Bryn Mawr Bank Corp. – Value Analysis (NASDAQ:BMTC) : November 21, 2017

Capitalcube gives Bryn Mawr Bank Corp. a score of 57.

Our analysis is based on comparing Bryn Mawr Bank Corp. with the following peers – Univest Corporation of Pennsylvania, S&T Bancorp, Inc., Fulton Financial Corporation, CNB Financial Corporation, Citizens & Northern Corporation, Penns Woods Bancorp, Inc., Norwood Financial Corp., F.N.B. Corporation, Royal Bancshares of Pennsylvania, Inc. Class A and TriState Capital Holdings, Inc. (UVSP-US, STBA-US, FULT-US, CCNE-US, CZNC-US, PWOD-US, NWFL-US, FNB-US, RBPAA-US and TSC-US).

Fundamental Overview

Bryn Mawr Bank Corp. has a fundamental score of 57 and has a relative valuation of UNDERVALUED.

Fundamental Score

Company Overview

  • It’s current Price/Book of 1.84 is about median in its peer group.
  • The market expects BMTC-US to grow at about the same rate as the peers and to maintain the median returns it currently generates.
  • BMTC-US‘s relative capital efficiency and net profit margins are both around the median level.
  • Changes in annual earnings (relative to peers) are better than the change in its revenues (relative to peers), implying the company is focused more on earnings.
  • Over the last five years, BMTC-US‘s return on equity has declined from above median to around median among its peers, indicating declining relative operating performance.
  • BMTC-US‘s revenue growth in recent years and current P/E ratio are both around their respective peer medians suggesting that historical performance and long-term growth expectations for the company are largely in sync.
  • The company is likely overinvesting in a business with only median returns.

Drivers of Margin

  • Margins do not suggest any relative benefit from a pricing or an operating cost advantage.
  • The company’s net interest income (net interest income/total revenues) of 66.65% is around peer median suggesting that BMTC-US‘s lending operations does not benefit from any differentiating pricing advantage. In addition, BMTC-US‘s pre-tax margin of 34.35% is also around the peer median suggesting no operating cost advantage relative to peers.
  • The company’s comparatively healthy proportion of fee based income (i.e. non interest income/total revenues) of 33.35% versus peer median of 23.55% — suggests that BMTC-US‘s operating margins are likely to be less volatile. In addition, BMTC-US‘s proportion of overhead costs (i.e. non interest expense/total revenues) of 62.87x is around peer median — suggesting no cost advantage on fee-based overhead operations.
Drivers of Margins

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Differentiated; High Cost, Commodity; High Cost, Commodity; Low Cost

Company Profile

Bryn Mawr Bank Corp. engages in the provision of a full range of personal and business banking services, consumer and commercial loans, equipment leasing, mortgages, insurance and wealth management services, including investment management, trust and estate administration, retirement planning, custody services, and tax planning and preparation. It operates through Wealth Management, and Banking segments. The Wealth Management segment provides trust administration and other related fiduciary services, custody services, investment management and advisory services, employee benefit account and individual retirement account administration, estate settlement, tax services, financial planning, and brokerage services. The Banking segment is comprised of commercial and retail banking. The company was founded in 1986 and is headquartered in Bryn Mawr, PA.