Press Release

EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

LOGO

Bryn Mawr Bank Corporation


FOR RELEASE:		IMMEDIATELY

FOR MORE INFORMATION CONTACT:

Ted Peters, Chairman

610-581-4800 or

610-525-2531 (evening)

tpeters@bmtc.com

J. Duncan Smith, CFO

610-526-2466 or

610-306-8489 (evening)

jdsmith@bmtc.com

Bryn Mawr Bank Corporation Reports a 12.1% Increase in Fourth

Quarter Diluted Earnings Per Share.

BRYN MAWR, Pa. January 25, 2007 - Bryn Mawr Bank Corporation, (NASDAQ: BMTC), (the “Corporation”), parent of The Bryn Mawr Trust Company (the “Bank”), today announced fourth quarter 2006 diluted earnings per share of $0.37, an increase of $0.04 or 12.1% compared to $0.33 in the same period last year. Net income for the fourth quarter of 2006 was $3.208 million, an increase of 11.2% or $324 thousand, compared to $2.884 million in last year’s fourth quarter. “We are pleased with our strong results during the quarter, especially considering the difficult interest rate environment and the costs associated with starting a leasing company and opening a loan production office,” commented Chairman and CEO, Ted Peters.

Return on average equity (ROE) and return on average assets (ROA) for the quarter ended December 31, 2006, were 15.01% and 1.62%, respectively. ROE was 15.04% and ROA was 1.65% for the same period last year. The primary factors contributing to the increase in earnings for the fourth quarter of 2006 compared to the same period last year were an increase in Wealth Management fee revenue of $295 thousand or 10.0% and a decrease in non-interest expenses of $292 thousand or 3.6%. Tax equivalent net interest income for the three months ended

December 31, 2006, increased $175 thousand to $8.520 million from $8.345 million in the same period last year, as the volume of interest income from new loans offset the increase in the cost of funding.

Net income for year ended December 31, 2006, was $12.716 million, an increase of 12.0% or $1.366 million, compared to $11.350 million in the same period last year. Diluted earnings per share for the year ended December 31, 2006, were $1.46, an increase of $0.15 or 11.5%, compared with $1.31 in 2005. ROE and ROA for 2006 were 15.65% and 1.72%, respectively. ROE was 15.44% and ROA was 1.66% for the same period last year.

The major factor contributing to the increase in earnings for the full-year 2006 compared to the full-year 2005 was a $2.048 million or 6.5% increase in the Corporation’s tax equivalent net interest income to $33.655 million from $31.607 million in 2005, despite a decrease in the tax equivalent net interest margin of 14 basis points to 4.90% in 2006 from 5.04% in 2005. Also contributing to the increase in earnings was a nominal decrease in overall non-interest expense of $150 thousand as total non-interest expenses were $31.423 million. Additionally, fees for Wealth Management services increased 7.7% or $883 thousand to $12.422 million in 2006 versus $11.539 million in 2005, partially offsetting declines in residential mortgage-related revenues.

Asset quality remains strong with non-performing assets of $0.8 million at December 31, 2006, which represent 0.10% of total assets. While the allowance for loan and lease losses (“allowance”) increased to $8.122 million at December 31, 2006 from $7.402 million at December 31, 2005, the allowance as a percentage of portfolio loans decreased to 1.19% from 1.24% over the same time period. The decrease in the allowance as a percentage of portfolio loans is attributed to strong loan growth in the second and third quarters of 2006 and continued strength in asset quality. Net loan charge-offs were $112 thousand and $287 thousand for the years ended December 31, 2006 and 2005, respectively.

Portfolio loans increased $86.1 million or 14.5% to $681.3 million at December 31, 2006 from $595.2 million at December 31, 2005, reflecting a significant increase in commercial mortgage and construction loan closings in the second and third quarters of 2006. Also contributing to the growth was the formation of BMT Leasing Inc., a small ticket equipment leasing business and a wholly owned subsidiary of the Bank, which added $7.0 million in balances since its opening in September of 2006. Fourth quarter 2006 average loans increased $77.7 million or 13.1% over fourth quarter 2005 average loans. The Corporation recently opened a business loan production office in downtown West Chester, Pennsylvania to help maintain this growth.

