Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - WSFS FINANCIAL CORP | wsfspressrelease1302018f.htm |
| 8-K - 8-K - WSFS FINANCIAL CORP | form8-k01302018.htm |
WSFS Financial Corporation
4Q 2017 Investor Update
January 30, 2018
EXHIBIT 99.2
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
Chairman, President and CEO
302-571-7160
mturner@wsfsbank.com
Rodger Levenson
Chief Operating Officer
302-571-7296
rlevenson@wsfsbank.com
2
Dominic C. Canuso
Chief Financial Officer
302-571-6833
dcanuso@wsfsbank.com
Table of Contents
Forward-Looking Statements / Non-GAAP Information / Reported Financial Results
2018 Outlook
The WSFS Franchise
Page 4
Page 9
Page 12
3
2017 Highlights Page 7
Selected Financial Information Page 23
Appendix 1 – Management Team Page 34
Appendix 2 – Business Model Page 36
Appendix 3 – Non-GAAP Financial Information Page 37
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 predictions or expectations of future
business or financial performance as well as its goals and objectives for future operations, financial and business trends, business prospects, and
management's outlook or expectations for earnings, revenues, expenses, capital levels, liquidity levels, asset quality or other future financial or business
performance, strategies or expectations. Such forward-looking statements are based on various assumptions (some of which may be beyond the
Company's control) and are subject to risks and uncertainties (which change over time) and other factors which could cause actual results to differ
materially from those currently anticipated. Such risks and uncertainties include, but are not limited to, those related to difficult market conditions and
unfavorable economic trends in the United States generally, and particularly in the market areas in which the Company operates and in which its loans are
concentrated, including the effects of declines in housing markets, an increase in unemployment levels and slowdowns in economic growth; the
Company's level of nonperforming assets and the costs associated with resolving any problem loans including litigation and other costs; changes in
market interest rates may increase funding costs and reduce earning asset yields thus reducing margin; the impact of changes in interest rates and the
credit quality and strength of underlying collateral and the effect of such changes on the market value of the Company's investment securities portfolio; the
credit risk associated with the substantial amount of commercial real estate, construction and land development, and commercial and industrial loans in
our loan portfolio; the extensive federal and state regulation, supervision and examination governing almost every aspect of the Company's operations
including changes in regulations affecting financial institutions, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules
and regulations being issued in accordance with this statute and potential expenses associated with complying with such regulations; possible additional
loan losses and impairment of the collectability of loans; the Company's ability to comply with applicable capital and liquidity requirements (including the
finalized Basel III capital standards), including our ability to generate liquidity internally or raise capital on favorable terms; possible changes in trade,
monetary and fiscal policies, laws and regulations and other activities of governments, agencies, and similar organizations; any impairment of the
Company's goodwill or other intangible assets; failure of the financial and operational controls of the Company's Cash Connect® division; conditions in the
financial markets that may limit the Company's access to additional funding to meet its liquidity needs; the success of the Company's growth plans,
including the successful integration of past and future acquisitions; negative perceptions or publicity with respect to the Company's trust and wealth
management business; system failure or cybersecurity breaches of the Company's network security; the Company's ability to recruit and retain key
employees; the effects of problems encountered by other financial institutions that adversely affect the Company or the banking industry generally; the
effects of weather and natural disasters such as floods, droughts, wind, tornadoes and hurricanes as well as effects from geopolitical instability and
manmade disasters including terrorist attacks; possible changes in the speed of loan prepayments by the Company's customers and loan origination or
sales volumes; possible acceleration of prepayments of mortgage-backed securities due to low interest rates, and the related acceleration of premium
amortization on prepayments on mortgage-backed securities due to low interest rates; regulatory limits on the Company's ability to receive dividends from
its subsidiaries and pay dividends to its stockholders; the effects of any reputational, credit, interest rate, market, operational, legal, liquidity, regulatory and
compliance risk resulting from developments related to any of the risks discussed above; and the costs associated with resolving any problem loans,
litigation and other risks and uncertainties, discussed in the Company's Form 10-K for the year ended December 31, 2016 and other documents filed by
the Company with the Securities and Exchange Commission from time to time. Forward-looking statements are as of the date they are made, and the
Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the
Company.
