EX-99 2 ex-99.txt PRESS RELEASE 1 PRESS RELEASE FOR IMMEDIATE RELEASE Contact: Stephen A. Fowle July 19, 2005 (302) 571-6833 WSFS ANNOUNCES 2Q '05 EPS OF $0.90 WSFS Financial Corporation (NASDAQ/NMS: WSFS), the parent company of Wilmington Savings Fund Society, FSB, reported quarterly net income of $6.6 million, or $0.90 per diluted share. This compares to net income of $6.3 million, or $0.82 per share, for the second quarter of 2004. This $0.08 growth in earnings per share is a 10% increase over the same period in 2004. Earnings for the quarter were impacted by the previously announced refinancing of $50 million of Trust Preferred Securities, resulting in a non-cash charge, net of taxes, of $728,000, or $0.10 per share. Highlights for the second quarter of 2005 include: (i) growth in net loans of $57.6 million, or 4%, over balances at March 31, 2005, primarily in commercial and commercial real estate loans; (ii) continued strong asset quality with the ratio of nonperforming assets (NPA) to total assets of 22 basis points at June 30, 2005; and (iii) an increase in total retail deposits of $24.9 million, or 2%, over balances at March 31, 2005. The following is a brief discussion of the second quarter 2005 results. Net Interest Income Net interest income for the second quarter of 2005 was $17.8 million. This compares to the $15.6 million reported for the same quarter in 2004 and the $18.1 million reported for the first quarter of 2005. The net interest margin percentage of 3.03% for the second quarter of 2005 declined from 3.23% for the first quarter of 2005. The net interest margin was negatively (More) 2 affected by 18 basis points due to the redemption of $50 million of WSFS Capital Trust I Securities, which carried an interest rate of LIBOR plus 250 basis points. In connection with the redemption, the Company recognized a $1.1 million (pre-tax) non-cash charge from the write-down of the unamortized debt issuance costs of the called securities as a charge to interest expense. In conjunction with this redemption, the Company issued $65 million aggregate principal amount of Pooled Floating Rate Capital Securities, which carry an interest rate of LIBOR plus 177 basis points. Without this charge the margin would have been 3.21% for the second quarter of 2005. Overall portfolio yields on loans have continued to trend upward due to higher prevailing rates combined with the Bank's recent growth in variable rate loans. Additionally, the gross yield on the Bank's mortgage-backed securities (MBS) portfolio was 4.42% in the second quarter of 2005 versus 4.33% in the first quarter of 2005. The weighted average duration of the MBS portfolio was 2.7 years at June 30, 2005 compared to 3.1 years at March 31, 2005. Loans and Asset Quality Net loans grew $57.6 million, or 4%, during the second quarter of 2005 to $1.7 billion at June 30, 2005. Net loans grew $259.7 million, or 19%, versus June 30, 2004. Loan volume increases resulted primarily from continued strong growth in commercial and commercial real estate (CRE) loans, which increased $55.2 million, or 6% from balances at March 31, 2005 and $262.6 million, or 34% from balances at June 30, 2004. The following table summarizes the current loan balances and composition as well as recent changes in balances and composition.
At At At (Dollars in thousands) Jun. 30, 2005 Mar. 31, 2005 Jun. 30, 2004 ---------------------- -------------------- --------------------- Amount % Amount % Amount % ------ - ------ - ------ - Commercial and CRE $1,035,656 62% $ 980,437 61% $ 773,044 55% Residential 432,518 26 433,220 27 444,728 32 Consumer 219,675 13 216,283 14 208,591 15 Allowance for loan losses (24,939) (1) (24,647) (2) (23,139) (2) ---------- --- ---------- --- ---------- --- Net Loans $1,662,910 100% $1,605,293 100% $1,403,224 100% ========== === ========== === ========== ===
(More) 3 The Company's provision for loan losses was $772,000 in the second quarter of 2005, compared to $687,000 in the same period last year. This increase reflects, among other things, the Company's strong loan growth, particularly in commercial and CRE loans. At June 30, 2005, the allowance for loan losses was 1.48% of total loans, compared to 1.51% at March 31, 2005 and 1.62% at June 30, 2004. NPA as a percentage of total assets were 0.22% at June 30, 2005 compared to 0.26% at March 31, 2005 and 0.22% at June 30, 2004 and totaled $6.0 million at June 30, 2005, an improvement from the $6.7 million reported at March 31, 2005 and an increase from the $5.3 million reported at June 30, 2004. Annualized net charge-offs in the second quarter of 2005 were 0.12% of average loans compared to 0.04% for the first quarter of 2005, and 0.08% for the second quarter in 2004. Deposits Core deposit relationships (demand deposits, money market and savings accounts) increased $23.3 million, or 3% during the quarter and increased $137.6 million, or 20% over the same period last year. Total retail deposits increased $24.9 million, or 2%, during the second quarter to $1.1 billion at June 30, 2005 and increased $192.7 million, or 21% over June 30, 2004. This continued deposit growth was due, in part, to the opening of three new retail banking offices during 2004, and from deposits attributable to commercial banking relationships. In addition, growth in the Company's "High-Performance Checking" initiative continues to contribute to deposit balances. The following table summarizes the current retail deposit balances and composition as well as recent changes in balances and composition.
