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SMALL BUSINESS
WSFS Reports 3rd Quarter '09 Results: Breakeven Net Income; Maintains $0.12 Quarterly Dividend
WILMINGTON, Del., Oct. 22 /PRNewswire-FirstCall/ -- WSFS Financial Corporation (Nasdaq: WSFS), the parent company of Wilmington Savings Fund Society, FSB (WSFS Bank), reported breakeven net income for the third quarter of 2009 and a loss per common share of $0.10 (after preferred stock dividends), an improvement from a net loss of $2.3 million and $0.50 per common share in the second quarter of 2009, and a decline from net income of $5.5 million and diluted earnings per common share of $0.88 for the third quarter of 2008. For the first nine months of 2009, WSFS reported net income of $625,000 and a loss of $0.20 per common share (after preferred stock dividends). This compares to net income of $19.5 million or $3.09 per diluted common share during the first nine months of 2008.
Highlights:
- Customer deposit growth remained very strong, increasing $83.0 million or 4% (17% annualized) from June 30, 2009 and $530.4 million or 35% from September 30, 2008 levels. Most of this growth was in core deposits.
- Commercial loan growth continued, increasing $34.4 million or 2% (7% annualized) from June 30, 2009 and $246.3 million or 15% from September 30, 2008.
- WSFS net interest margin for the quarter ended September 30, 2009 was 3.35%, up from 3.31% in the quarter ended June 30, 2009 and 3.28% in the quarter ended September 30, 2008. Net interest income of $26.3 million was virtually flat as compared to the second quarter of 2009 and increased $3.0 million or 13% from the third quarter of 2008.
- WSFS noninterest income for the quarter ended September 30, 2009 was $14.5 million, a $1.9 million increase from the quarter ended June 30, 2009 and a $2.9 million increase from the quarter ended September 30, 2008.
- Excluding "niche businesses" and non-routine items, noninterest expense for the third quarter of 2009 increased only $115,000, or less than 1%, from the second quarter of 2009 despite continued growth in the franchise.
- WSFS' tangible common equity ratio increased to 6.65% as of September 30, 2009 from 5.75% as of June 30, 2009. Tangible common book value per share improved to $33.45 from $33.19 at June 30, 2009.
- The Company has maintained its quarterly dividend of $0.12 per share.
- WSFS significantly improved its coverage for potential loan losses to 2.05% of total loans at September 30, 2009 from the 1.63% reported in the previous quarter. This was primarily the result of providing $15.5 million for loan losses during the third quarter of 2009, which was significantly more than the $4.5 million of net charge-offs for the same period.
Notable items:
- WSFS recorded a $15.5 million provision for loan losses and $585,000 in additional write-downs of assets acquired through foreclosure (REO), primarily reflecting continued weakness in residential construction and land development (CLD) loans, combined with risk rating migration across the commercial loan portfolio.
- The Company recognized a $746,000 positive adjustment on a $12.4 million par value BBB+ rated mortgage-backed security (MBS) issued in connection with a 2002 reverse mortgage securitization as a result of market improvement in credit spreads.
- WSFS recorded $1.1 million in securities gains resulting from the sale of securities from the Agency MBS portfolio and a $394,000 gain related to the bulk sale of $16.7 million in residential 1(st) mortgages in order to take advantage of market improvements and to optimize its portfolio.
CEO outlook and commentary:
Mark A. Turner, President and CEO said, "We have made fundamental progress at improving our core franchise and earnings power, and while our results have stabilized in the third quarter, we continue to be challenged by high credit costs."
"As the recession continued, we felt it was appropriate to conduct a detailed review and analysis of our commercial loan portfolio. This included a review of every loan commitment greater than $1 million, regardless of risk rating, and represented 74% of our commercial portfolio. The review considered cash flows from the business or project, appropriately conservative real estate values and a careful view of guarantor support and the direction of the economy. The evaluation was aimed at updating loan ratings and revising estimates of real estate recovery values and contributed to the increased level of our loan loss provision this quarter."
Mr. Turner continued, "We also continue to focus on building the appropriate level of capital to both allow us to take advantage of opportunities that we are seeing as a result of this economy and to provide support against the threat of continued economic deterioration. Our private placement of $25 million of common stock to Peninsula Investment Partners, L.P. this quarter provided WSFS these benefits and reintroduced Ted Weschler as a valuable addition to our Board."
