EX-99 2 ex-99.txt PRESS RELEASE WSFS Financial Corporation 838 Market Street, Wilmington, Delaware 19801 PRESS RELEASE FOR IMMEDIATE RELEASE Contact: Mark A. Turner July 20, 2004 (302) 571-7160 WSFS ANNOUNCES 2Q '04 EPS of $0.82 WSFS Financial Corporation (NASDAQ/NMS: WSFS), the parent company of Wilmington Savings Fund Society, FSB, reported quarterly net income of $6.3 million, or $0.82 per diluted share. This compares to net income of $5.8 million, or $0.71 per share, for the second quarter of 2003. This $0.11 growth in earnings per share is a 15% increase over the same period in 2003. Further, earnings per share from continuing operations was $0.82 for the second quarter of 2004 compared to $0.69 for the second quarter of 2003, an increase of $0.13 or 19%. Additional highlights for the second quarter of 2004 include: (i) growth in net loans of $58.6 million, or 4% over March 31, 2004, and $205.5 million, or 17% over June 30, 2003, primarily concentrated in commercial and commercial real estate loans, (ii) continued strong asset quality with annualized net charge-offs to total loans of just 8 basis points, and the ratio of nonperforming assets (NPA) to total assets of 22 basis points at June 30, 2004 and (iii) an increase in core deposits of $23.6 million, or 4%, and an increase in total retail deposits of $23.9 million, or 3% over balances at March 31, 2004. (More) WSFS Financial Corporation 838 Market Street, Wilmington, Delaware 19801 The following is a brief discussion of the second quarter 2004 results. Net Interest Income Net interest income for the second quarter of 2004 was $15.6 million. This compares to the $14.6 million reported for the same quarter in 2003 and the $15.9 million reported for the first quarter of 2004. The net interest margin percentage was 3.07% for the second quarter of 2004 compared to 3.24% in the first quarter of 2004. During the second quarter, the net interest margin was negatively impacted by, among other things, generally lower rates on loans, as overall portfolio yields continued to trend down with the Bank's robust growth in the current low interest rate environment. Also, the gross yield on the Bank's mortgage-backed securities ("MBS") portfolio was 3.67% in the second quarter of 2004 compared to 3.81% in the first quarter of 2004. The lower yield on MBS in the second quarter of 2004 was the result of higher amortization of premiums resulting from prepayments early in the second quarter. The weighted average duration of the MBS portfolio was 3.1 years at June 30, 2004 compared to 2.5 years at March 31, 2004, primarily from the increase in prevailing interest rates at the end of the second quarter of 2004. Loans and Asset Quality Net loans grew $58.6 million, or 4%, during the second quarter of 2004 to $1.4 billion at June 30, 2004. Net loans grew 17% over this time last year. Loan volume reflects the continued strong growth in commercial and commercial real estate (CRE) loans which increased $49.7 million, or 7%, from balances at March 31, 2004 and $196.3 million, or 34% from balances at June 30, 2003. The growth is primarily the continuing result of gaining market share due to the addition of several seasoned local relationship managers over the past few years. The table below summarizes the current loan balance and composition and recent changes in balance and composition. (More) WSFS Financial Corporation 838 Market Street, Wilmington, Delaware 19801
At At At (Dollars in thousands) June 30, 2004 March 31, 2004 June 30, 2003 ------------- -------------- ------------- Amount % Amount % Amount % ----------- --- ------------ --- ---------- --- Commercial and CRE $ 773,044 55% $ 723,346 54% $ 576,745 48% Residential 444,728 32 446,303 33 454,019 38 Consumer 208,591 15 197,738 15 189,395 16 Allowance for loan losses (23,139) (2) (22,745) (2) (22,459) (2) ----------- --- ------------ --- ---------- --- Net Loans $ 1,403,224 100% $ 1,344,642 100% $1,197,700 100% =========== ============ ==========
Non-performing assets (NPAs) totaled $5.3 million at June 30, 2004, an improvement from the $6.5 million reported at March 31, 2004 and the $8.3 million reported at June 30, 2003. NPAs as a percentage of total assets were 0.22% at June 30, 2004 compared to 0.29% at March 31, 2004 and 0.41% at June 30, 2003. Annualized net charge-offs in the second quarter of 2004 were 0.08% of average loans compared to 0.10% for the first quarter of 2004, and 0.07% for the second quarter of 2003. The allowance for loan losses was 1.62% of total loans at June 30, 2004, with a coverage ratio (ratio of allowance to non-accruing loans) of 425%. Deposits Core deposit relationships (demand deposits, money market and savings accounts) increased $23.6 million, or 4% during the quarter, and increased $60.7 million, or 10% over this time last year. Retail time deposits also increased $293,000 during the quarter. As a result, total retail deposits increased $23.9 million, or 3%, during the second quarter to $914.6 million at June 30, 2004. Core deposits continue to represent a healthy 75% of total retail deposits. The following table summarizes the current retail deposit balances and composition and recent changes in balances and composition.
