OREANDA-NEWS. Beneficial Bancorp, Inc. (“Beneficial”) (NASDAQ:BNCL), the parent company of Beneficial Bank (the “Bank”), today announced its financial results for the three and six months ended June 30, 2016.  Beneficial recorded net income of $2.7 million and $7.8 million, or $0.04 and $0.10 per diluted share, for the three and six months ended June 30, 2016, respectively, compared to net income of $7.1 million and $12.3 million, or $0.09 and $0.16 per diluted share, for the three and six months ended June 30, 2015.  Net income for the three and six months ended June 30, 2016 included $8.6 million and $9.5 million, respectively, of merger and restructuring charges related to the acquisition of Conestoga Bank and the Bank’s expense management reduction program.

During the second quarter, 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.  Repurchases will be conducted through open market purchases, which may include purchases under a trading plan adopted pursuant to Securities and Exchange Commission Rule 10b5-1, or through privately negotiated transactions.  Repurchases will be made from time to time depending on market conditions and other factors.  There is no guarantee as to the exact number of shares to be repurchased by Beneficial.

On July 21, 2016, Beneficial Bancorp declared a cash dividend of 6 cents per share, payable on or after August 11, 2016, to common shareholders of record at the close of business on August 1, 2016. This is the first dividend declared in Beneficial’s 163 year history.

Highlights for the three and six months ended June 30, 2016 are as follows:

  • Beneficial completed the acquisition and integration of Conestoga Bank during the quarter which increased total loans by $518.1 million and total deposits by $588.4 million.
  • Net interest margin totaled 3.08% and 2.96% for the quarter and six months ended June 30, 2016 compared to 2.83% and 2.79% for the same period in 2015, respectively.  Margin has benefited from organic loan growth, the impact of the Conestoga acquisition, and continued improvement in the mix of our balance sheet.
  • For the six months ended June 30, 2016, net interest income increased $9.7 million, or 15.7%, to $71.0 million for the six months ended June 30, 2016 compared to $61.4 million for the same period in 2015, primarily due to the Conestoga acquisition and growth in our loan portfolio.
  • For the six months ended June 30, 2016, our loan portfolio increased $857.0 million, or 29.1%, due primarily to the acquisition of Conestoga loans of $518.1 million (17.6% growth), the purchase of $117.5 million of commercial real estate loans (4.0% growth) and net organic growth of $221.4 million (7.5% since year-end and 15.0% annualized).
  • Asset quality metrics continued to remain strong during the quarter with non-performing assets, excluding student loans, to total assets of 0.30% as of June 30, 2016 and March 31, 2016.  Our allowance for loan losses totaled $44.5 million, or 1.17% of total loans, as of June 30, 2016 compared to $45.5 million, or 1.55% of total loans, as of December 31, 2015.  The decline in the coverage ratio is primarily due to $518.1 million of acquired Conestoga loans that were recorded at fair value.
  • We continue to deploy our capital from the second step conversion.  Our tangible capital to tangible assets decreased to 15.95% at June 30, 2016 compared to 21.04% at December 31, 2015.  The decrease in this ratio can be attributed to our first share repurchase program and the impact of the acquisition of Conestoga Bank.  Tangible book value per share totaled $11.04 at June 30, 2016.

Gerard Cuddy, Beneficial’s President and CEO, stated “We continued to make progress against our strategic priorities during the quarter. We successfully completed our acquisition of Conestoga Bank, organically grew our loan portfolio, improved our balance sheet mix and implemented an expense reduction program.  We believe that these actions will continue to improve our financial results. We also completed our first share repurchase program and announced a second repurchase program, as well as declared a cash dividend to our shareholders. Our focus remains on employee engagement, a superior customer experience, prudent capital management and organic growth to continue to improve the financial performance of our organization.”

Balance Sheet
Total assets increased $687.4 million, or 14.2%, to $5.51 billion at June 30, 2016 compared to $4.83 billion at December 31, 2015.  The increase in total assets was primarily due to the $649.8 million of assets acquired as part of the acquisition of Conestoga Bank. 

