Attached files
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| 8-K - 8-K - BRYN MAWR BANK CORP | bmtc-20200420.htm |
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 First Quarter Earnings
Impacted by Increased Provision for Credit Losses Under CECL
Related to Economic Outlook Driven by the COVID-19 Pandemic,
Declares $0.26 Dividend
BRYN MAWR, Pa., April 20, 2020 - Driven by an increase in provision for credit losses on loans and leases reflecting the impact of the adverse economic outlook due to the COVID-19 pandemic on estimated lifetime losses under the new Current Expected Credit Loss standard (“CECL”), Bryn Mawr Bank Corporation (NASDAQ: BMTC) (the “Corporation”), parent of The Bryn Mawr Trust Company (the “Bank”), today reported a net loss of $11.2 million, or $(0.56) diluted earnings per share for the three months ended March 31, 2020, as compared to net income of $16.4 million, or $0.81 diluted earnings per share, for the three months ended December 31, 2019, and $10.7 million, or $0.53 diluted earnings per share, for the three months ended March 31, 2019.
As detailed in the appendix to this earnings release, management calculates core net income, a non-GAAP measure, which excludes one-time costs associated with our voluntary Years of Service Incentive Program. There were no meaningful non-core income or expense items for the three months ended March 31, 2020 or December 31, 2019. Core net income for the three months ended March 31, 2019 was $14.2 million, or $0.70 diluted earnings per share. A reconciliation of core net income and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release.
“As we all navigate the current challenges resulting from the COVID-19 pandemic, BMT remains focused on the safety of our people and providing our customers uninterrupted service. We are committed to assisting our small business community through our active participation in the SBA’s Paycheck Protection Program and our employees are working tirelessly to process applications and fund loans under the program,” commented Frank Leto, President and Chief Executive Officer, continuing, “The banking industry, under the new loan loss reserve guidelines, must take a forward-looking approach to the economy as a predictor of future loan losses. BMT’s historical loan losses have been very strong compared to our peers and credit quality did not materially deteriorate in the first quarter, however under this new guidance we must look out several years and reserve for potential losses now. This environment of uncertainly is expected to persist throughout 2020 and new economic data could indicate increases or reductions in our loan loss reserves. That said, the fundamentals of the Bank were strong as we entered this unprecedented time. Setting aside the provision for credit losses, we performed well in the first quarter and this speaks to our solid foundation supported by a diversified earnings profile, a strong capital base designed to withstand a stressed environment and robust sources of liquidity. This foundation coupled with our amazing team of professionals leave us well positioned to face any challenges and volatility from the economic environment,” Mr. Leto concluded.
On April 20, 2020, the Board of Directors of the Corporation declared a quarterly dividend of $0.26 per share, payable June 1, 2020 to shareholders of record as of April 30, 2020.
SIGNIFICANT ITEMS OF NOTE
Results of Operations – First Quarter 2020 Compared to Fourth Quarter 2019
•A net loss of $11.2 million, or $(0.56) diluted earnings per share for the three months ended March 31, 2020 as compared to net income of $16.4 million, or $0.81 diluted earnings per share, for the three months ended
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December 31, 2019, was primarily the result of a $30.1 million increase in provision for credit losses on loans and leases, as calculated under the CECL framework, driven by the COVID-19 pandemic. Other factors impacting net income included a $348 thousand increase in net interest income and decreases of $5.0 million and $7.2 million in noninterest income and income tax expense, respectively, for the three months ended March 31, 2020 as compared to the three months ended December 31, 2019.
•Net interest income for the three months ended March 31, 2020 was $36.3 million, an increase of $348 thousand over the linked quarter. Tax-equivalent net interest income for the three months ended March 31, 2020 was $36.4 million, an increase of $344 thousand over the linked quarter. Tax-equivalent net interest income for the first quarter of 2020 was positively impacted by the accretion of purchase accounting fair value marks of $949 thousand as compared to $1.1 million for the linked quarter. Excluding the effects of these purchase accounting fair value marks, the adjusted tax-equivalent net interest income for the three months ended March 31, 2020 was $35.5 million, an increase of $478 thousand over the linked quarter. A reconciliation of this and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release. Items contributing to the increase in tax-equivalent net interest income adjusted for purchase accounting included decreases of $1.1 million and $102 thousand in interest paid on deposits and interest expense on short-term borrowings, respectively, partially offset by decreases of $311 thousand and $274 thousand in tax-equivalent interest and fees earned on loans and leases and tax-equivalent interest income on available for sale investment securities, respectively, for the three months ended March 31, 2020 as compared to the linked quarter ended December 31, 2019.
Interest expense on deposits for the three months ended March 31, 2020 decreased $1.0 million over the linked quarter. The decrease was primarily due to a 15 basis point decrease in the tax-equivalent rate paid on average interest-bearing deposits for the three months ended March 31, 2020 as compared to the linked quarter. The effect of the decrease in the tax-equivalent rate paid was partially offset by an increase of $54.7 million in average interest-bearing deposits for the three months ended March 31, 2020 as compared to the linked quarter.
Interest expense on short-term borrowings for the three months ended March 31, 2020 decreased $102 thousand over the linked quarter. The decrease was primarily due to a 51 basis point decrease in the rate paid as compared to the linked quarter. The effect of the decrease in rate paid was partially offset by an increase of $19.0 million in average short-term borrowings as compared to the linked quarter.
Tax-equivalent interest and fees earned on loans and leases for the three months ended March 31, 2020 decreased $428 thousand as compared to the linked quarter. The decrease was primarily due to a 16 basis point decrease in the tax-equivalent yield on average loans and leases, driven by the current interest rate environment, for the three months ended March 31, 2020 as compared to the linked quarter. The effect of the decrease in the tax-equivalent yield was partially offset by an increase of $139.8 million in average loans and leases for the three months ended March 31, 2020 as compared to the linked quarter.
Tax-equivalent interest income on available for sale investment securities for the three months ended March 31, 2020 decreased $274 thousand as compared to the linked quarter. Average available for sale investment securities decreased $51.1 million over the linked quarter and experienced a six basis point increase in the tax-equivalent yield.
•The tax-equivalent net interest margin was 3.38% for the three months ended March 31, 2020 as compared to 3.36% 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 3.29% for the three months ended March 31, 2020 as compared to 3.26% for the linked quarter. A reconciliation of this and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release.
•Noninterest income of $18.3 million for the three months ended March 31, 2020 represented a $5.0 million decrease over the linked quarter. The decrease was primarily due to decreases of $3.1 million, $1.6 million, and $504 thousand in capital markets revenue, other operating income, and fees for wealth management services, respectively. The decrease in capital markets revenue was primarily due to higher volume and size of interest rate swap transactions with commercial loan customers for the three months ended December 31, 2019 as compared to the current quarter. The $1.6 million decrease in other operating income was primarily due to a $978 thousand loss on trading securities recorded in the first quarter of 2020 due to market fluctuations
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affecting the Corporation's executive and director supplemental retirement plan assets. The decrease in fees for wealth management services was primarily related to the impact of the decline in the market value of wealth assets under management, administration, supervision and brokerage (“wealth assets”) resulting from the volatility in the markets seen in the first quarter of 2020.
•Noninterest expense of $36.4 million for the three months ended March 31, 2020 was relatively unchanged, decreasing $12 thousand, as compared to the linked quarter. Decreases of $1.7 million, $386 thousand, $198 thousand, and $191 thousand in salaries and wages, professional fees, advertising expense, and occupancy and bank premises expense, respectively, were partially offset by increases of $1.5 million, $815 thousand, and $218 thousand in other operating expense, employee benefits and impairment of mortgage servicing rights, respectively. Included in other operating expense for the three months ended March 31, 2020 was a $3.0 million provision for credit losses on off-balance sheet credit exposures, an increase of $2.8 million as compared to the three months ended December 31, 2019, primarily driven by the adverse economic impacts of the COVID-19 pandemic as well as the Corporation's adoption of CECL.
•The provision for credit losses on loans and leases of $32.3 million for the three months ended March 31, 2020, which was calculated under CECL, effective January 1, 2020, increased $30.1 million as compared to $2.2 million for the three months ended December 31, 2019. The significant increase was driven by the current and forward-looking adverse economic impacts of the COVID-19 pandemic included in the estimation of expected credit losses on loans and leases. Net loan and lease charge-offs for the first quarter of 2020 totaled $4.1 million as compared to $400 thousand for the fourth quarter of 2019. The increase in net charge-offs was primarily due to an increase of $1.8 million in charge-offs on leases during the three months ended March 31, 2020, and a $1.1 million recovery on a commercial real estate loan during the three months ended December 31, 2019.
•The effective tax rate for the first quarter of 2020 increased to 20.94% as compared to 20.41% for the fourth quarter of 2019.
Results of Operations – First Quarter 2020 Compared to First Quarter 2019
•A net loss of $11.2 million, or $(0.56) diluted earnings per share for the three months ended March 31, 2020 as compared to net income of $10.7 million, or $0.53 diluted earnings per share, for the three months ended March 31, 2019, was primarily the result of a $28.6 million increase in provision for credit losses on loans and leases, as calculated under the CECL framework, driven by the COVID-19 pandemic. Other factors impacting net income included decreases of $1.3 million, $953 thousand, $3.3 million, and $5.7 million in net interest income, noninterest income, noninterest expense, and income tax expense, respectively, for the three months ended March 31, 2020 as compared to the three months ended March 31, 2019.
•Net interest income for the three months ended March 31, 2020 was $36.3 million, a decrease of $1.3 million as compared to the same period in 2019. Tax-equivalent net interest income for the three months ended March 31, 2020 was $36.4 million, a decrease of $1.3 million as compared to the same period in 2019. Tax-equivalent net interest income for the first quarter of 2020 was positively impacted by the accretion of purchase accounting fair value marks of $949 thousand as compared to $2.1 million for the same period in 2019. Excluding the effects of these purchase accounting fair value marks, the adjusted tax-equivalent net interest income for the three months ended March 31, 2020 was $35.5 million, a decrease of $141 thousand as compared to the same period in 2019. A reconciliation of this and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release. Items contributing to the decrease in tax-equivalent net interest income adjusted for purchase accounting included decreases of $973 thousand and $325 thousand in tax-equivalent interest and fees earned on loans and leases and tax-equivalent interest income on available for sale investment securities, respectively, partially offset by decreases of $564 thousand and $490 thousand in interest paid on deposits and interest expense on short-term borrowings, respectively, for the three months ended March 31, 2020 as compared to the same period in 2019.
Tax-equivalent interest and fees earned on loans and leases for the three months ended March 31, 2020 decreased $2.1 million as compared to the same period in 2019. The decrease was primarily due to a 62 basis point decrease in the tax-equivalent yield on average loans and leases, driven by the current interest rate environment, for the three months ended March 31, 2020 as compared to the same period in 2019. The effect of the decrease in the tax-equivalent yield was partially offset by an increase of $260.6 million in average loans and leases for the three months ended March 31, 2020 as compared to same period in 2019.
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Tax-equivalent interest income on available for sale investment securities for the three months ended March 31, 2020 decreased $325 thousand as compared to the same period in 2019. Average available for sale investment securities decreased by $32.3 million and experienced an 11 basis point tax-equivalent yield increase as compared to the same period in 2019.
