Wsfs Financial Corporation · NASDAQ:WSFS
Wsfs Financial — Q3 2022 Earnings Presentation
41 slides from Wsfs Financial's earnings presentation, Oct 25, 2022
Slide 1: WSFS Financial Corporation 3Q 2022 Investor Update
WSFS Financial Corporation 3Q 2022 Investor Update October 2022 1
Slide 2: Forward Looking Statements & Non-GAAP
Forward Looking Statements & Non-GAAP 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 limita
Slide 3: Table of Contents
Table of Contents 3Q 2022 Earnings Release Supplement Page 4 Franchise and Markets Page 13 Selected Financial and Performance Metrics Page 27 3
Slide 4: 3Q 2022 Earnings Release Supplement
3Q 2022 Earnings Release Supplement As Published on October 24th, 2022 4
Slide 5: 3Q 2022 Financial Highlights
3Q 2022 Financial Highlights 3Q 2022 Strong and diversified performance driving Core PPNR % growth $ in millions (except per share Reported Core1 of 32bps to 2.18%; including 8% annualized loan growth and amounts) EPS $1.16 $1.23 26.8% core fee revenue percentage ROA 1.44% 1.52% 3Q 2022 Highlights:
Slide 6: 2022 Core Outlook
2022 Core Outlook On Track for 4Q Core ROA 1.60% - 1.70% and 4Q Core PPNR% of 2.35% - 2.45%; Full Year Core ROA 1.30% - 1.40% and Core PPNR % of 1.90% - 2.00% 2022 Updated Mid-year Core Outlook1 Status Loan Mid single digit growth; On Track Growth2 excluding acquired residential mortgage portfolio D
Slide 7: Loan and Deposit Growth
Loan and Deposit Growth Diversified deposit base and strong loan-to-deposit ratio of 70% positioned well for organic loan growth Loans - 3Q 2022 vs 2Q 2022 Deposits - 3Q 2022 vs 2Q 2022 Sep Jun Sep 3Q22 % Annualized Sep Jun Sep 3Q22 % Annualized ($ in millions) 2022 2022 2021 $ Growth Growth % Growt
Slide 8: Commercial Loan and Investment Portfolios
Commercial Loan and Investment Portfolios Commercial Portfolio: New Net Loan Fundings ($mm)1 $800 $685 $618 $600 $490 $503 Commercial Loan Portfolio Highlights $426 $400 • Net new Commercial loan fundings of $618 million driven $200 by closing activity and strong Construction loan funding - • BMT co
Slide 9: Net Interest Margin Trends
Net Interest Margin Trends Asset sensitive balance sheet and diversified low funding costs driving NIM expansion Average Deposit Cost and Loan Yield 3.99% 6.0% 4.00% 0.5% Customer Deposit Cost (%) 0.09% 5.0% 5.12% 4.0% Loan Yield (%) 0.3% 4.23% 4.40% 4.16% 4.13% 3.0% 3.50% 2.0% 3.40% 0.2% 0.15% 1.0%
Slide 10: Core Fee Revenue Trends
Core Fee Revenue1 Trends Core Fee 29.8% 29.9% 30.4% 30.0% 26.8% Revenue %2 Diversified business model $70 drives core fee revenue $2 $1 strength $60 $3 $12 $15 • Well-diversified with over 25 discrete lines $10 of business and products within our three $50 Core Fee Revenue ($mm)2 main segments: Bank
Slide 11: ACL Overview
ACL Overview Full-Year GDP forecast of 1.7% in 2022 and flat in 20231 Full-Year Unemployment forecast of 3.7% in 2022 and 4.4% in 20231 3Q 2022 ACL Commentary • Coverage ratio of 1.14% and 1.40% including estimated remaining credit GDP Growth by Quarter Unemployment by Quarter mark on the acquired l
Slide 12: Capital Management
Capital Management TCE Ratio1,2 with AOCI 12% 9.04% 9.29% 9.50% Strong regulatory capital ratios supported by 9% 1.57% 2.66% 3.77% continued capital accretion through earnings 6% 7.47% 6.63% 3% 5.73% • TCE Ratio declined 90bps QoQ, which includes nearly half, or 43bps, from $81 million in share repu
Slide 13: Franchise and Markets
Franchise and Markets re Financial. Corporation
Slide 14: The WSFS Franchise – Diversified Business Model
The WSFS Franchise – Diversified Business Model1 Locally-positioned Banking and Wealth Franchise, with several Nationwide Businesses Regional National • Consumer • Wealth and Trust • 92 branches serving Pennsylvania, Delaware, and New Jersey with over • Serving all 50 states with over half of revenu
Slide 15: The WSFS Franchise – Strategic Opportunity
