Beneficial Bancorp, Inc.
Beneficial Mutual Bancorp Inc (Form: 8-K, Received: 10/27/2011 14:11:27)
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 27, 2011
BENEFICIAL MUTUAL BANCORP, INC.
(Exact name of registrant as specified in its charter)
         
United States   1-33476   56-2480744
         
(State or other jurisdiction
of incorporation)
  (Commission File Number)   (IRS Employer Identification No.)
     
510 Walnut Street, Philadelphia,
Pennsylvania
   
19106
     
(Address of principal executive offices)   (Zip Code)
Registrant’s telephone number, including area code: (215) 864-6000
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 


 

Item 2.02 Results of Operations and Financial Condition.
On October 27, 2011, Beneficial Mutual Bancorp, Inc. (the “Company”), the holding company for Beneficial Bank, issued a press release announcing its financial results for the three and nine months ended September 30, 2011. For more information, reference is made to the Company’s press release dated October 27, 2011, a copy of which is attached to this Report as Exhibit 99.1 and is furnished herewith.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
         
Number   Description
       
 
  99.1    
Press Release dated October 27, 2011

 

 


 

SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
         
  BENEFICIAL MUTUAL BANCORP, INC.
 
 
Date: 10/27/11  By:   /s/ Thomas D. Cestare    
    Thomas D. Cestare   
    Executive Vice President and Chief Financial Officer    

 

 

Exhibit 99.1
FOR IMMEDIATE RELEASE
     
DATE:
  October 27, 2011
CONTACT:
  Thomas D. Cestare
 
  Executive Vice President and Chief Financial Officer
PHONE:
  (215) 864-6009
BENEFICIAL MUTUAL BANCORP, INC. REPORTS THIRD QUARTER NET INCOME OF $4.1 MILLION
PHILADELPHIA, PENNSYLVANIA, October 27, 2011 — Beneficial Mutual Bancorp, Inc. (“Beneficial”) (NASDAQGS: BNCL), the parent company of Beneficial Bank (the “Bank” or the “Company”), today announced its financial results for the three and nine months ended September 30, 2011.
Beneficial recorded net income of $4.1 million, or $0.05 per share, for the quarter ended September 30, 2011, compared to a net loss of $21.7 million, or $0.28 per share, for the quarter ended September 30, 2010. Net income for the nine months ended September 30, 2011 totaled $5.2 million or $0.07 per share, compared to a net loss of $8.6 million, or $0.11 per share, for the nine months ended September 30, 2010. Net income for the nine months ended September 30, 2011 included $5.1 million of restructuring charges related to the implementation of an expense management reduction program during the first quarter of 2011. Net loss for the quarter and nine months ended September 30, 2010 was driven by a provision for loan losses of $51.1 million and $62.2 million, respectively, due to specific reserves required for commercial real estate loans. During the quarter ended September 30, 2011, we repurchased approximately 274,000 shares of our stock and adopted a new stock repurchase program that will enable us to acquire up to 2,500,000 shares, or 7.0% of the Company’s outstanding common stock. Capital levels improved and remain strong with tangible capital to tangible assets increasing to 11.2% at September 30, 2011 compared to 10.2% at December 31, 2010.
Gerard Cuddy, Beneficial’s President and CEO, stated, “During the third quarter, we continued to see improved profitability and capital levels as a result of the initiatives we have put in place during the year. We also are encouraged by the second consecutive quarter where we saw stabilization in our non-performing assets.”
“However, we remain concerned about economic conditions and the interest rate environment and believe we are in a period of slow growth that will last well past 2012. The local and national market data for housing, unemployment, retail sales, and business confidence coupled with the international banking crisis, will continue to restrain economic growth and compress industry margins. This outlook has shaped our thinking with regard to strategic and financial planning, capital management, and talent acquisition. Despite low loan demand, we are continuing to prudently expand our lending and credit teams to reposition the balance sheet while taking market share.”
“The only sign of encouragement on the economy thus far this year is that the American consumer appears to be emerging as the only rational player, working to meet their obligations, de-lever, and return to a savings rate and discipline that has been missing for the last decade.”
Although credit costs have decreased from the prior year, credit costs continue to have a significant impact on our financial results. During the three and nine months ended September 30, 2011, the Bank recorded a provision for credit losses in the amount of $9.0 million and $29.0 million, respectively, compared to $51.1 million and $62.2 million for the three and nine months ended September 30, 2010, respectively. We have begun to see some stabilization in our credit quality as non-performing assets remained relatively constant for the quarter at $163.5 million as compared to $162.6 million at June 30, 2011 and $161.7 million at March 31, 2011. However, we remain cautious given the current economic environment and future outlook with slow GDP growth, high unemployment levels, and soft residential and commercial real estate markets. As a result, we continue to build our reserves. At September 30, 2011, the Company’s allowance for loan losses totaled $54.1 million, or 2.01% of total loans, compared to $45.4 million, or 1.62% of total loans, at December 31, 2010. Approximately one-third of our commercial real estate and commercial construction portfolios contractually matures in 2011 and we are actively managing these maturities and continuing to write off collateral deficiencies on all classified loans once they are 90 days delinquent. We expect that market conditions, coupled with the large amount of commercial maturities, will result in an elevated provision for credit losses for the rest of 2011.