At At At (Dollars in thousands) June 30, 2004 March 31, 2004 June 30, 2003 ------------- -------------- ------------- Amount % Amount % Amount % ----------- --- ------------ --- ---------- --- Non-interest demand $ 229,842 25% $ 223,490 25% $ 202,021 23% Savings 323,128 35 320,353 36 315,895 36 Money market and int. demand 136,042 15 121,565 14 110,420 12 --------- --- --------- --- --------- --- Total core deposits 689,012 75% 665,408 75% 628,336 71% Retail time 225,549 25 225,256 25 252,982 29 --------- --- --------- --- --------- --- Total retail deposits $ 914,561 100% $ 890,664 100% $ 881,318 100% ========= ========= =========
(More) WSFS Financial Corporation 838 Market Street, Wilmington, Delaware 19801 Noninterest Income ------------------ During the second quarter of 2004, the Corporation recorded noninterest income of $8.2 million, which was $920,000 greater than second quarter of 2003. The increase was primarily due to income of $626,000 from the investment in Bank Owned Life Insurance (BOLI) and $549,000 in fee income from Montchanin Capital Management, Inc., the Company's wealth management initiative started in the first quarter of 2004, as well as increases of $447,000 in card and ATM fee income during the quarter, primarily the result of underlying growth in volumes. These increases were partially offset by lower loan fee income, primarily lower prepayment fees, of $130,000; lower gains on sales of loans of $463,000; and lower gains on sales of securities of $187,000. These decreases resulted primarily from reduced refinancing activity during the quarter as compared to the second quarter of 2003. Noninterest Expenses -------------------- Noninterest expenses for the three months ended June 30, 2004 totaled $13.2 million, and were $830,000, or 7% greater than the same quarter last year. Included in 2004 results were $501,000 in operating expenses from Montchanin Capital Management, Inc., the Company's wealth management initiative started in the first quarter of 2004, as well as additional operating expenses resulting from the Company's branch expansion efforts. Taxes ----- For the second quarters of 2004 and 2003, the effective tax rates were 37% and 36%, respectively. The effective tax rate for the second quarter of 2004 was adversely affected by a $280,000, or nearly $0.04 per share, tax charge resulting from the State of New Jersey recently enacting legislation disallowing the use of a portion of state net operating loss carry-forwards for years 2004 and 2005. This charge negatively impacted WSFS Credit Corporation (WCC), the indirect auto leasing business discontinued by WSFS in 2000. In accordance with generally accepted accounting principles, this charge has been reflected in income tax expense from continuing operations. Without the $280,000 charge the Company's effective tax rate would (More) WSFS Financial Corporation 838 Market Street, Wilmington, Delaware 19801 have been 34%. The Company expects its effective tax rate to be approximately 35% in coming quarters. Share Repurchases ----------------- The Corporation has continued to repurchase WSFS' common stock as one use of the capital generated by the previously reported sales of business segments. During the second quarter of 2004, the Corporation repurchased 348,900 of its shares of common stock at an average price of $47.91 per share. As recently announced, during the quarter the Board of Directors authorized an additional 702,000 shares to be eligible for repurchase. The ratio of tangible equity