Toggle SGML Header (+)


Section 1: 8-K (8-K)

bmtc-20200720
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): July 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 obligation of the registrant under any of the following provisions:

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 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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 July 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 June 30, 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) Exhibits

Exhibit 99.1 – Press Release announcing the results of operations for the quarter ended June 30, 2020
Exhibit 104 – Cover Page Interactive Data File (embedded within the Inline XBRL document)



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:    July 20, 2020





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


(Back To Top)

Section 2: EX-99.1 (EX-99.1)

Document

Exhibit 99.1
404677633_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
Second Quarter Net Income of $15.0 Million

BRYN MAWR, Pa., July 20, 2020 - Bryn Mawr Bank Corporation (NASDAQ: BMTC) (the “Corporation”), parent of The Bryn Mawr Trust Company (the “Bank”), today reported net income of $15.0 million, or $0.75 diluted earnings per share for the three months ended June 30, 2020, as compared to a net loss of $11.2 million, or $(0.56) diluted earnings per share, for the three months ended March 31, 2020, and net income of $15.8 million, or $0.78 diluted earnings per share, for the three months ended June 30, 2019.

On a non-GAAP basis, core net income, which excludes gain on sale of Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans, one-time costs associated with the wind-down of BMT Investment Advisers, a wholly-owned subsidiary of the Corporation, and severance associated with certain staff reductions, as detailed in the appendix to this earnings release, was $15.4 million, or $0.77 diluted earnings per share, for the three months ended June 30, 2020. There were no meaningful non-core income or expense items for the three months ended March 31, 2020 or June 30, 2019. Management believes the core net income measure is important in evaluating the Corporation’s performance on a more comparable basis between periods. A reconciliation of this and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release.

“In this time of unprecedented uncertainty, I am pleased with our second quarter results. This is truly a testament to BMT’s strong foundation and focus on people, process, technology and diversification of revenue streams. The hard work and dedication our employees showed in this time of crisis deserves special recognition,” commented Frank Leto, President and Chief Executive Officer, continuing, “Our transition to remote work was seamless and will offer us future efficiencies in both occupancy and personnel expenses. We entered this pandemic in a position of strength. Management remains diligent in the execution of our heightened risk management and credit monitoring processes.”

On July 20, 2020, the Board of Directors of the Corporation declared a quarterly dividend of $0.27 per share, payable September 1, 2020 to shareholders of record as of August 3, 2020.

SIGNIFICANT ITEMS OF NOTE

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

Net income for the three months ended June 30, 2020 was $15.0 million, or $0.75 diluted earnings per share, as compared to a net loss of $11.2 million, or $(0.56) diluted earnings per share, for the three months ended March 31, 2020. The net loss for the three months ended March 31, 2020 was primarily due to the $32.3 million in provision for credit losses on loans and leases (the “Provision”) recorded in the first quarter of 2020 as a result of reserve builds driven by the COVID-19 pandemic. The Provision for the three months ended June 30, 2020 was $4.3 million. Other factors impacting the increase in net income included increases of $1.1 million and $4.5 million in net interest income and noninterest income, respectively, partially offset by increases of $425 thousand and $7.0 million in noninterest expense and income tax expense, respectively, for the three months ended June 30, 2020 as compared to the three months ended March 31, 2020.

1


Net interest income for the three months ended June 30, 2020 was $37.4 million, an increase of $1.1 million over the linked quarter. Tax-equivalent net interest income for the three months ended June 30, 2020 was $37.5 million, an increase of $1.0 million over the linked quarter. Tax-equivalent net interest income for the second quarter of 2020 was positively impacted by the accretion of purchase accounting fair value marks of $1.0 million, an increase of $91 thousand as compared to $949 thousand 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 June 30, 2020 was $36.4 million, an increase of $947 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.

The tax-equivalent net interest margin was 3.22% for the three months ended June 30, 2020 as compared to 3.38% 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 3.13% for the three months ended June 30, 2020 as compared to 3.29% 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.

Items contributing to the increase in tax-equivalent net interest income adjusted for purchase accounting included decreases of $3.2 million and $221 thousand in interest paid on deposits and interest expense on short-term borrowings, respectively, partially offset by decreases of $2.2 million and $292 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 June 30, 2020 as compared to the linked quarter ended March 31, 2020. These decreases were primarily due to reduced interest rates during the second quarter of 2020 as compared to the first quarter of 2020 and driven by management's active balance sheet management in this current interest rate environment.

