Slide 1: WSFS Financial Corporation 1Q 2016 Investor Update
WSFS Financial Corporation 1Q 2016 Investor Update
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 Dominic Canuso Rodger Levenson Pr
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: 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 5: 1Q 2016 Highlights & Recent Events
1Q 2016 Highlights & Recent Events
Slide 6: June 2016 Debt Offering
June 2016 Debt Offering • Issuer: WSFS Financial Corporation • Security Type: Fixed-to-Floating Rate Senior Unsecured Notes due 2026 • Aggregate Principal Amount: $100 million • Rating: A- by Kroll Bond Rating Agency • Maturity: 10 years • Rate: 4.50% • Call Provision: Callable after five years at 1
Slide 7: 1Q 2016 Highlights
1Q 2016 Highlights Reported Strong Results Reported Core • EPS: $0.52 $0.53 • ROA: 1.13% 1.14% • ROTCE: 13.13% 13.33% Strong Revenue Growth • Core net revenue increased $9.5 million, or 16% over 1Q 2015 • Core net interest income improved $7.4 million, or 19% over 1Q 2015; Net interest margin (NIM)
Slide 8: 1Q 2016 Highlights
1Q 2016 Highlights Loan and Core Deposit Growth Continues • Net loans increased $23.1 million from 4Q 2015. Growth was driven by an 8% (annualized) increase in C&I and CRE loans, partially offset by a decline in residential mortgages and expected paydown/payoff activity in the construction portfolio
Slide 9: 2016-2018 Strategic Plan Goals
2016-2018 Strategic Plan Goals 9
Slide 10: 2016 Outlook
2016 Outlook(1) • High single digit organic loan growth and mid-to-high single digit deposit growth in 2016 • Net interest margin of mid-to-high 3.80%’s • Includes normal accretion from acquisitions and loan payoffs and normal reverse mortgage activity (but can be uneven) • Well-positioned to benefi
Slide 11: Core & Sustainable ROA – 2016 Outlook
2016 Outlook(2) Core & Sustainable ROA(1) – Full Year Modeled Outlook 1.20% 1.10% Core & Sustainable ROA 1.00% 0.90% 1.20% 1.17% 1.13% 1.14% 0.80% 0.95% 0.91% 0.70% 0.77% 0.60% FY12 FY13 FY14 FY15 FY16 FY16 FY16 Core & Core & Core & Core & Modeled @ Modeled @ Modeled @ Sustainable Sustainable Sustai
Slide 12: Core & Sustainable ROA Trend Line
Core & Sustainable1 ROA Trend Line 1.30 4Q16 Plan 1.25 1.25% ROA 1.20 1.15 1.10 Core & Sustainable ROA 1.10% 1.05 1.00 0.95 0.90 0.85 0.80 0.75 0.70 0.65 4Q tends to be the strongest on revenue and expenses; 1Q tends to be the weakest Average decline from 4Q to 1Q over the past 4 years has been 0.09
Slide 13: 2016 – 2018 Strategic Plan Themes
2016 – 2018 Strategic Plan Themes • 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 • Single digi
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 • $5.7 billion in assets • $13.1 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 • Re
Slide 16: 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 Alliance Bank • Recently announced Penn Liberty acquisition Strong position as one of the few remaining super-com
Slide 17: The WSFS Franchise - WSFS Bank: Asset Composition
The WSFS Franchise - WSFS Bank Asset Composition – March 31, 2016 Assets $5.7 Billion; Net Loans $3.8 Billion Non- Earning Assets 6% 52% C&I BOLI 2% • Commercial loans comprise 84% of the loan portfolio Investments 17% Net Loans Construction • C&I (including owner- 66% occupied real estate), 6% CRE
Slide 18: The WSFS Franchise - WSFS Bank: Funding Composition
The WSFS Franchise - WSFS Bank Funding Composition – March 31, 2016 Customer Funding - $3.9 Billion Equity 10% Sweeps Time Non- • Core customer funding 0.4% Customer 14% interest comprises 85% of total DDA 25% Funding customer funding 68% Borrowings Money • Non-interest and very Market Interest 17%
Slide 19: 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 (2) Excludes estimated out-of-market deposits of TD Bank 19 (3) Top 10 Delaware Banks house 96% of all traditional deposits
