SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 10-K (Mark One) [X] Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 [Fee required] for the fiscal year ended December 31, 1999 or [ ] Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 [No fee Required] for the transition period from_______________ to________________ Commission file number 0-15261. ------- BRYN MAWR BANK CORPORATION - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Pennsylvania 23-2434506 - --------------------------------- -------------------------------------- (State of other jurisdiction of (I.R.S. Employer Identification Number) Incorporation or Organization) 801 Lancaster Avenue, Bryn Mawr, Pennsylvania 19010 - ---------------------------------------------- -------------- (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including area code) (610) 525-1700 -------------- Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on Title of each class which registered ------------------- ------------------------ NONE NONE Securities registered pursuant to Section 12(g) of the Act: Common Stock ($1 par value) - -------------------------------------------------------------------------------- (Title of Class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 of 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period than 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 mark if disclosure of delinquent filers pursuant to Item 405 or Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] The aggregate market value of shares of common stock held by non-affiliates of Registrant (including fiduciary accounts administered by affiliates*) was $94,352,343 on February 29, 2000. As of February 29, 2000, 4,313,250 shares of common stock were outstanding. Documents Incorporated by Reference: Parts I, II and IV - Portions of - ----------------------------------- Registrant's Annual Report to Shareholders for the year ended December 31, 1999, as indicated, Parts I and III - Definitive Proxy Statement of Registrant filed with the Commission pursuant to Regulation 14A. *Registrant does not admit by virtue of the foregoing that its officers and directors are "affiliates" as defined in Rule 405 and does not admit that it controls the shares of Registrant's voting stock held by the Trust Department of its bank subsidiary. The exhibit index is on pages 46 through 50. There are 144 pages in this report. Form 10-K Bryn Mawr Bank Corporation Index Item No. Page -------- Part I 1. Business............................................... 1 2. Properties............................................. 32 3. Legal Proceedings...................................... 36 4. Submission of Matters to a Vote of Security Holders.... 36 Part II 5. Market for Registrant's Common Equity and Related Stockholder Matters.................................... 37 6. Selected Financial Data................................ 37 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.................... 37 8. Financial Statements and Supplementary Data............ 38 9. Change in and Disagreements with Accountants on Accounting and Financial Disclosure.................... 38 Part III 10. Directors and Executive Officers of Registrant......... 39 11. Executive Compensation................................. 45 12. Security Ownership of Certain Beneficial Owners and Management............................................. 45 13. Certain Relationships and Related Transactions......... 45 Part IV 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K............................................ 46 UNLESS OTHERWISE INDICATED, ALL INFORMATION IS AS OF MARCH 1, 2000. PART I ------ ITEM 1. BUSINESS ----------------- GENERAL ------- BRYN MAWR BANK CORPORATION - -------------------------- Bryn Mawr Bank Corporation (the "Corporation"), hereinafter sometimes referred to as the Registrant, was incorporated under the laws of the Commonwealth of Pennsylvania on August 8, 1986. The Corporation is a bank holding company registered under the Bank Holding Company Act of 1956, as amended (the "Act"). On January 2, 1987, under a Plan of Reorganization, the Corporation acquired all of the issued and outstanding shares of The Bryn Mawr Trust Company (the "Bank"), through an exchange of three shares of the Corporation stock for each share of Bank stock issued. THE BRYN MAWR TRUST COMPANY - --------------------------- The Bank, the principal subsidiary of the Corporation, is a state chartered bank subject to the Pennsylvania Banking Code of 1965, as amended, which was incorporated under the laws of the Commonwealth of Pennsylvania on March 25, 1889. In addition, the Bank is a member of the Federal Reserve System and, therefore, is subject to the laws and regulations, which govern a Federal Reserve member bank. The Bank is engaged in a general commercial and retail banking business, providing basic banking services as well as a full range of trust services. TAX COUNSELLORS OF BRYN MAWR, INC. - ---------------------------------- Tax Counsellors of Bryn Mawr, Inc. ("TCBM") was incorporated under the laws of Pennsylvania on July 1, 1997. TCBM is a wholly owned subsidiary of 1 the Corporation. TCBM offers tax-planning services to clients in the general market area of the Corporation. INSURANCE COUNSELLORS OF BRYN MAWR, INC. - ---------------------------------------- Insurance Counsellors of Bryn Mawr, Inc. ("Insurance Counsellors") was incorporated on December 30, 1997 as a wholly owned subsidiary of the Bank. Insurance Counsellors began operations on February 1, 1998. The staff of Insurance Counsellors sells insurance products, including all facets of casualty, property and allied insurance lines, as well as life insurance, annuities, medical insurance and accident and health insurance for groups and individuals. THE BRYN MAWR TRUST COMPANY (JERSEY), LTD. - ------------------------------------------ The Bryn Mawr Trust Company (Jersey), Ltd. ("BMTC (Jersey)") was incorporated on September 3, 1998 as a wholly owned subsidiary of the Corporation. BMTC (Jersey) is incorporated under the laws of the Island of Jersey, Channel Islands and maintained an office on the Island of Jersey. BMTC (Jersey) afforded the Bank's clients the opportunity to make offshore investments, but due to a lack of business activity, BMTC (Jersey) has ceased operation and its charter will be cancelled. BRYN MAWR BROKERAGE CO., INC. - ----------------------------- Bryn Mawr Brokerage Co., Inc. ("BM Brokerage") was incorporated on October 26, 1998 as a wholly owned subsidiary of the Corporation. BM Brokerage began operating in January 1999. BM Brokerage offers an array of brokerage related services to the Corporation's customers, including trading of shares, annuities and mutual funds. 2 JOSEPH W. ROSKOS & CO., INC. - --------------------------- Joseph W. Roskos & Co., Inc. ("JWR&Co") was acquired as of January 1, 1999 as a wholly owned subsidiary of the Corporation. JWR&Co offers high quality personalized family business office services to high net worth individuals, including accounting, tax preparation services, consulting and fiduciary support services. CDC CAPITAL MANAGEMENT INC. - --------------------------- CDC Capital Management Inc. ("CDC") was acquired in January 1999 as a wholly owned subsidiary of the Corporation. CDC began operating in January 1999. CDC provides investment consulting services to retirement plans, foundations, and high net worth individuals. SUMMARY - ------- The Corporation will, through its subsidiaries, especially the Bank, seek to market its services by providing superior banking services, including deposit, lending and trust services, as well as other financial services, including tax planning services through TCBM, insurance sales and services through Insurance Counsellors, brokerage related services through BM Brokerage, family business office services through JWR&Co and investment advisory services through CDC to its customers, primarily in its market in Montgomery, Delaware and Chester counties of Pennsylvania and to successfully address the other challenges in the ever changing competitive financial services market. 3 OPERATIONS ---------- BRYN MAWR BANK CORPORATION - -------------------------- The Corporation had no active staff as of December 31, 1999 and conducted no activities other than those activities through its subsidiaries, the Bank, Insurance Counsellors, BM Brokerage, TCBM, Joseph W. Roskos & Co. and CDC. A complete list of directors and officers of the Corporation, as of March 1, 2000 is incorporated by reference to page 11 and 12 of the Corporation's Annual Report to Shareholders for the year ended December 31, 1999. THE BRYN MAWR TRUST COMPANY - --------------------------- The Bank is engaged in general, commercial and retail banking business, providing basic banking services, including the acceptance of demand, time and savings deposits and the making of commercial, real estate and consumer loans and other extensions of credit. The Bank also provides a full range of investment management and trust services including estate administration, investment advisory services, pension and profit sharing administration and personal financial planning, including tax preparation. As of December 31, 1999, the market value of assets administered by the Bank's Investment Management and Trust Division was $1,887,000,000. In January 1996, the Bank formed Investment Counsellors of Bryn Mawr ("ICBM"), as a division of the Bank's Investment Management and Trust Division. ICBM is dedicated to managing investment portfolios for high net worth individuals and employee benefit plans. During 1999 residential mortgage interest rates increased, making residential mortgage refinancing less attractive to borrowers, compared to 4 similar activity in 1997 and 1998. As of March 1, 2000, the Bank had no commissioned mortgage originators. The Bank originated and sold $73,921,000 in residential