Exhibit 99.1

 

 

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

 

Bryn Mawr Bank Corporation Reports Fourth Quarter Earnings

Impacted by $15.2 Million One-Time Income Tax Charge

Related to the Tax Cuts and Jobs Act,

Declares $0.22 Dividend,

Completes Royal Bank Merger

 

BRYN MAWR, Pa., January 29, 2018 – H.R. 1, originally known as the “Tax Cuts and Jobs Act” (“Tax Reform”), signed into law on December 22, 2017, reduced the top federal corporate income tax rate from 35% to 21%. As a result, Bryn Mawr Bank Corporation (NASDAQ: BMTC) (the “Corporation”), parent of The Bryn Mawr Trust Company (the “Bank”) was required to re-measure its net deferred tax asset to this lower rate, resulting in a one-time income tax charge of $15.2 million, or $0.85 diluted earnings per share. Additionally, the Corporation incurred after-tax due diligence and merger-related expenses of $2.3 million during the fourth quarter of 2017. As a result, the Corporation today reported a net loss of $6.2 million and diluted earnings per share of ($0.35) for the three months ended December 31, 2017, as compared to net income of $10.7 million, or $0.62 diluted earnings per share, for the three months ended September 30, 2017, and $9.4 million, or $0.55 diluted earnings per share, for the three months ended December 31, 2016. For the twelve months ended December 31, 2017, the Corporation posted net income of $23.0 million, or $1.32 diluted earnings per share, as compared to $36.0 million, or $2.12 diluted earnings per share for the same period in 2016.

 

On a non-GAAP basis, core net income, which excludes this one-time income tax charge, due diligence and merger-related expenses and certain other non-core income and expense items, as detailed in the appendix to this earnings release, was $11.3 million, or $0.63 diluted earnings per share, for the three months ended December 31, 2017 as compared to $11.2 million, or $0.65 diluted earnings per share, for the three months ended September 30, 2017 and $9.4 million, or $0.55 diluted earnings per share, for the three months ended December 31, 2016. For the twelve months ended December 31, 2017, core net income was $42.1 million, or $2.42 per share, as compared to $36.1 million, or $2.12 diluted earnings per share for the same period in 2016. 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 finish the year on a strong note with core net income at record levels for both the quarter and full year,” commented Frank Leto, President and Chief Executive Officer.

“The fourth quarter was an excellent period for BMT, as we continued to benefit from our focus on new business development, as evidenced by the Wealth Division’s reaching almost $13 billion in AUM, while also issuing $70 million of subordinated notes, which will qualify for Tier 2 regulatory capital, and successfully completing our merger with Royal Bank with minimal disruption to normal operations. As the merger was a mid-December close, the full impact of the business combination on the Corporation’s results will not be evident until the first quarter of 2018,” added Mr. Leto.

 

“The income tax charge related to Tax Reform was experienced by many throughout the industry. While we expect to recoup this expense in less than two years, we are also analyzing how to deploy the increased after-tax earnings within a framework that is focused on improving long-term shareholder value while also continuing to serve the communities in which we do business,”

Mr. Leto concluded.

 

The Board of Directors of the Corporation declared a quarterly dividend of $0.22 per share, payable March 1, 2018 to shareholders of record as of February 9, 2018.

 

 

SIGNIFICANT ITEMS OF NOTE 

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

 

●

A net loss of $6.2 million, or $(0.35) diluted earnings per share, for the three months ended December 31, 2017, as compared to net income of $10.7 million, or $0.62 diluted earnings per share, for the three months ended September 30, 2017 was primarily the result of a one-time income tax charge related to the re-measurement of the Corporation’s net deferred tax asset, triggered by Tax Reform, which was enacted on December 22, 2017. The Corporation’s net deferred tax asset on December 22, 2017, the date of the Tax Reform enactment, amounted to $39.0 million and included the Corporation’s legacy net deferred tax asset and the remainder of the net deferred tax asset acquired in the merger with Royal Bancshares of Pennsylvania, Inc. (the “Merger”). In accordance with GAAP, the combined remaining net deferred tax asset was re-measured, reducing it by $15.2 million, with a corresponding charge to income tax expense. In addition to this one-time income tax charge, the excess tax benefit related to the vesting of stock-based compensation decreased by $598 thousand from the third quarter to the fourth quarter of 2017. Other factors impacting net income included a $2.7 million increase in due diligence and merger-related expenses for the fourth quarter of 2017 as compared to the third quarter of 2017.

 

On a non-GAAP basis, core net income, which excludes the above Tax Reform-related income tax charge, due diligence and merger-related expenses and other non-core income and expense items, as detailed in the appendix to this earnings release, was $11.3 million or $0.63 per diluted share for the three months ended December 31, 2017 as compared to $11.2 million or $0.65 per diluted share for the third quarter 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 fourth quarter of 2017 increased $883 thousand, or 3.0%, over the prior quarter. The provision for loan and lease losses (the “Provision”) decreased $256 thousand, or 19.2%, from the prior quarter. Non-interest income remained flat at $15.5 million and $15.6 million for the fourth and third quarters of 2017, respectively. Non-interest expense increased $2.9 million on a linked-quarter basis and, as noted above, was primarily due to a $2.7 million increase in due diligence and merger-related costs. Income tax expense, excluding the Tax Reform-related charge, remained flat at $4.7 million and $4.8 million for the fourth and third quarters of 2017, respectively. However, the effective tax rate excluding the one-time Tax Reform-related income tax charge, increased from 30.7% for the three months ended September 30, 2017 to 34.5% for the three months ended December 31, 2017 primarily due to excess tax benefits from equity compensation transactions recorded during the third quarter of 2017.

 

 

●

Tax-equivalent net interest income for the three months ended December 31, 2017 was $30.5 million, an increase of $873 thousand over the linked quarter. The interest-earning assets and interest-bearing liabilities acquired in the December 15, 2017 Merger contributed approximately $1.1 million to tax-equivalent net interest income. This increase was partially offset by a $433 thousand decrease in the accretion of purchase accounting adjustments between the third and fourth quarters of 2017.

 

●

Tax-equivalent interest and fees on loans and leases for the three months ended December 31, 2017 increased $1.3 million over the linked quarter. Average loans and leases for the fourth quarter increased $124.9 million over the third quarter 2017 and experienced a two basis point decrease in tax-equivalent yield. The increase in average loans between the third and fourth quarters of 2017 was largely related to the loans acquired in the Merger which added $105.3 million in average loans and leases and contributed approximately $1.4 million in tax-equivalent interest and fee income for the fourth quarter of 2017.

 

Average available for sale investment securities increased by $35.7 million over the linked quarter, and experienced a four basis point tax-equivalent yield increase. The increase in volume and yield on available for sale investment securities resulted in a $227 thousand increase in tax-equivalent interest income for the fourth quarter of 2017 as compared to the third quarter of 2017. The majority of the Royal Bank investment portfolio was sold immediately following the Merger and did not impact interest income from available for sale investment securities.

 

 

Interest expense on deposits for the three months ended December 31, 2017 increased $541 thousand over the linked quarter. Average interest-bearing deposits increased $159.7 million accompanied by a six basis point increase in the rate paid on deposits. The increase in average interest-bearing deposits was largely related to the deposits acquired in the Merger which added $91.4 million to the average balance of interest-bearing deposits for the fourth quarter of 2017 and accounted for approximately $209 thousand in interest expense during the fourth quarter of 2017.

