Good morning, ladies and gentlemen. My name is Laura. I will be your conference call operator today. At this time, I would like to welcome everyone to the Bryn Mawr Bank Corporation’s Quarterly Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer period. [Operator Instructions] Thank you. Please note this event is being recorded. It is now my pleasure to turn the floor over to your host, Duncan Smith, Chief Financial Officer. Sir, you may begin your conference.

Thank you, Laura and thanks for joining us everybody today. I hope you had a chance to review our most recent press release. If you have not received the press release, it is available on our website at bmtc.com. Frank Leto, President and CEO of Bryn Mawr Bank Corp. has some comments on the quarter and our strategic initiatives. After that, we will take your questions. The archives of this call will be available at Bryn Mawr Bank Corp.’s website or by calling 877-344-7529 referring to conference number 10062202. A replay will be available approximately two hours after the call. Before we begin, please be advised that during the course of this conference call, management may make forward-looking statements, which are not historical facts. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include but are not limited to the words may, will, would, could, should, likely, possibly, probably, potentially, predict, contemplate, continue, believe, expect, anticipate, outlook, project, forecast, are optimistic, are looking, intend, plan, target, estimate, or words or phrases of similar meaning. Forward-looking statements by their nature are subject to risks and uncertainties. A number of factors, many of which are beyond the Corporation’s control, could cause actual conditions, events, or results to differ significantly from those described in these forward-looking statements. All forward-looking statements discussed during this call are based on management’s current beliefs and assumptions and speak only as of the date and time they are made. The Corporation does not undertake to update forward-looking statements. For a complete discussion of the assumptions, risks, and uncertainties related to our business, you are encouraged to review our filings with the SEC located on the website. Thanks. And I’ll turn the call over to Frank.

Thanks Duncan, and I'd like to thank you all for joining our conference call today. I hope you had a chance to review our first quarter earnings press release which was issued yesterday. We're pleased with our strong results and we [ph] begin to recognize the scale added by the Continental merger as well as the contribution of our growing insurance division and our strategic initiatives. The merger with Continental was completed on January 01, and brought approximately $427 million in loans and $482 million in deposits in addition to nine new full-service branches. Our staff and management have been hard at work integrating the two institutions and we remain confident that the former clients of Continental will experience a seamless transition to the Bryn Mawr Trust network which is expected to occur during the fourth quarter of this year. Having completed eight mergers and acquisitions in recent years, we have built a team of highly skilled individuals who are devoted to integrating the operations of the companies we acquire. The same team is also heavily involved in the due diligence process as new opportunities arise. In addition to the Continental merger, the acquisition of Powers Craft Parker and Beard which closed in October of last year is fully integrated and is producing positive effects on our bottom line. To further bolster our insurance division on April 01 of this year we acquired the Robert J. McAllister Agency, another full-service insurance and advisory firm providing insurance and risk management solutions to individuals and businesses in the Philadelphia area. The combination of Powers Craft and McAllister will open our insurance division to several new markets and it continues to increase its scale, making it eligible for more favorable pricing from insurance carriers. Lastly, our mortgage banking initiative which began to ramp…

Thank you. At this time we will begin the question and answer session. [Operator Instructions] And our first question will come from Chris McGratty of KBW.

Hey, good morning everybody.

Good morning.

Good morning, Chris.

Okay, Duncan, maybe start with you, a lot going on with the balance sheet and your cash position was up substantially so from securities, can you help us on the kind of your earning asset levels from here, are we done with kind of the right sizing of the combined institution, should we see the securities book kind of hold where it is or is there anything left to be done?

Good question. As we mentioned, as Frank mentioned in his opening remarks there, we did shrink the opening balance sheet from day one of the acquisition by about $115 million that was short-term borrowings came out and then accordingly cash and securities. So right now cash is a little bit higher than we would like to carry, partly we do every year experience a seasonal influx of cash during the first quarter and a lot of that runs out right way at the end of the - around about April '15. So it is going off to Washington. So, we are going to see the cash levels lower. We're probably going to continue to restructure the investment portfolio a little bit, but the levels should remain about where they are in investment portfolio. It's probably the cash and hopefully we'll be deploying that in the loans or put it out in new investments.

