Wsfs Financial Corporation · NASDAQ:WSFS
Wsfs Financial — Q1 2018 Earnings Presentation
42 slides from Wsfs Financial's earnings presentation, May 3, 2018
Slide 1: WSFS Financial Corporation 1Q 2018 Investor Update
WSFS Financial Corporation 1Q 2018 Investor Update May 3, 2018 EXHIBIT 99.2
Slide 2: Investor relations and management 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 stockholderrelations@wsfsbank.com www.wsfsbank.com Mark A. Turner Chairman, President and CEO 302-5
Slide 3: Table of Contents
Table of Contents Forward-Looking Statements / Non-GAAP Information / Reported Financial Results 2018 Outlook The WSFS Franchise Page 4 Page 10 Page 13 3 1Q 2018 Highlights Page 7 Selected Financial Information Page 24 Appendix 1 – Management Team Page 35 Appendix 2 – Business Model Page 37 Appendix
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 believes that these non-GAAP measures provide a greater
Slide 6: Reported Financial Results
Reported Financial Results 6 1Q 2018 Reported Results: • Reported net income of $37.4 million, or $1.16 per diluted common share for 1Q18 compared to net income of $18.9 million, or $0.59 per share for 1Q17 and a net loss of $9.8 million, or $0.31 per share for 4Q17. • Net revenue was $105.2 million
Slide 7: 1Q 2018 Highlights
1Q 2018 Highlights Financial Corporation
Slide 8: 1Q 2018 Core Results: Strong Operating Results
1Q 2018 Core (1) Results: Strong Operating Results Balanced Loan Portfolio Growth Continues • Net loans increased $14.3 million, or 1% annualized, from 4Q 2017. Excluding an intentional decline in residential mortgages of $24.9 million, net loans increased $39.2 million, or 3% (annualized), includin
Slide 9: 1Q 2018 Highlights: Customer Funding, Credit Costs, Credit Quality
1Q 2018 Highlights Customer Funding Reflects Expected Seasonality • Total customer funding declined $14.2 million, or 1% (annualized) from 12/31/17. This excludes the anticipated seasonal run-off of $55.0 million in public funding dollars. This decline reflected seasonal trends as well as the impact
Slide 10: 2018 Outlook
2018 Outlook Financial Corporation
Slide 11: 2018 Outlook
2018 Outlook(1) 11 • Mid-to high-single-digit loan and deposit growth • Net interest margin in the 3.90%s • Assumes one rate increase in June 2018 • The impact of any additional rate increases and the magnitude and lag of rising deposit betas will likely determine our ability to get to the upper end
Slide 12: Core & Sustainable ROA
0.91% 0.95% 1.13% 1.15% 1.19% 1.30% 0.80% 0.90% 1.00% 1.10% 1.20% 1.30% 1.40% 1.50% FY13 Core & Sustainable FY14 Core & Sustainable FY15 Core & Sustainable FY16 Core & Sustainable FY17 Core & Sustainable FY18 Outlook 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
Slide 13: The WSFS Franchise
The WSFS Franchise Financial Corporation
Slide 14: The WSFS Franchise
• Largest independent bank and trust co. HQ in the Del. Valley • $7.0 billion in assets • $19.1 billion in fiduciary assets, including $2.3 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 15: Delaware deposit market share
*Most recently available FDIC data 15 The WSFS Franchise Deposits of Traditional Banks in the State of Delaware June 30, 2017* Rank Institution Branch Count Total Deposits in Market Total Market Share ‘16-’17 Growth ‘16-’17 Growth CAGR ‘08-’17 1 M&T Bank Corp (NY)1 39 6,063,740 29.28% 295,893 5.13%
Slide 16: The WSFS Franchise – PA Expansion
