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Bryn Mawr Bank Corporation Reports First Quarter Net Income of $9.0 Million, Improved Net Interest Margin

BRYN MAWR, Pa., April 20, 2017 (GLOBE NEWSWIRE) -- Bryn Mawr Bank Corporation (NASDAQ:BMTC) (the “Corporation”), parent of The Bryn Mawr Trust Company (the “Bank”), today reported net income of $9.0 million and diluted earnings per share of $0.53 for the three months ended March 31, 2017, as compared to net income of $9.4 million, or $0.55 diluted earnings per share, for the three months ended December 31, 2016 and $8.3 million, or $0.49 diluted earnings per share, for the three months ended March 31, 2016.

On a non-GAAP basis, core net income, which excludes certain non-core income and expense items, as detailed in the appendix to this earnings release, was $9.4 million, or $0.55 diluted earnings per share, for the three months ended March 31, 2017 as compared to $9.4 million, or $0.55 diluted earnings per share, for the three months ended December 31, 2016 and $8.3 million, or $0.49 diluted earnings per share, for the three months ended March 31, 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.

“With our merger preparation efforts in full swing, we are pleased to report another strong quarter,” commented Frank Leto, President and Chief Executive Officer, continuing, “The uptick in our net interest margin contributed to the increase in net interest income on both a linked quarter as well as a year-over-year basis. And while net loan growth for the first quarter was relatively flat, at $20.2 million, originations were consistent with prior quarters. Net paydowns totaled $106.7 million for the first quarter of 2017.”

Mr. Leto also stated, “In keeping with our strategy of selectively expanding our brand into new market areas, we recently announced two new initiatives: the anticipated opening of a new wealth office in Princeton, New Jersey and the expected acquisition of the Hirshorn Boothby insurance agency in the Chestnut Hill section of Philadelphia. These initiatives seek to leverage the branch network we’ll be acquiring in the contemplated Royal Bancshares acquisition, and will enable us to offer a full range of financial solutions to the residents and businesses in the surrounding areas.”

Each of the opening of the Princeton office and the acquisitions of Hirshorn Boothby and Royal Bancshares of Pennsylvania, Inc. (“Royal” or “Royal Bancshares”) is subject to applicable regulatory approvals, and the acquisitions are also subject to certain closing conditions.

On April 20, 2017, the Board of Directors of the Corporation declared a quarterly dividend of $0.21 per share, payable June 1, 2017 to shareholders of record as of May 2, 2017.

SIGNIFICANT ITEMS OF NOTE
Results of Operations – First Quarter 2017 Compared to Fourth Quarter 2016

  • Net income for the three months ended March 31, 2017 was $9.0 million, as compared to $9.4 million for the three months ended December 31, 2016. Contributing to the decrease was a $511 thousand increase in merger expenses, a $763 thousand increase in salaries and wages related to annual merit increases, normalization of incentive compensation and staff additions, and a $583 thousand decrease in recoveries on mortgage servicing rights (“MSRs”). Partially offsetting these changes was an increase of $413 thousand in net interest income, a $768 thousand decrease in provision for loan and lease losses (the “Provision”) and a $1.2 million decrease in other operating expenses.
  • Net interest income for the three months ended March 31, 2017 was $27.4 million, an increase of $413 thousand from $27.0 million for the three months ended December 31, 2016. Average interest-earning assets increased by $28.7 million, with average loans increasing $37.7 million and average interest-bearing deposits with banks decreasing $15.6 million. The yield earned on loans increased by 6 basis points.
  • The tax-equivalent net interest margin of 3.74% for the first quarter of 2017 increased 9 basis points from 3.65% for the fourth quarter of 2016. The increase was largely the result of a 6 basis point increase in tax-equivalent yield earned on average loans, which totaled $2.56 billion for the three months ended March 31, 2017, and a 16 basis point increase in tax-equivalent yield on available for sale investment securities. The rate paid on interest-bearing liabilities remained unchanged on a linked-quarter basis. The impact of accretion of purchase accounting adjustments for the first quarter of 2017 and the fourth quarter of 2016 was the same, contributing 11 basis points to the margin in both periods.
  • Non-interest income for the three months ended March 31, 2017 decreased by $21 thousand from the fourth quarter of 2016. Decreases of $41 thousand and $95 thousand in service charges on deposits and dividends on bank stocks, respectively, were partially offset by a $92 thousand increase in loan servicing and other fees and a $48 thousand increase in insurance revenues.
  • Non-interest expense for the three months ended March 31, 2017 increased $1.6 million, to $26.7 million, as compared to $25.1 million for the fourth quarter of 2016. The increase was driven by the $511 thousand of merger-related expenses incurred as the Corporation prepares for the merger with Royal Bancshares, a $595 thousand increase in salaries and wages related to annual increases, normalization of incentive compensation and staff additions and a decrease in recoveries of MSR impairments, which were impacted positively in the fourth quarter of 2016 with the prospect of rising interest rates. Pennsylvania bank shares tax increased by $868 thousand, however this was offset with a corresponding decrease in contributions expense, which is reported as part of other operating expense.
  • For the three months ended March 31, 2017, net loan and lease charge-offs totaled $670 thousand, as compared to $1.3 million for the fourth quarter of 2016. The Provision for the three months ended March 31, 2017 was $291 thousand, a decrease of $768 thousand from the fourth quarter of 2016. The decrease in the Provision was the result of lower net charge-offs and improving credit quality metrics which factor into the calculation of the overall allowance for loan and lease losses (the “Allowance”) requirement.
  • Income tax expense for the first quarter of 2017 decreased by $49 thousand as compared to the fourth quarter of 2016. The increase in the effective tax rate from the fourth quarter of 2016 to the first quarter of 2017 was primarily the result of certain non-deductible merger expenses incurred in the first quarter of 2017.

