Bryn Mawr Bank Corporation Reports a 12.5% Increase in Second Quarter Earnings per Share and a 9.1% Dividend Increase

Bryn Mawr Bank Corporation, (NASDAQ:BMTC), (the "Corporation"), parent of The Bryn Mawr Trust Company (the "Bank"), announced second quarter 2006 diluted earnings per share of $0.36, an increase of $0.04 or 12.5% compared to $0.32 in the same period last year. Net income for the second quarter of 2006 was $3.1 million, an increase of 12.5% or $349 thousand, compared to $2.8 million in last year's second quarter. "Our strong performance was led by healthy loan growth during the first six months of the year. Portfolio loans have risen $44.5 million, or 15% annualized, since the end of 2005," commented Chairman and CEO Ted Peters. "However, we continue to see pressure on our deposit gathering activities and deposit pricing function as competition in these areas is intense."

The Corporation's Board of Directors increased the quarterly dividend $0.01 per share or 9.1% from $0.11 to $0.12 per share, payable September 1, 2006, to shareholders of record as of August 7, 2006.

Return on average equity (ROE) and return on average assets (ROA) for the quarter ended June 30, 2006, were 15.70% and 1.74% respectively. ROE was 15.47% and ROA was 1.65% for the same period last year. The major factor contributing to the increase in earnings for the second quarter of 2006 compared to the same period last year was a $703 thousand or 9.1% increase in net interest income (on a tax equivalent basis) to $8.4 million from $7.7 million. The increase in net interest income (on a tax equivalent basis) in the second quarter of 2006 compared to the same period last year was the result of a $48.6 million increase or 7.9% increase in average interest earning assets and a 6 basis point increase in the Corporation's net interest margin to 5.04% from 4.98%.

Diluted earnings per share for the six months ended June 30, 2006, was $0.72, an increase of $0.08 or 12.5%, compared with $0.64 in 2005. Net income for the six months ended June 30, 2006 was $6.3 million, an increase of $683 thousand or 12.2%, compared to $5.6 million in the same period last year. ROE and ROA for the six month period ended June 30, 2006 were 15.98% and 1.79%, respectively. ROE was 15.70% and ROA was 1.67% for the same period last year.

The major factor contributing to the increase in earnings for the six month period ending June 30, 2006 compared to the same period last year was a $1.6 million or 10.4% increase in net interest income (on a tax equivalent basis), partially offset by a $499 thousand or 3.3% increase in noninterest expenses. The increase in net interest income (on a tax equivalent basis) in the first six months of 2006 compared to the same period last year was the result of a $40.8 million or 6.6% increase in average interest earning assets, and an 18 basis point increase in the Corporation's net interest margin to 5.13% from 4.95%.

Asset quality remains strong despite an increase in non-performing assets to $1.7 million at June 30, 2006 from $803 thousand and $415 thousand at March 31, 2006 and December 31, 2005, respectively. The $1.7 million of non-performing loans consists almost entirely of two first lien residential mortgage loans. Non-performing loans as a percentage of gross portfolio loans was 0.26% at June 30, 2006. The allowance for loan losses increased to $7.8 million at June 30, 2006 from $7.4 million at December 31, 2005, however the allowance as a percentage of portfolio loans decreased to 1.22% from 1.24% over the same time period. The decrease in the allowance as a percentage of portfolio loans is attributed to strong loan growth at the end of the second quarter. Net loan charge-offs (recoveries) for the six months ended June 30, 2006 and 2005 were ($14 thousand) and $55 thousand, respectively.

Portfolio loans increased $44.5 million or 7.5% to $639.6 million at June 30, 2006 from $595.2 million at December 31, 2005, reflecting a significant increase in commercial mortgage and construction loan closings in the second quarter of 2006. Second quarter 2006 average portfolio loans increased $26.3 million or 4.5% over fourth quarter 2005 average loans. Investment securities increased steadily over the six month period with June 30, 2006 balances up $12.3 million or 36.8% to $45.7 million from $33.4 million at December 31, 2005. The $32.3 million in federal funds sold at December 31, 2005 represented cash from short term, year-end customer deposits.

