×

Bryn Mawr Bank Corporation Reports Record Quarterly Net Income of $10.7 Million, Driven by Strong Net Interest Income, Noninterest Income and Expense Control, Declares Dividend of $0.22

BRYN MAWR, Pa., Oct. 19, 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 $10.7 million and diluted earnings per share of $0.62 for the three months ended September 30, 2017, as compared to net income of $9.4 million, or $0.55 diluted earnings per share, for the three months ended June 30, 2017, and $9.4 million, or $0.55 diluted earnings per share, for the three months ended September 30, 2016. Included in net income for the three months ended September 30, 2017 and June 30, 2017 were pre-tax due diligence and merger-related expenses of $850 thousand and $1.2 million, respectively, 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 $11.2 million, or $0.65 diluted earnings per share, for the three months ended September 30, 2017 as compared to $10.2 million, or $0.59 diluted earnings per share, for the three months ended June 30, 2017 and $9.4 million, or $0.55 diluted earnings per share, for the three months ended September 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.

“The Corporation continued to produce solid results in the quarter, benefiting from our focus on new business development and the strategic investments we have made over the last few years in both revenue generation as well as enabling technologies,” commented Frank Leto, President and Chief Executive Officer, adding, “As a result, we saw growth in both net interest income as well as fee income during the quarter with very little increase in expenses, net of merger costs, driving our return on average equity over one percent higher in the quarter, when compared to last quarter.”

Mr. Leto continued, “The preparations for the merger with Royal Bank continue as we await final regulatory approval. Staff and management have been working diligently to ensure a smooth transition and we expect the transaction to close during the fourth quarter of 2017”. In addition to regulatory approval, the merger with Royal Bank is subject to certain closing conditions.

On October 19, 2017, the Board of Directors of the Corporation declared a quarterly dividend of $0.22 per share, payable December 1, 2017 to shareholders of record as of November 1, 2017.

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

  • Net income for the three months ended September 30, 2017 was $10.7 million, or $0.62 diluted earnings per share, as compared to $9.4 million, or $0.55 diluted earnings per share for the three months ended June 30, 2017. Contributing to the increase was a $1.5 million increase in net interest income, a $430 thousand increase in insurance revenues and a $279 thousand increase in gain on sale of loans. In addition to these improving revenue items, linked-quarter decreases of $386 thousand and $310 thousand in due diligence and merger-related expenses and professional fees, respectively, contributed to the improvement in net income. The decrease in the effective tax rate from 34.2% for the second quarter of 2017 to 30.7% for the third quarter of 2017 was the result of a $581 thousand increase in excess tax benefit primarily related to the vesting of restricted stock awards during the third quarter of 2017. Partially offsetting these positive changes to net income was a $1.4 million increase in the provision for loan and lease losses (the “Provision”) from the second quarter to the third quarter of 2017.
  • Tax-equivalent net interest income for the three months ended September 30, 2017 was $29.6 million, an increase of $1.5 million, or 5.2%, from $28.1 million for the three months ended June 30, 2017. The accretion of purchase accounting adjustments increased the tax-equivalent net interest income recorded for the third quarter of 2017 by $753 thousand, as compared to an increase of $450 thousand for the three months ended June 30, 2017.

    Average loans and leases for the three months ended September 30, 2017 increased by $64.7 million from the three months ended June 30, 2017 and experienced an eleven basis point increase in tax-equivalent yield. The increase in the prime rate, which occurred toward the end of the second quarter, contributed to the increase in tax-equivalent yield on loans, as did the accretion of purchase accounting adjustments, which totaled $708 thousand for the third quarter of 2017 as compared to $402 thousand for the second quarter of 2017. Excluding the effect of the accretion of purchase accounting adjustments on loans and leases, the tax-equivalent yield on loans and leases increased by seven basis points on a linked-quarter basis. The net effect of the yield and volume increases on average loans and leases was a $1.7 million increase in tax-equivalent interest income on loans and leases from the second quarter of 2017 to the third quarter of 2017.

    Average available for sale investment securities increased by $32.3 million for the three months ended September 30, 2017 as compared to the three months ended June 30, 2017, and experienced a one basis point tax-equivalent yield increase. The increase in volume and yield on available for sale investment securities resulted in a $204 thousand increase in tax-equivalent interest income for the third quarter of 2017 as compared to the second quarter of 2017.

    Partially offsetting the increase in average loans and leases and available for sale investment securities was a $17.8 million increase in average interest-bearing deposits accompanied by a four basis point increase in rate paid on deposits resulting in a $215 thousand increase in interest expense on deposits for the third quarter of 2017 as compared to the second quarter of 2017. In addition to the increase in average deposits, average borrowings increased $68.3 million for the three months ended September 30, 2017 as compared to the three months ended June 30, 2017, with the rate paid decreasing by four basis points. The volume increase and rate decrease resulted in a $273 thousand increase in interest expense on borrowings on a linked-quarter basis.
  • The tax-equivalent net interest margin of 3.71% for the third quarter of 2017 increased three basis points from 3.68% for the second quarter of 2017. During the third quarter of 2017, the accretion of purchase accounting adjustments contributed nine basis points to the tax-equivalent net interest margin as compared to a contribution of six basis points for the three months ended June 30, 2017. As a result, excluding the effect of the accretion of purchase accounting adjustments, the tax-equivalent net interest margin remained unchanged on a linked-quarter basis.
  • Noninterest income for the three months ended September 30, 2017 increased by $799 thousand from the second quarter of 2017. Largely contributing to this increase was an increase of $430 thousand in insurance revenues, as the impact of the May 24, 2017 acquisition of Hirshorn Boothby was experienced for a full quarter, and a $279 thousand increase in gain on sale of loans, primarily related to the sale of SBA-guaranteed loans. Partially offsetting these increases were decreases of $156 thousand in fees for wealth management services, as some of the fees for tax-related services during the second quarter of 2017 were not repeated in the third quarter, and a $110 thousand linked-quarter decrease in capital markets revenue.
  • Noninterest expense for the three months ended September 30, 2017 decreased $311 thousand, to $28.2 million, as compared to $28.5 million for the second quarter of 2017. The $310 thousand decrease in professional fees was partially related to second quarter 2017 initial start-up costs associated with BMT Investment Advisers, a subsidiary established to advise the Corporation’s new proprietary mutual fund, the BMT Multi-Cap Fund (MUTF:BMTMX). In addition, due diligence and merger-related expenses decreased by $386 thousand between the periods. These decreases were partially offset by increases of $238 thousand and $211 thousand in occupancy and bank premises expense and other operating expenses, respectively.
  • For the three months ended September 30, 2017, net loan and lease charge-offs totaled $728 thousand, as compared to $625 thousand for the second quarter of 2017. The Provision for the three months ended September 30, 2017 was $1.3 million, a $1.4 million increase from the $83 thousand release from the allowance for loan and lease losses (the “Allowance”) for the second quarter of 2017. The increase in the Provision was driven by loan growth as well as changes to certain qualitative factors used to estimate the incurred loan and lease losses in the loan portfolio as of September 30, 2017.
  • Income tax expense for the third quarter of 2017 decreased by $139 thousand as compared to the second quarter of 2017. The 347 basis point decrease in the effective tax rate from the second quarter of 2017 to the third quarter of 2017 was primarily the result of recognizing excess tax benefits associated with the vesting of restricted stock awards and the exercise of stock options. Excess tax benefits totaled $694 thousand for the third quarter of 2017 as compared to $113 thousand for the second quarter of 2017.

