Attached files
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| 8-K - BRYN MAWR BANK CORPORATION -- FORM 8-K - BRYN MAWR BANK CORP | d8k.htm |
 Bryn Mawr
Bank Corporation
NASDAQ: BMTC
First Quarter 2010 Update
Exhibit 99.1 |
 1
This
presentation
contains
certain
forward-looking
statements.
Forward-looking
statements
can
be
identified
by
the
fact
that
they
do
not
relate
strictly
to
historical
or
current
facts.
They
often
include
the
words
believe,
expect,
anticipate,
intend,
plan,
estimate
or
words
of
similar
meaning.
Forward-looking
statements,
by
their
nature,
are
subject
to
risks
and
uncertainties.
A
number
of
factors,
many
of
which
are
beyond
Bryn
Mawr
Bank
Corporation's
(“the
Corporation”)
control
could
cause
actual
conditions,
events
or
results
to
differ
significantly
from
those
described
in
the
forward
looking
statements.
Information
regarding
the
factors
and
risks
that
can
affect
the
Corporation’s
business,
financial
condition
and
results
of
operation
is
contained
in
the
Corporation’s
filings
with
the
Securities
and
Exchange
Commission,
which
are
available
at
http://www.sec.gov.
Forward-looking
statements
speak
only
as
of
the
date
they
are
made.
The
Corporation
does
not
undertake
to
update
forward-looking
statements.
Safe Harbor |
 2
Where to Find More Information About the
First Keystone Financial, Inc. Merger
The
Corporation
has
filed
with
the
Securities
and
Exchange
Commission
("SEC")
a
Registration
Statement
on
Form
S-4
concerning
the
proposed
merger
of
First
Keystone
Financial,
Inc.
into
the
Corporation
(the
“Merger”).
The
Registration
Statement
includes
a
prospectus
for
the
offer
and
sale
of
the
Corporation’s
Common
Shares
to
First
Keystone
Financial,
Inc.'s
shareholders
as
well
as
a
proxy
statement
for
the
solicitation
of
proxies
from
First
Keystone
Financial,
Inc.'s
shareholders
for
use
at
the
meeting
at
which
the
Merger
will
be
voted
upon.
The
combined
prospectus
and
proxy
statement
and
other
documents
filed
by
the
Corporation
with
the
SEC
contain
important
information
about
the
Corporation,
First
Keystone
Financial,
Inc.,
and
the
Merger.
We
urge
investors
and
First
Keystone
Financial,
Inc.'s
shareholders
to
read
carefully
the
combined
prospectus
and
proxy
statement
and
other
documents
filed
with
the
SEC,
including
any
amendments
or
supplements
also
filed
with
the
SEC.
First
Keystone
Financial,
Inc.'s
shareholders
in
particular
should
read
the
combined
prospectus
and
proxy
statement
carefully
before
making
a
decision
concerning
the
Merger.
Investors
and
shareholders
may
obtain
a
free
copy
of
the
combined
prospectus
and
proxy
statement
–
along
with
other
filings
containing
information
about
the
Corporation
–
at
the
SEC’s
website
at
http://www.sec.gov.
Copies
of
the
combined
prospectus
and
proxy
statement,
and
the
filings
with
the
SEC
incorporated
by
reference
in
the
combined
prospectus
and
proxy
statement,
can
also
be
obtained
free
of
charge
by
directing
a
request
to
Bryn
Mawr
Bank
Corporation,
801
Lancaster
Avenue,
Bryn
Mawr,
PA
19010,
attention
Geoff
Halberstadt,
Secretary,
telephone
(610)
581-4873. |
 3
Bryn Mawr Bank Corporation
Profile
Founded in 1889 –
120 year history
A unique business model with a traditional commercial bank ($1.2
billion)
and a trust company ($3.1 billion) under one roof
Wholly owned subsidiary –
The Bryn Mawr Trust Company
Located on Philadelphia’s affluent “Main Line”
|
 4
Chester
Bucks
Montgomery
Berks
State of Delaware
Philadelphia
New Jersey
Delaware
New Jersey
The Franchise Footprint
9 Full Service Branches/
7 Life Care Facilities
Average Household Income
$84,600
$41,000
$-
$20,000
$40,000
$60,000
$80,000
$100,000
BMTC Target
Market
Penna. State
Average
Percent of Population with
College Degree
59%
22%
0%
10%
20%
30%
40%
50%
60%
70%
BMTC Target Market
Penna. State
Average
Source: Public School Review