 

 


 

During the quarter, the balance of deposits decreased $155.7 million primarily due to the run-off of higher cost, non-relationship-based deposits. At September 30, 2011, we had higher than usual cash balances as we were holding cash to cover additional municipal deposit run-off that is expected to occur during the remainder of 2011, as well as investments that were purchased and had not yet settled as of September 30, 2011. The balance of loans decreased by $42.2 million during the quarter as a result of continued slow loan demand. Also during the quarter, we benefited from the impact of the expense management reduction program we implemented in the first quarter of 2011, as total operating expenses decreased $5.1 million to $28.2 million for the quarter ended September 30, 2011 compared to $33.3 million for the third quarter of 2010.
Highlights for the quarter and year ended September 30, 2011:
   
Non-performing assets were relatively stable during the quarter at $163.5 million compared to $162.6 million at June 30, 2011.
   
At September 30, 2011, the Company’s allowance for loan losses totaled $54.1 million, or 2.01% of total loans, compared to $45.4 million, or 1.62% of total loans, at December 31, 2010.
   
Total deposits decreased by $340.6 million, or 8.6%, to $3.6 billion at September 30, 2011, from $3.9 billion at December 31, 2010, primarily due to the run-off of $369.9 million in municipal deposit accounts.
   
Non-interest income increased by $564 thousand, or 9.8%, to $6.3 million at September 30, 2011 compared to $5.7 million at September 30, 2010 primarily due to a $308 thousand increase in the gain on loan sales related to our SBA lending program and mortgage banking activities, and increased debit card fees.
   
Operating expenses decreased $5.1 million for the quarter ended September 30, 2011 compared to the same period in 2010 as a result of the expense management reduction program implemented during the first quarter of 2011.
   
Capital levels improved and remain strong with tangible capital to tangible assets increasing to 11.2% at September 30, 2011 compared to 10.2% at December 31, 2010.
   
During the quarter, we repurchased approximately 274,000 shares of our stock and adopted a new stock repurchase program that will enable us to acquire up to 2,500,000 shares, or 7.0% of the Company’s outstanding common stock.
Balance Sheet
Total assets decreased $297.2 million, or 6.0%, to $4.6 billion at September 30, 2011 from $4.9 billion at December 31, 2010. During the year, management took advantage of low interest rates to increase profitability, improve the Bank’s capital position and reduce the Bank’s interest rate risk profile by selling investments and reducing higher cost, non-relationship-based municipal deposits. At September 30, 2011, we had higher than usual cash balances as we were holding cash to cover additional municipal deposit run-off that is expected to occur during the remainder of 2011, as well as approximately $77.3 million of investment purchases that had not yet settled as of September 30, 2011. As a result, cash and cash equivalents increased from $90.3 million at December 31, 2010 to $398.1 million at September 30, 2011. The balance of investments at September 30, 2011 decreased $402.7 million, or 24.4%, to $1.2 billion from $1.6 billion at December 31, 2010, as we continue to sell longer term investments to shorten the duration of the investment portfolio and better position Beneficial for rising interest rates.
Total loans decreased $109.0 million, or 3.9%, to $2.7 billion at September 30, 2011 from $2.8 billion at December 31, 2010, primarily due to continued slow loan demand as consumers and businesses continue to deleverage and remain cautious about the economy. We expect loan demand to remain weak for the rest of 2011. Additionally, we continue to sell the majority of our residential mortgage loan production with approximately $12.4 million of loans sold in the third quarter of 2011.

