Willow Grove Bancorp (NASDAQ:WGBC)
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From Jul 2019 to Jul 2024
Willow Grove Bancorp, Inc. (the "Company")
(Nasdaq/NMS:WGBC), the holding company for Willow Grove Bank (the
"Bank"), reported net income of $1.0 million, or $0.09 per diluted
share, for the first quarter ended September 30, 2005 compared to $1.8
million, or $0.19 per diluted share in the same quarter of 2004.
During the quarter, the Company completed its acquisition of Chester
Valley Bancorp and recorded several acquisition-related charges,
including $581,000 in losses resulting from the sale of investment
securities in conjunction with the restructuring of the combined
balance sheet, $348,000 in compensation charges related to an
executive contract and severance charges, and $125,000 in
merger-related customer communications expenses. The Statement of
Operations reflects only one month of the Company's combination with
Chester Valley Bancorp.
The Company's consolidated total assets were $1.6 billion at
September 30, 2005, an increase of 68.2%, or $653.8 million, from
total assets of $959.3 million at June 30, 2005. The acquisition of
Chester Valley resulted in an increase in total tangible assets of
approximately $653.4 million. Additionally, as result of the
application of purchase accounting for the acquisition, the Company
recorded an approximate $105.5 million of intangible assets, including
a $15.5 million core deposit intangible asset with the remainder
recorded as goodwill.
Donna M. Coughey, President and CEO of the Company said: "The new
Willow Grove Bank is off to a great start after closing the
acquisition of Chester Valley Bancorp this quarter. Customer
acceptance of our business model for a locally-based, customer-focused
community bank is strong and we are seeing great results from our
integration activities. Even with just one month of actual results
from the combined operations, we are confident that our projected cost
savings will be achievable. In addition, the finance department worked
hard this quarter to streamline and restructure our balance sheet.
During the quarter, we liquidated lower-yielding longer-term
investment securities and utilized a portion of the proceeds to repay
higher-rate borrowings. These actions enhanced asset sensitivity of
the balance sheet and positioned the Bank for expanding profit margins
in a rising interest rate environment."
Total deposits at quarter end were $1.0 billion, compared to
$602.7 million at fiscal year-end, an increase of 71.0%. The
integration of Chester Valley Bancorp's branch-based small business
lending product into the Willow Grove branches, which is planned for
the calendar quarter ending December 31, 2005, is expected to further
enhance the Bank's ability to generate new commercial demand deposit
accounts.
Net interest income for the quarter was $9.1 million, compared to
$7.4 million in the prior year's first quarter. The growth was
attributed primarily to growth in interest-earning assets balances
year over year. The acquisition of Chester Valley Bancorp increased
average interest earning assets during the quarter by approximately
$200 million.
The Company's net interest margin computed on a fully tax
equivalent basis was 3.46% for the quarter, a 17 basis point increase
as compared to the prior year's first quarter. Following the close of
the Chester Valley Bancorp acquisition, our net interest margin
computed on a fully tax equivalent basis expanded to 3.51% in the
month of September from Willow Grove Bancorp's run rate of 3.03% in
the first two months of the quarter. The increase was primarily a
result of the above noted balance sheet restructuring as well as the
increased interest rate sensitivity and higher interest margin of the
assets acquired from Chester Valley Bancorp.
At quarter end, total gross loans outstanding increased to nearly
$1.1 billion, which represented an annualized growth rate of 9.3% for
the combined organization in the first quarter. Loan growth was
primarily focused in commercial business loans, commercial real estate
loans and consumer loans. Credit quality of Willow Grove Bank's loan
portfolio at quarter end continued to be solid, with a ratio of
non-performing loans to total loans of 0.44% at quarter end compared
to 0.59% one year ago. The Company's allowance for loan losses totaled
$13.5 million, or 1.28% of total loans at quarter end, compared to
$6.1 million, or 1.03% of total loans at fiscal year-end.
Non-interest income was $803,000 in the first quarter, an increase
from $767,000 in the first quarter of fiscal 2004. Excluding
securities gains and losses, non-interest income increased to $1.4
million for the quarter ended September 30, 2005 compared to $755,000
for the comparable prior year period ended on September 30, 2004. The
rollout of Chester Valley Bancorp's cash management products and other
deposit service products as well as the investment management and
trust services to the Willow Grove Bank customer base is expected to
continue to drive growth in non-interest income during the fiscal year
ending on June 30, 2006. Non-interest expense was $7.9 million,
compared to $5.4 million in last year's first fiscal quarter. The
Company expects to generate $2.0 million in annualized cost savings
from the consolidation activities beginning in the quarter ending
December 31, 2005.
