Yahoo Finance

Balance Sheet

Total assets increased $321.1 million, or 77.2%, to $736.9 million at June 30, 2020, from $415.8 million of total assets at June 30, 2019. The increase in total assets can primarily be attributed to a $244.9 million increase from the acquisitions of Washington and Fidelity.

Cash and cash equivalents increased $56.7 million, or 216.9%, to $82.9 million at June 30, 2020, from $26.2 million at June 30, 2019. The increase in cash and cash equivalents was primarily driven by cash acquired as part of the acquisitions of Washington and Fidelity and organic deposit growth, partially offset by purchases of investment securities.

Investments increased $67.5 million, or 298.9%, to $90.0 million at June 30, 2020, compared to $22.5 million at June 30, 2019. We focus 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.

Loans increased $182.6 million, or 56.0%, to $508.6 million at June 30, 2020, from $326.0 million at June 30, 2019. The increase in loans can primarily be attributed to the $177.5 million of loans acquired as part of the acquisitions of Washington and Fidelity. During the quarter ended June 30, 2020, William Penn provided $2.4 million in Paycheck Protection Program (PPP) loans for 56 new and existing customers. William Penn also granted eligible loan modifications in the form of payment deferral of principal and interest for $49.8 million of existing loans under the 2020 Coronavirus Aid, Relief, and Economic Security Act.

Deposits increased $278.9 million, or 99.2%, to $560.1 million at June 30, 2020, from $281.2 million at June 30, 2019. Deposit growth was primarily achieved through $202.0 million of deposits acquired from Washington and Fidelity on May 1, 2020 with the remaining increase attributed to strong organic growth. Excluding deposits acquired in the mergers, organic growth produced an increase in deposits of $76.9 million, or 27.3%.

Borrowings increased $14.5 million, or 29.8%, to $64.9 million at June 30, 2020, from $50.0 million at June 30, 2019. The increase in borrowings was primarily due to FHLB advances acquired from Washington and Fidelity.

Stockholders' equity increased $19.8 million, or 25.8%, to $96.4 million at June 30, 2020, from $76.6 million at June 30, 2019. The increase in stockholders' equity was primarily due to $20.5 million of equity recorded at fair value in connection with the acquisitions of Washington and Fidelity and $1.3 million of net income during the year ended June 30, 2020, partially offset by $1.9 million of dividends paid to common shareholders during the year ended June 30, 2020.

Net Interest Income

For the quarter ended June 30, 2020, net interest income was $4.5 million, an increase of $1.1 million, or 33.3%, from the quarter ended June 30, 2019. The increase in net interest income was primarily due to an increase in interest-earning assets as a result of the acquisitions of Washington and Fidelity. The net interest margin totaled 3.06% for the quarter ended June 30, 2020 as compared to 3.57% for the same period in 2019. The decrease in the net interest margin is consistent with the recent decrease in interest rates and current margin compression primarily due to the COVID-19 pandemic and its impact on the economy and interest rate environment.

For the year ended June 30, 2020, William Penn reported net interest income of $14.8 million, an increase of $569 thousand, or 4.0%, from the year ended June 30, 2019. The increase in net interest income was primarily due to an increase in interest-earning assets as a result of the acquisitions of Washington and Fidelity on May 1, 2020. Our net interest margin totaled 3.27% for the year ended June 30, 2020, from 3.76% for 2019.

Non-interest Income

For the quarter ended June 30, 2020, non-interest income totaled $1.1 million, an increase of $664 thousand, or 139.2%, from the quarter ended June 30, 2019. The increase was primarily due to a $746 thousand gain on bargain purchase recorded in connection with the acquisitions of Washington and Fidelity. This increase in non-interest income was partially offset by a $237 thousand gain on sale of loans recorded during the quarter ended June 30, 2019.

For the year ended June 30, 2020, non-interest income totaled $2.2 million, an increase of $1.0 million, or 91.7%, from the year ended June 30, 2019. The increase was primarily due to a $746 thousand gain on bargain purchase recorded in connection with the acquisitions of Washington and Fidelity and a $98 thousand increase in the gain on sale of investment securities.

Non-interest Expense

For the quarter ended June 30, 2020, non-interest expense totaled $6.8 million, an increase of $4.4 million, or 184.7%, from the quarter ended June 30, 2019. The increase in non-interest expense was primarily due to $3.3 million of merger related expenses associated with the acquisitions of Washington and Fidelity, as well as a $540 thousand increase in salaries and employee benefits due to the addition of new employees from the acquisitions of Washington and Fidelity.

