Bryn Mawr Bank Corporation Reports Fourth Quarter Earnings Impacted by $15.2 Million One-Time Income Tax Charge Related to the Tax Cuts and Jobs Act, Declares $0.22 Dividend, Completes Royal Bank Merger

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

Future Effect of Purchase Accounting Adjustments Recorded in the Merger

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

(dollars in thousands) Acquired Balance (Accretable)/

Amortizable

Fair Value

Adjustment

Nonaccretable

Fair Value

Adjustment

Recorded Fair

Value

Interest-earning assets:
Loans and leases $ 597,435 $ (15,990 ) $ (11,072 ) $ 570,373
Interest-bearing liabilities:
Time deposits $ 197,841 $ (2,535 ) $ $ 200,376
FHLB advances and other borrowings $ 75,000 $ 432 $ $ 74,568
Junior subordinated debentures $ 25,774 $ 4,358 $ $ 21,416

FORWARD LOOKING STATEMENTS AND SAFE HARBOR

This press release contains statements which, to the extent that they are not recitations of historical fact may constitute forward-looking statements for purposes of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Such forward-looking statements may include financial and other projections as well as statements regarding the Corporation’s future plans, objectives, performance, revenues, growth, profits, operating expenses or the Corporation’s underlying assumptions. The words “may,” “would,” “should,” “could,” “will,” “likely,” “possibly,” “expect,” “anticipate,” “intend,” “indicate,” “estimate,” “target,” “potentially,” “promising,” “probably,” “outlook,” “predict,” “contemplate,” “continue,” “plan,” “forecast,” “project,” “are optimistic,” “are looking,” “are looking forward” and “believe” or other similar words and phrases may identify forward-looking statements. Persons reading this press release are cautioned that such statements are only predictions, and that the Corporation’s actual future results or performance may be materially different.

