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
FOURTH QUARTER AND YEAR-END RESULTS, AND INCREASES CASH
DIVIDEND 10%
Maple Glen, Pennsylvania - (July 28, 2004) Willow Grove
Bancorp, Inc. (the "Company") (Nasdaq/NMS: WGBC), the holding
company for Willow Grove Bank (the "Bank"), reported net income
of $1.5 million, or $0.16 diluted earnings per share, for the
quarter ended June 30, 2004. This compares to net income of $1.8
million, or $0.17 diluted earnings per share, for the quarter
ended June 30, 2003. Net income for the fiscal year ended June
30, 2004 was $6.1 million, or $0.62 diluted earnings per share
compared to net income of $7.5 million, or $0.71 diluted earnings
per share, for the prior year ended June 30, 2003. Mr. Frederick
A. Marcell Jr., President and CEO of the Company stated: "I'm
pleased to report the results of our second year as a fully
converted stock company. The historically low interest rate
environment that prevailed presented many challenges. We were
proactive in our response and, while we saw the effect of some
compression of our net interest spread and margin, we continued
to grow in line with our strategic business plan, increased our
fee income and moderated our non-interest expense. Of particular
note is our continued growth in core deposits as well as in new
retail customers. The Bank will proudly celebrate its 95th
anniversary in October 2004. As a result of our commitment to
customers and our community, we are well poised for the future.
Reflecting my confidence, our Board of Directors is announcing a
10% increase in the cash dividend."
The Company's total assets amounted to $921.6 million at
June 30, 2004, an increase of $76.5 million, or 9.0% from June
30, 2003. The increase in assets primarily resulted from an
increase in loans of $110.4 million, or 26.7%. The increase in
loans due in part to the purchase of wholesale loan packages
totaling $45.9 million in newly originated single-family
residential loans. In addition to these purchases of single-
family residential mortgage loans for our portfolio, we increased
our originations of commercial real estate and multi-family
residential mortgage loans, construction loans and home equity
loans. As a
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result, our single-family residential mortgage loans increased by
$49.2 million, or 37.3%, commercial real estate and multi-family
residential loans increased $25.0 million, or 16.0%, construction
loans increased $20.8 million, or 57.5%, and home equity loans
increased $18.9 million, or 25.8%, at June 30, 2004 compared to
June 30, 2003. Partially offsetting these increases were
declines of $2.9 million, or 13.9% in commercial business loans,
and $646,000, or 27.8% in consumer loans at June 30, 2004
compared to June 30, 2003. Securities available-for-sale and
held to maturity increased a combined $23.5 million, or 7.6% at
June 30, 2004 compared to June 30, 2003. Total liabilities
amounted to $817.8 million at June 30, 2004, an increase of $89.8
million from June 30, 2003. Deposits increased $16.5 million, or
2.8%, to $603.1 million at June 30, 2004. The Company's core
deposits, comprised of saving, checking and money market
accounts, increased $36.7 million, or 12.8%, to $323.6 million at
June 30, 2004 compared to June 30, 2003.
The $73.6 million, or 55.5% increase in borrowings from June
30, 2003 to June 30, 2004 was directly related to a decrease of
$20.3 million, or 6.8% in certificates of deposit as we utilized
additional advances from the Federal Home Loan Bank to extend
liability maturities at a lower cost compared to retail deposits
of similar duration as well as certain "match fundings" of
securities purchased in our efforts to enhance revenue. Total
stockholders' equity decreased $13.4 million to $103.8 million at
June 30,2004. The change in stockholders' equity was primarily
the result of the repurchase of 853,166 shares of Company stock
in the open market during the fiscal year at an aggregate cost of
$14.0 million, or an average of $16.46 per share. We completed
our initial 10% stock repurchase program in September 2003 and
have purchased 376,300 shares of 511,565 authorized shares under
our current 5% stock repurchase program.