 

Average subordinated notes for the three months ended December 31, 2017 increased $14.3 million over the linked quarter with the rate paid decreasing by 28 basis points to 4.69%. In addition to the $70 million of 4.25% fixed-to- floating subordinated notes issued on December 13, 2017, the Corporation also acquired $21.4 million of floating rate junior subordinated debentures currently at a 4.61% in connection with the Merger. The volume increase in both borrowing types and rate decrease in the subordinated notes in the fourth quarter of 2017 resulted in a $194 thousand increase in interest expense on subordinated notes and junior subordinated debentures on a linked-quarter basis.

 

●

The tax-equivalent net interest margin was 3.62% for the fourth quarter and 3.71% for the third quarter of 2017. Adjusting for the impact of the accretion of purchase accounting adjustments, the adjusted tax-equivalent net interest margin was 3.58% and 3.62% for the fourth and third quarters of 2017, respectively.

 

●

Noninterest income for the three months ended December 31, 2017 of $15.5 million remained relatively unchanged from the third quarter of 2017. Increases of $323 thousand and $137 thousand in fees for wealth management services and insurance revenue, respectively, were offset by decreases of $243 thousand and $306 thousand in capital markets revenue and net gain on sale of loans, respectively.

 

●

Noninterest expense for the three months ended December 31, 2017 increased $2.9 million, to $31.1 million, as compared to $28.2 million for the third quarter of 2017. The increase on a linked quarter basis was largely related to the $2.7 million increase in due diligence and merger-related expenses. The balance of the increase in noninterest expense on the linked- quarter basis was related to the addition of the Royal Bank operations, which accounted for approximately $215 thousand of noninterest expense for the second half of December 2017.

 

 

●

For the three months ended December 31, 2017, net loan and lease charge-offs totaled $556 thousand, as compared to $728 thousand for the third quarter of 2017. The Provision for the three months ended December 31, 2017 was $1.1 million, a $256 thousand decrease from $1.3 million for the third quarter of 2017. The credit quality of the loan and lease portfolio remains stable, with the increase in the allowance for loan and lease losses (the “Allowance”) largely related to the growth of the portfolio. During the fourth quarter, there was a $4.1 million increase in nonperforming loans related to a small number of well collateralized residential and commercial real estate loans which became nonaccrual.

 

●

Income tax expense for the fourth quarter of 2017 increased $15.2 million as compared to the third quarter of 2017. As discussed previously, this increase was primarily related to the re-measurement of the Corporation’s legacy and acquired net deferred tax asset as a result of Tax Reform enacted on December 22, 2017. Excluding this one-time charge to income tax expense, the effective tax rate for the fourth quarter of 2017 was 34.5%, as compared to 30.7% for the third quarter of 2017. The 374 basis point increase in the effective tax rate (excluding the one-time Tax Reform-related charge) over the linked quarter was primarily the result of nondeductible merger expenses in the fourth quarter of 2017 and a $598 thousand decrease in excess tax benefits associated with the vesting of stock-based compensation between the third and fourth quarters of 2017.

 

Results of Operations – Fourth Quarter 2017 Compared to Fourth Quarter 2016

 

●

As noted above, the net loss of $6.2 million for the three months ended December 31, 2017, as compared to net income of $9.4 million for the same period in 2016 was primarily the result of a one-time income tax charge related to the re-measurement of the Corporation’s net deferred tax asset, triggered by Tax Reform enacted on December 22, 2017. Other factors impacting net income included a $3.5 million increase in due diligence and merger-related expenses, a $1.8 million increase in salaries and wages and a $580 thousand increase in employee benefits for the fourth quarter of 2017 as compared to the same period in 2016. These expense increases were more than offset by a $3.3 million increase in net interest income and increases of $647 thousand, $795 thousand and $600 thousand in fees for wealth management services, insurance revenues and capital markets revenue, respectively.

 

 

●

Tax-equivalent net interest income for the three months ended December 31, 2017 was $30.5 million, an increase of $3.3 million over the same period in 2016. Tax-equivalent net interest income from the assets and liabilities acquired in the December 15, 2017 Merger contributed approximately $1.1 million to this increase. This increase was partially offset by a $471 thousand decrease in the accretion of purchase accounting adjustments between the fourth quarters of 2017 and 2016.

 

Tax-equivalent interest and fees on loans and leases increased $4.0 million for the three months ended December 31, 2017 as compared to the same period in 2016. Average loans and leases for the fourth quarter of 2017 increased $287.3 million from the same period in 2016 and experienced a ten basis point increase in tax-equivalent yield. Excluding the effect of the accretion of purchase accounting adjustments on loans and leases, the adjusted tax-equivalent yield on loans and leases increased by 18 basis points. The increases in the prime rate during 2017 contributed to the increase in tax-equivalent yield on loans. The increase in average loans and leases for the fourth quarter of 2017 as compared to the same period in 2016 was largely related to the loans and leases acquired in the Merger which increased average loans and leases by $105.3 million and contributed approximately $1.4 million in interest and fee income on loans and leases for the fourth quarter of 2017.

 

Average available for sale investment securities increased by $108.1 million for the three months ended December 31, 2017 as compared to the same period in 2016, and experienced a 30 basis point tax-equivalent yield increase. The increase in volume and yield on available for sale investment securities resulted in an $848 thousand increase in tax-equivalent interest income on available for sale investment securities for the fourth quarter of 2017 as compared to the same period in 2016.

 

Partially offsetting the effect on interest income associated with the increase in average loans and leases and available for sale investment securities was a $959 thousand increase in interest expense on deposits for the fourth quarter of 2017 as compared to the same period in 2016. Average interest-bearing deposits increased by $221.9 million and were accompanied by a 14 basis point increase in rate paid between the fourth quarters of 2017 and 2016.

 

 

In addition to the increased interest expense on deposits, a $586 thousand increase in interest expense on borrowings between the periods was attributed a $94.5 million increase in average borrowings coupled with a 19 basis point increase in rate paid on borrowings for the three months ended December 31, 2017 as compared to the same period in 2016.

 

Average subordinated notes for the three months ended December 31, 2017 increased $14.3 million as compared to the same period in 2016 with the rate paid decreasing by 30 basis points to 4.69% for the three months ended December 31, 2017. In addition to the $70 million of 4.25% fixed-to-floating subordinated notes issued on December 13, 2017, the Corporation also acquired $21.4 million of floating-rate junior subordinated debentures currently at a 4.61% in connection with the Merger. The volume increase in both borrowing types and rate decrease in the subordinated notes in the fourth quarter of 2017 resulted in a $194 thousand increase in interest expense on subordinated notes and junior subordinated debentures for the three months ended December 31, 2017 as compared to the same period in 2016.

 

●

The tax-equivalent net interest margin was 3.62% for the three months ended December 31, 2017 as compared to 3.65% for the same period in 2016. Adjusting for the impact of the accretion of purchase accounting, the adjusted tax-equivalent net interest margin was 3.58% and 3.54% for three months ended December 31, 2017 and 2016, respectively.

 

●

Noninterest income for the three months ended December 31, 2017 increased by $2.3 million, to $15.5 million, from the same period in 2016. An increase of $647 thousand in fees for wealth management services resulted as wealth assets under management, administration, supervision and brokerage increased $1.64 billion from December 31, 2016 to December 31, 2017. Insurance revenue increased $795 thousand for the fourth quarter of 2017 as compared to the same period in 2016, largely due to the May 2017 acquisition of Hirshorn Boothby. In addition, revenue from our Capital Markets initiative, which was launched in the second quarter of 2017, contributed $600 thousand to noninterest income.