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

  • Net income for the three months ended September 30, 2017 was $10.7 million, or $0.62 diluted earnings per share, as compared to $9.4 million, or diluted earnings per share of $0.55, for the same period in 2016. Contributing to the increase in net income was an increase of $2.7 million in net interest income and a $1.8 million increase in noninterest income, with wealth management, insurance and capital markets performance contributing to the increase. Partially offsetting these increases was a $2.8 million increase in noninterest expense, with increases in salaries and wages and due diligence and merger-related expenses being offset by decreases in Pennsylvania bank shares tax, amortization of intangible assets and professional fees.
  • Tax-equivalent net interest income for the three months ended September 30, 2017 was $29.6 million, an increase of $2.7 million, or 10.3%, from $26.9 million for the same period in 2016. The accretion of purchase accounting adjustments increased the tax-equivalent net interest income recorded for the third quarter of 2017 by $753 thousand, as compared to an increase of $637 thousand for the same period in 2016.

    Average loans and leases for the three months ended September 30, 2017 increased by $203.3 million from the same period in 2016 and experienced a ten basis point increase in tax-equivalent yield. The increase in the prime rate, which occurred toward the end of the second quarter, contributed to the increase in tax-equivalent yield on loans, as did the accretion of purchase accounting adjustments, which totaled $708 thousand for the third quarter of 2017 as compared to $578 thousand for the same period in 2017. Excluding the effect of the accretion of purchase accounting adjustments on loans and leases, the tax-equivalent yield on loans and leases increased by nine basis points. The net effect of the yield and volume increases on average loans and leases was a $3.0 million increase in tax-equivalent interest income on loans.

    Average available for sale investment securities increased by $85.2 million for the three months ended September 30, 2017 as compared to the same period in 2016, and experienced a 26 basis point tax-equivalent yield increase. The increase in volume and yield on available for sale investment securities resulted in a $682 thousand increase in tax-equivalent interest income for the third quarter of 2017 as compared to the same period in 2016.

    Partially offsetting the increase in average loans and leases and available for sale investment securities was a $141.8 million increase in average interest-bearing deposits accompanied by an eleven basis point increase in rate paid on deposits resulting in a $623 thousand increase in interest expense on deposits for the third quarter of 2017 as compared to the same period in 2016. In addition to the increase in average deposits, average borrowings increased $78.9 million for the three months ended September 30, 2017 as compared to the same period in 2016 with the rate paid remaining unchanged, which resulted in a $340 thousand increase in interest expense on borrowings.

  • The tax-equivalent net interest margin of 3.71% for the three months ended September 30, 2017 remained unchanged from the same period in 2016. The contribution to the tax-equivalent margin from the accretion of purchase accounting adjustments for both periods also remained unchanged at nine basis points.
  • Noninterest income for the three months ended September 30, 2017 increased by $1.8 million from the same period in 2016. An increase of $551 thousand in fees for wealth management services resulted as wealth assets under management, administration, supervision and brokerage increased $2.46 billion from September 30, 2016 to September 30, 2017. Insurance revenue increased $487 thousand for the third quarter of 2017 as compared to the same period in 2016, largely due to the May 2017 acquisition of Hirshorn Boothby. In addition, revenue from our Capital Markets initiative, which was launched in the second quarter of 2017, contributed $843 thousand to noninterest income.
  • Noninterest expense for the three months ended September 30, 2017 increased $2.8 million from the same period in 2016. The increase was largely related to a $2.0 million increase in salary and wages due to staffing increases from our Capital Markets initiative, the Hirshorn Boothby acquisition and the Princeton wealth management office, annual salary and wage increases and increases in incentive compensation. In addition, an $850 thousand increase in due diligence, merger-related and merger integration costs primarily related to the Royal Bank merger, and a $597 thousand increase in other operating expenses, which included a $368 thousand increase in contributions, largely comprised of contributions to local schools under the Pennsylvania Educational Improvement Tax Credit (EITC) program, contributed to the increase. Contributions made through the EITC program result in tax credits towards the Bank’s Pennsylvania bank shares tax obligation.
  • For the three months ended September 30, 2017, a Provision of $1.3 million was recorded as compared to $1.4 million for the same period in 2016. Net charge-offs for the third quarter of 2017 were $728 thousand as compared to $704 thousand for the same period in 2016.

