Beneficial Mutual Bancorp, Inc. Logo

Print Print page | Email Email page | PDF Download PDF
« Previous Release | Next Release »



Beneficial Mutual Bancorp, Inc. Reports Fourth Quarter and Full Year 2008 Results

PHILADELPHIA, Feb 03, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- Beneficial Mutual Bancorp, Inc. (Beneficial) (Nasdaq: BNCL), the parent company of Beneficial Bank, today announced its financial results for the quarter and year ended December 31, 2008.

For the quarter ended December 31, 2008, Beneficial reported a net loss of $2.9 million, or ($0.04) per share compared to a net loss of $0.2 million for the same quarter in 2007. Beneficial reported net income of $16.5 million or $0.21 per share for the year ended December 31, 2008 compared to a net loss of $1.5 million for the year ended December 31, 2007. During 2008, Beneficial 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.

The fourth quarter loss resulted primarily from a provision for loan losses of $13.1 million during the period, and an impairment charge of $2.5 million related to the value of certain equity securities and mutual funds deemed to be other-than-temporarily impaired (OTTI). In the fourth quarter of 2007, the provision for loan losses was $2.2 million and an OTTI impairment charge of $1.2 million was recorded with respect to equity securities.

In July 2007, Beneficial 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 Beneficial's balance sheet and income statement compared to the current year period.

"We continue to grow market share by taking advantage of the opportunities the current environment presents to a well-capitalized company like Beneficial," said Gerard Cuddy, Beneficial's President and CEO. "While our fourth quarter performance was impacted by the severe economic and market deterioration in the U.S. and abroad, I'm encouraged that our core deposit gathering, lending, insurance and wealth management activities remain strong and continue to grow. Our employees are doing a great job. They continue to work hard to help our existing and new customers do the right thing financially. I remain confident that Beneficial's capital strength, asset quality, liquidity, strong customer focus, and values provide a substantial platform for sustained growth."

Highlights for the quarter ended December 31, 2008 included:

    --  Total loans outstanding grew by $101.3 million, or 4.4%, to $2.4 billion
        at December 31, 2008, up from $2.3 billion at the end of the third
        quarter 2008.

    --  Total deposits increased $106.5 million, or 4.0%, to $2.7 billion during
        the quarter.

    --  Net interest income increased by $0.7 million, or 2.2%, to $29.7 million
        for the quarter, up from $29.1 million for the third quarter 2008.

    --  Due to its strong capital position, Beneficial elected not to
        participate in the Treasury Department's Capital Purchase Program.

Highlights for the year ended December 31, 2008 included:

    --  Total loans outstanding grew $303.7 million, or 14.3% to end the year at
        $2.4 billion.

    --  Total deposits increased during 2008 by $276.5 million, or 11.2%, to
        $2.7 billion.

    --  Net interest income increased by 35.5% to $114.0 million, up from $84.1
        million for the year ended December 31, 2007.

    --  Non-interest income increased $10.2 million during 2008, or 76.5% to
        $23.6 million.

Balance Sheet

During the quarter ended December 31, 2008, total assets increased $159.1 million, or 4.1%, to $4.0 billion. Loans outstanding increased by $101.3 million during the quarter as commercial loans grew by $76.8 million and consumer loans increased, primarily as a result of the purchase of a guaranteed student loan participation totaling $40.1 million, partially offset by declines in home equity and auto loans. Investment securities increased by $81.5 million during the quarter, while cash and cash equivalents decreased $17.4 million. Total deposits increased $106.5 million, or 4.0% during the quarter, to $2.7 billion at December 31, 2008, as core deposits grew by $78.2 million and time deposits increased by $29.8 million.

For the year ended December 31, 2008, total assets grew by $444.2 million or 12.5% over the $3.6 billion at December 31, 2007. This increase was mainly attributable to an increase in loans outstanding of $303.7 million and growth in investment securities of $137.6 million. Total deposits grew by 11.2%, or $276.5 million, to $2.7 billion during the year.

At December 31, 2008, Beneficial's stockholders' equity equaled $610.5 million, or 15.3% of total assets, compared to stockholders' equity of $606.9 million, or 15.8% of total assets at September 30, 2008. This increase resulted primarily from an increase in unrealized gains on available for sale securities of $16.2 million, as interest rates declined sharply during the quarter, partially offset by an increase in pension liability of $10.2 million during the quarter. The increase in pension liabilities was due primarily to a decline in the value of the pension funds' equity holdings. During the year ended December 31, 2008, Beneficial's stockholders' equity decreased 1.5% to $610.5 million compared to $619.8 reported at December 31, 2007.