 

2


 

At September 30, 2011, Beneficial’s stockholders’ equity increased to $628.5 million, or 13.6% of total assets, compared to $615.5 million, or 12.5% of total assets, at December 31, 2010.
Net Interest Income
For the quarter ended September 30, 2011, Beneficial reported net interest income of $34.8 million, a decrease of $259 thousand, or 0.7%, from the quarter ended September 30, 2010. Net interest income for the third quarter of 2010 included interest reversals of $2.6 million related to loans that were put on non-accrual status which resulted in a 24 basis point reduction to net interest margin for the quarter. Net interest income for the three months ended September 30, 2011 has been impacted by high levels of cash as we have actively run-off higher cost, non-relationship-based municipal deposits to improve our interest rate risk position and capital levels. The net interest margin was 3.21% for the quarter ended September 30, 2011, compared to 3.14% for the quarter ended September 30, 2010. We have been able to lower the cost of our liabilities to 0.98% for the quarter ended September 30, 2011 compared to 1.27% for the quarter ended September 30, 2010, by reducing borrowings and repricing higher cost deposits. The reduction in deposit costs has been primarily due to decreasing rates on our municipal deposit portfolio as we run-off of higher cost, non-relationship-based municipal deposits. In addition, rates have dropped in all other deposit categories consistent with the interest rate environment.
For the nine months ended September 30, 2011, net interest income decreased $3.2 million, or 2.9%, to $107.3 million from $110.5 million for the nine months ended September 30, 2010. The net interest margin decreased 13 basis points to 3.22% for the nine months ended September 30, 2011, from 3.35% for the nine months ended September 30, 2010. The decrease in net interest income was driven by excess levels of cash and by low interest rates which have reduced the yields on our investment portfolio as excess liquidity is invested at lower yields. Mortgage re-financings have also resulted in lower yields on our mortgage portfolio. We have been able to reduce the cost of our interest bearing liabilities over this time period with average rates decreasing to 1.02% for the nine months ended September 30, 2011, from 1.37% for the nine months ended September 30, 2010.
Non-interest Income
For the quarter ended September 30, 2011, non-interest income totaled $6.3 million, an increase of $564 thousand, or 9.8%, from the quarter ended September 30, 2010. The increase was primarily due to a $308 thousand gain on loan sales related to our SBA lending and mortgage banking programs and a $125 thousand increase in debit card fees.
Non-interest income decreased $2.1 million to $18.2 million for the nine months ended September 30, 2011 compared to the same period in 2010. The decrease in non-interest income was primarily due to a $1.8 million decrease in gain on the sale of securities.
Non-interest Expense
For the quarter ended September 30, 2011, non-interest expense totaled $28.2 million, a decrease of $5.1 million, or 15.4%, from the quarter ended September 30, 2010. The decrease in non-interest expense during the third quarter was primarily due to decreases in salaries and benefits, marketing, and loan expenses as a result of the expense reduction initiatives implemented during the first quarter of 2011.
Non-interest expense decreased $3.8 million to $91.5 million for the nine months ended September 30, 2011 compared to the same period in 2010, primarily due to a $3.9 million decrease in salaries and benefits, a $2.3 million decrease in marketing expense, a $628 thousand decrease in occupancy expense and a $600 thousand decrease in correspondent bank charges as a result of the expense reduction initiatives implemented during the first quarter of 2011. These decreases were partially offset by a $5.1 million restructuring charge related to the previously described expense reduction initiatives implemented in the first quarter of 2011.

