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Bryn Mawr Bank Corporation Reports $1.3 Billion Linked Quarter Increase in Wealth Assets, Records $4.5 Million Pre-Tax Charge for Years of Service Incentive Program, Declares $0.25 Dividend

BRYN MAWR, Pa., April 18, 2019 (GLOBE NEWSWIRE) -- Bryn Mawr Bank Corporation (BMTC) (the “Corporation”), parent of The Bryn Mawr Trust Company (the “Bank”) today reported net income of $10.7 million, or $0.53 diluted earnings per share for the three months ended March 31, 2019, as compared to net income of $17.1 million, or $0.84 diluted earnings per share, for the three months ended December 31, 2018, and $15.3 million, or $0.75 diluted earnings per share, for the three months ended March 31, 2018.

On a non-GAAP basis, core net income, which excludes one-time costs associated with our voluntary Years of Service Incentive Program (the “Incentive Program”), income tax charges incurred in connection with the Tax Cuts and Jobs Act ("Tax Reform"), due diligence and merger-related expenses and other non-core income and expense items, as detailed in the appendix to this earnings release, was $14.2 million, or $0.70 diluted earnings per share, for the three months ended March 31, 2019, as compared to $17.2 million, or $0.84 diluted earnings per share, for the three months ended December 31, 2018, and $19.3 million, or $0.94 diluted earnings per share, for the three months ended March 31, 2018. Management believes the core net income measure is important in evaluating the Corporation’s performance on a more comparable basis between periods. A reconciliation of this and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release.

“We are excited with the start of 2019 as we continue to execute upon our long-term strategic goals,” commented Frank Leto, President and Chief Executive Officer, continuing, “Part of our long-term plan is ensuring BMT’s sustainability through proper succession planning. To facilitate the execution of this goal, the Board and executive management team created a one-time, voluntary Years of Service Incentive Program to reward certain long-tenured employees with enhanced benefits while providing BMT with the ability to manage a controlled transition process related to the leadership and knowledge held by individuals who chose to participate. We are proud to have been able to offer this Incentive Program, recognizing that it is our people who have laid the foundation on which we have succeeded for the past 130 years, and it is our people who will enable us to continue to grow and succeed in the future.”

Mr. Leto then continued, “Our first quarter financials remained strong with loan growth of $96 million, or 11% on an annualized basis from year-end, and wealth assets under management approaching $15 billion. Our capital markets team also continues to provide strong fee-based revenue, while credit quality remains strong with the first quarter provision expense primarily impacted by a single credit. With regard to the Incentive Program, we expect to realize long-term savings and recoup the cost of the Incentive Program in approximately three years. I am also pleased to announce that the Board of Directors has authorized a new stock repurchase program under which the Corporation can repurchase up to 1,000,000 shares from time to time at an aggregate purchase price not to exceed $45 million (the "New Repurchase Program"). The New Repurchase Program will become effective upon the completion of the Corporation’s existing 2015 stock repurchase program.”

The Board of Directors of the Corporation declared a quarterly dividend of $0.25 per share, payable June 1, 2019 to shareholders of record as of May 1, 2019.

SIGNIFICANT ITEMS OF NOTE

Results of Operations – First Quarter 2019 Compared to Fourth Quarter 2018

  • Net income for the three months ended March 31, 2019 was $10.7 million, as compared to net income of $17.1 million for the three months ended December 31, 2018. Net interest income for the three months ended March 31, 2019 was $37.6 million, a decrease of $340 thousand over the linked quarter. The provision for loan and lease losses (the “Provision”) for the three months ended March 31, 2019 increased $1.4 million as compared to the fourth quarter of 2018. Total noninterest income increased $1.2 million, total noninterest expense increased $4.9 million, and income tax expense increased $1.0 million for the three months ended March 31, 2019, as compared to the three months ended December 31, 2018. During the first quarter of 2019, the Corporation adopted the Incentive Program which offers certain benefits to eligible employees who meet the Incentive Program requirements and voluntarily exit from service with the Corporation, the Bank or one of their subsidiaries. Noninterest expense for the first quarter of 2019 included a pre-tax, non-recurring, charge of $4.5 million related to the Incentive Program.

    On a non-GAAP basis, core net income, which excludes one-time costs associated with the Incentive Program, income tax charges incurred in connection with Tax Reform, due diligence and merger-related expenses and other non-core income and expense items, as detailed in the appendix to this earnings release, was $14.2 million, or $0.70 per diluted share, for the three months ended March 31, 2019, as compared to $17.2 million or $0.84 per diluted share, for the three months ended December 31, 2018. Management believes the core net income measure is important in evaluating the Corporation’s performance on a more comparable basis between periods. A reconciliation of this and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release.

  • Net interest income for the three months ended March 31, 2019 was $37.6 million, a decrease of $340 thousand over the linked quarter. Tax-equivalent net interest income for the three months ended March 31, 2019 was $37.8 million, a decrease of $338 thousand over the linked quarter. Tax-equivalent net interest income for the first quarter of 2019 was impacted by the accretion of purchase accounting fair value marks of $2.1 million as compared to $2.7 million for the linked quarter. Excluding the effects of these purchase accounting fair value marks, the adjusted tax-equivalent net interest income for the three months ended March 31, 2019 was $35.6 million, an increase of $213 thousand over the linked quarter. A reconciliation of this and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release. Items contributing to the increase adjusted for purchase accounting included increases of $1.1 million and $388 thousand in tax-equivalent interest and fees earned on loans and leases and interest earned on available for sale investment securities, respectively, partially offset by an increase of $1.3 million in interest paid on deposits for the three months ended March 31, 2019 as compared to the linked quarter ended December 31, 2018.

    Tax-equivalent interest and fees earned on loans and leases for the three months ended March 31, 2019 increased $571 thousand over the linked quarter. Average loans and leases for the three months ended March 31, 2019 increased $78.3 million over the linked quarter and experienced a 6 basis point increase in tax-equivalent yield.

    Tax-equivalent interest income on available for sale investment securities increased $388 thousand for the first quarter of 2019 as compared to the linked quarter. Average available for sale investment securities increased by $16.2 million over the linked quarter and experienced a 27 basis point tax-equivalent yield increase.

    Interest expense on deposits for the three months ended March 31, 2019 increased $1.0 million over the linked quarter. Average interest-bearing deposits increased $71.8 million coupled with a 16 basis point increase in the rate paid on deposits as compared to the linked quarter. The increase in interest on deposits was related to the competitive dynamics in the markets in which we operate and certain promotional interest rates offered during the quarter.

    Interest expense on short-term borrowings for the three months ended March 31, 2019 increased $262 thousand over the linked quarter. Average short-term borrowings increased $29.2 million coupled with a 33 basis point increase in the rate paid on short-term borrowings as compared to the linked quarter.

  • The tax-equivalent net interest margin was 3.75% for the three months ended March 31, 2019 as compared to 3.79% for the linked quarter. Adjusting for the impact of the accretion of purchase accounting fair value marks, the adjusted tax-equivalent net interest margin was 3.54% for the three months ended March 31, 2019 as compared to 3.52% for the linked quarter. A reconciliation of this and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release.