Okay, that's helpful.

Okay.

And the kind of the followup to that is, if your core margin if you kind of back out the accretion you guys are starting to back disclose, that obviously was impacted by cash. So the question is, is the – how should we be thinking about the near-term margin given the restructuring? My guess is you'll get some relief from the activity that you talked about from either better loan growth and security deployments, so should we see a sequential improvement in the margin or is there competitive pressures that will offset that?

Yes, I think it's probably flat due to Duncan said pricing in the market of new loan books. I hope nobody pays off and we stay exactly where we are and but it is a lot of the irrational pricing out there and some very, very low rates and so that pressure will be there. The margin or the accretive yield obviously is going to be higher than it has all last year, but it is tempered or it's characterized by – it's done on a loan level. So depending on the speed of the loan payoffs and/or how long they stay with us then that will mitigate a little bit, but it's certainly going to be an elevated level for quite some time.

Got it, okay. And last question I have for you is, I think you talked about last quarter this year not a ton of the cost days [ph] will come in, but next year is kind of where you get the guts of them to kind of come in to the bottom line, kind of adjusting for the noise in the first quarter, how should we think about the near-term expense run rate of the company?

Well, it's $27.5 million for the first quarter, the reported number. You obviously see that about $2.5 million is merger cost and in that merger costs we do have what we consider redundant systems, redundant staffing and people who are scheduled to exit at some point in the future. So that number is in the merger cost number, but things like intangible pieces like focus the cost you can't really quantify that number. So that's not in that number. So, but we do expect once we get and working on several on several IT initiatives right now to get us through the conversion and then sure we will see efforts and spend a little bit more on growth then integrating this merger. So we should see that starting in the first quarter of next year we'll get the full effect. Additionally, there were prepayment penalties and swap payment fees about $0.50 million. So you take another $0.50 million out there. So the run rate is probably around 24 to 24.5 for expenses.

Okay.

That helps?

That's very helpful. Thanks a lot.

Thanks.

And our next question will come from Matt Schultheis of Boenning.

Excuse me, good morning.

Good morning Matt.

Good morning Matt.

Really quickly, can you shed a little bit of light onto what you expect the impact of McAllister to be from a financial impact?

Well Matt, it's Frank. I think I said in my opening remarks, McAllister should generate about an additional $0.50 million in insurance revenues. I think that thing that's hard to quantify right now is the pricing break we are going to get given the larger amount of volume that we're going to put through a couple of the insurers. There were some crossover with some of the insurers that both Powers Craft and McAllister and we're going to get a better commission structure with the larger volume going through. We just haven’t been able to quantify it yet, probably have a better idea at the end of this first quarter.

Okay, and then your capital ratios are still very strong and, I was just trying to get a sense of your appetite for acquisitions, are you going to focus more on the fee side, more on the bank side or sort of agnostic depending on availability?

Well, that word agnostic has gotten everybody in the room smiling because that's pretty much the way we look at acquisitions. I think we are focusing on both to be honest with you, I mean we want to continue to build up the non-interest income side of this business. I mean you know, it's a personal goal we set up, so more even with the interest income side, so, but you got to take the opportunities as they come and I think the M&A market in the bank space is certainly heating up, at least that's what we're seeing. So, I think we are going to take advantage of opportunities as they arise whether they be wealth insurance or bank.

Well, Matt, with respect to capital, we stated before our TCE kind of goal that we would like to ideally be at is round that 8% number. So we're a little bit on the high side, but that's fine for now, but we do recognize as you said that the capital ratios are good and that kind of 8% is our managed target for TCE.

Okay, alright. Thank you very much.

Thanks Matt.

[Operator Instructions] And showing no further questions, I would like to turn the call back over to management for any closing remarks.

Well, thanks again everybody for tuning in and we look forward to a great second quarter. Thanks.