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 understanding of
ongoing operations, enhance comparability of results of operations with prior periods and show the effects of significant gains and charges in the periods
presented. The Company’s management believes that investors may use these non-GAAP measures to analyze the Company’s financial performance
without the impact of unusual items or events that may obscure trends in the Company’s underlying performance. This non-GAAP data should be
considered in addition to results prepared in accordance with GAAP, and is not a substitute for, or superior to, GAAP results. For a reconciliation of these
non-GAAP to their comparable GAAP measures, see Appendix 3. The following are the non-GAAP measures used in this presentation:
Core net income is a non-GAAP measure that adjusts net income determined in accordance with GAAP to exclude the impact of securities
gains (losses), corporate development expenses, debt extinguishment costs, and other unusual items
Core noninterest income, also called core fee income, is a non-GAAP measure that adjusts noninterest income as determined in accordance
with GAAP to exclude the impact of securities gains (losses)
Core earnings per share (EPS) is a non-GAAP measure that divides (i) core net income by (ii) weighted average shares of common stock
outstanding for the applicable period
Core net revenue is a non-GAAP measure that is determined by adding core net interest income plus core noninterest income
Core noninterest expense is a non-GAAP measure that adjusts noninterest expense as determined in accordance with GAAP to exclude
corporate development expenses, debt extinguishment costs, fraud loss and WSFS Foundation Contributions.
Core efficiency ratio is a non-GAAP measure that is determined by dividing core noninterest expense by the sum of core interest income and
core noninterest income
Core fee income to total revenue is a non-GAAP measure that divides (i) core non interest income by (ii) (tax equivalent) core net interest
income and core noninterest income
Core return on assets (ROA) is a non-GAAP measure that divides (i) core net income by (ii) average assets for the applicable period
Core and Sustainable ROA is a non-GAAP measure that divides (i) net income determined in accordance with GAAP and adjusting it by taking
core net income and normalizing for long-term credit costs, non-recurring accretion from purchased credit impaired loans (“PCI”), and a
normal tax rate by (ii) average assets for the applicable period
Tangible common equity is a non-GAAP measure and is defined as total average stockholders’ equity less goodwill, other intangible assets
and preferred stock
Return on average tangible common equity (ROTCE) is a non-GAAP measure and is defined as net income allocable to common stockholders
divided by tangible common equity
5
Reported Financial Results
6
4Q 2017 Reported Results:
• Reported a net loss of $0.5 million, or $0.02 per diluted common share for 4Q17
compared to net income of $18.1 million, or $0.56 per share for 4Q16 and net income of
$20.6 million, or $0.64 per share for 3Q17.
• Net revenue was $90.2 million, an increase of $8.9 million, or 11% from 4Q16
• Net interest income was $57.7 million, an increase of $4.8 million, or 9% from 4Q16; and
noninterest income was $32.4 million, an increase of $4.1 million, or 15% from 4Q16
• Noninterest expense was $56.1 million, an increase of $7.1 million, or 15% from 4Q16
• Reported results include the impact of four notable items previously disclosed on January
4, 2018 on Form 8-K. Detail on the impact of these items can be found on page 38.
• EPS ($0.02) • NIM 4.00%
• ROA (0.03%) • Fee Income / Total Revenue 35.7%
• ROTCE (0.05%) • Efficiency Ratio 61.7%
2017 Highlights
2017 Financial Performance
8
(1) These are non-GAAP financial measures and should be considered along with results prepared in accordance with GAAP, and not as a substitute for GAAP results. See Appendix 3 for a
reconciliation to GAAP financial information.
