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Bryn Mawr Bank Corporation Reports Record Quarterly Net Income, Wealth Assets Top $12 Billion, Dividend Increases by 5%

BRYN MAWR, Pa., July 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 $9.4 million and diluted earnings per share of $0.55 for the three months ended June 30, 2017, as compared to net income of $9.0 million, or $0.53 diluted earnings per share, for the three months ended March 31, 2017 and $8.9 million, or $0.52 diluted earnings per share, for the three months ended June 30, 2016. Included in net income for the three months ended June 30, 2017 and March 31, 2017 were pre-tax due diligence and merger-related expenses of $1.2 million and $511 thousand, respectively, with the 2017 figures primarily related to the pending merger with Royal Bancshares of Pennsylvania, Inc. (“Royal Bank”).

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 $10.2 million, or $0.59 diluted earnings per share, for the three months ended June 30, 2017 as compared to $9.4 million, or $0.55 diluted earnings per share, for the three months ended March 31, 2017 and $9.0 million, or $0.53 diluted earnings per share, for the three months ended June 30, 2016. Management believes the core net income measure is important in evaluating the Corporation’s performance on a more comparable basis between periods. A reconciliation of this and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release.

“We are very pleased with the results for the second quarter,” commented Frank Leto, President and Chief Executive Officer, continuing, “For the first time in the Corporation’s history, our core net income exceeded $10 million for the quarter and our wealth assets have exceeded the $12 billion mark.”

Mr. Leto continued, “Not only is the growth in our loan portfolio strong, increasing 4.4% from March 31, 2017 to June 30, 2017, the credit quality of the portfolio remains stable, as evidenced by the reduced provision for loan and lease losses recorded this quarter. In addition, noninterest income was boosted by the outstanding performance of our newly established capital markets group, which opened for business in May 2017 and has already recorded revenue of $953 thousand for the quarter.”

On the corporate development front, Mr. Leto noted, “The Royal Bank merger preparations are continuing, with the close of the transaction expected in the third quarter of 2017. In addition, the May 2017 acquisition of Hirshorn Boothby, located in Chestnut Hill, Philadelphia, along with the opening of our Princeton wealth management office, positions us well to capitalize on the expanded footprint that will be created by the addition of the Royal Bank branch network.”

The acquisition of Royal Bank is subject to applicable regulatory approvals and is also subject to certain closing conditions.

On July 20, 2017, the Board of Directors of the Corporation declared a quarterly dividend of $0.22 per share, payable September 1, 2017 to shareholders of record as of August 2, 2017. This represents a $0.01, or 4.8%, increase from the previous quarter.

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

  • Net income for the three months ended June 30, 2017 was $9.4 million, or $0.55 diluted earnings per share, as compared to $9.0 million, or $0.53 diluted earnings per share for the three months ended March 31, 2017. Contributing to the increase was a $562 thousand increase in net interest income, a $374 thousand decrease in provision for loan and lease loss (the “Provision”) and an increase of $504 thousand in fees for wealth management services and the addition of $953 thousand in capital markets revenue, related to our newly-established capital markets group. Partially offsetting these items were increases of $1.1 million in salaries and wages, $725 thousand in due diligence, merger-related and merger integration costs and $477 thousand in other operating expenses.
  • Net interest income for the three months ended June 30, 2017 was $28.0 million, an increase of $562 thousand from $27.4 million for the three months ended March 31, 2017. Average interest-earning assets increased by $82.6 million, with average loans increasing $59.9 million and average available for sale investment securities increasing $34.4 million. The tax-equivalent yield earned on available for sale investment securities increased by 9 basis points while the tax-equivalent yield earned on loans decreased by 5 basis points. In conjunction with the Royal Bank merger, management intends to immediately sell certain acquired investment securities. In anticipation of these investment sales, management has begun purchasing certain securities that more closely align with the management’s desired liquidity and interest rate risk profile.
  • The tax-equivalent net interest margin of 3.68% for the second quarter of 2017 decreased 6 basis points from 3.74% for the first quarter of 2017. During the second quarter of 2017, the accretion of purchase accounting adjustments contributed a 6 basis point increase in the tax-equivalent net interest margin as compared to an 11 basis point increase for the three months ended March 31, 2017. Excluding the effect of the accretion of purchase accounting adjustments, the tax-equivalent net interest margin remained relatively flat quarter over quarter with the tax-equivalent yield on average loans increasing 1 basis point over the first quarter and the tax-equivalent yield on available for sale investment securities increasing 9 basis points, as management positions the investment portfolio in anticipation of the Royal Bank merger as described in the previous bullet point.
  • Non-interest income for the three months ended June 30, 2017 increased by $1.6 million from the first quarter of 2017. Largely contributing to this increase was an increase of $504 thousand in revenue for wealth management services, $310 thousand of which was related to tax services provided during the quarter, a $180 thousand increase in insurance revenues attributed to the May 2017 acquisition of Hirshorn Boothby, and a $953 thousand contribution from the newly-established capital markets group related to interest-rate swap fee income.
  • Non-interest expense for the three months ended June 30, 2017 increased $1.8 million, to $28.5 million, as compared to $26.7 million for the first quarter of 2017. The significant contributors to this increase included a $1.1 million increase in salaries and wages largely related to staffing additions in connection with the Hirshorn Boothby acquisition, the Capital Markets initiative and the Princeton wealth management office, as well as increases in incentive compensation along with an increase of $725 thousand in due diligence, merger-related and merger integration costs, most of which was related to the Royal Bank merger. Additionally, other operating expenses increased by $477 thousand related to a $117 thousand increase in deferred compensation expense associated with the valuation of Corporation stock held in the deferred compensation trusts and $200 thousand increase in impairment of other real estate owned (“OREO”) and repossessed assets. Partially offsetting these increases was a $367 thousand decrease in Pennsylvania bank shares tax resulting from changes in revenue apportionment for 2016 and tax credits connected to contributions to local schools under the Pennsylvania Educational Improvement Tax Credit (EITC) program.
  • For the three months ended June 30, 2017, net loan and lease charge-offs totaled $625 thousand, as compared to $670 thousand for the first quarter of 2017. The Provision for the three months ended June 30, 2017 was a release of $83 thousand as compared to a Provision of $291 thousand for the first quarter of 2017. The decrease in the Provision was primarily related to a decline in certain historic charge-off rates over the look-back period, along with improvements in certain economic indicators which factor into the calculation of the overall allowance for loan and lease losses (the “Allowance”) requirement.
  • Income tax expense for the second quarter of 2017 increased by $270 thousand as compared to the first quarter of 2016. The 33 basis point increase in the effective tax rate from the first quarter of 2017 to the second quarter of 2017 was primarily the result of certain non-deductible merger expenses incurred in the second quarter of 2017.

