WSFS Financial Corporation · NASDAQ:WSFS
WSFS Financial — Investor Presentation (November 2009)
37 slides from WSFS Financial's investor presentation, Nov 12, 2009
Slide 1: WSFS Financial Corporation Investor Summary
WSFS Financial Corporation Investor Summary November 12, 2009
Slide 2: Investor Relations contact information
Stockholders or others seeking information regarding the Company may call or write: WSFS Financial Corporation Investor Relations WSFS Bank Center 500 Delaware Avenue Wilmington, DE 19801 302-571-7265 [email protected] www.wsfsbank.com Mark A. Turner Rodger Levenson Stephen A. Fowle President an
Slide 3: Forward-looking statements
This report may contain statements which are not historical facts and are forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, which are based on various assumptions, some of which may be beyond the company’s co
Slide 4: 177 Year Legacy
177 Year Legacy •$3.6 billion in assets •41 branches and LPO’s •Founded in 1832, WSFS is one of the ten oldest banks in the U.S. •Second largest independent bank in Delaware Branches in light blue are new or renovated in the past five years. 4
Slide 5: Economic Trends
Economic Trends (1) •Delaware unemployment rate at 8.3% vs. the national (1) rate of 9.8% (Sept. 2009) •In the last year, home prices have experienced declines at a (2) (3) rate of 6.8% in Delaware vs. the national average of 11.3% •Recent announcement of Fisker auto manufacturing facility (plug-in
Slide 6: Earnings Trends
Earnings Trends Net Income $6,000 $4,000 $2,000 $- $(2,000) $(4,000) Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Provision For Loan Losses Pre-Tax Pre-Provision Net Revenue $20,000 $20,000 $15,000 $15,000 $10,000 $10,000 $5,000 $5,000 $- $- Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q3 08 Q4 08 Q1 09 Q2 09* Q3 09 6 All dollar
Slide 7: Organization Goals
Organization Goals •Closely managing our balance sheet; •While we bolster our capital; •And continue building a franchise that is high performing post-recession 7
Slide 8: Managing Our Balance Sheet: What We Don't Have
Managing Our Balance Sheet What We Don’t Have • Collateralized Debt Obligations (CDOs) • Bank Trust Preferred Securities • Fannie or Freddie stock or preferred securities • Equity securities in other FDIC-insured banks or thrifts • OTTI in securities • BOLI insurance wrap issues • Credit Card Portfo
Slide 9: WSFS Loan Portfolio
Managing Our Balance Sheet WSFS Loan Portfolio – $2.5 Billion, or 70% of Assets Loan Portfolio Delinquency Trends Consumer 12% 3.00% Residential 2.50% Mortgage 2.00% C&I 44% 30-89 14% 1.50% 90+ RCLD 5% Total Other 1% 1.00% 0.50% CRE 20% CCLD 4% 0.00% Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 C&I ($1.1 Billion)
Slide 10: Nonperforming Asset Growth Slowed in 3rd Quarter 2009
Managing Our Balance Sheet Nonperforming Asset Growth Slowed in 3rd Quarter 2009 Nonperforming Assets to Total Assets 3.00% OREO 2.50% TDRs 2.00% CLD 1.50% CRE C&I 1.00% Consumer 0.50% Residential Mortgage 0.00% Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 10
Slide 11: Commercial & Industrial (C&I)
Managing Our Balance Sheet Commercial & Industrial (C&I) •$1.1 billion, or 44% of total loans •Net charge-offs of $1.1 million in the 3rd quarter of 2009 (38 bps, annualized) •As with the loan portfolio in general, experiencing some migration to weakened risk ratings; however, no significant losses
Slide 12: Commercial & Industrial (C&I), continued
Managing Our Balance Sheet Commercial & Industrial (C&I), continued Industry Diversification Delinquency Trends 1.40% 1.20% 1.00% 0.80% 30-89 90+ 0.60% Total 0.40% 0.20% 0.00% Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 * 12 * Other services includes service oriented industries
