April 4, 2014

Dear Stockholder:

You are cordially invited to attend the annual meeting of stockholders of Beneficial Mutual Bancorp, Inc.  The meeting will be held at the Company’s headquarters located at 1818 Beneficial Bank Place, 1818 Market Street, 12th Floor, Philadelphia, Pennsylvania on Thursday, May 15, 2014, at 8:30 a.m., local time.

The notice of annual meeting and proxy statement appearing on the following pages describe the formal business to be transacted at the meeting.  Directors and officers of the Company, as well as representatives of KPMG LLP, the Company’s independent registered public accounting firm, will be present to respond to appropriate questions from stockholders.

It is important that your shares are represented at this meeting, whether or not you attend the meeting in person and regardless of the number of shares you own.  To make sure your shares are represented, we urge you to vote via the Internet, by telephone or by completing and mailing a proxy card promptly.  If you attend the meeting, you may vote in person even if you have previously mailed a proxy card.

We look forward to seeing you at the meeting.

1818 Beneficial Bank Place

1818 Market Street

Philadelphia, PA 19103

(215) 864-6000

NOTICE OF 2014 ANNUAL MEETING OF STOCKHOLDERS

BENEFICIAL MUTUAL BANCORP, INC.

PROXY STATEMENT

GENERAL INFORMATION

We are providing this proxy statement to you in connection with the solicitation of proxies by the Board of Directors of Beneficial Mutual Bancorp, Inc. for the 2014 annual meeting of stockholders and for any adjournment or postponement of the meeting.  In this proxy statement, we may also refer to Beneficial Mutual Bancorp, Inc. as “Beneficial Mutual Bancorp,” the “Company,” “we,” “our” or “us.”

Beneficial Mutual Bancorp is the holding company for Beneficial Bank, which has also operated under the name Beneficial Mutual Savings Bank.  In this proxy statement, we may also refer to Beneficial Bank as the “Bank.”

We are holding the 2014 annual meeting at the Company’s headquarters located at 1818 Beneficial Bank Place, 1818 Market Street, Philadelphia, Pennsylvania on Thursday, May 15, 2014 at 8:30 a.m., local time.

We intend to mail a notice of internet availability of proxy materials to stockholders of record beginning on or about April 4, 2014.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS

FOR THE STOCKHOLDER MEETING TO BE HELD ON MAY 15, 2014

This proxy statement and the Company’s 2013 Annual Report to Stockholders are available at http://ir.thebeneficial.com/annuals.cfm.

On this website, the Company also posts the Company’s 2013 Annual Report on Form 10-K, as filed with the U.S. Securities and Exchange Commission, including the Company’s 2013 audited consolidated financial statements.

INFORMATION ABOUT VOTING

Who Can Vote at the Meeting

You are entitled to vote your shares of Beneficial Mutual Bancorp common stock that you owned as of March 17, 2014.  As of the close of business on March 17, 2014, a total of 76,618,246 shares of Beneficial Mutual Bancorp common stock were outstanding, including 45,792,775 shares of common stock held by Beneficial Savings Bank MHC.  Each share of common stock has one vote.

Ownership of Shares; Attending the Meeting

You may own shares of Beneficial Mutual Bancorp in one of the following ways:

·                                          Directly in your name as the stockholder of record; or

·                                          Indirectly through a broker, bank or other holder of record in “street name.”

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If your shares are registered directly in your name, you are the holder of record of these shares and we are sending these proxy materials directly to you.  As the holder of record, you have the right to give your proxy directly to us or to vote in person at the meeting.

As the beneficial owner of shares held in street name, you have the right to direct your broker, bank or other holder of record how to vote by filling out a voting instruction form that accompanies your proxy materials.  Your broker, bank or other holder of record may allow you to provide voting instructions by telephone or by the Internet.  Please see the instruction form provided by your broker, bank or other holder of record that accompanies this proxy statement.  If you hold your shares in street name, you will need proof of ownership to be admitted to the meeting.  A recent brokerage statement or letter from a bank or broker are examples of proof of ownership.  If you want to vote your shares of Beneficial Mutual Bancorp common stock held in street name in person at the meeting, you must obtain a written proxy in your name from the broker, bank or other nominee who is the record holder of your shares.

Quorum and Vote Required

Quorum.  We will have a quorum and will be able to conduct the business of the annual meeting if the holders of a majority of the outstanding shares of common stock entitled to vote are present at the meeting, either in person or by proxy.

Votes Required for Proposals.  At this year’s annual meeting, stockholders will elect three directors to serve for a term of three years.  In voting on the election of directors, you may vote in favor of the nominees, withhold votes as to all nominees, or withhold votes as to specific nominees.  There is no cumulative voting for the election of directors.  Directors must be elected by a plurality of the votes cast at the annual meeting.  This means that the nominees receiving the greatest number of votes will be elected.

In voting on the ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm and on the non-binding resolution to approve the compensation of the Company’s named executive officers, you may vote in favor of each proposal, vote against each proposal or abstain from voting.  Each proposal requires obtaining the affirmative vote of a majority of votes cast at the annual meeting is required.  The results of the vote on the compensation of the named executive officers are not binding on the Board of Directors.

Effect of Not Casting Your Vote. If you hold your shares in street name, it is critical that you cast your vote if you want it to count in the election of directors. In the past, if you held your shares in street name and you did not indicate how you wanted your shares voted in the election of directors, your bank or broker was allowed to vote those shares on your behalf in the election of directors as they deemed appropriate.

Recent changes in regulation were made to take away the ability of your bank or broker to vote shares in the election of directors for which you do not provide voting instructions on a discretionary basis. Therefore, if you hold your shares in street name and you do not instruct your bank or broker how to vote in the election of directors or on the non-binding resolution to approve the compensation of the Company’s named executive officers, no votes will be cast on your behalf with respect to these matters.  These are referred to as “broker non-votes.”  Your bank or broker will, however, continue to have discretion to vote any shares for which you do not provide voting instructions on the ratification of the appointment of the Company’s independent registered public accounting firm. If you are a stockholder of record and you do not cast your vote, no votes will be cast on your behalf on any of the items of business at the annual meeting.

How We Count Votes.  If you return valid proxy instructions or attend the meeting in person, we will count your shares to determine whether there is a quorum, even if you abstain from voting.  Broker non-votes also will be counted to determine the existence of a quorum.

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In the election of directors, votes that are withheld will have no effect on the outcome of the election.

In counting votes on the proposal to ratify the selection of the Company’s independent registered public accounting firm and the non-binding resolution to approve the compensation of the Company’s named executive officers, abstentions and broker non-votes will not be counted as votes cast and will have no effect on the outcome of the voting on the proposals.

Because Beneficial Savings Bank MHC owns in excess of 50% of the outstanding shares of Beneficial Mutual Bancorp common stock, the votes it casts will ensure the presence of a quorum and determine the outcome of each of the proposals to be considered by stockholders at the annual meeting.

Voting by Proxy

The Company’s Board of Directors has prepared this proxy statement to request that you allow your shares of Company common stock to be represented at the annual meeting by the persons named in the Company’s proxy card.  All shares of Company common stock represented at the meeting by properly executed and dated proxies will be voted according to the instructions indicated on the proxy card.  If you sign, date and return a proxy card without giving voting instructions, your shares will be voted as recommended by the Company’s Board of Directors.  The Board of Directors recommends that you vote:

·                                          “FOR” each of the nominees for director;

·                                          “FOR” the ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm; and

·                                          “FOR” the approval of the compensation of the Company’s named executive officers;

If any matters not described in this proxy statement are properly presented at the annual meeting, the persons named in the proxy card will use their judgment to determine how to vote your shares.  This includes a motion to adjourn or postpone the annual meeting to solicit additional proxies.  If the annual meeting is postponed or adjourned, your shares of Company common stock may be voted by the persons named in the proxy card on the new meeting date, provided that the new meeting occurs within 30 days of the annual meeting date and you have not revoked your proxy.  The Company does not currently know of any other matters to be presented at the annual meeting.

