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WSFS | Financial Corporation | | WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
PRESS RELEASE
FOR IMMEDIATE RELEASE | Contact: Stephen A. Fowle |
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January 24, 2008 | (302) 571-6833 |
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WSFS REPORTS FULL YEAR 2007 EPS OF $4.49, AN $0.08 INCREASE OVER 2006; WSFS REPORTS QUARTERLY EPS OF $1.11, $0.01 OVER 2006
NONPERFORMING ASSETS REMAIN STEADY; 2007 NET CHARGE-OFFS LOW AT 16 BASIS POINTS; LOAN LOSS RESERVE IS STRENGTHENED
CAPITAL STRENGTHENED WHILE COMPANY CONTINUES SHARE REPURCHASE PROGRAM AND INCREASED DIVIDEND BY 25% OVER 2006
WSFS Financial Corporation (NASDAQ/GS: WSFS), the parent company of Wilmington Savings Fund Society, FSB, reported net income for the full year of 2007 of $29.2 million, or $4.49 per diluted share, compared to $30.4 million, or $4.41 in 2006. Net income for the fourth quarter of 2007 was $7.1 million, or $1.11 per diluted share, compared to $7.6 million or $1.10 in the fourth quarter of 2006.
Highlights include:
| • | Commercial loans increased a strong 17%, or a $225.3 million increase from 2006. |
| • | Customer deposits increased 10%, or $135.5 million more than 2006. This included an increase in demand deposit accounts of $38.7 million, or 9%. |
| • | Noninterest income of $48.2 million increased 20% over 2006. |
| • | The Company strengthened its loan loss reserve by providing $3.2 million for loan losses in the fourth quarter, due to strong loan growth and a deteriorating credit environment. |
| • | Nonperforming assets of $16.8 million, or 0.53% of assets, remained steady in comparison to the previous quarter of $16.4 million and 0.53%. Net charge-offs of |
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WSFS | Financial Corporation | | WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
0.16% of loans for 2007 is below industry averages and is returning to more historical levels for WSFS.
| • | WSFS remained above “well-capitalized” levels by all regulatory measures. |
| • | The Company continued its share repurchase program, by repurchasing 50,500 shares of its common stock during quarter, and 564,100 or 8% of its common stock during 2007. |
Notable events for the fourth quarter:
| • | The Company completed the sale of its former headquarters building during the quarter. In conjunction with this sale, WSFS donated the N.C. Wyeth mural Apotheosis of the Family, which had been located in its former headquarters, to the Historical Society of Delaware. The Company recognized a benefit of $0.38 per share as a result of these related events. |
| • | WSFS recorded a $1.2 million, or $0.12 per share, expense related to the Visa antitrust lawsuit settlement with American Express and other pending Visa-related litigation. WSFS expects the proceeds from the anticipated share redemption for its ownership interest in Visa’s planned initial public offering will be applied to this charge. |
| • | Operating expenses, excluding the Visa charge, decreased in comparison to the third quarter of 2007. |
CEO outlook and commentary
Mark A. Turner, WSFS’ President and CEO said, “We continue to make significant progress in many areas of our core business. Once again our customer surveys rank us “world class” in customer engagement and we believe our stellar service model has allowed us to continue to win market share from our competitors. Above-average loan growth and fee income growth are evidence of this success. Additionally, our deposit growth included strong increases in core deposits, exceeding recent industry trends.”
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WSFS | Financial Corporation | | WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
Mr. Turner continued, “While we face some of the same headwinds as the rest of the industry regarding credit quality, we believe we have planned for, and are actively responding to, these challenges. Importantly, Delaware’s relatively stable and well-diversified economy should help us as we respond to these challenges. Over the past few years we have prepared for credit challenges by: limiting our exposure to construction and land development (CLD) loans as we anticipated an end to the expansion in housing prices; diversifying our loan portfolio; and increasing the monitoring of problem loans. These steps supplement the prudent underwriting of our portfolio and the benefits of knowing our customers. The advantages of our actions include:
| • | Of our $2.2 billion loan portfolio, only $252.2 million, or 11% are CLD loans and only $168.1 million, or 8%, are residential CLD. |
| • | We have further increased the level of diversification in our portfolio so that, as of December 31, 2007: no single industry represents more than 10% of the commercial and industrial (C&I) portfolio; no property-type represents more than 18% of our commercial real estate (CRE) portfolio; and no county exposure represents more than 17% of our CLD portfolio. |
| • | Our $452.6 million residential mortgage portfolio includes only $17.4 million in subprime loans. Most of our subprime portfolio is well seasoned, as is evidenced by our low charge-off and delinquency ratios. Net charge offs in this portfolio for the year were minimal at $41,000 or 23 basis points. Subprime delinquencies for the fourth quarter of 2007 were 6.15%. While December data is not yet available for the industry, our September subprime delinquencies compared very favorably to national averages. Our subprime delinquencies for September were 4.22% of subprime loans, or approximately one quarter of the national average of 16.68%, according to the Mortgage Bankers Association. |
| • | The rest of our mortgage portfolio’s delinquency rate also compares favorably to industry averages. For these loans, delinquencies for the fourth quarter of 2007 were 1.65%. Our September delinquencies of 1.72% are nearly half the national average of 3.25%. |
| • | We have increased our allowance for loan losses in each of the last eight quarters, with the provision exceeding net charge-offs. The allowance for loan losses stands at a healthy |
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WSFS | Financial Corporation | | WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
1.32% of loans, compared to 1.13% for the banking industry as reported by the FDIC for the third quarter of 2007.
