PHILADELPHIA, July 24, 2014 (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, 2014. Beneficial recorded net income of $4.6 million and $7.0 million, or $0.06 and $0.09 per diluted share, for the three and six months ended June 30, 2014, respectively, compared to $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, respectively.
Highlights for the quarter ended June 30, 2014 are as follows:
- On a year to date basis, our loan portfolio increased $27.5 million (2.4% annualized growth) due to strong growth in commercial real estate lending.
- We have been able to stabilize our net interest margin, which was 2.81% for the quarter compared to 2.82% for the first quarter of 2014 and 2.83% for the second quarter of 2013.
- We completed the sale of $11.3 million on non-performing loans, which resulted in a net recovery of $913 thousand.
- We experienced continued improvement in our asset quality metrics during the quarter with non-performing loans, excluding government guaranteed student loans, decreasing 46.3% from December 31, 2013 and decreasing 52.0% from June 30, 2013.
- Net charge-offs decreased 66.4% for the quarter ended June 30, 2014 to $1.7 million compared to $5.0 million for the quarter ended June 30, 2013. Our non-performing assets ratio, excluding government guaranteed student loans, improved to 0.67% at June 30, 2014, compared to 1.26% at December 31, 2013.
- We repurchased 952,060 shares of common stock during the quarter ended June 30, 2014, increasing total treasury shares to 6,923,771 as of June 30, 2014.
- Our balance sheet remained strong at June 30, 2014, with our allowance for loan losses totaling $52.6 million, or 2.22% of total loans, compared to $55.6 million, or 2.38% of total loans, at December 31, 2013, and $58.7 million, or 2.46% of total loans, at June 30, 2013.
- Capital levels remained strong with tangible capital to tangible assets totaling 11.26% at June 30, 2014 compared to 10.89% at December 31, 2013.
Gerard Cuddy, Beneficial's President and CEO, stated, "During the quarter, we continued to make progress on our strategic goals of growing the loan portfolio, maintaining strong asset quality metrics, controlling expenses, and managing our capital. We were able to grow our total loans outstanding for the year due to strong commercial loan growth and we continue to recruit commercial lenders. During the quarter, we completed a non-performing loan sale and have achieved our goals of reducing non-performing assets to total assets below 1.0%. Our allowance for loan losses and capital levels remain strong and the balance sheet is positioned for future growth. We remain committed to our customers by delivering an education-based experience through The Beneficial Conversation and have made it our Mission to always help our customers do the right thing financially."
Balance Sheet
Total assets decreased $157.7 million, or 3.4%, to $4.4 billion at June 30, 2014 from $4.6 billion at December 31, 2013. Cash and cash equivalents decreased $101.7 million to $254.0 million at June 30, 2014 from $355.7 million at December 31, 2013. The decrease in cash and cash equivalents was primarily driven by a planned $155.2 million run-off of municipal deposits. The run-off of the municipal deposits and the related decrease in cash balances have helped stabilize our net interest margin for the quarter and the year.
Investments decreased $80.2 million, or 5.1%, to $1.5 billion at June 30, 2014 from $1.6 billion at December 31, 2013. The decrease in investments during the six months ended June 30, 2014 was primarily driven by investment prepayments and the proceeds from the prepayments helped fund the municipal deposit run-off and the growth in our loan portfolio. We continue to focus on maintaining a high quality investment portfolio that provides a steady stream of cash flows both in the current and in rising interest rate environments.
Loans increased $27.5 million, or 1.2%, to $2.4 billion at June 30, 2014 from $2.3 billion at December 31, 2013. We experienced a $54.6 million increase in our commercial loan portfolio due to strong commercial real estate growth. Commercial loans include shared national credits, which increased to $93.1 million at June 30, 2014 compared to $39.9 million at December 31, 2013 and $83.8 million at March 31, 2014.
Increases in intermediate and long-term interest rates continue to impact the housing market and contributed to lower mortgage loan originations which resulted in an $8.8 million decrease in our residential loan portfolio for the six months ended June 30, 2014. Our consumer loan categories continue to be impacted by weak demand and decreased $18.3 million during the year.
Deposits decreased $154.6 million, or 4.2%, to $3.5 billion at June 30, 2014 from $3.7 billion at December 31, 2013. The decrease in deposits was primarily the result of a $155.2 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, 2014, stockholders' equity decreased to $612.7 million, or 13.8% of total assets, compared to $615.1 million, or 13.4% of total assets, at December 31, 2013. This decrease was due to the repurchase of 1,748,090 shares of common stock during the period, partially offset by an increase in retained earnings and other comprehensive income during the period.
