Bryn Mawr Bank Corporation Reports Record Earnings

BRYN MAWR, Pa., July 25, 2013 (GLOBE NEWSWIRE) -- Bryn Mawr Bank Corporation (Nasdaq: BMTC ), (the "Corporation"), parent of The Bryn Mawr Trust Company (the "Bank"), today reported net income of $6.3 million and diluted earnings per share of $0.46 for the three months ended June 30, 2013, as compared to net income of $5.3 million and diluted earnings per share of $0.40 for the same period in 2012. Net income for the three months ended June 30, 2013 included pre-tax due diligence and merger-related expenses of $688 thousand as compared to $914 thousand for the same period in 2012.

Significant factors contributing to the results for the three months ended June 30, 2013, as compared to the same period in 2012, included increases in wealth management revenues and net interest income, which were partially offset by increases in salaries and benefits expense, occupancy costs and other operating expenses.

For the six months ended June 30, 2013, net income of $11.6 million was a $1.2 million increase from the $10.4 million recorded for the same period in 2012. Diluted earnings per share for the six months ended June 30, 2013 increased $0.07, to $0.86, as compared to $0.79 for the same period last year.

Ted Peters, Chairman and Chief Executive Officer, commented, "We are pleased with our continued strong quarterly results. The uptick in our net interest margin and the steady increase in wealth management revenues are encouraging signs." Mr. Peters added, "The acquisition of Davidson Trust and the First Bank of Delaware transaction, both in 2012, have been nicely accretive to earnings."

On July 25, 2013, the Board of Directors of the Corporation declared a quarterly dividend of $0.17 per share. The dividend is payable September 1, 2013 to shareholders of record as of August 6, 2013.

SIGNIFICANT ITEMS OF NOTE

Results of Operations

The overall results for the three months ended June 30, 2013, as compared to the same period in 2012, were affected by the May 2012 acquisition of the Davidson Trust Company ("DTC") and the November 2012 purchase of deposits, loans and a branch location from First Bank of Delaware ("FBD").

• Net income of $6.3 million for the three months ended June 30, 2013 increased $907 thousand, or 17.0%, from $5.3 million for the same period in 2012.
   
• Net interest income for the three months ended June 30, 2013 was $17.9 million, an increase of $2.0 million, or 12.7%, from $15.9 million for the same period in 2012. The increase in net interest income between the periods was largely the result of a $134.3 million, or 10.4%, increase in average portfolio loans. This increase was partially related to loans acquired from FBD, which totaled $65.9 million as of June 30, 2013. In addition, the Corporation's decisions to prepay $22.5 million of subordinated debt during the third and fourth quarters of 2012 and $20.0 million of Federal Home Loan Bank ("FHLB") borrowings in the first quarter of 2013, along with the 16 basis point decline in rate paid on deposits, contributed significantly to the $991 thousand decrease in interest expense for the three months ended June 30, 2013, as compared to the same period in 2012.
   
• Revenue from wealth management services for the three months ended June 30, 2013 was $9.1 million, a $1.9 million increase, or 26.1%, from the $7.2 million generated in the same period in 2012. Wealth Management Division assets under management, administration, supervision and brokerage as of June 30, 2013 were $6.9 billion, an increase of $579 million, or 9.2%, from June 30, 2012. Organic growth due to the success of the division's strategic initiatives was supplemented by market appreciation and other new business between the dates.
   
• In addition to the increase in revenue for wealth management services mentioned above, non-interest income was also impacted by a $369 thousand increase in other operating income and a $188 thousand increase in gain on sale of residential mortgage loans for the three months ended June 30, 2013 as compared to the same period in 2012. The volume of residential mortgage loans sold for the three months ended June 30, 2013 increased slightly to $46.6 million as compared $44.2 million for the same period in 2012, with a 25 basis point increase in rate of gain on sale. Partially offsetting these improvements in non-interest income was a $716 thousand decrease in gain on sale of available for sale investment securities and a $141 thousand increase in loss on sale of other real estate owned between the periods.
   