Mr. Peters continued, “Chester County continues to offer some of the most attractive expansion opportunities for our franchise, and establishing this presence in the heart of West Chester, the county seat of Chester County, will help us capitalize on those opportunities. We are fortunate to have David Glarner and Peter D’Angelo, both well known and highly experienced business lenders, to head up our new loan production office in the area.”

The Corporation’s interest bearing liabilities at December 31, 2006 include approximately $65 million in market rate wholesale certificates and short-term borrowings compared with $5 million at December 31, 2005. Deposit balances at December 31, 2006 and 2005, reflect approximately $35 million and $25 million, respectively, in demand deposit balances that represent short term in-flows from customer year-end activity. Total deposits, including the short term in-flows were $714 million and $636 at December 31, 2006 and 2005, respectively. This represents a year over year increase in total deposits of $78.2 million or 12.3%.

The Corporation adopted Statement of Financial Accounting Standards No. 158 “Employers’ Accounting for Defined Benefit Pension Plans and Other Postretirement Plans” in the fourth quarter of 2006. As a result of its adoption, the Corporation recorded additional pension liabilities of approximately $6.5 million, deferred taxes of approximately $2.3 and a reduction of accumulated other comprehensive income (capital) of approximately $4.2 million effective December 31, 2006.

The reduction in capital does not have an impact on regulatory capital, as Federal bank and thrift regulatory agencies announced an interim decision in December 2006 that SFAS No. 158 will not affect bank organization’s regulatory capital in 2006. The Federal bank and thrift regulatory agencies have not made any announcements as to the impact of SFAS No. 158 on regulatory capital in 2007 and beyond.

During the last twelve months, the Corporation has seen a shift in the mix of its core deposits as some lower cost interest bearing checking, money market accounts and savings accounts moved into higher yielding certificates of deposit. This shift in the core deposit mix is a national trend as many financial institutions are having similar experiences. The utilization of market rate wholesale funding, the shift in deposit mix and the increase in interest rates resulted in overall funding costs rising faster than the yield on interest earning assets. The Corporation anticipates that funding for 2007 earning asset growth will be predominately wholesale funding as core deposit growth remains very difficult.

At December 31, 2006, the Corporation had over $248 million in unused borrowing capacity at the Federal Home Loan Bank of Pittsburgh, along with capacity under federal funds lines at other financial institutions of $68 million.

Mr. Peters concluded, “Over the next year and in 2008, The Bryn Mawr Trust Company will continue with the expansion of its retail banking footprint with controlled de novo expansion in the suburban Philadelphia market. The Corporation’s new Ardmore branch was opened on January 15, 2007, with a dedication ceremony honoring long-time employee and former Ardmore resident Harold Thompson. The planned full service West Chester branch is expected to open in the first half of 2008.”

As mentioned in several recent SEC filings, the Corporation has an agreement of sale to sell the property that previously served as the Wynnewood branch location to an independent third party in the first quarter of 2007 for approximately $1.850 million. The book value of the property is approximately $450 thousand.

Non-interest income for the fourth quarter of 2006 was $4.624 million, an increase of $196 thousand or 4.4% compared with $4.428 million in the same period last year. The increase in non-interest income is attributable to an increase in Wealth Management services fee income and other operating income, partially offset by a continued decline in residential mortgage related revenues. Wealth Management assets under management and administration were $2.515 billion at December 31, 2006, compared with $2.248 billion at December 31, 2005.

Non-interest expense for the fourth quarter of 2006 decreased $292 thousand or 3.6% to $7.846 million when compared to the same period last year. This decrease is due to lower incentive compensation and reductions in pension costs, partially offset by increased occupancy, leasing company startup costs, and staffing costs relating to the West Chester loan production office.

