| 1 WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
FOR IMMEDIATE RELEASE | Contact: Stephen A. Fowle |
|
|
February 3, 2009 | (302) 571-6833 |
|
|
WSFS REPORTS FULL YEAR AND 4Q '08 EPS;
MAINTAINS & DECLARES A $0.12 DIVIDEND
WSFS Financial Corporation (NASDAQ/GS: WSFS), the parent company of Wilmington Savings Fund Society, FSB, reported net income for the full year of 2008 of $16.1 million, or $2.57 per diluted share, compared to $29.6 million, or $4.55 in 2007. WSFS reported a net loss for the fourth quarter of 2008 of $3.3 million or $0.54 per share, compared to net income of $7.5 million or $1.18 per share, for the fourth quarter of 2007. Larger items contributing to the fourth quarter results were discussed in the Company’s press release dated January 22, 2009.
Highlights:
• | Despite a very challenging economic environment, return on equity (ROE) was 7.30% and return on assets (ROA) for 2008 was 0.50%. |
• | Customer deposits continued strong growth, increasing 15%, or $227.9 million from December 31, 2007. Further, growth in customer deposits accelerated this quarter, increasing $173.4 million from September 30, 2008. Excluding deposits from a branch acquisition during the quarter (see notable events), the quarter’s growth totaled $78.1 million, a strong 20% annualized growth rate. |
• | Commercial loan growth continued, increasing $114.8 million from September 30, 2008. WSFS continues to see lending opportunities due to disruption and dislocation at other |
| 2 WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
financial institutions, while being cautious as the economic environment demands more prudent underwriting.
• | At December 31, 2008 capital remains strong and substantially above “well-capitalized” levels by all regulatory measures. Tier 1 capital was 9.92%, compared to the 6.00% “well-capitalized” level and exceeded the “well-capitalized” level by $108.3 million. These ratios do not include the additional capital raised through our participation in the Capital Purchase Program (CPP), discussed later. |
Notable events:
• | On October 27, 2008 WSFS completed the acquisition of all six Delaware branches of Sun National Bank, including 9,600 customer deposit accounts totaling approximately $95.3 million. Currently, the deposits of these branches had increased more than to $97.8 million. |
• | On January 23, 2009 WSFS completed the sale of its senior preferred stock totaling $52.6 million to the U.S. Department of the Treasury under its Capital Purchase Program (CPP), in their program to “directly infuse capital into healthy viable banks with the goal of increasing the flow of financing available to small businesses and consumers.” |
• | As detailed in our earlier press release, during the fourth quarter of 2008, WSFS recorded: |
| o | $14.9 million provision for loan losses and letter of credit contingency, which was primarily related to four large construction and land development (CLD) credits; |
o | $700,000 in additional write-downs of values of assets acquired through foreclosure (REO); |
| 3 WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
| o | $1.0 million charge (taken through interest income) related to its second-lien interest in 21 whole-loan reverse mortgages; |
| o | $1.4 million charge related to a mark-to-market adjustment on the $12.4 million BBB+ rated mortgage-backed security (MBS) issued in connection with a 2002 reverse mortgage securitization. Despite this last write-down, WSFS expects any holder of this security to recover all principal and interest, mainly because of its seasoning and it is well over-collateralized. |
CEO outlook and commentary:
Mark A. Turner, WSFS’ President and CEO said, “Our results for the fourth quarter reflect a deepening recession in the global and national economy and, more specifically, in the markets we serve. We proactively and appropriately confronted this reality with an increase in our provision for loan losses and other write-downs recorded during the quarter.”
Mr. Turner continued, “While we are not pleased to have taken a loss this quarter, we reported a profit for 2008, a very challenging year. Although we cannot predict the future, we are anticipating a profitable 2009. Given the economic outlook, our planning for the coming year balances appropriate adjustments and expense reductions with the continued pursuit of strategic growth, including branch openings and continued lending growth, in service to our customers and communities.”
| 4 WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
Fourth Quarter 2008 Discussion of Financial Results
Net interest income
Net interest income for the fourth quarter of 2008 was $22.6 million, and improved by $1.9 million, or 9% in comparison to the fourth quarter of 2007. The net interest margin increased 8 basis points (0.08%) from the 2.99% reported in the fourth quarter of 2007, despite the $1.0 million charge related to reverse mortgages. Excluding this charge, the fourth quarter 2008 margin would have been 3.20%.
Net interest income for the fourth quarter of 2008 was $22.6 million and the net interest margin was 3.07%. This represented a decrease of $731,000 and 21 basis points (0.21%) from the third quarter of 2008. This decrease was mainly due to the previously mentioned charge related to reverse mortgages.
Total commercial loans increased 15% or $222.4 million from December 31, 2007
Commercial and commercial real estate (CRE) loans increased $222.4 million, or 15%, over December 31, 2007. Commercial and industrial loans, which increased $155.5 million, or 20%, accounted for nearly three-quarters of this growth. Construction and land development (CLD) loans decreased $25.3 million, or 9% from December 31, 2007. Making up the difference, commercial mortgages increased $92.2 million, or 20%. Total net loans were $2.4 billion at December 31, 2008, an increase of $209.9 million, or 9%, over December 31, 2007.
| 5 WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
Commercial and CRE loans increased $114.8 million, or 7% (28% annualized) over September 30, 2008 levels. This included a $66.1 million, or 8% (30% annualized) increase in C&I loans. Commercial mortgages increased $41.9 million, or 8% (33% annualized) during the quarter. Total net loans increased $113.6 million, or 5% (20% annualized) over September 30, 2008.
