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8-K - 8-K - Beneficial Mutual Bancorp Inca13-4061_18k.htm

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

 

DATE:

January 31, 2013

CONTACT:

Thomas D. Cestare

 

Executive Vice President and Chief Financial Officer

PHONE:

(215) 864-6009

 

BENEFICIAL MUTUAL BANCORP, INC. ANNOUNCES QUARTER AND YEAR ENDED DECEMBER 31, 2012 RESULTS

 

PHILADELPHIA, PENNSYLVANIA, January 31, 2013 — Beneficial Mutual Bancorp, Inc. (“Beneficial”) (NASDAQGS: BNCL), the parent company of Beneficial Bank (the “Bank”), today announced its financial results for the quarter and year ended December 31, 2012.

 

Beneficial recorded net income of $3.8 million, or $0.05 per diluted share, for the quarter ended December 31, 2012 compared to net income of $5.9 million, or $0.08 per diluted share, recorded for the quarter ended December 31, 2011. Net income for the year ended December 31, 2012 totaled $14.2 million, or $0.18 per diluted share, compared to $11.0 million, or $0.14 per diluted share, for the year ended December 31, 2011.  Net income for the year ended December 31, 2012 included $2.2 million of merger and restructuring charges related to the acquisition of SE Financial Corp., the parent holding company of St. Edmond’s Federal Savings Bank. Net income for the year ended December 31, 2011 included $5.1 million of restructuring charges related to the implementation of our expense management reduction program.

 

Credit costs have decreased during the quarter and year ended December 31, 2012 from the same periods in 2011 but continue to have a significant impact on our financial results. During the quarter and year ended December 31, 2012, the Bank recorded a provision for credit losses of $6.0 million and $28.0 million, respectively, compared to a provision of $8.5 million and $37.5 million for the quarter and year ended December 31, 2011, respectively.

 

We continue to reduce our non-performing asset levels.  At December 31, 2012 our non-performing assets were $104.2 million, representing a decrease of $19.2 million, or 15.6% from $123.4 million at September 30, 2012, and a $49.9 million decrease, or 32.4%, from $154.1 million at December 31, 2011. Excluding government guaranteed student loans of $24.0 million, non-performing assets were $80.2 million or 1.60% of total assets at December 31, 2012. We also have increased our reserves and at December 31, 2012, the allowance for loan losses totaled $57.6 million, or 2.36% of total loans, compared to $54.2 million, or 2.10% of total loans, at December 31, 2011. We expect that the provision for credit losses will remain elevated in 2013 as we continue to focus on reducing our non-performing loan levels.

 

Gerard Cuddy, Beneficial’s President and CEO, stated, “During 2012 we made progress toward a number of our goals.  We added resources to our credit team and were pleased by the improvement in our asset quality metrics as we experienced a 32.4% decrease in our non-performing assets at December 31, 2012 compared to a year ago.  We also were able to continue to grow our retail and business customer base and experienced strong deposit growth of 9.3% in 2012.  We successfully closed and integrated the S.E Financial Corp. acquisition which increased our presence in our key markets.   Capital, liquidity, and reserves remain strong and will position Beneficial for future growth.

 

In 2012, earnings were challenged given the slow growing economy and the related lack of loan demand in our markets.  The low interest rate environment also resulted in net interest margin compression for the quarter and we expect that the continued low interest rate environment will put pressure on net interest margin in future periods.  As we look ahead to 2013, we are focused on increasing profitability, further reducing our non-performing asset levels, growing our commercial loan portfolio, pursuing acquisitions, controlling expenses and increasing our retail and commercial customer base. We remain committed to our customers by delivering an education-based experience through The Beneficial Conversation and have made it our mission to always help them do the right thing financially.”

 

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Highlights for the quarter and year ended December 31, 2012:

 

·                                          Asset quality metrics continued to improve during the quarter with non-performing loans, excluding student loans, decreasing $39.5 million, or 36.6%, to $68.4 million from $107.9 million at December 31, 2011. Our non-performing assets ratio, excluding student loans, improved to 1.60% at December 31, 2012 compared to 2.73% at December 31, 2011.

