WILMINGTON, Del., Jan. 30, 2014 (GLOBE NEWSWIRE) -- WSFS Financial Corporation (Nasdaq:WSFS), the parent company of WSFS Bank, reported net income of $12.1 million, or $1.33 per diluted common share for the fourth quarter of 2013 compared to $14.2 million, or $1.54 per diluted common share for the third quarter of 2013, and $7.6 million, or $0.78 per diluted common share for the fourth quarter of 2012. The fourth quarter 2013 EPS represents a 71% improvement from prior-year levels.
Net income for the full year of 2013 was $46.9 million, up 50% from $31.3 million for the full year of 2012. Earnings per share were $5.06 per diluted common share for 2013, 56% greater than the $3.25 per diluted common share reported for the full year 2012.
Highlights for the fourth quarter of 2013:
- Return on assets (ROA) reached 1.09% and return on tangible common equity (ROTCE) was 14.5%.
- Total net loans grew $93.9 million or 13% (annualized) from third quarter level. All loan categories increased during the fourth quarter.
- Net interest income increased to $34.5 million in the fourth quarter of 2013, $1.1 million, or 14% (annualized) above net income recorded for the third quarter of 2013. The net interest margin increased 7 basis points to 3.68% from 3.61% in the third quarter of 2013.
- Core noninterest income(o) increased $501,000, or 3% (not annualized), from third quarter 2013 levels reflecting improvement across most business segments.
- Major credit quality statistics showed continued improvement during the quarter, including nonperforming assets, classified and criticized loan ratios, delinquency, and net charge offs.
Notable items:
- WSFS realized $660,000, or $0.05 per diluted common share (after tax) in net gains on securities sales, compared to $306,000, or $0.02 per diluted common share (after tax), in the third quarter of 2013 and $3.6 million, or $0.26 per diluted common share (after tax), in the fourth quarter 2012.
- WSFS recorded $525,000, or $0.04 per diluted common share (after tax) in expenses related to corporate development activities. These were largely professional fees related to the Array Financial Group / Arrow Land Transfer Company acquisition ("Array" and "Arrow") which closed during the third quarter of 2013, the pending merger of First Wyoming Financial Corp ("First Wyoming") announced during the fourth quarter of 2013, and activities related to calling and consolidating of the equity tranche of a 2002 reverse mortgage trust transaction. This compares to $193,000, or $0.01 per share, of corporate development costs during the third quarter of 2013.
CEO outlook and commentary:
Mark A. Turner, President and CEO, said, "We finished 2013 with another strong quarter, with momentum accelerating in key operating areas as we ended the year. Earnings per share improved 56% over full year 2012 and 71% from fourth quarter 2012 levels. Our ROA was 1.07% for the full year and 1.09% in the fourth quarter. Further, 2013 represents our best year for both net income and ROA since 2007.
"This success was driven by fundamental growth in almost every aspect of our franchise, including improvement in net interest income and fee income, improvement in credit costs, careful expense management, as well as the benefits from prudent acquisitions of businesses and special assets.
"With respect to those corporate development activities, the fourth quarter of 2013 marks the first full quarter of results that include contributions of nearby Pennsylvania-based Array and Arrow to the revenues from our mortgage banking business as well a full quarter's benefit from our call and consolidation of the reverse mortgage loans. In addition, during the quarter we announced our agreement to combine with the First National Bank of Wyoming (DE). We look forward to increasing our presence in Kent County, achieving the #2 ranking in market share for deposits, further strengthening our retail, commercial and small business teams and adding important relationships to our banking franchise. Excluding transaction costs, we expect each of these activities to be meaningfully accretive during their first year of operation.
"Our fourth quarter and full year 2013 results reflect a significant step towards our goal of becoming a sustainably high-performing company. Our prior investments in Associates, infrastructure, products and businesses, combined with our strategy of 'Engaged Associates delivering Stellar Service growing Customer Advocates and value for our Owners' is key to the progress we have made and will continue to be key in achieving that goal. We look forward to continuing our growth and improvement in performance in 2014."
Fourth Quarter 2013 Discussion of Financial Results
Net interest margin continues to expand
The net interest margin for the fourth quarter of 2013 was 3.68%, a 7 basis point increase from 3.61% reported for the third quarter of 2013. Net interest income for the fourth quarter of 2013 was $34.5 million, a $1.1 million, or 14% (annualized) improvement from the third quarter of 2013. Compared to the fourth quarter of 2012, the net interest margin increased a significant 29 basis points and net interest income increased $3.0 million or 10%.
The third and fourth quarter of 2013 benefited from consolidation of the reverse mortgage trust late in the third quarter of 2013. The reverse mortgage loans had a positive net impact of $1.2 million on net interest income in the fourth quarter, or 9 basis points in margin, compared to $514,000, or 5 basis points in margin in the third quarter of 2013. The Company expects meaningful reverse mortgage income to continue in future periods; however, this income may vary significantly from period to period depending on the timing of cash flows and collateral valuations. Aside from the benefit of the reverse mortgages, the increase in margin from prior quarters was also due to franchise loan growth and continued prudent balance sheet management.
Loan portfolio grew at a strong 13% annualized rate
Total net loans were $2.9 billion at December 31, 2013, an increase of $93.9 million, or 13% (annualized) compared to the prior quarter-end. The growth was in all categories with significant increases in Commercial & Industrial (C&I) loans of $53.2 million, or 14% (annualized), and Consumer loans of $14.2 million, or 20% (annualized).
