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PHILADELPHIA, July 31, 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 second quarter of 2008.
Net income for the three months ended June 30, 2008 was $9.1 million, an increase of $3.0 million from the $6.1 million earned in the first quarter of 2008. Earnings per share for the second quarter of 2008 were $0.11, compared to earnings per share of $0.08 for the first quarter of 2008. During the second quarter, the Company recorded a non-recurring curtailment gain of $7.3 million related to pension plan modifications. The after-tax impact of this curtailment gain was $4.7 million, or $0.06 per share.
The Company recorded a $2.3 million provision for loan losses during the quarter, and incurred an impairment charge of $0.5 million related to the value of certain common equity securities deemed to be other-than-temporarily impaired.
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.
"Beneficial's capital strength, asset quality and liquidity continue to provide a substantial platform supporting sustained growth in loans and deposits," said Gerard Cuddy, the Company's President and CEO. "Based on our success in building commercial loans and in light of overall economic conditions, we've prudently increased our allowance for loan losses while maintaining the quality of our loan portfolio through disciplined underwriting and proactive portfolio management. We continue to focus our entire team on customer service, increased market share and profitability."
Highlights for the quarter included:
-- Deposits increased $47.0 million, or 1.8%, during the quarter to $2.6 billion at June 30, 2008, and total loans outstanding grew by $77.9 million, or 3.6%, to $2.2 billion.
-- Net interest income increased by $0.9 million, or 3.5%, to $28.1 million for the quarter ended June 30, 2008. The Company's net interest margin increased one basis point during the quarter to 3.31%.
-- The Company froze the Bank's defined benefit pension plan as well as the defined benefit pension plan it assumed in connection with its acquisition of Farmers & Mechanics Bank, effective June 30, 2008, which resulted in a curtailment gain of $7.3 million. Additionally the Company has enhanced its 401(k) Plan and combined it with its recently adopted Employee Stock Ownership Plan to fund employer contributions.
Balance Sheet
Total assets increased $49.2 million, or 1.3%, to $3.7 billion at June 30, 2008. The increase in total assets resulted primarily from an increase in total loans outstanding of $77.9 million, which was partially offset by a decrease in investment securities of $26.6 million from March 31, 2008. Total deposits increased $47.0 million, or 1.8% from March 31, 2008 to $2.6 billion at June 30, 2008.
At June 30, 2008, the Company's stockholders' equity equaled $617.6 million, or 16.5% of total assets, compared to stockholder's equity of $613.8 million, or 16.6% of total assets at 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.
Net charge-offs for the three-month period ended June 30, 2008 were $0.3 million, compared to the $3.1 million reported for the three-month period ended March 31, 2008. Net charge-offs during the first quarter 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 amount of this loan was reserved for in the fourth quarter of 2007. Non-performing loans increased to $15.7 million, or 0.4% of total assets, at June 30, 2008, compared to $13.5 million, or 0.4% of total assets at March 31, 2008.
The Bank recorded a provision for loan losses of $2.3 million during the three months ended June 30, 2008 compared to $0.3 million during the three months ended March 31, 2008. The allowance for loan losses at June 30, 2008 totaled $22.5 million, or 1.01%, of total loans outstanding, compared to $20.6 million, or 0.95% of total loans outstanding at March 31, 2008.
The increase in the provision was due primarily to a risk assessment regarding general economic conditions along with the increase in commercial loans outstanding. The allowance for loan losses at June 30, 2008 represents management's estimate of the level necessary to cover inherent losses in the loan portfolio. Overall, the quality of the loan portfolio has remained strong.
Net Interest Income
The Company's net interest income increased $0.9 million, or 3.5%, to $28.1 million for the three months ended June 30, 2008, primarily due to a decrease in interest expense related to time deposits. The net interest margin was 3.31% for the three months ended June 30, 2008, a one basis point increase from the quarter ended March 31, 2008.
Non-interest Income
Non-interest income declined to $5.9 million for the three months ended June 30, 2008, down $1.4 million from the $7.3 million recorded for the first quarter of 2008. The decrease in non-interest income was primarily due to the cyclical nature of insurance commission revenue, coupled with the impairment charge of $0.5 million related to the value of certain common equity securities in the available-for-sale investment portfolio.
