1
----------- |
WSFS Financial | 500 Delaware Avenue, Wilminton, Delaware 19801
Corporation |
----------- |
PRESS RELEASE
FOR IMMEDIATE RELEASE
Contact: Stephen A. Fowle
April 26, 2007 (302) 571-6833
WSFS REPORTS 8% EPS INCREASE TO $1.15
WSFS Financial Corporation (NASDAQ/NMS: WSFS), the parent company of
Wilmington Savings Fund Society, FSB, reported quarterly net income of $7.8
million, or $1.15 per diluted share, an 8% increase over the first quarter of
2006 on a per share basis.
Highlights for the quarter include:
o Net interest margin increased 0.19% from the fourth quarter of
2006 to 3.25%
o Customer deposits were up 7% or $97.5 million from the fourth
quarter of 2006 or 29% on an annualized basis
o Noninterest income grew 19%, or $1.7 million over the first
quarter of 2006
o Asset quality remained strong with net charge-offs to total loans
of only 0.02% and nonperforming assets to total assets of 0.16%
o WSFS repurchased 381,500 shares of stock, or approximately 6% of
shares outstanding
o WSFS' Board of Directors increased the quarterly dividend by 25%
to $0.10 per share
Marvin N. Schoenhals, WSFS Chairman, said, "As we celebrate our 175th
anniversary of serving Delaware; we are very encouraged by our consistent
success in generating customer deposits. We continue to build franchise value
and to leverage the strong deposit growth of the past several years. We are also
pleased that our net interest margin continues to improve despite the
challenging interest rate pressure on the banking industry. Additionally, we are
delighted at the early performance of our new Trust Services department and look
to it becoming an effective source of fee income over the next several years."
(More)
2
First Quarter 2007 Financial Highlights
Net interest margin increased 0.19% from the prior linked quarter to 3.25%
The net interest margin of 3.25% for the first quarter of 2007
increased 0.19% from the fourth quarter of 2006. Net interest income for the
first quarter of 2007 was $21.1 million. This compares to $19.3 million reported
for the same quarter in 2006 and $20.1 million reported for the fourth quarter
of 2006. Compared to the fourth quarter of 2006, the net interest margin was
favorably affected by $909,000 (or 0.14% of margin) of additional income related
to reverse mortgages. Also during the first quarter of 2007, the net interest
margin was negatively impacted by a $335,000 (or 0.05% of margin) related to the
pre-payment of a $50.0 million FHLB borrowing. Adjusted for these two items, the
net interest margin increased 0.10% over the fourth quarter of 2006 as a result
of realignment of the balance sheet in favor of higher-yielding assets and an
improved funding mix.
Customer deposits were up 7% or $97.5 million from the fourth quarter of 2006
Total customer deposits (core deposits and customer time deposits)
improved to $1.4 billion at March 31, 2007, an increase of $197.5 million, or
16%, over balances at March 31, 2006. This growth reflects a strong increase of
$97.5 million, or 7% over balances at December 31, 2006.
During the quarter, nearly all deposit categories increased, including
non-interest bearing demand accounts, which increased $7.0 million, or 3% and
money market accounts, which increased $77.5 million, or 31%. The increase in
money market accounts was partially the result of a temporary investment of
$39.7 million as of quarter end. Without this temporary item, deposit growth was
still strong, increasing $57.8 million, or 4% above December 31, 2006 levels.
(More)
3
The following table summarizes the current customer deposit balances
and composition compared to historical periods.
At At At
(Dollars in thousands) Mar. 31, 2007 Dec. 31, 2006 Mar. 31, 2006
------------- ------------- -------------
Amount % Amount % Amount %
------ --- ------ --- ------ ---
Non-interest demand $ 283,295 20% $ 276,338 21% $ 274,983 22%
Interest bearing demand 148,946 10 146,719 11 141,972 11
Savings 219,904 15 226,853 17 245,011 20
Money market 324,191 23 246,645 18 238,003 19
---------- --- ---------- --- ---------- ---
Total core deposits 976,336 68 896,555 67 899,969 72
Customer time 464,864 32 447,151 33 343,762 28
---------- --- ---------- --- ---------- ---
Total customer deposits $1,441,200 100% $1,343,706 100% $1,243,731 100%
Net loans increase 8% from the first quarter of 2006
Net loans were $2.0 billion at March 31, 2007, an increase of $153.4
million, or 8% over March 31, 2006 and an increase of $12.3 million, or 1% over
December 31, 2006. Commercial and commercial real estate (CRE) loans increased
$156.5 million, or 13% over March 31, 2006 and $22.5 million, or 2% over
December 31, 2006 and continue to drive overall portfolio growth.
