Wsfs Financial Corporation · NASDAQ:WSFS
Wsfs Financial — Q1 2017 Earnings Presentation
43 slides from Wsfs Financial's earnings presentation, May 10, 2017
Slide 1: WSFS Financial Corporation 1Q 2017 Investor Update
WSFS Financial Corporation 1Q 2017 Investor Update May 10, 2017
Slide 2: Investor Relations 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 stockholderrelations@wsfsbank.com www.wsfsbank.com Mark A. Turner Dominic Canuso Rodger Levenson Pr
Slide 3: Table of Contents
Table of Contents Forward-Looking Statements / Non-GAAP Information / Reported Financial Results Page 4 1Q 2017 Highlights Page 7 2017 Outlook & 2016 – 2018 Strategic Plan Page 10 The WSFS Franchise Page 14 Selected Financial Information Page 25 Appendix 1 – Management Team Page 36 Appendix 2 – Busi
Slide 4: 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 5: Non-GAAP Information
Non-GAAP Information This presentation contains financial information and performance measures determined by methods other than in accordance with accounting principles generally accepted in the United States (“GAAP”). The Company’s management uses these non-GAAP measures to measure the Company’s pe
Slide 6: Reported Financial Results
Reported Financial Results 1Q 2017 Reported Results: • EPS $0.59 • NIM 3.90% • ROA 1.12% • Fee Income / Total Revenue 34.3% • ROTCE 15.59% • Efficiency Ratio 62.9% • Reported net income was $18.9 million, or $0.59 per diluted common share for 1Q 2017 compared to net income of $15.8 million, or $0.52
Slide 7: 1Q 2017 Highlights
1Q 2017 Highlights Financial. Corporation
Slide 8: 1Q 2017 Highlights
1Q 2017 Highlights 1Q 2017 Core Results: • EPS: $0.59 • NIM 3.90% • ROA: 1.12% • Fee Income / Total Revenue 34.0% • ROTCE: 15.61% • Efficiency Ratio 62.7% Strong Revenue Growth • Core(1) net revenue increased $12.2 million, or 18% over 1Q 2016, reflecting strong organic and acquisition growth • Core
Slide 9: 1Q 2017 Highlights
1Q 2017 Highlights Credit Costs • Total credit costs (provision for loan losses, loan workout expenses, OREO expenses, and other credit reserves) were $2.8 million for 1Q 2017, a decrease from $5.9 million during 4Q 2016, and an increase from $1.3 million during 1Q 2016 Asset Quality • Total problem
Slide 10: 2017 Outlook & 2016-2018 Strategic Plan
2017 Outlook & 2016-2018 Strategic Plan
Slide 11: 2017 Outlook / Plan – Driving Factors
2017 Outlook / “Plan” – Driving Factors • Mid-to-high single digit loan and core deposit growth • Net interest margin in the 3.90%’s • One rate increase assumed in November 2017(1) • Expected payoff of $55 million in 6.25% senior notes in September will enhance 4Q 2017 NIM and thereafter • Total cre
Slide 12: 2017 Outlook: Core & Sustainable ROA
2017 Outlook Core & Sustainable ROA(1) 1.25% 1.20% 1.15% Core & Sustainable(1) ROA 1.10% 1.05% 1.24% 1.00% 1.13% 1.15% 0.95% 0.90% 0.95% 0.85% 0.91% 0.80% FY13 FY14 FY15 FY16 FY17 Core & Core & Core & Core & Plan Sustainable Sustainable Sustainable Sustainable GAAP ROA 1.07% 1.17% 1.05% 1.06% (1) Co
Slide 13: 2016 – 2018 Strategic Plan
2016 – 2018 Strategic Plan • Strong organic growth driven by favorable market demographics and competitive disruption • Selected acquisitions with a focus on increasing fee-based revenue • Fee (non-interest) income to total revenue of 40% by 4Q 2018 • Positive operating leverage • Mid-to-high single
Slide 14: The WSFS Franchise
The WSFS Franchise Financial. Corporation
Slide 15: The WSFS Franchise
The WSFS Franchise • Largest independent bank and trust co. HQ in the Del. Valley • $6.9 billion in assets • $17.6 billion in fiduciary assets, including $2.2 billion in assets under management • 77 offices • Founded in 1832, WSFS is one of the ten oldest banks in the U.S. • Major business lines • R
Slide 16: The WSFS Franchise - WSFS Bank: Delaware deposit market share