At At At (Dollars in thousands) Jun. 30, 2005 Mar. 31, 2005 Jun. 30, 2004 ------------- ------------- ------------- Amount % Amount % Amount % ------ - ------ - ------ - Non-interest demand $ 261,987 24% $ 256,926 24% $229,842 25% Interest bearing demand 120,232 11 106,834 10 94,662 10 Savings 276,514 25 286,229 26 323,128 35 Money market 167,854 15 153,347 14 41,380 5 ---------- --- ---------- --- -------- --- Total core deposits 826,587 75 803,336 74 689,012 75 Retail time 280,652 25 278,986 26 225,549 25 ---------- --- ---------- --- -------- --- Total retail deposits $1,107,239 100% $1,082,322 100% $914,561 100% ========== === ========== === ======== ===
(More) 4 Noninterest Income During the second quarter of 2005, the Company recorded noninterest income of $8.7 million, which was $494,000, or 6% greater than the second quarter of 2004 and $858,000, or 11% greater than the first quarter of 2005. The increase over the second quarter of 2004 was primarily due to increases of $689,000 in card and ATM income during the quarter, mostly the result of underlying growth in volumes. This increase was partially offset by lower income from mortgage banking activities of $257,000. The increase in comparison to the first quarter 2005 was mainly attributable to increases of $462,000 in card and ATM income, increased service charges on deposits of $309,000 and increased loan fee income of $143,000, resulting mostly from prepayment fees. Noninterest Expenses Noninterest expenses for the second quarter of 2005 totaled $15.6 million, which was $2.4 million, or 18% more than the same quarter last year and a $633,000 increase over the first quarter of 2005. The increase over the second quarter of 2004 was primarily in salaries, benefits and other compensation, marketing expenses and other operating expenses. These increases were mainly the result of the Company's growth efforts including branch expansion. The increase in noninterest expenses compared to the first quarter of 2005 was primarily due to marketing expenses which were $303,000 higher than the first quarter of 2005, reflecting expenses related to the promotion of "High-Performance Checking," and a campaign to increase market share for commercial banking. Also contributing to this quarter over quarter growth was the reversal of a $503,000 reserve for losses in the CashConnect (ATM) business that was recorded during the previous quarter. As a result of the continued growth in commercial banking, retail banking and the newly announced formation of the Wealth Management Services division, the Company expects that expenses will continue to grow over the next several quarters. (More) 5 Capital Management During the second quarter of 2005, the Company repurchased 166,000 of its shares of common stock at an average price of $53.05 per share. At June 30, 2005, the Company had 382,064 shares, or nearly 6% of its 6.9 million outstanding shares remaining under its current share repurchase authorization. The ratio of tangible equity to assets was 7.10% at June 30, 2005. The Tier 1 capital ratio was 13.39%, which is more than double the 6.00% level required to be considered "well-capitalized" under regulatory definitions. Tangible book value per share was $27.92 at June 30, 2005. Marvin N. Schoenhals, Chairman and President of WSFS, said, "We are very proud of our second quarter results which reflect the continued growth and strength of our banking franchise." Mr. Schoenhals went on to say, "During the quarter, WSFS passed the benchmark of $1 billion in commercial loan balances as we have continued to build relationships with businesses in our market. Our commitment to strengthening the core of Delaware is also evident in our retail and wealth management activities, as we have plans to open and renovate two to four branches per year, and have recently announced the formation of a Wealth Management Services division." WSFS Financial Corporation is a $2.7 billion financial services company. At June 30, 2005, its principal subsidiary, Wilmington