BRYN MAWR, Pa., Jan. 17, 2019 (GLOBE NEWSWIRE) -- Bryn Mawr Bank Corporation (NASDAQ: BMTC) (the “Corporation”), parent of The Bryn Mawr Trust Company (the “Bank”) today reported net income of $17.1 million, or $0.84 diluted earnings per share for the three months ended December 31, 2018, as compared to net income of $16.7 million, or $0.82 diluted earnings per share, for the three months ended September 30, 2018, and a net loss of $6.2 million, or ($0.35) diluted earnings per share, for the three months ended December 31, 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 $17.2 million, or $0.84 diluted earnings per share, for the three months ended December 31, 2018, as compared to $17.1 million, or $0.84 diluted earnings per share, for the three months ended September 30, 2018, and $11.3 million, or $0.63 diluted earnings per share, for the three months ended December 31, 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 were pleased to conclude 2018 on a positive note, with fourth quarter and annual net income reaching all-time highs,” commented Frank Leto, President and Chief Executive Officer, continuing, “Contributions from our Royal Bank acquisition, continued momentum in our wealth division and capital markets area, and solid organic growth are reflected in our year-end results. During 2018 and early 2019 we have welcomed several key additions to our senior leadership team. The depth of knowledge and innovative ideas these new team members bring to BMT will enhance our customer experience, bring greater efficiencies to existing business processes and have us well positioned to execute our strategy as we enter 2019.”

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

SIGNIFICANT ITEMS OF NOTE

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

  • Net income for the three months ended December 31, 2018 was $17.1 million, as compared to net income of $16.7 million for the three months ended September 30, 2018. Net interest income for the three months ended December 31, 2018 was $38.0 million, an increase of $1.3 million over the linked quarter. The provision for loan and lease losses (the “Provision”) for the three months ended December 31, 2018 increased $1.7 million as compared to the third quarter of 2018. Total noninterest income decreased $177 thousand, total noninterest expense increased $1.3 million, and income tax expense decreased $2.3 million for the three months ended December 31, 2018, as compared to the three months ended September 30, 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 $17.2 million, or $0.84 per diluted share, for the three months ended December 31, 2018, as compared to $17.1 million or $0.84 per diluted share, for the three months ended September 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 December 31, 2018 was $38.0 million, an increase of $1.3 million over the linked quarter. Items contributing to the increase included increases of $2.1 million and $228 thousand in interest and fees on loans and leases and interest on investment securities, respectively, and a decrease of $415 thousand in interest expense on short-term borrowings, partially offset by a $1.5 million increase in interest on deposits for the three months ended December 31, 2018 as compared to the linked quarter ended September 30, 2018.

  • Tax-equivalent net interest income for the three months ended December 31, 2018 was $38.1 million, an increase of $1.3 million over the linked quarter. Tax-equivalent net interest income for the fourth quarter 2018 was positively impacted by the accretion of purchase accounting fair value marks of $2.7 million as compared to $1.7 million for the linked quarter. Excluding the effects of these purchase accounting fair value marks, the adjusted tax-equivalent net interest income for the three months ended December 31, 2018 was $35.4 million, an increase of $269 thousand over the linked quarter.

    Tax-equivalent interest and fees on loans and leases for the three months ended December 31, 2018 increased $2.1 million over the linked quarter. Average loans and leases for the three months ended December 31, 2018 increased $19.8 million over the linked quarter and experienced a 21 basis point increase in tax-equivalent yield.

    Tax-equivalent interest income on available for sale investment securities increased $156 thousand for the fourth quarter of 2018 as compared to the linked quarter. Average available for sale investment securities increased by $6.9 million over the linked quarter and experienced an eight basis point tax-equivalent yield increase.

    Interest expense on deposits for the three months ended December 31, 2018 increased $1.5 million over the linked quarter. Average interest-bearing deposits increased $109.2 million coupled with a 19 basis point increase in the rate paid on deposits as compared to the linked quarter.

    Interest expense on short-term borrowings for the three months ended December 31, 2018 decreased $415 thousand over the linked quarter primarily due to a $79.8 million decrease in average short-term borrowings for the three months ended December 31, 2018 as compared to the linked quarter.

  • The tax-equivalent net interest margin was 3.79% for the three months ended December 31, 2018 as compared to 3.69% 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 3.52% for both the three months ended December 31, 2018 and the linked quarter.

  • Noninterest income of $18.1 million for the three months ended December 31, 2018 decreased $177 thousand as compared to the linked quarter. Contributing to the decrease was a decrease in other operating income of $2.2 million partially offset by increases of $975 thousand, $674 thousand, and $657 thousand in net gain on sale of loans, fees for wealth management services and capital markets revenue, respectively. The $2.2 million decrease in other operating income was primarily due to an $859 thousand loss on trading securities recorded in the fourth quarter of 2018 due to market fluctuations affecting the Corporation's executive and director supplemental retirement plan assets. Recoveries of purchase accounting fair value marks resulting from pay-offs of previously acquired credit impaired loans decreased $1.1 million over the linked quarter.

  • Noninterest expense of $34.8 million for the three months ended December 31, 2018 increased $1.2 million as compared to $33.6 million for the third quarter of 2018. The increase on a linked quarter basis was primarily due to increases of $1.4 million, $529 thousand, $418 thousand, and $300 thousand in salaries and wages, professional fees, occupancy and bank premises expenses and furniture, fixtures and equipment expense, respectively, partially offset by decreases of $1.1 million, $389 thousand, and $379 thousand in other operating expenses, due diligence, merger-related and merger integration expenses and employee benefits, respectively. The linked quarter increase in salaries and wages expense was largely driven by recruiting efforts of certain key leadership positions and increases in our incentive accruals which, combined, approximated $1.3 million for the fourth quarter of 2018.

  • The Provision increased $1.7 million for the three months ended December 31, 2018 to $2.4 million, as compared the third quarter of 2018. During the third quarter of 2018, the effect of sustained improving qualitative factors associated with the economy resulted in a decrease in the needed allowance for loan and leases losses (the “Allowance”) and reduced the Provision recorded in the third quarter of 2018. During the fourth quarter of 2018, the additional Allowance was primarily associated with the increased loan volume. Net loan and lease charge-offs for the fourth quarter of 2018 totaled $1.6 million, as compared to $1.4 million for the third quarter of 2018. Nonperforming loans and leases as of December 31, 2018 totaled $12.8 million, an increase of $3.8 million from September 30, 2018. The increase in nonperforming loans was comprised primarily of real estate collateralized loans for which management performs an impairment analysis. All nonperforming loans are carried at their net realizable value.

  • The effective tax rate for the fourth quarter of 2018 decreased to 9.3% from 19.6% for the third quarter of 2018. The decrease in the effective tax rate was primarily due to a $2.6 million tax benefit recorded in the fourth quarter of 2018 for certain discrete items included on our 2017 tax return that was filed during the fourth quarter of 2018. The effective tax rate for the year ended December 31, 2018 excluding discrete income tax benefits was 21.7%.

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

  • Net income for the three months ended December 31, 2018 was $17.1 million, or $0.84 diluted earnings per share, as compared to a net loss of $6.2 million, or diluted earnings per share of ($0.35) for the same period in 2017. The $23.3 million increase was primarily due to an $18.2 million decrease in income tax expense. Contributing to the decrease in income tax expense was the absence of the $15.2 million one-time income tax charge related to the re-measurement of the Corporation’s net deferred tax asset, triggered by Tax Reform, during the fourth quarter of 2017, and a $2.6 million tax benefit recorded in the fourth quarter of 2018 for certain discrete items included on our 2017 tax return that was filed during the fourth quarter of 2018.