Interest expense on deposits for the three months ended June 30, 2020 decreased $3.2 million over the linked quarter. The decrease was primarily due to a 47 basis point decrease in the tax-equivalent rate paid on average interest-bearing deposits for the three months ended June 30, 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 $115.4 million in average interest-bearing deposits for the three months ended June 30, 2020 as compared to the linked quarter.

Interest expense on short-term borrowings for the three months ended June 30, 2020 decreased $221 thousand over the linked quarter. The decrease was primarily due to a 62 basis point decrease in the rate paid as compared to the linked quarter coupled with a $3.8 million decrease 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 June 30, 2020 decreased $2.1 million as compared to the linked quarter. The decrease was primarily due to a 46 basis point decrease in the tax-equivalent yield on average loans and leases for the three months ended June 30, 2020 as compared to the linked quarter. The effect of the decrease in the tax-equivalent yield was partially offset by an increase of $201.6 million in average loans and leases for the three months ended June 30, 2020 as compared to the linked quarter. The increase in average loan and lease balances was primarily the result of the addition of $307.9 million PPP loans originated during the second quarter of 2020. The majority of these PPP loans were sold prior to quarter-end.

Tax-equivalent interest income on available for sale investment securities for the three months ended June 30, 2020 decreased $292 thousand as compared to the linked quarter. The decrease was primarily due to a 23 basis point decrease in the tax-equivalent yield on average available for sale investment securities. The effect of the decrease in the tax-equivalent yield was partially offset by an increase of $242 thousand in average available for sale investment securities for the three months ended June 30, 2020 as compared to the linked quarter.

Noninterest income of $22.8 million for the three months ended June 30, 2020 represented a $4.5 million increase over the linked quarter. The increase was primarily due to increases of $2.4 million, $2.2 million, and $614 thousand in net gain on sale of loans, other operating income, and capital markets revenue, respectively, partially offset by decreases of $243 thousand, $230 thousand, and $201 thousand in service charges on deposits, insurance commissions, and dividends on the Corporation's equity stocks issued by the Federal Home Loan Bank (“FHLB”) and the Federal Reserve Bank, respectively. The increase in net gain on sale of loans was
2


driven by a $2.4 million gain on the sale of approximately $292.1 million of PPP loans in the second quarter of 2020. The increase in other operating income was primarily due to a $1.0 million gain on trading securities recorded in the second quarter of 2020, as compared to a $978 thousand loss on trading securities recorded in the first quarter of 2020. Trading security gains and losses are due to market fluctuations in the Corporation's trading securities held in deferred compensation trust accounts.

Noninterest expense of $36.8 million for the three months ended June 30, 2020 represented a $425 thousand increase over the linked quarter. Increases of $990 thousand and $207 thousand in other operating expenses and professional fees, respectively, were partially offset by decreases of $311 thousand, $279 thousand, and $205 thousand in furniture, fixtures and equipment expenses, employee benefits, and advertising expenses, respectively. The increase in other operating expenses was primarily driven by $2.3 million of other operating expenses recorded in the second quarter of 2020 associated with the wind-down of BMT Investment Advisers, as well as a $1.7 million increase in deferred compensation expense which was primarily due to market fluctuations in the first and second quarters of 2020 affecting the Corporation's deferred compensation plan liability. These increases in other operating expenses were partially offset by a decrease of $3.9 million in provision for credit losses on off-balance sheet credit exposures. During the first quarter of 2020, a $3.0 million provision for credit losses on off-balance sheet credit exposures was recorded driven by the expected adverse economic impacts of the COVID-19 pandemic.

The Provision of $4.3 million for the three months ended June 30, 2020 decreased $28.0 million as compared to $32.3 million for the three months ended March 31, 2020. The Provisions recorded in the first and second quarters of 2020 were 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 and June 30, 2020, respectively. Net loan and lease charge-offs for the second quarter of 2020 totaled $3.4 million, a decrease of $675 thousand as compared to $4.1 million for the first quarter of 2020.

The effective tax rate for the second quarter of 2020 increased to 21.09% as compared to 20.94% for the first quarter of 2020.

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

Net income for the three months ended June 30, 2020 was $15.0 million, or $0.75 diluted earnings per share, as compared to $15.8 million, or $0.78 diluted earnings per share, for the three months ended June 30, 2019. Net interest income for the three months ended June 30, 2020 was $37.4 million, an increase of $774 thousand over the same period in 2019. The Provision for the three months ended June 30, 2020, as calculated under the Current Expected Credit Loss (“CECL”) framework, increased $2.7 million as compared to the same period in 2019, which was calculated in accordance with previously applicable GAAP. Total noninterest income increased $2.6 million, total noninterest expense increased $1.7 million, and income tax expense decreased $229 thousand for the three months ended June 30, 2020 as compared to the three months ended June 30, 2019.

