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 interchange 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, with the October 1, 2014 acquisition of PCPB, followed by the April 1, 2015 acquisition of RJM and the May 2017 acquisition of Hirshorn Boothby, both of which were merged into PCPB (now BMT Insurance Advisors), the Wealth Management Division assumed responsibility for all insurance services of the Corporation.

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 table details the Corporation’s segments:



	As of or for the Year Ended December 31,
	2018									2017									2016
(dollars in thousands)	Banking			Wealth Management			Consolidated			Banking			Wealth Management			Consolidated			Banking			Wealth Management			Consolidated
Net interest income	$	149,464		$	7		$	149,471		$	115,124		$	3		$	115,127		$	106,233		$	3		$	106,236
Provision for loan and lease losses	7,193			—			7,193			2,618			—			2,618			4,326			—			4,326
Net interest income after loan loss provision	142,271			7			142,278			112,506			3			112,509			101,907			3			101,910
Noninterest income:
Fees for wealth management services	—			42,326			42,326			—			38,735			38,735			—			36,690			36,690
Insurance commissions	—			6,808			6,808			—			4,589			4,589			—			3,722			3,722
Capital markets revenue	4,848			—			4,848			2,396			—			2,396			—			—			—
Service charges on deposit accounts	2,989			—			2,989			2,608			—			2,608			2,791			—			2,791
Loan servicing and other fees	2,259			—			2,259			2,106			—			2,106			1,939			—			1,939
Net gain on sale of loans	3,283			—			3,283			2,441			—			2,441			3,048			—			3,048
Net gain on sale of investment securities available for sale	7			—			7			101			—			101			(77		)	—			(77		)
Net gain (loss) gain on sale of OREO	295			—			295			(104		)	—			(104		)	(76		)	—			(76		)
Other operating income	12,981			186			13,167			6,063			197			6,260			5,773			158			5,931
Total noninterest income	26,662			49,320			75,982			15,611			43,521			59,132			13,398			40,570			53,968

Noninterest expenses:
Salaries & wages	46,936			19,735			66,671			36,559			16,692			53,251			32,321			15,090			47,411
Employee benefits	9,046			3,872			12,918			6,350			3,820			10,170			5,958			3,291			9,249
Occupancy and bank premise	9,588			2,011			11,599			8,208			1,698			9,906			8,005			1,606			9,611
Amortization of intangible assets	1,555			2,101			3,656			783			1,951			2,734			872			2,626			3,498
Professional fees	3,747			456			4,203			2,998			270			3,268			3,516			143			3,659
Other operating expenses	35,928			5,328			41,256			30,605			4,461			35,066			24,411			3,835			28,246
Total noninterest expenses	106,800			33,503			140,303			85,503			28,892			114,395			75,083			26,591			101,674
Segment profit	62,133			15,824			77,957			42,614			14,632			57,246			40,222			13,982			54,204
Intersegment (revenues) expenses⁽¹⁾	(715		)	715			—			(448		)	448			—			(396		)	396			—
Pre-tax segment profit after eliminations	$	61,418		$	16,539		$	77,957		$	42,166		$	15,080		$	57,246		$	39,826		$	14,378		$	54,204
% of segment pre-tax profit after eliminations	78.8		%	21.2		%	100.0		%	73.7		%	26.3		%	100.0		%	73.5		%	26.5		%	100.0		%
Segment assets (dollars in millions)	$	4,601.7		$	50.8		$	4,652.5		$	4,398.5		$	51.2		$	4,449.7		$	3,377.1		$	44.4		$	3,421.5

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

Wealth Management Segment Information



(dollars in millions)	December 31, 2018		December 31, 2017
Assets under management, administration, supervision and brokerage	$	13,429.5	$	12,968.7