Non-interest income for the twelve months ended December 31, 2006, increased $99 thousand or 0.5% to $18.361 million when compared to the same period last year. Wealth Management services fee income increased $883 thousand or 7.7% to $12.422 million in 2006 from $11.539 million in 2005, while other non-interest income categories in the aggregate declined $784 thousand over the same time period, primarily due to lower residential mortgage related revenue.

Non-interest expense for the twelve months ended December 31, 2006, decreased $150 thousand to $31.423 million when compared to the same period last year, primarily due to reductions in incentive compensation, mortgage servicing right amortization and professional fees, partially offset by increased occupancy costs, employee benefit costs, leasing company startup costs and West Chester staffing additions.

On a sequential basis, diluted earnings per share of $0.37 was unchanged and net income of $3.208 million for the quarter ended December 31, 2006, showed a nominal decrease from third quarter 2006 results. Net interest income on a tax equivalent basis for the fourth quarter of 2006 increased $36 thousand or 0.4% compared to the third quarter of 2006 as increased funding costs partially offset incremental interest income. The tax equivalent net interest margin declined to 4.65% in the fourth quarter of 2006 from 4.78% in the third quarter of 2006. The decline in the tax equivalent net interest margin is attributable to the funding of loan growth with wholesale

sources and a continued shift of lower cost core deposits into higher cost certificates of deposit. Management expects these market conditions to continue in 2007, resulting in increased downward pressure on the net interest margin.

Wealth Management services fee income on a sequential basis increased $228 thousand or 7.6% from the third quarter of 2006, as the estate, retirement services and investment management components performed well. Other components of non-interest income declined $167 thousand in the aggregate, primarily from a reduction in residential mortgage related revenues. Overall non-interest expenses increased nominally by $16 thousand to $7.846 million in the fourth quarter of 2006 when compared to the third quarter of 2006.

The Corporation’s Board of Directors declared a quarterly dividend of $0.12 per share, payable March 1, 2007, to shareholders of record as of February 2, 2007.

In conjunction with this release, the Corporation will host a conference call, followed by a question and answer session, on Thursday, January 25th at 4:30 p.m. Eastern Time. Interested parties may participate by calling 973-935-8753 at 4:25 p.m. Eastern Time and referencing conference PIN 8346945. A taped replay of the conference call will be available within two hours of the conclusion of the call and will remain available through February 1, 2007. The number to call for the taped replay is 973-341-3080 and the conference PIN is 8346945.

The conference call will be simultaneously broadcasted live over the Internet through a webcast on the Bryn Mawr Bank Corporation website. To access the call, please visit the website at http://www.bmtc.com/investor_01.cfm. An online archive of the webcast will be available within two hours of the conclusion of the call.

Bryn Mawr Bank Corporation, including its principal subsidiary, The Bryn Mawr Trust Company, which was founded in 1889, has $827 million in corporate assets and $2.5 billion in trust and investment assets under management and administration. Bryn Mawr Bank Corporation stock is publicly held and traded on NASDAQ Global Market under the symbol of BMTC. Bryn Mawr Trust offers a full range of personal and business banking services, consumer and

commercial loans, equipment leasing, mortgages, insurance, and wealth management services, including investment management, trust and estate administration, retirement planning, custody services, and tax planning and preparation. Headquartered in Bryn Mawr, Pennsylvania, Bryn Mawr Trust has eight full-service branches serving residents and businesses in the affluent “Main Line” suburbs of Pennsylvania. It also maintains seven limited service offices located in upscale adult communities.

This release 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 the Corporation’s control, could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. Forward-looking statements speak only as of the date they are made. The Corporation does not undertake to update forward-looking statements.

The accompanying financial statements and reconciliation statement are an integral part of this press release.

