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PHILADELPHIA, May 1, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- Beneficial Mutual Bancorp, Inc. (the "Company") (Nasdaq: BNCL), the parent company of Beneficial Bank (the "Bank"), today announced its financial results for the first quarter of 2008.
Net income for the three months ended March 31, 2008 was $6.1 million, an increase of $4.3 million from the $1.8 million earned in the first quarter of 2007, and an increase of $6.2 million from the net loss of $168,000 recorded in the fourth quarter of 2007. Earnings per share for the first quarter of 2008 were $0.08, compared to earnings per share of $0.00 for the fourth quarter of 2007.
In July 2007, the Company completed its initial public offering and acquired FMS Financial Corporation ("FMS"), the parent company of Farmers & Mechanics Bank of Burlington, New Jersey, which resulted in significant changes to the Company's balance sheet and income statement from the prior year period. In October 2007, the Bank's wholly owned subsidiary, Beneficial Insurance Services, LLC, acquired the business of the CLA Agency, Inc. ("CLA"), a full service property and casualty, and professional liability insurance agency headquartered in Newtown Square, Pennsylvania. In addition, the fourth quarter of 2007 was impacted by a charge for severance benefits related to a reduction in force, an increased provision for loan losses and an impairment charge on available for sale securities, offset by a significant income tax benefit.
"We are pleased that we are beginning to see the benefit of the significant transformation we began last year," said Gerard Cuddy, the Company's President and CEO. "With the completion of our offering and the acquisitions of FMS and CLA, we have strengthened our capital position, expanded our market area, and doubled our capacity to generate insurance revenue." Cuddy added, "Equally important, we have refocused our entire team on customer service, growth, increased market share and profitability." He continued, "Contributors to our positive results included strong growth in deposits, a stable net interest margin, increased non-interest income and continued strong asset quality."
Highlights for the quarter included:
-- Deposits increased by $89.2 million, or 3.6%, to $2.6 billion at March
31, 2008, up from $2.5 billion at December 31, 2007. Total loans
outstanding also grew during the first quarter of 2008, to
$2.2 billion, up from $2.1 billion at the end of 2007.
-- Net interest income increased by $1.0 million, or 3.9%, to
$27.1 million for the quarter ended March 31, 2008, from $26.1 million
in the fourth quarter of 2007. The Company's net interest margin rose
to 3.30% for the first quarter of 2008, up from 3.27% for the previous
quarter.
-- The Company's non-interest income increased $3.3 million, or 80.8%, to
$7.3 million during the first quarter of 2008, from $4.1 million during
the three months ended December 31, 2007, and included increased
insurance commission income of $1.2 million, primarily related to the
acquisition of CLA, and the receipt of $461,000 on the partial
mandatory redemption of the Company's equity interest in Visa, Inc. in
connection with Visa's initial public offering in March 2008. During
the quarter ended December 31, 2007, the Company recorded an impairment
charge of $1.2 million related to the value of common equity securities
deemed to be other-than-temporarily-impaired.
Balance Sheet
Total assets increased $140.9 million, or 4.0%, to $3.7 billion at March 31, 2008, compared to $3.6 billion at December 31, 2007. The increase in total assets was primarily due to an increase in investment securities of $98.9 million and an increase in total loans outstanding of $35.4 million during the first quarter.
Total deposits increased $89.2 million, or 3.6%, to $2.6 billion at March 31, 2008 compared to $2.5 billion at December 31, 2007. Both interest bearing and non-interest bearing deposits grew during the first quarter.
At March 31, 2008, the Company's stockholders' equity equaled $613.8 million, or 16.6% of total assets, compared to stockholder's equity of $619.8 million, or 17.4% of total assets at December 31, 2007. The decline in equity resulted primarily from the impact of the adoption of new accounting guidance on life insurance benefit programs during the quarter ended March 31, 2008.
Asset Quality
The Bank does not originate subprime loans, which are defined as mortgage loans advanced to borrowers who do not qualify for market interest rates because of problems with their credit history.
Nonperforming loans totaled $13.5 million, or 0.36% of total assets, at March 31, 2008, compared to $16.3 million, or 0.46% of total assets, at December 31, 2007. Net charge-offs during the three month period ended March 31, 2008 were $3.1 million, compared to $900,000 for the fourth quarter of 2007. The allowance for loan losses at March 31, 2008 totaled $20.6 million, or 0.95%, of total loans outstanding, compared to $23.3 million, or 1.10% of total loans outstanding, at December 31, 2007.
