Bryn Mawr Bank Corporation Reports Strong First Quarter 2010 Results Dividend of $0.14 Per Share Declared

BRYN MAWR, Pa., April 29, 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 first quarter 2010 diluted earnings per share of $0.25 and net income of $2.2 million. Included in the first quarter results are a provision for loan and lease losses of $3.1 million that is largely attributable to one commercial loan relationship, a $1.5 million gain on the sale of investment securities, and merger and due diligence related expenses of approximately $347 thousand associated with the pending merger with First Keystone Financial, Inc.

Ted Peters, Chairman and Chief Executive Officer, stated "Our net income for the first quarter was excellent given that it included securities gains, a much larger than expected provision, and continued merger related costs. Additionally, there have been a number of positive events including a decrease for the second consecutive quarter in non-performing assets which now represents a manageable 0.56% of total assets. In addition our net interest margin rose to 4.06% for the quarter, the third consecutive quarterly increase, and Wealth Management Division assets under management, administration, supervision and brokerage exceeded $3 billion for the first time in the history of the Corporation."

Mr. Peters continued, "We remain excited about our merger with First Keystone Bank. The merger integration and regulatory approval processes are progressing well and we anticipate closing the transaction in July subject to receipt of all necessary regulatory approvals."

SIGNIFICANT ITEMS FOR THE QUARTER

• Total Wealth Management Division assets under management, administration and supervision at March 31, 2010 were approximately $3.1 billion, up $238.4 million or 8.3% from the fourth quarter of 2009, and up $1.2 billion or 58.7% from March 31, 2009 due primarily to the improvements in the financial markets along with the success of BMT Asset Management.
• Revenue from Wealth Management services for the first quarter of 2010 was $3.8 million, up 6.5% from fourth quarter 2009 revenue of $3.6 million and up 9.3% from first quarter 2009 revenue of $3.5 million. 
• Deposit levels were $914.4 million at March 31, 2010, a decrease of $23.5 million or 2.5% from December 31, 2009, partially due to a temporary 2009 year-end inflow from one large commercial customer and a decline in time deposits. Deposit levels increased $27.6 million or 3.1% from March 31, 2009 as new core transaction account openings have continued to grow. 
• First quarter portfolio loan and lease balances of $893.1 million increased 0.8% or $7.4 million compared to $885.7 million at December 31, 2009, led primarily by a 3.8% or $10.0 million increase in commercial mortgages. Partially offsetting these increases was a decline in home equity lines and loans in our local market area of $2.1 million or 1.2% and a planned decline in the lease portfolio of $3.7 million or 7.8%.   
• The tax equivalent net interest margin was 4.06% for the first quarter of 2010, up 21 basis points from the fourth quarter 2009 and 44 basis points from the first quarter of 2009 primarily due to lower deposit rates, reductions in wholesale and time deposit balances, lower variable rates on subordinated debt and prudent pricing strategies in the loan portfolio.
• Tax equivalent net interest income for the first quarter of 2010 was $11.3 million, up $1.6 million or 16.2% from the same period in 2009 due to an increase in the margin and higher volume.
• The Corporation's investment portfolio had a fair market value of $173.8 million at March 31, 2010 compared to $106.2 million at March 31, 2009 due largely to higher cash balances from the strong growth in deposits. The investment portfolio at March 31, 2010 is $34.4 million lower than the December 31, 2009 balance of $208.2 million due to the sales of mortgage backed securities. There was no other than temporary impairment ("OTTI") charge in the first quarter of 2010 or in years 2009 or 2008.
• Investment securities gains of $1.5 million were recorded during the first quarter of 2010. These gains resulted from reducing exposure to mortgage-backed securities by approximately $38 million due to historically tight spreads between mortgage-backed securities and treasuries, the uncertainties surrounding the end of the Federal government's mortgage buying program and to limit extension risk as the Corporation expects interest rates to rise.
• Revenue from the sale of residential mortgage loans for the quarter ended March 31, 2010 was $525 thousand, lower than the production in the fourth quarter of 2009 and during the quarter ended March 31, 2009. However, first quarter 2010 revenue of $525 thousand exceeds the 2008 quarterly average revenue of approximately $319 thousand.  
• At March 31, 2010, the allowance for loan and lease losses of $9.7 million was 1.09% of portfolio loans and leases compared with $10.4 million or 1.18% and $10.1 million or 1.13% at December 31, 2009 and March 31, 2009, respectively. The decrease is mainly attributable to general economic improvements and the overall quality of the loan and lease portfolio. The coverage ratio (allowance for loan and lease loss divided by non-performing loans and leases) at March 31, 2010 was approximately 141% compared to 151% at December 31, 2009 and 254% at March 31, 2009. 
• First quarter 2010 charge-offs of $3.95 million included a $3 million charge-off related to one specific commercial loan of which $750 thousand was specifically reserved for at December 31, 2009.
• The loan and lease loss provision for the quarter ended March 31, 2010 was $3.1 million, compared with $1.3 million and $1.6 million at December 31, 2009 and March 31, 2009, respectively.
• Trends within the leasing portfolio have shown improvement as net charge-offs have continually decreased on a quarterly basis from $1.4 million in the first quarter of 2009 to $545 thousand in the first quarter of 2010.
• Non-performing loans and leases are 77 basis points of total portfolio loans and leases at March 31, 2010. The level of non-performing loans and leases decreased from 78 basis points at December 31, 2009, but increased from 45 basis points at March 31, 2009 primarily due to the economic environment. The majority of these loans are adequately secured by collateral that can substantially liquidate the associated debt.
• In April, the Corporation foreclosed on a $1.5 million non-performing commercial loan. The Corporation expects to fully recover the outstanding loan balance and possibly some of the back interest and costs. Additionally, the Corporation anticipates a second quarter foreclosure on a $595 thousand construction loan which is secured by two newly constructed homes.
• Non-interest expense decreased 1.6%  in the first quarter of 2010 compared to the fourth quarter of 2009, but increased 3.8% from the first quarter of 2009, primarily as a result of due diligence and merger related expenses, professional fees, and the loss on the sale of OREO.
• At March 31, 2010, the Corporation had an unused borrowing capacity of $297 million at the Federal Home Loan Bank of Pittsburgh, $60 million at the Federal Reserve, and $75 million of Fed Funds lines. Additionally, liquidity remains strong with approximately $62 million of cash balances at the Federal Reserve and $9 million in other interest bearing accounts at March 31, 2010.