Total net loans at December 31, 2013 increased $199.8 million, or 7%, compared to December 31, 2012. The year-over-year increase includes $121.4 million, or 8%, growth in C&I loans and a $93.1 million, or 15%, increase in Commercial Real Estate (CRE) loans.
The following table summarizes loan balances and composition at December 31, 2013 compared to prior periods.
| (Dollars in thousands) |
At December 31, 2013 |
At September 30, 2013 |
At December 31, 2012 |
|||
| Commercial & industrial | $ 1,595,888 | 54 % | $ 1,542,714 | 54 % | $ 1,474,500 | 54 % |
| Commercial real estate | 718,972 | 24 | 707,762 | 25 | 625,908 | 23 |
| Construction | 105,460 | 4 | 102,119 | 4 | 132,879 | 5 |
| Total commercial loans | 2,420,320 | 82 | 2,352,595 | 83 | 2,233,287 | 82 |
| Residential mortgage | 254,324 | 9 | 242,582 | 9 | 257,559 | 9 |
| Consumer | 303,067 | 10 | 288,854 | 10 | 289,750 | 11 |
| Allowance for loan losses | (41,244) | (1) | (41,431) | (2) | (43,922) | (2) |
| Net Loans | $ 2,936,467 | 100 % | $ 2,842,600 | 100 % | $ 2,736,674 | 100 % |
Credit Quality metrics improved broadly
Credit quality metrics continued to improve in the fourth quarter of 2013 as significant progress was made toward resolution of larger problem loans with minimal new migration to nonperforming assets. Nonperforming assets improved $8.7 million from the third quarter of 2013, or 15% (not annualized), to $47.8 million, or 1.06% of assets. In addition, delinquencies (including nonperforming delinquencies) improved $30.6 million, or 58%, to 0.75% of total loans. (The improvement in delinquent loans includes the $19.0 million relationship mentioned as delinquent in the third quarter earnings release which was brought current in December 2013. Still classified a substandard loan, the status of this seasonal business will continue to be evaluated month-to-month.)
For the quarter, net charge-offs declined $554,000 to $1.5 million, and were an annualized 0.20% of loans, reaching the lowest level of quarterly net charge-offs since the second quarter of 2008. The ratio of total classified loans to Tier 1 capital plus allowance for loan losses ('ALLL') also improved to 29.69% from 30.75% in the third quarter of 2013.
Total credit costs (provision for loan losses, loan workout expenses, OREO expenses and other credit reserves) were $2.3 million during the quarter ended December 31, 2013. This was essentially unchanged from the previous quarter, as broad improvement in portfolio credit metrics was offset by higher OREO write downs for assets which are expected to be disposed of in the near term.
The ALLL was essentially unchanged from the third quarter of 2013 at $41.2 million. The ratio of the ALLL to total gross loans decreased slightly to 1.40% at December 31, 2013 from 1.44% at September 30, 2013, due to loan growth, and improved to 133% of nonaccruing loans.
Customer funding changes reflect continued strength in core deposits and flow of temporary year-end trust accounts
Customer funding was $3.0 billion at December 31, 2013, an increase of $59.5 million, or 2% (not annualized), over levels reported at September 30, 2013. This growth included an increase in core deposits of $122.7 million, or 5% (not annualized), over the same period, which included $115.0 million in temporary trust-related money market deposits. Partially offsetting this increase was a $50.1 million purposeful reduction in higher-cost, generally single-service CDs.
Customer funding decreased $89.6 million, or 3%, from December 31, 2012 balances. This decrease was mainly due to $153.1 million of purposeful reductions in higher-cost CDs and a lower level of temporary trust-related money market deposits of $26.2 million, partially offset by growth in core deposits of $93.2 million or 4%.
Core deposits now represent a robust 84% of total customer funding at December 31, 2013, and no-cost and low-cost demand deposit accounts represent a strong 42% of total customer funding compared to 37% at December 31, 2012.
The following table summarizes customer funding balances and composition at December 31, 2013 compared to prior periods.
| (Dollars in thousands) |
At December 31, 2013 |
At September 30, 2013 |
At December 31, 2012 |
|||||
| Noninterest demand | $ 650,256 | 21 % | $ 609,115 | 21 % | $ 631,026 | 20 % | ||
| Interest-bearing demand | 638,403 | 21 | 669,173 | 22 | 538,195 | 17 | ||
| Savings | 383,731 | 13 | 378,397 | 13 | 389,977 | 12 | ||
| Money market | 887,715 | 29 | 780,753 | 26 | 933,901 | 30 | ||
| Total core deposits | 2,560,105 | 84 | 2,437,438 | 82 | 2,493,099 | 79 | ||
| Customer time | 458,110 | 15 | 508,161 | 17 | 611,223 | 20 | ||
| Total customer deposits | 3,018,215 | 99 | 2,945,599 | 99 | 3,104,322 | 99 | ||
| Customer sweep accounts | 23,710 | 1 | 36,807 | 1 | 27,218 | 1 | ||
| Total customer funding | $ 3,041,925 | 100 % | $ 2,982,406 | 100 % | $ 3,131,540 | 100 % | ||
Noninterest income growth reflects continued business growth
During the fourth quarter of 2013, the Company earned noninterest income of $19.8 million, a decrease of $2.9 million compared to $22.7 million in the third quarter of 2013. Excluding net securities gains in both periods as well as the one-time reverse mortgage consolidation gain recorded during the third quarter, noninterest income increased $501,000, or 3% (not annualized), when compared to the third quarter of 2013. This growth was primarily the result of a $236,000 increase in mortgage banking revenues, a $164,000 increase in deposit service charges, and a $139,000 increase in loan fee income.
