EX-99.1 2 q32018exhibit991.htm EXHIBIT 99.1 Exhibit

Exhibit 99.1
bmtclogoa01.jpg
FOR RELEASE: IMMEDIATELY
 
Frank Leto, President, CEO
FOR MORE INFORMATION CONTACT:
 
610-581-4730
 
 
Mike Harrington, CFO
 
 
610-526-2466


Bryn Mawr Bank Corporation Continues Momentum
with Another Strong Quarter and Record
Quarterly Earnings of $16.7 Million,
Declares $0.25 Dividend

BRYN MAWR, Pa., October 18, 2018 - Bryn Mawr Bank Corporation (NASDAQ: BMTC) (the “Corporation”), parent of The Bryn Mawr Trust Company (the “Bank”) today reported net income of $16.7 million, or $0.82 diluted earnings per share for the three months ended September 30, 2018, as compared to net income of $14.7 million, or $0.72 diluted earnings per share, for the three months ended June 30, 2018, and $10.7 million, or $0.62 diluted earnings per share, for the three months ended September 30, 2017.

On a non-GAAP basis, core net income, which excludes Tax Cuts and Jobs Act ("Tax Reform") related income tax charges, due diligence and merger-related expenses and other non-core income and expense items, as detailed in the appendix to this earnings release, was $17.1 million, or $0.84 diluted earnings per share, for the three months ended September 30, 2018, as compared to $17.0 million, or $0.83 diluted earnings per share, for the three months ended June 30, 2018, and $11.2 million, or $0.65 diluted earnings per share, for the three months ended September 30, 2017. Management believes the core net income measure is important in evaluating the Corporation’s performance on a more comparable basis between periods. A reconciliation of this and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release.

"We continued the momentum of our strong first half into the third quarter, posting record quarterly earnings of $16.7 million," stated Frank Leto, President and Chief Executive Officer.

“We are excited about the continued organic growth of our loan portfolio and assets held under management by our wealth division,” continued Mr. Leto. “We have seen a 10.6% year to date increase in originated loans and are approaching close to $14 billion in assets under management, increasing $509 million from last quarter or over 15% on an annualized basis,” added Mr. Leto, continuing “Such organic growth contributed to our solid results this quarter and leaves us well positioned to close out the fiscal year on a strong note.”

The Board of Directors of the Corporation declared a quarterly dividend of $0.25 per share, payable December 1, 2018 to shareholders of record as of November 1, 2018.

SIGNIFICANT ITEMS OF NOTE

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

Net income for the three months ended September 30, 2018 was $16.7 million, as compared to net income of $14.7 million for the three months ended June 30, 2018. The provision for loan and lease losses (the “Provision”) for the three months ended September 30, 2018 decreased $2.5 million as compared to the second quarter of 2018. Total noninterest income decreased $1.8 million, total noninterest expense decreased $2.2 million, and income tax expense increased $343 thousand for the three months ended September 30, 2018, as compared to the three months ended June 30, 2018.

1



On a non-GAAP basis, core net income, which excludes Tax Reform related income tax charges, due diligence and merger-related expenses and other non-core income and expense items, as detailed in the appendix to this earnings release, was $17.1 million, or $0.84 per diluted share, for the three months ended September 30, 2018, as compared to $17.0 million or $0.83 per diluted 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.

Net interest income for the three months ended September 30, 2018 was $36.7 million, a decrease of $587 thousand over the linked quarter. The decrease was primarily related to a $1.0 million increase in interest expense on deposits, partially offset by a $414 thousand increase on interest and fees on loans and leases for the three months ended September 30, 2018 as compared to the linked quarter ended June 30, 2018.

Tax-equivalent net interest income for the three months ended September 30, 2018 was $36.9 million, a decrease of $572 thousand over the linked quarter. Excluding the effect of the accretion of purchase accounting fair value marks, the adjusted tax-equivalent net interest income for the three months ended September 30, 2018 was $35.2 million, a decrease of $56 thousand over the linked quarter.

Tax-equivalent interest and fees on loans and leases for the three months ended September 30, 2018 increased $432 thousand over the linked quarter. Average loans and leases for the three months ended September 30, 2018 increased $26.4 million over the linked quarter and experienced a four basis point decrease in tax-equivalent yield.

Tax-equivalent interest income on available for sale investment securities increased $62 thousand for the third quarter of 2018 as compared to the linked quarter. Average available for sale investment securities decreased by $2.8 million over the linked quarter and experienced a four basis point tax-equivalent yield increase.

Interest expense on deposits for the three months ended September 30, 2018 increased $1.0 million over the linked quarter. Average interest-bearing deposits increased $3.9 million coupled with a 16 basis point increase in the rate paid on deposits. This increase of 16 basis points on our interest-bearing deposits was also a key driver in the decrease in the tax-equivalent net interest margin which decreased six basis points to 3.52% at September 30, 2018 as compared to 3.58% in the linked quarter after adjusting for the impact of purchase accounting in both periods.

Noninterest income of $18.3 million for the three months ended September 30, 2018 decreased $1.8 million as compared to the second quarter of 2018. Items contributing to the decrease included decreases of $1.4 million, $315 thousand and $148 thousand in capital markets revenue, fees for wealth management services and insurance commissions, respectively. Other operating income for the three months ended September 30, 2018 and June 30, 2018 included $1.2 million and $710 thousand, respectively, of recoveries of purchase accounting fair value marks resulting from the pay off, in full, of purchased credit impaired loans acquired in the Royal Bank merger.

Noninterest expense of $33.6 million for the three months ended September 30, 2018 decreased $2.2 million as compared to $35.8 million for the second quarter of 2018. The decrease on a linked quarter basis was primarily related to the decrease of $2.7 million in due diligence, merger-related and merger integration expenses. The decrease was partially offset by increases of $479 thousand and $288 thousand of employee benefits and salaries and wages, respectively.

The Provision decreased $2.5 million for the three months ended September 30, 2018 to $664 thousand, as compared the second quarter of 2018. The decrease in the Provision was primarily related to improvements in qualitative factors related to the current economic environment. Net loan and lease charge-offs for the third quarter of 2018 were relatively unchanged from the second quarter of 2018, decreasing by $23 thousand. Nonperforming loans and leases as of September 30, 2018 totaled $9.0 million, a decrease of $458 thousand from June 30, 2018.


2


The effective tax rate for the third quarter of 2018 decreased to 19.6% from 20.2% for the second quarter of 2018. A net discrete tax benefit of $295 thousand was recorded in the third quarter of 2018, as compared to a net discrete tax benefit of $111 thousand in the second quarter of 2018. These discrete items were the result of excess tax benefits from stock-based compensation as well as the re-measurement of certain deferred tax items related to Tax Reform. With the filing of the Corporation's 2017 income tax returns in the fourth quarter, we expect there will be further discrete tax benefits recorded in 2018.

Results of Operations – Third Quarter 2018 Compared to Third Quarter 2017

Net income for the three months ended September 30, 2018 was $16.7 million, or $0.82 diluted earnings per share, as compared to $10.7 million, or diluted earnings per share of $0.62 for the same period in 2017. Contributing to the $6.0 million increase in net income was a $7.3 million increase in net interest income and increases of $1.8 million, $692 thousand, and $381 thousand in other operating income, fees for wealth management services, and insurance commissions, respectively. These increases were partially offset by increases of $2.9 million, $796 thousand, $623 thousand, $344 thousand, and $232 thousand in salaries and wages, employee benefits, other operating expenses, furniture, fixtures and equipment and occupancy and bank premises, respectively. These cost increases were primarily related to the addition of the Royal Bank staff and branch infrastructure. Also contributing to the net income increase was the reduction in our effective income tax rate as a result of Tax Reform, which decreased from 30.7% for the three months ended September 30, 2017 to 19.6% for the same period in 2018.

On a non-GAAP basis, core net income, which excludes Tax Reform related income tax charges, due diligence and merger-related expenses and other non-core income and expense items, as detailed in the appendix to this earnings release, was $17.1 million, or $0.84 per diluted share, for the three months ended September 30, 2018 as compared to $11.2 million, or $0.65 per diluted share, for the same period in 2017. Management believes the core net income measure is important in evaluating the Corporation’s performance on a more comparable basis between periods. A reconciliation of this and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release.

Tax-equivalent net interest income for the three months ended September 30, 2018 was $36.9 million, an increase of $7.2 million as compared to the same period in 2017.

Tax-equivalent interest and fees on loans and leases increased $11.2 million for the three months ended September 30, 2018 as compared to the same period in 2017. Average loans and leases for the third quarter of 2018 increased $699.4 million from the same period in 2017 and experienced a 36 basis point increase in tax-equivalent yield. Excluding the effect of the accretion of purchase accounting fair value marks on loans and leases, the adjusted tax-equivalent yield on loans and leases experienced a 29 basis point increase from the third quarter of 2018 as compared to the same period in 2017. This increase in average loans and leases was primarily related to the loans and leases acquired in the Royal Bank merger in December 2017 which initially increased loans and leases by $567.3 million, as well as organic loan growth between the periods.