 

 

●

Noninterest expense for the three months ended December 31, 2017 increased $6.0 million, to $31.1 million, from the same period in 2016. The increase was largely related to a $3.5 million increase in due diligence and merger-related expenses and a $1.8 million increase in salary and wages due to staffing increases from our Capital Markets initiative, the Hirshorn Boothby acquisition and the Princeton wealth management office, annual salary and wage increases and increases in incentive compensation.

 

●	For the three months ended December 31, 2017, the Provision was $1.1 million, which was unchanged from the same period in 2016. Net charge-offs for the fourth quarter of 2017 were $556 thousand as compared to $1.3 million for the same period in 2016.

 

 

Financial Condition – December 31, 2017 Compared to December 31, 2016

 

●

Total portfolio loans and leases of $3.29 billion as of December 31, 2017 increased by $750.4 million from December 31, 2016. Largely contributing to this increase were the $570.4 million of loans and leases acquired in the Merger. Excluding the loans and leases acquired in the Merger, the $180.0 million increase in portfolio loans and leases represents a 7.1% increase for the twelve months ended December 31, 2017.

 

●

The Allowance as of December 31, 2017 was $17.5 million, or 0.53% of portfolio loans as compared to $17.5 million, or 0.69% of portfolio loans and leases as of December 31, 2016. In addition to the ratio of Allowance to portfolio loans and leases, management also calculates two non-GAAP measures: the Allowance as a percentage of originated loans and leases, which was 0.70% as of December 31, 2017, as compared to 0.78% as of December 31, 2016, and the Allowance plus the remaining loan mark as a percentage of gross loans, which was 1.48% as of December 31, 2017, as compared to 1.17% as of December 31, 2016. A reconciliation of these and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release. The decrease in the ratio of Allowance to portfolio loans and leases was primarily related to the addition of $570.4 million of loans and leases acquired in the Merger.

 

 

●

Available for sale investment securities as of December 31, 2017 totaled $689.2 million, an increase of $122.2 million from December 31, 2016. The increase in available for sale investment securities was related to purchases of investment securities during 2017 in anticipation of the Merger. The majority of the available for sale investment securities acquired in the Merger were sold immediately after the closing of the transaction; no gain or loss was recognized on the sales.

 

●	Total assets as of December 31, 2017 were $4.45 billion, an increase of $1.03 billion from December 31, 2016. The Merger added $859.4 million to total assets. Organic increases in portfolio loans and leases accounted for much of the balance of the increase.

 

●

Wealth assets under management, administration, supervision and brokerage totaled $12.97 billion as of December 31, 2017, an increase of $1.64 billion from December 31, 2016. The increase in wealth assets was comprised of a $582 million increase in account balances whose fees are based on market value, and a $1.06 billion increase in fixed rate flat-fee account types.

●	Deposits of $3.37 billion as of December 31, 2017 increased $794.1 million from December 31, 2016. The Merger accounted for the addition of $593.2 million of the increase.

 

●

Borrowings of $496.8 million as of December 31, 2017 increased $73.4 million from December 31, 2016. The increase was comprised of a $33.7 million increase in short-term borrowings, a $68.9 million increase subordinated notes, and a $21.4 million increase in junior subordinated debentures, which were assumed in the Merger. Partially offsetting these increases was a $50.6 million decrease in long-term FHLB advances.

●

The capital ratios for the Bank and the Corporation, as of December 31, 2017, as shown in the attached tables, indicate levels above the regulatory minimum to be considered “well capitalized.” In addition to the capital issued in the Merger, during the fourth quarter of 2017, regulatory capital increases at the Corporation included the issuance of $70.0 million of subordinated notes, which qualify as Tier 2 capital and the acquisition of $21.4 million of junior subordinated debentures, which are carried in Tier 1 capital. On the Bank level, the Corporation down-streamed $15.0 million of capital to the Bank, increasing its Tier 1 capital balance.

 

 

Organic Loan and Lease Growth - September 30, 2017 to December 31, 2017

 

Total portfolio loans and leases as of December 31, 2017 were $3.29 billion, as compared to $2.68 billion as of September 30, 2017, an increase of $608.5 million. Loans and leases acquired in the Merger totaled $570.4 million, resulting in net organic loan growth of $38.1 million, or 5.7% annualized, for the fourth quarter of 2017. This growth was muted relative to the annual organic growth rate of approximately 7% as the Corporation elected to reduce its exposure to construction loans in anticipation of the Royal Bank merger. Also contributing to the lower growth rate was a decrease in residential loan balances as the Corporation was impacted by the general decrease in mortgage lending activity.

 

Future Effect of Purchase Accounting Adjustments Recorded in the Merger

 

Amounts presented in the table below reflect estimated fair value adjustments to interest-earning assets and interest-bearing liabilities acquired in the Merger. A portion of these fair value adjustments will be accreted or amortized as adjustments to net interest income over future periods. The accretable portion of the fair value adjustment to loans and leases will be accreted on a level-yield basis as the loans and leases pay down. The amortization of the fair value adjustments on FHLB advances and junior subordinated debentures will be recognized over 3.7 years and 16.9 years, respectively. The accretion of the fair value adjustments on time deposits will be recognized over a weighted average life of approximately 1.3 years.

 

(dollars in thousands)		Acquired Balance				(Accretable)/ Amortizable Fair Value Adjustment				Nonaccretable Fair Value Adjustment				Recorded Fair Value
Interest-earning assets:
Loans and leases		$	597,435			$	(15,990	)		$	(11,072	)		$	570,373
Interest-bearing liabilities:
Time deposits		$	197,841			$	(2,535	)		$	—			$	200,376
FHLB advances and other borrowings		$	75,000			$	432			$	—			$	74,568
Junior subordinated debentures		$	25,774			$	4,358			$	—			$	21,416

 

 

  