Noninterest income decreased $1.4 million from the same period a year ago. Excluding net securities gains in both periods, noninterest income increased by $1.6 million, or 9% from the same period in 2012. This increase was primarily the result of: growth in investment management and fiduciary revenue, which increased $311,000, or 9%; growth in credit/debit card and ATM income (largely related to the Cash Connect® ATM division), which increased $215,000, or 4%; growth in mortgage banking revenue, which increased $179,000, or 19%, (these revenues include $885,000 from a full quarter of Array/Arrow results); and higher deposit service charges, which increased $111,000, or 2%.
Noninterest expense reflects careful management of operating expenses
Noninterest expense for the fourth quarter of 2013 totaled $34.6 million compared to $32.8 million for the third quarter of 2013, an increase of $1.8 million, or 5%. Included in this increase was $684,000 of additional performance-driven incentive compensation, a $612,000 increase in loan workout and OREO expense; and a $332,000 increase in corporate development related costs (primarily professional fees).
Noninterest expense for the fourth quarter of 2013 decreased $2.6 million, or 7% from the same period in 2012. Excluding the one-time debt extinguishment costs recorded during the fourth quarter of 2012, noninterest expense increased by $1.1 million, or only 3% when compared to the same period in the prior year, despite significant growth in core revenue, corporate development expenses of $525,000 and increased performance-related incentive expense. In addition, this was the first full quarter of operating results for Array / Arrow, which added $492,000 of noninterest expense.
Selected Business Segments (included in previous results):
Wealth Management division fee revenue grew by 12% over the prior year
The Wealth Management division provides a broad array of fiduciary, investment management, credit and deposit products to clients through four businesses. WSFS Investment Group, Inc. provides insurance and brokerage products primarily to our retail banking clients. Cypress Capital Management, LLC is a registered investment advisor with over $614 million in assets under management. Cypress' primary market segment is high net worth individuals, offering a 'balanced' investment style focused on preservation of capital and current income. Christiana Trust, with $8.8 billion in assets under administration,provides fiduciary and investment services to personal trust clients, and trustee, agency, custodial and commercial domicile services to corporate and institutional clients. WSFS Private Banking serves high net worth clients by delivering credit and deposit products and partnering with Cypress, Christiana and WSFS Investment Group to deliver investment management and fiduciary products and services.
Total wealth management revenue (net interest income, investment management and fiduciary revenue plus other noninterest income generated by the segment) was $7.0 million during the fourth quarter of 2013. This represented an increase of $237,000, or 4% (not annualized), compared to the third quarter of 2013 and an increase of $673,000, or 11%, compared to the fourth quarter of 2012. Fee revenue increased $218,000 compared to the third quarter of 2013 and $440,000, or 12%, compared to the fourth quarter of 2012. This growth reflects the continued expansion of the corporate and personal trust business lines, as well as more extensive jumbo mortgage product offerings for Private Banking clients provided by the Array acquisition. Total segment noninterest expense (including intercompany allocations of expense and provision for loan losses) was $4.9 million during the fourth quarter of 2013 compared to $3.6 million during the third quarter of 2013 and $3.4 million during fourth quarter 2012. This increase was mainly due to higher credit costs and increased personnel expenses to support significant growth in the business. The increased credit costs are the result of higher OREO write-downs during the fourth quarter of 2013 on soon-to-be-disposed assets, combined with the impact of net recoveries in both prior comparable periods. Pre-tax income for the Wealth Management division in the fourth quarter of 2013 was $1.9 million compared to $3.1 million in the third quarter 2013 and $2.9 million in the fourth quarter 2012. Excluding credit costs, pre-tax income for the fourth quarter 2013 was $2.4 million compared to $2.8 million in the third quarter 2013 and $1.3 million in the fourth quarter 2012.
Cash Connect growth reflects seasonal growth and new customers and product offerings
The Cash Connect® division is a premier provider of ATM vault cash and related services in the United States. Cash Connect® services over $476 million in vault cash in nearly 15,000 non-bank ATMs nationwide and operates more than 450 ATMs for WSFS Bank, which has the largest branded ATM network in Delaware.
Cash Connect® recorded $6.2 million in net revenue (fee income less funding costs) during the fourth quarter of 2013, which was unchanged compared to the third quarter of 2013 and an increase of $880,000, or 17%, compared to the fourth quarter of 2012 due to growth in bailments and additional product and service offerings. Noninterest expenses (including intercompany allocations of expense) were $3.9 million during the fourth quarter of 2013, a decrease of $122,000 compared to the third quarter of 2013, and an increase of $525,000from the fourth quarter of 2012. Cash Connect® reported pre-tax income of $2.3 million for the fourth quarter of 2013, compared to $2.2 million in the third quarter of 2013, and $1.8 million in the fourth quarter of 2012. The increase in bottom-line results was due to continued fundamental growth in this business line.
Income taxes
The Company recorded a $6.4 million income tax provision in the fourth quarter of 2013 compared to $7.2 million in the third quarter of 2013 and $4.3 million in the fourth quarter of 2012. The Company's effective tax rate for the fourth quarter of 2013 was 35%, compared to 34% in the third quarter of 2013, and 36% during the fourth quarter of 2012.
