PHILADELPHIA, July 25, 2013 (GLOBE NEWSWIRE) -- Beneficial Mutual Bancorp, Inc. ("Beneficial") (Nasdaq:BNCL), the parent company of Beneficial Bank (the "Bank"), today announced its financial results for the three and six months ended June 30, 2013. Beneficial recorded net income of $2.9 million and $6.1 million, or $0.04 and $0.08 per diluted share, for the three and six months ended June 30, 2013 compared to $2.3 million and $6.3 million, or $0.03 and $0.08 per diluted share, for the three and six months ended June 30, 2012. Net income for the three and six months ended June 30, 2012 included merger and restructuring charges of $2.7 million and $2.8 million, respectively, related to the acquisition of SE Financial Corporation.
Highlights for the quarter ended June 30, 2013:
- We were awarded the J.D. Power and Associates "Highest Customer Satisfaction with Retail Banking in the Mid-Atlantic Region."
- Asset quality metrics continued to improve during the quarter with non-performing loans, excluding government guaranteed student loans, decreasing $10.5 million, or 15.3%, to $57.9 million at June 30, 2013 from $68.4 million at December 31, 2012 and decreasing $31.1 million, or 34.9%, from $89.0 million at June 30, 2012. Our non-performing assets ratio, excluding government guaranteed student loans, improved to 1.39% at June 30, 2013, compared to 1.60% at December 31, 2012, and 2.31% at June 30, 2012.
- We reduced our cost of funds on deposits by 18 basis points to 0.51% for the quarter ended June 30, 2013, from 0.69% for the quarter ended June 30, 2012.
- Our balance sheet remained strong at June 30, 2013, with our allowance for loan losses totaling $58.7 million, or 2.46% of total loans, compared to $57.6 million, or 2.36% of total loans, at December 31, 2012, and $55.6 million, or 2.14% of total loans, at June 30, 2012. Reserves as a percentage of non-performing loans, excluding government guaranteed student loans, totaled 101.3% at June 30, 2013 compared to 84.3% at December 31, 2012 and 62.5% at June 30, 2012.
- Beneficial repurchased 355,900 shares of its outstanding common stock during the quarter which increased total treasury shares to 3,483,821 at June 30, 2013.
- Capital levels remain strong with tangible capital to tangible assets totaling 10.73% at June 30, 2013.
The low interest rate environment has continued to reduce the yields on our investment and loan portfolios resulting in net interest income decreasing $5.0 million and $7.8 million, respectively, to $31.2 million and $62.8 million, respectively, for the three and six months ended June 30, 2013 compared to $36.2 million and $70.6 million, respectively, for the three and six months ended June 30, 2012. Net interest margin decreased to 2.83% for both the three and six months ended June 30, 2013 from 3.21% and 3.23%, respectively, for the same periods in 2012 due to the low rate environment as well as continued weak loan demand. We expect that the continued low interest rate environment will put pressure on net interest margin in future periods.
The reductions in net interest income were partially offset by improvement in our asset quality which resulted in lower required provisions for credit losses. During the three and six months ended June 30, 2013, the Bank recorded a provision for credit losses in the amount of $5.0 million and $10.0 million, respectively, compared to a provision of $7.5 million and $15.0 million, respectively, for the three and six months ended June 30, 2012. Net charge-offs during the three and six months ended June 30, 2013 totaled $5.0 million and $9.0 million, or an annualized net charge-off rate of 0.84% and 0.75%, respectively, compared to $7.0 million and $13.6 million, or an annualized net charge off rate of 1.08% and 1.05%, respectively, for the same period in 2012.
Gerard Cuddy, Beneficial's President and CEO, stated, "We are pleased to announce that, during the quarter, J.D. Power and Associates awarded Beneficial Bank the rating of 'Highest Customer Satisfaction with Retail Banking in the Mid-Atlantic Region.' This is a tremendous honor, but it becomes even more special when you consider that the award was the direct result of customer feedback. We believe this award demonstrates our commitment to deliver an education-based experience to our customers through 'The Beneficial Conversation' and staying true to our mission to always help our customers to do the right thing financially."
