EX-99 2 ex-99.htm PRESS RELEASE

1

WSFS

Financial

Corporation

 

WSFS Bank Center

500 Delaware Avenue, Wilmington, Delaware 19801

 

 

PRESS RELEASE

 

 

FOR IMMEDIATE RELEASE

Contact: Stephen A. Fowle

 

 

October 25, 2007

(302) 571-6833

 

 

 

WSFS REPORTS 3Q '07 EPS OF $1.11

 

WSFS Financial Corporation (NASDAQ/GS: WSFS), the parent company of Wilmington Savings Fund Society, FSB, reported quarterly net income of $7.1 million, or $1.11 per diluted share, compared to $8.0 million or $1.16 in the third quarter of 2006. Net income for the first nine months of 2007 was $22.2 million, or $3.38 per diluted share, compared to $22.8 million or $3.31 in the first nine months of 2006.

 

Highlights include:

 

 

•

Total commercial loans increased 16%, or $203.7 million from the third quarter of 2006.

 

•

Customer deposits increased 12%, or $156.3 million from the third quarter of 2006.

 

•

During the quarter, WSFS sold its $5.3 million credit card portfolio, providing the Company a $1.4 million pre-tax earnings benefit.

 

•

Noninterest income, excluding the credit card sale, grew 16%, or $1.6 million over the third quarter of 2006.

 

•

During the quarter, the Company repurchased 86,100 shares of stock, slightly more than 1% of shares outstanding.

 

•

During the quarter, the Company introduced a multi-year brand campaign with the tag line “We Stand For Service”TM which leverages the Bank’s Stellar Service value proposition in a unique and memorable way. The multi-media commercials star WSFS customers sharing “What WSFS Means To Me” in their own words.

 

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2

WSFS

Financial

Corporation

 

WSFS Bank Center

500 Delaware Avenue, Wilmington, Delaware 19801

 

 

Results for the quarter were impacted by an $882,000 gain ($0.09 per share) on the sale of the Company’s credit card portfolio, and a related $518,000 reduction ($0.05 per share) to the allowance for loan losses. This resulted in a combined earnings per share benefit of $0.14 for the quarter. Through a marketing partnership with the purchaser, WSFS will be able to provide a stronger offering of WSFS-branded credit cards to its customers. Future revenue sharing with the purchaser, and expense savings related to the servicing of the portfolio, will benefit the Company, while net interest income will decrease as a result of the sale of the credit card loans. Additionally, one commercial lending relationship totaling $10.3 million, secured by real estate, was placed on nonaccrual status. This resulted in a $618,000 increase ($0.06 per share) in the Company’s provision for loan losses expense and a $256,000 reversal ($0.03 per share) of interest income. The Company also took a $228,000 charge ($0.02 per share) related to closing one of its branches. Finally, WSFS recorded a $260,000 decrease in tax expense ($0.04 per share) resulting from adjustments made to estimates in accordance with new tax accounting guidance. The Company expects periodic adjustments related to these estimates.

 

Third Quarter 2007 Financial Highlights

 

Net interest income increased 5% over the third quarter of 2006

 

Net interest income for the third quarter of 2007 was $20.1 million, an increase of $1.0 million from the third quarter of 2006. The net interest margin improved by 16 basis points (0.16%) to 3.04% during the third quarter of 2007, from 2.88% reported in the third quarter of 2006. Included in the current quarter’s results was the impact of the commercial credit relationship described above which negatively impacted the net interest margin by 4 basis points (0.04%). The third quarter of 2006 included a $411,000 (6 basis points, 0.06%) non-cash charge related to the refinancing of the Company’s trust preferred securities. The overall improvement in the margin over last year reflects growth, and the Company’s continued efforts to refocus the mix of its balance sheet.

 

This quarter’s net interest income was equal to the net interest income in the second quarter of 2007. However, the net interest margin of 3.04% for the third quarter of 2007 decreased 6 basis points from the second quarter of 2007. The results for this quarter included a

 

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3

WSFS

Financial

Corporation

 

WSFS Bank Center

500 Delaware Avenue, Wilmington, Delaware 19801

 

 

four basis point (0.04%) impact from the previously mentioned lending relationship. In addition, the second quarter of 2007 included an additional $249,000 (four basis points, 0.04%) of income related to reverse mortgages compared to the third quarter of 2007.

 

Over the past several years, the Company has maintained a neutral to slightly negative one-year repricing gap to total assets. A negative gap indicates that more liabilities will reprice within one year than will assets. As a result, negatively-gapped companies generally benefit from falling interest rates.

 

Total commercial loans increased 16% or $203.7 million from the third quarter of 2006

 

Commercial and commercial real estate (CRE) loans increased a strong $203.7 million, or 16% over September 30, 2006. Net loans were $2.2 billion at September 30, 2007, an increase of $170.4 million, or 9%, over September 30, 2006. Overall, net loan growth in this quarter was tempered by the previously mentioned credit card sale and a planned decrease in residential mortgages retained on the balance sheet as part of the Company’s efforts to realign the balance sheet toward higher yielding assets.

