Beneficial Bancorp, Inc. Announces Third Quarter Results and Cash Dividend to Shareholders

PHILADELPHIA, Oct. 21, 2016 (GLOBE NEWSWIRE) — Beneficial Bancorp, Inc. (“Beneficial”) (NASDAQ:BNCL), the parent company of Beneficial Bank (the “Bank”), today announced its financial results for the three and nine months ended September 30, 2016.  Beneficial recorded net income of $10.1 million and $17.8 million, or $0.14 and $0.24 per diluted share, for the three and nine months ended September 30, 2016, respectively, compared to net income of $5.8 million and $18.1 million, or $0.07 and $0.23 per diluted share, for the three and nine months ended September 30, 2015.  Net income for nine months ended September 30, 2016 included $8.8 million of merger and restructuring charges related to the acquisition of Conestoga Bank and the Bank’s previously announced expense management reduction program.

On October 21, 2016, Beneficial Bancorp declared a cash dividend of 6 cents per share, payable on or after November 10, 2016, to common shareholders of record at the close of business on October 31, 2016.

Highlights for the three and nine months ended September 30, 2016 are as follows:

  • Net interest margin totaled 3.08% and 3.00% for the quarter and nine months ended September 30, 2016 compared to 2.82% and 2.80% for the same period in 2015, respectively.  Margin has benefited from organic loan growth, the impact of the Conestoga Bank acquisition, and continued improvement in the mix of our balance sheet.
  • For the nine months ended September 30, 2016, net interest income increased $18.5 million, or 20.0%, to $111.0 million compared to $92.5 million for the same period in 2015, primarily due to the Conestoga Bank acquisition and organic loan growth.
  • For the nine months ended September 30, 2016, our loan portfolio increased $946.5 million, or 32.2%, due primarily to the acquisition of Conestoga Bank loans of $516.3 million (17.6% growth), net organic growth of $312.7 million (10.6% growth since year-end and 14.2% annualized), and the purchase of $117.5 million of commercial real estate loans (4.0% growth).
     
  • For the three and nine months ended September 30, 2016, non-interest income included a gain of $1.8 million on the sale of investments.
     
  • Asset quality metrics continued to remain strong during the quarter with non-performing assets, excluding government-guaranteed student loans, to total assets of 0.26% as of September 30, 2016.  Net charge-offs for the three and nine months ended September 30, 2016 totaled $54 thousand, or 1 basis point of average loans, and $1.0 million, or 4 basis points of average loans, compared to net charge-offs of $118 thousand, or 2 basis points of average loans, and net recoveries of $620 thousand, or 3 basis points of average loans, in the comparable periods in the prior year.  Our allowance for loan losses totaled $44.5 million, or 1.14% of total loans, as of September 30, 2016 compared to $45.5 million, or 1.55% of total loans, as of December 31, 2015.  The decrease in the coverage ratio is primarily due to improvement in credit quality and the $516.3 million of loans at fair value acquired from Conestoga Bank.
     
  • We continue to deploy our capital from the second step conversion we completed in January 2015.  Our tangible capital to tangible assets decreased to 15.70% at September 30, 2016 compared to 21.04% at December 31, 2015.  The decrease in this ratio can be attributed to share repurchases and the impact of the acquisition of Conestoga Bank.  Tangible book value per share totaled $11.13 at September 30, 2016.
     
  • During the quarter we launched a 9-week advertising campaign with a focus on our heritage and dedication to Philadelphia, our values, and our guiding philosophy to always do what’s right.  It also introduced our refreshed tagline, “True to our name.  Since 1853.”  The campaign is featured on television, radio, outdoor, digital, transit, and social media throughout the Delaware Valley. 

Gerard Cuddy, Beneficial’s President and CEO, stated “We continued to make progress with our strategic priorities during the quarter. We organically grew our loan portfolio, improved our balance sheet mix, and maintained strong asset quality metrics.  Our focus remains on employee engagement, a superior customer experience, prudent capital management and organic growth to continue to improve Beneficial’s financial performance.”

Balance Sheet
Total assets increased $753.7 million, or 15.6%, to $5.58 billion at September 30, 2016 compared to $4.83 billion at December 31, 2015.  The increase in total assets was primarily due to the $649.7 million of assets acquired as part of the acquisition of Conestoga Bank and strong organic loan growth. 

Cash and cash equivalents decreased $47.9 million to $186.0 million at September 30, 2016 from $233.9 million at December 31, 2015.  The decrease in cash and cash equivalents was primarily driven by repurchases of our common stock, and the $105.0 million paid to acquire Conestoga Bank.