to assets was a strong 7.36% and tangible book value per share was $25.18 at June 30, 2004. Marvin N. Schoenhals, Chairman and President of WSFS said, "We are pleased to report another strong quarter. The second quarter results reflect the continued success of our strategic focus on Delaware banking." Mr. Schoenhals went on to say, "Part of this strategy included the continued expansion of banking offices into southern Delaware. In June, WSFS opened its newest banking office in Rehoboth, Delaware, and we are delighted with the positive community response. We look forward to opening more offices in the near future to serve the Delaware marketplace." WSFS Financial Corporation is a $2.4 billion financial services company. At June 30, 2004, its principal subsidiary, Wilmington Savings Fund Society, FSB, operated 23 retail banking offices in all three counties in Delaware, as well as Chester and Delaware Counties in Pennsylvania. Other operating subsidiaries include WSFS Credit Corporation, WSFS Reit, Inc., WSFS Investment Group, Inc. and Montchanin Capital Management, Inc. For more information, please visit the Bank's website at www.wsfsbank.com. ---------------- ----------------------------------- *** (More) WSFS Financial Corporation 838 Market Street, Wilmington, Delaware 19801 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. # # # ----- WSFS FINANCIAL CORPORATION FINANCIAL HIGHLIGHTS STATEMENT OF OPERATIONS (Dollars in thousands, except per share data) (Unaudited)
Three months ended Six months ended ---------------------------------------- --------------------------- June 30, March 31, June 30, June 30, June 30, 2004 2004 2003 2004 2003 ----------- ---------- ----------- ---------- ---------- Interest income: Interest and fees on loans $ 18,222 $ 18,100 $ 17,915 $ 36,322 $ 35,777 Interest on mortgage-backed securities 4,689 4,727 4,065 9,416 7,547 Interest and dividends on investment securities 1,219 1,129 255 2,348 429 Other interest income 152 206 235 358 624 ----------- ---------- ----------- ---------- ---------- 24,282 24,162 22,470 48,444 44,377 ----------- ---------- ----------- ---------- ---------- Interest expense: Interest on deposits 1,832 1,793 2,112 3,625 4,591 Interest on Federal Home Loan Bank advances 5,886 5,555 4,945 11,441 9,426 Interest on federal funds purchased and securities sold under agreements to repurchase 413 133 225 813 365 Interest on trust preferred borrowings 503 496 493 999 989 Interest on other borrowings 40 305 92 78 188 ----------- ---------- ----------- ---------- ---------- 8,674 8,282 7,867 16,956 15,559 ----------- ---------- ----------- ---------- ---------- Net interest income 15,608 15,880 14,603 31,488 28,818 Provision for loan losses 687 687 725 1,374 1,500 ----------- ---------- ----------- ---------- ---------- Net interest income after provision for loan losses 14,921 15,193 13,878 30,114 27,318 ----------- ---------- ----------- ---------- ---------- Noninterest income: Loan servicing fee income 627 531 757 1,158 1,429 Deposit service charges 2,366 2,335 2,369 4,701 4,274 Credit/debit card and ATM income 2,976 2,664 2,529 5,640 4,702 Securities gains 2 222 189 224 189 Gain on sales of loans 294 73 757 367 1,161 Bank owned life insurance income 626 479 - 1,105 - Investment advisory income 549 538 - 1,087 - Other income 780 716 699 1,496 1,355 ----------- ---------- ----------- ---------- ---------- 8,220 7,558 7,300 15,778 13,110 ----------- ---------- ----------- ---------- ---------- Noninterest expenses: Salaries, benefits