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Beneficial Mutual Bancorp, Inc. Announces Fourth Quarter and Full Year 2009 Results

PHILADELPHIA, Feb 03, 2010 (BUSINESS WIRE) -- Beneficial Mutual Bancorp, Inc. ("Beneficial") (NASDAQGS: BNCL), the parent company of Beneficial Bank (the "Bank"), today announced its financial results for the three and twelve months ended December 31, 2009.

For the three months ended December 31, 2009, Beneficial recorded net income of $6.2 million, or $0.08 per share, compared to net income of $5.8 million, or $0.07 per share for the three months ended September 30, 2009.

During the twelve months ended December 31, 2009, Beneficial recorded earnings of $17.1 million, or $0.22 per share, compared to earnings of $16.5 million, or $0.21 per share recorded for the twelve months ended December 31, 2008. The earnings recorded for the twelve months ended December 31, 2008 included a curtailment gain related to pension plan modifications with an after-tax impact of $4.7 million, or $0.06 per share.

"We are pleased with our growth and the continued improvement in our performance in light of the difficult economic environment," said Gerard Cuddy, Beneficial's President and CEO. "Our deposit and loan growth during 2009 is a testament to the energy of our employees to seize our competitive advantages, along with their commitment to help our customers do the right thing financially."

"We believe that the economic crisis that has gripped our nation and adversely impacted our customers and communities will result in a refocus on financial responsibility. We remain committed to the financial responsibility we've practiced throughout our 157 year history," Cuddy said. "We'll maintain a strong capital position in order to advance our growth strategy by working with our customers to help them save and use credit wisely, and we'll continue to dedicate financial and human capital to support organizations that share our sense of responsibility to do what's right for the communities we serve."

Highlights for the quarter ended December 31, 2009:

Highlights for the year ended December 31, 2009:

Balance Sheet

Total assets increased $228.6 million, or 5.1%, from $4.4 billion at September 30, 2009, to $4.7 billion at December 31, 2009. The growth in total assets included an increase in investment securities of $117.7 million, an increase in total loans outstanding of $39.2 million and an increase in cash and cash equivalents of $31.3 million. Total deposits increased $227.0 million, or 6.9%, to $3.5 billion at December 31, 2009, compared to $3.3 billion at September 30, 2009, as core deposits increased by $244.3 million, while time deposits decreased by $17.3 million.

For the twelve months ended December 31, 2009, total assets increased 16.8% to $4.7 billion at December 31, 2009, up from $4.0 billion at December 31, 2008. The largest contributors to this growth were increases of $365.5 million in loans outstanding and $176.8 million in investment and trading securities. Total deposits at December 31, 2009 equaled $3.5 billion, an increase of $767.6 million, or 28.0% from December 31, 2008. During 2009, core deposit balances increased by $862.1 million, while time deposits decreased by $94.8 million.

At December 31, 2009, Beneficial's stockholders' equity equaled $637.0 million, or 13.6% of total assets, compared to $635.3 million, or 14.3% of total assets, at September 30, 2009, and $610.5 million, or 15.3% of total assets at December 31, 2008. At December 31, 2009, tangible equity equaled $506.1 million, or 11.1%, of tangible assets.

Asset Quality

Non-performing loans, including loans 90 days past due and still accruing, totaled $120.5 million, or 2.6% of total assets, at December 31, 2009, down from $120.7 million, or 2.7% of total assets, at September 30, 2009. At December 31, 2009, non-performing loans consisted of $77.3 million in commercial loans, $37.5 million in consumer loans and $5.6 million in residential real estate loans. Of the total non-performing consumer loans, $36.8 million, or 98.0%, are government guaranteed student loans. Net charge-offs during the three-month period ended December 31, 2009 were $0.5 million, compared to $2.5 million during the three months ended September 30, 2009. The allowance for loan losses at December 31, 2009 totaled $45.9 million, or 1.6% of total loans outstanding, compared to $42.7 million, or 1.6% of total loans outstanding, at September 30, 2009.

The Bank recorded a provision for loan losses of $3.6 million during the three months ended December 31, 2009, compared to a provision of $2.0 million for the quarter ended September 30, 2009. The provision includes $2.1 million related to specific commercial and residential loans, with the remainder related to portfolio growth and the ongoing evaluation of risk factors applied to the loan portfolio in light of the continued weakness in the commercial real estate market during the quarter.

During the year ended December 31, 2009, the Bank recorded a provision for loan losses of $15.7 million, down from a provision of $18.9 million for the year ended December 31, 2008. Non-performing loans increased to $120.5 million at December 31, 2009, up from $38.0 million at December 31, 2008. While the balance of non-performing loans increased, the provision decreased due to the quality of collateral supporting the non-performing loans. We continue to rigorously review our loan portfolio to ensure that the collateral values remain sufficient to support the outstanding balances. Net charge-offs were $6.7 million for the twelve months ended December 31, 2009 compared to $5.3 million during the year ended December 31, 2008.

