a strong note with core net income at record levels for both the quarter and full year," commented Frank Leto, President and Chief Executive Officer.

"The fourth quarter was an excellent period for BMT, as we continued to benefit from our focus on new business development, as evidenced by the Wealth Division's reaching almost $13 billion in AUM, while also issuing $70 million of subordinated notes, which will qualify for Tier 2 regulatory capital, and successfully completing our merger with Royal Bank with minimal disruption to normal operations. As the merger was a mid-December close, the full impact of the business combination on the Corporation's results will not be evident until the first quarter of 2018," added Mr. Leto.

"The income tax charge related to Tax Reform was experienced by many throughout the industry.  While we expect to recoup this expense in less than two years, we are also analyzing how to deploy the increased after-tax earnings within a framework that is focused on improving long-term shareholder value while also continuing to serve the communities in which we do business," Mr. Leto concluded.

The Board of Directors of the Corporation declared a quarterly dividend of $0.22 per share, payable March 1, 2018 to shareholders of record as of February 9, 2018.

SIGNIFICANT ITEMS OF NOTE
Results of Operations – Fourth Quarter 2017 Compared to Third Quarter 2017

  • A net loss of $6.2 million, or $(0.35) diluted earnings per share, for the three months ended December 31, 2017, as compared to net income of $10.7 million, or $0.62 diluted earnings per share, for the three months ended September 30, 2017 was primarily the result of a one-time income tax charge related to the re-measurement of the Corporation's net deferred tax asset, triggered by Tax Reform, which was enacted on December 22, 2017. The Corporation's net deferred tax asset on December 22, 2017, the date of the Tax Reform enactment, amounted to $39.0 million and included the Corporation's legacy net deferred tax asset and the remainder of the net deferred tax asset acquired in the merger with Royal Bancshares of Pennsylvania, Inc. (the "Merger"). In accordance with GAAP, the combined remaining net deferred tax asset was re-measured, reducing it by $15.2 million, with a corresponding charge to income tax expense. In addition to this one-time income tax charge, the excess tax benefit related to the vesting of stock-based compensation decreased by $598 thousand from the third quarter to the fourth quarter of 2017. Other factors impacting net income included a $2.7 million increase in due diligence and merger-related expenses for the fourth quarter of 2017 as compared to the third quarter of 2017.

  • On a non-GAAP basis, core net income, which excludes the above Tax Reform-related income tax charge, due diligence and merger-related expenses and other non-core income and expense items, as detailed in the appendix to this earnings release, was $11.3 million or $0.63 per diluted share for the three months ended December 31, 2017 as compared to $11.2 million or $0.65 per diluted share for the third quarter 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.
  • Net interest income for the fourth quarter of 2017 increased $883 thousand, or 3.0%, over the prior quarter.  The provision for loan and lease losses (the "Provision") decreased $256 thousand, or 19.2%, from the prior quarter.  Non-interest income remained flat at $15.5 million and $15.6 million for the fourth and third quarters of 2017, respectively.  Non-interest expense increased $2.9 million on a linked-quarter basis and, as noted above, was primarily due to a $2.7 million increase in due diligence and merger-related costs. Income tax expense, excluding the Tax Reform-related charge, remained flat at $4.7 million and $4.8 million for the fourth and third quarters of 2017, respectively.  However, the effective tax rate excluding the one-time Tax Reform-related income tax charge, increased from 30.7% for the three months ended September 30, 2017 to 34.5% for the three months ended December 31, 2017 primarily due to excess tax benefits from equity compensation transactions recorded during the third quarter of 2017.
     
  • Tax-equivalent net interest income for the three months ended December 31, 2017 was $30.5 million, an increase of $873 thousand over the linked quarter.  The interest-earning assets and interest-bearing liabilities acquired in the December 15, 2017 Merger contributed approximately $1.1 million to tax-equivalent net interest income. This increase was partially offset by a $433 thousand decrease in the accretion of purchase accounting adjustments between the third and fourth quarters of 2017.
     
  • Tax-equivalent interest and fees on loans and leases for the three months ended December 31, 2017 increased $1.3 million over the linked quarter.  Average loans and leases for the fourth quarter increased $124.9 million over the third quarter 2017 and experienced a two basis point decrease in tax-equivalent yield. The increase in average loans between the third and fourth quarters of 2017 was largely related to the loans acquired in the Merger which added $105.3 million in average loans and leases and contributed approximately $1.4 million in tax-equivalent interest and fee income for the fourth quarter of 2017.

    Average available for sale investment securities increased by $35.7 million over the linked quarter, and experienced a four basis point tax-equivalent yield increase. The increase in volume and yield on available for sale investment securities resulted in a $227 thousand increase in tax-equivalent interest income for the fourth quarter of 2017 as compared to the third quarter of 2017.  The majority of the Royal Bank investment portfolio was sold immediately following the Merger and did not impact interest income from available for sale investment securities.

    Interest expense on deposits for the three months ended December 31, 2017 increased $541 thousand over the linked quarter.  Average interest-bearing deposits increased $159.7 million accompanied by a six basis point increase in the rate paid on deposits.   The increase in average interest-bearing deposits was largely related to the deposits acquired in the Merger which added $91.4 million to the average balance of interest-bearing deposits for the fourth quarter of 2017 and accounted for approximately $209 thousand in interest expense during the fourth quarter of 2017.

    Average subordinated notes for the three months ended December 31, 2017 increased $14.3 million over the linked quarter with the rate paid decreasing by 28 basis points to 4.69%.  In addition to the $70 million of 4.25% fixed-to- floating subordinated notes issued on December 13, 2017, the Corporation also acquired $21.4 million of floating rate junior subordinated debentures currently at a 4.61% in connection with the Merger.  The volume increase in both borrowing types and rate decrease in the subordinated notes in the fourth quarter of 2017 resulted in a $194 thousand increase in interest expense on subordinated notes and junior subordinated debentures on a linked-quarter basis.
  • The tax-equivalent net interest margin was 3.62% for the fourth quarter and 3.71% for the third quarter of 2017.  Adjusting for the impact of the accretion of purchase accounting adjustments, the adjusted tax-equivalent net interest margin was 3.58% and 3.62% for the fourth and third quarters of 2017, respectively. 
     
  • Noninterest income for the three months ended December 31, 2017 of $15.5 million remained relatively unchanged from the third quarter of 2017. Increases of $323 thousand and $137 thousand in fees for wealth management services and insurance revenue, respectively, were offset by decreases of $243 thousand and $306 thousand in capital markets revenue and net gain on sale of loans, respectively.  
     
  • Noninterest expense for the three months ended December 31, 2017 increased $2.9 million, to $31.1 million, as compared to $28.2 million for the third quarter of 2017. The increase on a linked quarter basis was largely related to the $2.7 million increase in due diligence and merger-related expenses. The balance of the increase in noninterest expense on the linked- quarter basis was related to the addition of the Royal Bank operations, which accounted for approximately $215 thousand of noninterest expense for the second half of December 2017.
     