Average available for sale investment securities increased by $78.0 million for the three months ended September 30, 2018 as compared to the same period in 2017 and experienced a 27 basis point tax-equivalent yield increase. The increase in average balances and yield on available for sale investment securities resulted in a $749 thousand increase in tax-equivalent interest income on available for sale investment securities for the third quarter of 2018 as compared to the same period in 2017.

Partially offsetting the effect on net interest income associated with the increase in average loans and leases and available for sale investment securities was a $3.3 million increase in interest expense on deposits for the three months ended September 30, 2018 as compared to the same period in 2017. Average interest-bearing deposits increased by $621.7 million, coupled with a 41 basis point increase in rate paid for the third quarter of 2018 as compared to the same period in 2017. The increase in average interest-bearing deposits for the third quarter of 2018 as compared to the same period in 2017 was largely related to the interest-bearing deposits assumed in the Royal Bank merger, which initially totaled $494.8 million.



3


In addition to the increased interest expense on deposits, interest expense on long- and short-term borrowings increased $298 thousand for the three months ended September 30, 2018 as compared to the same period in 2017. The increase was primarily attributed to a 118 basis point increase in rate paid for the third quarter of 2018 as compared to the same period in 2017.

Interest expense on subordinated debt and junior subordinated debt increased $774 thousand and $337 thousand, respectively, for the three months ended September 30, 2018 as compared to the same period in 2017. Average subordinated notes for the three months ended September 30, 2018 increased $68.9 million as compared to the same period in 2017 with the rate paid decreasing by 36 basis points to 4.61% for the three months ended September 30, 2018. The volume increase in subordinated notes was the result of the December 13, 2017 issuance of $70 million ten-year, 4.25% fixed-to-floating subordinated notes. Average junior subordinated debentures for the three months ended September 30, 2018 increased $21.5 million as compared to the same period in 2017 as the Corporation acquired $21.4 million of floating rate junior subordinated debentures, currently at a 6.22% rate, in the Royal Bank merger.

The tax-equivalent net interest margin was 3.69% for the three months ended September 30, 2018 as compared to 3.71% for the same period in 2017. Adjusting for the impact of the accretion of purchase accounting fair value marks, the adjusted tax-equivalent net interest margin was 3.52% and 3.62% for three months ended September 30, 2018 and 2017, respectively. Key drivers responsible for the ten basis point decrease included the 41 basis point increase in rate paid on interest-bearing deposits coupled with average balance increases of $68.9 million and $21.5 million in subordinated notes and junior subordinated debentures, respectively, for the three months ended September 30, 2018 as compared to the same period in 2017.

Noninterest income of $18.3 million for the three months ended September 30, 2018 increased by $2.7 million as compared to the same period in 2017. Increases of $1.8 million, $692 thousand and $381 thousand in other operating income, fees for wealth management services and insurance commissions, respectively, were recorded. The $1.8 million increase in other operating income was primarily related to a $1.2 million recovery of a purchase accounting fair value mark resulting from the pay off, in full, of a purchased credit impaired loan acquired in the Royal Bank merger. The increase in fees for wealth management services related to the $1.48 billion increase in wealth assets under management, administration, supervision and brokerage between September 30, 2018 and September 30, 2017.

Noninterest expense of $33.6 million for the three months ended September 30, 2018 increased $5.4 million as compared to the same period in 2017. Contributing to the $5.4 million increase were increases of $2.9 million, $796 thousand, $623 thousand, $344 thousand, and $232 thousand in salaries and wages, employee benefits, other operating expenses, furniture, fixtures and equipment and occupancy and bank premises expenses, respectively. A majority of these increases were related to the additional expenses associated with the staff and facilities assumed in the Royal Bank merger. Partially offsetting the increase in noninterest expense was a decrease of $461 thousand of due diligence, merger-related and merger integration expenses for the three months ended September 30, 2018 as compared to the same period in 2017.

The Provision of $664 thousand for the three months ended September 30, 2018 decreased $669 thousand as compared to $1.3 million for the same period in 2017. The decrease in the Provision was primarily related to improvements in qualitative factors related to the current economic environment. Net charge-offs for the third quarter of 2018 were $1.4 million as compared to $728 thousand for the same period in 2017. Nonperforming loans and leases as of September 30, 2018 totaled $9.0 million, an increase of $4.5 million from September 30, 2017.

The effective tax rate for the third quarter of 2018 decreased to 19.6% from 30.7% for the third quarter of 2017, primarily due to the reduced tax rates as a result of Tax Reform.

Financial Condition – September 30, 2018 Compared to December 31, 2017

Total assets as of September 30, 2018 were $4.39 billion, a decrease of $61.3 million from December 31, 2017. Increases in portfolio loans and leases were largely offset by a decrease in available for sale investment securities discussed in the bullet point below.

4




Available for sale investment securities as of September 30, 2018 totaled $528.1 million, a decrease of $161.1 million from December 31, 2017. The decrease is primarily due to the maturing, in January 2018, of $200 million of short-term U.S. Treasury bills, partially offset by increases of $39.4 million and $9.4 million in the U.S. government and agencies and the mortgage-backed securities segments of the portfolio, respectively.

Total portfolio loans and leases of $3.38 billion as of September 30, 2018 increased by $95.6 million from December 31, 2017, an increase of 2.9%. Increases of $95.1 million, $23.1 million, $9.7 million, $8.5 million and $3.7 million in commercial mortgages, leases, consumer loans, residential mortgages, and commercial and industrial loans, respectively, were offset by decreases of $34.0 million and $10.5 million in construction loans and home equity loans and lines, respectively.

The allowance for loan and lease losses (the “Allowance”) as of September 30, 2018 was $18.7 million, or 0.55% of portfolio loans and leases, as compared to $17.5 million, or 0.53% of portfolio loans and leases as of December 31, 2017. In addition to the ratio of Allowance to portfolio loans and leases, management also calculates two non-GAAP measures: the Allowance of originated loans and leases as a percentage of originated loans and leases, which was 0.68% as of September 30, 2018, as compared to 0.70% as of December 31, 2017, and the Allowance plus the remaining loan mark as a percentage of gross loans, which was 1.28% as of September 30, 2018, as compared to 1.58% as of December 31, 2017. The 30 basis point decrease in the Allowance plus the remaining loan mark as a percentage of gross loans non-GAAP measure is primarily related to the decrease in the remaining loan mark from $34.8 million as of December 31, 2017 to $25.0 million as of September 30, 2018 coupled with the increase in portfolio loans between the respective dates. A reconciliation of these and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release.

Deposits of $3.36 billion as of September 30, 2018 decreased $16.6 million from December 31, 2017. Decreases of $90.5 million, $52.3 million, $50.6 million, and $38.2 million in noninterest-bearing deposits, savings accounts, money market accounts, and wholesale non-maturity deposits, respectively, were partially offset by increases of $96.9 million and $89.2 million in interest-bearing demand accounts and wholesale time deposits, respectively.

Borrowings of $419.4 million as of September 30, 2018, which include short-term borrowings, long-term FHLB advances, subordinated notes and junior subordinated debentures, decreased $77.5 million from December 31, 2017. The decrease was comprised of a $66.3 million decrease in long-term FHLB advances, and a $11.4 million decrease in short-term borrowings.

Wealth assets under management, administration, supervision and brokerage totaled $13.91 billion as of September 30, 2018, an increase of $944.5 million from December 31, 2017.

The capital ratios for the Bank and the Corporation, as of September 30, 2018, as shown in the attached tables, indicate levels above the regulatory minimum to be considered “well capitalized.”


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


5



Such forward-looking statements involve known and unknown risks and uncertainties. A number of factors, many of which are beyond the Corporation's control, could cause our actual results, events or developments, or industry results, to be materially different from any future results, events or developments expressed, implied or anticipated by such forward-looking statements, and so our business and financial condition and results of operations could be materially and adversely affected. Such factors include, among others, our inability to successfully integrate acquired businesses, the possibility that integration may take longer than anticipated or be more costly to complete and that the anticipated benefits, including any anticipated cost savings or strategic gains may be significantly harder to achieve or take longer than anticipated or may not be achieved, our need for capital, our ability to control operating costs and expenses, and to manage loan and lease delinquency rates; the credit risks of lending activities and overall quality of the composition of our loan, lease and securities portfolio; the impact of economic conditions, consumer and business spending habits, and real estate market conditions on our business and in our market area; changes in the levels of general interest rates, deposit interest rates, or net interest margin and funding sources; changes in banking regulations and policies and the possibility that any banking agency approvals we might require for certain activities will not be obtained in a timely manner or at all or will be conditioned in a manner that would impair our ability to implement our business plans; changes in accounting policies and practices; litigation; cybersecurity events; the inability of key third-party providers to perform their obligations to us; our ability to attract and retain key personnel; competition in our marketplace; war or terrorist activities; material differences in the actual financial results, cost savings and revenue enhancements associated with our acquisitions; and other factors as described in our securities filings. All forward-looking statements and information set forth herein are based on management’s current beliefs and assumptions as of the date hereof and speak only as of the date they are made. The Corporation does not undertake to update forward-looking statements.

