null (BNCL, Financial) filed Quarterly Report for the period ended 2009-06-30.
The Company 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 for more than 150 years. The Bank is the oldest and largest bank headquartered in Philadelphia Pennsylvania with 72 offices in the greater Philadelphia and Southern New Jersey regions. Insurance services are offered through Beneficial Insurance Services LLC and wealth management services are offered through Beneficial Advisors LLC both wholly owned subsidiaries of the Bank. null has a market cap of $756.5 million; its shares were traded at around $9.22 with a P/E ratio of 83.8 and P/S ratio of 3.5.
Total assets increased $183.8 million, or 4.6%, to $4.2 billion at June 30, 2009 from $4.0 billion at December 31, 2008. The increase in total assets was primarily due to increases in net loans outstanding of $264.1 million, partially offset by a decrease of $65.4 million in investment securities, a decrease in cash and cash equivalents of $2.2 million and a decrease in bank premises and equipment of $0.8 million for the six months ended June 30, 2009. Total deposits increased $296.3 million, or 10.8%, to $3.0 billion at June 30, 2009 compared to $2.7 billion at December 31, 2008. The largest contributor to this increase was growth in core deposits of $352.0 million to $2.0 billion at June 30, 2009 from $1.7 billion at December 31, 2008. Interest bearing deposits increased $274.2 million, or 10.9%, to $2.8 billion from $2.5 billion at December 31, 2008 and non-interest bearing deposits increased $22.1 million to $248.5 million from $226.4 million at December 31, 2008. Stockholders equity increased $9.7 million, or 1.6%, to $620.2 million at June 30, 2009 compared to $610.5 million at December 31, 2008. The increase in stockholders equity resulted primarily from earnings for the six months ended June 30, 2009 and a rise in accumulated other comprehensive income of $4.4 million related to an increase in unrealized gains in available-for-sale securities.
Net Interest Income β The Company s net interest income increased $2.4 million, or 8.4%, to $30.4 million for the three months ended June 30, 2009 from $28.1 million for the same period in 2008. Total interest income decreased $0.9 million to $47.0 million for the three months ended June 30, 2009 from $47.9 million for the same period in 2008. This was due to an increase in average interest earning assets of $0.4 billion to $3.8 billion for the three months ended June 30, 2009 from $3.4 billion for the same period in 2008 and a decrease in the average yield on interest earning assets of 65 basis points to 5.00% for the three months ended June 30, 2009 compared to 5.65% for the same period in 2008. Total interest expense decreased $3.3 million to $16.5 million for the three months ended June 30, 2009 from $19.8 million for the same period in 2008. This was due to a decrease in average savings accounts of $11.1 million and a decrease in time deposits of $51.4 million for the three months ended June 30, 2009. The resulting cost on interest bearing deposits decreased 80 basis points from 2.53% for the three months ended June 30, 2008 to 1.73% for the three months ended June 30, 2009.
Non-interest Income β Non-interest income increased $0.2 million, or 3.5%, to $6.1 million for the three months ended June 30, 2009, compared to $5.9 million for the same period in 2008. The increase in non-interest income was primarily due to an increase in gains on sale of investment securities available for sale, net of an impairment charge on securities available for sale recorded during the three months ended June 30, 2008. This impairment charge was a result of the weakened condition of the market for the common stocks of financial institutions and the evaluation of the near term prospects of the issuers in relation to the severity of the decline. As a result, the Company recorded a charge related to the value of common equity securities of various financial services companies that were deemed to be other-than-temporarily-impaired of $0.5 million during the three months ended June 30, 2008. No impairment charge was recorded during the three months ended June 30, 2009. Insurance commission income decreased during the three months ended June 30, 2009 to $1.7 million compared to $1.9 million during the same three months of 2008. This decrease was primarily a result of changes with carriers and the overall economic environment.