You may revoke your proxy at any time before the vote is taken at the annual meeting.  To revoke your proxy, you must either advise the Corporate Secretary of the Company in writing before your common stock has been voted at the annual meeting, deliver a later-dated proxy or attend the meeting and vote your shares in person.  Attendance at the annual meeting will not in itself constitute revocation of your proxy.

Instead of voting by mailing a proxy card, registered stockholders can vote their shares of Company common stock via the Internet or by telephone.  The Internet and telephone voting procedures are designed to authenticate stockholders’ identities, allow stockholders to provide their voting instructions and confirm that their instructions have been recorded properly.  The deadline for voting via the Internet or by telephone is 11:59 p.m., Eastern time, on Thursday, May 14, 2014.

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Participants in the Beneficial Mutual Savings Bank Employee Savings and Stock Ownership Plan and/or the Beneficial Mutual Bancorp, Inc. 2008 Equity Incentive Plan

If you participate in the Beneficial Mutual Savings Bank Employee Savings and Stock Ownership Plan (the “KSOP”), you will receive a voting instruction card that reflects all shares you may direct the trustee to vote on your behalf under the KSOP.  Under the terms of the KSOP, all credited shares of Beneficial Mutual Bancorp common stock held by the KSOP trust are voted by the KSOP trustee, as directed by plan participants.  All shares of Company common stock held in the KSOP trust that have not been credited to participants’ accounts, and all credited shares for which no timely voting instructions are received, are voted by the KSOP trustee in the same proportion as shares for which the trustee has received timely voting instructions, subject to the exercise of its fiduciary duties.  If you participate in the Beneficial Mutual Bancorp, Inc. 2008 Equity Incentive Plan (the “Equity Incentive Plan”), you will also receive a voting instruction card to direct the Equity Incentive Plan trustee how to vote the unvested shares of Company common stock awarded to you under the Equity Incentive Plan.  The deadline for returning your voting instruction cards is May 8, 2014.

CORPORATE GOVERNANCE AND BOARD MATTERS

Director Independence

The Company’s Board of Directors currently consists of twelve members.  Each of the Company’s directors is independent under the listing requirements of the Nasdaq Stock Market, Inc., except for Gerard P. Cuddy, who is our President and Chief Executive Officer.

Board Leadership Structure and Board’s Role in Risk Oversight

The Board of Directors of the Company has determined that the separation of the offices of Chairman of the Board and President and Chief Executive Officer will enhance Board independence and oversight.  Moreover, the separation of the Chairman of the Board and President and Chief Executive Officer allows the President and Chief Executive Officer to better focus on his growing responsibilities of running the Company, enhancing shareholder value and expanding and strengthening our franchise while allowing the Chairman of the Board to lead the Board in its fundamental role of providing advice to and independent oversight of management.  Consistent with this determination, Frank A. Farnesi serves as Chairman of the Board of the Company and Gerard P. Cuddy serves as President and Chief Executive Officer of the Company.  Mr. Farnesi is independent under the listing requirements of the Nasdaq Stock Market, Inc.

To further strengthen the regular oversight of the full Board, all various committees of the Board are comprised of independent directors. As detailed in its report and the Compensation Discussion and Analysis appearing elsewhere in this proxy statement, the Compensation Committee reviews and evaluates the performance of all executive officers of the Company, including the President and Chief Executive Officer, and reports to the Board. The Audit Committee oversees the Company’s financial practices, regulatory compliance, accounting procedures and financial reporting functions.

Risk is inherent with every business, and how well a business manages risk can ultimately determine its success.  We face a number of risks, including credit risk, liquidity risk, interest rate risk, regulatory risk, business continuity risk, strategic risk, market risk, operational risk and reputational risk.  Management is responsible for the day-to-day management of risks the Company faces, while the Board, as a whole and through its committees, has responsibility for the oversight of risk management.  In 2012, the Company formed a Director Risk Committee.  This committee assists the Board and the Audit Committee in supervising the enterprise risk management activities of the Company and its subsidiaries and advises the Board with respect to the enterprise risk management framework of the

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Company. The Director Risk Committee is comprised of five members of the Board at least one of which must be also be a member of the Audit Committee.  Senior management also attends the meetings of the Director Risk Committee and is available to address any questions or concerns raised by the Board on risk management and any other matters.

Corporate Governance Policies

The Board of Directors has adopted a corporate governance policy to govern certain activities, including: the duties and responsibilities of directors; the composition, responsibilities and operations of the Board of Directors; the establishment and operation of Board committees; succession planning; convening executive sessions of independent directors; the Board of Directors’ interaction with management and third parties; and the evaluation of the performance of the Board of Directors and of the President and Chief Executive Officer.

Committees of the Board of Directors

The following table identifies our standing committees and their members at December 31, 2013.  All members of each committee are independent in accordance with the listing requirements of the Nasdaq Stock Market, Inc.  Each committee operates under a written charter that is approved by the Board of Directors that governs its composition, responsibilities and operation.  Each committee reviews and reassesses the adequacy of its charter at least annually.  The charters of all four committees are available in the Corporate Governance portion of the Investor Relations section of our website (www.thebeneficial.com).

* Denotes Chairperson

Audit Committee

The Audit Committee assists the Board of Directors in its oversight of the Company’s accounting, auditing, internal control structure and financial reporting matters, the quality and integrity of the Company’s financial reports and the Company’s compliance with applicable laws and regulations.  The Committee is also responsible for engaging the Company’s independent registered public accounting firm and monitoring its conduct and independence.  The Board of Directors has designated Donald F. Gayhardt, Jr. as an audit committee financial expert under the rules of the Securities and Exchange Commission.  Mr. Gayhardt is independent under the listing requirements of the Nasdaq Stock Market, Inc. applicable to audit committee members.

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Compensation Committee

The Compensation Committee approves the compensation objectives for the Company and the Bank, establishes the compensation for the Company’s senior management and conducts the performance review of the President and Chief Executive Officer.  The Compensation Committee reviews all components of compensation, including salaries, cash incentive plans, long-term incentive plans and various employee benefit matters.  Decisions by the Compensation Committee with respect to the compensation of executive officers are approved by the full Board of Directors.  See “Compensation Discussion and Analysis” for a discussion of the role of management and compensation consultants in determining and/or recommending the amount or form of executive compensation.

The Compensation Committee has assessed the Company’s compensation programs and has concluded that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company. Our internal risk management officer has also assessed the Company’s executive and broad-based compensation and benefits programs to determine if the programs’ provisions and operations create undesired or unintentional risk of a material nature. This risk assessment process included: a review of program policies and practices; a program analysis to identify risk and risk control related to the programs; and determinations as to the sufficiency of risk identification, the balance of potential risk to potential reward, risk control, and the support of the programs and their risks to company strategy. Although we reviewed all compensation programs, we focused on the programs with variability of payout, with the ability of a participant to directly affect payout and the controls on participant action and payout.

Based on the foregoing, we believe that our compensation policies and practices do not create inappropriate or unintended significant risk to the Company. We also believe that our incentive compensation arrangements provide incentives that do not encourage risk-taking beyond the organization’s ability to effectively identify and manage significant risks; are compatible with effective internal controls and our risk management practices; and are supported by the oversight and administration of the Compensation Committee with regard to executive compensation programs.

Compensation “clawback” provisions have been included in our equity award agreements and our Management Incentive Plan.  These provisions give us the right to cancel or recoup awards if an employee alters, inflates or inappropriately manipulates the Company’s financial results or violates any other recognized ethical business standards.

