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Section 1: 8-K (8-K)

bmtc-20200420
0000802681false00008026812020-04-202020-04-2000008026812020-01-162020-01-16

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________

FORM 8-K
__________________

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): April 20, 2020
__________________

Bryn Mawr Bank Corporation
(Exact Name of Registrant as specified in its charter)
__________________

Pennsylvania
001-35746
23-2434506
(State or other jurisdiction
(Commission File Number)
(I.R.S. Employer
of incorporation)
Identification No.)
801 Lancaster Avenue, Bryn Mawr, PA 19010
(Address of Principal Executive Offices, Including Zip Code)
Registrant's telephone number, including area code: 610-525-1700

None
(Former name or former address, if changed since last report)
__________________

Check the appropriate box below if the form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instructions A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of classTrading SymbolName of exchange on which registered
Common Stock, $1 par valueBMTCThe NASDAQ Stock Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

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. ☐


Item 2.02 Results of Operations and Financial Condition.
 
On April 20, 2020, Bryn Mawr Bank Corporation (the “Corporation”), the parent of The Bryn Mawr Trust Company, issued a Press Release announcing the results of operations for the quarter ended March 31, 2020. The Press Release is attached as Exhibit 99.1 hereto and incorporated herein by reference.
 
The information furnished in this Item 2.02, including Exhibit 99.1 attached hereto and incorporated by reference herein, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section. Furthermore, such information, including such Exhibit, shall not be deemed incorporated by reference into any of the Corporation’s reports or filings with the Securities and Exchange Commission, whether made before or after the date hereof, except as expressly set forth by specific reference in such report or filing.

Item 9.01  Financial Statements and Exhibits.
 
(d) Exhibit 99.1 – Press Release announcing the results of operations for the quarter ended March 31, 2020



SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
 
 BRYN MAWR BANK CORPORATION 
    
 By:/s/ Michael W. Harrington 
  Michael W. Harrington 
  Chief Financial Officer 
               
 
Date:    April 20, 2020





EXHIBIT INDEX
 
Exhibit 99.1
Exhibit 104    Cover Page Interactive Data File (embedded within the Inline XBRL document)


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Section 2: EX-99.1 (EX-99.1)

Document

Exhibit 99.1
403669978_bmtclogoa011.jpg
FOR RELEASE: IMMEDIATELYFrank Leto, President, CEO
FOR MORE INFORMATION CONTACT:610-581-4730
Mike Harrington, CFO
610-526-2466

Bryn Mawr Bank Corporation Reports First Quarter Earnings
Impacted by Increased Provision for Credit Losses Under CECL
Related to Economic Outlook Driven by the COVID-19 Pandemic,
Declares $0.26 Dividend

BRYN MAWR, Pa., April 20, 2020 - Driven by an increase in provision for credit losses on loans and leases reflecting the impact of the adverse economic outlook due to the COVID-19 pandemic on estimated lifetime losses under the new Current Expected Credit Loss standard (“CECL”), Bryn Mawr Bank Corporation (NASDAQ: BMTC) (the “Corporation”), parent of The Bryn Mawr Trust Company (the “Bank”), today reported a net loss of $11.2 million, or $(0.56) diluted earnings per share for the three months ended March 31, 2020, as compared to net income of $16.4 million, or $0.81 diluted earnings per share, for the three months ended December 31, 2019, and $10.7 million, or $0.53 diluted earnings per share, for the three months ended March 31, 2019.

As detailed in the appendix to this earnings release, management calculates core net income, a non-GAAP measure, which excludes one-time costs associated with our voluntary Years of Service Incentive Program. There were no meaningful non-core income or expense items for the three months ended March 31, 2020 or December 31, 2019. Core net income for the three months ended March 31, 2019 was $14.2 million, or $0.70 diluted earnings per share. A reconciliation of core net income and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release.

“As we all navigate the current challenges resulting from the COVID-19 pandemic, BMT remains focused on the safety of our people and providing our customers uninterrupted service. We are committed to assisting our small business community through our active participation in the SBA’s Paycheck Protection Program and our employees are working tirelessly to process applications and fund loans under the program,” commented Frank Leto, President and Chief Executive Officer, continuing, “The banking industry, under the new loan loss reserve guidelines, must take a forward-looking approach to the economy as a predictor of future loan losses. BMT’s historical loan losses have been very strong compared to our peers and credit quality did not materially deteriorate in the first quarter, however under this new guidance we must look out several years and reserve for potential losses now. This environment of uncertainly is expected to persist throughout 2020 and new economic data could indicate increases or reductions in our loan loss reserves. That said, the fundamentals of the Bank were strong as we entered this unprecedented time. Setting aside the provision for credit losses, we performed well in the first quarter and this speaks to our solid foundation supported by a diversified earnings profile, a strong capital base designed to withstand a stressed environment and robust sources of liquidity. This foundation coupled with our amazing team of professionals leave us well positioned to face any challenges and volatility from the economic environment,” Mr. Leto concluded.

On April 20, 2020, the Board of Directors of the Corporation declared a quarterly dividend of $0.26 per share, payable June 1, 2020 to shareholders of record as of April 30, 2020.

SIGNIFICANT ITEMS OF NOTE

Results of Operations – First Quarter 2020 Compared to Fourth Quarter 2019

A net loss of $11.2 million, or $(0.56) diluted earnings per share for the three months ended March 31, 2020 as compared to net income of $16.4 million, or $0.81 diluted earnings per share, for the three months ended
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December 31, 2019, was primarily the result of a $30.1 million increase in provision for credit losses on loans and leases, as calculated under the CECL framework, driven by the COVID-19 pandemic. Other factors impacting net income included a $348 thousand increase in net interest income and decreases of $5.0 million and $7.2 million in noninterest income and income tax expense, respectively, for the three months ended March 31, 2020 as compared to the three months ended December 31, 2019.