Asset Quality

Beneficial is not a participant or originator in the subprime mortgage loan or subprime collateralized debt markets, and held no Fannie Mae or Freddie Mac preferred shares or subordinated debt, and therefore has no direct exposure to risks associated with these activities.

Beneficial recorded a $13.1 million provision for loan losses during the quarter ended December 31, 2008 compared to a provision of $2.2 million recorded during the quarter ended December 31, 2007. The increase in the provision was due primarily to specific loans evaluated for impairment as noted below, our continuous evaluation of non-performing loans, a risk assessment reflecting a rapid deterioration in the economic environment, and the increase in commercial loans outstanding. Specific details of the provision recorded during the quarter ended December 31, 2008 are as follows:

    --  $5.7 million, or 43.5% of the quarterly provision, was related to one
        shared national credit to a national home builder.  As part of the
        Shared National Credit Program, this loan is reviewed annually by the
        Federal Deposit Insurance Corporation to ensure an efficient and
        consistent review and classification. The balance of this loan was $6.5
        million at December 31, 2008.  This loan has been reserved to reflect
        the anticipated net realizable value of the liquidation of the
        underlying collateral;

    --  $1.9 million was associated with reserves for other specific commercial
        loans to reflect the net realizable value of their underlying
        collateral;

    --  $5.4 million was related to the ongoing evaluation of risk factors
        applied to the remainder of the loan portfolio.

For the year ended December 31, 2008, a provision for loan losses of $18.9 million was recorded, bringing the allowance for loan losses at December 31, 2008 to $36.9 million, or 1.5% of total loans outstanding, compared to $23.3 million, or 1.1% of total loans outstanding, at December 31, 2007. This allowance represents management's estimate of the amount necessary to cover known and inherent losses in the loan portfolio.

Net charge-offs for the quarter ended December 31, 2008 equaled $1.4 million, compared to $0.9 million for the quarter ended December 31, 2007. Non-performing loans increased to $38.0 million, or 1.0% of total assets, at December 31, 2008, and were comprised of $23.6 million in commercial loans, $7.9 million in consumer loans and $6.5 million in residential real estate loans. This compares to non-performing loans of $16.3 million, or 0.5% of total assets, at December 31, 2007.

At December 31, 2008, Beneficial's investments in pooled trust preferred collateralized debt obligations include three securities, each of which are in the most senior tranches, with a total book value of $25.1 million and an estimated fair value of $19.3 million. The most senior tranches of collateralized debt obligations generally are protected from defaults by over-collateralization. Based on management's analysis as of December 31, 2008, all of these securities are expected to return 100% of their principal and interest.

Due to the weakened condition of the market for equity securities and mutual funds in the fourth quarter of 2008 and the evaluation of the near term prospects of the issuers in relation to the severity of the decline, Beneficial recorded a charge related to the value of common equity securities of various financial services companies and mutual funds that were deemed to be OTTI. The OTTI charge recognized during the quarter ended December 31, 2008 equaled $2.5 million, of which $1.9 million related to equity securities and $0.6 million related to mutual funds.

Net Interest Income

Beneficial's net interest income increased $3.7 million, or 14.0%, for the quarter ended December 31, 2008, from $26.1 million for the same quarter in 2007. For the year ended December 31, 2008, net interest income equaled $114.0 million, an increase of $29.9 million, or 35.5%, from the previous year attributable primarily to increased volume levels.

For the quarter ended December 31, 2008, the net interest margin increased seven basis points to 3.34% compared to 3.27% for the same quarter in 2007. The net interest margin increased by 16 basis points for the year ended December 31, 2008 to 3.33%, up from 3.17% for the year ended December 31, 2007.

Non-interest Income

Non-interest income decreased to $3.9 million for the quarter ended December 31, 2008, down $0.2 million, or 4.5%, from the quarter ended December 31, 2007, as increases in insurance commission income and service charges and other income were offset by the previously mentioned impairment charge.

For the year ended December 31, 2008, non-interest income rose $10.2 million, or 76.5%, over the year ended December 31, 2007. The largest contributors to that increase were an increase in insurance commission income of $4.9 million, or 93.2%, and an increase in service charges and other income of $6.9 million, or 76.4% over prior year. The increase in insurance commission income was a result of the acquisition of CLA Agency, Inc. (CLA), a full-service property and casualty and professional liability insurance brokerage company during the fourth quarter of 2007.