During the quarter, we also continued to see improvement in our asset quality metrics as we experienced a 34.3% decrease in our non-performing assets at June 30, 2013 compared to a year ago. All of our asset quality metrics have improved significantly from a year ago and our balance sheet reserves remain strong.
During the second quarter of 2013, earnings remain challenged given the slow growing economy and the related lack of loan demand in our markets. The low interest rate environment also resulted in net interest margin compression for the quarter and we expect that the continued low interest rate environment will put pressure on net interest margin in future periods. We remain focused on improving profitability and are making a number of investments in people, brand and technology to drive future growth. Although these investments may result in lower profitability in the short-term, we believe that ultimately they will drive future profitability and value for our shareholders.
Balance Sheet
Total assets decreased $304.9 million, or 6.1%, to $4.7 billion at June 30, 2013 from $5.0 billion at December 31, 2012. Cash and cash equivalents decreased $216.8 million to $273.1 million at June 30, 2013 from $489.9 million at December 31, 2012. The decrease in cash and cash equivalents was primarily driven by a decline in municipal deposits as a result of our planned re-pricing and run-off strategy. Cash remains elevated due to investment and loan prepayments.
Investments decreased $21.9 million, or 1.2%, to $1.7 billion at June 30, 2013 from $1.8 billion at December 31, 2012. The decrease in investments during the six months ended June 30, 2013 was driven by investment prepayments and a decrease in the net unrealized gain due to an increase in intermediate and long-term interest rates. We continue to focus on purchasing high quality agency bonds, and maintain a portfolio that provides a steady stream of cash flow both in the current and in rising interest rate environments.
Loans decreased $62.2 million, or 2.5%, to $2.33 billion at June 30, 2013 from $2.39 billion at December 31, 2012. Despite total loan originations of $281.0 million during the six months ended June 30, 2013, our loan portfolio has decreased as a result of high commercial loan repayments and continued weak loan demand. During the quarter ended December 31, 2012, we began to hold in portfolio some of our agency eligible mortgage production as the yields on these mortgages were attractive compared to the rates available on investment securities. As a result of this decision, our mortgage banking income decreased $711 thousand to $752 thousand during the six months ended June 30, 2013 as compared to $1.5 million during the same period last year.
Deposits decreased $189.9 million, or 4.8%, to $3.7 billion at June 30, 2013 from $3.9 billion at December 31, 2012. The decrease in deposits during the quarter ended June 30, 2013 was primarily the result of a $191.8 million decrease in municipal deposits which was consistent with the planned run-off associated with our re-pricing of higher-cost, non-relationship-based municipal accounts.
At June 30, 2013, stockholders' equity decreased to $621.3 million, or 13.2% of total assets, compared to $633.9 million, or 12.7% of total assets, at December 31, 2012. The decrease in stockholders' equity is primarily the result of a $16.1 million decrease in net unrealized gains on investment securities, included in other comprehensive income, as a result of an increase in intermediate and long-term interest rates since year end.
Net Interest Income
For the three months ended June 30, 2013, Beneficial reported net interest income of $31.2 million, a decrease of $5.0 million, or 13.7%, from the three months ended June 30, 2012. The decrease in net interest income during the three months ended June 30, 2013 compared to the same period last year was primarily the result of a reduction in the average interest rate earned on investment securities and loans due to the low interest rate environment and a decline in average loan balances of $290.7 million, partially offset by a reduction in the average cost of liabilities. Our net interest margin decreased to 2.83% for the three months ended June 30, 2013 from 3.21% for the three months ended June 30, 2012. We expect that the persistently low interest rate environment will continue to lower yields on our investment and loan portfolios to a greater extent than we can reduce rates on deposits and other interest bearing liabilities, which will put pressure on net interest margin in future periods.
For the six months ended June 30, 2013, Beneficial reported net interest income of $62.8 million, a decrease of $7.8 million, or 11.1%, from the six months ended June 30, 2012. The decrease in net interest income during the six months ended June 30, 2013 compared to the same period last year was primarily the result of a 56 basis point reduction in the average interest rate earned on investment securities and loans, and a decline in average loan balances of $208.8 million, partially offset by a reduction in the average cost of liabilities. Our net interest margin decreased to 2.83% for the six months ended June 30, 2013 from 3.23% for the six months ended June 30, 2012.