"Our results for the quarter also highlighted the strengthening of our organization during this recession. This recession has provided an opportunity to grow and strengthen customer relationships and we see the results in significantly increased core deposits, commercial loan growth, enhanced margin and increased fee income. This quarter we also took advantage of investment opportunities in the Agency MBS market to sell some shorter term securities at a gain-on-sale while re-deploying the proceeds back into the Agency MBS market at higher yields. We continue to improve our franchise and earnings prospects through other initiatives such as our CORE Program, which stands for Creative Opportunities for Revenues and Expenses, aimed at cutting nearly 6% of total Bank expenses to increase efficiency and help support continued franchise growth."
Third Quarter 2009 Discussion of Financial Results
Net interest margin continues to improve
The net interest margin for the third quarter of 2009 increased four basis points (0.04%) to 3.35% from the 3.31% reported in the second quarter of 2009. Net interest income for the third quarter of 2009 held virtually flat as compared to the second quarter of 2009 at $26.3 million due to a decrease in the Company's MBS and residential loan portfolios. Net interest income increased $3.0 million, or 13%, and the net interest margin increased seven basis points (0.07%) from the third quarter of 2008.
The Company continued to benefit from growth in core deposits and the resulting shift in funding mix from higher cost wholesale funding. The margin also benefited from the repricing of the Company's retail CD portfolio. Importantly, while deposits and wholesale funding costs declined during the quarter, the Company's yield on its loan portfolio remained relatively stable compared to the second quarter of 2009.
Customer deposits increased $83.0 million from June 30, 2009
Total customer deposits (core deposits and customer time deposits) were $2.1 billion at September 30, 2009, and increased a robust $83.0 million or 4% (17% annualized) over levels reported at June 30, 2009. The linked-quarter increase in deposits was mainly due to money market accounts.
Customer deposits also increased $530.4 million, or 35%, over balances at September 30, 2008. The very strong growth was across all categories, and represented a notable positive shift to core deposit accounts over the last twelve months.
The following table summarizes current customer deposit balances and composition compared to prior periods.
(Dollars in At At At
thousands) September 30, 2009 June 30, 2009 September 30, 2008
Noninterest
demand $411,959 20% $424,382 22% $294,648 19%
Interest-bearing
demand 243,310 12 245,556 12 184,566 12
Savings 219,446 11 223,829 11 192,515 13
Money market 521,255 25 413,764 21 286,020 19
Total core
deposits 1,395,970 68 1,307,531 66 957,749 63
Customer time 668,200 32 673,603 34 576,011 37
Total
customer
deposits $2,064,170 100% $1,981,134 100% $1,533,760 100%
Commercial loans continued growth trends
Total net loans were $2.5 billion at September 30, 2009, a decrease of $6.5 million, or less than 1% (1% annualized) compared to June 30, 2009 levels, primarily the result of residential 1(st) mortgage loan sales and increased loan loss reserves. However, commercial and commercial real estate loans (together Commercial Loans) grew by $34.4 million or 2% (7% annualized) from June 30, 2009. The overall growth in the Commercial Loan portfolio was offset by a decrease in residential CLD loans of $11.4 million to $123.4 million or 4.8% of the loan portfolio and commercial CLD loans of $3.0 million to $95.6 million or 3.7% of the loan portfolio. Residential first mortgage loans have continued to decline from previous periods because of the Company's continuing strategy to sell mortgage loans in the secondary market to generate fee income.
Total net loans increased $179.7 million, or 8%, over September 30, 2008. This growth was primarily due to a $237.7 million, or 27% increase in commercial and industrial (C&I) loans offset by decreases in the Company's CLD portfolio. In addition, residential mortgage loans decreased $57.0 million mainly due to increased loan sales by the Company.
The following table summarizes the current loan balances and composition compared to prior periods.
