<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>3
<FILENAME>ex99.txt
<DESCRIPTION>PRESS RELEASE
<TEXT>
NEWS RELEASE
WSFS FINANCIAL CORPORATION
838 Market Street, Wilmington, DE 19899
For Release: April 22, 2003 Contact: Mark A. Turner
(302) 571-7160
WSFS ANNOUNCES 1Q '03 EARNINGS of $5.08 PER SHARE
WSFS Financial Corporation (NASDAQ/NMS: WSFS), the parent company of
Wilmington Savings Fund Society, FSB, reported net income of $45.3 million, or
$5.08 per diluted share, for the three months ended March 31, 2003. This
compares to net income of $9.4 million, or $1.01 per diluted share, for the
first quarter of 2002. Earnings for the first quarter of 2003 include a $41.1
million gain on the sale of the Corporation's subprime mortgage banking
subsidiary, Wilmington Finance, Inc. (WF). Excluding gains on the sale of
businesses, income from continuing operations was $4.1 million, or $0.46 per
diluted share. However, included in income from continuing operations were
certain charges incurred in connection with the sale of WF, which amounted to
$1.3 million pretax, $860,000 after tax, or $0.10 per share.
In addition to the gain on the sale of WF, highlights for the quarter
included: (i) growth in loans of $60.4 million, or 6% over December 31, 2002;
(ii) continued strong and stable asset quality with the ratio of nonperforming
assets (NPA) to total assets of 40 basis points at March 31, 2003, and
annualized net chargeoffs of only 10 basis points for the first quarter of 2003;
(iii) growth in core deposits (non CD) of $18.5 million, or 3% over December 31,
2002; and (iv) the successful completion of the Bank's 18-month long
re-engineering efforts, TOPS.
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<PAGE>
2
The following is a brief discussion of the first quarter 2003 results.
Gain on Businesses Held-For-Sale
--------------------------------
On January 2, 2003 the Corporation completed the sale of its
majority-owned subprime mortgage banking subsidiary, Wilmington Finance, Inc.
This sale resulted in an after-tax gain of $41.1 million, or $4.61 per diluted
share, which is reported as a gain on sale of businesses held-for-sale, net of
tax. In connection with the sale, the Corporation also incurred $1.3 million of
expenses which included a special contribution to the recently formed WSFS
Foundation, established in late 2002 to benefit the well being of the community
WSFS serves, and special associate compensation. These expenses were recorded as
a charge against continuing operations in accordance with generally accepted
accounting principles.
In addition, in the first quarter of 2003, the Corporation recorded an
after tax gain of $117,000, or $0.01 per diluted share, related to the prior
sale of the C1FN/Everbank segment based on the release of certain escrowed sale
proceeds.
Continuing Operations
---------------------
Net Interest Income
Net interest income for the first quarter of 2003 was $14.2 million.
This compares to $19.0 million for the same quarter in 2002; however, the first
quarter of 2002 included $7.0 million in interest income from reverses
mortgages. Substantially all of WSFS' reverse mortgages were sold effective
October 1, 2002 at a significant gain. Net interest income was $12.0 million for
the fourth quarter of 2002. The net interest margin percentage of 3.69% for the
first quarter of 2003 declined from 3.78% for the fourth quarter of 2002 and was
adversely affected by the liquidity generated by the sale of the aforementioned
business components, share repurchases, and the current historically low
interest rate environment, in which loan and investment rates are able to
reprice down by more than funding costs. This was partially mitigated by WSFS'
significant growth in loans and the continuing positive effect of the change in
WSFS' deposit mix.
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3
Loans and Asset Quality
Net loans grew $60.4 million, or 6%, during the first quarter of 2003
to $1.1 billion. Loan volume reflects the continued strong growth in commercial
and commercial real estate (CRE) loans of $29.9 million, or 6% from balances at
December 31, 2002. Residential real estate loans grew by $28.9 million, or 7%,
during the same period. The table below summarizes the current loan composition
and changes in composition.
