Bryn Mawr Bank Corporation Reports Strong Net Income Growth for the Fourth Quarter 2009 and the Full Year

BRYN MAWR, Pa., Jan. 28, 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 fourth quarter 2009 diluted earnings per share of $0.30 and net income of $2.64 million, an increase of $0.18 per share or 150.0%, and an increase of $1.63 million or 161.9% over the fourth quarter of 2008 diluted earnings per share of $0.12 and net income of $1.01 million. The Corporation reported twelve month 2009 diluted earnings per share of $1.18 compared to $1.08 for 2008, an increase of 9.3%. Net income for the year ended December 31, 2009 was $10.34 million compared to $9.33 million one year ago, an increase of 10.9%

Ted Peters, Chairman and Chief Executive Officer, stated, “Given the difficult economic environment that the Bank and its customers are operating in, we were pleased with the financial results for both the fourth quarter and the full year. In addition, our Wealth assets under management and supervision increased to approximately $2.9 billion from a low of approximately $2.0 billion at the end of the first quarter. Our two new initiatives - Bryn Mawr Trust Company of Delaware and BMT Asset Management - gathered approximately $500 million of new assets between them.”

Peters continued, “We are excited that First Keystone Financial, Inc. and its operating subsidiary, First Keystone Bank, has decided to partner with Bryn Mawr Trust. The combination of the two institutions will make us the largest community bank in Delaware County. First Keystone Bank has a rich history of community banking and client service and will be a key element to our future success.”

The proposed merger is subject to certain conditions, including, among others, approval by shareholders of First Keystone Financial, Inc., governmental filings and regulatory approvals and expiration of applicable waiting periods, accuracy of specified representations and warranties in the Agreement and Plan of Merger between the Corporation and First Keystone Financial, Inc. ("Merger Agreement"), absence of a material adverse effect pursuant to the Merger Agreement, receipt of material permits and authorizations for the lawful consummation of merger of First Keystone Financial, Inc. into the Corporation, and First Keystone Bank into the Bank (via a two step merger). First Keystone Financial, Inc.'s shareholders are scheduled to vote on the Merger Agreement and the transactions contemplated thereby at a special meeting of shareholders on March 2, 2010. Assuming all of the necessary conditions are met, the Corporation expects to close the transactions contemplated by the Merger Agreement in the third quarter of 2010.