  • For the three months ended December 31, 2017, net loan and lease charge-offs totaled $556 thousand, as compared to $728 thousand for the third quarter of 2017. The Provision for the three months ended December 31, 2017 was $1.1 million, a $256 thousand decrease from $1.3 million for the third quarter of 2017. The credit quality of the loan and lease portfolio remains stable, with the increase in the allowance for loan and lease losses (the "Allowance") largely related to the growth of the portfolio. During the fourth quarter, there was a $4.1 million increase in nonperforming loans related to a small number of well collateralized residential and commercial real estate loans which became nonaccrual.
     
  • Income tax expense for the fourth quarter of 2017 increased $15.2 million as compared to the third quarter of 2017. As discussed previously, this increase was primarily related to the re-measurement of the Corporation's legacy and acquired net deferred tax asset as a result of Tax Reform enacted on December 22, 2017. Excluding this one-time charge to income tax expense, the effective tax rate for the fourth quarter of 2017 was 34.5%, as compared to 30.7% for the third quarter of 2017. The 374 basis point increase in the effective tax rate (excluding the one-time Tax Reform-related charge) over the linked quarter was primarily the result of nondeductible merger expenses in the fourth quarter of 2017 and a $598 thousand decrease in excess tax benefits associated with the vesting of stock-based compensation between the third and fourth quarters of 2017.

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

  • As noted above, the net loss of $6.2 million for the three months ended December 31, 2017, as compared to net income of $9.4 million for the same period in 2016 was primarily the result of a one-time income tax charge related to the re-measurement of the Corporation's net deferred tax asset, triggered by Tax Reform enacted on December 22, 2017. Other factors impacting net income included a $3.5 million increase in due diligence and merger-related expenses, a $1.8 million increase in salaries and wages and a $580 thousand increase in employee benefits for the fourth quarter of 2017 as compared to the same period in 2016. These expense increases were more than offset by a $3.3 million increase in net interest income and increases of $647 thousand, $795 thousand and $600 thousand in fees for wealth management services, insurance revenues and capital markets revenue, respectively.
     
  • Tax-equivalent net interest income for the three months ended December 31, 2017 was $30.5 million, an increase of $3.3 million over the same period in 2016.  Tax-equivalent net interest income from the assets and liabilities acquired in the December 15, 2017 Merger contributed approximately $1.1 million to this increase.  This increase was partially offset by a $471 thousand decrease in the accretion of purchase accounting adjustments between the fourth quarters of 2017 and 2016.

    Tax-equivalent interest and fees on loans and leases increased $4.0 million for the three months ended December 31, 2017 as compared to the same period in 2016.  Average loans and leases for the fourth quarter of 2017 increased $287.3 million from the same period in 2016 and experienced a ten basis point increase in tax-equivalent yield.  Excluding the effect of the accretion of purchase accounting adjustments on loans and leases, the adjusted tax-equivalent yield on loans and leases increased by 18 basis points. The increases in the prime rate during 2017 contributed to the increase in tax-equivalent yield on loans. The increase in average loans and leases for the fourth quarter of 2017 as compared to the same period in 2016 was largely related to the loans and leases acquired in the Merger which increased average loans and leases by $105.3 million and contributed approximately $1.4 million in interest and fee income on loans and leases for the fourth quarter of 2017.

    Average available for sale investment securities increased by $108.1 million for the three months ended December 31, 2017 as compared to the same period in 2016, and experienced a 30 basis point tax-equivalent yield increase. The increase in volume and yield on available for sale investment securities resulted in an $848 thousand increase in tax-equivalent interest income on available for sale investment securities for the fourth quarter of 2017 as compared to the same period in 2016.

    Partially offsetting the effect on interest income associated with the increase in average loans and leases and available for sale investment securities was a $959 thousand increase in interest expense on deposits for the fourth quarter of 2017 as compared to the same period in 2016. Average interest-bearing deposits increased by $221.9 million and were accompanied by a 14 basis point increase in rate paid between the fourth quarters of 2017 and 2016.

    In addition to the increased interest expense on deposits, a $586 thousand increase in interest expense on borrowings between the periods was attributed a $94.5 million increase in average borrowings coupled with a 19 basis point increase in rate paid on borrowings for the three months ended December 31, 2017 as compared to the same period in 2016.

    Average subordinated notes for the three months ended December 31, 2017 increased $14.3 million as compared to the same period in 2016 with the rate paid decreasing by 30 basis points to 4.69% for the three months ended December 31, 2017.  In addition to the $70 million of 4.25% fixed-to-floating subordinated notes issued on December 13, 2017, the Corporation also acquired $21.4 million of floating-rate junior subordinated debentures currently at a 4.61% in connection with the Merger.  The volume increase in both borrowing types and rate decrease in the subordinated notes in the fourth quarter of 2017 resulted in a $194 thousand increase in interest expense on subordinated notes and junior subordinated debentures for the three months ended December 31, 2017 as compared to the same period in 2016.
  • The tax-equivalent net interest margin was 3.62% for the three months ended December 31, 2017 as compared to 3.65% for the same period in 2016.  Adjusting for the impact of the accretion of purchase accounting, the adjusted tax-equivalent net interest margin was 3.58% and 3.54% for three months ended December 31, 2017 and 2016, respectively.
     
  • Noninterest income for the three months ended December 31, 2017 increased by $2.3 million, to $15.5 million, from the same period in 2016. An increase of $647 thousand in fees for wealth management services resulted as wealth assets under management, administration, supervision and brokerage increased $1.64 billion from December 31, 2016 to December 31, 2017. Insurance revenue increased $795 thousand for the fourth quarter of 2017 as compared to the same period in 2016, largely due to the May 2017 acquisition of Hirshorn Boothby. In addition, revenue from our Capital Markets initiative, which was launched in the second quarter of 2017, contributed $600 thousand to noninterest income.
     
  • Noninterest expense for the three months ended December 31, 2017 increased $6.0 million, to $31.1 million, from the same period in 2016. The increase was largely related to a $3.5 million increase in due diligence and merger-related expenses and a $1.8 million increase in salary and wages due to staffing increases from our Capital Markets initiative, the Hirshorn Boothby acquisition and the Princeton wealth management office, annual salary and wage increases and increases in incentive compensation.
     
  • For the three months ended December 31, 2017, the Provision was $1.1 million, which was unchanged from the same period in 2016. Net charge-offs for the fourth quarter of 2017 were $556 thousand as compared to $1.3 million for the same period in 2016.

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

  • Total portfolio loans and leases of $3.29 billion as of December 31, 2017 increased by $750.4 million from December 31, 2016. Largely contributing to this increase were the $570.4 million of loans and leases acquired in the Merger. Excluding the loans and leases acquired in the Merger, the $180.0 million increase in portfolio loans and leases represents a 7.1% increase for the twelve months ended December 31, 2017.
     
  • The Allowance as of December 31, 2017 was $17.5 million, or 0.53% 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 and leases, management also calculates two non-GAAP measures: the Allowance as a percentage of originated loans and leases, which was 0.70% as of December 31, 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 1.48% as of December 31, 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 ratio of Allowance to portfolio loans and leases was primarily related to the addition of $570.4 million of loans and leases acquired in the Merger.
     
  • Available for sale investment securities as of December 31, 2017 totaled $689.2 million, an increase of $122.2 million from December 31, 2016. The increase in available for sale investment securities was related to purchases of investment securities during 2017 in anticipation of the Merger. The majority of the available for sale investment securities acquired in the Merger were sold immediately after the closing of the transaction; no gain or loss was recognized on the sales.
     