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

  • Net income for the three months ended March 31, 2017 was $9.0 million, or $0.53 diluted earnings per share, as compared to $8.3 million, or diluted earnings per share of $0.49 for the same period in 2016. Contributing to the increase in net income were increases of $1.5 million in net interest income and $471 thousand in fees for wealth management services and decreases of $1.1 million in Provision, $198 thousand in amortization of intangible assets and $174 thousand in information technology expenses. Partially offsetting these changes were decreases of $513 thousand in insurance revenues and $76 thousand in gain on sale of mortgage loans, along with increases of $712 thousand in salaries and wages and $511 thousand in merger expenses.
  • Net interest income for the three months ended March 31, 2017 was $27.4 million, an increase of $1.5 million, or 5.8%, from $25.9 million for the same period in 2016. The increase in net interest income was primarily related to the growth in average loan balances between the periods. Average loans and leases for the three months ended March 31, 2017 increased by $247.1 million from the same period in 2016. The increase in average loan balances was offset by a 13 basis point decrease in tax-equivalent yield earned on loans and leases. The net effect of the yield decrease and volume increase on average loans and leases was a $1.8 million increase in tax-equivalent interest income on loans. Partially offsetting the increase in average loans was a $218.5 million increase in average interest-bearing deposits accompanied by a 14 basis point increase in rate paid on deposits.
  • The tax-equivalent net interest margin of 3.74% for the three months ended March 31, 2017 was a 13 basis point decrease from 3.87% for the same period in 2016. The primary reason for the decline in the margin was the 13 basis point decrease in tax-equivalent yield earned on loans and the 14 basis point increase in rate paid on deposits. The impact of accretion of purchase accounting adjustments for the first quarter of 2017 added 11 basis points to the tax-equivalent net interest margin, while the first quarter of 2016 saw a 16 basis point increase from this accretion.
  • Non-interest income for the three months ended March 31, 2017 increased by $74 thousand from the same period in 2016. A $144 thousand increase in other operating income and a $471 thousand increase in fees for wealth management services, as wealth assets have increased 26.3% from the March 31, 2016 level, were partially offset by a decrease of $76 thousand in gain on sale of residential mortgage loans, as market interest rate increases reduced origination activity, and a $513 thousand decrease in insurance revenues related to the recognition of contingent commissions from providers during the first quarter of 2016, which are being ratably recognized in 2017.
  • Non-interest expense for the three months ended March 31, 2017 increased $1.7 million from the same period in 2016, primarily related to salary and wage increases of $712 thousand due to staffing increases, annual salary and wage increases and increases in incentive compensation, a $511 thousand increase in merger expenses in connection with the merger with Royal, and a $700 thousand increase in other operating expenses, largely related to deferred compensation expense associated with the valuation of Corporation stock held in the deferred compensation trusts.
  • The Provision for the three months ended March 31, 2017 of $291 thousand was a $1.1 million decrease from the same period in 2016. Net charge-offs for the first quarter of 2017 were $670 thousand as compared to $422 thousand for the same period in 2016. The decrease in Provision is indicative of improvements in certain qualitative factors used to determine the Allowance.

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

  • Total portfolio loans and leases of $2.56 billion as of March 31, 2017, increased by $20.2 million from December 31, 2016. Loan growth was concentrated in the commercial mortgage segment which grew by $27.0 million and was partially offset by an $11.8 million decrease in commercial and industrial loans.
  • The Allowance as of March 31, 2017 was $17.1 million, or 0.67% 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, management also calculates two non-GAAP measures: the Allowance as a percentage of originated loans and leases, which was 0.75% as of March 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 1.12% as of March 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.
  • Available for sale investment securities as of March 31, 2017 were $391.0 million, a decrease of $176.0 million from December 31, 2016. The primary contributor to the decrease in the portfolio was the maturing, during January 2017, of $200 million of short-term U.S. Treasury bills.
  • Total assets as of March 31, 2017 were $3.29 billion, a decrease of $128.9 million from December 31, 2016. Increases in cash and cash equivalents and portfolio loans partially offset the decrease in available for sale investment securities discussed in the previous bullet point.
  • Wealth assets under management, administration, supervision and brokerage totaled $11.73 billion as of March 31, 2017, an increase of $397.0 million from December 31, 2016.
  • Deposits of $2.64 billion as of March 31, 2017 increased $56.9 million from December 31, 2016. Noninterest-bearing deposits increased by $35.4 million, while interest-bearing accounts increased by $21.5 million.
  • Borrowings of $198.3 million as of March 31, 2017 was a $195.6 million decrease from December 31, 2016. The decrease was largely comprised of short-term borrowings which were repaid at the beginning of January 2017 in connection with the maturing of $200 million of short-term U.S. Treasury bills.
  • The capital ratios for the Bank and the Corporation, as of March 31, 2017, as shown in the attached tables, indicate levels well above the regulatory minimum to be considered “well capitalized.” At the Bank level, all capital ratios have increased slightly from their December 31, 2016 levels due to the effect of an increase in retained earnings and a decrease in other comprehensive loss partially offset by an increase in risk-weighted assets. At the Corporation level, Tier 1 and Total (Tier 1 & 2) capital to risk weighted assets declined by 1 and 5 basis points, respectively, related to an increase in risk-weighted assets and the decrease in retained earnings associated with the dividend payment during the first quarter of 2017 which totaled $3.6 million.