The following table summarizes the current loan balances and composition compared to prior periods.
|
|
| At |
|
|
| At |
|
|
| At |
| |||||||||||||||
(Dollars in thousands) |
|
| Dec. 31, 2008 |
|
|
| Sep. 30, 2008 |
|
|
| Dec. 31, 2007 |
| |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Commercial and CRE |
|
| $ | 1,749,944 |
|
|
| 72 | % |
|
| $ | 1,635,162 |
|
|
| 70 | % |
|
| $ | 1,527,513 |
|
|
| 68 | % |
Residential mortgage |
|
|
| 427,481 |
|
|
| 17 |
|
|
|
| 434,125 |
|
|
| 19 |
|
|
|
| 452,612 |
|
|
| 20 |
|
Consumer |
|
|
| 297,599 |
|
|
| 12 |
|
|
|
| 289,301 |
|
|
| 12 |
|
|
|
| 279,107 |
|
|
| 13 |
|
Allowance for loan losses |
|
|
| (31,189 | ) |
|
| (1 | ) |
|
|
| (28,358 | ) |
|
| (1 | ) |
|
|
| (25,252 | ) |
|
| (1 | ) |
Net Loans |
|
| $ | 2,443,835 |
|
|
| 100 | % |
|
| $ | 2,330,230 |
|
|
| 100 | % |
|
| $ | 2,233,980 |
|
|
| 100 | % |
Residential first mortgage loans have declined from previous periods because of decreased demand, paydowns and our strategy to sell most new originations of fixed rate loans.
As of December 31, 2008, our construction and land development (CLD) loans represented $229 million, or only 9.2% of our loan portfolio, down from $230 million or 9.8% at September 30, 2008. Residential CLD, one of the hardest hit sectors in today’s economy, represents only $142 million or 5.7% of the loan portfolio. The Company’s average residential CLD loan is $1.4 million. Only eight of its residential CLD loans exceeded $5 million in outstandings. Commercial loan delinquencies improved from 1.74% at September 30, 2008 to 1.30% at December 31, 2008.
WSFS’ mortgage and consumer loan portfolios show positive comparisons to national trends, but also reflect the impact of a declining housing market:
| 6 WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
• | Delinquencies in the Company’s $410 million prime first mortgage portfolio is 3.13% as of December 31, 2008 compared to national delinquencies of 4.54% as of September 30, 2008, the date of the most recent comparable data. |
• | Subprime mortgage delinquencies of 3.20% in WSFS’ small $17 million portfolio (less than 0.7% of loans) are a fraction of the national average of 20.47%, due to our underwriting and the seasoning of these loans. |
• | Consumer home equity installment loans ($132 million) had delinquencies of 0.70% versus the national rate of 2.65%; and home equity lines of credit ($142 million) had delinquencies of 0.53% compared to the national rate of 1.16%. |
• | Fourth quarter net charge-offs in the above consumer loan portfolios were only 0.40% (annualized) compared to 1.27% in 1-4 family residential net charge-offs reported for the industry by the FDIC in the third quarter 2008. |
• | WSFS had no credit card loans, and limited other unsecured credit totaling $12.1 million. |
Loan quality
As previously discussed, the Company recorded a provision for loan losses of $14.7 million ($14.9 million including letter of credit contingencies) in the fourth quarter of 2008, compared to $2.4 million in the fourth quarter of 2007 and $3.5 million in the third quarter of 2008. The ratio of the allowance for loan losses to total loans was 1.26% at December 31, 2008, an increase from 1.20% at September 30, 2008 and 1.12% at December 31, 2007.
| 7 WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
Nonperforming assets were $35.8 million at December 31, 2008 compared to $36.6 million at September 30, 2008 and $31.8 million at December 31, 2007. Nonperforming assets as a percentage of total assets was 1.04% at December 31, 2008 compared to 1.12% at September 30, 2008 and 0.99% at December 31, 2007.
Annualized net charge-offs in the fourth quarter of 2008 were 1.97% of average loans compared to 0.57% for the third quarter of 2008 and 1.06% for the fourth quarter of 2007. On a year-to-date basis, net charge-offs for 2008 were 0.74% compared to 0.34% for 2007.
Investments
At December 31, 2008, WSFS’ total securities portfolio had a carrying value of $547.9 million. The Company’s strategy has been to avoid credit risk in our securities portfolio. Therefore, securities purchases have been limited to AAA-rated securities, except for $12.4 million in BBB+ rated MBS purchased in conjunction with a 2002 reverse mortgage securitization.