| • | Our mortgage-backed securities portfolio is comprised of Agency and well-seasoned, high quality, AAA-rated securities. During the quarter, the market value of these securities improved by $3.3 million. Also, in connection with our reverse mortgage loan sale in 2002, we acquired one BBB-rated mortgage-backed security, with a current value of $12.4 million. This security is substantially over-collateralized. The underlying pool has been paying for years and performing better than expectations. The Company does not own any securities backed by subprime mortgages. |
The measures we have taken strengthen the Bank’s credit position. We recognize that we have been subject to some of the same pressures facing the banking industry, including an increase in our delinquent loans, problem loans and charge-offs from the unsustainably low levels of recent years. During the quarter, our net charge-offs increased as we continued our diligent credit administration. This increase is largely due to the one large credit relationship we discussed last quarter. In all, we have appropriately and aggressively added to our loan loss reserves for these more challenging times.
In addition to increasing our reserve for loan losses, we also increased equity while we continued to return earnings to our shareholders through share repurchases, evidencing our strong position and faith in the Company’s future. We are more than well capitalized by regulatory definitions and we will continue to monitor and manage our capital levels prudently.
Finally, while the industry faces more challenging times, we believe our business model and balance sheet are strong, and we are well poised to continue our plans for growth and increased market share in 2008.”
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WSFS | Financial Corporation | | WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
Fourth Quarter 2007 Discussion of Financial Results
Net interest income increased over 2006
Net interest income for 2007 was $82.0 million, an increase of $4.1 million from 2006. The net interest margin increased 11 basis points (0.11%) to 3.09% during 2007, from 2.98% reported in 2006.
Net interest income for the fourth quarter of 2007 was $20.7 million, an increase of $620,000 from the fourth quarter of 2006 and $611,000 greater than the third quarter of 2007. The net interest margin declined 7 basis points (0.07%) from 3.06% reported in the fourth quarter of 2006 and 5 basis points from the third quarter of 2007. The decrease in the net interest margin in comparison to the fourth quarter of 2006 was affected by a $303,000 (or 4 basis points of margin) decrease in income related to reverse mortgages.
The fourth quarter’s margin was adversely impacted by a flat to inverted yield curve, deposit pricing competition and short-term timing differences between our loan and funding repricing.
Total commercial loans increased 17% or $225.3 million from 2006
Commercial and commercial real estate (CRE) loans increased a strong $225.3 million, or 17% over 2006 levels. Total net loans were $2.2 billion at December 31, 2007, an increase of $213.4 million, or 11%, over December 31, 2006. WSFS has continued its strategy of building its commercial and consumer loans to realign the balance sheet toward higher yielding assets.
Commercial and CRE loans increased $63.3 million, or 4% (17% annualized) and consumer loans increased $10.6 million, or 4% (16% annualized) over September 30, 2007
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WSFS | Financial Corporation | | WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
levels. Total net loans increased $75.1 million, or 3% (14% annualized) over September 30, 2007.
The following table summarizes the current loan balances and composition compared to prior periods.
(Dollars in thousands) | | At Dec. 31, 2007 | | | | At Sep. 30, 2007 | | | | At Dec. 31, 2006 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Amount | | | | % | | | | Amount | | | | % | | | | Amount | | | | % | |
Commercial and CRE | | $ | 1,531,230 | | | | 68 | % | | | $ | 1,467,960 | | | | 68 | % | | | $ | 1,305,903 | | | | 64 | % |
Residential | | | 452,612 | | | | 20 | | | | | 450,364 | | | | 21 | | | | | 476,915 | | | | 24 | |
Consumer | | | 279,107 | | | | 13 | | | | | 268,468 | | | | 12 | | | | | 264,307 | | | | 13 | |
Allowance for loan losses | | | (29,811 | ) | | | (1 | ) | | | | (28,768 | ) | | | (1 | ) | | | | (27,384 | ) | | | (1 | ) |
Net Loans | | $ | 2,233,138 | | | | 100 | % | | | $ | 2,158,024 | | | | 100 | % | | | $ | 2,019,741 | | | | 100 | % |
Asset quality
The Company recorded a provision for loan losses of $3.2 million in the fourth quarter of 2007 compared to $1.0 million in the fourth quarter of 2006 and $1.0 million in the third quarter of 2007. The provision was affected by: (1) continued significant growth in the Company’s loans; (2) migration of certain loans toward lower credit grades as the Company continues to assess its exposure in the current environment; partially offset by (3) a lower level of estimated losses for certain types of pass-grade loans resulting from an improvement in the methodology for estimating loan losses using historical data adjusted for current conditions and trends. The improvement in this methodology resulted in a reduction of approximately $3.5 million, net, from the method previously used.
