Pittsburgh, PA -- WVS Financial Corp. (NASDAQ: WVFC), the holding company for West View Savings Bank, today reported net income of $608,000 or $0.25 per diluted share, for the three months ended September 30, 2005 as compared to net income of $834,000 or $0.34 per diluted share for the same period in 2004. The $226,000 decrease in net income during the quarter was primarily attributable to a $223,000 decrease in net interest income, a $201,000 decrease in non-interest income and an $11,000 increase in non-interest expense, which were partially offset by a $144,000 decrease in provision for loan losses and a $65,000 decrease in income tax expense. The decrease in net interest income resulted from a $138,000 decrease in accreted investment security discounts and premiums, lower levels of tax-exempt income in proportion to total interest income, higher short-term market interest rates attributable to the Federal Reserve Board’s increases to the federal funds rates and the pronounced flattening of the Treasury yield curve. The decrease in non-interest income was primarily attributable to $207,000 decrease in pre-tax gains recognized on the sale of securities from the Company’s investment portfolio in the three months ended September 30, 2005, when compared to the same period in 2004. During the quarter ended September 30, 2005, the Company reallocated a portion of its allowance for loan and lease losses attributable to off-balance sheet liabilities (builder letters of credit) to a separate allowance account for financial reporting purposes. The provision for loan losses was reduced, and non-interest expense was increased, by $35,000 in connection with this reallocation of allowances. The increase in non-interest expense was primarily attributable to a provision for loss on off-balance sheet liabilities and other operations costs which were partially offset by a decrease in employee related costs. The decrease in provision for loan losses was primarily attributable to a $66,000 credit provision for loan losses in the quarter ended September 30, 2005 as opposed to a $78,000 provision taken in the quarter ended September 30, 2004. The $66,000 credit provision during the quarter ended September 30, 2005 was primarily attributable to the $ 35,000 allowance reallocation discussed above and a $23,000
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reduction due to the payoff of one non-accrual loan. The decrease in income tax expense was primarily a result of decreased levels of taxable income.
During the quarter ended September 30, 2005 the Company successfully completed its Seventh Stock Repurchase Program totaling 125,000 shares. The Company also announced its Eighth Stock Repurchase Program also totaling 125,000 shares.
President and Chief Executive Officer David J. Bursic commented: “Since September 2004, the Federal Reserve has increased its targeted federal funds rate from 1.75% to 3.75% at September 30, 2005. During the same period 10-Year Treasury yield have increased from 4.14% to 4.34%. This yield curve flattening has caused industry and Company net interest margins to compress. The Company’s 8.45% return on equity, 4% dividend yield and Eighth Stock Buyback Program are tangible signs of the Company’s on-going commitment to enhance stockholder value.”
WVS Financial Corp. owns 100% of the outstanding common stock of West View Savings Bank. The Savings Bank is a Pennsylvania-chartered, FDIC savings bank, which conducts business from six offices located in the North Hills suburbs of Pittsburgh, Pennsylvania.