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

  • Total portfolio loans and leases of $2.68 billion as of September 30, 2017, increased by $141.9 million from December 31, 2016. Loan growth was concentrated in the commercial mortgage and commercial and industrial segments of the portfolio, which increased by $113.7 million, or 10.2%, and $17.8 million, or 3.1%, respectively.
  • The Allowance as of September 30, 2017 was $17.0 million, or 0.64% 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 0.70% as of September 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 1.01% as of September 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 change in the Allowance ratios was the result of the growth of the loan portfolio and improvements in certain qualitative factors and economic indicators, along with decreases in certain historic charge-off rates over the lookback period.
  • Available for sale investment securities as of September 30, 2017 totaled $471.7 million, a decrease of $95.3 million from December 31, 2016. The decrease in available for sale investment securities was primarily the result of the maturing, in January 2017, of $200 million of short-term U.S. Treasury bills. Partially offsetting the effect of this decrease in U.S. Treasury bills were increases of $104.7 million in available for sale investment securities since December 31, 2016, primarily in U.S. government and agency bonds and mortgage-backed securities. A portion of this increase is related to the strategic repositioning of the investment portfolio in anticipation of the Royal Bank merger.
  • Total assets as of September 30, 2017 were $3.48 billion, an increase of $55.3 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 $12.43 billion as of September 30, 2017, an increase of $1.10 billion from December 31, 2016. The increase in wealth assets was comprised of a $456.9 million increase in account balances whose fees are based on market value, and a $646.0 million increase in fixed rate flat-fee account types.
  • Deposits of $2.68 billion as of September 30, 2017 increased $104.5 million from December 31, 2016. Over 76% of this increase was in interest-bearing deposits, which grew by $80.1 million.
  • Borrowings of $315.5 million as of September 30, 2017 decreased $78.4 million from December 31, 2016. The decrease was comprised of a $23.3 million decrease in short-term borrowings and a $55.1 million decrease in long-term FHLB advances. In January 2017, $200.0 million of short-term borrowings associated with the maturing of $200.0 million of short-term U.S. Treasury bills were repaid. The net increase in short-term borrowings of $176.7 million was utilized to support loan growth, purchases of available for sale investment securities and to replace $55.1 million of long-term FHLB advances which matured during the first nine months of 2017.

  • The capital ratios for the Bank and the Corporation, as of September 30, 2017, as shown in the attached tables, indicate levels above the regulatory minimum to be considered “well capitalized.”

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.

FOR MORE INFORMATION CONTACT:

