Wsfs Financial Corporation · NASDAQ:WSFS
Wsfs Financial — Merger or Acquisition (March 2015)
41 slides from Wsfs Financial's merger presentation, Mar 12, 2015
Slide 1: WSFS Financial Corporation
Exhibit 99.2 WSFS Financial Corporation
Slide 2: Stockholders or others seeking information
Stockholders orothersseeking information regarding theCompany maycallorwrite: 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 and CEO
Slide 3: Forward-Looking Statements
Forward-Looking Statements Thispresentation containsestimates,predictions, opinions,projectionsandother“forward-looking statements” as thatphraseis definedin thePrivate Securities Litigation Reform Act of 1995. Such statements include, without limitation, references to the Company’s financial goals,
Slide 4: Quarter Highlights
Quarter Highlights Review of 4Q 2014 Results • 4Q 2014 results reflect continued core revenue growth • Core revenues increased $4.5 million or 8% over 4Q 2013 • Net interest income improved $3.7 million or 11% over 4Q 2013 • Core noninterest income increased $793,000 or 4% over 4Q 2013; stands at a
Slide 5: Quarter Highlights
Quarter Highlights • Capitallevelsremainstrong,boosted byearnings andinvestment appreciation • Tangible common book value per share improved 3% to $45.89 and tangible common equity increased 15 basis points to 9.00% • Tier 1 leverage ratio was 10.25%, Tier 1 risk-based capital ratio was 12.79% and t
Slide 6: Pending combination with Alliance Bancorp, Inc.
Pending combination with Alliance Bancorp, Inc. Strategic Rationale: Consistent with WSFS’s strategic growth plan Size: Assets of $421MM; Loans $310MM; Deposits of $345MM; 8 Branches EnhancesfranchiseinDelawareCountyandChesterCounty– from#22to#9(proforma)in Delaware County, PA Provides appealing cro
Slide 7: Recently completed combination with FNB of Wyoming (DE)
Recently completed combination with FNB of Wyoming (DE) Strategic Rationale: Consistent with WSFS’s strategic growth plan Size: Assets of $285MM; Loans $176MM; Deposits of $229MM; 6 Branches EnhancesfranchiseinKentCounty– from#6to#2(proforma)inmarketshare Diversifies revenue stream and improves core
Slide 8: The WSFS Franchise
The WSFS Franchise • Largest independent bank and trust co. in the Delaware Valley • $4.9 billion in assets • $9.9 billion in fiduciary assets, includes $1.2 billion in assets under management • 55 offices • Founded in 1832, WSFS is one of the ten oldest banks in the U.S. • Major business lines • Re
Slide 9: WSFS Bank: Deposits of Traditional Banks in Delaware
WSFS Bank Deposits of Traditional Banks in Delaware June 30, 2014* Rank Institution Branch Total Deposits Total Market CAGR Count in Market Share ‘08-’14 1 M&T Bancorp (NY) 41 5,672,018 29.41% 3.58% 2 PNC Financial Services Group (PA) 41 3,932,958 20.40% 10.11% 3 WSFS (DE)¹ 37 3,090,816 16.03% 11.52
Slide 10: WSFS Bank Balance Sheet: Asset Composition
WSFS BankBalance – Sheet Asset Composition-December 31, 2014 Assets $4.9 Billion; Net Loans $3.2 Billion Comments Commercial Bank Assets Non- Earning 4Q 2014: Assets 6% • Commercial loans comprise 83% BOLI 2% C&I of the loan portfolio 54% • C&I (including owner-occupied real estate), the largest com
Slide 11: WSFS Bank Balance Sheet: Funding Composition
WSFS BankBalance – Sheet Funding Composition-December 31, 2014 Customer Funding $3.5 - billion Comments Heavy Bias Towards Core: • Core customer funding comprises 85% of total customer funding • Non-interest and very low interest DDA (WAC 9bps) stands at 43% of total customer funding Equity 10% Swee
Slide 12: Wealth Management
Wealth Management CYPRESS WSFS Wealth Investments CAPITAL MANAGEMENT, LLC • Offers insurance and brokerage products • Focus on retail banking clients • Registered investment advisor offering a • $469,000 revenue in 4Q 2014 “balanced’ investment style focused on preservation of capital and current in
Slide 13: Cash Connect
Cash Connect ® • Leading provider of ATM vault cash, armored carrier management, cash forecasting services, insurance and equipment services • Adding ATM settlement services to existing managed service offering • Expanding ATM managed services from ISO market to FI market sector • Services non-bank