The Corporation's interest bearing liabilities at June 30, 2006 include approximately $58 million in wholesale funding compared with $5 million at December 31, 2005. In addition to the wholesale funding, the Corporation has seen a shift in the mix of its core deposits as lower cost interest bearing checking, money market accounts and savings accounts move into higher yielding certificates of deposit. This change in the core deposit mix appears to be a national trend as competition for deposit balances is very intense, high rate advertisements are commonplace and the continued increase in interest rates has resulted in noticeable customer account movement.

Average non-interest bearing deposits were $150.6 million in the second quarter of 2006 compared to $147.3 million in the first quarter of 2006 and $152.2 in the fourth quarter of 2005. Average short term borrowings in the second quarter of 2006 were $16.7 million compared with $3.5 million in the first quarter of 2006 and $1.5 million in the fourth quarter of 2005. At June 30, 2006, the Corporation had over $230 million in unused borrowing capacity at the Federal Home Loan Bank of Pittsburgh along with capacity under federal funds lines of $48 million.

Chairman Ted Peters stated, "The Bryn Mawr Trust Company will continue with the expansion of its retail banking footprint with controlled de novo expansion in the suburban Philadelphia market. Construction has started on the Corporation's new Ardmore branch, and we anticipate its opening in the fourth quarter of 2006. We also expect our new West Chester branch to open in the fourth quarter of 2007. This full service branch will also house the Corporation's Chester County loan production center and a regional office for Wealth Management clients. We are excited about this opportunity to expand our business into the heart of West Chester, the county seat of Chester County, the fastest growing county in Pennsylvania."

Non-interest income for the second quarter of 2006 was $4.6 million, a decrease of $166 thousand or 3.5% compared with $4.7 million in the same period last year. The decline in non-interest income is attributable to a continued decline in residential mortgage related revenues partially offset by an increase of Wealth Management Services fee income. Wealth Management assets under management and administration were $2.195 billion at June 30, 2006, compared with $2.248 billion at December 31, 2005 and $1.901 billion June 30, 2005. The increase in assets under management and administration for the 12 months ended June 30, 2006 is primarily due to an increase in wealth assets resulting from an acquisition made by a significant client in the third quarter of 2005. The decline in assets under management and administration over the past six months is primarily due to equity market valuations.

Non-interest expense for the second quarter of 2006 increased $38 thousand or 0.5% to $7.9 million when compared to the same period last year. Increases in salaries and employee benefits were partially offset by declines in mortgage servicing rights amortization and a decrease in professional fees. The decline in mortgage servicing rights amortization is expected to continue, while the decline in professional fees was partially due to a fewer number of audit engagements required to be performed in the current year. Other expenses include $53 thousand related to an interest rate floor contract with a notional amount of $25 million purchased in April of 2006 for asset liability management purposes.

Non-interest income for the six months ended June 30, 2006, increased nominally when compared to the same period last year. Fees for wealth management services revenues increased $547 thousand or 9.7% to $6.2 million from $5.6 million. Virtually all areas of the Wealth business contributed to the increase in revenues. Other non-interest income categories in the aggregate declined $542 thousand, primarily due to lower residential mortgage related revenue.

Non-interest expense for the six months ended June 30, 2006, increased $499 thousand or 3.3%, to $15.7 million from $15.2 million in the same period last year, primarily due to increased employment related costs and occupancy expenses, partially offset by reduced mortgage servicing rights amortization and reduced professional fees. The reduction in mortgage servicing rights amortization is expected to continue as new mortgage origination volume is lower than in prior periods. The increase in occupancy expenses is related to rent expense on the new Ardmore branch site.

On a sequential basis, diluted earnings per share of $.36 and net income of $3.1 million remain unchanged. Net interest income (on a tax equivalent basis) increased $129 thousand or 1.6% on the strength of a $25.0 million or 3.9% increase in average interest earning assets, partially offset by a 18 basis point decrease in the net interest margin, as the net interest margin decreased to 5.04% from 5.22%. The decline in the net interest margin is attributable to the funding of loan growth with wholesale sources and a continued shift from lower cost core deposits into higher cost certificates of deposit. Management expects these market conditions to continue for the near term, resulting in increased downward pressure on the net interest margin.