Frank Leto, President, CEO
610-581-4730
Mike Harrington, CFO
610-526-2466

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 Nine Months Ended
September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016 September 30, 2017 September 30, 2016
Consolidated Balance Sheet (selected items)
Interest-bearing deposits with banks$ 36,870 $ 30,806 $ 69,978 $ 34,206 $ 30,118
Investment securities (AFS, HTM and Trading) 482,399 452,869 400,360 573,763 373,508
Loans held for sale 6,327 8,590 3,015 9,621 11,506
Portfolio loans and leases 2,677,345 2,666,651 2,555,589 2,535,425 2,493,357
Allowance for loan and lease losses ("ALLL") (17,004) (16,399) (17,107) (17,486) (17,744)
Goodwill and other intangible assets 128,534 129,211 124,629 125,170 126,000
Total assets 3,476,821 3,438,219 3,292,617 3,421,530 3,174,080
Deposits - interest-bearing 1,923,567 1,863,288 1,865,009 1,843,495 1,759,862
Deposits - non-interest-bearing 760,614 818,475 771,556 736,180 718,015
Short-term borrowings 180,874 130,295 23,613 204,151 50,065
Long-term FHLB advances and other borrowings 134,651 164,681 174,711 189,742 204,772
Subordinated notes 29,573 29,559 29,546 29,532 29,518
Total liabilities 3,074,929 3,043,242 2,904,522 3,040,403 2,795,621
Shareholders' equity 401,892 394,977 388,095 381,127 378,459
Average Balance Sheet (selected items)
Interest-bearing deposits with banks$ 26,628 $ 26,266 $ 39,669 $ 55,298 $ 33,532 $ 30,807 $ 39,157
Investment securities (AFS, HTM and Trading) 462,700 429,400 393,306 386,658 373,616 428,723 368,594
Loans held for sale 3,728 3,855 4,238 11,591 12,887 3,938 8,752
Portfolio loans and leases 2,676,589 2,611,755 2,551,439 2,506,376 2,464,085 2,613,720 2,390,931
Total interest-earning assets 3,169,645 3,071,276 2,988,652 2,959,923 2,884,120 3,077,188 2,807,434
Goodwill and intangible assets 128,917 126,537 124,884 125,614 126,505 126,794 127,398
Total assets 3,441,906 3,333,307 3,244,060 3,215,868 3,142,019 3,340,484 3,068,642
Deposits - interest-bearing 1,871,494 1,853,660 1,852,194 1,809,276 1,729,689 1,859,188 1,693,663
Short-term borrowings 182,845 98,869 47,603 40,629 40,966 110,268 35,836
Long-term FHLB advances 155,918 171,567 182,507 198,454 218,920 169,900 235,002
Subordinated notes 29,564 29,550 29,537 29,523 29,509 29,550 29,496
Total interest-bearing liabilities 2,239,821 2,153,646 2,111,841 2,077,882 2,019,084 2,168,906 1,993,997
Total liabilities 3,044,549 2,943,591 2,861,846 2,837,825 2,769,065 2,950,666 2,701,973
Shareholders' equity 397,357 389,716 382,214 378,043 372,954 389,818 366,669
Income Statement
Net interest income$ 29,438 $ 27,965 $ 27,403 $ 26,990 $ 26,717 $ 84,806 $ 79,246
Provision for loan and lease losses 1,333 (83) 291 1,059 1,412 1,541 3,267
Noninterest income 15,584 14,785 13,227 13,248 13,786 43,596 40,920
Noninterest expense 28,184 28,495 26,660 25,087 25,371 83,339 76,787
Income tax expense 4,766 4,905 4,635 4,684 4,346 14,306 13,484
Net income 10,739 9,433 9,044 9,408 9,374 29,216 26,628
Basic earnings per share 0.63 0.56 0.53 0.56 0.56 1.72 1.58
Diluted earnings per share 0.62 0.55 0.53 0.55 0.55 1.70 1.57
Net income (core) (1) 11,245 10,236 9,375 9,402 9,392 30,857 26,684
Basic earnings per share (core) (1) 0.66 0.60 0.55 0.56 0.56 1.82 1.58
Diluted earnings per share (core) (1) 0.65 0.59 0.55 0.55 0.55 1.79 1.57
Cash dividends paid per share 0.22 0.21 0.21 0.21 0.21 0.64 0.61
Profitability Indicators
Return on average assets 1.24% 1.14% 1.13% 1.16% 1.19% 1.17% 1.16%
Return on average equity 10.72% 9.71% 9.60% 9.90% 10.00% 10.02% 9.70%
Return on tangible equity(1) 16.52% 15.06% 14.96% 15.68% 16.06% 23.42% 15.83%
Tax-equivalent net interest margin 3.71% 3.68% 3.74% 3.65% 3.71% 3.71% 3.79%
Efficiency ratio(1) 59.30% 62.16% 62.66% 60.30% 60.41% 61.32% 61.64%
Mortgage Banking Information
Mortgage loans originated$ 48,159 $ 46,848 $ 48,550 $ 78,749 $ 84,885 $ 143,557 $ 201,310
Residential mortgage loans sold - servicing retained 28,224 21,790 27,690 44,763 40,462 77,704 93,371
Residential mortgage loans sold - servicing released 4,982 3,819 4,981 4,632 10,522 13,782 18,197
Total residential mortgage loans sold$ 33,206 $ 25,609 $ 32,671 $ 49,395 $ 50,984 $ 91,486 $ 111,568
Residential mortgage loans serviced for others$ 647,037 $ 641,165 $ 638,553 $ 631,889 $ 618,134
Share Data
Closing share price$ 43.80 $ 42.50 $ 39.50 $ 42.15 $ 31.99
Book value per common share$ 23.57 $ 23.25 $ 22.87 $ 22.50 $ 22.40
Tangible book value per common share$ 16.03 $ 15.64 $ 15.53 $ 15.11 $ 14.94
Price / book value 185.82% 182.81% 172.71% 187.34% 142.80%
Price / tangible book value 273.19% 271.69% 254.41% 278.96% 214.07%
Weighted average diluted shares outstanding 17,233,548 17,232,767 17,182,689 17,164,675 17,072,358 17,222,051 16,994,455
Shares outstanding, end of period 17,050,151 16,989,849 16,969,451 16,939,715 16,893,878
Wealth Management Information:
Wealth assets under mgmt, administration, supervision and brokerage (2)$ 12,431,370 $ 12,050,555 $ 11,725,460 $ 11,328,457 $ 9,969,745
Fees for wealth management services$ 9,651 $ 9,807 $ 9,303 $ 9,327 $ 9,100
Capital Ratios
Bryn Mawr Trust Company
Tier I capital to risk weighted assets ("RWA") 10.78% 10.29% 10.58% 10.50% 10.99%
Total (Tier II) capital to RWA 11.42% 10.90% 11.25% 11.19% 11.70%
Tier I leverage ratio 8.75% 8.76% 8.83% 8.73% 9.17%
Tangible equity ratio (1) 8.46% 8.24% 8.46% 7.85% 8.85%
Common equity Tier I capital to RWA 10.78% 10.29% 10.58% 10.50% 10.99%
Bryn Mawr Bank Corporation
Tier I capital to RWA 10.50% 10.10% 10.50% 10.51% 10.42%
Total (Tier II) capital to RWA 12.23% 11.79% 12.30% 12.35% 12.30%
Tier I leverage ratio 8.53% 8.63% 8.77% 8.73% 8.70%
Tangible equity ratio (1) 8.16% 8.03% 8.32% 7.76% 8.28%
Common equity Tier I capital to RWA 10.50% 10.10% 10.50% 10.51% 10.42%
Asset Quality Indicators
Net loan and lease charge-offs ("NCO"s)$ 728 $ 625 $ 670 $ 1,317 $ 704 $ 2,023 $ 1,380
Nonperforming loans and leases ("NPL"s)$ 4,472 $ 7,237 $ 7,329 $ 8,363 $ 9,883
Other real estate owned ("OREO") 865 1,122 978 1,017 867
Total nonperforming assets ("NPA"s)$ 5,337 $ 8,359 $ 8,307 $ 9,380 $ 10,750
Nonperforming loans and leases 30 or more days past due$ 2,337 $ 4,076 $ 5,097 $ 6,072 $ 6,684
Performing loans and leases 30 to 89 days past due 4,558 6,258 6,077 3,062 2,537
Performing loans and leases 90 or more days past due - - - - -
Total delinquent loans and leases$ 6,895 $ 10,334 $ 11,174 $ 9,134 $ 9,221
Delinquent loans and leases to total loans and leases 0.26% 0.39% 0.44% 0.36% 0.37%
Delinquent performing loans and leases to total loans and leases 0.17% 0.23% 0.24% 0.12% 0.10%
NCOs / average loans and leases (annualized) 0.11% 0.10% 0.11% 0.21% 0.11% 0.10% 0.08%
NPLs / total portfolio loans and leases 0.17% 0.27% 0.29% 0.33% 0.40%
NPAs / total loans and leases and OREO 0.20% 0.31% 0.32% 0.37% 0.43%
NPAs / total assets 0.15% 0.24% 0.25% 0.27% 0.34%
ALLL / NPLs 380.23% 226.60% 233.42% 209.09% 179.54%
ALLL / portfolio loans 0.64% 0.61% 0.67% 0.69% 0.71%
ALLL on originated loans and leases / Originated loans and leases (1) 0.70% 0.68% 0.75% 0.78% 0.81%
(Total Allowance + Loan mark) / Total Gross portfolio loans and leases (1) 1.01% 1.03% 1.12% 1.17% 1.24%
Troubled debt restructurings ("TDR"s) included in NPLs$ 2,033 $ 2,470 $ 2,681 $ 2,632 $ 1,680
TDRs in compliance with modified terms 6,597 6,148 6,492 6,395 6,305
Total TDRs$ 8,630 $ 8,618 $ 9,173 $ 9,027 $ 7,985