Director Risk Committee

The Director Risk Committee assists the Board and the Audit Committee in supervising the enterprise risk management activities of the Company and its subsidiaries and advises the Board with respect to the enterprise risk management framework of the Company. The Risk Committee reviews and assesses the Company’s risk exposure as it relates to capital, earnings and compliance with Company risk policies including credit risk, liquidity risk, interest rate risk, regulatory risk, business continuity risk, strategic risk, market risk, operational risk and reputation risk.

Corporate Governance Committee

The Company’s Corporate Governance Committee assists the Board of Directors in: (i) identifying individuals qualified to become Board members, consistent with criteria approved by the Board; (ii) recommending to the Board the director nominees for the next annual meeting; (iii) implementing policies and practices relating to corporate governance, including implementation of and monitoring adherence to corporate governance guidelines; and (iv) recommending director nominees for each committee.

Minimum Qualifications.  The Corporate Governance Committee has adopted a set of criteria that it considers when it selects individuals to be nominated for election to the Board of Directors.  A candidate must meet the eligibility requirements set forth in the Company’s Bylaws, which include a requirement that the candidate not have been subject to

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certain criminal or regulatory actions.  A candidate also must meet any qualification requirements set forth in any Board or committee governing documents.

If the candidate is deemed eligible for election to the Board of Directors, the Corporate Governance Committee will then evaluate the following criteria in selecting nominees:

·                                          Contributions to the range of talent, skill and expertise of the Board;

·                                          Financial, regulatory and business experience, knowledge of the banking and financial service industries, familiarity with the operations of public companies and ability to read and understand financial statements;

·                                          Familiarity with the Company’s market area and participation in and ties to local businesses and local civic, charitable and religious organizations;

·                                          Personal and professional integrity, honesty and reputation;

·                                          The ability to represent the best interests of the stockholders of the Company and the best interests of the institution;

·                                          The ability to devote sufficient time and energy to the performance of his or her duties;

·                                          Independence under applicable Securities and Exchange Commission and listing definitions; and

·                                          Current equity holdings in the Company.

The Corporate Governance Committee also will consider any other factors it deems relevant, including diversity and regulatory disclosure obligations.  The Committee will also consider the extent to which the candidate helps the Board of Directors reflect the diversity of the Company’s stockholders, employees, customers and communities. The Committee also may consider the current composition and size of the Board of Directors, the balance of management and independent directors and the need for audit committee expertise.

With respect to nominating an existing director for re-election to the Board of Directors, the Corporate Governance Committee will consider and review an existing director’s Board and committee attendance and performance; length of Board service; the experience, skills and contributions that the existing director brings to the Board; and independence.

Director Nomination Process.  The process that the Corporate Governance Committee follows to identify and evaluate individuals to be nominated for election to the Board of Directors is as follows:

For purposes of identifying nominees for the Board of Directors, the Corporate Governance Committee relies on personal contacts of the committee members and other members of the Board of Directors, as well as its knowledge of members of the communities served by the Bank.  The Corporate Governance Committee will also consider director candidates recommended by stockholders in accordance with the policy and procedures set forth below.  The Corporate Governance Committee has not previously used an independent search firm to identify nominees.

In evaluating potential nominees, the Corporate Governance Committee determines whether the candidate is eligible and qualified for service on the Board of Directors by evaluating the candidate under the criteria set forth above.  If such individual fulfills these criteria, the Corporate Governance Committee will conduct a check of the individual’s

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background and interview the candidate to further assess the qualities of the prospective nominee and the contributions he or she would make to the Board.

Considerations of Recommendations by Stockholders.  It is the policy of the Corporate Governance Committee of the Board of Directors of the Company to consider director candidates recommended by stockholders who appear to be qualified to serve on the Company’s Board of Directors.  The Corporate Governance Committee may choose not to consider an unsolicited recommendation if no vacancy exists on the Board of Directors and the Corporate Governance Committee does not perceive a need to increase the size of the Board of Directors.  To avoid the unnecessary use of the Corporate Governance Committee’s resources, the Corporate Governance Committee will consider only those director candidates recommended in accordance with the procedures set forth below.

Procedures to be Followed by Stockholders.  To submit a recommendation of a director candidate to the Corporate Governance Committee, a stockholder should submit the following information in writing, addressed to the Chairman of the Corporate Governance Committee, care of the Corporate Secretary, at the main office of the Company:

1.                                      The name of the person recommended as a director candidate;

2.                                      All information relating to such person that is required to be disclosed in solicitations of proxies for election of directors pursuant to Regulation 14A under the Securities Exchange Act of 1934;

3.                                      The written consent of the person being recommended as a director candidate to being named in the proxy statement as a nominee and to serving as a director if elected;

4.                                      As to the stockholder making the recommendation, the name and address of such stockholder as they appear on the Company’s books; provided, however, that if the stockholder is not a registered holder of the Company’s common stock, the stockholder should submit his or her name and address along with a current written statement from the record holder of the shares that reflects ownership of the Company’s common stock; and

5.                                      A statement disclosing whether such stockholder is acting with or on behalf of any other person and, if applicable, the identity of such person.

In order for a director candidate to be considered for nomination at the Company’s annual meeting of stockholders, the recommendation must be received by the Corporate Secretary of the Company at least 30 days before the date of the annual meeting.

Director Compensation

The table on the following page provides the compensation received by individuals who served as non-employee directors of the Company during 2013.  The table excludes perquisites, which did not exceed $10,000 in the aggregate for any director.

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(1)         Reflects the grant date fair value calculated in accordance with FASB ASC Topic 718 on outstanding restricted stock awards for each director based upon the Company’s stock price of $9.24 as of January 17, 2013, the date of grant for directors.  When shares become vested and are distributed from the trust in which they are held, the recipient will also receive an amount equal to accumulated cash and stock dividends (if any) paid with respect thereto, plus earnings thereon.  At December 31, 2013, the aggregate number of unvested restricted stock award shares held in trust was 10,000 for Mr. Farnesi, 7,000 for Ms. Buchholz and Mr. Gayhardt, 4,000 for Ms. Panzer and 7,500 for each of the other directors.

(2)         Reflects the grant date fair value calculated in accordance with FASB ASC Topic 718 on outstanding stock option awards for each of the non-employee directors excluding Ms. Panzer, based upon a fair value of $3.37 for each option using the Black-Scholes option pricing model. For information on the assumptions used to compute fair value, see Note 19 to the Notes to the Financial Statements included in the Form 10-K.  The actual value, if any, realized by a director from any option will depend on the extent to which the market value of the common stock exceeds the exercise price of the option on the date the option is exercised.  Accordingly, there is no assurance that the value realized by a director will be at or near the value estimated above.  The aggregate outstanding stock options at December 31, 2013 was 95,000 for Mr. Farnesi, 30,000 for Ms. Buchholz and Mr. Gayhardt, 17,500 for Ms. Panzer and 85,000 for each of the other directors.

(3)         Represents the Philadelphia city wage tax that the directors incurred in connection with their Board and committee fees.  The Company pays the Philadelphia wage tax on behalf of its directors.

(4)         Mr. Morris’ term as director of the Company, the MHC and the Bank ended effective as of May 16, 2013.

Cash Retainer and Meetings Fees for Non-Employee Directors.  The following table sets forth the applicable retainers and fees that were paid to non-employee directors for their service on the Bank’s Board of Directors during 2013.  Directors do not receive any additional fees for their service on the Boards of Directors of the Company or Beneficial Savings Bank MHC.

