Wsfs Financial Corporation · NASDAQ:WSFS
Wsfs Financial — Q3 2017 Earnings Presentation
43 slides from Wsfs Financial's earnings presentation, Nov 2, 2017
Slide 1: WSFS Financial Corporation 3Q 2017 Investor Update
WSFS Financial Corporation 3Q 2017 Investor Update November 2, 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 Ch
Slide 3: Table of Contents
Table of Contents Forward-Looking Statements / Non-GAAP Information / Reported Financial Results Page 4 3Q 2017 Highlights Page 6 2017 Outlook & 2016 – 2018 Strategic Plan Page 10 The WSFS Franchise Page 14 Selected Financial Information Page 25 Appendix 1 – Management Team Page 36 Appendix 2 – Busi
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: 3Q 2017 Highlights
3Q 2017 Highlights Financial. Corporation
Slide 7: Reported Financial Results
Reported Financial Results 3Q 2017 Reported Results: • EPS $0.64 • NIM 3.95% • ROA 1.20% • Fee Income / Total Revenue 36.3% • ROTCE 15.22% • Efficiency Ratio 60.6% • Reported net income was $20.6 million, or $0.64 per diluted common share for 3Q 2017 compared to net income of $12.7 million, or $0.41
Slide 8: 3Q 2017 Highlights
3Q 2017 Highlights 3Q 2017 Core (1) Results: • EPS $0.64 • NIM 3.95% • ROA 1.21% • Fee Income / Total Revenue 35.8% • ROTCE 15.27% • Efficiency Ratio 60.2% Strong Revenue Growth ($ in millions) 3Q 2017 3Q 2016 Change Core(1) Net Revenue $87.8 $75.6 +16% • Reflects strong organic and acquisition grow
Slide 9: 3Q 2017 Highlights
3Q 2017 Highlights Customer Funding Reflects Strength of Core Deposit Relationships • Total customer funding increased $226.0 million, or 5% (not annualized) from 2Q 2017. The includes a $216.1 million normal increase in seasonal public funding account balances and a $15.3 million increase in other
Slide 10: 2017 Outlook & 2016-2018 Strategic Plan
2017 Outlook & 2016-2018 Strategic Plan
Slide 11: 2017 Plan Progress to Date
2017 Plan Progress to Date Year to Date(1) • Mid-to-high single digit loan and core deposit growth 6%(2) / 10%(2) • Net interest margin in the mid 3.90%s 3.93% (3.95% in 3Q) • Assumed one rate hike in 2017 • Included payoff of $55 million in 6.25% senior notes which occurred on 9/1/17 (enhances 4Q
Slide 12: Core & Sustainable ROA Trend Line
Core & Sustainable1 ROA Trend Line 1.35 4Q18 Target 1.30 1.30% ROA 1.25 1.22% 1.20 Core & Sustainable ROA 1.15 1.10 1.05 1.00 0.95 0.90 0.85 (1) Core and Sustainable ROA is a non-GAAP financial measure that divides (i) net income determined in accordance with GAAP and adjusting it by taking core net
Slide 13: 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 14: The WSFS Franchise
The WSFS Franchise Financial. Corporation
Slide 15: The WSFS Franchise
The WSFS Franchise • Largest independent bank and trust co. HQ in the Del. Valley • $6.9 billion in assets • $18.1 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 • R
Slide 16: Deposits of Traditional Banks in Delaware
The WSFS Franchise Deposits of Traditional Banks in the State of Delaware June 30, 2017* Total Total Rank Institution Branch Deposits in Market ‘16-’17 ‘16-’17 CAGR Count Market Share Growth Growth ‘08-’17 1 M&T Bank Corp (NY)1 39 6,063,740 29.28% 295,893 5.13% 3.08% 2 PNC Financial Service Group (P
Slide 17: The WSFS Franchise – PA Expansion
The WSFS Franchise – PA Expansion Strong position as one of the few remaining super-community banks in the attractive and rapidly consolidating southeastern PA markets Over the past 5 years, WSFS has successfully expanded its franchise into Pennsylvania through: • De novo branches; hiring local lend
Slide 18: PA Expansion – Deposit Market Share
The WSFS Franchise – PA Expansion Deposits of Traditional Banks in Chester, Delaware and Montgomery Counties in Pennsylvania June 30, 2017* Total Total Branch Deposits in Market ‘16-’17 ‘16-’17 CAGR Rank Institution Count Market Share Growth Growth ‘08-’17 1 Wells Fargo Bank 80 $10,975,086 19.29% $9
Slide 19: The WSFS Franchise - Attractive Markets
The WSFS Franchise - Attractive Markets Population Number of Businesses 900,000 Delaware Southeastern PA Delaware Southeastern PA 90,000 800,000 80,000 700,000 70,000 600,000 60,000 500,000 50,000 400,000 40,000 300,000 30,000 200,000 20,000 100,000 10,000 - - Sussex Kent New Castle Delaware Chester
Slide 20: Regional Employment Composition
Regional Employment Composition Philadelphia-Camden-Wilmington MSA Diversity of industries drives stable & favorable employment in our markets Unemployment of 4.7%(1) Mining, logging, Government and construction 11% 4% Manufacturing 6% Other services 4% Trade, Transportation Leisure and hospitality
