Bryn Mawr Bank Corporation Reports Second Quarter Net Income of $15.8 Million, Increases Dividend by 4% to $0.26 per share

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BRYN MAWR, Pa., July 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 $15.8 million, or $0.78 diluted earnings per share for the three months ended June 30, 2019, as compared to net income of $10.7 million, or $0.53 diluted earnings per share, for the three months ended March 31, 2019, and $14.7 million, or $0.72 diluted earnings per share, for the three months ended June 30, 2018.

On a non-GAAP basis, core net income, which excludes income tax charges incurred in connection with the Tax Cuts and Jobs Act ("Tax Reform"), due diligence and merger-related expenses, one-time costs associated with our voluntary Years of Service Incentive Program (the “Incentive Program”), and other non-core income and expense items, as detailed in the appendix to this earnings release, was $15.8 million, or $0.78 diluted earnings per share, for the three months ended June 30, 2019, as compared to $14.2 million, or $0.70 diluted earnings per share, for the three months ended March 31, 2019, and $17.0 million, or $0.83 diluted earnings per share, for the three months ended June 30, 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 continue to execute on our strategy as reflected in our second quarter results,” commented Frank Leto, President and Chief Executive Officer, continuing, “Despite the challenges of a flat yield curve and an increasingly competitive market for loans and deposits, we continue to produce solid results in both the Bank and Wealth businesses without compromising on the execution of longer term vision as demonstrated by our ongoing investments in talent and technology.”

Mr. Leto then continued, “I am also pleased to announce that the Board of Directors has approved a dividend increase of 4%, making this the ninth consecutive year the Corporation has raised its dividend.”

The Board of Directors of the Corporation declared a quarterly dividend of $0.26 per share, payable September 1, 2019 to shareholders of record as of August 1, 2019.

SIGNIFICANT ITEMS OF NOTE

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

  • Net income for the three months ended June 30, 2019 was $15.8 million, compared to net income of $10.7 million for the three months ended March 31, 2019. Net interest income for the three months ended June 30, 2019 was $36.6 million, a decrease of $1.0 million over the linked quarter. The provision for loan and lease losses (the “Provision”) for the three months ended June 30, 2019 decreased $2.1 million as compared to the first quarter of 2019. Total noninterest income increased $968 thousand, total noninterest expense decreased $4.5 million, and income tax expense increased $1.5 million for the three months ended June 30, 2019, as compared to the three months ended March 31, 2019.

    On a non-GAAP basis, core net income, which excludes income tax charges incurred in connection with Tax Reform, due diligence and merger-related expenses, one-time costs associated with the Incentive Program, and other non-core income and expense items, as detailed in the appendix to this earnings release, was $15.8 million, or $0.78 per diluted share, for the three months ended June 30, 2019, as compared to $14.2 million or $0.70 per diluted share, for the three months ended March 31, 2019. 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 June 30, 2019 was $36.6 million, a decrease of $1.0 million over the linked quarter. Tax-equivalent net interest income for the three months ended June 30, 2019 was $36.7 million, a decrease of $1.0 million over the linked quarter. Tax-equivalent net interest income for the second quarter of 2019 was impacted by the accretion of purchase accounting fair value marks of $1.3 million as compared to $2.1 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 June 30, 2019 was $35.4 million, a decrease of $182 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 decrease in tax-equivalent net interest income adjusted for purchase accounting included an increase of $1.5 million in interest paid on deposits, partially offset by an increase of $749 thousand in tax-equivalent interest and fees earned on loans and leases and a decrease of $586 thousand of interest expense on short-term borrowings for the three months ended June 30, 2019 as compared to the linked quarter ended March 31, 2019.

    Interest expense on deposits for the three months ended June 30, 2019 increased $1.6 million over the linked quarter. The increase was primarily due to a 16 basis point increase in the rate paid on deposits as compared to the linked quarter. The increase in rate paid was related to the competitive dynamics in the markets in which we operate and certain promotional interest rates offered during the first and second quarters of 2019. A $120.7 million increase in average interest-bearing deposits also contributed to the increase in interest expense on deposits.

    Tax-equivalent interest and fees earned on loans and leases for the three months ended June 30, 2019 was relatively unchanged as compared to the linked quarter, decreasing $55 thousand. Average loans and leases for the three months ended June 30, 2019 increased $46.5 million over the linked quarter and experienced a 13 basis point decrease in tax-equivalent yield.

    Tax-equivalent interest income on available for sale investment securities for the three months ended June 30, 2019 was relatively unchanged as compared to the linked quarter, increasing $25 thousand. Average available for sale investment securities increased by $15.0 million over the linked quarter and experienced a 7 basis point tax-equivalent yield decrease.

    Interest expense on short-term borrowings for the three months ended June 30, 2019 decreased $586 thousand over the linked quarter. Average short-term borrowings decreased $89.1 million coupled with a 34 basis point decrease in the rate paid as compared to the linked quarter.

  • The tax-equivalent net interest margin was 3.55% for the three months ended June 30, 2019 as compared to 3.75% 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 3.43% for the three months ended June 30, 2019 as compared to 3.54% for the linked quarter. The main drivers for the decrease in the adjusted tax-equivalent net interest margin were the rate and volume increases of interest-bearing deposits as discussed above. A reconciliation of this and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release.

  • Noninterest income of $20.2 million for the three months ended June 30, 2019 increased $968 thousand as compared to the linked quarter. Contributing to the increase were increases of $1.1 million, $433 thousand, and $205 thousand in fees for wealth management services, net gain on sale of loans, and other operating income, respectively, partially offset by a decrease of $730 thousand in capital markets revenue.

  • Noninterest expense of $35.2 million for the three months ended June 30, 2019 decreased $4.5 million as compared to $39.7 million for the first quarter of 2019. The decrease on a linked quarter basis was primarily due to decreases of $3.9 million and $849 thousand in salaries and wages and employee benefits, respectively, largely driven by the $4.5 million one-time expense from the Incentive Program recorded in the first quarter of 2019.

  • The Provision decreased $2.1 million for the three months ended June 30, 2019 to $1.6 million, as compared to $3.7 million for the first quarter of 2019. During the second quarter of 2019, net loan and lease charge-offs of $1.1 million represented a $1.5 million, or 58.3%, decrease from the first quarter of 2019. Contributing to net charge-offs for the second quarter of 2019 was $554 thousand in charge-offs recorded in conjunction with the sale of a group of nonperforming loans. The decrease in net charge-offs on a linked quarter basis was primarily related to the partial charge-off of a single commercial credit recorded in the first quarter of 2019. The effect of the decrease in net charge-offs on a linked quarter basis was partially offset by increases in certain qualitative factors used in the allowance for loan and lease losses (the "Allowance") calculation.