and other compensation 7,406 7,643 6,767 15,049 13,586 Equipment expense 925 865 923 1,790 1,856 Data processing and operations expense 837 762 690 1,599 1,367 Occupancy expense 1,122 1,149 984 2,271 1,972 Marketing expense 541 520 414 1,061 821 Professional fees 309 522 864 831 1,365 Other operating expenses 2,049 1,777 1,717 3,826 4,362 ----------- ---------- ----------- ---------- ---------- 13,189 13,238 12,359 26,427 25,329 ----------- ---------- ----------- ---------- ---------- Income from continuing operations before minority interest and taxes 9,952 9,513 8,819 19,465 15,099 Less minority interest 47 45 - 92 - ----------- ---------- ----------- ---------- ---------- Income from continuing operations before taxes 9,905 9,468 8,819 19,373 15,099 Income tax provision 3,638 3,286 3,183 6,924 5,382 ----------- ---------- ----------- ---------- ---------- Income from continuing operations 6,267 6,182 5,636 12,449 9,717 Gain on sale of businesses held-for-sale, net of taxes - - 208 - 41,389 ----------- ---------- ----------- ---------- ---------- Net income $ 6,267 $ 6,182 $ 5,844 $ 12,449 $ 51,106 =========== ========== =========== ========== ========== Diluted earnings per share: Income from continuing operations $ 0.82 $ 0.79 $ 0.69 $ 1.62 $ 1.14 Gain on sale of businesses held-for-sale, net of taxes - - 0.02 - 4.87 ----------- ---------- ----------- ---------- ---------- Net income $ 0.82 $ 0.79 $ 0.71 $ 1.62 $ 6.01 =========== ========== =========== ========== ========== Weighted average shares outstanding for diluted EPS 7,604,845 7,799,699 8,209,351 7,703,868 8,504,547 -------------------------------------------------------------------------------------------------------------------------- Performance Ratios (continuing operations only): Return on average assets (a) 1.09% 1.12% 1.17% 1.10% 1.07 Return on average equity (a) 13.26 12.72 11.33 12.98 9.21 Net interest margin (a)(b) 3.07 3.24 3.34 3.15 3.50 Efficiency ratio (c) 54.70 55.81 55.71 54.93 59.61 --------------------------------------------------------------------------------------------------------------------------
See "Notes" WSFS FINANCIAL CORPORATION FINANCIAL HIGHLIGHTS (Continued) SUMMARY STATEMENT OF CONDITION: (Dollars in thousands) (Unaudited)
June 30, March 31, June 30, 2004 2004 2003 -------------- ------------- ------------ Summary Statement of Condition: Assets: ------ Cash and due from banks $ 55,979 $ 50,376 $ 54,538 Cash in non-owned ATMs 123,777 106,673 90,444 Investment securities (d)(e) 122,064 115,118 12,738 Other investments 62,719 43,018 55,909 Mortgage-backed securities (d) 527,312 480,549 531,640 Net loans (f)(g) 1,403,224 1,344,642 1,197,700 Loans held for sale (f) 1,064 3,240 5,391 Bank owned life insurance 51,105 50,479 - Other assets 49,065 40,974 41,251 Loans, operating leases and other assets of discontinued operations 3,645 6,147 23,566 -------------- ------------- ------------ Total assets $ 2,399,954 $ 2,241,216 $ 2,013,177 ============== ============= ============ Liabilities and Stockholders' Equity: ------------------------------------ Noninterest-bearing deposits $ 229,842 $ 223,490 $ 202,021 Interest-bearing deposits 684,719 667,174 679,297 -------------- ------------- ------------ Total retail deposits 914,561 890,664 881,318 Jumbo CD's - non retail 45,300 44,411 21,956 Brokered CD's 74,974 49,991 - -------------- ------------- ------------ Total deposits 1,034,835 985,066 903,274 Federal Home Loan Bank advances 930,181 798,239 743,408 Other borrowings 241,604 