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 obtain applicable regulatory approvals with respect to, or our inability to complete, the contemplated Royal and Hirshorn Boothby acquisitions and the opening of the Princeton office, that the integration of acquired businesses with the Corporation’s 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
March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016 March 31, 2016
Consolidated Balance Sheet (selected items)
Interest-bearing deposits with banks$ 69,978 $ 34,206 $ 30,118 $ 20,481 $ 33,954
Investment securities (AFS, HTM and Trading) 400,360 573,763 373,508 371,906 369,461
Loans held for sale 3,015 9,621 11,506 11,882 7,807
Portfolio loans and leases 2,555,589 2,535,425 2,493,357 2,423,821 2,378,841
Allowance for loan and lease losses ("ALLL") (17,107) (17,486) (17,744) (17,036) (16,845)
Goodwill and other intangible assets 124,629 125,170 126,000 126,888 127,777
Total assets 3,292,617 3,421,530 3,174,080 3,090,090 3,058,247
Deposits - interest-bearing 1,865,009 1,843,495 1,759,862 1,720,477 1,700,550
Deposits - non-interest-bearing 771,556 736,180 718,015 689,214 643,492
Short-term borrowings 23,613 204,151 50,065 19,119 37,010
Long-term FHLB advances and other borrowings 174,711 189,742 204,772 224,802 249,832
Subordinated notes 29,546 29,532 29,518 29,505 29,491
Total liabilities 2,904,522 3,040,403 2,795,621 2,717,623 2,693,070
Shareholders' equity 388,095 381,127 378,459 372,467 365,177
Average Balance Sheet (selected items)
Interest-bearing deposits with banks$ 39,669 $ 55,298 $ 33,532 $ 44,950 $ 39,050
Investment securities (AFS, HTM and Trading) 393,306 386,658 373,616 371,153 360,957
Loans held for sale 4,238 11,591 12,887 7,844 5,481
Portfolio loans and leases 2,551,439 2,506,376 2,464,085 2,404,799 2,303,103
Total interest-earning assets 2,988,652 2,959,923 2,884,120 2,828,746 2,708,591
Goodwill and intangible assets 124,884 125,614 126,505 127,402 128,296
Total assets 3,244,060 3,215,868 3,142,019 3,089,953 2,973,148
Deposits - interest-bearing 1,852,194 1,809,276 1,729,689 1,717,252 1,633,651
Short-term borrowings 47,603 40,629 40,966 32,328 34,158
Long-term FHLB advances and other borrowings 182,507 198,454 218,920 236,248 250,015
Subordinated notes 29,537 29,523 29,509 29,496 29,482
Total interest-bearing liabilities 2,111,841 2,077,882 2,019,084 2,015,324 1,947,306
Total liabilities 2,861,846 2,837,825 2,769,065 2,723,838 2,612,276
Shareholders' equity 382,214 378,043 372,954 366,115 360,872
Income Statement
Net interest income$ 27,403 $ 26,990 $ 26,717 $ 26,627 $ 25,902
Provision for loan and lease losses 291 1,059 1,412 445 1,410
Noninterest income 13,227 13,248 13,786 13,781 13,153
Noninterest expense 26,660 25,087 25,371 26,220 24,996
Income tax expense (benefit) 4,635 4,684 4,346 4,810 4,328
Net income 9,044 9,408 9,374 8,933 8,321
Basic earnings per share 0.53 0.56 0.56 0.53 0.49
Diluted earnings per share 0.53 0.55 0.55 0.52 0.49
Net income (core) (1) 9,375 9,402 9,392 8,961 8,331
Basic earnings per share (core) (1) 0.55 0.56 0.56 0.53 0.49
Diluted earnings per share (core) (1) 0.55 0.55 0.55 0.53 0.49
Cash dividends paid per share 0.21 0.21 0.21 0.20 0.20
Profitability Indicators
Return on average assets 1.13% 1.16% 1.19% 1.16% 1.13%
Return on average equity 9.60% 9.90% 10.00% 9.81% 9.27%
Return on tangible equity(1) 14.96% 15.68% 16.06% 16.02% 15.39%
Tax-equivalent net interest margin 3.74% 3.65% 3.71% 3.81% 3.87%
Efficiency ratio(1) 62.66% 60.30% 60.41% 62.62% 61.70%
Mortgage Banking Information
Mortgage loans originated$ 48,550 $ 78,749 $ 84,885 $ 64,893 $ 51,532
Residential mortgage loans sold - servicing retained 27,690 44,763 40,462 26,944 25,965
Residential mortgage loans sold - servicing released 4,981 4,632 10,522 5,278 2,397
Total residential mortgage loans sold$ 32,671 $ 49,395 $ 50,984 $ 32,222 $ 28,362
Residential mortgage loans serviced for others$ 638,553 $ 631,889 $ 618,134 $ 610,418 $ 605,366
Share Data
Closing share price$ 39.50 $ 42.15 $ 31.99 $ 29.20 $ 25.73
Book value per common share$ 22.87 $ 22.50 $ 22.40 $ 22.14 $ 21.73
Tangible book value per common share$ 15.53 $ 15.11 $ 14.94 $ 14.60 $ 14.13
Price / book value 172.71% 187.34% 142.80% 131.90% 118.38%
Price / tangible book value 254.41% 278.96% 214.07% 200.05% 182.10%
Weighted average diluted shares outstanding 17,182,689 17,164,675 17,072,358 17,027,419 16,883,364
Shares outstanding, end of period 16,969,451 16,939,715 16,893,878 16,824,564 16,801,801
Wealth Management Information:
Wealth assets under mgmt, administration, supervision and brokerage (2)$ 11,725,460 $ 11,328,457 $ 9,969,745 $ 9,632,521 $ 9,281,743
Fees for wealth management services$ 9,303 $ 9,327 $ 9,100 $ 9,431 $ 8,832
Capital Ratios
Bryn Mawr Trust Company
Tier I capital to risk weighted assets ("RWA") 10.58% 10.50% 10.99% 10.94% 10.69%
Total (Tier II) capital to RWA 11.25% 11.19% 11.70% 11.65% 11.39%
Tier I leverage ratio 8.83% 8.73% 9.17% 9.06% 9.15%
