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

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