William Penn Bancorporation Announces Quarter End Results and Cash Dividend to Shareholders

Rhea-AI Summary

William Penn Bancorporation (NASDAQ: WMPN) reported net income of $183 thousand for Q3 2023 and $2.3 million for nine months, down from $824 thousand and $3.2 million respectively in Q3 2022. Core net income reached $443 thousand for Q3 and $2.3 million YTD, compared to $1.1 million and $3.0 million in the previous year. The Board declared a $0.03 dividend, payable on May 11, 2023. Total assets decreased by $17.6 million to $862.4 million, attributed mainly to share repurchases. Deposits grew by $26.1 million to $632.7 million, while borrowings fell by $27 million. Stockholders' equity dropped by $18.3 million to $174 million.

Positive

• Declared a cash dividend of $0.03 per share, enhancing shareholder return.
• Increased deposits by $26.1 million, indicating strong customer retention.
• Reduced borrowings by $27 million, strengthening the balance sheet.

Negative

• Net income declined compared to the previous year, indicating profitability pressure.
• Core net income decreased, reflecting challenges in core operations.
• Stockholders' equity fell by $18.3 million, impacting overall financial stability.

BRISTOL, PA / ACCESSWIRE / April 19, 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 three and nine months ended March 31, 2023. William Penn recorded net income of $183 thousand and $2.3 million, or $0.01 and $0.17 per basic and diluted share, for the three and nine months ended March 31, 2023, respectively, compared to net income of $824 thousand and $3.2 million, or $0.06 and $0.22 per basic and diluted share, for the three and nine months ended March 31, 2022. William Penn recorded core net income ⁽¹⁾ of $443 thousand and $2.3 million, or $0.04 and $0.17 per basic and diluted share, for the three and nine months ended March 31, 2023, respectively, compared to core net income ⁽¹⁾ of $1.1 million and $3.0 million, or $0.07 and $0.21 per basic and diluted share, for the three and nine months ended March 31, 2022.

In addition, William Penn announced that its Board of Directors has declared a cash dividend of $0.03 per share, payable on May 11, 2023, to common shareholders of record at the close of business on May 1, 2023.

Kenneth J. Stephon, William Penn's Chairman, President and CEO, commented on the financial results, stating, "Despite the recent turmoil in the banking sector, William Penn Bancorporation experienced growth in deposits for the quarter, which allowed us to reduce our borrowings with the Federal Home Loan Bank of Pittsburgh. We continue to focus on the strength of our balance sheet by adhering to our long-time, conservative community bank strategy of gathering deposits from within our local markets and lending to local consumers and businesses in a prudent manner."

Mr. Stephon added, "During the quarter, we continued to repurchase shares under our existing stock repurchase programs and our Board of Directors authorized a fourth repurchase program to repurchase up to 698,312 shares. We are authorized to repurchase a total of 2,967,670 shares under our stock repurchase programs and, as of March 31, 2023, we had repurchased a total of 2,123,801 shares at a total cost of $24.7 million, an average of $11.65 per share. As of April 17, 2023, the Company had repurchased a total of 2,589,825 shares at a total cost of $29.8 million, or $11.51 per share, and had 377,845 shares remaining to repurchase under the fourth stock repurchase program that was approved on February 17, 2023.

"The Company continues to maintain a strong capital position, posting a stockholders' equity to assets ratio of 20.18% and a tangible common equity ratio ⁽²⁾ of 19.68% at March 31, 2023. The strength of these ratios provides us with substantial support through these unsettled times, and enables us to concentrate on managing our capital for the maximum benefit of our shareholders by growing our business in a disciplined manner, buying back our stock whenever possible, and paying a sustainable cash dividend."

