BRYN MAWR BANK CORP (Form: 10-Q, Received: 05/10/2005 15:55:57)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

Quarterly Report Under Section 13 or 15 (d)

of the Securities and Exchange Act of 1934.

For Quarter ended March 31, 2005

Commission File Number 0-15261

Bryn Mawr Bank Corporation

(Exact name of registrant as specified in its charter)

Pennsylvania

23-2434506

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

identification No.)


801 Lancaster Avenue, Bryn Mawr, Pennsylvania		19010
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (610) 525-1700

Not Applicable

Former name, former address and fiscal year, if changed since last report.

Indicate by check whether the registrant (1) has filed all reports to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that 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 ¨

Indicate by check whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act) Yes x No ¨

Indicate the number of shares outstanding of each of the issuer’s class of common stock, as of the latest practicable date.


Class		Outstanding at April 29, 2005
Common Stock, par value $1		8,560,346

BRYN MAWR BANK CORPORATION AND SUBSIDIARIES

FORM 10-Q

QUARTER ENDED March 31, 2005

INDEX


PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Consolidated Financial Statements		Page 1

Notes to Consolidated Financial Statements		Page 5

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	Page 11

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS	Page 26

ITEM 4.	CONTROLS AND PROCEDURES	Page 27

PART II - OTHER INFORMATION		Page 28

ITEM 1.	LEGAL PROCEEDINGS	Page 28

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	Page 29

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	Page 30

ITEM 4.	SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS	Page 30

ITEM 5.	OTHER INFORMATION	Page 30

ITEM 6.	EXHIBITS	Page 30

PART I. FINANCIAL INFORMATION


ITEM 1.		FINANCIAL STATEMENTS

BRYN MAWR BANK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars In Thousands*)

Unaudited


	Three Months Ended March 31
	2005		2004
Interest income:
Interest and fees on loans	$	8,354	$	7,178
Interest on federal funds sold		25		18
Interest on interest bearing deposits with banks		18		6
Interest and dividends on investment securities		274		250

Total interest and dividend income		8,671		7,452

Interest expense on deposits		1,294		1,083
Interest expense on borrowings		9		—

Total interest expense		1,303		1,083

Net interest income		7,368		6,369
Loan loss provision		187		187

Net interest income after loan loss provision		7,181		6,182

Non-interest Income
Fees for trust services		2,610		2,554
Service charges on deposits		395		476
Other service charges, commissions and fees		473		659
Net gain on sale of loans		458		1,372
Net gain on sale of mortgage servicing rights		—		1,073
Other operating income		478		440

Total non-interest income		4,414		6,574

Non-interest expenses:
Salaries and wages		3,507		3,949
Employee benefits		1,141		1,174
Occupancy and bank premises		556		507
Furniture, fixtures, and equipment		460		434
Amortization of mortgage servicing rights		189		193
Other operating expenses		1,531		1,864

Total non-interest expenses		7,384		8,121

Income before income taxes		4,211		4,635
Applicable income taxes		1,409		1,615

Net income	$	2,802	$	3,020

Total basic earnings per share	$	0.33	$	0.35

Total diluted earnings per share	$	0.32	$	0.34

Dividend declared per share	$	0.10	$	0.10

Weighted-average basic shares outstanding		8,591,622		8,643,205
Dilutive potential shares		162,643		200,671

Adjusted weighted-average diluted shares		8,754,265		8,843,876

The accompanying notes are an integral part of the unaudited consolidated financial statements.

*	Except for share and per share data.

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Form 10-Q

BRYN MAWR BANK CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars In Thousands)


	March 31, 2005			December 31, 2004
	(Unaudited)
Assets
Cash and due from banks	$	31,536		$	26,526
Interest bearing deposits with banks		598			15,293
Federal funds sold		7,041			13,423
Investment securities available for sale, at market (amortized cost of $35,722 and $35,654 as of March 31, 2005 and December 31, 2004 respectively)		35,156			35,441
Loans:
Consumer		9,407			10,291
Commercial		183,862			186,923
Real estate		365,265			358,675
Loans held for sale, at fair market value		4,287			8,708

Total loans		562,821			564,597
Less: Allowance for loan losses		(7,125	)		(6,927	)

Net loans		555,696			557,670

Premises and equipment, net		14,442			14,162
Accrued interest receivable		2,884			2,579
Deferred federal income taxes		303			(3	)
Mortgage servicing rights		3,114			3,172
Other assets		12,781			14,683

Total assets	$	663,551		$	682,946

Liabilities

Deposits:
Demand, noninterest-bearing	$	136,276		$	147,236
Savings, NOW, Market Rate		315,473			343,259
Time		131,435			110,470

Total deposits		583,184			600,965

Accrued interest payable		1,474			2,878
Other liabilities		6,983			7,865

Total liabilities		591,641			611,708

Shareholders’ equity
Common stock, par value $1; authorized 25,000,000 shares; issued 11,189,882 and 11,172,582 shares as of March 31, 2005 and December 31, 2004, respectively and outstanding of 8,556,258, and 8,597,958 as of March 31, 2005 and December 31, 2004, respectively		11,190			11,172
Paid-in capital in excess of par value		7,323			7,112
Accumulated other comprehensive income, net of taxes		(518	)		(288	)
Retained earnings		77,121			75,179

		95,116			93,175

Less: Common stock in treasury at cost — 2,633,624 and 2,574,624 shares as of March 31, 2005, December 31, 2004, respectively		(23,206	)		(21,937	)

Total shareholders’ equity		71,910			71,238

Total liabilities and shareholders’ equity	$	663,551		$	682,946

The accompanying notes are an integral part of the unaudited consolidated financial statements.

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Form 10-Q

BRYN MAWR BANK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars In Thousands)

Unaudited


	Three Months Ended March 31
	2005			2004
Operating activities:
Income from operations	$	2,802		$	3,020
Adjustments to income from operations to net cash (used) provided by operating activities:
Provision for loan losses		187			187
Provision for depreciation and amortization		356			331
Loans originated for resale		(38,354	)		(45,613	)
Proceeds from loans sold		34,308			52,142
Gain on sale of loans		(458	)		(1,371	)
Gain on sale of mortgage servicing rights		—			(1,073	)
Provision for deferred income taxes (benefit)		(303	)		(596	)
Change in income taxes payable/refundable		1,215			—
Change in accrued interest receivable		(305	)		(64	)
Change in accrued interest payable		(1,404	)		(100	)
Mortgage servicing rights		58			1,175
Other		33			(155	)

Net cash (used) provided by operating activities		(1,865	)		7,883

Investing activities:
Purchases of investment securities		(1,250	)		(5,508	)
Proceeds from maturity and calls of fixed income securities		1,279			8,693
Loan (originations) repayments, net		6,292			(33,344	)
Purchases of premises and equipment		(608	)		(636	)
Purchase of OREO property		(234	)		—

Net cash (used) provided by investing activities		5,479			(30,795	)

Financing activities:
Net (decrease) increase in demand and savings deposits		(38,746	)		31,942
Net increase in time deposits		20,965			3,403
Dividends paid		(860	)		(865	)
Purchases of treasury stock		(1,269	)		(1,813	)
Proceeds from issuance of common stock		229			230

Net cash (used) provided by financing activities		(19,681	)		32,897

(Decrease) Increase in cash and cash equivalents		(16,067	)		9,985
Cash and cash equivalents at beginning of period		55,242			46,295

Cash and cash equivalents at end of period	$	39,175		$	56,280

Supplemental cash flow information:
Income taxes paid	$	24		$	(629	)
Interest paid	$	2,707		$	1,183

The accompanying notes are an integral part of the unaudited consolidated financial statements.

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Form 10-Q

BRYN MAWR BANK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	(Dollars In Thousands) Unaudited
	Three Months Ended March 31
	2005			2004
Net Income	$	2,802		$	3,020
Other comprehensive income:
Unrealized holding (losses) gains on available-for-sale securities		(353	)		91
Deferred income tax (benefit) expense on unrealized holding (losses) gains on available for sale securities		124			(33	)

Comprehensive net income	$	2,573		$	3,078

The accompanying notes are an integral part of the unaudited consolidated financial statements.

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Form 10-Q

BRYN MAWR BANK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2005 AND 2004

(Unaudited)

1. Basis of Presentation:

The unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. In the opinion of Management, all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the consolidated financial position and the results of operations for the interim period presented have been included. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements notes thereto in the Bryn Mawr Bank Corporation (“Corporation”) 2004 Annual Report on Form 10-K. The Corporation’s consolidated financial condition and results of operations consist almost entirely of The Bryn Mawr Trust Company’s (the “Bank”) financial condition and result of operations.

The results of operations for the three month period ended March 31, 2005 are not necessarily indicative of the results to be expected for the full year.

2. Earnings Per Common Share:

The Corporation follows the provisions of Statement of Financial Accounting Standard (“SFAS”) No. 128, “Earnings per Share”. Basic earnings per share excludes dilution and is computed by dividing income available to common shareholders by the weighted average common shares outstanding during the period. Diluted earnings per share take into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock. All weighted average, actual shares and per share information in these financial statements have been adjusted retroactively for the effect of stock dividends and splits. The reconciliation of the numerators and denominators of the basic and diluted EPS follows:


	Three Months Ended March 31,
	2005		2004
Net Income (in thousands)	$	2,802	$	3,020

Weighted-Average basic shares outstanding		8,591,622		8,643,205
Dilutive potential shares		162,643		200,671

Adjusted weighted-average diluted shares		8,754,265		8,843,876

Basic earnings per share	$	.33	$	.35
Diluted earnings per share	$	.32	$	.34

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Form 10-Q

3. Loan Loss Provision

The loan loss provision charged to operating expenses is driven by a systematic formula and those factors which, in Management’s judgment, deserve current recognition in estimating loan losses including the evaluation of the loan portfolio and the Corporation’s past loan loss experience. The allowance for loan losses is an amount that Management believes will be adequate to absorb losses inherent in existing loans. In addition, the Corporation’s primary regulators, as an integral part of their examination process, may require adjustments to the allowance for loan losses.

4. Stock Based Compensation

The Corporation applies APB Opinion 25 and related interpretations in accounting for its Stock Option Plan. Accordingly, no compensation cost has been recognized for the Stock Option Plan. Had compensation for the Corporation’s Stock Option Plan been determined based on the fair value at the grant date for awards consistent with the optional provisions of SFAS No. 123R, “Accounting for Stock Based Compensation”, the Corporation’s net income and earnings per share would have been reduced in the proforma amounts indicated below:


	For The Three Months Ended March 31:
(in thousands except for per share data)	2005		2004
Net income – as reported	$	2,802	$	3,020
Stock based compensation cost, net of related taxes		92		80

Net income – proforma	$	2,710	$	2,940

Basic earnings per share – as reported	$	0.33	$	0.35
Diluted earnings per share – as reported	$	0.32	$	0.34
Basic earnings per share – proforma	$	0.32	$	0.34
Diluted earnings per share – proforma	$	0.31	$	0.33

The fair value of each option granted is estimated on the date of the grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in the first quarter of 2004: Dividend yield of 1.76%, expected volatility of 21%, expected life of six years and risk-free interest rate of 3.90%. There were no options granted in the first quarter of 2005.

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Form 10-Q

In April of 2005, the Financial Accounting Standards Board (FASB) revised SFAS No. 123(R) “Share Based Payment an Amendment of FASB No. 123 and APB No. 95” that addresses the accounting for share based payment transactions. Prior to this revision, the effective date would have been for fiscal years and interim periods beginning after June 15, 2005. The new effective date is for fiscal years beginning after December 15, 2005. The Corporation will adopt SFAS 123(R) beginning with the first quarter of 2006. It is expected that the adoption of SFAS 123 (R) will reduce net income in 2006 by approximately $180 thousand.

5. Pension and Other Postretirement Benefit Plans

The Corporation sponsors two pension plans and a postretirement benefit plan for certain employees.

The following table provides a reconciliation of the components of the net periodic benefits cost for the three months ended March 31, 2005 and 2004:


	Pension Benefits						Post Retirement Benefits
	2005			2004			2005		2004
Service cost	$	328		$	284		$	6	$	5
Interest cost		416			393			50		47
Expected return on plan assets		(544	)		(484	)		—		—
Amortization of transition obligation		—			—			6		6
Amortization of prior service costs		32			32			—		—
Amortization of net (gain) loss		111			71			50		46

Net periodic benefit cost	$	343		$	296		$	112	$	104

As stated in the Corporation’s 2004 Annual Report, the Corporation does not anticipate any minimum funding requirement for its defined benefit pension plan for 2005 but is expected to contribute approximately $129 thousand to the SERP plan for 2005. As of March 31, 2005, no contributions have been made to either of the pension plans.

6. Segment Information

SFAS No. 131, “Segment Reporting”, identifies operating segments as components of an enterprise which are evaluated regularly by the Chief Executive Officer in deciding how to allocate resources and assess performance. The Corporation has applied the aggregation criterion set forth in SFAS No. 131 to the results of its operations.

The Corporation’s Banking segment consists of commercial and retail banking. The Banking segment is

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Form 10-Q

managed as a single strategic unit which generates revenues from a variety of products and services. The banking segment generates interest income from its lending and investing activities and is dependent on the gathering of lower cost deposits from its branch network for funding, resulting in the generation of net interest income. The Banking segment also derives revenues from other sources including service charges on deposit accounts, overdraft fees and interchange revenue associated with its Visa Check Card offering.

The Wealth Management segment has responsibility for all fiduciary activities within the Corporation, including investment management, trust administration, employee benefit administration, tax services and custodial services. This segment includes revenues and related expenses from an investment management agreement with another community bank.

