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WSFS Reports 4th Quarter And Full Year 2012 Net Income; Full Year EPS Increased 43% Above 2011 Levels; ROA Improved 30% Over 2011

Capital management

The Company grew stockholders' equity by $3.3 million to $421.1 million at December 31, 2012, which included quarterly earnings partially offset by dividends paid during the quarter and a decrease in the value of the investment portfolio.

Tangible common book value per share was $38.21 at December 31, 2012, a $0.22, or 1%, increase from $37.99 reported at September 30, 2012. The Company's tangible common equity ratio was 7.72% at December 31, 2012 compared to 7.85% at September 30, 2012. This slight decrease was driven by growth in the balance sheet during the quarter, mainly from the Company's success in commercial lending.

At December 31, 2012, the Bank's Tier 1 leverage ratio was 9.83%, Tier 1 risk-based ratio was 13.04% and total risk-based capital ratio was 14.29% and all maintained a substantial cushion in excess of "well-capitalized" regulatory benchmarks. $62.2 million in cash remains at the holding company as of December 31, 2012. 

The Board of Directors approved a quarterly cash dividend of $0.12 per common share. This dividend will be paid on February 22, 2013, to shareholders of record as of February 8, 2013.

Fourth quarter 2012 earnings release conference call

Management will conduct a conference call to review fourth quarter results at 1:00 p.m. Eastern Standard Time (EST) on Friday, February 1, 2013. 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 conference call, until February 9, 2013, by calling 1-855-859-2056 and using Conference ID 91037034.

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 $4.4 billion in assets on its balance sheet and $17.0 billion in fiduciary assets, including approximately $1.1 billion in assets under management. WSFS operates from 51 offices located in Delaware (42), Pennsylvania (7), 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 and Cash Connect. Serving the Delaware Valley since 1832, WSFS is the seventh oldest bank in the United States continuously operating under the same name. For more information, please visit www.wsfsbank.com.

This report contains estimates, predictions, opinions, projections and other statements that may be interpreted as "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 also 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; 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, tornados 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 related acceleration of premium amortization on those securities; and the costs associated with resolving any problem loans, litigation and other risks and uncertainties, discussed in 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)
(Unaudited) Three months ended  Twelve months ended
  Dec 31, 2012  Sept 30, 2012  Dec 31, 2011 Dec 31, 2012  Dec 31, 2011
Interest income:          
Interest and fees on loans  $32,341   $32,003   $33,223   $130,526   $130,922 
Interest on mortgage-backed securities  4,238   4,344   6,196   19,191   27,158 
Interest and dividends on investment securities  174   158   150   509   546 
Other interest income  34   9   16   61   16 
   36,787   36,514   39,585   150,287   158,642 
Interest expense:          
Interest on deposits  2,449   3,237   4,255   13,101   19,131 
Interest on Federal Home Loan Bank advances  1,267   1,403   2,106   6,252   9,972 
Interest on trust preferred borrowings  366   369   360   1,480   1,375 
Interest on other borrowings  1,207   612   448   2,455   2,127 
   5,289   5,621   7,169   23,288   32,605 
Net interest income  31,498   30,893   32,416   126,999   126,037 
Provision for loan losses  3,674   3,751   6,948   32,053   27,996 
Net interest income after provision for loan losses  27,824   27,142   25,468   94,946   98,041 
Noninterest income:          
Credit/debit card and ATM income  5,904   5,738   5,477   22,935   21,026 
Deposit service charges  4,460   4,360   4,396   17,133   16,371 
Wealth management income  3,594   3,258   3,004   13,310   11,881 
Loan fee income  537   706   589   2,340   2,460 
Mortgage banking activities, net  964   914   489   2,846   1,524 
Bank-owned life insurance income  97   1,126   240   1,544   2,035 
Securities gains, net  3,628   2,451   1,925   21,425   4,878 
Other income  2,011   1,195   876   5,160   3,413 
   21,195   19,748   16,996   86,693   63,588 
Noninterest expenses:          
Salaries, benefits and other compensation  16,207   16,942   15,257   66,047   59,823 
Occupancy expense  3,384   3,235   3,110   13,081   12,054 
Equipment expense  1,760   1,701   1,720   7,163   6,915 
Loan workout and OREO expense  1,953   2,115   2,907   6,855   8,896 
Data processing and operations expense  1,391   1,402   1,314   5,581   5,340 
FDIC expenses  1,396   1,384   1,471   5,658   5,949 
Professional fees  1,192   671   1,855   4,109   5,829 
Marketing expense  680   379   856   2,656   4,302 
Acquisition integration costs  --   --   --   --   780 
Debt extinguishment  3,662   --   --   3,662   -- 
Other operating expenses  5,561   4,324   4,536   18,533   17,589 
   37,186   32,153   33,026   133,345   127,477 
Income before taxes  11,833   14,737   9,438   48,294   34,152 
Income tax provision  4,275   4,758   3,276   16,983   11,475 
Net income  7,558   9,979   6,162   31,311   22,677 
Dividends on preferred stock and accretion of discount  693   693   693   2,770   2,770 
Net income allocable to common stockholders  $6,865   $9,286   $5,469   $28,541   $19,907 
Diluted earnings per common share:          
Net income allocable to common stockholders $0.78   $1.06  $ 0.63  $3.25  $2.28 
Weighted average common shares outstanding for diluted EPS 8,823,702  8,794,973  8,714,731   8,790,319  8,717,439 
           
