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

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PHILADELPHIA, Oct. 19, 2018 (GLOBE NEWSWIRE) — Beneficial Bancorp, Inc. (“Beneficial”) (NASDAQ GS: BNCL), the parent company of Beneficial Bank (the “Bank”), today announced its financial results for the three and nine months ended September 30, 2018.  Beneficial recorded net income of $12.4 million and $34.1 million, or $0.17 and $0.47 per diluted share, for the three and nine months ended September 30, 2018, respectively, compared to net income of $9.4 million and $27.3 million, or $0.13 and $0.37 per diluted share, for the three and nine months ended September 30, 2017.  Net income for the three and nine months ended September 30, 2018 includes $2.3 million of professional fees associated with the pending merger of Beneficial with WSFS Financial Corporation.  In addition, net income for the three and nine months ended September 30, 2018 includes a $3.3 million net gain on the sale of Beneficial Insurance Services, LLC, a former consolidated wholly owned subsidiary of Beneficial Bank.

On October 18, 2018, the Company declared a cash dividend of 6 cents per common share, payable on or after November 8, 2018, to common shareholders of record at the close of business on October 29, 2018.

Highlights for the three and nine months ended September 30, 2018 are as follows:

  • Net interest margin totaled 3.26% and 3.27% for the three and nine months ended September 30, 2018 compared to 3.09% and 3.06% for the same periods in 2017, respectively.  Net interest income increased $2.6 million, or 6.1%, and $8.4 million, or 6.7%, for the three and nine months ended September 30, 2018 compared to the same periods in the prior year.  During the three and nine months ended September 30, 2018, the net interest margin was positively impacted by five and seven basis points, respectively, by loan prepayment income.
  • During the three months ended September 30, 2018, Beneficial recorded a $3.3 million net gain on the sale of Beneficial Insurance Services, LLC, a former consolidated wholly owned subsidiary of Beneficial Bank.
  • Our non-performing assets to total assets ratio decreased to 0.49% at September 30, 2018 compared to 0.60% at December 31, 2017. Non-performing assets decreased $6.0 million to $28.9 million at September 30, 2018 from $34.9 million at December 31, 2017, which was primarily due to the sale of one large commercial non-performing loan totaling $7.6 million during the third quarter of 2018.
  • During the three and nine months ended September 30, 2018, the Company recorded a $305 thousand and a $1.2 million net gain on the sale of $6.8 million and $18.9 million of the guaranteed portion of SBA loans, respectively. 
  • Asset quality metrics continued to remain strong with non-performing assets to total assets, excluding government guaranteed student loans, of 0.27% as of September 30, 2018.  Our allowance for loan losses totaled $43.1 million, or 1.10% of total loans, as of September 30, 2018, compared to $43.3 million, or 1.07% of total loans, as of December 31, 2017.  
  • Our effective tax rate decreased to 25.9% and 24.2% for the three and nine months ended September 30, 2018 compared to 36.8% and 33.5% for the same periods in the prior year as a result of the Tax Cuts and Jobs Act of 2017, which was enacted on December 22, 2017 and lowered the federal corporate tax rate to 21% from 35%.
  • During the nine months ended September 30, 2018, the Company purchased 945,400 shares under its previously announced stock repurchase plan.  Our tangible capital to tangible assets ratio was 15.34% at both September 30, 2018 and 2017.  Tangible book value per share totaled $11.68 at September 30, 2018.

Balance Sheet
Total assets increased $68.8 million, or 1.2%, to $5.87 billion at September 30, 2018, compared to $5.80 billion at December 31, 2017.  The increase in total assets was primarily due to growth in total deposits of $96.5 million which led to an increase in cash and cash equivalents.

Cash and cash equivalents increased $285.3 million, or 51.2%, to $842.9 million at September 30, 2018, from $557.6 million at December 31, 2017.  The increase in cash and cash equivalents was primarily driven by investment maturities and repayments and a decrease in our total loan portfolio as well as deposit growth.
           
Investments decreased $121.9 million, or 14.0%, to $748.9 million at September 30, 2018, compared to $870.8 million at December 31, 2017. 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 decreased $107.7 million, or 2.7%, to $3.93 billion at September 30, 2018, from $4.03 billion at December 31, 2017.  During the nine months ended September 30, 2018, our residential real estate portfolio increased $37.5 million, representing 5.3% annualized growth.  However, this growth was offset by a $94.6 million decrease in our total commercial portfolio and an $88.1 million decrease in our total consumer loan portfolio.  We continue to experience a number of large commercial loan payoffs as projects are completed and sold and financing is obtained from non-bank sources.  The decrease in our consumer loan portfolio was due primarily to a $49.3 million decrease in indirect auto loans resulting from our planned run-off of this portfolio segment.  As previously disclosed, we decided to exit the indirect lending business in the first quarter of 2017.