mortgages to the secondary market in 1999 compared to $134,676,000 originated and sold in 1998. Net gains and loan fee income on such transactions amounted to $984,000 in 1999 compared to $1,647,000 in 1998. During 1997 the Bank originated and sold $75,874,000 in residential mortgage loans, generating $1,091,000 in related net gains and loan fee income. The operations and data processing support for the banking services provided by the Bank were supplied by Financial Institution Outsourcing, a division of Mellon Bank, N. A. under a five-year servicing contract, which expired on December 31, 1995 and which is incorporated by reference into the Corporation's 10-K, filed with the Securities and Exchange Commission (the "Commission") on March 26, 1991. In November 1993, Mellon Bank sold its outsourcing division to FISERV, Inc., an outsourcing data processing company located in Brookfield, IL. The Bank renegotiated its licensing and servicing agreement with FISERV in 1994 for the in-house data processing systems, which commenced operation during February 1996. That agreement is incorporated by reference into the Corporation's 10-K, filed with the Commission on March 31, 1995. At December 31, 1999, the Bank had 218 full time and 33 part time employees, including 106 officers, equaling 234.5 full time equivalent staff. TAX COUNSELLORS OF BRYN MAWR, INC. - ---------------------------------- TCBM's operation employs three CPAs (the "Tax Professionals"), having significant tax planning and preparation background and some formerly employed by a "Big Five" accounting firm. As of March 1, 2000, there are a 5 total of 6 employees. This includes 4 accountants and 1 attorney specializing in estate planning. The staff of TCBM, provides tax planning and consulting services to both TCBM's and the Bank's customer base. As a part of the formation of TCBM, a profit sharing agreement was developed that allows the Tax Professionals to retain the net revenues generated by existing clients brought to TCBM. INSURANCE COUNSELLORS OF BRYN MAWR, INC. - ---------------------------------------- Insurance Counsellors is a full-service insurance agency, which enables the Bank to offer insurance related products and services to its customer base. This includes casualty, property and allied insurance lines, as well as life insurance, annuities, medical insurance and accident and health insurance for groups and individuals. Insurance Counsellors employs 4 licensed insurance agents and a supporting staff, who have significant expertise in the design, sale and service of insurance products. Insurance Counsellors has six major insurance companies for property and casualty, in excess of twenty life and health companies and agreements with life agents and employee benefit companies for specialized insurance needs. BRYN MAWR BROKERAGE CO., INC. - ----------------------------- BM Brokerage offers securities products, including mutual funds, annuities, individual stocks and bonds and retirement plans through the Bank's branch system. BM Brokerage has affiliated with UVEST Financial Services, Inc., a broker-dealer headquartered in Charlotte, North Carolina to provide the necessary back office support. As of December 31, 1999, BM Brokerage had 1 employee. BM Brokerage generated $194,000 of revenue during 1999. 6 CDC CAPITAL MANAGEMENT INC. - --------------------------- CDC is an investment advisor registered with the United States Securities and Exchange Commission. CDC provides investment consulting services to retirement plans, foundations, and high net worth individuals. As of December 31, 1999, CDC had 4 employees. During 1999 CDC generated $1,024,215 of revenues. JOSEPH W. ROSKOS & CO. INC. - --------------------------- JWR&Co provides family business office services to high net worth individuals. Thus, JWR&Co offers to the clients of all the Bryn Mawr companies access to high quality personalized financial services such as accounting, tax preparation services, consulting and fiduciary support services to our customers. As of December 31, 1999 JWR&Co had 21 employees and generated $1,947,000 of revenue during 1999. 7 SOURCES OF THE CORPORATION'S REVENUE ------------------------------------ The following table shows the percentage of consolidated revenues by major source generated by the Corporation's subsidiaries from the activities indicated below. Year Ended December 31, ---------------------------------------- 1999 1998 1997 1996 1995 ---- ---- ---- ---- ---- Commercial Loans 19% 18% 17% 18% 16% Mortgage and Construction Loans 16 16 15 16 16 Consumer Loans 18 21 25 25 25 Home Equity/Line of Credit 2 2 2 2 3 Securities 4 5 6 7 10 Federal Funds Sold 1 2 3 1 2 - --- --- -- --- Total Interest Income 60 64 68 70 72 Trust Services 21 23 21 17 17 Other Income * 19 13 11 13 11 -- --- --- --- --- Total Revenues * 100% 100% 100% 100% 100% ==== ==== ==== ==== ==== * Revenues were generated by the Bank, JWR&Co, CDC, TCBM, Insurance Counsellors, and BM Brokerage in 1999 by the Bank, TCBM, and Insurance Counsellors in 1998 and by the Bank and TCMB in 1997. Of the Corporation's total revenues generated in 1999, JWR&Co, CDC, TCBM, Insurance Counsellors and BM Brokerage, respectively earned 4%, 2%, 1.5%, 1%, and .4% thereof. Respective revenues generated by TCBM and Insurance Counsellors aggregated 1.7% and .5% of the Corporation's total revenues in 1998. TCBM aggregated .4% in 1997. The Bank generated all revenues during 1996 and 1995. 8 STATISTICAL INFORMATION ----------------------- The statistical information required in this Item I is incorporated by reference to the information appearing in Corporation's Annual Report to Shareholders for the year ended December 31, 1999, as follows: Disclosure Required by Industry Reference to the Corporation's - -------------------------------- ------------------------------ Guide 3 1999 Annual Report - -------- ------------------- (Financial Section) ------------------- I. Distribution of Assets, Liabilities and Stockholders Equity; Interest Rates and Interest Differential A. Average balance sheets, interest- income and expense; average rates earned/paid.................................. Analyses of Interest Rates and Interest Differential (page 6) B. Rate/Volume Differentials.................... Rate/Volume Analyses (page 7) C. Non-Accrual Policy........................... Loan Portfolio and Non performing Asset Analysis (page 12) D. Interest Rate Sensitivity Analysis..................................... Interest Rate Sensitivity Analysis (page 15) II. Investment Portfolio A. Book Values.................................. Notes to Consolidated Financial statements, Note 3 (page 25) B. Maturities................................... Notes to Consolidated Financial Statements, Note 3 (page 25) III. Loan Portfolio A. Types of Loans............................... Loan Portfolio (page 11) B. Maturities and Sensitivity to changes in Interest Rates.................... Loan Portfolio-Maturity Distribution (page 11) Interest Rate Sensitivity Analysis (page 15) C. Non-Performing Assets........................ Nonperforming Assets (page 14) 9 Disclosure Required by Industry Reference to the Corporation's - -------------------------------- ------------------------------ Guide 3 1999 Annual Report - -------- ------------------ (Financial Section) ------------------- IV. Summary of Loan Loss Experience A. Analysis of Loss Experience................. Allowance for Possible Loan Losses (page 8) B. Allocation of Allowance for Loan Losses................................. Allocation of Allowance for Possible Loan Losses (page 8) V. Deposits A. Average Deposits............................ Average Daily Balances of Deposits (Page 13) B. Maturity tables and outstanding balances, deposits $100,000 or more........................................ Maturity of Certificates of Deposit of $100,000 or Greater (page 13) VI. Return on Equity and Assets................. Selected Financial Data (page 1) 10 COMPETITION ----------- The Corporation's principal purpose is to hold the stock of the Bank and the Corporation's other subsidiaries. Therefore, there is presently neither a market area nor competition for the Corporation since it does not conduct competitive business activity other than through its subsidiaries. The Bank's market area is primarily located in portions of Delaware, Montgomery and Chester Counties in southeastern Pennsylvania. The greatest concentration of activity is within a limited radius of Bryn Mawr, Pennsylvania, the site of the Bank's main banking office. The Bank has six full service branch offices located in Bryn Mawr, Havertown, Wayne, Wynnewood, Paoli, and West Conshohocken, Pennsylvania. In addition, there are six limited service facilities located in life care communities in Waverly Heights, Martins Run, the Quadrangle, Beaumont at Bryn Mawr, Bellingham and White Horse Village. All facilities are located in Montgomery, Chester or Delaware Counties. The banking business is highly competitive. The Bank competes not only with other commercial banks but it also experiences competition from savings and loan associations, trust companies and credit unions for deposits and loans, as well as from consumer finance companies, mortgage companies, insurance companies, stock brokerage companies and other entities providing one or more of the services and products offered by the Bank. All of those organizations must be considered competitors of the Bank. TCBM's market area is primarily located in southeastern Pennsylvania, New Jersey and Delaware, although the nature of tax consulting services permits 11 TCBM to provide its services anywhere in the United States. TCBM's primary competition is from accounting and tax preparation firms. TCBM is housed in the main office building of the Bank, located at 801 Lancaster Avenue, Bryn Mawr, Pennsylvania. Insurance Counsellors' market area is primarily located in southeastern