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

  • Net income for the three months ended June 30, 2017 was $9.4 million, or $0.55 diluted earnings per share, as compared to $8.9 million, or diluted earnings per share of $0.52, for the same period in 2016. Contributing to the increase in net income was an increase of $1.3 million in net interest income, a decrease of $528 thousand in Provision, as well as increases of $376 thousand in fees for wealth management services and $953 thousand in capital markets revenue. Partially offsetting these changes were decreases of $337 thousand in gain on sale of loans, along with increases of $1.4 million in salaries and wages and $1.2 million in due diligence, merger-related and merger integration costs.
  • Net interest income for the three months ended June 30, 2017 was $28.0 million, an increase of $1.3 million, or 5.0%, from $26.6 million for the same period in 2016. The accretion of purchase accounting adjustments positively impacted the tax-equivalent net interest income recorded for the second quarter of 2017 by $450 thousand, as compared to $1.2 million for the same period in 2016. Average loans and leases for the three months ended June 30, 2017 increased by $203.0 million from the same period in 2016. Excluding the effect of the accretion of purchase accounting adjustments, the tax-equivalent yield on loans and leases decreased 2 basis points. The net effect of the yield decrease and volume increase on average loans and leases was a $2.2 million increase in tax-equivalent interest income on loans. Average available for sale investment securities increased by $55.0 million for the three months ended June 30, 2017 as compared to the same period in 2016, and experienced a 22 basis point tax-equivalent yield increase. The increase in volume and yield on available for sale investment securities resulted in a $470 thousand increase in tax-equivalent interest income for the second quarter of 2017 as compared to the same period in 2016. Partially offsetting the increase in average loans and available for sale investment securities was a $136.4 million increase in average interest-bearing deposits accompanied by a 10 basis point increase in rate paid on deposits resulting in a $581 thousand increase in interest expense for the second quarter of 2017 as compared to the same period in 2016.
  • The tax-equivalent net interest margin of 3.68% for the three months ended June 30, 2017 was a 13 basis point decrease from 3.81% for the same period in 2016. The decrease was largely related to the lower contribution to the tax-equivalent net interest margin from the accretion of purchase accounting adjustments. For the second quarter of 2017, the accretion of purchase accounting adjustments contributed 6 basis points to the tax-equivalent net interest margin as compared to 17 basis points for the same period in 2016. Excluding the effect of the accretion of purchase accounting adjustments, the tax-equivalent net interest margin decreased 2 basis points over the prior year quarter with the tax-equivalent yield on average loans decreasing 2 basis points over the prior year quarter. The tax-equivalent yield on available for sale investment securities increased 22 basis points, as management positions the investment portfolio in anticipation of the Royal Bank merger. The slight decline in the margin was also attributed to a 10 basis point increase in rate paid on deposits.
  • Non-interest income for the three months ended June 30, 2017 increased by $1.0 million from the same period in 2016. An increase of $376 thousand in fees for wealth management services, as a 25.1% increase in wealth assets from the June 30, 2016 level, and the $953 thousand in revenue generated by the Capital Markets initiative, were partially offset by a decrease of $337 thousand in gain on sale of loans, as origination activity has slowed from the same period in 2016.
  • Non-interest expense for the three months ended June 30, 2017 increased $2.3 million from the same period in 2016. The increase was related to a $1.4 million increase in salary and wages due to staffing increases from the Capital Markets initiative, the Hirshorn Boothby acquisition and the Princeton wealth management office, in addition to annual salary and wage increases and increases in incentive compensation, and a $1.2 million increase in due diligence, merger-related and merger integration costs primarily related to the Royal Bank merger, and a $782 thousand increase in other operating expenses, largely related to increases in contributions (which were offset by tax credits for Pennsylvania bank shares tax) and impairments of OREO and repossessed assets recorded in the second quarter of 2017.
  • For the three months ended June 30, 2017, the Corporation recorded a release from Allowance of $83 thousand as compared to a Provision of $445 thousand for the same period in 2016. Net charge-offs for the second quarter of 2017 were $625 thousand as compared to $254 thousand for the same period in 2016. The decrease in the Provision was primarily related to a decline in certain historic charge-off rates over the look-back period, along with improvements in certain economic indicators which factor into the calculation of the overall Allowance.

Financial Condition – June 30, 2017 Compared to December 31, 2016

  • Total portfolio loans and leases of $2.67 billion as of June 30, 2017, increased by $131.2 million from December 31, 2016. Loan growth was concentrated in the commercial mortgage, construction and commercial and industrial sections of the portfolio, which increased by $87.0 million, or 7.8%, $14.6 million, or 10.3% and $19.4 million, or 3.4%, respectively.
  • The Allowance as of June 30, 2017 was $16.4 million, or 0.61% 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 0.68% as of June 30, 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 1.03% as of June 30, 2017, as compared to 1.17% as of December 31, 2016. A reconciliation of these and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release. The decrease in the Allowance ratios was primarily the result of improvements in certain economic indicators as well as decreases in average historic charge-off rates over the lookback period, both of which factor into the calculation of the overall Allowance requirement.
  • Available for sale investment securities as of June 30, 2017 were $443.7 million, a decrease of $123.3 million from December 31, 2016. Excluding the maturing, in January 2017, of $200 million of short-term U.S. Treasury bills, the available for sale investment portfolio has increased by $76.7 million since December 31, 2016, primarily in the U.S. government and agencies and the mortgage-backed securities segments of the portfolio. As previously mentioned the Corporation has begun positioning the investment portfolio in anticipation of the Royal Bank merger.
  • Total assets as of June 30, 2017 were $3.44 billion, an increase of $16.7 million from December 31, 2016. Increases in portfolio loans and leases were largely offset by a decrease in available for sale investment securities discussed in the previous bullet point.
  • Wealth assets under management, administration, supervision and brokerage totaled $12.05 billion as of June 30, 2017, an increase of $722.1 million from December 31, 2016. The increase in wealth assets was comprised of a $291.5 million increase in account balances whose fees are based on market value, and a $430.6 million increase in fixed rate flat-fee account types.
  • Deposits of $2.68 billion as of June 30, 2017 increased $102.1 million from December 31, 2016. Over 80% of this increase was in noninterest-bearing deposits, which grew by $82.3 million. The increase in noninterest-bearing deposits was primarily in small business accounts.
  • Borrowings of $295.0 million as of June 30, 2017 decreased $98.9 million from December 31, 2016. The decrease was comprised of a $73.9 million decrease in short-term borrowings and a $25.1 million decrease in long-term FHLB advances. In January 2017, $200 million of short-term borrowings associated with the maturing of $200 million of short-term U.S. Treasury bills were repaid. The net increase in short-term borrowings of $126.1 million were utilized to support the available for sale investment purchases and to replace $25.1 million of long-term FHLB advances which matured during the first half of 2017.