 

·                                          Excluding municipal deposits, we experienced a $447.2 million, or 21.6%, increase in our core deposits, particularly savings products and business checking accounts, which increased $254.0 million and $119.7 million, respectively.

 

·                                          Our mortgage banking team that was established in 2011 continued to positively impact our non-interest income as we recorded mortgage banking income of $464 thousand and $2.7 million, respectively, for the quarter and year ended December 31, 2012.

 

·                                          We continue to strengthen our balance sheet and, at December 31, 2012, our allowance for loan losses totaled $57.6 million, or 2.36% of total loans compared to $55.8 million, or 2.24% of total loans, at September 30, 2012, and $54.2 million, or 2.10% of total loans, at December 31, 2011. Reserves as a percentage of non-performing loans, excluding student loans, totaled 84.3% at December 31, 2012 compared to 50.2% at December 31, 2011.

 

·                                          Beneficial repurchased 983,300 shares during the year which increased total treasury shares to 2,982,029 at December 31, 2012.

 

·                                          Capital levels remain strong with tangible capital to tangible assets totaling 10.30% at December 31, 2012.

 

Balance Sheet

 

Total assets increased $410.3 million, or 8.9%, to $5.0 billion at December 31, 2012 from $4.6 billion at December 31, 2011.  The increase was primarily driven by the $296.3 million of assets acquired as part of the acquisition of SE Financial Corp., which closed on April 3, 2012. Cash and cash equivalents increased approximately $141.9 million to $489.9 million at December 31, 2012 from $348.0 million at December 31, 2011. The increase in cash and cash equivalents was primarily driven by high commercial loan prepayments, weak overall loan demand and our selling of agency eligible mortgage loans totaling approximately $100.7 million for the year ended December 31, 2012.

 

Investments increased $384.4 million, or 27.9%, to $1.8 billion at December 31, 2012 from $1.4 billion at December 31, 2011 as we invested our excess liquidity.  We continue to focus on purchasing high quality agency bonds, and maintain a portfolio that provides a steady stream of cash flow in both current and rising interest rate environments.

 

Loans decreased $128.8 million, or 5.0%, to $2.4 billion at December 31, 2012 from $2.6 billion at December 31, 2011.  Despite total loan originations of $481.3 million during the year and the addition of $175.2 million of loans recorded at fair value acquired from SE Financial Corp., our loan portfolio has decreased as a result of a number of large commercial loan repayments, continued weak loan demand, and our decision to sell certain agency eligible mortgage loans in order to better position the Bank to mitigate interest rate risk.  During the year ended December 31, 2012, we sold approximately $100.7 million of residential mortgage loans and recorded mortgage banking income of $2.7 million related to the sale of these loans. In the fourth quarter of 2012, we began to portfolio the majority of our mortgage originations as the yields on these mortgage were attractive compared to the rates available on mortgage backed securities.

 

Deposits increased $332.7 million, or 9.3%, to $3.9 billion at December 31, 2012 from $3.6 billion at December 31, 2011.  The increase was primarily driven by the addition of $275.3 million of deposits acquired from SE Financial

 

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Corp.  During the year ended December 31, 2012, municipal deposits decreased $67.5 million which was consistent with the planned run-off associated with our re-pricing of higher-cost, non-relationship-based municipal accounts.  Excluding municipal deposits we experienced a $447.2 million, or 21.6%, increase in our core deposits, particularly savings products and business checking accounts, which increased $254.0 million and $119.7 million, respectively.

 

At December 31, 2012, stockholders’ equity increased to $633.9 million, or 12.7% of total assets, compared to $629.4 million, or 13.7% of total assets, at December 31, 2011.

