PHILADELPHIA, April 23, 2015 (GLOBE NEWSWIRE) -- Beneficial Bancorp, Inc. ("Beneficial") (Nasdaq:BNCL), the parent company of Beneficial Bank (the "Bank"), today announced net income of $5.3 million, or $0.07 per diluted share, for the quarter ended March 31, 2015, compared to net income of $2.5 million, or $0.03 per diluted share, for the quarter ended March 31, 2014.
Highlights for the quarter ended March 31, 2015 are as follows:
- As previously announced on January 12, 2015, Beneficial completed the stock offering conducted in connection with its second-step conversion. In connection with the conversion, 50,383,817 shares of common stock were sold, at a price of $10.00 per share, for gross proceeds of $503.8 million.
- Following the second-step conversion, our capital levels increased and are strong with tangible capital to tangible assets totaling 20.83% at March 31, 2015 compared to 10.44% at December 31, 2014.
- For the quarter, our loan portfolio increased $244.2 million, or 10.1%, due primarily to a $200.1 million participation in a portfolio of multi-family loans and a residential loan portfolio purchase.
- Continued asset quality improvement and net loan recoveries resulted in a $2.0 million negative provision for loan losses during the quarter ended March 31, 2015. Our allowance for loan losses totaled $49.1 million, or 1.84% of total loans and 128.70% of non-performing loans, compared to $50.7 million, or 2.09% of total loans and 126.92% of non-performing loans, at December 31, 2014.
- Our net interest margin was 2.75% for the first quarter of 2015 compared to 2.79% for the fourth quarter of 2014 and 2.82% for the first quarter of 2014.
- Deposits decreased $464.4 million, or 12.0%, to $3.42 billion at March 31, 2015 from $3.88 billion at December 31, 2014. Deposits at December 31, 2014 included $482.1 million of subscription funds held in deposit accounts in connection with the second-step conversion offering that were reclassified into stockholders' equity in the first quarter of 2015.
- Stockholders' equity increased $483.8 million, or 79.2%, to $1.09 billion at March 31, 2015 from $610.9 million at December 31, 2014. The increase in stockholders' equity was primarily due to net proceeds received in connection with the second-step conversion.
- Tangible book value per share totaled $11.69 at March 31, 2015.
- Beneficial Bank was named as one of Philly.com's Top Workplaces of 2015 by the Philadelphia Inquirer.
Gerard Cuddy, Beneficial's President and CEO, stated, "We are excited to have completed our second-step offering during the quarter. Following the second-step, we are focused on prudent capital management, organic growth and improving our financial performance. During the quarter, we started to deploy some of the proceeds to assist us in achieving our strategic and financial growth goals. We are pleased with the progress we have made to improve earnings during the quarter and our asset quality metrics remain strong. We're thrilled to be named as one of Philly.com's Top Workplaces of 2015. It is a great honor to be recognized as a top local employer and it is especially exciting because it came from our employees. We believe this demonstrates we're doing what's right for our employees as well as our customers."
Balance Sheet
Total assets increased $18.9 million, or 0.4%, to $4.77 billion at March 31, 2015 compared to $4.75 billion at December 31, 2014. Cash and cash equivalents decreased $227.3 million to $306.7 million at March 31, 2015 from $534.0 million at December 31, 2014. The decrease in cash and cash equivalents was primarily driven by the deployment of a portion of the second-step conversion offering proceeds through the participation in a portfolio of multi-family loans and the purchase of residential real estate loans.
Investments were consistent with year-end and totaled $1.50 billion at March 31, 2015 compared to $1.49 billion at December 31, 2014. 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. We are also focused on improving our balance sheet mix by reducing the percentage of our assets in cash and investments and growing our loan portfolio.
Loans increased $244.2 million, or 10.1%, to $2.67 billion at March 31, 2015 from $2.42 billion at December 31, 2014. The increase was primarily due to a $200.1 million participation in a portfolio of multi-family loans and the purchase of $21.0 million of residential real estate loans. Commercial loans include shared national credits, which increased to $209.3 million at March 31, 2015 compared to $186.7 million at December 31, 2014.