The portfolio is comprised of:
• | WSFS owns no CDOs, Bank Trust Preferred, Agency Preferred securities or equity securities in other FDIC insured banks or thrifts. |
• | $44.6 million in Federal Agency debt securities with a maturity of four years or less. |
• | $194.7 million in “plain vanilla” Agency MBS. Of these, $103.4 million were sequential pay CMOs with no contingent cash flows and $91.3 million were Agency MBS with 10-15 year original final maturities. |
| 8 WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
• | $292.7 million in Non-Agency MBS. The quality of this portfolio is evidenced by: |
| o | Diversification among more than 75 different pools. |
| o | Significant seasoning, with 85% of underlying loans originated in 2005 or earlier, and 15% originated in 2006. |
| o | Heavy continuing principal amortization, as more than 95% of these bonds were originally 15-year pass-through cash flows. |
| o | Strong fundamental characteristics, with an average LTV of 42% and the average FICO score is well above 700. Only 11% of the collateral was classified as Alt-A loans and none were classified as sub-prime. |
| o | Only four of the 75 bonds, with a market value of $11.3 million, have been downgraded. Management believes, based on stress tests of these four bonds using proprietary models of two independent companies, the collection of the contractual principal and interest is probable and therefore the unrealized losses are considered to be temporary. |
Customer deposits increased 15% or $227.9 million from December 31, 2007
Total customer deposits (core deposits and customer time deposits) were $1.7 billion at December 31, 2008, and increased a strong $227.9 million, or 15%, over balances at December 31, 2007. The growth in deposits included an increase in demand accounts and customer time deposits, enhanced by $95.3 million in deposit accounts acquired in the previously mentioned October 2008 branch purchase. Without the purchase, total customer deposits still increased a strong $132.6 million, or 9%.
| 9 WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
Furthermore, customer deposits increased $173.4 million, or 11% (45% annualized) over levels reported for September 30, 2008. Consistent with the year-over-year increase, the linked quarter increase in deposits was mainly due to increased demand accounts and customer time deposits. Adjusted for the branch purchase, total customer deposits increased $78.1 million, or a strong 5% (20% annualized).
The following table summarizes current customer deposit balances and composition compared to prior periods.
|
| At |
|
|
| At |
|
|
| At |
| |||||||||||||||
(Dollars in thousands) |
| Dec. 31, 2008 |
|
|
| Sep. 30, 2008 |
|
|
| Dec. 31, 2007 |
| |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Nonintereest-demand |
| $ | 311,322 |
|
|
| 18 | % |
|
| $ | 294,648 |
|
|
| 19 | % |
|
| $ | 290,424 |
|
|
| 20 | % |
Interest-bearing demand |
|
| 214,749 |
|
|
| 13 |
|
|
|
| 184,566 |
|
|
| 12 |
|
|
|
| 171,363 |
|
|
| 12 |
|
Savings |
|
| 208,368 |
|
|
| 12 |
|
|
|
| 192,515 |
|
|
| 13 |
|
|
|
| 196,571 |
|
|
| 13 |
|
Money market |
|
| 326,792 |
|
|
| 19 |
|
|
|
| 286,020 |
|
|
| 19 |
|
|
|
| 303,931 |
|
|
| 20 |
|
Total core deposits |
|
| 1,061,231 |
|
|
| 62 |
|
|
|
| 957,749 |
|
|
| 63 |
|
|
|
| 962,289 |
|
|
| 65 |
|
Customer time |
|
| 645,902 |
|
|
| 38 |
|
|
|
| 576,011 |
|
|
| 37 |
|
|
|
| 516,908 |
|
|
| 35 |
|
Total customer deposits |
| $ | 1,707,133 |
|
|
| 100 | % |
|
| $ | 1,533,760 |
|
|
| 100 | % |
|
| $ | 1,479,197 |
|
|
| 100 | % |
Noninterest income
During the fourth quarter of 2008, the Company recorded noninterest income of $10.1 million, compared to $13.0 million in the fourth quarter of 2007. In the fourth quarter 2008, WSFS recorded a $1.4 million charge related to the aforementioned mark-to-market adjustment on the $12.4 million BBB+ rated MBS. Also contributing to the year-over-year decrease was a $1.0 million reduction in credit/debit card and ATM income, the result of reduced ATM bailment fees, which are linked to the prime rate, from Cash Connect, a division of WSFS Bank.
| 10 WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
While noninterest income comparisons were negatively impacted by these lower bailment fees, this business and the Bank’s net interest margin continued to benefit from lower funding costs for these bailments. In addition, income from Bank Owned Life Insurance (BOLI) decreased $419,000 mainly due to lower yields on underlying investments funding this program. Partially offsetting theses decreases, noninterest income was enhanced by $449,000 in fees from 1st Reverse Financial Services, LLC (1st Reverse), a reverse mortgage subsidiary of WSFS acquired in 2008 (discussed later).
The fourth quarter of 2007 included a $1.1 million non-recurring gain related to the sale of the former headquarters building of WSFS. Excluding revenues from Cash Connect, the $1.4 million mark-to-market adjustment and the gain related to the sale of the Company’s former headquarters, noninterest income increased $670,000, or 8%, from the fourth quarter of 2007.
Noninterest income decreased $1.6 million in comparison to the third quarter of 2008 mainly due to the $1.4 million charge related to the mark-to-market adjustment on the BBB+ rated MBS. Loan fee income increased $411,000 mainly due to $273,000 in increased fees from 1st Reverse.