# # # #

Bryn Mawr Bank Corporation

Consolidated Selected Financial Data

(Dollars in thousands, except per share data)

December 31, 2006

(unaudited)


			For The Three Months Ended
For the period:	Dec 31, 2006		Sep 30, 2006		Jun 30, 2006		Mar 31, 2006		Dec 31, 2005
Interest income	$	12,446	$	12,017	$	11,098	$	10,345	$	10,235
Interest expense		4,021		3,627		2,795		2,164		1,965

Net interest income		8,425		8,390		8,303		8,181		8,270
Provision for loan and lease losses		211		258		209		154		173

Net interest income after provision for loan and lease losses		8,214		8,132		8,094		8,027		8,097
Fees for wealth management services		3,241		3,013		3,048		3,120		2,946
Loan servicing and late fees		283		271		282		290		304
Service charges on deposits		376		388		397		379		392
Net gain on sale of loans		182		268		254		250		244
Other operating income		542		623		594		560		542

Noninterest income		4,624		4,563		4,575		4,599		4,428
Salaries and wages		3,982		4,109		3,834		3,829		4,183
Employee benefits		951		887		1,131		1,318		999
Occupancy and bank premises		632		636		642		624		571
Furniture fixtures and equipment		481		486		476		482		495
Advertising		238		187		273		200		277
Amortization of mortgage servicing rights		90		88		84		86		92
Professional fees		225		285		209		297		386
Other expenses		1,247		1,152		1,253		1,009		1,135

Noninterest expense		7,846		7,830		7,902		7,845		8,138
Income before income taxes		4,992		4,865		4,767		4,781		4,387
Income tax expense		1,784		1,630		1,630		1,645		1,503

Net income	$	3,208	$	3,235	$	3,137	$	3,136	$	2,884

Per share data:
Weighted average shares outstanding		8,588,820		8,575,170		8,577,365		8,570,675		8,556,250
Dilutive potential common shares		120,792		109,995		113,690		109,837		110,576

Adjusted weighted average dilutive shares		8,709,612		8,685,165		8,691,055		8,680,512		8,666,826
Basic earnings per common share	$	0.37	$	0.38	$	0.37	$	0.37	$	0.34
Diluted earnings per common share	$	0.37	$	0.37	$	0.36	$	0.36	$	0.33
Dividend declared per share	$	0.12	$	0.12	$	0.11	$	0.11	$	0.11

Note: Certain prior period amounts have been reclassified to conform to current period presentation.

Bryn Mawr Bank Corporation

Consolidated Selected Financial Data

(Dollars in thousands, except per share data)

December 31, 2006

(unaudited)


	For The Twelve Months Ended
For the period:	December 31, 2006		December 31, 2005
Interest income	$	45,906	$	37,951
Interest expense		12,607		6,600

Net interest income		33,299		31,351
Provision for loan and lease losses		832		762

Net interest income after provision for loan and lease losses		32,467		30,589
Fees for wealth management services		12,422		11,539
Loan servicing and late fees		1,126		1,303
Service charges on deposits		1,540		1,593
Net gain on sale of loans		954		1,622
Other operating income		2,319		2,205

Noninterest income		18,361		18,262
Salaries and wages		15,754		15,862
Employee benefits		4,287		4,075
Occupancy and bank premises		2,534		2,272
Furniture fixtures and equipment		1,925		1,941
Advertising		898		960
Amortization of mortgage servicing rights		348		606
Professional fees		1,016		1,292
Other expenses		4,661		4,565

Noninterest expense		31,423		31,573
Income before income taxes		19,405		17,278
Income tax expense		6,689		5,928

Net income	$	12,716	$	11,350

Per share data:
Weighted average shares outstanding		8,578,050		8,563,027
Dilutive potential common shares		113,579		101,200

Adjusted weighted average shares		8,691,629		8,664,227
Basic earnings per common share	$	1.48	$	1.33
Diluted earnings per common share	$	1.46	$	1.31
Dividend declared per share	$	0.46	$	0.42

Note: Certain prior period amounts have been reclassified to conform to current period presentation.