Interest expense on deposits for the three months ended March 31, 2020 decreased $460 thousand as compared to the same period in 2019. The decrease was primarily due to a 15 basis point decrease in the tax-equivalent rate paid on average interest-bearing deposits for the three months ended March 31, 2020 as compared to the same period in 2019. The effect of the decrease in the tax-equivalent rate paid was partially offset by an increase of $179.5 million in average interest-bearing deposits for the three months ended March 31, 2020 as compared to the same period in 2019.
Interest expense on short-term borrowings for the three months ended March 31, 2020 decreased $490 thousand as compared to the same period in 2019. Average short-term borrowings decreased $17.1 million coupled with a 113 basis point decrease in the rate paid for the three months ended March 31, 2020 as compared to the same period in 2019.
•The tax-equivalent net interest margin was 3.38% for the three months ended March 31, 2020 as compared to 3.75% for the same period in 2019. Adjusting for the impacts of the accretion of purchase accounting fair value marks, the adjusted tax-equivalent net interest margin was 3.29% and 3.54% for three months ended March 31, 2020 and 2019, respectively. The main drivers for the decrease in the adjusted tax-equivalent net interest margin were the rate and volume changes of interest-bearing assets and liabilities as discussed in the above bullet points. A reconciliation of this and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release.
•Noninterest income of $18.3 million for the three months ended March 31, 2020 represented a $953 thousand decrease over the same period in 2019. The decrease was primarily due to decreases of $2.3 million, $148 thousand, and $139 thousand in other operating income, loan servicing and other fees, and insurance commissions, respectively, partially offset by increases of $776 thousand, $463 thousand, $172 thousand, and $142 thousand in fees for wealth management services, net gain on sale of loans, net gain on sale of other real estate owned, and capital markets revenue, respectively. The $2.3 million decrease in other operating income was primarily due to a $978 thousand loss on trading securities recorded in the first quarter of 2020, as compared to a $732 thousand gain on trading securities recorded in the first quarter of 2019, due to market fluctuations affecting the Corporation's executive and director supplemental retirement plan assets.
•Noninterest expense of $36.4 million for the three months ended March 31, 2020 represented a $3.3 million decrease over the same period in 2019. Contributing to the decrease were decreases of $3.9 million, $666 thousand, $293 thousand, and $237 thousand in salaries and wages, employee benefits, Pennsylvania bank shares tax expense, and occupancy and bank premises expense, respectively, partially offset by an increase of $1.5 million in other operating expense. The decreases in salaries and wages and employee benefits was largely driven by the $4.5 million one-time expense from the voluntary Years of Service Incentive Program recorded in the first quarter of 2019. Included in other operating expense for the three months ended March 31, 2020 was a $3.0 million provision for credit losses on off-balance sheet credit exposures, an increase of $3.1 million as compared to the same period in 2019, primarily driven by the adverse economic impacts of the COVID-19 pandemic as well as the Corporation’s adoption of CECL.
•The provision for credit losses on loans and leases of $32.3 million for the three months ended March 31, 2020, which was calculated under CECL, effective January 1, 2020, increased $28.6 million as compared to $3.7 million for the three months ended March 31, 2019. The significant increase was driven by the current and forward-looking adverse economic impacts of the COVID-19 pandemic included in the estimation of expected credit losses on loans and leases. Net loan and lease charge-offs for the first quarter of 2020 totaled $4.1 million as compared to $2.5 million for the first quarter of 2019.
•The effective tax rate for the first quarter of 2020 increased to 20.94% as compared to 20.57% for the first quarter of 2019.
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Financial Condition – March 31, 2020 Compared to December 31, 2019
•Total assets as of March 31, 2020 were $4.92 billion, a decrease of $340.2 million from December 31, 2019. The decrease was primarily due to the $489.5 million decrease in available for sale investment securities discussed in the bullet point below, partially offset by the $77.9 million increase in portfolio loans and leases discussed in the bullet point below and $87.1 million increase in other assets driven by an $86.0 million increase in the fair value of interest rate swaps.
•Available for sale investment securities as of March 31, 2020 totaled $516.5 million, a decrease of $489.5 million from December 31, 2019. The decrease was primarily due to the maturing, in January 2020, of $500.0 million of short-term U.S. Treasury securities included on the balance sheet as of December 31, 2019.
•Total portfolio loans and leases of $3.77 billion as of March 31, 2020 increased by $77.9 million from December 31, 2019, an increase of 2.1%. Increases of $59.1 million, $18.9 million, and $17.2 million in commercial and industrial loans, construction loans, and commercial real estate loans (non-owner occupied), respectively, were partially offset by decreases of $15.0 million and $11.3 million in home equity lines of credit and consumer loans, respectively. In conjunction with the adoption of CECL, the Corporation has revised its portfolio segmentation to align with the methodology applied in determining the allowance for credit losses (“ACL”) for loans and leases under CECL, which is based on Federal call report codes which classify loans based on the primary collateral supporting the loan. Portfolio segmentation prior to the adoption of CECL was based on product type or purpose. As such, certain reclassifications were made to conform previous years to the current year's presentation.
•The ACL on loans and leases was $22.6 million as of December 31, 2019. Effective January 1, 2020, the Corporation adopted CECL and recognized an increase in the ACL on loans and leases of approximately $3.2 million, as a cumulative effect of a change in accounting principle, with a corresponding decrease, net of tax, in retained earnings. The ACL on loans and leases was $54.1 million as of March 31, 2019, an increase of $31.5 million as compared to December 31, 2019. The significant increase was driven by the current and forward-looking adverse economic impacts of the COVID-19 pandemic included in the estimation of expected credit losses on loans and leases as of March 31, 2020 as compared to our initial adoption of CECL.
•Deposits of $3.78 billion as of March 31, 2020 decreased $63.3 million from December 31, 2019. A decrease of $194.8 million in interest-bearing demand accounts was partially offset by increases of $29.7 million, $27.5 million, $27.3 million, $24.2 million, and $21.0 million in noninterest bearing deposits, money market accounts, savings accounts, wholesale time deposits, and wholesale non-maturity deposits, respectively.
•Borrowings of $329.9 million as of March 31, 2020, which include short-term borrowings, long-term FHLB advances, subordinated notes and junior subordinated debentures decreased $336.1 million from December 31, 2019, primarily due to a decrease of $331.2 million in short-term borrowings.
•Wealth assets totaled $15.59 billion as of March 31, 2020, a decrease of $954.3 million from December 31, 2019. The decrease in wealth assets was primarily the result of the volatility in the markets experienced in the first quarter of 2020, partially offset by additions through new business during the quarter. As of March 31, 2020, wealth assets consisted of $9.59 billion of wealth assets where fees are set at fixed amounts, an increase of $20.7 million from December 31, 2019, and $6.00 billion of wealth assets where fees are predominantly determined based on the market value of the assets held in their accounts, a decrease of $975.0 million from December 31, 2019.
•The capital ratios for the Bank and the Corporation, as of March 31, 2020, as shown in the attached tables, indicate regulatory capital levels in excess of the regulatory minimums and the levels necessary for the Bank to be considered “well capitalized.” In March 2020, the U.S. banking agencies issued an interim final rule that provides banking organizations with an alternative option to delay for two years an estimate of CECL’s effect on regulatory capital, relative to the incurred loss methodology’s effect on regulatory capital, followed by a three-year transition period. The March 31, 2020 ratios reflect the Corporation's planned election of the five-year transition provision.
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OTHER MATTERS
Given the uncertainty and potential volatility of the COVID-19 pandemic on our business and operations in 2020, the Corporation is withdrawing the 2020 targets and financial outlook that were issued, and furnished to the Securities and Exchange Commission on Form 8-K, on February 12, 2020.
EARNINGS CONFERENCE CALL
The Corporation will hold an earnings conference call at 8:30 a.m. Eastern Time on Tuesday, April 21, 2020. Interested parties may participate by calling 1-888-317-6016. A taped replay of the conference call will be available one hour after the conclusion of the call and will remain available through 9:00 a.m. Eastern Time on Thursday, May 21, 2020. This recording may be obtained by calling 1-877-344-7529, referring to conference number 10141874.
The Corporation will simultaneously broadcast the earnings conference call live over the Internet through a webcast on the investor relations portion of the Corporation’s website. To access the call via the Internet, please visit the website at http://services.choruscall.com/links/bmtc200421.html. An online archive of the webcast will be available within one hour of the conclusion of the earnings conference call.
The Corporation’s decision to hold an earnings conference call for the first quarter of 2020 is not indicative of the Corporation’s future plans with respect to earnings conference calls, and decisions regarding whether to continue holding earnings conference calls will be made at a future date.
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. The COVID-19 pandemic is adversely affecting us, our customers, counterparties, employees, and third-party service providers, and the ultimate extent of the impacts on our business, financial position, results of operations, liquidity, and prospects is uncertain. Continued deterioration in general business and economic conditions, including further increases in unemployment rates, or turbulence in domestic or global financial markets could adversely affect our revenues and the values of our assets and liabilities, reduce the availability of funding, lead to a tightening of credit, and further increase stock price volatility. In addition, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response to COVID-19, could affect us in substantial and unpredictable ways. Other factors include, among others, our need for capital, our ability to control operating costs and expenses, and to manage loan and lease delinquency rates; the credit risks of lending activities and overall quality of the composition of our loan, lease and securities portfolio; the impact of economic conditions, consumer and business spending habits, and real estate market conditions on our business and in our market area; changes in the levels of general interest rates, deposit interest rates, or net interest margin and funding sources; changes in banking regulations and policies and the possibility that any banking agency approvals we might require for certain activities will not be obtained in a timely manner or at all or will be conditioned in a manner that would impair our ability to implement our business plans; changes in accounting policies and practices or accounting standards, including ASU 2016-13 (Topic 326), “Measurement of Credit Losses on Financial Instruments,” commonly referenced as the Current Expected Credit Loss model, which has changed how we estimate credit losses and may result in further increases in the required level of our allowance for credit losses; unanticipated regulatory or legal proceedings, outcomes of litigation or other contingencies; cybersecurity events;
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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; uncertainty regarding the future of LIBOR; the impact of public health issues and pandemics, and their effects on the economic and business environments in which we operate, the effect of the COVID-19 pandemic, including on our credit quality and business operations, as well as its impact on general economic and financial market conditions; and other factors as described in our securities filings with the SEC. All forward-looking statements and information set forth herein are based on Corporation 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 SEC, including our most recent Annual Report on Form 10-K, as updated by our quarterly or other reports subsequently filed with the SEC.