 

Commercial and CRE loans increased $82.3 million, or 6% (24% annualized) over June 30, 2007, while net loans increased $72.5 million, or 3% (14% annualized).

 

The following table summarizes the current loan balances and composition compared to historical periods.

 

(Dollars in thousands)

 

At

Sep. 30, 2007

 

 

 

At

June 30, 2007

 

 

 

At

Sep. 30, 2006

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amount

 

 

 

%

 

 

 

Amount

 

 

 

%

 

 

 

Amount

 

 

 

%

 

Commercial and CRE

 

$

1,467,960

 

 

 

68

%

 

 

$

1,385,662

 

 

 

66

%

 

 

$

1,264,246

 

 

 

64

%

Residential

 

 

450,364

 

 

 

21

 

 

 

 

457,881

 

 

 

22

 

 

 

 

484,726

 

 

 

24

 

Consumer

 

 

268,468

 

 

 

12

 

 

 

 

270,297

 

 

 

13

 

 

 

 

265,378

 

 

 

13

 

Allowance for loan losses

 

 

(28,768

)

 

 

(1

)

 

 

 

(28,359

)

 

 

(1

)

 

 

 

(26,747

)

 

 

(1

)

Net Loans

 

$

2,158,024

 

 

 

100

%

 

 

$

2,085,481

 

 

 

100

%

 

 

$

1,987,603

 

 

 

100

%

 

 

(More)

 

4

WSFS

Financial

Corporation

 

WSFS Bank Center

500 Delaware Avenue, Wilmington, Delaware 19801

 

 

Asset quality

 

The Company recorded a provision for loan losses of $1.0 million in the third quarter of 2007 compared to $319,000 in the third quarter of 2006 and $1.3 million in the second quarter of 2007. The provision exceeded net charge-offs for both the second and third quarters of 2007. Compared to the second quarter of 2007 the provision was effected by: (1) growth in the Company’s commercial loan portfolio; (2) an increase of $618,000 due to the previously mentioned lending relationship; (3) a decrease of $518,000 resulting from the sale of the credit card portfolio.

 

Nonperforming assets increased $12.2 million compared to the second quarter of 2007. This increase was mainly due to the $10.3 million previously mentioned lending relationship that was placed on nonaccrual status. Nonperforming assets as a percentage of assets were 0.53% at September 30, 2007 compared to 0.14% at June 30, 2007 and 0.18% at September 30, 2006. Annualized net charge-offs in the third quarter of 2007 remained low at only 0.11% of average loans. This compares to annualized net charge-offs of 0.10% for the second quarter of 2007 and annualized net charge-offs of 0.05% for the third quarter of 2006. Annualized net charge-offs for the first nine months of 2007 were 0.08% compared to 0.02% for the first nine months of 2006, both relatively low by historical standards. The ratio of allowance for loan losses to total loans is 1.32% at September 30, 2007, compared to 1.34% at June 30, 2007 and 1.33% at September 30, 2006.

 

Mark A. Turner, WSFS President and CEO said, “Based on an analysis of the $10.3 million lending relationship, we believe we are adequately secured and specific reserves are appropriate given our loss exposure. Given the reported weakness in many real estate markets, we conducted a thorough review of the Company’s exposure to construction, land development, residential mortgages and other residential equity lending and we continue to monitor our entire portfolio. While delinquency and nonperforming assets have increased from unsustainably low levels of recent years, our asset quality statistics remain very favorable by historical standards.”

 

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5

WSFS

Financial

Corporation

 

WSFS Bank Center

500 Delaware Avenue, Wilmington, Delaware 19801
 

 

“The Company has a very small position, less than $17.4 million, in subprime residential mortgages. The bank’s sub-prime delinquency ratio of 4.16% is less than one-third of the average experienced by banks in surrounding states, based on the most recent available data (second quarter of 2007). We believe this is due in large part to the seasoning of our portfolio and good underwriting standards.”

 

Customer deposits increased 12% or $156.3 million from the third quarter of 2006

 

Total customer deposits (core deposits and customer time deposits) were $1.4 billion at September 30, 2007, an increase of $156.3 million, or 12%, over balances at September 30, 2006. As a result of this franchise growth, wholesale funding, which excludes customer-related funding, decreased $117.2 million, or 9% during the same time period. Wholesale funding reliance improved to 39% of total assets at September 30, 2007 from 44% at September 30, 2006.

 

Customer deposits decreased $15.9 million, or 1% from June 30, 2007. This variance was mainly due to a $23.1 million decrease in non-interest bearing demand accounts reflecting seasonal variability in these accounts, partially offset by a $10.2 million increase in interest bearing transaction accounts.

 

The following table summarizes the current customer deposit balances and composition compared to historical periods.