Nonperforming assets as a percentage of total assets of 0.53% at December 31, 2007 remained constant with 0.53% also reported at September 30, 2007 and increased from 0.14% at December 31, 2006.
Net charge-offs for the full year of 2007 were 0.16% compared to 0.04% for 2006. Annualized net charge-offs in the fourth quarter of 2007 were 0.39% of average loans. This compares to 0.11% for the third quarter of 2007 and 0.08% for the fourth quarter of 2006. The
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WSFS | Financial Corporation | | WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
ratio of allowance for loan losses to total loans held steady at 1.32% at December 31, 2007, compared to 1.32% at September 30, 2007 and 1.34% at December 31, 2006.
Customer deposits increased 10% or $135.5 million from the fourth quarter of 2006
Total customer deposits (core deposits and customer time deposits) were $1.5 billion at December 31, 2007, an increase of $135.5 million, or 10%, over balances at December 31, 2006. This growth included a $65.7 million increase in core deposits. The increase in core deposits included $38.7 million, or 9%, in additional demand deposit accounts.
Customer deposits increased $30.4 million, or 2% (8% annualized) from September 30, 2007. This variance was mainly due to a $28.2 million increase in customer time deposits as well as a $17.7 million increase in non-interest bearing demand deposits, offset by declines in savings and money market accounts.
The following table summarizes the current customer deposit balances and composition compared to prior periods.
(Dollars in thousands) | | At Dec. 31, 2007 | | | At Sep. 30, 2007 | | | At Dec. 31, 2006 | |
| | | | | | | | | | | | | | | | | | | | | |
| | Amount | | | % | | | Amount | | | % | | | Amount | | | % | |
Non-interest demand | | $ | 290,423 | | | 20 | % | | $ | 272,678 | | | 19 | % | | $ | 276,338 | | | 21 | % |
Interest bearing demand | | | 171,363 | | | 12 | | | | 172,680 | | | 12 | | | | 146,719 | | | 11 | |
Savings | | | 196,571 | | | 13 | | | | 203,560 | | | 14 | | | | 226,853 | | | 17 | |
Money market | | | 303,930 | | | 20 | | | | 311,132 | | | 21 | | | | 246,645 | | | 18 | |
Total core deposits | | | 962,287 | | | 65 | | | | 960,050 | | | 66 | | | | 896,555 | | | 67 | |
Customer time | | | 516,910 | | | 35 | | | | 488,735 | | | 34 | | | | 447,151 | | | 33 | |
Total customer deposits | | $ | 1,479,197 | | | 100 | % | | $ | 1,448,785 | | | 100 | % | | $ | 1,343,706 | | | 100 | % |
Noninterest income grew $1.9 million, or 17%, over the fourth quarter of 2006
During the fourth quarter of 2007, the Company recorded noninterest income of $13.0 million, an increase of $1.9 million, or 17%, from the fourth quarter of 2006. This increase included a $1.1 million non-recurring gain related to the sale of the Company’s former
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WSFS | Financial Corporation | | WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
headquarters building. Excluding this gain, noninterest income increased by $833,000, or 8%. This increase is due to increases of $158,000 in deposit service charges and $153,000 in credit/debit card and ATM income. Also adding to the increase in noninterest income were $168,000 of fees from the Company’s reverse mortgage origination initiative, formed during the second half of 2006.
Noninterest income was $199,000 higher than the third quarter of 2007. This comparison includes the previously mentioned gain on the sale of the Company’s former headquarters building in the fourth quarter, and the $882,000 non-recurring gain on the sale of its credit card portfolio recorded during the third quarter. Excluding these items, noninterest income remained similar to the previous quarter and reflects some seasonality in business lines.
Excluding non-recurring gains, fee revenues represented a healthy 36% of total revenues compared to 35% during the fourth quarter of 2006 and 37% during the third quarter of 2007.
Noninterest expense increases reflect continued investment in the WSFS franchise
Noninterest expenses for the fourth quarter of 2007 totaled $22.1 million, which was $3.6 million, or 19% greater than the fourth quarter of 2006. During the fourth quarter the Company recorded the previously mentioned $1.2 million Visa litigation expense. The remainder of the increase is primarily attributable to the Company’s continued growth efforts. Marketing expenses increased $323,000 over the fourth quarter of 2006, primarily due to the multi-year brand campaign which started late in the third quarter of 2007. With the tag line “We Stand For Service,”TM the brand campaign leverages the Bank’s Stellar Service value proposition in a unique and memorable way.
