Wsfs Financial Corporation · NASDAQ:WSFS
Wsfs Financial — Q2 2015 Earnings Presentation
39 slides from Wsfs Financial's earnings presentation, Jul 24, 2015
Slide 1: WSFS Financial Corporation
WSFS Financial Corporation July 24, 2015
Slide 2: Investor relations contact information
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 302-571-7264 bsellers@wsfsbank.com www.wsfsbank.com Mark A. Turner Rodger Levenson President and CEO Chief Finan
Slide 3: 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 4: 2Q 2015 Highlights
2Q 2015 Highlights
Slide 5: 2Q 2015 Highlights
2Q 2015 Highlights Strong Revenue Growth • Core net revenues increased $2.4 million or 16% (annualized) over 1Q 2015 • Core net interest income improved $1.1 million or 11% (annualized) over 1Q 2015 • Core fee (noninterest) income increased $1.3 million or 26% (annualized) over __1Q 2015; stands at
Slide 6: 2Q 2015 Highlights
2Q 2015 Highlights Positive Operating Leverage • Expenses well managed with efficiency ratio improving to 62.3% from 63.9% in 2Q 2014 • 2% points in positive operating leverage in 2Q 2015 vs 2Q 2014 • Pre-tax, pre-provision net revenue grew $3 million ($12 million annualized) or 15% vs 2Q 2014 Asset
Slide 7: WSFS Franchise
Financial Corporation WSFS Franchise
Slide 8: The WSFS Franchise
The WSFS Franchise • Largest independent bank and trust co. in the Delaware Valley Pennsylvania • $5.1 billion in assets • $9.5 billion in fiduciary assets, includes $1.2 billion in assets under management New Jersey • 56 offices • Founded in 1832, WSFS is one of the ten Maryland oldest banks in the
Slide 9: The WSFS Franchise - WSFS Bank (Asset Composition)
The WSFS Franchise - WSFS Bank Asset Composition - June 30, 2015 Assets $5.1 Billion; Net Loans $3.3 Billion Non- Earning Assets 6% 51% • Commercial loans comprise 82% BOLI 2% C&I of the loan portfolio • C&I (including owner-occupied real estate), the largest Investments component, makes up 51% of 1
Slide 10: The WSFS Franchise - WSFS Bank (Funding Composition)
The WSFS Franchise - WSFS Bank Funding Composition - June 30, 2015 Customer Funding - $3.4 Billion Sweeps Equity 10% 0.4% • Core customer funding comprises Time 13% Non- interest 87% of total customer funding DDA 26% Customer • Non-interest and very low interest Funding DDA (WAC 9bps) stand at 47% o
Slide 11: Deposits of Traditional Banks in Delaware
The WSFS Franchise – 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
Slide 12: The WSFS Franchise – Wealth Management
The WSFS Franchise – Wealth Management CYPRESS CAPITAL MANAGEMENT, LLC WSFS Wealth Investments • Offers insurance and brokerage products • Registered investment advisor offering a • Focus on retail banking clients “balanced’ investment style focused on • $734,000 revenue in 2Q 2015 preservation of c
Slide 13: The WSFS Franchise – Cash Connect
The WSFS Franchise – Cash Connect ® • Leading provider of ATM vault cash, armored carrier management, cash forecasting services, insurance and equipment services • Adding ATM settlement services to existing managed service offering • Expanding ATM managed services from ISO market to FI market sector
Slide 14: Path to High Performance
Path to High Performance
Slide 15: Path to High Performing – Historical Trend
Path to High Performing – Historical Trend As reported in prior quarterly investor presentation Path to High Performing slides 1.30 1.25 Path to High Performing Normalized ROA 1.20 Target 1.15 1.10 1.05 1.00 0.95 0.90 0.85 0.80 0.75 0.70 0.65 Trending to achieve stated target of 1.20% in 4Q 2015 15
Slide 16: Path to High Performing – 2015 Goal
Path to High Performing – 2015 Goal Credit Costs Security Gains 1Q 2013 Baseline (1Q 2013 Normalized) 0.70% ROA 11 10 0.91% (as Reported) Net interest income 15 6 Fee income growth 20 Efficiency ratio 12 8 1 Credit costs 5 3 Tax rate 2 Goal (1Q 2013 Normalized + Planned Impacts) 1.20% 1.30% (with Po
Slide 17: Path to High Performing – Revenue Improvement
Path to High Performing – Revenue Improvement Improved Net Interest Income ($mm) Net Interest Income 3.68% • Net interest income in 2Q 2015 increased $145 3.56% $3.6 million or 10% over 2Q 2014 3.47% $125 3.60% • The net interest margin was 3.71% in 2Q 2015, a 7 basis point improvement from $105 2Q
Slide 18: Path to High Performing – Expense Management
Path to High Performing – Expense Management Provision and Other Credit Costs ($mm) Provision and Other Credit Costs • Recent asset quality trends are very $50 favorable despite impact of aforementioned $40 large C&I relationship moving to $30 nonaccruing status. • Ratio of total classified loans to