Highlights for the three months ended March 31, 2023 are as follows:

• As previously announced, on February 17, 2023, the Company's Board of Directors authorized a fourth stock repurchase program to acquire up to 698,312 shares, or approximately 5.0%, of the Company's outstanding shares, commencing upon the completion of the Company's third repurchase program. During the three months ended March 31, 2023, the Company repurchased 617,506 shares at a total cost of $7.1 million, or $11.51 per share. As of March 31, 2023, the Company had repurchased a total of 2,123,801 shares at a total cost of $24.7 million, or $11.65 per share. As of April 3, 2023, the Company had exhausted its third repurchase program that was approved on August 18, 2022 and began repurchasing shares under its fourth repurchase program that was approved on February 17, 2023.
• William Penn recorded net income and core net income ⁽¹⁾ of $183 thousand and $443 thousand, or $0.01 and $0.04 per basic and diluted share, respectively, for the three months ended March 31, 2023.
• William Penn improved its liability mix by growing deposits by $17.2 million and reducing borrowings from the Federal Home Loan Bank ("FHLB") of Pittsburgh by $22.0 million during the three months ended March 31, 2023.
• The Bank has a varied depositor base with over 21,000 accounts with an average depositor account balance of approximately $29,300 as of March 31, 2023. The estimated amount of uninsured and uncollateralized deposits totaled approximately $109.6 million, or 17.3% of the Company's total deposits, as of March 31, 2023.
• Asset quality metrics remain strong with non-performing assets to total assets of 0.51% as of March 31, 2023 compared to 0.74% as of June 30, 2022. Our allowance for loan losses totaled $3.3 million, or 0.68% of total loans and 0.86% of total loans, excluding acquired loans ⁽³⁾ , as of March 31, 2023, compared to $3.4 million, or 0.71% of total loans and 0.94% of total loans, excluding acquired loans ⁽³⁾ , as of June 30, 2022.
• William Penn's net interest margin measured 2.84% for the three months ended March 31, 2023 compared to 3.06% for the three months ended March 31, 2022.
• William Penn's cost of deposits totaled 1.03% during the three months ended March 31, 2023.
• Book value per share measured $12.87 as of March 31, 2023 compared to $12.91 as of June 30, 2022. Tangible book value per share ⁽⁴⁾ measured $12.47 as of March 31, 2023 compared to $12.54 as of June 30, 2022. The decline in both book value and tangible book value was primarily due a $5.3 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 2.0%, to $862.4 million at March 31, 2023, from $880.0 million at June 30, 2022, primarily due to $15.7 million of cash used to repurchase shares and a $12.5 million decrease in investments, partially offset by a $9.4 million increase in net loans.

Cash and cash equivalents decreased $16.3 million, or 45.0%, to $19.9 million at March 31, 2023, from $36.2 million at June 30, 2022. The decrease in cash and cash equivalents was primarily due to the repurchase of 1,356,865 shares at a total cost of $15.7 million.

Total investments decreased $12.5 million, or 4.4%, to $274.6 million at March 31, 2023, from $287.1 million at June 30, 2022. The decrease in investments was primarily due to a $6.9 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 increased $9.4 million, or 2.0%, to $484.9 million at March 31, 2023, from $475.5 million at June 30, 2022. During the nine months ended March 31, 2023, the Company originated $56.1 million of new loans, including $44.9 million of commercial loans. The Company maintains conservative lending practices and is focused on lending to borrowers with high credit quality within its market footprint.

Deposits increased $26.1 million, or 4.3%, to $632.7 million at March 31, 2023, from $606.6 million at June 30, 2022. The increase in deposits was primarily due to a $38.1 million increase in money market accounts and a $20.8 million increase in time deposit accounts, partially offset by an $18.6 million decrease in non-interest bearing checking accounts and an $11.3 million decrease in savings accounts. The interest rate environment has created a highly competitive market for deposits.

Borrowings decreased $27.0 million, or 41.5%, to $38.0 million at March 31, 2023, from $65.0 million at June 30, 2022. During the quarter ended March 31, 2023, the Company used cash from the increase in deposits to pay off a portion of short-term borrowings.

Stockholders' equity decreased $18.3 million, or 9.5%, to $174.0 million at March 31, 2023, from $192.3 million at June 30, 2022. The decrease in stockholders' equity was primarily due to the repurchase of 1,356,865 shares at a total cost of $15.7 million, or $11.51 per share, during the nine months ended March 31, 2023 under the Company's previously announced stock repurchase programs, as well as the payment of a $0.03 per share quarterly cash dividend in August 2022, November 2022 and February 2023 totaling $419 thousand, $405 thousand and $397 thousand, respectively, and a $5.3 million increase in the accumulated other comprehensive loss component of equity, related to the unrealized loss on available for sale securities. These decreases to stockholders' equity were partially offset by $2.3 million of net income during the nine months ended March 31, 2023. Book value per share measured $12.87 as of March 31, 2023, compared to $12.91 as of June 30, 2022, and tangible book value per share ⁽⁴⁾ measured $12.47 as of March 31, 2023, compared to $12.54 as of June 30, 2022.