244,540 140,398 Other liabilities 15,373 14,753 30,072 -------------- ------------- ------------ Total liabilities 2,221,993 2,042,598 1,817,152 -------------- ------------- ------------ Minority interest 237 191 50 Stockholders' equity 177,724 198,427 195,975 -------------- ------------- ------------ Total liabilities, minority interest and stockholders' equity $ 2,399,954 $ 2,241,216 $ 2,013,177 ============== ============= ============ ------------------------------------------------------------------------------------------- Capital Ratios: Equity to asset ratio 7.41% 8.86% 9.73% Tangible equity to asset ratio 7.36 8.81 9.73 Core capital (h) (required: 4.00%) 9.49 10.58 11.27 Tier 1 Capital (h) (required 4.00%) 14.94 16.45 17.94 Risk-based capital (h) (required: 8.00%) 15.80 17.30 18.77 ------------------------------------------------------------------------------------------- Asset Quality Indicators (continuing operations only): Nonperforming Assets: Nonaccruing loans $ 5,172 $ 6,256 $ 7,319 Assets acquired through foreclosure 175 233 983 -------------- ------------- ------------ Total nonperforming assets $ 5,347 $ 6,489 $ 8,302 ============== ============= ============ Past due loans (i) $ 301 $ 368 $ 374 Allowance for loan losses $ 23,139 $ 22,745 $ 22,459 Ratio of nonperforming assets to total assets 0.22% 0.29% 0.41% Ratio of allowance for loan losses to total gross loans (j) 1.62 1.66 1.83 Ratio of allowance for loan losses to nonaccruing loans (k) 425 359 303 Ratio of quarterly net charge-offs to average gross loans (a)(f) 0.08 0.10 0.07 -------------------------------------------------------------------------------------------
See "Notes" WSFS FINANCIAL CORPORATION FINANCIAL HIGHLIGHTS (Continued) AVERAGE BALANCE SHEET (Dollars in thousands) (Unaudited)
Three months ended --------------------------------------------------------------------------------------------------- June 30, 2004 March 31, 2004 June 30, 2003 ------------------------------ ----------------------------- ------------------------------- Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate (a)(b) Balance Interest Rate (a)(b) Balance Interest Rate (a)(b) ----------- --------- ------- --------- -------- -------- -------- -------- --------- Assets: Interest-earning assets: Loans: (f) (l) Commercial real estate loans $ 406,101 $ 5,424 5.34 % $ 386,911 $ 5,212 5.39 % $ 308,689 $ 4,524 5.86 % Residential real estate loans 446,039 5,864 5.26 452,886 6,124 5.41 454,115 6,806 5.99 Commercial loans 337,152 3,740 4.72 304,227 3,505 4.92 242,476 3,115 5.54 Consumer loans 201,013 3,163 6.33 194,168 3,226 6.68 185,462 3,394 7.34 ----------- --------- ---------- -------- ---------- -------- Total loans 1,390,305 18,191 5.31 1,338,192 18,067 5.48 1,190,742 17,839 6.09 Mortgage-backed securities (d) 511,379 4,689 3.67 496,699 4,727 3.81 531,584 4,065 3.06 Loans held-for-sale (f) 2,423 31 5.12 1,174 33 11.24 3,683 76 8.25 Investment securities (d)(e) 121,179 1,219 4.02 114,473 1,129 3.95 15,165 255 6.73 Other interest-earning assets 45,601 152 1.33 46,643 206 1.78 41,672 235 2.26 ----------- --------- ---------- -------- ---------- -------- Total interest-earning assets 2,070,887 24,282 4.74 1,997,181 24,162 4.90 1,782,846 22,470 5.10 --------- -------- -------- Allowance for loan losses (22,899) (22,632) (22,096) Cash and due from banks 49,512 47,126 46,941 Cash in non-owned ATMs 112,559 103,257 84,836 Loans, operating leases and other assets of discontinued operations 5,663 8,619 29,529 Bank owned life insurance 