    Also contributing to the net income increase were increases of $6.4 million and $2.6 million in net interest income after Provision and noninterest income, respectively, partially offset by a $3.8 million increase in noninterest expense.

    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 $17.2 million, or $0.84 per diluted share, for the three months ended December 31, 2018 as compared to $11.3 million, or $0.63 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.

  • Net interest income for the three months ended December 31, 2018 was $38.0 million, an increase of $7.7 million as compared to the same period in 2017. Items contributing to the increase included increases of $11.9 million and $778 thousand in interest and fees on loans and leases and interest on investment securities, respectively, partially offset by increases of $4.3 million and $627 thousand in interest on deposits and interest on subordinated notes for the three months ended December 31, 2018 as compared to the same period in 2017.

  • Tax-equivalent net interest income for the three months ended December 31, 2018 was $38.1 million, an increase of $7.6 million as compared to the same period in 2017. Tax-equivalent net interest income for the fourth quarter 2018 was positively impacted by the accretion of purchase accounting fair value marks of $2.7 million as compared to $320 thousand for the same period in 2017. Excluding the effects of these purchase accounting fair value marks, the adjusted tax-equivalent net interest income for the three months ended December 31, 2018 was $35.4 million, an increase of $5.2 million as compared to the same period in 2017.

    Tax-equivalent interest and fees on loans and leases increased $11.9 million for the three months ended December 31, 2018 as compared to the same period in 2017. Average loans and leases for the fourth quarter of 2018 increased $594.2 million from the same period in 2017 and experienced a 59 basis point increase in tax-equivalent yield. The increase in average loans and leases was primarily related to the loans and leases acquired in the merger with Royal Bancshares of Pennsylvania, Inc. (the “Royal Bank merger”) in December 2017 which initially increased loans and leases by $566.2 million, as well as organic loan growth between the periods.

    Average available for sale investment securities increased by $49.3 million for the three months ended December 31, 2018 as compared to the same period in 2017 and experienced a 31 basis point tax-equivalent yield increase. The increase in average balances and yield on available for sale investment securities resulted in a $678 thousand increase in tax-equivalent interest income on available for sale investment securities for the fourth 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 $4.3 million increase in interest expense on deposits for the three months ended December 31, 2018 as compared to the same period in 2017. Average interest-bearing deposits increased by $571.2 million, coupled with a 54 basis point increase in rate paid for the fourth quarter of 2018 as compared to the same period in 2017. The increase in average interest-bearing deposits for the fourth 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.

    In addition to the increased interest expense on deposits, interest expense on subordinated debt and junior subordinated debt increased $627 thousand and $296 thousand, respectively, for the three months ended December 31, 2018 as compared to the same period in 2017. Average subordinated notes for the three months ended December 31, 2018 increased $54.7 million as compared to the same period in 2017 with the rate paid decreasing by eight basis points to 4.61% for the three months ended December 31, 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 December 31, 2018 increased $17.6 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 6.30% rate, in the Royal Bank merger.

  • The tax-equivalent net interest margin was 3.79% for the three months ended December 31, 2018 as compared to 3.62% 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 3.58% for three months ended December 31, 2018 and 2017, respectively.

  • Noninterest income of $18.1 million for the three months ended December 31, 2018 increased by $2.6 million as compared to the same period in 2017. Contributing to this increase were increases of $1.1 million, $1.0 million, and $767 thousand in net gain on sale of loans, fees for wealth management services and capital markets revenue, respectively. The increase in fees for wealth management services related to the $460.8 million increase in wealth assets under management, administration, supervision and brokerage between December 31, 2018 and December 31, 2017. Partially offsetting the increase in noninterest income was a decrease of $539 thousand in other operating income which was primarily due to an $859 thousand loss on trading securities recorded in the fourth quarter of 2018 due to market fluctuations affecting the Corporation's executive and director supplemental retirement plan assets.

  • Noninterest expense of $34.8 million for the three months ended December 31, 2018 increased $3.8 million as compared to the same period in 2017. Contributing to the $3.8 million increase were increases of $4.3 million, $757 thousand, $554 thousand, and $487 thousand in salaries and wages, professional fees, furniture, fixtures and equipment expense 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 were decreases of $3.5 million and $425 thousand in due diligence, merger-related and merger integration expenses and other operating expenses, respectively, for the three months ended December 31, 2018 as compared to the same period in 2017.

  • The Provision increased $1.3 million for the three months ended December 31, 2018 to $2.4 million, as compared the same period in 2017. The primary contributors to the increased Provision were the $1.1 million increase in charge-offs for the fourth quarter of 2018 as compared to the same period in 2017 as well as the additional Allowance associated with the increased loan volume. Net loan and lease charge-offs for the fourth quarter of 2018 were $1.6 million as compared to $556 thousand for the same period in 2017. Nonperforming loans and leases as of December 31, 2018 totaled $12.8 million, an increase of $4.2 million from December 31, 2017. The increase in nonperforming loans was comprised primarily of real estate collateralized loans for which management performs an impairment analysis. All nonperforming loans are carried at their net realizable value.

  • The effective tax rate for the fourth quarter of 2018 decreased significantly as compared to the fourth quarter of 2017. The decrease in effective tax rate was primarily related to the $15.2 million one-time income tax charge related to the re-measurement of the Corporation’s net deferred tax asset, triggered by Tax Reform, during the fourth quarter of 2017, and a $2.6 million tax benefit recorded in the fourth quarter of 2018 for certain discrete items included on our 2017 tax return that was filed during the fourth quarter of 2018. The effective tax rates for the years-ended December 31, 2018 and 2017 excluding discrete income tax benefits were 21.7% and 35.1%, respectively.

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

  • Total assets as of December 31, 2018 were $4.65 billion, an increase of $202.8 million from December 31, 2017. The increase is primarily due to the increases in portfolio loans and leases and available for sale investment securities discussed in the bullet points below.

  • Available for sale investment securities as of December 31, 2018 totaled $737.4 million, an increase of $48.2 million from December 31, 2017. Increases of $44.8 million, $14.9 million, and $2.6 million in U.S. government and agency securities, mortgage-backed securities, and collateralized mortgage obligations, respectively, were partially offset by decreases of $10.0 million and $3.5 million in state & political subdivision securities and other investments, respectively.

  • Total portfolio loans and leases of $3.43 billion as of December 31, 2018 increased by $141.3 million from December 31, 2017, an increase of 4.3%. Increases of $134.1 million, $35.5 million, $29.1 million and $8.7 million in commercial mortgages, residential mortgages, leases and consumer loans, respectively, were offset by decreases of $31.4 million, $23.7 million and $10.9 million in construction loans, commercial and industrial loans and home equity loans and lines, respectively.

  • The Allowance as of December 31, 2018 was $19.4 million, or 0.57% 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 for originated loans and leases as a percentage of originated loans and leases, which was 0.67% as of December 31, 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 1.08% as of December 31, 2018, as compared to 1.58% as of December 31, 2017. The 50 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 $17.8 million as of December 31, 2018 coupled with the increase in portfolio loans between the respective dates. The decrease in the remaining loan mark was primarily attributable to normal amortization and accelerated amortization related to pre-payments. A reconciliation of these and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release.