SIGNIFICANT ITEMS FOR THE QUARTER

• Total Wealth Management Assets at December 31, 2009 were approximately $2.9 billion, up $160.3 million or 5.9% from the third quarter of 2009, and up $724.7 million or 33.8% from December 31, 2008 due in part to improvements in financial markets, new brokerage business, the strong performance of The Bryn Mawr Trust Company of Delaware, and new relationships and accounts in the Wealth Management division.
• Revenue from Wealth Management services for the fourth quarter of 2009 was $3.6 million, up 4.0% from third quarter 2009 revenue of $3.5 million and slightly down from fourth quarter 2008 revenue of $3.7 million. For the twelve month period ending December 31, 2009, revenue from Wealth Management services was $14.2 million, up 2.4% from $13.8 million in the same period last year.
• Deposit levels were $937.8 million at December 31, 2009, up $38.4 million or 4.3% from September 30, 2009, and up $68.4 million or 7.9% from December 31, 2008 as branch activity remains strong. 
• Total year end portfolio loan and lease balances of $885.7 million were down 1.5% or $13.8 million compared to $899.6 million at December 31, 2008 as construction loans decreased $20.0 million or 34.2%, leases declined $11.6 million or 19.5%, and residential mortgages declined $21.9 million or 16.5%. The decline in the construction loan and lease balances was due to Management’s decision to limit exposure to those sections of the loan and lease portfolio. Partially offsetting these decreases were increases from December 31, 2008 in home equity lines and loans in our local market area of $23.3 million or 15.1% and commercial mortgages of $15.3 million or 6.1%.   
• The tax equivalent net interest margin was 3.85% for the fourth quarter of 2009, up 13 basis points from the third quarter 2009 and 22 basis points from the fourth quarter of 2008 primarily due to lower deposit rates, reductions in wholesale and time deposit balances, lower variable rates on subordinated debt and interest rate floors and prudent pricing in the loan portfolio.
• Net interest income for the fourth quarter of 2009 was $10.9 million, up $1.4 million or 14.6% from the same period in 2008 due largely to an increase in the margin and higher volume.
• The Corporation’s investment portfolio increased from a fair market value of $108.3 million at December 31, 2008 to $208.2 million at December 31, 2009 due largely to deployment of cash inflows from strong growth in deposits and the reduction in the loan portfolio. There was no other than temporary impairment (“OTTI”) charge recorded in 2009 or 2008.
• Investment securities gains of $603 thousand were recorded during the quarter ended December 31, 2009. These gains primarily resulted from reducing exposure to certain agency securities and reducing individual company exposure in specific corporate bonds. Investment securities gains for 2009 were $1.9 million compared to $230 thousand for 2008.
• Revenue from the sale of residential mortgage loans for the quarter ended December 31, 2009 was $859 thousand, substantially lower than the windfall production in the first and second quarters of 2009, but higher than the fourth quarter of 2008 when revenue was $293 thousand. Revenue on the sale of residential mortgage loans for the twelve month period ended December 31, 2009 was $6.0 million compared to $1.3 million for 2008.
• At December 31, 2009, the allowance for loan and lease losses of $10.4 million was 1.18% of portfolio loans and leases compared with $10.3 million or 1.16% and $10.3 million or 1.15% at September 30, 2009 and December 31, 2008, respectively. 
• The provision for loan and lease losses for the twelve months ended December 31, 2009 was $6.9 million compared to $5.6 million for 2008.
• Trends within the leasing portfolio have shown improvement as quarterly net charge-offs have continually decreased from $1.6 million in the fourth quarter of 2008 to $763 thousand in the fourth quarter of 2009.
• Non-performing loans and leases are 80 basis points of total portfolio loans and leases at December 31, 2009. The level of non-performing loans and leases has increased from 78 basis points at September 30, 2009 and from 65 basis points at December 31, 2008 primarily due to the economic environment. The majority of these loans are adequately secured by collateral that can substantially liquidate the associated debt.
• Non-interest expense increased in the fourth quarter of 2009 compared to the third quarter of 2009 and fourth quarter of 2008, primarily as a result of due diligence and merger related expenses, professional fees and FDIC insurance.
• Salaries and wages for the twelve months ended December 31, 2009 were $22.3 million which includes residential mortgage incentive pay. The quarterly run rate for salaries and wages in 2010 is expected to be approximately $5.7 million which includes several new BMT Asset Management hires.
• At December 31, 2009, the Corporation had an unused borrowing capacity of $303 million at the Federal Home Loan Bank of Pittsburgh, $55 million at the Federal Reserve and $75 million of Fed Funds lines. Additionally, liquidity remains strong with approximately $38 million at the Federal Reserve and $18 million in money market funds at December 31, 2009.

Capital ratios at December 31, 2009 are all higher then the year ago period primarily due to retained earnings, a 2009 addition of  $7.5 million in subordinated debt and approximately $3.7 million in equity capital, partially offset by an increase in goodwill.

DIVIDEND DECLARED

On January 28, 2010, the Corporation's Board of Directors declared a quarterly dividend of $0.14 per share, payable March 1, 2010 to shareholders of record as of February 8, 2010.

The Corporation will hold an earnings conference call at 8:30 a.m. EDT on Friday, January 29, 2010. Interested parties may participate by calling 800-860-2442, conference #436746, at 8:30 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 February 13, 2010. The number to call for the taped replay is 877-344-7529 and the Replay Passcode is 436746. 

The conference call will be simultaneously broadcast live over the Internet through a web cast 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 web cast 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”, “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 Robert Ricciardi, Secretary, telephone (610) 526-2059.

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.

 * Average loans and leases include portfolio loans and leases, and loans held for sale. Non-accrual loans are also included in the average loan and leases balances.