Wsfs Financial Corporation · NASDAQ:WSFS
Wsfs Financial — Q1 2015 Earnings Presentation
40 slides from Wsfs Financial's earnings presentation, May 1, 2015
Slide 1: WSFS Financial Corporation
WSFS Financial Corporation WSFS bank) We Stand For Service®
Slide 2: Investor information and contacts
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: Important Additional Information
Important Additional Information IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT In connection with the proposed merger, the Company will file with the SEC a Registration Statement on Form S-4 that will include a proxy statement of Alliance and a prospectus of the Company, as well as other rel
Slide 5: Quarter Highlights
Quarter Highlights Review of 1Q 2015 Results • 1Q 2015 results reflect continued core revenue growth • Reported EPS was $1.34 compared to $1.85 in 1Q 2014 • Core EPS of $1.38 up 25% from core EPS of $1.10 in 1Q 2014 • Reported ROA was 1.06%; ROTCE was 12.00% • Core ROA of 1.09% increased 21% from 0.
Slide 6: Quarter Highlights
Quarter Highlights • Capital levels remain strong, boosted by earnings and investment appreciation • Tangible common book value per share improved 4% to $47.56 and tangible common equity increased 17 basis points to 9.17% • Tier 1 leverage ratio was 10.69%, Tier 1 risk-based capital ratio was 12.59%
Slide 7: 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 and Chester County– from #22 to #9 (pro forma) in Delaware County, PA Provides appeali
Slide 8: Recently completed combination with FNB of Wyoming (DE)
Recently completed combination with FNB of Wyoming (DE) Strategic Rationale: Consistent with WSFS’s strategic growth plan Size: Assets of $285MM; Loans $176MM; Deposits of $229MM; 6 Branches Enhances franchise in Kent County – from #6 to #2 (pro forma) in market share Diversifies revenue stream and
Slide 9: The WSFS Franchise
The WSFS Franchise • Largest independent bank and trust co. in the Delaware Valley Pennsylvania • $4.9 billion in assets • $9.9 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 10: WSFS Bank deposit market share in Delaware
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 3,090,816 16.03% 11.52
Slide 11: WSFS Bank – Balance Sheet: Asset Composition
WSFS Bank – Balance Sheet Asset Composition-March 31, 2015 Assets $4.9 Billion; Net Loans $3.2 Billion Comments Commercial Bank Assets Non- Earning 1Q 2015: Assets 6% • Commercial loans comprise 83% BOLI 2% C&I of the loan portfolio 53% • C&I (including owner-occupied real estate), the largest Inves
Slide 12: WSFS Bank – Balance Sheet: Funding Composition
WSFS Bank – Balance Sheet Funding Composition-March 31, 2015 Customer Funding - $3.3 billion Comments Heavy Bias Towards Core: • Core customer funding comprises 85% of total customer funding • Non-interest and very low interest DDA (WAC 9bps) stands at 46% of total customer funding Sweeps • Customer
Slide 13: Wealth Management
Wealth Management CYPRESS WSFS Wealth Investments CAPITAL MANAGEMENT, LLC • Offers insurance and brokerage products • Focus on retail banking clients • Registered investment advisor offering a • $647,000 revenue in 1Q 2015 “balanced’ investment style focused on preservation of capital and current in
Slide 14: Cash Connect
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 • Services non-bank
Slide 15: Fee Income Businesses
Fee Income Businesses Significant Growth in Fee Businesses 35% of Total Revenues* $80 $70 $60 $50 $40 $30 $20 $10 $0 2011 2012 2013 2014 YTD 2014 YTD 2015 WSFS Bank* Cash Connect Wealth * Excludes security gains, reverse mortgage consolidation gains, BOLI gain and FHLB special dividend 15
Slide 16: The WSFS Franchise: Organizational Focus
The WSFS Franchise Organizational Focus • Focus on increasing operating leverage and earnings • Continued credit quality improvement • Managing capital prudently and thoughtfully • Continuing strong alignment of management and owners • Goal – become solidly high performing (top quintile of p
Slide 17: Increasing Earnings