Slide 20: The WSFS Franchise – WSFS Wealth
The WSFS Franchise – WSFS Wealth Net Revenue of $34.9 million in 2015; Pre-tax profit of $12.2 million • Offers insurance and brokerage products • Registered investment advisor offering a • Focus on retail banking clients “balanced’ investment style focused on • $2.5 million revenue in 2015 preserva
Slide 21: 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 $700 million in vault cash • More than 17,000 non-bank ATMs nationwide • Adding ATM settlement services to existing managed ser
Slide 22: Additional Information
Additional Information Financial. Corporation
Slide 23: Overall Credit Trends Remain Strong
Overall Credit Trends Remain Strong Delinquencies (1) / Gross Loans Criticized & Classified Loans / Tier-1 + ALLL 50% 2.70% Average 45% delinquency over 2.20% 40% the past 13 quarters was 0.92% 35% 1.70% 30% 25% 24.09% 1.20% 20% 18.61% 0.70% 0.60% 15% 0.20% 10% 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q1
Slide 24: 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 $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 3/16 Total Risk-Based Capital Well Capitalized Requirement 12/12 12/13 12/14 12/15 3/16 TRBC 14.29% 14
Slide 25: 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 • Completed 5% stock repurchase
Slide 26: Well Positioned for Rising Rates
Well Positioned for Rising Rates NII NII BPS Change1 % Impact $ Impact +100 0.5% +$0.9mm +200 3.1% +$5.5mm +300 5.4% +$9.7mm +400 7.8% +$13.9mm Balance Sheet Drivers • +100 Model results reflects impact of loan floors and WSFS prime • High % of variable/adjustable rate total loan portfolio: 68% • Hi
Slide 27: Business Model and Total Shareholder Returns
Business Model and Total Shareholder Returns • Consistently ranked in the top quartile of all Focused Business Model businesses surveyed1 • 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” winner
Slide 28: Appendices
Appendices Financial. Corporation
Slide 29: Appendix – Table of Contents
Appendix – Table of Contents Section Page # – Appendix 1 – Management Team 30-31 – Appendix 2 – Business Model 32 – Appendix 3 – Non-GAAP Financial Information 33-35 – Appendix 4 – Penn Liberty Investor Presentation 36-47 29
Slide 30: 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 31: Appendix 1 – Management Team
Appendix 1 – Management Team • Peggy H. Eddens, 60, Executive Vice President, Chief Human Capital Officer since 2007. From 2003 to 2007 she was Senior Vice President for Human Resources and Development for NexTier Bank, Butler PA. Ms. Eddens received a Master of Science Degree in Human Resource Mana
Slide 32: Appendix 2 – Business Model
Appendix 2 – Business Model 32
Slide 33: Appendix 3 – Non-GAAP Financial Information
Appendix 3 – Non-GAAP Financial Information Tangible common equity to assets and Tangible common book value per share End of period March 31, December 31, March 31, 2016 2015 2015 Total assets $ 5,686,154 $ 5,585,491 $ 4,946,480 Less: Goodwill and other intangible assets (94,572) (95,295) (57,369) T
Slide 34: Appendix 3 – Non-GAAP Financial Information
Appendix 3 – Non-GAAP Financial Information Core: GAAP Reconciliation 3 Months Ended 3 Months Ended March 31, 2016 March 31, 2015 Net Interest Income (GAAP) $45,356 $38,817 Adj: Special FHLB Dividend ($808) Core Net Interest Income $45,356 $38,009 Noninterest Inc (as reported) $23,070 $21,095 Adj: S
Slide 35: Appendix 3 – Non-GAAP Financial Information
Appendix 3 – Non-GAAP Financial Information Core & Sustainable: GAAP Reconciliation FY15 FY14 FY13 FY12 Reported (GAAP) ROA 1.05% 1.17% 1.07% 0.73% Non-recurring PCI accretion (0.02) - - - Long-term credit normalization - (0.09) (0.05) 0.33 Securities Gains (0.02) (0.01) (0.05) (0.33) SASCO write up
Slide 36: WSFS Financial Corporation to Combine with Penn Liberty Financial Corp.
