Prudential Bancorp, Inc. operates as the bank holding company for Prudential Bank that provides various banking products and services.
The company’s banking office network consists of the headquarters and main office and nine additional full-service branch offices. Seven of the banking offices are located in Philadelphia (Philadelphia County), one is in Drexel Hill, Delaware County and one is in Huntingdon Valley, Montgomery County, Pennsylvania. The company maintains ATMs at all of the banking...
Prudential Bancorp, Inc. operates as the bank holding company for Prudential Bank that provides various banking products and services.
The company’s banking office network consists of the headquarters and main office and nine additional full-service branch offices. Seven of the banking offices are located in Philadelphia (Philadelphia County), one is in Drexel Hill, Delaware County and one is in Huntingdon Valley, Montgomery County, Pennsylvania. The company maintains ATMs at all of the banking offices. The company also provides on-line and mobile banking services. Majority of the company’s business activities are conducted within a few hours’ drive from Philadelphia and include eastern Pennsylvania, New Jersey, Delaware and southern New York.
The company primarily engages in attracting deposits from the general public and using those funds to invest in loans and securities. The company’s principal sources of funds are deposits, repayments of loans and mortgage-backed securities, maturities and calls 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 primarily 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. The company focuses on originating commercial real estate and construction and land development lending.
Lending Activities
One-to-Four Family Residential Mortgage Lending
One of the company’s primary lending activities continues to be the origination or purchase of loans secured by first mortgages on one-to-four family residential properties located in the company’s market area. The company’s single-family residential mortgage loans are obtained through the lending department and branch personnel.
The company offers adjustable-rate mortgage and balloon loans, which are structured as shorter term fixed-rate loans (approximately 10 years or less) followed by a final payment of the full amount of the principal due at the maturity date. It also originates fixed-rate, fully amortizing mortgage loans with maturities of 15, 20 or 30 years, for resale in the secondary market on a servicing release basis.
The company underwrites one-to-four family residential mortgage loans with loan-to-value ratios of approximately 95%, provided that the borrower obtains private mortgage insurance on loans that exceed 80% of the appraised value or sales price, whichever is less, of the secured property.
The company’s single-family residential mortgage loans also include home equity loans and lines of credit. Its home equity loans are fully amortizing and have terms to maturity of approximately 20 years. While home equity loans also are secured by the borrower’s residence, the company obtains a second mortgage position on these loans. Its lending policy requires that its home equity loans have loan-to-value ratios, when combined with any first mortgage, of a maximum 80% or less at time of origination, although the preponderance of its home equity loans have combined loan-to-value ratios of 75% or less at time of origination. The company also offers home equity revolving lines of credit with interest tied to the Wall Street Journal prime rate plus a stipulated margin. The company has a second mortgage on the borrower’s residence as collateral on its home equity lines. In addition, its home equity lines have loan-to-value ratios (combined with any loan secured by a first mortgage) of 75% or less at time of origination. The company’s customers might apply for home equity lines, as well as home equity loans at any banking office.
Construction and Land Development Lending
The company maintains its focus on construction and land development loan originations. Other than its loan participations, loans to finance the construction of condominium projects or single-family homes and subdivisions are offered to experienced builders in its primary market area with whom it has an established relationship. Residential construction and development loans are offered with terms of approximately 36 months although typically the terms are 12 to 24 months. Construction loans also include loans to acquire land and loans to develop the basic infrastructure, such as roads and sewers. The majority of the construction loans are secured by properties located in the company’s primary lending area.
Multi-Family Residential and Commercial Real Estate Loans
The commercial real estate and multi-family residential real estate loan portfolio consists primarily of loans secured by small office buildings, strip shopping centers, small apartment buildings and other properties used for commercial and multi-family residential purposes located in the company’s market area. Substantially all of the properties securing the multi-family residential and commercial real estate loans are located in the company’s primary lending area.
Although terms for commercial real estate and multi-family residential loans vary, the company’s underwriting standards allow for terms of approximately 15 years with loan-to-value ratios of not more than 75%. Most of the loans are structured with balloon payments of 10 years or less and amortization periods of approximately 25 years.
Commercial Business Loans
Commercial business loans are made to small to mid-sized businesses in the company’s market area primarily to provide working capital. Small business loans might have adjustable or fixed rates of interest and have terms of three years or less but might be as long as 15 years. In addition, the company obtains personal guarantees from the principals of the borrower with respect to commercial business loans and frequently obtain real estate as additional collateral.
Consumer Lending Activities
The company offers various types of consumer loans, such as loans secured by deposit accounts and unsecured personal loans. Consumer loans are originated primarily through existing and walk-in customers and direct advertising.
Investment Activities
As of September 30, 2021, the company’s securities portfolio included U.S. government and agency obligations; state and political subdivisions; mortgage-backed securities - U.S. government agencies; and corporate debt securities.
Deposits
The company offers various deposit accounts with a range of interest rates and terms. Deposits consist of checking, both interest-bearing and non-interest-bearing, money market, savings and certificate of deposit accounts.
Regulation
As a bank holding company, the company is subject to the regulation of the Board of Governors of the Federal Reserve System (Federal Reserve Board).
The bank is a Pennsylvania-chartered savings bank and is subject to regulation and examination by the Pennsylvania Department of Banking and Securities (the ‘Department’) and by the Federal Deposit Insurance Corporation, and is also subject to certain requirements established by the Federal Reserve Board.
The company is a registered as bank holding company under the Bank Holding Company Act and is subject to regulation and supervision by the Federal Reserve Board and by the Department.
The deposits of the bank are insured to the maximum extent permitted by the Deposit Insurance Fund and are backed by the full faith and credit of the U.S. Government. The bank has established policies and procedures to ensure compliance with the federal anti-money laundering provisions.
The bank received a ‘needs to improve’ Community Reinvestment Act rating in its completed examination. The bank is a member of the Federal Home Loan Bank of Pittsburgh.
The company’s common stock is registered with the Securities and Exchange Commission under Section 12(b) of the Securities Exchange Act of 1934. The company is subject to the proxy and tender offer rules, insider trading reporting requirements and restrictions, and certain other requirements under the Securities Exchange Act of 1934.
As a public company, the company is subject to the Sarbanes-Oxley Act of 2002 which addresses, among other issues, corporate governance, auditing and accounting, executive compensation, and enhanced and timely disclosure of corporate information.
History
Prudential Bancorp, Inc. was founded in 1886. The company, a Pennsylvania corporation, was incorporated in 1886.
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