Net interest income for the three months ended June 30, 2020 was $37.4 million, an increase of $774 thousand as compared to the same period in 2019. Tax-equivalent net interest income for the three months ended June 30, 2020 was $37.5 million, an increase of $741 thousand 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 $1.0 million as compared to $1.3 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 June 30, 2020 was $36.4 million, an increase of $988 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.

The tax-equivalent net interest margin was 3.22% for the three months ended June 30, 2020 as compared to 3.55% 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 3.13% and 3.43% for three months ended June 30, 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 below bullet points. A reconciliation of this and other non-GAAP to GAAP performance measures is included in the appendix to this earnings release.

3


Items contributing to the increase in tax-equivalent net interest income adjusted for purchase accounting included a decrease of $5.3 million in interest paid on deposits, partially offset by decreases of $3.9 million and $642 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 June 30, 2020 as compared to the same period in 2019. These decreases were all primarily due to reduced interest rates observed during the second quarter of 2020 as compared to the same period in 2019 driven by the current interest rate environment.

Interest expense on deposits for the three months ended June 30, 2020 decreased $5.2 million as compared to the same period in 2019. The decrease was primarily due to a 78 basis point decrease in the tax-equivalent rate paid on average interest-bearing deposits for the three months ended June 30, 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 $174.3 million in average interest-bearing deposits for the three months ended June 30, 2020 as compared to the same period in 2019.

Tax-equivalent interest and fees earned on loans and leases for the three months ended June 30, 2020 decreased $4.1 million as compared to the same period in 2019. The decrease was primarily due to a 95 basis point decrease in the tax-equivalent yield on average loans and leases for the three months ended June 30, 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 $415.8 million in average loans and leases for the three months ended June 30, 2020 as compared to same period in 2019.

Tax-equivalent interest income on available for sale investment securities for the three months ended June 30, 2020 decreased $642 thousand as compared to the same period in 2019. The decrease was primarily due to a 27 basis point decrease in the tax-equivalent yield on average available for sale investment securities for the three months ended June 30, 2020 as compared to the same period in 2019 coupled with a decrease of $47.1 million in average available for sale investment securities for the three months ended June 30, 2020 as compared to the same period in 2019.

Noninterest income of $22.8 million for the three months ended June 30, 2020 represented a $2.6 million increase over the same period in 2019. The increase was primarily due to increases of $2.4 million and $1.5 million in net gain on sale of loans and capital markets revenue, respectively, partially offset by decreases of $394 thousand, $265 thousand, $249 thousand, and $234 thousand in insurance commissions, other operating income, service charges on deposits, and fees for wealth management services, respectively. The increase in net gain on sale of loans was driven by a $2.4 million gain on the sale of approximately $292.1 million of PPP loans in the second quarter of 2020. The increase in capital markets revenue was primarily due to increased volume and size of interest rate swap transactions with commercial loan customers for the three months ended June 30, 2020 as compared to the same period in 2019.

Noninterest expense of $36.8 million for the three months ended June 30, 2020 represented a $1.7 million increase over the same period in 2019. Increases of $2.5 million, $259 thousand, and $212 thousand in other operating expenses, professional fees, and impairment of mortgage servicing rights, respectively, were partially offset by decreases of $448 thousand, $397 thousand, and $308 thousand in furniture, fixtures and equipment expenses, Pennsylvania bank shares tax, and advertising expenses, respectively. The increase in other operating expenses was primarily driven by $2.3 million of other operating expenses recorded in the second quarter of 2020 associated with the wind-down of BMT Investment Advisers, as well as a $476 thousand increase in deferred compensation expense. These increases in other operating expenses were partially offset by an $867 thousand release of reserves for credit losses on off-balance sheet credit exposures recorded in the second quarter of 2020 based on lower future line usage estimates.

The Provision of $4.3 million for the three months ended June 30, 2020, as calculated under the CECL framework, increased $2.7 million as compared to the same period in 2019, which was calculated in accordance with previously applicable GAAP. The Provision recorded in the second quarter of 2020 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 June 30, 2020. Net loan and lease charge-offs for the second quarter of 2020 totaled $3.4 million, an increase of $2.3 million as compared to $1.1 million for the second quarter in 2019.