Deposits decreased $464.4 million, or 12.0%, to $3.42 billion at March 31, 2015 from $3.88 billion at December 31, 2014. Deposits at December 31, 2014 included $482.1 million of subscription funds held in deposit accounts in connection with the second-step conversion offering that were reclassified into stockholders' equity in the first quarter of 2015. Excluding the $482.1 million of subscription funds, deposits increased $17.7 million during the quarter ended March 31, 2015. The $17.7 million increase in deposits during the quarter ended March 31, 2015 was primarily due to $19.5 million, $13.5 million, and $12.7 million increases in non-interest bearing checking accounts, money market accounts, and saving accounts, respectively, partially offset by a $47.3 million decrease in municipal deposits and a $16.1 million decrease in time deposits, which was consistent with the planned run-off associated with our re-pricing of higher-cost, non-relationship-based accounts.
Stockholders' equity increased $483.8 million, or 79.2%, to $1.09 billion at March 31, 2015 from $610.9 million at December 31, 2014. The increase in stockholders' equity was primarily due to net proceeds received in connection with the second-step conversion.
Net Interest Income
For the quarter ended March 31, 2015, net interest income was $30.1 million, an increase of $603 thousand, or 2.0%, from the quarter ended March 31, 2014. The increase in net interest income was primarily the result of an increase in the average balance of loans and investments, which offset the decline in yields, as well as a reduction in the average cost of liabilities due primarily to reductions in higher-cost time deposits and borrowings. Net interest income also included a special dividend of $370 thousand on our investment in the Federal Home Loan Bank, which benefitted the net interest margin by 3 basis points. The net interest margin totaled 2.75% for the quarter ended March 31, 2015 as compared to 2.79% for the quarter ended December 31, 2014 and 2.82% for the same period in 2014. We expect that the continued low interest rate environment will put pressure on the net interest margin in future periods but we are focused on growing our loan portfolio and improving our balance sheet mix to help stabilize our net interest margin.
Non-interest Income
Non-interest income was $5.6 million for both the quarter ended March 31, 2015 and March 31, 2014. Service charges and other income increased $306 thousand during the quarter ended March 31, 2015 compared to the same period a year ago primarily due to increases in foreign ATM fees. This increase in non-interest income was offset by a $209 thousand decrease in the net gain on the sale of investment securities.
Non-interest Expense
For the quarter ended March 31, 2015, non-interest expense totaled $30.5 million, a decrease of $743 thousand, or 2.4% from the quarter ended March 31, 2014. The decrease in non-interest expense was primarily due to a $1.3 million decrease in operating expenses related to the headquarters move in the first quarter of 2014, partially offset by a $431 thousand increase in marketing expense related to our current year initiatives to continue rebranding and drive future growth.
Income Taxes
For the quarter ended March 31, 2015, we recorded a provision for income taxes of $2.0 million, reflecting an effective tax rate of 27.6% compared to a benefit for income taxes of $65 thousand, reflecting an effective tax benefit of 2.7% for the quarter ended March 31, 2014. The increase in income tax expense and the effective tax rate was due to higher profitability levels for the quarter ended March 31, 2015 as compared to the quarter ended March 31, 2014. 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 continued to improve as non-performing loans, excluding government guaranteed student loans, decreased to $14.1 million at March 31, 2015, compared to $14.6 million at December 31, 2014, and $48.1 million at March 31, 2014. The $34.0 million, or 70.7%, decrease from March 31, 2014 in non-performing loans, was a function of our continued work out of non-performing assets as well as $23.6 million of non-performing commercial loan sales during 2014.
As a result of the improvement in our asset quality metrics and net recoveries received during the quarter ended March 31, 2015, we recorded a $2.0 million negative provision for loan losses for the quarter ended March 31, 2015 compared to recording a $1.5 million provision for loan losses for the quarter ended March 31, 2014. Net recoveries during the quarter ended March 31, 2015 were $490 thousand compared to net charge-offs of $3.1 million during the quarter ended March 31, 2014.
At March 31, 2015, the Bank's allowance for loan losses totaled $49.1 million, or 1.84% of total loans, compared to $50.7 million, or 2.09% of total loans, at December 31, 2014, and $54.1 million, or 2.32% of total loans at March 31, 2014.
