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8-K - BRYN MAWR BANK CORPORATION -- FORM 8-K - BRYN MAWR BANK CORP | d473504d8k.htm |
EX-99.1 - SCRIPT FOR CONFERENCE CALL - BRYN MAWR BANK CORP | d473504dex991.htm |
Year End 2012
Update
December 31, 2012
(as of January 24, 2013)
Bryn Mawr Bank
Corporation
NASDAQ: BMTC
Strong -
Stable -
Secure
Exhibit 99.2 |
Safe
Harbor This presentation contains statements which, to the extent that they
are not recitations of historical fact may constitute forward-looking
statements for purposes of the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended.
Please see the section titled Safe Harbor at the end of the presentation for more
information regarding these types of statements.
The
information
contained
in
this
presentation
is
correct
only
as
of
January
24,
2013.
Our business, financial condition, results of operations and
prospects may have changed since that date, and we do not undertake to
update such information. 1 |
Profile
Bryn
Mawr
Bank
Corporation
Founded in 1889
124 year history
A unique business model with a traditional commercial bank ($2 billion)
and a trust company ($6.7 billion) under one roof at December 31, 2012
Wholly owned subsidiary
The Bryn Mawr Trust Company
Largest community bank in Philadelphias affluent western suburbs
3 wealth acquisitions and 2 bank acquisitions completed since 2008
Experienced and committed management team
2 |
Southeast
PA / DE
Branch
Footprint
3 |
Investment
Considerations
2012 dividend of $0.64
per share
Profitability Ratios:
The Corporations shareholders
equity grew $19.2 million or 10.4% from
December 31, 2011 to December 31, 2012
Emphasis on increasing earnings per share
Diversified revenue base: non-interest income 42% of total revenue for
the 12-months ended December 31, 2012
Full Year
12/31/2012
12/31/2011
Return on Average Assets (ROA)
1.15%
1.14%
Return on Average Equity (ROE)
10.91%
11.08%
Return on Average Tangible Equity (ROTE)
14.55%
13.85%
4 |
Comments
on
BMTC
from
Bank
Analysts
BMTC is a highly attractive franchise with a strong commercial
banking and wealth management focus.
(Guggenheim, October 2012)
Bryn Mawr is one of our top picks in the Northeast.
(Sterne Agee, October 2012)
The business mix built by the bank remains enviable in suburban
Philadelphia.
(Keefe, Bruyette & Woods, October 2012)
Going forward, despite fierce macroeconomic headwinds, we believe
managements efforts are likely to produce significant core EPS
growth.
(Merion Research, October 2012)
5 |
Year
to
Date
2012
BMTC
Stock
Performance
Closing price on December 30, 2011:
$19.49
Closing price on December 31, 2012:
$22.27
Dividends declared per share
12 months 2012:
$0.64
Security or Index
2012 Total Return
3 Year Annualized
Return**
Trailing 12-Month
Dividend Yield
BMTC*
17.81%
17.40%
2.87%
NASDAQ Bank Index*
18.73%
6.65%
2.29%
KBW Bank Index*
33.05%
8.03%
1.95%
*Source: Bloomberg
** Annualized return -12/31/2009 to 12/31/2012
6 |
Consistent
BMTC
Annual
Dividend
Year
Diluted
Earnings
Per Share
Annual
Dividend
Dividend
Yield Year-
End
Dividend
Payout Ratio
2008
$1.08
$0.54
2.69%
50.0%
2009
$1.18
$0.56
3.71%
47.5%
2010
$0.85
$0.56
3.21%
65.9%*
2011
$1.54
$0.60
3.08%
39.0%
2012
$1.60
$0.64
2.87%
40.0%
*Excluding the after tax cost of $5.7 million of merger related and due diligence expense, the dividend payout ratio was 46.4%.