During the quarter ended September 30, 2018, we entered into an asset purchase agreement with a third party to sell the net assets of Beneficial Insurance Services, LLC.  In connection with that sale, Beneficial received net proceeds of $14.1 million and realized a net gain of $3.3 million as the sale proceeds exceeded our carrying amount for Beneficial Insurance Services including goodwill and intangible assets.  Goodwill and intangible assets that related to Beneficial Insurance Services decreased $10.2 million during the quarter ended September 30, 2018 as a result of the sale.  For the nine months ending September 30, 2018, non-interest income and non-interest expense includes $4.6 million and $4.6 million, respectively, related to Beneficial Insurance Services.  These non-interest income and non-interest expense items related to Beneficial Insurance Services will not occur in future periods.

Deposits increased $96.5 million, or 2.3%, to $4.25 billion at September 30, 2018, from $4.15 billion at December 31, 2017.  Deposit growth was primarily achieved through organic core deposit growth of $182.2 million in interest business checking accounts and $31.4 million of growth in time deposits, partially offset by the maturity of $71.9 million of higher cost brokered certificates of deposit, which we did not renew given our excess liquidity position.  The growth in interest business checking is primarily due to one large commercial deposit account.  We expect this temporary balance to decrease in the fourth quarter.

Borrowings decreased $25.4 million to $515.0 million at September 30, 2018.  During the nine months ended September 30, 2018, the Company paid off $25.8 million of a higher cost trust preferred debenture.

Stockholders’ equity increased $2.4 million, or 0.2%, to $1.04 billion at September 30, 2018, from $1.03 billion at December 31, 2017.  The increase in stockholders’ equity was primarily due to $34.1 million of net income during the nine months ended September 30, 2018, partially offset by the declaration of cash dividends and stock repurchases.

Net Interest Income
For the three months ended September 30, 2018, net interest income was $45.0 million, an increase of $2.6 million, or 6.1%, from the three months ended September 30, 2017. The increase in net interest income was primarily due to an increase in yields on the investment and loan portfolios following recent Federal Reserve Bank federal funds rate increases. The Company also paid off $25.8 million of a higher cost trust preferred debenture during the first quarter of 2018. The net interest margin totaled 3.26% for the quarter ended September 30, 2018 as compared to 3.09% for the same period in 2017.  During the three months ended September 30, 2018, the net interest margin was positively impacted by five basis points due to loan prepayments compared to a two basis points impact during the three months ended September 30, 2017. Also during the three months ended September 30, 2018, the net interest margin was negatively impacted 16 basis points by higher cash levels due to slower than anticipated loan growth as average cash for the period totaled $702.7 million, an increase of $314.7 million from $388.0 million during the three months ended September 30, 2017.

For the nine months ended September 30, 2018, Beneficial reported net interest income of $133.3 million, an increase of $8.4 million, or 6.7%, from the nine months ended September 30, 2017. The increase in net interest income was primarily due to an increase in yields on the investment and loan portfolios following recent Federal Reserve Bank federal funds rate increases.  Our net interest margin increased to 3.27% for the nine months ended September 30, 2018, from 3.06% for the same period in 2017.  During the nine months ended September 30, 2018, the net interest margin was positively impacted by seven basis points due to loan prepayments compared to a two basis points impact during the nine months ended September 30, 2017. Also during the nine months ended September 30, 2018, the net interest margin was negatively impacted 15 basis points by higher cash levels due to slower than anticipated loan growth as average cash for the period totaled $585.0 million, an increase of $253.9 million from $331.1 million during the nine months ended September 30, 2017.

Non-interest Income
For the three months ended September 30, 2018, non-interest income totaled $9.9 million, an increase of $2.8 million, or 38.9%, from the three months ended September 30, 2017.  The increase was primarily due to a $3.3 million net gain on the sale of Beneficial Insurance Services, LLC.  This increase to non-interest income was partially offset by a $442 thousand decrease in income from insurance and advisory services during the three months ended September 30, 2018 compared to the same period in the prior year.