Capital
The Bank's capital position remains strong relative to current regulatory requirements. The Bank continues to have substantial liquidity that has been retained in cash or invested in high quality government-backed securities. In addition, at March 31, 2015, 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 | ||||
| 3/31/2015 | 12/31/2014 | 3/31/2014 | Capitalized Ratio | 3/31/2015 | |
| Tangible Capital | 20.83% | 10.44% | 10.99% | ||
| Tier 1 Leverage (to average assets) | 16.62% | 11.05% | 10.46% | 5.0% | $533,318 |
| Common Equity Tier 1 Capital (to risk weighted assets) | 29.68% | N/A | N/A | 6.5% | $595,705 |
| Tier 1 Capital (to risk weighted assets) | 29.68% | 21.17% | 20.74% | 8.0% | $557,159 |
| Total Capital Ratio (to risk weighted assets) | 30.94% | 22.43% | 22.01% | 10.0% | $538,098 |
Maintaining strong capital levels remains one of our top priorities. Our capital levels are in excess of well capitalized levels under Basel III regulatory requirements.
About Beneficial 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 56 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 BANCORP, INC. AND SUBSIDIARIES | |||
| Unaudited Consolidated Statements of Financial Condition | |||
| (Dollars in thousands, except share amounts) | |||
| March 31, | December 31, | March 31, | |
| 2015 | 2014 | 2014 | |
| ASSETS: | |||
| Cash and Cash Equivalents: | |||
| Cash and due from banks | $42,594 | $40,684 | $57,259 |
| Interest-bearing deposits | 264,121 | 493,331 | 306,674 |
| Total cash and cash equivalents | 306,715 | 534,015 | 363,933 |
| Investment Securities: | |||
| Available-for-sale | 733,210 | 757,834 | 861,558 |
| Held-to-maturity | 757,730 | 727,755 | 663,370 |
| Federal Home Loan Bank stock, at cost | 8,830 | 8,830 | 17,404 |
| Total investment securities | 1,499,770 | 1,494,419 | 1,542,332 |
| Loans: | 2,665,961 | 2,421,745 | 2,327,381 |
| Allowance for loan losses | (49,144) | (50,654) | (54,061) |
| Net loans | 2,616,817 | 2,371,091 | 2,273,320 |
| Accrued Interest Receivable | 13,736 | 13,383 | 13,615 |
| Bank Premises and Equipment, net | 79,616 | 78,957 | 76,712 |
| Other Assets: | |||
| Goodwill | 121,973 | 121,973 | 121,973 |
| Bank owned life insurance | 63,724 | 63,349 | 61,668 |
| Other intangibles | 5,670 | 6,136 | 7,540 |
| Other assets | 62,432 | 68,199 | 76,383 |
| Total other assets | 253,799 | 259,657 | 267,564 |
| Total Assets | $4,770,453 | $4,751,522 | $4,537,476 |
| LIABILITIES AND STOCKHOLDERS' EQUITY: | |||
| Liabilities: | |||
| Deposits: | |||
| Non-interest bearing deposits | $394,653 | $369,683 | $322,343 |
| Interest bearing deposits | 3,020,674 | 3,510,026 | 3,294,314 |
| Total deposits | 3,415,327 | 3,879,709 | 3,616,657 |
| Borrowed funds | 190,392 | 190,388 | 250,374 |
| Other liabilities | 70,008 | 70,531 | 56,340 |
| Total liabilities | 3,675,727 | 4,140,628 | 3,923,371 |
| Commitments and Contingencies | |||
| Stockholders' Equity: | |||
| Preferred Stock -- $.01 par value | -- | -- | -- |
| Common Stock – $.01 par value | 827 | 826 | 824 |
| Additional paid-in capital | 782,423 | 362,685 | 358,719 |
| Unearned common stock held by employee stock ownership plan | (33,820) | (14,306) | (15,653) |
| Retained earnings | 365,309 | 360,058 | 344,497 |
| Accumulated other comprehensive loss, net | (19,747) | (22,663) | (17,316) |
| Treasury stock, at cost | (266) | (75,706) | (56,966) |
| Total stockholders' equity | 1,094,726 | 610,894 | 614,105 |