• Non-interest expense for the three months ended June 30, 2013 increased $2.4 million, to $20.5 million, as compared to $18.1 million for the same period in 2012. Contributing to this increase were a $1.2 million increase in salaries and benefits, a $614 thousand increase in occupancy costs and an $889 thousand increase in other operating expenses between the periods. Salaries and benefits increased primarily as a result of the addition of the branch and lending staff from FBD, the staffing related to the DTC acquisition, new personnel for our newly-opened full-service branch in Bala Cynwyd, Pennsylvania, which opened at the end of 2012, as well as annual salary increases. In addition to these new facilities, increased compliance requirements have necessitated the hiring of several new staff positions within our headquarters.  The increased occupancy costs were also related to the additions of DTC, FBD, and our new branch in Bala Cynwyd. The increase in other operating expenses was largely related to IT infrastructure improvements. Partially offsetting these cost increases were a $226 thousand decrease in due diligence and merger-related costs and a $178 thousand decrease in the impairment of mortgage servicing rights for the three months ended June 30, 2013, as compared to the same period in 2012.  Recent residential mortgage rate increases has lengthened the average life of our serviced-mortgage portfolio, resulting in a $91 thousand net recovery of prior impairments of our mortgage servicing rights, for the second quarter of 2013. 
   
• The tax-equivalent net interest margin of 3.98% for the three months ended June 30, 2013 was a 14 basis point increase from the 3.84% tax-equivalent net interest margin for the same period in 2012. The increase was the result of a $141.2 million increase in average interest-earning assets, partially offset by a $61.9 million increase in average interest-bearing liabilities between the periods. While the tax-equivalent yield earned on average interest-earning assets declined by 12 basis points between periods, the tax-equivalent rate paid on average interest-bearing liabilities dropped by 34 basis points. This significant reduction in rate paid on interest-bearing liabilities was largely related to the prepayment of $22.5 million of subordinated debt during the third and fourth quarters of 2012, as well as the prepayment of $20.0 million of Federal Home Loan Bank ("FHLB") advances during the first quarter of 2013.
   
• Nonperforming loans and leases of $10.5 million as of June 30, 2013 were 0.73% of total portfolio loans and leases, as compared $14.8 million, or 1.06% of total portfolio loans and leases as of December 31, 2012. This $4.3 million decrease in nonperforming loans was concentrated in the construction, small business and home equity segments of the portfolio and was partially the result of $1.8 million of charge-offs of impaired loans, as well as additions of $566 thousand to other real estate owned related to three residential properties. For the three months ended June 30, 2013, the Corporation recorded net loan and lease charge-offs of $1.0 million, as compared to $903 thousand for the same period in 2012. The provision for loan and lease losses for each of the three month periods ended June 30, 2013 and 2012 was $1.0 million.

Financial Condition – June 30, 2013 Compared to December 31, 2012

• Deposits of $1.55 billion, as of June 30, 2013, decreased $85.0 million from December 31, 2012. The 5.2% decrease was primarily comprised of decreases of $57.4 million and $15.1 million in time deposits and wholesale deposits, respectively, between the dates. The Corporation has continued its planned run-off of its higher-rate certificates of deposit.
   
• The allowance for loan and lease losses as of June 30, 2013 was $14.4 million, or 1.01% of portfolio loans and $14.4 million, or 1.03% of portfolio loans and leases as of December 31, 2012.
   
• The capital ratios for the Bank and the Corporation, as shown in the table below, indicate levels well above the regulatory minimum to be considered "well capitalized."  In particular, the tangible equity ratios for both the Bank and the Corporation have improved from their December 31, 2012 levels of 7.72% and 7.60%, to 8.29% and 8.21%, respectively, at June 30, 2013. These increases were primarily the result of increases in retained earnings and issuance of common stock, along with a slight decline in total assets between the dates.
   
• Total assets as of June 30, 2013 of $2.01 billion declined slightly from $2.04 billion as of December 31, 2012.
   
• Total portfolio loans and leases of $1.43 billion as of June 30, 2013 increased by $32.5 million from December 31, 2012 as increases in commercial mortgages were partially offset by declines in residential mortgages and home equity lines and loans.

EARNINGS CONFERENCE CALL

The Corporation will hold an earnings conference call at 8:30 a.m. EDT on Friday, July 26, 2013. 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 August 12, 2013. The number to call for the taped replay is 1-877-344-7529 and the conference number is 10030504.

The conference call will be simultaneously broadcast live over the Internet through a webcast on the investor relations portion of the Bryn Mawr Bank Corporation's website. To access the call, please visit the website at http://services.choruscall.com/links/bmtc130726.html .   An online archive of the webcast will be available within one hour of the conclusion of the call. The Corporation has also recently expanded its Investor Relations website to include added resources and information for shareholders and interested investors. Interested parties are encouraged to utilize the expanded resources of the site for more information on Bryn Mawr Bank Corporation.

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," "estimate," "target," "potentially," "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. Such 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; 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; and other factors as described in our securities filings. All forward-looking statements and information set forth herein are based on 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 Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, as well as any changes in risk factors that we may identify in our quarterly or other reports filed with the SEC.

Ted Peters, Chairman 610-581-4800 J. Duncan Smith, CFO 610-526-2466