Wsfs Financial Corporation · NASDAQ:WSFS
Wsfs Financial — Q1 2022 Earnings Presentation
37 slides from Wsfs Financial's earnings presentation, May 3, 2022
Slide 1: WSFS Financial Corporation 1Q 2022 Investor Update
1 WSFS Financial Corporation 1Q 2022 Investor Update May 2022 Exhibit 99.1
Slide 2: Forward Looking Statements & Non-GAAP
2 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 limi
Slide 3: Table of Contents
3 Table of Contents Earnings Supplement Page 4 Franchise and Markets Page 15 Selected Financial and Performance Metrics Page 23
Slide 4: Earnings Supplement
4 Earnings Supplement
Slide 5: 1Q 2022 Financial Highlights
5 1Q 2022 Financial Highlights 1 These are non-GAAP financial measures 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. 2 Excludes net income that is attributable to
Slide 6: WSFS and Bryn Mawr Trust Update
6 • On track to meet or exceed 65% annual cost savings in 2022; full cost run-rate savings by 1Q 2023 • On track for reduction in total branch count by approximately 30% or 40 branches • 40,000+ new Banking Customer households welcomed as part of this conversion • 34 branches consolidated this quart
Slide 7: 2022 Core Outlook
7 3 2022 Core Outlook as originally presented in 4Q 2021 Presentation Loan Growth2 Mid-to-high single digit growth excluding residential mortgage portfolio; Leasing and Consumer Partnership portfolio expecting double-digit growth; assumes reduction in loan payoff levels due to rate environment Depos
Slide 8: 2022 Core Outlook - Interest Rate Update
8 $29.24 $1.05 ($0.85) ($4.26) ($2.19) $22.99 $- $5 $10 $15 $20 $25 $30 $35 12/31/2021 Core Earnings Buybacks & Dividends AOCI BMT 3/31/2022 2022 Core Outlook - Interest Rate Update 1 Assumes each interest rate increase is 25 bps 2 TBV includes 15% decline from Accumulated Other Comprehensive income
Slide 9: 2022-2024 Strategic Plan
9 3 2022-2024 Strategic Plan Core Return on Average Assets1 • Continued Core ROA expansion from interest rate environment, loan and fee growth • Strategic Plan incorporates macroeconomic considerations for inflation and credit cycle • Loan growth impacted by timing and pace of excess liquidity runof
Slide 10: Loan and Deposit Growth
10 Loan and Deposit Growth • Pro forma Core Deposit growth of $291 million, or 7% annualized, driven by higher Corporate Trust deposits • 56% of Customer Deposits are in Wealth and Trust, Commercial, and Small Business portfolios • Pro forma growth of $49 million, or 2% annualized, excluding Residen
Slide 11: Excess Liquidity Impact and Management
11 Excess Liquidity Impact and Management Commercial Portfolio: Net New Loan Fundings ($mm)1 Investment Portfolio Highlights • Optimizing excess liquidity and shifting cash to securities • Total securities (cost) as a percentage of assets of 28.6% • 12 percentage points above pre-excess liquidity en
Slide 12: Net Interest Margin Trends
12 0.14% 0.11% 0.10% 0.09% 0.07% 4.30% 4.20% 4.16% 4.23% 4.13% 3.0% 3.2% 3.4% 3.6% 3.8% 4.0% 4.2% 4.4% 0.0% 0.2% 0.3% 0.5% 0.6% 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022 Lo an Y ie ld (% ) Cu st om er D ep os it Co st (% ) Total Deposit Cost Total Loans Ex PPP/PAA Yield 3.10% 2.91% 2.82% 2.90% 2.94% 0
Slide 13: Core Fee Revenue
13 $15 $16 $16 $18 $32 $12 $12 $11 $13 $16 $10 $11 $11 $11 $10 $9 $4 $6 $5 $3 $- $10 $20 $30 $40 $50 $60 $70 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022 Co re F ee R ev en ue ( $m m )2 Wealth Management Banking Cash Connect Mortgage 1 These are non-GAAP financial measures and should be considered along
Slide 14: ACL Overview
14 $0 $20 $40 $60 $80 $100 $120 $140 $160 12/31/2021 Econ Impact Risk Rating Mig./Other Net Loan Growth Initial BMT ACL Provision Subtotal Initial BMT ACL 3/31/2022 0% 1% 2% 3% 4% 5% 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 4Q21 Forecast 1Q22 Forecast Coverage Ratio 1 Source: Oxford Economics as of M
Slide 15: Franchise and Markets
15 Franchise and Markets
Slide 16: The WSFS Franchise – Strategic Opportunity
16 Note: As of March 31st, 2022, unless otherwise stated 1 AUA represents Assets Under Administration and AUM represents Assets Under Management; net AUM excludes certain flat-fee assets 2 Sources: FDIC and S&P Global Market Intelligence. Market Share data excludes brokered deposits as defined by FD
Slide 17: The WSFS Franchise – Growth & Performance
17 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 following: 2019 – 1.30%, 2020 – 0.87%, and 2021 – 1.82
Slide 18: The WSFS Franchise – Lines of Business
18 The WSFS Franchise – Lines of Business Business Banking • $1-$15+ million loans; $2.4 million average exposure Middle Market • $5-$30+ million loans; $5.9 million average exposure CRE • $3-$30+ million loans; $8.4 million average exposure Equipment Financing • Serves micro to small ticket market
Slide 19: Strategic Partnerships and Investments Timeline