Tangible equity ratio (1) 8.46% 7.85% 8.85% 8.79% 8.53%
Common equity Tier I capital to RWA 10.58% 10.50% 10.99% 10.94% 10.69%
Bryn Mawr Bank Corporation
Tier I capital to RWA 10.50% 10.51% 10.42% 10.45% 10.22%
Total (Tier II) capital to RWA 12.30% 12.35% 12.30% 12.35% 12.13%
Tier I leverage ratio 8.77% 8.73% 8.70% 8.65% 8.76%
Tangible equity ratio (1) 8.32% 7.76% 8.28% 8.29% 8.10%
Common equity Tier I capital to RWA 10.50% 10.51% 10.42% 10.45% 10.22%
Asset Quality Indicators
Net loan and lease charge-offs ("NCO"s)$ 670 $ 1,317 $ 704 $ 254 $ 422
Nonperforming loans and leases ("NPL"s)$ 7,329 $ 8,363 $ 9,883 $ 9,617 $ 9,636
Other real estate owned ("OREO") 978 1,017 867 784 756
Total nonperforming assets ("NPA"s)$ 8,307 $ 9,380 $ 10,750 $ 10,401 $ 10,392
Nonperforming loans and leases 30 or more days past due$ 5,097 $ 6,072 $ 6,684 $ 5,599 $ 6,193
Performing loans and leases 30 to 89 days past due 6,077 3,062 2,537 3,564 6,296
Performing loans and leases 90 or more days past due - - - - -
Total delinquent loans and leases$ 11,174 $ 9,134 $ 9,221 $ 9,163 $ 12,489
Delinquent loans and leases to total loans and leases 0.44% 0.36% 0.37% 0.38% 0.52%
Delinquent performing loans and leases to total loans and leases 0.24% 0.12% 0.10% 0.15% 0.26%
NCOs / average loans and leases (annualized) 0.11% 0.21% 0.11% 0.04% 0.07%
NPLs / total portfolio loans and leases 0.29% 0.33% 0.40% 0.40% 0.41%
NPAs / total loans and leases and OREO 0.32% 0.37% 0.43% 0.43% 0.44%
NPAs / total assets 0.25% 0.27% 0.34% 0.34% 0.34%
ALLL / NPLs 233.42% 209.09% 179.54% 177.14% 174.81%
ALLL / portfolio loans 0.67% 0.69% 0.71% 0.70% 0.71%
ALLL on originated loans and leases / Originated loans and leases (1) 0.75% 0.78% 0.81% 0.81% 0.83%
(Total Allowance + Loan mark) / Total Gross portfolio loans and leases (1) 1.12% 1.17% 1.24% 1.30% 1.37%
Troubled debt restructurings ("TDR"s) included in NPLs$ 2,681 $ 2,632 $ 1,680 $ 1,779 $ 1,756
TDRs in compliance with modified terms 6,492 6,395 6,305 4,984 4,893
Total TDRs$ 9,173 $ 9,027 $ 7,985 $ 6,763 $ 6,649
(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)
March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016 March 31, 2016
Assets
Cash and due from banks$ 17,457 $ 16,559 $ 18,905 $ 13,710 $ 15,594
Interest-bearing deposits with banks 69,978 34,206 30,118 20,481 33,954
Cash and cash equivalents 87,435 50,765 49,023 34,191 49,548
Investment securities, available for sale 391,028 566,996 366,910 365,470 365,819
Investment securities, held to maturity 5,194 2,879 2,896 2,915 -
Investment securities, trading 4,138 3,888 3,702 3,521 3,642
Loans held for sale 3,015 9,621 11,506 11,882 7,807
Portfolio loans and leases, originated 2,286,814 2,240,987 2,176,549 2,090,070 2,015,683
Portfolio loans and leases, acquired 268,775 294,438 316,808 333,751 363,158
Total portfolio loans and leases 2,555,589 2,535,425 2,493,357 2,423,821 2,378,841
Less: Allowance for losses on originated loan and leases (17,069) (17,458) (17,716) (17,008) (16,817)
Less: Allowance for losses on acquired loan and leases (38) (28) (28) (28) (28)
Total allowance for loan and lease losses (17,107) (17,486) (17,744) (17,036) (16,845)
Net portfolio loans and leases 2,538,482 2,517,939 2,475,613 2,406,785 2,361,996
Premises and equipment 40,515 41,778 42,559 43,607 44,712
Accrued interest receivable 8,392 8,533 8,066 8,144 8,205
Mortgage servicing rights 5,686 5,582 4,793 4,646 5,182
Bank owned life insurance 39,479 39,279 39,055 38,836 38,616
Federal Home Loan Bank ("FHLB") stock 8,505 17,305 13,185 10,618 12,142
Goodwill 104,765 104,765 104,765 104,765 104,765
Intangible assets 19,864 20,405 21,235 22,123 23,012
Other investments 8,716 8,627 9,121 8,722 8,487
Other assets 27,403 23,168 21,651 23,865 24,314
Total assets$ 3,292,617 $ 3,421,530 $ 3,174,080 $ 3,090,090 $ 3,058,247
Liabilities
Deposits
Noninterest-bearing$ 771,556 $ 736,180 $ 718,015 $ 689,214 $ 643,492
Interest-bearing 1,865,009 1,843,495 1,759,862 1,720,477 1,700,550
Total deposits 2,636,565 2,579,675 2,477,877 2,409,691 2,344,042
Short-term borrowings 23,613 204,151 50,065 19,119 37,010
Long-term FHLB advances and other borrowings 174,711 189,742 204,772 224,802 249,832
Subordinated notes 29,546 29,532 29,518 29,505 29,491
Accrued interest payable 2,722 2,734 1,854 1,846 1,294
Other liabilities 37,365 34,569 31,535 32,660 31,401
Total liabilities 2,904,522 3,040,403 2,795,621 2,717,623 2,693,070
Shareholders' equity
Common stock 21,141 21,111 21,064 20,972 20,949
Paid-in capital in excess of par value 233,910 232,806 231,398 230,298 229,432
Less: common stock held in treasury, at cost (66,969) (66,950) (66,895) (66,200) (66,140)
Accumulated other comprehensive income (loss), net of tax (1,990) (2,409) 2,128 2,488 1,502
Retained earnings 202,003 196,569 190,764 184,909 179,434
Total shareholders equity 388,095 381,127 378,459 372,467 365,177
Total liabilities and shareholders' equity$ 3,292,617 $ 3,421,530 $ 3,174,080 $ 3,090,090 $ 3,058,247

