[LOGO] WSFS Financial
Corporation 838 Market Street, Wilmington, Delaware 19801
PRESS RELEASE
FOR IMMEDIATE RELEASE
Contact: Mark A. Turner
October 19, 2004 (302) 571-7160
WSFS ANNOUNCES 33% growth in 3Q '04 ePS to $0.88
WSFS Financial Corporation (NASDAQ/NMS: WSFS), the parent company of
Wilmington Savings Fund Society, FSB, reported quarterly net income of $6.6
million, or $0.88 per diluted share. This compares to net income of $5.3
million, or $0.66 per diluted share, for the third quarter of 2003. This $0.22
growth in earnings per share is a 33% increase over the same period in 2003.
Additional highlights for the third quarter of 2004 include: (i) growth
in net loans of $70.5 million, or 5% over June 30, 2004, and $215.6 million, or
17%, over September 30, 2003, primarily concentrated in commercial and
commercial real estate loans; (ii) continued very strong asset quality, with
annualized net charge-offs to total loans of just 2 basis points, and the ratio
of nonperforming assets (NPA) to total assets of 19 basis points at September
30, 2004; and (iii) an increase in core retail deposits of $17.7 million, or 3%,
included in an increase in total retail deposits of $40.9 million, or 4% over
balances at June 30, 2004.
The following is a brief discussion of the third quarter 2004 results.
Net Interest Income
Net interest income for the third quarter of 2004 was $17.1 million.
This compares to the $13.4 million reported for the same quarter in 2003 and the
$15.6 million reported for the second quarter of 2004. The net interest margin
percentage was 3.26% for the third quarter of 2004
(More)
[LOGO] WSFS Financial
Corporation 838 Market Street, Wilmington, Delaware 19801
compared to 3.07% in the second quarter of 2004. During the third quarter, the
net interest margin was positively impacted by, among other things, generally
higher rates on loans, as overall portfolio yields have begun to trend up due to
higher prevailing rates and the Bank's robust growth in variable rate loans in
recent periods. Also, the gross yield on the Bank's mortgage-backed securities
("MBS") portfolio was 4.20% in the third quarter of 2004 compared to 3.67% in
the second quarter of 2004. The higher yield on MBS in the third quarter of 2004
was the result of generally higher interest rates and lower amortization of
premiums resulting from fewer prepayments. The weighted average duration of the
MBS portfolio was 2.8 years at September 30, 2004 compared to 3.1 years at June
30, 2004.
Loans and Asset Quality
Net loans grew $70.5 million, or 5%, during the third quarter of 2004
to $1.5 billion at September 30, 2004. Net loans grew 17% over this time last
year. Loan volume reflects the continued strong growth in commercial and
commercial real estate (CRE) loans which increased $69.0 million, or 9%, from
balances at June 30, 2004 and $209.8 million, or 33% from balances at September
30, 2003. The growth is primarily the continuing result of gaining market share
due to the addition of several seasoned local relationship managers over the
past few years. The table below summarizes the current loan balance and
composition compared to prior periods.
At At At
(Dollars in thousands) Sept. 30, 2004 June 30, 2004 Sept. 30, 2003
-------------- ------------- --------------
Amount % Amount % Amount %
------ ---- ------ ---- ------ ----
Commercial and CRE $ 842,013 57% $ 773,044 55% $ 632,213 50%
Residential 444,860 30 444,728 32 459,966 37
Consumer 210,893 15 208,591 15 188,245 15
Allowance for loan losses (24,052) (2) (23,139) (2) (22,293) (2)
----------- --- ----------- --- ----------- ---
Net Loans $ 1,473,714 100% $ 1,403,224 100% $ 1,258,131 100%
=========== =========== ===========
Non-performing assets (NPAs) totaled $4.5 million at September 30,
2004, an improvement from the $5.3 million reported at June 30, 2004 and the
$6.9 million reported at September 30, 2003. NPAs as a percentage of total
assets were 0.19% at September 30, 2004 compared to 0.22% at June 30, 2004 and
0.33% at September 30, 2003. Annualized net charge-offs in the third quarter of
2004 were 0.02% of average loans compared to 0.08% for the second
(More)
[LOGO] WSFS Financial
Corporation 838 Market Street, Wilmington, Delaware 19801
quarter of 2004, and 0.22% for the third quarter of 2003. The allowance for loan
losses was 1.61% of total loans at September 30, 2004, with a coverage ratio
(ratio of allowance to non-accruing loans) of 524%.