Pennsylvania, New Jersey and Delaware, although they are able to market and sell insurance products and services anywhere in the United States. Insurance Counsellors is housed in the main office building of the Bank, located at 801 Lancaster Avenue, Bryn Mawr, Pennsylvania. Insurance Counsellors' primary competition is from insurance agencies and insurance agents. BM Brokerage's market area is primarily located in southeastern Pennsylvania, New Jersey and Delaware, although they are able to market and sell securities related products anywhere in the United States. BM Brokerage is housed in the main office building of the Bank, located at 801 Lancaster Avenue, Bryn Mawr, Pennsylvania. BM Brokerage's primary competition is from brokerage firms, mutual funds and financial institutions offering similar types of securities related products. CDC's market area is primarily located in the Pennsylvania, New Jersey and Delaware. CDC is housed at 2 Bryn Mawr Avenue directly across from the main office building of the Bank. CDC's main competition is brokerage firms and other investment advisors. JWR&Co's primary function is a family business office. Its market area is Pennsylvania and targets individuals and families with substantial 12 assets. JWR&Co is located in King of Prussia, Pennsylvania at 2011 Renaissance Boulevard, Suite 200. JWR&Co's primary competition is the wealth management departments of various banks in the area. 13 SUPERVISION AND REGULATION -------------------------- Bank holding companies, such as the Corporation, and its subsidiaries, including the Bank, are subject to extensive regulation under both federal and state law. To the extent that the following information describes statutory provisions and regulations which apply to the Corporation and its subsidiaries, it is qualified in its entirety by reference to those statutory provisions and regulations. Regulation of the Corporation ----------------------------- The Bank Holding Company Act - ---------------------------- The Corporation, as a bank holding company, is regulated under the Bank Holding Company Act of 1956, as amended (the "Act"). The Act limits the business of bank holding companies to banking, managing or controlling banks, performing certain servicing activities for subsidiaries and engaging in such other activities as the Federal Reserve Board may determine to be closely related to banking. The Corporation and its non-bank subsidiaries are subject to the supervision of the Federal Reserve Board and the Corporation is required to file with the Federal Reserve Board an annual report and such additional information as the Federal Reserve Board may require pursuant to the Act and the regulations which implement the Act. The Federal Reserve Board also conducts inspections of the Corporation and each of its non-banking subsidiaries. On November 12, 1999, President Clinton signed into law the Gramm-Leach- 14 Bliley Act, or the Financial Services Act of 1999 (the "FSA"), which became effective on March 11, 2000. The FSA amends certain portions of the Act, subject to conditions. See "Recently Enacted Legislation" below for more information. The Act prohibits the Federal Reserve Board from approving a bank holding company's application to acquire a bank or bank holding company located outside the state in which the operations of its banking subsidiaries are principally conducted, unless such acquisition is specifically authorized by statute of the state in which the bank or bank holding company to be acquired is located. Pennsylvania law permits bank holding companies located in any state to acquire Pennsylvania banks and bank holding companies, provided that the home state of the acquiring company has enacted "reciprocal" legislation. In this context, reciprocal legislation is generally defined as legislation that expressly authorizes Pennsylvania bank holding companies to acquire banks or bank holding companies located in another state on terms and conditions substantially no more restrictive than those applicable to such an acquisition in Pennsylvania by a bank holding company located in the other state. The Act requires each bank holding company to obtain prior approval by the Federal Reserve Board before it may acquire (i) direct or indirect ownership or control of more than 5% of the voting shares of any company, including another bank holding company or a bank, unless it already owns a majority of such voting shares, or (ii) all, or substantially all, of the assets of any company. The Act provides that the Federal Reserve Board shall not approve any acquisition by a bank holding company of more than 5% of the voting shares or substantially all of the assets of a bank located 15 outside of the state in which the operation of the holding company's bank subsidiaries are principally conducted, unless such acquisition is specifically authorized by a statute of the state in which the bank whose shares are to be acquired is located. The Act also prohibits a bank holding company from engaging in, or from acquiring direct or indirect ownership or control of more than 5% of the voting shares of any company engaged in non-banking activities unless the Federal Reserve Board, by order or regulation, has found such activities to be so closely related to banking or to managing or controlling banks as to be appropriate. The Federal Reserve Board has by regulation determined that certain activities are so closely related to banking or to managing or controlling banks, so as to permit bank holding companies, such as the Corporation, and its subsidiaries formed for such purposes, to engage in such activities, subject to obtaining the Federal Reserve Board's approval in certain cases. The Act further provides that the Federal Reserve Board shall not approve any such acquisition that would result in a monopoly or would be in furtherance of any combination or conspiracy to monopolize or attempt to monopolize the business of banking in any part of the country, or that in any other manner would be in restraint of trade, unless the anti-competitive effects of the proposed transactions are clearly outweighed by the public interest and the probable effect of the transaction in meeting the convenience and needs of the communities to be served. Under the Act, a bank holding company and its subsidiaries are prohibited from engaging in certain tie-in arrangements in connection with any 16 extension or provision of credit, lease or sale of property or furnishing any service to a customer on the condition that the customer provide additional credit or service to the bank, to its bank holding company or any other subsidiaries of its bank holding company or on the condition that the customer refrain from obtaining credit or service from a competitor of its bank holding company. Further, the Bank, as a subsidiary bank of a bank holding company, such as the Corporation, is subject to certain restrictions on any extensions of credit it provides to the Corporation or any of its non-bank subsidiaries, investments in the stock or securities thereof, and on the taking of such stock or securities as collateral for loans to any borrower. In addition, the Federal Reserve Board may issue cease and desist orders against bank holding companies and non-bank subsidiaries to stop actions believed to present a serious threat to a subsidiary bank. The Federal Reserve Board also regulates certain debt obligations and changes in control of bank holding companies. Under Federal Reserve Board policy, a bank holding company is expected to act as a source of financial strength to each of its subsidiary banks and to commit resources, including capital funds during periods of financial stress, to support each such bank. Although this "source of strength" policy has been challenged in litigation, the Federal Reserve Board continues to take the position that it has the authority to enforce it. Consistent with its "source of strength" policy for subsidiary banks, the Federal Reserve Board has stated that, as a matter of prudent banking, a bank holding company generally should not maintain a rate of cash dividends unless its net income available to common shareholders has been sufficient 17 to fund fully the dividends, and the prospective rate of earnings retention appears to be consistent with the company's capital needs, asset quality and overall financial condition. Financial Institutions Reform, Recovery and Enforcement Act - ----------------------------------------------------------- Following enactment by the United States Congress, on August 9, 1989, the Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA") became law. Although the more significant provisions of FIRREA relate to promoting the economic viability of thrift institutions through more stringent capital requirements and changes to the regulatory structure of such institutions, FIRREA also contains provisions that directly affect banks and bank holding companies, such as the Corporation. First, FIRREA abolished the Federal Savings and Loan Insurance Corporation and required the Federal Deposit Insurance Corporation (the "FDIC") to establish two separate funds, the Bank Insurance Fund ("BIF") to insure banks and the Savings Association Insurance Fund ("SAIF") to insure savings and loan associations. Second, FIRREA amended the Act to permit bank holding companies to acquire thrift institutions. Prior to FIRREA, bank holding companies were permitted to acquire only failing thrift institutions. FIRREA also abolished the restrictions on tandem operations of acquired thrift institutions and the in-state preference for acquisitions of failing thrifts. Finally, FIRREA enhanced the authority of the regulatory authorities over financial institutions, including banks and bank holding companies, to regulate more effectively with the entire structure of a bank holding company. Federal law also grants to federal banking