Wsfs Financial Corporation · NASDAQ:WSFS
Wsfs Financial — Investor Presentation (July 2014)
29 slides from Wsfs Financial's investor presentation, Jul 6, 2014
Slide 1: WSFS Financial Corporation
WSFS Financial Corporation 1
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 302-571-7264 bsellers@wsfsbank.com www.wsfsbank.com Mark A. Turner Stephen A. Fowle Rodger Levenson President an
Slide 3: 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 finan
Slide 4: Quarter Highlights
Quarter Highlights Review of 2Q 2014 Results • 2Q 2014 results reflect continued revenue growth and notable improvement in credit quality • $1.39 per share; 20% increase over 2Q 2013 • Core EPS of $1.37 per share, up 26% from $1.09 per share in 2Q 2013 • ROA increased to 1.12%; ROTCE increased to 13
Slide 5: Quarter Highlights
Quarter Highlights • Credit quality metrics show notable improvement • NPAs decreased $5.1 million to $50.3 million, or 1.09% of total assets, at June 30, 2014 • Delinquency improved 16% to 0.76% of total loans (includes nonperforming loans) • Recoveries exceeded charge offs by $2,000 with gross cha
Slide 6: Pending combination with FNB of Wyoming (DE)
Pending combination with FNB of Wyoming (DE) Strategic Rationale: Consistent with WSFS’s strategic growth plan Size: Assets of $307.7MM; Loans $186.1MM; Deposits of $249.7 MM; 6 Branches Enhances franchise in Kent County – from #6 to #2 (pro forma) in market share Diversifies revenue stream and impr
Slide 7: The WSFS Franchise
The WSFS Franchise • Largest independent bank headquartered in Delaware Pennsylvania • $4.6 billion in assets • $10.6 billion in fiduciary assets, includes $1.2 billion in assets under management • 52 offices • Founded in 1832, WSFS is one of the ten Maryland oldest banks in the U.S. • Major busines
Slide 8: WSFS Bank: Delaware deposit market share
WSFS Bank Market opportunities from significant disruption/distraction among major competitors Deposits of Traditional Banks in Delaware June 30, 2013* Rank Institution Branch Total Deposits Total Market CAGR Count in Market Share ‘08-’13 1 M&T Bancorp (NY) 43 5,486,476 30.28% 2.89% 2 PNC Financial
Slide 9: WSFS Bank – Balance Sheet: Asset Composition
WSFS Bank – Balance Sheet Asset Composition – June 30, 2014 Assets - $4.6 billion; Net Loans $3.0 Billion Comments Non-Earning Commercial Bank Assets 2Q 2014: Assets 6% • Commercial loans comprise 83% BOLI 1% of the loan portfolio • C&I (including owner-occupied real C&I estate), the largest compone
Slide 10: WSFS Bank – Balance Sheet: Funding Composition
WSFS Bank – Balance Sheet Funding Composition – June 30, 2014 Customer Funding - $3.0 billion Comments Heavy Bias Towards Core: • Core customer funding comprises Total Equity 84% of total customer funding 9% • Non-interest and very low interest Interest DDA (WAC 9bps) stands at 46% of DDA Money tota
Slide 11: Wealth Management
Wealth Management CYPRESS WSFS Investment Group CAPITAL MANAGEMENT, LLC • Offers insurance and brokerage products • Focus on retail banking clients • Registered investment advisor offering a • $364,000 revenue in 2Q 2014 “balanced’ investment style focused on preservation of capital and current inco
Slide 12: Cash Connect
Cash Connect ® • Leading provider of ATM vault cash, armored carrier management, cash forecasting services, insurance and equipment • Services non-bank ATM owners • More than $510 million in vault cash • Nearly 15,000 non-bank ATMs nationwide • Operates more than 460 ATMs for WSFS Bank; largest in-m
Slide 13: Fee Income Businesses
Fee Income Businesses Significant Growth in Fee Businesses $80 $70 $60 $50 35% of Total Revenues* $40 $30 $20 $10 $0 2010 2011 2012 2013 YTD YTD 2013** 2014** WSFS Bank* Cash Connect Wealth * Excludes security gains, reverse mortgage consolidation gains and BOLI gain ** 1st quarter fee income is typ
Slide 14: The WSFS Franchise: Organizational Focus
The WSFS Franchise Organizational Focus • Focus on increasing operating leverage and earnings by harvesting investments made during prior several years • Continued credit quality improvement • Managing capital prudently and thoughtfully • Continuing strong alignment of management and owners