<TABLE>
<CAPTION>
At At Quarterly Change
(Dollars in thousands) March 31, 2003 December 31, 2002 $ %
--------------- ------------------ ------- -----
Amount % Amount %
------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Commercial and CRE $ 525,273 46% $ 495,374 46% $ 29,899 6%
Residential 448,157 40 419,274 39 28,883 7
Consumer 184,750 16 182,674 17 2,076 1
Allowance for loan losses (21,941) (2) (21,452) (2) (489) 2
----------- ---- ----------- ---- --------
Net Loans $ 1,136,239 100% $ 1,075,870 100% $ 60,369 6
=========== =========== ========
</TABLE>
Non-performing assets (NPAs) totaled $7.8 million at March 31, 2003, an
increase from the $7.4 million at December 31, 2002, but improved from the $8.6
million at March 31, 2002. Including the growth in assets, NPA's as a percentage
of total assets improved to 0.40% at March 31, 2003 compared to 0.44% at the end
of 2002 and 0.46% at March 31, 2002. Annualized net charge-offs in the first
quarter 2003 were 0.10% of average loans compared to 0.29% for the last quarter
and 0.51% for the same quarter in 2002. The allowance for loan losses was 1.89%
of total loans at March 31, 2003 and the coverage ratio (ratio of allowance to
non-accruing loans) was 317%.
Deposits
Retail deposits (excluding nonretail jumbo deposits) decreased $5.2
million during the first quarter to $866.9 million at March 31, 2003. This
decrease included a $23.6 million decline in retail time deposits reflecting the
Bank's liability management strategy to allow more price-sensitive deposits to
run-off in favor of attracting less price- sensitive core deposits and the use
of less costly wholesale funding. As a result, this CD decline was partially
offset by healthy growth in savings, demand and money market accounts of $18.5
million, or 3% during the quarter. The following table summarizes the current
retail deposit composition and changes in composition.
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4
<TABLE>
<CAPTION>
At At Quarterly Change
(Dollars in thousands) March 31, 2003 December 31, 2002 $ %
-------------- ----------------- - -
Amount % Amount %
------ - ------ -
<S> <C> <C> <C> <C> <C> <C>
Non-interest demand $ 185,946 21% $ 182,957 21% 2,989 2%
Savings 304,846 36 292,917 33 11,929 4
Money market and int. demand 112,794 13 109,259 13 3,535 3
Retail time 263,290 30 286,939 33 (23,649) (8)
---------- --- ---------- --- ---------
Retail deposits $ 866,876 100% $ 872,072 100% $ (5,196) (1)
========== ========== =========
</TABLE>
Noninterest Income
During the first quarter 2003, the Corporation recorded noninterest
income of $5.8 million, which was $786,000, or 16% greater than the comparable
quarter in 2002. Strong growth in ATM fee income continues to be primarily
responsible for the improvement in noninterest income as well as the increase
in the gains on the sales of residential mortgages, driven by the current high
level of mortgage refinance activity.
Noninterest Expenses
Noninterest expenses for the three months ended March 31, 2003 totaled
$13.0 million, and included the aforementioned $1.3 million recorded in
connection with the WF sale. This compares to $12.0 million in total expenses
recorded in the first quarter of 2002. Also during first quarter 2003, the
Corporation successfully completed its TOPS re-engineering initiative. The net
benefit (cost savings generated less expenses incurred) of the program in the
first quarter of 2003 was $609,000 and was comprised of $876,000 in cost savings
less $267,000 in costs incurred. As the program was substantially completed in
the first quarter, program costs incurred in the future are expected to be
nominal.
Capital Management
Management has identified the repurchase of the Corporation's common
stock at appropriate prices as a primary short-term use of the significant
capital generated by the aforementioned sales of business components. As a
result, during the first quarter of 2003, the Corporation repurchased 890,000,
or 10% of its shares of common stock pursuant to its Board authorized plan at an
average price of $32.66 per share. The Corporation has 422,000 shares, or just
over 5% of outstanding shares remaining under the current authorization. The
Corporation currently has 7.8 million shares outstanding.
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5
Additionally, the Corporation redeployed some of its capital into high
quality investments in the first quarter. In total, mortgage backed securities
(MBS) and investments grew $328.4 million from December 31, 2002 to March 31,
2003. The growth was entirely in AAA-rated, shorter duration MBS. At March 31,
2003, the Corporation's total MBS portfolio had a duration of approximately 2.6
years and an effective yield of 3.63%.
