WSFS Expects Wind Down of Reverse Mortgage Subsidiary by Year End

WSFS Financial, the parent company of Wilmington Savings Fund Society, FSB reported a breakeven net income for the third quarter and a loss per common share of $0.10.

“We have made fundamental progress at improving our core franchise and earnings power, and while our results have stabilized in the third quarter, we continue to be challenged by high credit costs,”  said Mark A. Turner, President and CEO.

The company recognized a $746,000 positive adjustment on a $12.4 million par value BBB+ rated mortgage-backed security (MBS) issued in connection with a 2002 reverse mortgage securitization as a result of market improvement in credit spreads.

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During the third quarter of 2009, 1st Reverse reported a pre-tax loss of $166,000 as it moved towards completing the wind-down said WSFS.  The reverse mortgage subsidy recorded $626,000 in fee income and expenses of $792,000 during the quarter.

Earlier this year, WSFS announced it would be winding down 1st Reverse despite the fact it was close to breaking even.  WSFS anticipates it will complete the wind-down during the fourth quarter of 2009.