Slide 1: WSFS Financial Corporation Q2 2019 Investor Update
WSFS Financial Corporation Q2 2019 Investor Update August 2, 2019
Slide 2: 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 3: 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 believes that these non-GAAP measures provide a greater
Slide 4: Table of Contents
Table of Contents •2Q 2019 Results Page 5 •Net Interest Margin Page 8 •Outlook Page 9 •Beneficial Update Page 11 •The WSFS Franchise Page 15 •Selected Financial Information Page 20 •Appendix 1 – Management Team Page 32 •Appendix 2 – Non-GAAP Financial Information Page 34 4
Slide 5: 2Q 2019 Reported Financial Results
2Q 2019 Reported Financial Results First full quarter combined with Beneficial 2Q 2019 Reported Results: • EPS $0.68 • NIM 4.68% • ROA 1.20 % • Fee Income / Total Revenue 25.8% • ROTCE (1) 12.46% • Efficiency Ratio 64.8% • Net revenue (which includes net interest income and noninterest income) was $
Slide 6: 2Q 2019 Highlights
2Q 2019 Highlights First full quarter combined with Beneficial 2Q 2019 Core (1) Results: • EPS $0.88 • NIM 4.68% • ROA 1.57% • Fee Income / Total Revenue 25.3% • ROTCE 16.09% • Efficiency Ratio 55.7% Strong Operating Results: ($ in millions) 2Q19 2Q18 Change • Reflects strong organic and acquisition
Slide 7: 2Q 2019 Loan and Deposit Growth
2Q 2019 Loan and Deposit Growth $ in millions Reported 2Q'19 vs 1Q'19 June March $ % Annualized Loans (2Q'19 vs 1Q'19) 2019 2019 Growth Growth % Growth Commercial & industrial $3,465 $3,389 $76 2% 9% • 9% Annualized C&I growth offset by declines in Commercial real estate 2,237 2,345 (108) -5% -18% r
Slide 8: Net Interest Margin
Net Interest Margin 5.00% 4.05 – 4.30% 4.68% 4.25 – 4.35 – • 2H 2019 NIM Outlook lower than 4.10% 4.35% 4.45% 2Q 2019 due to anticipated 50bps 4.75% Fed Rate cuts in total, deposit 0.22% 4.50% product mapping impact, flat 0.06% customer deposit betas, and does 4.25% 0.37% not assume incremental Bene
Slide 9: 2019 Core Outlook
2019 Core(1) Outlook On Track to Deliver Full-Year Core ROA of Greater Than 1.50% • Loan growth impacted by Updated higher run-off primarily due to Original FY 2019 1H 2019 FY 2019 Core interest rate environment $ in millions Core Outlook Core Actual Outlook • Deposit growth impacted by Loan Growth
Slide 10: Outlook – 2019-2021 Strategic Plan: Core Return on Average Assets
Outlook – 2019-2021 Strategic Plan Core Return on Average Assets(1) 1.80% Core Return on Average Assets 1.70% 1.60% 1.50% 1.79% 1.73% 1.67% 1.40% 1.61% 1.51% 1.51% 1.30% 1.20% 2019 Outlook 2020 Outlook 2021 Outlook Core ROA With Revenue Synergies (1) Excludes one-time transaction costs; reflects Ben
Slide 11: Beneficial Update
Beneficial Update • Legal Close: March 1, 2019 • Systems & Brand Conversion: Weekend of August 24, 2019 • Majority of branch consolidations will occur during that weekend • Branch Optimization: Scheduled to close/sell 25% (30) of combined locations • Sale of 5 New Jersey branches to The Bank of Prin
Slide 12: Compelling Strategic Growth Opportunity
Compelling Strategic Growth Opportunity At $12.2 billion in assets at 6/30/19, WSFS fills a long-standing service gap in the Delaware Valley market between larger regional / national banks and smaller community banks MSA: Philadelphia-Camden-Wilmington (PA/NJ/DE/MD) Market Position # Institution Nam
Slide 13: Strategic Upside
Strategic Upside Significant strategic upside with the potential to drive $28.5 million of additional annual revenue (not modeled) with further upside from disciplined capital management Significant opportunity to increase Beneficial’s fee income By improving by making available WSFS’ full suite of
Slide 14: Delivery Transformation
Delivery Transformation • Focused on melding physical and digital delivery, consistent with our brand, by enabling our Associates with the latest technology and actionable data to better serve our Customers • ~50% of cost savings from branch consolidations to fund a Delivery Transformation - Increme
Slide 15: The WSFS Franchise
The WSFS Franchise WSFSiz2.. anda WSFS bank We Stand For Service!
