PHILADELPHIA, July 26, 2012 (GLOBE NEWSWIRE) -- Beneficial Mutual Bancorp, Inc. ("Beneficial") (Nasdaq:BNCL), the parent company of Beneficial Bank (the "Bank" or the "Company"), today announced its financial results for the three and six months ended June 30, 2012.
Beneficial recorded net income of $2.3 million and $6.3 million, or $0.03 and $0.08 per share, for the three and six months ended June 30, 2012, compared to $2.0 million and $1.1 million, or $0.03 and $0.01 per share, for the three months and six months ended June 30, 2011. Net income for the three months ended June 30, 2012 included merger and restructuring charges of $2.7 million related the acquisition of SE Financial Corp., the parent holding company of St. Edmond's Federal Savings Bank. Net income for the three and six months ended June 30, 2011 included $1.0 million and $5.1 million, respectively, of restructuring charges related to the implementation of our previously announced expense management reduction program.
On April 3, 2012, the Company completed the acquisition of SE Financial Corp. As of the acquisition date, SE Financial Corp's assets totaled approximately $301.0 million. St. Edmond's operated five banking offices in the greater Philadelphia area. The results of SE Financial Corp's operations have been included in the Company's financial statements beginning on April 3, 2012, the date of the consummation of the acquisition.
Credit costs have decreased during the three and six months ended June 30, 2012 from the same periods in 2011 but continue to have a significant impact on our financial results. During the three and six months ended June 30, 2012, the Bank recorded a provision for credit losses in the amount of $7.5 million and $15.0 million, respectively, compared to a provision of $10.0 million and $20.0 million for the three and six months ended June 30, 2011, respectively. We have been focused on reducing our non-performing asset levels and have made progress over the past year. At June 30, 2012 our nonperforming assets were $133.5 million, representing a decrease of $20.6 million and $29.1 million from $154.1 million and $162.6 million at December 31, 2011 and June 30, 2011, respectively. We continue to charge-off any loans that show signs of credit weakness and are focused on maintaining strong reserve levels. At June 30, 2012, the Company's allowance for loan losses totaled $55.6 million, or 2.14% of total loans, compared to $54.2 million, or 2.10% of total loans, at December 31, 2011. We expect that the provision for credit losses will remain elevated in 2012 as we continue to focus on reducing our non-performing loan levels.
Our mortgage banking team that was established in 2011 positively impacted our non-interest income during the quarter. Mortgage banking income totaled $590 thousand and $1.5 million for the three and six month ended June 30, 2012 compared to $28 thousand and $96 thousand for the comparable periods in 2011.
Gerard Cuddy, Beneficial's President and CEO, stated, "We are pleased to have successfully completed our acquisition of SE Financial Corp. during the quarter. This acquisition increased our market share in a number of our key markets and we believe that the transaction will be accretive to our earnings for the rest of 2012. Despite a difficult economic environment, we continue to work towards our goal of increasing profitability. However, we remain concerned about the duration of the downturn, the persistently low interest rate environment, the continued lack of loan demand in our markets and our significant excess liquidity position. We are encouraged by the improvement in our asset quality metrics as we experienced the fifth straight quarter of decreases in non-performing assets. We remain focused on reducing our non-performing asset levels throughout the remainder of 2012."
Highlights for the three months and six months ended June 30, 2012:
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The Company completed the acquisition of SE Financial Corp. during the quarter which increased total assets by approximately $301.0 million.
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Asset quality metrics continued to improve during the quarter with non-performing loans, excluding student loans, decreasing $18.9 million, or 17.5%, to $89.0 million from $107.9 million at December 31, 2011 and $29.7 million, or 25.0%, from $118.7 million at June 30, 2011. Our non-performing assets ratio, excluding student loans, improved to 2.29% at June 30, 2012 compared to 2.73% at December 31, 2011 and 2.92% at June 30, 2011.
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Our mortgage banking team that was established in 2011 continued to positively impact our non-interest income as we recorded mortgage banking income of $590 thousand and $1.5 million, respectively, for the three and six months ended June 30, 2012.
