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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| William Penn Bancorporation | NASDAQ:WMPN | NASDAQ | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.33 | 2.48% | 13.62 | 13.59 | 13.66 | 13.87 | 13.29 | 13.30 | 55,870 | 16:39:39 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact Name of Registrant as Specified in Its Charter)
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incorporation or organization) | File Number) | Identification No.) |
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(
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[
[
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[
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading symbol(s) | Name of each exchange on which registered |
The |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company [
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [
Item 2.02Results of Operations and Financial Condition.
On October 18, 2023, William Penn Bancorporation (the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2023. A copy of the Company’s press release is attached as Exhibit 99.1 and is furnished herewith.
The information contained in this Item 2.02 and in Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific references in such a filing.
Item 8.01Other Events.
On October 18, 2023, the Board of Directors of the Company declared a cash dividend of $0.03 per share, payable on November 9, 2023, to common shareholders of record at the close of business on October 30, 2023.
On October 18, 2023, the Company also issued a press release announcing that the Company’s Board of Directors has authorized a new stock repurchase program to acquire up to 1,046,610 shares, or approximately 10.0%, of the Company's currently issued and outstanding common stock, commencing upon the completion of the Company’s existing stock repurchase program. The new stock repurchase program was adopted following the Company’s consultation with the Federal Reserve Bank of Philadelphia. For more information, reference is made to the Company’s press release dated October 18, 2023, a copy of which is attached hereto as Exhibit 99.2 and is incorporated by reference herein.
Item 9.01 Financial Statements and Other Exhibits.
(d) Exhibits
Number | Description |
99.1 | |
99.2 | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
WILLIAM PENN BANCORPORATION | ||
Date: October 18, 2023 | By: | /s/ Kenneth J. Stephon |
Kenneth J. Stephon | ||
Chairman, President and Chief Executive Officer | ||
Exhibit 99.1
FOR IMMEDIATE RELEASE
DATE:October 18, 2023
CONTACT:Kenneth J. Stephon
Chairman, President and CEO
PHONE:(856) 656-2201, ext. 1009
WILLIAM PENN BANCORPORATION ANNOUNCES QUARTER END RESULTS AND CASH DIVIDEND TO SHAREHOLDERS
BRISTOL, PENNSYLVANIA, October 18, 2023 — William Penn Bancorporation (“William Penn” or the “Company”) (NASDAQ CM: WMPN), the parent company of William Penn Bank (the “Bank”), today announced its financial results for the quarter ended September 30, 2023. William Penn recorded net income of $179 thousand, or $0.02 per basic and diluted share, for the quarter ended September 30, 2023 compared to net income of $1.0 million, or $0.08 per basic and diluted share, for the quarter ended September 30, 2022. William Penn recorded core net income(1) of $123 thousand, or $0.01 per basic and diluted share, for the quarter ended September 30, 2023 compared to core net income(1) of $1.0 million, or $0.08 per basic and diluted share, for the quarter ended September 30, 2022.
In addition, William Penn announced that its Board of Directors has declared a cash dividend of $0.03 per share, payable on November 9, 2023, to common shareholders of record at the close of business on October 30, 2023.
Kenneth J. Stephon, William Penn’s Chairman, President and CEO, commented on the financial results, stating, “During our first fiscal quarter, we continued to repurchase shares under our existing stock repurchase programs and we repurchased 1,624,018 shares at a total cost of $19.8 million, an average of $12.16 per share. Also during the quarter, we announced that our Board of Directors authorized a new repurchase program to acquire up to 1,138,470 shares, or approximately 10.0% of our outstanding shares, that commenced upon the completion of the Company’s prior stock repurchase program. We are authorized to repurchase a total of 5,387,159 shares under our previously announced stock repurchase programs and, as of September 30, 2023, we have repurchased a total of 4,804,489 shares at a total cost of $55.5 million, an average of $11.56 per share. We believe the opportunistic buyback of our stock delivers maximum value to our shareholders.”
Mr. Stephon added, “The Company continues to maintain a strong capital position, posting a stockholders’ equity to assets ratio of 16.43% and a tangible common equity ratio(2) of 15.89% at September 30, 2023. The strength of these ratios provides us with substantial support through these turbulent times and enables us to concentrate on managing our capital for the maximum benefit of our shareholders. This means maintaining a strong balance sheet and asset quality, focusing on disciplined expense management, buying back our stock whenever possible, and paying a sustainable cash dividend.”
Highlights for the quarter ended September 30, 2023 are as follows:
| ● | As previously announced, on August 28, 2023, the Company’s Board of Directors authorized a sixth stock repurchase program to acquire up to 1,138,470 shares, or approximately 10.0%, of the Company’s outstanding shares, that commenced upon the completion of the Company’s fifth stock repurchase program. During the quarter ended September 30, 2023, we repurchased 1,624,018 shares at a total cost of $19.8 million, an average of $12.16 per share. As of September 30, 2023, the Company had repurchased a total of 4,804,489 shares under these repurchase programs at a total cost of $55.5 million, or $11.56 per share. |
(1) As used in this press release, core net income is a non-GAAP financial measure. This non-GAAP financial measure excludes certain pre-tax adjustments and the tax impact of such adjustments, and income tax benefit adjustments. For a reconciliation of this and other non-GAAP financial measures to their comparable GAAP measure, see “Non-GAAP Reconciliation” at the end of the press release.
(2) As used in this press release, tangible capital to tangible assets is a non-GAAP financial measure. This non-GAAP financial measure excludes goodwill and other intangible assets. For a reconciliation of this and other non-GAAP financial measures to their comparable GAAP measures, see “Non-GAAP Reconciliation” at the end of the press release.