Non-interest Expense

Non-interest expense was $27.1 million for the quarter ended December 31, 2008, compared to $32.6 million for the same quarter in 2007. This $5.4 million decrease was due primarily to a decrease in salaries and employee benefits of $6.2 million related to severance payments incurred in the fourth quarter of 2007 in connection with the acquisition of FMS and a separate reduction in force, offset by an increase in advertising expense by $1.0 million.

For the year ended December 31, 2008, non-interest expense decreased $2.7 million from December 31, 2007. During 2008, Beneficial elected to freeze its defined benefit plans and recorded a pension curtailment gain of $7.3 million. This gain was offset by an increase in occupancy expense of $2.3 million and an increase in advertising expense of $1.8 million. The increase in occupancy expense is a result of the acquisitions of FMS and CLA in 2007.

About Beneficial Mutual Bancorp

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 for more than 150 years. Beneficial 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 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 (SEC), 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.


    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)

                                          December     September     December
                                          31, 2008     30, 2008      31, 2007
    ASSETS:
      Cash and Cash Equivalents:
        Cash and due from banks            $44,380      $47,674       $53,545
        Interest-bearing deposits                9       11,902         4,782
        Federal funds sold                       -        2,250             -
                   Total cash and cash
                    equivalents             44,389       61,826        58,327

      Investment Securities:
        Available-for-sale
         (amortized cost of
         $1,095,252 and
         $1,032,592 for
         December 31 and
         September 30, 2008,
         respectively and
         $938,835  at December
         31, 2007)                       1,114,086    1,024,390       949,795
        Held-to-maturity
         (estimated fair value
         of $77,369 and
         $83,963 at December 31
         and September 30,
         2008, respectively
         and $111,127 at
         December 31, 2007)                 76,014       84,401       111,986
        Federal Home Loan Bank
         stock, at cost                     28,068       27,872        18,814
                   Total investment
                    securities           1,218,168    1,136,663     1,080,595

      Loans:                             2,424,582    2,323,280     2,120,922
        Allowance for loan losses          (36,905)     (25,208)      (23,341)
                   Net loans             2,387,677    2,298,072     2,097,581

      Accrued Interest Receivable           17,543       17,506        18,089

      Bank Premises and Equipment, net      78,490       77,724        79,027

      Other Assets:
        Goodwill                           111,462      110,436       110,335
        Bank owned life insurance           30,850       30,481        29,405
        Other intangibles                   23,985       24,893        29,199
        Other assets                        89,486       85,369        55,260
                   Total other assets      255,783      251,179       224,199

    Total Assets                        $4,002,050   $3,842,970    $3,557,818

    LIABILITIES AND STOCKHOLDERS' EQUITY:
      Liabilities:
        Deposits:
          Non-interest bearing deposits   $226,382     $226,303      $242,351
          Interest bearing deposits      2,515,297    2,408,850     2,222,812
                   Total deposits        2,741,679    2,635,153     2,465,163
          Borrowed funds                   580,054      535,896       407,122
          Other liabilities                 69,777       64,981        65,736
                   Total liabilities     3,391,510    3,236,030     2,938,021


    Commitments and Contingencies

      Stockholders' Equity:
        Preferred Stock - $.01
         par value, 100,000,000 shares
         authorized, none
         issued or outstanding
         as of  December 31
         and September 30,
         2008 and December 31,2007               -            -             -
        Common Stock - $.01
         par value, 300,000,000 shares
         authorized, 82,264,457 shares
         issued and outstanding as of
         December 31 and September 30, 2008
         and December 31, 2007                 823          823           823
        Additional paid-in capital         342,420      343,765       360,126
        Unearned common stock
         held by the employee
         savings and stock
         ownership plan                    (28,510)     (29,013)      (30,635)
        Retained earnings (partially
         restricted)                       296,106      299,044       291,360
        Accumulated other comprehensive
         loss, net                            (299)      (7,679)       (1,877)
                   Total stockholders'
                    equity                 610,540      606,940       619,797

    Total Liabilities and
     Stockholders' Equity               $4,002,050   $3,842,970    $3,557,818



    BENEFICIAL MUTUAL BANCORP, INC. AND SUBSIDIARIES
    Unaudited Consolidated Statements of Operations
    (Dollars in thousands, except per share amounts)

                                  For the Three Months  For the Twelve Months
                                   Ended  December 31,     Ended December 31,
                                    2008        2007        2008        2007

