WSFS Financial Corporation 838 Market Street, Wilmington, Delaware 19801
PRESS RELEASE
FOR IMMEDIATE RELEASE
Contact: Stephen A. Fowle
April 26, 2005 (302) 571-6833
WSFS ANNOUNCES 1Q '05 EPS OF $0.90
WSFS Financial Corporation (NASDAQ/NMS: WSFS), the parent company of
Wilmington Savings Fund Society, FSB, reported quarterly net income of $6.8
million, or $0.90 per diluted share. This compares to net income of $6.2
million, or $0.79 per share, for the first quarter of 2004. This $0.11 growth in
earnings per share is a 14% increase over the same period in 2004.
Highlights for the first quarter of 2005 include: (i) growth in net
loans of $73.1 million, or 5%, over balances at December 31, 2004, primarily in
commercial and commercial real estate loans; (ii) continued strong asset quality
with annualized net charge-offs of only 4 basis points, and the ratio of
nonperforming assets (NPA) to total assets of 26 basis points at March 31, 2005;
and (iii) an increase in total retail deposits of $30.1 million, or 3%, over
balances at December 31, 2004.
The following is a brief discussion of the first quarter 2005 results.
Net Interest Income
Net interest income for the first quarter of 2005 was $18.1 million.
This compares to the $15.9 million reported for the same quarter in 2004 and the
$18.3 million reported for the fourth quarter of 2004. The net interest margin
percentage of 3.23% for the first quarter of 2005 declined from 3.38% for the
fourth quarter of 2004. During the fourth quarter, the net interest margin was
positively impacted by the actual experience of matured loans in the reverse
2
WSFS Financial Corporation 838 Market Street, Wilmington, Delaware 19801
mortgage portfolio when compared to the first quarter of 2005. WSFS recorded
$67,000 in reverse mortgage income this quarter versus $817,000 in the fourth
quarter of 2004.
Overall portfolio yields on loans have continued to trend upward due to
higher prevailing rates combined with the Bank's recent robust growth in
variable rate loans. Additionally, the gross yield on the Bank's mortgage-backed
securities ("MBS") portfolio was 4.33% in the first quarter of 2005 versus 4.22%
in the fourth quarter of 2004. The weighted average duration of the MBS
portfolio was 3.1 years at March 31, 2005 compared to 2.8 years at December 31,
2004.
Loans and Asset Quality
Net loans grew $73.1 million, or 5%, during the first quarter of 2005
to $1.6 billion at March 31, 2005. Net loans grew $260.7 million, or 19%, versus
March 31, 2004. Loan volume increases resulted primarily from continued strong
growth in commercial and commercial real estate (CRE) loans, which increased
$77.6 million, or 9% from balances at December 31, 2004 and $257.1 million, or
36% from balances at March 31, 2004. The increase in loan volume is the result
of experienced and empowered relationship managers who are committed to
delivering extraordinary levels of service to their customers. The following
table summarizes the current loan balances and composition as well as recent
changes in balances and composition.
At At At
(Dollars in thousands) Mar. 31, 2005 Dec. 31, 2004 Mar. 31, 2004
------------- ------------- -------------
Amount % Amount % Amount %
------ --- ------ --- ------ ---
Commercial and CRE $ 980,437 61% $ 902,880 59% $ 723,346 54%
Residential 433,220 27 441,839 29 446,303 33
Consumer 216,283 14 211,741 14 197,738 15
Allowance for loan losses (24,647) (2) (24,222) (2) (22,745) (2)
---------- --- ---------- --- ---------- ---
Net Loans $1,605,293 100% $1,532,238 100% $1,344,642 100%
========== === ========== === ========== ===
The Company's provision for loan losses was $579,000 in the first
quarter of 2005, compared to $687,000 in the same period last year. Despite an
increase in the dollar amount of nonaccrual loans, predominantly due to the
addition of one commercial credit, the provision reflects an appropriate level
given the continued strength in credit quality. Annualized net charge-offs in
the first quarter 2005 were 0.04% of average loans compared to 0.18% for the
3
WSFS Financial Corporation 838 Market Street, Wilmington, Delaware 19801
fourth quarter of 2004, and 0.10% for the first quarter in 2004. At March 31,
2005, the allowance for loan losses was 1.51% of total loans, compared to 1.56%
at December 31, 2004 and 1.66% at March 31, 2004. Non-performing assets as a
percentage of total assets were 0.26% at March 31, 2005 compared to 0.18% at
December 31, 2004 and 0.29% at March 31, 2004 and totaled $6.7 million at March
31, 2005, an increase from the $4.6 million reported at December 31, 2004 and
the $6.5 million reported at March 31, 2004.