Deposits
Core deposit relationships (retail demand deposits, money market and
savings accounts) increased $17.7 million, or 3% during the quarter, and
increased $60.6 million, or 9% over this time last year. Retail time deposits
also increased $23.3 million, or 10%, during the quarter. As a result, total
retail deposits increased $40.9 million, or 4%, during the third quarter and
$64.6 million, or 7%, over last year to $955.5 million at September 30, 2004.
Core deposits continue to represent a healthy 74% of total retail deposits. The
following table summarizes the current retail deposit balances and composition
compared to prior periods.
At At At
(Dollars in thousands) Sept. 30, 2004 June 30, 2004 Sept. 30, 2003
-------------- ------------- --------------
Amount % Amount % Amount %
------ ---- ------ ---- ------ ----
Non-interest demand $ 229,999 24% $ 229,842 25% $ 202,647 23%
Savings 302,141 32 323,128 35 326,829 37
Money market and int. demand 174,547 18 136,042 15 116,626 13
--------- --- --------- --- --------- ---
Total core deposits 706,687 74% 689,012 75% 646,102 73%
Retail time 248,799 26 225,549 25 244,777 27
--------- --- --------- --- --------- ---
Total retail deposits $ 955,486 100% $ 914,561 100% $ 890,879 100%
========= ========= =========
Noninterest Income
During the third quarter of 2004, the Corporation recorded noninterest
income of $8.2 million, which was $1.6 million greater than third quarter of
2003. The increase was primarily due to increases of $779,000 in card and ATM
fee income during the quarter, primarily the result of underlying growth in
volumes, as well as income of $558,000 from the investment in Bank Owned Life
Insurance (BOLI) in January 2004 and $584,000 in fee income from Montchanin
Capital Management, Inc., the Company's wealth management initiative started in
the first quarter of 2004. These increases were partially offset by lower loan
fee income of $278,000 and lower gains on sale of loans and securities of
$303,000. These decreases resulted
(More)
[LOGO] WSFS Financial
Corporation 838 Market Street, Wilmington, Delaware 19801
primarily from generally higher interest rates and reduced refinancing activity
during the third quarter of 2004 as compared to the third quarter of 2003.
Noninterest Expenses
Total noninterest expenses for the three months ended September 30,
2004 were $14.2 million, and were $2.6 million, or 23% greater than the same
quarter last year (this compares to 27% growth in total revenue over the same
periods). Included in 2004 expenses were $477,000 in operating expenses from
Montchanin Capital Management, Inc., the Company's wealth management initiative
started in the first quarter of 2004, as well as additional operating expenses,
primarily in salaries and other expenses, resulting from the Company's branch
expansion and other growth efforts.
Capital Management
The Corporation repurchased no WSFS common stock during the third
quarter of 2004. Year-to-date, the Corporation repurchased 373,900 or 5% of its
shares of common stock at an average price of $48.15 per share. At September 30,
2004, shares remaining under the most recent authorization amounted to 701,564,
or approximately 10% of total shares outstanding of 7,035,534.
The ratio of tangible equity to assets was a strong 7.73% and tangible
book value per share was $26.76 at September 30, 2004.
Marvin N. Schoenhals, Chairman and President of WSFS said, "We are
pleased to report another quarter in which the Company's performance was strong.
The third quarter results reflect the success of our retail expansion and our
continued focus on business banking." Mr. Schoenhals went on to say, "We look
forward to the opening of our two newest offices serving the Middletown and
Camden, Delaware communities in November."
(More)
[LOGO] WSFS Financial
Corporation 838 Market Street, Wilmington, Delaware 19801
WSFS Financial Corporation is a $2.4 billion financial services
company. At September 30, 2004, its principal subsidiary, Wilmington Savings
Fund Society, FSB, operated 23 retail banking offices in all three counties in
Delaware, as well as Chester and Delaware Counties in Pennsylvania. Other
operating subsidiaries include WSFS Credit Corporation, WSFS Reit, Inc., WSFS
Investment Group, Inc. and Montchanin Capital Management, Inc. 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 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.