Performance Ratios:          
Return on average assets (a) 0.70%  0.95%  0.59%  0.73%  0.56% 
Return on average equity (a) 7.18  9.72  6.30  7.66  5.96 
Return on tangible common equity (a) 8.48  11.73  7.41  9.15  7.03 
Net interest margin (a)(b)  3.39  3.41   3.61  3.47  3.60
Efficiency ratio (c)   70.46  63.39   66.47  62.19  66.85 
Noninterest income as a percentage of total net revenue (b) 40.16  38.93   34.21  40.43  33.34 
See "Notes" 
 
WSFS FINANCIAL CORPORATION 
FINANCIAL HIGHLIGHTS (Continued)
SUMMARY STATEMENT OF CONDITION
(Dollars in thousands)
(Unaudited) Dec 31, 2012  Sept 30, 2012  Dec 31, 2011 
       
Assets:      
Cash and due from banks  $93,629  $ 73,236  $ 70,889 
Cash in non-owned ATMs  406,627   373,577   397,119 
Investment securities (d)(e)  49,746   53,649   42,569 
Other investments   31,796   30,459   35,765 
Mortgage-backed securities (d)  870,342   868,996   829,225 
Net loans (f)(g)(m)  2,736,674   2,677,066   2,712,774 
Bank owned life insurance  62,915   62,818   63,392 
Other assets  123,419   121,531   137,275 
 Total assets  $4,375,148   $4,261,332   $4,289,008 
Liabilities and Stockholders' Equity:      
Noninterest-bearing deposits $ 631,026   $596,235  $ 525,444 
Interest-bearing deposits  2,473,296   2,301,310   2,322,050 
 Total customer deposits  3,104,322   2,897,545   2,847,494 
Brokered deposits  170,641   262,259   287,810 
 Total deposits  3,274,963   3,159,804   3,135,304 
       
Federal Home Loan Bank advances  376,310   392,870   538,682 
Other borrowings  260,956   251,953   184,938 
Other liabilities  41,865   38,910   37,951 
       
 Total liabilities  3,954,094   3,843,537   3,896,875 
       
Stockholders' equity  421,054   417,795   392,133 
       
Total liabilities and stockholders' equity  $4,375,148   $4,261,332   $4,289,008 
 
       
Capital Ratios:      
Equity to asset ratio  9.62%   9.80%   9.14% 
Tangible equity to asset ratio  8.93   9.09   8.41 
Tangible common equity to asset ratio  7.72   7.85   7.18 
Tier 1 leverage (h) (required: 4.00%; well-capitalized: 5.00%)  9.83   9.91   9.29 
Tier 1 risk-based capital (h) (required: 4.00%; well-capitalized: 6.00%)  13.04   13.02   12.18 
Total Risk-based capital (h) (required: 8.00%; well-capitalized: 10.00%)  14.29   14.28   13.43 
 
