Wsfs Financial Corporation · NASDAQ:WSFS
Wsfs Financial — Q3 2015 Earnings Presentation
38 slides from Wsfs Financial's earnings presentation, Oct 30, 2015
Slide 1: WSFS Financial Corporation 3Q 2015 Investor Update
WSFS Financial Corporation 3Q 2015 Investor Update October 30, 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 stockholderrelations@wsfsbank.com www.wsfsbank.com Mark A. Turner Rodger Levenson President and CEO
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: 3Q 2015 Highlights
3Q 2015 Highlights Financial. Corporation
Slide 5: 3Q 2015 Highlights
3Q 2015 Highlights Reported Strong Results • Reported EPS: $0.51 • Reported ROA: 1.14% • Reported ROTCE: 13.27% Strong Revenue Growth • Core net revenues increased $5.6 million, or 10% over 3Q 2014 • Core net interest income improved $4.3 million, or 12% over 3Q 2014; Net interest __margin was 3.79%
Slide 6: 3Q 2015 Highlights
3Q 2015 Highlights Loan and Deposit Growth • Net loan growth was $14.4 million or 2% (annualized) over 2Q 2015. Commercial loan growth was $24.8 million or 4% (annualized) over 2Q 2015 • Core deposit growth was $117.1 million or 16% (annualized) over 2Q 2015, including a $54.8 million increase in se
Slide 7: The WSFS Franchise
The WSFS Franchise Financial. Corporation
Slide 8: The WSFS Franchise
The WSFS Franchise • Largest independent bank and trust co. in the Delaware Valley • $5.5 billion in assets* • $9.4 billion in fiduciary assets, includes $1.2 billion in assets under management • 63 offices* • Founded in 1832, WSFS is one of the ten oldest banks in the U.S. • Major business lines •
Slide 9: The WSFS Franchise - WSFS Bank: Asset Composition
The WSFS Franchise - WSFS Bank Asset Composition - September 30, 2015 Assets $5.1 Billion; Net Loans $3.4 Billion Non- Earning Assets 5% 51% BOLI 2% C&I • Commercial loans comprise 83% of the loan portfolio Investments 18% Construction • C&I (including owner- Net Loans 66% occupied real estate), 6%
Slide 10: The WSFS Franchise - WSFS Bank: Funding Composition
The WSFS Franchise - WSFS Bank Funding Composition - September 30, 2015 Customer Funding - $3.4 Billion Sweeps Equity 10% 0.3% Time Non- • Core customer funding 11% interest comprises 88% of total Customer DDA 26% Funding customer funding Money Borrowings 68% Market • Non-interest and very 17% & Int
Slide 11: The WSFS Franchise - WSFS Bank
The WSFS Franchise - WSFS Bank (1) WSFS 2015 growth excluding the acquisition of The First National Bank of Wyoming was $119 million or 3.86% *Most recently available FDIC data 11 (2) Excludes estimated out-of-market deposits of TD Bank (3) Top 10 Delaware Banks house 96% of all traditional deposits
Slide 12: The WSFS Franchise – WSFS Wealth
The WSFS Franchise – WSFS Wealth • Offers insurance and brokerage products • Registered investment advisor offering a • Focus on retail banking clients “balanced’ investment style focused on • $689,000 revenue in 3Q 2015 preservation of capital and current income • Focus on high net worth individual
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 • More than $553 million in vault cash • More than 16,000 non-bank ATMs nationwide • Adding ATM settlement services to existing managed ser
Slide 14: The Path to High Performing
The Path to High Performing 14
Slide 15: Path to High Performing – Historical Trend
Path to High Performing – Historical Trend 1.30 1.25 Path to High Performing Normalized ROA 1.20 Target 1.15 1.10 1.05 1.00 0.95 0.90 0.85 0.80 0.75 0.70 0.65 Trending to achieve strategic target of 1.20% in 4Q 2015 • Average “reported” ROA over last 11 quarters was 1.11%; Average “normalized” ROA (
Slide 16: Path to High Performing – 4Q 2015 Goal
Path to High Performing – 4Q 2015 Goal * 1.16% normalized ROA for 3Q 2015 adjusted includes credit costs at average since 1Q 2013 (-2bps); the impact of securities gains, Corporate Development expenses and normalization of tax provision - net (+4 bps); 16 total normalization adjustments +2bps