Net Interest Income

For the three months ended March 31, 2023, net interest income was $5.5 million, a decrease of $447 thousand, or 7.5%, from the three months ended March 31, 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 2.84% for the three months ended March 31, 2023, compared to 3.06% for the three months ended March 31, 2022. The decrease in the net interest margin during the three months ended March 31, 2023, compared to the same period in 2022 was primarily due to an increase in the average balance of deposits and borrowings 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.

For the nine months ended March 31, 2023, net interest income was $17.8 million, an increase of $1.0 million, or 6.2%, from the nine months ended March 31, 2022. The increase in net interest income was primarily due to an increase in interest income on loans and investments, partially offset by an increase in interest expense on deposits and borrowings. The net interest margin measured 3.04% for the nine months ended March 31, 2023, compared to 2.96% for the nine months ended March 31, 2022. The increase in the net interest margin during the nine months ended March 31, 2023, compared to the same period in 2022 was primarily due to an improvement in asset mix during the twelve months ended March 31, 2023, including a $38.4 million decrease in cash and cash equivalents and a $27.7 million increase in net loans.

Non-interest Income

For the three months ended March 31, 2023, non-interest income totaled $174 thousand, a decrease of $141 thousand, or 44.8%, from the three months ended March 31, 2022. The decrease was primarily due to a $199 thousand increase in the unrealized loss on equity securities, partially offset by a $97 thousand net gain on the sale of premises and equipment associated with the sale of one property with a total carrying value of $268 thousand recorded during the three months ended March 31, 2023.

For the nine months ended March 31, 2023, non-interest income totaled $1.4 million, a decrease of $326 thousand, or 19.4%, from the nine months ended March 31, 2022. The decrease was primarily due to a $558 thousand increase in the unrealized loss on equity securities and a $62 thousand gain on sale of securities recorded during the three months ended March 31, 2022. These decreases to non-interest income were partially offset by a $396 thousand net gain on the sale of premises and equipment associated with the sale of three properties securities with a total carrying value of $1.9 million recorded during the nine months ended March 31, 2023.

Non-interest Expense

For the three months ended March 31, 2023, non-interest expense totaled $5.6 million, an increase of $268 thousand, or 5.1%, from the three months ended March 31, 2022. The increase in non-interest expense was primarily due to a $285 thousand increase in salaries and employee benefits due to a $343 thousand increase in employee stock-based compensation expense associated with the Company's 2022 Equity Incentive Plan, partially offset by a reduction in the number of full-time employees consistent with the Company's expense management initiatives. The increase in non-interest expense can also be attributed to a $123 thousand increase in director stock-based compensation expense associated with the Company's 2022 Equity Incentive Plan. These increases to non-interest expense were partially offset by an $81 thousand decrease in professional fees primarily due to a decrease in legal expenses.

For the nine months ended March 31, 2023, non-interest expense totaled $16.8 million, an increase of $1.8 million, or 11.9%, from the nine months ended March 31, 2022. The increase in non-interest expense was primarily due to a $1.2 million increase in salaries and employee benefits due to annual merit increases and a $1.0 million increase in employee stock-based compensation expense associated with the Company's 2022 Equity Incentive Plan. The increase in non-interest expense can also be attributed to a $268 thousand increase in occupancy and equipment expense associated with new branch locations in Doylestown, Pennsylvania and Hamilton Township, New Jersey that were opened during the three months ended December 31, 2021. In addition, the increase in non-interest expense can be attributed to a $367 thousand increase in director stock-based compensation expense associated with the Company's 2022 Equity Incentive Plan.

Income Taxes

For the three months ended March 31, 2023, the Company recorded an income tax benefit of $45 thousand, reflecting an effective tax rate of (32.6)%, compared to a provision for income taxes of $160 thousand, reflecting an effective tax rate of 16.3%, for the same period in 2022. The decrease in the provision for income taxes and the effective tax rate during the three months ended March 31, 2023, compared to the same period in 2022, can be attributed to an $846 thousand decrease in income before income taxes. The Company recorded an income tax benefit during the three months ended March 31, 2023 primarily due to $276 thousand of federal tax-exempt income recorded on bank-owned life insurance.