For a complete discussion of the assumptions, risks and uncertainties related to our business, you are encouraged to review our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, as updated by our quarterly or other reports subsequently filed with the SEC.

# # # #

6

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 Nine Months Ended
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
 
September 30, 2018
 
September 30, 2017
Consolidated Balance Sheet (selected items)
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits with banks
$
35,233

 
$
39,924

 
$
24,589

 
$
48,367

 
$
36,870

 
 
 
 
Investment securities
545,320

 
547,088

 
550,199

 
701,744

 
482,399

 
 
 
 
Loans held for sale
4,111

 
4,204

 
5,522

 
3,794

 
6,327

 
 
 
 
Portfolio loans and leases
3,381,475

 
3,389,501

 
3,305,795

 
3,285,858

 
2,677,345

 
 
 
 
Allowance for loan and lease losses ("ALLL")
(18,684
)
 
(19,398
)
 
(17,662
)
 
(17,525
)
 
(17,004
)
 
 
 
 
Goodwill and other intangible assets
208,165

 
208,139

 
207,287

 
205,855

 
128,534

 
 
 
 
Total assets
4,388,442

 
4,394,203

 
4,300,376

 
4,449,720

 
3,476,821

 
 
 
 
Deposits - interest-bearing
2,522,863

 
2,466,529

 
2,452,421

 
2,448,954

 
1,923,567

 
 
 
 
Deposits - non-interest-bearing
834,363

 
892,386

 
863,118

 
924,844

 
760,614

 
 
 
 
Short-term borrowings
226,498

 
227,059

 
173,704

 
237,865

 
180,874

 
 
 
 
Long-term FHLB advances
72,841

 
87,808

 
107,784

 
139,140

 
134,651

 
 
 
 
Subordinated notes
98,482

 
98,491

 
98,448

 
98,416

 
29,573

 
 
 
 
Jr. subordinated debentures
21,538

 
21,497

 
21,456

 
21,416

 

 
 
 
 
Total liabilities
3,837,017

 
3,851,700

 
3,767,315

 
3,921,601

 
3,074,929

 
 
 
 
Total shareholders' equity
551,425

 
542,503

 
533,061

 
528,119

 
401,892

 
 
 
 
Average Balance Sheet (selected items)
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits with banks
37,467

 
37,215

 
38,044

 
43,962

 
26,628

 
37,573

 
30,807

Investment securities
546,998

 
549,249

 
535,471

 
499,968

 
462,700

 
543,948

 
428,723

Loans held for sale
4,932

 
4,413

 
2,848

 
3,966

 
3,728

 
4,072

 
3,938

Portfolio loans and leases
3,374,767

 
3,348,926

 
3,288,364

 
2,801,289

 
2,676,589

 
3,337,669

 
2,613,720

Total interest-earning assets
3,964,164

 
3,939,803

 
3,864,727

 
3,349,185

 
3,169,645

 
3,923,262

 
3,077,188

Goodwill and intangible assets
207,880

 
208,039

 
205,529

 
142,652

 
128,917

 
207,158

 
126,794

Total assets
4,376,148

 
4,344,541

 
4,246,180

 
3,640,667

 
3,441,906

 
4,331,605

 
3,340,484

Deposits - interest-bearing
2,493,213

 
2,489,296

 
2,435,491

 
2,031,170

 
1,871,494

 
2,474,254

 
1,859,188

Short-term borrowings
208,201

 
205,323

 
172,534

 
180,650

 
182,845

 
195,483

 
110,268

Long-term FHLB advances
81,460

 
102,023

 
123,920

 
134,605

 
155,918

 
102,312

 
169,900

Subordinated notes
98,457

 
98,463

 
98,430

 
43,844

 
29,564

 
98,450

 
29,550

Jr. subordinated debentures
21,511

 
21,470

 
21,430

 
3,957

 

 
21,470

 

Total interest-bearing liabilities
2,902,842

 
2,916,575

 
2,851,805

 
2,394,226

 
2,239,821

 
2,891,969

 
2,168,906

Total liabilities
3,828,241

 
3,810,640

 
3,719,746

 
3,213,349

 
3,044,549

 
3,794,979

 
2,950,666

Total shareholders' equity
547,907

 
533,901

 
526,434

 
427,318

 
397,357

 
536,626

 
389,818



7

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 Nine Months Ended
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
 
September 30, 2018
 
September 30, 2017
Income Statement
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
$
36,729

 
$
37,316

 
$
37,439

 
$
30,321

 
$
29,438

 
$
111,484

 
$
84,806

Provision for loan and lease losses
664

 
3,137

 
1,030

 
1,077

 
1,333

 
4,831

 
1,541

Noninterest income
18,274

 
20,075

 
19,536

 
15,536

 
15,584

 
57,885

 
43,596

Noninterest expense
33,592

 
35,836

 
36,030

 
31,056

 
28,184

 
105,458

 
83,339

Income tax expense
4,066

 
3,723

 
4,630

 
19,924

 
4,766

 
12,419

 
14,306

Net income
16,681

 
14,695

 
15,285

 
(6,200
)
 
10,739

 
46,661

 
29,216

Net income (loss) attributable to noncontrolling interest
(1
)
 
7

 
(1
)
 

 

 
5

 

Net income (loss) attributable to Bryn Mawr Bank Corporation
16,682

 
14,688

 
15,286

 
(6,200
)
 
10,739

 
46,656

 
29,216

Basic earnings per share
0.82

 
0.73

 
0.76

 
(0.35
)
 
0.63

 
2.31

 
1.72

Diluted earnings per share
0.82

 
0.72

 
0.75

 
(0.35
)
 
0.62

 
2.28

 
1.69

Net income (core) (1)
17,140

 
17,031

 
19,282

 
11,255

 
11,245

 
53,453

 
30,857

Basic earnings per share (core) (1)
0.85

 
0.84

 
0.95

 
0.64

 
0.66

 
2.64

 
1.82

Diluted earnings per share (core) (1)
0.84

 
0.83

 
0.94

 
0.63

 
0.65

 
2.61

 
1.79

Dividends paid or accrued per share
0.25

 
0.22

 
0.22

 
0.22

 
0.22

 
0.69

 
0.64

Profitability Indicators
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
1.51
%
 
1.36
%
 
1.46
%
 
(0.68
)%
 
1.24
%
 
1.44
%
 
1.17
%
Return on average equity
12.08
%
 
11.03
%
 
11.78
%
 
(5.76
)%
 
10.72
%
 
11.62
%
 
10.02
%
Return on tangible equity(1)
20.25
%
 
18.90
%
 
20.15
%
 
(8.02
)%
 
16.52
%
 
19.74
%
 
15.53
%
Return on tangible equity (core)(1)
20.78
%
 
21.78
%
 
25.19
%
 
16.29
 %
 
17.27
%
 
22.50
%
 
16.36
%
Return on average assets (core)(1)
1.55
%
 
1.57
%
 
1.84
%
 
1.23
 %
 
1.30
%
 
1.65
%
 
1.24
%
Return on average equity (core)(1)
12.41
%
 
12.79
%
 
14.85
%
 
10.45
 %
 
11.23
%
 
13.32
%
 
10.58
%
Tax-equivalent net interest margin
3.69
%
 
3.81
%
 
3.94
%
 
3.62
 %
 
3.71
%
 
3.81
%
 
3.71
%
Efficiency ratio(1)
58.75
%
 
55.57
%
 
54.12
%
 
58.64
 %
 
59.30
%
 
56.12
%
 
61.32
%
Share Data
 
 
 
 
 
 
 
 
 
 
 
 
 
Closing share price
$
46.90

 
$
46.30

 
$
43.95

 
$
44.20

 
$
43.80

 
 
 
 
Book value per common share
$
27.18

 
$
26.80

 
$
26.35

 
$
26.19

 
$
23.57

 
 
 
 
Tangible book value per common share
$
16.95

 
$
16.55

 
$
16.14

 
$
16.02

 
$
16.03

 
 
 
 
Price / book value
172.55
%
 
172.76
%
 
166.79
%
 
168.74
 %
 
185.82
%
 
 
 
 
Price / tangible book value
276.70
%
 
279.74
%
 
272.35
%
 
275.94
 %
 
273.19
%
 
 
 
 
Weighted average diluted shares outstanding
20,438,376

 
20,413,578

 
20,450,494

 
17,844,672

 
17,253,982

 
20,444,075

 
17,242,227

Shares outstanding, end of period
20,291,416

 
20,242,893

 
20,229,896

 
20,161,395

 
17,050,151

 
 
 
 
Wealth Management Information:
 
 
 
 
 
 
 
 
 
 
 
 
 