The earning impact from the significant share repurchases and MBS
investments were not fully reflected in the first quarter's results, as the
majority of the repurchases and investments were made in the latter portion of
the quarter.
Tangible equity to assets was 10.18% and tangible book value per share
was $25.21 at March 31, 2003.
* * *
Marvin N. Schoenhals, Chairman and President of WSFS said, "WSFS' focus
on our community banking operations is clearly showing results, as evidenced by
the strong growth in loans and core deposits in the first quarter, accompanied
by continued healthy asset quality. The significant capital generated from our
strategic divestitures allows us to concentrate on our commitment to being the
premier community bank in Delaware. As a continuing part of our commitment to,
and relationship with our community, the Board has authorized that we set aside
approximately 1% of the pretax gain on the sale of WF as a contribution to the
WSFS Foundation, a charitable organization established for the benefit of our
community. A similar percentage of the gain on sale of reverse mortgages
established the Foundation in the fourth quarter of 2002. The WSFS Foundation,
now with $1.7 million in funding, is intended to benefit the long-term well
being of our community, to which WSFS' success is so closely related."
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<PAGE>
6
WSFS Financial Corporation is a $1.9 billion financial services
company. Its principal subsidiary, Wilmington Savings Fund Society, FSB,
currently operates 21 retail banking offices in New Castle County and Dover,
Delaware, as well as Chester and Delaware Counties in Pennsylvania. Other
operating subsidiaries include WSFS Credit Corporation, and WSFS Investment
Group, Inc. For more information, please visit the Bank's website at
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.
# # #
<PAGE>
7
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS
STATEMENT OF OPERATIONS
(Dollars in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
---------------------------
2003 2002
------------ ------------
<S> <C> <C>
Interest income:
Interest and fees on loans $ 17,862 $ 18,227
Interest on mortgage-backed securities 3,482 1,630
Interest and dividends on investment securities 251 239
Interest on investments in reverse mortgages (77) 6,994
Other interest income 389 346
---------- ----------
21,907 27,436
---------- ----------
Interest expense:
Interest on deposits 2,479 3,248
Interest on Federal Home Loan Bank advances 4,481 4,528
Interest on federal funds purchased and securities sold
under agreements to repurchase 140 536
Interest on trust preferred borrowings 496 636
Interest on other borrowed funds 96 100
Cost of funding businesses held-for-sale - (568)
---------- ----------
7,692 8,480
---------- ----------
Net interest income 14,215 18,956
Provision for loan losses 775 707
----------- ----------
Net interest income after provision for loan losses 13,440 18,249
----------- ----------
Noninterest income:
Loan servicing fee income 672 791
Deposit service charges 1,905 2,025
Credit/debit card and ATM income 2,173 1,648
Securities gains - 2
Gain on sale of loans 404 19
Other income 656 539
---------- ----------
5,810 5,024
---------- ----------
Noninterest expenses:
Salaries, benefits and other compensation 6,819 6,342
Equipment expense 933 1,023
Data processing and operations expense 677 895
Occupancy expense 988 941
Marketing expense 407 314
Professional fees 501 820
Net costs of assets acquired through foreclosure (50) 30
ATM fraud recoveries (39) (198)
Other operating expenses 2,734 1,859
---------- ----------
12,970 12,026
---------- ----------
Income from continuing operations before taxes and cumulative
effect of change in accounting principle 6,280 11,247
Income tax provision 2,199 4,160
---------- ----------
Income from continuing operations before cumulative effect of
change in accounting principle 4,081 7,087
Cumulative effect of change in accounting principle, net of taxes - 703
---------- ----------
Income from continuing operations 4,081 7,790
Income on discontinued operations of businesses held-for-sale, net of taxes - 1,636
Gain on sale of businesses held-for-sale, net of taxes 41,181 -
---------- ----------
