Wsfs Financial Corporation · NASDAQ:WSFS
Wsfs Financial — Q4 2019 Earnings Presentation
40 slides from Wsfs Financial's earnings presentation, Jan 31, 2020
Slide 1: Q4 2019 Investor Update
WSFS Financial EXHIBIT 99.1 Corporation Q4 2019 Investor Update January 31, 2020
Slide 2: Forward Looking Statements and Non-GAAP Financial Measures
Forward Looking Statements and Non-GAAP Financial Measures 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 inc
Slide 3: Table of Contents
Table of Contents 2019 Results Page 4 2020 Outlook Page 8 WSFS Franchise and Markets Page 14 Lines of Business Page 20 Selected Financial Information Page 26 Appendix: Non-GAAP Financial Information Page 37 3
Slide 4: 2019 Results
2019 Results WSFS Financial WSFS bank We Stand For Service®
Slide 5: 4Q and Full Year 2019 Results
4Q and Full Year 2019 Results 4Q 2019 Full year 2019 GAAP Core(1) GAAP Core(1) EPS $0.88 $0.96 $3.00 $3.74 ROA 1.48% 1.63% 1.30% 1.61% ROTCE(1) 14.76% 16.12% 13.48% 16.61% NIM 4.35% 4.35% 4.44% 4.44% Fee Income/Total Revenue(2) 26.2% 26.1% 29.7% 26.6% Efficiency Ratio 61.5% 58.0% 65.1% 56.2% • Full-
Slide 6: 2019 Core Results
2019 Core(1) Results Full-Year Core ROA of 1.61% vs 1.50% Original Outlook • Loan growth impacted by higher payoffs Full-Year primarily due to interest rate Original FY 2019 2019 environment $ in millions Core Outlook Core Actual • Deposit growth impacted by branch sale Loan Growth (2) -1%(3) to Ban
Slide 7: Loan and Deposit Growth & Net Interest Margin
Loan and Deposit Growth & Net Interest Margin $ in millions 4Q 2019 vs 3Q 2019 % Dec Sep $ % Annlzd Loans 2019 2019 Growth Growth Growth C & I Loans $3,341 $ 3,389 (48) -1% -6% Commercial Mortgages 2,212 2,263 (51) -2% -9% • Loan growth impacted by Construction Loans 579 512 67 13% 52% anticipated d
Slide 8: 2020 Outlook
2020 Outlook WSFS Financial WSFS bank We Stand For Service®
Slide 9: 2020 Core Outlook
2020 Core(1) Outlook FY 2020 Core Outlook Commentary Growth in C&I, CRE, leasing and consumer portfolios, partially offset Loan Growth Low-mid single digits by continued purposeful runoff of residential mortgage and non- Ex run-off portfolios (Mid-high single digits) relationship legacy Beneficial C
Slide 10: 2019-2021 Strategic Plan Update
2019-2021 Strategic Plan Update Favorable impact from revenue synergies and cost efficiencies partially offsetting impact from lower rate environment in 2020 and 2021 Fed Funds Rate (year-end) Core Return on Average Assets 4.00% 1.80% (2) 3.00% Impact of Interest 1.73% Rate Environment (1.00%) (1.50
Slide 11: Delivery Transformation
Delivery Transformation Strategy to meld physical and digital delivery, consistent with our brand, by enabling our Associates with the latest technology and actionable data to better serve our Customers. Initial investment will be accelerated to 3 years based on the continued rapid evolution of tech
Slide 12: Delivery Transformation
Delivery Transformation 2020 Program Focus and Outlook Full-Year Gross Investment of $15.2mm; $9.7mm Net Expense; $8.2mm Net of Revenue Lift Customer Acquisition Expected Benefits from 2020 Initiatives • Expand nCino capabilities • Initiate implementation of enterprise-wide CRM, piloting Wealth and
Slide 13: CECL Adoption
CECL Adoption CECL Transition DAY 1 ACL • Day 1 ACL reflects estimated expected lifetime credit losses for the Bank’s portfolios, based on our BY PORTFOLIO TYPE BY KEY INPUT • Modeling methodology • Historical loss experience • Organic/acquired portfolio mix Consumer Acquired 18% • Asset class mix (
Slide 14: WSFS Franchise and Markets
WSFS Franchise and Markets WSFS:.. WSES bank We Stand For Service®
Slide 15: The WSFS Franchise - Overview
