Beneficial Mutual Bancorp: A bright spot in banking

Banking is not exactly an industry generating a lot of investor attention these days, as an epidemic of home foreclosures start showing up on the balance sheets of all those banks that made questionable loans in the first place. Five banks have already failed this year and many others are racking up sizable losses.

But not all homes in the country are in foreclosure, and likewise, not all banks are struggling. Beneficial Mutual Bancorp Inc. (Nasdaq:BNCL) is a mid-tier bank in Philadelphia serving a region of the northeastern United States that has been relatively immune to the housing crisis, and its stock and balance sheet reflect that stability. The company’s shares have risen steadily since going public at $9.21 a year ago and on Monday closed at $12.03.

“This is not a company that’s been significantly affected by the sub-prime lending crisis,” said Boenning & Scattergood analyst Jason O’Donnell. “If they do have any exposure to bad debt, it is minimal.”

O’Donnell is noted in a research report in July that the turmoil in the banking sector had created “some unusual opportunities for investors to buy sound financial institutions at cheap prices” and said that Beneficial Mutual had a strong capital position, and a strong earnings outlook.

Beneficial Mutual’s stock is not widely covered by analysts, but two who do track the stock project its earnings will rise to $0.27 per share this year and $0.33 next year from $0.06 per share a year ago. They estimate revenues will rise to $140 million this year and 161.2 million, from $97.5 million a year ago.

Since it began disclosing financial results a year ago, the bank’s interest income has grown steadily to $48.2 million in the latest quarter, from $31.4 million in the same quarter last year. Profitability has rapidly shot up as well, to $6.1 million . . .

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