Bryn Mawr Bank Corporation

Consolidated Selected Financial Data

(Dollars in thousands, except per share data )

December 31, 2006

(unaudited)


For the period:	2006 4Q			2006 3Q			2006 2Q		2006 1Q		2005 4Q
Asset Quality Data
Nonaccrual loans	$	704		$	794		866		773		390
90 + days past due loans		119			835		794		5		—

Nonperforming loans	$	823		$	1,629		1,660		778		390
OREO		—			—		—		25		25

Nonperforming assets	$	823		$	1,629		1,660		803		415

Allowance for loan losses	$	8,122		$	8,025		7,779		7,571		7,402
Allowance for loan losses / loans		1.19	%		1.20	%	1.22	%	1.25	%	1.24	%
Allowance for loan losses / nonperforming loans		987	%		493	%	469	%	973	%	1,898	%
Nonperforming loans / loans		0.12	%		0.24	%	0.26	%	0.13	%	0.07	%
Nonperforming assets / assets		0.10	%		0.21	%	0.22	%	0.11	%	0.06	%
Net loan charge-offs (recoveries)		114			12		1		(15	)	162
Net loan charge-offs (annualized)/ average loans		0.07	%		0.01	%	NC	*	NC	*	0.11	%

*(NC- Not calculated as there were no significant charge-offs)**

	2006 4Q			2006 3Q			2006 2Q		2006 1Q		2005 4Q
Selected ratios (annualized):
Return on average assets		1.62	%		1.69	%	1.74	%	1.83	%	1.65	%
Return on average shareholders’ equity		15.01	%		15.58	%	15.70	%	16.27	%	15.04	%
Yield on interest earning assets*		6.85	%		6.82	%	6.72	%	6.58	%	6.41	%
Cost of interest bearing funds		2.99	%		2.80	%	2.35	%	1.92	%	1.73	%
Net interest margin*		4.65	%		4.78	%	5.04	%	5.22	%	5.19	%
Tier 1 leverage ratio		11.04	%		11.12	%	11.39	%	11.53	%	11.25	%
Book value per share	$	9.62		$	9.83		9.52		9.29		9.06
Tangible book value per share	$	9.62		$	9.83		9.52		9.29		9.06
Period end shares outstanding		8,562,209			8,575,253		8,575,398		8,575,555		8,556,255
Selected data:
Mortgage loans originated	$	23,030		$	37,860		31,966		34,451		33,146
Mortgage loans sold - servicing retained	$	4,242		$	6,043		3,615		7,010		6,889
Mortgage loans sold - servicing released	$	15,320		$	10,867		13,127		7,436		18,460
Mortgage loans serviced for others	$	382,141		$	385,861		395,091		409,429		417,649
Wealth assets under management / administration	$	2,514,824		$	2,243,595		2,195,258		2,262,064		2,247,630


	2006 Year-to-date			2005 Year-to-date
Selected ratios (annualized):
Return on average assets		1.72	%	1.66	%
Return on average shareholders’ equity		15.65	%	15.44	%
Yield on interest earning assets*		6.74	%	6.09	%
Cost of interest bearing funds		2.55	%	1.47	%
Net interest margin*		4.90	%	5.04	%
Mortgage loans originated	$	127,307		193,324
Mortgage loans sold - servicing retained	$	20,910		41,664
Mortgage loans sold - servicing released	$	46,750		78,537

*	Yield on interest earning assets and net interest margin are calculated on a tax equivalent basis.