  • Deposits of $3.60 billion as of December 31, 2018 increased $225.3 million from December 31, 2017. Increases of $183.4 million, $153.3 million, and $10.5 million in interest-bearing demand accounts, wholesale time deposits, and retail time deposits, respectively, were partially offset by decreases of $91.5 million, $23.2 million, and $7.2 million in savings accounts, noninterest-bearing demand accounts, and wholesale non-maturity deposits, respectively.

  • Borrowings of $427.8 million as of December 31, 2018, which include short-term borrowings, long-term FHLB advances, subordinated notes and junior subordinated debentures, decreased $69.0 million from December 31, 2017. The decrease was comprised of an $83.8 million decrease in long-term FHLB advances, partially offset by a $14.5 million increase in short-term borrowings.

  • Wealth assets under management, administration, supervision and brokerage totaled $13.43 billion as of December 31, 2018, an increase of $460.8 million from December 31, 2017.

  • The capital ratios for the Bank and the Corporation, as of December 31, 2018, as shown in the attached tables, indicate levels above the regulatory minimum to be considered “well capitalized.”

  • During 2018, in accordance with the 2015 Stock Repurchase Plan, 149,284 shares of the Corporation’s common stock were repurchased at an average price of $39.76.  All share repurchases were accomplished in open market transactions.

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

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

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

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

 As of or For the Three Months Ended For the Twelve Months Ended
 December 31,
2018
 September 30,
2018
 June 30,
2018
 March 31,
2018
 December 31,
2017
 December 31,
2018
 December 31,
2017
Consolidated Balance Sheet (selected items)             
Interest-bearing deposits with banks$34,357  $35,233  $39,924  $24,589  $48,367     
Investment securities753,628  545,320  547,088  550,199  701,744     
Loans held for sale1,749  4,111  4,204  5,522  3,794     
Portfolio loans and leases3,427,154  3,381,475  3,389,501  3,305,795  3,285,858     
Allowance for loan and lease losses ("ALLL")(19,426) (18,684) (19,398) (17,662) (17,525)    
Goodwill and other intangible assets207,467  208,165  208,139  207,287  205,855     
Total assets4,652,485  4,388,442  4,394,203  4,300,376  4,449,720     
Deposits - interest-bearing2,697,468  2,522,863  2,466,529  2,452,421  2,448,954     
Deposits - non-interest-bearing901,619  834,363  892,386  863,118  924,844     
Short-term borrowings252,367  226,498  227,059  173,704  237,865     
Long-term FHLB advances55,374  72,841  87,808  107,784  139,140     
Subordinated notes98,526  98,482  98,491  98,448  98,416     
Jr. subordinated debentures21,580  21,538  21,497  21,456  21,416     
Total liabilities4,087,781  3,837,017  3,851,700  3,767,315  3,921,601     
Total shareholders' equity564,704  551,425  542,503  533,061  528,119     
Average Balance Sheet (selected items)             
Interest-bearing deposits with banks38,957  37,467  37,215  38,044  43,962  37,550  34,122 
Investment securities554,265  546,998  549,249  535,471  499,968  546,549  446,681 
Loans held for sale2,005  4,932  4,413  2,848  3,966  3,551  3,945 
Portfolio loans and leases3,397,479  3,374,767  3,348,926  3,288,364  2,801,289  3,352,744  2,660,999 
Total interest-earning assets3,992,706  3,964,164  3,939,803  3,864,727  3,349,185  3,940,394  3,145,747 
Goodwill and intangible assets207,893  207,880  208,039  205,529  142,652  207,343  130,791 
Total assets4,413,000  4,376,148  4,344,541  4,246,180  3,640,667  4,352,122  3,416,146 
Deposits - interest-bearing2,602,412  2,493,213  2,489,296  2,435,491  2,031,170  2,506,557  1,902,536 
Short-term borrowings128,429  208,201  205,323  172,534  180,650  178,582  128,008 
Long-term FHLB advances67,363  81,460  102,023  123,920  134,605  93,503  161,004 
Subordinated notes98,497  98,457  98,463  98,430  43,844  98,462  33,153 
Jr. subordinated debentures21,553  21,511  21,470  21,430  3,957  21,491  997 
Total interest-bearing liabilities2,918,254  2,902,842  2,916,575  2,851,805  2,394,226  2,898,595  2,225,698 
Total liabilities3,856,694  3,828,241  3,810,640  3,719,746  3,213,349  3,810,537  3,016,876 
Total shareholders' equity556,306  547,907  533,901  526,434  427,318  541,585  399,270 
                     

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

 As of or For the Three Months Ended For the Twelve Months Ended
 December 31,
2018
 September 30,
2018
 June 30,
2018
 March 31,
2018
 December 31,
2017
 December 31,
2018
 December 31,
2017
Income Statement             
Net interest income$37,987  $36,729  $37,316  $37,439  $30,321  $149,471  $115,127 
Provision for loan and lease losses2,362  664  3,137  1,030  1,077  7,193  2,618 
Noninterest income18,097  18,274  20,075  19,536  15,536  75,982  59,132 
Noninterest expense34,845  33,592  35,836  36,030  31,056  140,303  114,395 
Income tax expense1,746  4,066  3,723  4,630  19,924  14,165  34,230 
Net income17,131  16,681  14,695  15,285  (6,200) 63,792  23,016 
Net (loss) income attributable to noncontrolling interest(5) (1) 7  (1)      
Net income (loss) attributable to Bryn Mawr Bank Corporation17,136  16,682  14,688  15,286  (6,200) 63,792  23,016 
Basic earnings (loss) per share0.85  0.82  0.73  0.76  (0.35) 3.15  1.34 
Diluted earnings (loss) per share0.84  0.82  0.72  0.75  (0.35) 3.13  1.32 
Net income (core) (1)17,167  17,140  17,031  19,282  11,255  70,620  42,111 
Basic earnings per share (core) (1)0.85  0.85  0.84  0.95  0.64  3.49  2.46 
Diluted earnings per share (core) (1)0.84  0.84  0.83  0.94  0.63  3.46  2.42 
Dividends paid or accrued per share0.25  0.25  0.22  0.22  0.22  0.94  0.86 
Profitability Indicators             
Return on average assets1.54% 1.51% 1.36% 1.46% (0.68)% 1.47% 0.67%
Return on average equity12.22% 12.08% 11.03% 11.78% (5.76)% 11.78% 5.76%
Return on tangible equity(1)20.37% 20.25% 18.90% 20.15% (8.02)% 19.91% 9.23%
Return on tangible equity (core)(1)20.40% 20.78% 21.78% 25.19% 16.29% 21.95% 21.86%
Return on average assets (core)(1)1.54% 1.55% 1.57% 1.84% 1.23% 1.62% 1.23%
Return on average equity (core)(1)12.24% 12.41% 12.79% 14.85% 10.45% 13.04% 10.55%
Tax-equivalent net interest margin3.79% 3.69% 3.81% 3.94% 3.62% 3.80% 3.69%
Efficiency ratio(1)60.35% 58.75% 55.57% 54.12% 58.64% 57.17% 60.61%
Share Data                           
Closing share price$34.40  $46.90  $46.30  $43.95  $44.20     
Book value per common share$28.01  $27.18  $26.80  $26.35  $26.19     
Tangible book value per common share$17.75  $16.95  $16.55  $16.14  $16.02     
Price / book value122.81% 172.55% 172.76% 166.79% 168.74%    
Price / tangible book value193.80% 276.70% 279.74% 272.35% 275.94%    
Weighted average diluted shares outstanding20,321,283  20,438,376  20,413,578  20,450,494  17,844,672  20,390,167  17,398,923 
Shares outstanding, end of period20,163,816  20,291,416  20,242,893  20,229,896  20,161,395     
Wealth Management Information:             
Wealth assets under mgmt, administration, supervision and brokerage (2)$13,429,544  $13,913,265  $13,404,723  $13,146,926  $12,968,738     
Fees for wealth management services$11,017  $10,343  $10,658  $10,308  $9,974     
                        