Deposits
Core deposit relationships (demand deposits, money market and savings
accounts) increased $44.1 million, or 6% during the quarter and increased $137.9
million, or 21% over this time last year. Total retail deposits increased $30.1
million, or 3%, during the first quarter to $1.1 billion at March 31, 2005 and
increased $191.7 million, or 22% over March 31, 2004. The deposit growth was
due, in part, to the opening of three new retail banking offices during 2004,
and from commercial banking relationships. In addition, late in the third
quarter of 2004, the Company successfully introduced "High-Performance
Checking," a checking product line designed to attract a greater share of market
deposits over time. The following table summarizes the current retail deposit
balances and composition as well as recent changes in balances and composition.
At At At
(Dollars in thousands) Mar. 31, 2005 Dec. 31, 2004 Mar. 31, 2004
------------- ------------- -------------
Amount % Amount % Amount %
------ - ------ - ------ -
Non-interest demand $ 256,926 24% $ 246,592 23% $223,490 25%
Savings 286,229 26 289,041 28 320,353 36
Money market and int. demand 260,181 24 223,621 21 121,565 14
---------- --- ---------- --- -------- ---
Total core deposits 803,336 74 759,254 72 665,408 75
Retail time 278,986 26 292,928 28 225,256 25
---------- --- ---------- --- -------- ---
Total retail deposits $1,082,322 100% $1,052,182 100% $890,664 100%
========== === ========== === ======== ===
Noninterest Income
During the first quarter of 2005, the Company recorded noninterest
income of $7.9 million, which was $298,000, or 4% greater than the first
quarter of 2004 and lower by $156,000, or 2%, in comparison to the fourth
quarter of 2004. The increase over the first quarter of 2004 was primarily due
to increases of $539,000 in card and ATM income during the
4
WSFS Financial Corporation 838 Market Street, Wilmington, Delaware 19801
quarter, mostly the result of underlying growth in volumes. This increase was
partially offset by lower gains on the sales of securities of $222,000. The
decrease in comparison to the fourth quarter 2004 was mainly attributable to
lower deposit service charges resulting from the seasonal nature of these types
of charges. In addition, loan fee income declined during the quarter as a result
of deceased prepayment fees mainly due to the current rising interest rate
environment.
Noninterest Expenses
Noninterest expenses for the three months ended March 31, 2005 totaled
$15.0 million, which was $1.7 million, or 13% more than the same quarter last
year and $135,000 less than the fourth quarter of 2004. The increase in
salaries, benefits and other compensation, in large part, is the result of
growth in WSFS' branch system, as well as an additional $727,000 of bonus and
post-retirement related expenses recorded in 2005. Other expenses were
positively impacted by the reversal of a $503,000 reserve for losses in the
CashConnect business, which is no longer necessary because losses are no longer
probable. These two items resulted in a net impact on pre-tax earnings of
$224,000.
Capital Management
During the first quarter of 2005, the Company repurchased 153,500 of
its shares of common stock at an average price of $55.71 per share. These
repurchases occurred late in the quarter and the impact on average shares
outstanding will not be totally reflected until the second quarter. At March 31,
2005, the Company had 548,064 shares, or nearly 8% of its 7.0 million
outstanding shares, remaining under its current share repurchase authorization.
The ratio of tangible equity to assets was 7.23% at March 31, 2005. The
Tier 1 capital ratio was 13.51%, which is far in excess of the 6.00% level
required to be considered "well-capitalized" under regulatory definitions.
Tangible book value per share was $27.06 at March 31, 2005.
5
WSFS Financial Corporation 838 Market Street, Wilmington, Delaware 19801
Marvin N. Schoenhals, Chairman and President of WSFS, said, "We are
very proud of our first quarter results because they reflect the continued
success of our strategic focus on Delaware banking." Mr. Schoenhals went on to
say, "In 2005, we expect to build on the momentum generated during 2004. We look
forward to opening more retail banking offices and continuing our loan and
deposit growth to further strengthen our retail franchise and meeting the needs
of more Delawareans."
