<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-K
(Mark One)
[X]Annual report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 [Fee required] for the fiscal year ended
December 31, 1994 or
[ ]Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 [No fee Required] for the transition period
from_______________ to________________
Commission file number 0-15261.
--------
BRYN MAWR BANK CORPORATION
-------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
Pennsylvania 23-2434506
------------------------------------- --------------
(State of other jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
801 Lancaster Avenue, Bryn Mawr, Pennsylvania 19010
--------------------------------------------- ------
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number,including area code) (610) 525-1700
--------------
</TABLE>
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
------------------- ------------------------
NONE NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock ($1 par value)
-----------------------------------------------------------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 of 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period than 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 by check mark if disclosure of delinquent filers pursuant to Item 405
or Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
1 of 2
<PAGE>
The aggregate market value of shares of common stock held by non-affiliates of
Registrant (including fiduciary accounts administered by affiliates*) was
$36,091,770 on March 15, 1995.
As of March 15, 1995, 1,093,690 shares of common stock were outstanding.
Documents Incorporated by Reference: Parts I, II and IV - Portions of
-----------------------------------
Registrant's Annual Report to Shareholders for the year ended December 31, 1994,
as indicated, Part III - Definitive Proxy Statement of Registrant filed with the
Commission pursuant to Regulation 14A.
*Registrant does not admit by virtue of the foregoing that its officers and
directors are "affiliates" as defined in Rule 405 and does not admit that it
controls the shares Registrants voting stock held by the Trust Department of its
bank subsidiary.
The exhibit index is on pages 33 through 34. There are 38 pages in this report.
2 of 2
<PAGE>
Form 10-K
Bryn Mawr Bank Corporation
Index
<TABLE>
<CAPTION>
Item No. Page
--------
<S> <C> <C>
Part I
1. Business............................................... 3
2. Properties............................................. 23
3. Legal Proceedings...................................... 26
4. Submission of Matters to a Vote of Security Holders.... 26
Part II
5. Market for Registrant's Common Equity and Related
Stockholder Matters.................................... 27
6. Selected Financial Data................................ 27
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................... 27
8. Financial Statements and Supplementary Data............ 27
9. Change in and Disagreements with Accountants on
Accounting and Financial Disclosure.................... 28
Part III
10. Directors and Executive Officers of Registrant......... 28
11. Executive Compensation................................. 32
12. Security Ownership of Certain Beneficial Owners and
Management............................................. 32
13. Certain Relationships and Related Transactions......... 32
Part IV
14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K............................................ 33
</TABLE>
UNLESS OTHERWISE INDICATED, ALL INFORMATION IS AS OF MARCH 15, 1995
<PAGE>
PART I
------
ITEM 1. BUSINESS
-----------------
GENERAL
-------
BRYN MAWR BANK CORPORATION
--------------------------
Bryn Mawr Bank Corporation (the "Corporation"), hereinafter sometimes
referred to as the Registrant, was incorporated under the laws of the
Commonwealth of Pennsylvania on August 8, 1986. The Corporation is a bank
holding company registered under the Bank Holding Company Act of 1956, as
amended (the "Act"). On January 2, 1987, under a Plan of Reorganization, the
Corporation acquired all of the issued and outstanding shares of The Bryn Mawr
Trust Company (the "Bank"), through an exchange of three shares of the
Corporation stock for each share of Bank
stock issued.
THE BRYN MAWR TRUST COMPANY
---------------------------
The Bank, the principal subsidiary of the Corporation, is a state chartered
bank subject to the Pennsylvania Banking Code of 1965, as amended, and was
incorporated under the laws of the Commonwealth of Pennsylvania on March 25,
1889. The Bank is engaged in general commercial and retail banking business,
providing basic banking services as well as a full range of trust services.
3
<PAGE>
OPERATIONS OF BRYN MAWR FINANCIAL SERVICES, INC. AND PROFIT RESEARCH CONSULTING,
INC. ARE DISCONTINUED.
Bryn Mawr Financial Services, Inc. ("BMFS") and Profit Research
Consulting Inc. ("PRC") were formed to provide counter-cyclical fee income to
the Corporation of a different nature than the predominately interest income
earned by the Bank. During 1992 the Corporation's management evaluated the
financial performance and the current and estimated future additional capital
requirements of these entities. Based on that evaluation, the Corporation's
management determined to dissolve PRC and discontinue the operations of BMFS.
However, the Corporation may again commence the operations of BMFS at a future
time.
SUMMARY
-------
The Corporation will concentrate its resources to expand the Bank's market
penetration by providing superior deposit, lending, trust and other banking
services to its existing customers and obtain additional customers in its market
in Montgomery, Delaware and Chester counties of Pennsylvania and to successfully
address the other challenges in the Bank's ever changing competitive market.
4
<PAGE>
OPERATIONS
----------
BRYN MAWR BANK CORPORATION
--------------------------
The Corporation had no active staff as of December 31, 1994 and conducted
no activities other than those activities through its banking subsidiary, except
for the leasing of two properties, owned by Corporation, to the Bank, as
discussed in Item 2. Properties.
A complete list of directors and officers of the Corporation, as of
February 1, 1995 is incorporated by reference to page 36 and the inside of the
back cover of the Corporation's Annual Report to Shareholders for the year ended
December 31, 1994.
THE BRYN MAWR TRUST COMPANY
---------------------------
The Bank is engaged in general, commercial and retail banking business,
providing basic banking services, including the acceptance of demand, time and
savings deposits and the making of commercial, real estate and consumer loans
and other extensions of credit. The Bank also provides a full range of trust
services including estate administration, investment advisory services, pension
and profit sharing administration and personal financial planning, including tax
preparation. As of December 31, 1994, the market value of assets administered
by the Bank's Trust Division was $799,846,000.
After expanding its mortgage origination operations in 1992 and 1993 in
response to the demand for mortgage loans created by falling interest rates, the
Bank's mortgage origination operation contracted during 1994 as interest rates
increased during the year. As of March 1995, the Bank has five commissioned
mortgage originators. The Bank originated and sold $39,109,000 in residential
mortgages to the secondary market in 1994 compared to $108,685,000 originated
and sold in 1993. Net gains and loan fee income amounted to $591,000 in 1994
compared to $1,990,000 in 1993. During 1992 the Bank originated and sold in
excess of $93,000,000 in residential mortgage loans, generating
5
<PAGE>
$1,302,000 in related loan fee income, net of related loan sale losses. The
operations and data processing support for the banking services provided by the
Bank were supplied by Financial Institution Outsourcing, a division of Mellon
Bank, N. A. under a five-year servicing contract, expiring December 31, 1995
which is incorporated by reference into the Corporation's 10-K, filed with the
Securities and Exchange Commission (the "Commission") on March 26, 1991. In
November 1993, Mellon Bank sold its outsourcing division to FISERV, Inc., an
outsourcing data processing company located in Brookfield, IL. The Bank
renegotiated its licensing and servicing agreement with FISERV in 1994 for the
in-house data processing systems commencing in the fourth quarter of 1995.
At December 31, 1994, the Bank had 182 full time and 29 part time
employees, including 71 officers, equalling 196 full time equivalent staff.
6
<PAGE>
SOURCES OF THE CORPORATION'S REVENUE
------------------------------------
The following table shows the percentage of consolidated revenues by major
source generated by the Corporation from the activities indicated below.
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Commercial Loans 14% 12% 12% 12% 14%
Mortgage and Construction Loans 15 16 23 29 36
Consumer Loans 25 24 26 24 22
Home Equity/Line of Credit 3 2 2 3 4
Securities 13 12 10 8 5
Federal Funds Sold 1 1 2 4 2
--- --- --- --- ---
Total Interest Income 71 67 75 80 83
Trust Services 16 15 14 12 10
Other Income * 13 18 11 8 7
--- --- --- --- ---
Total Revenues 100% 100% 100% 100% 100%
==== ==== ==== ==== ====
</TABLE>
* There were no revenues generated by BMFS and PRC during 1994 or 1993. All
revenues were generated by the Bank during 1994 and 1993. Revenues generated by
BMFS and PRC aggregated 1.3%, 1.0% and 0.7% in 1992, 1991, and 1990
respectively.
7
<PAGE>
STATISTICAL INFORMATION
-----------------------
The statistical information required in this Item I is incorporated by
reference to the information appearing in Corporation's Annual Report to
Shareholders for the year ended December 31, 1994, as follows:
Disclosure Required by Industry Reference to the Corporation's
------------------------------- ------------------------------
Guide 3 1994 Annual Report
------- ------------------
I. Distribution of Assets, Liabilities
and Stockholders Equity; Interest
Rates and Interest Differential
A. Average balance sheets, interest-
income and expense; average rates
earned/paid . . . . . . . . . . . . Analyses of Interest Rates and
Interest Differential (page 12)
B. Rate/Volume Differentials . . . . . Rate/Volume Analyses (page 13)
C. Non-Accrual Policy. . . . . . . . . Loan Portfolio and Non-performing
Asset Analysis (page 17)
D. Interest Rate Sensitivity
Analysis. . . . . . . . . . . . . . Interest Rate Sensitivity
Analysis (page 20)
II. Investment Portfolio
A. Book Values . . . . . . . . . . . . Notes to Consolidated Financial
Statements, Note 3 (page 27)
B. Maturities. . . . . . . . . . . . . Notes to Consolidated Financial
Statements, Note 3 (page 27)
III. Loan Portfolio
A. Types of Loans. . . . . . . . . . . Loan Portfolio (page 16)
B. Maturities and Sensitivity to
changes in Interest Rates . . . . . Loan Portfolio - Maturity
distribution (page 16)
Interest Rate Sensitivity
Analysis (page 20)
C. Non-Performing assets . . . . . . . Non-Performing Assets (page 19)
8
<PAGE>
Disclosure Required by Industry Reference to the Corporation's
------------------------------- ------------------------------
Guide 3 1994 Annual Report
------- ------------------
IV. Summary of Loan Loss Experience
A. Analysis of Loss Experience . . . . Allowance for Possible Loan
Losses (page 13)
B. Allocation of Allowance for
Loan Losses . . . . . . . . . . . . Allocation of the Allowance
for Possible Loan Losses
(page 14)
V. Deposits
A. Average Deposits. . . . . . . . . . Average Daily Balances of
Deposits (Page 18)
B. Maturity tables and outstanding
balances, deposits $100,000 or
more. . . . . . . . . . . . . . . . Maturity of Certificates of
Deposit of $100,000 or
Greater (page 18)
VI. Return on Equity and Assets. . . . . . . Selected Financial Data (page 9)
9
<PAGE>
COMPETITION
-----------
The Corporation's principal purpose is to hold the stock of the Bank and
the Corporation's other subsidiaries. Therefore, there is presently no market
place nor competition for the Corporation since it does not conduct competitive
business activity other than through its subsidiaries.
The Bank's market area is primarily located in portions of Delaware,
Montgomery and Chester Counties, located in southeastern Pennsylvania. The
greatest concentration of activity is within a limited radius of Bryn Mawr,
Pennsylvania, the site of the Bank's main banking office. The Bank also has
four full service branch offices located in Havertown, Wayne, Wynnewood and
Paoli, Pennsylvania. In addition, there are four limited service facilities
located in life care communities in Waverly Heights, Martins Run, the Quadrangle
and Bellingham and a limited service branch located in Radnor Corporate Center
in Montgomery, Chester and Delaware Counties. There is also an automatic teller
machine location at Villanova University.
The banking business is highly competitive and the Bank competes not
only with other commercial banks but it also experiences competition from
savings and loan associations and credit unions for deposits and loans as well
as from consumer finance companies, mortgage companies, insurance companies,
stock brokerage companies and other entities providing one or more of the
services and products offered by the Bank. All of these organizations must be
considered competitors of the Bank.
10
<PAGE>
SUPERVISION AND REGULATION
--------------------------
Bank holding companies, such as the Corporation, and its subsidiaries,
including the Bank, are extensively regulated under both federal and state law.
To the extent that the following information describes statutory provisions and
regulations which apply to the Corporation and its subsidiaries, it is qualified
in its entirety by reference to those statutory provisions and regulations.
Regulation of the Corporation
-----------------------------
The Bank Holding Company Act
----------------------------
The Corporation, as a bank holding company, is regulated under the Bank
Holding Company Act of 1956, as amended (the "Act"). The Act limits the
business of bank holding companies to banking, managing or controlling banks,
performing certain servicing activities for subsidiaries and engaging in such
other activities as the Federal Reserve Board may determine to be closely
related to banking. The Corporation and its non-bank subsidiaries are subject
to the supervision of the Federal Reserve Board and the Corporation is required
to file with the Federal Reserve Board an annual report and such additional
information as the Federal Reserve Board may require pursuant to the Act and the
regulations which implement the Act. The Federal Reserve Board also conducts
inspections of the Corporation and each of its non-banking subsidiaries.
The Act prohibits the Federal Reserve Board from approving a bank holding
company's application to acquire a bank or bank holding company located outside
the state in which the operations of its banking subsidiaries are principally
conducted, unless such acquisition is specifically authorized by statute of the
state in which the bank or bank holding company to be acquired is located.
Pennsylvania law permits bank holding companies located in any state to acquire
Pennsylvania banks and bank holding companies,
11
<PAGE>
provided that the home state of the acquiring company has enacted "reciprocal"
legislation. In this context, reciprocal legislation is generally defined as
legislation that expressly authorizes Pennsylvania bank holding companies to
acquire banks or bank holding companies located in another state on terms and
conditions substantially no more restrictive than those applicable to such an
acquisition in Pennsylvania by a bank holding company located in the other
state.
The Act requires each bank holding company to obtain prior approval by the
Federal Reserve Board before it may acquire (i) direct or indirect ownership or
control of more than 5% of the voting shares of any company, including another
bank holding company or a bank, unless it already owns a majority of such voting
shares, or (ii) all, or substantially all, of the assets of any company. The
Act provides that the Federal Reserve Board shall not approve any acquisition by
a bank holding company of more than 5% of the voting shares or substantially all
of the assets of a bank located outside of the state in which the operation of
the holding company's bank subsidiaries are principally conducted, unless such
acquisition is specifically authorized by a statute of the state in which the
bank whose shares are to be acquired is located.
The Act also prohibits a bank holding company from engaging in, or from
acquiring direct or indirect ownership or control of more than 5% of the voting
shares of any company engaged in non-banking activities unless the Federal
Reserve Board, by order or regulation, has found such activities to be so
closely related to banking or to managing or controlling banks as to be
appropriate. The Federal Reserve Board has by regulation determined that certain
activities are so closely related to banking or to managing or controlling
banks, so as to permit bank holding companies, such as the Corporation, and its
subsidiaries formed for such purposes, to engage in such activities, subject to
obtaining the Federal Reserve Board's approval in certain cases. These
activities include operating a mortgage, consumer finance, credit card or
factoring company, servicing and brokering loans and other extensions of credit,
providing certain
12
<PAGE>
investment and financial consulting advice, leasing personal property, providing
certain bookkeeping or financially oriented data processing services, acting as
an insurance agent for certain types of credit-related insurance and discount
brokerage. The Corporation, through its subsidiary, BMFS, did engage in
brokering loans for the Bank and others for a fee as well as real estate
appraisal activities and, through its subsidiary, PRC, engaged in providing
financial consulting services to non-affiliated banks and non-bank depository
institutions, but as noted above, these operations have been discontinued.
The Act further provides that the Federal Reserve Board shall not approve
any such acquisition that would result in a monopoly or would be in furtherance
of any combination or conspiracy to monopolize or attempt to monopolize the
business of banking in any part of the country, or that in any other manner
would be in restraint of trade, unless the anti-competitive effects of the
proposed transactions are clearly outweighed by the public interest and the
probable effect of the transaction in meeting the convenience and needs of the
communities to be served.
Under the Act, a bank holding company and its subsidiaries are prohibited
from engaging in certain tie-in arrangements in connection with any extension or
provision of credit, lease or sale of property or furnishing any service to a
customer on the condition that the customer provide additional credit or service
to the bank, to its bank holding company or any other subsidiaries of its bank
holding company or on the condition that the customer refrain from obtaining
credit or service from a competitor of its bank holding company. Further, the
Bank, as a subsidiary bank of a bank holding company, such as the Corporation,
is subject to certain restrictions on any extensions of credit it provides to
the Corporation or any of its non-bank subsidiaries, investments in the stock or
securities thereof, and on the taking of such stock or securities as collateral
for loans to any borrower.
13
<PAGE>
In addition, the Federal Reserve Board may issue cease and desist orders
against bank holding companies and non-bank subsidiaries to stop actions
believed to present a serious threat to a subsidiary bank. The Federal Reserve
Board also regulates certain debt obligations and changes in control of bank
holding companies.
Under Federal Reserve Board policy, a bank holding company is expected to
act as a source of financial strength to each of its subsidiary banks and to
commit resources, including capital funds during periods of financial stress, to
support each such bank. Although this "source of strength" policy has been
challenged in litigation, the Federal Reserve Board continues to take the
position that it has the authority to enforce it. Consistent with its "source of
strength" policy for subsidiary banks, the Federal Reserve Board has stated
that, as a matter of prudent banking, a bank holding company generally should
not maintain a rate of cash dividends unless its net income available to common
shareholders has been sufficient to fund fully the dividends, and the
prospective rate of earnings retention appears to be consistent with the
company's capital needs, asset quality and overall financial condition.
Financial Institutions Reform, Recovery and Enforcement Act
-----------------------------------------------------------
Following enactment by the United States Congress, on August 9, 1989, the
Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA")
became law. Although the more significant provisions of FIRREA relate to
promoting the economic viability of thrift institutions through more stringent
capital requirements and changes to the regulatory structure of such
institutions, FIRREA also contains provisions that directly affect banks and
bank holding companies, such as the Corporation. First, FIRREA abolished the
Federal Savings and Loan Insurance Corporation and required the Federal Deposit
Insurance Corporation (the "FDIC") to establish two separate funds, the Bank
Insurance Fund ("BIF") to insure banks and the Savings Association Insurance
Fund ("SAIF") to insure savings and loan associations. Second, FIRREA amended
the Act to
14
<PAGE>
permit bank holding companies to acquire thrift institutions. Prior to FIRREA,
bank holding companies were permitted to acquire only failing thrift
institutions. FIRREA also abolished the restrictions on tandem operations of
acquired thrift institutions and the in-state preference for acquisitions of
failing thrifts. Finally, FIRREA enhanced the authority of the regulatory
authorities over financial institutions, including banks and bank holding
companies, to regulate more effectively with the entire structure of a bank
holding company.
Federal law also grants to federal banking agencies the power to issue
cease and desist orders when a depository institution or a bank holding company
or an officer or director thereof is engaged in or is about to engage in unsafe
and unsound practices. The Federal Reserve Board may require a bank holding
company, such as the Corporation, to discontinue certain of its activities or
activities of its other subsidiaries, other than the Bank, or divest itself of
such subsidiaries if such activities cause serious risk to the Bank and are
inconsistent with the Bank Holding Company Act or other applicable federal
banking laws.
Federal Deposit Insurance Corporation Improvement Act of 1991
-------------------------------------------------------------
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") is legislation designed to reform and provide funding for the deposit
insurance system by, among other things, requiring early intervention and
closure of troubled institutions by the regulatory authorities and the
resolution of failed institutions on the least-cost basis.
The FDICIA substantially alters the deposit insurance assessment process.
The requirement that the FDIC provide at least sixty (60) days notice before
requiring changes to the semiannual insurance assessment has been removed and
the FDIC has the ability to change deposit insurance assessment rates much more
rapidly than in the past.
15
<PAGE>
FDICIA grants the FDIC the authority to impose special "emergency" assessments
on member banks at any time if necessary to pay interest or principal on
borrowings or for other appropriate purposes. The FDICIA also requires the FDIC
to establish a risk-based assessment system for the deposit insurance funds no
later than January 1, 1994. In addition, the FDICIA establishes capital
categories, such as, "well-capitalized", adequately capitalized,
undercapitalized, significantly undercapitalized, and critically
undercapitalized. Under the guidelines currently issued by the regulators, the
Bank is considered "well-capitalized".
FDICIA also requires the regulators to place a financial institution under
more intense scrutiny if its capital falls into a lower capital category. In
addition, FDICIA restricts the liquidity that is available, through the Federal
Reserve discount window, to troubled financial institutions and increases the
scope of the regulatory authorities supervisory powers over financial
institutions, including the Bank and Corporation.
Pursuant to federal law, federal regulatory authorities review the
performance of the Corporation and their subsidiaries in meeting the credit
needs of the communities served by the Bank. The applicable federal regulatory
authority considers compliance with this law in connection with applications
for, among other things, approval of branches, branch relocations and
acquisitions of banks and bank holding companies.
Pennsylvania Laws Affecting the Corporation
-------------------------------------------
Pennsylvania Anti-Takeover Legislation
--------------------------------------
The Corporation is also subject to the Pennsylvania Business Corporation
Law of 1988, as amended and the general business and other laws of the
Commonwealth of Pennsylvania regulating corporations.
16
<PAGE>
The Pennsylvania Legislature passed the Pennsylvania Anti-Takeover Law Act
36 of the 1990 Pennsylvania Legislature ("Act 36") on April 27, 1990 which adds
additional provisions to and amends the law of Pennsylvania concerning business
corporations (the "Corporation Law"). Specifically, Act 36 (i) modifies and
limits the fiduciary obligations of a corporation's directors, withholds voting
rights from control shares of corporation stock until consent of the
Corporation's independent shareholders is obtained at a shareholders meeting,
prevents "green mail" by providing for disgorgement of certain profits by a
control person or group within eighteen (18) months after an attempt to acquire
control of a corporation. Act 36 also provides for severance compensation for
certain terminated employees following control share acquisitions, and regulates
the effect of certain business combinations on labor contracts.
Act 36, which is the Legislature's response to the large volume of hostile
takeovers over recent years, contains provisions which permitted a corporation's
board of directors to "opt-out" of certain provisions of the Act by explicitly
amending the corporation's by-laws on or before July 26, 1990. On July 20,
1990, the Corporation's Board amended the Corporation's By-Laws to explicitly
opt-out of the provisions of Act 36 which modify and limit a director's
fiduciary duty to the Corporation, withhold voting rights from "control shares"
of the Corporation stock, and provide for disgorgement of certain profits on
certain shares of the Corporation stock by a control person or group within
eighteen months after an attempt to acquire the Corporation's stock. Because
the Corporation's Board of Directors opted out of the provisions of Act 36
concerning fiduciary duty, control share acquisitions, and disgorgement of
profits, the severance compensation and labor contract provisions of Act 36 are
inapplicable to the Corporation.
The Corporation's Board opted-out of those provisions of the Act by
amending the Corporation's By-Laws because it believed and continues to believe
that those provisions of the Act were not in the best economic interests of the
---
Corporation's shareholders.
17
<PAGE>
In addition, the Board believes that, without those provisions of Act 36, the
Board has sufficient flexibility under the applicable law to protect the
interest of the shareholders. As outlined in the Corporation's definitive proxy
statement for the 1992 shareholders' meeting, the Board of Directors recommended
that the Corporation's shareholders ratify and approve the amendment to the
Corporation's By-Laws opting out of Act 36.
Regulation of the Bank
----------------------
The Corporation's Pennsylvania state chartered Bank, The Bryn Mawr Trust
Company, is regulated and supervised by the Pennsylvania Department of Banking
(the "Department of Banking") and the FDIC. These agencies regularly examine
the Bank's reserves, loans, investments, management practices and other aspects
of its operations and the Bank must furnish periodic reports to these agencies.
The Bank is not a member of the Federal Reserve System.
FDIC and Department of Banking Regulations
------------------------------------------
The Bank's operations are subject to certain requirements and restrictions
under federal and state laws, including requirements to maintain reserves
against deposits, limitations on the interest rates that may be paid on certain
types of deposits, restrictions on the types and amounts of loans that may be
granted and the interest that may be charged thereon, limitations on the types
of investments that may be made and the types of services which may be offered.
Various consumer laws and regulations also affect the operations of the Bank.
These regulations and laws are intended primarily for the protection of the
Bank's depositors and customers rather than holders of the Corporation's stock.
18
<PAGE>
As a bank incorporated under and subject to Pennsylvania banking laws and
insured by the FDIC, the Bank must obtain the prior approval of the Department
of Banking and the FDIC before establishing a new branch banking office.
Depending on the type of bank or financial institution, a merger of banks
located in Pennsylvania are subject to the prior approval of one or more of the
following: the Department of Banking, the FDIC, the Federal Reserve Board and
the Office of the Comptroller of the Currency. An approval of a merger by the
appropriate bank regulatory agency would depend upon several factors, including
whether the merged institution is a federally insured state bank, a member of
the Federal Reserve System, or a national bank. Additionally, any new branch
expansion or merger must comply with geographical branching restrictions
provided by state law. Beginning in 1990, the Pennsylvania Banking Code
permitted Pennsylvania banks to establish branches anywhere in the state.
The Bank is insured by the FDIC, which currently insures the Bank's
deposits to a maximum of $100,000 per deposit. For this protection, each
insured bank pays a semiannual statutory insurance assessment and is subject to
certain rules and regulations of the FDIC. The amount of FDIC assessments paid
by individual insured depository institutions, such as the Bank, is based on
their relative risk as measured by regulatory capital ratios and certain other
factors. Under this system, in establishing the insurance premium assessment for
each bank, the FDIC will take into consideration the probability that the
deposit insurance fund will incur a loss with respect to an institution, and
will charge an institution with perceived higher inherent risks a higher
insurance premium. The FDIC will also consider the different categories and
concentrations of assets and liabilities of the institution, the revenue needs
of the deposit insurance fund, and any other factors the FDIC deems relevant.
Current regulations provide for a minimum assessment of 23 cents per $100 of
eligible deposits. A significant increase in the assessment rate or a special
additional assessment with respect to insured deposits could have an adverse
impact on the results of operations and capital levels of the Bank or the
Corporation.
19
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Regulation of the Corporation-
------------------------------
Government Monetary Policies
----------------------------
The earnings and operations of the Corporation and its subsidiaries are
affected by the policies of regulatory authorities and legislative changes; in
particular, the policies of the Federal Reserve Board in regulating the money
supply and interest rates. Among the instruments used by the Federal Reserve
Board to implement its objectives are open-market operations in U.S. Government
securities, changes in the discount rate for member bank borrowings, changes in
reserve requirements against bank deposits, and changes with respect to
regulations affecting certain borrowing by banks and their affiliates.
The monetary and fiscal policies of the Federal Reserve Board and the other
regulatory agencies have had, and will probably continue to have, an important
impact on the operating results of the Bank through their power to implement
national monetary policy in order to, among other things, curb inflation or
combat a recession. The monetary policies of the Federal Reserve Board may have
a major effect upon the levels of the Bank's loans, investments and deposits
through the Federal Reserve Board's open market operations in United States
government securities, through its regulation of, among other things, the
discount rate on borrowing of depository institutions, and the reserve
requirements against depository institution deposits. It is not possible to
predict the nature and impact of future changes in monetary and fiscal policies.
The earnings of the Bank and therefore, of the Corporation are affected by
domestic economic conditions, particularly those conditions in the trade area as
well as the monetary and fiscal policies of the United States government and its
agencies.
The Federal Reserve Board also has authority to prohibit a bank holding
company from engaging in any activity or transaction deemed by the Federal
Reserve Board to be an unsafe or unsound practice. The payment of dividends
could, depending upon the
20
<PAGE>
financial condition of the Bank or Corporation, be such an unsafe or unsound
practice and the regulatory agencies have indicated their view that it generally
would be an unsafe and unsound practice to pay dividends except out of current
operating earnings. The ability of the Bank to pay dividends in the future is
presently and could be further influenced, among other things, by applicable
capital guidelines discussed below or by bank regulatory and supervisory
policies. The ability of the Bank to make funds available to the Corporation is
also subject to restrictions imposed by federal law. The amount of other
payments by the Bank to the Corporation is subject to review by regulatory
authorities having appropriate authority over the Bank or Corporation and to
certain legal limitations.
The passage of additional legislation by Congress, such as FIRREA or
FDICIA, authorizing additional continuing legal and regulatory supervision of
financial institutions, requiring additional disclosure concerning deposit
transactions and permitting more rapid increases in deposit insurance premiums
may increase the cost and the operational expenses even for efficiently run and
well-capitalized financial institutions and may adversely affect the profit
margins of the Bank and the Corporation.
Risk Based Capital Guidelines
-----------------------------
The Federal Reserve Board has promulgated certain "Risk Based Capital
Guidelines" which more narrowly define bank capital, as it relates to assets,
than do prior regulatory guidelines. Under the new guidelines, various types of
Corporation assets are assigned risk categories and weighted based on their
relative risk. In addition, certain off balance sheet items are translated into
balance sheet equivalents and also weighted according to their potential risk.
The sum of both of these asset categories, referred to as Total Risk Weighted
Assets, is then compared to the Corporation's total capital, providing a Tier I
Capital Ratio, under the new guidelines. A Tier II capital
21
<PAGE>
ratio is also computed for the Corporation, adding an allowable portion of the
loan loss reserve to capital. Both the Tier I and Tier II ratios of the
Corporation are in excess of those minimum capital ratios required as of
December 31, 1994 by the regulators. The focus of the guidelines is to measure
the Corporation's capital risk. The guidelines do not explicitly take into
account other risks, such as interest rate changes or liquidity.
The Bank in its normal business originates off-balance sheet items, such as
outstanding loan commitments and standby letters of credit. The Bank makes loan
commitments to borrowers to assure the borrower of financing by the Bank for a
specified period of time and/or at a specified interest rate. The obligation to
the Bank, pursuant to an unfunded loan commitment, is limited by the terms of
the commitment letter issued by the Bank to each borrower. The Bank carefully
reviews outstanding loan commitments on a periodic basis. A standby letter of
credit is an instrument issued by the Bank which represents an obligation to
make payments on certain transactions of its customers. The Bank carefully
evaluates the creditworthiness of each of its letter of credit customers. The
Corporation carefully monitors its risks as measured by the Risk Capital
Guidelines and seeks to adhere to the Risk Capital Guidelines.
Governmental Policies and Future Legislation
--------------------------------------------
From time to time, various proposals are made in the United States Congress
as well as Pennsylvania legislature and by various bank regulatory authorities
which would alter the powers of, and place restrictions on, different types of
bank organizations. Among current proposals of significance to the Corporation
or its subsidiaries are the continued liberalization of the restrictions on the
acquisition of out-of-state banks by bank holding companies, the expansion of
the powers of banks and thrift institutions, the liberalization of the
restrictions upon the activities in which bank holding companies may engage, the
imposition of limitations on interest rates and service
22
<PAGE>
charges, certain consumer legislation and the requirement to provide certain
basic banking services. It is impossible to predict whether any of the proposals
will be adopted and the impact, if any, of such adoption on the business of the
Corporation or its subsidiaries, especially the Bank.
Subsidiaries
------------
BMFS and PRC, as subsidiaries of the Corporation, are also subject to
regulation and examination by the Federal Reserve Board and must file periodic
reports with the Federal Reserve Board. As noted above, the operations of these
subsidiaries of the Corporation, are being discontinued.
ITEM 2. PROPERTIES
-------------------
The headquarters of the Corporation and the main office of the Bank
are located in a three story stone front office building, consisting of
approximately 37,000 net usable square feet, located at the main intersection of
Bryn Mawr, Pennsylvania, at Lancaster Avenue and Bryn Mawr Avenue. The main
office of the Bank has been located in Bryn Mawr since its founding in 1889.
The Corporation acquired two additional properties during 1988. The first
property, contiguous to the Bank's main office, houses an expanded drive-up
facility and a new meeting room. The second property, located in Bryn Mawr,
became the new location of the Bank's Trust Division in mid-December, 1989.
Both properties are subject to mortgages as outlined in Note 6 of the
Corporation's financial statements on page 28 of its Annual Report and
incorporated by reference to the Corporation's 10-K, filed with the Securities
and Exchange Commission pursuant to Regulation 14A. The Corporation's other
properties are owned free and clear of all liens and encumbrances. Below is
a schedule of all properties owned or leased by the Corporation or its
subsidiaries.
23
<PAGE>
The Bank:
--------
<TABLE>
<CAPTION>
Date Acquired
Current Banking Office Address or Opened
---------------------- ------- -----------------
<S> <C> <C>
Main Office and Principal 801 Lancaster Avenue 1889
Place of Business (owned) Bryn Mawr, PA 19010
Branch Office/Operations 330 E. Lancaster Avenue 1985
Center (owned) Wayne, PA 19087
Branch Office/Admin. 18 W. Eagle Road 1987
Office (owned) Havertown, PA 19083
Branch Office (owned) 312 E. Lancaster Avenue 1979
Wynnewood, PA 19096
Branch Office (owned) N.E. Corner of Lancaster 1986
and Greenwood Avenues
Paoli, PA 19301
Branch Office (leased) The Quadrangle (1) 1989
month to month basis 3300 Darby Road
Haverford, PA 19041-1095
Branch Office (leased) Waverly Heights, Ltd. (1) 1986
month to month basis Life Care Community
Gladwyne, PA 19035
Branch Office (leased) Martins Run (1) 1987
month to month basis Life Care Community
11 Martins Run
Media, PA 19063
Branch Office (leased) Bellingham (1) 1991
month to month basis 1615 East Boot Road
West Chester, PA 19380
Temporary Agency Remote Villanova University 1969
Facility Campus (2)
Villanova, PA 19085
Branch Office (leased) Radnor Corporate Center 1990
through December 18, 1995 Three Radnor Corporate
Center Radnor, PA 19087 (3)
The Corporation:
----------------
Date Acquired
Other Facilities Address or Opened
---------------- ------- -----------------
Walk-in Lobby, Drive-up 813 Bryn Mawr Avenue 1988
Windows, Meeting Room Bryn Mawr, PA 19010 (4)
(owned)
Office Building (owned) 10 Bryn Mawr Avenue 1988
Bryn Mawr, PA 19010 (5)
</TABLE>
24
<PAGE>
(1) This branch office has been established primarily to meet the needs of
the residents of the Life Care Community in which it is located.
(2) This temporary agency remote facility consists of two automatic teller
machines primarily for the use of staff and students.
(3) This limited service branch is on the lobby level of a building located
in a five building office complex and has been established primarily to
meet the needs of the occupants of this office building complex. The
lease is for 1102 square feet of space and expires on December 18, 1995.
(4) This property is contiguous to the Bank's main office, originally housed
a gas station, which was demolished. This property houses a walk-in
lobby, expanded drive-up facility and a new meeting room, put in service
in August, 1990.
(5) This property became the new location of the Bank's Trust Division, in
mid-December, 1989. The Corporation leased the property to the prior
owners on a month-to-month basis through June, 1989.
25
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
--------------------------
Neither the Corporation nor any of its subsidiaries is a party to, nor is
any of their property the subject of, any material legal proceedings other than
ordinary routine litigation incident to their business.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------------------------------------------------------------
No matter was submitted during the fourth quarter of the fiscal year
covered by this report to a vote of security holders which is required to be
disclosed pursuant to the instructions contained in the form for this report.
26
<PAGE>
PART II
-------
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK
-------------------------------------------------
AND RELATED STOCKHOLDER MATTERS
-------------------------------
The information required by this Item 5 is incorporated by reference
to the information appearing under the caption "Price Range of Shares" on page
21 of the Corporation's Annual Report to Shareholders for the year ended
December 31, 1994.
ITEM 6. SELECTED FINANCIAL DATA
--------------------------------
The information required by this Item 6 is incorporated by reference
to the information appearing under the caption "Selected Financial Data" on page
9 of the Corporation's Annual Report to Shareholders for the year ended December
31, 1994.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
----------------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
The information required by this Item 7 is incorporated by reference
to the information appearing under the caption "Management's Discussion and
Analysis of Financial Condition and Result of Operations" on pages 10 to 21 of
the Corporation's Annual Report to Shareholders for the year ended December 31,
1994.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
----------------------------------------------------
The financial statements and the auditor's report thereon and
supplementary data required by this Item 8 are incorporated by reference on
pages 22 to 35 of the Corporation's Annual Report to Shareholders for the year
ended December 31, 1994.
27
<PAGE>
ITEM 9. CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
---------------------------------------------------------
ACCOUNTING AND FINANCIAL DISCLOSURE
-----------------------------------
There were no matters which are required to be disclosed in this Item
9 pursuant to the instructions contained in the form for this report.
28
<PAGE>
PART III
--------
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------------------------------
The information with respect to Directors of the Corporation is
incorporated by reference on pages 5 through 7 of the definitive proxy statement
of the Corporation filed with the Securities and Exchange Commission pursuant to
Regulation 14A.
Executive Officers of the Corporation. Below is certain information
-------------------------------------
with respect to the executive officers of the Corporation and Bank as of March
3, 1995:
<TABLE>
<CAPTION>
AGE AS OF OFFICE WITH THE
NAME MARCH 3, 1995 CORPORATION AND/OR BANK
---- ------------- -----------------------
<S> <C> <C>
Robert L. Stevens 57 President and Chief
Executive Officer and
Director of Corporation
and Bank
Samuel C. Wasson, Jr. 56 Secretary and Director of
Corporation and Bank and
Executive Vice
President of Bank - Loans
Joseph W. Rebl 50 Treasurer of Corporation
and Senior Vice President
and Treasurer of Bank -
Finance
Robert J. Ricciardi 46 Vice President of the
Corporation and Executive
Vice President of
Bank - Community Banking
Paul M. Kistler, Jr. 58 Senior Vice President of
Bank- Human Resources,
Facilities and Marketing
Thomas M. Petro 36 Senior Vice President of
Bank- Operations
Richard I. Sichel 49 Senior Vice President of
Bank- Trust
Joseph G. Keefer 36 Senior Vice President of
Bank- Commercial and
Real Estate Lending
Donald B. Krieble 51 Senior Vice President of
Bank- Consumer Credit Services
Leo M. Stenson 44 Vice President and Auditor
of Bank
</TABLE>
Mr. Stevens was employed by the Bank in 1960 and elected an Assistant
Treasurer in 1962. He was elected an Executive Vice President with
responsibility for lending functions in 1968. He was elected a director in 1974
and was elected President and Chief Executive Officer of the Bank, effective
January 1, 1980. Upon the formation of the Corporation in 1986, he was elected
the President and Chief Executive Officer and a director.
29
<PAGE>
Mr. Wasson was employed by the Bank in 1966. Later that year he was
elected an Assistant Treasurer. He was elected a Vice President in 1969 and in
1980 was elected Treasurer of the Bank. In 1981, Mr. Wasson was elected a
Senior Vice President and elected a director of the Bank and upon the formation
of the Corporation in 1986, he was elected a Vice President and director of the
Corporation. In January, 1992, he was elected Secretary of the Corporation and
Bank and relinquished the title of Vice President of the Corporation. In
November, 1993, he was elected Executive Vice President of the Bank.
Mr. Ricciardi was employed by the Bank in 1971 and elected an Assistant
Treasurer in 1973. Mr. Ricciardi was elected an Assistant Vice President of the
Bank in 1976 and a Vice President in 1981. In 1989, Mr. Ricciardi was elected
Senior Vice President of Real Estate Lending. In November, 1993, he was elected
Executive Vice President and assumed responsibility for the Bank's Community
Banking Division.
Mr. Rebl was employed by the Bank and elected its Comptroller in 1981. He
was elected Vice President and Comptroller in 1983 and Senior Vice President in
1987. Upon the formation of the Corporation in 1986, Mr. Rebl was elected
Treasurer of the Corporation. In 1992, Mr. Rebl was designated the Bank's Senior
Vice President - Finance. In 1994 Mr. Rebl was designated Treasurer of the Bank.
Mr. Kistler was retained by the Bank as a human resources consultant in
November 1992 and was appointed Senior Vice President of Human Resources and
Facilities in January 1993. From 1976 to 1992, Mr. Kistler was employed by
Philadelphia National Bank (now merged into CoreStates Bank, N.A.) in various
capacities including Senior Vice President- Human Resource manager, Secretary of
the Board of Directors, CoreStates Financial Corporation as Manager and
CoreSearch as a consultant.
Mr. Petro was appointed a Vice President of the Bank in January 1992 and
Senior Vice President- Operations in November, 1993. Mr. Petro was the
President of PRC from its formation in June 1990 until it ceased operations in
December, 1992. Formerly, since August 1986, Mr. Petro was Assistant Vice
President and Manager - Banking Group of Management Science Associates, Inc.
From November 1981 to August 1986, Mr. Petro was Product Manager for Mellon
Bank's DataCenter.
30
<PAGE>
Mr. Sichel was employed by the Bank in September, 1992 as Group Vice
President and Chief Investment Officer of the Bank's Trust Department. In
November, 1993 he was elected Senior Vice President and head of the Bank's Trust
Department. From 1991 until September, 1992, he was a financial consultant and
portfolio manager with Merrill Lynch. From 1984 until 1990, he was Vice
President- Director of Investment research with First Pennsylvania Bank. From
1977 until 1984, he was Chief Investment Officer for New Jersey National Bank.
Mr. Keefer was employed by the Bank in March, 1991 as Vice President-
Commercial Lending and was designated an executive officer of the Bank effective
January 1, 1992. In June, 1994, Mr. Keefer was designated Senior Vice President
of Commercial and Real Estate Lending. Mr. Keefer was employed by First
Pennsylvania Bank N.A. (now merged into CoreStates Bank, N.A.) since 1980 in
various lending capacities including Divisional Vice President.
Mr. Krieble was employed by the Bank as Vice President of Consumer Services
in August 1992 and was designated as Senior Vice President of Consumer Credit
Lending in June, 1994. Formerly Mr. Krieble was a Senior Vice President-
consumer loan administration with Meridian Bank since 1968.
Mr. Stenson was employed by the Bank as Auditor in 1982, was elected Vice
President and Auditor in 1987 and was formerly an Assistant Vice President of
Western Savings Bank.
None of the above executive officers has any family relationship with any
other executive officer or with any director of the Corporation or Bank.
31
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
--------------------------------
The information required by this Item 11 is incorporated by reference
on pages 8 through 18 of the definitive proxy statement of the Corporation,
filed with the Securities and Exchange Commission pursuant to Regulation 14A.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
--------------------------------------------------
OWNERS AND MANAGEMENT
---------------------
The information required by this Item 12 is incorporated by reference
on page 2, and pages 5 through 8 of the Corporation's definitive proxy
statement, filed with the Securities and Exchange Commission pursuant to
Regulation 14A
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------
There were no relationships or transactions required to be disclosed
in this Item 13 pursuant to the instructions contained in the form for this
report, as discussed on page 15 of the Corporation's definitive proxy statement,
filed with the Securities and Exchange Commission pursuant to Regulation 14A.
32
<PAGE>
PART IV
-------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
-------------------------------------------------
AND REPORTS ON FORM 8-K
-----------------------
(a) The following exhibits are filed as a part of this report.
EXHIBIT TABLE
-------------
3 - Articles of Incorporation and By-Laws
-----------------------------------------
(A) Articles of Incorporation, effective August 8, 1986, are incorporated by
reference to Form S-4 of the Registrant, No. 33-9001.
(B) By-Laws of the Registrant, as amended July 20, 1990, is incorporated by
reference to the Corporation's 10-K, filed with the Securities and Exchange
Commission on March 26, 1991.
4 - Instruments defining the rights of security holders
-------------------------------------------------------
Articles of Incorporation and By-Laws: See Item 3(A) & (B) above.
10 - Material Contracts
-----------------------
(A) Agreement dated December 31, 1990, between The Bryn Mawr Trust Company and
Mellon Bank, N.A. is incorporated by reference to the Corporation's 10-K,
filed with the Securities and Exchange Commission on March 26, 1991.
(B) Mortgage dated December 16, 1988 between Fidelity Mutual Life Insurance
Company and Bryn Mawr Bank Corporation is incorporated by reference to the
Corporation's 10-K, filed with the Securities and Exchange Commission on
March 28, 1990.
(C) Mortgage dated May 18, 1988 between John A. Sparta and Helen M. Sparta
of the one part and Bryn Mawr Bank Corporation of the other part, is
incorporated by reference to the Corporation's 10-K, filed with the
Securities and Exchange Commissions on March 28, 1990.
33
<PAGE>
(D) Agreement dated December 20, 1990 between Bryn Mawr Bank Corporation and
Profit Research Consulting, Inc., is incorporated by reference to the
Corporation's 10-K, filed with the Securities and Exchange Commissions on
March 28, 1990.
(E) Letter of Understanding dated December 20, 1990, between Bryn Mawr Bank
Corporation and Profit Research Group, Inc., is incorporated by
reference to the Corporation's 10-K, filed with the Securities and
Exchange Commissions on March 28, 1990.
(F) License Agreement dated December 20, 1990, between Profit Research
Consulting, Inc. and Profit Research Group, Inc., is incorporated by
reference to the Corporation's 10-K, filed with the Securities and
Exchange Commissions on March 28, 1990.
(G) License Agreement dated December 30, 1994, between Bryn Mawr Bank
Corporation and FIserv Cir, Inc. is incorporated by reference to into this
filing of the 10-K.
13. Annual Report to Security Holders.
---------------------------------
The Registrant's 1994 Annual Report to Shareholders is filed herewith as
Exhibit 13. Such Annual Report, except for the portions thereof that are
expressly incorporated by reference herein, is only furnished for the
information of the Securities and Exchange Commission and is not deemed to
be filed as a part of this Form 10-K.
22. Subsidiaries of the Registrant.
------------------------------
Name State of Incorporation
---- ----------------------
The Bryn Mawr Trust Company Pennsylvania
Bryn Mawr Financial Services, Inc. Pennsylvania
Profit Research Consulting, Inc. Pennsylvania
23. Consent of Experts.
------------------
Consent of Certified Public Accountants filed herewith as Exhibit 23.
27. Financial Data Schedule
-----------------------
Financial Data Schedule filed herewith as Exhibit 27.
99.1 Portions of the Proxy Statement.
-------------------------------
Excerpts from the Registrant's Proxy Statement for its 1995 Annual Meeting
to be held on April 18, 1995 are filed herewith as Exhibit 99.1.
99.2 Graphic Appendix List
---------------------
Graphic Appendix List filed herewith as Exhibit 99.2
(b) No reports on Form 8-K were filed by the Registrant during the quarter
ended December 31, 1994.
34
<PAGE>
INDEX TO FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS
-----------------------------------------------------
The report of Independent Certified Public Accountants as pertaining to the
Consolidated Financial Statements of Bryn Mawr Bank Corporation and related
notes is incorporated by reference to page 35 of the Corporation's 1994 Annual
Report to Shareholders.
Consolidated Financial Statements and related notes are incorporated by
reference to the Corporation's 1994 Annual Report to Shareholders, and may be
found on the pages of said Report as indicated in the parenthesis:
Balance Sheets, December 31, 1994 and 1993 (page 22)
Statements of Income for the years ended December 31, 1994, 1993 and 1992
(page 23)
Statements of Changes in Shareholders' Equity for the years ended December
31, 1994, 1993 and 1992 (page 25)
Statements of Cash Flows for the years ended December 31, 1994, 1993 and
1992 (page 24)
Notes to Financial Statements (pages 26 to 34)
35
<PAGE>
Supplementary Data:
Quarterly Results of Operations are incorporated by reference to the in
formation under the caption "Selected quarterly financial data (unaudited)", in
Note 13 on page 32 of the Corporation's Annual Report to Shareholders for the
fiscal years ended December 31, 1994 and 1993.
Financial Statement Schedules are omitted because of the absence of the
conditions under which they are required or because the information called for
is included in the Consolidated Financial Statements or notes thereto.
Exhibits:
For information regarding exhibits, including those incorporated by reference,
see pages 33 through 34 of this report.
36
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the
Corporation and in the capacities and on the date indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
/s/ Robert L. Stevens
------------------------- President and Chief March 27, 1995
Robert L. Stevens Executive Officer
(Principal Executive
Officer) and Director
/s/ Joseph W. Rebl
------------------------- Treasurer (Principal March 27, 1995
Joseph W. Rebl Financial and Principal
Accounting Officer)
------------------------- Director March , 1995
Darrell J. Bell
/s/ Richard B. Cuff
------------------------- Director March 29, 1995
Richard B. Cuff
/s/ Warren W. Deakins
------------------------- Director March 29, 1995
Warren W. Deakins
/s/ Eleanor Carson Donato
------------------------- Director March 29, 1995
Eleanor Carson Donato
/s/ Thomas J. Farrell, Jr.
------------------------- Director March 27, 1995
Thomas J. Farrell, Jr.
------------------------- Director March , 1995
Peter H. Havens
/s/ Sherman R. Reed, 3rd
------------------------- Director March 30, 1995
Sherman R. Reed, 3rd
</TABLE>
37
<PAGE>
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
------------------------- Director March , 1995
Phyllis M. Shea
/s/ B. Loyall Taylor, Jr.
------------------------- Director March 30, 1995
B. Loyall Taylor, Jr.
/s/ Samuel C. Wasson, Jr.
------------------------- Director March 29, 1995
Samuel C. Wasson, Jr.
/s/ Thomas A. Williams
------------------------- Director March 29, 1995
Thomas A. Williams
</TABLE>
38
<PAGE>
TABLE OF CONTENTS
Tab Contents
--- --------
1 Certified Resolutions and Incumbency Certificate - BMBC
2. FIserv CIR, Inc. Unanimous Written Consent
3. License and Service Agreement
4 Index of Schedules, Exhibits, Addenda and Other Documents
5 Schedule 1 - License Fee/Professional Service Fee/Maintenance
Services Pricing and Payment
6 Exhibit A to Schedule 1 - CBS Documentation Request Form
7 Schedule 2 - Third Party Hardware and Software
8 Schedule 2.1 - Third Party Hardware and Software
9 Exhibit A to Schedule 2 - System Engineering Support
10 Schedule 3 - Business Requirements
11 Exhibit A to Schedule 3 - Day One Modifications
12. 1. Line of Credit Backdate Rate Change
13 2. Payment Factors for Credit Lines
14 3. Unapplied Payment Buckets
15 4. Construction Loans
16 5. Backroom Systems Software Interface
17 6. Overdraft Processing - "Tiered Pricing"
18 7. Currency Transaction Reporting Interface
19 8. Bank Card Limits
20 9. Telephone Banking - Future Dated Transfers
21 10. Telephone Transfer - Per Diem Figure on Loan Payoffs
22 11. Telephone Banking - Date Driven Transaction History
23 12. Telephone Banking - Whisper
24 13. W-8's
25 14. Safe Deposit Box Numbers
TABLE OF CONTENTS (Continued)
26 Exhibit B to Schedule 3
27 1. Overpayment on Loan Payoff
28 2. HUMDA Interface
29 3. Account Analysis Statement Regeneration
<PAGE>
30 4. Checks Stop/Hold Display
31 5. BILL Paying
32 6. Duplicate Social Security Number
33 7. Member Banker Identifier
34 8. Fastcloser Interface
35 Schedule 4 - Preliminary Project Plan
36 Exhibit A to Schedule 4 - Generic Gantt Chart
37 Exhibit A to Schedule 4 - Revised Gantt Chart
38 Addendum No.1
Section 3.9 - Professional Services
Section 12 - Warranties
Section 19.4 - Non-Assignment
Section 19.5 - Non-Assignment
Additional Provision - Cap of $50,000 on FIserv Travel &
Living Expense
39 Addendum No. 2 - FIserv Fusion Deconversion
Waiver of Termination Fee
Waiver of Deconversion Tape Expense
Authority to use Fusion beyond termination date if required
40 Addendum No. 3 - Vendor Questionnaire Response
41 Addendum No. 4 - CBS Proposal
42 Addendum No. 5 - Corporate Guarantee by Flserv Inc.
43 Addendum No. 6 - Confidentiality Agreement
TABLE OF CONTENTS (Continued)
44 Addendum No. 7 - Correspondence
August 16 - Customization Requirements Sample
Construction Loan Reports
November 23 - Resolved Issues
November 29 - Resolved Issued
December 2 - Response to November 29 Letter
December 2 - Regulatory Assistance Center
Day One Modification Change Requests
<PAGE>
December 2 - Agreement Language
December 5-Teller Equipment
Conversion Schedule Language Account Mix for Warranty
December 9- Language Modifications (Various)
December 14 - Corrections (Various)
December 15 - Agreement Language (Various)
December 19 - Construction Loans
December 19 - Cash Management Commitments
Construction Loans
45 Addendum No. 8 - Credit Collection Accounting System
------------- 0 T H E R ------------------
46 Regulatory Assistance Center Agreement
47 Culverin Platform Automation Agreement
48 Shatswell McCloud Audit Software Agreement
49 CCAS Agreement
50 Image Software Agreement
51 PA Dept. of Banking Capital Expenditure Approval
52 FDIC Performance of Banking Services Notice
Bryn Mawr Bank Corporation
801 Lancaster Avenue
Bryn Mawr, Pennsylvania 19010-3396
(2l5) 526-2300
CERTIFIED RESOLUTIONS AND INCUMBENCY CERTIFICATE
------------------------------------------------
The undersigned Secretary of Bryn Mawr Bank Corporation does hereby certify
that the following is a true and correct copy of resolutions duly adopted at a
meeting of the Board of Directors of the Corporation held and called on December
15, 1994 at which a quorum was present and that said resolutions remain in full
force and effect as of the date hereof.
Resolutions of the Board of Directors
of
Bryn Mawr Bank Corporation
--------------------------
RESOLVED, that the Board of Directors of Bryn Mawr Bank Corporation (the
"Corporation") hereby approves; ratifies, confirms and adopts the terms and
conditions of the LICENSE AND SERVICE AGREEMENT with its Schedules and Exhibits
(the "agreement") by and between FISERV CIR, Inc. ("FISERV")and the Corporation
in substantially the form
<PAGE>
presented to the Board of Directors.
FURTHER RESOLVED, that the following persons (each an "Authorized Officer")
be and they hereby are, authorized to execute and deliver, on behalf of the
Corporation, the Agreement, together with such revisions as they consider
appropriate and any further amendments thereto, as deemed necessary or
appropriate by any such Authorized Officer.
1. Robert L. Stevens, President
2. Samuel C. Wasson, Jr., Secretary
3. Joseph W. Rebl, Treasurer
FURTHER RESOLVED, that any Authorized Officer be, and each of them hereby
is, authorized, jointly and severally, to take any and all action and execute
and deliver any and all documents in the name and on behalf of the Corporation
as may be deemed necessary or appropriate by any such Authorized officer to
carry out the purposes and intent of the foregoing resolutions and to perform
the obligations of the Corporation under the Agreement and any amendment
thereto.
FURTHER RESOLVED, that all actions heretofore taken by the officers of the
Corporation, and those of the officers of its subsidiary, The Bryn Mawr Trust
Company (the "Bank"), and on its behalf, in connection with any of the foregoing
matters are hereby in all respects ratified, confirmed and approved by the Board
of Directors of the Corporation.
FURTHER RESOLVED, that the approval of the Agreement is subject to the
specific condition that any approval required by the Bank from the Pennsylvania
Department of Banking pursuant to the Pennsylvania Banking Code of 1965, as
amended, and regulations issued thereunder with respect to the equipment
acquired pursuant to the Agreement based on a percentage of the amount of the
Bank's capital, surplus, unallocated reserves, undivided profits and capital
securities is duly obtained by the Bank.
Incumbency and Signature Certificate
This Certificate is executed and delivered to FIserv in connection with the
Agreement. the undersigned Secretary of the Corporation hereby certifies that
(i) the individuals listed below are duly elected officers of the Corporation,
and (ii) they hold the offices listed below their names and their signatures are
set forth opposite their names.
Robert L. Stevens
President
Samuel C. Wasson, Jr.
Secretary
Joseph W. Rebl
Treasurer
<PAGE>
Certificate of Corporate Secretary
I, Samuel C. Wasson, Jr., Secretary of the Corporation, certified that the above
resolutions are true and correct copies of the resolutions duly adopted at a
meeting of the Board of Directors of the Corporation duly called and held on
December 15, 1994 and the same now appears in the minute book of the Board of
Directors of the Corporation and the minutes reflect that a quorum was present
at the meeting of the Board of Directors at which the resolutions were adopted.
I further certify that, as of the date hereof, the foregoing resolutions and
Incumbency and Signature Certificate are in full force and effect and have not
been modified or rescinded.
Witness my hand and the seal of the Corporation this 21st day of December,
1994.
Samuel C. Wasson, Jr.
(Affix Corporate Seal)
FISERV CIR, INC.
UNANIMOUS WRITTEN CONSENT OF THE BOARD OF DIRECTORS
---------------------------------------------------
The undersigned, being the sole director of FIserv CIR, Inc., a Delaware
Corporation (the "Corporation"), DO HEREBY CONSENT to the adoption of, and DO
HEREBY ADOPT, the resolutions hereinafter set forth as the action of the Board
of Directors pursuant to Section 141(f) of the General Corporation Law of the
State of Delaware, with the same force and effect as if they had been duly
adopted at a special meeting of the Board of Directors of the Corporation duly
called and held for such purposes, and DO HEREBY DIRECT the Secretary of the
Corporation to file this Consent in the minute books of the Corporation:
WHEREAS, Raju Shivdasani holds the position of President, CBS
Division, and
WHEREAS, FIserv CIR, Inc., is a wholly owned subsidiary of FIserv,
Inc., having offices at 2601 Technology Drive, Orlando, Florida, among other
locations.
RESOLVED, that the President of the CBS Division has the authority to
act on behalf of FIserv in all matters involving the CBS Division locations.
IN WITNESS WHEREOF, the undersigned, being the sole Director of the
Corporation, has executed this consent as of the 28th day of December 1994.
<PAGE>
George D. Dalton
Attested on December 28, 1994
by Charles W. Sprague,
Assistant Secretary,
Flserv CIR, Inc.
FISERV CIR, INC.
CERTIFICATE OF ASSISTANT SECRETARY
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The undersigned, Charles W. Sprague, Assistant Secretary of FIserv CIR,
Inc., a Delaware Corporation ("Flserv"), hereby certifies as follows:
1. Attached hereto as Exhibit A is a true and correct copy of certain
resolutions adopted by the Board of Directors of FIserv by unanimous written
consent dated December 28, 1994, relating to that certain agreement with Bryn
Mawr Bank Corporation; and such resolutions have not, since their adoption, been
in any way modified or rescinded, are in full force and effect on the date
hereof and are all resolutions adopted by the Board of Directors of Flserv in
connection with such agreement and the transactions contemplated thereby.
2. The following persons are now, and at all times since September
30, 1994 have been, duly elected officers of Flserv, holding the office or
offices shown below and the signature set forth next to the name of each such
officer is his true and actual signature:
Name Office Signature
Raju Shivdasani President, CBS Division, Flserv CIR, Inc.
Charles W. Sprague Assistant Secretary
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the
28th day
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of December 1994.
Charles W. Sprague, Secretary
The undersigned, George D. Dalton, Chairman of the Board of FIserv, hereby
certifies that Charles W. prague is, and has been at all times since September
30, 1994, the duly elected and acting Secretary of Flserv and that the signature
set forth above his true and actual signature.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the
28th day of December, 1994.
George D. Dalton, Chairman of the Board
General Authority
-----------------
RESOLVED, that the proper officers of the Corporation be, and each of them
hereby is, authorized and directed to take all such further actions and to
execute and deliver, in the name and on behalf of the Corporation and under its
corporate seal or otherwise, any and all such further documents and instruments
and to pay all such expenses, as they or any of them may deem necessary or
advisable to carry out fully the purposes and intent of the foregoing resolution
and the transactions contemplated thereby; and that the taking of any such
action, the execution and delivery of each such document or instrument, and the
payment of each such expenses shall be conclusive evidence of their necessity or
advisability.
IN WITNESS WHEREOF, the Undersigned being the sole director of the
Corporation, has hereunto signed this consent as of the 28th day of December,
1994.
George D. Dalton
<PAGE>
License and Service Agreement
This LICENSE AND SERVICE AGREEMENT numbered 3810145 is entered into as of the
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Effective Date below by and between
FIserv CIR, Inc.
a Corporation whose registered office is located at
2601 Technology Drive
Orlando, FL 32804
(hereinafter called 'Company') and
Bryn Mawr Bank Corporation
whose registered office is located at
801 Lancaster Avenue
Bryn Mawr, PA 19010
(hereinafter called 'Client')
This Agreement shall be construed and enforced under the laws of the State of
Pennsylvania.
Effective Date: December 30, 1994
<PAGE>
1
Witnesseth:
WHEREAS, Company is the licensor of the Software System (as hereinafter
defined), and
WHEREAS, Client wishes to install and Use (as hereinafter defined), the
Software System in Client's premises.
NOW, THEREFORE, be parties hereto agree from the Effective Date as
follows:
L Definitions
The following are the definitions of various terms used in this
Agreement:
1.1 'Accounts' means the total number of individually designated accounts
processed by the Transaction, Time, and Loan Subsystems of the Software
System.
1.2 'Archive Location" means that premise identified on Schedule I of this
Agreement in which Client will maintain a non-production copy of the
Software System and Modifications.
1.3 'Business Requirements"' means those high level descriptions of specific
Client required modifications outlined in Schedule 3 of this Agreement.
1.4 'Client Confidential Information' means any confidential information
concerning Client's business and all data pertaining to Client's
customers.
1.5 'Computer System' means that dedicated computer machinery and
manufacturer-supplied software that meets or exceeds the requirements
identified on Schedule 2. Client shall have the sole responsibility to
own or lease the equipment. Client shall have the responsibility to
unpack, install, test and maintain the Computer System in accordance with
all applicable building or electrical codes, regulations or requirements.
Company will provide Client assistance with the planning and installation
of the Computer System as detailed on Exhibit A to Schedule 2 of this
Agreement in consideration for Client acquiring the equipment through the
Company.
1.6 'Conversion' means the development by Company of computer programs
designed to transfer the Client's existing data to the Software System
and Modifications specified on Exhibit A. to Schedule 3 of the Agreement
(the 'Exhibit A Modifications') and the actual successful transfer of
Clients existing data to the Software System and Exhibit A Modifications
in a form which is efficiently readable by the Software System and
Exhibit A Modifications and that can be effectively processed by the
Software System and Exhibit A Modifications. The Company hereby agrees to
accept Flserv Fusion deconversion media and formats on behalf of Client.
Client agrees
<PAGE>
to provide in records and data not processed with FIserv
Fusion in a media format approved for use by the Company in order for the
Company to fulfill its Conversion related tasks. Conversion of Client's
data to the Software System and Exhibit A Modifications shall be deemed
to be completed upon the conclusion of the events identified on Schedule
4 of this Agreement as well as the following:
(i) Application file to file conversion of Client input files,
reports and history to the Software System and Exhibit A
Modifications. Client must be able to prove monetary amounts,
with reasonable allowance for rounding errors.
(ii) All Exhibit A to Schedule 3 modifications are delivered,
operational and free from Specification Nonconformities.
(iii) Successful completion in a live production environment of seven
(7) consecutive end-of-day batch processing runs and at least one
(1) month-end batch processing run, one (1) successful mid-month
Freddie Mac Investor Reporting cycle and one (1) successful
month-end dealer reserve accounting period.
(iv) Successful mapping of Client products to the Software System and
Exhibit A Modifications from the Flserv Fusion Systems, CLCS
Construction Loan System and Bryn Mawr Trust Safe Deposit Box
System.
(v) Successful interface of the following Subsystem with the Software
Ye"o
a. Culverin Platform Automation System
b. CCAS Credit Collection Accounting System
c. MAC ATM Processing
d. Flserv Distributed Processing Group Automated Return System
e. Flserv Distributed Processing Group Proof and Correction
System
f. lntervoice Telephone Banker VRU
g. Credit Bureau acceptance of tapes produced by the CBS System
h. CBS Cash Management System
i. Regulatory Assistance Center Interface
(vi) Client Acceptance and Conversion sign-off, which will not be
unreasonably withheld in light of the aforementioned criteria
being met.
1.6.1 Company agrees to assist Client by exercising reasonable professional
effort to help facilitate the interface of the following with the
Software System at no additional cost to Client.
j. Level 3 Audit Software
k. IPS Accounts Payable Software
l. IPS Investment Account Software
m. IPS Fixed Asset Accounting Software
<PAGE>
2
n. OKRA MCIF File Preparation
o. G.G. Pulley POD Interface
1.7 'Documentation' means those manuals containing descriptions of the
functionality and operating procedures of the Software System further
described on Exhibit A to Schedule 1 of this Agreement.
1.8 'Effective Date' means the date identified as such in this Agreement as
the date upon which this Agreement shall commence.
1.9 'Enhancements' mean changes made to the Software System which add program
features or functions not originally within the Software System along
with appropriate Documentation, generally packaged as additional modules
of the Software System, and which are generally provided to Company's
clients upon payment of additional license fees. Company reserves the
right to reasonably define which changes are Enhancements and will be
priced separately. Client will have no obligation to acquire or ba use
Enhancements.
1.10 'Functional Specifications' means that work product produced by the
Company for Client in accordance with the Client's defined Business
Requirements.
1.11 'License Fee' means the total sum specified on Schedule I to this
Agreement for the subsystems of the Software System identified on
Schedule 1 of this Agreement, together with three (3) sets of the Company
Standard Documentation including Complimentary Product Guides and
Internal Operations Guides for the subsystems identified on Schedule 1,
License Section Part A of this Agreement. Company hereby agrees, other
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than as outlined on Schedule I to this Agreement, that there will be no
additional License Fees payable by the Client for Use of the
Modifications identified on Exhibit A and Exhibit B to Schedule 3 of this
Agreement.
1.12 'Maintenance Fee means those fees for the time being in effect for the
provision of the Maintenance Services hereunder.
1.13 'Maintenance Services' means services to keep the Software System and
Exhibit A and Exhibit B Modifications on Schedule 3 of this Agreement up
to date through periodic Upgrades, sometimes referred to as base
releases, including without limitation maintaining compliance with
regulations and for services to correct a Nonconformity in the Software
System and Modifications identified on Schedule 3 of this Agreement as it
is upgraded from time to time. Maintenance Services will also apply to
Enhancements, though *the Company may add additional maintenance fees for
Enhancements which the Client consents to acquire and use. Maintenance
Services are available only for the current and last prior release of the
Software System.
<PAGE>
1.14 'Modifications' as used in this Agreement means programming changes made
to the Software System performed by the Company.
1.15 'Nonconformity' means a failure of the Software System and Modifications
identified on Exhibit A and Exhibit B to Schedule 3 of this Agreement to
accurately and efficiently process Client's data or to perform functions
described in Company's Documentation and/or Company's System Detailed
Specifications. Each reported Nonconformity will be classified by Company
in accordance with the following list of priorities
(a) Level One: Any Nonconformity which renders the Software System or
any modification to it performed by Company inoperative.
(b) Level Two: Any Nonconformity which significantly degrades the
performance of the Software System or Modifications to it performed
by Company, or which affects regulatory compliance, including but
not limited to the calculation of interest, fees and balances, and
errors affecting the accuracy of CUSTOMER statements.
(c) Level Three: A Nonconformity which has a significant impact on the
Client's ability to perform its normal business functions and for
which no circumvent procedure is available.
(d) Level Four: A Nonconformity which negatively impacts the ability of
the Client to perform its normal business functions but for which
there is a relatively cost effective circumvent procedure available.
(e) Level Five: A Nonconformity which does not fit into any of the above
categories.
1.16 'Other Location' means that premise identified on Schedule I of this
Agreement in which Client may maintain an additional non-production copy
of the Software System.
1.17 'Processing Location means the premise identified on Schedule 1 of this
Agreement in which Client will operate and Use the Software System.
1.18 'Professional Service Fees' means those services provided by Company to
perform installation and Conversion activities, make modifications and
interfaces, train Client's employees or other services referred to in
Schedule 1 of the Agreement and agreed to by Company and Client.
Professional Service fees for the modifications included on Exhibit A and
Exhibit B to Schedule 3 are defined in the Professional Services Section
of Schedule 1 of the Agreement. The Aggregate Professional Services Fees
agreed to by the parties in Parts A, B and C of Professional Services
Section of Schedule I to the Agreement total $266,825 (which reflects the
$16,000 discount offered per Robin Smith's letter dated November
29,1994). Additional Professional Service
<PAGE>
3
Fees may be incurred outside of those identified on Schedule 1 at the
request of Client, and agreed to by Company, for the daily rates
identified on Schedule 1 in Part D.
1.19 'Project Plan' means that document, substantially similar to Exhibit A of
Schedule 4 of this Agreement, which from time to time will be updated and
amended by mutual agreement of the Company and Client for any work
contemplated by this Agreement. Company and Client agree that additions,
modifications or changes to the Project Plan are meant to add detailed
task items for the purpose of better project management and in no cam?
are to be construed as a change to the scope, nature or timing of the
Conversion nor construed as an agreement to delay or change the
Conversion Date provided, however, that the Conversion Date may be
delayed or postponed by be mutual agreement of the parties to this
Agreement which is evidenced by a writing signed by duly authorized
representatives of be parties hereto.
1.20 'Software System' means the computer programs in source code and
procedure statements in machine readable form, together with three (3)
sets of the Company standard Documentation including Complimentary
Product Guides and Internal Operations Guides for the subsystems
identified on Schedule 1, License Section Part A of this Agreement. The
Software System does not, unless specified differently, include separate,
independent and standalone modules, subsystems or modifications which
have been developed and maintained by me Company, Client or any Third
Party.
1.21 'Specification Nonconformity' means a failure of the modified Software
System to operate in accordance with the System Detail Specifications.
Following Client Acceptance of modifications, Specification
Nonconformities will be handled according to the list of priorities
defined in Section 1.14 of this Agreement
1.22 'System Detail Specifications' means those detailed work specifications
developed by Company for Client as a result of the Client's defined
Business Requirement(s) and subsequent acceptance of the Functional
Specifications of the Business Requirement.
1.23 'Taxes' means all sales, use, excise, value added, and other taxes and
duties however designated which are levied by any taxing authority having
jurisdiction over the Client. Taxes shall not include any levies by any
taxing authority which are based upon the net income of Company.
1.24 'Third Party' means any party other than Company's employees or
subcontractors.
1.25 'Upgrades' means changes made to the Software System and Modifications to
it performed by Company and related Documentation to maintain
compatibility with operating system software release, improve upon
previously existing features, perform program fixes and maintain the
<PAGE>
Software System and modifications in compliance with regulatory
requirements and which are sometimes referred to as "base releases" and
are available to Client for no additional License, Maintenance and
typically do not involve additional Professional Services Fees.
1.26 'Use' means copying or loading any portion of the Software System or
modifications thereof from storage units or media into any equipment for
the processing of data by the Software System and Modifications once so
loaded, or the operation of any procedure or machine instruction
utilizing any portion of either the computer program or instructional
material supplied with the Software System. Use is deemed to occur at the
Processing Location where any of the above Processes happen. Use is
limited to type of operations described in Company Documentation solely
to process Client's own work and that of majority-owned affiliates. Use
specifically excludes any service bureau or timeshare services to
minority-owned or unaffiliated third parties without prior written
consent by Company and payment by Client of additional fees in accordance
with mutually agreed terms.
1.27 'Workday' means an eight-hour working day for the purposes of this
Agreement.
1.28 'Conversion Date' means the date on which the results identified on
Section 1.6 of this Agreement are successfully attained and the
successful completion of tasks identified on the Project Plan which must
occur on or before November 24, 1995. This date cannot be delayed or
postponed without prior written agreement by Company and Client.
2. License to Use the Software System
2.1 Company agrees to furnish the Software System and Modifications
identified on Exhibit A and Exhibit B to Schedule 3 of this Agreement to
Client and does hereby grant to Client a non-exclusive, nontransferable
License to Use the Software System and Modifications thereof at the
Processing Location to press the designated number of Accounts as
specified on Schedule 1 of this Agreement.
2.2 Client may change the Processing Location, without cost to Client, in the
event Client transfers it's data processing department to a new
Processing Location within the same country as the Processing Location.
Client will provide Company with a minimum of fifteen (15) days advance
notice of any proposed transfer of the Processing Location in which the
Software System is being used for production purposes.
2.3 The Company, prohibits the copying of any portions of the Software System
except that Client may copy reasonable quantities of the Documentation;
and may copy machine language code, in whole or in part, in reasonable
quantities, in printed or electronic
4
<PAGE>
form, for use by Client at another location for archives back-up,
emergency restart or testing purposes, or to replace copy made on
defective media. The original, and any copies of the Software System, or
any part thereof, shall be the property of Company.
2.4 Client shall maintain copies of the Software System and Modifications
thereof at the locations) specified on Schedule 1 of this Agreement.
Client may, in the event of a Computer System failure, malfunction,
disaster or for disaster recovery testing purposes, utilize copies of the
Software System and Modifications at other than the Processing Location,
provided &at upon correction of the Computer System failure, malfunction,
disaster or completion of the disaster recovery testing, the Software
System and Modifications thereof are returned to production Use solely at
the Processing Location.
2.5 Client shall reproduce and include Company's copyright and other
proprietary notices on all copies, in whole or in part, in any form, of
the Software System made in accordance with the terms of this Agreement.
2.6 Company grants to Client the right to Use any Enhancements or
modifications furnished or authorized by Company pursuant to a separate
written agreement.
3. Professional Services
3.1 In consideration of the payment to Company by Client of the Professional
Services Fees and the cost of all items and services provided and any
other expenses incurred by Company in connection with this Agreement, as
defined on Schedule 1, Company hereby agrees to provide personnel to work
on behalf of Client in accordance with the terms and conditions set out
below.
3.2 Company shall develop modifications to the Software System for the Client
based upon the Business Requirements attached as Schedule 3 to this
Agreement. The costs for these modifications are outlined on Schedule 1
of this Agreement.
3.3 Company shall provide a Project Plan based upon the requirements set
forth on Schedule 4 to this Agreement and substantially similar to the
Project Plan attached as Exhibit A to Schedule 4 of this Agreement. The
Project Plan provided to Client shall contain a listing of the nature and
timing of the tasks to complete the project, some of which are to be
performed by Company and some by Client. Company shall utilize its
reasonable best efforts to complete the project in accordance with the
dates set forth in the Project Plan. Furthermore, Company and Client,
agree that any additions, changes or deletions to the Project Plan will
be incorporated as part of Schedule 4 to this Agreement provided,
however, that the Conversion Date may be delayed or postponed by the
mutual agreement of the parties to this Agreement which is evidenced by a
writing signed by duly authorized representatives of the parties hereto.
<PAGE>
3.4 Company is to provide Modifications defined on Exhibit A and Exhibit B to
Schedule 3 of this Agreement, and is to provide installation and
conversion services and training services for Client for the Software
System and Modifications. The fees for the Modifications are specified on
Schedule 1. The nature and timing of installation, conversion tasks and
training shall be specified in the Project Plan mutually agreed upon by
the parties hereto.
3.5 Modifications to the Software System shall be based upon specifications
created by Company and approved by Client as provided below:
(i) Company shall develop Functional Specifications based upon the
Business Requirements contained in Schedule 3 of this Agreement
Company shall not be obligated to perform any development work
until the Functional Specifications have been accepted in writing
by Client which acceptance shall not be unreasonably withheld or
unduly delayed. Company and Client agree the Functional
Specifications developed will be incorporated as part of this
Agreement.
(ii) Modifications, changes or additions to the Software System beyond
those stated in the Functional Specifications shall be added only
upon mutual written agreement. In the event the parties agree to
add any such items, the Project Plan shall automatically be
modified to the extent necessary to allow for the implementation
or provision of the items.
(iii) After the acceptance of the Functional Specifications, the
Company shall prepare "System Detail Specifications" including an
acceptance test plan for the adaptations described Herein. After
Client's written acceptance of the System Detail Specifications,
which acceptance shall not be unreasonably withheld or delayed,
Company shall commence activities to modify the Software System
for use by Client in accordance with the Project Plan.
(iv) The Software System Modifications shall be deemed to have been
accepted by Client upon the completion of a formal acceptance
test (as set forth in the Systems Detail Specifications) and
Client written acceptance. Acceptance by Client will not be
unreasonably withheld or unduly delayed. Client agrees promptly
to notify Company in writing (and with reasonable particularity)
upon conclusion of the acceptance test or earlier upon discovery
of any Specification Nonconformities disclosed by such testing or
use. Company shall correct any Specification Nonconformities
disclosed by such testing without further charge to Client within
a reasonable time of Client's notice.
5
3.6 Additional Professional Services Fees may be incurred outside of those
identified on Schedule I at the request of Client, and agreed to by
Company, for the daily rates identified on Schedule 1.
<PAGE>
3.7 If support is primarily required in part days, Company may notify Client
that an hourly fee rate shall apply. The hourly rate will be calculated
prorata of the stated daily rate unless otherwise agreed.
3.8 The daily rates quoted in Schedule I will be valid for three (3) months
following Client's conversion and acceptance of the Software System.
Thereafter, they will be subject to change by Company on one (1) months
notice
4. Maintenance Services
4.1 In consideration of the payment to Company by Client of the Maintenance
Fee, Company agrees to furnish to Client Maintenance Services as
described and subject to the terms and conditions contained in Agreement.
4.2 Company shall maintain the Software System and Modifications identified
on Exhibit A and Exhibit B to Schedule 3 of this Agreement with
appropriate features.that will enable the Client to comply with
applicable Federal and State regulations.
4.3 As part of Maintenance Services, Company shall provide telephone support
for reporting of Level One, Level Two, or Level Three Nonconformities
twenty-four hours per day, seven days per week Company shall accept
reports of Level Four and Level Five Nonconformities or related Client
questions during normal business hours on Monday through Friday from 8:30
AM to 5:30 PM Eastern time. Company may, upon Client authorization and
initiation, u@e remote diagnostic software and dial-up telephone lines in
providing these services.
4.4 Company shall promptly assign such technical personnel as are necessary
to identify, isolate, and reconstruct any reported Level One
Nonconformity and, provided that such Level One Nonconformity is capable
of reconstruction and is due to a defect in the Software System or
modification thereof performed by Company, Company shall utilize its best
efforts to correct or utilize a circumvent procedure to restore system
operation within twenty-four (24) hours of Company's receipt of the call.
Company shall provide such services to Client free of any additional
Maintenance Fees and charges, including but no limited to any
reimbursement for travel of Company technical personnel incurred during
the resolution of a Level One Nonconformity.
4.5 Company shall use its best efforts to correct or adopt a circumvent
procedure with respect to a Level Two Nonconformity within forty-eight
hours of its receipt of the Level Two Nonconformity report.