During the first quarter of 2007 loan growth was affected by planned
decreases in residential loans to realign the balance sheet toward higher
yielding assets and several large anticipated commercial loan pay-offs. Mark A
Turner, President and Chief Executive Officer of WSFS, said, "We continue to see
fundamental strength in commercial lending, a key component of our corporate
strategy. Commercial balances overcame approximately $50 million in payoffs to
continue growth. Additionally, credit quality remains at historically strong
levels and net charge-offs registered a very low 0.02% of total loans."
The following table summarizes the current loan balances and
composition compared to historical periods.
At At At
(Dollars in thousands) Mar. 31, 2007 Dec. 31, 2006 Mar. 31, 2006
------------- ------------- -------------
Amount % Amount % Amount %
------ --- ------ --- ------ ---
Commercial and CRE $1,327,436 65% $1,304,984 64% $1,170,919 62%
Residential 469,049 23 476,915 24 476,791 25
Consumer 262,270 13 264,307 13 256,203 14
Allowance for loan losses (27,629) (1) (27,384) (1) (26,143) (1)
---------- --- ---------- --- ---------- ---
Net Loans $2,031,126 100% $2,018,822 100% $1,877,770 100%
(More)
4
Asset quality remained strong with net charge-offs to total loans of 0.02%
The Company recorded a provision for loan losses of $371,000 in the
first quarter of 2007 compared to $1.0 million in the fourth quarter of 2006 and
$688,000 in the first quarter of 2006. The current provision exceeded net
charge-offs for the quarter. The decreased provision reflects the low level of
net charge-offs and slower loan growth. The ratio of allowance for loan losses
to total loans is 1.34%, consistent with the December 31, 2006 level.
Asset quality statistics continue at historically strong levels.
Annualized net charge-offs in the first quarter of 2007 were 0.02% as a
percentage of average loans compared to annualized net charge-offs of 0.08% for
the fourth quarter of 2006 and annualized net recoveries of 0.02% for the first
quarter of 2006. The balances of nonperforming assets increased slightly in
comparison to the fourth quarter of 2006. Nonperforming assets as a percentage
of assets were 0.16% at March 31, 2007 compared to 0.14% at December 31, 2006
and 0.10% at March 31, 2006. Delinquencies in the mortgage portfolio, including
in the small amount of sub-prime loans remaining in the portfolio, also remain
at low levels. WSFS has not been subject to any mortgage loan repurchases from
the secondary market in recent history.
Noninterest income grew $1.7 million, or 19% over the first quarter of 2006
During the first quarter of 2007, the Company recorded noninterest
income of $10.7 million, which was $1.7 million, or a solid 19% higher than the
first quarter of 2006. Noninterest income declined by $345,000, or 3% when
compared to the fourth quarter of 2006. Although almost all noninterest income
categories showed improvements compared to the first quarter of 2006, the
majority of the increase over the first quarter 2006 was due to a $1.0 million
increase in deposit service charges and a $323,000 increase in credit/debit card
and ATM income. Deposit service charges continue to benefit from an increase in
deposit accounts and additional fee-based services offered by WSFS. The increase
in credit/debit card and ATM income was due to higher rates earned on cash in
non-owned ATMs. During the first quarter of 2007, fee revenues represented 33%
of total revenues compared to 32% during the first quarter of 2006.
(More)
5
The decline in noninterest income when compared to the fourth quarter
of 2006 was mainly attributable to seasonal decreases in credit/debit card and
ATM income and deposit service charges of $352,000 and $266,000, respectively.
Noninterest expense increase reflects growth and investment in franchise
Noninterest expenses for the first quarter of 2007 totaled $19.4
million, which was $3.1 million, or 19% greater than the first quarter of 2006
and $805,000, or 4% greater than the fourth quarter of 2006. This increase over
the first quarter of 2006 was mainly related to the Company's expansion
including the opening of three branch offices, three branch
renovations/relocations, the continued growth of the Wealth Management Division
and the formation of a reverse mortgage business unit. This growth is reflected
in higher compensation, occupancy and equipment expenses. The number of
full-time equivalent Associates increased from 529 in the first quarter of 2006
to 564 in the first quarter of 2007. In March the Company moved into its new
corporate headquarters in the WSFS Bank Center. The comparison to the first
quarter of 2006 is also affected by a $322,000 reduction in a legal contingency
reserve related to reverse mortgages in the first quarter of 2006.