We have been able to lower the cost of our liabilities to 0.69% for both the three and six months ended June 30, 2013, compared to 0.87% and 0.88%, respectively, for the three and six months ended June 30, 2012 by re-pricing higher cost deposits. The reduction in deposit costs has been primarily due to decreasing rates on our municipal deposits coupled with the planned run-off of these deposits.
Non-interest Income
For the three months ended June 30, 2013, non-interest income totaled $7.3 million, an increase of $454 thousand, or 6.6%, from the three months ended June 30, 2012. The increase was primarily due to a $201 thousand increase in insurance and advisory commission and fee income, a $129 thousand increase in gains on the sale of investment securities and a $111 thousand increase in business account analysis fees.
For the six months ended June 30, 2013, non-interest income totaled $14.3 million, an increase of $344 thousand, or 2.5%, from the six months ended June 30, 2012. The increase was primarily due to a $521 thousand increase in gains on the sale of investment securities, a $330 thousand increase in interchange fees, and a $241 thousand increase in business account analysis fees, partially offset by a $711 thousand decrease in mortgage banking income.
Non-interest Expense
For the three months ended June 30, 2013, non-interest expense totaled $30.3 million, a decrease of $2.6 million, or 7.9%, from the three months ended June 30, 2012. The decrease in non-interest expense was due to the absence of $2.9 million of merger and restructuring charges during the three months ended June 30, 2013. Intangible asset amortization also decreased $578 thousand as a result of intangibles assets that were fully amortized, offset by increases in other expenses of $983 thousand associated with the outsourcing of certain information technology costs.
For the six months ended June 30, 2013, non-interest expense totaled $60.0 million, a decrease of $2.5 million, or 4.0%, from the six months ended June 30, 2012. The decrease in non-interest expense was primarily driven by a $3.0 million decrease in merger and restructuring charges and a $711 thousand decrease in salaries and benefits, partially offset by a $776 thousand increase in professional fees primarily related to the Department of Justice Investigation, a $754 thousand increase in information technology costs related to outsourcing and a $349 thousand increase in correspondent bank charges. During the six months ended June 30, 2013, classified loan and other real estate owned related expense remained elevated as we continue efforts to manage down our non-performing assets.
Income Taxes
For the three months ended June 30, 2013, we recorded a provision for income taxes of $374 thousand, reflecting an effective tax rate of 11.4% compared to a provision for income taxes of $359 thousand reflecting an effective tax rate of 13.4% for the three months ended June 30, 2012. For the six months ended June 30, 2013, we recorded a provision for income taxes of $949 thousand, reflecting an effective tax rate of 13.4% compared to a provision for income taxes of $802 thousand reflecting an effective tax rate of 11.3% for the six months ended June 30, 2012. The effective tax rates differ from the statutory rate of 35% principally because of tax-exempt investments, non-taxable income related to bank-owned life insurance and tax credits received on affordable housing partnerships. These tax credits relate to investments maintained by the Bank as a limited partner in partnerships that sponsor affordable housing projects utilizing low-income housing credits under the Internal Revenue Code.
Asset Quality
Our asset quality metrics continue to improve as we reduce our non-performing asset levels. At June 30, 2013, our non-performing assets were $87.7 million, representing a decrease of $16.5 million, or 15.9%, from $104.2 million at December 31, 2012, and a $45.8 million decrease, or 34.3%, from $133.5 million at June 30, 2012. Reserves as a percentage of non-performing loans, excluding government guaranteed student loans, totaled 101.3% at June 30, 2013 compared to 84.3% at December 31, 2012 and 62.5% at June 30, 2012. At June 30, 2013, our allowance for loan losses was $58.7 million, or 2.46% of total loans, compared to $57.6 million, or 2.36% of total loans, at December 31, 2012, and $55.6 million, or 2.14% of total loans, at June 30, 2012.
During the three and six months ended June 30, 2013, the Bank recorded a provision for credit losses in the amount of $5.0 million and $10.0 million, respectively, compared to a provision of $7.5 million and $15.0 million, respectively, for the three and six months ended June 30, 2012. Net charge-offs during the three and six months ended June 30, 2013 totaled $5.0 million and $9.0 million, or an annualized net charge-off rate of 0.84% and 0.75%, respectively, compared to $7.0 million and $13.6 million, or an annualized net charge off rate of 1.08% and 1.05%, respectively, for the same period in 2012.