1
| ● | William Penn recorded net income of $179 thousand, or $0.02 per basic and diluted share, and core net income(1) of $123 thousand, or $0.01 per basic and diluted share, for the quarter ended September 30, 2023. |
| ● | Asset quality metrics remain strong with non-performing assets to total assets decreasing to 0.45% as of September 30, 2023 from 0.49% as of June 30, 2023. |
| ● | On July 1, 2023, the Company adopted the provisions of Accounting Standards Update (“ASU”) 2016-13: Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“CECL”) and recorded a cumulative effect decrease to retained earnings of $187 thousand related to loans and $39 thousand related to unfunded commitments. The Company determined that there was no impact to retained earnings related to available-for-sale or held-to-maturity debt securities as a result of adopting this guidance. Our allowance for credit losses totaled $3.6 million, or 0.75% of total loans, as of September 30, 2023, compared to $3.3 million, or 0.69% of total loans, as of June 30, 2023. |
| ● | William Penn’s net interest margin measured 2.52% for the quarter ended September 30, 2023 compared to 3.19% for the quarter ended September 30, 2022. |
| ● | Book value per share measured $12.60 as of September 30, 2023 compared to $12.91 as of June 30, 2023. Tangible book value per share(3) measured $12.10 as of September 30, 2023 compared to $12.48 as of June 30, 2023. The decline in both book value per share and tangible book value per share was primarily due to a $4.6 million increase in the accumulated other comprehensive loss component of equity related to the unrealized loss on available for sale securities. |
Statement of Financial Condition
Total assets decreased $17.6 million, or 2.1%, to $830.0 million at September 30, 2023, from $847.6 million at June 30, 2023, primarily due to an $11.1 million decrease in investments, a $5.4 million decrease in net loans and a $2.8 million decrease in cash and cash equivalents. The Company used $19.8 million of cash during the quarter ended September 30, 2023 to repurchase shares of stock under its previously announced stock repurchase programs.
Cash and cash equivalents decreased $2.8 million, or 13.6%, to $18.0 million at September 30, 2023, from $20.8 million at June 30, 2023. The decrease in cash and cash equivalents was primarily due to the repurchase of 1,624,018 shares at a total cost of $19.8 million and an $8.8 million decrease in deposits, partially offset by a $17.0 million increase in advances from the Federal Home Loan Bank (“FHLB”) of Pittsburgh, $5.2 million of investment paydowns and a $5.4 million decrease in net loans.
Total investments decreased $11.1 million, or 4.2%, to $255.3 million at September 30, 2023, from $266.4 million at June 30, 2023. The decrease in investments was primarily due to a $6.0 million increase in the gross unrealized loss on available for sale securities, as well as principal paydowns of the securities included in the available for sale and held to maturity portfolios. The increase in the gross unrealized loss on available for sale securities is due to current interest rate levels relative to the Company’s cost and not credit quality. The Company remains focused on maintaining a high-quality investment portfolio that provides a steady stream of cash flows both in the current and in rising interest rate environments.
Net loans decreased $5.4 million, or 1.1%, to $472.1 million at September 30, 2023, from $477.5 million at June 30, 2023. The interest rate environment has caused a slowdown in borrower demand. The Company maintains conservative lending practices and pricing discipline, and is focused on lending to borrowers with high credit quality within its market footprint.
Deposits decreased $8.8 million, or 1.4%, to $626.5 million at September 30, 2023, from $635.3 million at June 30, 2023. The decrease in deposits was primarily due to a $14.4 million decrease in money market accounts and a $5.1 million decrease in non-interest bearing checking accounts, partially offset by an $8.8 million increase in interest-bearing checking accounts and a $6.5 million increase in time deposit accounts. The interest rate environment has created significant pricing competition for deposits within our market.
(3) As used in this press release, tangible book value per share is a non-GAAP financial measure. This non-GAAP financial measure excludes goodwill and other intangible assets. For a reconciliation of this and other non-GAAP financial measures to their comparable GAAP measures, see “Non-GAAP Reconciliation” at the end of the press release.
2
Borrowings increased $17.0 million, or 50.0%, to $51.0 million at September 30, 2023, from $34.0 million at June 30, 2023. During the quarter ended September 30, 2023, the Company borrowed from the FHLB of Pittsburgh to fund a portion of the $19.8 million of share repurchases.
Stockholders’ equity decreased $24.3 million, or 15.1%, to $136.4 million at September 30, 2023, from $160.7 million at June 30, 2023. The decrease in stockholders’ equity was primarily due to the repurchase of 1,624,018 shares at a total cost of $19.8 million, or $12.16 per share, during the quarter ended September 30, 2023 under the Company’s previously announced stock repurchase programs, as well as a $4.6 million increase in the accumulated other comprehensive loss component of equity related to the unrealized loss on available for sale securities, the payment of a $0.03 per share quarterly cash dividend in August 2023 totaling $348 thousand, and a $226 thousand one-time cumulative effect decrease to retained earnings from the adoption of ASU 2016-13. These decreases to stockholders’ equity were partially offset by $179 thousand of net income during the quarter ended September 30, 2023. Book value per share measured $12.60 as of September 30, 2023 compared to $12.91 as of June 30, 2023, and tangible book value per share(3) measured $12.10 as of September 30, 2023 compared to $12.48 as of June 30, 2023.