Net Interest Income
For the three months ended June 30, 2014, net interest income was $29.2 million, a decrease of $2.0 million, or 6.4%, from the three months ended June 30, 2013. The decrease in net interest income was primarily the result of a decline in the average balance of investments and loans, coupled with a reduction in the average interest rate earned on loans, partially offset by a reduction in the average cost and average balance of municipal deposits. Net interest margin was relatively stable at 2.81% for the three months ended June 30, 2014 as compared to 2.83% for the same period in 2013. We expect that the continued low interest rate environment will put pressure on net interest margin in future periods but are focused on growing our loan portfolio and improving our balance sheet to help stabilize our net interest margin.
For the six months ended June 30, 2014, Beneficial reported net interest income of $58.7 million, a decrease of $4.0 million, or 6.4%, from the six months ended June 30, 2013. The decrease was primarily the result of a decline in the average balance of investments and loans, coupled with a reduction in the average interest rate earned on loans, partially offset by a reduction in the average cost of liabilities and a $200.5 million decrease in the average balance of municipal deposits during 2014. Our net interest margin decreased to 2.81% for the six months ended June 30, 2014 from 2.83% for the same period in 2013.
Non-interest Income
For the three months ended June 30, 2014, non-interest income totaled $6.3 million, a decrease of $1.0 million, or 13.7%, from the three months ended June 30, 2013. The decrease was primarily due to a $710 thousand decrease in the gain on the sale of investment securities and a $396 thousand decrease in mortgage banking income due to our decision to retain some of our residential mortgage production.
For the six months ended June 30, 2014, non-interest income totaled $11.9 million, a decrease of $2.3 million, or 16.3%, from the six months ended June 30, 2013. The decrease was primarily due to a $1.3 million decrease in the gain on the sale of investment securities and a $512 thousand decrease in mortgage banking income due to our decision to retain some of our residential mortgage production.
Non-interest Expense
For the three months ended June 30, 2014, non-interest expense totaled $29.2 million, a decrease of $1.1 million, or 3.5%, from the three months ended June 30, 2013. The decrease in non-interest expense was primarily due to a $1.3 million decrease in classified loan and other real estate owned expenses and a $377 thousand decrease in marketing expense, partially offset by a $436 thousand increase in salaries and employee benefits. The decrease in classified loan and other real estate owned expenses is consistent with the reduction in the balance of non-performing assets and our improving asset quality metrics.
For the six months ended June 30, 2014, non-interest expense totaled $60.4 million, an increase of $455 thousand, or 0.8%, from the six months ended June 30, 2013. The increase in non-interest expense was primarily driven by a $1.5 million increase in salaries and employee benefits and a $1.0 million increase in occupancy expenses, which were driven by snow removal expenses and one-time headquarter moving costs, partially offset by a $2.1 million decrease in classified loan and other real estate owned expenses and a $493 thousand decrease in professional fees.
Income Taxes
For the three months ended June 30, 2014, we recorded a provision for income taxes of $1.5 million, reflecting an effective tax rate of 24.7% compared to a provision for income taxes of $374 thousand, reflecting an effective tax rate of 11.4% for the three months ended June 30, 2013. The increase in income tax expense was due to higher profitability levels for the three months ended June 30, 2014. For the six months ended June 30, 2014, we recorded a provision for income taxes of $1.4 million, reflecting an effective tax rate of 16.9%, compared to a provision for income taxes of $949 thousand, reflecting an effective tax rate of 13.4% for the six months ended June 30, 2013. The increase in income tax expense and the effective tax rate is due to higher profitability levels for the six months ended June 30, 2014 as compared to the six months ended June 30, 2013. 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 pursuant to Section 42 of the Internal Revenue Code.