4.6 Company shall use its commercially reasonable best efforts to correct a
Level Three Nonconformity within five business days of its receipt of the
Level Three Nonconformity report.
4.7 Company shall use its commercially reasonable best efforts to correct or
adopt a circumvent procedure with respect to a Level Four Nonconformity
within twenty-four hours of its receipt of the Nonconformity. If a
circumvent procedure has been adopted, Company shall deliver a software
<PAGE>
coded correction to the Level Four Nonconformity with the next scheduled
Upgrade of the Software System that is still open for development changes
at the time of the notice of the Level Four Nonconformity.
4.8 Company will use its commercially reasonable best efforts to correct
Level Five Nonconformities with the next Upgrade open for development at
the time of the notice of the Level Five Nonconformity.
4.9 Should Company's review of the Level One, Level Two or Level Three
Nonconformity indicate, in Company's reasonable opinion, that the
reported problem is not in the Software System or Exhibit A and Exhibit B
to Schedule 3 modification but is due to Client's abuse or misuse of the
Software System or modification thereof, or by a modification or addition
to the Software System as modified not performed by Company (inclusive of
the integration by other than Company of Third Party products with the
Software System or Modifications), or by Client's failure to properly
maintain the Computer System or Modifications, or to install the required
System Software releases as instructed by Company, then:
(i) Client agrees, if required by Company, to reimburse Company the
related costs of work performed by Company in investigating the problem
calculated on a time-and-materials basis at Company's then standard
professional service rates, and
(ii) Company, on request of Client, shall advise Client whether Company
can correct or assist in resolving such problem, and the terms under
which Company shall undertake the same, and on written acceptance by
Client shall correct or assist in resolving the problem in accordance
with such terms.
4.10 Services in addition to those defined in or elected under this Agreement
may be made available on a time-and-materials basis at Company's current
professional services rates and on a mutually agreed upon schedule.
4.11 The initial Maintenance Fee specified in Schedule 1 of this Agreement
shall be effective on the Conversion Date and shall continue for a period
of five (5) years. There may be an increase in the Maintenance Fee
specified on Schedule 1 on each anniversary of the Conversion Date. The
Maintenance Fee shall not be increased by more than the lesser of (i)
eight percent (8%) per year or (ii) the change in the U.S. Department of
Labor, Consumer Price Index for Urban Wage Earners and Clerical
6
Workers, All Cities, (1982 = 100%) for the twelve under this month period
preceding the annual anniversary of the Conversion Date.
<PAGE>
4.12 Maintenance Fees shall also be subject to increase following the delivery
of Enhancements to the Software System accepted by Client pursuant to a
separate written agreement or due to changes in the number of accounts
processed as specified in Schedule I of this Agreement.
4.13 Invoicing of the Maintenance Fee will commence as specified on
Schedule 1.
5. Use Of And Rights To Company's Work Product
All information, reports, studies, object or source code, flow charts,
diagrams and other tangible or intangible material of any nature
whatsoever produced by or as a result of any of the services performed
hereunder shall be the sole and exclusive property of Company or its
corporate parent. Client shall be entitled to Use all such work product
produced by Company in accordance with the terms and conditions of this
Agreement. Nothing contained in this Agreement shall be deemed to provide
greater rights with respect to the Software System, as modified for
Client's use herein, than those provided in this Agreement.
6. Term
6.1 The term of the License grant shall begin on the Effective Date and
continue in perpetuity unless terminated earlier as provided herein.
6.2 Maintenance Services may be renewed after the initial five (5) year term
following the Conversion Date for a successive term of one (1), two (2),
three (3), four (4) or five (5) years depending upon Company's business
practice for renewal agreement terms in effect at that time and mutually
agreed to by the parties hereto at a monthly,fee of $5,690 for the first
year of such agreement.
7. Delivery
The Company agrees to deliver the Software System and Modifications
identified on Exhibit A and Exhibit B to Schedule 3 to the Processing
Location. The Client is responsible for copying and maintaining any
additional copies of the Software System and Modifications at other
authorized locations.
8. Payment
8.1 Company shall add to each invoice for reimbursement by Client an amount
equal to any applicable Taxes. Company shall remit such Taxes to the
appropriate taxing authorities.
8.2 Each payment to be made to Company under this Agreement shall be paid by
Client, in funds as specified on Schedule 1, within thirty (30) days of
the date of an invoice in respect thereof and the time of payment shall
be of the essence of this Agreement.
8.3 If the whole or any part of any invoice remains outstanding for thirty
(30) days or more, the Client shall pay an agreed financial charge
calculated at the rate of one and one half percent (1-1/2%) per part or
<PAGE>
complete month on the overdue balance.
8.4 Except as expressly provided in this Agreement to the contrary, Client
agrees to pay the reasonable travel and living expenses of any employees
of Company and its authorized contractors who render services at either
the Processing Location or any other Client site in connection with the
activities described in this Agreement. All expenses shall be itemized on
invoices submitted by Company and shall be due and payable upon
presentation of each invoice as provided herein.
9. Performance
9.1 Client shall give Company full access to the Processing Location, the
Software System, and the Computer System to enable the Company to provide
services hereunder and shall make available information, facilities, and
services reasonably required by Company for the performance of its
obligations under this Agreement provided that Client's cooperation with
Company will not unreasonably interfere with the Client's on-going
operation of its business.
9.2 Work in determining the nature of any problem or in making corrections,
amendments, or additions to the Software System may be carried out at
Company's site or at the Processing Location at the discretion of
Company.
9.3 Client agrees to maintain the Computer System and operate the Software
System according to Company's reasonable recommendations during the term
of this Agreement.
10. Rescheduling
Company and Client do not contemplate rescheduling of the Conversion Date
unless mutually agreed to in writing between Company and Client.
11. Schedules, Exhibits, Addenda and Other Documents
The attached Schedules, Exhibits, Addenda and Other Documents form part
of and are included in this Agreement.
12. Warranties
12.1 The Company warrants, for a period of ninety (90) days following Client
acceptance of the Software
7
System, the Software System will perform the functions specified in the
Documentation identified in Exhibit A of Schedule I to this Agreement. In
the event the Software System fails to perform any of those functions,
and the Company is notified in writing stating with reasonable
particularity the nature of the Software System's failure to perform
those functions, Company will promptly
<PAGE>
commence to correct these Nonconformities in accordance with the same
provisions outlined in Section 4 of this Agreement. This warranty shall
not apply if the failure has been caused by unauthorized changes to the
Software System or Modifications identified on Exhibit A and Exhibit B to
Schedule 3 or by incorrect Use. Circumvent procedures recommended by
Company and agreed to by Client pursuant to Section 1.11 of this
Agreement shall not constitute incorrect use for the purposes of this
Agreement. Furthermore, Company warrants the Software System and those
Modifications are designed to operate on the minimum Computer System
specified on Schedule 2 of this Agreement and both parties hereto agree
that the warranties given by Company are conditional upon the procurement
and maintenance by Client of the Computer System.
12.2 The Company's obligation under the warranty stated in the foregoing
paragraph shall be to repair or replace defective or non-conforming parts
of the Software System at its own expense.
12.3 The Company warrants that it has the right to License the Use of the
Software System and Modifications thereto performed by Company identified
on Exhibit A and Exhibit B to Schedule 3 of this Agreement.
12.4 Company warrants that the Services described in this Agreement shall be
performed in a workmanlike manner and in accordance with standards
applicable to the financial software services industry.
12.5 THE WARRANTIES STATED ABOVE ARE LIMITED WARRANTIES AND ARE THE ONLY
WARRANTIES MADE BY COMPANY. COMPANY DOES NOT MAKE, AND CLIENT HEREBY
EXPRESSLY WAIVES, ALL OTHER WARRANTIES OF MERCHANTABILITY AND FITNESS FOR
A PARTICULAR PURPOSE. THE STATED EXPRESS WARRANTIES ARE IN LIEU OF ALL
LIABILITIES OR OBLIGATIONS OF COMPANY FOR DAMAGES ARISING OUT OF OR IN
CONNECTION WiTH THE DELIVERY, USE OR PERFORMANCE OF THE SOFTWARE SYSTEM
13. Indemnity
13.1 Company shall indemnify Client and hold it harmless, including Client's
incursion of any legal fees, associated with any claim or action which
alleges that the Use of the Software System and Modifications thereof
performed by Company infringes a patent, copyright or other proprietary
right of a third party. Client agrees that it will notify Company
promptly in writing of any such claim and grants Company sole right to
control the defense and disposition of such claim.
13.3 If as a result of any such claim Company or Client is permanently
enjoined from using the Software System or Modifications thereof
performed by Company by a final nonappealable decree, Company may procure
for Client to continue to use the Software System or cation thereof
<PAGE>
or at its sole option and expense, may provide a replacement or
modification for the Software System so as to settle such a claim. If
modification of the Software System is not reasonably practical in the
sole opinion of the Company (reasonably given), Company may discontinue
and terminate this license upon written notice to Client and shall refund
to Client all License and Modification Fees paid to Company under this
Agreement. In making this determination, Company will give due
consideration to all factors including financial expense.
13.3 Each party shall indemnify and hold the other harmless against any
(a) loss of or any damage to any tangible property or
(b) injury to or death of any person;
caused by the negligence of, breach of statutory duty by, or willful
misconduct of the indemnifying party's employees, agents, or sub-
contractors.
13.4 The foregoing states the entire liability of Company for the infringement
of any copyrights, patents or other proprietary rights of a third person
by the Software System or any parts thereof or any modifications thereof
performed by Company, and Client hereby expressly waives any other
liabilities on the part of Company arising therefrom.
14. Limitation of Liability of the Parties
14.1 Company shall have no liability for any claim which is based upon
(a) the Use of any part of the Software System in combination with
materials or software not provided by Company; or ...
(b) modifications made by Client or any Third Party.
14.2 COMPANY SHALL HAVE NO LIABILITY With RESPECT TO ITS OBLIGATIONS UNDER
THIS AGREEMENT OR OTHERWISE FOR LOSS OF GOODWILL, OR FOR SPECIAL,
INDIRECT, CONSEQUENTIAL, OR INCIDENTAL DAMAGES, WHETHER IN TORT OR IN
CONTRACT, EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF
8
SUCH DAMAGES. IN ANY EVENT, THE LIABILITY OF COMPANY TO CLIENT FOR ANY
REASON AND UPON ANY CAUSE OF ACTION WHATSOEVER SHALL BE LIMITED TO THE
AMOUNT OF ANY LICENSE FEE WHICH CLIENT HAS PAID TO COMPANY AS OF THE DATE
ON WHICH SUCH CAUSE OF ACTION ACCRUES.
<PAGE>
15. Title
15.1 Nothing in this Agreement shall convey to Client any title to or any
rights in the Software System including but not limited to all
proprietary rights or ownership of aM, modifications. The Client's sole
right in relation to the Software System or any modifications is to Use
the same for the duration of this Agreement under the terms and
conditions herein contained.
15.2 The Software System and all modifications, Enhancements, or Upgrades made
to the Software System and all patents, copyrights, or other proprietary
rights related to each of the above are the sole and exclusive property
of Company, whether made by Company, Client or any of their employees or
agents.
16. Non-Disclosure
16.1 Company has granted Client the limited right to use the Software System
as provided in this Agreement. Client acknowledges that
(a) the Software System, including all specifications, work product,
translations and other materials developed by Company, and
(b) the terms and conditions of this Agreement contain highly
confidential unique, secret and valuable information of Company.
Client agrees that it shall not decompile, disassemble or reverse
engineer the Software System and that it shall not sell, transfer,
publish, disclose, display or otherwise make available to others the
Software System, any materials relating to or forming a part of the
Software System or any other proprietary information of Company
without the prior written consent of Company except as is inherently
necessary in the use of the Software System in Client's business.
Client agrees to secure and protect the Software System and
proprietary information and to take appropriate action either by
publication of a policy applicable to all employees and
subcontractors or by written agreement with its employees and
subcontractors who are permitted access to such materials to satisfy
its obligations hereunder. Client further agrees that it shall use
its best efforts to assist Company in identifying and preventing any
unauthorized use or disclosure of any portion of the Software System
or proprietary information. As a precondition of Client's disclosure
of the Software System in whole or in part, to a Third Party, Client
shall obtain
9
from any Third Party an appropriate instrument in writing which
protects the Company's rights under this section of the Agreement.
All obligations and undertakings of Client relating to
confidentiality and nondisclosure, whether contained in this Section
or elsewhere in this Agreement, shall survive the termination of
this Agreement for any reason.
16.2 Company shall protect any Client Confidential Information from disclosure
with the same
<PAGE>
degree of care afforded by Company to its own confidential
information. All obligations and undertakings of Company specified herein
with respect to Client Confidential Information shaft survive the
termination of this Agreement for whatever reason.
16.3 Client shall permit Company's authorized representatives at all
reasonable times to audit Client's Use at the Processing Location, or
electronically, to determine that the provisions of this Agreement are
being faithfully performed. For that purpose, after reasonable advance
notice to Client, Company shall be entitled to enter into any of Client's
premises and Client hereby grants authority to Company and authorized
representatives to enter such premises for such purpose. Any such audit
shall be conducted in such a manner and at times so as to minimize the
disruption to Client's business and/or the Use of the Software System.
16.4 Client shall promptly notify Company if it becomes aware of any breach of
confidence relating to the Software System or other Company proprietary
information and give Company all reasonable assistance in connection with
Company's investigation of same.
16.5 For the purpose of this Section 16 of the Agreement, the Client shall
include the Client and its subsidiary and their employees and their
respective agents and subcontractors.
16.6 Company agrees not to use the Client's name in any press release or any
public disclosure without prior written consent.
17. Default, Remedies and Termination
17.1 The occurrence of any of the following shall constitute a default by
Client: (i) Client shall fail to make any payment due under this
Agreement after ten (10) days' written notice from Company to Client, or
(ii) Client has breached or failed to abide by a material provision of
this Agreement and Client has not cured the breach or failure (or, if the
breach of failure is such that its cure would take a longer period,
commenced to cure and proceeded diligently therewith) within thirty (30)
days of receiving written notice from Company specifying the breach or
failure, or (iii) Client terminates or suspends its business.
17.2 In be event of a default by Client, Company shall have the following
remedies: (i) Company may suspend performance of its obligations under
this Agreement, (ii) Company may, upon notice to Client terminate this
Agreement, (iii) Company may, upon notice to Client, terminate the
license contained in this Agreement for Client to use the Software
System, and (iv) Company shall have all who- rights and remedies provided
for by law, including equitable remedies.
17.3 The occurrence of any of the following shall constitute a default by
Company: (i) Company shall fail to make any payment due under this
Agreement after ten (10) days' written notice from Client to Company, or
(ii) Company has breached or failed to abide by a material provision of
this Agreement and Company has not cured the breach or failure (or, if
the breach of failure is such that its cure would take a longer period,
commenced to cure and proceeds diligently therewith) within thirty (30)
days of receiving written notice from Client specifying the breach or
failure, or (iii) Company terminates or suspends its business, becomes
<PAGE>
subject to any bankruptcy or insolvency proceeding under federal or state
law (unless removed or dismissed within sixty (60) days from the
commencement thereof) or becomes insolvent, becomes subject to direct
control by a trustee, receiver or similar authority, or makes an
assignment for the benefit of creditors, or (iv) an attempt by the
Company to maintain compatibility of the Software System with the
Computer System or (v) an attempt by the Company to assign the Agreement
or any action by way of delegation of duties or otherwise the result of
which is a de facto assignment of the Company's duties and or
responsibilities under the Agreement, except as provided in Section 19.4
hereof.
17.4 In the event of a default by Company, Client shall have the following
remedies (i) Client may suspend performance of any or all of its
obligations under the Agreement and so long as non fulfillment by the
Client of its obligations under the Agreement does not prevent the
performance by the Company of its obligations under the Agreement, the
Company shall continue to perform such obligations, and further provided
that as long as the event of default by the Company continues, the Client
is not obligated to pay the Company any sums due under the Agreement,
(ii) Client may, upon notice to the Company, terminate this Agreement,
and (iii) Client shall have all other rights and remedies provided by
law, including equitable remedies.
17.5 In the event of Termination of this Agreement, whether by Company or by
Client, Company shall allow Client up to one (1) year to continue using
the Software System, provided thereafter, Client returns or destroys the
Software System and provided that Client continues to pay all fees due
and payable under this Agreement and Company returns all information and
data which the Company has concerning the Client and any of its
subsidiaries.
10
17.6 Notwithstanding any other provision of the Agreement, in the event that
the Client is acquired and the Company refuses for whatever reason to
assign this Agreement to an entity satisfactory to the Client or
terminate this Agreement at the Client's request, the Client may
terminate this Agreement and will be relieved of any further obligations
and liability under the Agreement to the Company on the Termination Date,
herein defined, by (i) giving the Company not less than thirty (30) days
prior written notice of the date on which the Client will terminate the
Agreement (the "Termination Date") and (ii) tendering to the Company on
or prior to the Termination Date the aggregate unpaid balance of
Maintenance Fee due to the Company pursuant to this Agreement.
18. Force Majeure
Neither party shall be responsible for delays or failures in performance
resulting from acts reasonably beyond the control of that party.
<PAGE>
19. Non-Assignment
19.1 In the event of the sale of fifty percent (50%) or more of Client's
common stock, or the sale of all or substantially all of Client's assets,
or in the event of any merger in which Client is not the surviving
organization, Client may transfer this Agreement and the license upon the
prior written consent of Company, which consent shall not be unreasonably
withheld or delayed.
19.2 If the organization acquiring Client's common stock, assets or surviving
a merger is an organization deriving more than five percent (5%) of its
gross revenues from providing service bureau, time share, computer
software consulting services, computer software licensing or computer
hardware sales, Company shall be under no obligation to consent to such
transfer.
19.3 Except as expressly provided above neither party may assign or transfer
its rights, duties or obligations under this Agreement to any person or
entity, in whole or in part, without the prior written consent of the
other party, which consent shall not be unreasonably withheld or delayed.
20. Entire Agreement
20.1 This instrument constitutes the complete and exclusive statement of the
Agreement between the parties as to the subject matter hereof and
supersedes all previous Agreements with respect thereto.
20.2 Each party hereby acknowledges that it has not entered into this
Agreement in reliance upon any representation made by the other party but
not embodied herein.
20.3 This Agreement may not be modified or altered except by a written
instrument executed by both parties.
21. Variation
No variation of this Agreement shall be binding on either party unless
such variation is incorporated in a revised Schedule to this Agreement
and signed by the duly authorized representatives of both parties.
22. Notices
Any notice required to be given hereunder shall be given by sending the
same
(a) by air courier to the addresses as first set out above or to any
subsequent address designated by either party for the purpose of
receiving notices pursuant to this Agreement, and any notice so
sent shall be deemed to have been given three(3) business days
after the same was mailed; or
23. Action
No action, regardless of form, arising out of this Agreement shall be
brought by Client or Company more than two (2) years after such cause of
action shall have accrued.
<PAGE>
24. General Terms
24.1 Except with respect to a default described under Section 16 or to claims
arising from an infringement of the Software System, in the event a
dispute arises concerning the terms of this Agreement, the aggrieved
party, may at its sole option, refer such dispute to arbitration as
specified herein. Such arbitration shall be held in the City or suburbs
of Philadelphia, Pennsylvania, in accordance with the rules of the
American Arbitration Association pertaining to the Resolution of Computer
Disputes ("AAA Rules") then in effect. Judgment upon the award rendered
by the arbitrators may be entered in any court having jurisdiction over
the parties. The arbitrators shall have the authority to grant any legal
remedies that would be available in any judicial proceeding instituted to
resolve a disputed matter.
24.2 The prevailing party in an action brought against the other to enforce
the terms of this Agreement or any rights or obligations hereunder, shall
be entitled to receive its reasonable costs and expenses of bringing such
action including its reasonable attorneys fees.
24.3 Company and Client agree that each provision in Agreement is deemed
equally essential to each party.
24.4 The section headings used herein are inserted only as a matter of
convenience and for reference and shall not affect the construction or
interpretation of this Agreement.
24.5 If any provision of this Agreement is held to be unenforceable, the other
provisions shall nevertheless continue in full force and effect.
24.6 The failure of either parties to insist upon strict performance of any of
the provisions of this Agreement shall not be construed as the waiver of
any subsequent default of a similar nature.
IN WITNESS whereof this Agreement has been executed as of the Effective
Date set forth on Page 1 by the following duly authorized representatives:
For and on behalf of Client By:
Name:
Title
For and on behalf of Company By:
Name Raju M. Shivdasani
Title President, CBS Division
-----------------------
<PAGE>
11
THE FINANCIAL DATA SERVICES COMPANY
Index of Schedules, Exhibits, Addenda and Other Documents Pursuant to Section 11
of this Agreement, the following Schedules, Exhibits, Addenda and Other
Documents are included in this Agreement:
Schedule 1 - License Fee/Professional Services/Maintenance Services Pricing and
Payment
Exhibit A to Schedule 1 - Documentation Request Form
Schedule 2 - Third Party Hardware and Operating System Software
Exhibit A to Schedule 2 - Systems Engineering Support
Schedule 3 - Business Requirements
Exhibit A to Schedule 3 - Modifications to be provided prior to Conversion
Exhibit B to Schedule 3 - Modifications to be provided on or before a mutually
agreed upon date
Schedule 4- Preliminary Project Plan
Exhibit A to Schedule 4 - Generic Project Plan
Addendum No. 1 - Agreement Modifications
Addendum No. 2 - FIserv Fusion Deconversion Considerations
Addendum No. 3 - Vendor Questionnaire
Addendum No. 4 - Proposal
Addendum No. 5 - Corporate Guarantee
Addendum No. 6 - Confidentiality Agreement
Addendum No. 7 - Correspondence
12
Initials
THE FINANCIAL DATA SERVICES COMPANY
<PAGE>
License and Service Agreement No. 3810145
SCHEDULE 1
Company: Flserv CIR, Inc.
Client: Bryn Mawr Bank Corporation
License Section
A. Software System Subsystems:
1. The following Subsystems of the Software System:
Transaction Subsystem
Time Subsystem
Loan Subsystem
General Ledger Subsystem
Customer Information File Subsystem
Common File Subsystem
Financial Transaction Management Subsystems
ACH Origination Subsystem
FHLMC/FNMA Packaging Subsystem
CBS PS/2 Teller Subsystem
Card Management/Transaction Authorization & EPS Interface Subsystem
Safe Deposit Box Subsystem
Account Reconciliation Subsystem
Platform Interface Subsystem (inclusive of Culverin Message Level Interface)
Call Reporter Interface Subsystem
Sendero Interface Subsystem
CCAS Collections Interface Subsystem
OKRA MCIF Interface Subsystem
InterVoice Interface Subsystem
Cash Management Subsystem
B. Processing Location: 330 East Lancaster Avenue
Wayne, PA 19087
Archive Site: 801 Lancaster Avenue
Bryn Mawr, PA 19010
Other Location: Disaster Recovery Site to be Determined
C. Total License Fee
Modules License Fee $380,000
<PAGE>
An incremental License Fee will be paid after the 100,000 account threshold is
reached of $25,000 for each 25,000 accounts up to a total of 175,000 accounts,
and $75,000 for each 75,000 accounts thereafter to a maximum of $1,225,000 after
which no additional License Fee would be due.
D.License Fee Payment Timetable
The Amount Payable is due according to the following timetable:
<TABLE>
<CAPTION>
Event Amount Payable
<S> <C>
Upon Contract Execution $126,667
Upon Completion and Client Acceptance of Data
Verification Phase $126,667
Upon Client Acceptance of Conversion $126,667
Professional Services Section
A. Installation and Conversion Fee $101,575
</TABLE>
<TABLE>
<CAPTION>
Event Amount Payable
<S> <C>
Upon Contract Execution $ 33,858
Upon Completion and,Client Acceptance of Data
Verification Phase $ 33,858
Upon Client Acceptance of Conversion $ 33,858
</TABLE>
14
<PAGE>
Initials
B. Modifications/Interfaces
The following modifications are to be provided to Client prior to conversion
for the fees stated:
<TABLE>
<S> <C>
1.Line of Credit Rate Change Backdating No Charge*
2.Payment Factors for Credit Lines No Charge*
3.Unapplied Payment Bucket No Charge*
4.Construction Loans $ 31,500
5.Backroom Systems Software Interface No Charge
6.Overdraft Processing - "Tiered Pricing' No Charge*
7.Currency Transaction Reporting Interface $ 10,500
8.Bank Card Limits No Charge*
9.Telephone Banking:
- Future Date Transfers Between Accounts $ 23,000
- Give a Per Diem Figure on Loan Payoffs $ 14,500
- Date Driven Transaction History $ 16,500
- Whisper No Charge*
10. W-8's No Charge*
11. Safe Deposit Box Numbers $ 6,500
Total $103,500
</TABLE>
<TABLE>
<CAPTION>
Event Amount Payable
<S> <C>
Upon Contract Execution $ 34,500
Upon Completion and Client Acceptance of
System Detail Specifications $ 34,500
Upon Client Acceptance of Modification(s) $ 34,500
</TABLE>
The following modifications are to be provided to Client on or before a mutually
agreed upon date for the fees stated:
<TABLE>
<S> <C>
1.Overpayment of Loan Payoff $ 18,500
2.HUMDA Software Interface 3,500
3.Account Analysis Statement Regeneration No Charge*
4.Checks Stop/Hold Display No Charge*
5.Bill Paying No Charge*
6.Duplicate Social Security Number $ 5,500
7.Member Banker Identifier $ 27,500
8.Fastcloser Interface No Charge*
Total $ 55,000
Grand Total $158,500
</TABLE>
<TABLE>
<CAPTION>
Event Amount Payable
<S> <C>
Upon Contract Execution $ 18,334
Upon Completion and Client Acceptance of
System Detail Specifications $ 18,333
Upon Client Acceptance of Modification(s) $ 18,333
</TABLE>
* Indicates these modifications are incorporated as part of the Software System
as defined in this Agreement.
15
<PAGE>
Initials
C. Training $l8,750
Company agrees to provide Client training services as follows:
a) Orlando-Based Pre-Conversion Training - Based on approximately fifteen
(15) class days within our pre-conversion training curriculum, the package
will allow for Client to receive seventy-five (75) student days of Orlando-
based pre-conversion training. This approach would enable Client, in
conjunction with the Company's Project Manager and Training Manager, to
determine the right number of skill sets of the personnel to attend the
individual classes.
b) Supplemental Pre-Conversion On-Site Training - The training package
includes a provision for Client's internal pre-conversion training to be
supplemented by up to ten (10) days of on-site training conducted by members
of the Company's Training Institute. The actual content and scheduling of
this training would be mutually agreed to by members of Client's project
team, the Company's Project Manager and Training Manager.
c) On-Going Release Training - Company offers release training associated
with the approximately two (2) software system releases performed on an
annual basis. This initial training package allows for Client's personnel to
attend the 1996 release training in Orlando. This provision would include
allowing Client to attend up to twenty (20) student days of Orlando-based
release training in 1996.
d) Advanced Training - The Company's Training Institute periodically offers
training in advanced utilization of various features of the Software System.
The training package includes a provision for Client's personnel to attend
up to fifteen (15) student days of Orlando-based advanced training in 1996.
<TABLE>
<CAPTION>
Event Amount Payable
<S> <C>
Upon Contract Execution $6,250
Upon Completion and Client Acceptance of Data
Verification Phase $6,250
Upon Client Acceptance of Conversion $6,250
</TABLE>
D. Professional Services
<TABLE>
<S> <C> <C> <C>
User Analyst $ 750 Project Manager - $1,000
Customer Service Rep $ 750 Systems Programmer $1,000
Training Instructor $1,000 Senior Manager $2,000
Installation Programmer $ 750 Contract Programmer $ 500
Application Programmer $ 750
</TABLE>
NOTE: A. Rates assume an eight (8) hour man day.
B. Customer is responsible for reasonable travel and living expenses
if services are provided on-site.
16
Initials
<PAGE>
E. Special Professional Services Provision
Company agrees to provide Client with up to thirty-five (35) days of
programming support for modifications which may be uncovered during the
conversion process and mutually agreed to by both Company and Client in
writing and are expressly to be used for activities associated with moving
Client's products, services and processing onto the Software System and
Exhibit A and Exhibit B to Schedule 3 modifications at Conversion. Days
remaining, after Client acceptance testing and sign-off for both the
Conversion and Exhibit B Modifications are released by Client and cease to
be a responsibility of Company.
Maintenance Services Section
A. Maintenance Services
Modules
Transaction Subsystem
Time Subsystem
Loan Subsystem
General Ledger Subsystem
Customer Information File Subsystem
Common File Subsystem
Financial Transaction Management Subsystem
ACH Origination Subsystem
FHLMC/FNMA Packaging Subsystem
CBS PS/2 Teller Subsystem
Card Management/Transaction Authorization & EPS Interface Subsystem Safe
Deposit Box
Subsystem
Account Reconciliation Subsystem
Platform Interface Subsystem (inclusive of Culverin Message Level Interface)
Call Reporter Interface Subsystem Sendero Interface Subsystem
CCAS Collections Interface Subsystem
OKRA MCIF Interface Subsystem
InterVoice Interface Subsystem
Cash Management Subsystem
Basic Maintenance Fee: $3,416 per month
Modification/Interface Maintenance Fee: $650 per month
Total Maintenance Fees: $4,066 per month
* In the event any of the modifications identified in this Schedule 1, for
which Client is being charged, at the time become part of the Software
System, the Modification/Interface Maintenance Fees will be reduced on a
pro-rata basis, i.e. the price actually paid by the Client for the
Modification will be multiplied by twelve percent (12%). This will result in
an annual fee calculation for the specific Modification being considered.
This number would then be divided by twelve (12) and the corresponding
amount subsequently deducted from the monthly Modification/Interface
Maintenance Fee.
17
Initials
<PAGE>
B. Maintenance Fee Payment Timetable
An incremental monthly Maintenance Fee will be paid after the 100,000
account threshold is reached of $375 for each 25,000 accounts up to a total
of 175,000 accounts, and $1,125 will be paid for each 75,000 accounts
processed thereafter to a total of 1,000,000 accounts above which no
additional incremental Maintenance Fees would be due.
C. Third Party Products
Client is licensing the following products for which separate License and
Service Agreements must be executed prior to delivery. The fees and payment
for these Third Party Products are in addition to those identified for the
Software System.
<TABLE>
<CAPTION>
One-Time Fees Monthly Support
Fees
<S> <C> <C>
Regulatory Assistance Center - CTR $18,000 $300*
</TABLE>
* The Monthly Support Fee begins in the second year of the License
Agreement.
18
Initials
<PAGE>
Exhibit A to Schedule 1
Flserv/CBS Documentation Request complete Documentation Set
Transaction Subsystem
New CBS Customer Set [$3,020]
(Does nor include complementary Product Guides of Internal Guides)
Collateral Subsystem
Collateral Subsystem Processing Guide [$90] #CP01
Customer Information File Subsystem
CIF Subsystem Processing Guide (2 Vols.) [$180] #CU01
Financial Transaction Management Subsystem
FTM Subsystem User Guide [$90] #FT0I
FM Subsystem Reports Guide [$901 #FT02
FM Subsystem DP Guide ($90] #FT03
FM Common File Processing Guide [$901 #FT04
General Ledger Subsystem
GL Subsystem User Guide (3 Vols.) [$270] #GL01
GL Subsystem Reports Guide [$90] #GL02
GL Subsystem DP Guide [$90] #GL03
Loan Subsystem
Loan Subsystem User Guide (4 Vols.) [$360] #LN01
Loan Subsystem Reports Guide (2 Vols.) [ $180] #LN02
Loan Subsystem DP Guide [$90] #LA03
Loan Common File Processing Guide ($90) #LA04
Security Subsystem
Security Subsystem Processing Guide [$90] #SC0I
Time Subsystem
Time Subsystem User Guide (2 Vols.) [$180] #TM01
Time Subsystem Reports Guide [$90] #TM02
Time Subsystem DP Guide [$90] #TM03
Time Common File Processing Guide [$90] #TM04
Transaction Subsystem
User Guide (2 Vols) [$180] #TA01
Transaction Subsystem Reports Guide [$90] #TA02
Transaction Subsystem DP Guide ($90] #TA03
Transaction Common File Processing Guide ($90] #TA04
Other
CBS System Operator Guide [$90] #SO0l
Year-End Processing Procedures Guide [$90] #YE01
Write in:
Complementary Products
Account Reconciliation Processing Guide [$90] #RC0l
ACH Origination Processing Guide ($90] #AC01
Audio Response Processing Guide [$90] #AU0I
Safe Deposit Box Processing Guide [$90] #SD01
Host Teller System Processing Guide (2 Vols) [$1801 #TL01
PS/2 Teller System Processing Guide [$90] #CT0I
Cash Management Host Processing Guide [$90] CC01
Voice Response Processing Guide [$90] #VR01
CBS Interfaces Processing Guide Binder [$10] #CB01
CRISP Interface Guide [$30] #AP01
DLRS Interface Guide [$30] #DL01
Sendero Asset/Liability Interface Guide [$30] #AL01
Support Net Interface Guide [$301 #AR01
Laser Pro Interface Guide [$301 #LP01
Deposit Pro Interface Guide [$30] #DP01
OKRA Marketing Info Interface Guide ($30] MI01
BCAS Delinquent Loans Interface Guide [$30] #CA01
ALE Delinquent Loans Interface Guide [$30] #CS0I
Call Reporting Interface Guide [$30] #CR01
Platform Loan Interface Guide [$30] #PL01
Internal Guides
CBS Technical Standards Guide [$70] #CB03
Shipping Information Ship via: UPS
2nd Day Air Airbonre DHL
Requested by (please print) Date (Bank Name)
Special instructions: (Attention)
Please call ADMIN NAME at 294-5### if you have any questions (Address)
concerning this order. Thank you.
(City, State, Zip)
internal Use Only
Authorized by: 0 Order Date:
By: 0
oc is for: Customer Sent for examination purposes only Internal
Ship Date: By:
Bill to: Customer
Dept. (cost center) Shipment ID Nbr:
CSDF0026
Page 1 of 1
<PAGE>
September 31, 1994
THE FINANCIAL DATA SERVICES COMPANY
License and Service Agreement No. 3810145
SCHEDULE 2 Third Party Hardware and
Operating System Software
Company: Flserv CIR, Inc.
Client: Bryn Mawr Bank
Corporation
AS/400 Model F35 to Model 310/2043 Upgrade Configuration 128MB Main Storage with
20.6GB (10.3GB) Disk Storage Mirrored System Bus Level Disk Storage Protection
Utilizes Raid-5 Disk Storage Protection
<TABLE>
<CAPTION>
<C> <S> <C>
Qty
1 IBM 9406-310'Lic' System Unit $98,500
1 IBM 3104 64MB Main Storage 30,400
1 IBM 3100 16MB Main Storage (REMOVE) -4,320
1 IBM 2619 16/4 BPS Token-Ring/HP 3,375
1 IBM 5043 Conv Prim Rack to Sec Rack 1,000
20 IBM 6652 Additional Disk Unit (1.03GB) 38,000
1 IBM 5052 16 Disk Unit Storage Expanion 5,000
1 IBM 5062 System Unit Exptwr (Optical) 13,500
1 IBM 5143 Bulk 40OW Power Supply 3,900
1 IBM 551 8 Dhk Unit Storage Expansion 2,700
1 IBM 6502 Disk Unit Cntrlrfor Raid 25,800
1 IBM 3935-001 'Lic' Adv Function Printer 38,995
Total Hardware $256,850
Operating System Software Upgrade Charges (User Based/Version 3)
----------------------------------------------------------------
IBM 5733-128 Appl Dsgn & Development $ 190
IBM 5733-127 Facilities St Implementation 215
IBM 5733-206 PLSS Admin Ctrl 459
IBM 5755-AS3 System Program Order 35
IBM 5763-SS1 Operating System /400
(0-200+ Users) 8,960
IBM 5763-XAl Clnt Acc/400 Family (0-125+ Users) 5,000
IBM 5763-PWl App Dev Toolset/400 3,750
IBM 5763-CM1 Comm Utilities/400 4,630
IBM 5763-QU1 Query/400 (0-25+ Users) 1,875
IBM 5763-RG1 ILE RPG/400 3,600
IBM 5763-PT1 Performance Tools/400 7,200
Total Operating System Software $ 35,914
Total Hardware/Operating Software $292,764
Customer Discount (15%) -43,915
248,849
<CAPTION>
Event Amount Payable
<S> <C>
Upon Order of Equipment (20%) $ 49,770
Upon Delivery (80%) $199,079
</TABLE>
19
Initials
<PAGE>
THE FINANCIAL DATA SERVICE COMPANY
License and Service Agreement No. 3810145
-------
SCHEDULE 2.1 Third Party Hardware and Operating
System Software
Company: Flserv CIR, Inc.
Client: Bryn Mawr Bank Corporation
AS/400 Advanced System Model 200 Processor Feature #2031
32MB Main Storage with 4.lGB Disk Storage
User Based: SS1 (0-5)
BMTPAOO7/00142
<TABLE>
<CAPTION>
Qty Description Price
<C> <S> <C>
1 IBM 9402-200 'Lic' System Unit $37,560
Hardware Total $37,560
Operating Software
IBM 5763-SS1 Operating System/400 (0-5 Users) $ 2,100
IBM 5763-PWl App Dev Toolset/400 2,500
IBM 5763-RG1 ILE RPG/400 2,000
Operating Software Total $ 6,600
Total Hardware/Operating Software $44,160
Less: Customer Discount (15%) -6,624
$37,536
</TABLE>
<TABLE>
<CAPTION>
Event Amount Payable
----- --------------
<S> <C>
Upon Order of equipment $7,507
Upon Delivery (80%) $30,029
-------------- -------
</TABLE>
20
Initials
<PAGE>
Exhibit A to Schedule 2
---------------------
Systems Engineering Support
---------------------------
In consideration for purchasing the IBM AS/400 computer system and
peripherals from Company, Company will provide the following systems
engineering services at no additional charge other than reasonable travel
and living expenses associated with Company personnel performing work at the
Client's location.
I. Project Scope and Definition
o Requirements
o Schedule
o Ancillary Vendor Selection
o Resource Identification
II. Physical Site Planning
o Facility Consultation
o Electrical Requirements Consultation
o Air Conditioning Requirement Consultation 9 Fire Protection
Consultation
o Physical Security Analysis Consultation
o Equipment Layout Consultation
III. Hardware Installation and Set-Up
o Assist IBM and Client in installation of all equipment
o Implementation of ECS link
IV. System Software Installation
o Initial System Software Load
o Coordinated Release of applicable IBM updates and PTF's
<PAGE>
V. System Configuration and Tuning
o Subsystem Configuration Consultation
o Local Device Configuration Consultation
o Remote Device Configuration Consultation
VI. System Security and Profiles
o User Profile Analysis Consultation
o User Profile Log Consultation
o User Profile Set-Up Consultation
o System Security Set-Up Consultation
vii. Backup and Recovery o Analysis of procedures
viii. Disaster Recovery
o Hardware and facility analysis o Disaster test assistance
2
FIserv
THE FINANCIAL DATA SERVICES COMPANY
License and Service Agreement No. 3810145
SCHEDULE 3 Business Requirements
(To Be Agreed Upon Findings of the Audit.
This should include each party's
responsibilities and a formal Operations
sign-off procedure.)
<PAGE>
Company: FIserv CIR, Inc.
Client: Bryn Mawr Bank Corporation
Attached as Exhibit A to this Schedule 3 are the Functional Requirements
associated with Client specific modifications to the Software System which are
to be delivered prior to conversion.
Attached as Exhibit B to this Schedule 3 are the Functional Requirements
associated with Client specific modifications to the Software System which are
to be delivered on or before the dates specified.
21
Initials
<PAGE>
THE Financial DATA SERVICES COMPANY
Exhibit A to Schedule 3
-----------------------
The following modifications are to be provided to Client prior to conversion:
1. Line of Credit Rate Change Backdating
2. Payment Factors for Credit Lines
-----
3. Unapplied Payment Bucket
4. Construction Loans
<PAGE>
5. Backroom Systems Software Interface
6. Overdraft Processing - "Tiered Pricing"
7. Currency Transaction Reporting Interface
8. Bank Card Limits
9. Telephone Banking:
- Future Date Transfers Between Accounts
- Give a Per Diem Figure on Loan Payoffs
- Date Driven Transaction History
- Whisper
10. W-8's
11. Safe Deposit Box Numbers
22
Initials
Exhibit A to Schedule 3
-----------------------
Business Requirement
Project Name: Line of Credit Rate Change Backdating
-------------- --------------------------------
Bank Name: Bryn Mawr Trust
Prepared by: Lawrence Rorstrom
Date Prepared: November 7,1994
---------------
1 Overview
<PAGE>
Business Description
---------
Add new variable rate capabilities to support method used on Home Equity
and Personal Line of Credit accounts. These products provide for a variable
interest rate that is determined upon the day an index rate change takes
place. On the day an index rate change takes place, the new interest rate
is determined by adding a margin to the lowest index rate entered on the
index associated with the account during the billing cycle. If the index
rate increased during the billing cycle, the new interest rate becomes
effective on the first day of the next billing cycle, and no adjustment in
accruals is necessary. However, if the index rate decreased during the
billing cycle, the new interest rate is effective on the first day of the
billing cycle in which the rate decreased, and accruals will be adjusted
accordingly on the day the rate change takes place. Minimum and Maximum
interest rates also apply to these accounts.
Process Overview
----------------
This modification requires the following changes to variable rate
processing. First, provide the capability of reading index rate history and
determining the lowest index rate in effect during an account's billing
cycle. Second, provide the capability of accurately backdating interest
rate changes across loan activity.
Constraints
This new variable rate method applies to Line of Credit products only
(known as Check Credit on the CBS system). It will not be available on
other product lines.
1
2. Changes to Current CBS Processing Controls
2.1 Changes to Current Control Options (Bank Parameters/Profile)
No changes required
2.2 Product Definition (Product Types)
Modify the Product Definition routines to accept a now Rate Change Period
associated with Interest Guarantee Code 6 accounts (Rate Changes with
Activity).
2.3 Codes/Misc. (Code Definition and Miscellaneous changes not previously
defined)
No changes required.
<PAGE>
Proprietary Information
September 15, 1994 Page 1 of 6 Document Name:
Revised: December 9,1994
Business Requirement
Project Name: Line of Credit Rate Change Backdating
---------------------------------------------------
2.4 Common File Reporting No changes required.
3. Changes to Application
3.1 Account Opening (New Account Function)
Modify the Add New Loan function to accept a new Rate Change Period
associated with Interest. Guarantee Code 6 accounts (Rate Changes with
Activity).
3.2 Non Financial Maintenance
Modify the Rate/Payment/Term Change function to accept a new Rate Change
Period associated with Interest Guarantee Code 6 accounts (Rate Changes
with Activity).
3.3 Transaction Processing (Financial Transactions, Adjustments, etc..)
Modify the rate change transaction to accurately recalculate interest due
when a rate change is backdated across balance changes.
3.4 Maturity Functions (Special process at maturity including
Renewals/Extensions)
No changes required.
3.5 Interest Charge/Payment (changes to interest charged and/or payment
interest charged and/or payment changes)
No changes required.
3.6 Interest Accruals (Changes affecting accruals)
3.6.1 Interest accrual calculations will be modified to accurately recalculate
interest due when a rate change is backdated across balance changes.
3.6.2 Variable rate processing will be modified to compute new interest rates
and process rate changes as described in the process overview section.
3.7 Regulatory Reporting (Government Reporting/Compliance)
<PAGE>
No changes required.
3.8 Management Reporting
No changes required.
3.9 Exception Reporting (Error Reporting)
No changes required.
Business Requirement
Project Name: Line of Credit Rate Change Backdating
---------------------------------------------------
3.10 Daily Reporting (Balancing Reports, Posting Reports, etc...
No changes required.
3.11 Special Forms (Notices/Statements)
Check Credit statements will be modified to accurately disclose rate change
activity and Finance Charge Calculation Information.
3.12 Inquiry
No changes required.
3.13 General Ledger Interface (Application interface to G/L)
No changes required.
3.14 Other subsystem interfaces (including Complementary Products)
No changes required.
4.0 Changes to Overnight/Sequential Update (PCOMBDAILY, GLPOST, etc.)
No changes required.
<PAGE>
PQCF002.DOT Proprietary Information Document Name:
BRLN004.DOC
September 15,1994 Page 3 of 6
Revised: December 9,1994
Business Requirement
Project Name: Line of Credit Rate Change Backdating
---------------------------------------------------
5.0 This Section Intentionally Left Blank
PQCF002.DOT Proprietary Information Document Name:
BRLN004.DOC
September 15,1994 Page 4 of 6 Revised: December 9,1994
Business Requirement
Project Name: Line of Credit Rate Change Backdating
---------------------------------------------------
6. Sign Offs
6.1 Business Requirement: Line of Credit Rate Change Backdating
----------------------------------
In signing this Business Requirement document, client is authorizing Fiserv to
complete the modification as described and accepts financial responsibility for
all work performed on this task in accordance with terms of contract.
Signed for and on behalf of Fiserv by:
Name:
Title:
<PAGE>
Date:
Signed for and on behalf of client by:
Name:
Title:
Date:
PQCF002.DOT Proprietary Information Document Name:
BRLN004.DOC
September 15,1994 Page 5 of 6 Revised:
December 9,1994
Business Requirement Project Name: Line of Credit Rate Change Backdating
---------------------------------------------------
7.0 Amendment History
Amendment Date Comments
--------------
November 7,1994 Original Draft
December 8,1994 Revised to describe when new interest rates are
calculated. Added additional information to the Interest Accrual and Special
Forms section. Sections revised: 1, 3.6, 3.11.
PQCF002.DOT Proprietary Information Document Name:
BRLN004.DOC
September 15,1994 Page 6 of 6 Revised:
December 9,1994
Exhibit A to Schedule 3
-----------------------
Business Requirement
Project Name: Payment Factors for Credit Line
---------------------------------------------
<PAGE>
Bank Name: Bryn Mawr Trust
Prepared by: Lawrence Rorstrom
Date Prepared: November 7, 1994
1. Overview
Business Description
Provide the ability bill and collect loan payments based upon a payment
factor.
Process Overview
----------------
Currently, two tables of
payment factors are
utilized. One for Home
Equity Credit
calculating the monthly
payment amounts. The
monthly payment is
determined for some
personal
and home equity products
by multiplying the
outstanding principal
balance at the time the
bill is
produced by a factor,
which corresponds to the
current interest rate on
the account, " accrued
interest and insurance.
Other personal and home
equity products have the
payment determined by
multiplying the
outstanding principal
balance at the time the
bill is produced times a
factor to
determine the total
payment due. Which
includes accrued
interest and insurance.
For all products,
the payment calculation is
always rounded up to the
nearest whole dollar
amount. For example, if
$43.01 is calculated, the
payment amount billed is
$44.00. Lines, the other for
Personal Credit Lines.
Additionally, two
methods are utilized in
<TABLE>
<CAPTION>
Example: Interest Rate In Effect Corresponding Payment
Factor
<S> <C> <C>
Less than 10.00% .0160
10.00 - 11.50 .0173
11.51 - 13.00 .0185
13.01 - 14.50 .0198
14.51 - 16.00 .0210
</TABLE>
If the outstanding loan
balance is $2,500.00, and
current interest rate is
10.50%, then the
calculated payment amount
will be $44.00, plus
accrued interest and
insurance for some
products. For other
products, the calculated
payment amount will be
$44.00,
accrued interest and
insurance. If the
amount calculated
payment amount
minimum payment for the
product, the minimum
payment amount will
including
falls below the
be billed.
Constraints
In order to implement this modification, an existing CBS payment type will be
utilized. Unique product type(s) will be established for these loans to reside
in. This will identity them as requiring the special payment calculations
described.
2. Changes to Current CBS Processing Controls
<PAGE>
2.1 Changes to Current Control Options (Bank Parameters/Profile) No changes
required.
PQCF002.DOT Proprietary Information Document Name:
BRLN002.DOC
September 15, 1994 Page 1 of 6 Revised:
December 8,1994
Business Requirement
Project Name: Payment Factors for Credit Line
---------------------------------------------
2.2 Product Definition (Product Types)
Provide a common it file table of interest rate ranges and associated payment
factors.
2.3 Codes/Misc. (Code Definition and Miscellaneous changes not previously
defined) No changes required.
2.4 Common File Reporting
Include Payment Factor Table on maintenance reports.
3. Changes to Application
3.1 Account Opening (New Account Function)
No changes required.
3.2 Non Financial Maintenance
No changes required.
3.3 Transaction Processing (Financial Transactions, Adjustments, etc...
Payment processing: Modify payment processing to accept and distribute factored
payments correctly.
3.4 Maturity Functions (Special process at maturity including
Renewals/Extensions)
No changes required.
3.5 Interest Charge/Payment (changes to interest charged and/or payment amount
changes)
Modify payment billing to compute the correct payment amount and principal and
interest distribution.
<PAGE>
3.6 Interest Accruals (Changes affecting accruals)
No changes required.
3.7 Regulatory Reporting (Government Reporting/Compliance) No changes
required.
3.8 Management Reporting
No changes required.
3.9 Exception Reporting (Error Reporting)
No changes required.
PQCF002.DOT Proprietary Information Document Name:
BRLN002.DOC
September 15, 1994 Page 2 of 6 Revised:
December 8,1994
Business Requirement
Project Name: Payment Factors for Credit Line
---------------------------------------------
<PAGE>
3.10 Daily Reporting (Balancing Reports, Posting Reports, etc...
No changes required.
3.11 Special Forms (Notices/Statements)
No changes required.
3.12 Inquiry
No changes required.
3.13 General Ledger Interface (Application interface to G/L)
No changes required.
3.14 Other subsystem interfaces (Including Complementary Products)
No changes required.
4.0 Changes to Overnight/Sequential Update (PCOMBDAILY, GLPOST, etc.) No
changes required.
<PAGE>
PQCF002.DOT Proprietary Information Document
Name: BRLN002.DOC
September 15, 1994 Page 3 of 6
Revised: December 8,1994
Business Requirement
Project Name: Payment Factors for Credit Line
---------------------------------------------
5.0 This Section Intentionally Left Blank
<TABLE>
<CAPTION>
PQCF002.DOT Proprietary Information Document Name: BRLN002.DOC
September 15, 1994 Page 4 of 6 Revised: December 8,1994
<S> <C> <C>
Business Requirement
Project Name: Payment
Factors for Credit Line
---------------------------
6. Sign Offs
6.1 Business Requirement: Payment Factors for
Credit Line
--------------------------
</TABLE>
In signing this Business Requirement document, client is authorizing Fiserv to
complete the modification as described and accepts financial responsibility for
all work performed on this task in accordance with terms of contract.
Signed for and on behalf of Fiserv by:
Name:
Title:
Date:
Signed for and on behalf of client by,
Name:
Title:
Date:
PQCF002.DOT Proprietary Information Document Name: BRLN002.DOC
September 15, 1994 Page 5 of 6 Revised:
December 8,1994
<PAGE>
Business Requirement
Project Name: Payment Factors for Credit Line
7.0 Amendment History
Amendment Date Comments
-------------- --------
November 7, 1 994 Original Draft
December 8,1994 Revision #M - Changed details of how payments are calculated.
Amended example, redefined constraints to be more specific. Sections revised: 1
PQCF002.DOT Proprietary Information Document Name: BRLN002.DOC
September 15, 1994 Page 6 of 6 Revised:
December 8,1994
Exhibit A to Schedule 3
---------------------
Business Requirement
Project Name: Unapplied Payment Buckets
---------------------------------------
Bank Name: Bryn Mawr Trust
Prepared by: Lawrence Rorstrom
Date Prepared: November 7, 1994
-------------------------
1 Overview
Business Description
--------------------
Provide the ability to enter and track unapplied funds. Unapplied funds are
credited when a borrower's payment is not sufficient to fully satisfy a payment
due, or when a borrower makes a payment in excess of the payment due.
Process Overview
----------------
When short payments are received, unapplied funds will be credited instead of
applying a partial payment to a billing. Unapplied funds are tracked in a
separate balance field and
recorded in a unique General Ledger account. When balance in unapplied funds is
sufficient to make full payment, the system will automatically withdraw funds
from unapplied funds and credit the oldest billed payment. This process will
occur during the over night/sequential update. Two new transactions are
required for debiting and crediting unapplied funds. These transactions will be
available as on-line transactions and batch posted transactions. Unapplied
payment buckets will be available on all products, and specified in the
distribution string, if it is to be employed.
Constraints
<PAGE>
Not applicable.
2. Changes to Current CBS Processing Controls
2.1 Changes to Current Control Options (Bank Parameters/Profile) No changes
required.
<TABLE>
<CAPTION>
<S> <C> <C>
2.2 Product Definition (Product Types) Add Product
Definition. General Ledger Interface Account
Number to
2.3 Codes/Misc. (Code Definition and changes
required. Miscellaneous changes not previously
defined) No
2.4 Common File Reporting Add new common Definition
Listing. file fields to Maintenance report and
Product
</TABLE>
PQCF002.DOT Proprietary Information Document Name:
BRLN003.DOC
September 15,1994 Page 1 of 6
Revised: December 8,1994
Business Requirement
Project Name: Unapplied Payment Buckets
---------------------------------------
3. Changes to Application
3.1 Account Opening (New Account Function)
No changes required.
3.2 Non Financial Maintenance
No changes required.
3.3 Transaction Processing (Financial Transactions, Adjustments, etc..)
Two new transactions are required for debiting and crediting unapplied funds.
These transactions will be available as on-line transactions and batch posted
transactions.
The payment posting routines will be modified to automatically apply short
payments to unapplied funds instead of billed payments.
3.4 Maturity Functions (Special process at maturity including
Renewals/Extensions)
No changes required.
3.5 Interest Charge/Payment (changes to interest charged and/or payment amount
changes)
No changes required.
<PAGE>
3.6 Interest Accruals (Changes affecting accruals)
No changes required.
3.7 Regulatory Reporting (Government Reporting/Compliance)
No changes required.
3.8 Management Reporting Unapplied funds will be added to the following
management reports:
Loan Register and Customer Liability Report.
Delinquent Loan Report.
3.9 Exception Reporting (Error Reporting)
No changes required.
3.10 Daily Reporting (Balancing Reports, Posting Reports, etc...
Unapplied funds will be added to the following daily reports:
Loan Posting Journal
Loan Posting Recap
Loan Recap
PQCF002.DOT Proprietary Information Document Name:
BRLN003.DOC
September 15,1994 Page 2 of 6
Revised: December 8,1994
Business Requirement
Project Name: Unapplied Payment Buckets
---------------------------------------
3.11 Special Forms (Notices/Statements)
Loan Statements will be modified to report unapplied funds activity.
3.12 Inquiry
Loan Inquiry will be modified to display the balance in unapplied funds and
include the balance in all displays of payoff amount.
Loan Payoff inquiry will be modified to include unapplied funds on the display
screen and in the payoff calculation.
3.13 General Ledger Interface (Application interface to G/L)
The Loan interface to General Ledger will be modified to include activity on
unapplied funds.
<PAGE>
3.14 Other subsystem interfaces (including Complementary Products)
No changes required.
4.0 Changes to Overnight/Sequential Update (PCOMBDAILY, GLPOST, etc.)
Pcombdaily will be modified to process payments from unapplied funds. Each run,
following batch loan posting, accounts with a balance in unapplied funds will be
interrogated to determine if sufficient funds are available to apply a full
payment to the oldest payment billing. If sufficient funds are available, a
regular payment will be posted to the account and the balance in unapplied funds
will be reduced by the payment amount applied. If sufficient funds are not
available, the account will be bypassed. Two new .reports will be generated.
One report will list all accounts that had payments posted. The other will list
all accounts with a balance in unapplied funds.
PQCF002.DOT Proprietary Information Document Name:
BRLN003.DOC
September 15,1994 Page 3 of 6
Revised: December 8,1994
Business Requirement
Project Name: Unapplied Payment Buckets
---------------------------------------
5.0 This Section Intentionally Left Blank
<TABLE>
<CAPTION>
PQCF002.DOT Proprietary Information Document Name: BRLN003.DOC
September 15,1994 Page 4 of 6 Revised: December 8,1994
<S> <C> <C>
Business Requirement
Project Name: Unapplied
Payment Buckets
---------------------------
6. Sign Offs
6.1 Business Requirement: Unapplied Payment Buckets
--------------------------
</TABLE>
In signing this Business Requirement document, client is authorizing Flserv to
complete the modification as described and accepts financial responsibility for
all work performed on this task in accordance with terms of contract.
Signed for and on behalf of Fiserv by:
Name:
Title:
Date:
Signed for and on behalf of client by: .
Name:
Title:
Date:
PQCF002.DOT Proprietary Information Document Name: BRLN003.DOC
September 15,1994 Page 5 of 6 Revised: December
8,1994
Business Requirement
Project Name: Unapplied Payment Buckets
---------------------------------------
7.0 Amendment History
Amendment Date Comments
--------------
November 7,1994 Original Draft
December 8,1994 Revision #1 - Added comment concerning excess payments.
Specified that availability will be to all products. Sections revised: 1.
PQCF002.DOT Proprietary Information Document Name:
BRLN003.DOC
September 15,1994 Page 6 of 6
Revised: December 8,1994
<PAGE>
Exhibit A to Schedule 3
---------------------
Business Requirement
Project Name: Construction Loans
--------------------------
Bank Name: Bryn Mawr Trust
Prepared by: Lawrence Rorstrom
Date Prepared: November 7,1994
1. Overview
Business Description-n
----------------------
Provide the ability to track multiple construction loan commitments, having
multiple purposes, with one master note representing the total (gross)
commitment amount.
Process Overview
A new master note file will be created for grouping individual notes.
Individual notes (loan accounts) will be setup kw each construction loan unit.
Individual notes will act independently of each other, as any normal note would.
The master note records will contain balances which represent the aggregate of
all units. When a new unit needs to be funded, the user will setup a new note
and add the note number to the master note that it belongs to. The unit note
number will be edited for validity. Disbursements will be processed at the unit
level, same as normal CBS processing. When payments are made, they will be
credited at the unit level, same as normal CBS processing. Nightly updates will
aggregate unit balances and update the master note records with new balance
information.
A single, combined billing will be produced for all units on a loan master
record. The bill will detail each unit. Three new reports are required, as
follows: (1) A listing of all units by master note number; (2) a listing of all
stand-by letters of credit units; and (3) a listing of all loans with an
original term of greater than one year..
Constraints
-----------
1.) All disbursements, payments, and payoffs will be processed at the unit
level.
2.) All units attached to a loan master record must have the same payment due
date and billing lead days so that a single, combined billing can be produced.
2. Changes to Current CBS Processing Controls
2.1 Changes to Current Control Options (Bank Parameters/Profile)
<PAGE>
No changes required.
2.2 Product Definition (Product Types)
No changes required.
2.3 Codes/Misc. (Code Definition and Miscellaneous changes not previously
defined)
No changes required.
Business Requirement
2.4 Common File Reporting No changes required.
3. Changes to Application
3.1 Account Opening (New Account Function)
No changes required.
3.2 Non Financial Maintenance
Maintain Master Loan Records (Work with Function)
Add the ability to add, change, delete, display Master Loan Records.
The user must be able to enter the following information about each Loan Master
Record.
Loan Master Number
Loan Master description.
Unit note number as it resides on CBS Loan System.
Unit Number - Number identifying the unit associated with the sub-commitment.
Unit Description - Character description of the unit.
Fields must be supplied for all necessary balance fields
The system will automatically aggregate balance fields at the unit level and
update the master record.
3.3 Transaction Processing (Financial Transactions, Adjustments, etc..)
No changes required.
3.4 Maturity Functions (Special process at maturity including
Renewals/Extensions)
No changes required.
<PAGE>
3.5 Interest Charge/Payment (changes to interest charged and/or payment amount
changes)
No changes required.
3.6 Interest Accruals (Changes affecting accruals)
No changes required.
Business Requirement
3.7 Regulatory Reporting (Government Reporting/Compliance)
No changes required.
3.8 Management Reporting
3.8.1 Provide a new report titled Unit Description Report with Balances. This
report will be available on request and include all loans with sub-commitments.
The following information will be listed: Unit Number, Unit Description, Purpose
Code, Commitment Amount, Amount Disbursed, Amount Repaid, Unit Balance, Amount
Available, Loan Account Number, Borrower's Short Name and Collateral Property
Address. This report will be sorted by loan account number and unit number.
Totals will be provided by account number and bank.
3.8.2 Provide a new report titled Stand-By Letters of Credit. This Report will
be available on request and include all sub-commitments identified with a
purpose code of stand-by letter of credit. The following information will be
listed: Loan Account Number, Borrower's Short Name, Unit Number, Commitment
Amount, Amount Disbursed and Amount Available. This report will be sorted by
loan account number and unit number. Totals will be provided for aggregate
bank.
3.8.3 Provide a new report titled Loans with Original Term Greater than One
Year. This report will be available on request and include all loans, with sub-
commitments, that have an original term greater than one year. Original term is
defined as the time period from the origination date to the original maturity
date. Any sub-commitment coded as stand-by letter of credit or suspense
<PAGE>
funds with the purpose code is to be excluded from the report. The following
information will be listed: Loan Account Number, Borrower's Short Name,
Commitment Amount, Amount Disbursed, Amount Repaid, Amount Outstanding and
Amount Available. This report will be sorted by loan account number and unit
number Totals will be provided by account number and bank.
3.9 Exception Reporting (Error Reporting)
No changes required.
3.10 Daily Reporting (Balancing Reports, Posting Reports, etc...
No changes required.
3.11 Special Forms (Notices/Statements)
Provide a new notice, Construction Advance Request, which is at the sub-
commitment level. This notice will be available on request and is printed on a
preprinted form, at the local workstation printer. Notice includes primary
borrowers Name and Address, Loan Maturity Date, Loan Account Number, date notice
printed, Collateral Property Address, Unit Description, Amount Available for
Disbursement and Total Percentage Disbursed.
3.12 Inquiry
Provide a new inquiry function to allow users to lookup the master note an
account (unit) is related to.
Business Requirement
Project Name: Construction Loans
--------------------------------
3.13 General Ledger Interface (Application interface to G/L)
No changes required.
3.14 Other subsystem interfaces (including Complementary Products)
No changes required.
<PAGE>
4.0 Changes to Overnight/Sequential Update (PCOMBDAILY, GLPOST, etc.)
A new program will be written to aggregate various note balances which belong to
the same master note and update the master note.
.
Business Requirement
Project Name: Construction Loans
--------------------------------
5.0 This Section Intentionally Left Blank
Business Requirement
Project Name: Construction Loans
--------------------------------
6. Sign Offs
6.1 Business Requirement: Construction Loans
------------------
In signing this Business Requirement document, client is authorizing Fiserv to
complete the modification as described and accepts financial responsibility for
all work performed on this task in accordance with terms of contract.
Signed for and on behalf of Fiserv by:
<PAGE>
Name:
Title:
Date:
Signed for and on behalf of client by:
Name:
Date:
Title:
Business Requirement
Project Name: Construction Loans
7.0 Amendment History
Amendment Date Comments
November 7,1994 Original Draft
December 8,1994 Revised to add additional reporting requirements, purpose
code field, comment regarding additional history information, comments
indicating how amount available is calculated and where notices are printed.
All made minor revisions to addclarification. Sections revised: 1, 3.1, 3.3,
3.8, 3.11.
December 29,1994 Revise to change concept I modification. A new master
loan file will be created and sub-commitments will now be regular notes which
will be attached to a master loan. Sections revised: 1, 3.1, 3.2, 3.3, 3.12,
4.0.
January 5, 1995 Added comment about excluding "suspense funds" from
report. Section revised 3.8.3.
<PAGE>
Exhibit A to Schedule 3
---------------------
Business Requirement
Project Name: Backroom Systems Software Interface
-------------------------------------------------
Bank Name: Bryn Mawr Trust Company
Prepared by: Kent A. Holtzclaw
Date Prepared: November 3, 1994
1 Overview
Business Description
--------------------
Create an interface for both Return Item Control System (RIBS) and Automated
Proof Correction System (APCS). RIBS will access CBS for both customer and
account information. The Transaction created will memo post on CBS with batch
update via ACH file in nightly processing. APCS will access CBS for both
customer and account information. Adjustment transaction will be placed in a
BTE file for update in nightly processing. This is available fora all
transaction subsystem accounts (DDA and Savings).
Process Overview
When either package is accessed appropriate CIF and account level information
will be download to the software. Upon completion of input a file will be
created to upload to the AS/400 for processing. Within "System Operator"
functions of CBS options will be created to:
Memo Post RIBS file
Create and process ACH file for RIBS
Create BTE file for APCS
Nightly processing will monitor to determine if these files have been created
and return a message if they have not. The message will have an option to
continue processing or cancel the job. If the job is canceled the operator will
take the above options and restart the nightly processing.
Fees for DIR will pass to the Account Analysis counters if the account is on
Account Analysis, if not on analysis then post to the account.
<PAGE>
No maintenance can be done to either the account or CIF via RIBS or APCS, only
monetary activity.
2. Changes to Current.CBS Processing Controls
2.1 Changes to Current Control Options (Bank Parameters/Profile) No changes
required
2.2 Product Definition (Product Types)
No changes required.
Business Requirement
Project Name: Backroom Systems Software interface
2.3 Codes/Misc. (Code Definition and Miscellaneous changes not previously
defined)
No changes required.
2.4 Common File Reporting No changes required.
3. Changes to Application
3.1 Account Opening (New Account Function)
No changes required.
3.2 Non Financial Maintenance
No changes required.
3.3 Transaction Processing (Financial Transactions, Adjustments, etc..)
Files will be process in the existing behavior of CBS for memo post. ACH, and
BTE.
3.4 Maturity Functions (Special process at maturity including
Renewals/Extensions)
No changes required.
3.5 Interest Charge/Payment (changes to interest charged and/or payment amount
changes) No changes required.
3.6 Interest Accruals (Changes affecting accruals)
No changes required.
<PAGE>
3.7 Regulatory Reporting (Government Reporting/Compliance)
No changes required.
3.8 Management Reporting
No changes required.
3.9 Exception Reporting (Error Reporting)
No changes required.
3.10 Daily Reporting (Balancing Reports, Posting Reports, etc...
The existing ACH and BTE reports will be used.
Business Requirement
Project Name: Backroom Systems Software Interface
-------------------------------------------------
3.11 Special Forms (Notices/Statements)
RIBS and APCS generate and produce Return Item and correction notices and will
continue to do so. The CBS interface will provide the necessary data for these.
It is required that two separate notices be generated when a fee is involved for
non analysis accounts. One for the Rem, and one for the fee.
3.12 Inquiry
No changes required.
3.13 General Ledger Interface (Application interface to G/L)
No changes required.
3.14 Other subsystem interfaces (including Complementary Products)
No changes required.
4.0 Changes to Overnight/Sequential Update (PCOMBDAILY, GLPOST, etc.)
No changes required.
<PAGE>
5.0 This Section Intentionally Left Blank
Business Requirement
.Project Name: Backroom Systems Software Interface
--------------------------------------------------
6. Sign Offs
6.1 Business Requirement: Backroom SYSTEMS Software Interface
In signing this Business Requirement document, client is authorizing Fiserv to
complete the modification as described and accepts financial responsibility for
all work performed on this task in accordance with terms of contract.
Signed for and on behalf of Fiserv by:
---
Name: Gloria Brashears
Title: Mgr. Product Mgmt/Quality Control
Date: November 8,1994
Signed for and on behalf of client by:
Name:
Title:
Date:
Business Requirement
Project Name: Backroom Systems Software Interface
-------------------------------------------------
7.0 Amendment History
<PAGE>
Amendment Date Comments.
-------------- --------
Exhibit A to Schedule 3
-----------------------
Business Requirement
Project Name: Overdraft Processing - "Tiered Pricing"
-----------------------------------------------------
Bank Name: Bryn Mawr Trust Company
Prepared by: Gloria Brashears
Date Prepared: 10/25/94
1 Overview
Business Description
--------------------
Bryn Mawr Trust Company requires the option ta use tiered pricing for fee
assessments for NSF/OD items. These tiers are based on the number of checks
presented for which there are non-sufficient funds.
Bryn Mawr Trust also requires the ability to change or waive the system
calculated NSF fee using the on-line NSF/OD decision support function.
Process Overview
----------------
The bank level basic profile will be enhanced to include 5 tiers for charging
NSF fees. Each tier will represent the number of items presented and the per
check charge associated with that her.
The Officer Table will be expanded to designate by officer the authority to
change a system calculated NSF fee.
The On-line Decision support function will be modified to display the defaulted
fee amount (as determined from the tier) and allow the officer to change the fee
amount based on the designation in the Officer Table.
Constraints
-----------
Fees that are accessed in batch can not be overridden by an officer.
The minimum and maximum daily charge amounts at the Bank level will still
apply to fees assessed based on the tiers.
2. Changes to Current CBS Processing Controls
2.1 Changes to Current Control Options (Bank Parameters/Profile)
<PAGE>
The TA Basic Profile will be enhanced to include tiers for NSF/OD charges:
<TABLE>
<CAPTION>
Nbr items Fee
<S> <C> <C>
1 999 999 9999.99
2 999 999 9999.99
3 999 999 9999.99
4 999 999 9999.99
5 999 999 9999.99
</TABLE>
Business Requirement
Project Name: Overdraft Processing - "Tiered Pricing"
-----------------------------------------------------
For example: if the charge for the first item presented is $20.00, the charge
for items 2 through 10 is $10.00 and any item over 10 is $5.00, the tier would
be defined as follows:
<TABLE>
<CAPTION>
Nbr items Fee
<S> <C> <C>
1 001 001 20.00
2 002 010 10.0
3 010 999 5.00
4 999 999 9999.99
5 999 999 9999-99
</TABLE>
The Officer Table will be expanded to include an additional field - Allow
changes to NSF fees - Y or N. Base CBS provides a daily maximum charge for
NSF/OD, This can be used to meet the maximum Charge of $55.00.
2.2 Product Definition (Product Types)
No changes required.
2.3 Codes/Misc. (Code Definition and Miscellaneous changes not previously
defined)
No changes required.
2.4 Common File Reporting
The Common File Report for Basic Profile and the Officer Table will be enhanced
to include printing ofthe new
fields.
3. Changes to Application
3.1 Account Opening (New Account Function)
<PAGE>
No changes required.
3.2 Non Financial Maintenance
No changes required.
3.3 Transaction Processing (Financial Transactions, Adjustments, etc..)
No changes required.
3.4 Maturity Functions (Special process at maturity including
Renewals/Extensions)
No changes required.
3.5 Interest Charge/Payment (changes to interest charged and/or payment amount
changes) NSF processing will be modified to assess fees based on the new fee
tiers.
3.6 Interest Accruals (Changes affecting accruals)
Business Requirement
Project Name: Overdraft Processing - "Tiered Pricing"
-----------------------------------------------------
No changes required.
3.7 Regulatory Reporting (Government Reporting/Compliance)
No changes required.
3.8 Management Reporting
No changes required.
3.9 Exception Reporting (Error Reporting)
A report will be provided that shows any changes made to the system calculated
fee amount.
3.10 Daily Reporting (Balancing Reports, Posting Reports, etc...
No changes required.
3.11 Special Forms (Notices/Statements)
No changes required.
<PAGE>
3.12 Inquiry
No changes required.
3.13 General Ledger Interface (Application interface to G/L)
No changes required.
3.14 Other subsystem interfaces (including Complementary Products)
No changes required.
4.0 Changes to Overnight/Sequential Update (PCOMBDAILY, GLPOST, etc.)
No changes required.
5.0 This Section Intentionally Left Blank
Business Requirement
Project Name: Overdraft Processing - "Tiered Pricing"
-----------------------------------------------------
6. Sign Offs
6.1 Business Requirement: Overdraft Processing - "Tiered Pricing"
In signing this Business Requirement document, client is authorizing Fiserv to
complete the modification as described and accepts financial responsibility for
all work performed on this task in accordance with terms of contract.
Signed for and on behalf of Flserv by:
Name: Gloria Brashears
Title: Mgr. Product Mgmt./Quality Control
<PAGE>
Date: November 8, 1994
Signed for and on behalf of client by:
Name: Title:
Date:
Business Requirement
Project Name: Overdraft Processing - "Tiered Pricing"
-----------------------------------------------------
7.0 Amendment History
Amendment Date Comment
--------------
Business Requirement
Bank Name: Bryn Mawr Trust Company
Prepared by: Gloria Brashears
Date Prepared: November 1, 1994
1 Overview
Business Description
---------------------
Bryn Mawr Trust Company requires the capability to monitor, track and file Large
Currency
Transactions and Monetary Instruments in a more automated method than the CBS
system currently provides.
<PAGE>
Process,Overview
----------------
Although the (CBS systems supplies reporting to track Large Currency
Transactions that is in compliance with the regulations, the process to produce,
track and file 4789 forms is a manual effort For customers that have significant
activity in large cash transactions, CBS offers an interface to the Regulatory
Assistance Center to help automate this activity.
Fiserv provides an interface from the CBS PC teller system to the Regulatory
Assistance Center Branch Currency Control (BCC) system and a download of cash
transactions from nightly processing to the Cash Reporting Control (CRC)
product.
Each branch maintains a file of beneficiary and conductor information for Large
Currency Activity within the BCC system. Whenever a teller processes a cash
transaction over a user-defined limit, the CBS PS teller system will
automatically call the BCC system. Information such as dollar amount, type of
transaction, teller number and account number will default into the BCC screen
used to gather information for currency reporting. If the customer does not
exist within the BCC system, the BCC system will display the appropriate screens
to add that customer. The CBS PC teller system will also provide a function key
to allow the teller to access the BCC system at any time.
Information from the BCC system at each branch is transferred to a central
location at the end of the branch business day. These files can be transferred
using functions of a WAN, through PC support to the AS400, etc. Once the hills
am received in a central location, these files are merged into the CRC system.
During nightly processing, the CBS system will create a file containing all cash
transactions captured by the system. This file is then downloaded to the CRC
system for further processing.
Constraints
-----------
File transfers from the BCC system to the CRC system and the download of the
cash file from the CBS system to the CRC system are the responsibility of Bryn
Mawr Trust.
Reports, 4789 forms and magnetic filing media are produced by the Regulatory
Assistance Center.
Fiserv/CBS is not responsible for the conversion of any information from the
existing system used for Cash Transaction Reporting to the Regulatory Assistance
Center products.
Business Requirement
Project Currency Transaction Reporting Interface
-----------
<PAGE>
2. Changes to Current CBS Processing Controls
2.1 Changes to Current Control Options (Bank Parameters/Profile)
The CBS PC teller system includes options for large cash transaction amount and
monetary instrument amount. These amounts are maintained in the Institution
Options.
2.2 Product Definition (Product Types)
No changes required.
2.3 Codes/Misc. (Code Definition and Miscellaneous changes not previously
defined)
No changes required.
2.4 Common File Reporting
No changes required.
3. Changes to Application
3.1 Account Opening (New Account Function)
No changes required.
3.2 Non Financial Maintenance
A function key is available on the CBS PC teller system which is used to access
the RAC BCC system.
3.3 Transaction Processing (Financial Transactions, Adjustments, etc..)
If a transaction is processed with cash over the amount specified for Large
Currency Transactions in the Institution Options, the PC teller system will
automatically call the BCC system and default information from the teller
transaction screen will default into the appropriate fields on the BCC system.
It a monetary instrument (cashiers checks, etc) is processed using cash over the
amount for Monetary Instruments in the Institution Options, the PC teller system
will automatically call the BCC system and default information from the teller
system into the appropriate fields on the BCC system.
3.4 Maturity Functions (Special process at maturity including
Renewals/Extensions)
No changes required.
3.5 Interest Charge/Payment (changes to interest charged and/or payment amount
changes)
<PAGE>
No changes required.
3.6 Interest Accruals (Changes affecting accruals)
No changes required.
Business Requirement
Project Name: Currency Transaction Reporting Interface
------------------------------------------------------
3.7 Regulatory Reporting (Government Reporting/Compliance)
No changes required.
3.8 Management Reporting
No changes required.
3.9 Exception Reporting (Error Reporting)
No changes required.
3.10 Daily Reporting (Balancing Reports, Posting Reports, etc...
No changes required.
3.11 Special Forms (Notices/Statements)
No changes required.
3.12 Inquiry
No changes required.
3.13 General Ledger Interface (Application interface to G/L)
No changes required.
3.14 Other subsystem interfaces (including Complementary Products)
No changes required.
4.0 Changes to Overnight/Sequential Update (PCOMBDAILY, GLPOST, etc.)
<PAGE>
During nightly processing, a file containing all cash transactions captured by
the CBS system will be created for download to the CRC system. A layout of the
fields in this file is attached.
5.0 This Section Intentionally Left Blank
Business Requirement
Project Name: - Currency Transaction Reporting Interface
---------
6. Sign Offs
6.1 Business Requirement: Currency Transaction Reporting Interface
In signing this Business Requirement document, client is authorizing Fiserv to
complete the modification as described and accepts financial responsibility for
all work performed on this task in
accordance with terms of contract.
Signed for and on behalf of Fiserv by:
Name: Gloria Brashears
Title: Mgr. Product Mgmt/Quality Control
Date: Nov 8,1994
------
Signed for and on behalf of client by: - Name: -
Title:
Date:
<PAGE>
Business Requirement
Project Name: Currency Transaction Rep
---------------
7.0 Amendment History
Amendment Comment
---------
Exhibit A to Schedule 3
-----------------------
Business Requirement
Project Name: Bank Card Limits
------------------------------
Bank Name: Bryn Mawr Trust Company
Prepared by: Gloria Brashears
Date Prepared: 09/15/94
<PAGE>
1. Overview
Business Description
-----------
Bryn Mawr Trust Company requires the ability to set limits for ATM deposits and
withdrawal activity at the individual card level.
Process Overview
----------------
The CBS system currently maintains withdrawal and deposit limits within the VIP
class codes.
Individual cards are tied to a VIP class code with no option to override the
limit at the card level.
The CBS system will be enhanced to use the limits set at the VIP class code
as default values at the card level with the option to override any of these
limits for an individual card.
VIP class codes should be understood as a table which associates a card limit to
a specific VIP class code. These can still be used, however, the card limit may
be overridden at the account level.