# # #
[LOGO] WSFS Financial
Corporation 838 Market Street, Wilmington, Delaware 19801
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS
STATEMENT OF OPERATIONS
(Dollars in thousands, except per share data)
(Unaudited)
Three months ended Nine months ended
-------------------------------------------- ---------------------------
September 30, June 30, September 30, September 30, September 30,
2004 2004 2003 2004 2003
------------- ---------- ------------ ------------- -------------
Interest income:
Interest and fees on loans $ 19,882 $ 18,222 $ 17,922 $ 56,204 $ 53,699
Interest on mortgage-backed securities 5,468 4,689 2,759 14,884 10,306
Interest and dividends on investment securities 1,090 1,219 284 3,438 713
Other interest income 161 152 212 519 836
------------- ---------- ------------ ------------- ------------
26,601 24,282 21,177 75,045 65,554
------------- ---------- ------------ ------------- ------------
Interest expense:
Interest on deposits 2,320 1,832 1,882 5,945 6,473
Interest on Federal Home Loan Bank advances 6,011 5,886 5,167 17,452 14,593
Interest on federal funds purchased and securities sold
under agreements to repurchase 561 413 175 1,374 540
Interest on trust preferred borrowings 551 503 489 1,550 1,478
Interest on other borrowings 38 40 65 116 253
------------- ---------- ------------ ------------- ------------
9,481 8,674 7,778 26,437 23,337
------------- ---------- ------------ ------------- ------------
Net interest income 17,120 15,608 13,399 48,608 42,217
Provision for loan losses 996 687 525 2,370 2,025
------------- ---------- ------------ ------------- ------------
Net interest income after provision for loan losses 16,124 14,921 12,874 46,238 40,192
------------- ---------- ------------ ------------- ------------
Noninterest income:
Credit/debit card and ATM income 3,277 2,976 2,498 8,917 7,200
Deposit service charges 2,315 2,366 2,392 7,016 6,666
Investment advisory income 584 549 - 1,671 -
Bank owned life insurance income 558 626 - 1,663 -
Loan servicing fee income 518 627 796 1,676 2,225
Gain on sales of loans 77 294 217 444 1,378
Securities (losses)/gains (15) 2 148 209 337
Other income 846 780 491 2,342 1,846
------------- ---------- ------------ ------------- ------------
8,160 8,220 6,542 23,938 19,652
------------- ---------- ------------ ------------- ------------
Noninterest expenses:
Salaries, benefits and other compensation 7,655 7,406 6,371 22,704 19,957
Occupancy expense 1,151 1,122 1,006 3,422 2,978
Equipment expense 969 925 927 2,759 2,783
Data processing and operations expense 815 837 738 2,414 2,105
Professional fees 607 309 457 1,438 1,822
Marketing expense 465 541 433 1,526 1,254
Other operating expenses 2,505 2,049 1,594 6,331 5,956
------------- ---------- ------------ ------------- ------------
14,167 13,189 11,526 40,594 36,855
------------- ---------- ------------ ------------- ------------
Income from continuing operations before minority interest
and taxes 10,117 9,952 7,890 29,582 22,989
Less minority interest 66 47 - 158 -
------------- ---------- ------------ ------------- ------------
Income from continuing operations before taxes 10,051 9,905 7,890 29,424 22,989
Income tax provision 3,499 3,638 2,562 10,423 7,944
------------- ---------- ------------ ------------- ------------
Income from continuing operations 6,552 6,267 5,328 19,001 15,045
Gain on sale of businesses held-for-sale, net of taxes - - - - 41,389
------------- ---------- ------------ ------------- ------------
Net income $ 6,552 $ 6,267 $ 5,328 $ 19,001 $ 56,434
============= ========== ============ ============= ============
Diluted earnings per share:
Income from continuing operations $ 0.88 $ 0.82 $ 0.66 $ 2.49 $ 1.80
Gain on sale of businesses held-for-sale, net of taxes - - - - 4.94
------------- ---------- ------------ ------------- ------------
Net income $ 0.88 $ 0.82 $ 0.66 $ 2.49 $ 6.74
============= ========== ============ ============= ============
Weighted average shares outstanding for diluted EPS 7,454,990 7,604,845 8,058,255 7,620,555 8,366,850
- -----------------------------------------------------------------------------------------------------------------------------------
Performance Ratios (continuing operations only):
Return on average assets (a) 1.09% 1.09% 1.06 % 1.10% 1.07%
Return on average equity (a) 14.22 13.26 11.17 13.39 9.83
Net interest margin (a)(b) 3.26 3.07 2.96 3.19 3.31