Net income $ 45,262 $ 9,426
========== ==========
Diluted earnings per share:
Income from continuing operations before cumulative effect
of change in accounting principle $ 0.46 $ 0.76
Cumulative effect of change in accounting principle - 0.08
---------- ----------
Income from continuing operations 0.46 0.84
Income on discontinued operations of businesses held-for-sale - 0.17
Gain on sale of businesses held-for-sale 4.62 -
---------- ----------
Net income $ 5.08 $ 1.01
========== ==========
Weighted average shares outstanding for diluted EPS 8,905,581 9,316,438
-----------------------------------------------------------------------------------------------------
Performance Ratios (continuing operations only):
Return on average assets (a) 0.95% 2.32%
Return on average equity (a) 7.32 29.55
Net interest margin (a)(b) 3.69 6.24
Efficiency ratio (c) 63.88 49.57
-----------------------------------------------------------------------------------------------------
</TABLE>
See "Notes"
<PAGE>
8
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
SUMMARY STATEMENT OF CONDITION
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31, March 31,
2003 2002 2002
------------- -------------- -------------
<S> <C> <C> <C>
Assets:
Cash and due from banks $ 135,061 $ 162,258 $ 96,975
Investment securities (d) 21,673 21,777 13,408
Investment in reverse mortgages, net 779 1,131 35,570
Other investments 33,173 93,500 46,697
Mortgage-backed securities (d) 537,391 148,238 406,627
Net loans (f)(g) 1,136,239 1,075,870 1,052,394
Net loans of businesses held-for-sale - 117,646 -
Loans held-for-sale (f) 2,439 3,516 67,086
Other assets 35,265 29,858 52,555
Other assets of businesses held-for-sale - 3,810 -
Loans, operating leases and
other assets of discontinued operations 36,086 47,396 96,753
----------- ----------- -----------
Total assets $ 1,938,106 $ 1,705,000 $ 1,868,065
=========== =========== ===========
Liabilities and Stockholders' Equity:
Noninterest-bearing deposits $ 185,946 $ 182,957 $ 179,551
Interest-bearing deposits 680,930 689,115 957,302
----------- ----------- -----------
Total retail deposits 866,876 872,072 1,136,853
Jumbo CD's - Non Retail 32,844 26,324 14,915
Brokered CD's - - -
----------- ----------- -----------
Total deposits 899,720 898,396 1,151,768
Federal Home Loan Bank advances 626,463 403,500 455,000
Other borrowings 175,767 112,506 125,725
Other liabilities 38,833 37,219 22,270
Other liabilities of businesses held-for-sale - 57,862 -
----------- ----------- -----------
Total liabilities 1,740,783 1,509,483 1,754,763
----------- ----------- -----------
Minority Interest - 12,845 5,010
Stockholders' equity 197,323 182,672 108,292
----------- ----------- -----------
Total liabilities, minority interest and
stockholders' equity $ 1,938,106 $ 1,705,000 $ 1,868,065
=========== =========== ===========
----------------------------------------------------------------------------------------------
Capital Ratios:
Equity to asset ratio 10.18 % 10.71 % 5.80 %
Core capital (h) (required: 4.00%) 12.50 13.74 8.03
Risk-based capital (h) (required: 8.00%) 21.11 20.12 12.82
----------------------------------------------------------------------------------------------
Asset Quality Indicators (continuing operations only):
Nonperforming Assets:
Nonaccruing loans $ 6,834 $ 6,529 $ 8,244
Assets acquired through foreclosure 942 904 325
----------- ----------- ------------
Total nonperforming assets $ 7,776 $ 7,433 $ 8,569
=========== =========== ===========
Past due loans (i) 211 529 625
Allowance for loan losses 21,941 21,452 20,995
Ratio of nonperforming assets to total assets 0.40 % 0.44 % 0.46 %
Ratio of allowance for loan losses to total gross
loans (e) 1.89 1.95 1.95
Ratio of allowance for loan losses to nonaccruing
loans (k) 317 324 251
Ratio of quarterly net charge-offs to
average gross loans (a)(f) 0.10 0.29 0.51
----------------------------------------------------------------------------------------------
</TABLE>
See "Notes"
<PAGE>
9
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
AVERAGE BALANCE SHEET
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
--------------------------------------------------------------------------------------
2003 2002
Average Yield/ Average Yield/