Net interest income for the three-months and fiscal year
ended June 30, 2004 was $6.4 million, and $25.6 million,
respectively. This compares to $6.3 million and $27.7 million in
net interest income for the prior year comparable periods. For
the three-months ended June 30, 2004, net interest income
increased primarily as a result of increased balances in average
interest-earning assets, primarily due to increases in our loans
and securities portfolios, which more than offset the reduction
in average yield on interest-earning assets. For the fiscal year
ended June 30, 2004, net interest income declined primarily as a
result of the reduction in interest income, which was greater
than the reduction in interest expense. The
increases that we made in our holdings of loans and securities
during the year were not fully reflected in the average balances
for the fiscal year.
The Company's net interest margin decreased eight basis
points and 38 basis points, respectively, to 3.07% and 3.17%,
respectively, for the three and twelve months ended June 30, 2004
compared to the fourth quarter and fiscal year ended June 30,
2003. The decrease in net interest margin for the fiscal 2004
periods was primarily the result of a decline in the ratio of
average interest-earning assets to average interest-bearing
liabilities. The decline in net interest margin during the
fourth quarter of fiscal 2004 was partially the result of our
determination to accumulate additional liquidity in anticipation
of certain
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purchases of mortgage-backed securities which occurred
late in the fourth quarter. On a linked quarter basis, we
anticipate that our net interest margin will again increase in
the quarter ending September 30, 2004.
The Company's provision for loan losses decreased
$76,000 to $96,000 for the three months ended June 30, 2004
compared to $172,000 for the corresponding prior fiscal year
period. The provision for the three months ended June 30, 2004
was supplemented by net recoveries of $74,000. For the fiscal
year ended June 30, 2004, the provision for loan losses decreased
$608,000, or 58.8% to $426,000 compared to $1.0 million for the
similar prior fiscal year period. The decrease in provision for
the three-month and fiscal year ended June 30, 2004 compared to
the similar prior fiscal year periods was primarily related to
decreases in classified loans and an overall improvement in loan
quality. Classified assets decreased $10.3 million, or 77.4% to
$3.0 million at June 30, 2004 compared to $13.3 million at June
30, 2003. At June 30, 2004, our ratio of non-performing loans to
total loans was 0.62% compared to 0.88% at June 30, 2003. The
ratio of our allowance for loan losses to non-performing loans at
June 30, 2004 was 157.94% compared to 143.88% at June 30, 2003.
The Company's allowance for loan losses amounted to $5.2 million
at June 30, 2004 compared to $5.3 million at June 30, 2003.
Non-interest income decreased $555,000, or 36.3% to $975,000
for the three-month period ended June 30, 2004 compared to $1.5
million for the similar prior fiscal year period. Non-interest
income increased $491,000, or 14.1% to $4.0 million for the
fiscal year 2004 compared to $3.5 million for the fiscal 2003.
For the three months ended June 30, 2004 the decrease in non-
interest income compared to the fourth quarter of fiscal 2003
primarily reflects the absence of gains on loan sales. For the
2004 fiscal, non-interest income increased over fiscal 2003
primarily as a result of increases in service charges, fees and
the cash surrender value of bank owned life insurance. During
the three months ended June 30, 2004, partially due to our
recently implemented Overdraft Protection Plan ("OPP"), service
charges and fees increased $139,000, or 29.5% to $610,000
compared to the fourth quarter of fiscal 2003. During the 2004
fiscal year, service charges and fees increased $499,000, or
27.4% to $2.3 million. The increases in service charges for the
three and twelve-month periods were primarily the result of OPP,
increased retail sales of annuities and loan prepayment
penalties.
