Beneficial Mutual Bancorp, Inc. (“Beneficial”) (NASDAQGS: BNCL), the parent company of Beneficial Bank (the “Bank” or the “Company”), today announced its financial results for the three months ended March 31, 2011.
For the three months ended March 31, 2011, Beneficial recorded a net loss of $898 thousand, or $0.01 per share, compared to net loss of $356 thousand, or $0.00 per share, for the three months ended December 31, 2010 and net income of $7.5 million, or $0.10 per share, for the three months ended March 31, 2010.
During the quarter, the Bank completed a comprehensive review of its operating cost structure and finalized an expense management reduction program which resulted in a $4.1 million restructuring charge. The Bank reduced its workforce by 4% and announced that it was consolidating five of its branch locations. Financial results for the quarter were also impacted by increased provisions for loan losses due primarily to a large charge-off in our commercial construction portfolio. During the quarter the Company recorded a provision for credit losses of $10.0 million compared to $8.0 million for the three months ended December 31, 2010 and $5.0 million for the three months ended March 31, 2010. In 2011, a significant portion of our commercial real estate and commercial construction portfolios contractually mature (approximately 33%). We expect that market conditions coupled with the large amount of commercial maturities will result in an elevated provision for credit losses in 2011. We continue to charge-off the collateral deficiency on all classified collateral dependent loans across all portfolios once they are 90 days delinquent.
At March 31, 2011, the Company’s allowance for loan losses totaled $47.4 million, or 1.7% of total loans, compared to $45.4 million, or 1.6% of total loans, at December 31, 2010.
Gerard Cuddy, Beneficial’s President and CEO, stated, “Although a difficult process, the expense reduction program finalized during the first quarter will improve operating efficiency and better position our Company when economic conditions improve. Credit costs continue to have a significant impact on our business and we expect these costs to remain elevated throughout 2011. Despite a difficult quarter, we increased net interest income, grew non-interest deposits and decreased borrowings. We will continue to be focused on improving our core profitability as we manage through the current credit environment.”