Bryn Mawr Bank Corporation Reports Another Record Quarter, Driven by Solid Loan Growth and Stable Interest Margin, Increases Quarterly Dividend to $0.18, Wealth Assets Exceed $7 Billion

BRYN MAWR, Pa., Oct. 24, 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 $6.4 million and diluted earnings per share of $0.47 for the three months ended September 30, 2013, as compared to net income of $5.4 million and diluted earnings per share of $0.41 for the same period in 2012. Net income for the three months ended September 30, 2013 included pre-tax due diligence and merger-related expenses of $328 thousand as compared to $316 thousand for the same period in 2012.

Significant factors contributing to the results for the three months ended September 30, 2013, as compared to the same period in 2012, included increases in net interest income and wealth management revenues, which were partially offset by decreases in gains on sale of residential mortgage loans and investment securities available for sale.

For the nine months ended September 30, 2013, net income of $18.0 million was a $2.2 million increase from the $15.8 million recorded for the same period in 2012. Diluted earnings per share for the nine months ended September 30, 2013 increased $0.13, to $1.33, from $1.20 for the same period last year.

Ted Peters, Chairman and Chief Executive Officer, commented, "We are pleased with the Corporation's quarterly and year-to-date financial performance." Mr. Peters continued, "We anticipate that continued strong loan growth in the fourth quarter, along with consistent revenue from our Wealth Management Division, will produce a strong finish to 2013."

On October 24, 2013, the Board of Directors of the Corporation declared a quarterly dividend of $0.18 per share, an increase of $0.01, or 5.9%, from the previous quarter's dividend. The dividend is payable December 1, 2013 to shareholders of record as of November 6, 2013.

"We are very proud of our record for consistently paying dividends to our shareholders. The increase in our dividend is a reflection of the confidence which the Board has in the future growth and profitability of the Corporation," said Mr. Peters.

SIGNIFICANT ITEMS OF NOTE

Results of Operations – 3rd Quarter 2013 Compared to the 3rd Quarter 2012

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

• Net income of $6.4 million for the three months ended September 30, 2013 increased $976 thousand, or 18.0%, from $5.4 million for the same period in 2012.
   
• Net interest income for the three months ended September 30, 2013 was $18.5 million, an increase of $2.6 million, or 16.2%, 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 $160.6 million, or 12.3%, increase in average portfolio loans. This increase was partially related to loans acquired from FBD, which totaled $62.9 million as of September 30, 2013. In addition, the prepayment of $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 13 basis point decline in rate paid on deposits, contributed significantly to the $843 thousand decrease in interest expense for the three months ended September 30, 2013, as compared to the same period in 2012.
   
• Non-interest income for the three months ended September 30, 2013 decreased $861 thousand as compared to the same period in 2012. Contributing factors to this decrease include a $1.3 million decrease in the gain on sale of residential mortgage loans and a $416 thousand decline in gain on sale of investment securities available for sale. During the three months ended September 30, 2013, the volume of residential mortgage loans sold to the secondary market dropped significantly, with residential mortgages sold totaling $17.8 million, as compared to $55.0 million during the same period in 2012. While new originations of residential mortgage loans for the 3^rd quarter of 2013 totaled $40.4 million, $16.4 million of the originations were jumbo residential mortgage loans which were retained in the portfolio. Partially offsetting these decreases was a $642 thousand increase in revenue from wealth management services for the three months ended September 30, 2013 as compared to the same period in 2012. Wealth Management Division assets under management, administration, supervision and brokerage as of September 30, 2013 were $7.1 billion, an increase of $600 million, or 9.3%, from September 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.
   
• Non-interest expense for the three months ended September 30, 2013 increased $434 thousand, to $19.3 million, as compared to $18.9 million for the same period in 2012. Contributing to this increase were a $302 thousand increase in salaries and benefits, a $158 thousand increase in occupancy costs and a $233 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 and the 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. Partially offsetting these new personnel costs was the decrease in incentives paid to the residential mortgage originators and other factors. The increased occupancy costs were also related to the additions of FBD and our new branch Bala Cynwyd branch. Decreases in impairment and amortization of mortgage servicing rights totaling $128 thousand, along with the absence of the $188 thousand of early extinguishment of debt expenses, between the periods, partially offset the salary, benefits and occupancy cost increases.
   
• The tax-equivalent net interest margin of 4.05% for the three months ended September 30, 2013 was a 27 basis point increase from the 3.78% tax-equivalent net interest margin for the same period in 2012. The increase was the result of a $139.6 million increase in average interest-earning assets, partially offset by a $55.2 million increase in average interest-bearing liabilities between the periods. The tax-equivalent yield earned on average interest-earning assets increased by 5 basis points between periods, while the tax-equivalent rate paid on average interest-bearing liabilities dropped by 28 basis points. The tax-equivalent yield earned on investment securities available for sale increased 14 basis points between periods as rising interest rates caused a slow-down in prepayments of mortgage-related securities. This yield increase was partially offset by a 13 basis point decline in the tax-equivalent yield on portfolio loans. The significant reduction in rate paid on interest-bearing liabilities was 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. Supplementing these reductions in borrowing costs was a 13 basis point drop in rates paid on interest-bearing deposits, which experienced a $78.0 million increase in average balances for the three months ended September 30, 2013, as compared to the same period in 2012.
   
• Nonperforming loans and leases of $10.6 million as of September 30, 2013 were 0.71% 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 $4.2 million decrease in nonperforming loans was concentrated in the construction, commercial and industrial 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 September 30, 2013, the Corporation recorded net loan and lease charge-offs of $376 thousand, as compared to $502 thousand for the same period in 2012. The provision for loan and lease losses for the three month period ended September 30, 2013 was $959 thousand, as compared to $1.0 million for the same period in 2012.