Net interest income for the three months ended March 31, 2020 was $36.3 million, an increase of $348 thousand over the linked quarter. Tax-equivalent net interest income for the three months ended March 31, 2020 was $36.4 million, an increase of $344 thousand over the linked quarter. Tax-equivalent net interest income for the first quarter of 2020 was positively impacted by the accretion of purchase accounting fair value marks of $949 thousand as compared to $1.1 million for the linked quarter. Excluding the effects of these purchase accounting fair value marks, the adjusted tax-equivalent net interest income for the three months ended March 31, 2020 was $35.5 million, an increase of $478 thousand over the linked quarter. A reconciliation of this and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release. Items contributing to the increase in tax-equivalent net interest income adjusted for purchase accounting included decreases of $1.1 million and $102 thousand in interest paid on deposits and interest expense on short-term borrowings, respectively, partially offset by decreases of $311 thousand and $274 thousand in tax-equivalent interest and fees earned on loans and leases and tax-equivalent interest income on available for sale investment securities, respectively, for the three months ended March 31, 2020 as compared to the linked quarter ended December 31, 2019.

Interest expense on deposits for the three months ended March 31, 2020 decreased $1.0 million over the linked quarter. The decrease was primarily due to a 15 basis point decrease in the tax-equivalent rate paid on average interest-bearing deposits for the three months ended March 31, 2020 as compared to the linked quarter. The effect of the decrease in the tax-equivalent rate paid was partially offset by an increase of $54.7 million in average interest-bearing deposits for the three months ended March 31, 2020 as compared to the linked quarter.

Interest expense on short-term borrowings for the three months ended March 31, 2020 decreased $102 thousand over the linked quarter. The decrease was primarily due to a 51 basis point decrease in the rate paid as compared to the linked quarter. The effect of the decrease in rate paid was partially offset by an increase of $19.0 million in average short-term borrowings as compared to the linked quarter.

Tax-equivalent interest and fees earned on loans and leases for the three months ended March 31, 2020 decreased $428 thousand as compared to the linked quarter. The decrease was primarily due to a 16 basis point decrease in the tax-equivalent yield on average loans and leases, driven by the current interest rate environment, for the three months ended March 31, 2020 as compared to the linked quarter. The effect of the decrease in the tax-equivalent yield was partially offset by an increase of $139.8 million in average loans and leases for the three months ended March 31, 2020 as compared to the linked quarter.

Tax-equivalent interest income on available for sale investment securities for the three months ended March 31, 2020 decreased $274 thousand as compared to the linked quarter. Average available for sale investment securities decreased $51.1 million over the linked quarter and experienced a six basis point increase in the tax-equivalent yield.

The tax-equivalent net interest margin was 3.38% for the three months ended March 31, 2020 as compared to 3.36% for the linked quarter. Adjusting for the impact of the accretion of purchase accounting fair value marks, the adjusted tax-equivalent net interest margin was 3.29% for the three months ended March 31, 2020 as compared to 3.26% for the linked quarter. A reconciliation of this and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release.

Noninterest income of $18.3 million for the three months ended March 31, 2020 represented a $5.0 million decrease over the linked quarter. The decrease was primarily due to decreases of $3.1 million, $1.6 million, and $504 thousand in capital markets revenue, other operating income, and fees for wealth management services, respectively. The decrease in capital markets revenue was primarily due to higher volume and size of interest rate swap transactions with commercial loan customers for the three months ended December 31, 2019 as compared to the current quarter. The $1.6 million decrease in other operating income was primarily due to a $978 thousand loss on trading securities recorded in the first quarter of 2020 due to market fluctuations
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affecting the Corporation's executive and director supplemental retirement plan assets. The decrease in fees for wealth management services was primarily related to the impact of the decline in the market value of wealth assets under management, administration, supervision and brokerage (“wealth assets”) resulting from the volatility in the markets seen in the first quarter of 2020.

Noninterest expense of $36.4 million for the three months ended March 31, 2020 was relatively unchanged, decreasing $12 thousand, as compared to the linked quarter. Decreases of $1.7 million, $386 thousand, $198 thousand, and $191 thousand in salaries and wages, professional fees, advertising expense, and occupancy and bank premises expense, respectively, were partially offset by increases of $1.5 million, $815 thousand, and $218 thousand in other operating expense, employee benefits and impairment of mortgage servicing rights, respectively. Included in other operating expense for the three months ended March 31, 2020 was a $3.0 million provision for credit losses on off-balance sheet credit exposures, an increase of $2.8 million as compared to the three months ended December 31, 2019, primarily driven by the adverse economic impacts of the COVID-19 pandemic as well as the Corporation's adoption of CECL.

The provision for credit losses on loans and leases of $32.3 million for the three months ended March 31, 2020, which was calculated under CECL, effective January 1, 2020, increased $30.1 million as compared to $2.2 million for the three months ended December 31, 2019. The significant increase was driven by the current and forward-looking adverse economic impacts of the COVID-19 pandemic included in the estimation of expected credit losses on loans and leases. Net loan and lease charge-offs for the first quarter of 2020 totaled $4.1 million as compared to $400 thousand for the fourth quarter of 2019. The increase in net charge-offs was primarily due to an increase of $1.8 million in charge-offs on leases during the three months ended March 31, 2020, and a $1.1 million recovery on a commercial real estate loan during the three months ended December 31, 2019.