4


The effective tax rate for the second quarter of 2020 decreased to 21.09% as compared to 21.18% for the second quarter of 2019.

Financial Condition – June 30, 2020 Compared to December 31, 2019

Total assets as of June 30, 2020 were $5.27 billion, an increase of $8.1 million from December 31, 2019. Cash balances increased $410.6 million primarily due to the sale of approximately $292.1 million of PPP loans in the second quarter of 2020 coupled with higher deposit balances resulting from PPP loan funds deposited with the Bank. Other assets increased $96.1 million primarily driven by a $96.4 million increase in the fair value of interest rate swaps. Partially offsetting these increases was a $475.4 million decrease in available for sale investment securities as discussed in the bullet point below.

Available for sale investment securities as of June 30, 2020 totaled $530.6 million, a decrease of $475.4 million from December 31, 2019. The decrease was primarily due to the maturing of $500.0 million of short-term U.S. Treasury securities in the first quarter of 2020, partially offset by increases of $12.1 million, $11.2 million, and $8.0 million of U.S. government and agency securities, mortgage-backed securities, and corporate bonds, respectively.

Total portfolio loans and leases of $3.72 billion as of June 30, 2020 increased by $32.9 million from December 31, 2019, an increase of 0.9%. Increases of $38.7 million, $25.3 million, $15.1 million, and $10.2 million in commercial real estate loans (nonowner-occupied), commercial and industrial loans, commercial real estate loans (owner-occupied), and construction loans, respectively, were partially offset by decreases of $29.5 million, $13.5 million, and $11.4 million in home equity lines of credit, consumer loans, and residential mortgage loans (1st liens), 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.

As of June 30, 2020, 1,668 loans and leases in the amount of $767.1 million, approximately 20.6% of the Corporation's portfolio loans and leases, are within a deferral period under the Corporation's consumer and commercial loan and lease modification programs.

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 $55.0 million as of June 30, 2020, an increase of $32.4 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 June 30, 2020 as compared to our initial adoption of CECL.

Deposits of $4.24 billion as of June 30, 2020 increased $401.4 million from December 31, 2019. Increases of $319.3 million, $133.0 million, and $29.2 million in noninterest bearing deposits, money market accounts, and savings accounts, respectively, were partially offset by decreases of $34.5 million and $31.4 million in interest-bearing demand accounts and wholesale non-maturity deposits, respectively. The increase in noninterest bearing deposits was primarily due to the Bank's funding of PPP loans to its depositors during the second quarter of 2020.

Borrowings of $194.4 million as of June 30, 2020, which include short-term borrowings, long-term FHLB advances, subordinated notes and junior subordinated debentures decreased $471.6 million from December 31, 2019. The decrease was primarily due to the maturing of $500.0 million of short-term borrowings in the first quarter of 2020, which was used to fund the purchase of $500.0 million of short-term U.S. Treasury securities included on the balance sheet as of December 31, 2019.

Wealth assets totaled $17.01 billion as of June 30, 2020, an increase of $464.8 million from December 31, 2019. As of June 30, 2020, wealth assets consisted of $10.35 billion of wealth assets where fees are set at fixed amounts, an increase of $779.9 million from December 31, 2019, and $6.66 billion of wealth assets where fees
5


are predominantly determined based on the market value of the assets held in their accounts, a decrease of $315.0 million from December 31, 2019.

The capital ratios for the Bank and the Corporation, as of June 30, 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 current and prior quarter ratios reflect the Corporation's election of the five-year transition provision.

EARNINGS CONFERENCE CALL

The Corporation will hold an earnings conference call at 8:30 a.m. Eastern Time on Tuesday, July 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 Friday, August 21, 2020. This recording may be obtained by calling 1-877-344-7529, referring to conference number 10145764.

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/bmtc200721.html. An online archive of the webcast will be available within one hour of the conclusion of the earnings conference call. Within 24 hours after the conclusion of the earnings conference call, an online transcript will be available at the following website:
https://platform.mi.spglobal.com/web/client?auth=inherit&overridecdc=1&#company/transcripts?id=100154.

The Corporation’s decision to hold an earnings conference call for the second 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 communication 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,” “strategy,” “forecast,” “project,” “annualized,” “are optimistic,” “are looking,” “are looking forward” and “believe” or other similar words and phrases may identify forward-looking statements. Persons reading this communication 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 (the “Pandemic”) is adversely affecting us, our clients, 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 the Pandemic, 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
6


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; 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 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 U.S. Securities and Exchange Commission (“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, including our most recent Quarterly Report on Form 10-Q.