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 on loans and investments have largely been retained in cash or invested in high quality government-backed securities. In addition, at June 30, 2013, we had the ability to borrow up to $1.2 billion combined from the FHLB of Pittsburgh and the Federal Reserve Bank of Philadelphia. Our capital ratios as of June 30, 2013 compared to December 31, 2012 and June 30, 2012, as well as our excess capital over regulatory minimums as of June 30, 2013 to be considered well capitalized, are as follows:
| Minimum Well | Excess Capital | ||||
| 6/30/2013 | 12/31/2012 | 6/30/2012 | Capitalized Ratio | 6/30/2013 | |
| Tangible Capital | 10.73% | 10.30% | 10.53% | ||
| Tier 1 Capital (to average assets) | 10.35% | 9.53% | 9.67% | 5% | $245,106 |
| Tier 1 Capital (to risk weighted assets) | 20.56% | 19.23% | 18.36% | 6% | $335,748 |
| Total Capital (to risk weighted assets) | 21.83% | 20.50% | 19.62% | 10% | $272,713 |
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 new capital rules under Basel III that become effective for the Bank on January 1, 2015.
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 or regulatory actions 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, | |
| 2013 | 2013 | 2012 | 2012 | |
| ASSETS: | ||||
| Cash and Cash Equivalents: | ||||
| Cash and due from banks | $45,629 | $37,550 | $54,924 | $51,773 |
| Interest-bearing deposits | 227,497 | 287,272 | 434,984 | 382,240 |
| Total cash and cash equivalents | 273,126 | 324,822 | 489,908 | 434,013 |
| Investment Securities: | ||||
| Available-for-sale | 1,152,199 | 1,150,475 | 1,267,491 | 1,053,597 |
| Held-to-maturity | 568,369 | 557,157 | 477,198 | 419,454 |
| Federal Home Loan Bank stock, at cost | 18,587 | 17,823 | 16,384 | 19,433 |
| Total investment securities | 1,739,155 | 1,725,455 | 1,761,073 | 1,492,484 |
| Loans: | 2,385,093 | 2,407,996 | 2,447,304 | 2,599,535 |
| Allowance for loan losses | (58,662) | (58,679) | (57,649) | (55,621) |
| Net loans | 2,326,431 | 2,349,317 | 2,389,655 | 2,543,914 |
| Accrued Interest Receivable | 14,902 | 15,798 | 15,381 | 16,267 |
| Bank Premises and Equipment, net | 64,606 | 65,049 | 64,224 | 62,446 |
| Other Assets: | ||||
| Goodwill | 121,973 | 121,973 | 121,973 | 122,646 |
| Bank owned life insurance | 41,276 | 40,925 | 40,569 | 39,850 |
| Other intangibles | 8,944 | 9,412 | 9,879 | 12,085 |
| Other assets | 111,077 | 110,870 | 113,742 | 127,532 |
| Total other assets | 283,270 | 283,180 | 286,163 | 302,113 |
| Total Assets | $4,701,490 | $4,763,621 | $5,006,404 | $4,851,237 |
| LIABILITIES AND STOCKHOLDERS' EQUITY: | ||||
| Liabilities: | ||||
| Deposits: | ||||
| Non-interest bearing deposits | $310,921 | $316,533 | $328,892 | $322,411 |
| Interest bearing deposits | 3,426,688 | 3,471,859 | 3,598,621 | 3,523,320 |
| Total deposits | 3,737,609 | 3,788,392 | 3,927,513 | 3,845,731 |
| Borrowed funds | 275,361 | 275,357 | 250,352 | 285,344 |
| Other liabilities | 67,192 | 65,429 | 194,666 | 88,710 |
| Total liabilities | 4,080,162 | 4,129,178 | 4,372,531 | 4,219,785 |
| Commitments and Contingencies | ||||
| Stockholders' Equity: | ||||
| Preferred Stock -- $.01 par value | -- | -- | -- | -- |