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

 As of or For the Three Months Ended For the Twelve Months Ended
 December 31,
2018
 September 30,
2018
 June 30,
2018
 March 31,
2018
 December 31,
2017
 December 31,
2018
 December 31,
2017
Capital Ratios(3)             
Bryn Mawr Trust Company (“BMTC”)             
Tier I capital to risk weighted assets ("RWA")11.44% 11.55% 11.34% 11.29% 11.10%    
Total capital to RWA12.00% 12.10% 11.91% 11.82% 11.65%    
Tier I leverage ratio9.48% 9.47% 9.49% 9.39% 10.76%    
Tangible equity ratio (1)8.95% 9.29% 9.27% 9.19% 8.67%    
Common equity Tier I capital to RWA11.44% 11.55% 11.34% 11.29% 11.10%    
                        
Bryn Mawr Bank Corporation (“BMBC”)                       
Tier I capital to RWA10.94% 10.90% 10.46% 10.46% 10.42%    
Total capital to RWA14.32% 14.33% 13.87% 13.93% 13.92%    
Tier I leverage ratio9.06% 8.94% 8.75% 8.71% 10.10%    
Tangible equity ratio (1)8.05% 8.23% 8.00% 7.98% 7.61%    
Common equity Tier I capital to RWA10.34% 10.29% 9.86% 9.85% 9.87%    
              
Asset Quality Indicators             
Net loan and lease charge-offs ("NCO"s)$1,620  $1,378  $1,401  $893  $556  $5,292  $2,579 
              
Nonperforming loans and leases ("NPL"s)$12,820  $8,990  $9,448  $7,533  $8,579     
Other real estate owned ("OREO")417  529  531  300  304     
Total nonperforming assets ("NPA"s)$13,237  $9,519  $9,979  $7,833  $8,883     
              
Nonperforming loans and leases 30 or more days past due$7,765  $4,906  $6,749  $5,775  $6,983     
Performing loans and leases 30 to 89 days past due5,464  9,145  10,378  6,547  7,958     
Performing loans and leases 90 or more days past due             
Total delinquent loans and leases$13,229  $14,051  $17,127  $12,322  $14,941     
              
Delinquent loans and leases to total loans and leases0.39% 0.42% 0.50% 0.37% 0.45%    
Delinquent performing loans and leases to total loans and leases0.16% 0.27% 0.31% 0.20% 0.24%    
NCOs / average loans and leases (annualized)0.19% 0.16% 0.17% 0.11% 0.08% 0.16% 0.10%
NPLs / total portfolio loans and leases0.37% 0.27% 0.28% 0.23% 0.26%    
NPAs / total loans and leases and OREO0.39% 0.28% 0.29% 0.24% 0.27%    
NPAs / total assets0.28% 0.22% 0.23% 0.18% 0.20%    
ALLL / NPLs151.53% 207.83% 205.31% 234.46% 204.28%    
ALLL / portfolio loans0.57% 0.55% 0.57% 0.53% 0.53%    
ALLL for originated loans and leases / Originated loans and leases (1)0.67% 0.68% 0.71% 0.69% 0.70%    
(Total ALLL + Loan mark) / Total Gross portfolio loans and leases (1)1.08% 1.28% 1.35% 1.50% 1.58%    
              
Troubled debt restructurings ("TDR"s) included in NPLs$1,217  $1,208  $1,044  $1,125  $3,289     
TDRs in compliance with modified terms9,745  4,316  4,117  5,235  5,800     
Total TDRs$10,962  $5,524  $5,161  $6,360  $9,089     

(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)

 December 31,
2018
 September 30,
2018
 June 30,
2018
 March 31,
2018
 December 31,
2017
Assets         
Cash and due from banks$14,099  $10,121  $7,318  $7,804  $11,657 
Interest-bearing deposits with banks34,357  35,233  39,924  24,589  48,367 
Cash and cash equivalents48,456  45,354  47,242  32,393  60,024 
Investment securities, available for sale737,442  528,064  531,075  534,103  689,202 
Investment securities, held to maturity8,684  8,916  7,838  7,885  7,932 
Investment securities, trading7,502  8,340  8,175  8,211  4,610 
Loans held for sale1,749  4,111  4,204  5,522  3,794 
Portfolio loans and leases, originated2,885,251  2,752,160  2,700,815  2,564,827  2,487,296 
Portfolio loans and leases, acquired541,903  629,315  688,686  740,968  798,562 
Total portfolio loans and leases3,427,154  3,381,475  3,389,501  3,305,795  3,285,858 
Less: Allowance for losses on originated loan and leases(19,329) (18,612) (19,181) (17,570) (17,475)
Less: Allowance for losses on acquired loan and leases(97) (72) (217) (92) (50)
Total allowance for loan and lease losses(19,426) (18,684) (19,398) (17,662) (17,525)
Net portfolio loans and leases3,407,728  3,362,791  3,370,103  3,288,133  3,268,333 
Premises and equipment65,648  63,281  54,185  54,986  54,458 
Accrued interest receivable12,585  13,232  13,115  12,521  14,246 
Mortgage servicing rights5,047  5,328  5,511  5,706  5,861 
Bank owned life insurance57,844  57,543  57,243  56,946  56,667 
Federal Home Loan Bank ("FHLB") stock14,530  14,678  16,678  15,499  20,083 
Goodwill184,012  183,864  183,162  182,200  179,889 
Intangible assets23,455  24,301  24,977  25,087  25,966 
Other investments16,526  16,529  16,774  11,720  12,470 
Other assets61,277  52,110  53,921  59,464  46,185 
Total assets$4,652,485  $4,388,442  $4,394,203  $4,300,376  $4,449,720 
          
Liabilities         
Deposits         
Noninterest-bearing$901,619  $834,363  $892,386  $863,118  $924,844 
Interest-bearing2,697,468  2,522,863  2,466,529  2,452,421  2,448,954 
Total deposits3,599,087  3,357,226  3,358,915  3,315,539  3,373,798 
Short-term borrowings252,367  226,498  227,059  173,704  237,865 
Long-term FHLB advances55,374  72,841  87,808  107,784  139,140 
Subordinated notes98,526  98,482  98,491  98,448  98,416 
Jr. subordinated debentures21,580  21,538  21,497  21,456  21,416 
Accrued interest payable6,652  7,193  5,230  4,814  3,527 
Other liabilities54,195  53,239  52,700  45,570  47,439 
Total liabilities4,087,781  3,837,017  3,851,700  3,767,315  3,921,601 
          