Investments decreased $228.9 million, or 16.8%, to $1.13 billion at September 30, 2016 compared to $1.36 billion at December 31, 2015, as we continued to focus on improving our balance sheet mix by reducing the percentage of our assets in cash and investments and growing 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 $946.5 million, or 32.2%, to $3.89 billion at September 30, 2016 from $2.94 billion at December 31, 2015.  The increase in loans was primarily due to the acquisition of Conestoga Bank loans of $516.3 million, net organic growth of $312.7 million and the purchase of $117.5 million of commercial real estate loans.

Deposits increased $611.5 million, or 17.7%, to $4.06 billion at September 30, 2016 from $3.45 billion at December 31, 2015.  The $611.5 million increase in deposits during the nine months ended September 30, 2016 was primarily due to the $588.4 million of deposits acquired as part of the acquisition of Conestoga Bank.

Borrowings increased $225.0 million to $415.4 million at September 30, 2016 and are being used as a low cost funding source to replace higher cost brokered CD’s and fund organic loan growth.

Stockholders’ equity decreased $92.3 million, or 8.3%, to $1.02 billion at September 30, 2016 from $1.12 billion at December 31, 2015.  The decrease in stockholders’ equity was primarily due to the repurchase of 9,282,948 shares of common stock during the nine months ended September 30, 2016, partially offset by net income for the first nine months of 2016.   During the second quarter of 2016, Beneficial completed its first share repurchase program since completing its mutual-to-stock conversion and related stock offering in January 2015. Under the first program, Beneficial repurchased 8,291,859 shares.  On July 21, 2016, Beneficial Bancorp adopted a second stock repurchase program for up to 10% of its outstanding common stock, or 7,770,978 shares. During the third quarter, the Company purchased 882,100 shares under the second stock repurchase plan.

Net Interest Income
For the three months ended September 30, 2016, net interest income was $40.0 million, an increase of $8.9 million, or 28.4%, from the three months ended September 30, 2015. The increase in net interest income was primarily due to the impact of the Conestoga Bank acquisition as well as improvement in our balance sheet mix and related interest earning assets with growth occurring in our higher yielding loan portfolio and reductions in cash and investment levels.  The net interest margin totaled 3.08% for the three months ended September 30, 2016 as compared to 2.82% for the same period in 2015.

For the nine months ended September 30, 2016, Beneficial reported net interest income of $111.0 million, an increase of $18.5 million, or 20.0%, from the nine months ended September 30, 2015. The increase in net interest income was primarily due to the acquisition of Conestoga Bank, organic loan growth and improvement in our balance sheet mix. Our net interest margin increased to 3.00% for the nine months ended September 30, 2016 from 2.80% for the same period in 2015.

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 continuing to improve our balance sheet mix to help stabilize our net interest margin.

Non-interest Income
For the three months ended September 30, 2016, non-interest income totaled $8.2 million, an increase of $2.4 million, or 41.3%, from the three months ended September 30, 2015.  The increase was primarily due to a $1.8 million investment gain from the sale of stock that we held in a financial institution that was acquired, and a $493 thousand swap fee earned on a commercial real estate loan recorded during the third quarter of 2016.

For the nine months ended September 30, 2016, non-interest income totaled $19.6 million, an increase of $983 thousand, or 5.3%, from the nine months ended September 30, 2015. The increase during the nine months ended September 30, 2016 was primarily due to a $1.8 million investment gain from the sale of stock and a $493 thousand swap fee earned on a commercial real estate loan, partially offset by a $1.1 million gain recorded on a limited partnership investment in 2015.

Non-interest Expense
For the three months ended September 30, 2016, non-interest expense totaled $33.3 million, an increase of $5.0 million, or 17.6%, from the three months ended September 30, 2015.  The increase in non-interest expense was primarily due to a $2.0 million increase in salaries and employee benefits and an $830 thousand increase in board fees primarily due to stock based compensation associated with the shares granted under the 2016 Omnibus Incentive Plan. The increase in non-interest expense during the quarter ended September 30, 2016, can also be attributed a $529 thousand increase in professional fees primarily related to an online banking technology upgrade, a $415 thousand increase in loan expense and a $246 thousand increase in debit card reward expenses. These increases to non-interest expense were partially offset by a $694 thousand reduction of merger related expenses as final expenses were lower than estimated for professional fees, facility expenses and contract terminations, associated with the acquisition of Conestoga Bank.     