Revenue from Wealth Management Services on a sequential basis declined $72 thousand or 2.3% to $3.0 million in the second quarter of 2006 compared with $3.1 million in the first quarter of 2006. This decline is partially attributable to lower fees from estate settlement and fiduciary tax services in the second quarter compared to the first quarter of 2006, as well as the decline in equity market value, particularly in June, in some sectors where our clients invest. Overall non-interest expenses increased $57 thousand or 0.7% to $7.9 million from $7.8 million as a reduction in professional fees was partially offset by increased advertising costs.

In conjunction with this release, the Corporation will host a conference call, followed by a question and answer session, on Friday, July 28th at 9:00 a.m. Eastern Time. Interested parties may participate by calling 973-582-2843 at 8:55 a.m. Eastern Time and referencing conference PIN 7633654. A taped replay of the conference call will be available within two hours of the conclusion of the call and will remain available through August 11, 2006. The number to call for the taped replay is 973-341-3080 and the conference PIN is 7633654.

The conference call will be simultaneously broadcasted live over the Internet through a webcast on the Bryn Mawr Bank Corporation website. To access the call, please visit the website at http://www.bmtc.com/investor_01.cfm. An online archive of the webcast will be available within two hours of the conclusion of the call.

This release contains certain forward-looking statements. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words believe, expect, anticipate, intend, plan, estimate or words 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 the forward-looking statements. Forward-looking statements speak only as of the date they are made. The Corporation does not undertake to update forward-looking statements.

The accompanying financial statements are an integral part of this press release.

Bryn Mawr Bank Corporation
Consolidated Selected Financial Data
(Dollars in thousands, except per share data)
June 30, 2006
(unaudited)
                              For The Three Months Ended

For the period:   Jun 30,    Mar 31,    Dec 31,   Sept 30,   June 30,
                   2006       2006       2005       2005       2005
                ---------- ---------- ---------- ---------- ----------

Interest income   $11,098    $10,345    $10,235     $9,835     $9,165
Interest
 expense            2,795      2,164      1,965      1,788      1,544
                ---------- ---------- ---------- ---------- ----------

Net interest
 income             8,303      8,181      8,270      8,047      7,621
Provision for
 loan losses          209        154        173        209        193
                ---------- ---------- ---------- ---------- ----------
Net interest
 income after
 provision for
 loan losses        8,094      8,027      8,097      7,838      7,428

Fees for wealth
 management
 services           3,048      3,120      2,946      2,972      2,967
Loan servicing
 and late fees        282        290        304        321        339
Service charges
 on deposits          397        379        392        408        398
Net gain on
 sale of loans        254        250        244        456        464
Other operating
 income               594        560        542        567        573
                ---------- ---------- ---------- ---------- ----------
    Noninterest
     income         4,575      4,599      4,428      4,724      4,741

Salaries and
 wages              3,834      3,829      4,183      4,414      3,758
Employee
 benefits           1,131      1,318        999        998        936
Occupancy and
 bank premises        642        624        571        564        581
Furniture
 fixtures and
 equipment            476        482        495        488        498
Advertising           273        200        277        195        312
Amortization of
 mortgage
 servicing
 rights                84         86         92        115        210
Professional
 fees                 209        297        386        318        295
Other expenses      1,253      1,009      1,135      1,095      1,274
                ---------- ---------- ---------- ---------- ----------
    Noninterest
     expense        7,902      7,845      8,138      8,187      7,864

Income before
 income taxes       4,767      4,781      4,387      4,375      4,305
Income tax
 expense            1,630      1,645      1,503      1,499      1,517
                ---------- ---------- ---------- ---------- ----------
    Net income     $3,137     $3,136     $2,884     $2,876     $2,788
                ========== ========== ========== ========== ==========

Per share data:
Weighted
 average shares
 outstanding    8,577,365  8,570,675  8,556,250  8,555,037  8,549,675
Dilutive
 potential
 common shares    113,690    109,837    110,576    107,699     80,772
                ---------- ---------- ---------- ---------- ----------
Adjusted
 weighted
 average
 dilutive 
 shares         8,691,055  8,680,512  8,666,826  8,662,736  8,630,447
                ========== ========== ========== ========== ==========

Basic earnings
 per common
 share              $0.37      $0.37      $0.34      $0.34      $0.33

Diluted
 earnings per
 common share       $0.36      $0.36      $0.33      $0.33      $0.32

Dividend
 declared per
 share              $0.11      $0.11      $0.11      $0.11      $0.10


Note: Certain prior period amounts have been reclassified to conform
to current period presentation.