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; 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, 2017				September 30, 2017				June 30, 2017				March 31, 2017				December 31, 2016				December 31, 2017				December 31, 2016
Consolidated Balance Sheet (selected items)
Interest-bearing deposits with banks		$	48,367			$	36,870			$	30,806			$	69,978			$	34,206
Investment securities			701,744				482,399				452,869				400,360				573,763
Loans held for sale			3,794				6,327				8,590				3,015				9,621
Portfolio loans and leases			3,285,857				2,677,345				2,666,651				2,555,589				2,535,425
Allowance for loan and lease losses ("ALLL")			(17,525	)			(17,004	)			(16,399	)			(17,107	)			(17,486	)
Goodwill and other intangible assets			205,855				128,534				129,211				124,629				125,170
Total assets			4,449,720				3,476,821				3,438,219				3,292,617				3,421,530
Deposits - interest-bearing			2,448,954				1,923,567				1,863,288				1,865,009				1,843,495
Deposits - non-interest-bearing			924,844				760,614				818,475				771,556				736,180
Short-term borrowings			237,865				180,874				130,295				23,613				204,151
Long-term FHLB advances and other borrowings			139,140				134,651				164,681				174,711				189,742
Subordinated notes			98,416				29,573				29,559				29,546				29,532
Total liabilities			3,921,601				3,074,929				3,043,242				2,904,522				3,040,403
Total shareholders' equity			528,119				401,892				394,977				388,095				381,127
Average Balance Sheet (selected items)
Interest-bearing deposits with banks		$	43,962			$	26,628			$	26,266			$	39,669			$	55,298			$	34,122			$	43,214
Investment securities			499,968				462,700				429,400				393,306				386,658				446,681				373,134
Loans held for sale			3,966				3,728				3,855				4,238				11,591				3,945				9,466
Portfolio loans and leases			2,801,289				2,676,589				2,611,755				2,551,439				2,506,376				2,660,999				2,419,950
Total interest-earning assets			3,349,185				3,169,645				3,071,276				2,988,652				2,959,923				3,145,747				2,845,764
Goodwill and intangible assets			142,652				128,917				126,537				124,884				125,614				130,791				126,950
Total assets			3,640,667				3,441,906				3,333,307				3,244,060				3,215,868				3,416,146				3,105,650
Deposits - interest-bearing			2,031,170				1,871,494				1,853,660				1,852,194				1,809,276				1,902,536				1,722,724
Short-term borrowings			180,650				182,845				98,869				47,603				40,629				128,008				37,041
Long-term FHLB advances			134,605				155,918				171,567				182,507				198,454				161,004				225,815
Subordinated notes			43,844				29,564				29,550				29,537				29,523				33,153				29,503
Jr. subordinated debentures			3,957																				997
Total interest-bearing liabilities			2,394,226				2,239,821				2,153,646				2,111,841				2,077,882				2,225,698				2,015,083
Total liabilities			3,213,349				3,044,549				2,943,591				2,861,846				2,837,825				3,016,876				2,736,121
Total shareholders' equity			427,318				397,357				389,716				382,214				378,043				399,270				369,529
Income Statement
Net interest income		$	30,321			$	29,438			$	27,965			$	27,403			$	26,990			$	115,127			$	106,236
Provision for loan and lease losses			1,077				1,333				(83	)			291				1,059				2,618				4,326
Noninterest income			15,536				15,584				14,785				13,227				13,248				59,132				54,039
Noninterest expense			31,056				28,184				28,495				26,660				25,087				114,395				101,745
Income tax expense			19,924				4,766				4,905				4,635				4,684				34,230				18,168
Net income			(6,200	)			10,739				9,433				9,044				9,408				23,016				36,036
Basic earnings per share			(0.35	)			0.63				0.56				0.53				0.56				1.34				2.14
Diluted earnings per share			(0.35	)			0.62				0.55				0.53				0.55				1.32				2.12
Net income (core) (1)			11,255				11,245				10,236				9,375				9,402				42,111				36,086
Basic earnings per share (core) (1)			0.64				0.66				0.60				0.55				0.56				2.46				2.14
Diluted earnings per share (core) (1)			0.63				0.65				0.59				0.55				0.55				2.42				2.12
Cash dividends paid per share			0.22				0.22				0.21				0.21				0.21				0.86				0.82
Profitability Indicators
Return on average assets			-0.68	%			1.24	%			1.14	%			1.13	%			1.16	%			0.67	%			1.16	%
Return on average equity			-5.75	%			10.72	%			9.71	%			9.60	%			9.90	%			5.76	%			9.75	%
Return on tangible equity(1)			-8.03	%			16.52	%			15.06	%			14.96	%			15.68	%			9.23	%			15.79	%
Return on average assets (core)(1)			1.23	%			1.31	%			1.23	%			1.17	%			1.16	%			1.23	%			1.16	%
Tax-equivalent net interest margin			3.62	%			3.71	%			3.68	%			3.74	%			3.65	%			3.69	%			3.76	%
Efficiency ratio(1)			58.64	%			59.30	%			62.16	%			62.66	%			60.30	%			60.61	%			61.27	%
Share Data
Closing share price		$	44.20			$	43.80			$	42.50			$	39.50			$	42.15
Book value per common share		$	26.19			$	23.57			$	23.25			$	22.87			$	22.50
Tangible book value per common share		$	15.98			$	16.03			$	15.64			$	15.53			$	15.11
Price / book value			168.74	%			185.82	%			182.81	%			172.71	%			187.34	%
Price / tangible book value			276.53	%			273.19	%			271.69	%			254.41	%			278.96	%
Weighted average diluted shares outstanding			17,632,701				17,253,982				17,232,767				17,182,689				17,164,675				17,381,232				17,028,122
Shares outstanding, end of period			20,161,795				17,050,151				16,989,849				16,969,451				16,939,715
Wealth Management Information:
Wealth assets under mgmt, administration, supervision and brokerage (2)		$	12,968,738			$	12,431,370			$	12,050,555			$	11,725,460			$	11,328,457
Fees for wealth management services		$	9,974			$	9,651			$	9,807			$	9,303			$	9,327
Capital Ratios
Bryn Mawr Trust Company
Tier I capital to risk weighted assets ("RWA")			11.10	%			10.78	%			10.29	%			10.58	%			10.50	%
Total (Tier II) capital to RWA			11.64	%			11.42	%			10.90	%			11.25	%			11.19	%
Tier I leverage ratio			9.02	%			8.79	%			8.76	%			8.83	%			8.73	%
Tangible equity ratio (1)			8.67	%			8.46	%			8.24	%			8.46	%			7.85	%
Common equity Tier I capital to RWA			11.10	%			10.78	%			10.29	%			10.58	%			10.50	%
Bryn Mawr Bank Corporation
Tier I capital to RWA			10.36	%			10.50	%			10.10	%			10.50	%			10.51	%
Total (Tier II) capital to RWA			13.85	%			12.23	%			11.79	%			12.30	%			12.35	%
Tier I leverage ratio			8.49	%			8.53	%			8.63	%			8.77	%			8.73	%
Tangible equity ratio (1)			7.61	%			8.16	%			8.03	%			8.32	%			7.76	%
Common equity Tier I capital to RWA			9.80	%			10.50	%			10.10	%			10.50	%			10.51	%
Asset Quality Indicators
Net loan and lease charge-offs ("NCO"s)		$	556			$	728			$	625			$	670			$	1,317			$	2,579			$	2,697
Nonperforming loans and leases ("NPL"s)		$	8,579			$	4,472			$	7,237			$	7,329			$	8,363
Other real estate owned ("OREO")			1,554				865				1,122				978				1,017
Total nonperforming assets ("NPA"s)		$	10,133			$	5,337			$	8,359			$	8,307			$	9,380
Nonperforming loans and leases 30 or more days past due		$	6,983			$	2,337			$	4,076			$	5,097			$	6,072
Performing loans and leases 30 to 89 days past due			7,958				4,558				6,258				6,077				3,062
Performing loans and leases 90 or more days past due			-				-				-				-				-
Total delinquent loans and leases		$	14,941			$	6,895			$	10,334			$	11,174			$	9,134
Delinquent loans and leases to total loans and leases			0.45	%			0.26	%			0.39	%			0.44	%			0.36	%
Delinquent performing loans and leases to total loans and leases			0.24	%			0.17	%			0.23	%			0.24	%			0.12	%
NCOs / average loans and leases (annualized)			0.08	%			0.11	%			0.10	%			0.11	%			0.21	%			0.10	%			0.11	%
NPLs / total portfolio loans and leases			0.26	%			0.17	%			0.27	%			0.29	%			0.33	%
NPAs / total loans and leases and OREO			0.31	%			0.20	%			0.31	%			0.32	%			0.37	%
NPAs / total assets			0.23	%			0.15	%			0.24	%			0.25	%			0.27	%
ALLL / NPLs			204.28	%			380.23	%			226.60	%			233.42	%			209.09	%
ALLL / portfolio loans			0.53	%			0.64	%			0.61	%			0.67	%			0.69	%
ALLL on originated loans and leases / Originated loans and leases (1)			0.70	%			0.70	%			0.68	%			0.75	%			0.78	%
(Total Allowance + Loan mark) / Total Gross portfolio loans and leases (1)			1.48	%			1.01	%			1.03	%			1.12	%			1.17	%
Troubled debt restructurings ("TDR"s) included in NPLs		$	3,289			$	2,033			$	2,470			$	2,681			$	2,632
TDRs in compliance with modified terms			5,800				6,597				6,148				6,492				6,395
Total TDRs		$	9,089			$	8,630			$	8,618			$	9,173			$	9,027

 

(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.