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Bryn Mawr Bank Corporation
Summary Financial Information (unaudited)
(dollars in thousands, except per share data)
| As of or For the Three Months Ended | |||||||||||||||||||||||||||||
| March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | |||||||||||||||||||||||||
| Consolidated Balance Sheet (selected items) | |||||||||||||||||||||||||||||
| Interest-bearing deposits with banks | $ | 69,239 | $ | 42,328 | $ | 86,158 | $ | 49,643 | $ | 29,449 | |||||||||||||||||||
| Investment securities | 537,592 | 1,027,182 | 625,452 | 606,844 | 578,629 | ||||||||||||||||||||||||
| Loans held for sale | 2,785 | 4,249 | 5,767 | 6,333 | 2,884 | ||||||||||||||||||||||||
| Portfolio loans and leases | 3,767,166 | 3,689,313 | 3,540,747 | 3,534,665 | 3,523,514 | ||||||||||||||||||||||||
| Allowance for credit losses ("ACL") on loans and leases | (54,070) | (22,602) | (20,777) | (21,182) | (20,616) | ||||||||||||||||||||||||
| Goodwill and other intangible assets | 202,225 | 203,143 | 204,096 | 205,050 | 206,006 | ||||||||||||||||||||||||
| Total assets | 4,923,033 | 5,263,259 | 4,828,641 | 4,736,565 | 4,631,993 | ||||||||||||||||||||||||
| Deposits - interest-bearing | 2,850,986 | 2,944,072 | 2,794,079 | 2,691,502 | 2,755,307 | ||||||||||||||||||||||||
| Deposits - non-interest-bearing | 927,922 | 898,173 | 904,409 | 940,911 | 882,310 | ||||||||||||||||||||||||
| Short-term borrowings | 162,045 | 493,219 | 203,471 | 207,828 | 124,214 | ||||||||||||||||||||||||
| Long-term FHLB advances | 47,303 | 52,269 | 44,735 | 47,941 | 55,407 | ||||||||||||||||||||||||
| Subordinated notes | 98,750 | 98,705 | 98,660 | 98,616 | 98,571 | ||||||||||||||||||||||||
| Jr. subordinated debentures | 21,798 | 21,753 | 21,709 | 21,665 | 21,622 | ||||||||||||||||||||||||
| Total liabilities | 4,329,854 | 4,651,032 | 4,227,706 | 4,146,410 | 4,056,886 | ||||||||||||||||||||||||
| Total shareholders' equity | 593,179 | 612,227 | 600,935 | 590,155 | 575,107 | ||||||||||||||||||||||||
| Average Balance Sheet (selected items) | |||||||||||||||||||||||||||||
| Interest-bearing deposits with banks | 50,330 | 66,060 | 48,597 | 37,843 | 32,742 | ||||||||||||||||||||||||
| Investment securities | 542,876 | 593,289 | 622,336 | 587,518 | 569,915 | ||||||||||||||||||||||||
| Loans held for sale | 2,319 | 4,160 | 4,375 | 3,353 | 1,214 | ||||||||||||||||||||||||
| Portfolio loans and leases | 3,736,067 | 3,594,449 | 3,528,548 | 3,520,866 | 3,476,525 | ||||||||||||||||||||||||
| Total interest-earning assets | 4,331,592 | 4,257,958 | 4,203,856 | 4,149,580 | 4,080,396 | ||||||||||||||||||||||||
| Goodwill and intangible assets | 202,760 | 203,663 | 204,637 | 205,593 | 206,716 | ||||||||||||||||||||||||
| Total assets | 4,844,918 | 4,775,407 | 4,760,074 | 4,651,625 | 4,545,129 | ||||||||||||||||||||||||
| Deposits - interest-bearing | 2,853,712 | 2,799,050 | 2,776,226 | 2,794,854 | 2,674,194 | ||||||||||||||||||||||||
| Short-term borrowings | 140,585 | 121,612 | 169,985 | 68,529 | 157,652 | ||||||||||||||||||||||||
| Long-term FHLB advances | 47,335 | 53,443 | 45,698 | 52,397 | 55,385 | ||||||||||||||||||||||||
| Subordinated notes | 98,725 | 98,681 | 98,634 | 98,587 | 98,542 | ||||||||||||||||||||||||
| Jr. subordinated debentures | 21,768 | 21,726 | 21,680 | 21,637 | 21,595 | ||||||||||||||||||||||||
| Total interest-bearing liabilities | 3,162,125 | 3,094,512 | 3,112,223 | 3,036,004 | 3,007,368 | ||||||||||||||||||||||||
| Total liabilities | 4,229,908 | 4,168,899 | 4,164,763 | 4,070,160 | 3,973,043 | ||||||||||||||||||||||||
| Total shareholders' equity | 615,010 | 606,508 | 595,311 | 581,465 | 572,086 | ||||||||||||||||||||||||
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Bryn Mawr Bank Corporation
Summary Financial Information (unaudited)
(dollars in thousands, except per share data)
| As of or For the Three Months Ended | |||||||||||||||||||||||||||||
| March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | |||||||||||||||||||||||||
| Income Statement | |||||||||||||||||||||||||||||
| Net interest income | $ | 36,333 | $ | 35,985 | $ | 37,398 | $ | 36,611 | $ | 37,647 | |||||||||||||||||||
| Provision for loan and lease losses | 32,335 | 2,225 | 919 | 1,627 | 3,736 | ||||||||||||||||||||||||
| Noninterest income | 18,300 | 23,255 | 19,455 | 20,221 | 19,253 | ||||||||||||||||||||||||
| Noninterest expense | 36,418 | 36,430 | 35,173 | 35,188 | 39,724 | ||||||||||||||||||||||||
| Income tax (benefit) expense | (2,957) | 4,202 | 4,402 | 4,239 | 2,764 | ||||||||||||||||||||||||
| Net (loss) income | (11,163) | 16,383 | 16,359 | 15,778 | 10,676 | ||||||||||||||||||||||||
| Net loss attributable to noncontrolling interest | — | (1) | (1) | (7) | (1) | ||||||||||||||||||||||||
| Net (loss) income attributable to Bryn Mawr Bank Corporation | (11,163) | 16,384 | 16,360 | 15,785 | 10,677 | ||||||||||||||||||||||||
| Basic earnings per share | (0.56) | 0.81 | 0.81 | 0.78 | 0.53 | ||||||||||||||||||||||||
| Diluted earnings per share | (0.56) | 0.81 | 0.81 | 0.78 | 0.53 | ||||||||||||||||||||||||
Net (loss) income (core) (1) | (11,163) | 16,384 | 16,360 | 15,785 | 14,230 | ||||||||||||||||||||||||
Basic earnings per share (core) (1) | (0.56) | 0.81 | 0.81 | 0.78 | 0.71 | ||||||||||||||||||||||||
Diluted earnings per share (core) (1) | (0.56) | 0.81 | 0.81 | 0.78 | 0.70 | ||||||||||||||||||||||||
| Dividends paid or accrued per share | 0.26 | 0.26 | 0.26 | 0.25 | 0.25 | ||||||||||||||||||||||||
| Profitability Indicators | |||||||||||||||||||||||||||||
| Return on average assets | (0.93) | % | 1.36 | % | 1.36 | % | 1.36 | % | 0.95 | % | |||||||||||||||||||
| Return on average equity | (7.30) | % | 10.72 | % | 10.90 | % | 10.89 | % | 7.57 | % | |||||||||||||||||||
Return on tangible equity(1) | (10.17) | % | 16.85 | % | 17.35 | % | 17.62 | % | 12.65 | % | |||||||||||||||||||
Return on tangible equity (core)(1) | (10.17) | % | 16.85 | % | 17.35 | % | 17.62 | % | 16.59 | % | |||||||||||||||||||
Return on average assets (core)(1) | (0.93) | % | 1.36 | % | 1.36 | % | 1.36 | % | 1.27 | % | |||||||||||||||||||
Return on average equity (core)(1) | (7.30) | % | 10.72 | % | 10.90 | % | 10.89 | % | 10.09 | % | |||||||||||||||||||
| Tax-equivalent net interest margin | 3.38 | % | 3.36 | % | 3.54 | % | 3.55 | % | 3.75 | % | |||||||||||||||||||
Efficiency ratio(1) | 64.98 | % | 59.89 | % | 60.19 | % | 60.23 | % | 60.26 | % | |||||||||||||||||||
| Share Data | |||||||||||||||||||||||||||||
| Closing share price | $ | 28.38 | $ | 41.24 | $ | 36.51 | $ | 37.32 | $ | 36.13 | |||||||||||||||||||
| Book value per common share | $ | 29.78 | $ | 30.42 | $ | 29.86 | $ | 29.31 | $ | 28.52 | |||||||||||||||||||
| Tangible book value per common share | $ | 19.66 | $ | 20.36 | $ | 19.75 | $ | 19.16 | $ | 18.34 | |||||||||||||||||||
| Price / book value | 95.30 | % | 135.57 | % | 122.27 | % | 127.33 | % | 126.68 | % | |||||||||||||||||||
| Price / tangible book value | 144.35 | % | 202.55 | % | 184.86 | % | 194.78 | % | 197.00 | % | |||||||||||||||||||
| Weighted average diluted shares outstanding | 20,053,159 | 20,213,008 | 20,208,630 | 20,244,409 | 20,271,661 | ||||||||||||||||||||||||
| Shares outstanding, end of period | 19,921,524 | 20,126,296 | 20,124,193 | 20,131,854 | 20,167,729 | ||||||||||||||||||||||||
| Wealth Management Information: | |||||||||||||||||||||||||||||
Wealth assets under mgmt, administration, supervision and brokerage (2) | $ | 15,593,732 | $ | 16,548,060 | $ | 15,609,786 | $ | 14,815,298 | $ | 14,736,512 | |||||||||||||||||||
| Fees for wealth management services | $ | 11,168 | $ | 11,672 | $ | 10,826 | $ | 11,510 | $ | 10,392 | |||||||||||||||||||
9
Bryn Mawr Bank Corporation
Summary Financial Information (unaudited)
(dollars in thousands, except per share data)
| As of or For the Three Months Ended | |||||||||||||||||||||||||||||
| March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | |||||||||||||||||||||||||
Capital Ratios(3) | |||||||||||||||||||||||||||||
| Bryn Mawr Trust Company ("BMTC") | |||||||||||||||||||||||||||||
| Tier I capital to risk weighted assets ("RWA") | 11.12 | % | 11.47 | % | 12.17 | % | 11.83 | % | 11.30 | % | |||||||||||||||||||
| Total capital to RWA | 12.35 | % | 12.09 | % | 12.75 | % | 12.42 | % | 11.87 | % | |||||||||||||||||||
| Tier I leverage ratio | 9.12 | % | 9.37 | % | 9.75 | % | 9.61 | % | 9.48 | % | |||||||||||||||||||
Tangible equity ratio (1) | 8.98 | % | 8.58 | % | 9.75 | % | 9.58 | % | 9.34 | % | |||||||||||||||||||
| Common equity Tier I capital to RWA | 11.12 | % | 11.47 | % | 12.17 | % | 11.83 | % | 11.30 | % | |||||||||||||||||||
| Bryn Mawr Bank Corporation ("BMBC") | |||||||||||||||||||||||||||||
| Tier I capital to RWA | 10.82 | % | 11.42 | % | 11.33 | % | 11.12 | % | 10.72 | % | |||||||||||||||||||
| Total capital to RWA | 14.64 | % | 14.69 | % | 14.61 | % | 14.44 | % | 14.00 | % | |||||||||||||||||||
| Tier I leverage ratio | 8.88 | % | 9.33 | % | 9.07 | % | 9.04 | % | 8.99 | % | |||||||||||||||||||
Tangible equity ratio (1) | 8.30 | % | 8.10 | % | 8.60 | % | 8.51 | % | 8.35 | % | |||||||||||||||||||
| Common equity Tier I capital to RWA | 10.27 | % | 10.86 | % | 10.75 | % | 10.54 | % | 10.14 | % | |||||||||||||||||||
| Asset Quality Indicators | |||||||||||||||||||||||||||||