Bryn Mawr Bank Corporation
Consolidated Selected Financial Data
(Dollars in thousands, except per share data)
June 30, 2006
(unaudited)
                                          For The Six Months Ended

For the period:                             June 30,     June 30,
                                              2006         2005
                                           ----------   ----------

Interest income                              $21,443      $17,822
Interest expense                               4,959        2,847
                                           ----------   ----------

Net interest income                           16,484       14,975
Provision for loan losses                        363          380
                                           ----------   ----------
Net interest income after
      provision for loan losses               16,121       14,595

Fees for wealth management services            6,168        5,621
Loan servicing and late fees                     572          678
Service charges on deposits                      776          793
Net gain on sale of loans                        504          922
Other operating income                         1,154        1,155
                                           ----------   ----------
         Noninterest income                    9,174        9,169

Salaries and wages                             7,663        7,265
Employee benefits                              2,449        2,077
Occupancy and bank premises                    1,266        1,137
Furniture fixtures and equipment                 958          958
Advertising                                      473          488
Amortization of mortgage servicing
 rights                                          170          399
Professional fees                                506          598
Other expenses                                 2,262        2,326
                                           ----------   ----------
         Noninterest expense                  15,747       15,248

Income before income taxes                     9,548        8,516
Income tax expense                             3,275        2,926
                                           ----------   ----------
         Net income                           $6,273       $5,590
                                           ==========   ==========

Per share data:
Weighted average shares outstanding        8,574,038    8,570,533
Dilutive potential common shares             110,676       97,743
                                           ----------   ----------
Adjusted weighted average shares           8,684,714    8,668,276
                                           ==========   ==========

Basic earnings per common share                $0.73        $0.65

Diluted earnings per common share              $0.72        $0.64

Dividend declared per share                    $0.22        $0.20


Note: Certain prior period amounts have been reclassified to conform
to current period presentation.





Bryn Mawr Bank Corporation
Consolidated Selected Financial Data
(Dollars in thousands, except per share data )
June 30, 2006
(unaudited)


For the period:    2006       2006       2005       2005       2005
                    2Q         1Q         4Q         3Q         2Q
Asset Quality
 Data

Nonaccrual
 loans         $      866        773        390        273        678
90 + days past
 due loans            794          5          -          -          -
               ----------- ---------- ---------- ---------- ----------
Nonperforming
 loans         $    1,660        778        390        273        678
OREO                    -         25         25          -        210
               ----------- ---------- ---------- ---------- ----------
Nonperforming
 assets        $    1,660        803        415        273        888
               =========== ========== ========== ========== ==========

Allowance for
 loan losses   $    7,779      7,571      7,402      7,392      7,252
Allowance for
 loan losses /
 loans               1.22%      1.25%      1.24%      1.25%      1.22%
Allowance for
 loan losses /
 nonperforming
 loans                469%       973%     1,898%     2,708%     1,070%
Nonperforming
 loans / loans       0.26%      0.13%      0.07%      0.05%      0.11%
Nonperforming
 assets /
 assets              0.22%      0.11%      0.06%      0.04%      0.13%
Net loan
 charge-offs
 (recoveries)           1        (15)       162         69         66
Net loan
 charge-offs
 (annualized)/
 average loans        NC*        NC*       0.11%      0.05%      0.05%



                   2006       2006       2005       2005       2005
                    2Q         1Q         4Q         3Q         2Q
Selected
 ratios
 (annualized):