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

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

Bryn Mawr Bank Corporation
Summary Financial Information (unaudited)
(dollars in thousands, except per share data)
As of or For the Three Months Ended For the Twelve Months Ended
December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016
Consolidated Balance Sheet (selected items)
Interest-bearing deposits with banks $ 48,367 $ 36,870 $ 30,806 $ 69,978 $ 34,206
Investment securities 701,744 482,399 452,869 400,360 573,763
Loans held for sale 3,794 6,327 8,590 3,015 9,621
Portfolio loans and leases 3,285,857 2,677,345 2,666,651 2,555,589 2,535,425
Allowance for loan and lease losses (“ALLL”) (17,525 ) (17,004 ) (16,399 ) (17,107 ) (17,486 )
Goodwill and other intangible assets 205,855 128,534 129,211 124,629 125,170
Total assets 4,449,720 3,476,821 3,438,219 3,292,617 3,421,530
Deposits – interest-bearing 2,448,954 1,923,567 1,863,288 1,865,009 1,843,495
Deposits – non-interest-bearing 924,844 760,614 818,475 771,556 736,180
Short-term borrowings 237,865 180,874 130,295 23,613 204,151
Long-term FHLB advances and other borrowings 139,140 134,651 164,681 174,711 189,742
Subordinated notes 98,416 29,573 29,559 29,546 29,532
Total liabilities 3,921,601 3,074,929 3,043,242 2,904,522 3,040,403
Total shareholders’ equity 528,119 401,892 394,977 388,095 381,127
Average Balance Sheet (selected items)
Interest-bearing deposits with banks $ 43,962 $ 26,628 $ 26,266 $ 39,669 $ 55,298 $ 34,122 $ 43,214
Investment securities 499,968 462,700 429,400 393,306 386,658 446,681 373,134
Loans held for sale 3,966 3,728 3,855 4,238 11,591 3,945 9,466
Portfolio loans and leases 2,801,289 2,676,589 2,611,755 2,551,439 2,506,376 2,660,999 2,419,950
Total interest-earning assets 3,349,185 3,169,645 3,071,276 2,988,652 2,959,923 3,145,747 2,845,764
Goodwill and intangible assets 142,652 128,917 126,537 124,884 125,614 130,791 126,950
Total assets 3,640,667 3,441,906 3,333,307 3,244,060 3,215,868 3,416,146 3,105,650
Deposits – interest-bearing 2,031,170 1,871,494 1,853,660 1,852,194 1,809,276 1,902,536 1,722,724
Short-term borrowings 180,650 182,845 98,869 47,603 40,629 128,008 37,041
Long-term FHLB advances 134,605 155,918 171,567 182,507 198,454 161,004 225,815
Subordinated notes 43,844 29,564 29,550 29,537 29,523 33,153 29,503
Jr. subordinated debentures 3,957 997
Total interest-bearing liabilities 2,394,226 2,239,821 2,153,646 2,111,841 2,077,882 2,225,698 2,015,083
Total liabilities 3,213,349 3,044,549 2,943,591 2,861,846 2,837,825 3,016,876 2,736,121
Total shareholders’ equity 427,318 397,357 389,716 382,214 378,043 399,270 369,529
Income Statement
Net interest income $ 30,321 $ 29,438 $ 27,965 $ 27,403 $ 26,990 $ 115,127 $ 106,236
Provision for loan and lease losses 1,077 1,333 (83 ) 291 1,059 2,618 4,326
Noninterest income 15,536 15,584 14,785 13,227 13,248 59,132 54,039
Noninterest expense 31,056 28,184 28,495 26,660 25,087 114,395 101,745
Income tax expense 19,924 4,766 4,905 4,635 4,684 34,230 18,168
Net income (6,200 ) 10,739 9,433 9,044 9,408 23,016 36,036
Basic earnings per share (0.35 ) 0.63 0.56 0.53 0.56 1.34 2.14
Diluted earnings per share (0.35 ) 0.62 0.55 0.53 0.55 1.32 2.12
Net income (core) (1) 11,255 11,245 10,236 9,375 9,402 42,111 36,086
Basic earnings per share (core) (1) 0.64 0.66 0.60 0.55 0.56 2.46 2.14
Diluted earnings per share (core) (1) 0.63 0.65 0.59 0.55 0.55 2.42 2.12
Cash dividends paid per share 0.22 0.22 0.21 0.21 0.21 0.86 0.82
Profitability Indicators
Return on average assets -0.68 % 1.24 % 1.14 % 1.13 % 1.16 % 0.67 % 1.16 %
Return on average equity -5.75 % 10.72 % 9.71 % 9.60 % 9.90 % 5.76 % 9.75 %
