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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, 1999 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.
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BRYN MAWR BANK CORPORATION
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(Exact name of registrant as specified in its charter)
Pennsylvania 23-2434506
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(State of other jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
801 Lancaster Avenue, Bryn Mawr, Pennsylvania 19010
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(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (610) 525-1700
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Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
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NONE NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock ($1 par value)
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(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 __________
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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. [ ]
The aggregate market value of shares of common stock held by non-affiliates of
Registrant (including fiduciary accounts administered by affiliates*) was
$94,352,343 on February 29, 2000.
As of February 29, 2000, 4,313,250 shares of common stock were outstanding.
Documents Incorporated by Reference: Parts I, II and IV - Portions of
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Registrant's Annual Report to Shareholders for the year ended December 31, 1999,
as indicated, Parts I and 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 of Registrant's voting stock held by the Trust Department of
its bank subsidiary.
The exhibit index is on pages 46 through 50. There are 144 pages in this
report.
Form 10-K
Bryn Mawr Bank Corporation
Index
Item No. Page
--------
Part I
1. Business............................................... 1
2. Properties............................................. 32
3. Legal Proceedings...................................... 36
4. Submission of Matters to a Vote of Security Holders.... 36
Part II
5. Market for Registrant's Common Equity and Related
Stockholder Matters.................................... 37
6. Selected Financial Data................................ 37
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................... 37
8. Financial Statements and Supplementary Data............ 38
9. Change in and Disagreements with Accountants on
Accounting and Financial Disclosure.................... 38
Part III
10. Directors and Executive Officers of Registrant......... 39
11. Executive Compensation................................. 45
12. Security Ownership of Certain Beneficial Owners and
Management............................................. 45
13. Certain Relationships and Related Transactions......... 45
Part IV
14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K............................................ 46
UNLESS OTHERWISE INDICATED, ALL INFORMATION IS AS OF MARCH 1, 2000.
PART I
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ITEM 1. BUSINESS
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GENERAL
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BRYN MAWR BANK CORPORATION
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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
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The Bank, the principal subsidiary of the Corporation, is a state chartered
bank subject to the Pennsylvania Banking Code of 1965, as amended, which was
incorporated under the laws of the Commonwealth of Pennsylvania on March 25,
1889. In addition, the Bank is a member of the Federal Reserve System and,
therefore, is subject to the laws and regulations, which govern a Federal
Reserve member bank. The Bank is engaged in a general commercial and retail
banking business, providing basic banking services as well as a full range of
trust services.
TAX COUNSELLORS OF BRYN MAWR, INC.
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Tax Counsellors of Bryn Mawr, Inc. ("TCBM") was incorporated under the laws
of Pennsylvania on July 1, 1997. TCBM is a wholly owned subsidiary of
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the Corporation. TCBM offers tax-planning services to clients in the general
market area of the Corporation.
INSURANCE COUNSELLORS OF BRYN MAWR, INC.
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Insurance Counsellors of Bryn Mawr, Inc. ("Insurance Counsellors") was
incorporated on December 30, 1997 as a wholly owned subsidiary of the Bank.
Insurance Counsellors began operations on February 1, 1998. The staff of
Insurance Counsellors sells insurance products, including all facets of
casualty, property and allied insurance lines, as well as life insurance,
annuities, medical insurance and accident and health insurance for groups and
individuals.
THE BRYN MAWR TRUST COMPANY (JERSEY), LTD.
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The Bryn Mawr Trust Company (Jersey), Ltd. ("BMTC (Jersey)") was incorporated
on September 3, 1998 as a wholly owned subsidiary of the Corporation. BMTC
(Jersey) is incorporated under the laws of the Island of Jersey, Channel Islands
and maintained an office on the Island of Jersey. BMTC (Jersey) afforded the
Bank's clients the opportunity to make offshore investments, but due to a lack
of business activity, BMTC (Jersey) has ceased operation and its charter will be
cancelled.
BRYN MAWR BROKERAGE CO., INC.
- -----------------------------
Bryn Mawr Brokerage Co., Inc. ("BM Brokerage") was incorporated on October
26, 1998 as a wholly owned subsidiary of the Corporation. BM Brokerage began
operating in January 1999. BM Brokerage offers an array of brokerage related
services to the Corporation's customers, including trading of shares, annuities
and mutual funds.
2
JOSEPH W. ROSKOS & CO., INC.
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Joseph W. Roskos & Co., Inc. ("JWR&Co") was acquired as of January 1, 1999 as
a wholly owned subsidiary of the Corporation. JWR&Co offers high quality
personalized family business office services to high net worth individuals,
including accounting, tax preparation services, consulting and fiduciary support
services.
CDC CAPITAL MANAGEMENT INC.
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CDC Capital Management Inc. ("CDC") was acquired in January 1999 as a wholly
owned subsidiary of the Corporation. CDC began operating in January 1999. CDC
provides investment consulting services to retirement plans, foundations, and
high net worth individuals.