Return on
 average
 assets               1.74%     1.83%      1.65%      1.65%      1.65%
Return on
 average
 shareholders'
 equity              15.70%    16.27%     15.04%     15.35%     15.47%
Yield on
 interest
 earning
 assets**             6.72%     6.58%      6.41%      6.18%      5.98%
Cost of
 interest
 bearing funds        2.35%     1.92%      1.73%      1.57%      1.37%
Net interest
 margin**             5.04%     5.22%      5.19%      5.07%      4.98%
Tier 1
 leverage
 ratio               11.39%    11.53%     11.25%     11.02%     10.87%
Book value per
 share          $     9.52      9.29       9.06       8.86       8.63
Tangible book
 value per
 share          $     9.52      9.29       9.06       8.86       8.63
Period end
 shares
 outstanding     8,575,398 8,575,555  8,556,255  8,559,105  8,543,046

Selected data:

Mortgage loans
 originated     $   31,966    34,451     33,146     62,759     46,010
Mortgage loans
 sold -
 servicing
 retained       $    3,615     7,010      6,889     11,016      9,972
Mortgage loans
 sold -
 servicing
 released       $   13,127     7,436     18,460     23,051     16,817
Mortgage loans
 serviced for
 others         $  395,091   409,429    417,649    438,183    465,780

Wealth assets
 under
 management /
 administration $2,195,258 2,262,064  2,247,630  2,205,380  1,900,928


                              2006                  2005
                           Year-to-date          Year-to-date
Selected
 ratios
 (annualized):

Return on
 average
 assets                         1.79%                 1.67%
Return on
 average
 shareholders'
 equity                        15.98%                15.70%
Yield on
 interest
 earning
 assets**                       6.65%                 5.89%
Cost of
 interest
 bearing funds                  2.14%                 1.28%
Net interest
 margin**                       5.13%                 4.95%


Mortgage loans
 originated               $   66,417                84,559
Mortgage loans
 sold -
 servicing
 retained                 $   10,625                23,759
Mortgage loans
 sold -
 servicing
 released                 $   20,563                37,026


* Not calculated as there were no significant 2006 charge-offs

** Yield on interest earning assets and net interest margin are
   calculated on a tax equivalent basis.





Bryn Mawr Bank Corporation
Consolidated Selected Financial Data
(Dollars in thousands)
June 30, 2006
(unaudited)
                                       As of
Balance Sheet
                   Jun 30,   Mar 31,   Dec 31,  Sept 30,   June 30,
                    2006      2006      2005      2005      2005
                  --------- --------- --------- --------- ---------
Assets

   Interest
    bearing
    deposits
    with banks        $642      $508      $405    $8,075      $314
   Fed funds
    sold                 -         -    32,341         -         -
   Investment
    securities      45,697    41,488    33,397    33,968    34,215

    Loans held
     for sale        6,369     4,061     2,765     9,073     8,147

  Portfolio
   loans:
    Consumer         8,863     9,149     9,437     8,791     9,482
    Commercial &
     industrial    166,442   165,508   170,283   172,115   193,402
    Commercial
     mortgages     178,253   166,816   162,621   162,187   149,604
    Construction    65,097    49,375    45,523    37,386    42,842
    Residential
     mortgages     108,820   106,196    99,602    95,351    84,176
    Home equity
     lines &
     loans         112,157   109,534   107,699   106,562   106,327
                  --------- --------- --------- --------- ---------
Total portfolio
 loans             639,632   606,578   595,165   582,392   585,833

Earning assets     692,340   652,635   664,073   633,508   628,509

   Cash and due
    from            27,529    26,132    33,896    30,976    33,979
   Allowance for
    loan losses     (7,779)   (7,571)   (7,402)   (7,392)   (7,252)
   Other assets     39,392    38,737    36,659    35,875    35,516
                  --------- --------- --------- --------- ---------

Total assets      $751,482  $709,933  $727,226  $692,967  $690,752
                  ========= ========= ========= ========= =========