The effective tax rate for the first quarter of 2020 increased to 20.94% as compared to 20.41% for the fourth quarter of 2019.

Results of Operations – First Quarter 2020 Compared to First Quarter 2019

A net loss of $11.2 million, or $(0.56) diluted earnings per share for the three months ended March 31, 2020 as compared to net income of $10.7 million, or $0.53 diluted earnings per share, for the three months ended March 31, 2019, was primarily the result of a $28.6 million increase in provision for credit losses on loans and leases, as calculated under the CECL framework, driven by the COVID-19 pandemic. Other factors impacting net income included decreases of $1.3 million, $953 thousand, $3.3 million, and $5.7 million in net interest income, noninterest income, noninterest expense, and income tax expense, respectively, for the three months ended March 31, 2020 as compared to the three months ended March 31, 2019.

Net interest income for the three months ended March 31, 2020 was $36.3 million, a decrease of $1.3 million as compared to the same period in 2019. Tax-equivalent net interest income for the three months ended March 31, 2020 was $36.4 million, a decrease of $1.3 million as compared to the same period in 2019. Tax-equivalent net interest income for the first quarter of 2020 was positively impacted by the accretion of purchase accounting fair value marks of $949 thousand as compared to $2.1 million for the same period in 2019. Excluding the effects of these purchase accounting fair value marks, the adjusted tax-equivalent net interest income for the three months ended March 31, 2020 was $35.5 million, a decrease of $141 thousand as compared to the same period in 2019. A reconciliation of this and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release. Items contributing to the decrease in tax-equivalent net interest income adjusted for purchase accounting included decreases of $973 thousand and $325 thousand in tax-equivalent interest and fees earned on loans and leases and tax-equivalent interest income on available for sale investment securities, respectively, partially offset by decreases of $564 thousand and $490 thousand in interest paid on deposits and interest expense on short-term borrowings, respectively, for the three months ended March 31, 2020 as compared to the same period in 2019.

Tax-equivalent interest and fees earned on loans and leases for the three months ended March 31, 2020 decreased $2.1 million as compared to the same period in 2019. The decrease was primarily due to a 62 basis point decrease in the tax-equivalent yield on average loans and leases, driven by the current interest rate environment, for the three months ended March 31, 2020 as compared to the same period in 2019. The effect of the decrease in the tax-equivalent yield was partially offset by an increase of $260.6 million in average loans and leases for the three months ended March 31, 2020 as compared to same period in 2019.

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Tax-equivalent interest income on available for sale investment securities for the three months ended March 31, 2020 decreased $325 thousand as compared to the same period in 2019. Average available for sale investment securities decreased by $32.3 million and experienced an 11 basis point tax-equivalent yield increase as compared to the same period in 2019.

Interest expense on deposits for the three months ended March 31, 2020 decreased $460 thousand as compared to the same period in 2019. The decrease was primarily due to a 15 basis point decrease in the tax-equivalent rate paid on average interest-bearing deposits for the three months ended March 31, 2020 as compared to the same period in 2019. The effect of the decrease in the tax-equivalent rate paid was partially offset by an increase of $179.5 million in average interest-bearing deposits for the three months ended March 31, 2020 as compared to the same period in 2019.

Interest expense on short-term borrowings for the three months ended March 31, 2020 decreased $490 thousand as compared to the same period in 2019. Average short-term borrowings decreased $17.1 million coupled with a 113 basis point decrease in the rate paid for the three months ended March 31, 2020 as compared to the same period in 2019.

The tax-equivalent net interest margin was 3.38% for the three months ended March 31, 2020 as compared to 3.75% for the same period in 2019. Adjusting for the impacts of the accretion of purchase accounting fair value marks, the adjusted tax-equivalent net interest margin was 3.29% and 3.54% for three months ended March 31, 2020 and 2019, respectively. The main drivers for the decrease in the adjusted tax-equivalent net interest margin were the rate and volume changes of interest-bearing assets and liabilities as discussed in the above bullet points. A reconciliation of this and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release.

Noninterest income of $18.3 million for the three months ended March 31, 2020 represented a $953 thousand decrease over the same period in 2019. The decrease was primarily due to decreases of $2.3 million, $148 thousand, and $139 thousand in other operating income, loan servicing and other fees, and insurance commissions, respectively, partially offset by increases of $776 thousand, $463 thousand, $172 thousand, and $142 thousand in fees for wealth management services, net gain on sale of loans, net gain on sale of other real estate owned, and capital markets revenue, respectively. The $2.3 million decrease in other operating income was primarily due to a $978 thousand loss on trading securities recorded in the first quarter of 2020, as compared to a $732 thousand gain on trading securities recorded in the first quarter of 2019, due to market fluctuations affecting the Corporation's executive and director supplemental retirement plan assets.

Noninterest expense of $36.4 million for the three months ended March 31, 2020 represented a $3.3 million decrease over the same period in 2019. Contributing to the decrease were decreases of $3.9 million, $666 thousand, $293 thousand, and $237 thousand in salaries and wages, employee benefits, Pennsylvania bank shares tax expense, and occupancy and bank premises expense, respectively, partially offset by an increase of $1.5 million in other operating expense. The decreases in salaries and wages and employee benefits was largely driven by the $4.5 million one-time expense from the voluntary Years of Service Incentive Program recorded in the first quarter of 2019. Included in other operating expense for the three months ended March 31, 2020 was a $3.0 million provision for credit losses on off-balance sheet credit exposures, an increase of $3.1 million as compared to the same period in 2019, primarily driven by the adverse economic impacts of the COVID-19 pandemic as well as the Corporation’s adoption of CECL.