Wealth assets under mgmt, administration, supervision and brokerage (2)
$
13,913,265

 
$
13,404,723

 
$
13,146,926

 
$
12,968,738

 
$
12,431,370

 
 
 
 
Fees for wealth management services
$
10,343

 
$
10,658

 
$
10,308

 
$
9,974

 
$
9,651

 
 
 
 







8

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 Nine Months Ended
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
 
September 30, 2018
 
September 30, 2017
Capital Ratios(3)
 
 
 
 
 
 
 
 
 
 
 
 
 
Bryn Mawr Trust Company ("BMTC")
 
 
 
 
 
 
 
 
 
 
 
 
 
Tier I capital to risk weighted assets ("RWA")
11.55
%
 
11.34
%
 
11.29
%
 
11.10
%
 
10.78
%
 
 
 
 
Total capital to RWA
12.10
%
 
11.91
%
 
11.82
%
 
11.65
%
 
11.42
%
 
 
 
 
Tier I leverage ratio
9.47
%
 
9.49
%
 
9.39
%
 
10.76
%
 
8.79
%
 
 
 
 
Tangible equity ratio (1)
9.29
%
 
9.27
%
 
9.19
%
 
8.67
%
 
8.46
%
 
 
 
 
Common equity Tier I capital to RWA
11.55
%
 
11.34
%
 
11.29
%
 
11.10
%
 
10.78
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bryn Mawr Bank Corporation ("BMBC")
 
 
 
 
 
 
 
 
 
 
 
 
 
Tier I capital to RWA
10.90
%
 
10.46
%
 
10.46
%
 
10.42
%
 
10.50
%
 
 
 
 
Total capital to RWA
14.33
%
 
13.87
%
 
13.93
%
 
13.92
%
 
12.23
%
 
 
 
 
Tier I leverage ratio
8.94
%
 
8.75
%
 
8.71
%
 
10.10
%
 
8.53
%
 
 
 
 
Tangible equity ratio (1)
8.23
%
 
8.00
%
 
7.98
%
 
7.61
%
 
8.16
%
 
 
 
 
Common equity Tier I capital to RWA
10.29
%
 
9.86
%
 
9.85
%
 
9.87
%
 
10.50
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset Quality Indicators
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loan and lease charge-offs ("NCO"s)
$
1,378

 
$
1,401

 
$
893

 
$
556

 
$
728

 
$
4,228

 
$
2,023

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonperforming loans and leases ("NPL"s)
$
8,990

 
$
9,448

 
$
7,533

 
$
8,579

 
$
4,472

 
 
 
 
Other real estate owned ("OREO")
529

 
531

 
300

 
304

 
865

 
 
 
 
Total nonperforming assets ("NPA"s)
$
9,519

 
$
9,979

 
$
7,833

 
$
8,883

 
$
5,337

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonperforming loans and leases 30 or more days past due
$
4,906

 
$
6,749

 
$
5,775

 
$
6,983

 
$
2,337

 
 
 
 
Performing loans and leases 30 to 89 days past due
9,145

 
10,378

 
6,547

 
7,958

 
4,558

 
 
 
 
Performing loans and leases 90 or more days past due

 

 

 

 

 
 
 
 
Total delinquent loans and leases
$
14,051

 
$
17,127

 
$
12,322

 
$
14,941

 
$
6,895

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Delinquent loans and leases to total loans and leases
0.42
%
 
0.50
%
 
0.37
%
 
0.45
%
 
0.26
%
 
 
 
 
Delinquent performing loans and leases to total loans and leases
0.27
%
 
0.31
%
 
0.20
%
 
0.24
%
 
0.17
%
 
 
 
 
NCOs / average loans and leases (annualized)
0.16
%
 
0.17
%
 
0.11
%
 
0.08
%
 
0.11
%
 
0.17
%
 
0.10
%
NPLs / total portfolio loans and leases
0.27
%
 
0.28
%
 
0.23
%
 
0.26
%
 
0.17
%
 
 
 
 
NPAs / total loans and leases and OREO
0.28
%
 
0.29
%
 
0.24
%
 
0.27
%
 
0.20
%
 
 
 
 
NPAs / total assets
0.22
%
 
0.23
%
 
0.18
%
 
0.20
%
 
0.15
%
 
 
 
 
ALLL / NPLs
207.83
%
 
205.31
%
 
234.46
%
 
204.28
%
 
380.23
%
 
 
 
 
ALLL / portfolio loans
0.55
%
 
0.57
%
 
0.53
%
 
0.53
%
 
0.64
%
 
 
 
 
ALLL on originated loans and leases / Originated loans and leases (1)
0.68
%
 
0.71
%
 
0.69
%
 
0.70
%
 
0.70
%
 
 
 
 
(Total ALLL + Loan mark) / Total Gross portfolio loans and leases (1)
1.28
%
 
1.35
%
 
1.50
%
 
1.58
%
 
1.01
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Troubled debt restructurings ("TDR"s) included in NPLs
$
1,208

 
$
1,044

 
$
1,125

 
$
3,289

 
$
2,033

 
 
 
 
TDRs in compliance with modified terms
4,316

 
4,117

 
5,235

 
5,800

 
6,597

 
 
 
 
Total TDRs
$
5,524

 
$
5,161

 
$
6,360

 
$
9,089

 
$
8,630

 
 
 
 
(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.

9

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

 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
Assets
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
10,121

 
$
7,318

 
$
7,804

 
$
11,657

 
$
8,682

Interest-bearing deposits with banks
35,233

 
39,924

 
24,589

 
48,367

 
36,870

  Cash and cash equivalents
45,354

 
47,242

 
32,393

 
60,024

 
45,552

Investment securities, available for sale
528,064

 
531,075

 
534,103

 
689,202

 
471,721

Investment securities, held to maturity
8,916

 
7,838

 
7,885

 
7,932

 
6,255

Investment securities, trading
8,340

 
8,175

 
8,211

 
4,610

 
4,423

Loans held for sale
4,111

 
4,204

 
5,522

 
3,794

 
6,327

Portfolio loans and leases, originated
2,752,160

 
2,700,815

 
2,564,827

 
2,487,296

 
2,433,054

Portfolio loans and leases, acquired
629,315

 
688,686

 
740,968

 
798,562

 
244,291

  Total portfolio loans and leases
3,381,475

 
3,389,501

 
3,305,795

 
3,285,858

 
2,677,345

Less: Allowance for losses on originated loan and leases
(18,612
)
 
(19,181
)
 
(17,570
)
 
(17,475
)
 
(16,957
)
Less: Allowance for losses on acquired loan and leases
(72
)
 
(217
)
 
(92
)
 
(50
)
 
(47
)
  Total allowance for loan and lease losses
(18,684
)
 
(19,398
)
 
(17,662
)
 
(17,525
)
 
(17,004
)
    Net portfolio loans and leases
3,362,791

 
3,370,103

 
3,288,133

 
3,268,333

 
2,660,341

Premises and equipment
63,281

 
54,185

 
54,986

 
54,458

 
44,544

Accrued interest receivable
13,232

 
13,115

 
12,521

 
14,246

 
9,287

Mortgage servicing rights
5,328

 
5,511

 
5,706

 
5,861

 
5,732

Bank owned life insurance
57,543

 
57,243

 
56,946

 
56,667

 
39,881

Federal Home Loan Bank ("FHLB") stock
14,678

 
16,678

 
15,499

 
20,083

 
16,248

Goodwill
183,864

 
183,162

 
182,200

 
179,889

 
107,127

Intangible assets
24,301

 
24,977

 
25,087

 
25,966

 
21,407

Other investments
16,529

 
16,774

 
11,720

 
12,470

 
8,941

Other assets
52,110

 
53,921

 
59,464

 
46,185

 
29,035

      Total assets
$
4,388,442

 
$
4,394,203

 
$
4,300,376

 
$
4,449,720

 
$
3,476,821

 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
Deposits
 
 
 
 
 
 
 
 
 
  Noninterest-bearing
$
834,363

 
$
892,386

 
$
863,118

 
$
924,844

 
$
760,614

  Interest-bearing
2,522,863

 
2,466,529

 
2,452,421

 
2,448,954

 
1,923,567

    Total deposits
3,357,226

 
3,358,915

 
3,315,539

 
3,373,798

 
2,684,181

Short-term borrowings
226,498

 
227,059

 
173,704

 
237,865

 
180,874

Long-term FHLB advances
72,841

 
87,808

 
107,784

 
139,140

 
134,651

Subordinated notes
98,482

 
98,491

 
98,448

 
98,416

 
29,573

Jr. subordinated debentures
21,538

 
21,497

 
21,456

 
21,416

 

Accrued interest payable
7,193

 
5,230

 
4,814

 
3,527

 
2,267

Other liabilities
53,239

 
52,700

 
45,570

 
47,439

 
43,383

      Total liabilities
3,837,017

 
3,851,700

 
3,767,315

 
3,921,601

 
3,074,929

 
 
 
 