7 |
Growth
Initiatives |
2013 Strategic
Initiatives 3-8-3 Strategic Plan
$3 billion in Banking assets -
$8 billion in Wealth assets
3 years
(December 2014)
Approved by the Board of Directors on May 8, 2012
Organic
growth
opportunistic
expansion
Inorganic
growth
criterion
-
Acquisitions
to
be
strategic
and
accretive to earnings per share in first 12 months (excluding merger
costs)
9 |
2013 Strategic
Initiatives - continued
Focus on the net interest margin
Concentrate on growing fee based income
Continued emphasis on strong credit quality
Integrate, streamline and assimilate recent acquisitions into more
effective and efficient wealth operations
Enhance and upgrade IT infrastructure throughout the organization
10 |
Purchase of Deposits and
Loans from First Bank of Delaware
Closed November 19, 2012
Purchased approximately $70 million of deposits and $80 million of
loans providing a positive influence on net interest income and the
net interest margin
Acquired and opened first branch in Delaware
Became the Banks 18 full service branch
Loan mark of $3.7 million or 4.6% of loans
11
th |
Financial
Review |
Financial Highlights
4
Qtr
2012
3
Qtr
2012
2
Qtr
2012
1
Qtr
2012
4
Qtr
2011
Total Assets
($ in billions)
$2.04
$1.81
$1.85
$1.84
$1.77
Portfolio Loans & Leases
($ in billions)
$1.40
$1.31
$1.30
$1.30
$1.29
Total Deposits
($ in billions)
$1.63
$1.40
$1.43
$1.43
$1.38
Total Wealth Assets
($ in billions)
$6.66
$6.48
$6.28
$5.15
$4.83
Market Capitalization
($ in millions)
$298.7
$296.8
$280.1
$297.4
$253.2
Net Income
($ in millions)
$5.30
$5.43
$5.35
$5.07
$5.00
13
th
rd
nd
st
th |
Financial Highlights -
continued
4
Qtr
2012
3
Qtr
2012
2
Qtr
2012
1
Qtr
2012
4
Qtr
2011
Diluted Earnings Per Common
Share
$0.40
$0.41
$0.40
$0.39
$0.38
Dividends Declared
$0.16
$0.16
$0.16
$0.16
$0.15
Book Value Per Share
$15.17
$15.02
$14.73
$14.40
$14.07
Tangible Book Value Per
Share
$11.08
$11.14
$10.77
$11.20
$10.78
Tangible Common Equity
Ratio
7.60%
8.58%
8.07%
8.22%
8.19%
Efficiency Ratio
70.1%
67.0%
66.4%
65.7%
65.4%
14
th
rd
nd
st
th |
Quarterly
Net
Interest
Margin
On a tax-equivalent basis
15
4.2%
4.0%
3.8%
3.6%
3.4%
3.2%
3.0%
3.91%
3.93%
3.84%
3.78%
3.86% |
Quarterly
Non-Interest Income (As a %
of Total Revenue)
55%
45%
35%
25%
15%
37%
37%
42%
42%
43%
16 |
Capital
Considerations
Maintain a well capitalized
capital position including a target tangible
common equity to tangible asset ratio of 8.00%
Selectively add capital to maintain capital levels and fund asset growth and
acquisitions
Strong emphasis on retained earnings going forward
Shareholders
equity grew $19.2 million or 10.4% from December 31, 2011
to December 31, 2012
Shelf Registration (Form S-3) of $150 million provides the ability to raise
capital as needed including a Dividend Reinvestment and Direct Stock
Purchase Plan with Waiver
17 |
Capital
Position
-
Bryn
Mawr
Bank
Corporation
12/31/2012
6/30/2012
12/31/2011
Tier I
11.03%
11.30%
11.16%
Total (Tier II)
12.02%
13.90%
13.74%
Tier I Leverage
8.72%
8.80%
8.89%
Tangible Common
Equity
7.60%
8.07%
8.19%
18 |
Events Reducing Capital
Ratios in 2012 Asset growth was better than expected; anticipated loan growth can be
funded from cash and investment securities
Paid off $22.5 million of higher rate subordinated debt in 2012 reducing
Tier II capital and ongoing interest expense
Pension OCI changes due to lower discount rate; Executive retirement
plan was effect
Davidson Trust Company acquisition on May 15, 2012
First Bank of Delaware transaction on November 19, 2012
19
Anticipated retained earnings over the next six months should raise the TCE
ratio back to 8.00% , as the benefits of the subordinated debt payoffs and the
full year impact of the acquisition run through the income statement.