| Common Stock – $.01 par value | 823 | 823 | 823 | 823 |
| Additional paid-in capital | 355,436 | 354,636 | 354,082 | 352,112 |
| Unearned common stock held by employee stock ownership plan | (17,000) | (17,449) | (17,901) | (18,534) |
| Retained earnings (partially restricted) | 335,566 | 332,661 | 329,447 | 321,537 |
| Accumulated other comprehensive (loss) income, net | (23,094) | (9,224) | (7,027) | (1,892) |
| Treasury stock, at cost | (30,403) | (27,004) | (25,551) | (22,594) |
| Total stockholders' equity | 621,328 | 634,443 | 633,873 | 631,452 |
| Total Liabilities and Stockholders' Equity | $4,701,490 | $4,763,621 | $5,006,404 | $4,851,237 |
| BENEFICIAL MUTUAL BANCORP, INC. AND SUBSIDIARIES | |||||
| Unaudited Consolidated Statements of Income | |||||
| (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, | |
| 2013 | 2013 | 2012 | 2013 | 2012 | |
| INTEREST INCOME: | |||||
| Interest and fees on loans | $29,052 | $29,656 | $34,304 | $58,708 | $66,613 |
| Interest on overnight investments | 203 | 181 | 180 | 384 | 341 |
| Interest and dividends on investment securities: | |||||
| Taxable | 7,741 | 7,410 | 9,239 | 15,150 | 18,401 |
| Tax-exempt | 702 | 715 | 740 | 1,418 | 1,532 |
| Total interest income | 37,698 | 37,962 | 44,463 | 75,660 | 86,887 |
| INTEREST EXPENSE: | |||||
| Interest on deposits: | |||||
| Interest bearing checking accounts | 719 | 800 | 1,344 | 1,519 | 2,548 |
| Money market and savings deposits | 1,642 | 1,621 | 2,279 | 3,263 | 4,400 |
| Time deposits | 2,057 | 2,123 | 2,542 | 4,180 | 5,133 |
| Total | 4,418 | 4,544 | 6,165 | 8,962 | 12,081 |
| Interest on borrowed funds | 2,052 | 1,852 | 2,132 | 3,905 | 4,188 |
| Total interest expense | 6,470 | 6,396 | 8,297 | 12,867 | 16,269 |
| Net interest income | 31,228 | 31,566 | 36,166 | 62,793 | 70,618 |
| Provision for loan losses | 5,000 | 5,000 | 7,500 | 10,000 | 15,000 |
| Net interest income after provision for loan losses | 26,228 | 26,566 | 28,666 | 52,793 | 55,618 |
| NON-INTEREST INCOME: | |||||
| Insurance and advisory commission and fee income | 1,690 | 2,095 | 1,489 | 3,784 | 3,650 |
| Service charges and other income | 4,322 | 3,768 | 4,119 | 8,091 | 7,691 |
| Mortgage banking income | 511 | 242 | 590 | 752 | 1,463 |
| Net gain on sale of investment securities | 804 | 833 | 675 | 1,637 | 1,116 |
| Total non-interest income | 7,327 | 6,938 | 6,873 | 14,264 | 13,920 |
| NON-INTEREST EXPENSE: | |||||
| Salaries and employee benefits | 14,347 | 13,988 | 14,722 | 28,335 | 29,046 |
| Occupancy expense | 2,503 | 2,515 | 2,434 | 5,018 | 4,897 |
| Depreciation, amortization and maintenance | 2,398 | 2,233 | 2,273 | 4,631 | 4,432 |
| Marketing expense | 1,113 | 927 | 932 | 2,040 | 1,815 |
| Intangible amortization expense | 468 | 467 | 1,046 | 935 | 1,957 |
| FDIC Insurance | 947 | 951 | 1,075 | 1,898 | 2,109 |
| Merger and restructuring charges | (159) | -- | 2,737 | (159) | 2,821 |
| Professional fees | 948 | 1,935 | 1,000 | 2,882 | 2,106 |
| Classified loan & other real estate owned related expense | 1,969 | 1,116 | 1,879 | 3,084 | 3,441 |
| Other | 5,741 | 5,583 | 4,758 | 11,325 | 9,843 |
| Total non-interest expense | 30,275 | 29,715 | 32,856 | 59,989 | 62,467 |