Return on tangible equity(1) -8.03 % 16.52 % 15.06 % 14.96 % 15.68 % 9.23 % 15.79 %
Return on average assets (core)(1) 1.23 % 1.31 % 1.23 % 1.17 % 1.16 % 1.23 % 1.16 %
Tax-equivalent net interest margin 3.62 % 3.71 % 3.68 % 3.74 % 3.65 % 3.69 % 3.76 %
Efficiency ratio(1) 58.64 % 59.30 % 62.16 % 62.66 % 60.30 % 60.61 % 61.27 %
Share Data
Closing share price $ 44.20 $ 43.80 $ 42.50 $ 39.50 $ 42.15
Book value per common share $ 26.19 $ 23.57 $ 23.25 $ 22.87 $ 22.50
Tangible book value per common share $ 15.98 $ 16.03 $ 15.64 $ 15.53 $ 15.11
Price / book value 168.74 % 185.82 % 182.81 % 172.71 % 187.34 %
Price / tangible book value 276.53 % 273.19 % 271.69 % 254.41 % 278.96 %
Weighted average diluted shares outstanding 17,632,701 17,253,982 17,232,767 17,182,689 17,164,675 17,381,232 17,028,122
Shares outstanding, end of period 20,161,795 17,050,151 16,989,849 16,969,451 16,939,715
Wealth Management Information:
Wealth assets under mgmt, administration, supervision and brokerage (2) $ 12,968,738 $ 12,431,370 $ 12,050,555 $ 11,725,460 $ 11,328,457
Fees for wealth management services $ 9,974 $ 9,651 $ 9,807 $ 9,303 $ 9,327
Capital Ratios
Bryn Mawr Trust Company
Tier I capital to risk weighted assets (“RWA”) 11.10 % 10.78 % 10.29 % 10.58 % 10.50 %
Total (Tier II) capital to RWA 11.64 % 11.42 % 10.90 % 11.25 % 11.19 %
Tier I leverage ratio 9.02 % 8.79 % 8.76 % 8.83 % 8.73 %
Tangible equity ratio (1) 8.67 % 8.46 % 8.24 % 8.46 % 7.85 %
Common equity Tier I capital to RWA 11.10 % 10.78 % 10.29 % 10.58 % 10.50 %
Bryn Mawr Bank Corporation
Tier I capital to RWA 10.36 % 10.50 % 10.10 % 10.50 % 10.51 %
Total (Tier II) capital to RWA 13.85 % 12.23 % 11.79 % 12.30 % 12.35 %
Tier I leverage ratio 8.49 % 8.53 % 8.63 % 8.77 % 8.73 %
Tangible equity ratio (1) 7.61 % 8.16 % 8.03 % 8.32 % 7.76 %
Common equity Tier I capital to RWA 9.80 % 10.50 % 10.10 % 10.50 % 10.51 %
Asset Quality Indicators
Net loan and lease charge-offs (“NCO”s) $ 556 $ 728 $ 625 $ 670 $ 1,317 $ 1,909 $ 2,697
Nonperforming loans and leases (“NPL”s) $ 8,579 $ 4,472 $ 7,237 $ 7,329 $ 8,363
Other real estate owned (“OREO”) 1,554 865 1,122 978 1,017
Total nonperforming assets (“NPA”s) $ 10,133 $ 5,337 $ 8,359 $ 8,307 $ 9,380
Nonperforming loans and leases 30 or more days past due $ 6,983 $ 2,337 $ 4,076 $ 5,097 $ 6,072
Performing loans and leases 30 to 89 days past due 7,958 4,558 6,258 6,077 3,062
Performing loans and leases 90 or more days past due - - - - -
Total delinquent loans and leases $ 14,941 $ 6,895 $ 10,334 $ 11,174 $ 9,134
Delinquent loans and leases to total loans and leases 0.45 % 0.26 % 0.39 % 0.44 % 0.36 %
Delinquent performing loans and leases to total loans and leases 0.24 % 0.17 % 0.23 % 0.24 % 0.12 %
NCOs / average loans and leases (annualized) 0.08 % 0.11 % 0.10 % 0.11 % 0.21 % 0.07 % 0.11 %
NPLs / total portfolio loans and leases 0.26 % 0.17 % 0.27 % 0.29 % 0.33 %
NPAs / total loans and leases and OREO 0.31 % 0.20 % 0.31 % 0.32 % 0.37 %
NPAs / total assets 0.23 % 0.15 % 0.24 % 0.25 % 0.27 %
ALLL / NPLs 204.28 % 380.23 % 226.60 % 233.42 % 209.09 %
ALLL / portfolio loans 0.53 % 0.64 % 0.61 % 0.67 % 0.69 %
ALLL on originated loans and leases / Originated loans and leases (1) 0.70 % 0.70 % 0.68 % 0.75 % 0.78 %
(Total Allowance + Loan mark) / Total Gross portfolio loans and leases (1) 1.48 % 1.01 % 1.03 % 1.12 % 1.17 %
Troubled debt restructurings (“TDR”s) included in NPLs $ 3,289 $ 2,033 $ 2,470 $ 2,681 $ 2,632
TDRs in compliance with modified terms 5,800 6,597 6,148 6,492 6,395
Total TDRs $ 9,089 $ 8,630 $ 8,618 $ 9,173 $ 9,027
(1)Non-GAAP measure – see Appendix for Non-GAAP to GAAP reconciliation.
(2)Brokerage assets represent assets held at a registered broker dealer under a clearing agreement.