Slide 14: Fee Income Businesses
Fee Income Businesses Significant Growth in Fee Businesses 35% of Total Revenues* $80 $70 $60 $50 $40 $30 $20 $10 $0 2010 2011 2012 2013 2014 WSFS Bank* Cash Connect Wealth * Excludes security gains, reverse mortgage consolidation gains and BOLI gain 14
Slide 15: The WSFS Franchise: Organizational Focus
The WSFS Franchise Organizational Focus • Focus on increasing operating leverage and earnings • Continued credit quality improvement • Managing capital prudently and thoughtfully • Continuing strong alignment of management and owners • Goal– becomesolidlyhighperforming (topquintileofpeersinROA,ROTCE
Slide 16: Increasing Earnings
Increasing Earnings (1) ROA Progression Comments 1.40% 1.20% Building Bottom Line Performance: 1.00% • ROA trend has consistently improved 0.80% from a break-even year in 2009 0.60% • 4Q 2014 Core ROA of 1.15% ahead of 0.40% 1.08% in 4Q 2013 0.20% 0.00% • Goal of 1.20% -1.30% by end of 4Q 2010 2011
Slide 17: Increasing Earnings
Increasing Earnings Reflects Improved Credit Quality Comments $50 Provision and Credit Costs $40 • Decreased significantly, reflecting long term $30 trend in asset quality improvement and lower charge offs in 4Q 2014. $20 • Total Problem loans reduced significantly to $10 25.97% of Tier I Capital pl
Slide 18: Increasing Earnings
Increasing Earnings Improved Net Interest Income Comments $150 $140 Net Interest Margin / Net Interest Income $130 Net interest income increased $3.7 $120 million or 11% over 4Q 2013 $110 Net Interest Margin of 3.78% improved 10 basis points over 4Q 2013 $100 2010 2011 2012 2013 2014 (1) Improving E
Slide 19: What happens when Rates go up?
What happens when Rates go up? NII NII BPS Change* % Impact $ Impact +100 (1)% $ (1.6) mm +200 2% $ +2.2 mm +300 4% $ +6.2 mm +400 7% $ +9.9 mm Balance Sheet Drivers • +100 Model results reflects impact of loan floors and WSFS prime • High % of variable/adjustable rate total loan portfolio: 66% • Hi
Slide 20: Credit Quality Continues to Improve
Credit Quality Continues to Improve Asset Quality Metrics Problem Loan Key Ratios Comments Improving credit quality trends: 90.0% 84.8% • NPAs were 1.08% of total assets at December 31, 2014 80.0% • Classified loans decreased to 21.3% 70.0% 63.9% of Tier 1 Capital + ALLL 60.0% • From a cycle–high of
Slide 21: Managing Capital
Managing Capital Bank-Level Capital Ratios (thousands) $600,000 $531,208 $550,000 $505,354 $500,000 $466,925 $434,301 $450,000 $409,034 $400,000 $350,000 $300,000 $250,000 12/10 12/11 12/12 12/13 12/14 Total Risk-Based Capital Well Capitalized Requirement Total Risk-Based Capital 13.62% 13.43% 14.29
Slide 22: Strong Alignment
Strong Alignment • Insiderownership isnearly8%* • Board of Directors and Executive Management ownershipinguidelines place • Executive management bonuses andequityawardsbasedonbottom-line performance • ROA, ROTCE and EPS growth • 5% stock buyback authorization in place; repurchased 1% or 116,421 comm
Slide 23: Path to High Performing – 2015 Goal
Path to High Performing 2015 – Goal Credit Costs Security Gains 1Q 2013 Baseline 11 (1Q 2013 Normalized) 0.70% ROA 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 24: 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 Workpla
Slide 25: Appendices
Financial Corporation Appendices
Slide 26: Appendix Table of Contents
Appendix Table – of Contents Section Page # • Appendix 1 – Management Team 27-28 • Appendix 2 – Business Model 29 • Appendix 3 – Non-GAAP Financial Information 30-31 • Appendix 4 – Alliance Bancorp, Inc.presentation 32-41 26
Slide 27: Appendix 1 – Management Team
Appendix 1 – Management Team • MarkA.Turner,52,hasservedasPresidentandChiefExecutiveOfficersince2007.Mr.Turnerwaspreviously Chief Operating Officer and the Chief Financial Officer for WSFS. Prior to joining WSFS, his experience includes working at CoreStates Bank and Meridian Bancorp. Mr. Turner sta
Slide 28: Appendix 1 – Management Team