Cash and cash equivalents decreased $130.4 million to $103.5 million at June 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 $124.6 million, or 9.2%, to $1.2 billion at June 30, 2016 compared to $1.4 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 $857.0 million, or 29.1%, to $3.80 billion at June 30, 2016 from $2.94 billion at December 31, 2015.  The increase in loans was primarily due to the acquisition of Conestoga loans of $518.1 million, net organic growth of $221.4 million and the purchase of $117.5 million of commercial real estate loans. Commercial loans include shared national credits, which are participations in loans or loan commitments of at least $20.0 million that are shared by three or more banks.  The shared national credit loans are typically variable rate with terms ranging from one to seven years.  At June 30, 2016, shared national credits totaled $245.3 million compared to $222.4 million at December 31, 2015. All of these loans were classified as pass rated as of June 30, 2016 as all payments are current and the loans are performing in accordance with their contractual terms.

Deposits increased $588.6 million, or 17.1%, to $4.04 billion at June 30, 2016 from $3.45 billion at December 31, 2015.  The $588.6 million increase in deposits during the six months ended June 30, 2016 was primarily due to the $588.4 million of deposits acquired as part of the acquisition of Conestoga Bank.

Borrowings increased $180.0 million to $370.4 million at June 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 $89.2 million, or 8.0%, to $1.03 billion at June 30, 2016 from $1.12 billion at December 31, 2015.  The decrease in stockholders’ equity was primarily due to the repurchase of 8,291,859 shares of common stock during the six months ended June 30, 2016, partially offset by net income for the first six months of 2016.

Net Interest Income
For the three months ended June 30, 2016, net interest income was $38.8 million, an increase of $7.6 million, or 24.2%, from the three months ended June 30, 2015. The increase in net interest income was primarily due to the impact of the Conestoga acquisition, and improvement in our balance sheet mix and related interest earning assets with growth occurring in our higher yielding loan portfolio with reductions in cash and investment levels.  The net interest margin totaled 3.08% for the three months ended June 30, 2016 as compared to 2.83% for the same period in 2015.

For the six months ended June 30, 2016, Beneficial reported net interest income of $71.0 million, an increase of $9.7 million, or 15.7%, from the six months ended June 30, 2015. The increase in net interest income was primarily due to the acquisition of Conestoga Bank and higher interest earning assets as a result of the deployment of the second-step conversion proceeds.   Our net interest margin increased to 2.96% for the six months ended June 30, 2016 from 2.79% 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 June 30, 2016, non-interest income totaled $6.0 million, a decrease of $1.2 million, or 16.1%, from the three months ended June 30, 2015.  The decrease was primarily due to a $1.1 million gain recorded on a limited partnership investment in 2015.

For the six months ended June 30, 2016, non-interest income totaled $11.4 million, a decrease of $1.4 million, or 11.2%, from the six months ended June 30, 2015. The decrease was primarily due to a $1.1 million gain recorded on a limited partnership investment in 2015 and a $321 thousand decrease in mortgage banking income, partially offset by a $285 thousand increase in interchange fees.

Non-interest Expense

During the quarter, the Compensation Committee of the Board of Directors of Beneficial approved restricted stock grants to employees, officers and directors of the Company, pursuant to the 2016 Omnibus Equity Incentive that was previously approved by the Company’s shareholders. An aggregate of approximately 2,275,000 shares of restricted stock were granted. Generally, the grants to directors vest over a 30 month period and the grants to employees and officers vest over a three year period. The estimated full quarter after tax expense of these grants is approximately $1.7 million.

For the three months ended June 30, 2016, non-interest expense totaled $40.1 million, an increase of $10.1 million, or 33.5%, from the three months ended June 30, 2015.  The increase in non-interest expense was primarily due to $8.6 million of merger and restructuring charges related to the acquisition of Conestoga Bank and an expense management reduction program.  In addition, salaries and employee benefits increased $732 thousand due primarily to annual merit increases as well as $429 thousand of expense related to shares granted in June 2016 in connection with the 2016 Omnibus Incentive Plan. 

