PHILADELPHIA, Oct. 25, 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 nine months ended September 30, 2012.
Beneficial recorded net income of $4.1 million, or $0.05 per diluted share, for the three months ended September 30, 2012 which was flat to net income of $4.1 million, or $0.05 per diluted share, recorded for the three months ended September 30, 2011. Net income for the nine months ended September 30, 2012 totaled $10.4 million, or $0.13 per diluted share, compared to $5.2 million, or $0.07 per diluted share, for the nine months ended September 30, 2011. Net income for the nine months ended September 30, 2012 included $2.7 million of merger and restructuring charges related to the acquisition of SE Financial Corp., the parent holding company of St. Edmond's Federal Savings Bank. Net income for the nine months ended September 30, 2011 included $5.1 million of restructuring charges related to the implementation of our expense management reduction program.
Credit costs have decreased during the three and nine months ended September 30, 2012 from the same periods in 2011 but continue to have a significant impact on our financial results. During the three and nine months ended September 30, 2012, the Bank recorded a provision for credit losses in the amount of $7.0 million and $22.0 million, respectively, compared to a provision of $9.0 million and $29.0 million for the three and nine months ended September 30, 2011, respectively. We continue to make progress reducing our non-performing asset levels. At September 30, 2012 our nonperforming assets were $123.4 million, representing a decrease of $30.7 million, or 19.9%, and $40.1 million, or 24.5%, from $154.1 million and $163.5 million at December 31, 2011 and September 30, 2011, respectively. We also have increased our reserves and at September 30, 2012, the Company's allowance for loan losses totaled $55.8 million, or 2.24% 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 and 2013 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 $803 thousand and $2.3 million for the three and nine months ended September 30, 2012, respectively, compared to $275 thousand and $371 thousand for the same periods in 2011.
Gerard Cuddy, Beneficial's President and CEO, stated, "We are encouraged by the improvement in our asset quality metrics as we experienced a 24.5% decrease in our non-performing assets at September 30, 2012 compared to a year ago. Earnings growth has been difficult given the slow growing economy and the lack of loan demand in our markets. We expect that the continued low interest rate environment will put pressure on net interest margin in future periods. We remain focused on increasing profitability, reducing our non-performing asset levels and growing our retail and commercial customer base."
Highlights for the three months and nine months ended September 30, 2012:
- Asset quality metrics continued to improve during the quarter with non-performing loans, excluding student loans, decreasing $30.5 million, or 28.2%, to $77.4 million from $107.9 million at December 31, 2011 and $41.5 million, or 34.9%, from $118.9 million at September 30, 2011. Our non-performing assets ratio, excluding student loans, improved to 2.09% at September 30, 2012 compared to 2.73% at December 31, 2011 and 2.98% at September 30, 2011.
- Our mortgage banking team that was established in 2011 continued to positively impact our non-interest income as we recorded mortgage banking income of $803 thousand and $2.3 million, respectively, for the three and nine months ended September 30, 2012.
- We continue to strengthen our balance sheet and, at September 30, 2012, our allowance for loan losses totaled $55.8 million, or 2.24% of total loans, compared to $55.6 million, or 2.14% of total loans, at June 30, 2012, and $54.2 million, or 2.10% of total loans, at December 31, 2011. Excluding 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 was 2.39% at September 30, 2012.
- Total deposits, which includes deposits acquired from SE Financial Corp., increased $251.2 million, or 7.0%, to $3.8 billion during the nine months ended September 30, 2012.
- The Company repurchased 329,000 shares during the quarter which increased total treasury shares to 2,981,629 at September 30, 2012.
Balance Sheet
Total assets increased $222.6 million, or 4.8%, to $4.8 billion at September 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 $112.1 million to $460.1 million at September 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 agency eligible mortgage loans totaling approximately $31.7 million for the three months ended September 30, 2012.
