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CST: 20/10/2019 21:22:09   

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

261 Days ago

PHILADELPHIA, Feb. 01, 2019 (GLOBE NEWSWIRE) -- Beneficial Bancorp, Inc. (“Beneficial” or the “Company”) (NASDAQ GS: BNCL), the parent company of Beneficial Bank (the “Bank”), today announced its financial results for the quarter and year ended December 31, 2018.  Beneficial recorded net income of $13.7 million and $47.8 million, or $0.19 and $0.65 per diluted share, for the quarter and year ended December 31, 2018, respectively, compared to a net loss of $3.3 million and net income of $23.9 million, or ($0.05) and $0.32 per diluted share, for the quarter and year ended December 31, 2017.  Net income for the quarter and year ended December 31, 2017 included a one- time $13.1 million charge, or $0.18 per diluted share, of additional income tax expense related to the enactment of the Tax Cuts and Jobs Act and its impact on the re-measurement of our net deferred tax assets due to the reduction in the corporate income tax rate for 2018 to 21% from 35%.

On January 31, 2019, the Company declared a cash dividend of 6 cents per common share, payable on or after February 21, 2019, to common shareholders of record at the close of business on February 11, 2019.

Highlights for the quarter and year ended December 31, 2018 are as follows:

  • Net interest margin totaled 3.38% and 3.29% for the quarter and year ended December 31, 2018 compared to 3.28% and 3.12% for the same periods in 2017, respectively.  During the quarter and year ended December 31, 2018, the net interest margin was positively impacted 15 and 9 basis points, respectively, by loan prepayment income compared to 23 and 7 basis points for the same periods in 2017.
  • Net interest income increased $2.1 million, or 4.7%, and $10.5 million, or 6.2%, for the quarter and year ended December 31, 2018 compared to the same periods in the prior year.
  • During the year ended December 31, 2018, Beneficial recorded a $3.3 million net gain on the sale of the assets and liabilities of Beneficial Insurance Services, LLC, a former consolidated wholly owned subsidiary of Beneficial Bank.
  • Non-interest expense for the quarter and year ended December 31, 2018 includes $848 thousand and $3.1 million, respectively, of professional fees associated with the pending merger of Beneficial with WSFS Financial Corporation.
  • Our non-performing assets to total assets ratio decreased to 0.52% at December 31, 2018 compared to 0.60% at December 31, 2017. Non-performing assets decreased $4.4 million to $30.5 million at December 31, 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 2018.
  • Asset quality metrics continued to remain strong with non-performing assets to total assets, excluding government guaranteed student loans, of 0.38% as of December 31, 2018.  Our allowance for loan losses totaled $43.3 million, or 1.11% of total loans, as of December 31, 2018, compared to $43.3 million, or 1.07% of total loans, as of December 31, 2017.  
  • Our effective tax rate decreased to 28.6% and 25.5% for the quarter and year ended December 31, 2018, respectively, compared to 121.3% and 57.8% for the same periods in the prior year.  The decrease in income tax expense and the effective tax rate for the quarter and year ended December 31, 2018 compared to the same periods in 2017 is primarily due to the previously discussed $13.1 million of additional income tax expense recorded during the quarter ended December 31, 2017 related to the passage of the Tax Cuts and Jobs Act, enacted on December 22, 2017, which lowered the federal corporate tax rate for 2018 to 21% from 35%.   
  • During the year ended December 31, 2018, the Company purchased 945,400 shares under its previously announced stock repurchase plan.  Our tangible capital to tangible assets ratio increased to 15.75% at December 31, 2018 compared to 15.33% at December 31, 2017.  Tangible book value per share totaled $11.89 at December 31, 2018.

Balance Sheet
Total assets were $5.81 billion at December 31, 2018 consistent with the $5.80 billion of total assets at December 31, 2017. 

Cash and cash equivalents increased $294.9 million, or 52.9%, to $852.5 million at December 31, 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.
           
Investments decreased $137.4 million, or 15.8%, to $733.4 million at December 31, 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 $139.5 million, or 3.5%, to $3.89 billion at December 31, 2018, from $4.03 billion at December 31, 2017.  During the year ended December 31, 2018, our residential real estate portfolio increased $25.3 million, or 2.7%.  However, this growth was offset by a $54.7 million decrease in our total commercial portfolio and an $110.1 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 $63.1 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 auto lending business in the first quarter of 2017.

