Wsfs Financial Corporation · NASDAQ:WSFS
Wsfs Financial — Q4 2017 Earnings Presentation
41 slides from Wsfs Financial's earnings presentation, Feb 27, 2018
Slide 1: WSFS Financial Corporation 4Q 2017 Investor Update
WSFS Financial Corporation 4Q 2017 Investor Update February 27, 2018
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 C. Canuso Rodger Levenson
Slide 3: Table of Contents
Table of Contents Forward-Looking Statements / Non-GAAP Information / Reported Financial Results Page 4 2017 Highlights Page 7 2018 Outlook Page 9 The WSFS Franchise Page 12 Selected Financial Information Page 23 Appendix 1 – Management Team Page 34 Appendix 2 – Business Model Page 36 Appendix 3 – N
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 believes that these non-GAAP measures provide a greater
Slide 6: Reported Financial Results
Reported Financial Results 4Q 2017 Reported Results: • EPS ($0.31) • NIM 4.00% • ROA (0.56%) • Fee Income / Total Revenue 35.7% • ROTCE (6.60%) • Efficiency Ratio 74.9% • Reported a net loss of $9.8 million, or $0.31 per diluted common share for 4Q17 compared to net income of $18.1 million, or $0.56
Slide 7: 2017 Highlights
2017 Highlights Financial Corporation
Slide 8: 2017 Financial Performance
2017 Financial Performance 2017 Core(1) 2017 Expectations Results Mid-to-high single digit loan growth +7% Demonstrates our ability to gain market share organically and fund our loan growth via customer Mid-to-high single digit customer deposit growth +9% generated deposits NIM in the mid-3.90's 3.9
Slide 9: 2018 Outlook
2018 Outlook Financial Corporation
Slide 10: 2018 Outlook
2018 Outlook(1) • Mid-to high-single-digit loan and core deposit growth • Net interest margin in the 3.90%s • Assumes one rate increase in June 2018 • The impact of any additional rate increases and the magnitude and lag of rising deposit betas will likely determine our ability to get to the upper e
Slide 11: Core & Sustainable ROA
2018 Outlook Core & Sustainable ROA(1) 1.50% Adjusted for 1.50% new corporate 1.40% tax rate Core & Sustainable(1) ROA 1.30% 1.20% 1.10% Began with Core and Sustainable ROA of 0.70% in 1.30% 1.00% 1Q13 1.19% 1.13% 1.15% 0.90% 0.95% 0.91% 0.80% FY13 FY14 FY15 FY16 FY17 FY18 Outlook Core & Core & Core
Slide 12: The WSFS Franchise
The WSFS Franchise Financial Corporation
Slide 13: The WSFS Franchise
The WSFS Franchise • Largest independent bank and trust co. HQ in the Del. Valley • $7.0 billion in assets • $18.6 billion in fiduciary assets, including $2.3 billion in assets under management • 76 offices • Founded in 1832, WSFS is one of the ten oldest banks in the U.S. • Major business lines • R
Slide 14: Deposits of Traditional Banks in Delaware
The WSFS Franchise Deposits of Traditional Banks in the State of Delaware June 30, 2017* Total Total Rank Institution Branch Deposits in Market ‘16-’17 ‘16-’17 CAGR Count Market Share Growth Growth ‘08-’17 1 M&T Bank Corp (NY)1 39 6,063,740 29.28% 295,893 5.13% 3.08% 2 PNC Financial Service Group (P
Slide 15: The WSFS Franchise – PA Expansion
The WSFS Franchise – PA Expansion Strong position as one of the few remaining super-community banks in the attractive and rapidly consolidating southeastern PA markets Over the past 5 years, WSFS has successfully expanded its franchise into Pennsylvania through: • De novo branches; hiring local lend
Slide 16: Deposit Market Share in Southeastern PA Counties
The WSFS Franchise – PA Expansion Deposits of Traditional Banks in Chester, Delaware and Montgomery Counties in Pennsylvania June 30, 2017* Total Total Branch Deposits in Market ‘16-’17 ‘16-’17 CAGR Rank Institution Count Market Share Growth Growth ‘08-’17 1 Wells Fargo Bank 80 $10,975,086 19.29% $9
Slide 17: 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 18: Regional Employment Composition
Regional Employment Composition Philadelphia-Camden-Wilmington MSA Diversity of industries drives stable & favorable employment in our markets Unemployment of 3.7%(1) Mining, logging, Government and construction 11% 4% Manufacturing 6% Other services 4% Trade, Transportation Leisure and hospitality
Slide 19: 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 Trust & Wealth 36% $120 Cash Connect Bank Segment 34% $36 $100 35% $27 Total Core (1) Fee income 5 Year CAGR 34% $80 35% $23 Trust & Wealth: 21% $ in Millions
Slide 20: The WSFS Franchise – WSFS Wealth
The WSFS Franchise – WSFS Wealth A Full-Service Wealth Management Offering Net Revenue of $50.2 million in 2017 Pre-tax Profit of $3.9 million (1) (1) Includes a $12.0 million legal settlement 20
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 • Over $970 million in vault cash managed • Over 23,000 non-bank ATMs in all 50 States • Vault cash margin pressure offset by additional ma