Noninterest expense
Noninterest expenses for the fourth quarter of 2008 totaled $24.0 million, which was $1.7 million, or 7%, greater than the fourth quarter of 2007. This increase includes $1.3 million of expenses related to 1st Reverse.
| 11 WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
Excluding the expenses related to 1st Reverse, expenses increased only $373,000, or 2% over the fourth quarter of 2007. Further, during the fourth quarter of 2008, WSFS recorded $700,000 in additional write-downs of assets acquired through foreclosure (REO), resulting from updated appraisals and revised estimates of the net realizable values for these properties. Also during the fourth quarter of 2008, WSFS recorded $328,000 of transaction and transition expenses related to the previously mentioned branch purchase.
Noninterest expenses increased $947,000, or 4%, from the third quarter of 2008. Excluding $308,000 of increased expenses related to 1st Reverse, expenses increased only $639,000, or 3% over the third quarter of 2008. This increase was mainly due to the increased REO write-downs and expenses related to the branch acquisition, consistent with the previously mentioned year-over-year analysis.
Subsidiary discussion
In April 2008, WSFS acquired a majority stake in 1st Reverse Financial Services, LLC. (1st Reverse), a reverse mortgage company, with a total investment of $3.4 million. During the fourth quarter 1st Reverse reported a pre-tax loss of $832,000, compared to a pre-tax loss of $795,000 for the third quarter. The year-to-date pre-tax loss for 2008 was $1.9 million which has significantly reduced our investment. 1st Reverse recorded $449,000 in fee income during the fourth quarter, an increase of $273,000, over the third quarter of 2008. Expenses were $1.3 million during the fourth quarter and increased $308,000 over the third quarter of 2008.
| 12 WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
Since the acquisition in April, the business plan for 1st Reverse has been negatively impacted by regulatory changes and changes to the mortgage market in general. In response, 1st Reverse has modified its business plan to rely more heavily on retail loan originations and implemented significant cost reductions. As of January 2009, 1st Reverse has further restructured its operations, significantly reducing fixed expenses and lowering expected breakeven origination volumes.
WSFS completed its impairment testing for goodwill related to the acquisition of its majority interest in 1st Reverse. Despite the negative results from 1st Reverse’s operations, the goodwill impairment test dictated by FASB Statement No. 142 resulted in no impairment at this time.
WSFS and the management of 1st Reverse continue to proactively manage and make adjustments to the start-up’s business model due to the difficult economic environment. Management will make further adjustments to the business, as necessary.
Income taxes
The Company recorded a $2.6 million income tax benefit (44.3% effective tax rate) in the fourth quarter of 2008 versus a $1.5 million tax provision in the fourth quarter of 2007 (17.0% effective tax rate) and $3.0 million in the third quarter of 2008 (34.9% effective tax rate). Volatility in effective tax rates from quarter to quarter is expected.
| 13 WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
Capital
The Company’s capital grew by $5.3 million over December 31, 2007 levels. All capital levels are in excess of “well-capitalized” regulatory benchmarks, the regulators’ highest capital rating. The Bank’s Tier 1 capital ratio was 9.92%, significantly above the 6.00% level required to be considered “well-capitalized” under regulatory definitions. The ratio of tangible equity to assets was 5.88% at December 31, 2008 compared to 6.73% at September 30, 2008 primarily as a result of the quarterly loss and the branch acquisition. Tangible book value per share decreased to $32.62 at December 31, 2008 from $35.43 at September 30, 2008 and $33.78 at December 31, 2007.
Also, on January 23, 2009 the Company completed the sale of its senior preferred stock totaling approximately $52.6 million to the U.S. Department of the Treasury under its Capital Purchase Program (CPP). On a pro-forma basis this additional capital would have raised the Company’s Tier 1 capital ratio from 9.92% to approximately 11.82%, at December 31, 2008.
WSFS Board of Directors maintains its quarterly cash dividend of $0.12 per share
The Board of Directors declared a quarterly cash dividend of $0.12 per share. WSFS is able to maintain its dividend which represents a 20% increase from the fourth quarter of 2007. This dividend will be paid on February 27, 2009, to shareholders of record as of February 13, 2009.
| 14 WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
WSFS Financial Corporation is a $3.4 billion financial services company. Its primary subsidiary, Wilmington Savings Fund Society, FSB (WSFS Bank), operates 35 retail banking offices located in Delaware and Pennsylvania, as well as three loan production offices in Dover, Delaware; Blue Bell, Pennsylvania and Annandale, Virginia. WSFS Bank provides comprehensive financial services including personal trust and wealth management. Other subsidiaries include WSFS Investment Group, Inc., Montchanin Capital Management, Inc. and 1st Reverse Financial Services, LLC. 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 www.wsfsbank.com.
| * * * |
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, which are based on various assumptions (some of which may be beyond the Company’s control) are subject to risks and uncertainties and other factors which could cause actual results to differ materially from those currently anticipated. Such risks and uncertainties include, but are not limited to, those related to the economic environment, particularly in the market areas in which the Company operate;, the volatility of the financial and securities markets, including changes with respect to the market value of our financial assets;, changes in government regulation affecting financial institutions and potential expenses associated therewith; changes resulting from our participation in the CPP including additional conditions that may be imposed in the future on participating companies; and the costs associated with resolving any problem loans and other risks and uncertainties, 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.