The increase in expenses, compared to the fourth quarter of 2006 were
similar to the year over year increase.
WSFS repurchased 381,500 shares of stock, or approximately 6% of shares
outstanding
During the first quarter of 2007, the Company continued its history of
returning earnings to shareholders by repurchasing 381,500 shares of common
stock at an average price of $67.27 per share.
The ratio of tangible equity to assets was 6.67% at March 31, 2007. The
Tier 1 capital ratio was 11.70%, nearly double the 6.00% level required to be
considered "well-capitalized" under regulatory definitions. Tangible book value
per share was $31.28 at March 31, 2007.
(More)
6
WSFS' Board of Directors increased the quarterly dividend by 25% to $0.10 per
share
The Board of Directors has declared a quarterly cash dividend of $0.10
per share. This dividend represents an increase of $0.02, or 25% over the
previous quarterly dividend. This dividend will to be paid on June 1, 2007, to
shareholders of record as of May 11, 2007.
WSFS Financial Corporation is a $3 billion financial services company.
Its principal subsidiary, Wilmington Savings Fund Society, FSB, currently
operates 29 retail banking offices in all three counties in Delaware, as well as
Chester and Delaware Counties in Pennsylvania, providing full banking services
under the WSFS Bank brand, and wealth management and personal trust services
under Wilmington Advisors, a division of WSFS Bank. Other subsidiaries include:
WSFS Investment Group, Inc., Montchanin Capital Management, Inc. and WSFS Reit,
Inc. WSFS, celebrating its 175th anniversary, is one of the ten oldest banks
continuously operating under the same name in the United States. For more
information, please visit the Bank's website at http://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.
# # #
(More)
7
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS
STATEMENT OF OPERATIONS
(Dollars in thousands, except per share data)
(Unaudited)
Three months ended
------------------------------------
March 31, December 31, March 31,
2007 2006 2006
---------- ---------- ----------
Interest income:
Interest and fees on loans $ 38,469 $ 38,624 $ 32,096
Interest on mortgage-backed securities 6,237 6,455 7,332
Interest and dividends on investment securities 1,714 929 635
Other interest income 668 693 414
---------- ---------- ----------
47,088 46,701 40,477
---------- ---------- ----------
Interest expense:
Interest on deposits 14,388 13,025 8,177
Interest on Federal Home Loan Bank advances 8,922 10,747 10,743
Interest on trust preferred borrowings 1,177 1,194 1,017
Interest on other borrowings 1,541 1,645 1,237
---------- ---------- ----------
26,028 26,611 21,174
---------- ---------- ----------
Net interest income 21,060 20,090 19,303
Provision for loan losses 371 1,036 688
---------- ---------- ----------
Net interest income after provision for loan losses 20,689 19,054 18,615
---------- ---------- ----------
Noninterest income:
Credit/debit card and ATM income 4,483 4,835 4,160
Deposit service charges 3,602 3,868 2,577
Investment advisory income 594 578 630
Loan fee income 561 532 421
Bank owned life insurance income 557 565 488
Mortgage banking activities, net 72 6 22
Other income 864 694 740
---------- ---------- ----------
10,733 11,078 9,038
---------- ---------- ----------
Noninterest expenses:
Salaries, benefits and other compensation 10,850 10,567 9,192
Occupancy expense 1,832 1,474 1,300
Equipment expense 1,246 1,174 982
Data processing and operations expense 943 879 857
Marketing expense 742 696 613
Professional fees 653 721 257
Other operating expenses 3,092 3,042 3,041
---------- ---------- ----------
19,358 18,553 16,242
---------- ---------- ----------
Income before minority interest and taxes 12,064 11,579 11,411
Less minority interest - 11 16
---------- ---------- ----------
Income before taxes 12,064 11,568 11,395
Income tax provision 4,283 3,969 4,054
---------- ---------- ----------
Net income $ 7,781 $ 7,599 $ 7,341
========== ========== ==========
Diluted earnings per share:
Net income $ 1.15 $ 1.10 $ 1.06
========== ========== ==========
Weighted average shares outstanding for diluted EPS 6,758,669 6,904,313 6,904,774
==============================================================================================
