WSFS Financial Corporation · NASDAQ:WSFS
WSFS Financial — Q1 2017 Earnings Presentation
43 slides from WSFS Financial's earnings presentation, May 9, 2017
Slide 1: WSFS Financial Corporation 1Q 2017 Investor Update
WSFS Financial Corporation 1Q 2017 Investor Update May 10, 2017 EXHIBIT 99.2
Slide 2: Investor relations contacts
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 302-571-7264 [email protected] www.wsfsbank.com Mark A. Turner President and CEO 302-571-7160 mt
Slide 3: Table of Contents
Table of Contents Forward-Looking Statements / Non-GAAP Information / Reported Financial Results 2017 Outlook & 2016 – 2018 Strategic Plan The WSFS Franchise Page 4 Page 10 Page 14 3 1Q 2017 Highlights Page 7 Selected Financial Information Page 25 Appendix 1 – Management Team Page 36 Appendix 2 – Bu
Slide 4: Forward-Looking Statements
Forward-Looking Statements This presentation contains estimates, predictions, opinions, projections and other "forward-looking statements" as that phrase is defined in the Private Securities Litigation Reform Act of 1995. Such statements include, without limitation, references to the Company's predi
Slide 5: Non-GAAP Information
Non-GAAP Information This presentation contains financial information and performance measures determined by methods other than in accordance with accounting principles generally accepted in the United States (“GAAP”). The Company’s management uses these non-GAAP measures to measure the Company’s pe
Slide 6: Reported Financial Results
Reported Financial Results 6 1Q 2017 Reported Results: • Reported net income was $18.9 million, or $0.59 per diluted common share for 1Q 2017 compared to net income of $15.8 million, or $0.52 per share for 1Q 2016 and net income of $18.1 million, or $0.56 per share for 4Q 2016 • Net revenues were $8
Slide 7: 1Q 2017 Highlights
1Q 2017 Highlights Financial Corporation
Slide 8: 1Q 2017 Core Results
1Q 2017 Core Results: • EPS: • ROA: • ROTCE: Strong Revenue Growth • Core(1) net revenue increased $12.2 million, or 18% over 1Q 2016, reflecting strong organic and acquisition growth • Core(1) net interest income improved $7.7 million, or 17% over 1Q 2016; net interest margin (NIM) was 3.90% in 1Q
Slide 9: 1Q 2017 Highlights: Credit Costs and Asset Quality
1Q 2017 Highlights Credit Costs • Total credit costs (provision for loan losses, loan workout expenses, OREO expenses, and other credit reserves) were $2.8 million for 1Q 2017, a decrease from $5.9 million during 4Q 2016, and an increase from $1.3 million during 1Q 2016 Asset Quality • Total problem
Slide 10: 2017 Outlook & 2016-2018 Strategic Plan
2017 Outlook & 2016-2018 Strategic Plan
Slide 11: 2017 Outlook / Plan – Driving Factors
2017 Outlook / “Plan” – Driving Factors 11 • Mid-to-high single digit loan and core deposit growth • Net interest margin in the 3.90%’s • One rate increase assumed in November 2017(1) • Expected payoff of $55 million in 6.25% senior notes in September will enhance 4Q 2017 NIM and thereafter • Total
Slide 12: Core & Sustainable ROA – 2017 Outlook
0.91% 0.95% 1.13% 1.15% 1.24% 0.80% 0.85% 0.90% 0.95% 1.00% 1.05% 1.10% 1.15% 1.20% 1.25% FY13 Core & Sustainable FY14 Core & Sustainable FY15 Core & Sustainable FY16 Core & Sustainable FY17 Plan 12 C o r e & S u s t a i n a b l e ( 1 ) R O A Core & Sustainable ROA(1) GAAP ROA 1.07% 1.17% 1.05% 1.06
Slide 13: 2016 – 2018 Strategic Plan
2016 – 2018 Strategic Plan 13 • Strong organic growth driven by favorable market demographics and competitive disruption • Selected acquisitions with a focus on increasing fee-based revenue • Fee (non-interest) income to total revenue of 40% by 4Q 2018 • Positive operating leverage • Mid-to-high sin
Slide 14: The WSFS Franchise
The WSFS Franchise Financial Corporation
Slide 15: The WSFS Franchise
• Largest independent bank and trust co. HQ in the Del. Valley • $6.9 billion in assets • $17.6 billion in fiduciary assets, including $2.2 billion in assets under management • 77 offices • Founded in 1832, WSFS is one of the ten oldest banks in the U.S. • Major business lines • Retail • Commercial
Slide 16: Deposit market share in Delaware
*Most recently available FDIC data 16 The WSFS Franchise - WSFS Bank Deposits of Traditional Banks in the State of Delaware June 30, 2016 Rank Institution (Adjusted for M&A) Branch Count Total Deposits in Market Total Market Share ‘15-’16 Growth ‘15-’16 Growth CAGR ‘08-’16 1 M&T Bank 39 5,767,847 28
Slide 17: The WSFS Franchise – PA Expansion
The WSFS Franchise – PA Expansion 17 Over the past 5 years, WSFS has successfully expanded its franchise into Pennsylvania through: • De novo branches; hiring local lenders • Acquisition of Array / Arrow • Acquisition of Alliance Bank • Acquisition of Penn Liberty Bank • Acquisition of West Capital
Slide 18: Deposit market share in southeastern Pennsylvania counties
*Most recently available FDIC data 18(1) Ally Bank (f/k/a GMAC Bank) is not considered traditional deposits and therefore excluded for 2008. (2) WSFS deposits include the acquisition of Penn Liberty . (3) Credit Unions represent an additional $6.412B in deposits, including $2.171B @ Citadel FCU, $1.