  • Noninterest income of $19.3 million for the three months ended March 31, 2019 increased $1.2 million as compared to the linked quarter. Contributing to the increase were increases of $1.8 million, $852 thousand, and $213 thousand in other operating income, capital markets revenue, and insurance commissions, respectively, partially offset by decreases of $1.3 million and $625 thousand in net gain on sale of loans and fees for wealth management services, respectively. The $1.8 million increase in other operating income was primarily due to a $1.6 million increase in gains on trading securities over the linked quarter due to market fluctuations affecting the Corporation's executive and director deferred compensation plan assets.

  • Noninterest expense of $39.7 million for the three months ended March 31, 2019 increased $4.9 million as compared to $34.8 million for the fourth quarter of 2018. The increase on a linked quarter basis was primarily due to increases of $3.0 million, $1.2 million, and $1.0 million in salaries and wages, employee benefits, and other operating expenses, respectively. The linked quarter increase in salaries and wages and employee benefits was largely driven by the expenses from the Incentive Program.

  • The Provision increased $1.3 million for the three months ended March 31, 2019 to $3.7 million, as compared to $2.4 million for the fourth quarter of 2018. During the first quarter of 2019, portfolio loans and leases increased $96.4 million. In addition, net loan and lease charge-offs increased by $926 thousand for the first quarter of 2019, as compared to the previous quarter. The 2.8% increase in loan and lease volume and 57.2% increase in net charge-offs were the primary drivers for the increase in the Provision on a linked-quarter basis. The increase in net charge-offs was primarily a result of the partial charge-off of a single commercial credit. Nonperforming loans and leases as of March 31, 2019 totaled $19.3 million, an increase of $6.5 million from December 31, 2018. The increase in nonperforming loans was largely due to real estate collateralized loans for which management performs an impairment analysis. All nonperforming loans are carried at their net realizable value.

  • The effective tax rate for the first quarter of 2019 increased significantly as compared to the fourth quarter of 2018. The increase in the effective tax rate was primarily due to a $2.6 million tax benefit recorded in the fourth quarter of 2018 for certain discrete items included on our 2017 tax return which was filed during the fourth quarter of 2018. The effective tax rate for the year ended December 31, 2018, excluding discrete income tax benefits, was 21.7%.

Results of Operations – First Quarter 2019 Compared to First Quarter 2018

  • Net income for the three months ended March 31, 2019 was $10.7 million, or $0.53 diluted earnings per share, as compared to net income of $15.3 million, or diluted earnings per share of $0.75 for the same period in 2018. Contributing to the net income decrease were increases of $3.7 million and $2.7 million in noninterest expense and the Provision, respectively.

    On a non-GAAP basis, core net income, which excludes one-time costs associated with the Incentive Program, income tax charges incurred in connection with Tax Reform, due diligence and merger-related expenses and other non-core income and expense items, as detailed in the appendix to this earnings release, was $14.2 million, or $0.70 per diluted share, for the three months ended March 31, 2019 as compared to $19.3 million, or $0.94 per diluted share, for the same period in 2018. Management believes the core net income measure is important in evaluating the Corporation’s performance on a more comparable basis between periods. A reconciliation of this and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release.

  • Net interest income for the three months ended March 31, 2019 was $37.6 million, an increase of $208 thousand as compared to the same period in 2018. Tax-equivalent net interest income for the three months ended March 31, 2019 was $37.8 million, an increase of $256 thousand as compared to the same period in 2018. Tax-equivalent net interest income for the first quarter of 2019 was impacted by the accretion of purchase accounting fair value marks of $2.1 million as compared to $3.0 million for the same period in 2018. Excluding the effects of these purchase accounting fair value marks, the adjusted tax-equivalent net interest income for the three months ended March 31, 2019 was $35.6 million, an increase of $1.1 million as compared to the same period in 2018. A reconciliation of this and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release. Items contributing to the increase adjusted for purchase accounting included increases of $4.8 million and $812 thousand in tax-equivalent interest and fees earned on loans and leases and interest earned on available for sale investment securities, respectively, partially offset by an increase of $4.5 million in interest paid on deposits for the three months ended March 31, 2019 as compared to the same period in 2018.

    Tax-equivalent interest and fees on loans and leases increased $4.1 million for the three months ended March 31, 2019 as compared to the same period in 2018. Average loans and leases for the first quarter of 2019 increased $186.5 million from the same period in 2018 and experienced a 21 basis point increase in tax-equivalent yield.

    Average available for sale investment securities increased by $34.3 million for the three months ended March 31, 2019 as compared to the same period in 2018 and experienced a 46 basis point tax-equivalent yield increase. The increase in average balances and yield on available for sale investment securities resulted in an $812 thousand increase in tax-equivalent interest income on available for sale investment securities for the first quarter of 2019 as compared to the same period in 2018.

    Partially offsetting the effect on net interest income associated with the increase in average loans and leases and available for sale investment securities was a $4.6 million increase in interest expense on deposits for the three months ended March 31, 2019 as compared to the same period in 2018. Average interest-bearing deposits increased by $238.7 million, coupled with a 65 basis point increase in rate paid for the first quarter of 2019 as compared to the same period in 2018.

  • The tax-equivalent net interest margin was 3.75% for the three months ended March 31, 2019 as compared to 3.94% for the same period in 2018. Adjusting for the impact of the accretion of purchase accounting fair value marks, the adjusted tax-equivalent net interest margin was 3.54% and 3.62% for three months ended March 31, 2019 and 2018, respectively. A reconciliation of this and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release.

  • Noninterest income of $19.3 million for the three months ended March 31, 2019 decreased by $283 thousand as compared to the same period in 2018. Contributing to this decrease were decreases of $1.5 million, $200 thousand, and $199 thousand in other operating income, net gain on sale of other real estate owned, and net gain on sale of loans, respectively. The decrease in other operating income was primarily due to a $2.2 million decrease in recoveries of purchase accounting fair value marks resulting from pay-offs of previously acquired credit-impaired loans for the three months ended March 31, 2019 as compared to the same period in 2018. Partially offsetting the decrease in noninterest income was an increase of $1.6 million in capital markets revenue which was primarily due to increased volume of capital market transactions.

  • Noninterest expense of $39.7 million for the three months ended March 31, 2019 increased $3.7 million as compared to the same period in 2018. Contributing to the $3.7 million increase were increases of $4.9 million, $1.2 million, $572 thousand, $491 thousand, and $458 thousand in salaries and wages, other operating expenses, professional fees, furniture, fixtures and equipment expenses, and employee benefits, respectively. The increases in salaries and wages and employee benefits was largely driven by the expenses incurred in connection with the Incentive Program. Partially offsetting these increases in noninterest expense was a decrease of $4.3 million in due diligence, merger-related and merger integration expenses for the three months ended March 31, 2019 as compared to the same period in 2018.

  • The Provision increased $2.7 million for the three months ended March 31, 2019 to $3.7 million, as compared to $1.0 million for the same period in 2018. In addition, net loan and lease charge-offs increased by $1.7 million for the first quarter of 2019, as compared to the same period in 2018. This 6.6% increase in loan and lease volume and 185.1% increase in net charge-offs were the primary drivers for the increase in the Provision on a year-over-year basis. Nonperforming loans and leases as of March 31, 2019 totaled $19.3 million, an increase of $11.8 million from March 31, 2018. The increase in nonperforming loans was comprised primarily of real estate collateralized loans for which management performs impairment analyses. All nonperforming loans are carried at their net realizable value.