Life Care Facilities
Branch Offices |
 5
Investment Considerations
A great brand & franchise
Solid financial fundamentals
Excellent credit quality
Outstanding target market demographics
New business initiatives driving growth
Well-capitalized
$3.1 billion wealth management business that provides a significant
source of non-interest income |
 6
Experienced Management Team
Chairman, President and CEO –
Ted Peters
Lending –
Joseph Keefer
Wealth Management –
Frank Leto
Retail Banking –
Alison Gers
Finance –
Duncan Smith
Risk Management –
Geoffrey Halberstadt |
 7
Financial Highlights
First Qtr
2010
Fourth Qtr
2009
First Qtr
2009
12/31
2009
12/31
2008
Portfolio Loans & Leases ($ in
millions)
$893
$886
$893
$886
$900
Wealth Assets in Total ($ in
billions)
$3.11
$2.87
$1.96
$2.87
$2.15
Non-performing Loans as a
% of Portfolio Loans and Leases
0.77%
0.78%
0.45%
0.78%
0.65%
Tangible Book Value Per Share
$10.56
$10.40
$9.78
$10.40
$9.55
Tangible Common Equity Ratio
7.82%
7.51%
7.20%
7.51%
7.13%
Dividends Declared
$0.14
$0.14
$0.14
$0.56
$0.54 |
 8
Financial Highlights -
continued
1
st
Qtr
2010
4
th
Qtr
2009
3
rd
Qtr
2009
2
nd
Qtr
2009
1
st
Qtr
2009
Net Income ($ in millions)
$2.22
$2.64
$2.62
$2.45
$2.63
Basic Earnings Per
Common Share
$0.25
$0.30
$0.30
$0.28
$0.31
Diluted Earnings Per
Common Share
$0.25
$0.30
$0.30
$0.28
$0.31
Dividend Declared Per
Share
$0.14
$0.14
$0.14
$0.14
$0.14 |
 9
2010 Strategies
Complete the merger with First Keystone Financial Inc. in the third quarter
and introduce Bryn Mawr Trust services to its customers
Focus on the net interest margin
Continued emphasis on strong credit quality
Raise capital as needed
Monitor expenses
Use banking industry turmoil to attract new clients
Opportunistic expansion
Expand our Wealth Management offerings |
 Growth Initiatives |
 11
Announced acquisition of First Keystone Financial, Inc.
Announced on November 2, 2009
Approximately $500 million in assets
Expands footprint in Delaware and Chester (southeastern PA)
counties with 8 branches
New opportunities for BMTC Wealth Management, Business
Banking, Retail Banking and Mortgage Banking
Anticipate a July 2010 legal close
Growth Initiatives |
 12
Growth Initiatives -
continued
Bryn Mawr
Asset Management
“Lift out”
strategy
Four investment advisers hired
Approximately $150 million in new assets as of April 30, 2010
Additional opportunities being evaluated
Institutional Trust and Escrow Services |
 13
BMTC of Delaware
The Delaware Advantage
Generation Skipping Trusts
Directed Trusts
$403 million in assets at March 31, 2010
Branch Office Expansion and Modernization
West Chester Regional Banking Center Branch
Wayne and Paoli branch modernizations completed
Havertown branch modernization scheduled for 2010
Growth Initiatives -
continued |
 14
Growth Initiatives -continued
Small Ticket National Leasing Business
“Lift out”
strategy
Leases outstanding: $44.0 million at 3/31/2010
Planned lease portfolio reduction of $13.7 million in the last 12 months
Average yield 10.48%
Quarterly lease charge-offs have continuously decreased since 12/31/2008
Changes made in underwriting standards and collection process have
improved results |
 15
First Keystone Financial, Inc. –
Transaction Summary
(1) Based upon BMTC’s average daily closing price for twenty consecutive
trading days ending 10/30/2009 ($16.76) Acquiror:
Bryn Mawr Bank Corporation (NASDAQ: BMTC)
Seller:
First Keystone Financial, Inc. (NASDAQ: FKFS)
Consideration:
Each share of FKFS common stock will be exchanged for
0.6973 BMTC shares
Transaction Value:
Merger Consideration
Adjustment:
Per Share Merger Consideration subject to downward
adjustment based on the rise of FKFS delinquencies above
Board Representation:
Donald Guthrie (Chairman of the FKFS Board of Directors)
will join the BMTC Bank and Holding Company Boards as a
Director