For the nine months ended September 30, 2018, non-interest income totaled $23.9 million, an increase of $2.3 million, or 10.8%, from the nine months ended September 30, 2017.  The increase was primarily due to a $3.3 million net gain on the sale of Beneficial Insurance Services, LLC.  This increase to non-interest income was partially offset by an $835 thousand decrease in income from insurance and advisory services during the nine months ended September 30, 2018 compared to the same period in the prior year.

Non-interest Expense
For the three months ended September 30, 2018, non-interest expense totaled $36.4 million, an increase of $2.5 million, or 7.5%, from the three months ended September 30, 2017.  The increase in non-interest expense was primarily due $2.3 million of professional fees associated with the previously mentioned pending merger of Beneficial with WSFS Financial Corporation.  The increase can also be attributed to an increase in salaries and employee benefits of $1.2 million due primarily to enhanced medical coverage provided to our entire employee base, annual merit increases, an increase to our minimum wage and the costs associated with the build out of Neumann Finance. 

For the nine months ended September 30, 2018, non-interest expense totaled $108.0 million, an increase of $4.6 million, or 4.5%, from the nine months ended September 30, 2017.  The increase in non-interest expense was primarily due to an increase in salaries and employee benefits of $3.5 million due primarily to enhanced medical coverage provided to our entire employee base, annual merit increases, an increase in our minimum wage and the costs associated with the build out of Neumann Finance.  The increase in non-interest expense was also due $2.3 million of professional fees associated with the previously mentioned pending merger of Beneficial with WSFS Financial Corporation. These increases to non-interest expense were partially offset by a $753 thousand decrease in intangible amortization expense as a result of certain intangible assets reaching the end of their estimated lives. 

Income Taxes
For the three months ended September 30, 2018, we recorded a provision for income taxes of $4.3 million, reflecting an effective tax rate of 25.9%, compared to a provision for income taxes of $5.5 million, reflecting an effective tax rate of 36.8%, for the three months ended September 30, 2017.  For the nine months ended September 30, 2018, we recorded a provision for income taxes of $10.8 million, reflecting an effective tax rate of 24.2%, compared to a provision for income taxes of $13.7 million, reflecting an effective tax rate of 33.5%, for the nine months ended September 30, 2017.  The decrease in the effective tax rate in the three and nine months ended September 30, 2018 compared to the same periods a year ago is primarily due to the passage of the Tax Cuts and Jobs Act of 2017, which was enacted on December 22, 2017 and lowered the federal corporate tax rate to 21% from 35%.

Asset Quality
Non-accruing loans, excluding government guaranteed student loans, decreased $5.1 million to $15.4 million at September 30, 2018, compared to $20.5 million at December 31, 2017.  Our ratio of non-performing assets to total assets, excluding government guaranteed student loans, decreased to 0.27% at September 30, 2018 compared to 0.36% at December 31, 2017.  The decrease is primarily due to the sale of one large commercial non-performing loan totaling $7.6 million during the quarter.  We had a specific loan loss reserve of $1.5 million for this loan.  The actual loss for the loan was $766 thousand.  Net charge-offs for the nine months ended September 30, 2018, totaled $4.7 million, or 16 basis points annualized of average loans, compared to net charge-offs of $2.1 million, or 7 basis points annualized of average loans, in the same period in 2017.   As a result of charge-offs, we recorded a $1.9 million and $4.6 million provision for loan losses during the three and nine months ended September 30, 2018, respectively, compared to a $750 thousand and $2.1 million provision for loan losses during the same periods in the prior year.  Our allowance for loan losses totaled $43.1 million, or 1.10% of total loans, as of September 30, 2018, compared to $43.1 million, or 1.07% of total loans, as of June 30, 2018, and $43.3 million, or 1.07% of total loans, as of December 31, 2017.

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, 2018, Beneficial’s tangible capital to tangible assets totaled 15.34%. In addition, at September 30, 2018, we had the ability to borrow up to $2.3 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:

              Minimum Well   Excess Capital
  9/30/2018   12/31/2017   9/30/2017   Capitalized Ratio   9/30/2018
                   
Tier 1 Leverage (to average assets) 15.64%   16.19%   16.16%   5.0%   $602,848
Common Equity Tier 1 Capital (to risk weighted assets) 22.37%   22.12%   21.89%   6.5%   628,606
Tier 1 Capital (to risk weighted assets) 22.37%   22.76%   22.50%   8.0%   569,195
Total Capital Ratio (to risk weighted assets) 23.46%   23.84%   23.58%   10.0%   533,233