Bryn Mawr Bank Corporation
Supplemental Balance Sheet Information (unaudited)
(dollars in thousands)
Portfolio Loans and Leases as of
March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016 March 31, 2016
Commercial mortgages$ 1,137,870 $ 1,110,897 $ 1,089,621 $ 1,055,934 $ 1,044,415
Home equity loans and lines 203,962 208,000 206,578 202,989 205,896
Residential mortgages 418,264 413,540 418,408 414,863 412,006
Construction 145,699 141,964 133,269 133,313 119,193
Total real estate loans 1,905,795 1,874,401 1,847,876 1,807,099 1,781,510
Commercial & Industrial 567,917 579,791 565,497 538,684 523,053
Consumer 23,932 25,341 23,717 21,561 21,427
Leases 57,945 55,892 56,267 56,477 52,851
Total non-real estate loans and leases 649,794 661,024 645,481 616,722 597,331
Total portfolio loans and leases$ 2,555,589 $ 2,535,425 $ 2,493,357 $ 2,423,821 $ 2,378,841
Nonperforming Loans and Leases as of
March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016 March 31, 2016
Commercial mortgages$ 315 $ 320 $ 139 $ 139 $ 872
Home equity loans and lines 1,828 2,289 2,827 3,011 1,953
Residential mortgages 2,640 2,658 2,845 2,909 2,923
Construction - - - - 12
Total nonperforming real estate loans 4,783 5,267 5,811 6,059 5,760
Commercial & Industrial 2,471 2,957 3,960 3,457 3,822
Consumer - 2 2 4 -
Leases 75 137 110 97 54
Total nonperforming non-real estate loans and leases 2,546 3,096 4,072 3,558 3,876
Total nonperforming portfolio loans and leases$ 7,329 $ 8,363 $ 9,883 $ 9,617 $ 9,636
Net Loan and Lease Charge-Offs (Recoveries) for the Three Months Ended
March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016 March 31, 2016
Commercial mortgage$ (3) $ (51) $ (4) $ (3) $ 107
Home equity loans and lines 438 69 375 11 71
Residential 27 28 2 262 (35)
Construction (1) (1) - (62) -
Total net charge-offs (recoveries) of real estate loans 461 45 373 208 143
Commercial & Industrial 59 1,128 95 (44) 25
Consumer 39 42 58 30 20
Leases 111 102 178 60 234
Total net charge-offs of non-real estate loans and leases 209 1,272 331 46 279
Total net charge-offs$ 670 $ 1,317 $ 704 $ 254 $ 422