  • The capital ratios for the Bank and the Corporation, as of June 30, 2017, as shown in the attached tables, indicate levels well above the regulatory minimum to be considered “well capitalized.” At both the Bank and Corporation levels, the capital ratios to risk-weighted assets have all decreased from their December 31, 2016 levels largely as a result of the increase in risk-weighted assets, much of which was in the commercial mortgage, construction, and commercial and industrial segments of the loan portfolio, which are typically risk-weighted at 100%.

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

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

Bryn Mawr Bank Corporation
Summary Financial Information (unaudited)
(dollars in thousands, except per share data)
As of or For the Three Months Ended For the Six Months Ended
June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016 June 30, 2017 June 30, 2016
Consolidated Balance Sheet (selected items)
Interest-bearing deposits with banks$30,806 $69,978 $34,206 $30,118 $20,481
Investment securities (AFS, HTM and Trading) 452,869 400,360 573,763 373,508 371,906
Loans held for sale 8,590 3,015 9,621 11,506 11,882
Portfolio loans and leases 2,666,651 2,555,589 2,535,425 2,493,357 2,423,821
Allowance for loan and lease losses ("ALLL") (16,399) (17,107) (17,486) (17,744) (17,036)
Goodwill and other intangible assets 129,211 124,629 125,170 126,000 126,888
Total assets 3,438,219 3,292,617 3,421,530 3,174,080 3,090,090
Deposits - interest-bearing 1,863,288 1,865,009 1,843,495 1,759,862 1,720,477
Deposits - non-interest-bearing 818,475 771,556 736,180 718,015 689,214
Short-term borrowings 130,295 23,613 204,151 50,065 19,119
Long-term FHLB advances and other borrowings 164,681 174,711 189,742 204,772 224,802
Subordinated notes 29,559 29,546 29,532 29,518 29,505
Total liabilities 3,043,242 2,904,522 3,040,403 2,795,621 2,717,623
Shareholders' equity 394,977 388,095 381,127 378,459 372,467
Average Balance Sheet (selected items)
Interest-bearing deposits with banks$26,266 $39,669 $55,298 $33,532 $44,950 $32,931 $42,000
Investment securities (AFS, HTM and Trading) 429,400 393,306 386,658 373,616 371,153 411,453 366,055
Loans held for sale 3,855 4,238 11,591 12,887 7,844 4,045 6,662
Portfolio loans and leases 2,611,755 2,551,439 2,506,376 2,464,085 2,404,799 2,581,764 2,353,951
Total interest-earning assets 3,071,276 2,988,652 2,959,923 2,884,120 2,828,746 3,030,193 2,768,668
Goodwill and intangible assets 126,537 124,884 125,614 126,505 127,402 125,715 127,849
Total assets 3,333,307 3,244,060 3,215,868 3,142,019 3,089,953 3,288,928 3,031,550
Deposits - interest-bearing 1,853,660 1,852,194 1,809,276 1,729,689 1,717,252 1,852,931 1,675,451
Short-term borrowings 98,869 47,603 40,629 40,966 32,328 73,378 33,243
Long-term FHLB advances and other borrowings 171,567 182,507 198,454 218,920 236,248 177,006 243,131
Subordinated notes 29,550 29,537 29,523 29,509 29,496 29,544 29,489
Total interest-bearing liabilities 2,153,646 2,111,841 2,077,882 2,019,084 2,015,324 2,132,859 1,981,314
Total liabilities 2,943,591 2,861,846 2,837,825 2,769,065 2,723,838 2,902,942 2,668,056
Shareholders' equity 389,716 382,214 378,043 372,954 366,115 385,986 363,494
Income Statement
Net interest income$27,965 $27,403 $26,990 $26,717 $26,627 $55,368 $52,529
Provision for loan and lease losses (83) 291 1,059 1,412 445 208 1,855
Noninterest income 14,785 13,227 13,248 13,786 13,781 28,012 27,028
Noninterest expense 28,495 26,660 25,087 25,371 26,220 55,155 51,310
Income tax expense (benefit) 4,905 4,635 4,684 4,346 4,810 9,540 9,137
Net income 9,433 9,044 9,408 9,374 8,933 18,477 17,255
Basic earnings per share 0.56 0.53 0.56 0.56 0.53 1.09 1.02
Diluted earnings per share 0.55 0.53 0.55 0.55 0.52 1.07 1.01
Net income (core) (1) 10,236 9,375 9,402 9,392 8,961 19,612 17,232
Basic earnings per share (core) (1) 0.60 0.55 0.56 0.56 0.53 1.16 1.02
Diluted earnings per share (core) (1) 0.59 0.55 0.55 0.55 0.53 1.14 1.02
Cash dividends paid per share 0.21 0.21 0.21 0.21 0.20 0.42 0.40
Profitability Indicators
Return on average assets 1.14% 1.13% 1.16% 1.19% 1.16% 1.13% 1.14%
Return on average equity 9.71% 9.60% 9.90% 10.00% 9.81% 9.65% 9.55%
Return on tangible equity(1) 15.06% 14.96% 15.68% 16.06% 16.02% 15.01% 15.71%
Tax-equivalent net interest margin 3.68% 3.74% 3.65% 3.71% 3.81% 3.71% 3.84%
Efficiency ratio(1) 62.16% 62.66% 62.66% 60.30% 60.41% 62.40% 62.21%
Mortgage Banking Information
Mortgage loans originated$46,848 $48,550 $78,749 $84,885 $64,893 $95,398 $117,425
Residential mortgage loans sold - servicing retained 20,312 27,690 44,763 40,462 26,944 48,002 52,909
Residential mortgage loans sold - servicing released 3,819 4,981 4,632 10,522 5,278 8,800 7,676
Total residential mortgage loans sold$24,131 $32,671 $49,395 $50,984 $32,222 $56,802 $60,585
Residential mortgage loans serviced for others$641,165 $638,553 $631,889 $618,134 $610,418
Share Data
Closing share price$42.50 $39.50 $42.15 $31.99 $29.20
Book value per common share$23.25 $22.87 $22.50 $22.40 $22.14
Tangible book value per common share$15.64 $15.53 $15.11 $14.94 $14.60
Price / book value 182.81% 172.71% 187.34% 142.80% 131.90%
Price / tangible book value 271.69% 254.41% 278.96% 214.07% 200.05%
Weighted average diluted shares outstanding 17,232,767 17,182,689 17,164,675 17,072,358 17,027,419 17,207,812 16,954,116
Shares outstanding, end of period 16,989,849 16,969,451 16,939,715 16,893,878 16,824,564