Constraints
None
2. Changes to Current CBS Processing Controls
2.1 Changes to Current Control Options (Bank Parameters/Profile)
No changes required
2.2 Product Definition (Product Types)
No changes required.
2.3 Codes/Misc. (Code Definition and miscellaneous changes not previously
defined)
No changes required.
2.4 Common File Reporting No,changes required.
3. Changes to Application
3.1 Account Opening (New Account Function)
The Add Card Base General Information Screen will be enhanced to include the
following fields:
Business Requirement
Project Name: Bank Card Limits
------------------------------
<PAGE>
Max. ATM trans withdrawal limit
Max. ATM daily withdrawal limit
Max. POS trans withdrawal limit
Max. POS daily withdrawal limit
Max. deposit available
Max. deposit percentage available
Preferred deposit Max. available
Preferred deposit percentage available
Information in these fields will default from the VIP class code designated for
that card with the ability to change these fields on the Add Card Base General
Information Screen.
3.2 Non Financial Maintenance
The Change Card Base General Information Screen will be enhanced to include the
following fields:
Max. ATM trans withdrawal limit
Max. ATM daily withdrawal limit
Max. POS trans withdrawal limit
Max. POS daily withdrawal limit
Max. deposit available
Max. deposit percentage available
Preferred deposit Max. available
Preferred deposit percentage available
3.3 Transaction Processing (Financial Transactions, Adjustments, etc..)
ATM withdrawals and deposits and POS withdrawals will very the limits at the
card level.
3.4 Maturity Functions (Special process at maturity including
Renewals/Extensions)
No changes required.
3.5 Interest Charge/Payment (changes to interest charged and/or payment amount
changes) No changes required.
3.6 Interest Accruals (Changes affecting accruals)
No changes required.
3.7 Regulatory Reporting (Government Reporting/Compliance)
No changes required.
3.8 Management Reporting
<PAGE>
No changes required.
3.9 Exception Reporting (Error Reporting)
No changes required.
Business Requirement
Project Name: Bank Card Limits
------------------------------
3.10 Daily Reporting (Balancing Reports, Posting Reports, etc...
No changes required.
3.11 Special Forms (Notices/Statements)
No changes required.
3.12 Inquiry
The Display Card Base General Information screen will be enhanced to display the
following fields:
Max. ATM trans withdrawal limit
Max. ATM daily withdrawal limit
Max. POS trans withdrawal limit
Max. POS daily withdrawal limit
Max. deposit available
Max. deposit percentage available
Preferred deposit Max. available
Preferred deposit percentage available
3.13 General Ledger Interface (Application interface to G/L)
No changes required.
3.14 Other subsystem interfaces (including Complementary Products)
No changes required.
4.0 Changes to Overnight/Sequential Update (PCOMBDAILY, GLPOST, etc.) No
changes required.
5.0 This Section Intentionally Left Blank
<PAGE>
Business Requirement
Project Name: Bank Card Limits
------------------------------
6. Sign Offs
6.1 Business Requirement: Bank Card Limits
In signing this Business Requirement document, client is authorizing Fiserv to
complete the modification as described and accepts financial responsibility for
all work performed on this task in accordance with terms of contract.
Signed for and on behalf of Fiserv by:
Name: Gloria A Brashears
Title: Mgr. Product Mgmt./Quality Control
Date: November 8,1994
Signed for and on behalf of client by:
Name:
Title:
Date:
<PAGE>
Business Requirement
Project Name: Bank Card Limits
------------------------------
7.0 Amendment History
Amendment Date Comments
-------------- --------
Exhibit A to Schedule 3
Business Requirement
Project Name : Telephone Banking - Future Dated Transfers Between Accounts
Bank Name: Bryn Mawr
Prepared by: Kristen Backus
Date Prepared: November 3,1994
1 Overview
Business Description
--------------------
Bryn Mawr Bank requires the ability to future date account transfers through the
Audio Response system.
Process Overview
----------------
The Audio Response system currently allows the capability to transfer funds
between accounts at the time the transaction is requested. In order to allow
future dated transactions to occur the Audio Response system will need to work
in conjunction with the FM Transfer system.
<PAGE>
The Audio Response system will be modified to allow the user to define whether
they want to allow for future dating their transfers. If a transaction is
future dated it will need to be defined by a separate tran code in the Transfer
Tran Code Definition. The Create Transfer Tran Code function will be modified
to include a second screen to define the tran codes for future dated
transactions. This screen will only appear if the "Allow for Future Dated
Transfers" option is 'Y'. This second screen function will also need to be
added to 'Display Transfer Tran Code Definition'; Change Transfer Tran Code
Definition, and 'Delete Transfer Tran Code Definition'.
If the Audio Response system sees a date in the future it will transfer the
information to the FM transfer file and process the information on the date
requested. The transaction will memo post to the account and be deleted from
the transfer system the next day.
Future dated transactions will only be allowed to occur from DDA or savings
accounts.
The Audio Script will need to be expanded to include the messages that will
relate to the future dated transfers.
The Audio Transfer system will not allow for future dated transfers to occur
from a Loan account.
2. Changes to current CBS Processing Controls
2.1 Changes to Current Control Options (Bank Parameters/Profile)
Eight different Transfer types will need to be defined in the FTM Transfer Type.
From DDA to DD From SAV to DD
From DDA to SV From SAV to SV
From DDA to LN From SAV to LN
From DDA to IRA From SAV to IRA
Business Requirement
Project Name: Telephone Banking - Future Dated Transfers Between Accounts
-------------------------------------------------------------------------
2.2 Product Definition (Product Types)
No changes required.
<PAGE>
2.3 Codes/Misc. (Code Definition and Miscellaneous changes not previously
defined) No changes required.
2.4 Common File Reporting
No changes required.
3. Changes to Application
3.1 Account Opening (New Account Function)
No changes required.
3.2 Non Financial Maintenance
No changes required.
3.3 Transaction Processing (Financial Transactions, Adjustments, etc..)
The future dated transfers will go into the FTM system and memo post on the date
requested. If it is a non-processing date the system will post the transaction
based on the Non-Processing Day Flag as defined in the Model Transfer -Type.
The transaction will have an expiration date one day after the transfer is to
occur.
3.4 Maturity Functions (Special process at maturity including
Renewals/Extensions)
No changes required.
3.5 Interest Charge/Payment (changes to interest charged and/or payment amount
changes)
No changes required.
3.6 Interest Accruals (Changes affecting accruals)
No changes required.
3.7 Regulatory Reporting (Government Reporting/Compliance)
No changes required.
3.8 Management Reporting
No changes required.
<PAGE>
Business Requirement
Project Name: Telephone Banking - Future Dated Transfers Between Accounts
--------------------------------------------------------------------------
3.9 Exception Reporting (Error Reporting)
No changes required.
3.10 Daily Reporting (Balancing Reports, Posting Reports, etc.)
All Future dated transactions will appear on the transfer report when they
occur.
Any additions or changes to the FTM common file will be reported on the regular
FTM reports.
3.11 Special Forms (Notices/Statements)
No changes required.
3.12 Inquiry
No changes required.
3.13 General Ledger Interface (Application interface to G/L)
No changes required.
3.14 Other subsystem interfaces (including Complementary Products)
No changes required.
4.0 Changes to Overnight/Sequential Update (PCOMBDAILY, GLPOST, etc.)
No changes required.
Business Requirement
Project Name: Telephone Banking - Future Dated Transfers Between Accounts
-------------------------------------------------------------------------
5.0 This Section Intentionally Left Blank
<PAGE>
Business Requirement
Project name: Telephone Banking - Future Dated Transfers Between Accounts
-------------------------------------------------------------------------
6 Sign Offs
6.1 Business Requirement: Telephone Banking - Future Dated Transfers Between
Accounts
In signing this Business Requirement document, client is authorizing Flserv to
complete the modification as described and accepts financial
responsibility for ail work performed on this task in
accordance with terms of contract.
Signed for and on behalf of Fiserv by: Name: Gloria Brashears
Title: Mgr. Pro-duct Mgmt/Quality Control
Date: Date: November 7, 1994
----
Signed for and on behalf of client by:
Name:
Title: Date:
Business Requirement
Future Dated Transfers Between Accounts
--------------------------------
Project name: Telephone Banking - Future Dated Transfers Between Accounts 7.0
-------------------------------------------------------------------------
Amendment History
Amendment Date Comments
-------------- --------
<PAGE>
Exhibit A to Schedule 3
------------------------
Business Requirement
Project Name: Telephone Transfer - Per Diem Figure on Loan Payoffs
------------------------------------------------------------------
Bank Name: Bryn Mawr
Prepared by: Kristen Backus
Date Prepared: November 3,1994
Revision Date: December 8,1994
Overview
Business Description
Bryn Mawr requires the ability for their customers end dealers to call Audio
Response to verity loan payoff and per them payoff amounts.
Process Overview
----------------
The Audio Response currently enables merchants to verify checks drawn on the
bank. The ability to retrieve a loan payoff and the per them figure will occur
<PAGE>
in the same manner as the merchant verification. This feature will require the
dealer be assigned a merchant ID number. When the dealer would like a loan
payoff figure, the dealer can call the Voice Response system, enter his dealer
ID, enter the loan number, and the system will respond with the current payoff
amount as well as a per them figure.
The regular payoff option quoted to an individual customer will also include a
per them figure.
The Audio Script will need to be expanded to include the messages that will
relate to Per Diem Loan payoffs.
Constraints
2. Changes to current CBS Processing Controls
2.1 Changes to Current Control Options (Bank Parameters/Profile)
No changes required
2.2 Product Definition (Product Types)
<PAGE>
No changes required.
2.3 Codes/Misc. (Code Definition and Miscellaneous changes not previously
defined No changes required.
2.4 Common File Reporting
No changes required.
Business Requirement
Project Name: Telephone Transfer - Per Diem Figure on Loan Payoffs
------------------------------------------------------------------
3. Changes to Application
3.1 Account Opening (New Account Function)
No changes required.
3.2 Non Financial Maintenance
No changes required.
3.3 Transaction Processing (Financial Transactions, Adjustments, etc..)
No changes required.
3.4 Maturity Functions (Special process at maturity including
Renewals/Extensions)
No changes required.
3.5 Interest Charge/Payment (changes to interest charged and/or payment
amount changes) No changes required.
3.6 Interest Accruals (Changes affecting accruals)
No changes required.
3.7 Regulatory Reporting (Government Reporting/Compliance)
No changes required.
3.8 Management Reporting
No changes required.
<PAGE>
3.9 Exception Reporting (Error Reporting)
No changes required.
3.10 Daily Reporting (Balancing Reports, Posting Reports, etc...
No changes required.
3.11 Special Forms (Notices/Statements)
No changes required.
3.12 Inquiry
No changes required.
3.13 General Ledger Interface (Application interface to G/L)
Business Requirement
Project Name: Telephone Transfer - Per Diem Figure on Loan Payoffs
------------------------------------------------------------------
No changes required.
3.14 Other subsystem interfaces (including Complementary Products)
No changes required.
4.0 Changes to Overnight/Sequential Update (PCOMBDAILY, GLPOST, etc.) No
changes required.
Business Requirement
Project Name: Telephone Transfer - Per Diem Figure on Loan Payoffs
------------------------------------------------------------------
5.0 This Section Intentionally Left Blank
<PAGE>
Business Requirement
Project Name: Telephone Transfer - Per Diem Figure on Loan Payoffs
------------------------------------------------------------------
6. Sign Offs
6.1 Business Requirement: Telephone Transfer - Per Diem Figure on Loan Payoffs
In signing this Business Requirement document, client is authorizing Flserv to
complete the modification as described and accepts financial responsibility for
all work performed on this task in accordance with terms of contract.
Signed for and on behalf of Fiserv by:
Name: Gloria Brashears
Title: Mgr. Product Mgmt/Quality Control
Date: November 7,1994
Signed for and on behalf of client by:
Name:
Title:
Date:
Business Requirement
Project Name: Telephone Transfer - Per Diem Figure on Loan Payoffs
------------------------------------------------------------------
7.0 Amendment History
Amendment Date Comments
-------------- --------
<PAGE>
Exhibit A to Schedule 3
----- ---
Business Requirement
Project Name: Telephone Banking - Date Driven Transaction History
-----------------------------------------------------------------
Bank Name: Bryn Mawr
Prepared by: Kristen Backus
Date Prepared: November 3,1994
Revised : November 21, 1994
1. Overview
Business Description
--------------------
Bryn Mawr requires the ability to access, through Audio Response, transaction
history by a specific date or by a date range.
Process Overview
----------------
The Audio Response system offers customers numerous options to get information
from their checking and savings accounts. Bryn Mawr will also offer the ability
to get transaction history for a specific ate
or date range.
A new script message will need to be included asking for a start date. This
will allow the customer to enter a date and be presented with 5 transactions
from that date. They will then be allowed to continue the search or exit from
the option. If the search is continued 5 more options will appear and this
process will continue until the customers elects to exit. The system will only
provide information as far back as on line viewing information can provide. The
transactions will be returned in the order they appear in the history, with the
oldest date returned first.
The system will only provide transaction history as far back as on-line viewing
allows. This is defined by the bank in the common file level.
2. Changes to Current CBS Processing Controls
2.1 Changes to Current Control Options (Bank Parameters/Profile)
No changes required
<PAGE>
2.2 Product Definition (Product Types)
No changes required.
2.3 Codes/Misc. (Code Definition and Miscellaneous changes not previously
defined)
No changes required.
2.4 Common File Reporting
No changes required.
Business Requirement
Project Name: Telephone Banking - Date Driven Transaction History
-----------------------------------------------------------------
3. Changes to Application
3.1 Account Opening (New Account Function)
No changes required.
3.2 Non Financial Maintenance
No changes required.
3.3 Transaction Processing (Financial Transactions, Adjustments, etc..)
No changes required.
3.4 Maturity Functions (Special process at maturity including
Renewals/Extensions)
No changes required.
3.5 Interest Charge/Payment (changes to interest charged and/or payment amount
changes) No changes required.
3.6 Interest Accruals (Changes affecting accruals)
No changes required.
3.7 Regulatory Reporting (Government Reporting/Compliance)
<PAGE>
No changes required.
3.8 Management Reporting
No changes required.
3.9 Exception Reporting (Error Reporting)
No changes required.
3.10 Daily Reporting (Balancing Reports, Posting Reports, etc...
No changes required.
3.11 Special Forms (Notices/Statements)
No changes required.
3.12 Inquiry
No changes required.
3.13 General Ledger Interface (Application interface to G/L)
Business Requirement
Project Name: Telephone Banking - Date Driven Transaction History
-----------------------------------------------------------------
No changes required.
3.14 Other subsystem interfaces (Including Complementary Products)
No changes required.
4.0 Changes to Overnight/Sequential Update (PCOMBDAILY, GLPOST, etc.) No
changes required.
<PAGE>
Business Requirement
Project Name: Telephone Banking - Date Driven Transaction History
-----------------------------------------------------------------
5.0 This Section Intentionally Left Blank
Business Requirement
project Name, Telephone Banking - Date Driven Transaction History
---------------------------------------------------
6. Sign Offs
6.1 Business Requirement: Telephone Banking - Date Driven Transaction History
In signing this Business Requirement document, client is authorizing Fiserv to
complete the modification as described and accepts financial responsibility for
all work performed on this task in
accordance with terms of contract.
Signed for and on behalf of Fiserv by:
Name: Gloria Brashears
Title: Mgr. Product Mgmt/Quality Control
Date:
Signed for and on behalf of client by:
Name:
Title:
Date:
<PAGE>
Business Requirement
project Name: Telephone Banking - Date Driven Transaction History Ban
-------------------------------------------------------
7.0 Amendment History
Amendment Date Comments
-------------- --------
Exhibit A, to Schedule 3
----------- ----------
Business Requirement
Project Name: Telephone Banking - Whisper
-----------------------------------------
Bank Name: Bryn Mawr
Prepared by: Kristen Backus
Date Prepared: November 3,1994
1. Overview
Business Description
--------------------
Bryn Mawr requires the ability for the Audio Response System to whisper a
customer account number into the ear of the customer service representative.
Process Overview
------
The whisper feature will be incorporated into Voice Response by Intervoice.
<PAGE>
Constraints
-----------
Enter any restrictions or limitations associated with the project.
2. Changes to Current CBS Processing Controls
2.1 Changes to Current Control Options (Bank Parameters/Profile)
No changes required
2.2 Product Definition (Product Types)
No changes required.
2.3 Codes/Misc. (Code Definition and Miscellaneous changes not previously
defined) No changes required.
2.4 Common File Reporting
No changes required.
3. Changes to Application
3.1 Account Opening (New Account Function)
No changes required.
3.2 Non Financial Maintenance
No changes required.
3.3 Transaction Processing (Financial Transactions, Adjustments, etc..)
Business Requirement
Project Name: Telephone Banking - Whisper
-----------------------------------------
No changes required.
3.4 Maturity Function (Special process at maturity, including
Renewal/Extensions)
No changes required.
<PAGE>
3.5 Interest Charge/Payment (changes to interest charged and/or payment amount
changes) No changes required.
3.6 Interest Accruals (Changes affecting accruals)
No changes required.
3.7 Regulatory Reporting (Government Reporting/Compliance)
No changes required.
3.8 Management Reporting
No changes required.
3.9 Exception Reporting (Error Reporting)
No changes required.
3.10 Daily Reporting (Balancing Reports, Posting Reports, etc...)
No changes required.
3.11 Special Forms (Notices/Statements)
No changes required.
3.12 Inquiry
No changes required.
3.13 General Ledger Interface (Application interface to G/L)
No changes required.
3.14 Other subsystem interfaces (including Complementary Products)
No changes required.
4.0 Changes to Overnight/Sequential Update (PCOMBDAILY, GLPOST, et) No changes
required.
<PAGE>
Business Requirement
Project Name: Telephone Banking - Whisper
-----------------------------------------
5.0 This Section Intentionally Left Blank
Business Requirement
Project Name: Telephone Banking - Whisper
-----------------------------------------
6. Sign Offs
6.1 Business Requirement: Telephone Banking - Whisper
In signing this Business Requirement document, client is authorizing Fiserv to
complete the modification as described and accepts financial responsibility for
all work performed on this task in accordance with terms of contract.
Signed for and on behalf of Fiserv by:
Name: Gloria Brashears
Title: Mgr. Product Mgmt/Quality Control
Date: November 7, 1994
----
Signed for and on behalf of client by:
Name:
Title:
Date:
<PAGE>
Business Requirement
Project Name: Telephone Banking - Whisper
-----------------------------------------
7.0 Amendment History
Amendment Date Comments
-------------- --------
Business Requirement
Project Name: W-8's
-------------------
Bank Name: Bryn Mawr
Prepared by: Kristen Backus
Date Prepared: November 2,1994
Revised: November 21, 1994
1 Overview
Business Description
--------------------
Bryn Mawr requires the ability, to automatically produce W-8 notices for their
foreign customers and generate reports
Process Overview
----------------
The request for the W-8 Edit Report will generate an extract file of Foreign
status customers whose TIN active date is greater than three years from the
current processing date. The system will use the extract file to generate W-8
forms. In creating the extract and reports, the system will use the TAX
<PAGE>
ID flag and the TIN activity date. The date the CIF key is opened will
automatically update the TIN activity date.
To be able to identify when a W-8 has been received from a customer a new field
will be added to the CIF static data area that will allow for input of the value
"R". When an "R" is input to this field it will automatically update the TIN
activity date to the current processing date. The number of W-8's sent to a
customer will be tracked in the 'Nbr of W-9's-8's" field.
The Tax ID flag must be 'F in order for the customer to be considered foreign
status.
2. Changes to Current CBS Processing Controls
2.1 Changes to Current Control Options (Bank Parameters/Profile)
The following new options need to be added:
System Operator Functions : Under Miscellaneous CBS add the option "W-8 edit
report" and "Print W-8 forms".
Under CIF maintenance change the field "Nbr of W-9s" to "Nbr of W-9s - 8s".
2.2 Product Definition (Product Types)
No changes required.
2.3 Codes/Misc. (Code Definition and Miscellaneous changes not previously
defined)
No changes required.
Business Requirement
Project Name: W-8's
-------------------
2.4 Common File Reporting No changes required.
3. Changes to Application
3.1 Account Opening (New Account Function)
No changes required.
3.2 Non Financial Maintenance
<PAGE>
A new field will need to be added to CIF Static Data maintenance to allow for
the update of the value of "R" if a W-8 is returned from the customer. When the
"R" is input the system will automatically update the TIN active date to the
current processing date.
3.3 Transaction Processing (Financial Transactions, Adjustments, etc..)
When the W-8 edit report is selected the system will look for all customer with
a TAX ID flag of 'F' and a TIN Active greater than three years old.
3.4 Maturity Functions (Special process at maturity including
Renewals/Extensions)
No changes required.
3.5 Interest Charge/Payment (changes to interest charged and/or payment amount
changes)
No changes required.
3.6 Interest Accruals (Changes affecting accruals)
No changes required.
3.7 Regulatory Reporting (Government Reporting/Compliance)
No changes required.
3.8 Management Reporting
No changes required.
3.9 Exception Reporting (Error Reporting)
A new W-8 edit report will be generated to list all customers who have a foreign
status flag of 'F and a TIN activity date greater than three years from the
processing date.
3.10 Daily Reporting (Balancing Reports, Posting Reports, etc...
No changes required.
Business Requirement
Project Name: W-8's
-------------------
<PAGE>
3.11 Special Forms (Notices/Statements)
A new W-8 form will be required to send to the customers. This form will have
to conform to IRS standards.
3.12 Inquiry
No changes required.
3.13 General Ledger Interface (Application interface to G/L)
No changes required.
3.14 Other subsystem interfaces (including Complementary Products)
No changes required.
4.0 Changes to Overnight/Sequential Update (PCOMBDAILY, GLPOST, etc.)
No changes required.
Business Requirement
Project Name: W-8's
-------------------
5.0 This Section Intentionally Left Blank
Business Requirement
Project Name: W-8's
-------------------
6. Sign Offs
<PAGE>
6.1 Business Requirement: W-8's
In signing this Business Requirement document, client is authorizing Flserv to
complete the modification as described and accepts financial responsibility for
all work performed on this task in accordance with terms of contract.
Signed for and on behalf of Fiserv by:
Name: Gloria Brashears
Title: Mgr. Product Mgmt/Quality Control
Date: November 7, 1994
Signed for and on behalf of client by:
Name:
Title:
Date:
Business Requirement
Project Name: W-8's
-------------------
7.0 Amendment History
<PAGE>
Amendment Date Comments
-------------- --------
Exhibit A to Schedule 3
---------------------
Business Requirement
Project Name: Safety Deposit Box User Defined Field
---------------------------------------------------
Bank Name: Bryn Mawr
Prepared by: Kristen Backus
Date Prepared: December 9, 1994
1. Overview
Business Description
--------------------
Bryn Mawr requires the ability to use a user defined field in Safe Deposit Box
to store the Alpha
Numeric Box number and have this number printed on all notices to the customer.
Process Overview
----------------
The Alpha numeric number defined in User field 1 will be added to an notices
generated from Safety
Deposit Box.
Constraints
The Alpha numeric number will have to be entered manually by the bank.
2. Changes to Current CBS Processing Controls
2.1 Changes to Current Control Options (Bank Parameters/Profile)
No changes required
2.2 Product Definition (Product Types)
<PAGE>
No changes required.
2.3 Codes/Misc. (Code Definition and Miscellaneous changes not previously
defined) No changes required.
2.4 Common File Reporting
No changes required.
3. Changes to Application
3.1 Account Opening (New Account Function)
No changes required.
3.2 Non Financial Maintenance
No changes required.
3.3 Transaction Processing (Financial Transactions, Adjustments, etc..)
Business Requirement
Project Name: Safety Deposit Box User Defined Field
---------------------------------------------------
No changes required.
3.4 Maturity Functions (Special process at maturity including
Renewals/Extensions)
No changes required.
3.5 Interest Charge/Payment (changes to interest charged and/or payment amount
changes)
No changes required.
3.6 Interest Accruals (Changes affecting accruals)
No changes required.
3.7 Regulatory Reporting (Government Reporting/Compliance)
No changes required.
3.8 Management Reporting
<PAGE>
No changes required.
3.9 Exception Reporting (Error Reporting)
No changes required.
3.10 Daily Reporting (Balancing Reports, Posting Reports, etc...
.No changes required.
3.11 Special Forms (Notices/Statements)
The alpha numeric number defined in User field I for Safety Deposit Box will be
printed on all notices to the customer.
3.12 Inquiry
No changes required.
3.13 General Ledger Interface (Application interface to G/L)
No changes required.
3.14 Other subsystem interfaces (including Complementary Products)
No changes required.
4.0 Changes to Overnight/Sequential Update (PCOMBDAILY, GLPOST, etc.) No
changes required.
Business Requirement
Project Name: Safety Deposit Box User Defined Field
---------------------------------------------------
5.0 This Section Intentionally Left Blank
<PAGE>
Business Requirement
project Name: Safety Deposit Box User Defined Field
-------------------------------------------
6. Sign Offs
6.1 Business Requirement: Safety Deposit Box User Defined Field
In signing this Business Requirement document, client is authorizing Flserv to
complete the modification as described and accepts financial responsibility for
all work performed on this task in accordance with terms of contract.
Signed for and on behalf of Fiserv by:
Name: Lawrence Rorstorm
Tile: Product Mgmt/Quality Control
Date: December 9,1994
Signed for and on behalf of client by:
Name:
Title:
Date:
Business Requirement
Project Name: Safety Deposit Box User Defined Field
---------------------------------------------------
7.0 Amendment History
Amendment Comments
--------- --------
Exhibit B to Schedule 3
---------------------
<PAGE>
The following Modifications are to be provided to Client on or before a mutually
agreed upon date:
1. Overpayment of Loan Payoff (on or before June 30, 1996)
2. HUMDA Software Interface (on or before June 30, 1996)
3. Account Analysis Statement Regeneration (on or before June 30 1996)
4. Checks Stop/Hold Display (on or before March 31,1996)
5. Bill Paying (on or before June 30, 1996)
6. Duplicate Social Security Number (on or before June 30, 1996)
7. Member Banker Identifier (on or before March 31, 1996)
8. Fastcloser Interface (on or before March 31, 1996)
Confidential US Comb 11/7/94 23
License and Service Agreement No. 3810145
-------
SCHEDULE Preliminary Project Plan
Company: Flserv CIR, Inc.
Client: Bryn Mawr Bank Corporation
Company and Client agree to develop a project plan which results in a completed
installation of the Software System on or before November 24, 1994. A
preliminary plan is attached as part of this Schedule 4.
Confidential US Comb 11/7/94 24
Initial s
Exhibit A to Schedule 4
-----------------------
FISERV, INC. GENERIC PROJECT PLAN
<PAGE>
GANTT CHART
Name
----
1 Planning Activities
2 CBS agreement finalized
3 Introduction Package
4 Initial Contact
5 Project Kickoff
6 Planning Meeting
7 Establish Bank Team
8 Assign Tasks & Dates
9 Hardware/Software Set-up
10 Confirm hardware ship date
11 Coordinate Hardware Install with IBM 12 Hardware Site Preparation
13 Install AS 400
14 Install initial profile and set-up
15 Ship CBS Documentation
16 Ship CBS System/Demo
17 Install CBS System/Demo
18 Network Implementation
19 Establish Network Design
20 Site Preparation
21 Hardware Order
22 Communication Line Order
23 Install Network
24 Test Network
25 Value Added Products
26 Collections
27 Item Processing
28 Optical
29 ATM
30 Secondary Market
31 Platform
32 Account Reconciliation
33 Accounting
34 MCIF (i e. OKRA)
35 ACH
36 Teller
37 Cash Management
38 Safe Deposit
39 Audio Response
--------------
40 Bank Specific Tasks
41 Training
42 Workflow/Balancing
43 Forms
<PAGE>
44 DAILYs
45 Manual Conversions
------
46 1-UP Statements
47 Account Checklist
48 Balancing Reports
49 System (CBS) Acceptance Test
50 Contract Mods
51 Mod1 Construction
52 Functional Specifications
53 Sign-off
54 Code/Test
55 Mod1 Implementation q
56 Install Mods
57 Reconvert with Mods
58 Beta Tests
59 Beta Test sign-off
60 Client Training Phase
61 Application Training
62 CIF/Deposit
Page 2
FISERV, INC. GENERIC PROJECT PLAN
GANTT CHART
63 CIF/Loan
64 G/L
65 CIF
66 System Operator Workshop
67 Training
68 Establish Daily Environment
69 Set Up Conversion Environment
70 Value Added Training
71 Common File/Audit
72 Pre-Workshop
73 Audit Completion
74 Chart of Accounts
75 Sample Forms
76 Current Tran Codes
77 Current Product List
78 Brochures
<PAGE>
79 Service Charge Routine
80 Interest Plans
81 Rate Shoots
82 Financial Statements
83 Sample Reports
84 Branches
85 Officers
86 Workshop
87 Audit Review
88 Common File Overview
89 Service Charge Walk-thru
90 Interest Plan Walk-thru
91 Profile Walk-thru
92 Product Definition Walk-thru
93 Define Translation Requirements
Page 3
FISERV, INC. GENERIC PROJECT PLAN
GANTT CHART
94 Post-Workshop
95 Finalize Common File
96 Define Bank Profile
97 Define Tran Profile
98 Define Time Profile
99 Define Loan Profile
100 Define G/ L Profile
101 Define Loan Products
102 Define Tran Products
103 Define Time Products
104 Define Service Charge Plans
105 Define Interest Plans
106 Define Officers
107 Define Cost Centers
108 Define Branches
109 Define G/L Lotus/Chart
110 Define G/L Lotus/Report
111 Define G/L Lotus/Teller
112 Finalize Translation
113 Loan Product Types
114 Tran Product Types
<PAGE>
115 Time Product Types
116 Officer Codes
117 Transaction Codes
118 Service Charge Type
119 Miscellaneous Codes
120 User-Defined Codes
121 Data Definition
122 Set Up Conversion Library
123 Inventory Data Files & Reports
124 Analyze, Define & Load Extract Files
Page 4
FISERV, INC. GENERIC PROJECT PLAN
GANTT CHART
125 Deliver File Specifications
126 Data Conversion Phase
127 CIF -Complete Data Mapping Specs
128 C IF - Code & Unit Test Conversion Programs
129 CIF - User Reviews
130 CIF - Joint Review/Sign off
131 TRAN-DDA - Complete Data Mapping Specs
132 TRAN-DDA- Code & Unit Test Conversion Program
133 TRAN-DDA - User Reviews
134 TRAN-SV - Complete Data Mapping Specs
135 TRAN-SV - Code & Unit Test Conversion Programs
136 TRAN-SV - User Reviews
137 TRAN - Application Test Runs (TRAN DAILY)
138 TRAN - Joint Review/Sign off
139 TIME-CD/IRA - Complete Data Mapping Specs
140 TIME-CD/IRA - Code & Unit Test Conversion Program
141 TIME-CD/IRA - User Reviews
142 TIME - Application Test Runs (TIME DAILY)
143 TIME - Joint Review/Sign off
144 LOANS-IL - Complete Data Mapping Specs
145 LOANS-IL- Code & Unit Test Conversion Program
146 LOANS-IL - User Reviews
147 LOANS-CL - Complete Data Mapping Spec
148 LOANS-CL - Code & Unit Test Conversion Program
149 LOANS-CL - User Reviews
150 LOANS-ML - Complete Data Mapping Specs
151 LOANS-ML - Code & Unit Test Conversion Program
152 LOANS-ML - User Review
153 LOANS-RL - Complete Data Mapping Spec
<PAGE>
154 LOANS-RL - Code & Unit Test Conversion Program
155 LOANS-RL - User Reviews
Page 5
FISERV, INC. GENERIC PROJECT PLAN
GANTT CHART
156 LOANS - Application Test Runs (LOAN DAILY)
157 LOANS Joint Review/Sign-off
158 GL - Prepare Data Mapping Spec
159 GL - Joint Review/Sign-off
160 GL - Complete Conversion Programming
161 GL - Conversion Application Test
162 GL - Joint Review/Sign off
163 Data Verification Readiness
164 Run Daily
165 Verify Statements/IRA, DDA, etc.
166 Verity Interest Plans
167 Verify Service Charge
168 Balance Sign-off
169 Cut Test Files
170 Ship Test Files
171 Load Test Files
172 Verity Test Environment
173 Develop Detail Conversion Plan
174 Data Acceptance Phase
175 Review Common File
176 Secure Common File Access
177 Begin Account Review
178 System-System Balance Sign-off Walk-thru
179 DAILY Run
180 CONVERSION 'GO LIVE'
181 Execute 'live' conversion
182 POST INSTALLATION ASSESSMENT
183 Questionnaire
184 On-Site Visit
185 ***Modifications have not been scheduled.Conversion
186 date may be impacted by modification activity. ***
Page 6
FISERV, INC. GENERIC PROJECT PLAN
<PAGE>
GANTT CHART
187 TELLER/PLATFORM implementation
188 Complete requirements/transaction set
189 Define network environment
190 Modification - construction
191 System test - mods
192 Review/sign-off
193 Stress test network
Page 7
Addendum No. 1
to
Comprehensive Banking System
License and Service Agreement
Between Bryn Mawr Bank Corporation ("Client") and FIserv CIR, Inc. ("Company").
Purpose
-------
Client and Company wish to amend Agreement No. with an Effective Date of
December 30, 1994 Notwithstanding anything in that Agreement to the contrary, in
---------
the event of a conflict between the event of the Agreement and this Addendum,
the provisions of this Addendum shall take precedence.
Section 3 - Professional Services
---------------------------------
The following new provision is added to Section 3 of this Agreement:
3.9 Within ninety (90) days of the Effective Date of this Agreement, Company
agrees to develop detailed Business Requirements for Client to describe those
modifications identified on Exhibit B to Schedule 3 of this Agreement. These
Business Requirements will detail specific functionality for each of the
proposed modification to be delivered on or before the dates specified on
Exhibit B to Schedule 3 of this Agreement. The pricing for those Modifications
identified on Exhibit B to Schedule 3 of this Agreement will not exceed the
prices outlined for me same on Schedule I of this Agreement.
Section 12 - Warranties
-----------------------
<PAGE>
Client and Company wish to amend Section 12 of this Agreement with the following
Additional Warranty Provisions. In the event of a conflict between these
Additional Warranty Provisions and Section 12 of the Agreement, these Additional
Warranty Provisions shall prevail.'
1 . System Performance Considerations
---------------------------------
Company warrants the Software System performance will meet or exceed me
following criteria:
(i) "End of Day" batch processing will not exceed two (2) hours for up to
100,000 Accounts.
initials
(ii) Average response time for remote devices will not exceed two (2) seconds.
Measurements will be taken by stopwatch from the time the enter key is depressed
until the terminal begins its response. Measurements will be taken no fewer
than eight times per month on or near the following designated times on each
measurement day: 10:30 a.m., 12:00 noon and 2:00 p.m.
The conditions under which these results can be duplicated by Client are as
follows:
A) Client's acquisition of the AS/400 configuration outlined on Schedule 2 of
His Agreement.
B) Operation of the Software System in accordance with the operating
instructions provided in the Documentation.
C) Company approved memory and machine configuration parameters.
D) Disk capacities are maintained under an eighty percent (80%) total disk
saturation level.
E) Batch jobs are not run concurrently in the same memory and machine pools
with interactive jobs.
F) Communication line speeds are not less than 56 KBPS.
G) The AS/400 is operated utilizing version V3R0.5 or equivalent operating
system and the test is conducted utilizing an unmodified
version of the Software Systems release 9401.
H) Account mix does not exceed seventy percent (70%) Transaction accounts.
"End of Day" processing is to be measured exclusive of time required for
statement processing, back-ups and report production.
In the event that the performance standards defined in the Agreement are not met
Client personnel will be obligated to follow the reasonable operational changes
or processing schedule changes recommended by Company personnel to achieve the
performance standards. If Company and Client conclude that the performance
standards can only be met with a more powerful Computer System, Company will
provide the Computer System to client at a discount of an additional 20%, off
of Company's cost of acquiring the same.
<PAGE>
2
The foregoing represents Company's sole obligation and Client's sole
remedy
for a failure of the Software System to meet the performance criteria outlined
above.
Section 19 - Non--Assignment
----------------------------
The following new provisions are added to Section 19 of this Agreement:
19.4 "Notwithstanding the above, in the event the Company is acquired and
Client refuses for whatever reason to consent to the assignment of this
Agreement, Client may, at its sole option, terminate this Agreement provided
Client has paid all amounts outstanding to the Company, has paid at least
twenty-four (24) months of the Maintenance Fees due in accordance with Section 4
of this Agreement and pays to the Company a one-time fee equivalent to twelve
(12) months of the then current Maintenance Fee in effect."
19.5 "The foregoing represents the Client's sole remedy in the event of an
election to deny assignment of this Agreement in the event the Company is
acquired."
Additional Provisions.
Company and Client agree that in no event will Client be responsible for
reimbursing to Company travel and living expenses incurred by Company exceeding
a total of $50,000 associated with Company's (i) Professional Services for
Conversion and Installation as described on the Project Plan in Exhibit A to
Schedule 4 of this Agreement, (ii) Training as described in Schedule 1,
Professional Services Section, Part C, Paragraph b), (iii) al Professional
Services as defined in Schedule 1, Professional Services Section, Part E, and
(iv) Systems Engineering Support responsibilities described in Exhibit A to
Schedule 2 under this Agreement.
For and on behalf of Client by:
Name:
Title:
For and on behalf of Company by:
Name: Title:
3
Initials
<PAGE>
v
THE FINANCIAL DATA SERVICES COMPANY
Addendum No. 2
to
Comprehensive Banking System
License and Service Agreement
Between Bryn Mawr Bank Corporation ("Client") and FIserv CIR, Inc. ("Company").
Purpose
-------
Client and Company wish to amend Agreement No. 3810145 with an Effective Date of
-------
December 30, 1994. Notwithstanding anything in that Agreement to the contrary,
-------------------
in the event of a conflict between the terms of the Agreement and this Addendum,
the provisions of this Addendum shall take precedence.
FIserv Fusion Deconversion Considerations
-----------------------------------------
The attached letter from Frank Martire, President, FIserv-Division III, is
attached to this
Addendum No. 2 as a representation of the Company's commitment relative to the
Client's
deconversion from the FIserv Fusion applications.
For and on behalf of Client By:
Name: Samuel C. Wasson, Jr.
Title: Secretary
For and on behalf of Company By:
Name: Raju M. Shivdasani
Title: President, CBS Division
<PAGE>
THE FINANCIAL DATA SERVICES COMPANY
December 12, 1994
Mr. Thomas M. Petro
Senior Vice President
The Bryn Mawr Trust Company
801 Lancaster Avenue
Bryn Mawr, PA 19010
Dear Mr. Petro:
On behalf of FIserv, I want to thank you for your decision to convert to the
Comprehensive Banking System. I am sure Raju Shivdasani and his staff will do
everything in their power to ensure your transition to the new system is
successful.
On the basis of your decision to convert from the FIserv Fusion application to
another FIserv solution, I want to state our commitment to the Bryn Mawr Trust
to negate the financial impact of the account processing fees associated with
the early termination of your existing agreement. This means that in the event
you convert to the CBS System prior to expiration of your FIserv Fusion
agreement, we will absorb any of these costs internally. Furthermore, we will
agree to absorb the costs associated with "de-conversion" from FIserv Fusion,
i.e. file cuts. It is my understanding these are currently estimated to be
approximately $39,000. In the event you receive invoices related to either of
these areas, please forward these to Robin Smith at the CBS Division for him to
resolve internally.
Finally, in the event your conversion is delayed beyond the expiration of your
current agreement, we will agree to continue to provide processing services for
the Bryn Mawr Trust on a month by month basis under the same terms and
conditions of your current agreement. These will be provided without penalty or
surcharge for as long as required.
Thank you again for your decision and if I can be of further assistance, please
feel free to call. We look forward to a long and mutually beneficial
relationship with the Bryn Mawr Trust Company.
Sincerely,
Frank Martire
President, Division III
FM:hjs
Corporate Headquarters: 255 FIserv Drive, Brookfield, WI 53045 414-879-5000
Mailing Address: PO. Box 979, Brookfield, WI 53008-0979
<PAGE>
THE FINANCIAL DATA SERVICES COMPANY
Addendum No. 3
to
Comprehensive Banking System
License and Service Agreement
Between Bryn Mawr Bank Corporation ("Client") and FIserv CIR, Inc. ("Company").
Purpose
-------
Client and Company wish to amend Agreement No. 3810145 with an Effective Date of
-------
December 30, 1994 . Notwithstanding anything in this Addendum to the contrary,
------------------
in the event of a conflict between the terms of the Agreement and this Addendum,
the provisions of the Agreement shall take precedence.
Vendor Questionnaire
--------------------
Attached to this Addendum No. 3 is the Company's response to the Client's Vendor
Questionnaire. Company warrants that its response to the Vendor Questionnaire,
as attached, is substantially accurate in all respects.
For and on behalf of Client By:
Name: SAMUEL C. WASSON, JR.
Title: SECRETARY
For and on behalf of Company By:
Name: Raju M. Shivdasani
Title: President, CBS Division
<PAGE>
FIserv/CBS
Response to The Bryn Mawr Trust Company
Vendor Questionnaire
Table of Contents
Section I Processing
Section II Total Quality Management Commitment
Section III Communications with Customers and Training
Section IV Customer Service
Section V Multi-Company Processing
<PAGE>
FIserv/CBS The Bryn Mawr Trust Company
Response to
Vendor Questionnaire
Section I
Processing
1. What is the average response time for inquiry and data entry?
Response time is affected by numerous variables such as the size of the IBM
AS/400, the number of on-line devices and type, the data communications
network design, line speed and modem speeds. Depending on the bank's
desired response time, FIserv can assist the bank in ensuring the
aforementioned variables are configured in order to ensure the desired
response time is attained. The majority of the in-house users are
experiencing average response times that range from sub-second to three
seconds.
2. What is your "up time" availability for host sessions?
The IBM AS/400 has a history of being an extremely reliable computer since
its release in June of 1988. The IBM AS/400's receipt of the "Malcom
Baldridge" quality award for reliability is a testimony of the AS/400's
performance standards. The AS/400's in our user base and within our CBS
headquarters have experienced 99%+ availability "up time" as measured for
user availability computing.
3. Describe the normal daily schedule for maintaining on-line sessions.
Indicate the hour (eastern time) that inquiry is available and the hour
(eastern time) that inquiry is taken down.
One of the many advantages of an in-house system is that the bank can
literally establish the on-line availability hours for the entire
organization. The only time when on-line access is not available will be
during the evening update of the bank's files. FIserv's recommended AS/400
for the bank will allow for an update of approximately two (2) hours.
Therefore, on-line access can be available for twenty-two (22) hours each
work day and twenty-four (24) hours on Saturday and Sunday. The bank can
choose when to initiate the update, thus having full control of the time
when inquiry is available bank-wide.
<PAGE>
FIserv/CBS The Bryn Mawr Trust Company
Response to
Vendor Questionnaire
4. What time are reports available in client print queues to beginning daily
report production?
Reports are available immediately after the evening update is concluded.
5. Describe availability of reports "on-line" for viewing and manipulating
information from any PC. What reports are not available for on-line viewing
at a PC?
All of the standard and ad-hoc CBS reports can be displayed on a PC once
they have been created into a "print queue". Access to these reports can be
achieved by either of the following two methods: 1) Normal report viewing
can be done on a 132 character display or can be done on displays with less
than 132 character capability via menu option selections and command key
scrolling.
2) Optical disk archival systems support indefinite storage of all CBS
reports and can be displayed upon user initiated requests at any time.
The CBS data files are externally defined for data access and manipulation
through the use of PC Support and Query IBM utilities and can be accessed at
any time with proper security and sign-on clearance.
6. Describe your track record with meeting posting time-frames. How many times
in the most recent 12 month period have posting reporting deadlines been
missed? How are these communicated to clients?
Posting time-frames are under complete control of our in-house system
clients.
7. Attach the most recent internal control report on inquiry "up-time", posting
schedules met/missed, and report availability time.
These reports and statistics are maintained by our clients.
8 Describe your provision for disaster-recovery. Where are your back-up data
centers located? Are disaster-recovery plans submitted to a "live" test? How
frequently?
In house disaster recovery will be provided by IBM in their disaster
recovery
<PAGE>
facility in Valley Forge, PA. As a provision of your annual in-house data
processing audit, the bank will test the disaster recovery center once a
year (minimum). The contingency test will support live data processing
functions such as on-line access functions and update processing.
L2
<PAGE>
Flserv/CBS The Bryn Mawr Trust Company
Responseto
Vendor Questionnaire
9. Describe accommodations /alternatives available if the system is not "on-
line" or report/posting is late or delayed.
If the system is not on-line, the CBS teller system will allow the tellers
to continue posting off-line in a "store and forward" operation. Automatic
transaction update will occur immediately when on-line availability occurs.
Application Sub-System trial balances will be used to calculate payoffs in
an offline mode.
Evening update can be delayed until the system becomes available or until
the disaster recovery center is activated at the option of the bank. Keep
in mind the CBS update can run any time and will only take approximately
two (2) hours to complete.
<PAGE>
FIserv/CBS The Bryn Mawr Trust Company
Response to
Vendor Questionnaire
Section II
Total Quality Management Commitment
1. Do you provide service quality questionnaires for your clients to evaluate
your services?
Yes, the company employs a formal survey mechanism to enable our clients to
evaluate our services. There are actually three (3) types of surveys
utilized during the course of any given year. The first, and most
frequently administered, is the Monthly Customer Satisfaction Survey. This
survey is administered via telephone by an independent research firm which
on average will survey your institution approximately four times a year.
The questions are designed to solicit your satisfaction with the normal
daily operations and service levels of the FIserv/CBS Division. The other
two surveys are administered annually by our corporate offices in Milwaukee
and are designed to assess your overall satisfaction with the company from
an executive as well as operations perspective. In that maintaining
satisfied customers is the cornerstone of our business, the combination of
these multiple surveys forms the basis for virtually every employee
incentive compensation plan which exists within the company.
2. What is the frequency of your quality surveys?
Monthly and annually.
3. Are the results shared with your customers?
The results are not published, however they are available upon request and
we openly share the cumulative results with our users during our periodic
user group meetings.
4. Who within your organization reviews the results of customer feedback?
ALL survey results, i.e. monthly and annual, are reviewed by every
---
management level within FIserv, including our Chairman, George Dalton. The
most practical review takes place at the business unit level, i.e. CBS,
where beginning with the Vice President of Delivery Services and various
group managers, the results are reviewed and if necessary action plans
developed. These results and the accompanying action plans are then
forwarded to the
II.1
<PAGE>
FIserv/CBS The Bryn Mawr Trust Company
Response to
Vendor Questionnaire
senior management committee which includes the President of the division,
Senior Vice President of Product Support and Development, Senior Vice
President of Sales and Marketing, Senior Vice President of Finance, Senior
Vice President of Human Resources, Senior Technical Consultant and Senior
Banking Consultant. Through individual action plans and the CBS user
group, this committee will track the progress of proposed action plans
through to completion.
5. Describe two significant changes that you have implemented in the most
recent twelve month period based on input/feedback received from customers
as part of the Quality survey.
1. Enhanced Customer Service Organization - In a move directly
related to feedback received from the survey process, we realigned our
customer service organization as a separate and distinct function
within the company, i.e. all this group does now is service the
customer. In the past this function was performed by different staff
members performing several different tasks. As a result we were not
being as responsive as we or our clients expected. The results of the
change have been quite successful and include the implementation of an
"artificial intelligence" help desk facility, and the beginnings of an
account management program designed to assist in ensuring our customers
take maximum advantage of the company and our product.
2. Established A Dedicated Training Function -The surveys have indicated
our customers want more in the way of education, i.e. more classes,
more advanced training, regional classes, etc. As a result we have
established a dedicated training department responsible for the
development and administration of a much richer training curriculum.
This effort and resource will result in over twice the number of
student training days being performed than last year.
6. Describe methods used for Quality Assurance on new releases. How are
clients involved in this process?
Within FIserv's CBS Division, quality assurance and customer involvement
begin at the design stage of any project. The overview of this process is
as follows:
<PAGE>
Flserv/CBS The Bryn Mawr Trust Company
Response to
Vendor Questionnaire
1. Business DescriptionIFunctional Specifications - This aspect of any
development effort entails the actual definition of the proposed
modification or enhancement It is heavily dependent on direct customer
involvement and ultimately customer sign-off that the project contemplated
meets the business requirements.
2. Functional Requirements - This phase of the activity describes in detail
the "user" aspects of the proposed enhancement or modification, including
but not limited to, detailed requirements, process requirements, batch
requirements, on-line requirements and documentation requirements. The
customer is the final sign-off on this phase of the development project.
3. Detailed Specifications- This phase encompasses the actual technical design
phase of the project. It includes a technical overview, determination of
file change specifications, report specifications, display specifications
and processing specifications. Following the creation of these
specifications, they are reviewed and approved by the senior technical
management staff to ensure consistency with architecture, design and
performance standards.
4. Program Development - This phase entails the actual programming of the
proposed modification or enhancement. Within this phase, there are a series
of unit tests conducted and the beginnings of the development of a "system
test", i.e. a complete, functional test of the modification or enhancement.
5. Development Testing - This phase is where true testing and quality
assurance begin for any new development activity. Within this phase a test
methodology is utilized which includes the development of test scripts,
actual test execution, stabilization of testing and test data, regression
testing and finally full system testing. Most of this testing is performed
by the technical staff and results in a "technically" sound project.
6. Data InputIData Base Testing - This phase is where true user involvement in
the testing process is critical. This phase consists of defining the set
of products and accounts to be tested, random selection of data for on-line
testing, random selection of data for negative testing, definition of
transactions for micr/non-micr testing and any other testing criteria
unique to the particular project i.e. teller subsystem testing, etc.
II.3
<PAGE>
FIserv/CBS The Bryn Mawr Trust Company
Response to
Vendor Questionnaire
Our user analyst staff actually conduct these tests and are required to
"pass" twenty (20) consecutive nightly processing scenarios prior to
accepting the project. Subsequent to this testing, a "beta" test is
actually conducted in multiple customer locations.
7. Release - The final phase is the actual release of the new
capability. This phase includes the updating of all the technical and
user documentation, creation of the appropriate release materials,
documenting the test scripts utilized and ultimately shipment to the
customer.
7. Describe the level of involvement of clients with system design,
engineering and planning.
As described above, they play a very key role in all of these activities.
In addition to customer specific modifications or enhancements, we also
employ the same processes and signoff with requests received from our user
group.
8S. Are your software and procedures subjected to an annual review by outside
auditors and/or examiners. How frequently are they reviewed ? Are results
shared with users?
The CBS Division itself is reviewed by outside auditors for financial
purposes only, however our in-house customers are subject to the same
reviews your institution would be currently. As a result of our
utilization of the CBS System in a service bureau environment, these data
centers are subject to annual review by the appropriate internal and
external auditors. We believe our in-house customers would be pleased to
share audit results with you upon your request. The data center audit
results are available upon request.
9. Describe your methods of assuring compliance with federal and Pennsylvania
laws and regulations.
Our company employs a full time compliance officer who subscribes to a
variety of industry compliance services. This individual is responsible
for the assimilation of information regarding regulatory compliance and
ultimately the distillation of this information into definitions of how we
and our customers should comply with a specific regulatory requirement.
Once this work has been completed, the same development process as
described above is utilized to perform the actual programming effort
required for compliance. This same scenario would apply to both federal
and state compliance issues. II.4
<PAGE>
FIserv/CBS The Bryn Mawr Trust Company
Response to
Vendor Questionnaire
10. Describe your procedures for monitoring and implementing industry related
changes.
The most important element in this process is the FIserv customer base.
This group, not only CBS customers, provides valuable insight into
product, regulatory and service requirements needed within the financial
industry. On our part, the CBS Division has an internal Strategic Product
Council which meets on a regular basis to assess industry trends, evaluate
new product offerings and evaluate input from the CBS User Group. This
group is then responsible for creation of the strategic product plan for
the CBS Division.
11. List all of the financial institutions in the state of Pennsylvania which
are clients of the proposed software product. Please provide a contact
name.
Adams County National Bank
675 Old Harrisburg Road
Gettysburg, PA 17325
Contact: John Kiehl, Vice President
717/334-3161
Assets $430M
Commercial National Bank of Westmoreland County
900 Ligonier
P.O. Box 429
Latrobe, PA 15650
Contact: John L. Letterio, Senior Vice President
412/539-3501
Assets: $220M
First Western Bancorp
101 E. Washington Street
P.O. Box 1488
New Castle, PA 16103-1488
Contact Thomas J. O'Shane, President
412/652-5513
Assets: $1.4B
II.5
<PAGE>
FIserv/CBS The Bryn Mawr Trust Company
Response to
Vendor Questionnaire
Rank Ahnert, Inc.
Route 209
Bushkill, PA 18324
Contact: John Hendershot, Data Processing Manager
717/588-6661
Three Rivers Bank and Trust Company
Route 51, South
P.O. Box 10915
Pittsburgh, PA 15236
Contact: Louis Klippa, EVP & COO
412/462-5744
Assets $599M
II.6
<PAGE>
FIserv/CBS The Bryn Mawr Trust Company
Response to
Vendor Questionnaire
Section III
Communication With Customers and Training
1. How do you inform customers concerning new features/enhancements to
systems? Attach an example of the most recent customer update?
CBS product features/enhancements are released to our clients in three (3)
different releases throughout the year. Approximately one month prior to
each release written communication is sent to our users and our third party
software partners. A copy of our 94.01 pre-release material is enclosed.
2. How do you keep executive management of client organizations informed
regarding your future development plans and most recent accomplishments?
Attach a sample of the most recent executive briefing.
The primary means of communication to our clients relative to future CBS
development plans and our most recent accomplishments is through the
following mechanisms:
1. Through our user group meetings.
2. Pre-release information materials are sent as described in #1 above.
3. Through the FIserv /CBS quarterly newsletter as enclosed with this
response.
4. Through our CBS regulation letter as enclosed with this response
5. Via the FIserv /CBS account representative assigned to the client
The above communication resources are made available to the levels of
management selected by our CBS clients. The vast majority of our customers
prefer to have the above communications directed to their senior operations
officer. Therefore, allowing the operations officer to communicate to
their respective organization levels as appropriate.
3. How often are reference materials updated? What internal review process do
you use to maintain the integrity of user documentation?
Reference materials are updated with every release of new software that is
sent to our clients. The user documentation follows the same Quality
Assurance standards as described in item 6 of the Total Quality Management
Commitment section of this response.
III.1
<PAGE>
FIserv/CBS The Bryn Mawr Trust Company
Response to
Vendor Questionnaire
4. What materials are provided with new software releases to help clients
evaluate the relevance of new enhancements for their organizations and to
determine whether the enhancements will be adopted by the client? Attach an
example.
All releases are preceded by literature which describes in a macro sense
the content of the release and specific implementation considerations.
This information is invaluable in assessing not only your use of new
features, but is helpful in assisting you to determine potential training
requirements, technical requirements and other resource requirements.
5. How do you provide for continuing education? Describe your educational
activities. Attach examples of recent training schedules.
All pre-planned continuing education is offered in six month intervals as
depicted in the attached 1994 Workshops guide (January to June). In
addition to the pre-planned Workshops, Flserv provides special concurrent
training workshops during user group meetings. Regional workshops are also
established to coincide with the CBS Product releases and when major
regulation enhancements occur, i.e. Regulation DD.
6. Are training sessions held at the client site, at regional locations, or at
your corporate headquarters? Describe the manner in which you select
training sites.
All pre-planned Workshops are conducted at the CBS Headquarters in Orlando,
Florida. Regional Workshops are typically established in major cities
where there is easy, economical access to a large concentration of CBS
users. On-site training sessions are available at the request of a client
at the then published on-site training rates.
7. Is Computer Based Training available? List the software packages for which
CBT is not available.
Computer Based Training is available relative to the operation of the IBM
AS/400 and operating system software, however, is currently not available
for the CBS System. This is an area of development we are exploring for
inclusion with future releases of the software. No timetable has been
determined.
1II.2
<PAGE>
FIserv/CBS The Bryn Mawr Trust Company
Response to
Vendor Questionnaire
8. Do you conduct User Group meetings? How frequently? Are these local,
regional or national? Describe the User Group process. Is the User Group
run by clients? Attach the agenda from the most recent user group meeting.
The CBS User Group is run as a national independent user group that is
governed by officers that are elected from the CBS client base. The user
group conducts meetings as governed by their own set of by-laws. FIserv
attends and participates in these meetings at the invitation of the user
group executive council. The location of the meetings is determined by the
user group executive council.
FIserv/ CBS sponsors annually a national conference - Partners In Progress
(PIP) that is held in Orlando, Florida. A copy of last year's annual PIP
conference is enclosed with this response. The annual conference has grown
dramatically in attendance by our clients during the last five years, and
has caused us to seek larger facilities to accommodate the conference
attendees. The 1994 PIP conference is scheduled for October 19-22, 1994 at
Disney's Yacht Club Resort.
9. Describe how new development priorities are established. How are clients
involved in the process?
In addition to the enhancements identified by our internal Strategic
Product Council, the CBS Division actively solicits enhancement requests
from our user group. Annually this organization submits a list of
requested improvements which have been prioritized by the entire user
group. We endeavor to resolve/enhance as many of these items as we can
during the next year's development activity. Our progress against this
objective is reported annually to the user group at our fall meeting.
10. Is an account Manager assigned to each client? Describe the
responsibilities of these individuals. Is the Account Manager assigned to
work at the client site? If not, describe the frequency and nature of
contact.
Currently the CBS Division does not have a formal account executive
program. Formally establishing this function is a high priority objective
for 1994. Our concept is the individuals assigned to this program would be
based in Orlando, provide a common thread of communication for customers
into the Division, maintain the status of outstanding issues and make a
minimum of two on-site visits per year. III.3
<PAGE>
FIserv/CBS The Bryn Mawr Trust Company
Response to
Vendor Questionnaire
11. Are quick reference materials available for the system(s). Please attach
examples.
There are currently no quick reference materials available, however, the on-
line system has extensive on-line help facilities.
Ill.4
<PAGE>
FIserv/CBS The Bryn Mawr Trust Company
Response to
Vendor Questionnaire
Section IV
Customer Service
1. Describe the methods by which customer service is provided?
The primary method is via telephone. This service is provided through a 1-
800 number which is specific to the customer service organization. In
addition to this method, the CBS System and IBM AS/400 support an
"electronic" link between the bank and CBS staff members to allow for
actually reviewing a problem on-line. Finally in very extreme cases, Flserv
will provide on-site assistance if warranted.
2. What are the normal hours of operation for Customer Service (eastern time)?
Customer Service is available twenty-four (24) hours a day (7) days a week
- 365 days a year.
3. Is customer service provided through a central location or in remote sites?
Describe the average number of years of banking experience held by the
representatives. Describe your training and development program for
Customer Service representatives. Describe the means by which you assure
excellent quality service. Do supervisors have the ability to monitor
customer service calls?
All customer service is currently provided through the central. office in
Orlando, Florida. In the future as the product is placed in various
regional processing centers, we expect to provide regional support
services. With respect to our actual customer service representatives,
they generally are hired with between eight and ten years of banking
experience. Many of them have actually worked with the CBS System in a bank
environment prior to joining the CBS Division. As to training, virtually
all of our customer service staff have begun their FIserv careers by
working in the Installment/Conversion area, then the Development area and
constantly augmenting this file training with participation in various
internal classes. As discussed previously, the survey process and
management review process are our primary methods for ensuring high levels
of customer service. In addition, the implementation of the artificial
intelligence help desk, call tracking, problem logging and various
management reporting are all mechanisms used to assure high level of
customer service. Currently, other than through the reporting process,
supervisors do not have the ability to monitor service calls.
IV.1
<PAGE>
FIserv/CBS The Bryn Mawr Trust Company
Response to
Vendor Questionnaire
4. Are customer service representatives assigned to support a single product or
multiple products?
Customer Service representatives generally support multiple applications,
however, are specialists in a given area, i.e. deposits, loans, etc.
5. Is there a fee for customer service? Describe pricing policies.
Customer service support is included as part of the banks monthly
maintenance fee. The monthly maintenance fee is based on the software
systems the bank chooses to implement. These fees are depicted in detail
in the FIserv/CBS proposal.
IV.2
<PAGE>
FIserv/CBS The Bryn Mawr Trust Company
Response to
Vendor Questionnaire
Section V
Multi-Company Processing
1. Does your product handle multiple companies?
Yes, the CBS System supports up to 999 financial institutions or companies.
2. Will your system accommodate holding company processing?
Yes, the CBS System will support up to a 999 financial institution holding
company
3. Is there a company number on every record in the system(s)?
There is a "bank" record associated with every record in the system.
4. Do all reports and forms have a company number displayed on them?
There is a "bank" number associated with most applicable forms/reports
within the system. Please refer to specific reports in the documentation
for actual detail.
5. Is the company number easily identifiable on the customer documents?
Yes.
6. Is there a file(s) allowing for customized items by company?
a. Company Names - Yes
b. Company Addresses - Yes
c. Company Phone Number - Yes
d. Other - See Documentation (Common File)
7. What options within the system(s) can be uniquely customized by company?
Please see the CBS Common File documentation that is being held by Bill
Mixon.
V.1
<PAGE>
FIserv/CBS The Bryn Mawr Trust Company
Response to
Vendor Questionnaire
8. Can the system(s) handle on-line teller processing as might typically be
found in an acquired thrift? Please describe ability to process in this
type of environment.
The CBS System supports traditional on-line "real-time" processing as found
in a traditional thrift institution. This on-line real-time feature can be
supported at the individual bank level as well as can be established at the
product type level. This allows a multi-institution holding company to
process their holding company institutions transactions according to their
individual processing preference, i.e. Thrifts can be on-line "real-time"
and Commercial Banks can be "memo post" or traditional proof-of-deposit
based.
9. Can your product process multiple companies on a single file with a single
job stream?
Yes, however this is not our recommended method in that it does not take
maximum advantage of the capabilities of the IBM AS/400 or other features
within the CBS System.
V.2
<PAGE>
Release 9401.00 Enhancements/Major Revisions
Comprehensive Banking System (CBS)
New Distribution Method for Sorting Reports (G574)
CBS provides user-assigned controls for most reports within the Loan, Time,
and Transaction Subsystems. Use these controls to add, change, or delete
report and field values and processing parameters. Bank-level "work with
report" screens allow you to maintain various report controls, including
title, frequency, sequence, page break, and print override options. "Work
with field" screens enable you to modify field controls, including
field/decimal length, format, description, and error message ID.
Report Controls
The system uses the report definition when printing a report to determine
if, when, and in what format to print the report. The system also uses a
report's definition to print the name and number of the report in the
report heading. Separate options allow you to change, delete, or display
processing parameters for the selected report.
Field Controls
The system uses the field definition to determine the data format and
processing restrictions for user-defined fields that print on the report.
Separate options allow you to maintain the entry parameters for an existing
user-defined field, delete a field, display the parameters for a field, and
maintain the acceptable values for a field.
Branch Output Queue Routing
You can define a report so that the system generates separate, branch-
specific versions of the report, and routes each version of the report to a
specific output queue. If a report definition's output queue routing option
is on and the report's primary sort sequence is by branch, then reports for
the specified branches are written to the designated output queue.
Command Keys Restructured (G575)
CBS SAA/CUA command key standards have been updated. All command keys are
mapped to the new standard. Standards for capitalization and punctuation
have also been implemented. Consequently, all screens and menus will be
sent out in this release.
VARISORT Removed from PCOMBDAILY (G666)
CBS has removed VARISORT conumands from PCOMBDAILY. We do not process
multiple banks in the same library, and therefore, these commands are not
required. 1
<PAGE>
Enhancements/Major Revisions Release 9401.00
Comprehensive Banking System (Continued)
Application Daily Processing Removed (G667)
CBS has removed on-line options and related programs that support
individual application daily processing for the CIF, Common File, FTM,
Loan, Time, and Transaction Subsystems. This step was taken to maximize
resources and PCOMBDAILY processing efficiency.
PCOMBDAILY Performance Improved (G770)
CBS has made technical modifications to PCOMBDAILY to realize an
improvement (i.e., a decrease) in the time required to complete nightly
processing. These modifications include:
* Changing TA batch posting TA0100 to retrieve the NSF Exception Item
Option/Charge flag at program start-up
* Changing OD letter TA0433 to use the daily exception file TAT008 to
determine notice printing
* Changing daily pre-post backup and after-post backup to a SAVLIB from a
SAVOBJ
* Adding sequential processing and record blocking to the Transaction
Master Sequential pass and the FTM application transaction separation
* Deferring the creation of the logicals for the Transaction Subsystem
nightly processing until the file is required
* Processing customer-defined (one-up) statements outside of PCOMBDAILY,
submitting the program to batch subsequent to the after-post backup
* Changing PCOMBDAILY to verify that statements were printed for the last
PCOMBDAILY (if statements; were not printed the system aborts
PCOMBDAILY).
2
02/94
<PAGE>
Release 9401.00 Enhancements/Major Revision
Comprehensive Banking System (Continued)
New Customer Liability Feature (G774)
CBS gives you the capability to track and control a customer's credit
instruments using the Customer Liability Control feature. You can use
this feature to track and control liability data for both individual
customers and logical groupings of customers. The feature also includes a
credit limit at each level, allowing you to create an authorization
hierarchy from the account level upwards.
This feature supports four tiers of liability control grouping:
* Group Customer - Groups multiple customers together for reporting and
liability tracking. A group customer is the highest tier in customer
liability control, and defines an overall credit limit for all of the
customers in the group (the total amount that may be loaned to the
members of a group). A group customer may contain an unlimited number of
customers.
* Customer Credit Limit - Provides an overall credit limit for all of a
customer's accounts. For a group customer record, this value represents
the overall credit limit for me group.
* Customer Credit Line - Groups accounts together for tracking and
reporting. Each customer that will use the consumer liability control
feature must have at least one credit line defined for them. A customer
may have an unlimited number of credit lines assigned to them.
* Customer Sublimit - Provides liability control at the account level.
This control links specific credit instruments (e.g., loan accounts) to
a customer credit line. Sublimits further subdivide credit lines. A
sublimit can be attached to only one credit line.
Debit Authorization
The system maintains a record of the beginning of day position totals for
all of a customer's liability control limits which serves as the basis
for authorizing debits. These position totals -- carried for the account,
sublimit, credit line, customer limit, and group limit -- are updated in
real-time for debits and credits during the nightly processing run to
include credits.
Reporting Features
The customer liability control feature includes the following nightly
reports and notices
<PAGE>
to aid in tracking customer liabilities:
* Expired Credit Lines Report (90-0021)
* Credit Lines Expiring by Officer Report (90-0023)
* Automatic Fee Payment Journal (90-0025)
* Credit Line Expiration Notice
* Credit Line Fee Due Notice.
3
02/94
<PAGE>
Enhancements/Major Revisions Release 9401.00
Customer Information File (CIF) Subsystem
New Common Base CIA Subsystem (G766)
The new version of the CIF Subsystem will serve as a "common base" for both
the domestic and international CIF Subsystems, enabling both CBS and ICBS
organizations to receive enhanced customer Processing capabilities.
Screens and function keys will more closely reflect SAA standards, and CIF
files and programs are renamed to CBS standards. Externalized CIF files
will make it easier to perform queries.
Although this new CIF subsystem includes some existing CBS and ICBS
functionality, it represents an entirely new subsystem. As a result, it
includes a variety of enhanced and new capabilities:
* CIF Common File Parameters - Bank-level CIF parameters enable you to
control a variety of features. For example, you may use these parameters
to determine whether to use the parsing feature (described below). In
addition, within the Common File, you may define up to thirty user-
defined fields (also described below).
* Work With Functionality - CIF "work with" design provides for easier
and more logical access to CIF and CIF Common File functions. This
functionality enables you to access a variety of specific "subfunctions"
within a more generalized function. For example, the Work with Customer
function enables you to not only add, change, and display customer
information, but also allows you to display customer-level memo/tickler
information, display customer summary information, work with sensitive
data, work with customer-to-customer relationships, and work with
customer-level credit line information.
* Customer Name and Address Information - The new CIF provides for the
expansion of each of the six-lines of customer name and address from
thirty positions to forty positions, enabling you to enter complete
address information. The option to separate customer name and address
information allows for easier information retrieval. This "parsing"
option, determined in the CIF Common File, provides your organization
with the ability to query your entire customer base for specific purposes
(e.g., customer mailings to all out-of-state customers).
* Expanded Alternate Name/Address Capability - Expanded alternate
name/address functionality will enable you to assign up to five account-
level alternate name and addresses to be used for account alternates
primary statement alternates, additional statement alternates, as well as
alternates for checks and government filings.
* Expanded Demographic Data - The ability to use expanded demographic data
<PAGE>
Release 9401.00 Enhancements/Major Revisions
Customer Information File Subsystem / Common Base (G766) (Continued)
provides your organization additional flexibility in your organization's
customer records.
* Automated Legal Titling - This optional bank-level feature provides
automated account titling capabilities for the Transaction, Time, and
Loan Subsystems. This functionality creates new relationship codes,
selecting the customers in the proper order and building the words to be
used in the legal title for inquires, statements, and notices.
* User-Defined Fields - CIF Common File parameters provide the capability
to define up to thirty user-defined fields. Use these fields for any
purpose(s) your organization requires. This static information is
available from both the customer summary and the Display Customer option
from within the Work with Customer function.
* Customer-to-Customer Relationships - Work with Customer to Customer
Relationship Codes functionality enables you to create user-defined codes
to establish family, business, or other relationships between your
organizations individual customers. These codes are comprised of a
three-position value and a thirty-position alphanumeric description of
the code. This functionality enables you to relate customers to other
customers, similar to the way existing functionality enables you to
relate customers to accounts. The system displays these fields on the
Work with Customer and Customer Summary functions.
* Memo/Tickler - The new CIF will enable you to establish Common File-level
memo and tickler default categories. You may then create customer-and
account-level memos and/or ticklers based on these categories.
* Credit Line - The new CIF will enable you to establish Common File-level
credit line and sublimit default categories. You rnay then add credit
lines to your organization's customers based on these categories.
02/94
<PAGE>
Enhancements/Major Revisions Release 9401.00
Financial Transaction Management (FTM) Subsystem
Memo Post Capability Added to BTE Function (F840)
The FTM Subsystem includes a new memo post capability for Batch Transaction
Entry (BTE) files. Within the Work With BTE Files function, the memo post
function option ("M") allows you to designate particular files to be memo
posted prior to PCOMBDAILY processing. This feature reduces the number of
NSF and overdraft items, since the transactions immediately affect the memo
balance of the accounts.
If you add an item to a file that is designated to memo post, the system
memo posts the item also. If you delete a batch or an item within the
batch, the system reverses any prior memo posting.
FTM Enhanced to Include Fed MICR Processing (GO76)
The FTM Subsystem supports Fed MICR inclearing, including processing of
commingled items. This capability saves time, and allows for earlier and
more accurate item processing. If you designate (using a data area flag)
that your bank is to process inclearing runs via Fed MICR, then, during
processing into FTM, the batch header record identifies the run as "MICR"
or "COMM" (commingled).
Memo Posting of Inclearings Added (G506)
The system memo posts MICR-capture inclearings as they are processed into
the FTM Subsystem. This feature reduces rejects and NSF overdraft items.
Any edits you make to an inclearing file (using the Balance/Maintain the
Batch File function) affect memo posting.
New Cross-Bank Inclearing Processing and Interface (G507)
If you process in a multi-bank environment where the banks all use the
same AS/400, the FTM Subsystem allows you to internally clear items
between bank production libraries. The system interfaces the general
ledger entries to each bank production libraries cross-bank inclearing
account. Clearing items internally eliminates Federal Reserve processing
charges for cross-bank inclearings.
6
02/94
<PAGE>
Release 9401 .00 Enhancements/Major Revisions
Loan Subsystem
Deferred Fees Now Recognized As Income When Loan Is Sold (F528)
When a loan is sold, the system automatically makes an earnings adjustment
to unearned deferred loan fees (FASB 91 fees) and post this amount as
income on the date of the sale. This adjustment is based on a ratio of
the sold amount of the loan to the amount available for sale. If the
account is sold as a participation, the account's new daily earning factor
is recalculated based upon the percentage retained by the bank.
You activate this feature using a product-level control, and designate a
new general ledger interface account to which the FASB Earned Sold amounts
are to be posted. The system determines the adjustment amount to unearned
FASB fees using the following logic:
FASB Amount Earned Sold = Current Unearned FASB Fees x Ratio
Where:
Ratio Sold Amount (i.e., amount to be participated) Loan Balance - Participation
---------------------------------------------
Balance (i.e., available balance)
This enhancement uses the FASB Accrued Debit transaction (TC 48) and FASB
Accrued Credit transaction (TC 68), to post FASB earnings from the sale of
the loan to the FASB Amount Earned Sold general ledger account defined in
the loan's product type. When manually posting a FASB earnings adjustment,
you can use new Adjustment Type field on the Transaction Posting screen to
indicate whether the adjustment is to post to regular FASB earnings or to
the FASB amount earned sold. The FASB 91 Recap portion of the Loan Recap
report (50-049) is modified to reflect the FASB fees earned/sold today
deducted from the previous FASB unearned fee balance to determine the
ending balance of FASB unearned fees.
7
02/94
<PAGE>
Enhancements/Major Revisions Release 9401.00
Loan Subsystem (Continued)
Third Party Reserve Processing Added (F938)
Dealer processing is enhanced to allow multiple dealer relationships for
one loan. Each additional ("third party") relationship has a unique dealer
record, and each participates in the accruals and earnings of the loan to
which they are related. CBS supports up to eight precomputed interest or
999 simple-interest third party dealer relationships per loan. The system
generates separate reports for each third party dealer.
Common File Control
The Common File Code Definition contains a new option ("T") for the
Dealer/Interest/ Insurance Flag that enables you to identify a third party
dealer rebatable deduction.
Account Control
The system includes account-level controls to support third party dealer
relationships, enabling you to:
* Specify the amount of third party dealer holdback for a loan that you are
adding
* Generate a prepaid reserve debit for each third party simple interest
dealer
* Generate a holdback credit for each third party simple interest dealer on a
loan
* Post an original holdback amount on an account with third party rebatable
reserves
* Maintain existing third party holdback amounts for a loan
* Inquire on reserve collected amounts on simple interest, third party loan
transactions
* Add, change, or delete an existing loan's third party relationships.
Reporting Features
The new Third Party Trial Balance (50-2505) displays a trial balance of
third party relationships. You can specify a specific third party
relationship or a balance of all third party relationships.
Conversion Considerations
During installation of the release the system reads the History Detail -
Maintenance Transactions file (LNP00702). For any dealer-related
maintenance transaction, the system initializes the value in the dealer
number field with the value contained in the dealer number field in the
Loan Master File (LNP003). If the maintenance transaction is not dealer
related, the system initializes the field to zero.
The system produces a conversion report that lists maintenance transactions
that were initialized with a dealer number field value.
<PAGE>
Release 9401 .00 Enhancements/Major Revisions
Loan Subsystem (Continued)
Defaults Added to the Add New Loan Function (G389)
CBS expands loan product-level defaults to include the Secured Flag and
Collateral Code. Values in these fields default to the loan level during
the Add New Loan function and can be overridden. The system also
calculates the interest rate for each loan using the product level index
rate and variance information. These new features save tine and reduce
errors during new loan setup.
The Variable/Reviewable Rate screen displays for all product types, but the
system allows you to enter a "0" in the Rate Index Number field for non-
variable product types.
During installation of the release, the system initializes the product-
level Secured Flag field to "N" and Collateral Code field to "b." This
release includes a called program (CFG389) which displays all loan product
types and enables you to enter Secured Flag and Collateral Code values for
each. The system produces a conversion report that displays entries to
these fields for each product type during installation.
Deposit Holds Automatically Updated Based on Loan Balance (G419)
CBS will provide the convenience of automatically updating a Transaction
Subsystem deposit account's hold amount based on the balance of the loan
account which the deposit account secures. This release includes new
fieldsat the collateral level:
Vary Hold Flag - Indicate whether to vary the deposit account hold amount
based on the balance outstanding on the loan(s) assigned to the collateral
or to maintain the deposit account hold amount equal to the face amount of
the loan(s).
Deposit Type/Account Number - Specify the number of the Transaction or
Time Subsystem account that secures the loan, and indicate whether the
deposit account number is a savings, demand deposit, or a time account.
Note: If a time account is used as collateral for a loan, the entire time
account balance is restricted from withdrawals (using a new account-level
posting restriction code).
The system reports maintenance to either of these fields on the
Collateral Maintenance Report (01-0090).
9
02/94
<PAGE>
Enhancements/Major Revisions Release 940 1.00
Time Subsystem
New Posting Restriction Capabilities (G309)
CBS enables you to restrict debit or credit posting to a time account using
user-assigned, Posting Restriction Codes. The posting restriction applies
to an account's entire balance, and includes both on-line and batch
transactions. The system passes the posting restriction information to the
Teller System for on-line debit and credit postings. CBS reporting is
enhanced to include posting restriction codes on numerous existing reports.
Using the Common File Work with User-Defined Fields function, establish and
maintain codes that prohibit debit and credit transaction posting to a
account's entire balance. For each posting restriction reason, assign a
value of 0-9 or A-Z (excluding the system-reserved "C" code). Indicate the
user-defined reason for the posting restriction (up to a 30 character
description), as well as whether account-level override of the restriction
will be allowed.
At the product level, the Deposit Used as Collateral field is replaced by
the Posting Restriction Code field. At the account level the Collateral
Flag field that indicated whether or not the time account was pledged as
collateral is replaced by the new user-defined Posting Restriction Code
field. The value in this new field defaults from the codes established at
the product-type level. Time Account Inquiry displays posting restriction
information for an account.
When a loan is secured By a time account the loan Subsystem passes a "C"
(collateral for loan) to the Posting Restriction Code on the Time Subsystem
account. When the collateral is removed from the loan, the Loan Subsystem
passes an "b" (blank) to the Posting Restriction Code on the Time Subsystem
account.
Conversion Consideration
During installation, the system converts the information in each account's
Collateral Flag in the following manner.