 

Net Interest Income

 

For the quarter ended December 31, 2012, Beneficial reported net interest income of $33.3 million, a decrease of $1.5 million, or 4.4%, from the quarter ended December 31, 2011. The decrease in net interest income during the quarter ended December 31, 2012 compared to the same period last year was primarily the result of a reduction in the average interest rate earned on investment securities, partially offset by a reduction in the average cost of our liabilities.  Our net interest margin decreased to 2.92% for the quarter ended December 31, 2012 from 3.23% for the quarter ended December 31, 2011.  We expect that the persistently low interest rate environment will continue to lower yields on our investment and loan portfolios to a greater extent than we can reduce rates on deposits and other interest bearing liabilities, which will put pressure on net interest margin in future periods.

 

For the year ended December 31, 2012, Beneficial reported net interest income of $139.5 million, a decrease of $2.6 million, or 1.9%, from the year ended December 31, 2011. The decrease in net interest income during the year ended December 31, 2012 compared to the same period last year was primarily the result of a decline in the average rate on interest earning assets, particularly investments, offset by a reduction in the average cost of our liabilities, particularly municipal deposits.  During 2012, the Bank ran off higher cost non relationship based municipal deposits to help net interest margin. Net interest margin decreased nine basis points, totaling 3.13% for the year ended December 31, 2012 as compared to 3.22% for the year ended December 31, 2011, largely due to our efforts to re-price deposits.

 

We have been able to lower the average cost of our liabilities to 0.73% and 0.82% for the quarter and year ended December 31, 2012, respectively, compared to 0.95% and 1.01% for the quarter and year ended December 31, 2011, respectively, by re-pricing higher cost deposits.  The reduction in deposit costs has been primarily due to decreasing rates on our municipal deposits.

 

Non-interest Income

 

For the quarter ended December 31, 2012, non-interest income totaled $6.8 million, a decrease of $250 thousand, or 3.5%, from the quarter ended December 31, 2011.  The decrease was primarily due to a decrease of $135 thousand in mortgage banking income as we have started to hold in portfolio some of our mortgage production during the fourth quarter of 2012 and $962 thousand of additional amortization on certain low income housing partnership investments. These decreases were partially offset by a $1.1 million increase of income from the sale of investment securities.

 

For the year ended December 31, 2012, non-interest income totaled $27.6 million, an increase of $2.4 million, or 9.4%, from the year ended December 31, 2011.  The increase was primarily due to a $1.8 million increase in mortgage banking income recognized during 2012 in connection with the sale of mortgages and a $2.2 million increase in the gain on the sale of investment securities, partially offset by $1.6 million of additional amortization on low income housing partnership investments.

 

Non-interest Expense

 

For the quarter ended December 31, 2012, non-interest expense totaled $30.4 million, an increase of $1.2 million, or 4.1%, from the quarter ended December 31, 2011.  The increase in non-interest expense was primarily due to increases in salaries and benefits as a result of the SE Financial Corp. acquisition and the expansion of our credit and lending function as well as increases in classified loan and other real estate owned expenses of $946 thousand which are included in other expenses.  During the quarter, we also settled an outstanding lawsuit for $1.0 million,

 

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which is included in other expenses, and sold a branch that we had closed in connection with the SE Financial Corp acquisition for a gain of $588 thousand, which is included in merger and restructuring charges.

 

For the year ended December 31, 2012, non-interest expense totaled $123.1 million, an increase of $2.4 million, or 2.0%, from the year ended December 31, 2011. The increase in non-interest expense was primarily due to an increase in salaries and benefits and in other real estate owned expenses, partially offset by reductions in restructuring charges and FDIC insurance.

 

Income Taxes

 

For the quarter and year ended December 31, 2012, we recorded a benefit for income taxes of $110 thousand and a provision for income taxes of $1.8 million, respectively, reflecting an effective tax rate benefit of (3.0%) and expense of 11.0%, respectively. This compared to a benefit for income taxes of $1.7 million and $1.9 million, for the quarter and year ended December 31, 2011, respectively, reflecting an effective rate benefit of 39.9% and 21.0% for the same periods.   The tax rates differ from the statutory rate of 35% principally because of tax-exempt investments, non-taxable income related to bank-owned life insurance and tax credits received on affordable housing partnerships. These tax credits relate to investments maintained by the Bank as a limited partner in partnerships that sponsor affordable housing projects utilizing low-income housing credits pursuant to Section 42 of the Internal Revenue Code.  Results for the quarter and year ended December 31, 2012 included a charge for the write-off of a charitable contribution carryover which expired during those periods.