The Mortgage Banking segment includes the origination of residential mortgage loans and the sale and servicing of such loans to the secondary mortgage market. This segment also includes the Corporation’s title insurance and joint mortgage origination activity with a real estate brokerage organization.

The “All Other” segment includes general corporate activities such as shareholder relations costs, NASDAQ fees and the annual meeting of shareholders. This segment also includes revenues and expenses from the Corporation’s insurance agency activities.

The Banking, Wealth Management, and Mortgage Banking segments consolidate and roll up through the Bank.

Segment information for the three months ended March 31, 2005 and 2004 is as follows:

(Dollars in thousands)


	2005
	Banking			Wealth Management			Mortgage Banking			All Other			Consolidated
Net interest income	$	7,348		$	—		$	—		$	20		$	7,368
Less Loan loss provision		187			—			—			—			187

Net interest income after loan loss provision		7,161			—			—			20			7,181
		—			—			—			—			—

Net interest income after loan loss provision and eliminations		7,161			—			—			20			7,181
Other income:
Fees for investment management and trust services		—			2,610			—			—			2,610
Gain on sale of MSR’s		—			—			—			—			—
Other income		848			45			845			66			1,804

Total other income		848			2,655			845			66			4,414
Other expenses:
Salaries and benefits		3,208			1,127			248			65			4,648
Occupancy		835			154			58			(31	)		1,016
Mortgage servicing rights amortization		—			—			189			—			189
Other operating expense**		1,107			257			129			38			1,531

Total other expense		5,150			1,538			624			72			7,384

Segment profit (loss) before income taxes		2,859			1,117			221			14			4,211
Intersegment (revenues) expenses *		85			45			—			(130	)		—

Segment profit (loss) after eliminations	$	2,944		$	1,162		$	221		$	(116	)	$	4,211

% of segment profit (loss)		70	%		28	%		5	%		(3	)%		100	%

	2004***
	Banking			Wealth Management			Mortgage Banking			All Other			Consolidated
Net interest income	$	6,346		$	—		$	—		$	23		$	6,369
Less Loan loss provision		187			—			—			—			187

Net interest income after loan loss provision		6,159			—			—			23			6,182
		—			—			—			—			—

Net interest income after loan loss provision and eliminations		6,159			—			—			23			6,182
Other income:
Fees for investment management and trust services		—			2,554			—			—			2,554
Gain on sale of MSR’s**		—			—			1,073			—			1,073
Other income		917			37			1,927			66			2,947

Total other income		917			2,591			3,000			66			6,574
Other expenses:
Salaries and benefits		3,229			1,322			491			81			5,123
Occupancy		761			144			64			(28	)		941
Mortgage servicing rights amortization		—			—			193			—			193
Other operating expense**		1,065			270			487			42			1,864

Total other expense		5,055			1,736			1,235			95			8,121

Segment profit (loss) before income taxes		2,021			855			1,765			(6	)		4,635
Intersegment (revenues) expenses *		82			45			—			(127	)		—

Segment profit (loss) after eliminations	$	2,103		$	900		$	1,765		$	(133	)	$	4,635

% of segment profit (loss)		45	%		20	%		38	%		(3	)%		100	%

*-	Intersegment revenues consist of rental payments, insurance commissions and a management fee.

**-	Mortgage Banking segment salaries and benefits and other operating expenses for 2004 include $77 thousand and $188 thousand, respectively of expense related to the sale of mortgage servicing rights (“MSR’s”). No such sale of MSR’s occurred in the first quarter of 2005.

***-	Reclassified for comparative purposes.

7. Mortgage Servicing Rights

Mortgage servicing rights (“MSR’s”) are recorded as an asset when residential mortgages originated by the Corporation are sold with servicing rights retained by the Corporation. MSR’s represent the right to receive cash flows from servicing residential mortgage loans. The MSR’s are capitalized based on the relative fair value of the servicing right on the date the mortgage loan is sold. MSR’s are amortized in proportion to, and over the period of the estimated net servicing income. MSR’s are carried at the lower of cost or estimated fair value. The Corporation obtains an independent appraisal of the fair value of its MSR’s each quarter, which approximates the fair value expected in a sale between a willing buyer and a seller.

MSR’s are assessed quarterly for impairment based on the estimated fair value of those rights. As part of the quarterly impairment valuation, the MSR portfolio is stratified on the basis of certain predominant risk characteristics, including loan type and note rate. To the extent that the carrying value of the MSR’s exceeds estimated fair value for any stratum, a valuation allowance is established, which may be adjusted in the future as the estimated fair value of the MSR’s increase or decrease. This valuation allowance is recognized in the consolidated financial statements during the period in which the impairment occurs.

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Form 10-Q

The following summarizes the Corporation’s activity related to MSR’s for the three months ended March 31, 2005 and 2004:

(In thousands)


	2005			2004
Balance, January 1	$	3,172		$	4,391

Additions		131			417
Amortization		(183	)		(193	)
Impairment		(6	)		—
Sales		—			(1,399	)

Balance, March 31	$	3,114		$	3,216

Fair Value	$	4,395		$	3,475

There was impairment of $6,000 in the MSR’s for the three months ended March 31, 2005. There was no impairment of MSRs nor change in the valuation alowance of MSRs for the three months ended March 31, 2004.

At March 31, 2005, key economic assumptions and the sensitivity of the current fair value of MSR’s to immediate 10 and 20 percent adverse changes in those assumptions are as follows:


(in thousands)	March 31, 2005
Fair value amount of MSR’s	$	4,395
Weighted average life (in years)		4.5
Prepayment speeds (constant prepayment rate) (*):		16.70	%
Impact on fair value:
10% adverse change	$	(270	)
20% adverse change	$	(518	)
Discount rate:		9.55	%
Impact on fair value:
10% adverse change	$	(146	)
20% adverse change	$	(283	)

(*)	represents the weighted average prepayment rate for the life of the MSR asset.

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Form 10-Q

These assumptions and sensitivities are hypothetical and should be used with caution. As the table also indicates, changes in fair value based on a 10% variation in assumptions generally cannot be extrapolated because the relationship of the change in assumptions to the change in fair value may not be linear. Also, the effect of a variation in a particular assumption on the fair value of the MSR’s is calculated without changing any other assumption. In reality, changes in one factor may result in changes in another, which could magnify or counteract the sensitivities.

8. Impaired Loans

The Corporation identifies a loan as impaired when a borrower is deemed to be unable to meet the original terms of a loan. Impaired loans are not necessarily considered non-performing loans. Once a loan is delinquent for 90 days or more, it is considered both a non-performing and an impaired loan. Impaired loans at March 31, 2005 were $1.432 million. Except for certain consumer loans, all loans are placed on nonaccrual status when they become delinquent for 90 days or more and any outstanding accrued interest receivable on such loans is reversed from income. If the loan valuation is less than the recorded value of the loan, an impairment reserve must be established for the difference. As of March 31, 2005, there were no impaired loans for which it was necessary to establish an impairment reserve. The Corporation recognizes income on an impaired loan under the cash basis when the loan is current and the collateral on the loan is sufficient to cover the outstanding obligation to the Corporation. If these factors do not exist, the Corporation will not recognize income on an impaired loan.

9. Capital

The Corporation declared its regular dividend of $0.10 per share, equal with $0.10 per share declared during the first three months of 2004, to shareholders of record on January 21, 2005, payable on March 1, 2005. This payment totaled $860,000. Additionally, a $0.10 per share dividend was declared to shareholders of record on April 19, 2005 payable June 1, 2005.

During the first three months of 2005, the Corporation repurchased 59,000 shares of its common stock for $1,268,480 at an average purchase price of $21.50 per share.

10. New Accounting Pronouncements - Stock Based Compensation

In April of 2005, the FASB revised SFAS No. 123(R) “Share Based Payment an Amendment of FASB No. 123 and APB No. 95”. See Note 4. Stock Based Compensation for additional information.

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Form 10-Q

Item 2

Management’s Discussion and Analysis of Results of Operation and Financial Condition

Special Cautionary Notice Regarding Forward Looking Statements

Certain of the statements contained in this Report and the documents incorporated by reference herein, may constitute forward-looking statements for the purposes of the Securities Exchange act of 1933, as amended and the Securities Exchange Act of 1934, as amended, and may involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of the Corporation to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements include statements with respect to the Corporation’s financial goals, business plans, business prospects, credit quality, credit risk, reserve adequacy, liquidity, origination and sale of residential mortgage loans, impairment of goodwill, the effect of changes in accounting standards, and market and pricing trends. The words “expect,” “anticipate,” “intended,” “plan,” “believe,” “seek,” “estimate,” and similar expressions are intended to identify such forward-looking statements. The Corporation’s actual results may differ materially from the results anticipated by the forward-looking statement due to a variety of factors, including without limitation:

•

the effect of future economic conditions on the Corporation and its customers, including economic factors which affect consumer confidence in the securities markets, wealth creation, investment and savings patterns, and the Corporation’s interest rate risk exposure and credit risk;

•

changes in the securities markets with respect to the market values of financial assets and the stability of particular securities markets;

•

governmental monetary and fiscal policies, as well as legislation and regulatory changes;

•

changes in accounting requirements or interpretations;

•

the risks of changes in interest rates on the level and composition of deposits, loan demand, and the value of loan collateral and securities, as well as interest rate risk;

•

the effects of competition from other commercial banks, thrifts, mortgage companies, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money-market and mutual funds and other institutions operating in the Corporation’s trade market area and elsewhere including institutions operating locally, regionally, nationally and internationally together with such competitors offering banking products and services by mail, telephone, computer and the internet;

•

any extraordinary event

•

the Corporation’s success in continuing to generate new business in its existing markets, as well as its success in identifying and penetrating targeted markets and generating a profit in those markets in a reasonable time;

•

the Corporation’s ability to continue to generate investment results for customers and the ability to continue to develop investment products in a manner that meets customers needs;

•

the Corporation’s timely development of competitive new products and services in a changing environment and the acceptance of such products and services by customers;

•

the Corporation’s ability to originate and sell residential mortgage loans;

•

the accuracy of assumptions underlying the establishment of reserves for loan losses and estimates in the value of collateral, and various financial assets and liabilities and technological changes being more difficult or expensive than anticipated; and

•

the Corporation’s success in managing the risks involved in the foregoing.

All written or oral forward-looking statements attributed to the Corporation are expressly qualified in their entirety by use of the foregoing cautionary statements. All forward-looking statements included in this Report are based upon information presently available, and the Corporation assumes no obligation to update any forward-looking statement.

Brief History of the Corporation

The Bryn Mawr Trust Company (the “Bank”) received its Pennsylvania banking charter in 1889 and is a member of the Federal Reserve System. The Bank is headquartered in Bryn Mawr, PA, a western suburb of Philadelphia. The Bank provides wealth management, community banking, residential mortgage lending and business banking services to its customers through eight full service branches and seven retirement community offices throughout Montgomery, Delaware and Chester counties. In 1986, Bryn Mawr Bank Corporation (the “Corporation”) was formed and on January 2, 1987, the Bank became a wholly-owned subsidiary of the Corporation.

The goal of the Bryn Mawr Trust Company is to become the preeminent community bank and wealth management organization in the Philadelphia area.

Results of Operations

The following is Management’s discussion and analysis of the significant changes in the results of operations, capital resources and liquidity presented in its accompanying consolidated financial statements for the Corporation. The Corporation’s consolidated financial condition and results of operations consist almost entirely of the Bank’s financial condition and results of operations. Current performance does not guarantee, and may not be indicative of similar performance in the future. These are unaudited financial statements and, as such, are subject to year end audit.

Critical Accounting Policies, Judgments and Estimates

The accounting and reporting policies of the Corporation and its subsidiaries conform with accounting principles generally accepted in the United States of America (US GAAP) applicable to the financial services industry. All significant inter-company transactions are eliminated in consolidation and certain reclassifications are made when necessary to conform the previous year’s financial statements to the current year’s presentation. In preparing the consolidated financial statements, Management is required to make estimates and assumptions that affect the reported amount of assets and liabilities as of the dates of the balance sheets and revenues and expenditures for the periods presented. Therefore, actual results could differ from these estimates.

The Corporation considers that the determination of the allowance for loan losses involves a higher degree of judgment and complexity than its other significant accounting policies. The allowance for loan losses is calculated with the objective of maintaining a reserve level believed by Management to be sufficient to absorb estimated probable credit losses. Management’s determination of the adequacy of the allowance is based on periodic evaluations of the loan portfolio and other relevant factors. However, this evaluation is inherently subjective as it requires material estimates, including, among others, expected default probabilities, loss given default, expected commitment usage, the amounts and timing of expected future cash flows on impaired loans, value of collateral, estimated losses on consumer loans and residential mortgages and general amounts for

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Form 10-Q

historical loss experience. The process also considers economic conditions, international events, uncertainties in estimating losses and inherent risks in the loan portfolio. All of these factors may be susceptible to significant change. To the extent actual outcomes differ from Management estimates, additional provisions for loan losses may be required that would adversely impact earnings in future periods.

The Corporation recognizes deferred tax assets and liabilities for the future tax effects of temporary differences, net of operating loss carry forwards and tax credits. Deferred tax assets are subject to Management’s judgment based upon available evidence that future realization is more likely than not. If Management determines that the Company may be unable to realize all or part of net deferred tax assets in the future, a direct charge to income tax expense may be required to reduce the recorded value of the net deferred tax asset to the expected realizable amount.

The Corporation considers the valuation of mortgage servicing rights (MSR’s) to be a critical accounting policy due to the complexity of the quarterly valuation process which is performed by an outside consultant based on data provided by Management. Changes in market interest rates, consumer behavior, demographic trends and other factors influence the value of mortgage servicing rights. See Note 7 in the accompanying unaudited financial statements for additional information.