Slide 13: Commercial Real Estate (excluding CLD)
Managing Our Balance Sheet Commercial Real Estate (excluding CLD) •$516 million, or 20% of total loans •No net charge-offs in the 3rd quarter 2009 •No significant weakness in the portfolio to date 13
Slide 14: Commercial Real Estate (excluding CLD), continued
Managing Our Balance Sheet Commercial Real Estate (excluding CLD), continued Industry Diversification Delinquency Trends 1.20% 1.00% 0.80% 30-89 0.60% 90+ Total 0.40% 0.20% 0.00% Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 14
Slide 15: Construction & Land Development (CLD)
Managing Our Balance Sheet Construction & Land Development (CLD) •$219 million, or less than 9% of total loans •Implemented size and concentration limits on the CLD portfolio in 2005 as evidence of housing bubble increased •Commercial CLD (CCLD) - $96 million –Net charge-offs of $0.9 million in 3rd
Slide 16: Construction & Land Development (CLD), continued
Managing Our Balance Sheet Construction & Land Development (CLD), continued •Diversified geographically –Largest RCLD concentration is $42 million or 1.6% of total loans • In Sussex County, DE •Only $54 million in land hold loans (included in balances on previous page) •Most challenging sector of lo
Slide 17: Construction & Land Development (CLD), continued
Managing Our Balance Sheet Construction & Land Development (CLD), continued Geographic Diversification Delinquency Trends 14.00% 12.00% 10.00% 8.00% 30-89 90+ 6.00% Total 4.00% 2.00% 0.00% Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 17
Slide 18: Credit-Related Costs
Managing Our Balance Sheet Credit-Related Costs •Provision for loan loss of $15.5 million in 3rd quarter 2009 –Nearly 3.5 times coverage of net charge-offs of $4.5 million –Allowance for loan losses grew to 2.05% of total loans •Thorough review and analysis of commercial loan portfolio –Detailed rev
Slide 19: Credit-Related Costs, continued
Managing Our Balance Sheet Credit-Related Costs, continued •Nonperforming assets –Increased $13.3 million, or 17%, to $93 million or 2.61% of total assets • Predominantly related to construction and land development loans –Growth in NPAs slowed compared to prior two quarters, which experienced growt
Slide 20: Investments, $573 Million or 16% of Total Assets
Managing Our Balance Sheet Investments, $573 Million or 16% of Total Assets •MBS portfolio of $526 million –Agency MBS Portfolio - $227 million • $1.1 million gain on sale of Agency MBS due to an Agency MBS extension program –Legacy Non-Agency Portfolio - $255 million • Significant seasoning; strong
Slide 21: Improving Capital: Capital Growth
Improving Capital Capital Growth •Capital strengthened substantially in 3rd quarter 2009 •3rd quarter $25 million stock sale to Peninsula Investment Partners, LP –$29 per share, plus warrants –Increases insider ownership to 27%(1) •Combined with improved securities mark to market and contribution of
Slide 22: Improving Capital: Capital Ratio Improvement
Improving Capital Capital Ratio Improvement Reported Reported Q3 2009 Q2 2009 Tangible Common Book Value / Share $33.45 $33.19 Tangible Common Equity to Assets 6.65% 5.75% Up 90 bps Tier 1 Capital (Well Capitalized – 6%) 11.17% 9.95% Up 122 bps Risk-based Capital (Well Capitalized – 10%) 12.39% 11.1
Slide 23: Building Our Franchise
Building Our Franchise Goal: High Performing for the Long Term •Focused business strategy •Well-positioned within a favorable market •Building our franchise and growing pre-tax, pre-provision revenue 23
Slide 24: Focused Business Model
Building Our Franchise Focused Business Model Delivering Creating Building Engaged Stellar Customer Associates Shareholder Service Advocates Value • Consistently ranked in the • Gallup survey shows • Customer advocacy survey • Builds sustainable real top quartile of all WSFS best among top places WS