Positive Subsequent Event
As a result of consolidation of the reverse mortgage trust during the third quarter of 2013, a deferred tax asset ("DTA") was recorded at that time. However, because the reverse mortgage trust was not able to be consolidated for income tax purposes, a full valuation allowance was also recorded at that time on the DTA due to the uncertainty of realizing this benefit. On January 27, 2014, WSFS completed the legal call of the reverse mortgage trust bonds and the redemption of the trust's preferred shareholders, eliminating this uncertainty since the reverse mortgage trust's assets have now been combined with the Bank's for tax purposes. As a result, WSFS has removed the valuation allowance, and recorded a tax benefit of approximately $6.6 million during January 2014. This will positively impact diluted EPS and tangible book value per share by approximately $0.74 in the first quarter 2014 results.
Capital management
The Company's tangible common equity increased to $344.1 million at December 31, 2013 from $334.4 million at September 30, 2013. Tangible common book value per share was $38.68 at December 31, 2013, a $0.87 increase from $37.81 reported at September 30, 2013. The Company's tangible common equity to asset ratio increased 10 basis points to 7.69% from 7.59%.
The Company's total stockholders' equity increased to $383.1 million at December 31, 2013 from $374.0 million at September 30, 2013, primarily due to earnings in the quarter, partially offset by an unrealized loss in the value of the investment portfolio (interest rate related) and dividends paid.
At December 31, 2013, WSFS Bank's Tier 1 leverage ratio of 10.35%, Tier 1 risk-based ratio of 13.16% and total risk-based capital ratio of 14.36%, all increased from the prior quarter and all were substantially in excess of "well-capitalized" regulatory benchmarks.
The Board of Directors approved a quarterly cash dividend of $0.12 per share of common stock. This dividend will be paid on February 28, 2014, to shareholders of record as of February 14, 2014.
Fourth quarter 2013 earnings release conference call
Management will conduct a conference call to review fourth quarter results at 1:00 p.m. Eastern Time (ET) on January 31, 2014. Interested parties may listen to this call by dialing 1-877-312-5857. A rebroadcast of the conference call will be available two hours after the completion of the call, until February 8, 2014, by dialing 1-855-859-2056 and using Conference ID 38614537.
About WSFS Financial Corporation
WSFS Financial Corporation is a multi-billion dollar financial services company. Its primary subsidiary, WSFS Bank, is the oldest, locally-managed bank and trust company headquartered in Delaware with $4.5 billion in assets on its balance sheet and $8.8 billion in fiduciary assets, including approximately $1.1 billion in assets under management. WSFS operates from 51 offices located in Delaware (41), Pennsylvania (8), Virginia (1) and Nevada (1) and provides comprehensive financial services including commercial banking, retail banking and trust and wealth management. Other subsidiaries or divisions include Christiana Trust, WSFS Investment Group, Inc., Cypress Capital Management, LLC, Cash Connect® and Array Financial. Serving the Delaware Valley since 1832, WSFS Bank is the seventh oldest bank in the United States continuously operating under the same name. For more information, please visit www.wsfsbank.com.
Forward-Looking Statement Disclaimer
This press release contains estimates, predictions, opinions, projections and other "forward-looking statements" as that phrase is defined in the Private Securities Litigation Reform Act of 1995. Such statements include, without limitation, references to the Company's financial goals, management's plans and objectives for future operations, financial and business trends, business prospects, and management's outlook or expectations for earnings, revenues, expenses, capital levels, liquidity levels, asset quality or other future financial or business performance, strategies or expectations. Such forward-looking statements are based on various assumptions (some of which may be beyond the Company's control) and are subject to risks and uncertainties (which change over time) 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, including an increase in unemployment levels; the volatility of the financial and securities markets, including changes with respect to the market value of financial assets; changes in market interest rates may increase funding costs and reduce earning asset yields thus reducing margin; increases in benchmark rates would increase debt service requirements for customers whose terms include a variable interest rate, which may negatively impact the ability of borrowers to pay as contractually obligated; changes in government regulation affecting financial institutions, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules being issued in accordance with this statute and potential expenses and elevated capital levels associated therewith; possible additional loan losses and impairment of the collectability of loans; seasonality, which may impact customers, such as construction-related businesses, the availability of public funds, and certain types of the Company's fee revenue, such as mortgage originations; possible changes in trade, monetary and fiscal policies, laws and regulations and other activities of governments, agencies, and similar organizations, may have an adverse effect on business; possible rules and regulations issued by the Consumer Financial Protection Bureau or other regulators which might adversely impact our business model or products and services; possible stresses in the real estate markets, including possible continued deterioration in property values that affect the collateral value of underlying real estate loans; the Company's ability to expand into new markets, develop competitive new products and services in a timely manner and to maintain profit margins in the face of competitive pressures; possible changes in consumer and business spending and savings habits could affect the Company's ability to increase assets and to attract deposits; the Company's ability to effectively manage credit risk, interest rate risk market risk, operational risk, legal risk, liquidity risk, reputational risk, and regulatory and compliance risk; the effects of increased competition from both banks and non-banks; the effects of geopolitical instability and risks such as terrorist attacks; the effects of weather and natural disasters such as floods, droughts, wind, tornadoes and hurricanes, and the effects of man-made disasters; possible changes in the speed of loan prepayments by the Company's customers and loan origination or sales volumes; possible acceleration of prepayments of mortgage-backed securities due to low interest rates, and the related acceleration of premium amortization on prepayments on mortgage-backed securities due to low interest rates; and the costs associated with resolving any problem loans, litigation and other risks and uncertainties, discussed in the Company's Form 10-K for the year ended December 31, 2012 and other documents filed by the Company with the Securities and Exchange Commission from time to time. Forward looking statements are as of the date they are made, and the Company 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 Company.