Savings Fund Society, FSB, operated 24 retail banking offices in all three counties in Delaware, as well as Chester and Delaware Counties in Pennsylvania. Other continuing operating subsidiaries include: WSFS Investment Group, Inc., Montchanin Capital Management, Inc. and WSFS Reit, 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. # # # (More) 6 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, 2005 2005 2004 2005 2004 --------------- ----------- ----------- --------------- ------------ Interest income: Interest and fees on loans $ 25,447 $ 23,157 $ 18,222 $ 48,604 $ 36,322 Interest on mortgage-backed securities 6,444 5,874 4,689 12,318 9,416 Interest and dividends on investment securities 639 755 1,219 1,394 2,348 Other interest income 356 379 152 735 358 --------------- ----------- ----------- --------------- ------------ 32,886 30,165 24,282 63,051 48,444 --------------- ----------- ----------- --------------- ------------ Interest expense: Interest on deposits 4,662 4,087 1,832 8,749 3,625 Interest on Federal Home Loan Bank advances 7,263 6,187 5,886 13,450 11,441 Interest on federal funds purchased and securities sold under agreements to repurchase 1,092 1,011 413 2,103 813 Interest on trust preferred borrowings 1,967 712 503 2,679 999 Interest on other borrowings 124 55 40 179 78 --------------- ----------- ----------- --------------- ------------ 15,108 12,052 8,674 27,160 16,956 --------------- ----------- ----------- --------------- ------------ Net interest income 17,778 18,113 15,608 35,891 31,488 Provision for loan losses 772 579 687 1,351 1,374 --------------- ----------- ----------- --------------- ------------ Net interest income after provision for loan losses 17,006 17,534 14,921 34,540 30,114 --------------- ----------- ----------- --------------- ------------ Noninterest income: Credit/debit card and ATM income 3,665 3,203 2,976 6,868 5,640 Deposit service charges 2,487 2,178 2,366 4,665 4,701 Investment advisory income 619 608 549 1,227 1,087 Bank owned life insurance income 527 496 626 1,023 1,105 Loan fee income 569 426 627 995 1,158 Mortgage banking activities, net 37 144 294 181 367 Securities gains - - 2 - 224 Other income 810 801 780 1,611 1,496 --------------- ----------- ----------- --------------- ------------ 8,714 7,856 8,220 16,570 15,778 --------------- ----------- ----------- --------------- ------------ Noninterest expenses: Salaries, benefits and other compensation 8,494 8,822 7,406 17,316 15,049 Occupancy expense 1,263 1,276 1,122 2,539 2,271 Equipment expense 954 983 925 1,937 1,790 Data processing and operations expense 998 911 837 1,909 1,599 Marketing expense 828 525 541 1,353 1,061 Professional fees 498 553 309 1,051 831 Other operating expenses 2,568 1,900 2,049 4,468 3,826 --------------- ----------- ----------- --------------- ------------ 15,603 14,970 13,189 30,573 26,427 --------------- ----------- ----------- --------------- ------------ Income before minority interest and taxes 10,117 10,420 9,952 20,537 19,465 Less minority interest 37 37 47 74 92 --------------- ----------- ----------- --------------- ------------ Income before taxes 10,080 10,383 9,905 20,463 19,373 Income tax provision 3,514 3,593 3,638 7,107 6,924 --------------- ----------- ----------- --------------- ------------ Net income $ 6,566 $ 6,790 $ 6,267 $ 13,356 $ 12,449 =============== =========== =========== =============== ============ Diluted earnings per share: Net income $ 0.90 $ 0.90 $ 0.82 $ 1.80 $ 1.62 =============== =========== =========== =============== ============ Weighted average shares outstanding for diluted EPS 7,313,355 7,508,827 7,604,845 7,412,573 7,703,868 ================================================================================================================================= Performance Ratios: Return on average assets (a) 0.99% 1.07% 1.09% 1.03% 1.10% Return on average equity (a) 13.52 13.66 13.26 13.59 12.98 Net interest margin (a)(b) 3.03 3.23 3.07 3.13 3.15 Efficiency ratio (c) 58.28 57.04 54.71 57.66 55.25 =================================================================================================================================