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We continue to strengthen our balance sheet and at June 30, 2012, our allowance for loan losses totaled $55.6 million, or 2.14% of total loans, compared to $55.1 million, or 2.16% of total loans, at March 31, 2012, and $54.2 million, or 2.10% of total loans, at December 31, 2011. Excluding the acquired SE Financial Corp. loans that were recorded at fair value of $174.8 million as of the acquisition date, our loan loss reserves coverage ratio would have totaled 2.29% at June 30, 2012.
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Total deposits, which includes the deposits acquired from the SE Financial Corp. acquisition, increased $250.9 million, or 7.0%, to $3.8 billion during the six months ended June 30, 2012.
- The Company repurchased 592,500 shares during the quarter which increased total treasury shares to 2,641,815 at June 30, 2012.
Balance Sheet
Total assets increased $255.1 million, or 5.5%, to $4.9 billion at June 30, 2012 from $4.6 billion at December 31, 2011. The increase in total assets was primarily driven by the $301.0 million in assets acquired as part of the acquisition of SE Financial Corp., which closed on April 3, 2012. Cash and cash equivalents increased approximately $86.0 million to $434.0 million at June 30, 2012 from $348.0 million at December 31, 2011. The increase in cash and cash equivalents was primarily driven by higher than normal commercial loan prepayments, weak overall loan demand and our selling of all agency eligible mortgage loans, which approximated $28.8 million for the three months ended June 30, 2012.
Investments increased $115.8 million, or 8.4%, to $1.5 billion at June 30, 2012 from $1.4 billion at December 31, 2011. We continue to focus on purchasing high quality investments that will provide a steady stream of cash flow in both current and rising interest rate environments.
Loans increased $23.4 million, or 0.9%, to $2.6 billion at June 30, 2012. The increase in loans was primarily driven by the addition of $174.8 million of loans acquired from SE Financial Corp., partially offset by a $162.1 million decrease in our existing loan portfolio caused by a number of large commercial loan repayments and continued weak loan demand. We also have been selling agency eligible mortgage loans originated by our mortgage banking team into the secondary market to better position the Company's balance sheet for interest rate risk. During the six months ended June 30, 2012, we sold approximately $60.5 million of residential mortgage loans originated during 2012 and recorded mortgage banking income of $1.5 million related to these loan sales.
Deposits increased $250.9 million, or 7.0%, to $3.8 billion at June 30, 2012 from $3.6 billion at December 31, 2011. The increase was primarily driven by the addition of $274.1 million of deposits acquired from SE Financial Corp. During the six months ended June 30, 2012, municipal deposits decreased $118.4 million which was consistent with the planned run-off associated with our re-pricing of higher-cost, non-relationship-based municipal accounts. Excluding municipal deposits and the impact of the SE Financial Corp. acquisition, we experienced increases in all of our core deposit categories, particularly savings products and business checking which increased $117.0 million and $57.0 million, respectively.
At June 30, 2012, stockholders' equity increased to $631.5 million, or 13.0% of total assets, compared to $629.4 million, or 13.7% of total assets, at December 31, 2011.
Net Interest Income
For the three months ended June 30, 2012, Beneficial reported net interest income of $36.2 million, an increase of $413 thousand, or 1.2%, from the three months ended June 30, 2011. The increase in net interest income during the three months ended June 30, 2012 compared to the same period last year was primarily the result of a reduction in the cost of interest bearing liabilities exceeding the decrease in the yield on interest earning assets. Despite the low interest rate environment, our net interest margin increased, totaling 3.21% for the three months ended June 30, 2012 as compared to 3.16% for the three months ended June 30, 2011, largely due to our efforts to re-price deposits.
For the six months ended June 30, 2012, Beneficial reported net interest income of $70.6 million, a decrease of $1.8 million, or 2.5%, from the six months ended June 30, 2011. The decrease in net interest income during the six months ended June 30, 2012 compared to the same period last year was primarily the result of a decline in interest earning assets due to a decision made in 2011 to shrink the balance sheet and run-off higher cost municipal deposits to strengthen capital, improve our net interest margin and lower loan balances. Despite the low interest rate environment, our net interest margin remained relatively stable, totaling 3.23% for the six months ended June 30, 2012 as compared to 3.22% for the six months ended June 30, 2011, largely due to our efforts to re-price deposits.