Net Interest Income
For the quarter ended September 30, 2023, net interest income was $4.7 million, a decrease of $1.5 million, or 24.0%, from the quarter ended September 30, 2022. The decrease in net interest income was primarily due to an increase in interest expense on deposits and borrowings, partially offset by an increase in interest income on loans and investments. The net interest margin measured 2.52% for the quarter ended September 30, 2023, compared to 3.19% for the quarter ended September 30, 2022. The decrease in the net interest margin during the quarter ended September 30, 2023, compared to the same period in 2022 was primarily due to an increase in the average balance of deposits and the rise in interest rates that caused an increase in the cost of borrowings and deposits that exceeded the increase in interest income on loans and investments.
Non-interest Income
For the quarter ended September 30, 2023, non-interest income totaled $650 thousand, an increase of $368 thousand, or 130.5%, from the quarter ended September 30, 2022. The increase was primarily due to a $73 thousand unrealized gain on equity securities recorded during the quarter ended September 30, 2023 compared to a $273 thousand unrealized loss on equity securities recorded during the quarter ended September 30, 2022.
Non-interest Expense
For the quarter ended September 30, 2023, non-interest expense totaled $5.2 million, a decrease of $338 thousand, or 6.1%, from the quarter ended September 30, 2022. The decrease in non-interest expense was primarily due to a $306 thousand decrease in salaries and employee benefits primarily due to a reduction in the number of full-time employees consistent with the Company’s expense management initiatives.
Income Taxes
For the quarter ended September 30, 2023, the Company recorded a $15 thousand income tax benefit, reflecting an effective tax rate of (9.1)%, compared to a $67 thousand income tax benefit, reflecting an effective tax rate of (7.0)%, for the same period in 2022. The income tax benefit recorded during the quarter ended September 30, 2023 was primarily due to the $294 thousand of federal tax-exempt income recorded on bank-owned life insurance relative to the $164 thousand of income before income taxes. The Company recorded a $211 thousand income tax benefit related to a refund received associated with the carryback of net operating losses under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act during the quarter ended September 30, 2022.
Asset Quality
Asset quality metrics remain strong with non-performing assets to total assets decreasing to 0.45% as of September 30, 2023 from 0.49% as of June 30, 2023. During the quarter ended September 30, 2023, we recorded a $5 thousand provision for credit losses primarily due to an increase in our commercial construction and land loans. During the quarter ended September 30, 2022, we did not record a provision for loan losses due to stable asset quality metrics and continued low levels of net charge-offs and non-performing assets. Our allowance for credit losses totaled $3.6 million, or 0.75% of total loans, as of September 30, 2023, compared to $3.3 million, or 0.69% of total loans, as of June 30, 2023.
3
Capital and Liquidity
As of September 30, 2023, William Penn’s stockholders’ equity to assets totaled 16.43% and tangible capital to tangible assets(2) totaled 15.89%. The Bank’s capital position remains strong relative to current regulatory requirements. The Bank has elected to follow the community bank leverage ratio framework and, as of September 30, 2023, the Bank had a community leverage ratio of 16.64% and is considered well-capitalized under the prompt corrective action framework.
The Bank continues to have substantial liquidity that has been retained in cash or invested in high quality government-backed securities. In addition, at September 30, 2023, we had the ability to borrow up to $290.2 million from the FHLB of Pittsburgh, $10.0 million with the Atlantic Community Bankers Bank (“ACBB”) and $3.8 million with the Federal Reserve Bank.
About William Penn Bancorporation and William Penn Bank
William Penn Bancorporation, headquartered in Bristol, Pennsylvania, is the holding company for William Penn Bank, which is a community bank that serves the Delaware Valley area through twelve full-service branch offices in Bucks County and Philadelphia, Pennsylvania, and Burlington, Camden and Mercer Counties in New Jersey. The Company's executive offices are located at 10 Canal Street, Suite 104, Bristol, Pennsylvania 19007. William Penn Bank's deposits are insured up to the legal maximum (generally $250,000 per depositor) by the Federal Deposit Insurance Corporation (FDIC). The primary federal regulator for William Penn Bank is the FDIC. For more information about the Bank and William Penn, please visit www.williampenn.bank.
Forward Looking Statements
This news release may contain forward-looking statements, which can be identified by the use of words such as “believes,” “expects,” “anticipates,” “estimates” or similar expressions. Such forward-looking statements and all other statements that are not historic facts are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors. These factors include, but are not limited to, general economic conditions (including higher inflation and its impact on national and local economic conditions), the effect of the COVID-19 pandemic (including its impact on our business operations and credit quality, on our customers and their ability to repay their loan obligations and on general economic and financial market conditions), changes in the interest rate environment, legislative or regulatory changes that may adversely affect our business, changes in accounting policies and practices, changes in competition and demand for financial services, changes to consumer and business confidence, investor sentiment, or consumer spending of savings behavior, adverse changes in the securities markets, changes in deposit flows, changes in the quality or composition of our loan or investment portfolios and our ability to successfully integrate the business operations of acquired businesses into our business operations, the ability to attract, develop and retain qualified employees, our ability to maintain the security of our data processing and information technology systems, and that the Company may not be successful in the implementation of its business strategy. Additionally, other risks and uncertainties may be described in William Penn’s Annual Report on Form 10-K for the year ended June 30, 2023, which is available through the SEC’s EDGAR website located at www.sec.gov. Should one or more of these risks materialize, actual results may vary from those anticipated, estimated or projected. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except as may be required by applicable law or regulation, William Penn assumes no obligation to update any forward-looking statements.