 

 

Bryn Mawr Bank Corporation

Detailed Balance Sheets (unaudited)

(dollars in thousands)

 

		December 31, 2017				September 30, 2017				June 30, 2017				March 31, 2017				December 31, 2016
Assets
Cash and due from banks		$	11,657			$	8,682			$	19,352			$	17,457			$	16,559
Interest-bearing deposits with banks			48,367				36,870				30,806				69,978				34,206
Cash and cash equivalents			60,024				45,552				50,158				87,435				50,765
Investment securities, available for sale			689,202				471,721				443,687				391,028				566,996
Investment securities, held to maturity			7,932				6,255				5,161				5,194				2,879
Investment securities, trading			4,610				4,423				4,021				4,138				3,888
Loans held for sale			3,794				6,327				8,590				3,015				9,621
Portfolio loans and leases, originated			2,487,295				2,433,054				2,409,964				2,286,814				2,240,987
Portfolio loans and leases, acquired			798,562				244,291				256,687				268,775				294,438
Total portfolio loans and leases			3,285,857				2,677,345				2,666,651				2,555,589				2,535,425
Less: Allowance for losses on originated loan and leases			(17,475	)			(16,957	)			(16,374	)			(17,069	)			(17,458	)
Less: Allowance for losses on acquired loan and leases			(50	)			(47	)			(25	)			(38	)			(28	)
Total allowance for loan and lease losses			(17,525	)			(17,004	)			(16,399	)			(17,107	)			(17,486	)
Net portfolio loans and leases			3,268,332				2,660,341				2,650,252				2,538,482				2,517,939
Premises and equipment			54,458				44,544				44,446				40,515				41,778
Accrued interest receivable			14,246				9,287				8,717				8,392				8,533
Mortgage servicing rights			5,861				5,732				5,683				5,686				5,582
Bank owned life insurance			56,667				39,881				39,680				39,479				39,279
Federal Home Loan Bank ("FHLB") stock			20,083				16,248				15,168				8,505				17,305
Goodwill			179,889				107,127				107,127				104,765				104,765
Intangible assets			25,966				21,407				22,084				19,864				20,405
Other investments			12,470				8,941				8,682				8,716				8,627
Other assets			46,186				29,035				24,763				27,403				23,168
Total assets		$	4,449,720			$	3,476,821			$	3,438,219			$	3,292,617			$	3,421,530
Liabilities
Deposits
Noninterest-bearing		$	924,844			$	760,614			$	818,475			$	771,556			$	736,180
Interest-bearing			2,448,954				1,923,567				1,863,288				1,865,009				1,843,495
Total deposits			3,373,798				2,684,181				2,681,763				2,636,565				2,579,675
Short-term borrowings			237,865				180,874				130,295				23,613				204,151
Long-term FHLB advances			139,140				134,651				164,681				174,711				189,742
Subordinated notes			98,416				29,573				29,559				29,546				29,532
Jr. subordinated debentures			21,416				-				-				-				-
Accrued interest payable			3,527				2,267				2,830				2,722				2,734
Other liabilities			47,439				43,383				34,114				37,365				34,569
Total liabilities			3,921,601				3,074,929				3,043,242				2,904,522				3,040,403
Shareholders' equity
Common stock			24,360				21,248				21,162				21,141				21,111
Paid-in capital in excess of par value			371,486				235,412				234,654				233,910				232,806
Less: common stock held in treasury, at cost			(68,179	)			(68,134	)			(67,091	)			(66,969	)			(66,950	)
Accumulated other comprehensive (loss) income, net of tax			(4,414	)			(1,400	)			(1,564	)			(1,990	)			(2,409	)
Retained earnings			205,549				214,766				207,816				202,003				196,569
Total Bryn Mawr Bank Corporation shareholders' equity			528,802				401,892				394,977				388,095				381,127
Noncontrolling interest			(683	)			-				-				-				-
Total shareholders' equity			528,119				401,892				394,977				388,095				381,127
Total liabilities and shareholders' equity		$	4,449,720			$	3,476,821			$	3,438,219			$	3,292,617			$	3,421,530

 

 

 

 

Bryn Mawr Bank Corporation

Supplemental Balance Sheet Information (unaudited)

(dollars in thousands)

 

		Portfolio Loans and Leases as of
		December 31, 2017				September 30, 2017				June 30, 2017				March 31, 2017				December 31, 2016
Commercial mortgages		$	1,523,376			$	1,224,571			$	1,197,936			$	1,137,870			$	1,110,897
Home equity loans and lines			218,275				206,974				208,480				203,962				208,000
Residential mortgages			458,886				422,524				416,488				418,264				413,540
Construction			212,454				133,505				156,581				145,699				141,964
Total real estate loans			2,412,991				1,987,574				1,979,485				1,905,795				1,874,401
Commercial & Industrial			719,312				597,595				599,203				567,917				579,791
Consumer			38,153				31,306				28,485				23,932				25,341
Leases			115,401				60,870				59,478				57,945				55,892
Total non-real estate loans and leases			872,866				689,771				687,166				649,794				661,024
Total portfolio loans and leases		$	3,285,857			$	2,677,345			$	2,666,651			$	2,555,589			$	2,535,425
		Nonperforming Loans and Leases as of
		December 31, 2017				September 30, 2017				June 30, 2017				March 31, 2017				December 31, 2016
Commercial mortgages		$	872			$	193			$	818			$	315			$	320
Home equity loans and lines			1,481				613				1,535				1,828				2,289
Residential mortgages			4,417				1,589				2,589				2,640				2,658
Construction			-				-				-				-				-
Total nonperforming real estate loans			6,770				2,395				4,942				4,783				5,267
Commercial & Industrial			1,706				1,977				2,112				2,471				2,957
Consumer			-				-				10				-				2
Leases			103				100				173				75				137
Total nonperforming non-real estate loans and leases			1,809				2,077				2,295				2,546				3,096
Total nonperforming portfolio loans and leases		$	8,579			$	4,472			$	7,237			$	7,329			$	8,363
		Net Loan and Lease Charge-Offs (Recoveries) for the Three Months Ended
		December 31, 2017				September 30, 2017				June 30, 2017				March 31, 2017				December 31, 2016
Commercial mortgage		$	51			$	(3	)		$	(3	)		$	(3	)		$	(51	)
Home equity loans and lines			(5	)			69				169				438				69
Residential			88				3				43				27				28
Construction			(1	)			(1	)			(1	)			(1	)			(1	)
Total net charge-offs of real estate loans			133				68				208				461				45
Commercial & Industrial			125				298				185				59				1,128
Consumer			55				36				16				39				42
Leases			243				326				216				111				102
Total net charge-offs of non-real estate loans and leases			423				660				417				209				1,272
Total net charge-offs		$	556			$	728			$	625			$	670			$	1,317

 

 

Bryn Mawr Bank Corporation

Supplemental Balance Sheet Information (unaudited)

(dollars in thousands)

 