 

(Dollars in thousands)

 

At

Sep. 30, 2007

 

 

At

June 30, 2007

 

 

At

Sep. 30, 2006

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amount

 

 

%

 

 

Amount

 

 

%

 

 

Amount

 

 

%

 

Non-interest demand

 

$

272,678

 

 

19

%

 

$

295,729

 

 

20

%

 

$

263,363

 

 

20

%

Interest bearing demand

 

 

172,680

 

 

12

 

 

 

162,487

 

 

11

 

 

 

127,861

 

 

10

 

Savings

 

 

203,560

 

 

14

 

 

 

216,104

 

 

15

 

 

 

238,978

 

 

19

 

Money market

 

 

311,132

 

 

21

 

 

 

308,639

 

 

21

 

 

 

235,210

 

 

18

 

Total core deposits

 

 

960,050

 

 

66

 

 

 

982,959

 

 

67

 

 

 

865,412

 

 

67

 

Customer time

 

 

488,735

 

 

34

 

 

 

481,742

 

 

33

 

 

 

427,025

 

 

33

 

Total customer deposits

 

$

1,448,785

 

 

100

%

 

$

1,464,701

 

 

100

%

 

$

1,292,437

 

 

100

%

 

 

 

(More)

 

6

WSFS

Financial

Corporation

 

WSFS Bank Center

500 Delaware Avenue, Wilmington, Delaware 19801

 

 

Noninterest income grows $2.5 million, or 24% over the third quarter of 2006

 

During the third quarter of 2007, the Company recorded noninterest income of $12.8 million, which increased $2.5 million, or 24%, when compared to the third quarter of 2006. This increase included the $882,000 gain on the previously mentioned sale of the credit card portfolio, a $958,000 increase in deposit service charges and a $223,000 increase in credit/debit card and ATM income. Deposit service charge income continues to grow as a result of an increase in deposit accounts and additional fee-based services offered by WSFS. Excluding the credit card sale, noninterest income increased by $1.6 million, or 16%.

 

Noninterest income was $1.2 million or 10% higher than the second quarter of 2007. The increase in noninterest income over the second quarter of 2007 was mainly attributable to the gain on the sale of the credit card portfolio and a seasonal increase in credit/debit card and ATM income.

 

Excluding the sale of the credit card portfolio, fee revenues represented a healthy 37% of total revenues compared to 35% during the third quarter of 2006 and 36% during the second quarter of 2007.

 

Noninterest expense increase reflected growth and investment in franchise

 

Noninterest expenses for the third quarter of 2007 totaled $21.3 million, which was $3.7 million, or 21%, greater than the third quarter of 2006. This increase was mainly attributable to the Company’s continued growth efforts. Since September 2006, this expansion included the opening of four new branch offices, two branch renovations/relocations, the move to new corporate headquarters, the continued growth of the Wealth Management Division (which opened its first trust and investment accounts during the first quarter of 2007), the continued expansion of the commercial division, and the formation of a reverse mortgage business unit in the second half of 2006. Also during the third quarter of 2007, marketing expenses increased $607,000 over the third quarter of 2006, partially due to the launch of the multi-year brand campaign and to support the growth efforts mentioned above. In addition, the Company took a $228,000 charge related to closing one of its branches. The Company continues to have success

 

(More)

 

7

WSFS

Financial

Corporation

 

WSFS Bank Center

500 Delaware Avenue, Wilmington, Delaware 19801

 

 

with its business model, is gaining market share, and is investing in the future. This growth and investment is Company-wide and, as expected, has had an impact on many expense categories within the Company.

 

Noninterest expenses increased $2.3 million over the second quarter of 2007. Marketing expenses increased $416,000 compared to the second quarter of 2007 mainly due to the introduction of the brand campaign and the previously mentioned charge related to closing one of its branches. In addition, the Company reversed $258,000 in expenses related to its 401(k) plan and had a $212,000 reduction to its reserve for its standby letters of credit during the second quarter of 2007. The Company’s continued franchise growth is also reflected in higher compensation and equipment expenses.

 

Income taxes

 

The Company recorded a $3.4 million income tax provision in the third quarter of 2007 (reflecting a 32.4% effective tax rate) versus $3.5 million in the third quarter of 2006 (30.5% effective tax rate). The less-than-statutory tax rate in the third quarter of 2007 resulted from a number of factors, including a decrease in the Company’s income tax reserve. This adjustment was partially due to effects of adjustments made to estimates in accordance with new tax accounting guidance. The Company expects periodic adjustments related to these estimates. The unusually low tax rate in the third quarter of 2006 includes the impact of $1.8 million in unanticipated income related to the Company’s investment in bank-owned life insurance (BOLI). This benefit was non-taxable income to the bank and, therefore, reduced the effective tax rate.

 

Capital

 

During the third quarter of 2007, the Company continued its history of returning earnings to shareholders by repurchasing 86,100 shares of common stock at an average price of $56.38

 

(More)

 

8

WSFS

Financial

Corporation

 

WSFS Bank Center

500 Delaware Avenue, Wilmington, Delaware 19801

 

 

per share. Since the beginning of 2007 the Company has repurchased 513,600 shares, or 8% of its common stock at an average price of $65.18 per share. During the quarter, the Board of Directors approved an open authorization to repurchase up to an additional 10% of its outstanding shares of common stock, or approximately 630,000 shares.