4
WILLIAM PENN BANCORPORATION AND SUBSIDIARIES
Unaudited Consolidated Statements of Financial Condition
(Dollars in thousands, except share amounts)
| | September 30, | | June 30, | | September 30, | | |||
|
| 2023 |
| 2023 |
| 2022 |
| |||
| | | | | | | | | | |
ASSETS | | | | | | | | | | |
Cash and due from banks | | $ | 7,236 | | $ | 7,652 | | $ | 9,082 | |
Interest bearing deposits with other banks | | | 10,492 | | | 11,561 | | | 10,041 | |
Federal funds sold | | | 239 | | | 1,580 | | | - | |
Total cash and cash equivalents | | | 17,967 | | | 20,793 | | | 19,123 | |
Interest-bearing time deposits | | | 100 | | | 600 | | | 600 | |
Securities available-for-sale | | | 156,097 | | | 165,127 | | | 170,860 | |
Securities held-to-maturity, net of allowance for credit losses of $0 | | | 97,544 | | | 99,690 | | | 104,376 | |
Equity securities | | | 1,702 | | | 1,629 | | | 1,985 | |
Loans receivable, net of allowance for credit losses of $3,587, $3,313, and $3,333, respectively | | | 472,052 | | | 477,543 | | | 472,499 | |
Premises and equipment, net | | | 7,668 | | | 9,054 | | | 11,553 | |
Regulatory stock, at cost | | | 3,286 | | | 2,577 | | | 3,379 | |
Deferred income taxes | | | 11,104 | | | 9,485 | | | 9,434 | |
Bank-owned life insurance | | | 40,869 | | | 40,575 | | | 39,443 | |
Goodwill | | | 4,858 | | | 4,858 | | | 4,858 | |
Intangible assets | | | 478 | | | 519 | | | 664 | |
Operating lease right-of-use assets | | | 8,775 | | | 8,931 | | | 6,716 | |
Accrued interest receivable and other assets | | | 7,487 | | | 6,198 | | | 6,005 | |
TOTAL ASSETS | | $ | 829,987 | | $ | 847,579 | | $ | 851,495 | |
| | | | | | | | | | |
LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | | | |
| | | | | | | | | | |
LIABILITIES | | | | | | | | | | |
Deposits | | $ | 626,507 | | $ | 635,260 | | $ | 600,174 | |
Advances from Federal Home Loan Bank | | | 51,000 | | | 34,000 | | | 55,000 | |
Advances from borrowers for taxes and insurance | | | 1,707 | | | 3,227 | | | 2,001 | |
Operating lease liabilities | | | 8,972 | | | 9,107 | | | 6,833 | |
Accrued interest payable and other liabilities | | | 5,407 | | | 5,240 | | | 6,293 | |
TOTAL LIABILITIES | | | 693,593 | | | 686,834 | | | 670,301 | |
| | | | | | | | | | |
STOCKHOLDERS' EQUITY | | | | | | | | | | |
Preferred stock, $0.01 par value | | | - | | | - | | | - | |
Common stock, $0.01 par value | | | 108 | | | 125 | | | 145 | |
Additional paid-in capital | | | 114,934 | | | 134,387 | | | 155,458 | |
Unearned common stock held by employee stock ownership plan | | | (9,093) | | | (9,194) | | | (9,497) | |
Retained earnings | | | 58,410 | | | 58,805 | | | 58,195 | |
Accumulated other comprehensive loss | | | (27,965) | | | (23,378) | | | (23,107) | |
TOTAL STOCKHOLDERS' EQUITY | | | 136,394 | | | 160,745 | | | 181,194 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 829,987 | | $ | 847,579 | | $ | 851,495 | |
5
WILLIAM PENN BANCORPORATION AND SUBSIDIARIES
Unaudited Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
| | For the Quarter Ended | |||||||
| | September 30, | | June 30, | | September 30, | |||
|
| 2023 |
| 2023 |
| 2022 | |||
INTEREST INCOME | | | | | | | | | |
Loans receivable, including fees | | $ | 6,139 | | $ | 6,254 | | $ | 5,297 |
Securities | | | 1,711 | | | 1,702 | | | 1,657 |
Other | | | 161 | | | 179 | | | 129 |
Total interest income | | | 8,011 | | | 8,135 | | | 7,083 |
INTEREST EXPENSE | | | | | | | | | |
Deposits | | | 2,730 | | | 2,350 | | | 509 |
Borrowings | | | 537 | | | 524 | | | 333 |
Total interest expense | | | 3,267 | | | 2,874 | | | 842 |
| | | | | | | | | |
Net interest income | | | 4,744 | | | 5,261 | | | 6,241 |
Provision for credit losses | | | 5 | | | - | | | - |
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | | | 4,739 | | | 5,261 | | | 6,241 |
OTHER INCOME | | | | | | | | | |
Service fees | | | 215 | | | 226 | | | 211 |
Earnings on bank-owned life insurance | | | 294 | | | 283 | | | 273 |
Net gain (loss) on disposition of premises and equipment | | | - | | | 2 | | | (1) |
Unrealized gain (loss) on equity securities | | | 73 | | | 25 | | | (273) |
Other | | | 68 | | | 56 | | | 72 |
Total other income | | | 650 | | | 592 | | | 282 |
OTHER EXPENSES | | | | | | | | | |
Salaries and employee benefits | | | 2,935 | | | 3,105 | | | 3,241 |
Occupancy and equipment | | | 760 | | | 753 | | | 788 |
Data processing | | | 494 | | | 453 | | | 431 |
Professional fees | | | 210 | | | 177 | | | 263 |
Amortization of intangible assets | | | 41 | | | 48 | | | 48 |
Other | | | 785 | | | 691 | | | 792 |
Total other expense | | | 5,225 | | | 5,227 | | | 5,563 |
| | | | | | | | | |
Income before income taxes | | | 164 | | | 626 | | | 960 |
| | | | | | | | | |
Income tax (benefit) expense | | | (15) | | | 95 | | | (67) |
NET INCOME | | $ | 179 | | $ | 531 | | $ | 1,027 |
| | | | | | | | | |
Basic and diluted earnings per share | | $ | 0.02 | | $ | 0.05 | | $ | 0.08 |
Basic average common shares outstanding | | | 10,600,522 | | | 11,571,321 | | | 13,435,273 |
Diluted average common shares outstanding | | | 10,620,603 | | | 11,571,321 | | | 13,452,902 |
6
WILLIAM PENN BANCORPORATION AND SUBSIDIARIES
Unaudited Selected Consolidated Financial and Other Data
The following tables present information regarding average balances of assets and liabilities, the total dollar amounts of interest income and dividends from average interest-earning assets, the total dollar amounts of interest expense on average interest-bearing liabilities, and the resulting annualized average yields and costs. The yields and costs for the periods indicated are derived by dividing income or expense by the average daily balances of assets or liabilities, respectively, for the periods presented. Loan fees, including prepayment fees, are included in interest income on loans and are not material. Non-accrual loans are included in the average balances only. Any adjustments necessary to present yields on a tax equivalent basis are insignificant.