		Investment Securities Available for Sale, at Fair Value
		December 31, 2017				September 30, 2017				June 30, 2017				March 31, 2017				December 31, 2016
U.S. Treasury securities		$	200,088			$	100			$	100			$	100			$	200,097
Obligations of the U.S. Government and agencies			151,044				142,711				126,468				100,476				82,198
State & political subdivisions - tax-free			21,138				23,556				26,958				30,416				33,005
State & political subdivisions - taxable			172				524				524				524				525
Mortgage-backed securities			274,990				260,680				230,617				197,420				185,951
Collateralized mortgage obligations			36,662				39,595				42,549				45,476				48,694
Other debt securities			1,599				1,100				1,099				1,299				1,299
Bond mutual funds			-				-				11,956				11,920				11,895
Other investments			3,509				3,455				3,416				3,397				3,332
Total investment securities available for sale, at fair value		$	689,202			$	471,721			$	443,687			$	391,028			$	566,996
		Unrealized Gain (Loss) on Investment Securities Available for Sale
		December 31, 2017				September 30, 2017				June 30, 2017				March 31, 2017				December 31, 2016
U.S. Treasury securities		$	11			$	-			$	-			$	-			$	3
Obligations of the U.S. Government and agencies			(1,984	)			(920	)			(699	)			(803	)			(913	)
State & political subdivisions - tax-free			(42	)			23				11				(10	)			(96	)
State & political subdivisions - taxable			-				1				1				1				2
Mortgage-backed securities			(968	)			869				480				196				(47	)
Collateralized mortgage obligations			(934	)			(640	)			(662	)			(777	)			(794	)
Other debt securities			(1	)			-				(1	)			(1	)			(1	)
Bond mutual funds			-				-				-				(36	)			(61	)
Other investments			296				230				203				132				13
Total unrealized (losses) gains on investment securities available for sale		$	(3,622	)		$	(437	)		$	(667	)		$	(1,298	)		$	(1,894	)
		Deposits
		December 31, 2017				September 30, 2017				June 30, 2017				March 31, 2017				December 31, 2016
Interest-bearing deposits:
Interest-bearing checking		$	481,336			$	395,383			$	381,345			$	395,131			$	379,424
Money market			862,639				720,613				729,859				757,071				761,657
Savings			338,572				264,273				254,903				255,791				232,193
Wholesale non-maturity deposits			62,276				48,620				54,675				69,471				74,272
Wholesale time deposits			171,929				178,610				120,524				68,164				73,037
Retail time deposits			532,202				316,068				321,982				319,381				322,912
Total interest-bearing deposits			2,448,954				1,923,567				1,863,288				1,865,009				1,843,495
Noninterest-bearing deposits			924,844				760,614				818,475				771,556				736,180
Total deposits		$	3,373,798			$	2,684,181			$	2,681,763			$	2,636,565			$	2,579,675

 

 

 

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, 2017				September 30, 2017				June 30, 2017				March 31, 2017				December 31, 2016				December 31, 2017				December 31, 2016
Interest income:
Interest and fees on loans and leases		$	32,245			$	30,892			$	29,143			$	28,482			$	28,230			$	120,762			$	110,536
Interest on cash and cash equivalents			37				36				35				66				53				174				168
Interest on investment securities			2,516				2,270				2,059				1,778				1,639				8,623				6,287
Total interest income			34,798				33,198				31,237				30,326				29,922				129,559				116,991
Interest expense:
Interest on deposits			2,739				2,198				1,983				1,828				1,780				8,748				5,833
Interest on short-term borrowings			579				547				237				27				22				1,390				93
Interest on FHLB advances and other borrowings			595				645				682				698				760				2,620				3,353
Interest on jr. subordinated debentures			46				-				-				-				-				46				-
Interest on subordinated notes			518				370				370				370				370				1,628				1,476
Total interest expense			4,477				3,760				3,272				2,923				2,932				14,432				10,755
Net interest income			30,321				29,438				27,965				27,403				26,990				115,127				106,236
Provision for loan and lease losses (the "Provision")			1,077				1,333				(83	)			291				1,059				2,618				4,326
Net interest income after Provision			29,244				28,105				28,048				27,112				25,931				112,509				101,910
Noninterest income:
Fees for wealth management services			9,974				9,651				9,807				9,303				9,327				38,735				36,690
Insurance revenue			1,510				1,373				943				763				715				4,589				3,722
Capital markets revenue			600				843				953				-				-				2,396				-
Service charges on deposits			655				676				630				647				688				2,608				2,791
Loan servicing and other fees			536				548				519				503				411				2,106				1,939
Net gain on sale of loans			493				799				520				629				607				2,441				3,048
Net gain (loss) on sale of investment securities available for sale			28				72				-				1				9				101				(77	)
Net (loss) gain on sale of other real estate owned			(92	)			-				(12	)			-				-				(104	)			(76	)
Dividends on FHLB and FRB stocks			290				217				218				214				309				939				1,063
Other operating income			1,542				1,405				1,207				1,167				1,182				5,321				4,868
Total noninterest income			15,536				15,584				14,785				13,227				13,248				59,132				53,968
Noninterest expense:
Salaries and wages			13,619				13,602				13,580				12,450				11,855				53,251				47,411
Employee benefits			2,787				2,631				2,475				2,559				2,207				10,452				9,548
Occupancy and bank premises			2,648				2,485				2,247				2,526				2,407				9,906				9,611
Furniture, fixtures and equipment			1,816				1,726				1,869				1,974				1,869				7,385				7,520
Advertising			386				277				405				386				391				1,454				1,381
Amortization of intangible assets			677				677				687				693				830				2,734				3,498
Impairment (recovery) of mortgage servicing rights ("MSRs")			(94	)			3				43				3				(580	)			(45	)			131
Due diligence, merger-related and merger integration expenses			3,507				850				1,236				511				-				6,104				-
Professional fees			769				739				1,049				711				963				3,268				3,659
Pennsylvania bank shares tax			16				317				297				664				(204	)			1,294				1,749
Information technology			1,006				880				821				874				857				3,581				3,661
Other operating expenses			3,919				3,997				3,786				3,309				4,492				15,011				13,505
Total noninterest expense			31,056				28,184				28,495				26,660				25,087				114,395				101,674
Income before income taxes			13,724				15,505				14,338				13,679				14,092				57,246				54,204
Income tax expense			19,924				4,766				4,905				4,635				4,684				34,230				18,168
Net income		$	(6,200	)		$	10,739			$	9,433			$	9,044			$	9,408			$	23,016			$	36,036
Per share data:
Weighted average shares outstanding			17,632,701				17,023,046				16,984,563				16,954,132				16,916,705				17,150,126				16,859,623
Dilutive common shares			-				230,936				248,204				228,557				247,970				231,106				168,499
Weighted average diluted shares			17,632,701				17,253,982				17,232,767				17,182,689				17,164,675				17,381,232				17,028,122
Basic earnings (loss) per common share		$	(0.35	)		$	0.63			$	0.56			$	0.53			$	0.56			$	1.34			$	2.14
Diluted earnings (loss) per common share		$	(0.35	)		$	0.62			$	0.55			$	0.53			$	0.55			$	1.32			$	2.12
Dividend declared per share		$	0.22			$	0.22			$	0.21			$	0.21			$	0.21			$	0.88			$	0.82
Effective tax rate			145.18	%			30.74	%			34.21	%			33.88	%			33.24	%			59.79	%			33.52	%

 

 

 