agencies the power to issue 18 cease and desist orders when a depository institution or a bank holding company or an officer or director thereof is engaged in or is about to engage in unsafe and unsound practices. The Federal Reserve Board may require a bank holding company, such as the Corporation, to discontinue certain of its activities or activities of its other subsidiaries, other than the Bank, or divest itself of such subsidiaries if such activities cause serious risk to the Bank and are inconsistent with the Bank Holding Company Act or other applicable federal banking laws. Federal Deposit Insurance Corporation Improvement Act of 1991 ------------------------------------------------------------- The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA") is designed to reform and provide funding for the deposit insurance system by, among other things, requiring early intervention and closure of troubled institutions by the regulatory authorities and the resolution of failed institutions on the least-cost basis. FDICIA substantially alters the deposit insurance assessment process. The requirement that the FDIC (Federal Deposit Insurance Corporation) provide at least sixty (60) days notice before requiring changes to the semiannual insurance assessment has been removed and the FDIC has the ability to change deposit insurance assessment rates much more rapidly than in the past. FDICIA grants the FDIC the authority to impose special "emergency" assessments on member banks at any time if necessary to pay interest or principal on borrowings or for other appropriate purposes. FDICIA also requires the FDIC to establish a risk-based assessment system for the deposit insurance funds no later than January 1, 1994. In addition, FDICIA 19 establishes capital categories, such as, "well-capitalized", "adequately capitalized", "undercapitalized", "significantly undercapitalized", and "critically undercapitalized". Under the guidelines currently issued by the regulators, the Bank is currently considered "well-capitalized". FDICIA also requires the regulators to place a financial institution under more intense scrutiny if its capital falls into a lower capital category. In addition, FDICIA restricts the liquidity that is available, through the Federal Reserve discount window, to troubled financial institutions and increases the scope of the regulatory authorities supervisory powers over financial institutions, including the Bank and Corporation. Pursuant to federal law, federal regulatory authorities review the performance of the Corporation and their subsidiaries in meeting the credit needs of the communities served by the Bank. The applicable federal regulatory authority considers compliance with this law in connection with applications for, among other things, approval of branches, branch relocations and acquisitions of banks and bank holding companies. Pennsylvania Laws Affecting the Corporation ------------------------------------------- Pennsylvania Anti-Takeover Legislation - -------------------------------------- The Corporation is also subject to the Pennsylvania Business Corporation Law of 1988, as amended and the general business and other laws of the Commonwealth of Pennsylvania regulating corporations. 20 The Pennsylvania Legislature passed the Pennsylvania Anti-Takeover Law Act 36 of the 1990 Pennsylvania Legislature ("Act 36") on April 27, 1990 which adds additional provisions to and amends the law of Pennsylvania concerning business corporations (the "Corporation Law"). Specifically, Act 36 (i) modifies and limits the fiduciary obligations of a corporation's directors, withholds voting rights from control shares of corporation stock until consent of the Corporation's independent shareholders is obtained at a shareholders meeting, prevents "green mail" by providing for disgorgement of certain profits by a control person or group within eighteen (18) months after an attempt to acquire control of a corporation. Act 36 also provides for severance compensation for certain terminated employees following control share acquisitions, and regulates the effect of certain business combinations on labor contracts. Act 36, which is the Legislature's response to the large volume of hostile takeovers over recent years, contains provisions which permitted a corporation's board of directors to "opt-out" of certain provisions of the Act by explicitly amending the corporation's by-laws on or before July 26, 1990. On July 20, 1990, the Corporation's Board amended the Corporation's by-laws to explicitly opt-out of the provisions of Act 36 which modify and limit a director's fiduciary duty to the Corporation, withhold voting rights from "control shares" of the Corporation stock, and provide for disgorgement of certain profits on certain shares of the Corporation stock by a control person or group within eighteen months after an attempt to acquire the Corporation's stock. Because the Corporation's Board of Directors opted out of the provisions of Act 36 concerning fiduciary duty, control share acquisitions, and disgorgement of profits, the severance compensation and labor contract provisions of Act 36 are inapplicable to the Corporation. 21 The Corporation's Board opted-out of those provisions of the Act by amending the Corporation's by-laws because it believed and continues to believe that those provisions of the Act were not in the best economic interests of the Corporation's shareholders. In addition, the Board believes that, without those provisions of Act 36, the Board has sufficient flexibility under the applicable law to protect the interest of the shareholders. As outlined in the Corporation's definitive proxy statement for the 1992 shareholders' meeting, the Board of Directors recommended that the Corporation's shareholders ratify and approve the amendment to the Corporation's by-laws opting out of Act 36. Regulation of the Bank ---------------------- The Corporation's Pennsylvania state chartered Bank, The Bryn Mawr Trust Company, is regulated and supervised by the Pennsylvania Department of Banking (the "Department of Banking") and the FDIC. These agencies regularly examine the Bank's reserves, loans, investments, management practices and other aspects of its operations and the Bank must furnish periodic reports to these agencies. The Bank is not a member of the Federal Reserve System. FDIC and Department of Banking Regulations - ------------------------------------------ The Bank's operations are subject to certain requirements and restrictions under state and federal laws, including requirements to 22 maintain reserves against deposits, limitations on the interest rates that may be paid on certain types of deposits, restrictions on the types and amounts of loans that may be granted and the interest that may be charged thereon, limitations on the types of investments that may be made and the types of services which may be offered. Various consumer laws and regulations also affect the operations of the Bank. These regulations and laws are intended primarily for the protection of the Bank's depositors and customers rather than holders of the Corporation's stock. As a bank incorporated under and subject to Pennsylvania banking laws and insured by the FDIC, the Bank must obtain the prior approval of the Department of Banking and the FDIC before establishing a new branch banking office. Depending on the type of bank or financial institution, a merger of banks located in Pennsylvania are subject to the prior approval of one or more of the following: the Department of Banking, the FDIC, the Federal Reserve Board and the Office of the Comptroller of the Currency. An approval of a merger by the appropriate bank regulatory agency would depend upon several factors, including whether the merged institution is a federally insured state bank, a member of the Federal Reserve System, or a national bank. Additionally, any new branch expansion or merger must comply with geographical branching restrictions provided by state law. Beginning in 1990, the Pennsylvania Banking Code permitted Pennsylvania banks to establish branches anywhere in the state. The Bank is insured by the FDIC, which currently insures the Bank's deposits to a maximum of $100,000 per deposit. For this protection, each insured bank pays a semiannual statutory insurance assessment and is subject to certain rules and regulations of the FDIC. The amount of FDIC 23 assessments paid by individual insured depository institutions, such as the Bank, is based on their relative risk as measured by regulatory capital ratios and certain other factors. Under this system, in establishing the insurance premium assessment for each bank, the FDIC will take into consideration the probability that the deposit insurance fund will incur a loss with respect to an institution, and will charge an institution with perceived higher inherent risks a higher insurance premium. The FDIC will also consider the different categories and concentrations of assets and liabilities of the institution, the revenue needs of the deposit insurance fund, and any other factors the FDIC deem relevant. A significant increase in the assessment rate or a special additional assessment with respect to insured deposits could have an adverse impact on the results of operations and capital levels of the Bank or the Corporation. On October 1, 1998, the FDIC adopted two rules governing minimum capital levels that FDIC-supervised banks must maintain against the risks to which they are exposed. The first rule makes risk-based capital standards consistent for two types of credit enhancements (i.e., recourse arrangements and direct credit substitutes) and requires different amounts of capital for different risk positions in asset securitization transactions. The second rule permits limited amounts of unrealized gains on debt and equity securities to be recognized for risk based capital purposes as of