  • The effective tax rate for the second quarter of 2019 increased to 21.18% as compared to 20.57% for the first quarter of 2019. The increase was primarily related to a $97 thousand decrease in net discrete tax benefits for the second quarter of 2019 as compared to the first quarter of 2019. These discrete items were the result of excess tax benefits from stock-based compensation.

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

  • Net income for the three months ended June 30, 2019 was $15.8 million, or $0.78 diluted earnings per share, as compared to net income of $14.7 million, or diluted earnings per share of $0.72 for the same period in 2018. Net interest income for the three months ended June 30, 2019 was $36.6 million, a decrease of $705 thousand as compared to the same period in 2018. The Provision for the three months ended June 30, 2019 decreased $1.5 million as compared to the same period in 2018. Total noninterest income increased $146 thousand, total noninterest expense decreased $648 thousand, and income tax expense increased $516 thousand for the three months ended June 30, 2019 as compared to the same period in 2018.

    On a non-GAAP basis, core net income, which excludes income tax charges incurred in connection with Tax Reform, due diligence and merger-related expenses, one-time costs associated with the Incentive Program, and other non-core income and expense items, as detailed in the appendix to this earnings release, was $15.8 million, or $0.78 per diluted share, for the three months ended June 30, 2019 as compared to $17.0 million, or $0.83 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 June 30, 2019 was $36.6 million, a decrease of $705 thousand as compared to the same period in 2018. Tax-equivalent net interest income for the three months ended June 30, 2019 was $36.7 million, a decrease of $687 thousand as compared to the same period in 2018. Tax-equivalent net interest income for the second quarter of 2019 was impacted by the accretion of purchase accounting fair value marks of $1.3 million as compared to $2.2 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 June 30, 2019 was $35.4 million, an increase of $244 thousand 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 $3.9 million and $507 thousand in tax-equivalent interest and fees earned on loans and leases and tax-equivalent interest earned on available for sale investment securities, respectively, as well as decreases of $628 thousand and $230 thousand in interest paid on short-term borrowings and long-term FHLB advances, respectively. These increases to tax-equivalent net interest income were partially offset by a $5.0 million increase in interest paid on deposits for the three months ended June 30, 2019 as compared to the same period in 2018.

    Tax-equivalent interest and fees earned on loans and leases increased $3.1 million for the three months ended June 30, 2019 as compared to the same period in 2018. Average loans and leases for the second quarter of 2019 increased $170.9 million from the same period in 2018 and experienced an 11 basis point increase in tax-equivalent yield.

    Tax-equivalent interest income on available for sale investment securities increased $507 thousand for the three months ended June 30, 2019 as compared to the same period in 2018. Average available for sale investment securities increased by $35.3 million as compared to the same period in 2018 and experienced a 22 basis point tax-equivalent yield increase.

    Interest expense on short-term borrowings and long-term FHLB advances for the three months ended June 30, 2019 decreased $628 thousand and $221 thousand, respectively as compared to the same period in 2018. Average short-term borrowings and average long-term FHLB advances decreased $136.8 million and $49.6 million, respectively, offset by a 17 and 13 basis point increase in the rate paid on short-term borrowings and long-term FHLB advances, respectively, as compared to the same period in 2018.

    Interest expense on deposits for the three months ended June 30, 2019 increased $5.2 million as compared to the same period in 2018. The increase was primarily due to a 67 basis point increase in the rate paid on deposits as compared to the same period in 2018. The increase in rate paid was related to the competitive dynamics in the markets in which we operate and certain promotional interest rates offered during the first and second quarters of 2019. A $305.6 million increase in average interest-bearing deposits also contributed to the increase in interest expense on deposits.

  • The tax-equivalent net interest margin was 3.55% for the three months ended June 30, 2019 as compared to 3.81% 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 3.43% and 3.58% for three months ended June 30, 2019 and 2018, respectively. The main drivers for the decrease in the adjusted tax-equivalent net interest margin were the rate and volume increases of interest-bearing deposits as discussed above. A reconciliation of this and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release.

  • Noninterest income of $20.2 million for the three months ended June 30, 2019 increased by $146 thousand as compared to the same period in 2018. Increases of $852 thousand and $224 thousand in fees for wealth management services and net gain on sale of loans, respectively, were partially offset by decreases of $616 thousand and $205 thousand of capital markets revenue and insurance commissions, respectively.

  • Noninterest expense of $35.2 million for the three months ended June 30, 2019 decreased $648 thousand as compared to the same period in 2018. Contributing to the decrease were decreases of $3.1 million and $448 thousand in due diligence, merger-related and merger integration expenses and other operating expenses, respectively. Partially offsetting these decreases were increases of $798 thousand, $499 thousand, $440 thousand, and $428 thousand in salaries and wages, furniture, fixtures and equipment expenses, employee benefits, and occupancy and bank premises expense, respectively.

  • The Provision decreased $1.5 million for the three months ended June 30, 2019 to $1.6 million, as compared to $3.1 million for the same period in 2018. The decrease in Provision was related to the smaller volume of loan and lease growth during the second quarter of 2019 as compared to the same period in 2018. Net loan and lease growth during the second quarter of 2019 totaled $11.2 million, as compared to $83.7 million for the same period in 2018. Net charge-offs of loans and leases decreased by $340 thousand for the second quarter of 2019 as compared to the same period in 2018.

  • The effective tax rate for the second quarter of 2019 increased to 21.18% as compared to 20.21% for the second quarter of 2018. The increase was primarily related to a $94 thousand decrease in net discrete tax benefits for the second quarter of 2019 as compared to the same period in 2018. These discrete items were the result of excess tax benefits from stock-based compensation as well as the re-measurement of deferred tax items related to Tax Reform.

Financial Condition – June 30, 2019 Compared to December 31, 2018

  • Total assets as of June 30, 2019 were $4.74 billion, an increase of $84.1 million from December 31, 2018. The increase was primarily due to a $107.5 million increase in portfolio loans and leases, a $61.3 million increase in other assets, and $43.1 million of operating lease right-of-use assets as of June 30, 2019 included on the balance sheet as a result of a recently adopted accounting pronouncement. The $61.3 million increase in other assets was primarily due to a $31.7 million increase in the fair value of interest rate swaps. Partially offsetting these increases was a decrease in available for sale investment securities of $149.3 million.

  • Available for sale investment securities as of June 30, 2019 totaled $588.1 million, a decrease of $149.3 million from December 31, 2018. The decrease was primarily related to the maturing of $200.0 million short-term U.S. Treasury securities in the first quarter of 2019, partially offset by a $59.1 million increase in mortgage-backed securities.

  • Total portfolio loans and leases of $3.53 billion as of June 30, 2019 increased by $107.5 million from December 31, 2018, an increase of 3.1%. Increases of $98.4 million, $18.3 million, $11.7 million, $8.6 million and $2.5 million in commercial mortgages, leases, residential mortgages, commercial and industrial loans and consumer loans, respectively, were offset by decreases of $28.5 million and $3.5 million in construction loans and home equity loans and lines, respectively.