# # # #
7

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


 As of or For the Three Months EndedFor the Six Months Ended
 June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
June 30,
2019
June 30,
2020
June 30,
2019
Consolidated Balance Sheet (selected items)
Interest-bearing deposits with banks$448,113  $69,239  $42,328  $86,158  $49,643  
Investment securities550,974  537,592  1,027,182  625,452  606,844  
Loans held for sale4,116  2,785  4,249  5,767  6,333  
Portfolio loans and leases3,722,165  3,767,166  3,689,313  3,540,747  3,534,665  
Allowance for credit losses ("ACL") on loans and leases(54,974) (54,070) (22,602) (20,777) (21,182) 
Goodwill and other intangible assets201,315  202,225  203,143  204,096  205,050  
Total assets5,271,311  4,923,033  5,263,259  4,828,641  4,736,565  
Deposits - interest-bearing3,026,152  2,850,986  2,944,072  2,794,079  2,691,502  
Deposits - non-interest-bearing1,217,496  927,922  898,173  904,409  940,911  
Short-term borrowings28,891  162,045  493,219  203,471  207,828  
Long-term FHLB advances44,837  47,303  52,269  44,735  47,941  
Subordinated notes98,794  98,750  98,705  98,660  98,616  
Jr. subordinated debentures21,843  21,798  21,753  21,709  21,665  
Total liabilities4,667,637  4,329,854  4,651,032  4,227,706  4,146,410  
Total shareholders' equity603,674  593,179  612,227  600,935  590,155  
Average Balance Sheet (selected items)
Interest-bearing deposits with banks195,966  50,330  66,060  48,597  37,843  123,148  35,306  
Investment securities542,321  542,876  593,289  622,336  587,518  542,598  578,765  
Loans held for sale3,805  2,319  4,160  4,375  3,353  3,062  2,289  
Portfolio loans and leases3,936,227  3,736,067  3,594,449  3,528,548  3,520,866  3,836,146  3,498,818  
Total interest-earning assets4,678,319  4,331,592  4,257,958  4,203,856  4,149,580  4,504,954  4,115,178  
Goodwill and intangible assets201,823  202,760  203,663  204,637  205,593  202,292  206,152  
Total assets5,226,074  4,844,918  4,775,407  4,760,074  4,651,625  5,035,495  4,598,672  
Deposits - interest-bearing2,969,113  2,853,712  2,799,050  2,776,226  2,794,854  2,911,412  2,734,857  
Short-term borrowings136,816  140,585  121,612  169,985  68,529  138,700  112,844  
Long-term FHLB advances46,161  47,335  53,443  45,698  52,397  46,748  53,883  
Subordinated notes98,770  98,725  98,681  98,634  98,587  98,748  98,564  
Jr. subordinated debentures21,814  21,768  21,726  21,680  21,637  21,791  21,616  
Total interest-bearing liabilities3,272,674  3,162,125  3,094,512  3,112,223  3,036,004  3,217,399  3,021,764  
Total liabilities4,625,511  4,229,908  4,168,899  4,164,763  4,070,160  4,427,708  4,021,870  
Total shareholders' equity600,563  615,010  606,508  595,311  581,465  607,787  576,802  