For the nine months ended September 30, 2016, non-interest expense totaled $103.6 million, an increase of $14.9 million, or 16.7%, from the nine months ended September 30, 2015. The increase in non-interest expense was primarily due to $7.2 million of merger and restructuring charges related to the acquisition of Conestoga Bank and $1.6 million related to our previously announced expense management reduction program.  In addition, salaries and employee benefits increased $3.0 million and board fees increased $873 thousand primarily due to stock based compensation associated with the shares granted under the 2016 Omnibus Incentive Plan.  The increase in non-interest expense can also be attributed to a $730 thousand increase in loan expenses, primarily due to commercial loan servicing, and a $505 thousand increase in debit card rewards expense.     

Income Taxes
For the three months ended September 30, 2016, we recorded a provision for income taxes of $4.9 million, reflecting an effective tax rate of 32.8%, compared to a provision for income taxes of $2.9 million, reflecting an effective tax rate of 32.9% for the three months ended September 30, 2015.  For the nine months ended September 30, 2016, we recorded a provision for income taxes of $9.1 million, reflecting an effective tax rate of 33.9%, compared to a provision for income taxes of $7.8 million, reflecting an effective tax rate of 30.1%, for the nine months ended September 30, 2015. The increase in income tax expense and the effective tax is due to higher pre-tax income and a lower ratio of tax exempt income compared to pre-tax income for the nine months ended September 30, 2016 as compared to the same period in 2015.

Asset Quality
Asset quality metrics remain strong as non-performing loans, excluding government guaranteed student loans, decreased to $13.2 million at September 30, 2016, compared to $14.8 million at December 31, 2015.  Our ratio of non-performing assets to total assets, excluding government guaranteed student loans, decreased to 0.26% at September 30, 2016 compared to 0.33% at December 31, 2015.

As a result of our strong asset quality metrics and low net charge-offs recorded in recent periods, we did not record a provision for loan losses during the three or nine months ended September 30, 2016. As a result of the improvement in our asset quality metrics and net recoveries received, we recorded no provision for loan losses for the three months ended September 30, 2015 and a $3.6 million negative provision for loan losses for the nine months ended September 30, 2015. Net charge-offs totaled $54 thousand during the three months ended September 30, 2016 compared to $118 thousand of net recoveries during the same period in 2015.

Our allowance for loan losses totaled $44.5 million, or 1.14% of total loans, as of September 30, 2016 compared to $44.5 million, or 1.17% of total loans, as of June 30, 2016 and $45.5 million, or 1.55% of total loans, as of December 31, 2015.  Excluding acquired loans that were recorded at fair value of $516.3 million as of the acquisition date; our loan loss reserves coverage ratio totaled 1.31% as of September 30, 2016.

Capital
Beneficial’s and the Bank’s capital position remains strong relative to current regulatory requirements. Beneficial and the Bank continue to have substantial liquidity that has been retained in cash or invested in high quality government-backed securities. As of September 30, 2016, Beneficial’s tangible capital to tangible assets totaled 15.70%. In addition, at September 30, 2016, we had the ability to borrow up to $1.9 billion combined from the Federal Home Loan Bank of Pittsburgh and the Federal Reserve Bank of Philadelphia. Beneficial’s capital ratios are considered to be well capitalized and are as follows:

                  Capital in Excess
              Minimum Well   of Minimum
  9/30/2016   12/31/2015   9/30/2015   Capitalized Ratio   9/30/2016
                   
Tier 1 Leverage (to average assets)   16.57 %     22.38 %     22.30 %     5.0 %   $ 622,129  
Common Equity Tier 1 Capital (to risk weighted assets)   21.93 %     33.36 %     37.12 %     6.5 %     610,037  
Tier 1 Capital (to risk weighted assets)   22.54 %     34.13 %     37.86 %     8.0 %     574,673  
Total Capital Ratio (to risk weighted assets)   23.67 %     35.38 %     39.12 %     10.0 %     540,430  

The Bank’s capital ratios are considered to be well capitalized and are as follows:

                    Capital in Excess
                Minimum Well   of Minimum
  9/30/2016   12/31/2015   9/30/2015     Capitalized Ratio   9/30/2016
                     