Net Interest Income

Beneficial's net interest income increased $2.1 million, or 6.4%, to $34.8 million for the quarter ended December 31, 2009, compared to $32.7 million for quarter ended September 30, 2009.

The net interest margin decreased to 3.29% for the three months ended December 31, 2009, down 10 basis points from the three months ended September 30, 2009.

For the twelve months ended December 31, 2009, net interest income was $127.3 million, an increase of 11.7%, or $13.3 million, from $114.0 million for the twelve months ended December 31, 2008. The net interest margin decreased to 3.28% for the twelve months ended December 31, 2009, down from 3.33% for the twelve months ended December, 2008. Core deposits, which include all savings and transaction accounts, were $2.6 billion, or 72.7%, of total deposits at December 31, 2009 compared to $1.7 billion or 61.6% of total deposits at December 31, 2008.

Non-interest Income

Non-interest income decreased to $6.2 million for the three months ended December 31, 2009, down $0.3 million from the $6.5 million recorded for the quarter ended September 30, 2009. The decrease in non-interest income resulted primarily from a decrease in gains on the sale of investment securities available for sale of $0.4 million. During the quarter ended December 31, 2009, the Company recorded an impairment charge of $0.2 million on investment securities available for sale.

Non-interest income increased $3.2 million, or 13.7%, during the twelve months ended December 31, 2009 to $26.8 million, up from $23.6 million for the year ended December 31, 2008. This increase was primarily due to an increase in the gain on the sale of investment securities available for sale of $5.8 million and a decrease in impairment charges on investment securities available for sale of $1.6 million, which was partially offset by a decline in insurance commission income of $2.1 million, a decline in other income of $1.5 million and an increase in the loss on other assets of $0.8 million.

Non-interest Expense

Non-interest expense was $31.2 million for the three months ended December 31, 2009, up $0.7 million, or 2.1%, from $30.5 million for the three months ended September 30, 2009. The increase resulted primarily from an increase in marketing expense of $0.6 million.

During the twelve months ended December 31, 2009, non-interest expense increased $21.6 million to $119.9 million from $98.3 million at December 31, 2008. Salaries and employee benefits increased by $5.6 million during the twelve months ended December 31, 2009, as we enhanced our work force with specific expertise to support our significant growth. FDIC deposit insurance assessment charges increased by $5.3 million during the year ended December 31, 2009, including a special assessment expense of $1.9 million. In addition, the twelve month period ended December 31, 2008 included an expense reduction of $7.3 million resulting from modifications to the Bank's pension plans.

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 68 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 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.

BENEFICIAL MUTUAL BANCORP, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Financial Condition
(Dollars in thousands, except share amounts)
December 31, September 30, December 31,
2009 2009 2008
ASSETS:
Cash and Cash Equivalents:
Cash and due from banks $ 39,739 $ 147,975 $ 44,380
Interest-bearing deposits 139,962 423 9
Federal funds sold - - -
Total cash and cash equivalents 179,701 148,398 44,389
Trading Securities 31,825 - -
Investment Securities:
Available-for-sale (amortized cost of $1,260,670 and $1,129,150 at December 31, and September 30, 2009 respectively and $1,095,232 at December 31, 2008) 1,287,106 1,165,253 1,114,086
Held-to-maturity (estimated fair value of $49,853 and $54,479 at December 31 and September 30, 2009 respectively and $77,369 at December 31, 2008) 48,009 52,176 76,014
Federal Home Loan Bank stock, at cost 28,068 28,068 28,068
Total investment securities 1,363,183 1,245,497 1,218,168
Loans: 2,790,119 2,750,949 2,424,582
Allowance for loan losses (45,855 ) (42,742 ) (36,905 )
Net loans 2,744,264 2,708,207 2,387,677
Accrued Interest Receivable 19,375 19,264 17,543
Bank Premises and Equipment, net 81,255 77,402 78,490
Other Assets:
Goodwill 110,486 110,486 111,462
Bank owned life insurance 32,357 31,971 30,850
Other intangibles 20,430 21,311 23,985
Other assets 90,804 82,531 89,486
Total other assets 254,077 246,299 255,783
Total Assets $ 4,673,680 $ 4,445,067 $ 4,002,050
LIABILITIES AND STOCKHOLDERS' EQUITY:
Liabilities:
Deposits:
Non-interest bearing deposits $ 242,412 $ 230,856 $ 226,382
Interest bearing deposits 3,266,835 3,051,369 2,515,297
Total deposits 3,509,247 3,282,225 2,741,679
Borrowed funds 433,620 443,616 580,054
Other liabilities 93,812 83,957 69,777
Total liabilities 4,036,679 3,809,798 3,391,510
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, 2009 and December 31, 2008 - - -
Common Stock - $.01 par value, 300,000,000 shares authorized, 82,264,457 shares issued and outstanding as of December 31 and September 30, 2009 and December 31, 2008 823 823 823
Additional paid-in capital 345,356 344,663 342,420
Unearned common stock held by employee stock ownership plan (25,489 ) (26,385 ) (28,510 )
Retained earnings (partially restricted) 313,195 307,004 296,106
Accumulated other comprehensive gain (loss), net 6,712 12,760 (299 )
Treasury stock, at cost, 410,904 shares, at December 31 and September 30, 2009 and 0 shares at December 31, 2008 (3,596 ) (3,596 ) -
Total stockholders' equity 637,001 635,269 610,540
Total Liabilities and Stockholders' Equity $ 4,673,680 $ 4,445,067 $ 4,002,050
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,
2009 2008 2009 2008
INTEREST INCOME:
Interest and fees on loans $ 36,660 $ 33,890 $ 140,183 $ 132,645
Interest on overnight investments 110 1 113 523
Interest on trading securities 1 - 1 -
Interest and dividends on investment securities:
Taxable 12,145 14,303 49,438 58,054
Tax-exempt 1,131 540 3,239 1,704
Total interest income 50,047 48,734 192,974 192,926
INTEREST EXPENSE:
Interest on deposits:
Interest bearing checking accounts 2,637 1,560 9,052 5,490
Money market and savings deposits 2,404 3,772 11,073 15,049
Time deposits 5,564 8,627 26,724 38,603

