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[LOGO] WSFS Financial 838 Market Street, Wilmington, Delaware 19801 1
Corporation
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P R E S S R E L E A S E
FOR IMMEDIATE RELEASE Contact: Stephen A. Fowle
January 25, 2006 (302) 571-6833
WSFS ANNOUNCES 4Q '05 EPS OF $1.09
WSFS Financial Corporation (NASDAQ/NMS: WSFS), the parent company of
Wilmington Savings Fund Society, FSB, reported quarterly net income of $7.5
million, or $1.09 per diluted share. This compares to net income of $6.9
million, or $0.92 per share for the fourth quarter of 2004, or income from
continuing operations (excluding income related to a discontinued business unit)
of $6.8 million, or $0.90 per share, during that quarter. Earnings per share
from continuing operations for the fourth quarter of 2005 improved $0.19, or 21%
over the same quarter last year. Income from continuing operations for the full
year of 2005 was $28.3 million, or $3.95 per share, an improvement of $0.56, or
17% over 2004.
Highlights for the fourth quarter of 2005 include: (i) an increase in
total retail deposits of $43.5 million, or 4%, over balances at September 30,
2005; (ii) growth in net loans of $76.2 million, or 4%, over balances at
September 30, 2005; and (iii) continued strong asset quality with the ratio of
nonperforming assets (NPA) to total assets of 12 basis points at December 31,
2005.
Marvin N. Schoenhals, Chairman and President of WSFS, said, "We are
very proud of our fourth quarter and full-year results because they reflect the
continued success of our strategic focus on growing and strengthening our
banking franchise. We recently completed the renovation of one of our branch
offices, and look forward to opening and renovating several banking offices
during 2006." Mr. Schoenhals went on to say, "the benefits from our increased
focus on our core banking franchise is apparent in our 16% increase in core
deposits and 16% year-over-year loan growth."
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[LOGO] WSFS Financial 838 Market Street, Wilmington, Delaware 19801 2
Corporation
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The following is a brief discussion of the fourth quarter 2005 results.
Net Interest Income
Net interest income for the fourth quarter of 2005 was $19.2 million.
This compares to $18.3 million reported for the same quarter in 2004 and $19.2
million reported for the third quarter of 2005. The net interest margin
percentage of 3.16% for the fourth quarter of 2005 declined from 3.22% for the
third quarter of 2005. During the fourth quarter of 2005, the net interest
margin was negatively affected by increased funding costs as well as a one-time
$420,000 (pre-tax) charge related to a correction of interest rates on a certain
class of savings accounts. Additionally, WSFS recorded income on reverse
mortgages of $477,000, which was $286,000 more than the third quarter 2005.
Overall portfolio yields on loans have continued to trend upward due to
higher prevailing rates combined with the Company's continued focus on growth of
variable rate loans. Additionally, the gross yield on the Company's
mortgage-backed securities (MBS) portfolio was 4.63% in the fourth quarter of
2005 versus 4.47% in the third quarter of 2005. The weighted average duration of
the MBS portfolio was 3.1 years at December 31, 2005 compared to 3.0 years at
September 30, 2005.
Loans and Asset Quality
Net loans grew $76.2 million, or 4%, during the fourth quarter of 2005
to $1.8 billion at December 31, 2005. Net loans grew $242.6 million, or 16%,
compared to balances at December 31, 2004. The following table summarizes the
current loan balances and composition as well as recent changes in balances and
composition.
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[LOGO] WSFS Financial 838 Market Street, Wilmington, Delaware 19801 3
Corporation
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At At At
(Dollars in thousands) Dec. 31, 2005 Sep. 30, 2005 Dec. 31, 2004
------------------ ------------------ -------------------
Amount % Amount % Amount %
---------- --- ---------- --- ---------- ---
Commercial and CRE $1,094,913 61% $1,053,168 62% $ 902,880 59%
Residential 459,680 26 439,975 26 441,839 29
Consumer 245,646 14 230,424 13 211,741 14
Allowance for loan losses (25,381) (1) (24,933) (1) (24,222) (2)
---------- --- ---------- --- ---------- ---
Net Loans $1,774,858 100% $1,698,634 100% $1,532,238 100%
========== === ========== === ========== ===
The Company's provision for loan losses was $1.0 million in the fourth
quarter of 2005, compared to $847,000 in the same period last year. This
increased provision is the result of growth in the Company's loan portfolio. The
ratio of loan loss reserves to total loans was 1.41%, compared to 1.45% at
September 30, 2005.