 

The ratio of tangible equity to assets was 6.49% at September 30, 2007. The Tier 1 capital ratio was 11.10%, nearly double the 6.00% level required to be considered “well-capitalized” under regulatory definitions. Tangible book value per share increased to $32.18 at September 30, 2007, from $31.47 at June 30, 2007 and $30.87 at September 30, 2006.

 

CEO outlook and commentary

 

Mr. Turner remarked, “The banking industry faces strong headwinds. We are not immune from these, but we believe we have anticipated and are actively responding to these challenges. Our response has included limiting construction and development loans well ahead of regulatory guidance, ensuring industry and geographic diversification of our loan portfolio, responding to margin pressure through balance sheet realignment and, most recently, identifying revenue enhancement and cost cutting opportunities. We will continue to cultivate these efforts.”

 

Mr. Turner continued, “Our business model is built on Engaged Associates creating Customer Advocates. In July we were again named one of the best places to work in Delaware in a survey conducted by the Wilmington News Journal; and customer surveys conducted by the Gallup Organization, rank us “world class” for customer advocacy putting us in the top 10% of the many companies they conduct surveys for. Our success in creating a local, focused, high-service business model has allowed us to continue to take market share from our competition. In the last two years we have improved from #5 to a solid, and climbing, #4 in local deposits based on FDIC-reported data. In commercial banking, we continue to solidify our #2 market share position based on an internal analysis of our market.” 

 

Mr. Turner finished, “We continue to invest in the future of WSFS. This comes at a cost, as many of the investments are still in their early stages of maturity. As part our

 

(More)

 

9

WSFS

Financial

Corporation

 

WSFS Bank Center

500 Delaware Avenue, Wilmington, Delaware 19801

 

 

investment, this quarter we kicked off a multi-year “We Stand For Service™” brand campaign to further build awareness of our service value proposition. In this campaign our customers present their testimonials on why they have truly become WSFS’ Customer Advocates.”

 

WSFS’ Board of Directors declares a quarterly cash dividend of $0.10 per share

 

The Board of Directors has declared a quarterly cash dividend of $0.10 per share. This dividend represents a 25% increase from that of the third quarter of 2006. This dividend will be paid on November 23, 2007, to shareholders of record as of November 9, 2007.

 

WSFS Financial Corporation is a $3 billionfinancial services company. Its principal subsidiary, Wilmington Savings Fund Society, FSB, currently operates 29 retail banking offices in all three counties in Delaware, as well as Chester and Delaware Counties in Pennsylvania, providing full banking services under the WSFS Bank brand, and wealth management and personal trust services under Wilmington Advisors, a division of WSFS Bank. Other subsidiaries include: WSFS Investment Group, Inc., Montchanin Capital Management, Inc. and WSFS Reit, Inc. WSFS, celebrating its 175th anniversary, is one of the ten oldest banks continuously operating under the same name in the United States. For more information, please visit the Bank’s website at http://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.

# # #

 

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10

WSFS

Financial

Corporation

 

WSFS Bank Center

500 Delaware Avenue, Wilmington, Delaware 19801

 

WSFS FINANCIAL CORPORATION

FINANCIAL HIGHLIGHTS

STATEMENT OF OPERATIONS

(Dollars in thousands, except per share data)

(Unaudited)

 

 

 

Three months ended

 

 

 

Nine months ended

 

 

 

 

 

September 30,

 

 

 

June 30,

 

 

 

September 30,

 

 

 

September 30,

 

 

 

September 30,

 

 

 

 

 

2007

 

 

 

2007

 

 

 

2006

 

 

 

2007

 

 

 

2006

 

 

 

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

40,747

 

 

 

$

39,385

 

 

 

$

37,577

 

 

 

$

118,601

 

 

 

$

105,005

 

 

 

Interest on mortgage-backed securities

 

 

5,799

 

 

 

 

6,001

 

 

 

 

7,186

 

 

 

 

18,037

 

 

 

 

21,989

 

 

 

Interest and dividends on investment securities

 

 

457

 

 

 

 

723

 

 

 

 

616

 

 

 

 

2,894

 

 

 

 

1,639

 

 

 

Other interest income

 

 

576

 

 

 

 

558

 

 

 

 

752

 

 

 

 

1,802

 

 

 

 

1,843

 

 

 

 

 

 

47,579

 

 

 

 

46,667

 

 

 

 

46,131

 

 

 

 

141,334

 

 

 

 

130,476

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 

15,066

 

 

 

 

14,299

 

 

 

 

11,392

 

 

 

 

43,753

 

 

 

 

29,682

 

 

 

Interest on Federal Home Loan Bank advances

 

 

9,280

 

 

 

 

9,538

 

 

 

 

12,384

 

 

 

 

27,740

 

 

 

 

35,131

 

 

 

Interest on trust preferred borrowings

 

 

1,217

 

 

 

 

1,161

 

 

 

 

1,736

 

 

 

 

3,555

 

 

 

 