For the six months ended June 30, 2016, non-interest expense totaled $70.4 million, an increase of $9.9 million, or 16.4%, from the six months ended June 30, 2015. The increase in non-interest expense was primarily due to $7.9 million of merger and restructuring charges related to the acquisition of Conestoga Bank and $1.6 million related to an expense management reduction program.  In addition, salaries and employee benefits increased $1.1 million due primarily to annual merit increases as well as $429 thousand of expense related to shares granted in June 2016 in connection with the 2016 Omnibus Incentive Plan. These increases were partially offset by a $662 thousand decrease in marketing costs associated with 2015 rebranding initiatives.

Income Taxes
For the three months ended June 30, 2016, we recorded a provision for income taxes of $2.0 million, reflecting an effective tax rate of 42.0%, compared to a provision for income taxes of $2.9 million, reflecting an effective tax rate of 29.5% for the three months ended June 30, 2015.  For the six months ended June 30, 2016, we recorded a provision for income taxes of $4.2 million, reflecting an effective tax rate of 35.2%, compared to a provision for income taxes of $5.0 million, reflecting an effective tax rate of 28.7%, for the six months ended June 30, 2015. The increase in income tax expense and the effective tax rate during these periods is due to a lower ratio of tax exempt income compared to pre-tax income for the three and six months ended June 30, 2016 as compared to the same periods in 2015.

Asset Quality
Asset quality metrics remain strong as non-performing loans, excluding government guaranteed student loans, decreased to $14.5 million at June 30, 2016, compared to $14.8 million at December 31, 2015.  Our ratio of non-performing loans to total assets, excluding government guaranteed student loans, decreased to 0.30% at June 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 six months ended June 30, 2016. As a result of the improvement in our asset quality metrics and net recoveries received, we recorded a $1.6 million and $3.6 million negative provision for loan losses for the three and six months ended June 30, 2015, respectively. Net charge-offs totaled $981 thousand during the six months ended June 30, 2016 compared to $738 thousand of net recoveries during the same period in 2015.

Our allowance for loan losses totaled $44.5 million, or 1.17% of total loans, as of June 30, 2016 compared to $45.2 million, or 1.44% of total loans, as of March 31, 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 $518.1 million as of the acquisition date, our loan loss reserves coverage ratio totaled 1.37% as of June 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 June 30, 2016, Beneficial’s tangible capital to tangible assets totaled 15.95%. In addition, at June 30, 2016, we had the ability to borrow up to $1.7 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
  6/30/2016   12/31/2015   6/30/2015   Capitalized Ratio   6/30/2016
                   
Tier 1 Leverage (to average assets)   17.00 %     22.38 %     22.07 %     5.0 %   $ 629,934  
Common Equity Tier 1 Capital (to risk weighted assets)   22.32 %     33.36 %     36.80 %     6.5 %     615,598  
Tier 1 Capital (to risk weighted assets)   22.94 %     34.13 %     37.54 %     8.0 %     581,166  
Total Capital Ratio (to risk weighted assets)   24.09 %     35.38 %     38.80 %     10.0 %     548,178  
                   
                   

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

                     
                Minimum Well   Excess Capital
  6/30/2016   12/31/2015   6/30/2015     Capitalized Ratio   6/30/2016
                     
Tier 1 Leverage (to average assets)   15.15 %     16.86 %     16.62 %       5.0 %   $ 532,469  
Common Equity Tier 1 Capital (to risk weighted assets)   20.45 %     25.74 %     28.28 %       6.5 %     542,217  
Tier 1 Capital (to risk weighted assets)   20.45 %     25.74 %     28.28 %       8.0 %     483,931  
Total Capital Ratio (to risk weighted assets)   21.61 %     26.99 %     29.54 %       10.0 %     451,036  
                     

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. 