Non-interest Expense
Non-interest expense was $18.6 million for the three months ended June 30, 2008, down $7.3 million, or 28.0%, from $25.9 million for the first quarter of 2008. This decrease in expense is primarily the result of the pension curtailment gain recorded in the second quarter.
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 Southern New Jersey regions. Insurance services are offered through Beneficial Insurance Services, LLC and wealth management services are offered through Beneficial Advisors, LLC, both wholly owned subsidiaries of the Bank. For more information about the Bank and the Company, 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 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.
CONTACT: Joseph F. Conners
Executive Vice President and Chief Financial Officer
PHONE: (215) 864-6000
BENEFICIAL MUTUAL BANCORP, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Financial Condition
(Dollars in thousands, except per share amounts)
June 30, March 31, December 31, June 30,
2008 2008 2007 2007
ASSETS:
Cash and Cash Equivalents:
Cash and due from banks $46,373 $46,061 $53,545 $20,348
Interest-bearing deposits 238 4,650 4,782 3,518
Federal funds sold 131 - - 71,512
Total cash and
cash equivalents 46,742 50,711 58,327 95,378
Investment Securities:
Available-for-sale
(amortized cost of
$1,050,513, $1,052,459,
$938,835 and $592,508
at June 30 and March 31,
2008, December 31,
and June 30, 2007,
respectively) 1,041,424 1,062,297 949,795 585,297
Held-to-maturity
(estimated fair value of
$87,311, $93,412, $111,127
and $117,043 at June 30
and March 31, 2008,
December 31 and June 30,
2007, respectively) 88,159 92,903 111,986 120,710
Federal Home Loan Bank
stock, at cost 22,112 23,086 18,814 13,717
Total investment
securities 1,151,695 1,178,286 1,080,595 719,724
Loans: 2,234,252 2,156,313 2,120,922 1,632,639
Allowance for loan
losses (22,539) (20,580) (23,341) (17,238)
Net loans 2,211,713 2,135,733 2,097,581 1,615,401
Accrued Interest Receivable 16,265 17,224 18,089 11,526
Bank Premises and Equipment,
net 78,192 77,602 79,027 35,500
Other Assets:
Goodwill 110,440 110,214 110,335 6,679
Bank owned life
insurance 30,117 29,758 29,405 28,698
Other intangibles 25,799 27,452 29,199 1,785
Other assets 76,969 71,729 55,260 65,574
Total other assets 243,325 239,153 224,199 102,736
Total Assets $3,747,932 $3,698,709 $3,557,818 $2,580,265
LIABILITIES AND STOCKHOLDERS'
EQUITY:
Liabilities:
Deposits:
Non-interest bearing
deposits $228,531 $243,179 $242,351 $89,689
Interest bearing
deposits 2,372,797 2,311,199 2,222,812 1,522,997
Total deposits 2,601,328 2,554,378 2,465,163 1,612,686
Borrowed funds 471,788 461,080 407,122 232,746
Other liabilities 57,238 69,454 65,736 452,423
Total liabilities 3,130,354 3,084,912 2,938,021 2,297,855
Commitments and Contingencies
Stockholders' Equity:
Preferred Stock - $.01 par
value, 100,000,000 shares
authorized, none issued
or outstanding as of
June 30 and March 31, 2008
and December 31 and
June 30, 2007 - - - -
Common Stock - $.01 par
value, 300,000,000 shares
authorized, 82,264,457
shares issued and
outstanding as of June 30,
2008, March 31, 2008 and
December 31, 2007; $1.00
par value, 100,000
authorized, 100 shares
issued and outstanding as
of June 30, 2007 823 823 823 -
Additional paid-in
capital 360,156 360,108 360,126 -
Unearned common stock
held by employee stock
ownership plan (29,829) (30,232) (30,635) -
Retained earnings
(partially restricted) 294,723 285,621 291,360 296,568
Accumulated other
