Exhibit 99.1
[WILLOW GROVE BANCORP, INC. LETTERHEAD]
Press Release FOR IMMEDIATE RELEASE
Contact: Frederick A. Marcell Jr., CEO
Christopher E. Bell, CFO
Telephone: 215-646-5405
WILLOW GROVE BANCORP, INC. ANNOUNCES
SECOND QUARTER RESULTS, DECLARATION OF CASH
DIVIDEND, AND APPLICATION FOR THIRTEENTH BANKING OFFICE
Maple Glen, Pennsylvania - (January 23, 2002) Willow Grove
Bancorp, Inc. (the "Company") (Nasdaq/NMS: WGBC), the holding
company for Willow Grove Bank (the "Bank"), reported net income
of $1.3 million, or $.26 diluted earnings per share for the
quarter ended December 31, 2001. This compares to a net loss of
$1.4 million, or a diluted loss per share of $0.28 for the three-
month period ended December 31, 2000. Net income for the six
months ended December 31, 2001 was $2.5 million, or $0.51 diluted
earnings per share compared to a net loss of $147,000 or a $0.03
diluted loss per share for the comparable six months ended
December 31, 2000. The Company's results for the quarter ended
December 31, 2001 included a charge-off of $546,000 related to a
non-performing commercial business loan which first became
impaired in the fourth quarter of 2000. The results for the
quarter ended December 30, 2000, included a $4.2 million charge-
off with respect to such loan. Excluding such charge-offs and
realized gains on securities sales, net income would have been
$1.5 million, or $0.30 diluted earnings per share, for the
quarter ended December 31, 2001 compared to $1.2 million, or
$0.24 diluted earnings per share, for the quarter ended December
31, 2000.
Net interest income for the three-month and six-month
periods ended December 31, 2001 was $5.5 million and $11.0
million, respectively. This compares favorably to $4.9 million
and $10.0 million in net interest income for the respective prior
comparable periods. For the three-month and six-month periods
ended December 31, 2001, net interest income grew primarily as a
result of the combination of increased balances on average
interest-earning assets and a reduction in interest rates paid on
average interest-bearing liabilities greater than the reduction
in average interest rates charged on interest-earning assets.
The Company's net interest margin increased nine basis points to
3.49% for the three months ended December 31, 2001 from 3.40% for
the three months ended December 31, 2000. The increase in net
interest margin was a result of the increase in net interest
income more than offsetting a decline in the ratio of average
interest-earning assets to average interest- bearing liabilities.
However, for both the six-
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month periods ended December 31, 2001 and 2000 and the net interest
margin was 3.50% due largely to the impact of a reduction in the
ratio of average interest-earning assets to average interest-bearing
liabilities which offset a reduction in interest rates paid on
average interest-bearing liabilities.
The Company's provision for loan loss for the three months
and six months ended December 31, 2001 was $620,000 and $994,000,
respectively. This compares to $4.4 million and $4.5 million,
respectively, for the corresponding prior year period. The
provisions for loan losses during the quarter and six months
ended December 31, 2000 were due primarily to a $4.2 million
charge-off of the carrying value of one commercial business loan.
During the quarter ended December 31, 2001, the Company charged-
off the remaining carrying value of $546,000 with respect to this
loan as the result of a new appraisal received with respect to
the real property securing this loan. The new appraisal, which
was received in anticipation of a sale of the property by the
trustee in bankruptcy, indicated that, due to current economic
conditions as well as an expected prolonged bankruptcy
proceeding, the property's value had declined significantly from
the prior appraisal obtained by the Company in 1999. During the
quarter ended December 31, 2001, the Company also charged-off the
remaining carrying value of $112,000 of another commercial
business loan to a local construction company. Such charge-offs
during the quarter ended December 31, 2001 were partially offset
by a $44,000 recovery on a previously charged-off commercial
business loan. The provisions for loan losses are based
primarily upon the Company's regular review of the credit quality
of its loan portfolio, the net charge-offs during the period,
consideration of the continuing diversification of the loan
portfolio, as well as the impact of the current economic slowdown
and resultant increases in local unemployment rate. The
Company's allowance for loan loss as a percentage of its loan
portfolio increased to 1.00% at December 31, 2001 compared to
0.91% at June 30, 2001.
Non-interest income increased $340,000, or 54.5% to $958,000
for the three-month period ended December 31, 2001 compared to
$618,000 for the similar prior year period. Non-interest income
increased $532,000, or 56.1% to $1.5 million for the six-month
period ended December 31, 2001 compared to $962,000 for the
similar prior year period. The 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 increased $555,000, or 16.4% to $3.9
million for the three-month period ended December 31, 2001
compared to $3.4 million for the similar prior year period. Non-
interest expense increased $970,000, or 14.4% to $7.7 million for
the six-month period ended December 31, 2001 compared to $6.8
million for the similar prior year period. The increases were
primarily a result of general increases in compensation and
benefits, and costs associated with the operation of our twelfth
banking office opening in May 2001 in Southampton, Bucks County.
Additionally, other increased costs
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included corporate advertising, partially related to the
implementation of our new Online Banking product, and increased
deposit account service expenses primarily as a result of an increase
in core deposit accounts.
