WVS Financial Corp. Announces Second Quarter, and Six Months Ended December 31, 2003 Net Income and Earnings Per Share.

Business Editors

PITTSBURGH--(BUSINESS WIRE)--Jan. 30, 2004

WVS Financial Corp. (Nasdaq:WVFC), the holding company for West View Savings Bank, today reported diluted earnings per share and net income for the quarter ended December 31, 2003 totaled $0.30 and $770,000, respectively, compared to $0.30 and $781,000 for the same period in 2002. The $11,000 decrease in net income for the quarter ended December 31, 2003 was primarily attributable to a $809,000 decrease in net interest income and a $11,000 decrease in non-interest income, which was partially offset by a $624,000 decrease in provision for loan losses, a $107,000 decrease in non-interest expense, and a $78,000 decrease in income tax expense. The decrease in net interest income was primarily attributable to lower rates earned on Company assets due to lower market interest rates which was partially offset by lower rates paid on deposits. The Company experienced higher levels of repayments on its loan and securities portfolios due to refinancing activities. The Company redeployed these proceeds into shorter- term loans and investment securities to better manage its interest rate risk. The decrease in non-interest income was principally attributable to decreases in ATM fee income. The decrease in provision for loan losses was primarily due to the work-out of non-performing assets and paydowns on the Company's loan portfolio. The decrease in non-interest expense was primarily attributable to decreases in payroll related costs. The decrease in income tax expense was principally attributable to lower levels of taxable income.

Net income and diluted earnings per share for the six months ended December 31, 2003 totaled $1,122,000 and $0.44, respectively, compared to $1,780,000 and $0.67 for the same period in 2002. The $658,000 decrease in net income during the period was primarily attributable to a $2,012,000 decrease in net interest income and a $58,000 decrease in non-interest income, which were partially offset by a $775,000 decrease in provision for loan losses, a $334,000 decrease in non-interest expense, and a $303,000 decrease in income tax expense. The decrease in net interest income reflects continued low market interest rates, higher levels of loan repayments, the residual effects of higher costs long-term borrowings and lower overall yields on earning assets and mortgage-backed securities to better manage its interest rate risk. The decrease in non-interest income was principally attributable to $64,000 of pre-tax gains recognized on the sale of investments from the Company's investment portfolio in the six months ended December 31, 2002. The decrease in provision for loan losses was primarily attributable to the work-out of non-performing assets and paydowns on the Company's loan portfolio. The decrease in non-interest expense was principally attributable to decreases in charitable contributions eligible for PA tax credits, payroll related costs, and legal expenses and costs associated with the work-out of non-performing assets. The decrease in income tax expense was primarily a result of lower levels of taxable income.

Return on equity and return on assets for the six months ended December 31, 2003 were 7.38% and 0.58%, respectively.