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William Penn Bancorporation Announces Third Quarter Results

BRISTOL, PA / ACCESSWIRE / April 22, 2021 / William Penn Bancorporation ("William Penn" or the "Company") (NASDAQ:WMPN), the parent company of William Penn Bank (the "Bank"), today announced its financial results for the three and nine months ended March 31, 2021. William Penn recorded net income of $1.1 million and $3.1 million, or $0.07 and $0.21 per diluted share, for the three and nine months ended March 31, 2021, respectively, compared to net income of $837 thousand and $2.6 million, or $0.06 and $0.20 per diluted share, for the three and nine months ended March 31, 2020. Net income for the nine months ended March 31, 2021 included a $435 thousand, or $0.03 per diluted share, gain on the disposition of premises and equipment primarily due to the sale of several commercial real estate properties that were acquired in connection with the Bank's acquisitions of Washington Savings Bank ("Washington") and Fidelity Savings and Loan Association of Bucks County ("Fidelity"), which were completed on May 1, 2020.

Kenneth J. Stephon, William Penn's Chairman, President and CEO, stated "We are excited to have completed our second-step conversion and stock offering during the quarter. As a result of the share conversion, our tangible book value per share(1) measured $13.79 as of March 31, 2021. Following the second step, we remain focused on prudent capital management, organic growth, and improving our financial performance. We intend to deploy the second step proceeds to assist us in achieving our strategic and financial growth goals. We continue to experience reduced loan demand as a result of the difficult operating environment related to the COVID-19 pandemic. The low interest rate environment has made it challenging to effectively deploy the excess cash we hold on our balance sheet from two recent acquisitions and the second step offering. We believe the addition of Alan Turner as Executive Vice President and Chief Lending Officer will assist us with attaining our loan growth goals while maintaining consistent and conservative lending practices. In addition, we remain 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."

Highlights for the three months ended March 31, 2021 are as follows:

  • As previously announced on March 24, 2021, William Penn completed the stock offering conducted in connection with its second-step conversion. In connection with the conversion, 12,640,035 shares of common stock were sold, at a price of $10.00 per share, for gross proceeds of $126.4 million. William Penn contributed $61.7 million of the net offering proceeds to the Bank to support the continuing operations of the Bank.
  • Following the second-step conversion, our capital levels significantly increased with tangible capital to tangible assets totaling 25.77% at March 31, 2021 compared to 12.32% at December 31, 2020.
  • During the three months ended March 31, 2021, William Penn recorded net income of $1.1 million, or $0.07 per diluted share.
  • Net interest income increased $1.7 million, or 48.9%, for the three months ended March 31, 2021 compared to the same period in the prior year.
  • William Penn maintained strong credit reserves amidst the uncertain economic environment and recorded a $15 thousand provision for loan losses during the three months ended March 31, 2021.
  • Asset quality metrics continued to remain strong with non-performing assets to total assets of 0.74% as of March 31, 2021. Our allowance for loan losses totaled $3.6 million, or 1.19% of total loans, excluding acquired loans(2), as of March 31, 2021, compared to $3.5 million, or 1.27% of total loans, excluding acquired loans(2), as of June 30, 2020.
  • The balance of loans on deferral in accordance with the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") decreased to $608 thousand as of March 31, 2021, compared to $49.8 million at June 30, 2020.

(1) 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.

(2) 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.

Balance Sheet
Total assets increased $80.9 million, or 11.0%, to $817.4 million at March 31, 2021, from $736.5 million at June 30, 2020. The increase in total assets can primarily be attributed to a $96.7 million increase in total cash and cash equivalents and a $19.2 million increase in investment securities, partially offset by a $32.8 million decrease in gross loans.

Cash and cash equivalents increased $96.7 million, or 116.6%, to $179.6 million at March 31, 2021, from $82.9 million at June 30, 2020. The increase in cash and cash equivalents was primarily driven by $126.4 million of gross offering proceeds received in connection with the second step offering and a $32.8 million decrease in gross loans. These increases to cash and cash equivalents were partially offset by an $11.5 million decrease in deposits, a $19.2 million increase in investment securities and a $23.9 million decrease in advances from the Federal Home Loan Bank ("FHLB") of Pittsburgh. The decrease in advances from the FHLB of Pittsburgh was due to the strategic prepayment of $23.2 million of higher-cost advances during the three months ended September 30, 2020.