Shareholders' equity         
Common stock24,545  24,533  24,453  24,439  24,360 
Paid-in capital in excess of par value374,010  373,205  372,227  371,319  371,486 
Less: common stock held in treasury, at cost(75,883) (70,437) (68,943) (68,787) (68,179)
Accumulated other comprehensive (loss) income, net of tax(7,513) (13,402) (11,191) (9,664) (4,414)
Retained earnings250,230  238,204  226,634  216,438  205,549 
Total Bryn Mawr Bank Corporation shareholders' equity565,389  552,103  543,180  533,745  528,802 
Noncontrolling interest(685) (678) (677) (684) (683)
Total shareholders' equity564,704  551,425  542,503  533,061  528,119 
Total liabilities and shareholders' equity$4,652,485  $4,388,442  $4,394,203  $4,300,376  $4,449,720 
                    

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

 Portfolio Loans and Leases as of
 December 31,
2018
 September 30,
2018
 June 30,
2018
 March 31,
2018
 December 31,
2017
Commercial mortgages$1,657,436  $1,618,493  $1,613,721  $1,541,457  $1,523,377 
Home equity loans and lines207,351  207,806  206,429  211,469  218,275 
Residential mortgages494,355  467,402  449,060  453,655  458,886 
Construction181,078  178,493  190,874  202,168  212,454 
Total real estate loans2,540,220  2,472,194  2,460,084  2,408,749  2,412,992 
Commercial & Industrial695,584  722,999  745,306  727,231  719,312 
Consumer46,814  47,809  51,462  48,423  38,153 
Leases144,536  138,473  132,649  121,392  115,401 
Total non-real estate loans and leases886,934  909,281  929,417  897,046  872,866 
Total portfolio loans and leases$3,427,154  $3,381,475  $3,389,501  $3,305,795  $3,285,858 


 Nonperforming Loans and Leases as of
 December 31,
2018
 September 30,
2018
 June 30,
2018
 March 31,
2018
 December 31,
2017
Commercial mortgages$2,568  $735  $1,011  $138  $872 
Home equity loans and lines3,616  1,933  2,323  1,949  1,481 
Residential mortgages3,452  2,770  2,647  2,603  4,417 
Construction  291       
Total nonperforming real estate loans9,636  5,729  5,980  4,690  6,770 
Commercial & Industrial2,101  1,782  1,585  2,499  1,706 
Consumer108  117       
Leases975  1,362  1,882  344  103 
Total nonperforming non-real estate loans and leases3,184  3,261  3,468  2,843  1,809 
Total nonperforming portfolio loans and leases$12,820  $8,990  $9,448  $7,533  $8,579 


 Net Loan and Lease Charge-Offs (Recoveries) for the Three Months Ended
 December 31,
2018
 September 30,
2018
 June 30,
2018
 March 31,
2018
 December 31,
2017
Commercial mortgage$249  $56  $13  $(3) $51 
Home equity loans and lines107    199  25  (5)
Residential304  (12) (1)   88 
Construction    (1) (1) (1)
Total net charge-offs of real estate loans660  44  210  21  133 
Commercial & Industrial298  304  467  283  125 
Consumer147  71  41  48  55 
Leases515  959  683  541  243 
Total net charge-offs of non-real estate loans and leases960  1,334  1,191  872  423 
Total net charge-offs$1,620  $1,378  $1,401  $893  $556 
                    

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

 Investment Securities Available for Sale, at Fair Value
 December 31,
2018
 September 30,
2018
 June 30,
2018
 March 31,
2018
 December 31,
2017
U.S. Treasury securities$200,013  $100  $100  $100  $200,088 
Obligations of the U.S. Government and agencies195,855  190,453  183,256  175,107  151,044 
State & political subdivisions - tax-free11,162  15,629  17,254  19,746  21,138 
State & political subdivisions - taxable170  170  171  171  172 
Mortgage-backed securities289,890  284,421  292,563  303,902  274,990 
Collateralized mortgage obligations39,252  36,193  36,634  33,980  36,662 
Other debt securities1,100  1,098  1,097  1,097  1,599 
Other investments        3,509 
  Total investment securities available for sale, at fair value$737,442  $528,064  $531,075  $534,103  $689,202 


 Unrealized Gain (Loss) on Investment Securities Available for Sale
 December 31,
2018
 September 30,
2018
 June 30,
2018
 March 31,
2018
 December 31,
2017
U.S. Treasury securities$(13) $  $  $  $11 
Obligations of the U.S. Government and agencies(2,749) (5,881) (4,594) (3,756) (1,984)
State & political subdivisions - tax-free(39) (90) (57) (74) (42)
State & political subdivisions - taxable(1) (1) (1) (1)  
Mortgage-backed securities(4,186) (7,584) (6,141) (5,169) (968)
Collateralized mortgage obligations(898) (1,618) (1,443) (1,322) (934)
Other debt securities  (2) (3) (3) (1)
Other investments        296 
  Total unrealized losses on investment securities available for sale$(7,886) $(15,176) $(12,239) $(10,325) $(3,622)


 Deposits
 December 31,
2018
 September 30,
2018
 June 30,
2018
 March 31,
2018
 December 31,
2017
Interest-bearing deposits:         
  Interest-bearing demand$664,749  $578,243  $617,258  $529,478  $481,336 
  Money market862,644  812,027  814,530  856,072  862,639 
  Savings247,081  286,266  291,858  308,925  338,572 
  Retail time deposits542,702  561,123  536,287  523,138  532,202 
  Wholesale non-maturity deposits55,031  24,040  36,826  63,449  62,276 
  Wholesale time deposits325,261  261,164  169,770  171,359  171,929 
   Total interest-bearing deposits2,697,468  2,522,863  2,466,529  2,452,421  2,448,954 
  Noninterest-bearing deposits901,619  834,363  892,386  863,118  924,844 
   Total deposits$3,599,087  $3,357,226  $3,358,915  $3,315,539  $3,373,798 
                    