  • Total assets as of December 31, 2017 were $4.45 billion, an increase of $1.03 billion from December 31, 2016. The Merger added $859.4 million to total assets. Organic increases in portfolio loans and leases accounted for much of the balance of the increase.
     
  • Wealth assets under management, administration, supervision and brokerage totaled $12.97 billion as of December 31, 2017, an increase of $1.64 billion from December 31, 2016. The increase in wealth assets was comprised of a $582 million increase in account balances whose fees are based on market value, and a $1.06 billion increase in fixed rate flat-fee account types.

  • Deposits of $3.37 billion as of December 31, 2017 increased $794.1 million from December 31, 2016. The Merger accounted for the addition of $593.2 million of the increase. 
     
  • Borrowings of $496.8 million as of December 31, 2017 increased $73.4 million from December 31, 2016. The increase was comprised of a $33.7 million increase in short-term borrowings, a $68.9 million increase subordinated notes, and a $21.4 million increase in junior subordinated debentures, which were assumed in the Merger. Partially offsetting these increases was a $50.6 million decrease in long-term FHLB advances.

  • The capital ratios for the Bank and the Corporation, as of December 31, 2017, as shown in the attached tables, indicate levels above the regulatory minimum to be considered "well capitalized." In addition to the capital issued in the Merger, during the fourth quarter of 2017, regulatory capital increases at the Corporation included the issuance of $70.0 million of subordinated notes, which qualify as Tier 2 capital and the acquisition of $21.4 million of junior subordinated debentures, which are carried in Tier 1 capital. On the Bank level, the Corporation down-streamed $15.0 million of capital to the Bank, increasing its Tier 1 capital balance.

Organic Loan and Lease Growth - September 30, 2017 to December 31, 2017

Total portfolio loans and leases as of December 31, 2017 were $3.29 billion, as compared to $2.68 billion as of September 30, 2017, an increase of $608.5 million. Loans and leases acquired in the Merger totaled $570.4 million, resulting in net organic loan growth of $38.1 million, or 5.7% annualized, for the fourth quarter of 2017.  This growth was muted relative to the annual organic growth rate of approximately 7% as the Corporation elected to reduce its exposure to construction loans in anticipation of the Royal Bank merger.  Also contributing to the lower growth rate was a decrease in residential loan balances as the Corporation was impacted by the general decrease in mortgage lending activity.

Future Effect of Purchase Accounting Adjustments Recorded in the Merger

Amounts presented in the table below reflect estimated fair value adjustments to interest-earning assets and interest-bearing liabilities acquired in the Merger. A portion of these fair value adjustments will be accreted or amortized as adjustments to net interest income over future periods. The accretable portion of the fair value adjustment to loans and leases will be accreted on a level-yield basis as the loans and leases pay down. The amortization of the fair value adjustments on FHLB advances and junior subordinated debentures will be recognized over 3.7 years and 16.9 years, respectively. The accretion of the fair value adjustments on time deposits will be recognized over a weighted average life of approximately 1.3 years.

(dollars in thousands) Acquired Balance   (Accretable)/
Amortizable
Fair Value
Adjustment
  Nonaccretable
Fair Value
Adjustment
  Recorded Fair
Value
 
Interest-earning assets:                        
  Loans and leases $ 597,435   $ (15,990 ) $ (11,072 ) $ 570,373  
Interest-bearing liabilities:                        
  Time deposits $ 197,841   $ (2,535 ) $   $ 200,376  
  FHLB advances and other borrowings  $ 75,000   $ 432   $   $ 74,568  
  Junior subordinated debentures $ 25,774   $ 4,358   $   $ 21,416  

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 Twelve Months Ended  
  December 31, 2017   September 30, 2017   June 30, 2017   March 31, 2017   December 31, 2016   December 31, 2017   December 31, 2016  
Consolidated Balance Sheet (selected items)                            
Interest-bearing deposits with banks $   48,367     $   36,870     $   30,806     $   69,978     $   34,206            
Investment securities     701,744         482,399         452,869         400,360         573,763            
Loans held for sale     3,794         6,327         8,590         3,015         9,621            
Portfolio loans and leases     3,285,857         2,677,345         2,666,651         2,555,589         2,535,425            
Allowance for loan and lease losses ("ALLL")     (17,525 )       (17,004 )       (16,399 )       (17,107 )       (17,486 )          
Goodwill and other intangible assets     205,855         128,534         129,211         124,629         125,170            
Total assets     4,449,720         3,476,821         3,438,219         3,292,617         3,421,530            
Deposits - interest-bearing     2,448,954         1,923,567         1,863,288         1,865,009         1,843,495            
Deposits - non-interest-bearing     924,844         760,614         818,475         771,556         736,180            
Short-term borrowings     237,865         180,874         130,295         23,613         204,151            
Long-term FHLB advances and other borrowings     139,140         134,651         164,681         174,711         189,742            
Subordinated notes     98,416         29,573         29,559         29,546         29,532            
Total liabilities     3,921,601         3,074,929         3,043,242         2,904,522         3,040,403            
Total shareholders' equity     528,119         401,892         394,977         388,095         381,127            
                             
Average Balance Sheet (selected items)                            
Interest-bearing deposits with banks $   43,962     $   26,628     $   26,266     $   39,669     $   55,298     $   34,122     $   43,214    
Investment securities     499,968         462,700         429,400         393,306         386,658         446,681         373,134    
Loans held for sale     3,966         3,728         3,855         4,238         11,591         3,945         9,466    
Portfolio loans and leases     2,801,289         2,676,589         2,611,755         2,551,439         2,506,376         2,660,999         2,419,950    
Total interest-earning assets     3,349,185         3,169,645         3,071,276         2,988,652         2,959,923         3,145,747         2,845,764    
Goodwill and intangible assets     142,652         128,917         126,537         124,884         125,614         130,791         126,950    
Total assets     3,640,667         3,441,906         3,333,307         3,244,060         3,215,868         3,416,146         3,105,650    
Deposits - interest-bearing     2,031,170         1,871,494         1,853,660         1,852,194         1,809,276         1,902,536         1,722,724    
Short-term borrowings     180,650         182,845         98,869         47,603         40,629         128,008         37,041    
Long-term FHLB advances     134,605         155,918         171,567         182,507         198,454         161,004         225,815    
Subordinated notes     43,844         29,564         29,550         29,537         29,523         33,153         29,503    
Jr. subordinated debentures     3,957                         997        
Total interest-bearing liabilities     2,394,226         2,239,821         2,153,646         2,111,841         2,077,882         2,225,698         2,015,083    
Total liabilities     3,213,349         3,044,549         2,943,591         2,861,846         2,837,825         3,016,876         2,736,121    
Total shareholders' equity     427,318         397,357         389,716         382,214         378,043         399,270         369,529    
                             