 
 
 
 
 
 
Shareholders' equity
 
 
 
 
 
 
 
 
 
Common stock
24,533

 
24,453

 
24,439

 
24,360

 
21,248

Paid-in capital in excess of par value
373,205

 
372,227

 
371,319

 
371,486

 
235,412

Less: common stock held in treasury, at cost
(70,437
)
 
(68,943
)
 
(68,787
)
 
(68,179
)
 
(68,134
)
Accumulated other comprehensive (loss) income, net of tax
(13,402
)
 
(11,191
)
 
(9,664
)
 
(4,414
)
 
(1,400
)
Retained earnings
238,204

 
226,634

 
216,438

 
205,549

 
214,766

    Total Bryn Mawr Bank Corporation shareholders' equity
552,103

 
543,180

 
533,745

 
528,802

 
401,892

Noncontrolling interest
(678
)
 
(677
)
 
(684
)
 
(683
)
 

    Total shareholders' equity
551,425

 
542,503

 
533,061

 
528,119

 
401,892

      Total liabilities and shareholders' equity
$
4,388,442

 
$
4,394,203

 
$
4,300,376

 
$
4,449,720

 
$
3,476,821


10

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

 
Portfolio Loans and Leases as of
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
Commercial mortgages
$
1,618,493

 
$
1,613,721

 
$
1,541,457

 
$
1,523,377

 
$
1,224,571

Home equity loans and lines
207,806

 
206,429

 
211,469

 
218,275

 
206,974

Residential mortgages
467,402

 
449,060

 
453,655

 
458,886

 
422,524

Construction
178,493

 
190,874

 
202,168

 
212,454

 
133,505

  Total real estate loans
2,472,194

 
2,460,084

 
2,408,749

 
2,412,992

 
1,987,574

Commercial & Industrial
722,999

 
745,306

 
727,231

 
719,312

 
597,595

Consumer
47,809

 
51,462

 
48,423

 
38,153

 
31,306

Leases
138,473

 
132,649

 
121,392

 
115,401

 
60,870

  Total non-real estate loans and leases
909,281

 
929,417

 
897,046

 
872,866

 
689,771

    Total portfolio loans and leases
$
3,381,475

 
$
3,389,501

 
$
3,305,795

 
$
3,285,858

 
$
2,677,345

 
Nonperforming Loans and Leases as of
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
Commercial mortgages
$
735

 
$
1,011

 
$
138

 
$
872

 
$
193

Home equity loans and lines
1,933

 
2,323

 
1,949

 
1,481

 
613

Residential mortgages
2,770

 
2,647

 
2,603

 
4,417

 
1,589

Construction
291

 

 

 

 

  Total nonperforming real estate loans
5,729

 
5,980

 
4,690

 
6,770

 
2,395

Commercial & Industrial
1,782

 
1,585

 
2,499

 
1,706

 
1,977

Consumer
117

 

 

 

 

Leases
1,362

 
1,882

 
344

 
103

 
100

  Total nonperforming non-real estate loans and leases
3,261

 
3,468

 
2,843

 
1,809

 
2,077

    Total nonperforming portfolio loans and leases
$
8,990

 
$
9,448

 
$
7,533

 
$
8,579

 
$
4,472

 
Net Loan and Lease Charge-Offs (Recoveries) for the Three Months Ended
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
Commercial mortgage
$
56

 
$
13

 
$
(3
)
 
$
51

 
$
(3
)
Home equity loans and lines

 
199

 
25

 
(5
)
 
69

Residential
(12
)
 
(1
)
 

 
88

 
3

Construction

 
(1
)
 
(1
)
 
(1
)
 
(1
)
  Total net charge-offs of real estate loans
44

 
210

 
21

 
133

 
68

Commercial & Industrial
304

 
467

 
283

 
125

 
298

Consumer
71

 
41

 
48

 
55

 
36

Leases
959

 
683

 
541

 
243

 
326

  Total net charge-offs of non-real estate loans and leases
1,334

 
1,191

 
872

 
423

 
660

    Total net charge-offs
$
1,378

 
$
1,401

 
$
893

 
$
556

 
$
728


11

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

 
Investment Securities Available for Sale, at Fair Value
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
U.S. Treasury securities
$
100

 
$
100

 
$
100

 
$
200,088

 
$
100

Obligations of the U.S. Government and agencies
190,453

 
183,256

 
175,107

 
151,044

 
142,711

State & political subdivisions - tax-free
15,629

 
17,254

 
19,746

 
21,138

 
23,556

State & political subdivisions - taxable
170

 
171

 
171

 
172

 
524

Mortgage-backed securities
284,421

 
292,563

 
303,902

 
274,990

 
260,680

Collateralized mortgage obligations
36,193

 
36,634

 
33,980

 
36,662

 
39,595

Other debt securities
1,098

 
1,097

 
1,097

 
1,599

 
1,100

Other investments

 

 

 
3,509

 
3,455

  Total investment securities available for sale, at fair value
$
528,064

 
$
531,075

 
$
534,103

 
$
689,202

 
$
471,721

 
Unrealized Gain (Loss) on Investment Securities Available for Sale
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
U.S. Treasury securities
$

 
$

 
$

 
$
11

 
$

Obligations of the U.S. Government and agencies
(5,881
)
 
(4,594
)
 
(3,756
)
 
(1,984
)
 
(920
)
State & political subdivisions - tax-free
(90
)
 
(57
)
 
(74
)
 
(42
)
 
23

State & political subdivisions - taxable
(1
)
 
(1
)
 
(1
)
 

 
1

Mortgage-backed securities
(7,584
)
 
(6,141
)
 
(5,169
)
 
(968
)
 
869

Collateralized mortgage obligations
(1,618
)
 
(1,443
)
 
(1,322
)
 
(934
)
 
(640
)
Other debt securities
(2
)
 
(3
)
 
(3
)
 
(1
)
 

Other investments

 

 

 
296

 
230

  Total unrealized losses on investment securities available for sale
$
(15,176
)
 
$
(12,239
)
 
$
(10,325
)
 
$
(3,622
)
 
$
(437
)
 
Deposits
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
  Interest-bearing demand
$
578,243

 
$
617,258

 
$
529,478

 
$
481,336

 
$
395,383

  Money market
812,027

 
814,530

 
856,072

 
862,639

 
720,613

  Savings
286,266

 
291,858

 
308,925

 
338,572

 
264,273

  Retail time deposits
561,123

 
536,287

 
523,138

 
532,202

 
316,068

  Wholesale non-maturity deposits
24,040

 
36,826

 
63,449

 
62,276

 
48,620

  Wholesale time deposits
261,164

 
169,770

 
171,359

 
171,929

 
178,610

    Total interest-bearing deposits
2,522,863

 
2,466,529

 
2,452,421

 
2,448,954

 
1,923,567

  Noninterest-bearing deposits
834,363

 
892,386

 
863,118

 
924,844

 
760,614

      Total deposits
$
3,357,226

 
$
3,358,915

 
$
3,315,539

 
$
3,373,798

 
$
2,684,181



12

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

 
For the Three Months Ended
 
For the Nine Months Ended
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
 
September 30, 2018
 
September 30, 2017
Interest income:
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans and leases
$
42,103

 
$
41,689

 
$
40,689

 
$
32,245

 
$
30,892

 
$
124,481

 
$
88,517

Interest on cash and cash equivalents
64

 
64

 
53

 
37

 
36

 
181

 
137

Interest on investment securities
3,066

 
3,001

 
2,792

 
2,516

 
2,270

 
8,859

 
6,107

  Total interest income
45,233

 
44,754

 
43,534

 
34,798

 
33,198

 
133,521

 
94,761

Interest expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest on deposits
5,533

 
4,499

 
3,472

 
2,739

 
2,198

 
13,504

 
6,009

Interest on short-term borrowings
1,096

 
985

 
630

 
579

 
547

 
2,711

 
811

Interest on FHLB advances
394

 
490

 
562

 
595

 
645

 
1,446

 
2,025

Interest on jr. subordinated debentures
337

 
321

 
288

 
46

 

 
946

 

Interest on subordinated notes
1,144

 
1,143

 
1,143

 
518

 
370

 
3,430

 
1,110

Total interest expense
8,504

 
7,438

 
6,095

 
4,477

 
3,760

 
22,037

 
9,955

  Net interest income
36,729

 
37,316

 
37,439

 
30,321

 
29,438

 
111,484

 
84,806

Provision for (recovery of) loan and lease losses (the "Provision")
664

 
3,137

 
1,030

 
1,077

 
1,333

 
4,831

 
1,541

  Net interest income after Provision
36,065

 
34,179

 
36,409

 
29,244

 
28,105

 
106,653

 
83,265

Noninterest income:
 
 
 
 
 
 
 
 
 
 
 
 
 