Noninterest expenses increased $796,000, or 4%, over the third quarter of 2007. Excluding the charges related to the Visa expense, noninterest expense actually decreased $409,000, or 2%, compared to the third quarter of 2007. This included decreases to marketing expense of $264,000 and occupancy of $209,000. These decreases were partially offset by an
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WSFS | Financial Corporation | | WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
additional $320,000 or $0.03 per share of stock option expense for the immediate expensing of options granted to retirement-eligible Associates.
Income taxes
The Company recorded a $1.3 million income tax provision in the fourth quarter of 2007. This included a $1.7 million tax benefit resulting from the donation of the N.C. Wyeth mural Apotheosis of the Family. Excluding this tax benefit, the Company would have recorded a $3.0 million tax provision (reflecting a 35.5% effective tax rate) versus $4.0 million in the fourth quarter of 2006 (34.3% effective tax rate) and $3.4 million in the third quarter of 2007 (32.4% effective tax rate). The Company expects regular fluctuations in its effective tax rate.
Capital Management
During the fourth quarter of 2007, the Company strengthened its capital while returning a portion of its earnings to shareholders. The ratio of tangible equity to assets increased slightly to 6.50% at December 31, 2007, as equity increased $7.8 million over September 30, 2007. All regulatory capital levels are in excess of “well-capitalized” regulatory benchmarks, the regulators’ highest capital rating. The Tier 1 capital ratio was 11.11%, nearly double the 6.00% level required to be considered “well-capitalized” under regulatory definitions. Tangible book value per share increased to $33.71 at December 31, 2007, from $32.18 at September 30, 2007 and $31.58 at December 31, 2006. During the quarter the Company repurchased 50,500 shares of common stock at an average price of $53.36 per share. During the full year 2007, the Company repurchased 564,100 shares or 8%, of its common stock at an average price of $64.13. At December 31, 2007, the Company had 579,500 shares remaining under its current share repurchase authorization, or 9.4% of its 6.2 million outstanding shares.
The Board of Directors also declared a quarterly cash dividend of $0.10 per share. This dividend represents a 25% increase from that of the fourth quarter of 2006. This dividend will be paid on February 29, 2008, to shareholders of record as of February 15, 2008.
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WSFS | Financial Corporation | | WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
WSFS Financial Corporation is a $3.2 billionfinancial services company. Its principal subsidiary, Wilmington Savings Fund Society, FSB, currently operates 29 retail banking offices in all three counties in Delaware, as well as Chester and Delaware Counties in Pennsylvania, providing full banking services under the WSFS Bank brand, and wealth management and personal trust services under Wilmington Advisors, a division of WSFS Bank. Other subsidiaries include: WSFS Investment Group, Inc. and Montchanin Capital Management, Inc. Founded in 1832, WSFS is one of the ten oldest banks in the United States continuously operating under the same name. For more information, please visit the Bank’s website at http://www.wsfsbank.com .
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Statements contained in this news release which are not historical facts, are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by WSFS Financial Corporation with the Securities and Exchange Commission from time to time. The Corporation does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Corporation.
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WSFS | Financial Corporation | | WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS
STATEMENT OF OPERATIONS
(Dollars in thousands, except per share data)
(Unaudited)
| Three Months ended | | | Twelve Months ended | |
| December 31, | | | September 30, | | | December 31, | | | December 31, | | | December 31, | |
| 2007 | | | 2007 | | | 2006 | | | 2007 | | | 2006 | |