The Company also announced that its Board of Directors, at its
October 25, 2005 meeting, declared a $0.12 cash dividend on each share
of common stock of the Company, payable on November 22, 2005 to
shareholders of record at the close of business on November 8, 2005.
About Willow Grove Bank:
Willow Grove Bancorp, Inc. is the holding company for Willow Grove
Bank, a federally chartered savings bank. Willow Grove Bank was
founded in 1909 and operates 27 branch locations in Bustleton,
Dresher, Hatboro, Holland, Huntingdon Valley, Maple Glen, North Wales,
Rhawnhurst, Roslyn Valley, Somerton, Southampton, Warminster (two),
Willow Grove, Downingtown, Exton, Frazer, Thorndale, Westtown, Airport
Village, Brandywine Square, Devon, Kennett Square, Eagle, Coatesville,
Avondale and West Chester, Pennsylvania.
Additional information is available at: www.willowgrovebank.com.
Forward Looking Statements
The information contained in this press release may contain
forward-looking statements (as defined in the Securities Exchange Act
of 1934 and the regulations thereunder) which are not historical facts
or as to Willow Grove Bancorp, Inc. management's intentions, plans,
beliefs, expectations or opinions. Forward-looking statements may be
identified by the use of words such as "believe", "expect",
"anticipate", "intend", "plan", "estimate", "could", "may", "likely",
"probably" or "possibly". These statements include, but are not
limited to, statements regarding plans, objectives and expectations
with respect to future operations and statements regarding future
performance. Such statements are subject to certain risks and
uncertainties, many of which are difficult to predict and generally
beyond the control of Willow Grove Bancorp and its management, that
could cause actual results to differ materially from those expressed
in, or implied or projected by, the forward-looking information and
statements. Uncertainties regarding the integration of Chester
Valley's operations and the anticipated cost savings, among other
factors, could cause actual results to differ materially from the
anticipated results expressed in the forward-looking statements. Other
factors that may affect the Company's future operations are discussed
in the documents filed by Willow Grove Bancorp with the Securities and
Exchange Commission ("SEC") from time to time, including the Company's
Annual Report on Form 10-K for the fiscal year ended June 30, 2005.
Additional factors that may cause the results referenced in
forward-looking statements to differ from actual results include
general economic conditions and the interest rate yield curve, changes
in deposit flows, changes in credit quality and legislative and
regulatory changes, among other things. Copies of these documents may
be obtained from Willow Grove Bancorp upon request without charge
(except for the exhibits thereto) or can be accessed at the website
maintained by the SEC at http://www.sec.gov. Willow Grove Bancorp
undertakes no obligation to update these forward-looking statements to
reflect events or circumstances that occur after the date on which
such statements were made.
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WILLOW GROVE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in Thousands)
Unaudited
September 30, June 30,
2005 2005
-------------- -------------
Assets
Cash in banks $16,771 $6,189
Interest-bearing deposits 26,666 14,420
-------------- -------------
Total cash and cash equivalents 43,437 20,609
-------------- -------------
Trading account securities 82 53
Investment securities available for
sale 230,523 162,773
Investment securities held to maturity 120,335 164,451
Loans held for sale 5,592 1,795
Loans receivable 1,061,005 590,923
Deferred fees (1,756) (623)
Allowance for loan losses (13,545) (6,113)
-------------- -------------
Loans receivable, net 1,045,704 584,187
-------------- -------------
Accrued interest receivable 6,126 4,094
Property and equipment - net 19,639 5,659
Bank owned life insurance 11,178 5,447
Real estate owned 437 439
Goodwill and other intangibles 106,164 881
Other assets 15,592 8,867
-------------- -------------
Total Assets $1,604,809 $959,255
============== =============
Liabilities and Stockholders' Equity
Liabilities:
Deposits $1,030,711 $602,678
Securities sold under agreements to
repurchase 24,436 -
Advance payments by borrowers for