Slide 16: The WSFS Franchise
The WSFS Franchise • Largest independent bank and trust co. HQ in the Del. Valley (1) • $12.2 billion in assets • $19.7 billion in fiduciary assets, 25 miles including $2.5 billion in assets under management • 147 offices • Founded in 1832, WSFS is one of the ten oldest banks in the U.S. • Major bus
Slide 17: The WSFS Franchise – Diversified & Robust Fee Income
The WSFS Franchise – Diversified & Robust Fee Income Trust & Wealth • Fee income is well diversified $140 36% with over 20 discrete lines of Cash Connect 35% business and products within our $120 three major segments Bank Segment $41 34% $36 • Strong historical growth in each Total Core (1) Fee inco
Slide 18: The WSFS Franchise – WSFS Wealth
The WSFS Franchise – WSFS Wealth A Full-Service Wealth Management Offering Net Revenue of $15.0 million in 2Q 2019 Pre-tax Income of $6.1 million $19.7 billion in fiduciary assets, including $2.5 billion in assets under management 18
Slide 19: The WSFS Franchise – Cash Connect
The WSFS Franchise – Cash Connect®(1) Leading National Provider of Cash Logistics ATM Vault Cash $11.3 million in net revenue (fee income less funding costs) and $1.8 million in pre-tax income in 2Q 2019 • 5 year CAGR(2) for net revenue is 12% Equipment Smart Safes Services Over $1.3 billion in vaul
Slide 20: Selected Financial Information
Selected Financial Information
Slide 21: The WSFS Franchise - WSFS Bank: Asset Composition
The WSFS Franchise - WSFS Bank Asset Composition – June 30, 2019 Assets $12.2 Billion; Net Loans $8.6 Billion 40% Other Non- C&I Earning • Commercial loans Assets 11% comprise 75% of the loan portfolio BOLI Other Construction 6% <1% • C&I (including owner- occupied real estate), Net Loans 70% Consum
Slide 22: The WSFS Franchise - WSFS Bank: Funding Composition
The WSFS Franchise - WSFS Bank Funding Composition – June 30, 2019 Total Funding – $12.2 Billion; Customer Deposits – $9.3 Billion • Core deposits represent 84% of total customer Time 16% deposits Non- interest Customer Equity 15% Deposits DDA 24% • Non-interest and very 76% low interest DDA (WAC Mo
Slide 23: Commercial Loan Portfolio Composition
Commercial Loan Portfolio Composition Outstanding Balances as 6/30/19 No industry or CRE concentrations in the loan portfolio C&I & Owner Occupied CRE CRE Investor & Construction Special Use & Flex, Warehouse, Other Self-Storage, Mixed Use General Industrial 6% 1%% Accommodation 9% and Food Services
Slide 24: Interest Rate Risk
Interest Rate Risk As of 6/30/19 (WSJ Prime @ 5.50%) 12 month NII NII BPS Change(1) % Impact $ Impact -100 -2.8% -$12.6M -50 -1.1% -$4.9M -25 -0.5% -$2.3M +25 +0.5% +$2.3M +50 +1.0% +$4.5M Balance Sheet Drivers • High % of variable/adjustable rate total loan portfolio: 51% – Approximately half of va
Slide 25: Overall Credit Trends Remain Stable
Overall Credit Trends Remain Stable Criticized & Classified Loans / Tier-1 + ALLL Delinquencies (1) / Gross Loans 50% 2.00% High point during the cycle 1.80% High point during 45% of: 1.60% the cycle of 3.03% 40% Criticized: 105.6% in 1Q10 in 1Q12 1.40% 35% Classified: 70.5% in 3Q09 1.20% 30% 1.00%
Slide 26: Regional Employment Composition
Regional Employment Composition Philadelphia-Camden-Wilmington MSA Diversity of industries drives stable & favorable employment in our markets Unemployment of 4.0%(1) Mining, logging, and construction Government 4% Manufacturing 11% 6% Other services 4% Trade, transportation, and utilities Leisure a
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) $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 12/14 12/15 12/16 12/17 12/18 6/19 Total Risk-Based Capital Well Capitalized Requirement 12/14 12/15 12/16 12/17 12/18 6/19 TRBC 13.83
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 – equally weighted • Insider ownership is over 2.5% • Board of Directors and Executive Management ownership guidelines in place and followed • In 2Q 201
