<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or 15 (d)
of the Securities and Exchange Act of 1934.
For Quarter ended March 31,1995 Commission File Number
------------- 0-15261
-------
Bryn Mawr Bank Corporation
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2434506
- ------------------------------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
801 Lancaster Avenue, Bryn Mawr, Pennsylvania 19010
- --------------------------------------------------------------------------------
(Address of principal executive offices) (ZipCode)
Registrant's telephone number, including area code (610) 525-1700
------------------------------
Not Applicable
- --------------------------------------------------------------------------------
Former name, former address and fiscal year, if changed since last report.
Indicate by check whether the registrant (1) has filed all reports to be filed
by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's class of
common stock, as of the latest practicable date.
Class Outstanding at May 10, 1995
- -----------------------
Common Stock, par value $1 1,093,690
<PAGE>
BRYN MAWR BANK CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED MARCH 31, 1995
INDEX
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENT
Consolidated Statements of Income for Three
Months Ended March 31, 1995 and 1994...........................Page 1
Consolidated Balance Sheets as of March 31, 1995,
December 31, 1994 and March 31, 1994...........................Page 2
Consolidated Statements of Cash Flows For the Three
Months Ended March 31, 1995 and 1994...........................Page 3
Notes to Consolidated Financial Statements..........................Page 4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.................Page 6
PART II - OTHER INFORMATION.............................................Page 12
<PAGE>
ITEM 1. PART I. FINANCIAL INFORMATION
FINANCIAL STATEMENTS
BRYN MAWR BANK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands)
Unaudited
<TABLE>
<CAPTION>
Three Months Ended
March 31
1995 1994
------- -------
<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans..............................$ 4,698 $ 3,726
Interest on federal funds sold.......................... 85 97
Interest on interest bearing deposits with banks........ 4 10
Interest and dividends on investment securities:
U.S. Treasury securities.............................. 553 741
Obligations of states and political subdivisions...... 160 184
Dividend income....................................... 16 14
------- -------
Total interest income...................................... 5,516 4,772
Interest expense on deposits............................... 1,594 1,257
------- -------
Net interest income........................................ 3,922 3,515
Loan loss provision........................................ 125 125
------- -------
Net interest income after loan loss provision.............. 3,797 3,390
------- -------
OTHER INCOME:
Fees for Trust services................................. 1,264 1,200
Service charges on deposits............................. 235 273
Other service charges, commissions and fees............. 270 259
Net gain on sale of loans............................... 41 247
Net gain on sale of other real estate owned............. 55 45
Other operating income.................................. 169 241
------- -------
Total other income......................................... 2,034 2,265
------- -------
OTHER EXPENSES:
Salaries and wages...................................... 1,829 1,854
Employee benefits....................................... 410 497
Occupancy and bank premises............................. 326 354
Furniture, fixtures, and equipment...................... 217 197
Other operating expenses................................ 1,509 1,430
------- -------
Total other expenses....................................... 4,291 4,332
------- -------
Income before income taxes................................. 1,540 1,323
Applicable income taxes.................................... 450 378
------- -------
Net Income.................................................$ 1,090 $ 945
======= =======
Earnings per average common share:
Net income.............................................. $1.00 $0.87
Cash dividends declared................................. $0.25 $0.15
Average number of shares outstanding.......................1,093,690 1,088,610
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
Form 10-Q
Page 1
<PAGE>
BRYN MAWR BANK CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)
<TABLE>
<CAPTION>
March 31, December 31, March 31,
1995 1994 1994
(Unaudited) (Unaudited)
-------------------------------------------------
<S> <C> <C> <C>
ASSETS
Cash and due from banks......................................... $ 19,136 $ 19,353 $ 22,600
Interest bearing deposits with banks............................ 61 1,584 29
Federal funds sold.............................................. 13,152 9,500 12,560
Investment securities available for sale, at market (amortized
cost of $59,594, $59,995 and $80,013 as of March 31, 1995,
December 31, 1994 and March 31, 1994, respectively)......... 58,959 58,563 79,909
Loans:
Consumer.................................................... 75,588 76,828 53,083
Commercial.................................................. 52,516 54,631 49,834
Real Estate................................................. 96,454 97,279 87,606
------- ------- -------
Total loans............................................... 224,558 228,738 190,523
Less: Allowance for possible loan losses.................... (3,633) (3,618) (3,699)
------- ------- -------
Net loans................................................. 220,925 225,120 186,824
------- ------- -------
Premises and equipment, net..................................... 11,629 11,383 11,150
Accrued interest receivable..................................... 1,907 1,999 1,772
Other real estate owned......................................... 3,198 3,475 3,489