| WSFS FINANCIAL CORPORATION | ||||||||||
| FINANCIAL HIGHLIGHTS | ||||||||||
| STATEMENT OF OPERATIONS | ||||||||||
| (Dollars in thousands, except per share data) | Three months ended | Twelve months ended | ||||||||
| (Unaudited) |
December 31, 2013 |
September 30, 2013 |
December 31, 2012 |
December 31, 2013 |
December 31, 2012 |
|||||
| Interest income: | ||||||||||
| Interest and fees on loans | $ 32,871 | $ 32,708 | $ 32,341 | $ 129,138 | $ 130,526 | |||||
| Interest on reverse mortgage loans and securities (n) | 1,343 | 514 | 279 | 2,565 | 655 | |||||
| Interest on mortgage-backed securities | 3,270 | 3,261 | 4,012 | 13,237 | 18,548 | |||||
| Interest and dividends on investment securities | 693 | 546 | 121 | 1,692 | 498 | |||||
| Other interest income | 257 | 87 | 34 | 391 | 60 | |||||
| 38,434 | 37,116 | 36,787 | 147,023 | 150,287 | ||||||
| Interest expense: | ||||||||||
| Interest on deposits | 1,666 | 1,673 | 2,449 | 7,180 | 13,101 | |||||
| Interest on Federal Home Loan Bank advances | 498 | 482 | 1,267 | 1,874 | 6,252 | |||||
| Interest on trust preferred borrowings | 336 | 339 | 366 | 1,342 | 1,480 | |||||
| Interest on Senior Debt | 942 | 943 | 943 | 3,771 | 1,296 | |||||
| Interest on reverse mortgage bonds payable | 161 | -- | -- | 161 | -- | |||||
| Interest on other borrowings | 285 | 273 | 264 | 1,107 | 1,159 | |||||
| 3,888 | 3,710 | 5,289 | 15,435 | 23,288 | ||||||
| Net interest income | 34,546 | 33,406 | 31,498 | 131,588 | 126,999 | |||||
| Provision for loan losses | 1,292 | 1,969 | 3,674 | 7,172 | 32,053 | |||||
| Net interest income after provision for loan losses | 33,254 | 31,437 | 27,824 | 124,416 | 94,946 | |||||
| Noninterest income: | ||||||||||
| Credit/debit card and ATM income | 6,119 | 6,374 | 5,904 | 24,350 | 22,935 | |||||
| Deposit service charges | 4,571 | 4,407 | 4,460 | 17,208 | 17,133 | |||||
| Investment management and fiduciary revenue | 3,905 | 3,836 | 3,594 | 15,528 | 13,310 | |||||
| Reverse mortgage consolidation gain | -- | 3,801 | -- | 3,801 | -- | |||||
| Mortgage banking activities, net | 1,143 | 907 | 964 | 3,980 | 2,846 | |||||
| Securities gains, net | 660 | 306 | 3,628 | 3,516 | 21,425 | |||||
| Loan fee income | 558 | 419 | 537 | 1,959 | 2,340 | |||||
| Bank-owned life insurance income | 108 | 74 | 97 | 270 | 1,544 | |||||
| Other income | 2,732 | 2,618 | 2,011 | 9,539 | 5,160 | |||||
| 19,796 | 22,742 | 21,195 | 80,151 | 86,693 | ||||||
| Noninterest expense: | ||||||||||
| Salaries, benefits and other compensation | 17,780 | 17,648 | 16,207 | 70,866 | 66,047 | |||||
| Occupancy expense | 3,317 | 3,385 | 3,384 | 13,486 | 13,081 | |||||
| Equipment expense | 2,332 | 2,044 | 1,760 | 8,322 | 7,163 | |||||
| Data processing and operations expense | 1,633 | 1,548 | 1,391 | 5,924 | 5,581 | |||||
| FDIC expenses | 425 | 959 | 1,396 | 3,492 | 5,658 | |||||
| Professional fees | 1,700 | 866 | 1,192 | 4,412 | 4,109 | |||||
| Loan workout and OREO expense | 1,104 | 492 | 1,953 | 2,536 | 6,855 | |||||
| Marketing expense | 660 | 643 | 680 | 2,428 | 2,656 | |||||
| Debt extinguishment | -- | -- | 3,662 | -- | 3,662 | |||||
| Other operating expenses | 5,647 | 5,224 | 5,561 | 21,463 | 18,533 | |||||
| 34,598 | 32,809 | 37,186 | 132,929 | 133,345 | ||||||
| Income before taxes | 18,452 | 21,370 | 11,833 | 71,638 | 48,294 | |||||
| Income tax provision | 6,378 | 7,210 | 4,275 | 24,756 | 16,983 | |||||
| Net income | 12,074 | 14,160 | 7,558 | 46,882 | 31,311 | |||||
| Dividends on preferred stock and accretion of discount | -- | 332 | 693 | 1,633 | 2,770 | |||||
| Net income allocable to common stockholders | $ 12,074 | $ 13,828 | $ 6,865 | $ 45,249 | $ 28,541 | |||||
| Diluted earnings per share of common stock: | ||||||||||
| Net income allocable to common stockholders | $ 1.33 | $ 1.54 | $ 0.78 | $ 5.06 | $ 3.25 | |||||
| Weighted average shares of common stock outstanding for diluted EPS | 9,078,228 | 8,975,826 | 8,823,702 | 8,943,246 | 8,790,319 | |||||
| Performance Ratios: | ||||||||||
| Return on average assets (a) | 1.09 % | 1.29 % | 0.70 % | 1.07 % | 0.73 % | |||||
| Return on average equity (a) | 12.64 | 14.67 | 7.18 | 11.60 | 7.66 | |||||