Investments increased $19.2 million, or 21.3%, to $109.2 million at March 31, 2021, from $90.0 million at June 30, 2020. 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.

Gross loans decreased $32.8 million, or 6.4%, to $479.3 million at March 31, 2021, from $512.1 million at June 30, 2020. The COVID-19 pandemic and low interest rate environment have created a highly competitive market for residential lending. The Company maintains conservative lending practices and is focused on lending to borrowers with high credit quality within its market footprint.

Deposits decreased $11.5 million, or 2.1%, to $548.3 million at March 31, 2021, from $559.8 million at June 30, 2020. The decrease in deposits was primarily due to a $25.6 million decrease in time deposits, partially offset by a $9.4 million increase in non-interest business checking accounts and a $6.5 million increase in savings accounts. The decrease in time deposits was consistent with the planned run-off associated with our re-pricing of higher-cost, non-relationship-based accounts.

Borrowings decreased $23.9 million, or 36.8%, to $41.0 million at March 31, 2021, from $64.9 million at June 30, 2020. The decrease in borrowings was primarily due to the previously discussed prepayment of $23.2 million of higher-cost advances from the FHLB of Pittsburgh during the three months ended September 30, 2020.

Stockholders' equity increased $118.6 million, or 123.2%, to $215.0 million at March 31, 2021, from $96.4 million at June 30, 2020. The increase in stockholders' equity was primarily due to net proceeds received in connection with the second-step conversion and net income of $3.1 million, partially offset by $1.9 million of dividends paid to common shareholders in August 2020 and a $1.3 million decrease in the accumulated other comprehensive loss component of the unrealized loss on available-for-sale investment securities during the nine months ended March 31, 2021. Tangible book value per share(1) measured $13.79 as of March 31, 2021.

Net Interest Income
For the three months ended March 31, 2021, net interest income was $5.3 million, an increase of $1.7 million, or 48.9%, from the three months ended March 31, 2020. 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 effective May 1, 2020. The net interest margin measured 2.91% for the three months ended March 31, 2021 compared to 3.44% for the same period in 2020. The decrease in the net interest margin is consistent with the recent decrease in interest rates and current margin compression that is primarily due to the COVID-19 pandemic and its impact on the economy and interest rate environment, as well as the excess cash that the Bank held in connection with the second-step offering during the three months ended March 31, 2021.

For the nine months ended March 31, 2021, net interest income was $16.1 million, an increase of $5.8 million, or 56.9%, from the nine months ended March 31, 2020. 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 effective May 1, 2020. The net interest margin measured 3.08% for the nine months ended March 31, 2021 compared to 3.39% for the same period in 2020. The decrease in the net interest margin is consistent with the recent decrease in interest rates and current margin compression that is primarily due to the COVID-19 pandemic and its impact on the economy and interest rate environment.

Non-interest Income
For the three months ended March 31, 2021, non-interest income totaled $535 thousand, an increase of $150 thousand, or 39.0%, from the three months ended March 31, 2020. The increase was primarily due to a $48 thousand increase in service fees as a result of higher deposit transaction volume due primarily to the acquisitions of Washington and Fidelity effective May 1, 2020 and a $160 thousand gain recorded in connection with the sale of other real estate owned. These increases to non-interest income were partially offset by a $68 thousand decrease in the net gain on sale of investment securities. In addition, the $34 thousand loss on the disposition of premises and equipment relates to the strategic decision to consolidate three existing Bank branches into one branch based on branch deposit levels and the close geographic proximity of the three consolidating branches.

For the nine months ended March 31, 2021, non-interest income totaled $1.8 million, an increase of $756 thousand, or 74.2%, from the nine months ended March 31, 2020. The increase was primarily due to a $435 thousand net gain on the disposition of premises and equipment primarily related to the sale of five commercial real estate properties and a $206 thousand gain recorded in connection with the sale of other real estate owned. The increase in non-interest income can also be attributed to a $121 thousand increase in service fees as a result of higher deposit transaction volume due primarily to the acquisitions of Washington and Fidelity effective May 1, 2020, as well as a $71 thousand increase in earnings on bank-owned life insurance. These increases to non-interest income were partially offset by a $191 thousand decrease in the net gain on sale of investment securities.