Appendix 1 – Management Team • ThomasW.Kearney,67,ExecutiveVicePresident andChiefRiskOfficerhasbeenwithWSFSsince1998. Mr. Kearney holds a Bachelor’s degree in Business Administration (Finance and Accounting) from Drexel University. He also holds the professional designations of Certified Bank Audito
Slide 29: Appendix 2 – Business Model
Appendix 2 – Business Model 29
Slide 30: Appendix 3 – Non-GAAP Financial Information
Appendix 3 – Non-GAAP Financial Information Rev Mtg Securities Non-Routine Debt Consolidation Corporate Fraud/ (Gains) BOLI Bulk Extinguishment Gain / Tax Development Litigation PRBO Proforma EPS Losses Income Sale Loss Benefit Costs Costs Adj. EPS 4th Quarter 2011 0.63 (0.14) 0.49 1st Quarter 2012
Slide 31: Appendix 3 – Non-GAAP Financial Information
Appendix 3 – Non-GAAP Financial Information Tangible common book value and equity to assets End of Period December 31, September 30, December 31, 2014 2014 2013 Total assets $ 4,853,320 $ 4,782,728 $ 4,442,656 Less: Goodwill and other intangible assets (57,593) (58,176) (39,541) Total tangible asset
Slide 32: Appendix: Acquisition of Alliance Bancorp, Inc. of Pennsylvania
Appendix 4 to acquire Alliance Bancorp, Inc. of Pennsylvania March 3, 2015 WSFS Financial Corporation 32
Slide 33: Forward-Looking Statement Disclaimer
Forward-Looking Statement Disclaimer 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 Compa
Slide 34: Important Additional Information and Where to Find It
IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT In connection with the proposed merger, WSFS will file with the SEC a Registration Statement on Form S-4 that will include a proxy statement of Alliance and a prospectus of WSFS, as well as other relevant documents concerning the proposed transac
Slide 35: Strategic Rationale
Strategic Rationale Consistent with WSFS’s strategic growth plan in Southeastern PA Only remaining independent community bank of scale headquartered in attractive Delaware County market Favorable demographics, similar to WSFS core markets 8 offices in overlapping and adjacent market; WSFS will have
Slide 36: Overview of Alliance Bancorp, Inc.
Overview of Alliance Bancorp, Inc. Total Gross Loans ($mm) Financial Highlights As of 12/31/14 $320 Total Assets ($mm) 420.8 $310 Gross Loans ($mm) 310.2 $310 Total Deposits ($mm) 344.8 $303 $300 Loans / Deposits 89.98% Capital Ratios $290 $284 Tangible Equity ($mm) 66.5 $280 Tangible Equity / Tangi
Slide 37: Attractive Combined Franchise
Attractive Combined Franchise The combination creates the largest, most diversified, community bank headquartered in the Delaware Valley (Philadelphia-Camden -Wilmington MSA). ($mm) 12/31/2014 Combined(1) Assets: 4,853 421 5,274 Gross Loans: 3,225 310 3,535 Deposits: 3,649 345 3,994 (2) Market Cap :
Slide 38: Market Demographics
Market Demographics Alliance operates in a contiguous market with similar demographics to WSFS’s home market, where we have had success for 183 years. Delaware Pennsylvania New Castle Kent Sussex Delaware Chester County County County County County Total Population 551,010 171,028 207,614 562,633 511
Slide 39: Pro Forma Loans and Deposits
Pro Forma Loans and Deposits Pro Forma Loan Composition ALLB: $310.2 mm WSFS: $3,224.6 mm Pro Forma: $3,534.8 mm Other Other Other Constr. Loans Loans 1-4 Family Loans and Dev. 1% Constr. Constr. 1-4 Family 9% 8% 8% 8% and Dev. and Dev. 10% 4% 5% 1-4 Family 39% CRE & CRE & Multi Multi CRE & Family F
Slide 40: Transaction Overview and Financial Impact
Transaction Overview and Financial Impact • Approximately $92.0 million transaction value • 70% common stock / 30% cash Transaction • 0.28955 shares of WSFS or $22.00 in cash Structure • Price / Tangible Book Value of 138.4% • AnticipatedclosingdateinearlyQ42015,subjecttocompletion of standard closi
Slide 41: For more information please contact
For more information please contact: Investor Relations: Stephen Fowle (302) 571-6833 or sfowle@wsfsbank.com www.wsfsbank.com Corporate Headquarters 500 Delaware Avenue Wilmington, DE 19801 41