| Return on tangible common equity (a) (o) | 14.50 | 16.84 | 8.48 | 13.60 | 9.15 | |||||
| Net interest margin (a)(b) | 3.68 | 3.61 | 3.39 | 3.56 | 3.47 | |||||
| Efficiency ratio (c) | 63.13 | 58.04 | 70.46 | 62.42 | 62.19 | |||||
| Noninterest income as a percentage of total net revenue (b) | 36.12 | 40.23 | 40.16 | 37.64 | 40.43 | |||||
| See "Notes" | ||||||||||
| WSFS FINANCIAL CORPORATION | ||||||
| FINANCIAL HIGHLIGHTS (Continued) | ||||||
| SUMMARY STATEMENT OF CONDITION | ||||||
| (Dollars in thousands) | ||||||
| (Unaudited) |
December 31, 2013 |
September 30, 2013 |
December 31, 2012 |
|||
| Assets: | ||||||
| Cash and due from banks | $ 94,734 | $ 96,021 | $ 93,629 | |||
| Cash in non-owned ATMs | 389,360 | 406,227 | 406,627 | |||
| Investment securities (d) | 132,343 | 125,130 | 50,203 | |||
| Other investments | 36,201 | 34,073 | 31,796 | |||
| Mortgage-backed securities (d) | 684,773 | 681,796 | 863,246 | |||
| Net loans (e)(f)(l) | 2,936,467 | 2,842,600 | 2,736,674 | |||
| Reverse mortgage loans and securities | 37,327 | 40,095 | 6,639 | |||
| Bank owned life insurance | 63,185 | 63,077 | 62,915 | |||
| Other assets | 141,373 | 153,637 | 123,419 | |||
| Total assets | $ 4,515,763 | $ 4,442,656 | $ 4,375,148 | |||
| Liabilities and Stockholders' Equity: | ||||||
| Noninterest-bearing deposits | $ 650,256 | $ 609,115 | $ 631,026 | |||
| Interest-bearing deposits | 2,367,959 | 2,336,484 | 2,473,296 | |||
| Total customer deposits | 3,018,215 | 2,945,599 | 3,104,322 | |||
| Brokered deposits | 168,727 | 175,599 | 170,641 | |||
| Total deposits | 3,186,942 | 3,121,198 | 3,274,963 | |||
| Federal Home Loan Bank advances | 638,091 | 600,435 | 376,310 | |||
| Reverse Mortgage bonds payable | 21,990 | 26,340 | -- | |||
| Other borrowings | 243,750 | 274,180 | 260,956 | |||
| Other liabilities | 41,940 | 46,552 | 41,865 | |||
| Total liabilities | 4,132,713 | 4,068,705 | 3,954,094 | |||
| Stockholders' equity | 383,050 | 373,951 | 421,054 | |||
| Total liabilities and stockholders' equity | $ 4,515,763 | $ 4,442,656 | $ 4,375,148 | |||
| Capital Ratios: | ||||||
| Equity to asset ratio | 8.48 % | 8.42 % | 9.62 % | |||
| Tangible equity to asset ratio (o) | 7.69 | 7.59 | 8.93 | |||
| Tangible common equity to asset ratio (o) | 7.69 | 7.59 | 7.72 | |||
| Tier 1 leverage (g) (required: 4.00%; well-capitalized: 5.00%) | 10.35 | 10.17 | 9.83 | |||
| Tier 1 risk-based capital (g) (required: 4.00%; well-capitalized: 6.00%) | 13.16 | 13.05 | 13.04 | |||
| Total Risk-based capital (g) (required: 8.00%; well-capitalized: 10.00%) | 14.36 | 14.30 | 14.29 | |||
| Asset Quality Indicators: | ||||||
| Nonperforming Assets: | ||||||
| Nonaccruing loans | $ 30,950 | $ 38,169 | $ 47,760 | |||
| Troubled debt restructuring (accruing) | 12,332 | 11,161 | 10,093 | |||
| Assets acquired through foreclosure | 4,532 | 7,163 | 4,622 | |||
| Total nonperforming assets | $ 47,814 | $ 56,493 | $ 62,475 | |||
| Past due loans (h) | $ 533 | $ 658 | $ 786 | |||
| Allowance for loan losses | $ 41,244 | $ 41,431 | $ 43,922 | |||
| Ratio of nonperforming assets to total assets | 1.06 % | 1.27 % | 1.43 % | |||
| Ratio of allowance for loan losses to total gross loans (i) | 1.40 | 1.44 | 1.58 | |||
| Ratio of allowance for loan losses to nonaccruing loans | 133 | 109 | 92 | |||
| Ratio of quarterly net charge-offs to average gross loans (a)(e) | 0.20 | 0.28 | 0.78 | |||
| Ratio of year-to-date net charge-offs to average gross loans (a)(e) | 0.34 | 0.39 | 1.49 | |||
| WSFS FINANCIAL CORPORATION | ||||||||||||||||||
| FINANCIAL HIGHLIGHTS (Continued) | ||||||||||||||||||
| AVERAGE BALANCE SHEET | ||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||
| (Unaudited) | Three months ended | |||||||||||||||||
| December 31, 2013 | September 30, 2013 | December 31, 2012 | ||||||||||||||||
|
Average Balance |
Interest & Dividends |
Yield/Rate (a)(b) |
Average Balance |
Interest & Dividends |
Yield/Rate (a)(b) |
Average Balance |
Interest & Dividends |
Yield/Rate (a)(b) |
||||||||||
| Assets: | ||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||
| Loans: (e) (j) | ||||||||||||||||||