Fees for wealth management services
10,343

 
10,658

 
10,308

 
9,974

 
9,651

 
31,309

 
28,761

Insurance commissions
1,754

 
1,902

 
1,693

 
1,510

 
1,373

 
5,349

 
3,079

Capital markets revenue
710

 
2,105

 
666

 
600

 
843

 
3,481

 
1,796

Service charges on deposits
726

 
752

 
713

 
655

 
676

 
2,191

 
1,953

Loan servicing and other fees
559

 
475

 
686

 
536

 
548

 
1,720

 
1,570

Net gain on sale of loans
631

 
528

 
518

 
493

 
799

 
1,677

 
1,948

Net gain on sale of investment securities available for sale

 

 
7

 
28

 
72

 
7

 
73

Net gain (loss) on sale of other real estate owned
5

 
111

 
176

 
(92
)
 

 
292

 
(12
)
Dividends on FHLB and FRB stocks
375

 
510

 
431

 
290

 
217

 
1,316

 
649

Other operating income
3,171

 
3,034

 
4,338

 
1,542

 
1,405

 
10,543

 
3,779

  Total noninterest income
18,274

 
20,075

 
19,536

 
15,536

 
15,584

 
57,885

 
43,596

Noninterest expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
Salaries and wages
16,528

 
16,240

 
15,982

 
13,619

 
13,602

 
48,750

 
39,632

Employee benefits
3,356

 
2,877

 
3,708

 
2,717

 
2,560

 
9,941

 
7,453

Occupancy and bank premises
2,717

 
2,697

 
3,050

 
2,648

 
2,485

 
8,464

 
7,258

Furniture, fixtures and equipment
2,070

 
2,069

 
1,898

 
1,816

 
1,726

 
6,037

 
5,569

Advertising
349

 
369

 
461

 
386

 
277

 
1,179

 
1,068

Amortization of intangible assets
891

 
889

 
879

 
677

 
677

 
2,659

 
2,057

(Recovery) impairment of mortgage servicing rights ("MSRs")
(23
)
 
(1
)
 
(50
)
 
(94
)
 
3

 
(74
)
 
49

Due diligence, merger-related and merger integration expenses
389

 
3,053

 
4,319

 
3,507

 
850

 
7,761

 
2,597

Professional fees
997

 
932

 
748

 
769

 
739

 
2,677

 
2,499

Pennsylvania bank shares tax
472

 
473

 
473

 
16

 
317

 
1,418

 
1,278

Information technology
1,155

 
1,252

 
1,195

 
1,006

 
880

 
3,602

 
2,575

Other operating expenses
4,691

 
4,986

 
3,367

 
3,989

 
4,068

 
13,044

 
11,304

  Total noninterest expense
33,592

 
35,836

 
36,030

 
31,056

 
28,184

 
105,458

 
83,339

Income before income taxes
20,747

 
18,418

 
19,915

 
13,724

 
15,505

 
59,080

 
43,522

Income tax expense
4,066

 
3,723

 
4,630

 
19,924

 
4,766

 
12,419

 
14,306

    Net income (loss)
$
16,681

 
$
14,695

 
$
15,285

 
$
(6,200
)
 
$
10,739

 
$
46,661

 
$
29,216

Net income (loss) attributable to noncontrolling interest
(1
)
 
7

 
(1
)
 

 

 
5

 

    Net income (loss) attributable to Bryn Mawr Bank Corporation
$
16,682

 
$
14,688

 
$
15,286

 
$
(6,200
)
 
$
10,739

 
$
46,656

 
$
29,216

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Per share data:
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding
20,270,706

 
20,238,852

 
20,202,969

 
17,632,697

 
17,023,046

 
20,237,757

 
16,987,499

Dilutive common shares
167,670

 
174,726

 
247,525

 
211,975

 
230,936

 
206,318

 
254,728

Weighted average diluted shares
20,438,376

 
20,413,578

 
20,450,494

 
17,844,672

 
17,253,982

 
20,444,075

 
17,242,227

Basic earnings (loss) per common share
$
0.82

 
$
0.73

 
$
0.76

 
$
(0.35
)
 
$
0.63

 
$
2.31

 
$
1.72

Diluted earnings (loss) per common share
$
0.82

 
$
0.72

 
$
0.75

 
$
(0.35
)
 
$
0.62

 
$
2.28

 
$
1.69

Dividends paid or accrued per share
$
0.25

 
$
0.22

 
$
0.22

 
$
0.22

 
$
0.22

 
$
0.69

 
$
0.64

Effective tax rate
19.60
%
 
20.21
%
 
23.25
%
 
145.18
%
 
30.74
%
 
21.02
%
 
32.87
%

13

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

 
For the Three Months Ended
 
For the Nine Months Ended
 
September 30, 2018
June 30, 2018
March 31, 2018
December 31, 2017
September 30, 2017
 
September 30, 2018
September 30, 2017
(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
$
37,467

$
64

0.68
%
$
37,215

$
64

0.69
%
$
38,044

$
53

0.56
%
$
43,962

$
37

0.33
%
$
26,628

$
36

0.54
%
 
$
37,573

$
181

0.64
%
$
30,807

$
137

0.59
%
Investment securities - available for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
514,360

2,960

2.28
%
514,966

2,888

2.25
%
498,718

2,675

2.18
%
465,393

2,394

2.04
%
427,106

2,160

2.01
%
 
509,405

8,523

2.24
%
391,082

5,753

1.97
%
Tax-exempt
16,056

83

2.05
%
18,215

93

2.05
%
20,501

100

1.98
%
22,640

127

2.23
%
25,268

134

2.10
%
 
18,241

276

2.02
%
28,552

448

2.10
%
Total investment securities - available for sale
530,416

3,043

2.28
%
533,181

2,981

2.24
%
519,219

2,775

2.17
%
488,033

2,521

2.05
%
452,374

2,294

2.01
%
 
527,646

8,799

2.23
%
419,634

6,201

1.98
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment securities - held to maturity
8,378

5

0.24
%
7,866

13

0.66
%
7,913

12

0.62
%
7,510

11

0.58
%
6,044

11

0.72
%
 
8,054

30

0.50
%
4,984

23

0.62
%
Investment securities - trading
8,204

30

1.45
%
8,202

22

1.08
%
8,339

21

1.02
%
4,425

25

2.24
%
4,282

8

0.74
%
 
8,248

73

1.18
%
4,105

29

0.94
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans and leases *
3,379,699

42,214

4.96
%
3,353,339

41,782

5.00
%
3,291,212

40,754

5.02
%
2,805,255

32,403

4.58
%
2,680,317

31,058

4.60
%
 
3,341,741

124,750

4.99
%
2,617,658

88,989

4.55
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total interest-earning assets
3,964,164

45,356

4.54
%
3,939,803

44,862

4.57
%
3,864,727

43,615

4.58
%
3,349,185

34,997

4.15
%
3,169,645

33,407

4.18
%
 
3,923,262

133,833

4.56
%
3,077,188

95,379

4.14
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
7,587

 
 
7,153

 
 
10,698

 
 
6,855

 
 
15,709

 
 
 
8,468

 
 
15,462

 
 
Less: allowance for loan and lease losses
(19,467
)
 
 
(18,043
)
 
 
(17,628
)
 
 
(17,046
)
 
 
(16,564
)
 
 
 
(18,386
)
 
 
(17,227
)
 
 
Other assets
423,864

 
 
415,628

 
 
388,383

 
 
301,673

 
 
273,116

 
 
 
418,261

 
 
265,061

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
4,376,148

 
 
$
4,344,541

 
 
$
4,246,180

 
 
$
3,640,667

 
 
$
3,441,906

 
 
 
$
4,331,605

 
 
$
3,340,484

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Savings, NOW and market rate deposits
$
1,695,214

$
2,425

0.57
%
$
1,722,328

$
2,073

0.48
%
$
1,676,733

$
1,479

0.36
%
$
1,410,461

$
897

0.25
%
$
1,359,293

$
823

0.24
%
 
$
1,719,004

$
5,977

0.46
%
$
1,374,494

$
2,392

0.23
%
Wholesale deposits
256,347

1,329

2.06
%
233,714

973

1.67
%
231,289

733

1.29
%
262,643

822

1.24
%
190,849

548

1.14
%
 
221,073

3,035

1.84
%
163,086

1,243

1.02
%
Retail time deposits
541,652

1,779

1.30
%
533,254

1,453

1.09
%
527,469

1,260

0.97
%
358,066

1,020

1.13
%
321,352

827

1.02
%
 
534,177

4,492

1.12
%
321,608

2,374

0.99
%
Total interest-bearing deposits
2,493,213

5,533

0.88
%
2,489,296

4,499

0.72
%
2,435,491

3,472

0.58
%
2,031,170

2,739

0.53
%
1,871,494

2,198

0.47
%
 
2,474,254

13,504

0.73
%
1,859,188

6,009

0.43
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Borrowings:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Short-term borrowings
208,201