| Income before income taxes | 3,280 | 3,789 | 2,683 | 7,068 | 7,071 |
| Income tax expense | 374 | 575 | 359 | 949 | 802 |
| NET INCOME | $2,906 | $3,214 | $2,324 | $6,119 | $6,269 |
| EARNINGS PER SHARE – Basic | $0.04 | $0.04 | $0.03 | $0.08 | $0.08 |
| EARNINGS PER SHARE – Diluted | $0.04 | $0.04 | $0.03 | $0.08 | $0.08 |
| Average common shares outstanding – Basic | 76,073,297 | 76,376,452 | 76,838,141 | 76,224,037 | 76,940,992 |
| Average common shares outstanding – Diluted | 76,244,150 | 76,578,733 | 77,007,093 | 76,413,437 | 77,114,124 |
| BENEFICIAL MUTUAL BANCORP, INC. AND SUBSIDIARIES | ||||||||
| Selected Consolidated Financial and Other Data (Unaudited) | ||||||||
| (Dollars in thousands) | ||||||||
| Three Months Ended | Six Months Ended | |||||||
| June 30, 2013 | June 30, 2012 | June 30, 2013 | June 30, 2012 | |||||
| Average | Yield / | Average | Yield / | Average | Yield / | Average | Yield / | |
| Balance | Rate | Balance | Rate | Balance | Rate | Balance | Rate | |
| Investment Securities: | $2,021,607 | 1.71% | $1,829,462 | 2.22% | $2,018,542 | 1.68% | $1,748,403 | 2.32% |
| Overnight investments | 322,787 | 0.25% | 289,970 | 0.25% | 307,022 | 0.25% | 272,483 | 0.25% |
| Stock | 18,519 | 0.27% | 19,705 | 0.11% | 17,623 | 0.44% | 19,121 | 0.11% |
| Other investment securities | 1,680,301 | 2.01% | 1,519,787 | 2.63% | 1,693,897 | 1.68% | 1,456,799 | 2.74% |
| Loans: | 2,388,190 | 4.87% | 2,678,860 | 5.13% | 2,412,485 | 4.88% | 2,621,265 | 5.09% |
| Residential | 681,339 | 4.65% | 698,528 | 4.85% | 676,404 | 4.69% | 656,963 | 4.85% |
| Commercial real estate | 598,151 | 5.16% | 741,761 | 5.43% | 621,638 | 5.09% | 726,923 | 5.19% |
| Business and small business | 419,833 | 5.37% | 494,538 | 5.66% | 420,171 | 5.42% | 497,000 | 5.73% |
| Personal loans | 688,867 | 4.54% | 744,033 | 4.74% | 694,272 | 4.56% | 740,379 | 4.79% |
| Total Interest Earning Assets | $4,409,797 | 3.42% | $4,508,322 | 3.95% | $4,431,027 | 3.42% | $4,369,668 | 3.98% |
| Deposits: | $3,467,418 | 0.51% | $3,568,191 | 0.69% | $3,498,171 | 0.52% | $3,440,901 | 0.71% |
| Savings | 1,080,095 | 0.43% | 954,723 | 0.59% | 1,065,806 | 0.44% | 882,084 | 0.59% |
| Money Market | 482,617 | 0.39% | 548,896 | 0.65% | 489,213 | 0.39% | 542,154 | 0.67% |
| Demand | 671,938 | 0.25% | 600,822 | 0.31% | 664,563 | 0.26% | 545,424 | 0.27% |
| Demand - Municipals | 467,041 | 0.26% | 623,475 | 0.57% | 505,644 | 0.27% | 641,143 | 0.57% |
| Total Core Deposits | 2,701,691 | 0.35% | 2,727,916 | 0.53% | 2,725,226 | 0.35% | 2,610,805 | 0.54% |
| Time Deposits | 765,727 | 1.08% | 840,275 | 1.22% | 772,945 | 1.09% | 830,096 | 1.24% |
| Borrowings | 275,360 | 2.99% | 273,253 | 3.14% | 266,440 | 2.96% | 259,817 | 3.24% |
| Total Interest Bearing Liabilities | $3,742,778 | 0.69% | $3,841,444 | 0.87% | $3,764,611 | 0.69% | $3,700,718 | 0.88% |
| Non-interest Bearing Deposits | 312,339 | 308,879 | 309,610 | 292,553 | ||||
| Net Interest Margin | 2.83% | 3.21% | 2.83% | 3.23% | ||||
| ASSET QUALITY INDICATORS (Unaudited) | June 30, | March 31, | December 31, | June 30, |
| (Dollars in thousands) | 2013 | 2013 | 2012 | 2012 |
| Non-performing assets: | ||||
| Non-accruing loans* | $57,937 | $64,539 | $68,417 | $88,406 |