Wealth Management Information:
Wealth assets under mgmt, administration, supervision and brokerage (2)$12,050,555 $11,725,460 $11,328,457 $9,969,745 $9,632,521
Fees for wealth management services$9,807 $9,303 $9,327 $9,100 $9,431
Capital Ratios
Bryn Mawr Trust Company
Tier I capital to risk weighted assets ("RWA") 10.29% 10.58% 10.50% 10.99% 10.94%
Total (Tier II) capital to RWA 10.90% 11.25% 11.19% 11.70% 11.65%
Tier I leverage ratio 8.76% 8.83% 8.73% 9.17% 9.06%
Tangible equity ratio (1) 8.24% 8.46% 7.85% 8.85% 8.79%
Common equity Tier I capital to RWA 10.29% 10.58% 10.50% 10.99% 10.94%
Bryn Mawr Bank Corporation
Tier I capital to RWA 10.12% 10.50% 10.51% 10.42% 10.45%
Total (Tier II) capital to RWA 11.82% 12.30% 12.35% 12.30% 12.35%
Tier I leverage ratio 8.63% 8.77% 8.73% 8.70% 8.65%
Tangible equity ratio (1) 8.03% 8.32% 7.76% 8.28% 8.29%
Common equity Tier I capital to RWA 10.12% 10.50% 10.51% 10.42% 10.45%
Asset Quality Indicators
Net loan and lease charge-offs ("NCO"s)$625 $670 $1,317 $704 $254 $1,295 $676
Nonperforming loans and leases ("NPL"s)$7,237 $7,329 $8,363 $9,883 $9,617
Other real estate owned ("OREO") 1,122 978 1,017 867 784
Total nonperforming assets ("NPA"s)$ 8,359 $ 8,307 $ 9,380 $ 10,750 $ 10,401
Nonperforming loans and leases 30 or more days past due$4,076 $5,097 $6,072 $6,684 $5,599
Performing loans and leases 30 to 89 days past due 6,258 6,077 3,062 2,537 3,564
Performing loans and leases 90 or more days past due - - - - -
Total delinquent loans and leases$ 10,334 $ 11,174 $ 9,134 $ 9,221 $ 9,163
Delinquent loans and leases to total loans and leases 0.39% 0.44% 0.36% 0.37% 0.38%
Delinquent performing loans and leases to total loans and leases 0.23% 0.24% 0.12% 0.10% 0.15%
NCOs / average loans and leases (annualized) 0.10% 0.11% 0.21% 0.11% 0.04% 0.10% 0.06%
NPLs / total portfolio loans and leases 0.27% 0.29% 0.33% 0.40% 0.40%
NPAs / total loans and leases and OREO 0.31% 0.32% 0.37% 0.43% 0.43%
NPAs / total assets 0.24% 0.25% 0.27% 0.34% 0.34%
ALLL / NPLs 226.60% 233.42% 209.09% 179.54% 177.14%
ALLL / portfolio loans 0.61% 0.67% 0.69% 0.71% 0.70%
ALLL on originated loans and leases / Originated loans and leases (1) 0.68% 0.75% 0.78% 0.81% 0.81%
(Total Allowance + Loan mark) / Total Gross portfolio loans and leases (1) 1.03% 1.12% 1.17% 1.24% 1.30%
Troubled debt restructurings ("TDR"s) included in NPLs$2,470 $2,681 $2,632 $1,680 $1,779
TDRs in compliance with modified terms 6,148 6,492 6,395 6,305 4,984
Total TDRs$ 8,618 $ 9,173 $ 9,027 $ 7,985 $ 6,763
(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)
June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016
Assets
Cash and due from banks$ 19,352 $ 17,457 $ 16,559 $ 18,905 $ 13,710
Interest-bearing deposits with banks 30,806 69,978 34,206 30,118 20,481
Cash and cash equivalents 50,158 87,435 50,765 49,023 34,191
Investment securities, available for sale 443,687 391,028 566,996 366,910 365,470
Investment securities, held to maturity 5,161 5,194 2,879 2,896 2,915
Investment securities, trading 4,021 4,138 3,888 3,702 3,521
Loans held for sale 8,590 3,015 9,621 11,506 11,882
Portfolio loans and leases, originated 2,409,964 2,286,814 2,240,987 2,176,549 2,090,070
Portfolio loans and leases, acquired 256,687 268,775 294,438 316,808 333,751
Total portfolio loans and leases 2,666,651 2,555,589 2,535,425 2,493,357 2,423,821
Less: Allowance for losses on originated loan and leases (16,374) (17,069) (17,458) (17,716) (17,008)
Less: Allowance for losses on acquired loan and leases (25) (38) (28) (28) (28)
Total allowance for loan and lease losses (16,399) (17,107) (17,486) (17,744) (17,036)
Net portfolio loans and leases 2,650,252 2,538,482 2,517,939 2,475,613 2,406,785
Premises and equipment 44,446 40,515 41,778 42,559 43,607
Accrued interest receivable 8,717 8,392 8,533 8,066 8,144
Mortgage servicing rights 5,683 5,686 5,582 4,793 4,646
Bank owned life insurance 39,680 39,479 39,279 39,055 38,836
Federal Home Loan Bank ("FHLB") stock 15,168 8,505 17,305 13,185 10,618
Goodwill 107,127 104,765 104,765 104,765 104,765
Intangible assets 22,084 19,864 20,405 21,235 22,123
Other investments 8,682 8,716 8,627 9,121 8,722
Other assets 24,763 27,403 23,168 21,651 23,865
Total assets$ 3,438,219 $ 3,292,617 $ 3,421,530 $ 3,174,080 $ 3,090,090
Liabilities
Deposits
Noninterest-bearing$ 818,475 $ 771,556 $ 736,180 $ 718,015 $ 689,214
Interest-bearing 1,863,288 1,865,009 1,843,495 1,759,862 1,720,477
Total deposits 2,681,763 2,636,565 2,579,675 2,477,877 2,409,691
Short-term borrowings 130,295 23,613 204,151 50,065 19,119
Long-term FHLB advances 164,681 174,711 189,742 204,772 224,802
Subordinated notes 29,559 29,546 29,532 29,518 29,505
Accrued interest payable 2,830 2,722 2,734 1,854 1,846
Other liabilities 34,114 37,365 34,569 31,535 32,660
Total liabilities 3,043,242 2,904,522 3,040,403 2,795,621 2,717,623
Shareholders' equity
Common stock 21,162 21,141 21,111 21,064 20,972
Paid-in capital in excess of par value 234,654 233,910 232,806 231,398 230,298
Less: common stock held in treasury, at cost (67,091) (66,969) (66,950) (66,895) (66,200)
Accumulated other comprehensive income (loss), net of tax (1,564) (1,990) (2,409) 2,128 2,488
Retained earnings 207,816 202,003 196,569 190,764 184,909
Total shareholders equity 394,977 388,095 381,127 378,459 372,467
Total liabilities and shareholders' equity$ 3,438,219 $ 3,292,617 $ 3,421,530 $ 3,174,080 $ 3,090,090