<TABLE>
<CAPTION>
Old. New:
<S> <C> <C>
Collateral Flag Posting Restriction Code Posting Override Flag
Any character (Yes) Y (Posting Restriction N (Cannot be Overridden)
Code)
b (No) b (No Posting N (Cannot be Overridden)
Restriction)
</TABLE>
The system produces a conversion report that displays the old Collateral
Flag and new Posting Restriction Code for each account.
10
02/94
<PAGE>
Release 940 1.00 Enhancements/Major Revisions
Time Subsystem (Continued)
Principal Payment by Check Processing Automated (G397)
For single maturity certificate of deposit accounts (CDs) that pay by
check at maturity, CBS provides an automated method to pay interest,
produce a combined interest and principal check, and close the account.
You are no longer required to manually generate principal checks for CDs
that pay by check. After installing the release, the system performs the
following steps for single maturity CDs that pay principal by check:
I ) At the last interest payment date prior to maturity the system
automatically changes the Interest Disposition code from pay by check to
capitalize, ensuring that only one check is produced at maturity
2) When the account reaches maturity, the system automatically pays interest
(capitalizes or transfers)
3) During nightly processing (prior to General Ledger posting), the system
generates a check for the principal amount of the account
4) The Principal Paid by Check transaction (TC 40) debits the principal
account balance and credits a principal check account
5) The system changes the account's status to closed
6) The system uses the principal check number assigned through the System
Operator Check Number Assignment function to update the inquiry-level
Principal/Retirement Distribution Check Number field.
Monitoring Principal Check Payments
CBS provides several ways of monitoring principal check payments made to
close single Maturity CD accounts:
* Account Maintenance Journal (30-004) - Lists accounts for which the
Interest Disposition code was automatically changed from a "P" to a
"C"
* Posting Journal (30-009) - Displays the batch processed Principal Paid
by Check transaction (TC 40) for the account
* Check Number Assignment Report (30-385) - Lists check number and
amount for the principal check generated by the system
<PAGE>
* Time Account Inquiry function Miscellaneous Codes screen - Displays
the check number the check used to pay principal on the account at
maturity.
02/94
<PAGE>
Enhancements/Major Revisions Re 9401.00
Transaction Subsystem
ZBA and Sweep Account Processing Enhanced (D586)
Zero balance (ZBA) and sweep account balances are checked during processing
to determine whether the system needs to transfer funds. The system no
longer uses the funded account's daily batch debit activity as the
criterion for movement of funds.
New Optical Mark Recognition (OMR) Capabilities for Customer Defined Statements
(F679)
If you use optical mark recognition (OMR) maps for customer-defined (one-
up) statements, CBS provides additional insert selections to increase the
functionality of this feature. Available insertion selections include:
* Statement Select Feeder - Product-level defined control That identifies
whether to insert statement materials from the corresponding selector
zone (1-4)
* Statement Divert Zones - Divert zone (1-4) assigned to a specific zip or
mail code for your organization
* Enclosure Count - Number of items enclosed with a statement
* Even Parity Check - Causes statement rendering machine software to
verify that the OMR map contains an even number of marked zones.
CF Special Service Descriptions Allow Upper and Lower Case (GO77)
CBS now allows you to use upper and lowercase letters when maintaining
service code descriptions via the Common File Special Service Charge
function. This enhancement gives analysis statements a more consistent
appearance, since other descriptions listed on the statement print in upper
and lowercase.
The release includes a program that updates all existing special service
charge descriptions to upper and lowercase. The program also produces the
9401.00 Convert Special Service Description Listing, which allows you to
review old (uppercase) and new (upper/ lowercase) descriptions.
12
02/94
<PAGE>
Enhancements/Major Revisions
Release 9401 .00
Transaction Subsystem (Continued)
Special Handle Statement Outsort Capability Added for One-Up Statements (G245)
An enhancement to statement exception item outsorting allows your
organization to identify up to 1000 "special handle" statements within
customer-defined (one-up) statement processing. This option, which is
valid only for demand deposit accounts, enables you to outsort customer-
defined statements for those exception reasons for which all items are
outsorted.
To use this feature, identify the special handle statement accounts within
the Financial Transaction Subsystem (FTM). Define the special handle
exception group within the Common File sort/exception table. Assign a
Sequence Number "1"(first group outsorted) so that the special handle
exception group will not be included within the other selected exception
item groups.
New Default Stop Payment Expiration Date (G268)
A new bank profile-level control enables you to assign the number of days
that stop payment orders are to remain active. 'When you add a new stop
payment order for which the customer has signed a stop payment card, the
system calculates the expiration date for that stop payment basal on the
number of days specified at the bank profile level. When you add a now
stop payment order for which the customer has not signed a stop payment
card, the system defaults an expiration date 14 days from the current date
(i.e., the date you enter the stop payment order). You can override the
system-calculated stop payment expiation date at the set up and
maintenance levels.
Conversion Consideration
During conversion, the system initializes the bank profile-level Stop
Payment Active Days field to "180." You can maintain this value.
13
02/94
<PAGE>
Enhancements/Major Revisions Release 9401.00
Transaction Subsystem (Continued)
1099-B Supported Through Over-the-Counter (G301)
CBS will support 1099-B processing for 1994 year-end. In this release, new
1099-B over-the-counter (OTC) screens and reports are added to the system;
however, the programs that generate 1099-B forms, create media, perform
correction functions and purge OTC accounts will not be incorporated until
the 1994 Year-End Release.
Over-the-counter (OTC) transactions are enhanced to allow you to add,
change, delete, and print information on accounts that have 1099-B
(broker/barter exchange) activity. A number of existing reports are
enhanced to provide 1099-B information.
Recap by Service Added to Analysis Services - Cycled Report (G312)
The Analysis Services-Cycled Report (20-305) is enhanced to include a new
recap by service charge to the end of the report. The Recap by Services
section prints the total amount of each service charge used, as well as the
number of units processed and chargeable items by default description.
This enhancement provides you with a more comprehensive method of tracking
income by fee group.
New TAP002 Field for Analysis Waived by Svc Chg Type (G314)
During service charge processing, the system calculates two waived analysis
service charge arnounts:
* S.C. Waived by Type - If the account-level Service Charge Type is
"waive," this field contains the service charge amount that would have
been charged if the account was set to assess, bill, or defer the
service charge
* S.C. Waived - This field contains the amount that is waived for the
account, based on the parameters assigned at the service charge plan
level (earnings credit amount, minimum balance requirements, and number
of free items).
Note: If the account is set to waive charges, the S.C. Waived amount also
includes the amount that would have been charged (if the account did
not waive charges).
A new Waived by Type field prints on the Analysis Service Charge Journal
(20-285). This field lists the amount of income waived that would have been
charged if the
<PAGE>
service charge type on the account was set to waive. This amount also
displays on the Checking/Savings Inquiry function's Service Charge Prior
Period screen.
14
02/94
<PAGE>
Release 940 1.00 Enhancements/Major Revisions
Transaction Subsystem (Continued)
GL Income Accounts for Chargeable Services Added (G315)
General ledger service charge.income accounts have been added to the
service charge level. You can define the following income categories:
* Borrowed funds fees
* Dormant fees
* Account inquiry fees
* Stop/hold fees
* Statement fees.
During service charge processing, the system:
1) Calculates the charges for account analysis
2) Credits the appropriate product-level, general ledger service charge
income account
3) Generates an offset to the product-level, general ledger service
charge income account in order to credit the specific general ledger fee
income account specified at the service charge plan level.
Sort Options for Analysis Statements Enhanced (G316)
New analysis sorting options allow you to group your analysis statements
by branch, officer, and service charge type (charge, waive, bill, defer).
A new exception option enables you to outsort "no charge" analysis
statements with a zero dollar charged, billed, or deferred amount. The new
Exception Item Maintenance screen allows you to assign zero dollar
analysis statements a different form type and/or out queue than non-zero
dollar charge analysis statements.
During service charge processing for analysis accounts, the sort key for
the analysis statements is generated by the sort options selected. The
system groups all waived service charge statements into one category and
prints them last. For combined relationship accounts, the values by
branch, officer, and service charge type are determined by the lead
account. For zero dollar analysis statements, if no exception is selected,
the no charge analysis statements are included with the analysis
statements that are charging a fee.
1 5
02/94
<PAGE>
Enhancements/Major Revisions Release 9401.00
Transaction Subsystem (Continued)
Special Service Description Removed at Transaction Time (G317)
Expanded service charge description lines are removed from the
Checking/Savings Inquiry function's Instant Statement/Current Period
screen, resulting in a screen that is easier to read and less confusing.
Because existing text on the transaction account history is not modified
to remove the expanded service charge description, a customer's statement
may have transactions reported both with and without the expanded
description. One full statement cycle after installing the release, all
statements will contain only the abbreviated service charge description.
Zero dollar transactions are no longer generated for "no charge" fees.
Although these were previously generated to reflect the number of free
services that a customer had been allowed, they are removed to alleviate
customer confusion.
Effective Dating to Prior Cycles Allowed (G322)
CBS provides the ability to effective date transactions into prior
interest cycles and to adjust interest payments and current accruals based
on the posting of the effective-dated transaction for checking and savings
accounts, A new backdating process supports recalculation of interest for
backdated transactions, within current period or prior periods. You can
now backdate up to the first day of the prior year. The existing product-
level Number of Months Backdated field, which previously was only used for
new account setup, allows you to restrict backdating of items to the
number of months specified.
A new history file contains all relevant interest plan and index rate
data, stored by the date of last maintenance to these parameters. For an
effective-dated transaction, the system uses interest history to
recalculate interest on the account.
The system reapplies rate changes in effective date sequence. For
transactions backdated into a prior period, the system posts a debit or
credit interest adjustment to the account balance with an effective date
as of the last interest payment date. The recalculation continues to
process through the current period and adjust the accruals through the
current period. The interest adjustment transaction is considered
capitalized interest, regardless of the interest disposition of the
account (e.g., transfer to another account, pay by check, etc.).
Reporting Features
When an interest paid adjustment is made for last year, the system creates
a 1099-INT
<PAGE>
correction. Based on this correction the system updates the Prior Year
Maintenance Journal (20-890) and the 1099-INT Journal Transaction Extract
(90-555). During nightly processing, the system also produces a corrected
1099-INT form. CBS will incorporate these features in the 1994 Year-End
Release.
Transactions backdated into a previous interest period within a prior year
continue to be listed on the Paid Exceptions Report (20-024).
16
02/94
<PAGE>
Release 9401.00 Enhancements/Major Revisions
Transaction Subsystem /Effective Dating to Prior Cycles (G322) (Continued)
New Transaction Codes
The Effective dating to Prior Cycles enhancement includes two new system-
generated transaction codes
* Credit Interest Adjustment (TC 06) - Posts the credit interest adjustment
to the account balance
* Debit Interest Adjustment (TC 07) - Posts the debit interest adjustment
to the account balance.
NSF Pay/Return and Fee Transactions Allow Effective Dating (G323)
CBS improves the functionality of NSF processing by providing the ability
to effective date the posting of an NSF exception item (paid item, return
item, charge, or waived charge) to the date the NSF item was presented for
posting.
For "pay all" accounts, the original item is force posted. If you decide
the next day to return the item, the system effective dates the Returned
Check transaction (TC 14) as of the date the item was force posted,
retrieves the serial number of the check being returned, and updates the
transactions serial number field with that number.
For "pay none"accounts, the original item is rejected. If you decide the
next day to pay the item, the system effective dates the Force Pay
transaction (TC 50) as of the date the item was presented.
If you assess the NSF fee in batch and you decide the next day to waive the
charge, the system effective dates the NSF/OD Fee Credit transaction (TC
45) as of the date the NSF item was presented. If your bank assesses NSF
fees the next day and you decide the next day to charge the fee, the system
effective dates the NSF Charge transaction (TC 52) as of the date the NSF
item was presented.
For each transaction, the Update Memo/Create Batch Transaction Entry File
function retrieves the original effective date from the NSF/OD file and
uses that date as the effective date for the exception item transaction in
the batch transaction entry (BTE) file.
<PAGE>
Page Advance for Customer-Defined Statements (G413)
New system flexibility enables you to designate a page break preference for
customer-defined , combined customer statements. Using a flag at the
Common File statement model level, you can indicate to the system to wrap
Printed account detail from one page to the next or to begin each account
detail at the top of a new page.
17
02/94
<PAGE>
Enhancements/Major Revisions Release 9401.00
Transaction Subsystem (Continued)
Receipts Produced During Batch Processing (G573)
In addition to batch and real-time receipt production capabilities, CBS
will provide the ability to produce receipts for DDA and savings monetary
transactions posted on line through the Host Teller Subsystem. Using the
existing Customer Receipts flag in the Transaction Common File's
Transaction Code Maintenance function you can identify whether you want the
system to produce receipts for a particular transaction code.
Note: The system also produces a customer receipt in the event of a
reversal that is posted against a transaction with a Customer Receipts
value of "Y" (produce receipts in batch).
The system prints transaction descriptions (from the teller system) on the
customer receipt; however, if you manually input a transaction description,
the system prints this new description on the customer receipt.
18
02/94
<PAGE>
Release 9401.00 Enhancements/Major Revisions
Complementary Products
New Corporate Cash Management System (E759)
The CBS Cash Management System provides a secure, easy-to-use system that
ties commercial customers to their accounts through Microsoft Windows.
Cash Management resides on a bank customer's personal computer and links,
via modem, to a PC server at the bank. The PC server is linked to an
AS/400 that is running CBS software, enabling customers to perform a
variety of functions from their home or office.
Cash Management System Functions
The CBS Cash Management System supports the following functions:
Transaction activity inquiry
Stop payments
Wire transfers
ACH batch processing
Security/options file
Internal and external funds transfers
Federal tax payments
Account inquiry on customer DDA, savings, time, and loan accounts
Credit line draw downs
Reconciliation functionality
Coin and currency orders
Customer services/on-line messages
Host-generated audit reports
PC-generated audit reports
Import and export capabilities to external software packages.
Cash Management System Reports
The CBS Cash Management System produces the following reports:
Funds Transfer Report
Stop Payment Report
Currency Request Report
Wire Transfer Report
Tax Payment Report
ACH Batch Entry Report
Activity Log
Previous Day's Statement (account)
History Statement (account)
Processed Transactions Report
<PAGE>
Correction Journal (items corrected by bank and processed)
Reject Journal (items not processed)
CAM Common File Log (control file)
Maintenance Log (for Common File).
19
02/94
<PAGE>
Enhancements/Major Revision Release 9401.00
Complementary Products (Continued)
New Real-Time ATM Posting and Card Management System (G576)
The CBS Automated Teller Machine (ATM) application provides an on-line
authorization module that interfaces ATM savings, checking, and loan
transactions to the CBS Host Teller Subsystem; and also includes a complete card
management system.
On-Line Authorization Module
The CBS on-line authorization module interfaces ATM savings, checking, and
loan transactions to the CBS Host Teller Subsystem on a real-time basis.
The on-line authorization module:
* Determines whether transactions can be authorized (based,on user-
defined parameters)
* Retrieves and updates a memo post account file during nightly
processing (to authorize transactions) and automatically forwards stored
transactions to on-line Host Teller Subsystem after nightly processing
is complete
* Supports real-time transaction fee assessment or accumulates fees for
statement assessment through CBS service charge plans
* Passes hold information for POS preauthorization transactions and
float information for deposit transactions
* Supports inquiry, deposit, withdrawal, and transfer transactions for
checking and savings accounts
* Supports payment and advance transactions for loan, checking, and
savings accounts
* Distinguishes ATM and POS transactions in on-line history
* Performs ATM balancing using the Host Teller Subsystem balancing
reports
* Processes credit card ATM transaction amounts to a general ledger
account for settlement purposes.
Card Management System
The CBS ATM application contains Tallyho System's card management system,
which interfaces card information and maintenance with the CBS Customer
Information File
<PAGE>
(CIF), Transaction , and Time Subsystems. The card management system allows
you to:
* Set up financial institutions for ATM, POS, and debit card processing
* Generate card numbers and personal identification numbers (PINS)
* Assign multiple ISO numbers for a financial institution
* Link up to 99 accounts (one primary) per application
* Automatically reissue cards (and optionally assess card fee) per term
or expiration date
* Order cards for new and existing customers/accounts
* Perform miscellaneous card maintenance (change card status, replace lost
cards, etc.)
* Maintain or display card data by card number or customer name.
20
02/94
<PAGE>
Release 9401.00 Enhancements/Major Revisions
Complementary Products (Continued)
Audio Response System Enhanced (G817)
CBS Audio Response, developed in conjunction with InterVoice Inc. and
operated on an OS/2 Platform, provides an easy and accurate method for
obtaining account and product information using a touch tone telephone.
The Audio Response System provides the convenience of 24-hour access to
account information, every day of the year.
Individual customers' social security numbers (SSNs) and business
customers' tax identification numbers (TINS) are defined within the
Customer Information File (CIF) and are identified on accounts during new
account setup. The system uses these numbers to access account
information. You can inquire on any account to which you have a CIF
relationship of sole owner(SOW), joint or first (JOF), joint and first
(JAF), joint and other (JAO), or joint or other (JOO). You only need
enter your social security number and personal identification number
(PIN); you don't even need to know your account numbers.
Audio Response provides multiple access methods to:
* Demand deposit account data
* Savings account data
* Loan account data
* Certificate of deposit account data
* Rate and product information
* Transfer capabilities
* Merchant check verification
* Facsimile (FAX) support for statements.
Additionally you can use the system to provide non-customers with access
to interest rate information, new product offerings, etc.
Each time your customer calls Audio Response, they have the option to
change their PIN. If a customer calls the system during normal business
hours, they also have the option, on every menu selection, to be connected
with your Customer Service Department for personalized service.
21
02/94
<PAGE>
FINANCIAL DATA SERVICES COMPANY
Addendum No. 4
to
Comprehensive Banking System
License and Service Agreement
Between Bryn Mawr Bank Corporation ("Client") and FIserv CIR, Inc. ("Company").
Purpose
-------
Client and Company wish to amend Agreement No. 3810145 with an Effective Date of
-------
December 30, 1994 . Notwithstanding anything in this Addendum to the contrary,
---------
in the event of a conflict between the terms of the Agreement and this Addendum,
the provisions of the Agreement shall take precedence.
Proposal
--------
Attached to this Addendum No. 4 is Company's proposal to Client. Company
warrants that its proposal is substantially accurate in all respects.
For and on behalf of Client By:
Name:
Title:
For and on behalf of Company By:
Name: Raju M. Shivdasani
------------------
Title: President, CBS Division
-----------------------
<PAGE>
Flserv/CBS Proposal
Table of Contents
The Bryn Mawr Trust Company
Table of Contents
I. Application Software Review
II. Hardware/Performance Considerations
III. Product Issues
IV. Implementation
V. Flserv/CBS Support
VI. Financials
Flserv/CBS Proposal
for Application Software
Review
The Bryn Mawr Trust Company
1. Application Software Review
<PAGE>
The following application software narrative will describe the broad scope of
capabilities of CBS that will meet the critical application processing needs of
The Bryn Mawr Trust Company (BMTC).
Flserv Comprehensive Banking System (CBS)
-----------------------------------------
The cornerstone of this Flserv proposal involves the implementation of the
Flserv Comprehensive Banking System (CBS). The CBS Division, founded in 1983,
installed the first CBS customer in 1984. CBS is a system designed to meet the
increased demands of a post-deregulation environment Because the CBS product is
relatively new, it is unencumbered with many of the inefficient data processing
problems that BMTC is experiencing with its current mainframe software systems.
CBS contains six integrated modules. including a system-wide Common File that
defines all processing parameters.
The Common File enables a user to add or change parameters without reprogramming
the system. This provides a level of flexibility unmatched by
other systems, allowing a rapid response to today's changing markets.
The primary CBS modules give the CBS customer complete control over the
following areas of banking/financial information processing:
o Common File Parameter Database
o Customer Information File
o Loans
o Transaction/Savings Deposit Accounts
o Time Deposit and Retirement Accounts
o General Ledger and Financial Management
o Item Processing
CIF
The Customer Information File (CIF) Subsystem provides a complete profile of
each customer. It contains names, addresses, demographics financial statements,
--------
and complete account information about all of a customer's relationships with
your institution. Today's banking consumers demand
<PAGE>
relationship banking. The
CBS Customer Information File Subsystem helps you establish and maintain a
customer relationship profile quickly and accurately. CIF gives you easy access
to accurate and current customer information -information that is vital when
making decisions about profitability, pricing, and credit. All customer
information is stored in a common database and is easily accessible to other CBS
subsystems. The CIF Subsystem standardizes the entry, retrieval, and analysis
of all customer information. The powerful CIF Subsystem offers your organ@on
many benefits, including:
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Flserv/CBS Proposal
for Application
Software Review
The Bryn Mawr Trust Company
Availability of
Total Customer Profiles
Increased Profits
Better Decisions
- Increased Productivity
Standardization
Accurate Customer Relationships
Cross-Reference Capabilities
Persona@ed Service to Your Customers
- Multiple Search Paths
- Multiple Account Capabilities
Easy Access to Credit Information
Combined Statement Capabilities
- Nine-Digit ZIP Code Savings.
Availability of Total Customer Profiles
CEF centralizes, standardizes, and correlates all customer and account
<PAGE>
information. You can easily obtain a complete and accurate picture of the
current status and history of all customer relationships with your organization.
CIF makes it possible for you to become involved in true relationship banking
and profitable cross-selling of services. CIF supports such banking innovations
as combined statements, relationship service charging, combined interest
reporting, customer profitability analysis, and direct/indirect liability
reporting.
Increased Profits
The Customer Information File Subsystem stores all customer information in a
common data base that is easily accessible to all other CBS subsystems. This
easy access reduces the labor-intensive data handling often associated with
maintaining accurate customer and account information. Streamlining the
updating of customer and account information also means fewer errors. Because
CBS is an on-line, real-time system, the generation of massive reports is
eliminated. This saves time and money. The on-line entry, inquiry and updating
-------
of information that CBS provides is, quite simply, the most efficient and cost-
effective way to run your financial institution.
Better Decisions
Today's tough management decisions require instant access to comprehensive
information. CIF helps you make better decisions by providing easy access to
complete and accurate customer and account information. Managers throughout
your organization can make better decisions about credit, pricing, rate setting,
marketing, customer service, auditing, and operations.
Increased Productivity
CBS helps you avoid two common pitfalls of data processing: costly duplication
of data, and redundant data handling. The CIF Subsystem requires information to
be entered only once. Updates to customer and account information are easily
handled through on-line, real-time maintenance functions. The common customer
data base used by all CBS subsystems affords everyone in your organization easy,
yet controlled access to needed information ... from a single, authoritative
<PAGE>
source.
Flserv/CBS Proposal
for Application Software
Review
The Bryn Mawr Trust Company
Standardization
CIF uses a standard format for entering and storing all customer information.
This standardization reduces common errors which frequently occur when customer
records are maintained in several departments. Cross-training of personnel is
easy due to the common architecture of all CBS modules.
Accurate Customer Relationships
You can combine duplicate customer records quickly and easily by simply
entering a customer's name. The software automatically identifies eligible
accounts and requests authorization before combining records. This feature
----
reduces the time-consuming clean-up task typically associated with CIF
conversions. CBS uses existing CIF information when opening new account
relationships for current customers. The system automatically builds and
maintains customer relationship profiles. This assures a current and accurate
customer information data base.
Cross-Reference Capabilities
CIF provides an accurate picture of a customer's total relationship with your
organization. A customer's individual accounts are tied together through CIF.
The total relationship can include all accounts the customer owns (both sole and
joint ownership) as well as accounts the customer influences. CBS tracks other
relationships, too, such as: authorized signer, power of attorney, trustee,
guardianship, beneficiary, guarantor, endorser, co-signer, and many more. CBS
also provides extensive memo capabilities within CIF. This capability is used
to tie customers to each other, or to record
<PAGE>
special information that is vital to serving the needs of a particular customer.
Personalized Service to Your Customers
CIF helps you provide personalized service to your customers. The Customer
Information File Subsystem automatically generates a unique key for each
customer. You can locate customer and account information by entering only the
customer's name or any portion of the name. This eliminates the need to ask a
customer for his account number when handling customer inquiries. In this way
CBS reinforces the importance of your customers' names and encourages your
personnel to use their names. (You can also search for information by account
number, if desired.)
Multiple Search Paths
CBS allows you to search for a customer by name, tax identification number, the
CIF key, home or business phone number or account number.
Multiple Account Capabilities
CIF allows a single customer record to be tied to multiple accounts. Each
account can have its own legal tide. The system also provides the capability to
maintain an alternate name and address at me CIF level for seasonal addresses,
as well as at the account level for mailing purposes, without creating redundant
CIF records. These capabilities give you the processing flexibility and
efficiency you need to be successful.
Fiserv/CBS Proposal
for Application Software
Review
The Bryn Mawr Trust Company
Easy Access to Credit Information
The CIF Subsystem maintains a broad range of credit information from internal
and external sources. You can easily obtain a customer credit profile,
including: all direct and indirect liability information, current and historical
information on all deposit relationships, and financial statement information.
The system's ready access to credit information
<PAGE>
assists you in making on-the-spot decisions often required to effectively serve
your customers.
Combined Statement Capabilities
CBS provides the capability to combine q) to 99 accounts on a single statement.
This feature is of significant value to today's banking consumer. The ability
to display an entire customer relationship on a single statement is also an
important tool in cross-selling bank services. Additionally CBS allows you to
report combined interest to your customers for both deposit and loan accounts.
CBS can even handle over-the-counter interest payments such as cashing U.S.
Savings Bonds. These system features help you serve your customers, meet
Federal interest reporting requirements, and save money by reducing preparation
and mailing costs.
Nine-Digit Zip Code Savings
The CIF module is designed to accommodate the nine-digit postal zip code. You
can use this capability to take advantage of the cost-reducing mail sort options
provided by the U.S. Postal Service.
Demand Deposits/Savings (Transaction Subsystem)
Today's financial institutions must build more revenue from fee-based services
as interest spread deteriorates. The Transaction Subsystem lets your bank offer
a full spectrum of transaction accounts, including: DDA, passbook, statement
savings, NOW, money market superNOW, and overdraft banking (credit line). CBS
fully supports your need to offer innovative fee-based deposit services.
Flexible
Checking and savings accounts are combined into one application, so you can
create innovative savings products to capture core deposits. This flexibility
distinguishes CBS from other DDA or savings systems.
Customer-Based
Because the Transaction Subsystem operates in conjunction with the Customer
Information File Subsystem, all customer relationships with the bank are
<PAGE>
automatically documented. Complete information is instantly available through
any terminal. This immediate access to customer records saves time and makes it
easier to cross-sell services when new accounts are opened.
Product-Driven
With the Transaction Subsystem, you can customize deposit services by combining
service charges, interest plans, and statement formats to suit your needs. You
can take advantage of every fee-based income opportunity available, while
continually increasing the quality of your customer service.
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FIserv/CBS Proposal
for Application
Software Review
The Bryn Mawr Trust Company
Operational Efficiency
The Transaction Subsystem provides for automatic extraction of unposted items
and bulk filing, thus drastically reducing the time spent on check handling and
statement preparation. Real-time information editing - during data entry -
boosts your productivity. Exception reports can be printed in a variety of
sequences, to best use the information provided. To speed up exceptions
processing, deposit account numbers are printed on unpaid item reports.
Fee-Based Services
Through the Transaction Subsystem you can input "soft dollar" charges with a
definition of service. The Transaction Subsystem can analyze assessed fee
computations and indicate balance deficiencies. The subsystem allows for 99
service-charge plans, with any combination of analysis or non-analysis plans.
Your options include: charges for debits
<PAGE>
and credits processed, local items deposited, foreign items deposited (based on
destination or quantity), balance credit tied to one of 99 index rates, reserve
percentage used, mailing fees, soft-dollar fees, overdraft fees and maintenance
fees.
Flexible Statement Processing
Up to 40 statement cycles are available, and can be distributed throughout the
month. Snapshot or cutoff statements are easily handled during the statement
cycle, as are special statements requested by customers. Fully descriptive
statements improve customer service, and up to nine copies of a statement can be
printed.
Sweep and Cash Management Services
To maintain predefined balance levels and maximize the customer's use of deposit
balances, the subsystem's cash management options allow you to automatically
move balances among related
accounts. Maximum or minimum balances, transfer increments, related accounts
and funding priorities can be defined for each customer.
General Ledger Interface
All entries related to posted or unposted items are automatically generated to
appropriate accounts, as are service charge and interest entries. Daily
reconciliation is confined to balancing and handling unposted items. To help
you measure profitability, branch deposit and income information is
automatically generated.
Increased Float Control
Time is money, when it comes to float. Uncollected funds are a drain on your
organization's profitability. Through the Transaction Subsystem you can:
o Independently age float - for bank and customer - up to eleven days
o Quickly put deposits to work earning profits
o Control Boat at account customer, and bank levels.
<PAGE>
Memo-Post Capability
Memo posting during the day cuts losses from cashed checks or savings
withdrawals. The Transaction Subsystem is unique in its ability to provide
descriptive data for each memo-posted item. As a result your customer service
operations are more efficient.
Flserv/CBS Proposal
for Application Software
Review
The Bryn Mawr Trust Company
Certificates of Deposit (Time Subsystem)
The Time Subsystem handles a wide variety of time-deposit accounts, including
certificates of deposit (CDs), time deposit open accounts (TDOAs), money market
certificates, statement savings, and retirement accounts. Through the Common
File Subsystem new products can be introduced without special programming.
U.S. Regulatory Compliance
The Time Subsystem complies with all U.S. Federal regulatory guidelines for
retirement accounts, TDOAs and CDs. As regulations change, the Comprehensive
Banking System is updated to keep you in compliance. Your staff is free to
concentrate on customer service, product innovation, growth, and profitability.
Marketing&Oriented
The Time Subsystem allows you to improve products and services quickly and
easily ... without reprogramming. New products can be created, activated, and
made available to all bank departments and branches in minutes!
Portfolio Control
The subsystem generates the reports you need for effective portfolio management,
including: interest due, renewed accounts, matured accounts, rate changes,
interest paid, rate/runoff, and gap analysis. The comprehensive portfolio
information available from the Time Subsystem helps you control interest-rate
sensitive profit margins, and effectively anticipate deposit flows and cost-of-
funds shifts.
<PAGE>
Flexible Rate Changes
The Time Subsystem handles unlimited rate changes to a certificate of deposit,
and displays all changes on the customer's statement. Certificates can be tied
to any one of 99 indexes. The rate can Boat sit the index, change at renewal or
at a review period. This feature can be applied to a single CD or an entire
product type.
Service Charging
As your income shifts from interest spread to service charges, the ability to
apply service charges to interest-bearing products becomes more important. Up
to 99 different service charge routines can tx: established within the
application and new accounts can be easily coded to use your predefined
routines. Service charging can be done between statement cycles to distribute
and regulate your institution's cash flow more evenly.
Comprehensive Reporting
The Time Subsystem produces all U. S. government reporting, including B-90
Government Reporting and Annual Retirement Account reporting. A complete
selection of accounting, audit, and portfolio management reports are produced,
as well as important liability management reports, including: maturity
forecasts, maturity analyses by date, and maturity analyses by rate.
Flserv/CBS Proposal
for Application
Software Review
The Bryn Mawr Trust Company
On-Line Inquiry and Maintenance
Because CBS is a real-time system - integrated with the other CBS subsystems -
customer inquiries can be handled rapidly and up-to-the-minute changes can be
made to customer and account information. Because account and descriptive
information is standardized, a single maintenance change (such as an address) is
automatically revised for all of a customer's accounts.
Customer Checks and Notices
<PAGE>
Any day of the week the Time Subsystem can produce checks for payment of
interest or principal. Payments can be projected and checks can be generated in
advance, to allow for mailing time. Renewal dates for CDs can be printed on the
checks. Types of checks handled include: interest checks, principal checks,
combined interest/principal checks and IRA/Keogh/SEP disbursements. Other
options include: customer notices regarding rate changes, automatic renewals,
final maturity, and overcontribution. When funds are not distributed to the
customer, debit/credit memos can inform customers of interest transferred
between their accounts.
Consumer Loans, Commercial Loans, Mortgage Loans (Universal Loan Subsystem)
The Loan Subsystem combines real estate, consumer, and commercial lending
applications into a single comprehensive module. A combined lending system
gives you increased flexibility when defining innovative lending products. CBS
gives you the capability to better serve all your borrowers' credit needs ...
and make timely and profitable lending decisions.
Flexible Loans
Your bank can create up to 999 types of loans, each with unique product
characteristics that you define. Processing parameters are internally keyed to
the type of loan, and need not be entered at the loan set-up time. The
benefits? Less tine and effort required for establishing new loans. You also
enjoy improved data consistency and accuracy.
Multiple Prime Rates
The Loan Subsystem supports up to 99 prime or rate indexes. Each prime-related
loan can vary from the prime by either a percentage or a multiplier that you
define.
Variable-Rate Loans
When dealing with prime-related notes, the Loan Subsystem allows you to change
the rates periodically. Interest rates can float with the index, change at
review or change with additional debit. These changes can be automatically
computed, based on current index rates.
Interest Accrual Methods
<PAGE>
The Loan Subsystem uses the following methods of interest accrual
o Simple
o Actuarial
o Straightline
o Rule-of-78ths
o Average daily balance.
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Flserv/CBS Proposal
for Application
Software Review
The Bryn Mawr Trust Company
Interest accruals are defined at the product level. You have complete
flexibility when defining loan products, enabling you to serve your borrower,
create unique credit services, and meet profit objectives.
Daily Accruals
Loan interest is accrued daily, including weekends and holidays. Month-end
accruals are accurate, and the income figures always give a true picture of your
loan portfolio performance.
On-Line Posting of Loan Entries
Loan payments and adjustments are instantly edited and posted. With the CBS
Loan Subsystem, your loan officers can verify customer loan payments
immediately. Loan coupons can be posted on-line, real time, or handled though
batch processing.
Multiple Payment Support
A loan can have up to nine different pre-established payment
<PAGE>
schedules, including the following payment options:
Principal and
interest
. Fixed principal plus interest due
. Principal only, with interest billed independently
. Percentage of outstanding balance
. Percentage of outstanding balance plus interest due
- Interest due only.
Full General Ledger Interface
The Loan Subsystem, along with all the other CBS subsystems, is interfaced to
the General Ledger Subsystem. All monetary activity,
including accruals, payments and charge-offs are automatically posted daily to
the General Ledger.
Credit Information Support
Through an interface with the Customer Information File Subsystem, loan officers
can instantly perform credit checks on any bank customer Available information
includes deposit account balances, credit dam, financial statements, and other
account relationships that may indicate the credit strength of your customers.
Customer Liability Reporting
The Loan Subsystem maintains complete information about your customers' direct
and indirect borrowing, including: high direct borrowing, amounts of secured and
unsecured borrowing, and amount of contingent liability. Both current and
historical data is very comprehensive, to allow you to better manage and control
credits.
Collateral Processing and Reporting
Collateral data for specific loans is reported on both management and exception
reports. Key information includes: collateral description, property address,
value, date of pricing, and CUSIP number for securities up to 99 pieces of
collateral can be
<PAGE>
described for each note. To reduce portfolio risk, your
lending officers and auditors can closely monitor and control all loan
collateral.
IA
Flserv/CBS Proposal
for Application Software
Review
The Bryn Mawr Trust Company
Delinquency Processing
The Loan Subsystem reports that track delinquent loans include collection
history, and advice of activity on past due loans. In addition, the subsystem
produces delinquency notices at userspecified intervals.
Rate Maturity Analysis
To improve portfolio management, maturing loan reports are generated on a bank-
wide and an officer basis.
General Ledger
All CBS subsystems are interfaced to the General Ledger Subsystem. This
interface ensures the accurate and automatic transfer of general ledger entries
from the Transaction, Time, Loan, and Item Processing Subsystems,
The CBS General Ledger Subsystem simplifies daily and periodic balancing,
financial reporting, and the closing of accounting periods. Like all of CBS,
the General Ledger Subsystem is an on-line information system. General Ledger
gives you instant access to the important financial information you need when
making decisions.
The General Ledger Subsystem supports:
. General Accounting
. Daily Balance Sheet and Profit and Loss Statements
. Cost Accounting
. Budgeting and Forecasting
. Account Reconciliation and Open-Item Processing
a Teller and Vault Cash Control
<PAGE>
. Management and Board Financial Reporting
. Standard Entries
a Regulatory Reporting.
General Accounting
The General Ledger Subsystem provides flexible ion processing capabilities.
Transactions can be backdated, automatically adjusting all month and year-to-
date aggregates and averages. Other options include: selective printing of
activity maximum/minimum entry and balance reporting, and numerous exception
item reporting controls. The CBS General Ledger places powerful accounting
tools - typically found in only the most sophisticated general ledger systems
within easy reach of your accounting department.
Management Reporting
The General Ledger Subsystem allows you to custom deign forty daily and monthly
reports. These reports include:
. Statement of Condition
. Profit and Loss Statement
. Yield and Cost of Funds
Statistical Report
is
Flserv/CBS Proposal
for Application
Software Review
The Bryn Mawr Trust Company
. selected
Accounts
. Source and Uses of Funds
. Management Income and Expense
Board Financial Reports.
In addition, the flexible tier reporting within CBS allows you to report from
the cost center to the holding company level.
Standard Entries
The General Ledger Subsystem automatically generates repetitive and accrual
entries. Parameters can be established to control the total amount, date range,
or frequency of
<PAGE>
entry. This greatly simplifies the processing of frequent or
recurring entries.
Teller and Vault Cash Control
General Ledger gives your institution the ability to maintain cash accounts for
each teller. Cash accounts may be grouped to provide vault or branch cash
reporting. General Ledger maintains average balances, cash overage and shortage
history, times out of balance, and other information to assist head tellers in
monitoring teller performance. The General Ledger Subsystem provides for easy
control and monitoring of teller and branch cash positions.
Control
All transactions entering the General Ledger Subsystem pass through an edit
function. The edit function ensures the accurate posting of all debits and
credits. Entries that cannot pass the edit are posted to a suspense account,
thus balancing the system automatically.
Simplified Data Entry
The entry of all new accounts, the maintenance of financial reporting, budget
preparation and the editing of monetary transactions are done on-line at a
terminal. Before posting, you are required to correct all items which do not
pass the system edit criteria. CBS provides a complete audit trail showing the
source of all entries and changes. The automatic generation of General ledger
entries by other CBS subsystems minimizes required data entry, and ensures a
high degree of information accuracy.
Cost Accounting
The General Ledger Subsystem provides for tip to 100,000 cost or responsibility
centers. You can organize cost centers into a tiered reporting structure to
--------
handle either functional or product cost accounting. CBS gives you the ability
to understand cost structures, to price products more effectively, and to hold
products and organizational units accountable for results.
Budgeting and Forecasting
The General Ledger Subsystem simplifies budget and forecast preparation.
Information can be entered on-line, or it @ be generated automatically, based on
historical trends. CBS maintains history for the current year and four prior
years. The system provides seven different methods for projecting budgets and
forecasts. Statistical techniques such as exponential smoothing and seasonal
adjustments are automatically incorporated into growth projections. You can
generate
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Fiserv/CBS Proposal
<PAGE>
for Application
Software Review
The Bryn Mawr Trust Company
projections at the account or cost center level. Multiple budgets can be built
and toed simultaneously for variance reporting. CBS gives you the capability to
generate meaningful budgets, comprehensive capital plans, and thorough financial
forecasts to guide your organization.
Reconciliation Item Processing
The General Ledger Subsystem provides for subsidiary ledger accounting and
reconciliation of
many types of items, including: official bank checks, money
orders.interdepartmental transfers,loans-in-process tickets, and other
debit/credit offset accounts. Item processing codes are included to handle stop
payments and other exception conditions. CBS simplifies the time-consuming task
of account reconciliation, while giving your organization control of those
accounts.
Open Item Processing
Similar in nature to account reconciliation open item processing allows
descriptive information to be appended to open items. The CBS General Ledger
Subsystem gives you complete control of due-to, due-from, cash item and clearing
accounts.
Safe Deposit Box
Overview
Safe Deposit Box automates all of the functions necessary for maintaining your
institution's safe deposit boxes, such as opening, maintaining, and closing
boxes. The system also enables you to past payments and refunds on-line.
System Features
The Safe Deposit Box System gives you flexibility to adjust to different
customer needs by offering the following features:
. Interfaces with CIF just as the CBS subsystems do. When you choose a
function which uses CIF information the system calls the appropriate Customer
Information function and combines the CIF procedure with the function you
choose.
. Interfaces to the General Ledger Subsystem. This feature enables you to
tie transaction codes to general ledger account numbers and cost centers by
individual branches to track rent income, taxes payable, late fee income,
------
miscellaneous fee income, and key deposits.
f Provides two separate discount code tables to allow unlimited discount
codes for Percentages and dollar amounts. This feature allows you to offer
various discounts for different customers.
. Automatically calculates the amount due, including taxes and other fees,
and generates a billing notice.
. Allows you to late-charge according to a user-defined number of past-due
days established in the Box Common File. If necessary, you may override the late
fee option at the box level.
. Allows you to apply tax to the box rental fee, and to apply different
tax rates to different customers. You may override tax at the box level for
customers who should not be taxed.
<PAGE>
. Allows you to transfer box rental fees directly from a customer's
checking or savings account.
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Review
The Bryn Mawr Trust Company
. Allows you to keep track of customers who are waiting for boxes to become
available.
. Enables you to post a variety of monetary transactions to individual
boxes within a Particular branch.
Reporting
The Safe Deposit Box System produces useful reports and customer notices
including:
. Boxes Added
. ]Rented Boxes
Closed Boxes
New Customers
Waiting List
Rent Past Due
Posting Final
Daily Maintenance
History Listing
Automatic Payment Notice Billing Notice
Past Due Notice
In addition, all Safe Deposit Box notices are designed to fit in a standard #9
envelope.
Documentation
The Safe Deposit Box System comes with a complete Processing Guide that
gives detailed instructions about how to use the various functions and print
reports. It also provides technical information such as system flowcharts,
program narratives, and file and record layouts.
On-Line Teller System
The CBS PS Teller product is a front-end teller system. For tellers, the system
provides the functions necessary to process customer accounts and to balance a
day's activity at the workstation. For supervisors, the system provides
functions to monitor teller activity, control system security, and perform daily
branch procedures.
PS Teller offers you the following features:
<PAGE>
Operations
. Interfaces to CBS for normal teller monetary transactions
. Inquiries, transactions, administrative modes
. Real-time and memo post processing
a Off-line processing and printing
. Operates in Stand-Alone mode
. CIF Inquiry resident on transaction screens
Account Inquiry resident on transaction screens
. Screen, transaction. and field help
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The Bryn Mawr Trust Company
. Screen and field edits/validations
a Default field information
. Contingent field operations
. Ability to type ahead with consistent menu functionality
. Function keys for help, calculators, repeat transactions, reverse
transactions, multiple transactions and customer information inquiry
Layered menu transactions
. Quick key transactions
Pay/Get amounts calculated
. Floor limits for on-line and off-line modes
. Customer mode to provide multiple transactions per customer (retains
cash position)
. Ability to place stops, holds, and cautions through transactions
. Screen and data duplication with one keystroke
* Copy/error correction without manual re-key of transaction
. Warnings for minimum/maximum cash drawer
. Ability to automatically display/compare station and host totals
Fee/commission calculations
Security
. Override level (teller, supervisor, officer)
* Able to set security level by teller
. Sign on to predefined menus
. Host sign-on
Calculators
<PAGE>
Cash calculator With option to activate and deactivate automatically Check
calculator
Totals
* 88 different totals
* Ability to balance to host for applicable totals
* Branch totals
* Grouped totals
* Balance sheet
Electronic Journal
All on-line transactions, response, sequence number, re-entry, and override
information
All off-line transactions, responses, sequence number, re-entry, and override
information
. Ability to maintain two places for resiliency, depending on configuration
. Retention 01-08 days
. Search previous days
Search first to last, last to first
. Search account number, transaction code, amount, time, sequence number
. Lists individual transactions
. Automated store, forward on re-entry
. Calculators stored for every transaction
. Short lit of all transactions stored in journal
1.13
FIserv/CBS Proposal
for Application Software
Review
The Bryn Mawr Trust Company
Balancing
---------
. Full electronic journal complete transaction set with host response
. Full electronic search by multiple criteria
. Batch totals with count and amount
. Cash drawer count with automatic cash overage/shortage calculation
Peripheral Support
. Validation/journal: receipts, checks, tickets, journal tape
. Passbooks
. Shared document printers
Voice Response
<PAGE>
Flserv Voice Response links CBS to the same automated voice response system
currently being used by BMTC-the InterVoice RobotOperator. Now running under
OS/2TM, the InterVoice RobotOperator offers expanded access- up to 32 lines -
plus innovative PC-based remote diagnostics capabilities for your support staff
and remote account access for your customers.
Using a standard touch-tone telephone, your clients can retrieve all their
account information, including balances, interest rates, and loan payment
information. They can also perform transfers, receive account statements via
fax and access their account information through a personal computer. You can
even offer hearing-impaired clients access to their account information.
All this is possible because Flserv VoiceResponse maintains a strong, real-time
bridge between CBS and RobotOperator, giving customers access, via the
---
telephone, to all the information you've already gathered in CBS.
Access to CBS Customer Information
Taking full advantage of CBS features, Flserv VoiceResponse combines the power
and convenience of voice response technology with fully-customizable controls.
The RobotOperator answers the phone, routes calls, and accesses CBS to give your
customers real-time information in a clear, human voice. What's more, you can
restrict access to account functions to tailor your voice response offering to
reflect your organization's policies. To get your system up and running
quickly, you'll receive a script designed specifically for CBS. This script
maps out the paths your customers will take to access their accounts, and can be
extensively customized for your organization's needs. Flserv CBS Division and
InterVoice have worked together to tailor this script specifically for CBS
users.
Key Benefits
Automatically answer and direct routine calls
. Answer calls on the first ring, 7 days a week, 24 hours a day, and never
put calls on hold
Answer customer questions automatically, in a high quality, human voice
. Provide accurate and reliable CBS information consistently
. Redeploy present personnel to more productive work
Transfer calls when personal assistance is necessary
I.14
FIserv/CBS Proposal
for Application Software
Review
The Bryn Mawr Trust Company
. Offer remote, PC-based account access to customers
0 Employ remote diagnostics to simplify system support FIserv VoiceResponse
Features: 24-
<PAGE>
Hour Access to Customer Accounts
. Access to all types of accounts
. Current interest rates
. New product offerings
. Non-customer access
. Payment request
. Access to multiple accounts
. Multiple security access methods (Social Security number, account number,
or userdefined)
. ATMLocator Tm, enabling customers to query the system for the nearest ATM
location
Demand Deposit Information
. Available balance or linked accounts
. Checks and debits paid history
a Deposits and credits history
. Pending deposits or checks
. Specific checks by number and amount
a Account transfers
a Merchant verification
. Statement requests via fax
. Stop payment requests
a Multiple account access
Savings Information
- Available balance on all linked accounts
- User-defined number of last withdrawals and debits
- User-defined number of @ deposits and credits
- Pending deposits or withdrawals
- Specific withdrawal by amount
. Specific deposit by amount
Interest paid information
Real Estate and Consumer Loans
- Balance information
. Current interest rate
- Tax information
- Last payment information
- Next payment due
<PAGE>
I.15
Flserv/CBS Proposal
For Application
Software Review
The Bryn Mawr Trust Company
Certificates of Deposit
- Current balance
- Redemption value
o Interest rate
a Maturity date
. Interest paid information
a Interest payments
Current Interest Rates
- Checking accounts
. Savings accounts
- Certificates of deposit
- Consumer loans
- Real estate loans
Estimated.Loan Payments
* New automobile loan
* Used automobile loan
* Real estate loan
Hardware and Software Components
Flserv analyzes your organization's specific needs, including number of lines,
script requirements, and network configuration and prepares a customized
hardware upgrade recommendation.
Asset/Liability Management
The Sendero Data Solutions package is a PC-based system for preparing data for
use in their asset/liability management models. The CBS interface provides a
way to extract data from CBS and input it into the Sendero Data Solutions
package for processing and use with their asset/liability models.
The Sendero interface offers the following features:
. Interfaces with the Sendero corporation s Data Solutions data management
package. This data can then be used with a variety of Sendero asset/liability
management models.
<PAGE>
. Enables you to automatically extract account and customer information
from CBS, such as mortgage loan data, installment loan data, commercial loan
data, time deposit data, deposit account data, and general ledger data.
. Downloads the selected data directly to the PC.
. Runs with little user input, requiring intervention only for selecting
the data files you want to extract, and for loading those files into the Sendero
Data Solutions package.
116
FIserv/CBS Proposal
for Application
Software Review
The Bryn Mawr Trust Company
The Sendero Asset/Liability Interface comes with an Interface Guide that
describes the procedures and functions necessary to use Sendero's
asset/liability package with CBS. It also provides technical information such
as system flowcharts, program narratives, and file and record layouts for
interface programs.
TFR Report Preparation
The Call Reporting Interface interfaces to the bank's DPSC Call Reporter 11
package that is designed to help with the completion of the quarterly Call
Report and other required government reports.
The CBS interface provides a way to automatically extract data from CBS and
input it into these packages for processing. The interface minimizes the amount
of manual input required to complete a quarterly report.
The Call Reporting interface offers the following features:
. Interfaces with DPSC's Call Reporter 11 and Sheshunoff's Call Reporter
packages.
. Automatically ex@ the required data from the CBS General Ledger and
other applicable subsystems.
a Creates an extract file that can be downloaded to a Call Report package for
processing.
. No need to reprogram your extract program if regulatory agencies make changes
to call reporting requirements.
<PAGE>
The Call Reporting Interface comes with an Interface Guide that describes the
procedures and functions necessary to use DPSC's Call Reporter 11 or
Sheshunoff's Call Reporter package with CBS. It also provides technical
information such as system flowcharts, program narratives, and file and record
layouts for interface programs.
Account Reconciliation
The CBS Account Reconciliation System automates every aspect of the
reconciliation process, such as extracting ions from CBS, posting the
transactions to the appropriate reconciliation accounts, performing
reconciliation, and generating statements. This system also enables you to
create an issued item tape for your corporate customers.
I.17
Flserv/CBS Proposal
For Application Software
Review
The Bryn Mawr Trust Company
System Features
Account Reconciliation offers you the following features:
* Allows you to establish four different types of reconciliation accounts:
1) reconcile issue and paid transactions 2) reconcile paid transactions only 3)
reconcile issue transactions only 4) track deposits made to a DDA account.
. Allows you to define the CBS transaction codes that the Reconciliation
System will consider "issued" and "paid" transactions.
. Allows you to input transactions from an item issue tape, disk, or file.
. Provides maintenance functions that enable you to add new information
and maintain existing information for a reconciliation account, such as account
processing information; the total number and amount of issue or paid
transactions; issue and paid information for a particular transaction.
. Provides inquiry functions that enable you to view present and prior
period information for a reconciliation account, such as account processing
information; the total number and amount of issue or paid transactions; issue
and paid information for a particular transaction.
<PAGE>
. Allows you to create an output tape containing paid items for your
corporate customers who reconcile their own checks.
. Allows you to define a unique reconciliation statement cycle or use the
account's existing DDA statement cycle.
. Automatically reconciles accounts and generates the appropriate
statements.
Allows on-line transaction posting and balancing.
Reporting
The Account Reconciliation System produces useful reports including:
. Maintenance Reports
. Extracted Transactions Journal
. Rejected Transaction Journal
. Customer Report
. Prior Period History
. Posting Journals
. Exception items
. Customer Activity Summary
Account Detail Report
I.18
Flserv/CBS Proposal
for Application Software
Review
The Bryn Mawr Trust
Company
. Voided items
. Stopped Items
. Reconciliation Statement
. Voided Items Statement
0 User-defined Statement
Documentation
The Account Reconciliation System comes with a complete Processing Guide that
gives detailed instructions about how to use the various functions and print
reports. It also provides technical information such as system flowcharts,
program narratives and file and record layouts.
ATM Support
<PAGE>
The CBS ATM Solution, developed by FIserv CBS Division, offers powerful
transaction authorization and card management features for the diverse needs of
CBS users. Most importantly, the CBS ATM Solution seamlessly integrates these
features with CBS. FIserv also provides customized services for the development
of switch interfaces or ATM drivers, depending on the needs of your
organization.
Transaction Authorization System
The transaction authorization component of the CBS ATM Solution operates in a
real-time environment, verifying the card status, user-defined daily card
limits, account status, and available balance using the same real-time data
-----
available to a teller. During nightly processing, the system uses a memo-post
file to approve and record transactions.
Before the host is taken off-line for the nightly update, a memo-post file
containing each ATM account's present account status and available balance, is
passed to the Transaction Authorization System. This information is then used
to approve transactions until the host is brought back on-line. All
transactions that have occurred are then passed to CBS.
Authorization Features
Authorizes transactions in an on-line, real-time environment
. Moves a memo-post file for authorization use before nightly processing
begins
Forwards stored transactions when the host is brought back on-line o
Passes point of origin data for assessing fee transactions
Service charge may be assessed at time of transaction or accumulated for
assessment when
statements are generated
Passes hold information for POS pre-authorization transactions
. Assigns float based on a deposit's point of origin
. Supports inquiry, deposit, withdrawal and transfer transactions on
checking and savings accounts
. Supports payment and advance transactions to/from loan, checking, and
savings accounts
. Identifies transactions as ATM or POS in on-line account history
. Provides capability to apply overdraft protection to either POS, ATM, or
both types of transactions
I.19
Flserv/CBS Pro@al
for Application Software
Review
The Bryn Mawr Trust Company
Prints host balancing reports which simplify ATM balancing
Shows total number of loan transactions processed through an ATM on the loan
workstation balancing report
<PAGE>
Processes credit card ATM transaction amounts to general ledger account for
settlement purposes.
Card Management System
The heart of the CBS ATM Solution is an AS/400-based comprehensive ATM and debit
card management system. With the CBS Card Management System you can use CBS fee
programs to assign service charge plans, link multiple accounts to a single
card, and access a customer's accounts by swiping their card. In addition,
because of its seamless integration into CBS, cardholder set-up, maintenance,
and inquiry activities are handled from within current CBS subsystems structure.
Card Management System Features
. Link up to 99 accounts per application (savings, DDA, and loan) to a single
card
. One savings, DDA, and loan account is designated as primary and may be
accessed at non-proprietary ATMs
. Secondary accounts may be accessed at proprietary ATMs
. Accounts linked as secondary are automatically unlinked when they are
closed
. (Cardholder set-up is incorporated into the new account functions of CBS
for savings, DDA, and loan accounts
* Up to nine customers may be linked to a single card number by utilizing
member numbers
. Cardholder set-up, inquiry and change screens for existing customers are
seamlessly integrated into CBS
. The cardholder screens include a memo screen for free-form notes/memos
-------
. Cards may be swiped in a card reader to access a customer's accounts
. Accounts may be accessed by entering the card number or customer's
name
. On-line inquiries may be made to determine if an account is linked to a
card, how it is linked, and to identify all other cards linked to that account
. Along with the card data, the CEF primary or customer alternate address
data may be automatically downloaded Ag a cud embosser
. PIN numbers may be automatically or manually generated
. Cards nay be automatically reissued based on term or expiration date and
a card fee may
be assessed for reissued cards
. An annual card fee may be assessed even if the card is not reissued
. CBS service charge plans may be used to assess ATM fees
. For a user-defined period, a card history of all ATM and POS
transactions is retained, including transactions that were not approved
. Card numbers may be automatically or manually generated
. The system supports multiple ISO numbers with up to 35 different card
types per ISO number
User-defined daily card limits determined by card type
. The system supports both single and mufti-bank holding companies.
<PAGE>
Flserv/CBS Proposal
for Application Software
Review
The Bryn Mawr Trust Company
Regulatory Compliance
Transactions involving an ATM or POS device must comply with Regulation E and
Regulation DD. The CBS Card Management System allows input of Regulation E-
required transaction descriptions for proprietary ATM transactions. The system
also captures non-proprietary ATM and POS Regulation E information for inclusion
on the customer's statement. Regulation DD requires that service charge
descriptions be printed in the customer disclosure documentation and on the
customer's account statements. To comply with this requirement, this service
charge information is automatically included when CBS generates the customer
statement.
Switch Interfaces
Flserv CBS Division has developed multiple switch interface modules that are
then customized to handle any unique business needs.
ATM Drivers
Flserv CBS Division will contract to provide ATM drivers for proprietary
ATMs under the control of the Transaction Authorization System. These drivers
are customized to meet your specific needs.
Flserv/CBS Proposal
for Hardware/Performance Considerations
The Bryn Mawr Trust Company
11. Hardware/Performance Considerations
This section contains detail specifications regarding the various hardware
components of the proposed Flserv/CBS solution. The financials associated with
the hardware described in this section have been carried forward to the
financials section VI of this proposal.
System Performance Considerations
---------------------------------
As part of the "value add" by acquiring the AS/400 from Flserv, we are willing
to commit to specific system performance criteria for the CBS System and the IBM
AS/400. The performance provisions associated with the AS/400 will be as
follows:
Flserv will provide BMTC performance test results. prior to conversion, which
meet or exceed the following criteria:
<PAGE>
(1) "End of Day" batch processing not to exceed x hours (based on "X"
accounts).
(2) Average processing of on-line transactions, with up to "X" devices, in not
more than 2 seconds locally. Two to five (2 -5) seconds remote which is
directly dependent on communication equipment and line speed.
The conditions under which these test results can be duplicated are as follows:
a) BMTC's acquisition of the recommended AS/400 configuration from Flserv.
b) Operation of the CBS System in accordance with Flserv's CBS System
documentation.
C) Approved memory and machine configuration parameters.
Disk capacities maintained under an eighty percent (80%) total disk saturation
level.
e) Batch jobs are not run concurrently in the same memory and machine pools
with interactive jobs.
f) Communication line speeds are not less than 19.2 KBPS.
g) The AS/400 is operated utilizing version V3R0.5 or equivalent operating
system and the test is developed utilizing CBS release 940 1.
h) Account mix does not exceed fifty percent (50%) transaction accounts,
twenty-five percent (25%) time accounts and twenty-five percent (25%) loan
accounts.
"End of Day" processing is to be measured exclusive of time required for
--
statement processing, backups and report production.
These would be the @s of provisions we would like to incorporate in the final
agreement. We are willing to refine the wording to ensure BMTC and Flserv are
comfortable with all of the performance terms.
Flserv/CBS Proposal
for
The Bryn Mawr Trust Company
111. Product Issues
Product Issues
<PAGE>
I LOC Rate Change Back
--------------------
prime rate changes to the beginning of the current cycle. This is a major
modification to the CBS System which will require approximately 200 staff days
of effort. This is a "day I " modification and will be provided at no charge.
2 . Payment Factors for Credit Lines - The CBS System could be modified to
--------------------------------
allow the usage of "payment factors" when calculating a monthly loan payment
against personal lines of credit and older home equity lines of credit. This is
a medium modification to the CBS System which would require approximately 40
staff days of effort. This is a "day I " modification and will be provided at
no charge.
3. The CBS System can be modified to support the ability for an overpayment on
a loan payoff to be credited to the loan, reported, and an overpayment
adjustment processed as the overpayment is refunded to the customer. We
estimate this modification will require approximately 30 staff days of
effort. This is a "day 2" modification for which BMTC will pay S 1 8,000.
4 . a. The CBS 9501 (March 1995) Release will provide enhanced payment
processing. Features include::
---------
- The ability to establish payment posting priority at the product
level.
- Short and excess payment options.
- Restore original billing bucket information for payment and payoff
reversals.
- Allow payments to be posted in advance of the payment due date.
- Default transaction and spread codes for current and delinquent
processing.
b. Unapplied Payment Bucket - The CBS System could be modified to allow
------------------------
for an unapplied payment bucket, thus allowing for partial payments to
accumulate until a complete payment has been reached and then automatically
apply this to the individual loan. This is a "day I " modification and will be
provided at no charge.
5 . Fastcloser Interface - This interface would be written in conjunction with
----------
the CBS Platform interface currently included in the financials found in section
VI of this proposal. This is a "day 2" modification and will be provided at no
charge.
6. HMDA Software Interface - We an: currently not able to size this interface
--------------
due to a lack of information available from the FDIC. We are awaiting
information from the FDIC regarding file layouts and our ability to access
the FDIC HMDA software. If in fact this can be obtained, this is a "day 2"
modification for which BMTC will pay $3,000.
- The CBS System could be modified to allow the bank to back date
Flserv/CBS Proposal
for
The Bryn Mawr Trust Company
Product Issues
<PAGE>
7. Collateral Repricing - The CBS System supports automated collateral
--------------------
repricing, i.e. receipt of CUSIP information from an automated reporting
service for use in automated repricing of traded securities being utilized
as collateral. While this facility exists, we currently are not aware of
any CBS customers which are subscribing to this service.
The following costs for this service was obtained from Merrill Lynch (Dana
Bassiaco (212) 449-3909). BMTC must purchase Merrill Lynch's "Relay Gold"
software for $300.00. BMTC will pay 5 cents per CUSIP record the bank needs for
their respective update. There is an annual minimum fee of $5,000.00.
8. Credit Line Limitations - Release 9401 (August 15, 1994) removed the
-----------
restriction of nine available credit lines. There is currently no
restriction on the number of credit lines available.
9. Non-accrual and Charge-off Accounting - The-9501 (March 1995) release of
-------------------------------------
the CBS System will provide for fully automated non-accrual/charge-off
accounting capability.
10. Construction Loans - The CBS System could be modified to support Bryn
------------
Mawr's requirements for construction lending. The modification would 1)
provide tracking at the unit level for committed amount, funds disbursed,
funds available and funds repaid, 2) customers would be billed for interest
only each month at the account level, 3) provide the ability for a
commitment within a commitment, and 4) produce a construction advance
request form. This modification is estimated to be medium in nature and
would require approximately 40 staff days of effort. This is a "day I"
modification for which BMTC will pay $20,000.
II. Dealer Draft for Early Payoff Refund - The CBS Loan System is able to draft
------------------------------------
a dealer's account automatically for the dealer reserve due back to the bank in
the case of early payoff. This is accomplished based on the value entered for
the dealer-level excess prepaid instruction field. R Get from Dealer Remittance
Account or H = Get from Dealer Holdback Account. The dealer remittance balance
is debited when a loan with prepaid dealer/reserve interest pays off before the
reserve/interest has been earned.
12. Backroom Systems Software Interface - The interface to the Backroom Systems
-----------------------------------
applications will be provided as a "day I " modification at no charge.
13. Account Analysis Statement Regeneration - The CBS System could be modified
---------------------------------------
to allow for adjusting the individual line items within an analysis
statement, recalculating the appropriate charge and reproducing the
analysis statement. This is a "day 2" modification and will be provided at
no charge.
14. Cash Management Product Line - As we have discussed, Bryn Mawr's current
----------------------------
cash management product offering is heavily dependent on the services being
offered through Mellon Bank. This is particularly true as it relates to
multi-bank reporting, multi-bank cash concentration, multi-bank remote
funding, etc. The most significant effort related to replicating this
current product offering is interfacing to an appropriate information
source in order to obtain access to account information serviced through
other financial institutions. We are currently investigating the sources
from
<PAGE>
111. 2
FIserv/CBS Proposal
w
The Bryn Mawr T@st Company
Product Issues
which this information can be obtained, however, do not have all of the
information available at this time. As an interim solution. i. e. if an
appropriate information source could not be found or developed prior to
conversion, we will provide Bryn Mawr Trust with an interface between the CBS
System and the current Mellon product which will enable the bank to continue
offering its present offering. This interface, and any required modifications,
will be provided to the bank at no additional charge.
Overdraft Processing
---------------------
a) The CBS System can be modified to allow Bryn Mawr Trust to suspend or "hold
over" an overdraft item until the following day. We estimate this modification
will require approximately 40 staff days of effort. This is a "day I "
modification for which BMTC will pay $2 1,000.
b) The CBS System can be modified to allow tiered pricing of overdrafts. This
is a "day I" modification for which there will be no charge.
I The CBS PS Teller Subsystem can be modified to support displaying checks
which have a stop/hold by either check number or dollar amount versus displaying
all checks. This is a "day 2" modification for which there will be no charge.
17. Currency Transaction Re m - After extensive review of the requirements
-----------------------
necessary to extend our support for Currency Transaction Reporting, we have
concluded it is not feasible to enhance the CBS System to support this
added functionality. Therefore, we are recommending the implementation of
the Regulatory Assistance Center, Inc. suite of products (i.e., Currency
Reporting Control System) to complete the requirements in this area. The
cost for these systems range from $7,500 to $35,000 based on modules
selected. Interfacing to these systems is a "day 1" requirement for which
BMTC will pay $10,000.
18. Bank Card Limits - The CBS System can be modified to allow for setting
----------------
different daily bank card withdrawal limits at the individual card level.
We estimate this modification will require approximately 20 staff days of
effort. This "day I" modification will be provided at no charge.
Safe Deposit Box Numbers - At the time of conversion, the existing
------------------------
alpha/numeric safe deposit box numbers will be converted to a user-defined field
and used for printing on all customer notices. This is a "day 2" modification
for which BMTC will pay $6,000.
20. Bill Paying - We are currently researching a number of vendors in
-----------
cooperation with InterVoice. The current vendors being reviewed are Servantis
Systems, Inc., Personal Transaction Teller (PTT), and
<PAGE>
U.S. Order Bank Plus products. Once this review has been completed and a
decision made, we will begin the development process to ensure the integration
between the CBS System, InterVoice and the chosen bill paying vendor. We will
agree to provide this "day 2" interface to the bank for no additional charge.
III. 3
Flserv/CBS Proposal
for
The Bryn Mawr Trust Company
Product Issues
Telephone Banking - There have been four modifications identified which would
-----------------
need to be made to the CBS Voice Response System. The four modifications,
pricing and/or status are as follows:
Future Date Transfers Between Accounts - This "day I" modification would require
--------------------------------------
approximately 75 days of effort and BMTC has agreed to pay $22,500 for this
modification.
b) Give a Per Diem Figure on Loan Payoffs - This "day I " modification would
--------------------------------------
require approximately 40 days of effort and BMTC has agreed to pay $14,000 for
this modification.
c) The CBS System could be modified to allow transaction history to be
requested by entering a specific date or a date range. We estimate this "day I
" modification will require approximately 30 staff days of effort and BMTC has
agreed to pay S 1 6,000 for this modification.
d) Use of the "Whisper" Feature - This "day I " modification would be provided
----------------------------
at no additional charge.
<PAGE>
Duplicate Social Security Numbers - The CBS System can be modified to produce a
---------------------------------
report which identifies duplicate social security numbers. This is Et "day 2"
modification for which BMTC will pay $5,01
23. W-8's - The CBS System will be modified to produce W-8's. This "day I"
-----
modification will be provided at no charge.
24. Member Banker Identifier - The CBS System can be modified to display Bryn
------------------------
Mawr Trust's member banker number on the appropriate point of entry screens
This is a "day 2" modification for which BMTC will pay $27,000.
25. The following information is further clarification of the costs associated
with file
transmission/receipt and tape hand-off/receipt for the identified 3rd party
organizations. Flserv/CBS will provide appropriate BMTC pre-conversion training
and initial set-up support (at no additional charge) for the following 3rd party
organizations.
Loan Coupons - Installment and Mortgage Loans
NCP
Gary White
5200 E. Lake Road
Birmingham, Alabama
(205) 849-5200
NCP can receive from the CBS system information on 9 track tape, 3480 cartridge,
diskettes, or file transmission. Other than actual coupon costs, standard
mailing costs or a $5.00 transmission hookup charge will be incurred. Frequency
of delivery/transmission is controlled by the bank.
111. 4
<PAGE>
Fiserv/CBS Proposal
The Bryn Mawr Trust Company
Product Issues
Credit Bureaus:
Trans Union
760 W. Sproul Rd.
Springfield, PA, 19064
Bill Murphy (610) 690-3171
Trans Union will only work with 9 track tape. Monthly updates are encouraged of
which no charges are incurred except for mailing costs.
CBI - BMTC's contact Lisa Mendleson at (412) 781-7360 turned out to be a
disconnected number
TRW
CBA Information Services
111 Woodcrest Road
Cherry Hill, NJ 08003
Sam Munroe 1-800-248-0470
We are still awaiting a return call from Sam.
Special Tape for Home Owners Insurance Verification
Van Wagenen and Company
1100 Bircher Blvd. Suite 3 1 0
Wyomissing, PA 19610
Dennis Walsh 1-800-346-9713
This will be a monthly update from the CBS Loan Subsystem. There is no tape fee
assessed by this company. Mailing costs will be BMTC's expense.
Consumer Life and A&H Insurance
Currently BMTC is using John Hancock Mutual Life Insurance Co. If the bank
chooses to change insurance companies, we will be happy to contact any others
chosen by the bank. John Hancock currently receives 9 track MM only on a
monthly basis and does not charge for this service.
FIserv/CBS Proposal
<PAGE>
for
Implementation
The Bryn Mawr Trust Company
IV. Implementation
A Preliminary Project Plan for the BMTC implementation is included at the end of
this section and reflects an October 1, 1994 start date and an April 27, 1995
conclusion of the CBS transition.
The major steps in the implementation process are as follows:
I . Executive Overview and Project Planning Session - On-Site
This task will be completed within two to three weeks of contract signing. It
will be performed by the Project manager or another Delivery Services Manager
-------
and the CBS sales executive. The duration will be from 2 to 3 days depending on
the requirements of the project. The purpose of this session is (1) to outline
the effort and resources required for a successful CBS implementation along with
a clear explanation and understanding of the tasks and the major milestones to
the senior management and the core conversion team of the institution and (2) to
------
plan the project and the detail tasks required by the client and CBS.
2. Operations Audit
This phase of the project consists of a review of audit forms, any special or
exceptional circumstances or procedures currently being utilized A review of
third party interfaces and/or vendors will also take place. This is a I to 2
day session and is typically combined with the common file workshop/creation.
The tasks that make up this phase will take place in Orlando and/or at the
client site based on mutual agreement of CBS and the institution. This phase
will involve the project manager, team bank analyst as warranted, the client
core conversion team and
client staff.
3. Common File Workshop/Creation
This phase of me project consists of client reading assignments (Common File
Documentation manuals), common file overview and walk-through, identification
and creation of common file parameters and definition of translation tables.
This phase of the project takes approximately 4 to 8 weeks to complete, although
the face to face activity of this event takes between 3 to 5 days based on the
requirements of the project. The tasks that make tip this phase will take place
in Orlando and/or at the
<PAGE>
client site based upon mutual agreement. This phase
will involve the project
manager, team bank analysts, programmer analyst as warranted, the client core
----------
conversion team and client staff.
4. Application Training - Train the Trainer
This phase is completed approximately 60 to 120 days prior to the conversion.
IV.1
FIserv/CBS Proposal
for
Implementation
The Bryn Mawr Trust Company
This phase of the project consists of formal classroom hands-on training in the
functions and day-to-day operation of CBS (new customer/account set up,
maintenance, monetary transactions etc.). This phase of project takes
approximately 2 to 3 weeks based on the requirements of the project and is
broken into major applications (CIF, Time and Tran Subsystems 5 days/CEF, Loan
Subsystems 5 days and General Ledger 3 days). This phase is typically Orlando-
based and is performed by the Application Services Area and involves the Client
core conversion team and/or designated trainers.
5. CBS System Operator Training and Environment Setup - On-Site
This task will be completed approximately 90 to 120 days before the conversion.
It will be performed by a programmer/analyst from the project team. The
duration will be from I to 2 days. The purpose of this phase is to (1) @ the
client in the high level functions of the AS/400 (e.g. job queues, spool queues,
job control etc.) and (2) train the client in the functions of the daily running
of CBS from a computer operations perspective. This includes a hands-on batch
run of PCOMBDAILY (Daily Update) including a review of the job control and a
high level review of the job How and P) set-up an environment that the (:Rent
can continue to run daily updates with a data base that contains their specific
products and services to practice the daily operation, build internal bank
procedures, build balancing procedures, review available reports for report
distribution purposes and learn the work flow of CBS.
6. Conversion Specifications and Program Construction/Testing
This phase of the project consists of writing conversion specifications from the
data gathered in file analysis, common file workshop activities and operations
audit questionnaire and translated into program code and tested. This phase of
the project takes approximately 8 to 16 weeks based of the requirements of the
project. This phase will involve all members of the CBS project team, the
client core conversion team and client staff.
<PAGE>
7. Quality Acceptance and Daily Testing
This task will be completed 5 to 10 days prior to the on-site data verification
phase. This phase of the project consists of file, on-line and report review
and the processing of a daily update (PCOMBDAILY). This phase of the project
takes approximately 2 to 3 weeks based on the requirements of the project. This
phase will involve all members of the CBS project team.
S. Data Verification - On-Site
This task will be completed approximately 20 to 40 days before the conversion.
This is the phase of the project when the institution has the opportunity to
review and approve the converted data. This will be performed by the project
-------
manager, the team banking analysts and 1 to 2 programmer analysts. The
duration will be from 3 to 5 days depending on the requirements of the project.
The purpose of this phase is to fine tune and finalize the conversion programs
and have them positioned to be in a lock down state approximately a week after
the data verification stage. Other activities include file review, finalization
of Common File parameters, conversion reports
IV.2
Flserv/CBS Proposal
for
Implementation
The Bryn Mawr Trust Company
review, system to system balancing sign-off, set-up of environment for
PCOMBDAILY processing of converted data, statement validation and sign-off,
service charge validation and sign-off, interest plan validation and sign-off.
9. Conversion Readiness Phase
This task will completed approximately 20 to 40 days before the conversion,
but after the data verification. This is the phase of the project when the
institution has the opportunity to review the processes and tasks associated
with work flow, balancing, full item processing testing and the functions
learned during the system operator class and apply them to the converted data.
Setup of the environment for PCOMBDAILY processing of converted data, statement
validation and sign-off, service charge validation and sign-off, interest plan
validation and sign-off will all take place at this time. These tasks are
performed by the client conversion team and staff with phone and ECG support and
consultation by the project team.
10. "LIVE CONVERSION" - On-Site
This is the phase of the project for the production implementation of the CBS
software. The old system is cut off after a Thursday processing cycle,
converted to CBS, balanced, data approved and Friday's work will then be
processed. This is performed by the full project team and any additional
Transaction Delivery Personnel or Application Services Personnel deemed
necessary based on the requirements of the project. The duration will be from 6
to 8 days including the weekend. Full
<PAGE>
conversion and application support is provided during this phase.
IV.3
Flserv/CBS Proposal
Flserv/CBS Support
The Bryn Mawr Trust Company
V. Flserv/CBS Support
The Flserv/CBS Division will provide a full complement of services to support
BMTC's utilization of the CBS system. The types of services provided are as
follows:
* Training and Education Services Package
* Twenty four hour a day, seven day a week help desk support
* Systems engineering support
* Custom programming services
* On going software enhancement support
* An active user group
Training and Education Services Package
---------------------------------------
As we have discussed recently, a customized education "package" needs to be
proposed for BMTC. This package would include Orlando-based pre-conversion
training, supplemental pre-conversion on-site training, on-going release
training and advanced training. We would proposed the following scenario
against all of these components:
a) Orlando-Based Pre-Conversion Training - Based on approximately fifteen (15)
-------------------------------------
class days within our pre-conversion training curriculum the proposed package
will allow for BMTC to receive seventy-five (75) student days of Orlando-based
pre-conversion training. This approach would enable BMTC in conjunction with
the CBS Project Manager and Training Manager, to determine the right number and
skill sets of the personnel to attend the individual classes.
<PAGE>
b) Supplemental Pre-Conversion On-Site Training - We would propose including in
--------------------------------------------
the training package a provision for BMTC's internal pre-conversion training to
be supplemented by up to ten (10) days of on-site training conducted by members
of the CBS Training Institute. The actual content and scheduling of this
training would be mutually agreed to by members of the BMTC project team the CBS
Project Manager and the Training Manager.
C) On-Going Release Training - FIserv CBS offers release training associated
-------------------------
with the approximately two (2) system releases performed on an annual basis. We
would propose including in this initial training package a provision which
allows for BMTC personnel to attend the 1995 release training in Orlando. This
provision would include allowing BMTC to attend up to twenty (20) student days
of Orlando-based release training in 1995,
d) Advanced Training - The CBS Training Institute periodically offers training
-----------------
in advanced utilization of various Features of the CBS System. We would include
in the proposed training package a provision for BMTC personnel to attend up to
fifteen (15) student days of Orlando-based advanced training in 1995.
V.1
Flserv/CBS Proposal
for
Flserv/CBS Support
The Bryn Mawr Trust Company
The ""list" price for this proposed training package is $70,000. We would
propose to offer this program to BMTC for the discounted price of $18,750 plus
the reasonable travel and living expenses associated with FIserv personnel
performing activity on-site at BMTC.
Given the importance of a having a fully trained and knowledgeable organization
of the CBS capabilities, we would recommend establishing in 1996 art annual
budget of $25,000 for on-going training tuition and associated travel expenses.
This budget will allow appropriate Workshop Training for two releases per year,
Specialty training, and Advanced training sessions.
Twenty Four Hour a Day, Seven Day a Week Help Desk Support
------- ---------- -----
Flserv/CBS provides technical software and hardware support seven days a week,
24 hours a day 7 days a week. CBS problem resolution is handled through the CBS
help desk, a toll-free number available Monday through Friday, 8:30 a.m. - 5:30
p.m. EST. The CBS Help Desk uses operators to gather problem information and
routes calls to the appropriate member of the Application Services Group.
Critical problems are taken immediately by the Help Desk and handled
accordingly; non-critical requests are called back in 2 hours.
<PAGE>
Flserv/CBS's policy regarding nonconformity's is as follows:
Level One Priority - Any nonconformity that renders the CBS System inoperative.
Flserv will immediately allocate resources to resolve the problem. If the
problem cannot be solved using Electronic Customer Support over the phone,
Flserv will dispatch personnel to the BMTC site. All efforts will be made to
resolve the problem within twenty-four (24) hours of BMTC having reported the
problem.
Level Two Priority - Any nonconformity that has significant customer impact or
affects existing regulatory compliance requirements. This includes problems
involving calculations of interest, charges, fees, balances, etc and the
accurate disclosure of this information on customer Statements and notices.