# # #
| 15 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, |
| |||||
| 2008 |
| 2008 |
| 2007 |
| 2008 |
| 2007 |
| |||||
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on loans | $ | 33,832 |
| $ | 34,683 |
| $ | 40,911 |
| $ | 140,661 |
| $ | 159,512 |
|
Interest on mortgage-backed securities |
| 6,377 |
|
| 5,904 |
|
| 6,200 |
|
| 23,984 |
|
| 24,237 |
|
Interest and dividends on investment securities |
| (662 | ) |
| 376 |
|
| 466 |
|
| 254 |
|
| 3,360 |
|
Other interest income |
| 238 |
|
| 374 |
|
| 566 |
|
| 1,578 |
|
| 2,368 |
|
|
| 39,785 |
|
| 41,337 |
|
| 48,143 |
|
| 166,477 |
|
| 189,477 |
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on deposits |
| 9,521 |
|
| 8,936 |
|
| 13,558 |
|
| 39,809 |
|
| 57,311 |
|
Interest on Federal Home Loan Bank advances |
| 6,061 |
|
| 7,235 |
|
| 10,821 |
|
| 29,620 |
|
| 38,561 |
|
Interest on trust preferred borrowings |
| 727 |
|
| 747 |
|
| 1,198 |
|
| 3,275 |
|
| 4,753 |
|
Interest on other borrowings |
| 900 |
|
| 1,112 |
|
| 1,856 |
|
| 4,554 |
|
| 6,843 |
|
|
| 17,209 |
|
| 18,030 |
|
| 27,433 |
|
| 77,258 |
|
| 107,468 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
| 22,576 |
|
| 23,307 |
|
| 20,710 |
|
| 89,219 |
|
| 82,009 |
|
Provision for loan losses |
| 14,699 |
|
| 3,502 |
|
| 2,376 |
|
| 23,024 |
|
| 5,021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income after provision for loan losses |
| 7,877 |
|
| 19,805 |
|
| 18,334 |
|
| 66,195 |
|
| 76,988 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit/debit card and ATM income |
| 3,968 |
|
| 4,416 |
|
| 4,988 |
|
| 17,229 |
|
| 19,750 |
|
Deposit service charges |
| 4,158 |
|
| 4,354 |
|
| 4,026 |
|
| 16,484 |
|
| 15,419 |
|
Investment advisory income |
| 557 |
|
| 593 |
|
| 670 |
|
| 2,395 |
|
| 2,465 |
|
Loan fee income |
| 1,230 |
|
| 819 |
|
| 627 |
|
| 3,696 |
|
| 2,384 |
|
Bank owned life insurance income |
| 208 |
|
| 548 |
|
| 627 |
|
| 1,786 |
|
| 2,269 |
|
Mortgage banking activities, net |
| (116 | ) |
| 66 |
|
| (1 | ) |
| 148 |
|
| 217 |
|
Securities (losses) gains |
| (976 | ) |
| (5 | ) |
| 82 |
|
| 139 |
|
| 82 |
|
Non-recurring gains, net |
| — |
|
| — |
|
| 1,097 |
|
| — |
|
| 1,979 |
|
Other income |
| 1,099 |
|
| 893 |
|
| 892 |
|
| 4,112 |
|
| 3,601 |
|
|
| 10,128 |
|
| 11,684 |
|
| 13,008 |
|
| 45,989 |
|
| 48,166 |
|
Noninterest expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries, benefits and other compensation |
| 11,659 |
|
| 12,211 |
|
| 11,214 |
|
| 46,654 |
|
| 43,662 |
|
Occupancy expense |
| 2,128 |
|
| 2,118 |
|
| 2,078 |
|
| 8,416 |
|
| 8,280 |
|
Equipment expense |
| 1,603 |
|
| 1,575 |
|
| 1,428 |
|
| 6,174 |
|
| 5,616 |
|
Data processing and operations expense |
| 1,001 |
|
| 1,095 |
|
| 1,084 |
|
| 4,216 |
|
| 4,062 |
|
Marketing expense |
| 900 |
|
| 952 |
|
| 1,019 |
|
| 3,920 |
|
| 3,911 |
|
Professional fees |
| 1,473 |
|
| 1,037 |
|
| 709 |
|
| 4,082 |
|
| 2,662 |
|
Other operating expenses |
| 5,205 |
|
| 4,034 |
|
| 4,781 |
|
| 15,636 |
|
| 13,838 |
|
|
| 23,969 |
|
| 23,022 |
|
| 22,313 |
|
| 89,098 |
|
| 82,031 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) Income before taxes |
| (5,964 | ) |
| 8,467 |
|
| 9,029 |
|
| 23,086 |
|
| 43,123 |
|
Income tax (benefit) provision |
| (2,644 | ) |
| 2,957 |
|
| 1,533 |
|
| 6,950 |
|
| 13,474 |
|
Net (loss) income | $ | (3,320 | ) | $ | 5,510 |
| $ | 7,496 |
| $ | 16,136 |
| $ | 29,649 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income | $ | (0.54 | ) | $ | 0.88 |
| $ | 1.18 |
| $ | 2.57 |
| $ | 4.55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding for diluted EPS |
| 6,174,985 |