The WSFS Franchise - Overview • Largest independent bank and trust co. HQ in Delaware and greater Philadelphia region(1) • $12.3 billion in assets • $20.1 billion in fiduciary assets, including $2.7 billion in assets under management • 126 offices • Founded in 1832, WSFS is one of the ten oldest ban
Slide 16: The WSFS Franchise - Strategic Growth Opportunity
The WSFS Franchise - Strategic Growth Opportunity At $12.3 billion in assets at 12/31/19, WSFS fills a long-standing service gap in our market between larger regional/national banks and smaller community banks MSA: Philadelphia-Camden-Wilmington (PA/NJ/DE/MD) Total • 3rd largest metro in the Northea
Slide 17: The WSFS Franchise - Our Markets
The WSFS Franchise - Our Markets Philadelphia-Camden-Wilmington MSA Regional Employment Composition(1) Regional Statistics Diversity of industries drives stable and favorable employment and economic • Population: ~6.1 million growth in our markets • Number of Households: ~2.3 million Mining, logging
Slide 18: The WSFS Franchise: Delivering Growth and High Performance
The WSFS Franchise: Delivering Growth and High Performance 18
Slide 19: Business Model and Total Shareholder Returns
Business Model and Total Shareholder Returns Total Shareholder Returns2 NASDAQ KBW WSFS Bank Index Bank Index 1 year 17.3% 24.4% 36.1% 3 year -2.6% 10.0% 32.8% 5 year 79% 65% 72% 10 year 446% 198% 226% (1) Completed by the Gallup Organization, as of December 31, 2019. (2) Per Bloomberg; closing pric
Slide 20: Lines of Business
Lines of Business WSFS:.. WSES bank We Stand For Service®
Slide 21: Commercial Banking
Commercial Banking Local, relationship-focused lending including cash management, wealth management, and private banking services Business Banking Middle Market Comm. Real Estate Small Business SBA Lending Revenues: Revenues: Revenues: Revenues: Profit: $3 million - $20 million+ $20 million-$150 mil
Slide 22: Retail Banking
Retail Banking Relationship-focused community banking model with 93 banking offices & nearly 500 ATMS(2) Recently optimized retail footprint through 25% reduction of branch locations Branch & ATM Network Online & Mobile Banking Borrowing Mortgage Offering a full range of Providing Customers with a M
Slide 23: NewLane Finance
NewLane Finance Micro & Small Ticket Commercial Equipment Financing Background: • Co-founded in 2017 by industry veterans who built Marlin Business Services from a start-up to a publicly- traded company (Nasdaq: MRLN) • WSFS owns ~83% of the Company Market Size: • Micro & Small Ticket Equipment Leas
Slide 24: WSFS Wealth
WSFS Wealth Full-Service, Relationship-based Wealth Management Financial Highlights 4Q 2019 Net Revenue: $15.3 million 4Q 2019 Pre-tax Income: $5.2 million $20.1 billion in fiduciary assets, including $2.7 billion in assets under management at 12/31/2019 Private Banking Services for Commercial Custo
Slide 25: Cash Connect
Cash Connect® Leading National Provider of Cash Logistics $11.3 million in net revenue (fee income less funding costs) and $1.1 million in pre-tax income in 4Q 2019 ATM Vault Cash • 5 year CAGR(2) for net revenue is 13% “Bailment” Manages 473(1) branded ATMs for WSFS Bank; one of WSFS the largest ne
Slide 26: Selected Financial Information
Selected Financial Information
Slide 27: Net Interest Margin – 2019 and FY 2020 Outlook
Net Interest Margin – 2019 and FY 2020 Outlook 5.00% 4.05 - 4.10 - 4.30% 4.68% 4.38% 4.35% 4.44% 4.10% 4.15% 4.75% • FY 2019 net interest margin includes 4Q 19 NIM (ex BNCL 0.22% 4.50% accretion) of 3.88%, 34 bps of 0.13% modeled BNCL accretion and 13 0.12% 0.13% 4.25% 0.37% (0.05 to 0.10%) bps of i
Slide 28: Total Core Fee Income
