William Penn Bancorp, Inc. Announces First Quarter Earnings

William Penn Bancorp, Inc.

Companies Mentioned:

Primary Exchange: OTC PINK
Under the Symbol: WMPN

$33.25

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William Penn Bancorp, Inc. Announces First Quarter Earnings

Friday, November 9, 2018 2:30 PM

LEVITTOWN, PA / ACCESSWIRE / November 9, 2018 / William Penn Bancorp, Inc. (the "Company") (OTC PINK: WMPN), the holding company for William Penn Bank (the "Bank"), announced net income of $770,000 ($0.19 per basic and diluted share) for the three months ended September 30, 2018 as compared to $591,000 ($0.17 per basic and diluted share) for the same period last year.

Net interest income increased $1.4 million to $3.5 million for the three months ended September 30, 2018 as compared to $2.1 million for the three months ended September 30, 2017. The increase was a result of an increase in our net interest-earning assets due to the merger with Audubon Savings Bank ("ASB") as well as purchase accounting adjustments on the acquired ASB loan portfolio effective July 1, 2018. The Bank's net interest margin increased to 3.68% for the quarter ended September 30, 2018 compared to 3.06% for the same period last year. The increase in net interest margin is due to an increase in earning assets from 4.28% to 4.53% while the cost of funds declined from 1.38% to 1.15%.

The Bank did not post any provision for loan and lease losses within the quarter resulting in an ALLL/loan ratio of 0.94%. The decline in the ALLL/Loan ratio from 1.30% as of June 30, 2018 to 0.94% as of September 30, 2018 is due to acquisition of ASB loans at fair market value with no additional allowance for losses (per merger accounting requirements.)

Non-interest income increased $175,000 to $344,000 for the three months ended September 30, 2018 compared to $169,000 for the same period last year. The increase in non-interest income was primarily due to the fee income generated from ASB operations as part of the merger. Non-interest income as a percentage of average assets increased to 0.25% for the three months ended September 30, 2018 as compared to 0.08% for the same period last year.

Total non-interest expense increased $1.5 million to $2.9 million for the three months ended September 30, 2018 as compared to the $1.4 million of the three months ending September 30, 2017. The increase in non-interest expenses was primarily attributable to the addition of ASB's operating expenses. Non-interest expenses as a percentage of average assets increased from 1.67% for the three months ending September 30, 2017 as compared to 2.68% for the three months ending September 30, 2018 as the Company experienced extraordinary expenses associated with the merger and integration of ASB. Over the next few quarters, the Bank will continue to experience extraordinary expenses related to the integration of the two companies.

As a result of the merger with ASB, total assets increased $105.4 million, or 35.0%, to $406.5 million at September 30, 2018 as compared to June 30, 2018. Total loans increased $89.1 million, from $236.5 million to $325.6. With the acquisition of loans from ASB, the Bank diversified its loan portfolio into more commercial real estate and multifamily loans, increasing its holdings from $35.3 million to $63.3 million, or 44.3%. Multifamily and commercial real estate loans as a percentage of total equity increased from 57.0% to 86.0%.

Total liabilities from June 30, 2018 increased $93.7 million, or 39.2%, to $332.9 million at September 30, 2018. Total deposits increased $99.5 million, from $180.7 million to $280.2 million and the deposit mix shifted to more non-maturity deposits as its percentage of CDs to total deposits was reduced from 45.4% to 36.0%. Transaction and noninterest bearing DDA deposits increased from 15.3% to 28.8% as a result of merging ASB deposits into the Bank. Within the quarter, the Bank was able to reduce its reliance on advances from the Federal Home Loan Bank from $51.5 million at June 30, 2018 to $46.5 million at September 30, 2018.

Total shareholders' equity increased $11.7 million to $73.6 million at September 30, 2018 compared to $61.9 million at June 30, 2018 primarily due to the equity from ASB that was brought over as part of the merger transaction.

On July 1, 2018, the Bank completed its previously announced merger with Audubon Savings Bank ("ASB"). The merger was consummated pursuant tothe terms of the Agreement and Plan of Merger, dated as of December 6, 2017, by and among William Penn, MHC (the "MHC"), the Company, the Bank, and ASB (the "Merger Agreement"). Pursuant to the terms of the Merger Agreement, no consideration was paid to the members of ASB upon completion of the merger; however, the Company issued 517,095 additional shares of common stock to the MHC in connection with the consummation of the merger.

On July 18, 2018, the Company declared a dividend of $0.32 per share payable on August 10, 2018 to stockholders of record on August 1, 2018. In the same period last year, a cash dividend of $0.31 per share was declared. As of September 30, 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").

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, as a result of the merger with ASB, 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.

WILLIAM PENN BANCORP, INC
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands, except per share data)


Selected Financial Data:


At At
September 30, 2018 June 30, 2018
Assets
$ 406,521 $ 301,109
Cash and cash equivalents
17,804 15,912
Interest-bearing time deposits
22,692 32,422
Investment securities available for sale
7,062 2,032
Investment securities held to maturity
3,041 3,147
Loans receivable, net
322,577 233,389
Deposits
280,185 180,657
Advances from Federal Home Loan Bank
46,500 51,500
Stock holders' equity
73,624 61,895
Non-performing loans
4,056 4,142
Non-performing assets
4,191 4,277

Selected Operations Data:


Three months ended
September 30,
2018 2017
Interest income
$ 4,353 $ 2,961
Interest expense
823 866
Net interest income
3,530 2,095
Provision (recovery) for loan losses
- -
Net interest income after provision for loan losses
3,530 2,095
Noninterest income
344 169
Noninterest expense
2,906 1,380
Income before income taxes
968 884
Provision for income taxes
198 293
Net income
$ 770 $ 591
Basic and diluted earnings per share
$ 0.19 $ 0.17

FOR FURTHER INFORMATION

Contact Kenneth J. Stephon, President
215-269-1200

SOURCE: William Penn Bancorp, Inc.


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