Non-interest Expense
For the three months ended March 31, 2021, non-interest expense totaled $4.5 million, an increase of $1.6 million, or 55.7%, from the three months ended March 31, 2020. The increase in non-interest expense was primarily due to an $857 thousand increase in salaries and employee benefits due to the addition of new employees from the acquisitions of Washington and Fidelity and a $414 thousand increase in occupancy and equipment expense due to additional operating costs from new branch offices and increased depreciation expense associated with premises and equipment from the acquisitions of Washington and Fidelity. The $142 thousand increase in data processing expense and the increase in other non-interest expense can be attributed to operating a larger organization that has resulted from the two acquisitions by William Penn Bank completed on May 1, 2020.

For the nine months ended March 31, 2021, non-interest expense totaled $13.9 million, an increase of $5.3 million, or 62.1%, from the nine months ended March 31, 2020. The increase in non-interest expense was primarily due to a $2.8 million increase in salaries and employee benefits due to the addition of new employees from the acquisitions of Washington and Fidelity and a $1.0 million increase in occupancy and equipment expense due to additional operating costs from new branch offices and increased depreciation expense associated with premises and equipment from the acquisitions of Washington and Fidelity. The $551 thousand increase in data processing expense and the increase in other non-interest expense can be attributed to operating a larger organization that has resulted from the two acquisitions by William Penn Bank completed on May 1, 2020. In addition, the nine months ended March 31, 2021 included $161 thousand of prepayment penalties associated with the prepayment of $23.2 million of higher-cost advances from the FHLB of Pittsburgh.

Income Taxes
For the three months ended March 31, 2021, we recorded a provision for income taxes of $273 thousand, reflecting an effective tax rate of 20.4%, compared to a provision for income taxes of $210 thousand, reflecting an effective tax rate of 20.1%, for the same period in 2020. The increase in the provision for income taxes for the three months ended March 31, 2021 compared to the same period a year ago is primarily due to higher income before income taxes.

For the nine months ended March 31, 2021, we recorded a provision for income taxes of $789 thousand, reflecting an effective tax rate of 20.2%, compared to a provision for income taxes of $92 thousand, reflecting an effective tax rate of 3.4%, for the same period in 2020. The increase in the provision for income taxes for the nine months ended March 31, 2021 compared to the same period a year ago is primarily due to higher income before income taxes and the $408 thousand effect of a change in tax law related to the treatment of bank-owned life insurance acquired as part of our 2018 acquisition of Audubon Savings Bank that reduced income tax expense during the nine months ended March 31, 2020. The increase in the effective tax rate for the nine months ended March 31, 2021 compared to the same period a year ago is primarily due the $408 thousand effect of the previously discussed change in tax law related to the treatment of bank-owned life insurance that reduced income tax expense during the nine months ended March 31, 2020.

Asset Quality
Our ratio of non-performing assets to total assets remained low at 0.74% as of March 31, 2021. In addition, our net charge-offs remained low with $34 thousand, or 0.01% of gross loans, of net charge-offs recorded during the nine months ended March 31, 2021. As a result of the continued economic uncertainty due to the COVID-19 pandemic, we recorded a $113 thousand provision for loan losses during the nine months ended March 31, 2021 compared to a $21 thousand provision for loan losses during the same period in 2020. Our allowance for loan losses totaled $3.6 million, or 1.19% of total loans, excluding acquired loans(2), as of March 31, 2021, compared to $3.5 million, or 1.27% of total loans, excluding acquired loans(2), as of June 30, 2020. In addition, the balance of loans on deferral in accordance with the provisions of the CARES Act decreased to $608 thousand as of March 31, 2021, compared to $49.8 million at June 30, 2020.

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 March 31, 2021, William Penn's tangible capital to tangible assets totaled 25.77%. In addition, at March 31, 2021, we had the ability to borrow up to $296.2 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% of tier 1 capital to average total consolidated assets. The Bank has elected to follow this alternative framework. As of March 31, 2021, William Penn Bank had a community bank leverage ratio of 19.27% and is considered well-capitalized under the prompt corrective action framework.