Efficiency ratio (c) 55.42 54.70 56.99 55.31 58.76
- -----------------------------------------------------------------------------------------------------------------------------------
See "Notes"
[LOGO] WSFS Financial
Corporation 838 Market Street, Wilmington, Delaware 19801
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
SUMMARY STATEMENT OF CONDITION:
(Dollars in thousands)
(Unaudited)
September 30, June 30, September 30,
2004 2004 2003
-------------- -------------- -------------
Summary Statement of Condition:
Assets:
Cash and due from banks $ 54,088 $ 55,979 $ 50,748
Cash in non-owned ATMs 123,765 123,777 87,534
Investment securities (d)(e) 98,338 122,064 73,181
Other investments 62,497 62,719 52,786
Mortgage-backed securities (d) 515,832 527,312 517,503
Net loans (f)(g) 1,473,714 1,403,224 1,258,131
Loans held for sale (f) 2,491 1,064 13,263
Bank owned life insurance 51,663 51,105 -
Other assets 51,882 49,065 38,855
Loans, operating leases and
other assets of discontinued operations 1,873 3,645 14,042
-------------- -------------- -------------
Total assets $ 2,436,143 $ 2,399,954 $ 2,106,043
============== ============== =============
Liabilities and Stockholders' Equity:
Noninterest-bearing deposits $ 229,999 $ 229,842 $ 202,647
Interest-bearing deposits 725,487 684,719 688,232
-------------- -------------- -------------
Total retail deposits 955,486 914,561 890,879
Jumbo CD's - non retail 51,873 45,300 30,340
Brokered CD's 124,884 74,974 -
-------------- -------------- -------------
Total deposits 1,132,243 1,034,835 921,219
Federal Home Loan Bank advances 878,623 930,181 768,420
Other borrowings 218,982 241,604 207,259
Other liabilities 16,665 15,373 20,066
-------------- -------------- -------------
Total liabilities 2,246,513 2,221,993 1,916,964
-------------- -------------- -------------
Minority interest 258 237 50
Stockholders' equity 189,372 177,724 189,029
-------------- -------------- -------------
Total liabilities, minority interest and
stockholders' equity $ 2,436,143 $ 2,399,954 $ 2,106,043
============== ============== =============
- ------------------------------------------------------------------------------- -------------
Capital Ratios:
Equity to asset ratio 7.77% 7.41% 8.98%
Tangible equity to asset ratio 7.73 7.36 8.98
Core capital (h) (required: 4.00%) 9.65 9.49 10.81
Tier 1 Capital (h) (required 4.00%) 14.61 14.94 17.09
Risk-based capital (h) (required: 8.00%) 15.53 15.80 17.95
- ------------------------------------------------------------------------------- -------------
Asset Quality Indicators (continuing operations only):
Nonperforming Assets:
Nonaccruing loans $ 4,368 $ 5,172 $ 5,748
Assets acquired through foreclosure 159 175 1,118
-------------- -------------- -------------
Total nonperforming assets $ 4,527 $ 5,347 $ 6,866
============== ============== =============
Past due loans (i) $ 328 $ 301 $ 446
Allowance for loan losses $ 24,052 $ 23,139 $ 22,293
Ratio of nonperforming assets to total assets 0.19% 0.22% 0.33%
Ratio of allowance for loan losses to total gross
loans (j) 1.61 1.62 1.74
Ratio of allowance for loan losses to nonaccruing
loans (k) 524 425 383
Ratio of quarterly net charge-offs to
average gross loans (a)(f) 0.02 0.08 0.22
- -----------------------------------------------------------------------------------------------
See "Notes"
[LOGO] WSFS Financial
Corporation 838 Market Street, Wilmington, Delaware 19801
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
AVERAGE BALANCE SHEET
(Dollars in thousands)
(Unaudited)
Three months ended
-----------------------------------------------------------------------------------------------
September 30, 2004 June 30, 2004 September 30, 2003
------------------------------ ------------------------------ -----------------------------
Yield/ Yield/ Yield/
Average Rate Average Rate Average Rate
Balance Interest (a)(b) Balance Interest (a)(b) Balance Interest (a)(b)
----------- --------- ------- ---------- -------- ----------- ---------- -------- -------
Assets:
Interest-earning assets:
Loans: (f) (l)
Commercial real estate loans $ 450,707 $ 6,409 5.69% $ 406,101 $ 5,424 5.34% $ 344,043 $ 4,798 5.58%
Residential real estate loans 445,748 5,830 5.23 446,039 5,864 5.26 452,826 6,548 5.78
Commercial loans 350,263 4,254 5.07 337,152 3,740 4.72 260,972 3,106 5.08
Consumer loans 210,449 3,356 6.34 201,013 3,163 6.33 187,536 3,330 7.04