SUMMARY
- -------
The Corporation will, through its subsidiaries, especially the Bank, seek to
market its services by providing superior banking services, including deposit,
lending and trust services, as well as other financial services, including tax
planning services through TCBM, insurance sales and services through Insurance
Counsellors, brokerage related services through BM Brokerage, family business
office services through JWR&Co and investment advisory services through CDC to
its customers, primarily in its market in Montgomery, Delaware and Chester
counties of Pennsylvania and to successfully address the other challenges in the
ever changing competitive financial services market.
3
OPERATIONS
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BRYN MAWR BANK CORPORATION
- --------------------------
The Corporation had no active staff as of December 31, 1999 and conducted no
activities other than those activities through its subsidiaries, the Bank,
Insurance Counsellors, BM Brokerage, TCBM, Joseph W. Roskos & Co. and CDC.
A complete list of directors and officers of the Corporation, as of March 1,
2000 is incorporated by reference to page 11 and 12 of the Corporation's Annual
Report to Shareholders for the year ended December 31, 1999.
THE BRYN MAWR TRUST COMPANY
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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
investment management and trust services including estate administration,
investment advisory services, pension and profit sharing administration and
personal financial planning, including tax preparation. As of December 31, 1999,
the market value of assets administered by the Bank's Investment Management and
Trust Division was $1,887,000,000. In January 1996, the Bank formed Investment
Counsellors of Bryn Mawr ("ICBM"), as a division of the Bank's Investment
Management and Trust Division. ICBM is dedicated to managing investment
portfolios for high net worth individuals and employee benefit plans.
During 1999 residential mortgage interest rates increased, making residential
mortgage refinancing less attractive to borrowers, compared to
4
similar activity in 1997 and 1998. As of March 1, 2000, the Bank had no
commissioned mortgage originators.
The Bank originated and sold $73,921,000 in residential mortgages to the
secondary market in 1999 compared to $134,676,000 originated and sold in 1998.
Net gains and loan fee income on such transactions amounted to $984,000 in 1999
compared to $1,647,000 in 1998. During 1997 the Bank originated and sold
$75,874,000 in residential mortgage loans, generating $1,091,000 in related net
gains and loan fee income.
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, which expired on
December 31, 1995 and 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, which commenced operation during
February 1996. That agreement is incorporated by reference into the
Corporation's 10-K, filed with the Commission on March 31, 1995.
At December 31, 1999, the Bank had 218 full time and 33 part time employees,
including 106 officers, equaling 234.5 full time equivalent staff.
TAX COUNSELLORS OF BRYN MAWR, INC.
- ----------------------------------
TCBM's operation employs three CPAs (the "Tax Professionals"), having
significant tax planning and preparation background and some formerly employed
by a "Big Five" accounting firm. As of March 1, 2000, there are a
5
total of 6 employees. This includes 4 accountants and 1 attorney specializing in
estate planning. The staff of TCBM, provides tax planning and consulting
services to both TCBM's and the Bank's customer base. As a part of the formation
of TCBM, a profit sharing agreement was developed that allows the Tax
Professionals to retain the net revenues generated by existing clients brought
to TCBM.
INSURANCE COUNSELLORS OF BRYN MAWR, INC.
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Insurance Counsellors is a full-service insurance agency, which enables the
Bank to offer insurance related products and services to its customer base. This
includes casualty, property and allied insurance lines, as well as life
insurance, annuities, medical insurance and accident and health insurance for
groups and individuals.
Insurance Counsellors employs 4 licensed insurance agents and a supporting
staff, who have significant expertise in the design, sale and service of
insurance products. Insurance Counsellors has six major insurance companies for
property and casualty, in excess of twenty life and health companies and
agreements with life agents and employee benefit companies for specialized
insurance needs.
BRYN MAWR BROKERAGE CO., INC.
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BM Brokerage offers securities products, including mutual funds, annuities,
individual stocks and bonds and retirement plans through the Bank's branch
system. BM Brokerage has affiliated with UVEST Financial Services, Inc., a
broker-dealer headquartered in Charlotte, North Carolina to provide the
necessary back office support. As of December 31, 1999, BM Brokerage had 1
employee. BM Brokerage generated $194,000 of revenue during 1999.
6
CDC CAPITAL MANAGEMENT INC.
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CDC is an investment advisor registered with the United States Securities and
Exchange Commission. CDC provides investment consulting services to retirement
plans, foundations, and high net worth individuals. As of December 31, 1999, CDC
had 4 employees. During 1999 CDC generated $1,024,215 of revenues.
JOSEPH W. ROSKOS & CO. INC.
- ---------------------------
JWR&Co provides family business office services to high net worth
individuals. Thus, JWR&Co offers to the clients of all the Bryn Mawr companies
access to high quality personalized financial services such as accounting, tax
preparation services, consulting and fiduciary support services to our
customers. As of December 31, 1999 JWR&Co had 21 employees and generated
$1,947,000 of revenue during 1999.