The WSFS Franchise – Strategic Opportunity Largest locally headquartered bank in the Delaware and greater Philadelphia region • $20.0 billion in assets • $61.4 billion in combined AUA1 and AUM1, including $7.2 billion in net AUM • 119 offices, including 92 banking offices • One of the largest ATM ne
Slide 16: The WSFS Franchise – Growth & Performance
The WSFS Franchise – Growth & Performance Millions 1 This is a non-GAAP financial measure and should be considered along with results prepared in accordance with GAAP, and not as a substitute for GAAP results. See Appendix for reconciliation to GAAP financial information Note: GAAP ROA is the follow
Slide 17: 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 18: Consumer Banking
Consumer Banking Relationship-focused community banking model with 92 banking offices & 611 ATMs1 Branch & ATM Network Digitally Active Banking Lending Mortgage Offering a full range of Over 151K digitally active Providing Customers with a Meeting Customers’ Locations across Delaware, mortgage produ
Slide 19: The WSFS Franchise – Strategic Partnerships
The WSFS Franchise – Strategic Partnerships Partnering with industry leaders for product diversification, knowledge, and technology best-practices Timeline 2013 – Current 2015 – 2017 2016 – Current 2017 – 2021 2020 – Current 2021 - Current Digital mortgage Digital lending Mobile multi- solution spec
Slide 20: Wealth and Trust
Wealth and Trust A Full-Service National Wealth Franchise; 6th largest amongst full-service banks under $100B in assets1 >50% $152mm 14,500+ 1,100+ 435% Revenue outside Advisory Institutional 5yr BMT of DE TTM Revenue2 of local market Relationships Clients Account Growth Bryn Mawr Trust WSFS Institu
Slide 21: Wealth and Trust Performance
Wealth and Trust Performance Diversified fee revenue with 65% outside of AUM-based product lines Total Segment Revenue ($mm)1 3Q 2022 Core Fee Revenue ($mm) $150 $128.8 Account-based $125 40% $100 $85.5 $72.7 $71.3 AUM-based $75 $63.1 $54.2 35% $50 $25 2017 2018 2019 2020 2021 YTD 2022 Private Banki
Slide 22: Cash Connect®
Cash Connect® Leading National Provider of Cash Logistics and Services • Oldest and second largest vault cash provider in the ATM industry; approximately $1.7 billion in vault cash supplied or supported at 9/30/2022 ATM Vault Cash • ~35,000 non-bank ATMs & retail safes in all 50 states1 “Bailment” •
Slide 23: NewLane Finance
NewLane Finance Micro & Small Ticket Commercial Equipment Financing Background: • Co-founded in 2017 by industry veterans, each with over 20 years of experience1 Market Size: Attractive Risk Adjusted Margins • Micro & Small Ticket Equipment Leasing is a $100 billion segment with over 100 thousand eq
Slide 24: Channel Strategy and Digital Adoption
Channel Strategy and Digital Adoption Optimizing our retail footprint and investing in our digital capabilities to provide best-in-class Customer service Banking Productivity Digital Activity Customer Experience Deposits Per Branch ($mm) Digitally Active (000s)1 90 NPS Scores 200 160 151 79.6 $182 7
Slide 25: Delivery Transformation Journey
Delivery Transformation Journey Pre-2020 2020 • First-of-its-kind multi-currency account with Zenbanx • nCino© application enhancements • Cloud-based Contact Center • Enlighten Sales platform • nCino© platform • Medallia©, a real-time Customer feedback platform • Oracle cloud-based ERP and PBCS ledg
Slide 26: Recognitions and Total Shareholder Returns
Recognitions and Total Shareholder Returns Engaged Associates, living our culture, enriching the Total Shareholder Returns1 communities we serve 300% “Top Workplace” sixteen #1 “Top Bank” in Delaware nine years years in a row and #6 in in a row; The News Journal 250% 2022; The News Journal “1st Rank
Slide 27: Selected Financial and Performance Metrics
Selected Financial and Performance Metrics 27
Slide 28: Balance Sheet Composition at September 30, 2022