| Net loan and lease charge-offs ("NCO"s) | $ | 4,073 | $ | 400 | $ | 1,324 | $ | 1,061 | $ | 2,546 | |||||||||||||||||||
| Nonperforming loans and leases ("NPL"s) | $ | 7,557 | $ | 10,648 | $ | 14,119 | $ | 12,179 | $ | 19,283 | |||||||||||||||||||
| Other real estate owned ("OREO") | — | — | 72 | 155 | 84 | ||||||||||||||||||||||||
| Total nonperforming assets ("NPA"s) | $ | 7,557 | $ | 10,648 | $ | 14,191 | $ | 12,334 | $ | 19,367 | |||||||||||||||||||
| Nonperforming loans and leases 30 or more days past due | $ | 3,380 | $ | 6,314 | $ | 4,940 | $ | 8,224 | $ | 8,489 | |||||||||||||||||||
| Performing loans and leases 30 to 89 days past due | 19,930 | 7,196 | 5,273 | 9,466 | 6,432 | ||||||||||||||||||||||||
| Performing loans and leases 90 or more days past due | — | — | — | — | — | ||||||||||||||||||||||||
| Total delinquent loans and leases | $ | 23,310 | $ | 13,510 | $ | 10,213 | $ | 17,690 | $ | 14,921 | |||||||||||||||||||
| Delinquent loans and leases to total loans and leases | 0.62 | % | 0.37 | % | 0.29 | % | 0.50 | % | 0.42 | % | |||||||||||||||||||
| Delinquent performing loans and leases to total loans and leases | 0.53 | % | 0.19 | % | 0.15 | % | 0.27 | % | 0.18 | % | |||||||||||||||||||
| NCOs / average loans and leases (annualized) | 0.44 | % | 0.04 | % | 0.15 | % | 0.12 | % | 0.30 | % | |||||||||||||||||||
| NPLs / total portfolio loans and leases | 0.20 | % | 0.29 | % | 0.40 | % | 0.34 | % | 0.55 | % | |||||||||||||||||||
| NPAs / total loans and leases and OREO | 0.20 | % | 0.29 | % | 0.40 | % | 0.35 | % | 0.55 | % | |||||||||||||||||||
| NPAs / total assets | 0.15 | % | 0.20 | % | 0.29 | % | 0.26 | % | 0.42 | % | |||||||||||||||||||
| ACL / NPLs | 715.50 | % | 212.27 | % | 147.16 | % | 173.92 | % | 106.91 | % | |||||||||||||||||||
| ACL / portfolio loans | 1.44 | % | 0.61 | % | 0.59 | % | 0.60 | % | 0.59 | % | |||||||||||||||||||
ACL for originated loans and leases / Originated loans and leases (1) | 1.47 | % | 0.68 | % | 0.66 | % | 0.68 | % | 0.68 | % | |||||||||||||||||||
(Total ACL + Loan mark) / Total Gross portfolio loans and leases (1) | 1.68 | % | 0.91 | % | 0.92 | % | 1.00 | % | 1.03 | % | |||||||||||||||||||
| Troubled debt restructurings ("TDR"s) included in NPLs | $ | 3,248 | $ | 3,018 | $ | 5,755 | $ | 4,190 | $ | 4,057 | |||||||||||||||||||
| TDRs in compliance with modified terms | 4,852 | 5,071 | 5,069 | 5,141 | 5,149 | ||||||||||||||||||||||||
| Total TDRs | $ | 8,100 | $ | 8,089 | $ | 10,824 | $ | 9,331 | $ | 9,206 | |||||||||||||||||||
(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. The March 31, 2020 ratios reflect the Corporation’s planned election of a five-year transition provision to delay for two years the full impact of CECL on regulatory capital, followed by a three-year transition period.
10
Bryn Mawr Bank Corporation
Detailed Balance Sheets (unaudited)
(dollars in thousands)
| March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | |||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Cash and due from banks | $ | 17,803 | $ | 11,603 | $ | 8,582 | $ | 13,742 | $ | 13,656 | |||||||||||||||||||
| Interest-bearing deposits with banks | 69,239 | 42,328 | 86,158 | 49,643 | 29,449 | ||||||||||||||||||||||||
| Cash and cash equivalents | 87,042 | 53,931 | 94,740 | 63,385 | 43,105 | ||||||||||||||||||||||||
| Investment securities, available for sale | 516,466 | 1,005,984 | 604,181 | 588,119 | 559,983 | ||||||||||||||||||||||||
| Investment securities, held to maturity | 13,369 | 12,577 | 12,947 | 10,209 | 10,457 | ||||||||||||||||||||||||
| Investment securities, trading | 7,757 | 8,621 | 8,324 | 8,516 | 8,189 | ||||||||||||||||||||||||
| Loans held for sale | 2,785 | 4,249 | 5,767 | 6,333 | 2,884 | ||||||||||||||||||||||||
| Portfolio loans and leases, originated | 3,424,601 | 3,320,816 | 3,137,769 | 3,088,849 | 3,032,270 | ||||||||||||||||||||||||
| Portfolio loans and leases, acquired | 342,565 | 368,497 | 402,978 | 445,816 | 491,244 | ||||||||||||||||||||||||
| Total portfolio loans and leases | 3,767,166 | 3,689,313 | 3,540,747 | 3,534,665 | 3,523,514 | ||||||||||||||||||||||||
| Less: Allowance for credit losses on originated loans and leases | (50,365) | (22,526) | (20,675) | (21,076) | (20,519) | ||||||||||||||||||||||||
| Less: Allowance for credit losses on acquired loans and leases | (3,705) | (76) | (102) | (106) | (97) | ||||||||||||||||||||||||
| Total allowance for credit losses on loans and lease | (54,070) | (22,602) | (20,777) | (21,182) | (20,616) | ||||||||||||||||||||||||
| Net portfolio loans and leases | 3,713,096 | 3,666,711 | 3,519,970 | 3,513,483 | 3,502,898 | ||||||||||||||||||||||||
| Premises and equipment | 63,144 | 64,965 | 66,439 | 68,092 | 67,279 | ||||||||||||||||||||||||
| Operating lease right-of-use assets | 40,157 | 40,961 | 42,200 | 43,116 | 43,985 | ||||||||||||||||||||||||
| Accrued interest receivable | 12,017 | 12,482 | 12,746 | 13,312 | 13,123 | ||||||||||||||||||||||||
| Mortgage servicing rights | 4,115 | 4,450 | 4,580 | 4,744 | 4,910 | ||||||||||||||||||||||||
| Bank owned life insurance | 59,399 | 59,079 | 58,749 | 58,437 | 58,138 | ||||||||||||||||||||||||
| Federal Home Loan Bank ("FHLB") stock | 11,928 | 23,744 | 16,148 | 14,677 | 10,526 | ||||||||||||||||||||||||
| Goodwill | 184,012 | 184,012 | 184,012 | 184,012 | 184,012 | ||||||||||||||||||||||||
| Intangible assets | 18,213 | 19,131 | 20,084 | 21,038 | 21,994 | ||||||||||||||||||||||||
| Other investments | 16,786 | 16,683 | 16,683 | 16,517 | 16,526 | ||||||||||||||||||||||||
| Other assets | 172,747 | 85,679 | 161,071 | 122,575 | 83,984 | ||||||||||||||||||||||||
| Total assets | $ | 4,923,033 | $ | 5,263,259 | $ | 4,828,641 | $ | 4,736,565 | $ | 4,631,993 | |||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||
| Deposits | |||||||||||||||||||||||||||||
| Noninterest-bearing | $ | 927,922 | $ | 898,173 | $ | 904,409 | $ | 940,911 | $ | 882,310 | |||||||||||||||||||
| Interest-bearing | 2,850,986 | 2,944,072 | 2,794,079 | 2,691,502 | 2,755,307 | ||||||||||||||||||||||||
| Total deposits | 3,778,908 | 3,842,245 | 3,698,488 | 3,632,413 | 3,637,617 | ||||||||||||||||||||||||
| Short-term borrowings | 162,045 | 493,219 | 203,471 | 207,828 | 124,214 | ||||||||||||||||||||||||
| Long-term FHLB advances | 47,303 | 52,269 | 44,735 | 47,941 | 55,407 | ||||||||||||||||||||||||
| Subordinated notes | 98,750 | 98,705 | 98,660 | 98,616 | 98,571 | ||||||||||||||||||||||||
| Jr. subordinated debentures | 21,798 | 21,753 | 21,709 | 21,665 | 21,622 | ||||||||||||||||||||||||
| Operating lease liabilities | 44,482 | 45,258 | 46,506 | 47,393 | 48,224 | ||||||||||||||||||||||||
| Accrued interest payable | 7,230 | 6,248 | 9,015 | 8,244 | 8,674 | ||||||||||||||||||||||||
| Other liabilities | 169,338 | 91,335 | 105,122 | 82,310 | 62,557 | ||||||||||||||||||||||||
| Total liabilities | 4,329,854 | 4,651,032 | 4,227,706 | 4,146,410 | 4,056,886 | ||||||||||||||||||||||||
| Shareholders' equity | |||||||||||||||||||||||||||||
| Common stock | 24,655 | 24,650 | 24,646 | 24,583 | 24,577 | ||||||||||||||||||||||||
| Paid-in capital in excess of par value | 379,495 | 378,606 | 377,806 | 376,652 | 375,655 | ||||||||||||||||||||||||
| Less: common stock held in treasury, at cost | (88,540) | (81,174) | (81,089) | (78,583) | (76,974) | ||||||||||||||||||||||||
| Accumulated other comprehensive income (loss), net of tax | 8,869 | 2,187 | 2,698 | 1,700 | (3,278) | ||||||||||||||||||||||||
| Retained earnings | 269,395 | 288,653 | 277,568 | 266,496 | 255,813 | ||||||||||||||||||||||||
| Total Bryn Mawr Bank Corporation shareholders' equity | 593,874 | 612,922 | 601,629 | 590,848 | 575,793 | ||||||||||||||||||||||||
| Noncontrolling interest | (695) | (695) | (694) | (693) | (686) | ||||||||||||||||||||||||
| Total shareholders' equity | 593,179 | 612,227 | 600,935 | 590,155 | 575,107 | ||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 4,923,033 | $ | 5,263,259 | $ | 4,828,641 | $ | 4,736,565 | $ | 4,631,993 | |||||||||||||||||||
11
Bryn Mawr Bank Corporation
Supplemental Balance Sheet Information (unaudited)
(dollars in thousands)
Portfolio Loans and Leases(1) as of | |||||||||||||||||||||||||||||
| March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | |||||||||||||||||||||||||
| Commercial Real Estate Loans - Non-owner Occupied | $ | 1,354,416 | $ | 1,337,167 | $ | 1,238,881 | $ | 1,217,763 | $ | 1,222,670 | |||||||||||||||||||
| Commercial Real Estate Loans - Owner Occupied | 530,667 | 527,607 | 499,202 | 514,013 | 511,090 | ||||||||||||||||||||||||
| Home equity lines of credit | 209,278 | 224,262 | 227,682 | 231,697 | 228,902 | ||||||||||||||||||||||||
| Residential Mortgages - secured by first liens | 710,495 | 706,690 | 702,588 | 704,605 | 703,241 | ||||||||||||||||||||||||
| Residential Mortgages - secured by junior liens | 35,583 | 36,843 | 37,240 | 39,063 | 41,254 | ||||||||||||||||||||||||
| Construction | 221,116 | 202,198 | 195,161 | 195,269 | 202,717 | ||||||||||||||||||||||||
| Total real estate loans | 3,061,555 | 3,034,767 | 2,900,754 | 2,902,410 | 2,909,874 | ||||||||||||||||||||||||
| Commercial & Industrial | 491,298 | 432,227 | 426,084 | 419,936 | 408,596 | ||||||||||||||||||||||||
| Consumer | 45,951 | 57,241 | 50,760 | 49,453 | 48,682 | ||||||||||||||||||||||||
| Leases | 168,362 | 165,078 | 163,149 | 162,866 | 156,362 | ||||||||||||||||||||||||