Increasing Earnings ROA Progression (1) Comments 1.40% Building Bottom Line Performance: 1.20% 1.00% • ROA trend has consistently 0.80% improved from a break-even year in 0.60% 2009 0.40% • 1Q 2015 Core ROA of 1.09% ahead of 0.20% 0.90% in 1Q 2014 0.00% • Goal of 1.20% by end of 4Q 2015 2011 2012 20
Slide 18: Increasing Earnings
Increasing Earnings Provision and Other Credit Costs Comments $50 Provision and Credit Costs $40 • Decreased significantly, reflecting long term $30 trend in asset quality improvement and lower charge offs in 1Q 2015. $20 • Total Problem loans reduced significantly to $10 27.04% of Tier I Capital pl
Slide 19: Increasing Earnings
Increasing Earnings Improved Net Interest Income Comments $145 Net Interest Margin / Net Interest $125 Income $105 • Net interest income increased $4.8 million $85 or 14% over 1Q 2014 $65 • Net interest margin of 3.82% improved 20 $45 basis points over 1Q 2014, excluding the $25 FHLB special dividen
Slide 20: Credit Quality Continues to Improve
Credit Quality Continues to Improve Asset Quality Metrics Problem Loan Key Ratios Comments Improving credit quality trends: 90.0% • NPAs were 1.00% of total assets at 84.8% March 31, 2015 80.0% • Classified loans decreased to 21.1% 70.0% of Tier 1 Capital + ALLL 60.0% • From a cycle–high of over 70%
Slide 21: What happens when Rates go up?
What happens when Rates go up? NII NII BPS Change* % Impact $ Impact +100 (1)% $ (0.7) mm +200 3% $ +3.9 mm +300 5% $ +8.0 mm +400 8% $ +12.1 mm Balance Sheet Drivers • +100 Model results reflects impact of loan floors and WSFS prime • High % of variable/adjustable rate total loan portfolio: 66% • H
Slide 22: Managing Capital
Managing Capital Bank-Level Capital Ratios (thousands) $600,000 $551,851 $550,000 $531,208 $505,354 $500,000 $466,925 $450,000 $434,301 $400,000 $350,000 $300,000 $250,000 12/11 12/12 12/13 12/14 1/15 Total Risk-Based Capital Well Capitalized Requirement Total Risk-Based Capital 13.43% 14.29% 14.36%
Slide 23: Strong Alignment / Capital Management
Strong Alignment / Capital Management • Insider ownership is over 6%* • Board of Directors and Executive Management ownership guidelines in place • Executive management bonuses and equity awards based on bottom-line performance • ROA, ROTCE and EPS growth • 5% stock buyback authorization in place; r
Slide 24: 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 25: 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 26: Appendices
Financial Corporation Appendices
Slide 27: Appendix – Table of Contents
Appendix – Table of Contents Section Page # • Appendix 1 – Management Team 28-29 • Appendix 2 – Business Model 30 • Appendix 3 – Non-GAAP Financial Information 31-32 • Appendix 4 – Alliance Bancorp, Inc. presentation 33-40 27
Slide 28: 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 29: 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 30: Appendix 2 – Business Model
Appendix 2 – Business Model 30
Slide 31: 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 0.66 (0.15) 0
Slide 32: Appendix 3 – Non-GAAP Financial Information
Appendix 3 – Non-GAAP Financial Information Tangible common book value and equity to assets End of Period March 31, December 31, March 31, 2015 2014 2014 Total assets $ 4,946,480 $ 4,853,320 $ 4,545,962 Less: Goodwill and other intangible assets (57,369) (57,593) (38,610) Total tangible assets $ 4,8
Slide 33: WSFS Financial Corporation to acquire Alliance Bancorp, Inc. of Pennsylvania
Appendix 4 to acquire Alliance Bancorp, Inc. of Pennsylvania March 3, 2015 WSFS Financial Corporation 33
Slide 34: 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 35: 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 $280 Tangible Equity / Tangi
Slide 36: Attractive Combined Franchise
Attractive Combined Franchise The combination creates the largest, most diversified, community bank headquartered in the Delaware Valley (Philadelphia-Camden-Wilmington MSA). ($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 37: 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 38: 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% 8% 8% 8% and Dev. and Dev. 10% 4% 5% 1-4 Family 39% CRE & CRE & Multi Multi CRE & Family F
Slide 39: 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 40: 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 40