Bryn Mawr Bank Corporation

Consolidated Selected Financial Data

(Dollars in thousands)

December 31, 2006

(unaudited)


	As of
Balance Sheet For the period ended:	Dec 31, 2006			Sept 30, 2006			Jun 30, 2006			Mar 31, 2006			Dec 31, 2005
Assets
Interest bearing deposits with banks	$	532		$	544		$	642		$	508		$	405
Fed funds sold		—			—			—			—			32,341
Investment securities		48,232			51,399			45,697			41,488			33,397
Loans held for sale		3,726			7,621			6,369			4,061			2,765
Portfolio loans:
Consumer		9,156			8,848			8,863			9,149			9,437
Commercial & industrial		175,278			177,797			166,442			165,508			170,283
Commercial mortgages		198,407			185,234			178,253			166,816			162,621
Construction		74,798			74,949			65,097			49,375			45,523
Residential mortgages		103,572			107,021			108,820			106,196			99,602
Home equity lines & loans		113,068			112,940			112,157			109,534			107,699
Leases		7,012			316			—			—			—

Total portfolio loans		681,291			667,105			639,632			606,578			595,165
Earning assets		733,781			726,669			692,340			652,635			664,073
Cash and due from		61,473			23,921			27,529			26,132			33,896
Allowance for loan and lease losses		(8,122	)		(8,025	)		(7,779	)		(7,571	)		(7,402	)
Other assets		39,528			40,678			39,392			38,737			36,659

Total assets	$	826,660		$	783,243		$	751,482		$	709,933		$	727,226

Interest-bearing checking	$	143,742		$	128,707		$	134,754		$	142,606		$	154,319
Money market		111,338			112,360			106,401			115,920			112,319
Savings		40,441			41,640			43,303			44,830			46,258
Wholesale deposits		19,976			29,963			34,951			5,000			5,000
Time deposits		200,446			179,712			163,029			148,412			150,322

Interest-bearing deposits		515,943			492,382			482,438			456,768			468,218
Non-interest bearing deposits		198,546			145,872			152,092			151,324			168,042

Total deposits		714,489			638,254			634,530			608,092			636,260
Borrowed funds		15,000			46,300			22,700			8,000			—
Other liabilities		14,788			14,395			12,597			14,171			13,453
Shareholders’ equity		82,383			84,294			81,655			79,670			77,513

Total liabilities and shareholders’ equity	$	826,660		$	783,243		$	751,482		$	709,933		$	727,226


Balance Sheet (average)	2006 4Q			2006 3Q			2006 2Q			2006 1Q			2005 4Q
Assets
Interest bearing deposits with banks	$	500		$	807		$	687		$	439		$	1,176
Fed funds sold		1,291			3,345			1,467			6,161			8,115
Investment securities		51,658			49,103			44,197			37,069			34,501
Loans held for sale		4,312			5,910			3,304			3,217			3,142
Portfolio loans and leases		669,036			645,284			617,627			595,446			591,295

Earning assets		726,797			704,449			667,282			642,332			638,229
Cash and due from		27,030			25,373			24,666			24,332			25,754
Allowance for loan an lease losses		(8,189	)		(7,904	)		(7,686	)		(7,524	)		(7,460	)
Other assets		40,374			37,267			37,803			35,819			35,161

Total assets	$	786,012		$	759,185		$	722,065		$	694,959		$	691,684

Interest-bearing checking	$	129,400		$	132,826		$	140,400		$	141,504		$	141,441
Money market		113,608			109,595			110,710			118,365			117,033
Savings		40,856			42,533			43,738			45,073			46,699
Wholesale deposits		19,957			19,956			1,425			—			—
Time deposits		193,166			187,083			164,803			147,610			143,156

Interest-bearing deposits		496,987			491,993			461,076			452,552			448,329
Non-interest bearing deposits		152,822			149,465			150,586			147,274			152,230

Total deposits		649,809			641,458			611,662			599,826			600,559
Borrowed funds		35,731			21,380			16,738			3,544			1,505
Other liabilities		15,702			13,966			13,487			13,419			13,534
Shareholders’ equity		84,770			82,381			80,178			78,170			76,086