   Interest-
    bearing
    checking      $134,754  $142,606  $154,319  $148,042  $140,271
   Money market    106,401   115,920   112,319   118,548   125,972
   Savings          43,303    44,830    46,258    47,721    51,141
   Time deposits   197,980   153,412   155,322   137,262   126,538
                  --------- --------- --------- --------- ---------
Interest-bearing
 deposits          482,438   456,768   468,218   451,573   443,922

   Non-interest
    bearing
    deposits       152,092   151,324   168,042   153,084   161,448
                  --------- --------- --------- --------- ---------
Total deposits     634,530   608,092   636,260   604,657   605,370

Borrowed funds      22,700     8,000         -         -         -
Other
 liabilities        12,597    14,171    13,453    12,491    11,617
Shareholders'
 equity             81,655    79,670    77,513    75,819    73,765
                  --------- --------- --------- --------- ---------

Total liabilities
 and shareholders'
 equity           $751,482  $709,933  $727,226  $692,967  $690,752
                  ========= ========= ========= ========= =========

Balance Sheet
 (average)
                    2006      2006      2005      2005      2005
                     2Q        1Q        4Q        3Q        2Q
                  --------- --------- --------- --------- ---------


   Interest
    bearing
    deposits
    with banks        $687      $439    $1,176    $4,730      $536
   Fed funds
    sold             1,467     6,161     8,115     7,420     5,119
   Investment
    securities      44,197    37,069    34,501    34,520    34,828
   Loans held
    for sale         3,304     3,217     3,142     8,690     9,046
   Portfolio
    loans          617,627   595,446   591,294   580,036   569,127
                  --------- --------- --------- --------- ---------
Earning assets     667,282   642,332   638,228   635,396   618,656

   Cash and due
    from            24,666    24,332    25,754    27,413    33,259
   Allowance for
    loan losses     (7,686)   (7,524)   (7,460)   (7,359)   (7,251)
   Other assets     37,803    35,819    35,162    34,993    34,975
                  --------- --------- --------- --------- ---------

Total assets      $722,065  $694,959  $691,684  $690,443  $679,639
                  ========= ========= ========= ========= =========

   Interest-
    bearing
    checking      $140,400  $141,504  $141,441  $142,400  $148,943
   Money market    110,710   118,365   117,033   126,128   119,261
   Savings          43,738    45,073    46,699    49,695    50,897
   Time deposits   166,228   147,610   143,156   133,052   128,777
                  --------- --------- --------- --------- ---------
Interest-bearing
 deposits          461,076   452,552   448,329   451,275   447,878

   Non-interest
    bearing
    deposits       150,586   147,274   152,230   152,048   146,140
                  --------- --------- --------- --------- ---------
Total deposits     611,662   599,826   600,559   603,323   594,018

Borrowed funds      16,738     3,544     1,505       516     3,540
Other
 liabilities        13,487    13,419    13,534    12,303     9,803
Shareholders'
 equity             80,178    78,170    76,086    74,301    72,278
                  --------- --------- --------- --------- ---------

Total liabilities
 and shareholders'
 equity           $722,065  $694,959  $691,684  $690,443  $679,639
                  ========= ========= ========= ========= =========


Note: Certain prior period amounts have been reclassified to conform
to current period presentation.





       Quarterly Average Balances and Tax Equivalent Income and
                   Expense and Tax Equivalent Yields

(unaudited)             2nd Quarter 2006         1st Quarter 2006

(dollars in                           Average                  Average
 thousands)                  Interest  Rates          Interest  Rates
                     Average  Income/ Earned/ Average  Income/ Earned/
                     Balance  Expense  Paid   Balance  Expense  Paid

Assets:
Interest-bearing
 deposits with other
 banks                  $687      $8   4.67%     $439      $5   4.62%
Federal funds sold     1,467      18   4.92%    6,161      66   4.34%
Investment
 securities
 available for sale   44,197     475   4.31%   37,069     366   4.00%

Loans                620,931  10,683   6.90%  598,663   9,987   6.77%

                    -----------------        -----------------
     Total interest
      earning assets 667,282  11,184   6.72%  642,332  10,424   6.58%

Cash and due from
 banks                24,666                   24,332
Less allowance for
 loan losses          (7,686)                  (7,524)
Other assets          37,803                   35,819
                    ---------                ---------