(Dollars in At At At
thousands) September 30, 2009 June 30, 2009 September 30, 2008
Commercial
and CRE $1,881,464 75% $1,847,027 74% $1,635,162 70%
Residential
mortgage 377,126 15 408,111 16 434,125 19
Consumer 303,771 12 302,762 12 289,301 12
Allowance for
loan losses (52,385) (2) (41,415) (2) (28,358) (1)
Net Loans $2,509,976 100% $2,516,485 100% $2,330,230 100%
Loan quality
Credit results for the third quarter show continued weakness in the economy, impacting the Company's CLD portfolio as well as migration in credit ratings across the commercial portfolio. Protracted stress in the housing market and unemployment also impacted the consumer portfolio. Total net charge-offs in the third quarter of 2009 were $4.5 million, or 0.71% (annualized) of average loans, compared to $6.2 million, or 0.97% (annualized) for the second quarter of 2009 and $3.3 million or 0.57% (annualized) for the third quarter of 2008. A significant portion of these charge-offs were in the CLD portfolio which recorded net charge-offs of $2.1 million, or 3.87% (annualized) of the portfolio, reflecting a decrease from the $2.9 million of net charge-offs recorded in the second quarter of 2009. In addition, net charge-offs in the consumer and residential 1(st) mortgage loan portfolios were $1.1 million (1.40% annualized) and $257,000 (0.27% annualized), respectively for the third quarter of 2009 compared to $606,000 and $187,000 during the second quarter of 2009.
Nonperforming assets increased to $93.2 million as of September 30, 2009 from $79.9 million as of June 30, 2009 and $36.6 million as of September 30, 2008. The increase of $13.3 million in the third quarter was less than the $24.1 million increase in the second quarter of 2009 and the $20.0 million increase in the first quarter of 2009 and, as in these past quarters, is predominately related to the Company's CLD portfolio. During the third quarter of 2009 three significant lending relationships were placed in nonaccrual status; a $5.2 million residential condominium project located in Philadelphia, Pennsylvania, a $3.2 million commercial land loan located in Salisbury, Maryland, and a $2.6 million residential condominium project in Ocean City, Maryland.
Total loan portfolio delinquency was 2.79% as of September 30, 2009 compared to 2.33% as of June 30, 2009. Residential 1(st) mortgage loan delinquency was 5.26% at September 30, 2009 compared to 3.50% at June 30, 2009 and was the result of increased delinquencies and sales in the portfolio lowering balances. This compares favorably to prime 1(st) mortgage national delinquencies of 6.01% as of June 30, 2009, the date of the most recent comparable data. Consumer delinquency was 1.39% at September 30, 2009 compared to 1.05% at June 30, 2009 and compares favorably to the national delinquencies in both consumer home equity installment loans of 3.84% and home equity lines of credit of 1.83% as of June 30, 2009. Delinquency in the commercial loan portfolio increased modestly to 2.54% compared to 2.28% at June 30, 2009 and reflects an increase in delinquency in the construction portfolio, which increased to 12.59% at September 30, 2009 from 10.40% at June 30, 2009. Delinquency was relatively flat in the C&I portfolio (1.23% at September 30, 2009 compared to 1.22% at June 30, 2009) and commercial real estate (CRE) portfolio (0.45% at September 30, 2009 compared to 0.35% at June 30, 2009).
During the third quarter of 2009 the Company recorded a $15.5 million provision for loan losses. The provision includes:
- $11.8 million related to credit risk migration within the commercial portfolio of which $10.9 million was attributable to migration to higher risk ratings and $900,000 was related to collateral depreciation affecting loss estimates for classified loans. Included in this total was $4.0 million in provision related to the previously mentioned loan-by-loan risk rating review.
- $3.3 million of net charge-offs related to consumer loans and additional charges on certain nonperforming commercial loans.
- $365,000 related to continued growth in the Company's commercial loan portfolio.
Investments
At September 30, 2009, the Company's total securities portfolio had a carrying value of $573.4 million, down modestly from the June 30, 2009 level of $598.7 million. Over this period, the Agency MBS portfolio decreased by $33.1 million including $16.6 million of prepayments. The Company recorded a $1.1 million gain on sale of Agency MBS mentioned earlier in this release. The non-Agency MBS portfolio increased by $7.8 million, due to the purchase of $41.8 million of AAA rated securities offset by prepayments.
The legacy non-Agency portfolio, as discussed in prior periods, continues to exhibit strong fundamentals including; short duration (75% are 15-year pass-throughs, 89% are backed by prime mortgages with no sub-prime collateral); seasoning (none later than 2006 and only 25% with a 2006 vintage); and low LTV and high FICO credit rating scores.
As of September 30, 2009, 26 bonds with market value of $88.6 million have been downgraded below AAA-. An independent stress test of these bonds projected losses of only $187,000 (21 basis points) in a scenario of 20% decline in housing prices over the next 24 month horizon. Based on these results, the Company had no "other than temporary impairment" (OTTI) in its investment portfolio as of September 30, 2009.