----------- -------- ----------- -------- ----------- --------
Total loans 1,457,167 19,849 5.53 1,390,305 18,191 5.31 1,245,377 17,782 5.80
Mortgage-backed securities (d) 520,356 5,468 4.20 511,379 4,689 3.67 522,902 2,759 2.11
Loans held-for-sale (f) 2,349 33 5.62 2,423 31 5.12 9,416 140 5.95
Investment securities (d)(e) 109,086 1,090 4.00 121,179 1,219 4.02 27,319 284 4.16
Other interest-earning assets 48,784 161 1.31 45,601 152 1.33 46,116 212 1.82
----------- -------- ---------- -------- ----------- --------
Total interest-earning assets 2,137,742 26,601 5.03 2,070,887 24,282 4.74 1,851,130 21,177 4.64
-------- -------- --------
Allowance for loan losses (23,482) (22,899) (22,485)
Cash and due from banks 54,439 49,512 48,397
Cash in non-owned ATMs 126,808 112,559 91,836
Loans, operating leases and
other assets of discontinued
operations 2,992 5,663 18,228
Bank owned life insurance 51,302 50,691 -
Other noninterest-earning assets 48,963 43,027 37,728
----------- ---------- -----------
Total assets $2,398,764 $2,309,440 $2,024,834
=========== =========== ===========
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest bearing deposits:
Money market and interest-
bearing demand $ 146,665 $ 236 0.64 $ 119,732 $ 84 0.28 $ 112,220 $ 63 0.22
Savings 316,910 318 0.40 322,682 326 0.41 318,515 359 0.45
Retail time deposits 225,906 1,128 1.99 222,589 1,024 1.85 247,838 1,346 2.15
----------- -------- ----------- -------- ----------- --------
Total interest-bearing retail
deposits 689,481 1,682 0.97 665,003 1,434 0.87 678,573 1,768 1.03
Jumbo certificates of deposit-
nonretail 50,578 211 1.66 45,942 168 1.47 32,662 114 1.38
Brokered certificates of deposit 102,067 427 1.66 59,841 230 1.55 - - -
----------- -------- ----------- -------- ----------- --------
Total interest-bearing deposits 842,126 2,320 1.10 770,786 1,832 0.96 711,235 1,882 1.05
FHLB of Pittsburgh advances 899,922 6,038 2.63 869,267 5,933 2.70 736,057 5,353 2.85
Trust preferred borrowings 51,547 551 4.18 51,547 503 3.86 50,000 489 3.83
Other borrowed funds 177,392 599 1.35 193,678 453 0.94 112,537 240 0.85
Cost of funding discontinued
operations (27) (47) (186)
----------- -------- ----------- -------- ----------- --------
Total interest-bearing
liabilities 1,970,987 9,481 1.92 1,885,278 8,674 1.84 1,609,829 7,778 1.93
-------- -------- --------
Noninterest-bearing demand deposits 227,319 221,141 196,155
Other noninterest-bearing liabilities 15,929 13,767 28,060
Minority interest 259 213 50
Stockholders' equity 184,270 189,041 190,740
----------- ----------- -----------
Total liabilities and stockholders'
equity $2,398,764 $2,309,440 $2,024,834
=========== =========== ===========
Excess of interest-earning assets
over interest-bearing liabilities $ 166,755 $ 185,609 $ 241,301
=========== =========== ===========
Net interest and dividend income $17,120 $15,608 $13,399
======== ======== ========
Interest rate spread 3.11% 2.90% 2.71%
======= ========= ========
Net interest margin 3.26% 3.07% 2.96%
======= ========= ========
See "Notes"
[LOGO] WSFS Financial
Corporation 838 Market Street, Wilmington, Delaware 19801
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
(Dollars in thousands, except per share data)
(Unaudited)
Three months ended Nine months ended
------------------------------------------ -----------------------------
September 30, June 30, September 30, September 30, September 30,
2004 2004 2003 2004 2003
------------------------------------------ -----------------------------
Stock Information:
Market price of common stock:
High $ 53.39 $ 50.75 $ 44.66 $ 53.39 $ 44.66
Low 48.05 45.03 38.66 44.43 30.96
Close 50.00 48.56 42.12 50.00 42.12
Book value per share 26.92 25.33 25.34
Tangible book value per share 26.76 25.18 25.34
Number of shares outstanding (000s) 7,036 7,016 7,460
-------------------------------------------------------------------------------------------------------------------------
Other Financial Data:
One-year repricing gap to total assets (m) (0.65)% (4.92)% (10.28)%
Number of associates (FTEs) (n) 486 471 436
Number of branch offices 23 23 22
-------------------------------------------------------------------------------------------------------------------------
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 the FTEs of WCC (discontinued operations) and Cypress Capital
Management (controlled, but not wholly owned subsidiary).