(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)
September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016
Assets
Cash and due from banks$ 8,682 $ 19,352 $ 17,457 $ 16,559 $ 18,905
Interest-bearing deposits with banks 36,870 30,806 69,978 34,206 30,118
Cash and cash equivalents 45,552 50,158 87,435 50,765 49,023
Investment securities, available for sale 471,721 443,687 391,028 566,996 366,910
Investment securities, held to maturity 6,255 5,161 5,194 2,879 2,896
Investment securities, trading 4,423 4,021 4,138 3,888 3,702
Loans held for sale 6,327 8,590 3,015 9,621 11,506
Portfolio loans and leases, originated 2,433,054 2,409,964 2,286,814 2,240,987 2,176,549
Portfolio loans and leases, acquired 244,291 256,687 268,775 294,438 316,808
Total portfolio loans and leases 2,677,345 2,666,651 2,555,589 2,535,425 2,493,357
Less: Allowance for losses on originated loan and leases (16,957) (16,374) (17,069) (17,458) (17,716)
Less: Allowance for losses on acquired loan and leases (47) (25) (38) (28) (28)
Total allowance for loan and lease losses (17,004) (16,399) (17,107) (17,486) (17,744)
Net portfolio loans and leases 2,660,341 2,650,252 2,538,482 2,517,939 2,475,613
Premises and equipment 44,544 44,446 40,515 41,778 42,559
Accrued interest receivable 9,287 8,717 8,392 8,533 8,066
Mortgage servicing rights 5,732 5,683 5,686 5,582 4,793
Bank owned life insurance 39,881 39,680 39,479 39,279 39,055
Federal Home Loan Bank ("FHLB") stock 16,248 15,168 8,505 17,305 13,185
Goodwill 107,127 107,127 104,765 104,765 104,765
Intangible assets 21,407 22,084 19,864 20,405 21,235
Other investments 8,941 8,682 8,716 8,627 9,121
Other assets 29,035 24,763 27,403 23,168 21,651
Total assets$ 3,476,821 $ 3,438,219 $ 3,292,617 $ 3,421,530 $ 3,174,080
Liabilities
Deposits
Noninterest-bearing$ 760,614 $ 818,475 $ 771,556 $ 736,180 $ 718,015
Interest-bearing 1,923,567 1,863,288 1,865,009 1,843,495 1,759,862
Total deposits 2,684,181 2,681,763 2,636,565 2,579,675 2,477,877
Short-term borrowings 180,874 130,295 23,613 204,151 50,065
Long-term FHLB advances 134,651 164,681 174,711 189,742 204,772
Subordinated notes 29,573 29,559 29,546 29,532 29,518
Accrued interest payable 2,267 2,830 2,722 2,734 1,854
Other liabilities 43,383 34,114 37,365 34,569 31,535
Total liabilities 3,074,929 3,043,242 2,904,522 3,040,403 2,795,621
Shareholders' equity
Common stock 21,248 21,162 21,141 21,111 21,064
Paid-in capital in excess of par value 235,412 234,654 233,910 232,806 231,398
Less: common stock held in treasury, at cost (68,134) (67,091) (66,969) (66,950) (66,895)
Accumulated other comprehensive (loss) income, net of tax (1,400) (1,564) (1,990) (2,409) 2,128
Retained earnings 214,766 207,816 202,003 196,569 190,764
Total shareholders equity 401,892 394,977 388,095 381,127 378,459
Total liabilities and shareholders' equity$ 3,476,821 $ 3,438,219 $ 3,292,617 $ 3,421,530 $ 3,174,080

Bryn Mawr Bank Corporation
Supplemental Balance Sheet Information (unaudited)
(dollars in thousands)
Portfolio Loans and Leases as of
September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016
Commercial mortgages$ 1,224,571 $ 1,197,936 $ 1,137,870 $ 1,110,897 $ 1,089,621
Home equity loans and lines 206,974 208,480 203,962 208,000 206,578
Residential mortgages 422,524 416,488 418,264 413,540 418,408
Construction 133,505 156,581 145,699 141,964 133,269
Total real estate loans 1,987,574 1,979,485 1,905,795 1,874,401 1,847,876
Commercial & Industrial 597,595 599,203 567,917 579,791 565,497
Consumer 31,306 28,485 23,932 25,341 23,717
Leases 60,870 59,478 57,945 55,892 56,267
Total non-real estate loans and leases 689,771 687,166 649,794 661,024 645,481
Total portfolio loans and leases$ 2,677,345 $ 2,666,651 $ 2,555,589 $ 2,535,425 $ 2,493,357
Nonperforming Loans and Leases as of
September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016
Commercial mortgages$ 193 $ 818 $ 315 $ 320 $ 139
Home equity loans and lines 613 1,535 1,828 2,289 2,827
Residential mortgages 1,589 2,589 2,640 2,658 2,845
Construction - - - - -
Total nonperforming real estate loans 2,395 4,942 4,783 5,267 5,811
Commercial & Industrial 1,977 2,112 2,471 2,957 3,960
Consumer - 10 - 2 2
Leases 100 173 75 137 110
Total nonperforming non-real estate loans and leases 2,077 2,295 2,546 3,096 4,072
Total nonperforming portfolio loans and leases$ 4,472 $ 7,237 $ 7,329 $ 8,363 $ 9,883
Net Loan and Lease Charge-Offs (Recoveries) for the Three Months Ended
September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016
Commercial mortgage$ (3) $ (3) $ (3) $ (51) $ (4)
Home equity loans and lines 69 169 438 69 375
Residential 3 43 27 28 2
Construction (1) (1) (1) (1) -
Total net charge-offs of real estate loans 68 208 461 45 373
Commercial & Industrial 298 185 59 1,128 95
Consumer 36 16 39 42 58
Leases 326 216 111 102 178
Total net charge-offs of non-real estate loans and leases 660 417 209 1,272 331
Total net charge-offs$ 728 $ 625 $ 670 $ 1,317 $ 704

Bryn Mawr Bank Corporation
Supplemental Balance Sheet Information (unaudited)
(dollars in thousands)
Investment Securities Available for Sale, at Fair Value
September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016
U.S. Treasury securities $ 100 $ 100 $ 100 $ 200,097 $ 101
Obligations of the U.S. Government and agencies 142,711 126,468 100,476 82,198 76,598
State & political subdivisions - tax-free 23,556 26,958 30,416 33,005 36,735
State & political subdivisions - taxable 524 524 524 525 529
Mortgage-backed securities 260,680 230,617 197,420 185,951 184,919
Collateralized mortgage obligations 39,595 42,549 45,476 48,694 51,344
Other debt securities 1,100 1,099 1,299 1,299 1,450
Bond mutual funds - 11,956 11,920 11,895 11,847
Other investments 3,455 3,416 3,397 3,332 3,387
Total investment securities available for sale, at fair value$ 471,721 $ 443,687 $ 391,028 $ 566,996 $ 366,910
Unrealized Gain (Loss) on Investment Securities Available for Sale
September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016
U.S. Treasury securities $ - $ - $ - $ 3 $ -
Obligations of the U.S. Government and agencies (920) (699) (803) (913) 946
State & political subdivisions - tax-free 23 11 (10) (96) 131
State & political subdivisions - taxable 1 1 1 2 5
Mortgage-backed securities 869 480 196 (47) 3,801
Collateralized mortgage obligations (640) (662) (777) (794) 253
Other debt securities - (1) (1) (1) -
Bond mutual funds - - (36) (61) (109)
Other investments 230 203 132 13 34
Total unrealized (losses) gains on investment securities available for sale$ (437) $ (667) $ (1,298) $ (1,894) $ 5,061
Deposits
September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016
Interest-bearing deposits:
Interest-bearing checking$ 395,383 $ 381,345 $ 395,131 $ 379,424 $ 333,055
Money market 720,613 729,859 757,071 761,657 725,116
Savings 264,273 254,903 255,791 232,193 228,391
Wholesale non-maturity deposits 48,620 54,675 69,471 74,272 64,664
Wholesale time deposits 178,610 120,524 68,164 73,037 99,052
Retail time deposits 316,068 321,982 319,381 322,912 309,584
Total interest-bearing deposits 1,923,567 1,863,288 1,865,009 1,843,495 1,759,862
Noninterest-bearing deposits 760,614 818,475 771,556 736,180 718,015
Total deposits$ 2,684,181 $ 2,681,763 $ 2,636,565 $ 2,579,675 $ 2,477,877