 

Asset Quality

 

Asset quality metrics showed continued signs of improvement during the year ended December 31, 2012. Non-performing loans, including loans 90 days past due and still accruing, decreased to $92.4 million at December 31, 2012, compared to $136.3 million at December 31, 2011. Non-performing loans at December 31, 2012 included $24.0 million of government guaranteed student loans, which represented 26.0% of total non-performing loans.  Net charge-offs during the quarter and year ended December 31, 2012 were $4.2 million and $24.6 million, respectively, compared to $8.4 million and $28.7 million during the quarter and year ended December 31, 2011, respectively.  At December 31, 2012, the Bank’s allowance for loan losses totaled $57.6 million, or 2.36% of total loans, compared to $54.2 million, or 2.10% of total loans, at December 31, 2011.

 

Capital

 

The Bank’s capital position remains strong relative to current regulatory requirements. The Bank continues to have substantial liquidity as the inflows of deposits and prepayments have largely been retained in cash or invested in high quality government-backed securities.  In addition, at December 31, 2012, we had the ability to borrow up to $1.2 billion combined from the FHLB of Pittsburgh and the Federal Reserve Bank of Philadelphia. Our capital ratios as of December 31, 2012 compared to September 30, 2012 and December 31, 2011, as well as our excess capital over regulatory minimums as of December 31, 2012 to be considered well capitalized, are as follows:

 

 

 

 

 

 

 

 

 

Minimum Well

 

Excess Capital

 

 

 

12/31/2012

 

9/30/2012

 

12/31/2011

 

Capitalized Ratio

 

12/31/2012

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible Capital

 

10.30

%

10.73

%

11.30

%

 

 

 

 

Tier 1 Capital (to average assets)

 

9.53

%

9.74

%

9.67

%

5

%

$

216,077

 

Tier 1 Capital (to risk weighted assets)

 

19.23

%

19.22

%

18.09

%

6

%

$

312,729

 

Total Capital (to risk weighted assets)

 

20.50

%

20.49

%

19.35

%

10

%

$

248,169

 

 

Maintaining strong capital levels remains one of our top priorities.  Our capital levels are well in excess of well capitalized levels under the current regulatory requirements as well as the proposed capital rules under Basel III.

 

About Beneficial Mutual Bancorp, Inc.

 

Beneficial is a community-based, diversified financial services company providing consumer and commercial banking services. Its principal subsidiary, Beneficial Bank, has served individuals and businesses in the Delaware Valley area since 1853. The Bank is the oldest and largest bank headquartered in Philadelphia, Pennsylvania, with

 

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62 offices in the greater Philadelphia and South New Jersey regions. Insurance services are offered through the Beneficial Insurance Services, LLC and wealth management services are offered through the Beneficial Advisors, LLC, both wholly owned subsidiaries of the Bank. For more information about the Bank and Beneficial, please visit www.thebeneficial.com.

 

Forward Looking Statements

 

This news release may contain forward-looking statements, which can be identified by the use of words such as “believes,” “expects,” “anticipates,” “estimates” or similar expressions. Such forward-looking statements and all other statements that are not historic facts are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors. These factors include, but are not limited to, general economic conditions, changes in the interest rate environment, legislative or regulatory changes that may adversely affect our business, changes in accounting policies and practices, changes in competition and demand for financial services, adverse changes in the securities markets, changes in deposit flows and changes in the quality or composition of Beneficial’s loan or investment portfolios. Additionally, other risks and uncertainties may be described in Beneficial’s Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q or its other reports as filed with the Securities and Exchange Commission, which are available through the SEC’s website at www.sec.gov. Should one or more of these risks materialize, actual results may vary from those anticipated, estimated or projected. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except as may be required by applicable law or regulation, Beneficial assumes no obligation to update any forward-looking statements.