  • The Allowance as of June 30, 2019 was $21.2 million, or 0.60% 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 June 30, 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 1.00% as of June 30, 2019, as compared to 1.08% as of December 31, 2018. A reconciliation of these and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release.

  • Deposits of $3.63 billion as of June 30, 2019 increased $33.3 million from December 31, 2018. Increases of $104.0 million, $80.4 million, $45.0 million, $39.3 million, and $16.7 million in money market accounts, interest-bearing demand accounts, wholesale non-maturity deposits, noninterest bearing deposits, and savings accounts, respectively, were offset by decreases of $212.1 million and $40.0 million in in wholesale time deposits and retail time deposits, respectively.

  • Borrowings of $376.1 million as of June 30, 2019, which include short-term borrowings, long-term FHLB advances, subordinated notes and junior subordinated debentures, decreased $51.8 million from December 31, 2018, primarily due to a $44.5 million decrease in short-term borrowings.

  • Wealth assets under management, administration, supervision and brokerage totaled $14.82 billion as of June 30, 2019, an increase of $1.39 billion from December 31, 2018.

  • The capital ratios for the Bank and the Corporation, as of June 30, 2019, as shown in the attached tables, indicate regulatory capital levels in excess of the regulatory minimums and the levels necessary for the Bank 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 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; unanticipated regulatory or legal proceedings, outcomes of litigation or other contingencies; 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

For the Six Months Ended

June 30,
2019

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

June 30,
2019

June 30,
2018

Consolidated Balance Sheet (selected items)

Interest-bearing deposits with banks

$

49,643

$

29,449

$

34,357

$

35,233

$

39,924

Investment securities

606,844

578,629

753,628

545,320

547,088

Loans held for sale

6,333

2,884

1,749

4,111

4,204

Portfolio loans and leases

3,534,665

3,523,514

3,427,154

3,381,475

3,389,501

Allowance for loan and lease losses ("ALLL")

(21,182

)

(20,616

)

(19,426

)

(18,684

)

(19,398

)

Goodwill and other intangible assets

205,050

206,006

207,467

208,165

208,139

Total assets

4,736,565

4,631,993

4,652,485

4,388,442

4,394,203

Deposits - interest-bearing

2,691,502

2,755,307

2,697,468

2,522,863

2,466,529

Deposits - non-interest-bearing

940,911

882,310

901,619

834,363

892,386

Short-term borrowings

207,828

124,214

252,367

226,498

227,059

Long-term FHLB advances

47,941

55,407

55,374

72,841

87,808

Subordinated notes

98,616

98,571

98,526

98,482

98,491

Jr. subordinated debentures

21,665

21,622

21,580

21,538

21,497

Total liabilities

4,146,410

4,056,886

4,087,781

3,837,017

3,851,700

Total shareholders' equity

590,155

575,107

564,704

551,425

542,503

Average Balance Sheet (selected items)

Interest-bearing deposits with banks

37,843

32,742

38,957

37,467

37,215

35,306

37,627

Investment securities

587,518

569,915

554,265

546,998

549,249

578,765

542,398

Loans held for sale

3,353

1,214

2,005

4,932

4,413

2,289

3,635

Portfolio loans and leases

3,520,866

3,476,525

3,397,479

3,374,767

3,348,926

3,498,818

3,318,812

Total interest-earning assets

4,149,580

4,080,396

3,992,706

3,964,164

3,939,803

4,115,178

3,902,472

Goodwill and intangible assets

205,593

206,716

207,893

207,880

208,039

206,152

206,790

Total assets

4,651,625

4,545,129

4,413,000

4,376,148

4,344,541

4,598,672

4,295,637

Deposits - interest-bearing

2,794,854

2,674,194

2,602,412

2,493,213

2,489,296

2,734,857

2,464,618

Short-term borrowings

68,529

157,652

128,429

208,201

205,323

112,844

189,019

Long-term FHLB advances

52,397

55,385

67,363

81,460

102,023

53,883

112,911

Subordinated notes

98,587

98,542

98,497

98,457

98,463

98,564

98,447

Jr. subordinated debentures

21,637

21,595

21,553

21,511

21,470

21,616

21,450

Total interest-bearing liabilities

3,036,004

3,007,368

2,918,254

2,902,842

2,916,575

3,021,764

2,886,445

Total liabilities

4,070,160

3,973,043

3,856,694

3,828,241

3,810,640

4,021,870

3,769,498

Total shareholders' equity

581,465

572,086

556,306

547,907

533,901

576,802

526,139

As of or For the Three Months Ended

For the Six Months Ended

June 30,
2019

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

June 30,
2019

June 30,
2018

Income Statement

Net interest income

$

36,611

$

37,647

$

37,987

$

36,729

$

37,316

$

74,258

$

74,755

Provision for loan and lease losses

1,627

3,736

2,362

664

3,137

5,363

4,167

Noninterest income

20,221

19,253

18,097

18,274

20,075

39,474

39,611

Noninterest expense

35,188

39,724

34,845

33,592

35,836

74,912

71,866

Income tax expense

4,239

2,764

1,746

4,066

3,723

7,003

8,353

Net income

15,778

10,676

17,131

16,681

14,695

26,454

29,980

Net (loss) income attributable to noncontrolling interest

(7

)

(1

)

(5

)

(1

)

7

(8

)

6

Net income attributable to Bryn Mawr Bank Corporation

15,785

10,677

17,136

16,682

14,688

26,462

29,974

Basic earnings per share

0.78

0.53

0.85

0.82

0.73

1.31

1.48

Diluted earnings per share

0.78

0.53

0.84

0.82

0.72

1.31

1.47

Net income (core) (1)

15,785

14,230

17,167

17,140

17,031

30,015

36,313

Basic earnings per share (core) (1)

0.78

0.71

0.85

0.85

0.84

1.49

1.80

Diluted earnings per share (core) (1)

0.78

0.70

0.84

0.84

0.83

1.48

1.78

Dividends paid or accrued per share

0.26

0.25

0.25

0.25

0.22

0.51

0.44

Profitability Indicators

Return on average assets

1.36

%

0.95

%

1.54

%

1.51

%

1.36

%

1.16

%

1.41

%

Return on average equity

10.89

%

7.57

%

12.22

%

12.08

%

11.03

%

9.25

%

11.49

%

Return on tangible equity(1)

17.62

%

12.65

%

20.37

%

20.25

%

18.90

%

15.18

%

19.77

%

Return on tangible equity (core)(1)

17.62

%

16.59

%

20.40

%

20.78

%

21.78

%

17.11

%

23.76

%

Return on average assets (core)(1)

