Jan. 31 --Shares of Beneficial Mutual Bancorp Inc. , the largest bank still based in Philadelphia , closed at a five-year high of $11.95 , up 87 cents , Thursday after Beneficial said the U.S. Department of Justice had finished a home-loan-discrimination investigation without recommending any charges against the company. Investors have been waiting for Beneficial to get out from under the shadow of a possible government prosecution, which it disclosed last April, so the bank can get Federal Deposit Insurance Corp. approval to complete its conversion from a depositor-owned mutual savings bank to a shareholder-owned institution. As a fully public company, Beneficial, with $3.7 billion in deposits as of Dec. 31 , could more easily raise capital to make more loans and build new branches -- or to sell at a premium price to new owners, enriching shareholders. After reporting an 11 percent drop in profits for last year, Beneficial told investors: "In late January, we received correspondence from the [ Department of Justice ] indicating that the DOJ had completed its review and determined that the matter did not require enforcement action by the DOJ and was being referred back to the Federal Deposit Insurance Corporation . We are not able to determine whether further action will be taken" by the FDIC , and won't be asking regulators' permission or selling shares "until this matter is resolved." The review had focused on bank practices under federal laws prohibiting discrimination in granting credit, home equity loans, or mortgages based on factors including race, religion, or gender. Though profits were down, the 60-branch Beneficial still reported higher earnings than some analysts expected, wrote Matthew Breese in a report to clients of Sterne, Agee & Leach Inc. , of Birmingham, Ala. Loans rose very slightly, after falling for more than a year. But investors focused more on the "positive step" toward a share sale, than recent profits, he added. Beneficial's profits were actually weaker than analyst Frank Schiraldi , at Sandler O'Neill + Partners , New York , had projected. But "more important than the earnings trends" was Justice's "no enforcement action" decision, he told clients in a report Thursday. JoeD@phillynews.com 215-854-5194 @PhillyJoeD www.inquirer.com/phillydeals ___ (c)2014 The Philadelphia Inquirer Visit The Philadelphia Inquirer at www.philly.com Distributed by MCT Information Services
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