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

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

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

Bryn Mawr Bank Corporation
Detailed Income Statements (unaudited)
(dollars in thousands, except per share data)
For the Three Months Ended For the Twelve Months Ended
December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016
Interest income:
Interest and fees on loans and leases $ 32,245 $ 30,892 $ 29,143 $ 28,482 $ 28,230 $ 120,762 $ 110,536
Interest on cash and cash equivalents 37 36 35 66 53 174 168
Interest on investment securities 2,516 2,270 2,059 1,778 1,639 8,623 6,287
Total interest income 34,798 33,198 31,237 30,326 29,922 129,559 116,991
Interest expense:
Interest on deposits 2,739 2,198 1,983 1,828 1,780 8,748 5,833
Interest on short-term borrowings 579 547 237 27 22 1,390 93
Interest on FHLB advances and other borrowings 595 645 682 698 760 2,620 3,353
Interest on jr. subordinated debentures 46 - - - - 46 -
Interest on subordinated notes 518 370 370 370 370 1,628 1,476
Total interest expense 4,477 3,760 3,272 2,923 2,932 14,432 10,755
Net interest income 30,321 29,438 27,965 27,403 26,990 115,127 106,236
Provision for loan and lease losses (the “Provision”) 1,077 1,333 (83 ) 291 1,059 2,618 4,326
Net interest income after Provision 29,244 28,105 28,048 27,112 25,931 112,509 101,910
Noninterest income:
Fees for wealth management services 9,974 9,651 9,807 9,303 9,327 38,735 36,690
Insurance revenue 1,510 1,373 943 763 715 4,589 3,722
Capital markets revenue 600 843 953 - - 2,396 -
Service charges on deposits 655 676 630 647 688 2,608 2,791
Loan servicing and other fees 536 548 519 503 411 2,106 1,939
Net gain on sale of loans 493 799 520 629 607 2,441 3,048
Net gain (loss) on sale of investment securities available for sale 28 72 - 1 9 101 (77 )
Net (loss) gain on sale of other real estate owned (92 ) - (12 ) - - (104 ) (76 )
Dividends on FHLB and FRB stocks 290 217 218 214 309 939 1,063
Other operating income 1,542 1,405 1,207 1,167 1,182 5,321 4,868
Total noninterest income 15,536 15,584 14,785 13,227 13,248 59,132 53,968
Noninterest expense:
Salaries and wages 13,619 13,602 13,580 12,450 11,855 53,251 47,411
Employee benefits 2,787 2,631 2,475 2,559 2,207 10,452 9,548
Occupancy and bank premises 2,648 2,485 2,247 2,526 2,407 9,906 9,611
Furniture, fixtures and equipment 1,816 1,726 1,869 1,974 1,869 7,385 7,520
Advertising 386 277 405 386 391 1,454 1,381
Amortization of intangible assets 677 677 687 693 830 2,734 3,498
Impairment (recovery) of mortgage servicing rights (“MSRs”) (94 ) 3 43 3 (580 ) (45 ) 131
Due diligence, merger-related and merger integration expenses 3,507 850 1,236 511 - 6,104 -
Professional fees 769 739 1,049 711 963 3,268 3,659
Pennsylvania bank shares tax 16 317 297 664 (204 ) 1,294 1,749
Information technology 1,006 880 821 874 857 3,581 3,661
Other operating expenses 3,919 3,997 3,786 3,309 4,492 15,011 13,505
Total noninterest expense 31,056 28,184 28,495 26,660 25,087 114,395 101,674
Income before income taxes 13,724 15,505 14,338 13,679 14,092 57,246 54,204
Income tax expense 19,924 4,766 4,905 4,635 4,684 34,230 18,168
Net income $ (6,200 ) $ 10,739 $ 9,433 $ 9,044 $ 9,408 $ 23,016 $ 36,036
Per share data:
Weighted average shares outstanding 17,632,701 17,023,046 16,984,563 16,954,132 16,916,705 17,150,126 16,859,623
Dilutive common shares - 230,936 248,204 228,557 247,970 231,106 168,499
Weighted average diluted shares 17,632,701 17,253,982 17,232,767 17,182,689 17,164,675 17,381,232 17,028,122
Basic earnings (loss) per common share $ (0.35 ) $ 0.63 $ 0.56 $ 0.53 $ 0.56 $ 1.34 $ 2.14
Diluted earnings (loss) per common share $ (0.35 ) $ 0.62 $ 0.55 $ 0.53 $ 0.55 $ 1.32 $ 2.12
Dividend declared per share $ 0.22 $ 0.22 $ 0.21 $ 0.21 $ 0.21 $ 0.86 $ 0.82
Effective tax rate 145.18 % 30.74 % 34.21 % 33.88 % 33.24 % 59.79 % 33.52 %

Bryn Mawr Bank Corporation

Tax-Equivalent Net Interest Margin (unaudited)

(dollars in thousands, except per share data)