Bryn Mawr Bank Corporation
Detailed Income Statements (unaudited)
(dollars in thousands, except per share data)
For the Three Months Ended For the Nine Months Ended
September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016 September 30, 2017 September 30, 2016
Interest income:
Interest and fees on loans and leases$ 30,892 $ 29,143 $ 28,482 $ 28,230 $ 27,931 $ 88,517 $ 82,306
Interest on cash and cash equivalents 36 35 66 53 27 137 115
Interest on investment securities 2,270 2,059 1,778 1,639 1,556 6,107 4,648
Total interest income 33,198 31,237 30,326 29,922 29,514 94,761 87,069
Interest expense:
Interest on deposits 2,198 1,983 1,828 1,780 1,575 6,009 4,053
Interest on short-term borrowings 547 237 27 22 34 811 71
Interest on FHLB advances and other borrowings 645 682 698 760 818 2,025 2,593
Interest on subordinated notes 370 370 370 370 370 1,110 1,106
Total interest expense 3,760 3,272 2,923 2,932 2,797 9,955 7,823
Net interest income 29,438 27,965 27,403 26,990 26,717 84,806 79,246
Provision for loan and lease losses (the "Provision") 1,333 (83) 291 1,059 1,412 1,541 3,267
Net interest income after Provision 28,105 28,048 27,112 25,931 25,305 83,265 75,979
Noninterest income:
Fees for wealth management services 9,651 9,807 9,303 9,327 9,100 28,761 27,363
Insurance revenue 1,373 943 763 715 886 3,079 3,007
Capital markets revenue 843 953 - - - 1,796 -
Service charges on deposits 676 630 647 688 688 1,953 2,103
Loan servicing and other fees 548 519 503 411 497 1,570 1,528
Net gain on sale of loans 799 520 629 607 879 1,948 2,440
Net gain (loss) on sale of investment securities available for sale 72 - 1 9 (28) 73 (86)
Net (loss) gain on sale of other real estate owned - (12) - - - (12) (76)
Dividends on FHLB and FRB stocks 217 218 214 309 277 649 754
Other operating income 1,405 1,207 1,167 1,182 1,487 3,779 3,686
Total noninterest income 15,584 14,785 13,227 13,248 13,786 43,596 40,719
Noninterest expense:
Salaries and wages 13,602 13,580 12,450 11,855 11,621 39,632 35,556
Employee benefits 2,631 2,475 2,559 2,207 2,420 7,665 7,341
Loss on pension termination - - - - - - -
Occupancy and bank premises 2,485 2,247 2,526 2,407 2,349 7,258 7,204
Branch lease termination expense - - - - - - -
Furniture, fixtures and equipment 1,726 1,869 1,974 1,869 1,837 5,569 5,651
Advertising 277 405 386 391 334 1,068 990
Amortization of intangible assets 677 687 693 830 888 2,057 2,668
Impairment of intangible assets - - - - - - -
Impairment (recovery) of mortgage servicing rights ("MSRs") 3 43 3 (580) 29 49 711
Due diligence, merger-related and merger integration expenses 850 1,236 511 - - 2,597 -
Professional fees 739 1,049 711 963 937 2,499 2,696
Pennsylvania bank shares tax 317 297 664 (204) 675 1,278 1,953
Information technology 880 821 874 857 881 2,575 2,804
Other operating expenses 3,997 3,786 3,309 4,492 3,400 11,092 9,012
Total noninterest expense 28,184 28,495 26,660 25,087 25,371 83,339 76,586
Income before income taxes 15,505 14,338 13,679 14,092 13,720 43,522 40,112
Income tax expense 4,766 4,905 4,635 4,684 4,346 14,306 13,484
Net income$ 10,739 $ 9,433 $ 9,044 $ 9,408 $ 9,374 $ 29,216 $ 26,628
Per share data:
Weighted average shares outstanding 17,023,046 16,984,563 16,954,132 16,916,705 16,860,727 16,987,499 16,840,457
Dilutive common shares 210,502 248,204 228,557 247,970 211,631 234,552 153,998
Weighted average diluted shares 17,233,548 17,232,767 17,182,689 17,164,675 17,072,358 17,222,051 16,994,455
Basic earnings (loss) per common share$ 0.63 $ 0.56 $ 0.53 $ 0.56 $ 0.56 $ 1.72 $ 1.58
Diluted earnings (loss) per common share$ 0.62 $ 0.55 $ 0.53 $ 0.55 $ 0.55 $ 1.70 $ 1.57
Dividend declared per share$ 0.22 $ 0.21 $ 0.21 $ 0.21 $ 0.21 $ 0.64 $ 0.61
Effective tax rate 30.74% 34.21% 33.88% 33.24% 31.68% 32.87% 33.62%