The provision for credit losses on loans and leases of $32.3 million for the three months ended March 31, 2020, which was calculated under CECL, effective January 1, 2020, increased $28.6 million as compared to $3.7 million for the three months ended March 31, 2019. The significant increase was driven by the current and forward-looking adverse economic impacts of the COVID-19 pandemic included in the estimation of expected credit losses on loans and leases. Net loan and lease charge-offs for the first quarter of 2020 totaled $4.1 million as compared to $2.5 million for the first quarter of 2019.

The effective tax rate for the first quarter of 2020 increased to 20.94% as compared to 20.57% for the first quarter of 2019.

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Financial Condition – March 31, 2020 Compared to December 31, 2019

Total assets as of March 31, 2020 were $4.92 billion, a decrease of $340.2 million from December 31, 2019. The decrease was primarily due to the $489.5 million decrease in available for sale investment securities discussed in the bullet point below, partially offset by the $77.9 million increase in portfolio loans and leases discussed in the bullet point below and $87.1 million increase in other assets driven by an $86.0 million increase in the fair value of interest rate swaps.

Available for sale investment securities as of March 31, 2020 totaled $516.5 million, a decrease of $489.5 million from December 31, 2019. The decrease was primarily due to the maturing, in January 2020, of $500.0 million of short-term U.S. Treasury securities included on the balance sheet as of December 31, 2019.

Total portfolio loans and leases of $3.77 billion as of March 31, 2020 increased by $77.9 million from December 31, 2019, an increase of 2.1%. Increases of $59.1 million, $18.9 million, and $17.2 million in commercial and industrial loans, construction loans, and commercial real estate loans (non-owner occupied), respectively, were partially offset by decreases of $15.0 million and $11.3 million in home equity lines of credit and consumer loans, respectively. In conjunction with the adoption of CECL, the Corporation has revised its portfolio segmentation to align with the methodology applied in determining the allowance for credit losses (“ACL”) for loans and leases under CECL, which is based on Federal call report codes which classify loans based on the primary collateral supporting the loan. Portfolio segmentation prior to the adoption of CECL was based on product type or purpose. As such, certain reclassifications were made to conform previous years to the current year's presentation.

The ACL on loans and leases was $22.6 million as of December 31, 2019. Effective January 1, 2020, the Corporation adopted CECL and recognized an increase in the ACL on loans and leases of approximately $3.2 million, as a cumulative effect of a change in accounting principle, with a corresponding decrease, net of tax, in retained earnings. The ACL on loans and leases was $54.1 million as of March 31, 2019, an increase of $31.5 million as compared to December 31, 2019. The significant increase was driven by the current and forward-looking adverse economic impacts of the COVID-19 pandemic included in the estimation of expected credit losses on loans and leases as of March 31, 2020 as compared to our initial adoption of CECL.

Deposits of $3.78 billion as of March 31, 2020 decreased $63.3 million from December 31, 2019. A decrease of $194.8 million in interest-bearing demand accounts was partially offset by increases of $29.7 million, $27.5 million, $27.3 million, $24.2 million, and $21.0 million in noninterest bearing deposits, money market accounts, savings accounts, wholesale time deposits, and wholesale non-maturity deposits, respectively.

Borrowings of $329.9 million as of March 31, 2020, which include short-term borrowings, long-term FHLB advances, subordinated notes and junior subordinated debentures decreased $336.1 million from December 31, 2019, primarily due to a decrease of $331.2 million in short-term borrowings.

Wealth assets totaled $15.59 billion as of March 31, 2020, a decrease of $954.3 million from December 31, 2019. The decrease in wealth assets was primarily the result of the volatility in the markets experienced in the first quarter of 2020, partially offset by additions through new business during the quarter. As of March 31, 2020, wealth assets consisted of $9.59 billion of wealth assets where fees are set at fixed amounts, an increase of $20.7 million from December 31, 2019, and $6.00 billion of wealth assets where fees are predominantly determined based on the market value of the assets held in their accounts, a decrease of $975.0 million from December 31, 2019.

The capital ratios for the Bank and the Corporation, as of March 31, 2020, as shown in the attached tables, indicate regulatory capital levels in excess of the regulatory minimums and the levels necessary for the Bank to be considered “well capitalized.” In March 2020, the U.S. banking agencies issued an interim final rule that provides banking organizations with an alternative option to delay for two years an estimate of CECL’s effect on regulatory capital, relative to the incurred loss methodology’s effect on regulatory capital, followed by a three-year transition period. The March 31, 2020 ratios reflect the Corporation's planned election of the five-year transition provision.




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OTHER MATTERS

Given the uncertainty and potential volatility of the COVID-19 pandemic on our business and operations in 2020, the Corporation is withdrawing the 2020 targets and financial outlook that were issued, and furnished to the Securities and Exchange Commission on Form 8-K, on February 12, 2020.

EARNINGS CONFERENCE CALL

The Corporation will hold an earnings conference call at 8:30 a.m. Eastern Time on Tuesday, April 21, 2020. Interested parties may participate by calling 1-888-317-6016. A taped replay of the conference call will be available one hour after the conclusion of the call and will remain available through 9:00 a.m. Eastern Time on Thursday, May 21, 2020. This recording may be obtained by calling 1-877-344-7529, referring to conference number 10141874.