Bryn Mawr Bank Corporation
Supplemental Balance Sheet Information (unaudited)
(dollars in thousands)
Portfolio Loans and Leases as of
June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016
Commercial mortgages$ 1,197,936 $ 1,137,870 $ 1,110,897 $ 1,089,621 $ 1,055,934
Home equity loans and lines 208,480 203,962 208,000 206,578 202,989
Residential mortgages 416,488 418,264 413,540 418,408 414,863
Construction 156,581 145,699 141,964 133,269 133,313
Total real estate loans 1,979,485 1,905,795 1,874,401 1,847,876 1,807,099
Commercial & Industrial 599,203 567,917 579,791 565,497 538,684
Consumer 28,485 23,932 25,341 23,717 21,561
Leases 59,478 57,945 55,892 56,267 56,477
Total non-real estate loans and leases 687,166 649,794 661,024 645,481 616,722
Total portfolio loans and leases$ 2,666,651 $ 2,555,589 $ 2,535,425 $ 2,493,357 $ 2,423,821
Nonperforming Loans and Leases as of
June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016
Commercial mortgages$ 819 $ 315 $ 320 $ 139 $ 139
Home equity loans and lines 1,535 1,828 2,289 2,827 3,011
Residential mortgages 2,589 2,640 2,658 2,845 2,909
Construction - - - - -
Total nonperforming real estate loans 4,943 4,783 5,267 5,811 6,059
Commercial & Industrial 2,112 2,471 2,957 3,960 3,457
Consumer 10 - 2 2 4
Leases 173 75 137 110 97
Total nonperforming non-real estate loans and leases 2,295 2,546 3,096 4,072 3,558
Total nonperforming portfolio loans and leases$ 7,238 $ 7,329 $ 8,363 $ 9,883 $ 9,617
Net Loan and Lease Charge-Offs (Recoveries) for the Three Months Ended
June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016
Commercial mortgage$ (3) $ (3) $ (51) $ (4) $ (3)
Home equity loans and lines 169 438 69 375 11
Residential 43 27 28 2 262
Construction (1) (1) (1) - (62)
Total net charge-offs (recoveries) of real estate loans 208 461 45 373 208
Commercial & Industrial 185 59 1,128 95 (44)
Consumer 16 39 42 58 30
Leases 216 111 102 178 60
Total net charge-offs of non-real estate loans and leases 417 209 1,272 331 46
Total net charge-offs$ 625 $ 670 $ 1,317 $ 704 $ 254

Bryn Mawr Bank Corporation
Supplemental Balance Sheet Information (unaudited)
(dollars in thousands)
Investment Securities Available for Sale, at Fair Value
June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016
U.S. Treasury securities$ 100 $ 100 $ 200,097 $ 101 $ 102
Obligations of the U.S. Government and agencies 126,468 100,476 82,198 76,598 86,134
State & political subdivisions - tax-free 26,958 30,416 33,005 36,735 39,047
State & political subdivisions - taxable 524 524 525 529 532
Mortgage-backed securities 230,617 197,420 185,951 184,919 186,354
Collateralized mortgage obligations 42,549 45,476 48,694 51,344 36,702
Other debt securities 1,099 1,299 1,299 1,450 1,450
Bond mutual funds 11,956 11,920 11,895 11,847 11,774
Other investments 3,416 3,397 3,332 3,387 3,375
Total$ 443,687 $ 391,028 $ 566,996 $ 366,910 $ 365,470
Unrealized Gain (Loss) on Investment Securities Available for Sale
June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016
U.S. Treasury securities$ - $ - $ 3 $ - $ 1
Obligations of the U.S. Government and agencies (699) (803) (913) 946 1,183
State & political subdivisions - tax-free 11 (10) (96) 131 240
State & political subdivisions - taxable 1 1 2 5 8
Mortgage-backed securities 480 196 (47) 3,801 3,958
Collateralized mortgage obligations (662) (777) (794) 253 496
Other debt securities (1) (1) (1) - -
Bond mutual funds - (36) (61) (109) (182)
Other investments 203 132 13 34 (66)
Total$ (667) $ (1,298) $ (1,894) $ 5,061 $ 5,638
Deposits
June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016
Interest-bearing deposits:
Interest-bearing checking$ 381,345 $ 395,131 $ 379,424 $ 333,055 $ 333,425
Money market 729,859 757,071 761,657 725,116 718,144
Savings 254,903 255,791 232,193 228,391 217,877
Wholesale non-maturity deposits 54,675 69,471 74,272 64,664 58,690
Wholesale time deposits 120,524 68,164 73,037 99,052 113,274
Retail time deposits 321,982 319,381 322,912 309,584 279,067
Total interest-bearing deposits 1,863,288 1,865,009 1,843,495 1,759,862 1,720,477
Noninterest-bearing deposits 818,475 771,556 736,180 718,015 689,214
Total deposits$ 2,681,763 $ 2,636,565 $ 2,579,675 $ 2,477,877 $ 2,409,691