  • The effective tax rate for the first quarter of 2019 decreased to 20.57% as compared to 23.25% for the first quarter of 2018. The decrease was primarily due to $590 thousand of discrete tax charges included in tax expense in the first quarter of 2018 related to the re-measurement of net deferred tax assets as a result of Tax Reform, related to revised fair value adjustments associated with the merger with Royal Bancshares of Pennsylvania, Inc. in December 2017.

Financial Condition – March 31, 2019 Compared to December 31, 2018

  • Total assets as of March 31, 2019 were $4.63 billion, a decrease of $20.5 million from December 31, 2018. The decrease was primarily due to the decrease in available for sale investment securities discussed in the bullet point below, partially offset by the increase in portfolio loans and leases discussed in the bullet point below, as well as $44.0 million of operating lease right-of-use assets as of March 31, 2019 included on the balance sheet as a result of a recently adopted accounting pronouncement.

  • Available for sale investment securities as of March 31, 2019 totaled $560.0 million, a decrease of $177.5 million from December 31, 2018. The decrease was primarily related to the maturing, in January 2019, of $200.0 million short-term U.S. Treasury securities, partially offset by a $33.0 million increase in mortgage-backed securities.

  • Total portfolio loans and leases of $3.52 billion as of March 31, 2019 increased by $96.4 million from December 31, 2018, an increase of 2.8%. Increases of $89.3 million, $11.8 million, $10.1 million and $8.0 million in commercial mortgages, leases, commercial and industrial loans and residential mortgages, respectively, were offset by decreases of $21.3 million and $2.6 million in construction loans and home equity loans and lines, respectively.

  • The Allowance as of March 31, 2019 was $20.6 million, or 0.59% of portfolio loans and leases, as compared to $19.4 million, or 0.57% of portfolio loans and leases as of December 31, 2018. In addition to the ratio of Allowance to portfolio loans and leases, management also calculates two non-GAAP measures: the Allowance for originated loans and leases as a percentage of originated loans and leases, which was 0.68% as of March 31, 2019, as compared to 0.67% as of December 31, 2018, and the Allowance plus the remaining loan mark as a percentage of gross loans, which was 1.03% as of March 31, 2019, as compared to 1.08% as of December 31, 2017. A reconciliation of these and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release.

  • Deposits of $3.64 billion as of March 31, 2019 increased $38.5 million from December 31, 2018. Increases of $98.7 million and $18.5 million in money market and savings accounts, respectively, were partially offset by decreases of $40.9 million, $19.3 million, $11.2 million, and $7.3 million in wholesale deposits, noninterest-bearing demand accounts, retail time deposits and wholesale non-maturity deposits, respectively.

  • Borrowings of $299.8 million as of March 31, 2019, which include short-term borrowings, long-term FHLB advances, subordinated notes and junior subordinated debentures, decreased $128.0 million from December 31, 2018, primarily due to decreases in short-term borrowings.

  • Wealth assets under management, administration, supervision and brokerage totaled $14.74 billion as of March 31, 2019, an increase of $1.31 billion from December 31, 2018.

  • The capital ratios for the Bank and the Corporation, as of March 31, 2019, as shown in the attached tables, indicate levels above the regulatory minimum to be considered “well capitalized.”

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

Such forward-looking statements involve known and unknown risks and uncertainties. A number of factors, many of which are beyond the Corporation's control, could cause our actual results, events or developments, or industry results, to be materially different from any future results, events or developments expressed, implied or anticipated by such forward-looking statements, and so our business and financial condition and results of operations could be materially and adversely affected. Such factors include, among others, our inability to successfully integrate acquired businesses, the possibility that integration may take longer than anticipated or be more costly to complete and that the anticipated benefits, including any anticipated cost savings or strategic gains may be significantly harder to achieve or take longer than anticipated or may not be achieved, our need for capital, our ability to control operating costs and expenses, and to manage loan and lease delinquency rates; the credit risks of lending activities and overall quality of the composition of our loan, lease and securities portfolio; the impact of economic conditions, consumer and business spending habits, and real estate market conditions on our business and in our market area; changes in the levels of general interest rates, deposit interest rates, or net interest margin and funding sources; changes in banking regulations and policies and the possibility that any banking agency approvals we might require for certain activities will not be obtained in a timely manner or at all or will be conditioned in a manner that would impair our ability to implement our business plans; changes in accounting policies and practices; litigation; cybersecurity events; 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.

FOR MORE INFORMATION CONTACT:

Frank Leto, President, CEO
610-581-4730
Mike Harrington, CFO
610-526-2466

Bryn Mawr Bank Corporation
Summary Financial Information (unaudited)
(dollars in thousands, except per share data)

As of or For the Three Months Ended

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

March 31,
2018

Consolidated Balance Sheet (selected items)

Interest-bearing deposits with banks

$

29,449

$

34,357

$

35,233

$

39,924

$

24,589

Investment securities

578,629

753,628

545,320

547,088

550,199

Loans held for sale

2,884

1,749

4,111

4,204

5,522

Portfolio loans and leases

3,523,514

3,427,154

3,381,475

3,389,501

3,305,795

Allowance for loan and lease losses ("ALLL")

(20,616

)

(19,426

)

(18,684

)

(19,398

)

(17,662

)

Goodwill and other intangible assets

206,006

207,467

208,165

208,139

207,287

Total assets

4,631,993

4,652,485

4,388,442

4,394,203

4,300,376

Deposits - interest-bearing

2,755,307

2,697,468

2,522,863

2,466,529

2,452,421

Deposits - non-interest-bearing

882,310

901,619

834,363

892,386

863,118

Short-term borrowings

124,214

252,367

226,498

227,059

173,704

Long-term FHLB advances

55,407

55,374

72,841

87,808

107,784

Subordinated notes

98,571

98,526

98,482

98,491

98,448

Jr. subordinated debentures

21,622

21,580

21,538

21,497

21,456

Total liabilities

4,056,886

4,087,781

3,837,017

3,851,700

3,767,315

Total shareholders' equity

575,107

564,704

551,425

542,503

533,061

Average Balance Sheet (selected items)

Interest-bearing deposits with banks

32,742

38,957

37,467

37,215

38,044

Investment securities

569,915

554,265

546,998

549,249

535,471

Loans held for sale

1,214

2,005

4,932

4,413

2,848

Portfolio loans and leases

3,476,525

3,397,479

3,374,767

3,348,926

3,288,364

Total interest-earning assets

4,080,396

3,992,706

3,964,164

3,939,803

3,864,727

Goodwill and intangible assets

206,716

207,893

207,880

208,039

205,529

Total assets

4,545,129

4,413,000

4,376,148

4,344,541

4,246,180

Deposits - interest-bearing

2,674,194

2,602,412

2,493,213

2,489,296

2,435,491

Short-term borrowings

157,652

128,429

208,201

205,323

172,534

Long-term FHLB advances

55,385

67,363

81,460

102,023

123,920

Subordinated notes

98,542

98,497

98,457

98,463

98,430

Jr. subordinated debentures

21,595

21,553

21,511

21,470

21,430

Total interest-bearing liabilities

3,007,368

2,918,254

2,902,842

2,916,575

2,851,805

Total liabilities

3,973,043

3,856,694

3,828,241

3,810,640

3,719,746

Total shareholders' equity

572,086

556,306

547,907

533,901

526,434


As of or For the Three Months Ended

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

March 31,
2018

Income Statement

Net interest income

$

37,647

$

37,987

$

36,729

$

37,316

$

37,439

Provision for loan and lease losses

3,736

2,362

664

3,137

1,030

Noninterest income

19,253

18,097

18,274

20,075

19,536

Noninterest expense

39,724

34,845

33,592

35,836

36,030

Income tax expense

2,764

1,746

4,066

3,723

4,630

Net income

10,676

17,131

16,681

14,695

15,285

Net (loss) income attributable to noncontrolling interest

(1

)