Total liabilities and shareholders’ equity	$	786,012		$	759,185		$	722,065		$	694,959		$	691,684

Bryn Mawr Bank Corporation

Consolidated Selected Financial Data

(Dollars in thousands)

December 31, 2006

(unaudited)


Balance Sheet (average)	2006 Year-to-date			2005 Year-to-date
Assets
Interest bearing deposits with banks	$	609		$	2,398
Fed funds sold		3,053			6,281
Investment securities		46,482			35,918
Loans held for sale		4,333			6,742
Portfolio loans and leases		631,953			575,644

Earning assets		686,430			626,983
Cash and due from		25,358			29,918
Allowance for loan and lease losses		(7,828	)		(7,283	)
Other assets		36,737			33,312

Total assets	$	740,697		$	682,930

Interest-bearing checking	$	136,062		$	146,848
Money market		112,976			120,854
Savings		43,037			49,503
Wholesale deposits		10,473			—
Time deposits		173,271			130,668

Interest-bearing deposits		475,819			447,873
Non-interest bearing deposits		150,042			148,495

Total deposits		625,861			596,368
Borrowed funds		19,442			1,700
Other liabilities		14,136			11,370
Shareholders’ equity		81,258			73,492

Total liabilities and shareholders’ equity	$	740,697		$	682,930

Quarterly Average Balances and Tax Equivalent Income and Expense and Tax Equivalent Yields

4rd Quarter 2006

3rd Quarter 2006

2nd Quarter 2006

1st Quarter 2006

4th Quarter 2005

(dollars in
thousands)

Average
Balance

Interest
Income/
Expense

Average
Rates
Earned/
Paid

Average
Balance

Interest
Income/
Expense

Average
Rates
Earned/
Paid

Average
Balance

Interest
Income/
Expense

Average
Rates
Earned/
Paid

Average
Balance

Interest
Income/
Expense

Average
Rates
Earned/
Paid

Average
Balance

Interest
Income/
Expense

Average
Rates
Earned/
Paid

Assets:

Interest-bearing deposits with other banks

500

5.55

807

5.41

687

4.67

439

4.62

1,176

3.71

Federal funds sold

1,291

5.22

3,345

5.34

1,467

4.92

6,161

4.34

8,115

4.16

Investment securities available for sale:

Taxable

46,618

567

4.83

44,132

503

4.52

39,249

416

4.25

32,055

306

3.87

29,485

250

3.36

Tax-exempt

5,040

4.57

4,971

4.63

4,948

4.78

5,014

4.85

5,016

4.75

Investment securities available for sale

51,658

625

4.80

49,103

561

4.53

44,197

475

4.31

37,069

366

4.00

34,501

310

3.56

Loans and leases

673,348

11,892

7.01

651,194

11,494

7.00

620,931

10,683

6.90

598,663

9,987

6.77

594,436

9,904

6.61

Total interest earning assets

726,797

12,541

6.85

704,449

12,111

6.82

667,282

11,184

6.72

642,332

10,424

6.58

638,228

10,310

6.41

Cash and due from banks

27,030

25,373

24,666

24,332

25,754

Less allowance for loan and lease losses

(8,189

)

(7,904

)

(7,686

)

(7,524

)

(7,460

)

Other assets

40,374

37,267

37,803

35,819

35,162

Total assets

786,012

759,185

722,065

694,959

691,684

Liabilities:

Savings, NOW and market rate deposits

283,864

1,066

1.49

284,954

1,029

1.43

294,848

914

1.24

304,942

821

1.09

305,173

764

0.99

Wholesale deposits

19,957

281

5.59

19,956

278

5.53

1,425

5.63

—

Time deposits

193,166

2,184

4.49

187,083

2,026

4.30

164,803

1,645

4.00

147,610

1,301

3.57

143,156

1,185

3.28

Total interest-bearing deposits

496,987

3,531

2.82

491,993

3,333

2.69

461,076

2,579

2.24

452,552

2,122

1.90

448,329

1,949

1.72

Short term borrowings

35,731

490

5.44

21,380

294

5.46

16,738

216

5.18

3,544

4.81

1,505

4.22

Total interest-bearing liabilities

532,718

4,021

2.99

513,373

3,627

2.80

477,814

2,795

2.35

456,096

2,164

1.92

449,834

1,965

1.73

Noninterest-bearing deposits

152,822

149,465

150,586

147,274

152,230

Other liabilities

15,702

13,966

13,487

13,419

13,534

Total noninterest-bearing liabilities

168,524

163,431

164,073

160,693

165,764

Total liabilities

701,242

676,804

641,887

616,789

615,598

Shareholders’ equity

84,770

82,381

80,178

78,170

76,086

Total liabilities and shareholders’ equity

786,012

759,185

722,065

694,959

691,684

Interest income to earning assets

—

6.85

—

6.82

—

6.72

—

6.58

—

6.41

Net interest spread

3.86

4.02

4.37

4.66

4.68

Effect of noninterest-bearing sources

0.79

0.76

0.67

0.56

0.51

Net interest income/ margin on earning assets

—

8,520

4.65

—

8,484

4.78

—

8,389

5.04

—

8,260

5.22

—

8,345

5.19

Tax equivalent adjustment

0.05

Non-accrual loans are included in the average loan balances.

Average Balances and Tax Equivalent Income and Expense and Tax Equivalent Yields


	For the Twelve Months ended Dec 31,
	2006							2005
(dollars in thousands)	Average Balance			Interest Income/ Expense		Average Rates Earned/ Paid		Average Balance			Interest Income/ Expense		Average Rates Earned/ Paid
Assets:
Interest-bearing deposits with other banks		609			30	4.93	%		2,398			76	3.17	%
Federal funds sold		3,053			146	4.78	%		6,281			210	3.34	%
Investment securities available for sale
Taxable		41,489			1,790	4.31	%		30,848			1,001	3.24	%
Tax-exempt		4,993			237	4.75	%		5,069			244	4.81	%

Investment securities available for sale		46,482			2,027	4.36	%		35,917			1,245	3.47	%
Loans and leases		636,286			44,059	6.92	%		582,386			36,676	6.30	%

Total interest earning assets		686,430			46,262	6.74	%		626,982			38,207	6.09	%
Cash and due from banks		25,358						$	29,918
Less allowance for loan and lease losses		(7,828	)						(7,283	)
Other assets		36,737							33,312

Total assets	$	740,697						$	682,929

Liabilities:
Savings, NOW and market rate deposits	$	292,075		$	3,850	1.32	%	$	317,205		$	2,744	0.87	%
Wholesale deposits		10,473			579	5.53	%		—			—	0.00	%
Time deposits		173,271			7,136	4.12	%		130,667			3,799	2.91	%

Total interest-bearing deposits		475,819			11,565	2.43	%		447,872			6,543	1.46	%
Short term borrowings**		19,442			1,042	5.36	%		1,700			57	3.35

Total interest-bearing liabilities		495,261			12,607	2.55	%		449,572			6,600	1.47	%
Noninterest-bearing deposits		150,042							148,495
Other liabilities		14,136							11,370

Total noninterest-bearing liabilities		164,178							159,865
Total liabilities		659,439							609,437
Shareholders’ equity		81,258							73,492

Total liabilities and shareholders’ equity	$	740,697						$	682,929

Interest income to earning assets		—			—	6.74	%		—			—	6.09	%
Net interest spread						4.19							4.62
Effect of noninterest-bearing sources						0.71							0.42

Net interest income/ margin on earning assets		—		$	33,655	4.90	%		—		$	31,607	5.04	%

Tax equivalent adjustment				$	356	0.05	%				$	256	0.04	%

Non-accrual loans are included in the average loan balances.