Non-interest expense increased $52,000, or 1.0% to $5.1
million for the three-month period ended June 30, 2004 compared
to $5.0 million for the similar prior year period. Non-interest
expense increased $1.3 million, or 7.0% to $20.4 million for the
fiscal year ended June 30, 2004 compared to $19.1 million for
fiscal 2003. Increases for the three and twelve month periods
ended June 30, 2004 were primarily a result of increases in
compensation and benefits expense. The increases in compensation
and benefits expense were due in part to the appreciation in the
market value of our common stock which increased the costs
recognized in fiscal 2004 by our Employee Stock Ownership Plan
("ESOP") and Recognition and Retention Plans ("RRP"). The
Company's ESOP expense increased $5,000 and $214,000, or 1.9% and
25.9% respectively, for the quarter and fiscal year ended June
30, 2004 compared to the similar prior year
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periods. RRP expense increased $9,000 and $241,000, to $201,000 and
$741,000 respectively, or 4.9% and 48.2% respectively, for the quarter
and fiscal year ended June 30, 2004 compared to RRP expense of
$192,000 and $500,000 for the quarter and fiscal year ended June
30, 2003. In addition to market price appreciation of the
Company's common stock, our RRP expense increased as a result of
the full year impact of RRP grants made during the fiscal year
ended June 2003. Non-interest expenses also increased in fiscal
2004 due to the operation of our 14th banking office for the full
fiscal year. This new retail office increased our compensation
costs by $143,000 and increased occupancy costs by $69,000
compared to fiscal 2003. Professional fees increased $71,000 and
$280,000, or 107.6% and 61.4%, respectively, during the quarter
and fiscal year ended June 30, 2004 compared to similar prior
fiscal year periods. Increases in professional fees were due
primarily to costs related to the Company's review of potential
expansion opportunities and general corporate matters.
The Company also announced that its Board of Directors, at
its July 27, 2004 meeting, declared a $0.11 cash dividend on each
share of common stock of the Company payable on August 20, 2004
to stockholders of record at the close of business on August 6,
2004.
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 14 offices located throughout
Montgomery, Bucks, and Philadelphia counties. Additional
information is available at: www.willowgrovebank.com.
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,
2003, and its other periodic and current reports filed thereafter
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 include changes in our loan portfolio, 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.
(Unaudited Selected Financial and Other Data)
At June 30, 2004 At June 30, 2003
---------------------------------------------
Selected Financial Condition Data: (Dollars in thousands, except per share data)
- ----------------------------------
<s> <c> <c>
Total assets $921,592 $845,124
Cash and cash equivalents 39,445 98,040
Loans receivable, net 524,189 413,799
Loans held for sale 1,136 5,293
Securities available-for-sale 234,207 291,885
Securities held to maturity 98,513 17,320
Deposits 603,115 586,643
FHLB advances 206,168 132,557
Stockholders' equity 103,776 117,130
Book value per diluted common share 10.77 11.20
Three Months Ended Twelve Months Ended
--------------------------------------------- ---------------------------------------------
June 30, 2004 June 30, 2003 June 30, 2004 June 30, 2003
--------------------------------------------- ---------------------------------------------
Selected Operating Statement Data: (Dollars in thousands, except per share data) (Dollars in thousands, except per share data)
- ----------------------------------
<s> <c> <c> <c> <c>
Interest income $10,179 $10,673 $40,628 $46,445
Interest expense 3,771 4,365 15,074 18,746
Net interest income 6,408 6,308 25,554 27,699
Provision for loan losses 96 172 426 1,034
Total non-interest income 975 1,530 3,983 3,492
Total non-interest expense 5,099 5,047 20,390 19,058
Income tax expense 652 806 2,610 3,610
Net income 1,536 1,813 6,111 7,489
Diluted earnings per share 0.16 0.17 0.62 0.71
Selected Other Data:
- --------------------
Average yield interest-earning assets (1)(2) 4.84 % 5.30 % 5.02 % 5.92 %
Average cost interest-bearing liabilities (1) 2.19 2.71 2.30 3.01
Average interest rate spread (1)(2) 2.65 2.59 2.72 2.91
Return on average assets (1) 0.71 0.87 0.73 0.93
Return on average equity (1) 5.71 6.02 5.56 6.10
Net interest margin (1)(2) 3.07 3.15 3.17 3.55
Ratio of non-performing assets
to total assets at period end 0.40 0.48 0.40 0.48
Ratio of non-performing loans
to total loans at period end 0.62 0.88 0.62 0.88
Ratio of allowance for loan loss
to total loans at period end 0.99 1.27 0.99 1.27
Ratio of allowance for loan loss
to non-performing loans at period end 157.94 143.88 157.94 143.88
Efficiency ratio 69.06 64.39 69.03 61.10
Full service banking offices at period end 14 14 14 14
____________________________________________
(1) Annualized for the three and twelve months ended June 30, 2004 and 2003
(2) The yield on municipal securities has been adjusted to a tax-equivalent
basis.