Noninterest income
During the third quarter of 2009, the Company earned noninterest income of $14.5 million, an increase of $1.9 million or 15%, compared to the second quarter of 2009. The increase was mainly due to $1.0 million of incremental securities gains, resulting from the sale of mortgage-backed securities and of $124,000 incremental positive adjustment on the BBB+ rated MBS both due to market improvements in the quarter. In addition, fees from mortgage banking activities were $416,000 higher during the quarter due to increased mortgage loan sales, and credit/debit card and ATM fees increased $324,000 from the second quarter of 2009.
Noninterest income increased $2.9 million in comparison to the third quarter of 2008. The increase was mainly from higher securities gains as a result of the $1.1 million gain from the sale of mortgage-backed securities and the $746,000 positive adjustment on the BBB+ rated MBS recorded during the third quarter of 2009. In addition, fees from mortgage banking activities were $756,000 higher during 2009 due to increased mortgage loan originations and sales.
Noninterest expense
Noninterest expense for the third quarter of 2009 totaled $25.6 million, which was a $5.4 million decrease from the second quarter of 2009. Adjusted for niche businesses (Cash Connect and 1(st) Reverse discussed later in the "niche" businesses section) and $5.7 million in non-routine charges discussed in the second quarter release, noninterest expense increased by only $115,000 or less than 1%. This small increase is despite the full quarter expenses for three new branches opened during the second quarter of 2009.
Noninterest expense for the third quarter increased $2.5 million from the third quarter of 2008. Adjusted for niche businesses, noninterest expense increased by $3.0 million, or 15%, over the third quarter of 2008. This increase is mainly due to a $1.3 million increase in FDIC insurance assessments as a result of higher industry insurance rates and a significant increase in deposit balances. In addition, during the third quarter of 2009, the Company recognized $585,000 of additional write-downs on REO and increased the reserve established for letters of credit by $452,000 over the second quarter of 2009. In addition, the Company recorded increases in salaries, occupancy and equipment expenses primarily due to a multiple branch acquisition in October 2008 and de novo expansion over the last year.
Capital management
The Company's capital increased $31.1 million, or 11% from June 30, 2009 levels and tangible common equity increased by $31.2 million or 15% from June 30, 2009. The primary reason for this increase was the completion of the previously announced sale of $25 million of common stock to Peninsula Investment Partners, L.P. Capital levels also benefited from significant improvement in the value of the Company's available-for-sale MBS portfolio. The Company's tangible common equity ratio increased meaningfully to 6.65% at the end of the third quarter, while tangible common book value per share increased by $0.26 to $33.45. At September 30, 2009, the Bank's Tier 1 capital ratio was 11.13%, a significant increase from the 9.95% at June 30, 2009 and well above the 6.00% level required to be considered "well-capitalized" under regulatory definitions.
The Board of Directors approved a quarterly cash dividend of $0.12 per share. This dividend will be paid on November 27, 2009, to shareholders of record as of November 6, 2009.
Niche businesses (included in the above results)
The Cash Connect division is a premier provider of ATM Vault Cash and related services in the United States. Cash Connect manages more than $270 million in vault cash in more than 10,000 non-bank ATMs nationwide and also operates 345 ATMs for WSFS Bank, by far the largest branded ATM network in Delaware. During the third quarter of 2009, Cash Connect reported pre-tax income of $1.5 million, compared to $1.3 million for the second quarter of 2009 and $656,000 for the third quarter of 2008. Cash Connect recorded $3.2 million in net revenue (fee income less funding costs) during the third quarter of 2009, an increase of $384,000 compared to the second quarter of 2009 and an increase of $478,000 compared to the third quarter of 2008. Noninterest expenses were $1.7 million during the third quarter of 2009 an increase of $184,000 from the second quarter of 2009 and a reduction of $409,000 from the third quarter of 2008.
During the third quarter of 2009, 1(st) Reverse reported a pre-tax loss of only $166,000 as we moved towards completing the wind-down of these operations. 1(st) Reverse recorded $626,000 in fee income and expenses of $792,000 during the quarter. The Company anticipates it will complete the wind-down during the fourth quarter of 2009.