The Corporation will simultaneously broadcast the earnings conference call live over the Internet through a webcast on the investor relations portion of the Corporation’s website. To access the call via the Internet, please visit the website at http://services.choruscall.com/links/bmtc200421.html. An online archive of the webcast will be available within one hour of the conclusion of the earnings conference call.

The Corporation’s decision to hold an earnings conference call for the first quarter of 2020 is not indicative of the Corporation’s future plans with respect to earnings conference calls, and decisions regarding whether to continue holding earnings conference calls will be made at a future date.

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. The COVID-19 pandemic is adversely affecting us, our customers, counterparties, employees, and third-party service providers, and the ultimate extent of the impacts on our business, financial position, results of operations, liquidity, and prospects is uncertain. Continued deterioration in general business and economic conditions, including further increases in unemployment rates, or turbulence in domestic or global financial markets could adversely affect our revenues and the values of our assets and liabilities, reduce the availability of funding, lead to a tightening of credit, and further increase stock price volatility. In addition, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response to COVID-19, could affect us in substantial and unpredictable ways. Other factors include, among others, 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 or accounting standards, including ASU 2016-13 (Topic 326), “Measurement of Credit Losses on Financial Instruments,” commonly referenced as the Current Expected Credit Loss model, which has changed how we estimate credit losses and may result in further increases in the required level of our allowance for credit losses; unanticipated regulatory or legal proceedings, outcomes of litigation or other contingencies; cybersecurity events;
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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; uncertainty regarding the future of LIBOR; the impact of public health issues and pandemics, and their effects on the economic and business environments in which we operate, the effect of the COVID-19 pandemic, including on our credit quality and business operations, as well as its impact on general economic and financial market conditions; and other factors as described in our securities filings with the SEC. All forward-looking statements and information set forth herein are based on Corporation 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 SEC, including our most recent Annual Report on Form 10-K, as updated by our quarterly or other reports subsequently filed with the SEC.

# # # #

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Bryn Mawr Bank Corporation
Summary Financial Information (unaudited)
(dollars in thousands, except per share data)

 As of or For the Three Months Ended
 March 31,
2020
December 31,
2019
September 30,
2019
June 30,
2019
March 31,
2019
Consolidated Balance Sheet (selected items)
Interest-bearing deposits with banks$69,239  $42,328  $86,158  $49,643  $29,449  
Investment securities537,592  1,027,182  625,452  606,844  578,629  
Loans held for sale2,785  4,249  5,767  6,333  2,884  
Portfolio loans and leases3,767,166  3,689,313  3,540,747  3,534,665  3,523,514  
Allowance for credit losses ("ACL") on loans and leases(54,070) (22,602) (20,777) (21,182) (20,616) 
Goodwill and other intangible assets202,225  203,143  204,096  205,050  206,006  
Total assets4,923,033  5,263,259  4,828,641  4,736,565  4,631,993  
Deposits - interest-bearing2,850,986  2,944,072  2,794,079  2,691,502  2,755,307  
Deposits - non-interest-bearing927,922  898,173  904,409  940,911  882,310  
Short-term borrowings162,045  493,219  203,471  207,828  124,214  
Long-term FHLB advances47,303  52,269  44,735  47,941  55,407  
Subordinated notes98,750  98,705  98,660  98,616  98,571  
Jr. subordinated debentures21,798  21,753  21,709  21,665  21,622  
Total liabilities4,329,854  4,651,032  4,227,706  4,146,410  4,056,886  
Total shareholders' equity593,179  612,227  600,935  590,155  575,107  
Average Balance Sheet (selected items)
Interest-bearing deposits with banks50,330  66,060  48,597  37,843  32,742  
Investment securities542,876  593,289  622,336  587,518  569,915  
Loans held for sale2,319  4,160  4,375  3,353  1,214  
Portfolio loans and leases3,736,067  3,594,449  3,528,548  3,520,866  3,476,525  
Total interest-earning assets4,331,592  4,257,958  4,203,856  4,149,580  4,080,396  
Goodwill and intangible assets202,760  203,663  204,637  205,593  206,716  
Total assets4,844,918  4,775,407  4,760,074  4,651,625  4,545,129  
Deposits - interest-bearing2,853,712  2,799,050  2,776,226  2,794,854  2,674,194  
Short-term borrowings140,585  121,612  169,985  68,529  157,652  
Long-term FHLB advances47,335  53,443  45,698  52,397  55,385  
Subordinated notes98,725  98,681  98,634  98,587  98,542  
Jr. subordinated debentures21,768  21,726  21,680  21,637  21,595  
Total interest-bearing liabilities3,162,125  3,094,512  3,112,223  3,036,004  3,007,368  
Total liabilities4,229,908  4,168,899  4,164,763  4,070,160  3,973,043  
Total shareholders' equity615,010  606,508  595,311  581,465  572,086  

