Segment Information

FASB Codification 280 – “Segment Reporting” identifies operating segments as components of an enterprise which are evaluated regularly by the Corporation’s chief operating decision maker, our Chief Executive Officer, in deciding how to allocate resources and assess performance. The Corporation has applied the aggregation criterion set forth in this codification to the results of its operations.

The Corporation’s Banking segment consists of commercial and retail banking. The Banking segment is evaluated as a single strategic unit which generates revenues from a variety of products and services. The Banking segment generates interest income from its lending (including leases) and investing activities and is dependent on the gathering of lower cost deposits from its branch network or borrowed funds from other sources for funding its loans, resulting in the generation of net interest income. The Banking segment also derives revenues from other sources including gains on the sale in available for sale investment securities, gains on the sale of residential mortgage loans, service charges on deposit accounts, cash sweep fees, overdraft fees, BOLI income and revenue associated with its Visa Check Card offering. Also included in the Banking segment are two subsidiaries of the Bank, KCMI Capital, Inc. and Bryn Mawr Equipment Financing, Inc., both of which provide specialized lending solutions to our customers.

The Wealth Management segment has responsibility for a number of activities within the Corporation, including trust administration, other related fiduciary services, custody, investment management and advisory services, employee benefits and IRA administration, estate settlement, tax services and brokerage. Bryn Mawr Trust of Delaware and Lau Associates are included in the Wealth Management segment of the Corporation since they have similar economic characteristics, products and services to those of the Wealth Management Division of the Corporation. BMT Investment Advisers, formed in May 2017, which serves as investment adviser to BMT Investment Funds, a Delaware statutory trust, is also reported under the Wealth Management segment. In addition, the Wealth Management Division oversees all insurance services of the Corporation, which are conducted through the Bank’s insurance subsidiary, BMT Insurance Advisors, Inc., and are reported in the Wealth Management segment.

The accounting policies of the Corporation are applied by segment in the following tables. The segments are presented on a pre-tax basis.

The following tables detail the Corporation’s segments for the three and nine months ended September 30, 2018 and 2017:



	Three Months Ended September 30, 2018									Three Months Ended September 30, 2017
(dollars in thousands)	Banking			Wealth Management			Consolidated			Banking			Wealth Management			Consolidated
Net interest income	$	36,726		$	3		$	36,729		$	29,437		$	1		$	29,438
Provision for loan and lease losses	664			—			664			1,333			—			1,333
Net interest income after loan loss provision	36,062			3			36,065			28,104			1			28,105
Noninterest income:
Fees for wealth management services	—			10,343			10,343			—			9,651			9,651
Insurance commissions	—			1,754			1,754			—			1,373			1,373
Capital markets revenue	710			—			710			843			—			843
Service charges on deposit accounts	726			—			726			676			—			676
Loan servicing and other fees	559			—			559			548			—			548
Net gain on sale of loans	631			—			631			799			—			799
Net gain on sale of investment securities available for sale	—			—			—			72			—			72
Net gain on sale of OREO	5			—			5			—			—			—
Other operating income	3,498			48			3,546			1,581			41			1,622
Total noninterest income	6,129			12,145			18,274			4,519			11,065			15,584

Noninterest expenses:
Salaries & wages	11,737			4,791			16,528			9,130			4,472			13,602
Employee benefits	2,394			962			3,356			1,587			973			2,560
Occupancy and bank premises	2,224			493			2,717			2,049			436			2,485
Amortization of intangible assets	386			505			891			197			480			677
Professional fees	889			108			997			681			58			739
Other operating expenses	7,770			1,333			9,103			6,970			1,151			8,121
Total noninterest expenses	25,400			8,192			33,592			20,614			7,570			28,184
Segment profit	16,791			3,956			20,747			12,009			3,496			15,505
Intersegment (revenues) expenses*	(186		)	186			—			(112		)	112			—
Pre-tax segment profit after eliminations	$	16,605		$	4,142		$	20,747		$	11,897		$	3,608		$	15,505
% of segment pre-tax profit after eliminations	80.0		%	20.0		%	100.0		%	76.7		%	23.3		%	100.0		%
Segment assets (dollars in millions)	$	4,335.8		$	52.6		$	4,388.4		$	3,424.8		$	52.0		$	3,476.8



	Nine Months Ended September 30, 2018									Nine Months Ended September 30, 2017
(dollars in thousands)	Banking			Wealth Management			Consolidated			Banking			Wealth Management			Consolidated
Net interest income	$	111,479		$	5		$	111,484		$	84,804		$	2		$	84,806
Provision for loan and lease losses	4,831			—			4,831			1,541			—			1,541
Net interest income after loan loss provision	106,648			5			106,653			83,263			2			83,265
Noninterest income:
Fees for wealth management services	—			31,309			31,309			—			28,761			28,761
Insurance commissions	—			5,349			5,349			—			3,079			3,079
Capital markets revenue	3,481			—			3,481			1,796			—			1,796
Service charges on deposit accounts	2,191			—			2,191			1,953			—			1,953
Loan servicing and other fees	1,720			—			1,720			1,570			—			1,570
Net gain on sale of loans	1,677			—			1,677			1,948			—			1,948
Net gain on sale of investment securities available for sale	7			—			7			73			—			73
Net gain (loss) gain on sale of OREO	292			—			292			(12		)	—			(12		)
Other operating income	11,709			150			11,859			4,290			138			4,428
Total noninterest income	21,077			36,808			57,885			11,618			31,978			43,596

Noninterest expenses:
Salaries & wages	34,077			14,673			48,750			27,044			12,588			39,632
Employee benefits	6,992			2,949			9,941			4,565			2,888			7,453
Occupancy and bank premises	7,035			1,429			8,464			6,025			1,233			7,258
Amortization of intangible assets	1,169			1,490			2,659			588			1,469			2,057
Professional fees	2,497			180			2,677			2,318			181			2,499
Other operating expenses	29,076			3,891			32,967			21,200			3,240			24,440
Total noninterest expenses	80,846			24,612			105,458			61,740			21,599			83,339
Segment profit	46,879			12,201			59,080			33,141			10,381			43,522
Intersegment (revenues) expenses*	(485		)	485			—			(336		)	336			—
Pre-tax segment profit after eliminations	$	46,394		$	12,686		$	59,080		$	32,805		$	10,717		$	43,522
% of segment pre-tax profit after eliminations	78.5		%	21.5		%	100.0		%	75.4		%	24.6		%	100.0		%
Segment assets (dollars in millions)	$	4,335.8		$	52.6		$	4,388.4		$	3,424.8		$	52.0		$	3,476.8

* Inter-segment revenues consist of rental payments, interest on deposits and management fees.

Wealth Management Segment Information



(dollars in millions)	September 30, 2018		December 31, 2017
Assets under management, administration, supervision and brokerage	$	13,913.3	$	12,968.7