See "Notes" 7 WSFS FINANCIAL CORPORATION FINANCIAL HIGHLIGHTS (Continued) SUMMARY STATEMENT OF CONDITION: (Dollars in thousands) (Unaudited)
June 30, March 31, June 30, 2005 2005 2004 ---------------- -------------- ------------- Summary Statement of Condition: Assets: Cash and due from banks $ 56,776 $ 52,733 $ 55,979 Cash in non-owned ATMs 137,203 129,688 123,777 Investment securities (d)(e) 98,091 96,706 122,064 Other investments 46,606 44,004 62,719 Mortgage-backed securities (d) 586,259 577,670 527,312 Net loans (f)(g) 1,662,910 1,605,293 1,403,224 Loans held for sale (f) 1,429 2,387 1,064 Bank owned life insurance 53,213 52,686 51,105 Other assets 57,132 60,353 49,065 Loans, operating leases and other assets of discontinued operations 227 557 3,645 ---------------- -------------- ------------- Total assets $ 2,699,846 $ 2,622,077 $ 2,399,954 ================ ============== ============= Liabilities and Stockholders' Equity: Noninterest-bearing deposits $ 261,987 $ 256,926 $ 229,842 Interest-bearing deposits 845,252 825,396 684,719 ---------------- -------------- ------------- Total retail deposits 1,107,239 1,082,322 914,561 Jumbo CDs - non retail 35,930 45,511 45,300 Brokered CDs 203,400 170,921 74,974 ---------------- -------------- ------------- Total deposits 1,346,569 1,298,754 1,034,835 Federal Home Loan Bank advances 902,943 868,004 930,181 Other borrowings 236,916 244,881 241,604 Other liabilities 20,047 19,208 15,373 ---------------- -------------- ------------- Total liabilities 2,506,475 2,430,847 2,221,993 ---------------- -------------- ------------- Minority interest 184 213 237 Stockholders' equity 193,187 191,017 177,724 ---------------- -------------- ------------- Total liabilities, minority interest and stockholders' equity $ 2,699,846 $ 2,622,077 $ 2,399,954 ================ ============== ============= ================================================================================================== Capital Ratios: Equity to asset ratio 7.16 % 7.28 % 7.41 % Tangible equity to asset ratio 7.10 7.23 7.36 Core capital (h) (required: 4.00%) 9.15 9.12 9.49 Tier 1 Capital (h) (required 4.00%) 13.39 13.51 14.94 Risk-based capital (h) (required: 8.00%) 14.34 14.36 15.80 ================================================================================================== Asset Quality Indicators: Nonperforming Assets: Nonaccruing loans $ 5,602 $ 6,294 $ 5,172 Assets acquired through foreclosure 372 425 175 ---------------- -------------- ------------- Total nonperforming assets $ 5,974 $ 6,719 $ 5,347 ================ ============== ============= Past due loans (i) $ 370 $ 349 $ 301 Allowance for loan losses $ 24,939 $ 24,647 $ 23,139 Ratio of nonperforming assets to total assets 0.22% 0.26% 0.22% Ratio of allowance for loan losses to total gross loans (j) 1.48 1.51 1.62 Ratio of allowance for loan losses to nonaccruing loans (k) 424 373 425 Ratio of quarterly net charge-offs to average gross loans (a)(f) 0.12 0.04 0.08 ==================================================================================================
See "Notes" 8 WSFS FINANCIAL CORPORATION FINANCIAL HIGHLIGHTS (Continued) AVERAGE BALANCE SHEET (Dollars in thousands) (Unaudited)
Three months ended ----------------------------------------------------------------------------------------------------------- June 30, 2005 March 31, 2005 June 30, 2004 ------------------------------------- --------------------------------- -------------------------------- 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 $ 572,714 $ 9,576 6.69 % $ 550,790 $ 8,584 6.23 % $ 406,101 $ 5,424 5.34 % Residential real estate loans 429,787 5,524 5.14 437,109 5,580 5.11 446,039 5,864 5.26 Commercial loans 434,056 6,686 6.35 385,439 5,489 5.98 337,152 3,740 4.72 Consumer loans 218,328 3,633 6.67 212,762 3,469 6.61 201,013 3,163 6.33 ------------- ---------- ----------- --------- ----------- -------- Total