 

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BENEFICIAL MUTUAL BANCORP, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Financial Condition

(Dollars in thousands, except share amounts)

 

 

 

December 31,

 

September 30,

 

December 31,

 

 

 

2012

 

2012

 

2011

 

ASSETS:

 

 

 

 

 

 

 

Cash and Cash Equivalents:

 

 

 

 

 

 

 

Cash and due from banks

 

$

54,924

 

$

40,234

 

$

41,130

 

Interest-bearing deposits

 

434,984

 

419,905

 

306,826

 

Total cash and cash equivalents

 

489,908

 

460,139

 

347,956

 

 

 

 

 

 

 

 

 

Investment Securities:

 

 

 

 

 

 

 

Available-for-sale

 

1,267,491

 

1,031,188

 

875,011

 

Held-to-maturity

 

477,198

 

499,871

 

482,695

 

Federal Home Loan Bank stock, at cost

 

16,384

 

17,683

 

18,932

 

Total investment securities

 

1,761,073

 

1,548,742

 

1,376,638

 

 

 

 

 

 

 

 

 

Loans:

 

2,447,304

 

2,491,740

 

2,576,129

 

Allowance for loan losses

 

(57,649

)

(55,840

)

(54,213

)

Net loans

 

2,389,655

 

2,435,900

 

2,521,916

 

 

 

 

 

 

 

 

 

Accrued Interest Receivable

 

15,381

 

16,537

 

16,401

 

 

 

 

 

 

 

 

 

Bank Premises and Equipment, net

 

64,224

 

62,194

 

59,913

 

 

 

 

 

 

 

 

 

Other Assets:

 

 

 

 

 

 

 

Goodwill

 

121,973

 

122,410

 

110,486

 

Bank owned life insurance

 

40,569

 

40,208

 

35,277

 

Other intangibles

 

9,879

 

11,168

 

13,334

 

Other assets

 

113,742

 

121,369

 

114,183

 

Total other assets

 

286,163

 

295,155

 

273,280

 

Total Assets

 

$

5,006,404

 

$

4,818,667

 

$

4,596,104

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY:

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

Non-interest bearing deposits

 

$

328,892

 

$

305,093

 

$

278,968

 

Interest bearing deposits

 

3,598,621

 

3,540,955

 

3,315,834

 

Total deposits

 

3,927,513

 

3,846,048

 

3,594,802

 

Borrowed funds

 

250,352

 

250,348

 

250,335

 

Other liabilities

 

194,666

 

85,962

 

121,587

 

Total liabilities

 

4,372,531

 

4,182,358

 

3,966,724

 

Commitments and Contingencies

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

 

 

Preferred Stock - $.01 par value

 

 

 

 

Common Stock — $.01 par value

 

823

 

823

 

823

 

Additional paid-in capital

 

354,082

 

353,049

 

351,107

 

Unearned common stock held by employee stock ownership plan

 

(17,901

)

(18,216

)

(19,856

)

Retained earnings (partially restricted)

 

329,447

 

325,632

 

315,268

 

Accumulated other comprehensive (loss) income, net

 

(7,027

)

569

 

(1,162

)

Treasury stock, at cost

 

(25,551

)

(25,548

)

(16,800

)

Total stockholders’ equity

 

633,873

 

636,309

 

629,380

 

Total Liabilities and Stockholders’ Equity

 

$

5,006,404

 

$

4,818,667

 

$

4,596,104

 

 

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BENEFICIAL MUTUAL BANCORP, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Operations

(Dollars in thousands, except per share amounts)

 

 

 

For the Quarter Ended

 

For the Year Ended

 

 

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

December 31,

 

 

 

2012

 

2012

 

2011

 

2012

 

2011

 

INTEREST INCOME:

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

31,862

 

$

34,207

 

$

33,672

 

$

132,682

 