3,859

 

 

 

Interest on other borrowings

 

 

1,917

 

 

 

 

1,529

 

 

 

 

1,499

 

 

 

 

4,987

 

 

 

 

3,995

 

 

 

 

 

 

27,480

 

 

 

 

26,527

 

 

 

 

27,011

 

 

 

 

80,035

 

 

 

 

72,667

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

20,099

 

 

 

 

20,140

 

 

 

 

19,120

 

 

 

 

61,299

 

 

 

 

57,809

 

 

 

Provision for loan losses

 

 

1,001

 

 

 

 

1,273

 

 

 

 

319

 

 

 

 

2,645

 

 

 

 

1,702

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income after provision for loan losses

 

 

19,098

 

 

 

 

18,867

 

 

 

 

18,801

 

 

 

 

58,654

 

 

 

 

56,107

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit/debit card and ATM income

 

 

5,205

 

 

 

 

5,074

 

 

 

 

4,982

 

 

 

 

14,762

 

 

 

 

14,000

 

 

 

Deposit service charges

 

 

3,937

 

 

 

 

3,854

 

 

 

 

2,979

 

 

 

 

11,393

 

 

 

 

8,382

 

 

 

Investment advisory income

 

 

603

 

 

 

 

598

 

 

 

 

573

 

 

 

 

1,795

 

 

 

 

1,821

 

 

 

Loan fee income

 

 

615

 

 

 

 

581

 

 

 

 

458

 

 

 

 

1,757

 

 

 

 

1,292

 

 

 

Bank owned life insurance income

 

 

543

 

 

 

 

542

 

 

 

 

2,401

 

 

 

 

1,642

 

 

 

 

3,411

 

 

 

Gain on sale of credit card loans

 

 

882

 

 

 

 

—

 

 

 

 

—

 

 

 

 

882

 

 

 

 

—

 

 

 

Mortgage banking activities, net

 

 

68

 

 

 

 

78

 

 

 

 

136

 

 

 

 

218

 

 

 

 

219

 

 

 

Securities losses

 

 

—

 

 

 

 

—

 

 

 

 

(1,940

)

 

 

 

—

 

 

 

 

(1,981

)

 

 

Other income

 

 

956

 

 

 

 

889

 

 

 

 

720

 

 

 

 

2,709

 

 

 

 

2,083

 

 

 

 

 

 

12,809

 

 

 

 

11,616

 

 

 

 

10,309

 

 

 

 

35,158

 

 

 

 

29,227

 

 

 

Noninterest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, benefits and other compensation

 

 

11,347

 

 

 

 

10,251

 

 

 

 

10,189

 

 

 

 

32,448

 

 

 

 

28,802

 

 

 

Occupancy expense

 

 

2,287

 

 

 

 

2,083

 

 

 

 

1,387

 

 

 

 

6,202

 

 

 

 

4,034

 

 

 

Equipment expense

 

 

1,597

 

 

 

 

1,345

 

 

 

 

1,162

 

 

 

 

4,188

 

 

 

 

3,219

 

 

 

Data processing and operations expense

 

 

1,089

 

 

 

 

946

 

 

 

 

886

 

 

 

 

2,978

 

 

 

 

2,632

 

 

 

Marketing expense

 

 

1,283

 

 

 

 

867

 

 

 

 

676

 

 

 

 

2,892

 

 

 

 

2,017

 

 

 

Professional fees

 

 

646

 

 

 

 

654

 

 

 

 

587

 

 

 

 

1,953

 

 

 

 

1,349

 

 

 

Other operating expenses

 

 

3,084

 

 

 

 

2,881

 

 

 

 

2,700

 

 

 

 

9,057

 

 

 

 

8,708

 

 

 

 

 

 

21,333

 

 

 

 

19,027

 

 

 

 

17,587

 

 

 

 

59,718

 

 

 

 

50,761

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before adjustment for minority interest and taxes

 

 

10,574

 

 

 

 

11,456

 

 

 

 

11,523

 

 

 

 

34,094

 

 

 

 

34,573

 

 

 

Less minority interest

 

 

—

 

 

 

 

—

 

 

 

 

9

 

 

 

 

—

 

 

 

 

40

 

 

 

Income before taxes

 

 

10,574

 

 

 

 

11,456

 

 

 

 

11,514

 

 

 

 

34,094

 

 

 

 

34,533

 

 

 

Income tax provision

 

 

3,431

 

 

 

 

4,227

 

 

 

 

3,511

 

 

 

 

11,941

 

 

 

 

11,691

 

 

 

Net income

 

$

7,143

 

 

 

$

7,229

 

 

 

$

8,003

 

 

 

$

22,153

 

 

 

$

22,842

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

1.11

 

 

 

$

1.11

 

 

 

$

1.16

 

 

 

$

3.38

 

 

 

$

3.31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding for diluted EPS

 

 

6,426,816

 

 

 

 

6,500,209

 

 

 

 

6,915,021

 

 

 

 

6,562,269

 

 

 

 

6,904,071

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (a)

 