Bryn Mawr Bank Corporation
Detailed Income Statements (unaudited)
(dollars in thousands, except per share data)
For the Three Months Ended For the Six Months Ended
June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016 June 30, 2017 June 30, 2016
Interest income:
Interest and fees on loans and leases$ 29,143 $ 28,482 $ 28,230 $ 27,931 $ 27,679 $ 57,625 $ 54,375
Interest on cash and cash equivalents 35 66 53 27 42 101 88
Interest on investment securities 2,059 1,778 1,639 1,556 1,565 3,837 3,092
Total interest income 31,237 30,326 29,922 29,514 29,286 61,563 57,555
Interest expense:
Interest on deposits 1,983 1,828 1,780 1,575 1,402 3,811 2,478
Interest on short-term borrowings 237 27 22 34 20 264 37
Interest on FHLB advances and other borrowings 682 698 760 818 867 1,380 1,775
Interest on subordinated notes 370 370 370 370 370 740 736
Total interest expense 3,272 2,923 2,932 2,797 2,659 6,195 5,026
Net interest income 27,965 27,403 26,990 26,717 26,627 55,368 52,529
Provision for loan and lease losses (the "Provision") (83) 291 1,059 1,412 445 208 1,855
Net interest income after Provision 28,048 27,112 25,931 25,305 26,182 55,160 50,674
Noninterest income:
Fees for wealth management services 9,807 9,303 9,327 9,100 9,431 19,110 18,263
Insurance revenue 943 763 715 886 845 1,706 2,121
Capital markets revenue 953 - - - - 953 -
Service charges on deposits 630 647 688 688 713 1,277 1,415
Loan servicing and other fees 519 503 411 497 539 1,022 1,031
Net gain on sale of loans 520 629 607 879 857 1,149 1,656
Net gain (loss) on sale of investment securities available for sale - 1 9 (28) (43) 1 (58)
Net (loss) gain on sale of other real estate owned (12) - - - - (12) (76)
Dividends on FHLB and FRB stocks 218 214 309 277 263 432 477
Other operating income 1,207 1,167 1,182 1,487 1,176 2,374 2,199
Total noninterest income 14,785 13,227 13,248 13,786 13,781 28,012 27,028
Noninterest expense:
Salaries and wages 13,580 12,450 11,855 11,621 12,197 26,030 23,935
Employee benefits 2,475 2,559 2,207 2,420 2,436 5,034 4,921
Loss on pension termination - - - - - -
Occupancy and bank premises 2,247 2,526 2,407 2,349 2,367 4,773 4,855
Branch lease termination expense - - - - - -
Furniture, fixtures and equipment 1,869 1,974 1,869 1,837 1,895 3,843 3,814
Advertising 405 386 391 334 372 791 656
Amortization of intangible assets 688 693 830 888 889 1,381 1,780
Impairment of intangible assets - - - - - -
Impairment (recovery) of mortgage servicing rights ("MSRs") 43 3 (580) 29 599 46 682
Due diligence, merger-related and merger integration expenses 1,236 511 - - - 1,747 -
Professional fees 1,049 711 963 937 946 1,760 1,759
Pennsylvania bank shares tax 297 664 (204) 675 640 961 1,278
Information technology 820 874 857 881 875 1,694 1,923
Other operating expenses 3,786 3,309 4,492 3,400 3,004 7,095 5,707
Total noninterest expense 28,495 26,660 25,087 25,371 26,220 55,155 51,310
Income before income taxes 14,338 13,679 14,092 13,720 13,743 28,017 26,392
Income tax expense 4,905 4,635 4,684 4,346 4,810 9,540 9,137
Net income$ 9,433 $ 9,044 $ 9,408 $ 9,374 $ 8,933 $ 18,477 $ 17,255
Per share data:
Weighted average shares outstanding 16,984,563 16,954,132 16,916,705 16,860,727 16,812,219 16,969,431 16,830,211
Dilutive common shares 248,204 228,557 247,970 211,631 215,200 238,381 123,905
Adjusted weighted average diluted shares 17,232,767 17,182,689 17,164,675 17,072,358 17,027,419 17,207,812 16,954,116
Basic earnings (loss) per common share$ 0.56 $ 0.53 $ 0.56 $ 0.56 $ 0.53 $ 1.09 $ 1.03
Diluted earnings (loss) per common share$ 0.55 $ 0.53 $ 0.55 $ 0.55 $ 0.52 $ 1.07 $ 1.02
Dividend declared per share$ 0.21 $ 0.21 $ 0.21 $ 0.21 $ 0.20 $ 0.42 $ 0.40
Effective tax rate 34.21% 33.88% 33.24% 31.68% 35.09% 34.05% 34.62%