$

139,685

 

Interest on overnight investments

 

304

 

247

 

287

 

893

 

890

 

Interest on trading securities

 

 

 

 

 

26

 

Interest and dividends on investment securities:

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

7,451

 

8,022

 

8,745

 

33,876

 

35,955

 

Tax-exempt

 

716

 

732

 

823

 

2,979

 

3,587

 

Total interest income

 

40,333

 

43,208

 

43,527

 

170,430

 

180,143

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE:

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits:

 

 

 

 

 

 

 

 

 

 

 

Interest bearing checking accounts

 

1,110

 

1,054

 

1,555

 

4,712

 

7,742

 

Money market and savings deposits

 

1,866

 

2,124

 

2,160

 

8,392

 

9,158

 

Time deposits

 

2,260

 

2,374

 

2,886

 

9,765

 

12,531

 

Total

 

5,236

 

5,552

 

6,601

 

22,869

 

29,431

 

Interest on borrowed funds

 

1,829

 

2,087

 

2,109

 

8,104

 

8,615

 

Total interest expense

 

7,065

 

7,639

 

8,710

 

30,973

 

38,046

 

Net interest income

 

33,268

 

35,569

 

34,817

 

139,457

 

142,097

 

Provision for loan losses

 

6,000

 

7,000

 

8,500

 

28,000

 

37,500

 

Net interest income after provision for loan losses

 

27,268

 

28,569

 

26,317

 

111,457

 

104,597

 

 

 

 

 

 

 

 

 

 

 

 

 

NON-INTEREST INCOME:

 

 

 

 

 

 

 

 

 

 

 

Insurance and advisory commission and fee income

 

1,671

 

2,069

 

1,618

 

7,389

 

7,720

 

Service charges and other income

 

3,576

 

3,339

 

4,815

 

14,604

 

15,867

 

Mortgage banking income

 

464

 

803

 

599

 

2,731

 

916

 

Net gain on sale of investment securities

 

1,107

 

659

 

36

 

2,882

 

652

 

Trading securities profits

 

 

 

 

 

81

 

Total non-interest income

 

6,818

 

6,870

 

7,068

 

27,606

 

25,236

 

 

 

 

 

 

 

 

 

 

 

 

 

NON-INTEREST EXPENSE:

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

13,844

 

14,638

 

13,360

 

57,529

 

55,812

 

Occupancy expense

 

2,512

 

2,478

 

2,702

 

9,887

 

11,040

 

Depreciation, amortization and maintenance

 

2,141

 

2,346

 

2,127

 

8,919

 

8,683

 

Marketing expense

 

127

 

870

 

469

 

2,811

 

3,189

 

Intangible amortization expense

 

1,289

 

916

 

910

 

4,163

 

3,584

 

FDIC Insurance

 

1,054

 

1,058

 

1,018

 

4,221

 

5,332

 

Merger and Restructuring charges

 

(588

)

 

 

2,233

 

5,058

 

Other

 

10,002

 

7,971

 

8,600

 

33,362

 

28,012

 

Total non-interest expense

 

30,381

 

30,277

 

29,186

 

123,125

 

120,710

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

3,705

 

5,162

 

4,199

 

15,938

 

9,123

 

Income tax (benefit) expense

 

(110

)

1,067

 

(1,677

)

1,759

 

(1,913

)

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

$

3,815

 

$

4,095

 

$

5,876

 

$

14,179

 

$

11,036

 

 

 

 

 

 

 

 

 

 

 

 

 

EARNINGS PER SHARE – Basic

 

$

0.05

 

$

0.05

 

$

0.08

 

$

0.18

 

$

0.14

 

EARNINGS PER SHARE – Diluted

 

$

0.05

 

$

0.05

 

$

0.08

 

$

0.18

 

$

0.14

 

 

 

 

 

 

 

 

 

 

 

 

 

Average common shares outstanding – Basic

 

76,358,242

 

76,392,719

 

77,070,444

 

76,657,265

 

77,075,726

 