Slide 25: Recent Deposit & Loan Growth
Building Our Franchise Recent Deposit & Loan Growth •Strong growth in customer deposits –$83 million or 17% growth (annualized) from June 30, 2009 –$530 million or 35% of growth from September 30, 2008 • Includes $95 million from Delaware 4 branch acquisition in October 2008 –Most of growth in core
Slide 26: Delaware Traditional Bank Deposits
Building Our Franchise Market opportunities for significant disruption/distraction among major, out-of-market competitors Delaware Traditional Bank Deposits (June 30, 2009) Total Deposits in Total Market Rank Institution Branch Count Market Share 1 Wilmington Trust Corp. (DE) 43 5,412,467 28.06% 2 W
Slide 27: Deposit Market Share
Building Our Franchise Deposit Market Share •FDIC Deposit Market Share report released as of June 30, 2009 –WSFS deposits grew 32% over June 30, 2008 • adjusted to 25% for small branch acquisition in 4th quarter 2008 –Our large competitors’ deposits grew only 11% - 15% over the same period –Increase
Slide 28: Growth in Margin
Building Our Franchise Growth in Margin Net Interest Income (‘000) Net Interest Margin $27,000 3.40% 3.35% $26,000 3.30% $25,000 3.25% •Net interest margin: $24,000 3.20% -Up 4 basis points from 2nd 3.15% quarter 2009 $23,000 3.10% -Up 30 basis points from 1st $22,000 3.05% quarter 2009 3.00% $21,00
Slide 29: Growth in Fee Income
Building Our Franchise Growth in Fee Income Fee income as Fee Income a % of total (‘000) revenue $15,000 36.00% $14,000 35.00% $13,000 34.00% •Noninterest income: 33.00% - Increased $1.9 million or $12,000 32.00% 15% from 2nd quarter 2009 $11,000 31.00% • 6% increase when adjusted $10,000 for gains
Slide 30: Expense Management Program
Building Our Franchise Expense Management Program •Creative Opportunities for Revenues and Expenses –The “CORE” initiative is aimed at cutting nearly 6% of core bank expenses –$2.3 million in savings (annualized) since implementation –Expect to implement nearly all $5.8 million in annual savings by
Slide 31: Expense Management Program
Building Our Franchise Expense Management Program •Excluding niche businesses(1) and $5.7 million in non-routine charges in 2nd quarter 2009, noninterest expense increased only $115,000 or less than 1% from 2nd quarter of 2009 –Despite full quarter expense of new branches opened during the 2nd quart
Slide 32: Investment Summary
Investment Summary •Proactively addressing credit exposures through loan analysis, charge- offs, workouts, loan sales and reserve build Loan Portfolio •Stabilizing credit trends with slower growth in delinquencies and nonperforming loans •Significantly bolstered in 3rd quarter 2009 •Supports opportu
Slide 33: Appendices
Financial Corporation Appendices
Slide 34: Appendix – Delaware Home Sales
Appendix 1 – Delaware Home Sales 34
Slide 35: Appendix – Delaware Home Sales
Appendix 2 – Delaware Home Sales 35
Slide 36: Appendix – Stock Information
Appendix 3 – Stock Information P/E Ratio Price to Tangible Common Book 30x 23.2x 25x 84% 83% 20x 13.9x 15x 10x WSFS $1-5 Billion Peers WSFS and Peer Group ratios calculated using stock price as of November 4, 2009 and tangible book values as of September 30, 2009 and 2010 consensus estimates. (Peer
Slide 37: Appendix – Non-routine Items
Appendix 4 – Non-routine Items 2nd quarter 2009 pre-tax, pre-provision net revenue, as reported $8.1 million Less non-routine items: FDIC special assessment $1.7 million Write-down of 1st Reverse $1.5 million Wire fraud case $1.5 million Due diligence on acquisition prospect $1.0 million Proforma 2n
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