William Penn Bancorp, Inc. Announces Second Quarter Earnings

William Penn Bancorp, Inc.

Companies Mentioned:

Primary Exchange: OTC PINK
Under the Symbol: WMPN




William Penn Bancorp, Inc. Announces Second Quarter Earnings

Tuesday, February 5, 2019 1:00 PM

LEVITTOWN, PA / ACCESSWIRE / February 5, 2019 / William Penn Bancorp, Inc. (the "Company") (OTC PINK: WMPN), the holding company for William Penn Bank (the "Bank"), announced quarterly net income of $518 thousand ($0.13 per basic and diluted share) for the three months ended December 31, 2018 as compared to $770 thousand ($0.19 per basic and diluted share) for the three months ended September 30, 2018. For the first six months of its 2019 fiscal year, the Company earned $1.29 million, or $0.32 per share, compared to $282 thousand, or $0.08 per share, for the six months ended December 31, 2017.

The decline in quarterly earnings was primarily due to an increase in noninterest expenses resulting from non-recurring charges associated with the conversion of data processors from the merger between Audubon Savings Bank and William Penn Bank. Total noninterest expense increased $313 thousand in the quarter for a total of $3.2 million for the three months ended December 31, 2018. Noninterest expenses as a percentage of average assets increased from 2.68% for the three months ended September 30, 2018 to 3.18% for the three months ended December 31, 2018.

Net interest income increased $21 thousand quarter over quarter due primarily to a decline in interest expense on borrowed funds. The Bank's net interest margin increased from 3.86% to 3.95% quarter over quarter.

The Bank posted $88 thousand in provision for loan and lease losses within the quarter resulting in an ALLL/loan ratio of 0.94%, consistent with the September 2018 quarter end. The increase in provision expense was due to the $9.0 million increase in loans quarter over quarter.

Noninterest income was relatively unchanged quarter over quarter with the Company earning $263 thousand in fee income for the three months ended December 31, 2018 versus $262 thousand for the three months ended September 30, 2018 quarter. Noninterest income as a percentage of average assets increased to 0.26% for the three months ended December 31, 2018 as compared to 0.25% for the three months ended September 30, 2018.

Total assets declined $3.4 million, or 0.80%, to $403.2 million at December 31, 2018. Total net loans increased $9.0 million, or 2.8% in the quarter to settle at $331.6 million as of December 31, 2018. Loans as a percentage of assets increased from 80.4% to 83.3% quarter over quarter.

Total liabilities from September 30, 2018 declined $3.9 million, or 1.2%, to $329.0 million at December 31, 2018. Total deposits declined $4.0 million, from $280.2 million to $276.2 million with the deposit mix modestly shifting out of nonmaturity deposits into time deposits. Within the quarter, the Bank was able to reduce its reliance on advances from the Federal Home Loan Bank from $46.5 million to $45.0 million.

Total shareholders' equity increased $535 thousand to $74.2 million at December 31, 2018 due primarily to an increase in retained earnings.

As of December 31, 2018, the Company had 4,158,113 shares of common stock issued and 3,980,154 shares outstanding, of which 3,189,840 shares were held by William Penn, MHC, the Company's mutual holding company parent (the "MHC").


In addition to announcing second quarter earnings, the Company also announced the successful completion of its Executive Management succession plan.

Kenneth J. Stephon succeeded Terry L. Sager as Chief Executive Officer on February 1, 2019. Mr. Stephon has been President since October 1, 2018, after having served as Senior Executive Vice President and Chief Operating Officer following the merger with Audubon Savings Bank on July 1, 2018. At Audubon Savings Bank he was President, Chief Executive Officer, and Director from October 2013 to June 2018. Before joining Audubon Savings, Mr. Stephon was CEO of Liberty Savings Bank in Pennsylvania and Clover Bank in New Jersey. He is on the Board of Directors of the Pennsylvania Association of Community Bankers and Insured Financial Institutions of the Delaware Valley. Mr. Stephon graduated from Trenton State College and received an M.B.A. from Rider University.

Mrs. Sager had been the Chief Executive Officer since April 2010, and also served as President from April 2010 until October 1, 2018. She joined the Bank in 1986. Mrs. Sager will remain on the Board of Directors.

Commenting on the change, Mrs. Sager said, "It has been my honor to serve this institution for more than 32 years. I am pleased that we have already completed many of our merger milestones, and I am looking forward to doing whatever I can to support Ken and the senior leadership team as we move forward."

Mr. Stephon added, "Terry has been a terrific partner through this transition, and I look forward to her ongoing support in the future. I am very excited about the opportunity to lead this great company."