Income taxes
The Company recorded a $222,000 income tax benefit in the third quarter of 2009 primarily from ongoing tax-free income. During the second quarter of 2009 the Company recorded a $1.6 million income tax benefit. In the third quarter of 2008, the Company recorded a $3.0 million tax provision. Volatility in effective tax rates from quarter to quarter is expected.
3rd Quarter 2009 Earnings Release Conference Call
Management will conduct a conference call to review this information at 1:00 p.m. Eastern Daylight Time (EDT) on Friday, October 23, 2009. Interested parties may listen to this call by dialing 1-800-860-2442. A rebroadcast of the conference call will be available one hour after the completion of the conference call, until 9:00 a.m. EDT on November 2, 2009, by calling 1-877-344-7529 and using Conference ID 434891#.
About WSFS Financial Corporation
WSFS Financial Corporation is a $3.6 billion financial services company. Its primary subsidiary, Wilmington Savings Fund Society, FSB (WSFS Bank), operates 37 retail banking offices located in Delaware and Pennsylvania, as well as four loan production offices in Dover and Lewes, Delaware; Blue Bell, Pennsylvania and Annandale, Virginia. WSFS Bank provides comprehensive financial services including personal trust and wealth management. Other subsidiaries include WSFS Investment Group, Inc. and Montchanin Capital Management, Inc. Founded in 1832, WSFS is one of the ten oldest banks in the United States continuously operating under the same name. 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, which are based on various assumptions (some of which may be beyond the Company's control) are subject to risks and uncertainties and other factors which could cause actual results to differ materially from those currently anticipated. Such risks and uncertainties include, but are not limited to, those related to the economic environment, particularly in the market areas in which the Company operates; the volatility of the financial and securities markets, including changes with respect to the market value of our financial assets; changes in government regulation affecting financial institutions and potential expenses associated therewith; changes resulting from our participation in the CPP including additional conditions that may be imposed in the future on participating companies; and the costs associated with resolving any problem loans and other risks and uncertainties, 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 Nine months ended
------------------- ------------------
Sept 30, June 30, Sept 30, Sept 30, Sept 30,
2009 2009 2008 2009 2008
---- ---- ---- ---- ----
Interest income:
Interest and
fees on loans $32,283 $32,356 $34,683 $96,013 $106,829
Interest on
mortgage-
backed
securities 6,435 6,948 5,904 20,719 17,607
Interest and
dividends on
investment
securities 412 535 376 1,044 916
Other interest
income - - 374 - 1,340
--- --- --- --- -----
39,130 39,839 41,337 117,776 126,692
------ ------ ------ ------- -------
Interest expense:
Interest on
deposits 7,578 7,523 8,936 23,430 30,288
Interest on
Federal Home
Loan Bank
advances 4,221 4,804 7,235 14,366 23,559
Interest on trust
preferred
borrowings 389 465 747 1,449 2,548
Interest on other
borrowings 649 667 1,112 1,967 3,654
--- --- ----- ----- -----
12,837 13,459 18,030 41,212 60,049
------ ------ ------ ------ ------
Net interest
income 26,293 26,380 23,307 76,564 66,643
Provision for
loan losses 15,483 11,997 3,502 35,133 8,325
------ ------ ----- ------ -----
Net interest
income after
provision for
loan losses 10,810 14,383 19,805 41,431 58,318
------ ------ ------ ------ ------
Noninterest
income:
Deposit service
charges 4,401 4,276 4,354 12,494 12,326
Credit/debit
card and
ATM income 4,373 4,049 4,416 12,124 13,261
Loan fee
income 1,349 1,354 819 3,953 2,466
Securities
gains
(losses) 1,875 887 (5) 3,185 1,115