 

3


 

Asset Quality
Non-performing loans, including loans 90 days past due and still accruing, remained relatively constant at $144.4 million at September 30, 2011, compared to $143.9 million at June 30, 2011. Non-performing loans at September 30, 2011 included $25.5 million of government guaranteed student loans, which represented 17.7% of total non-performing loans. Net charge offs during the quarter ended September 30, 2011 were $6.2 million, compared to $6.1 million for the quarter ended June 30, 2011, $8.0 million for the quarter ended March 31, 2011 and $7.6 million for the quarter ended December 31, 2010. At September 30, 2011, the Company’s allowance for loan losses totaled $54.1 million, or 2.01% of total loans, compared to $51.3 million, or 1.88% of total loans, at June 30, 2011 and $45.4 million, or 1.62% of total loans, at December 31, 2010.
Capital
Our capital ratios improved compared to the prior quarter as a result of our continued efforts to shrink the Company’s balance sheet. The Company’s capital position remains strong relative to current regulatory requirements. The Company continues to have substantial liquidity as the inflows of deposits have largely been retained in cash or invested in high quality government-backed securities. In addition, the Company continues to have significant available borrowing capacity from its contingent funding sources with over $1.0 billion in available liquidity. Our capital ratios as of September 30, 2011 compared to June 30, 2011 and December 31, 2010, as well as our excess capital over regulatory minimums as of September 30, 2011 to be considered well capitalized are as follows:
                                         
                            Minimum Well     Excess Capital  
    9/30/2011     6/30/2011     12/31/2010     Capitalized Ratio     9/30/2011  
 
                                       
Tangible Capital
    11.18 %     10.87 %     10.16 %                
Tier 1 Capital (to average assets)
    9.70 %     9.28 %     8.89 %     5 %   $ 215,808  
Tier 1 Capital (to risk weighted assets)
    17.67 %     17.13 %     15.69 %     6 %   $ 294,285  
Total Capital (to risk weighted assets)
    18.93 %     18.39 %     16.95 %     10 %   $ 225,217  
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 60 offices in the greater Philadelphia and South New 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.

 

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BENEFICIAL MUTUAL BANCORP, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Financial Condition
(Dollars in thousands)
                                 
    September 30,     June 30,     December 31,     September 30,  
    2011     2011     2010     2010  
ASSETS:
                               
Cash and Cash Equivalents:
                               
Cash and due from banks
  $ 38,029     $ 36,458     $ 33,778     $ 38,223  
Interest-bearing deposits
    360,051       310,704       56,521       177,887  
 
                       
Total cash and cash equivalents
    398,080       347,162       90,299       216,110  
 
                               
Trading Securities
                6,316        
 
                               
Investment Securities:
                               
Available-for-sale
    814,857       901,563       1,541,991       1,419,095  
Held-to-maturity
    414,319       406,914       86,609       88,782  
Federal Home Loan Bank stock, at cost
    19,929       20,978       23,244       27,168  
 
                       
Total investment securities
    1,249,105       1,329,455       1,651,844       1,535,045  
 
                       
 
                               
Loans:
    2,687,415       2,729,592       2,796,402       2,768,753  
Allowance for loan losses
    (54,120 )     (51,298 )     (45,366 )     (44,959 )
 
                       
Net loans
    2,633,295       2,678,294       2,751,036       2,723,794  
 
                               
Accrued Interest Receivable
    16,685       17,496       19,566       18,483  
 
                               
Bank Premises and Equipment, net
    60,199       61,302       64,339       69,466  
 
                               
Other Assets:
                               
Goodwill
    110,486       110,486       110,486       110,486  
Bank owned life insurance
    34,901       34,529       33,818       33,464  
Other intangibles
    14,244       15,153       16,919       17,777  
Other assets
    115,613       118,604       185,162       174,561  
 
                       
Total other assets
    275,244       278,772       346,385       336,288  
 
                       
Total Assets
  $ 4,632,608     $ 4,712,481     $ 4,929,785     $ 4,899,186  
 
                       
 
                               
LIABILITIES AND STOCKHOLDERS’ EQUITY:
                               