The Corporation has not substantively changed any aspect of its overall approach in the application of the foregoing policies. There have been no material changes in assumptions or estimation techniques utilized as compared to prior periods.

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Form 10-Q

Executive Overview

The Corporation had net income of $2.802 million for the first quarter of 2005 compared with last year’s first quarter net income of $3.020 million. Diluted earnings per share were $0.32 compared with $0.34 in the same period last year. In the first quarter of 2004, the Corporation sold mortgage servicing rights (MSR’s) that contributed $526 thousand to after tax income and increased diluted earnings per share $0.06. There were no sales of MSR’s in the first quarter of 2005. Net income and diluted earnings per share for the first quarter of 2004 excluding the after tax impact of the MSR’s sale would have been $2.494 million and $0.28 per share respectively. Excluding the impact of the MSR’s sale, 2005 first quarter net income increased $308 thousand or 12.3% and diluted earnings per share increased $0.04 or 14.3% over the same period last year.

Key financial performance ratios for the three months ended March 31, 2005 and 2004 excluding the effect of the MSR are shown in the table below:


	2005			2004
Return on average equity (ROE)		15.94	%		15.02	%
Return on average assets (ROA)		1.70	%		1.64	%
Efficiency Ratio		62.67	%		66.19	%
Net Interest Margin		4.78	%		4.46	%
Diluted Earnings Per Share	$	0.32		$	0.28
Dividend Per Share	$	0.10		$	0.10

See Table 1 below for a reconcilement of GAAP net income, diluted earnings per share, ROE, ROA and efficiency ratio to comparable data that excludes the MSR’s sale. Management believes that the presentation excluding the impact of the sale of MSR’s in the first quarter of 2004 provides useful supplemental information essential to the proper understanding of the operating results of the Corporation’s core business. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures, which may be presented by other companies.

The increase in net income after excluding the impact of the sale of the MSR’s of $308 thousand was due to several factors including an increase in the net interest margin of 32 basis points to 4.78% for the three months ended March 31, 2005 from 4.46% in the same period last year, no increase in the provision for loan losses and control over operating expenses. Partially offsetting these positive influences on net income were reductions in residential mortgage originations and related revenue streams and lower than expected revenues from service charges on deposit accounts.

Asset quality remains strong at March 31, 2005 as nonperforming loans as a percentage of total loans were 25 basis points. This compares with 20 basis points at December 31, 2004 and 7 basis points at March 31, 2004. The allowance for possible loan losses was 1.27% at March 31, 2005 compared with 1.23% at December 31, 2004 and 1.29% at March 31, 2004. The provision for loan losses in the first quarter of 2005 was equal to the $187 thousand provision in the first quarter of 2004.

The Corporation anticipates that year-end 2005 earnings will compare favorably with 2004 results as the Corporation concentrates on core competencies of wealth management, business banking, residential mortgage lending and value added consumer banking.

The following table reconciles GAAP net income, diluted earnings per share, ROE, ROA, and the efficiency ratio to their respective presentation excluding the impact of the MSR’s sale.

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Form 10-Q

Reconcilation of Non-GAAP Information

Three Month Period Ended March 31,

(dollars in thousands except per share data)


	Net Income					Change					Diluted Earnings Per Share					Change
	2005		2004			$			%		2005		2004			$			%
As reported	$	2,802	$	3,020		$	(218	)	(7.2	)%	$	0.32	$	0.34		$	(0.02	)	(5.9	)%
After tax effect of MSR sale ¹		—		(526	)	$	526		—			—	$	(0.06	)		—		—

Adjusted for sale	$	2,802	$	2,494		$	308		12.3	%	$	0.32	$	0.28		$	0.04		14.3	%

¹	MSR gain was calculated as follows:

Revenues of $1.073 million, direct expense of $265 thousand and allocated income taxes of $282 thousand netting to $526 thousand.


	ROE				ROA				Efficiency Ratio
	2005		2004		2005		2004		2005		2004
As reported	15.94	%	18.19	%	1.70	%	1.98	%	62.67	%	62.74	%
After tax effect of MSR sale ¹	—		-3.17	%	—		-0.34	%	—		3.45	%

Adjusted for sale	15.94	%	15.02	%	1.70	%	1.64	%	62.67	%	66.19	%

Net income is affected by five major elements: net interest income, or the difference between interest income earned on loans and investments and interest expense paid on deposit and borrowed funds; the provision for loan losses, or the amount added to the allowance for loan losses to provide reserves for inherent losses on loans; other operating income which is made up primarily of certain fees, trust income, residential mortgage activities and gains and losses from sale of securities; other operating expenses, which consist primarily of salaries, employee benefits and other operating expenses; and income taxes. Each of these major elements will be reviewed in more detail in the following discussion.

Net Interest Income and Related Assets and Liabilities

The rate volume analysis in the table below analyzes changes in net interest income for the three months ended March 31, 2005 over March 31, 2004 by its rate and volume components.

RATE/VOLUME ANALYSES


(in thousands)	Three Months Ended March 31, 2005 Compared to 2004
Increase/(Decrease)	Volume			Rate			Total
Interest Income:
Interest-bearing deposits with other banks	$	1		$	11		$	12
Federal funds sold		(11	)		18			7
Investment securities available for sale		34			(10	)		24
Loans		724			452			1,176

Total interest income		750			469			1,219

Interest expense:
Savings deposits		48			52			100
Time deposits		96			17			113
Short term borrowings		4			3			7

Total interest expense		148			72			220

Interest differential	$	602		$	397		$	999

The table below presents the major asset and liability categories on an average daily basis for the periods presented, along with interest income and expense and key rates and yields.

ANALYSES OF INTEREST RATES AND INTEREST DIFFERENTIAL


	For The Three Months Ended March 31,
	2005							2004
(dollars in thousands)	Average Balance			Interest Income/ Expense		Average Rates Earned/ Paid		Average Balance			Interest Income/ Expense		Average Rates Earned/ Paid
Assets:
Cash and due from banks	$	33,357		$	—	—		$	33,332		$	—	—
Interest-bearing deposits with other banks*		3,147			18	2.32	%		2,881			6	0.84	%
Federal funds sold*		4,415			25	2.30	%		7,964			18	0.91	%
Investment securities available for sale:
Taxable*		30,182			233	3.13	%		25,566			209	3.29	%
Tax-exempt*		5,109			41	3.25	%		5,151			41	3.20	%

Total investment securities		35,291			274	3.15	%		30,717			250	3.27	%

Loans*		567,842			8,354	5.97	%		514,833			7,178	5.59	%
Less allowance for loan losses		(7,058	)		—	—			(6,792	)		—	—

Net loans		560,784			8,354	6.04	%		508,041			7,178	5.67	%
Other assets		32,697			—	—			30,446			—	—

Total assets	$	669,691		$	8,671	—		$	613,381		$	7,452	—

Liabilities:
Demand deposits, noninterest-bearing	$	143,434		$	—	—		$	137,858		$	—	—
Savings deposits**		326,547			562	0.70	%		296,417			462	0.63	%
Time deposits**		117,375			732	2.53	%		101,224			619	2.46	%

Total deposits		587,356			1,294	0.89	%		535,499			1,081	0.81	%
Short term borrowings**		1,250			9	2.92	%		535			2	1.50	%
Other liabilities		9,791			—	—			10,573			—	—

Total liabilities		598,397			1,303	—			546,607			1,083
Shareholders’ equity		71,294			—	—			66,774			—	—

Total liabilities and shareholders’ equity	$	669,691		$	1,303	—		$	613,381		$	1,083	—

Total earning assets*	$	610,695			—	—		$	556,395			—	—
Total interest-bearing liabilities**	$	445,172			—	—		$	398,176			—	—
Interest income to earning assets		—			—	5.76	%		—			—	5.39	%
Interest expense to earning assets		—			—	0.87	%		—			—	0.78	%
Net yield on interest-earning assets		—			—	4.89	%		—			—	4.61	%
Average effective rate paid on interest- bearing liabilities		—			—	1.19	%		—			—	1.09	%
Average effective cost on total deposits and short term borrowings		—			—	0.90	%		—			—	0.81	%
Net interest margin		—			—	4.78	%		—			—	4.46	%
Earning assets to interest-bearing liabilities		—			—	1.37	%		—			—	1.40	%

*	Indicates earning assets.

**	Indicates interest-bearing liabilities.

Net interest income for the first three months of 2005 of $7.368 million was $999 thousand or 15.7% higher than the net interest income for first three months of 2004 of $6.369 million. The analyses above indicate that increased loan volume along with the increase in rates were the primary drivers of the increase in net interest income. Average earning assets increased $54.3 million or 9.8% in the first quarter of 2005 compared to the same period in 2004. Average total loans grew $53.009 million or 10.3% while investments increased $4.574 million or 14.9% over 2004. During the first quarter of 2005, average investments were 5.8% of total earning assets compared to 5.5% during the same period in 2004

The average earning asset yield during the first quarter of 2005 of 5.80% was 40 basis points higher than the 5.40% during the same period in 2004. The rate paid on average deposits and other borrowings of 1.20% in 2005 was higher than the 1.10% in 2004. Average non-interest bearing demand deposits grew 4.0%, while savings and time deposits increased 10.2% and 16.4% respectively.

Net Interest Margin

The net interest margin for the first quarter of 2005 was 4.78%, a 32 basis point increase from the first quarter of 2004 of 4.46%. Net interest margin for the year ended December 31, 2004 was 4.46%. The quarterly net interest margin declined in the second quarter of 2004 compared to the first quarter before starting to recover in the

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Form 10-Q

later part of 2004 as the impact of rising rates started to increase the yield on the Corporation’s variable rate loan portfolio faster than funding costs.

The Corporation anticipates that continued increases in interest rates will have a positive effect on the Corporation’s net interest margin in 2005. However, factors, such as competitive market conditions for deposit and competitive share driven loan pricing could impact the net interest margin.

Interest Rate Sensitivity

The Corporation actively manages its interest rate sensitivity positions. The objectives of interest rate risk management are to control exposure of net interest income to risks associated with interest rate movements and to achieve sustainable growth in net interest income. Management’s Asset Liability Committee (“ALCO”), using policies and procedures approved by the Corporation’s Board of Directors, is responsible for managing the rate interest sensitivity position. The Corporation manages interest rate sensitivity by changing the mix, pricing and repricing characteristics of its assets and liabilities, through the management of its investment portfolio, its offering of loan and deposit terms and through borrowings from the Federal Home Loan Bank (“FHLB”).

The Corporation uses several tools to manage its interest rate risk including interest rate sensitivity analysis (aka “Gap Analysis”), market value of portfolio equity analysis, interest rate simulations under various rate scenarios and net interest margin reports. The results of these reports are compared to limits established by the Corporation’s Asset Liability Management Policies and are in compliance with these policies as of March 31, 2005.

The following table demonstrates the annualized result of an interest rate simulation and the expected effect that a parallel interest rate shift might have on the Corporation’s net income over the next 12 months.

(dollars in thousands)


Change in Interest rates	March 31, 2005 Change In Net Income
	March 31, 2005 Change In Net Income
	$		%
+200 basis points	1,278		11.23
+100 basis points	653		5.74
-100 basis points	(987	)	(8.68	)

The table above indicates that the Corporation’s balance sheet as of March 31, 2005 is asset sensitive meaning that an increase in rates should increase net income and a decline in rates will cause a decline in net income over the next 12 months.

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Form 10-Q

The following table presents the Corporation’s interest rate sensitivity position or Gap Analysis as of March 31, 2005


(dollars in thousands)	0 to 90 Days			90 to 365 Days			1-5 Years			Over 5 Years			Non-Rate Sensitive			Total
Assets:
Interest-bearing deposits with other banks	$	598		$	—		$	—		$	—		$	—		$	598
Federal funds sold		7,041			—			—			—			—			7,041
Investment securities		1,018			6,504			22,258			5,226			150			35,156
Loans		298,063			27,069			189,914			47,775			(7,125	)		555,696
Cash and due from banks		—			—			—			—			31,536			31,536
Other assets		—			—			—			—			33,525			33,525

Total assets	$	306,720		$	33,573		$	212,172		$	53,001		$	58,086		$	663,552

Liabilities and shareholders’ equity:
Demand, noninterest-bearing	$	20,787		$	13,767		$	5,061		$	73,428		$	23,233		$	136,276
Savings deposits		52,234			44,223			168,472			50,544			—			315,473
Time deposits		49,310			55,600			26,416			109			—			131,435
Other liabilities		—			—			—			—			8,458			8,458
Shareholders’ equity		1,804			2,526			3,610			43,326			20,644			71,910

Total liabilities and shareholders’ equity	$	124,135		$	116,116		$	203,559		$	167,407		$	52,335		$	663,552

Gap	$	182,585		$	(82,543	)	$	8,613		$	(114,406	)	$	5,751			—

Cumulative gap	$	182,585		$	100,042		$	108,655		$	(5,751	)		—			—

Cumulative earning assets as a ratio of interest bearing liabilities		302	%		169	%		139	%		135	%		100	%		—

The table above indicates that Corporation is asset sensitive in the immediate to 90 day time frame and should experience an increase in net interest income in the near term if rates rise. The converse is also true.

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Form 10-Q

Provision for Loan Losses

The Corporation uses the reserve method of accounting for credit losses. The balance in the allowance for loan losses is determined based on Management’s review and evaluation of the loan portfolio in relation to past loss experience, the size and composition of the portfolio, current economic events and conditions, and other pertinent factors, including Management’s assumptions as to future delinquencies, recoveries and losses.