comprehensive loss, net (8,295) (2,523) (1,877) (14,158)
Total stockholders'
equity 617,578 613,797 619,797 282,410
Total Liabilities and
Stockholders' Equity $3,747,932 $3,698,709 $3,557,818 $2,580,265
BENEFICIAL MUTUAL BANCORP, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
2008 2007 2008 2007
INTEREST INCOME:
Interest and fees on loans $32,698 $25,875 $65,193 $51,641
Interest on federal funds sold 146 280 507 292
Interest and dividends on
investment securities:
Taxable 14,657 5,805 29,676 11,161
Tax-exempt 369 248 736 495
Total interest
income 47,870 32,208 96,112 63,589
INTEREST EXPENSE:
Interest on deposits:
Interest bearing checking
accounts 1,235 478 2,521 901
Money market and savings
deposits 3,664 2,904 7,421 5,573
Time deposits 10,082 8,888 21,228 18,083
Total 14,981 12,270 31,170 24,557
Interest on borrowed funds 4,832 3,412 9,766 7,119
Total interest
expense 19,813 15,682 40,936 31,676
Net interest income 28,057 16,526 55,176 31,913
Provision for loan losses 2,300 0 2,600 300
Net Interest Income After
Provision for Loan Losses 25,757 16,526 52,576 31,613
NON-INTEREST INCOME:
Insurance commission and
related income 1,876 938 5,141 2,134
Service charges and other
income 4,388 1,385 8,330 2,721
Impairment charge on securities
available-for-sale (473) - (473) -
Net gain on sale of investment
securities available for sale 143 367 271 679
Total non-interest
income 5,934 2,690 13,269 5,534
NON-INTEREST EXPENSE:
Salaries and employee
benefits 13,157 9,267 26,150 18,390
Pension curtailment gain (7,289) - (7,289) -
Occupancy 2,812 2,034 5,758 3,994
Depreciation, amortization
and maintenance 2,047 1,406 4,022 2,754
Advertising 1,214 1,041 2,325 1,727
Amortization of intangible 1,654 84 3,400 172
Other 5,045 3,247 10,166 6,024
Total non-interest
expense 18,640 17,079 44,532 33,061
Income before income taxes 13,051 2,137 21,313 4,086
Income tax expense 3,950 225 6,150 425
NET INCOME $9,101 $1,912 $15,163 $3,661
EARNINGS PER SHARE - Basic
and Diluted $0.11 $0.04 $0.19 $0.08
Average common shares
outstanding - Basic
and Diluted 79,255,114 45,792,775 79,235,030 45,792,775
Earnings per share information for June 30, 2007 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
Unaudited Selected Consolidated Financial and Other Data of the Company
(Dollars in thousands)
June 30, March 31, December 31, June 30,
2008 2008 2007 2007
ASSET QUALITY INDICATORS:
Non-performing assets:
Non-accruing loans $3,406 $2,573 $7,685 $7,203
Accruing loans past
due 90 days or more 12,284 10,918 8,626 4,911
Total non-performing loans 15,690 13,491 16,311 12,114
Real estate owned 7,439 5,561 4,797 2,773
Total non-performing
assets $23,129 $19,052 $21,108 $14,887
ASSET QUALITY RATIOS:
Non-performing loans to total
loans 0.70 % 0.63 % 0.77 % 0.74 %
Non-performing loans to total
assets 0.42 % 0.36 % 0.46 % 0.47 %
Non-performing assets to
total assets 0.62 % 0.52 % 0.59 % 0.58 %
Non-performing assets less
accruing loans Past due 90
or more to total assets 0.29 % 0.22 % 0.35 % 0.39 %
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
2008 2007 2008 2007
PERFORMANCE RATIOS:
(annualized)
Return on average assets 0.98 % 0.32 % 0.82 % 0.32 %
Return on average equity 5.98 % 2.72 % 4.91 % 2.62 %
Net interest margin 3.31 % 3.02 % 3.30 % 2.94 %
June 30, March 31, December 31, June 30,
2008 2008 2007 2007
Other:
Employees (full-time
equivalents) 862 864 877 563
SOURCE Beneficial Mutual Bancorp, Inc.
http://www.thebeneficial.com
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