Income Statement                            
Net interest income $   30,321     $   29,438     $   27,965     $   27,403     $   26,990     $   115,127     $   106,236    
Provision for loan and lease losses     1,077         1,333         (83 )       291         1,059         2,618         4,326    
Noninterest income     15,536         15,584         14,785         13,227         13,248         59,132         54,039    
Noninterest expense     31,056         28,184         28,495         26,660         25,087         114,395         101,745    
Income tax expense     19,924         4,766         4,905         4,635         4,684         34,230         18,168    
Net income     (6,200 )       10,739         9,433         9,044         9,408         23,016         36,036    
Basic earnings per share     (0.35 )       0.63         0.56         0.53         0.56         1.34         2.14    
Diluted earnings per share     (0.35 )       0.62         0.55         0.53         0.55         1.32         2.12    
Net income (core) (1)     11,255         11,245         10,236         9,375         9,402         42,111         36,086    
Basic earnings per share (core) (1)     0.64         0.66         0.60         0.55         0.56         2.46         2.14    
Diluted earnings per share (core) (1)     0.63         0.65         0.59         0.55         0.55         2.42         2.12    
Cash dividends paid per share     0.22         0.22         0.21         0.21         0.21         0.86         0.82    
Profitability Indicators                            
Return on average assets   -0.68 %     1.24 %     1.14 %     1.13 %     1.16 %     0.67 %     1.16 %  
Return on average equity   -5.75 %     10.72 %     9.71 %     9.60 %     9.90 %     5.76 %     9.75 %  
Return on tangible equity(1)   -8.03 %     16.52 %     15.06 %     14.96 %     15.68 %     9.23 %     15.79 %  
Return on average assets (core)(1)   1.23 %     1.31 %     1.23 %     1.17 %     1.16 %     1.23 %     1.16 %  
Tax-equivalent net interest margin   3.62 %     3.71 %     3.68 %     3.74 %     3.65 %     3.69 %     3.76 %  
Efficiency ratio(1)   58.64 %     59.30 %     62.16 %     62.66 %     60.30 %     60.61 %     61.27 %  
Share Data                            
Closing share price $   44.20     $   43.80     $   42.50     $   39.50     $   42.15            
Book value per common share $   26.19     $   23.57     $   23.25     $   22.87     $   22.50            
Tangible book value per common share $   15.98     $   16.03     $   15.64     $   15.53     $   15.11            
Price / book value   168.74 %     185.82 %     182.81 %     172.71 %     187.34 %          
Price / tangible book value   276.53 %     273.19 %     271.69 %     254.41 %     278.96 %          
Weighted average diluted shares outstanding     17,632,701         17,253,982         17,232,767         17,182,689         17,164,675         17,381,232         17,028,122    
Shares outstanding, end of period     20,161,795         17,050,151         16,989,849         16,969,451         16,939,715            
Wealth Management Information:                            
Wealth assets under mgmt, administration, supervision and brokerage (2) $   12,968,738     $   12,431,370     $   12,050,555     $   11,725,460     $   11,328,457            
Fees for wealth management services $   9,974     $   9,651     $   9,807     $   9,303     $   9,327            
Capital Ratios                            
Bryn Mawr Trust Company                            
Tier I capital to risk weighted assets ("RWA")   11.10 %     10.78 %     10.29 %     10.58 %     10.50 %          
Total (Tier II) capital to RWA   11.64 %     11.42 %     10.90 %     11.25 %     11.19 %          
Tier I leverage ratio   9.02 %     8.79 %     8.76 %     8.83 %     8.73 %          
Tangible equity ratio (1)   8.67 %     8.46 %     8.24 %     8.46 %     7.85 %          
Common equity Tier I capital to RWA   11.10 %     10.78 %     10.29 %     10.58 %     10.50 %          
                             
Bryn Mawr Bank Corporation                            
Tier I capital to RWA   10.36 %     10.50 %     10.10 %     10.50 %     10.51 %          
Total (Tier II) capital to RWA   13.85 %     12.23 %     11.79 %     12.30 %     12.35 %          
Tier I leverage ratio   8.49 %     8.53 %     8.63 %     8.77 %     8.73 %          
Tangible equity ratio (1)   7.61 %     8.16 %     8.03 %     8.32 %     7.76 %          
Common equity Tier I capital to RWA   9.80 %     10.50 %     10.10 %     10.50 %     10.51 %          
                             
Asset Quality Indicators                            
                             
Net loan and lease charge-offs ("NCO"s) $   556     $   728     $   625     $   670     $   1,317     $   1,909     $   2,697    
Nonperforming loans and leases ("NPL"s) $   8,579     $   4,472     $   7,237     $   7,329     $   8,363            
Other real estate owned ("OREO")     1,554         865         1,122         978         1,017            
Total nonperforming assets ("NPA"s) $    10,133     $    5,337     $    8,359     $    8,307     $    9,380            
                             
Nonperforming loans and leases 30 or more days past due $   6,983     $   2,337     $   4,076     $   5,097     $   6,072            
Performing loans and leases 30 to 89 days past due     7,958         4,558         6,258         6,077         3,062            
Performing loans and leases 90 or more days past due     -         -         -         -         -            
Total delinquent loans and leases $    14,941     $    6,895     $    10,334     $    11,174     $    9,134            
                             
Delinquent loans and leases to total loans and leases   0.45 %     0.26 %     0.39 %     0.44 %     0.36 %          
Delinquent performing loans and leases to total loans and leases   0.24 %     0.17 %     0.23 %     0.24 %     0.12 %          
NCOs / average loans and leases (annualized)   0.08 %     0.11 %     0.10 %     0.11 %     0.21 %     0.07 %     0.11 %  
NPLs / total portfolio loans and leases   0.26 %     0.17 %     0.27 %     0.29 %     0.33 %          
NPAs / total loans and leases and OREO   0.31 %     0.20 %     0.31 %     0.32 %     0.37 %          
NPAs / total assets   0.23 %     0.15 %     0.24 %     0.25 %     0.27 %          
ALLL / NPLs   204.28 %     380.23 %     226.60 %     233.42 %     209.09 %          
ALLL / portfolio loans   0.53 %     0.64 %     0.61 %     0.67 %     0.69 %          
ALLL on originated loans and leases / Originated loans and leases (1)   0.70 %     0.70 %     0.68 %     0.75 %     0.78 %          
(Total Allowance + Loan mark) / Total Gross portfolio loans and leases (1)   1.48 %     1.01 %     1.03 %     1.12 %     1.17 %          
                             
Troubled debt restructurings ("TDR"s) included in NPLs $   3,289     $   2,033     $   2,470     $   2,681     $   2,632            
TDRs in compliance with modified terms     5,800         6,597         6,148         6,492         6,395            
Total TDRs $    9,089     $    8,630     $    8,618     $    9,173     $    9,027            
                             
(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)                        
                         
