Bryn Mawr Bank Corporation Reports a 12.1% Increase in Fourth Quarter Diluted Earnings Per Share.

BRYN MAWR, Pa. -- 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.

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

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

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

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

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