2008 Equity Incentive Plan.  The Beneficial Mutual Bancorp, Inc. 2008 Equity Incentive Plan provides the company with a vehicle to award long term incentives designed to provide compensation opportunities based on the creation of stockholder value.  The non-statutory stock options and restricted stock awards granted under the plan vest at a rate of 20% per year beginning on the first anniversary of the date of grant.  During the fiscal year ended December 31, 2013, each director except Frank Farnesi, was granted a non-statutory stock option for 10,000 shares of Beneficial Mutual Bancorp, Inc. common stock and a restricted stock award for 2,500 shares of Beneficial Mutual Bancorp, Inc. common stock.  Frank Farnesi was granted a non-statutory stock option for 20,000 shares of Beneficial Mutual Bancorp, Inc.

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common stock and a restricted stock award for 5,000 shares of Beneficial Mutual Bancorp, Inc. common stock for his service as board chairman.

Board and Committee Meetings

During the year ended December 31, 2013, both the Board of Directors of the Company and the Board of Trustees of the Bank held eight meetings.  No director attended fewer than 75% of the total meetings of the Company’s Board of Directors and the committees on which such individual served during 2013.

Director Attendance at the Annual Meeting of Stockholders

The Board of Directors encourages each director to attend the Company’s annual meeting of stockholders.  All of the Company’s current directors attended the Company’s 2013 annual meeting of stockholders.

Code of Ethics and Business Conduct

Beneficial Mutual Bancorp has adopted a Code of Ethics and Business Conduct that is designed to ensure that the Company’s directors and employees meet the highest standards of ethical conduct.  The Code of Ethics and Business Conduct, which applies to all employees and directors, addresses conflicts of interest, the treatment of confidential information, general employee conduct and compliance with applicable laws, rules and regulations.  In addition, the Code of Ethics and Business Conduct is designed to deter wrongdoing and promote honest and ethical conduct, the avoidance of conflicts of interest, full and accurate disclosure and compliance with all applicable laws, rules and regulations.  A copy of the Code of Ethics and Business Conduct is available in the Corporate Governance portion of the Investor Relations section of our website (www.thebeneficial.com).

AUDIT-RELATED MATTERS

Report of the Audit Committee

The Company’s management is responsible for the Company’s internal controls and financial reporting process.  The Company’s independent registered public accounting firm is responsible for performing an independent audit of the Company’s consolidated financial statements and issuing an opinion on the conformity of those financial statements with generally accepted accounting principles.  The independent registered public accounting firm is also responsible for issuing an attestation report on management’s assessment of the Company’s internal control over financial reporting.  The Audit Committee oversees the Company’s internal controls and financial reporting process on behalf of the Board of Directors and in accordance with the Audit Committee Charter.

In this context, the Audit Committee has met and held discussions with management and the independent registered public accounting firm.  Management represented to the Audit Committee that the Company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent registered public accounting firm.  The Audit Committee discussed with the independent registered public accounting firm matters required to be discussed by Statement on Auditing Standards No. 61, as amended, as adopted by the Public Company Accounting Oversight Board in Rule 3200T, including the quality, and not just the acceptability, of the accounting principles, the reasonableness of significant judgments and the clarity of the disclosures in the financial statements.

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In addition, the Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence and has discussed with the independent registered public accounting firm the firm’s independence from the Company and its management.  In concluding that the registered public accounting firm is independent, the Audit Committee considered, among other factors, whether the non-audit services provided by the firm were compatible with its independence.

The Audit Committee discussed with the Company’s independent registered public accounting firm the overall scope and plans for their audit.  The Audit Committee meets with the independent registered public accounting firm, with and without management present, to discuss the results of their examination, their evaluation of the Company’s internal controls, and the overall quality of the Company’s financial reporting.

In performing all of these functions, the Audit Committee acts only in an oversight capacity.  In its oversight role, the Audit Committee relies on the work and assurances of the Company’s management, which has the primary responsibility for financial statements and reports, and of the independent registered public accounting firm who, in their report, express an opinion on the conformity of the Company’s financial statements to generally accepted accounting principles.  The Audit Committee’s oversight does not provide it with an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or policies, or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations.  Furthermore, the Audit Committee’s considerations and discussions with management and the independent registered public accounting firm do not assure that the Company’s financial statements are presented in accordance with generally accepted accounting principles, that the audit of the Company’s financial statements has been carried out in accordance with generally accepted auditing standards or that the Company’s independent registered public accounting firm is “independent.”

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board has approved, that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 for filing with the Securities and Exchange Commission.  The Audit Committee also has approved, subject to stockholder ratification, the selection of the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2014.

Audit Committee of the Board of Directors of

Beneficial Mutual Bancorp, Inc.

Donald F. Gayhardt, Jr., Chairman

Elizabeth H. Gemmill

Joseph J. McLaughlin

Marcy C. Panzer

Roy D. Yates

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Audit Fees

Audit Fees. The following table sets forth the fees billed to the Company for the fiscal years ended December 31, 2013 and 2012 by our auditors.

(1)         Includes professional services rendered for the audit of the Company’s annual consolidated financial statements and review of consolidated financial statements included in Quarterly Reports on Form 10-Q, or services normally provided in connection with statutory and regulatory filings (i.e., attest services required by the Federal Deposit Insurance Corporation Improvement Act or Section 404 of the Sarbanes-Oxley Act), including out-of-pocket expenses.

(2)         Includes certain agreed upon procedures related to the electronic submission of financial information to the U.S. Department of Housing and Urban Development Real Estate Assessment Center (REAC).

(3)         Includes certain professional services rendered relating to the second step transaction that we were evaluating directly before the Department of Justice (“DOJ”) fair lending investigation

(4)         Includes certain professional services rendered relating to the acquisition of SE Financial Corp.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of the Independent Registered Public Accounting Firm. The Audit Committee is responsible for appointing, setting the compensation and overseeing the work of the independent registered public accounting firm.  In accordance with its charter, the Audit Committee approves, in advance, all audit and permissible non-audit services to be performed by the independent auditor.  Such approval process ensures that the external auditor does not provide any non-audit services to the Company that are prohibited by law or regulation.

In addition, the Audit Committee has established a policy regarding pre-approval of all audit and permissible non-audit services provided by the independent registered public accounting firm.  Requests for services by the independent registered public accounting firm for compliance with the auditor services policy must be specific as to the particular services to be provided.  The request may be made with respect to either specific services or a type of service for predictable or recurring services.  During the year ended December 31, 2013, all services were approved, in advance, by the Audit Committee in compliance with these procedures.

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STOCK OWNERSHIP

The following table provides information as of March 17, 2014 about the persons known to us to be the beneficial owners of more than 5% of Beneficial Mutual Bancorp, Inc.’s outstanding common stock.  A person may be considered to beneficially own any shares of common stock over which he or she has, directly or indirectly, sole or shared voting or investing power.

(1)  Based on 76,618,246 shares of Beneficial Mutual Bancorp, Inc. common stock outstanding as of March 17, 2014.

(2)  Based solely on a Schedule 13G/A filed with the U.S. Securities and Exchange Commission on February 14, 2014.

The following table provides information about the shares of Beneficial Mutual Bancorp, Inc. common stock that may be considered to be owned by each director of Beneficial Mutual Bancorp, Inc., each executive officer named in the summary compensation table and by all directors and executive officers of Beneficial Mutual Bancorp, Inc. as a group as of March 17, 2014.  Each director and named executive officer owned less than 1% of our outstanding common stock as of that date.  A person may be considered to own any shares of common stock over which he or she has, directly or indirectly, sole or shared voting or investment power. Unless otherwise indicated, each of the named individuals has sole voting and investment power with respect to the shares shown.

(1)             This column includes the following:

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(2)             Includes 5,000 shares owned by Mr. McLaughlin’s spouse.

(3)             Includes 15,000 shares held by Mr. Nise’s spouse.

(4)             Includes 28,710 shares held by Mr. Yates’ son.