Tier 1 Leverage (to average assets)   14.96 %     16.86 %     16.79 %       5.0 %   $ 535,462  
Common Equity Tier 1 Capital (to risk weighted assets)   20.36 %     25.74 %     28.53 %       6.5 %     547,430  
Tier 1 Capital (to risk weighted assets)   20.36 %     25.74 %     28.53 %       8.0 %     488,188  
Total Capital Ratio (to risk weighted assets)   21.49 %     26.99 %     29.79 %       10.0 %     453,968  

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 63 offices in the greater Philadelphia and South New Jersey regions. Insurance services are offered through Beneficial Insurance Services, LLC and wealth management services are offered through the Beneficial Advisors, LLC, both wholly owned subsidiaries of the Bank. Equipment leasing services are offered through Beneficial Equipment Leasing Corporation, which is a wholly owned subsidiary 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, changes in the quality or composition of Beneficial’s loan or investment portfolios, our ability to successfully integrate the assets, liabilities, customers, systems and employees of Conestoga Bank into our operations and our ability to realize related revenue synergies and cost savings within expected time frames. 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)
 
    September 30,   June 30,   December 31,   September 30,
      2016       2016       2015       2015  
ASSETS:                
Cash and Cash Equivalents:                
Cash and due from banks   $ 49,507     $ 51,622     $ 43,978     $ 48,675  
Interest-bearing deposits     136,550       51,868       189,942       221,334  
Total cash and cash equivalents     186,057       103,490       233,920       270,009  
                 
Investment Securities:                
Available-for-sale     502,534       576,374       655,162       678,520  
Held-to-maturity     610,629       642,826       696,310       720,999  
Federal Home Loan Bank stock, at cost     18,231       16,431       8,786       8,786  
Total investment securities     1,131,394       1,235,631       1,360,258       1,408,305  
                 
Loans and leases:     3,887,909       3,798,493       2,941,446       2,756,346  
Allowance for loan and lease losses     (44,466 )     (44,519 )     (45,500 )     (47,674 )
Net loans and leases     3,843,443       3,753,974       2,895,946       2,708,672  
                 
Accrued interest receivable     16,832       16,314       14,298       14,327  
                 
Bank premises and equipment, net     76,656       77,842       73,213       77,751  
                 
Other assets:                
Goodwill     169,275       169,239       121,973       121,973  
Bank owned life insurance     79,959       79,612       64,827       65,001  
Other intangibles     5,025       5,605       4,389       4,865  
Other assets     71,752       72,382       57,871       57,261  
Total other assets     326,011       326,838       249,060       249,100  
Total assets   $ 5,580,393     $ 5,514,089     $ 4,826,695     $ 4,728,164  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY:                
Liabilities:                
Deposits:                
Non-interest bearing deposits   $ 511,460     $ 505,029     $ 409,232     $ 377,852  
Interest bearing deposits     3,551,993       3,535,542       3,042,691       2,975,514  
Total deposits     4,063,453       4,040,571       3,451,923       3,353,366  
Borrowed funds     415,419       370,414       190,405       190,401  
Other liabilities     78,274       76,788       68,821       72,649  
Total liabilities     4,557,146       4,487,773       3,711,149       3,616,416  
Commitments and contingencies                
Stockholders’ equity:                
Preferred stock – $.01 par value                        
Common stock – $.01 par value     833       832       829       829  
Additional paid-in capital     767,842       762,685       787,503       785,682  
Unearned common stock held by                
employee stock ownership plan     (30,163 )     (30,780 )     (32,014 )     (32,631 )
Retained earnings     396,361       390,722       382,951       378,201  
Accumulated other comprehensive loss, net     (18,255 )     (17,001 )     (23,374 )     (19,984 )
Treasury stock, at cost     (93,371 )     (80,142 )     (349 )     (349 )
Total stockholders’ equity     1,023,247       1,026,316       1,115,546       1,111,748  
Total liabilities and stockholders’ equity   $ 5,580,393     $ 5,514,089     $ 4,826,695     $ 4,728,164  
                 

BENEFICIAL BANCORP, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
 
  For the Three Months Ended   For the Nine Months Ended
  September 30,   June 30,   September 30,   September 30,   September 30,
    2016       2016       2015       2016       2015  
INTEREST INCOME:                  
Interest and fees on loans and leases $ 39,645     $ 37,743     $ 28,344     $ 107,378     $ 82,805  
Interest on overnight investments   167       161       167       588       593  
Interest and dividends on investment securities:                  
Taxable   5,900       6,166       7,105       18,425       22,231  
Tax-exempt   325       325       334       975       1,226  
Total interest income   46,037       44,395       35,950       127,366       106,855  
                   