Investments increased $172.1 million, or 12.5%, to $1.5 billion at September 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 decreased $84.4 million, or 3.3%, to $2.5 billion at September 30, 2012 from $2.6 billion at December 31, 2011. Despite the addition of $174.8 million of loans acquired from SE Financial Corp., our loan portfolio has decreased as a result of a number of large commercial loan repayments, continued weak loan demand, and our decision to sell all agency eligible mortgage loans to better position the Company's balance sheet for interest rate risk. During the nine months ended September 30, 2012, we sold approximately $92.1 million of residential mortgage loans originated during 2012 and recorded mortgage banking income of $2.3 million related to these loan sales.
Deposits increased $251.2 million, or 7.0%, to $3.8 billion at September 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 nine months ended September 30, 2012, municipal deposits decreased $90.1 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 a $150.1 million, or 7.3%, increase in our core deposits, particularly savings products and business checking accounts, which increased $133.1 million and $59.9 million, respectively.
At September 30, 2012, stockholders' equity increased to $636.3 million, or 13.2% 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 September 30, 2012, Beneficial reported net interest income of $35.6 million, an increase of $738 thousand, or 2.1%, from the three months ended September 30, 2011. The increase in net interest income during the three months ended September 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. Our net interest margin decreased, totaling 3.16% for the three months ended September 30, 2012 as compared to 3.21% for the three months ended September 30, 2011. The net interest margin for the quarter included a number of large prepayment fees which benefited the net interest margin by 7 basis points. 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, which will put pressure on net interest margin in future periods.
For the nine months ended September 30, 2012, Beneficial reported net interest income of $106.2 million, a decrease of $1.1 million, or 1.0%, from the nine months ended September 30, 2011. The decrease in net interest income during the nine months ended September 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. As part of the decision to shrink the balance sheet, the Bank has 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 3.21% for the nine months ended September 30, 2012 as compared to 3.22% for the nine months ended September 30, 2011, largely due to our efforts to re-price deposits.
We have been able to lower the cost of our liabilities to 0.80% and 0.85% for the three and nine months ended September 30, 2012, respectively, compared to 0.98% and 1.02% for the three and nine months ended September 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 September 30, 2012, non-interest income totaled $6.9 million, an increase of $570 thousand, or 9.0%, from the three months ended September 30, 2011. The increase was primarily due to increases in mortgage banking income and security gains offset by lower income on certain low income housing partnerships.
For the nine months ended September 30, 2012, non-interest income totaled $20.8 million, an increase of $2.6 million, or 14.4%, from the nine months ended September 30, 2011. The increase was primarily due to a $1.9 million increase in mortgage banking income recognized during 2012 in connection with the sale of mortgages and a $1.2 million increase in the gain on the sale of investment securities, partially offset by a $383 thousand decrease in income from insurance and advisory income.
Non-interest Expense
For the three months ended September 30, 2012, non-interest expense totaled $30.3 million, an increase of $2.1 million, or 7.3%, from the three months ended September 30, 2011. The increase in non-interest expense was primarily due to increases in salaries and benefits as a result of the SE Financial Corp. acquisition and the expansion of our credit function as well as higher other real estate owned and loan expenses.
For the nine months ended September 30, 2012, non-interest expense totaled $92.7 million, an increase of $1.2 million, or 1.3%, from the nine months ended September 30, 2011. The increase in non-interest expense was primarily due to an increase in salaries and benefits and in other real estate owned expense and loan expenses offset by reductions in restructuring charges and FDIC insurance.