  December 31, 2017   September 30, 2017   June 30, 2017   March 31, 2017   December 31, 2016      
Assets                        
Cash and due from banks $   11,657     $   8,682     $   19,352     $   17,457     $   16,559        
Interest-bearing deposits with banks     48,367         36,870         30,806         69,978         34,206        
  Cash and cash equivalents     60,024         45,552         50,158         87,435         50,765        
Investment securities, available for sale     689,202         471,721         443,687         391,028         566,996        
Investment securities, held to maturity     7,932         6,255         5,161         5,194         2,879        
Investment securities, trading     4,610         4,423         4,021         4,138         3,888        
Loans held for sale     3,794         6,327         8,590         3,015         9,621        
Portfolio loans and leases, originated     2,487,295         2,433,054         2,409,964         2,286,814         2,240,987        
Portfolio loans and leases, acquired     798,562         244,291         256,687         268,775         294,438        
  Total portfolio loans and leases     3,285,857         2,677,345         2,666,651         2,555,589         2,535,425        
Less: Allowance for losses on originated loan and leases     (17,475 )       (16,957 )       (16,374 )       (17,069 )       (17,458 )      
Less: Allowance for losses on acquired loan and leases     (50 )       (47 )       (25 )       (38 )       (28 )      
  Total allowance for loan and lease losses     (17,525 )       (17,004 )       (16,399 )       (17,107 )       (17,486 )      
  Net portfolio loans and leases     3,268,332         2,660,341         2,650,252         2,538,482         2,517,939        
Premises and equipment     54,458         44,544         44,446         40,515         41,778        
Accrued interest receivable     14,246         9,287         8,717         8,392         8,533        
Mortgage servicing rights     5,861         5,732         5,683         5,686         5,582        
Bank owned life insurance     56,667         39,881         39,680         39,479         39,279        
Federal Home Loan Bank ("FHLB") stock     20,083         16,248         15,168         8,505         17,305        
Goodwill     179,889         107,127         107,127         104,765         104,765        
Intangible assets     25,966         21,407         22,084         19,864         20,405        
Other investments     12,470         8,941         8,682         8,716         8,627        
Other assets     46,186         29,035         24,763         27,403         23,168        
  Total assets $   4,449,720     $   3,476,821     $   3,438,219     $   3,292,617     $   3,421,530        
                                             
Liabilities                        
Deposits                        
  Noninterest-bearing $   924,844     $   760,614     $   818,475     $   771,556     $   736,180        
  Interest-bearing     2,448,954         1,923,567         1,863,288         1,865,009         1,843,495        
  Total deposits     3,373,798         2,684,181         2,681,763         2,636,565         2,579,675        
Short-term borrowings     237,865         180,874         130,295         23,613         204,151        
Long-term FHLB advances     139,140         134,651         164,681         174,711         189,742        
Subordinated notes     98,416         29,573         29,559         29,546         29,532        
Jr. subordinated debentures     21,416         -         -         -         -        
Accrued interest payable     3,527         2,267         2,830         2,722         2,734        
Other liabilities     47,439         43,383         34,114         37,365         34,569        
  Total liabilities     3,921,601         3,074,929         3,043,242         2,904,522         3,040,403        
                         
Shareholders' equity                        
Common stock     24,360         21,248         21,162         21,141         21,111        
Paid-in capital in excess of par value     371,486         235,412         234,654         233,910         232,806        
Less: common stock held in treasury, at cost     (68,179 )       (68,134 )       (67,091 )       (66,969 )       (66,950 )      
Accumulated other comprehensive (loss) income, net of tax     (4,414 )       (1,400 )       (1,564 )       (1,990 )       (2,409 )      
Retained earnings     205,549         214,766         207,816         202,003         196,569        
  Total Bryn Mawr Bank Corporation shareholders' equity     528,802         401,892         394,977         388,095         381,127        
Noncontrolling interest     (683 )       -         -         -         -        
  Total shareholders' equity     528,119         401,892         394,977         388,095         381,127        
  Total liabilities and shareholders' equity $   4,449,720     $   3,476,821     $   3,438,219     $   3,292,617     $   3,421,530        
                                             

 

Bryn Mawr Bank Corporation                          
Supplemental Balance Sheet Information (unaudited)                          
(dollars in thousands)                          
  Portfolio Loans and Leases as of        
  December 31, 2017   September 30, 2017   June 30, 2017   March 31, 2017   December 31, 2016        
Commercial mortgages $   1,523,376     $   1,224,571     $   1,197,936     $   1,137,870     $   1,110,897          
Home equity loans and lines     218,275         206,974         208,480         203,962         208,000          
Residential mortgages     458,886         422,524         416,488         418,264         413,540          
Construction     212,454         133,505         156,581         145,699         141,964          
  Total real estate loans     2,412,991         1,987,574         1,979,485         1,905,795         1,874,401          
Commercial & Industrial     719,312         597,595         599,203         567,917         579,791          
Consumer     38,153         31,306         28,485         23,932         25,341          
Leases     115,401         60,870         59,478         57,945         55,892          
  Total non-real estate loans and leases     872,866         689,771         687,166         649,794         661,024          
     Total portfolio loans and leases $   3,285,857     $   2,677,345     $   2,666,651     $   2,555,589     $   2,535,425          
                                               
                           
  Nonperforming Loans and Leases as of        
  December 31, 2017   September 30, 2017   June 30, 2017   March 31, 2017   December 31, 2016        
Commercial mortgages $   872     $   193     $   818     $   315     $   320          
Home equity loans and lines     1,481         613         1,535         1,828         2,289          
Residential mortgages     4,417         1,589         2,589         2,640         2,658          
Construction     -         -         -         -         -          
  Total nonperforming real estate loans     6,770         2,395         4,942         4,783         5,267          
Commercial & Industrial     1,706         1,977         2,112         2,471         2,957          
Consumer     -         -         10         -         2          
Leases     103         100         173         75         137          
  Total nonperforming non-real estate loans and leases     1,809         2,077         2,295         2,546         3,096          
     Total nonperforming portfolio loans and leases $   8,579     $   4,472     $   7,237     $   7,329     $   8,363          
                                               
                           
  Net Loan and Lease Charge-Offs (Recoveries) for the Three Months Ended        
  December 31, 2017   September 30, 2017   June 30, 2017   March 31, 2017   December 31, 2016        
Commercial mortgage $   51     $   (3 )   $   (3 )   $   (3 )   $   (51 )        
Home equity loans and lines     (5 )       69         169         438         69          
Residential     88         3         43         27         28          
Construction     (1 )       (1 )       (1 )       (1 )       (1 )        
  Total net charge-offs of real estate loans     133         68         208         461         45          
Commercial & Industrial     125         298         185         59         1,128          
Consumer     55         36         16         39         42          
Leases     243         326         216         111         102          
  Total net charge-offs of non-real estate loans and leases     423         660         417         209         1,272          
     Total net charge-offs $   556     $   728     $   625     $   670     $   1,317          
                                               

 

Bryn Mawr Bank Corporation                        
Supplemental Balance Sheet Information (unaudited)                        
(dollars in thousands)                        
  Investment Securities Available for Sale, at Fair Value      
  December 31, 2017   September 30, 2017   June 30, 2017   March 31, 2017   December 31, 2016      
U.S. Treasury securities  $   200,088     $   100     $   100     $   100     $   200,097        
Obligations of the U.S. Government and agencies      151,044         142,711         126,468         100,476         82,198        
State & political subdivisions - tax-free     21,138         23,556         26,958         30,416         33,005        
State & political subdivisions - taxable     172         524         524         524         525        
Mortgage-backed securities     274,990         260,680         230,617         197,420         185,951        
Collateralized mortgage obligations     36,662         39,595         42,549         45,476         48,694        
Other debt securities     1,599         1,100         1,099         1,299         1,299        
Bond mutual funds     -         -         11,956         11,920         11,895        
Other investments     3,509         3,455         3,416         3,397         3,332        
  Total investment securities available for sale, at fair value $   689,202     $   471,721     $   443,687     $   391,028     $   566,996        
                                             