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

 For the Three Months Ended For the Twelve Months Ended
 December 31,
2018
 September 30,
2018
 June 30,
2018
 March 31,
2018
 December 31,
2017
 December 31,
2018
 December 31,
2017
Interest income:             
Interest and fees on loans and leases$44,157  $42,103  $41,689  $40,689  $32,245  $168,638  $120,762 
Interest on cash and cash equivalents83  64  64  53  37  264  174 
Interest on investment securities3,294  3,066  3,001  2,792  2,516  12,153  8,623 
Total interest income47,534  45,233  44,754  43,534  34,798  181,055  129,559 
Interest expense:             
Interest on deposits7,048  5,533  4,499  3,472  2,739  20,552  8,748 
Interest on short-term borrowings681  1,096  985  630  579  3,392  1,390 
Interest on FHLB advances331  394  490  562  595  1,777  2,620 
Interest on jr. subordinated debentures342  337  321  288  46  1,288  46 
Interest on subordinated notes1,145  1,144  1,143  1,143  518  4,575  1,628 
Total interest expense9,547  8,504  7,438  6,095  4,477  31,584  14,432 
Net interest income37,987  36,729  37,316  37,439  30,321  149,471  115,127 
Provision for loan and lease losses (the "Provision")2,362  664  3,137  1,030  1,077  7,193  2,618 
Net interest income after Provision35,625  36,065  34,179  36,409  29,244  142,278  112,509 
Noninterest income:             
Fees for wealth management services11,017  10,343  10,658  10,308  9,974  42,326  38,735 
Insurance commissions1,459  1,754  1,902  1,693  1,510  6,808  4,589 
Capital markets revenue1,367  710  2,105  666  600  4,848  2,396 
Service charges on deposits798  726  752  713  655  2,989  2,608 
Loan servicing and other fees539  559  475  686  536  2,259  2,106 
Net gain on sale of loans1,606  631  528  518  493  3,283  2,441 
Net gain on sale of investment securities available for sale      7  28  7  101 
Net gain (loss) on sale of other real estate owned3  5  111  176  (92) 295  (104)
Dividends on FHLB and FRB stocks305  375  510  431  290  1,621  939 
Other operating income1,003  3,171  3,034  4,338  1,542  11,546  5,321 
Total noninterest income18,097  18,274  20,075  19,536  15,536  75,982  59,132 
Noninterest expense:             
Salaries and wages17,921  16,528  16,240  15,982  13,619  66,671  53,251 
Employee benefits2,977  3,356  2,877  3,708  2,717  12,918  10,170 
Occupancy and bank premises3,135  2,717  2,697  3,050  2,648  11,599  9,906 
Furniture, fixtures and equipment2,370  2,070  2,069  1,898  1,816  8,407  7,385 
Advertising540  349  369  461  386  1,719  1,454 
Amortization of intangible assets997  891  889  879  677  3,656  2,734 
Impairment (recovery) of mortgage servicing rights ("MSRs")101  (23) (1) (50) (94) 27  (45)
Due diligence, merger-related and merger integration expenses  389  3,053  4,319  3,507  7,761  6,104 
Professional fees1,526  997  932  748  769  4,203  3,268 
Pennsylvania bank shares tax374  472  473  473  16  1,792  1,294 
Information technology1,340  1,155  1,252  1,195  1,006  4,942  3,581 
Other operating expenses3,564  4,691  4,986  3,367  3,989  16,608  15,293 
Total noninterest expense34,845  33,592  35,836  36,030  31,056  140,303  114,395 
Income before income taxes18,877  20,747  18,418  19,915  13,724  77,957  57,246 
Income tax expense1,746  4,066  3,723  4,630  19,924  14,165  34,230 
  Net income (loss)$17,131  $16,681  $14,695  $15,285  $(6,200) $63,792  $23,016 
Net (loss) income attributable to noncontrolling interest(5) (1) 7  (1)      
  Net income (loss) attributable to Bryn Mawr Bank Corporation$17,136  $16,682  $14,688  $15,286  $(6,200) $63,792  $23,016 
              
Per share data:             
Weighted average shares outstanding20,225,993  20,270,706  20,238,852  20,202,969  17,632,697  20,234,792  17,150,125 
Dilutive common shares95,290  167,670  174,726  247,525  211,975  155,375  248,798 
Weighted average diluted shares20,321,283  20,438,376  20,413,578  20,450,494  17,844,672  20,390,167  17,398,923 
Basic earnings (loss) per common share$0.85  $0.82  $0.73  $0.76  $(0.35) $3.15  $1.34 
Diluted earnings (loss) per common share$0.84  $0.82  $0.72  $0.75  $(0.35) $3.13  $1.32 
Dividends paid or accrued per share$0.25  $0.25  $0.22  $0.22  $0.22  $0.94  $0.86 
Effective tax rate9.25% 19.60% 20.21% 23.25% 145.18% 18.17% 59.79%
                     

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

  For the Three Months Ended   For the Twelve Months Ended 
  December 31,
2018
  September 30,
2018
  June 30,
2018
  March 31,
2018
  December 31,
2017
   December 31,
2018
  December 31,
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$38,957 $83 0.85%$37,467 $64 0.68%$37,215 $64 0.69%$38,044 $53 0.56%$43,962 $37 0.33% $37,550 $264 0.70%$34,122 $174 0.51%
Investment securities - available for sale:                      
Taxable524,117 3,129 2.37%514,360 2,960 2.28%514,966 2,888 2.25%498,718 2,675 2.18%465,393 2,394 2.04% 513,114 11,652 2.27%409,813 8,147 1.99%
Tax-exempt13,184 70 2.11%16,056 83 2.05%18,215 93 2.05%20,501 100 1.98%22,640 127 2.23% 16,966 346 2.04%27,062 575 2.12%
Total investment securities - available for sale537,301 3,199 2.36%530,416 3,043 2.28%533,181 2,981 2.24%519,219 2,775 2.17%488,033 2,521 2.05% 530,080 11,998 2.26%436,875 8,722 2.00%
                       
Investment securities - held to maturity8,761 9 0.41%8,378 5 0.24%7,866 13 0.66%7,913 12 0.62%7,510 11 0.58% 8,232 39 0.47%5,621 34 0.60%
Investment securities - trading8,203 96 4.64%8,204 30 1.45%8,202 22 1.08%8,339 21 1.02%4,425 25 2.24% 8,237 169 2.05%4,185 54 1.29%
                       
Loans and leases *3,399,484 44,274 5.17%3,379,699 42,214 4.96%3,353,339 41,782 5.00%3,291,212 40,754 5.02%2,805,255 32,403 4.58% 3,356,295 169,024 5.04%2,664,944 121,391 4.56%
                       
Total interest-earning assets3,992,706 47,661 4.74%3,964,164 45,356 4.54%3,939,803 44,862 4.57%3,864,727 43,615 4.58%3,349,185 34,997 4.15% 3,940,394 181,494 4.61%3,145,747 130,375 4.14%
                       
Cash and due from banks13,962   7,587   7,153   10,698   6,855    9,853   13,293   
Less: allowance for loan and lease losses(18,625)  (19,467)  (18,043)  (17,628)  (17,046)   (18,447)  (17,181)  
Other assets424,957   423,864   415,628   388,383   301,673    420,322   274,287   
                       
Total assets$4,413,000   $4,376,148   $4,344,541   $4,246,180   $3,640,667    $4,352,122   $3,416,146   
                       
Liabilities:                      
                       
Interest-bearing deposits:                      
Savings, NOW and market rate deposits$1,704,065 $2,883 0.67%$1,695,214 $2,425 0.57%$1,722,328 $2,073 0.48%$1,676,733 $1,479 0.36%$1,410,461 $897 0.25% $1,715,239 $8,860 0.52%$1,383,560 $3,289 0.24%
Wholesale deposits346,134 1,986 2.28%256,347 1,329 2.06%233,714 973 1.67%231,289 733 1.29%262,643 822 1.24% 251,384 5,021 2.00%188,179 2,065 1.10%
Retail time deposits552,213 2,179 1.57%541,652 1,779 1.30%533,254 1,453 1.09%527,469 1,260 0.97%358,066 1,020 1.13% 539,934 6,671 1.24%330,797 3,394 1.03%
Total interest-bearing deposits2,602,412 7,048 1.07%2,493,213 5,533 0.88%2,489,296 4,499 0.72%2,435,491 3,472 0.58%2,031,170 2,739 0.53% 2,506,557 20,552 0.82%1,902,536 8,748 0.46%
                       