The increase in net charge-offs and the decline in the allowance for loan losses resulted primarily from the charge-off of a single loan to an affiliate of a Philadelphia-based development company that filed for Chapter 11 bankruptcy in June 2007. The full outstanding balance of this loan was reserved for in the fourth quarter of 2007. The Bank recorded a provision for loan losses of $300,000 during the three months ended March 31, 2008, compared to $2.2 million for the fourth quarter of 2007.
Net Interest Income
The Company's net interest income increased $11.7 million, or 76.2%, to $27.1 million for the three months ended March 31, 2008, compared to $15.4 million for the same period in 2007, and increased by $1.0 million, or 3.9% from the three months ended December 31, 2007. The net interest margin rose to 3.30% for the three months ended March 31, 2008, an increase of 45 basis points from the same period in 2007, and an increase of 3 basis points from the quarter ended December 31, 2007.
Non-interest Income
Non-interest income rose to $7.3 million for the three months ended March 31, 2008, up $4.5 million from the $2.8 million recorded for the first quarter of 2007, and $3.3 million from the $4.1 million recorded for the quarter ended December 31, 2007. The increases in non-interest income were primarily due to growth in service charges and other income related to significantly higher levels of transaction accounts resulting from the acquisition of FMS, and increases in insurance commission revenue due to the acquisition of CLA.
Non-interest Expense
Non-interest expense was $25.9 million for the three months ended March 31, 2008, up $9.9 million, or 62.0%, from $16.0 million for the comparable period in 2007. Compared to the quarter ended December 31, 2007, which included a charge of approximately $3.9 million related to the Bank's reduction in force announced in October 2007, and other expenses primarily related to the acquisition of FMS, first quarter non-interest expense was down $6.7 million, or 20.5%.
About Beneficial Mutual Bancorp
The Company 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 for more than 150 years. The Bank is the oldest and largest bank headquartered in Philadelphia, Pennsylvania with 72 offices in the greater Philadelphia and South 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 the Company, please visit http://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 the Company's loan or investment portfolios. Additionally, other risks and uncertainties may be described in the Company'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, the Company assumes no obligation to update any forward-looking statements.
BENEFICIAL MUTUAL BANCORP, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Financial Condition
(Dollars in thousands, except share amounts)
March 31, December 31, March 31,
2008 2007 2007
ASSETS:
Cash and Cash Equivalents:
Cash and due from banks $46,061 $53,545 $18,088
Interest-bearing deposits 4,650 4,782 4,333
Federal funds sold 0 0 9,054
Total cash and cash equivalents 50,711 58,327 31,475
Investment Securities:
Available-for-sale (amortized cost of
$1,053,659, $938,835 and $328,983
at March 31, 2008, December 31, 2007
and March 31, 2007, respectively) 1,063,497 949,795 325,265
Held-to-maturity (estimated fair value
of $93,412, $111,127 and $122,934
at March 31, 2008, December 31, 2007
and March 31, 2007, respectively) 92,903 111,986 125,428
Federal Home Loan Bank stock, at cost 23,086 18,814 14,108
Total investment securities 1,179,486 1,080,595 464,801
Loans: 2,156,313 2,120,922 1,661,610
Allowance for loan losses (20,580) (23,341) (17,462)
Net loans 2,135,733 2,097,581 1,644,148
Accrued Interest Receivable 17,224 18,089 10,948
Bank Premises and Equipment, net 77,602 79,027 34,356
Other Assets:
Goodwill 110,214 110,335 6,679
Bank owned life insurance 29,758 29,405 28,348
Other intangibles 27,452 29,199 1,869
Other assets 70,529 55,260 54,700
Total other assets 237,953 224,199 91,596
Total Assets $3,698,709 $3,557,818 $2,277,324
LIABILITIES AND STOCKHOLDERS' EQUITY:
Liabilities:
Deposits:
Non-interest bearing deposits $243,179 $242,351 $74,322
Interest bearing deposits 2,311,199 2,222,812 1,559,203