We have been able to lower the cost of our liabilities to 0.87% and 0.88% for the three and six months ended June 30, 2012, respectively, compared to 1.03% and 1.05% for the three and six months ended June 30, 2011, respectively, by re-pricing higher cost deposits. The reduction in deposit costs has been primarily due to decreasing rates on our municipal deposit portfolio as we have run-off higher cost, non-relationship-based municipal deposits.
Non-interest Income
For the three months ended June 30, 2012, non-interest income totaled $6.9 million, an increase of $1.5 million, or 28.0%, from the three months ended June 30, 2011. The increase was primarily due to a $562 thousand increase in mortgage banking income recognized during the second quarter of 2012 in connection with the sale of mortgages, a $591 thousand increase in income from other life insurance and a $442 thousand increase in the gain on the sale of investment securities.
For the six months ended June 30, 2012, non-interest income totaled $13.9 million, an increase of $2.1 million, or 17.3%, from the six months ended June 30, 2011. The increase was primarily due to a $1.4 million increase in mortgage banking income recognized during 2012 in connection with the sale of mortgages and a $697 thousand increase in the gain on the sale of investment securities.
Non-interest Expense
For the three months ended June 30, 2012, non-interest expense totaled $32.9 million, an increase of $3.8 million, or 12.9%, from the three months ended June 30, 2011. The increase in non-interest expense was driven by a $1.8 million increase in merger and restructuring charges, a $1.2 million increase in salaries and benefits as a result of the SE Financial Corp. acquisition and the expansion of our credit function, a $503 thousand increase in loan expense and a $486 thousand increase in other real estate losses.
For the six months ended June 30, 2012, non-interest expense totaled $62.5 million, a decrease of $833 thousand, or 1.3%, from the six months ended June 30, 2011. The decrease in non-interest expense was primarily driven by a $2.2 million decrease in merger and restructuring charges and a $1.2 million decrease in FDIC insurance as a result of the assessment base change, partially offset by a $1.1 million increase in other real estate losses and a $295 thousand increase in loan expense.
Asset Quality
Asset quality metrics showed continued signs of improvement during the six months ended June 30, 2012. Non-performing loans, including loans 90 days past due and still accruing, decreased to $110.7 million at June 30, 2012, compared to $136.3 million at December 31, 2011 and $143.9 million at June 30, 2011. Non-performing loans at June 30, 2012 included $21.6 million of government guaranteed student loans, which represented 19.6% of total non-performing loans. Net charge-offs during the three months ended June 30, 2012 were $7.0 million, compared to $6.6 million for the three months ended March 31, 2012 and $8.4 million for the three months ended December 31, 2011. At June 30, 2012, the Company's allowance for loan losses totaled $55.6 million, or 2.14% of total loans, compared to $54.2 million, or 2.10% of total loans, at December 31, 2011.
Capital
The Bank's capital position remains strong relative to current regulatory requirements. The Bank continues to have substantial liquidity as the inflows of deposits and prepayments have largely been retained in cash or invested in high quality government-backed securities. In addition, at June 30, 2012, we had the ability to borrow up to $1.3 billion from the FHLB of Pittsburgh and the Federal Reserve Bank of Philadelphia. Our capital ratios as of June 30, 2012 compared to March 31, 2012 and December 31, 2011 as well as our excess capital over regulatory minimums as of June 30, 2012 to be considered well capitalized, are as follows:
| Minimum Well | Excess Capital | ||||
| 6/30/2012 | 3/31/2012 | 12/31/2011 | Capitalized Ratio | 6/30/2012 | |
| Tangible Capital | 10.53% | 11.40% | 11.30% | ||
| Tier 1 Capital (to average assets) | 9.67% | 10.02% | 9.67% | 5% | $218,371 |
| Tier 1 Capital (to risk weighted assets) | 18.36% | 18.04% | 18.09% | 6% | $304,300 |
| Total Capital (to risk weighted assets) | 19.62% | 19.30% | 19.35% | 10% | $236,935 |
Maintaining strong capital levels remains one of our top priorities. Our capital levels are well in excess of well capitalized levels under the current regulatory requirements as well as the proposed capital rules under Basel III.