Slide 19: The WSFS Franchise - Attractive Markets
The WSFS Franchise - Attractive Markets 19Sources: SNL Financial, U.S. Census Bureau, Zillow Note: No Zillow Home Value Index was available for Sussex County; information shown details median listing price in Sussex County, DE. - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,00
Slide 20: Regional Employment Composition
Regional Employment Composition Philadelphia-Camden-Wilmington MSA 20Source: Bureau of Labor Statistics: Employees on nonfarm payrolls by industry supersector, Philadelphia-Camden-Wilmington MSA, not seasonally adjusted; January 2017 Unemployment rate is for the Philadelphia-Camden-Wilmington MSA –
Slide 21: Diversified & Robust Fee Income
WSFS Strategic Plan goal of fee (non-interest) income to total revenue of 40% by 4Q 2018 $31 $30 $32 $33 $33 $36 $40 $13 $16 $19 $24 $26 $28 $33 $5 $13 $14 $16 $18 $23 $27 29% 32% 33% 35% 34% 34% 34% $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 2010 2011 2012 2013 2014 2015 2016 T o t a l C o r e F e
Slide 22: WSFS Wealth
The WSFS Franchise – WSFS Wealth A Full-Service Wealth Management Offering 22 Net Revenue of $11.6 million in 1Q 2017; Pre-tax profit of $3.3 million
Slide 23: Cash Connect
The WSFS Franchise – Cash Connect® • Leading provider of ATM vault cash, armored carrier management, cash forecasting services, insurance and equipment services • More than $1 billion in vault cash managed • Over 21,000 non-bank ATMs in all 50 States • Vault cash margin pressure offset by additional
Slide 24: Embracing Innovation as a Catalyst for Growth
Embracing Innovation as a Catalyst for Growth 24
Slide 25: Selected Financial Information
Selected Financial Information
Slide 26: WSFS Bank Assets and Loan Composition
Cash Connect 11% Investments 15% BOLI 1% Non- Earning Assets 7% Net Loans 67% The WSFS Franchise - WSFS Bank Assets $6.9 Billion; Net Loans $4.6 Billion Asset Composition – March 31, 2017 7% 10% 5% 53% 25% CRE C&I Residential Mortgages Consumer Construction • Commercial loans comprise 84% of the loa
Slide 27: Total Funding and Funding Composition
Total Funding – $6.9 Billion; Customer Deposits- $5.1 Billion Funding Composition – March 31, 2017 Other Liabilities 1.0% Wholesale Deposits 4.0% Borrowings 10.2% Equity 10.3% Customer Deposits 74.4% Non- interest DDA 32.5% Interest DDA 18.3% Money Market & Savings 38.0% Time 11.2% • Excluding a sho
Slide 28: Balanced Growth
The WSFS Franchise - Balanced Growth 28 8% 11% 25% 16% 14% 20%14% 14%28% 30% 10% 9% 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 December 31, 2013 March 31, 2017 (1) Funding Composition Equity Borrowings & Other Non-Interest DDA (1) Interest DDA Money Market & Savings Time
Slide 29: Well Positioned for Rising Rates
Well Positioned for Rising Rates As of 3/31/17 (WSJ Prime @ 4.00%) BPS Change(1) NII % Impact NII $ Impact +50 0.7% +$1.4mm +100 1.4% +$3.0mm +200 2.9% +$6.1mm +300 4.3% +$9.1mm +400 5.6% +$11.8mm Balance Sheet Drivers • High % of variable/adjustable rate total loan portfolio: 66% • High % core depo
Slide 30: Overall Credit Trends Remain Strong
Overall Credit Trends Remain Strong 0.53% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% 1.80% 2.00% 1 Q 1 3 2 Q 1 3 3 Q 1 3 4 Q 1 3 1 Q 1 4 2 Q 1 4 3 Q 1 4 4 Q 1 4 1 Q 1 5 2 Q 1 5 3 Q 1 5 4 Q 1 5 1 Q 1 6 2 Q 1 6 3 Q 1 6 4 Q 1 6 1 Q 1 7 Delinquencies Large Relationship (2) Delinquencies (1) / Gross
Slide 31: Loan Portfolio Composition
Loan Portfolio Composition Outstanding Balances as of 3/31/17 31 Mixed Use 4% Flex, Warehouse, Self- Storage, General Industrial 10% Office 17% Retail 27% Residential 1-4 19% Residential Multi- Family 15% Special Use & Other 8% CRE Investor & Construction No industry or CRE concentrations in the loa