7
SOURCES OF THE CORPORATION'S REVENUE
------------------------------------
The following table shows the percentage of consolidated revenues by major
source generated by the Corporation's subsidiaries from the activities indicated
below.
Year Ended December 31,
----------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
Commercial Loans 19% 18% 17% 18% 16%
Mortgage and Construction Loans 16 16 15 16 16
Consumer Loans 18 21 25 25 25
Home Equity/Line of Credit 2 2 2 2 3
Securities 4 5 6 7 10
Federal Funds Sold 1 2 3 1 2
- --- --- -- ---
Total Interest Income 60 64 68 70 72
Trust Services 21 23 21 17 17
Other Income * 19 13 11 13 11
-- --- --- --- ---
Total Revenues * 100% 100% 100% 100% 100%
==== ==== ==== ==== ====
* Revenues were generated by the Bank, JWR&Co, CDC, TCBM, Insurance Counsellors,
and BM Brokerage in 1999 by the Bank, TCBM, and Insurance Counsellors in 1998
and by the Bank and TCMB in 1997. Of the Corporation's total revenues generated
in 1999, JWR&Co, CDC, TCBM, Insurance Counsellors and BM Brokerage, respectively
earned 4%, 2%, 1.5%, 1%, and .4% thereof. Respective revenues generated by TCBM
and Insurance Counsellors aggregated 1.7% and .5% of the Corporation's total
revenues in 1998. TCBM aggregated .4% in 1997. The Bank generated all revenues
during 1996 and 1995.
8
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, 1999, as follows:
Disclosure Required by Industry Reference to the Corporation's
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Guide 3 1999 Annual Report
- -------- -------------------
(Financial Section)
-------------------
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 6)
B. Rate/Volume Differentials.................... Rate/Volume Analyses (page 7)
C. Non-Accrual Policy........................... Loan Portfolio and Non performing Asset Analysis
(page 12)
D. Interest Rate Sensitivity
Analysis..................................... Interest Rate Sensitivity Analysis (page 15)
II. Investment Portfolio
A. Book Values.................................. Notes to Consolidated Financial statements, Note 3
(page 25)
B. Maturities................................... Notes to Consolidated Financial Statements, Note 3
(page 25)
III. Loan Portfolio
A. Types of Loans............................... Loan Portfolio (page 11)
B. Maturities and Sensitivity to
changes in Interest Rates.................... Loan Portfolio-Maturity Distribution (page 11)
Interest Rate Sensitivity Analysis (page 15)
C. Non-Performing Assets........................ Nonperforming Assets (page 14)
9
Disclosure Required by Industry Reference to the Corporation's
- -------------------------------- ------------------------------
Guide 3 1999 Annual Report
- -------- ------------------
(Financial Section)
-------------------
IV. Summary of Loan Loss Experience
A. Analysis of Loss Experience................. Allowance for Possible Loan Losses (page 8)
B. Allocation of Allowance for
Loan Losses................................. Allocation of Allowance for Possible Loan Losses
(page 8)
V. Deposits
A. Average Deposits............................ Average Daily Balances of Deposits (Page 13)
B. Maturity tables and outstanding
balances, deposits $100,000 or
more........................................ Maturity of Certificates of Deposit of $100,000 or
Greater (page 13)
VI. Return on Equity and Assets................. Selected Financial Data (page 1)
10
COMPETITION
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The Corporation's principal purpose is to hold the stock of the Bank and the
Corporation's other subsidiaries. Therefore, there is presently neither a market
area 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 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 has six full service branch
offices located in Bryn Mawr, Havertown, Wayne, Wynnewood, Paoli, and West
Conshohocken, Pennsylvania. In addition, there are six limited service
facilities located in life care communities in Waverly Heights, Martins Run, the
Quadrangle, Beaumont at Bryn Mawr, Bellingham and White Horse Village. All
facilities are located in Montgomery, Chester or Delaware Counties.
The banking business is highly competitive. The Bank competes not only with
other commercial banks but it also experiences competition from savings and loan
associations, trust companies 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 those organizations must be
considered competitors of the Bank.
TCBM's market area is primarily located in southeastern Pennsylvania, New
Jersey and Delaware, although the nature of tax consulting services permits
11
TCBM to provide its services anywhere in the United States. TCBM's primary
competition is from accounting and tax preparation firms. TCBM is housed in the
main office building of the Bank, located at 801 Lancaster Avenue, Bryn Mawr,
Pennsylvania.
Insurance Counsellors' market area is primarily located in southeastern
Pennsylvania, New Jersey and Delaware, although they are able to market and sell
insurance products and services anywhere in the United States. Insurance
Counsellors is housed in the main office building of the Bank, located at 801
Lancaster Avenue, Bryn Mawr, Pennsylvania. Insurance Counsellors' primary
competition is from insurance agencies and insurance agents.