Deposits increased $22.1 million, or 0.5%, to $4.17 billion at December 31, 2018, from $4.15 billion at December 31, 2017.  Deposit growth was primarily achieved through organic core deposit growth of $86.7 million in interest business checking accounts and $44.9 million of growth in time deposits, partially offset by the maturity of $75.4 million of higher cost brokered certificates of deposit, which we did not renew given our excess liquidity position.  The growth in interest business checking accounts is primarily due to one large commercial deposit account.

Borrowings decreased $25.4 million to $515.0 million at December 31, 2018.  During the year ended December 31, 2018, the Company paid off $25.8 million of a higher cost trust preferred debenture.

Stockholders’ equity increased $15.7 million, or 1.5%, to $1.05 billion at December 31, 2018, from $1.03 billion at December 31, 2017.  The increase in stockholders’ equity was primarily due to $47.8 million of net income during the year ended December 31, 2018, partially offset by the declaration of cash dividends and stock repurchases.

Net Interest Income
For the quarter ended December 31, 2018, net interest income was $47.1 million, an increase of $2.1 million, or 4.7%, from the quarter ended December 31, 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 3.38% for the quarter ended December 31, 2018 as compared to 3.28% for the same period in 2017.  During the quarter ended December 31, 2018, the net interest margin was positively impacted by 15 basis points due to loan prepayments compared to a 23 basis points positive impact during the quarter ended December 31, 2017.

For the year ended December 31, 2018, Beneficial reported net interest income of $180.4 million, an increase of $10.5 million, or 6.2%, from the year ended December 31, 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 3.29% for the year ended December 31, 2018, from 3.12% for 2017.  During the year ended December 31, 2018, the net interest margin was positively impacted by nine basis points due to loan prepayments compared to a seven basis points positive impact during the year ended December 31, 2017.

Non-interest Income
For the quarter ended December 31, 2018, non-interest income totaled $4.9 million, a decrease of $2.2 million, or 31.0%, from the quarter ended December 31, 2017.  The decrease was primarily due to the sale of the assets and liabilities of Beneficial Insurance Services, LLC on September 30, 2018.  Beneficial Insurance Services, LLC contributed $1.6 million of income from insurance and advisory services during the quarter ended December 31, 2017.

For the year ended December 31, 2018, non-interest income totaled $28.9 million, an increase of $105 thousand, or 0.4%, from the year ended December 31, 2017.  The increase was primarily due to a $3.3 million net gain on the sale of the assets and liabilities of Beneficial Insurance Services, LLC.  This increase to non-interest income was partially offset by a $2.4 million decrease in income from insurance and advisory services during the year ended December 31, 2018 compared to the prior year.  The increase was also partially offset by a $518 thousand decrease in mortgage banking and SBA income.

Non-interest Expense
For the quarter ended December 31, 2018, non-interest expense totaled $33.2 million, a decrease of $2.1 million, or 6.1%, from the quarter ended December 31, 2017.  The decrease in non-interest expense was primarily due a $1.5 million decrease in marketing expense due to a reduction in advertising given the pending merger of Beneficial with WSFS Financial Corporation.  The decrease in non-interest expense was also attributed to a $362 thousand decrease in net losses on other assets due to the $319 thousand gain on the sale of a closed branch during the fourth quarter of 2018.

For the year ended December 31, 2018, non-interest expense totaled $141.3 million, an increase of $2.5 million, or 1.8%, from the year ended December 31, 2017.  The increase in non-interest expense was primarily due to an increase in salaries and employee benefits of $2.8 million due primarily to the costs associated with the build out of Neumann Finance Company, our majority-owned equipment financing subsidiary, an increase in our minimum wage and annual merit increases.  The increase in non-interest expense was also due to $3.1 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 $1.0 million decrease in net losses on other assets due to the $319 thousand gain on the sale of a closed branch during 2018 and $685 thousand of branch closure expenses recorded during the year ended December 31, 2017.  These increases to non-interest expense were also partially offset by an $816 thousand decrease in stock-based compensation expense, and an $867 thousand decrease in intangible amortization expense as a result of certain intangible assets reaching the end of their estimated lives. 

Income Taxes
For the quarter ended December 31, 2018, we recorded a provision for income taxes of $5.4 million, reflecting an effective tax rate of 28.6%, compared to a provision for income taxes of $19.1 million, reflecting an effective tax rate of 121.3%, for the quarter ended December 31, 2017.  For the year ended December 31, 2018, we recorded a provision for income taxes of $16.2 million, reflecting an effective tax rate of 25.5%, compared to a provision for income taxes of $32.8 million, reflecting an effective tax rate of 57.8%, for the year ended December 31, 2017.  The decrease in the effective tax rate in the quarter and year ended December 31, 2018 compared to the same periods a year ago is primarily due to the passage of the Tax Cuts and Jobs Act, which was enacted on December 22, 2017 and lowered the federal corporate tax rate for 2018 to 21% from 35%.