Non-interest Expense β Non-interest expense increased $11.1 million, or 59.6%, to $29.8 million during the three months ended June 30, 2009 compared to $18.6 million during the same period in 2008. The increase was primarily due to an increase in salaries and employee benefits of $8.1 million, including (i) a pension curtailment gain recorded for the three months ended June 30, 2008 of $7.3 million and (ii) an increase in FDIC deposit insurance expense of $2.4 million, which included a special assessment expense of $1.9 million, during the three months ended June 30, 2009. Amortization of intangibles expense decreased $0.7 million, to $0.9 million for the three months ended June 30, 2009 from $1.7 million during the same period in 2008. The core deposit intangible is being amortized on an accelerated basis resulting in a decrease in amortization expense. Additionally, other intangibles related to the acquisition of Paul Hertel & Co., Inc. were fully amortized in the first quarter of 2009.
Income Taxes β Income tax benefit totaled $0.2 million for the three months ended June 30, 2009, reflecting an effective tax rate of 82.9%, compared to income tax expense of $4.0 million, reflecting an effective tax rate of 30.3%, for the same period in 2008. The decrease was primarily due to a decrease in income before income taxes of $13.3 million to a loss of $0.3 million for the three months ended June 30, 2009 compared to a gain of $13.1 for the same three-month period in 2008.
Read the The complete ReportBNCL is in the portfolios of John Keeley of Keeley Fund Management.
The Company 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 for more than 150 years. The Bank is the oldest and largest bank headquartered in Philadelphia Pennsylvania with 72 offices in the greater Philadelphia and Southern New Jersey regions. Insurance services are offered through Beneficial Insurance Services LLC and wealth management services are offered through Beneficial Advisors LLC both wholly owned subsidiaries of the Bank. null has a market cap of $756.5 million; its shares were traded at around $9.22 with a P/E ratio of 83.8 and P/S ratio of 3.5.
Highlight of Business Operations:
Allowance for Loan Losses β The allowance for loan losses is the amount estimated by management as necessary to cover losses inherent in the loan portfolio at the balance sheet date. The allowance is established through the provision for loan losses, which is charged to income. Determining the amount of the allowance for loan losses necessarily involves a high degree of judgment. Among the material estimates required to establish the allowance are: overall economic conditions; value of collateral; strength of guarantors; loss exposure at default; the amount and timing of future cash flows on impacted loans; and determination of loss factors to be applied to the various elements of the portfolio. All of these estimates are subject to significant change. The Company estimates that a 10 percent increase in the loss factors used on the loan portfolio would increase the allowance for loan losses at June 30, 2009 by approximately $2.8 million, of which $0.3 million would relate to consumer loans, $2.1 million to commercial loans and $0.4 million to residential mortgage loans. These sensitivity analyses do not represent management s expectations of the increase in loss factors, but are provided as hypothetical scenarios to assess the sensitivity of the allowance for loan losses to change in key inputs. We believe the loss factors currently in use are appropriate in order to evaluate the allowance for loan losses at the balance sheet dates. The process of determining the level of the allowance for loan losses requires a high degree of judgment. It is possible that others, given the same information, may at any point in time reach different reasonable conclusions.Total assets increased $183.8 million, or 4.6%, to $4.2 billion at June 30, 2009 from $4.0 billion at December 31, 2008. The increase in total assets was primarily due to increases in net loans outstanding of $264.1 million, partially offset by a decrease of $65.4 million in investment securities, a decrease in cash and cash equivalents of $2.2 million and a decrease in bank premises and equipment of $0.8 million for the six months ended June 30, 2009. Total deposits increased $296.3 million, or 10.8%, to $3.0 billion at June 30, 2009 compared to $2.7 billion at December 31, 2008. The largest contributor to this increase was growth in core deposits of $352.0 million to $2.0 billion at June 30, 2009 from $1.7 billion at December 31, 2008. Interest bearing deposits increased $274.2 million, or 10.9%, to $2.8 billion from $2.5 billion at December 31, 2008 and non-interest bearing deposits increased $22.1 million to $248.5 million from $226.4 million at December 31, 2008. Stockholders equity increased $9.7 million, or 1.6%, to $620.2 million at June 30, 2009 compared to $610.5 million at December 31, 2008. The increase in stockholders equity resulted primarily from earnings for the six months ended June 30, 2009 and a rise in accumulated other comprehensive income of $4.4 million related to an increase in unrealized gains in available-for-sale securities.