BM Brokerage's market area is primarily located in southeastern Pennsylvania,
New Jersey and Delaware, although they are able to market and sell securities
related products anywhere in the United States. BM Brokerage is housed in the
main office building of the Bank, located at 801 Lancaster Avenue, Bryn Mawr,
Pennsylvania. BM Brokerage's primary competition is from brokerage firms,
mutual funds and financial institutions offering similar types of securities
related products.
CDC's market area is primarily located in the Pennsylvania, New Jersey and
Delaware. CDC is housed at 2 Bryn Mawr Avenue directly across from the main
office building of the Bank. CDC's main competition is brokerage firms and other
investment advisors.
JWR&Co's primary function is a family business office. Its market area is
Pennsylvania and targets individuals and families with substantial
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assets. JWR&Co is located in King of Prussia, Pennsylvania at 2011 Renaissance
Boulevard, Suite 200. JWR&Co's primary competition is the wealth management
departments of various banks in the area.
13
SUPERVISION AND REGULATION
--------------------------
Bank holding companies, such as the Corporation, and its subsidiaries,
including the Bank, are subject to extensive regulation 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.
On November 12, 1999, President Clinton signed into law the Gramm-Leach-
14
Bliley Act, or the Financial Services Act of 1999 (the "FSA"), which became
effective on March 11, 2000. The FSA amends certain portions of the Act, subject
to conditions. See "Recently Enacted Legislation" below for more information.
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, 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
15
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.
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
16
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.
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
17
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 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
18
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 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.
FDICIA substantially alters the deposit insurance assessment process. The
requirement that the FDIC (Federal Deposit Insurance Corporation) 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. 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. 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, FDICIA
19
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 currently 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.
20
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.
21
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. 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 state and federal laws, including requirements to
22
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.
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
23
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 deem
relevant. 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.
On October 1, 1998, the FDIC adopted two rules governing minimum capital
levels that FDIC-supervised banks must maintain against the risks to which they
are exposed. The first rule makes risk-based capital standards consistent for
two types of credit enhancements (i.e., recourse arrangements and direct credit
substitutes) and requires different amounts of capital for different risk
positions in asset securitization transactions. The second rule permits limited
amounts of unrealized gains on debt and equity securities to be recognized for
risk based capital purposes as of September 1, 1998. The FDIC rules also provide
that a qualifying institution that sells small business loans and leases with
recourse must hold capital only against the amount of recourse retained. In
general, a qualifying institution is one that is well-capitalized under the
FDIC's prompt corrective action rules. The amount of recourse that can receive
the preferential capital treatment cannot exceed 15% of the institution's total
24
risk-based capital.
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.
25
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 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.
26
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 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. 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
27
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.
Recently Enacted Legislation
- ----------------------------
The recently enacted FSA repeals provisions of the Glass-Steagall Act,
which had prohibited commercial banks and securities firms from affiliating with
each other and engaging in each other's businesses. Thus, many of the barriers
prohibiting affiliations between commercial banks and securities firms have been
eliminated.
The FSA amends the Act to allow new "financial holding companies" ("FHC")
to offer banking, insurance, securities and other financial products to
consumers. Specifically, the FSA amends section 4 of the Act in order to provide
for a framework for the engagement in new financial activities. Bank holding
companies may elect to become a financial holding company if all its subsidiary
depository institutions are well-capitalized and well-managed. If these
requirements are met, a bank holding company may file a certification to that
effect with the Federal Reserve Board and declare that it elects to become a
FHC. After the certification and declaration is filed, the FHC may engage either
de novo or through an acquisition in any activity that has been determined by
the Federal Reserve Board to be financial in nature or incidental to such
financial activity. Bank holding
28
companies may engage in financial activities without prior notice to the Federal
Reserve Board if those activities qualify under the new list in section 4(k) of
the Act. However, notice must be given to the Federal Reserve Board within 30
days after the FHC has commenced one or more of the financial activities.
Under the FSA, a bank subject to various requirements is permitted to engage
through "financial subsidiaries" in certain financial activities permissible for
affiliates of FHC's. However, to be able to engage in such activities the bank
must continue to be well-capitalized and well-managed and receive at least a
"satisfactory" rating in its most recent Community Reinvestment Act examination.
The Corporation cannot be certain of the effect of the foregoing recently
enacted legislation on its business, although there is likely to be
consolidation among financial services institutions and increased competition
for the Corporation.
Privacy of Consumer Financial Information
- -----------------------------------------
The FSA also contains a provision designed to protect the privacy of each
consumer's financial information in a financial institution. Pursuant to the
requirements of the FSA, the financial institution regulators (the "financial
regulators") intended to better protect the privacy of a consumer's financial
information maintained in financial institutions. The regulations are designed
to prevent financial institutions, such as the Bank, from disclosing a
consumer's nonpublic personal information to third parties that are not
affiliated with the financial institution.