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 62 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.
| BENEFICIAL MUTUAL BANCORP, INC. AND SUBSIDIARIES | ||||
| Unaudited Consolidated Statements of Financial Condition | ||||
| (Dollars in thousands, except share amounts) | ||||
| June 30, | March 31, | December 31, | June 30, | |
| 2012 | 2012 | 2011 | 2011 | |
| ASSETS: | ||||
| Cash and Cash Equivalents: | ||||
| Cash and due from banks | $51,773 | $42,391 | $41,130 | $36,458 |
| Interest-bearing deposits | 382,240 | 141,929 | 306,826 | 310,704 |
| Total cash and cash equivalents | 434,013 | 184,320 | 347,956 | 347,162 |
| Investment Securities: | ||||
| Available-for-sale | 1,053,597 | 1,091,268 | 875,011 | 901,563 |
| Held-to-maturity | 419,454 | 454,659 | 482,695 | 406,914 |
| Federal Home Loan Bank stock, at cost | 19,433 | 17,986 | 18,932 | 20,978 |
| Total investment securities | 1,492,484 | 1,563,913 | 1,376,638 | 1,329,455 |
| Loans: | 2,599,535 | 2,551,660 | 2,576,129 | 2,729,592 |
| Allowance for loan losses | (55,621) | (55,120) | (54,213) | (51,298) |
| Net loans | 2,543,914 | 2,496,540 | 2,521,916 | 2,678,294 |
| Accrued Interest Receivable | 16,267 | 16,917 | 16,401 | 17,496 |
| Bank Premises and Equipment, net | 62,446 | 59,623 | 59,913 | 61,302 |
| Other Assets: | ||||
| Goodwill | 122,646 | 110,486 | 110,486 | 110,486 |
| Bank owned life insurance | 39,850 | 35,648 | 35,277 | 34,529 |
| Other intangibles | 12,085 | 12,423 | 13,334 | 15,153 |
| Other assets | 127,532 | 117,018 | 114,183 | 118,604 |
| Total other assets | 302,113 | 275,575 | 273,280 | 278,772 |
| Total Assets | $4,851,237 | $4,596,888 | $4,596,104 | $4,712,481 |
| LIABILITIES AND STOCKHOLDERS' EQUITY: | ||||
| Liabilities: | ||||
| Deposits: | ||||
| Non-interest bearing deposits | $322,411 | $292,241 | $278,968 | $288,799 |
| Interest bearing deposits | 3,523,320 | 3,295,538 | 3,315,834 | 3,468,642 |
| Total deposits | 3,845,731 | 3,587,779 | 3,594,802 | 3,757,441 |
| Borrowed funds | 285,344 | 235,339 | 250,335 | 250,326 |
| Other liabilities | 88,710 | 140,928 | 121,587 | 80,700 |
| Total liabilities | 4,219,785 | 3,964,046 | 3,966,724 | 4,088,467 |
| Commitments and Contingencies | ||||
| Stockholders' Equity: | ||||
| Preferred Stock -- $.01 par value | -- | -- | -- | -- |
| Common Stock – $.01 par value | 823 | 823 | 823 | 823 |
| Additional paid-in capital | 352,112 | 351,638 | 351,107 | 349,221 |
| Unearned common stock held by employee stock ownership plan | (18,534) | (19,195) | (19,856) | (21,066) |
| Retained earnings (partially restricted) | 321,537 | 319,213 | 315,268 | 305,313 |
| Accumulated other comprehensive (loss) income, net | (1,892) | (2,186) | (1,162) | 3,177 |
| Treasury stock, at cost | (22,594) | (17,451) | (16,800) | (13,454) |
| Total stockholders' equity | 631,452 | 632,842 | 629,380 | 624,014 |
| Total Liabilities and Stockholders' Equity | $4,851,237 | $4,596,888 | $4,596,104 | $4,712,481 |