Average common shares outstanding – Diluted

 

76,540,551

 

76,541,190

 

77,194,042

 

76,827,872

 

77,231,303

 

 

7



 

BENEFICIAL MUTUAL BANCORP, INC. AND SUBSIDIARIES

Selected Consolidated Financial and Other Data (Unaudited)

(Dollars in thousands)

 

 

 

For the Quarter Ended

 

For the Year Ended

 

 

 

December 31, 2012

 

December 31, 2011

 

December 31, 2012

 

December 31, 2011

 

 

 

Average

 

Yield /

 

Average

 

Yield /

 

Average

 

Yield /

 

Average

 

Yield /

 

 

 

Balance

 

Rate

 

Balance

 

Rate

 

Balance

 

Rate

 

Balance

 

Rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment Securities:

 

$

2,074,556

 

1.63

%

$

1,692,094

 

2.33

%

$

1,879,717

 

2.01

%

$

1,698,359

 

2.38

%

Trading Securities

 

 

 

 

 

 

 

2,226

 

1.19

%

Overnight investments

 

476,927

 

0.25

%

449,836

 

0.25

%

353,058

 

0.25

%

351,304

 

0.25

%

Stock

 

16,808

 

0.47

%

19,225

 

0.00

%

18,312

 

0.19

%

20,878

 

0.02

%

Other Investment securities

 

1,580,821

 

2.06

%

1,223,033

 

3.13

%

1,508,347

 

2.44

%

1,323,951

 

2.99

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans:

 

2,475,399

 

5.14

%

2,618,977

 

5.13

%

2,565,672

 

5.17

%

2,716,501

 

5.14

%

Residential

 

661,751

 

4.81

%

649,708

 

4.85

%

661,308

 

4.93

%

681,322

 

4.91

%

Commercial Real Estate

 

666,684

 

5.33

%

713,217

 

5.11

%

699,970

 

5.29

%

759,196

 

5.09

%

Business and Small Business

 

437,207

 

5.91

%

513,175

 

5.75

%

475,872

 

5.96

%

514,395

 

5.68

%

Personal Loans

 

709,757

 

4.77

%

742,877

 

4.96

%

728,522

 

4.75

%

761,588

 

5.03

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Interest Earning Assets

 

$

4,549,955

 

3.54

%

$

4,311,071

 

4.03

%

$

4,445,389

 

3.83

%

$

4,414,860

 

4.08

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

$

3,622,429

 

0.58

%

$

3,385,550

 

0.78

%

$

3,513,312

 

0.65

%

$

3,523,519

 

0.84

%

Savings

 

1,018,934

 

0.50

%

760,412

 

0.62

%

944,997

 

0.56

%

740,466

 

0.66

%

Money Market

 

513,938

 

0.45

%

562,652

 

0.69

%

532,266

 

0.59

%

598,592

 

0.71

%

Demand

 

626,902

 

0.30

%

463,205

 

0.21

%

581,003

 

0.29

%

432,901

 

0.22

%

Demand - Municipals

 

665,404

 

0.38

%

757,294

 

0.69

%

636,140

 

0.48

%

873,234

 

0.78

%

Total Core Deposits

 

2,825,178

 

0.42

%

2,543,563

 

0.58

%

2,694,406

 

0.49

%

2,645,193

 

0.64

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Time Deposits

 

797,251

 

1.13

%

841,987

 

1.36

%

818,906

 

1.19

%

878,326

 

1.43

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings

 

250,355

 

2.91

%

250,332

 

3.35

%

260,918

 

3.11

%

255,594

 

3.37

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Interest Bearing Liabilities

 

$

3,872,784

 

0.73

%

$

3,635,882

 

0.95

%

$

3,774,230

 

0.82

%

$

3,779,113

 

1.01

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest bearing deposits

 

307,197

 

 

 

270,361

 

 

 

300,153

 

 

 

277,819

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin

 

 

 

2.92

%

 

 

3.23

%

 

 

3.13

%

 

 

3.22

%

 