|
| 6,290,130 |
|
| 6,356,779 |
|
| 6,289,896 |
|
| 6,509,709 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets (a) |
| (0.40 | ) |
| 0.69 |
|
| 0.95 |
|
| 0.50 |
|
| 0.98 |
|
Return on average equity (a) |
| (5.93 | ) |
| 9.95 |
|
| 14.35 |
|
| 7.30 |
|
| 14.34 |
|
Net interest margin (a)(b) |
| 3.07 |
|
| 3.28 |
|
| 2.99 |
|
| 3.13 |
|
| 3.09 |
|
Efficiency ratio (c) |
| 72.67 |
|
| 65.28 |
|
| 65.63 |
|
| 65.36 |
|
| 62.48 |
|
Noninterest income as a percentage of total revenue (b) |
| 30.71 |
|
| 33.13 |
|
| 38.26 |
|
| 33.74 |
|
| 36.69 |
|
See “Notes”
| 16 WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS
SUMMARY STATEMENT OF CONDITION
(Dollars in thousands)
(Unaudited)
| December 31, |
| September 30, |
| December 31, |
| |||
| 2008 |
| 2008 |
| 2007 |
| |||
Assets: |
|
|
|
|
|
|
|
|
|
Cash and due from banks | $ | 58,377 |
| $ | 61,410 |
| $ | 83,936 |
|
Cash in non-owned ATMs |
| 189,965 |
|
| 159,824 |
|
| 182,523 |
|
Investment securities (d)(e) |
| 49,688 |
|
| 36,647 |
|
| 28,272 |
|
Other investments |
| 39,521 |
|
| 41,746 |
|
| 46,615 |
|
Mortgage-backed securities (d) |
| 498,205 |
|
| 488,716 |
|
| 496,792 |
|
Net loans (f)(g)(n) |
| 2,443,835 |
|
| 2,330,230 |
|
| 2,233,980 |
|
Bank owned life insurance |
| 59,337 |
|
| 59,129 |
|
| 57,551 |
|
Other assets |
| 93,632 |
|
| 77,139 |
|
| 70,519 |
|
Total assets | $ | 3,432,560 |
| $ | 3,254,841 |
| $ | 3,200,188 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity: |
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits | $ | 311,322 |
| $ | 294,648 |
| $ | 290,424 |
|
Interest-bearing deposits |
| 1,395,811 |
|
| 1,239,112 |
|
| 1,188,773 |
|
Total customer deposits |
| 1,707,133 |
|
| 1,533,760 |
|
| 1,479,197 |
|
Other jumbo CDs |
| 103,825 |
|
| 101,203 |
|
| 98,758 |
|
Brokered deposits |
| 311,394 |
|
| 338,494 |
|
| 249,206 |
|
Total deposits |
| 2,122,352 |
|
| 1,973,457 |
|
| 1,827,161 |
|
|
|
|
|
|
|
|
|
|
|
Federal Home Loan Bank advances |
| 815,957 |
|
| 755,628 |
|
| 898,280 |
|
Other borrowings |
| 250,788 |
|
| 269,567 |
|
| 236,880 |
|
Other liabilities |
| 26,828 |
|
| 32,906 |
|
| 26,537 |
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
| 3,215,925 |
|
| 3,031,558 |
|
| 2,988,858 |
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity |
| 216,635 |
|
| 223,283 |
|
| 211,330 |
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity | $ | 3,432,560 |
| $ | 3,254,841 |
| $ | 3,200,188 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Ratios: |
|
|
|
|
|
|
|
|
|
Equity to asset ratio |
| 6.31 | % |
| 6.86 | % |
| 6.60 | % |
Tangible equity to asset ratio |
| 5.88 |
|
| 6.74 |
|
| 6.52 |
|
Core capital (h) (required: 4.00%; well-capitalized: 5.00%) |
| 8.00 |
|
| 8.85 |
|
| 8.63 |
|
Tier 1 capital (h) (required: 4.00%; well-capitalized: 6.00%) |
| 9.92 |
|
| 10.97 |
|
| 11.16 |
|
Risk-based capital (h) (required: 8.00%; well-capitalized: 10.00%) |
| 11.02 |
|
| 11.93 |
|
| 12.31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality Indicators: |
|
|
|
|
|
|
|
|
|
Nonperforming Assets: |
|
|
|
|
|
|
|
|
|
Nonaccruing loans | $ | 28,434 |
| $ | 31,368 |
| $ | 31,106 |
|
Troubled debt restructuring |
| 2,855 |
|
| 1,432 |
|
| — |
|
Assets acquired through foreclosure |
| 4,471 |
|
| 3,780 |
|
| 703 |
|
Total nonperforming assets | $ | 35,760 |
| $ | 36,580 |
| $ | 31,809 |
|
|
|
|
|
|
|
|
|
|
|
Past due loans (i) | $ | 1,339 |
| $ | 1,655 |
| $ | 575 |
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses | $ | 31,189 |
| $ | 28,358 |
| $ | 25,252 |
|
|
|
|
|
|
|
|
|
|
|
Ratio of nonperforming assets to total assets |
| 1.04 | % |