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

Interest Income (Expense) Effect Effect on Yield or Rate Interest Income (Expense) Effect Effect on Yield or Rate Interest Income (Expense) Effect Effect on Yield or Rate Interest Income (Expense) Effect Effect on Yield or Rate Interest Income (Expense) Effect Effect on Yield or Rate Interest Income (Expense) Effect Effect on Yield or Rate Interest Income (Expense) Effect Effect on Yield or Rate
Loans and leases $ 276 0.04 % $ 708 0.10 % $ 402 0.06 % $ 726 0.12 % $ 742 0.12 % $ 2,112 0.08 % $ 3,349 0.14 %
Retail time deposits (13 ) -0.01 % (15 ) -0.02 % (18 ) -0.02 % (19 ) -0.02 % (19 ) -0.02 % (65 ) -0.02 % (219 ) -0.08 %
Short-term borrowings - 0.00 % - 0.00 % - 0.00 % - 0.00 % - 0.00 % - 0.00 % (12 ) -0.03 %
Long-term FHLB advances and other borrowings (31 ) -0.09 % (30 ) -0.08 % (30 ) -0.07 % (30 ) -0.07 % (30 ) -0.06 % (121 ) -0.08 % (120 ) -0.05 %
Net interest income from fair value marks $ 320 $ 753 $ 450 $ 775 $ 791 $ 2,298 $ 3,700
Purchase accounting effect on tax-equivalent margin 0.04 % 0.09 % 0.06 % 0.11 % 0.11 % 0.07 % 0.13 %
* Average loans and leases include portfolio loans and leases, and loans held for sale. Non-accrual loans are also included in the average loan and leases balances.

Bryn Mawr Bank Corporation
Appendix – Non-GAAP to GAAP Reconciliations and Calculation of Non-GAAP Performance Measures (unaudited)
(dollars in thousands, except per share data)
Statement on Non-GAAP Measures: The Corporation believes the presentation of the following non-GAAP financial measures provides useful supplemental information that is essential to an investor’s proper understanding of the results of operations and financial condition of the Corporation. Management uses non-GAAP financial measures in its analysis of the Corporation’s performance. These non-GAAP measures should not be viewed as substitutes for the financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
As of or For the Three Months Ended As of or For the Twelve Months Ended
December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016
Reconciliation of Net Income to Net Income (core):
Net income (a GAAP measure) $ (6,200 ) $ 10,739 $ 9,433 $ 9,044 $ 9,408 $ 23,016 $ 36,036
Less: Tax-effected non-core noninterest income:
(Gain) loss on sale of investment securities available for sale (18 ) (47 ) - (1 ) (6 ) (66 ) 50
Add: Tax-effected non-core noninterest expense items:
Due diligence, merger-related and merger integration expenses 2,280 553 803 332 - 3,968 -
Add: One-time federal income tax expense related to re-measurement of net deferred tax asset due to tax reform legislation. 15,193 - - - - 15,193 -
Net income (core) (a non-GAAP measure) $ 11,255 $ 11,245 $ 10,236 $ 9,375 $ 9,402 $ 42,111 $ 36,086
Calculation of Basic and Diluted Earnings per Common Share (core):
Weighted average common shares outstanding 17,632,701 17,023,046 16,984,563 16,954,132 16,916,705 17,150,126 16,859,623
Dilutive common shares 231,038 230,936 248,204 228,557 247,970 231,106 177,491
Weighted average diluted shares 17,863,739 17,253,982 17,232,767 17,182,689 17,164,675 17,381,232 17,037,114
Basic earnings per common share (core) (a non-GAAP measure) $ 0.64 $ 0.66 $ 0.60 $ 0.55 $ 0.56 $ 2.46 $ 2.14
Diluted earnings per common share (core) (a non-GAAP measure) $ 0.63 $ 0.65 $ 0.59 $ 0.55 $ 0.55 $ 2.42 $ 2.12
Calculation of Return on Average Tangible Equity:
Net income (loss) $ (6,200 ) $ 10,739 $ 9,433 $ 9,044 $ 9,408 $ 23,016 $ 36,036
Add: Tax-effected amortization and impairment of intangible assets 440 440 447 450 540 1,777 2,274
Net tangible income (numerator) $ (5,760 ) $ 11,179 $ 9,880 $ 9,494 $ 9,948 $ 24,793 $ 38,310
Average shareholders’ equity $ 427,318 $ 397,357 $ 389,716 $ 382,214 $ 378,043 $ 399,270 $ 369,529
Less: Average goodwill and intangible assets (142,652 ) (128,917 ) (126,537 ) (124,884 ) (125,614 ) (130,791 ) (126,950 )
Net average tangible equity (denominator) $ 284,666 $ 268,440 $ 263,179 $ 257,330 $ 252,429 $ 268,479 $ 242,579
Return on tangible equity (a non-GAAP measure) -8.03 % 16.52 % 15.06 % 14.96 % 15.68 % 9.23 % 15.79 %
Calculation of Tangible Equity Ratio:
Total shareholders’ equity $ 528,119 $ 401,892 $ 394,977 $ 388,095 $ 381,127
Less: Goodwill and intangible assets (205,855 ) (128,534 ) (129,211 ) (124,629 ) (125,170 )
Net tangible equity (numerator) $ 322,264 $ 273,358 $ 265,766 $ 263,466 $ 255,957
Total assets $ 4,449,720 $ 3,476,821 $ 3,438,219 $ 3,292,617 $ 3,421,530
Less: Goodwill and intangible assets (205,855 ) (128,534 ) (129,211 ) (124,629 ) (125,170 )
Tangible assets (denominator) $ 4,243,865 $ 3,348,287 $ 3,309,008 $ 3,167,988 $ 3,296,360
Tangible equity ratio 7.59 % 8.16 % 8.03 % 8.32 % 7.76 %
Calculation of Return on Average Assets (core)
Return on average assets (GAAP) -0.68 % 1.25 % 1.12 % 1.13 % 1.16 % 0.67 % 1.16 %
Effect of adjustment to GAAP net income to core net income 1.90 % 0.06 % 0.10 % 0.04 % 0.00 % 0.56 % 0.00 %
Return on average assets (core) 1.23 % 1.31 % 1.22 % 1.17 % 1.16 % 1.23 % 1.16 %
Calculation of Efficiency Ratio:
Noninterest expense $ 31,056 $ 28,184 $ 28,495 $ 26,660 $ 25,087 $ 114,395 $ 101,745
Less: certain noninterest expense items*:
Amortization of intangibles (677 ) (677 ) (687 ) (693 ) (830 ) (2,734 ) (3,498 )
Due diligence, merger-related and merger integration expenses (3,507 ) (850 ) (1,236 ) (511 ) - (6,104 ) -
Noninterest expense (adjusted) (numerator) $ 26,872 $ 26,657 $ 26,572 $ 25,456 $ 24,257 $ 105,557 $ 98,247
Noninterest income $ 15,536 $ 15,584 $ 14,785 $ 13,227 $ 13,248 $ 59,132 $ 54,039
Less: non-core noninterest income items:
Loss (gain) on sale of investment securities available for sale (28 ) (72 ) - (2 ) (9 ) (101 ) 77
Noninterest income (core) $ 15,508 $ 15,512 $ 14,785 $ 13,225 $ 13,239 $ 59,031 $ 54,116
Net interest income 30,321 29,438 27,965 27,403 26,990 115,127 106,236
Noninterest income (core) and net interest income (denominator) $ 45,829 $ 44,950 $ 42,750 $ 40,628 $ 40,229 $ 174,158 $ 160,352
Efficiency ratio 58.64 % 59.30 % 62.16 % 62.66 % 60.30 % 60.61 % 61.27 %
* In calculating the Corporation’s efficiency ratio, which is used by Management to identify the cost of generating each dollar of core revenue, certain non-core income and expense items as