Asset quality statistics continued at historically strong levels. NPA
totaled $3.5 million as of December 31, 2005, down from $4.4 million as of
September 30, 2005 and $4.6 million as of December 31, 2004. NPA as a percentage
of assets improved to 0.12% as of December 31, 2005 versus 0.16% as of September
30, 2005 and 0.18% as of December 31, 2004. Annualized net charge-offs in the
fourth quarter of 2005 were 0.13% of average loans compared to 0.05% for the
third quarter of 2005 and 0.18% for the fourth quarter of 2004.
Deposits
Total retail deposits (core deposits and retail time deposits)
increased $43.5 million, or 4%, during the fourth quarter to $1.2 billion at
December 31, 2005 and increased $141.7 million, or 13% over December 31, 2004.
Core deposit relationships (demand deposits, money market and savings accounts)
increased $22.5 million, or 3% during the quarter and increased $122.6 million,
or 16% over the same period last year. The following table summarizes the
current retail deposit balances and composition as well as recent changes in
balances and composition.
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[LOGO] WSFS Financial 838 Market Street, Wilmington, Delaware 19801 4
Corporation
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At At At
(Dollars in thousands) Dec. 31, 2005 Sep. 30, 2005 Dec. 31, 2004
------------------- ----------------- -----------------
Amount % Amount % Amount %
---------- --- ---------- --- ---------- ---
Non-interest demand $ 279,415 23% $ 266,598 23% $ 246,592 23%
Interest bearing demand 141,378 12 122,870 11 100,098 9
Savings 251,675 21 257,082 22 289,041 28
Money market 209,398 18 212,794 19 123,523 12
---------- --- ---------- --- ---------- ---
Total core deposits 881,866 74 859,344 75 759,254 72
Retail time 312,065 26 291,053 25 292,928 28
---------- --- ---------- --- ---------- ---
Total retail deposits $1,193,931 100% $1,150,397 100% $1,052,182 100%
========== === ========== === ========== ===
Noninterest Income
During the fourth quarter of 2005, the Company recorded noninterest
income of $9.5 million, which was $1.5 million, or 19% greater than the fourth
quarter of 2004 and $915,000, or 11% greater than the third quarter of 2005.
The increase over the fourth quarter of 2004 was primarily due to increases of
$1.1 million in card and ATM income during the quarter, the result of growth
in ATM usage volumes, combined with increased prime-based bailment fees. In
addition, deposit service charges increased $377,000 over the fourth quarter
2004. The increase over the third quarter 2005 was mainly attributable to the
sale of lower yielding agency investments in the third quarter, which resulted
in $609,000 in losses during that period. Consistent with the year-over-year
trend, card and ATM income increased $367,000 and deposit service charges
increased $74,000 in comparison to the third quarter of 2005.
Noninterest Expenses
Noninterest expenses for the fourth quarter of 2005 totaled $16.2
million, which was $1.0 million, or 7% more than the same quarter last year.
Noninterest expense for the fourth quarter of 2005 was similar to the level of
expense reported in the third quarter of 2005. The increase over the fourth
quarter of 2004 was primarily due to increases in salaries, benefits and other
compensation and other operating expenses. These increases were mainly the
result of the Company's continued growth efforts.
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[LOGO] WSFS Financial 838 Market Street, Wilmington, Delaware 19801 5
Corporation
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Capital Management
The Company did not repurchase any WSFS common stock during the fourth
quarter of 2005. For the year, the Company repurchased 719,500 of its shares at
an average price of $55.94 per share. At December 31, 2005, the Company had
650,000 shares remaining under its current share repurchase authorization, or
approximately 10% of its 6.6 million outstanding shares.
The ratio of tangible equity to assets was 6.33% at December 31, 2005.
The Tier 1 capital ratio was 12.31%, which is more than double the 6.00% level
required to be considered "well-capitalized" under regulatory definitions.
Tangible book value per share was $27.32 at December 31, 2005.
WSFS Financial Corporation is a $2.8 billion financial services
company. At December 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.