Asset Quality
Asset quality metrics showed continued signs of improvement during the nine months ended September 30, 2012. Non-performing loans, including loans 90 days past due and still accruing, decreased to $101.1 million at September 30, 2012, compared to $136.3 million at December 31, 2011 and $144.4 million at September 30, 2011. Non-performing loans at September 30, 2012 included $22.9 million of government guaranteed student loans, which represented 22.6% of total non-performing loans. Net charge-offs for the three months ended September 30, 2012 were $6.8 million, compared to $7.0 million for the three months ended June 30, 2012 and $8.4 million for the three months ended December 31, 2011. At September 30, 2012, the Company's allowance for loan losses totaled $55.8 million, or 2.24% 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 September 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 September 30, 2012 compared to June 30, 2012 and December 31, 2011, as well as our excess capital over regulatory minimums as of September 30, 2012 to be considered well capitalized, are as follows:
|
9/30/2012 |
6/30/2012 |
12/31/2011 |
Minimum Well Capitalized Ratio |
Excess Capital 9/30/2012 |
|
| Tangible Capital | 10.73% | 10.53% | 11.30% | ||
| Tier 1 Capital (to average assets) | 9.74% | 9.67% | 9.67% | 5% | $221,060 |
| Tier 1 Capital (to risk weighted assets) | 19.22% | 18.36% | 18.09% | 6% | $312,430 |
| Total Capital (to risk weighted assets) | 20.49% | 19.62% | 19.35% | 10% | $247,860 |
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) | ||||
|
September 30, 2012 |
June 30, 2012 |
December 31, 2011 |
September 30, 2011 |
|
| ASSETS: | ||||
| Cash and Cash Equivalents: | ||||
| Cash and due from banks | $40,234 | $51,773 | $41,130 | $38,029 |
| Interest-bearing deposits | 419,905 | 382,240 | 306,826 | 360,051 |
| Total cash and cash equivalents | 460,139 | 434,013 | 347,956 | 398,080 |
| Investment Securities: | ||||
| Available-for-sale | 1,031,188 | 1,053,597 | 875,011 | 814,857 |
| Held-to-maturity | 499,871 | 419,454 | 482,695 | 414,319 |
| Federal Home Loan Bank stock, at cost | 17,683 | 19,433 | 18,932 | 19,929 |
| Total investment securities | 1,548,742 | 1,492,484 | 1,376,638 | 1,249,105 |
| Loans: | 2,491,740 | 2,599,535 | 2,576,129 | 2,687,415 |
| Allowance for loan losses | (55,840) | (55,621) | (54,213) | (54,120) |
| Net loans | 2,435,900 | 2,543,914 | 2,521,916 | 2,633,295 |
| Accrued Interest Receivable | 16,537 | 16,267 | 16,401 | 16,685 |
| Bank Premises and Equipment, net | 62,194 | 62,446 | 59,913 | 60,199 |
| Other Assets: | ||||
| Goodwill | 122,410 | 122,646 | 110,486 | 110,486 |
| Bank owned life insurance | 40,208 | 39,850 | 35,277 | 34,901 |
| Other intangibles | 11,168 | 12,085 | 13,334 | 14,244 |
| Other assets | 121,369 | 127,532 | 114,183 | 115,613 |
| Total other assets | 295,155 | 302,113 | 273,280 | 275,244 |
| Total Assets | $4,818,667 | $4,851,237 | $4,596,104 | $4,632,608 |
| LIABILITIES AND STOCKHOLDERS' EQUITY: | ||||
| Liabilities: | ||||
| Deposits: | ||||
| Non-interest bearing deposits | $305,093 | $322,411 | $278,968 | $276,035 |
| Interest bearing deposits | 3,540,955 | 3,523,320 | 3,315,834 | 3,325,662 |
| Total deposits | 3,846,048 | 3,845,731 | 3,594,802 | 3,601,697 |
