Exhibit 99.1
Press Release | | FOR IMMEDIATE RELEASE |
| | Contact: Donna M. Coughey, CEO |
| | Joseph T. Crowley, CFO |
| | Telephone: 610-995-1700 |
WILLOW GROVE BANCORP, INC. REVISES FOURTH QUARTER 2006
PROVISION FOR LOAN LOSSES AND RESULTS
Wayne, Pennsylvania — (September 13, 2006) Willow Grove Bancorp, Inc. (the “Company”) (Nasdaq/Global Select Market: WGBC), the holding company for Willow Grove Bank (the “Bank”), announced today that it is revising its fourth quarter 2006 results to reflect a higher provision for loan losses.
On August 14, 2006, the Company reported net income of $3.8 million, or $0.26 per diluted share for the quarter ended June 30, 2006. The results included a provision for loan losses of $195,000. Subsequently, based on additional information regarding one borrower, the provision for loan losses was increased to $2.5 million. As a result of the addition to the provision for loan losses, net income for the quarter ended June 30, 2006 was reduced to $2.3 million or $0.16 per diluted share.
The increase in the fourth quarter provision is due to two commercial loans to a single borrower, which became delinquent subsequent to June 30, 2006. The loans were originally classified as substandard at June 30, 2006. Upon additional investigation subsequent to June 30, 2006, management became aware that the borrower’s revenue shortfall; while initially expected to be short-term, is long-term in nature and the value of the collateral securing the loans was significantly below the outstanding balance of the loans.
The level of the provision for loan losses made in connection with the loans reflects the amount necessary to maintain the Company’s allowance for loan losses at a level deemed adequate, based upon management’s current analysis of losses inherent within the loan portfolio at June 30, 2006.
1
Donna M. Coughey, President and CEO of the Company said: “Today’s actions to bolster our loan loss reserves and revise our fourth quarter results stems from operational issues specific to a single borrower. We will aggressively pursue all avenues for repayment of the debt to minimize the financial impact to the Company. Overall, we believe we are taking a conservative approach to our commercial lending activities by aggressively reserving for credit issues we have identified.”
Willow Grove Bank continues to meet all applicable regulatory capital requirements including those included in the OTS letter approving the merger with Chester Valley Bancorp. The additional provision for loan losses will be included in the financial statements at and for the year ended June 30, 2006 to be included in the Company’s Annual Report on Form 10-K report, which management expects to file sometime during the week of September 18, 2006.
About Willow Grove Bank:
Willow Grove Bancorp, Inc. is the holding company for Willow Grove Bank, a federally chartered savings bank. Willow Grove Bank was founded in 1909 and operates 28 branch locations in Bustleton, Dresher, Hatboro, Holland, Huntingdon Valley, Maple Glen, North Wales, Rhawnhurst, Roslyn Valley, Somerton, Southampton, Warminster (two), Willow Grove, Downingtown, Exton, Frazer, Thorndale, Westtown, Airport Village, Brandywine Square, Devon, Kennett Square, Eagle, Coatesville, Avondale, Wayne and West Chester, Pennsylvania.
Additional information is available at: www.willowgrovebank.com.
Forward Looking Statements
The information contained in this press release may contain forward-looking statements (as defined in the Securities Exchange Act of 1934 and the regulations thereunder) which are not historical facts or as to Willow Grove Bancorp, Inc. management’s intentions, plans, beliefs, expectations or opinions. Forward-looking statements may be identified by the use of words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, “could”, “may”, “likely”, “probably” or “possibly”. These statements include, but are not limited to, statements regarding plans, objectives and expectations with respect to future operations, the Company’s provisions for loan losses, the intended filing date of the Company’s Annual Report on Form 10-K for the year ended June 30, 2006 and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of Willow Grove Bancorp and its management, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. Willow Grove Bancorp undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.