Asset Quality
Non-performing assets decreased $4.4 million to $30.5 million at December 31, 2018, compared to $34.9 million at December 31, 2017 and our ratio of non-performing assets to total assets decreased to 0.52% at December 31, 2018 compared to 0.60% at December 31, 2017.  The decrease was primarily due to the sale of one large commercial non-performing loan totaling $7.6 million during 2018.  Net charge-offs for the year ended December 31, 2018, totaled $4.6 million, or 12 basis points of average loans, compared to net charge-offs of $3.1 million, or 8 basis points annualized of average loans, in 2017.   As a result of net charge-offs, we recorded a $4.6 million provision for loan losses during the year ended December 31, 2018 compared to a $3.1 million provision for loan losses during the prior year.  Our allowance for loan losses totaled $43.3 million, or 1.11% of total loans, as of December 31, 2018, compared to $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 December 31, 2018, Beneficial’s tangible capital to tangible assets totaled 15.75%.  In addition, at December 31, 2018, we had the ability to borrow up to $2.2 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
  12/31/2018   9/30/2018   12/31/2017   Capitalized Ratio   12/31/2018
                   
Tier 1 Leverage (to average assets) 16.03%   15.78%   16.19%   5.0%   $630,294
Common Equity Tier 1 Capital (to risk weighted assets) 23.11%   22.55%   22.12%   6.5%   658,404
Tier 1 Capital (to risk weighted assets) 23.11%   22.55%   22.76%   8.0%   598,933
Total Capital Ratio (to risk weighted assets) 24.20%   23.64%   23.84%   10.0%   563,021

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

              Minimum Well   Excess Capital
  12/31/2018   9/30/2018   12/31/2017   Capitalized Ratio   12/31/2018
                   
Tier 1 Leverage (to average assets) 13.61%   13.36%   14.46%   5.0%   $492,325
Common Equity Tier 1 Capital (to risk weighted assets) 19.63%   19.10%   20.34%   6.5%   520,427
Tier 1 Capital (to risk weighted assets) 19.63%   19.10%   20.34%   8.0%   460,957
Total Capital Ratio (to risk weighted assets) 20.72%   20.19%   21.42%   10.0%   425,044

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)

  December 31,   September 30,   December 31,
    2018       2018       2017  
ASSETS:          
Cash and cash equivalents:          
Cash and due from banks $60,231     $46,919     $45,048  
Interest-bearing deposits   792,244       796,019       512,567  
Total cash and cash equivalents   852,475       842,938       557,615  
           
Investment securities:          
Available-for-sale   285,622       287,060       310,308  
Held-to-maturity   424,571       438,649       537,302  
Federal Home Loan Bank stock, at cost   23,182       23,182       23,210  
Total investment securities   733,375       748,891       870,820  
           
Loans and leases:   3,894,605       3,926,381       4,034,130  
Allowance for loan and lease losses   (43,262)       (43,137)       (43,267)  
Net loans and leases   3,851,343       3,883,244       3,990,863  
           
Accrued interest receivable   18,751       18,519       17,512  
           
Bank premises and equipment, net   67,488       68,723       70,573  
           
Other assets:          
Goodwill   159,671       159,671       169,002  
Bank owned life insurance   81,035       80,793       80,172  
Other intangibles   1,330       1,428       2,884  
Other assets   41,457       63,416       39,387  
Total other assets   283,493       305,308       291,445  
Total assets $5,806,925     $5,867,623     $5,798,828  
           
LIABILITIES AND STOCKHOLDERS’ EQUITY:          
Liabilities:          
Deposits:          
Non-interest bearing deposits $557,535     $552,111     $563,185  
Interest bearing deposits   3,615,063       3,694,869       3,587,308  
Total deposits   4,172,598       4,246,980       4,150,493  
Borrowed funds   515,000       515,000       540,439  
Other liabilities   69,177       68,497       73,006  
Total liabilities   4,756,775       4,830,477       4,763,938  
Commitments and contingencies          
Stockholders’ equity:          
Preferred stock – $.01 par value   -       -       -  
Common stock – $.01 par value   848       848       845  
Additional paid-in capital   818,886       812,346       799,658  
Unearned common stock held by employee stock ownership plan   (24,610)       (25,227)       (27,078)  
Retained earnings   422,875       413,481       405,497  
Accumulated other comprehensive loss, net   (28,780)       (28,148)       (26,127)  
Treasury stock, at cost   (139,227)       (136,622)       (118,497)  
Total Beneficial Bancorp, Inc. stockholders’ equity   1,049,992       1,036,678       1,034,298  
Noncontrolling interest   158       468       592  
Total stockholders' equity   1,050,150       1,037,146       1,034,890  
Total liabilities and stockholders’ equity $5,806,925     $5,867,623     $5,798,828  
           