Gregory Garcia was appointed Chief Financial Officer on January 1, 2019, succeeding Jan Summers, who retired as planned on December 31, 2018. Mr. Garcia was hired as Senior Vice President in September 2018 and worked closely with Ms. Summers to ensure an effective transition of responsibilities. Prior to joining William Penn, Mr. Garcia was previously an Executive Managing Director of FinPro, Inc. a consulting firm specializing in providing advisory services to the financial institutions industry, where he worked for 14 years. He holds a Bachelor's Degree from Rutgers University and also studied at the ABA Stonier Graduate School of Banking.

Ms. Summers had joined William Penn on July 1, 2018 as Executive Vice President and Chief Financial Officer following the merger with Audubon Savings Bank, where Ms. Summers had served as EVP, CFO, and Treasurer from 2014 until the merger. Her banking career spanned 35 years.

Bruce Knipe was appointed Chief Lending Officer on January 1, 2019, succeeding James Douglas. Mr. Knipe previously served as Senior Vice President and Director of Commercial Lending following the merger with Audubon Savings Bank, where Mr. Knipe was Sr. VP and Chief Lending Officer. Prior to joining Audubon Savings, Mr. Knipe was Executive Vice President and Chief Lending Officer of Bucks County Bank in Doylestown, PA for 7 years. He holds a Bachelor's Degree from Delaware Valley College, where he graduated Magna Cum Laude. He also is a graduate of the CBA Graduate School of Bank Management at the University of Virginia and the PBA School of Commercial Lending at Bucknell University.

Mr. Douglas was Senior Vice President and had joined the Bank in 1977.

Mr. Stephon stated, "The promotions of Greg Garcia and Bruce Knipe reflect the great confidence that the Board of Directors and I have in their ability to contribute to our successful future. Both have proven track records and have enjoyed very successful careers in the financial services industry, and their respective capabilities and character demonstrate the strength of our management team."

William Penn Bancorp, Inc. is the holding company for William Penn Bank, which serves Bucks County, Pennsylvania through its main office in Levittown, and additional branch offices in Morrisville and Richboro, Pennsylvania and also serves Burlington and Camden Counties in New Jersey through full-service branch offices located in Audubon, Mount Laurel, and Pine Hill, New Jersey. The Company's executive offices are located at 1309 S. Woodbourne Road, Levittown, Pennsylvania 19057. William Penn Bank's deposits are insured up to the legal maximum (generally $250,000 per depositor) by the FDIC. The primary federal regulator for William Penn Bank is the Federal Deposit Insurance Corporation (FDIC).

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, expectations or predictions of future financial or business performance, conditions relating to the Company and ASB, or other effects of the proposed merger on the Company and ASB. These forward-looking statements include statements with respect to the Company's beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, that are subject to significant risks and uncertainties, and are subject to change based on various factors (some of which are beyond the Company's control). The words "may," "could," "should," "would," "will," "believe," "anticipate," "estimate," "expect," "intend," "plan" and similar expressions are intended to identify forward-looking statements.

In addition, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: the strength of the United States economy in general and the strength of the local economies in which the Company conduct its operations; general economic conditions, legislative and regulatory changes, monetary and fiscal policies of the federal government, changes in tax policies, rates and regulations of federal, state and local tax authorities, changes in interest rates, deposit flows, the cost of funds, demand for loan products, demand for financial services, competition, changes in the quality or composition of the Company's loan, investment and mortgage-backed securities portfolios, changes in accounting principles, policies or guidelines and other economic, competitive, governmental and technological factors affecting the Company's operations, markets, products, services and fees; and the success of the Company at managing the risks involved in the foregoing.

The Company does not undertake, and specifically disclaims, any obligation to publicly release the results of any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances arising after the date hereof.


Contact Kenneth J. Stephon, President and CEO

(Dollars in thousands, except per share data)

Selected Financial Data:

At At
December 31, 2018 September 30, 2018
$ 403,154 $ 406,521
Cash and cash equivalents
12,675 17,804
Interest-bearing time deposits
15,470 22,692
Investment securities available for sale
7,394 7,062
Investment securities held to maturity
2,937 3,041
Loans receivable, net
331,611 322,577
276,149 280,185
Advances from Federal Home Loan Bank
45,000 46,500
Stockholders' equity
74,159 73,624
Nonaccrual loans
701 1,055
Nonaccrual loans and REO
857 1,309

Selected Operations Data:

Three months ended
December 31, 2018 September 30, 2018
Interest income

4,408 4,435
Interest expense
776 823
Net interest income
3,632 3,612
Provision (recovery) for loan losses
88 -
Net interest income after provision for loan losses
3,545 3,612
Noninterest income
263 262
Noninterest expense
3,219 2,906
Income before income taxes
589 968
Provision for income taxes
72 198
Net income
518 770
Basic and diluted earnings per share
0.13 0.19

SOURCE: William Penn Bancorp, Inc.

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