Exhibit 99.1
Press Release FOR IMMEDIATE RELEASE
Contact: Frederick A. Marcell Jr., CEO
Christopher E. Bell, CFO
Telephone: 215-646-5405
WILLOW GROVE BANCORP, INC. ANNOUNCES
THIRD QUARTER RESULTS AND DECLARATION OF DIVIDEND
Maple Glen, Pennsylvania - (April 25, 2001) Willow Grove Bancorp, Inc.
(the "Company") (Nasdaq/NMS: WGBC), the stock-form holding company for Willow
Grove Bank (the "Bank"), announced third quarter results were adversely
affected by provisions for loan losses aggregating $2.6 million (pre-tax) with
respect to two commercial business loans. As a result of the provision, a net
loss of $508,000, or ($.11) diluted earnings per share, was reported for the
three months ended March 31, 2001 with a net loss of $656,000, or ($.14)
diluted earnings per share, was reported for the nine months ended March 31,
2001. Excluding the effect of the provision, net income would have been $1.1
million, or $.23 diluted earnings per share, for the three months ended March
31, 2001. This compares to net income of $1.2 million, or $.24 diluted
earnings per share for the three months ended March 31, 2000. Excluding the
effect of year-to-date provisions, net income would have been $3.6 million, or
$.73 diluted earnings per share, for the nine months ended March 31, 2001.
This compares to net income of $3.6 million, or $.72 diluted earnings per
share, for the nine months ended March 31, 2000.
The $2.6 million provision for loan losses in the third quarter,
includes a provision of $1.9 million relating to a $2.0 million commercial
business loan to a locally based company which builds-out ambulances. The
Company has taken certain steps to protect its security interests in certain
assets of the borrower, including taking control of its operations and
replacing its management. Based on information gathered to date, the Company
believes that the borrower may have been the subject of embezzlement. The
Company is vigorously attempting to secure control of the assets pledged to
secure the loan. President Frederick A. Marcell Jr. stated that, "it is
especially unfortunate to have the results of this illegal incident impact our
earnings at this particular time. However, the company is committed to work
diligently to preserve asset quality, retain a strong capital position, and
improve shareholder value." In addition, the Company's provision for loan
losses included approximately $635,000 (pre-tax) with respect to a commercial
business loan placed on non-accrual status during the quarter ended December
31, 2000. This borrower recently filed for bankruptcy.
Net interest income for the three-month and nine-month periods ended
March 31, 2001 was $4.9 million and $14.9 million, respectively. This
compares to the $5.0 million and $14.3 million for the respective prior year
periods. Net interest income remained relatively consistent primarily as a
result of increased average balances on interest-earning assets. However, the
result of greater increases on the average rates paid on interest-bearing
liabilities compared to the average rates earned on interest-earning assets,
together with the effect of the two non-performing commercial
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credits, contributed to the reduction in our net interest margin for the
three-month and nine-month periods of 39 basis points and 36 basis points,
respectively.
Non-interest income for the three-month and nine-month periods ended
March 31, 2001 increased $271,000, or 97.1%, and $697,000, or 85.5%,
respectively, when compared to similar periods of the prior year. These
increases were primarily a result of the Company's taking advantage of market
opportunities to realize gains upon the sale of loans and securities available
for sale as well as increases in general service charges and fees.
Non-interest expense for the three-month and nine-month periods ended
March 31, 2001 were $3.6 million and $10.3 million, respectively. This
compares to $3.1 million and $8.8 million, respectively, for the similar
periods of the prior year. Increases in the fiscal 2001 periods primarily were
the result of the costs associated with the opening of an operations center,
the expansion of the banking office network with two additional offices
(Rhawnhurst, Philadelphia County and North Wales, Montgomery County), and
professional fees.
Total assets amounted to $609.7 million at March 31, 2001, an increase
of $49.6 million, or 8.8%, from June 30, 2000. The increase in assets
resulted from net loans increasing $21.8 million, or 5.1%, and securities
available-for-sale increasing $53.0 million, or 75.1%. This increase was
partially a result of fixed-rate and adjustable-rate securities purchased
utilizing proceeds from a sale of an aggregate of $35.0 million of fixed-rate
loans during the year. Total liabilities amounted to $549.2 million at March
31, 2001, an increase of $49.7 million, or 10.0%, from June 30, 2000.
Deposits increased $24.4 million, or 5.4%, to $477.2 million while borrowings
increased $25.6 million, or 68.2%, to $63.1 million at March 31, 2001.
Stockholders' equity decreased $153,000 to $60.5 million at March 31, 2001
compared to $60.6 million at June 30, 2000. Changes in stockholders' equity
reflect the purchase of 140,000 additional shares of treasury stock as part of
the Company's Stock Buyback Program and appreciation of $2.6 million in
accumulated other comprehensive income (loss), primarily as a result of
declining interest rates.