 

0.95

%

 

 

 

0.98

%

 

 

 

1.06

%

 

 

 

1.00

%

 

 

 

1.03

%

 

 

Return on average equity (a)

 

 

14.02

 

 

 

 

14.21

 

 

 

 

16.02

 

 

 

 

14.34

 

 

 

 

15.86

 

 

 

Net interest margin (a)(b)

 

 

3.04

 

 

 

 

3.10

 

 

 

 

2.88

 

 

 

 

3.13

 

 

 

 

2.95

 

 

 

Efficiency ratio (c)

 

 

64.28

 

 

 

 

59.40

 

 

 

 

59.19

 

 

 

 

61.38

 

 

 

 

57.77

 

 

 

Noninterest income as a percentage of total revenue (b)

 

 

38.60

 

 

 

 

36.26

 

 

 

 

34.70

 

 

 

 

36.14

 

 

 

 

33.26

 

 

 

 

See “Notes”

 

11

WSFS

Financial

Corporation

 

WSFS Bank Center

500 Delaware Avenue, Wilmington, Delaware 19801

 

WSFS FINANCIAL CORPORATION

FINANCIAL HIGHLIGHTS (Continued)

SUMMARY STATEMENT OF CONDITION

(Dollars in thousands)

(Unaudited)

 

 

 

September 30,

 

 

 

June 30,

 

 

 

September 30,

 

 

 

 

2007

 

 

 

2007

 

 

 

2006

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

69,948

 

 

 

$

83,291

 

 

 

$

67,616

 

 

Cash in non-owned ATMs

 

 

168,162

 

 

 

 

176,987

 

 

 

 

155,257

 

 

Investment securities (d)(e)

 

 

27,530

 

 

 

 

28,494

 

 

 

 

54,599

 

 

Other investments

 

 

42,517

 

 

 

 

41,568

 

 

 

 

63,784

 

 

Mortgage-backed securities (d)

 

 

485,677

 

 

 

 

472,467

 

 

 

 

537,912

 

 

Net loans (f)(g)(n)

 

 

2,158,024

 

 

 

 

2,085,481

 

 

 

 

1,987,603

 

 

Bank owned life insurance

 

 

56,924

 

 

 

 

56,381

 

 

 

 

57,604

 

 

Other assets

 

 

74,996

 

 

 

 

73,450

 

 

 

 

75,327

 

 

Total assets

 

$

3,083,778

 

 

 

$

3,018,119

 

 

 

$

2,999,702

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

$

272,678

 

 

 

$

295,729

 

 

 

$

263,363

 

 

Interest-bearing deposits

 

 

1,176,107

 

 

 

 

1,168,972

 

 

 

 

1,029,074

 

 

Total customer deposits

 

 

1,448,785

 

 

 

 

1,464,701

 

 

 

 

1,292,437

 

 

Other jumbo CDs

 

 

93,580

 

 

 

 

100,595

 

 

 

 

84,352

 

 

Brokered deposits

 

 

268,724

 

 

 

 

283,265

 

 

 

 

239,361

 

 

Total deposits

 

 

1,811,089

 

 

 

 

1,848,561

 

 

 

 

1,616,150

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank advances

 

 

798,560

 

 

 

 

734,377

 

 

 

 

956,755

 

 

Other borrowings

 

 

236,120

 

 

 

 

205,085

 

 

 

 

188,960

 

 

Other liabilities

 

 

34,901

 

 

 

 

28,886

 

 

 

 

29,407

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

2,880,670

 

 

 

 

2,816,909

 

 

 

 

2,791,272

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Minority interest

 

 

34

 

 

 

 

34

 

 

 

 

47

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

203,074

 

 

 

 

201,176

 

 

 

 

208,383

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities, minority interest and stockholders' equity

 

$

3,083,778

 

 

 

$

3,018,119

 

 

 

$

2,999,702

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity to asset ratio

 

 

6.59

%

 

 

 

6.67

%

 

 

 

6.95

%

 

Tangible equity to asset ratio

 

 

6.49

 

 

 

 

6.57

 

 

 

 

6.87

 

 

Core capital (h) (required: 4.00%; well-capitalized: 5.00%)

 

 

8.68

 

 

 

 

8.99

 

 

 

 

8.96

 

 

Tier 1 capital (h) (required: 4.00%; well-capitalized: 6.00%)

 

 

11.10

 

 

 

 

11.68

 

 

 

 

12.21

 

 

Risk-based capital (h) (required: 8.00%; well-capitalized: 10.00%)

 

 

12.22

 

 

 

 

12.88

 

 

 

 

13.32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality Indicators:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccruing loans

 

$

15,727

 

 

 

$

3,873

 

 

 

$

5,496

 

 

Assets acquired through foreclosure

 

 

703

 

 

 

 

388

 

 

 

 

17

 

 

Total nonperforming assets

 

$

16,430

 

 

 

$

4,261

 

 

 

$

5,513

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Past due loans (i)

 

$

733

 

 

 

$

426

 

 

 

$

289

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses

 