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

              Minimum Well   Excess Capital
  9/30/2018   12/31/2017   9/30/2017   Capitalized Ratio   9/30/2018
                   
Tier 1 Leverage (to average assets) 13.21%   14.46%   14.45%   5.0%   $465,117
Common Equity Tier 1 Capital (to risk weighted assets) 18.91%   20.34%   20.14%   6.5%   490,988
Tier 1 Capital (to risk weighted assets) 18.91%   20.34%   20.14%   8.0%   431,621
Total Capital Ratio (to risk weighted assets) 20.00%   21.42%   21.21%   10.0%   395,717

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 61 offices in the greater Philadelphia and South New Jersey regions.  Equipment leasing services are offered through Beneficial Equipment Leasing Corporation, which is a wholly owned subsidiary of the Bank, and Neumann Finance Company, which is a majority 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 and our ability to complete our previously announced business combination with WSFS Financial Corporation. 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,
  2018     2018     2017     2017  
ASSETS:              
Cash and cash equivalents:              
Cash and due from banks $46,919     $52,440     $45,048     $46,027  
Interest-bearing deposits   796,019       534,353       512,567       430,989  
Total cash and cash equivalents   842,938       586,793       557,615       477,016  
               
Investment securities:              
Available-for-sale   287,060       294,428       310,308       369,210  
Held-to-maturity   438,649       498,454       537,302       558,659  
Federal Home Loan Bank stock, at cost   23,182       23,182       23,210       23,210  
Total investment securities   748,891       816,064       870,820       951,079  
               
Loans and leases:   3,926,381       4,023,310       4,034,130       4,032,521  
Allowance for loan and lease losses   (43,137)       (43,068)       (43,267)       (43,270)  
Net loans and leases   3,883,244       3,980,242       3,990,863       3,989,251  
               
Accrued interest receivable   18,519       18,152       17,512       16,883  
               
Bank premises and equipment, net   68,723       68,259       70,573       71,745  
               
Other assets:              
Goodwill   159,671       169,002       169,002       169,002  
Bank owned life insurance   80,793       81,207       80,172       79,976  
Other intangibles   1,428       2,486       2,884       3,096  
Other assets   63,416       48,106       39,387       59,571  
Total other assets   305,308       300,801       291,445       311,645  
Total assets $5,867,623     $5,770,311     $5,798,828     $5,817,619  
               
LIABILITIES AND STOCKHOLDERS’ EQUITY:              
Liabilities:              
Deposits:              
Non-interest bearing deposits $552,111     $592,375     $563,185     $527,545  
Interest bearing deposits   3,694,869       3,568,131       3,587,308       3,643,373  
Total deposits   4,246,980       4,160,506       4,150,493       4,170,918  
Borrowed funds   515,000       515,000       540,439       540,436  
Other liabilities   68,497       72,213       73,006       67,927  
Total liabilities   4,830,477       4,747,719       4,763,938       4,779,281  
Commitments and contingencies              
Stockholders’ equity:              
Preferred stock – $.01 par value   –       –       –       –  
Common stock – $.01 par value   848       847       845       844  
Additional paid-in capital   812,346       807,616       799,658       794,253  
Unearned common stock held by employee stock ownership plan   (25,227)       (25,844)       (27,078)       (27,695)  
Retained earnings   413,481       405,395       405,497       413,210  
Accumulated other comprehensive loss, net   (28,148)       (29,406)       (26,127)       (23,777)  
Treasury stock, at cost   (136,622)       (136,622)       (118,497)       (118,497)  
Total Beneficial Bancorp, Inc. stockholders’ equity   1,036,678       1,021,986       1,034,298       1,038,338  
Noncontrolling interest   468       606       592       –  
Total stockholders’ equity   1,037,146       1,022,592       1,034,890       1,038,338  
Total liabilities and stockholders’ equity $5,867,623     $5,770,311     $5,798,828     $5,817,619  
               

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,
  2018     2018     2017     2018     2017  
INTEREST INCOME:                  
Interest and fees on loans and leases $44,990     $45,415     $42,969     $133,458     $126,667  
Interest on overnight investments   3,524       2,314       1,239       7,893       2,666  
Interest and dividends on investment securities:                  
Taxable   4,543       4,868       5,220       14,531       15,991  
Tax-exempt   18       18       18       54       58  
Total interest income 53,075     52,615     49,446     155,936     145,382  
                   