loans 1,654,885 25,419 6.21 1,586,100 23,122 5.90 1,390,305 18,191 5.31 Mortgage-backed securities (d) 583,785 6,444 4.42 542,965 5,874 4.33 511,379 4,689 3.67 Loans held-for-sale (f) 2,107 28 5.32 2,510 35 5.58 2,423 31 5.12 Investment securities (d)(e) 97,459 639 2.62 97,194 755 3.11 121,179 1,219 4.02 Other interest-earning assets 49,434 356 2.89 45,950 379 3.30 45,601 152 1.33 ------------- ---------- ----------- --------- ----------- -------- Total interest- earning assets 2,387,670 32,886 5.56 2,274,719 30,165 5.35 2,070,887 24,282 4.74 ---------- --------- -------- Allowance for loan losses (24,842) (24,377) (22,899) Cash and due from banks 51,945 54,011 49,512 Cash in non-owned ATMs 127,760 123,306 112,559 Loans, operating leases and other assets of discontinued operations 577 988 5,663 Bank owned life insurance 52,877 52,367 50,691 Other noninterest-earning assets 53,342 53,322 43,027 ------------- ----------- ----------- Total assets $ 2,649,329 $2,534,336 $2,309,440 ============= =========== =========== Liabilities and Stockholders' Equity: Interest-bearing liabilities: Interest bearing deposits: Interest-bearing demand $ 110,565 $ 66 0.24 $ 99,596 $ 59 0.24 $ 83,720 $ 51 0.25 Money market 162,934 747 1.84 141,107 590 1.70 36,012 33 0.37 Savings 280,668 280 0.40 285,462 271 0.39 322,682 326 0.41 Retail time deposits 278,253 1,882 2.71 286,722 1,851 2.62 222,589 1,024 1.85 ------------- ---------- ----------- --------- ----------- -------- Total interest- bearing retail deposits 832,420 2,975 1.43 812,887 2,771 1.38 665,003 1,434 0.87 Jumbo certificates of deposit-nonretail 39,081 280 2.87 45,250 294 2.63 45,942 168 1.47 Brokered certificates of deposit 182,220 1,407 3.10 156,471 1,022 2.65 59,841 230 1.55 ------------- ---------- ----------- --------- ----------- -------- Total interest- bearing deposits 1,053,721 4,662 1.77 1,014,608 4,087 1.63 770,786 1,832 0.96 FHLB of Pittsburgh advances 889,641 7,267 3.23 819,476 6,191 3.02 869,267 5,933 2.70 Trust preferred borrowings 66,161 1,967 11.76 51,547 712 5.53 51,547 503 3.86 Other borrowed funds 177,090 1,216 2.75 194,210 1,066 2.20 193,678 453 0.94 Cost of funding discontinued operations (4) (4) (47) ------------- ---------- ----------- --------- ----------- -------- Total interest- bearing liabilities 2,186,613 15,108 2.76 2,079,841 12,052 2.32 1,885,278 8,674 1.84 ---------- --------- -------- Noninterest-bearing demand deposits 252,134 239,590 221,141 Other noninterest-bearing liabilities 16,061 15,861 13,767 Minority interest 195 224 213 Stockholders' equity 194,326 198,820 189,041 ------------- ----------- ----------- Total liabilities and stockholders' equity $ 2,649,329 $2,534,336 $2,309,440 ============= =========== =========== Excess of interest- earning assets over interest- bearing liabilities $ 201,057 $ 194,878 $ 185,609 ============= =========== =========== Net interest and dividend income $ 17,778 $18,113 $15,608 ========== ========= ======== Interest rate spread 2.80% 3.03% 2.90% ====== ======== ======== Net interest margin 3.03% 3.23% 3.07% ====== ======== ========
See "Notes" 9 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, 2005 2005 2004 2005 2004 -------------------------------------- -------------------------- Stock Information: Market price of common stock: High $ 55.91 $ 59.91 $ 50.75 $ 59.91 $ 51.40 Low 49.80 52.20 45.03 49.80 44.43 Close 54.71 52.56 48.56 54.71 48.56 Book value per share 28.16 27.29 25.33 Tangible book value per share 27.92 27.06 25.18 Number of shares outstanding (000s) 6,860 6,998 7,016 ======================================================================================================================= Other Financial Data: One-year repricing gap to total assets (m) 0.50 % (1.22)% (4.92)% Number of associates (FTEs) (n) 516 487 471 Number of branch offices 24 24 23 =======================================================================================================================
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).