INTEREST EXPENSE:                  
Interest on deposits:                  
Interest bearing checking accounts   588       556       393       1,610       1,197  
Money market and savings deposits   1,456       1,503       1,327       4,281       3,968  
Time deposits   1,996       1,886       1,796       5,511       5,392  
Total   4,040       3,945       3,516       11,402       10,557  
Interest on borrowed funds   1,988       1,674       1,277       4,940       3,784  
Total interest expense   6,028       5,619       4,793       16,342       14,341  
Net interest income   40,009       38,776       31,157       111,024       92,514  
Provision for loan losses                           (3,600 )
Net interest income after provision for loan losses   40,009       38,776       31,157       111,024       96,114  
                   
NON-INTEREST INCOME:                  
Insurance and advisory commission and fee income   1,664       1,539       1,687       5,194       5,159  
Service charges and other income   4,620       4,383       3,984       12,387       12,916  
Mortgage banking income   140       101       170       213       564  
Net gain (loss) on sale of investment securities   1,822       (4 )     (5 )     1,814       (14 )
Total non-interest income   8,246       6,019       5,836       19,608       18,625  
                   
NON-INTEREST EXPENSE:                  
Salaries and employee benefits   17,644       16,577       15,673       50,038       47,010  
Occupancy expense   2,489       2,453       2,137       7,233       7,146  
Depreciation, amortization and maintenance   2,577       2,571       2,260       7,466       6,735  
Marketing expense   1,032       889       841       2,833       3,304  
Intangible amortization expense   580       558       473       1,611       1,406  
FDIC insurance   669       625       555       1,847       1,615  
Merger and restructuring charges   (694 )     8,621             8,765        
Professional fees   1,366       1,386       837       3,781       3,689  
Classified loan and other real estate owned related expense   311       173       77       776       1,168  
Other   7,288       6,200       5,440       19,298       16,705  
Total non-interest expense   33,262       40,053       28,293       103,648       88,778  
                   
Income before income taxes   14,993       4,742       8,700       26,984       25,961  
Income tax expense   4,917       1,994       2,865       9,137       7,818  
                   
NET INCOME $ 10,076     $ 2,748     $ 5,835     $ 17,847     $ 18,143  
                   
EARNINGS PER SHARE – Basic $ 0.14     $ 0.04     $ 0.07     $ 0.25     $ 0.23  
EARNINGS PER SHARE – Diluted $ 0.14     $ 0.04     $ 0.07     $ 0.24     $ 0.23  
                   
DIVIDENDS PER SHARE $ 0.06                 $ 0.06        
                   
Average common shares outstanding – Basic   70,593,701       71,197,288       78,544,306       72,643,659       78,458,062  
Average common shares outstanding – Diluted   71,725,229       72,078,696       79,334,149       73,577,326       79,163,078  
                   

BENEFICIAL BANCORP, INC. AND SUBSIDIARIES
Unaudited Selected Consolidated Financial and Other Data
(Dollars in thousands)
 
  Three Months Ended   Nine Months Ended
  September 30, 2016   June 30, 2016   September 30, 2015   September 30, 2016   September 30, 2015
  Average Yield /   Average Yield /   Average Yield /   Average Yield /   Average Yield /
  Balance Rate   Balance Rate   Balance Rate   Balance Rate   Balance Rate
                             
Investment securities: $ 1,305,409     1.96 %   $ 1,378,633     1.93 %   $ 1,687,721     1.80 %   $ 1,396,478     1.91 %   $ 1,780,615     1.80 %
Overnight investments   130,881     0.50 %     125,509     0.51 %     261,675     0.25 %     153,840     0.50 %     312,832     0.25 %
Stock   18,116     4.49 %     14,405     4.45 %     8,789     4.45 %     13,859     4.45 %     8,805     10.02 %
Other investment securities   1,156,412     2.08 %     1,238,719     2.04 %     1,417,257     2.07 %     1,228,779     2.05 %     1,458,978     1.80 %
                             
Loans and leases:   3,839,553     4.09 %     3,638,837     4.14 %     2,704,574     4.15 %     3,507,941     4.06 %     2,612,752     4.21 %
Residential   821,958     4.04 %     788,063     4.09 %     714,829     4.16 %     783,793     4.08 %     698,094     4.26 %
Commercial real estate   1,489,970     3.92 %     1,450,685     4.02 %     862,636     4.31 %     1,358,022     3.92 %     788,131     4.34 %
Business and small business   868,269     4.31 %     746,406     4.32 %     506,427     3.80 %     718,949     4.16 %     502,483     3.95 %
Personal   659,356     4.23 %     653,683     4.23 %     620,682     4.22 %     647,177     4.22 %     624,044     4.21 %
                             