Bryn Mawr Bank Corporation
Supplemental Balance Sheet Information (unaudited)
(dollars in thousands)
Investment Securities Available for Sale, at Fair Value
March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016 March 31, 2016
U.S. Treasury securities $ 100 $ 200,097 $ 101 $ 102 $ 102
Obligations of the U.S. Government and agencies 100,476 82,198 76,598 86,134 96,080
State & political subdivisions - tax-free 30,416 33,005 36,735 39,047 39,502
State & political subdivisions - taxable 524 525 529 532 1,093
Mortgage-backed securities 197,420 185,951 184,919 186,354 183,127
Collateralized mortgage obligations 45,476 48,694 51,344 36,702 29,106
Other debt securities 1,299 1,299 1,450 1,450 1,700
Bond mutual funds 11,920 11,895 11,847 11,774 11,725
Other investments 3,397 3,332 3,387 3,375 3,384
Total$ 391,028 $ 566,996 $ 366,910 $ 365,470 $ 365,819
Unrealized Gain (Loss) on Investment Securities Available for Sale
March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016 March 31, 2016
U.S. Treasury securities $ - $ 3 $ - $ 1 $ 1
Obligations of the U.S. Government and agencies (803) (913) 946 1,183 984
State & political subdivisions - tax-free (10) (96) 131 240 173
State & political subdivisions - taxable 1 2 5 8 18
Mortgage-backed securities 196 (47) 3,801 3,958 3,026
Collateralized mortgage obligations (777) (794) 253 496 330
Other debt securities (1) (1) - - -
Bond mutual funds (36) (61) (109) (182) (231)
Other investments 132 13 34 (66) (155)
Total$ (1,298) $ (1,894) $ 5,061 $ 5,638 $ 4,146
Deposits
March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016 March 31, 2016
Interest-bearing deposits:
Interest-bearing checking$ 395,131 $ 379,424 $ 333,055 $ 333,425 $ 335,240
Money market 757,071 761,657 725,116 718,144 773,637
Savings 255,791 232,193 228,391 217,877 190,477
Wholesale non-maturity deposits 69,471 74,272 64,664 58,690 62,454
Wholesale time deposits 68,164 73,037 99,052 113,274 131,145
Retail time deposits 319,381 322,912 309,584 279,067 207,597
Total interest-bearing deposits 1,865,009 1,843,495 1,759,862 1,720,477 1,700,550
Noninterest-bearing deposits 771,556 736,180 718,015 689,214 643,492
Total deposits$ 2,636,565 $ 2,579,675 $ 2,477,877 $ 2,409,691 $ 2,344,042