1,096

2.09
%
205,323

985

1.92
%
172,534

630

1.48
%
180,650

579

1.27
%
182,845

547

1.19
%
 
195,483

2,711

1.85
%
110,268

811

0.98
%
Long-term FHLB advances
81,460

394

1.92
%
102,023

490

1.93
%
123,920

562

1.84
%
134,605

595

1.75
%
155,918

645

1.64
%
 
102,312

1,446

1.89
%
169,900

2,025

1.59
%
Subordinated notes
98,457

1,144

4.61
%
98,463

1,143

4.66
%
98,430

1,143

4.71
%
43,844

518

4.69
%
29,564

370

 
 
98,450

3,430

4.66
%
29,550

1,110

5.02
%
Jr. subordinated debt
21,511

337

6.22
%
21,470

321

6.00
%
21,430

288

5.45
%
3,957

46

4.61
%




 
21,470

946

5.89
%


%
Total borrowings
409,629

2,971

2.88
%
427,279

2,939

2.76
%
416,314

2,623

2.56
%
363,056

1,738

1.90
%
368,327

1,562

1.68
%
 
417,715

8,533

2.73
%
309,718

3,946

1.70
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total interest-bearing liabilities
2,902,842

8,504

1.16
%
2,916,575

7,438

1.02
%
2,851,805

6,095

0.87
%
2,394,226

4,477

0.74
%
2,239,821

3,760

0.67
%
 
2,891,969

22,037

1.02
%
2,168,906

9,955

0.61
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing deposits
866,314

 
 
841,676

 
 
835,476

 
 
771,519

 
 
764,562

 
 
 
849,247

 
 
744,178

 
 
Other liabilities
59,085

 
 
52,389

 
 
32,465

 
 
47,604

 
 
40,166

 
 
 
53,763

 
 
37,582

 
 
Total noninterest-bearing liabilities
925,399

 
 
894,065

 
 
867,941

 
 
819,123

 
 
804,728

 
 
 
903,010

 
 
781,760

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total liabilities
3,828,241

 
 
3,810,640

 
 
3,719,746

 
 
3,213,349

 
 
3,044,549

 
 
 
3,794,979

 
 
2,950,666

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shareholders' equity
547,907

 
 
533,901

 
 
526,434

 
 
427,318

 
 
397,357

 
 
 
536,626

 
 
389,818

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total liabilities and shareholders' equity
$
4,376,148

 
 
$
4,344,541

 
 
$
4,246,180

 
 
$
3,640,667

 
 
$
3,441,906

 
 
 
$
4,331,605

 
 
$
3,340,484

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest spread
 
 
3.38
%
 
 
3.55
%
 
 
3.71
%
 
 
3.41
%
 
 
3.51
%
 
 
 
3.54
%
 
 
3.53
%
Effect of noninterest-bearing sources
 
 
0.31
%
 
 
0.26
%
 
 
0.23
%
 
 
0.21
%
 
 
0.20
%
 
 
 
0.27
%
 
 
0.18
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tax-equivalent net interest margin
 
$
36,852

3.69
%
 
$
37,424

3.81
%
 
$
37,520

3.94
%
 
$
30,520

3.62
%
 
$
29,647

3.71
%
 
 
$
111,796

3.81
%
 
$
85,424

3.71
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tax-equivalent adjustment
 
$
123

0.01
%
 
$
108

0.01
%
 
$
81

0.01
%
 
$
199

0.02
%
 
$
209

0.03
%
 
 
$
312

0.01
%
 
$
618

0.03
%
* 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 Nine Months Ended
 
September 30, 2018
June 30, 2018
March 31, 2018
December 31, 2017
September 30, 2017
 
September 30, 2018
September 30, 2017
(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
$
1,464

0.17
 %
 
$
1,945

0.23
 %
 
$
2,702

0.33
 %
 
$
276

0.04
 %
 
$
708

0.10
 %
 
 
$
6,111

0.24
 %
 
$
1,836

0.09
 %
Retail time deposits
Expense
(311
)
(0.23
)%
 
(339
)
(0.25
)%
 
(380
)
(0.29
)%
 
(13
)
(0.01
)%
 
(15
)
(0.02
)%
 
 
(1,030
)
(0.26
)%
 
(52
)
(0.02
)%
Long-term FHLB advances
Expense
32

0.16
 %
 
25

0.10
 %
 
15

0.05
 %
 
(31
)
(0.09
)%
 
(30
)
(0.08
)%
 
 
72

0.09
 %
 

 %
Jr. subordinated debt
Expense
41

0.76
 %
 
41

0.77
 %
 
40

0.76
 %
 

 %
 

 %
 
 
122

0.76
 %
 
(91
)
(0.07
)%
Net interest income from fair value marks
 
$
1,702

 
 
$
2,218

 
 
$
3,027

 
 
$
320

 
 
$
753

 
 
 
$
6,947

 
 
$
1,979

 
Purchase accounting effect on tax-equivalent margin
 
 
0.17
 %
 
 
0.23
 %
 
 
0.32
 %
 
 
0.04
 %
 
 
0.09
 %
 
 
 
0.24
 %
 
 
0.09
 %


14

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 Nine Months Ended
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
 
September 30, 2018
 
September 30, 2017
Reconciliation of Net Income to Net Income (core):
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) attributable to BMBC (a GAAP measure)
$
16,682

 
$
14,688

 
$
15,286

 
$
(6,200
)
 
$
10,739

 
$
46,656

 
$
29,216

Less: Tax-effected non-core noninterest income:
 
 
 
 
 
 
 
 
 
 
 
 
 
(Gain) loss on sale of investment securities available for sale

 

 
(6
)
 
(18
)
 
(47
)
 
(6
)
 
(47
)
Add: Tax-effected non-core noninterest expense items:
 
 
 
 
 
 
 
 
 
 
 
 
 
Due diligence, merger-related and merger integration expenses
307

 
2,412

 
3,412

 
2,280

 
553

 
6,131

 
1,688

Add: Federal income tax expense related to re-measurement of net deferred tax asset due to tax reform legislation
151

 
(69
)
 
590

 
15,193

 

 
672

 

Net income (core) (a non-GAAP measure)
$
17,140

 
$
17,031

 
$
19,282

 
$
11,255

 
$
11,245

 
$
53,453

 
$
30,857

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Calculation of Basic and Diluted Earnings per Common Share (core):
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding
20,270,706

 
20,238,852

 
20,202,969

 
17,632,697

 
17,023,046

 
20,237,757

 
16,987,499

Dilutive common shares
167,670

 
174,726

 
247,525

 
211,975

 
230,936

 
206,318

 
254,728

Weighted average diluted shares
20,438,376

 
20,413,578

 
20,450,494

 
17,844,672

 
17,253,982

 
20,444,075

 
17,242,227

Basic earnings per common share (core) (a non-GAAP measure)
$
0.85

 
$
0.84

 
$
0.95

 
$
0.64

 
$
0.66

 
$
2.64

 
$
1.82

Diluted earnings per common share (core) (a non-GAAP measure)
$
0.84

 
$
0.83

 
$
0.94

 
$
0.63

 
$
0.65

 
$
2.61

 
$
1.79

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Calculation of Return on Average Tangible Equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) attributable to BMBC (a GAAP measure)
$
16,682

 
$
14,688

 
$
15,286

 
$
(6,200
)
 
$
10,739

 
$
46,656

 
$
29,216

Add: Tax-effected amortization and impairment of intangible assets
705

 
702

 
694

 
440

 
440

 
2,101

 
1,337

Net tangible income (numerator)
$
17,387

 
$
15,390

 
$
15,980

 
$
(5,760
)
 
$
11,179

 
$
48,757

 
$
30,553

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average shareholders' equity
$
547,907

 
$
533,901

 
$
526,434

 
$
427,318

 
$
397,357

 
$
536,626

 
$
389,818

Less: Average Noncontrolling interest
678

 
685

 
683

 
126

 

 
684

 

Less: Average goodwill and intangible assets
(207,880
)
 
(208,039
)
 
(205,529
)
 
(142,652
)
 
(128,917
)
 
(207,158
)
 
(126,794
)
Net average tangible equity (denominator)
$
340,705

 
$
326,547

 
$
321,588

 
$
284,792

 
$
268,440

 
$
330,152

 
$
263,024

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on tangible equity (a non-GAAP measure)
20.25
%
 
18.90
%
 
20.15
%
 
(8.02
)%
 
16.52
%
 
19.74
%
 
15.53
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Calculation of Return on Average Tangible Equity (core):
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (core) (a non-GAAP measure)
$
17,140

 
$
17,031

 
$
19,282

 
$
11,255

 
$
11,245

 
$
53,453

 
$
30,857

Add: Tax-effected amortization and impairment of intangible assets
705

 
702

 
694

 
440

 
440

 
2,101

 
1,337

Net tangible income (core) (numerator)
$
17,845

 
$
17,733

 
$
19,976

 
$
11,695

 
$
11,685

 
$
55,554

 
$
32,194

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average shareholders' equity
$
547,907