Liabilities:
                               
Deposits:
                               
Non-interest bearing deposits
  $ 276,035     $ 288,799     $ 282,050     $ 292,159  
Interest bearing deposits
    3,325,662       3,468,642       3,660,254       3,566,144  
 
                       
Total deposits
    3,601,697       3,757,441       3,942,304       3,858,303  
Borrowed funds
    250,330       250,326       273,317       343,313  
Other liabilities
    152,088       80,700       98,617       63,481  
 
                       
Total liabilities
    4,004,115       4,088,467       4,314,238       4,265,097  
 
                       
Commitments and Contingencies
                               
Stockholders’ Equity:
                               
Preferred Stock — $.01 par value
                       
Common Stock — $.01 par value
    823       823       823       823  
Additional paid-in capital
    349,994       349,221       348,415       347,581  
Unearned common stock held by employee stock ownership plan
    (20,306 )     (21,066 )     (22,587 )     (23,073 )
Retained earnings (partially restricted)
    309,391       305,313       304,232       304,589  
Accumulated other comprehensive income (loss), net
    4,516       3,177       (1,882 )     12,752  
Treasury stock, at cost
    (15,925 )     (13,454 )     (13,454 )     (8,583 )
 
                       
Total stockholders’ equity
    628,493       624,014       615,547       634,089  
 
                       
Total Liabilities and Stockholders’ Equity
  $ 4,632,608     $ 4,712,481     $ 4,929,785     $ 4,899,186  
 
                       

 

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BENEFICIAL MUTUAL BANCORP, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
                                         
    For the Three Months Ended     For the Nine Months Ended  
    September 30,     June 30,     September 30,     September 30,     September 30,  
    2011     2011     2010     2011     2010  
INTEREST INCOME:
                                       
Interest and fees on loans
  $ 34,577     $ 35,610     $ 35,480     $ 106,013     $ 109,940  
Interest on overnight investments
    254       247       151       603       321  
Interest on trading securities
                14       26       70  
Interest and dividends on investment securities:
                                       
Taxable
    8,286       8,952       10,497       27,210       35,146  
Tax-exempt
    849       923       1,150       2,764       3,552  
 
                             
Total interest income
    43,966       45,732       47,292       136,616       149,029  
 
                                       
INTEREST EXPENSE:
                                       
Interest on deposits:
                                       
Interest bearing checking accounts
    1,562       2,195       2,556       6,187       7,616  
Money market and savings deposits
    2,300       2,293       2,441       6,998       7,045  
Time deposits
    3,173       3,354       3,395       9,646       11,621  
 
                             
Total
    7,035       7,842       8,392       22,831       26,282  
Interest on borrowed funds
    2,100       2,137       3,810       6,506       12,208  
 
                             
Total interest expense
    9,135       9,979       12,202       29,337       38,490  
 
                             
Net interest income
    34,831       35,753       35,090       107,279       110,539  
Provision for loan losses
    9,000       10,000       51,050       29,000       62,200  
 
                             
Net interest income after provision for loan losses
    25,831       25,753       (15,960 )     78,279       48,339  
 
                             
 
                                       
NON-INTEREST INCOME:
                                       
Insurance and advisory commission and fee income
    1,898       1,667       1,944       6,102       6,716  
Service charges and other income
    4,205       3,470       3,387       11,368       11,076  
Net gain on sale of investment securities
    197       233       370       616       2,374  
Impairment charge on AFS securities
                (88 )           (88 )
Trading securities profits
                123       81       235  
 
                             
Total non-interest income
    6,300       5,370       5,736       18,167       20,313  
 
                             
 
                                       
NON-INTEREST EXPENSE:
                                       
Salaries and employee benefits
    13,960       13,482       15,580       42,452       46,316  
Occupancy expense
    2,610       2,635       2,906       8,338       8,966  
Depreciation, amortization and maintenance
    2,165       2,143       2,443       6,556       6,859  
Marketing expense
    951       872       2,392       2,720       5,041  
Intangible amortization expense
    908       906       886       2,674       2,653  
FDIC Insurance
    1,055       1,621       1,361       4,314       4,065  
Restructuring charge
          963             5,058        
Other
    6,575       6,475       7,783       19,411       21,415  
 