Slide 29: Business Model and Total Shareholder returns
Business Model and Total Shareholder returns Total Shareholder Returns2 NASDAQ WSFS Bank Index 1 year -21.73% -8.85% 3 year 31.44% 43.16% 5 year 74.92% 56.66% 10 year 399.98% 194.46% (1) Completed by the Gallup Organization, as of December 31, 2018. (2) Per Bloomberg; closing price as of June 28,201
Slide 30: Business Model
Business Model WSFS:3.. MISSION We Stand For Service® VISION We envision a day when everyone says “| can’t imagine a world without WSFS.” STRATEGY Engaged Associates, living our culture, making a better life for all we serve. VALUES At WSFS we: Do the right thing + Serve others Are welcoming, open a
Slide 31: Appendices
Appendices WSFS:.. WSEFS bank We Stand For Service
Slide 32: Appendix 1 – Management Team
Appendix 1 – Management Team Rodger Levenson, 58, has served as President and Chief Executive Officer, since January 2019. Mr. Levenson previously served in various executive leadership roles, including the Chief Commercial Banking Officer from 2006 to 2015 and interim Chief Financial Officer from M
Slide 33: Appendix 1 – Management Team
Appendix 1 – Management Team Steve Clark, 61, joined WSFS Bank in 2002 and has served as Executive Vice President and Chief Commercial Banking Officer since May 2016. From 2002 thru 2006, Mr. Clark led and managed the establishment of the Middle Market lending unit, and in 2007 became Division Manag
Slide 34: Appendix 2 – Non-GAAP Financial Information
Appendix 2 – Non-GAAP Financial Information Tangible common equity to assets and Tangible common book value per share June 30, 2019 December 31, 2018 December 31, 2017 December 31, 2016 December 31, 2015 December 31, 2014 Total assets $ 12,156,595 $ 7,248,870 $ 6,999,540 $ 6,765,270 $ 5,584,719 $ 4,
Slide 35: Appendix 2 – Non-GAAP Financial Information
Appendix 2 – Non-GAAP Financial Information Core: GAAP Reconciliation Three months ended June 30, 2019 March 31, 2019 June 30, 2018 GAAP net income attributable to WSFS $ 36,200 $ 13,023 $ 28,740 Plus (less): Pre-tax adjustments: Securities gains, unrealized gains on equity investment, corporate dev
Slide 36: Appendix 2 – Non-GAAP Financial Information
Appendix 2 – Non-GAAP Financial Information Core: GAAP Reconciliation $ in thousands, except per share data Net Interest Fee Noninterest Net 2Q 2019 Taxes EPS ROA Income Income Expenses Income GAAP Results $ 123,232 $ 42,871 $ 107,848 $ 10,091 $ 36,200 $ 0.68 1.20% Corporate development costs - - (1
Slide 37: Appendix 2 – Non-GAAP Financial Information
Appendix 2 – Non-GAAP Financial Information Core: GAAP Reconciliation Three months ended June 30, 2019 March 31, 2019 June 30, 2018 Calculation of return on average tangible common equity: GAAP net income attributable to WSFS $ 36,200 $ 13,023 $ 28,740 Plus: Tax effected amortization of intangible a
Slide 38: Appendix 2 – Non-GAAP Financial Information
Appendix 2 – Non-GAAP Financial Information Core: GAAP Reconciliation Three months ended June 30, 2019 March 31, 2019 June 30, 2018 Net interest income (GAAP) $ 123,232 $ 83,314 $ 60,989 Core net interest income (non-GAAP) $ 123,232 $ 83,314 $ 60,989 Noninterest income (GAAP) $ 42,871 $ 41,122 $ 34,
Slide 39: Appendix 2 – Non-GAAP Financial Information
Appendix 2 – Non-GAAP Financial Information Core: GAAP Reconciliation WSFS Bank & Beneficial Bank Reconciliation of GAAP Fee Income to Non-GAAP Core Fee Income 12/31/2018 December 31, 2018 WSFS BNCL Net interest income (GAAP) $ 246,474 $ 180,364 Core net interest income (non-GAAP) $ 246,474 $ 180,36
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 302-792-6009 stockholderrelations@wsfsbank.com www.wsfsbank.com Rodger Levenson Dominic C. Canuso President and