Bryn Mawr Bank Corp., a community bank based in Bryn Mawr, Pa., reported a sharp increase in revenue from wealth management services in the second quarter of 2012 thanks to its acquisition of Davidson Trust Company in May.
Wealth management services brought in $7.2 million in revenue, up 42.1% from the $5.1 million generated in the same quarter in 2011, the bank announced in a press release.
The acquisition of Davidson Trust helped boost Bryn Mawr's assets under management, administration, supervision and brokerage to $6.3 billion, up 30%, from a year earlier. The growth was also due to the division's strategic initiatives, Ted Peters, the company's chairman and CEO, said during an earnings conference call Friday.
"We expect this transaction to have a positive effect on our bottom line," Peters said.
The Davidson Trust acquisition together with the acquisition of the Private Wealth Management Group of the Hershey Trust Company in May 2011, however, increased expenses related to salaries and employees benefits for the quarter. Salaries and employee benefits climbed $1.8 million, or 21.8%, as compared to year-ago quarter, due to staffing and annual salary increases, along with increases in health insurance costs, the company said.
Still, the company saw significant savings on the expense side since the Davidson Trust acquisition, even though Davidson has had only one-and-a-half month of contribution , Frank Leto, executive vice president and head of the bank's Wealth Management Division, said during the call. "We expect to continue to see more [savings] as we consolidate Davidson into the division, " he said.
Overall, the company reported strong earnings for the quarter, generating $5.3 million in net income, up 9.5% from $4.8 million in the year-ago quarter. The earnings were driven by the boost in revenue from wealth management services as well as a gain on sale of residential mortgage loans and a decrease in the provision for loan and lease losses.
Bryn Mawr Bank is based in Bryn Mawr, Pa., and has $1.77 billion in corporate assets and $4.83 billion in trust and investment assets under management and administration. The community bank has 17 branches serving residents and businesses in the affluent "Main Line" suburbs of Pennsylvania.