September 1, 1998. The FDIC rules also provide that a qualifying institution that sells small business loans and leases with recourse must hold capital only against the amount of recourse retained. In general, a qualifying institution is one that is well-capitalized under the FDIC's prompt corrective action rules. The amount of recourse that can receive the preferential capital treatment cannot exceed 15% of the institution's total 24 risk-based capital. Regulation of the Corporation- Government Monetary Policies ---------------------------- The earnings and operations of the Corporation and its subsidiaries are affected by the policies of regulatory authorities and legislative changes; in particular, the policies of the Federal Reserve Board in regulating the money supply and interest rates. Among the instruments used by the Federal Reserve Board to implement its objectives are open-market operations in U.S. Government securities, changes in the discount rate for member bank borrowings, changes in reserve requirements against bank deposits, and changes with respect to regulations affecting certain borrowing by banks and their affiliates. The monetary and fiscal policies of the Federal Reserve Board and the other regulatory agencies have had, and will probably continue to have, an important impact on the operating results of the Bank through their power to implement national monetary policy in order to, among other things, curb inflation or combat a recession. The monetary policies of the Federal Reserve Board may have a major effect upon the levels of the Bank's loans, investments and deposits through the Federal Reserve Board's open market operations in United States government securities, through its regulation of, among other things, the discount rate on borrowing of depository institutions, and the reserve requirements against depository institution deposits. It is not possible to predict the nature and impact of future changes in monetary and fiscal policies. 25 The earnings of the Bank and therefore, of the Corporation are affected by domestic economic conditions, particularly those conditions in the trade area as well as the monetary and fiscal policies of the United States government and its agencies. The Federal Reserve Board also has authority to prohibit a bank holding company from engaging in any activity or transaction deemed by the Federal Reserve Board to be an unsafe or unsound practice. The payment of dividends could, depending upon the financial condition of the Bank or Corporation, be such an unsafe or unsound practice and the regulatory agencies have indicated their view that it generally would be an unsafe and unsound practice to pay dividends except out of current operating earnings. The ability of the Bank to pay dividends in the future is presently and could be further influenced, among other things, by applicable capital guidelines discussed below or by bank regulatory and supervisory policies. The ability of the Bank to make funds available to the Corporation is also subject to restrictions imposed by federal law. The amount of other payments by the Bank to the Corporation is subject to review by regulatory authorities having appropriate authority over the Bank or Corporation and to certain legal limitations. The passage of additional legislation by Congress, such as FIRREA or FDICIA, authorizing additional continuing legal and regulatory supervision of financial institutions, requiring additional disclosure concerning deposit transactions and permitting more rapid increases in deposit insurance premiums may increase the cost and the operational expenses even for efficiently run and well- capitalized financial institutions and may adversely affect the profit margins of the Bank and the Corporation. 26 Risk Based Capital Guidelines - ----------------------------- The Federal Reserve Board has promulgated certain "Risk Based Capital Guidelines" which more narrowly define bank capital, as it relates to assets, than do prior regulatory guidelines. Under the new guidelines, various types of Corporation assets are assigned risk categories and weighted based on their relative risk. In addition, certain off balance sheet items are translated into balance sheet equivalents and also weighted according to their potential risk. The sum of both of these asset categories, referred to as Total Risk Weighted Assets, is then compared to the Corporation's total capital, providing a Tier I Capital Ratio, under the new guidelines. A Tier II capital ratio is also computed for the Corporation, adding an allowable portion of the loan loss reserve to capital. Both the Tier I and Tier II ratios of the Corporation are in excess of those minimum capital ratios required. The focus of the guidelines is to measure the Corporation's capital risk. The guidelines do not explicitly take into account other risks, such as interest rate changes or liquidity. The Bank in its normal business originates off-balance sheet items, such as outstanding loan commitments and standby letters of credit. The Bank makes loan commitments to borrowers to assure the borrower of financing by the Bank for a specified period of time and/or at a specified interest rate. The obligation to the Bank, pursuant to an unfunded loan commitment, is limited by the terms of the commitment letter issued by the Bank to each borrower. The Bank carefully reviews outstanding loan commitments on a 27 periodic basis. A standby letter of credit is an instrument issued by the Bank, which represents an obligation to make payments on certain transactions of its customers. The Bank carefully evaluates the creditworthiness of each of its letter of credit customers. The Corporation carefully monitors its risks as measured by the Risk Capital Guidelines and seeks to adhere to the Risk Capital Guidelines. Recently Enacted Legislation - ---------------------------- The recently enacted FSA repeals provisions of the Glass-Steagall Act, which had prohibited commercial banks and securities firms from affiliating with each other and engaging in each other's businesses. Thus, many of the barriers prohibiting affiliations between commercial banks and securities firms have been eliminated. The FSA amends the Act to allow new "financial holding companies" ("FHC") to offer banking, insurance, securities and other financial products to consumers. Specifically, the FSA amends section 4 of the Act in order to provide for a framework for the engagement in new financial activities. Bank holding companies may elect to become a financial holding company if all its subsidiary depository institutions are well-capitalized and well-managed. If these requirements are met, a bank holding company may file a certification to that effect with the Federal Reserve Board and declare that it elects to become a FHC. After the certification and declaration is filed, the FHC may engage either de novo or through an acquisition in any activity that has been determined by the Federal Reserve Board to be financial in nature or incidental to such financial activity. Bank holding 28 companies may engage in financial activities without prior notice to the Federal Reserve Board if those activities qualify under the new list in section 4(k) of the Act. However, notice must be given to the Federal Reserve Board within 30 days after the FHC has commenced one or more of the financial activities. Under the FSA, a bank subject to various requirements is permitted to engage through "financial subsidiaries" in certain financial activities permissible for affiliates of FHC's. However, to be able to engage in such activities the bank must continue to be well-capitalized and well-managed and receive at least a "satisfactory" rating in its most recent Community Reinvestment Act examination. The Corporation cannot be certain of the effect of the foregoing recently enacted legislation on its business, although there is likely to be consolidation among financial services institutions and increased competition for the Corporation. Privacy of Consumer Financial Information - ----------------------------------------- The FSA also contains a provision designed to protect the privacy of each consumer's financial information in a financial institution. Pursuant to the requirements of the FSA, the financial institution regulators (the "financial regulators") intended to better protect the privacy of a consumer's financial information maintained in financial institutions. The regulations are designed to prevent financial institutions, such as the Bank, from disclosing a consumer's nonpublic personal information to third parties that are not affiliated with the financial institution. However, financial institutions can share a customer's personal 29 information or information about business and corporations with their affiliated companies. The regulations also provide that financial institutions can disclose nonpublic personal information to nonaffiliated third parties for marketing purposes but the financial institution must provide a description of its privacy policies to the consumers and give the consumers an opportunity to opt-out of such disclosure and, thus, prevent disclosure by the financial institution of the consumer's nonpublic personal information to nonaffiliated third parties. The financial regulators are implementing the requirements of these important regulations to, among other things, provide guidance concerning what are "nonpublic personal information", "consumers", and "customers", as well as about the required timing for notices to customers and the means by which customers can exercise their rights to opt-out of disclosure of their personal information. The vital privacy provision of the FSA will require significant effort by the staff for the Bank and the Corporation to implement. Government Policies and Future Legislation ------------------------------------------ As the enactment of the FSA confirms, from time to time, various proposals are made in the United States Congress as well as Pennsylvania legislature and by various bank regulatory authorities which would alter the powers of, and place restrictions on, different types of bank organizations. Among current proposals of significance to the Corporation or its subsidiaries are the continued liberalization of the restrictions on the acquisitions of out-of-state banks by bank holding companies, the expansion of the powers of banks and thrift institutions, the liberalization of the 30 restrictions upon the activities in which bank holding companies may engage, the imposition of limitations on interest rates and service charges, certain consumer legislation and the requirement to provide certain basic banking services. It is impossible to predict whether any of the proposals will be adopted and the impact, if any, of such adoption on the business of the Corporation or its subsidiaries, especially the Bank. Subsidiaries of the Corporation - ------------------------------- The non-bank subsidiaries of the Corporation are also subject to regulation and examination by the Federal Reserve Board and must file periodic reports with the Federal Reserve Board. 