Performance Ratios:
Return on average assets (a) 1.06% 1.02% 1.03%
Return on average equity (a) 14.75 14.25 15.75
Net interest margin (a)(b) 3.25 3.06 3.04
Efficiency ratio (c) 60.37 58.99 56.75
Noninterest income as a percentage of total revenue (b) 33.47 35.22 31.58
==============================================================================================
See "Notes"
8
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
SUMMARY STATEMENT OF CONDITION:
(Dollars in thousands)
(Unaudited)
March 31, December 31, March 31,
2007 2006 2006
---------- ---------- ----------
Summary Statement of Condition:
Assets:
- ------
Cash and due from banks $ 75,461 $ 73,989 $ 58,589
Cash in non-owned ATMs 150,270 166,092 159,042
Investment securities (d)(e) 28,153 54,491 58,694
Other investments 35,347 41,615 46,693
Mortgage-backed securities (d) 500,069 516,711 630,187
Net loans (f)(g) 2,031,126 2,018,822 1,877,770
Loans held for sale (f) 1,211 919 1,503
Bank owned life insurance 55,839 55,282 54,681
Other assets 70,062 69,475 65,702
---------- ---------- ----------
Total assets $2,947,538 $2,997,396 $2,952,861
========== ========== ==========
Liabilities and Stockholders' Equity:
- ------------------------------------
Noninterest-bearing deposits $ 283,295 $ 276,338 $ 274,983
Interest-bearing deposits 1,157,905 1,067,368 968,748
---------- ---------- ----------
Total customer deposits 1,441,200 1,343,706 1,243,731
Other jumbo CDs 99,593 111,388 79,122
Brokered deposits 292,470 301,254 244,301
---------- ---------- ----------
Total deposits 1,833,263 1,756,348 1,567,154
Federal Home Loan Bank advances 693,918 784,028 998,533
Other borrowings 193,239 218,651 176,379
Other liabilities 27,931 26,256 26,374
---------- ---------- ----------
Total liabilities 2,748,351 2,785,283 2,768,440
---------- ---------- ----------
Minority interest 45 54 72
Stockholders' equity 199,142 212,059 184,349
---------- ---------- ----------
---------- ---------- ----------
Total liabilities, minority interest and stockholders' equity $2,947,538 $2,997,396 $2,952,861
========== ========== ==========
====================================================================================================
Capital Ratios:
Equity to asset ratio 6.76% 7.07% 6.24%
Tangible equity to asset ratio 6.67 7.00 6.17
Core capital (h) (required: 4.00%; well-capitalized: 5.00%) 9.00 9.25 8.51
Tier 1 Capital (h) (required: 4.00%; well-capitalized: 6.00%) 11.70 12.42 12.18
Risk-based capital (h) (required: 8.00%; well-capitalized: 10.00%) 12.91 13.54 13.18
====================================================================================================
Asset Quality Indicators:
Nonperforming Assets:
Nonaccruing loans $ 4,230 $ 3,832 $ 2,891
Assets acquired through foreclosure 388 388 44
---------- ---------- ----------
Total nonperforming assets $ 4,618 $ 4,220 $ 2,935
========== ========== ==========
Past due loans (i) $ 89 $ 251 $ 277
Allowance for loan losses $ 27,629 $ 27,384 $ 26,143
Ratio of nonperforming assets to total assets 0.16% 0.14% 0.10%
Ratio of allowance for loan losses to total gross
loans (j) 1.34 1.34 1.37
Ratio of allowance for loan losses to nonaccruing
loans (k) 648 705 863
Ratio of quarterly net charge-offs (recoveries)
to average gross loans (a)(f) 0.02 0.08 (0.02)
====================================================================================================
See "Notes"
9
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
AVERAGE BALANCE SHEET
(Dollars in thousands)
(Unaudited)
Three months ended
--------------------------------------------------------------------------------------------------------
March 31, 2007 December 31, 2006 March 31, 2006
---------------------------------- ----------------------------------- --------------------------------
Average Interest & Yield/ Average Interest & Yield/ Average Interest & Yield/
Balance Dividends Rate (a)(b) Balance Dividends Rate (a)(b) Balance Dividends Rate (a)(b)
----------- --------- ----------- ----------- -------- ----------- --------- -------- ----------
Assets:
Interest-earning assets:
Loans: (f) (l)
Commercial real
estate loans $ 655,669 $13,692 8.35% $ 656,780 $13,938 8.49% $ 605,189 $11,760 7.77%
Residential real
estate loans 471,613 6,723 5.70 479,412 6,760 5.64 466,329 6,279 5.39