ITEMS TO BE VOTED ON BY STOCKHOLDERS

Item 1 - Election of Directors

The Company’s Board of Directors currently consists of eleven members.  The terms for George W. Nise and Marcy C. Panzer, current directors of the Company, will expire at the 2014 annual meeting of stockholders, at which point the size of the Board of Directors will be reduced from eleven to nine members. The Board is divided into three classes with three-year staggered terms, with approximately one-third of the directors elected each year. The Board of Directors’ nominees for election this year, to serve for a three-year term or until their respective successors have been elected and qualified, are Gerard P. Cuddy, Frank A. Farnesi and Thomas J. Lewis. All of the nominees are currently directors of the Company and the Bank.

Unless you indicate on the proxy card that your shares should not be voted for certain nominees, the Board of Directors intends that the proxies solicited by it will be voted for the election of each of the Board’s nominees.  If any nominee is unable to serve, the persons named in the proxy card would vote your shares to approve the election of any substitute proposed by the Board of Directors.  At this time, we know of no reason why any nominee might be unable to serve.

The Board of Directors recommends that stockholders vote “FOR” the election of all of the nominees.

Information regarding the nominees for election at the annual meeting amd the directors continuing in office is provided below.  Unless otherwise stated, each individual has held his or her current occupation for the last five years.  The age indicated for each individual is as of December 31, 2013.  The indicated period of service as a director includes the period of service as a director of Beneficial Bank.

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Nominees for Election as Directors

The nominees for election to serve for a three-year term are:

Gerard P. Cuddy is our President and Chief Executive Officer.  From May 2005 to November 2006, Mr. Cuddy was a senior lender at Commerce Bank.  From 2002 to 2005, Mr. Cuddy served as a Senior Vice President of Fleet/Bank of America.  Before his service with Fleet/Bank of America, Mr. Cuddy held senior management positions with First Union National Bank and Citigroup.  Age 54.  Trustee of Beneficial Bank and director of Beneficial Savings Bank MHC and Beneficial Mutual Bancorp, Inc. since 2006.

Mr. Cuddy’s extensive experience in the local banking industry and involvement in business and civic organizations in the communities in which Beneficial Bank serves affords the Board of Directors valuable insight regarding the business and operation of Beneficial Bank.  Mr. Cuddy’s knowledge of Beneficial Mutual Bancorp, Inc.’s and Beneficial Bank’s business and history, combined with his success and strategic vision, position him well to continue to serve as our President and Chief Executive Officer.

Frank A. Farnesi is a retired partner of KPMG LLP.  Age 66.  Effective in October 2012, Mr. Farnesi was named Chairman of the Board of Beneficial Bank, Beneficial Savings Bank MHC and Beneficial Mutual Bancorp, Inc.  He has served as trustee of Beneficial Bank and director of Beneficial Savings Bank MHC and Beneficial Mutual Bancorp, Inc. since 2004.  He is also a director of RAIT Investment Trust (NYSE: RAS), a Trustee of Immaculata University, and a Trustee of Faith in the Future Foundation.

As a former partner with a certified public accounting firm, Mr. Farnesi provides the Board of Directors with critical experience regarding accounting and financial matters.

Thomas J. Lewis served as President and Chief Executive Officer of Thomas Jefferson University Hospitals, Inc. from 1996 to 2012.  Age 61.  Trustee of Beneficial Bank and director of Beneficial Savings Bank MHC and Beneficial Mutual Bancorp, Inc. since 2005. He is also a director of the nonprofit organizations, The Food Trust and The Health Care Improvement Foundation.

Mr. Lewis’ background offers the Board of Directors management and oversight experience, specifically within the region in which Beneficial Bank conducts its business.

Directors Continuing in Office

The following directors have terms ending in 2015:

Elizabeth H. Gemmill served as the President of the Warwick Foundation, a private family foundation, which dissolved in 2012.  Age 68.  Trustee of Beneficial Bank and director of Beneficial Savings Bank MHC and Beneficial Mutual Bancorp, Inc. since 2005.  She is also a director of Universal Display Corporation (Nasdaq: PANL) and the Chairman of the Board of the Presbyterian Foundation.

As a director of Universal Display Corporation, Ms. Gemmill provides the Board of Directors with critical experience regarding public company oversight matters.  Ms. Gemmill also demonstrates a strong commitment to the local community in her role as Chairman of the Presbyterian Foundation and as the former President of the Warwick Foundation.

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Joseph J. McLaughlin retired as President and Chief Executive Officer of Beneficial Bank in 1993.  Age 85.  Trustee of Beneficial Bank since 1974 and director of Beneficial Savings Bank MHC and Beneficial Mutual Bancorp, Inc. since their formation in 2004.

Mr. McLaughlin’s extensive experience in the local banking industry and involvement in business and civic organizations in the communities in which Beneficial Bank serves affords the Board of Directors valuable insight regarding the business and operations of Beneficial Bank.

The following directors have terms ending in 2016:

Edward G. Boehne served as the President of the Federal Reserve Bank of Philadelphia from 1981 to 2000. Mr. Boehne is a Senior Economic Advisor for Haverford Trust Company, an asset management company.  Age 73.  Trustee of Beneficial Bank since 2000 and director of Beneficial Savings Bank MHC and Beneficial Mutual Bancorp, Inc. since their formation.  He is also a director of Toll Brothers, Inc. (NYSE: TOL) and the privately held companies of Haverford Trust Company, Penn Mutual Life Insurance Company and AAA Mid-Atlantic (including the related holding company, AAA Club Partners).

Mr. Boehne’s asset management background provides the Board of Directors with substantial management and leadership experience with respect to an industry that complements the financial services provided by Beneficial Bank.  In addition, as a director of a corporation listed on the New York Stock Exchange, Mr. Boehne offers the Board of Directors significant public company oversight experience.

Karen Dougherty Buchholz is Senior Vice President, Administration of Comcast Corp., one of the nation’s leading providers of entertainment, information and communications products and services.  Age 46.  Trustee of Beneficial Bank since 2009 and director of Beneficial Savings Bank MHC and Beneficial Mutual Bancorp, Inc. since 2009.

As an executive of Comcast Corp., Ms. Buchholz provides the Board of Directors with extensive public company oversight and leadership experience.  In addition, Ms. Buchholz offers the Board of Directors significant business and management level experience from a setting outside of the financial services industry.

Donald F. Gayhardt, Jr. has served as the Chief Executive Officer of Tiger Financial Management, a financial services company, since January 2012 and as Chairman of the Board of Music Training Center Holdings, LLC, a music education company, since May 2009.  Prior to that, Mr. Gayhardt held positions of President Chief Financial Officer and Secretary as well as a member of the Board of Directors of Dollar Financial Corp., a financial services company located in Berwyn, Pennsylvania.  Age 49.  Trustee of Beneficial Bank since 2009 and director of Beneficial Savings Bank MHC and Beneficial Mutual Bancorp, Inc. since 2009.

As a former Chief Financial Officer of Dollar Financial Corp., Mr. Gayhardt provides the Board of Directors with critical experience regarding accounting and financial matters. Mr. Gayhardt’s extensive experience in the local banking industry and involvement in business and civic organizations in the communities in which Beneficial Bank serves affords the Board of Directors valuable insight regarding the business and operation of Beneficial Bank.

Roy D. Yates is a Professor of Electrical and Computer Engineering at Rutgers University in Piscataway, New Jersey, and is a former Chairman of the Board of FMS Financial Corporation.  Age 51.  Trustee of Beneficial Bank and director of Beneficial Savings Bank MHC and Beneficial Mutual Bancorp, Inc. since 2007.

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As the former Chairman of FMS Financial Corporation, Mr. Yates provides the Board of Directors with critical experience regarding public company oversight matters.  In addition, Mr. Yates’ academic and engineering background provides the Board of Directors with experience from a setting outside of the financial services industry.