| Accruing loans past due 90 days or more** | 22,516 | 22,408 | 24,013 | 22,269 |
| Total non-performing loans | 80,453 | 86,947 | 92,430 | 110,675 |
| Real estate owned | 7,197 | 11,709 | 11,751 | 22,806 |
| Total non-performing assets | $87,650 | $98,656 | $104,181 | $133,481 |
| Non-performing loans to total loans | 3.37% | 3.61% | 3.78% | 4.26% |
| Non-performing assets to total assets | 1.86% | 2.07% | 2.08% | 2.75% |
| Non-performing assets less accruing loans past due 90 days or more to total assets | 1.39% | 1.60% | 1.60% | 2.29% |
| ALLL to total loans | 2.46% | 2.44% | 2.36% | 2.14% |
| ALLL to non-performing loans | 72.91% | 67.49% | 62.37% | 50.26% |
| ALLL to non-performing loans (excluding student loans) | 101.25% | 90.92% | 84.26% | 62.48% |
* Non-accruing loans at June 30, 2013, March 31, 2013 and December 31, 2012 do not include $2.2 million, $2.4 million and $2.3 million, respectively, of loans acquired with deteriorated credit quality, which have been recorded at their fair value at acquisition and are performing as expected. Non-accruing loans include $20.1 million, $14.7 million, $15.3 million, and $14.5 million of troubled debt restructured loans (TDRs) as of June 30, 2013, March 31, 2013, December 31, 2012, and June 30, 2012, respectively.
** Includes $22.5 million, $22.4 million, $24.0 million, and $21.6 million in government guaranteed student loans as of June 30, 2013, March 31, 2013, December 31, 2012 and June 30, 2012, respectively.
Non-performing loan charge offs as a percentage of the unpaid principal balances at June 30, 2013 are as follows (excluding government guaranteed student loans):
| NON-PERFORMING LOANS (Unaudited): | ||||
| Recorded | Unpaid Principal | Life-to-Date | % of Unpaid | |
| At June 30, 2013 (Dollars in thousands) | Investment | Balance | Charge offs | Principal Balance |
| Non-performing Loans by Category: | ||||
| Commercial Real Estate | $22,895 | $31,190 | ($8,295) | 26.60% |
| Commercial Business | 13,107 | 19,753 | (6,646) | 33.65% |
| Commercial Construction | 8,363 | 15,365 | (7,002) | 45.57% |
| Residential Real Estate | 11,825 | 12,558 | (733) | 5.84% |
| Residential Construction | 310 | 310 | -- | -- |
| Consumer Personal | 1,437 | 1,455 | (18) | 1.24% |
| Total Non-performing Loans | $57,937 | $80,631 | ($22,694) | |
The non-performing loans table above does not include $2.2 million of loans acquired with deteriorated credit quality, which have been recorded at their fair value at acquisition and were performing as expected at June 30, 2013.
Key Performance ratios are as follows for the three and six months ended (Unaudited):
| For the Three Months Ended | For the Six Months Ended | ||||
| June 30, | March 31, | December 31, | June 30, | ||
| 2013 | 2013 | 2012 | 2013 | 2012 | |
| PERFORMANCE RATIOS: | |||||
| (annualized) | |||||
| Return on average assets | 0.25% | 0.28% | 0.30% | 0.26% | 0.27% |
| Return on average equity | 1.86% | 2.14% | 2.35% | 2.00% | 2.02% |
| Net interest margin | 2.83% | 2.85% | 2.92% | 2.83% | 3.23% |
| Efficiency ratio | 78.53% | 77.17% | 75.93% | 77.85% | 73.89% |
| Tangible Common Equity | 10.73% | 10.86% | 10.30% | 10.73% | 10.53% |