8

Bryn Mawr Bank Corporation
Summary Financial Information (unaudited)
(dollars in thousands, except per share data)
 As of or For the Three Months EndedFor the Six Months Ended
 June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
June 30,
2019
June 30,
2020
June 30,
2019
Income Statement
Net interest income$37,385  $36,333  $35,985  $37,398  $36,611  $73,718  $74,258  
Provision for loan and lease losses4,302  32,335  2,225  919  1,627  36,637  5,363  
Noninterest income22,773  18,300  23,255  19,455  20,221  41,073  39,474  
Noninterest expense36,843  36,418  36,430  35,173  35,188  73,261  74,912  
Income tax expense (benefit)4,010  (2,957) 4,202  4,402  4,239  1,053  7,003  
Net income (loss)15,003  (11,163) 16,383  16,359  15,778  3,840  26,454  
Net loss attributable to noncontrolling interest(32) —  (1) (1) (7) (32) (8) 
Net income (loss) attributable to Bryn Mawr Bank Corporation15,035  (11,163) 16,384  16,360  15,785  3,872  26,462  
Basic earnings per share0.75  (0.56) 0.81  0.81  0.78  0.19  1.31  
Diluted earnings per share0.75  (0.56) 0.81  0.81  0.78  0.19  1.31  
Net income (loss) (core) (1)
15,399  (11,163) 16,384  16,360  15,785  4,236  30,015  
Basic earnings per share (core) (1)
0.77  (0.56) 0.81  0.81  0.78  0.21  1.49  
Diluted earnings per share (core) (1)
0.77  (0.56) 0.81  0.81  0.78  0.21  1.48  
Dividends paid or accrued per share0.26  0.26  0.26  0.26  0.25  0.52  0.50  
Profitability Indicators
Return on average assets1.16 %(0.93)%1.36 %1.36 %1.36 %0.15 %1.16 %
Return on average equity10.07 %(7.30)%10.72 %10.90 %10.89 %1.28 %9.25 %
Return on tangible equity(1)
15.86 %(10.17)%16.85 %17.35 %17.62 %2.63 %15.18 %
Return on tangible equity (core)(1)
16.23 %(10.17)%16.85 %17.35 %17.62 %2.81 %17.11 %
Return on average assets (core)(1)
1.19 %(0.93)%1.36 %1.36 %1.36 %0.17 %1.32 %
Return on average equity (core)(1)
10.31 %(7.30)%10.72 %10.90 %10.89 %1.40 %10.49 %
Tax-equivalent net interest margin3.22 %3.38 %3.36 %3.54 %3.55 %3.30 %3.65 %
Efficiency ratio(1)
57.25 %64.98 %59.89 %60.19 %60.23 %61.01 %60.25 %
Share Data
Closing share price$27.66  $28.38  $41.24  $36.51  $37.32  
Book value per common share$30.29  $29.78  $30.42  $29.86  $29.31  
Tangible book value per common share$20.23  $19.66  $20.36  $19.75  $19.16  
Price / book value91.32 %95.30 %135.57 %122.27 %127.33 %
Price / tangible book value136.73 %144.35 %202.55 %184.86 %194.78 %
Weighted average diluted shares outstanding20,008,219  20,053,159  20,213,008  20,208,630  20,244,409  20,077,159  20,256,469  
Shares outstanding, end of period19,927,893  19,921,524  20,126,296  20,124,193  20,131,854  
Wealth Management Information:
Wealth assets under mgmt, administration, supervision and brokerage (2)
$17,012,903  $15,593,732  $16,548,060  $15,609,786  $14,815,298  
Fees for wealth management services$11,276  $11,168  $11,672  $10,826  $11,510  






9

Bryn Mawr Bank Corporation
Summary Financial Information (unaudited)
(dollars in thousands, except per share data)
 As of or For the Three Months EndedFor the Six Months Ended
 June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
June 30,
2019
June 30,
2020
June 30,
2019
Capital Ratios(3)
Bryn Mawr Trust Company ("BMTC")
Tier I capital to risk weighted assets ("RWA")11.68 %11.10 %11.47 %12.17 %11.83 %
Total capital to RWA12.93 %12.33 %12.09 %12.75 %12.42 %
Tier I leverage ratio8.75 %9.12 %9.37 %9.75 %9.61 %
Tangible equity ratio (1)
8.67 %8.98 %8.58 %9.75 %9.58 %
Common equity Tier I capital to RWA11.68 %11.10 %11.47 %12.17 %11.83 %
Bryn Mawr Bank Corporation ("BMBC")
Tier I capital to RWA11.27 %10.80 %11.42 %11.33 %11.12 %
Total capital to RWA15.14 %14.62 %14.69 %14.61 %14.44 %
Tier I leverage ratio8.44 %8.88 %9.33 %9.07 %9.04 %
Tangible equity ratio (1)
7.95 %8.30 %8.10 %8.60 %8.51 %
Common equity Tier I capital to RWA10.71 %10.25 %10.86 %10.75 %10.54 %
Asset Quality Indicators
Net loan and lease charge-offs ("NCO"s)$3,398  $4,073  $400  $1,324  $1,061  $7,471  $3,607  
Loans and leases risk-rated Special Mention$55,171  $14,833  $19,922  $40,494  $14,232  
Total classified loans and leases154,687  60,972  66,901  36,192  40,908  
Total criticized loans and leases$209,858  $75,805  $86,823  $76,686  $55,140  
Nonperforming loans and leases ("NPL"s)$8,418  $7,557  $10,648  $14,119  $12,179  
Other real estate owned ("OREO")—  —  —  72  155  
Total nonperforming assets ("NPA"s)$8,418  $7,557  $10,648  $14,191  $12,334  
Nonperforming loans and leases 30 or more days past due$3,223  $3,380  $6,314  $4,940  $8,224  
Performing loans and leases 30 to 89 days past due10,022  19,930  7,196  5,273  9,466  
Performing loans and leases 90 or more days past due—  —  —  —  —  
Total delinquent loans and leases$13,245  $23,310  $13,510  $10,213  $17,690  
Delinquent loans and leases to total loans and leases0.36 %0.62 %0.37 %0.29 %0.50 %
Delinquent performing loans and leases to total loans and leases0.27 %0.53 %0.19 %0.15 %0.27 %
NCOs / average loans and leases (annualized)0.35 %0.44 %0.04 %0.15 %0.12 %0.39 %0.21 %
NPLs / total portfolio loans and leases0.23 %0.20 %0.29 %0.40 %0.34 %
NPAs / total loans and leases and OREO0.23 %0.20 %0.29 %0.40 %0.35 %
NPAs / total assets0.16 %0.15 %0.20 %0.29 %0.26 %
ACL / NPLs653.05 %715.50 %212.27 %147.16 %173.92 %
ACL / classified loans and leases35.54 %88.68 %33.78 %57.41 %51.78 %
ACL / criticized loans and leases26.20 %71.33 %26.03 %27.09 %38.42 %
ACL / portfolio loans1.48 %1.44 %0.61 %0.59 %0.60 %
ACL for originated loans and leases / Originated loans and leases (1)
1.51 %1.47 %0.68 %0.66 %0.68 %
(Total ACL + Loan mark) / Total Gross portfolio loans and leases (1)
1.69 %1.68 %0.91 %0.92 %1.00 %
Troubled debt restructurings ("TDR"s) included in NPLs$1,792  $3,248  $3,018  $5,755  $4,190  
TDRs in compliance with modified terms10,013  4,852  5,071  5,069  5,141  
Total TDRs$11,805  $8,100  $8,089  $10,824  $9,331  
(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 and June 30, 2020 ratios reflect the Corporation’s 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)