     Total assets   $722,065                 $694,959
                    =========                =========

Liabilities:

Savings, Now and
 market rate
 deposits           $294,848    $934   1.27% $304,942    $821   1.09%
Time deposits        166,228   1,645   3.97%  147,610   1,301   3.57%
                    -----------------        -----------------

     Total interest-
      bearing
      deposits       461,076   2,579   2.24%  452,552   2,122   1.90%

Short term
 borrowings           16,738     216   5.18%    3,544      42   4.81%
                    -----------------        -----------------
     Total interest-
      bearing
      liabilities    477,814   2,795   2.35%  456,096   2,164   1.92%

Demand deposits,
 noninterest-bearing 150,586                  147,274
Other liabilities     13,487                   13,419
                    ---------                ---------
     Total
      noninterest-
      bearing
      liabilities    164,073                  160,693

     Total
      liabilities    641,887                  616,789

Shareholders' equity  80,178                   78,170
                    ---------                ---------

     Total
      liabilities
      and
      shareholders'
      equity        $722,065                 $694,959
                    =========                =========


Net interest spread                    4.37%                    4.66%
Effect of
 noninterest-bearing
 sources                               0.67%                    0.56%
                             -------- ------          -------- ------

Net interest income/
 margin on earning
 assets                       $8,389   5.04%           $8,260   5.22%
                             ===============          ===============

Tax equivalent
 adjustment                      $86   0.05%              $79   0.05%



(unaudited)            4th Quarter 2005           3rd Quarter 2005

(dollars in                           Average                  Average
 thousands)                  Interest  Rates          Interest  Rates
                     Average  Income/ Earned/ Average  Income/ Earned/
                     Balance  Expense  Paid   Balance  Expense  Paid

Assets:
Interest-bearing
 deposits with other
 banks                $1,176     $11   3.71%   $4,730     $44   3.69%
Federal funds sold     8,115      85   4.16%    7,420      64   3.42%
Investment
 securities
 available for sale   34,501     310   3.56%   34,520     308   3.54%

Loans                594,436   9,904   6.61%  588,726   9,489   6.39%

                    -----------------        -----------------
     Total interest
      earning assets 638,228  10,310   6.41%  635,396   9,905   6.18%

Cash and due from
 banks                25,754                   27,413
Less allowance for
 loan losses          (7,460)                  (7,359)
Other assets          35,162                   34,993
                    ---------                ---------

     Total assets   $691,684                 $690,443
                    =========                =========

Liabilities:

Savings, Now and
 market rate
 deposits           $305,173    $764   0.99% $318,223    $770   0.96%
Time deposits        143,156   1,185   3.28%  133,052   1,013   3.02%
                    -----------------        -----------------

     Total interest-
      bearing
      deposits       448,329   1,949   1.72%  451,275   1,783   1.57%

Short term
 borrowings            1,505      16   4.22%      516       5   3.84%
                    -----------------        -----------------
     Total interest-
      bearing
      liabilities    449,834   1,965   1.73%  451,791   1,788   1.57%

Demand deposits,
 noninterest-bearing 152,230                  152,048
Other liabilities     13,534                   12,303
                    ---------                ---------
     Total
      noninterest-
      bearing
      liabilities    165,764                  164,351

     Total
      liabilities    615,598                  616,142

Shareholders' equity  76,086                   74,301
                    ---------                ---------

     Total
      liabilities
      and
      shareholders'
      equity        $691,684                 $690,443
                    =========                =========


Net interest spread                    4.68%                    4.61%
Effect of
 noninterest-bearing
 sources                               0.51%                    0.46%
                             -------- ------          -------- ------

Net interest income/
 margin on earning
 assets                       $8,345   5.19%           $8,117   5.07%
                             ===============          ===============

Tax equivalent
 adjustment                      $75   0.05%              $70   0.05%


(unaudited)            2nd Quarter 2005

(dollars in                           Average
 thousands)                  Interest  Rates
                     Average  Income/ Earned/
                     Balance  Expense  Paid