Increases to the allowance for loan losses are implemented through a corresponding provision (expense) in the Corporation’s statement of income. Credit exposures deemed to be uncollectible are charged against the allowance for loan losses. Recoveries of previously charged-off amounts are credited to the allowance for loan losses.

While Management considers the allowance for loan losses to be adequate based on information currently available, future additions to the allowance may be necessary due to changes in economic conditions or Management’s assumptions as to future delinquencies, recoveries and losses and Management’s intent with regard to the disposition of loans. In addition, the Pennsylvania Department of Banking and the Federal Reserve Bank of Philadelphia, as an integral part of their examination process, periodically review the Corporation’s allowance for loan losses. The examiners may require the Corporation to recognize additions to the allowance for loan losses based on their judgments about information available to them at the time of their examination.

The Corporation’s allowance for loan losses is the accumulation of various components that are calculated based on various independent methodologies. All components of the allowance for loan losses are estimations. Management bases its recognition and estimation of each allowance component on certain observable data that it believes is the most reflective of the underlying loan losses being estimated. The observable data and accompanying analysis is directionally consistent, based upon trends, with the resulting component amount for the allowance for loan losses. The Corporation’s allowances for loan losses components include the following: historical loss estimation by loan product type and by risk rating within each product type, payment (past due) status, industry concentrations, internal and external variables such as economic conditions. Other factors considered include credit policy, underwriting changes and adequacy of the loan review process.

Industry concentration is recognized as a possible factor in the estimation of loan losses. The Corporation has a material portion of its loans in real estate related loans. Over 60% of the Corporation’s commercial real estate exposure is owner occupied with the balance in investor owned real estate. A predominant percentage of the Corporation’s real estate exposure, both commercial and residential, is in the Corporation’s Philadelphia trade area. No specific loss-related observable data is recognized by Management currently, therefore no specific factor is calculated in the reserve solely for the impact of these concentrations, although management continues to carefully consider relevant data for possible future sources of observable data.

The provision for loan losses for the first three months of 2005 was $187 thousand, unchanged from the same period last year. See Table 7 below for loan and asset quality ratios. Although several of these ratios are slightly higher than prior periods, they reflect favorably compared with industry standards.

Asset quality remains strong at March 31, 2005 as nonperforming loans as a percentage of total loans were 25 basis points. This compares with 20 basis points at December 31, 2004 and 7 basis points at March 31, 2005. The allowance for loan losses as a % of total loans was 1.27% at March 31, 2005 compared with 1.23% at December 31, 2004 and 1.29% at March 31, 2004.

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Form 10-Q

The summary of changes in the allowance is as follows:


	Three Months Ended March 31,						Year Ended December 31,
	2005			2004			2004
Balance, beginning of period	$	6,927		$	6,670		$	6,670
Charge-offs:
Consumer		(2	)		(22	)		(94	)
Commercial and industrial		—			—			(167	)
Real estate		—			—			(431	)

Total charge-offs		(2	)		(22	)		(692	)

Recoveries:
Consumer		5			17			47
Commercial and industrial		8			—			2
Real estate		—			—			—

Total recoveries		13			17			49

Net (charge-offs) / recoveries		11			(5	)		(643	)
Provision for loan losses		187			187			900

Balance, end of period	$	7,125		$	6,852		$	6,927

Analysis of Credit risk

Non performing assets and related ratios


(in thousands)	March 31, 2005			December 31, 2004			March 31, 2004
Non-accrual loans	$	1,301		$	1,087		$	306
Loans 90 day or more past due		92			22			87

Total non performing loans		1,393			1,109			393
Other real estate owned (“OREO”)		591			357			—

Total non performing assets	$	1,984		$	1,466		$	393

Allowance for loan losses to non performing assets		359.1	%		472.5	%		1,743.5	%
Allowance for loan losses to non performing loans		511.5	%		624.6	%		1,743.5	%
Non performing loans to total loans		0.25	%		0.20	%		0.07	%
Allowance for loan losses to total loans		1.27	%		1.23	%		1.29	%
Non performing assets to total assets		0.30	%		0.21	%		0.06	%
Period end loans	$	562,821		$	564,597		$	531,671
Average gross loans	$	567,842		$	538,775		$	514,833
Allowance for loan losses	$	7,125		$	6,927		$	6,852

Although non-performing assets are at March 31, 2005 higher than previous periods, they remain manageable as the allowance for loan losses as a percentage of non-

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Form 10-Q

performing assets was 359% and non-performing loans as a percentage of total loans was 25 basis points. One OREO property was sold in April of 2005, reducing non-performing assets by $360 thousand.

Impaired Loan Detail


(in thousand)	March 31 2005	December 31 2004	March 31 2004
Impaired loans	1,432	1,353	442
Average year to date impaired loans	1,376	798	445
Impaired loans with specific loss allowances	—	—	—
Loss allowances reserved on impaired loans	—	—	—
Year to date income recognized on impaired loans	10	1	—

The Corporation’s policy for interest income recognition on nonaccrual loans is to recognize income under the cash basis when the loans are both current and the collateral on the loan is sufficient to cover the outstanding obligations of the Corporation. The Corporation will not recognize income if these factors do not exist.

Non-Interest Income

Total non-interest income of $4.414 million for the three months ended March 31, 2005 decreased 32.9% or $2.160 million from $6.574 million reported for the same period in 2004. Excluding the gain on the sale of MSR’s of $1.073 million in the first quarter of 2004, non-interest income decreased 19.7% or $1.087 million.

Fees for trust services increased $56 thousand or 2.2% from $2.554 million for the first three months of 2004 to $2.610 million for the same period in 2005. The 2.2% increase is the result of a slight increase in market value and new business, partially offset by the maturing of older trust accounts. The market values of assets under administration increased 5.6% to $1.919 billion as of March 31, 2005 compared with $1.817 billion as of March 31, 2004.

The decline in service charges on deposit accounts of $81 thousand or 17.0% is primarily attributed to lower fees on commercial checking accounts due to the rise in the earnings credit that these customers receive to pay for their services.

There has been a significant decline in residential mortgage activity, particularly the refinancing of higher rate first mortgages, beginning in the second half of 2003, through 2004 and continuing into 2005. This is further supported by the record residential mortgage production in 2002 and 2003 and the subsequent drop-off in volume and the fact that longer term mortgage rates have not increased with the Federal Reserve’s 2004 and 2005 interest rate increases. Management expects continued softness in residential mortgage originations in 2005 when compared to volumes in 2004.

Net gains on the sale of loans were $458 thousand for the first three months of 2005, a 67% decrease from $1.372 million reported for the same quarter in 2004. Residential loan sales amounted to $33.996 million for the first three months of 2005, a 34% decrease from $51.602 million for the same quarter of 2004. The Corporation earned approximately 141 basis points on loans sold for the first three months of 2005 compared to 256 basis points for the same period in 2004.

During the first quarter of 2004, the Bank sold MSR’s relating to $245 million of loans being serviced by the Bank which produced a net gain of $1.073 million before direct expenses of $288 thousand. There was no such gain reported for the first three months of 2005.

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Form 10-Q

Income from other service charges, commissions and fees amounted to $473 thousand for the first three months of 2005, a 28.2% decrease from $659 thousand reported for the first three months of 2004. This decrease is primarily attributed to the reduced fees earned from servicing loans for others. As of March 31, 2005, the Bank serviced $489.882 million in loans for others, a 10.8% decrease from $549.332 million in loans serviced as of March 31, 2004. The decrease is due primarily to the sale of MSR’s in the first quarter of 2004.

Other operating income increased by $38 thousand or 8.6% for the first three months of 2005, to $478 thousand compared with $440 thousand for the same period in 2004. This increase is partially due to the licensing of the Bank’s Sarbanes Oxley (“SOX”) 404 templates to other community banks.

Non-Interest Expense

Total non-interest expense decreased $737 thousand or 9.1% for the first three months of 2005 to $7.384 million from $8.121 million for the first three months of 2004. First quarter non interest expenses, excluding the $265 thousand of expenses associated with the sale of MSR’s, decreased $472 thousand or 6.0% from the first quarter of 2004.

Salaries and wages decreased $442 thousand or 11.2%, from $3.949 million for the three months ended March 31, 2004 to $3.507 million for the same period in 2005.

Approximately 50% of the decrease is due to lower staffing levels and reduced part time and overtime payments. The balance of the decrease is due to lower incentive based payments, compensation relating to sale of the MSR’s and deferrals of costs associated with commercial loan fees. Employee benefits expenses decreased $33 thousand or 2.8% from $1.174 million for the first three months of 2004 to $1.141 million for the same period in 2005. Lower payroll tax costs, partially offset by higher medical insurance premiums, account for the balance of the decrease.

Occupancy expenses increased $49 thousand or 9.7%, and furniture, fixtures and equipment increased $26 thousand or 6.0% primarily due to the opening of the Newtown Square branch in March of 2004. Amortization of MSR’s decreased $4 thousand or 2.1% due to the sale of the MSR’s in 2004 and lower volume of mortgage loan sales in the first quarter of 2005 compared with 2004.

Other operating expenses decreased $333 thousand or 17.9%, from $1.864 million for the first three months of 2004 to $1.531 million for the first three months of 2005. Professional fees, filing fees and other direct costs totaling $188 thousand relating to the sale of MSR’s are included in other operating expenses for the first quarter of 2004. The balance of the decrease is variable expenses associated with the origination and sale of residential mortgages, such as appraisal fees, loan closing costs and loan pair off fees, due to lower mortgage sale activity in the first quarter of 2005 compared with 2004.

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Form 10-Q

Income Taxes

Income taxes from operations for the first three months of 2005 were $1.409 million compared to $1.615 million for the first three months of 2004. This represents an effective tax rate for each three-month period ended March 31, 2005 and 2004 of 33.5% and 34.8%, respectively .

Balance Sheet Analysis

Total assets decreased $19.395 million or 2.8% from $682.946 million at December 31, 2004 to $663.551 million as of March 31, 2005. A decrease in overnight investments of approximately $21 million was the primary cause of the decline in assets over the three month period ended March 31, 2005. The decline in overnight investments was the result of deposit outflows due to year end seasonality and daily balance fluctuations. Loan balances declined slightly by $1.776 million or 0.3% to $562.821 million. Market value of investment balances declined 0.8% to $35.156 million.

Total deposits decreased $17.781 million or 3.3% to $583.184 million as of March 31, 2005 from $600.965 million as of December 31, 2004. A more meaningful measurement of deposit change is the change in average outstanding deposit balances. Total average deposit balances of $587.356 million for the period ended March 31, 2005 increased $51.857 million or 9.7% from the $535.499 million for the same period in 2004.

Due to the highly competitive nature of the financial services business in the Philadelphia area, the Corporation anticipates that interest bearing accounts will make up a greater share of total deposits than they historically have. Certificates of deposit specials and higher rate interest bearing accounts are needed to attract and retain today’s more educated, rate sensitive customer.

The Corporation holds notes receivable totaling $1.205 million from the purchaser of the assets of JWR&Co. These notes bear interest at 6.00% and have various payments and due dates. The balance on these notes was $1.286 million at December 31, 2004 and $ 1.332 million at March 31, 2004. Management anticipates that these notes will be collected in accordance with the terms of the notes. See discussion of discontinued operations and critical accounting policies in Management’s discussion and analysis of the Corporation’s 2004 Form 10-K for additional information. These notes are included on the Corporation’s consolidated balance sheet in commercial loans.

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Form 10-Q

Capital

Total consolidated shareholders equity of the Corporation was $71.910 million or 10.8% of total assets, as of March 31, 2005, compared to $71.238 or 10.4% of total assets, as of December 31, 2004 and $68.012 million or 10.6% of total assets of March 31, 2004. The following table presents the Corporation’s and Bank’s capital ratios and the minimum capital requirements to be considered “Well Capitalized” by bank regulators as of March 31, 2005 and December 31, 2004:


	Ratio		Minimum Ratio to be Well Capitalized
March 31, 2005:
Total (Tier II) Capital to Risk Weighted Assets
Consolidated	12.58	%	8	%
Bank	11.51	%	8	%
Tier I Capital to Risk Weighted Assets
Consolidated	11.45	%	4	%
Bank	10.37	%	4	%
Leverage Ratio (Capital to Total Assets)
Consolidated	10.52	%	4	%
Bank	9.80	%	4	%

December 31, 2004:
Total (Tier II) Capital to Risk Weighted Assets
Consolidated	12.33	%	8	%
Bank	11.09	%	8	%
Tier I Capital to Risk Weighted Assets
Consolidated	11.24	%	4	%
Bank	9.99	%	4	%
Leverage Ratio (Capital to Total Assets)
Consolidated	10.43	%	4	%
Bank	9.26	%	4	%

Both the Corporation and the Bank exceed the required capital levels to be considered “Well Capitalized” by their respective regulators at the end of each period presented.

Neither the Corporation nor the Bank are under any agreement with regulatory authorities, nor is management aware of any current recommendations by the regulatory authorities, which, if such recommendations were implemented, would have a material effect on liquidity, capital resources or operations of the Corporation.

Liquidity

The Corporation manages its liquidity position on a daily basis as part of the daily settlement function and monthly as part of the asset liability management process. The Bank’s liquidity is maintained by managing its core deposits as the primary source, and purchasing federal funds, selling loans in the secondary market, borrowing from the FHLB and selling securities as its secondary sources. Availability with the FHLB was approximately $172 million as of March 31, 2005. Overnight Fed Funds lines consist of lines from five banks totaling $28.5 million. Quarterly, ALCO reviews the Corporation’s liquidity needs and reports its findings to the Risk Management Committee of the Bank’s Board of Directors. As of March 31, 2005, the Bank did not have any funds borrowed from the FHLB or in overnight Fed Funds.

