Here's a safe prediction for 2004: The Bryn Mawr Trust Company (Bryn Mawr, Pa.; $600 million in assets; $1.8 billion in trust assets) will remain independent. Indeed, that's the mantra within Bryn Mawr's management.
But it's awfully tempting to take advantage of the high prices-from 25 to 28 times earnings-acquirers have been shelling out for Pennsylvania banks. "We've seen in our market a real flurry of mergers, with premiums way above the premiums we've seen before," says Ted Peters, president and CEO of Bryn Mawr Trust. "The multiples that we're seeing are bordering on what I'd call 'outrageous.'"
Apparently, outrage is in the eye of the beholder. "A lot of the acquisitions are being done by big banking companies that don't suffer much dilution when they do an acquisition," says Peters.
Instead of courting that manner of high-priced trouble, Peters would rather stay aloof and take advantage of the low price of technology. "About 15 years ago in this business, everyone thought that technology was going to be the death knell of small banks," says Peters. The exact opposite happened. "Technology has been so inexpensive that small banks can offer the exact same services as Wachovia, Citizens or anybody else," Peters says. "It's been the great leveler."
So Peters is content to watch his competitors overpay. "Those of us who stay independent will have a tremendous competitive advantage."