                             
Total non-interest expense
    28,224       29,097       33,351       91,523       95,315  
 
                             
 
                                       
Income (Loss) before income taxes
    3,907       2,026       (43,575 )     4,923       (26,663 )
 
                             
Income tax (benefit) expense
    (172 )     47       (21,845 )     (236 )     (18,057 )
 
                             
 
                                       
NET INCOME (LOSS)
  $ 4,079     $ 1,979     $ (21,730 )   $ 5,159     $ (8,606 )
 
                             
 
                                       
EARNINGS (LOSS) PER SHARE — Basic
  $ 0.05     $ 0.03     $ (0.28 )   $ 0.07     $ (0.11 )
EARNINGS (LOSS) PER SHARE — Diluted
  $ 0.05     $ 0.03     $ (0.28 )   $ 0.07     $ (0.11 )
 
                                       
Average common shares outstanding — Basic
    77,132,264       77,092,682       77,541,313       77,077,506       77,721,359  
Average common shares outstanding — Diluted
    77,244,916       77,301,043       77,541,313       77,250,785       77,721,359  

 

6


 

BENEFICIAL MUTUAL BANCORP, INC. AND SUBSIDIARIES
Selected Consolidated Financial and Other Data of the Company (Unaudited)
(Dollars in thousands)
                                                                 
    Three Months Ended     Nine Months Ended  
    September 30, 2011     September 30, 2010     September 30, 2011     September 30, 2010  
    Average     Yield /     Average     Yield /     Average     Yield /     Average     Yield /  
    Balance     Rate     Balance     Rate     Balance     Rate     Balance     Rate  
 
                                                               
Investment Securities:
  $ 1,627,254       2.31 %   $ 1,648,672       2.87 %   $ 1,700,471       2.40 %   $ 1,606,970       3.24 %
Trading Securities
          0.00 %     4,350       1.25 %     2,976       1.19 %     7,965       1.17 %
Overnight investments
    397,463       0.25 %     237,271       0.25 %     318,099       0.25 %     169,462       0.25 %
Stock
    20,248       0.00 %     27,764       0.60 %     21,435       0.03 %     27,965       0.56 %
Other Investment securities
    1,209,543       3.02 %     1,379,287       3.37 %     1,357,961       2.94 %     1,401,578       3.67 %
 
                                                               
Loans:
    2,708,194       5.09 %     2,812,250       5.03 %     2,749,367       5.15 %     2,797,521       5.25 %
Residential
    678,447       4.92 %     673,600       5.00 %     691,976       4.93 %     666,153       5.27 %
Commercial Real Estate
    765,834       4.97 %     797,965       4.55 %     774,691       5.09 %     788,323       4.87 %
Business and Small Business
    505,706       5.65 %     549,331       5.16 %     514,807       5.66 %     538,109       5.52 %
Personal Loans
    758,207       4.98 %     791,354       5.44 %     767,893       5.06 %     804,936       5.41 %
 
                                                               
Total Interest Earning Assets
  $ 4,335,448       4.05 %   $ 4,460,922       4.23 %   $ 4,449,838       4.10 %   $ 4,404,491       4.52 %
 
                                                               
Deposits:
  $ 3,438,916       0.81 %   $ 3,426,923       0.97 %   $ 3,570,013       0.86 %   $ 3,362,313       1.05 %
Savings
    764,729       0.65 %     651,867       0.75 %     733,744       0.67 %     605,770       0.72 %
Money Market
    594,802       0.69 %     605,550       0.79 %     610,703       0.72 %     623,467       0.81 %
Demand
    440,133       0.21 %     382,554       0.28 %     422,689       0.23 %     369,063       0.30 %
Demand — Municipals
    764,812       0.69 %     901,353       1.01 %     912,305       0.80 %     872,710       1.04 %
Total Core Deposits
    2,564,476       0.60 %     2,541,324       0.78 %     2,679,441       0.66 %     2,471,010       0.79 %
 
