Slide 1: WSFS Financial Corporation 4Q 2016 Investor Update
WSFS Financial Corporation 4Q 2016 Investor Update February 7, 2017
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 stockholderrelations@wsfsbank.com www.wsfsbank.com Mark A. Turner Dominic Canuso Rodger Levenson Pr
Slide 3: Table of Contents
Table of Contents Forward-Looking Statements / Non-GAAP Information Page 4 4Q 2016 Highlights Page 6 2017 Outlook & 2016 – 2018 Strategic Plan Page 9 The WSFS Franchise Page 13 Selected Financial Information Page 22 Appendix 1 – Management Team Page 31 Appendix 2 – Business Model Page 33 Appendix 3
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: 4Q 2016 Highlights
4Q 2016 Highlights Financial. Corporation
Slide 7: 4Q 2016 Highlights
4Q 2016 Highlights 4Q 2016 Core(1) Results: • EPS: $0.58 • NIM 3.90% • ROA: 1.12% • Fee Income / Total Revenue 33.6% • ROTCE: 15.39% • Efficiency Ratio 57.8% Strong Revenue Growth • Core(1) net revenue increased $9.6 million, or 14% over 4Q 2015, reflecting strong organic and acquisition growth • Co
Slide 8: 4Q 2016 Highlights
4Q 2016 Highlights Credit Costs Include the Impact of the Provision & Charge-Off of a Unique Private Banking Credit • A $4.0 million private banking credit exposure granted under a business development initiative was downgraded to non-performing after a precipitous change in the financial condition
Slide 9: 2017 Outlook & 2016-2018 Strategic Plan
2017 Outlook & 2016-2018 Strategic Plan
Slide 10: 2017 Outlook / Plan – Driving Factors
2017 Outlook / “Plan” – Driving Factors • 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 cre
Slide 11: Core & Sustainable ROA
2017 Outlook Core & Sustainable ROA(1) 1.25% 1.20% 1.15% Core & Sustainable(1) ROA 1.10% 1.05% 1.24% 1.00% 1.13% 1.15% 0.95% 0.90% 0.95% 0.85% 0.91% 0.80% FY13 FY14 FY15 FY16 FY17 Core & Core & Core & Core & Plan Sustainable Sustainable Sustainable Sustainable GAAP ROA 1.07% 1.17% 1.05% 1.06% (1) Co
Slide 12: 2016 – 2018 Strategic Plan
2016 – 2018 Strategic Plan • 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 single
Slide 13: The WSFS Franchise
The WSFS Franchise Financial. Corporation
Slide 14: The WSFS Franchise
The WSFS Franchise • Largest independent bank and trust co. HQ in the Del. Valley • $6.8 billion in assets • $15.7 billion in fiduciary assets, including $2.0 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 • R
Slide 15: The WSFS Franchise - WSFS Bank (Delaware deposit market share)
The WSFS Franchise - WSFS Bank Deposits of Traditional Banks in the State of Delaware June 30, 2016 Total Total Rank Institution Branch Deposits in Market ‘15-’16 ‘15-’16 CAGR (Adjusted for M&A) Count Market Share Growth Growth ‘08-’16 1 M&T Bank 39 5,767,847 28.85% 266,786 4.85% 2.44% 2 PNC Bank 39
Slide 16: The WSFS Franchise – PA Expansion
The WSFS Franchise – PA Expansion 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 Man
Slide 17: PA Expansion: Deposits in Chester, Delaware and Montgomery Counties
The WSFS Franchise – PA Expansion Deposits of Traditional Banks in Chester, Delaware and Montgomery Counties in Pennsylvania June 30, 2016* Total Total Institution Branch Deposits in Market ‘15-’16 ‘15-’16 CAGR Rank (Adjusted for M&A) Count Market Share Growth Growth ‘08-’16 1 Wells Fargo Bank 81 $9
Slide 18: Diversified & Robust Fee Income
The WSFS Franchise – Diversified & Robust Fee Income WSFS Strategic Plan goal of fee (non-interest) income to total revenue of 40% by 4Q 2018 34% $100 Trust & Wealth 34% Cash Connect $90 Bank Segment 34% $27 $80 35% $23 $70 33% Total Core (1) Fee income $18 $16 32% $60 $14 $ in Millions $33 29% $13
Slide 19: The WSFS Franchise – WSFS Wealth
The WSFS Franchise – WSFS Wealth A Full-Service Wealth Management Offering Net Revenue of $39.2 million in 2016; Pre-tax profit of $10.6 million 19
Slide 20: The WSFS Franchise – 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 20,000 non-bank ATMs in all 50 States • Vault cash margin pressure offset by additional
Slide 21: Embracing Innovation as a Catalyst for Growth
Embracing Innovation as a Catalyst for Growth 21
Slide 22: Selected Financial Information