1.36

%

1.27

%

1.54

%

1.55

%

1.57

%

1.32

%

1.70

%

Return on average equity (core)(1)

10.89

%

10.09

%

12.24

%

12.41

%

12.79

%

10.49

%

13.92

%

Tax-equivalent net interest margin

3.55

%

3.75

%

3.79

%

3.69

%

3.81

%

3.65

%

3.87

%

Efficiency ratio(1)

60.23

%

60.26

%

60.35

%

58.75

%

55.57

%

60.25

%

54.85

%

Share Data

Closing share price

$

37.32

$

36.13

$

34.40

$

46.90

$

46.30

Book value per common share

$

29.31

$

28.52

$

28.01

$

27.18

$

26.80

Tangible book value per common share

$

19.16

$

18.34

$

17.75

$

16.95

$

16.55

Price / book value

127.33

%

126.68

%

122.81

%

172.55

%

172.76

%

Price / tangible book value

194.78

%

197.00

%

193.80

%

276.70

%

279.74

%

Weighted average diluted shares outstanding

20,244,409

20,271,661

20,321,283

20,438,376

20,413,578

20,256,469

20,427,792

Shares outstanding, end of period

20,131,854

20,167,729

20,163,816

20,291,416

20,242,893

Wealth Management Information:

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

$

14,815,298

$

14,736,512

$

13,429,544

$

13,913,265

$

13,404,723

Fees for wealth management services

$

11,510

$

10,392

$

11,017

$

10,343

$

10,658

As of or For the Three Months Ended

For the Six Months Ended

June 30,
2019

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

June 30,
2019

June 30,
2018

Capital Ratios(3)

Bryn Mawr Trust Company ("BMTC")

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

11.71

%

11.30

%

11.42

%

11.55

%

11.34

%

Total capital to RWA

12.29

%

11.87

%

11.99

%

12.10

%

11.91

%

Tier I leverage ratio

9.61

%

9.48

%

9.48

%

9.47

%

9.49

%

Tangible equity ratio (1)

9.58

%

9.34

%

8.95

%

9.29

%

9.27

%

Common equity Tier I capital to RWA

11.71

%

11.30

%

11.42

%

11.55

%

11.34

%

Bryn Mawr Bank Corporation ("BMBC")

Tier I capital to RWA

11.01

%

10.72

%

10.92

%

10.90

%

10.46

%

Total capital to RWA

14.30

%

14.00

%

14.30

%

14.33

%

13.87

%

Tier I leverage ratio

9.04

%

8.99

%

9.06

%

8.94

%

8.75

%

Tangible equity ratio (1)

8.51

%

8.35

%

8.05

%

8.23

%

8.00

%

Common equity Tier I capital to RWA

10.43

%

10.14

%

10.32

%

10.29

%

9.86

%

Asset Quality Indicators

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

$

1,061

$

2,546

$

1,620

$

1,378

$

1,401

$

3,607

$

3,578

Nonperforming loans and leases ("NPL"s)

$

12,179

$

19,283

$

12,820

$

8,990

$

9,448

Other real estate owned ("OREO")

155

84

417

529

531

Total nonperforming assets ("NPA"s)

$

12,334

$

19,367

$

13,237

$

9,519

$

9,979

Nonperforming loans and leases 30 or more days past due

$

8,224

$

8,489

$

7,765

$

4,906

$

6,749

Performing loans and leases 30 to 89 days past due

9,466

6,432

5,464

9,145

10,378

Performing loans and leases 90 or more days past due

Total delinquent loans and leases

$

17,690

$

14,921

$

13,229

$

14,051

$

17,127

Delinquent loans and leases to total loans and leases

0.50

%

0.42

%

0.39

%

0.42

%

0.50

%

Delinquent performing loans and leases to total loans and leases

0.27

%

0.18

%

0.16

%

0.27

%

0.31

%

NCOs / average loans and leases (annualized)

0.12

%

0.30

%

0.19

%

0.16

%

0.17

%

0.21

%

0.22

%

NPLs / total portfolio loans and leases

0.34

%

0.55

%

0.37

%

0.27

%

0.28

%

NPAs / total loans and leases and OREO

0.35

%

0.55

%

0.39

%

0.28

%

0.29

%

NPAs / total assets

0.26

%

0.42

%

0.28

%

0.22

%

0.23

%

ALLL / NPLs

173.92

%

106.91

%

151.53

%

207.83

%

205.31

%

ALLL / portfolio loans

0.60

%

0.59

%

0.57

%

0.55

%

0.57

%

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

0.68

%

0.68

%

0.67

%

0.68

%

0.71

%

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

1.00

%

1.03

%

1.08

%

1.28

%

1.35

%

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

$

4,190

$

4,057

$

1,217

$

1,208

$

1,044

TDRs in compliance with modified terms

5,141

5,149

9,745

4,316

4,117

Total TDRs

$

9,331

$

9,206

$

10,962

$

5,524

$

5,161

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

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

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

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

June 30,
2019

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

Assets

Cash and due from banks

$

13,742

$

13,656

$

14,099

$

10,121

$

7,318

Interest-bearing deposits with banks

49,643

29,449

34,357

35,233

39,924

Cash and cash equivalents

63,385

43,105

48,456

45,354

47,242

Investment securities, available for sale

588,119

559,983

737,442

528,064

531,075

Investment securities, held to maturity

10,209

10,457

8,684

8,916

7,838

Investment securities, trading

8,516

8,189

7,502

8,340

8,175

Loans held for sale

6,333

2,884

1,749

4,111

4,204

Portfolio loans and leases, originated

3,088,849

3,032,270

2,885,251

2,752,160

2,700,815

Portfolio loans and leases, acquired

445,816

491,244

541,903

629,315

688,686

Total portfolio loans and leases

3,534,665

3,523,514

3,427,154

3,381,475

3,389,501

Less: Allowance for losses on originated loan and leases

(21,076

)

(20,519

)

(19,329

)

(18,612

)

(19,181

)

Less: Allowance for losses on acquired loan and leases

(106

)

(97

)

(97

)

(72

)

(217

)

Total allowance for loan and lease losses

(21,182

)

(20,616

)

(19,426

)

(18,684

)

(19,398

)