| Total Liabilities and Stockholders' Equity | $4,770,453 | $4,751,522 | $4,537,476 |
| BENEFICIAL BANCORP, INC. AND SUBSIDIARIES | |||
| Unaudited Consolidated Statements of Income | |||
| (Dollars in thousands, except per share amounts) | |||
| For the Three Months Ended | |||
| March 31, | December 31, | March 31, | |
| 2015 | 2014 | 2014 | |
| INTEREST INCOME: | |||
| Interest and fees on loans | $26,266 | $26,640 | $26,458 |
| Interest on overnight investments | 269 | 202 | 189 |
| Interest and dividends on investment securities: | |||
| Taxable | 7,910 | 7,081 | 7,795 |
| Tax-exempt | 498 | 526 | 662 |
| Total interest income | 34,943 | 34,449 | 35,104 |
| INTEREST EXPENSE: | |||
| Interest on deposits: | |||
| Interest bearing checking accounts | 423 | 510 | 443 |
| Money market and savings deposits | 1,307 | 1,344 | 1,329 |
| Time deposits | 1,833 | 1,888 | 2,001 |
| Total | 3,563 | 3,742 | 3,773 |
| Interest on borrowed funds | 1,247 | 1,461 | 1,801 |
| Total interest expense | 4,810 | 5,203 | 5,574 |
| Net interest income | 30,133 | 29,246 | 29,530 |
| Provision for loan losses | (2,000) | -- | 1,500 |
| Net interest income after provision for loan losses | 32,133 | 29,246 | 28,030 |
| NON-INTEREST INCOME: | |||
| Insurance and advisory commission and fee income | 1,986 | 1,552 | 2,081 |
| Service charges and other income | 3,507 | 3,957 | 3,201 |
| Mortgage banking income | 127 | 133 | 125 |
| Net (loss)/gain on sale of investment securities | (5) | (4) | 204 |
| Total non-interest income | 5,615 | 5,638 | 5,611 |
| NON-INTEREST EXPENSE: | |||
| Salaries and employee benefits | 15,492 | 15,162 | 15,010 |
| Occupancy expense | 2,797 | 2,069 | 3,618 |
| Depreciation, amortization and maintenance | 2,301 | 2,155 | 2,477 |
| Marketing expense | 1,316 | 454 | 885 |
| Intangible amortization expense | 466 | 469 | 467 |
| FDIC insurance | 548 | 538 | 783 |
| Professional fees | 1,555 | 574 | 1,355 |
| Classified loan and other real estate owned related expense | 292 | 547 | 342 |
| Other | 5,724 | 6,790 | 6,297 |
| Total non-interest expense | 30,491 | 28,758 | 31,234 |
| Income before income taxes | 7,257 | 6,126 | 2,407 |
| Income tax expense (benefit) | 2,006 | 1,664 | (65) |
| NET INCOME | $5,251 | $4,462 | $2,472 |
| EARNINGS PER SHARE – Basic | $0.07 | $0.06 | $0.03 |
| EARNINGS PER SHARE – Diluted | $0.07 | $0.06 | $0.03 |
| Average common shares outstanding – Basic (1) | 78,454,187 | 80,114,418 | 81,657,746 |
| Average common shares outstanding – Diluted (1) | 79,073,032 | 80,804,452 | 82,267,880 |
| (1) As a result of the second-step conversion, all prior period share information has been subsequently revised to reflect the 1.0999 exchange ratio. |
| BENEFICIAL BANCORP, INC. AND SUBSIDIARIES | ||||||
| Selected Consolidated Financial and Other Data (Unaudited) | ||||||
| (Dollars in thousands) | ||||||
| For the Three Months Ended | ||||||
| March 31, 2015 | December 31, 2014 | March 31, 2014 | ||||
| Average | Yield / | Average | Yield / | Average | Yield / | |
| Balance | Rate | Balance | Rate | Balance | Rate | |
| Investment Securities: | $1,934,271 | 1.79% | $1,752,525 | 1.78% | $1,871,670 | 1.85% |
| Overnight investments | 430,391 | 0.25% | 316,250 | 0.25% | 304,284 | 0.25% |
| Stock | 8,833 | 20.78% | 10,318 | 4.01% | 17,412 | 3.51% |
| Other Investment securities | 1,495,047 | 2.13% | 1,425,957 | 2.10% | 1,549,974 | 2.14% |
| Loans: | 2,449,445 | 4.31% | 2,407,457 | 4.38% | 2,319,600 | 4.58% |
| Residential | 676,032 | 4.33% | 632,067 | 4.69% | 678,385 | 4.55% |