                         
  Unrealized Gain (Loss) on Investment Securities Available for Sale      
  December 31, 2017   September 30, 2017   June 30, 2017   March 31, 2017   December 31, 2016      
U.S. Treasury securities  $   11     $   -     $   -     $   -     $   3        
Obligations of the U.S. Government and agencies      (1,984 )       (920 )       (699 )       (803 )       (913 )      
State & political subdivisions - tax-free     (42 )       23         11         (10 )       (96 )      
State & political subdivisions - taxable     -         1         1         1         2        
Mortgage-backed securities     (968 )       869         480         196         (47 )      
Collateralized mortgage obligations     (934 )       (640 )       (662 )       (777 )       (794 )      
Other debt securities     (1 )       -         (1 )       (1 )       (1 )      
Bond mutual funds     -         -         -         (36 )       (61 )      
Other investments     296         230         203         132         13        
  Total unrealized (losses) gains on investment securities available for sale $   (3,622 )   $   (437 )   $   (667 )   $   (1,298 )   $   (1,894 )      
                                             
                         
  Deposits      
  December 31, 2017   September 30, 2017   June 30, 2017   March 31, 2017   December 31, 2016      
Interest-bearing deposits:                        
  Interest-bearing checking $   481,336     $   395,383     $   381,345     $   395,131     $   379,424        
  Money market     862,639         720,613         729,859         757,071         761,657        
  Savings     338,572         264,273         254,903         255,791         232,193        
  Wholesale non-maturity deposits     62,276         48,620         54,675         69,471         74,272        
  Wholesale time deposits     171,929         178,610         120,524         68,164         73,037        
  Retail time deposits      532,202         316,068         321,982         319,381         322,912        
     Total interest-bearing deposits     2,448,954         1,923,567         1,863,288         1,865,009         1,843,495        
  Noninterest-bearing deposits     924,844         760,614         818,475         771,556         736,180        
        Total deposits $   3,373,798     $   2,684,181     $   2,681,763     $   2,636,565     $   2,579,675        
                                             

 

Bryn Mawr Bank Corporation                              
Detailed Income Statements (unaudited)                              
(dollars in thousands, except per share data)                              
  For the Three Months Ended   For the Twelve Months Ended    
  December 31, 2017   September 30, 2017   June 30, 2017   March 31, 2017   December 31, 2016   December 31, 2017   December 31, 2016    
Interest income:                              
Interest and fees on loans and leases $   32,245     $   30,892     $   29,143     $   28,482     $   28,230     $   120,762     $   110,536      
Interest on cash and cash equivalents     37         36         35         66         53         174         168      
Interest on investment securities     2,516         2,270         2,059         1,778         1,639         8,623         6,287      
  Total interest income     34,798         33,198         31,237         30,326         29,922         129,559         116,991      
Interest expense:                                                          
Interest on deposits     2,739         2,198         1,983         1,828         1,780         8,748         5,833      
Interest on short-term borrowings     579         547         237         27         22         1,390         93      
Interest on FHLB advances and other borrowings     595         645         682         698         760         2,620         3,353      
Interest on jr. subordinated debentures     46         -         -         -         -         46         -      
Interest on subordinated notes     518         370         370         370         370         1,628         1,476      
Total interest expense     4,477         3,760         3,272         2,923         2,932         14,432         10,755      
  Net interest income     30,321         29,438         27,965         27,403         26,990         115,127         106,236      
Provision for loan and lease losses (the "Provision")     1,077         1,333         (83 )       291         1,059         2,618         4,326      
  Net interest income after Provision     29,244         28,105         28,048         27,112         25,931         112,509         101,910      
Noninterest income:                              
Fees for wealth management services      9,974         9,651         9,807         9,303         9,327         38,735         36,690      
Insurance revenue     1,510         1,373         943         763         715         4,589         3,722      
Capital markets revenue     600         843         953         -         -         2,396         -      
Service charges on deposits     655         676         630         647         688         2,608         2,791      
Loan servicing and other fees     536         548         519         503         411         2,106         1,939      
Net gain on sale of loans     493         799         520         629         607         2,441         3,048      
Net gain (loss) on sale of investment securities available for sale     28         72         -         1         9         101         (77 )    
Net (loss) gain on sale of other real estate owned     (92 )       -         (12 )       -         -         (104 )       (76 )    
Dividends on FHLB and FRB stocks     290         217         218         214         309         939         1,063      
Other operating income     1,542         1,405         1,207         1,167         1,182         5,321         4,868      
  Total noninterest income     15,536         15,584         14,785         13,227         13,248         59,132         53,968      
Noninterest expense:                              
Salaries and wages      13,619         13,602         13,580         12,450         11,855         53,251         47,411      
Employee benefits      2,787         2,631         2,475         2,559         2,207         10,452         9,548      
Occupancy and bank premises     2,648         2,485         2,247         2,526         2,407         9,906         9,611      
Furniture, fixtures and equipment     1,816         1,726         1,869         1,974         1,869         7,385         7,520      
Advertising     386         277         405         386         391         1,454         1,381      
Amortization of intangible assets     677         677         687         693         830         2,734         3,498      
Impairment (recovery) of mortgage servicing rights ("MSRs")     (94 )       3         43         3         (580 )       (45 )       131      
Due diligence, merger-related and merger integration expenses     3,507         850         1,236         511         -         6,104         -      
Professional fees     769         739         1,049         711         963         3,268         3,659      
Pennsylvania bank shares tax     16         317         297         664         (204 )       1,294         1,749      
Information technology     1,006         880         821         874         857         3,581         3,661      
Other operating expenses      3,919         3,997         3,786         3,309         4,492         15,011         13,505      
  Total noninterest expense     31,056         28,184         28,495         26,660         25,087         114,395         101,674      
Income before income taxes     13,724         15,505         14,338         13,679         14,092         57,246         54,204      
Income tax expense     19,924         4,766         4,905         4,635         4,684         34,230         18,168      
     Net income $   (6,200 )   $   10,739     $   9,433     $   9,044     $   9,408     $   23,016     $   36,036      
Per share data:                                                          
Weighted average shares outstanding     17,632,701         17,023,046         16,984,563         16,954,132         16,916,705         17,150,126         16,859,623      
Dilutive common shares     -         230,936         248,204         228,557         247,970         231,106         168,499      
Weighted average diluted shares      17,632,701         17,253,982         17,232,767         17,182,689         17,164,675         17,381,232         17,028,122      
Basic earnings (loss) per common share $   (0.35 )   $   0.63     $   0.56     $   0.53     $   0.56     $   1.34     $   2.14      
Diluted earnings (loss) per common share $   (0.35 )   $   0.62     $   0.55     $   0.53     $   0.55     $   1.32     $   2.12      
Dividend declared per share $   0.22     $   0.22     $   0.21     $   0.21     $   0.21     $   0.86     $   0.82      
Effective tax rate   145.18 %     30.74 %     34.21 %     33.88 %     33.24 %     59.79 %     33.52 %    
                               