Flserv will make every attempt to resolve the problem within forty-eight (48)
hours of the problem report. The resolution may involve development of a
procedural change or delivery of site-specific code. If appropriate, a code
solution will be developed and delivered to the entire customer base with the
next point release.
Level Three Priority - Any nonconformity that has significant impact on
the ability of the bank to perform its normal business functions and for which
there is no simple procedural change available.
FIserv will make every attempt to resolve the problem within five (5) business
days of the problem report The resolution may involve development of a new
procedural change or delivery of site-specific code. If appropriate, a code
solution will be developed and delivered to the entire customer base with the
next point release.
V.2
Flserv/CBS Proposal
for
Flserv/CBS Support
The Bryn Mawr Trust Company
Level Four Priority - Any nonconformity that negatively impacts the ability of
the bank to perform its normal business functions, but for which there is a
relatively simple procedural change available.
Flserv will communicate the procedural change to BMTC within five (5) business
days of the problem report. Any long-term code solution required will be
developed and delivered with the next base release that is still open for
development changes.
Level Five Priority - Any nonconformity that is of minor or cosmetic
significance.
Flserv will track the existence of these problems and make every attempt to
resolve them in the
<PAGE>
next appropriate CBS release.
Systems Engineering Support
---------------------------
In consideration for BMTC purchasing their IBM AS/400 computer system and
peripherals from Flserv, Inc., FIserv/CBS will provide the following systems
engineering services at no additional charge other than reasonable travel and
living expenses associated with Flserv/CBS personnel performing work at BMTC's
location.
1. Project Scope and Definition
9 Requirements
o Schedule
o Ancillary Vendor Selection
* Resource Identification
II. Physical Site Planning
o On-Site Analysis
9 Facility Synopsis
* Electrical Requirements
9 Air Conditioning Requirements
o Fire Protection
o Physical Security Analysis
o Equipment Layout
III. Hardware Installation and Set-Up
Assist IBM and Customer in installation of all equipment
Implementation of ECS link
IV. System Software Installation
Initial System Software Load
Coordinated Release of applicable IBM updates and PTF's
V. System Configuration and tuning
o Subsystem Configuration Consultation
o Local Device Configuration Consultation
* Remote Device Configuration Consultation
<PAGE>
V.3
Flserv/CBS Proposal
for
Flserv/CBS Support
The Bryn Mawr Trust Company
VI. System Security and Profiles
o User Profile Analysis Consultation
o User Profile Log Consultation
* User Profile Set-Up Consultation
o System Security Set-Up Consultation
vii. Backup and Recovery
Analysis of implementation of procedures
Programming of unique daily procedures
viii. Disaster Recovery
o Hardware and facility analysis o Disaster test assistance
Custom Programming- Services
-------------------
BMTC will have a three tiered strategy to address custom programming
requirements.
I . BMTC Custom Programming.
BMTC will have access to the CBS source code. Therefore, if appropriate, BMTC's
on-site programming staff can make any necessary program modifications. Retro-
fit of these custom enhancements will be the responsibility of BMTC unless
otherwise arranged through FIserv/CBS professional services support.
2 . Flserv Custom Programming.
BMTC can have custom programming support provided by the Flserv Professional
Service Department. Requests for Professional Services Programming Support are
accepted and include items that have special interest or unique business
requirements for BMTC. FIserv will respond to all requests with a quote that
adheres to the Product Modification Methodology policy enclosed in section III
of this proposal. The Professional Services Department daily rate for custom
support is $750.00. Flserv Retrofit support for future CBS Base releases is
available for each custom enhancement. The rate for the retro-fit support is a
custom quote for each enhancement.
3 . CBS User Group.
FIserv actively solicits enhancement requests from our user group. Annually
this organization submits a list of requested improvements which have been
prioritized by the entire user group.
<PAGE>
We endeavor to resolve/enhance as may of
these items as we can during the next year's development activity. Our progress
against this activity is reported annually to the user group at our fall
meeting. BMTC can also participate in Client driven Cooperative Development
opportunities that allow for direct involvement in the development of major new
enhancements to the CBS system. Recent Cooperative development efforts included
--------
Account Analysis and Corporate Cash Management.
V.4
Flserv/CBS Proposal
for
Flserv/CBS Support
The Bryn Mawr Trust Company
An Active User Group
--------------------
The CBS User Group is an independent group of CBS users that follows their own
set of bylaws and elects a board of directors and officers. Holding quarterly
meetings at locations voted on by the members, the CBS User Group has built
independent committees in the areas of operations, compliance, and technical
issues that serve to help other users as well as FIserv. The group publishes a
quarterly newsletter to communicate meeting information and important tips. The
President of the User Group, Robert Connors, can be reached at the address
below.
Robert Connors
Senior Vice President
Peoples Bank & Trust
5840 West 74th Street
Indianapolis, IN 46278-1756
317/328-3601
V.5
Fiserv/CBS Proposal
for
<PAGE>
The Bryn Mawr Trust Company
Financials
<TABLE>
<CAPTION>
VI. Financials
<S> <C> <C> <C> <C>
One-Time 60-Month Monthly Total
APPLICATION SOFTWARE Fees Amortization Support
Fees Monthly
Comprehensive Banking System (source
code
license), including: $325,000 $5,417 $3,000 $8,417
</TABLE>
CBS Common File Subsystem
CBS Customer Information File Subsystem
CBS Transaction Subsystem (DDA/SDA
includes Commercial Account Analysis
and Return Item Subsystems)
CBS Universal Loan Subsystem
CBS Financial Transaction Management
Subsystem (includes CTR Reporting)
CBS General Ledger Subsystem
CBS FHLMC/FNMA Packaging
CBS PS Teller System
CBS ATM Card Management/Transaction Authorization
& EPS Interface
CBS Safe Deposit Box Subsystem
CBS Account Reconciliation Subsystem
Platform Interface
Call Reporter Interface
Sendero Interface
Collections Interface
MCIF Interface
Intervoice Interface
<TABLE>
<CAPTION>
Additional Applications:
--------------------------------------------
<S> <C> <C> <C> <C>
Credit Collection Accounting System (CCAS) $ 35,000 $ 583 $ 250 $ 833
Sendero: Level I, Data Solutions Module $ 12,500 $ 208 $ 208 $ 416
IPS Accounts Payable and Fixed Assets $ 6,550 $ 109 $ 160 $ 269
GGPA POD CBS rebuild $ 1,500 __$25 N/C $ 25
TOTAL APPLICATION SOFTWARE $380,550 $6,342 $3,618 $9,960
</TABLE>
Vi.1
<PAGE>
Fiserv/CBS Proposal
for
Financials
The Bryn Mawr Trust Company
<TABLE>
<CAPTION>
HARDWARE One-Time 60-Month Monthly Total
Fees Amortization Support Fees
Monthly
<S> <C> <C> <C> <C>
IBM Advanced System 400
Hardware and
Operating Systems (Model 310:
128MB
Main Storage 9.2GB DASD) $ 240,639 $4,011 $1,157 $5,168
IBM Advanced System 400 Hardware
and
Operating Systems (Model 200:
32MB
Main Storage 4.1GB DASD) $ 47,720 $ 795 $ 93 $ 888
TOTAL HARDWARE $ 288,359 $4,806 $1,250 $6,056
Less: 15% Discount -$43,254
NET TOTAL HARDWARE $ 245,105 $4,085 $ 875* $4,960
</TABLE>
*ASSUMES A 30% DISCOUNT FOR A FIVE YEAR EXTENDED MAINTENANCE CONTRACT
VI.2
Flserv/CBS Proposal
for
Financials
The Bryn Mawr Trust Company
<TABLE>
<CAPTION>
SERVICES One-Time 60-Month Monthly Total
Fees Amortization Support Fees Monthly
<S> <C> <C> <C> <C>
CBS Project Management,
Installation
and Conversion Services,
including: $101,575 $1,693 $0 $1,693
</TABLE>
<PAGE>
CBS Common File Subsystem
CBS Customer Information File Subsystem
CBS Transaction Subsystem (DDA/SDA
includes Commercial Account Analysis
and Return Item Subsystems)
CBS Universal Loan Subsystem
CBS Financial Transaction Management
Subsystem (includes CTR Reporting)
CBS General Ledger Subsystem
CBS FHLMC/FNMA Packaging
CBS PS Teller System
CBS ATM Card Management/Transaction Authorization
& EPS Interface
CBS Safe Deposit Box Subsystem
CBS Account Reconciliation Subsystem
Platform Interface
Call Reporter Interface
Sendero Interface
Collections Interface
MCIF Interface
Intervoice Interface
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Training Services (See T&E Services Package
Detail in $ 18,750 $ 313 $ 0 $ 313
Section V of this proposal)
Travel and Living (T&E) Expenses (Actual
cost
Guaranteed not to exceed amount) $ 75,000 $ 1,250 $ 0 $ 1,250
Disaster Recovery Service (IBM 310-2043 and
3892) $ 0 $ 0 $1,500 $ 1,500
Forms (Includes Notices/Stmts/Checks) $ 0 $ 0 $1,250 $ 1,250
TOTAL SERVICES $195,325 $ 3,256 $2,750 $ 6,006
TOTAL SOFTWARE, HARD*ARE,
SERVICES $820,980 $13,683 $7,243 $20,926
</TABLE>
VI.3
THE FINANCIAL DATA SERVICES COMPANY
<PAGE>
Addendum No. 5
to
Comprehensive Banking System
License and Service Agreement
Between Bryn Mawr Bank Corporation ("Client") and FIserv
CIR, Inc. ("Company").
Purpose
-------
Client and Company wish to amend Agreement No. 3810145 with an Effective Date of
-------
December 30, 1994 . Notwithstanding anything in that Agreement to the contrary,
------------------
in the event of a conflict. between the terms of the Agreement and this
Addendum, the provisions of this Addendum shall take precedence.
Corporate Guarantee
-------------------
Attached to this Addendum No. 5 is a FIserv, Inc. guarantee of the performance
of FIserv CIR, Inc.
For and on behalf of Client By:
Name: Samuel C. Wasson, Jr.
Title: Secretary
For and on behalf of Company By:
Name: Raju M. Shivdasani
------------------
Title: President, CBS Division
Flserv
<PAGE>
THIS GUARANTY is given this 31st day of December, 1994 by FISERV, Inc., a
Delaware
Corporation having its principal offices at 255 FISERV Drive, Brookfield, WI
53045 (the
"Guarantor"), to BRYN MAWR BANK CORPORATION, having its principal office at 801
Lancaster Avenue, Bryn Mawr, PA 19010 (the "Client")
1. The Guarantor is the sole shareholder of Flserv CIR, Inc., a Delaware
corporation ("Subsidiary") and is anxious to induce Client to enter into
certain agreements with Subsidiary for the purchase or license of certain
computer hardware and software and ongoing services related thereto.
Client is willing to enter into such agreements only if the Guarantor
guarantees the faithful performance of all terms thereof.
2. The Guarantor hereby guarantees the prompt and complete performance by
Subsidiary of all the material covenants and conditions contained ha the
]License -and
Service Agreement between Subsidiary and Client, and the payment of all
damages, costs and expenses which by virtue of the foregoing agreements
might become recoverable by Client from Subsidiary.
3. This Guaranty shall continue until all the terms of the foregoing
agreements, including all future extensions, amendments or additions
---------
thereto have been satisfactorily performed or otherwise discharged by
Subsidiary; and the Guarantor shall not be released of its obligations
hereunder so long as any claim of Client against Subsidiary arising out of
or related to die foregoing agreements is not settled or discharged in
full.
4. Client and Subsidiary may enter into any alterations or modifications of
the foregoing agreements without effecting the validity or enforceability
of this Guaranty and no prior notice need be given to Guarantor.
5. This Guaranty shall inure to the benefit of Client, its successors and
assigns, and shall be binding upon the Guarantor and its successors.
6. This Guaranty shall be subject to the laws of Bankruptcy or insolvency as
applied solely to Guarantor and to general principals of equity as applied
to Guarantor and its subsidiary.
'7. This Guaranty shall be governed by the substantive law of Pennsylvania.
8. Guarantor hereby consents to the exclusive jurisdiction of any state or
federal court located within Pennsylvania, and irrevocably agrees that, subject
to the Client's election, all actions or proceedings relating to this Guaranty
or the transactions contemplated hereunder shall be litigated in such courts,
and Guarantor waives any objection that it may have based on improper venue or
forum non conveniens to the conduct of any proceeding in any such court and
---------
waives personal service of any and all process upon it, and consents that all
such service of process be made by mail or messenger directed to it at the
address set forth herein, and that service so made shall be deemed to be
completed upon the earlier of actual receipt or three (3) days after the same
shall have been posted to the address of Guarantor set forth herein. Nothing
contained in this Guaranty shall affect the right of the Client to serve legal
process in any other manner permitted by law or affect the right of the Client
to bring any action or proceeding against Guarantor or its property in the
courts of any
<PAGE>
other jurisdiction.
IN WITNESS WHEREOF, the Guarantor has duly executed this
Corporate Seal
B s (Title)
Secretary I/
THE FINANCIAL DATA SERVICES COMPANY
Addendum No. 6
to
Comprehensive Banking System
License and Service Agreement
Between Bryn Mawr Bank Corporation ("Client") and FIserv CIR, Inc. ("Company").
Client and Company wish to amend Agreement No. 3810145 with an Effective Date of
-------
December 30, 1994 . Notwithstanding anything in this Addendum to the contrary,
------------------
in the event of a conflict between the terms of the Agreement and this Addendum,
the provisions of the Agreement shall take precedence.
Confidentiality Agreement
-------------------------
Attached to this Addendum No. 6 is an executed copy of the Non-Disclosure
Agreement entered into between the Company and Client an November 29, 1994.
----
For and on behalf of Client
By:
Name: Samuel C. Wasson, Jr.
<PAGE>
Title: Secretary
For and on behalf of Company By:
Name: Raju M. Shivdasani
------------------
Tide: President, CBS Division
---------------
THE FINANCIAL DATA SERVICES
COMPANY
Confidentiality Agreement
-------------------------
This Agreement made this 29th day of November, 1994, by and between The Bryn
Mawr Trust Company ("Client") with an office at 801 Lancaster Avenue, Bryn Mawr,
Pennsylvania 19010 and FIserv CIR, Inc., a corporation with an office at 2601
Technology Drive, Orlando, Florida 32804-8068 ("Company").
WITNESSETH:
-----------
WHEREAS, Client and Company are discussing potential mutual business
opportunities pursuant to which the Company or an affiliate of the Comapny will
license a software system to Client or perform other services for the Client,
and
WHEREAS, Client and Company desire to freely exchange confidential
information subject to the terms and provisions of this Agreement, and
WHEREAS, to facilitate the discussions concerning the services
contemplated, it is appropriate that the Company and Client exchange
confidential information about their respective business and it is appropriate
that they execute and deliver this Confidentiality Agreement (the "Agreement").
<PAGE>
NOW, THEREFORE, INTENDING TO BE LEGALLY BOUND, and for other good and
valid consideration the receipt of which is hereby acknowledged, Client and
Company agree as follows:
1. Covenant to Disclose Confidential Data only to Permitted Persons.
-----------------------------------------------------------------
Client and Company hereby mutually agree and covenant that they will disclose
all the information, records, files, memoranda, reports, drawings, plans,
sketches, documents and other data (collectively the "Confidential Data"), which
they receive from the other party to duly authorized employees, agents or
representatives of the other party who have an appropriate business reason. to
know this information("Permitted Persons") and that the Confidential Data shall
be used only for the purpose of discussions with respect to the services
contemplated by the parties.
2. Confidential Data to Remain Property of the Paa Whom it B n s.
------------------ ------- ------- ----- --
All Confidential Data, which one party gives to the other, will remain the
property of the party providing the Confidential Data and shall be used by the
party to whom it is given only pursuant to the terms of this Agreement. Unless
and until the Confidential Data is (i) in or becomes part of the public domain,
other than by disclosure by the parties hereto in violation of this Agreement;
(ii) demonstrably known to the parties hereto previously; (iii) independently
developed by the parties hereto outside of this Agreement; or (iv) rightfully
obtained by the parties hereto from third parties, the parties hereto shall use
the same degree of care in its handling of the Confidential Data as it uses with
regard to its own proprietary information in order to prevent the disclosure,
use or publication of the Confidential Data, and the parties hereto
will not use the Confidential Data for their own corporate purposes or otherwise
except in accordance with the terms of this Agreement.
3. Review of this Agreement with Emgloyees, Agents and
---------------------------------------------------
Representatives. Each party hereto agrees to review this Agreement with each of
-----------------
its Permitted Persons and obtain their consent to its provisions.
4. Return of Confidential Data. At the conclusion of the discussions
-----------------------------
with respect ba the Service Agreement, each party hereto agrees to promptly
-------
return to the other party all the Confidential Data they have obtained from one
another and all the related documents, copies thereof and notes which have been
made concerning the Confidential Data.
5. Termination of this Agreement Anything herein to the contrary,
------------------------------
notwithstanding, each party may upon not less than two (2) days prior written
notice in its sole discretion terminate this Agreement. Upon termination of
this Agreement, each party hereto hereby agrees to immediately return to the
-----------
other party the Confidential Data delivered to it and the related documents,
copies thereof and notes which it has made concerning the Confidential Data.
6. Equitable and Legal Remedies. Each party hereto hereby
------------------------------
acknowledges that
<PAGE>
immediate and irreparable damage and harm will result to them
if the other party breaches any of the terms and conditions hereof.
Accordingly, each party hereby consents to: (i.) the entry by any, court of
equity of one or more preliminary injunctions against it to restrain it from any
breach of this Agreement and to require the breaching party to provide art
accounting of all profits arising from any breach of this Agreement and such
injunctions or accountings are in. addition to any other remedies or claims for
money damages or other legal or equitable relief which either party may have
against the other for a breach of this Agreement.
2
7. Notices. All notices required or permitted to be given hereunder
-------
to Client or Company shall be delivered by first class mail or by telefax to the
address of Client and/or Company stated in the first paragraph of this Agreement
and confirmed within three (3) days after receipt of the telefax or first class
mail. Each party hereto agrees to immediately no@ the other party ff any of its
agents, employees or representatives receive legal process requesting that they
provide any Confidential Data, information or documents concerning the other
party or its clients or testify concerning any aspects thereof.
8. Non-Waiver. The waiver of any breach of any provision of this
-----------
Agreement shall not operate or be construed as a waiver of any subsequent
breach.
9. Consent to jurisdiction. The parties hereto hereby consent to the
-------------------------
exclusive jurisdiction of the Common Pleas Court of Pennsylvania and federal
court located in the Eastern District in the Commonwealth of Pennsylvania and
waive personal service of any and all process and consent that all such service
of process be made by registered mail directed to such party at the address
referred to in the first paragraph of this Agreement. The parties hereto waive
any objection to jurisdiction and venue of any action instituted hereunder,
agree not to attempt to transfer any action instituted hereunder, agree not to
assert any defense based on lack of jurisdiction or venue, and consent to the
granting of such legal or equitable relief as is deemed appropriate by the
court. Nothing contained herein shall affect the right of either party hereto
to serve legal process in any other manner permitted by law or affect the right
of either party to bring any action or proceeding against it or its property in
the courts of any other jurisdiction.
10. Assignment of Agreement This agreement may not be assigned or
----------------------
otherwise transferred without the prior written consent of the party which is
--------
not seeking to assign
<PAGE>
the agreement. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
assigns.
11. Severability and Applicable Law. If any part of this Agreement
---------------------------------
shall be held to be void or unenforceable, such part or parts shall be treated
as severable from the rest of this agreement and the remaining parts of this
Agreement shall remain in full force and effect. The invalidity or
unenforceability of any, provision hereof shall hi no way affect the validity or
enforceability of any other provision. This Agreement shall be construed in
accordance with the laws of the Commonwealth of Pennsylvania.
12. No Third Party Beneficiaries. This Agreement does not create and
------------------------------
shall not be construed to create any rights enforceable by any person not a
party to this Agreement.
3
13. Captions. Paragraph titles or captions contained in this
----------
Agreement have been inserted only as a matter of convenience and for ease of
reference and do not define, limit, extend, modify or describe the scope of this
Agreement or the provisions hereof and shall be given no effect in the
construction or interpretation of this Agreement
14. Counterparts. This Agreement may be executed in any number of
--------------
counterparts, each of which shall be deemed to be an original but all of which
---------
together shall constitute but one and the same instrument
15. Integration. This Agreement embodies the entire understanding
-------------
between the parties hereto and supersedes any other prior or contemporaneous,
oral or written, representation or agreement by the parties hereto, with respect
to the matters which are the subject of this Agreement, and no change,
alteration or modification hereof may be made except in writing signed by the
parties hereto.
IN WITNESS WHEREOF, the parties
hereto have executed this Agreement on the date first above written.
<PAGE>
For and on behalf of Client BY:
Name: Samuel C. Wasson, Jr. Title: Secretary
Date: December 21, 1994
----------------------------
For an on behalf of Company By:
Name: Robin H. Smith
Title: Senior Vice President
Date: November 29,1994
4
<PAGE>
v
THE FINANCIAL DATA SERVICES COMPANY
Addendum No. 7
to
Comprehensive Banking System
License and Service Agreement
Between Bryn Mawr Bank Corporation ("Client") and FIserv CIR, Inc. ("Company").
Purpose
-------
Client and Company wish to amend Agreement No. with an Effective Date of
December 30, 1994. Notwithstanding anything in this Addendum to the contrary, in
-------------------
the event of a conflict between the terms of die Agreement and this Addendum,
the provisions of the Agreement shall take precedence.
<TABLE>
<CAPTION>
Correspondence@n
-------------------------------------------------------
<S> <C> <C> <C>
Attached to this Addendum No. 7 is the following
correspondence between the
Company and the ("Bent
August 16, 1994
November 23, 1994
November 29, 1994
December 2, 1994 (3 letters)
December 5, 1994
December 9, 1994
December 14, 1994
December 15, 1994
December 19, 1994 (2 letters)
</TABLE>
For and on behalf of Client By:
Name:
Title:
For and on behalf of Company By:
Name:, Raju M. Shivdasani
------------------
Title: President, CBS Division
---------------
The Bryn Mawr Trust Company
<PAGE>
BRYN MAWR. PENNSYLVANIA 19010-3396 (215) 525-1700
August 16, 1994
Mr. David E. Ulrich
Senior Sales Executive
Fiserv - CBS Division
2601 Technology Drive
Orlando, FL 32804
Dear Dave:
Attached fir your review and research is a comprehensive list of the
Bryn Mawr Trust Company CBS software development and enhancement issues. We
have eliminated the nonessential items and have narrowed our list to 23 very
important issues. I am available, as is the rest of our project team, to
discuss these with you in greater detail.
Loan Issues
-----------
1. LOC Rate Change Backdating
With creditlines we must be able to back date prime rate changes to the
beginning of the current cycle.
2. Payment Factors for Credit Lines
With creditlines we must be able to use "payment factors" when calculating a
monthly- loan payment. The payment factor is used on our personal lines of
credit and on older Home Equity lines of credit.
3. Paid Loan Accounting
When a final loan payment is received and the account is overpaid the CBS system
dumps that payment into a suspense account. We must have the ability to credit
the overpayment to the paid off loan, report on it, and allow for an overpayment
adjustment to the loan as the overpayment is refunded to the customer.
4. Additional Payment Processing Parameters
when you want a banker, not just a bank
--------
Mr. David E. Ulrich
<PAGE>
August 16, 1994
Page 2
While CBS presently has one payment processing parameter, our 5 systems
currently have different payment priorities. They are as follows:
IL- late charge, interest, principal
ML- late charge, interest, escrow, principal
LC- billed interest, billed principal, late charges,
unscheduled principal, unscheduled interest
CL- billed interest, billed principal (any payments not equal to billed amount
applied manually)
CLCS- interest-only bills, payment priorities not important
CBS has the capability to have payments applied in only one way across the loan
system. This is interest, principal, escrow, with late fees being optional.
Any accounts which do not fall under this prioritization will be forced to
reject. The capability to choose a payment priority by product decreases our
rejected payments, and eliminates time spent by employees to correct them.
The Composite Payment Processing that Janice Page introduced to us in June would
give us the ability to set up the payment priority by product, which would
greatly reduce our need to have payments reject if they do not follow the
available prioritization. We also discussed options for Partial Payments, Short
but Delinquent payments, and for Excess Payments. This new capability was
supposed to have been added with the 94.01 release. Is this true?
Still missing from CBS is an Unapplied Payment Bucket, as CBS may refer to it,
for Mortgage Loans. This is used as a holding bucket at the account level until
a full payment has been received for these loans and is a feature of vital
importance to BMT, as well as any of your present customers involved with the
secondary market: partial payments are not acceptable.
5. Fastcloser Interface
The current residential mortgage loan front-end system must be fully interfaced
to CBS. This means, that information is uploaded from Fastcloser into the CBS
system completely, and that no maintenance is required at the CBS level to
complete a new account process.
6. HMDA Software Interface
<PAGE>
There must be an interface to the HMDA software provided by the FDIC.
I)avid 11 Ulrich
August 16, 1994
Page 3
7. Collateral Repricing
We must have automated daily stock repricing. How will this be accomplished on
the CBS software? What vendors do other banks currently
use? Is the repricing accomplished by tape feed or on a dial up basis?
8. Credit Line Limitations
CBS currently has nine (9) creditlines available to each customer. You
indicated that this enhancement would be available in a future update. We must
have the ability to more than nine (9) creditlines.
9. Non-accrual and Charge-off Accounting
We must have the ability to automate shadow accounting for non-accrual/charged-
off loans. Such a process would allow us to maintain the customer records
according to the way that the customer would see and interpret their loan
account while at the same time enabling us to maintain the internal reporting
that is necessary on the general ledger system.
11 Construction loans (Commitments within Commitments)
On our construction loan system, CLCS, our loans are set up as follows: There is
a Gross Commitment set up for each account. Contained within that commitment
--
are Unit Numbers, each with their own sub-commitment and Description of the
purpose or usage for the funds. At each Unit level, the system keeps track of
the Committed amount, the funds disbursed, funds available, and funds repaid.
The sub-commitments at the unit level all total to the gross commitment, and the
funds disbursed at each unit will not exceed the sub-commitment. Copies of our
Unit Description Report are attached for your review.
Our construction customers are billed for interest only each month, but at the
account level, not at the unit level. This is an important feature because it
saves time. A copy of a Test bill is attached.
Our construction customers are required to provide us with a voucher, or
<PAGE>
Construction Advance Request, to request the disbursal of funds. The voucher
includes the following information: the customer address, the property address,
the description of the unit being disbursed, the available amount for that unit,
and the amount of the request. A copy of this form is provided.
We must have the ability to provide for a commitment within a commitment for
Mr. David E. Ulrich
August 16, 1994
Page 4
our construction loans.. My understanding is that Jean Really has provided
Janice with documentation concerning our requirements in this area.
11. Dealer Draft for Early Payoff Refund
The loan system must be able to draft a dealers account automatically for the
dealer reserve due back to the Bank if a loan associated with that dealer has
paid off early.
Deposit Issues
-------
12. Backroom Systems Software Interface
CBS must be able to interface with our backroom system software which is used
for the returns and the proof of deposit corrections.
13. Account Analysis Statement Regeneration
The account analysis system must be able to reproduce a single AA statement for
a customer once corrections to the account analysis record have been made.
14. Cash Management Product Line
The cash management offering in its present form is unacceptable. We have
discussed this at length. Multi-bank reporting is required, along with Multi-
bank cash concentration, multi-bank remote funding, touch-tone information
delivery, and automated feeds for lockbox deposits with float assignment and
controlled disbursement totals.
15. Overdraft Processing
-a. In order to go the "extra mile" for our customers who have a clean track
record, we
<PAGE>
require the ability to hold over or suspend an item until the
following day before making an overdraft versus return decision.
b. The CBS system must provide tiered pricing for overdrafts. Miscellaneous
fee income must interface directly with the general ledger.
16. Stop Payments
Mr. David E. Ulrich
August 16, 1994
Page 5
We require a more precise stop payment listing on the teller system. When a
stop payment is indicated to a teller and the teller inquires on stop payments
they receive a list of every stop payment on the system requiring time to look
though sometimes lengthy lists to ascertain whether or not the check in front of
the teller is good. We want the system to be able to list only checks in the
amount of the check in question or the ability to search for a particular check
number.
17. Currency Transaction Reporting
We require a system that will aggregate transactions, gather data, and
produce online CTR's which can be sent to the IRS in the form of a magnetic
tape. If the system Fiserve is working on is not completed within the time
frame of our conversion, we will have to purchase a system from a third party
such as Achley and have Fiserve build an interface.
18. Bank Card Limits
We require the ability to set a different daily bank card withdraw limit at the
individual card level.
19. Safe Deposit Box Numbers
We would prefer to have safe deposit box numbers appear on the system in an
alpha-numeric format. If this is not possible because of the set up of the CBS
CIF system, we need clarification on how to foot the system into printing alpha-
numeric box numbers on everything going to the customer. We must be certain
that we can distinguish between duplicate and sometimes triplicate numbering in
the Bryn Mawr main office vaults.
20. Bill Paying
<PAGE>
In order to proceed with our current plans to offer telephone bill paying by
@ear end of this year, we must know: 1. Which vendor is Fiserve currently
working with to develop a bill paying system? What is the time table for the
system coming on line? What features will the system provide? Will the system
interface directly with our Intervoice system? What is Fiserve's capability to
support other third party bill paying vendors? And, if this is possible, who do
you currently support?
21. Telephone Banking
In order to continue the current level of service to our customers, we require
the capability to: .
Mr. David E. Ulrich
August 16, 1994
Page 6
a. Future date transfers between accounts
b. Give a perdiem figure on loan pay offs
c. Provide transaction history over a period of time-not just for a
specific date
d. Continue the ability to use the Intervoice "whisper" feature
CIF
---
22. Duplicate Social Security Numbers
CBS must provide a means to double check social security number data entry to
avoid possible duplication and errors. The Bank would accept a suspect report
that would indicate potential errors and/or duplications within the system. The
Bank has worked very diligently at cleaning up
its 1099 and 1098 reporting, and is reluctant to see an increase in problems
associated with tax reporting.
23 W-8's
FiServe must be able to automatically produce W-8's.
Overall Concerns
------- --------
24. Member Banker Identifier
The CBS system must be able to prominently display customer level coding on all
inquiry screens which would be considered initial points of entry into the CBS
system at the platform, teller window, telephone banking center, or loan areas.
<PAGE>
Please incorporate these enhancements into your proposal for The Bryn Mawr Trust
Company. As always, I'm available to answer any questions.
Sincerely,
Thomas M. Petro
Senior Vice President
ATTACHMENTS
cc: Dataprocessing Evaluation Team Rich Fuchs
Don Krieble
Bob Ricciardi
Sam Wasson
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
The Bryn DATE =
Mawr Trust 08/08/94
Company 1
PAGE
UNIT DESCRIPTION REPORT
WITH BALANCES
UNIT DESCRIPTION COMMITTED DISBURSED
REPAID UNIT BALANCE AVAILABLE
-----------------------------------------
- -- 103100 ACQUISITION 1,100,000.00 1,100,000.00 1,019,000.00 81,000.00
103101 CONSTRUCTION, LOT 50 120,000.00 120,000.00 120,000.00 0.00 0.00
<S> <C> <C> <C> <C> <C> <C> <C> <C>
103102 CONSTRUCTION, LOT 51 150,000.00 150,000.00 150,000.00 0.00 0.00
103103 CONSTRUCTION, LOT 52 120,000.00 120,000.00 120,000.00 0.00 0.00
103104 CONSTRUCTION, LOT 48 150,000.00 150,000.00 150,000.00 0.00 0.00
103105 CONSTRUCTION, LOT 43 150,000.00 150,000.00 150,000.00 0.00 0.00
103106 CONSTRUCTION, LOT 46 135,000.00 135,000.00 135,000.00 0.00 0.00
888888 SUSPENSE 75,000.00 0.00 0.00 0.00 75,000.00
FUNDS
CLCS 8010000553 ALCOY
BUILDERS, INC.
LOAN TOTALS:
PROPERTY ADDRESS: 2,000,000.00 1,925,000.00
1,844,000.00 81,000.00 75,000.00
6 LOTS VON STEUBEN
</TABLE>
EAST GOSHEN TWP
CHESTER COUNTY , PA
................................................................................
...... ..................................
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
105300 CONSTRUCTION FUNDS 142,000.00 0.00 0.00 0.00 142,000.00
105301 CONSTRUCTION LOT #8 133,200.00 133,200.00 133,200.00 0.00 0.00
105302 CONSTRUCTION LOT #47 148,000.00 133,200.00 133,200.00 0.00 14,800.00
105303 CONSTRUCTION LOT #42 154,000.00 33,880.00 0.00 33,880.00 -120,120.00
888888 SUSPENSE FUNDS 14,800.00 0.00 0.00 0.00 14,800.00
CLCS 8010000968 ALCOY BUILDERS, INC.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
LOAN TOTALS: -
PROPERTY ADDRESS: 592,000.00 300,280.00 266,400.00 33,880.00 291,720.00
WENTHWORTH SUBDIVISION
</TABLE>
BOOT RD & PAOLI PIKE
E.GOSHEN TWP. , PA
................................................................................
...... ..................................
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
207400 ACQUISITION & COSTS 445,000.00 445,000.00 235,840.00 209,160.00 0.00
207401 CONSTRUCTION LOT# 1 296,029.00 296,029.00 296,029.00 0.00 0.00
207402 CONSTRUCTION LOT# 2 297,476.00 297,476.00 297,476.00 0.00 0.00
207403 IMPROVEMENTS 45,000.00 45,000.00 0.00 45,000.00 0.00
SUSPENSE FUNDS 1,447.00 0.00 0.00 0.00 1,"7.00
999999 INTEREST RESERVE 46,000.00 46,000.00 0.00 46,000.00 0.00
CLCS 8040000459 DAWN DEVELOPMENT CO., INC.
LOAN TOTALS:
PROPERTY ADDRESS: 1,130,952.00 1,129,505.00
829,345.00 300,160.00 1,447.00
</TABLE>
UPPER PINE CREEK RD.
WEST PIKELAND TWP
CHESTER COUNTY , PA
................................................................................
...... ..................................
<TABLE>
<C> <S> <C> <C> <C> <C> <C>
265000 ACQUISITION 248,600.00 248,560.00 248,560.00 0.00 40.00
265001 GEN SOFTS COSTS 51,000.00 25,906.33 25,906.33 0.00 25,093.67
265002 LETTER OF CREDIT 245,000.00 164,461.94 71,573.67 92,888.27 80,538.06
265003 WATER & ELECTRIC 97,000.00 83,522.16 49,440.00 34,082.16 13,477.84
999999 INTEREST RESERVE 100,000.00 100,000.00 0.00 100,000.00 0.00
</TABLE>
Page 001
Note: CONSTRUCTION LOAN DEPT. ***DUE DATE 08/15/94***
Statement for period ending
RITTLOFT CORP T/A 08/14/94
BASIC EQUIPMENT CO.
20 WEST GERMANTOWN PIKE
NORRISTOWN, PA 19401 Please Remit: *5,432.46
CLCS 118001527
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C><C>
--------- CURRENT ------- Loan 118001527 Borrower's Funds0ance
BALANCES number
:
Loan amount : 0100,000.00 Interest Reserve 0.00
balance
Billing rate: 4.0000% Total Principal 0.00
FIXED undisbursed:
Rate/Spread : 4.0000% Total Principal 100,000.00
disbursed :
to charge : <None> Total Interest paid 1,937.16
Y-T-D :
PERIOD ------------------------------Starting P0alan------ CURRENT CHARGES --------Loan Funds drsterest owed : $932.46
SUMMARY
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Principal repaid 1,500.00 Late : 0.00
Charges
owed
Ending Principal balance 0910000.00 Principal : 4,500.00
owed
Fees owed : 0100
Borrower's Funds disbursed: 0.00 Impounds : 0.00
owed
Interest payments mad* 314.96 ---------------
Late charge payments made 0.00 STATEMENT AMOUNT : *5,432.45
Fee payments made 0.00
DETAIL OF ---------- -------- INTEREST DETAIL ------- ------- -HARGE DETAIL
CURRENT
CHARGES
Estimated : 139.62 Outstanding 0.00
Adjusted : -1.46 Current 0.00
period due:
Delinquent : 309.80 -------- PRINCIPAL --------
DETAIL
Other adjustments : 314.96 Past due 3,000.00
Current period dust- 307.70 Current 1,500.00
period due:
----------------------------------------------------------------------------------------------------------------
</TABLE>
Page 002
RITTLOFT CORP T/A
BASIC EQUIPMENT CO.
20 WEST GERMANTOWN PIKE
NORRISTOWN, PA 19401
CLCS 118001527
<TABLE>
<CAPTION>
TRANSACTION DETAIL -- Trn Voucher Check Transaction applied to Principal
Eff Date Cod @Description Number N@ Number Principal interest Balance
<S> <C> <C> <C> <C> <C>
Initial Billing Rate 4. NM B*Beginning Balance 92,5@&U
07/06/94 316 PAID 05/15/94 BILL N/A 314.96 -314.6 9, SOL 00
07/06/94 308 PAID 05115/94 BILL N/A 1,500.00 -1,500.00 91,000
Ending Balance 91,000
</TABLE>
The Bryn Mawr Trust Company
<PAGE>
801 LANCASTER AVENUE
BRYN MAWR, PENNSYLVANIA 19010-3396 (215) 525-1700
CONSTRUCTION ADVANCE REQUEST
L & G ENTERPRISES Inc Expiration Date: 12/03/1991
22 MAIN AVE
BERWYN, PA 19312 Account Number: 8120000543
(434905) 1791
Posting Date: 12/30/91
Property: YEAGER RD
LETTER OF CREDIT #565
UPPER PROVIDENCE TWP
MONTGOMERY CNTY, PA
General Contractor/Builder: L & G ENTERPRISES INC
Available Balance: $49,241.56 Percent Disbursed 79%
Amount of Request: 70
--
Stage Number:
Please Deposit into Checking Account Number: -OR-Pay to the Order of:
I/We hereby approve the payment of the above amount in accordance with the terms
and conditions of the Loan Agreement between The Bryn Mawr Trust Company and the
Borrower(s). It is understood that fund* will be disbursed only if this request
is complete and accurate.
Borrower: Date: 1/29/92
Borrower:-@--@ ate:
General Contractor/Builder: Date:
NOTE: Vouchers must be in $he Construction Mortgage Department by Wednesday
noon
to be processed for payment by Friday of the following week.
<PAGE>
Inspector: Date:__l
l@13,
Officer:- @AA A &/'i
Date:
TheBrynMawrTrustCompany
BRYN MAWR, PENNSYLVANIA 19010-3396 (610) 525-1700
November 23, 1994
Robin H. Smith
Senior Vice President
Fiserv CBS Division
2601 Technology Drive
Orlando, FL 32804
Dear Robin:
I'm writing to recap the discussion we had today and subsequent discussions with
my team in order to close the following issues concerning our agreement. Please
review these with Dave Ulrich and advise me immediately in writing if they are
unacceptable to you. As we discussed, I need to close this issue with our Board
at the December 15 meeting. This means that an agreement must be included with
the materials we send to the Board in due course on December 9, 1994.
I am seeking by this letter to address each of our issues so that we can reach
agreement as soon as possible and devote all of our efforts to obtain a
prompt,and smooth conversion to your system.
RESOLVED ISSUES
---------------
Conversion Date
With respect to the conversion date we are severely disappointed that an October
7, 1995 conversion date is unworkable for you from a resource perspective. You
can certainly appreciate how a later conversion date increases the Bank's total
cost of this transaction. Even more important, as you know, the earlier
conversion date is key to us because of business requirements of the Bank and
our desire to have the system running and debugged by November 30, 1995. We
still very much desire to convert no later than October 7, 1995.
We recognize the economic commitment evidenced in Frank Martire's letter of
November 1, 1994 to address the expense to the Bank which is incurred by reason
of the Bank leaving the Fiserv Fusion system and terminating the DATACENTER
PROCESSING AGREEMENT. In return for your unconditional commitment to convert
the Bank to the, Fiserv CBS system on October 7, 1995, the Bank would be
when you want Banker, not just a bank
Mr. Robin H. Smith
<PAGE>
Page 2
willing to agree to pay the Amount of the termination fee Fiserv CBS would have
to pay to Fiserv Fusion from the actual conversion date through November 30,
1995.
Incorporation of Mr. Martire's Letter
Frank Martire's letter dated November 1, 1994 will be incorporated by reference
into the Agreement.
Annual Cap on CPI Increases
Maintenance fees increases as defined in paragraph 4.11 will float with CPI as
defined in the Agreement and will be capped at a maximum 8% per annum.
Cap on Maintenance Fee Increase after Initial Term
Maintenance Fee renewal costs will be capped at no more than an 8% increase over
the then current maintenance fee.
Commonwealth of Pennsylvania State Compliance
CBS agrees to maintain compliance with Commonwealth of Pennsylvania state
Regulations.
Performance Warranties
The performance warranties-on Addendum No, 1 to the Agreement will be expanded-
as follows:
1. BMT commits to provide the minimum-configuration as specified by CBS, but at
its sole election may add to the performance or sizing of the equipment so long
as it conforms with the minimum requirements.
2. End of day batch processing not to exceed Z hours for up
to 100,000 accounts.
3. Average response time for remote devices will not exceed
2 seconds. Measurements will be taken by stopwatch from the time the enter key
is depressed until the terminal begins its response. Measurements kill be taken
no fewer than eight times per month on or near the following designated times on
each measurement day: 10:30 a.m., 12:00 noon and 2:00 p.m.
4. In the event that the performance standards defined in the agreement are
not met, Bryn Mawr Trust personnel will be obligated to follow the reasonable
operational changes or processing schedule changes recommended by CBS personnel
to achieve the performance standards. If CBS and the bank
Mr. Robin H. Smith
Page 3
concluded that the performance standards can only be met with a more powerful
AS/400 computer configuration, CBS will provide the hardware and software
upgrades to the bank at a discount of an additional 201 off of the CBS cost of
acquiring the same.
Allowance for Unforeseen Conversion-Related Modifications
<PAGE>
The 35 days of programming time is designated for modifications which may be
uncovered during the conversion process and mutually agreed to by both CBS and
the bank in writing and are expressly to be used for activities associated with
moving Bryn Mawr Trust products, services and processing into the CBS system at
conversion. Days remaining, after client acceptance testing and sign-off for
both the Conversion and Exhibit B modifications are released by BMT and cease to
be a r . responsibility of CBS.
Modifications: Deletion and Re-Classification
The Modification identified on Exhibit A to Schedule 3 as number 6, Overdraft
Processing - "Holdover", will be removed from the Agreement and the Total Fees
for Exhibit A will be reduced accordingly by $21,000 which will be applied in
equal increments to the fee payment schedule as indicated below.
The Modification identified on Exhibit B to Schedule 3 as number 5, Safe Deposit
Box Numbers will be added to Exhibit A to Schedule 3 and the Total fees for-
Exhibit A will be increased accordingly by $6,000 which will be applied in equal
increments to the fee payment schedule as indicated below and the Total fees for
Exhibit B will be reduced by $6,000.
The revised fee payment schedule for Exhibit A items will be as follows:
<TABLE>
<CAPTION>
<S> <C>
Upon Contract Execution $29,500
Upon Completion and Client Acceptance
of System Detailed Specifications $29,500
Upon Client Acceptance of Conversion $29,500
</TABLE>
Timing of AS/400 Equipment Purchase
The AS/400 equipment will be acquired at a date later in 1995 but within
timeframes that allow for timely installation and testing. we've done this with
expectation that IBM prices will fall. The Agreement should reflect this
understanding.
Mr. Robin H. Smith
Page 4
Incorporation of Vendor Questionnaire
The CBS Response to the bank's Vendor Questionnaire will be incorporated to the
Agreement as Addendum No. 2.
Incorporation of CBS Proposal
The CBS Proposal for The Bryn Mawr Trust Company dated September 7, 1994 will be
incorporated to the Agreement as Addendum No. 3. Section 1.11 of the Agreement
will be modified to indicate that Schedule 1 and Schedule 3 of the Agreement
supersede and take precedence over any and all monetary values identified in
Section 6, Financials of the CBS Proposal in Addendum No. 3.
UNRESOLVED ISSUE
Effective Date for Commencement of Maintenance Fees
<PAGE>
It is essential to note that to the extent that Fiserv CBS is unable to convert
the Bank to it's system, for each month of such failure it costs the bank the
difference between the $3,000 fee paid to Fiserv CBS and the $36,000 fee paid to
Fiserv Fusion.
Further related to this issue is that our Agreement with Fiserv Fusion
terminates on December 31, 1995 and you can understand that the Bank must obtain
a written agreement from both Fiserv CBS and Fiserv Fusion that in the unlikely
event that the conversion is delayed beyond December 31, 1995 that the Bank can
continue to use Fiserv Fusion system for a $3,000 per month fee.
Additions to Definition of a Successful Conversion
Conversion of Client's data to the Software System shall be deemed to have been
completed upon conclusion of the events identified on Schedule 4 of this
Agreement as well as the following:
(i) Acceptable as is presented
(ii) Acceptable as is presented
(iii) Successful completion in a live production environment of seven (7)
consecutive end-of-day batch processing runs and at least one (1) month-end
batch processing run, one (1) successful mid-month Freddie Mac Investor
Reporting cycle and one (1) successful month-end dealer-reserve accounting
Mr. Robin H. Smith
Page 5
period.
(iv) Successful mapping of client products to the CBS system from the Fiserv
Fusion systems, CLCS Construction Loan system, and Bryn Mawr Trust
Safe Deposit Box system.
(v) Successful interface of the following sub-systems with the CBS system:
a. Culverin Platform Automation System
b. CCAS Credit Collection Accounting System
c. MAC ATM processing
d. Fiserv Distributed Processing Group Automated Return System
e. Fiserv Distributed Processing Group Proof and
Correction System
f. Intervoice Telephone Banker VRU
g. Level 3 Audit software
h. IPS Accounts Payable software
i. IPS Investment Accounting software
j. IPS Fixed Asset Accounting software
k. Customer Insights MCIF file preparation
1. Credit Bureau acceptance of tapes produced by the CBS system
m. GG Pulley POD interface
n. CBS Cash Management system
(vi) Client Acceptance and Conversion Sign-off, which will not be unreasonably
withheld in light of the fore mentioned criteria being met.
Day Two Items
<PAGE>
I would like to confirm that the Day Two items listed on Exhibit B to Schedule 3
as amended by this letter will be paid for by the Bank fifty percent (50%) on
the date that the Bank signs off on all of Exhibit B Business Requirements and
the remaining fifty percent (50%) on the day that installation and acceptance
has occurred with respect to the Day Two items and in no event are any of the
Day Two items to be delivered later than March 31, 1996.
Additional License Fees
The Bank has agreed to accept your list price for Additional License Fees and
associated incremental Maintenance Fees even though such fees were not disclosed
by CBS during the Bank's evaluation process. However, we amend the increments
and fee schedule as follows:
Mr. Robin H. Smith
Page 6
An incremental license fee will be paid after the 100,000 account threshold is
reached of $25,000 for each 25,000 accounts up to a total of 175,000 accounts,
and $75,000 for each 75,000 accounts thereafter to a maximum of $1,225,000 after
which no additional license fee would be due. An incremental monthly
maintenance fee,will be paid after the 100,000 account threshold is reached of
$375 for each 25,000 accounts up to a total of 175,000 accounts, and $1,125 will
be paid for each 75,000 accounts processed thereafter to a total of 1,000,000
accounts above which no-additional incremental license fees would be due.
Our internally generated account growth has remained under 5,000 accounts per
year for the past five years and therefore will not result in frequent
accounting function effort on the part of CBS to monitor the Bank's account
volumes and revise billing accordingly.
Cash Management Products
This letter will serve as a confirmation of my understanding that the Fiserv CBS
Cash Management subsystem will be added to the Agreement and that the $100,000
credit due the Bank will be reduced by the discounted value from list price of
that subsystem which is $50,000. CBS and the Bank will agree to work together
to overcome the issues of multi@bank reporting, data exchange and same day
lockbox reporting through the PC.
Confidentiality Agreement
I have not heard back from you concerning the Confidentiality Agreement that was
sent to you by Larry McAlee on November 7, 1994. I presume that it is
acceptable to you and that you will execute it promptly.
As evidence of our good faith the Bank will agree to use the remaining $50,000
credit due it from CBS at the Bank's option to buy services or software from CBS
at some time in the future.
Recognizing that you will need time to respond to the items outlined above and
that you are still waiting to hear from us concerning language and Business
Requirements, our team will meet on Monday to discuss the language concerns we
have related to the Agreement which are not identified herein. We will document
these and forward them to you by overnight mail early next week. I expect to
have either Business Requirement Sign-off's in hand, or written amendments
defined with reasonable particularity by the end of next week. These will be
overnight mailed to you under a separate cover.
Mr. Robin H. Smith
Page 7
<PAGE>
I look forward to your response to our understanding of the Resolved items and
your reaction to-our proposed resolutions to the unresolved items.
Sincerely,
Thomas M. Petro
Senior Vice President
cc: Larry McAlee, Esquire
Bill Mixon
Geoff Halberstadt
Rick Crnovich
Dataprocessing Evaluation Team
THE FINANCIAL DATA SERVICES COMPANY
November 29, 1994
Mr. Thomas M. Petro
Senior Vice President
The Bryn Mawr Trust Company
801 Lancaster Avenue
Bryn Mawr, PA 190 1 0
Dear Tom
Thank you for your letter of November 23. We would like to take dais
opportunity to document our response to the issues pursuant to the dialogue held
earlier today.
Conversion Date
---------------
As we discussed, the issues surrounding setting a conversion date earlier than
November 30, 1995 are 'tine' related versus financially related, i.e. given the
scope of work, particularly with respect to modification activity, we do not
have enough time to move the conversion date to early October 1995. We will
agree, Once the Agreement has been executed, to sit down with you and your staff
to perfect the project plan in such a manner as to ensure the conversion is
completed on or before November 30, 1995.
Incorporation of Mr. Martire's Letter
-------------------------------
<PAGE>
As we discussed, we will incorporate Frank Martire's letter by reference in the
final Agreement. In addition this letter will be modified to ensure that in the
unlikely event there was a delay in the conversion activities contemplated by
our Agreement, and the delay required The Bryn Mawr Trust Company to continue
being serviced on the Fusion product that The Bryn Mawr Trust Company would be
allowed this right without penalty and under the same conditions as their
existing agreement with Fusion.
Annual Cap on CPI Increases
---------------------------
We will agree to change the language in the final Agreements to reflect the
----
annual increases in the monthly software support files and will be limited to
the lesser of the annual Consumer Price Index (CPI) change or 8%. This will be
the policy followed for the initial five-year term of the software support
agreement.
CBS Division
2601 Technology Drive, Orlando, Florida 32804-8068 407-299-5400
----- ---------------- ----------
Corporate Headquarters: 255 FIserv Drive, Brookfield, Wisconsin 53045 o 414-879-
5000
Mailing Address: PO. Box 979, Brookfield, Wisconsin 53008-0979
Mr. Thomas M. Petro
November 29, 1994
Page 2
Cap on Maintenance Fee Increase after Initial Term
--------------------------------------------------
As we discussed, we will agree to "Cap" the rate for the first one-year renewal
of software Support, following the initial five-year term, at $5,000 per month.
Subsequent one-year renewal would be at the then current rates for said
-----
services. We will incorporate
appropriate language to this effect in the final Agreements.
Commonwealth of Pennsylvania State Compliance
---------------------------------------------
As we discussed, we will agree U) incorporate language in the final Agreements
----
which
binds us to provide support/maintenance services for state of Pennsylvania
--------
regulatory requirements on the same basis as we do for federal regulatory
requirements.
Performance Warranties
----------------------
We will accept all of the performance warranty provisions as outlined in your
letter. The final Agreements will reflect this language.
Allowance for Unforeseen Conversion-Related Modifications
---------------------------------------------------------
<PAGE>
We are in agreement with the purpose for the thirty-five programming days and
will agree to incorporate similar language in the final Agreements.
-------
Modifications: Deletions and Re-Classification
----------------------------------------------
As we discussed, there can be no reduction in the fees associated with
modification simply because the Overdraft Processing requirement has been
removed. We will accept moving the Safe Deposit Box Numbers issue to "day one".
This and the revised payment terms will be reflected in the final Agreements.
Timing of AS/400 Equipment Purchase
-----------------------------------
We have no problem with your intentions to defer the AS/400 purchase to a later
date in
1995, however be advised that in the even our margins and/or discount scenarios
with
IBM change -we may or may not be able to honor the 15% discount currently
offered.
Incorporation of Vendor Questionnaire
-------------- --------------------
We will agree to incorporate this in the final Agreement by reference within the
"warranty" provisions. In the interim we are reviewing this document to ensure
its applicability to the transaction as it is currently negotiated, and if there
is any provision with which we have a concern, we will notify you this week so
we can resolve prior to finalizing the Agreements.
Mr. Thomas M. Petro
November 29, 1994
Page 3
Incorporation of CBS Proposal
-----------------------------
Likewise we will incorporate the appropriate CBS Proposal as requested.
Obviously, the financials of the final transaction will be documented in the
final Agreement and supersede any of the proposal financials.
Effective Date for Commencement of Maintenance Fees
-----------------------------------------------
As we discussed, we find this request unacceptable. The extent with which we
are willing to negotiate is to allow The Bryn Mawr Trust Company to continue
processing and paying for the Fusion service under the same conditions and
---
without penalty until the conversion could be completed & CBS software
maintenance fees would not begin until following conversion. This issue will be
----
covered in the Frank Martire letter referenced previously.
Additions to Definition of a Successful Conversion
--------------------------------------------------
We will accept the provisions as outlined, with the exception of the following
in subparagraph (v):
g. Level 3 Audit Software
h. IPS Accounts Payable Software
i. IPS Investment Accounting Software
<PAGE>
j. IPS fixed Asset Accounting Software
k. Customer Insights MCIF File Preparation
m. GG Pulley POD Interface
As we discussed, this is because each of these is outside of our control or
scope of the project and rest solely on the bank or the third party vendor to
fulfill. As such they should not be considered in our Agreement as to what
constitutes a completed conversion. The final Agreements will reflect these
changes.
DAY,r Two Items
----- ---------
As we discussed, we are only willing to firmly commit to the "day two" issues
being delivered prior to December 31, 1996. We will, however, consider
negotiating a staggered delivery schedule over this same period based upon your
internal prioritization of these issues. Please advise as to the approach you
would like to take against these issues. Once this is resolved, the final
language and payment schedules will be documented in the final% Agreement.
Mr. Thomas M. Petro
November 29, 1994
Page 4
Additional License Fees
-------------------
We will accept the provisions as outlined and make the appropriate changes in
the final Agreement.
Cash Management Products
----------------
We will agree to incorporate the Cash Management product in the Agreement for an
additional $75,000 license fee. The final Agreement will reflect this
inclusion. Secondly, we will continue to agree to work with the bank towards a
speedy resolution to the other cash management issues as discussed.
Confidentiality Agreement
-------------------------
We will agree to the Confidentiality Agreement presented. An executed copy of
which is attached.
One-Time Financial Discounting
------------------------------
As we have continued to discuss, there is a need to resolve the $ 1 00,000
discount in onetime fees which you presented to the board in October. To this
end, we will offer the following:
Waiver of Fusion De-Conversion Fees $39,000
Cash Management Discount
20,000
Travel and Living Expenses Discount 25,000
Modification Discount 16,000
-------
TOTAL $100,000
We trust this resolves the outstanding issues short of legal and the final
business requirements review. We look forward to receiving these and finalizing
our discussions this week.
Sincerely,
<PAGE>
Senior Vice President
RS/sl 250
Enclosure
c: Dave Uhich
The Bryn Mawr Trust Company
BRYN MAWR, PENNSYLVANIA 19010-3396 (610) 525-1700
December 2, 1994
Robin H. Smith
Senior Vice President
Fiserv CBS Division
2601 Technology Drive
Orlando, FL 32804
Re: Confirmation of Discussion and Business Requirement Letters
Dear Robin:
The purpose of this letter is to confirm our discussion this afternoon
concerning my letter to you dated today re: Response to November 29, 1994 Letter
--------------- -----------------------
and to send you the preliminary responses to the Day One Exhibit A to Schedule 3
Business Requirements.
Regulatory Assistance Center
to agree that the cost of the Regulatory Assistance Center software license and
maintenance fee are not included in the CBS License and Maintenance fees on
Schedule 1 of the Agreement. We agree that you will add these to the Agreement
and add a new License fee which will be the lesser of $18,000 or a lesser amount
which CBS might be able to secure on behalf of the Bank which is the sum to be
paid to the Regulatory Assistance Center for the license agreement for the use
of their software; We also agree that the maintenance fees on Schedule 1 of the
Agreement do not reflect the annual maintenance fee for the Regulatory
Assistance Center software, but that a new maintenance fee which will be the
lesser of $3,600 or a lesser amount which CBS might be able to secure on behalf
of the Bank which is the sum to be paid to the Regulatory Assistance Center for
an annual maintenance agreement for the use of their software.
Travel and Living Expense Discount
We agree that the reasonable travel and living expense associated with the
conversion activity of the Agreement will be capped at $50,000, and that the
Bank will not reimburse travel and living expenses incurred by CBS over this
amount. By capping the travel and living expense at $50,000 rather than the
estimated $75,000 CBS is deemed to have satisfied $25,000 of the $100,000 one
time financial discount.
<PAGE>
when you want a banker
------
, not just a bank
Mr. Robin H. Smith
Response to December 2 Discussion Page 2
Business Requirements
The Bank's responses to the Business Requirements are attached to this letter in
"draft" form. We have agreed to treat these as drafts for the time being
because of your travel schedule for the next few business days and because I
have not yet reviewed what the Bank's team members have written.
The following memos are attached:
<TABLE>
<CAPTION>
1. From: Nancy Gross Regarding: (i) Telephone Banking -Date Driven
Transactions
<S> <C> <C>
</TABLE>
(ii) Telephone Banking Per Diem Figure on Payoff of Loan
<TABLE>
<CAPTION>
(iii) Safe Deposit
Box
<S> <C> <C> <C> <C> <C>
(iv) Currency
Transaction
Reporting
2. From: Jeanne Really Regarding: Line of Credit Rate
Change Backdating
3. From: Jeanne Really Regarding: Payment Factors for
Credit Lines
4. From: Jeanne Really Regarding: Unapplied Payments Bucket
5. From: Jeanne Really Regarding: Construction Loans
6. From: Joe Saraceno Regarding: Construction Loans
7. From: June Falcone Regarding: (i) Backroom Systems
Software Interface to RICS
and APCS
</TABLE>
(ii) overdraft Processing Holdover
(iii) Overdraft
Processing Tiered Pricing
<PAGE>
(v) W-B's
Mr. Robin H. Smith
Response to December 2 Discussion Page 3
I will review these over the weekend and discuss them with you if necessary. I
await your comments to my earlier letter regarding language concerns, and very
much look forward to wrapping up our deliberations in time for the December 9,
1994 mailing to the Bank's Board of Directors.
Sincerely,
Thomas M. Petro
Senior Vice President
CC: Larry McAlee, Esquire
Bill Mixon
Geoff Halberstadt
Rick Crnovich
Dataprocessing Evaluation Team
Attachments (7)
THE BRYN MAWR TRUST COMPANY
Bryn Mawr, Pennsylvania
December 1, 1994
TO: Gloria Brashears, FiServe CBS
FROM: Nancy Gross
RE: CBS License and Service Agreement Outstanding Issues
Telephone Banking - Date Driven Transaction History
--------- -----------------------------------------
<PAGE>
I received a call on Friday, 11/18 from Kristen Backus stating that
you will be able lo give transaction history from a specified start date, five
transactions at a time, with the option to continue or opt back to the menu.
She will be sending us a revised Business Requirement write-up.
Telephone Banking - Per Diem Figure on Loan Payoffs
---------------------------------------------------
We are also waiting for Kristen to send us a re-written Business
Requirement adding customer access to Per Diem Loan Payoffs.
Safe Deposit
----
It would be excellent to move full alpha/numeric safe deposit
conversion to the Day 1 list. This conversion, however, must include an
interface with Culverin for new "account" opening (box rental).
Currency Transaction Reporting
------------------------------
Andy Avellino, our compliance officer, reviewed the package of
material on the Regulatory Assistance Center's product and finds it to be as
good or better than the Achley product.
CC: Tom Petro
THE BRYN MAWR TRUST,COMPANY
BRYN MAWR, PENNSYLVANIA
To: Gloria Brashears of FiServ CBS
From: Jeanne Really 12/2/94
RE: Changes to the Line of Credit Rate Change Backdating Modification
Section I Overview
Business Description
--------------------
Change requested:
Add new variable rate capabilities to support method used on Home Equity and
Personal Line of Credit accounts. These products provide for a variable
interest rate that is determined upon the day a rate change takes place. on the
day a rate change takes place, the new interest rate is determined by adding a
margin to the lowest
<PAGE>
index rate entered on the index associated with the account
during the billing cycle. If the index rate increased during the billing cycle,
the new interest rate becomes effective on the first day of the next billing
cycle, and no adjustment in accruals is necessary. However, if the index rate
decreased during the billing cycle, the new interest rate is
effective on the first day of the billing cycle in which the rate decreased, and
accruals will be adjusted accordingly on the day the rate change takes place.
Minimum and maximum interest rates also apply to these accounts.
THE BRYN MAWR TRUST COMPANY
BRYN MAWR, PENNSYLVANIA
TO: Gloria Brashears of FiServ CBS
FROM: Jeanne Really 12/2/94
RE: Changes to the Payment Factors for Credit Line Modification
Section 1 Overview
Process overview
----------------
Change Requested:
Currently, two tables of payment factors are utilized. One for Home Equity
Credit Lines, and the other for Personal Credit Lines. The monthly payment is
determined for some personal and home equity products by multiplying the
outstanding principal at the time the bill is to be produced times a factor,
which corresponds to the current interest rate on the account, plus accrued
interest and insurance. other personal and home equity products' monthly payment
is determined by multiplying the outstanding principal at the time the bill is
to be produced times a factor to determine the total payment due. The interest
and insurance accrued is included in the payment calculation. For all products,
the payment calculation will always round up to even dollars. For example, if
it is determined through the calculation that the payment is $43.010 the system
will round the payment up to $44.00.
Change Requested:
If the outstanding balance is $2,500.00 and the current interest rate is
10.50%, then the calculated payment will be $44.00, plus accrued interest and
insurance for some products. For other products, the total payment due will be
$44.001 including accrued interest and insurance. If the $44.00 is below the
minimum payment for that product, the minimum payment will be billed.
Constraints
-----------
An existing CBS payment type will be utilized. These loans must reside in a
special product type.
THE BRYN MAWR TRUST COMPANY
BRYN MAWR, PENNSYLVANIA
TO: Gloria Brashears of FiServ CBS
FROM: Jeanne Really
RE: Changes to the Unapplied Payments Bucket Modification
Section 1 overview
Business Description@n
----------------------
<PAGE>
Add:
Provide the ability to enter and track unapplied funds. Unapplied funds
are credited when a borrower's payment is not sufficient to fully satisfy a
payment due; or when a borrower makes a payment in excess of the payment due.
Process Overview
----------------
Add:
Unapplied payment buckets will be available on all products, and specified
in the distribution string if it is to be employed.
THE BRYN MAWR TRUST COMPANY
Bryn Mawr, Pennsylvania
TO: Gloria Brashears of FIserv CBS
FROM: 'Joseph Saraceno
RE: Changes to the Construction Loans Modification
DATE: December 1, 1994
Section 1. Overview
Process overview
----------------
Change Requested:
Three new reports and one new special form are required. The special form
is a notice used for the borrower to request advances and must be able to be
printed at local printers in the loan and loan accounting areas (as opposed to
the operations area). The new reports are as follows: (1) a listing of all sub-
commitments by loan account number; (2) a listing of all stand-by letters of
credit units; and (3) a listing of all loans with an original term of greater
than one year.
Section 3.8. Management Reporting
Add:
Provide a new report titled Stand-By Letters Of Credit. Report will include
only those units identified with the Purpose Code as being stand-by letters of
credit. The output on the report will be the Loan Account Number, Borrower's
Short Name, unit Number, Sub-Commitment Amount, Amount Disbursed and Amount
Available. This report will be sorted by Loan Account Number and Unit Number
and aggregate bank totals at the end of the report.
Provide a new report titled Loans With Original Term Greater Than One Year.
Report will include only those loans whose original term (the time period from
the origination date to the original maturity date) is greater than one year.
Report will exclude all units whose purpose code defines them as stand-by
letters of credit units and will also exclude those units whose purpose code
defines them as suspense funds. The output on the report will be the Loan
Account Number, Borrower's Short Name, Commitment Amount, Amount Disbursed,
Amount Repaid, Amount Outstanding and Amount Available. This report will be
sorted by Loan Account Number and aggregate bank totals
<PAGE>
at the end of the report.
THE BRYN MAWR TRUST COMPANY
Wayne Operations Center
Wayne, Pennsylvania
December :t 1994
To: Gloria Brashears
FROM: June Falcone
RE: CBS License and Service Agreements
The following are changes and/or modifications to Exhibit A to
Schedule 3:
BackRoom Systems Software Interface:
------------------------------------
APCS
----
This section is fine with one exception: Our current environment for APCS uses
the system for deposit correction notification only, whereby making the
correction to the account at the Proof machine. After reviewing the details to
the changes in the interface which CBS will provide for us, it illustrates that
the corrections which we are currently making at the proof machine can be made
during data entry to the account through APCS. Internally we will need to
change procedures U) allow for the correction to be made during the data entry,
however it will be a time savings factor and I believe we will want to go this
route. Lisa Amabile will be working on the internal changes to allow us to
utilize the automated corrections within the APCS.
RICS
----
Melody will get back to me about the following questions I asked: -
Will fees post to all accounts not on Account Analysis? Will the description
also pass with the fee for Reg DD purposes?
Will the notices print the fee charged along with the DIR?
Will the fees for DIR items pass to Account Analysis?
The BAGS software separates the batching for savings and checking, due
to the fact that they are two different systems, will this also apply? Can we
create DIR debits on Savings accounts, whereby automatically placing the
necessary hold, charging the fee and processing the debit?
<PAGE>
Note: At this time we manually place a hold on each account receiving a DIR
debit during the nightly posting. We are looking into changing this function on
our current system parameters in the BAGS software.
Overdraft Processing - "Holdover":
----------------------------------
Deleted.
The tiered pricing should be changed as follows:
<TABLE>
<CAPTION>
Items Fee
<S> <C> <C>
001-001 $25.00 Maximum charge of $55.00.
002-004 $10.00
> 004 $ 0.00
</TABLE>
--I was not originally aware of our policy, however we do not exceed a charge of
$55.00
Under the constraints where it indicates that fees that are "accessed" in batch
can rot be overridden by an officer, Melody has informed me that all decisions
will be made during the process and not assessed in batch.
I was concerned about the reports we would be getting from the changes that are
listed.
Melody informed me that it would keep track of what the actual charge should be
and what is actually going to be charged to the account by the officer. This is
noted on Section 2.4, however there is no example provided.
Bankcard Limits:
---------
This section will be rewritten into BMT terminology. Certain authorized
officers should have the ability to change (increase or decrease) bankcard
limits. The 10 standard VIP class codes mentioned an! codes which are preset in
the overall bankcoding. This would allow the representatives to choose a VIP
class/Limit during account opening. These VIP codes will be "overridable" to an
authorized officer, whereby making any limit applicable.
W-8'
The regulatory requirement for Foreign status in PA must be recertified every 3
years.
Therefore, we need a date separate from the W-8 generation date noted in the
schedule to keep tack of all returned W-8 forms. Our current system calls this
a "Certified Date", a calculation of 3 years is added onto this date when the
next W-8 notice is generated.
I requested from Melody that this section be modified to include this date and
the
<PAGE>
corresponding calculation.
Other Issues:
Cash Management - PC Banker/Telecash
MicroACH
Postal Barcoding - Melody will get back to me about this.
V-4
cc: S. O'Brien
R. Moore
THE BRYN MAWR TRUST COMPANY
BRYN MAWR, PENNSYLVANIA
TO:
Gloria Brashears of FiServ CBS
FROM: Jeanne Really 12/2/94
RE: Changes to the Construction Loans Modification
section 1 overview
Business Description
--------------------
Add:
Provide ability to track multiple construction loan commitments, having
multiple.purposes, with one loan account representing the total (gross)
commitment amount.
Process Overview
Add:
When a new construction loan is setup, sub-commitments are identified, including
unit number, unit description, a 2-digit code which represents the purpose of
the unit, and the subcommitment amount.
Section 3 Changes to Application
<PAGE>
3.1 Account Opening (New Account Function)
--- --------------------------------------
Change:
Unit Balance - The Outstanding Balance for the unit.
Add:
Purpose Code - a 2-digit representation of the purpose for a unit
3.11 Special Forms (NoticesIStatements)
---- ----------------------------------
Add:
Provide a new notice, Construction Advance Request, which is at the sub-
commitment level.
ne Bryn Mawr Trust Company
BRYN MAWR. PENNSYLVANIA 19010-3396 (610) 525-1700
December 2, 1994
Robin H. Smith
Senior Vice President
Fiserv CBS Division
2601 Technology Drive
Orlando, FL 32804
RE: Response to November 29, 1994 Letter
--------------- ------------- ------
Dear Robin:
Thank you for your quick reply to my letter dated November 23. I'm responding
to your letter of November 29, 1994 to outline our understanding of the proposed
resolutions and to further our discussion on several unresolved issues.
By this letter I am also raising -a new issue concerning an additional $38,000
hidden expense to the bank which is a CBS requirement to satisfy a Day One
conversion issue.
Regulatory Assistance Center - $38,000 Additional Bank Expense
The CBS response to the Bank's Business Requirement for Currency Transaction
Reporting indicates a one-time expenditure of $18,000 at a deeply discounted
license fee, and an annual maintenance fee of $3,600 to satisfy the Business
Requirement, in addition to the maintenance fee to be paid to CBS under the
Agreement of $3,000 monthly. The Bank presently uses the Achley System for this
purpose and has incurred prior one-time expenses for the use of the Achley'
system. I understand that the Achley system is not AS/400 compatible so that
there is no opportunity to interface the CBS Software System with it.
Since you play a significant role in the final pricing arrangement, and I'm sure
that you can appreciate my desire to avoid introducing new monetary surprises at
this late date to the Bank's Board. I'd like to see all. of the costs
associated
with this Business Requirement included in the Agreement and trust that you will
incorporate the appropriate documents required to secure our favorable license
and maintenance terms for the use and complete interface of whatever software
might be required to satisfy all the Business Requirement.
<PAGE>
when you want a banker, not just a bank
--------
Mr. Robin H. Smith
December 2, 1994
Page 2
I also want to confirm by this letter my understanding that there is no other
third party software required to satisfy any of the remaining Business
Requirements included on Exhibit A and Exhibit B to Schedule 3 of the Agreement
or to otherwise fully access all of the Software and provide complete use of the
System.
Conversion Date
Robin, my team agreed to compromise on the October 9 conversion date, but remain
adamant concerning the proximity of the conversion date to November month-end.
They will not, under any circumstance, permit me to accept a 1995 conversion
date later than November 24. Can you agree to a conversion date on or before
November 24, 1995?
We also reiterate your commitment to meet with me and my staff to perfect
Project Plan in such a manner as to insure that the conversion is completed on
------
or before November 24, 1995, and that you will re-work the Project Plan that
will be incorporated in the Agreement with a specific Conversion Date and ;a
professionally reasonable approximate schedule of the timing of key milestones
necessary to achieve the Conversion Date.
Incorporation of Mr. Martire's Letter
We agree to accept the incorporation of Frank Martire's letter as you propose
the amendment to that letter. Please send me the revised language this week.
Annual Cap on CPI Increases
We agree on the CPI increase cap for the initial five years.
Cap on Maintenance Fee Increase after Initial Term
We agree that the "cap" for the renewal of the maintenance agreement will be
$5,000 per month following the initial term of the agreement, but note that the
term may be two (2), three (3), four (4) or five (5) years, depending on the
term
of such contracts that the Company is offering at that time, and with
appropriate CPI escalation as the parties might agree to at that time.
Incorporation of the Vendor Questionnaire
I look forward to receiving your notice this week concerning the language
changes you propose to the Vendor Questionnaire.
Mr. Robin H. Smith
December 2, 1994
Page 3
<PAGE>
Definition of a Successful Conversion
We agree to modify the definition of a successful conversion by restating that
the responsibility of Fiserv CBS with regard to the items listed below is
limited to exercising reasonable professional effort to help facilitate the
interface of these systems with the CBS Software System:
g. Level 3 Audit Software
h. IPS Accounts Payable Software
i. IPS Investment Account Software
j. IPS Fixed Asset Accounting Software
k. Customer Insights MCIF file preparation
m. GG Pulley POD Interface
We also trust that the Regulatory Assistance Center interface will be added to
the list of interfaces required as part of conversion acceptance.
Day Two Items
I discussed the delivery timeframes of Day Two items with the group. The three
highest priority items are listed below. The team considers these to be very
important items and believe that a March 31, 1996 delivery is pushing the limits
of acceptance. Notwithstanding, I relayed your concern about the timetable that
would have to met to deliver by March 31, 1996 and that CBS might require an
additional couple of months for these highest priority Day Two items.
1. Fastcloser Interface
2. Teller Check/hold display
3. Member Banker Identifier
As it relates to the Member Banker Identifier, I need a commitment from CBS to
find an acceptable Day One work around as part of the conversion effort as it
relates to the CIF and Transaction Subsystems. We have this identified on the
Fusion transaction systems today and tellers will require access to it in order
to provide uninterrupted service to our Members. The team also expressed their
openness to consider your reasonable proposal for a separate timetable for the
Member Banker Identifier. Given that this will impact a large number of CBS
screens, the team thought that it might be added to screens as they are
redeveloped or modified by CBS for other purposes.
Mr. Robin H. Smith
December 2, 1994
Page 4
The remaining Day Two items are prioritized as follows:
4. Bill Payment Interface
5. Overpayment of a loan at Payoff
6. Account Analysis Statement Regeneration
7. HUMDA Interface
8. Duplicate Social Security Number
<PAGE>
Cash Management Products
We agree to incorporate the Cash Management Product as a Day One item for
$55,000 which is a list price of $75,000 discounted by $20,000 per the paragraph
below, and confirm your commitment to work out a solution to the remaining cash
management issues relating to multi-bank reporting, data exchange, and same day
lock box deposit reporting.
One-Time Financial Discounting
I wish to clarify my interpretation of the discount in one-time fees which you
propose:
The waiver of Fusion Deconversion Fees of $39,000 is Acceptable to me provided
that it is incorporated into Frank Martire Is letter and is worded in such a way
so that there is no deconversion expense obligation on the part of the Bank
related to activities performed by Fiserv Fusion.
The Cash Management Discount of $20, 000 is acceptable as presented.
With regards to the Travel and Living Expenses Discount of $25, 000, we note
that there is no estimate of travel and living expense in the Agreement, even
though it was estimated to be $75,000 in the CBS Proposal. Our acceptance is
conditional upon your.agreement to apply, the discount to the first $25,000 of
-----
travel and living expense incurred by Fiserv CBS and to your confirmation that
the estimated travel and living expenses remain $75,000.
With regard to the Modification Discount we note that the actual cost of the
modifications will be increased by $5, 000 as opposed to reduced by $16,000 as
you suggest, because of the Bank's agreement to drop the Overdraft Processing -
"Holdover" Business Requirement valued by Fiserv CBS at $21,000.
Mr. Robin H. Smith
December 2, 1994
Page 5
This should resolve the outstanding issues from my letter dated November 23,
1994 and your response dated November 29, 1994. 1 am following this letter of
agreement with another letter that details the language concerns that we have
concerning the Agreement. I also expect sign-off's or Business Requirement
modifications by the end of this week.
We look forward to finalizing the Agreement this week or perhaps ,early next
week.
Sincerely,
Thomas M. Petro
Senior Vice President
CC: Larry McAlee, Esquire
Bill Mixon
Geoff Halberstadt
Rick Crnovich
<PAGE>
Dataprocessing Evaluation Team
The Bryn Mawr Trust Company
BRYN MAWR. PENNSYLVANIA [9010-3396 (610) 525-1700
December 2, 1994
Robin H. Smith
Senior Vice President
Fiserv CBS Division
2601 Technology Drive
Orlando, FL 32804
Dear Robin:
As I promised in my letters to you dated November 23 and December 2, 1994, we
have reviewed the revised CBS Agreement and have prepared a list of our issues.
By this letter, I am seeking to address concerns relating to the language of the
Agreement that were not addressed in my earlier letters.
Please respond with a revised blacklined copy of the Agreement and Schedules and
related documents with your changes underlined so that we may complete a timely
review and hopefully gain the approval required to enter into this Agreement
promptly.
Unless otherwise provided in this letter, the issues addressed in my letter of
November 23, 1994 are resolved as we agreed and you confirmed in your letter and
further clarified by my letter of December 2, 1994.
Proposed Amendments, Deletions and Changes
to the License and Service Agreement
(the "Agreement")
I
The Agreement will be in our holding company name, "Bryn Mawr
Bank Corporation". We recommend that the Agreement and related
Schedules and Addenda will be changed as follows:
1.4 Delete from the third line the words "that is labeled as
such".
<PAGE>
when you want a banker, not just a bank
--------
Mr. Robin H. Smith
Agreement Language
December 2, 1994
Page 2
1.5 'Computer System' means that dedicated computer machinery and manufacturer-
supplied software that meets or exceeds the requirements identified on Schedule
2. Client shall have the sole responsibility to own or lease the equipment.
Client shall have responsibility to unpack, install, test and maintain the
Computer System in accordance with all applicable building or electrical codes,
regulations or requirements. Company will provide Client assistance with the
planning and installation of the Computer System as detailed on Exhibit A to
Schedule 2 of this Agreement iq consideration for Client acquiring the equipment
through the Company.
