1
EXHIBIT 99.1
FOR IMMEDIATE RELEASE: December 7, 1999
CONTACT: Martin Katz, Media: 302-571-7288 or katz.wsfs@dol.net
Mark Turner, Investor Relations: 302-571-7160 or
turnerm.wsfs@dol.net
WSFS ANNOUNCES INITIATIVE TO EXPAND ITS
HOME EQUITY LENDING BUSINESS
WSFS Financial Corporation (NASDAQ/NMS: WSFS), the parent company of Wilmington
Savings Fund Society, FSB (WSFS, the Bank) today announced an initiative to
expand its Home Equity Lending (HEL) business, building on the success of its
current subprime Home Equity Lending subsidiary, Community Credit Corporation
(CCC).
In expanding its HEL business, WSFS, through CCC will continue to directly
originate loans in its geographic footprint. Additionally, WSFS will establish
relationships outside of its footprint with mortgage brokers who will refer
prospects to WSFS. WSFS plans to directly underwrite and originate loans to
investor specifications, and sell substantially all the loans into the cash
market, generating fee income for the Bank. Generally, loans will be sold within
45 days of origination. WSFS also intends to retain a portion of those
originations which are consistent with the current standards of CCC -- generally
lower loan-to-value, higher credit quality subprime loans.
WSFS anticipates that over the next three years the pipeline of "held-for-sale"
loans and loans retained by WSFS will increase but will not be greater than 10%
of total assets. WSFS expects that the short term incremental impact on
operating results of this expansion will cost approximately $.05 to $.10 per
share, in total, over the next twelve months, primarily from the hiring of new
management and staff, the opening of new offices, and other costs associated
with the prudent expansion of this business line. WSFS expects the majority of
these expansion costs to be offset by the improved performance from other
business lines. WSFS also expects the HEL expansion itself to be cumulatively
accretive to earnings per share by the end of the second full year of operation.
An integral part of this expansion is attracting seasoned executive management
to CCC to lead the expansion. WSFS is pleased to announce that Jerry Schiano has
been appointed President and CEO of CCC. Mr. Schiano has 16 years of experience
in the consumer financial services industry, most recently at ContiMortgage in
nearby Horsham, PA, where, as Senior Vice President of Sales, he was responsible
for a division of over 300 employees and $200 million per month in loan
production. Mr. Schiano has also recruited to CCC Daniel J. Egan, former Chief
Financial Officer of ContiMortgage, who has 13 year's experience in the HEL
industry, and Carl Lutz, who has held various management
2
positions in the HEL industry over the past 12 years, to help execute the new
CCC business plan. Mr. Egan will serve as Chief Financial Officer and Mr. Lutz
will serve as Chief Operating Officer of CCC. To reflect the new management and
new business plan, CCC will be renamed Wilmington National Finance.
In 1994 WSFS started CCC in order to meet the credit needs of individuals and
families in WSFS' market who do not qualify for bank credit, yet have
substantial equity in their home. Since 1994, that business has grown to
approximately 2% of WSFS total assets and has returned approximately 2% on
assets, with negligible credit losses. Marvin N. Schoenhals, Chairman, President
and CEO of WSFS said "Our success with CCC over the last five years has
convinced us that the HEL business, conducted within a bank, and prudently
managed, can provide very attractive risk-adjusted returns. We are pleased to
have secured the experience and talents of Jerry Schiano and his team. They
bring not only a wealth of industry knowledge, but also significant contacts in
the industry with brokers, investors and potential new associates. Our
arrangement with Jerry and his team focuses them on the measured and profitable
expansion of this business. Furthermore, we believe internal expansion will
allow us to grow this business with the appropriate cost structure in a
well-controlled manner from the outset. With Jerry's leadership and the Bank's
infrastructure, access to lower-cost funding, and strong credit culture, we
believe CCC's success will be continued and expanded."
WSFS Financial Corporation is a $1.7 billion financial services Company. Its
principal subsidiary, Wilmington Savings Fund Society, FSB, operates 24 retail
banking offices in New Castle County and Dover, Delaware, as well as Chester,
Delaware and Montgomery Counties in Pennsylvania. Other operating subsidiaries
include WSFS Credit Corporation; Community Credit Corporation; and 838
Investment Group, Inc. For more information, please visit our website at
www.wsfsbank.com.
This release contains forward-looking statements, within the meaning of the
Private Securities Litigation Reform Act, that involve risk and uncertainty. It
should be noted that a variety of factors could cause actual results to differ
materially from the anticipated results or other expectations expressed in the
Company's forward-looking statements. The risks and uncertainties include, but
are not limited to, the growth of the economy, interest rate movements, timely
development of technology enhancements for its products and operating systems,
the impact of competitive products, services and pricing, customer-based
requirements, Congressional legislation, regulation and similar matters. Readers
of this release are cautioned not to place undue reliance on forward-looking
statements which are subject to influence by the named risk factors and
unanticipated future events. Actual results, accordingly, may differ materially
from management expectations. WSFS Financial Corporation does not undertake and
specifically disclaims any obligation, to publicly release the result of any
revisions that may be made to any forward-looking statements to reflect the
occurrence of anticipated or unanticipated events or circumstances after the
date of such statements.
# # #