Assets:
Interest-bearing
 deposits with other
 banks                  $536      $3   2.24%
Federal funds sold     5,119      36   2.82%
Investment
 securities
 available for sale   34,828     296   3.41%

Loans                578,173   8,895   6.17%

                    -----------------
     Total interest
      earning assets 618,656   9,230   5.98%

Cash and due from
 banks                33,259
Less allowance for
 loan losses          (7,251)
Other assets          34,975
                    ---------

     Total assets   $679,639
                    =========

Liabilities:

Savings, Now and
 market rate
 deposits           $319,101    $647   0.81%
Time deposits        128,777     869   2.71%
                    -----------------

     Total interest-
      bearing
      deposits       447,878   1,516   1.36%

Short term
 borrowings            3,540      28   3.17%
                    -----------------
     Total interest-
      bearing
      liabilities    451,418   1,544   1.37%

Demand deposits,
 noninterest-bearing 146,140
Other liabilities      9,803
                    ---------
     Total
      noninterest-
      bearing
      liabilities    155,943

     Total
      liabilities    607,361

Shareholders' equity  72,278
                    ---------

     Total
      liabilities
      and
      shareholders'
      equity        $679,639
                    =========


Net interest spread                    4.61%
Effect of
 noninterest-bearing
 sources                               0.37%
                             -------- ------

Net interest income/
 margin on earning
 assets                       $7,686   4.98%
                             ===============

Tax equivalent
 adjustment                      $65   0.04%


Non-accrual loans are included in the average loan balances.




                     Average Balances and Tax Equivalent Income and
                             Expense and Tax Equivalent Yields
                    --------------------------------------------------
                             For the Six Months ended June 30,
                               2006                     2005
                    --------------------------------------------------
(unaudited)

(dollars in                           Average                  Average
 thousands)                  Interest  Rates          Interest  Rates
                     Average  Income/ Earned/ Average  Income/ Earned/
                     Balance  Expense  Paid   Balance  Expense   Paid

Assets:
Interest-bearing
 deposits with other
 banks                  $564     $13   4.65%   $1,834      21   2.31%
Federal funds sold     3,801      84   4.46%    4,769      61   2.58%
Investment
 securities
 available for sale   40,653     841   4.17%   34,429     583   3.41%

Loans                609,860  20,670   6.83%  573,036  17,268   6.08%

                    -----------------        -----------------
     Total interest
      earning assets 654,878  21,608   6.65%  614,068  17,933   5.89%

Cash and due from
 banks                24,500                  $33,308
Less allowance for
 loan losses          (7,606)                  (7,155)
Other assets          36,809                   34,465
                    ---------                ---------

     Total assets   $708,581                 $674,686
                    ---------                ---------

Liabilities:

Savings,Now and
 market rate
 deposits           $299,867  $1,755   1.18% $322,893  $1,209   0.76%
Time deposits        156,970   2,947   3.79%  123,018   1,602   2.63%
                    -----------------        -----------------

     Total interest-
      bearing
      deposits       456,837   4,702   2.08%  445,911   2,811   1.27%

Short term
 borrowings           10,177     257   5.09%    2,401      36   3.02%
                    -----------------        -----------------
     Total interest-
      bearing
      liabilities    467,014   4,959   2.14%  448,312   2,847   1.28%

Demand deposits,
 noninterest-bearing 148,941                  144,792
Other liabilities     13,451                    9,796
                    ---------                ---------
     Total
      noninterest-
      bearing
      liabilities    162,392                  154,588

     Total
      liabilities    629,406                  602,900

Shareholders' equity  79,175                   71,786
                    ---------                ---------

     Total
      liabilities
      and
      shareholders'
      equity        $708,581                 $674,686
                    =========                =========


Net interest spread                    4.51%                    4.61%
Effect of
 noninterest-bearing
 sources                               0.62%                    0.34%
                             -------- ------          -------- ------

Net interest income/
 margin on earning
 assets                      $16,649   5.13%          $15,086   4.95%
                             ===============          ===============

Tax equivalent
 adjustment                     $165   0.05%             $111   0.04%
                             ===============          ===============


Non-accrual loans are included in the average loan balances.

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