+ |
Wealth
Division
Review |
Wealth Assets Under Management, Administration,
Supervision and Brokerage
($ in billions)
21
$7.5
$6.5
$5.5
$4.5
$3.5
$2.5
$1.5
2007
2008
2009
2010
2011
2012
$2.28
$2.15
$2.87
$3.41
$4.83
$6.66 |
Wealth Management Fees
($ in millions)
$35.0
$30.0
$20.0
$15.0
$10.0
$5.0
$0.0
$13.5
$13.8
$14.2
$15.5
$21.7
$29.8
2007
2008
$25.0
2012
2011
2010
2009
22
* |
Wealth Division Highlights
Wealth Management (Bryn Mawr, Hershey, Davidson
Trust) $4.36 billion in assets
Integrated solutions to protect and preserve wealth
Financial Planning
Estate Planning
Retirement Planning
Investment Management
Custody Services
Philanthropic Services
Fiduciary Trust Services
Long standing client relationships
Integration of operations of all three trust entities is underway
23 |
Wealth Division Highlights -
continued
Bryn Mawr Asset Management (Bryn Mawr, PA)
$306 million in assets
Brokerage services, asset allocation, objective advice
Lift Out
strategy with other opportunities being continuously evaluated
BMTC of Delaware (Greenville, DE)
$1.4 billion in assets
Provides
corporate
fiduciary
and
administrative
trustee
services
under
Delaware law and the full spectrum of tax advantaged strategies
Lower margin business with full year profitability expected in 2013
Lau Associates (Greenville, DE)
$594 million in assets
Fee-only, independent multi-family office providing highly personalized
service and sophisticated financial planning
24 |
Credit
Review |
Portfolio Loan &
Lease Growth ($ in millions)
* From 2010 forward, includes the addition of the First Keystone
loan portfolio.
** From 2012 forward, includes the addition of the loans acquired from First Bank of Delaware.
26
$900
$886
$1,197
$1,295
$1,398
$803
$1,500
$1,300
$1,100
$900
$700
$500
2007
2008
2009
2010*
2011
2012** |
Loan
Composition at December 31, 2012 $546
$292
$212
$288
$27
$33
Commercial Mortgages
(39%)
Commercial & Industrial
(21%)
Home Equity & Consumer
Loans (15%)
Residential Mortgages
(21%)
Construction
(2%)
Leases
(2%)
($ in millions)
Total loans and leases of $1,398 million
27 |
28
Qtr
2012
Qtr
2012
Qtr
2012
Qtr
2012
Qtr
2011
Non-Performing Loans as a % of
Portfolio Loans and Leases
1.06%
1.05%
1.41%
1.73%
1.11%
Allowance as a % of Portfolio Loans
and Leases
1.03%
1.04%
1.01%
1.00%
0.98%
Non-Performing Assets as a % of
Assets
0.77%
0.78%
1.03%
1.25%
0.84%
Annualized Net Charge-Offs as a %
of average quarterly loans and
leases
0.07%
0.16%
0.28%
0.23%
-0.01%
4
3
rd
2
nd
1
st
4
th
th
Quarterly Asset Quality Data |
Loan
and Lease Updates 1st quarter 2013 loan pipeline looks promising
Recent hires of experienced lenders coupled with the new team in
Delaware from the recent acquisition has increased new loan opportunities
for the Bank
The lease portfolio at December 31, 2012 is $33 million, has an average
yield of 9.83% and a delinquency rate of 0.22%
Significant decline in non-performing assets from $23.0 million at March
31, 2012 to $15.7 million at December 31, 2012
29 |
Outstanding franchise in a stable market
Focus on Wealth Services, Business Banking and Residential Mortgage
Diversified
income
base
non
interest
income
42%
of
total
revenue
for
the twelve months ended December 21, 2012
Outstanding loan quality in a difficult economic environment
Sound business strategy, strong asset quality, well capitalized and solid
risk management procedures serve as a foundation for potential strategic
expansion
Focus on earnings per share growth
Making IT infrastructure investments that will provide longer term benefits
30
Summary |
Ted
Peters, Chairman 610-581-4800
tpeters@bmtc.com
Frank Leto, EVP