8



 

ASSET QUALITY INDICATORS

 

 

 

December 31,

 

September 30,

 

December 31,

 

(Dollars in thousands)

 

2012

 

2012

 

2011

 

 

 

 

 

 

 

 

 

Non-performing assets:

 

 

 

 

 

 

 

Non-accruing loans*

 

$

68,417

 

$

77,428

 

$

107,907

 

Accruing loans past due 90 days or more**

 

24,013

 

23,710

 

28,423

 

Total non-performing loans

 

92,430

 

101,138

 

136,330

 

 

 

 

 

 

 

 

 

Real estate owned

 

11,752

 

22,290

 

17,775

 

 

 

 

 

 

 

 

 

Total non-performing assets

 

$

104,182

 

$

123,428

 

$

154,105

 

 

 

 

 

 

 

 

 

Non-performing loans to total loans

 

3.78

%

4.06

%

5.29

%

Non-performing assets to total assets

 

2.08

%

2.56

%

3.35

%

Non-performing assets less accruing student loans past due 90 days or more to total assets

 

1.60

%

2.09

%

2.73

%

ALLL to total loans

 

2.36

%

2.24

%

2.10

%

ALLL to non-performing loans

 

62.37

%

55.21

%

39.77

%

ALLL to non-performing loans (excluding student loans)

 

84.26

%

71.35

%

50.24

%

 


* Non-accruing loans at December 31, 2012 and September 30, 2012 do not include $2.3 million and $3.1 million, respectively, of loans acquired with deteriorated credit quality, which have been recorded at their fair value at acquisition and are performing as expected. Non-accruing loans include $10.8 million, $11.5 million, and $22.2 million of troubled debt restructured loans (TDRs) as of December 31, 2012, September 30, 2012, and December 31, 2011, respectively.

** Includes $24.0 million, $22.9 million, and $28.4 million in government guaranteed student loans as of December 31, 2012, September 30, 2012 and December 31, 2011, respectively.

 

Non-performing loan charge offs as a percentage of the unpaid principal balances at December 31, 2012 are as follows (excluding government guaranteed student loans):

 

NON-PERFORMING LOANS:

 

At December 31, 2012 (Dollars in thousands)

 

Recorded
Investment

 

Unpaid Principal
Balance

 

Life-to-Date
Charge offs

 

% of Unpaid
Principal Balance

 

Non-performing Loans by Category:

 

 

 

 

 

 

 

 

 

Commercial Real Estate

 

$

25,636

 

$

35,743

 

$

(10,107

)

28.28

%

Commercial Business

 

13,255

 

18,888

 

(5,633

)

29.82

%

Commercial Construction

 

13,407

 

24,016

 

(10,609

)

44.17

%

Residential Real Estate

 

13,515

 

14,374

 

(859

)

5.98

%

Residential Construction

 

783

 

783

 

 

0.00

%

Consumer Personal

 

1,821

 

1,996

 

(175

)

8.77

%

Total Non-performing Loans

 

$

68,417

 

$

95,800

 

$

(27,383

)

28.58

%

 

The non-performing loans table above does not include $2.3 million of loans acquired with deteriorated credit quality, which have been recorded at their fair value at acquisition and are performing as expected.

 

Key Performance ratios are as follows for the quarter (annualized) and year end periods indicated:

 

 

 

For the Quarter Ended (annualized)

 

For the Year Ended

 

 

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

 

 

2012

 

2012

 

2011

 

2012

 

2011

 

PERFORMANCE RATIOS:

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

0.30

%

0.33

%

0.49

%

0.29

%

0.23

%

Return on average equity

 

2.35

%

2.54

%

3.68

%

2.23

%

1.77

%

Net interest margin

 

2.92

%

3.16

%

3.23

%

3.13

%

3.22

%

Efficiency ratio

 

75.93

%

71.34

%

69.80

%

73.70

%

72.14

%

Tangible Common Equity

 

10.30

%

10.73

%

11.30

%

10.30

%

11.30

%

 

9