Net portfolio loans and leases

3,513,483

3,502,898

3,407,728

3,362,791

3,370,103

Premises and equipment

68,092

67,279

65,648

63,281

54,185

Operating lease right-of-use assets

43,116

43,985

Accrued interest receivable

13,312

13,123

12,585

13,232

13,115

Mortgage servicing rights

4,744

4,910

5,047

5,328

5,511

Bank owned life insurance

58,437

58,138

57,844

57,543

57,243

Federal Home Loan Bank ("FHLB") stock

14,677

10,526

14,530

14,678

16,678

Goodwill

184,012

184,012

184,012

183,864

183,162

Intangible assets

21,038

21,994

23,455

24,301

24,977

Other investments

16,517

16,526

16,526

16,529

16,774

Other assets

122,575

83,984

61,277

52,110

53,921

Total assets

$

4,736,565

$

4,631,993

$

4,652,485

$

4,388,442

$

4,394,203

Liabilities

Deposits

Noninterest-bearing

$

940,911

$

882,310

$

901,619

$

834,363

$

892,386

Interest-bearing

2,691,502

2,755,307

2,697,468

2,522,863

2,466,529

Total deposits

3,632,413

3,637,617

3,599,087

3,357,226

3,358,915

Short-term borrowings

207,828

124,214

252,367

226,498

227,059

Long-term FHLB advances

47,941

55,407

55,374

72,841

87,808

Subordinated notes

98,616

98,571

98,526

98,482

98,491

Jr. subordinated debentures

21,665

21,622

21,580

21,538

21,497

Operating lease liabilities

47,393

48,224

Accrued interest payable

8,244

8,674

6,652

7,193

5,230

Other liabilities

82,310

62,557

54,195

53,239

52,700

Total liabilities

4,146,410

4,056,886

4,087,781

3,837,017

3,851,700

Shareholders' equity

Common stock

24,583

24,577

24,545

24,533

24,453

Paid-in capital in excess of par value

376,652

375,655

374,010

373,205

372,227

Less: common stock held in treasury, at cost

(78,583

)

(76,974

)

(75,883

)

(70,437

)

(68,943

)

Accumulated other comprehensive income (loss), net of tax

1,700

(3,278

)

(7,513

)

(13,402

)

(11,191

)

Retained earnings

266,496

255,813

250,230

238,204

226,634

Total Bryn Mawr Bank Corporation shareholders' equity

590,848

575,793

565,389

552,103

543,180

Noncontrolling interest

(693

)

(686

)

(685

)

(678

)

(677

)

Total shareholders' equity

590,155

575,107

564,704

551,425

542,503

Total liabilities and shareholders' equity

$

4,736,565

$

4,631,993

$

4,652,485

$

4,388,442

$

4,394,203

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

Portfolio Loans and Leases as of

June 30,
2019

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

Commercial mortgages

$

1,755,798

$

1,746,695

$

1,657,436

$

1,618,493

$

1,613,721

Home equity loans and lines

203,852

204,791

207,351

207,806

206,429

Residential mortgages

506,093

502,379

494,355

467,402

449,060

Construction

152,554

159,761

181,078

178,493

190,874

Total real estate loans

2,618,297

2,613,626

2,540,220

2,472,194

2,460,084

Commercial & Industrial

704,167

705,701

695,584

722,999

745,306

Consumer

49,335

47,821

46,814

47,809

51,462

Leases

162,866

156,366

144,536

138,473

132,649

Total non-real estate loans and leases

916,368

909,888

886,934

909,281

929,417

Total portfolio loans and leases

$

3,534,665

$

3,523,514

$

3,427,154

$

3,381,475

$

3,389,501

Nonperforming Loans and Leases as of

June 30,
2019

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

Commercial mortgages

$

6,072

$

5,558

$

2,568

$

735

$

1,011

Home equity loans and lines

49

6,904

3,616

1,933

2,323

Residential mortgages

701

2,863

3,452

2,770

2,647

Construction

291

Total nonperforming real estate loans

6,822

15,325

9,636

5,729

5,980

Commercial & Industrial

4,495

2,965

2,101

1,782

1,585

Consumer

60

80

108

117

Leases

802

913

975

1,362

1,882

Total nonperforming non-real estate loans and leases

5,357

3,958

3,184

3,261

3,468

Total nonperforming portfolio loans and leases

$

12,179

$

19,283

$

12,820

$

8,990

$

9,448

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

June 30,
2019

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

Commercial mortgage

$

(3

)

$

1,373

$

249

$

56

$

13

Home equity loans and lines

180

46

107

199

Residential

339

329

304

(12

)

(1

)

Construction

(1

)

(1

)

(1

)

Total net charge-offs of real estate loans

515

1,747

660

44

210

Commercial & Industrial

(18

)

391

298

304

467

Consumer

119

94

147

71

41

Leases

445

314

515

959

683

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

546

799

960

1,334

1,191

Total net charge-offs

$

1,061

$

2,546

$

1,620

$

1,378

$

1,401

Investment Securities Available for Sale, at Fair Value

June 30,
2019

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

U.S. Treasury securities

$

101

$

100

$

200,013

$

100

$

100

Obligations of the U.S. Government and agencies

192,799

186,746

195,855

190,453

183,256

State & political subdivisions - tax-free

6,700

8,468

11,162

15,629

17,254

State & political subdivisions - taxable

170

170

170

170

171

Mortgage-backed securities

348,975

322,913

289,890

284,421

292,563

Collateralized mortgage obligations

38,724

40,486

39,252

36,193

36,634

Other debt securities

650

1,100

1,100

1,098

1,097

Total investment securities available for sale, at fair value

$

588,119

$

559,983

$

737,442

$

528,064

$

531,075

Unrealized Gain (Loss) on Investment Securities Available for Sale

June 30,
2019

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

U.S. Treasury securities

$

1

$

$

(13

)

$

$

Obligations of the U.S. Government and agencies

275

(1,334

)

(2,749

)

(5,881

)

(4,594

)

State & political subdivisions - tax-free

8

(5

)

(39

)

(90

)

(57

)

State & political subdivisions - taxable

(1

)

(1

)

(1

)

Mortgage-backed securities

3,364

(696

)

(4,186

)

(7,584

)

(6,141

)

Collateralized mortgage obligations

89

(510

)

(898

)

(1,618

)

(1,443

)

Other debt securities

(2

)

(3

)

Total unrealized gains (losses) on investment securities available for sale

$

3,737

$

(2,545

)

$

(7,886

)

$

(15,176

)

$

(12,239

)

Deposits

June 30,
2019

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

Interest-bearing deposits:

Interest-bearing demand

$

745,134

$

664,683

$

664,749

$

578,243

$

617,258

Money market

966,596

961,348

862,644

812,027

814,530

Savings

263,830

265,613

247,081

286,266

291,858

Retail time deposits

502,745

531,522

542,702

561,123

536,287

Wholesale non-maturity deposits

100,047

47,744

55,031

24,040

36,826

Wholesale time deposits

113,150

284,397

325,261

261,164

169,770

Total interest-bearing deposits

2,691,502

2,755,307

2,697,468

2,522,863

2,466,529

Noninterest-bearing deposits

940,911

882,310

901,619

834,363

892,386

Total deposits

$

3,632,413

$

3,637,617

$

3,599,087

$

3,357,226

$

3,358,915


Bryn Mawr Bank Corporation

Detailed Income Statements (unaudited)
(dollars in thousands, except per share data)