Other assets.................................................... 1,857 2,203 2,191
------- ------- -------
Total assets.............................................. $330,824 $333,180 $320,524
======= ======= =======
LIABILITIES
Deposits:
Demand, noninterest-bearing................................. $ 67,175 $ 83,142 $ 65,837
Savings..................................................... 163,613 176,375 179,842
Time........................................................ 66,884 41,820 44,529
------- ------- -------
Total deposits............................................ 297,672 301,337 290,208
Other liabilities............................................... 4,663 4,697 4,949
------- ------- -------
Total liabilities......................................... 302,335 306,034 295,157
------- ------- -------
SHAREHOLDERS' EQUITY
Common stock, par value $1; authorized 5,000,000 shares; issued
1,245,100 shares as of March 31, 1995 and December 31, 1994
and 1,240,020 shares as of March 31, 1994 and outstanding
1,093,690 shares as of March 31, 1995 and December 31, 1994
and 1,088,610 as of March 31, 1994.......................... 1,245 1,245 1,240
Paid-in capital in excess of par value.......................... 5,559 5,559 5,439
Unrealized investment appreciation
(depreciation) net of deferred income taxes................. (419) (945) (43)
Retained earnings............................................... 23,643 22,826 20,270
------- ------- -------
30,028 28,685 26,906
Less: Common stock in treasury at cost -- 151,410 shares........ (1,539) (1,539) (1,539)
------- ------- -------
Total shareholders' equity.................................. 28,489 27,146 25,367
------- ------- -------
Total liabilities and shareholders' equity.................. $330,824 $333,180 $320,524
======= ======= =======
</TABLE>
The accompanying notes are an integral part of consolidated financial
statements.
Form 10-Q
Page 2
<PAGE>
BRYN MAWR BANK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
Unaudited
<TABLE>
<CAPTION>
Three Months Ended
March 31
------------------------
1995 1994
--------- ---------
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income.............................................................. $ 1,090 $ 945
Adjustments to reconcile net income to net cash provided by operating
activities:
Provision for loan losses............................................. 125 125
Provision for depreciation and amortization........................... 241 201
Gain on sale of other real estate owned............................... (55) 0
Loans originated for resale........................................... (5,784) (21,400)
Proceeds from loans sold.............................................. 9,691 20,258
Gain on sale of loans................................................. (41) (247)
Provision for (reduction in) deferred income taxes.................... (54) (122)
Decrease in taxes receivable.......................................... 505 105
Decrease in interest receivable....................................... 92 118
Increase in interest payable.......................................... 510 160
Other................................................................. (908) (1,027)
------- -------
Net cash (used) provided by operating activities.................... 5,412 (884)
------- -------
INVESTING ACTIVITIES:
Purchases of investment securities...................................... 37 (8,215)
Proceeds from maturity of fixed income securities....................... 410 8,287
Loan repayments, net of loan originations............................... 6,755 7,342
Loan purchased (dealer loans)........................................... (6,551) (4,786)
Purchases of premises and equipment..................................... (459) (224)
Proceeds from disposition of other real estate owned.................... 332 360
------- -------
Net cash used by investing activities............................... 524 2,764
------- -------
FINANCING ACTIVITIES:
Net increase in demand and savings deposits............................. (28,729) (1,559)
Net decrease in time deposits........................................... 25,064 693
Dividends paid.......................................................... (273) (162)
Repayment of mortgage debt.............................................. (12) (19)
------- -------
Net cash provided by financing activities........................... (3,950) (1,047)
------- -------
Decrease in cash and cash equivalents................................... 1,986 833
Cash and cash equivalents at beginning of period........................ 30,437 34,356
------- -------
Cash and cash equivalents at end of period.............................. 32,423 $ 35,189
======= =======
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid..................................................... $ 0 $ 255
Interest paid......................................................... $ 1,084 $ 1,097
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
Form 10-Q
Page 3
<PAGE>
BRYN MAWR BANK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995 AND 1994
1. Unaudited Interim Results:
The consolidated balance sheets of Bryn Mawr Bank Corporation (the
"Corporation") as of March 31, 1995 and 1994, the consolidated statements of
cash flows for the three month periods ended March 31, 1995 and 1994 and the
related consolidated statements of income for the three month periods ended
March 31, 1995 and 1994 are unaudited. Management believes that all adjustments,
accruals and elimination entries necessary for the fair presentation of the
consolidated financial position and results of operations for the interim
periods presented have been made. The year-end balance sheet data was derived
from audited financial statements, but does not include all disclosures required
by generally accepted accounting principles. These financial statements should
be read in conjunction with the Notes to Consolidated Financial Statements
contained in the Corporation's 1994 Annual Report incorporated in the 1994 Form
10-K (Exhibit #13).