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, 2017												September 30, 2017												June 30, 2017												March 31, 2017												December 31, 2016												December 31, 2017												December 31, 2016
(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		$	43,962			$	37				0.33	%		$	26,628			$	36				0.54	%		$	26,266			$	35				0.53	%		$	39,669			$	66				0.67	%		$	55,298			$	53				0.38	%		$	34,122			$	174				0.51	%		$	43,214			$	168				0.39	%
Investment securities - available for sale:
Taxable			465,393				2,394				2.04	%			427,106				2,160				2.01	%			391,112				1,940				1.99	%			354,229				1,653				1.89	%			344,931				1,498				1.73	%			409,813				8,229				2.01	%			329,161				5,784				1.76	%
Tax-exempt			22,640				127				2.23	%			25,268				134				2.10	%			28,970				150				2.08	%			31,485				164				2.11	%			34,985				175				1.99	%			27,062				575				2.12	%			38,173				742				1.94	%
Total investment securities - available for sale			488,033				2,521				2.05	%			452,374				2,294				2.01	%			420,082				2,090				2.00	%			385,714				1,817				1.91	%			379,916				1,673				1.75	%			436,875				8,804				2.02	%			367,334				6,526				1.78	%
Investment securities - held to maturity			7,510				11				0.58	%			6,044				11				0.72	%			5,181				5				0.39	%			3,702				7				0.77	%			2,889				7				0.96	%			5,621				4				0.07	%			2,060				4				0.19	%
Investment securities - trading			4,425				25				2.24	%			4,282				8				0.74	%			4,137				13				1.26	%			3,890				8				0.83	%			3,853				16				1.65	%			4,185				2				0.05	%			3,740				2				0.05	%
Loans and leases *			2,805,255				32,403				4.58	%			2,680,317				31,058				4.60	%			2,615,610				29,309				4.49	%			2,555,677				28,622				4.54	%			2,517,967				28,354				4.48	%			2,664,944				121,391				4.56	%			2,429,416				110,925				4.57	%
Total interest-earning assets			3,349,185				34,997				4.15	%			3,169,645				33,407				4.18	%			3,071,276				31,452				4.11	%			2,988,652				30,520				4.14	%			2,959,923				30,103				4.05	%			3,145,747				130,375				4.14	%			2,845,764				117,625				4.13	%
Cash and due from banks			6,855												15,709												15,727												14,942												16,127												13,293												16,317
Less: allowance for loan and lease losses			(17,046	)											(16,564	)											(17,549	)											(17,580	)											(17,858	)											(17,181	)											(17,159	)
Other assets			301,673												273,116												263,853												258,046												257,676												274,287												260,728
Total assets		$	3,640,667											$	3,441,906											$	3,333,307											$	3,244,060											$	3,215,868											$	3,416,146											$	3,105,650
Liabilities:
Interest-bearing deposits:
Savings, NOW and market rate deposits		$	1,410,461			$	897				0.25	%		$	1,359,293			$	823				0.24	%		$	1,375,949			$	813				0.24	%		$	1,388,561			$	756				0.22	%		$	1,328,577			$	686				0.21	%		$	1,383,560			$	3,289				0.24	%		$	1,292,228			$	2,485				0.19	%
Wholesale deposits			262,643				822				1.24	%			190,849				548				1.14	%			154,424				378				0.98	%			143,461				317				0.90	%			156,541				319				0.81	%			188,179				2,065				1.10	%			163,724				1,240				0.76	%
Retail time deposits			358,066				1,020				1.13	%			321,352				827				1.02	%			323,287				792				0.98	%			320,172				755				0.96	%			324,158				775				0.95	%			330,797				3,394				1.03	%			266,772				2,108				0.79	%
Total interest-bearing deposits			2,031,170				2,739				0.53	%			1,871,494				2,198				0.47	%			1,853,660				1,983				0.43	%			1,852,194				1,828				0.40	%			1,809,276				1,780				0.39	%			1,902,536				8,748				0.46	%			1,722,724				5,833				0.34	%
Borrowings:
Short-term borrowings			180,650				579				1.27	%			182,845				547				1.19	%			98,869				237				0.96	%			47,603				27				0.23	%			40,629				22				0.22	%			128,008				1,390				1.09	%			37,041				93				0.25	%
Long-term FHLB advances			134,605				595				1.75	%			155,918				645				1.64	%			171,567				682				1.59	%			182,507				698				1.55	%			198,454				760				1.52	%			161,004				2,620				1.63	%			225,815				3,353				1.48	%
Jr. subordinated debt			3,957				46				4.61	%			-				-								-				-								-				-								-				-								997				46				4.61	%
Subordinated notes			43,844				518				4.69	%			29,564				370				4.97	%			29,550				370				5.02	%			29,537				370				5.08	%			29,523				370				4.99	%			33,153				1,628				4.91	%			29,503				1,476				5.00	%
Total borrowings			363,056				1,738				1.90	%			368,327				1,562				1.68	%			299,986				1,289				1.72	%			259,647				1,095				1.71	%			268,606				1,152				1.71	%			323,162				5,684				1.76	%			292,359				4,922				1.68	%
Total interest-bearing liabilities			2,394,226				4,477				0.74	%			2,239,821				3,760				0.67	%			2,153,646				3,272				0.61	%			2,111,841				2,923				0.56	%			2,077,882				2,932				0.56	%			2,225,698				14,432				0.65	%			2,015,083				10,755				0.53	%
Noninterest-bearing deposits			771,519												764,562												755,597												711,794												724,465												751,069												687,134
Other liabilities			47,604												40,166												34,348												38,211												35,478												40,109												33,904
Total noninterest-bearing liabilities			819,123												804,728												789,945												750,005												759,943												791,178												721,038
Total liabilities			3,213,349												3,044,549												2,943,591												2,861,846												2,837,825												3,016,876												2,736,121
Shareholders' equity			427,318												397,357												389,716												382,214												378,043												399,270												369,529
Total liabilities and shareholders' equity		$	3,640,667											$	3,441,906											$	3,333,307											$	3,244,060											$	3,215,868											$	3,416,146											$	3,105,650
Net interest spread											3.41	%											3.51	%											3.50	%											3.58	%											3.49	%											3.49	%											3.60	%
Effect of noninterest-bearing sources											0.21	%											0.20	%											0.18	%											0.16	%											0.16	%											0.20	%											0.16	%
Tax-equivalent net interest margin						$	30,520				3.62	%						$	29,647				3.71	%						$	28,180				3.68	%						$	27,597				3.74	%						$	27,171				3.65	%						$	115,943				3.69	%						$	106,870				3.76	%
Tax-equivalent adjustment						$	199				0.02	%						$	209				0.03	%						$	215				0.03	%						$	194				0.02	%						$	181				0.02	%						$	816				0.03	%						$	634				0.02	%
Supplemental Information Regarding Accretion of Fair Value Marks
						Interest Income (Expense) Effect				Effect on Yield or Rate								Interest Income (Expense) Effect				Effect on Yield or Rate								Interest Income (Expense) Effect				Effect on Yield or Rate								Interest Income (Expense) Effect				Effect on Yield or Rate								Interest Income (Expense) Effect				Effect on Yield or Rate								Interest Income (Expense) Effect				Effect on Yield or Rate								Interest Income (Expense) Effect				Effect on Yield or Rate
Loans and leases						$	276				0.04	%						$	708				0.10	%						$	402				0.06	%						$	726				0.12	%						$	742				0.12	%						$	2,112				0.08	%						$	3,349				0.14	%
Retail time deposits							(13	)			-0.01	%							(15	)			-0.02	%							(18	)			-0.02	%							(19	)			-0.02	%							(19	)			-0.02	%							(65	)			-0.02	%							(219	)			-0.08	%
Short-term borrowings							-				0.00	%							-				0.00	%							-				0.00	%							-				0.00	%							-				0.00	%							-				0.00	%							(12	)			-0.03	%
Long-term FHLB advances and other borrowings							(31	)			-0.09	%							(30	)			-0.08	%							(30	)			-0.07	%							(30	)			-0.07	%							(30	)			-0.06	%							(121	)			-0.08	%							(120	)			-0.05	%
Net interest income from fair value marks						$	320											$	753											$	450											$	775											$	791											$	2,298											$	3,700
Purchase accounting effect on tax-equivalent margin											0.04	%											0.09	%											0.06	%											0.11	%											0.11	%											0.07	%											0.13	%