| Total non-real estate loans and leases | 705,611 | 654,546 | 639,993 | 632,255 | 613,640 | ||||||||||||||||||||||||
| Total portfolio loans and leases | $ | 3,767,166 | $ | 3,689,313 | $ | 3,540,747 | $ | 3,534,665 | $ | 3,523,514 | |||||||||||||||||||
Nonperforming Loans and Leases(1) as of | |||||||||||||||||||||||||||||
| March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | |||||||||||||||||||||||||
| Commercial Real Estate Loans - Non-owner Occupied | $ | 181 | $ | 199 | $ | 3,055 | $ | 3,147 | $ | 3,396 | |||||||||||||||||||
| Commercial Real Estate Loans - Owner Occupied | 2,543 | 4,159 | 4,535 | 2,470 | 1,158 | ||||||||||||||||||||||||
| Home equity lines of credit | 758 | 636 | 693 | 470 | 7,049 | ||||||||||||||||||||||||
| Residential Mortgages - secured by first liens | 1,080 | 2,447 | 2,693 | 3,102 | 5,667 | ||||||||||||||||||||||||
| Residential Mortgages - secured by junior liens | 79 | 83 | 84 | 72 | 400 | ||||||||||||||||||||||||
| Total nonperforming real estate loans | 4,641 | 7,524 | 11,060 | 9,261 | 17,670 | ||||||||||||||||||||||||
| Commercial & Industrial | 2,692 | 2,180 | 1,991 | 2,056 | 620 | ||||||||||||||||||||||||
| Consumer | 52 | 61 | 75 | 60 | 80 | ||||||||||||||||||||||||
| Leases | 172 | 883 | 993 | 802 | 913 | ||||||||||||||||||||||||
| Total nonperforming non-real estate loans and leases | 2,916 | 3,124 | 3,059 | 2,918 | 1,613 | ||||||||||||||||||||||||
| Total nonperforming portfolio loans and leases | $ | 7,557 | $ | 10,648 | $ | 14,119 | $ | 12,179 | $ | 19,283 | |||||||||||||||||||
Net Loan and Lease Charge-Offs (Recoveries)(1) for the Three Months Ended | |||||||||||||||||||||||||||||
| March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | |||||||||||||||||||||||||
| Commercial Real Estate Loans - Non-owner Occupied | $ | (2) | $ | (1,067) | $ | (7) | $ | (4) | $ | 1,512 | |||||||||||||||||||
| Commercial Real Estate Loans - Owner Occupied | — | 190 | 680 | — | — | ||||||||||||||||||||||||
| Home equity lines of credit | 114 | 33 | (22) | 128 | 102 | ||||||||||||||||||||||||
| Residential Mortgages - secured by first liens | 727 | 378 | (7) | 339 | 328 | ||||||||||||||||||||||||
| Residential Mortgages - secured by junior liens | — | — | — | 52 | — | ||||||||||||||||||||||||
| Construction | (1) | (1) | (1) | (1) | (1) | ||||||||||||||||||||||||
| Total net charge-offs of real estate loans | 838 | (467) | 643 | 514 | 1,941 | ||||||||||||||||||||||||
| Commercial & Industrial | 612 | 57 | (15) | (17) | 189 | ||||||||||||||||||||||||
| Consumer | 261 | 227 | 187 | 119 | 102 | ||||||||||||||||||||||||
| Leases | 2,362 | 583 | 509 | 445 | 314 | ||||||||||||||||||||||||
| Total net charge-offs of non-real estate loans and leases | 3,235 | 867 | 681 | 547 | 605 | ||||||||||||||||||||||||
| Total net charge-offs | $ | 4,073 | $ | 400 | $ | 1,324 | $ | 1,061 | $ | 2,546 | |||||||||||||||||||
(1)In conjunction with the adoption of CECL, the Corporation has revised its portfolio segmentation to align with the methodology applied in determining the ACL) for loans and leases under CECL, which is based on Federal call report codes which classify loans based on the primary collateral supporting the loan. Portfolio segmentation prior to the adoption of CECL was based on product type or purpose. As such, certain reclassifications were made to conform previous years to the current year's presentation.
12
Bryn Mawr Bank Corporation
Supplemental Balance Sheet Information (unaudited)
(dollars in thousands)
| Investment Securities Available for Sale, at Fair Value | |||||||||||||||||||||||||||||
| March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | |||||||||||||||||||||||||
| U.S. Treasury securities | $ | 101 | $ | 500,101 | $ | 101 | $ | 101 | $ | 100 | |||||||||||||||||||
| Obligations of the U.S. Government and agencies | 106,679 | 102,020 | 172,753 | 192,799 | 186,746 | ||||||||||||||||||||||||
| State & political subdivisions - tax-free | 4,562 | 5,379 | 6,327 | 6,700 | 8,468 | ||||||||||||||||||||||||
| State & political subdivisions - taxable | — | — | — | 170 | 170 | ||||||||||||||||||||||||
| Mortgage-backed securities | 374,775 | 366,002 | 388,891 | 348,975 | 322,913 | ||||||||||||||||||||||||
| Collateralized mortgage obligations | 29,699 | 31,832 | 35,459 | 38,724 | 40,486 | ||||||||||||||||||||||||
| Other debt securities | 650 | 650 | 650 | 650 | 1,100 | ||||||||||||||||||||||||
| Total investment securities available for sale, at fair value | $ | 516,466 | $ | 1,005,984 | $ | 604,181 | $ | 588,119 | $ | 559,983 | |||||||||||||||||||
| Unrealized Gain (Loss) on Investment Securities Available for Sale | |||||||||||||||||||||||||||||
| March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | |||||||||||||||||||||||||
| U.S. Treasury securities | $ | 1 | $ | 35 | $ | 1 | $ | 1 | $ | — | |||||||||||||||||||
| Obligations of the U.S. Government and agencies | 1,036 | (159) | 188 | 275 | (1,334) | ||||||||||||||||||||||||
| State & political subdivisions - tax-free | 10 | 13 | 8 | 8 | (5) | ||||||||||||||||||||||||
| Mortgage-backed securities | 11,554 | 5,025 | 4,605 | 3,364 | (696) | ||||||||||||||||||||||||
| Collateralized mortgage obligations | 778 | 36 | 180 | 89 | (510) | ||||||||||||||||||||||||
| Total unrealized gains (losses) on investment securities available for sale | $ | 13,379 | $ | 4,950 | $ | 4,982 | $ | 3,737 | $ | (2,545) | |||||||||||||||||||
| Deposits | |||||||||||||||||||||||||||||
| March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | |||||||||||||||||||||||||
| Interest-bearing deposits: | |||||||||||||||||||||||||||||
| Interest-bearing demand | $ | 750,127 | $ | 944,915 | $ | 778,809 | $ | 745,134 | $ | 664,683 | |||||||||||||||||||
| Money market | 1,133,952 | 1,106,478 | 983,170 | 966,596 | 961,348 | ||||||||||||||||||||||||
| Savings | 247,799 | 220,450 | 248,539 | 263,830 | 265,613 | ||||||||||||||||||||||||
| Retail time deposits | 406,828 | 405,123 | 467,346 | 502,745 | 531,522 | ||||||||||||||||||||||||
| Wholesale non-maturity deposits | 198,888 | 177,865 | 274,121 | 100,047 | 47,744 | ||||||||||||||||||||||||
| Wholesale time deposits | 113,392 | 89,241 | 42,094 | 113,150 | 284,397 | ||||||||||||||||||||||||
| Total interest-bearing deposits | 2,850,986 | 2,944,072 | 2,794,079 | 2,691,502 | 2,755,307 | ||||||||||||||||||||||||
| Noninterest-bearing deposits | 927,922 | 898,173 | 904,409 | 940,911 | 882,310 | ||||||||||||||||||||||||
| Total deposits | $ | 3,778,908 | $ | 3,842,245 | $ | 3,698,488 | $ | 3,632,413 | $ | 3,637,617 | |||||||||||||||||||
13
Bryn Mawr Bank Corporation
Detailed Income Statements (unaudited)
(dollars in thousands, except per share data)
| For the Three Months Ended | |||||||||||||||||||||||||||||
| March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | |||||||||||||||||||||||||
| Interest income: | |||||||||||||||||||||||||||||
| Interest and fees on loans and leases | $ | 42,795 | $ | 43,220 | $ | 45,527 | $ | 44,783 | $ | 44,837 | |||||||||||||||||||
| Interest on cash and cash equivalents | 111 | 195 | 143 | 73 | 132 | ||||||||||||||||||||||||
| Interest on investment securities | 3,201 | 3,545 | 3,903 | 3,532 | 3,499 | ||||||||||||||||||||||||
| Total interest income | 46,107 | 46,960 | 49,573 | 48,388 | 48,468 | ||||||||||||||||||||||||
| Interest expense: | |||||||||||||||||||||||||||||
| Interest on deposits | 7,637 | 8,674 | 9,510 | 9,655 | 8,097 | ||||||||||||||||||||||||
| Interest on short-term borrowings | 453 | 555 | 937 | 357 | 943 | ||||||||||||||||||||||||
| Interest on FHLB advances | 244 | 279 | 243 | 269 | 278 | ||||||||||||||||||||||||
| Interest on jr. subordinated debentures | 295 | 323 | 340 | 352 | 358 | ||||||||||||||||||||||||
| Interest on subordinated notes | 1,145 | 1,144 | 1,145 | 1,144 | 1,145 | ||||||||||||||||||||||||
| Total interest expense | 9,774 | 10,975 | 12,175 | 11,777 | 10,821 | ||||||||||||||||||||||||
| Net interest income | 36,333 | 35,985 | 37,398 | 36,611 | 37,647 | ||||||||||||||||||||||||
| Provision for credit losses ("PCL") on loans and leases | 32,335 | 2,225 | 919 | 1,627 | 3,736 | ||||||||||||||||||||||||
| Net interest income after PCL on loans and leases | 3,998 | 33,760 | 36,479 | 34,984 | 33,911 | ||||||||||||||||||||||||
| Noninterest income: | |||||||||||||||||||||||||||||
| Fees for wealth management services | 11,168 | 11,672 | 10,826 | 11,510 | 10,392 | ||||||||||||||||||||||||
| Insurance commissions | 1,533 | 1,666 | 1,842 | 1,697 | 1,672 | ||||||||||||||||||||||||
| Capital markets revenue | 2,361 | 5,455 | 2,113 | 1,489 | 2,219 | ||||||||||||||||||||||||
| Service charges on deposits | 846 | 858 | 856 | 852 | 808 | ||||||||||||||||||||||||
| Loan servicing and other fees | 461 | 489 | 555 | 553 | 609 | ||||||||||||||||||||||||
| Net gain on sale of loans | 782 | 597 | 674 | 752 | 319 | ||||||||||||||||||||||||
| Net gain on sale of investment securities available for sale | — | — | — | — | — | ||||||||||||||||||||||||
| Net (loss) gain on sale of other real estate owned | 148 | (48) | (12) | — | (24) | ||||||||||||||||||||||||
| Dividends on FHLB and FRB stocks | 444 | 432 | 346 | 316 | 411 | ||||||||||||||||||||||||
| Other operating income | 557 | 2,134 | 2,255 | 3,052 | 2,847 | ||||||||||||||||||||||||
| Total noninterest income | 18,300 | 23,255 | 19,455 | 20,221 | 19,253 | ||||||||||||||||||||||||