2. Earnings Per Common Share:
Reference is made to Note #10, Stock Option Plan (the "Plan"), in the Notes
to Consolidated Financial Statements in the Corporation's 1994 Annual Report
incorporated in the 1994 Form 10-K (Exhibit #13). Shares under option under the
Plan did not have a materially dilutive impact on net income per share for the
three month periods ended March 31, 1995 or 1994.
3. Disclosure of Accounting Policy:
For purposes of reporting cash flows, cash and cash equivalents include
cash on hand, interest bearing deposits with banks and federal funds sold.
4. Adoption of Financial Accounting Standards:
Effective January 1, 1994, the Corporation adopted Statement of Financial
Accounting Standard No. 115, "Accounting for Certain Investments in Debt and
Equity Securities", ("SFAS No. 115"). SFAS No. 115 requires all entities to
allocate their investments among three categories, as applicable. The categories
are: (1) trading, (2) available for sale and (3) held to maturity. The
Corporation has chosen to include all of its investment securities in the
available for sale category. Investments classified as available for sale are
carried at market value with the change in unrealized appreciation
(depreciation) credited (charged) directly to shareholders' equity, net of
applicable deferred income taxes. The cumulative effect of adopting SFAS No.
115, as of January 1, 1994, represented by the unrealized appreciation of
investment securities available for sale of $1,307,000, net of the related
deferred income taxes of $444,000, was recorded as a separate component of
shareholders' equity, amounting to an increase in shareholders' equity of
$863,000.
Form 10-Q
Page 4
<PAGE>
As of March 31, 1995 and 1994, the unrealized depreciation of investment
securities classified as available for sale, net of deferred taxes, decreased
shareholders' equity by $419,000 and $43,000, respectively.
During the first quarter of 1995, the Corporation adopted Statement of
Financial Accounting Standards No. 114, "Accounting by Creditors for Impairment
of a Loan" ("SFAS No. 114"), as amended by Statement of Financial Accounting
Standards No. 118, "Accounting by Creditors for Impairment of a Loan - Income
Recognition and Disclosures". SFAS No. 114 requires measurement of impaired
loans based on the present value of expected future cash flows discounted at the
loan's effective interest rate, or at the loan's observable market price or the
fair value of the collateral. SFAS No. 114 does not apply to large groups of
smaller-balance homogeneous loans that are collectively evaluated for
impairment. The adoption of SFAS No. 114 did not have a material impact on the
financial position or results of operations of the Corporation.
5. Loans:
As of March 31, 1995, the recorded investment in loans for which impairment
has been recognized in accordance with SFAS No. 114 totaled $2,163,000. The
amount of impaired loans for which there is a related allowance for loan losses
is $1,775,000 and the specific allowance is $337,000. The amount of impaired
loans for which there is no related allowance for loan losses is $388,000.