The WSFS Franchise – PA Expansion 16 Strong position as one of the few remaining super-community banks in the attractive and rapidly consolidating southeastern PA markets (1) Source: FDIC (2) Based on customer address (3) Includes one location (West Capital) in Philadelphia, PA Figures are as of 6/3
Slide 17: Deposit market share in southeastern Pennsylvania counties
17 Deposits of Traditional Banks in Chester, Delaware and Montgomery Counties in Pennsylvania June 30, 2017* Rank Institution Branch Count Total Deposits in Market Total Market Share ‘16-’17 Growth ‘16-’17 Growth CAGR ‘08-’17 1 Wells Fargo Bank 80 $10,975,086 19.29% $977,060 9.77% 6.53% 2 TD Bank 46
Slide 18: The WSFS Franchise - Attractive Markets
The WSFS Franchise - Attractive Markets 18Sources: 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 19: Regional Employment Composition
Regional Employment Composition Philadelphia-Camden-Wilmington MSA 19Chart Data Source: Bureau of Labor Statistics: Employees on nonfarm payrolls by industry supersector, Philadelphia-Camden-Wilmington MSA, not seasonally adjusted; July 2017 (1) Unemployment rate is for the State of Delaware, Cheste
Slide 20: Diversified & Robust Fee Income
$32 $33 $33 $36 $40 $46 $19 $24 $26 $30 $36 $43 $14 $16 $18 $23 $27 $36 33% 35% 34% 35% 34% 36% $0 $20 $40 $60 $80 $100 $120 2012 2013 2014 2015 2016 2017 T o t a l C o r e ( 1 ) F e e i n c o m e $ i n M i l l i o n s Trust & Wealth Cash Connect Bank Segment WSFS Strategic Plan goal of fee (non-int
Slide 21: WSFS Wealth
The WSFS Franchise – WSFS Wealth A Full-Service Wealth Management Offering 21 Net Revenue of $12.9 million in 1Q 2018 Pre-tax Profit of $4.8 million
Slide 22: Cash Connect
The WSFS Franchise – Cash Connect® • Leading provider of ATM vault cash, armored carrier management, cash forecasting services, insurance and equipment services • Over $963 million in vault cash managed • Over 23,000 non-bank ATMs in all 50 States • Vault cash margin pressure offset by additional ma
Slide 23: Embracing Innovation as a Catalyst for Growth
Embracing Innovation as a Catalyst for Growth 23
Slide 24: Selected Financial Information
Selected Financial Information
Slide 25: WSFS Bank Asset Composition
Cash Connect 8% Investments 16% BOLI <1% Non- Earning Assets 7% Net Loans 69% The WSFS Franchise - WSFS Bank Assets $7.0 Billion; Net Loans $4.8 Billion Asset Composition – March 31, 2018 5% 12% 6% 53% 24% CRE C&I Residential Mortgages Consumer Construction • Commercial loans comprise 83% of the loa
Slide 26: Funding Composition
Total Funding – $7.0 Billion; Customer Deposits- $4.9 Billion Funding Composition – March 31, 2018 Other Liabilities 1% Wholesale Deposits 4% Borrowings 13% Equity 11% Customer Deposits 71% Non- interest DDA 28% Interest DDA 20% Money Market & Savings 39% Time 13% • Core deposits represent 87% of to
Slide 27: Balanced Growth
The WSFS Franchise - Balanced Growth 27 Balance sheet composition has remained steady as WSFS has grown 53% 53% 23% 24% 9% 5% 10% 12% 5% 6% 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 March 31, 2013 March 31, 2018 Loan Composition C&I CRE Residential Mortgage Consumer Construction
Slide 28: Well Positioned for Rising Rates
Well Positioned for Rising Rates As of 3/31/18 (WSJ Prime @ 4.75%) 12 month BPS Change(1) NII % Impact NII $ Impact +25 0.6% +1.3mm +50 1.2% +2.7mm +100 2.3% +5.4mm +200 4.4% +10.3mm Balance Sheet Drivers • High % of variable/adjustable rate total loan portfolio: 65% • High % core deposits: 87%; hig
Slide 29: Overall Credit Trends Remain Strong