| 1.12 | % |
| 0.99 | % |
Ratio of allowance for loan losses to total gross loans (j) |
| 1.26 |
|
| 1.20 |
|
| 1.12 |
|
Ratio of allowance for loan losses to nonaccruing loans (k) |
| 108 |
|
| 82 |
|
| 79 |
|
Ratio of quarterly net charge-offs |
|
|
|
|
|
|
|
|
|
to average gross loans (a)(f) |
| 1.97 |
|
| 0.57 |
|
| 1.06 |
|
Ratio of year-to-date net charge-offs |
|
|
|
|
|
|
|
|
|
to average gross loans (a)(f) |
| 0.74 |
|
| 0.30 |
|
| 0.34 |
|
|
|
|
|
|
|
|
|
|
|
See “Notes”
| 17 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, 2008 |
| September 30, 2008 |
| December 31, 2007 |
| ||||||||||||||||||
|
|
|
|
| Yield/ |
|
|
|
|
| Yield/ |
|
|
|
|
| Yield/ |
| ||||||
| Average |
| Interest & |
| Rate |
| Average |
| Interest & |
| Rate |
| Average |
| Interest & |
| Rate |
| ||||||
| Balance |
| Dividends |
| (a)(b) |
| Balance |
| Dividends |
| (a)(b) |
| Balance |
| Dividends |
| (a)(b) |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans: (f) (l) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate loans | $ | 787,935 |
| $ | 10,802 |
| 5.48 | % | $ | 765,596 |
| $ | 11,202 |
| 5.85 | % | $ | 732,075 |
| $ | 14,272 |
| 7.80 | % |
Residential real estate loans (n) |
| 429,200 |
|
| 6,241 |
| 5.82 |
|
| 435,983 |
|
| 6,453 |
| 5.92 |
|
| 449,181 |
|
| 6,633 |
| 5.91 |
|
Commercial loans |
| 899,809 |
|
| 12,503 |
| 5.56 |
|
| 843,687 |
|
| 12,635 |
| 5.99 |
|
| 776,442 |
|
| 14,995 |
| 7.70 |
|
Consumer loans |
| 293,331 |
|
| 4,286 |
| 5.81 |
|
| 284,215 |
|
| 4,393 |
| 6.15 |
|
| 274,238 |
|
| 5,011 |
| 7.25 |
|
Total loans (n) |
| 2,410,275 |
|
| 33,832 |
| 5.66 |
|
| 2,239,481 |
|
| 34,683 |
| 6.00 |
|
| 2,231,936 |
|
| 40,911 |
| 7.38 |
|
Mortgage-backed securities (d) |
| 491,893 |
|
| 6,377 |
| 5.19 |
|
| 469,368 |
|
| 5,904 |
| 5.03 |
|
| 500,417 |
|
| 6,200 |
| 4.96 |
|
Investment securities (d)(e) |
| 41,158 |
|
| (662 | ) | (6.43 | ) |
| 34,410 |
|
| 376 |
| 4.37 |
|
| 27,886 |
|
| 466 |
| 6.68 |
|
Other interest-earning assets |
| 38,997 |
|
| 238 |
| 2.43 |
|
| 44,639 |
|
| 374 |
| 3.33 |
|
| 45,492 |
|
| 566 |
| 4.94 |
|
Total interest-earning assets |
| 2,982,323 |
|
| 39,785 |
| 5.37 |
|
| 2,877,898 |
|
| 41,337 |
| 5.78 |
|
| 2,805,731 |
|
| 48,143 |
| 6.90 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses |
| (28,078 | ) |
|
|
|
|
|
| (28,246 | ) |
|
|
|
|
|
| (28,754 | ) |
|
|
|
|
|
Cash and due from banks |
| 57,654 |
|
|
|
|
|
|
| 65,650 |
|
|
|
|
|
|
| 68,510 |
|
|
|
|
|
|
Cash in non-owned ATMs |
| 167,139 |
|
|
|
|
|
|
| 176,441 |
|
|
|
|
|
|
| 172,843 |
|
|
|
|
|
|
Bank owned life insurance |
| 59,199 |
|
|
|
|
|
|
| 58,769 |
|
|
|
|
|
|
| 57,127 |
|
|
|
|
|
|
Other noninterest-earning assets |
| 85,414 |
|
|
|
|
|
|
| 63,647 |
|
|
|
|
|
|
| 67,281 |
|
|
|
|
|
|
Total assets | $ | 3,323,651 |
|
|
|
|
|
| $ | 3,214,159 |
|
|
|
|
|
| $ | 3,142,738 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand | $ | 193,699 |
| $ | 316 |
| 0.65 |
| $ | 172,650 |
| $ | 238 |
| 0.55 |
| $ | 154,389 |
| $ | 400 |
| 1.03 |
|
Money market |
| 308,696 |
|
| 1,404 |
| 1.81 |
|
| 290,027 |
|
| 1,176 |
| 1.61 |
|
| 309,807 |
|
| 2,723 |
| 3.49 |
|
Savings |
| 202,808 |
|
| 190 |
| 0.37 |
|
| 195,758 |
|
| 150 |
| 0.30 |
|
| 200,220 |
|
| 359 |
| 0.71 |
|
Customer time deposits |
| 622,668 |
|
| 5,599 |
| 3.58 |
|
| 521,807 |
|
| 4,490 |
| 3.42 |
|
| 499,061 |
|
| 5,939 |
| 4.72 |
|
Total interest-bearing customer deposits |
| 1,327,871 |
|
| 7,509 |
| 2.25 |
|
| 1,180,242 |
|
| 6,054 |
| 2.04 |
|
| 1,163,477 |
|
| 9,421 |
| 3.21 |
|
Other jumbo certificates of deposit |
| 100,430 |
|
| 775 |
| 3.07 |
|
| 91,682 |
|