| | For the Quarter Ended | ||||||||||||||||||
| | September 30, 2023 | | September 30, 2022 | ||||||||||||||||
| | Average | | Interest and | | Yield/ | | Average | | Interest and | | Yield/ | ||||||||
| | Balance | | Dividends | | Cost | | Balance | | Dividends | | Cost | ||||||||
|
| | |
| | |
| | | |
| | |
| | |
| | | |
Interest-earning assets: | | | | | | | | | | | | | | | | | | | | |
Loans(1) | | $ | 478,966 | | $ | 6,139 | | | 5.13 | % | | $ | 477,396 | | $ | 5,297 | | | 4.44 | % |
Investment securities(2) | | | 263,624 | | | 1,711 | | | 2.60 | | | | 287,696 | | | 1,657 | | | 2.30 | |
Other interest-earning assets | | | 11,387 | | | 161 | | | 5.66 | | | | 17,736 | | | 129 | | | 2.91 | |
Total interest-earning assets | | | 753,977 | | | 8,011 | | | 4.25 | | | | 782,828 | | | 7,083 | | | 3.62 | |
Non-interest-earning assets | | | 82,117 | | | | | | | | | | 81,924 | | | | | | | |
Total assets | | $ | 836,094 | | | | | | | | | $ | 864,752 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | |
Interest-bearing checking accounts | | $ | 120,997 | | | 304 | | | 1.00 | % | | $ | 130,261 | | | 65 | | | 0.20 | % |
Money market deposit accounts | | | 200,726 | | | 1,426 | | | 2.84 | | | | 172,948 | | | 216 | | | 0.50 | |
Savings, including club deposits | | | 87,842 | | | 19 | | | 0.09 | | | | 104,450 | | | 21 | | | 0.08 | |
Certificates of deposit | | | 161,825 | | | 981 | | | 2.42 | | | | 129,583 | | | 207 | | | 0.64 | |
Total interest-bearing deposits | | | 571,390 | | | 2,730 | | | 1.91 | | | | 537,242 | | | 509 | | | 0.38 | |
FHLB advances and other borrowings | | | 37,826 | | | 537 | | | 5.68 | | | | 54,723 | | | 333 | | | 2.43 | |
Total interest-bearing liabilities | | | 609,216 | | | 3,267 | | | 2.15 | | | | 591,965 | | | 842 | | | 0.57 | |
| | | | | | | | | | | | | | | | | | | | |
Non-interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | |
Non-interest-bearing deposits | | | 57,049 | | | | | | | | | | 65,149 | | | | | | | |
Other non-interest-bearing liabilities | | | 17,855 | | | | | | | | | | 15,352 | | | | | | | |
Total liabilities | | | 684,120 | | | | | | | | | | 672,466 | | | | | | | |
Total equity | | | 151,974 | | | | | | | | | | 192,286 | | | | | | | |
Total liabilities and equity | | $ | 836,094 | | | | | | | | | $ | 864,752 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Net interest income | | | | | $ | 4,744 | | | | | | | | | $ | 6,241 | | | | |
| | | | | | | | | | | | | | | | | | | | |
Interest rate spread(3) | | | | | | 2.10% | | | | | | | | | | 3.05% | | | | |
Net interest-earning assets(4) | | $ | 144,761 | | | | | | | | | $ | 190,863 | | | | | | | |
Net interest margin(5) | | | | | | 2.52% | | | | | | | | | | 3.19% | | | | |
Ratio of interest-earning assets to interest-bearing liabilities | | | 123.76% | | | | | | | | | | 132.24% | | | | | | | |
| (1) | Includes nonaccrual loan balances and interest, if any, recognized on such loans. |
| (2) | Includes securities available for sale and securities held to maturity. |
| (3) | Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities. |
| (4) | Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities. |
| (5) | Net interest margin represents net interest income divided by average total interest-earning assets. |
7
Asset Quality Indicators (unaudited)
| | September 30, | | June 30, | | September 30, | |||
(Dollars in thousands) |
| 2023 |
| 2023 |
| 2022 | |||
| | | | | | | | | |
Non-performing assets: | | | | | | | | | |
Non-accruing loans | | $ | 3,556 | | $ | 4,033 | | $ | 4,798 |
Accruing loans past due 90 days or more | | | - | | | - | | | - |
Total non-performing loans | | $ | 3,556 | | $ | 4,033 | | $ | 4,798 |
| | | | | | | | | |
Real estate owned | | | 141 | | | 141 | | | - |
| | | | | | | | | |
Total non-performing assets | | $ | 3,697 | | $ | 4,174 | | $ | 4,798 |
| | | | | | | | | |
Non-performing loans to total loans | | | 0.75% | | | 0.84% | | | 1.01% |
Non-performing assets to total assets | | | 0.45% | | | 0.49% | | | 0.56% |
ACL to total loans and leases | | | 0.75% | | | 0.69% | | | 0.70% |
ACL to non-performing loans | | | 100.87% | | | 82.15% | | | 69.47% |
Key performance ratios for the quarter ended (unaudited)
| | | | | | For the Quarter Ended | |||||||
| | | | | | September 30, | | June 30, | | September 30, | |||
| | | | |
| 2023 |
| 2023 |
| 2022 | |||