(2) Core and Sustainable ROA is a non-GAAP measure that divides (i) net income determined in accordance with GAAP and adjusting it by taking core net income and normalizing for long-term
credit costs, non-recurring accretion from purchased credit impaired loans (“PCI”), and a normal tax rate by (ii) average assets. See Appendix 3 for GAAP reconciliation
2017 Expectations
2017 Core(1)
Results
Mid-to-high single digit loan growth +7% Demonstrates our ability to gain market share
organically and fund our loan growth via customer
generated deposits Mid-to-high single digit customer deposit growth +9%
NIM in the mid-3.90's 3.95% An increase of 7 basis points from the prior full year
Total credit costs between $12 – $14 million for the year $12.6M Around 20bps of assets
20%+ fee income growth 19% 12 percentage points from organic growth
Efficiency ratio around 60% 60.1% Well managed and consistent with expectations
4Q17 Core & Sustainable ROA(2) of 1.31%
Achieved Strategic Plan goal of 1.30% by 4Q18 a full year ahead of schedule
Key Core(1) Performance Metrics – Full Year 2017
ROA 1.21%
ROTCE 15.8%
EPS $2.56
2018 Outlook
2018 Outlook(1)
10
• 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 end of this range
for the full year
• Total credit costs (provision, loan workout expenses, OREO expenses, and other credit
reserves) between $13 – $15 million for the year or approximately 20bps of assets.
Credit costs can be uneven quarter to quarter
• Low double-digit non-interest income growth
• Assumes no additional fee-based acquisitions
• Efficiency ratio slightly under 60%
• Effective tax rate of approximately 23%. This tax rate may fluctuate quarter to quarter due
to equity exercise activity and other factors
(1) These are non-GAAP financial measures and should be considered along with results prepared in accordance with GAAP, and not as a substitute for GAAP results. See Appendix 3
for a reconciliation to GAAP financial information.
0.91%
0.95%
1.13% 1.15%
1.24%
1.30%
0.80%
0.90%
1.00%
1.10%
1.20%
1.30%
1.40%
1.50%
FY13
Core &
Sustainable
FY14
Core &
Sustainable
FY15
Core &
Sustainable
FY16
Core &
Sustainable
FY17
Core &
Sustainable
FY18 Outlook
11
Co
re
&
Su
st
ai
n
ab
le
(1
) R
O
A
Core & Sustainable ROA(1)
GAAP ROA 1.07% 1.17% 1.05% 1.06% 0.87%
2018 Outlook
(1) Core and Sustainable ROA is a non-GAAP measure that divides (i) net income determined in accordance with GAAP and adjusting it by taking core net income and normalizing for
long-term credit costs, non-recurring accretion from purchased credit impaired loans (“PCI”), and a normal tax rate by (ii) average assets. See Appendix 3 for GAAP reconciliation.
Adjusted for
new corporate
tax rate
1.50%
Began with Core
and Sustainable
ROA of 0.70% in
1Q13
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
• Retail
• Commercial
• Wealth Management (1)
• Cash Connect® (ATM cash
and related businesses) (1)
The WSFS Franchise
13 (1) Wealth and Cash Connect businesses conducted nationwide
*Most recently available FDIC data 14
The WSFS Franchise
Deposits of Traditional Banks in the State of Delaware
June 30, 2017*
Rank
Institution
Branch
Count
Total
Deposits in
Market
Total
Market
Share
‘16-’17
Growth
‘16-’17
Growth
CAGR
‘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 (PA) 38 4,384,463 21.17% 301,151 7.38% 7.66%
3 WSFS Financial Corp (DE) 34 3,690,248 17.82% 225,675 6.51% 10.13%
4 Wells Fargo & Co (CA) 20 2,263,441 10.93% 92,096 4.24% -4.38%
5 TD Bank (Canada)2 13 1,151,422 5.56% 183,438 18.95% 14.17%
6 Citizens (RBS - Scotland) 23 1,137,645 5.49% 18,245 1.63% 1.30%
7 Bank of America (NC) 5 685,969 3.31% 409,708 148.3% 45.14%
8 Fulton Financial Corp. (PA) 10 570,966 2.76% 48,715 9.33% 10.20%
9 Artisans’ Bank (DE) 12 461,380 2.23% 18,272 4.12% -1.31%
10 County Bank (DE) 7 298,288 1.44% 8,257 2.85% 0.46%
Top 10 State of Delaware Banks3 201 $20,707,562 100.00% 1,601,450 8.38% 4.37%
(1) M&T Bank deposits excludes a $1.1 billion increase in the Wilmington Trust office. M&T reported ‘16 - ’17 growth is 24.1%.