(5

)

(1

)

7

(1

)

Net income attributable to Bryn Mawr Bank Corporation

10,677

17,136

16,682

14,688

15,286

Basic earnings per share

0.53

0.85

0.82

0.73

0.76

Diluted earnings per share

0.53

0.84

0.82

0.72

0.75

Net income (core) (1)

14,230

17,167

17,140

17,031

19,282

Basic earnings per share (core) (1)

0.71

0.85

0.85

0.84

0.95

Diluted earnings per share (core) (1)

0.70

0.84

0.84

0.83

0.94

Dividends paid or accrued per share

0.25

0.25

0.25

0.22

0.22

Profitability Indicators

Return on average assets

0.95

%

1.54

%

1.51

%

1.36

%

1.46

%

Return on average equity

7.57

%

12.22

%

12.08

%

11.03

%

11.78

%

Return on tangible equity(1)

12.65

%

20.37

%

20.25

%

18.90

%

20.15

%

Return on tangible equity (core)(1)

16.59

%

20.40

%

20.78

%

21.78

%

25.19

%

Return on average assets (core)(1)

1.27

%

1.54

%

1.55

%

1.57

%

1.84

%

Return on average equity (core)(1)

10.09

%

12.24

%

12.41

%

12.79

%

14.85

%

Tax-equivalent net interest margin

3.75

%

3.79

%

3.69

%

3.81

%

3.94

%

Efficiency ratio(1)

60.26

%

60.35

%

58.75

%

55.57

%

54.12

%

Share Data

Closing share price

$

36.13

$

34.40

$

46.90

$

46.30

$

43.95

Book value per common share

$

28.52

$

28.01

$

27.18

$

26.80

$

26.35

Tangible book value per common share

$

18.34

$

17.75

$

16.95

$

16.55

$

16.14

Price / book value

126.68

%

122.81

%

172.55

%

172.76

%

166.79

%

Price / tangible book value

197.00

%

193.80

%

276.70

%

279.74

%

272.35

%

Weighted average diluted shares outstanding

20,271,661

20,321,283

20,438,376

20,413,578

20,450,494

Shares outstanding, end of period

20,167,729

20,163,816

20,291,416

20,242,893

20,229,896

Wealth Management Information:

Wealth assets under mgmt, administration, supervision and brokerage (2)

$

14,736,512

$

13,429,544

$

13,913,265

$

13,404,723

$

13,146,926

Fees for wealth management services

$

10,392

$

11,017

$

10,343

$

10,658

$

10,308


As of or For the Three Months Ended

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

March 31,
2018

Capital Ratios(3)

Bryn Mawr Trust Company ("BMTC")

Tier I capital to risk weighted assets ("RWA")

11.30

%

11.42

%

11.55

%

11.34

%

11.29

%

Total capital to RWA

11.87

%

11.99

%

12.10

%

11.91

%

11.82

%

Tier I leverage ratio

9.48

%

9.48

%

9.47

%

9.49

%

9.39

%

Tangible equity ratio (1)

9.34

%

8.95

%

9.29

%

9.27

%

9.19

%

Common equity Tier I capital to RWA

11.30

%

11.42

%

11.55

%

11.34

%

11.29

%

Bryn Mawr Bank Corporation ("BMBC")

Tier I capital to RWA

10.72

%

10.92

%

10.90

%

10.46

%

10.46

%

Total capital to RWA

14.00

%

14.30

%

14.33

%

13.87

%

13.93

%

Tier I leverage ratio

8.99

%

9.06

%

8.94

%

8.75

%

8.71

%

Tangible equity ratio (1)

8.35

%

8.05

%

8.23

%

8.00

%

7.98

%

Common equity Tier I capital to RWA

10.14

%

10.32

%

10.29

%

9.86

%

9.85

%

Asset Quality Indicators

Net loan and lease charge-offs ("NCO"s)

$

2,546

$

1,620

$

1,378

$

1,401

$

893

Nonperforming loans and leases ("NPL"s)

$

19,283

$

12,820

$

8,990

$

9,448

$

7,533

Other real estate owned ("OREO")

84

417

529

531

300

Total nonperforming assets ("NPA"s)

$

19,367

$

13,237

$

9,519

$

9,979

$

7,833

Nonperforming loans and leases 30 or more days past due

$

8,489

$

7,765

$

4,906

$

6,749

$

5,775

Performing loans and leases 30 to 89 days past due

6,432

5,464

9,145

10,378

6,547

Performing loans and leases 90 or more days past due

Total delinquent loans and leases

$

14,921

$

13,229

$

14,051

$

17,127

$

12,322

Delinquent loans and leases to total loans and leases

0.42

%

0.39

%

0.42

%

0.50

%

0.37

%

Delinquent performing loans and leases to total loans and leases

0.18

%

0.16

%

0.27

%

0.31

%

0.20

%

NCOs / average loans and leases (annualized)

0.30

%

0.19

%

0.16

%

0.17

%

0.11

%

NPLs / total portfolio loans and leases

0.55

%

0.37

%

0.27

%

0.28

%

0.23

%

NPAs / total loans and leases and OREO

0.55

%

0.39

%

0.28

%

0.29

%

0.24

%

NPAs / total assets

0.42

%

0.28

%

0.22

%

0.23

%

0.18

%

ALLL / NPLs

106.91

%

151.53

%

207.83

%

205.31

%

234.46

%

ALLL / portfolio loans

0.59

%

0.57

%

0.55

%

0.57

%

0.53

%

ALLL for originated loans and leases / Originated loans and leases (1)

0.68

%

0.67

%

0.68

%

0.71

%

0.69

%

(Total ALLL + Loan mark) / Total Gross portfolio loans and leases (1)

1.03

%

1.08

%

1.28

%

1.35

%

1.50

%

Troubled debt restructurings ("TDR"s) included in NPLs

$

4,057

$

1,217

$

1,208

$

1,044

$

1,125

TDRs in compliance with modified terms

5,149

9,745

4,316

4,117

5,235

Total TDRs

$

9,206

$

10,962

$

5,524

$

5,161

$

6,360

  1. Non-GAAP measure - see Appendix for Non-GAAP to GAAP reconciliation.

  2. Brokerage assets represent assets held at a registered broker dealer under a clearing agreement.

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

Bryn Mawr Bank Corporation
Detailed Balance Sheets (unaudited)
(dollars in thousands)