BENEFICIAL BANCORP, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Financial Condition 
(Dollars in thousands, except share amounts)
   
   
    June 30,   March 31,   December 31,   June 30,
      2016       2016       2015       2015  
ASSETS:                
Cash and Cash Equivalents:                
Cash and due from banks   $ 51,622     $ 40,381     $ 43,978     $ 48,114  
Interest-bearing deposits       51,868         71,384         189,942         238,189  
Total cash and cash equivalents       103,490         111,765         233,920         286,303  
                 
Investment Securities:                
Available-for-sale       576,374         582,402         655,162         689,775  
Held-to-maturity       642,826         673,222         696,310         745,730  
Federal Home Loan Bank stock, at cost       16,431         8,786         8,786         8,786  
Total investment securities       1,235,631         1,264,410         1,360,258         1,444,291  
                 
Loans and leases:       3,798,493         3,151,785         2,941,446         2,708,508  
Allowance for loan and lease losses       (44,519 )       (45,234 )       (45,500 )       (47,792 )
Net loans and leases       3,753,974         3,106,551         2,895,946         2,660,716  
                 
Accrued interest receivable       16,314         14,794         14,298         13,657  
                 
Bank premises and equipment, net       77,842         72,465         73,213         79,159  
                 
Other assets:                
Goodwill       169,239         121,973         121,973         121,973  
Bank owned life insurance       79,612         65,095         64,827         64,647  
Other intangibles       5,605         3,915         4,389         5,203  
Other assets       72,382         53,726         57,871         60,550  
Total other assets       326,838         244,709         249,060         252,373  
Total assets   $ 5,514,089     $ 4,814,694     $ 4,826,695     $ 4,736,499  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY:                
Liabilities:                
Deposits:                
Non-interest bearing deposits   $ 505,029     $ 409,716     $ 409,232     $ 381,667  
Interest bearing deposits       3,535,542         3,100,774         3,042,691         2,993,464  
Total deposits       4,040,571         3,510,490         3,451,923         3,375,131  
Borrowed funds       370,414         190,410         190,405         190,396  
Other liabilities       76,788         67,206         68,821         69,162  
Total liabilities       4,487,773         3,768,106         3,711,149         3,634,689  
Commitments and contingencies                
Stockholders’ equity:                
Preferred stock – $.01 par value       -         -         -         -  
Common stock – $.01 par value       832         831         829         829  
Additional paid-in capital       762,685         789,978         787,503         784,587  
Unearned common stock held by employee stock ownership plan       (30,780 )       (31,397 )       (32,014 )       (33,248 )
Retained earnings       390,722         387,974         382,951         372,364  
Accumulated other comprehensive loss, net       (17,001 )       (18,562 )       (23,374 )       (22,382 )
Treasury stock, at cost       (80,142 )       (82,236 )       (349 )       (340 )
Total stockholders’ equity       1,026,316         1,046,588         1,115,546         1,101,810  
Total liabilities and stockholders’ equity   $ 5,514,089     $ 4,814,694     $ 4,826,695     $ 4,736,499  
                 
BENEFICIAL BANCORP, INC. AND SUBSIDIARIES  
Unaudited Consolidated Statements of Income  
(Dollars in thousands, except per share amounts)  
                     
  For the Three Months Ended   For the Six Months Ended  
  June 30,   March 31,   June 30,   June 30,   June 30,  
    2016       2016       2015       2016       2015    
INTEREST INCOME:                    
Interest and fees on loans and leases $ 37,743     $ 29,990     $ 28,196     $ 67,733     $ 54,461    
Interest on overnight investments   161       259       157       421       426    
Interest and dividends on investment securities:                    
Taxable   6,166       6,360       7,215       12,525       15,126    
Tax-exempt   325       325       394       650       892    
Total interest income   44,395       36,934       35,962       81,329       70,905    
                     
INTEREST EXPENSE:                    
Interest on deposits:                    
Interest bearing checking accounts   556       466       381       1,022       805    
Money market and savings deposits   1,503       1,322       1,334       2,825       2,641    
Time deposits   1,886       1,628       1,762       3,515       3,595    
Total   3,945       3,416       3,477       7,362       7,041    
Interest on borrowed funds   1,674       1,278       1,261       2,952       2,508    
Total interest expense   5,619       4,694       4,738       10,314       9,549    
Net interest income   38,776       32,240       31,224       71,015       61,356    
Provision for loan losses   -       -       (1,600 )     -       (3,600 )  
Net interest income after provision for loan losses   38,776       32,240       32,824       71,015       64,956    
                     