       
Asset Quality Indicators:      
       
Nonperforming Assets:      
Nonaccruing loans  $47,760   $39,940  $71,093 
Troubled debt restructuring (accruing)  10,093   10,189   8,887 
Assets acquired through foreclosure  4,622   6,996   11,695 
 Total nonperforming assets $ 62,475  $ 57,125  $ 91,675 
       
Past due loans (i) $ 786   $1,869  $ 965 
       
Allowance for loan losses  $43,922   $45,598   $53,080 
       
Ratio of nonperforming assets to total assets  1.43 %   1.34%   2.14% 
Ratio of allowance for loan losses to total gross loans (j)  1.58   1.69   1.92 
Ratio of allowance for loan losses to nonaccruing loans  92   114   75 
Ratio of quarterly net charge-offs to average gross loans (a)(f)  0.78   0.68   1.04 
Ratio of year-to-date net charge-offs      
 to average gross loans (a)(f)  1.49   1.75   1.32 
 
See "Notes" 
 
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
AVERAGE BALANCE SHEET
(Dollars in thousands)
(Unaudited) Three months ended
  Dec 31, 2012 Sept 30, 2012 Dec 31, 2011
  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: (f) (k)                  
 Commercial real estate loans   $747,102  $ 9,391  5.03%   $718,046   $8,803  4.90%   $723,029   $8,741  4.84% 
 Residential real estate loans (m)  264,867   2,812  4.25   276,681   2,980  4.31   290,316   3,326  4.58 
 Commercial loans  1,455,335   16,720  4.51   1,435,514   16,848  4.61   1,416,787   17,465  4.90 
 Consumer loans  285,399   3,418  4.76   283,704   3,372  4.73   294,679   3,691  4.97 
 Total loans (m)  2,752,703   32,341  4.71   2,713,945   32,003  4.73   2,724,811   33,223  4.92 
Mortgage-backed securities (d)  894,089   4,238  1.90   829,930   4,344  2.09   809,732   6,196  3.06 
Investment securities (d)(e)  52,798   174  1.43   53,392   158  1.27   48,175   150  1.25 
Other interest-earning assets (n)  30,854   34  0.44   31,187   9  0.11   35,866   16  0.18 
 Total interest-earning assets  3,730,444   36,787  3.95   3,628,454   36,514  4.03   3,618,584   39,585  4.41 
                   
Allowance for loan losses  (46,533)      (46,808)      (54,028)    
Cash and due from banks  72,612       70,366       71,936     
Cash in non-owned ATMs  382,291       362,332       364,297     
Bank owned life insurance  62,851       63,315       63,229     
Other noninterest-earning assets  113,988       118,330       132,658     
 Total assets  $4,315,653       $4,195,989       $4,196,676     
                   
Liabilities and Stockholders' Equity:                  
Interest-bearing liabilities:                  
Interest-bearing deposits:                  
 Interest-bearing demand  $461,841   $89  0.08%   $404,185  $ 53  0.05%  $366,364  $105  0.11% 
 Money market  791,411   402  0.20   759,944   431  0.23   759,454   604  0.32 
 Savings  387,959   71  0.07   390,275   83  0.08   375,848   250  0.26 
 Customer time deposits  650,006   1,643  1.01   716,676   2,365  1.31   754,023   3,056  1.61 
 Total interest-bearing customer deposits  2,291,217   2,205  0.38   2,271,080   2,932  0.51   2,255,689   4,015  0.71 
 Brokered deposits  229,515   244  0.42   283,345   305  0.43   234,922   240  0.41 
 Total interest-bearing deposits  2,520,732   2,449  0.39   2,554,425   3,237  0.50   2,490,611   4,255  0.68 
                   