Investment
advisory
income 525 516 593 1,572 1,838
Mortgage banking
activities, net 822 406 66 1,430 264
Bank owned life
insurance income 238 229 548 677 1,578
Other income 955 950 893 2,871 3,013
--- --- --- ----- -----
14,538 12,667 11,684 38,306 35,861
------ ------ ------ ------ ------
Noninterest
expenses:
Salaries, benefits
and other
compensation 12,131 12,051 12,211 36,513 34,995
Occupancy
expense 2,452 2,355 2,118 7,243 6,288
Equipment
expense 1,829 1,725 1,575 5,133 4,571
Data processing
and operations
expense 1,169 1,157 1,095 3,447 3,215
Professional
fees 1,148 2,311 1,037 4,421 2,609
Marketing
expense 852 831 952 2,410 3,020
Other operating
expenses 5,988 10,525 4,034 21,731 10,431
----- ------ ----- ------ ------
25,569 30,955 23,022 80,898 65,129
------ ------ ------ ------ ------
(Loss) income
before taxes (221) (3,905) 8,467 (1,161) 29,050
Income tax
(benefit)
provision (222) (1,589) 2,957 (1,786) 9,594
---- ------ ----- ------ -----
Net income (loss) 1 (2,316) 5,510 625 19,456
Dividends on
preferred stock
and accretion 634 751 - 1,898 -
--- --- --- ----- ---
Net (loss) income
available to
common
stockholders $(633) $(3,067) $5,510 $(1,273) $19,456
===== ======= ====== ======= =======
Diluted earnings
per common share:
Net (loss) income
available to
common
stockholders $(0.10) $(0.50) $0.88 $(0.20) $3.09
====== ====== ===== ====== =====
Weighted average
common shares
outstanding
for diluted
EPS 6,266,289 6,190,987 6,290,130 6,210,260 6,291,859
-------- --------- --------- --------- --------- ---------
Performance Ratios:
Return on average
assets (a) 0.00% (0.26)% 0.69% 0.02% 0.82%
Return on average
equity (a) 0.00 (3.32) 9.95 0.31 11.89
Net interest
margin (a)(b) 3.35 3.31 3.28 3.23 3.16
Efficiency
ratio (c) 62.20 78.72 65.28 69.92 62.79
Noninterest
income as a
percentage
of total
revenue (b) 35.37 32.21 33.13 33.11 34.70
----------- ----- ----- ----- ----- -----
See "Notes"
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
SUMMARY STATEMENT OF CONDITION
(Dollars in thousands)
(Unaudited)
Sept 30, June 30, Sept 30,
2009 2009 2008
---- ---- ----
Assets:
-------
Cash and due from banks $65,383 $75,042 $61,410
Cash in non-owned ATMs 223,646 201,844 159,824
Investment securities (d)(e) 47,397 47,625 36,647
Other investments 39,853 39,547 41,746
Mortgage-backed securities (d) 525,475 549,877 488,716
Net loans (f)(g)(n) 2,509,976 2,516,485 2,330,230
Bank owned life insurance 60,015 59,776 59,129
Other assets 101,768 97,720 77,139
------- ------ ------
Total assets $3,573,513 $3,587,916 $3,254,841
========== ========== ==========
Liabilities and Stockholders' Equity:
-------------------------------------
Noninterest-bearing deposits $411,959 $424,382 $294,648
Interest-bearing deposits 1,652,211 1,556,752 1,239,112
--------- --------- ---------
Total customer deposits 2,064,170 1,981,134 1,533,760
Other jumbo CDs 78,427 58,694 101,203
Brokered deposits 334,280 333,123 338,494
------- ------- -------
Total deposits 2,476,877 2,372,951 1,973,457
--------- --------- ---------
Federal Home Loan
Bank advances 505,565 636,773 755,628
Other borrowings 245,428 270,431 269,567
Other liabilities 42,603 35,851 32,906
------ ------ ------
Total liabilities 3,270,473 3,316,006 3,031,588
--------- --------- ---------
Stockholders' equity 303,040 271,910 223,283
------- ------- -------
Total liabilities and
stockholders' equity $3,573,513 $3,587,916 $3,254,841
========== ========== ==========
Capital Ratios:
Equity to asset ratio 8.48% 7.58% 6.86%
Tangible equity to asset ratio 8.13 7.22 6.74
Tangible common equity to
asset ratio 6.65 5.75 6.74
Core capital (h) (required: 4.00%;
well-capitalized: 5.00%) 9.10 8.08 8.85
Tier 1 capital (h) (required: 4.00%;
well-capitalized: 6.00%) 11.13 9.95 10.97
Risk-based capital (h)
(required: 8.00%;
well-capitalized: 10.00%) 12.34 11.15 11.93
Asset Quality Indicators:
Nonperforming Assets:
Nonaccruing loans $76,131 $64,510 $31,368
Troubled debt restructuring 7,600 7,312 1,432
Assets acquired through
foreclosure 9,465 8,073 3,780
----- ----- -----
Total nonperforming assets $93,196 $79,895 $36,580
======= ======= =======
Past due loans (i) $6,392 $1,076 $1,655
Allowance for loan losses $52,385 $41,415 $28,358
Ratio of nonperforming
assets to total assets 2.61% 2.23% 1.12%
Ratio of allowance for loan
losses to total gross loans (j) 2.05 1.63 1.20
Ratio of allowance for loan
losses to nonaccruing loans (k) 52 56 82
Ratio of quarterly net
charge-offs to average gross
loans (a)(f) 0.71 0.97 0.57
Ratio of year-to-date
net charge-offs
to average gross loans (a)(f) 0.73 0.75 0.30
See "Notes"
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
AVERAGE BALANCE SHEET
(Dollars in thousands)
(Unaudited)
Three months ended
------------------
Sept 30, 2009
------------------
Average Interest & Yield/
Balance Dividends Rate (a)(b)
------- --------- -----------
Assets:
Interest-earning assets:
Loans: (f) (l)
Commercial real
estate loans $759,139 $8,731 4.60%
Residential real
estate loans (n) 395,705 5,236 5.29
Commercial loans 1,102,937 14,531 5.25
Consumer loans 301,604 3,785 4.98
------- -----
Total loans (n) 2,559,385 32,283 5.09
Mortgage-backed
securities (d) 530,673 6,435 4.85
Investment securities (d)(e) 47,403 412 3.49
Other interest-earning
assets (o) 39,618 - 0.00
------ ---
Total interest-earning
assets 3,177,079 39,130 4.96
------
Allowance for loan losses (41,780)
Cash and due from banks 55,481
Cash in non-owned ATMs 225,740
Bank owned life insurance 59,859
Other noninterest-earning
assets 95,767
------
Total assets $3,572,146
==========
Liabilities and Stockholders'
Equity:
Interest-bearing liabilities:
Interest bearing deposits:
Interest-bearing demand $234,621 $158 0.27%
Money market 477,857 1,411 1.17
Savings 223,041 123 0.22
Customer time deposits 678,059 4,832 2.83
------- -----
Total interest-bearing
customer deposits 1,613,578 6,524 1.60
Other jumbo certificates
of deposit 63,146 439 2.76
Brokered deposits 347,297 615 0.70
------- ---
Total interest-bearing
deposits 2,024,021 7,578 1.49
FHLB of Pittsburgh
advances 551,267 4,221 3.00
Trust preferred borrowings 67,011 389 2.27
Other borrowed funds 203,474 649 1.28
------- ---
Total interest-bearing
liabilities 2,845,773 12,837 1.80
------
Noninterest-bearing
demand deposits 409,437
Other noninterest-bearing
liabilities 37,514
Stockholders' equity 279,422
-------
Total liabilities and
stockholders' equity $3,572,146
==========
Excess of interest-earning assets
over interest-bearing
liabilities $331,306
========
Net interest and dividend income $26,293
=======
Interest rate spread 3.16%
====
Net interest margin 3.35%
====
Three months ended
------------------
June 30, 2009
------------------
Average Interest & Yield/
Balance Dividends Rate (a)(b)
------- --------- -----------
Assets:
Interest-earning assets:
Loans: (f) (l)
Commercial real
estate loans $791,884 $9,161 4.63%
Residential real
estate loans (n) 414,985 5,660 5.46
Commercial loans 1,057,167 13,747 5.25
Consumer loans 301,613 3,788 5.04
------- -----
Total loans (n) 2,565,649 32,356 5.09
Mortgage-backed
securities (d) 570,740 6,948 4.87
Investment
securities (d)(e) 47,606 535 4.50
Other interest-
earning assets (o) 39,668 - 0.00
------ ------
Total interest-
earning assets 3,223,663 39,839 4.98
------
Allowance for loan losses (36,726)
Cash and due from banks 59,263
Cash in non-owned ATMs 182,696
Bank owned life insurance 59,624
Other noninterest-earning
assets 93,649
------
Total assets $3,582,169
==========
Liabilities and Stockholders'
Equity:
Interest-bearing liabilities:
Interest bearing deposits:
Interest-bearing demand $233,035 $153 0.26%
Money market 363,952 1,018 1.12
Savings 224,595 122 0.22
Customer time deposits 655,484 5,194 3.18
------- -----
Total interest-bearing
customer deposits 1,477,066 6,487 1.76