Bryn Mawr Bank Corporation
Detailed Income Statements (unaudited)
(dollars in thousands, except per share data)
For the Three Months Ended
March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016 March 31, 2016
Interest income:
Interest and fees on loans and leases$ 28,482 $ 28,230 $ 27,931 $ 27,679 $ 26,696
Interest on cash and cash equivalents 66 53 27 42 46
Interest on investment securities 1,778 1,639 1,556 1,565 1,527
Total interest income 30,326 29,922 29,514 29,286 28,269
Interest expense:
Interest on deposits 1,828 1,780 1,575 1,402 1,076
Interest on short-term borrowings 27 22 34 20 17
Interest on FHLB advances and other borrowings 698 760 818 867 908
Interest on subordinated notes 370 370 370 370 366
Total interest expense 2,923 2,932 2,797 2,659 2,367
Net interest income 27,403 26,990 26,717 26,627 25,902
Provision for loan and lease losses (the "Provision") 291 1,059 1,412 445 1,410
Net interest income after Provision 27,112 25,931 25,305 26,182 24,492
Noninterest income:
Fees for wealth management services 9,303 9,327 9,100 9,431 8,832
Insurance revenue 763 715 886 845 1,276
Service charges on deposits 647 688 688 713 702
Loan servicing and other fees 503 411 497 539 492
Net gain on sale of loans 629 607 879 857 705
Net gain (loss) on sale of investment securities available for sale 1 9 (28) (43) (15)
Net (loss) gain on sale of other real estate owned - - - - (76)
Dividends on FHLB and FRB stocks 214 309 277 263 214
Other operating income 1,167 1,182 1,487 1,176 1,023
Total noninterest income 13,227 13,248 13,786 13,781 13,153
Noninterest expense:
Salaries and wages 12,450 11,855 11,621 12,197 11,738
Employee benefits 2,559 2,207 2,420 2,436 2,485
Occupancy and bank premises 2,526 2,407 2,349 2,367 2,488
Furniture, fixtures and equipment 1,974 1,869 1,837 1,895 1,919
Advertising 386 391 334 372 284
Amortization of intangible assets 693 830 888 889 891
Impairment (recovery) of mortgage servicing rights ("MSRs") 3 (580) 29 599 83
Due diligence, merger-related and merger integration expenses 511 - - - -
Professional fees 711 963 937 946 813
Pennsylvania bank shares tax 664 (204) 675 640 638
Information technology 874 857 881 875 1,048
Other operating expenses 3,309 4,492 3,400 3,004 2,609
Total noninterest expense 26,660 25,087 25,371 26,220 24,996
Income before income taxes 13,679 14,092 13,720 13,743 12,649
Income tax expense 4,635 4,684 4,346 4,810 4,328
Net income$ 9,044 $ 9,408 $ 9,374 $ 8,933 $ 8,321
Per share data:
Weighted average shares outstanding 16,954,132 16,916,705 16,860,727 16,812,219 16,848,202
Dilutive common shares 228,557 247,970 211,631 215,200 34,991
Adjusted weighted average diluted shares 17,182,689 17,164,675 17,072,358 17,027,419 16,883,364
Basic earnings (loss) per common share$ 0.53 $ 0.56 $ 0.56 $ 0.53 $ 0.49
Diluted earnings (loss) per common share$ 0.53 $ 0.55 $ 0.55 $ 0.52 $ 0.49
Dividend declared per share$ 0.21 $ 0.21 $ 0.21 $ 0.20 $ 0.20
Effective tax rate 33.88% 33.24% 31.68% 35.09% 34.59%