WSFS Financial Corporation is a $2.6 billion financial services
company. At March 31, 2005, its principal subsidiary, Wilmington Savings Fund
Society, FSB, operated 24 retail banking offices in all three counties in
Delaware, as well as Chester and Delaware Counties in Pennsylvania. Other
continuing operating subsidiaries include: WSFS Investment Group, Inc.,
Montchanin Capital Management, Inc. and WSFS Reit, 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.
# # #
6
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
-------------------------------------------------
Mar 31, December 31, Mar 31,
2005 2004 2004
---------------- ------------ --------------
Interest income:
Interest and fees on loans $ 23,157 $ 21,897 $ 18,100
Interest on mortgage-backed securities 5,874 5,442 4,727
Interest and dividends on investment securities 755 1,508 1,129
Other interest income 379 218 206
---------------- ------------ --------------
30,165 29,065 24,162
---------------- ------------ --------------
Interest expense:
Interest on deposits 4,087 3,450 1,793
Interest on Federal Home Loan Bank advances 6,187 5,978 5,555
Interest on federal funds purchased and securities sold
under agreements to repurchase 1,011 690 400
Interest on trust preferred borrowings 712 634 496
Interest on other borrowings 55 57 38
---------------- ------------ --------------
12,052 10,809 8,282
---------------- ------------ --------------
Net interest income 18,113 18,256 15,880
Provision for loan losses 579 847 687
---------------- ------------ --------------
Net interest income after provision for loan losses 17,534 17,409 15,193
---------------- ------------ --------------
Noninterest income:
Credit/debit card and ATM income 3,203 3,220 2,664
Deposit service charges 2,178 2,373 2,335
Investment advisory income 608 591 538
Bank owned life insurance income 496 527 479
Loan fee income 426 506 531
Gain (loss) on sales of loans 144 (5) 73
Securities gains - 40 222
Other income 801 760 716
---------------- ------------ --------------
7,856 8,012 7,558
---------------- ------------ --------------
Noninterest expenses:
Salaries, benefits and other compensation 8,822 8,019 7,643
Occupancy expense 1,276 1,244 1,149
Equipment expense 983 937 865
Data processing and operations expense 911 832 762
Professional fees 553 1,058 522
Marketing expense 525 803 520
Other operating expenses 1,900 2,212 1,777
---------------- ------------ --------------
14,970 15,105 13,238
---------------- ------------ --------------
Income from continuing operations before
minority interest and taxes 10,420 10,316 9,513
Less minority interest 37 32 45
---------------- ------------ --------------
Income from continuing operations before taxes 10,383 10,284 9,468
Income tax provision 3,593 3,528 3,286
---------------- ------------ --------------
Income from continuing operations 6,790 6,756 6,182
Income on wind-down of discontinued operations, net of taxes - 143 -
---------------- ------------ --------------
Net income $ 6,790 $ 6,899 $ 6,182
================ ============ ==============
Diluted earnings per share:
Income from continuing operations $ 0.90 $ 0.90 $ 0.79
Income on wind-down of discontinued
operations, net of taxes - 0.02 -
---------------- ------------ --------------
Net income $ 0.90 $ 0.92 $ 0.79
================ ============ ==============
Weighted average shares outstanding for diluted EPS 7,508,827 7,502,939 7,799,699
- ----------------------------------------------------------------------------------------------------------------
Performance Ratios (continuing operations only):
Return on average assets (a) 1.07% 1.10% 1.12%
Return on average equity (a) 13.66 13.99 12.72
Net interest margin (a)(b) 3.23 3.38 3.24
Efficiency ratio (c) 57.04 56.89 55.81
- ----------------------------------------------------------------------------------------------------------------
See "Notes"
7
WSFS FINANCIAL CORPORATION 838 Market Street, Wilmington, Delaware 19801
