Profile: Prudential Bancorp of Pennsylvania Inc (PBIP.OQ)
10 Mar 2014
Prudential Bancorp, Inc. of Pennsylvania, incorporated on September 9, 2004, is a mid-tier holding company for Prudential Savings Bank (the Bank). The Bank is a wholly owned subsidiary of the Company. Prudential Mutual Holding Company, a Pennsylvania corporation, is the mutual holding company parent of the Company. As of September 30, 2012, Prudential Mutual Holding Company owns 74.6% of the Company. As of September 30, 2012, its banking office network consisted of its headquarters and main office and six full-service branch offices. Six of its banking offices are located in Philadelphia and one is in Drexel Hill in neighboring Delaware County, Pennsylvania. It maintains automated teller machines (ATMs) at six of its banking offices. It also provides on-line banking services. The Bank is engaged in attracting deposits from the general public and using those funds to invest in loans and securities.
The Bank’s sources of funds are deposits, repayments of loans and mortgage-backed securities, maturities of investment securities and interest-bearing deposits, funds provided from operations and funds borrowed from the Federal Home Loan Bank of Pittsburgh. These funds are used for the origination of various loan types, including single-family residential mortgage loans, construction and land development loans, non-residential or commercial real estate mortgage loans, home equity loans and lines of credit, commercial business loans and consumer loans. In addition to its offering loans and deposits it also offers, on an agency basis, securities and insurance products to its customers through an affiliation with a third-party broker-dealer. It is also a health care area with a number of teaching and research hospitals being operated.
As of September 30, 2012, the Bank’s net loan portfolio totaled $260.7 million or 53.1% of total assets. As of September 30, 2012, the Company had no real estate loans. In addition to originating loans, it purchases single-family residential loans from correspondents. Prudential Savings Bank does not originate subprime loans.
The Bank’s lending activity includes the origination or purchase of loans secured by first mortgages on one- to four-family residences located in its market area. Its single-family residential mortgage loans are obtained through its lending department and branch personnel and through correspondents. As of September 30, 2012, the balance of such loans amounted $191.3 million, or 74.0% of total loans. Its construction loans include loans for the construction of multi-family residential or mixed-use properties. As of September 30, 2012, its construction and loan development loans amounted to $14.9 million, or 5.7% of its loan portfolio. As of September 30, 2012, its multi-family residential and commercial real estate loans amounted to $24.4 million or 9.3% of its total loan portfolio.
The Bank’s commercial real estate and residential multi-family real estate loan portfolio consists of loans secured by small office buildings, strip shopping centers, small apartment buildings and other properties used for commercial and multi-family purposes located in its market area. As of September 30, 2012, the average commercial and multi-family real estate loan size was approximately $262,000. The Bank offers consumer loans, such as loans secured by deposit accounts and unsecured personal loans. As of September 30, 2012, $523,000, or 0.2% of the total loan portfolio consisted of these types of loans. As of September 30, 2012, its commercial business loans amounted to $632,000 or 0.2% of the total loan portfolio. Its commercial business loans are made to small to mid-sized businesses in its market area to provide working capital.
The Bank’s invests in debt securities issued by the United States Government and the United States agencies, municipal bonds, and corporate debt obligations, as well as investments in preferred and common stock of government agencies and government sponsored enterprises, such as Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal Home Loan Bank of Pittsburgh (FHLB) and, to a lesser extent, other equity securities. Securities in these categories are classified as investment securities for financial reporting purposes. As of September 30, 2010, its investment and mortgage-backed securities amounted to $129.1 million or 26.3% of total assets. In addition, it invests in mortgage-backed securities and municipal securities and other securities. Its securities are classified as available for sale, held to maturity, or trading, at the time of acquisition. As of September 30, 2010, it had $112.7 million of investment and mortgage-backed securities classified as held to maturity, $63.1 million of investment and mortgage-backed securities classified as available for sale and no securities classified as trading securities. Its mortgage-backed securities consist of mortgage pass-through certificates issued by Government National Mortgage Association (Ginnie Mae), Fannie Mae or Freddie Mac. As of September 30, 2012, approximately 6.2% of the mortgage-backed securities were non-agency securities.
Sources of Funds
Deposits, loan repayments and prepayments, proceeds from sales of loans, cash flows generated from operations and FHLB advances are the sources of the Bank’s funds for use in lending, investing and for other general purposes. It offers a range of deposit accounts with a range of interest rates and terms. Its deposits consist of checking, both interest-bearing and non-interest-bearing, money market, savings and certificate of deposit accounts. As of September 30, 2012, 41.2% of the funds deposited with Prudential Savings Bank were in core deposits, which are deposits other than certificates of deposit. As of September 30, 2012, it had $483,000 in outstanding FHLB advances and $115.6 million of additional FHLB advances available.
The Company has one direct subsidiary Prudential Savings Bank. As of September 30, 2012, the Bank’s sole subsidiary was PSB Delaware, Inc. (PSB) holds investment securities. As of September 30, 2012, PSB had assets of $109.8 million consisting of mortgage-backed and investment securities.
Prudential Bancorp of Pennsylvania Inc
1834 Oregon Avenue
PHILADELPHIA PA 19145