# # #
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[LOGO] WSFS Financial 838 Market Street, Wilmington, Delaware 19801 6
Corporation
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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,
2005 2005 2004 2005 2004
----------- ------------ ----------- ----------- ------------
Interest income:
Interest and fees on loans $ 29,616 $ 27,419 $ 21,897 $105,639 $ 78,101
Interest on mortgage-backed securities 6,924 6,445 5,442 25,687 20,326
Interest and dividends on investment securities 943 921 1,508 3,258 4,946
Other interest income 352 351 218 1,438 737
----------- ----------- ----------- ----------- -----------
37,835 35,136 29,065 136,022 104,110
----------- ----------- ----------- ----------- -----------
Interest expense:
Interest on deposits 7,267 5,674 3,450 21,690 9,395
Interest on Federal Home Loan Bank advances 9,254 7,955 5,978 30,659 23,430
Interest on federal funds purchased and
securities sold under agreements to repurchase 861 1,125 690 4,089 2,064
Interest on trust preferred borrowings 1,044 954 634 4,677 2,184
Interest on other borrowings 258 213 57 650 173
----------- ----------- ----------- ----------- -----------
18,684 15,921 10,809 61,765 37,246
----------- ----------- ----------- ----------- -----------
Net interest income 19,151 19,215 18,256 74,257 66,864
Provision for loan losses 1,006 225 847 2,582 3,217
----------- ----------- ----------- ----------- -----------
Net interest income after provision for
loan losses 18,145 18,990 17,409 71,675 63,647
----------- ----------- ----------- ----------- -----------
Noninterest income:
Credit/debit card and ATM income 4,274 3,907 3,220 15,049 12,137
Deposit service charges 2,750 2,676 2,373 10,091 9,389
Investment advisory income 641 651 591 2,519 2,262
Bank owned life insurance income 481 499 527 2,003 2,190
Loan fee income 488 516 506 1,999 2,182
Mortgage banking activities, net 104 106 (5) 391 439
Securities gains (losses) 4 (609) 40 (605) 249
Other income 757 838 760 3,206 3,102
----------- ----------- ----------- ----------- -----------
9,499 8,584 8,012 34,653 31,950
----------- ----------- ----------- ----------- -----------
Noninterest expenses:
Salaries, benefits and other compensation 8,795 9,061 8,019 35,172 30,723
Occupancy expense 1,339 1,290 1,244 5,168 4,666
Equipment expense 992 950 937 3,879 3,696
Data processing and operations expense 795 761 832 3,465 3,246
Marketing expense 703 689 803 2,745 2,329
Professional fees 755 610 1,058 2,416 2,496
Other operating expenses 2,775 2,789 2,212 10,032 8,543
----------- ----------- ----------- ----------- -----------
16,154 16,150 15,105 62,877 55,699
----------- ----------- ----------- ----------- -----------
Income from continuing operations before
minority interest and taxes 11,490 11,424 10,316 43,451 39,898
Less minority interest 11 48 32 133 190
----------- ----------- ----------- ----------- -----------
Income from continuing operations before taxes 11,479 11,376 10,284 43,318 39,708
Income tax provision 3,986 3,969 3,528 15,062 13,951
----------- ----------- ----------- ----------- -----------
Income from continuing operations 7,493 7,407 6,756 28,256 25,757
Income on wind-down of discontinued operations,
net of taxes - - 143 - 143
----------- ----------- ----------- ----------- -----------
Net income $ 7,493 $ 7,407 $ 6,899 $ 28,256 $ 25,900
=========== =========== =========== =========== ===========
Diluted earnings per share:
Income from continuing operations $ 1.09 $ 1.06 $ 0.90 $ 3.95 $ 3.39
Income on wind-down of discontinued operations,
net of taxes - - 0.02 - 0.02
----------- ----------- ----------- ----------- -----------
Net income $ 1.09 $ 1.06 $ 0.92 $ 3.95 $ 3.41
=========== =========== =========== =========== ===========
Weighted average shares outstanding for
diluted EPS 6,862,248 7,005,994 7,502,939 7,152,227 7,592,536
- --------------------------------------------------------------------------------------------------------------------------------
Performance Ratios:
Return on average assets (a) 1.09 % 1.10 % 1.10 % 1.06 % 1.10 %
Return on average equity (a) 16.87 16.15 13.99 14.99 13.54
Net interest margin (a)(b) 3.16 3.22 3.38 3.16 3.24
Efficiency ratio (c) 55.83 57.51 56.89 57.14 55.73