President Marcell stated that the Bank continues to have capital well in
excess of regulatory requirements, and that he expects the Company to continue
its dividend policy and stock repurchase program in order to build shareholder
value.
The Company also announced that its Board of Directors, on April 24,
2001, declared a $.12 cash dividend on the common stock of the Company payable
on May 18, 2001 to stockholders of record at the close of business on May 4,
2001. This is the ninth regular quarterly dividend paid to shareholders since
the Company's inception on December 23, 1998 and represents a 9.1% increase
from the prior quarter.
The Company reported that during the third quarter, it had repurchased
66,500 shares of its common stock at an average price of $11.79. Under its
current buyback program, the Company has purchased a total of 162,500 shares
to date with the ability to purchase 70,551 additional shares.
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Willow Grove Bancorp, Inc. is the holding company for Willow Grove Bank,
a federally chartered, FDIC-insured savings bank. The Bank was founded in
1909 and conducts its business from its headquarters in Maple Glen,
Pennsylvania. Its banking office network now has eleven offices located
throughout Montgomery, Bucks, and Philadelphia counties. Additional banking
offices are located in Willow Grove, Dresher, Huntingdon Valley, Hatboro,
Warminster (2), Roslyn, Philadelphia (2), and North Wales.
This news release contains certain forward-looking statements. Forward-
looking statements can be identified by the fact that they do not relate
strictly to historical or current acts. They often include the words
"believe," "expect," "anticipate," "intend," "plan," "estimate" or words of
similar meaning, or future or conditional verbs such as "will," "would,"
"should," "could" or "may."
Forward-looking statements, by their nature, are subject to risks and
uncertainties. A number of factors many of which are beyond the Company's
control could cause actual conditions, events or results to differ
significantly from those described in the forward-looking statements. The
Company's reports filed from time-to-time with the Securities and Exchange
Commission, including the Company's Form 10-K for the year ended June 30,
2000, describe some of these factors, including general economic conditions,
changes in interest rates, deposit flows, the cost of funds, changes in credit
quality and interest rate risks associated with the Company's business and
operations. Other factors described in the Company's June 30, 2000 Form 10-K
include changes in competition, fiscal and monetary policies and legislation
and regulatory changes.
Forward-looking statements speak only as of the date they are made. The
Company does not undertake to update forward-looking statements to reflect
circumstances or events that occur after the date the forward-looking
statements are made or to reflect the occurrence of unanticipated events.
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WILLOW GROVE BANCORP, INC.
At March 31, 2001 At June 30, 2000
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Selected Financial
Condition Data: (Dollars in thousands, except per share data)
Total assets $609,681 $560,123
Cash and cash equivalents 16,857 14,681
Loans receivable, net 446,735 424,940
Loans available-for-sale 6,354 35,753
Securities available-for-sale 123,580 70,577
Deposits 477,245 452,857
Stockholders' equity 60,490 60,643
Book value per diluted common share 12.25 12.22
Three Months Ended Nine Months Ended
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March 31, 2001 March 31, 2000 March 31, 2001 March 31, 2000
__________________ _______________ ___________________ _________________
Selected Operating Statement Data: (Dollars in thousands, except per share data) (Dollars in thousands, except per share data)
Interest income $11,050 $10,058 $33,045 $28,291
Interest expense 6,128 5,084 18,128 13,953
Provision for loan losses 2,742 195 7,219 686
Total non-interest income 550 279 1,512 815
Total non-interest expense 3,550 3,121 10,302 8,790
Income tax (benefit) expense (312) 755 (436) 2,072
Net (loss) income (508) 1,182 (656) 3,605
Diluted (loss) earnings per share (0.11) 0.24 (0.14) 0.72
Selected Other Data:
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Average yield interest-earning assets 7.64% 7.66% 7.69% 7.56%
Average cost interest-bearing liabilities 5.12% 4.67% 5.12% 4.53%
Average interest rate spread 2.52% 2.99% 2.57% 3.03%
(Loss) return on average assets (0.34)% 0.88% (0.15)% 0.94%
(Loss) return on average equity (3.30)% 7.92% (1.37)% 8.08%
Net interest margin 3.40% 3.79% 3.47% 3.83%
Ratio of non-performing assets
to total assets at period end 0.77% 0.21% 0.77% 0.21%
Ratio of non-performing loans
to total loans 1.02% 0.26% 1.02% 0.26%
Ratio of loan loss reserves
to total loans at period end 0.94% 0.86% 0.94% 0.86%
Ratio of loan loss reserves
to non-performing loans at period end 92.09% 325.69% 92.09% 325.69%
Efficiency ratio 64.87% 59.41% 62.70% 58.01%
Full service banking offices at period end 11 11 11 11
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