$

28,768

 

 

 

$

28,359

 

 

 

$

26,747

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of nonperforming assets to total assets

 

 

0.53

%

 

 

 

0.14

%

 

 

 

0.18

%

 

Ratio of allowance for loan losses to total gross

loans (j)

 

 

1.32

 

 

 

 

1.34

 

 

 

 

1.33

 

 

Ratio of allowance for loan losses to nonaccruing

loans (k)

 

 

172

 

 

 

 

719

 

 

 

 

477

 

 

Ratio of quarterly net charge-offs

to average gross loans (a)(f)

 

 

0.11

 

 

 

 

0.10

 

 

 

 

0.05

 

 

Ratio of year-to-date net charge-offs

to average gross loans (a)(f)

 

 

0.08

 

 

 

 

0.06

 

 

 

 

0.02

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See “Notes”

 

 

12

WSFS

Financial

Corporation

 

WSFS Bank Center

500 Delaware Avenue, Wilmington, Delaware 19801

 

WSFS FINANCIAL CORPORATION

FINANCIAL HIGHLIGHTS (Continued)

AVERAGE BALANCE SHEET

(Dollars in thousands)

(Unaudited)

 

Three months ended

September 30, 2007

June 30, 2007

September 30, 2006

 

 

 

Average

 

 

Interest &

 

Yield/

 

    

 

Average

 

 

Interest &

 

Yield/

 

   

 

Average

  

       

Interest &

 

Yield/

 

 

 

 

Balance

 

 

Dividends

 

Rate(a)(b)

 

 

Balance

 

 

Dividends

 

Rate(a)(b)

 

 

Balance

 

Dividends

 

Rate(a)(b)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans: (f) (l)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Commercial real estate loans

 

$

697,945

 

$

14,286

 

8.19

%

$

663,812

 

$

13,807

 

   

 8.32

%

$

639,307

 

   $

 13,537

 

  

  8.47

%

  Residential real estate loans (n)

 

 

454,010

 

 

6,551

 

5.77

 

 

460,592

 

 

6,530

 

5.67

 

 

492,408

 

6,808

 

5.53

 

  Commercial loans

 

 

721,080

 

 

14,707

 

8.13

 

 

687,493

 

 

14,001

 

8.22

 

 

601,763

 

12,294

 

8.18

 

  Consumer loans

 

 

272,881

 

 

5,203

 

7.56

 

 

268,472

 

 

5,047

 

7.54

 

 

262,600

 

4,938

 

7.46

 

    Total loans (n)

 

 

2,145,916

 

 

40,747

 

7.65

 

 

2,080,369

 

 

39,385

 

7.63

 

 

1,996,078

 

37,577

 

7.59

 

Mortgage-backed securities (d)

 

 

467,998

 

 

5,799

 

4.96

 

 

489,318

 

 

6,001

 

4.91

 

 

593,589

 

7,186

 

4.84

 

Investment securities (d)(e)

 

 

27,704

 

 

457

 

6.60

 

 

28,242

 

 

723

 

10.24

 

 

52,935

 

616

 

4.65

 

Other interest-earning assets

 

 

38,030

 

 

576

 

6.02

 

 

39,117

 

 

558

 

5.72

 

 

55,668

 

752

 

5.36

 

   Total interest-earning assets

 

 

2,679,648

 

 

47,579

 

7.14

 

 

2,637,046

 

 

46,667

 

7.12

 

 

2,698,270

 

46,131

 

6.88

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses

 

 

(28,503

)

 

 

 

 

 

 

(27,789

) 

   

 

 

 

 

 

 

(26,938

)

 

 

 

 

Cash and due from banks

 

 

64,834

 

 

 

 

 

 

 

70,648

 

 

 

 

 

 

 

57,372

 

 

 

 

 

Cash in non-owned ATMs

 

 

169,775

 

 

 

 

 

 

 

157,690

 

 

 

 

 

 

 

158,396

 

 

 

 

 

Bank owned life insurance

 

 

56,571

 

 

 

 

 

 

 

56,035

 

 

 

 

 

 

 

55,414

 

 

 

 

 

Other noninterest-earning assets

 

 

70,447

 

 

 

 

 

 

 

67,315

 

 

 

 

 

 

 

63,607

 

 

 

 

 

   Total assets

 

$

3,012,772

 

 

 

 

 

 

$

2,960,945

 

 

 

 

 

 

$

3,006,121

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Interest-bearing demand

 

$

 154,474

 

$

401

 

1.03

 

$

147,552

 

$

322

 

0.88

 

$

121,160

 

 $

 229

 

0.75

 

  Money market

 

 

313,825

 

 

3,057

 

3.86

 

 

309,655

 

 

3,002

 

3.89

 

 

227,285

 

2,080

 

3.63

 

  Savings

 

 

208,811

 

 

437

 

0.83

 

 

217,117

 

 

439

 

0.81

 

 

241,823

 

667

 

1.09

 

  Customer time deposits

 

 

490,133

 

 

5,848

 

4.73

 