Total assets amounted to $643.7 million at December 31,
2001, an increase of 3.0% from June 30, 2001. The increase in
assets resulted from cash increasing $22.6 million primarily as a
result of accelerated prepayments on loans and mortgage-backed
securities combined with continued deposit growth. Net loans
declined $15.0 million or 3.3% from $454.2 million to $439.2
million due primarily to a decrease in the single-family
residential mortgage loan portfolio. Specifically, commercial
real estate and multi-family real estate loans increased $7.9
million or 6.1%, home equity loans increased $2.6 million or 3.5%
and other consumer loans increased $162,000 or 1.7% while single-
family residential decreased $19.9 million or 10.0%, construction
and commercial business loans decreased by $5.4 million or
19.6%, and $246,000 or 1.2%, respectively, in the six months
ended December 31, 2001. Total liabilities amounted to $580.8
million at December 31, 2001, an increase of 2.8% from June 30,
2001. Deposits increased $12.1 million or 2.4% to $509.1
million, with core deposits increasing $20.6 million or 11.7%,
while borrowings increased $4.8 million or 8.1% from June 30,
2001. Total stockholders' equity increased $2.5 million to $62.9
million at December 31, 2001. The change in stockholders' equity
was primarily the result of net income for the six months ended
December 31, 2001.
The Company also announced that its Board of Directors, at
its January 22, 2002 meeting, declared a $.13 cash dividend on
the common stock of the Company payable on February 15, 2002 to
stockholders of record at the close of business on February 1,
2002. This is the twelfth regular quarterly dividend paid to
shareholders since the Company's inception on December 23, 1998.
The Willow Grove Mutual Holding Company again waived its right to
receive this dividend having previously received non-objection
from the Office of Thrift Supervision.
Willow Grove Bancorp, Inc. is the holding company for Willow
Grove Bank, a federally chartered, well-capitalized, 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 twelve offices located throughout
Montgomery, Bucks, and Philadelphia counties which are located in
Willow Grove, Dresher, Huntingdon Valley, Hatboro, Warminster
(2), Roslyn, Philadelphia (2), North Wales, and Southampton.
The Bank anticipates the opening of its thirteenth full-
service banking office in Holland, Pennsylvania in April 2002,
pending OTS approval. Mr. Fred Marcell, President and Chief
Executive Officer of the Company, stated: "We are excited about
the prospects of this proposed new branch office and we are
pleased to have the opportunity to contribute to the well being
of communities like Holland. The proposed new branch office
reflects our continuing commitment to the implementation of our
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strategic plan."
As previously announced, the Boards of Directors of Willow
Grove Mutual Holding Company, Willow Grove Bancorp, Inc. and
Willow Grove Bank adopted a Plan of Conversion and Agreement and
Plan of Reorganization pursuant to which the Company and the Bank
intend to reorganize from the mutual holding company structure to
the stock holding company form of organization. The Company
anticipates that its reorganization will be completed during the
current quarter.
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
FACTS. 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,
2001, 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, 2001 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 December 31, 2001 At June 30, 2001
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Selected Financial Condition Data:
- ---------------------------------- (Dollars in thousands, except per share data)
Total assets $643,656 $625,148
Cash and cash equivalents 44,820 22,209
Loans receivable, net 439,162 454,199
Loans available-for-sale 5,002 2,644
Securities available-for-sale 138,871 130,358
Deposits 509,148 497,030
FHLB advances 64,728 59,885
Stockholders' equity 62,870 60,357
Book value per diluted common share 12.99 12.27
Three Months Ended Six Months Ended
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December 31, 2001 December 31, 2000 December 31, 2001 December 31, 2000
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Selected Operating Statement Data:
- ---------------------------------- (Dollars in thousands, except per (Dollars in thousands, except per
share data) share data)
Interest income $11,014 $11,114 $22,532 $21,994
Interest expense 5,536 6,192 11,571 11,999
Net interest income 5,478 4,922 10,961 9,995
Provision for loan losses 620 4,366 994 4,476
Total non-interest income 958 618 1,494 962
Total non-interest expense 3,938 3,383 7,722 6,752
Income tax expense(benefit) 626 (821) 1,247 (124)
Net income(loss) 1,252 (1,388) 2,492 (147)
Diluted earnings(loss) per share 0.26 (0.28) 0.51 (0.03)
Selected Other Data:
- ---------------------
Average yield interest-earning assets (1)(2) 7.03% 7.68% 7.22% 7.70%
Average cost interest-bearing liabilities (1)(2) 4.22% 5.22% 4.42% 5.12%
Average interest rate spread (1)(2) 2.81% 2.46% 2.80% 2.58%
Return(loss) on average assets (1)(2) 0.78% (0.95%) 0.78% (0.05%)
Return(loss) on average equity (1)(2) 7.95% (8.55%) 7.96% (0.46%)
Net interest margin (1)(2) 3.49% 3.40% 3.50% 3.50%
Ratio of non-performing assets
to total assets at period end 0.75% 1.70% 0.75% 1.70%
Ratio of non-performing loans
to total loans at period end 1.08% 2.18% 1.08% 2.18%
Ratio of loan loss reserves
to total loans at period end 1.00% 1.86% 1.00% 1.86%
Ratio of loan loss reserves
to non-performing loans at period end 92.06% 85.45% 92.06% 85.45%
Efficiency ratio 61.19% 61.06% 62.00% 61.62%
Full service banking offices at period end 12 11 12 11
(1) Annualized for the three months ended December 31, 2001 and 2000
(2) Annualized for the six months ended December 31, 2001 and 2000
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