For the Three Months Ended

For the Six Months Ended

June 30,
2019

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

June 30,
2019

June 30,
2018

Interest income:

Interest and fees on loans and leases

$

44,783

$

44,837

$

44,157

$

42,103

$

41,689

$

89,620

$

82,378

Interest on cash and cash equivalents

73

132

83

64

64

205

117

Interest on investment securities

3,532

3,499

3,294

3,066

3,001

7,031

5,793

Total interest income

48,388

48,468

47,534

45,233

44,754

96,856

88,288

Interest expense:

Interest on deposits

9,655

8,097

7,048

5,533

4,499

17,752

7,971

Interest on short-term borrowings

357

943

681

1,096

985

1,300

1,615

Interest on FHLB advances

269

278

331

394

490

547

1,052

Interest on jr. subordinated debentures

352

358

342

337

321

710

609

Interest on subordinated notes

1,144

1,145

1,145

1,144

1,143

2,289

2,286

Total interest expense

11,777

10,821

9,547

8,504

7,438

22,598

13,533

Net interest income

36,611

37,647

37,987

36,729

37,316

74,258

74,755

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

1,627

3,736

2,362

664

3,137

5,363

4,167

Net interest income after Provision

34,984

33,911

35,625

36,065

34,179

68,895

70,588

Noninterest income:

Fees for wealth management services

11,510

10,392

11,017

10,343

10,658

21,902

20,966

Insurance commissions

1,697

1,672

1,459

1,754

1,902

3,369

3,595

Capital markets revenue

1,489

2,219

1,367

710

2,105

3,708

2,771

Service charges on deposits

852

808

798

726

752

1,660

1,465

Loan servicing and other fees

553

609

539

559

475

1,162

1,161

Net gain on sale of loans

752

319

1,606

631

528

1,071

1,046

Net gain on sale of investment securities available for sale

7

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

(24

)

3

5

111

(24

)

287

Dividends on FHLB and FRB stocks

316

411

305

375

510

727

941

Other operating income

3,052

2,847

1,003

3,171

3,034

5,899

7,372

Total noninterest income

20,221

19,253

18,097

18,274

20,075

39,474

39,611

Noninterest expense:

Salaries and wages

17,038

20,901

17,921

16,528

16,240

37,939

32,222

Employee benefits

3,317

4,166

2,977

3,356

2,877

7,483

6,585

Occupancy and bank premises

3,125

3,252

3,135

2,717

2,697

6,377

5,747

Furniture, fixtures and equipment

2,568

2,389

2,370

2,070

2,069

4,957

3,967

Advertising

504

415

540

349

369

919

830

Amortization of intangible assets

956

938

997

891

889

1,894

1,768

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

10

17

101

(23

)

(1

)

27

(51

)

Due diligence, merger-related and merger integration expenses

389

3,053

7,372

Professional fees

1,316

1,320

1,526

997

932

2,636

1,680

Pennsylvania bank shares tax

513

409

374

472

473

922

946

Data processing

1,303

1,320

1,340

1,155

1,252

2,623

2,447

Other operating expenses

4,538

4,597

3,564

4,691

4,986

9,135

8,353

Total noninterest expense

35,188

39,724

34,845

33,592

35,836

74,912

71,866

Income before income taxes

20,017

13,440

18,877

20,747

18,418

33,457

38,333

Income tax expense

4,239

2,764

1,746

4,066

3,723

7,003

8,353

Net income

$

15,778

$

10,676

$

17,131

$

16,681

$

14,695

$

26,454

$

29,980

Net (loss) income attributable to noncontrolling interest

(7

)

(1

)

(5

)

(1

)

7

(8

)

6

Net income attributable to Bryn Mawr Bank Corporation

$

15,785

$

10,677

$

17,136

$

16,682

$

14,688

$

26,462

$

29,974

Per share data:

Weighted average shares outstanding

20,144,651

20,168,498

20,225,993

20,270,706

20,238,852

20,156,509

20,221,010

Dilutive common shares

99,758

103,163

95,290

167,670

174,726

99,960

206,782

Weighted average diluted shares

20,244,409

20,271,661

20,321,283

20,438,376

20,413,578

20,256,469

20,427,792

Basic earnings per common share

$

0.78

$

0.53

$

0.85

$

0.82

$

0.73

$

1.31

$

1.48

Diluted earnings per common share

$

0.78

$

0.53

$

0.84

$

0.82

$

0.72

$

1.31

$

1.47

Dividends paid or accrued per share

$

0.26

$

0.25

$

0.25

$

0.25

$

0.22

$

0.51

$

0.44

Effective tax rate

21.18

%

20.57

%

9.25

%

19.60

%

20.21

%

20.93

%

21.79

%

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

For the Three Months Ended

For the Six Months Ended

June 30, 2019

March 31, 2019

December 31, 2018

September 30, 2018

June 30, 2018

June 30, 2019

June 30, 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

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

$

37,843

$

73

0.77

%

$

32,742

$

132

1.64

%

$

38,957

$

83

0.85

%

$

37,467

$

64

0.68

%

$

37,215

$

64

0.69

%

$

35,306

$

205

1.17

%

$

37,627

$

117

0.63

%

Investment securities - available for sale:

Taxable

560,999

3,400

2.43

%

543,687

3,363

2.51

%

524,117

3,075

2.33

%

514,360

2,910

2.24

%

514,966

2,843

2.21

%

552,391

6,763

2.47

%

506,887

5,472

2.18

%

Tax-exempt

7,530

43

2.29

%

9,795

55

2.28

%

13,184

70

2.11

%

16,056

83

2.05

%

18,215

93

2.05

%

8,656

98

2.28

%

19,352

193

2.01

%

Total investment securities - available for sale

568,529

3,443

2.43

%

553,482

3,418

2.50

%

537,301

3,145

2.32

%

530,416

2,993

2.24

%

533,181

2,936

2.21

%

561,047

6,861

2.47

%

526,239

5,665

2.17

%

Investment securities - held to maturity

10,417

71

2.73

%

8,804

67

3.09

%

8,761

63

2.85

%

8,378

55

2.60

%

7,866

58

2.96

%

9,615

138

2.89

%

7,889

116

2.97

%

Investment securities - trading

8,572

24

1.12

%

7,629

22

1.17

%

8,203

96

4.64

%

8,204

30

1.45

%

8,202

22

1.08

%

8,103

46

1.14

%

8,270

43

1.05

%

Loans and leases *

3,524,219

44,903

5.11

%

3,477,739

44,958

5.24

%

3,399,484

44,274

5.17

%

3,379,699

42,214

4.96

%

3,353,339

41,782

5.00

%

3,501,107

89,861

5.18

%

3,322,447

82,536

5.01

%

Total interest-earning assets

4,149,580

48,514

4.69

%

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

%

4,115,178

97,111

4.76

%

3,902,472

88,477

4.57

%

Cash and due from banks

13,725

14,414

13,962

7,587

7,153

14,068

8,916

Less: allowance for loan and lease losses

(20,844

)