Net Interest Income β The Company s net interest income increased $2.4 million, or 8.4%, to $30.4 million for the three months ended June 30, 2009 from $28.1 million for the same period in 2008. Total interest income decreased $0.9 million to $47.0 million for the three months ended June 30, 2009 from $47.9 million for the same period in 2008. This was due to an increase in average interest earning assets of $0.4 billion to $3.8 billion for the three months ended June 30, 2009 from $3.4 billion for the same period in 2008 and a decrease in the average yield on interest earning assets of 65 basis points to 5.00% for the three months ended June 30, 2009 compared to 5.65% for the same period in 2008. Total interest expense decreased $3.3 million to $16.5 million for the three months ended June 30, 2009 from $19.8 million for the same period in 2008. This was due to a decrease in average savings accounts of $11.1 million and a decrease in time deposits of $51.4 million for the three months ended June 30, 2009. The resulting cost on interest bearing deposits decreased 80 basis points from 2.53% for the three months ended June 30, 2008 to 1.73% for the three months ended June 30, 2009.
Non-interest Income β Non-interest income increased $0.2 million, or 3.5%, to $6.1 million for the three months ended June 30, 2009, compared to $5.9 million for the same period in 2008. The increase in non-interest income was primarily due to an increase in gains on sale of investment securities available for sale, net of an impairment charge on securities available for sale recorded during the three months ended June 30, 2008. This impairment charge was a result of the weakened condition of the market for the common stocks of financial institutions and the evaluation of the near term prospects of the issuers in relation to the severity of the decline. As a result, the Company recorded a charge related to the value of common equity securities of various financial services companies that were deemed to be other-than-temporarily-impaired of $0.5 million during the three months ended June 30, 2008. No impairment charge was recorded during the three months ended June 30, 2009. Insurance commission income decreased during the three months ended June 30, 2009 to $1.7 million compared to $1.9 million during the same three months of 2008. This decrease was primarily a result of changes with carriers and the overall economic environment.
Non-interest Expense β Non-interest expense increased $11.1 million, or 59.6%, to $29.8 million during the three months ended June 30, 2009 compared to $18.6 million during the same period in 2008. The increase was primarily due to an increase in salaries and employee benefits of $8.1 million, including (i) a pension curtailment gain recorded for the three months ended June 30, 2008 of $7.3 million and (ii) an increase in FDIC deposit insurance expense of $2.4 million, which included a special assessment expense of $1.9 million, during the three months ended June 30, 2009. Amortization of intangibles expense decreased $0.7 million, to $0.9 million for the three months ended June 30, 2009 from $1.7 million during the same period in 2008. The core deposit intangible is being amortized on an accelerated basis resulting in a decrease in amortization expense. Additionally, other intangibles related to the acquisition of Paul Hertel & Co., Inc. were fully amortized in the first quarter of 2009.
Income Taxes β Income tax benefit totaled $0.2 million for the three months ended June 30, 2009, reflecting an effective tax rate of 82.9%, compared to income tax expense of $4.0 million, reflecting an effective tax rate of 30.3%, for the same period in 2008. The decrease was primarily due to a decrease in income before income taxes of $13.3 million to a loss of $0.3 million for the three months ended June 30, 2009 compared to a gain of $13.1 for the same three-month period in 2008.
Read the The complete ReportBNCL is in the portfolios of John Keeley of Keeley Fund Management.