1.6 'Conversion' means the development by the Company of computer programs
designed to transfer the Client's existing data to the Software System and the
actual successful transfer of Client's existing data to the Software System in a
form which is efficiently readable by the Software System and that can be
effectively processed by the Software System. The Company hereby agrees to
accept Fiserv Fusion deconversion media and formats on behalf of Client. Client
agrees to provide Client records and data not
processed with Fiserv Fusion in a media format approved for use by the Company
in order for the Company to fulfill its Conversion related tasks. Conversion of
Client's data to the Software System shall be deemed to be completed upon the
conclusion of the events identified on Schedule 4 of this Agreement as well as
the following:
(i) Application file to file conversion of Client input files, reports and
history to the Software System. Client must be able to prove monetary
amounts, with reasonable allowance for rounding errors.
(ii) All Exhibit A to Schedule 3 modifications are delivered, operational and
free from
Specification Nonconformities.
(iii) through (vi) as per my letter of November 23, 1994, clarified by your
letter of November 29, 1994 and further clarified by my letter of November 30,
1994.
1.9 'Enhancements' mean changes made to the Software System which add program
features or functions not originally within the Software System along with
appropriate Documentation, generally packaged as additional modules of
Mr. Robin H. Smith
Agreement Language
<PAGE>
December 2, 1994
Page 3
the Software System, and which is generally provided to Company's clients upon
payment of additional license fees. Company reserves the right to reasonably
define which changes are Enhancements and will be priced separately. Client
will have no obligation to acquire or to use Enhancements.
1.11 'License Feel means the total sum specified on Schedule 1 for the
subsystems of the Software System identified on Schedule 1 of this Agreement.
Company hereby agrees that there will be no additional License Fees payable by
the Client for use of the modifications identified on,Exhibit A and Exhibit B to
Schedule 3.
1.12 'Maintenance Services' means services to keep the Software System up to
date through periodic Upgrades, sometimes referred to as base releases,
including without limitation maintaining compliance with regulations and for
services to correct a Nonconformity in the Software System as it is upgraded
from time to time and for modifications identified on Schedule 3 of this
Agreement. Maintenance Services will also apply to Enhancements, though the
Company may add additional maintenance fees for Enhancements which the Client
consents to acquire and use. Maintenance Services are available only for the
current and last prior release of the Software System.
1.14 'Nonconformity' means a failure of the Software System and modifications
identified on Exhibit A and Exhibit s to Schedule 3 of this Agreement to
accurately and efficiently process Client's data or to perform functions
described in Company's Documentation. Each reported Nonconformity will be
classified by Company in accordance with the following list of priorities:
(a) through (e) are acceptable as presented in the Agreement.
1.17 'Professional Service Fees, means the those services provided by Company
to perform installation and Conversion activities, make modifications and
interfaces, train Client's employees or other services referred to in Schedule 1
of the Agreement and agreed to by Company and Client. Professional Service Fees
for the modifications included on Exhibit A and Exhibit B to Schedule 3 are
defined in the Professional Services Section of Schedule 1 of the
Mr. Robin H. Smith
Agreement Language
December 2, 1994
Page 4
Agreement. The Aggregate Professional Services Fees agreed to by the parties in
Parts A, B and C of the Professional Services Section of Schedule 1 to the
Agreement total $266,825 (which reflects the $16,000 discount offered per Robin
Smith's letter dated November 29, 1994). Additional Professional Services Fees
may be incurred outside of those identifies on Schedule 1 at the request of
Client, and agreed to by Company, for the daily rates identified on Schedule 1
in Part D.
1.18 'Project Plan' means that document, substantially similar to Exhibit A
of Schedule 4 of this Agreement, which from time to time will be updated and
amended by mutual agreement of the Company and Client for any work contemplated
by this Agreement. Company and Client agree that additions, modifications or
changes to the Project Plan are meant to add detailed task items for
<PAGE>
the purpose
of better project management and in no case are to be construed as a change to
the scope, nature or timing of the Conversion nor construed as an agreement to
delay or change the Conversion Date.
1.19 'Software System' means the computer programs in source code and
procedure statements in machine readable form, together with three (3) sets of
the Company standard Documentation including Complimentary Product Guides and
Internal Operations Guides for the subsystems identified on Schedule 1, License
Section Part A of this Agreement and
modifications identified on Exhibit A and Exhibit to Schedule 3. The Software
System does not, unless specified differently, include
separate, independent and stand-alone modules, subsystems or modifications which
have been developed and maintained by the Client or any other Third Party.
1.20 'Specification Nonconformity, means a failure of the modified Software
System to operate in accordance With the System Detail Specifications.
Following client acceptance of modifications, Specification Nonconformities will
be handled according to the list of priorities defined in Section 1.14 of this
Agreement.
1.23 'Third Party' means any party other than Company's employees or
subcontractors and the Client and its subsidiaries and their employees and their
respective agents and
subcontractors.
Z-v
1.24 'Upgrades, means changes made to the Software System and
Mr. Robin H. Smith
Agreement Language
December 2, 1994
Page 5
related Documentation to maintain compatibility with operating system software
releases, improve upon previously existing features, perform program fixes and
maintain the Software System in compliance with regulatory requirements and
which are sometimes referred to as "base releases" and are available to Client
for no additional License, Maintenance or Professional Services Fees.
new 'Conversion Date' means the successful attainment of results identified in
Section 1.6 of this Agreement and the successful completion of tasks identified
on the Project Plan which is scheduled to occur on or before November 20, 1995.
This date cannot be delayed or postponed without prior written agreement by
Company and Client.
2.6 Company grants to Client the right to Use any Enhancements or modifications
furnished or authorized by Company pursuant to a separate written agreement.
3.2 "Functional Requirements" in this Section should read "Business
Requirements".
3.3 Company shall provide a Project Plan substantially similar to the Project
Plan attached as Exhibit A to Schedule 4 of this Agreement. The Project Plan
provided to the Client shall be worked backwards from the Conversion Date and
shall contain the nature and timing of the tasks required to complete the
project, some of which are to be performed by Company and some by Client. The
Company and Client agree that any additions, changes or deletions to the Project
Plan will be incorporated as part of Schedule 4 to this Agreement by mutual
agreement and in no case will any such change
or deletion delay or postpone the
<PAGE>
Conversion Date or cause a change in the fees specified on Schedule 1 of this
Agreement.
3.4 Company is to provide modifications defined on Exhibit A and Exhibit B to
Schedule 3 of this Agreement, and is to provide installation and conversion
services and training services for Client for the Software System. The fees are
specified on Schedule 1. The nature and timing of installation, conversion tasks
and training shall be specified in the Project Plan mutually agreed upon by the
parties hereto.
4.2 Company shall maintain the Software System with appropriate features that
will enable the Client to comply with applicable regulations.
Mr. Robin H. Smith
Agreement Language
December,2, 1994
Page 6
4.7 "commercially best" should read "commercially reasonable best".
4.9 "(inclusive of the integration of Third Party products with the Software
System)" should read "inclusive of the integration by other than Company of
Third Party products with the Software System)".
(i) It appears that a word or phrase may be missing from the language of clause
(i) of Section 4.9.
4.11 The initial Maintenance Fee specified in Schedule 1 of this Agreement
shall be effective on the Conversion Date and shall continue for a period of
five (5) years. There may be an increase in the Maintenance Fee specified on
Schedule 1 on each anniversary of the Conversion Date. The Maintenance Fee
shall not be increased by more than the lesser of (i) eight percent (81) per
year or (ii) the change in the U.S. Department of Labor, Consumer Price Index
for Urban Wage Earners and Clerical Workers, All Cities, (1982 = 1001) for the
twelve month period preceding the annual anniversary of the Conversion Date,
whichever is lesser.
4.12 Maintenance Fees shall also be subject to increase following the deliver
of Enhancements to the Software System accepted by Client pursuant to a separate
written agreement or due to changes in the number of accounts processed as
specified in Schedule 1 of this Agreement.
5. Change the reference in the second sentence which reads "the License and
Service Agreement" to read "this Agreement" in order to be consistent.
6.2 Maintenance Services may be renewed after the initial five
(5) year term following the Conversion Date for a successive term of one (1),
two (2),'three (3), four (4) of five (5) years depending upon Company's
business practice for renewal agreement terms in effect at that time and
mutually agreed to by the parties hereto at a monthly fee of $5,000 for the
first year of such agreement.
9.1 Client shall give Company full access to the Processing Location, the
Software System, and the Computer System to enable the Company to provide
services hereunder and shall make available information, facilities, and
services reasonably required by company for the performance of its obligations
under this Agreement provided that Client's
Mr. Robin H. Smith
Agreement Language
<PAGE>
December 2, 1994
Page 7
cooperation with Company will not unreasonably interfere with the Client's on-
going operation of its business.
12.1 The Company warrants, for the initial term of the Maintenance services
that the Software System will perform the functions specified in the
Documentation identified in Exhibit A of Schedule 1 to this Agreement. In the
event the Software System fails to perform any of those functions, and the
Company is notified in writing stating with
particularity the nature of the Software System's failure to perform those
functions, Company will promptly commence to correct these Nonconformities in
accordance with the same provisions outlined in Section 4 of this Agreement.
This warranty shall not apply to unauthorized changes to the Software System or
by incorrect use. Circumvent procedures recommended by Company and agreed to by
Client pursuant to Section 1.14 of this Agreement shall not constitute incorrect
use for the purpose of this Agreement. Company warrants the Software System
will operate to performance standards identified in this Agreement on the
minimum Computer System specified on Schedule 2 of this Agreement and both
parties agree that the warranties given by Company are conditional upon the
procurement and maintenance by Client of the Computer System.
14.1 (a) the Use of any part of the Software System in combination with
materials or software not approved by Company; or....
15.2 Capitalize the words "Enhancements" and "Upgrades".
17.3 The occurrence of any of the following shall constitute a default by the
Company: (i) Company shall fail to make payment due under this Agreement after
ten (10) days' written notice from Client to Company, or (ii) Company has
breached or failed to abide by a material provision of this Agreement and
Company has not cured the breach or failure (or, if the breach or failure is
such that its cure would take a longer period, commenced to cure and proceeds
diligently therewith) within thirty (30) days of receiving written notice from
Client specifying the breach or failure, or (iii) Company terminates or suspends
its business, becomes subject to any bankruptcy or insolvency proceeding under
federal or state law (unless removed or dismissed within sixty (60) days from
the commencement thereof) or becomes insolvent, becomes subject to direct
control by a trustee, receiver or similar authority, or makes an
Mr. Robin H. Smith
Agreement Language
December 2, 1994
Page 8
assignment for the benefit of creditors, or(iv) the installation and use of the
Computer system and the Software System including without limitation, the
modifications listed on Exhibit A to Schedule 3 is delayed beyond the delivery
dates specified in the Agreement, or (v) the delivery, installation and use of
the modifications to the Software System listed on Exhibit B to Schedule 3 are
delayed beyond the delivery dates specified in the Agreement, or (vi) the
failure after receipt of written notice from the Client specifying the nature of
the failure of the Company to specifically address, in an efficient and
professional manner, within fifteen (15) business.days of receipt of said
notice, any Nonconformity of
<PAGE>
the Software System pursuant to Section 4 of this
Agreement, or (vii) the failure by the Company to provide appropriate software
which will enable the Client to comply with the federal and state regulations,
or (viii) the failure by the Company to provide appropriate Upgrades to the
Software System, or (ix) the failure by the Company to maintain compatibility of
the Software System with the Computer System, or (x) an attempted assign or
assignment of the Agreement by the Company.
17.4 In the event of a default by Company, Client shall have the following
remedies (i) Client may suspend performance of any or all of its obligations
under the Agreement and so long as the non-fulfillment by the Client of its
obligations under the Agreement does not prevent the performance by the Company
of its obligations under the Agreement the Company shall continue to perform-
such obligations, and further provided that, as long as the event of default by
the Company continues, the Client is not obligated to pay the Company any sums
due under the Agreement, (ii) Client may, upon notice to the Company, terminate
this Agreement, and
(iii) Client shall have all other rights and remedies provided by law,
including equitable remedies.
17.5 In the event of Termination of this Agreement, whether by Company or by
Client, Company shall allow Client up to one
(1) year to continue using the Software System, provided thereafter, Client
returns or destroys the Software System and provided that Client continues
to pay all fees due and payable under this Agreement and Company returns
all information and data which the Company has concerning the Client and
any of its subsidiaries.
Mr. Robin H. Smith
Agreement Language
December 2, 1994
Page 9
Schedule 2 and Schedule 2.1: Hardware Configuration and Pricing
Bill Mixon and I have been unable to reconcile the hardware and IBM operating
system software prices listed on Schedule 2 and Schedule 2.1 of the Agreement to
prior CBS configurations. I believe that further clarification of the
configuration and associated fees is required.
I understand that the Bank's team members have been working with your team on
----
questions relating to the Business Requirements and I expect to have either
written changes or sign-off's in hand for the Exhibit A to Schedule 3 Business
Requirements by Friday December 2. These will be promptly delivered to you.
I have also attached a checklist of the Schedules, Exhibits and Addenda to the
Agreement that will help us both in pulling together the documents required for
my delivery of the Agreement to the Bryn Mawr Bank Corporation Board for
approval.
I look forward to your written response to this letter in the form of a revised
Agreement with blacklined annotations indicating where changes have been made.
I realize that these suggested changes will result in a renumbering of certain
provisions of the Agreement and I ask you to keep this in mind when you are
preparing the revised draft of this Agreement.
Most important though, I look forward to moving beyond this phase of our working
together in order to turn our full energies toward a successful implementation
of the CBS system and a long and mutually satisfying relationship for both CBS
and the bank.
<PAGE>
Sincerely,
10
Thomas M. Petro
Senior Vice President
CC: Larry McAlee, Esquire
Bill Mixon
Geoff Halberstadt
Rick Crnovich
Dataprocessing Evaluation Team
Mr. Robin H. Smith
Agreement Schedules, Exhibits and Addendum
December 2, 1994
Page 10
Checklist of Attachments, Schedules and Amendments
to this Agreement
Schedule 1 Fees: License Section, Professional Services
Section, Maintenance Services Section
Exhibit A CBS Documentation Request
Schedule 2 Third Party Hardware and Operating System Software for AS/400 Model
310
Schedule 2.1 Third Party Hardware and Operating-System Software for AS/400
Model 200
Exhibit A System Engineering Support
Schedule 3 Business Requirements
Exhibit A Business Requirements to be Provided Prior to Conversion
Exhibit B Business Requirements to be Provided Following Conversion
Schedule 4 Preliminary Project Plan
Exhibit A Bryn Mawr Bank Corporation Project Plan Gantt Chart
Addendum No. 1 Consisting of:
(i) Professional Services Addendum to Section 3 concerning thirty five (35)
programming days to be used by Client at no cost to Client (ii) Warranties
Addendum to Section 12 concerning Software System performance. @ standards, and
(iii) Non-Assignment Addendum to Section 19 concerning Termination in the event
of Assignment.
<PAGE>
Addendum No. 2 Mr. Frank Martire's Letter of November 11, 1994 concerning Early
Termination of the Fiserv Fusion Datacenter Processing Agreement and related
-------------------------------
early termination fees, and the waiver of any and all Deconversion related
expenses associated with Conversion from Fiserv Fusion to the Fiserv CBS
Software System.
Mr. Robin H. Smith
Agreement Schedules, Exhibits and Addendum
December 2, 1994
Page 11
Addendum No. 3 CBS Response to the Vendor Questionnaire of March 10, 1994.
----------------------------------------
Addendum No. 4 Fiserv Comprehensive Banking System Proposal
--------------------------------------------
for The Bryn Mawr Trust Company dated September 7, 1994.
-------------------------------
Addendum No. 5 Fiserv Inc. Guarantee for Fiserv CIR, Inc.
Addendum No. Letter from Fiserv CBS and Fiserv Fusion
Inc. specifying agreement to allow Client to continue to process
on the Fiserv Fusion system if the Conversion Date is later than December 31,
1995 under the Maintenance Fee terms of this Agreement.
Addendum No. Confidentiality Agreement between Company and Client dated
-------------------------
November 7, 1994.
Addendum No. Letters to or from the parties to the Agreement dated November 23,
1994, and November 29, 1994, and three (3) letters dated December 2, 1994.
The Bryn Mawr Trust Company
BRYN MAWR, PENNSYLVANIA 19010-3396 (61O) 525-1700
December 5, 1994
Robin H. Smith
Senior Vice President
Fiserv CBS Division
2601 Technology Drive
Orlando, FL 32804
Dear Robin:
I am writing to confirm our understanding of the items detailed below and will
assume that these issues are resolved as stated below unless I hear from you in
writing to the contrary.
Teller Equipment
<PAGE>
We understand that some of our present teller printers cannot be used with the
Software System and that others can be if, appropriately upgraded. We
understand that you will provide the appropriate upgrades and will recommend
replacements where necessary as detailed below. The hardware and software will
be provided at an additional cost to@the Bank subject to discounts as specified
below. All upgraded printers and replacement printers are to be certified by
Company to be,fully compatible with the Software System.
IBM 4710 Printers
This confirms our understanding that the IBM 4710
Receipt/Validation Printer cannot be used in conjunction with the Software
System and will have to be replaced. We are waiting to hear from you concerning
a replacement recommendation and associated price information. We presently
have twelve (12) of these that will have to be replaced. The replacement
equipment and any replacement software will be available at a fifteen percent
(15%) discount from IBM list price.
IBM 4712 Model 001 Printers
This confirms our understanding that the IBM 4712 Model 001 Receipt/Validation
Printer is fully compatible with the Software System and that you will provide
----------
interface cards, cables, and any software that is required to fully integrate
these printers into
when you want a tanker not just a bank
------
Mr. Robin H. Smith
December 5, 1994
Page 2
the Software System. We presently operate twenty two (22) of these printers.
The cables, interface cards and any other equipment and software will be
available at a fifteen percent (15%) discount from IBM list price.
IBM 4720 Model 003 Printers
This confirms that the IBM 4720 Model 003 Form/Passbook Printer cannot be used
------
with Software System. We are waiting to hear from you concerning a replacement
recommendation and associated price information. We presently have two (2) of
these printers that will have to be replaced. The replacement printers and
related interface cards cables and other equipment and software will be
available at a fifteen percent (15%) discount from IBM list price.
IBM 4722 Model 001 Printers
This confirms our understanding that the IBM 4722 Model 001 Document Printer is
fully compatible with the Software System and that you will provide interface
----------
cards, cables, and any software that is required to fully integrate these into
the Software System. We presently operate four (4) of these printers. The
cables, interface cards and any other equipment and software will be available
at a fifteen percent (15%) discount from IBM list price.
Teller Personal Computer Configuration
This confirms our understanding that the IBM PS/2 E 486 SLC2 50 mhz is
acceptable for teller stations and is fully compatible with the Software System,
CBS Teller Subsystem, IBM CT run time, Microsoft Windows and the IBM 4700
printers identified above, and will operate the
<PAGE>
CBS Teller Subsystem utilizing
MS-Dos 6.0. We understand that this configuration is acceptable to
Company and that Section 12 - Warranties in Addendum 1 to the Agreement will be
changed to reflect this.
Conversion Date
This confirms our agreement the Conversion Date will be on or before November
24, 1994.
Conversion Process and Resources
This confirms our understanding of Installation and Conversion services
identified it Section 1.6 of the Agreement and the associated fee in the
Professional Services Section Part A of
Mr. Robin H. Smith
December 5, 1994
Page 3
Schedule 1 of the Agreement. We agreed that there will be no other fees for
Installation and Conversion other than those identified in Professional Services
Section Part A of Schedule 1 of the Agreement. We also understand that Company
will perform many of the conversion related tasks at the Bank's locations.
Pre-Installation Operations Audit - This is-a review by the CBS installation
team designed to acquaint them with all aspects of the Bank's current operations
and will involve at least two (2) CBS employees on-site at the Bank's location
for three (3) days.
Common File Training - This is a one-week long intensive on-site training at the
Bank's location to introduce Bank personnel the Software System Common File
concept and will involve at least two (2) CBS employees on-site at the Bank's
location for five (5) days.
Conversion Planning Testing and Sign-off - Following the receipt of the Bank's
files from Fiserv Fusion, and from the Bank for safe deposit box and
construction loans, Company will write and test file-to-file conversion programs
on the Company's computer systems. Following such testing and then verification
and Client sign-off, these programs will be loaded by Company on to the Client's
Computer Systems for execution of the "live" conversion on the Conversion Date.
Pre-Conversion Training - Client will send a number of key individuals to
Company's headquarters for pre-conversion training. The fees associated with
this training are provided for in the Professional Services Section Part A of
Schedule 1 of the Agreement. Company will also provide CBS Training Guides to
be used by Client's key individuals who are designated by Client to be the
Client's trainers for the purpose of training remaining Client staff.
Data Verification And Conversion Readiness - In this phase, Client and Company
will review the converted Client data from conversion tests performed by
Company. Upon acceptance, Client will sign-off on converted data and
balancing. This activity will involve at least six (6) to eight (8) CBS
employees on-site at the Bank's location for three (3) to five (5) days.
Live Conversion - We understand that the "live" Conversion typically occurs on a
Thursday, following Thursday's processing. Friday is the day of actual data
conversion to the Software System, balancing of application data and other
verification processes. Friday's work is processed on Saturday using the
Software System. All software
<PAGE>
interfaces will be tested and verified and the
conversion data Will be balanced and verified.
Mr. Robin H. Smith
December 5, 1994
Page 4
We further understand that the Company's entire installation team of six (6) to
eight (8) people will be on-site for this phase of the project and will remain
on-site for the entire following week. Client's assigned Customer Service
Representative will also be on-site during this phase.
Post Installation Audit - Approximately 30 days after Conversion Date, Client's
assigned Customer Service Representative and two or more other members of
Company's installation team will return to Client's site for a progress review
and to customize an ongoing support program for the Client. This will involve
at least two (2) CBS employees on-site at the Bank's location for three
(3) to five (5) days.
The description of the activities identified above will be expanded upon by the
Company and Client as the Project Plan is refined by mutual agreement.
Business Requirements
Unless otherwise indicated by June Falcone's memorandum which is attached to
this letter, the Business Modification changes submitted to you on December 2,
1994 in "draft" form are acceptable to me. Please have your team revise the
Business Requirements,as indicated and send the revised Business Requirements to
me for sign-off. Also, please include a Business Requirement for the Safe
Deposit Box numbers Business Requirement which we have agreed to move to Exhibit
A from Exhibit B to Schedule 3.
Maintenance Fees
This confirms our agreement that there are no additional maintenance fees for
the use of the Cash Management subsystem or for the Exhibit A and Exhibit B to
Schedule 3 Business Requirements.
Non-Teller Personal Computer Configurations
The Bank's personal computer systems are substantially as follows: minimum IBM
compatible 486 25sx or higher with a minimum of four meg RPM, Novell Netware
version 3.12, Novell SAA gateway version 1.3, MS-Dos version 6.0, Microsoft
Windows version 3.1 for all workstations, Wall Data Rumba Netware Systems
version 3.2. We understand that this configuration is acceptable to you and
that Section 12 - Warranties in Addendum 1 to the Agreement will be changed to
reflect this.
Mr. Robin H. Smith
December 5, 1994
Page 5
Account Mix
Part I) of Section 12 - Warranties in Addendum 1 to the Agreement states that
the performance warranties provisions are limited to an Account Mix which does
not exceed fifty percent (50%) Transaction accounts. Please be advised that the
Bank's present mix is sixty three percent (63%)
<PAGE>
Transaction accounts and therefore, this limitation is unacceptable to us.
We need to have the Agreement in final form by December 9, 1994. I look forward
to receiving a revised blacklined copy of the Agreement and associated Schedules
and Addenda from you this week.
Sincerely,
Thomas M. Petro
Senior Vice President
Attachment (1)
CC: Larry McAlee, Esquire
Bill Mixon
Geoff Halberstadt
Rick Crnovich
Dataprocessing Evaluation Team
THE BRYN MAWR TRUST COMPANY
Wayne Operations Center
Wayne, Pennsylvania
December 5, 1994
TO: Gloria Brashears
FROM: June Falcone
RE: CBS License and Service Agreements
The following are changes and/or modifications to Exhibit A to Schedule 3:
BackRoom Systems Software Interface:
APCS
This section is fine as written by CBS. Please note that the interface will
require some internal changes to procedures.
RICS
----
I would like the interface to also include the following:
<PAGE>
Fees for DIR should pass to the Account Analysis counters if the
account is on Account Analysis, if it is not on AA then the fee should post to
the account
-The notices for accounts not on AA should print two separate debits, one for
the DIR and one for the fee.
. We would also like to pass entries through interface for savings accounts.
Note: At this time we manually place a hold on each account receiving a DIR
debit during the nightly posting. We are looking into changing this function on
our current system parameters in the BGS software.
Overdraft Processing - "Holdover):
----------
Deleted.
The tiered pricing should be changed as follows:
<TABLE>
<CAPTION>
Items Fee
<S> <C> <C>
001-001 $25.00 Maximum charge of $55.00.
002-004 $10.00
> 004 $ 0.00
</TABLE>
Under the constraints where it indicates that fees that are "accessed" in batch
can not be overridden by an officer, Melody has informed me that all decisions
will be made during the
process and not assessed in batch.
I was concerned about the reports we would be getting from the changes that are
listed. Melody informed me that it would keep track of what the actual charge
should be and what is actually going to be charged to the account by the
officer. I would like to see an example of the report which is stated in
section 3.9.
Bankcard Limits:
----------------
This section will be rewritten into BMT terminology. Certain authorized
officers should have the ability to change (increase 'Dr decrease) bankcard
limits. The 10 standard VIP class codes mentioned an: codes which are preset in
---
the overall bankcoding. This would allow the representatives to choose a VIP
class/Limit during account opening. These VIP codes will be "overridable" to an
authorized officer, whereby making any limit applicable.
W-8's:
------
<PAGE>
The regulatory requirement for Foreign status in PA must be recertified every 3
years.
Therefore, we need a date separate from the W-8 generation date noted in the
schedule to keep track of all returned W-8 forms. Our current system calls this
a "Certified Date", a calculation of 3 years is added onto this date when the
next W-8 notice is generated. The 508 should be automatically generated every 3
years.
I requested from Melody that this section be modified to include this date and
the corresponding calculation.
Other Issues:
Cash Management - PC Banker/Telecash MicroACH
Postal Barcoding Melody will get back to me about this.
cc: S. O'Brien
R. Moore
The Bryn Mawr Trust Company
BRYN MAWR, PENNSYLVANIA 19010-3396 (610) 525-1700
December 9, 1994
Robin H. Smith
Senior Vice President
Fiserv CBS Division
2601 Technology Drive
Orlando, FL 32804
Dear Robin:
I'm writing to confirm our telephone conversions of Wednesday, December 7, 1994
and Friday December 9, 1994 and understand the items below to be resolved issues
unless I hear otherwise from you in writing. The language changes referenced
are based on my letter to you dated December 2, 1994, ("revised
Sections") re: Proposed Amendments, Deletions and Changes to the License and
-------------------------------------------------------------
Service Agreement unless otherwise noted.
-----------------
In consideration for an incremental monthly maintenance fee of $650 per month,
Exhibit A and Exhibit B to Schedule 3 will be maintained by Company and will be
included in provisions of the Agreement as defined in Section 1.12 "Maintenance
Services", Section 1.14 "Nonconformity", and all provisions of
<PAGE>
Section 4 "Maintenance Services", and any other Section of the Agreement to
which this concept applies. Specifically, the Modifications on Exhibit A and
Exhibit B to Schedule 3 will not pertain to the Warranty provisions of the
Agreement.
With respect to the revised Section 1.11 "License Fee", the last sentence should
be amended to read as follows: "The Company hereby agrees that, other than as
outlined on Schedule 1 to the Agreement, there will be no additional fees
payable by the Client for the use of the modifications identified on Exhibit A
and Exhibit B to Schedule 3."
With respect to the revised Section 1.14, "Nonconformity", the word "/or" is
inserted following the word "and" at the end of the first line of the revised
Section and the Exhibit A and B modifications will be added to the scope of
coverage of this section.
The period at the end of revised Section 1.18, "Project Plan", is deleted and
the following is inserted: "provided, however, that
when you want a banker not just a bank
------
the Conversion Date may be delayed or postponed by the mutual agreement
of the parties to this Agreement which,is evidenced by a writing signed by duly
authorized representatives of the parties hereto."
Referring to revised Section 1.19, "Software System," the words "and
modifications identified on Exhibit A and Exhibit B to Schedule 3" are deleted
from the sixth through eighth lines of revised Section 1.19.
Revised Section 1.23, "Third Party", as revised, is amended by inserting a
period after the word "subcontractors" on the second line and deleting the
remainder of revised Section 1.23.
Referring to revised Section 1.24, "Upgrades", the last two lines of the revised
Section 1.24 are revised to read as follows: "are available to the Client for no
additional License Fee or Maintenance Fee and typically do not involve
additional Professional Service Fees."
The new Section "Conversion Date" is amended by replacing the date "November 20,
1995" with the date "November 24, 1995"-.
The same words are added at the end of Section 3.3 as were added at the end of
Section 1.18, "Project Plan" as follows, "provided, however, that the Conversion
Date may be delayed or postponed by the mutual agreement of the parties to this
Agreement which is evidenced by a writing signed by duly authorized
representatives of the parties hereto."
Referring to Section 12.1, the Company warranty as provided in the revised
Section 12.1 will be for a period of ninety (90) days rather than as long as the
Company maintains the Software System, otherwise revised Section 12.1 remains
the same.
Section 16 is amended by adding a new Section 16.5 as follows:
"For the purposes of this Section 16 of the Agreement, the Client shall include
the Client and its subsidiaries and their employees and their respective agents
and subcontractors."
Section 17.3 is amended to delete all of the text following clause (iii) and
insert in lieu thereof the following: "or (iv) failure by the Company to
maintain compatibility of the Software System with
<PAGE>
the Computer system or (v) an attempt by the Company to assign the Agreement or
any action by way of delegation of duties or otherwise the result of which is a
de facto assignment of the Company's duties and or responsibilities under the
Agreement, except as provided in Section 19.4 hereof."
We agree that you will draft language to reflect that the Modification
Maintenance Fee of $650 per month will go away when, and if, the Exhibit-A and
Exhibit B modifications are Y-N incorporated into the "base" product on a
prorated basis.
Mr. Robin H. Smith
December 9, 1994
Page 3
Finally, we agree to "clean-up" the Agreement by consolidating Schedule 1 fees
to add the Cash Management License Fee with the Software System License Fee, add
the Cash Management Maintenance Fee to the Software System Maintenance Fee, and
change the agreed to Maintenance Fee which would apply in year six (6), that
being the first year of a rollover of the Service Agreement, to reflect the
addition of Cash Management, which would result in a monthly Maintenance Fee of
$5,690.
Modification Maintenance Fees will be listed separately, since in time, these
might go away as the Modifications are added into "base".
We also agreed that there are no other financial issues remaining for the
Software System or it's use.
Finally, I want to confirm that the blackline will be sent via overnight mail to
arrive not later than Tuesday December 13, 1994. Please send one (1) copy to me
at the bank and one (1) copy to Larry McAlee at his offices.
Sincerely,
Thomas M. Petro
Senior Vice President
CC: Larry McAlee, Esquire
Bill Mixon
Geoff Halberstadt
Rick Crnovich
Dataprocessing Evaluation Team
The Bryn Mawr Trust Company
BRYN MAWR. PENNSYLVANIA 19010-3396 (610) 525-1700
December 14, 1994
Robin H. Smith
Senior Vice President
<PAGE>
Fiserv CBS Division
2601 Technology Drive
Orlando, FL 32804
Dear Robin:
Thank you f or the revised Agreement copies which we received on Tuesday
December 13, 1994. We are reviewing the Agreement and Addenda and will respond
to it tomorrow as soon as Larry McAlee and I complete our reviews. There are,
however, three issues which I wanted to address with you immediately.
Modification Fees
Schedule 1, Maintenance Section, Part B overstates the Modification Fee Total by
$3,500. We understand it to be $146,500 which we get by subtracting the $16,000
fee reduction per our agreement in the letter dated December 2, 1994 Re Response
-----------
to November 29, 199 Letter from the $162,500 proposed amount.
------------------- ------
Warranties Agreement
The Warranties provisions in Addendum Number 1 were addressed in my letter to
you dated November 23, 1994 and were agreed to by you as evidenced by your
letter to me dated November 29,1994, yet the agreed upon language was not
incorporated in the revised Agreement.
Cash Management Enhancements
Finally, I need written assurance from you, that because of the unresolved
issues associated with the Bank's use of the CBS Cash Management System, these
being Multi-bank balance reporting, Data Exchange for cash concentration and
remote disbursements, and same day lock box deposit reporting with funds
availability assignments, that there would be no additional License Fees or
Enhancement Fees, or any other additional fees payable to Company associated
with the delivery of these capabilities to the Bank at a future date. Clearly,
there would be fees payable by the Bank to a Data Exchange and/or Multi-bank
third party service provider. And I also want to
when you want a banker
------
not just a bank
Mr. Robin H. Smith
December 14, 1994
Page 2
assure you of the Bank' s commitment to work with you to pilot these
capabilities with the Bank' s present customers that are using these
features as part of the Mellon Bank Enterprise Telecash product which we offer
to our customers today.
I will deliver to you via fax transmission tomorrow our comments concerning the
blacklined Agreement, and hope you will agree with me that we are very near full
agreement.
<PAGE>
Sincerely,
10
Thomas M. Petro
Senior Vice President
CC: Larry McAlee, Esquire
Bill Mixon
Geoff Halberstadt
Rick Crnovich
Dataprocessing Evaluation Team
The Bryn Mawr Trust Company
BRYN MAWR. PENNSYLVANIA 19010-3396 (610) 525-1700
December 15, 1994
Robin H. Smith
Senior Vice President
Fiserv CBS Division
2601 Technology Drive
Orlando, FL 32804
Dear-Robin:
Thank you for the revised blacklined Agreement we received on Tuesday December
13, 1994. We have reviewed the Agreement and attachments and have found it to
be substantially in compliance with the correspondence we have exchanged other
than outlined below. Please incorporate these comments into the Agreement and
prepare two (2) revised blackline copies of the Agreement, one for Larry McAlee
and one for me. You will note that we have sought to revise the language of the
Agreement to be more precise concerning responsibilities of -,the parties with
respect to 'Modifications'' and 'Software System, based on our agreement
concerning the treatment of these items.
1.2 'Archive Location, means that premise identified on Schedule
1. of this Agreement in which Client will maintain a nonproduction copy of the
Software System and Modifications.
1.6 'Conversion, means the development by Company of computer programs designed
to transfer the Client's existing data to the Software System and Modifications
specified on Exhibit A to Schedule 3 of the Agreement (the "Exhibit A
Modifications") and the actual successful transfer of Client's existing data to
the Software System and Exhibit A Modifications in a form which is efficiently
readable by the Software System and Exhibit A Modifications
<PAGE>
and that can be effectively processed by the Software System and Exhibit A
Modifications. The Company hereby agrees to accept Fiserv Fusion deconversion
media and formats on behalf of Client. Client agrees to
I"Modifications" as used in this letter means modifications to
the Software System performed by the Company.
when you want a banker, not just a bank
Mr. Robin H. Smith
December 15, 1994
Response to Blackline Agreement Page 2
provide its records and data not processed with Fiserv Fusion in a media format
approved for use by the Company in order for the Company to fulfill its
Conversion related tasks. Conversion -of Client's data to the Software System
and Exhibit A Modifications shall be deemed to be completed upon the conclusion
of the events identified on Schedule 4 of this Agreement as well as the
following: (clause (i), (iv) and (v) revise as follows]
(i) Application file to file conversion of Client input files, reports
and history to the Software System and Exhibit A Modifications. Client oust be
able to prove monetary amounts, with reasonable allowance for rounding errors.
(iv) Successful mapping of Client products to the Software System and Exhibit A
Modifications from the Fiserv Fusion systems, CLCS Construction Loan
system, and Bryn Mawr Trust Safe Deposit Box system.
(v) Successful interface of the following sub-systems with the Software System:
a. Culverin Platform Automation System
b. CCAS Credit Collection Accounting System
c. MAC ATM processing
d. Fiserv Distributed Processing Group Automated Return System
e. Fiserv Distributed Processing Group Proof and
Correction System
f. Intervoice Telephone Banker VRU
g. Credit Bureau acceptance of tapes produced by the CBS system
h. CBS Cash Management System
i. Regulatory Assistance Center Interface
1.6.1 Company agrees to assist Client by exercising reasonable professional
effort to help facilitate the interface of the following with the Software
System at no additional cost to Client:
j. Level 3 Audit Software
<PAGE>
k. IPS Accounts Payable Software
1. IPS Investment Account Software
m. IPS Fixed Asset Accounting Software
n. OKRA MCIF file preparation
X-N o. GG Pulley POD Interface
Mr. Robin H. Smith
December 15, 1994
Response to Blackline Agreement Page 3
1.11 'License Feel means the total sum specified on Schedule 1 to this
Agreement for the subsystems of the Software System identified on Schedule 1 of
---
this Agreement, together with three (3) sets of the Company standard
Documentation including Complimentary Product Guides and Internal Operations
Guides for the subsystems identified on Schedule 1, License Section Part A. of
---------------
this Agreement. Company hereby agrees that there will be no additional License
Fees payable by the Client for Use of the Modifications identified on Exhibit A
and Exhibit B to Schedule 3 of this Agreement.
1.13 'Maintenance Services' means services to keep the Software System
and Exhibit A and Exhibit 3 Modifications on Schedule 3 of this Agreement up to
date through periodic Upgrades, sometimes referred to as base releases,
including without limitation maintaining compliance with regulations and for
services to correct a Nonconformity in the Software System and Modifications
identified on Schedule 3 of this Agreement as it is upgraded from time to time.
Maintenance Services will also apply to Enhancements, though the Company may add
additional maintenance fees for Enhancements which the Client consents to
acquire and use. Maintenance Services are available only for the current and
last prior release of the Software System.
1.14 'Nonconformity, means a failure of the Software System and modifications
identified on Exhibit A and Exhibit B to Schedule 3 of this Agreement to
accurately and efficiently process Client's data or to perform functions
described in Company's Documentation and/or Company's System Detailed
Specifications. Each reported Nonconformity will be classified by Company in
accordance with the following list of
priorities:
(a) Level One: Any Nonconformity which renders the Software System or any
modification to it performed by Company inoperative.
(b) Level Two: Any Nonconformity which significantly degrades the performance
of the Software system or modifications to it performed by- Company, or
which affects regulatory compliance, including but not limited to the
calculation of interest, fees and balances, and errors affecting the
accuracy of customer statements.
(Otherwise, Section 1.14 remains unchanged.]
1.24 'Upgrades' means changes made to the Software System and modifications to
it, performed by Company and related
<PAGE>
Mr. Robin H. Smith
December 15, 1994
Response to Blackline Agreement
Page 4
Documentation to maintain compatibility with operating system software releases,
improve upon previously existing features, perform program f ixes and I maintain
the Software System and modifications in compliance with regulatory requirements
and which are sometimes referred to as "base releases" and are available to
Client for no additional License, Maintenance and/or Professional Services Fees.
1.25 'Use' means copying or loading any portion of the Software System or
modifications thereof from storage units or media into any equipment for the
processing of data by the Software System and modifications once so loaded, or
the operation of any procedure or machine instruction utilizing any portion of
either the computer program or instructional material supplied with the Software
System. Use is deemed to occur at the Processing Location where
any of the above processes happen. Use is limited to type of operations
described in Company documentation solely to process Client's own work and that
of majority-owned affiliates. Use specifically excludes any service bureau or
time-share services to minority-owned or unaffiliated third parties without
prior written consent by Company and payment by Client of additional fees in
accordance with mutually agreed terms.
1.27 'Conversion Date' means the date on which the results identified on
Section 1.6 of this Agreement are successfully attained and the successful
completion of tasks identified on the Project Plan which must occur on or before
November 24, 1995. This date cannot be delayed or postponed without prior
written agreement by Company and Client.
2.1 Company agrees to furnish the Software System and Modifications identified
on Exhibit A and Exhibit B to Schedule 3 of this Agreement to Client and does
hereby grant to Client a non-exclusive, nontransferable License to Use the
Software System and modifications thereof at the Processing Location to process
the designated number of Accounts as specified on Schedule 1 of this Agreement.
2.4 Client shall maintain copies of the Software System and modifications
thereof at the location (s) specified on Schedule 1 of this Agreement. Client
may, in the event of a Computer System failure, malfunction, disaster or for
disaster recovery testing purposes, utilize copies of the Software System and
modifications at other than the Processing Location, provided that upon
correction of the Computer System failure, malfunction, disaster or completion
of the disaster recovery testing, the Software System and modifications thereof
are
Mr. Robin H. Smith
December 15, 1994
Response to Blackline Agreement
Page 5
returned to production Use solely at the Processing Location.
2.5 Robin, we wish to comply with Section 2.5 of the Agreement. Please send us
copies of the Company's copyright and proprietary notices that you wish us to
use to satisfy Section
2.5 of the Agreement.
3.3 Section 3.3 reads "upon requirements set forth on Schedule 4" . There are
no requirements contained on
<PAGE>
Schedule 4.
3.4 Company is to provide modifications defined on Exhibit A and Exhibit B to
Schedule 3 of this Agreement, and is to provide installation and conversion
services and training services for Client for the Software System and
modifications. The fees for the modifications are specified on Schedule 1. The
nature and timing of installation, conversion tasks and -training shall be
specified in the Project Plan mutually agreed upon by the parties hereto.
3.5 (iv) The Software system modifications shall be deemed to have been
accepted by Client upon the completion of a formal acceptance test (as set forth
in the Systems Detail Specifications) and Client written acceptance. Acceptance
by Client will not be unreasonably withheld or unduly delayed. Client agrees
promptly to notify Company in writing (and with reasonable particularity) upon
conclusion of the acceptance test or earlier upon discovery of any Specification
Nonconformities disclosed by such testing or use. Company shall correct any
Specification Nonconformities disclosed by such testing without further charge
to Client within a reasonable time of Client's notice.
4.2 Company shall maintain the Software System and Modifications identified on
Exhibit A and Exhibit B to Schedule 3 of this Agreement with appropriate
features that will enable the Client to comply with applicable Federal and State
regulations.
4.4 Company shall promptly assign such technical personnel as are necessary to
identify, isolate, and reconstruct any reported Level One Nonconformity and,
provided that such Level One Nonconformity is capable of reconstruction and is
due to a defect in the Software System or modification thereof performed by
Company, Company shall utilize its best efforts to correct or utilize a
circumvent procedure to restore system operation,within twenty-four hours of
Company' s receipt of the call. Company shall provide such services to Client
free of any additional Maintenance Fees and charges, including but not
Mr. Robin H. Smith
December 15, 1994
Response to Blackline Agreement Page 6
limited to any reimbursement for travel of Company technical personnel incurred
(hiring the resolution -of ;t Level One Nonconformity.
4.7 Replace "base release" with "Upgrade".
4.8 Replace "Software System Release" with "Upgrade".
4.9 Should Company's review of the Level One, Level Two or Level Three
Nonconformity indicate, in Company' s reasonable opinion, that the reported
problem is not in the Software System or Exhibit A and Exhibit B to Schedule 3
modification but is due to Client's abuse or misuse of the Software System or
modification thereof, or by a modification or addition to the Software System as
modified not performed by Company (inclusive of the integration by other than
Company of Third Party products with the Software System or Modifications) , or
by Client's failure to properly maintain the Computer System or Modifications,
or to install the required System Software releases
<PAGE>
as instructed by Company, then:
(i) and (ii) remain unchanged.
4.11 The initial Maintenance Fee specified in Schedule 1 of this Agreement
shall be effective on the Conversion Date and shall continue for a period of
five (5) years. There may be an increase in the Maintenance Fee specified on
Schedule 1 on each anniversary of the Conversion Date. The Maintenance Fee shall
hot be increased by more than the lesser of (i) eight percent (8*) per year or
(ii) the change in the U.S. Department of Labor, Consumer Price Index for Urban
Wage Earners and Clerical Workers, All Cities, (1982 = 100%) for the twelve
month period preceding the annual anniversary of the Conversion Date.
7. The Company agrees to deliver the Software System and modifications
identified on Exhibit A and Exhibit B to Schedule 3 to the Processing
Location. The Client is responsible for copying and maintaining any
additional copies of the Software System and modifications at other
authorized locations.
9.1 The word "interface" should be replaced with the word "interfere".
9.3 Client agrees to maintain the Computer System and operate the
Software System According to Company's reasonable
Mr. Robin.H. Smith
December 15, 1994
Response to Blackline Agreement
Page 7
recommendations during the term of this Agreement.
10. The text of Section 10 is deleted and replaced by the
following: "Company and Client do not contemplate rescheduling of the
Conversion Date."
ii. Schedules, Exhibits, Addenda and Other Documents
The attached Schedules, Exhibits, Addenda and other documents form part of and
are included in this Agreement.
12.1 Add the following sentence: "Circumvent procedures recommended by Company
and agreed to by Client pursuant to Section 1.14 of this Agreement shall not
constitute incorrect use for the Purpose of this Agreement."
12.1 The Company warrants, for at period of ninety (90) days following Client
acceptance of the Software System, the Software System will perform the
functions specified in the Documentation identified in Exhibit A of Schedule 1
to this Agreement. In the event the Software System fails to perform any of
those functions, and the Company is notified in writing stating with reasonable
particularity the nature of the Software System's failure to perform those
functions, Company will promptly commence to correct these Nonconformities in
accordance with the same provisions outlined in Section 4 of this Agreement.
This warranty shall not apply if the failure has been caused kg- unauthorized
changes to the Software System or modifications identified on Exhibit A and
Exhibit B to Schedule 3 or by incorrect Use. Furthermore, Company warrants the
Software System and those modifications are designed to operate on the minimum
Computer System specified on Schedule 2 of this Agreement and both parties
hereto agree that the warranties given by Company are conditional upon the
procurement and. maintenance by Client of the
<PAGE>
Computer System. Circumvent procedures
recommended by Company and agreed to by Client pursuant to Section 1.14 of this
Agreement shall not constitute incorrect use for the purpose of this Agreement.
12.3 The Company warrants that it has the right to License the Use of the
Software System and modifications thereto performed by Company identified on
Exhibit A and Exhibit B to Schedule 3 of this Agreement.
2 We suggest that an index listing of all of the Schedules, Exhibits and
other attachments be prepared and included in the Agreement.
Mr. Robin H. Smith
December 15, 1994
Response to Blackline Agreement
Page 8
13.1 Company shall indemnify Client and hold it harmless, including Client's
incursion of any legal fees, associated with any claim or action which alleges
that the Use of the Software System and modifications thereof performed by
Company infringes a patent, copyright or other proprietary right of a third
party. Client agrees that it will notify Company promptly in writing of any
such claim and grants Company sole right to control the defense and disposition
of such claim.
13.2 If as a result of any such claim Company or Client is permanently enjoined
from using the Software System or modifications thereof performed by Company by
a final nonappealable decree, Company at its sole option and expense may procure
for Client the right to continue to use the Software System or modification
thereof or At its sole option and expense, may provide a replacement or
modification for the Software System so as to settle such a claim. If
modification of the Software System is not reasonably practical in the sole
opinion of the Company (reasonably given), Company may discontinue and terminate
this License upon written notice to Client and shall refund to Client all
License and Modification Fees paid to Company under this Agreement. In making
this determination, Company will give due consideration to all factors including
financial expense.
13.4 The foregoing states the entire liability of Company for the infringement
of any copyrights, patents or other proprietary rights of a third person by the
Software System or any parts thereof or any modifications thereof performed by-
Company, and Client hereby expressly waives any other liabilities on the part of
Company arising therefrom.
16.6 Company agrees not to use the Client's name in any press release or any
public disclosure without prior written consent of Client.
New
17.6 Not withstanding any other provision of the Agreement, in the event that
the Client is acquired and the Company refuses for whatever reason to assign
this Agreement to an entity satisfactory to the Client or terminate this
Agreement at the Client's request, the Client may terminate this Agreement and
will be relieved of any further obligations and liability under the Agreement to
the Company on the Termination Date, herein defined, by (i) giving the Company
not less than Thirty (30) days prior written notice of the date on which the
Client
<PAGE>
will terminate the Agreement (the "Termination Date") and
Mr. Robin H. Smith
December 15, 1994
Response to Blackline Agreement Page 9
(ii) tendering to the Company on or prior to the Termination Date the aggregate
unpaid balance of Maintenance Fee due to the Company pursuant to this
Agreement.
Schedule 1, License Section, Part C should reflect our agreement concerning
25,000 account increments and related fees and maximum fees as per our letter of
agreement dated November 23, 1994 as follows:
An incremental License Fee will be paid after the 100,000 account threshold is
reached of $25,000 for each 25,000 accounts up to a total of 175,000 accounts,
and $75,000 for each 75,000 accounts thereafter to a maximum of: $1,225,000
after which no additional License Fee would be due.
Schedule 1,Professional Services Section, Part B overstates the Modification Fee
Total by $3,500. We understand it to be $146,500 which we get by subtracting
the $16,000 fee reduction per our agreement in the letter dated December 2, 1994
Re: Response-to November 29, 1994 Letter from the $162,500 proposed amount.
--------------- ------------------------
Schedule 1, Professional Services Section, Part E should reflect our agreement
concerning the use of the thirty five programming days as stated in our letter
of agreement dated November 23, 1994. as follows:
Company agrees to provide Client with up to thirty-five (35) days of programming
support for modifications which may be uncovered during the conversion process
and mutually agreed to by both Company and Client in writing and are expressly
to be used for activities associated with moving Client's products, services and
processing onto the Software System and Exhibit A and Exhibit B to Schedule 3
modifications at conversion. Days remaining, after Client acceptance testing
and sign-off for both the Conversion and Exhibit 13 Modifications are released
by Client and cease to be a. responsibility of Company.
Schedule 1, Maintenance Services Section, Part A concerning the calculation for
the pro-rata reduction in Modification Maintenance Fees is confusing to us.
Please restate the calculation methodology more clearly or provide an example.
Schedule 1, Maintenance Section, Part B should reflect our agreement concerning
25, 000 account increments and related fees and maximum fees as per our letter
of agreement dated November 23, 1994 as follows:
Mr. Robin H. Smith
December 15, 1994
Response to Blackline Agreement
Page 10
An incremental monthly Maintenance Fee will be paid after the 100,000 account
threshold is reached of $375 for each 25,000 accounts up to a total of 175, 000
accounts, and $1, 125 will be paid for each 75,000 accounts processed thereafter
to a total of 1,000,000 accounts above which no additional incremental
Maintenance Fees would be due.
Schedule 3, Exhibit.h, Business Requirements for Construction Loans is missing
a. phrase in the following sentence found in Section 3.8.3, which should read:
"Any sub-commitment that is coded as A stand-by letter of credit in the
<PAGE>
purpose
code, and/or when the purpose code defines the sub-commitment as suspense funds
should be excluded from this report."
Schedule 4, Exhibit A, Project Plan should be clearly labeled as Exhibit A to
Schedule 4.
Addendum Number 1. Section 3.9 should indicate that the fees associated with the
Day Two modifications are fixed as identified on Schedule 1 of the Agreement.
Addendum Number 1, Additional Provisions, should be changed to state:
Company and Client agree that in no event will Client be responsible for
reimbursing to Company travel and living expenses incurred by Company exceeding
a. total of $50,000 associated' with Company's (i) Professional Services for
Conversion and installation as described on the Project Plan in Exhibit A to
----------------------------
Schedule 4 of this Agreement, (ii) Training. as described in Schedule 1,
Professional Services Section, Part C% Paragraph b), (iii) Special Professional
------------------------------- --------------------
Services as defined in Schedule 1, Professional Services Section, Part E, and
---------
(iv) Systems Engineering Support responsibilities described in Exhibit A to
---------------------------
Schedule 2 under this Agreement.
Addendum Number 7 should be revised to include my letters to you dated December
5, December 9, December 14 and December 15, and your letter to me dated December
12, 1994 and any other correspondence. As you request, I will provide copies of
the letters addressed to you from me.
I believe that these items address our remaining issues, and that the Agreement,
as revised per this letter and my letter dated December 14, 1994 will be
acceptable to the Bank.
Mr. Robin H. Smith
December 15, 1994
Response to Blackline Agreement Page 11
Please send via overnight delivery two revised blackline copies of the Agreement
indicating only those Sections of the Agreement and Addenda changed by our
agreement as stated in this letter for delivery on December 15, 1994 to both
the Bank,and Larry McAlee's office.
Sincerely,
Thomas M. Petro
Senior Vice President
cc: Larry McAlee, Esquire
Bill Mixon
Geoff Halberstadt
Rick Crnovich
Dataprocessing Evaluation Team
<PAGE>
The Bryn Mawr Trust Company
BRYN MAWR. PENNSYLVANIA 19010-3396 (215) 525-1700
December 19, 1994
Mr. Robin H. Smith
Senior Vice President
Fiserv CBS Division
2601 Technology Drive
Orlando, FL 32804
Dear Robin:
I am writing to summarize the telephone conversation f rom Friday, December
16, 1994, between Melody Traeger, Lawrence Rorstrom, Brad Smock, Dave Peterson,
Geoff Halberstadt and myself about the Business Requirement for Construction
Loans
The purpose of that call was to discuss our need to track accrued interest
at a unit level. It is our understanding this request has caused you to revise
your approach to how your system will handle our construction loans. Because of
our request, the concept of a "master note" will become the basis for the
Construction Loan Business Requirement.
As we understand it, the creation of a master note will allow multiple CBS
accounts (which we describe as construction units) to be considered together as
one loan. As a result, construction loan billing will be consolidated (include
all units) , but interest will
be accrued at the unit level.
All other features, functionality and reports from the previous versions of
this Business Requirement will remain unchanged. Additionally, it is out
expectation that both interest and principal payments will be made at the unit
level rather than at the master note level.
It is our understanding that this Business Requirement change will not
preclude us from using all other, CBS Loan Subsystem features including, but not
limited to, loan participations.
when you want a banker not just a bank
------
Mr. Robin H. Smith
December 19, 1994
Page 2
<PAGE>
We also discussed the concept of a payoff letter for our construction loans.
It was decided that we would be better served by using the report writer to
address this issue rather than have this incorporated into the Business
Requirement for our Construction Loans.
Please inform me in writing if the contents of this letter are unacceptable
to you. Please incorporate these changes into a revised Business Requirement
for my review and signoff.
Sincerely,
Joseph S. Saraceno
Comptroller
cc: Melody Traeger Thomas M. Petro Larry McAlee, Esquire William R. Mixon Geoff
Halberstadt Rick Crnovich Data Processing Team
THE FINANCIAL DATA SERVICES COMPANY
December 19,1994
Mr. Thomas M. Petro
Senior Vice President
The Bryn Mawr Trust Company
801 Lancaster Avenue
Bryn Mawr, PA 19010
Dear Tom:
It appears we are very close to concluding our negotiations, and barring any
unforeseen complications, look forward to entering into the Agreements with The
Bryn Mawr Trust Company on Wednesday, December 21,1994 when Dave Ulrich visits
the bank. Enclosed are the final Agreements which reflect the changes which
were outlined in your correspondence of December 15,1994 as well as those which
were overlooked or we discussed via phone on Monday, December 19,1994. If we
discover any oversights between now and Wednesday afternoon, please note and
initialize the appropriate changes on the executed copies and we will do the
same once we have executed the Agreements. To that end, you need to have three
(3) originals executed. We will then execute all three and return an original
to yom
<PAGE>
The others will be kept at our office in Orlando and an original will be
forwarded to our corporate offices in Milwaukee. If you have any questions,
please feel free to call.
Secondly, as we discussed, I would like to take this opportunity to formally
respond to the issues regarding cash management and the potential changes
associated with the construction lending modification.
Cash Management
As we have discussed for several months, the cash management needs of The Bryn
Mawr Trust Company, extend farther than those currently supported by the CBS
System and/or our PC based Corporate Cash Management product.
Specifically,these needs tend to revolve around the need for a "data exchange
facility" to support consolidated/cross bank reporting, cash
concentration/remote disbursement processing and same day lock box deposit
reporting. As we have stated previously, it is our commitment to work with The
Bryn Mawr Trust Company, as well as other CBS users to develop these
capabilities. The nature of this effort is in several directions. One, we are
actively pursuing acquisition opportunities which will enable us to "own" the
data exchange facility and be able to offer this service ta other CBS Clients,
Other FIserv Clients and the market in general. We are very optimistic
regarding the potential outcome of these discussions and would expect to be able
to disclose more
CBS Division
2601 Technology Drive, Orlando, Florida 3407-299-5400
------------------------------------------------
Corporate Headquarters: 255 FiServ Drive, Brookfield, Wisconsin 53045 9 414-87@
-------------------------------------------------------------------------------
Mailing Address- PO. Box 979, Brookfield, Wisconsin 53008-0979
---------------------------------------------------------------
Mr. Thomas M. Petro
-------------------
December 19,1994
Page 2
details within the next ninety days. Secondly, if the potential acquisition of
the data exchange facility is not realized, we recognize the need for this
capability and are prepared to establish a firm relationship with another entity
to provide these services and make these available to our client base. In
either case, we recognize there will need to be changes made to both the CBS
System and the PC based Cash Management System to enable our clients to utilize
these facilities. It is our intention that once a determination has been made
regarding the choice of a data exchange facility, we will begin the effort to
assess the potential financial impact this dioice will have on our clients with
respect to the service itself and any modification costs which might be incurred
by our clients. Our intention at this stage would be to present these
opportunities to our cash management clients as a cooperative development effort
which would effectively "spread" any modification cost between ourselves and the
cash management customers. Based on the number of potential participants and
previous cooperative development efforts, we would not expect given
approximately ten participants, for this effort to exceed $20,000 per
participant. Obviously our goal would be to involve as many clients as
possible, provide as much functionality as possible and reduce the overall cost
for everyone.
We will keep you informed of our progress in this area and provide details as
they become available.
<PAGE>
Construction Lending Modification
---------------------------------
Based on Melody Traeger's conversation with your staff last week, they have
added significant effort to the modification as it was originally sized. Based
on those discussions, we estimate the additional effort will increase the
cost@of the modification by an amount not to exceed $12,000. We would propose
utilizing the next four weeks to redefine this modification in its entirety and
subsequently amending our Agreezwnt with The Bryn Mawr Trust Company to reflect
this change in functionality as well as the change in pricing for the
modification.
Thank you again for the time you, your staff and Larry McAlee have spent on this
matter. We look forward to a long and mutually beneficial relationship with The
Bryn Mawr Trust Company.
Sincerely,
Robin H. Smith
Senior Vice President
RS/sl 252
Enclosures
v
FINANCIAL DATA SERVICES COMPANY
Addendum No. 8
to
Comprehensive Banking System
License and Service Agreement
Between Bryn Mawr Bank Corporation ("Client") and FIserv CIR, Inc. ("Company").
Client and Company wish to amend Agreement No.
December 30,1994. Notwithstanding anything in this Addendum to the contrary, in
------------------
the
event of a conflict between the terms of the Agreement and Ohs Addendum, the
provisions of
this Addendum shall take precedence.
Agreement for Additional Subsystem
-------------------------------
Client wishes to license, for the fees outlined, the following additional
Subsystem which shall be included as part of the Software System as defined in
this Agreement:
<PAGE>
Initial Monthly Software
License F=
Credit Collection Accounting Subsystem $35,000 $250
(CCAS)
with an Effective Date of
Payment Terms
<TABLE>
<CAPTION>
Event Amount Payable
<S> <C>
Upon Contract Execution $11,667
Upon Completion and Client Acceptance of Data
Verification Phase $11,667
Upon Client Acceptance of Conversion $11,666
</TABLE>
For and on behalf of Client By:
Name: Samuel C. Wasson, Jr.
Title: Secretary
For and on behalf of Company By:
Name: Raju M. Shivdasani
------------------
Title: President, CBS Division
-----------------------
THE REGULATORY ASSISTANCE CENTER, INC.
<PAGE>
Compliance Division
SOFTWARE LICENSE AGREEMENT
CONTINUOUS USE
This constitutes the software license agreement between The Regulatory
Assistance Center, Inc., hereinafter called "RAC", a Massachusetts corporation
having a principal place of business at 400 Auburn Street, Whitman, MA 02382 and
Bryn Mawr Trust Company having a principal place of business at 801 Lancaster
Avenue, Bryn Mawr, PA 19010-3396 hereinafter called "Licensee".
THE PARTIES AGREE TO THE FOLLOWING TERMS AND OCNDITIONS.
1. IDENTIFICATION OF SYSTEM. The software system is called "Currency
Reporting Control SystemTm", hereinafter called "CRC SystemTm" and consists of
the following:
CRC SystemTm Primary Package Object Code;
CRC SystemTm Exemption Management Module Object Code;
CRC SystemTm Magnetic Media Filing Module Object Code;
CRC SystemTm Installation Guide;
CRC SystemTm Reference Guide;
CRC SystemTm Training Tutorial;
CRC System@ Daily Processing Guide;
BCC Systemtm Object Code (Covering 30 Teller Workstations); BCC Systemtm
Installation and Reference Guide;
TIL SystemTm Object Code;
TIL SystemTm Reference Guide;
RJS Systeni"4 431ject Code;
RJS SystemTm Installation and Reference Guide;
WTC Systemtm Object Code;
WTC SystemTm Installation and User's Guide.
2. INSTALLATION FEE. Licensee agrees to pay RAC a one-time installation fee
for the CRC System@. The total installation fee for the CRC SystemTm shall be
$18,000.00. Said fee is payable in two installments; one upon execution of this
agreement for the amount $13,500.00 and the remainder due fifteen (15) days
after CRC SystemTm delivers principal place of business of Licensee stated
above. Should Congress mandate a r sales tax on goods and services that is
applicable to this purchase, Licensee shall be responsible for payment to RAC of
any such sales tax as dictated by law.
3. DELIVERY OF CRC SYSTEM. RAC will deliver the CRC SystemTm to Licensee
within thirty (30) days of License Agreement execution. RAC will assume all
risks of loss or damage to the CRC System while in transit to the Licensee.
<PAGE>
4, GRANT OF LICENSE. Subject to the terms of this agreement, RAC grants
Licensee a non-transferable and non-exclusive right to use the CRC SystemTm for
Licensees own purposes, within and limited to Licensee. License may not
transfer any of its rights to the CRC SystemTm except to its successor
organization, to be used in the same site only, should it be acquired. Licensee
may not copy, rent, lease, or otherwise distribute the CRC SystemTm.
Cl@
400,Auburn Street - Whitman, MA 02382 - (617) 447-5585
SOFTWARE LICENSE AGREEMENT
CONTINUOUS USE
5. SYSTEM OWNERSHIP. All copyright, patent trade secret and other proprietary
rights to the CRC SystemTm are owned by, RAC. The copy of the RAC CRC System@
licensed to Licensee 9 protected by United States copyright laws ia accordance
---------
with such law.
6. SUPPORT SERVICES. RAC agrees to provide to Licensee reasonable technical
and software support relative to the operation of the software during the first
year after execution of this Agreement. RAC further agrees to periodically
provide CRC SystemTm updates to Licensee: (a) to incorporate CRC SystemTm
enhancements, and (b) to comply with Bank Secrecy Act regulatory changes. This
support may be
continued for additional one year terms by payment of an annual maintenance fee
of $3,600.00. (The break down of this fee is as follows: 10% ($2,400.00) of the
list price of the CRC SystemTm at the time of purchase ($24,OOO.00) and 10%
($1,200.00) of the list price of the BCC SystemTm at the time of purchase
-----
($12,000.00). Such maintenance fee b) be invoiced on the first and subsequent
anniversary dates. If on-site support is requested, Licensee shall reimburse
RAC for all reasonable travel expenses, including but not limited to lodging,
transportation and meals incurred in providing such training and support.
7. LIMITATION OF LIABILITY. RAC MAKES NO WARRANTIES OR REPRESENTATIONS,
EXPRESSED OR IMPLIED, IN FACT OR IN LAW, INCLUDING THE IMPLIED WARRANTY OF
FITNESS FOR A PARTICULAR PURPOSE, NOTWITHSTANDING THE FORM (E.G. CONTRACT, TORT
OR OTHERWISE) IN WHICH ANY LEGAL OR EQUITABLE ACTION MAY BE BROUGHT AGAINST RAC.
RAC SHALL IN NO EVENT BE LIABLE FOR DAMAGES WHICH EXCEED THE AMOUNT OF THE FEES
PAID BY LICENSEE FOR THE CRC SYSTEMrm WHICH GAVE RISE TO THE DAMAGES. HOWEVER,
IN NO EVENT SHALL RAC BE LIABLE FOR SPECIAL OR CONSEQUENTIAL DAMAGES OR FOR ANY
INDIRECT DAMAGES SUCH AS BUT NOT LIMITED TO EXEMPLARY OR PUNITIVE DAMAGES, EVEN
IF RAC II&S BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
<PAGE>
S. GENERAL. This Agreement is governed by the laws of the State of
Massachusetts. This License shall be deemed effective from the date of
execution and shall be valid only as long as licensee uses or possesses the CRC
SystemTm. As security and protection to the end user, RAC has escrowed the CRC
Systemtm source code at the firm of McSwiney, Jones, Semple and Douglas, P.C.
This constitutes the complete and exclusive statement of terms and conditions
between Licensee and IIAC covering performance hereof and cannot be altered,
--------
amended, or modified except in writing executed by an authorized representative
of each party.
IN WITNESS WHEREOF, the parties have executed this agreement as of the date set
forth
below.
DATED: 12/5/94
tory Assistance Center,@C. Hamelin, Presi--nt & CEO@
DATED: 1/5/95 Bryn Mawr TrustCompany
(Signature)
Name and Title
2.
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF BANKING
333 MARKET STREET, 16TH FlOOR FAX (717) 7871773
HARRISBURG, PENNSYLVANIA 171011290
(717) 783-8240
December 12, 1994
Mr. Joseph W. Rebl, CPA
Senior Vice President and Treasurer
THE BRYN MAWR TRUST COMPANY
801 Lancaster Avenue
Bryn Mawr, PA 19010-3396
Dear Mr. Rebl:
This will respond to your letter dated December 8, 1994, in which you request
the approval of the Pennsylvania Department of Banking (the "Department") f or
The Bryn Mawr Trust Company (the "Company") to further increase its investment
in fixed assets by $2,002,000 for 1995. This approval is required by Section
202 (e) of the Banking Code of 1965, as amended, for banks that propose to
exceed or already exceed the 25% limitation for bank premises and equipment.
The additional investment of $2,002,000 in bank premises and equipment will be
used to bring the Company's data processing services back "in-house," using
FiServ CBS and for other planned capital expenditures for 1995.
The Department has reviewed this matter as well as the supporting documentation
included with your letter and hereby approves the Company's request to increase
its investment in bank premises and equipment for an aggregate investment in
fixed assets of
<PAGE>
$8,696,000 or 34.51% of the Company's projected equity capital
aggregating $25,200,000 as of December 31, 1994 pursuant to the provisions of
Section 202(e) of the Banking Code of 1965. This approval will expire one year
from the date of this letter. If the full amount of the additional investment
is not booked in that time period, a new request must be made to the Department.
We note that the Company projects the fixed asset total to be $7,879,000 as of
December 31, 1995 or 27.35% of the Company's projected equity capital of
$28,804,000 for the same date.
As long as the Company's investment in fixed assets exceeds the statutory
limitation, additional expenditures for such premises must have the prior
approval of this Department. Therefore, I would like to recommend that future
expenditures for bank premises and equipment be closely monitored until the
Company's investment therein conforms to the provisions of Section 202(e) of the
Code.
mm. Joseph W. Rebl CPA
December 12, 1994
-Page 2-In addition, you are reminded that purchased computer software should be
reported as "other assets" as per call report instructions and not included in
the fixed asset computation.
Very truly yours,
Richard S. DeMartino
Director--supervision and
Enforcement Bureau
RSD:EAK:eak
<PAGE>
Bryn Mawr
Bank Corporation
Annual Report 1994
[LOGO OF BRYN MAWR BANK CORPORATION APPEARS HERE]
<PAGE>
Contents
Consolidated Financial Highlights 1
President's Letter 2
Selected Financial Data 9
Management's Discussion and Analysis
of Financial Condition and Results of Operations 10
Consolidated Balance Sheets 22
Consolidated Statements of Income 23
Consolidated Statements of Cash Flows 24
Consolidated Statements of Changes
in Shareholders' Equity 25
Notes to Consolidated Financial Statements 26
Report of Independent Accountants 35
Corporate Information 36
<PAGE>
Consolidated Financial Highlights
<TABLE>
<CAPTION>
Five-Year
Compound
1994 1993 Change Growth Rate
--------------------------------------------------
<S> <C> <C> <C> <C>
For the year (dollars in thousands)
Net interest income $ 15,301 $ 13,672 12% (2)%
Other income 8,383 9,786 (14) 12
Other expenses 17,535 17,670 (1) 2
Net income 4,049 3,712 9 --
At year-end (dollars in thousands)
Total assets $333,180 $320,942 4% 2%
Total net loans 225,120 188,116 20 2
Total deposits 301,337 291,074 4 2
Shareholders' equity 27,146 24,627 10 2
Per common share
Net income $ 3.71 $ 3.41 9% --%
Dividends declared .65 .40 63 (15)
Book value 24.82 22.62 10 2
Closing price 31.75 32.625 (3) (1)
Selected ratios
Return on average assets 1.26% 1.23%
Return on average shareholders' equity 15.70 16.37
</TABLE>
annual report
------
94
Bryn Mawr Bank Corporation 1
<PAGE>
Dear Shareholder:
1994 was a fine year for Bryn Mawr Bank Corporation. Earnings improved, though
our mortgage origination business slumped because of the rise in interest rates.
Consumer and commercial loans expanded handsomely, not simply because of the
improved economy, but a reflection of attention paid to prospects and customers
by our lenders.
Higher interest rates also moved some interest-sensitive deposit dollars
out of the Bank to higher yielding investments. Nonetheless, deposits increased.
Our transaction-based core deposits, those related more to service than to
interest rates, were up nicely.
So, in spite of a 96c per share decrease in before-tax income from the
Bank's mortgage origination business, 1994 net income was $3.71 per share, up 4%
from $3.57, the comparable, before-the-negative-effect-of-an-accounting-change,
net income in 1993.
[PHOTO OF PAT CARSON APPEARS HERE]
Lines of Business Performance
We think about our business in three segments: traditional banking, trust
and investment management services, and the mortgage origination business. In
1994, the traditional banking business, gathering deposits and making loans,
provided 59% of our operating profit, while our trust and investment business
provided 31%, and the mortgage origination 10%. In 1993, the banking business
contributed 39%, the trust and investment business 30%, and the mortgage
business 31% of the Corporation's before-tax income.
So, as interest rates rose, our mortgage origination business, which is
highly interest rate sensitive, dropped off sharply. However, the banking
business picked up remarkably as the economy strengthened, and our trust and
investment management business improved.
The Trust Division increased its contribution to net income even though the
Inset: Pat Carson of Member Banking. Right: Bob Stevens (right) with Peter
Havens, who will join the Bank in May to head the Trust Division.
2 Bryn Mawr Bank Corporation
<PAGE>
annual report
------
94
[PHOTO APPEARS HERE]
We offer easy access, a great name, and
full banking service, all on a very
personal, confidential, and professional basis.
<PAGE>
investment environment was unsettled. The bond market experienced its worst year
since the Great Depression, while the stock market averages ended the year at
about the same levels they began the year.
Basic banking is our foundation, but expanding revenue from less capital-
intensive services than gathering deposits and making loans has been a Bank goal
for years. Let's look at how we're doing.
In 1994, we originated and sold $39 million in residential mortgage loans,
and we service $189 million in mortgage loans for others, which together
produced $1.3 million in fees and gains from sales for the year.
Our Trust Division holds $800 million in assets, which generated $4.7
million in fee income in 1994.
In all, we're not just a $300 million bank. Including the Bank's assets, we
service over $1.3 billion in mortgage, trust, and bank resources.
[PHOTO APPEARS HERE]
Other Highlights
. We produced and aired new television ads which increased the awareness of
the Bank in its marketplace and beyond. They helped enormously in creating a
receptive audience for the Bank's services.
. We introduced a Bank-wide Excellence Through Training program. This
program was designed to familiarize everyone in the Bank with all of our
services and with all departments within the Bank.
. We've completed an exhaustive analysis of our data processing and, in
November 1995, will convert to an "in-house" system which will be built upon our
AS/400 IBM computer and an extensive network of microcomputers throughout the
Bank.
. The stock price remained virtually the same all year long, though bank
and bank holding company stock averages slipped in the fourth quarter.
. The dividend was increased 5c per share in December 1994, and was
increased 5c per share, again, in March 1995. The
Inset: Harold Thompson manages the Bryn Mawr branch, with the help of Cathie
Putnam. Right: Steve Collar of Consumer Credit Services (left) visits Kevin
MacCausland at MacCausland Jeep-Eagle.
4 Bryn Mawr Bank Corporation
<PAGE>
annual report
------
94
Consumer and commercial loans
expanded handsomely...
a reflection of attention paid to prospects and
customers by our lenders.
<PAGE>
regular quarterly dividend is now 25c per share. Total dividends received by
shareholders in 1994 were 65c; three at 15c per share, and one at 20c, up 63%
from 40c per share paid in 1993.
. A Bryn Mawr Trust credit card was introduced. The card is marketed
through First USA, a Wilmington, Delaware credit card bank.
. We installed a drive-up automated teller machine (ATM) in the Bryn Mawr
drive-up banking facility.
. Our dealer-originated automobile loan portfolio increased 50%.
. Our loan delinquencies are better than they've been in memory-and better
by a long way. Overall loan delinquency, loans past due 30 days or more, was
less than 1% at year end.
. We made progress, too, with nonperforming assets, which totalled
$4,251,000, or 1.28% of assets at year end, down from $5,682,000 or 1.77% at
year-end 1993, a 25% decrease.
[PHOTO APPEARS HERE]
Service Quality
Our fundamental strength has been, and is, quality, personal service. This
is not limited to just our customer-contact personnel, but extends to our "back-
room" staff as well. Here's an illustration of what I mean by quality.
In November of 1994, we encoded 378,000 checks and deposit tickets, which
required about 2.5 million keystrokes by our staff. There were no encoding
errors. As a matter of course, we average one-tenth the encoding error rate of
banks of similar size.
Community Outreach
We pay attention to the well-being of our neighborhoods and support
financially, as well as through the service of our staff, many activities
which knit with others to form our community's fabric. A fine example of the
commitment of our staff is William F. Mannion, Jr., who leads our residential
mortgage business. He conducts a Community Home Buyer's Program for
prospective homeowners to help them prepare for homeownership. Since its
inception in November of 1990, 300 men
Inset: Jim Egan, commercial loan officer (right), with Archie Allan of Archibald
Allan associates, inc. Right: Carol Colden, mortgage originator, meets with
Craig Whitney, realtor.
6 Bryn Mawr Bank Corporation
<PAGE>
annual report
------
94
We're mindful of our obligation
to put back some of the good
we enjoy from serving this wonderful community.
<PAGE>
and women have attended, and 211 have completed the program. Graduates are
eligible for low-rate financing and, in some cases, for additional loans to
cover closing costs. So far, 35 graduates have become homeowners.
We're mindful of our obligation to put back some of the good we enjoy from
serving this wonderful community.
What's Ahead?
In all, 1994 was a fine year, and 1995 looks even better. Peter H. Havens
will join the Bank as executive vice president in May to head our Trust Division
and to develop a Family Office business. We'll provide to families-as we do now
for individuals-investment management, tax, and administrative services. In
addition, we offer easy access, a great name, and full banking service, all on a
very personal, confidential, and professional basis.
Peter served as my executive assistant at the Bank from March 1981 until
March 1982. He has served as a director of the Bank since 1986, and has been a
member of the Board of Directors of Bryn Mawr Bank Corporation since its
inception in 1987. Peter has been responsible for a Family Office business for
the last 12 years.
[PHOTO APPEARS HERE]
Richard I. Sichel, senior vice president and chief investment officer, will
concentrate his efforts on accelerating the growth in our investment management
business. And, we've developed an incentive program similar to what exists in
the investment management world-basically a gains-sharing arrangement. I believe
that we'll see good results from the Family Office business.
We've wonderful men and women working here, and showing up is a joy. I'm
constantly encouraged by the results they achieve, and I'm very proud to have
the opportunity to lead this remarkable organization.
I hope that, if you do not, you will do business with us. I'd be glad to
talk to you about our services, this report, your financial needs, or, simply,
just to say hello, and hope that you'll call me at (610)526-2300.
And, finally, I'll say a warm and heart-felt "thank you" to our
shareholders for their investment, their interest, and their support. We'll keep
on doing our best to earn each.
Sincerely,
/s/ Robert L. Stevens
Robert L. Stevens
President and Chief Executive Officer
March 2, 1995
8 Bryn Mawr Bank Corporation
<PAGE>
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
(in thousands, except for per share data)
----------------------------------------------------------------------
For the years ended December 31 1994 1993 1992 1991 1990
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest income................................. $ 20,378 $ 19,495 $ 21,316 $ 23,785 $ 26,448
Interest expense................................ 5,077 5,823 7,683 11,527 11,552
----------------------------------------------------------------------
Net interest income............................. 15,301 13,672 13,633 12,258 14,896
Loan loss provision............................. 500 500 725 7,459 3,184
----------------------------------------------------------------------
Net interest income after loan loss provision... 14,801 13,172 12,908 4,799 11,712
Other income.................................... 8,383 9,786 7,979 6,430 5,514
Other expenses.................................. 17,535 17,670 17,101 19,367 16,856
----------------------------------------------------------------------
Income (loss) before income taxes,
extraordinary credit, and
cumulative effect of accounting change......... 5,649 5,288 3,786 (8,138) 370
Applicable income taxes (benefit)............... 1,600 1,401 813 (2,695) (230)
----------------------------------------------------------------------
Income (loss) before extraordinary credit and
cumulative effect of accounting change......... 4,049 3,887 2,973 (5,443) 600
Extraordinary credit............................ -- -- 250 -- --
Cumulative effect of accounting change.......... -- (175) -- -- --
----------------------------------------------------------------------
Net income (loss)............................... $ 4,049 $ 3,712 $ 3,223 $ (5,443) $ 600
======================================================================
Per share data:
Earnings (loss)............................... $ 3.71 $ 3.41 $ 2.97 $ (5.02) $ .55
Dividends declared............................ $ .65 $ .40 $ -- $ .30 $ 1.29
Weighted average shares outstanding........... 1,091,950 1,088,223 1,085,294 1,085,110 1,084,677
<CAPTION>
(in thousands)
----------------------------------------------------------------------
At December 31 1994 1993 1992 1991 1990
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total assets.................................... $ 333,180 $ 320,942 $ 302,939 $ 292,929 $ 302,010
Earning assets.................................. 298,385 287,945 263,215 248,386 259,355
Deposits........................................ 301,337 291,074 276,185 269,828 273,636
Shareholders' equity............................ 27,146 24,627 21,320 18,065 23,833
<CAPTION>
----------------------------------------------------------------------
For the years ended December 31................. 1994 1993 1992 1991 1990
----------------------------------------------------------------------
<S>............................................. <C> <C> <C> <C> <C>
Selected financial ratios:
Net income (loss) to:
Average total assets.......................... 1.26% 1.23% 1.13% (1.86)% .21%
Average shareholders'
equity....................................... 15.70 16.37 16.41 (24.74) 2.39
Average shareholders' equity
to average total assets...................... 8.06 7.51 6.91 7.52 8.92
Dividends declared per share to
net income per share......................... 17.52 11.73 -- -- 234.55
</TABLE>
Bryn Mawr Bank Corporation 9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following is a discussion of the consolidated results of operations of
Bryn Mawr Bank Corporation (the "Corporation") for each of the three years in
the period ended December 31, 1994, as well as the financial condition of the
Corporation as of December 31, 1994 and 1993. The Bryn Mawr Trust Company
(the "Bank") is a wholly-owned subsidiary of the Corporation. This discussion
should be read in conjunction with the Corporation's consolidated financial
statements beginning on page 22.