Interest income: | | | | | | | | | | | | | | | | | | | |
Interest and fees on loans | $ | 40,911 | | | $ | 40,747 | | | $ | 38,624 | | | $ | 159,512 | | | $ | 143,629 | |
Interest on mortgage-backed securities | | 6,200 | | | | 5,799 | | | | 6,455 | | | | 24,237 | | | | 28,444 | |
Interest and dividends on investment securities | | 466 | | | | 457 | | | | 929 | | | | 3,360 | | | | 2,568 | |
Other interest income | | 566 | | | | 576 | | | | 693 | | | | 2,368 | | | | 2,536 | |
| | 48,143 | | | | 47,579 | | | | 46,701 | | | | 189,477 | | | | 177,177 | |
Interest expense: | | | | | | | | | | | | | | | | | | | |
Interest on deposits | | 13,558 | | | | 15,066 | | | | 13,025 | | | | 57,311 | | | | 42,707 | |
Interest on Federal Home Loan Bank advances | | 10,821 | | | | 9,280 | | | | 10,747 | | | | 38,561 | | | | 45,878 | |
Interest on trust preferred borrowings | | 1,198 | | | | 1,217 | | | | 1,194 | | | | 4,753 | | | | 5,053 | |
Interest on other borrowings | | 1,856 | | | | 1,917 | | | | 1,645 | | | | 6,843 | | | | 5,640 | |
| | 27,433 | | | | 27,480 | | | | 26,611 | | | | 107,468 | | | | 99,278 | |
| | | | | | | | | | | | | | | | | | | |
Net interest income | | 20,710 | | | | 20,099 | | | | 20,090 | | | | 82,009 | | | | 77,899 | |
Provision for loan losses | | 3,217 | | | | 1,001 | | | | 1,036 | | | | 5,862 | | | | 2,738 | |
| | | | | | | | | | | | | | | | | | | |
Net interest income after provision for loan losses | | 17,493 | | | | 19,098 | | | | 19,054 | | | | 76,147 | | | | 75,161 | |
| | | | | | | | | | | | | | | | | | | |
Noninterest income: | | | | | | | | | | | | | | | | | | | |
Credit/debit card and ATM income | | 4,988 | | | | 5,205 | | | | 4,835 | | | | 19,750 | | | | 18,835 | |
Deposit service charges | | 4,026 | | | | 3,937 | | | | 3,868 | | | | 15,419 | | | | 12,250 | |
Investment advisory income | | 670 | | | | 603 | | | | 578 | | | | 2,465 | | | | 2,399 | |
Loan fee income | | 627 | | | | 615 | | | | 532 | | | | 2,384 | | | | 1,824 | |
Bank owned life insurance income | | 627 | | | | 543 | | | | 565 | | | | 2,269 | | | | 3,976 | |
Mortgage banking activities, net | | (1 | ) | | | 68 | | | | 6 | | | | 217 | | | | 225 | |
Securities gains (losses) | | 82 | | | | — | | | | — | | | | 82 | | | | (1,981 | ) |
Non-recurring gains, net | | 1,097 | | | | 882 | | | | — | | | | 1,979 | | | | — | |
Other income | | 892 | | | | 956 | | | | 694 | | | | 3,601 | | | | 2,777 | |
| | 13,008 | | | | 12,809 | | | | 11,078 | | | | 48,166 | | | | 40,305 | |
Noninterest expenses: | | | | | | | | | | | | | | | | | | | |
Salaries, benefits and other compensation | | 11,214 | | | | 11,347 | | | | 10,567 | | | | 43,662 | | | | 39,369 | |
Occupancy expense | | 2,078 | | | | 2,287 | | | | 1,474 | | | | 8,280 | | | | 5,508 | |
Equipment expense | | 1,428 | | | | 1,597 | | | | 1,174 | | | | 5,616 | | | | 4,393 | |
Data processing and operations expense | | 1,084 | | | | 1,089 | | | | 879 | | | | 4,062 | | | | 3,511 | |
Marketing expense | | 1,019 | | | | 1,283 | | | | 696 | | | | 3,911 | | | | 2,713 | |
Professional fees | | 709 | | | | 646 | | | | 721 | | | | 2,662 | | | | 2,070 | |
Other operating expenses | | 4,597 | | | | 3,084 | | | | 3,042 | | | | 13,654 | | | | 11,750 | |
| | 22,129 | | | | 21,333 | | | | 18,553 | | | | 81,847 | | | | 69,314 | |
| | | | | | | | | | | | | | | | | | | |
Income before adjustment for minority interest and taxes | | 8,372 | | | | 10,574 | | | | 11,579 | | | | 42,466 | | | | 46,152 | |
Less minority interest | | — | | | | — | | | | 11 | | | | — | | | | 51 | |
Income before taxes | | 8,372 | | | | 10,574 | | | | 11,568 | | | | 42,466 | | | | 46,101 | |
Income tax provision | | 1,287 | | | | 3,431 | | | | 3,969 | | | | 13,228 | | | | 15,660 | |
Net income | $ | 7,085 | | | $ | 7,143 | | | $ | 7,599 | | | $ | 29,238 | | | $ | 30,441 | |
| | | | | | | | | | | | | | | | | | | |
Diluted earnings per share: | | | | | | | | | | | | | | | | | | | |
Net income | $ | 1.11 | | | $ | 1.11 | | | $ | 1.10 | | | $ | 4.49 | | | $ | 4.41 | |
| | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding for diluted EPS | | 6,356,779 | | | | 6,426,816 | | | | 6,904,313 | | | | 6,509,709 | | | | 6,903,702 | |
| | | | | | | | | | | | | | | | | | | |