| Commercial Real Estate | 650,686 | 4.59% | 666,791 | 4.34% | 550,853 | 4.73% |
| Business and Small Business | 494,773 | 3.99% | 471,704 | 4.22% | 440,560 | 4.67% |
| Personal Loans | 627,954 | 4.23% | 636,895 | 4.25% | 649,802 | 4.42% |
| Total Interest Earning Assets | $4,383,716 | 3.20% | $4,159,982 | 3.29% | $4,191,270 | 3.36% |
| Deposits: | $3,165,515 | 0.46% | $3,270,383 | 0.45% | $3,319,497 | 0.46% |
| Savings | 1,122,098 | 0.35% | 1,131,239 | 0.35% | 1,131,997 | 0.35% |
| Money Market | 426,792 | 0.33% | 427,445 | 0.32% | 445,960 | 0.32% |
| Demand | 796,491 | 0.20% | 804,516 | 0.22% | 675,145 | 0.21% |
| Demand - Municipals | 145,307 | 0.11% | 216,814 | 0.12% | 337,899 | 0.12% |
| Total Core Deposits | 2,490,688 | 0.28% | 2,580,014 | 0.28% | 2,591,001 | 0.28% |
| Time Deposits | 674,827 | 1.10% | 690,369 | 1.09% | 728,496 | 1.11% |
| Borrowings | 190,456 | 2.65% | 211,255 | 2.74% | 250,439 | 2.92% |
| Total Interest Bearing Liabilities | $3,355,971 | 0.58% | $3,481,638 | 0.59% | $3,569,936 | 0.63% |
| Non-interest bearing deposits | 366,686 | 358,793 | 304,283 | |||
| Net interest margin | 2.75% | 2.79% | 2.82% | |||
| ASSET QUALITY INDICATORS | March 31, | December 31, | March 31, |
| (Dollars in thousands) | 2015 | 2014 | 2014 |
| Non-performing assets: | |||
| Non-accruing loans | $14,112 | $14,615 | $48,127 |
| Accruing loans past due 90 days or more | 24,072 | 25,296 | 20,236 |
| Total non-performing loans | 38,184 | 39,911 | 68,363 |
| Real estate owned | 1,406 | 1,578 | 4,039 |
| Total non-performing assets | $39,590 | $41,489 | $72,402 |
| Non-performing loans to total loans | 1.43% | 1.65% | 2.94% |
| Non-performing assets to total assets | 0.83% | 0.87% | 1.60% |
| Non-performing assets less accruing government guaranteed student loans past due 90 days or more to total assets | 0.33% | 0.34% | 1.15% |
| ALLL to total loans | 1.84% | 2.09% | 2.32% |
| ALLL to non-performing loans | 128.70% | 126.92% | 79.08% |
| ALLL to non-performing loans, excluding government guaranteed student loans | 348.24% | 346.59% | 112.33% |
Impaired loan charge-offs as a percentage of the unpaid principal balances at March 31, 2015 are as follows:
| IMPAIRED LOANS: | ||||
| At March 31, 2015 (Dollars in thousands) |
Recorded Investment |
Unpaid Principal Balance |
Life-to-Date Charge offs |
% of Unpaid Principal Balance |
| Impaired loans by category: | ||||
| Commercial real estate | $3,074 | $3,113 | ($39) | 1.25% |
| Commercial business | 2,149 | 2,483 | (334) | 13.45% |
| Commercial construction | 305 | 305 | -- | -- |
| Residential real estate | 8,179 | 8,749 | (570) | 6.52% |
| Residential construction | 265 | 473 | (208) | 43.97% |
| Consumer | 1,674 | 1,684 | (10) | 0.59% |
| Total impaired loans | $15,646 | $16,807 | ($1,161) | 6.91% |
The impaired loans table above includes $1.5 million of accruing TDRs that were modified during 2015 and are performing in accordance with their modified terms.
Key performance ratios (annualized) are as follows for the quarter and year ended (unaudited):
| For the Three Months Ended | |||
| March 31, | December 31, | March 31, | |
| 2015 | 2014 | 2014 | |
| PERFORMANCE RATIOS: | |||
| (annualized) | |||
| Return on average assets | 0.45% | 0.39% | 0.23% |
| Return on average equity | 2.30% | 2.83% | 1.70% |
| Net interest margin | 2.75% | 2.79% | 2.82% |
| Efficiency ratio | 85.29% | 82.44% | 88.88% |
| Tangible common equity | 20.83% | 10.44% | 10.99% |