Interest on loans, including impaired loans, is accrued only if deemed
collectible. Unpaid interest income is reversed when a loan becomes over 90 days
deliquent and on other loans prior to 90 days if management determines it is
warranted. Any principal or interest received on impaired loans is recorded as a
direct reduction of the recorded investment in the loan. When the the recorded
investment has been fully collected, any additional amounts collected are
recognized as interest income.
6. Allowance for Possible Loan Losses:
The summary of changes in the allowance is as follows:
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994 1994
---------------- --------
<S> <C> <C> <C>
Balance, January 1 $3,618 $3,601 $3,601
------- ------- -------
Charge-offs:
Consumer (60) (59) (365)
Commercial and industrial (67) 0 0
Real estate (8) 0 (298)
------- ------- -------
Total charge-offs (135) (59) (663)
------- ------- -------
Recoveries:
Consumer 12 9 45
Commercial and industrial 13 23 115
Real estate 0 0 20
------- ------- -------
Total recoveries 25 32 180
------- ------- -------
Net charge-offs (110) (27) (483)
Provision for loan losses 125 125 500
------- ------- -------
Balance $3,633 $3,699 $3,618
======= ======= =======
</TABLE>
Form 10-Q
Page 5
<PAGE>
ITEM 2.
BRYN MAWR BANK CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
Bryn Mawr Bank Corporation (the "Corporation"), the parent company of the
Bryn Mawr Trust Company (the "Bank), reported net income of $1,090,000 for the
first three months of 1995, a 15% increase over $945,000 of net income reported
for the first quarter of 1994. Earnings per common share for the quarter
amounted to $1.00, a 15% increase over earnings per common share of $.87
reported for the first quarter of 1994. Per share computations were based on
1,093,690 and 1,088,610 average shares outstanding for the first three months of
1995 and 1994, respectively.
The increase in 1995 first quarter earnings over the 1994 first quarter
earnings is primarily a result of the increases in interest rates during 1994
and 1995. As interest rates rose in the beginning of 1994, so did the
Corporation's net interest margin, which is the difference between the rate
earned by the Bank on its interest-bearing assets and the rate paid to fund the
interest-earning assets. Largely offsetting the increased income realized
because of the increase in the net interest margin was a decrease in the income
from the mortgage banking business which slowed significantly since the first
quarter of 1994.
Management currently believes that, in an increasing interest rate
environment, the expected increase in net interest margin will help offset any
decrease in mortgage origination and sale revenue. While interest rate movements
and their effect on future revenue streams cannot be predicted, management
believes that there are presently no known trends, events or uncertainties that
will have or are reasonably likely to have a material effect on the
Corporation's liquidity, capital resources or results of operations in the
future.
NET INTEREST INCOME
- -------------------
For the three months ended March 31, 1995, net interest income rose 12% to
$3,922,000 from $3,515,000 in 1994. While total interest income grew 16% for the
first quarter of 1995, to $5,516,000 from $4,772,000 in the first quarter of
1994, interest expense increased 27% over the same periods. Interest expense for
the three months ended March 31, 1995 and 1994 was $1,594,000 and $1,257,000,
respectively. Overall, the yield on earning assets for the first quarter of 1995
was 7.6% versus 6.8% for the first quarter of 1994 while the effective rate paid
on interest bearing liabilities for the first quarter of 1995 and 1994 was 2.8%
and 2.3%, respectively. The increase in both the yield on earning assets and the
cost of liabilities is due to the increase in interest rates during 1994 and
1995.
Form 10-Q
Page 6
<PAGE>
Interest and fees on loans increased 26% from $3,726,000 for the first
quarter of 1994 to $4,698,000 for the first quarter of 1994. While the average
yield on the loan portfolio increased from 7.9% for the first quarter of 1994 to
8.4% for 1995, the primary reason for the 26% increase in loan income was a 19%
increase in the daily average outstanding loan balances from $188,975,000, for
the first three months of 1994 to $224,669,000 for the same period in 1995.
Interest income on investments decreased 22% from the first quarter of 1994
to the first quarter of 1995. The primary decrease was in interest from U.S.