8

Bryn Mawr Bank Corporation
Summary Financial Information (unaudited)
(dollars in thousands, except per share data)
 As of or For the Three Months Ended
 March 31,
2020
December 31,
2019
September 30,
2019
June 30,
2019
March 31,
2019
Income Statement
Net interest income$36,333  $35,985  $37,398  $36,611  $37,647  
Provision for loan and lease losses32,335  2,225  919  1,627  3,736  
Noninterest income18,300  23,255  19,455  20,221  19,253  
Noninterest expense36,418  36,430  35,173  35,188  39,724  
Income tax (benefit) expense(2,957) 4,202  4,402  4,239  2,764  
Net (loss) income(11,163) 16,383  16,359  15,778  10,676  
Net loss attributable to noncontrolling interest—  (1) (1) (7) (1) 
Net (loss) income attributable to Bryn Mawr Bank Corporation(11,163) 16,384  16,360  15,785  10,677  
Basic earnings per share(0.56) 0.81  0.81  0.78  0.53  
Diluted earnings per share(0.56) 0.81  0.81  0.78  0.53  
Net (loss) income (core) (1)
(11,163) 16,384  16,360  15,785  14,230  
Basic earnings per share (core) (1)
(0.56) 0.81  0.81  0.78  0.71  
Diluted earnings per share (core) (1)
(0.56) 0.81  0.81  0.78  0.70  
Dividends paid or accrued per share0.26  0.26  0.26  0.25  0.25  
Profitability Indicators
Return on average assets(0.93)%1.36 %1.36 %1.36 %0.95 %
Return on average equity(7.30)%10.72 %10.90 %10.89 %7.57 %
Return on tangible equity(1)
(10.17)%16.85 %17.35 %17.62 %12.65 %
Return on tangible equity (core)(1)
(10.17)%16.85 %17.35 %17.62 %16.59 %
Return on average assets (core)(1)
(0.93)%1.36 %1.36 %1.36 %1.27 %
Return on average equity (core)(1)
(7.30)%10.72 %10.90 %10.89 %10.09 %
Tax-equivalent net interest margin3.38 %3.36 %3.54 %3.55 %3.75 %
Efficiency ratio(1)
64.98 %59.89 %60.19 %60.23 %60.26 %
Share Data
Closing share price$28.38  $41.24  $36.51  $37.32  $36.13  
Book value per common share$29.78  $30.42  $29.86  $29.31  $28.52  
Tangible book value per common share$19.66  $20.36  $19.75  $19.16  $18.34  
Price / book value95.30 %135.57 %122.27 %127.33 %126.68 %
Price / tangible book value144.35 %202.55 %184.86 %194.78 %197.00 %
Weighted average diluted shares outstanding20,053,159  20,213,008  20,208,630  20,244,409  20,271,661  
Shares outstanding, end of period19,921,524  20,126,296  20,124,193  20,131,854  20,167,729  
Wealth Management Information:
Wealth assets under mgmt, administration, supervision and brokerage (2)
$15,593,732  $16,548,060  $15,609,786  $14,815,298  $14,736,512  
Fees for wealth management services$11,168  $11,672  $10,826  $11,510  $10,392  






9

Bryn Mawr Bank Corporation
Summary Financial Information (unaudited)
(dollars in thousands, except per share data)
 As of or For the Three Months Ended
 March 31,
2020
December 31,
2019
September 30,
2019
June 30,
2019
March 31,
2019
Capital Ratios(3)
Bryn Mawr Trust Company ("BMTC")
Tier I capital to risk weighted assets ("RWA")11.12 %11.47 %12.17 %11.83 %11.30 %
Total capital to RWA12.35 %12.09 %12.75 %12.42 %11.87 %
Tier I leverage ratio9.12 %9.37 %9.75 %9.61 %9.48 %
Tangible equity ratio (1)
8.98 %8.58 %9.75 %9.58 %9.34 %
Common equity Tier I capital to RWA11.12 %11.47 %12.17 %11.83 %11.30 %
Bryn Mawr Bank Corporation ("BMBC")
Tier I capital to RWA10.82 %11.42 %11.33 %11.12 %10.72 %
Total capital to RWA14.64 %14.69 %14.61 %14.44 %14.00 %
Tier I leverage ratio8.88 %9.33 %9.07 %9.04 %8.99 %
Tangible equity ratio (1)
8.30 %8.10 %8.60 %8.51 %8.35 %
Common equity Tier I capital to RWA10.27 %10.86 %10.75 %10.54 %10.14 %
Asset Quality Indicators
Net loan and lease charge-offs ("NCO"s)$4,073  $400  $1,324  $1,061  $2,546  
Nonperforming loans and leases ("NPL"s)$7,557  $10,648  $14,119  $12,179  $19,283  
Other real estate owned ("OREO")—  —  72  155  84  
Total nonperforming assets ("NPA"s)$7,557  $10,648  $14,191  $12,334  $19,367  
Nonperforming loans and leases 30 or more days past due$3,380  $6,314  $4,940  $8,224  $8,489  
Performing loans and leases 30 to 89 days past due19,930  7,196  5,273  9,466  6,432  
Performing loans and leases 90 or more days past due—  —  —  —  —  
Total delinquent loans and leases$23,310  $13,510  $10,213  $17,690  $14,921  
Delinquent loans and leases to total loans and leases0.62 %0.37 %0.29 %0.50 %0.42 %
Delinquent performing loans and leases to total loans and leases0.53 %0.19 %0.15 %0.27 %0.18 %
NCOs / average loans and leases (annualized)0.44 %0.04 %0.15 %0.12 %0.30 %
NPLs / total portfolio loans and leases0.20 %0.29 %0.40 %0.34 %0.55 %
NPAs / total loans and leases and OREO0.20 %0.29 %0.40 %0.35 %0.55 %
NPAs / total assets0.15 %0.20 %0.29 %0.26 %0.42 %
ACL / NPLs715.50 %212.27 %147.16 %173.92 %106.91 %
ACL / portfolio loans1.44 %0.61 %0.59 %0.60 %0.59 %
ACL for originated loans and leases / Originated loans and leases (1)
1.47 %0.68 %0.66 %0.68 %0.68 %
(Total ACL + Loan mark) / Total Gross portfolio loans and leases (1)
1.68 %0.91 %0.92 %1.00 %1.03 %
Troubled debt restructurings ("TDR"s) included in NPLs$3,248  $3,018  $5,755  $4,190  $4,057  
TDRs in compliance with modified terms4,852  5,071  5,069  5,141  5,149  
Total TDRs$8,100  $8,089  $10,824  $9,331  $9,206  
(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.
(3)Capital Ratios for the current quarter are to be considered preliminary until the Call Reports are filed. The March 31, 2020 ratios reflect the Corporation’s planned election of a five-year transition provision to delay for two years the full impact of CECL on regulatory capital, followed by a three-year transition period.

