Bryn Mawr's Non-Spread Businesses Show Their Value

In a quarter where bank earnings have been hovering around “okay”, Bryn Mawr (BMTC) showed some of the virtues of its business mix, as strong non-spread businesses offset some noticeable weakness in the core lending operations and drove a beat at the pre-provision line. Not only am I bullish on what these non-spread businesses can do for Bryn Mawr down the road, I’m also generally bullish on management’s plan to shift toward a more balanced commercial lending mix and start targeting some opportunities outside of its core suburban Philly operating footprint.

Valuation doesn’t excite me as much; Bryn Mawr is a better-than-average bank for its peer group, and it’s priced accordingly. I don’t have a problem with a fair value in the neighborhood of $40, but that suggests price appreciation that is more “okay to good” than “must buy now”.

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Bryn Mawr's Non-Spread Businesses Show Their Value