Treasury obligations which decreased 25% from $741,000 from the first quarter of
1994 to $553,000 for the first quarter of 1995. The daily average balance of
U.S. Treasury securities decreased by $18 million from $64,060,000 during the
first three months of 1994 to $46,128,000 for the comparable period in 1995. The
decrease in U.S. Treasury obligations, which was primarily a result of
investment maturities as opposed to sales, was necessary in order to fund the
loan growth. The yield on investment securities increased slightly from 4.8% to
5.0% for the first quarters of 1994 and 1995, respectively.
Interest expense on deposits increased 27% as the average rate paid on
interest bearing liabilities increased 50 basis points from 2.3% in the first
quarter of 1994 to 2.8% in the first quarter of 1995. The rate paid on interest
bearing liabilities increased for two reasons. The overall rate paid on deposits
increased during 1994 and 1995 as interest rates increased. Additionally, in
order to help fund loan growth, the Bank offered a "Premier" certificate of
deposit product with an attractive interest rate. Therefore, raising over
$15,000,000 in new funds during the first quarter of 1995 through the
certificate of deposit promotion contributed to the increase in the average
effective rate paid on deposits during the first quarter of 1995 compared to the
similar quarter in 1994. The daily average interest bearing deposit balances
remained relatively consistent at $225,000,000 from quarter to quarter however,
the deposit mix has changed. For the first quarter of 1994, average time
deposits represented 20% of the Bank's interest bearing deposits compared to 26%
for the first quarter of 1995.
The net interest margin rose 10% for the first quarter of 1995 to 5.28%
from 4.78% for the first three months of 1994. The increase in the net interest
margin is due to earning assets repricing faster than the costing liabilities as
interest rates increase. The net interest margin is computed exclusive of
related loan fee income.
LOAN LOSS PROVISION
- -------------------
The loan loss provision represents management's determination of the amount
necessary to be charged against the current year's income in order to maintain
an adequate loan loss reserve. The Bank maintains an Officer Loan Review
Committee (the "Committee") and retains the services of an independent loan
review consultant. The independent consultant performs an independent review of
the Bank's loan portfolio and the loan loss reserve. The Committee meets monthly
to review the adequacy of the loan loss reserve as well as all nonaccrual loans,
any potential problem loans and loans criticized by either the Bank's regulators
or the independent consultant.
Form 10-Q
Page 7
<PAGE>
Based on ratings assigned by the Committee on the quality of the loans
which are reviewed, a specific reserve may be computed for each loan. In
addition to the specific reserve amounts, the balance of loans not reviewed by
the Committee has a reserve computed based on the average of the prior five
years write-offs plus the annualized write-offs for the current year. Including
annualized write-offs for the current year takes into consideration current
trends in both volumes and write-offs, to be included in the computation.
Finally, an amount equal to .5% of all outstanding loans is included in the loan
loss reserve calculation to address possible unforeseen loan loss reserve
requirements. The sum of the specific reserves, the reserve calculated based on
average write-offs and the reserve calculated based on the entire portfolio for
possible unforeseen loan losses are compared to the Bank's current loan loss
reserve balance. Any additions deemed necessary to the loan loss reserve are
then made on a timely basis.
Based on the results of the aforementioned reviews, the loan loss provision
was $125,000 for the first three months of both 1995 and 1994. The loan loss
reserve amounted to 1.6% of outstanding loans at March 31, 1995 and 1.9% in
1994. Nonperforming loans have decreased 48% to $1,128,000 as of March 31, 1995,
down from $2,181,000 as of March 31, 1994. The loan loss reserve amounted to
322% of nonperforming loans as of March 31, 1995 compared to 170% as of March
31, 1994. Based on the results of both the internal and external loan review
processes and the current level of nonperforming loans, management believes the
loan loss reserve to be adequate as of March 31, 1995.
During the first quarter of 1995, the Corporation adopted Statement of
Financial Accounting Standard No. 114, "Accounting by Creditors for Impairment
of a Loan" ("SFAS No. 114"), as amended by Statement of Financial Accounting
Standards No. 118, "Accounting by Creditors for Impairment of a Loan - Income
Recognition and Disclosures". SFAS No. 114 requires measurement of impaired
loans based on the present value of expected future cash flows discounted at the
loan's effective interest rate, or at the loan's observable market price or the
fair value of the collateral. SFAS No 114 does not apply to large groups of
smaller-balance homogeneous loans that are collectively evaluated for
impairment. The adoption of SFAS No. 114 did not have a material impact on the
financial position or results of operations of the Corporation.