PERFORMANCE RATIOS: | | | | | | | | | | | | | |
(annualized for the quarter ended) | | | | | | | | | | | | | |
Return on average assets | | | | | | 0.09% | | | 0.25% | | | 0.48% | |
Core return on average assets(4) | | | | | | 0.06% | | | 0.24% | | | 0.48% | |
Return on average equity | | | | | | 0.47% | | | 1.30% | | | 2.14% | |
Core return on average equity(4) | | | | | | 0.32% | | | 1.25% | | | 2.14% | |
Net interest margin | | | | | | 2.52% | | | 2.73% | | | 3.19% | |
Net charge-off ratio | | | | | | (0.02)% | | | 0.02% | | | 0.06% | |
Efficiency ratio | | | | | | 96.87% | | | 89.30% | | | 85.28% | |
Core efficiency ratio(4) | | | | | | 98.20% | | | 89.72% | | | 81.84% | |
Tangible common equity(5) | | | | | | 15.89% | | | 18.45% | | | 20.77% | |
(4) As used in this press release, core return on average assets, core return on average equity, and core efficiency ratio are non-GAAP financial measures. These non-GAAP financial measures excludes certain pre-tax adjustments and the tax impact of such adjustments, and income tax benefit adjustments. For a reconciliation of these and other non-GAAP financial measures to their comparable GAAP measures, see “Non-GAAP Reconciliation” at the end of the press release.
(5) As used in this press release, tangible common equity is a non-GAAP financial measure. This non-GAAP financial measure excludes goodwill and other intangible assets. For a reconciliation of this and other non-GAAP financial measures to their comparable GAAP measures, see “Non-GAAP Reconciliation” at the end of the press release.
8
Non-GAAP Reconciliation (unaudited)
In this press release, we present the non-GAAP financial measures included in the tables below, which are used to evaluate our performance and exclude the effects of certain transactions and one-time events that we believe are unrelated to our core business and not necessarily indicative of our current performance or financial position. Management believes excluding these items facilitates greater visibility into our core businesses and underlying trends that may, to some extent, be obscured by inclusion of such items. The following tables include a reconciliation of the non-GAAP financial measures used in this press release to their comparable GAAP measures.
William Penn Bancorporation and Subsidiaries
Non-GAAP Reconciliation
(Dollars in thousands, except share and per share data)
| | September 30, | | June 30, | ||
| | 2023 | | 2023 | ||
Calculation of tangible capital to tangible assets: | | | | | | |
Total assets (GAAP) | | $ | 829,987 | | $ | 847,579 |
Less: Goodwill and other intangible assets | | | 5,336 | | | 5,377 |
Tangible assets (non-GAAP) | | $ | 824,651 | | $ | 842,202 |
| | | | | | |
Total stockholders' equity (GAAP) | | $ | 136,394 | | $ | 160,745 |
Less: Goodwill and other intangible assets | | | 5,336 | | | 5,377 |
Total tangible equity (non-GAAP) | | $ | 131,058 | | $ | 155,368 |
| | | | | | |
Stockholders' equity to assets (GAAP) | | | 16.43% | | | 18.97% |
Tangible capital to tangible assets (non-GAAP) | | | 15.89% | | | 18.45% |
| | | | | | |
Calculation of tangible book value per share: | | | | | | |
Total stockholders' equity (GAAP) | | $ | 136,394 | | $ | 160,745 |
Less: Goodwill and other intangible assets | | | 5,336 | | | 5,377 |
Total tangible equity (non-GAAP) | | $ | 131,058 | | $ | 155,368 |
| | | | | | |
Total common shares outstanding | | | 10,828,903 | | | 12,452,921 |
| | | | | | |
Book value per share (GAAP) | | $ | 12.60 | | $ | 12.91 |
Tangible book value per share (non-GAAP) | | $ | 12.10 | | $ | 12.48 |
| | | | | | |
9
| | For the Quarter Ended | |||||||
| | September 30, | | June 30, | | September 30, | |||
| | 2023 |
| 2023 |
| 2022 | |||
Calculation of core net income: | | | | | | | | | |
Net income (GAAP) | | $ | 179 | | $ | 531 | | $ | 1,027 |
Less pre-tax adjustments: | | | | | | | | | |
Net (gain) loss on disposition of premises and equipment | | | - | | | (2) | | | 1 |
Unrealized (gain) loss on equity securities | | | (73) | | | (25) | | | 273 |
Tax impact of pre-tax adjustments | | | 17 | | | 6 | | | (63) |
Income tax benefit adjustment | | | - | | | - | | | (211) |
Core net income (non-GAAP) | | $ | 123 | | $ | 510 | | $ | 1,027 |
| | | | | | | | | |
Calculation of core earnings per share: | | | | | | | | | |