| Noninterest expense: | |||||||||||||||||||||||||||||
| Salaries and wages | 16,989 | 18,667 | 17,765 | 17,038 | 20,901 | ||||||||||||||||||||||||
| Employee benefits | 3,500 | 2,685 | 3,288 | 3,317 | 4,166 | ||||||||||||||||||||||||
| Occupancy and bank premises | 3,015 | 3,206 | 3,008 | 3,125 | 3,252 | ||||||||||||||||||||||||
| Furniture, fixtures and equipment | 2,431 | 2,401 | 2,335 | 2,568 | 2,389 | ||||||||||||||||||||||||
| Advertising | 401 | 599 | 587 | 504 | 415 | ||||||||||||||||||||||||
| Amortization of intangible assets | 918 | 953 | 954 | 956 | 938 | ||||||||||||||||||||||||
| Impairment (recovery) of mortgage servicing rights ("MSRs") | 231 | 13 | (19) | 10 | 17 | ||||||||||||||||||||||||
| Due diligence, merger-related and merger integration expenses | — | — | — | — | — | ||||||||||||||||||||||||
| Professional fees | 1,368 | 1,754 | 1,044 | 1,316 | 1,320 | ||||||||||||||||||||||||
| Pennsylvania bank shares tax | 116 | 42 | 514 | 513 | 409 | ||||||||||||||||||||||||
| Data processing | 1,394 | 1,517 | 1,377 | 1,303 | 1,320 | ||||||||||||||||||||||||
| Other operating expenses | 6,055 | 4,593 | 4,320 | 4,538 | 4,597 | ||||||||||||||||||||||||
| Total noninterest expense | 36,418 | 36,430 | 35,173 | 35,188 | 39,724 | ||||||||||||||||||||||||
| (Loss) income before income taxes | (14,120) | 20,585 | 20,761 | 20,017 | 13,440 | ||||||||||||||||||||||||
| Income tax (benefit) expense | (2,957) | 4,202 | 4,402 | 4,239 | 2,764 | ||||||||||||||||||||||||
| Net (loss) income | $ | (11,163) | $ | 16,383 | $ | 16,359 | $ | 15,778 | $ | 10,676 | |||||||||||||||||||
| Net loss attributable to noncontrolling interest | — | (1) | (1) | (7) | (1) | ||||||||||||||||||||||||
| Net (loss) income attributable to Bryn Mawr Bank Corporation | $ | (11,163) | $ | 16,384 | $ | 16,360 | $ | 15,785 | $ | 10,677 | |||||||||||||||||||
| Per share data: | |||||||||||||||||||||||||||||
| Weighted average shares outstanding | 20,053,159 | 20,124,553 | 20,132,117 | 20,144,651 | 20,168,498 | ||||||||||||||||||||||||
| Dilutive common shares | — | 88,455 | 76,513 | 99,758 | 103,163 | ||||||||||||||||||||||||
| Weighted average diluted shares | 20,053,159 | 20,213,008 | 20,208,630 | 20,244,409 | 20,271,661 | ||||||||||||||||||||||||
| Basic earnings per common share | $ | (0.56) | $ | 0.81 | $ | 0.81 | $ | 0.78 | $ | 0.53 | |||||||||||||||||||
| Diluted earnings per common share | $ | (0.56) | $ | 0.81 | $ | 0.81 | $ | 0.78 | $ | 0.53 | |||||||||||||||||||
| Dividends paid or accrued per share | $ | 0.26 | $ | 0.26 | $ | 0.26 | $ | 0.25 | $ | 0.25 | |||||||||||||||||||
| Effective tax rate | 20.94 | % | 20.41 | % | 21.20 | % | 21.18 | % | 20.57 | % | |||||||||||||||||||
14
Bryn Mawr Bank Corporation
Tax-Equivalent Net Interest Margin (unaudited)
(dollars in thousands, except per share data)
| For the Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
| March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||
| (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 | ||||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits with other banks | $ | 50,330 | $ | 111 | 0.89 | % | $ | 66,060 | $ | 195 | 1.17 | % | $ | 48,597 | $ | 143 | 1.17 | % | $ | 37,843 | $ | 73 | 0.77 | % | $ | 32,742 | $ | 132 | 1.64 | % | |||||||||||||||||
| Investment securities - available for sale: | |||||||||||||||||||||||||||||||||||||||||||||||
| Taxable | 516,244 | 3,065 | 2.39 | % | 566,359 | 3,334 | 2.34 | % | 594,975 | 3,765 | 2.51 | % | 560,999 | 3,400 | 2.43 | % | 543,687 | 3,363 | 2.51 | % | |||||||||||||||||||||||||||
| Tax-exempt | 4,909 | 28 | 2.29 | % | 5,844 | 33 | 2.24 | % | 6,594 | 36 | 2.17 | % | 7,530 | 43 | 2.29 | % | 9,795 | 55 | 2.28 | % | |||||||||||||||||||||||||||
| Total investment securities - available for sale | 521,153 | 3,093 | 2.39 | % | 572,203 | 3,367 | 2.33 | % | 601,569 | 3,801 | 2.51 | % | 568,529 | 3,443 | 2.43 | % | 553,482 | 3,418 | 2.50 | % | |||||||||||||||||||||||||||
| Investment securities - held to maturity | 13,195 | 87 | 2.65 | % | 12,756 | 84 | 2.61 | % | 12,360 | 80 | 2.57 | % | 10,417 | 71 | 2.73 | % | 8,804 | 67 | 3.09 | % | |||||||||||||||||||||||||||
| Investment securities - trading | 8,528 | 25 | 1.18 | % | 8,330 | 99 | 4.72 | % | 8,407 | 27 | 1.27 | % | 8,572 | 24 | 1.12 | % | 7,629 | 22 | 1.17 | % | |||||||||||||||||||||||||||
| Loans and leases * | 3,738,386 | 42,898 | 4.62 | % | 3,598,609 | 43,326 | 4.78 | % | 3,532,923 | 45,642 | 5.13 | % | 3,524,219 | 44,903 | 5.11 | % | 3,477,739 | 44,958 | 5.24 | % | |||||||||||||||||||||||||||
| Total interest-earning assets | 4,331,592 | 46,214 | 4.29 | % | 4,257,958 | 47,071 | 4.39 | % | 4,203,856 | 49,693 | 4.69 | % | 4,149,580 | 48,514 | 4.69 | % | 4,080,396 | 48,597 | 4.83 | % | |||||||||||||||||||||||||||
| Cash and due from banks | 12,479 | 9,829 | 12,890 | 13,725 | 14,414 | ||||||||||||||||||||||||||||||||||||||||||
| Less: allowance for loan and lease losses | (25,786) | (21,124) | (21,438) | (20,844) | (19,887) | ||||||||||||||||||||||||||||||||||||||||||
| Other assets | 526,633 | 528,744 | 564,766 | 509,164 | 470,206 | ||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 4,844,918 | $ | 4,775,407 | $ | 4,760,074 | $ | 4,651,625 | $ | 4,545,129 | |||||||||||||||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits: | |||||||||||||||||||||||||||||||||||||||||||||||
| Savings, NOW and market rate deposits | $ | 2,197,279 | $ | 4,981 | 0.91 | % | $ | 2,149,623 | $ | 5,659 | 1.04 | % | $ | 1,996,181 | $ | 5,445 | 1.08 | % | $ | 1,928,755 | $ | 5,040 | 1.05 | % | $ | 1,798,103 | $ | 3,764 | 0.85 | % | |||||||||||||||||
| Wholesale deposits | 253,322 | 977 | 1.55 | % | 214,229 | 1,024 | 1.90 | % | 299,309 | 1,729 | 2.29 | % | 345,782 | 2,143 | 2.49 | % | 342,696 | 2,012 | 2.38 | % | |||||||||||||||||||||||||||
| Retail time deposits | 403,111 | 1,679 | 1.68 | % | 435,198 | 1,991 | 1.82 | % | 480,736 | 2,336 | 1.93 | % | 520,317 | 2,472 | 1.91 | % | 533,395 | 2,321 | 1.76 | % | |||||||||||||||||||||||||||
| Total interest-bearing deposits | 2,853,712 | 7,637 | 1.08 | % | 2,799,050 | 8,674 | 1.23 | % | 2,776,226 | 9,510 | 1.36 | % | 2,794,854 | 9,655 | 1.39 | % | 2,674,194 | 8,097 | 1.23 | % | |||||||||||||||||||||||||||
| Borrowings: | |||||||||||||||||||||||||||||||||||||||||||||||
| Short-term borrowings | 140,585 | 453 | 1.30 | % | 121,612 | 555 | 1.81 | % | 169,985 | 937 | 2.19 | % | 68,529 | 357 | 2.09 | % | 157,652 | 943 | 2.43 | % | |||||||||||||||||||||||||||
| Long-term FHLB advances | 47,335 | 244 | 2.07 | % | 53,443 | 279 | 2.07 | % | 45,698 | 243 | 2.11 | % | 52,397 | 269 | 2.06 | % | 55,385 | 278 | 2.04 | % | |||||||||||||||||||||||||||
| Subordinated notes | 98,725 | 1,145 | 4.66 | % | 98,681 | 1,144 | 4.60 | % | 98,634 | 1,145 | 4.61 | % | 98,587 | 1,144 | 4.65 | % | 98,542 | 1,145 | 4.71 | % | |||||||||||||||||||||||||||
| Jr. subordinated debt | 21,768 | 295 | 5.45 | % | 21,726 | 323 | 5.90 | % | 21,680 | 340 | 6.22 | % | 21,637 | 352 | 6.53 | % | 21,595 | 358 | 6.72 | % | |||||||||||||||||||||||||||
| Total borrowings | 308,413 | 2,137 | 2.79 | % | 295,462 | 2,301 | 3.09 | % | 335,997 | 2,665 | 3.15 | % | 241,150 | 2,122 | 3.53 | % | 333,174 | 2,724 | 3.32 | % | |||||||||||||||||||||||||||
| Total interest-bearing liabilities | 3,162,125 | 9,774 | 1.24 | % | 3,094,512 | 10,975 | 1.41 | % | 3,112,223 | 12,175 | 1.55 | % | 3,036,004 | 11,777 | 1.56 | % | 3,007,368 | 10,821 | 1.46 | % | |||||||||||||||||||||||||||
| Noninterest-bearing deposits | 894,264 | 915,128 | 903,314 | 909,945 | 871,726 | ||||||||||||||||||||||||||||||||||||||||||
| Other liabilities | 173,519 | 159,259 | 149,226 | 124,211 | 93,949 | ||||||||||||||||||||||||||||||||||||||||||
| Total noninterest-bearing liabilities | 1,067,783 | 1,074,387 | 1,052,540 | 1,034,156 | 965,675 | ||||||||||||||||||||||||||||||||||||||||||
| Total liabilities | 4,229,908 | 4,168,899 | 4,164,763 | 4,070,160 | 3,973,043 | ||||||||||||||||||||||||||||||||||||||||||
| Shareholders' equity | 615,010 | 606,508 | 595,311 | 581,465 | 572,086 | ||||||||||||||||||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 4,844,918 | $ | 4,775,407 | $ | 4,760,074 | $ | 4,651,625 | $ | 4,545,129 | |||||||||||||||||||||||||||||||||||||
| Net interest spread | 3.05 | % | 2.98 | % | 3.14 | % | 3.13 | % | 3.37 | % | |||||||||||||||||||||||||||||||||||||
| Effect of noninterest-bearing sources | 0.33 | % | 0.38 | % | 0.40 | % | 0.42 | % | 0.38 | % | |||||||||||||||||||||||||||||||||||||
| Tax-equivalent net interest margin | $ | 36,440 | 3.38 | % | $ | 36,096 | 3.36 | % | $ | 37,518 | 3.54 | % | $ | 36,737 | 3.55 | % | $ | 37,776 | 3.75 | % | |||||||||||||||||||||||||||
| Tax-equivalent adjustment | $ | 107 | 0.01 | % | $ | 111 | 0.01 | % | $ | 120 | 0.01 | % | $ | 126 | 0.01 | % | $ | 129 | 0.01 | % | |||||||||||||||||||||||||||
| * Average loans and leases include portfolio loans and leases, and loans held for sale. Non-accrual loans are also included in the average loan and leases balances. | |||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Information Regarding Accretion of Fair Value Marks
| For the Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
| March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Interest | Inc. / (Dec.) | Effect on Yield or Rate | Inc. / (Dec.) | Effect on Yield or Rate | Inc. / (Dec.) | Effect on Yield or Rate | Inc. / (Dec.) | Effect on Yield or Rate | Inc. / (Dec.) | Effect on Yield or Rate | ||||||||||||||||||||||||||||||||||||