Slide 19: Additional Information
Financial Corporation Additional Information
Slide 20: Adequate Capital to Grow and to Return to Shareholders
Adequate Capital to Grow and to Return to Shareholders Bank-Level Capital Ratios (000’s) $600,000 $550,000 $500,000 $450,000 $400,000 $350,000 $300,000 $250,000 12/11 12/12 12/13 12/14 6/15 Total Risk-Based Capital Well Capitalized Requirement 12/11 12/12 12/13 12/14 6/15 Total Risk-Based Capital 13
Slide 21: Strong Alignment / Capital Management
Strong Alignment / Capital Management • Insider ownership is 6%* • Board of Directors and Executive Management ownership guidelines in place ____and followed • Executive management bonuses and equity awards based on bottom-line performance • ROA, ROTCE and EPS growth • 5% stock buyback authorization
Slide 22: Well Positioned for Rising Rates
Well Positioned for Rising Rates NII NII BPS Change* % Impact $ Impact +100 (1)% ($1.8)mm +200 1% +$2.0mm +300 4% +$5.8mm +400 6% +$9.4mm Balance Sheet Drivers • +100 Model results reflects impact of loan floors and WSFS prime • High % of variable/adjustable rate total loan portfolio: 67% • High % c
Slide 23: Business Model and Total Shareholder Returns
Business Model and Total Shareholder Returns Focused Business Model • Consistently ranked in the top quintile of all businesses surveyed * • Voted “Top Bank” in Delaware 4 years running (The News Journal) • WSFS has been recog- nized by The Wilmington News Journal as a “Top Workplace Award” winner n
Slide 24: Pending combination with Alliance Bancorp, Inc.
Pending combination with Alliance Bancorp, Inc. Strategic Rationale: Consistent with WSFS’s strategic plan Size: Assets of $421MM; Loans $310MM; Deposits of $345MM; 8 Branches Enhances franchise in Delaware County, PA and Chester County, PA – from #22 to #9 (pro forma) in Delaware County, PA Provide
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 32-39 26
Slide 27: Appendix 1 – Management Team
Appendix 1 – Management Team • Mark A. Turner, 52, has served as President and Chief Executive Officer since 2007. Mr. Turner was previously Chief Operating Officer and the Chief Financial Officer for WSFS. Prior to joining WSFS, his experience includes working at CoreStates Bank and Meridian Bancor
Slide 28: Appendix 1 – Management Team
Appendix 1 – Management Team • Thomas W. Kearney, 67, Executive Vice President and Chief Risk Officer has been with WSFS since 1998. Mr. Kearney holds a Bachelor’s degree in Business Administration (Finance and Accounting) from Drexel University. He also holds the professional designations of Certif
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 Proforma EPS Rev Mtg Securities FHLB Contract Consolidation Corporate Fraud/ Other (Gains) Special Term ination Gain / Tax Developm ent Litigation PRBO One Tim e Proform a EPS Losses Dividend Costs Benefit Costs Costs Adj. Adjs EPS 1st Q 2012 0.22 (0.05) 0
Slide 31: Appendix 3 – Non-GAAP Financial Information
Appendix 3 – Non-GAAP Financial Information Tangible common book value and equity to assets 31
Slide 32: WSFS Financial Corporation to acquire Alliance Bancorp, Inc. of Pennsylvania
Appendix 4 WSFS Financial Corporation to acquire Alliance Bancorp, Inc. of Pennsylvania March 3, 2015 32
Slide 33: 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 wi
Slide 34: 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 $303 Total Deposits ($mm) 344.8 $300 Loans / Deposits 89.98% $290 Capital Ratios $284 Tangible Equity ($mm) 66.5 $280 Tangible Equity / Tangi
Slide 35: Attractive Combined Franchise
Attractive Combined Franchise The combination creates the largest, most diversified, community bank headquartered in the Delaware Valley (Philadelphia-Camden-Wilmington MSA). ($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 Market Cap(2): 73
Slide 36: 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 37: 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 Loans Other Other Constr. 1% Loans 1-4 Family Loans and Dev. Constr. Constr. 1-4 Family 9.1% 8% 8% 8% and Dev. and Dev. 10% 4% 5% 1-4 Family 39% CRE & CRE & Multi Multi CRE & Family
Slide 38: 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% • Anticipated closing date in early Q4 2015, subject to completion of stand
Slide 39: For more information please contact:
For more information please contact: Investor Relations: Rodger Levenson (302) 571-7296 or rlevenson@wsfsbank.com www.wsfsbank.com Corporate Headquarters 500 Delaware Avenue Wilmington, DE 19801 39