Slide 15: Increasing Earnings
Increasing Earnings ROA Progression(1) Comments 1.60% 1.40% Building Bottom Line Performance: 1.20% 1.00% • ROA trend has consistently 0.80% improved from a break-even year 0.60% in 2009 0.40% • 2Q 2014 Core ROA of 1.11% , ahead 0.20% of 0.95% in 2Q 2013 0.00% • Goal of 1.20% -1.30% by end of 2015 2
Slide 16: Increasing Earnings
Increasing Earnings … reflects improved credit quality Comments $50 $40 Provision and Credit Costs • Decreased significantly, reflecting long term trend $30 in asset quality improvement and net recoveries $20 in 2Q 2014. $10 • Total Problem assets reduced significantly to 35.59% of Tier I Capital pl
Slide 17: Increasing Earnings
Increasing Earnings improved net interest income, Comments $140 Net Interest Margin / Net Interest Income $120 • Net interest income increased $3.4 million or $100 11% over 2Q 2013 $80 • Net Interest Margin of 3.64% improved 14 basis $60 points over 2Q 2013 and 7 basis points over 1Q $40 2014 $20 •
Slide 18: Credit Quality Continues to Improve
Credit Quality Continues to Improve Asset Quality Metrics Problem Loan Key Ratios Comments Improving credit quality trends: 50.00% • NPAs were only 1.09% of total assets at June 30, 2014 41.4% 40.00% 40.5% • Classified loans decreased to 30.6% of Tier 1 Capital + ALLL 35.2% 35.6% 34.2% • From a cycl
Slide 19: Managing Capital
Managing Capital Bank-Level Capital Ratios (thousands) $600,000 Total Risk-Based Capital $550,000 Well Capitalized Requirement $536,655 $505,354 $500,000 $466,925 $450,000 $434,301 $409,034 $400,000 $350,000 $300,000 $250,000 12/10 12/11 12/12 12/13 6/14 Total Risk-Based Capital 13.62% 13.43% 14.29%
Slide 20: Strong Alignment
Strong Alignment • Insider ownership is nearly 8%* • Board of Directors and Executive Management ownership guidelines in place • Executive management bonuses and equity awards based on bottom-line performance • ROA, ROTCE and EPS growth * As defined in our most recent proxy, adjusted for options app
Slide 21: Path to High Performing – 2015 Goal
Path to High Performing – 2015 Goal Credit Costs Security Gains 1Q 2013 Baseline (1Q 2013 Normalized) 0.70% ROA 11 10 0.91% (as Reported) Net interest income 15 6 Fee income growth 20 Efficiency ratio 12 8 1 Credit costs 5 3 Tax rate 2 Goal (1Q 2013 Normalized + Planned Impacts) 1.20% 1.30% (with Po
Slide 22: Business Model and Total Shareholder Returns
Business Model and Total Shareholder Returns Focused Business Model • Consistently ranked in the top quintile of all • Gallup survey showed businesses surveyed * WSFS best among top players in market at • WSFS has been recog- delivering service * nized by The Wilmington News Journal as a “Top Workpl
Slide 23: Appendices
Financial Corporation Appendices
Slide 24: Appendix – Table of Contents
Appendix – Table of Contents Section Pg # • Appendix 1 – Management Team 25-26 • Appendix 2 – Business Model 27 • Appendix 3 – Non-GAAP Financial Information 28-29 24
Slide 25: Appendix – Management Team
Appendix 1 – Management Team • Mark A. Turner, 51, 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 26: Appendix – Management Team
Appendix 1 – Management Team • Thomas W. Kearney, 66, 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 27: Appendix – Business Model
Appendix 2 – Business Model 27
Slide 28: Appendix – Non-GAAP Financial Information
Appendix 3 – Non-GAAP Financial Information Pro forma EPS Rev Mtg Securities Non-Routine Debt Consolidation Corporate (Gains) BOLI Extinguishment Gain / Tax Development Proforma EPS Losses Income Bulk Sale Loss Benefit Costs EPS 2nd Quarter 2011 0.55 (0.04) $ (0.13) 0.38 3rd Quarter 2011 0.70 (0.14)
Slide 29: Appendix – Non-GAAP Financial Information
Appendix 3 – Non-GAAP Financial Information Tangible common book value and equity to assets End of period June 30, March 31, June 30, 2014 2014 2013 Total assets $ 4,613,090 $ 4,545,962 $ 4,408,723 Less: Goodwill and other intangible assets (38,295) (38,610) (33,116) Total tangible assets $ 4,574,79