| Loans and leases | Income | $ | 910 | 0.10 | % | $ | 1,027 | 0.11 | % | $ | 1,501 | 0.17 | % | $ | 1,193 | 0.14 | % | $ | 1,997 | 0.23 | % | ||||||||||||||||||||||||||
| Retail time deposits | Expense | (118) | (0.12) | % | (134) | (0.12) | % | (151) | (0.12) | % | (171) | (0.13) | % | (222) | (0.17) | % | |||||||||||||||||||||||||||||||
| Long-term FHLB advances | Expense | 34 | 0.29 | % | 34 | 0.25 | % | 34 | 0.30 | % | 34 | 0.26 | % | 33 | 0.24 | % | |||||||||||||||||||||||||||||||
| Jr. subordinated debt | Expense | 45 | 0.83 | % | 44 | 0.80 | % | 44 | 0.81 | % | 43 | 0.80 | % | 42 | 0.79 | % | |||||||||||||||||||||||||||||||
| Net interest income from fair value marks | $ | 949 | $ | 1,083 | $ | 1,574 | $ | 1,287 | $ | 2,144 | |||||||||||||||||||||||||||||||||||||
| Purchase accounting effect on tax-equivalent margin | 0.09 | % | 0.10 | % | 0.15 | % | 0.12 | % | 0.21 | % | |||||||||||||||||||||||||||||||||||||
15
Bryn Mawr Bank Corporation
Appendix - Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Performance Measures (unaudited)
(dollars in thousands, except per share data)
Statement on Non-GAAP Measures: The Corporation believes the presentation of the following non-GAAP financial measures provides useful supplemental information that is essential to an investor’s proper understanding of the results of operations and financial condition of the Corporation. Management uses non-GAAP financial measures in its analysis of the Corporation’s performance. These non-GAAP measures should not be viewed as substitutes for the financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. | |||||||||||||||||||||||||||||
| As of or For the Three Months Ended | |||||||||||||||||||||||||||||
| March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | |||||||||||||||||||||||||
| Reconciliation of Net Income to Net Income (core): | |||||||||||||||||||||||||||||
| Net (loss) income attributable to BMBC (a GAAP measure) | $ | (11,163) | $ | 16,384 | $ | 16,360 | $ | 15,785 | $ | 10,677 | |||||||||||||||||||
Add: Tax-effected non-core noninterest expense items: | |||||||||||||||||||||||||||||
| Voluntary years of service incentive program expenses | — | — | — | — | 3,553 | ||||||||||||||||||||||||
| Net (loss) income (core) (a non-GAAP measure) | $ | (11,163) | $ | 16,384 | $ | 16,360 | $ | 15,785 | $ | 14,230 | |||||||||||||||||||
| Calculation of Basic and Diluted Earnings per Common Share (core): | |||||||||||||||||||||||||||||
| Weighted average common shares outstanding | 20,053,159 | 20,124,553 | 20,132,117 | 20,144,651 | 20,168,498 | ||||||||||||||||||||||||
| Dilutive common shares | — | 88,455 | 76,513 | 99,758 | 103,163 | ||||||||||||||||||||||||
| Weighted average diluted shares | 20,053,159 | 20,213,008 | 20,208,630 | 20,244,409 | 20,271,661 | ||||||||||||||||||||||||
| Basic earnings per common share (core) (a non-GAAP measure) | $ | (0.56) | $ | 0.81 | $ | 0.81 | $ | 0.78 | $ | 0.71 | |||||||||||||||||||
| Diluted earnings per common share (core) (a non-GAAP measure) | $ | (0.56) | $ | 0.81 | $ | 0.81 | $ | 0.78 | $ | 0.70 | |||||||||||||||||||
| Calculation of Return on Average Tangible Equity: | |||||||||||||||||||||||||||||
| Net (loss) income attributable to BMBC (a GAAP measure) | $ | (11,163) | $ | 16,384 | $ | 16,360 | $ | 15,785 | $ | 10,677 | |||||||||||||||||||
Add: Tax-effected amortization and impairment of intangible assets | 725 | 753 | 754 | 755 | 741 | ||||||||||||||||||||||||
Net tangible (loss) income (numerator) | $ | (10,438) | $ | 17,137 | $ | 17,114 | $ | 16,540 | $ | 11,418 | |||||||||||||||||||
| Average shareholders' equity | $ | 615,010 | $ | 606,508 | $ | 595,311 | $ | 581,465 | $ | 572,086 | |||||||||||||||||||
Less: Average Noncontrolling interest | 695 | 694 | 693 | 688 | 685 | ||||||||||||||||||||||||
Less: Average goodwill and intangible assets | (202,760) | (203,663) | (204,637) | (205,593) | (206,716) | ||||||||||||||||||||||||
Net average tangible equity (denominator) | $ | 412,945 | $ | 403,539 | $ | 391,367 | $ | 376,560 | $ | 366,055 | |||||||||||||||||||
| Return on tangible equity (a non-GAAP measure) | (10.17) | % | 16.85 | % | 17.35 | % | 17.62 | % | 12.65 | % | |||||||||||||||||||
| Calculation of Return on Average Tangible Equity (core): | |||||||||||||||||||||||||||||
| Net (loss) income (core) (a non-GAAP measure) | $ | (11,163) | $ | 16,384 | $ | 16,360 | $ | 15,785 | $ | 14,230 | |||||||||||||||||||
Add: Tax-effected amortization and impairment of intangible assets | 725 | 753 | 754 | 755 | 741 | ||||||||||||||||||||||||
Net tangible (loss) income (core) (numerator) | $ | (10,438) | $ | 17,137 | $ | 17,114 | $ | 16,540 | $ | 14,971 | |||||||||||||||||||
| Average shareholders' equity | $ | 615,010 | $ | 606,508 | $ | 595,311 | $ | 581,465 | $ | 572,086 | |||||||||||||||||||
Less: Average Noncontrolling interest | 695 | 694 | 693 | 688 | 685 | ||||||||||||||||||||||||
Less: Average goodwill and intangible assets | (202,760) | (203,663) | (204,637) | (205,593) | (206,716) | ||||||||||||||||||||||||
Net average tangible equity (denominator) | $ | 412,945 | $ | 403,539 | $ | 391,367 | $ | 376,560 | $ | 366,055 | |||||||||||||||||||
| Return on tangible equity (core) (a non-GAAP measure) | (10.17) | % | 16.85 | % | 17.35 | % | 17.62 | % | 16.59 | % | |||||||||||||||||||
17
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 | |||||||||||||||||||||||||||||
| March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | |||||||||||||||||||||||||
| Calculation of Tangible Equity Ratio (BMBC): | |||||||||||||||||||||||||||||
| Total shareholders' equity | $ | 593,179 | $ | 612,227 | $ | 600,935 | $ | 590,155 | $ | 575,107 | |||||||||||||||||||
| Less: Noncontrolling interest | 695 | 695 | 694 | 693 | 686 | ||||||||||||||||||||||||
Less: Goodwill and intangible assets | (202,225) | (203,143) | (204,096) | (205,050) | (206,006) | ||||||||||||||||||||||||
Net tangible equity (numerator) | $ | 391,649 | $ | 409,779 | $ | 397,533 | $ | 385,798 | $ | 369,787 | |||||||||||||||||||
| Total assets | $ | 4,923,033 | $ | 5,263,259 | $ | 4,828,641 | $ | 4,736,565 | $ | 4,631,993 | |||||||||||||||||||
Less: Goodwill and intangible assets | (202,225) | (203,143) | (204,096) | (205,050) | (206,006) | ||||||||||||||||||||||||
Tangible assets (denominator) | $ | 4,720,808 | $ | 5,060,116 | $ | 4,624,545 | $ | 4,531,515 | $ | 4,425,987 | |||||||||||||||||||
Tangible equity ratio (BMBC)(1) | 8.30 | % | 8.10 | % | 8.60 | % | 8.51 | % | 8.35 | % | |||||||||||||||||||
| Calculation of Tangible Equity Ratio (BMTC): | |||||||||||||||||||||||||||||
| Total shareholders' equity | $ | 624,959 | $ | 624,030 | $ | 641,565 | $ | 625,464 | $ | 605,985 | |||||||||||||||||||
| Less: Noncontrolling interest | 695 | 695 | 694 | 693 | 686 | ||||||||||||||||||||||||
Less: Goodwill and intangible assets | (201,979) | (190,694) | (191,572) | (192,450) | (193,329) | ||||||||||||||||||||||||
Net tangible equity (numerator) | $ | 423,675 | $ | 434,031 | $ | 450,687 | $ | 433,707 | $ | 413,342 | |||||||||||||||||||
| Total assets | $ | 4,919,004 | $ | 5,247,649 | $ | 4,813,704 | $ | 4,721,394 | $ | 4,616,724 | |||||||||||||||||||
Less: Goodwill and intangible assets | (201,979) | (190,694) | (191,572) | (192,450) | (193,329) | ||||||||||||||||||||||||
Tangible assets (denominator) | $ | 4,717,025 | $ | 5,056,955 | $ | 4,622,132 | $ | 4,528,944 | $ | 4,423,395 | |||||||||||||||||||
Tangible equity ratio (BMTC)(1) | 8.98 | % | 8.58 | % | 9.75 | % | 9.58 | % | 9.34 | % | |||||||||||||||||||
| Calculation of Return on Average Assets (core) | |||||||||||||||||||||||||||||
| Return on average assets (GAAP) | (0.93) | % | 1.36 | % | 1.36 | % | 1.36 | % | 0.95 | % | |||||||||||||||||||
| Effect of adjustment to GAAP net income to core net income | — | % | — | % | — | % | — | % | 0.32 | % | |||||||||||||||||||
| Return on average assets (core) | (0.93) | % | 1.36 | % | 1.36 | % | 1.36 | % | 1.27 | % | |||||||||||||||||||
| Calculation of Return on Average Equity (core) | |||||||||||||||||||||||||||||
| Return on average equity (GAAP) | (7.30) | % | 10.72 | % | 10.90 | % | 10.89 | % | 7.57 | % | |||||||||||||||||||
| Effect of adjustment to GAAP net income to core net income | — | % | — | % | — | % | — | % | 2.52 | % | |||||||||||||||||||
| Return on average equity (core) | (7.30) | % | 10.72 | % | 10.90 | % | 10.89 | % | 10.09 | % | |||||||||||||||||||
| Calculation of Tax-equivalent net interest margin adjusting for the impact of purchase accounting | |||||||||||||||||||||||||||||
| Tax-equivalent net interest margin | 3.38 | % | 3.36 | % | 3.54 | % | 3.55 | % | 3.75 | % | |||||||||||||||||||
| Effect of fair value marks | 0.09 | % | 0.10 | % | 0.15 | % | 0.12 | % | 0.21 | % | |||||||||||||||||||
| Tax-equivalent net interest margin adjusting for the impact of purchase accounting | 3.29 | % | 3.26 | % | 3.39 | % | 3.43 | % | 3.54 | % | |||||||||||||||||||
(1)Capital Ratios for the current quarter are to be considered preliminary until the Call Reports are filed. The March 31, 2020 ratios reflect the Corporation’s planned election of a five-year transition provision to delay for two years the full impact of CECL on regulatory capital, followed by a three-year transition period.