Slide 32: Robust Capital to Grow and to Return to Shareholders
12/12 12/13 12/14 12/15 12/16 3/17 TRBC 14.29% 14.36% 13.83% 13.11% 11.93% 11.97% Tier-1 Capital 13.04% 13.16% 12.79% 12.31% 11.19% 11.25% Excess RBC (above 10%) $140,117 $153,542 $147,186 $146,788 $66,939 $68,563 TCE(1) 7.72% 7.69% 9.00% 8.84% 7.55% 7.71% TBV/Share $12.74 $12.89 $15.30 $16.30 $15.8
Slide 33: Strong Alignment / Capital Management
Strong Alignment / Capital Management • Executive management bonuses and equity awards based on bottom-line performance • ROA, ROTCE and EPS growth • Insider ownership1 is over 5% • Board of Directors and Executive Management ownership guidelines in place and followed • In 1Q 2017, WSFS repurchased
Slide 34: Business Model and Total Shareholder Returns
Business Model and Total Shareholder Returns (1) Completed by the Gallup Organization, as of December 31, 2016 (2) Per Bloomberg; closing price as of March 31, 2017 Focused Business Model • Regularly ranked in the top quartile of all businesses surveyed1 • Received the 2016 Gallup Great Workplace Aw
Slide 35: Appendices
Appendices Financial Corporation
Slide 36: Appendix – Management Team
Appendix 1 – Management Team 36 Mark A. Turner, 53, has served as President and Chief Executive Officer since 2007. Mr. Turner was previously Chief Operating Officer and the Chief Financial Officer for WSFS. Prior to joining WSFS, his experience includes working at CoreStates Bank and Meridian Banco
Slide 37: Appendix – Management Team
Appendix 1 – Management Team 37 Paul S. Greenplate, 58, Executive Vice President and Chief Risk Officer, joined WSFS in 1999 and prior to his leadership role in the Risk Division, he served as Senior Vice President and Treasurer. As Executive Vice President and Chief Risk Officer, Mr. Greenplate ove
Slide 38: Appendix – Business Model
Appendix 2 – Business Model 38
Slide 39: Non-GAAP: Tangible common equity and book value
Appendix 3 – Non-GAAP Financial Information Tangible common equity to assets and Tangible common book value per share 39 3 Months Ended 3 Months Ended 3 Months Ended March 31, 2017 December 31, 2016 March 31, 2016 Total Assets $6,852,889 $6,765,270 $5,684,994 Less: Goodwill and other intangible asse
Slide 40: Non-GAAP: Core GAAP Reconciliation
Appendix 3 – Non-GAAP Financial Information Core: GAAP Reconciliation 40(1) Core Net Interest Income plus Core Non-interest Income. (2) Noninterest expense divided by (tax-equivalent) net interest income plus noninterest income . (3) Core noninterest expense divided by (tax-equivalent) core net inte
Slide 41: Non-GAAP: Core GAAP Reconciliation FY11-FY16
Appendix 3 -Non-GAAP Financial Information Core: GAAP Reconciliation 41 FY16 Pre-Tax Adjustments FY16 FY15 Pre-Tax Adjustments FY15 FY14 Pre-Tax Adjustments FY14 FY13 Pre-Tax Adjustments FY13 FY12 Pre-Tax Adjustments FY12 FY11 Pre-Tax Adjustments FY11 Reported (GAAP) Net Income $64,079 $53,533 $53,7
Slide 42: Non-GAAP: Core & Sustainable ROA Reconciliation
Appendix 3 – Non-GAAP Financial Information Core & Sustainable ROA: GAAP Reconciliation 42 FY16 FY15 FY14 FY13 FY12 Reported (GAAP) ROA 1.06% 1.05% 1.17% 1.07% 0.73% Non-recurring PCI accretion (0.02) - - - Long-term credit normalization 0.04 - (0.09) (0.05) 0.33 Securities Gains (0.03) (0.02) (0.01
Slide 43: For more information please contact
For more information please contact: Investor Relations: Dominic Canuso (302) 571-6833 or [email protected] www.wsfsbank.com Corporate Headquarters 500 Delaware Avenue Wilmington, DE 19801 43