Asset Quality
Asset quality metrics showed continued signs of improvement during the quarter ended June 30, 2014. Non-performing loans, excluding government guaranteed student loans, decreased to $27.8 million at June 30, 2014, compared to $51.8 million at December 31, 2013. The $24.0 million, or 46.3%, decrease in non-performing loans since year end, excluding government student loans, was a function of our continued work out of non-performing assets as well as an $11.3 million non-performing loan sale, which resulted in a $913 thousand net recovery. As a result of the improvement in our asset quality metrics, we were able to reduce our provision for loan losses for the quarter ended June 30, 2014 to $250 thousand compared to $5.0 million for the quarter ended June 30, 2013. Net charge-offs during the quarter ended June 30, 2014 were $1.7 million compared to $2.7 million during the quarter ended December 31, 2013 and $5.0 million during the quarter ended June 30, 2013. At June 30, 2014, the Bank's allowance for loan losses totaled $52.6 million, or 2.22% of total loans, compared to $55.6 million, or 2.38% of total loans, at December 31, 2013.
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, 2014, we had the ability to borrow up to $1.2 billion combined from the Federal Home Loan Bank of Pittsburgh and the Federal Reserve Bank of Philadelphia. Our capital ratios are considered to be well capitalized and are as follows:
| Minimum Well | Excess Capital | ||||
| 6/30/2014 | 12/31/2013 | 6/30/2013 | Capitalized Ratio | 6/30/2014 | |
| Tangible Capital | 11.26% | 10.89% | 10.73% | ||
| Tier 1 Capital (to average assets) | 10.76% | 10.22% | 10.35% | 5% | $248,789 |
| Tier 1 Capital (to risk weighted assets) | 20.97% | 20.57% | 20.56% | 6% | $331,893 |
| Total Capital (to risk weighted assets) | 22.24% | 21.83% | 21.83% | 10% | $271,224 |
Maintaining strong capital levels remains one of our top priorities. Our capital levels are in excess of well capitalized levels under the current regulatory requirements as well as the proposed capital rules under Basel III.
During the quarter, we repurchased 952,060 shares of common stock at an average price of $13.32 under our share repurchase program. As of June 30, 2014, we have 1.5 million shares remaining under the share repurchase program that can be repurchased in future periods.
Other Matters
As disclosed in our earnings release on January 30, 2014 and in our Form 10-K for the year ended December 31, 2013, in the first quarter of 2013, the Company received notice that it was being investigated by the Department of Justice ("DOJ") for potential violations of the Equal Credit Opportunity Act and Fair Housing Act relating to the Company's home-mortgage lending practices from January 1, 2008 to the present.
In late January 2014, the Company received correspondence from the DOJ indicating that the DOJ had completed its review and determined that the matter did not require enforcement action by the DOJ and was being referred back to the FDIC. The Company was not able to determine whether further action will be taken at this point with respect to the ultimate resolution of this matter and the Company is in discussions with the FDIC Staff to clear this matter. Until this matter is resolved, it is unlikely that any regulatory applications will be filed related to strategic expansion or regarding a second step conversion.
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 58 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, | |
| 2014 | 2014 | 2013 | 2013 | |
| ASSETS: | ||||