Bryn Mawr Bank Corporation
Tax-Equivalent Net Interest Margin (unaudited)
(dollars in thousands, except per share data)
For The Three Months Ended For The Nine Months Ended
September 30, 2017June 30, 2017March 31, 2017December 31, 2016September 30, 2016 September 30, 2017September 30, 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 Average BalanceInterest Income/ ExpenseAverage Rates Earned/ PaidAverage BalanceInterest Income/ ExpenseAverage Rates Earned/ Paid
Assets:
Interest-bearing deposits with other banks $ 26,628 $ 36 0.54%$ 26,266 $ 35 0.53%$ 39,669 $ 66 0.67%$ 55,298 $ 53 0.38%$ 33,532 $ 27 0.32% $ 30,807 $ 137 0.59%$ 39,157 $ 115 0.39%
Investment securities - available for sale:
Taxable 427,106 2,160 2.01% 391,112 1,940 1.99% 354,229 1,653 1.89% 344,931 1,498 1.73% 329,293 1,423 1.72% 391,082 5,799 1.98% 323,866 4,263 1.76%
Tax-exempt 25,268 134 2.10% 28,970 150 2.08% 31,485 164 2.11% 34,985 175 1.99% 37,893 189 1.98% 28,552 448 2.10% 39,243 567 1.93%
Total investment securities - available for sale 452,374 2,294 2.01% 420,082 2,090 2.00% 385,714 1,817 1.91% 379,916 1,673 1.75% 367,186 1,612 1.75% 419,634 6,247 1.99% 363,109 4,830 1.78%
Investment securities - held to maturity 6,044 11 0.72% 5,181 5 0.39% 3,702 7 0.77% 2,889 7 0.96% 2,907 6 0.82% 4,984 4 0.11% 1,782 4 0.30%
Investment securities - trading 4,282 8 0.74% 4,137 13 1.26% 3,890 8 0.83% 3,853 16 1.65% 3,523 2 0.23% 4,105 2 0.07% 3,703 2 0.07%
Loans and leases * 2,680,317 31,058 4.60% 2,615,610 29,309 4.49% 2,555,677 28,622 4.54% 2,517,967 28,354 4.48% 2,476,972 28,032 4.50% 2,617,658 88,989 4.55% 2,399,683 82,571 4.60%
Total interest-earning assets 3,169,645 33,407 4.18% 3,071,276 31,452 4.11% 2,988,652 30,520 4.14% 2,959,923 30,103 4.05% 2,884,120 29,679 4.09% 3,077,188 95,379 4.14% 2,807,434 87,522 4.16%
Cash and due from banks 15,709 15,727 14,942 16,127 16,228 15,462 16,380
Less: allowance for loan and lease losses (16,564) (17,549) (17,580) (17,858) (17,257) (17,227) (16,924)
Other assets 273,116 263,853 258,046 257,676 258,928 265,061 261,752
Total assets $ 3,441,906 $ 3,333,307 $ 3,244,060 $ 3,215,868 $ 3,142,019 $ 3,340,484 $ 3,068,642
Liabilities:
Interest-bearing deposits:
Savings, NOW and market rate deposits $ 1,359,293 $ 823 0.24%$ 1,375,949 $ 813 0.24%$ 1,388,561 $ 756 0.22%$ 1,328,577 $ 686 0.21%$ 1,286,404 $ 641 0.20% $ 1,374,494 $ 2,392 0.23%$ 1,280,023 $ 1,799 0.19%
Wholesale deposits 190,849 548 1.14% 154,424 378 0.98% 143,461 317 0.90% 156,541 319 0.81% 164,706 327 0.79% 163,086 1,243 1.02% 166,136 921 0.74%
Retail time deposits 321,352 827 1.02% 323,287 792 0.98% 320,172 755 0.96% 324,158 775 0.95% 278,579 607 0.87% 321,608 2,374 0.99% 247,504 1,333 0.72%
Total interest-bearing deposits 1,871,494 2,198 0.47% 1,853,660 1,983 0.43% 1,852,194 1,828 0.40% 1,809,276 1,780 0.39% 1,729,689 1,575 0.36% 1,859,188 6,009 0.43% 1,693,663 4,053 0.32%
Borrowings:
Short-term borrowings 182,845 547 1.19% 98,869 237 0.96% 47,603 27 0.23% 40,629 22 0.22% 40,966 34 0.33% 110,268 811 0.98% 35,836 71 0.26%
Long-term FHLB advances 155,918 645 1.64% 171,567 682 1.59% 182,507 698 1.55% 198,454 760 1.52% 218,920 818 1.49% 169,900 2,025 1.59% 235,002 2,593 1.47%
Subordinated notes 29,564 370 4.97% 29,550 370 5.02% 29,537 370 5.08% 29,523 370 4.99% 29,509 370 4.99% 29,550 1,110 5.02% 29,496 1,106 5.01%
Total borrowings 368,327 1,562 1.68% 299,986 1,289 1.72% 259,647 1,095 1.71% 268,606 1,152 1.71% 289,395 1,222 1.68% 309,718 3,946 1.70% 300,334 3,770 1.68%
Total interest-bearing liabilities 2,239,821 3,760 0.67% 2,153,646 3,272 0.61% 2,111,841 2,923 0.56% 2,077,882 2,932 0.56% 2,019,084 2,797 0.55% 2,168,906 9,955 0.61% 1,993,997 7,823 0.52%
Noninterest-bearing deposits 764,562 755,597 711,794 724,465 716,581 744,178 674,601
Other liabilities 40,166 34,348 38,211 35,478 33,400 37,582 33,375
Total noninterest-bearing liabilities 804,728 789,945 750,005 759,943 749,981 781,760 707,976
Total liabilities 3,044,549 2,943,591 2,861,846 2,837,825 2,769,065 2,950,666 2,701,973
Shareholders' equity 397,357 389,716 382,214 378,043 372,954 389,818 366,669
Total liabilities and shareholders' equity $ 3,441,906 $ 3,333,307 $ 3,244,060 $ 3,215,868 $ 3,142,019 $ 3,340,484 $ 3,068,642
Net interest spread 3.51% 3.50% 3.58% 3.49% 3.54% 3.53% 3.64%
Effect of noninterest-bearing sources 0.20% 0.18% 0.16% 0.16% 0.17% 0.18% 0.15%
Tax-equivalent net interest margin $ 29,647 3.71% $ 28,180 3.68% $ 27,597 3.74% $ 27,171 3.65% $ 26,882 3.71% $ 85,424 3.71% $ 79,699 3.79%
Tax-equivalent adjustment $ 209 0.03% $ 215 0.03% $ 194 0.02% $ 181 0.02% $ 165 0.02% $ 618 0.03% $ 453 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 $ 708 0.10% $ 402 0.06% $ 726 0.12% $ 742 0.12% $ 578 0.09% $ 1,836 0.09% $ 2,607 0.15%
Retail time deposits (15)-0.02% (18)-0.02% (19)-0.02% (19)-0.02% (29)-0.04% (52)-0.02% (200)-0.11%
Short-term borrowings - 0.00% - 0.00% - 0.00% - 0.00% - 0.00% - 0.00% (12)-0.04%