| 671 |
| 2.91 |
|
| 97,442 |
|
| 1,242 |
| 5.06 |
|
Brokered deposits |
| 283,125 |
|
| 1,237 |
| 1.74 |
|
| 316,049 |
|
| 2,211 |
| 2.78 |
|
| 227,372 |
|
| 2,895 |
| 5.05 |
|
Total interest-bearing deposits |
| 1,711,426 |
|
| 9,521 |
| 2.21 |
|
| 1,587,973 |
|
| 8,936 |
| 2.24 |
|
| 1,488,291 |
|
| 13,558 |
| 3.61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FHLB of Pittsburgh advances |
| 786,632 |
|
| 6,061 |
| 3.02 |
|
| 823,750 |
|
| 7,235 |
| 3.44 |
|
| 904,608 |
|
| 10,821 |
| 4.68 |
|
Trust preferred borrowings |
| 67,011 |
|
| 727 |
| 4.25 |
|
| 67,011 |
|
| 747 |
| 4.36 |
|
| 67,011 |
|
| 1,198 |
| 7.00 |
|
Other borrowed funds |
| 200,053 |
|
| 900 |
| 1.80 |
|
| 194,929 |
|
| 1,112 |
| 2.28 |
|
| 168,553 |
|
| 1,856 |
| 4.40 |
|
Total interest-bearing liabilities |
| 2,765,122 |
|
| 17,209 |
| 2.49 |
|
| 2,673,663 |
|
| 18,030 |
| 2.70 |
|
| 2,628,463 |
|
| 27,433 |
| 4.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing demand deposits |
| 298,613 |
|
|
|
|
|
|
| 286,128 |
|
|
|
|
|
|
| 272,091 |
|
|
|
|
|
|
Other noninterest-bearing liabilities |
| 35,803 |
|
|
|
|
|
|
| 32,893 |
|
|
|
|
|
|
| 33,221 |
|
|
|
|
|
|
Minority interest |
| — |
|
|
|
|
|
|
| — |
|
|
|
|
|
|
| 33 |
|
|
|
|
|
|
Stockholders' equity |
| 224,113 |
|
|
|
|
|
|
| 221,475 |
|
|
|
|
|
|
| 208,930 |
|
|
|
|
|
|
Total liabilities and stockholders' equity | $ | 3,323,651 |
|
|
|
|
|
| $ | 3,214,159 |
|
|
|
|
|
| $ | 3,142,738 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excess of interest-earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
over interest-bearing liabilities | $ | 217,201 |
|
|
|
|
|
| $ | 204,235 |
|
|
|
|
|
| $ | 177,268 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest and dividend income |
|
|
| $ | 22,576 |
|
|
|
|
|
| $ | 23,307 |
|
|
|
|
|
| $ | 20,710 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread |
|
|
|
|
|
| 2.88 | % |
|
|
|
|
|
| 3.08 | % |
|
|
|
|
|
| 2.73 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin |
|
|
|
|
|
| 3.07 | % |
|
|
|
|
|
| 3.28 | % |
|
|
|
|
|
| 2.99 | % |
See “Notes”
| 18 WSFS Bank Center 500 Delaware Avenue, Wilmington, Delaware 19801 |
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
(Dollars in thousands)
(Unaudited)
| December 31, |
| September 30, |
| December 31, |
| December 31, |
| December 31, | |||||
| 2008 |
| 2008 |
| 2007 |
| 2008 |
| 2007 | |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market price of common stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High | $ | 57.71 |
| $ | 62.44 |
| $ | 67.97 |
| $ | 62.44 |
| $ | 70.69 |
Low |
| 38.54 |
|
| 41.54 |
|
| 49.87 |
|
| 38.54 |
|
| 49.87 |
Close |
| 47.99 |
|
| 60.00 |
|
| 50.20 |
|
| 47.99 |
|
| 50.20 |
Book value per share |
| 35.17 |
|
| 36.15 |
|
| 34.27 |
|
|
|
|
|
|
Tangible book value per share |
| 32.62 |
|
| 35.43 |
|
| 33.78 |
|
|
|
|
|
|
Number of shares outstanding (000s) |
| 6,159 |
|
| 6,180 |
|
| 6,167 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-year repricing gap to total assets (m) |
| 0.33 | % |
| (0.85 | )% |
| (3.72 | )% |
|
|
|
|
|
Weighted average duration of the MBS portfolio |
| 2.9 years |
|
| 2.9 years |
|
| 2.8 years |
|
|
|
|
|
|
Unrealized losses on securities available-for-sale, net of taxes | $ | (12,158 | ) | $ | (9,425 | ) | $ | (3,405 | ) |
|
|
|
|
|
Number of associates (FTEs) |
| 633 |
|
| 605 |
|
| 599 |
|
|
|
|
|
|
Number of branch offices |
| 35 |
|
| 31 |
|
| 29 |
|
|
|
|
|
|
Number of WSFS owned ATMs |
| 301 |
|
| 313 |
|
| 325 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (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. |