OTHER INCOME
- ------------
Other income fell 10% from $2,265,000 as of March 31, 1994 to $2,034,000 as
of March 31, 1995.
While the rise in short term interest rates proved beneficial to the
Corporation's core business of banking, it was primarily responsible for a
decline in the income from the Bank's mortgage banking line of business. The
combined decrease in fees and net gains on the origination and sale of mortgages
loans was $199,000 from quarter to quarter. In the first quarter of 1994, which
was the last strong quarter for the mortgage banking segment, fees and net gains
on loans sales amounted to $308,000 compared to $109,000 that was earned in the
first quarter of 1995. Loans originated and sold in the first quarter of 1994 of
$19,769,000 were over 150% more than the $7,847,000 originated and sold in the
first quarter of 1995.
Form 10-Q
Page 8
<PAGE>
The increase in interest rates was also responsible for a $38,000, or 14%,
decrease in service charges on deposit accounts, due primarily to increases in
the earnings credit rate used to offset these service charges. Other service
charges, commissions and fees also decreased 15% as mortgage documentation fees
decreased in connection with the decline in the mortgage origination activity.
Trust fees were up $64,000, or 5%, to $1,264,000 for the quarter from $1,200,000
for the first quarter of 1994.
OTHER EXPENSE
- -------------
Total other expense decreased 1% for the first three months of 1995 to
$4,291,000 from $4,332,000 for the first three months ended in 1994. Salaries
and wages were down 1% from quarter to quarter. This is a result of the decrease
in the revenue generated by the mortgage banking line of business. As mortgage
originations declined, the staff was reduced and less incentive compensation was
earned by the remaining staff. These expense savings were partially offset by
the effect of some Bank-wide merit increases that were granted throughout 1994
and 1995. Fringe benefits are down $87,000 from last year primarily a result of
the receipt of a $63,000 refund on health insurance premiums for the 1993 policy
year due to favorable claims experience.
Occupancy expense was down 8% from the first quarter of 1994 as repair and
maintenance costs incurred in the first quarter of 1994 were unusually high due
to the severe winter in 1994. Furniture and equipment expenses grew 10% over the
first quarter of 1994 as depreciation began in the middle of 1994 on the
purchase and installation of a bank-wide local area network (LAN). Other
operating expenses increased 6% over the first quarter of 1994 as computer
processing, ATM charges, and postage costs increased from quarter to quarter.
APPLICABLE INCOME TAXES
- -----------------------
The Corporation's effective tax rate for the first quarter of 1995 was 29%
compared to 28% for 1994. The slight increase is due to a decrease in the tax-
favored income from obligations from states and political subdivisions. The
decrease in tax-favored income corresponds to the decrease in the investment
portfolio necessary to fund the loan growth.
FINANCIAL CONDITION
- -------------------
Total assets decreased 1% from $333,180,000 at December 31, 1994 to
$330,824,000 as of March 31, 1995. Total assets grew 3% from $320,524,000 as of
March 31, 1994.
Outstanding earning assets decreased 1% to $296,730,000 as of March 31,
1995 from $298,385,000 as of December 31, 1994. The Bank's loan portfolio
decreased 2% to $224,558,000 at March 31, 1995 from $228,738,000 as of December
31, 1994 as all loan categories, consumer, commercial and real estate,
experienced slight declines. However, from March 31, 1994, all loan categories
grew, with the consumer loan portfolio growing the most, by 42%. Consumer loans
at March 31, 1994 were $53,083,000; at March 31, 1995, consumer loans were
$75,588,000. The consumer loan portfolio consists primarily of shorter term
direct consumer loans and purchased automobile dealer loans. This portfolios
growth is a result of the Bank expanding the network of automobile dealerships
from which dealer loans are purchased.