For the year ended June 30, 2020, non-interest expense totaled $15.4 million, an increase of $4.9 million, or 47.3%, from the year ended June 30, 2019. The increase in non-interest expense was primarily due to $3.3 million of merger related expenses associated with the acquisitions of Washington and Fidelity, as well as a $688 thousand increase in occupancy and equipment expense due to the addition of premises and equipment from the acquisitions of Washington and Fidelity.

Income Taxes

For the year ended June 30, 2020, we recorded an income tax benefit of $387 thousand, reflecting an effective tax benefit of 41.1%, compared to a provision for income taxes of $1.1 million, reflecting an effective tax rate of 22.0%, for the year ended June 30, 2019. The decrease in the effective tax rate in the year ended June 30, 2020 compared to the same period a year ago is primarily due to the timing of the reversal of a deferred tax asset valuation allowance related to the Company's investment in bank-owned life insurance.

Asset Quality

Our ratio of non-performing assets to total assets decreased to 0.46% as of June 30, 2020 compared to 0.48% as of June 30, 2019. Net charge-offs for the year ended June 30, 2020, totaled $257 thousand, or 6 basis points of average loans, compared to net charge-offs of $17 thousand, or 1 basis point of average loans, for the year ended June 30, 2019. As a result of the continued economic uncertainty due to the COVID-19 pandemic, we recorded a $626 thousand provision for loan losses during the year ended June 30, 2020 compared to an $88 thousand provision for loan losses during the prior year. Our allowance for loan losses totaled $3.5 million, or 1.26% of total loans, excluding acquired loans, as of June 30, 2020, compared to $3.2 million, or 1.24% of total loans, excluding acquired loans, as of June 30, 2019.

Capital

The Bank's capital position remains strong relative to current regulatory requirements. The Bank continues to have substantial liquidity that has been retained in cash or invested in high quality government-backed securities. As of June 30, 2020, William Penn's tangible capital to tangible assets totaled 12.36%. In addition, at June 30, 2020, we had the ability to borrow up to $223.0 million from the Federal Home Loan Bank of Pittsburgh. The federal regulators issued a final rule, effective January 1, 2020, that set the elective community bank leverage ratio at 9% tier 1 capital to average total consolidated assets. William Penn Bank has elected to follow this alternative framework. As of June 30, 2020, William Penn Bank had a community bank leverage ratio of 13.67% and is considered well-capitalized under the prompt corrective action framework.

Appointments of Executive Officers

William Penn announced the appointment of Jonathan Logan as Chief Financial Officer and Senior Vice President of the Company and the Bank. Mr. Logan is a Certified Public Accountant who started his career at Ernst & Young before joining Beneficial Bancorp, Inc., where he held progressively responsible positions including serving as Corporate Controller. He holds a Bachelor of Science degree in Business Administration from Susquehanna University, where he majored in Accounting.

William Penn also announced the appointment of Gregory Garcia as Chief Operating Officer and Executive Vice President, having previously served in the capacity of Chief Financial Officer of the Company and the Bank since January 2019. Mr. Garcia is a graduate of Rutgers University and the Stonier Graduate School of Banking at the University of Pennsylvania.

William Penn also announced that the role of Executive Vice President Jill M. Ross had been expanded, with a corresponding change in title to EVP - Chief Retail & Commercial Officer. Ms. Ross joined William Penn in March 2019 as Chief Retail Officer. She earned a Bachelor of Science Degree in Finance from Rutgers University and a Master's Degree from Rutgers in Social Work and Organizational Leadership.

About William Penn Bancorp, Inc.

William Penn Bancorp, Inc., 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 and Camden Counties in New Jersey. The Company's executive offices are located at 10 Canal Street, 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, 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, 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 Fidelity Savings and Loan Association of Bucks County and Washington Savings Bank, each of which we recently acquired on May 1, 2020, into our business operations. Additionally, other risks and uncertainties may be described in William Penn's Annual Report, which is available through the Company's website www.williampenn.bank. 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.

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

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

WILLIAM PENN BANCORP, INC. AND SUBSIDIARIES
Unaudited Selected Consolidated Financial and Other Data
(Dollars in thousands)

Key performance ratios are as follows for the year ended (unaudited):

CONTACT:
Kenneth J. Stephon
President and CEO
PHONE: (856) 656-2201

SOURCE: William Penn Bancorp, Inc.

View source version on accesswire.com:
https://www.accesswire.com/601272/William-Penn-Bancorp-Inc-Announces-Quarter-and-Year-End-Results-and-Appointments-of-Executive-Officers