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Bryn Mawr Bank Corporation Reports Strong Second Quarter 2010 Core Earnings, Completes Merger With First Keystone Financial, Inc.

BRYN MAWR, Pa., July 22, 2010 (GLOBE NEWSWIRE) -- Bryn Mawr Bank Corporation (Nasdaq:BMTC), (the "Corporation"), parent of The Bryn Mawr Trust Company (the "Bank"), today announced that the Corporation earned second quarter 2010 diluted earnings per share of $0.25 and net income of $2.4 million, which includes $637 thousand of pre-tax merger related expenses. For the same period last year, the Corporation reported diluted earnings per share of $0.28 and net income of $2.4 million.

For the six months ended June 30, 2010, the Corporation earned diluted earnings per share of $0.50 and net income of $4.6 million, which includes $985 thousand of pre-tax merger related expenses. For the same period last year, the Corporation reported diluted earnings per share and net income of $0.58 and $5.1 million, respectively.

Ted Peters, Chairman and Chief Executive Officer, stated, "The second quarter of 2010 was eventful as we raised approximately $25 million in new common equity and began the steps that will be necessary to fully integrate First Keystone Financial, Inc. into our organization. The legal close of the merger was completed on July 1, 2010, resulting in our bank holding company having approximately $1.7 billion of banking assets, $3.1 billion of wealth assets under management, and 17 full-service branch locations firmly establishing Bryn Mawr Trust as the foremost community bank in the Philadelphia region."

Mr. Peters added, "Despite the First Keystone merger related expenses incurred to date and some isolated problem credit costs, our earnings continue to be strong. We are very pleased with where we are at this stage of the recovery from the recession."

  • Wealth Management Division assets under management, administration, supervision and brokerage at June 30, 2010 were $3.1 billion, up approximately $229 million or 8.0% from the fourth quarter of 2009, and up approximately $836 million or 36.9% from June 30, 2009 due to the success of new initiatives within this division and improvements in the financial markets.
  • Revenue from the Wealth Management Division for the second quarter of 2010 was $3.9 million, up 8.4% from fourth quarter 2009 revenue of $3.6 million and up 7.7% from second quarter 2009 revenue of $3.6 million.
  • Deposit levels were $953.5 million at June 30, 2010, an increase of $15.6 million or 1.7% from December 31, 2009. Deposit levels increased $59.5 million or 6.7% from June 30, 2009 as new core transaction account openings remained strong.
  • June 30, 2010 portfolio loan and lease balances of $899.3 million increased $13.6 million or 1.5% compared to $885.7 million at December 31, 2009, led primarily by a $13.6 million or 5.1% increase in commercial mortgages. Partially offsetting this increase was a decline in residential mortgages of $2.6 million or 2.4% and the continued planned decline in the lease portfolio of $7.0 million or 14.8% as compared to December 31, 2009.
  • The tax equivalent net interest margin was 3.80% for the second quarter of 2010, down 26 basis points from the first quarter of 2010 due to the sale of investment securities that resulted in gains of approximately $1.5 million in the first quarter of 2010, the reversal of interest on certain non-performing loans, essentially flat loan growth and the low current interest rate environment.
  • Tax equivalent net interest income for the second quarter of 2010 was $11.2 million, in line with the first quarter of 2010 and up 1.3% from the fourth quarter of 2009.
  • The Corporation's investment portfolio had a fair market value of $254.9 million at June 30, 2010 compared to $208.2 million at December 31, 2009 and $158.8 million at June 30, 2009 due largely to higher invested cash balances from the strong growth in deposits.
  • Revenue from the sale of residential mortgage loans for the quarter ended June 30, 2010 was $606 thousand, higher than the production in the first quarter of 2010, but lower than the quarterly average during the refinancing surge of 2009.
  • At June 30, 2010, the allowance for loan and lease losses of $9.8 million was 1.09% of portfolio loans and leases compared with $10.4 million or 1.18% at both December 31, 2009 and June 30, 2009. The decrease in the reserve as a percentage of portfolio loans and leases is mainly attributable to loans that were specifically reserved for at December 31, 2009 which were charged-off during the first six months of 2010.
  • Trends within the leasing portfolio have shown continued improvement as net charge-offs have decreased on a quarterly basis. The leasing portfolio had second quarter 2010 net charge-offs of $509 thousand compared to $545 thousand during the first quarter of 2010 and $764 thousand during the fourth quarter of 2009.
  • Non-performing loans and leases were 111 basis points of total portfolio loans and leases at June 30, 2010. The level of non-performing loans and leases increased in the second quarter due to one large commercial relationship the Corporation has been monitoring which accounted for 64 basis points of total non-performing loans and leases.
  • During the second quarter of 2010, the Corporation foreclosed on a $595 thousand construction loan which was secured by two newly constructed homes and a $1.4 million commercial loan secured by a restaurant and hotel. The properties were classified as other real estate owned ("OREO") as of June 30, 2010. The Corporation has a signed agreement of sale for one of the constructed homes with a planned settlement date during August 2010.
  • Non-interest expense increased 1.7% in the second quarter of 2010 compared to the first quarter of 2010 primarily due to an increase in merger related expenses and higher mortgage servicing rights impairment.
  • At June 30, 2010, the Corporation had unused borrowing capacity of $300 million at the Federal Home Loan Bank of Pittsburgh, $66 million at the Federal Reserve and $75 million of Fed Funds lines. Additionally, liquidity remained strong with approximately $25 million of cash balances at the Federal Reserve and $18 million in other interest-bearing accounts at June 30, 2010.

Regulatory Capital Ratios:
   6/30/2010  12/31/2009  6/30/2009
Bryn Mawr Trust Company      
Tier I Capital to Risk Weighted Assets (RWA) 10.72% 9.06% 8.71 %
Total (Tier II) Capital to RWA 13.73% 12.20% 11.89%
Tier I Leverage Ratio 9.29% 8.03% 7.72 %
Bryn Mawr Bank Corporation      
Tier I Capital to Risk Weighted Assets (RWA) 11.50% 9.41% 9.27 %
Total (Tier II) Capital to RWA 14.50% 12.53% 12.43%
Tier I Leverage Ratio 9.98% 8.35%  8.22%
Tangible Common Equity Ratio 9.30% 7.51%  7.43%

On May 18, 2010, the Corporation announced it had completed the registration and sale of 1,548,167 shares of common stock, par value $1.00, at a price of $17.00 per share under the Corporation's existing shelf registration. The Corporation received net proceeds of approximately $25 million after deducting placement agents' fees and other offering expenses, which the Corporation expects to use for working capital and general corporate purposes such as for regulatory capital purposes, funding asset growth and financing possible mergers or acquisitions. See the Corporation's Form 8-K filed with the Securities and Exchange Commission ("SEC") on May 19, 2010 for additional information.

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