RESULTS OF OPERATIONS
Overview
The Corporation reported net income of $4,049,000, or $3.71 per share, for
the year ended December 31, 1994, which was the second highest earnings year
in the Corporation's history, behind $4,077,000 reported in 1989. The
earnings for 1994 represented a 4% increase over net income before the
cumulative effect of an accounting change of $3,887,000, or $3.57 per share,
for the year ended December 31, 1993. Net income for 1994 represented a 9%
increase over net income for 1993 of $3,712,000, or $3.41 per share.
The 1994 financial performance reflects a 12% increase in net interest
income and a 1% reduction in other expenses from 1993 to 1994. These
improvements more than offset a 14% decrease in other income from 1993 to
1994. These results are due to an improvement in asset quality, growth in
earning assets, and excellent control of operating expenses.
Return on average assets for the year increased to 1.26% from 1.23% in
1993. Return on average equity for 1994 was 15.70% compared to 16.37% in
1993.
After suspending the payment of a dividend in 1991, the
Corporation reinstated the dividend in 1993, declaring a dividend of $0.40
per share. Based on increased earnings in 1994, the Corporation increased its
dividend by 63% to $0.65 per share.
[GRAPH APPEARS HERE]
EARNINGS PERFORMANCE
Lines of Business
The Corporation has three significant business lines from which it derives
its earnings. Its core business, that is the banking business, has been the
keystone of the Corporation's success over the years. Additional streams of
earnings result from its trust line of business and, in more recent years,
its mortgage banking line of business, the origination, sale, and servicing
of mortgage loans to the secondary mortgage market. Following is a
segmentation analysis of the results of operations for those lines of
business for 1994 and 1993:
Table 1 -- Lines of Business Analysis
<TABLE>
<CAPTION>
1994
--------------------------------------------
Mortgage
(dollars in thousands) Banking Trust Banking Consolidated
--------------------------------------------
<S> <C> <C> <C> <C>
Net interest income after $14,557 $ -- $ 244 $14,801
loan loss provision..........
Fee & other income............. 2,627 4,719 1,037 8,383
Other expenses................. 13,763 2,917 685 17,365
--------------------------------------------
Operating profit............... $ 3,421 $1,802 $ 596 $ 5,819
================================
General corporate expenses..... -- -- -- 170
------------
Income before income taxes..... -- -- -- $ 5,649
============
% of operating profit........ 59% 31% 10% 100%
<CAPTION>
1993
--------------------------------------------
Mortgage
(dollars in thousands) Banking Trust Banking Consolidated
--------------------------------------------
<S>............................ <C> <C> <C> <C>
Net interest income after
loan loss provision.......... $12,582 $ -- $ 590 $13,172
Fee & other income............. 3,083 4,419 2,284 9,786
Other expenses................. 13,521 2,824 1,225 17,570
--------------------------------------------
Operating profit............... $ 2,144 $1,595 $1,649 $ 5,388
================================
General corporate expenses..... -- -- -- 100
------------
Income before income taxes
and cumulative effect of
accounting change............ -- -- -- $ 5,288
============
% of operating profit........ 39% 30% 31% 100%
</TABLE>
The table reflects operating profits of each line of business before
income taxes and the cumulative effect of an accounting change.
For 1993, the profit contribution of each line of business was relatively
even. The banking line produced 39% of the operating profit, while the trust
line and mortgage banking line contributed 30% and 31%, respectively. As
interest rates rose in 1994, the mortgage banking line of business, which is
highly interest rate sensitive, slowed significantly. However, the banking line
of business offset this decrease with significant growth in its operating
profit. The result was an increase in consolidated operating profits of 8%.
However, for 1994, the banking line of business was responsible for 59% of the
operating profit, while the mortgage banking line decreased its percentage of
the total operating profit to 10%. The trust line of business accounted for 31%
of the 1994 operating profit, up slightly from 30% in 1993.
10 Bryn Mawr Bank Corporation
<PAGE>
Banking Line of Business
The upward movement of interest rates in 1994 proved beneficial to the
Corporation's banking line of business. Net interest income after the loan
loss provision rose 16%, a counter-cyclical effect to the decline in mortgage
banking profits related to rising interest rates. An expanded discussion of
net interest income follows under the section entitled "Net Interest Income."
Fee and other income decreased by 15% in 1994 compared to 1993. This was
due to a decrease in gains on the sale of other real estate owned ("OREO"),
as the amount of OREO has decreased in recent years. During 1993, the
Corporation disposed of $4,234,000 in OREO, realizing related gains of
$889,000 compared to $681,000 sold in 1994, generating gains of $294,000.
Exclusive of the $595,000 decrease in OREO gains from 1993 levels, other
income in the banking line of business increased 6%. This increase was
primarily due to revenues earned from the operation of OREO properties, which
amounted to $319,000 in 1994, whereas there were no similar revenues
generated in 1993.
Total other expenses of the banking line of business increased 2% in
1994 compared to 1993 levels. Overall, the operating profits of the banking
line of business increased 60% in 1994 compared to 1993.
Trust Line of Business
The Bank's Trust Division reported a 13% increase in operating profit for
1994 compared to 1993 levels. Total trust fee income rose 7% in 1994. This
was due partially to an increase in the market value of assets managed, from
$764,571,000 at December 31, 1993, to $799,846,000 as of December 31, 1994,
as well as increased other revenue streams such as tax preparation fees and
financial planning services offered by the Trust Division. While trust
revenues rose 7%, other expenses were held to a 3% increase in 1994 over 1993
levels.
Mortgage Banking Line of Business
Low interest rates in 1993 caused an increase in mortgage loan refinancing.
This refinancing activity remained strong through the first quarter of 1994.
As interest rates began to rise in 1994, mortgage refinancing became less
attractive to borrowers. The sharp rise in interest rates in 1994 was the
prime catalyst for the significant decrease in the volume of mortgage loans
originated and sold in the secondary mortgage market during 1994 compared to
1993. Following is a table showing the volume of mortgage loans originated
and sold in the secondary mortgage market, the total loan fees and net gains
realized, and the yield on these loan sales:
Table 2 -- Summary of Mortgage Banking Activity
<TABLE>
<CAPTION>
(dollars in thousands) 1994 1993
--------------------
<S> <C> <C>
Outstanding balance of loans sold....... $39,109 $108,685
Loan fees and net gains on sales........ $ 591 $ 1,990
Yield on sales.......................... 1.51% 1.83%
</TABLE>
As outlined in the table, a 64% decline in mortgage loans sold was
primarily responsible for a 70% drop in profits from loan sale activity. In
response to this decrease in loan sale volumes, expenses in the mortgage banking
line of business were reduced by 44% from 1993 expense levels. In addition to
the ability to reduce staff during a downturn in mortgage banking activity,
incentive compensation related to overall mortgage banking activity was sharply
curtailed. The result was that the 1994 operating profit of this line of
business, while down 64% from 1993 operating profit levels, did contribute
$596,000 to the consolidated operating profit of the Corporation.
[CHART APPEARS HERE] [CHART APPEARS HERE]
Bryn Mawr Bank Corporation 11
<PAGE>
Net Interest Income
Net interest income increased 12% from $13,672,000 in 1993 to $15,301,000 in
1994. A 5%, or $883,000, increase in interest income and a 13%, or $746,000,
decrease in interest expense from year to year resulted in the overall increase
in net interest income. The Bank's net interest margin, defined as net interest
income exclusive of loan fees as a percentage of average earning assets,
increased to 5.21% in 1994 from 4.85% in 1993.
The following table shows an analysis of the composition of net interest income
for each of the last three years. Interest income on loans includes fees on
loans of $564,000, $927,000, and $2,012,000 in 1994, 1993, and 1992,
respectively. The average loan balances include nonaccrual loans. All average
balances are calculated on a daily basis. Yields on investment securities are
not calculated on a tax-equivalent basis.
Table 3 -- Analyses of Interest Rates and Interest Differential
<TABLE>
<CAPTION>
1994 1993 1992
----------------------------------------------------------------------------------
Average Average Average
Interest Rates Interest Rates Interest Rates
Average Income/ Earned/ Average Income/ Earned/ Average Income/ Earned/
(dollars in thousands) Balance Expense Paid Balance Expense Paid Balance Expense Paid
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Cash and due from banks........................ $ 22,474 $ -- --% $ 21,784 $ -- --% $ 18,392 $ --- --%
Interest-bearing deposits with other banks*.... 422 12 2.8 532 15 2.8 479 4 0.8
Federal funds sold*............................ 6,839 261 3.8 11,305 343 3.0 12,447 431 3.5
Investment securities:
Taxable*..................................... 59,717 2,899 4.9 53,799 2,647 4.9 36,853 2,295 6.2
Tax-exempt*.................................. 13,498 708 5.2 13,593 749 5.5 10,578 624 5.9
------------------- ------------------- --------------------
Total investment securities.................. 73,215 3,607 4.9 67,392 3,396 5.0 47,431 2,919 6.2
------------------- ------------------- --------------------
Loans*......................................... 202,177 16,498 8.2 183,792 15,741 8.6 184,533 17,962 9.7
Less: Allowance for possible loan losses....... (3,734) -- -- (3,699) -- -- (5,237) -- --
------------------- ------------------- --------------------
Net loans.................................... 198,443 16,498 8.3 180,093 15,741 8.7 179,296 17,962 10.0
Other assets................................... 18,694 -- -- 20,690 -- -- 25,936 -- --
------------------- ------------------- --------------------
Total assets................................. $320,087 $20,378 -- $301,796 $19,495 -- $283,981 $21,316 --
=================== =================== ====================
Liabilities:
Demand deposits, noninterest-bearing........... $ 65,976 $ -- -- $ 60,390 $ -- -- $ 57,961 $ -- --
Savings deposits............................... 179,900 3,540 2.0 168,066 4,126 2.5 144,785 4,932 3.4
Time deposits.................................. 42,925 1,512 3.5 44,767 1,697 3.8 55,335 2,751 5.0
Federal funds purchased........................ 469 25 5.3 -- -- -- -- -- --
Accrued interest, taxes, and other liabilities. 5,022 -- -- 5,894 -- -- 6,265 -- --
------------------- ------------------- --------------------
Total liabilities............................ 294,292 5,077 -- 279,117 5,823 -- 264,346 7,683 --
------------------- ------------------- --------------------
Shareholders' equity........................... 25,795 -- -- 22,679 -- -- 19,635 -- --
------------------- ------------------- --------------------
Total liabilities and shareholders' equity... $320,087 $ 5,077 -- $301,796 $ 5,823 -- $283,981 $ 7,683 --
=================== =================== ====================
Total earning assets*........................ $282,653 -- -- $263,021 -- -- $244,890 -- --
Interest income to earning assets.............. -- -- 7.2 -- -- 7.4 -- -- 8.7
Interest expense to earning assets............. -- -- 1.8 -- -- 2.2 -- -- 3.1
------ ------ ------
Net yield on interest-earning assets......... -- -- 5.4 -- -- 5.2 -- -- 5.6
Average effective rate paid on interest-
bearing liabilities.......................... -- -- 2.3 -- -- 2.7 -- -- 3.8
</TABLE>
*Indicates earning assets
12 Bryn Mawr Bank Corporation
<PAGE>
The following table shows the effect of changes in volumes and rates on
interest income and interest expense. Variances which were not specifically
attributable to volume or rate were allocated proportionately between volume
and rate. Interest income on loans included increases (decreases) in fees on
loans of ($363,000) in 1994, ($1,085,000) in 1993, and $958,000 in 1992.
Table 4 -- Rate/Volume Analyses
<TABLE>
<CAPTION>
(in thousands) 1994 vs. 1993 1993 vs. 1992
--------------------------------------------------
Increase/(decrease) Volume Rate Total Volume Rate Total
--------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Interest income:
Interest-bearing
deposits with
other banks............ $ (3) $ -- $ (3) $ 2 $ 9 $ 11
Federal funds sold...... (157) 75 (82) (33) (55) (88)
Investment securities:
Taxable interest
income............... 290 (38) 252 941 (589) 352
Tax-exempt interest
income............... (5) (36) (41) 179 (54) 125
Loans................... 1,518 (761)* 757 (68) (2,153)* (2,221)
--------------------------------------------------
Total interest income.. 1,643 (760) 883 1,021 (2,842) (1,821)
--------------------------------------------------
Interest expense:
Savings deposits........ 272 (858) (586) 515 (1,321) (806)
Time deposits........... (68) (117) (185) (450) (604) (1,054)
Federal funds purchased. 25 -- 25 -- -- --
--------------------------------------------------
Total interest expense. 229 (975) (746) 65 (1,925) (1,860)
--------------------------------------------------
Interest differential.... $1,414 $ 215 $1,629 $ 956 $ (917) $ 39
==================================================
</TABLE>
* Included in the loan rate variance was an increase in interest income related
to non-performing loans of $110,000 and $57,000 in 1994 and 1993,
respectively. The variances due to rate include the effect of nonaccrual loans
because no interest is earned on such loans.
The 5% growth in interest income for 1994 was attributable primarily to a
7% increase in average earning assets over the prior year. Average earning
assets for 1994 were $282,653,000 compared to $263,021,000 for 1993. This growth
was a direct result of an increase in the Bank's lending activities as the
average balance of the loan portfolio increased 10% from 1993.
All lending areas within the Bank, except construction loans, experienced
loan growth during 1994. The most significant growth came in the consumer loan
portfolio, particularly indirect automobile loans. The increase in these fixed
rate, short-term indirect automobile loans, which are purchased from automobile
dealerships and are market rate sensitive, reduced the average yield on the loan
portfolio from 8.6% in 1993 to 8.2% for 1994. The overall yield on earning
assets decreased from 7.4% in 1993 to 7.2% in 1994, even though the Bank's prime
rate increased from 6% as of December 31, 1993, to 8.5% at year-end 1994. The
majority of the Bank's earning assets are fixed rate assets, therefore, the
impact of increases in the prime rate are not recognized immediately.
Loan growth in 1994 was partially funded through deposit growth. Average
deposits increased $15,578,000 during 1994. While the average deposit
balances increased in 1994, interest expense decreased 13% from year to year.
This decrease is a result of average interest rates paid on deposits being
higher in 1993 than 1994. The cost of funds for the Bank averaged 2.2% in
1993 compared to 1.8% in 1994. Deposit rates decreased throughout 1993 and
remained stable during 1994 until the end of the year, when they began to
increase. In addition to the declining deposit rates in 1993, a shift in
deposit mix from higher yielding time deposits to lower yielding savings and
demand deposits in 1994 also contributed to a decrease in interest expense.
Loan Loss Provision
The Bank provided a loan loss provision of $500,000 in 1994, the same amount
that was provided in 1993. The allowance for possible loan losses was
$3,618,000 and $3,601,000 as of December 31, 1994 and 1993, respectively. The
ratio of the loan loss reserve to nonperforming loans was 466% and 168% as of
December 31, 1994 and 1993, respectively. The significant increase in this
ratio was due to the decrease in nonperforming loans from $2,143,000 at
year-end 1993 to $776,000 at year-end 1994. The allowance as a percentage of
outstanding loans was 1.58% as of December 31, 1994, compared to 1.88% as of
December 31, 1993; the decrease being due to the increase in outstanding
loans in 1994 over 1993 levels. Bank management determined that the 1994 loan
loss provision was sufficient to maintain an adequate level of the allowance
for possible loan losses during 1994.
A summary of the changes in the allowance for possible loan losses and a
breakdown of loan loss experience by major loan category for each of the past
five years follows:
Table 5 -- Allowance for Possible Loan Losses
<TABLE>
<CAPTION>
December 31
--------------------------------------------------
(dollars in thousands) 1994 1993 1992 1991 1990
--------------------------------------------------
<S> <C> <C> <C> <C> <C>
Allowance for
possible loan losses:
Balance, January 1............. $3,601 $3,848 $6,012 $3,894 $2,835
--------------------------------------------------
Charge-offs:
Commercial and industrial..... -- (462) (145) (538) (898)
Real estate--construction..... (229) (37) (2,094) (3,778) (992)
Real estate--mortgage......... (69) (11) (92) (674) --
Consumer...................... (365) (388) (658) (536) (320)
--------------------------------------------------
Total charge-offs............ (663) (898) (2,989) (5,526) (2,210)
--------------------------------------------------
Recoveries:
Commercial and industrial..... 115 94 25 101 5
Real estate--construction..... -- -- -- 28 --
Real estate--mortgage......... 20 -- -- 1 4
Consumer...................... 45 57 75 55 76
--------------------------------------------------
Total recoveries............. 180 151 100 185 85
--------------------------------------------------
Net charge-offs............ (483) (747) (2,889) (5,341) (2,125)
Provision for loan losses...... 500 500 725 7,459 3,184
--------------------------------------------------
Balance, December 31........... $3,618 $3,601 $3,848 $6,012 $3,894
==================================================
Net charge-offs to average
loans........................ .2% .4% 1.6% 2.7% 1.0%
</TABLE>
Bryn Mawr Bank Corporation 13
<PAGE>
The table below allocates the balance of the allowance for possible loan
losses by loan category and the corresponding percentage of loans to total loans
for each loan category for the last five years:
Table 6 -- Allocation of the Allowance for Possible Loan Losses
<TABLE>
<CAPTION>
December 31
----------------------------------------------------------------------------------------------------
(dollars in thousands) 1994 1993 1992 1991 1990
----------------------------------------------------------------------------------------------------
% Loans % Loans % Loans % Loans % Loans
to Total to Total to Total to Total to Total
Loans Loans Loans Loans Loans
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at end of period
applicable to:
Commercial and industrial... $1,289 23.9% $1,144 26.0% $1,335 26.5% $1,667 21.7% $ 818 20.6%
Real estate--construction... 273 2.1 411 4.9 924 7.4 2,273 17.0 2,002 26.5
Real estate--mortgage....... 332 40.4 297 41.0 120 36.4 146 34.2 145 27.0
Consumer.................... 680 33.6 552 28.1 460 29.7 372 27.1 322 25.9
Unallocated................. 1,044 -- 1,197 -- 1,009 -- 1,554 -- 607 --
----------------------------------------------------------------------------------------------------
Total..................... $3,618 100.0% $3,601 100.0% $3,848 100.0% $6,012 100.0% $3,894 100.0%
====================================================================================================
</TABLE>
The loan loss reserve allocation reflects a reserve based on specific loan
loss reserve allocations on loans reviewed individually as well as an average
historical loan write-off percentage for loans in each specific loan category
not individually reviewed and is also increased by an additional percentage
to reflect current market conditions.
Refer to page 19 for further discussion of the Corporation's loan review
process.
Other Income
The following table details other income for the years ended December 31,
1994 and 1993, and the percent change from year to year:
Table 7 -- Other Income
<TABLE>
<CAPTION>
(dollars in thousands) 1994 1993 % Change
--------------------------
<S> <C> <C> <C>
Fees for trust services................. $4,719 $4,419 7%
Service charges on deposit accounts..... 1,068 1,266 (16)
Other fees and service charges.......... 1,192 1,394 (14)
Net gain on sale of loans............... 386 1,442 (73)
Gain on sale of other real estate owned. 294 889 (67)
Other real estate owned revenues........ 319 -- --
Other operating income.................. 405 376 8
--------------------------
Total other income.................... $8,383 $9,786 (14)%
==========================
</TABLE>
In addition to net interest income, the Bank's three operating segments
generate various fee-based income, including trust income and service charges
on deposit accounts as well as loan servicing income and gains/losses on loan
sales.
As discussed in the "Lines of Business" section on pages 10 and 11, the
decrease in other income in 1994 from 1993 levels was primarily a result of a
decrease of $1,056,000, or 73%, in net gains on the sale of loans and a
decrease of $595,000, or 67%, in gains on the sale of OREO.
Trust income grew 7% from year to year as the market value of trust
assets approached the $800,000,000 level at the end of 1994, up from
$764,571,000 as of December 31, 1993.
As interest rates rose during 1994, so did the earnings credit rate
which is used to offset certain service charges on deposit accounts. This was
the primary reason for the 16% decrease in service charges on checking
accounts.
Other fees and service charges decreased 14% in 1994 from 1993 levels
due to a reduction in documentation preparation fees related to the mortgage
banking line of business.
The 1993 results of operations did not include any revenues earned from
the operation of OREO properties.
Other Expenses
The following table details other expenses for the years ended December 31, 1994
and 1993, and the percent change from year to year:
Table 8 -- Other Expenses
<TABLE>
<CAPTION>
(dollars in thousands) 1994 1993 % Change
---------------------------------
<S> <C> <C> <C>
Salaries-regular........................ $ 6,705 $ 6,253 7%
Salaries-other.......................... 817 1,061 (23)
Employee benefits....................... 1,789 1,488 20
Occupancy expense....................... 1,389 1,333 4
Furniture, fixtures, and equipment...... 851 811 5
Advertising............................. 839 716 17
Computer processing..................... 1,085 1,051 3
Stationery and supplies................. 258 260 (1)
Professional fees....................... 683 937 (27)
Insurance............................... 807 867 (7)
Merchant credit card processing......... 299 279 7
Net cost of operation of other
real estate owned and in-substance
foreclosed properties.................. 39 594 (93)
Other operating expenses................ 1,974 2,020 (2)
---------------------------------
Total other expenses.................. $17,535 $17,670 (1)%
=================================
</TABLE>
Other expenses decreased for the year ended December 31, 1994, by 1%
compared to 1993. Regular salaries, the largest component of other expenses,
rose 7%, due to a combination of merit increases and the impact of some
staffing additions necessary to continue to provide personalized service to
our customers as we continue to grow.
14 Bryn Mawr Bank Corporation
<PAGE>
However, other salaries decreased 23% from 1993 to 1994. Included in other
salaries is incentive compensation related to mortgage banking profitability and
overall Bank profitability. These incentive costs decreased $203,000 and
$132,000, respectively, from 1993 due to the reduced profit of the mortgage
banking line of business.
Employee benefit costs increased 20% due to escalating premiums on medical
benefits and workers' compensation insurance, as well as increased social
security taxes and unemployment taxes.
Advertising expense increased 17% over 1993 levels as the Bank continued
its commitment to a television, radio, and print media advertising campaign to
promote various segments of the Bank.
Professional fees, which encompass legal, accounting, and consulting
expenses, decreased $254,000, or 27%, in 1994. These fees decreased as the legal
matters related to problem loans and OREO continue to be resolved.
The most significant decline in expenses from year to year was a $555,000
decrease in the cost of operating OREO. Similar to the decrease in gains on
sales of OREO, the cost of operating OREO by the Bank has continued to decrease
as the average amount of OREO has decreased from $5,533,000 in 1993 to
$3,383,000 in 1994.
Other operating expenses were reduced by 2% from 1993 to 1994 due to
effective cost control by management of the Bank.
The Bank's efficiency ratio, which is defined as the ratio of operating
expenses to total revenues, measures the efficiency with which the Bank spends
its revenue. The ratio has improved to 73.5% in 1994 from 75.0% in 1993. It is
management's goal, over time, to further improve the ratio to below 70%.
Income Taxes
The Corporation's provision for federal income taxes is based on the
Corporation's statutory tax rate of 34%. Federal income taxes for 1994 were
$1,600,000, compared to $1,401,000 for 1993. This represents an effective tax
rate of 28.3% and 26.5% for 1994 and 1993, respectively. Income taxes for
financial reporting purposes differ from the amount computed by applying the
statutory rate to income before taxes due primarily to tax-exempt income from
certain loans and investment securities. See Note 8 to the consolidated
financial statements.
The Corporation adopted Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes" ("SFAS No. 109"), during the first quarter of
1993. The cumulative effect of adopting SFAS No. 109 was a charge of $175,000.
FINANCIAL CONDITION
Investment Securities
The Corporation adopted Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities" ("SFAS No.
115"), as of January 1, 1994. Upon the adoption of SFAS No. 115, management
elected to classify 100% of the investment portfolio as available for sale.
Therefore, the investment portfolio was carried at its estimated market value of
$58,563,000 as of December 31, 1994, in accordance with SFAS No. 115. The
amortized cost of the portfolio as of December 31, 1994, was $59,995,000,
resulting in net unrealized losses of $1,432,000.
As of December 31, 1993, the investments were carried at the lower of
amortized cost or market value. The portfolio had a carrying amount of
$80,114,000, an estimated market value of $81,421,000, and net unrealized gains
of $1,307,000.
The maturity distribution and weighted average yields on a fully tax-
equivalent basis of investment securities at December 31, 1994, are as follows:
Table 9 -- Investment Portfolio
<TABLE>
<CAPTION>
Maturing Maturing
from from
Maturing 1996 2000 Maturing
during through through after
(dollars in thousands) 1995 1999 2004 2004 Total
------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Obligations of the U.S.
Government and
agencies:
Book value................. $16,754 $28,083 $ -- $ -- $44,837
Weighted average
yield.................... 4.3% 5.2% --% --% 4.8%
State and political
subdivisions:
Book value................. $ 2,238 $ 9,083 $1,401 $ -- $12,722
Weighted average
yield.................... 9.1% 7.7% 7.0% --% 7.8%
Other investment
securities:
Book value................. $ -- $ -- $ -- $1,004 $ 1,004
Weighted average
yield.................... --% --% --% 5.8% 5.8%
------------------------------------------------------
Total book value............. $18,992 $37,166 $1,401 $1,004 $58,563
Weighted average
yield....................... 4.9% 5.8% 7.0% 5.8% 5.5%
</TABLE>
The fluctuation in the unrealized gain/loss from year to year was primarily
a result of the increase in interest rates during 1994. Approximately 75% of the
investment portfolio consists of fixed rate U. S. Government securities and,
therefore, the increase in interest rates reduced the market value of these
securities. 32% of the Corporation's portfolio matures during 1995. The
Corporation does not own any derivative investments and does not plan to
purchase any of these investments in the foreseeable future.
Bryn Mawr Bank Corporation 15
<PAGE>
Loans
For financial reporting purposes, both fixed and floating rate home equity
loans, collateralized by mortgages, are included in
permanent mortgage loans. Floating rate Personal CreditLine loans are
included in consumer loans.
A breakdown of the loan portfolio by major categories at December 31 for
each of the last five years is as follows:
Table 10 -- Loan Portfolio
<TABLE>
<CAPTION>
December 31
-----------------------------------------------------------
(in thousands) 1994 1993 1992 1991 1990
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Real estate loans:
Permanent
mortgage loans..... $ 92,395 $ 78,553 $ 65,362 $ 63,244 $ 56,010
Construction loans... 4,884 9,482 13,376 31,506 55,046
Commercial and
industrial loans... 54,631 49,800 47,541 40,241 42,784
Consumer loans........ 76,828 53,882 53,302 50,287 53,766
-----------------------------------------------------------
Total................ $228,738 $191,717 $179,581 $185,278 $207,606
===========================================================
</TABLE>
The maturity distribution of the loan portfolio, excluding loans secured
by one-family residential property and consumer loans, at December 31, 1994,
is shown below.
<TABLE>
<CAPTION>
Maturing
from
Maturing 1996 Maturing
during through after
(in thousands) 1995 1999 1999 Total
----------------------------------------------
<S> <C> <C> <C> <C>
Commercial, financial,
and agricultural....... $27,425 $19,920 $ 7,286 $54,631
Real estate-
construction........... 3,162 1,722 -- 4,884
Real estate-
other.................. 92 3,869 26,595 30,556
----------------------------------------------
Total................ $30,679 $25,511 $33,881 $90,071
==============================================
Interest sensitivity
on the above loans:
Loans with
predetermined rates.. $ 1,237 $10,979 $ 3,351 $15,567
Loans with adjustable
or floating rates.... 29,442 14,532 30,530 74,504
----------------------------------------------
Total................ $30,679 $25,511 $33,881 $90,071
==============================================
</TABLE>
There are no scheduled pre-payment on the loans included in the maturity
distribution.
The Bank's lending function is the principal income generating activity,
and it is the Bank's policy to continue to serve the credit needs of its market
area. As such, based on increased credit needs due to the growing economy, total
loans at December 31, 1994, increased 19% to $228,738,000 from $191,717,000 as
of December 31, 1993. Outstanding balances in all lending areas, except
construction, increased during the year. However, even as the Bank's loan
portfolio has expanded, the amount of delinquencies and classified loans have
decreased from 1993 as the Bank's lending philosophy focuses on excellent asset
quality.
The most significant increase was in the consumer loan area, particularly
in indirect consumer loans. Indirect consumer loans, which are mainly automobile
loans issued through automobile dealerships and purchased by the Bank, increased
by more than 50% in 1994 over 1993 as the economy grew and the Bank expanded its
dealership network. These loans are fixed rate, short-term loans collateralized
by the vehicle purchased.
Real estate loans, which are comprised of construction loans and permanent
mortgage loans, grew 11% during 1994 despite a decrease of $4,598,000 in
construction loans. After several years of low construction lending activity in
the early 1990's, the Bank is seeing increased demand from local residential
builders. Due to the risk involved in construction loans, the Bank reviews each
project individually, applying conservative underwriting policies. Permanent
mortgage loans, which consist of commercial and residential mortgages as well as
home equity loans, increased $13,842,000 as the Bank continues to identify
businesses in its market area that are seeking to expand and consumers that also
have needs for loans that are collateralized by real estate.
Commercial loans grew 10% in 1994, as the Bank continues to develop
relationships with small- and medium-sized businesses that have credit needs and
are looking for the responsive, personalized service that has become a trademark
of the Bank.
[CHART APPEARS HERE]
16 Bryn Mawr Bank Corporation
<PAGE>
A detailed breakdown of the loan portfolio, nonperforming assets, and the loan
loss reserve allocation at December 31, 1994, is as follows:
Table 11 -- Loan Portfolio and Nonperforming Asset Analysis
<TABLE>
<CAPTION>
Loan Loss
Loan Portfolio Nonperforming Assets Reserve
-------------------------------------------------------------------------------------
Other Total
Past Due Past Due Non- Real Non- Reserve for
30 to 89 90 Days Total Performing Estate Performing Loan Loss
(in thousands) Current Days or More Loans Loans* Owned** Assets Allocation
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Real estate loans:
Permanent mortgage loans:
Residential............................... $ 20,500 $ 33 $ 72 $ 20,605 $ 72 $ 431 $ 503 $ --
Commercial................................ 30,184 97 275 30,556 299 982 1,281 --
Home equity............................... 40,959 227 48 41,234 48 75 123 --
------------------------------------------------------------------------------------------------------------------------------------
Total permanent mortgage loans........... 91,643 357 395 92,395 419 1,488 1,907 332
Construction mortgage loans:
Residential construction.................. 4,609 -- 275 4,884 275 202 477 --
Commercial construction................... -- -- -- -- -- 1,785 1,785 --
------------------------------------------------------------------------------------------------------------------------------------
Total construction mortgage loans........ 4,609 -- 275 4,884 275 1,987 2,262 273
------------------------------------------------------------------------------------------------------------------------------------
Total real estate loans.................. 96,252 357 670 97,279 694 3,475 4,169 605
------------------------------------------------------------------------------------------------------------------------------------
Commercial and industrial loans............. 54,443 188 -- 54,631 -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total commercial and industrial loans.... 54,443 188 -- 54,631 -- -- -- 1,289
------------------------------------------------------------------------------------------------------------------------------------
Consumer loans:
Direct..................................... 11,356 29 33 11,418 33 -- 33 --
Indirect................................... 62,925 220 37 63,182 37 -- 37 --
CreditLine................................. 2,189 27 12 2,228 12 -- 12 --
------------------------------------------------------------------------------------------------------------------------------------
Total consumer loans..................... 76,470 276 82 76,828 82 -- 82 680
Unallocated reserve for loan loss........... -- -- -- -- -- -- -- 1,044
------------------------------------------------------------------------------------------------------------------------------------
Total.................................... $227,165 $821 $752 $228,738 $776 $3,475 $4,251 $3,618
====================================================================================================================================
</TABLE>
* Nonperforming loans are loans on which scheduled principal and/or interest was
past due 90 days or more and loans less than 90 days past due which are deemed
to be problem loans by management. Total nonperforming loans of $776,000
include the $752,000 in loans past due 90 days or more, plus $24,000 in loans
less than 90 days delinquent on which certain borrowers have paid interest
regularly.
** Other real estate owned was written down to current market values at the time
of reclassification to this category. These amounts are not included in the
total loan amounts.
Deposits
The Bank attracts deposits from within its primary market area by offering
various deposit instruments, including savings accounts, NOW accounts, market
rate accounts, and certificates of deposit.
Total deposits increased 4% to $301,337,000 at December 31, 1994, from
$291,074,000 at year-end 1993. A more meaningful measure of deposit change is
average daily balances. As illustrated in Table 12, average deposit balances
increased 6%. In 1994, the deposit mix continued a three-year trend of shifting
from higher costing certificates of deposit to lower costing savings and demand
deposits. This trend is due to the low interest rate environment and customer
preference for shorter maturities.
Table 12 presents the average balances of deposits and the percentage
change for the years indicated:
[CHART APPEARS HERE]
Bryn Mawr Bank Corporation 17
<PAGE>
Table 12 -- Average Daily Balances of Deposits
<TABLE>
<CAPTION>
% Change % Change
1994 vs. 1993 vs.
(dollars in thousands) 1994 1993 1993 1992 1992
-------------------------------------------------
<S> <C> <C> <C> <C> <C>
Demand deposits,
noninterest-
bearing............ $ 65,976 $ 60,390 9.2% $ 57,961 4.2%
-------------------------------------------------
Market rate
accounts.......... 56,694 51,163 10.8 52,270 (2.1)
NOW accounts........ 67,195 59,758 12.4 47,763 25.1
Regular savings..... 56,011 57,145 (2.0) 44,752 27.7
-------------------------------------------------
179,900 168,066 7.0 144,785 16.1
-------------------------------------------------
Time deposits....... 42,925 44,767 (4.1) 55,335 (19.1)
-------------------------------------------------
Total............. $288,801 $273,223 5.7% $258,081 5.9%
=================================================
</TABLE>
The following table shows the maturity of certificates of deposit of
$100,000 or greater as of December 31, 1994:
Table 13 -- Maturity of Certificates of Deposit of $100,000 or Greater
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
Three months or less........... $3,230
Three to six months............ 1,669
Six to twelve months........... 559
Greater than twelve months..... 316
------
Total $5,774
======
</TABLE>
Capital Adequacy
At December 31, 1994, total shareholders' equity was $27,146,000 compared to
$24,627,000 at December 31, 1993; an increase of 10%. In addition to earnings
and dividends for the year, the impact of SFAS No. 115 resulted in a
significant change in shareholders' equity in 1994. As of December 31, 1994,
shareholders' equity included unrealized losses on investment securities, net
of deferred taxes, of $945,000. Fluctuations in prevailing interest rates
could cause volatility in this component of capital in future periods.
The Bank is required to meet certain regulatory capital adequacy
guidelines. Under these guidelines, risk-based capital ratios measure capital
as a percentage of risk-adjusted assets.
[CHART APPEARS HERE]
Risk-adjusted assets are determined by assigning various weights to all assets
and off-balance sheet arrangements, such as letters of credit and loan
commitments, based on the associated risk.
The Bank's risk-based capital ratios at December 31, 1994 and 1993, are
listed below. These ratios are all in excess of the minimum required capital
ratios, also listed below.
Table 14 -- Risk-Based Capital Ratios
<TABLE>
<CAPTION>
1994 1993
-----------------------------------
Minimum Minimum
Actual Required Actual Required
-----------------------------------
<S> <C> <C> <C> <C>
Tier I capital ratio............. 10.82% 4.00% 10.84% 4.00%
Total capital ratio.............. 12.08 8.00 12.10 8.00
</TABLE>
The Federal Deposit Insurance Corporation ("FDIC") has created a
statutory framework for capital requirements that established five categories
of capital strength, ranging from a high of "well-capitalized" to a low of
"critically under-capitalized." As of December 31, 1994 and 1993, the Bank
exceeded the levels required to meet the definition of a "well-capitalized"
bank. Management anticipates that the Bank will continue to be in compliance
with all capital requirements.
The Corporation's continued declaration of dividends in the future is
dependent on future earnings.
RISK ELEMENTS
Risk elements, as defined by the Securities and Exchange Commission in its
Industry Guide 3, are composed of four specific categories: (1) nonaccrual,
past due, and restructured loans, (2) potential problem loans, loans not
included in the first category, but where information known by Bank
management indicates that the borrower may not be able to comply with present
payment terms, (3) foreign loans outstanding, and (4) loan concentrations.
Table 11 presents a summary, by loan type, of the Bank's nonaccrual and past
due loans as of December 31, 1994. It is the Bank's policy to promptly place
nonperforming loans on nonaccrual status. Bank management knows of no
outstanding loans that presently would meet the criteria for inclusion in the
potential problem loan category, as indicated under specific category (2)
referred to above. The Bank has no foreign loans, and loan concentrations are
presented in Table 6. This table presents the percentage of outstanding
loans, by loan type, compared to total loans outstanding as of December 31,
1994.
Asset Quality
The Bank is committed to maintaining and developing quality assets. Loan
growth is generated primarily within the Bank's market area, which includes
Montgomery, Delaware, and Chester Counties, as well as portions of Bucks and
Philadelphia Counties. The development of quality loan growth is controlled
through a uniform lending policy that defines the lending functions and
goals, loan approval process, lending limits, and loan review.
The Bank has consistently been reducing the amount of nonperforming
assets from a year-end high of $18,346,000 in 1990 to $4,251,000 as of
December 31, 1994. Nonperforming assets are down 25% from December 31, 1993,
when they were
18 Bryn Mawr Bank Corporation
<PAGE>
$5,682,000. This decrease in nonperforming assets was achieved while the loan
portfolio grew 19%. The ratio of nonperforming assets as a percentage of total
assets was 1.28% as of December 31, 1994, compared to 1.77% as of December 31,
1993. The decrease in nonperforming assets is due to the disposition of OREO
properties as well as the improved real estate market and the general economic
environment. In addition to a decrease in nonperforming assets, loans that are
past due 30 days or more, shown in Table 11, have also decreased over 50% from
$3,467,000 to $1,573,000 as of December 31, 1993 and 1994, respectively.
Total nonperforming assets, which include nonaccruing and past due loans
and other real estate owned, are presented in the table below for each of the
five years in the period ended December 31, 1994.
Table 15 -- Nonperforming Assets
<TABLE>
<CAPTION>
December 31
------------------------------------------------
(in thousands) 1994 1993 1992 1991 1990
------------------------------------------------
<S> <C> <C> <C> <C> <C>
Loans past due 90 days
or more not on non-
accrual status:
Real estate-mortgage........ $ 48 $ 139 $ 240 $ 232 $ 253
Consumer.................... 82 59 121 182 245
Loans on which the
accrual of interest has
been discontinued:
Commercial and
industrial................. -- 205 1,023 1,356 1,885
Real estate-mortgage........ 371 1,032 862 115 35
Real estate-construction.... 275 708 407 1,803 10,502
------------------------------------------------
Total nonperforming
loans.................. 776 2,143 2,653 3,688 12,920
Other real estate owned
and in-substance foreclosed
properties*................... 3,475 3,539 6,524 9,654 5,426
------------------------------------------------
Total nonperforming
assets................. $4,251 $5,682 $9,177 $13,342 $18,346
================================================
</TABLE>
All loans past due 90 days or more, except consumer and home equity mortgage
loans, are placed on nonaccrual status. Such factors as the type and size of the
loan, the quality of the collateral, and historical creditworthiness of the
borrower and/or guarantors are considered by management in assessing the
collectibility of such loans. Interest foregone on nonaccrual status loans was
$128,000 for the year ended December 31, 1994. Interest earned and included in
interest income on these loans prior to their nonperforming status amounted to
$7,000 in 1994.
*Refer to Note 2 to the consolidated financial statements.
The Bank maintains an Officer Loan Review Committee (the "Committee") that
periodically reviews the status of all nonaccrual loans, loans criticized by
both the Bank's regulators and an independent consultant retained to review
both the loan portfolio as well as the overall adequacy of the loan loss
reserve. During the review of the loan loss reserve, the Committee considers
specific loans on a loan-by-loan basis, pools of similar loans, prior
historical writeoff activity, and a supplemental reserve allocation as a
measure of conservatism for any unforeseen loan loss reserve requirements.
The sum of these components is compared to the loan loss reserve balance, and
any additions deemed necessary to the loan loss reserve balance are charged
to operating expenses on a timely basis.
The Corporation is regulated and periodically inspected by the Federal
Reserve Board. The Bank is regulated and periodically examined by the FDIC
and the Pennsylvania Department of Banking. There are no recommendations by
the regulators which would have a material effect on the Corporation's
liquidity, capital resources, or results of operations.
In May 1993, Statement of Financial Accounting Standards No. 114,
"Accounting by Creditors for Impairment of a Loan" ("SFAS No. 114"), was
issued. Under the requirements of SFAS No. 114, recognition of an impairment
in the performance of a loan will be required when it is probable that all
amounts will not be collected in accordance with the loan agreement. SFAS No.
114 was subsequently amended by Statement of Financial Accounting Standards
No. 118, "Accounting by Creditors for Impairment of a Loan -- Income
Recognition and Disclosure" ("SFAS No. 118"), to allow a creditor to use
existing methods for recognizing interest income on an impaired loan. It is
anticipated that the adoption of SFAS No. 114 and No. 118, required in the
first quarter of 1995, will not have a material impact on the financial
position or results of operations of the Corporation.
Asset and Liability Management
Through its Asset/Liability Committee ("ALCO") and the application of Risk
Management Policies and Procedures, the Bank seeks to minimize its exposure
to interest rate risk as well as to maintain sufficient liquidity and capital
compliance.
Interest Rate Sensitivity
The difference between interest sensitive assets and interest sensitive
deposits, stated in dollars, is referred to as the interest rate sensitivity
gap. A positive gap is created when interest rate sensitive assets exceed
interest rate sensitive deposits. A positive interest rate sensitive gap 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 a negative gap. In practice, however, there may be a lag in
repricing some products in comparison to others. A positive gap
Bryn Mawr Bank Corporation 19
<PAGE>
Table 16 -- Interest Rate Sensitivity Analysis
as of December 31, 1994
<TABLE>
<CAPTION>
Repricing Periods
-----------------------------------------------------------------------------
0 to 30 31 to 90 91 to 180 181 to 365 Over Non-Rate
(dollars in thousands) Days Days Days Days 1 Year Sensitive Total
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Interest-bearing deposits with other banks... $ 1,584 $ -- $ -- $ -- $ -- $ -- $ 1,584
Federal funds sold........................... 9,500 -- -- -- -- -- 9,500
Investment securities........................ 310 -- 6,564 12,118 39,571 -- 58,563
Loans........................................ 77,085 4,893 7,207 16,179 123,374 (3,618) 225,120
Cash and due from banks...................... -- -- -- -- -- 19,353 19,353
Other assets................................. -- -- -- -- -- 19,060 19,060
-----------------------------------------------------------------------------
Total assets................................ $88,479 $ 4,893 $13,771 $28,297 $162,945 $ 34,795 $333,180
Liabilities and shareholders' equity:
Demand, noninterest-bearing.................. $ -- $ -- $ -- $ -- $ -- $ 83,142 $ 83,142
Savings deposits............................. 66,141 -- -- -- 110,234 -- 176,375
Time deposits................................ 5,544 7,711 11,395 7,944 9,226 -- 41,820
Other liabilities............................ -- -- -- -- -- 4,697 4,697
Shareholders' equity......................... -- -- -- -- -- 27,146 27,146
-----------------------------------------------------------------------------
Total liabilities and shareholders' equity.. $71,685 $ 7,711 $11,395 $ 7,944 $119,460 $114,985 $333,180
Gap........................................... $16,794 $(2,818) $ 2,376 $20,353 $ 43,485 $(80,190) --
Cumulative gap................................ $16,794 $13,976 $16,352 $36,705 $ 80,190 -- --
Cumulative earning assets as a ratio
of costing liabilities....................... 123% 118% 118% 137% 137% -- --
</TABLE>
The interest rate sensitivity of savings deposits are reflected based on
management's experience and assumptions regarding the impact of product pricing,
interest rate spread relationships, and customer behavior. These assumptions are
subjective and will vary over time with changes in market conditions and
customer preferences.
in the short term, 30 days or less, in an increasing rate environment should
produce an increase in net interest income. The converse is true of a
negative gap in a rising interest rate environment.
As shown in the table above, the Bank is presently asset interest rate
sensitive in the short term, 30 days or less category.
The Bank uses income 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 year-end 1994, based on results
from the simulation models, the amount of the Bank's interest rate risk was
within the acceptable range as established by the Bank's Risk Management
Policies and Procedures.
While future interest rate movements and their effect on Bank revenue
cannot be predicted, there are no trends, events, or uncertainties of which the
Corporation's management is currently aware 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.
Liquidity
The Bank's liquidity is maintained by managing its core deposits, purchasing
federal funds, selling loans in the secondary market, and borrowing from the
Federal Home Loan Bank of Pittsburgh. The Bank had available a $32,000,000
line of credit with the Federal Home Loan Bank of Pittsburgh as of December
31, 1994.
The Bank's liquid assets include cash and cash equivalents as well as
certain unpledged investment securities. Periodically, ALCO reviews the Bank's
liquidity ratio, which is essentially the relationship of liquid assets to
certain deposits. This ratio as of December 31, 1994, was 24% compared to 34% as
of December 31, 1993. The primary reason for the decline in the liquidity ratio
was the decrease in investments, necessary to fund loan growth, along with an
increase in total deposits. It is the Bank's policy to maintain a liquidity
ratio in excess of 20%.
During 1994, the Corporation's financing activities provided $9,635,000
as a result of the increase in deposits. These cash flows, along with net
reductions in investments of $20,119,000, and cash equivalents of $3,919,000,
provided the majority of the funding for the $37,021,000 increase in
outstanding loans during 1994.
In 1993, financing activities provided $14,449,000 of funding for
increased loan and investment portfolios, which grew by $12,136,000 and
$13,272,000, respectively. In addition to the financing activity, funding for
loan and investment growth came from the sale of OREO and the retention of
operating profits.
20 Bryn Mawr Bank Corporation
<PAGE>
1993 VS. 1992 RESULTS OF OPERATIONS
Net Income
Net income for the year ended December 31, 1993, was $3,712,000, a 15%
increase over net income of $3,223,000 for the year ended December 31, 1992.
Income, before the cumulative effect of an accounting change in 1993, was
$3,887,000, a 31% increase over income before an extraordinary credit for the
year ended December 31, 1992, of $2,973,000.
On a per share basis, net income rose from $2.97 in 1992 to $3.41 in
1993. In 1993, the Corporation paid dividends of $0.40 per share after paying
no dividends in 1992.
Return on average assets was 1.23% for 1993 compared to 1.13% in 1992.
Return on average equity was 16.37% in 1993 versus 16.41% in 1992.
Net Interest Income
From year to year, net interest income was stable at just over $13,600,000.
Overall, interest income decreased $1,821,000 from 1992 to 1993. Growth
in the average investment portfolio in 1993 of $19,961,000 partially offset
the effect on interest income of the decreased yields on earnings assets,
which fell from 8.7% in 1992 to 7.4% in 1993.
Interest expense declined $1,860,000 from 1992 to 1993 due to a decline
in interest rates paid on deposits, from 3.8% in 1992 to 2.7% in 1993, as
well as a shift in the mix of deposits from higher yielding certificates of
deposit to lower yielding savings and demand deposits.
Loan Loss Provision
The provision for loan losses amounted to $500,000 in 1993, down $225,000
from the $725,000 provided in 1992. The allowance for possible loan losses as
a percentage of nonperforming loans amounted to 168% and 145% as of December
31, 1993 and 1992, respectively.
Other Income
Other income grew 23% in 1993 primarily as a result of a $1,644,000 increase
in net gains on sales of loans. Trust income grew 10% in 1993 over 1992. The
remaining components of other income decreased 6% in 1993.
Other Expenses
Other expenses were limited to a 3% increase in 1993 over 1992. Salaries and
benefits rose $835,000 in 1993 primarily as a result of a $417,000 bonus for
employees directly related to the overall profitability of the Corporation. A
similar bonus was not paid in 1992.
Advertising costs increased by $375,000 in 1993 over 1992 levels as a
result of the beginning of the Corporation's television, radio, and print
media advertising campaign.
Professional fees and the cost of operating OREO decreased $397,000 and
$349,000, respectively, in 1993 as the amount of nonperforming assets were
reduced by 38%, or $3,495,000, from year-end 1992 to 1993.
Income Taxes
The income tax provision for 1993 was $1,401,000, or a 26.5% effective rate,
compared to $813,000, or a 21.5% effective rate, for 1992.
PRICE RANGE OF SHARES
<TABLE>
<CAPTION>
1994 1993
High-Low Quotations High-Low Quotations
-------------------------------- -------------------------------
High Low Dividend High Low Dividend
Quarter Bid Bid Declared Bid Bid Declared
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1st........ $33 1/2 $31 3/4 $.15 $29 1/4 $22 $.10
2nd........ 33 1/4 31 3/4 .15 29 1/2 26 1/2 .10
3rd........ 33 1/4 31 3/4 .15 32 5/8 26 1/2 .10
4th........ 33 1/4 31 3/4 .20 33 1/2 31 1/2 .10
</TABLE>
The approximate number of holders of record of common stock as of December 31,
1994, was 574.
The shares are traded on the over-the-counter market, and the price information
was obtained from The National Association of Securities Dealers (NASD).
Bryn Mawr Bank Corporation 21
<PAGE>
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(in thousands)
--------------------
As of December 31 1994 1993
--------------------
<S> <C> <C>
Assets
Cash and due from banks.......................................... $ 19,353 $ 18,242
Interest-bearing deposits with other banks....................... 1,584 2,899
Federal funds sold............................................... 9,500 13,215
Investment securities available for sale, at market value
(amortized cost of $59,995,000 at December 31, 1994).......... 58,563 --
Investment securities available for sale, at lower of amortized
cost or market value (market value of $81,421,000
at December 31, 1993).......................................... -- 80,114
Loans............................................................ 228,738 191,717
Less: Allowance for possible loan losses................... (3,618) (3,601)
--------------------
Net loans.............................................. 225,120 188,116
--------------------
Premises and equipment, net...................................... 11,383 11,098
Accrued interest receivable...................................... 1,999 1,890
Refundable federal income taxes.................................. 160 105
Deferred federal income taxes.................................... 1,730 1,309
Other real estate owned and in-substance
foreclosed properties.......................................... 3,475 3,539
Other assets..................................................... 313 415
--------------------
Total assets............................................... $333,180 $320,942
====================
Liabilities
Deposits:
Demand, noninterest-bearing.................................... $ 83,142 $ 68,959
Savings........................................................ 176,375 178,279
Time........................................................... 41,820 43,836
--------------------
Total deposits......................................... 301,337 291,074
Other liabilities................................................ 4,697 5,241
--------------------
Total liabilities.......................................... 306,034 296,315
--------------------
Commitments and contingencies (Note 12)
Shareholders' equity
Common stock, par value $1, authorized, 5,000,000 shares,
issued 1,245,100 shares and 1,240,020 shares as of
December 31, 1994 and 1993, respectively, and
outstanding 1,093,690 shares and 1,088,610 shares
as of December 31, 1994 and 1993, respectively................. 1,245 1,240
Paid-in capital in excess of par value........................... 5,559 5,439
Unrealized investment depreciation, net of deferred
income taxes................................................... (945) --
Retained earnings................................................ 22,826 19,487
--------------------
28,685 26,166
Less common stock in treasury, at cost -- 151,410 shares
as of December 31, 1994 and 1993............................... (1,539) (1,539)
--------------------
Total shareholders' equity................................. 27,146 24,627
--------------------
Total liabilities and shareholders' equity................. $333,180 $320,942
====================
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
22 Bryn Mawr Bank Corporation
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
(in thousands, except for share and per share data)
------------------------------------
For the years ended December 31 1994 1993 1992
------------------------------------
<S> <C> <C> <C>
Interest income:
Interest and fees on loans.......................... $16,498 $15,741 $17,962
Interest on federal funds sold...................... 261 343 431
Interest and dividends on investment securities:
Taxable interest income......................... 2,853 2,594 2,207
Tax-exempt interest income...................... 708 749 624
Dividend income................................. 58 68 92
------------------------------------
Total interest income......................... 20,378 19,495 21,316
Interest expense on deposits........................... 5,077 5,823 7,683
------------------------------------
Net interest income.................................... 15,301 13,672 13,633
Loan loss provision.................................... 500 500 725
------------------------------------
Net interest income after loan loss provision.......... 14,801 13,172 12,908
------------------------------------
Other income:
Fees for trust services............................. 4,719 4,419 4,016
Service charges on deposit accounts................. 1,068 1,266 1,208
Other fees and service charges...................... 1,192 1,394 1,405
Net gain (loss) on sale of loans.................... 386 1,442 (202)
Gain on sale of other real estate owned............. 294 889 845
Other real estate owned revenue..................... 319 -- --
Other operating income.............................. 405 376 707
------------------------------------
Total other income............................. 8,383 9,786 7,979
------------------------------------
Other expenses:
Salaries--regular................................... 6,705 6,253 5,932
Salaries--other..................................... 817 1,061 423
Employee benefits................................... 1,789 1,488 1,612
Occupancy expense................................... 1,389 1,333 1,323
Furniture, fixtures, and equipment.................. 851 811 924
Advertising......................................... 839 716 341
Computer processing................................. 1,085 1,051 1,006
Stationery and supplies............................. 258 260 226
Professional fees................................... 683 937 1,334
Insurance........................................... 807 867 792
Merchant credit card processing..................... 299 279 264
Net cost of operation of other real estate owned
and in-substance foreclosed properties............ 39 594 943
Other operating expenses............................ 1,974 2,020 1,981
------------------------------------
Total other expenses........................... 17,535 17,670 17,101
------------------------------------
Income before income taxes, extraordinary credit, and
cumulative effect of accounting change.............. 5,649 5,288 3,786
Applicable income taxes................................ 1,600 1,401 813
------------------------------------
Income before extraordinary credit and cumulative
effect of accounting change......................... 4,049 3,887 2,973
Extraordinary credit................................... -- -- 250
Cumulative effect of accounting change................. -- (175) --
------------------------------------
Net income............................................. $ 4,049 $ 3,712 $ 3,223
====================================
Earnings per average common share before extraordinary
credit and cumulative effect of accounting change... $ 3.71 $ 3.57 $ 2.74
Extraordinary credit................................... $ -- $ -- $ .23
Cumulative effect of accounting change................. $ -- $ (.16) $ --
Earnings per average common share from net income...... $ 3.71 $ 3.41 $ 2.97
Number of average shares outstanding................... 1,091,950 1,088,223 1,085,294
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
Bryn Mawr Bank Corporation 23
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(in thousands)
--------------------------------
For the years ended December 31 1994 1993 1992
--------------------------------
<S> <C> <C> <C>
Operating activities:
Net income................................................. $ 4,049 $ 3,712 $ 3,223
Adjustments to reconcile net income to
net cash provided by operating activities:
Provision for loan losses............................. 500 500 725
Provision for depreciation and amortization........... 891 873 953
Provisions for writedowns of other real estate owned.. -- 504 943
Cumulative effect of accounting change................ -- 175 --
Extraordinary credit.................................. -- -- (250)
Loans originated for resale........................... (41,260) (115,092) (91,809)
Proceeds from sale of loans........................... 40,986 111,194 95,599
(Gain) loss on sale of loans.......................... (386) (1,442) 202
Gain on sale of investment securities................. (2) -- --
Net gain on disposal of other real estate owned....... (294) (889) (845)
Provision for deferred income taxes................... 66 290 644
Change in income taxes payable (refundable)........... (55) 676 1,145
Change in interest receivable......................... (109) (215) 250
Change in interest payable............................ (11) (27) (418)
Other................................................. (97) 1,059 399
----------------------------------
Net cash provided by operating activities........... 4,278 1,318 10,761
----------------------------------
Investing activities:
Purchases of investment securities.................... (10,261) (47,832) (44,646)
Proceeds from maturities of investment securities..... 23,254 34,437 19,888
Proceeds from sales of investment securities
available for sale................................... 7,009 -- --
Proceeds from sales of equity investments............. -- -- 1,091
Proceeds on disposition of other real estate owned.... 975 5,123 7,090
Purchase of other real estate owned................... -- (1,319) --
Loan repayments, net of originations.................. 8,125 16,049 5,290
Purchase of automobile retail installment contracts... (45,877) (22,061) (10,818)
Loan originations to facilitate the sale of other
real estate owned.................................... -- (1,532) --
Purchases of premises and equipment................... (1,057) (869) (75)
----------------------------------
Net cash used by investing activities............... (17,832) (18,004) (22,180)
----------------------------------
Financing activities:
Net increase in demand and savings deposits........... 12,279 18,657 28,090
Net decrease in time deposits......................... (2,016) (3,768) (21,733)
Dividends paid........................................ (710) (435) --
Repayment of mortgage debt............................ (43) (35) (32)
Proceeds from issuance of common stock................ 125 30 32
----------------------------------
Net cash provided by financing activities........... 9,635 14,449 6,357
----------------------------------
Change in cash and cash equivalents........................ (3,919) (2,237) (5,062)
Cash and cash equivalents at beginning of year............. 34,356 36,593 41,655
----------------------------------
Cash and cash equivalents at end of year................... $30,437 $34,356 $36,593
==================================
Supplemental cash flow information:
Cash paid during the year for:
Income taxes paid..................................... $ 1,513 $ 1,220 $ 950
Interest paid......................................... 5,088 5,850 8,101
Noncash investing transactions:
Loans converted into other real estate owned.......... 908 318 3,300
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
24 Bryn Mawr Bank Corporation
<PAGE>
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
(in thousands, except for shares of common stock)
----------------------------------------------------------------------------
Shares of Unrealized
Common Common Paid-in Retained Gains Treasury
For the years ended 1994, 1993, and 1992 Stock issued Stock Capital Earnings (Losses) Stock
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1991........................... 1,236,520 $1,237 $5,380 $12,987 $ -- $(1,539)
Net income........................................... -- -- -- 3,223 -- --
Common stock issued.................................. 1,800 1 31 -- -- --
----------------------------------------------------------------------------
Balance, December 31, 1992........................... 1,238,320 1,238 5,411 16,210 -- (1,539)
Net income........................................... -- -- -- 3,712 -- --
Dividends declared, $0.40 per share.................. -- -- -- (435) -- --
Common stock issued.................................. 1,700 2 28 -- -- --
----------------------------------------------------------------------------
Balance, December 31, 1993........................... 1,240,020 1,240 5,439 19,487 -- (1,539)
Cumulative effect of change
in accounting principle, net of deferred
income taxes of $444,000.......................... -- -- -- -- 863 --
Net income........................................... -- -- -- 4,049 -- --
Dividends declared, $0.65 per share................. -- -- -- (710) -- --
Change in unrealized gains (losses), net of deferred
income taxes of ($931,000)........................ -- -- -- -- (1,808) --
Common stock issued.................................. 5,080 5 120 -- -- --
----------------------------------------------------------------------------
Balance, December 31, 1994........................... 1,245,100 $1,245 $5,559 $22,826 $(945) $(1,539)
============================================================================
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
Bryn Mawr Bank Corporation 25
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION:
The consolidated financial statements include the accounts of Bryn Mawr Bank
Corporation, The Bryn Mawr Trust Company (the "Bank"), Bryn Mawr Financial
Services, Inc., and Profit Research Consulting, Inc. (collectively, the
"Corporation"). Primarily due to recurring losses, the operations of both non-
bank subsidiaries were discontinued effective December 31, 1992. The operations
of the non-bank subsidiaries did not have a material effect on the Corporation's
consolidated financial statements for any of the years presented.
All significant intercompany transactions and accounts have been
eliminated upon consolidation.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The accounting policies of the Corporation conform to generally accepted
accounting principles and to general practices of the banking industry. The
significant accounting policies are as follows:
Cash and cash equivalents:
Cash and cash equivalents include cash and due from banks, federal funds sold,
and interest-bearing deposits with other banks with original maturities of three
months or less. Cash balances reserved to meet regulatory requirements of the
Federal Reserve Board amounted to $8,257,000 and $7,547,000 at December 31, 1994
and 1993, respectively.
Investment securities:
On January 1, 1994, the Corporation adopted the provisions of 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. Management
categorized all of its investment securities as available for sale as part of
the asset/liability management strategy since they may be sold in response to
changes in interest rates, prepayments, and similar factors. Investments in
this classification are reported at the current market value with net
unrealized gains or losses, net of the applicable deferred tax effect, being
added to or deducted from the Corporation's total shareholders' equity on the
balance sheet.
In accordance with SFAS No. 115, prior period financial statements have not
been restated to reflect the change in accounting principle. The cumulative
effect of adopting SFAS No. 115 as of January 1, 1994, was an increase in the
balance of shareholders' equity of $863,000 to reflect the net unrealized gain
of $1,307,000 on investment securities classified as available for sale. As of
December 31, 1994, shareholders' equity was decreased by $945,000 due to
unrealized losses of $1,432,000 in the investment portfolio.
Prior to the adoption of SFAS No. 115, investments in fixed maturity
securities classified as available for sale were carried at the lower of
aggregate amortized cost or market value.
Loans:
Interest income on loans performing satisfactorily is recognized on the accrual
method of accounting. Nonperforming loans are loans on which scheduled principal
and/or interest is past due 90 days or more or loans less than 90 days past due
which are deemed to be problem loans by management. All nonperforming loans,
except consumer loans, are placed on nonaccrual status, and any outstanding
interest receivable at the time the loan is deemed nonperforming is deducted
from interest income. Such factors as the type and size of the loan, the quality
of the collateral, and historical creditworthiness of the borrower and/or
guarantors are considered by management in assessing the collectibility of such
loans.
In May 1993, Statement of Financial Accounting Standards No. 114,
"Accounting by Creditors for Impairment of a Loan" ("SFAS No. 114"), was
issued. Under the requirements of SFAS No. 114, recognition of an impairment
in the performance of a loan will be required when it is probable that all
amounts will not be collected in accordance with the loan agreement. SFAS No.
114 was subsequently amended by Statement of Financial Accounting Standards
No. 118, "Accounting by Creditors for Impairment of a Loan--Income
Recognition and Disclosure" ("SFAS No. 118"), to allow a creditor to use
existing methods for recognizing interest income on an impaired loan. It is
anticipated that the adoption of SFAS No. 114 and No. 118, required in the
first quarter of 1995, will not have a material impact on the financial
position or results of operations of the Corporation.
Loan loss provision:
The loan loss provision charged to operating expenses is based on those factors
which, in management's judgement, deserve current recognition in estimating
possible loan losses including the continuing evaluation of the loan portfolio
and the Bank's past loan loss experience. The allowance for possible loan losses
is an amount that management believes will be adequate to absorb losses inherent
in existing loans and commitments to extend credit.
Premises and equipment:
Premises and equipment are stated at cost, less accumulated depreciation. The
provision for depreciation is computed on a straight-line basis over the
estimated useful lives, as follows: premises--10 to 50 years, and equipment--3
to 20 years. Leasehold improvements are being amortized over the shorter of the
estimated useful life or the term of the lease.
Maintenance and repairs are charged to expense; major renewals and
betterments are capitalized. Gains and losses on dispositions are reflected in
current operations.
26 Bryn Mawr Bank Corporation
<PAGE>
Income taxes:
In February 1992, Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" ("SFAS No. 109"), was issued. It changed the
method of computing deferred income taxes from the deferred to a liability
approach. The Corporation adopted SFAS No. 109 during the first quarter of 1993.
The Corporation did not restate its prior years' consolidated financial
statements in conjunction with the adoption of SFAS No. 109, but rather,
reported a charge against 1993's earnings as the cumulative effect of the
accounting change, in the amount of $175,000. Since deferred taxes are adjusted
for any enacted change in tax rates under SFAS No. 109, the Corporation's
results of operations may be subject to volatility. Approximately $1,304,000 in
federal income tax carryforwards were utilized in 1992, thereby generating the
$250,000 extraordinary credit recorded in 1992.
Trust income:
Trust Division income is recognized on the cash basis of accounting. Reporting
such income on a cash basis does not materially affect net income.
Other real estate owned and in-substance foreclosed properties:
Other real estate owned ("OREO") is comprised of properties acquired through
foreclosure proceedings or acceptance of a deed in lieu of foreclosure. Prior to
1993, real estate considered to be in-substance foreclosed consisted of loans
accounted for as foreclosed property even though foreclosure had not actually
occurred. When there is indication that a borrower no longer has the equity in
the property collateralizing a loan and it is doubtful that equity will be
rebuilt in the foreseeable future, the property is considered to be in-substance
foreclosed. Both OREO and in-substance foreclosed properties are recorded at the
lower of the carrying value of the loan at the time of foreclosure or in-
substance foreclosure, or the market value of the property actually or
constructively received. Market values are estimated through performing a
detailed discounted cash flow analysis of each property. Should the market value
of the property underlying the loan be below the current book value of the loan,
the loan is written down to the current market value through a charge to the
loan loss reserve. In addition, a reserve is maintained for estimated losses to
cover potential risk of loss that may exist in the portfolio of real estate
acquired by foreclosure. The balance of this reserve amounted to $177,000 and
$470,000 as of December 31, 1994 and 1993, respectively. Revenues relating to
the operation of these properties are recognized on a cash basis. Subsequent
costs directly related to the completion of properties under construction are
capitalized to the extent they are considered to be realizable. Operating
expenses and any writedowns of the carrying value subsequent to foreclosure are
charged to current period earnings. Gains and losses upon disposition are
reflected in earnings as realized.
3. INVESTMENT SECURITIES:
The amortized cost and estimated market value of investments, one hundred
percent of which were classified as available for sale, as of December 31 are as
follows:
<TABLE>
<CAPTION>
(in thousands) 1994
--------------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Market Carrying
Cost Gains Losses Value Value
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Obligations of
the U.S.
Government
and agencies....... $46,134 $-- $1,297 $44,837 $44,837
State & political
subdivisions....... 12,861 66 205 12,722 12,722
Other
securities......... 1,000 4 -- 1,004 1,004
--------------------------------------------------------
Total............ $59,995 $70 $1,502 $58,563 $58,563
========================================================
</TABLE>
<TABLE>
(in thousands) 1993
--------------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Market Carrying
Cost Gains Losses Value Value
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Obligations of
the U.S.
Government
and agencies....... $65,080 $ 858 $49 $65,889 $65,080
State & political
subdivisions....... 14,090 494 -- 14,584 14,090
Other
securities......... 944 4 -- 948 944
--------------------------------------------------------
Total............ $80,114 $1,356 $49 $81,421 $80,114
========================================================
</TABLE>
At December 31, 1994, securities having a book value of $10,160,000 were
pledged as collateral for public funds, trust deposits, and other purposes.
The amortized cost and estimated market value of investment securities
at December 31, 1994, by contractual maturity, are shown below. Expected
maturities will differ from contractual maturities because borrowers may have
the right to call or prepay obligations with or without call or prepayment
penalties.
<TABLE>
<CAPTION>
(in thousands) 1994
---------------------------------
Estimated
Amortized Market
Cost Value
---------------------------------
<S> <C> <C>
Due in one year or less $19,222 $18,992
Due after one year through five years.. 38,298 37,166
Due after five years through ten years. 1,475 1,401
Due after ten years.................... 1,000 1,004
---------------------------------
Total............................. $59,995 $58,563
=================================
</TABLE>
Proceeds from sales of debt securities are as follows:
<TABLE>
<CAPTION>
(in thousands) 1994 1993 1992
------------------------------
<S> <C> <C> <C>
Proceeds............................... $7,009 $ -- $1,248
Gross gains............................ 2 -- 27
Gross losses........................... -- -- --
</TABLE>
Bryn Mawr Bank Corporation 27
<PAGE>
4. LOANS:
Loans outstanding at December 31 are detailed by category as follows:
<TABLE>
<CAPTION>
(in thousands) 1994 1993
-------------------
<S> <C> <C>
Real estate loans:
Permanent
mortgage loans................... $ 92,395 $ 78,553
Construction loans................. 4,884 9,482
Commercial and
industrial loans................... 54,631 49,800
Loans to individuals for
household, family, and other
consumer expenditures.............. 76,828 53,882
-------------------
Total.......................... $228,738 $191,717
===================
</TABLE>
All loans past due 90 days or more, except consumer and home equity
mortgage loans, are placed on nonaccrual status. Nonperforming loans amounted
to $776,000 and $2,143,000 at December 31, 1994 and 1993, respectively.
Forgone interest on nonaccrual loans was $128,000, $238,000, and $295,000 in
1994, 1993, and 1992, respectively.
5. ALLOWANCE FOR POSSIBLE LOAN LOSSES:
The summary of the changes in the allowance for possible loan losses is as
follows:
<TABLE>
<CAPTION>
(in thousands) 1994 1993 1992
--------------------------
<S> <C> <C> <C>
Balance, January 1................... $3,601 $3,848 $6,012
Charge-offs.......................... (663) (898) (2,989)
Recoveries........................... 180 151 100
--------------------------
Net charge-offs.................... (483) (747) (2,889)
Loan loss provision.................. 500 500 725
--------------------------
Balance, December 31................. $3,618 $3,601 $3,848
==========================
</TABLE>
6. PREMISES AND EQUIPMENT:
A summary of premises and equipment at December 31 is as follows:
<TABLE>
<CAPTION>
(in thousands) 1994 1993
-------------------
<S> <C> <C>
Land................................. $ 2,974 $ 2,974
Buildings............................ 10,425 10,239
Furniture and equipment.............. 6,646 5,824
Leasehold improvements............... 89 46
-------------------
20,134 19,083
Less accumulated depreciation........ 8,751 7,985
-------------------
Total............................. $11,383 $11,098
===================
</TABLE>
The Corporation has borrowings outstanding of $2,605,000 at December 31,
1994. The borrowings are collateralized by properties with a book value of
$4,450,000 at December 31, 1994. The weighted average interest rate on the
borrowings was 9.75% in 1994 and 1993.
7. DISCLOSURE ABOUT FAIR VALUE OF
FINANCIAL INSTRUMENTS:
Statement of Financial Accounting Standards No. 107, "Disclosures about Fair
Value of Financial Instruments" ("SFAS No. 107"), requires disclosure of the
fair value information about financial instruments, whether or not recognized
in the balance sheet, for which it is practicable to estimate such value. In
cases where quoted market prices are not available, fair values are based on
estimates using present value or other market value techniques. Those
techniques are significantly affected by the assumptions used, including the
discount rate and estimates of future cash flows. In that regard, the
derived fair value estimates cannot be substantiated by comparison to
independent markets and, in many cases, could not be realized in immediate
settlement of the instrument. SFAS No. 107 excludes certain financial
instruments and all non-financial instruments from its disclosure
requirements. Accordingly, the aggregate fair value amounts presented do not
represent the underlying value of the Corporation.
The following methods and assumptions were used to estimate the fair
value of each class of financial instruments for which it is practicable to
estimate that value:
Cash and cash equivalents:
The carrying amounts reported in the balance sheet for cash and cash
equivalents approximate their fair values.
Investment securities:
Estimated fair values for investment securities are based on quoted market
price, where available. If quoted market prices are not available, estimated
fair values are based on quoted market prices of comparable instruments.
Loans:
For variable rate loans that reprice frequently and which have no significant
change in credit risk, estimated fair values are based on carrying values. Fair
values of certain mortgage loans and consumer loans are estimated using
discounted cash flow analyses, using interest rates currently being offered for
loans with similar terms to borrowers of similar credit quality. The estimated
fair value of nonperforming loans is based on discounted estimated cash flows as
determined by the internal loan review of the Bank or the appraised market value
of the underlying collateral, as determined by independent third party
appraisers.
Deposits:
The estimated fair values disclosed for noninterest-bearing demand deposits,
NOW accounts, and Market Rate and Market Rate Checking accounts are, by
definition, equal to the amounts payable on demand at the reporting date
(i.e., their carrying amounts). Fair values for certificates of deposit are
estimated using a discounted cash flow calculation that applies interest
28 Bryn Mawr Bank Corporation
<PAGE>
rates currently being offered on certificates to a schedule of expected
monthly maturities on the certificate of deposit. SFAS No. 107 defines the
fair value of demand deposits as the amount payable on demand and prohibits
adjusting estimated fair value from any value derived from retaining those
deposits for an expected future period of time.
Other liabilities:
Estimated fair values of long-term mortgages, collateralized by two
properties included in premises and equipment, are based on discounted cash
flow analyses, using interest rates currently being offered for similar types
of loans and amortizing the loan under existing amortization tables for each
loan.
Off-balance sheet instruments:
Estimated fair values of the Corporation's off-balance sheet instruments
(standby letters of credit and loan commitments) are based on fees currently
charged to enter into similar loan agreements, taking into account the
remaining terms of the agreements and the counterparties' credit standing.
Since fees and rates charged for off-balance sheet items are at market levels
when set, there is no material difference between the stated amount and
estimated fair values of off-balance sheet instruments.
The carrying amount and estimated fair value of the Corporation's
financial instruments at December 31 are as follows:
<TABLE>
<CAPTION>
(in thousands) 1994 1993
-------------------------------------------------
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
-------------------------------------------------
<S> <C> <C> <C> <C>
Financial assets:
Cash and due from banks.... $ 19,353 $ 19,353 $ 18,242 $ 18,242
Interest-bearing deposits
with other banks.......... 1,584 1,584 2,889 2,889
Federal funds sold......... 9,500 9,500 13,215 13,215
Investment securities...... 58,563 58,563 80,114 81,421
Net loans.................. 225,120 222,247 188,116 192,632
-------------------------------------------------
Total financial assets... $314,120 $311,247 $302,576 $308,399
=================================================
Financial liabilities:
Deposits................... $301,337 $300,548 $291,074 $292,474
Other liabilities.......... 2,605 2,713 2,648 3,041
-------------------------------------------------
Total financial
liabilities............. $303,942 $303,261 $293,722 $295,515
=================================================
Off-balance sheet
instruments................. $ 53,505 $ 53,505 $ 43,331 $ 43,331
</TABLE>
8. APPLICABLE FEDERAL INCOME TAXES:
The Corporation adopted SFAS No. 109 as of January 1, 1993.
The cumulative effect of this change in accounting for income taxes as of
January 1, 1993, decreased net income by $175,000 ($0.16 per share) and is
reported separately in the statement of income for the year ended December
31, 1993.
The components of the net deferred tax asset as of December 31 are as
follows:
<TABLE>
<CAPTION>
(in thousands) 1994 1993
---------------------
<S> <C> <C>
Deferred tax assets:
Other real estate owned......... $ 366 $ 267
Loan loss reserve............... 519 627
Unrealized depreciation on
investments securities........ 487 --
Deferred loan fees.............. 99 174
Other reserves.................. 412 425
---------------------
1,883 1,493
Deferred tax liabilities:
Depreciation.................... (153) (184)
---------------------
Total deferred tax assets.......... $1,730 $1,309
=====================
</TABLE>
No valuation allowance was recorded upon the adoption of SFAS No. 109 in
the first quarter of 1993 or as of December 31, 1994 and 1993.
The provisions for federal income taxes consist of the following:
<TABLE>
<CAPTION>
(in thousands) 1994 1993 1992
----------------------------
<S> <C> <C> <C>
Applicable to income:
Currently payable................ $1,534 $1,111 $169
Deferred......................... 66 290 644
----------------------------
Total......................... $1,600 $1,401 $813
============================
</TABLE>
The sources of timing differences resulting in deferred federal
income taxes and the approximate tax effect of each are as follows:
<TABLE>
<CAPTION>
(in thousands) 1994 1993 1992
------------------------------
<S> <C> <C> <C>
Other real estate owned............ $(99) $(122) $286
Loan loss provision................ 108 122 843
Other reserves..................... -- -- (167)
Depreciation....................... (31) (16) (26)
Pension expense.................... 15 34 (6)
Deferred loan fees................. 75 (23) 46
Other.............................. (2) 295 (332)
------------------------------
Total......................... $ 66 $ 290 $644
==============================
</TABLE>
Applicable federal income taxes differed from the amount
derived by applying the statutory federal tax rate to income as follows:
<TABLE>
<CAPTION>
(dollars in thousands) 1994 1993 1992
--------------------------------
<S> <C> <C> <C>
Statutory federal tax rate......... 34% 34% 34%
--------------------------------
Computed "expected" tax expense.... $1,921 $1,798 $1,287
Reductions in taxes resulting
from tax-exempt income............. (333) (326) (297)
Other, net......................... 12 (71) (177)
--------------------------------
Actual tax expense................. $1,600 $1,401 $ 813
================================
</TABLE>
Bryn Mawr Bank Corporation 29
<PAGE>
9. EMPLOYEE BENEFIT PLANS:
Pension plan:
The Bank sponsors a noncontributory, defined benefit pension plan (the
"Plan") covering substantially all employees. The Plan provides for normal
retirement at age 65 and, under certain conditions, also permits early
retirement and payment of spouse's benefits. Total pension expense (income)
under the Plan amounted to ($45,000), ($106,000), and $18,000 for the years
ended December 31, 1994, 1993, and 1992, respectively.