The WSFS Franchise - WSFS Bank Deposits of Traditional Banks in the State of Delaware June 30, 2016 Total Total Rank Institution Branch Deposits in Market ‘15-’16 ‘15-’16 CAGR (Adjusted for M&A) Count Market Share Growth Growth ‘08-’16 1 M&T Bank 39 5,767,847 28.85% 266,786 4.85% 2.44% 2 PNC Bank 39
Slide 17: The WSFS Franchise – PA Expansion
The WSFS Franchise – PA Expansion Over the past 5 years, WSFS has successfully expanded its franchise into Pennsylvania through: • De novo branches; hiring local lenders • Acquisition of Array / Arrow • Acquisition of Alliance Bank • Acquisition of Penn Liberty Bank • Acquisition of West Capital Man
Slide 18: PA Expansion: Deposit market share
The WSFS Franchise – PA Expansion Deposits of Traditional Banks in Chester, Delaware and Montgomery Counties in Pennsylvania June 30, 2016* Total Total Institution Branch Deposits in Market ‘15-’16 ‘15-’16 CAGR Rank (Adjusted for M&A) Count Market Share Growth Growth ‘08-’16 1 Wells Fargo Bank 81 $9
Slide 19: The WSFS Franchise - Attractive Markets
The WSFS Franchise - Attractive Markets Population Number of Businesses 900,000 Delaware Southeastern PA Delaware Southeastern PA 90,000 800,000 80,000 700,000 70,000 600,000 60,000 500,000 50,000 400,000 40,000 300,000 30,000 200,000 20,000 100,000 10,000 - - Sussex Kent New Castle Delaware Chester
Slide 20: Regional Employment Composition
Regional Employment Composition Philadelphia-Camden-Wilmington MSA Diversity of industries drives stable & favorable employment in our markets Unemployment of 4.6% Mining, logging, Government and construction 4% Manufacturing 12% 6% Other services 4% Trade, transportation, and utilities Leisure and
Slide 21: Diversified & Robust Fee Income
The WSFS Franchise – Diversified & Robust Fee Income WSFS Strategic Plan goal of fee (non-interest) income to total revenue of 40% by 4Q 2018 34% $100 Trust & Wealth 34% Cash Connect 34% in $90 Bank Segment 34% 1Q 2017 $27 $80 35% $23 $70 33% Total Core Fee income(1) $18 $16 32% $60 $14 $ in Million
Slide 22: The WSFS Franchise – WSFS Wealth
The WSFS Franchise – WSFS Wealth A Full-Service Wealth Management Offering Net Revenue of $11.6 million in 1Q 2017; Pre-tax profit of $3.3 million 22
Slide 23: 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 $1 billion in vault cash managed • Over 21,000 non-bank ATMs in all 50 States • Vault cash margin pressure offset by additional
Slide 24: Embracing Innovation as a Catalyst for Growth
Embracing Innovation as a Catalyst for Growth 24
Slide 25: Selected Financial Information
Selected Financial Information
Slide 26: Asset Composition – March 31, 2017
The WSFS Franchise - WSFS Bank Asset Composition – March 31, 2017 Assets $6.9 Billion; Net Loans $4.6 Billion Non- Earning Assets 7% 53% C&I BOLI 1% • Commercial loans comprise 84% of the loan portfolio Investments 15% Net Loans • C&I (including owner- Construction 67% occupied real estate), 5% the
Slide 27: Funding Composition – March 1, 2017
The WSFS Franchise - WSFS Bank Funding Composition – March 31, 2017 Total Funding – $6.9 Billion; Customer Deposits- $5.1 Billion • Excluding a short-term Time trust deposit, core Customer Deposits 11.2% Non- deposits were 88% of Equity interest 10.3% 74.4% DDA total customer deposits Money Market 3
Slide 28: Balanced Growth
The WSFS Franchise - Balanced Growth Balance sheet composition has remained balanced as WSFS has grown Loan Composition Funding Composition 5,000,000 7,000,000 4,500,000 5% 9% 6,000,000 10% 4,000,000 7% 3,500,000 5,000,000 30% 3,000,000 25% 10% 4% 4,000,000 10% 2,500,000 9% 28% 14% 3,000,000 2,000,0
Slide 29: Well Positioned for Rising Rates
Well Positioned for Rising Rates As of 3/31/17 (WSJ Prime @ 4.00%) NII NII BPS Change(1) % Impact $ Impact +50 0.7% +$1.4mm +100 1.4% +$3.0mm +200 2.9% +$6.1mm +300 4.3% +$9.1mm +400 5.6% +$11.8mm Balance Sheet Drivers • High % of variable/adjustable rate total loan portfolio: 66% • High % core depo