About William Penn Bancorporation
William Penn Bancorporation, headquartered in Bristol, Pennsylvania, is the holding company for William Penn Bank, which serves the Delaware Valley area through thirteen 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, 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, 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, and that the Company may not be successful in the implementation of its business strategy or its deployment of the proceeds raised in its second step conversion offering . Additionally, other risks and uncertainties may be described in William Penn's prospectus, filed with the Securities and Exchange Commission (the "SEC") pursuant to Rule 424(b)(3) on January 25, 2021, and Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, each of 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
President and CEO
PHONE: (856) 656-2201, ext. 1009

William Penn Bancorporation and Subsidiaries
Consolidated Balance Sheets

(Dollars in thousands, except share and per share data)

 
  March 31,     December 31,     June 30,     March 31,  
 
  2021     2020     2020     2020  
 
                       
ASSETS
                       
Cash and due from banks
  $ 8,713     $ 23,583     $ 21,385     $ 7,185  
Interest bearing deposits with other banks
    170,844       62,675       56,755       12,968  
Federal funds sold
    -       -       4,775       -  
Total cash and cash equivalents
    179,557       86,258       82,915       20,153  
Interest-bearing time deposits
    2,050       2,300       2,300       2,000  
Securities available for sale
    109,184       112,909       89,998       56,760  
Loans receivable, net of allowance for loan losses of $3,599,
                               
$3,587, $3,519, and $3,009, respectively
    475,730       494,805       508,605       346,526  
Premises and equipment, net
    13,534       13,543       16,733       9,601  
Regulatory stock, at cost
    3,025       3,133       4,200       3,175  
Deferred income taxes
    4,044       3,721       4,817       1,795  
Bank-owned life insurance
    15,078       14,968       14,758       11,452  
Goodwill
    4,858       4,858       4,858       4,858  
Intangible assets
    1,000       1,064       1,192       996  
Accrued interest receivable and other assets
    9,367       8,968       6,076       4,086  
TOTAL ASSETS
  $ 817,427     $ 746,527     $ 736,452     $ 461,402  
 
                               
LIABILITIES AND STOCKHOLDERS' EQUITY
                               
 
                               
LIABILITIES
                               
Deposits
  $ 548,316     $ 597,079     $ 559,848     $ 314,248  
Advances from Federal Home Loan Bank
    41,000       41,000       64,892       61,000  
Advances from borrowers for taxes and insurance
    3,403       3,056       4,536       3,584  
Accrued interest payable and other liabilities
    9,668       8,203       10,811       5,400  
TOTAL LIABILITIES
    602,387       649,338       640,087       384,232  
 
                               
STOCKHOLDERS' EQUITY
                               
Preferred stock, $.01 par value
    -       -       -       -  
Common Stock, $.01 par value
    152       467       467       416  
Additional paid-in capital
    168,349       42,932       42,932       22,441  
Treasury stock
    -       (3,710 )     (3,710 )     (3,710 )
Unearned common stock held by employee stock ownership plan
    (10,104 )     -       -       -  
Retained earnings
    57,827       56,760       56,600       57,892  
Accumulated other comprehensive (loss) income
    (1,184 )     740       76       131  
TOTAL STOCKHOLDERS' EQUITY
    215,040       97,189       96,365       77,170  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  $ 817,427     $ 746,527     $ 736,452     $ 461,402  
 
                               
                                 

William Penn Bancorporation and Subsidiaries
Consolidated Statements of Income

(Dollars in thousands, except share and per share data)
                             
 
  Three months ended     Nine months ended  
 
  March 31,
2021
    December 31, 2020     March 31,
2020
    March 31,
2021
    March 31, 2020  
INTEREST INCOME
                             
Loans receivable, including fees
  $ 5,701     $ 6,233     $ 4,277     $ 17,827     $ 12,500  
Securities
    449       472       422       1,574       1,097  
Other
    80       79       125       270       409  
Total Interest Income
    6,230       6,784       4,824       19,671       14,006  
INTEREST EXPENSE
                                       
Deposits
    652       918       891       2,651       2,658  
Borrowings
    262       267       364       888       1,064  
Total Interest Expense
    914       1,185       1,255       3,539       3,722  
 
                                       
Net Interest Income
    5,316       5,599       3,569       16,132       10,284  
 
                                       
Provision for loan losses
    15       32       21       113       21  
NET INTEREST INCOME AFTER PROVISION
                                       