Total deposits 2,554,378 2,465,163 1,633,525
Borrowed funds 461,080 407,122 299,196
Other liabilities 69,454 65,736 61,826
Total liabilities 3,084,912 2,938,021 1,994,547
Commitments and Contingencies
Stockholders' Equity:
Preferred Stock - $.01 par value,
100,000,000 shares authorized, none
issued or outstanding as of March 31,
2008; none authorized, issued or
outstanding as of December 31, 2007 - - -
Common Stock - $.01 par value,
300,000,000 shares authorized,
82,264,457 shares issued and
outstanding as of March 31, 2008
and December 31, 2007; $1.00 par
value, 100,000 authorized,
100 shares issued and outstanding as
of March 31, 2007 823 823 -
Additional paid-in capital 360,108 360,126 -
Unearned common stock held by employee
stock ownership plan (30,232) (30,635) -
Retained earnings (partially
restricted) 285,621 291,360 294,907
Accumulated other comprehensive loss,
net (2,523) (1,877) (12,130)
Total stockholders' equity 613,797 619,797 282,777
Total Liabilities and Stockholders'
Equity $3,698,709 $3,557,818 $2,277,324
BENEFICIAL MUTUAL BANCORP, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
For the Three Months Ended
March 31, December 31, March 31,
2008 2007 2007
INTEREST INCOME:
Interest and fees on loans $32,495 $33,105 $25,766
Interest on federal funds sold 361 336 12
Interest and dividends on investment
securities:
Taxable 15,019 14,042 5,356
Tax-exempt 367 310 247
Total interest income 48,242 47,793 31,381
INTEREST EXPENSE:
Interest on deposits:
Interest bearing checking accounts 1,286 1,722 424
Money market and savings deposits 3,758 3,556 2,669
Time deposits 11,146 11,463 9,195
Total 16,190 16,741 12,288
Interest on borrowed funds 4,934 4,963 3,706
Total interest expense 21,124 21,704 15,994
Net interest income 27,118 26,089 15,387
Provision for loan losses 300 2,170 300
Net Interest Income After Provision for
Loan Losses 26,818 23,919 15,087
NON-INTEREST INCOME:
Insurance commission and related
income 3,265 2,110 1,195
Service charges and other income 3,942 3,508 1,336
Impairment charge on securities
available-for-sale - (1,192) -
Gain (Loss) on sale of investment
securities available for sale 128 (368) 313
Total non-interest income 7,335 4,058 2,844
NON-INTEREST EXPENSE:
Salaries and employee benefits 12,992 18,832 9,123
Occupancy 2,946 2,913 1,960
Depreciation, amortization and
maintenance 1,975 2,226 1,348
Advertising 1,111 1,747 686
Amortization of intangible 1,747 1,811 88
Other 5,121 5,031 2,776
Total non-interest expense 25,892 32,560 15,981
Income (Loss) before income taxes 8,261 (4,583) 1,950
Income tax expense (benefit) 2,200 (4,415) 200
NET INCOME (LOSS) $6,061 $(168) $1,750
EARNINGS (LOSS) PER SHARE - Basic and
Diluted $0.08 $(0.00) $.04
Average common shares outstanding 79,214,946 79,143,390 45,792,775
- Basic and Diluted
Earnings per share information for March 31, 2008 is calculated by giving retroactive application to the weighted average number of mutual holding company shares outstanding (45,792,775) on the July 13, 2007 closing date of the Company's minority stock offering.
BENEFICIAL MUTUAL BANCORP, INC. AND SUBSIDIARIES
Selected Consolidated Financial and Other Data of the Company (Unaudited)
(Dollars in thousands)
March 31, December 31, March 31,
2008 2007 2007
ASSET QUALITY INDICATORS:
Non-performing assets:
Non-accruing loans $2,573 $7,685 $3,244
Accruing loans past due
90 days or more 10,918 8,626 5,174
Total non-performing loans 13,491 16,311 8,418
Real estate owned 5,561 4,797 2,876
Total non-performing assets $19,052 $21,108 $11,294
Ratio of nonperforming loans to
total loans 0.63% 0.77% 0.51%
Ratio of nonperforming loans to
total assets 0.36% 0.46% 0.37%
Ratio of nonperforming assets
to total assets 0.52% 0.59% 0.50%
March 31, December 31, March 31,
2008 2007 2007
PERFORMANCE RATIOS:
(annualized)
Return on average assets 0.66% (0.00%) 0.31%
Return on average equity 3.90% (0.02%) 2.49%
Net interest margin 3.30% 3.27% 2.85%
March 31, December 31, March 31,
2008 2007 2007
Other:
Employees (full-time
equivalents) 864 877 545
CONTACT: Joseph F. Conners
Executive Vice President and Chief Financial Officer
PHONE: (215) 864-6000
SOURCE Beneficial Mutual Bancorp, Inc.
http://www.thebeneficial.com
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