| Commercial real estate loans | $ 815,671 | $ 9,700 | 4.76 % | $ 818,361 | $ 9,877 | 4.83 % | $ 747,102 | $ 9,391 | 5.03 % | |||||||||
| Residential real estate loans (l) | 256,418 | 2,452 | 3.83 | 249,476 | 2,455 | 3.94 | 264,867 | 2,812 | 4.25 | |||||||||
| Commercial loans | 1,557,022 | 17,302 | 4.38 | 1,525,053 | 17,023 | 4.40 | 1,455,335 | 16,720 | 4.51 | |||||||||
| Consumer loans | 297,219 | 3,417 | 4.56 | 287,555 | 3,353 | 4.63 | 285,399 | 3,418 | 4.76 | |||||||||
| Total loans (l) | 2,926,330 | 32,871 | 4.51 | 2,880,445 | 32,708 | 4.56 | 2,752,703 | 32,341 | 4.71 | |||||||||
| Mortgage-backed securities (d) | 674,586 | 3,270 | 1.94 | 711,659 | 3,261 | 1.83 | 887,947 | 4,012 | 1.81 | |||||||||
| Investment securities (d) | 129,577 | 693 | 3.16 | 108,661 | 546 | 2.87 | 53,250 | 121 | 1.02 | |||||||||
| Reverse mortgage loans and securities (n) | 39,971 | 1,343 | 13.44 | 3,576 | 514 | 57.53 | 5,690 | 279 | 19.58 | |||||||||
| Other interest-earning assets | 33,304 | 257 | 3.06 | 38,054 | 87 | 0.91 | 30,854 | 34 | 0.44 | |||||||||
| Total interest-earning assets | 3,803,768 | 38,434 | 4.09 | 3,742,395 | 37,116 | 4.01 | 3,730,444 | 36,787 | 3.95 | |||||||||
| Allowance for loan losses | (41,817) | (42,315) | (46,533) | |||||||||||||||
| Cash and due from banks | 85,972 | 80,586 | 72,612 | |||||||||||||||
| Cash in non-owned ATMs | 387,164 | 424,125 | 382,291 | |||||||||||||||
| Bank owned life insurance | 63,115 | 63,030 | 62,851 | |||||||||||||||
| Other noninterest-earning assets | 130,857 | 131,780 | 113,988 | |||||||||||||||
| Total assets | $ 4,429,059 | $ 4,399,601 | $ 4,315,653 | |||||||||||||||
| Liabilities and Stockholders' Equity: | ||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||
| Interest-bearing demand | $ 634,274 | $ 160 | 0.10 % | $ 563,409 | $ 121 | 0.09 % | $ 461,841 | $ 89 | 0.08 % | |||||||||
| Money market | 790,602 | 292 | 0.15 | 764,973 | 238 | 0.12 | 791,411 | 402 | 0.20 | |||||||||
| Savings | 383,637 | 56 | 0.06 | 388,132 | 50 | 0.05 | 387,959 | 71 | 0.07 | |||||||||
| Customer time deposits | 481,148 | 1,018 | 0.84 | 512,689 | 1,123 | 0.87 | 650,006 | 1,643 | 1.01 | |||||||||
| Total interest-bearing customer deposits | 2,289,661 | 1,526 | 0.26 | 2,229,203 | 1,532 | 0.27 | 2,291,217 | 2,205 | 0.38 | |||||||||
| Brokered deposits | 174,056 | 140 | 0.32 | 174,690 | 141 | 0.32 | 229,515 | 244 | 0.42 | |||||||||
| Total interest-bearing deposits | 2,463,717 | 1,666 | 0.27 | 2,403,893 | 1,673 | 0.28 | 2,520,732 | 2,449 | 0.39 | |||||||||
| FHLB of Pittsburgh advances | 611,473 | 498 | 0.32 | 651,993 | 482 | 0.29 | 466,175 | 1,267 | 1.06 | |||||||||
| Trust preferred borrowings | 67,011 | 336 | 1.96 | 67,011 | 339 | 1.98 | 67,011 | 366 | 2.14 | |||||||||
| Reverse mortgage bonds payable | 25,550 | 161 | 2.47 | -- | -- | -- | -- | -- | -- | |||||||||
| Senior Debt | 55,000 | 942 | 6.85 | 55,000 | 943 | 6.86 | 55,000 | 943 | 6.71 | |||||||||
| Other borrowed funds | 147,322 | 285 | 0.77 | 133,077 | 273 | 0.82 | 131,303 | 264 | 0.80 | |||||||||
| Total interest-bearing liabilities | 3,370,073 | 3,888 | 0.46 | 3,310,974 | 3,710 | 0.45 | 3,240,221 | 5,289 | 0.65 | |||||||||
| Noninterest-bearing demand deposits | 638,716 | 669,807 | 620,320 | |||||||||||||||
| Other noninterest-bearing liabilities | 38,073 | 32,756 | 33,993 | |||||||||||||||
| Stockholders' equity | 382,197 | 386,064 | 421,119 | |||||||||||||||
| Total liabilities and stockholders' equity | $ 4,429,059 | $ 4,399,601 | $ 4,315,653 | |||||||||||||||
| Excess of interest-earning assets over interest-bearing liabilities | $ 433,695 | $ 431,421 | $ 490,223 | |||||||||||||||
| Net interest and dividend income | $ 34,546 | $ 33,406 | $ 31,498 | |||||||||||||||
| Interest rate spread | 3.63 % | 3.56 % | 3.30 % | |||||||||||||||
| Net interest margin | 3.68 % | 3.61 % | 3.39 % | |||||||||||||||
| See "Notes" | ||||||||||||||||||
| WSFS FINANCIAL CORPORATION | ||||||||||
| FINANCIAL HIGHLIGHTS (Continued) | ||||||||||
| (Dollars in thousands, except per share data) | ||||||||||
| (Unaudited) | Three months ended | Twelve months ended | ||||||||
| Stock Information: |
December 31, 2013 |
September 30, 2013 |
December 31, 2012 |
December 31, 2013 |