Item 2 — Ratification of Independent Registered Public Accounting Firm

The Audit Committee of the Board of Directors has appointed KPMG LLP to be the Company’s independent registered public accounting firm for the 2014 fiscal year, subject to ratification by stockholders.  A representative of KPMG LLP is expected to be present at the annual meeting to respond to appropriate questions from stockholders and will have the opportunity to make a statement should he or she desire to do so.

If the ratification of the appointment of the independent registered public accounting firm is not approved by a majority of the shares represented at the annual meeting and entitled to vote, other independent registered public accounting firms may be considered by the Audit Committee of the Board of Directors.

The Board of Directors recommends that stockholders vote “FOR” the ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the 2014 fiscal year.

Item 3 — Advisory Vote on Executive Compensation

As part of our commitment to excellence in governance and as required by federal securities laws, we are providing our stockholders with the opportunity to cast an advisory vote regarding the compensation of our named executive officers as disclosed in this proxy statement.  This proposal, commonly known as a “say-on-pay” proposal, gives the Company’s stockholders the opportunity to endorse or not endorse the Company’s executive pay program and policies through the following resolution:

“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and related narrative discussion contained in the 2014 proxy statement, is hereby approved.”

At both our 2013 and 2012 annual meetings, our stockholders overwhelmingly approved the say-on-pay proposal.

As described in the “Compensation Discussion and Analysis” included in this proxy statement, we believe that our executive compensation program is designed to support the Company’s long-term success by achieving the following objectives:

·                  Attracting and retaining talented senior executives;

·                  Tying executive pay to Company and individual performance;

·                  Supporting our annual and long-term business strategies; and

·                  Aligning executives’ interests with those of the Company’s stockholders.

We urge stockholders to read the “Compensation Discussion and Analysis” and the related narrative and tabular compensation disclosure included in this proxy statement.  The “Compensation Discussion and Analysis” provides detailed information regarding our executive compensation program, policies and procedures, as well as the compensation of our named executive officers.

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This advisory vote on the compensation of our named executive officers is not binding on us, our Board or the Compensation Committee. However, our Board and the Compensation Committee will review and consider the outcome of this advisory vote when making future compensation decisions for our named executive officers.

The Board of Directors recommends that stockholders vote “FOR” the compensation paid to the Company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and related narrative discussion contained in this proxy statement.

REPORT OF THE COMPENSATION COMMITTEE

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis that is required by the rules established by the Securities and Exchange Commission.  Based on such review and discussion, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this document.  See “Compensation Discussion and Analysis.”

Compensation Committee of the Board of Directors of

Beneficial Mutual Bancorp, Inc.

Thomas J. Lewis, Chairman

Edward G. Boehne

Donald F. Gayhardt, Jr.

Elizabeth H. Gemmill

Roy D. Yates

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COMPENSATION DISCUSSION AND ANALYSIS

Overview

The following discussion provides a description of our decision making process and philosophy for compensating our named executive officers in 2013. This discussion also describes the material components of each named executive officer’s total compensation package and details the reasoning behind the compensation decisions made for 2013. This discussion should be read together with the compensation tables for our named executive officers that can be found following the “Executive Compensation” section of this proxy statement.

Our 2013 named executive officers were Gerard P. Cuddy — President and Chief Executive Officer, Thomas D. Cestare — Executive Vice President and Chief Financial Officer, Martin F. Gallagher, Jr. — Executive Vice President and Chief Credit Officer, Joanne R. Ryder — Executive Vice President and Director of Brand & Strategy, and Robert J. Maines — Executive Vice President and Director of Operations.

Executive Summary

It is the intent of the Compensation Committee to provide our named executive officers with a total compensation package that is market competitive, promotes the achievement of our strategic objectives and is aligned with operating and other performance metrics to support long-term shareholder value. In addition, we have structured our executive compensation program to include elements that are intended to create an appropriate balance between risk and reward, thereby discouraging excessive risk taking.

Fiscal Year 2013 Performance.  Our current executive team has the commitment and expertise to execute our business strategy. Throughout 2013, our team focused on strategic initiatives which included, reducing non performing assets, managing our capital, growing our commercial and small business lending teams,  increasing our retail and commercial customer base, managing expenses, increasing our brand awareness and positioning of Beneficial as “Your Knowledge Bank”, enhancing our risk management processes and controls and adopting new delivery channels to optimize our branch network.  Our executive team’s efforts to improve our financial performance and remain on course with our strategic objectives are specifically illustrated in the following highlights:

·                  Maintaining our strong capital position.  During the year we continued to strengthen our capital positon with our tangible capital ratio improving to 10.89% at December 31, 2013 compared to 10.30% at December 31, 2012.  We were able to achive this while at the same time continuing our share repurchase program.  In October 2013, Beneficial’s Board of Directors approved a new stock repurchase program that will enable Beneficial to acquire up to 4,000,000 shares, or 12.0%, of the Company’s publicly held common stock outstanding. Beneficial repurchased 2,193,652 during the year ended December 31, 2013.

·                  Earnings per Share in line with the prior year. Despite a difficult operating environment, earnings per share for the year ended December 31, 2013 of $0.17 was relatively consistent to the $0.18 per diluted share, for the year ended December 31, 2012.

·                  Continuing to see improvement in our asset quality metrics.  In 2013, we experienced continued improvement in our asset quality metrics with non-performing loans, delinquencies, charge-offs, and classified loans all showing year over year improvement.  During 2013, non-performing loans excluding government guaranteed student loans, decreased $16.6 million, or 24.3%, to $51.8 million from $68.4 million at December 31, 2012. Our non-performing assets ratio, excluding government guaranteed student loans, improved to 1.26% at December 31, 2013 compared to 1.60% at December 31, 2012.  During 2013, our charge-offs decreased $9.6 million, or 38.9%, to $15.0 million from $24.6 million in 2012.

·                  Building Commercial and Small Business Lending Teams.  In 2013, we continued to focus on building our lending teams to position the Company for future loan growth.  We continued to add seasoned, experienced

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lenders to our commercial real estate and commercial and industrial lending teams.  We also hired a head of small business lending who is building a team that will work with the branch network to grow our small business lending portfolio.

·                  Continuing to actively manage expenses.  Operating expenses for 2013 decreased to $120.7 million compared to $123.1 million for 2012.  However our efficiency ratio has increased due to a drop in our revenues in 2013 as a result of the low interest rate environment and a lack of strong loan demand in our markets.  We continue to invest in our business lines to position the Company for future growth.

·                  Launched new marketing campaign and brand refresh.  We launched a new marketing campaign and brand refresh designed to highlight the bank’s commitment to financial education. Along with the introduction of a new “Your Knowledge Bank” tagline, the campaign itself is part of an ambitious communications initiative rooted in what has always been the core mission of Beneficial Bank — to provide customers with the tools, knowledge and guidance to help them do what’s right and make wise financial decisions.

·                  Enhanced our risk management process and controls.  We continue to enhance our risk management framework to ensure we are actively managing our key business risks and are meeting the demands of a changing regulatory environment.  In late 2012, we formed a management and director risk committee to monitor and oversee all of our critical risks including credit, interest rate, liquidity, capital, operational, regulatory, and business continuity.  We have also added resources to both our compliance and operational risk groups to meet the changing requirements of the industry.

Summary of Key Compensation Decisions

·                  Chief Executive Officer Compensation: Mr. Cuddy’s annual salary was increased from $540,769 to $562,000 effective March 24, 2013. Mr. Cuddy was awarded an annual incentive equal to $112,400. The award was determined based on stretch levels for total expenses and target levels for employee satisfaction and strategic initiatives execution. For the year ended December 31, 2013, earnings per share was $0.17 which met the stretch performance goal.  However, no payout was made for the earnings per share performance measure, as the Company’s total shareholder return was less than the median of our compensation peer group. He received 20,000 shares of restricted stock that vest 60% after three years of service and 20% each year thereafter. The CEO also received 75,000 stock options that vest 20% per year over a five-year period.