Bryn Mawr Bank Corporation
Tax-Equivalent Net Interest Margin (unaudited)
(dollars in thousands, except per share data)
For The Three Months Ended For The Six Months Ended
June 30, 2017March 31, 2017December 31, 2016September 30, 2016June 30, 2016 June 30, 2017June 30, 2016
(dollars in thousands) Average
Balance
Interest
Income/
Expense
Average
Rates
Earned/
Paid
Average
Balance
Interest
Income/
Expense
Average
Rates
Earned/
Paid
Average
Balance
Interest
Income/
Expense
Average
Rates
Earned/
Paid
Average
Balance
Interest
Income/
Expense
Average
Rates
Earned/
Paid
Average
Balance
Interest
Income/
Expense
Average
Rates
Earned/
Paid
Average
Balance
Interest
Income/
Expense
Average
Rates
Earned/
Paid
Average
Balance
Interest
Income/
Expense
Average
Rates
Earned/
Paid
Assets:
Interest-bearing deposits with other banks $ 26,266 $ 35 0.53%$ 39,669 $ 66 0.67%$ 55,298 $ 53 0.38%$ 33,532 $ 27 0.32%$ 44,950 $ 42 0.38% $ 32,931 $ 101 0.62%$ 42,000 $ 88 0.42%
Investment securities - available for sale:
Taxable 391,112 1,940 1.99% 354,229 1,653 1.89% 344,931 1,498 1.73% 329,293 1,423 1.72% 325,893 1,433 1.77% 372,772 3,620 1.96% 321,123 2,832 1.77%
Tax-exempt 28,970 150 2.08% 31,485 164 2.11% 34,985 175 1.99% 37,893 189 1.98% 39,193 187 1.92% 30,221 314 2.10% 39,925 378 1.90%
Total investment securities - available for sale 420,082 2,090 2.00% 385,714 1,817 1.91% 379,916 1,673 1.75% 367,186 1,612 1.75% 365,086 1,620 1.78% 402,993 3,934 1.97% 361,048 3,210 1.79%
Investment securities - held to maturity 5,181 5 0.39% 3,702 7 0.77% 2,889 7 0.96% 2,907 6 0.82% 2,427 4 0.66% 4,446 4 0.18% 1,214 4 0.66%
Investment securities - trading 4,137 13 1.26% 3,890 8 0.83% 3,853 16 1.65% 3,523 2 0.23% 3,640 2 0.22% 4,014 2 0.10% 3,793 2 0.11%
Loans and leases * 2,615,610 29,309 4.49% 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% 2,585,809 57,931 4.52% 2,360,613 54,539 4.65%
Total interest-earning assets 3,071,276 31,452 4.11% 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% 3,030,193 61,972 4.12% 2,768,668 57,843 4.20%
Cash and due from banks 15,727 14,942 16,127 16,228 16,413 15,336 16,457
Less: allowance for loan and lease losses (17,549) (17,580) (17,858) (17,257) (17,271) (17,564) (16,755)
Other assets 263,853 258,046 257,676 258,928 262,065 260,963 263,180
Total assets $ 3,333,307 $ 3,244,060 $ 3,215,868 $ 3,142,019 $ 3,089,953 $ 3,288,928 $ 3,031,550
Liabilities:
Interest-bearing deposits:
Savings, NOW and market rate deposits $ 1,375,949 $ 813 0.24%$ 1,388,561 $ 756 0.22%$ 1,328,577 $ 686 0.21%$ 1,286,404 $ 641 0.20%$ 1,273,964 $ 589 0.19% $ 1,382,220 $ 1,569 0.23%$ 1,276,797 $ 1,158 0.18%
Wholesale deposits 154,424 378 0.98% 143,461 317 0.90% 156,541 319 0.81% 164,706 327 0.79% 196,517 361 0.74% 148,973 695 0.94% 166,859 594 0.72%
Retail time deposits 323,287 792 0.98% 320,172 755 0.96% 324,158 775 0.95% 278,579 607 0.87% 246,771 452 0.74% 321,738 1,547 0.97% 231,795 726 0.63%
Total interest-bearing deposits 1,853,660 1,983 0.43% 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% 1,852,931 3,811 0.41% 1,675,451 2,478 0.30%
Borrowings:
Short-term borrowings 98,869 237 0.96% 47,603 27 0.23% 40,629 22 0.22% 40,966 34 0.33% 32,328 20 0.25% 73,378 264 0.73% 33,243 37 0.22%
Long-term FHLB advances 171,567 682 1.59% 182,507 698 1.55% 198,454 760 1.52% 218,920 818 1.49% 236,248 867 1.48% 177,006 1,380 1.57% 243,131 1,775 1.47%
Subordinated notes 29,550 370 5.02% 29,537 370 5.08% 29,523 370 4.99% 29,509 370 4.99% 29,496 370 5.05% 29,544 740 5.05% 29,489 736 5.02%
Total borrowings 299,986 1,289 1.72% 259,647 1,095 1.71% 268,606 1,152 1.71% 289,395 1,222 1.68% 298,072 1,257 1.70% 279,928 2,384 1.72% 305,863 2,548 1.68%
Total interest-bearing liabilities 2,153,646 3,272 0.61% 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% 2,132,859 6,195 0.59% 1,981,314 5,026 0.51%
Noninterest-bearing deposits 755,597 711,794 724,465 716,581 675,710 733,817 653,379
Other liabilities 34,348 38,211 35,478 33,400 32,804 36,266 33,363
Total noninterest-bearing liabilities 789,945 750,005 759,943 749,981 708,514 770,083 686,742
Total liabilities 2,943,591 2,861,846 2,837,825 2,769,065 2,723,838 2,902,942 2,668,056
Shareholders' equity 389,716 382,214 378,043 372,954 366,115 385,986 363,494
Total liabilities and shareholders' equity $ 3,333,307 $ 3,244,060 $ 3,215,868 $ 3,142,019 $ 3,089,953 $ 3,288,928 $ 3,031,550
Interest income to earning assets 4.11% 4.14% 4.05% 4.09% 4.18% 4.12% 4.20%
Net interest spread 3.50% 3.58% 3.49% 3.54% 3.65% 3.53% 3.69%
Effect of noninterest-bearing sources 0.18% 0.16% 0.16% 0.17% 0.16% 0.18% 0.15%
Tax-equivalent net interest margin $ 28,180 3.68% $ 27,597 3.74% $ 27,171 3.65% $ 26,882 3.71% $ 26,770 3.81% $ 55,777 3.71% $ 52,817 3.84%
Tax-equivalent adjustment $ 215 0.02% $ 194 0.02% $ 181 0.02% $ 165 0.02% $ 143 0.02% $ 409 0.02% $ 288 0.02%
Supplemental Information Regarding Accretion of Fair Value Marks
Interest
Income
(Expense)
Effect
Effect
on Yield or
Rate
Interest
Income
(Expense)
Effect
Effect
on Yield or
Rate
Interest
Income
(Expense)
Effect
Effect on
Yield or
Rate
Interest
Income
(Expense)
Effect
Effect on
Yield or
Rate
Interest
Income
(Expense)
Effect
Effect
on
Yield or
Rate
Interest
Income
(Expense)
Effect
Effect on
Yield or
Rate
Interest
Income
(Expense)
Effect
Effect on
Yield or
Rate
Loans and leases $ 402 0.06% $ 726 0.12% $ 742 0.12% $ 578 0.09% $ 1,076 0.18% $ 1,128 0.09% $ 2,029 0.17%
Retail time deposits (18)-0.02% (19)-0.02% (19)-0.02% (29)-0.04% (61)-0.10% (37)-0.02% (171)-0.15%
Short-term borrowings - 0.00% - 0.00% - 0.00% - 0.00% - 0.00% - 0.00% (12)-0.07%
Long-term FHLB advances and other borrowings (30)-0.07% (30)-0.07% (30)-0.06% (30)-0.05% (30)-0.05% (60)-0.07%�� (60)-0.05%
Net interest income from fair value marks $ 450 $ 775 $ 791 $ 637 $ 1,167 $ 1,225 $ 2,272
Purchase accounting effect on tax-equivalent margin 0.06% 0.11% 0.11% 0.09% 0.17% 0.08% 0.17%
* Average loans and leases include portfolio loans and leases, and loans held for sale. Non-accrual loans are also included in the average loan and leases balances.