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

March 31,
2018

Assets

Cash and due from banks

$

13,656

$

14,099

$

10,121

$

7,318

$

7,804

Interest-bearing deposits with banks

29,449

34,357

35,233

39,924

24,589

Cash and cash equivalents

43,105

48,456

45,354

47,242

32,393

Investment securities, available for sale

559,983

737,442

528,064

531,075

534,103

Investment securities, held to maturity

10,457

8,684

8,916

7,838

7,885

Investment securities, trading

8,189

7,502

8,340

8,175

8,211

Loans held for sale

2,884

1,749

4,111

4,204

5,522

Portfolio loans and leases, originated

3,032,270

2,885,251

2,752,160

2,700,815

2,564,827

Portfolio loans and leases, acquired

491,244

541,903

629,315

688,686

740,968

Total portfolio loans and leases

3,523,514

3,427,154

3,381,475

3,389,501

3,305,795

Less: Allowance for losses on originated loan and leases

(20,519

)

(19,329

)

(18,612

)

(19,181

)

(17,570

)

Less: Allowance for losses on acquired loan and leases

(97

)

(97

)

(72

)

(217

)

(92

)

Total allowance for loan and lease losses

(20,616

)

(19,426

)

(18,684

)

(19,398

)

(17,662

)

Net portfolio loans and leases

3,502,898

3,407,728

3,362,791

3,370,103

3,288,133

Premises and equipment

67,279

65,648

63,281

54,185

54,986

Operating lease right-of-use assets

43,985

Accrued interest receivable

13,123

12,585

13,232

13,115

12,521

Mortgage servicing rights

4,910

5,047

5,328

5,511

5,706

Bank owned life insurance

58,138

57,844

57,543

57,243

56,946

Federal Home Loan Bank ("FHLB") stock

10,526

14,530

14,678

16,678

15,499

Goodwill

184,012

184,012

183,864

183,162

182,200

Intangible assets

21,994

23,455

24,301

24,977

25,087

Other investments

16,526

16,526

16,529

16,774

11,720

Other assets

83,984

61,277

52,110

53,921

59,464

Total assets

$

4,631,993

$

4,652,485

$

4,388,442

$

4,394,203

$

4,300,376

Liabilities

Deposits

Noninterest-bearing

$

882,310

$

901,619

$

834,363

$

892,386

$

863,118

Interest-bearing

2,755,307

2,697,468

2,522,863

2,466,529

2,452,421

Total deposits

3,637,617

3,599,087

3,357,226

3,358,915

3,315,539

Short-term borrowings

124,214

252,367

226,498

227,059

173,704

Long-term FHLB advances

55,407

55,374

72,841

87,808

107,784

Subordinated notes

98,571

98,526

98,482

98,491

98,448

Jr. subordinated debentures

21,622

21,580

21,538

21,497

21,456

Operating lease liabilities

48,224

Accrued interest payable

8,674

6,652

7,193

5,230

4,814

Other liabilities

62,557

54,195

53,239

52,700

45,570

Total liabilities

4,056,886

4,087,781

3,837,017

3,851,700

3,767,315

Shareholders' equity

Common stock

24,577

24,545

24,533

24,453

24,439

Paid-in capital in excess of par value

375,655

374,010

373,205

372,227

371,319

Less: common stock held in treasury, at cost

(76,974

)

(75,883

)

(70,437

)

(68,943

)

(68,787

)

Accumulated other comprehensive (loss) income, net of tax

(3,278

)

(7,513

)

(13,402

)

(11,191

)

(9,664

)

Retained earnings

255,813

250,230

238,204

226,634

216,438

Total Bryn Mawr Bank Corporation shareholders' equity

575,793

565,389

552,103

543,180

533,745

Noncontrolling interest

(686

)

(685

)

(678

)

(677

)

(684

)

Total shareholders' equity

575,107

564,704

551,425

542,503

533,061

Total liabilities and shareholders' equity

$

4,631,993

$

4,652,485

$

4,388,442

$

4,394,203

$

4,300,376

Bryn Mawr Bank Corporation
Supplemental Balance Sheet Information (unaudited)
(dollars in thousands)

Portfolio Loans and Leases as of

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

March 31,
2018

Commercial mortgages

$

1,746,695

$

1,657,436

$

1,618,493

$

1,613,721

$

1,541,457

Home equity loans and lines

204,791

207,351

207,806

206,429

211,469

Residential mortgages

502,379

494,355

467,402

449,060

453,655

Construction

159,761

181,078

178,493

190,874

202,168

Total real estate loans

2,613,626

2,540,220

2,472,194

2,460,084

2,408,749

Commercial & Industrial

705,701

695,584

722,999

745,306

727,231

Consumer

47,821

46,814

47,809

51,462

48,423

Leases

156,366

144,536

138,473

132,649

121,392

Total non-real estate loans and leases

909,888

886,934

909,281

929,417

897,046

Total portfolio loans and leases

$

3,523,514

$

3,427,154

$

3,381,475

$

3,389,501

$

3,305,795


Nonperforming Loans and Leases as of

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

March 31,
2018

Commercial mortgages

$

5,558

$

2,568

$

735

$

1,011

$

138

Home equity loans and lines

6,904

3,616

1,933

2,323

1,949

Residential mortgages

2,863

3,452

2,770

2,647

2,603

Construction

291

Total nonperforming real estate loans

15,325

9,636

5,729

5,980

4,690

Commercial & Industrial

2,965

2,101

1,782

1,585

2,499

Consumer

80

108

117

Leases

913

975

1,362

1,882

344

Total nonperforming non-real estate loans and leases

3,958

3,184

3,261

3,468

2,843

Total nonperforming portfolio loans and leases

$

19,283

$

12,820

$

8,990

$

9,448

$

7,533


Net Loan and Lease Charge-Offs (Recoveries) for the Three Months Ended

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

March 31,
2018

Commercial mortgage

$

1,373

$

249

$

56

$

13

$

(3

)

Home equity loans and lines

46

107

199

25

Residential

329

304

(12

)

(1

)

Construction

(1

)

(1

)

(1

)

Total net charge-offs of real estate loans

1,747

660

44

210

21

Commercial & Industrial

391

298

304

467

283

Consumer

94

147

71

41

48

Leases

314

515

959

683

541

Total net charge-offs of non-real estate loans and leases

799

960

1,334

1,191

872

Total net charge-offs

$

2,546

$

1,620

$

1,378

$

1,401

$

893


Investment Securities Available for Sale, at Fair Value

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

March 31,
2018

U.S. Treasury securities

$

100

$

200,013

$

100

$

100

$

100

Obligations of the U.S. Government and agencies

186,746

195,855

190,453

183,256

175,107

State & political subdivisions - tax-free

8,468

11,162

15,629

17,254

19,746

State & political subdivisions - taxable

170

170

170

171

171

Mortgage-backed securities

322,913

289,890

284,421

292,563

303,902

Collateralized mortgage obligations

40,486

39,252

36,193

36,634

33,980

Other debt securities

1,100

1,100

1,098

1,097

1,097

Total investment securities available for sale, at fair value

$

559,983

$

737,442

$

528,064

$

531,075

$

534,103


Unrealized Gain (Loss) on Investment Securities Available for Sale

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

March 31,
2018

U.S. Treasury securities

$

$

(13

)