June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
June 30,
2019
Assets
Cash and due from banks$16,408  $17,803  $11,603  $8,582  $13,742  
Interest-bearing deposits with banks448,113  69,239  42,328  86,158  49,643  
  Cash and cash equivalents464,521  87,042  53,931  94,740  63,385  
Investment securities, available for sale530,581  516,466  1,005,984  604,181  588,119  
Investment securities, held to maturity12,592  13,369  12,577  12,947  10,209  
Investment securities, trading7,801  7,757  8,621  8,324  8,516  
Loans held for sale4,116  2,785  4,249  5,767  6,333  
Portfolio loans and leases, originated3,422,890  3,424,601  3,320,816  3,137,769  3,088,849  
Portfolio loans and leases, acquired299,275  342,565  368,497  402,978  445,816  
  Total portfolio loans and leases3,722,165  3,767,166  3,689,313  3,540,747  3,534,665  
Less: Allowance for credit losses on originated loans and leases(51,659) (50,365) (22,526) (20,675) (21,076) 
Less: Allowance for credit losses on acquired loans and leases(3,315) (3,705) (76) (102) (106) 
  Total allowance for credit losses on loans and lease(54,974) (54,070) (22,602) (20,777) (21,182) 
    Net portfolio loans and leases3,667,191  3,713,096  3,666,711  3,519,970  3,513,483  
Premises and equipment61,778  63,144  64,965  66,439  68,092  
Operating lease right-of-use assets39,348  40,157  40,961  42,200  43,116  
Accrued interest receivable15,577  12,017  12,482  12,746  13,312  
Mortgage servicing rights3,440  4,115  4,450  4,580  4,744  
Bank owned life insurance59,728  59,399  59,079  58,749  58,437  
Federal Home Loan Bank ("FHLB") stock4,506  11,928  23,744  16,148  14,677  
Goodwill184,012  184,012  184,012  184,012  184,012  
Intangible assets17,303  18,213  19,131  20,084  21,038  
Other investments17,055  16,786  16,683  16,683  16,517  
Other assets181,762  172,747  85,679  161,071  122,575  
      Total assets$5,271,311  $4,923,033  $5,263,259  $4,828,641  $4,736,565  
Liabilities
Deposits
  Noninterest-bearing$1,217,496  $927,922  $898,173  $904,409  $940,911  
  Interest-bearing3,026,152  2,850,986  2,944,072  2,794,079  2,691,502  
    Total deposits4,243,648  3,778,908  3,842,245  3,698,488  3,632,413  
Short-term borrowings28,891  162,045  493,219  203,471  207,828  
Long-term FHLB advances44,837  47,303  52,269  44,735  47,941  
Subordinated notes98,794  98,750  98,705  98,660  98,616  
Jr. subordinated debentures21,843  21,798  21,753  21,709  21,665  
Operating lease liabilities43,693  44,482  45,258  46,506  47,393  
Accrued interest payable7,907  7,230  6,248  9,015  8,244  
Other liabilities178,024  169,338  91,335  105,122  82,310  
      Total liabilities4,667,637  4,329,854  4,651,032  4,227,706  4,146,410  
Shareholders' equity
Common stock24,662  24,655  24,650  24,646  24,583  
Paid-in capital in excess of par value380,167  379,495  378,606  377,806  376,652  
Less: common stock held in treasury, at cost(88,612) (88,540) (81,174) (81,089) (78,583) 
Accumulated other comprehensive income, net of tax9,019  8,869  2,187  2,698  1,700  
Retained earnings279,165  269,395  288,653  277,568  266,496  
    Total Bryn Mawr Bank Corporation shareholders' equity604,401  593,874  612,922  601,629  590,848  
Noncontrolling interest(727) (695) (695) (694) (693) 
    Total shareholders' equity603,674  593,179  612,227  600,935  590,155  
      Total liabilities and shareholders' equity$5,271,311  $4,923,033  $5,263,259  $4,828,641  $4,736,565  