Results of Operations – 3rd Quarter 2013 Compared to the 2nd Quarter 2013

• Net income of $6.4 million for the three months ended September 30, 2013 increased $149 thousand, or 2.4%, from $6.3 million for the three months ended June 30, 2013.
   
• Net interest income for the three months ended September 30, 2013 was $18.5 million, an increase of $610 thousand, or 3.4%, from $17.9 million for the three months ended June 30, 2013. The increase in net interest income between the periods was largely the result of a $36.3 million, or 2.5%, increase in average portfolio loans, partially offset by a 5 basis point decrease in the tax-equivalent yield earned on loans and leases. In addition, the tax-equivalent yield earned on investment securities available for sale increased from 1.22% for the 2^nd quarter of 2013 to 1.40% for the 3^rd quarter of 2013 as rising interest rates have slowed the rate of prepayments of mortgage-related securities. Also contributing to the increase in net interest income between the 2^nd and 3^rd quarters of 2013 was a $5.2 million decrease in average interest- bearing liabilities between periods.
   
• Non-interest income for the three months ended September 30, 2013 decreased $1.6 million as compared to the three months ended June 30, 2013. Factors contributing to this decrease included a $914 thousand decrease in the gain on sale of residential mortgage loans and a $459 thousand decline in revenue from wealth management services. During the three months ended September 30, 2013, the volume of residential mortgage loans sold dropped significantly, from $46.6 million for the three months ended June 30, 2013, to $17.8 million for the quarter ended September 30, 2013. Rising interest rates played a significant role in this decline, as fewer borrowers refinanced mortgage loans. In addition, $16.4 million of the $40.4 million of residential mortgage loans originated in the 3^rd quarter of 2013 were jumbo mortgage loans which were retained in the portfolio. The 5.1% decrease in revenue from wealth management services was primarily related to the tax-related revenue recorded in the 2^nd quarter of 2013, which did not recur in the 3^rd quarter of 2013. Wealth Management Division assets under management, administration, supervision and brokerage as of September 30, 2013 grew to $7.1 billion, an increase of $228 million, or 3.3%, from June 30, 2013.
   
• Non-interest expense for the three months ended September 30, 2013 decreased $1.2 million, to $19.3 million, as compared to $20.5 million for the three months ended June 30, 2013. The decrease between the periods was related to decreases of $316 thousand, $301 thousand and $360 thousand in employee benefits, furniture, fixtures and equipment expense, and due diligence and merger-related expenses, respectively. The reduction in employee benefits expense was related to, among other things, the annual renewal of the Corporation's medical benefits plan, in which more employees chose to enroll in the lower-cost, high-deductible health plan. The decrease in furniture, fixtures and equipment expense returned the category to a more stable level, as some of the higher computer software and hardware costs recorded in the 2^nd quarter of 2013 did not recur in the 3^rd quarter of 2013. The decrease in due diligence and merger-related expenses reflected the wind-down of certain merger-related conversion costs associated with the acquisition of Davidson Trust Company as well as the termination, on August 8, 2013, of the merger with MidCoast Community Bancorp.
   
• The tax-equivalent net interest margin of 4.05% for the three months ended September 30, 2013 was a 7 basis point increase from the 3.98% tax-equivalent net interest margin for the three months ended June 30, 2013. The increase between periods was primarily the result of a $36.3 million increase in average loans and leases, partially offset by a $24.4 million decrease in average interest-earning deposits with other banks. The resulting 6 basis point increase in tax-equivalent yield earned on interest-earning assets occurred because of the disparity between the yield earned on interest-earning deposits with other banks and that earned on loans and leases.
   
• Nonperforming loans and leases of $10.6 million as of September 30, 2013 were 0.71% of total portfolio loans and leases, as compared $10.5 million, or 0.73% of total portfolio loans and leases as of June 30, 2013. For the three months ended September 30, 2013, the Corporation recorded net loan and lease charge-offs of $376 thousand, a significant improvement from the $1.0 million net loan and lease charge-offs recorded in the 2^nd quarter of 2013. The provision for loan and lease losses decreased slightly, to $959 thousand, for the three months ended September 30, 2013, as compared to $1.0 million in the previous quarter. Although the level of net loan and lease charge-offs during the quarter declined substantially, the $69.1 million growth in the loan portfolio necessitated this level of provision for loan and lease losses.

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

• Deposits of $1.55 billion, as of September 30, 2013, decreased $84.0 million from December 31, 2012. The 5.1% decrease was largely related to a $73.5 million decrease in time deposits 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 September 30, 2013 was $15.0 million, or 1.00% of portfolio loans as compared to $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."  Additionally, 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 8.32% and 8.30%, respectively, at September 30, 2013. These improvements were primarily the result of increases in retained earnings and issuance of common stock, partially offset by nominal growth in total assets.
   
• Total assets as of September 30, 2013 totaled $2.06 billion, an increase of $23.1 million from December 31, 2012.
   
• Total portfolio loans and leases of $1.50 billion as of September 30, 2013 increased by $101.6 million from December 31, 2012, with commercial mortgages, commercial and industrial loans, and construction loans comprising the majority of the increase.

EARNINGS CONFERENCE CALL

The Corporation will hold an earnings conference call at 8:30 am ET on Friday, October 25, 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 9:00 a.m. ET on Monday, November 11, 2013. The number to call for the taped replay is 1-877-344-7529 and the conference number is 10030506.

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/bmtc131025.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.