| Cash and Cash Equivalents: | ||||
| Cash and due from banks | $57,853 | $57,259 | $41,801 | $45,629 |
| Interest-bearing deposits | 196,115 | 306,674 | 313,882 | 227,497 |
| Total cash and cash equivalents | 253,968 | 363,933 | 355,683 | 273,126 |
| Investment Securities: | ||||
| Available-for-sale | 840,551 | 861,558 | 1,034,180 | 1,152,199 |
| Held-to-maturity | 644,061 | 663,370 | 528,829 | 568,369 |
| Federal Home Loan Bank stock, at cost | 15,606 | 17,404 | 17,417 | 18,587 |
| Total investment securities | 1,500,218 | 1,542,332 | 1,580,426 | 1,739,155 |
| Loans: | 2,369,335 | 2,327,381 | 2,341,807 | 2,385,093 |
| Allowance for loan losses | (52,624) | (54,061) | (55,649) | (58,662) |
| Net loans | 2,316,711 | 2,273,320 | 2,286,158 | 2,326,431 |
| Accrued interest receivable | 13,396 | 13,615 | 13,999 | 14,902 |
| Bank premises and equipment, net | 79,089 | 76,712 | 71,753 | 64,606 |
| Other assets: | ||||
| Goodwill | 121,973 | 121,973 | 121,973 | 121,973 |
| Bank owned life insurance | 42,050 | 41,726 | 41,414 | 41,276 |
| Other intangibles | 7,073 | 7,540 | 8,007 | 8,944 |
| Other assets | 91,256 | 96,325 | 104,000 | 111,077 |
| Total other assets | 262,352 | 267,564 | 275,394 | 283,270 |
| Total assets | $4,425,734 | $4,537,476 | $4,583,413 | $4,701,490 |
| LIABILITIES AND STOCKHOLDERS' EQUITY: | ||||
| Liabilities: | ||||
| Deposits: | ||||
| Non-interest bearing deposits | $319,082 | $322,343 | $291,109 | $310,921 |
| Interest bearing deposits | 3,186,383 | 3,294,314 | 3,368,907 | 3,426,688 |
| Total deposits | 3,505,465 | 3,616,657 | 3,660,016 | 3,737,609 |
| Borrowed funds | 250,379 | 250,374 | 250,370 | 275,361 |
| Other liabilities | 57,231 | 56,340 | 57,881 | 67,192 |
| Total liabilities | 3,813,075 | 3,923,371 | 3,968,267 | 4,080,162 |
| Commitments and contingencies | ||||
| Stockholders' equity: | ||||
| Preferred stock -- $.01 par value | -- | -- | -- | -- |
| Common stock – $.01 par value | 825 | 824 | 823 | 823 |
| Additional paid-in capital | 360,521 | 358,719 | 356,963 | 355,436 |
| Unearned common stock held by employee stock ownership plan | (15,204) | (15,653) | (16,102) | (17,000) |
| Retained earnings | 349,073 | 344,497 | 342,025 | 335,566 |
| Accumulated other comprehensive loss, net | (12,867) | (17,316) | (21,354) | (23,094) |
| Treasury stock, at cost | (69,689) | (56,966) | (47,209) | (30,403) |
| Total stockholders' equity | 612,659 | 614,105 | 615,146 | 621,328 |
| Total liabilities and stockholders' equity | $4,425,734 | $4,537,476 | $4,583,413 | $4,701,490 |
| 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, | |
| 2014 | 2014 | 2013 | 2014 | 2013 | |
| INTEREST INCOME: | |||||
| Interest and fees on loans | $26,202 | $26,458 | $29,052 | $52,660 | $58,708 |
| Interest on overnight investments | 190 | 189 | 203 | 379 | 384 |
| Interest and dividends on investment securities: | |||||
| Taxable | 7,736 | 7,795 | 7,741 | 15,530 | 15,150 |
| Tax-exempt | 658 | 662 | 702 | 1,321 | 1,418 |
| Total interest income | 34,786 | 35,104 | 37,698 | 69,890 | 75,660 |
| INTEREST EXPENSE: | |||||
| Interest on deposits: | |||||
| Interest bearing checking accounts | 422 | 443 | 719 | 865 | 1,519 |
| Money market and savings deposits | 1,349 | 1,329 | 1,642 | 2,678 | 3,263 |
| Time deposits | 1,988 | 2,001 | 2,057 | 3,989 | 4,180 |
| Total | 3,759 | 3,773 | 4,418 | 7,532 | 8,962 |
| Interest on borrowed funds | 1,810 | 1,801 | 2,052 | 3,611 | 3,905 |
| Total interest expense | 5,569 | 5,574 | 6,470 | 11,143 | 12,867 |
| Net interest income | 29,217 | 29,530 | 31,228 | 58,747 | 62,793 |