11

Bryn Mawr Bank Corporation
Supplemental Balance Sheet Information (unaudited)
(dollars in thousands)

 
Portfolio Loans and Leases(1) as of
 June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
June 30,
2019
Commercial real estate - nonowner-occupied$1,375,904  $1,354,416  $1,337,167  $1,238,881  $1,217,763  
Commercial real estate - owner-occupied542,688  530,667  527,607  499,202  514,013  
Home equity lines of credit194,767  209,278  224,262  227,682  231,697  
Residential mortgage - 1st liens695,270  710,495  706,690  702,588  704,605  
Residential mortgage - junior liens33,644  35,583  36,843  37,240  39,063  
Construction212,374  221,116  202,198  195,161  195,269  
  Total real estate loans3,054,647  3,061,555  3,034,767  2,900,754  2,902,410  
Commercial & Industrial457,529  491,298  432,227  426,084  419,936  
Consumer43,762  45,951  57,241  50,760  49,453  
Leases166,227  168,362  165,078  163,149  162,866  
  Total non-real estate loans and leases667,518  705,611  654,546  639,993  632,255  
    Total portfolio loans and leases$3,722,165  $3,767,166  $3,689,313  $3,540,747  $3,534,665  

 
Nonperforming Loans and Leases(1) as of
 June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
June 30,
2019
Commercial real estate - nonowner-occupied$245  $181  $199  $3,055  $3,147  
Commercial real estate - owner-occupied4,046  2,543  4,159  4,535  2,470  
Home equity lines of credit915  758  636  693  470  
Residential mortgage - 1st liens912  1,080  2,447  2,693  3,102  
Residential mortgage - junior liens72  79  83  84  72  
  Total nonperforming real estate loans6,190  4,641  7,524  11,060  9,261  
Commercial & Industrial1,973  2,692  2,180  1,991  2,056  
Consumer36  52  61  75  60  
Leases219  172  883  993  802  
  Total nonperforming non-real estate loans and leases2,228  2,916  3,124  3,059  2,918  
    Total nonperforming portfolio loans and leases$8,418  $7,557  $10,648  $14,119  $12,179  

 
Net Loan and Lease Charge-Offs (Recoveries)(1) for the Three Months Ended
 June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
June 30,
2019
Commercial real estate - nonowner-occupied$(4) $(2) $(1,067) $(7) $(4) 
Commercial real estate - owner-occupied1,234  —  190  680  —  
Home equity lines of credit(4) 114  33  (22) 128  
Residential mortgage - 1st liens420  727  378  (7) 339  
Residential mortgage - junior liens—  —  —  —  52  
Construction(1) (1) (1) (1) (1) 
  Total net charge-offs of real estate loans1,645  838  (467) 643  514  
Commercial & Industrial499  612  57  (15) (17) 
Consumer238  261  227  187  119  
Leases1,016  2,362  583  509  445  
  Total net charge-offs of non-real estate loans and leases1,753  3,235  867  681  547  
    Total net charge-offs$3,398  $4,073  $400  $1,324  $1,061  
(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
 June 30,
2020
March 31,
2020
December 31,
2019
September 30,
2019
June 30,
2019
U.S. Treasury securities $100  $101