Closing Condition:
Aggregate amount of FKFS delinquencies must be less than
$16.5 million
Required Approvals:
Customary Regulatory
Expected Closing:
July 2010
0.6973 BMTC shares
(1)
and $2.06 in cash
$34 million (approximate at announcement)
a specified level as of the month-end preceding the merger
|
 16
Merger Consideration Adjustment
FKF Delinquencies At
Month-End Preceding
Closing
Adjusted Amount Of
BMBC Stock To Be
Received For Each
FKF Share
Adjusted Per Share
Cash Consideration
For Each FKF Share
Deal Value with
BMTC Stock Valued
at $16.00 per Share
(in millions)
Less Than $10.5
million
0.6973
$2.06
$32.156
$10.5 -
$12.5 million
0.6834
$2.02
$31.518
$12.5 -
$14.5 million
0.6718
$1.98
$30.969
$14.5 -
$16.5 million
0.6589
$1.95
$30.393
$16.5 million or more
0.6485
$1.92
$29.916
Delinquencies are defined in the merger agreement as all loans delinquent 30 days
or more, non-accruing loans, other real estate owned, troubled debt
restructurings and the aggregate amount of loans charged-off between 10/01/2008 and
the month-end preceding closing in excess of $2.5 million. FKF delinquencies at
3/31/2010 were $13.1 million. |
 17
First Keystone Financial Inc. -
Transaction Highlights
Expands
branch
footprint
into
the
attractive
demographic
markets
of
Delaware
and
Chester
County, Pennsylvania
Important component of strategic plan
Enhances long-term franchise value
Complementary business mix
Both banks have a “community focus”
Significant potential synergies identified in wealth management services and
residential mortgage originations
Transaction elements
Extensive due diligence performed
Conservative credit mark estimated
Achievable cost savings identified
Material earnings per share accretion after expensing merger related costs
Pro forma tangible book value per share is not expected to be materially
changed Attractive internal rate of return
Pro
Forma
capital
ratios
remain
significantly
above
“well
capitalized”
levels |
 18
Source: SNL Financial
Pro forma financials do not include merger adjustments
BMTC data as of 3/31/2010; FKFS data as of 3/31/2010
(1)
Includes 7 limited service retirement community branches
Pro Forma Deposit Market Share –
Delaware County, PA
Bryn Mawr Bank Corp. (16)
First Keystone Financial, Inc. (8)
Expanding Southeast PA Footprint
Delaware, PA
2009
Total
2009
Deposits
Total
in
Market
Branch
Market
Share
Rank
Institution (ST)
Count
($000)
(%)
1
Wells Fargo & Co. (CA)
21
1,630
15.3
2
Royal Bank of Scotland Group
23
1,585
14.9
3
Toronto-Dominion Bank
15
1,360
12.8
4
Citigroup Inc. (NY)
3
1,040
9.8
5
PNC Financial Services Group (PA)
11
929
8.7
6
Banco Santander S.A.
13
830
7.8
Pro Forma
14
563
5.3
7
Beneficial Mutual Bncp (MHC) (PA)
7
386
3.6
8
Alliance Bancorp of Penn (MHC) (PA)
8
338
3.2
9
First Keystone Financial (PA)
7
337
3.2
10
Bryn Mawr Bank Corp. (PA)
7
226
2.1
Top 10
115
8,662
81.3
Market Total
181
10,651
100.0
($ in millions)
BMTC
FKFS
Pro Forma
Assets
$1,221
$489
$1,710
Loans
895
302
1,198
Deposits
914
331
1,246
Branches
16
(1)
8
24
Pro Forma Financials |
 19
Time Deposits
25.8%
NOW & Other
Trans. Accts.
21.4%
MMDA,
Savings, &
Other
35.4%
Demand
Deposits
17.4%
Consumer &
Leases
23.8%
Commercial
21.3%
Comm. RE
28.6%
Construction
RE
5.1%
Res. RE
21.1%
Consumer &
Leases
26.0%
Commercial
26.2%
Comm. RE
30.8%
Construction
RE
4.6%
Res. RE
12.4%
Pro Forma Loans and Deposits
Source: Company filings
FKFS loan and deposit data as of 3/31/2010
BMTC loan and deposit data as of 3/31/2010; totals include loans
held for sale
Time Deposits
19.7%
NOW & Other
Trans. Accts.
20.9%
MMDA,
Savings, &
Other
38.1%
Demand
Deposits
21.3%
Deposits
Loans
BMTC Stand Alone
Total: $895M
Total: $1.2B
Total: $914M
Total: $1.2B
Res. RE
47.1%
Construction
RE
6.3%
Comm. RE
22.2%
Commercial
6.9%
Consumer &
Leases
17.6%
Time Deposits
42.7%
NOW & Other
Trans. Accts.