However, financial institutions can share a customer's personal
29
information or information about business and corporations with their affiliated
companies. The regulations also provide that financial institutions can disclose
nonpublic personal information to nonaffiliated third parties for marketing
purposes but the financial institution must provide a description of its privacy
policies to the consumers and give the consumers an opportunity to opt-out of
such disclosure and, thus, prevent disclosure by the financial institution of
the consumer's nonpublic personal information to nonaffiliated third parties.
The financial regulators are implementing the requirements of these important
regulations to, among other things, provide guidance concerning what are
"nonpublic personal information", "consumers", and "customers", as well as about
the required timing for notices to customers and the means by which customers
can exercise their rights to opt-out of disclosure of their personal
information. The vital privacy provision of the FSA will require significant
effort by the staff for the Bank and the Corporation to implement.
Government Policies and Future Legislation
------------------------------------------
As the enactment of the FSA confirms, 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 acquisitions of out-of-state
banks by bank holding companies, the expansion of the powers of banks and thrift
institutions, the liberalization of the
30
restrictions upon the activities in which bank holding companies may engage, the
imposition of limitations on interest rates and service 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 of the Corporation
- -------------------------------
The non-bank 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.
31
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, that is (i) a
property contiguous to the Bank's main office and (ii) a property at 10 Bryn
Mawr Avenue to house the Bank's Investment Management and Trust Division. The
first property which is contiguous to the Bank's main office, houses an expanded
drive-up facility and a meeting room and is subject to a mortgage as outlined in
Note 6 to the Corporation's financial statements, on page 26 of the Financial
Section its 1999 Annual Report. The second property became the location of the
Bank's Investment Management and Trust Division in mid-December, 1989. The real
property owned by the Corporation and the Bank, other than that contiguous to
the Bank's main office is free and clear of all liens and encumbrances. Below is
a schedule of all properties owned or leased by the Corporation or its
subsidiaries.
The Bank:
- --------
Date Acquired
Current Banking Office Address or Opened
- ---------------------- ------- ---------------
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
32
Date Acquired
Current Banking Office Address or Opened
- ---------------------- ------- ----------------
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) One Tower Bridge (1) 1995
Through July 31, 2001 West Conshohocken, Pa 19428
Branch Office (leased) The Quadrangle (2) 1989
month to month basis 3300 Darby Road
Haverford, PA 19041-1095
Branch Office (leased) Waverly Heights, Ltd. (2) 1986
month to month basis Life Care Community
Gladwyne, PA 19035
Branch Office (leased) Martins Run (2) 1987
month to month basis Life Care Community
11 Martins Run
Media, PA 19063
Branch Office (leased) Bellingham (2) 1991
through October 31, 2001 1615 East Boot Road
West Chester, PA 19380
Branch Office (leased) Beaumont at Bryn Mawr (2) 1995
through April 16, 2001 Retirement Community
Bryn Mawr, PA 19010
Office Space (leased) Four Tower Bridge (3) 1998
through October 1, 2008 200 Barr Harbor Drive
West Conshohocken, PA 19428
Office Space (leased) 2&6 Bryn Mawr Avenue (7) 1999
through March 1, 2028 Bryn Mawr, Pa. 19010
Branch Office (leased) White Horse Village (2) 2000
through March 1, 2005 535 Gradyville Road
Newtown Square, PA.
33
The Corporation:
- ----------------
Date Acquired
Other Facilities Address or Opened
- ----------------- ------- -------------
Walk-in Lobby, Drive-up 813 Bryn Mawr Avenue (4) 1988
Windows, Meeting Room Bryn Mawr, PA 19010
(owned)
Office Building (owned) 10 Bryn Mawr Avenue (5) 1988
Bryn Mawr, PA 19010
Tax Counsellors of Bryn Mawr, Inc.:
- -----------------------------------
Office Space (leased) 801 Lancaster Avenue (6) 1998
month-to-month basis Bryn Mawr, PA 19010
CDC Captial Management, Inc.:
- -----------------------------
Office Space (leased) 2 Bryn Mawr Avenue (8) 1999
month-to-month basis Bryn Mawr, PA 19010
Joseph W. Roskos, Inc.:
- -----------------------
Office Space (leased) 2011 Renaissance Blvd.(9) 1999
month-to-month basis Suite 200
King of Prussia, PA 19406
(1) This branch is on the lobby level of an office building and has been
established to primarily meet the needs of the occupants of the office
building and the surrounding community. There is an automatic teller
machine located within the facility. The lease is for 705 square feet
and expires on July 31, 2001.
(2) This branch office has been established primarily to meet the needs of
the residents of the Life Care Community in which it is located.
(3) This lease is for 1,250 square feet of office space to house the
Investment Management and Trust Division's Investment Counsellors of
Bryn Mawr ("ICBM"). ICBM was established in January 1996 to provide
investment advisory services to both existing and new clients of the
Investment Management and Trust Division. The lease expires on October
1, 2008.