- --------------------------------------------------------------------------------------------------------------------------------
See "Notes"
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[LOGO] WSFS Financial 838 Market Street, Wilmington, Delaware 19801 7
Corporation
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WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
SUMMARY STATEMENT OF CONDITION:
(Dollars in thousands)
(Unaudited)
December 31, September 30, December 31,
2005 2005 2004
----------- ----------- --------------
Summary Statement of Condition:
Assets:
- -------
Cash and due from banks $ 59,251 $ 61,012 $ 61,328
Cash in non-owned ATMs 174,527 143,289 131,150
Investment securities (d)(e) 57,489 57,699 97,376
Other investments 46,466 45,934 44,477
Mortgage-backed securities (d) 620,323 593,496 524,144
Net loans (f)(g) 1,774,858 1,698,634 1,532,238
Loans held for sale (f) 436 2,199 3,229
Bank owned life insurance 54,193 53,713 52,190
Other assets 59,175 55,300 55,736
Loans, operating leases and
other assets of discontinued operations 34 5 1,088
----------- ----------- -----------
Total assets $ 2,846,752 $ 2,711,281 $ 2,502,956
=========== =========== ===========
Liabilities and Stockholders' Equity:
- -------------------------------------
Noninterest-bearing deposits $ 279,415 $ 266,598 $ 246,592
Interest-bearing deposits 914,516 883,799 805,590
----------- ----------- -----------
Total retail deposits 1,193,931 1,150,397 1,052,182
Jumbo CD's - non retail 40,567 44,433 44,903
Brokered CD's 211,738 207,340 137,877
----------- ----------- -----------
Total deposits 1,446,236 1,402,170 1,234,962
Federal Home Loan Bank advances 1,008,721 917,882 837,063
Other borrowings 186,287 191,755 217,093
Other liabilities 23,327 25,903 17,296
----------- ----------- -----------
Total liabilities 2,664,571 2,537,710 2,306,414
----------- ----------- -----------
Minority interest 206 200 239
Stockholders' equity 181,975 173,371 196,303
----------- ----------- -----------
Total liabilities, minority interest and
stockholders' equity $ 2,846,752 $ 2,711,281 $ 2,502,956
=========== =========== ===========
- ---------------------------------------------------------------------------------------------
Capital Ratios:
Equity to asset ratio 6.39 % 6.39 % 7.84 %
Tangible equity to asset ratio 6.33 6.33 7.80
Core capital (h) (required: 4.00%) 8.56 8.69 9.69
Tier 1 Capital (h) (required 4.00%) 12.31 12.46 14.41
Risk-based capital (h) (required: 8.00%) 13.38 13.64 15.34
- ---------------------------------------------------------------------------------------------
Asset Quality Indicators:
Nonperforming Assets:
Nonaccruing loans $ 3,410 $ 4,271 $ 4,396
Assets acquired through foreclosure 59 89 217
----------- ----------- -----------
Total nonperforming assets $ 3,469 $ 4,360 $ 4,613
=========== =========== ===========
Past due loans (i) $ 386 $ 207 $ 807
Allowance for loan losses $ 25,381 $ 24,933 $ 24,222
Ratio of nonperforming assets to total assets 0.12 % 0.16 % 0.18 %
Ratio of allowance for loan losses to total gross
loans (j) 1.41 1.45 1.56
Ratio of allowance for loan losses to nonaccruing
loans (k) 709 556 524
Ratio of quarterly net charge-offs to
average gross loans (a)(f) 0.13 0.05 0.18
- ---------------------------------------------------------------------------------------------
See "Notes"
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[LOGO] WSFS Financial 838 Market Street, Wilmington, Delaware 19801 8
Corporation
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WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
AVERAGE BALANCE SHEET
(Dollars in thousands)
(Unaudited)
Three months ended
--------------------------------------------------------------------------------------------------------
December 31, 2005 September 30, 2005 December 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 $ 580,554 $10,951 7.55 % $ 589,703 $10,450 7.09 % $ 508,948 $ 7,716 6.06 %
Residential real
estate loans 447,670 5,854 5.23 430,871 5,587 5.19 443,023 5,745 5.19
Commercial loans 485,242 8,632 7.19 451,532 7,554 6.79 370,370 4,971 5.55
Consumer loans 237,657 4,162 6.95 221,706 3,787 6.78 210,718 3,420 6.46
---------- ------- ---------- ------- ---------- -------