Performance Ratios: | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Return on average assets (a) | | 0.90 | % | | | 0.95 | % | | | 1.02 | % | | | 0.97 | % | | | 1.03 | |
Return on average equity (a) | | 13.56 | | | | 14.02 | | | | 14.25 | | | | 14.14 | | | | 15.42 | |
Net interest margin (a)(b) | | 2.99 | | | | 3.04 | | | | 3.06 | | | | 3.09 | | | | 2.98 | |
Efficiency ratio (c) | | 65.09 | | | | 64.28 | | | | 58.99 | | | | 62.34 | | | | 58.09 | |
Noninterest income as a percentage of total revenue (b) | | 38.26 | | | | 38.60 | | | | 35.22 | | | | 36.69 | | | | 33.78 | |
See “Notes”
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WSFS | Financial Corporation | | WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
SUMMARY STATEMENT OF CONDITION
(Dollars in thousands)
(Unaudited)
| December 31, | | | | September 30, | | | | December 31, | |
| 2007 | | | | 2007 | | | | 2006 | |
Assets: | | | | | | | | | | | | | |
Cash and due from banks | $ | 80,752 | | | | $ | 69,948 | | | | $ | 73,989 | |
Cash in non-owned ATMs | | 185,707 | | | | | 168,162 | | | | | 166,092 | |
Investment securities (d)(e) | | 28,272 | | | | | 27,530 | | | | | 54,491 | |
Other investments | | 46,615 | | | | | 42,517 | | | | | 41,615 | |
Mortgage-backed securities (d) | | 496,792 | | | | | 485,677 | | | | | 516,711 | |
Net loans (f)(g)(n) | | 2,233,138 | | | | | 2,158,024 | | | | | 2,019,741 | |
Bank owned life insurance | | 57,551 | | | | | 56,924 | | | | | 55,282 | |
Other assets | | 72,669 | | | | | 74,996 | | | | | 69,475 | |
Total assets | $ | 3,201,496 | | | | $ | 3,083,778 | | | | $ | 2,997,396 | |
| | | | | | | | | | | | | |
Liabilities and Stockholders' Equity: | | | | | | | | | | | | | |
Noninterest-bearing deposits | $ | 290,424 | | | | $ | 272,678 | | | | $ | 276,338 | |
Interest-bearing deposits | | 1,188,773 | | | | | 1,176,107 | | | | | 1,067,368 | |
Total customer deposits | | 1,479,197 | | | | | 1,448,785 | | | | | 1,343,706 | |
Other jumbo CDs | | 98,758 | | | | | 93,580 | | | | | 111,388 | |
Brokered deposits | | 249,206 | | | | | 268,724 | | | | | 301,254 | |
Total deposits | | 1,827,161 | | | | | 1,811,089 | | | | | 1,756,348 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Federal Home Loan Bank advances | | 898,280 | | | | | 798,560 | | | | | 784,028 | |
Other borrowings | | 236,880 | | | | | 236,120 | | | | | 218,651 | |
Other liabilities | | 28,256 | | | | | 34,901 | | | | | 26,256 | |
| | | | | | | | | | | | | |
Total liabilities | | 2,990,577 | | | | | 2,880,670 | | | | | 2,785,283 | |
| | | | | | | | | | | | | |
Minority interest | | — | | | | | 34 | | | | | 54 | |
| | | | | | | | | | | | | |
Stockholders' equity | | 210,919 | | | | | 203,074 | | | | | 212,059 | |
| | | | | | | | | | | | | |
Total liabilities, minority interest and stockholders' equity | $ | 3,201,496 | | | | $ | 3,083,778 | | | | $ | 2,997,396 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Capital Ratios: | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Equity to asset ratio | | 6.59 | % | | | | 6.59 | % | | | | 7.07 | % |
Tangible equity to asset ratio | | 6.50 | | | | | 6.49 | | | | | 7.00 | |
Core capital (h) (required: 4.00%; well-capitalized: 5.00%) | | 8.62 | | | | | 8.68 | | | | | 9.25 | |
Tier 1 capital (h) (required: 4.00%; well-capitalized: 6.00%) | | 11.11 | | | | | 11.10 | | | | | 12.42 | |
Risk-based capital (h) (required: 8.00%; well-capitalized: 10.00%) | | 12.27 | | | | | 12.22 | | | | | 13.54 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Asset Quality Indicators: | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Nonperforming Assets: | | | | | | | | | | | | | |
Nonaccruing loans | $ | 16,137 | | | | $ | 15,727 | | | | $ | 3,832 | |
Assets acquired through foreclosure | | 703 | | | | | 703 | | | | | 388 | |
Total nonperforming assets | $ | 16,840 | | | | $ | 16,430 | | | | $ | 4,220 | |
| | | | | | | | | | | | | |
Past due loans (i) | $ | 575 | | | | $ | 733 | | | | $ | 251 | |
| | | | | | | | | | | | | |
Allowance for loan losses | $ | 29,811 | | | | $ | 28,768 | | | | $ | 27,384 | |
| | | | | | | | | | | | | |
Ratio of nonperforming assets to total assets | | 0.53 | % | | | | 0.53 | % | | | | 0.14 | % |
Ratio of allowance for loan losses to total gross | | | | | | | | | | | | | |
loans (j) | | 1.32 | | | | | 1.32 | | | | | 1.34 | |