$

$

$

Obligations of the U.S. Government and agencies

(1,334

)

(2,749

)

(5,881

)

(4,594

)

(3,756

)

State & political subdivisions - tax-free

(5

)

(39

)

(90

)

(57

)

(74

)

State & political subdivisions - taxable

(1

)

(1

)

(1

)

(1

)

Mortgage-backed securities

(696

)

(4,186

)

(7,584

)

(6,141

)

(5,169

)

Collateralized mortgage obligations

(510

)

(898

)

(1,618

)

(1,443

)

(1,322

)

Other debt securities

(2

)

(3

)

(3

)

Total unrealized losses on investment securities available for sale

$

(2,545

)

$

(7,886

)

$

(15,176

)

$

(12,239

)

$

(10,325

)


Deposits

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

March 31,
2018

Interest-bearing deposits:

Interest-bearing demand

$

664,683

$

664,749

$

578,243

$

617,258

$

529,478

Money market

961,348

862,644

812,027

814,530

856,072

Savings

265,613

247,081

286,266

291,858

308,925

Retail time deposits

531,522

542,702

561,123

536,287

523,138

Wholesale non-maturity deposits

47,744

55,031

24,040

36,826

63,449

Wholesale time deposits

284,397

325,261

261,164

169,770

171,359

Total interest-bearing deposits

2,755,307

2,697,468

2,522,863

2,466,529

2,452,421

Noninterest-bearing deposits

882,310

901,619

834,363

892,386

863,118

Total deposits

$

3,637,617

$

3,599,087

$

3,357,226

$

3,358,915

$

3,315,539

Bryn Mawr Bank Corporation
Detailed Income Statements (unaudited)
(dollars in thousands, except per share data)

For the Three Months Ended

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

March 31,
2018

Interest income:

Interest and fees on loans and leases

$

44,837

$

44,157

$

42,103

$

41,689

$

40,689

Interest on cash and cash equivalents

132

83

64

64

53

Interest on investment securities

3,499

3,294

3,066

3,001

2,792

Total interest income

48,468

47,534

45,233

44,754

43,534

Interest expense:

Interest on deposits

8,097

7,048

5,533

4,499

3,472

Interest on short-term borrowings

943

681

1,096

985

630

Interest on FHLB advances

278

331

394

490

562

Interest on jr. subordinated debentures

358

342

337

321

288

Interest on subordinated notes

1,145

1,145

1,144

1,143

1,143

Total interest expense

10,821

9,547

8,504

7,438

6,095

Net interest income

37,647

37,987

36,729

37,316

37,439

Provision for loan and lease losses (the "Provision")

3,736

2,362

664

3,137

1,030

Net interest income after Provision

33,911

35,625

36,065

34,179

36,409

Noninterest income:

Fees for wealth management services

10,392

11,017

10,343

10,658

10,308

Insurance commissions

1,672

1,459

1,754

1,902

1,693

Capital markets revenue

2,219

1,367

710

2,105

666

Service charges on deposits

808

798

726

752

713

Loan servicing and other fees

609

539

559

475

686

Net gain on sale of loans

319

1,606

631

528

518

Net gain on sale of investment securities available for sale

7

Net gain (loss) on sale of other real estate owned

(24

)

3

5

111

176

Dividends on FHLB and FRB stocks

411

305

375

510

431

Other operating income

2,847

1,003

3,171

3,034

4,338

Total noninterest income

19,253

18,097

18,274

20,075

19,536

Noninterest expense:

Salaries and wages

20,901

17,921

16,528

16,240

15,982

Employee benefits

4,166

2,977

3,356

2,877

3,708

Occupancy and bank premises

3,252

3,135

2,717

2,697

3,050

Furniture, fixtures and equipment

2,389

2,370

2,070

2,069

1,898

Advertising

415

540

349

369

461

Amortization of intangible assets

938

997

891

889

879

Impairment (recovery) of mortgage servicing rights ("MSRs")

17

101

(23

)

(1

)

(50

)

Due diligence, merger-related and merger integration expenses

389

3,053

4,319

Professional fees

1,320

1,526

997

932

748

Pennsylvania bank shares tax

409

374

472

473

473

Information technology

1,320

1,340

1,155

1,252

1,195

Other operating expenses

4,597

3,564

4,691

4,986

3,367

Total noninterest expense

39,724

34,845

33,592

35,836

36,030

Income before income taxes

13,440

18,877

20,747

18,418

19,915

Income tax expense

2,764

1,746

4,066

3,723

4,630

Net income

$

10,676

$

17,131

$

16,681

$

14,695

$

15,285

Net (loss) income attributable to noncontrolling interest

(1

)

(5

)

(1

)

7

(1

)

Net income attributable to Bryn Mawr Bank Corporation

$

10,677

$

17,136

$

16,682

$

14,688

$

15,286

Per share data:

Weighted average shares outstanding

20,168,498

20,225,993

20,270,706

20,238,852

20,202,969

Dilutive common shares

103,163

95,290

167,670

174,726

247,525

Weighted average diluted shares

20,271,661

20,321,283

20,438,376

20,413,578

20,450,494

Basic earnings per common share

$

0.53

$

0.85

$

0.82

$

0.73

$

0.76

Diluted earnings per common share

$

0.53

$

0.84

$

0.82

$

0.72

$

0.75

Dividends paid or accrued per share

$

0.25

$

0.25

$

0.25

$

0.22

$

0.22

Effective tax rate

20.57

%

9.25

%

19.60

%

20.21

%

23.25

%

Bryn Mawr Bank Corporation
Tax-Equivalent Net Interest Margin (unaudited)
(dollars in thousands, except per share data)

For the Three Months Ended

March 31, 2019

December 31, 2018

September 30, 2018

June 30, 2018

March 31, 2018

(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

Assets:

Interest-bearing deposits with other banks

$

32,742

$

132

1.64

%

$

38,957

$

83

0.85

%

$

37,467

$

64

0.68

%

$

37,215

$

64

0.69

%

$

38,044

$

53

0.56

%

Investment securities - available for sale:

Taxable

543,687

3,419

2.55

%

524,117

3,129

2.37

%

514,360

2,960

2.28

%

514,966

2,888

2.25

%

498,718

2,675

2.18

%

Tax-exempt

9,795

168

6.96

%

13,184

70

2.11

%

16,056

83

2.05

%

18,215

93

2.05

%

20,501

100

1.98

%

Total investment securities - available for sale

553,482

3,587

2.63

%

537,301

3,199

2.36

%

530,416

3,043

2.28

%

533,181

2,981

2.24

%

519,219

2,775

2.17

%

Investment securities - held to maturity

8,804

11

0.51

%

8,761

9

0.41

%

8,378

5

0.24

%

7,866

13

0.66

%

7,913

12

0.62

%

Investment securities - trading

7,629

22

1.17

%

8,203

96

4.64

%

8,204

30

1.45

%

8,202

22

1.08

%

8,339

21

1.02

%

Loans and leases *

3,477,739

44,845

5.23

%

3,399,484

44,274

5.17

%

3,379,699

42,214

4.96

%

3,353,339

41,782

5.00

%

3,291,212

40,754

5.02

%

Total interest-earning assets

4,080,396

48,597

4.83

%

3,992,706

47,661

4.74

%

3,964,164

45,356

4.54

%

3,939,803

44,862

4.57

%

3,864,727

43,615

4.58

%

Cash and due from banks

14,414

13,962

7,587

7,153

10,698

Less: allowance for loan and lease losses

(19,887

)