·                  Other Named Executive Officer Compensation: The other four NEOs each received an annual salary increase effective March 24, 2013.  Mr. Cestare’s annual salary increased from $331,250 to $339,788; Mr. Gallagher’s increased from $228,895 to $234,664; Ms. Ryder’s increased from $209,231 to $240,000; and Mr. Maines increased from $200,000 to $230,000. These increases were granted based on the annual Executive Compensation Study completed by our Compensation Consultant and the assessment of individual performance by the Compensation Committee.  For 2013, Mr. Cestare, Mr. Gallagher, Ms. Ryder and Mr. Maines were awarded an annual incentive equal to $88,345, $24,933, $61,500 and $46,000, respectively.  The awards were determined based on achieving the performance goals that are summarized on page 29 and 30.  The Compensation Committee awarded an additional one-time discretionary bonus of $50,000 to Mr. Gallagher due to his contributions in improving the Company’s asset quality metrics and strengthening the Company’s credit infrastructure.  The Compensation Committee awarded a one-time discretionary bonus of $25,000 to Ms. Ryder for her contributions in connection with the Company’s relocation to a new headquarters.

·                  During 2013, Mr. Cestare, Mr. Gallagher, Ms. Ryder and Mr. Maines were awarded restricted stock grants of 16,000; 6,000; 6,000 and 4,000 respectively. These officers also received stock option grants as follows:  Mr. Cestare 60,000; Mr. Gallagher 35,000; Ms. Ryder 32,000, and Mr. Maines 30,000.  Vesting is the same schedule in place for the CEO.

·                  As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, we held an advisory vote on the approval of the compensation of our named executive officers (the “Say-on-Pay” vote) at our 2013 annual

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shareholders meeting. The results were that 97% of the shareholders who voted on our Say on Pay proposal voted in favor of it.  The Committee considered this positive result as an affirmation of its compensation related policies and decisions.

·                  In connection with the Compensation Committee’s review of the retirement benefits provided to our named executive officers, the Compensation Committee amended the Bank’s Elective Deferred Compensation Plan to provide our named executive officers with a supplemental retirement benefit equal to the benefits lost under the KSOP as a result of certain Internal Revenue Code limits on compensation.  See “Executive Compensation — Nonqualified Deferred Compensation” for a description of the plan and the benefits provided to the named executive officers.

Compensation Decisions Reflect Our Performance.  The efforts and leadership of the named executive officers on our executive team were critical to our ability to navigate the challenging economic conditions in 2013.  In connection with a review of each named executive’s 2013 job performance, the Company extended the term of the employment agreements with Mr. Cuddy, Mr. Cestare, Mr. Maines and Ms. Ryder and the change in control severance agreement with Mr. Gallagher through May 20, 2015. We believe the current management team will position the Company for growth and success in the future and the employment and change in control severance agreements provide our named executive officers with financial security and the Company with management stability.  See “Employment and Change in Control Severance Agreements” for a discussion of the terms and conditions of the agreements. See also, “Executive Compensation — Potential Post-Termination Benefits Tables” for compensation payable to the named executive officers upon termination of employment under the conditions provided for in the agreements.

Company performance is a primary driver for payments under our 2013 Management Incentive Plan (“2013 MIP”). The annual cash incentive opportunities provided under the 2013 MIP were based on Company performance measures that focus on core measures of profitability, efficiency of resources, and total shareholder return, as well as the execution of individual strategic objectives.  In 2013, the successful execution of individual strategic objectives coupled with the Company’s financial performance resulted in 2013 MIP payouts generally ranging between threshold and target levels. See “Elements Used to Implement our Compensation Objectives — Short-Term Cash-Based Incentive Compensation” for detailed information on the specific payouts to our named executive officers under the 2013 MIP as well as the specific performance criteria used to evaluate each named executive officer.

In 2013, equity compensation continued to be an important component of the overall compensation package for our named executive officers.  The grant of equity awards reflects our pay for performance approach, goal to align our executives with shareholders, as well as our focus on stock ownership for our named executive officers.  See “Executive Compensation — Grants of Plan-Based Awards” for specific information on 2013 equity awards.

In connection with the Compensation Committee’s review of the retirement benefits provided to our named executive officers, the Compensation Committee amended the Bank’s Elective Deferred Compensation Plan to provide our named executive officers with a supplemental retirement benefit equal to the benefits lost under the KSOP as a result of certain Internal Revenue Code limits on compensation.  See “Executive Compensation — Nonqualified Deferred Compensation” for a description of the plan and the benefits provided to the named executive officers.

The following chart outlines the primary components of the 2013 compensation package for our named executive officers.  In addition to the components noted below, our named executive officers participate in the Bank’s health and welfare programs, which are available to all our full-time employees, as well as certain retirement arrangements.  See “Elements Used to Implement our Compensation Objectives — Retirement Benefits — Employee Welfare Benefits.”

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Allocation of Compensation Components

Base salary represents a significant component of our 2013 compensation program for our named executive officers.  However, our use of short-term cash incentives and equity compensation reflects the growing importance of performance-based compensation in our overall compensation structure.  In 2013, 47% of Mr. Cuddy’s total compensation was performance-based and the other named executive officers total performance-based compensation ranged between 44% and 55% of total compensation.

The allocation of base salary and performance-based compensation (short-term cash incentives and equity awards) varies depending upon the role of a named executive officer in our organization and their individual performance.  See “Elements Used to Implement our Compensation Objectives — Short-Term Cash-Based Incentive Compensation” for the individual 2013 MIP scorecards for our named executive officers.

Compensation Philosophy

We ground our compensation philosophy on four basic principles:

·                                          Reflecting our Business Philosophy — Our approach to compensation reflects our values and the way we do business in the communities we serve.

·                                          Meeting the Demands of the Market — Our goal is to compensate our employees at competitive levels that position us as the employer of choice among our peers who provide similar financial services in the markets we serve.

·                                          Aligning with Stockholders — We use equity compensation as an additional component of our compensation mix to develop a culture of ownership among our named executive officers and to align their individual financial interests with the interests of our stockholders.  Our policy of stock ownership and retention requires our named executive officers to acquire Company common stock having a fair market value equal to a multiple of their base salary within a specific time period.  See “Stock Ownership Requirement” for information on individual stock ownership targets.

·                                          Performance — We believe that a significant amount of executive compensation should be performance-based.  Therefore, our compensation program is designed to reward superior performance and encourage our executive officers to feel accountable for the Company’s financial performance and their individual performance.  To achieve this, we have structured our short-term cash-based and equity programs to tie an executive’s compensation, in part, directly to Company and individual performance.

The Compensation Committee has developed a compensation program for our named executive officers that reflects this philosophy and uses a full range of compensation elements to achieve its objectives.  Our goal is to be a high performing company, therefore, the Compensation Committee has structured an executive compensation program that attracts and retains quality individuals and motivates and rewards them for strong performance.  When making compensation determinations for the Company’s named executives, the Compensation Committee focuses on salaries and cash compensation that is generally competitive at the 50th percentile of the market at target levels of performance.

Role of the Compensation Committee

The Compensation Committee is accountable for developing our executive compensation philosophy and making compensation decisions relating to our named executive officers.  The Committee monitors the success of our program in achieving the objectives of our compensation philosophy.  The Compensation Committee is also responsible for the

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administration of our compensation programs and policies, including the administration of our cash- and stock-based incentive programs.