For the nine months ended March 31, 2023, the Company recorded a provision for income taxes of $105 thousand, reflecting an effective tax rate of 4.4%, compared to a provision for income taxes of $310 thousand, reflecting an effective tax rate of 8.9%, for the same period in 2022. The provision for income taxes and the effective tax rate for the nine months ended March 31, 2023 and 2022 were impacted by a $211 thousand and a $288 thousand income tax benefit related to refunds received associated with the carryback of net operating losses under the Coronavirus Aid, Relief, and Economic Security ("CARES") Act during the nine months ended March 31, 2023 and 2022, respectively.

Asset Quality

During the three and nine months ended March 31, 2023, we did not record a provision for loan losses due to improved asset quality metrics and continued low levels of net charge-offs and non-performing assets. During the nine months ended March 31, 2023, we received payments from borrowers for full satisfaction of three non-performing loans with a total carrying value of $2.6 million. The payoff of these non-performing loans contributed to a significant reduction in our non-performing assets and the Company's ratio of non-performing assets to total assets decreased to 0.51% as of March 31, 2023 from 0.74% as of June 30, 2022. The provision for loan losses was $10 thousand during the three months ended March 31, 2022 and a $20 thousand net recovery during the nine months ended March 31, 2022. The credit to the provision for the nine months ended March 31, 2022 was primarily due to continued stable asset quality metrics, including continued low levels of net charge-offs and non-performing assets. Our allowance for loan losses totaled $3.3 million, or 0.68% of total loans and 0.86% of total loans, excluding acquired loans ⁽³⁾ , as of March 31, 2023, compared to $3.4 million, or 0.71% of total loans and 0.94% of total loans, excluding acquired loans ⁽³⁾ , as of June 30, 2022.

Capital and Liquidity

The Bank's capital position remains strong relative to current regulatory requirements. As of March 31, 2023, William Penn's stockholders' equity to assets totaled 20.18% and tangible capital to tangible assets ⁽²⁾ totaled 19.68%. The federal regulators issued a final rule, effective January 1, 2020, that set the elective community bank leverage ratio at 9% of tier 1 capital to average total consolidated assets. The Bank has elected to follow this alternative framework. As of March 31, 2023, William Penn Bank had a community bank leverage ratio of 18.46% 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 March 31, 2023, we had the ability to borrow up to $297.1 million from the FHLB of Pittsburgh, $10.0 million with the Atlantic Community Bankers Bank ("ACBB") and $4.6 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, 2022, 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.

⁽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.

⁽³⁾ As used in this press release, the ratio of the allowance for loan losses to total loans, excluding acquired loans, is a non-GAAP financial measure. This non-GAAP financial measure excludes loans acquired in a business combination. 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.

⁽⁴⁾ 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.

WILLIAM PENN BANCORPORATION AND SUBSIDIARIES
Unaudited Consolidated Statements of Financial Condition
(Dollars in thousands, except share amounts)