Form 10-Q
Page 9
<PAGE>
The Bank's investment portfolio, having a market value of $58,959,000 at
March 31, 1995, increased 1% from a value of $58,563,000 at December 31, 1994
and decreased 26% from $79,909,000 as of March 31, 1994. The decrease in the
investment portfolio from March 1994 to March 1995 was primarily used to fund
the increase in the Bank's loan portfolio over the same period. As of January 1,
1994, the Corporation adopted Statement of Financial Accounting Standards No.
115, "Accounting for Certain Investments in Debt and Equity Securities", ("SFAS
No. 115"). SFAS No. 115 requires all entities to allocate their investments
among three categories as applicable: (1) trading, (2) available for sale and
(3) held to maturity. The Corporation has chosen to include all of its
investment securities in the available for sale category. Investments in this
category are reported at the current market value with net unrealized gains or
losses, net of the deferred tax effect, being added or deducted from the
Corporation's total equity on the balance sheet. Due to maturities and the
shortening of the average term of the investment portfolio, as of March 31,
1995, the amount of the net unrealized loss on investment securities decreased
to $635,000 from $1,432,000 at December 31, 1994. The unrealized investment
depreciation, net of deferred income taxes, reduced the Corporation's
shareholders' equity on the balance sheet by $419,000 as of March 31, 1995.
The balance of federal funds sold increased from $12,560,000 at March 31,
1994 and $9,500,000 at December 31, 1994 to $13,152,000 as of March 31, 1995.
The increase is a result of the availability of funds to the Bank from the
certificate of deposit promotion during the first quarter. The portion of these
funds that were not used for loans or investments, were sold overnight to other
banks.
Nonperforming assets amounted to $4,326,000 at March 31, 1995, a slight
increase from $4,251,000 at December 31, 1994 and a 24% decrease from
nonperforming assets of $5,670,000 at March 31, 1994. Nonperforming loans
increased 45% to $1,128,000 at March 31, 1995 compared to nonperforming loans of
$776,000 at December 31, 1994 and decreased 48% from $2,181,000 as of March 31,
1994. The increase in nonperforming loans from year-end 1994, was a result of of
a loan whereby the borrower began experiencing cash flow difficulties in the
first quarter. The OREO balances decreased 8% from $3,475,000 as of December 31,
1994 to $3,198,000 at March 31, 1995, which was an 8% decrease from an OREO
balance of $3,489,000 at March 31, 1994.
As of March 31, 1995 and 1994, there were no loans classified for
regulatory purposes as loss, doubtful, substandard or special mention that
either (i) represent or result from trends or uncertainties which management
reasonably expects will impact future operating results, liquidity, or capital
resources, or (ii) represent material credits about which management is aware of
any information, causing management to have serious doubts as to the borrower's
ability to comply with the loan repayment terms.
Total deposits decreased 1% to $297,672,000 as of March 31, 1995 from
$301,337,000 as of December 31, 1994. A more meaningful measurement of deposit
growth is the change in daily average outstanding deposit balances. Total daily
average outstanding deposit balances grew 1% to $292,387,000 for the three month
period ended March 31, 1995 from $289,570,000 for the same period in 1994.
Although the amount of total deposits remained relatively stable, as previously
mentioned,the mix of deposits has shifted. As the Bank
Form 10-Q
Page 10
<PAGE>
raised approximately $15,000,000 in new funds from a "Premier" certificate of
deposit promotion, the percentage of average time deposits to the total average
interest bearing deposits for the first quarter of 1995 was 26% compared to 20%
for the first quarter of 1994. Noninterest bearing demand deposit daily average
outstanding balances grew 2% over the same period.
LIQUIDITY, INTEREST RATE SENSITIVITY
- ------------------------------------
The Bank's liquidity is maintained by managing its core deposits, selling
loans in the secondary market, borrowing from the Federal Home Loan Bank and
managing its' position in the federal funds market. The Bank, through its
internal Asset/Liability Committee ("ALCO"), has adopted Risk Management Polcies
and Procedures (the "Policy") for monitoring goals for both liquidity and
interest rate sensitivity. Periodically, ALCO reviews the Bank's liquidity
ratio, comparing liquid assets, cash, unpledged investments and federal funds
sold against deposits, net of certificates of deposit in excess of $100,000. It
is the presently the goal of ALCO to maintain a ratio of not less than 20%. This
ratio was 27% at March 31, 1995, compared to 24% at December 31, 1994 and 35% at
March 31, 1994.