2
WILLOW GROVE BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in Thousands, Unaudited)
| | June 30, | | June 30, | |
| | 2006 | | 2005 | |
Assets | | | | | |
Cash in banks | | $ | 32,930 | | $ | 6,189 | |
Interest-bearing deposits | | 4,289 | | 14,420 | |
Total cash and cash equivalents | | 37,219 | | 20,609 | |
Investment securities — trading | | 902 | | 53 | |
Federal Home Loan Bank Stock | | 16,856 | | 14,256 | |
Investment securities available for sale | | 196,925 | | 148,517 | |
Investment securities held to maturity | | 105,561 | | 164,451 | |
Loans held for sale | | 2,635 | | 1,795 | |
Loans receivable | | 1,081,789 | | 590,923 | |
Deferred fees and other discounts | | (1,170 | ) | (623 | ) |
Allowance for loan losses | | (16,737 | ) | (6,113 | ) |
Loans receivable, net | | 1,063,882 | | 584,187 | |
Accrued interest receivable | | 6,647 | | 4,094 | |
Property and equipment, net | | 10,064 | | 5,659 | |
Bank owned life insurance | | 11,483 | | 5,447 | |
Real estate owned | | 51 | | 439 | |
Core deposit intangible, net | | 12,975 | | 33 | |
Goodwill | | 93,702 | | 848 | |
Other assets | | 17,825 | | 8,867 | |
Total Assets | | $ | 1,576,727 | | $ | 959,255 | |
| | | | | |
Liabilities and Stockholders’ Equity | | | | | |
Liabilities: | | | | | |
Deposits | | $ | 985,238 | | $ | 602,678 | |
Securities sold under agreements to repurchase | | 53,152 | | — | |
Advance payments by borrowers for taxes and insurance | | 4,776 | | 2,850 | |
Federal Home Loan Bank advances | | 282,717 | | 237,400 | |
Trust preferred securities | | 36,149 | | — | |
Accrued interest payable | | 2,205 | | 1,064 | |
Other liabilities | | 9,425 | | 8,220 | |
Total Liabilities | | 1,373,662 | | 852,212 | |
| | | | | |
Total Stockholders’ Equity | | 203,065 | | 107,043 | |
Total Liabilities and Stockholders’ Equity | | $ | 1,576,727 | | $ | 959,255 | |
3
WILLOW GROVE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except for Per Share Amounts, Unaudited)
| | Three Months Ended | | Twelve Months Ended | |
| | June 30, | | June 30, | |
| | 2006 | | 2005 | | 2006 | | 2005 | |
INTEREST INCOME: | | | | | | | | | |
Loans | | $ | 18,271 | | $ | 9,183 | | $ | 65,472 | | $ | 34,536 | |
Investments securities and interest-bearing deposits | | 4,290 | | 3,738 | | 16,058 | | 15,143 | |
Total interest income | | 22,561 | | 12,921 | | 81,530 | | 49,679 | |
INTEREST EXPENSE: | | | | | | | | | |
Deposits | | 5,133 | | 2,725 | | 17,648 | | 9,931 | |
Securities sold under agreements to repurchase | | 530 | | — | | 1,056 | | — | |
Borrowings | | 3,663 | | 2,396 | | 13,534 | | 8,818 | |
Total interest expense | | 9,326 | | 5,121 | | 32,238 | | 18,749 | |
NET INTEREST INCOME | | 13,235 | | 7,800 | | 49,292 | | 30,930 | |
Provision for loan losses | | 2,485 | | 197 | | 3,205 | | 1,232 | |
Net interest income after provision for loan losses | | 10,750 | | 7,603 | | 46,087 | | 29,698 | |
OTHER INCOME: | | | | | | | | | |
Investment services income, net | | 899 | | — | | 2,634 | | — | |
Service charges and fees | | 1,747 | | 674 | | 5,000 | | 2,418 | |
Gain (loss) on sale of: | | | | | | | | | |
Loans | | 39 | | 116 | | 374 | | 597 | |
Available for sale securities | | 38 | | 61 | | (919 | ) | 73 | |
Other | | 157 | | 48 | | 558 | | 389 | |
Total other income | | 2,880 | | 899 | | 7,647 | | 3,477 | |
OPERATING EXPENSES: | | | | | | | | | |
Salaries and employee benefits | | 5,097 | | 3,189 | | 20,106 | | 13,062 | |
Occupancy & equipment | | 1,977 | | 680 | | 6,011 | | 2,646 | |
Data processing | | 239 | | 242 | | 1,220 | | 960 | |
Advertising | | 472 | | 316 | | 1,504 | | 978 | |
Deposit insurance premiums | | 32 | | 22 | | 124 | | 85 | |
Amortization of intangible assets | | 576 | | 15 | | 1,928 | | 57 | |
Professional fees | | 599 | | 783 | | 2,587 | | 1,441 | |
Other | | 1,298 | | 801 | | 3,922 | | 4,168 | |
Total operating expenses | | 10,290 | | 6,048 | | 37,402 | | 23,397 | |
Income before income taxes | | 3,340 | | 2,454 | | 16,332 | | 9,778 | |
Income tax expense | | 991 | | 745 | | 5,256 | | 3,052 | |
NET INCOME | | $ | 2,349 | | $ | 1,709 | | $ | 11,076 | | $ | 6,726 | |
EARNINGS PER SHARE | | | | | | | | | |
Basic | | $ | 0.17 | | $ | 0.19 | | $ | 0.83 | | $ | 0.74 | |
Diluted | | $ | 0.16 | | $ | 0.18 | | $ | 0.81 | | $ | 0.71 | |
WEIGHTED AVERAGE SHARES OUTSTANDING | | | | | | | | | |
Basic | | 14,219,096 | | 8,994,737 | | 13,271,077 | | 8,945,778 | |
Diluted | | 14,584,247 | | 9,494,444 | | 13,611,051 | | 9,379,991 | |
4