(2) Excludes estimated out of market deposits of TD bank.
(3) Top 10 Delaware Banks house 96% of all traditional deposits in the share.
The WSFS Franchise – PA Expansion
15
Strong position as one of the few remaining super-community banks in the
attractive and rapidly consolidating southeastern PA markets
(1) Source: FDIC
(2) Based on customer address
(3) Includes one location (West Capital) in Philadelphia, PA
Figures are as of 6/30/2012 & 6/30/2017
Southeastern PA -- Chester, Delaware & Montgomery Counties
2017 2012 Change
Market Share (1) 1.86% 0.24% +1.62%
Loans (2) $1.29B $442M +192%
Deposits (2) $1.19B $323M +268%
Locations (3) 29 9 +20
Households (2) 18,157 5,976 +204%
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 Management
16
Deposits of Traditional Banks in Chester, Delaware and Montgomery Counties in Pennsylvania
June 30, 2017*
Rank
Institution
Branch
Count
Total
Deposits in
Market
Total
Market
Share
‘16-’17
Growth
‘16-’17
Growth
CAGR
‘08-’17
1 Wells Fargo Bank 80 $10,975,086 19.29% $977,060 9.77% 6.53%
2 TD Bank 46 $7,785,744 13.68% $1,228,494 18.73% 5.37%
3 Citizens Bank of Pennsylvania 79 $7,053,405 12.40% $336,862 5.02% 4.10%
4 PNC Bank 44 $5,475,217 9.62% $325,942 6.33% 7.38%
5 BB&T 52 $3,071,174 5.40% ($257,602) -7.74% 9.64%
6 The Bryn Mawr Trust Company 32 $2,573,802 4.52% $261,527 11.31% 14.57%
7 Bank of America 24 $2,418,975 4.25% $99,042 4.27% 14.28%
8 Univest Bank and Trust 21 $1,982,274 3.48% $499,927 33.73% 6.86%
9 Santander Bank 37 $1,900,321 3.34% $39,228 2.11% 0.84%
10 Key Bank 32 $1,808,369 3.18% ($71,783) -3.82% 0.41%
14 WSFS Financial Corp (1) 24 $1,055,688 1.86% ($90,006) -7.86% 28.41%
Other banks 171 $10,801,499 18.98% $332,913 3.18% -1.91%
Total of the 3 Counties 642 $56,901,554 100.00% $3,681,604 6.92% 4.21%
The WSFS Franchise – PA Expansion
(1) $90 million deposit reduction figure includes $29MM of expected deposit attrition from the Penn Liberty acquisition, $31MM of high-cost
CD attrition from the Alliance acquisition and $39MM of customer deposits that were atypically high at 6/30/16
The WSFS Franchise - Attractive Markets
17 Sources: SNL Financial, U.S. Census Bureau, Zillow
Note: No Zillow Home Value Index was available for Sussex County; information shown details median listing price in Sussex County, DE.
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
Sussex Kent New Castle Delaware Chester Montgomery
Population
Delaware Southeastern PA
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
Sussex Kent New Castle Delaware Chester Montgomery
Median Household Income
National Average
Delaware Southeastern PA
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
Sussex Kent New Castle Delaware Chester Montgomery
Median Home Value
National Average
Delaware Southeastern PA
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
Sussex Kent New Castle Delaware Chester Montgomery
Number of Businesses
Delaware Southeastern PA
Regional Employment Composition
Philadelphia-Camden-Wilmington MSA
18 Chart Data Source: Bureau of Labor Statistics: Employees on nonfarm payrolls by industry supersector, Philadelphia-Camden-Wilmington MSA, not seasonally adjusted; July 2017
(1) Unemployment rate is for the State of Delaware, Chester County PA, Delaware County PA, & Montgomery County PA (equally weighted). Unadjusted November 2017.