In the short term, 30 days or less, the Bank is asset rate sensitive after
adjusting the interest rate sensitivity of savings deposits based on
management's experience and assumptions regarding the impact of product pricing,
interest rate spread relationships and customer behavior. Asset rate sensitivity
will result in a greater portion of assets compared to deposits repricing with
changes in interest rates within specified time periods. The opposite effect
results from being liability sensitive. Asset rate sensitivity in the short term
in an increasing rate environment should produce an increase in net interest
income. The Bank uses simulation models to measure its interest rate risk and to
manage its interest rate sensitivity. The simulation models consider not only
the impact of changes in interest rates on forecasted net interest income, but
also such factors as yield curve relationships, possible loan prepayments, and
deposit withdrawals. As of March 31, 1995, based on the results from the
simulation models, the amount of the Bank's interest rate risk was within the
acceptable range as established by the Policy.
CAPITAL RESOURCES
- -----------------
Total consolidated shareholders equity of the Corporation was $28,489,000,
or 8.6% of total assets, as of March 31, 1995, compared to total shareholders
equity of $27,146,000, or 8.1% of total assets, as of December 31, 1994. As of
March 31, 1994, shareholders' equity was $25,367,000, or 7.9% of total assets.
The Corporation's risk weighted Tier I capital ratio was 11.95% as of March 31,
1995 compared to 11.45% and 11.98% at December 31, 1994 and March 31, 1994,
respectively. The respective Tier II ratios were 13.20%, 12.70% and 13.23%,
respectively. The Corporation declared a dividend of $.25 per share in January
1995, a 67% increase over the dividend declared of $.15 in January 1994.
Form 10-Q
Page 11
<PAGE>
PART II. OTHER INFORMATION
--------------------------
MARCH 31, 1995
ITEM 1. LEGAL PROCEEDINGS
--------
NONE
ITEM 2. CHANGES IN SECURITIES
--------
NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
--------
NONE
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY
--------
HOLDERS
NONE
ITEM 5. OTHER INFORMATION
--------
NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------
NONE
Form 10-Q
Page 12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Bryn Mawr Bank Corporation
Date: May 10, 1995 By:/s/ Robert L. Stevens
------------- -----------------------
Robert L.Stevens
President
Date: May 10, 1995 By:/s/ Joseph W. Rebl
------------- -----------------------
Joseph W. Rebl
Treasurer and
Assistant Secretary
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCH
31, 1995 FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 19,136
<INT-BEARING-DEPOSITS> 61
<FED-FUNDS-SOLD> 13,152
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 58,959
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 224,558
<ALLOWANCE> 3,633
<TOTAL-ASSETS> 330,824
<DEPOSITS> 297,672
<SHORT-TERM> 0
<LIABILITIES-OTHER> 4,663
<LONG-TERM> 0
<COMMON> 0
1,245
0
<OTHER-SE> 27,244
<TOTAL-LIABILITIES-AND-EQUITY> 330,824
<INTEREST-LOAN> 4,698
<INTEREST-INVEST> 733
<INTEREST-OTHER> 85
<INTEREST-TOTAL> 5,516
<INTEREST-DEPOSIT> 1,594
<INTEREST-EXPENSE> 1,594
<INTEREST-INCOME-NET> 3,922
<LOAN-LOSSES> 125
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 4,291
<INCOME-PRETAX> 1,540
<INCOME-PRE-EXTRAORDINARY> 1,540
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,090
<EPS-PRIMARY> 1.00
<EPS-DILUTED> 1.00
<YIELD-ACTUAL> 5.28
<LOANS-NON> 1,128
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,618
<CHARGE-OFFS> 135
<RECOVERIES> 25
<ALLOWANCE-CLOSE> 3,633
<ALLOWANCE-DOMESTIC> 2,575
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,058
</TABLE>