0.81% 0.20% 0.70% 1.20% 1.70% 2.20% 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 2 Q 1 7 3 Q 1 7 4 Q 1 7 1 Q 1 8 Overall Credit Trends Remain Strong 0.56% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% 1.80%
Slide 30: Loan Portfolio Composition
Loan Portfolio Composition Outstanding Balances as of 3/31/2018 30 No industry or CRE concentrations in the loan portfolio Commercial & Industrial: $1.49 billion Owner Occupied CRE: $1.08 billion Top 25 Relationships ($): $529 million Top 25 Relationships (% of C&I/OOCRE portfolio): 21% Top 25 Relat
Slide 31: Robust Capital to Grow and to Return to Shareholders
12/12 12/13 12/14 12/15 12/16 12/17 3/18 TRBC 14.29% 14.36% 13.83% 13.11% 11.93% 12.08% 12.42% Tier-1 Capital 13.04% 13.16% 12.79% 12.31% 11.19% 11.36% 11.69% Excess RBC (above 10%) $140,117 $153,542 $147,186 $146,788 $66,939 $119,940 $139,610 TCE(1) 7.72% 7.69% 9.00% 8.84% 7.55% 7.87% 8.21% TBV/Sha
Slide 32: 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 2018, WSFS repurchased
Slide 33: Business Model and Total Shareholder Returns
Business Model and Total Shareholder Returns WSF: Epsalon FOCUSED BUSINESS MODEL-VIRTUOUS CYCLE ee pei DELIVERING | GROWING AND VALU AGED ASSOCIATES are ‘ i ‘ P surveyed.’ per . @® of The News Journal. Received the Gallup a) Onasscale of 1-5, 65% Great Wo ‘of WSFS Customers rated for the past three
Slide 34: Appendices
Appendices Financial Corporation
Slide 35: Appendix – Management Team
Appendix 1 – Management Team 35 Mark A. Turner, 55, has served as President and Chief Executive Officer since 2007. He was elected Chairman of the Board of Directors in July 2017. Mr. Turner was previously Chief Operating Officer and the Chief Financial Officer for WSFS. Prior to joining WSFS, his e
Slide 36: Appendix – Management Team
Appendix 1 – Management Team 36 Steve Clark, 60, joined WSFS Bank in 2002 and has served as Executive Vice President and Chief Commercial Banking Officer since May 2016. From 2002 thru 2006, Mr. Clark led and managed the establishment of the Middle Market lending unit, and in 2007 became Division Ma
Slide 37: Appendix – Business Model
Appendix 2 – Business Model 37
Slide 38: Appendix – Non-GAAP Financial Information
Appendix 3 – Non-GAAP Financial Information Tangible common equity to assets and Tangible common book value per share 38 3 Months Ended 3 Months Ended 3 Months Ended March 31, 2018 December 31, 2017 March 31, 2017 Total Assets $6,987,931 $6,999,540 $6,852,899 Less: Goodwill and other intangible asse
Slide 39: Core: GAAP Reconciliation
Appendix 3 – Non-GAAP Financial Information Core: GAAP Reconciliation 39 Three months ended March 31, 2018 December 31, 2017 March 31, 2017 GAAP net (loss) income $37,350 ($9,832) $18,937 Plus (less): Pre-tax adjustments: Securities gains, unrealized gains, recovery of/provision for legal settlement
Slide 40: Core: GAAP Reconciliation
Appendix 3 – Non-GAAP Financial Information Core: GAAP Reconciliation 40(1) 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) net interest incom
Slide 41: Core & Sustainable ROA: GAAP Reconciliation
Appendix 3 – Non-GAAP Financial Information Core & Sustainable ROA: GAAP Reconciliation 41 FY17 FY16 FY15 FY14 FY13 FY12 Reported (GAAP) ROA 0.87 1.06 1.05 1.17 1.07 0.73 Non-recurring PCI accretion (0.02) Long-term credit normalization (0.00) 0.04 (0.00) (0.09) (0.05) 0.33 Securities Gains (0.02) (
Slide 42: For more information please contact
For more information please contact: Investor Relations: Dominic Canuso (302) 571-6833 or dcanuso@wsfsbank.com www.wsfsbank.com Corporate Headquarters 500 Delaware Avenue Wilmington, DE 19801 42