(19,887

)

(18,625

)

(19,467

)

(18,043

)

(20,368

)

(17,837

)

Other assets

509,164

470,206

424,957

423,864

415,628

489,794

402,086

Total assets

$

4,651,625

$

4,545,129

$

4,413,000

$

4,376,148

$

4,344,541

$

4,598,672

$

4,295,637

Liabilities:

Interest-bearing deposits:

Savings, NOW and market rate deposits

$

1,928,755

$

5,040

1.05

%

$

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

%

$

1,863,790

$

8,804

0.95

%

$

1,701,732

$

3,552

0.42

%

Wholesale deposits

345,782

2,143

2.49

%

342,696

2,012

2.38

%

346,134

1,986

2.28

%

256,347

1,329

2.06

%

233,714

973

1.67

%

344,247

4,155

2.43

%

232,508

1,706

1.48

%

Retail time deposits

520,317

2,472

1.91

%

533,395

2,321

1.76

%

552,213

2,179

1.57

%

541,652

1,779

1.30

%

533,254

1,453

1.09

%

526,820

4,793

1.83

%

530,378

2,713

1.03

%

Total interest-bearing deposits

2,794,854

9,655

1.39

%

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

%

2,734,857

17,752

1.31

%

2,464,618

7,971

0.65

%

Borrowings:

Short-term borrowings

68,529

357

2.09

%

157,652

943

2.43

%

128,429

681

2.10

%

208,201

1,096

2.09

%

205,323

985

1.92

%

112,844

1,300

2.32

%

189,019

1,615

1.72

%

Long-term FHLB advances

52,397

269

2.06

%

55,385

278

2.04

%

67,363

331

1.95

%

81,460

394

1.92

%

102,023

490

1.93

%

53,883

547

2.05

%

112,911

1,052

1.88

%

Subordinated notes

98,587

1,144

4.65

%

98,542

1,145

4.71

%

98,497

1,145

4.61

%

98,457

1,144

4.61

%

98,463

1,143

4.66

%

98,564

2,289

4.68

%

98,447

2,286

4.68

%

Jr. subordinated debt

21,637

352

6.53

%

21,595

358

6.72

%

21,553

342

6.30

%

21,511

337

6.22

%

21,470

321

6.00

%

21,616

710

6.62

%

21,450

609

5.73

%

Total borrowings

241,150

2,122

3.53

%

333,174

2,724

3.32

%

315,842

2,499

3.14

%

409,629

2,971

2.88

%

427,279

2,939

2.76

%

286,907

4,846

3.41

%

421,827

5,562

2.66

%

Total interest-bearing liabilities

3,036,004

11,777

1.56

%

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

%

3,021,764

22,598

1.51

%

2,886,445

13,533

0.95

%

Noninterest-bearing deposits

909,945

871,726

878,047

866,314

841,676

890,941

840,571

Other liabilities

124,211

93,949

60,393

59,085

52,389

109,165

42,482

Total noninterest-bearing liabilities

1,034,156

965,675

938,440

925,399

894,065

1,000,106

883,053

Total liabilities

4,070,160

3,973,043

3,856,694

3,828,241

3,810,640

4,021,870

3,769,498

Shareholders' equity

581,465

572,086

556,306

547,907

533,901

576,802

526,139

Total liabilities and shareholders' equity

$

4,651,625

$

4,545,129

$

4,413,000

$

4,376,148

$

4,344,541

$

4,598,672

$

4,295,637

Net interest spread

3.13

%

3.37

%

3.44

%

3.38

%

3.55

%

3.25

%

3.62

%

Effect of noninterest-bearing sources

0.42

%

0.38

%

0.35

%

0.31

%

0.26

%

0.40

%

0.25

%

Tax-equivalent net interest margin

$

36,737

3.55

%

$

37,776

3.75

%

$

38,114

3.79

%

$

36,852

3.69

%

$

37,424

3.81

%

$

74,513

3.65

%

$

74,944

3.87

%

Tax-equivalent adjustment

$

126

0.01

%

$

129

0.01

%

$

127

0.01

%

$

123

0.01

%

$

108

0.01

%

$

255

0.01

%

$

189

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

For the Six Months Ended

June 30, 2019

March 31, 2019

December 31, 2018

September 30, 2018

June 30, 2018

June 30, 2019

June 30, 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

Inc. / (Dec.)

Effect on Yield or Rate

Inc. / (Dec.)

Effect on Yield or Rate

Loans and leases

Income

$

1,193

0.14

%

$

1,997

0.23

%

$

2,492

0.29

%

$

1,464

0.17

%

$

1,945

0.23

%

$

3,190

0.18

%

$

4,647

0.28

%

Retail time deposits

Expense

(171

)

(0.13

)%

(222

)

(0.17

)%

(279

)

(0.20

)%

(311

)

(0.23

)%

(339

)

(0.25

)%

(393

)

(0.15

)%

(719

)

(0.27

)%

Long-term FHLB advances

Expense

34

0.26

%

33

0.24

%

34

0.20

%

32

0.16

%

25

0.10

%

67

0.25

%

40

0.07

%

Jr. subordinated debt

Expense

43

0.80

%

42

0.79

%

42

0.77

%

41

0.76

%

41

0.77

%

85

0.79

%

81

0.76

%

Net interest income from fair value marks

$

1,287

$

2,144

$

2,695

$

1,702

$

2,218

$

3,431

$

5,245

Purchase accounting effect on tax-equivalent margin

0.12

%

0.21

%

0.27

%

0.17

%

0.23

%

0.17

%

0.27

%

Bryn Mawr Bank Corporation
Appendix - Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Performance Measures (unaudited)
(dollars in thousands, except per share data)

Statement on Non-GAAP Measures: The Corporation believes the presentation of the following non-GAAP financial measures provides useful supplemental information that is essential to an investor’s proper understanding of the results of operations and financial condition of the Corporation. Management uses non-GAAP financial measures in its analysis of the Corporation’s performance. These non-GAAP measures should not be viewed as substitutes for the financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

As of or For the Three Months Ended

As of or For the Six Months Ended

June 30,
2019

March 31,
2019

December 31, 2018

September 30, 2018

June 30,
2018

June 30,
2019

June 30,
2018

Reconciliation of Net Income to Net Income (core):

Net income attributable to BMBC (a GAAP measure)

$

15,785

$

10,677

$

17,136

$

16,682

$

14,688

$

26,462

$

29,974

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

5,824

Voluntary years of service incentive program expenses

3,553

3,553

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

31

151

(69

)