BENEFICIAL BANCORP, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Income
(Dollars in thousands, except per share amounts)

  For the Quarter Ended   For the Year Ended
  December 31,   September 30,   December 31,   December 31,   December 31,
    2018       2018       2017       2018       2017  
INTEREST INCOME:                  
Interest and fees on loans and leases $46,363     $44,990     $45,736     $179,821     $172,404  
Interest on overnight investments   4,876       3,524       1,664       12,769       4,330  
Interest and dividends on investment securities:                  
Taxable   4,585       4,543       5,067       19,116       21,058  
Tax-exempt   18       18       18       72       76  
Total interest income   55,842       53,075       52,485       211,778       197,868  
                   
INTEREST EXPENSE:                  
Interest on deposits:                  
Interest bearing checking accounts   751       708       599       2,746       2,442  
Money market and savings deposits   2,514       2,227       1,513       8,156       5,981  
Time deposits   3,264       2,950       2,681       11,493       9,698  
Total   6,529       5,885       4,793       22,395       18,121  
Interest on borrowed funds   2,232       2,233       2,740       9,019       9,879  
Total interest expense   8,761       8,118       7,533       31,414       28,000  
Net interest income   47,081       44,957       44,952       180,364       169,868  
Provision for loan and lease losses   -       1,916       1,018       4,581       3,118  
Net interest income after provision for loan and lease losses   47,081       43,041       43,934       175,783       166,750  
                   
NON-INTEREST INCOME:                  
Insurance and advisory commission and fee income   -       1,356       1,607       4,681       7,124  
Service charges and other income   4,838       4,942       5,200       19,207       19,543  
Mortgage banking and SBA income   106       309       358       1,587       2,105  
Net gain on sale of insurance agency   -       3,297       -       3,297       -  
Net (loss) gain on investment securities   (2)       (23)       -       98       (7)  
Total non-interest income   4,942       9,881       7,165       28,870       28,765  
                   
NON-INTEREST EXPENSE:                  
Salaries and employee benefits   19,066       19,482       19,555       78,253       75,225  
Occupancy expense   2,540       2,520       2,590       10,580       10,336  
Depreciation, amortization and maintenance   2,367       2,300       2,324       9,244       9,507  
Marketing expense   25       1,478       1,525       4,897       4,684  
Intangible amortization expense   98       199       213       696       1,563  
FDIC insurance   400       416       431       1,658       1,744  
Merger charges   848       2,261       -       3,109       -  
Professional fees   993       1,130       1,370       4,360       4,606  
Classified loan and other real estate owned related expense   330       356       188       1,274       1,136  
Other   6,566       6,243       7,182       27,191       29,996  
Total non-interest expense   33,233       36,385       35,378       141,262       138,797  
                   
Income before income taxes   18,790       16,537       15,721       63,391       56,718  
Income tax expense   5,374       4,286       19,065       16,156       32,794  
                   
CONSOLIDATED NET INCOME $13,416     $12,251       ($3,344)     $47,235     $23,924  
Net loss attributable to noncontrolling interest   (309)       (139)       (8)       (609)       (8)  
NET INCOME ATTRIBUTABLE TO BENEFICIAL BANCORP, INC. $13,725     $12,390       ($3,336)     $47,844     $23,932  
                   
EARNINGS PER SHARE – Basic $0.19     $0.17       ($0.05)     $0.66     $0.33  
EARNINGS PER SHARE – Diluted $0.19     $0.17       ($0.05)     $0.65     $0.32  
                   
DIVIDENDS DECLARED PER SHARE $0.06     $0.06       ($0.06)     $0.49     $0.24  
                   
Average common shares outstanding – Basic   71,108,476       71,012,206       70,831,659       70,912,191       70,574,037  
Average common shares outstanding – Diluted   71,650,648       71,638,486       70,831,659       71,517,248       71,301,286  
                                       

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

  For the Quarter Ended   For the Year Ended
  December 31, 2018   December 31, 2017   December 31, 2018   December 31, 2017
  Average Yield /   Average Yield /   Average Yield /   Average Yield /
  Balance Rate   Balance Rate   Balance Rate   Balance Rate
                       