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WILLOW GROVE BANCORP, INC.
This press release contains financial information determined by
methods other than in accordance with accounting principles
generally accepted in the United States of America ("GAAP"). The
Company's management uses these non-GAAP measures in its analysis
of the Company's performance. These non-GAAP measures consist of
adjusting the yield on tax-exempt municipal securities to a tax-
equivalent basis. Management believes that presentation of
financial measures on a tax-equivalent basis provide useful
supplemental information that is essential to a proper
understanding of the operating results of the Company's core
business. These disclosures should not be viewed as a substitute
for operating results determined in accordance with GAAP, nor are
they necessarily comparable to non-GAAP performance measures,
which may be presented by other companies.
Consolidated, Condensed Statements of Financial Condition
(Dollars in thousands) At June 30, 2004 At June 30, 2003
----------------------------- ---------------- ----------------
Assets:
Total cash and cash equivalents $ 39,445 $ 98,040
Securities:
Available for sale 234,207 291,885
Held to maturity 98,513 17,320
Loans, net 524,189 413,799
Loans held for sale 1,136 5,293
Other assets 24,102 18,787
--------- ---------
Total assets $ 921,592 $ 845,124
========= =========
Liabilities and stockholders' equity:
Deposits $ 603,115 $ 586,643
Federal Home Loan Bank advances 206,168 132,557
Other liabilities 8,533 8,794
Total stockholders' equity 103,776 117,130
--------- ---------
Total liabilities and stockholders' equity $ 921,592 $ 845,124
========= =========
Consolidated, Condensed Statements of Operations
For the Three Months Ended For the Twelve Months Ended
June 30, June 30,
--------------------- ---------------------
(Dollars in thousands) 2004 2003 2004 2003
- -------------------------------- --------------------- ---------------------
<s> <c> <c> <c> <c>
Total interest income $ 10,179 $ 10,673 $ 40,628 $ 46,445
Total interest expense 3,771 4,365 15,074 18,746
--------- ---------- --------- ----------
Net interest income 6,408 6,308 25,554 27,699
Provision for loan losses 96 172 426 1,034
--------- ---------- --------- ----------
Non-interest income:
Service charges and fees 610 471 2,322 1,823
Realized gain on sale of loans 167 643 627 1,194
Realized gain on sale of securities 128 1,076 796 1,712
Other non-interest income 70 (660) 238 (1,237)
--------- ---------- --------- ----------
Total non-interest income 975 1,530 3,983 3,492
--------- ---------- --------- ----------
Non-interest expense:
Compensation and employee benefits 3,173 3,240 12,695 11,915
Occupancy 390 392 1,525 1,463
Professional fees 137 66 736 456
Other expense 1,399 1,349 5,434 5,224
--------- ---------- --------- ----------
Total non-interest expense 5,099 5,047 20,390 19,058
--------- ---------- --------- ----------
Income before income taxes 2,188 2,619 8,721 11,099
Income tax expense 652 806 2,610 3,610
--------- ---------- --------- ----------
Net Income $ 1,536 $ 1,813 $ 6,111 $ 7,489
========= ========== ========= ==========
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WILLOW GROVE BANCORP, INC.