Slide 22: Embracing Innovation as a Catalyst for Growth
Embracing Innovation as a Catalyst for Growth 22
Slide 23: Selected Financial Information
Selected Financial Information
Slide 24: WSFS Bank Asset Composition
The WSFS Franchise - WSFS Bank Asset Composition – December 31, 2017 Assets $7.0 Billion; Net Loans $4.8 Billion Non- Earning Assets 6% 52% C&I • Commercial loans BOLI 1% comprise 82% of the loan portfolio Net Loans • C&I (including owner- Investments 69% Construction 15% 6% occupied real estate), t
Slide 25: WSFS Bank Funding Composition
The WSFS Franchise - WSFS Bank Funding Composition – December 31, 2017 Total Funding – $7.0 Billion; Customer Deposits- $5.0 Billion • Core deposits represent Time 87% of total customer 13% Non- deposits and non-interest Equity 11% Customer interest Deposits DDA 28% and very low interest 72% Money D
Slide 26: The WSFS Franchise - Balanced Growth
The WSFS Franchise - Balanced Growth Balance sheet composition has remained steady as WSFS has grown Loan Composition Funding Composition 6,000,000 8,000,000 7,000,000 5,000,000 9% 6% 6,000,000 12% 4,000,000 27% 6% 5,000,000 24% 10% 3,000,000 4% 4,000,000 15% 10% 28% 9% 3,000,000 2,000,000 24% 20% 1
Slide 27: Well Positioned for Rising Rates
Well Positioned for Rising Rates As of 12/31/17 (WSJ Prime @ 4.50%) NII NII BPS Change(1) % Impact $ Impact +25 0.6% +1.3mm +50 1.1% +2.6mm +100 2.3% +5.2mm +200 4.4% +10.1mm Balance Sheet Drivers • High % of variable/adjustable rate total loan portfolio: 66% • High % core deposits: 87%; high % non-
Slide 28: Overall Credit Trends Remain Strong
Overall Credit Trends Remain Strong Weighted Average Risk Rating (1) Criticized & Classified Loans / Tier-1 + ALLL 6.00 50% 5.80 High point during High point during the cycle 45% 5.60 the cycle of 5.53 in of: 40% Criticized: 105.6% in 1Q10 5.40 1Q12 35% Classified: 70.5% in 3Q09 5.20 4.95 30% 5.00 2
Slide 29: Loan Portfolio Composition
Loan Portfolio Composition Outstanding Balances as of 12/31/17 No industry or CRE concentrations in the loan portfolio C&I & Owner Occupied CRE CRE Investor & Construction Special Use & Other Mixed Use Flex, Warehouse, Self- Other Services (except 9% Storage, General Public Administration) 3% Indust
Slide 30: 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 $700,000 $650,000 $600,000 $550,000 $500,000 $450,000 $400,000 $350,000 $300,000 12/12 12/13 12/14 12/15 12/16 12/17 Total Risk-Based Capital Well Capitalized Requirement 12/12 12/13 12/14 12/15 12/16 12/17 TR
Slide 31: 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 4Q 2017, WSFS repurchased
Slide 32: Stock performance and ranking
77th [Update with top 65% pick 2018 UPDATE comment] Nasdaq WSFS Bank 1 3.9% 5.4% 3 90.6% 58.1% 5 252.2% 134.9% 10 216.2% 87.1% December 31, 2017 32 32 December 29, 2017 32
Slide 33: Appendices
Appendices Financial Corporation
Slide 34: Appendix 1 – Management Team
Appendix 1 – Management Team Mark A. Turner, 54, has served as President and Chief Executive Officer since 2007. He was elected Chairman of the Board of Directors in July 2017. Mr. Turner was previously Chief Operating Officer and the Chief Financial Officer for WSFS. Prior to joining WSFS, his expe
Slide 35: Appendix 1 – Management Team
Appendix 1 – Management Team Paul S. Greenplate, 59, 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 36: Appendix 2 – Business Model
Appendix 2 – Business Model 36
Slide 37: Appendix 3 – 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 December 31, 2017 September 30, 2017 December 31, 2016 Total Assets $6,999,540 $6,875,344 $6,765,270 Less: Goodwill and other intangible
Slide 38: Appendix 3 – Non-GAAP Financial Information
Appendix 3 – Non-GAAP Financial Information Core: GAAP Reconciliation (1) Net Interest Income plus Core Non-interest Income. (2) Noninterest expense divided by (tax-equivalent) net interest income plus noninterest income . divided by (tax-equivalent) net interest income plus core non interest income
Slide 39: Appendix 3 – Non-GAAP Financial Information
Appendix 3 – Non-GAAP Financial Information Core: GAAP Reconciliation 3 Months Ended 3 Months Ended 3 Months Ended Fiscal Year Fiscal Year December 31, 2017 September 30, 2017 December 31, 2016 2017 2016 Net Interest Income (GAAP) $57,725 $56,129 $52,954 $221,271 $193,745 Adj: Core Net Interest Inco
Slide 40: Appendix 3 – Non-GAAP Financial Information
Appendix 3 – Non-GAAP Financial Information Core & Sustainable ROA: GAAP Reconciliation FY17 FY16 FY15 FY14 FY13 FY12 Reported (GAAP) ROA 0.74 1.06 1.05 1.17 1.07 0.73 Non-recurring PCI accretion (0.02) Long-term credit normalization (0.00) 0.04 (0.00) (0.09) (0.05) 0.33 Securities Gains (0.02) (0.0
Slide 41: 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 41