Long-term FHLB advances and other borrowings (30)-0.08% (30)-0.07% (30)-0.07% (30)-0.06% (30)-0.05% (91)-0.07% (90)-0.05%
Net interest income from fair value marks $ 753 $ 450 $ 775 $ 791 $ 637 $ 1,979 $ 2,909
Purchase accounting effect on tax-equivalent margin 0.09% 0.06% 0.11% 0.11% 0.09% 0.09% 0.14%
* 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 Nine Months Ended
September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016 September 30, 2017 September 30, 2016
Reconciliation of Net Income to Net Income (core):
Net income (a GAAP measure)$ 10,739 $ 9,433 $ 9,044 $ 9,408 $ 9,374 $ 29,216 $ 26,628
Less: Tax-effected non-core noninterest income:
Loss (gain) on sale of investment securities available for sale (47) - (1) (6) 18 (47) 56
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 553 803 332 - - 1,688 -
Net income (core) (a non-GAAP measure)$ 11,245 $ 10,236 $ 9,375 $ 9,402 $ 9,392 $ 30,857 $ 26,684
Calculation of Basic and Diluted Earnings per Common Share (core):
Weighted average common shares outstanding 17,023,046 16,984,563 16,954,132 16,916,705 16,860,727 16,987,499 16,840,457
Dilutive common shares 210,502 248,204 228,557 247,970 211,631 234,552 153,998
Weighted average diluted shares 17,233,548 17,232,767 17,182,689 17,164,675 17,072,358 17,222,051 16,994,455
Basic earnings per common share (core) (a non-GAAP measure)$ 0.66 $ 0.60 $ 0.55 $ 0.56 $ 0.56 $ 1.82 $ 1.58
Diluted earnings per common share (core) (a non-GAAP measure)$ 0.65 $ 0.59 $ 0.55 $ 0.55 $ 0.55 $ 1.79 $ 1.57
Calculation of Return on Average Tangible Equity:
Net income (loss)$ 10,739 $ 9,433 $ 9,044 $ 9,408 $ 9,374 $ 29,216 $ 26,628
Add: Tax-effected amortization and impairment of intangible assets 440 447 450 540 577 1,337 1,734
Net tangible income (numerator)$ 11,179 $ 9,880 $ 9,494 $ 9,948 $ 9,951 $ 30,553 $ 28,362
Average shareholders' equity$ 397,357 $ 389,716 $ 382,214 $ 378,043 $ 372,954 $ 389,818 $ 366,669
Less: Average goodwill and intangible assets (128,917) (126,537) (124,884) (125,614) (126,505) (126,794) (127,398)
Net average tangible equity (denominator)$ 268,440 $ 263,179 $ 257,330 $ 252,429 $ 246,449 $ 263,024 $ 239,271
Return on tangible equity (a non-GAAP measure) 16.52% 15.06% 14.96% 15.68% 16.06% 15.53% 15.83%
Calculation of Tangible Equity Ratio:
Total shareholders' equity$ 401,892 $ 394,977 $ 388,095 $ 381,127 $ 378,459
Less: Goodwill and intangible assets (128,534) (129,211) (124,629) (125,170) (126,000)
Net tangible equity (numerator)$ 273,358 $ 265,766 $ 263,466 $ 255,957 $ 252,459
Total assets$ 3,476,821 $ 3,438,219 $ 3,292,617 $ 3,421,530 $ 3,174,080
Less: Goodwill and intangible assets (128,534) (129,211) (124,629) (125,170) (126,000)
Tangible assets (denominator)$ 3,348,287 $ 3,309,008 $ 3,167,988 $ 3,296,360 $ 3,048,080
Tangible equity ratio 8.16% 8.03% 8.32% 7.76% 8.28%
Calculation of Efficiency Ratio:
Noninterest expense$ 28,184 $ 28,495 $ 26,660 $ 25,087 $ 25,371 $ 83,339 $ 76,787
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 (677) (687) (693) (830) (888) (2,057) (2,668)
Impairment of intangible assets - - - - - - -
Due diligence, merger-related and merger integration expenses (850) (1,236) (511) - - (2,597) -
Noninterest expense (adjusted) (numerator)$ 26,657 $ 26,572 $ 25,456 $ 24,257 $ 24,483 $ 78,685 $ 74,119
Noninterest income$ 15,584 $ 14,785 $ 13,227 $ 13,248 $ 13,786 $ 43,596 $ 40,920
Less: non-core noninterest income items:
Loss (gain) on sale of investment securities available for sale (72) - (2) (9) 28 (73) 86
Noninterest income (core)$ 15,512 $ 14,785 $ 13,225 $ 13,239 $ 13,814 $ 43,523 $ 41,006
Net interest income 29,438 27,965 27,403 26,990 26,717 84,806 79,246
Noninterest income (core) and net interest income (denominator)$ 44,950 $ 42,750 $ 40,628 $ 40,229 $ 40,531 $ 128,329 $ 120,252
Efficiency ratio 59.30% 62.16% 62.66% 60.30% 60.41% 61.32% 61.64%
* 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$ 17,004 $ 16,399 $ 17,107 $ 17,486 $ 17,744
Less: Allowance on acquired loans 47 25 38 28 28
Allowance on originated loans and leases$ 16,957 $ 16,374 $ 17,069 $ 17,458 $ 17,716
Total Allowance$ 17,004 $ 16,399 $ 17,107 $ 17,486 $ 17,744
Loan mark on acquired loans 10,223 11,084 11,544 12,286 13,391
Total Allowance + Loan mark$ 27,227 $ 27,483 $ 28,651 $ 29,772 $ 31,135
Total Portfolio loans and leases$ 2,677,345 $ 2,666,651 $ 2,555,589 $ 2,535,425 $ 2,493,357
Less: Originated loans and leases 2,433,054 2,409,964 2,286,814 2,240,987 2,176,549
Net acquired loans$ 244,291 $ 256,687 $ 268,775 $ 294,438 $ 316,808
Add: Loan mark on acquired loans 10,223 11,084 11,544 12,286 13,391
Gross acquired loans (excludes loan mark)$ 254,514 $ 267,771 $ 280,319 $ 306,724 $ 330,199
Originated loans and leases 2,433,054 2,409,964 2,286,814 2,240,987 2,176,549
Total Gross portfolio loans and leases$ 2,687,568 $ 2,677,735 $ 2,567,133 $ 2,547,711 $ 2,506,748



Source: BMT