(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
34
and a meeting room, and was put in service in August, 1990.
(5) This property became the new location of the Bank's Investment
Management Trust Division, in mid-December, 1989. The Corporation leased
the property to the prior owners on a month-to-month basis through June,
1989.
(6) This lease is for 350 square feet of office space to house TCBM's staff.
The lease is on a month-to-month basis.
(7) This lease is for 24,800 square feet of office space to house the
support staff currently located in the Bank's main office at 801
Lancaster Avenue. The support areas which will relocate are Audit, Human
Resources, Marketing, and Comptrollers.
(8) This lease is for 770 square feet of office space to house CDC's staff.
The lease is on a month-to-month basis.
(9) This lease is for 7,527 square feet of space to house the employees of
JWR&Co which is located in King of Prussia, Pennsylvania. The term of
the lease is for 66 months (5 years and six months) which commenced
February, 1999.
35
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 businesses.
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.
36
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 31 of
the Financial Section of the Corporation's Annual Report to Shareholders for the
year ended December 31, 1999.
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 1 of
the Financial Section of the Corporation's Annual Report to Shareholders for the
year ended December 31, 1999.
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"
on pages 2 to 17 of the Financial Section of the Corporation's Annual Report to
Shareholders for the year ended December 31, 1999.
37
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 18 to 37 of
the Financial Section of the Corporation's Annual Report to Shareholders for the
year ended December 31, 1999.
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.
38
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 8 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 1,
1999:
AGE AS OF OFFICE WITH THE
NAME MARCH 1, 2000 CORPORATION AND/OR BANK
---- ------------- -----------------------
Robert L. Stevens 62 Chairman, President and Chief
Executive Officer, Director of
Corporation and Bank
Samuel C. Wasson, Jr. 61 Secretary and Director of Corporation
and Bank and Vice Chairman of Bank
Joseph W. Rebl 55 Treasurer of Corporation and Senior
Vice President, Treasurer & Chief
Financial Officer of Bank
Robert J. Ricciardi 51 Vice President of the Corporation and
Executive Vice President of the Bank,
Chief Credit Policy Officer
Paul M. Kistler 63 Senior Vice President of Bank, Human
Resources, Facilities, Security and
Compliance
Thomas M. Petro 41 Senior Vice President of
Bank-Investment Management
Joseph W. Roskos 51 Executive Vice President of Trust
39
AGE AS OF OFFICE WITH THE
NAME MARCH 1, 2000 CORPORATION AND/OR BANK
---- ------------- -----------------------
Leo M. Stenson 49 Senior Vice President and Auditor of
Bank
Joseph G. Keefer 41 Senior Vice President and Chief
Lending Officer
Alison E. Gers 42 Senior Vice President
Marketing
June M. Falcone 33 Senior Vice President-Banking
Operations
Richard J. Fuchs 51 Group Vice President
Community Banking
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 appointed
the President and Chief Executive Officer and a director. In December, 1995, Mr.
Stevens was appointed Chairman, President and Chief Executive Officer of the
Bank and Corporation. In early 1998 Mr. Wasson assumed responsibility for the
information systems and banking operations functions.
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
40
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. In November 1997, he was elected Vice Chairman and assumed responsibility
for the day-to-day operation 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. In November 1997, Mr. Ricciardi was named the Bank's Chief
Credit Policy Officer and relinquished responsibility for the Community Banking
Division to Thomas M. Petro.
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.
In 1999, Mr. Rebl was designated Chief Financial Officer 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,
Facilities in January 1993, in April 1993 assumed responsibility for the Bank's
marketing function and in August, 1996, Mr. Kistler assumed responsibility for
the information systems and banking operations and turned
41
over responsibility for the Bank's marketing function to Mr. Petro. In early
1998, Mr. Kistler turned over responsibility for the information systems and
banking operations areas to Mr. Wasson. In September 1998, Mr. Kistler assumed
responsibility for the Bank's Compliance and Security functions. From 1976 to
1992, Mr. Kistler was employed by Philadelphia National Bank (now merged into
First Union 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-Information Management in November 1993. In August 1996,
Mr. Petro assumed responsibility for the Bank's marketing function and turned
over responsibility for the Bank's banking operations and information systems to
Mr. Kistler. In November 1997, he assumed responsibility for the Bank's
Community Banking Division from Mr. Ricciardi. In January 1999, Mr. Petro was
appointed to the additional role of President and Chief Executive Officer of
Bryn Mawr Brokerage Company, Inc., a newly formed subsidiary of the Corporation.
In December 1999, Mr. Petro assumed responsibility for the Investment Division
and turned over responsibility for the Bank's Community Banking Division to Mr.
Fuchs. In January 2000, Mr. Petro was appointed to the additional role of
Chairman of CDC Capital Management, Inc.