22.8%
MMDA &
Savings
28.0%
Demand
Deposits
6.5%
Total: $302M
Total: $331M
BMTC Stand Alone
FKFS Stand Alone
BMTC Pro Forma
FKFS Stand Alone
BMTC Pro Forma |
 20
First Keystone Financial Inc. -
Due Diligence
Extensive due diligence conducted by BMTC and third parties
Extensive credit due diligence conducted
BMTC and third party loan review
Reviewed over 80% of commercial portfolio (CRE, C&I, and
Construction)
Multiple Construction / Commercial Real Estate sites visited
Conservative credit mark estimated at 4% to 5% of total loans
outstanding including existing Allowance for Loan Loss balance.
Estimated securities portfolio Mark–to–Market
KPMG conducted tax and accounting due diligence |
 Financial Review
Bryn Mawr Bank Corporation Only
As of March 31, 2010 |
 22
First Quarter 2010 Results
Net Income of $2.2 million
Diluted earnings per share of $0.25
Net Income includes:
$3.1 million charge-off largely attributable to one commercial
relationship
Security gains of $1.5 million
Merger and due diligence related costs associated with the pending
merger with First Keystone Financial Inc. of $347 thousand
|
 23
First Quarter 2010 Results -
continued
Wealth Management Assets were $3.1 billion –
up 8.3% from the fourth
quarter 2009
Revenue from Wealth Management services was $3.8 million -
up 6.5%
from the fourth quarter 2009
Tax-equivalent net interest margin at 4.06%, the third consecutive quarterly
increase
Deposit levels of $914.4 million at 3/31/2010 as new core transaction
account openings remain strong |
 24
First Quarter 2010 Results -
continued
No OTTI charges recorded in the first quarter of 2010 or for the
years
ended December 31, 2009, 2008 and 2007
Lease portfolio net charge-offs continue to decline ($1.4 million Q1 2009
to $545 thousand Q1 2010)
Loan quality strong with non-performing loans and leases of 77 basis
points at 3/31/2010
Professional fees higher due to collection activities and other initiatives
|
 25
Diluted Earnings Per Share
$1.31
$1.46
$1.48
$1.08
$1.18
$0.25
$0.00
$0.40
$0.80
$1.20
$1.60
2005
2006
2007*
2008
2009**
2010
YTD**
* Excludes $0.10 per share gain on sale of real estate
** Figure includes merger related costs |
 26
Portfolio Loan & Lease Growth
Total Portfolio Loans & Leases Outstanding
CAGR : 10.5% (2005-2009)
$595
$681
$803
$900
$886
$893
$200
$400
$600
$800
$1,000
2005
2006
2007
2008
2009
3/31/2010
($ in millions) |
 27
Asset Quality
Asset Quality
First Qtr
2010
Fourth Qtr
2009
First Qtr
2009
Nonaccrual loans and leases
$5,880
$6,246
$3,251
90+ days past due loans –
still accruing
$1,015
$668
$744
Nonperforming loans and leases
$6,895
$6,914
$3,995
Other nonperforming assets
-
$1,025
$1,315
Nonperforming assets
$6,895
$7,939
$5,311
Nonperforming loans and leases / portfolio loans
0.77%
0.78%
0.45%
Nonperforming assets / assets
0.56%
0.64%
0.45%
($ in thousands) |
 28
Asset Quality
First Qtr
2010
Fourth Qtr
2009
First Qtr
2009
Allowance for loan and lease losses
$9,740
$10,424
$10,137
Net loan and lease charge-offs (annualized) /
average loans
1.70%
0.53%
0.80%
Delinquency rate –
loans and leases > 30 days
1.10%
1.10%
1.01%
Delinquent loans and leases -
30-89 days
$2,917
$2,678
$5,077
Delinquency rate –
loans and leases 30-89 days
0.33%
0.30%
0.57%
TDR’s excluded from non-performing loans
$3,894
$1,622
-
Allowance for loan and leases losses / loans and
leases
1.09%
1.18%
1.13%
Allowance for loan and lease loss / nonperforming
loans and leases
141.3%
150.8%
253.7%
Asset Quality -
continued
($ in thousands) |
 29
0.07%
0.12%
0.25%
0.78%
0.78%
0.77%
0.0%
0.3%
0.6%
0.9%
2005
2006