Regulatory Capital Ratios:

DIVIDEND DECLARED

On April 28, 2010, the Corporation's Board of Directors declared a quarterly dividend of $0.14 per share, payable June 1, 2010 to shareholders of record as of May 10, 2010.

The Corporation will hold an earnings conference call at 8:15 a.m. EDT on Friday, April 30, 2010. Interested parties may participate by calling 800-860-2442, conference #439652, at 8:15 a.m. EDT. A taped replay of the conference call will be available within two hours of the conclusion of the call and will remain available through April 30, 2011. The number to call for the taped replay is 877-344-7529 and the Replay Passcode is 439652. 

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://www.bmtc.com/investor_01.cfm.   An online archive of the webcast will be available within two hours 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. 

This press release contains statements which, to the extent that they are not recitations of historical fact, may constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. 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" 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; and other factors as described in our securities filings. All forward-looking statements and information made 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.

Where to Find More Information About the First Keystone Financial, Inc. Merger

The Corporation has filed with the Securities and Exchange Commission ("SEC") a Registration Statement on Form S-4 concerning the proposed merger of First Keystone Financial, Inc. into the Corporation (the "Merger"). The Registration Statement includes a prospectus for the offer and sale of the Corporation's Common Shares to First Keystone Financial, Inc.'s shareholders as well as a proxy statement for the solicitation of proxies from First Keystone Financial, Inc.'s shareholders for use at the meeting at which the Merger will be voted upon. The combined prospectus and proxy statement and other documents filed by the Corporation with the SEC contain important information about the Corporation, First Keystone Financial, Inc., and the Merger. We urge investors and First Keystone Financial, Inc.'s shareholders to read carefully the combined prospectus and proxy statement and other documents filed with the SEC, including any amendments or supplements also filed with the SEC. First Keystone Financial, Inc.'s shareholders in particular should read the combined prospectus and proxy statement carefully before making a decision concerning the Merger. Investors and shareholders may obtain a free copy of the combined prospectus and proxy statement – along with other filings containing information about the Corporation – at the SEC's website at http://www.sec.gov. Copies of the combined prospectus and proxy statement, and the filings with the SEC incorporated by reference in the combined prospectus and proxy statement, can also be obtained free of charge by directing a request to Bryn Mawr Bank Corporation, 801 Lancaster Avenue, Bryn Mawr, PA 19010, attention Geoffrey Halberstadt, Secretary, telephone (610) 581-4873.

This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation, or sale is unlawful before registration or qualification of the securities under the securities laws of the jurisdiction. No offer of securities shall be made except by means of a prospectus satisfying the requirements of Section 10 of the Securities Act of 1933, as amended.