Noninterest income increased $4.2 million during the fourth quarter of 2012 from $17.0 million reported during the same period a year ago. Excluding the aforementioned notable items, noninterest income grew by $1.8 million, or a robust 12%.  The year-over-year increase reflected growth in most all segments of our business, as wealth management income increased $590,000, or 20%; mortgage banking activities increased $475,000, or 97%; and credit/debit card and ATM income increased $427,000, or 8%. 

Noninterest expenses

Noninterest expense for the fourth quarter of 2012 totaled $37.2 million, an increase of $5.0 million from $32.2 million in the third quarter of 2012. Excluding the notable items mentioned earlier, noninterest expense grew $711,000, or 2% and included increases of $521,000 in professional fees, $301,000 in marketing costs and $374,000 of unfunded commitment reserve, offset by a decrease of $735,000 in compensation related expenses.

Noninterest expense for the fourth quarter of 2012 increased from $33.0 million reported in the same period of 2011. Excluding notable items, noninterest expenses decreased $162,000 reflecting lower loan workout and OREO costs offset by higher salaries, benefits and other compensation. 

Niche business (included in above results)

The Cash Connect ® division is a premier provider of ATM vault cash and related services in the United States. It services over $444 million in vault cash in nearly 13,000 non-bank ATMs nationwide and also operates 440 ATMs for WSFS Bank, which has the largest branded ATM network in Delaware. Cash Connect ® recorded $5.3 million in net revenue (fee income less funding costs) during the fourth quarter of 2012. This represented an increase of $750,000 compared to the third quarter of 2012 and an increase of $1.3 million compared to the fourth quarter of 2011.  Noninterest expenses were $3.5 million during the fourth quarter of 2012, an increase of $808,000 compared to the third quarter of 2012, and an increase of $1.0 million from the fourth quarter of 2011. The increase in net revenue and expenses from the prior quarters was mainly due to the billing change discussed earlier in this release and continued growth in this division. As a result, Cash Connect ® reported pre-tax income of $1.8 million for both the fourth and third quarters of 2012, an increase from $1.5 million in the fourth quarter of 2011.

Income taxes

The Company recorded a $4.3 million income tax provision in the fourth quarter of 2012 compared to $4.8 million in the third quarter of 2012 and $3.3 million in the fourth quarter of 2011. The Company's effective tax rate for the fourth quarter of 2012 was 36%, the effective tax rate during the third quarter of 2012 was 32%, and the effective tax rate during the fourth quarter of 2011 was 35%. (The lower effective tax rate during the third quarter of 2012 primarily reflected the impact of unanticipated tax-free BOLI income and, to a lesser extent, benefits from state and federal tax credits.) 

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