10

Bryn Mawr Bank Corporation
Detailed Balance Sheets (unaudited)
(dollars in thousands)
March 31,
2020
December 31,
2019
September 30,
2019
June 30,
2019
March 31,
2019
Assets
Cash and due from banks$17,803  $11,603  $8,582  $13,742  $13,656  
Interest-bearing deposits with banks69,239  42,328  86,158  49,643  29,449  
  Cash and cash equivalents87,042  53,931  94,740  63,385  43,105  
Investment securities, available for sale516,466  1,005,984  604,181  588,119  559,983  
Investment securities, held to maturity13,369  12,577  12,947  10,209  10,457  
Investment securities, trading7,757  8,621  8,324  8,516  8,189  
Loans held for sale2,785  4,249  5,767  6,333  2,884  
Portfolio loans and leases, originated3,424,601  3,320,816  3,137,769  3,088,849  3,032,270  
Portfolio loans and leases, acquired342,565  368,497  402,978  445,816  491,244  
  Total portfolio loans and leases3,767,166  3,689,313  3,540,747  3,534,665  3,523,514  
Less: Allowance for credit losses on originated loans and leases(50,365) (22,526) (20,675) (21,076) (20,519) 
Less: Allowance for credit losses on acquired loans and leases(3,705) (76) (102) (106) (97) 
  Total allowance for credit losses on loans and lease(54,070) (22,602) (20,777) (21,182) (20,616) 
    Net portfolio loans and leases3,713,096  3,666,711  3,519,970  3,513,483  3,502,898  
Premises and equipment63,144  64,965  66,439  68,092  67,279  
Operating lease right-of-use assets40,157  40,961  42,200  43,116  43,985  
Accrued interest receivable12,017  12,482  12,746  13,312  13,123  
Mortgage servicing rights4,115  4,450  4,580  4,744  4,910  
Bank owned life insurance59,399  59,079  58,749  58,437  58,138  
Federal Home Loan Bank ("FHLB") stock11,928  23,744  16,148  14,677  10,526  
Goodwill184,012  184,012  184,012  184,012  184,012  
Intangible assets18,213  19,131  20,084  21,038  21,994  
Other investments16,786  16,683  16,683  16,517  16,526  
Other assets172,747  85,679  161,071  122,575  83,984  
      Total assets$4,923,033  $5,263,259  $4,828,641  $4,736,565  $4,631,993  
Liabilities
Deposits
  Noninterest-bearing$927,922  $898,173  $904,409  $940,911  $882,310  
  Interest-bearing2,850,986  2,944,072  2,794,079  2,691,502  2,755,307  
    Total deposits3,778,908  3,842,245  3,698,488  3,632,413  3,637,617  
Short-term borrowings162,045  493,219  203,471  207,828  124,214  
Long-term FHLB advances47,303  52,269  44,735  47,941  55,407  
Subordinated notes98,750  98,705  98,660  98,616  98,571  
Jr. subordinated debentures21,798  21,753  21,709  21,665  21,622  
Operating lease liabilities44,482  45,258  46,506  47,393  48,224  
Accrued interest payable7,230  6,248  9,015  8,244  8,674  
Other liabilities169,338  91,335  105,122  82,310  62,557  
      Total liabilities4,329,854  4,651,032  4,227,706  4,146,410  4,056,886  
Shareholders' equity
Common stock24,655  24,650  24,646  24,583  24,577  
Paid-in capital in excess of par value379,495  378,606  377,806  376,652  375,655  
Less: common stock held in treasury, at cost(88,540) (81,174) (81,089) (78,583) (76,974) 
Accumulated other comprehensive income (loss), net of tax8,869  2,187  2,698  1,700  (3,278) 
Retained earnings269,395  288,653  277,568  266,496  255,813  
    Total Bryn Mawr Bank Corporation shareholders' equity593,874  612,922  601,629  590,848  575,793  
Noncontrolling interest(695) (695) (694) (693) (686) 
    Total shareholders' equity593,179  612,227  600,935  590,155  575,107  
      Total liabilities and shareholders' equity$4,923,033  $5,263,259  $4,828,641  $4,736,565  $4,631,993  


11

Bryn Mawr Bank Corporation
Supplemental Balance Sheet Information (unaudited)
(dollars in thousands)
 