	March 31,				December 31,				June 30,				March 31,
	2023				2022				2022				2022
ASSETS
Cash and due from banks	$	4,848			$	7,860			$	8,117			$	13,221
Interest bearing deposits with other banks		6,314				11,282				28,053				45,025
Federal funds sold		8,715				-				-				-
Total cash and cash equivalents		19,877				19,142				36,170				58,246
Interest-bearing time deposits		600				600				600				1,100
Securities available-for-sale		171,611				171,951				182,745				169,613
Securities held-to-maturity		101,410				103,030				102,135				104,227
Equity securities		1,604				2,039				2,258				2,404
Loans receivable, net of allowance for loan losses of $3,337, $3,334, $3,409, and $3,479, respectively		484,858				492,163				475,511				457,178
Premises and equipment, net		10,946				11,355				11,696				13,361
Regulatory stock, at cost		2,669				3,567				3,807				1,963
Deferred income taxes		8,930				9,267				7,459				6,019
Bank-owned life insurance		40,292				39,717				39,170				38,006
Goodwill		4,858				4,858				4,858				4,858
Intangible assets		566				615				712				768
Operating lease right-of-use assets		9,116				8,306				6,843				6,970
Accrued interest receivable and other assets		5,035				4,334				5,988				4,268
TOTAL ASSETS	$	862,372			$	870,944			$	879,952			$	868,981
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits	$	632,675			$	615,438			$	606,617			$	621,404
Advances from Federal Home Loan Bank		38,000				60,000				65,000				20,000
Advances from borrowers for taxes and insurance		2,990				2,643				3,356				3,163
Operating lease liabilities		9,270				8,439				6,949				7,064
Accrued interest payable and other liabilities		5,391				5,194				5,704				11,070
TOTAL LIABILITIES		688,326				691,714				687,626				662,701
STOCKHOLDERS' EQUITY
Preferred stock, $0.01 par value		-				-				-				-
Common stock, $0.01 par value		135				141				149				151
Additional paid-in capital		145,240				151,942				159,546				168,078
Unearned common stock held by employee stock ownership plan		(9,295)				(9,395)				(9,599)				(9,700)
Retained earnings		58,637				58,851				57,587				56,936
Accumulated other comprehensive loss		(20,671)				(22,309)				(15,357)				(9,185)
TOTAL STOCKHOLDERS' EQUITY		174,046				179,230				192,326				206,280
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	862,372			$	870,944			$	879,952			$	868,981

WILLIAM PENN BANCORPORATION AND SUBSIDIARIES
Unaudited Consolidated Statements of Income
(Dollars in thousands, except per share amounts)

	For the Three Months Ended												For the Nine Months Ended
	March 31,				December 31,				March 31,				March 31,				March 31,
	2023				2022				2022				2023				2022
INTEREST INCOME
Loans receivable, including fees	$	5,725			$	5,666			$	5,212			$	16,688			$	15,535
Securities		1,714				1,707				1,329				5,078				3,026
Other		169				187				43				485				189
Total interest income		7,608				7,560				6,584				22,251				18,750
INTEREST EXPENSE
Deposits		1,623				974				424				3,106				1,329
Borrowings		452				550				180				1,335				649
Total interest expense		2,075				1,524				604				4,441				1,978
Net interest income		5,533				6,036				5,980				17,810				16,772
Provision (recovery) for loan losses		-				-				10				-				(20)
NET INTEREST INCOME AFTER PROVISION (RECOVERY) FOR LOAN LOSSES		5,533				6,036				5,970				17,810				16,792
OTHER INCOME
Service fees		197				209				196				617				652
Net gain on sale of securities		-				-				-				-				62
Earnings on bank-owned life insurance		276				274				259				823				775
Net gain on disposition of premises and equipment		97				300				15				396				15
Unrealized (loss) gain on equity securities		(435)				54				(236)				(654)				(96)
Other		39				65				81				176				276
Total other income		174				902				315				1,358				1,684
OTHER EXPENSES
Salaries and employee benefits		3,217				3,222				2,932				9,680				8,440
Occupancy and equipment		810				907				836				2,505				2,237
Data processing		480				472				451				1,383				1,291
Professional fees		208				258				289				729				778
Amortization of intangible assets		49				49				56				146				169
Gain on lease abandonment		-				-				(117)				-				(117)
Prepayment penalties		-				-				209				-				273
Other		805				752				645				2,349				1,936
Total other expense		5,569				5,660				5,301				16,792				15,007
Income before income taxes		138				1,278				984				2,376				3,469
Income tax (benefit) expense		(45)				217				160				105				310
NET INCOME	$	183			$	1,061			$	824			$	2,271			$	3,159
Basic and diluted earnings per share	$	0.01			$	0.08			$	0.06			$	0.17			$	0.22
Basic average common shares outstanding		12,643,435				12,985,244				14,318,839				13,024,076				14,310,484
Diluted average common shares outstanding		12,718,167				13,030,136				14,318,839				13,069,858				14,310,484

WILLIAM PENN BANCORPORATION AND SUBSIDIARIES
Unaudited Selected Consolidated Financial and Other Data
(Dollars in thousands)

