Document Contents

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<STREET1>801 LANCASTER AVE
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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________________________________________________

____________________________________________________________________________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarter ended March 31, 2020

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-35746

________________________________________________________________________________________

Bryn Mawr Bank Corporation

(Exact name of registrant as specified in its charter)

________________________________________________________________________________________

Pennsylvania

23-2434506

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
identification No.)

801 Lancaster Avenue,

Bryn Mawr,

Pennsylvania

19010

(Address of principal executive offices)

(Zip Code)

(Registrant’s telephone number, including area code)

(Former name, former address and fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of class	Trading Symbol	Name of exchange on which registered
Common Stock, $1 par value	BMTC	The NASDAQ Stock Market

________________________________________________________________________________

Indicate by checkmark whether the registrant (1) has filed all reports to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐

Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Classes						Outstanding at May 5, 2020
Common Stock, par value $1						19,926,126

BRYN MAWR BANK CORPORATION AND SUBSIDIARIES

QUARTER ENDED March 31, 2020

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

BRYN MAWR BANK CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets - Unaudited


(dollars in thousands)	March 31, 2020		December 31, 2019
Assets
Cash and due from banks	$	17,803	$	11,603
Interest bearing deposits with banks	69,239		42,328
Cash and cash equivalents	87,042		53,931
Investment securities available for sale, at fair value (amortized cost of $503,087 and $1,001,034 as of March 31, 2020 and December 31, 2019, respectively)	516,466		1,005,984
Investment securities held to maturity, at amortized cost (fair value of $13,788 and $12,661 as of March 31, 2020 and December 31, 2019, respectively)	13,369		12,577
Investment securities, trading	7,757		8,621
Loans held for sale	2,785		4,249
Portfolio loans and leases, originated	3,424,601		3,320,816
Portfolio loans and leases, acquired	342,565		368,497
Total portfolio loans and leases	3,767,166		3,689,313
Less: Allowance for credit losses on originated loans and leases	(50,365)		(22,526)
Less: Allowance for credit losses on acquired loans and leases	(3,705)		(76)
Total allowance for credit losses on loans and leases	(54,070)		(22,602)
Net portfolio loans and leases	3,713,096		3,666,711
Premises and equipment, net	63,144		64,965
Operating lease right-of-use assets	40,157		40,961
Accrued interest receivable	12,017		12,482
Mortgage servicing rights	4,115		4,450
Bank owned life insurance	59,399		59,079
Federal Home Loan Bank stock	11,928		23,744
Goodwill	184,012		184,012
Intangible assets	18,213		19,131
Other investments	16,786		16,683
Other assets	172,747		85,679
Total assets	$	4,923,033	$	5,263,259
Liabilities
Deposits:
Noninterest-bearing	$	927,922	$	898,173
Interest-bearing	2,850,986		2,944,072
Total deposits	3,778,908		3,842,245

Short-term borrowings	162,045		493,219
Long-term FHLB advances	47,303		52,269
Subordinated notes	98,750		98,705
Junior subordinated debentures	21,798		21,753
Operating lease liabilities	44,482		45,258
Accrued interest payable	7,230		6,248
Other liabilities	169,338		91,335
Total liabilities	4,329,854		4,651,032
Shareholders' equity
Common stock, par value $1; authorized 100,000,000 shares; issued 24,655,362 and 24,650,051 shares as of March 31, 2020 and December 31, 2019, respectively and outstanding of 19,921,524 and 20,126,296 as of March 31, 2020 and December 31, 2019, respectively	24,655		24,650
Paid-in capital in excess of par value	379,495		378,606
Less: Common stock in treasury at cost - 4,733,838 and 4,523,755 shares as of March 31, 2020 and December 31, 2019, respectively	(88,540)		(81,174)
Accumulated other comprehensive income, net of tax	8,869		2,187
Retained earnings	269,395		288,653
Total Bryn Mawr Bank Corporation shareholders' equity	593,874		612,922
Noncontrolling interest	(695)		(695)
Total shareholders' equity	593,179		612,227
Total liabilities and shareholders' equity	$	4,923,033	$	5,263,259

The accompanying notes are an integral part of the Unaudited Consolidated Financial Statements.

