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PHILADELPHIA, PENNSYLVANIA, August 6, 2007 - Beneficial Mutual Bancorp, Inc. (the "Company") (NASDAQGS: BNCL) today announced net income of $1.9 million for the second quarter of 2007, compared to net income of $2.4 million for the second quarter of 2006. The Company reported earnings for the six months ended June 30, 2007 of $3.7 million, compared to net income of $5.2 million for the comparable period in 2006.
Beneficial Mutual Bancorp, Inc. is the mid-tier holding company of Beneficial Bank (the "Bank"). The Bank is a Pennsylvania chartered savings bank originally founded in 1853. The Company completed its initial public minority stock offering and acquisition of FMS Financial Corporation ("FMS") of Burlington, New Jersey on July 13, 2007, after the close of the quarter ended June 30, 2007. Therefore, the information herein does not contain any per share information, or otherwise reflect the completion of the stock offering or the merger.
The merger solidifies Beneficial's position as the largest Philadelphia-based bank with more than $3.5 billion in assets, $2.5 billion in deposits and a network of over 70 neighborhood banking offices throughout the Delaware Valley. The Company offers a full array of financial products including commercial, consumer and real estate lending, insurance and brokerage operations. For more information about Beneficial Bank and Beneficial Mutual Bancorp, Inc., visit www.thebeneficial.com.
Highlights for the quarter included:
Balance Sheet
Assets increased $280.0 million, or 12.2%, to $2.58 billion at June 30, 2007, compared to $2.3 billion at December 31, 2006. The increase in assets was primarily due to an increase in cash and investment securities, resulting largely from the investment of funds received with subscription orders in connection with the Company's minority stock offering. This increase was partially offset by a decrease of $56.0 million in loans outstanding, due primarily to reduced demand for personal and residential real estate loans. This decrease was partially offset by an increase in business loans.
Deposits decreased $65.4 million, or 3.9%, to $1.61 billion at June 30, 2007 compared to $1.68 billion at December 31, 2006. The reduction in deposits was primarily due to reductions in time deposits, including brokered time deposits, which were partially offset by increases in checking, savings and money market account balances.
Retained earnings increased $2.0 million, or 0.7%, to $282.4 million at June 30, 2007, compared to $280.4 million at December 31, 2006. The ratio of the Company's retained earnings to total assets equaled 10.95% at June 30, 2007, compared to 12.19% at December 31, 2006.
Asset Quality
Net charge-offs during the three month period ended June 30, 2007 declined to $224,000, or 0.01% of average loans outstanding, compared to $377,000, or 0.02% of average loans outstanding for the same three month period in 2006. For the six month period ended June 30, 2007, net charge-offs declined to $430,000, or 0.03%, compared to $825,000, or 0.05% in the same six month period in 2006.
Nonperforming assets totaled $14.9 million, or 0.58% of total assets, at June 30, 2007 compared to $11.0 million, or 0.48% of total assets, at December 31, 2006. Total nonperforming assets at both dates include real estate owned of approximately $2.8 million, including a former branch office site with a net book value of $2.7 million, which is currently under agreement of sale, and is expected to be sold in 2007. The $3.9 million increase in nonperforming assets during the six months ended June 30, 2007 was the result of two loans to affiliates of a Philadelphia-based company that filed for bankruptcy under Chapter 11 in June 2007.
The Bank had no provision for loan losses during the three months ended June 30, 2007 compared to $600,000 for the same three month period in 2006. The Bank recorded a provision for loan losses of $300,000 for the six months ended June 30, 2007 compared to $1.2 million for the comparable period in 2006. The change in the provision for loan losses in the 2007 periods compared to the same periods in 2006 reflects lower levels of net charge-offs and a decrease in average loans outstanding. The allowance for loan losses at June 30, 2007 totaled $17.2 million, or 1.06% of total loans outstanding, compared to $17.4 million, or 1.03% of total loans outstanding, at December 31, 2006.
Net Interest Income
The Company's net interest income increased $449,000, or 2.8%, to $16.5 million for the three months ended June 30, 2007 from the comparable period in 2006. This increase was primarily the result of the investment of available funds received with subscription orders in connection with the Company's minority stock offering. For the six month period ended June 30, 2007, net interest income decreased $237,000 or 0.7%, to $31.9 million from the comparable period in 2006, as an increase in the Bank's net interest margin was offset by a reduction in average interest earning assets.
Non-interest Income
Non-interest income increased by $248,000, or 10.2%, for the three months ended June 30, 2007, to $2.7 million, as compared to the same three month period in 2006. This change was primarily due to increases in insurance commissions and profits on the sale of available-for-sale securities, partially offset by an increase in losses on other operating assets, including operating losses on limited partnerships established to support low to moderate income housing. Noninterest income was relatively flat for the six months ended June 30, 2007 from the comparable period in 2006.
Non-interest Expense
Non-interest expense increased by $2.2 million, or 14.6%, and $3.3 million, or 11.1%, during the three and six months ended June 30, 2007, respectively, compared to the same periods in 2006. The increases in non-interest expense were primarily due to increases in salaries, employee benefits and advertising expenses in anticipation of additional opportunities to promote products and services in a larger market area, and professional fees incurred during the course of the Company's minority stock offering and planned integration of Farmers & Mechanics Bank.
Gerard P. Cuddy, President and Chief Executive Officer of the Company, said "In the face of a challenging market environment characterized by a flat yield curve, we are encouraged by the maintenance of our net interest margin as we continue to change the mix of our assets and liabilities. We also anticipate continued growth in revenue from our insurance and wealth management lines of business. Most importantly," Cuddy continued, "we are emboldened by the outstanding support of our depositors, evidenced by their participation in our recent minority stock offering, and look forward to uniting the significant financial and human resources of both Beneficial and FMS for the benefit of our shareholders, customers and the communities we serve."
This news release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements can generally be identified by the fact that they do not relate strictly to historical or current facts. They often include words like "believe," "expect," "anticipate," "estimate" and "intend" or future or conditional verbs such as "will," "would," "should," "could" or "may." Statements in this release that are not strictly historical are forward-looking and are based upon current expectations that may differ materially from actual results. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated by the statements made herein. These risks and uncertainties involve general economic trends, changes in interest rates, loss of deposits and loan demand to other financial institutions, substantial changes in financial markets; changes in real estate value and the real estate market, regulatory changes, possibility of unforeseen events affecting the industry generally, the uncertainties associated with newly developed or acquired operations, the outcome of pending litigation, and market disruptions and other effects of terrorist activities. The Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required under the rules and regulations of the Securities and Exchange Commission.
CONTACT: Joseph F. Conners
Executive Vice President and Chief Financial Officer
PHONE: (215) 864-6000
FAX: (215) 864-1770