FHLB of Pittsburgh advances  466,175   1,267  1.06   389,745   1,403  1.41   567,969   2,106  1.45 
Trust preferred borrowings  67,011   366  2.14   67,011   369  2.15   67,011   360  2.10 
Senior Debt  55,000   943  6.71   20,924   353  6.60   --   --  -- 
Other borrowed funds  131,303   264  0.80   129,293   259  0.80   124,282   448  1.44 
 Total interest-bearing liabilities  3,240,221   5,289  0.65   3,161,398   5,621  0.71   3,249,873   7,169  0.88 
                   
Noninterest-bearing demand deposits  620,320       590,133       515,428     
Other noninterest-bearing liabilities  33,993       33,757       40,229     
Stockholders' equity  421,119       410,701       391,146     
Total liabilities and stockholders' equity  $4,315,653      $ 4,195,989      $ 4,196,676     
                   
Excess of interest-earning assets                  
 over interest-bearing liabilities  $490,223      $ 467,056       $368,711     
                   
Net interest and dividend income    $31,498      $ 30,893       $32,416   
                   
Interest rate spread      3.30%       3.32%       3.53% 
                   
Net interest margin      3.39%       3.41%       3.61% 
                   
See "Notes" 
 
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
(Dollars in thousands, except per share data)
(Unaudited) Three months ended Twelve months ended
  Dec 31, 2012  Sep 30, 2012  Dec 31, 2011  Dec 31, 2012  Dec 31, 2011 
Stock Information:          
Market price of common stock:          
 High  $43.99   $44.00   $40.92  $44.00  $49.57 
 Low 41.12  38.66  30.22  35.98  30.22 
 Close 42.25  41.28  35.96  42.25  35.96 
Book value per common share 47.99  47.84  45.19     
Tangible book value per common share 44.19  43.99  41.24     
Tangible common book value per common share 38.21  37.99  35.20     
Number of common shares outstanding (000s) 8,773  8,734  8,678     
Other Financial Data:          
One-year repricing gap to total assets (l)  (1.02)% 3.13%  1.54%     
Weighted average duration of the MBS portfolio 5.0 years 4.2 years 3.6 years    
Unrealized gains (losses) on securities available-for-sale, net of taxes  $13,415    $17,805    $11,673      
Number of Associates (FTEs) (o) 763  754  767     
Number of offices (branches, LPO's and operations centers) 51  51  49     
Number of WSFS owned ATMs 440  431  415     
 
           
Non-GAAP Reconciliation (q): Three months ended    
  Dec 31, 2012  Sep 30, 2012  Dec 31, 2011     
Interest Income (GAAP)  $31,498   $30,893   $32,416     
Noninterest Income (GAAP)  21,195   19,748   16,996     
Less: Billing change (Cash Connect)  (660)  --    --      
Less: Securities gains  (3,628)  (2,451)  (1,925)    
Less: Unanticipated BOLI income  --    (1,007)  --      
Normalized noninterest income  16,907   16,290   15,071     
Normalized net revenue  $48,405   $47,183   $47,487     
           
Normalized noninterest income as a percentage of total net revenue 34.9% 34.5% 31.7%    
           
 
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) Includes reverse mortgages.
(f) Net of deferred fees.
(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) Nonperforming loans are included in average balance computations.
(l) 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.
(m) Includes loans held-for-sale arising from the normal course of business.
(n) The FHLB of Pittsburgh had suspended dividend payments from December 31, 2008 until February 22, 2012.
(o) Includes summer Associates, when applicable.
(p) Includes loans held-for-sale in conjunction with asset disposition strategies.
(q) 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. 
CONTACT: Investor Relations Contact: Stephen A. Fowle
         (302) 571-6833
         sfowle@wsfsbank.com
         Media Contact: Stephanie Heist
         (302) 571-5259
         sheist@wsfsbank.com

Stock quotes in this article: WSFS 

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