                               

 

Bryn Mawr Bank Corporation
Tax-Equivalent Net Interest Margin (unaudited)
(dollars in thousands, except per share data)
    For The Three Months Ended   For The Twelve Months Ended
    December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016   December 31, 2017 December 31, 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   $   43,962   $   37   0.33 % $   26,628   $   36   0.54 % $   26,266   $   35   0.53 % $   39,669   $   66   0.67 % $   55,298   $   53   0.38 %   $   34,122   $   174   0.51 % $   43,214   $   168   0.39 %
Investment securities - available for sale:                                              
  Taxable       465,393       2,394   2.04 %     427,106       2,160   2.01 %     391,112       1,940   1.99 %     354,229       1,653   1.89 %     344,931       1,498   1.73 %       409,813       8,229   2.01 %     329,161       5,784   1.76 %
  Tax-exempt       22,640       127   2.23 %     25,268       134   2.10 %     28,970       150   2.08 %     31,485       164   2.11 %     34,985       175   1.99 %       27,062       575   2.12 %     38,173       742   1.94 %
     Total investment securities - available for sale        488,033       2,521   2.05 %     452,374       2,294   2.01 %     420,082       2,090   2.00 %     385,714       1,817   1.91 %     379,916       1,673   1.75 %       436,875       8,804   2.02 %     367,334       6,526   1.78 %
                                               
Investment securities  - held to maturity       7,510       11   0.58 %     6,044       11   0.72 %     5,181       5   0.39 %     3,702       7   0.77 %     2,889       7   0.96 %       5,621       4   0.07 %     2,060       4   0.19 %
Investment securities  - trading       4,425       25   2.24 %     4,282       8   0.74 %     4,137       13   1.26 %     3,890       8   0.83 %     3,853       16   1.65 %       4,185       2   0.05 %     3,740       2   0.05 %
                                               
Loans and leases *       2,805,255       32,403   4.58 %     2,680,317       31,058   4.60 %     2,615,610       29,309   4.49 %     2,555,677       28,622   4.54 %     2,517,967       28,354   4.48 %       2,664,944       121,391   4.56 %     2,429,416       110,925   4.57 %
                                               
  Total interest-earning assets        3,349,185       34,997   4.15 %     3,169,645       33,407   4.18 %     3,071,276       31,452   4.11 %     2,988,652       30,520   4.14 %     2,959,923       30,103   4.05 %       3,145,747       130,375   4.14 %     2,845,764       117,625   4.13 %
                                               
Cash and due from banks       6,855           15,709           15,727           14,942           16,127             13,293           16,317      
Less: allowance for loan and lease losses       (17,046 )         (16,564 )         (17,549 )         (17,580 )         (17,858 )           (17,181 )         (17,159 )    
Other assets        301,673           273,116           263,853           258,046           257,676             274,287           260,728      
                                               
  Total assets   $   3,640,667       $   3,441,906       $   3,333,307       $   3,244,060       $   3,215,868         $   3,416,146       $   3,105,650      
                                               
Liabilities:                                              
                                               
Interest-bearing deposits:                                              
  Savings, NOW and market rate deposits   $   1,410,461   $   897   0.25 % $   1,359,293   $   823   0.24 % $   1,375,949   $   813   0.24 % $   1,388,561   $   756   0.22 % $   1,328,577   $   686   0.21 %   $   1,383,560   $   3,289   0.24 % $   1,292,228   $   2,485   0.19 %
  Wholesale deposits       262,643       822   1.24 %     190,849       548   1.14 %     154,424       378   0.98 %     143,461       317   0.90 %     156,541       319   0.81 %       188,179       2,065   1.10 %     163,724       1,240   0.76 %
  Retail time deposits        358,066       1,020   1.13 %     321,352       827   1.02 %     323,287       792   0.98 %     320,172       755   0.96 %     324,158       775   0.95 %       330,797       3,394   1.03 %     266,772       2,108   0.79 %
     Total interest-bearing deposits       2,031,170       2,739   0.53 %     1,871,494       2,198   0.47 %     1,853,660       1,983   0.43 %     1,852,194       1,828   0.40 %     1,809,276       1,780   0.39 %       1,902,536       8,748   0.46 %     1,722,724       5,833   0.34 %
                                               
Borrowings:                                              
Short-term borrowings       180,650       579   1.27 %     182,845       547   1.19 %     98,869       237   0.96 %     47,603       27   0.23 %     40,629       22   0.22 %       128,008       1,390   1.09 %     37,041       93   0.25 %
Long-term FHLB advances       134,605       595   1.75 %     155,918       645   1.64 %     171,567       682   1.59 %     182,507       698   1.55 %     198,454       760   1.52 %       161,004       2,620   1.63 %     225,815       3,353   1.48 %
Jr. subordinated debt       3,957       46   4.61 %     -       -         -       -         -       -         -       -           997       46   4.61 %      
Subordinated notes       43,844       518   4.69 %     29,564       370   4.97 %     29,550       370   5.02 %     29,537       370   5.08 %     29,523       370   4.99 %       33,153       1,628   4.91 %     29,503       1,476   5.00 %
     Total borrowings       363,056       1,738   1.90 %     368,327       1,562   1.68 %     299,986       1,289   1.72 %     259,647       1,095   1.71 %     268,606       1,152   1.71 %       323,162       5,684   1.76 %     292,359       4,922   1.68 %
                                               
     Total interest-bearing liabilities       2,394,226       4,477   0.74 %     2,239,821       3,760   0.67 %     2,153,646       3,272   0.61 %     2,111,841       2,923   0.56 %     2,077,882       2,932   0.56 %       2,225,698       14,432   0.65 %     2,015,083       10,755   0.53 %
                                               
Noninterest-bearing deposits       771,519           764,562           755,597           711,794           724,465             751,069           687,134      
Other liabilities       47,604           40,166           34,348           38,211           35,478             40,109           33,904      
     Total noninterest-bearing liabilities       819,123           804,728           789,945           750,005           759,943             791,178           721,038      
                                               
     Total liabilities       3,213,349           3,044,549           2,943,591           2,861,846           2,837,825             3,016,876           2,736,121      
                                               
Shareholders' equity        427,318           397,357           389,716           382,214           378,043             399,270           369,529      
                                               
     Total liabilities and shareholders' equity    $   3,640,667       $   3,441,906       $   3,333,307       $   3,244,060       $   3,215,868         $   3,416,146       $   3,105,650      
                                               
Net interest spread       3.41 %     3.51 %     3.50 %     3.58 %     3.49 %       3.49 %     3.60 %
Effect of noninterest-bearing sources       0.21 %     0.20 %     0.18 %     0.16 %     0.16 %       0.20 %         0.16 %
                                                   
Tax-equivalent net interest margin      $   30,520   3.62 %   $   29,647   3.71 %   $   28,180   3.68 %   $   27,597   3.74 %   $   27,171   3.65 %     $   115,943   3.69 %   $   106,870   3.76 %
                                               