| 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 Six Months Ended | ||||
| June 30, | March 31, | June 30, | June 30, | June 30, | |
| 2012 | 2012 | 2011 | 2012 | 2011 | |
| INTEREST INCOME: | |||||
| Interest and fees on loans | $34,304 | $32,309 | $35,610 | $66,613 | $71,436 |
| Interest on overnight investments | 180 | 161 | 247 | 341 | 349 |
| Interest on trading securities | -- | -- | -- | -- | 26 |
| Interest and dividends on investment securities: | |||||
| Taxable | 9,239 | 9,163 | 8,952 | 18,401 | 18,924 |
| Tax-exempt | 740 | 792 | 923 | 1,532 | 1,915 |
| Total interest income | 44,463 | 42,425 | 45,732 | 86,887 | 92,650 |
| INTEREST EXPENSE: | |||||
| Interest on deposits: | |||||
| Interest bearing checking accounts | 1,344 | 1,205 | 2,195 | 2,548 | 4,625 |
| Money market and savings deposits | 2,279 | 2,121 | 2,293 | 4,400 | 4,698 |
| Time deposits | 2,542 | 2,591 | 3,354 | 5,133 | 6,473 |
| Total | 6,165 | 5,917 | 7,842 | 12,081 | 15,796 |
| Interest on borrowed funds | 2,132 | 2,056 | 2,137 | 4,188 | 4,405 |
| Total interest expense | 8,297 | 7,973 | 9,979 | 16,269 | 20,201 |
| Net interest income | 36,166 | 34,452 | 35,753 | 70,618 | 72,449 |
| Provision for loan losses | 7,500 | 7,500 | 10,000 | 15,000 | 20,000 |
| Net interest income after provision for loan losses | 28,666 | 26,952 | 25,753 | 55,618 | 52,449 |
| NON-INTEREST INCOME: | |||||
| Insurance and advisory commission and fee income | 1,489 | 2,161 | 1,667 | 3,650 | 4,204 |
| Service charges and other income | 4,119 | 3,572 | 3,442 | 7,691 | 7,067 |
| Mortgage banking income | 590 | 873 | 28 | 1,463 | 96 |
| Net gain on sale of investment securities | 675 | 441 | 233 | 1,116 | 419 |
| Trading securities profits | -- | -- | -- | -- | 81 |
| Total non-interest income | 6,873 | 7,047 | 5,370 | 13,920 | 11,867 |
| NON-INTEREST EXPENSE: | |||||
| Salaries and employee benefits | 14,722 | 14,324 | 13,482 | 29,046 | 28,492 |
| Occupancy expense | 2,434 | 2,463 | 2,635 | 4,897 | 5,728 |
| Depreciation, amortization and maintenance | 2,273 | 2,159 | 2,143 | 4,432 | 4,391 |
| Marketing expense | 932 | 882 | 872 | 1,815 | 1,769 |
| Intangible amortization expense | 1,046 | 912 | 906 | 1,957 | 1,766 |
| FDIC Insurance | 1,075 | 1,034 | 1,621 | 2,109 | 3,260 |
| Merger and Restructuring charges | 2,737 | -- | 963 | 2,821 | 5,058 |
| Other | 7,637 | 7,837 | 6,475 | 15,390 | 12,836 |
| Total non-interest expense | 32,856 | 29,611 | 29,097 | 62,467 | 63,300 |
| Income before income taxes | 2,683 | 4,388 | 2,026 | 7,071 | 1,016 |
| Income tax expense (benefit) | 359 | 443 | 47 | 802 | (65) |
| NET INCOME | $2,324 | $3,945 | $1,979 | $6,269 | $1,081 |
| EARNINGS PER SHARE – Basic | $0.03 | $0.05 | $0.03 | $0.08 | $0.01 |
| EARNINGS PER SHARE – Diluted | $0.03 | $0.05 | $0.03 | $0.08 | $0.01 |
| Average common shares outstanding – Basic | 76,838,141 | 77,047,170 | 77,092,682 | 76,940,992 | 77,049,673 |