INTEREST EXPENSE:                  
Interest on deposits:                  
Interest bearing checking accounts   708       648       625       1,995       1,844  
Money market and savings deposits   2,227       1,930       1,516       5,642       4,467  
Time deposits   2,950       2,704       2,519       8,230       7,017  
Total 5,885     5,282     4,660     15,867     13,328  
Interest on borrowed funds   2,233       2,208       2,400       6,786       7,138  
Total interest expense 8,118     7,490     7,060     22,653     20,466  
Net interest income 44,957     45,125     42,386     133,283     124,916  
Provision for loan and lease losses   1,916       1,666       750       4,581       2,100  
Net interest income after provision for loan and lease losses 43,041     43,459     41,636     128,702     122,816  
                   
NON-INTEREST INCOME:                  
Insurance and advisory commission and fee income   1,356       1,402       1,798       4,681       5,516  
Service charges and other income   4,942       5,232       4,891       14,369       14,342  
Mortgage banking and SBA income   309       703       424       1,480       1,748  
Net gain on sale of insurance agency   3,297       –        –        3,297       –   
Net (loss) gain on investment securities   (23)       46       (1)       100       (7)  
Total non-interest income 9,881     7,383     7,112     23,927     21,599  
                   
NON-INTEREST EXPENSE:                  
Salaries and employee benefits   19,482       19,748       18,285       59,187       55,670  
Occupancy expense   2,520       2,489       2,474       8,040       7,746  
Depreciation, amortization and maintenance   2,300       2,295       2,368       6,877       7,183  
Marketing expense   1,478       1,474       1,018       4,872       3,160  
Intangible amortization expense   199       199       212       597       1,350  
FDIC insurance   416       413       441       1,258       1,312  
Merger charges   2,261       –        –        2,261       –   
Professional fees   1,130       1,200       1,026       3,367       3,237  
Classified loan and other real estate owned related expense   356       364       420       944       950  
Other   6,243       7,105       7,594       20,625       22,810  
Total non-interest expense   36,385       35,287     33,838     108,028     103,418  
                   
Income before income taxes 16,537     15,555       14,910       44,601       40,997  
Income tax expense   4,286       3,711       5,482       10,782       13,729  
                   
CONSOLIDATED NET INCOME $12,251     $11,844     $9,428     $33,819     $27,268  
Net loss attributable to noncontrolling interest   (139)       (94)       –        (299)       –   
NET INCOME ATTRIBUTABLE TO BENEFICIAL BANCORP, INC. $12,390     $11,938     $9,428     $34,118     $27,268  
                   
EARNINGS PER SHARE – Basic $0.17     $0.16     $0.13     $0.47     $0.37  
EARNINGS PER SHARE – Diluted $0.17     $0.16     $0.13     $0.47     $0.37  
                   
DIVIDENDS DECLARED PER SHARE $0.06     $0.06     $0.06     $0.43     $0.18  
                   
Average common shares outstanding – Basic 71,012,206     70,621,336     70,781,924     70,846,044     70,487,219  
Average common shares outstanding – Diluted 71,638,486     71,233,890     71,294,232     71,472,868     71,093,015  
                             
                             

BENEFICIAL BANCORP, INC. AND SUBSIDIARIES
Unaudited Selected Consolidated Financial and Other Data
(Dollars in thousands)

  For the Three Months Ended   For the Nine Months Ended
  September 30, 2018   June 30, 2018   September 30, 2017   September 30, 2018   September 30, 2017
  Average Yield /   Average Yield /   Average Yield /   Average Yield /   Average Yield /
  Balance Rate   Balance Rate   Balance Rate   Balance Rate   Balance Rate
                             
Investment securities: $1,478,764 2.17%     $1,344,525 2.14%     $1,360,269 1.90%     $1,406,662 2.12%     $1,339,715 1.86%  
Overnight investments   702,747 1.96%       512,857 1.78%       388,004 1.25%       585,010 1.78%       331,117 1.06%  
Stock   23,184 6.39%       23,183 6.39%       23,211 4.66%       23,193 6.97%       22,991 4.66%  
Other investment securities   752,833 2.23%       808,485 2.23%       949,054 2.09%       798,459 2.23%       985,607 2.06%  
                             