The Compensation Committee operates under a written charter that establishes its responsibilities. A copy of the Compensation Committee Charter can be found on the Company’s website at www.thebeneficial.com. The Compensation Committee reviews the charter annually to ensure that the scope of the charter is consistent with the Compensation Committee’s expected role.  Under the charter, the Compensation Committee is charged with general responsibility for the oversight and administration of our compensation program.  The charter vests in the Compensation Committee the sole responsibility for determining the compensation of the chief executive officer based on the Compensation Committee’s evaluation of his performance.  The charter also authorizes the Compensation Committee to engage consultants and other professionals without management approval to the extent deemed necessary to discharge its responsibilities.

During 2013, the Compensation Committee met six times, including four executive sessions attended by Compensation Committee members only.  A representative of Pearl Meyer & Partners (through September 2013) and subsequently McLagan, our independent compensation consultants, was present by teleconference or in person at all six of the meetings.  The current members of the Compensation Committee are Thomas J. Lewis (Chairman), Edward G. Boehne, Donald F. Gayhardt Jr., Elizabeth H. Gemmill, and Roy D. Yates.

The Compensation Committee annually conducts a self-assessment of its overall performance and regularly engages in education events either through its independent consultant or through attendance at banking industry events.

Role of the Compensation Consultant

In 2013, the Compensation Committee retained the services of Pearl Meyer & Partners through September and subsequently retained the services of McLagan (individually and collectively, “our Compensation Consultant”), both independent compensation consulting firms, to perform a competitive assessment of the Company’s executive and director compensation programs, as well as to provide guidance on the changing regulatory environment governing executive compensation.  The annual executive and director assessments include, but are not limited to, an assessment of the Company’s compensation program compared to its peers, recommendations for total cash compensation opportunities (base salary and cash incentives), assessment of perquisites, retirement benefits and bonuses for named executive officers, an assessment of the Company’s financial performance relative to its peers, a review of board and committee compensation and equity compensation.  The annual executive and director compensation assessments provide the Compensation Committee with a broad array of information from which to assess the effectiveness of its compensation programs and serve as a foundation for compensation decisions.

In addition to providing annual assessments, our Compensation Consultant advises the Compensation Committee on best practices in light of the changes in the bank regulatory environment and assists the Compensation Committee in designing compensation arrangements that reflect the Company’s compensation philosophy.  In 2013, our Compensation Consultant assisted the Compensation Committee in developing a peer group for the purpose of providing the Company with a basis for comparing its compensation and benefit arrangements against the compensation arrangements provided by other similarly situated financial institutions.  See “Use of Peer Group Data” for information on the Company’s 2013 peer group.

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The Compensation Consultant attends the Compensation Committee meetings upon request for the purpose of reviewing compensation data with the Company and participating in general discussions on compensation and benefits for the named executive officers and board members.  While the Compensation Committee considers input from our Compensation Consultant when making compensation decisions, the Committee’s final decisions reflect many factors and considerations.

In September 2013, the Compensation Committee engaged McLagan an Aon Hewitt Company as its new advisor. In 2013, the Compensation Committee reviewed its relationship with McLagan and Aon Hewitt.  The Committee considered all relevant factors, including those set forth in Rule 10C-1(b)(4)(i) through (vi) under the Securities Exchange Act of 1934.  The Committee determined that McLagan and Aon Hewitt’s work does not raise a conflict of interest.

Role of Management

Our chief executive officer, in conjunction with representatives of the Compensation Committee and the Human Resources Department, develops recommendations regarding the appropriate mix and level of compensation for our named executive officers (other than himself).  The recommendations consider the objectives of our compensation philosophy and the range of compensation programs authorized by the Compensation Committee.  The chief executive officer meets with the Compensation Committee to discuss the compensation recommendations for the other named executive officers.  Our chief executive officer does not participate in Compensation Committee discussions relating to the determination of his compensation.

Elements Used to Implement Our Compensation Objectives

We believe that we can meet the objectives of our compensation philosophy by achieving a balance among base salary, short-term incentives and long-term incentives that is competitive with our industry peers and creates appropriate incentives for our named executive officers.  To achieve the necessary balance, our Compensation Committee worked closely with Pearl Meyer & Partners and subsequently McLagan and our Human Resources Department.  See “Role of Compensation Consultant” for a detailed description of the services provided by our Compensation Consultant.

Base Salary.  The base salary of each named executive officer is reviewed on an annual basis in connection with the executive’s performance review.  Decisions regarding salary adjustments take into account an executive’s current base salary, market practice and the role/contribution of the executive.  Our goal is to maintain salary levels for the named executive officers at levels consistent with base pay received by those in comparable positions in the market.  We obtain market information from a variety of sources, including survey data gathered by the Compensation Consultant.  See “Use of Peer Group Data.”  We also evaluate salary levels at the time of promotion or other change in responsibilities or as a result of specific commitments we made when a specific officer was hired.  Individual performance, role and responsibilities and retention risk are also considered as part of our annual assessment.  See “Executive Compensation—Summary Compensation Table” for salaries paid to our named executive officers in 2013.

Short-Term Cash-Based Incentive Compensation.  Our 2013 MIP is designed to recognize and reward plan participants for their contribution to our success.  Our 2013 MIP measures both Company performance and individual performance.  In 2013, the Company performance measures included earnings per share, total expenses and efficiency ratio targets, which are core measures of profitability and efficiency of resources, as well as employee satisfaction and the successful execution of strategic initiatives.  The 2013 MIP also included a provision that no payments will be made for EPS performance unless the Company’s total shareholder return was equal to or greater than the median of our Compensation peer group.  The individual performance measures were specific to each participant’s job (e.g., strategic growth, lending growth, loan loss experience and deposit growth).  The 2013 MIP provided each plan participant with a target incentive opportunity with the ability to earn more or less based on achievement of pre-determined performance

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goals.  Target incentive opportunities reflect our philosophy of setting conservative annual incentives that are slightly below market practice to allow for a greater focus on long term incentive opportunities.

The table below summarizes the cash incentive opportunities for our named executive officers in 2013.  The actual cash values associated with each named executive officer’s threshold, target and stretch incentive opportunity (represented as a percentage of base salary below) can be found on his or her individual scorecard which follows the table:

The 2013 MIP was administered by the Compensation Committee with the assistance of the Human Resources Department.  The Compensation Committee has sole discretion to adjust payouts under the 2013 MIP in the event of a change in market conditions, regulations or the Company’s business model.  The Compensation Committee uses scorecards to evaluate each participant’s performance and determines the payout under the 2013 MIP.  Incentive payouts earned under the 2013 MIP are subject to the Company’s clawback policy.  See “Clawback Policy” for the terms and conditions of the Company’s clawback policy.  In accordance with the terms of the 2013 MIP, a participant must be employed by the Company as of the date of distribution of the incentive award to be eligible for a payout under the plan.

The following scorecards set forth the Compensation Committee’s assessment of each named executive officer (eligible to receive a payout under the 2013 MIP) in relation to the 2013 individual/division and Company performance measures.  The scorecards list each performance goal and the weight given to the achievement of each goal.  The scorecards also illustrate the threshold, target and stretch levels and note the corresponding 2013 MIP payouts.  Threshold, target and stretch values noted on each executive’s scorecard represent the achievement of 90%, 100% and 115%, respectively of the target for each performance measure.  For the year ended December 31, 2013, earnings per share was $0.17 which met the stretch performance goal for the named executive officers.  However, no payouts were made for the earnings per share performance measure, as the Company’s total shareholder return was less than the median of our Compensation peer group.  All dollar amounts are in thousands, unless otherwise noted.

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In addition, the Compensation Committee approved an additional discretionary bonus of $50,000 for Mr. Gallagher for his significant contributions to reducing the Company’s non-performing assets excluding restructured assets divided by total assets from 1.60 in 2012 to 1.26 in 2013.

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In addition, the Compensation Committee approved an additional one-time discretionary bonus of $25,000 for Ms. Ryder for her significant contributions and leadership in relocating the Company headquarters, without business interruptions and within the approved budget.