| Average common shares outstanding – Diluted | 77,007,093 | 77,225,687 | 77,301,043 | 77,114,124 | 77,255,328 |
| BENEFICIAL MUTUAL BANCORP, INC. AND SUBSIDIARIES | ||||||||
| Selected Consolidated Financial and Other Data of the Company (Unaudited) | ||||||||
| (Dollars in thousands) | ||||||||
| Three Months Ended | Six Months Ended | |||||||
| June 30, 2012 | June 30, 2011 | June 30, 2012 | June 30, 2011 | |||||
| Average | Yield / | Average | Yield / | Average | Yield / | Average | Yield / | |
| Balance | Rate | Balance | Rate | Balance | Rate | Balance | Rate | |
| Investment Securities: | $ 1,829,462 | 2.22% | $ 1,773,417 | 2.28% | $ 1,748,403 | 2.32% | $1,737,686 | 2.44% |
| Trading Securities | -- | 0.00% | -- | 0.00% | -- | 0.00% | 4,489 | 1.19% |
| Overnight investments | 289,970 | 0.25% | 391,297 | 0.25% | 272,483 | 0.25% | 277,760 | 0.25% |
| Stock | 19,705 | 0.11% | 21,317 | 0.00% | 19,121 | 0.11% | 22,038 | 0.04% |
| Other Investment securities | 1,519,787 | 2.63% | 1,360,803 | 2.90% | 1,456,799 | 2.74% | 1,433,399 | 2.91% |
| Loans: | 2,678,860 | 5.13% | 2,744,539 | 5.20% | 2,621,265 | 5.09% | 2,770,294 | 5.18% |
| Residential | 698,528 | 4.85% | 693,529 | 4.93% | 656,963 | 4.85% | 698,852 | 4.93% |
| Commercial Real Estate | 741,761 | 5.43% | 772,675 | 5.22% | 726,923 | 5.19% | 779,193 | 5.15% |
| Business and Small Business | 494,538 | 5.66% | 511,386 | 5.69% | 497,000 | 5.73% | 519,432 | 5.67% |
| Personal Loans | 744,033 | 4.74% | 766,949 | 5.09% | 740,379 | 4.79% | 772,817 | 5.10% |
| Total Interest Earning Assets | $ 4,508,322 | 3.95% | $ 4,517,956 | 4.05% | $ 4,369,668 | 3.98% | $4,507,980 | 4.12% |
| Deposits: | $3,568,191 | 0.69% | $ 3,633,187 | 0.87% | $3,440,901 | 0.71% | $3,636,649 | 0.88% |
| Savings | 954,723 | 0.59% | 728,357 | 0.65% | 882,084 | 0.59% | 717,995 | 0.69% |
| Money Market | 548,896 | 0.65% | 614,771 | 0.72% | 542,154 | 0.67% | 618,786 | 0.74% |
| Demand | 600,822 | 0.31% | 418,835 | 0.23% | 545,424 | 0.27% | 413,822 | 0.24% |
| Demand - Municipals | 623,475 | 0.57% | 949,531 | 0.83% | 641,143 | 0.57% | 987,274 | 0.85% |
| Total Core Deposits | 2,727,916 | 0.53% | 2,711,494 | 0.66% | 2,610,805 | 0.54% | 2,737,877 | 0.69% |
| Time Deposits | 840,275 | 1.22% | 921,693 | 1.46% | 830,096 | 1.24% | 898,772 | 1.46% |
| Borrowings | 273,253 | 3.14% | 254,829 | 3.36% | 259,817 | 3.24% | 260,946 | 3.40% |
| Total Interest Bearing Liabilities | $3,841,444 | 0.87% | $ 3,888,016 | 1.03% | $3,700,718 | 0.88% | $3,897,595 | 1.05% |
| Non-interest bearing deposits | 308,879 | 284,018 | 292,553 | 282,712 | ||||
| Net interest margin | 3.21% | 3.16% | 3.23% | 3.22% | ||||
| ASSET QUALITY INDICATORS | June 30, | March 31, | December 31, | June 30, |
| (Dollars in thousands) | 2012 | 2012 | 2011 | 2011 |
| Non-performing assets: | ||||
| Non-accruing loans* | $88,406 | $100,713 | $107,907 | $118,697 |
| Accruing loans past due 90 days or more** | 22,269 | 26,091 | 28,423 | 25,173 |