610-581-4730
fleto@bmtc.com
Joseph Keefer, EVP
610-581-4869
jkeefer@bmtc.com
Duncan Smith, CFO
610-526 2466
jdsmith@bmtc.com
31 |
This
presentation contains statements which, to the extent that they are not recitations of
historical fact may constitute forward-looking statements for purposes of the
Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as
amended. Such forward-looking statements may include financial and other
projections as well as statements regarding Bryn Mawr Bank Corporations (the
Corporation) that may include future plans, objectives, performance,
revenues, growth, profits, operating expenses or the Corporations underlying
assumptions. The words may, would, should,
could, will, likely, possibly, expect,
anticipate,
intend, estimate, target, potentially,
probably, outlook, predict,
contemplate, continue, plan, forecast,
project*and believe*or*other*similar*words,*phrases
or concepts may identify forward-looking statements. Persons reading or present at this
presentation are cautioned that such statements are only predictions, and that the
Corporations actual future results or performance may be materially
different. Such forward-looking statements involve known and unknown risks and
uncertainties. A number of factors, many of which are beyond the Corporations
control, could cause our actual results, events or developments, or industry
results, to be materially different from any future results, events*or*developments*expressed,*implied*or*anticipated*by*such*forward-looking*statements,
and so our business and financial condition and results of operations could be
materially and adversely affected.
Safe Harbor
32 |
Safe Harbor
(continued) 33
Such factors include, among others, our need for capital, our ability to control operating
costs and expenses, and to manage loan and lease delinquency rates; the credit risks
of lending activities and overall quality of the composition of our loan, lease and
securities portfolio; the impact of economic conditions, consumer and business
spending habits, and real estate market conditions
on*our*business
*and*in*our*market*area;*changes*in*the*levels*of*general*interest*rates,*deposit
interest rates, or net interest margin and funding sources; changes in banking regulations
and policies and the possibility that any banking agency approvals we might require
for certain activities will not be obtained in a timely manner or at all or will be
conditioned in a manner that would impair our ability to implement our business
plans; changes in accounting policies and practices; the inability of key
third-party providers to perform their obligations to us; our ability to attract
and retain key personnel; competition in our marketplace; war or terrorist activities; material
differences in the actual financial results, cost savings and revenue enhancements
associated with our acquisitions including our contemplated acquisition of the First
Bank of Delaware; and other factors as described in our securities filings. All
forward-looking statements and information made
herein
are
based
on
Managements
current
beliefs
and
assumptions
as
of
January
24,
2013
and
speak
only
as
of
that
date.
The
Corporation
does
not
undertake
to
update
forward-
looking statements. |
Safe Harbor
(continued) For a complete discussion of the assumptions, risks and uncertainties
related to our business, you are encouraged to review our filings with the
Securities and Exchange Commission, including our most recent annual report on Form
10-K, as well as any changes in risk factors that we may identify in our
quarterly or other reports filed with the SEC.