31 ITEM 2. PROPERTIES ------------------- The headquarters of the Corporation and the main office of the Bank are located in a three story stone front office building, consisting of approximately 37,000 net usable square feet, located at the main intersection of Bryn Mawr, Pennsylvania, at Lancaster Avenue and Bryn Mawr Avenue. The main office of the Bank has been located in Bryn Mawr since its founding in 1889. The Corporation acquired two additional properties during 1988, that is (i) a property contiguous to the Bank's main office and (ii) a property at 10 Bryn Mawr Avenue to house the Bank's Investment Management and Trust Division. The first property which is contiguous to the Bank's main office, houses an expanded drive-up facility and a meeting room and is subject to a mortgage as outlined in Note 6 to the Corporation's financial statements, on page 26 of the Financial Section its 1999 Annual Report. The second property became the location of the Bank's Investment Management and Trust Division in mid-December, 1989. The real property owned by the Corporation and the Bank, other than that contiguous to the Bank's main office is free and clear of all liens and encumbrances. Below is a schedule of all properties owned or leased by the Corporation or its subsidiaries. The Bank: - -------- Date Acquired Current Banking Office Address or Opened - ---------------------- ------- --------------- Main Office and Principal 801 Lancaster Avenue 1889 Place of Business (owned) Bryn Mawr, PA 19010 Branch Office/Operations 330 E. Lancaster Avenue 1985 Center (owned) Wayne, PA 19087 Branch Office/Admin. 18 W. Eagle Road 1987 Office (owned) Havertown, PA 19083 32 Date Acquired Current Banking Office Address or Opened - ---------------------- ------- ---------------- Branch Office (owned) 312 E. Lancaster Avenue 1979 Wynnewood, PA 19096 Branch Office (owned) N.E. Corner of Lancaster 1986 and Greenwood Avenues Paoli, PA 19301 Branch Office (leased) One Tower Bridge (1) 1995 Through July 31, 2001 West Conshohocken, Pa 19428 Branch Office (leased) The Quadrangle (2) 1989 month to month basis 3300 Darby Road Haverford, PA 19041-1095 Branch Office (leased) Waverly Heights, Ltd. (2) 1986 month to month basis Life Care Community Gladwyne, PA 19035 Branch Office (leased) Martins Run (2) 1987 month to month basis Life Care Community 11 Martins Run Media, PA 19063 Branch Office (leased) Bellingham (2) 1991 through October 31, 2001 1615 East Boot Road West Chester, PA 19380 Branch Office (leased) Beaumont at Bryn Mawr (2) 1995 through April 16, 2001 Retirement Community Bryn Mawr, PA 19010 Office Space (leased) Four Tower Bridge (3) 1998 through October 1, 2008 200 Barr Harbor Drive West Conshohocken, PA 19428 Office Space (leased) 2&6 Bryn Mawr Avenue (7) 1999 through March 1, 2028 Bryn Mawr, Pa. 19010 Branch Office (leased) White Horse Village (2) 2000 through March 1, 2005 535 Gradyville Road Newtown Square, PA. 33 The Corporation: - ---------------- Date Acquired Other Facilities Address or Opened - ----------------- ------- ------------- Walk-in Lobby, Drive-up 813 Bryn Mawr Avenue (4) 1988 Windows, Meeting Room Bryn Mawr, PA 19010 (owned) Office Building (owned) 10 Bryn Mawr Avenue (5) 1988 Bryn Mawr, PA 19010 Tax Counsellors of Bryn Mawr, Inc.: - ----------------------------------- Office Space (leased) 801 Lancaster Avenue (6) 1998 month-to-month basis Bryn Mawr, PA 19010 CDC Captial Management, Inc.: - ----------------------------- Office Space (leased) 2 Bryn Mawr Avenue (8) 1999 month-to-month basis Bryn Mawr, PA 19010 Joseph W. Roskos, Inc.: - ----------------------- Office Space (leased) 2011 Renaissance Blvd.(9) 1999 month-to-month basis Suite 200 King of Prussia, PA 19406 (1) This branch is on the lobby level of an office building and has been established to primarily meet the needs of the occupants of the office building and the surrounding community. There is an automatic teller machine located within the facility. The lease is for 705 square feet and expires on July 31, 2001. (2) This branch office has been established primarily to meet the needs of the residents of the Life Care Community in which it is located. (3) This lease is for 1,250 square feet of office space to house the Investment Management and Trust Division's Investment Counsellors of Bryn Mawr ("ICBM"). ICBM was established in January 1996 to provide investment advisory services to both existing and new clients of the Investment Management and Trust Division. The lease expires on October 1, 2008. (4) This property is contiguous to the Bank's main office, originally housed a gas station, which was demolished. This property houses a walk-in lobby, expanded drive-up facility 34 and a meeting room, and was put in service in August, 1990. (5) This property became the new location of the Bank's Investment Management Trust Division, in mid-December, 1989. The Corporation leased the property to the prior owners on a month-to-month basis through June, 1989. (6) This lease is for 350 square feet of office space to house TCBM's staff. The lease is on a month-to-month basis. (7) This lease is for 24,800 square feet of office space to house the support staff currently located in the Bank's main office at 801 Lancaster Avenue. The support areas which will relocate are Audit, Human Resources, Marketing, and Comptrollers. (8) This lease is for 770 square feet of office space to house CDC's staff. The lease is on a month-to-month basis. (9) This lease is for 7,527 square feet of space to house the employees of JWR&Co which is located in King of Prussia, Pennsylvania. The term of the lease is for 66 months (5 years and six months) which commenced February, 1999. 35 ITEM 3. LEGAL PROCEEDINGS -------------------------- Neither the Corporation nor any of its subsidiaries is a party to, nor is any of their property the subject of, any material legal proceedings other than ordinary routine litigation incident to their businesses. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ------------------------------------------------------------ No matter was submitted during the fourth quarter of the fiscal year covered by this report to a vote of security holders which is required to be disclosed pursuant to the instructions contained in the form for this report. 36 PART II ------- ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK ------------------------------------------------- AND RELATED STOCKHOLDER MATTERS ------------------------------- The information required by this Item 5 is incorporated by reference to the information appearing under the caption "Price Range of Shares" on page 31 of the Financial Section of the Corporation's Annual Report to Shareholders for the year ended December 31, 1999. ITEM 6. SELECTED FINANCIAL DATA -------------------------------- The information required by this Item 6 is incorporated by reference to the information appearing under the caption "Selected Financial Data" on page 1 of the Financial Section of the Corporation's Annual Report to Shareholders for the year ended December 31, 1999. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL ---------------------------------------------------------- CONDITION AND RESULTS OF OPERATIONS ----------------------------------- The information required by this Item 7 is incorporated by reference to the information appearing under the caption "Management's Discussion and Analysis" on pages 2 to 17 of the Financial Section of the Corporation's Annual Report to Shareholders for the year ended December 31, 1999. 37 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ---------------------------------------------------- The financial statements and the auditor's report thereon and supplementary data required by this Item 8 are incorporated by reference on pages 18 to 37 of the Financial Section of the Corporation's Annual Report to Shareholders for the year ended December 31, 1999. ITEM 9. CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON -------------------------------------------------------- ACCOUNTING AND FINANCIAL DISCLOSURE ----------------------------------- There were no matters, which are required to be disclosed in this Item 9 pursuant to the instructions contained in the form for this report. 