Total

10,605 13,959 46,849 59,142
Interest on borrowed funds 4,675 5,032 18,783 19,773
Total interest expense 15,280 18,991 65,632 78,915
Net interest income 34,767 29,743 127,342 114,011
Provision for loan losses 3,597 13,110 15,697 18,901
Net interest income after provision for loan losses

31,170

16,633

111,645

95,110

NON-INTEREST INCOME:
Insurance commission and related income 1,854 2,212 8,133 10,090
Service charges and other income 3,523 3,816 13,743 15,973
Impairment charge on securities available for sale (161 ) (2,479 ) (1,587 ) (3,216 )
Gain on sale of investment securities available for sale 982 327 6,530 757
Trading securities profits 28 - 28 -
Total non-interest income 6,226 3,876 26,847 23,604
NON-INTEREST EXPENSE:
Salaries and employee benefits 15,387 12,601 58,251 52,684
Pension curtailment - - - (7,289 )
Occupancy 2,920 2,866 11,992 11,693
Depreciation, amortization and maintenance 2,098 2,107 8,822 8,225
Marketing 1,764 2,754 5,889 6,300
Amortization of intangible 881 907 3,555 5,213
Impairment of goodwill - - 976 -
FDIC Insurance 1,249 100 5,633 341
Other 6,857 5,797 24,748 21,136
Total non-interest expense 31,156 27,132 119,866 98,303
Income (loss) before income taxes 6,240 (6,623 ) 18,626 20,411
Income tax expense (benefit) 49 (3,685 ) 1,537 3,865
NET INCOME (LOSS) $ 6,191 $ (2,938 ) $ 17,089 $ 16,546
EARNINGS PER SHARE - Basic $ 0.08 $ (0.04 ) $ 0.22 $ 0.21
EARNINGS PER SHARE - Diluted $ 0.08 $ (0.04 ) $ 0.22 $ 0.21
Average common shares outstanding - Basic 77,687,208 77,778,319 77,693,082 78,702,419
Average common shares outstanding - Diluted 77,765,818 77,778,319 77,723,668 78,702,419
BENEFICIAL MUTUAL BANCORP, INC. AND SUBSIDIARIES
Selected Consolidated Financial and Other Data of the Company (Unaudited)
(Dollars in thousands)
December 31, September 30, December 31,
2009 2009 2008
ASSET QUALITY INDICATORS:
Non-performing assets:
Non-accruing loans $ 72,307 $ 73,692 $ 17,163
Accruing loans past due 90 days or more 48,175 46,996 20,883
Total non-performing loans 120,482 120,688 38,046
Troubled debt restructurings 33,337 14,247 16,442
Real estate owned 9,061 8,194 6,297
Total non-performing assets $ 162,880 $ 143,129 $ 60,785
Non-performing loans to total loans 4.32 % 4.39 % 1.57 %
Non-performing loans to total assets 2.58 % 2.72 % 0.95 %
Non-performing assets to total assets 3.49 % 3.22 % 1.52 %
Non-performing assets less accruing loans

Past due 90 days or more to total assets

2.45

%

2.16

%

1.00 %

For the Three Months
Ended December 31,

For the Twelve Months
Ended December 31,

2009 2008 2009 2008
PERFORMANCE RATIOS:
(annualized)
Return on average assets 0.53 % (0.30 %) 0.40 % 0.44 %
Return on average equity 3.84 % (1.93 %) 2.74 % 2.70 %
Net interest margin 3.29 % 3.34 % 3.28 % 3.33 %

SOURCE: Beneficial Mutual Bancorp, Inc.

Beneficial Mutual Bancorp, Inc.
Joseph F. Conners
Executive Vice President and Chief Financial Officer
215-864-6000

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