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
SUMMARY STATEMENT OF CONDITION:
(Dollars in thousands)
(Unaudited)
Mar 31, Dec 31, Mar 31,
2005 2004 2004
------------- ------------- -------------
Summary Statement of Condition:
Assets:
- -------
Cash and due from banks $ 52,733 $ 61,328 $ 50,376
Cash in non-owned ATMs 129,688 131,150 106,673
Investment securities (d)(e) 96,706 97,376 115,118
Other investments 44,004 44,477 43,018
Mortgage-backed securities (d) 577,670 524,144 480,549
Net loans (f)(g) 1,605,293 1,532,238 1,344,642
Loans held for sale (f) 2,387 3,229 3,240
Bank owned life insurance 52,686 52,190 50,479
Other assets 60,353 55,736 40,974
Loans, operating leases and
other assets of discontinued operations 557 1,088 6,147
------------- ------------- -------------
Total assets $ 2,622,077 $ 2,502,956 $ 2,241,216
============= ============= =============
Liabilities and Stockholders' Equity:
- -------------------------------------
Noninterest-bearing deposits $ 256,926 $ 246,592 $ 223,490
Interest-bearing deposits 825,396 805,590 667,174
------------- ------------- -------------
Total retail deposits 1,082,322 1,052,182 890,664
Jumbo CD's - non retail 45,511 44,903 44,411
Brokered CD's 170,921 137,877 49,991
------------- ------------- -------------
Total deposits 1,298,754 1,234,962 985,066
Federal Home Loan Bank advances 868,004 837,063 798,239
Other borrowings 244,881 217,093 244,540
Other liabilities 19,208 17,296 14,753
------------- ------------- -------------
Total liabilities 2,430,847 2,306,414 2,042,598
------------- ------------- -------------
Minority interest 213 239 191
Stockholders' equity 191,017 196,303 198,427
------------- ------------- -------------
Total liabilities, minority interest
and stockholders' equity $ 2,622,077 $ 2,502,956 $2,241,216
============= ============= =============
- ------------------------------------------------------------------------------------------------------
Capital Ratios:
Equity to asset ratio 7.28 % 7.84 % 8.86 %
Tangible equity to asset ratio 7.23 7.80 8.81
Core capital (h) (required: 4.00%;
well-capitalized: 5.00%) 9.12 9.69 10.58
Tier 1 Capital (h) (required: 4.00%;
well-capitalized: 6.00%) 13.51 14.41 16.45
Risk-based capital (h) (required: 8.00%;
well-capitalized: 10.00%) 14.36 15.34 17.30
- -------------------------------------------------------------------------------------- -------------
Asset Quality Indicators (continuing operations only):
Nonperforming Assets:
Nonaccruing loans $ 6,294 $ 4,396 $ 6,256
Assets acquired through foreclosure 425 217 233
------------- ------------- -------------
Total nonperforming assets $ 6,719 $ 4,613 $ 6,489
============= ============= =============
Past due loans (i) $ 349 $ 807 $ 368
Allowance for loan losses $ 24,647 $ 24,222 $ 22,745
Ratio of nonperforming assets to total assets 0.26% 0.18% 0.29%
Ratio of allowance for loan losses to total gross
loans (j) 1.51 1.56 1.66
Ratio of allowance for loan losses to nonaccruing
loans (k) 373 524 359
Ratio of quarterly net charge-offs to
average gross loans (a)(f) 0.04 0.18 0.10
- ------------------------------------------------------------------------------------------------------
See "Notes"
8
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
---------------------------------------------------------------------------------------------------
Mar 31, 2005 Dec 31, 2004 Mar 31, 2004
-------------------------------- -------------------------------- ------------------------------
Average Yield/ Average Yield/ Average Yield/
Balance Interest Rate (a)(b) Balance Interest Rate (a)(b) Balance Interest Rate (a)(b)
----------- --------- --------- ---------- -------- ----------- ---------- -------- ---------
Assets:
Interest-earning assets:
Loans: (f) (l)
Commercial real estate loans $ 550,790 $ 8,584 6.23% $ 508,948 $ 7,716 6.06% $ 386,911 $ 5,212 5.39%
Residential real estate loans 437,109 5,580 5.11 443,023 5,745 5.19 452,886 6,124 5.41
Commercial loans 385,439 5,489 5.98 370,370 4,971 5.55 304,227 3,505 4.92