| Provision for loan losses | 250 | 1,500 | 5,000 | 1,750 | 10,000 |
| Net interest income after provision for loan losses | 28,967 | 28,030 | 26,228 | 56,997 | 52,793 |
| NON-INTEREST INCOME: | |||||
| Insurance and advisory commission and fee income | 1,609 | 2,081 | 1,690 | 3,690 | 3,784 |
| Service charges and other income | 4,503 | 3,201 | 4,322 | 7,705 | 8,091 |
| Mortgage banking income | 115 | 125 | 511 | 240 | 752 |
| Net gain on sale of investment securities | 94 | 204 | 804 | 297 | 1,637 |
| Total non-interest income | 6,321 | 5,611 | 7,327 | 11,932 | 14,264 |
| NON-INTEREST EXPENSE: | |||||
| Salaries and employee benefits | 14,783 | 15,010 | 14,347 | 29,793 | 28,335 |
| Occupancy expense | 2,436 | 3,618 | 2,503 | 6,054 | 5,018 |
| Depreciation, amortization and maintenance | 2,117 | 2,477 | 2,398 | 4,594 | 4,631 |
| Marketing expense | 736 | 885 | 1,113 | 1,621 | 2,040 |
| Intangible amortization expense | 467 | 467 | 468 | 934 | 935 |
| FDIC insurance | 805 | 783 | 947 | 1,588 | 1,898 |
| Merger and restructuring charges | -- | -- | (159) | -- | (159) |
| Professional fees | 1,034 | 1,355 | 948 | 2,389 | 2,882 |
| Classified loan and other real estate owned related expense | 627 | 342 | 1,969 | 969 | 3,084 |
| Other | 6,205 | 6,297 | 5,741 | 12,502 | 11,325 |
| Total non-interest expense | 29,210 | 31,234 | 30,275 | 60,444 | 59,989 |
| Income before income taxes | 6,078 | 2,407 | 3,280 | 8,485 | 7,068 |
| Income tax expense (benefit) | 1,502 | (65) | 374 | 1,437 | 949 |
| NET INCOME | $4,576 | $2,472 | $2,906 | $7,048 | $6,119 |
| EARNINGS PER SHARE – Basic | $0.06 | $0.03 | $0.04 | $0.10 | $0.08 |
| EARNINGS PER SHARE – Diluted | $0.06 | $0.03 | $0.04 | $0.09 | $0.08 |
| Average common shares outstanding – Basic | 73,558,881 | 74,241,064 | 76,073,297 | 73,898,088 | 76,224,037 |
| Average common shares outstanding – Diluted | 74,192,047 | 74,795,782 | 76,244,150 | 74,497,031 | 76,413,437 |
| BENEFICIAL MUTUAL BANCORP, INC. AND SUBSIDIARIES | ||||||||||
| Selected Consolidated Financial and Other Data (Unaudited) | ||||||||||
| (Dollars in thousands) | ||||||||||
| Three Months Ended | Six Months Ended | |||||||||
| June 30, 2014 | March 31, 2014 | June 30, 2013 | June 30, 2014 | June 30, 2013 | ||||||
| Average | Yield / | Average | Yield / | Average | Yield / | Average | Yield / | Average | Yield / | |
| Balance | Rate | Balance | Rate | Balance | Rate | Balance | Rate | Balance | Rate | |
| Investment securities: | $1,826,663 | 1.88% | $1,871,670 | 1.85% | $2,021,607 | 1.71% | $1,849,043 | 1.86% | $2,018,542 | 1.68% |
| Overnight investments | 301,195 | 0.25% | 304,284 | 0.25% | 322,787 | 0.25% | 302,731 | 0.25% | 307,022 | 0.25% |
| Stock | 15,902 | 5.45% | 17,412 | 3.51% | 18,519 | 0.27% | 16,653 | 4.44% | 17,623 | 0.44% |
| Other investment securities | 1,509,566 | 2.17% | 1,549,974 | 2.14% | 1,680,301 | 2.01% | 1,529,659 | 2.15% | 1,693,897 | 1.68% |
| Loans: | 2,322,160 | 4.50% | 2,319,600 | 4.58% | 2,388,190 | 4.87% | 2,320,887 | 4.54% | 2,412,485 | 4.88% |
| Residential | 673,668 | 4.47% | 678,385 | 4.55% | 681,339 | 4.65% | 676,014 | 4.51% | 676,404 | 4.69% |
| Commercial real estate | 584,285 | 4.96% | 550,853 | 4.73% | 598,151 | 5.16% | 566,769 | 4.88% | 621,638 | 5.09% |
| Business and small business | 423,747 | 4.12% | 440,560 | 4.67% | 419,833 | 5.37% | 433,000 | 4.36% | 420,171 | 5.42% |
| Personal loans | 640,460 | 4.37% | 649,802 | 4.42% | 688,867 | 4.54% | 645,104 | 4.39% | 694,272 | 4.56% |
| Total interest earning assets | $4,148,823 | 3.35% | $4,191,270 | 3.36% | $4,409,797 | 3.42% | $4,169,930 | 3.35% | $4,431,027 | 3.42% |