taxes and insurance 2,040 2,850
Federal Home Loan Bank advances 328,144 237,400
Trust preferred securities 10,532 -
Accrued interest payable 1,708 1,064
Other liabilities 10,222 8,220
-------------- -------------
Total Liabilities 1,407,793 852,212
-------------- -------------
Stockholders' Equity:
Preferred stock - $0.01 par value;
5,000,000 shares authorized; none
issued - -
Common stock - $0.01 par value;
40,000,000 shares authorized;
16,465,922 and 11,457,602 shares
issued and outstanding at September
30, 2005 and June 30, 2005,
respectively 165 115
Additional paid-in capital 176,541 86,086
Retained earnings - substantially
restricted 55,869 56,046
Treasury stock (1,726,468 and
1,730,101 shares at September 30,
2005 and June 30, 2005, respectively,
at cost) (28,085) (28,072)
Accumulated other comprehensive loss (2,063) (1,353)
Obligation of deferred compensation
plan 1,076 1,076
Unallocated common stock held by:
Employee Stock Ownership Plan
(ESOP) (4,795) (5,035)
Recognition and Retention Plan
Trust (1,692) (1,820)
-------------- -------------
Total Stockholders' Equity 197,016 107,043
-------------- -------------
Total Liabilities and Stockholders'
Equity $1,604,809 $959,255
============== =============
WILLOW GROVE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except for Per Share Amounts)
Unaudited
Three Months Ended
September 30,
----------------------
2005 2004
----------- ----------
INTEREST INCOME:
Loans $11,749 $8,139
Mortgage-backed securities 2,629 2,365
Interest-bearing deposits 39 10
Investment securities:
Taxable 807 783
Non-taxable 247 214
----------- ----------
Total interest income 15,471 11,511
----------- ----------
INTEREST EXPENSE:
Deposits 3,314 2,177
Securities sold under agreements to
repurchase 61 -
Borrowings 2,980 1,943
----------- ----------
Total interest expense 6,355 4,120
----------- ----------
NET INTEREST INCOME 9,116 7,391
Provision for loan losses 513 171
----------- ----------
Net interest income after provision for
loan losses 8,603 7,220
----------- ----------
OTHER INCOME:
Investment services income 349 -
Service charges and fees 827 510
Gain (loss) on the sale of:
Loans 114 46
Securities available for sale (581) 12
Other 94 199
----------- ----------
Total other income 803 767
----------- ----------
OPERATING EXPENSES:
Salaries and employee benefits 4,410 3,143
Occupancy and equipment 909 641
Data processing 335 221
Advertising 153 215
Deposit insurance premiums 25 21
Other 2,115 1,109
----------- ----------
Total operating expenses 7,947 5,350
----------- ----------
Income before income taxes 1,459 2,637
Income tax expense 458 833
----------- ----------
NET INCOME $1,001 $1,804
=========== ==========
EARNINGS PER SHARE
Basic $0.09 $0.20
=========== ==========
Diluted $0.09 $0.19
=========== ==========
DIVIDENDS PER SHARE PAID DURING PERIOD $0.12 $0.11
=========== ==========
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 10,659,590 8,992,143
=========== ==========
Diluted 10,952,351 9,478,818
=========== ==========
WILLOW GROVE BANCORP, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
Three Months
Ended
September 30,
---------------
2005 2004
------- -------
Average interest rate spread (1) 3.29% 2.90%
Net yield on average interest-earning assets (1) 3.46% 3.29%
Ratio of average interest-earning
Assets to average interest-bearing liabilities 1.07 1.22
Non-performing assets to total assets 0.32% 0.36%
Allowance for loan loss to total loans 1.28% 1.03%
Return on equity 2.88% 6.74%
Return on assets 0.34% 0.77%
Book value per common share $13.31 $11.17
Closing price of common stock at end of
period $15.65 $16.59
Number of full-service offices at end of period 27 14
(1) Percentages are presented on a taxable equivalent basis.
The following details the tax equivalent adjustments in the above
table:
Three Months Ended September 30,
---------------------------------------------------------
2005 2004
---------------------------- ----------------------------
Interest Tax Adjusted Interest Tax Adjusted
Income Adjustment Income Income Adjustment Income
---------------------------- ----------------------------
(Dollars in thousands)
Loans $11,749 $52 $11,801 $8,139 $- $8,139
Investments 3,722 374 4,096 3,372 95 3,467
---------------------------- ----------------------------
Total $15,471 $426 $15,897 $11,511 $95 $11,606
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