Other jumbo certificates
of deposit 75,467 473 2.51
Brokered deposits 338,163 563 0.67
------- ---
Total interest-
bearing deposits 1,890,696 7,523 1.60
FHLB of Pittsburgh
advances 712,243 4,804 2.67
Trust preferred
borrowings 67,011 465 2.75
Other borrowed funds 209,426 667 1.27
------- ---
Total interest-
bearing liabilities 2,879,376 13,459 1.87
------
Noninterest-bearing
demand deposits 390,516
Other noninterest-
bearing liabilities 33,018
Stockholders' equity 279,259
-------
Total liabilities and
stockholders' equity $3,582,169
==========
Excess of interest-earning assets
over interest-bearing
liabilities $344,287
========
Net interest and dividend income $26,380
=======
Interest rate spread 3.11%
====
Net interest margin 3.31%
====
Three months ended
------------------
Sept 30, 2008
------------------
Average Interest & Yield/
Balance Dividends Rate (a)(b)
------- --------- -----------
Assets:
Interest-earning assets:
Loans: (f) (l)
Commercial real
estate loans $765,596 $11,202 5.85%
Residential real
estate loans (n) 435,983 6,453 5.92
Commercial loans 843,687 12,635 5.99
Consumer loans 284,215 4,393 6.15
------- -----
Total loans (n) 2,329,481 34,683 6.00
Mortgage-backed
securities (d) 469,368 5,904 5.03
Investment
securities (d)(e) 34,410 376 4.37
Other interest-
earning assets (o) 44,639 374 3.33
------ ---
Total interest-
earning assets 2,877,898 41,337 5.78
------
Allowance for loan losses (28,246)
Cash and due from banks 65,650
Cash in non-owned ATMs 176,441
Bank owned life insurance 58,769
Other noninterest-earning
assets 63,647
------
Total assets $3,214,159
==========
Liabilities and Stockholders'
Equity:
Interest-bearing liabilities:
Interest bearing deposits:
Interest-bearing demand $172,650 $238 0.55%
Money market 290,027 1,176 1.61
Savings 195,758 150 0.30
Customer time deposits 521,807 4,490 3.42
------- -----
Total interest-bearing
customer deposits 1,180,242 6,054 2.04
Other jumbo certificates
of deposit 91,682 671 2.91
Brokered deposits 316,049 2,211 2.78
------- -----
Total interest-
bearing deposits 1,587,973 8,936 2.24
FHLB of Pittsburgh
advances 823,750 7,235 3.44
Trust preferred
borrowings 67,011 747 4.36
Other borrowed funds 194,929 1,112 2.28
------- -----
Total interest-
bearing liabilities 2,673,663 18,030 2.70
------
Noninterest-bearing
demand deposits 286,128
Other noninterest-
bearing liabilities 32,895
Stockholders' equity 221,473
-------
Total liabilities and
stockholders' equity $3,214,159
==========
Excess of interest-earning assets
over interest-bearing
liabilities $204,235
========
Net interest and dividend income $23,307
=======
Interest rate spread 3.08%
====
Net interest margin 3.28%
====
See "Notes"
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
(Dollars in thousands, except per share data)
(Unaudited)
Three months ended Nine months ended
------------------ -----------------
September June September September September
30, 30, 30, 30, 30,
2009 2009 2008 2009 2008
---- ---- ---- ---- ----
Stock Information:
Market price of
common stock:
High $32.49 $33.12 $62.44 $48.49 $62.44
Low 26.17 21.31 41.54 17.34 41.54
Close 26.64 27.31 60.00 26.64 60.00
Book value per share 42.84 43.92 36.15
Tangible book value
per share 40.89 41.69 35.43
Tangible common book
value per share 33.45 33.19 35.43
Number of common
shares
outstanding (000s) 7,075 6,191 6,180
---------------- ----- ----- -----
Other Financial Data:
One-year repricing
gap to total
assets (m) 1.00% (0.24)% (0.85)%
Weighted average
duration of the
MBS portfolio 2.6 years 2.5 years 2.9 years
Unrealized losses
on securities
available-for-sale,
net of taxes $(1,653) $(8,413) $(9,425)
Number of
associates (FTEs) 648 670 645
Number of branch
offices 37 37 31
Number of WSFS
owned ATMs 345 341 313
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.
(o) The FHLB has suspended dividends payments as of December 31, 2008.
SOURCE WSFS Financial Corporation