Earnings per share (GAAP) | | $ | 0.02 | | $ | 0.05 | | $ | 0.08 |
Less pre-tax adjustments: | | | | | | | | | |
Net (gain) loss on disposition of premises and equipment | | | - | | | - | | | - |
Unrealized (gain) loss on equity securities | | | (0.01) | | | (0.01) | | | 0.02 |
Tax impact of pre-tax adjustments | | | - | | | - | | | - |
Income tax benefit adjustment | | | - | | | - | | | (0.02) |
Core earnings per share (non-GAAP) | | $ | 0.01 | | $ | 0.04 | | $ | 0.08 |
| | | | | | | | | |
Calculation of core return on average assets: | | | | | | | | | |
Return on average assets (GAAP) | | | 0.09% | | | 0.25% | | | 0.48% |
Less pre-tax adjustments: | | | | | | | | | |
Net (gain) loss on disposition of premises and equipment | | | - | | | - | | | - |
Unrealized (gain) loss on equity securities | | | (0.04)% | | | (0.01)% | | | 0.13% |
Tax impact of pre-tax adjustments | | | 0.01% | | | - | | | (0.03)% |
Income tax benefit adjustment | | | - | | | - | | | (0.10)% |
Core return on average assets (non-GAAP) | | | 0.06% | | | 0.24% | | | 0.48% |
| | | | | | | | | |
Average assets | | $ | 836,094 | | $ | 852,895 | | $ | 864,752 |
| | | | | | | | | |
Calculation of core return on average equity: | | | | | | | | | |
Return on average equity (GAAP) | | | 0.47% | | | 1.30% | | | 2.14% |
Less pre-tax adjustments: | | | | | | | | | |
Net (gain) loss on disposition of premises and equipment | | | - | | | - | | | - |
Unrealized (gain) loss on equity securities | | | (0.19)% | | | (0.06)% | | | 0.57% |
Tax impact of pre-tax adjustments | | | 0.04% | | | 0.01% | | | (0.13)% |
Income tax benefit adjustment | | | - | | | - | | | (0.44)% |
Core return on average equity (non-GAAP) | | | 0.32% | | | 1.25% | | | 2.14% |
| | | | | | | | | |
Average equity | | $ | 151,974 | | $ | 163,629 | | $ | 192,286 |
| | | | | | | | | |
Calculation of core efficiency ratio: | | | | | | | | | |
Non-interest expense (GAAP) | | $ | 5,225 | | $ | 5,227 | | $ | 5,563 |
Less adjustments: | | | | | | | | | |
Core non-interest expense (non-GAAP) | | $ | 5,225 | | $ | 5,227 | | $ | 5,563 |
Net interest income | | $ | 4,744 | | $ | 5,261 | | $ | 6,241 |
Non-interest income (GAAP) | | $ | 650 | | $ | 592 | | $ | 282 |
Less adjustments: | | | | | | | | | |
Net (gain) loss on disposition of premises and equipment | | | - | | | (2) | | | 1 |
Unrealized (gain) loss on equity securities | | | (73) | | | (25) | | | 273 |
Core non-interest income (non-GAAP) | | $ | 577 | | $ | 565 | | $ | 556 |
| | | | | | | | | |
Efficiency ratio (GAAP) | | | 96.87% | | | 89.30% | | | 85.28% |
Core efficiency ratio (non-GAAP) | | | 98.20% | | | 89.72% | | | 81.84% |
10
FOR IMMEDIATE RELEASE
CONTACT:Kenneth J. Stephon
Chairman, President and CEO
(856) 656-2201, ext. 1009
WILLIAM PENN BANCORPORATION ANNOUNCES
SEVENTH STOCK REPURCHASE PROGRAM
BRISTOL, PENNSYLVANIA, October 18, 2023 — William Penn Bancorporation (“William Penn” or the “Company”) (NASDAQ CM: WMPN), the parent company of William Penn Bank (the “Bank”), today announced that the Company’s Board of Directors has authorized a new stock repurchase program to acquire up to 1,046,610 shares, or approximately 10.0%, of the Company's currently issued and outstanding common stock, commencing upon the completion of the Company’s existing stock repurchase program. The new stock repurchase program was adopted following the Company’s consultation with the Federal Reserve Bank of Philadelphia.
On August 29, 2023, the Company announced its sixth stock repurchase program, which was authorized following the completion of the Company’s fifth stock repurchase program on August 28, 2023, and authorized the purchase of up to 1,138,470 shares. Under this previously announced program, 918,600 shares of common stock have been repurchased at a cost of $11,422,290, or $12.43 per share. As of October 17, 2023, there are 219,870 shares remaining to be repurchased under this existing program.
On May 5, 2023, the Company announced its fifth stock repurchase program, which became effective upon the completion of the Company’s fourth stock repurchase program and authorized the purchase of up to 1,281,019 shares. Under this previously announced program, 1,281,019 shares of common stock have been repurchased at a cost of $14,955,344, or $11.67 per share. The Company completed this repurchase program on August 28, 2023.