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Form 10-Q

OFF BALANCE SHEET RISK

The Corporation is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the loan agreement. Total commitments to extend credit at March 31, 2005 were $278.741 million.

Standby letters of credit are conditional commitments issued by the Bank to a customer for a third party. Such standby letters of credit are issued to support private borrowing arrangements. The credit risk involved in issuing standby letters of credit is similar to that involved in granting loan facilities to customers. The Corporation’s obligation under standby letters of credit at March 31, 2005 amounted to $9.483 million.

Estimated fair values of the Corporation’s off-balance sheet instruments are based on fees and rates currently charged to enter into similar loan agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. Since fees and rates charged for off-balance sheet items are at market levels when set, there is no material difference between the stated amount and the estimated fair value of off-balance sheet instruments.

The following table details the contractual cash obligations of the Corporation as of March 31, 2005:

(In thousands)


	Total		Within 1 Year		2 - 3 Years		4 - 5 Years		After 5 Years
Deposits without a stated maturity	$	451,749	$	451,749
Consumer certificates of deposit	$	131,435		104,910		25,912		504		109
Operating leases		11,133		690		1,139		1,140		8,164
Purchase obligations		2,920		1,524		955		391		50
Non-discretionary pension contributions		—		—		—		—		—

Total	$	597,237	$	558,873	$	28,006	$	2,035	$	8,323

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Form 10-Q

Section 404 of Sarbanes Oxley Act of 2002

The Corporation and its Management completed compliance procedures relating to Section 404 of the Sarbanes Oxley Act of 2002 (SOX 404) for the fiscal year ended December 31, 2004 as documented in the Corporation’s Form 10-K. Management will again devote considerable effort in 2005 to comply with all aspects of SOX 404 while attempting to restrain related costs of compliance. Consulting and professional fees relating to this compliance amounted to approximately $470 thousand for 2004.

Other Information

Opening of New Full Service Branch Offices in Newtown Square and Exton

During the first quarter of 2004, the Bank established a new full service branch office in Newtown Square, Pennsylvania, thereby enabling the Bank to both broaden and strengthen its footprint in Delaware County, Pennsylvania. This new branch had deposits of $21.439 million at March 31, 2005. In March of 2005, the Bank established a new full service branch in Exton, Pennsylvania.

Pending Legislation

Management is not aware of any other current specific recommendations by regulatory authorities or proposed legislation which, if they were implemented, would have a material adverse effect upon the liquidity, capital resources, or results of operations, although the general cost of compliance with numerous and multiple federal and state laws and regulations does have, and in the future may have, an impact on the corporation’s results of operations.

Effects of Inflation

Inflation has some impact on the Corporation’s operating costs. Unlike many industrial companies, however, substantially all of the Corporation’s assets and liabilities are monetary in nature. As a result, interest rates have a more significant impact on the Corporation’s performance than the general level of inflation. Over short periods of time, interest rates may not necessarily move in the same direction or in the same magnitude as prices of goods and services.

Effect of Government Monetary Policies

The earnings of the Corporation are and will be affected by domestic economic conditions and the monetary and fiscal policies of the United States government and its agencies. An important function of the Federal Reserve is to regulate the money supply and interest rates. Among the instruments used to implement those objectives are open market operations in United States government securities and changes in reserve requirements against member bank deposits. These instruments are used in varying combinations to influence overall growth and distribution of bank loans, investments, and deposits, and their use may also affect rates charged on loans or paid for deposits.

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Form 10-Q

The Corporation is a member of the Federal Reserve and, therefore, the policies and regulations of the Federal Reserve have a significant effect on its deposits, loans and investment growth, as well as the rate of interest earned and paid, and are expected to affect the Corporation’s operations in the future. The effect of such policies and regulations upon the future business and earnings of the Corporation cannot be predicted.

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Form 10-Q

Item 3.

BRYN MAWR BANK CORPORATION AND SUBSIDIARIES

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT

MARKET RISKS

There has been no material change in the Corporation’s assessment of its sensitivity to market risks since its presentation in the 2004 Annual Report and Form 10-K filed with the Securities and Exchange Commission (“SEC”).

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Form 10-Q

Item 4.

BRYN MAWR BANK CORPORATION AND SUBSIDIARIES

CONTROLS AND PROCEDURES

As of the end of the period covered by the report, the Corporation carried out an evaluation, under the supervision and with the participation of the Corporation’s management, including the Corporation’s Chief Executive Officer, Frederick C. Peters II, and Chief Financial Officer, J. Duncan Smith, of the effectiveness of the design and operation of the Corporation’s disclosure controls and procedures as defined in the Exchange Act Rules 13a-15(e) and 15d-15(e). Based upon the evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Corporation’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Corporation (including its consolidated subsidiaries) required to be included in the Corporation’s periodic SEC filings.

There have not been any changes in the Corporation’s internal control over financial reporting during the quarter ended March 31, 2005 that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

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Form 10-Q

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None

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Form 10-Q

Item 2. Changes in Securities and Use of Proceeds and Issuer Purchase of Equity Securities

During the first quarter of 2005, the Corporation maintained, and continues to maintain, one stock repurchase program. The following table presents the repurchasing activity of this program during the first quarter of 2005:


Period	Total Number of shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plan or Programs
Month # 1 January 1, 2005 – January 31, 2005	10,000	$	21.25	10,000	124,494
Month # 2 February 1, 2005 – February 29, 2005	10,000	$	22.16	10,000	114,494
Month # 3 March 1, 2005 – March 31, 2005	39,000	$	21.39	39,000	75,494

Total	59,000	$	21.50	59,000	75,494

Notes to this table:

(a)

On October 17, 2002 the Board of Directors of the Corporation authorized a new stock repurchase program, effective in January 2004. This stock repurchase program is the only stock repurchase program presently in effect (the “Program”). This Program was publicly announced in a press release, also issued on October 17, 2002.

(b)	The Corporation was authorized to repurchase an amount of Corporation stock, not to exceed the lesser of $7,500,000 or 4% of the then outstanding shares of common stock, which, after the effect

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Form 10-Q

of the two-for-one stock split, effective October 1, 2004, amounted to 348,094 shares. During 2005, under the Program, the Corporation repurchased 59,000 shares of Corporation stock, having an average cost of $21.50 per share.

(c)	There is no expiration date on the Program.

(d)	No stock repurchase programs expired during the first quarter of 2005.

(e)	The Corporation presently has no plans for an early termination of the Program.

(f)	All shares were purchased through the Program and were accomplished in open-market transactions.

Item 3. Defaults Upon Senior Securities

None

Item 4. Submission of Matters to Vote of Security Holders

None

Item 5. Other Information

None

Item 6. Exhibits

a) Exhibits


Exhibit 10.1 -		Summary of 2005 Base Salaries and Cash Bonus Awards for 2004 to Named Executive Officers.

Exhibit 10.2 -		Form of Non-Qualified Stock Option Agreement Subject to the 2004 Stock Option Plan for Non-employee Directors

Exhibit 10.3 -		Form of Key Employee Non-Qualified Stock Option Agreement Subject to The 2004 Stock Option Plan

Exhibit 10.4 -		Form of Executive Change of Control Severance Agreement

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Form 10-Q


Exhibit 31.1 -		Certification of the Chief Executive Officer Pursuant to Exchange Act Rule 13a-14(a) or Rule 15d-14(a).

Exhibit 31.2 -		Certification of the Chief Financial Officer Pursuant to Exchange Act Rule 13a-14(a) or Rule 15d-14(a).

Exhibit 32.1 -		Certification of the Chief Executive Officer Pursuant to 18 Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

Exhibit 32.2 -		Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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Form 10-Q

Signatures

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.


	Bryn Mawr Bank Corporation

Date: May 10, 2005	By:	/s/ Frederick C. Peters II
		Fredrick C. Peters II
		President & Chief Executive Officer

Date: May 10, 2005	By:	/s/ J Duncan Smith
		J. Duncan Smith
		Treasurer and Chief Financial Officer

Index to Exhibits

a) Exhibits


Exhibit 10.1 -		Summary of 2005 Base Salaries and Cash Bonus Awards for 2004 to Named Executive Officers.

Exhibit 10.2 -		Form of Non-Qualified Stock Option Agreement Subject to the 2004 Stock Option Plan for Non-employee Directors

Exhibit 10.3 -		Form of Key Employee Non-Qualified Stock Option Agreement Subject to the 2004 Stock Option Plan

Exhibit 10.4 -		Form of Executive Change of Control Severance Agreement

Exhibit 31.1 -		Certification of the Chief Executive Officer Pursuant to Exchange Act Rule 13a-14(a) or Rule 15d-14(a).

Exhibit 31.2 -		Certification of the Chief Financial Officer Pursuant to Exchange Act Rule 13a-14(a) or Rule 15d-14(a).

Exhibit 32.1 -		Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.2 -		Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

EXHIBIT 10.1

Summary of 2005 Base Salaries Payable to Named Executive Officers

and Cash Bonuses Awarded to Named Executive Officers for 2004

On January 14, 2005 and February 8, 2005, the Compensation Committees of the Boards of Directors of the Corporation and its subsidiary, The Bryn Mawr Trust Company (the “Bank”), set the base salaries to be paid to the Corporation’s Named Executive Officers for 2005. The base salaries represent increases from 3% to 4% over the Named Executive Officers previously effective base salaries. At the same time, the Compensation Committees awarded cash bonuses for 2004. The bonuses awarded to Mr. Peters and Mr. Pickering were required by their agreements with the Corporation and the Bank. Mr. Keefer’s bonus was based on an incentive program for 2004. The bonuses awarded to the other Named Executive Officers were to recognize the individual efforts of those Named Executive Officers in 2004.


Name and Principal Position	2005 Base Salary		2004 Cash Bonus
Frederick C. Peters II Chairman, President & CEO	$	320,282	$	20,000

Robert J. Ricciardi Executive Vice President – Chief Credit Policy Officer & Secretary	$	170,470	$	8,000

John Pickering Executive Vice President – Wealth Management Division	$	197,125	$	50,000

Alison E. Gers Executive Vice President – Administration & Operations	$	167,530	$	9,000

Joseph Keefer Executive Vice President – Chief Lending Officer	$	154,536	$	20,000

Exhibit 10.2

BRYN MAWR BANK CORPORATION

NON-QUALIFIED STOCK OPTION AGREEMENT

SUBJECT TO THE 2004 STOCK OPTION PLAN

FOR NON-EMPLOYEE DIRECTORS

AGREEMENT, dated as of , 20 by and between BRYN MAWR BANK CORPORATION (the “Corporation”) and , a non-employee director (“Director”) of the Corporation (the “Optionee” or “you”).

1. This Agreement is subject to the terms and conditions of the Bryn Mawr Bank Corporation 2004 Stock Option Plan (the “Plan”) as approved by the Board of Directors of the Corporation on January 15, 2004 and by the Corporation’s shareholders on April 20, 2004. Any references or definitions contained herein shall, except as otherwise specified herein, be construed in accordance with the terms and conditions of the Plan. On , 20 , the Corporation’s Compensation Committee granted the Optionee certain options, described in Section 4 hereof, to purchase its common stock (the “stock”) at Dollars and Cents ($ ) a share, the market price of the stock on , 20 .

2. Subject to the terms and conditions of the Plan and those set forth herein, this Agreement confirms the grant to the

Optionee of the option to purchase shares of stock at the price of Dollars and Cents ($ ) per share.

3. The purpose of granting directors, officers and other key employees options pursuant to the Plan is to attract, retain and reward them, to increase their stock ownership and their identification with the Corporation’s interests, and to enhance the value of the Corporation over the long-term for the shareholders. In return for granting this option to you, please acknowledge by signing below at the end of this Agreement that you have read the entire Agreement, including the stock forfeiture and termination provisions in this Section 3 and Sections 6 and 8 and that you agree as follows:

a. Forfeiture of Option Gain and Unexercised Options If You Engage in Certain Activities . The provisions of this subsection 3(a) will apply to all options granted to you under the Plan. If, at any time within (i) the ten (10) year term of this option, or (ii) two (2) years after termination of leaving your directorship with the Corporation, or (iii) two (2) years after you exercise any portion of this option whichever is later, you engage in any activity inimical, contrary or harmful to the interests of the Corporation including, but not limited to (a) conduct related to your directorship for which either criminal or civil penalties against you may be brought, (b) violation of the Corporation’s policies including, without limitation, the

Corporation’s insider trading policy, (c) soliciting of any customer of the Corporation for business which would result in such customer terminating their relationship with the Corporation; soliciting or inducing any individual who is an employee or director of the Corporation to leave the Corporation or otherwise terminate their relationship with the Corporation, (d) disclosing or using any confidential information or material concerning the Corporation, or (e) participating in a hostile takeover attempt, then (1) this option shall terminate effective as of the date on which you engage in such activity, unless terminated sooner by operation of another term or condition of this Agreement or the Plan, and (2) any option gain realized by you from exercising all or a portion of this option shall be paid by you to the Corporation on the day you engage in such activity.

b. Right of Setoff . By accepting this Agreement, you consent to deduction to the extent permitted by law, from any amounts that the Corporation owes you from time to time (including amounts owed to you as wages or other compensation, fringe benefits, or paid time-off pay, as well as any other amounts owed to you by the Corporation), the amounts you owe the Corporation under subsection a. above. Whether or not the Corporation elects to make any setoff in whole or in part, if the Corporation does not recover by means of setoff the full amount you owe it, calculated as set forth above, you agree to immediately pay the unpaid balance to the Corporation.

c. Compensation Committee Discretion. You may be released from your obligations under subsections a. and b. of this Section 3 only if the Compensation Committee of the Board of Directors (the “Compensation Committee”), or its duly appointed agent determines in its sole discretion that such action is in the best interest of the Corporation.