    INTEREST INCOME:
      Interest and fees on loans $33,890     $33,106    $132,645    $117,334

      Interest on federal funds
       sold                            1         336         523       1,613

      Interest and dividends on
       investment securities:
         Taxable                  14,303      14,042      58,054      37,885
         Tax-exempt                  540         310       1,704       1,062
              Total interest
               income             48,734      47,794     192,926     157,894

    INTEREST EXPENSE:
      Interest on deposits:
        Interest bearing checking
         Accounts                  1,560       1,722       5,490       4,250
        Money market and savings
         Deposits                  3,772       3,556      15,049      12,503
        Time deposits              8,627      11,464      38,603      40,501
              Total               13,959      16,742      59,142      57,254

      Interest on borrowed funds   5,032       4,963      19,773      16,520

              Total interest
               Expense            18,991      21,705      78,915      73,774

    Net interest income           29,743      26,088     114,011      84,120

    Provision for loan losses     13,110       2,170      18,901       2,470

    Net interest income after
     provision for loan losses    16,633      23,918      95,110      81,650

    NON-INTEREST INCOME:
      Insurance commission and
       related income              2,212       2,110      10,090       5,223
      Service charges and
       other income                3,816       3,508      15,973       9,053
      Impairment charge on
       Securities
       available-for-sale         (2,479)     (1,192)     (3,216)     (1,192)
      Net gain on sale of
       investment securities
       available for sale            327        (368)        757         288
              Total non-interest
               income              3,876       4,058      23,604      13,372

    NON-INTEREST EXPENSE:
      Salaries and employee
       Benefits                   12,601      18,832      52,684      51,118
      Pension curtailment gain         -           -      (7,289)          -
      Occupancy                    2,866       2,913      11,693       9,367
      Depreciation, amortization
       and maintenance             2,107       2,227       8,225       6,970
      Advertising                  2,754       1,747       6,300       4,507
      Amortization of
       intangibles                   907       1,810       5,213       3,434
      Other                        5,897       5,030      21,477      25,636
              Total non-interest
               expense            27,132      32,559      98,303     101,032

    Income (Loss) before income
     Taxes                        (6,623)     (4,583)     20,411      (6,010)

    Income tax expense (benefit)  (3,685)     (4,415)      3,865      (4,465)

    NET INCOME (LOSS)            $(2,938)      $(168)    $16,546     $(1,545)

    EARNINGS (LOSS) PER
     SHARE - Basic                $(0.04)     $(0.00)      $0.21      $(0.03)

    EARNINGS (LOSS) PER
     SHARE - Diluted              $(0.04)     $(0.00)      $0.21      $(0.03)

    Average common
     shares outstanding
     - Basic                  77,778,319  79,143,390  78,702,419  61,374,792
    Average common
     shares outstanding
     - Diluted                77,778,319  79,143,390  78,702,419  61,374,792


    BENEFICIAL MUTUAL BANCORP, INC. AND SUBSIDIARIES
    Unaudited Selected Consolidated Financial and Other Data
    (Dollars in thousands)

                                          December    September  December
                                          31, 2008    30, 2008   31, 2007

    ASSET QUALITY INDICATORS:
      Non-performing assets:
        Non-accruing loans                 $17,163     $13,342     $7,685
        Accruing loans past due 90
         days or more                       20,883      15,023      8,626
    Total non-performing loans              38,046      28,365     16,311

    Troubled debt restructurings            16,442           -          -

    Real estate owned                        6,297       7,355      4,797

                 Total non-performing
                  assets                   $60,785     $35,720    $21,108

    ASSET QUALITY RATIOS:

    Non-performing loans to total loans       1.57%       1.22%      0.77%

    Non-performing loans to total assets      0.95%       0.74%      0.46%

    Non-performing assets to total assets     1.52%       0.93%      0.59%

    Non-performing assets less
     accruing loans
     Past due 90 days or more
     to total assets                          1.00%       0.54%      0.35%


                              For the Three Months     For the Twelve Months
                               Ended December 31,        Ended December 31,
                              2008           2007          2008        2007
    PERFORMANCE RATIOS:
    (annualized)
    Return on average assets (0.30%)        (0.02%)        0.44%      (0.05%)
    Return on average equity (1.93%)        (0.11%)        2.70%      (0.35%)
    Net interest margin       3.34%          3.27%         3.33%       3.17%

SOURCE Beneficial Mutual Bancorp, Inc.

http://www.thebeneficial.com

Copyright (C) 2009 PR Newswire. All rights reserved

Close window | Back to top