Commercial loans 651,510 13,063 8.19 627,892 12,888 8.21 525,339 9,645 7.55
Consumer loans 266,368 4,978 7.58 264,210 5,021 7.54 250,856 4,406 7.12
---------- ------- ---------- ------- ---------- -------
Total loans 2,045,160 38,456 7.58 2,028,294 38,607 7.67 1,847,713 32,090 7.01
Mortgage-backed
securities (d) 509,224 6,237 4.90 530,385 6,455 4.87 623,551 7,332 4.70
Loans held-for-sale (f) 1,090 13 4.77 938 17 7.25 594 6 4.04
Investment
securities (d)(e) 32,757 1,714 20.93 54,712 929 6.79 58,060 635 4.37
Other interest-earning
assets 37,851 668 7.16 47,777 693 5.75 48,690 414 3.45
---------- ------- ---------- ------- ---------- -------
Total interest-
earning assets 2,626,082 47,088 7.21 2,662,106 46,701 7.06 2,578,608 40,477 6.32
------- ------- -------
Allowance for loan losses (27,708) (27,093) (25,515)
Cash and due from banks 67,087 66,701 51,364
Cash in non-owned ATMs 142,103 151,675 144,436
Bank owned life insurance 55,473 56,357 54,365
Other noninterest-
earning assets 65,758 60,919 59,986
---------- ---------- ----------
Total assets $2,928,795 $2,970,665 $2,863,244
========== ========== ==========
Liabilities and
Stockholders' Equity:
Interest-bearing liabilities:
Interest bearing deposits:
Interest-bearing demand $ 135,464 $ 270 0.81 $ 126,509 $ 254 0.80 $ 123,805 $ 140 0.46
Money market 315,525 3,088 3.97 247,489 2,318 3.72 226,229 1,714 3.07
Savings 219,912 446 0.82 233,392 615 1.05 247,152 511 0.84
Customer time deposits 456,523 5,216 4.63 434,395 4,942 4.51 322,184 2,688 3.38
---------- ------- ---------- ------- ---------- -------
Total interest-bearing
customer deposits 1,127,424 9,020 3.24 1,041,785 8,129 3.10 919,370 5,053 2.23
Other jumbo certificates
of deposit 102,856 1,355 5.34 100,667 1,365 5.38 60,081 663 4.48
Brokered deposits 298,247 4,013 5.46 261,714 3,531 5.35 226,022 2,461 4.42
---------- ------- ---------- ------- ---------- -------
Total interest-
bearing deposits 1,528,527 14,388 3.82 1,404,166 13,025 3.68 1,205,473 8,177 2.75
FHLB of Pittsburgh advances 697,253 8,922 5.12 863,177 10,747 4.87 1,003,350 10,743 4.28
Trust preferred borrowings 67,011 1,177 7.03 67,011 1,194 6.97 67,011 1,017 6.07
Other borrowed funds 131,232 1,541 4.70 136,653 1,645 4.82 121,822 1,237 4.06
---------- ------- ---------- ------- ---------- -------
Total interest-
bearing liabilities 2,424,023 26,028 4.30 2,471,007 26,611 4.31 2,397,656 21,174 3.53
------- ------- -------
Noninterest-bearing
demand deposits 267,354 258,702 257,963
Other noninterest-
bearing liabilities 26,399 27,665 21,022
Minority interest 49 51 154
Stockholders' equity 210,970 213,240 186,449
----------- ----------- ----------
Total liabilities and
stockholder' equity $2,928,795 $2,970,665 $2,863,244
=========== =========== ==========
Excess of interest-
earning assets over
interest-bearing
liabilities $ 202,059 $ 191,099 $ 180,952
========== ========== ==========
Net interest and
dividend income $21,060 $20,090 $19,303
======= ======= =======
Interest rate spread 2.91% 2.75% 2.79%
======= ======== ========
Net interest margin 3.25% 3.06% 3.04%
======= ======== ========
See "Notes"
10
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
(Dollars in thousands, except per share data)
(Unaudited)
Three months ended
------------------------------------------
March 31, December 31, March 31,
2007 2006 2006
------------------------------------------
Stock Information:
Market price of common stock:
High $ 70.69 $ 68.00 $ 64.50
Low 61.31 60.35 60.00
Close 64.48 66.93 62.83
Book value per share 31.70 31.93 27.91
Tangible book value per share 31.28 31.58 27.56
Number of shares outstanding (000s) 6,283 6,642 6,606
===============================================================================================
Other Financial Data:
One-year repricing gap to total assets (m) (1.74)% (1.03)% 0.04%
Weighted average duration of the MBS portfolio 2.9 years 2.9 years 3.2 years
Unrealized losses on securities available-for-sale,
net of taxes $(6,009) $(8,012) $(14,752)
Number of associates (FTEs) 564 573 529
Number of branch offices 28 27 25
Number of WSFS owned ATMs 309 313 263
===============================================================================================
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.