Total interest earning assets $ 5,144,962     3.55 %   $ 5,017,470     3.53 %   $ 4,392,295     3.25 %   $ 4,904,419     3.45 %   $ 4,393,367     3.24 %
                             
Deposits: $ 3,544,413     0.45 %   $ 3,511,893     0.45 %   $ 2,986,616     0.47 %   $ 3,401,245     0.45 %   $ 3,052,032     0.46 %
Savings   1,250,309     0.34 %     1,233,829     0.34 %     1,140,479     0.34 %     1,217,281     0.34 %     1,135,868     0.35 %
Money market   442,923     0.34 %     492,471     0.38 %     407,547     0.33 %     454,335     0.35 %     418,643     0.33 %
Demand   874,955     0.24 %     854,054     0.24 %     669,527     0.21 %     834,762     0.23 %     705,821     0.21 %
Demand – municipals   127,624     0.19 %     129,905     0.17 %     118,709     0.11 %     128,821     0.15 %     129,760     0.11 %
Total core deposits   2,695,811     0.30 %     2,710,259     0.31 %     2,336,262     0.29 %     2,635,199     0.30 %     2,390,092     0.29 %
                             
Time deposits   848,602     0.94 %     801,634     0.95 %     650,354     1.10 %     766,046     0.96 %     661,940     1.09 %
                             
Borrowings   412,536     1.89 %     306,221     2.20 %     190,453     2.66 %     307,977     2.14 %     190,435     2.66 %
                             
Total interest bearing liabilities $ 3,956,949     0.61 %   $ 3,818,114     0.59 %   $ 3,177,069     0.60 %   $ 3,709,222     0.59 %   $ 3,242,467     0.59 %
                             
Non-interest bearing deposits   503,501         498,311         379,282         468,681         375,109    
                             
Net interest margin     3.08 %       3.08 %       2.82 %       3.00 %       2.80 %
                             

ASSET QUALITY INDICATORS September 30,   June 30,   December 31,   September 30,
(Dollars in thousands)   2016       2016       2015       2015  
               
Non-performing assets:              
Non-accruing loans $ 13,153     $ 14,500     $ 14,768     $ 12,588  
Accruing loans past due 90 days or more   18,664       20,138       22,900       25,149  
Total non-performing loans $ 31,817     $ 34,638       37,668       37,737  
               
Real estate owned   1,486       1,999       1,276       1,451  
               
Total non-performing assets $ 33,303     $ 36,637     $ 38,944     $ 39,188  
               
Non-performing loans to total loans and leases   0.82 %     0.91 %     1.28 %     1.37 %
Non-performing assets to total assets   0.60 %     0.66 %     0.81 %     0.83 %
Non-performing assets less accruing government guaranteed              
student loans past due 90 days or more to total assets   0.26 %   0.30 %   0.33 %     0.30 %
ALLL to total loans and leases   1.14 %     1.17 %     1.55 %   1.73 %
ALLL to non-performing loans   139.76 %     128.53 %     120.79 %     126.33 %
ALLL to non-performing loans, excluding government              
guaranteed student loans   338.07 %     307.03 %     308.10 %     378.73 %
               

Key performance ratios (annualized) are as follows for the three and nine months ended (unaudited):

  For the Three Months Ended   For the Nine Months
Ended
  September 30,   June 30,   December 31,   September 30,
  2016   2016
  2015   2016   2015
PERFORMANCE RATIOS:                  
(annualized)                  
Return on average assets   0.72 %     0.21 %     0.39 %     0.45 %     0.51 %
Return on average equity   3.91 %     1.11 %     1.67 %     2.29 %     2.32 %
Net interest margin   3.08 %     3.08 %     2.84 %     3.00 %     2.80 %
Efficiency ratio   68.92 %     89.41 %     79.50 %     79.34 %     79.88 %
Efficiency ratio (excluding merger & restructuring charges)   70.36 %     70.16 %     77.49 %     72.63 %     79.88 %
Tangible common equity   15.70 %     15.95 %     21.04 %     15.70 %     21.40 %

 

CONTACT: CONTACT:
Thomas D. Cestare
Executive Vice President and Chief Financial Officer
PHONE: (215) 864-6009