Loans and leases:   3,977,417 4.47%       4,020,939 4.50%       4,069,327 4.18%       4,002,892 4.42%       4,066,024 4.14%  
Residential   976,240 3.93%       958,698 3.91%       921,751 3.90%       960,107 3.92%       903,798 3.94%  
Commercial real estate   1,685,401 4.43%       1,686,332 4.61%       1,669,697 4.13%       1,682,834 4.43%       1,664,615 4.09%  
Business and small business   839,234 4.94%       870,986 4.78%       881,955 4.46%       854,901 4.79%       869,822 4.36%  
Personal   476,542 4.91%       504,923 4.74%       595,924 4.33%       505,050 4.73%       627,789 4.24%  
                             
Total interest earning assets $5,456,181 3.85%     $5,365,464 3.90%     $5,429,596 3.61%     $5,409,554 3.83%     $5,405,739 3.57%  
                             
Deposits: $3,636,043 0.64%     $3,590,481 0.59%     $3,655,234 0.51%     $3,614,689 0.59%     $3,652,394 0.49%  
Savings 1,291,292 0.52%     1,303,878 0.45%     1,302,019 0.34%     1,295,879 0.44%     1,299,584 0.34%  
Money market 402,070 0.54%     412,282 0.47%     439,045 0.36%     411,346 0.46%     443,746 0.35%  
Demand 1,021,520 0.26%     958,581 0.25%     924,917 0.25%     973,272 0.25%     918,441 0.24%  
Demand – municipals 109,745 0.15%     106,638 0.16%     113,961 0.18%     112,240 0.17%     121,604 0.20%  
Total core deposits   2,824,627 0.41%       2,781,379 0.37%       2,779,942 0.31%       2,792,737 0.37%       2,783,375 0.30%  
                             
Time deposits 811,416 1.44%     809,102 1.34%     875,292 1.14%     821,952 1.34%     869,019 1.08%  
                             
Borrowings 515,054 1.70%     515,000 1.70%     540,488 1.74%     521,745 1.74%     534,788 1.76%  
                             
Total interest bearing liabilities $4,151,097 0.78%     $4,105,481 0.73%     $4,195,722 0.67%     $4,136,434 0.73%     $4,187,182 0.65%  
                             
Non-interest bearing deposits 591,563     555,273     530,256     561,514     522,221  
                             
Net interest margin   3.26%       3.34%       3.09%       3.27%       3.06%  
                             

ASSET QUALITY INDICATORS September 30,   June 30,   December 31,   September 30,
(Dollars in thousands) 2018   2018   2017   2017
               
Non-performing assets:              
Non-accruing loans $15,427   $20,886   $20,521   $20,788
Accruing loans past due 90 days or more 13,202   22,204   14,152   14,912
Total non-performing loans $28,629   $43,090   $34,673   $35,700
               
Real estate owned 274   102   189   124
               
Total non-performing assets $28,903   $43,192   $34,862   $35,824
               
Non-performing loans to total loans and leases 0.73%   1.07%   0.86%   0.89%
Non-performing assets to total assets 0.49%   0.75%   0.60%   0.62%
Non-performing assets less accruing government guaranteed              
student loans past due 90 days or more to total assets 0.27% 0.36% 0.36%   0.36%
ALLL to total loans and leases 1.10%   1.07%   1.07% 1.07%
ALLL to non-performing loans 150.68%   99.95%   124.79%   121.20%
ALLL to non-performing loans, excluding government              
guaranteed student loans 279.62%   206.21%   210.84%   208.15%
               
               

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,
  2018     2018     2017     2018     2017  
PERFORMANCE RATIOS:                  
(annualized)                  
Return on average assets 0.66 %   0.83 %   (0.25 %)   0.76 %   0.63 %
Return on average assets (excluding tax reform act impact) 0.66 %   0.83 %   0.65 %   0.76 %   0.63 %
Return on average equity 3.76 %   4.67 %   (1.38 %)   4.32 %   3.55 %
Return on average equity (excluding tax reform act impact) 3.76 %   4.67 %   3.63 %   4.32 %   3.55 %
Net interest margin 3.26 %   3.34 %   3.28 %   3.27 %   3.06 %
Net charge-off ratio 0.19 %   0.17 %   0.10 %   0.16 %   0.07 %
Efficiency ratio 66.35 %   67.20 %   68.20 %   68.72 %   70.59 %
Efficiency ratio (excluding merger charges) 62.23 %   67.20 %   68.20 %   67.28 %   70.59 %
Tangible common equity 15.34 %   15.19 %   15.33 %   15.34 %   15.34 %
Tangible common equity (excluding tax reform act impact) 15.34 %   15.19 %   15.53 %   15.34 %   15.34 %

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