Consumer loans 212,762 3,469 6.61 210,718 3,420 6.46 194,168 3,226 6.68
----------- --------- ----------- --------- ----------- --------
Total loans 1,586,100 23,122 5.90 1,533,059 21,852 5.78 1,338,192 18,067 5.48
Mortgage-backed securities (d) 542,965 5,874 4.33 515,276 5,442 4.22 496,699 4,727 3.81
Loans held-for-sale (f) 2,510 35 5.58 2,799 45 6.43 1,174 33 11.24
Investment securities (d)(e) 97,194 755 3.11 97,686 1,508 6.17 114,473 1,129 3.95
Other interest-earning assets 45,950 379 3.30 46,993 218 1.85 46,643 206 1.78
----------- --------- ----------- --------- ----------- --------
Total interest-earning assets 2,274,719 30,165 5.35 2,195,813 29,065 5.35 1,997,181 24,162 4.90
--------- --------- --------
Allowance for loan losses (24,377) (24,403) (22,632)
Cash and due from banks 54,011 57,964 47,126
Cash in non-owned ATMs 123,306 125,190 103,257
Loans, operating leases and
other assets of discontinued
operations 988 1,422 8,619
Bank owned life insurance 52,367 51,852 39,684
Other noninterest-earning assets 53,322 50,663 38,600
----------- ----------- -----------
Total assets $2,534,336 $2,458,501 $2,211,835
=========== =========== ===========
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest bearing deposits:
Money market and interest-
bearing demand $ 240,703 $ 649 1.09 $ 196,673 $ 471 0.95 $ 113,052 $ 66 0.23
Savings 285,462 271 0.39 295,088 284 0.38 317,396 329 0.42
Retail time deposits 286,722 1,851 2.62 277,275 1,784 2.56 226,027 1,067 1.90
----------- --------- ----------- --------- ----------- --------
Total interest-bearing
retail deposits 812,887 2,771 1.38 769,036 2,539 1.31 656,475 1,462 0.90
Jumbo certificates of
deposit-nonretail 45,250 294 2.63 50,852 238 1.86 42,779 152 1.43
Brokered certificates
of deposit 156,471 1,022 2.65 131,333 673 2.04 42,820 179 1.68
----------- --------- ----------- --------- ----------- --------
Total interest-bearing
deposits 1,014,608 4,087 1.63 951,221 3,450 1.44 742,074 1,793 0.97
FHLB of Pittsburgh advances 819,476 6,191 3.02 849,734 5,989 2.76 819,713 5,631 2.72
Trust preferred borrowings 51,547 712 5.53 51,547 634 4.81 50,000 496 3.92
Other borrowed funds 194,210 1,066 2.20 167,681 747 1.78 186,780 438 0.94
Cost of funding
discontinued operations (4) (11) (76)
----------- --------- ----------- --------- ----------- --------
Total interest-bearing
liabilities 2,079,841 12,052 2.32 2,020,183 10,809 2.14 1,798,567 8,282 1.84
--------- --------- --------
Noninterest-bearing
demand deposits 239,590 227,369 205,803
Other noninterest-bearing
liabilities 15,861 17,477 12,950
Minority interest 224 260 66
Stockholders' equity 198,820 193,212 194,449
----------- ----------- -----------
Total liabilities and
stockholders' equity $2,534,336 $2,458,501 $2,211,835
=========== =========== ===========
Excess of interest-earning
assets over interest-bearing
liabilities $ 194,878 $ 175,630 $ 198,614
=========== =========== ===========
Net interest and dividend income $ 18,113 $ 18,256 $15,880
========= ========= ========
Interest rate spread 3.03% 3.21% 3.06%
====== ======= =======
Net interest margin 3.23% 3.38% 3.24%
====== ======= =======
See "Notes"
9
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
----------------------------
Mar 31, Dec 31, Mar 31,
2005 2004 2004
---------------------------
Stock Information:
Market price of common stock:
High $ 59.91 $ 62.26 $ 51.40
Low 52.20 50.23 44.43
Close 52.56 60.00 50.17
Book value per share 27.29 27.70 26.95
Tangible book value per share 27.06 27.55 26.80
Number of shares outstanding (000s) 6,998 7,086 7,362
- ------------------------------------------------------------------------------
Other Financial Data:
One-year repricing gap to total assets (m) (1.22)% (0.81)% (4.07)%
Number of associates (FTEs) (n) 487 490 445
Number of branch offices 24 24 23
- ------------------------------------------------------------------------------
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).