 

458,298

 

 

5,353

 

4.68

 

 

415,792

 

4,183

 

3.99

 

    Total interest-bearing customer deposits

 

 

1,167,243

 

 

9,743

 

3.31

 

 

1,132,622

 

 

9,116

 

3.23

 

 

1,006,060

 

7,159

 

2.82

 

  Other jumbo certificates of deposit

 

 

94,535

 

 

1,268

 

5.32

 

 

99,079

 

 

1,311

 

5.31

 

 

77,255

 

1,039

 

5.34

 

  Brokered deposits

 

 

299,337

 

 

4,055

 

5.38

 

 

287,025

 

 

3,872

 

5.41

 

 

238,983

 

3,194

 

5.30

 

    Total interest-bearing deposits

 

 

1,561,115

 

 

15,066

 

3.83

 

 

1,518,726

 

 

14,299

 

3.78

 

 

1,322,298

 

11,392

 

3.42

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FHLB of Pittsburgh advances

 

 

719,175

 

 

9,280

 

5.05

 

 

741,095

 

 

9,538

 

5.09

 

 

1,002,001

 

12,384

 

4.84

 

Trust preferred borrowings

 

 

67,011

 

 

1,217

 

7.11

 

 

67,011

 

 

1,161

 

6.85

 

 

67,011

 

1,736

 

10.14

 

Other borrowed funds

 

 

160,752

 

 

1,917

 

4.77

 

 

127,905

 

 

1,529

 

4.78

 

 

123,377

 

1,499

 

4.86

 

    Total interest-bearing liabilities

 

 

2,508,053

 

 

27,480

 

4.38

 

 

2,454,737

 

 

26,527

 

4.32

 

 

2,514,687

 

27,011

 

4.30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits

 

 

273,990

 

 

 

 

 

 

 

278,360

 

 

 

 

 

 

 

265,594

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

26,884

 

 

 

 

 

 

 

24,376

 

 

 

 

 

 

 

25,970

 

 

 

 

 

Minority interest

 

 

34

 

 

 

 

 

 

 

38

 

 

 

 

 

 

 

68

 

 

 

 

 

Stockholders’ equity

 

 

203,811

 

 

 

 

 

 

 

203,434

 

 

 

 

 

 

 

199,802

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

3,012,772

 

 

 

 

 

 

$

2,960,945

 

 

 

 

 

 

$

3,006,121

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Excess of interest-earning assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  over interest-bearing liabilities

$

171,595

 

 

 

 

 

 

$

182,309

 

 

 

 

 

 

$

183,583

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and dividend income

 

 

 

 

$

20,099

 

 

 

 

 

 

$

20,140

 

 

 

 

 

 

 $

 19,120

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate spread

 

 

 

 

 

 

 

2.76

%

 

 

 

 

 

 

2.80

%

 

 

 

 

 

2.58

%

Net interest margin

 

 

 

 

 

 

 

3.04

%

 

 

 

 

 

 

3.10

%

 

 

 

 

 

2.88

%

 

See “Notes”

13

WSFS

Financial

Corporation

 

WSFS Bank Center

500 Delaware Avenue, Wilmington, Delaware 19801

 

WSFS FINANCIAL CORPORATION

FINANCIAL HIGHLIGHTS (Continued)

(Dollars in thousands, except per share data)

(Unaudited)

 

 

Three months ended

 

Nine months ended

 

 

September 30,

 

June 30,

 

September 30,

 

September 30,

 

September 30,

 

 

2007

 

2007

 

2006

 

2007

 

2006

 

 

 

 

 

 

 

 

 

   

 

 

Stock Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Market price of common stock:

 

 

 

 

 

 

 

 

 

 

High

$ 67.31

 

$ 68.08

 

$ 64.37

 

$ 70.69

 

$ 64.65

 

Low

54.15

 

63.12

 

58.08

 

54.15

 

58.08

 

Close

62.40

 

65.43

 

62.19

 

62.40

 

62.19

 

Book value per share

32.67

 

31.95

 

31.22

 

 

 

 

 

Tangible book value per share

32.18

 

31.47

 

30.87

 

 

 

 

 

Number of shares outstanding (000s)

6,215

 

6,296

 

6,675

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Financial Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One-year repricing gap to total assets (m)

(1.12)

%

(0.67)

%

(1.18)

%

 

 

 

 

Weighted average duration of the MBS portfolio

3.3 years

 

3.4 years

 

3.0 years

 

 

 

 

 

Unrealized losses on securities available-for-sale, net of taxes

$ (6,724)

 

$ (9,853)

 

$ (7,749)

 

 

 

 

 

Number of associates (FTEs)

612

 

609

 

592

 

 

 

 

 

Number of branch offices

29

 

30

 

26

 

 

 

 

 

Number of WSFS owned ATMs

319

 

317

 

316

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes:

(a)

Annualized.

 

(b)

Computed on a fully tax-equivalent basis.

 

(c)

Noninterest expense divided by (tax-equivalent) net interest income and noninterest 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 loans held-for-sale.