Mr. Roskos was employed by the Corporation on January 1, 1999 as President of
JWR&Co, a wholly owned subsidiary, coinciding with the acquisition of that
company by the Corporation. Prior to 1999, Mr. Roskos was the majority
shareholder and president of JWR&Co. In May 1999, Mr. Roskos was appointed
Executive Vice President of the Bank to serve as administrative head of the
Trust and Investment Division and a Vice President of the Corporation. In
42
October 1999, he was elected Chairman of JWR&Co. In December 1999, Mr. Roskos
turned over responsibility for the investment management function to Mr. Petro
while continuing to head the Trust Division.
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. In December 1996, Mr. Stenson was elected Senior Vice
President and Auditor. In September 1998, Mr. Stenson turned over responsibility
for the Bank's Compliance and Security function to Mr. Kistler.
Mr. Keefer was employed by the Bank as Vice President in March 1991. He was
promoted to Senior Vice President-Commercial Lending in July, 1994 and was made
the Bank's Chief Lending Officer in December 1997. Prior to his employment by
the Bank, Mr. Keefer was employed by First Pennsylvania Bank, NA from June 1980
until March 1991, where he was a Vice President in the commercial lending
division.
Ms. Gers was employed by the Bank as Senior Vice President-Marketing in May
1998. Prior to her employment by the Bank, she was Executive Vice President of
CoreStates Bank, NA from July 1995 until May 1998, having responsibility for
retail and small business marketing, advertising and product development. From
February 1988 until August 1992, Ms. Gers was Senior Vice President of Home
Unity Savings Bank, having responsibility for retail banking. From January 1986
to October 1987, she was Marketing Director for Colonial Penn Group. From
February 1983 until January 1986, she was Product Manager for third party life
and health insurance products for National Liberty Marketing.
Ms. Falcone was employed by the Bank as a Junior Accountant in the
43
Comptrollers' Department in February 1989. She was appointed Assistant
Comptroller in January 1991. She became Assistant Vice President, having
responsibility for deposit accounting in December 1992. In August 1994, Ms.
Falcone was appointed Vice President. In October 1996 she was appointed Group
Vice President. Ms. Falcone assumed responsibility for the Bank's Cash
Management and Electronic Services department in January 1997. She was appointed
Senior Vice President-Banking Operations, Cash Management and Electronic
Services in November 1997.
Mr. Mixon was employed by the Bank in June 1969 as a teller. He was appointed
Assistant Treasurer in the Bank's Community Banking Division in January 1974. In
January 1976, he was appointed Assistant Vice president. In September 1983, Mr.
Mixon was appointed Vice President. He assumed responsibility for the Bank's
Operations Department in January 1986. In 1995, he was appointed Group Vice
president in charge of Information Systems. In March 1997, he was appointed
Senior Vice President-Information Systems. In January 1999, he was also made the
Bank's Chief Technology Officer.
Mr. Fuchs was employed by the Bank in January 1993 as Vice President-Branch
operations. He was promoted to Group Vice President-Branch Operations in
December 1997 and assumed responsibility for the Community Banking Division in
December 1999. Mr. Fuchs had previously been employed by the Bank from 1971
1987. In September 1987 he resigned his positions as Vice President-General
Banking to pursue other business interests. From 1987 until he rejoined the
Bank in 1993 Mr. Fuchs owned and operated a retail franchise.
None of the above executive officers has any family relationship with any other
executive officer or with any director of the Corporation or Bank.
44
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 6 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 16 of the Corporation's definitive proxy statement, filed with
the Securities and Exchange Commission pursuant to Regulation 14A.
45
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
46
with the Securities and Exchange Commissions on March 28, 1990.
(D) Agreement dated December 20, 1990 between Bryn Mawr Bank Corporation and
Profit Research by reference to the Corporation's and Exchange Commissions
on Consulting, Inc., is incorporated 10-K, filed with the Securities March
28, 1990.
(E) Letter of Understanding dated December 20, 1990, between Bryn Mawr Bank
Corporation and Profit incorporated by reference to the Securities and
Exchange Research Group, Inc., is Corporation's 10-K, filed with
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.
The Bryn Mawr Bank Corporation Amended and Restated 1986 Stock
Option and Stock Appreciation Plan, is hereby incorporated by
reference to the Corporation's Proxy Statement dated March 14,
1994 and filed with the Commission as Appendix A to the Proxy Statement on
March 15, 1994.
(H) License Agreement dated December 30, 1994, between Bryn Mawr Bank
Corporation and FIserv Cir, Inc. is incorporated by reference to the
Corporation's 10-K, filed with the Securities and Exchange Commission on
March 31, 1995.
(I) The Bryn Mawr Bank Corporation Non-Employee Directors Stock Option Plan, is
hereby incorporated by reference to the Corporation's Proxy Statement March
10, 1995 and filed with the Commission as Appendix A to the Proxy Statement
on March 10, 1995.