 
$
533,901

 
$
526,434

 
$
427,318

 
$
397,357

 
$
536,626

 
$
389,818

Less: Average Noncontrolling interest
678

 
685

 
683

 
126

 

 
684

 

Less: Average goodwill and intangible assets
(207,880
)
 
(208,039
)
 
(205,529
)
 
(142,652
)
 
(128,917
)
 
(207,158
)
 
(126,794
)
Net average tangible equity (denominator)
$
340,705

 
$
326,547

 
$
321,588

 
$
284,792

 
$
268,440

 
$
330,152

 
$
263,024

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on tangible equity (core) (a non-GAAP measure)
20.78
%
 
21.78
%
 
25.19
%
 
16.29
 %
 
17.27
%
 
22.50
%
 
16.36
%

15

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 Nine Months Ended
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
 
September 30, 2018
 
September 30, 2017
Calculation of Tangible Equity Ratio (BMBC):
 
 
 
 
 
 
 
 
 
 
 
 
 
Total shareholders' equity
$
551,425

 
$
542,503

 
$
533,061

 
$
528,119

 
$
401,892

 
 
 
 
Less: Noncontrolling interest
678

 
677

 
684

 
683

 

 
 
 
 
Less: Goodwill and intangible assets
(208,165
)
 
(208,139
)
 
(207,287
)
 
(205,855
)
 
(128,534
)
 
 
 
 
Net tangible equity (numerator)
$
343,938

 
$
335,041

 
$
326,458

 
$
322,947

 
$
273,358

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
4,388,442

 
$
4,394,203

 
$
4,300,376

 
$
4,449,720

 
$
3,476,821

 
 
 
 
Less: Goodwill and intangible assets
(208,165
)
 
(208,139
)
 
(207,287
)
 
(205,855
)
 
(128,534
)
 
 
 
 
Tangible assets (denominator)
$
4,180,277

 
$
4,186,064

 
$
4,093,089

 
$
4,243,865

 
$
3,348,287

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tangible equity ratio (BMBC)(1)
8.23
%
 
8.00
%
 
7.98
%
 
7.61
 %
 
8.16
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Calculation of Tangible Equity Ratio (BMTC):
 
 
 
 
 
 
 
 
 
 
 
 
 
Total shareholders' equity
$
582,698

 
$
582,354

 
$
569,670

 
$
559,581

 
$
398,431

 
 
 
 
Less: Noncontrolling interest
678

 
677

 
684

 
683

 

 
 
 
 
Less: Goodwill and intangible assets
(195,337
)
 
(195,245
)
 
(194,316
)
 
(192,807
)
 
(115,410
)
 
 
 
 
Net tangible equity (numerator)
$
388,039

 
$
387,786

 
$
376,038

 
$
367,457

 
$
283,021

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
4,372,590

 
$
4,378,508

 
$
4,284,334

 
$
4,430,528

 
$
3,459,996

 
 
 
 
Less: Goodwill and intangible assets
(195,337
)
 
(195,245
)
 
(194,316
)
 
(192,807
)
 
(115,410
)
 
 
 
 
Tangible assets (denominator)
$
4,177,253

 
$
4,183,263

 
$
4,090,018

 
$
4,237,721

 
$
3,344,586

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tangible equity ratio (BMTC)(1)
9.29
%
 
9.27
%
 
9.19
%
 
8.67
 %
 
8.46
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Calculation of Return on Average Assets (core)
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets (GAAP)
1.51
%
 
1.36
%
 
1.46
%
 
(0.68
)%
 
1.24
%
 
1.44
%
 
1.17
%
Effect of adjustment to GAAP net income to core net income
0.04
%
 
0.21
%
 
0.38
%
 
1.91
 %
 
0.06
%
 
0.21
%
 
0.07
%
Return on average assets (core)
1.55
%
 
1.57
%
 
1.84
%
 
1.23
 %
 
1.30
%
 
1.65
%
 
1.24
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Calculation of Return on Average Equity (core)
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average equity (GAAP)
12.08
%
 
11.03
%
 
11.78
%
 
(5.76
)%
 
10.72
%
 
11.62
%
 
10.02
%
Effect of adjustment to GAAP net income to core net income
0.33
%
 
1.76
%
 
3.07
%
 
16.21
 %
 
0.51
%
 
1.70
%
 
0.56
%
Return on average equity (core)
12.41
%
 
12.79
%
 
14.85
%
 
10.45
 %
 
11.23
%
 
13.32
%
 
10.58
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Calculation of Tax-equivalent net interest margin adjusting for the impact of purchase accounting
 
 
 
 
 
 
 
 
 
 
 
 
 
Tax-equivalent net interest margin
3.69
%
 
3.81
%
 
3.94
%
 
3.62
 %
 
3.71
%
 
3.81
%
 
3.71
%
Effect of fair value marks
0.17
%
 
0.23
%
 
0.32
%
 
0.04
 %
 
0.09
%
 
0.24
%
 
0.09
%
Tax-equivalent net interest margin adjusting for the impact of purchase accounting
3.52
%
 
3.58
%
 
3.62
%
 
3.58
 %
 
3.62
%
 
3.57
%
 
3.62
%
(1)
Capital Ratios for the current quarter are to be considered preliminary until the Call Reports are filed.

16

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 Nine Months Ended
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
 
September 30, 2018
 
September 30, 2017
Calculation of Efficiency Ratio:
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest expense
$
33,592

 
$
35,836

 
$
36,030

 
$
31,056

 
$
28,184

 
$
105,458

 
$
83,339

Less: certain noninterest expense items*:
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of intangibles
(891
)
 
(889
)
 
(879
)
 
(677
)
 
(677
)
 
(2,659
)
 
(2,057
)
Due diligence, merger-related and merger integration expenses
(389
)
 
(3,053
)
 
(4,319
)
 
(3,507
)
 
(850
)
 
(7,761
)
 
(2,597
)
Noninterest expense (adjusted) (numerator)
$
32,312

 
$
31,894

 
$
30,832

 
$
26,872

 
$
26,657

 
$
95,038

 
$
78,685

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest income
$
18,274

 
$
20,075

 
$
19,536

 
$
15,536

 
$
15,584

 
$
57,885

 
$
43,596

Less: non-core noninterest income items:
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss (gain) on sale of investment securities available for sale

 

 
(7
)
 
(28
)
 
(72
)
 
(7
)
 
(73
)
Noninterest income (core)
$
18,274

 
$
20,075

 
$
19,529

 
$
15,508

 
$
15,512

 
$
57,878

 
$
43,523

Net interest income
36,729

 
37,316

 
37,439

 
30,321

 
29,438

 
111,484

 
84,806

Noninterest income (core) and net interest income (denominator)
$
55,003

 
$
57,391

 
$
56,968

 
$
45,829

 
$
44,950

 
$
169,362

 
$
128,329

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Efficiency ratio
58.75
%
 
55.57
%
 
54.12
%
 
58.64
%
 
59.30
%
 
56.12
%
 
61.32
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Supplemental Loan and Allowance Information Used to Calculate Non-GAAP Measures
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Allowance
$
18,684

 
$
19,398

 
$
17,662

 
$
17,525

 
$
17,004

 
 
 
 
Less: Allowance on acquired loans
72

 
217

 
92

 
50

 
47

 
 
 
 
Allowance on originated loans and leases
$
18,612

 
$
19,181

 
$
17,570

 
$
17,475

 
$
16,957

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Allowance
$
18,684

 
$
19,398

 
$
17,662

 
$
17,525

 
$
17,004

 
 
 
 
Loan mark on acquired loans
24,964

 
26,705

 
32,260

 
34,790

 
10,223

 
 
 
 
Total Allowance + Loan mark
$
43,648

 
$
46,103

 
$
49,922

 
$
52,315

 
$
27,227

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Portfolio loans and leases
$
3,381,475

 
$
3,389,501

 
$
3,305,795

 
$
3,285,858

 
$
2,677,345

 
 
 
 
Less: Originated loans and leases
2,752,160

 
2,700,815

 
2,564,827

 
2,487,296

 
2,433,054

 
 
 
 
Net acquired loans
$
629,315

 
$
688,686

 
$
740,968

 
$
798,562

 
$
244,291

 
 
 
 
Add: Loan mark on acquired loans
24,964

 
26,705

 
32,260

 
34,790

 
10,223

 
 
 
 
Gross acquired loans (excludes loan mark)
$
654,279

 
$
715,391

 
$
773,228

 
$
833,352

 
$
254,514

 
 
 
 
Originated loans and leases
2,752,160

 
2,700,815

 
2,564,827

 
2,487,296

 
2,433,054

 
 
 
 
Total Gross portfolio loans and leases
$
3,406,439

 
$
3,416,206

 
$
3,338,055

 
$
3,320,648

 
$
2,687,568

 
 
 
 
*
In calculating the Corporation's efficiency ratio, which is used by Management to identify the cost of generating each dollar of core revenue, certain non-core income and expense items as well as the amortization of intangible assets, are excluded.

17