BNCL Beneficial Bancorp, Inc.

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 SheetTotal 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 IncomeFor 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 ExpenseFor 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 TaxesFor 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 QualityNon-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.

CapitalBeneficial’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 SUBSIDIARIESUnaudited 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 SUBSIDIARIESUnaudited 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 SUBSIDIARIESUnaudited 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. CestareExecutive Vice President and Chief Financial OfficerPHONE: (215) 864-6009