Balance Interest Rate (l) Balance Interest Rate (l)
-------------- ----------- -------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Interest-earning assets:
Loans: (f) (m)
Real estate loans (n) $ 726,378 $ 11,318 6.23 % $ 654,929 $ 11,539 7.05 %
Commercial loans 213,764 2,983 6.11 183,975 2,703 6.49
Consumer loans 185,067 3,480 7.63 190,058 3,930 8.39
------------ ---------- ----------- --------
Total loans 1,125,209 17,781 6.42 1,028,962 18,172 7.17
Mortgage-backed securities (d) 338,040 3,482 4.12 113,843 1,630 5.73
Loans held-for-sale (f) 5,460 81 5.93 3,325 55 6.62
Investment securities (d) 21,662 251 4.63 13,607 239 7.03
Investment in reverse mortgages 1,108 (77) (27.80) 33,269 6,994 84.09
Other interest-earning assets 80,078 389 1.97 40,896 346 3.42
----------- ---------- ----------- --------
Total interest-earning assets 1,571,557 21,907 5.65 1,233,902 27,436 8.98
---------- --------
Allowance for loan losses (21,592) (21,159)
Cash and due from banks 130,004 93,746
Loans, operating leases and other assets of
discontinued operations 41,911 104,695
Assets of businesses held-for-sale - 377,022
Other noninterest-earning assets 33,590 47,442
----------- -----------
Total assets $ 1,755,470 $ 1,835,648
=========== ===========
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
Money market and interest-
bearing demand $ 102,500 $ 106 0.42 $ 85,951 $ 107 0.50
Savings 299,737 480 0.65 310,655 812 1.06
Retail time deposits 276,375 1,788 2.63 253,120 2,243 3.59
Jumbo certificates of deposit-nonretail 22,197 105 1.92 10,411 76 2.96
Brokered certificates of deposit - - - 556 10 7.29
----------- ---------- ------------ --------
Total interest-bearing deposits 700,809 2,479 1.44 660,693 3,248 1.99
FHLB of Pittsburgh advances 482,410 4,977 4.13 465,222 5,283 4.54
Trust preferred borrowings 50,000 496 3.97 50,000 636 5.09
Other borrowed funds 81,274 236 1.16 82,098 636 3.10
Cost of funding discontinued operations (496) (755)
Cost of funding businesses held-for-sale - (568)
----------- ---------- ----------- --------
Total interest-bearing liabilities 1,314,493 7,692 2.34 1,258,013 8,480 2.70
---------- --------
Noninterest-bearing demand deposits 170,266 154,763
Liabilities of businesses held-for-sale - 297,303
Other noninterest-bearing liabilities 47,632 13,885
Minority interest 17 6,247
Stockholders' equity 223,062 105,437
----------- -----------
Total liabilities and stockholders' equity $ 1,755,470 $ 1,835,648
=========== ===========
Excess (deficit) of interest-earning assets
over interest-bearing liabilities $ 257,064 $ (24,111)
=========== ===========
Net interest and dividend income $ 14,215 $ 18,956
========== ========
Interest rate spread 3.31% 6.28%
======= =======
Net interest margin 3.69% 6.24%
======= =======
</TABLE>
<PAGE>
10
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
(Dollars in thousands, except per share data)
(Unaudited)
Three months ended
--------------------------
March 31, March 31,
2003 2002
--------------------------
Stock Information:
Market price of common stock:
High $ 33.35 $ 18.71
Low 30.96 16.96
Close 31.60 18.12
Book value per share 25.21 11.88
Number of shares outstanding (000s) 7,826 9,117
--------------------------------------------------------------------------------
Other Financial Data:
One-year repricing gap to total assets (j) (4.04)% 3.55
Number of associates (FTEs) (p) 420 772
Number of branch offices 21 22
--------------------------------------------------------------------------------
Notes:
(a) Annualized.
(b) Computed on a fully tax-equivalent basis.
(c) Noninterest expense divided by (tax-equivalent) net interest income and
other income.
(d) Includes securities available-for-sale.
(e) Excludes loans held-for-sale.
(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) 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.
(k) Includes general reserves only.
(l) Weighted average yields have been computed on a tax-equivalent basis.
(m) Nonperforming loans are included in average balance computations.
(n) Includes commercial mortgage loans.
(p) March 31, 2003 also includes the FTEs of WCC (discontinued operations); and
March 31, 2002 also includes the FTEs of WCC (discontinued operations) and
WF and C1FN (controlled, but not wholly-owned subsidiaries).
</TEXT>
</DOCUMENT>