38 PART III -------- ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT ------------------------------------------------------------ The information with respect to Directors of the Corporation is incorporated by reference on pages 5 through 8 of the definitive proxy statement of the Corporation filed with the Securities and Exchange Commission pursuant to Regulation 14A. Executive Officers of the Corporation. Below is certain information with ------------------------------------- respect to the executive officers of the Corporation and Bank as of March 1, 1999: AGE AS OF OFFICE WITH THE NAME MARCH 1, 2000 CORPORATION AND/OR BANK ---- ------------- ----------------------- Robert L. Stevens 62 Chairman, President and Chief Executive Officer, Director of Corporation and Bank Samuel C. Wasson, Jr. 61 Secretary and Director of Corporation and Bank and Vice Chairman of Bank Joseph W. Rebl 55 Treasurer of Corporation and Senior Vice President, Treasurer & Chief Financial Officer of Bank Robert J. Ricciardi 51 Vice President of the Corporation and Executive Vice President of the Bank, Chief Credit Policy Officer Paul M. Kistler 63 Senior Vice President of Bank, Human Resources, Facilities, Security and Compliance Thomas M. Petro 41 Senior Vice President of Bank-Investment Management Joseph W. Roskos 51 Executive Vice President of Trust 39 AGE AS OF OFFICE WITH THE NAME MARCH 1, 2000 CORPORATION AND/OR BANK ---- ------------- ----------------------- Leo M. Stenson 49 Senior Vice President and Auditor of Bank Joseph G. Keefer 41 Senior Vice President and Chief Lending Officer Alison E. Gers 42 Senior Vice President Marketing June M. Falcone 33 Senior Vice President-Banking Operations Richard J. Fuchs 51 Group Vice President Community Banking Mr. Stevens was employed by the Bank in 1960 and elected an Assistant Treasurer in 1962. He was elected an Executive Vice President with responsibility for lending functions in 1968. He was elected a director in 1974 and was elected President and Chief Executive Officer of the Bank, effective January 1, 1980. Upon the formation of the Corporation in 1986, he was appointed the President and Chief Executive Officer and a director. In December, 1995, Mr. Stevens was appointed Chairman, President and Chief Executive Officer of the Bank and Corporation. In early 1998 Mr. Wasson assumed responsibility for the information systems and banking operations functions. Mr. Wasson was employed by the Bank in 1966. Later that year he was elected an Assistant Treasurer. He was elected a Vice President in 1969 and in 1980 was elected Treasurer of the Bank. In 1981, Mr. Wasson was elected a Senior Vice President and elected a director of the Bank and upon the formation of the Corporation in 1986, he was elected a Vice President and 40 director of the Corporation. In January, 1992, he was elected Secretary of the Corporation and Bank and relinquished the title of Vice President of the Corporation. In November, 1993, he was elected Executive Vice President of the Bank. In November 1997, he was elected Vice Chairman and assumed responsibility for the day-to-day operation of the Bank. Mr. Ricciardi was employed by the Bank in 1971 and elected an Assistant Treasurer in 1973. Mr. Ricciardi was elected an Assistant Vice President of the Bank in 1976 and a Vice President in 1981. In 1989, Mr. Ricciardi was elected Senior Vice President of Real Estate Lending. In November, 1993, he was elected Executive Vice President and assumed responsibility for the Bank's Community Banking Division. In November 1997, Mr. Ricciardi was named the Bank's Chief Credit Policy Officer and relinquished responsibility for the Community Banking Division to Thomas M. Petro. Mr. Rebl was employed by the Bank and elected its Comptroller in 1981. He was elected Vice President and Comptroller in 1983 and Senior Vice President in 1987. Upon the formation of the Corporation in 1986, Mr. Rebl was elected Treasurer of the Corporation. In 1992, Mr. Rebl was designated the Bank's Senior Vice President-Finance. In 1994, Mr. Rebl was designated Treasurer of the Bank. In 1999, Mr. Rebl was designated Chief Financial Officer of the Bank. Mr. Kistler was retained by the Bank as a human resources consultant in November 1992 and was appointed Senior Vice President of Human Resources, Facilities in January 1993, in April 1993 assumed responsibility for the Bank's marketing function and in August, 1996, Mr. Kistler assumed responsibility for the information systems and banking operations and turned 41 over responsibility for the Bank's marketing function to Mr. Petro. In early 1998, Mr. Kistler turned over responsibility for the information systems and banking operations areas to Mr. Wasson. In September 1998, Mr. Kistler assumed responsibility for the Bank's Compliance and Security functions. From 1976 to 1992, Mr. Kistler was employed by Philadelphia National Bank (now merged into First Union Bank, N.A.) in various capacities including Senior Vice President- Human Resource Manager, Secretary of the Board of Directors, CoreStates Financial Corporation as Manager and CoreSearch as a consultant. Mr. Petro was appointed a Vice President of the Bank in January 1992 and Senior Vice President-Information Management in November 1993. In August 1996, Mr. Petro assumed responsibility for the Bank's marketing function and turned over responsibility for the Bank's banking operations and information systems to Mr. Kistler. In November 1997, he assumed responsibility for the Bank's Community Banking Division from Mr. Ricciardi. In January 1999, Mr. Petro was appointed to the additional role of President and Chief Executive Officer of Bryn Mawr Brokerage Company, Inc., a newly formed subsidiary of the Corporation. In December 1999, Mr. Petro assumed responsibility for the Investment Division and turned over responsibility for the Bank's Community Banking Division to Mr. Fuchs. In January 2000, Mr. Petro was appointed to the additional role of Chairman of CDC Capital Management, Inc. Mr. Roskos was employed by the Corporation on January 1, 1999 as President of JWR&Co, a wholly owned subsidiary, coinciding with the acquisition of that company by the Corporation. Prior to 1999, Mr. Roskos was the majority shareholder and president of JWR&Co. In May 1999, Mr. Roskos was appointed Executive Vice President of the Bank to serve as administrative head of the Trust and Investment Division and a Vice President of the Corporation. In 42 October 1999, he was elected Chairman of JWR&Co. In December 1999, Mr. Roskos turned over responsibility for the investment management function to Mr. Petro while continuing to head the Trust Division. Mr. Stenson was employed by the Bank as Auditor in 1982, was elected Vice President and Auditor in 1987 and was formerly an Assistant Vice President of Western Savings Bank. In December 1996, Mr. Stenson was elected Senior Vice President and Auditor. In September 1998, Mr. Stenson turned over responsibility for the Bank's Compliance and Security function to Mr. Kistler. Mr. Keefer was employed by the Bank as Vice President in March 1991. He was promoted to Senior Vice President-Commercial Lending in July, 1994 and was made the Bank's Chief Lending Officer in December 1997. Prior to his employment by the Bank, Mr. Keefer was employed by First Pennsylvania Bank, NA from June 1980 until March 1991, where he was a Vice President in the commercial lending division. Ms. Gers was employed by the Bank as Senior Vice President-Marketing in May 1998. Prior to her employment by the Bank, she was Executive Vice President of CoreStates Bank, NA from July 1995 until May 1998, having responsibility for retail and small business marketing, advertising and product development. From February 1988 until August 1992, Ms. Gers was Senior Vice President of Home Unity Savings Bank, having responsibility for retail banking. From January 1986 to October 1987, she was Marketing Director for Colonial Penn Group. From February 1983 until January 1986, she was Product Manager for third party life and health insurance products for National Liberty Marketing. Ms. Falcone was employed by the Bank as a Junior Accountant in the 43 Comptrollers' Department in February 1989. She was appointed Assistant Comptroller in January 1991. She became Assistant Vice President, having responsibility for deposit accounting in December 1992. In August 1994, Ms. Falcone was appointed Vice President. In October 1996 she was appointed Group Vice President. Ms. Falcone assumed responsibility for the Bank's Cash Management and Electronic Services department in January 1997. She was appointed Senior Vice President-Banking Operations, Cash Management and Electronic Services in November 1997. Mr. Mixon was employed by the Bank in June 1969 as a teller. He was appointed Assistant Treasurer in the Bank's Community Banking Division in January 1974. In January 1976, he was appointed Assistant Vice president. In September 1983, Mr. Mixon was appointed Vice President. He assumed responsibility for the Bank's Operations Department in January 1986. In 1995, he was appointed Group Vice president in charge of Information Systems. In March 1997, he was appointed Senior Vice President-Information Systems. In January 1999, he was also made the Bank's Chief Technology Officer. Mr. Fuchs was employed by the Bank in January 1993 as Vice President-Branch operations. He was promoted to Group Vice President-Branch Operations in December 1997 and assumed responsibility for the Community Banking Division in December 1999. Mr. Fuchs had previously been employed by the Bank from 1971 1987. In September 1987 he resigned his positions as Vice President-General Banking to pursue other business interests. From 1987 until he rejoined the Bank in 1993 Mr. Fuchs owned and operated a retail franchise. None of the above executive officers has any family relationship with any other executive officer or with any director of the Corporation or Bank. 44 ITEM 11. EXECUTIVE COMPENSATION -------------------------------- The information required by this Item 11 is incorporated by reference on pages 8 through 18 of the definitive proxy statement of the Corporation, filed with the Securities and Exchange Commission pursuant to Regulation 14A. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL -------------------------------------------------- OWNERS AND MANAGEMENT --------------------- The information required by this Item 12 is incorporated by reference on page 2, and pages 6 through 8 of the Corporation's definitive proxy statement, filed with the Securities and Exchange Commission pursuant to Regulation 14A. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS -------------------------------------------------------- There were no relationships or transactions required to be disclosed in this Item 13 pursuant to the instructions contained in the form for this report, as discussed on page 16 of the Corporation's definitive proxy statement, filed with the Securities and Exchange Commission pursuant to Regulation 14A. 45 PART IV ------- ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES ------------------------------------------------- AND REPORTS ON FORM 8-K ----------------------- (a) The following exhibits are filed as a part of this report. EXHIBIT TABLE - ------------- 3 - Articles of Incorporation and By-Laws ---------------------------------------- (A) Articles of Incorporation, effective August 8, 1986, are incorporated by reference to Form S-4 of the Registrant, No. 33-9001. (B) By-Laws of the Registrant, as amended July 20, 1990, is incorporated by reference to the Corporation's 10-K, filed with the Securities and Exchange Commission on March 26, 1991. 4 - Instruments defining the rights of security holders -------------------------------------------------------- Articles of Incorporation and By-Laws: See Item 3(A) & (B) above. 10 - Material Contracts ----------------------- (A) Agreement dated December 31, 1990, between The Bryn Mawr Trust Company and Mellon Bank, N.A. is incorporated by reference to the Corporation's 10-K, filed with the Securities and Exchange Commission on March 26, 1991. (B) Mortgage dated December 16, 1988 between Fidelity Mutual Life Insurance Company and Bryn Mawr Bank Corporation is incorporated by reference to the Corporation's 10-K, filed with the Securities and Exchange Commission on March 28, 1990. (C) Mortgage dated May 18, 1988 between John A. Sparta and Helen M. Sparta of the one part and Bryn Mawr Bank Corporation of the other part, is incorporated by reference to the Corporation's 10-K, filed 46 with the Securities and Exchange Commissions on March 28, 1990. (D) Agreement dated December 20, 1990 between Bryn Mawr Bank Corporation and Profit Research by reference to the Corporation's and Exchange Commissions on Consulting, Inc., is incorporated 10-K, filed with the Securities March 28, 1990. (E) Letter of Understanding dated December 20, 1990, between Bryn Mawr Bank Corporation and Profit incorporated by reference to the Securities and Exchange Research Group, Inc., is Corporation's 10-K, filed with Commissions on March 28, 1990. (F) License Agreement dated December 20, 1990, between Profit Research Consulting, Inc. and Profit Research Group, Inc., is incorporated by reference to the Corporation's 10-K, filed with the Securities and Exchange Commissions on March 28, 1990. The Bryn Mawr Bank Corporation Amended and Restated 1986 Stock Option and Stock Appreciation Plan, is hereby incorporated by reference to the Corporation's Proxy Statement dated March 14, 1994 and filed with the Commission as Appendix A to the Proxy Statement on March 15, 1994. (H) License Agreement dated December 30, 1994, between Bryn Mawr Bank Corporation and FIserv Cir, Inc. is incorporated by reference to the Corporation's 10-K, filed with the Securities and Exchange Commission on March 31, 1995. (I) The Bryn Mawr Bank Corporation Non-Employee Directors Stock Option Plan, is hereby incorporated by reference to the Corporation's Proxy Statement March 10, 1995 and filed with the Commission as Appendix A to the Proxy Statement on March 10, 1995. (J) The Bryn Mawr Bank Corporation 1998 Stock Option Plan, is hereby incorporated by reference to the Corporation's Proxy Statement dated March 2, 1998 and filed with the Commission as Exhibit A to 47 the Proxy Statement. (K) Agreement dated May 2, 1997, between The Bryn Mawr Trust Company and Marshall and Ilsley Corporation, to provide data processing services to the Bank's Investment Management and Trust Division by reference into this filing of the Corporation's Form 10-K. (L) Agreement dated January 1, 1999 between Bryn Mawr Brokerage Company, Inc. and UVEST Financial Services Group, Inc., to provide brokerage support services to BM Brokerage is incorporated by reference into this filing of the Corporation's Form 10-K. (M) Lease dated March 1, 1999 between The Bryn Mawr Trust Company and Anthony J. Marcozzi and The Real Viking, Inc. for the property and the buildings known as 2 and 6 Bryn Mawr Avenue. The term of this lease is for an initial period of twenty-nine years with the option to extend for one-ten year period with the same terms and conditions as the initial lease. 13 - Annual Report to Security Holders - --------------------------------------- The Registrant's 1999 Annual Report to Shareholders is attached herewith as Exhibit 13. Such Annual Report, except for the portions thereof that are expressly incorporated by reference herein, is only furnished for the information of the Securities and Exchange Commission and is not deemed to be filed as a part of this Form 10-K. 22 - Subsidiaries of the Registrant - ----------------------------------- Name State of Incorporation ---- ---------------------- The Bryn Mawr Trust Company Pennsylvania Bryn Mawr Financial Services, Inc. Pennsylvania Tax Counsellors of Bryn Mawr, Inc. Pennsylvania 48 Name State of Incorporation ---- ---------------------- The Bryn Mawr Trust Company (Jersey), Ltd. Island of Jersey, Channel Islands Bryn Mawr Brokerage Co., Inc. Pennsylvania Joseph W. Roskos Co., Inc. Pennsylvania CDC Capital Management, Inc. Pennsylvania 23 - Consent of Independent Accountants - --------------------------------------- Consent of Independent Accountants filed herewith as Exhibit 23. 27 - Financial Data Schedule - ---------------------------- Financial Data Schedule is filed herewith as Exhibit 27 99 - Portions of the Proxy Statement - ------------------------------------ Excerpts from the Registrant's Proxy Statement for its 2000 Annual Meeting to be held on April 18, 2000 are filed with the Securities and Exchange Commission on March 7, 2000 as Exhibit 99. (b) No reports on Form 8-K were filed by the Registrant during the quarter ended December 31, 1999. 49 INDEX TO FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS ----------------------------------------------------- The report of Independent Certified Public Accountants as pertaining to the Consolidated Financial Statements of Bryn Mawr Bank Corporation and related notes is incorporated by reference to page 37 of the Financial Section of the Corporation's 1999 Annual Report to Shareholders. Consolidated Financial Statements and related notes are incorporated by reference to the Financial Section of the Corporation's 1999 Annual Report to Shareholders, and may be found on the pages of said Report as indicated in the parenthesis: Balance Sheets, December 31, 1999 and 1998 (page 18) Statements of Income for the years ended December 31, 1999, 1998 and 1997 (page 19) Statements of Comprehensive Income for the years ended December 31, 1999, 1998 and 1997 (page 22) Statements of Changes in Shareholders' Equity for the years ended December 31, 1999, 1998 and 1997 (page 21) Statements of Cash Flows for the years ended December 31, 1999, 1998 and 1997 (page 20) Notes to Financial Statements (pages 23 to 36) Supplementary Data: Quarterly Results of Operations are incorporated by reference to the information under the caption "Selected Quarterly Financial Data (Unaudited)", in Note 18 on page 34 of the Financial Section of the Corporation's Annual Report to Shareholders for the fiscal years ended December 31, 1999 and 1998. Financial Statement Schedules are omitted because of the absence of the conditions under which they are required or because the information called for is included in the Consolidated Financial Statements or notes thereto. Exhibits: For information regarding exhibits, including those incorporated by reference, see pages 46 through 50 of this report. 50 SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Corporation and in the capacities and on the date indicated. NAME TITLE DATE ---- ----- --- /s/ Robert L. Stevens Chairman, President March 24, 2000 - ----------------------------- -- Robert L. Stevens and Chief Executive Officer (Principal Executive Officer) and Director /s/ Joseph W. Rebl Treasurer (Principal March 23, 2000 - ----------------------------- -- Joseph W. Rebl Financial and Principal Accounting Officer) /s/ Richard B. Cuff Director March 23, 2000 - ----------------------------- -- Richard B. Cuff _____________________________ Director March __, 2000 Warren W. Deakins _____________________________ Director March __, 2000 John D. Firestone /s/ William Harral III Director March 25, 2000 - ----------------------------- -- William Harral III Director March ___, 2000 _____________________________ Wendell F. Holland 51 NAME TITLE DATE ---- ----- ---- /s/ Phyllis M. Shea Director March 24, 2000 - --------------------------- -- Phyllis M. Shea ____________________________ Director March __, 2000 B. Loyall Taylor, Jr. /s/ Nancy J. Vickers Director March 24, 2000 - --------------------------- -- Nancy J. Vickers /s/ Samuel C. Wasson, Jr. Director March 24, 2000 - --------------------------- -- Samuel C. Wasson, Jr. Director March __, 2000 - --------------------------- Thomas A. Williams 52 Commission File No. 0-15261 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ____________________________________________________________ FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the Year Ended December 31, 1999 ____________________________________________________________ B R Y N M A W R B A N K C O R P O R A T I O N E X H I B I T S 53