Ratio of allowance for loan losses to nonaccruing | | | | | | | | | | | | | |
loans (k) | | 180 | | | | | 172 | | | | | 705 | |
Ratio of quarterly net charge-offs | | | | | | | | | | | | | |
to average gross loans (a)(f) | | 0.39 | | | | | 0.11 | | | | | 0.08 | |
Ratio of year-to-date net charge-offs | | | | | | | | | | | | | |
to average gross loans (a)(f) | | 0.16 | | | | | 0.08 | | | | | 0.04 | |
| | | | | | | | | | | | | |
See “Notes”
13
WSFS | Financial Corporation | | WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
AVERAGE BALANCE SHEET
(Dollars in thousands)
(Unaudited)
| | | Three months ended | |
| | | December 31, 2007 | | | September 30, 2007 | | | December 31, 2006 | |
| | | Average | | | Interest & | | Yield/ | | | Average | | | Interest & | | Yield/ | | | Average | | | Interest & | | | Yield/ | |
| | | Balance | | | Dividends | | Rate(a)(b) | | | Balance | | | Dividends | | Rate(a)(b) | | | Balance | | | Dividends | | | Rate(a)(b) | |
Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-earning assets: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans: (f) (l) | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate loans | | $ | 732,075 | | $ | 14,272 | | 7.80 | % | $ | 697,945 | | $ | 14,286 | | 8.19 | % | $ | 656,780 | | | $ 13,938 | | | 8.49 | % |
Residential real estate loans (n) | | | 449,181 | | | 6,633 | | 5.91 | | | 454,010 | | | 6,551 | | 5.77 | | | 480,350 | | | 6,777 | | | 5.64 | |
Commercial loans | | | 776,442 | | | 14,995 | | 7.70 | | | 721,080 | | | 14,707 | | 8.13 | | | 627,892 | | | 12,888 | | | 8.21 | |
Consumer loans | | | 274,238 | | | 5,011 | | 7.25 | | | 272,881 | | | 5,203 | | 7.56 | | | 264,210 | | | 5,021 | | | 7.54 | |
Total loans (n) | | | 2,231,936 | | | 40,911 | | 7.38 | | | 2,145,916 | | | 40,747 | | 7.65 | | | 2,029,232 | | | 38,624 | | | 7.67 | |
Mortgage-backed securities (d) | | | 500,417 | | | 6,200 | | 4.96 | | | 467,998 | | | 5,799 | | 4.96 | | | 530,385 | | | 6,455 | | | 4.87 | |
Investment securities (d)(e) | | | 27,886 | | | 466 | | 6.68 | | | 27,704 | | | 457 | | 6.60 | | | 54,712 | | | 929 | | | 6.79 | |
Other interest-earning assets | | | 45,492 | | | 566 | | 4.94 | | | 38,030 | | | 576 | | 6.02 | | | 47,777 | | | 693 | | | 5.75 | |
Total interest-earning assets | | | 2,805,731 | | | 48,143 | | 6.90 | | | 2,679,648 | | | 47,579 | | 7.14 | | | 2,662,106 | | | 46,701 | | | 7.06 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses | | | (28,754 | ) | | | | | | | (28,503 | ) | | | | | | | (27,093 | ) | | | | | | |
Cash and due from banks | | | 68,510 | | | | | | | | 64,834 | | | | | | | | 66,701 | | | | | | | |
Cash in non-owned ATMs | | | 172,843 | | | | | | | | 169,775 | | | | | | | | 151,675 | | | | | | | |
Bank owned life insurance | | | 57,127 | | | | | | | | 56,571 | | | | | | | | 56,357 | | | | | | | |
Other noninterest-earning assets | | | 67,281 | | | | | | | | 70,447 | | | | | | | | 60,919 | | | | | | | |
Total assets | | $ | 3,142,738 | | | | | | | $ | 3,012,772 | | | | | | | $ | 2,970,665 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Liabilities and Stockholders’ Equity: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest bearing deposits: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing demand | | | $ 154,389 | | $ | 400 | | 1.03 | | $ | $ 154,474 | | $ | 401 | | 1.03 | | $ | 126,509 | | $ | 254 | | | 0.80 | |
Money market | | | 309,807 | | | 2,723 | | 3.49 | | | 313,825 | | | 3,057 | | 3.86 | | | 247,489 | | | 2,318 | | | 3.72 | |
Savings | | | 200,220 | | | 359 | | 0.71 | | | 208,811 | | | 437 | | 0.83 | | | 233,392 | | | 615 | | | 1.05 | |
Customer time deposits | | | 499,061 | | | 5,939 | | 4.72 | | | 490,133 | | | 5,848 | | 4.73 | | | 434,395 | | | 4,942 | | | 4.51 | |
Total interest-bearing customer deposits | | | 1,163,477 | | | 9,421 | | 3.21 | | | 1,167,243 | | | 9,743 | | 3.31 | | | 1,041,785 | | | 8,129 | | | 3.10 | |
Other jumbo certificates of deposit | | | 97,442 | | | 1,242 | | 5.06 | | | 94,535 | | | 1,268 | | 5.32 | | | 100,667 | | | 1,365 | | | 5.38 | |
Brokered deposits | | | 227,372 | | | 2,895 | | 5.05 | | | 299,337 | | | 4,055 | | 5.38 | | | 261,714 | | | 3,531 | | | 5.35 | |