Slide 17: Path to High Performing – Revenue Improvement
Path to High Performing – Revenue Improvement Improved Net Interest Income ($mm) Net Interest Income • Net interest income in 3Q 2015 3.68% $145 3.56% increased $4.3 million, or 12% over 3.47% 3.60% 3Q 2014 $125 3.77% • The net interest margin was 3.79% in 3.66% 3Q 2015, a 9 basis point $105 improve
Slide 18: Path to High Performing – Cost Management
Path to High Performing – Cost Management Provision and Other Credit Costs ($mm) Provision and Other Credit Costs $50 • Asset quality remained strong despite $40 higher charge-offs which were primarily due to the large nonaccruing C&I loan $30 provisioned for in the prior quarter. $20 • Ratio of tot
Slide 19: Additional Information
Additional Information Financial. Corporation
Slide 20: Adequate Capital to Grow and to Return to Shareholders
Adequate Capital to Grow and to Return to Shareholders Total Risk Based Capital (TRBC) 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 9/15 Total Risk-Based Capital Well Capitalized Requirement 12/11 12/12 12/13 12/14. 9/15 TRBC 13.43% 14.29% 14.
Slide 21: Strong Alignment / Capital Management
Strong Alignment / Capital Management • Executive management bonuses and equity awards based on bottom-line performance • ROA, ROTCE and EPS growth • Insider ownership is 6%* • Board of Directors and Executive Management ownership guidelines in place ____and followed • Completed 5% stock buyback aut
Slide 22: Well Positioned for Rising Rates
Well Positioned for Rising Rates NII NII BPS Change* % Impact $ Impact +100 0% $0.0mm +200 3% +$5.2mm +300 7% +$10.4mm +400 10% +$15.5mm Balance Sheet Drivers • +100 Model results reflects impact of loan floors and WSFS prime • High % of variable/adjustable rate total loan portfolio: 68% • High % co
Slide 23: Business Model and Total Shareholder Returns
Business Model and Total Shareholder Returns • Consistently ranked in the top quintile of all Focused Business Model businesses surveyed * • Voted “Top Bank” in Delaware • WSFS has been recog- five years running (The News nized by The Wilmington Journal) News Journal as a “Top Workplace Award” winne
Slide 24: Appendices
Appendices Financial. Corporation
Slide 25: Appendix – Table of Contents
Appendix – Table of Contents Section Page # – Appendix 1 – Management Team 26-27 – Appendix 2 – Business Model 28 – Appendix 3 – Non-GAAP Financial Information 29-30 – Appendix 4 – Alliance Bancorp, Inc. Presentation 31 - 37 25
Slide 26: 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 27: 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 28: Appendix 2 – Business Model
Appendix 2 – Business Model 28
Slide 29: Appendix 3 – Non-GAAP Financial Information
Appendix 3 – Non-GAAP Financial Information Rev Mtg Securities FHLB Consolidation Corporate Other (Gains) Special Gain/Tax Development One Time Proforma EPS Losses Dividend Benefit Costs Adjs EPS 1st Q 2011 0.13 -0.01 0.01 0.13 2nd Q 2011 0.18 -0.01 0.01 0.18 3rd Q 2011 0.23 -0.05 0.19 4th Q 2011 0.
Slide 30: Appendix 3 – Non-GAAP Financial Information
Appendix 3 – Non-GAAP Financial Information Tangible common book value and equity to assets 30
Slide 31: 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 (as originally presented) 31
Slide 32: 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 33: Overview of Alliance Bancorp, Inc.
Overview of Alliance Bancorp, Inc. As of 12/31/14 Total Gross Loans ($mm) Financial Highlights $320 Total Assets ($mm) 420.8 $310 $310 Gross Loans ($mm) 310.2 $303 Total Deposits ($mm) 344.8 $300 Loans / Deposits 89.98% $290 Capital Ratios $284 $280 Tangible Equity ($mm) 66.5 Tangible Equity / Tangi
Slide 34: 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 35: 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 36: 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 37: 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 38: 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 38