Bryn Mawr Bank Corporation
Tax-Equivalent Net Interest Margin (unaudited)
(dollars in thousands, except per share data)
For The Three Months Ended
March 31, 2017December 31, 2016September 30, 2016June 30, 2016March 31, 2016
(dollars in thousands) Average BalanceInterest Income/ ExpenseAverage Rates Earned/ PaidAverage BalanceInterest Income/ ExpenseAverage Rates Earned/ PaidAverage BalanceInterest Income/ ExpenseAverage Rates Earned/ PaidAverage BalanceInterest Income/ ExpenseAverage Rates Earned/ PaidAverage BalanceInterest Income/ ExpenseAverage Rates Earned/ Paid
Assets:
Interest-bearing deposits with other banks $ 39,669 $ 66 0.67%$ 55,298 $ 53 0.38%$ 33,532 $ 27 0.32%$ 44,950 $ 42 0.38%$ 39,050 $ 46 0.47%
Investment securities - available for sale:
Taxable 354,229 1,653 1.89% 344,931 1,498 1.73% 329,293 1,423 1.72% 325,893 1,433 1.77% 316,353 1,397 1.78%
Tax-exempt 31,485 164 2.11% 34,985 175 1.99% 37,893 189 1.98% 39,193 187 1.92% 40,658 191 1.89%
Total investment securities - available for sale 385,714 1,817 1.91% 379,916 1,673 1.75% 367,186 1,612 1.75% 365,086 1,620 1.78% 357,011 1,588 1.79%
Investment securities - held to maturity 3,702 7 0.77% 2,889 7 0.96% 2,907 6 0.82% 2,427 4 0.66% - -
Investment securities - trading 3,890 8 0.83% 3,853 16 1.65% 3,523 2 0.23% 3,640 2 0.22% 3,946 2 0.20%
Loans and leases * 2,555,677 28,622 4.54% 2,517,967 28,354 4.48% 2,476,972 28,032 4.50% 2,412,643 27,761 4.63% 2,308,584 26,778 4.67%
Total interest-earning assets 2,988,652 30,520 4.14% 2,959,923 30,103 4.05% 2,884,120 29,679 4.09% 2,828,746 29,429 4.18% 2,708,591 28,414 4.22%
Cash and due from banks 14,942 16,127 16,228 16,413 16,501
Less: allowance for loan and lease losses (17,580) (17,858) (17,257) (17,271) (16,239)
Other assets 258,046 257,676 258,928 262,065 264,295
Total assets $ 3,244,060 $ 3,215,868 $ 3,142,019 $ 3,089,953 $ 2,973,148
Liabilities:
Interest-bearing deposits:
Savings, NOW and market rate deposits $ 1,388,561 $ 756 0.22%$ 1,328,577 $ 686 0.21%$ 1,286,404 $ 641 0.20%$ 1,273,964 $ 589 0.19%$ 1,279,630 $ 569 0.18%
Wholesale deposits 143,461 317 0.90% 156,541 319 0.81% 164,706 327 0.79% 196,517 361 0.74% 137,201 233 0.68%
Retail time deposits 320,172 755 0.96% 324,158 775 0.95% 278,579 607 0.87% 246,771 452 0.74% 216,820 274 0.51%
Total interest-bearing deposits 1,852,194 1,828 0.40% 1,809,276 1,780 0.39% 1,729,689 1,575 0.36% 1,717,252 1,402 0.33% 1,633,651 1,076 0.26%
Borrowings:
Short-term borrowings 47,603 27 0.23% 40,629 22 0.22% 40,966 34 0.33% 32,328 20 0.25% 34,158 17 0.20%
Long-term FHLB advances and other borrowings 182,507 698 1.55% 198,454 760 1.52% 218,920 818 1.49% 236,248 867 1.48% 250,015 908 1.46%
Subordinated notes 29,537 370 5.08% 29,523 370 4.99% 29,509 370 4.99% 29,496 370 5.05% 29,482 366 4.99%
Total borrowings 259,647 1,095 1.71% 268,606 1,152 1.71% 289,395 1,222 1.68% 298,072 1,257 1.70% 313,655 1,291 1.66%
Total interest-bearing liabilities 2,111,841 2,923 0.56% 2,077,882 2,932 0.56% 2,019,084 2,797 0.55% 2,015,324 2,659 0.53% 1,947,306 2,367 0.49%
Noninterest-bearing deposits 711,794 724,465 716,581 675,710 631,047
Other liabilities 38,211 35,478 33,400 32,804 33,923
Total noninterest-bearing liabilities 750,005 759,943 749,981 708,514 664,970
Total liabilities 2,861,846 2,837,825 2,769,065 2,723,838 2,612,276
Shareholders' equity 382,214 378,043 372,954 366,115 360,872
Total liabilities and shareholders' equity $ 3,244,060 $ 3,215,868 $ 3,142,019 $ 3,089,953 $ 2,973,148
Interest income to earning assets 4.14% 4.05% 4.09% 4.18% 4.22%
Net interest spread 3.58% 3.49% 3.54% 3.65% 3.73%
Effect of noninterest-bearing sources 0.16% 0.16% 0.17% 0.16% 0.14%
Tax-equivalent net interest margin $ 27,597 3.74% $ 27,171 3.65% $ 26,882 3.71% $ 26,770 3.81% $ 26,047 3.87%
Tax-equivalent adjustment $ 194 0.02% $ 181 0.02% $ 165 0.02% $ 143 0.02% $ 145 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
Loans and leases $ 726 0.12% $ 742 0.12% $ 578 0.09% $ 1,076 0.18% $ 953 0.17%
Retail time deposits (19)-0.02% (19)-0.02% (29)-0.04% (61)-0.10% (110)-0.20%
Short-term borrowings - 0.00% - 0.00% - 0.00% - 0.00% (12)-0.14%
Long-term FHLB advances and other borrowings (30)-0.07% (30)-0.06% (30)-0.05% (30)-0.05% (30)-0.05%
Net interest income from fair value marks $ 775 $ 791 $ 637 $ 1,167 $ 1,105
Purchase accounting effect on tax-equivalent margin 0.11% 0.11% 0.09% 0.17% 0.16%
* 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
March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016 March 31, 2016
Reconciliation of Net Income to Net Income (core):
Net income (loss) (a GAAP measure)$ 9,044 $ 9,408 $ 9,374 $ 8,933 $ 8,321
Less: Tax-effected non-core noninterest income:
Loss (gain) on sale of investment securities available for sale (1) (6) 18 28 10
Add: Tax-effected non-core noninterest expense items:
Due diligence, merger-related and merger integration expenses 332 - - - -
Net income (core) (a non-GAAP measure)$ 9,375 $ 9,402 $ 9,392 $ 8,961 $ 8,331
Calculation of Basic and Diluted Earnings per Common Share (core):
Weighted average common shares outstanding 16,954,132 16,916,705 16,860,727 16,812,219 16,848,202
Dilutive common shares 228,557 247,970 211,631 215,200 35,162
Adjusted weighted average diluted shares 17,182,689 17,164,675 17,072,358 17,027,419 16,883,364
Basic earnings per common share (core) (a non-GAAP measure)$ 0.55 $ 0.56 $ 0.56 $ 0.53 $ 0.49
Diluted earnings per common share (core) (a non-GAAP measure)$ 0.55 $ 0.55 $ 0.55 $ 0.53 $ 0.49
Calculation of Return on Average Tangible Equity:
Net income (loss)$ 9,044 $ 9,408 $ 9,374 $ 8,933 $ 8,321
Add: Tax-effected amortization and impairment of intangible assets 450 540 577 578 579
Net tangible income (numerator)$ 9,494 $ 9,948 $ 9,951 $ 9,511 $ 8,900
Average shareholders' equity$ 382,214 $ 378,043 $ 372,954 $ 366,115 $ 360,872
Less: Average goodwill and intangible assets (124,884) (125,614) (126,505) (127,402) (128,296)
Net average tangible equity (denominator)$ 257,330 $ 252,429 $ 246,449 $ 238,713 $ 232,576
Return on tangible equity (a non-GAAP measure) 14.96% 15.68% 16.06% 16.02% 15.39%
Calculation of Tangible Equity Ratio:
Total shareholders' equity$ 388,095 $ 381,127 $ 378,459 $ 372,467 $ 365,177
Less: Goodwill and intangible assets (124,629) (125,170) (126,000) (126,888) (127,777)
Net tangible equity (numerator)$ 263,466 $ 255,957 $ 252,459 $ 245,579 $ 237,400
Total assets$ 3,292,617 $ 3,421,530 $ 3,174,080 $ 3,090,090 $ 3,058,247
Less: Goodwill and intangible assets (124,629) (125,170) (126,000) (126,888) (127,777)
Tangible assets (denominator)$ 3,167,988 $ 3,296,360 $ 3,048,080 $ 2,963,202 $ 2,930,470
Tangible equity ratio 8.32% 7.76% 8.28% 8.29% 8.10%
Calculation of Efficiency Ratio:
Noninterest expense$ 26,660 $ 25,087 $ 25,371 $ 26,220 $ 24,996
Less: certain noninterest expense items*:
Loss on pension termination - - - - -
Severance expense (Salaries and wages) - - - - -
Branch lease termination expense - - - - -
Debt and swap prepayment penalty (Other operating expenses) - - - - -
Amortization of intangibles (693) (830) (888) (889) (891)
Impairment of intangible assets - - - - -
Due diligence, merger-related and merger integration expenses (511) - - - -
Noninterest expense (adjusted) (numerator)$ 25,456 $ 24,257 $ 24,483 $ 25,331 $ 24,105
Noninterest income$ 13,227 $ 13,248 $ 13,786 $ 13,781 $ 13,153
Less: non-core noninterest income items:
Loss (gain) on sale of investment securities available for sale (2) (9) 28 43 15
Noninterest income (core)$ 13,225 $ 13,239 $ 13,814 $ 13,824 $ 13,168
Net interest income 27,403 26,990 26,717 26,627 25,902
Noninterest income (core) and net interest income (denominator)$ 40,628 $ 40,229 $ 40,531 $ 40,451 $ 39,070
Efficiency ratio 62.66% 60.30% 60.41% 62.62% 61.70%
* 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$ 17,107 $ 17,486 $ 17,744 $ 17,036 $ 16,845
less: Allowance on acquired loans 38 28 28 28 28
Allowance on originated loans and leases$ 17,069 $ 17,458 $ 17,716 $ 17,008 $ 16,817
Total Allowance$ 17,107 $ 17,486 $ 17,744 $ 17,036 $ 16,845
Loan mark on acquired loans 11,544 12,286 13,391 14,566 15,930
Total Allowance + Loan mark$ 28,651 $ 29,772 $ 31,135 $ 31,602 $ 32,775
Total Portfolio loans and leases$ 2,555,589 $ 2,535,425 $ 2,493,357 $ 2,423,821 $ 2,378,841
less: Originated loans and leases 2,286,814 2,240,987 2,176,549 2,090,070 2,015,683
Net acquired loans$ 268,775 $ 294,438 $ 316,808 $ 333,751 $ 363,158
add: Loan mark on acquired loans 11,544 12,286 13,391 14,566 15,930
Gross acquired loans (excludes loan mark)$ 280,319 $ 306,724 $ 330,199 $ 348,317 $ 379,088
Originated loans and leases 2,286,814 2,240,987 2,176,549 2,090,070 2,015,683
Total Gross portfolio loans and leases$ 2,567,133 $ 2,547,711 $ 2,506,748 $ 2,438,387 $ 2,394,771

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

Source:Bryn Mawr Bank Corporation