50,691 39,684 - Other noninterest-earning assets 43,027 38,600 29,050 ----------- ----------- ----------- Total assets $2,309,440 $2,211,835 $1,951,106 =========== =========== =========== Liabilities and Stockholders' Equity: Interest-bearing liabilities: Interest bearing deposits: Money market and interest- bearing demand $ 119,732 $ 84 0.28 $ 113,052 $ 66 0.23 $ 104,959 $ 83 0.32 Savings 322,682 326 0.41 317,396 329 0.42 311,521 448 0.58 Retail time deposits 222,589 1,024 1.85 226,027 1,067 1.90 255,919 1,469 2.30 Jumbo certificates of deposit-nonretail 45,942 168 1.47 42,779 152 1.43 28,688 112 1.57 Brokered certificates of deposit 59,841 230 1.55 42,820 179 1.68 - - - ----------- --------- ---------- -------- ---------- -------- Total interest-bearing deposits 770,786 1,832 0.96 742,074 1,793 0.97 701,087 2,112 1.21 FHLB of Pittsburgh advances 869,267 5,933 2.70 819,713 5,631 2.72 677,074 5,240 3.06 Trust preferred borrowings 51,547 503 3.86 50,000 496 3.92 50,000 493 3.90 Other borrowed funds 193,678 453 0.94 186,780 438 0.94 109,107 317 1.16 Cost of funding discontinued operations (47) (76) (295) ----------- --------- ---------- -------- ---------- -------- Total interest-bearing liabilities 1,885,278 8,674 1.84 1,798,567 8,282 1.84 1,537,268 7,867 2.05 --------- -------- -------- Noninterest-bearing demand deposits 221,141 205,803 185,123 Other noninterest-bearing liabilities 13,767 12,950 29,713 Minority interest 213 66 50 Stockholders' equity 189,041 194,449 198,952 ----------- ---------- ---------- Total liabilities and stockholders' equity $2,309,440 $2,211,835 $1,951,106 =========== ========== ========== Excess of interest-earning assets over interest-bearing liabilities $ 185,609 $ 198,614 $ 245,578 =========== =========== =========== Net interest and dividend income $15,608 $15,880 $14,603 ======== ======== ======== Interest rate spread 2.90% 3.06% 3.05% ======= ======== ========= Net interest margin 3.07% 3.24% 3.34% ======= ======== =========
See "Notes" WSFS FINANCIAL CORPORATION FINANCIAL HIGHLIGHTS (Continued) (Dollars in thousands, except per share data) (Unaudited)
Three months ended Six months ended -------------------------------------- -------------------------- June 30, March 31, June 30, June 30, June 30, 2004 2004 2003 2004 2003 -------------------------------------- -------------------------- Stock Information: Market price of common stock: High $ 50.75 $ 51.40 $ 38.63 $ 51.40 $ 38.63 Low 45.03 44.43 31.58 44.43 30.96 Close 48.56 50.17 37.96 48.56 37.96 Book value per share 25.33 26.95 25.69 Tangible book value per share 25.18 26.80 25.69 Number of shares outstanding (000s) 7,016 7,362 7,627 ---------------------------------------------------------------------------------------------------------------------- Other Financial Data: One-year repricing gap to total assets (m) (4.92)% (4.07)% (6.58)% Number of associates (FTEs) (n) 471 445 442 Number of branch offices 23 23 21 ----------------------------------------------------------------------------------------------------------------------
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) Includes reverse mortgages. (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) Excludes loans held-for-sale. (k) Includes general reserves only. (l) Nonperforming loans are included in average balance computations. (m) 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. (n) Includes the FTEs of WCC (discontinued operations) and Cypress Capital Management (controlled, but not wholly owned subsidiary).