Wsfs Financial Corporation · NASDAQ:WSFS
Wsfs Financial — Q4 2015 Earnings Presentation
46 slides from Wsfs Financial's earnings presentation, Feb 10, 2016
Slide 1: WSFS Financial Corporation 4Q 2015 Investor Update
WSFS Financial Corporation 4Q 2015 Investor Update February 10, 2016
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: 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: 4Q 2015 Highlights
4Q 2015 Highlights Financial. Corporation
Slide 6: 4Q 2015 Highlights
4Q 2015 Highlights Reported Strong Results Reported Core & Sustainable(1) • EPS: $0.46 $0.55 • ROA: 1.03% 1.24% • ROTCE: 11.84% 14.11% Exceeded 3-Year Strategic Plan ROA Goal • 4Q 2015 Core and Sustainable ROA of 1.24%, exceeding the 4Q strategic target of 1.20% • 59%, or 46bps, improvement over the
Slide 7: 4Q 2015 Highlights
4Q 2015 Highlights Strong and Balanced Loan and Deposit Growth – Organic and Acquisition • Net loans increased $412.9 million from 3Q 2015: $291.1 million from Alliance and $121.7 million, or 15% (annualized), of organic growth from 3Q 2015 • Compared to 4Q 2014, net loans increased $585.7 million,
Slide 8: The Path to High Performing
The Path to High Performing WSFS&z:.
Slide 9: Path to High Performing – Core & Sustainable
Path to High Performing – Core & Sustainable Core and Sustainable ROA of 1.24% in 4Q 2015 4Q15 1.30 Achieved 1.25 1.24% Path to High Performing Normalized ROA 1.20 Goal of 1.20% 1.15 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 b
Slide 10: Q4 Results Include Several Significant Items
Path to High Performing - Q4 Results Include Several Significant Items Significant Items in 4Q 2015 Results ($000’s) Net Income EPS ROA Reported (GAAP) $13,984 $0.46 1.03% Adjustments Net of Tax Positive performance of one acquired (FNBW) credit impaired loan (1,056) (0.04) (0.07) Securities gains (
Slide 11: Continued High Performance – 2016 Outlook
Continued High Performance – 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
Slide 12: 2016 Outlook – Core & Sustainable ROA
Continued High Performance – 2016 Outlook(1) Core & Sustainable ROA – Full Year Modeled Outlook 1.20% Path to High Performing Normalized ROA 1.10% 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
Slide 13: The WSFS Franchise
The WSFS Franchise Financial. Corporation
Slide 14: The WSFS Franchise
The WSFS Franchise • Largest independent bank and trust co. in the Delaware Valley • $5.6 billion in assets • $13.2 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 • R
Slide 15: 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 16: WSFS Bank – Asset Composition
The WSFS Franchise - WSFS Bank Asset Composition – December 31, 2015 Assets $5.6 Billion; Net Loans $3.8 Billion Non- Earning Assets 6% 52% C&I BOLI 2% • Commercial loans comprise 83% of the loan portfolio Investments 16% Net Loans Construction • C&I (including owner- 67% 6% occupied real estate), C
Slide 17: WSFS Bank – Funding Composition
The WSFS Franchise - WSFS Bank Funding Composition – December 31, 2015 Customer Funding - $3.9 Billion Equity 10% Sweeps Time Non- • Core customer funding 0.4% Customer 15% interest comprises 84% of total DDA 25% Funding customer funding 69% Money • Non-interest and very Borrowings Market Interest 1
Slide 18: 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 18 (3) Top 10 Delaware Banks house 96% of all traditional deposits
Slide 19: The WSFS Franchise – WSFS Wealth
The WSFS Franchise – WSFS Wealth Net Revenue of $9.1 million in 4Q 2015; Pre-tax profit of $3.1 million • Offers insurance and brokerage products • Registered investment advisor offering a • Focus on retail banking clients “balanced’ investment style focused on • $496,000 revenue in 4Q 2015 preserva
Slide 20: 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 $581 million in vault cash • More than 16,000 non-bank ATMs nationwide • Adding ATM settlement services to existing managed ser
Slide 21: Additional Information
Additional Information Financial. Corporation
Slide 22: 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 12 quarters was 0.95% 35% 1.70% 30% 25% 24.06% 1.20% 20% 17.78% 0.70% 15% 0.20% 10% 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15
Slide 23: 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 12/11 12/12 12/13 12/14 12/15 Total Risk-Based Capital Well Capitalized Requirement 12/11 12/12 12/13 12/14 12/15 TRBC 13.43%
Slide 24: 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 • Repurchased 1.5 million shares, or
Slide 25: Well Positioned for Rising Rates
Well Positioned for Rising Rates NII NII BPS Change* % Impact $ Impact +100 < 1% $0.8mm +200 3% +$5.4mm +300 6% +$10.0mm +400 8% +$14.4mm 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 26: Business Model and Total Shareholder Returns
Business Model and Total Shareholder Returns • Consistently ranked in the top quartile 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” winner
Slide 27: Appendices
Appendices Financial. Corporation
Slide 28: Appendix – Table of Contents
Appendix – Table of Contents Section Page # – Appendix 1 – Management Team 29-30 – Appendix 2 – Business Model 31 – Appendix 3 – Non-GAAP Financial Information 32-34 – Appendix 4 – Penn Liberty Investor Presentation 35-46 28
Slide 29: Appendix – 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 30: Appendix – 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 31: Appendix – Business Model
Appendix 2 – Business Model 31
Slide 32: Non-GAAP Financial Information
Appendix 3 – Non-GAAP Financial Information Core & Sustainable: GAAP Reconciliation 3 Months Ended 3 Months Ended December 31, 2015 December 31, 2012 Net Net Income EPS ROA Income EPS ROA Reported (GAAP) $13,984 $0.46 1.03% $7,558 $0.26 0.70% Adjustments net of tax: Non-recurring PCI accretion (net
Slide 33: 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 34: 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 December 31, September 30, December 31, 2015 2015 2014 Total assets $ 5,585,491 $ 5,067,942 $ 4,853,320 Less: Goodwill and other intangible assets (95,295) (56,339) (57
Slide 35: WSFS to Combine with Penn Liberty Financial Corp.
WSFS Financial Corporation to Combine with Penn Liberty Financial Corp. As Published on November 23, 2015 35
Slide 36: 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 37: 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 38: 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 39: 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 $6,127 Gross Loans HFI: 3,698 510 4,208
Slide 40: Enhanced Market Demographics
Enhanced Market Demographics Penn Liberty operates in demographically attractive southeastern PA markets which are contiguous and very similar to WSFS’ home markets, where we have had success for 183 years Penn Liberty Counties Northern WSFS Counties Montgomery Chester New Castle Delaware County, PA
Slide 41: Pro Forma Market Share
Pro Forma Market Share Chester, Montgomery and Delaware PA Counties Number Market • Creates the 3rd largest super- Rank Institution (ST) of Branches Deposits in Market ($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 42: 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 43: 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 44: 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 45: 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 46: 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 46