WSFS Financial Corporation to Combine with Penn Liberty Financial Corp. As Published on November 23, 2015 36
Slide 37: Additional Information
Additional Information IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT In connection with the proposed merger, WSFS will file with the SEC a Registration Statement on Form S-4 that will include a proxy statement of Penn Liberty and a prospectus of WSFS, as well as other relevant documents conc
Slide 38: Transaction Rationale
Transaction Rationale • Significantly strengthens WSFS’ position in our southeastern Pennsylvania market Already the largest super-community bank headquartered in the Delaware Valley (Philadelphia-Camden-Wilmington MSA)(1) Creates 3rd largest super-community bank franchise in three key southeast
Slide 39: Transaction Rationale
Transaction Rationale • Penn Liberty offices are within a well-defined southeastern PA geography, where WSFS already has a presence; creates market density in attractive markets • Strong C&I lending base and low cost core deposit base with nearly 45% no-and-low interest bearing demand deposits Str
Slide 40: Attractive Combined Franchise
Attractive Combined Franchise Expands WSFS’ position as the largest, most diversified, super-community bank headquartered in the Delaware Valley (Philadelphia-Camden-Wilmington MSA) ($mm) WSFS Penn Liberty Pro Forma Balance Sheet 9/30/15(1) Assets: $5,476 $651 $6,127 Gross Loans HFI: 3,698 510 4,208
Slide 41: Enhanced Market Demographics
Enhanced Market Demographics Penn Liberty operates in demographically attractive southeastern PA markets which are contiguous and very similar to WSFS’ home markets, where we have had success for 183 years Penn Liberty Counties Northern WSFS Counties Montgomery Chester New Castle Delaware County, PA
Slide 42: Pro Forma Market Share
Pro Forma Market Share Chester, Montgomery and Delaware PA Counties Number Market • Creates the 3rd largest super- Rank Institution (ST) of Branches Deposits in Market ($mm) Share (%) community bank franchise in 1 Wells Fargo & Co. (CA) 82 9,280 18.1 three key southeastern PA 2 Toronto-Dominion Bank
Slide 43: Transaction Details & Assumptions
Transaction Details & Assumptions • $101 million in the aggregate (including the value of Penn Liberty’s options)(1) • 0.6601 shares of WSFS common stock, or $21.75 in cash • 60% WSFS common stock / 40% cash consideration mix Transaction • Pat Ward, 32 year local PA banker and founder and Chairman o
Slide 44: Overview of Penn Liberty
Overview of Penn Liberty • Founded in 2004 by former Executives of Gross Loans & Leases: $510mm southeastern PA’s Commonwealth Bank Consumer & Construction • Well regarded, high-quality community bank Other 3.7% • Approximately $650 million in total assets 11.9% Residential • Commercial-oriented loa
Slide 45: Fee Income Opportunities
Fee Income Opportunities • Penn Liberty operates in the large, growing and demographically attractive counties of Montgomery and Chester, PA • Existing wealth management platform can be significantly enhanced with WSFS’ more extensive product offerings Christiana Trust and Cypress Capital Manageme
Slide 46: Summary
Summary A WSFS combination with Penn Liberty represents a strategically compelling, low risk franchise expansion that meets or exceeds WSFS’ financial return hurdles while providing significant upside opportunities for both revenue enhancements and capturing significant market share that is “in-play
Slide 47: 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 47