18
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 | |||||||||||||||||||||||||||||
| March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | |||||||||||||||||||||||||
| Calculation of Tax-equivalent net interest income adjusting for the impact of purchase accounting | |||||||||||||||||||||||||||||
| Tax-equivalent net interest income | $ | 36,440 | $ | 36,096 | $ | 37,518 | $ | 36,737 | $ | 37,776 | |||||||||||||||||||
| Effect of fair value marks | 949 | 1,083 | 1,574 | 1,287 | 2,144 | ||||||||||||||||||||||||
| Tax-equivalent net interest income adjusting for the impact of purchase accounting | $ | 35,491 | $ | 35,013 | $ | 35,944 | $ | 35,450 | $ | 35,632 | |||||||||||||||||||
| Calculation of Efficiency Ratio: | |||||||||||||||||||||||||||||
| Noninterest expense | $ | 36,418 | $ | 36,430 | $ | 35,173 | $ | 35,188 | $ | 39,724 | |||||||||||||||||||
Less: certain noninterest expense items*: | |||||||||||||||||||||||||||||
| Amortization of intangibles | (918) | (953) | (954) | (956) | (938) | ||||||||||||||||||||||||
| Voluntary years of service incentive program expenses | — | — | — | — | (4,498) | ||||||||||||||||||||||||
Noninterest expense (adjusted) (numerator) | $ | 35,500 | $ | 35,477 | $ | 34,219 | $ | 34,232 | $ | 34,288 | |||||||||||||||||||
| Noninterest income (core) | $ | 18,300 | $ | 23,255 | $ | 19,455 | $ | 20,221 | $ | 19,253 | |||||||||||||||||||
| Net interest income | 36,333 | 35,985 | 37,398 | 36,611 | 37,647 | ||||||||||||||||||||||||
Noninterest income (core) and net interest income (denominator) | $ | 54,633 | $ | 59,240 | $ | 56,853 | $ | 56,832 | $ | 56,900 | |||||||||||||||||||
| Efficiency ratio | 64.98 | % | 59.89 | % | 60.19 | % | 60.23 | % | 60.26 | % | |||||||||||||||||||
| Supplemental Loan and ACL on Loans and Leases Information Used to Calculate Non-GAAP Measures | |||||||||||||||||||||||||||||
| Total ACL on loans and leases | $ | 54,070 | $ | 22,602 | $ | 20,777 | $ | 21,182 | $ | 20,616 | |||||||||||||||||||
| Less: ACL on acquired loans and leases | 3,705 | 76 | 102 | 106 | 97 | ||||||||||||||||||||||||
| ACL on originated loans and leases | $ | 50,365 | $ | 22,526 | $ | 20,675 | $ | 21,076 | $ | 20,519 | |||||||||||||||||||
| Total ACL on loans and leases | $ | 54,070 | $ | 22,602 | $ | 20,777 | $ | 21,182 | $ | 20,616 | |||||||||||||||||||
| Loan mark on acquired loans | 9,478 | 10,905 | 11,948 | 14,174 | 15,841 | ||||||||||||||||||||||||
| Total ACL on loans and leases + Loan mark | $ | 63,548 | $ | 33,507 | $ | 32,725 | $ | 35,356 | $ | 36,457 | |||||||||||||||||||
| Total Portfolio loans and leases | $ | 3,767,166 | $ | 3,689,313 | $ | 3,540,747 | $ | 3,534,665 | $ | 3,523,514 | |||||||||||||||||||
| Less: Originated loans and leases | 3,424,601 | 3,320,816 | 3,137,769 | 3,088,849 | 3,032,270 | ||||||||||||||||||||||||
| Net acquired loans | $ | 342,565 | $ | 368,497 | $ | 402,978 | $ | 445,816 | $ | 491,244 | |||||||||||||||||||
| Add: Loan mark on acquired loans | 9,478 | 10,905 | 11,948 | 14,174 | 15,841 | ||||||||||||||||||||||||
| Gross acquired loans (excludes loan mark) | $ | 352,043 | $ | 379,402 | $ | 414,926 | $ | 459,990 | $ | 507,085 | |||||||||||||||||||
| Originated loans and leases | 3,424,601 | 3,320,816 | 3,137,769 | 3,088,849 | 3,032,270 | ||||||||||||||||||||||||
| Total Gross portfolio loans and leases | $ | 3,776,644 | $ | 3,700,218 | $ | 3,552,695 | $ | 3,548,839 | $ | 3,539,355 | |||||||||||||||||||
*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.
19
Bryn Mawr Bank Corporation
CECL Accounting Standard Adoption January 1, 2020 (unaudited)
(dollars in thousands)
Effective January 1, 2020, the Corporation adopted CECL, which requires that management’s estimate reflects credit losses over the full remaining expected life and considers expected future changes in macroeconomic conditions.
The following table illustrates the impact upon the adoption of CECL on January 1, 2020, and the balances as of March 31, 2020, reflecting the impact of the adverse economic outlook due to the COVID-19 pandemic:
| December 31, 2019 | January 1, 2020 | March 31, 2020 | |||||||||||||||||||||||||||||||||
| Incurred Loss Method | CECL (Day 1 Adoption) | CECL | |||||||||||||||||||||||||||||||||
Amount (1) | % of segment | Amount | % of segment | Amount | % of segment | ||||||||||||||||||||||||||||||
| Allowance for credit losses on loans and leases: | |||||||||||||||||||||||||||||||||||
| Commercial Real Estate Loans - Non-owner Occupied | $ | 7,960 | 0.60 | % | $ | 7,493 | 0.56 | % | $ | 13,329 | 0.98 | % | |||||||||||||||||||||||
| Commercial Real Estate Loans - Owner Occupied | 2,825 | 0.54 | % | 2,841 | 0.54 | % | 4,192 | 0.79 | % | ||||||||||||||||||||||||||
| Home equity lines of credit | 1,114 | 0.50 | % | 1,068 | 0.48 | % | 2,748 | 1.31 | % | ||||||||||||||||||||||||||
| Residential Mortgages - secured by first liens | 2,501 | 0.35 | % | 4,909 | 0.69 | % | 8,316 | 1.17 | % | ||||||||||||||||||||||||||
| Residential Mortgages - secured by junior liens | 338 | 0.92 | % | 417 | 1.13 | % | 517 | 1.45 | % | ||||||||||||||||||||||||||
| Construction | 1,230 | 0.61 | % | 871 | 0.43 | % | 6,984 | 3.16 | % | ||||||||||||||||||||||||||
| Commercial and industrial | 3,835 | 0.89 | % | 3,676 | 0.85 | % | 8,734 | 1.78 | % | ||||||||||||||||||||||||||
Consumer(3) | 438 | 0.77 | % | 578 | 1.01 | % | 341 | 0.74 | % | ||||||||||||||||||||||||||
| Leases | 2,361 | 1.43 | % | 3,955 | 2.40 | % | 8,909 | 5.29 | % | ||||||||||||||||||||||||||
| Total Allowance for credit losses on loans and leases | $ | 22,602 | 0.61 | % | $ | 25,808 | 0.70 | % | $ | 54,070 | 1.44 | % | |||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||
Allowance for credit losses on off-balance sheet credit exposures(2) | 360 | 1,181 | 4,197 | ||||||||||||||||||||||||||||||||
| Total Allowance for credit losses | $ | 22,962 | $ | 26,989 | $ | 58,267 | |||||||||||||||||||||||||||||
(1) In conjunction with the adoption of CECL, the Corporation has revised its segmentation to align with the methodology applied in determining the ACL for loans and leases under CECL, which is based on Federal call report codes which classify loans based on the primary collateral supporting the loan. Segmentation prior to the adoption of CECL was based on product type or purpose. As such, certain reclassifications were made to conform previous years to the current year's presentation.
(2) Included within Other Liabilities on the Consolidated Balance Sheet.
(3) Includes overdrafts.
20