Slide 21: 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 35% YTD $90 Bank Segment 34% 2017 $27 $80 35% $23 $70 33% Total Core Fee income(1) $18 $16 5 Year CAGR 32% $60 $14 Tr
Slide 22: The WSFS Franchise – WSFS Wealth
The WSFS Franchise – WSFS Wealth A Full-Service Wealth Management Offering Net Revenue of $12.6 million in 3Q 2017; Pre-tax profit of $4.1 million 22
Slide 23: 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 $890 million in vault cash managed • Over 22,000 non-bank ATMs in all 50 States • Vault cash margin pressure offset by addition
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 Asset Composition
The WSFS Franchise - WSFS Bank Asset Composition – September 30, 2017 Assets $6.9 Billion; Net Loans $4.7 Billion Non- Earning Assets 7% 53% C&I BOLI 1% • Commercial loans comprise 84% of the loan portfolio Net Loans • C&I (including owner- Investments 68% Construction 15% 6% occupied real estate),
Slide 27: WSFS Bank Funding Composition
The WSFS Franchise - WSFS Bank Funding Composition – September 30, 2017 Total Funding – $6.9 Billion; Customer Deposits- $4.9 Billion • Core deposits represent Time 89% of total customer Equity Non- 10.8% Customer 11.4% deposits and non-interest interest Deposits DDA and very low interest 70.9% Mone
Slide 28: Balanced Growth
The WSFS Franchise - Balanced Growth Balance sheet composition has remained steady as WSFS has grown Loan Composition Funding Composition 5,000,000 8,000,000 4,500,000 6% 7,000,000 11% 8% 4,000,000 6% 6,000,000 3,500,000 28% 24% 5,000,000 3,000,000 4% 10% 10% 2,500,000 9% 4,000,000 15% 28% 2,000,000
Slide 29: Well Positioned for Rising Rates
Well Positioned for Rising Rates As of 9/30/17 (WSJ Prime @ 4.25%) NII NII BPS Change(1) % Impact $ Impact +25 0.5% +1.2mm +50 1.0% +2.3mm +100 2.1% +4.7mm +200 4.2% +9.4mm Balance Sheet Drivers • High % of variable/adjustable rate total loan portfolio: 66% • High % core deposits: 89%; High % non-in
Slide 30: 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 cycle 45% 5.60 the cycle of 5.53 in of: 40% Criticized: 105.6% in 1Q10 5.40 1Q12 35% Classified: 70.5% in 3Q09 5.20 4.97 30% 5.00 2
Slide 31: Loan Portfolio Composition
Loan Portfolio Composition Outstanding Balances as of 9/30/17 No industry or CRE concentrations in the loan portfolio C&I & Owner Occupied CRE CRE Investor & Construction Special Use & Other Other Services (except Flex, Warehouse, Self- Residential Multi- 3% Mixed Use Public Administration) Storage,
Slide 32: 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 $700,000 $650,000 $600,000 $550,000 $500,000 $450,000 $400,000 $350,000 $300,000 12/12 12/13 12/14 12/15 12/16 9/17 Total Risk-Based Capital Well Capitalized Requirement 12/12 12/13 12/14 12/15 12/16 9/17 TRBC
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 3Q 2017, WSFS repurchased
Slide 34: Business Model and Total Shareholder Returns
Business Model and Total Shareholder Returns WSFSEzsi.. FOCUSED BUSINESS MODEL-VIRTUOUS CYCLE DELIVERING GROWING AND VALUE ELV SCSI) A SKONEL UNE STELLAR EXPERIENCES TOMER ADVOCATES FOR OUR OWNERS Regularly ranked in the top Voted #1 “Top Bank” Customer advocacy Named a 2016 Bank & Thrift quartile o
Slide 35: Appendices
Appendices Financial. Corporation
Slide 36: Appendix 1 – Management Team
Appendix 1 – Management Team Mark A. Turner, 54, 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 expe
Slide 37: Appendix 1 – Management Team
Appendix 1 – Management Team Paul S. Greenplate, 59, 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 overse
Slide 38: Appendix 2 – Business Model
Appendix 2 – Business Model 38
Slide 39: Appendix 3 – Non-GAAP Financial Information
Appendix 3 – Non-GAAP Financial Information Tangible common equity to assets and Tangible common book value per share 3 Months Ended 3 Months Ended 3 Months Ended September 30, 2017 June 30, 2017 September 30, 2016 Total Assets $6,875,344 $6,822,427 $6,627,593 Less: Goodwill and other intangible ass
Slide 40: Appendix 3 – Non-GAAP Financial Information
Appendix 3 – Non-GAAP Financial Information Core: GAAP Reconciliation 3 Months Ended 3 Months Ended 9 Months Ended September 30, 2017 September 30, 2016 September 30, 2017 Net Interest Income (GAAP) $56,129 $49,021 $163,546 Adj: Core Net Interest Income $56,129 $49,021 $163,546 Noninterest Inc (as r
Slide 41: 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 42: 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 43: 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 43