	For the Three Months Ended																		For the Nine Months Ended
	March 31, 2023									March 31, 2022									March 31, 2023									March 31, 2022
	Average			Interest and			Yield/			Average			Interest and			Yield/			Average			Interest and			Yield/			Average			Interest and			Yield/
	Balance			Dividends			Cost			Balance			Dividends			Cost			Balance			Dividends			Cost			Balance			Dividends			Cost
Interest-earning assets:
Loans	$	487,676		$	5,725			4.70%		$	459,414		$	5,212			4.54%		$	483,225		$	16,688			4.60%		$	458,664		$	15,535			4.52%
Investment securities		277,161			1,714			2.47			267,221			1,329			1.99			280,557			5,078			2.41			202,383			3,026			1.99
Other interest-earning assets		13,281			169			5.09			53,886			43			0.32			16,196			485			3.99			94,919			189			0.27
Total interest-earning assets		778,118			7,608			3.91			780,521			6,584			3.37			779,978			22,251			3.80			755,966			18,750			3.31
Non-interest-earning assets		81,895									79,280									82,753									75,375
Total assets	$	860,013								$	859,801								$	862,731								$	831,341
Interest-bearing liabilities:
Interest-bearing checking accounts	$	125,529			81			0.26%		$	125,217			12			0.04%		$	129,858			244			0.25%		$	111,697			45			0.05%
Money market deposit accounts		204,172			1,004			1.97			180,933			164			0.36			185,356			1,768			1.27			161,634			407			0.34
Savings, including club deposits		95,672			16			0.07			106,144			13			0.05			99,922			53			0.07			103,271			54			0.07
Certificates of deposit		143,697			522			1.45			138,827			235			0.68			136,492			1,041			1.02			147,330			823			0.74
Total interest-bearing deposits		569,070			1,623			1.14			551,121			424			0.31			551,628			3,106			0.75			523,932			1,329			0.34
FHLB advances and other borrowings		37,244			452			4.85			25,556			180			2.82			49,394			1,335			3.60			31,718			649			2.73
Total interest-bearing liabilities		606,314			2,075			1.37			576,677			604			0.42			601,022			4,441			0.99			555,650			1,978			0.47
Non-interest-bearing liabilities:
Non-interest-bearing deposits		58,238									57,550									62,252									53,925
Other non-interest-bearing liabilities		19,438									15,316									15,566									6,877
Total liabilities		683,990									649,543									678,840									616,452
Total equity		176,023									210,258									183,891									214,889
Total liabilities and equity	$	860,013								$	859,801								$	862,731								$	831,341
Net interest income				$	5,533								$	5,980								$	17,810								$	16,772
Interest rate spread					2.54%									2.95%									2.81%									2.84%
Net interest-earning assets	$	171,804								$	203,844								$	178,956								$	200,316
Net interest margin					2.84%									3.06%									3.04%									2.96%
Ratio of interest-earning assets to interest-bearing liabilities		128.34									135.35%									129.78%									136.05%

Asset Quality Indicators (unaudited)

	March 31,				December 31,				June 30,				March 31,
(Dollars in thousands)	2023				2022				2022				2022
Non-performing assets:
Non-accruing loans	$	4,241			$	4,256			$	6,511			$	6,536
Accruing loans past due 90 days or more		-				-				-				-
Total non-performing loans	$	4,241			$	4,256			$	6,511			$	6,536
Real estate owned		141				-				-				75
Total non-performing assets	$	4,382			$	4,256			$	6,511			$	6,611
Non-performing loans to total loans		0.87%				0.86%				1.36%				1.42%
Non-performing assets to total assets		0.51%				0.49%				0.74%				0.76%
ALLL to total loans and leases		0.68%				0.67%				0.71%				0.76%
ALLL to non-performing loans		78.68%				78.34%				52.36%				53.23%

Key performance ratios are as follows for the three and nine months ended (unaudited):

	For the Three Months Ended									For the Nine Months Ended
	March 31,			December 31,			March 31,			March 31,			March 31,
	2023			2022			2022			2023			2022
PERFORMANCE RATIOS:
(annualized for the three and nine months ended)
Return on average assets	0.09%			0.49%			0.38%			0.35%			0.51%
Core return on average assets (5)	0.21%			0.37%			0.20%			0.35%			0.48%
Return on average equity	0.42%			2.38%			1.57%			1.65%			1.96%
Core return on average equity (5)	1.01%			1.77%			2.03%			1.64%			1.87%
Net interest margin	2.84%			3.10%			3.06%			3.04%			2.96%
Net charge-off ratio	0.00%			0.00%			0.08%			0.02%			0.05%
Efficiency ratio	97.58%			81.58%			84.21%			87.60%			81.31%
Core efficiency ratio (5)	92.13%			85.97%			79.94%			86.44%			80.38%
Tangible common equity (6)	19.68%			20.08%			23.24%			19.68%			23.24%

⁽⁵⁾ 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.