well as the amortization of intangible assets, are excluded.

Supplemental Loan and Allowance Information Used to Calculate Non-GAAP Measures
Total Allowance $ 17,525 $ 17,004 $ 16,399 $ 17,107 $ 17,486
Less: Allowance on acquired loans 50 47 25 38 28
Allowance on originated loans and leases $ 17,475 $ 16,957 $ 16,374 $ 17,069 $ 17,458
Total Allowance $ 17,525 $ 17,004 $ 16,399 $ 17,107 $ 17,486
Loan mark on acquired loans 31,627 10,223 11,084 11,544 12,286
Total Allowance + Loan mark $ 49,152 $ 27,227 $ 27,483 $ 28,651 $ 29,772
Total Portfolio loans and leases $ 3,285,857 $ 2,677,345 $ 2,666,651 $ 2,555,589 $ 2,535,425
Less: Originated loans and leases 2,487,295 2,433,054 2,409,964 2,286,814 2,240,987
Net acquired loans $ 798,562 $ 244,291 $ 256,687 $ 268,775 $ 294,438
Add: Loan mark on acquired loans 31,627 10,223 11,084 11,544 12,286
Gross acquired loans (excludes loan mark) $ 830,189 $ 254,514 $ 267,771 $ 280,319 $ 306,724
Originated loans and leases 2,487,295 2,433,054 2,409,964 2,286,814 2,240,987
Total Gross portfolio loans and leases $ 3,317,484 $ 2,687,568 $ 2,677,735 $ 2,567,133 $ 2,547,711

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

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