Borrowings:                      
Short-term borrowings128,429 681 2.10%208,201 1,096 2.09%205,323 985 1.92%172,534 630 1.48%180,650 579 1.27% 178,582 3,392 1.90%128,008 1,390 1.09%
Long-term FHLB advances67,363 331 1.95%81,460 394 1.92%102,023 490 1.93%123,920 562 1.84%134,605 595 1.75% 93,503 1,777 1.90%161,004 2,620 1.63%
Subordinated notes98,497 1,145 4.61%98,457 1,144 4.61%98,463 1,143 4.66%98,430 1,143 4.71%43,844 518 4.69% 98,462 4,575 4.65%997 46 4.61%
Jr. subordinated debt21,553 342 6.30%21,511 337 6.22%21,470 321 6.00%21,430 288 5.45%3,957 46 4.61% 21,491 1,288 5.99%33,153 1,628 4.91%
Total borrowings315,842 2,499 3.14%409,629 2,971 2.88%427,279 2,939 2.76%416,314 2,623 2.56%363,056 1,738 1.90% 392,038 11,032 2.81%323,162 5,684 1.76%
                       
Total interest-bearing liabilities2,918,254 9,547 1.30%2,902,842 8,504 1.16%2,916,575 7,438 1.02%2,851,805 6,095 0.87%2,394,226 4,477 0.74% 2,898,595 31,584 1.09%2,225,698 14,432 0.65%
                       
Noninterest-bearing deposits878,047   866,314   841,676   835,476   771,519    856,506   751,069   
Other liabilities60,393   59,085   52,389   32,465   47,604    55,436   40,109   
Total noninterest-bearing liabilities938,440   925,399   894,065   867,941   819,123    911,942   791,178   
                       
Total liabilities3,856,694   3,828,241   3,810,640   3,719,746   3,213,349    3,810,537   3,016,876   
                       
Shareholders' equity556,306   547,907   533,901   526,434   427,318    541,585   399,270   
                       
Total liabilities and shareholders' equity$4,413,000   $4,376,148   $4,344,541   $4,246,180   $3,640,667    $4,352,122   $3,416,146   
                       
Net interest spread  3.44%  3.38%  3.55%  3.71%  3.41%   3.52%  3.49%
Effect of noninterest-bearing sources  0.35%  0.31%  0.26%  0.23%  0.21%   0.28%  0.20%
                       
Tax-equivalent net interest margin $38,114 3.79% $36,852 3.69% $37,424 3.81% $37,520 3.94% $30,520 3.62%  $149,910 3.80% $115,943 3.69%
                       
Tax-equivalent adjustment $127 0.01% $123 0.01% $108 0.01% $81 0.01% $199 0.02%  $439 0.01% $816 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.


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

Supplemental Information Regarding Accretion of Fair Value Marks

 For the Three Months Ended For the Twelve Months Ended
 December 31,
2018
September 30,
2018
June 30,
2018
March 31,
2018
December 31,
2017
 December 31,
2018
December 31,
2017
(dollars in thousands)InterestInc. /
(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 leasesIncome$2,492 0.29% $1,464 0.17% $1,945 0.23% $2,702 0.33% $276 0.04%  $8,603 0.26% $2,112 0.08%
Retail time depositsExpense(279)(0.20)% (311)(0.23)% (339)(0.25)% (380)(0.29)% (13)(0.01)%  (1,309)(0.24)% (65)(0.02)%
Long-term FHLB advancesExpense34 0.20% 32 0.16% 25 0.10% 15 0.05% (31)(0.09)%  106 0.11% (121)(0.08)%
Jr. subordinated debtExpense42 0.77% 41 0.76% 41 0.77% 40 0.76%  %  164 0.76%  %
Net interest income from fair value marks $2,695   $1,702   $2,218   $3,027   $320    $9,642   $2,298  
Purchase accounting effect on tax-equivalent margin  0.27%  0.17%  0.23%  0.32%  0.04%   0.24%  0.07%
                              

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

Statement on Non-GAAP Measures: The Corporation believes the presentation of the following non-GAAP financial measures provides useful supplemental information that is essential to an investor’s proper understanding of the results of operations and financial condition of the Corporation. Management uses non-GAAP financial measures in its analysis of the Corporation’s performance. These non-GAAP measures should not be viewed as substitutes for the financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
              
 As of or For the Three Months Ended As of or For the Twelve Months Ended
 December 31,
2018
 September 30,
2018
 June 30,
2018
 March 31,
2018
 December 31, 
2017
 December 31,
2018
 December 31,
2017
Reconciliation of Net Income to Net Income (core):             
Net income (loss) attributable to BMBC (a GAAP measure)$17,136  $16,682  $14,688  $15,286  $(6,200) $63,792  $23,016 
Less: Tax-effected non-core noninterest income:             
Gain on sale of investment securities available for sale      (6) (18) (6) (66)
Add: Tax-effected non-core noninterest expense items:             
Due diligence, merger-related and merger integration expenses  307  2,412  3,412  2,280  6,131  3,968 
Add: Federal income tax expense related to re-measurement of net deferred tax asset due to tax reform legislation31  151  (69) 590  15,193  703  15,193 
Net income (core) (a non-GAAP measure)$17,167  $17,140  $17,031  $19,282  $11,255  $70,620  $42,111 
              
Calculation of Basic and Diluted Earnings per Common Share (core):             
Weighted average common shares outstanding20,225,993  20,270,706  20,238,852  20,202,969  17,632,697  20,234,792  17,150,125 
Dilutive common shares95,290  167,670  174,726  247,525  211,975  155,375  248,798 
Weighted average diluted shares20,321,283  20,438,376  20,413,578  20,450,494  17,844,672  20,390,167  17,398,923 
Basic earnings per common share (core) (a non-GAAP measure)$0.85  $0.85  $0.84  $0.95  $0.64  $3.49  $2.46 
Diluted earnings per common share (core) (a non-GAAP measure)$0.84  $0.84  $0.83  $0.94  $0.63  $3.46  $2.42 
              
Calculation of Return on Average Tangible Equity:             
Net income (loss) attributable to BMBC (a GAAP measure)$17,136  $16,682  $14,688  $15,286  $(6,200) $63,792  $23,016 
Add: Tax-effected amortization and impairment of intangible assets787  705  702  694  440  2,888  1,777 
Net tangible income (numerator)$17,923  $17,387  $15,390  $15,980  $(5,760) $66,680  $24,793 
              
Average shareholders' equity$556,306  $547,907  $533,901  $526,434  $427,318  $541,585  $399,270 
Less: Average Noncontrolling interest681  678  685  683  126  684   
Less: Average goodwill and intangible assets(207,893) (207,880) (208,039) (205,529) (142,652) (207,343) (130,791)
Net average tangible equity (denominator)$349,094  $340,705  $326,547  $321,588  $284,792  $334,926  $268,479 
              
Return on tangible equity (a non-GAAP measure)20.37% 20.25% 18.90% 20.15% (8.02)% 19.91% 9.23%
              
Calculation of Return on Average Tangible Equity (core):             
Net income (core) (a non-GAAP measure)$17,167  $17,140  $17,031  $19,282  $11,255  $70,620  $42,111 
Add: Tax-effected amortization and impairment of intangible assets787  705  702  694  440  2,888  1,777 
Net tangible income (core) (numerator)$17,954  $17,845  $17,733  $19,976  $11,695  $73,508  $43,888 
              