521

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

$

15,785

$

14,230

$

17,167

$

17,140

$

17,031

$

30,015

$

36,313

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

Weighted average common shares outstanding

20,144,651

20,168,498

20,225,993

20,270,706

20,238,852

20,156,509

20,221,010

Dilutive common shares

99,758

103,163

95,290

167,670

174,726

99,960

206,782

Weighted average diluted shares

20,244,409

20,271,661

20,321,283

20,438,376

20,413,578

20,256,469

20,427,792

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

$

0.78

$

0.71

$

0.85

$

0.85

$

0.84

$

1.49

$

1.80

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

$

0.78

$

0.70

$

0.84

$

0.84

$

0.83

$

1.48

$

1.78

Calculation of Return on Average Tangible Equity:

Net income attributable to BMBC (a GAAP measure)

$

15,785

$

10,677

$

17,136

$

16,682

$

14,688

$

26,462

$

29,974

Add: Tax-effected amortization and impairment of intangible assets

755

741

787

705

702

1,496

1,397

Net tangible income (numerator)

$

16,540

$

11,418

$

17,923

$

17,387

$

15,390

$

27,958

$

31,371

Average shareholders' equity

$

581,465

$

572,086

$

556,306

$

547,907

$

533,901

$

576,802

$

526,139

Less: Average Noncontrolling interest

688

685

681

678

685

687

684

Less: Average goodwill and intangible assets

(205,593

)

(206,716

)

(207,893

)

(207,880

)

(208,039

)

(206,152

)

(206,790

)

Net average tangible equity (denominator)

$

376,560

$

366,055

$

349,094

$

340,705

$

326,547

$

371,337

$

320,033

Return on tangible equity (a non-GAAP measure)

17.62

%

12.65

%

20.37

%

20.25

%

18.90

%

15.18

%

19.77

%

Calculation of Return on Average Tangible Equity (core):

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

$

15,785

$

14,230

$

17,167

$

17,140

$

17,031

$

30,015

$

36,313

Add: Tax-effected amortization and impairment of intangible assets

755

741

787

705

702

1,496

1,397

Net tangible income (core) (numerator)

$

16,540

$

14,971

$

17,954

$

17,845

$

17,733

$

31,511

$

37,710

Average shareholders' equity

$

581,465

$

572,086

$

556,306

$

547,907

$

533,901

$

576,802

$

526,139

Less: Average Noncontrolling interest

688

685

681

678

685

687

684

Less: Average goodwill and intangible assets

(205,593

)

(206,716

)

(207,893

)

(207,880

)

(208,039

)

(206,152

)

(206,790

)

Net average tangible equity (denominator)

$

376,560

$

366,055

$

349,094

$

340,705

$

326,547

$

371,337

$

320,033

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

17.62

%

16.59

%

20.40

%

20.78

%

21.78

%

17.11

%

23.76

%

Statement on Non-GAAP Measures: The Corporation believes the presentation of the following non-GAAP financial measures provides useful supplemental information that is essential to an investor’s proper understanding of the results of operations and financial condition of the Corporation. Management uses non-GAAP financial measures in its analysis of the Corporation’s performance. These non-GAAP measures should not be viewed as substitutes for the financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

As of or For the Three Months Ended

As of or For the Six Months Ended

June 30,
2019

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

June 30,
2019

June 30,
2018

Calculation of Tangible Equity Ratio (BMBC):

Total shareholders' equity

$

590,155

$

575,107

$

564,704

$

551,425

$

542,503

Less: Noncontrolling interest

693

686

685

678

677

Less: Goodwill and intangible assets

(205,050

)

(206,006

)

(207,467

)

(208,165

)

(208,139

)

Net tangible equity (numerator)

$

385,798

$

369,787

$

357,922

$

343,938

$

335,041

Total assets

$

4,736,565

$

4,631,993

$

4,652,485

$

4,388,442

$

4,394,203

Less: Goodwill and intangible assets

(205,050

)

(206,006

)

(207,467

)

(208,165

)

(208,139

)

Tangible assets (denominator)

$

4,531,515

$

4,425,987

$

4,445,018

$

4,180,277

$

4,186,064

Tangible equity ratio (BMBC)(1)

8.51

%

8.35

%

8.05

%

8.23

%

8.00

%

Calculation of Tangible Equity Ratio (BMTC):

Total shareholders' equity

$

625,464

$

605,985

$

591,695

$

582,698

$

582,354

Less: Noncontrolling interest

693

686

685

678

677

Less: Goodwill and intangible assets

(192,450

)

(193,329

)

(194,715

)

(195,337

)

(195,245

)

Net tangible equity (numerator)

$

433,707

$

413,342

$

397,665

$

388,039

$

387,786

Total assets

$

4,721,394

$

4,616,724

$

4,637,481

$

4,372,590

$

4,378,508

Less: Goodwill and intangible assets

(192,450

)

(193,329

)

(194,715

)

(195,337

)

(195,245

)

Tangible assets (denominator)

$

4,528,944

$

4,423,395

$

4,442,766

$

4,177,253

$

4,183,263

Tangible equity ratio (BMTC)(1)

9.58

%

9.34

%

8.95

%

9.29

%

9.27

%

Calculation of Return on Average Assets (core)

Return on average assets (GAAP)

1.36

%

0.95

%

1.54

%

1.51

%

1.36

%

1.16

%

1.41

%

Effect of adjustment to GAAP net income to core net income

%

0.32

%

%

0.04

%

0.21

%

0.16

%

0.29

%

Return on average assets (core)

1.36

%

1.27

%

1.54

%

1.55

%

1.57

%

1.32

%

1.70

%

Calculation of Return on Average Equity (core)

Return on average equity (GAAP)

10.89

%

7.57

%

12.22

%

12.08

%

11.03

%

9.25

%

11.49

%

Effect of adjustment to GAAP net income to core net income

%

2.52

%

0.02

%

0.33

%

1.76

%

1.24

%

2.43

%

Return on average equity (core)

10.89

%

10.09

%

12.24

%

12.41

%

12.79

%

10.49

%

13.92

%

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

Tax-equivalent net interest margin

3.55

%

3.75

%

3.79

%

3.69

%

3.81

%

3.65

%

3.87

%

Effect of fair value marks

0.12

%

0.21

%

0.27

%

0.17

%

0.23

%

0.17

%

0.27

%

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

3.43

%

3.54

%

3.52

%

3.52

%

3.58

%

3.48

%

3.60

%

  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

As of or For the Six Months Ended

June 30,
2019

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

June 30,
2019

June 30,
2018

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

Tax-equivalent net interest income

$

36,737

$

37,776

$

38,114

$

36,852

$

37,424

Effect of fair value marks

1,287

2,144

2,695

1,702

2,218

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

$

35,450