This*presentation*is
*for*discussion*purposes*only,*and*shall*not*constitute*any*offer*to*sell*or*the
solicitation
of
an
offer
to
buy
any
security,
nor
is
it
intended*to*give
rise*to*any*legal*relationship
between*the*Corporation
*and*you*or*any*other*person,*nor*is*it*a*recommendation
*to*buy*any
securities or enter into any transaction with the Corporation.
The information contained herein is preliminary and material changes to such information
may be made at any time. If any offer of securities is made, it shall be made
pursuant to a definitive offering memorandum or prospectus (Offering
Memorandum) prepared by or on behalf of the Corporation, which would contain
material information not contained herein and which shall supersede, amend and
supplement this information in its entirety. Any decision to invest in the
Corporations securities should be made after reviewing an Offering Memorandum,
conducting such investigations as the investor deems necessary or appropriate, and
consulting the investors own legal, accounting, tax, and other advisors in
order to make an independent determination of the suitability and consequences of an
investment in such securities. 34
|
Safe Harbor
(continued) No offer to purchase securities of the Corporation will be made or
accepted prior to receipt by an investor of an Offering Memorandum and relevant
subscription documentation, all of which must be reviewed together with the
Corporations then-current financial statements and, with respect to the
subscription documentation, completed and returned to the Corporation in its entirety. Unless
purchasing in an offering of securities registered pursuant to the Securities Act of 1933,
as amended,*all*investors*must*be*accredited*investors*as*defined*in*the*securities*laws*of*the
United States before they can invest in the Corporation.
35 |
**Effect of Correction of an Immaterial Accounting Error
In September 2012, the Corporation identified and corrected an immaterial accounting error related to two of its deferred compensation plans, as disclosed in the Corporations Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 9, 2012. All periods presented in the tables accompanying this earnings release have been revised to reflect this correction. The following tables detail the corrections:
Income Statement Effect
(dollars in thousands except share data)
For The Three Months Ended June 30, 2012 For The Three Months Ended March 31, 2012 For The Three Months Ended December 31, 2011
Originally Originally Originally
Reported Corrected Difference Reported Corrected Difference Reported Corrected Difference
Net Income $ 5,261 $ 5,345 $ 84 $ 5,235 $ 5,074 $ (161) $ 5,170 $ 5,004 $ (166)
Basic earnings per common share $ 0.40 $ 0.41 $ 0.01 $ 0.40 $ 0.39 $ (0.01) $ 0.40 $ 0.39 $ (0.01)
Diluted earnings per common share $ 0.40 $ 0.40 $ $ 0.40 $ 0.39 $ (0.01) $ 0.39 $ 0.39 $
For The Twelve Months Ended December 31, 2011
Originally
Reported Corrected Difference
Net Income $ 19,713 $ 19,602 $ (111)
Basic earnings per common share $ 1.55 $ 1.55 $
Diluted earnings per common share $ 1.54 $ 1.54 $
Balance Sheet Effect
(dollars in thousands except share data)
As of June 30, 2012 As of March 31, 2012 As of December 31, 2011
Originally Originally Originally
Reported Corrected Difference Reported Corrected Difference Reported Corrected Difference
Total assets $ 1,854,885 $ 1,853,355 $ (1,530) $ 1,838,075 $ 1,836,411 $ (1,664) $ 1,774,907 $ 1,773,373 $ (1,534)
Retained earnings $ 132,837 $ 132,420 $ (417) $ 129,702 $ 129,201 $ (501) $ 126,582 $ 126,242 $ (340)
Cost of treasury stock $ 29,789 $ 30,901 $ 1,112 $ 29,833 $ 30,995 $ 1,162 $ 29,833 $ 31,027 $ 1,194
Shares of treasury stock 2,905,293 2,988,561 83,268 2,909,542 2,995,681 86,139 2,909,542 2,997,628 88,086
* In September 2012, the Corporation identified and corrected an immaterial accounting error related to two of its deferred compensation plans, as disclosed in the Corporations Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 9, 2012. All periods presented in the tables accompanying this earnings release have been revised to reflect this correction.