Average shareholders' equity$556,306  $547,907  $533,901  $526,434  $427,318  $541,585  $399,270 
Less: Average Noncontrolling interest681  678  685  683  126  684   
Less: Average goodwill and intangible assets(207,893) (207,880) (208,039) (205,529) (142,652) (207,343) (130,791)
Net average tangible equity (denominator)$349,094  $340,705  $326,547  $321,588  $284,792  $334,926  $268,479 
              
Return on tangible equity (core) (a non-GAAP measure)20.40% 20.78% 21.78% 25.19% 16.29% 21.95% 21.86%


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

Statement on Non-GAAP Measures: The Corporation believes the presentation of the following non-GAAP financial measures provides useful supplemental information that is essential to an investor’s proper understanding of the results of operations and financial condition of the Corporation. Management uses non-GAAP financial measures in its analysis of the Corporation’s performance. These non-GAAP measures should not be viewed as substitutes for the financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
              
 As of or For the Three Months Ended As of or For the Twelve Months Ended
 December 31, 
2018
 September 30,
2018
 June 30,
2018
 March 31, 2018 December 31, 2017 December 31,
2018
 December 31,
2017
Calculation of Tangible Equity Ratio (BMBC):             
Total shareholders' equity$564,704  $551,425  $542,503  $533,061  $528,119     
Less: Noncontrolling interest685  678  677  684  683     
Less: Goodwill and intangible assets(207,467) (208,165) (208,139) (207,287) (205,855)    
Net tangible equity (numerator)$357,922  $343,938  $335,041  $326,458  $322,947     
              
Total assets$4,652,485  $4,388,442  $4,394,203  $4,300,376  $4,449,720     
Less: Goodwill and intangible assets(207,467) (208,165) (208,139) (207,287) (205,855)    
Tangible assets (denominator)$4,445,018  $4,180,277  $4,186,064  $4,093,089  $4,243,865     
              
Tangible equity ratio (BMBC)(1)8.05% 8.23% 8.00% 7.98% 7.61%    
              
Calculation of Tangible Equity Ratio (BMTC):             
Total shareholders' equity$591,695  $582,698  $582,354  $569,670  $559,581     
Less: Noncontrolling interest685  678  677  684  683     
Less: Goodwill and intangible assets(194,715) (195,337) (195,245) (194,316) (192,807)    
Net tangible equity (numerator)$397,665  $388,039  $387,786  $376,038  $367,457     
              
Total assets$4,637,481  $4,372,590  $4,378,508  $4,284,334  $4,430,528     
Less: Goodwill and intangible assets(194,715) (195,337) (195,245) (194,316) (192,807)    
Tangible assets (denominator)$4,442,766  $4,177,253  $4,183,263  $4,090,018  $4,237,721     
              
Tangible equity ratio (BMTC)(1)8.95% 9.29% 9.27% 9.19% 8.67%    
                        
Calculation of Return on Average Assets (core)                       
Return on average assets (GAAP)1.54% 1.51% 1.36% 1.46% (0.68)% 1.47% 0.67%
Effect of adjustment to GAAP net income to core net income% 0.04% 0.21% 0.38% 1.91% 0.15% 0.56%
Return on average assets (core)1.54% 1.55% 1.57% 1.84% 1.23% 1.62% 1.23%
                          
Calculation of Return on Average Equity (core)                         
Return on average equity (GAAP)12.22% 12.08% 11.03% 11.78% (5.76)% 11.78% 5.76%
Effect of adjustment to GAAP net income to core net income0.02% 0.33% 1.76% 3.07% 16.21% 1.26% 4.79%
Return on average equity (core)12.24% 12.41% 12.79% 14.85% 10.45% 13.04% 10.55%
                          
Calculation of Tax-equivalent net interest margin adjusting for the impact of purchase accounting                         
Tax-equivalent net interest margin3.79% 3.69% 3.81% 3.94% 3.62% 3.80% 3.69%
Effect of fair value marks0.27% 0.17% 0.23% 0.32% 0.04% 0.24% 0.07%
Tax-equivalent net interest margin adjusting for the impact of purchase accounting3.52% 3.52% 3.58% 3.62% 3.58% 3.56% 3.62%

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


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

Statement on Non-GAAP Measures: The Corporation believes the presentation of the following non-GAAP financial measures provides useful supplemental information that is essential to an investor’s proper understanding of the results of operations and financial condition of the Corporation. Management uses non-GAAP financial measures in its analysis of the Corporation’s performance. These non-GAAP measures should not be viewed as substitutes for the financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
              
 As of or For the Three Months Ended As of or For the Twelve Months Ended
 December 31,
2018
 September 30,
2018
 June 30,
2018
 March 31,
2018
 December 31,
2017
 December 31,
2018
 December 31,
2017
Calculation of Efficiency Ratio:             
Noninterest expense$34,845  $33,592  $35,836  $36,030  $31,056  $140,303  $114,395 
Less: certain noninterest expense items*:             
Amortization of intangibles(997) (891) (889) (879) (677) (3,656) (2,734)
Due diligence, merger-related and merger integration expenses  (389) (3,053) (4,319) (3,507) (7,761) (6,104)
Noninterest expense (adjusted) (numerator)$33,848  $32,312  $31,894  $30,832  $26,872  $128,886  $105,557 
              
Noninterest income$18,097  $18,274  $20,075  $19,536  $15,536  $75,982  $59,132 
Less: non-core noninterest income items:             
Gain on sale of investment securities available for sale      (7) (28) (7) (101)
Noninterest income (core)$18,097  $18,274  $20,075  $19,529  $15,508  $75,975  $59,031 
Net interest income37,987  36,729  37,316  37,439  30,321  149,471  115,127 
Noninterest income (core) and net interest income (denominator)$56,084  $55,003  $57,391  $56,968  $45,829  $225,446  $174,158 
              
Efficiency ratio60.35% 58.75% 55.57% 54.12% 58.64% 57.17% 60.61%
              
Supplemental Loan and Allowance Information Used to Calculate Non-GAAP Measures             
Total Allowance$19,426  $18,684  $19,398  $17,662  $17,525     
Less: Allowance on acquired loans97  72  217  92  50     
Allowance on originated loans and leases$19,329  $18,612  $19,181  $17,570  $17,475     
              
Total Allowance$19,426  $18,684  $19,398  $17,662  $17,525     
Loan mark on acquired loans17,822  24,964  26,705  32,260  34,790     
Total Allowance + Loan mark$37,248  $43,648  $46,103  $49,922  $52,315     
              
Total Portfolio loans and leases$3,427,154  $3,381,475  $3,389,501  $3,305,795  $3,285,858     
Less: Originated loans and leases2,885,251  2,752,160  2,700,815  2,564,827  2,487,296     
Net acquired loans$541,903  $629,315  $688,686  $740,968  $798,562     
Add: Loan mark on acquired loans17,822  24,964  26,705  32,260  34,790     
Gross acquired loans (excludes loan mark)$559,725  $654,279  $715,391  $773,228  $833,352     
Originated loans and leases2,885,251  2,752,160  2,700,815  2,564,827  2,487,296     
Total Gross portfolio loans and leases$3,444,976  $3,406,439  $3,416,206  $3,338,055  $3,320,648     

* 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.

FOR MORE INFORMATION CONTACT: Frank Leto, President, CEO
  610-581-4730
  Mike Harrington, CFO
  610-526-2466