FOR LOAN LOSSES
    5,301       5,567       3,548       16,019       10,263  
OTHER INCOME
                                       
Service fees
    199       186       152       568       447  
Net gain (loss) on sale of securities
    35       (30 )     103       5       196  
Earnings on bank-owned life insurance
    110       98       84       320       249  
Net (loss) gain on disposition of premises and equipment
    (34 )     454       -       435       -  
Net gain (loss) on sale of other real estate owned
    160       46       -       206       (16 )
Other
    65       86       46       241       143  
Total Other Income
    535       840       385       1,775       1,019  
OTHER EXPENSES
                                       
Salaries and employee benefits
    2,490       2,526       1,633       7,570       4,818  
Occupancy and equipment
    813       655       399       2,227       1,208  
Data processing
    419       509       277       1,350       799  
Professional fees
    193       217       152       598       526  
Amortization on intangible assets
    64       64       58       192       176  
Prepayment penalties
    -       -       -       161       -  
Other
    517       690       367       1,794       1,043  
Total Other Expense
    4,496       4,661       2,886       13,892       8,570  
 
                                       
Income Before Income Taxes
    1,340       1,746       1,047       3,902       2,712  
 
                                       
Income Tax Expense
    273       370       210       789       92  
NET INCOME
  $ 1,067     $ 1,376     $ 837     $ 3,113     $ 2,620  
 
                                       
Basic and diluted earnings per share
  $ 0.07     $ 0.09     $ 0.06     $ 0.21     $ 0.20  
 
                                       
                                         

William Penn Bancorporation and Subsidiaries
Average Balance Tables

 
  Three months ended     Nine months ended  
 
  March 31, 2021     December 31, 2020     March 31, 2020     March 31, 2021     March 31, 2020  
(Dollars in thousands)
  Average Balance     Interest and Dividends     Yield/Cost     Average Balance     Interest and Dividends     Yield/Cost     Average Balance     Interest and Dividends     Yield/Cost     Average Balance     Interest and Dividends     Yield/Cost     Average Balance     Interest and Dividends     Yield/Cost  
 
                                          
 
                                                                                         
Interest-earning assets:
                                                                                         
Loans
  $ 487,549     $ 5,701       4.68 %   $ 501,995     $ 6,233       4.97 %   $ 341,842     $ 4,277       5.00 %   $ 497,794     $ 17,827       4.77 %   $ 334,392     $ 12,500       4.98  
Investment securities
    109,204       449       1.64       119,782       472       1.58       49,701       422       3.40       115,888       1,574       1.81       47,733       1,097       3.06  
Other interest-earning assets
    135,204       80       0.24       59,955       79       0.53       23,153       125       2.16       85,477       270       0.42       22,908       409       2.38  
Total interest-earning assets
    731,957       6,230       3.40       681,732       6,784       3.98       414,696       4,824       4.65       699,159       19,671       3.75       405,033       14,006       4.61  
Non-interest-earning assets
    61,811                       59,975                       40,201                       60,572                       31,635                  
Total assets
  $ 793,768                     $ 741,707                     $ 454,897                     $ 759,731                     $ 436,668                  
 
                                                                                                                       
Interest-bearing liabilities:
                                                                                                                       
Interest-bearing checking accounts
  $ 99,812       17       0.07 %   $ 100,026       22       0.09 %   $ 57,967       15       0.10 %   $ 101,719       89       0.12 %   $ 57,133       47       0.11  
Money market deposit accounts
    157,016       166       0.42       154,343       248       0.64       89,494       301       1.34       150,055       740       0.66       79,547       903       1.51  
Savings, including club deposits
    100,044       24       0.10       96,301       24       0.10       31,582       11       0.14       97,028       91       0.12       31,829       34       0.14  
Certificates of deposit
    182,477       445       0.98       200,956       624       1.24       115,385       564       1.96       194,226       1,731       1.19       114,014       1,674       1.96  
Total interest-bearing deposits
    539,349       652       0.48       551,626       918       0.67       294,428       891       1.21       543,028       2,651       0.65       282,523       2,658       1.25  
FHLB advances
    41,000       262       2.55       41,000       267       2.61       59,750       364       2.44       45,720       888       2.59       56,300       1,064       2.52  
Total interest-bearing liabilities
    580,349       914       0.63       592,626       1,185       0.80       354,178       1,255       1.42       588,748       3,539       0.80       338,823       3,722       1.46  
 