2007
2008
2009
3/31/2010
Asset
Quality
-
Continued
Nonperforming loans and leases as a % of portfolio loans and leases
|
 30
Loan Composition at March 31, 2010
$275
$234
$188
$110
$42
$44
Commercial Mortgages
Commercial & Industrial
Home Equity Lines & Loans & Consumer Loans
Residential Mortgages
Construction
Leases
($ in millions) |
 31
$31.3
$33.3
$34.2
$37.1
$40.8
$11.1
$0
$10
$20
$30
$40
$50
2005
2006
2007
2008
2009
2010 YTD
Net Interest Income
CAGR: 6.9% (2005-2009)
Note: Not on a tax-equivalent basis
($ in millions) |
 32
3.63%
3.62%
3.59%
3.72%
3.85%
4.06%
3.2%
3.4%
3.6%
3.8%
4.0%
4.2%
Dec-08
Mar-09
Jun-09
Sep-09
Dec-09
Mar-10
Net Interest Margin
On a tax equivalent basis |
 33
$626
$709
$798
$888
$899
$200
$400
$600
$800
$1,000
2006
2007
2008
2009
1stQ 2010
Deposit Growth
Average Annual Deposits
($ in millions) |
 34
Average Deposits & Borrowed Funds Mix
First Quarter 2010
$23
$144
$85
$140
$484
$189
Non-Interest Bearing DDA
Savings, NOW & Money Market
Time Deposits
Wholesale Deposits, IND & IDC
Borrowed Funds
Subordinated Debt
($ in millions) |
 35
Investment Portfolio as of March 31, 2010
SECURITY DESCRIPTION (AFS)
Amortized
Cost
Fair
Value
Unrealized
Gain / Loss
U. S. Government Agency
$ 94,774
$ 94,808
$
34
State, County & Municipal
24,270
24,431
161
FNMA/FHLMC Mortgage Backed Securities
12,979
13,386
407
GNMA Mortgage Backed Securities
2,524
2,518
(6)
Foreign Debt Securities
1,250
1,250
-
Bond –
Mutual Funds
37,115
37,423
308
Total Investment Portfolio
$ 172,912
$ 173,816
$ 904
Note: Other assets at March 31, 2010 include approximately $8 million of FHLB of
Pittsburgh common stock at cost which is not paying a dividend and cannot be
redeemed. ($ in thousands) |
 36
Capital Considerations
Bryn Mawr Bank Corporation elected not to take TARP Capital
Maintains a “well capitalized”
capital position
Selectively add capital as needed to maintain capital levels and
fund asset
growth and acquisitions
Additional earn out payments for Lau Associates at the end of 2010 and
2011
Active Dividend Reinvestment and Direct Stock Purchase Plan
(DRIP/DSPP) |
 37
Capital Position -
Bryn Mawr Bank Corporation
3/31/2010
12/31/2009
3/31/2009
Tier I
9.70%
9.41%
8.96%
Total (Tier II)
12.78%
12.53%
11.41%
Tier I Leverage
8.63%
8.35%
8.05%
Tangible Common
Equity
7.82%
7.51%
7.20% |
 38
Capital Position -
Bryn Mawr Trust Company (“Bank”)
3/31/2010
12/31/2009
3/31/2009
Tier I
9.32%
9.06%
8.56%
Total (Tier II)
12.41%
12.20%
11.02%
Tier I Leverage
8.28%
8.03%
7.68% |
 39
$2.04
$2.18
$2.28
$2.15
$2.87
$3.11
$1.0
$2.0
$3.0
$4.0
2005
2006
2007
2008
2009
3/31/2010
Wealth Management Assets Under Management,
Administration, Supervision and Brokerage
(1)
($ in billions)
(1) Excludes Community Bank’s assets 2005 -
2007 |
 40
$11.5
$12.4
$13.5
$13.8
$14.2
$3.8
$2.0
$5.0
$8.0
$11.0
$14.0
$17.0
2005
2006
2007
2008
2009
2010 YTD
Wealth Management Fees
CAGR: 5.4% (2005 –
2009)
($ in millions) |
 41
Summary
Outstanding franchise in a stable market
Focus on Wealth Services, Business Banking and Private Banking
Investing in growth opportunities today for earnings growth
tomorrow
Announced acquisition will expand footprint
Sound business strategy, strong asset quality, well capitalized
and solid risk management procedures serve as a foundation for
expansion |
 Thank You
Joseph Keefer, EVP
610-581-4869
jkeefer@bmtc.com
Duncan Smith, CFO
610-526 –2466
jdsmith@bmtc.com
Ted Peters, Chairman
610-581-4800
tpeters@bmtc.com
Frank Leto, EVP
610-581-4730
fleto@bmtc.com
*******************************************
******************************************* |