Slide 30: Overall Credit Trends Remain Strong
Overall Credit Trends Remain Strong Weighted Average Risk Rating (3) Criticized & Classified Loans / Tier-1 + ALLL 6.00 50% 5.80 High point during High point during the 45% 5.60 the cycle of 5.53 in cycle of: 40% Criticized: 105.6%- 1Q10 5.40 1Q12 35% Classified: 70.5%- 3Q09 5.20 4.97 27.13% 5.00 30
Slide 31: Loan Portfolio Composition
Loan Portfolio Composition Outstanding Balances as of 3/31/17 No industry or CRE concentrations in the loan portfolio C&I & Owner Occupied CRE CRE Investor & Construction Other Services Special Use & Other Mixed Use (except Public 8% 4% Flex, Warehouse, Self- Administration) Storage, General Other (
Slide 32: Robust Capital to Grow and to Return to Shareholders
Robust Capital to Grow and to Return to Shareholders Total Risk Based Capital (TRBC) 000’s $650,000 $600,000 $550,000 $500,000 $450,000 $400,000 $350,000 $300,000 $250,000 12/12 12/13 12/14 12/15 12/16 3/17 Total Risk-Based Capital Well Capitalized Requirement 12/12 12/13 12/14 12/15 12/16 3/17 TRBC
Slide 33: 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 ownership1 is over 5% • Board of Directors and Executive Management ownership guidelines in place and followed • In 1Q 2017, WSFS repurchased
Slide 34: Business Model and Total Shareholder Returns
Business Model and Total Shareholder Returns • Regularly ranked in the top quartile of all businesses surveyed1 • Received the 2016 Gallup Great Focused Business Model Workplace Award • WSFS has been recognized by The • Voted “Top Bank” in Delaware Wilmington News Journal as a six years running (The
Slide 35: Appendices
Appendices Financial. Corporation
Slide 36: Appendix – Management Team
Appendix 1 – Management Team Mark A. Turner, 53, 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 Bancorp.
Slide 37: Appendix – Management Team
Appendix 1 – Management Team Paul S. Greenplate, 58, Executive Vice President and Chief Risk Officer, joined WSFS in 1999 and prior to his leadership role in the Risk Division, he served as Senior Vice President and Treasurer. As Executive Vice President and Chief Risk Officer, Mr. Greenplate overse
Slide 38: Appendix – Business Model
Appendix 2 – Business Model 38
Slide 39: Appendix – Non-GAAP Financial Information
Appendix 3 – Non-GAAP Financial Information Tangible common equity to assets and Tangible common book value per share 3 Months Ended 3 Months Ended 3 Months Ended March 31, 2017 December 31, 2016 March 31, 2016 Total Assets $6,852,889 $6,765,270 $5,684,994 Less: Goodwill and other intangible assets
Slide 40: Core: GAAP Reconciliation
Appendix 3 – Non-GAAP Financial Information Core: GAAP Reconciliation 3 Months Ended 3 Months Ended March 31, 2017 March 31, 2016 Net Interest Income (GAAP) $53,103 $45,356 Adj: Core Net Interest Income $53,103 $45,356 Noninterest Inc (as reported) $28,092 $23,668 Adj: Securities Gains ($320) ($305)
Slide 41: Core: GAAP Reconciliation
Appendix 3 -Non-GAAP Financial Information Core: GAAP Reconciliation FY16 FY15 FY14 FY13 FY12 FY11 Pre-Tax FY16 Pre-Tax FY15 Pre-Tax FY14 Pre-Tax FY13 Pre-Tax FY12 Pre-Tax FY11 Adjustments Adjustments Adjustments Adjustments Adjustments Adjustments Reported (GAAP) Net Income $64,079 $53,533 $53,757
Slide 42: Core & Sustainable ROA: GAAP Reconciliation
Appendix 3 – Non-GAAP Financial Information Core & Sustainable ROA: GAAP Reconciliation FY16 FY15 FY14 FY13 FY12 Reported (GAAP) ROA 1.06% 1.05% 1.17% 1.07% 0.73% Non-recurring PCI accretion (0.02) - - - Long-term credit normalization 0.04 - (0.09) (0.05) 0.33 Securities Gains (0.03) (0.02) (0.01) (
Slide 43: For more information please contact
For more information please contact: Investor Relations: Dominic Canuso (302) 571-6833 or dcanuso@wsfsbank.com www.wsfsbank.com Corporate Headquarters 500 Delaware Avenue Wilmington, DE 19801 43