Total loans 1,751,123 29,599 6.83 1,693,812 27,378 6.53 1,533,059 21,852 5.78
Mortgage-backed
securities (d) 598,171 6,924 4.63 576,779 6,445 4.47 515,276 5,442 4.22
Loans held-for-sale (f) 1,061 17 6.41 2,462 41 6.66 2,799 45 6.43
Investment
securities (d)(e) 57,499 943 6.56 100,523 921 3.66 97,686 1,508 6.17
Other interest-earning
assets 48,736 352 2.87 48,155 351 2.89 46,993 218 1.85
---------- ------- ---------- ------- ---------- -------
Total interest-
earning assets 2,456,590 37,835 6.21 2,421,731 35,136 5.85 2,195,813 29,065 5.35
------- ------- -------
Allowance for loan losses (25,190) (25,215) (24,403)
Cash and due from banks 54,486 53,121 57,964
Cash in non-owned ATMs 143,226 138,543 125,190
Loans, operating leases
and other assets of
discontinued operations 203 367 1,422
Bank owned life insurance 53,894 53,389 51,852
Other noninterest-earning
assets 59,046 54,235 50,663
---------- ---------- ----------
Total assets $2,742,255 $2,696,171 $2,458,501
========== ========== ==========
Liabilities and
Stockholders' Equity:
Interest-bearing
liabilities:
Interest bearing
deposits:
Interest-bearing
demand $ 119,390 $ 101 0.34 $ 116,518 $ 71 0.24 $ 88,908 $ 50 0.22
Money market 223,358 1,475 2.62 183,279 1,025 2.22 107,765 421 1.55
Savings 256,047 922 1.43 268,880 265 0.39 295,088 284 0.38
Retail time deposits 292,503 2,281 3.09 287,925 2,085 2.87 277,275 1,784 2.56
---------- ------- ---------- ------- ---------- -------
Total interest-
bearing retail
deposits 891,298 4,779 2.13 856,602 3,446 1.60 769,036 2,539 1.31
Jumbo certificates of
deposit-nonretail 43,444 417 3.81 46,430 383 3.27 50,852 238 1.86
Brokered certificates
of deposit 212,550 2,071 3.87 206,331 1,845 3.55 131,333 673 2.04
---------- ------- ---------- ------- ---------- -------
Total interest-
bearing deposits 1,147,292 7,267 2.51 1,109,363 5,674 2.03 951,221 3,450 1.44
FHLB of Pittsburgh advances 946,375 9,257 3.83 894,331 7,958 3.48 849,734 5,989 2.76
Trust preferred borrowings 67,011 1,044 6.10 67,011 954 5.57 51,547 634 4.81
Other borrowed funds 124,810 1,119 3.59 166,268 1,338 3.22 167,681 747 1.78
Cost of funding
discontinued operations (3) (3) (11)
---------- ------- ---------- ------- ---------- -------
Total interest-bearing
liabilities 2,285,488 18,684 3.27 2,236,973 15,921 2.85 2,020,183 10,809 2.14
------- ------- -------
Noninterest-bearing
demand deposits 254,542 254,807 227,369
Other noninterest-
bearing liabilities 24,372 20,691 17,477
Minority interest 216 201 260
Stockholders' equity 177,637 183,499 193,212
---------- --------- ---------
Total liabilities and
stockholders' equity $2,742,255 $2,696,171 $2,458,501
========== ========== ==========
Excess of interest-
earning assets
over interest-bearing
liabilities $ 171,102 $ 184,758 $ 175,630
========== ========= =========
Net interest and
dividend income $19,151 $19,215 $18,256
======= ======= =======
Interest rate spread 2.94 % 3.00 % 3.21 %
==== ==== ====
Net interest margin 3.16 % 3.22 % 3.38 %
==== ==== ====
See "Notes"
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[LOGO] WSFS Financial 838 Market Street, Wilmington, Delaware 19801 9
Corporation
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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,
2005 2005 2004 2005 2004
----------------------------------------- ----------------------------
Stock Information:
Market price of common stock:
High $ 64.65 $ 59.26 $ 62.26 $ 64.65 $ 62.26
Low 57.55 54.01 50.23 49.80 44.43
Close 61.25 58.89 60.00 61.25 60.00
Book value per share 27.59 26.80 27.70
Tangible book value per share 27.32 26.53 27.55
Number of shares outstanding (000s) 6,596 6,470 7,086
-------------------------------------------------------------------------------------------- --------------------------
Other Financial Data:
One-year repricing gap to total assets (m) (0.57)% (0.86)% (0.81)%
Number of associates (FTEs) (n) 515 512 490
Number of branch offices 24 24 24
-------------------------------------------------------------------------------------------- --------------------------
Notes:
(a) Annualized.
(b) Computed on a fully tax-equivalent basis.
(c) Noninterest expense divided by (tax-equivalent) net interest income and
other 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).