⁽⁶⁾ 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.

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)

	March 31,				December 31,				June 30,
	2023				2022				2022
Calculation of tangible capital to tangible assets:
Total assets (GAAP)	$	862,372			$	870,944			$	879,952
Less: Goodwill and other intangible assets		5,424				5,473				5,570
Tangible assets (non-GAAP)	$	856,948			$	865,471			$	874,382
Total stockholders' equity (GAAP)	$	174,046			$	179,230			$	192,326
Less: Goodwill and other intangible assets		5,424				5,473				5,570
Total tangible equity (non-GAAP)	$	168,622			$	173,757			$	186,756
Stockholders' equity to assets (GAAP)		20.18%				20.58%				21.86%
Tangible capital to tangible assets (non-GAAP)		19.68%				20.08%				21.36%
Calculation of tangible book value per share:
Total stockholders' equity (GAAP)	$	174,046			$	179,230			$	192,326
Less: Goodwill and other intangible assets		5,424				5,473				5,570
Total tangible equity (non-GAAP)	$	168,622			$	173,757			$	186,756
Total common shares outstanding		13,525,821				14,143,327				14,896,590
Book value per share (GAAP)	$	12.87			$	12.67			$	12.91
Tangible book value per share (non-GAAP)	$	12.47			$	12.29			$	12.54
Calculation of the ratio of the allowance for loan losses to total loans, excluding acquired loans:
Gross loans receivable	$	488,865			$	496,198			$	479,669
Less: Loans acquired in a business combination		103,008				108,697				118,111
Gross loans receivable, excluding acquired loans (non-GAAP)	$	385,857			$	387,501			$	361,558
Allowance for loan losses	$	3,337			$	3,334			$	3,409
Allowance for loan losses to total loans (GAAP)		0.68%				0.67%				0.71%
Allowance for loan losses to total loans, excluding acquired loans (non-GAAP)		0.86%				0.86%				0.94%