Tax-equivalent adjustment      $   199   0.02 %   $   209   0.03 %   $   215   0.03 %   $   194   0.02 %   $   181   0.02 %     $   816   0.03 %   $   634   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     $   276   0.04 %   $   708   0.10 %   $   402   0.06 %   $   726   0.12 %   $   742   0.12 %     $   2,112   0.08 %   $   3,349   0.14 %
Retail time deposits         (13 ) -0.01 %       (15 ) -0.02 %       (18 ) -0.02 %       (19 ) -0.02 %       (19 ) -0.02 %         (65 ) -0.02 %       (219 ) -0.08 %
Short-term borrowings         -   0.00 %       -   0.00 %       -   0.00 %       -   0.00 %       -   0.00 %         -   0.00 %       (12 ) -0.03 %
Long-term FHLB advances and other borrowings         (31 ) -0.09 %       (30 ) -0.08 %       (30 ) -0.07 %       (30 ) -0.07 %       (30 ) -0.06 %         (121 ) -0.08 %       (120 ) -0.05 %
Net interest income from fair value marks     $   320       $   753       $   450       $   775       $   791         $   2,298       $   3,700    
Purchase accounting effect on tax-equivalent margin         0.04 %         0.09 %         0.06 %         0.11 %         0.11 %           0.07 %         0.13 %
* 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 Twelve Months Ended  
  December 31, 2017   September 30, 2017   June 30, 2017   March 31, 2017   December 31, 2016   December 31, 2017   December 31, 2016  
Reconciliation of Net Income to Net Income (core):                            
Net income (a GAAP measure) $   (6,200 )   $   10,739     $   9,433     $   9,044     $   9,408     $   23,016     $   36,036    
Less: Tax-effected non-core noninterest income:                            
  (Gain) loss on sale of investment securities available for sale     (18 )       (47 )       -         (1 )       (6 )       (66 )       50    
Add: Tax-effected non-core noninterest expense items:                            
  Due diligence, merger-related and merger integration  expenses     2,280         553         803         332         -         3,968         -    
Add: One-time federal income tax expense related to re-measurement of net deferred tax asset due to tax reform legislation.     15,193         -         -         -         -         15,193         -    
Net income (core) (a non-GAAP measure) $    11,255     $    11,245     $    10,236     $    9,375     $    9,402     $    42,111     $    36,086    
                                                         
Calculation of Basic and Diluted Earnings per Common Share (core):                          
Weighted average common shares outstanding     17,632,701         17,023,046         16,984,563         16,954,132         16,916,705         17,150,126         16,859,623    
Dilutive common shares     231,038         230,936         248,204         228,557         247,970         231,106         177,491    
Weighted average diluted shares      17,863,739         17,253,982         17,232,767         17,182,689         17,164,675         17,381,232         17,037,114    
Basic earnings per common share (core) (a non-GAAP measure) $   0.64     $   0.66     $   0.60     $   0.55     $   0.56     $   2.46     $   2.14    
Diluted earnings per common share (core) (a non-GAAP measure) $   0.63     $   0.65     $   0.59     $   0.55     $   0.55     $   2.42     $   2.12    
                             
Calculation of Return on Average Tangible Equity:                            
Net income (loss) $   (6,200 )   $   10,739     $   9,433     $   9,044     $   9,408     $   23,016     $   36,036    
Add: Tax-effected amortization and impairment of intangible assets     440         440         447         450         540         1,777         2,274    
Net tangible income (numerator) $   (5,760 )   $   11,179     $   9,880     $   9,494     $   9,948     $   24,793     $   38,310    
                             
Average shareholders' equity $   427,318     $   397,357     $   389,716     $   382,214     $   378,043     $   399,270     $   369,529    
Less: Average goodwill and intangible assets     (142,652 )       (128,917 )       (126,537 )       (124,884 )       (125,614 )       (130,791 )       (126,950 )  
Net average tangible equity (denominator) $   284,666     $   268,440     $   263,179     $   257,330     $   252,429     $   268,479     $   242,579    
                             
Return on tangible equity (a non-GAAP measure)   -8.03 %     16.52 %     15.06 %     14.96 %     15.68 %     9.23 %     15.79 %  
                             
Calculation of Tangible Equity Ratio:                            
Total shareholders' equity $   528,119     $   401,892     $   394,977     $   388,095     $   381,127            
Less: Goodwill and intangible assets     (205,855 )       (128,534 )       (129,211 )       (124,629 )       (125,170 )          
Net tangible equity (numerator) $   322,264     $   273,358     $   265,766     $   263,466     $   255,957            
                             
Total assets $   4,449,720     $   3,476,821     $   3,438,219     $   3,292,617     $   3,421,530            
Less: Goodwill and intangible assets     (205,855 )       (128,534 )       (129,211 )       (124,629 )       (125,170 )          
Tangible assets (denominator) $   4,243,865     $   3,348,287     $   3,309,008     $   3,167,988     $   3,296,360            
                             
Tangible equity ratio   7.59 %     8.16 %     8.03 %     8.32 %     7.76 %          
                             
Calculation of Return on Average Assets (core)                            
Return on average assets (GAAP)   -0.68 %     1.25 %     1.12 %     1.13 %     1.16 %     0.67 %     1.16 %  
Effect of adjustment to GAAP net income to core net income   1.90 %     0.06 %     0.10 %     0.04 %     0.00 %     0.56 %     0.00 %  
Return on average assets (core)   1.23 %     1.31 %     1.22 %     1.17 %     1.16 %     1.23 %     1.16 %  
                             
Calculation of Efficiency Ratio:                            
Noninterest expense $   31,056     $   28,184     $   28,495     $   26,660     $   25,087     $   114,395     $   101,745    
Less: certain noninterest expense items*:                            
  Amortization of intangibles     (677 )       (677 )       (687 )       (693 )       (830 )       (2,734 )       (3,498 )  
  Due diligence, merger-related and merger integration  expenses     (3,507 )       (850 )       (1,236 )       (511 )       -         (6,104 )       -    
Noninterest expense (adjusted) (numerator) $   26,872     $   26,657     $   26,572     $   25,456     $   24,257     $   105,557     $   98,247    
                             
Noninterest income $   15,536     $   15,584     $   14,785     $   13,227     $   13,248     $   59,132     $   54,039    
Less: non-core noninterest income items:                            
  Loss (gain) on sale of investment securities available for sale     (28 )       (72 )       -         (2 )       (9 )       (101 )       77    
Noninterest income (core) $   15,508     $   15,512     $   14,785     $   13,225     $   13,239     $   59,031     $   54,116    
Net interest income     30,321         29,438         27,965         27,403         26,990         115,127         106,236    
Noninterest income (core) and net interest income (denominator) $   45,829     $   44,950     $   42,750     $   40,628     $   40,229     $   174,158     $   160,352    
                             
Efficiency ratio   58.64 %     59.30 %     62.16 %     62.66 %     60.30 %     60.61 %     61.27 %  
* 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 $   17,525     $   17,004     $   16,399     $   17,107     $   17,486            
Less: Allowance on acquired loans     50         47         25         38         28            
Allowance on originated loans and leases $   17,475     $   16,957     $   16,374     $   17,069     $   17,458            
                             
Total Allowance $   17,525     $   17,004     $   16,399     $   17,107     $   17,486            
Loan mark on acquired loans     31,627         10,223         11,084         11,544