For all of the attention (if not hype) given to banking markets in southern states like Texas, Florida, Georgia, and North Carolina, it's worth remembering that there are still worthwhile markets in a lot of other places. Philadelphia isn't going to top the charts for population or household income growth, but it is still a large and growing market where banks like Beneficial Bancorp (NASDAQ:BNCL) can do well for shareholders by focusing on service quality and outperforming national and super-regional banks like Wells Fargo (NYSE:WFC), PNC (NYSE:PNC), and Bank of America (NYSE:BAC).
Not that far removed from its full conversion from a mutual holding company, Beneficial is flush with capital and holds a top 10 position in the Philly MSA. While current reported returns on assets and equity don't look good, I expect improving operating leverage in the coming years to complement steady loan growth, growth in non-interest income, better spreads, and capital deployment into M&A. Beneficial isn't undervalued today on its own merits, but I suppose there's a potential relative value call for more aggressive investors.
Flush With Capital, Beneficial Looking To Build Value For Shareholders