| Borrowed funds | 250,348 | 285,344 | 250,335 | 250,330 |
| Other liabilities | 85,962 | 88,710 | 121,587 | 152,088 |
| Total liabilities | 4,182,358 | 4,219,785 | 3,966,724 | 4,004,115 |
| Commitments and Contingencies | ||||
| Stockholders' Equity: | ||||
| Preferred Stock -- $.01 par value | -- | -- | -- | -- |
| Common Stock – $.01 par value | 823 | 823 | 823 | 823 |
| Additional paid-in capital | 353,049 | 352,112 | 351,107 | 349,994 |
| Unearned common stock held by | ||||
| employee stock ownership plan | (18,216) | (18,534) | (19,856) | (20,306) |
| Retained earnings (partially restricted) | 325,632 | 321,537 | 315,268 | 309,391 |
| Accumulated other comprehensive income (loss), net | 569 | (1,892) | (1,162) | 4,516 |
| Treasury stock, at cost | (25,548) | (22,594) | (16,800) | (15,925) |
| Total stockholders' equity | 636,309 | 631,452 | 629,380 | 628,493 |
| Total Liabilities and Stockholders' Equity | $4,818,667 | $4,851,237 | $4,596,104 | $4,632,608 |
| BENEFICIAL MUTUAL BANCORP, INC. AND SUBSIDIARIES | |||||
| Unaudited Consolidated Statements of Operations | |||||
| (Dollars in thousands, except per share amounts) | |||||
| For the Three Months Ended | For the Nine Months Ended | ||||
| September 30, 2012 | June 30, 2012 | September 30, 2011 | September 30, 2012 | September 30, 2011 | |
| INTEREST INCOME: | |||||
| Interest and fees on loans | $34,207 | $34,304 | $34,577 | $100,820 | $106,013 |
| Interest on overnight investments | 247 | 180 | 254 | 588 | 603 |
| Interest on trading securities | -- | -- | -- | -- | 26 |
| Interest and dividends on investment securities: | |||||
| Taxable | 8,022 | 9,239 | 8,286 | 26,424 | 27,210 |
| Tax-exempt | 732 | 740 | 849 | 2,264 | 2,764 |
| Total interest income | 43,208 | 44,463 | 43,966 | 130,096 | 136,616 |
| INTEREST EXPENSE: | |||||
| Interest on deposits: | |||||
| Interest bearing checking accounts | 1,054 | 1,344 | 1,562 | 3,602 | 6,187 |
| Money market and savings deposits | 2,124 | 2,279 | 2,300 | 6,525 | 6,998 |
| Time deposits | 2,374 | 2,542 | 3,173 | 7,506 | 9,646 |
| Total | 5,552 | 6,165 | 7,035 | 17,633 | 22,831 |
| Interest on borrowed funds | 2,087 | 2,132 | 2,100 | 6,275 | 6,506 |
| Total interest expense | 7,639 | 8,297 | 9,135 | 23,908 | 29,337 |
| Net interest income | 35,569 | 36,166 | 34,831 | 106,188 | 107,279 |
| Provision for loan losses | 7,000 | 7,500 | 9,000 | 22,000 | 29,000 |
| Net interest income after provision for loan losses | 28,569 | 28,666 | 25,831 | 84,188 | 78,279 |
| NON-INTEREST INCOME: | |||||
| Insurance and advisory commission and fee income | 2,069 | 1,489 | 1,898 | 5,719 | 6,102 |
| Service charges and other income | 3,339 | 4,119 | 3,930 | 11,028 | 10,997 |
| Mortgage banking income | 803 | 590 | 275 | 2,267 | 371 |
| Net gain on sale of investment securities | 659 | 675 | 197 | 1,775 | 616 |
| Trading securities profits | -- | -- | -- | -- | 81 |
| Total non-interest income | 6,870 | 6,873 | 6,300 | 20,789 | 18,167 |
| NON-INTEREST EXPENSE: | |||||
| Salaries and employee benefits | 14,638 | 14,722 | 13,960 | 43,685 | 42,452 |
| Occupancy expense | 2,478 | 2,434 | 2,610 | 7,375 | 8,338 |
| Depreciation, amortization and maintenance | 2,346 | 2,273 | 2,165 | 6,778 | 6,556 |