NON-INTEREST INCOME:                    
Insurance and advisory commission and fee income   1,539       1,990       1,486       3,530       3,472    
Service charges and other income   4,383       3,385       5,425       7,768       8,932    
Mortgage banking income   101       (28 )     267       73       394    
Net loss on sale of investment securities   (4 )     (4 )     (4 )     (8 )     (9 )  
Total non-interest income   6,019       5,343       7,174       11,363       12,789    
                     
NON-INTEREST EXPENSE:                    
Salaries and employee benefits   16,577       15,817       15,845       32,394       31,337    
Occupancy expense   2,453       2,293       2,211       4,745       5,008    
Depreciation, amortization and maintenance   2,571       2,317       2,174       4,889       4,475    
Marketing expense   889       913       1,148       1,802       2,464    
Intangible amortization expense   558       474       467       1,032       933    
FDIC insurance   625       553       512       1,178       1,060    
Merger and restructuring charges   8,621       838       -       9,459       -    
Professional fees   1,386       1,029       1,297       2,415       2,852    
Classified loan and other real estate owned related expense   173       292       799       465       1,091    
Other   6,200       5,807       5,542       12,008       11,265    
Total non-interest expense   40,053       30,333       29,995       70,387       60,485    
                     
Income before income taxes   4,742       7,250       10,003       11,991       17,260    
Income tax expense   1,994       2,227       2,948       4,220       4,954    
                     
NET INCOME $ 2,748     $ 5,023     $ 7,055     $ 7,771     $ 12,306    
                     
EARNINGS PER SHARE – Basic $ 0.04     $ 0.07     $ 0.09     $ 0.11     $ 0.16    
EARNINGS PER SHARE – Diluted $ 0.04     $ 0.07     $ 0.09     $ 0.10     $ 0.16    
                     
Average common shares outstanding – Basic   71,197,288       76,162,515       78,374,704       73,679,901       78,414,226    
Average common shares outstanding – Diluted   72,078,696       76,993,671       79,058,474       74,536,502       79,067,396    
                     

 

BENEFICIAL BANCORP, INC. AND SUBSIDIARIES
Unaudited Selected Consolidated Financial and Other Data  
(Dollars in thousands)
         
  Three Months Ended   Six Months Ended
  June 30, 2016   March 31, 2016   June 30, 2015   June 30, 2016   June 30, 2015
  Average Yield /   Average Yield /   Average Yield /   Average Yield /   Average Yield /
  Balance Rate   Balance Rate   Balance Rate   Balance Rate   Balance Rate
                             
Investment securities: $ 1,378,633     1.93 %   $ 1,506,173     1.84 %   $ 1,722,562     1.80 %   $ 1,442,514     1.88 %   $ 1,827,831     1.80 %
Overnight investments   125,509     0.51 %     205,383     0.50 %     248,284     0.25 %     165,446     0.50 %     338,834     0.25 %
Stock   14,405     4.45 %     8,787     4.45 %     8,793     4.78 %     11,707     4.42 %     8,813     12.76 %
Other investment securities   1,238,719     2.04 %     1,292,003     2.04 %     1,465,485     2.05 %     1,265,361     2.04 %     1,480,184     2.09 %
                             
Loans and leases:   3,638,837     4.14 %     2,975,549     4.02 %     2,681,433     4.19 %     3,340,332     4.04 %     2,566,080     4.25 %
Residential   788,063     4.09 %     734,020     4.16 %     702,994     4.29 %     764,500     4.10 %     689,588     4.31 %
Commercial real estate   1,450,685     4.02 %     1,087,469     3.94 %     848,740     4.19 %     1,291,323     3.92 %     750,260     4.36 %
Business and small business   746,406     4.32 %     531,762     3.77 %     506,122     4.09 %     643,489     4.06 %     500,479     4.04 %
Personal   653,683     4.23 %     622,298     4.22 %     623,577     4.17 %     641,020     4.21 %     625,753     4.20 %
                             