	For the Three Months Ended												For the Nine Months Ended
	March 31,				December 31,				March 31,				March 31,				March 31,
	2023				2022				2022				2023				2022
Calculation of core net income:
Net income (GAAP)	$	183			$	1,061			$	824			$	2,271			$	3,159
Less pre-tax adjustments:
Net gain on sale of securities		-				-				-				-				(62)
Net gain on disposition of premises and equipment		(97)				(300)				(15)				(396)				(15)
Unrealized loss (gain) on equity securities		435				(54)				236				654				96
Gain on lease abandonment		-				-				(117)				-				(117)
Prepayment penalties		-				-				209				-				273
Tax impact of pre-tax adjustments		(78)				81				(70)				(59)				(39)
Income tax benefit adjustment		-				-				-				(211)				(288)
Core net income (non-GAAP)	$	443			$	788			$	1,067			$	2,259			$	3,007
Calculation of core earnings per share:
Earnings per share (GAAP)	$	0.01			$	0.08			$	0.06			$	0.17			$	0.22
Less pre-tax adjustments:
Net gain on sale of securities		-				-				-				-				-
Net gain on disposition of premises and equipment		-				(0.02)				-				(0.03)				-
Unrealized loss (gain) on equity securities		0.03				(0.01)				0.01				0.05				0.01
Gain on lease abandonment		-				-				(0.01)				-				(0.01)
Prepayment penalties		-				-				0.01				-				0.02
Tax impact of pre-tax adjustments		-				0.01				-				-				(0.01)
Income tax benefit adjustment		-				-				-				(0.02)				(0.02)
Core earnings per share (non-GAAP)	$	0.04			$	0.06			$	0.07			$	0.17			$	0.21
Calculation of core return on average assets:
Return on average assets (GAAP)		0.09%				0.49%				0.38%				0.35%				0.51%
Less pre-tax adjustments:
Net gain on sale of securities		-				-				-				-				(0.01)%
Net gain on disposition of premises and equipment		(0.04)%				(0.13)%				(0.01)%				(0.06)%				-
Unrealized loss (gain) on equity securities		0.20%				(0.03)%				0.11%				0.10%				0.02%
Gain on lease abandonment		-				-				(0.05)%				-				(0.02)%
Prepayment penalties		-				-				0.10%				-				0.04%
Tax impact of pre-tax adjustments		(0.04)%				0.04%				(0.03)%				(0.01)%				(0.01)%
Income tax benefit adjustment		-				-				-				(0.03)%				(0.05)%
Core return on average assets (non-GAAP)		0.21%				0.37%				0.20%				0.35%	%			0.48%
Average assets	$	860,013			$	863,370			$	859,801			$	862,731			$	831,341
Calculation of core return on average equity:
Return on average equity (GAAP)		0.42%				2.38%				1.57%				1.65%				1.96%
Less pre-tax adjustments:
Net gain on sale of securities		-				-				-				-				(0.04)%
Net gain on disposition of premises and equipment		(0.22)%				(0.67)%				(0.03)%				(0.29)%				(0.01)%
Unrealized loss (gain) on equity securities		0.99%				(0.12)%				0.44				0.47%				0.06%
Gain on lease abandonment		-				-				(0.22)%				-				(0.07)%
Prepayment penalties		-				-				0.40%				-				0.17%
Tax impact of pre-tax adjustments		(0.18)%				0.18%				(0.13)%				(0.04)%				(0.02)%
Income tax benefit adjustment		-				-				-				(0.15)%				(0.18)%
Core return on average equity (non-GAAP)		1.01%				1.77%				2.03%				1.64%				1.87%
Average equity	$	176,023			$	178,546			$	210,258			$	183,891			$	214,889

	For the Three Months Ended												For the Nine Months Ended
	March 31,				December 31,				March 31,				March 31,				March 31,
	2023				2022				2022				2023				2022
Calculation of core efficiency ratio:
Non-interest expense (GAAP)	$	5,569			$	5,660			$	5,301			$	16,792			$	15,007
Less adjustments:
Gain on lease abandonment		-				-				117				-				117
Prepayment penalties		-				-				(209)				-				(273)
Core non-interest expense (non-GAAP)	$	5,569			$	5,660			$	5,209			$	16,792			$	14,851
Net interest income	$	5,533			$	6,036			$	5,980			$	17,810			$	16,772
Non-interest income (GAAP)	$	174			$	902			$	315			$	1,358			$	1,684
Less adjustments:
Net gain on sale of securities		-				-				-				-				(62)
Net gain on disposition of premises and equipment		(97)				(300)				(15)				(396)				(15)
Unrealized loss (gain) on equity securities		435				(54)				236				654				96
Core non-interest income (non-GAAP)	$	512			$	548			$	536			$	1,616			$	1,703
Efficiency ratio (GAAP)		97.58%				81.58%				84.21%				87.60%				81.31%
Core efficiency ratio (non-GAAP)		92.13%				85.97%				79.94%				86.44%				80.38%

CONTACT:

Kenneth J. Stephon
Chairman, President and CEO
(856) 656-2201, ext. 1009

SOURCE: William Penn Bancorporation

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https://www.accesswire.com/750141/William-Penn-Bancorporation-Announces-Quarter-End-Results-and-Cash-Dividend-to-Shareholders

FAQ

What were William Penn's financial results for Q3 2023?

William Penn reported a net income of $183 thousand for Q3 2023.

What is the dividend amount and payment date for William Penn?

William Penn declared a dividend of $0.03 per share, payable on May 11, 2023.

How did William Penn's deposits change in Q3 2023?

Deposits increased by $26.1 million to $632.7 million in Q3 2023.

What impact did the share repurchase program have on total assets?

Total assets decreased by $17.6 million to $862.4 million due to share repurchases.

What was the change in William Penn's stockholders' equity?

Stockholders' equity decreased by $18.3 million to $174 million.