4. Each Option granted under the Plan shall vest at the rate of percent ( %) of the initially awarded option per year, commencing with the vesting of the first installment one (1) year after the date of the grant of the option and succeeding installments on the anniversaries, respectively, of the date of the grant of the option. Notwithstanding any other provisions of this Agreement, in the event of a Change of Control or your death, Disability or Retirement, the option that has been awarded to you shall immediately vest, unless, prior to death, Disability or Retirement, you violated the option forfeiture provisions of Sections 3, 6 and 8 of this Agreement or your option becomes null and void because of termination of your directorship, as provided in subsections 7.4(c) and (d) of the Plan.

5. The option may be exercised upon vesting but in no event after , 20 . Each option shall be exercised by the Optionee delivering to the Treasurer of the Corporation written notice specifying the number of shares that the Optionee then desires to purchase and the option price

thereof, together with cash, a check for an amount in United States dollars to the order of the Corporation or shares of Corporation stock equal to the option price of the shares the Optionee desires to purchase and, any applicable withholding tax obligations as described in Section 12 hereof or a combination of Corporation stock and United States dollars, subject to the restriction of Section 7.7(c) of the Plan.

The Corporation may then require that there be presented to and filed with it a written representation by the Optionee that it is then the Optionee’s intention to acquire the shares to be purchased for investment and not with a view to their distribution. In such event, no shares shall be issued or transferred to the Optionee unless and until the Corporation is satisfied with the correctness of such representation.

As soon as practicable after receipt by the Corporation of such written notification and payment and, if required by the Corporation, the Optionee’s representation of the intent to acquire for investment, the Corporation shall, subject to the requirements of Section 13 hereof, issue or transfer to the Optionee the number of shares of stock with respect to which such option shall have been so exercised and shall deliver to the Optionee a certificate or certificates evidencing such shares, registered in the Optionee’s name.

6. Each Option shall expire ten (10) years from its date of grant, but shall be subject to earlier termination as follows:

In the event an Optionee shall cease to be a Director for reasons other than death, Disability or Retirement, each then vested option may only be exercised within ninety (90) days after such Optionee shall cease to be a Director or within the option period, whichever is earlier.

In the event of the termination of an Optionee’s directorship by reason of death, Disability or Retirement, the then outstanding options of such Optionee shall thereupon vest and become exercisable for a period of one (1) year after such Optionee’s death, Disability or Retirement. A deceased Optionee’s options that are still exercisable shall be exercised within one (1) year of the date of the Optionee’s death by the estate of such Optionee or by a person or persons whom the Optionee has designated in a writing filed with the Corporation, or, if no such designation has been made, by the person or persons to whom the Optionee’s rights have passed by will or the laws of descent and distribution.

In the event an Optionee shall cease to be a Director for reasons other than death, Disability or Retirement, each then unvested Option to purchase shares shall be null and void immediately upon termination of the Optionee’s directorship and may not be exercised.

In the event of termination for Cause of an Optionee’s service as a Director, such Optionee’s unexercised vested options and unvested options to purchase shares of stock shall be null and void immediately upon termination of the Optionee’s service and may not be exercised.

In the event that while an Optionee is a Director or after an Optionee ceases to be a Director, such Optionee engages in any of the conduct described in Sections 3 or 8 hereof, then, subject to the discretion of the Compensation Committee, that Optionee shall forfeit the right to exercise options and be required to pay the Corporation the option gains as described in Section 3 hereof.

The Corporation’s Board of Directors Compensation Committee may, in extenuating circumstances, alter the exercise provisions outlined in this Agreement including specifically this Section 6 or Sections 3 or 8 hereof.

7. The term “Corporation” as used in this Agreement with reference to employment shall include employment with any of the subsidiaries of the Corporation. The term “subsidiary” as used in this Agreement shall mean any subsidiary of the Corporation as defined in the Plan. The term “confidential information” as used

in this Agreement includes, but is not limited to, records, lists, and knowledge of Corporation’s clients, methods of operation, processes, trade secrets, methods of determination of prices, prices or fees, financial condition, profits, sales, net income, and indebtedness, as the same may exist from time to time. Whenever the word “Optionee” is used in any provision of this Agreement under circumstances where the provision should logically be construed to apply to the estate, or personal representative or duly appointed legal guardian, to whom this option may be transferred by will or by the laws of descent and distribution, it shall be deemed to include such person.

8. The options are not transferable by the Optionee otherwise than by will or the laws of descent and distribution and, during the lifetime of the Optionee, the option shall be exercisable only by the Optionee. No assignment or transfer of this option whether voluntary or involuntary, by operation of law or otherwise, except by will or the laws of descent and distribution, shall vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon any attempt to assign or transfer this option the same shall terminate and be of no force or effect.

9. Anything in this Agreement to the contrary notwithstanding, the Optionee hereby agrees not to exercise this option, and that the Corporation will not be obligated to issue any shares to the Optionee hereunder, if the exercise hereof or

the issuance or transfer of such shares shall constitute a violation by the Optionee or the Corporation of any provisions of any law or regulation of any governmental authority. Any determination in this connection by the Compensation Committee shall be final, binding and conclusive. The Corporation shall in no event be obliged to register any securities pursuant to the Securities Act of 1933 (as now in effect or as hereafter amended) or to take any other affirmative action in order to cause the exercise of the option or the issuance or transfer of shares pursuant thereto to comply with any law or regulation of any governmental authority.

10. Any notice which either party hereto may be required or permitted to give to the other shall be in writing, and may be delivered personally or by mail, postage prepaid, addressed as follows: to the Corporation, Attention: Treasurer, at its office at 801 Lancaster Avenue, Bryn Mawr, PA 19010 or to the Optionee at her/his address on the records of the Corporation or at such other address as the Corporation, or Optionee, may designate in writing from time to time to the other party hereto.

11. Neither the action of the Corporation or the shareholders, nor any action taken by the Compensation Committee under the Plan nor any provisions of this Agreement shall be construed as giving to the Optionee the right to be retained as a director of the Corporation.

12. The Corporation may require, as a condition to the delivery of certificates for shares of stock issued pursuant to the exercise of any option, that the Optionee pay to the Corporation any federal, state or local taxes of any kind required by law to be withheld with respect to any grant or any delivery of shares. The Corporation and any of its subsidiaries including, without limitation, The Bryn Mawr Trust Company, to the extent permitted or required by law, shall have the right to deduct from any payment of any kind (including retainer or director fees) otherwise due to an Optionee any federal, state or local taxes of any kind required by law to be withheld with respect to any option grant or to the delivery of shares under the Plan, or to retain or sell, without notice, a sufficient number of the shares to be issued to such Optionee to cover any such taxes, provided that the Corporation shall not sell any such shares if such sale would be considered a sale for purposes of Section 16 of the Securities Exchange Act of 1934, as amended.

13. Upon a partial exercise of any option granted pursuant to this Agreement, the Optionee hereby agrees, at the request of the Corporation’s Treasurer, to return this Agreement to the Corporation so that a statement may be placed upon the Agreement by the Treasurer confirming the partial exercise by the Optionee of the option granted by this Agreement.

14. The provisions of this Agreement shall be construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to the conflict of law provisions of any jurisdiction.

IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed by a duly authorized officer, and the Optionee has hereunto set his/her hand and seal, all as of the day and year first above written.


BRYN MAWR BANK CORPORATION

By:


		(Signature of Optionee)

		(Print Name of Optionee)

		(Address of Optionee)

Exhibit 10.3

BRYN MAWR BANK CORPORATION

KEY EMPLOYEE

NON-QUALIFIED STOCK OPTION AGREEMENT

SUBJECT TO THE 2004 STOCK OPTION PLAN

AGREEMENT, dated as of , 20 by and between BRYN MAWR BANK CORPORATION (the “Corporation”) and (the “Optionee” or “you”).

2. Subject to the terms and conditions of the Plan and those set forth herein, this Agreement confirms the grant to the Optionee of the option to purchase shares of stock at the price of Dollars and Cents ($ ) per share.

a. Forfeiture of Option Gain and Unexercised Options If You Engage in Certain Activities . The provisions of this subsection 3(a) will apply to all options granted to you under the Plan. If, at any time within (i) the ten (10) year term of this option, or (ii) two (2) years after termination of leaving your employment with the Corporation, or (iii) two (2) years after you exercise any portion of this option whichever is later, you engage in any activity inimical, contrary or harmful to the interests of the Corporation including, but not limited to (a) conduct related to your employment for which either criminal or civil penalties against you may be brought, (b) violation of the Corporation’s policies including, without limitation, the Corporation’s insider trading policy, (c) soliciting of any

customer of the Corporation for business which would result in such customer terminating their relationship with the Corporation; soliciting or inducing any individual who is an employee of the Corporation to leave the Corporation or otherwise terminate their relationship with the Corporation, (d) disclosing or using any confidential information or material concerning the Corporation, or (e) participating in a hostile takeover attempt, then (1) this option shall terminate effective as of the date on which you engage in such activity, unless terminated sooner by operation of another term or condition of this Agreement or the Plan, and (2) any option gain realized by you from exercising all or a portion of this option shall be paid by you to the Corporation on the day you engage in such activity.

c. Compensation Committee Discretion . You may be released from your obligations under subsections a. and b. of this Section 3 only if the Compensation Committee of the Board of Directors (the “Compensation Committee”), or its duly appointed agent determines in its sole discretion that such action is in the best interest of the Corporation.

4. Each Option granted under the Plan shall vest at the rate of thirty three and percent ( %) of the initially awarded option per year, commencing with the vesting of the first installment one (1) year after the date of the grant of the option and succeeding installments on the anniversaries, respectively, of the date of the grant of the option. Notwithstanding any other provisions of this Agreement, in the event of a Change of Control or your death, Disability or Retirement, the option that has been awarded to you shall immediately vest, unless, prior to death, Disability or Retirement, you violated the option forfeiture provisions of Sections 3, 6 and 8 of this Agreement or your option becomes null and void because of termination of your employment, as provided in subsections 7.4(c) and (d) of the Plan.

States dollars to the order of the Corporation or shares of Corporation stock equal to the option price of the shares the Optionee desires to purchase and, any applicable withholding tax obligations as described in Section 12 hereof or a combination of Corporation stock and United States dollars, subject to the restriction of Section 7.7(c) of the Plan. The Corporation may then require that there be presented to and filed with it a written representation by the Optionee that it is then the Optionee’s intention to acquire the shares to be purchased for investment and not with a view to their distribution. In such event, no shares shall be issued or transferred to the Optionee unless and until the Corporation is satisfied with the correctness of such representation.

6. Each Option shall expire ten (10) years from its date of grant, but shall be subject to earlier termination as follows:

In the event an Optionee shall cease to be an Employee for reasons other than death, Disability or Retirement, each then vested option may only be exercised within ninety (90) days after such Optionee shall cease to be an Employee or within the option period, whichever is earlier.

In the event of the termination of an Optionee’s employment by reason of death, Disability or Retirement, the then outstanding options of such Optionee shall thereupon vest and become exercisable for a period of one (1) year after such Optionee’s death, Disability or Retirement. A deceased Optionee’s options that are still exercisable shall be exercised within one (1) year of the date of the Optionee’s death by the estate of such Optionee or by a person or persons whom the Optionee has designated in a writing filed with the Corporation, or, if no such designation has been made, by the person or persons to whom the Optionee’s rights have passed by will or the laws of descent and distribution.

In the event an Optionee shall cease to be an employee for reasons other than death, Disability or Retirement, each then unvested Option to purchase shares shall be null and void immediately upon termination of the Optionee’s employment and may not be exercised.

In the event of termination for Cause of an Optionee’s service as an employee, such Optionee’s unexercised vested options and unvested options to purchase shares of stock shall be null and void immediately upon termination of the Optionee’s service and may not be exercised.

In the event that while an Optionee is an employee or after an Optionee ceases to be an employee, such Optionee engages in any of the conduct described in Sections 3 or 8 hereof, then, subject to the discretion of the Compensation Committee, that Optionee shall forfeit the right to exercise options and be required to pay the Corporation the option gains as described in Section 3 hereof.

lists, and knowledge of Corporation’s clients, methods of operation, processes, trade secrets, methods of determination of prices, prices or fees, financial condition, profits, sales, net income, and indebtedness, as the same may exist from time to time. Whenever the word “Optionee” is used in any provision of this Agreement under circumstances where the provision should logically be construed to apply to the estate, or personal representative or duly appointed legal guardian, to whom this option may be transferred by will or by the laws of descent and distribution, it shall be deemed to include such person.

violation by the Optionee or the Corporation of any provisions of any law or regulation of any governmental authority. Any determination in this connection by the Compensation Committee shall be final, binding and conclusive. The Corporation shall in no event be obliged to register any securities pursuant to the Securities Act of 1933 (as now in effect or as hereafter amended) or to take any other affirmative action in order to cause the exercise of the option or the issuance or transfer of shares pursuant thereto to comply with any law or regulation of any governmental authority.

12. The Corporation may require, as a condition to the delivery of certificates for shares of stock issued pursuant to

the exercise of any option, that the Optionee pay to the Corporation any federal, state or local taxes of any kind required by law to be withheld with respect to any grant or any delivery of shares. The Corporation and any of its subsidiaries including, without limitation, The Bryn Mawr Trust Company, to the extent permitted or required by law, shall have the right to deduct from any payment of any kind (including salary or bonus) otherwise due to an Optionee any federal, state or local taxes of any kind required by law to be withheld with respect to any option grant or to the delivery of shares under the Plan, or to retain or sell, without notice, a sufficient number of the shares to be issued to such Optionee to cover any such taxes, provided that the Corporation shall not sell any such shares if such sale would be considered a sale for purposes of Section 16 of the Securities Exchange Act of 1934, as amended.