Average Balance Sheet For The Three Months Ended
---------------------------------------------------------------
(Dollars in thousands) June 30, 2004 June 30, 2003
- ------------------------------------ ------------------------------ --------------------------------
Average Average Average Average
Balance Interest Yield/Co Balance Interest Yield/Cost
--------- --------- --------- ---------- -------- ----------
<s> <c> <c> <c> <c> <c> <c>
Total loans $ 495,429 $ 7,434 6.02% $ 458,890 $ 7,758 6.77%
Securities - taxable 276,033 2,410 3.51 265,456 2,577 3.89
Securities - nontaxable - adjusted to a
taxable equivalent yield 18,505 287 6.24 17,380 275 6.35
Other interest- earning assets 61,152 127 0.84 71,655 142 0.79
--------- -------- ---------- -------
Total interest- earning assets 851,119 10,258 4.84 813,381 10,752 5.30
Total deposits 517,285 2,113 1.64 511,188 2,956 2.32
Total borrowings 174,420 1,658 3.82 136,028 1,409 4.15
--------- -------- ---------- -------
Total interest- bearing liabilities 691,705 3,771 2.19 647,216 4,365 2.71
-------- ------- ------- -------
Net interest income/net interest spread $ 6,487 2.65% $ 6,387 2.59%
======== ======= ======= =======
Net interest margin(1) 3.07% 3.15%
======= =======
Ratio of average interest-earning assets
to average interest-bearing liabilities 123.05% 125.67%
======= =======
Tax equivalent adjustments $ 79 $ 79
======== =======
Net interest margin, no tax adjustment 3.03% 3.11%
======= =======
Average Balance Sheet For The Twelve Months Ended
---------------------------------------------------------------
(Dollars in thousands) June 30, 2004 June 30, 2003
- ------------------------------------ ------------------------------ --------------------------------
Average Average Average Average
Balance Interest Yield/Co Balance Interest Yield/Cost
--------- --------- --------- ---------- -------- ----------
<s> <c> <c> <c> <c> <c> <c>
Total loans $ 458,032 $ 29,123 6.36% $ 465,351 $ 33,167 7.13%
Securities - taxable 290,705 10,307 3.55 268,923 12,136 4.51
Securities - nontaxable - adjusted to a
taxable equivalent yield 18,024 1,143 6.34 17,325 1,090 6.29
Other interest- earning assets 48,430 372 0.77 38,789 378 0.97
--------- -------- ---------- --------
Total interest- earning assets 815,191 40,945 5.02 790,388 46,771 5.92
Total deposits 506,215 9,277 1.83 489,766 12,809 2.62
Total borrowings 149,955 5,797 3.87 132,307 5,937 4.49
--------- -------- ---------- --------
Total interest- bearing liabilities 656,170 15,074 2.30 622,073 18,746 3.01
-------- ------ -------- -------
Net interest income/ net interest spread $ 25,871 2.72% $ 28,025 2.91%
======== ====== ======== =======
Net interest margin(1) 3.17% 3.55%
====== =======
Ratio of average interest- earning assets
to average interest-bearing liabilities 124.23% 127.06%
====== =======
Tax equivalent adjustments $ 317 $ 326
======== ========
Net interest margin, no tax adjustment 3.13% 3.50%
====== =======
____________________________________________
(1) Net interest margin equals net interest income divided by average
interest-earning assets.
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WILLOW GROVE BANCORP, INC.
Loan Portfolio At At
June 30, 2004 June 30,2003
------------------------ ------------------------
Percentage of Percentage of
(Dollars in thousands) Amount Total Amount Total
- ---------------------------------------------------- ---------- ------------- ---------- -------------
<s> <c> <c> <c> <c>
Mortgage loans:
Single-family residential $ 181,049 34.15 % $ 131,821 31.40 %
Commercial real estate and multi-family residential 180,881 34.12 155,892 37.14
Construction 57,014 10.75 36,191 8.62
Home equity 91,848 17.32 72,990 17.39
------- ----- ------- -----
Total mortgage loans 510,792 96.35 396,894 94.55
Consumer loans 1,678 0.32 2,324 0.55
Commercial business loans 17,686 3.33 20,549 4.90
------- ----- ------- -----
Total loans receivable 530,156 100.00 % $ 419,767 100.00 %
Allowance for Loan Losses (5,220) (5,312)
Deferred loan fees (747) (656)
------- -------
Loans receivable, net $ 524,189 $ 413,799
======= =======
Deposits At At
June 30, 2004 June 30,2003
------------------------ ------------------------
Percent of Percent of
(Dollars in thousands) Amount Total Amount Total
- ---------------------------------------------------- ---------- ------------- ---------- -------------
<s> <c> <c> <c> <c>
Savings accounts $ 91,879 15.2 % $ 86,447 14.7 %
Money market accounts 37,232 6.2 37,531 6.4
Certificates of deposit 279,534 46.4 299,794 51.1
Interest-bearing checking accounts 118,946 19.7 93,290 15.9
Non-interest-bearing checking accounts 75,524 12.5 69,581 11.9
------- ----- ------- -----
Total $ 603,115 100.0 % $586,643 100.0 %
======= ===== ======= =====
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