Pension expense (income) for the years ended December 31 is comprised of
the following:
<TABLE>
<CAPTION>
(in thousands) 1994 1993 1992
----------------------------------
<S> <C> <C> <C>
Service cost--benefits earned
during the period................ $ 407 $ 301 $354
Interest cost on projected
benefit obligation............... 611 585 583
Actual return on Plan assets........ (35) (1,303) (723)
Unrecognized gain................... -- -- (65)
Net amortization and deferral....... (1,028) 311 (131)
----------------------------------
Net periodic pension cost (income).. $ (45) $ (106) $ 18
==================================
</TABLE>
The following table presents a reconciliation of the funded status of
the defined benefit plan at December 31, 1994 and 1993. The accrued pension
liability is included in "Other liabilities" on the accompanying consolidated
balance sheets.
<TABLE>
<CAPTION>
(in thousands) 1994 1993
-------------------
<S> <C> <C>
Actuarial present value of benefit
obligation:
Accumulated benefit obligation
(including vested benefits of
$7,224,000 and $7,282,000 as
of December 31, 1994 and 1993,
respectively)..................... $ 7,319 $ 7,387
-------------------
Projected benefit obligation for
service rendered to date............ 8,382 8,528
Plan assets at fair value (invested
primarily in the Bank's
temporary, income, and equity
common trust funds)................. 10,081 10,453
-------------------
Plan assets in excess of projected
benefit obligation.................. 1,699 1,925
Unrecognized net gain.................. (1,716) (1,856)
Unrecognized prior service cost........ 141 211
Unrecognized transition asset at
January 1, 1994 and 1993, being
amortized over a remaining period
of one year......................... (201) (402)
-------------------
Accrued pension liability included
in consolidated balance sheets...... $ (77) $ (122)
===================
</TABLE>
Significant assumptions used in determining the accrued pension
obligation were as follows:
<TABLE>
<CAPTION>
1994 1993 1992
------------------------------
<S> <C> <C> <C>
Discount rate.......................... 7.5% 7.5% 8.0%
Projected compensation increase........ 5.0 5.0 5.0
Expected long-term rate
of return on Plan assets............. 8.0 8.0 8.0
</TABLE>
Thrift plan:
The Corporation sponsors a thrift and savings plan (the "Thrift Plan")
covering substantially all employees. The Thrift Plan provides for the
Corporation to make incentive contributions equal to the participant's basic
contribution up to a maximum of 3% of compensation and provides for voluntary
employee contributions.
All contributions and interest earned thereon are vested immediately.
The Thrift Plan expense was approximately $170,000, $149,000, and $142,000 in
1994, 1993, and 1992, respectively.
Post-retirement benefits:
In addition to providing pension and thrift plan benefits, the Corporation
provides certain healthcare and life insurance benefits for certain retired
employees. The Corporation adopted Statement of Financial Accounting Standards
No. 106, "Employers' Accounting for Post-Retirement Benefits other than
Pensions" ("SFAS No. 106"), in the first quarter of 1993. SFAS No. 106 requires
that the expected cost of such benefits be actuarially determined and accrued
ratably from the date of hire to the date the employee is fully eligible to
receive benefits. The Corporation elected to amortize the net obligation
existing as of the date of adoption (transition obligation) over the remaining
service periods of active plan participants.
The net periodic post-retirement benefit cost for 1994 and 1993 was
$339,000 and $321,000, respectively. The increase in annual post-retirement
benefit cost for 1993 due to the adoption of SFAS No. 106 was $143,000. The
related charge to expense for 1992 was $117,000.
The net periodic post-retirement benefit cost for the years ended
December 31 is comprised of the following:
<TABLE>
<CAPTION>
(in thousands) 1994 1993
-------------------
<S> <C> <C>
Service cost--benefits
attributed to service during the period...... $ 11 $ 11
Interest cost on accumulated
benefit obligation........................... 201 188
Amortization of transition obligation........... 127 122
-------------------
Net periodic post-retirement benefit cost....... $339 $321
===================
</TABLE>
The assumed discount rate used in the calculation for the accumulated
post-retirement benefit obligation was 7.5% for 1994 and 1993. The assumed
healthcare cost trend rate for 1995 was 10% and was graded down in 1%
increments per year to an ultimate rate of 6% per year.
30 Bryn Mawr Bank Corporation
<PAGE>
The following table summarizes the amounts recognized in the
Corporation's balance sheet as of December 31, 1994 and 1993:
<TABLE>
<CAPTION>
(in thousands) 1994 1993
----------------------
<S> <C> <C>
Accumulated post-retirement
benefit obligation................... $(2,638) $(2,555)
Unrecognized variance of experience
different from that assumed and
unamortized transition obligation.... 2,365 2,412
----------------------
Accrued post-retirement benefit cost... $ (273) $ (143)
======================
</TABLE>
The impact of 1% increase in the assumed healthcare cost trend rate for
each future year would be as follows:
<TABLE>
<CAPTION>
(in thousands) 1994
--------
<S> <C>
Accumulated post-retirement
benefit obligation
as of December 31.............. $2,824
Service cost..................... 11
Interest cost.................... 215
</TABLE>
Post-employment benefits:
In November 1992, Statement of Financial Accounting Standards No. 112,
"Employers' Accounting for Post-Employment Benefits" ("SFAS No. 112") was
issued. SFAS No. 112 requires employers to recognize any obligation to
provide post-employment (as differentiated from post-retirement) benefits by
accruing the estimated liability. During the first quarter of 1994, the
Corporation adopted SFAS No. 112, which did not have a material impact on the
results of operations.
10. STOCK OPTION PLAN:
The Corporation maintains a stock option and stock appreciation rights plan
(the "Plan") whereby, prior to 1994, up to 54,000 authorized and unissued or
Treasury shares of the Corporation's common stock were reserved for issuance
under the Plan.
During 1994, the shareholders' approved an additional 54,430 shares for
issuance under the Plan. The option to purchase shares of the Corporation's
common stock may be issued to key officers. Options granted may either be
"incentive stock options" within the meaning of the Internal Revenue Service
Code, or non-qualified options. The stock options are exercisable over a
period determined by the Board of Directors; however, the option period will
not commence earlier than one year or be longer than ten years from the date
of the grant. The Plan provides that the option price at the date of grant
will not be less than the fair market value of the Corporation's common
stock. The following is a summary of transactions under the Plan:
<TABLE>
<CAPTION>
Shares Available Price
Under for per
Option Option Share
----------------------------------------
<S> <C> <C> <C>
Balance at December 31, 1991..... 44,890 7,110 $18.00-$33.00
Options exercised.............. (1,800) -- $18.00
Options expired................ (4,380) -- $27.00-$33.00
-------------------------
Balance at December 31, 1992..... 38,710 7,110 $18.00-$33.00
Options granted................ 7,000 (7,000) $29.50
Options exercised.............. (1,700) -- $18.00
-------------------------
Balance at December 31, 1993..... 44,010 110 $18.00-$33.00
Options canceled............... -- (110) --
Options authorized............. -- 54,430 --
Options granted................ 53,800 (53,800) $31.00-$37.20
Options exercised.............. (5,080) -- $18.00-$29.50
Options expired................ (1,900) -- $29.50-$33.00
-------------------------
Balance at December 31, 1994..... 90,830 630 $18.00-$37.20
=========================
Exercisable at December 31, 1994. 39,390 $18.00-$37.20
===============
</TABLE>
Stock appreciation rights may be granted in tandem with non-qualified
stock options. No stock appreciation rights have been granted under the Plan.
The options would not have had a material dilutive impact on earnings per
share for the years ended December 31, 1994, 1993, and 1992 had they been
exercised.
11. RELATED PARTY TRANSACTIONS:
The Corporation had loans outstanding directly to executive officers,
directors, and certain other related parties of $2,405,000 and $2,326,000 at
December 31, 1994 and 1993, respectively.
Following is a summary of these transactions:
<TABLE>
<CAPTION>
(in thousands) 1994 1993
---------------------
<S> <C> <C>
Balance, beginning of year.......... $2,326 $1,896
Additions........................... 275 1,279
Amounts collected................... (196) (849)
---------------------
Balance, end of year................ $2,405 $2,326
=====================
</TABLE>
12. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATION OF
CREDIT RISK:
The Corporation is a party to financial instruments with off-balance sheet
risk in the normal course of business to meet the financing needs of its
customers. These financial instruments include commitments to extend credit
and standby letters of credit. Those instruments involve, to varying degrees,
elements of credit risk in excess of the amount recognized in the
consolidated statements of financial condition. The contractual amounts of
those instruments reflect the extent of involvement the Corporation has in
particular classes of financial instruments.
The Corporation's exposure to credit loss in the event of nonperformance
by the counterparty to the financial instrument of commitments to extend
credit and standby letters of credit is represented by the contractual amount
of those instruments. The Corporation uses the same credit policies in making
commitments and conditional obligations as it does for on-balance sheet
financial instruments.
Bryn Mawr Bank Corporation 31
<PAGE>
Commitments to extend credit are agreements to lend to a customer as
long as there is no violation of any condition established in the agreement.
Commitments generally have fixed expiration dates or other termination
clauses and may require payment of a fee. Some of the commitments are
expected to expire without being drawn upon, and the total commitment amounts
do not necessarily represent future cash requirements. Total commitments to
extend credit at December 31, 1994, are $50,845,000. The Corporation evaluates
each customer's creditworthiness on a case-by-case basis. The amount of
collateral obtained, if deemed necessary by the Corporation upon extension of
credit, is based on management's credit evaluation of the counterparty.
Collateral varies but may include accounts receivable, marketable securities,
inventory, property, plant and equipment, residential real estate, and income-
producing commercial properties.
Standby letters of credit are conditional commitments issued by the
Corporation to a customer for a third party. Such standby letters of credit
are issued to support private borrowing arrangements. The credit risk
involved in issuing standby letters of credit is similar to that involved in
extending loan facilities to customers. The collateral varies, but may
include accounts receivable, marketable securities, inventory, property,
plant and equipment, and residential real estate for those commitments for
which collateral is deemed necessary. The Corporation's obligation under
standby letters of credit as of December 31, 1994, amounted to $2,660,000.
As of December 31, 1994, the Corporation had no loans sold with recourse
outstanding.
The Corporation grants construction, commercial, residential mortgage,
and consumer loans to customers primarily in Southeastern Pennsylvania.
Although the Corporation has a diversified loan portfolio, its debtors'
ability to honor their contracts is substantially dependent upon the general
economic conditions of the region.
13. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED):
<TABLE>
<CAPTION>
Quarters ending 1994
------------------------------------
(In thousands, except
per share data) 3/31 6/30 9/30 12/31
------------------------------------
<S> <C> <C> <C> <C>
Interest income................ $4,772 $4,955 $5,160 $5,491
Interest expense............... 1,257 1,241 1,258 1,321
Net interest income............ 3,515 3,714 3,902 4,170
Provision for loan losses...... 125 125 125 125
Income before income taxes..... 1,323 1,342 1,378 1,606
Net income..................... 945 990 1,003 1,111
Net income per share of
common stock................ .87 .91 .92 1.01
</TABLE>
<TABLE>
<CAPTION>
Quarters ending 1993
------------------------------------
(In thousands, except
per share data) 3/31 6/30 9/30 12/31
------------------------------------
<S> <C> <C> <C> <C>
Interest income................. $4,764 $4,780 $4,975 $4,976
Interest expense................ 1,570 1,463 1,436 1,354
Net interest income............. 3,194 3,317 3,539 3,622
Provision for loan losses....... 125 125 125 125
Income before income taxes and
cumulative effect of
accounting change............. 1,106 1,249 1,480 1,453
Net income...................... 656 963 1,056 1,037
Net income per share of
common stock.................. .60 .88 .97 .95
</TABLE>
14. CONDENSED FINANCIAL STATEMENTS:
The condensed financial statements of the Corporation (parent company only)
as of December 31, 1994 and 1993, and for each of the three years in the
period ended December 31, 1994, are as follows:
Condensed balance sheets
<TABLE>
<CAPTION>
(in thousands) 1994 1993
---------------------
<S> <C> <C>
Assets:
Cash........................................... $ 182 $ 95
Investments in subsidiaries,
at equity in net assets...................... 25,117 22,634
Premises and equipment, net.................... 4,450 4,548
Other assets................................... 2 3
---------------------
Total assets............................... $29,751 $27,280
=====================
Liabilities and shareholders' equity:
Mortgages payable.............................. $ 2,605 $ 2,648
Other liabilities.............................. -- 5
---------------------
Total liabilities.......................... 2,605 2,653
---------------------
Common stock, par value $1, authorized
5,000,000 shares, issued 1,245,100 shares
and 1,240,020 shares as of December 31, 1994
and 1993, respectively, and outstanding
1,093,690 shares and 1,088,610 shares as of
December 31, 1994 and 1993, respectively..... 1,245 1,240
Paid-in capital in excess of par value......... 5,559 5,439
Unrealized investment depreciation, net of
deferred income taxes........................ (945) --
Retained earnings.............................. 22,826 19,487
Less common stock in treasury, at cost--151,410
shares as of December 31, 1994 and 1993...... (1,539) (1,539)
---------------------
Total shareholders' equity................. 27,146 24,627
---------------------
Total liabilities and shareholders' equity. $29,751 $27,280
=====================
</TABLE>
32 Bryn Mawr Bank Corporation
<PAGE>
Condensed statements of income
<TABLE>
<CAPTION>
(in thousands) 1994 1993 1992
----------------------------------
<S> <C> <C> <C>
Dividends from The Bryn Mawr
Trust Company............................ $ 710 $ 435 $ --
Interest and other income.................. 389 389 389
----------------------------------
Total operating income................... 1,099 824 389
Expenses................................... 524 459 455
----------------------------------
Income (loss) before equity in
undistributed income (loss) of
subsidiaries before extraordinary
credit and cumulative effect of
accounting change........................ 575 365 (66)
Equity in undistributed income
(losses) of subsidiaries before
extraordinary credit and cumulative
effect of accounting change:
The Bryn Mawr Trust Company.............. 3,428 3,498 3,080
Bryn Mawr Financial
Services, Inc.......................... -- -- (27)
Profit Research Consulting, Inc.......... -- -- (47)
----------------------------------
Income before income taxes,
extraordinary credit, and cumulative
effect of accounting change.............. 4,003 3,863 2,940
Federal income tax benefit................. 46 24 33
----------------------------------
Income before extraordinary credit
and cumulative effect of accounting
change................................... 4,049 3,887 2,973
Extraordinary credit....................... -- -- 250
Cumulative effect of accounting change..... -- (175) --
----------------------------------
Net income................................. $4,049 $3,712 $3,223
==================================
</TABLE>
Condensed statements of cash flows
<TABLE>
<CAPTION>
(in thousands) 1994 1993 1992
----------------------------------
<S> <C> <C> <C>
Operating activities:
Net income............................... $4,049 $3,712 $3,223
Adjustments to reconcile net
income to net cash provided
by operating activities:
Equity in undistributed (earnings)
losses of subsidiaries:
The Bryn Mawr Trust Company............. (3,428) (3,323) (3,330)
Bryn Mawr Financial Services, Inc....... -- -- 47
Profit Research Consulting, Inc......... -- -- 27
Depreciation expense..................... 98 98 92
Other.................................... (47) (28) (11)
----------------------------------
Net cash provided by
operating activities................. 672 459 48
----------------------------------
Investing activities:
Purchase of premises and equipment....... -- -- (31)
----------------------------------
Net cash used by investing activities.. -- -- (31)
----------------------------------
Financing activities:
Dividends paid......................... (710) (435) --
(Investment in) return from Bryn Mawr
Financial Services, Inc............... -- 10 (19)
Return from Profit Research
Consulting, Inc....................... -- -- 1
Proceeds from issuance of stock........ 125 30 32
----------------------------------
Net cash provided (used) by
financing activities................ (585) (395) 14
----------------------------------
Increase in cash and cash
equivalents.............................. 87 64 31
Cash and cash equivalents
at beginning of year..................... 95 31 --
----------------------------------
Cash and cash equivalents
at end of year........................... $ 182 $ 95 $ 31
==================================
</TABLE>
These statements should be read in conjunction with the other notes related
to the consolidated financial statements.
As a bank and trust company subject to the Pennsylvania Banking Code (the
"Banking Code") of 1965, as amended, the Bank is subject to legal limitations
as to the amount of dividends that can be paid to its shareholder, the
Corporation. The Banking Code restricts the payment of dividends by the Bank
to the amount of its retained earnings. As of December 31, 1994, the Bank's
retained earnings amounted to $19,472,000. Therefore, as of December 31,
1994, dividends available for payment to the Corporation are limited to
$19,472,000. Since the sole source of dividend funding for the Corporation's
dividend payments to its shareholders is the Bank's dividends, the
Corporation is effectively limited as to the amount of dividends that it may
pay to an amount equal to the limits placed on the Bank, as discussed above.
Bryn Mawr Bank Corporation 33
<PAGE>
15. SEGMENT INFORMATION:
As a part of its operating segments, the Bank generates significant operating
profits from its banking, trust, and mortgage banking activities. The Bank's
Trust Division provides both corporate and individual trust products and
services to its customers. Assets under management were $799,846,000,
$764,571,000, and $685,905,000 at December 31, 1994, 1993, and 1992,
respectively. The Bank also originates and sells residential mortgage loans
in the secondary mortgage loan market, generating significant operating
profits for the Bank. The Bank originated and sold mortgage loans in the
secondary mortgage loan market amounting to $39,109,000, $108,865,000, and
$93,215,000 in 1994, 1993, and 1992, respectively.
Segment information for the years ended December 31, 1994, 1993, and
1992 is as follows:
<TABLE>
<CAPTION>
1994
--------------------------------------------
Mortgage Consoli-
(in thousands) Banking Trust Banking dated
--------------------------------------------
<S> <C> <C> <C> <C>
Interest and fee income........... $ 20,134 $ -- $ 244 $ 20,378
--------------------------------------------
Other operating income:
Fees for trust services......... -- 4,719 -- 4,719
Service charges on checking
accounts...................... 1,068 -- -- 1,068
Other fees and service charges.. 502 -- 690 1,192
Gains on loan sales............. 39 -- 347 386
Gains on sale of other real
estate owned.................. 294 -- -- 294
Other real estate owned revenue. 319 -- -- 319
Other........................... 405 -- -- 405
--------------------------------------------
Total other operating income...... 2,627 4,719 1,037 8,383
--------------------------------------------
Total gross revenues.............. $ 22,761 $4,719 $1,281 $ 28,761
--------------------------------------------
Operating profit.................. $ 3,421 $1,802 $ 596 $ 5,819
--------------------------------------------
General corporate expenses........ -- -- -- 170
--------------------------------------------
Income before income taxes,
extraordinary credit, and
cumulative effect of
accounting change............... -- -- -- 5,649
--------------------------------------------
Identifiable assets at
December 31..................... 332,909 236 35 333,180
--------------------------------------------
Capital expenditures.............. 841 208 8 1,057
--------------------------------------------
Depreciation and amortization..... $ 806 $ 66 $ 19 $ 891
--------------------------------------------
<CAPTION>
1993
--------------------------------------------
Mortgage Consoli-
(in thousands) Banking Trust Banking dated
--------------------------------------------
<S> <C> <C> <C> <C>
Interest and fee income........... $ 18,905 $ -- $ 590 $ 19,495
--------------------------------------------
Other operating income:
Fees for trust services......... -- 4,419 -- 4,419
Service charges on checking
accounts...................... 1,266 -- -- 1,266
Other fees and service charges.. 517 -- 877 1,394
Gains on loan sales............. 42 -- 1,400 1,442
Gains on sale of other real
estate owned.................. 889 -- -- 889
Other real estate owned revenue. -- -- -- --
Other........................... 369 -- 7 376
--------------------------------------------
Total other operating income...... 3,083 4,419 2,284 9,786
--------------------------------------------
Total gross revenues.............. $ 21,988 $4,419 $2,874 $ 29,281
--------------------------------------------
Operating profit.................. $ 2,144 $1,595 $1,649 $ 5,388
--------------------------------------------
General corporate expenses........ -- -- -- 100
--------------------------------------------
Income before income taxes,
extraordinary credit, and
cumulative effect of
accounting change............... -- -- -- 5,288
--------------------------------------------
Identifiable assets at
December 31..................... 320,816 94 32 320,942
--------------------------------------------
Capital expenditures.............. 840 3 26 869
--------------------------------------------
Depreciation and amortization..... $ 821 $ 41 $ 11 $ 873
--------------------------------------------
<CAPTION>
1992
--------------------------------------------
Mortgage Consoli-
(in thousands) Banking Trust Banking dated
--------------------------------------------
<S> <C> <C> <C> <C>
Interest and fee income........... $ 19,762 $ -- $1,554 $ 21,316
--------------------------------------------
Other operating income:
Fees for trust services......... -- 4,016 -- 4,016
Service charges on checking
accounts...................... 1,208 -- -- 1,208
Other fees and service charges.. 728 -- 677 1,405
Gains (losses) on loan sales.... 50 -- (252) (202)
Gains on sale of other real
estate owned.................. 845 -- -- 845
Other real estate owned revenue. -- -- -- --
Other........................... 639 68 -- 707
--------------------------------------------
Total other operating income...... 3,470 4,084 425 7,979
--------------------------------------------
Total gross revenues.............. $ 23,232 $4,084 $1,979 $ 29,295
--------------------------------------------
Operating profit.................. $ 1,370 $1,349 $1,168 $ 3,887
--------------------------------------------
General corporate expenses........ -- -- -- 101
--------------------------------------------
Income before income taxes,
extraordinary credit, and
cumulative effect of
accounting change............... -- -- -- 3,786
--------------------------------------------
Identifiable assets at
December 31..................... 302,790 136 13 302,939
--------------------------------------------
Capital expenditures.............. 43 17 15 75
--------------------------------------------
Depreciation and amortization..... $ 805 $ 57 $ 91 $ 953
--------------------------------------------
</TABLE>
34 Bryn Mawr Bank Corporation
<PAGE>
Report of Independent Accountants
To the Board of Directors and Shareholders of Bryn Mawr Bank Corporation:
We have audited the accompanying consolidated balance sheets of Bryn Mawr
Bank Corporation and subsidiaries as of December 31, 1994 and 1993, and the
related consolidated statements of income, changes in shareholders' equity,
and cash flows for each of the three years in the period ended December 31,
1994. These financial statements are the responsibility of the Corporation's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Bryn Mawr
Bank Corporation and subsidiaries as of December 31, 1994 and 1993, and the
results of their operations and their cash flows for each of the three years
in the period ended December 31, 1994, in conformity with generally accepted
accounting principles.
As discussed in Note 2 to the consolidated financial statements, the
Corporation changed its method of accounting for investment securities in
1994 and, as discussed in Notes 8 and 9, changed its method of accounting
for income taxes and post-retirement benefits other than pensions,
respectively, in 1993.
/s/ Coopers & Lybrand L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
January 19, 1995
Bryn Mawr Bank Corporation 35
<PAGE>
CORPORATE INFORMATION
as of February 1, 1995
DIRECTORS
Darrell J. Bell
Consultant, Main Line Health Systems
Richard B. Cuff
President, Cuffco. Inc.
Warren W. Deakins
Self-Employed, Insurance Sales
Eleanor Carson Donato
President and Owner,
C.N. Agnew, Realtor, Inc.
Thomas J. Farrell, Jr.
Managing Partner, Renvyle Realty Company
Peter H. Havens
Manger, Kewanee Enterprises
Sherman R. Reed, 3rd
Builder and Developer
Phyllis M. Shea
Attorney-at-Law, Shea and Shea
Robert L. Stevens
President and Chief Executor Officer of
Bryn Mawr Bank Corporation and
The Bryn Mawr Trust Company
B. Loyall Taylor, Jr.
President, Taylor Gifts, Inc.
Samuel C. Wasson, Jr.
Secretary of Bryn Mawr Bank Corporation
and Executive Vice President and Secretary of
The Bryn Mawr Trust Company
Thomas A. Williams
Vice President, Secretary/Treasurer,
E.F. Houghton & Co.
ANNUAL MEETING
The Annual Meeting of Shareholders of Bryn Mawr Bank Corporation will be held at
The American College, 270 Bryn Mawr Avenue, Bryn Mawr, Pennsylvania, on Tuesday,
April 18, 1995, at 2:00 p.m.
CORPORATE HEADQUARTERS
801 Lancaster Avenue
Bryn Mawr, Pennsylvania 19010-3396
(610) 526-2302
AUDITORS
Coopers & Lybrand, L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania 19103-2962
LEGAL COUNSEL
Monterverde & Hemphill
One Penn Center at Suburban Station
1617 John F. Kennedy Boulevard,
Suite 1500
Philadelphia, Pennsylvania 19103-1815
STOCK LISTING
Bryn Mawr Bank Corporation common stock is traded over-the-counter and is listed
on the NASDAQ National Market System under the symbol BMTC.
TRANSFER AGENT
The Bryn Mawr Trust Company
801 Lancaster Avenue
Bryn Mawr, Pennsylvania 19010-3396
REGISTRAR
Mellon Bank N.A.
P.O. Box 444
Pittsburgh, Pennsylvania 15230-0929
FORM 10-K
A copy of the Corporation's Form 10-K, including financial statement schedules
as filed with the Securities and Exchange Commission, is available without
charge to shareholders upon written request to Samuel C. Wasson, Jr., Secretary,
Bryn Mawr Bank Corporation, 801 Lancaster Avenue, Bryn Mawr, Pennsylvania 19010-
3396.
SHAREHOLDER RELATIONS
Samuel C. Wasson, Jr.
Secretary
(610) 526-2343
MARKET MAKERS
F.J. Morrissey & Co., Inc.
Philadelphia, Pennsylvania
Herzog, Heine, Geduld, Inc.
New York, New York
Janney Montgomery Scott, Inc.
Philadelphia, Pennsylvania
Legg Mason Wood Walker, Inc.
Philadelphia, Pennsylvania
McConnell Budd & Downes
Morristown, New Jersey
36 Bryn Mawr Bank Corporation
<PAGE>
The Bryn Mawr Trust Company
801 Lancaster Avenue
Bryn Mawr, Pennsylvania 19010-3396
(610) 525-1700
SENIOR MANAGEMENT:
Robert L. Stevens*
President
Robert J. Ricciardi*
Executive Vice President,
Community Banking
Samuel C. Wasson, Jr.*
Executive Vice President and
Secretary, Loans
Joseph G. Keefer
Senior Vice President, Commercial
& Real Estate Lending Services
Paul M. Kistler, Jr.
Senior Vice President, Human Resources,
Facilities, and Marketing
Donald B. Krieble
Senior Vice President, Consumer Credit Services
Thomas M. Petro
Senior Vice President, Information
Management
Joseph W. Rebl*
Senior Vice President and Treasurer, Finance
Richard I. Sichel
Senior Vice President, Trust
Joseph H. Bachtiger
Group Vice President, Trust
William J. Fink
Group Vice President, Commercial
& Real Estate Lending Services
Geoffrey L. Halberstadt, Sr.
Group Vice President, Commercial
& Real Estate Lending Services
William R. Mixon
Group Vice President, Information Systems
* Also officer of the Corporation.
BRANCH OFFICES:
801 Lancaster Avenue
Bryn Mawr, Pennsylvania
19010-3396
(610)525-1700
18 West Eagle Road
Havertown, Pennsylvania 19083
(610)789-1840
39 West Lancaster Avenue
Paoli, Pennsylvania 19301
(610)640-9920
330 East Lancaster Avenue
Wayne, Pennsylvania 19087
(610)341-1400
312 East Lancaster Avenue
Wynnewood, Pennsylvania 19096
(610)896-6435
LIMITED SERVICE OFFICES:
Bellingham Retirement Living
West Chester, Pennsylvania
Martins Run Life Care Community
Media, Pennsylvania
The Quadrangle
Haverford, Pennsylvania
Radnor Corporate Center
Radnor, Pennsylvania
Waverly Heights
Gladwyne, Pennsylvania
[RECYCLED PAPER LOGO APPEARS HERE] Printed on Recycled Paper
<PAGE>
BRYN MAWR BANK CORPORATION
801 Lancaster Avenue
Bryn Mawr, Pennsylvania 19010-3396
(610) 526-2302
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration
Statement of Bryn Mawr Bank Corporation on Form S-8 (File 33-12715) of our
report dated January 19,1995 on our audits of the consolidated financial
statements of Bryn Mawr Bank Corporation as of December 31, 1994 and 1993 and
for each of the three years in the period ended December 31, 1994, which report
is incorporated by reference in this Annual Report on Form 10-K.
COOPERS & LYBRAND, L.L.P.
2400 Eleven Penn Center
Philadelphia, PA
March 29, 1995
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
DECEMBER 31, 1994 AUDITED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 19,353
<INT-BEARING-DEPOSITS> 1,584
<FED-FUNDS-SOLD> 9,500
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 58,563
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 228,738
<ALLOWANCE> 3,618
<TOTAL-ASSETS> 333,180
<DEPOSITS> 301,337
<SHORT-TERM> 0
<LIABILITIES-OTHER> 4,697
<LONG-TERM> 0
<COMMON> 1,245
0
0
<OTHER-SE> 25,901
<TOTAL-LIABILITIES-AND-EQUITY> 333,180
<INTEREST-LOAN> 16,498
<INTEREST-INVEST> 3,619
<INTEREST-OTHER> 261
<INTEREST-TOTAL> 20,378
<INTEREST-DEPOSIT> 5,077
<INTEREST-EXPENSE> 5,077
<INTEREST-INCOME-NET> 15,301
<LOAN-LOSSES> 500
<SECURITIES-GAINS> 2
<EXPENSE-OTHER> 17,535
<INCOME-PRETAX> 5,649
<INCOME-PRE-EXTRAORDINARY> 5,649
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,049
<EPS-PRIMARY> 3.71
<EPS-DILUTED> 3.71
<YIELD-ACTUAL> 5.4
<LOANS-NON> 776
<LOANS-PAST> 728
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,601
<CHARGE-OFFS> 663
<RECOVERIES> 180
<ALLOWANCE-CLOSE> 3,618
<ALLOWANCE-DOMESTIC> 2,574
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,044
</TABLE>
<PAGE>
OTHER MATTERS
The Corporation will bear the entire cost of soliciting proxies for the
Annual Meeting. In addition to the use of the mails, proxies may be solicited
by personal interview, telephone, telefax and telegram, by the directors,
officers and employees of the Corporation and by the Corporation's wholly-owned
subsidiary, The Bryn Mawr Trust Company (the "Bank"). Arrangements have been
made with brokerage houses and other custodians, nominees and fiduciaries for
forwarding proxy material to beneficial owners of the Corporation's Common
Stock held of record by such persons, and the Corporation will reimburse them
for their expenses in doing so.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information known to the Corporation,
as of January 30, 1995, with respect to the only persons to the Corporation's
knowledge, who may be beneficial owners of more than 5% of the Corporation's
Common Stock.
<TABLE>
<CAPTION>
PERCENTAGE OF
AMOUNT AND NATURE OF OUTSTANDING
BENEFICIAL OWNERSHIP CORPORATION
NAME AND ADDRESS OF CORPORATION COMMON STOCK
OF BENEFICIAL OWNER COMMON STOCK OWNED
------------------- -------------------- -------------
<S> <C> <C>
Thomas J. Carroll 107,100(1) 9.79%
Patrickswell
Post Office Box 488
Middleburg, VA 22117
</TABLE>
--------
(1) Seven Thousand (7,000) of the shares reported as beneficially owned by Mr.
Carroll are owned 1,000 shares each by his seven (7) children who do not
reside in his home. Mr. Carroll disclaims beneficial ownership of such
shares.
THE CORPORATION'S AND BANK'S
BOARDS OF DIRECTORS
The By-Laws of the Corporation provide that the Corporation's business shall
be managed by a Board of Directors of not less than eight and not more than
twelve directors. The Corporation's Board, as provided in the By-Laws, is
divided into four classes of directors, with each class being as nearly equal
in number as possible. The Board of Directors has fixed the number of directors
at twelve, with three members in Class I, three members in Class II, three
members in Class III, and three members in Class IV. Under the Corporation's
By-Laws, persons elected by the Board of Directors to fill a vacancy on the
Board serve as directors for a term expiring with the next annual meeting of
shareholders, unless the directors are appointed by the Board after the
shareholder record date for that meeting, in which case the person serves as a
director until the annual meeting of shareholders following that meeting. The
directors in each class serve terms of four years each, unless appointed or
elected to fill an unexpired term of office, and until their successors are
elected, qualified and take office.
GENERAL INFORMATION ABOUT THE CORPORATION'S AND BANK'S BOARDS OF DIRECTORS
The Corporation's Board of Directors meets at least quarterly and during 1994
the Corporation's Board of Directors held thirteen meetings. The Bank's Board
of Directors was scheduled to meet at least monthly and during 1994 held twelve
meetings.
2
<PAGE>
BIOGRAPHICAL INFORMATION ABOUT CORPORATION'S DIRECTORS--INFORMATION
ABOUT SECURITY HOLDINGS OF CORPORATION'S DIRECTORS AND OF THE
CORPORATION'S DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP
The following table sets forth certain biographical information and
information regarding beneficial ownership of shares of Corporation's Common
Stock as of March 3, 1995, for each of the Corporation's directors, for the
executive officers as a group and for all directors and executive officers as a
group. Other than as indicated below, each of the persons named below has been
employed in their present principal occupation for the past five years.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENTAGE
OWNERSHIP OF OUTSTAND-
AS OF ING CORPORATION
NAME, PRINCIPAL OCCUPATION AND AGE AS OF DIRECTOR MARCH 3, COMMON STOCK
BUSINESS EXPERIENCE FOR PAST FIVE YEARS MARCH 3, 1995 SINCE(1) 1995(2)(3) OWNED
---------------------------------------- ------------- -------- ---------- ---------------
<S> <C> <C> <C> <C>
NOMINEES FOR DIRECTORS
Class I
The terms of the following directors will
expire in 1995 and if elected to a new term
will expire in 1999:
1. Sherman R. Reed, 3rd 66 1973 13,562 1.24%
Builder and Developer,
President, Sher-Ree, Inc.
2. Phyllis M. Shea 62 1980 2,190 .20%
Attorney-at-Law, Shea
and Shea
3. Thomas A. Williams 59 1992+ 600 .05%
Vice President,
Secretary/Treasurer,
E.F. Houghton & Co., a
specialty chemical
company, since 1991;
previously Executive
Vice President, Cyprus
Mineral Company 1989-
1990 and President and
Chief Executive
Officer, Cyprus Foote
Mineral Company 1987 to
1989
CONTINUING DIRECTORS
Class II
The terms of the following directors expire
in 1996:
1. Peter H. Havens 40 1986 300 .03%
Manager, Kewanee
Enterprises,
investments(4)
2. Robert L. Stevens 57 1974 36,423* 3.33%
President and Chief
Executive Officer of
the Corporation since
its formation in 1986,
President and Chief
Executive Officer of
the Bank since January,
1980 and prior to that,
its Executive Vice
President since 1968
3. B. Loyall Taylor, Jr. 48 1986 200 .02%
President, Taylor Gifts,
Inc., mail order
catalog sales
</TABLE>
--------
+Mr. Williams, who previously served as a director of the Bank from 1984 to
1990 and as a director of the Corporation from 1986 to 1990, was appointed by
the Board of Directors in February 1992 to fill an unexpired term of a Class I
director. Mr. Williams was nominated and elected to serve a full term as a
Class I director of the Corporation at the 1992 annual meeting of the
Corporation's shareholders.
* Includes 23,760 shares which Mr. Stevens has the right to acquire and 7,240
shares which Mr. Wasson has the right to acquire through exercise of stock
options granted under the Corporation's Stock Option and Stock Appreciation
Rights Plan and 7,269 shares held by Mr. Stevens and 1,425 shares held by Mr.
Wasson based on their interests in the Corporation's Thrift and Savings Plan.
5
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENTAGE
OWNERSHIP OF OUTSTAND-
AS OF ING CORPORATION
NAME, PRINCIPAL OCCUPATION AND AGE AS OF DIRECTOR MARCH 3, COMMON STOCK
BUSINESS EXPERIENCE FOR PAST FIVE YEARS MARCH 3, 1995 SINCE(1) 1995(2)(3) OWNED
---------------------------------------- ------------- -------- ---------- ---------------
<S> <C> <C> <C> <C>
CONTINUING DIRECTORS
Class III
The terms of the following directors expire in 1997:
1. Warren W. Deakins 56 1990 1,000 .09%
Self-employed insurance
sales since January
1993, President and
Chief Executive
Officer, Fidelity
Mutual Group, a life
insurance company, from
September 1989 until
January 1993 and, prior
thereto, President and
Chief Operating Officer
from October, 1984
2. Eleanor Carson Donato 67 1986 300 .03%
President and Owner of
C.N. Agnew, Realtor,
Inc., real estate
brokerage, 1975 to
present
3. Samuel C. Wasson, Jr. 56 1982 9,565* .87%
Secretary of the Bank
and Corporation since
January of 1992; Vice
President of the
Corporation since its
formation in 1986 until
January 1992; Executive
Vice President of the
Bank since November
1993 and Treasurer from
1980 until November
1993; prior to that, a
Vice President of the
Bank since 1969
CONTINUING DIRECTORS
Class IV
The terms of the following directors expire
in 1998:
1. Darrell J. Bell 55 1990 600 .05%
Consultant to Main Line
Health, Inc. since
November 1994, Senior
Vice President Main
Line Health, Inc. from
October 1993 until
November 1994 President
and Chief Executive
Officer, from June,
1987 until October 1,
1993, The Bryn Mawr
Hospital, and prior
thereto, from April,
1977, Executive Vice
President and Chief
Operating Officer of
the Hospital
2. Richard B. Cuff 63 1983 4,088 .37%
President, Cuffco, Inc.,
Cobb & Lawless Service
Co., Inc. and Main Line
Appliances & Custom
Kitchens LTD.,
electrical contracting,
service and retail
sales
3. Thomas J. Farrell, Jr. 48 1990 300 .03%
Managing Partner, since
1984, of Renvyle Realty
Company, a real estate
investment company
Executive officers as a
group (10 persons) 59,454 5.44%
All directors and
executive officers as a
group (20 persons) 82,594 7.55%
</TABLE>
6
<PAGE>
Footnote Information Concerning Directors
(1) Reference to service on the Boards of Directors refers to the Bank only
prior to 1986 and to the Bank and Corporation since 1986.
(2) The number of shares "beneficially owned" in each case includes 100 shares
which each director must own to qualify as a director of the Corporation,
and also includes, when applicable, shares owned beneficially, directly or
indirectly, by the spouse or minor children of the director, and shares
owned by any other relatives of the director residing with the director.
None of the directors holds title to any shares of the Corporation of
record which such director does not own beneficially.
(3) The Corporation does not know of any person having or sharing voting power
and/or investment power with respect to more than 5% of the Corporation's
Common Stock other than Thomas J. Carroll. (See "Security Ownership of
Certain Beneficial Owners").
(4) Mr. Havens also serves as a director of Presidio Oil Company of Denver,
Colorado and Nobel Education Dynamics, Inc. formerly known as Rocking Horse
Child Care Centers of America, Inc. of Cherry Hill, New Jersey.
None of the directors is a party to any contract, arrangement or
understanding with respect to any of the Corporation's Common Stock, other than
in connection with (i) the Corporation's Stock Option and Stock Appreciation
Rights Plan, and (ii) the Corporation's Non-Employee Directors Stock Option
Plan, to be considered by the shareholders at this Annual Meeting.
CORPORATION'S AND BANK'S EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
current executive officers of the Corporation and Bank as of March 3, 1995:
<TABLE>
<CAPTION>
CORPORATION
STOCK
NAME, PRINCIPAL OCCUPATION AGE AS OF BENEFICIALLY
AND BUSINESS EXPERIENCE MARCH 3, 1995 OFFICE WITH THE CORPORATION AND/OR BANK OWNED
FOR PAST 5 YEARS ------------- --------------------------------------- ------------
<S> <C> <C> <C>
Robert L. Stevens....... 57 President and Chief Executive Officer 36,423*
and Director of Corporation and
Bank
Samuel C. Wasson, Jr.... 56 Secretary and Director of Corporation 9,565*
and Executive Vice President--
Loans, Secretary and Director of
Bank
Robert J. Ricciardi..... 46 Vice President of Corporation and 4,578*+
Executive Vice President of Bank--
Community Banking
Joseph W. Rebl.......... 50 Treasurer of Corporation and Treasurer 4,270*
and Senior Vice President of Bank--
Finance
Paul M. Kistler, Jr.(1). 58 Senior Vice President of Bank--Human 769*
Resources, Facilities and Marketing
Thomas M. Petro(2)...... 36 Senior Vice President of Bank-- 926*
Operations
Richard I. Sichel(3).... 49 Senior Vice President of Bank--Trust 278*
Joseph G. Keefer(4)..... 36 Senior Vice President of Bank-- 345*
Commercial and Real Estate Lending
Donald B. Krieble(5).... 51 Senior Vice President of Bank-- 2,300*
Consumer Credit Services
Leo M. Stenson.......... 44 Vice President and Auditor of Bank 0
</TABLE>
--------
Footnote Information Concerning Executive Officers
* Includes exercisable stock options and/or the interests of the executive
officers held in the Corporation's Thrift and Savings Plan stated in terms of
the Corporation's shares.
+ Includes interests of the executive officer held in the Corporation's
Executive Deferred Bonus Plan stated in terms of the Corporation's shares.
7
<PAGE>
--------
(1) Mr. Kistler was retained by the Bank as a human resources consultant in
November 1992 and was appointed Senior Vice President--Human Resources and
Facilities in January 1993 and in April of 1993 assumed responsibility for
the Bank's marketing function. Formerly Mr. Kistler was employed by
Philadelphia National Bank in various capacities including Secretary of the
Board of Directors; CoreStates Financial Corporation as Manager,
CoreSearch; and as a consultant.
(2) Mr. Petro was appointed a Vice President of the Bank in January 1992 and
Senior Vice President--Operations in November of 1993. Mr. Petro was the
President of Profit Research Consulting, Inc., a wholly owned subsidiary of
the Corporation, from its formation in June 1990 until it ceased operations
in December 1992. Formerly Mr. Petro was Assistant Vice President and
Manager of Management Science Associates, Inc. since September 1986.
(3) Mr. Sichel was employed by the Bank as a Group Vice President in the Trust
Department in September 1992 and in November 1993 was appointed Senior Vice
President in charge of the Trust Department. Prior to joining the Bank, Mr.
Sichel was a Financial Consultant with Merrill Lynch from 1991 and from
1984 until 1991 he was Director of Investment Research for Trust
Investments with First Pennsylvania Bank, N.A. (now merged into CoreStates
Bank, N.A.).
(4) Mr. Keefer was employed by the Bank as Vice President of Commercial Loans
in March 1991 and appointed Senior Vice President Commercial and Real
Estate Lending in June of 1994. Formerly, Mr. Keefer was employed by First
Pennsylvania Bank N.A. (now merged into CoreStates Bank, N.A.) since 1980
in various lending capacities including Divisional Vice President.
(5) Mr. Krieble was employed by the Bank as Vice President of Consumer Credit
Services in August 1992 and appointed Senior Vice President in June of
1994. Formerly Mr. Krieble was a Senior Vice President--consumer loan
administration with Meridian Bank since 1968.
EXECUTIVE COMPENSATION
GENERAL DISCLOSURE CONSIDERATIONS CONCERNING EXECUTIVE COMPENSATION
The Corporation believes that its shareholders should be provided clear and
concise information about the compensation of the Bank's executives and the
reasons the Bank's Board of Directors /(1)/ made decisions concerning executive
compensation, consistent with the Securities and Exchange Commission's (the
"Commission") proxy statement disclosure rules regarding disclosure of
executive compensation.
The format and content of the information set forth below is intended to
enable the Corporation's shareholders to understand the rationale and criteria
for the Corporation's and Bank's executive compensation program and the
compensation paid to the named executives and its other executives and key
employees.
The Corporation welcomes shareholder comment on whether the objective--to
provide information to the Corporation's shareholders that is useful and
clearly stated--has been met. Please send any comments or suggestions for
further improvements in disclosure to Samuel C. Wasson, Jr., Secretary at 801
Lancaster Avenue, Bryn Mawr, Pennsylvania 19010-3396.
EXECUTIVE COMPENSATION
The following information relates to all plan and non-plan compensation
awarded to, earned by, or paid to (i) Robert L. Stevens, the President and
Chief Executive Officer of the Bank, and (ii) the Bank's four (4) most highly
compensated executive officers, other than Mr. Stevens, who were serving as
executive officers of the Bank at December 31, 1994 (Mr. Stevens and such
officers, the "Named Executive Officers") as well as an executive officer whose
employment was terminated in December of 1994.
The following information reflects bonus compensation earned by the Named
Executive Officers during 1994 and paid to them in January 1995, except as may
otherwise be indicated. Any compensation awarded to, earned by, or paid to the
Named Executive Officers during 1995 will be reported in the proxy statement
for the Corporation's 1996 Annual Meeting of Shareholders, unless such
compensation has been previously reported.
--------
/(1)/The Corporation's executives are not compensated for their services to the
Corporation rather, because the Bank is the principal subsidiary of the
Corporation, they are compensated as officers of the Bank.
8
<PAGE>
SUMMARY COMPENSATION TABLE
The disclosure regarding the compensation of the Bank's executives includes
the following table that sets forth the compensation paid to the listed
Executive Officers during the last three fiscal years./(2)/
<TABLE>
<CAPTION>
ANNUAL COMPENSATION (1)
-----------------------
STOCK
NAME AND OPTIONS / ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS (2) SARS COMPENSATION (3)
------------------ ---- -------- --------- --------- ----------------
($) ($) (#) ($)
<S> <C> <C> <C> <C> <C>
Robert L. Stevens.......... 1994 $203,442 $30,000 20,000 $6,000
President and Chief Execu-
tive Officer 1993 188,229 37,000 7,300 5,550
1992 183,270 0 0 5,348
Robert T. Pollak (4)....... 1994 126,777 0 1,100 2,700
Senior Vice President-- 1993 92,750 12,000 0 2,700
Sales
1992 96,419 0 0 2,807
Samuel C. Wasson, Jr....... 1994 107,293 18,000 5,000 3,150
Executive Vice President--
Loans and Secretary 1993 102,551 20,000 2,100 3,007
1992 101,834 0 0 2,978
Richard I. Sichel.......... 1994 108,562 15,000 2,000 3,150
Senior Vice President-- 1993 102,636 6,630 0 0
Trust
1992 29,097 0 0 0
Robert J. Ricciardi........ 1994 98,048 18,000 4,000 2,850
Executive Vice President-- 1993 90,458 20,000 1,900 2,635
Community Banking
1992 83,335 0 0 2,512
Joseph W. Rebl............. 1994 96,212 14,000 2,500 2,820
Senior Vice President--Fi- 1993 96,150 18,000 1,900 2,820
nance and
Treasurer 1992 90,578 0 0 1,197
</TABLE>
--------
(1) A Table for Long-Term Compensation, including an Other Annual Compensation
column is not included because no compensation of this nature is paid by
the Corporation or the Bank and the restricted stock awards and long term
incentive payouts columns are not included in the Compensation Table since
these benefits are not made available by the Corporation or the Bank.
(2) During 1992, no bonuses were awarded to any Bank employees, including the
Named Executive Officers. Based on improved Bank earnings for 1993 and
1994, bonuses were awarded to the Named Executive Officers in January, 1994
and January, 1995.
(3) The Corporation maintains the Bryn Mawr Bank Corporation Thrift and Savings
Plan which was amended and restated to comply with Section 401(k) of the
U.S. Internal Revenue Code, effective January 1, 1985. The amended Thrift
Plan allows employees of each participating employer to contribute, on a
pre-tax basis, up to 16% of their annual compensation, as defined in the
Plan, but not to exceed $9,240 in 1995 and is included in All Other
Compensation. Quarterly, each participating employer matches the employees'
contribution dollar for dollar to a maximum of 3% of the employee's annual
compensation as defined in the Plan document.
(4) Included in Mr. Pollak's 1994 salary was an incentive payment, related to
growth in deposits, amounting to $33,674. As a part of the elimination of
the Bank's sales department, Mr. Pollak's employment was terminated in
December 1994.
--------
/(2)/The Commission's compensation disclosure rules require the use, where
applicable, of a series of tables to describe various types of compensation
paid to the specified executive officers. The use of a specific table or
column in a table is not required by the Commission's rules if no
compensation paid or awarded to the named executives requires the use of
the specific table or column. Only the tables or columns required to be
used by the Commission's rules, because of the compensation paid to the
specified executive officers, have been used in this Proxy Statement.
9
<PAGE>
CHANGE OF CONTROL AGREEMENTS
In 1991, at the recommendation of the Corporation's Compensation Committee,
the Corporation's Board of Directors approved Executive Severance Change-of-
Control Agreements (the "Agreements") with the following officers: Messrs.
Stevens, Wasson, Rebl, and Ricciardi. The Agreements were unanimously approved
by the outside members of the Board of Directors.
The Board of Directors believes that the Agreements assure fair treatment of
the covered officers since benefits provided are comparable to termination
benefits afforded by other companies to secure and retain key officers.
Furthermore, by assuring the officers some financial security, the Agreements
protect the shareholders by tending to neutralize any bias of these officers in
considering proposals to acquire the Corporation. The Board believes that these
advantages outweigh the disadvantage of the potential cost of the benefits.
The Agreements, which are between the Bank and each of the covered officers,
provide for a lump sum severance benefit if such officers' employment is
terminated under certain circumstances within two years following a "change of
control" (as defined in the Agreements) of the Corporation. Such circumstances
include termination of employment other than for "cause" (as defined in the
Agreements) or the resignation of such officer following a significant
reduction in the nature or scope of his/her authority, duties or
responsibilities, removal from their position as an officer of the Corporation
or Bank, reduction in base salary of the officer in effect immediately prior to
the change of control, revocation or reduction of benefits payable to the
officer under the Corporation's or Bank's benefit plans, without obtaining the
officer's written consent thereto, transfer of the officer to a location
outside the greater Philadelphia area or the general area of the officer's
principal residence, immediately prior to the change of control, or the officer
being required to undertake business travel substantially greater than his/her
business travel immediately prior to the change of control.
The amount of severance benefit to be paid would be an amount in cash equal
to (a) the greater of two weeks of the officer's base salary for each full or
partial year employed by the Bank, or (b) in the case of Mr. Stevens, two times
the sum and in the case of the other officers the sum of, (i) the officer's
salary in effect either immediately prior to the termination of employment or
immediately prior to the change of control, whichever is higher, and (ii) the
higher of (x) the bonus earned by the officer under the Bank's annual bonus
plan in respect of the fiscal year ended immediately prior to his/her
termination of employment, or (y) the average of the bonuses earned by the
officer under the Bank's annual bonus plan in the three fiscal years
immediately prior to such termination of employment, plus (c) an amount equal
to the excess, if any, of the aggregate fair market value of the Corporation's
Common Stock, that is, the closing price of the Corporation's Common Stock on
the last business day the Common Stock was traded immediately preceding the
termination date (the "Termination Date") of the officer's employment, subject
to outstanding and unexercised stock options, whether vested or unvested,
granted to the officer under the Corporation's Stock Option and Stock
Appreciation Rights Plan, over the aggregate exercise price of all such stock
options, (d) to the extent not heretofore paid, the officer's salary through
the date of termination and the officer's salary in lieu of any unused
vacation, (e) an amount equal to all awards earned by the officer in respect of
completed plan periods prior to the Termination Date for the Corporation's
Thrift and Savings Plan and the Bank's annual bonus plan, and payment in
respect of such plans for the uncompleted fiscal year during which termination
of employment occurs, (f) the cost to continue or cause to be continued until
24 whole months for Mr. Stevens and 12 whole months for the other officers
after the Termination Date, on the cost-sharing basis in effect immediately
prior to the change of control, the medical, dental, life and disability
insurance benefits substantially equivalent in all material respects to those
furnished by the Bank to the officers immediately prior to the change of
control, provided, however, that the obligation of the Bank to provide such
benefits shall cease at such time as the officer is employed on a full-time
basis by a party not owned or controlled by the officer, that provides the
officer, substantially the same benefits on substantially the same cost-sharing
basis as that between the Bank and the officer in effect immediately prior to
the change of control, (g) for both vesting and benefit calculation purposes,
credit with 2 additional, "years of credited service", (as
10
<PAGE>
defined in the Corporation's Pension Plan), for Mr. Stevens and 1 additional
year for the other officers under the Corporation's Pension Plan and
Supplemental Employee Retirement Plan, in addition to the years of credited
service that would have otherwise been calculated by reference solely to the
Termination Date, and (h) the cost of reasonable career counseling services
for the officer. To the extent necessary to provide the covered officers with
the additional years of credited service obtainable under the Agreements the
Corporation has agreed to amend its Supplemental Employee Retirement Plan or
create such supplemental retirement plans as are necessary.
The Agreements terminate in 1997 but are automatically extended for
additional one year periods unless the Bank provides written notice to cancel.
The terms of outstanding Agreements cannot end prior to the expiration of two
years after the occurrence of a Change of Control regardless of any notice by
the Bank to cancel.
In addition to the severance benefits outlined above, each covered officer
would be entitled to receive all other compensation and benefits payable
generally in the event of termination of employment. The aggregate amount of
all such compensation and benefits is subject to a limitation designed to
allow the Bank and Corporation to deduct, for federal income tax purposes, any
payments made pursuant to the Agreements.
The amount of severance salary benefits each of the officers would be
entitled to, pursuant to the Agreement if an event which triggered the payment
occurred on the date of the Proxy Statement, is as follows: Messers. Stevens
$480,000, Wasson $133,000, Rebl $108,000, and Ricciardi $113,000.
The Corporation may terminate each officer's employment, without liability,
under the respective Agreements for cause as defined therein.
STOCK OPTION TABLES
OPTION GRANTS TABLE
The following table sets forth, with respect to grants of stock options made
during 1994 to each of the Named Executive Officers: (i) the name of the
executive officer (column (a)); (ii) the number of options granted (column
(b)); (iii) the percent the grant represents of the total options granted to
all employees during 1994 (column (c)); (iv) the per share option price of the
options granted (column (d)); (v) the expiration date of the options (column
(e)); (vi) the value of the options at grant date (column (f)) and (vii) the
potential realizable value of each grant assuming the market price of the
Common Stock appreciates in value from the date of grant to the end of the
option term at a rate of (A) five percent (5%) per annum (column (g)) and (B)
ten percent (10%) per annum (column (h)).
OPTION GRANTS IN 1994
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(2)
----------------- ---------------------
(A) (B) (C) (D) (E) (F) (G) (H)
% OF TOTAL
OPTIONS OPTIONS GRANTED EXERCISE OR
GRANTED TO EMPLOYEES BASE PRICE EXPIRATION
NAME (#)(1) IN 1994 (1) ($/SH) DATE ($) 5% ($) 10% ($)
---- ------- --------------- ----------- ---------- --- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert L. Stevens....... 20,000 37% $31.75 7/14/2004 0.0 399,400 1,012,000
Samuel C. Wasson, Jr. .. 5,000 9% $32.00 8/18/2004 0.0 100,600 255,000
Richard I. Sichel....... 2,000 4% $32.00 8/18/2004 0.0 40,240 102,000
Robert J. Ricciardi..... 4,000 7% $32.00 8/18/2004 0.0 80,480 204,000
Joseph W. Rebl.......... 2,500 5% $32.00 8/18/2004 0.0 50,300 127,500
</TABLE>
--------
(1) The options reported above were granted to Mr. Stevens on July 14, 1994
and to all the other Named Executive Offices on August 18, 1994 and are
exercisable 20% each year commencing one year from the date of grant and
until expiration.
(2) The dollar amounts in this table are the result of calculations at stock
price appreciation rates specified by the Commission and are not intended
to forecast actual future appreciation rates of the Corporation's stock
price.
11
<PAGE>
AGGREGATED OPTION EXERCISES AND YEAR-END OPTION VALUE TABLE
The following table sets forth, with respect to each exercise of stock
options during 1994 by each of the Named Executive Officers and the year-end
value of unexercised options on an aggregated basis: (i) the name of the
executive officer (column (a)); (ii) the number of shares received upon
exercise, or, if no shares were received, the number of securities with respect
to which the options were exercised (column (b)); (iii) the aggregate dollar
value realized upon exercise (column (c)); (iv) the total number of unexercised
options held at December 31, 1994, separately identifying the exercisable and
unexercisable options (column (d)); and (v) the aggregate dollar value of in-
the-money, unexercised options held at December 31, 1994, separately
identifying the exercisable and unexercisable options (column (e)). As of
December 31, 1994, there were no stock appreciation rights outstanding.
AGGREGATED OPTION EXERCISES IN 1994 AND DECEMBER 31, 1994 OPTION VALUES
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
12/31/94 (#) 12/31/94 ($)/(1)/
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
---- --------------- ------------ ------------- -----------------
<S> <C> <C> <C> <C>
Robert L. Stevens....... -- -- 23,760/24,240 130,223/1,590
Robert T. Pollak........ -- -- 220/880 83/330
Samuel C. Wasson, Jr.... -- -- 7,240/6,040 38,428/390
Richard I. Sichel....... -- -- --/2,000 --/--
Robert J. Ricciardi..... -- -- 1,820/4,880 4,883/330
Joseph W. Rebl.......... -- -- 4,170/3,380 10,545/330
</TABLE>
--------
/(1)/Based upon $31.75 per share market value at December 31, 1994.
STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN
In 1993 the Corporation's Board of Directors adopted and in 1994 the
Corporation's shareholders approved a restated Bryn Mawr Bank Corporation 1986
Stock Option and Stock Appreciation Rights Plan (the "Plan"). The Corporation's
Board of Director's Compensation Committee (the "Committee"), composed of four
non-management directors, who are ineligible to receive grants under the Plan,
is authorized to grant stock options ("Option(s)") and stock appreciation
rights ("SAR(s)") to key officers (hereinafter called "officer(s)") of the Bank
selected by the Committee. Up to 98,440 shares of the Corporation's Common
Stock may be issued under the Plan, subject to adjustment for stock dividends,
stock splits and other similar corporate transactions.
An Option gives the officer the right to purchase a certain number of shares
of the Corporation's Common Stock for a specified price during a specified
period. Options may be either incentive stock options ("ISOs") or nonqualified
stock options, each of which, as described below, results in different federal
income tax consequences to the officer and the Corporation. An officer may
receive the value of an SAR in cash, shares of the Corporation's Common Stock,
or a combination of both, as determined by the Committee. The "value" of an SAR
is equal to the excess of the market price of each share of the Corporation's
Common Stock on the date of exercise over the market price on the date of grant
subject to the limitation that the value of the SAR may not exceed 200% of the
market price on the date of grant. SARs may be granted only in conjunction with
a nonqualified stock option as determined by the Committee.
Options and SARs may not be exercised before one year from the date of grant
and may not be exercised more than three months after employment terminates for
any reason other than death, disability or retirement of the officer in which
case the officer or the officer's successor in interest, as provided in the
relevant option agreement, shall have the right to exercise the Option within
twelve months of the date of termination of the employment with respect to any
nonqualified stock option or SAR and within twelve months of the date of death
or disability with respect to an ISO, unless the Committee provides otherwise
at the time of grant. Options and SARs may not have a term of more than ten
years, and may not have an exercise price less than the fair market value of
the Corporation's Common Stock on the date of grant.
12
<PAGE>
If the Committee approves, an officer may pay the exercise price of an Option
in shares of the Corporation's Common Stock, which have been held by the
officer for at least one year, having an aggregate fair market value (at the
date of exercise) equal to the exercise price, or in any combination of cash
and Corporation's Common Stock. Officers, who have Options should consult their
tax advisers for the federal, state and local tax consequences in their
specific circumstances.
During 1994, of the 42,000 nonqualified stock options granted to the Bank's
officers, Messrs. Stevens, Wasson, Rebl, Ricciardi, and Sichel were granted
options to purchase 20,000, 5,000, 2,500, 4,000 and 2,000 shares of the
Corporation's Common Stock, respectively. The option price for all of the
nonqualified stock options granted during 1994 was $31.75 per share for Mr.
Stevens and $32.00 per share for the Other Named Executive Officers and as of
March 3, 1995, these nonqualified stock options had not become exercisable
under the terms of the Plan. No ISO's or SAR's have been granted under the
Stock Option Plan.
EXECUTIVE DEFERRED BONUS PLAN
In 1989, the Corporation established the Deferred Bonus Plan (the "Plan"),
which permits executives of the Bank annually to defer all or a portion of any
bonus (the "Deferred Compensation") which the executives may be awarded. The
executives who are eligible to participate in the Plan are selected annually by
the Board of Directors of the Bank. The Plan is an unfunded non-qualified plan
and the Plan funds are held in a trust administered by the Bank's Trust
Department. Under the Plan the participating executives may elect to invest the
Deferred Compensation in a collective investment money market fund, income
common trust fund or diversified common trust fund, an international equity
fund or in the Corporation's common stock. Participants may elect to defer the
receipt of the Deferred Compensation until (i) January of the following year or
(ii) retirement or separation from employment. In certain very limited
circumstances involving a hardship, as defined in the Plan, participants may
request withdrawal of his/her Deferred Compensation. The right to receive
future payments under the Plan is an unsecured claim against the general assets
of the Corporation. Payments of Deferred Compensation may be made only in cash
or Corporation stock as provided in the Plan.
PENSION PLAN
In December 1989, the Corporation assumed sponsorship of the Bank's non-
contributory pension plan (the "Pension Plan") and amended the Pension Plan to
cover the eligible employees of the Corporation and the Bank, (the "Employer").
Currently only Bank employees are eligible for benefits under the Plan.
Employees of the Bank (collectively called the "participants") become eligible
to participate in the Pension Plan on January 1st following their attainment of
20 1/2 years of age and performance of six (6) months of service during which
500 hours of service are credited, as those terms are defined in the Pension
Plan. Benefits under the Pension Plan are paid from a trust for which the Bank
is Trustee. The payments are made monthly under various options provided for in
the Pension Plan, selected by the participants. For funding purposes it is the
Corporation's policy to fund amounts necessary to maintain the actuarial
soundness of the Pension Plan. The Pension Plan is fully funded and therefore,
based on ERISA funding requirements, no contribution was needed or allowed in
1994. The net periodic pension cost is computed on the basis of accepted
actuarial methods which include the current year service cost and prior years
costs, which are amortized over a 4 year period. The Bank's net periodic
pension cost for 1992, 1993 and 1994 was $18,146, ($106,048) and ($45,080),
respectively, decreasing the unfunded accrued pension expense for accounting
purposes to $76,424 as of December 31, 1994.
The Corporation's actuaries indicate that the amount of the contribution,
payment or accrual with respect to a participant is not and cannot readily be
separately or individually calculated under the actuarial cost method used in
determining aggregate contribution requirements for the Corporation's Pension
Plan. Covered compensation is the basic rate of salary paid to a participant
including bonus and overtime.
13
<PAGE>
Set forth below is a table of annual pension benefits based on the rates of
salary in various years of service categories for participants retiring at age
65 in 1994.
PENSION BENEFIT TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
------------------------------------------------------------
FINAL AVERAGE
SALARY 15 20 25 30 35 40
------------- -- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C>
$ 20,000 $ 3,900 $ 5,200 $ 6,500 $ 7,800 $ 9,100 $ 10,400
40,000 9,000 12,000 15,000 18,000 21,000 23,600
60,000 14,400 19,200 24,000 28,800 33,600 37,500
80,000 19,800 26,400 33,000 39,600 46,200 51,400
100,000 25,200 33,600 42,000 50,400 58,800 65,300
120,000 30,600 40,800 51,000 61,200 71,400 79,200
140,000 36,000 48,000 60,000 72,000 84,000 93,100
160,000 39,669 52,915 66,162 79,408 92,654 102,673
180,000 44,515 59,492 74,469 89,446 104,423 115,788
200,000 49,362 66,069 82,777 99,485 116,192 118,800*
</TABLE>
--------
* Maximum benefit permitted by Internal Revenue Code, as amended.
Differences in the pension benefit table exist because the Pension Plan is
integrated with Social Security benefits, and participants with less income
receive a greater portion of their retirement benefits from Social Security.
The goal of the Pension Plan is to provide long-term participants with annual
benefits from both the Pension Plan and Social Security approximating 60% of
their highest average five year annual compensation.
Benefits paid by the Plan are based on the participants highest average
consecutive five year annual compensation in the ten years prior to
participant's retirement. The estimated benefits for the executive officers
named in the Summary Compensation Table were based on each officer's 1994
compensation and do not take into consideration any future increases in
compensation and are straight life annuity amounts which would be actuarially
reduced for a 100% joint and survivor annuity to the officer and the officer's
spouse.
For the Named Executive Officers in the Summary Compensation Table, the
estimated annual benefits upon normal retirement at age 65 under the Pension
Plan are as follows: Robert L. Stevens, $118,800, Samuel C. Wasson, Jr.,
$75,733, Robert J. Ricciardi, $67,734, Joseph W. Rebl, $48,396 and Richard I.
Sichel, $29,824. Messrs. Stevens, Wasson, Ricciardi, Rebl and Sichel, have 35,
29, 19, 13 and 1, credited years of service, respectively, under the Pension
Plan.
SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN
Current Federal law places certain limitations on the amount of retirement
income that can be paid pursuant to a pension plan qualified under the Internal
Revenue Code, such as the Corporation's Pension Plan. As of December 31, 1994,
Mr. Stevens is the only executive officer participating in the Pension Plan
who, based on service to date, would be affected by such limitations. The
Corporation has adopted the Bryn Mawr Bank Corporation Supplemental Employee
Retirement Plan, an unfunded supplemental plan which is designed to provide
those amounts which would be payable as pension benefits, except for such
limitations under the Internal Revenue Code, which will be paid by the
Corporation out of operating funds.
BRYN MAWR BANK CORPORATION THRIFT AND SAVINGS PLAN
In December of 1989, the Corporation assumed sponsorship of the Bank's Thrift
and Savings Plan and amended the plan to cover eligible employees of the
Corporation and the Bank, (the "Employer"). An employee of the Corporation or
the Bank, (collectively called the "participants") becomes eligible to
participate in the Bryn Mawr Bank Corporation Thrift and Savings Plan (the
"Thrift Plan") on January 1st following his/her attainment of 20 1/2 years of
age and performance of six (6) months of service during which
14
<PAGE>
500 hours of service are credited as those terms are defined in the Thrift
Plan. Participants may elect to have what would otherwise be his/her
compensation reduced and cause the amount of such reduction to be contributed,
on his/her behalf, to the Thrift Plan's related trust in an amount from 1% to
16% of his/her compensation. The Employer makes a dollar for dollar matching
contribution, up to 3% of each participant's compensation. All participants may
elect to contribute after-tax dollars to the Thrift Plan's related trust in an
amount from 1% to 10% of his/her compensation but the Employer will not match
such contributions. In any Thrift Plan year the Employer may make contributions
to the participants' discretionary accounts in the Thrift Plan of such portions
of its net profits as the Employer's Board of Directors may determine, subject
to certain limitations in the Thrift Plan.
The Thrift Plan permits a participant to cause the participant's account
balance to be invested in one or more of five different investment funds,
including an investment in the Corporation's Common Stock. As of December 31,
1994, the Thrift Plan's related trust held 22,073 shares of Corporation's
Common Stock for the benefit of 59 participants. Each such participant or
beneficiary owns an undivided interest in the whole of the Corporation's Common
Stock Fund of the Thrift Plan. Under the terms of the Thrift Plan and its
related trust agreement, the trustee possesses the power and authority to vote
the Corporation's Common Stock.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Some of the directors and executive officers of the Bank and the companies
with which they are associated were customers of, and had banking transactions
with, the Bank in the ordinary course of its business during 1994. All loans
and commitments to lend were made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with other persons. In the opinion of Bank management, the loans
and commitments did not involve more than a normal risk of collectability or
present other unfavorable features.
(ART)
15
<PAGE>
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Bank's Board of Directors (the "Bank
Compensation Committee") is composed entirely of independent outside directors
(see Information About Committees of the Bank's Board of Directors). The Bank
Compensation Committee is responsible for setting and administering the Bank's
compensation policies, including those which govern salary and the bonus
program applicable to the Bank's executive officers including the Named
Executive Officers.
The Compensation Committee of the Corporation's Board of Directors (the
"Corporation Compensation Committee") is composed entirely of independent
outside directors (see Information About Committees of the Corporation's Board
of Directors). The Corporation's Compensation Committee is responsible for
setting and administering the policies which govern the grant to key Bank
personnel of options to purchase the Corporation's stock including the Named
Executive Officers.
EXECUTIVE COMPENSATION POLICY PRINCIPLES
The Bank's compensation policy is designed to (i) retain and attract highly
qualified key executives essential to the long-term success of the Bank and
Corporation; (ii) reward such executives for consistent successful management
of the Bank and enhancement of shareholder value; and (iii) create a
performance-oriented environment that rewards performance not only with respect
to the Bank's goals but also the Bank's performance in relation to comparable
industry performance levels.
The Bank's Compensation Committee annually considers the Bank's economic
performance in terms of its asset diversification and quality, expense levels,
net income, capital accumulation and retention, return on equity and other
relevant criteria used in the financial services industry and seeks to relate
those considerations to the Bank's performance and each executive's performance
of his duties.
The Bank's executive compensation program, established by the Bank
Compensation Committee, is based on the belief that each executive officer's
compensation should bear a relationship to the business success of the Bank and
Corporation, the value of the Corporation's stock and any significant
accomplishments by that executive officer.
ELEMENTS OF EXECUTIVE COMPENSATION PROGRAM
The Bank's total compensation program for its executive officers currently
consists of base salary, a fringe benefit package, and an opportunity,
depending on the Bank's annual earnings and other economic criteria, to obtain
a cash bonus and options to purchase Corporation stock at the market price or a
premium above the market price determined by the Corporation's Compensation
Committee when such options are awarded.
SALARY COMPENSATION AND FRINGE BENEFITS
The salary compensation is highly competitive with other community banks in
the Delaware Valley and is combined with a fringe benefit package available to
the executive officers and other employees designed to retain and attract
experienced and highly professional banking personnel. Each officer's salary is
reviewed annually based on that person's level of management responsibility at
the Bank and performance of duties.
BONUS AWARDS
The Bank's officers, including the named Executive Officers, have an
opportunity to be awarded a cash bonus based in large measure on the economic
performance of the Bank on an annual basis and each individual officers
accomplishment of his designated responsibilities and goals. Bonuses paid to
the Named Executive Officers, which were determined on the basis of the Bank's
earnings performance in 1994 and paid in January of 1995, reflected the Bank's
continued earnings improvement. The Bank Compensation
16
<PAGE>
Committee particularly noted that such earnings improvement was accomplished in
a rising interest rate environment which caused a significant decrease in
income generated by the mortgage origination and sales activity which was more
than replaced by increased earnings from the banking and trust activities.
STOCK OPTIONS
On the basis of the Bank's economic performance, the Named Executive Officers
and other key officers have historically been awarded options to purchase
Corporation stock. From time to time, the Corporation Compensation Committee
consults with an independent professional compensation consultant to help
determine appropriate stock option awards to its key officers. Stock option
awards also reflect the Corporation Compensation Committee's evaluation of each
individual's attainment of operational and strategic goals and contributions to
a sustained increase in the Corporation's value.
In 1994, the Corporation's shareholders approved an amendment to the
Corporation's Stock Option and Stock Appreciation Rights Plan (the "Plan") to
authorize the issuance of an additional 54,430 options to purchase the
Corporation's Common Stock. The Plan is an integral part of the executive
compensation program. The Plan is designed to encourage and create ownership
and retention of the Corporation's stock by the key officers but not result in
significant dilution. To facilitate this objective, pursuant to the Plan, when
the Bank's income and other economic criteria merit, stock options are awarded
by the Corporation's Compensation Committee to the Named Executive Officers and
other key officers to reward them for their achievements on behalf of the Bank
and encourage them to increase their ownership of Corporation stock. Such stock
options have a ten (10) year term, are exercisable at the market price of the
Corporation's stock, and in certain instances a premium above that price, when
they are issued and vest commencing one year or more after the date the options
are issued.
EXECUTIVE COMPENSATION DECISIONS FOR 1994
The Bank Compensation Committee evaluated the Bank's business performance for
1994 and determined, based on such performance and the criteria outlined above,
that salary increases and bonuses were merited by the Named Executive Officers.
Based on the Corporation's 1994 business performance, the Corporation
Compensation Committee determined that stock options should be granted to the
Named Executive Officers and other key officers. The option awards made by the
Corporation Compensation Committee were consistent with the compensation
strategy and policy referred to in this report.
FACTORS AND CRITERIA ON WHICH PRESIDENT'S COMPENSATION WAS BASED IN 1994
The Bank Compensation Committee meets annually, without the President, Mr.
Stevens, being present, to evaluate his performance and review his compensation
package. The Bank Compensation Committee reports on that evaluation to the
independent directors of the Board.
Mr. Stevens is eligible to participate in all executive compensation programs
available to all other executives.
As indicated in the foregoing discussion concerning the principles upon which
the Bank's compensation policy is based, the Bank's economic performance and
the performance by Mr. Stevens of his duties as President are the essential
elements upon which 1994 compensation was based. Also considered by the Bank
Compensation Committee was the continuing improvement over the last three (3)
years in the Bank's fundamental economic strength.
In establishing Mr. Stevens' 1994 annual compensation, including any stock
options awarded to him, the primary economic performance criteria which the
Bank Compensation Committee considered are the Bank's annual earnings, the
additional capital accumulated by the Bank and the adequacy of the Bank's
regulatory capital ratios, as well as any increase in value of the
Corporation's stock and the dividends paid on the Corporation's stock. The
Committee also considered that the Bank (i) was successfully managed and
operated in a rising interest rate environment which resulted in a significant
reduction in the Bank's mortgage
17
<PAGE>
loan origination and sales income; (ii) further reduced its problem real
estate loans and non-performing assets while continuing to retain a large loan
loss reserve in relationship to its problem loans; and (iii) continued
successful management of the Bank's overhead expense and staff.
In summary, the Bank has significantly improved its economic performance
during 1994 and the two (2) prior years. In addition, in 1993, the Corporation
commenced dividend payments on its stock which have been increased in 1994 and
again in 1995.
In accordance with the criteria described above, the Bank Compensation
Committee determined that, based on the Bank's earnings performance and its
other accomplishments in 1994, Mr. Stevens earned an increase in salary and a
bonus.
In July of 1994, Mr. Stevens was awarded stock options to purchase 20,000
shares by the Corporation Compensation Committee. The options granted were
based on, among other things, the Committee's evaluation of the Corporation's
performance during 1993 and part of 1994, historical information regarding
previous option grants/1/, the Committee's perception of Mr. Stevens' expected
future contributions to the Corporation's achievement of its long-term
performance goals and the Committee's ongoing goal to reward demonstrated
leadership qualities.
THE COMPENSATION COMMITTEES
The Bank's and Corporation's Compensation Committees are composed of the
same members consisting of Richard B. Cuff, Thomas J. Farrell, Jr., Phyllis M.
Shea and B. Loyall Taylor, Jr. who each endorsed this report.
Respectfully submitted:
Richard B. Cuff, Chairman
Thomas J. Farrell, Jr.
Phyllis M. Shea
B. Loyall Taylor, Jr.
--------
/1/In 1993, the Committee also awarded Mr. Stevens 7,300 options to purchase
Corporation stock.
18
<PAGE>
Graphics Appendix List - Bryn Mawr Bank Corp
Photos - Pat Carson of Member Banking on Page 2
- Bob Stevens and Peter Havens, who will join the Bank in May to head the
Trust Division, on Page 3
- Harold Thompson manages the Bryn Mawr branch, with Cathy Putnam on
Page 4
- Steve Collar of Consumer Credit Services visits Kevin MacCausland at
MacCausland Jeep-Eagle on Page 5
- Jim Egan, commercial loan officer, with Archie Allen associates, inc.
on Page 6
- Carol Colden, mortgage originator, meets with Craig Whitney, realtor on
Page 7
Graphs
- Net income (loss) is graphed for the five year period ended in 1994 on page
10. The net income (loss) information is included in the Selected Financial
Data section of the annual report, page 9.
- Trust assets are graphed for the last five year period ended in 1994 on page
11. The assets were as follows (in millions):
<TABLE>
<CAPTION>
Discretionary Non-discretionary Total
<S> <C> <C> <C>
1990 $340,115 $194,821 $534,936
1991 407,562 233,059 640,621
1992 417,946 267,959 685,905
1993 448,328 316,243 764,571
1994 456,302 343,544 799,846
</TABLE>
- Trust fees are graphed for the five year period ended in 1994 on page 11.
The trust fees were as follows (in millions):
<TABLE>
<S> <C>
1990 $3,248
1991 3,610
1992 4,016
1993 4,419
1994 4,719
</TABLE>
- Deliquencies as a Percentage of Loans are graphed for the five year period
ended in 1994 on page 16. The deliquencies as a percentage of loans were as
follows:
<TABLE>
<S> <C>
1990 10.00%
1991 3.96
1992 3.30
1993 1.81
1994 0.69
</TABLE>
- Deposits are graphed for the five year period ended in 1994 on page 17. The
deposits were as follows (in millions):
<TABLE>
<CAPTION>
Demand Savings Time Total
<S> <C> <C> <C> <C>
1990 $67,594 $124,874 $81,168 $273,636
1991 62,534 137,957 69,337 269,828
1992 68,551 160,030 47,604 276,185
1993 68,959 178,279 43,836 291,074
1994 83,142 176,375 41,820 301,337
</TABLE>
- Book value and market value per share are graphed for the five year period
ended in 1994 on page 18 Book value and market value per share were as
follows:
<TABLE>
<CAPTION>
Book Value Market Value
<S> <C> <C>
1990 $21.96 $14.75
1991 16.65 8.50
1992 19.62 22.75
1993 22.62 32.63
1994 24.82 31.75
</TABLE>
- Nonperforming assets are graphed for the five year period ended in 1994 on
page 19. Nonperforming asset information is included in Table 15 on page 19.