19 Timeline 2013 – Current 2015 – 2017 2016 – Current 2017 – 2021 2020 – Current 2021 - Current Business Summary Digital lending platform that specializes in student loans and student loan refinancing Mobile multi- currency account for people who live, work, or travel across borders Digital mortgage
Slide 20: Channel Strategy and Digital Adoption
201 Based on 90-day average; Customer must login at least once through mobile or online channel to be considered digitally active Channel Strategy and Digital Adoption $104 $139 $187 40 60 80 100 120 140 160 180 200 1Q20 1Q21 1Q22 Deposits Per Branch ($mm) 125 132 139 115 120 125 130 135 140 1Q20 1Q
Slide 21: Delivery Transformation Journey
21 Delivery Transformation Journey OneWSFS Pre-2020 2020 2021 2022 and Future • First-of-its-kind multi-currency account with Zenbanx • Cloud-based Contact Center • nCino© platform • Oracle cloud-based ERP and PBCS ledger system • Launched the MyWSFS application • Rolled out Customer-centric website
Slide 22: Recognitions and Total Shareholder Returns
22 “President’s Award for Business Excellence and Best Community Involvement”; DE Small Business Chamber “Soaring 76’s Fastest Growing Companies”; Philadelphia Business Journal “Best of Biz” for Business Banking; South Jersey Magazine 2021 Annual World's Best Banks honoree; Forbes #1 “Top Bank” in D
Slide 23: Selected Financial and Performance Metrics
23 Selected Financial and Performance Metrics
Slide 24: Balance Sheet Composition at March 31, 2022
24 Time 7% Non-interest DDA 37% Money Market & Savings 37% Interest DDA 19% Pro forma Core Deposits increased $291 million in 1Q 2022, primarily due to higher Corporate Trust deposits Balance Sheet Composition at March 31, 2022 C&I 39% CRE 30% Construction 8% Commerical Leasing 4% Residential Mortga
Slide 25: Interest Rate Risk at March 31, 2022
25 1 WSFS IRR model estimates: Static Balance Sheet / Instantaneous Rate Shocks 2 Includes PPP loans • High % of variable/adjustable rate to total loan portfolio: 57% • Approximately half of variable rate loans tied to 30- day LIBOR • Approximately $705 million at their contractual floor • High % co
Slide 26: Historical Trends – Deposit and Fee Revenue
26 $3.4 $3.7 $6.5 $7.6 $8.4$1.4 $1.5 $2.2 $2.8 $4.0 0.37% 0.65% 0.82% 0.47% 0.16% 0.27% 0.47% 0.62% 0.35% 0.11% 0.0% 0.1% 0.2% 0.3% 0.4% 0.5% 0.6% 0.7% 0.8% 0.9% $0 $2 $4 $6 $8 $10 $12 $14 2017 2018 2019 2020 2021 Bi lli on s Interest-bearing Noninterest-bearing Interest-bearing cost Total deposit c
Slide 27: Criticized & Classified Loans, Delinquencies, Net Charge-Offs
27 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 Delinquencies Govt. Guaranteed Student Loans 0.48% 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18 4Q 18 1Q
Slide 28: Capital Management - Bank
28 9.66% 9.73% 10.82% 11.72% 9.74% 9.82% 10.11% 10.27% 10.44% 9.98% 4.5% 6.5% 8.5% 10.5% 12.5% 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 Dec 2016 Dec 2017 Dec 2018 Dec 2019 Dec 2020 Mar 2021 Jun 2021 Sep 2021 Dec 2021 Mar 2022 Average Assets (QTD) Tier 1 Leverage Ratio 11.93
Slide 29: Capital Management / Ownership Alignment
29Note: 2015 adjusted to reflect 3 for 1 stock split in May 2015 1 As defined in our most recent proxy as of March 28, 2022 (dollars in 000s) 2017 2018 2019 2020 2021 1Q 2022 Total Capital Returned $21,165 $44,419 $113,780 $179,313 $36,262 $56,104 Total Shares Repurchased 255,000 691,742 2,132,390 3
Slide 30: WSFS Mission, Vision, Strategy and Values
30 WSFS Mission, Vision, Strategy and Values
Slide 31: Appendix: Non-GAAP Financial Information
31 Non-GAAP Financial Information Appendix:
Slide 32: Non-GAAP Information
32 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
Slide 33: Appendix: Non-GAAP Financial Information
33 Appendix: Non-GAAP Financial Information Three Months Ended (dollars in thousands) March 31, 2022 December 31, 2021 March 31, 2021 Net interest income (GAAP) $ 138,558 $ 108,224 $ 114,185 Core net interest income (non-GAAP) $ 138,558 $ 108,224 $ 114,185 Noninterest income (GAAP) $ 60,574 $ 46,027
Slide 34: Appendix: Non-GAAP Financial Information
34 Appendix: Non-GAAP Financial Information Three Months Ended (dollars in thousands) March 31, 2022 December 31, 2021 March 31, 2021 Calculation of return on average tangible common equity: GAAP net income attributable to WSFS $ 3,804 $ 56,287 $ 65,082 Plus: Tax effected amortization of intangible
Slide 35: Appendix: Non-GAAP Financial Information
35 Appendix: Non-GAAP Financial Information 1 Completed on a fully tax-equivalent basis 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 1,1
Slide 36: Appendix: Key Deal Metrics
36 Appendix: Key Deal Metrics $ in Millions Deal Model $ 3/31/2022 $ Life (Years) Amort. Method Wealth Customer Intangible 67.5$ 60.4$ 13-14 Straightline Real Estate 10.5$ 15.2$ 20 Straightline Core Deposit (CDI) Intangible 5.1$ 10.9$ 10 Straightline Time Deposits (CDs) 3.5$ 0.6$ 5 Straightline Othe
Slide 37: Investor Relations Contact Information
37 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 Chairman, President and CEO 3