(18,625

)

(19,467

)

(18,043

)

(17,628

)

Other assets

470,206

424,957

423,864

415,628

388,383

Total assets

$

4,545,129

$

4,413,000

$

4,376,148

$

4,344,541

$

4,246,180

Liabilities:

Interest-bearing deposits:

Savings, NOW and market rate deposits

$

1,798,103

$

3,764

0.85

%

$

1,704,065

$

2,883

0.67

%

$

1,695,214

$

2,425

0.57

%

$

1,722,328

$

2,073

0.48

%

$

1,676,733

$

1,479

0.36

%

Wholesale deposits

342,696

2,012

2.38

%

346,134

1,986

2.28

%

256,347

1,329

2.06

%

233,714

973

1.67

%

231,289

733

1.29

%

Retail time deposits

533,395

2,321

1.76

%

552,213

2,179

1.57

%

541,652

1,779

1.30

%

533,254

1,453

1.09

%

527,469

1,260

0.97

%

Total interest-bearing deposits

2,674,194

8,097

1.23

%

2,602,412

7,048

1.07

%

2,493,213

5,533

0.88

%

2,489,296

4,499

0.72

%

2,435,491

3,472

0.58

%

Borrowings:

Short-term borrowings

157,652

943

2.43

%

128,429

681

2.10

%

208,201

1,096

2.09

%

205,323

985

1.92

%

172,534

630

1.48

%

Long-term FHLB advances

55,385

278

2.04

%

67,363

331

1.95

%

81,460

394

1.92

%

102,023

490

1.93

%

123,920

562

1.84

%

Subordinated notes

98,542

1,145

4.71

%

98,497

1,145

4.61

%

98,457

1,144

4.61

%

98,463

1,143

4.66

%

98,430

1,143

4.71

%

Jr. subordinated debt

21,595

358

6.72

%

21,553

342

6.30

%

21,511

337

6.22

%

21,470

321

6.00

%

21,430

288

5.45

%

Total borrowings

333,174

2,724

3.32

%

315,842

2,499

3.14

%

409,629

2,971

2.88

%

427,279

2,939

2.76

%

416,314

2,623

2.56

%

Total interest-bearing liabilities

3,007,368

10,821

1.46

%

2,918,254

9,547

1.30

%

2,902,842

8,504

1.16

%

2,916,575

7,438

1.02

%

2,851,805

6,095

0.87

%

Noninterest-bearing deposits

871,726

878,047

866,314

841,676

835,476

Other liabilities

93,949

60,393

59,085

52,389

32,465

Total noninterest-bearing liabilities

965,675

938,440

925,399

894,065

867,941

Total liabilities

3,973,043

3,856,694

3,828,241

3,810,640

3,719,746

Shareholders' equity

572,086

556,306

547,907

533,901

526,434

Total liabilities and shareholders' equity

$

4,545,129

$

4,413,000

$

4,376,148

$

4,344,541

$

4,246,180

Net interest spread

3.37

%

3.44

%

3.38

%

3.55

%

3.71

%

Effect of noninterest-bearing sources

0.38

%

0.35

%

0.31

%

0.26

%

0.23

%

Tax-equivalent net interest margin

$

37,776

3.75

%

$

38,114

3.79

%

$

36,852

3.69

%

$

37,424

3.81

%

$

37,520

3.94

%

Tax-equivalent adjustment

$

129

0.01

%

$

127

0.01

%

$

123

0.01

%

$

108

0.01

%

$

81

0.01

%

* 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.

Supplemental Information Regarding Accretion of Fair Value Marks

For the Three Months Ended

March 31, 2019

December 31, 2018

September 30, 2018

June 30, 2018

March 31, 2018

(dollars in thousands)

Interest

Inc. /
(Dec.)

Effect on
Yield or
Rate

Inc. /
(Dec.)

Effect on
Yield or
Rate

Inc. /
(Dec.)

Effect on
Yield or
Rate

Inc. /
(Dec.)

Effect on
Yield or
Rate

Inc. /
(Dec.)

Effect on
Yield or
Rate

Loans and leases

Income

$

1,997

0.23

%

$

2,492

0.29

%

$

1,464

0.17

%

$

1,945

0.23

%

$

2,702

0.33

%

Retail time deposits

Expense

(222

)

(0.17

)%

(279

)

(0.20

)%

(311

)

(0.23

)%

(339

)

(0.25

)%

(380

)

(0.29

)%

Long-term FHLB advances

Expense

33

0.24

%

34

0.20

%

32

0.16

%

25

0.10

%

15

0.05

%

Jr. subordinated debt

Expense

42

0.79

%

42

0.77

%

41

0.76

%

41

0.77

%

40

0.76

%

Net interest income from fair value marks

$

2,144

$

2,695

$

1,702

$

2,218

$

3,027

Purchase accounting effect on tax-equivalent margin

0.21

%

0.27

%

0.17

%

0.23

%

0.32

%

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

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

March 31,
2018

Reconciliation of Net Income to Net Income (core):

Net income attributable to BMBC (a GAAP measure)

$

10,677

$

17,136

$

16,682

$

14,688

$

15,286

Less: Tax-effected non-core noninterest income:

Gain on sale of investment securities available for sale

(6

)

Add: Tax-effected non-core noninterest expense items:

Due diligence, merger-related and merger integration expenses

307

2,412

3,412

Voluntary years of service incentive program expenses

3,553

Add: Federal income tax expense related to re-measurement of net deferred tax asset due to tax reform legislation

31

151

(69

)

590

Net income (core) (a non-GAAP measure)

$

14,230

$

17,167

$

17,140

$

17,031

$

19,282

Calculation of Basic and Diluted Earnings per Common Share (core):

Weighted average common shares outstanding

20,168,498

20,225,993

20,270,706

20,238,852

20,202,969

Dilutive common shares

103,163

95,290

167,670

174,726

247,525

Weighted average diluted shares

20,271,661

20,321,283

20,438,376

20,413,578

20,450,494

Basic earnings per common share (core) (a non-GAAP measure)

$

0.71

$

0.85

$

0.85

$

0.84

$

0.95

Diluted earnings per common share (core) (a non-GAAP measure)

$

0.70

$

0.84

$

0.84

$

0.83

$

0.94

Calculation of Return on Average Tangible Equity:

Net income attributable to BMBC (a GAAP measure)

$

10,677

$

17,136

$

16,682

$

14,688

$

15,286

Add: Tax-effected amortization and impairment of intangible assets

741

787

705

702

694

Net tangible income (numerator)

$

11,418

$

17,923

$

17,387

$

15,390

$

15,980

Average shareholders' equity

$

572,086

$

556,306

$

547,907

$

533,901

$

526,434

Less: Average Noncontrolling interest

685

681

678

685

683

Less: Average goodwill and intangible assets

(206,716

)