Diversified & Robust Fee Income $180 Trust & Wealth Cash Connect 27% (2) $160 Bank Segment • Fee income is well diversified (2) with over 20 discrete lines of 35% $140 $44 business and products within (2) our three segments 35% Total Core (1) Fee income $120 $41 (2) • Strong historical growth in 34%
Slide 29: Balance Sheet Composition
Balance Sheet Composition at December 31, 2019 Asset Composition Funding Composition Assets: $12.3 Billion; Total Funding: $12.3 Billion; Net Loans: $8.5 Billion Customer Deposits: $9.3 Billion • Commercial loans • Core deposits Other comprise 74% of the represent 85% of Borrowings 6% loan portfolio
Slide 30: Commercial Loan Portfolio Composition
Commercial Loan Portfolio Composition Outstanding Balances as 12/31/2019 No industry or CRE concentrations in the loan portfolio C&I and Owner Occupied CRE CRE Investor & Construction Real Estate Rental Mixed Use, Flex, Warehouse, Self- Special Use & Storage, General and Leasing, 10% 2% Other, 9% In
Slide 31: Interest Rate Risk
Interest Rate Risk(1) As of 12/31/19 (WSJ Prime @ 4.75%) 12 month Gradual(1) Instantaneous(2) BPs Change NII Impact - % NII Impact - $ NII Impact - % NII Impact - $ -100 (0.3%) ($1.2 million) (2.4%) ($10.5 million) -50 (0.1%) ($0.6 million) (0.9%) ($4.2 million) -25 (0.1%) ($0.3 million) (0.5%) ($2.
Slide 32: Credit Metrics
Credit Metrics Overall Credit Trends Remain Stable and Strong Criticized & Classified Loans / Tier-1 + ALLL Delinquencies (1) / Gross Loans 30% 2.00% 28% 1.80% 26% 1.60% 24% 1.40% 22% 1.20% 20% 16.89% 1.00% 18% 0.72% 0.80% 16% 0.60% 14% 12% 0.40% 13.15% 0.20% 10% 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4
Slide 33: Capital Management
Capital Management Disciplined capital management providing flexibility to grow & return profits to shareholders Tier 1 Capital ($000s) (1) Common Equity Tier 1 Capital ($000s) (1) 1,440,000 1,440,000 14.50% 1,340,000 1,340,000 14.00% 13.09% 13.24% 13.29% 13.50% 12.45% 12.59% 12.65% 1,240,000 12.66%
Slide 34: Share Buybacks and Dividends
Share Buybacks and Dividends $120,000 $0.50 $0.47 $0.45 $0.42 $100,000 $0.40 Annual Dividends Paid per Share $0.35 Capital Returned ($ in 000s) $80,000 $0.30 $0.30 $0.25 $60,000 $0.25 $0.21 $0.20 $40,000 $0.15 $0.10 $20,000 $0.05 $- $- 2015 2016 2017 2018 2019 Dividends Routine buybacks Incremental
Slide 35: Strong Alignment / Capital Management
Strong Alignment / Capital Management • Executive management bonuses and equity awards based on bottom-line performance ROA, ROTCE and EPS growth – equally weighted • Insider ownership(1) is approximately 2% Board of Directors and Executive Management ownership guidelines in place and followed • WSF
Slide 36: WSFS Mission, Vision, Strategy and Values
WSFS Mission, Vision, Strategy and Values 36
Slide 37: Appendix: Non-GAAP Financial Information
Appendix: Non-GAAP Financial Information
Slide 38: Appendix: Non-GAAP Financial Information
Appendix: Non-GAAP Financial Information Three Months Ended Twelve Months Ended December 31, September 30, December 31, December 31, December 31, (dollars in thousands, except per share data) 2019 2019 2018 2019 2018 Net interest income (GAAP) $ 117,569 $ 120,833 $ 64,674 $ 444,948 $ 246,474 Core ne
Slide 39: Appendix: Non-GAAP Financial Information
Appendix: Non-GAAP Financial Information End of Period December 31, December 31, December 31, December 31, December 31, (dollars in thousands, except per share data) 2019 2018 2017 2016 2015 Total assets $ 12,256,302 $ 7,248,870 $ 6,999,540 $ 6,765,270 $ 5,584,719 Less: Goodwill and other intangible
Slide 40: Stockholders or others seeking information may call or write
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 302-504-9857 stockholderrelations@wsfsbank.com www.wsfsbank.com Rodger Levenson Dominic C. Canuso Chairman, Pres