BRYN MAWR BANK CORPORATION AND SUBSIDIARIES

Consolidated Statements of Income - Unaudited


	Three Months Ended March 31,
(dollars in thousands, except share and per share data)	2020		2019
Interest income:
Interest and fees on loans and leases	$	42,795	$	44,837
Interest on cash and cash equivalents	111		132
Interest on investment securities:
Taxable	3,176		3,450
Non-taxable	24		47
Dividends	1		2
Total interest income	46,107		48,468
Interest expense:
Interest on deposits	7,637		8,097
Interest on short-term borrowings	453		943
Interest on FHLB advances and other borrowings	244		278
Interest on subordinated notes	1,145		1,145
Interest on junior subordinated debentures	295		358
Total interest expense	9,774		10,821
Net interest income	36,333		37,647
Provision for credit losses on loans and leases	32,335		3,736
Net interest income after provision for credit losses on loans and leases	3,998		33,911
Noninterest income:
Fees for wealth management services	11,168		10,392
Insurance commissions	1,533		1,672
Capital markets revenue	2,361		2,219
Service charges on deposits	846		808
Loan servicing and other fees	461		609
Net gain on sale of loans	782		319

Net gain (loss) on sale of other real estate owned ("OREO")	148		(24)
Dividends on FHLB and FRB stock	444		411
Other operating income	557		2,847
Total noninterest income	18,300		19,253
Noninterest expenses:
Salaries and wages	16,989		20,901
Employee benefits	3,500		4,166

Occupancy and bank premises	3,015		3,252

Furniture, fixtures, and equipment	2,431		2,389
Advertising	401		415
Amortization of intangible assets	918		938

Professional fees	1,368		1,320
Pennsylvania bank shares tax	116		409
Data processing	1,394		1,320
Other operating expenses	6,286		4,614
Total noninterest expenses	36,418		39,724
(Loss) income before income taxes	(14,120)		13,440
Income tax (benefit) expense	(2,957)		2,764
Net (loss) income	$	(11,163)	$	10,676
Net loss attributable to noncontrolling interest	—		(1)
Net (loss) income attributable to Bryn Mawr Bank Corporation	$	(11,163)	$	10,677
Basic (loss) earnings per common share	$	(0.56)	$	0.53
Diluted (loss) earnings per common share	$	(0.56)	$	0.53
Dividends paid or accrued per common share	$	0.26	$	0.25
Weighted-average basic shares outstanding	20,053,159		20,168,498
Dilutive shares	—		103,163
Adjusted weighted-average diluted shares	20,053,159		20,271,661

The accompanying notes are an integral part of the Unaudited Consolidated Financial Statements.

BRYN MAWR BANK CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income - Unaudited


	Three Months Ended March 31,
(dollars in thousands)	2020		2019
Net (loss) income attributable to Bryn Mawr Bank Corporation	$	(11,163)	$	10,677

Other comprehensive income:
Net change in unrealized gains on investment securities available for sale:



Unrealized investment gains, net of tax expense of $1,770 and $1,121, respectively	6,659		4,219
Net change in unfunded pension liability:
Change in unfunded pension liability related to unrealized loss, prior service cost and transition obligation, net of tax expense of $6 and $4, respectively	23		16

Total other comprehensive income	6,682		4,235

Total comprehensive (loss) income	$	(4,481)	$	14,912

The accompanying notes are an integral part of the Unaudited Consolidated Financial Statements.

BRYN MAWR BANK CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows - Unaudited


	Three Months Ended March 31,
(dollars in thousands)	2020		2019
Operating activities:
Net (loss) income attributable to Bryn Mawr Bank Corporation	$	(11,163)	$	10,677
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Provision for credit losses on loans and leases	32,335		3,736
Depreciation of fixed assets	2,008		1,908
Amortization of operating lease right-of-use assets	804		914

Net amortization of investment premiums and discounts	807		543

Net gain on sale of loans	(782)		(319)
Stock based compensation	889		1,137
Amortization and net impairment of mortgage servicing rights	335		137
Net accretion of fair value adjustments	(949)		(1,018)
Amortization of intangible assets	918		938


Net (gain) loss on sale of OREO	(148)		24
Net increase in cash surrender value of bank owned life insurance ("BOLI")	(320)		(294)
Other, net	1,031		(642)
Loans originated for sale	(13,435)		(10,353)
Proceeds from loans sold	17,112		9,484
Provision for deferred income taxes	42		43


Change in income taxes payable/receivable, net


PART I -	FINANCIAL INFORMATION

ITEM 1.	Financial Statements (unaudited)

	Consolidated Financial Statements (unaudited)	Page 3

	Notes to Consolidated Financial Statements (unaudited)	Page 10

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	Page 50

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	Page 71

ITEM 4.	Controls and Procedures	Page 71

PART II -	OTHER INFORMATION	Page 72

ITEM 1.	Legal Proceedings	Page 72

ITEM 1A.	Risk Factors	Page 72

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	Page 75

ITEM 3.	Defaults Upon Senior Securities	Page 76

ITEM 4.	Mine Safety Disclosures	Page 76

ITEM 5.	Other Information	Page 76

ITEM 6.	Exhibits	Page 77

Section 1: 10-Q (10-Q)