14. The provisions of this Agreement shall be construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to the conflict of law provisions of any jurisdiction.


BRYN MAWR BANK CORPORATION

By:


		(Signature of Optionee)

		(Print Name of Optionee)

		(Address of Optionee)

Exhibit 10.4

THE BRYN MAWR TRUST COMPANY

EXECUTIVE CHANGE-OF-CONTROL

SEVERANCE AGREEMENT

This Agreement made as of between The Bryn Mawr Trust Company, a Pennsylvania financial institution, subject to the provisions of the Pennsylvania Banking Code of 1965, as amended (the “Company”), and (the “Employee”).

WHEREAS, the Employee is presently employed by the Company as its ;

WHEREAS, the Company considers it essential to foster the employment of well qualified key management personnel, and, in this regard, the board of directors of the Company recognizes that, as is the case with many financial institutions, the possibility of a change of control of the Company’s publicly held parent company, Bryn Mawr Bank Corporation, (“BMBC”) may exist and that such possibility, and the uncertainty and questions which it may raise among the Company’s management, may result in the departure or distraction of key management personnel to the detriment of the Company and ultimately to the detriment of BMBC and its shareholders;

WHEREAS, the Boards of directors of the Company and BMBC have determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of key members of the Company’s management to their assigned duties, without distraction in the face of potentially disturbing circumstances arising from the possibility of a change of control of the BMBC, although no such change is now contemplated; and

WHEREAS, in order to induce the Employee, a key member of the Company’s management, to remain in the employ of the Company, the Company agrees that the Employee shall receive the compensation and benefits set forth in this Agreement in the event his/her employment with the Company is terminated subsequent to a “Change of Control” (as defined in Section 1 hereof) of BMBC, as a cushion against the financial and career impact on the Employee of any such Change of Control;

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements hereinafter set forth and intending to be legally bound hereby, the parties hereto agree as follows:

1. Definitions . For all purposes of this Agreement, the following terms shall have the meanings specified in this Section, unless the context clearly otherwise requires:

(a) “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations issued under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

(b) “AIP” shall mean any Annual Incentive Plan of the Company, as in effect immediately prior to a change of Control, or predecessor or prior plan, including BMBC’s Thrift and Savings Plan and the Company’s annual bonus plan.

(c) “Base Salary” shall mean the total cash remuneration earned by the Employee on an annualized basis in all capacities with the Company and its Subsidiaries, including, without limitation, any amounts the payment of which has been deferred by the Employee, excluding only payments earned by or allocated to the Employee under the AIP.

(d) A Person shall be deemed the “Beneficial Owner” of any securities:

(i) that such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights, rights, warrants or options, or otherwise; provided , however , that a Person shall not be deemed the “Beneficial Owner” of securities tendered pursuant to a tender or exchange offer made by such Person or any of such Person’s Affiliates or Associates until such tendered securities are accepted for payment, purchase or exchange;

(ii) that such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has the right to vote or dispose of or has “beneficial ownership” of (as determined pursuant to Rule 13d-3 of the General Rules and Regulations issued under the Exchange Act), including without limitation pursuant to any agreement, arrangement or understanding, whether or not in writing; provided , however , that a Person shall not be deemed the “Beneficial Owner” of any security under this subsection (ii) as a result of an oral or written agreement, arrangement or understanding to vote such security if such agreement, arrangement or understanding (A) arises solely from a revocable proxy given in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable provisions of the General Rules and Regulations issued under the Exchange Act, and (B) is not then reportable by such Person on Schedule 13D under the Exchange Act (or any comparable or successor report); or

(iii) that are beneficially owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with which such Person (or any of such Person’s Affiliates or Associates) has any agreement, arrangement or understanding (whether or not in writing) for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described in the proviso to subsection (ii) above) or disposing of any voting securities of BMBC; provided , however , that nothing in this Section 1(d) shall cause a Person engaged in business as an underwriter of securities to be the “Beneficial Owner” of any securities acquired through such Person’s participation in good faith in a firm commitment underwriting until the expiration of forty (40) days after the date of such acquisition.

(e) “Board” shall mean the board of directors of the Company or BMBC as the context of this Agreement indicates.

(f) “Change of Control” shall be deemed to have taken place if (i) any Person (except BMBC, any Subsidiary of BMBC, any employee benefit plan of BMBC or the Company, any Person or entity organized, appointed or established by BMBC or any Subsidiary of BMBC for or pursuant to the terms of any such employee benefit plan) together with all Affiliates and Associates of such Person, shall become the Beneficial Owner in the aggregate of 25% or more of the common stock of BMBC then outstanding, or (ii) during any twenty-four month period, individuals who at the beginning of such period constituted the Board of BMBC or the Company cease, for any reason, to constitute a majority thereof, unless the election, or the

nomination for election by BMBC’s or the Company’s shareholders, as the case may be, of each director who was not a director at the beginning of such period was approved by a vote of at least two-thirds of the directors in office at the time of such election or nomination, who were directors at the beginning of such period.

(g) “Common Stock” shall mean the outstanding common stock of BMBC.

(h) “Pension Plan” shall mean the BMBC non-contributory pension plan and the amended pension plan which covers eligible employees of the Company.

(i) “Person” shall mean any individual, firm, corporation, partnership or other entity.

(j) “Stock Plan” shall mean (i) BMBC’s 1986 Stock Option and Stock Appreciation Rights Plan, as amended and restated; (ii) BMBC’s 1998 Stock Option Plan; (iii) BMBC’s 2004 Stock Option Plan, and (iv) any other stock option plan, stock option and stock appreciation rights plan, stock bonus plan, stock grant plan, or similar benefit plan established by BMBC and which exists for the benefit of the Employee at the time of a Change in Control.

(k) “Subsidiary” shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations issued under the Exchange Act.

(l) “Termination Date” shall mean the date of receipt of the Notice of Termination described in Section 2 hereof or any later date specified therein, as the case may be.

(m) “Termination of Employment” shall mean the termination of the Employee’s actual employment relationship with the Company.

(n) “Termination upon a Change of Control” shall mean a Termination of Employment upon or within two (2) years after a Change of Control either:

(i) initiated by the Company for any reason other than (x) the Employee’s continuous illness, injury or incapacity for a period of six consecutive months or (y) for “cause,” which shall mean misappropriation of funds, habitual insobriety, substance abuse, conviction of a crime involving moral turpitude, or gross negligence in the performance of his/her duties, which gross negligence has had a material adverse effect on the business, operations, assets, properties or financial condition of the Company and its Subsidiaries or BMBC and its Subsidiaries taken as a whole; or

(ii) initiated by the Employee following one or more of the following occurrences:

(A) a significant reduction by the Company or BMBC (if the Employee is an officer of BMBC) of the authority, duties or responsibilities of the Employee immediately prior to the Change of Control;

(B) any removal of the Employee from his/her officer position with BMBC, the Company and its Subsidiaries held by him/her immediately prior to the Change of Control, except in connection with promotions to higher office;

(D) revocation or any modification of the AIP or Stock Plan, or any action taken pursuant to the terms of either plan, which

materially (x) reduces the opportunity to receive compensation under any or both of such plans of equivalent amounts received by the Employee during the three (3) fiscal years immediately preceding the Change of Control, subject to the right of the Boards of Directors of BMBC or the Company, as appropriate, to establish in a manner consistent with past practice, prior to the Change of Control, reasonable goals under the AIP or Stock Plan, (y) reduces the compensation payable to the Employee under either or both of such plans but which does not effect comparable reductions in the compensation payable to the other participants in such plans, or (z) increases the compensation payable to other participants in either or both of such plans but which does not effect corresponding increases in the amount of compensation payable to the Employee;

(E) termination or modification of BMBC’s Pension Plan or Supplemental Employee Retirement Plan, in each case as such plans are in effect immediately prior to the Change of Control, which materially reduces (x) the retirement benefits provided by such plans, or (y) the funding thereof provided by the Pension Plan or by any trust established by BMBC to fund benefits provided by the Supplemental Employee Retirement Plan;

(F) a transfer of the Employee, without his/her express written consent, to a location which is outside the Greater Philadelphia area (or the general area in which his/her principal place of

business immediately preceding the Change of Control may be located at such time, if other than Bryn Mawr, Pennsylvania), or which is otherwise an unreasonable commuting distance from the Employee’s principal residence at the date of the Change of Control;

(G) the Employee being required to undertake business travel to an extent substantially greater than the Employee’s business travel obligations immediately prior to the Change of Control; or

(H) any failure of the Company to comply with and satisfy Section 13 of this Agreement.

2. Notice of Termination . Any Termination upon a Change of Control shall be communicated by a Notice of Termination to the other party hereto given in accordance with Section 14 hereof. For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) briefly summarizes the facts and circumstances deemed to provide a basis for termination of the Employee’s employment under the provision so indicated, and (iii) if the termination date is other than the date of receipt of such notice, specifies the termination date (which date shall not be more than 15 days after the giving of such notice).

3. Severance Compensation upon Termination . Subject to the provisions of Section 10 hereof, in the event of the Employee’s Termination upon a Change of Control, the Company shall pay to the Employee, within fifteen (15) days after the Termination Date (or as soon as possible thereafter in the event that the procedures set forth in paragraph (b) of Section 11 hereof cannot be completed within fifteen (15) days) an amount in cash equal to ( ) times the sum of the Employee’s Base Salary in effect either immediately prior to the Termination of Employment or immediately prior to the Change of Control, whichever is higher.

4. Other Payments . Subject to the provisions of Section 10 hereof, in the event of the Employee’s Termination upon a Change of Control, the Company shall:

(a) pay to the Employee within fifteen (15) days after the Termination date:

(i) unless the Employee has exercised such options, an amount equal to the excess, if any, of the aggregate fair market value of the shares of BMBC’s Common Stock subject to all stock options outstanding and unexercised as of the Termination Date, whether vested or unvested, granted to the Employee under the Stock Plan, over the aggregate exercise price of all such stock options. For purposes of this paragraph, fair market value shall mean the highest of (x) the closing price of BMBC’s Common Stock on the last business day the Common Stock was traded immediately preceding the Termination Date, if such Common Stock is publicly traded at such date, (y) if such Common Stock is not publicly traded at the Termination date, the value determined by an independent appraiser, such appraiser to be selected by the Employee and to be reasonably satisfactory to the Company (the fees and expenses of such appraiser to be borne by the Company), or (z) the highest per share price of BMBC’s Common Stock paid (in connection with the Change of Control or at any time thereafter) by the Person or group whose acquisition of shares of Common Stock of BMBC has given rise to a Change of Control;

(ii) to the extent not theretofore paid, the Employee’s Base Salary through the Termination Date and a further amount equal to the Employee’s salary in lieu of his/her unused vacation pay, if any, both calculated at the salary rate in effect on the Termination Date, or, if higher, at the highest rate in effect at any time within the 90-day period preceding the Termination Date;

(iii) to the extent not theretofore paid, an amount equal to all awards earned by the Employee under the AIP in respect of completed plan periods prior to the Termination Date (including all amounts the payment of which was previously deferred under such plans and interest thereon from the date of each such deferral to the date of payment at the maximum rate provided by such plans or any gain or increase in value obtained on investments in such plans), in each case without regard to any provisions set forth in such plans to the contrary. In the event that the Company’s financial statements for any fiscal years, included in such plan periods, have not yet been completed at the Termination Date, the Company’s shall pay to the Employee the amounts due hereunder as soon as possible thereafter;

(iv) payment in respect of the AIP for the uncompleted fiscal year during which Termination of Employment occurs determined by multiplying the amount determined in Section 3(a)(ii) by a fraction, the numerator of which shall be the number of days between the Termination Date and the last day of the last full fiscal year prior to the Termination Date and the denominator of which shall be Three Hundred Sixty Five (365); and

(b) to the extent permitted by applicable law, continue or cause to be continued until ( ) whole months after the Termination Date, on the cost-sharing basis in effect immediately prior to the Change of Control, medical, dental, life and disability insurance benefits substantially equivalent in all material respects to those furnished by the Company to the Employee immediately prior to the Change of Control; provided , however , that the obligation of the Company to provide such benefits shall cease at such time as the Employee is employed on a full-time basis by a Person not owned or controlled by the Employee that provides the Employee, on substantially the same cost-sharing basis between the Company and the Employee in effect immediately prior to the Change of Control, with medical, dental, life and disability insurance benefits substantially equivalent in all material respects to those furnished by the Company and its Subsidiaries to the Employee immediately prior to the Change of Control;

(c) for both vesting and benefit calculation purposes, credit the Employee with ( ) additional “year of credited service” (as defined in BMBC’s Pension Plan) under BMBC’s Pension Plan and Supplemental Employee Retirement Plan in addition to the years of credited service that would have otherwise been calculated by reference solely to the Termination Date, it being understood that benefits in respect of the ( ) additional year of credited service shall be paid to the Employee under the Supplemental Employee Retirement Plan, and that BMBC shall, to the extent necessary to provide the Employee the additional benefits intended hereby, amend the Supplemental Employee Retirement Plan or create such supplemental retirement plans as may be necessary; and

(d) pay for reasonable career counseling services provided by Manchester Partners International or any such equivalent agency satisfactory to both the Company and the Employee.

5. Establishment of Trust . Immediately upon a Change of Control as herein defined, the Company shall establish an irrevocable trust fund pursuant to a trust agreement to hold assets to satisfy its obligations hereunder. Funding of such trust fund shall be subject to the Company’s discretion, as to be set forth in the agreement pursuant to which the trust fund will be established.