                                                               
Time Deposits
    874,440       1.44 %     885,599       1.53 %     890,572       1.46 %     891,303       1.75 %
 
                                                               
Borrowings
    250,328       3.33 %     376,571       4.01 %     257,368       3.38 %     401,337       4.07 %
 
                                                               
Total Interest Bearing Liabilities
  $ 3,689,244       0.98 %   $ 3,803,494       1.27 %   $ 3,827,381       1.02 %   $ 3,763,650       1.37 %
 
                                                               
Non-interest bearing deposits
    275,650               274,642               280,332               263,930          
 
                                                               
Net interest margin
            3.21 %             3.14 %             3.22 %             3.35 %
 
                                                       

 

7


 

BENEFICIAL MUTUAL BANCORP, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Operations
(Dollars in thousands)
                                 
    September 30,     June 30,     December 31,     September 30,  
    2011     2011     2010     2010  
ASSET QUALITY INDICATORS :
                               
Non-performing assets:
                               
Non-accruing loans
  $ 118,901     $ 118,697     $ 95,803     $ 89,205  
Accruing loans past due 90 days or more*
    25,515       25,173       27,932       27,106  
 
                       
Total non-performing loans**
  $ 144,416     $ 143,870     $ 123,735     $ 116,311  
 
                               
Real estate owned
    19,058       18,740       16,694       17,438  
 
                       
 
                               
Total non-performing assets
  $ 163,474     $ 162,610     $ 140,429     $ 133,749  
 
                       
 
                               
Non-performing loans to total loans
    5.37 %     5.27 %     4.42 %     4.20 %
Non-performing loans to total assets
    3.12 %     3.05 %     2.51 %     2.37 %
Non-performing assets to total assets
    3.53 %     3.45 %     2.85 %     2.73 %
Non-performing assets less accruing loans past due 90 days or more to total assets
    2.98 %     2.92 %     2.28 %     2.18 %
*  
Includes $25.5 million, $25.2 million, $27.9 million and $26.6 million in government guaranteed student loans as of September 30, 2011, June 30, 2011, December 31, 2010 and September 30, 2010, respectively.
 
**  
Includes $26.5 million, $27.0 million, $26.7 million and $26.5 million of troubled debt restructured loans (TDRs) as of September 30, 2011, June 30, 2011, December 31, 2010 and September 30, 2010 respectively.
Impaired loan charge offs as a percentage of the unpaid principal balances at September 30, 2011 are as follows:
                                 
At September 30, 2011   Recorded     Unpaid Principal             % of Unpaid  
(Dollars in thousands)   Investment     Balance     Charge offs     Principal Balance  
Impaired Loans by Category:
                               
Commercial Real Estate
  $ 33,373     $ 46,337     $ (12,964 )     27.98 %
Commercial Business
    25,303       32,004       (6,701 )     20.94 %
Commercial Construction
    42,332       69,031       (26,699 )     38.68 %
Residential Real Estate
    14,442       14,991       (549 )     3.66 %
Residential Construction
    1,967       2,066       (99 )     4.79 %
Consumer Personal
    1,484       1,621       (137 )     8.45 %
 
                       
Total Impaired Loans
  $ 118,901     $ 166,050     $ (47,149 )     28.39 %
 
                       
 
                               
Key Performance ratios (annualized) are as follows for the three month and nine month periods indicated:
                                         
    For the Three Months Ended     For the Nine Months Ended  
    September 30,     June 30,     December 31,     September 30,  
    2011     2011     2010     2011     2010  
PERFORMANCE RATIOS:(annualized)
                                       
Return on average assets
    0.34 %     0.16 %     -0.04 %     0.14 %     -0.24 %
Return on average equity
    2.54 %     1.30 %     -0.28 %     1.13 %     -1.74 %
Net interest margin
    3.21 %     3.16 %     3.24 %     3.22 %     3.35 %
Efficiency ratio
    68.79 %     70.71 %     75.35 %     72.91 %     72.80 %
Tangible Common Equity
    11.18 %     10.87 %     10.16 %     11.18 %     10.60 %

 

8