| Deposits: | $3,260,534 | 0.46% | $3,319,497 | 0.46% | $3,467,418 | 0.51% | $3,289,852 | 0.46% | $3,498,171 | 0.52% |
| Savings | 1,155,229 | 0.35% | 1,131,997 | 0.35% | 1,080,095 | 0.43% | 1,143,677 | 0.35% | 1,065,806 | 0.44% |
| Money market | 440,830 | 0.32% | 445,960 | 0.32% | 482,617 | 0.39% | 443,381 | 0.32% | 489,213 | 0.39% |
| Demand | 677,371 | 0.20% | 675,145 | 0.21% | 671,938 | 0.25% | 676,264 | 0.20% | 664,563 | 0.26% |
| Demand - municipals | 272,803 | 0.11% | 337,899 | 0.12% | 467,041 | 0.26% | 305,171 | 0.12% | 505,644 | 0.27% |
| Total core deposits | 2,546,233 | 0.28% | 2,591,001 | 0.28% | 2,701,691 | 0.35% | 2,568,493 | 0.28% | 2,725,226 | 0.35% |
| Time deposits | 714,301 | 1.12% | 728,496 | 1.11% | 765,727 | 1.08% | 721,359 | 1.12% | 772,945 | 1.09% |
| Borrowings | 250,376 | 2.90% | 250,439 | 2.92% | 275,360 | 2.99% | 250,408 | 2.91% | 266,440 | 2.96% |
| Total interest bearing liabilities | $3,510,910 | 0.64% | $3,569,936 | 0.63% | $3,742,778 | 0.69% | $3,540,260 | 0.63% | $3,764,611 | 0.69% |
| Non-interest bearing deposits | 314,569 | 304,283 | 312,339 | 975,318 | 309,610 | |||||
| Net interest margin | 2.81% | 2.82% | 2.83% | 2.81% | 2.83% | |||||
| ASSET QUALITY INDICATORS | June 30, | March 31, | December 31, | June 30, |
| (Dollars in thousands) | 2014 | 2014 | 2013 | 2013 |
| Non-performing assets: | ||||
| Non-accruing loans | $27,782 | $48,127 | $51,765 | $57,937 |
| Accruing government guaranteed student loans past due 90 days or more | 16,819 | 20,236 | 24,410 | 22,516 |
| Total non-performing loans | 44,601 | 68,363 | 76,175 | 80,453 |
| Real estate owned | 2,008 | 4,039 | 5,861 | 7,197 |
| Total non-performing assets | 46,609 | $72,402 | $82,036 | $87,650 |
| Non-performing loans to total loans | 1.88% | 2.94% | 3.25% | 3.37% |
| Non-performing assets to total assets | 1.05% | 1.60% | 1.79% | 1.86% |
| Non-performing assets, excluding government guaranteed student loans, to total assets | 0.67% | 1.15% | 1.26% | 1.39% |
| ALLL to total loans | 2.22% | 2.32% | 2.38% | 2.46% |
| ALLL to non-performing loans | 117.99% | 79.08% | 73.05% | 72.91% |
| ALLL to non-performing loans, excluding government guaranteed student loans | 189.42% | 112.33% | 107.50% | 101.25% |
Impaired loan charge offs as a percentage of the unpaid principal balances at June 30, 2014 are as follows:
| IMPAIRED LOANS: | ||||
| At June 30, 2014 (Dollars in thousands) |
Recorded Investment |
Unpaid Principal Balance |
Life-to-Date Charge offs |
% of Unpaid Principal Balance |
| Impaired loans by category: | ||||
| Commercial real estate | $6,466 | $9,502 | ($3,036) | 31.95% |
| Commercial business | 9,020 | 15,537 | ($6,517) | 41.95% |
| Commercial construction | 1,437 | 1,648 | ($211) | 12.80% |
| Residential real estate | 8,926 | 9,503 | ($577) | 6.07% |
| Residential construction | 130 | 338 | ($208) | 61.54% |
| Consumer personal | 1,803 | 1,830 | ($27) | 1.48% |
| Total impaired loans | $27,782 | $38,358 | ($10,576) | 27.57% |
Key performance ratios (annualized) 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, | ||
| 2014 | 2014 | 2013 | 2014 | 2013 | |
| PERFORMANCE RATIOS: | |||||
| (annualized) | |||||
| Return on average assets | 0.41% | 0.23% | 0.25% | 0.32% | 0.26% |
| Return on average equity | 3.01% | 1.70% | 1.86% | 2.35% | 2.00% |
| Net interest margin | 2.81% | 2.82% | 2.78% | 2.81% | 2.83% |
| Efficiency ratio | 82.19% | 88.88% | 84.42% | 85.52% | 77.85% |
| Tangible common equity | 11.26% | 10.99% | 10.89% | 11.26% | 10.73% |