6. Enforcement .

(a) In the event that the Company shall fail or refuse to make payment of any amounts due the Employee under Sections 3 and 4 hereof within the respective time periods provided therein, the Company shall pay to the Employee, in addition to the payment of any other sums provided in this Agreement, interest, compounded daily, on any amount remaining unpaid from the date payment is required under Section 3, 4 or 5, as appropriate, until paid to the Employee, at the prime rate published daily in the Wall Street Journal, each change in such rate to take effect on the effective date of the change in such prime rate.

(b) It is the intent of the parties hereto that the Employee not be required to incur any expenses associated with the enforcement of his/her rights under this Agreement by arbitration, litigation or other legal action because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Employee hereunder. Accordingly, the Company shall pay the Employee on demand the amount necessary to reimburse the Employee in full for all expenses (including all attorneys’ fees and legal expenses) incurred by the Employee in enforcing any of the obligations of the Company under this Agreement.

7. No Mitigation . The Employee shall not be required to mitigate the amount of any payment or benefit provided for in this Agreement by seeking other employment or otherwise.

8. Nonexclusivity of Rights . Nothing in this Agreement shall prevent or limit the Employee’s continuing or future participation in or rights under any benefit, bonus, incentive or other plan or program provided by BMBC, the Company or any of its Subsidiaries or Affiliates and for which the Employee may qualify; provided , however , that if the Employee becomes entitled to and receives all of the payments provided for in this Agreement, the Employee agrees to waive his/her right to receive payments under any severance plan or program applicable to all employees of the Company.

9. No Set-Off . The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Company may have against the Employee or others and the Company hereby agrees not to exercise any such rights with respect to payment due the Employee pursuant to this Agreement.

10. Certain Reduction of Payments .

(a) Anything in this Agreement to the contrary notwithstanding, in the event that it shall be determined as set forth herein that any payment or distribution by the Company to or for the benefit of the Employee, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a “Payment”), would constitute an “excess parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and that it would be economically advantageous to the Employee to reduce the Payment to avoid or reduce the taxation of excess parachute payments under Section

4999 of the Code, the aggregate present value of amounts payable or distributable to or for the benefit of the Employee pursuant to this Agreement (such payments or distributions pursuant to this Agreement are hereinafter referred to as “Agreement Payments”) shall be reduced (but not below zero) to the Reduced Amount. The “Reduced Amount” shall be an amount expressed in present value which maximizes the aggregate present value of Agreement Payments without causing any Payment to be subject to the taxation under Section 4999 of the Code. For purposes of this Section 10, present value shall be determined in accordance with Section 280G(d)(4) of the Code.

(b) All determinations to be made under this Section 10 shall be made, in writing, by KPMG LLP, or the Company’s independent certified public accountant immediately prior to the Change of Control, if other than KPMG LLP, (the “Accounting Firm”), which firm shall provide its determinations and any supporting calculations in writing to both the Company and the Employee within ten (10) days of the Termination Date. Any such determination by the Accounting Firm shall be binding upon the Company and the Employee. The Employee shall in his/her sole discretion determine which and how much of the Agreement Payments shall be eliminated or reduced consistent with the requirements of this Section 10. Within five (5) days after the Employee’s determination, the Company shall pay (or cause to be paid) or distribute (or cause to be distributed) to or for the benefit of the Employee such amounts as are then due to the Employee under this Agreement.

(c) As a result of the uncertainty in the application of Section 280G of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Agreement Payments, as the case may be, will have been made by the Company which should not have been made (“Overpayment”) or that additional Agreement Payments which have not

been made by the Company could have been made (“Underpayment”), in each case, consistent with the calculations required to be made hereunder. Within two (2) years after the Termination of Employment, the Accounting Firm shall review the determination made by it pursuant to the preceding paragraph. In the event that the Accounting Firm determines that an Overpayment has been made, any such Overpayment shall be treated for all purposes as a loan to the Employee which the Employee shall repay to the Company together with interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code (the “Federal Rate”); provided , however , that no amount shall be payable by the Employee to the Company if and to the extent such payment would not reduce the amount which is subject to taxation under Section 4999 of the Code. In the event that the Accounting Firm determines that an Underpayment has occurred, any such Underpayment shall be promptly paid by the Company to or for the benefit of the Employee together with interest thereon at the Federal Rate.

(d) All of the fees and expenses of the Accounting Firm in performing the determinations referred to in paragraphs (b) and (c) above shall be borne solely by the Company. The Company agrees to indemnify and hold harmless the Accounting Firm of and from any and all claims, damages and expenses of any nature resulting from or relating to its determinations pursuant to paragraphs (b) and (c) above, except for claims, damages or expenses resulting from the gross negligence or willful misconduct of the Accounting Firm.

11. Settlement of All Disputes .

(a) The Employee and the Company acknowledge that the Compensation Committee of the Company’s Board intends to review and approve a schedule indicating a method of calculating certain payments to be made to the Employee hereunder in the event of a Termination upon a Change of Control. In the event that the compensation plans referred to

herein change prior to a Change of Control, the Compensation Committee of the Company’s Board may, prior to such Change of Control, revise the schedule to reflect such changes. The method of calculation set forth on such schedule, as so revised prior to a Change of Control, shall be followed by the parties hereto unless manifestly unfair to the Employee.

(b) In the event of any dispute, controversy or claim arising out of or relating to any provision of this Agreement or the Employee’s Termination upon a Change of Control, the Company shall appoint as the sole and exclusive arbiter of such dispute, controversy or claim, a committee composed of two persons who were members of the Company’s Board at any time within five (5) years prior to the Change of Control (which persons may, but need not be, directors of the Company at the time of such dispute, controversy or claim); provided , however , that no person shall be eligible to serve thereon who (i) is at the Termination Date, or shall have been at any time within one year prior thereto, an executive officer of the Company, or (ii) shall be or have been at any time related in any manner to or otherwise affiliated with, or was first nominated by, the corporation, Person or group whose acquisition of shares of Common Stock of BMBC has given rise to a Change of Control. The decision of such committee and the award of any monetary judgment or other relief by such committee shall be final and binding upon the Employee and the Company, and shall not be subject to appeal. Judgment may be entered upon the decision and award of such committee by the Employee or the Company in any court of competent jurisdiction. The Company shall pay the persons selected pursuant to this subsection a reasonable fee for their services, and shall reimburse such persons for their expenses incurred in this capacity. In addition, the Company shall, to the maximum extent permitted by law, indemnify and hold harmless such persons of and from any and all claims, damages or expenses of any nature whatsoever relating to or arising from their activities in this capacity.

(c) In the event that the Company shall be unable to appoint the committee referred to in paragraph (b) above after good faith efforts to do so, or in the event that such committee cannot reach a unanimous agreement, any remaining dispute, controversy or claim arising out of or relating to any provision of this Agreement or the Employee’s Termination upon a Change of Control shall be settled by arbitration in the City of Philadelphia, in accordance with the commercial arbitration rules then in effect of the American Arbitration Association, before a panel of three (3) arbitrators, two (2) of whom shall be selected by the Company and the Employee, respectively, and the third of whom shall be selected by the other two arbitrators. Each arbitrator selected as provided herein is required to be or have been a director or an executive officer of a corporation whose shares of common stock were listed during at least one year of such service on the New York Stock Exchange or the American Stock Exchange or quoted on the National Association of Securities Dealers Automated Quotations System. Any award entered by the arbitrators shall be entered thereon by any party in accordance with applicable law in any court of competent jurisdiction. This arbitration provision shall be specifically enforceable. The fees of the American Arbitration Association and the arbitrators and any expenses relating to the conduct of the arbitration shall be paid by the Company.

(d) The party or parties challenging the right of the Employee to the benefits of this Agreement shall in all circumstances have the burden of proof.

12. Term of Agreement . The term of this Agreement shall be for ( ) years from the date hereof and shall automatically be extended for additional one-year periods unless written notice of termination of this Agreement is provided to the Employee by the Company at least one year prior to the expiration of the initial ( ) year term or any one-year renewal period; provided , however , that (i) after a Change of Control during the term of this Agreement,

this Agreement shall remain in effect for a period of two (2) years and until all of the obligations of the parties hereunder are satisfied or have expired, and (ii) this Agreement shall terminate if, prior to the Change of Control, the employment of the Employee with the Company or any of its Subsidiaries shall terminate for any reason whatsoever.

13. Successor Company . The Company shall require any Person who acquires the majority of the Common Stock of the Company or BMBC or any successor or successors thereof (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company or BMBC, by agreement, in form and substance satisfactory to the Employee, to acknowledge expressly, in writing, that this Agreement is binding upon and enforceable against the Company or BMBC or any successor or successors thereto in accordance with the terms hereof and the instrument of transfer, and to become jointly and severally obligated with the Company to perform this Agreement, in the same manner and to the same extent that the Company would be required to perform this Agreement if no such acquisition purchaser, merger consolidation, succession or successions had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement. As used in this Agreement, the Company shall mean the Company as hereinbefore defined and any such successor or successors to its business and/or assets, jointly and severally.

14. Notice . All notices and other communications required or permitted hereunder or necessary or convenient in connection herewith shall be in writing and shall be delivered personally or mailed by registered or certified mail, return receipt requested, or by overnight express courier service, as follows:

If to the Company, to:

Corporate Secretary

The Bryn Mawr Trust Company

801 Lancaster Avenue

Bryn Mawr, PA 19010

If to the Employee, to:

_____________________________

or to such other names or addresses as the Company or the Employee, as the case may be, shall designate by notice to the other party hereto in the manner specified in this Section. Any such notice shall be deemed delivered and effective when received in the case of personal delivery, five (5) days after deposit, postage prepaid, with the U.S. Postal Service in the case of registered or certified mail, or on the next business day in the case of overnight express courier service.

15. Governing Law . This Agreement shall be governed by and interpreted under the laws of the Commonwealth of Pennsylvania without giving effect to any conflict of laws provisions.

16. Contents of Agreement, Amendment and Assignment .

(a) This Agreement supersedes all prior agreements and sets forth the entire understanding between the parties hereto with respect to the subject matter hereof and cannot be changed, modified, extended or terminated except upon written amendment executed by the Employee and approved by the Board and executed on the Company’s behalf by a duly authorized officer. The provisions of this Agreement may provide for payments to the Employee under certain compensation or bonus plans (including without limitation the AIP and Stock Plan) under circumstances where such plans would not provide for payment thereof. It is the specific intention of the parties that the provisions of this Agreement shall supersede any provisions to the contrary in such plans, and such plans shall be deemed to have been amended to correspond with this Agreement without further action by the Company or the Boards of BMBC or the Company.

(b) Nothing in this Agreement shall be construed as giving the Employee any right to be retained in the employ of the Company.

(c) The Employee acknowledges that from time to time, the Company may establish, maintain and distribute employee manuals or handbooks or personnel policy manuals, and officers or other representatives of the Company may make written or oral statements relating to personnel policies and procedures. Such manuals, handbooks and statements are intended only for general guidance. No policies, procedures or statements of any nature by or on behalf of the Company (whether written or oral, and whether or not contained in any employee manual or handbook or personnel policy manual), and no acts or practices of any nature, shall be construed to modify this Agreement.

(d) All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of the Employee and the Company hereunder shall not be assignable in whole or in part by the Company.

17. Severability . If any provision of this Agreement or application thereof to anyone or under any circumstances shall be determined to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions or applications of this Agreement which can be given effect without the invalid or unenforceable provision or application.

18. Remedies Cumulative; No Waiver . No right conferred upon the Employee by this Agreement is intended to be exclusive of any other right or remedy, and each and every such right or remedy shall be cumulative and shall be in addition to any other right or remedy given

hereunder or now or hereafter existing at law or in equity. No delay or omission by the Employee in exercising any right, remedy or power hereunder or existing at law or in equity shall be construed as a waiver thereof, including without limitation any delay by the Employee in delivering a Notice of Termination pursuant to Section 2 hereof after an event has occurred which would, if the Employee had resigned, have constituted a Termination upon a Change of Control pursuant to Section 1(n)(ii) of this Agreement.

19. Miscellaneous . All section headings in this Agreement are for convenience only. This Agreement may be executed in several counterparts, each of which is an original. It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts.

IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this Agreement as of the date first above written.


Attest:	THE BRYN MAWR TRUST COMPANY

[Seal]

	By:
Secretary		President

	By:
Witness		Employee

Exhibit 31.1

CERTIFICATIONS

I, Frederick C. Peters II, Chief Executive Officer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Bryn Mawr Bank Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

disclosed in this report, any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal

quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date:		/s/ FREDERICK C. PETERS
		Frederick C. Peters II, Chief Executive Officer

Exhibit 31.2

CERTIFICATIONS

I, J. Duncan Smith, Chief Financial Officer, certify that:

I have reviewed this quarterly report on Form 10-Q of Bryn Mawr Bank Corporation;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

disclosed in this report, any change in the registrant’s internal control over

financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date:		/s/ J. DUNCAN SMITH
		J. Duncan Smith, Chief Financial Officer

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Section 1350,

as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Bryn Mawr Bank Corporation (the “Company”) on Form 10-Q for the period ending March 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Frederick C. Peters II, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Frederick C. Peters II

Frederick C. Peters II

Chief Executive Officer

May 10, 2005

Exhibit 32.2

Certification Pursuant to 18 U.S.C. Section 1350,

as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Bryn Mawr Bank Corporation (the “Company”) on Form 10-Q for the period ending March 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, J. Duncan Smith, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ J. Duncan Smith

J. Duncan Smith

Chief Financial Officer

May 10, 2005

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