Balance Sheet Composition at September 30, 2022 Asset Composition Funding Composition $20.0B $11.6B 30% $16.7B 70% 31% Assets Net Loans1 YOY Asset Growth Deposits2 Loan-to-Deposit YOY Deposit Growth Construction 9% Commerical Money Market Commercial Leasing Mortgage & Savings 5% 36% 28% Residential
Slide 29: Interest Rate Risk at September 30, 2022
Interest Rate Risk1 at September 30, 2022 WSJ Prime @ 6.25% Balance Sheet Drivers 12-Month IRR BPs change NII Impact (%) NII Impact ($) • High % of variable/adjustable rate to total loan portfolio: ~55% -100 (7.7%) ($61.2 million) • Approximately half of variable rate loans tied to 30- -50 (3.7%) ($
Slide 30: Historical Trends – Deposit and Fee Revenue
Historical Trends – Deposit and Fee Revenue Customer Deposit Costs Total Core Fee Revenue2 ($mm) 29%3 $14 0.82% 0.9% $180 Billions 27%3 27%3 $23 0.8% $160 $12 $11 $30 0.65% 36%3 0.7% $140 $4.0 $6 $43 $10 35%3 $51 0.62% 0.6% $120 $6 $2.8 $41 0.47% $51 $8 $2.2 0.5% $100 0.47% $43 0.37% $49 0.4% $80 $6
Slide 31: Credit Metrics
Credit Metrics1 Criticized & Classified Loans / Tier-1 + ACL Delinquencies2 / Gross Loans 60% 1.2% 50% 1.0% 0.8% 40% 0.59% 0.6% 30% 23.17% 0.4% 20% 0.2% 15.14% 10% 0.0% 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 3Q17 4Q17 1Q18 2Q18 3Q18 4
Slide 32: Capital Management - Bank
Capital Management - Bank Tier 1 Leverage Ratio Common Equity Tier 1 Capital 22,000 12.5% 2,150 16% Millions Millions 20,000 1,950 Millions 14% 18,000 1,750 12.38% 9.76% 10.5% 16,000 1,550 12% 14,000 1,350 8.5% 10% 12,000 1,150 10,000 950 8% 8,000 6.5% 750 6% 6,000 550 4,000 4.5% 350 4% Dec 2017 Dec
Slide 33: Capital Management / Ownership Alignment
Capital Management / Ownership Alignment $250,000 $0.60 $0.52 • Executive management incentive compensation $0.47 $0.48 $0.50 and equity awards aligned with shareholder performance Annual Dividends Paid per Share $200,000 Capital Returned ($ in 000s) $0.42 $0.40 • Insider ownership1 is approximately
Slide 34: WSFS Mission, Vision, Strategy and Values
WSFS Mission, Vision, Strategy and Values 34
Slide 35: Appendix: Non-GAAP Financial Information
Appendix: Non-GAAP Financial Information 35
Slide 36: Non-GAAP Information
Non-GAAP Information This presentation contains financial measures determined by methods other than in accordance with accounting principles generally accepted in the United States (GAAP). This presentation may include the following non-GAAP measures: • Adjusted net income (non-GAAP) attributable to
Slide 37: Appendix: Non-GAAP Financial Information
Appendix: Non-GAAP Financial Information Three Months Ended Three Months Ended September 30, September 30, September 30, September 30, June 30, 2022 June 30, 2022 (dollars in thousands) 2022 2021 (dollars in thousands, except per share data) 2022 2021 Net interest income (GAAP) $ 176,831 $ 153,615 $
Slide 38: Appendix: Non-GAAP Financial Information
Appendix: Non-GAAP Financial Information Three Months Ended For the year ended December 31, September 30, September 30, (dollars in thousands) 2010 2011 2012 2013 (dollars in thousands) June 30, 2022 2022 2021 Net Income (GAAP) $ 14,117 $ 22,677 $ 31,311 $ 46,882 Calculation of return on average tan
Slide 39: Appendix: Non-GAAP Financial Information
Appendix: Non-GAAP Financial Information Three Months Ended September 30, (dollars in thousands) June 30, 2022 March 31, 2022 2022 Calculation of tangible common equity ratio: Total Assets (GAAP) $ 19,985,387 $ 20,550,216 $ 20,964,674 Less: Goodwill and other intangible assets 1,016,413 1,019,857 1,
Slide 40: Appendix: Non-GAAP Financial Information
Appendix: Non-GAAP Financial Information For the year ended December 31, (dollars in thousands) 2017 2018 2019 2020 2021 Net interest income (as reported) $ 221,271 $ 246,474 $ 444,948 $ 465,955 $ 433,649 Adj: Tax-equivalent income 2,991 1,360 1,215 1,151 1,000 Core net interest income1 (non-GAAP) $
Slide 41: 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