William Penn Bancorporation Announces Quarter End Results And Cash Dividend To Shareholders
- William Penn recorded net income of $179 thousand for Q3 2023
- Board of Directors declared a cash dividend of $0.03 per share
- Company repurchased 1,624,018 shares at a total cost of $19.8 million
- Stockholders' equity decreased by $24.3 million
- Net interest income decreased by $1.5 million
- Net interest margin decreased to 2.52%
- Book value per share decreased to $12.60
BRISTOL, PA / ACCESSWIRE / 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
In addition, William Penn announced that its Board of Directors has declared a cash dividend of
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
Mr. Stephon added, "The Company continues to maintain a strong capital position, posting a stockholders' equity to assets ratio of
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. - 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 from0.49% 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 , or0.75% of total loans, as of September 30, 2023, compared to$3.3 million , or0.69% 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 to3.19% 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
Cash and cash equivalents decreased
Total investments decreased
Net loans decreased
Deposits decreased
Borrowings increased
Stockholders' equity decreased
Net Interest Income
For the quarter ended September 30, 2023, net interest income was
Non-interest Income
For the quarter ended September 30, 2023, non-interest income totaled
Non-interest Expense
For the quarter ended September 30, 2023, non-interest expense totaled
Income Taxes
For the quarter ended September 30, 2023, the Company recorded a
Asset Quality
Asset quality metrics remain strong with non-performing assets to total assets decreasing to
Capital and Liquidity
As of September 30, 2023, William Penn's stockholders' equity to assets totaled
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
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
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.
CONTACT:
Kenneth J. Stephon
Chairman, President and CEO
PHONE: (856) 656-2201, ext. 1009
([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, 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)
| 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 | 97,544 | 99,690 | 104,376 | |||||||||
Equity securities | 1,702 | 1,629 | 1,985 | |||||||||
Loans receivable, net of allowance for credit losses of | 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, | - | - | - | |||||||||
Common stock, | 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 | ||||||
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 | |||||||||
WILLIAM PENN BANCORPORATION AND SUBSIDIARIES
Unaudited Selected Consolidated Financial and Other Data
(Dollars in thousands)
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.
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 ( [1] ) | 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 ( [2] ) | 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.
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 | ||||
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FAQ
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