Selected Financial Information
Slide 23: Asset Composition – December 31, 2016
The WSFS Franchise - WSFS Bank Asset Composition – December 31, 2016 Assets $6.8 Billion; Net Loans $4.5 Billion Non- Earning Assets 7% 52% C&I BOLI 1% • Commercial loans comprise 83% of the loan portfolio Investments 15% • C&I (including owner- Net Loans Construction 66% occupied real estate), 5% C
Slide 24: Funding Composition – December 31, 2016
The WSFS Franchise - WSFS Bank Funding Composition – December 31, 2016 Total Funding – $6.8 Billion; Customer Deposits- $4.6 Billion Equity 10% Time Non- • Core customer funding 13% interest comprises 87% of total Customer DDA 28% Deposits customer funding Money Borrowings 69% Market • Non-interest
Slide 25: Well Positioned for Rising Rates
Well Positioned for Rising Rates As of 12/31/16 (WSJ Prime @ 3.75%) NII NII BPS Change(1) % Impact $ Impact +50 (0.3%) ($0.5mm) +100 0.3% +$0.7mm +150 1.0% +$2.1mm +200 1.6% +$3.4mm +300 3.0% +$6.1mm Balance Sheet Drivers • +50 Model results primarily reflects impact of WSFS prime (Currently 4.00%)
Slide 26: Overall Credit Trends Remain Strong
Overall Credit Trends Remain Strong Weighted Average Risk Rating (3) Criticized & Classified Loans / Tier-1 + ALLL 6.00 50% 5.80 High point during High point during the 45% 5.60 the cycle of 5.53 in cycle of: 40% Criticized: 105.6%- 1Q10 5.40 1Q12 35% Classified: 70.5%- 3Q09 5.20 4.97 27.71% 5.00 30
Slide 27: Robust Capital to Grow and to Return to Shareholders
Robust Capital to Grow and to Return to Shareholders Total Risk Based Capital (TRBC) 000’s $650,000 $600,000 $550,000 $500,000 $450,000 $400,000 $350,000 $300,000 $250,000 12/12 12/13 12/14 12/15 12/16 Total Risk-Based Capital Well Capitalized Requirement 12/12 12/13 12/14 12/15 12/16 TRBC 14.29% 14
Slide 28: 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 4Q 2016, WSFS repurchased
Slide 29: Business Model and Total Shareholder Returns
Business Model and Total Shareholder Returns • Regularly ranked in the top quartile of all businesses surveyed1 • Received the 2016 Gallup Great Focused Business Model Workplace Award • WSFS has been recognized by The • Voted “Top Bank” in Delaware Wilmington News Journal as a six years running (The
Slide 30: Appendices
Appendices Financial. Corporation
Slide 31: Appendix 1 – Management Team
Appendix 1 – Management Team • 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 Bancor
Slide 32: Appendix 1 – Management Team
Appendix 1 – Management Team • Thomas W. Kearney, 69, Executive Vice President and Chief Risk Officer has been with WSFS since 1998. Mr. Kearney holds a Bachelor’s degree in Business Administration (Finance and Accounting) from Drexel University. He also holds the professional designations of Certif
Slide 33: Appendix 2 – Business Model
Appendix 2 – Business Model 33
Slide 34: Appendix 3 – Non-GAAP Financial Information
Appendix 3 – Non-GAAP Financial Information Tangible common equity to assets and Tangible common book value per share December 31, 2016 September 30, 2016 December 31, 2015 Total Assets $6,765,270 $6,627,593 $5,584,637 Less: Goodwill and other intangible assets ($191,247) ($172,709) ($95,295) Total
Slide 35: Appendix 3 – Non-GAAP Financial Information
Appendix 3 – Non-GAAP Financial Information Core: GAAP Reconciliation 3 Months Ended 3 Months Ended December 31, 2016 December 31, 2015 Net Interest Income (GAAP) $52,954 $47,896 Adj: Core Net Interest Income $52,954 $47,896 Noninterest Inc (as reported) $27,587 $23,037 Adj: Securities Gains ($479)
Slide 36: Appendix 3 – Non-GAAP Financial Information
Appendix 3 -Non-GAAP Financial Information Core: GAAP Reconciliation FY16 FY15 FY14 FY13 FY12 FY11 Pre-Tax FY16 Pre-Tax FY15 Pre-Tax FY14 Pre-Tax FY13 Pre-Tax FY12 Pre-Tax FY11 Adjustments Adjustments Adjustments Adjustments Adjustments Adjustments Reported (GAAP) Net Income $64,079 $53,533 $53,757
Slide 37: Appendix 3 – Non-GAAP Financial Information
Appendix 3 – Non-GAAP Financial Information Core & Sustainable ROA: GAAP Reconciliation 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 38: 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 38