                                                                                                                       
Non-interest-bearing liabilities:
                                                                                                                       
Non-interest-bearing deposits
    100,570                       38,927                       15,556                       59,423                       13,825                  
Other non-interest-bearing
    6,898                       13,909                       8,659                       11,973                       8,027                  
liabilities
     
Total liabilities
    687,817                       645,462                       378,393                       660,144                       360,675                  
Total equity
    105,951                       96,245                       76,504                       99,587                       75,993                  
Total liabilities and equity
  $ 793,768                     $ 741,707                     $ 454,897                     $ 759,731                     $ 436,668                  
 
                                                                                                                       
Net interest income
          $ 5,316                     $ 5,599                     $ 3,569                     $ 16,132                     $ 10,284          
 
                                                                                                                       
Interest rate spread
            2.77 %                     3.18 %                     3.23 %                     2.95 %                     3.15 %        
Net interest-earning assets
  $ 151,608                     $ 89,105                     $ 60,518                     $ 110,411                     $ 66,210                  
Net interest margin
            2.91 %                     3.29 %                     3.44 %                     3.08 %                     3.39 %        
Ratio of interest-earning assets
    126.12 %                     115.04 %                     117.09 %                     118.75 %                     119.54 %                
to interest-bearing liabilities
     
       
ASSET QUALITY INDICATORS
  March 31,     December 31,     June 30,     March 31,  
(Dollars in thousands)
  2021     2020     2020     2020  
 
                       
Non-performing assets:
                       
Non-accruing loans
  5,956     5,085     3,172     1,914  
Accruing loans past due 90 days or more
    -       -       90       198  
Total non-performing loans
  5,956     5,085     3,262     2,112  
 
                               
Real estate owned
    100       100       100       -  
 
                               
Total non-performing assets
  6,056     5,185     3,362     2,112  
 
                               
Non-performing loans to total loans
    1.24 %     1.02 %     0.64 %     0.60 %
Non-performing assets to total assets
    0.74 %     0.69 %     0.46 %     0.46 %
ALLL to total loans and leases
    0.75 %     0.72 %     0.69 %     0.86 %
ALLL to non-performing loans
    60.43 %     70.54 %     107.88 %     142.47 %
 
                               

Key annualized 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,  
 
  2021     2020     2020     2021     2020  
PERFORMANCE RATIOS:
                             
(annualized)
                             
Return on average assets
    0.54 %     0.74 %     0.74 %     0.55 %     0.80 %
Return on average equity
    4.03 %     5.72 %     4.38 %     4.17 %     4.60 %
Net interest margin
    2.91 %     3.29 %     3.44 %     3.08 %     3.39 %
Net charge-off ratio
    0.00 %     0.02 %     0.00 %     0.01 %     0.09 %
Efficiency ratio
    77.04 %     72.75 %     73.38 %     78.07 %     75.96 %
Tangible common equity
    25.78 %     12.32 %     12.37 %     25.78 %     15.65 %
 
                                       
 
                                       
William Penn Bancorporation and Subsidiaries
                       
Non-GAAP Reconciliation
                       
(Dollars in thousands, except share and per share data)
                       
 
  March 31,     December 31,     June 30,     March 31,  
 
  2021     2020     2020     2020  
 
                       
Calculation of Tangible Book Value per Share:
                       
Total Stockholders' Equity
  215,040     97,189     96,365     77,170  
Less: Goodwill and other intangible assets
    5,858       5,922       6,050       5,854  
Total tangible equity (non-GAAP)
  209,182     91,267     90,315     71,316  
 
                               
Total common shares outstanding (adjusted for 3.2585 exchange ratio)
    15,170,566       14,628,530       14,628,530       12,969,332  
 
                               
Book value per share (GAAP)
  14.17     6.64     6.59     5.95  
Tangible book value per share (non-GAAP)
  13.79     6.24     6.17     5.50  
 
                               
Calculation of the ratio of the allowance for loan losses to total loans, excluding acquired loans:
                               
Gross loans receivable
  479,329     498,392     512,124     349,535  
Less: Loans acquired in a business combination
    177,996       199,227       235,112       63,939  
Gross loans receivable, excluding acquired loans (non-GAAP)
  301,333     299,165     277,012     285,596  
 
                               

SOURCE: William Penn Bancorp, Inc.



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