Investment securities: $1,599,583 2.34%     $1,419,309 1.89%     $1,455,288 2.18%     $1,359,777 1.87%  
Overnight investments   857,780 2.22%       500,691 1.30%       653,763 1.93%       373,859 1.14%  
Stock   23,182 6.39%       23,210 4.66%       23,190 6.82%       23,046 4.66%  
Other investment securities   718,621 2.35%       895,408 2.15%       778,335 2.26%       962,872 2.08%  
                       
Loans and leases:   3,902,190 4.70%       4,003,152 4.52%       3,977,510 4.49%       4,050,177 4.23%  
Residential   976,176 4.02%       936,031 3.92%       964,158 3.94%       911,922 3.93%  
Commercial real estate   1,677,006 4.84%       1,665,059 4.78%       1,681,365 4.53%       1,664,726 4.26%  
Business and small business   797,596 5.05%       837,988 4.63%       840,457 4.86%       861,799 4.43%  
Personal   451,412 5.00%       564,074 4.57%       491,530 4.80%       611,730 4.32%  
                       
Total interest earning assets $5,501,773 4.01%     $5,422,461 3.83%     $5,432,798 3.87%     $5,409,954 3.64%  
                       
Deposits: $3,685,847 0.70%     $3,632,094 0.52%     $3,632,625 0.62%     $3,647,278 0.50%  
Savings   1,290,999 0.59%       1,291,485 0.34%       1,294,649 0.47%       1,297,543 0.34%  
Money market   396,381 0.60%       434,947 0.37%       407,574 0.49%       441,528 0.35%  
Demand   1,052,764 0.26%       902,421 0.24%       993,309 0.26%       914,404 0.24%  
Demand - municipals   118,730 0.16%       125,699 0.18%       113,875 0.17%       122,636 0.19%  
Total core deposits   2,858,874 0.45%       2,754,552 0.30%       2,809,407 0.39%       2,776,111 0.30%  
                       
Time deposits   826,973 1.57%       877,542 1.21%       823,218 1.40%       871,167 1.11%  
                       
Borrowings   515,000 1.70%       540,474 1.98%       520,045 1.73%       536,222 1.82%  
                       
Total interest bearing liabilities $4,200,847 0.83%     $4,172,568 0.72%     $4,152,670 0.76%     $4,183,500 0.67%  
                       
Non-interest bearing deposits   562,410       534,075       561,740       525,209  
                       
Net interest margin   3.38%       3.28%       3.29%       3.12%  
                       


ASSET QUALITY INDICATORS December 31,   September 30,   December 31,
(Dollars in thousands)   2018       2018       2017  
           
Non-performing assets:          
Non-accruing loans $21,138     $15,427     $20,521  
Accruing loans past due 90 days or more   8,589       13,202       14,152  
Total non-performing loans $29,727     $28,629     $34,673  
           
Real estate owned   754       274       189  
           
Total non-performing assets $30,481     $28,903     $34,862  
           
Non-performing loans to total loans and leases   0.76%       0.73%       0.86%  
Non-performing assets to total assets   0.52%       0.49%       0.60%  
Non-performing assets less accruing government guaranteed          
student loans past due 90 days or more to total assets   0.38%     0.27%     0.36%  
ALLL to total loans and leases   1.11%       1.10%       1.07%  
ALLL to non-performing loans   145.53%       150.68%       124.79%  
ALLL to non-performing loans, excluding government          
guaranteed student loans   204.66%       279.62%       210.84%  
                       

Key performance ratios (annualized) are as follows for the quarter and year ended (unaudited):

  For the Quarter Ended   For the Year Ended
  December 31,   September 30,   December 31,   December 31,
  2018   2018   2017   2018   2017
PERFORMANCE RATIOS:                  
(annualized)                  
Return on average assets 0.96%   0.66%   (0.25%)   0.81%   0.41%
Return on average assets (excluding tax reform act impact) 0.96%   0.66%   0.65%   0.81%   0.63%
Return on average equity 5.42%   3.76%   (1.38%)   4.61%   2.29%
Return on average equity (excluding tax reform act impact) 5.42%   3.76%   3.63%   4.61%   3.57%
Net interest margin 3.38%   3.26%   3.28%   3.29%   3.12%
Net charge-off ratio (0.01%)   0.19%   0.10%   0.12%   0.08%
Efficiency ratio 63.88%   66.35%   68.20%   67.51%   69.93%
Efficiency ratio (excluding merger charges) 62.25%   62.23%   68.20%   66.02%   69.93%
Tangible common equity 15.75%   15.34%   15.33%   15.75%   15.33%
Tangible common equity (excluding tax reform act impact) 15.75%   15.34%   15.53%   15.75%   15.53%

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

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