(J) The Bryn Mawr Bank Corporation 1998 Stock Option Plan, is hereby
incorporated by reference to the Corporation's Proxy Statement dated
March 2, 1998 and filed with the Commission as Exhibit A to
47
the Proxy Statement.
(K) Agreement dated May 2, 1997, between The Bryn Mawr Trust Company and
Marshall and Ilsley Corporation, to provide data processing services to the
Bank's Investment Management and Trust Division by reference into this
filing of the Corporation's Form 10-K.
(L) Agreement dated January 1, 1999 between Bryn Mawr Brokerage Company, Inc.
and UVEST Financial Services Group, Inc., to provide brokerage support
services to BM Brokerage is incorporated by reference into this filing of
the Corporation's Form 10-K.
(M) Lease dated March 1, 1999 between The Bryn Mawr Trust Company and Anthony
J. Marcozzi and The Real Viking, Inc. for the property and the buildings
known as 2 and 6 Bryn Mawr Avenue. The term of this lease is for an initial
period of twenty-nine years with the option to extend for one-ten year
period with the same terms and conditions as the initial lease.
13 - Annual Report to Security Holders
- ---------------------------------------
The Registrant's 1999 Annual Report to Shareholders is attached 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
Tax Counsellors of Bryn Mawr, Inc. Pennsylvania
48
Name State of Incorporation
---- ----------------------
The Bryn Mawr Trust Company (Jersey), Ltd. Island of Jersey,
Channel Islands
Bryn Mawr Brokerage Co., Inc. Pennsylvania
Joseph W. Roskos Co., Inc. Pennsylvania
CDC Capital Management, Inc. Pennsylvania
23 - Consent of Independent Accountants
- ---------------------------------------
Consent of Independent Accountants filed herewith as Exhibit 23.
27 - Financial Data Schedule
- ----------------------------
Financial Data Schedule is filed herewith as Exhibit 27
99 - Portions of the Proxy Statement
- ------------------------------------
Excerpts from the Registrant's Proxy Statement for its 2000 Annual
Meeting to be held on April 18, 2000 are filed with the Securities and
Exchange Commission on March 7, 2000 as Exhibit 99.
(b) No reports on Form 8-K were filed by the Registrant during the quarter
ended December 31, 1999.
49
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 37 of the Financial Section of the
Corporation's 1999 Annual Report to Shareholders.
Consolidated Financial Statements and related notes are incorporated by
reference to the Financial Section of the Corporation's 1999 Annual Report to
Shareholders, and may be found on the pages of said Report as indicated in the
parenthesis:
Balance Sheets, December 31, 1999 and 1998 (page 18)
Statements of Income for the years ended December 31, 1999, 1998 and
1997 (page 19)
Statements of Comprehensive Income for the years ended December 31,
1999, 1998 and 1997 (page 22)
Statements of Changes in Shareholders' Equity for the years ended
December 31, 1999, 1998 and 1997 (page 21)
Statements of Cash Flows for the years ended December 31, 1999, 1998
and 1997 (page 20)
Notes to Financial Statements (pages 23 to 36)
Supplementary Data:
Quarterly Results of Operations are incorporated by reference to the information
under the caption "Selected Quarterly Financial Data (Unaudited)", in Note 18 on
page 34 of the Financial Section of the Corporation's Annual Report to
Shareholders for the fiscal years ended December 31, 1999 and 1998.
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 46 through 50 of this report.
50
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.
NAME TITLE DATE
---- ----- ---
/s/ Robert L. Stevens Chairman, President March 24, 2000
- ----------------------------- --
Robert L. Stevens and Chief Executive
Officer (Principal Executive
Officer) and Director
/s/ Joseph W. Rebl Treasurer (Principal March 23, 2000
- ----------------------------- --
Joseph W. Rebl Financial and Principal
Accounting Officer)
/s/ Richard B. Cuff Director March 23, 2000
- ----------------------------- --
Richard B. Cuff
_____________________________ Director March __, 2000
Warren W. Deakins
_____________________________ Director March __, 2000
John D. Firestone
/s/ William Harral III Director March 25, 2000
- ----------------------------- --
William Harral III
Director March ___, 2000
_____________________________
Wendell F. Holland
51
NAME TITLE DATE
---- ----- ----
/s/ Phyllis M. Shea Director March 24, 2000
- --------------------------- --
Phyllis M. Shea
____________________________ Director March __, 2000
B. Loyall Taylor, Jr.
/s/ Nancy J. Vickers Director March 24, 2000
- --------------------------- --
Nancy J. Vickers
/s/ Samuel C. Wasson, Jr. Director March 24, 2000
- --------------------------- --
Samuel C. Wasson, Jr.
Director March __, 2000
- ---------------------------
Thomas A. Williams
52
Commission File No. 0-15261
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
____________________________________________________________
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
For the Year Ended December 31, 1999
____________________________________________________________
B R Y N M A W R B A N K C O R P O R A T I O N
E X H I B I T S
53