Bryn Mawr Bank Corporation
Appendix - Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Performance Measures (unaudited)
(dollars in thousands, except per share data)
Statement on Non-GAAP Measures: The Corporation believes the presentation of the following non-GAAP financial measures provides useful supplemental information that is essential to an investor’s proper understanding of the results of operations and financial condition of the Corporation. Management uses non-GAAP financial measures in its analysis of the Corporation’s performance. These non-GAAP measures should not be viewed as substitutes for the financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
As of or For the Three Months Ended As of or For the Six Months Ended
June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016 June 30, 2017 June 30, 2016
Reconciliation of Net Income to Net Income (core):
Net income (loss) (a GAAP measure)$ 9,433 $ 9,044 $ 9,408 $ 9,374 $ 8,933 $ 18,477 #$ 17,255
Less: Tax-effected non-core noninterest income:
Loss (gain) on sale of investment securities available for sale - (1) (6) 18 28 (1) 38
Add: Tax-effected non-core noninterest expense items:
Loss on pension termination - - - - - - -
Severance expense (Salaries and wages) - - - - - - -
Branch lease termination expense - - - - - - -
Debt and swap prepayment penalty (Other operating expenses) - - - - - - -
Impairment of intangible assets - - - - - - -
Due diligence, merger-related and merger integration expenses 803 332 - - - 1,136 -
Net income (core) (a non-GAAP measure)$ 10,236 $ 9,375 $ 9,402 $ 9,392 $ 8,961 $ 19,612 $ 17,293
Calculation of Basic and Diluted Earnings per Common Share (core):
Weighted average common shares outstanding 16,984,563 16,954,132 16,916,705 16,860,727 16,812,219 16,969,431 16,830,211
Dilutive common shares 248,204 228,557 247,970 211,631 215,200 238,381 123,905
Adjusted weighted average diluted shares 17,232,767 17,182,689 17,164,675 17,072,358 17,027,419 17,207,812 16,954,116
Basic earnings per common share (core) (a non-GAAP measure)$ 0.60 $ 0.55 $ 0.56 $ 0.56 $ 0.53 $ 1.16 $ 1.03
Diluted earnings per common share (core) (a non-GAAP measure)$ 0.59 $ 0.55 $ 0.55 $ 0.55 $ 0.53 $ 1.14 $ 1.02
Calculation of Return on Average Tangible Equity:
Net income (loss)$ 9,433 $ 9,044 $ 9,408 $ 9,374 $ 8,933 $ 18,477 $ 17,255
Add: Tax-effected amortization and impairment of intangible assets 447 450 540 577 578 898 1,157
Net tangible income (numerator)$ 9,880 $ 9,494 $ 9,948 $ 9,951 $ 9,511 $ 19,375 $ 18,412
Average shareholders' equity$ 389,716 $ 382,214 $ 378,043 $ 372,954 $ 366,115 $ 385,986 $ 363,494
Less: Average goodwill and intangible assets (126,537) (124,884) (125,614) (126,505) (127,402) (125,715) (127,849)
Net average tangible equity (denominator)$ 263,179 $ 257,330 $ 252,429 $ 246,449 $ 238,713 $ 260,271 $ 235,645
Return on tangible equity (a non-GAAP measure) 15.06% 14.96% 15.68% 16.06% 16.02% 15.01% 15.71%
Calculation of Tangible Equity Ratio:
Total shareholders' equity$ 394,977 $ 388,095 $ 381,127 $ 378,459 $ 372,467
Less: Goodwill and intangible assets (129,211) (124,629) (125,170) (126,000) (126,888)
Net tangible equity (numerator)$ 265,766 $ 263,466 $ 255,957 $ 252,459 $ 245,579
Total assets$ 3,438,219 $ 3,292,617 $ 3,421,530 $ 3,174,080 $ 3,090,090
Less: Goodwill and intangible assets (129,211) (124,629) (125,170) (126,000) (126,888)
Tangible assets (denominator)$ 3,309,008 $ 3,167,988 $ 3,296,360 $ 3,048,080 $ 2,963,202
Tangible equity ratio 8.03% 8.32% 7.76% 8.28% 8.29%
Calculation of Efficiency Ratio:
Noninterest expense$ 28,495 $ 26,660 $ 25,087 $ 25,371 $ 26,220 $ 55,155 $ 51,310
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 (688) (693) (830) (888) (889) (1,381) (1,780)
Impairment of intangible assets - - - - - - -
Due diligence, merger-related and merger integration expenses (1,235) (511) - - - (1,747) -
Noninterest expense (adjusted) (numerator)$ 26,572 $ 25,456 $ 24,257 $ 24,483 $ 25,331 $ 52,027 $ 49,530
Noninterest income$ 14,785 $ 13,227 $ 13,248 $ 13,786 $ 13,781 $ 28,012 $ 27,028
Less: non-core noninterest income items:
Loss (gain) on sale of investment securities available for sale - (2) (9) 28 43 (1) 58
Noninterest income (core)$ 14,785 $ 13,225 $ 13,239 $ 13,814 $ 13,824 $ 28,011 $ 27,086
Net interest income 27,965 27,403 26,990 26,717 26,627 55,368 52,529
Noninterest income (core) and net interest income (denominator)$ 42,750 $ 40,628 $ 40,229 $ 40,531 $ 40,451 $ 83,379 $ 79,615
Efficiency ratio 62.16% 62.66% 60.30% 60.41% 62.62% 62.40% 62.21%
* 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$ 16,399 $ 17,107 $ 17,486 $ 17,744 $ 17,036
less: Allowance on acquired loans 25 38 28 28 28
Allowance on originated loans and leases$ 16,374 $ 17,069 $ 17,458 $ 17,716 $ 17,008
Total Allowance$ 16,399 $ 17,107 $ 17,486 $ 17,744 $ 17,036
Loan mark on acquired loans 11,084 11,544 12,286 13,391 14,566
Total Allowance + Loan mark$ 27,483 $ 28,651 $ 29,772 $ 31,135 $ 31,602
Total Portfolio loans and leases$ 2,666,651 $ 2,555,589 $ 2,535,425 $ 2,493,357 $ 2,423,821
less: Originated loans and leases 2,409,964 2,286,814 2,240,987 2,176,549 2,090,070
Net acquired loans$ 256,687 $ 268,775 $ 294,438 $ 316,808 $ 333,751
add: Loan mark on acquired loans 11,084 11,544 12,286 13,391 14,566
Gross acquired loans (excludes loan mark)$ 267,771 $ 280,319 $ 306,724 $ 330,199 $ 348,317
Originated loans and leases 2,409,964 2,286,814 2,240,987 2,176,549 2,090,070
Total Gross portfolio loans and leases$ 2,677,735 $ 2,567,133 $ 2,547,711 $ 2,506,748 $ 2,438,387


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

Source: BMT