Portfolio Loans and Leases(1) as of
 March 31,
2020
December 31,
2019
September 30,
2019
June 30,
2019
March 31,
2019
Commercial Real Estate Loans - Non-owner Occupied$1,354,416  $1,337,167  $1,238,881  $1,217,763  $1,222,670  
Commercial Real Estate Loans - Owner Occupied530,667  527,607  499,202  514,013  511,090  
Home equity lines of credit209,278  224,262  227,682  231,697  228,902  
Residential Mortgages - secured by first liens710,495  706,690  702,588  704,605  703,241  
Residential Mortgages - secured by junior liens35,583  36,843  37,240  39,063  41,254  
Construction221,116  202,198  195,161  195,269  202,717  
  Total real estate loans3,061,555  3,034,767  2,900,754  2,902,410  2,909,874  
Commercial & Industrial491,298  432,227  426,084  419,936  408,596  
Consumer45,951  57,241  50,760  49,453  48,682  
Leases168,362  165,078  163,149  162,866  156,362  
  Total non-real estate loans and leases705,611  654,546  639,993  632,255  613,640  
    Total portfolio loans and leases$3,767,166  $3,689,313  $3,540,747  $3,534,665  $3,523,514  

 
Nonperforming Loans and Leases(1) as of
 March 31,
2020
December 31,
2019
September 30,
2019
June 30,
2019
March 31,
2019
Commercial Real Estate Loans - Non-owner Occupied$181  $199  $3,055  $3,147  $3,396  
Commercial Real Estate Loans - Owner Occupied2,543  4,159  4,535  2,470  1,158  
Home equity lines of credit758  636  693  470  7,049  
Residential Mortgages - secured by first liens1,080  2,447  2,693  3,102  5,667  
Residential Mortgages - secured by junior liens79  83  84  72  400  
  Total nonperforming real estate loans4,641  7,524  11,060  9,261  17,670  
Commercial & Industrial2,692  2,180  1,991  2,056  620  
Consumer52  61  75  60  80  
Leases172  883  993  802  913  
  Total nonperforming non-real estate loans and leases2,916  3,124  3,059  2,918  1,613  
    Total nonperforming portfolio loans and leases$7,557  $10,648  $14,119  $12,179  $19,283  

 
Net Loan and Lease Charge-Offs (Recoveries)(1) for the Three Months Ended
 March 31,
2020
December 31,
2019
September 30,
2019
June 30,
2019
March 31,
2019
Commercial Real Estate Loans - Non-owner Occupied$(2) $(1,067) $(7) $(4) $1,512  
Commercial Real Estate Loans - Owner Occupied—  190  680  —  —  
Home equity lines of credit114  33  (22) 128  102  
Residential Mortgages - secured by first liens727  378  (7) 339  328  
Residential Mortgages - secured by junior liens—  —  —  52  —  
Construction(1) (1) (1) (1) (1) 
  Total net charge-offs of real estate loans838  (467) 643  514  1,941  
Commercial & Industrial612  57  (15) (17) 189  
Consumer261  227  187  119  102  
Leases2,362  583  509  445  314  
  Total net charge-offs of non-real estate loans and leases3,235  867  681  547  605  
    Total net charge-offs$4,073  $400  $1,324  $1,061  $2,546  
(1)In conjunction with the adoption of CECL, the Corporation has revised its portfolio segmentation to align with the methodology applied in determining the ACL) for loans and leases under CECL, which is based on Federal call report codes which classify loans based on the primary collateral supporting the loan. Portfolio segmentation prior to the adoption of CECL was based on product type or purpose. As such, certain reclassifications were made to conform previous years to the current year's presentation.
12

Bryn Mawr Bank Corporation
Supplemental Balance Sheet Information (unaudited)
(dollars in thousands)
 Investment Securities Available for Sale, at Fair Value
 March 31,
2020
December 31,
2019
September 30,
2019
June 30,
2019
March 31,
2019
U.S. Treasury securities $101  $500,101  $101  $101  $100  
Obligations of the U.S. Government and agencies 106,679  102,020  172,753  192,799  186,746  
State & political subdivisions - tax-free4,562  5,379  6,327  6,700  8,468  
State & political subdivisions - taxable—  —  —  170  170  
Mortgage-backed securities374,775  366,002  388,891  348,975  322,913  
Collateralized mortgage obligations29,699  31,832  35,459  38,724  40,486  
Other debt securities650  650  650  650  1,100  
  Total investment securities available for sale, at fair value$516,466  $1,005,984  $604,181  $588,119  $559,983  

 Unrealized Gain (Loss) on Investment Securities Available for Sale
 March 31,
2020
December 31,
2019
September 30,
2019
June 30,
2019
March 31,
2019
U.S. Treasury securities $ $35  $ $ $—  
Obligations of the U.S. Government and agencies 1,036  (159) 188  275  (1,334) 
State & political subdivisions - tax-free10  13    (5) 
Mortgage-backed securities11,554  5,025  4,605  3,364  (696) 
Collateralized mortgage obligations778  36  180  89  (510) 
  Total unrealized gains (losses) on investment securities available for sale$13,379  $4,950  $4,982  $3,737  $(2,545) 

 Deposits
 March 31,
2020
December 31,
2019
September 30,
2019
June 30,
2019
March 31,
2019
Interest-bearing deposits:
  Interest-bearing demand$750,127  $944,915  $778,809  $745,134  $664,683  
  Money market1,133,952  1,106,478  983,170  966,596  961,348  
  Savings247,799  220,450  248,539  263,830  265,613  
  Retail time deposits 406,828  405,123  467,346  502,745  531,522  
  Wholesale non-maturity deposits198,888  177,865  274,121  100,047  47,744  
  Wholesale time deposits113,392  89,241  42,094  113,150  284,397  
    Total interest-bearing deposits2,850,986  2,944,072  2,794,079  2,691,502  2,755,307  
  Noninterest-bearing deposits927,922  898,173  904,409  940,911  882,310  
      Total deposits$3,778,908