Total interest earning assets $ 5,017,470     3.53 %   $ 4,481,722     3.29 %   $ 4,403,995     3.26 %   $ 4,782,846     3.39 %   $ 4,393,911     3.23 %
                             
Deposits: $ 3,511,893     0.45 %   $ 3,067,501     0.45 %   $ 3,005,930     0.46 %   $ 3,328,874     0.44 %   $ 3,085,282     0.46 %
Savings   1,233,829     0.34 %     1,155,603     0.34 %     1,144,825     0.35 %     1,200,586     0.34 %     1,133,524     0.35 %
Money market   492,471     0.38 %     399,739     0.34 %     421,801     0.33 %     460,104     0.35 %     424,283     0.33 %
Demand   854,054     0.24 %     763,857     0.23 %     652,839     0.21 %     814,445     0.23 %     724,268     0.20 %
Demand - municipals   129,905     0.17 %     128,946     0.11 %     125,558     0.11 %     129,425     0.14 %     135,378     0.11 %
Total core deposits   2,710,259     0.31 %     2,448,145     0.29 %     2,345,023     0.29 %     2,604,560     0.30 %     2,417,453     0.29 %
                             
Time deposits   801,634     0.95 %     619,356     1.06 %     660,907     1.07 %     724,314     0.98 %     667,829     1.09 %
                             
Borrowings   306,221     2.20 %     190,462     2.70 %     190,395     2.66 %     255,123     2.33 %     190,425     2.66 %
                             
Total interest bearing liabilities $ 3,818,114     0.59 %   $ 3,257,963     0.58 %   $ 3,196,325     0.59 %   $ 3,583,997     0.58 %   $ 3,275,707     0.59 %
                             
Non-interest bearing deposits   498,311         395,940         379,221         451,117         372,988    
                             
Net interest margin     3.08 %       2.87 %       2.83 %       2.96 %       2.79 %
           
ASSET QUALITY INDICATORS June 30,   March 31,   December 31,   June 30,
(Dollars in thousands)   2016       2016       2015       2015  
               
Non-performing assets:              
Non-accruing loans $ 14,500     $ 13,731     $ 14,768     $ 12,812  
Accruing loans past due 90 days or more   20,138       21,223       22,900       25,460  
Total non-performing loans $ 34,638       34,954       37,668       38,272  
               
Real estate owned   1,999       827       1,276       1,359  
               
Total non-performing assets $ 36,637     $ 35,781     $ 38,944     $ 39,631  
               
Non-performing loans to total loans and leases   0.91 %     1.11 %     1.28 %     1.41 %
Non-performing assets to total assets   0.66 %     0.74 %     0.81 %     0.84 %
Non-performing assets less accruing government guaranteed student loans past due 90 days or more to total assets   0.30 %     0.30 %     0.33 %     0.30 %
ALLL to total loans and leases   1.17 %     1.44 %     1.55 %   1.76 %
ALLL to non-performing loans   128.53 %     129.41 %     120.79 %     124.87 %
ALLL to non-performing loans, excluding government guaranteed student loans   307.03 %     329.43 %     308.10 %     373.03 %
               

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

  For the Three Months Ended   For the Six Months Ended
  June 30,   March 31,   December 31,   June 30,
    2016       2016       2015       2016       2015  
PERFORMANCE RATIOS:                  
(annualized)                  
Return on average assets   0.21 %     0.42 %     0.39 %     0.31 %     0.53 %
Return on average equity   1.11 %     1.87 %     1.67 %     1.49 %     2.45 %
Net interest margin   3.08 %     2.87 %     2.84 %     2.96 %     2.79 %
Efficiency ratio   89.41 %     80.71 %     79.50 %     85.44 %     81.58 %
Efficiency ratio (excluding merger & restructuring charges)   70.16 %     78.47 %     77.49 %     73.96 %     81.58 %
Tangible common equity   15.95 %     19.64 %     21.04 %     15.95 %     21.14 %