(207,893

)

(207,880

)

(208,039

)

(205,529

)

Net average tangible equity (denominator)

$

366,055

$

349,094

$

340,705

$

326,547

$

321,588

Return on tangible equity (a non-GAAP measure)

12.65

%

20.37

%

20.25

%

18.90

%

20.15

%

Calculation of Return on Average Tangible Equity (core):

Net income (core) (a non-GAAP measure)

$

14,230

$

17,167

$

17,140

$

17,031

$

19,282

Add: Tax-effected amortization and impairment of intangible assets

741

787

705

702

694

Net tangible income (core) (numerator)

$

14,971

$

17,954

$

17,845

$

17,733

$

19,976

Average shareholders' equity

$

572,086

$

556,306

$

547,907

$

533,901

$

526,434

Less: Average Noncontrolling interest

685

681

678

685

683

Less: Average goodwill and intangible assets

(206,716

)

(207,893

)

(207,880

)

(208,039

)

(205,529

)

Net average tangible equity (denominator)

$

366,055

$

349,094

$

340,705

$

326,547

$

321,588

Return on tangible equity (core) (a non-GAAP measure)

16.59

%

20.40

%

20.78

%

21.78

%

25.19

%


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

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

March 31,
2018

Calculation of Tangible Equity Ratio (BMBC):

Total shareholders' equity

$

575,107

$

564,704

$

551,425

$

542,503

$

533,061

Less: Noncontrolling interest

686

685

678

677

684

Less: Goodwill and intangible assets

(206,006

)

(207,467

)

(208,165

)

(208,139

)

(207,287

)

Net tangible equity (numerator)

$

369,787

$

357,922

$

343,938

$

335,041

$

326,458

Total assets

$

4,631,993

$

4,652,485

$

4,388,442

$

4,394,203

$

4,300,376

Less: Goodwill and intangible assets

(206,006

)

(207,467

)

(208,165

)

(208,139

)

(207,287

)

Tangible assets (denominator)

$

4,425,987

$

4,445,018

$

4,180,277

$

4,186,064

$

4,093,089

Tangible equity ratio (BMBC)(1)

8.35

%

8.05

%

8.23

%

8.00

%

7.98

%

Calculation of Tangible Equity Ratio (BMTC):

Total shareholders' equity

$

605,985

$

591,695

$

582,698

$

582,354

$

569,670

Less: Noncontrolling interest

686

685

678

677

684

Less: Goodwill and intangible assets

(193,329

)

(194,715

)

(195,337

)

(195,245

)

(194,316

)

Net tangible equity (numerator)

$

413,342

$

397,665

$

388,039

$

387,786

$

376,038

Total assets

$

4,616,724

$

4,637,481

$

4,372,590

$

4,378,508

$

4,284,334

Less: Goodwill and intangible assets

(193,329

)

(194,715

)

(195,337

)

(195,245

)

(194,316

)

Tangible assets (denominator)

$

4,423,395

$

4,442,766

$

4,177,253

$

4,183,263

$

4,090,018

Tangible equity ratio (BMTC)(1)

9.34

%

8.95

%

9.29

%

9.27

%

9.19

%

Calculation of Return on Average Assets (core)

Return on average assets (GAAP)

0.95

%

1.54

%

1.51

%

1.36

%

1.46

%

Effect of adjustment to GAAP net income to core net income

0.32

%

%

0.04

%

0.21

%

0.38

%

Return on average assets (core)

1.27

%

1.54

%

1.55

%

1.57

%

1.84

%

Calculation of Return on Average Equity (core)

Return on average equity (GAAP)

7.57

%

12.22

%

12.08

%

11.03

%

11.78

%

Effect of adjustment to GAAP net income to core net income

2.52

%

0.02

%

0.33

%

1.76

%

3.07

%

Return on average equity (core)

10.09

%

12.24

%

12.41

%

12.79

%

14.85

%

Calculation of Tax-equivalent net interest margin adjusting for the impact of purchase accounting

Tax-equivalent net interest margin

3.75

%

3.79

%

3.69

%

3.81

%

3.94

%

Effect of fair value marks

0.21

%

0.27

%

0.17

%

0.23

%

0.32

%

Tax-equivalent net interest margin adjusting for the impact of purchase accounting

3.54

%

3.52

%

3.52

%

3.58

%

3.62

%

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

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

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

March 31,
2018

Calculation of Tax-equivalent net interest income adjusting for the impact of purchase accounting

Tax-equivalent net interest income

$

37,776

$

38,114

$

36,852

$

37,424

$

37,520

Effect of fair value marks

2,144

2,695

1,702

2,218

3,027

Tax-equivalent net interest income adjusting for the impact of purchase accounting

$

35,632

$

35,419

$

35,150

$

35,206

$

34,493

Calculation of Efficiency Ratio:

Noninterest expense

$

39,724

$

34,845

$

33,592

$

35,836

$

36,030

Less: certain noninterest expense items*:

Amortization of intangibles

(938

)

(997

)

(891

)

(889

)

(879

)

Due diligence, merger-related and merger integration expenses

(389

)

(3,053

)

(4,319

)

Voluntary years of service incentive program expenses

(4,498

)

Noninterest expense (adjusted) (numerator)

$

34,288

$

33,848

$

32,312

$

31,894

$

30,832

Noninterest income

$

19,253

$

18,097

$

18,274

$

20,075

$

19,536

Less: non-core noninterest income items:

Gain on sale of investment securities available for sale

(7

)

Noninterest income (core)

$

19,253

$

18,097

$

18,274

$

20,075

$

19,529

Net interest income

37,647

37,987

36,729

37,316

37,439

Noninterest income (core) and net interest income (denominator)

$

56,900

$

56,084

$

55,003

$

57,391

$

56,968

Efficiency ratio

60.26

%

60.35

%

58.75

%

55.57

%

54.12

%

Supplemental Loan and Allowance Information Used to Calculate Non-GAAP Measures

Total Allowance

$

20,616

$

19,426

$

18,684

$

19,398

$

17,662

Less: Allowance on acquired loans

97

97

72

217

92

Allowance on originated loans and leases

$

20,519

$

19,329

$

18,612

$

19,181

$

17,570

Total Allowance

$

20,616

$

19,426

$

18,684

$

19,398

$

17,662

Loan mark on acquired loans

15,841

17,822

24,964

26,705

32,260

Total Allowance + Loan mark

$

36,457

$

37,248

$

43,648

$

46,103

$

49,922

Total Portfolio loans and leases

$

3,523,514

$

3,427,154

$

3,381,475

$

3,389,501

$

3,305,795

Less: Originated loans and leases

3,032,270

2,885,251

2,752,160

2,700,815

2,564,827

Net acquired loans

$

491,244

$

541,903

$

629,315

$

688,686

$

740,968

Add: Loan mark on acquired loans

15,841

17,822

24,964

26,705

32,260

Gross acquired loans (excludes loan mark)

$

507,085

$

559,725

$

654,279

$

715,391

$

773,228

Originated loans and leases

3,032,270

2,885,251

2,752,160

2,700,815

2,564,827

Total Gross portfolio loans and leases

$

3,539,355

$

3,444,976

$

3,406,439

$

3,416,206

$

3,338,055

  • 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.