December 31, 2012 |
|||||
| Market price of common stock: | ||||||||||
| High | $ 79.11 | $ 62.78 | $ 43.99 | $ 79.11 | $ 44.00 | |||||
| Low | 58.02 | 53.45 | 41.12 | 43.75 | 35.98 | |||||
| Close | 77.53 | 60.25 | 42.25 | 77.53 | 42.25 | |||||
| Book value per share of common stock | 43.06 | 42.28 | 47.99 | |||||||
| Tangible book value per share of common stock | 38.68 | 37.81 | 44.19 | |||||||
| Tangible common book value per share of common stock (o) | 38.68 | 37.81 | 38.21 | |||||||
| Number of shares of common stock outstanding (000s) | 8,895 | 8,844 | 8,773 | |||||||
| Other Financial Data: | ||||||||||
| One-year repricing gap to total assets (k) | (3.28)% | (1.57)% | (1.02)% | |||||||
| Weighted average duration of the MBS portfolio | 5.3 years | 5.8 years | 5.0 years | |||||||
| Unrealized (losses) gains on securities available-for-sale, net of taxes | $ (20,822) | $ (15,606) | $ 13,415 | |||||||
| Number of Associates (FTEs) (m) | 762 | 776 | 763 | |||||||
| Number of offices (branches, LPO's, operations centers, etc.) | 51 | 51 | 51 | |||||||
| Number of WSFS owned ATMs | 457 | 454 | 440 | |||||||
| 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 at fair value. | ||||||||||
| (e) Net of unearned income. | ||||||||||
| (f) Net of allowance for loan losses. | ||||||||||
| (g) Represents capital ratios of Wilmington Savings Fund Society, FSB and subsidiaries. | ||||||||||
| (h) Accruing loans which are contractually past due 90 days or more as to principal or interest. | ||||||||||
| (i) Excludes loans held-for-sale. | ||||||||||
| (j) Nonperforming loans are included in average balance computations. | ||||||||||
| (k) 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. | ||||||||||
| (l) Includes loans held-for-sale. | ||||||||||
| (m) Includes summer Associates, when applicable. | ||||||||||
| (n) Includes all net interest income from reverse mortgages including net interest income recorded in conjunction with ownership of Class O certificates. | ||||||||||
| (o) The Company uses non-GAAP (Generally Accepted Accounting Principles) financial information in its analysis of the Company's performance. This non-GAAP data should be considered in addition to results prepared in accordance with GAAP, and is not a substitute for, or superior to, GAAP results. | ||||||||||
| WSFS FINANCIAL CORPORATION | ||||||
| FINANCIAL HIGHLIGHTS (Continued) | ||||||
| (Dollars in thousands, except per share data) | ||||||
| (Unaudited) | ||||||
| Non-GAAP Reconciliation (o): | Three months ended | |||||
|
December 31, 2013 |
September 30, 2013 |
December 31, 2012 |
||||
| Net interest Income (GAAP) | $ 34,546 | $ 33,406 | $ 31,498 | |||
| Noninterest Income (GAAP) | 19,796 | 22,742 | 21,195 | |||
| Less: Securities gains | (660) | (306) | (3,628) | |||
| Less: Reverse mortgage consolidation gain | -- | (3,801) | -- | |||
| Core noninterest income (non-GAAP) | 19,136 | 18,635 | 17,567 | |||
| Core net revenue (non-GAAP) | $ 53,682 | $ 52,041 | $ 49,065 | |||
| End of period | ||||||
|
December 31, 2013 |
September 30, 2013 |
December 31, 2012 |
||||
| Total assets | $ 4,515,763 | $ 4,442,656 | $ 4,375,148 | |||
| Less: Goodwill and other intangible assets | (38,979) | (39,541) | (33,320) | |||
| Total tangible assets | $ 4,476,784 | $ 4,403,115 | $ 4,341,827 | |||
| Total Stockholders' equity | $ 383,050 | $ 373,951 | $ 421,054 | |||
| Less: Goodwill and other intangible assets | (38,979) | (39,541) | (33,320) | |||
| Total tangible equity | 344,071 | 334,410 | 387,734 | |||
| Less: Preferred stock | -- | -- | (52,474) | |||
| Total tangible common equity | $ 344,071 | $ 334,410 | $ 335,260 | |||
| Calculation of tangible common book value: | ||||||
| Book Value (GAAP) | $ 43.06 | $ 42.28 | $ 47.99 | |||
| Tangible book value (non-GAAP) | 38.68 | 37.81 | 44.19 | |||
| Tangible common book value (non-GAAP) | 38.68 | 37.81 | 38.21 | |||
| Calculation of tangible common equity to assets: | ||||||
| Equity to asset ratio (GAAP) | 8.48 % | 8.42 % | 9.62 % | |||
| Tangible equity to asset ratio (non-GAAP) | 7.69 | 7.59 | 8.93 | |||
| Tangible common equity to asset ratio (non-GAAP) | 7.69 | 7.59 | 7.72 | |||