Total interest-bearing deposits | | | 1,488,291 | | | 13,558 | | 3.61 | | | 1,561,115 | | | 15,066 | | 3.83 | | | 1,404,166 | | | 13,025 | | | 3.68 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
FHLB of Pittsburgh advances | | | 904,608 | | | 10,821 | | 4.68 | | | 719,175 | | | 9,280 | | 5.05 | | | 863,177 | | | 10,747 | | | 4.87 | |
Trust preferred borrowings | | | 67,011 | | | 1,198 | | 7.00 | | | 67,011 | | | 1,217 | | 7.11 | | | 67,011 | | | 1,194 | | | 6.97 | |
Other borrowed funds | | | 168,553 | | | 1,856 | | 4.40 | | | 160,752 | | | 1,917 | | 4.77 | | | 136,653 | | | 1,645 | | | 4.82 | |
Total interest-bearing liabilities | | | 2,628,463 | | | 27,433 | | 4.17 | | | 2,508,053 | | | 27,480 | | 4.38 | | | 2,471,007 | | | 26,611 | | | 4.31 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing demand deposits | | | 272,091 | | | | | | | | 273,990 | | | | | | | | 258,702 | | | | | | | |
Other noninterest-bearing liabilities | | | 33,221 | | | | | | | | 26,884 | | | | | | | | 27,665 | | | | | | | |
Minority interest | | | 33 | | | | | | | | 34 | | | | | | | | 51 | | | | | | | |
Stockholders’ equity | | | 208,930 | | | | | | | | 203,811 | | | | | | | | 213,240 | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 3,142,738 | | | | | | | $ | 3,012,772 | | | | | | | $ | 2,970,665 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Excess of interest-earning assets | | | | | | | | | | | | | | | | | | | | | | | | | | |
over interest-bearing liabilities | | $ | 177,268 | | | | | | | $ | 171,595 | | | | | | | $ | 191,099 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest and dividend income | | | | | $ | 20,710 | | | | | | | $ | 20,099 | | | | | | | $ | 20,090 | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest rate spread | | | | | | | | 2.73 | % | | | | | | | 2.76 | % | | | | | | | | 2.75 | % |
Net interest margin | | | | | | | | 2.99 | % | | | | | | | 3.04 | % | | | | | | | | 3.06 | % |
See “Notes”
14
WSFS | Financial Corporation | | WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
(Dollars in thousands, except per share data)
(Unaudited)
| Three months ended | | Twelve months ended | |
| December 31, | | September 30, | | December 31, | | December 31, | | December 31, | |
| 2007 | | 2007 | | 2006 | | 2007 | | 2006 | |
| | | | | | | | | | |
Stock Information: | | | | | | | | | | |
| | | | | | | | | | |
Market price of common stock: | | | | | | | | | | |
High | $ 67.97 | | $ 67.31 | | $ 68.00 | | $ 70.69 | | $ 68.00 | |
Low | 49.87 | | 54.15 | | 60.35 | | 49.87 | | 58.08 | |
Close | 50.20 | | 62.40 | | 66.93 | | 50.20 | | 66.93 | |
Book value per share | 34.20 | | 32.67 | | 31.93 | | | | | |
Tangible book value per share | 33.71 | | 32.18 | | 31.58 | | | | | |
Number of shares outstanding (000s) | 6,167 | | 6,215 | | 6,642 | | | | | |
| | | | | | | | | | |
Other Financial Data: | | | | | | | | | | |
| | | | | | | | | | |
One-year repricing gap to total assets (m) | (3.72) | % | (1.12) | % | (1.03) | % | | | | |
Weighted average duration of the MBS portfolio | 2.8 years | | 3.3 years | | 2.9 years | | | | | |
Unrealized losses on securities available-for-sale, net of taxes | $ (3,405) | | $ (6,724) | | $ (8,012) | | | | | |
Number of associates (FTEs) | 599 | | 612 | | 573 | | | | | |
Number of branch offices | 29 | | 29 | | 27 | | | | | |
Number of WSFS owned ATMs | 325 | | 319 | | 313 | | | | | |
| | | | | | | | | | |
Notes:
(a) | Annualized. |
(b) | Computed on a fully tax-equivalent basis. |
(c) | Noninterest expense divided by (tax-equivalent) net interest income and noninterest income. |
(d) | Includes securities available-for-sale. |
(e) | Includes reverse mortgages. |
(f) | Net of unearned income. |
(g) | Net of allowance for loan losses. |
(h) | Represents capital ratios of Wilmington Savings Fund Society, FSB and subsidiaries. |
(i) | Accruing loans which are contractually past due 90 days or more as to principal or interest. |
(j) | Excludes loans held-for-sale. |
(k) | Includes general reserves only. |
(l) | Nonperforming loans are included in average balance computations. |
(m) | The difference between projected amounts of interest-sensitive assets and interest-sensitive liabilities repricing within one year divided by total assets, based on a current interest rate scenario. |
(n) | Includes loans held-for-sale. |