On February 17, 2023, the Company announced its fourth stock repurchase program, which became effective upon the completion of the Company’s third stock repurchase program and authorized the purchase of up to 698,312 shares. Under this previously announced program, 698,312 shares of common stock have been repurchased at a cost of $7,268,678, or $10.41 per share. The Company completed this repurchase program on May 31, 2023.
On August 18, 2022, the Company announced its third stock repurchase program, which became effective upon the completion of the Company’s second stock repurchase program and authorized the purchase of up to 739,385 shares. Under this previously announced program, 739,385 shares of common stock have been repurchased at a cost of $8,467,495, or $11.45 per share. The Company completed this repurchase program on April 3, 2023.
On June 9, 2022, the Company announced its second stock repurchase program, which became effective upon the completion of the Company’s first stock repurchase program and authorized the purchase of up to 771,445 shares. Under this previously announced program, 771,445 shares of common stock have been repurchased at a cost of $8,945,802, or $11.60 per share. The Company completed this repurchase program on January 10, 2023.
On March 11, 2022, the Company announced its first stock repurchase program, which became effective on March 25, 2022 and authorized the purchase of up to 758,528 shares. Under this previously
announced program, 758,528 shares of common stock have been repurchased at a cost of $8,981,445, or $11.84 per share. The Company completed this repurchase program during the quarter ended June 30, 2022.
Repurchases will be conducted through open market purchases, which may include purchases under a trading plan adopted pursuant to Securities and Exchange Commission Rule 10b5-1, or through privately negotiated transactions. Repurchases will be made from time to time depending on market conditions and other factors.
The repurchase program does not obligate the Company to purchase any particular number of shares, and the timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions, and other corporate liquidity requirements and priorities. There is no guarantee as to the exact number of shares to be repurchased by William Penn.
About William Penn Bancorporation
William Penn Bancorporation, headquartered in Bristol, Pennsylvania, is the holding company for William Penn Bank, which serves the Delaware Valley area through twelve full-service branch offices in Bucks County and Philadelphia, Pennsylvania, and Burlington, Camden and Mercer Counties in New Jersey. The Company's executive offices are located at 10 Canal Street, Suite 104, Bristol, Pennsylvania 19007. William Penn Bank's deposits are insured up to the legal maximum (generally $250,000 per depositor) by the Federal Deposit Insurance Corporation (FDIC). The primary federal regulator for William Penn Bank is the FDIC. For more information about the Bank and William Penn, please visit www.williampenn.bank.
Forward Looking Statements
This news release may contain forward-looking statements, which can be identified by the use of words such as “believes,” “expects,” “anticipates,” “estimates” or similar expressions. Such forward-looking statements and all other statements that are not historic facts are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors. These factors include, but are not limited to, general economic conditions, changes in the interest rate environment, legislative or regulatory changes that may adversely affect our business, changes in accounting policies and practices, changes in competition and demand for financial services, adverse changes in the securities markets, changes in deposit flows, changes in the quality or composition of our loan or investment portfolios, our ability to successfully manage liquidity, our ability to successfully integrate the business operations of acquired businesses into our business operations, the effect of war, acts of terrorism or civil unrest, the impact of pandemics such as the recent COVID-19 pandemic, and that the Company may not be successful in the implementation of its business strategy. Additionally, other risks and uncertainties may be described in William Penn’s Annual Report on Form 10-K for the year ended June 30, 2023 and other periodic reports filed with the SEC, which are available through the SEC’s EDGAR website located at www.sec.gov. Should one or more of these risks materialize, actual results may vary from those anticipated, estimated or projected. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except as may be required by applicable law or regulation, William Penn assumes no obligation to update any forward-looking statements.
Document and Entity Information |
Oct. 18, 2023 |
|---|---|
| Cover [Abstract] | |
| Document Type | 8-K |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Document Period End Date | Oct. 18, 2023 |
| Securities Act File Number | 001-40255 |
| Entity Registrant Name | WILLIAM PENN BANCORPORATION |
| Entity Incorporation, State or Country Code | MD |
| Entity Tax Identification Number | 85-3898797 |
| Entity Address, State or Province | PA |
| Entity Address, Address Line One | 10 Canal Street |
| Entity Address, Address Line Two | Suite 104 |
| Entity Address, City or Town | Bristol |
| Entity Address, Postal Zip Code | 19007 |
| City Area Code | 267 |
| Local Phone Number | 540-8500 |
| Title of 12(b) Security | Common Stock, par value $0.01 per share |
| Trading Symbol | WMPN |
| Security Exchange Name | NASDAQ |
| Entity Emerging Growth Company | true |
| Entity Ex Transition Period | false |
| Entity Central Index Key | 0001828376 |
| Amendment Flag | false |
N-2 |
Oct. 18, 2023 |
|---|---|
| Cover [Abstract] | |
| Entity Central Index Key | 0001828376 |
| Amendment Flag | false |
| Securities Act File Number | 001-40255 |
| Document Type | 8-K |
| Entity Registrant Name | WILLIAM PENN BANCORPORATION |
| Entity Address, Address Line One | 10 Canal Street |
| Entity Address, Address Line Two | Suite 104 |
| Entity Address, City or Town | Bristol |
| Entity Address, State or Province | PA |
| Entity Address, Postal Zip Code | 19007 |
| City Area Code | 267 |
| Local Phone Number | 540-8500 |
| Entity Emerging Growth Company | true |
| Entity Ex Transition Period | false |
1 Year William Penn Bancorporat... Chart |
1 Month William Penn Bancorporat... Chart |
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