| Total non-performing loans*** | 110,675 | 126,804 | 136,330 | 143,870 |
| Real estate owned | 22,806 | 21,905 | 17,775 | 18,740 |
| Total non-performing assets | $133,481 | $148,709 | $154,105 | $162,610 |
| Non-performing loans to total loans | 4.26% | 4.97% | 5.29% | 5.27% |
| Non-performing assets to total assets | 2.75% | 3.23% | 3.35% | 3.45% |
| Non-performing assets less accruing loans past due 90 days or more to total assets | 2.29% | 2.67% | 2.73% | 2.92% |
| ALLL to total loans | 2.14% | 2.16% | 2.10% | 1.88% |
| ALLL to non-performing loans | 50.26% | 43.47% | 39.77% | 35.66% |
| ALLL to non-performing loans (excluding student loans) | 62.48% | 54.73% | 50.24% | 43.22% |
* Non-accruing loans do not include $3.5 million of loans acquired with deteriorated credit quality, which have been recorded at their fair value at acquisition and are performing as expected.
** Includes $21.6 million, $26.1 million, $28.4 million and $25.2 million in government guaranteed student loans as of June 30, 2012, March 31, 2012, December 31, 2011 and June 30, 2011, respectively.
*** Includes $14.5 million, $14.7 million, $22.2 million and $27.0 million of troubled debt restructured loans (TDRs) as of June 30, 2012, March 31, 2012, December 31, 2011 and June 30, 2011, respectively.
Impaired loan charge offs as a percentage of the unpaid principal balances at June 30, 2012 are as follows:
| IMPAIRED LOANS: | ||||
| At June 30, 2012 (Dollars in thousands) | Recorded Investment | Unpaid Principal Balance | Life-to-Date Charge offs | % of Unpaid Principal Balance |
| Impaired Loans by Category: | ||||
| Commercial Real Estate | $29,947 | $44,642 | ($14,695) | 32.92% |
| Commercial Business | 21,429 | 27,002 | (5,573) | 20.64% |
| Commercial Construction | 21,138 | 45,275 | (24,137) | 53.31% |
| Residential Real Estate | 12,147 | 12,869 | (722) | 5.61% |
| Residential Construction | 1,855 | 2,119 | (264) | 12.46% |
| Consumer Personal | 1,890 | 2,042 | (152) | 7.44% |
| Total Impaired Loans | $88,406 | $133,949 | ($45,543) | 34.00% |
The impaired loans table above does not include $3.5 million of loans acquired with deteriorated credit quality, which have been recorded at their fair value at acquisition and are performing as expected.
Key Performance ratios (annualized) are as follows for the three and six month periods indicated:
| For the Three Months Ended | For the Six Months Ended | ||||
| June 30, | March 31, | December 31, | June 30, | ||
| 2012 | 2012 | 2011 | 2012 | 2011 | |
| PERFORMANCE RATIOS: | |||||
| (annualized) | |||||
| Return on average assets | 0.20% | 0.35% | 0.49% | 0.27% | 0.05% |
| Return on average equity | 1.51% | 2.54% | 3.68% | 2.02% | 0.41% |
| Net interest margin | 3.21% | 3.26% | 3.23% | 3.23% | 3.22% |
| Efficiency ratio | 76.34% | 71.35% | 69.80% | 73.89% | 74.92% |
| Tangible Common Equity | 10.53% | 11.40% | 11.30% | 10.53% | 10.87% |