| Marketing expense | 870 | 932 | 951 | 2,684 | 2,720 |
| Intangible amortization expense | 916 | 1,046 | 908 | 2,874 | 2,674 |
| FDIC Insurance | 1,058 | 1,075 | 1,055 | 3,167 | 4,314 |
| Merger and Restructuring charges | -- | 2,737 | -- | 2,821 | 5,058 |
| Other | 7,971 | 7,637 | 6,575 | 23,360 | 19,411 |
| Total non-interest expense | 30,277 | 32,856 | 28,224 | 92,744 | 91,523 |
| Income before income taxes | 5,162 | 2,683 | 3,907 | 12,233 | 4,923 |
| Income tax expense (benefit) | 1,067 | 359 | (172) | 1,869 | (236) |
| NET INCOME | $4,095 | $2,324 | $4,079 | $10,364 | $5,159 |
| EARNINGS PER SHARE – Basic | $0.05 | $0.03 | $0.05 | $0.14 | $0.07 |
| EARNINGS PER SHARE – Diluted | $0.05 | $0.03 | $0.05 | $0.13 | $0.07 |
| Average common shares outstanding – Basic | 76,392,719 | 76,838,141 | 77,132,264 | 76,757,667 | 77,077,506 |
| Average common shares outstanding – Diluted | 76,541,190 | 77,007,093 | 77,244,916 | 76,922,357 | 77,250,785 |
| BENEFICIAL MUTUAL BANCORP, INC. AND SUBSIDIARIES | ||||||||
| Selected Consolidated Financial and Other Data of the Company (Unaudited) | ||||||||
| (Dollars in thousands) | ||||||||
| Three Months Ended | Nine Months Ended | |||||||
| September 30, 2012 | September 30, 2011 | September 30, 2012 | September 30, 2011 | |||||
| Average Balance | Yield /Rate | Average Balance | Yield /Rate | Average Balance | Yield /Rate | Average Balance | Yield /Rate | |
| Investment Securities: | $ 1,944,653 | 1.85% | $ 1,627,254 | 2.31% | $ 1,814,297 | 2.15% | $ 1,700,471 | 2.40% |
| Trading Securities | -- | 0.00% | -- | 0.00% | -- | 0.00% | 2,976 | 1.19% |
| Overnight investments | 388,587 | 0.25% | 397,463 | 0.25% | 311,467 | 0.25% | 318,099 | 0.25% |
| Stock | 18,217 | 0.11% | 20,248 | 0.00% | 18,817 | 0.11% | 21,435 | 0.03% |
| Other Investment securities | 1,537,849 | 2.28% | 1,209,543 | 3.02% | 1,484,013 | 2.58% | 1,357,961 | 2.94% |
| Loans: | 2,545,970 | 5.36% | 2,708,194 | 5.09% | 2,595,984 | 5.18% | 2,749,367 | 5.15% |
| Residential | 669,463 | 5.21% | 678,447 | 4.92% | 661,160 | 4.97% | 691,976 | 4.93% |
| Commercial Real Estate | 679,935 | 5.47% | 765,834 | 4.97% | 711,146 | 5.28% | 774,691 | 5.09% |
| Business and Small Business | 472,741 | 6.47% | 505,706 | 5.65% | 488,855 | 5.97% | 514,807 | 5.66% |
| Personal Loans | 723,831 | 4.66% | 758,207 | 4.98% | 734,823 | 4.75% | 767,893 | 5.06% |
| Total Interest Earning Assets | $ 4,490,623 | 3.84% | $ 4,335,448 | 4.05% | $ 4,410,281 | 3.93% | $ 4,449,838 | 4.10% |
| Deposits: | $3,547,447 | 0.62% | $3,438,916 | 0.81% | $3,476,675 | 0.68% | $3,570,013 | 0.86% |
| Savings | 995,520 | 0.55% | 764,729 | 0.65% | 920,172 | 0.58% | 733,744 | 0.67% |
| Money Market | 531,034 | 0.56% | 594,802 | 0.69% | 538,420 | 0.63% | 610,703 | 0.72% |
| Demand | 605,490 | 0.30% | 440,133 | 0.21% | 565,592 | 0.28% | 422,689 | 0.23% |
| Demand - Municipals | 596,979 | 0.40% | 764,812 | 0.69% | 626,314 | 0.51% | 912,305 | 0.80% |
| Total Core Deposits | 2,729,023 | 0.46% | 2,564,476 | 0.60% | 2,650,498 | 0.51% | 2,679,441 | 0.66% |
| Time Deposits | 818,424 | 1.15% | 874,440 | 1.44% | 826,177 | 1.21% | 890,572 | 1.46% |
| Borrowings | 273,661 | 3.03% | 250,328 | 3.33% | 264,465 | 3.17% | 257,368 | 3.38% |