 

* 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

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, 2017				September 30, 2017				June 30, 2017				March 31, 2017				December 31, 2016				December 31, 2017				December 31, 2016
Reconciliation of Net Income to Net Income (core):
Net income (a GAAP measure)		$	(6,200	)		$	10,739			$	9,433			$	9,044			$	9,408			$	23,016			$	36,036
Less: Tax-effected non-core noninterest income:
(Gain) loss on sale of investment securities available for sale			(18	)			(47	)			-				(1	)			(6	)			(66	)			50
Add: Tax-effected non-core noninterest expense items:
Due diligence, merger-related and merger integration expenses			2,280				553				803				332				-				3,968				-
Add: One-time federal income tax expense related to re-measurement of net deferred tax asset due to tax reform legislation.			15,193				-				-				-				-				15,193				-
Net income (core) (a non-GAAP measure)		$	11,255			$	11,245			$	10,236			$	9,375			$	9,402			$	42,111			$	36,086
Calculation of Basic and Diluted Earnings per Common Share (core):
Weighted average common shares outstanding			17,632,701				17,023,046				16,984,563				16,954,132				16,916,705				17,150,126				16,859,623
Dilutive common shares			231,038				230,936				248,204				228,557				247,970				231,106				177,491
Weighted average diluted shares			17,863,739				17,253,982				17,232,767				17,182,689				17,164,675				17,381,232				17,037,114
Basic earnings per common share (core) (a non-GAAP measure)		$	0.64			$	0.66			$	0.60			$	0.55			$	0.56			$	2.46			$	2.14
Diluted earnings per common share (core) (a non-GAAP measure)		$	0.63			$	0.65			$	0.59			$	0.55			$	0.55			$	2.42			$	2.12
Calculation of Return on Average Tangible Equity:
Net income (loss)		$	(6,200	)		$	10,739			$	9,433			$	9,044			$	9,408			$	23,016			$	36,036
Add: Tax-effected amortization and impairment of intangible assets			440				440				447				450				540				1,777				2,274
Net tangible income (numerator)		$	(5,760	)		$	11,179			$	9,880			$	9,494			$	9,948			$	24,793			$	38,310
Average shareholders' equity		$	427,318			$	397,357			$	389,716			$	382,214			$	378,043			$	399,270			$	369,529
Less: Average goodwill and intangible assets			(142,652	)			(128,917	)			(126,537	)			(124,884	)			(125,614	)			(130,791	)			(126,950	)
Net average tangible equity (denominator)		$	284,666			$	268,440			$	263,179			$	257,330			$	252,429			$	268,479			$	242,579
Return on tangible equity (a non-GAAP measure)			-8.03	%			16.52	%			15.06	%			14.96	%			15.68	%			9.23	%			15.79	%
Calculation of Tangible Equity Ratio:
Total shareholders' equity		$	528,119			$	401,892			$	394,977			$	388,095			$	381,127
Less: Goodwill and intangible assets			(205,855	)			(128,534	)			(129,211	)			(124,629	)			(125,170	)
Net tangible equity (numerator)		$	322,264			$	273,358			$	265,766			$	263,466			$	255,957
Total assets		$	4,449,720			$	3,476,821			$	3,438,219			$	3,292,617			$	3,421,530
Less: Goodwill and intangible assets			(205,855	)			(128,534	)			(129,211	)			(124,629	)			(125,170	)
Tangible assets (denominator)		$	4,243,865			$	3,348,287			$	3,309,008			$	3,167,988			$	3,296,360
Tangible equity ratio			7.59	%			8.16	%			8.03	%			8.32	%			7.76	%
Calculation of Return on Average Assets (core)
Return on average assets (GAAP)			-0.68	%			1.25	%			1.12	%			1.13	%			1.16	%			0.67	%			1.16	%
Effect of adjustment to GAAP net income to core net income			1.90	%			0.06	%			0.10	%			0.04	%			0.00	%			0.56	%			0.00	%
Return on average assets (core)			1.23	%			1.31	%			1.22	%			1.17	%			1.16	%			1.23	%			1.16	%
Calculation of Efficiency Ratio:
Noninterest expense		$	31,056			$	28,184			$	28,495			$	26,660			$	25,087			$	114,395			$	101,745
Less: certain noninterest expense items*:
Amortization of intangibles			(677	)			(677	)			(687	)			(693	)			(830	)			(2,734	)			(3,498	)
Due diligence, merger-related and merger integration expenses			(3,507	)			(850	)			(1,236	)			(511	)			-				(6,104	)			-
Noninterest expense (adjusted) (numerator)		$	26,872			$	26,657			$	26,572			$	25,456			$	24,257			$	105,557			$	98,247
Noninterest income		$	15,536			$	15,584			$	14,785			$	13,227			$	13,248			$	59,132			$	54,039
Less: non-core noninterest income items:
Loss (gain) on sale of investment securities available for sale			(28	)			(72	)			-				(2	)			(9	)			(101	)			77
Noninterest income (core)		$	15,508			$	15,512			$	14,785			$	13,225			$	13,239			$	59,031			$	54,116
Net interest income			30,321				29,438				27,965				27,403				26,990				115,127				106,236
Noninterest income (core) and net interest income (denominator)		$	45,829			$	44,950			$	42,750			$	40,628			$	40,229			$	174,158			$	160,352
Efficiency ratio			58.64	%			59.30	%			62.16	%			62.66	%			60.30	%			60.61	%			61.27	%
* 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.
Supplemental Loan and Allowance Information Used to Calculate Non-GAAP Measures
Total Allowance		$	17,525			$	17,004			$	16,399			$	17,107			$	17,486
Less: Allowance on acquired loans			50				47				25				38				28
Allowance on originated loans and leases		$	17,475			$	16,957			$	16,374			$	17,069			$	17,458
Total Allowance		$	17,525			$	17,004			$	16,399			$	17,107			$	17,486
Loan mark on acquired loans			31,627				10,223				11,084				11,544				12,286
Total Allowance + Loan mark		$	49,152			$	27,227			$	27,483			$	28,651			$	29,772
Total Portfolio loans and leases		$	3,285,857			$	2,677,345			$	2,666,651			$	2,555,589			$	2,535,425
Less: Originated loans and leases			2,487,295				2,433,054				2,409,964				2,286,814				2,240,987
Net acquired loans		$	798,562			$	244,291			$	256,687			$	268,775			$	294,438
Add: Loan mark on acquired loans			31,627				10,223				11,084				11,544				12,286
Gross acquired loans (excludes loan mark)		$	830,189			$	254,514			$	267,771			$	280,319			$	306,724
Originated loans and leases			2,487,295				2,433,054				2,409,964				2,286,814				2,240,987
Total Gross portfolio loans and leases		$	3,317,484			$	2,687,568			$	2,677,735			$	2,567,133			$	2,547,711