| Total Interest Bearing Liabilities | $3,821,108 | 0.80% | $3,689,244 | 0.98% | $3,741,140 | 0.85% | $3,827,381 | 1.02% |
| Non-interest bearing deposits | 308,144 | 275,650 | 297,768 | 280,332 | ||||
| Net interest margin | 3.16% | 3.21% | 3.21% | 3.22% | ||||
| ASSET QUALITY INDICATORS | ||||
| (Dollars in thousands) | September 30, 2012 | June 30, 2012 | December 31, 2011 | September 30, 2011 |
| Non-performing assets: | ||||
| Non-accruing loans* | $77,428 | $88,406 | $107,907 | $118,901 |
| Accruing loans past due 90 days or more** | 23,710 | 22,269 | 28,423 | 25,515 |
| Total non-performing loans*** | 101,138 | 110,675 | 136,330 | 144,416 |
| Real estate owned | 22,290 | 22,806 | 17,775 | 19,058 |
| Total non-performing assets | $123,428 | $133,481 | $154,105 | $163,474 |
| Non-performing loans to total loans | 4.06% | 4.26% | 5.29% | 5.37% |
| Non-performing assets to total assets | 2.56% | 2.75% | 3.35% | 3.53% |
| Non-performing assets less accruing student loans | ||||
| past due 90 days or more to total assets | 2.09% | 2.31% | 2.73% | 2.98% |
| ALLL to total loans | 2.24% | 2.14% | 2.10% | 2.01% |
| ALLL to non-performing loans | 55.21% | 50.26% | 39.77% | 37.48% |
| ALLL to non-performing loans (excluding student loans) | 71.35% | 62.48% | 50.24% | 45.52% |
* Non-accruing loans at September 30, 2012 and June 30, 2012 do not include $3.1 million and $3.5 million, respectively, of loans acquired with deteriorated credit quality, which have been recorded at their fair value at acquisition and are performing as expected.
** Includes $22.9 million, $21.6 million, $28.4 million and $25.5 million in government guaranteed student loans as of September 30, 2012, June 30, 2012, December 31, 2011 and September 30, 2011, respectively.
*** Includes $11.5 million, $14.5 million, $22.2 million and $26.5 million of troubled debt restructured loans (TDRs) as of September 30, 2012, June 30, 2012, December 31, 2011 and September 30, 2011, respectively.
Impaired loan charge offs as a percentage of the unpaid principal balances at September 30, 2012 are as follows:
| IMPAIRED LOANS: | ||||
| At September 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 | $25,804 | $38,260 | ($12,456) | 32.56% |
| Commercial Business | 17,229 | 22,837 | (5,608) | 24.56% |
| Commercial Construction | 19,061 | 33,400 | (14,339) | 42.93% |
| Residential Real Estate | 12,540 | 13,261 | (721) | 5.44% |
| Residential Construction | 797 | 797 | -- | 0.00% |
| Consumer Personal | 1,997 | 2,166 | (169) | 7.80% |
| Total Impaired Loans | $77,428 | $110,721 | ($33,293) | 30.07% |
The impaired loans table above does not include $3.1 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 nine month periods indicated:
| For the Three Months Ended | For the Nine Months Ended | ||||
| September 30, | June 30, | December 31, | September 30, | ||
| 2012 | 2012 | 2011 | 2012 | 2011 | |
| PERFORMANCE RATIOS: | |||||
| (annualized) | |||||
| Return on average assets | 0.33% | 0.20% | 0.49% | 0.29% | 0.14% |
| Return on average equity | 2.54% | 1.51% | 3.68% | 2.20% | 1.13% |
| Net interest margin | 3.16% | 3.21% | 3.23% | 3.21% | 3.22% |
| Efficiency ratio | 71.34% | 76.34% | 69.80% | 73.04% | 72.91% |
| Tangible Common Equity | 10.73% | 10.53% | 11.30% | 10.73% | 11.18% |