Diversity of industries drives stable & favorable employment in our markets
Unemployment of 3.7%(1)
Mining, logging,
and construction
4% Manufacturing
6%
Trade, Transportation
& Utilities
18%
Information
2%
Financial activities
7%
Professional &
Business Services
16%
Education &
Health Services
21%
Leisure and hospitality
10%
Other services
4%
Government
11%
$32 $33 $33 $36
$40
$46
$19
$24 $26
$30
$36
$43
$14
$16
$18
$23
$27
$36
33%
35% 34%
35%
34%
36%
$0
$20
$40
$60
$80
$100
$120
2012 2013 2014 2015 2016 2017
To
ta
l Co
re
(
1
)
Fee
in
com
e
$
in
Mi
ll
io
n
s
Trust & Wealth
Cash Connect
Bank Segment
WSFS Strategic Plan goal of fee (non-interest) income to total revenue of 40% by 4Q 2018
The WSFS Franchise – Diversified & Robust Fee Income
19
%’s represent fee (non-interest) income / total revenue
(1) These are non-GAAP financial measures and should be considered along with results prepared in accordance with GAAP, and not as a substitute for GAAP results. See
Appendix 3 for reconciliation to GAAP financial information.
5 Year CAGR
Trust & Wealth: 21%
Cash Connect: 18%
Bank: 8%
The WSFS Franchise – WSFS Wealth
A Full-Service Wealth Management Offering
20
Net Revenue of $50.2 million in 2017;
Pre-tax profit of $15.9 million
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 managed services
• Operates 440 ATMs for WSFS Bank; largest in-market ATM franchise
• $36.6 million in net revenue (fee income less funding costs) and
$7.5 million in pre-tax profitability in 2017
• 5 year CAGR for net revenue is 15%
• Also serves as an innovation center for the company, both
expanding core ATM offerings and additional payment-, processing-
and software-related activities; e.g., launched WSFS Mobile Cash –
allows Customers to securely withdraw cash from ATMs by using
their WSFS Mobile Banking App
• Growing smart safe pipeline generated by several national channel
partners that are actively marketing our program, in addition to
1,599 smart safes as of 12/31/17, up from just over 100 safes at the
end of 2015
21
Embracing Innovation as a Catalyst for Growth
22
Selected Financial Information
Cash
Connect
9%
Investments
15%
BOLI 1%
Non-
Earning
Assets 6%
Net Loans
69%
The WSFS Franchise - WSFS Bank
Assets $7.0 Billion; Net Loans $4.8 Billion
Asset Composition – December 31, 2017
6%
12%
6%
52%
24%
CRE
C&I
Residential
Mortgages
Consumer
Construction
• Commercial loans
comprise 82% of the
loan portfolio
• C&I (including owner-
occupied real estate),
the largest component,
makes up 52% of the
loan portfolio
24
Total Funding – $6.9 Billion; Customer Deposits- $4.9 Billion
Funding Composition – December 31, 2017
Other
Liabilities
1%
Wholesale
Deposits
3%
Borrowings
13%
[CATEGOR
Y NAME]
11%
Customer
Deposits
72%
Non-
interest
DDA 28%
Interest
DDA 21%
Money
Market
&
Savings
38%
Time
13%
• Core deposits represent
87% of total customer
deposits and non-interest
and very low interest
DDA (WAC 30bps) stand
at 49% of customer
funding
25
The WSFS Franchise - WSFS Bank
The WSFS Franchise - Balanced Growth
26
Balance sheet composition has remained steady as WSFS has grown
53%
52%
24%
24%
9%
6%
10%
12%
4%
6%
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
December 31, 2013 December 31, 2017
Loan Composition
C&I CRE
Residential Mortgage Consumer
Construction
9%
10%
25%
18%
14%
20%
14%
15%
28%
27%
10%
9%
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
December 31, 2013 December 31, 2017
Funding Composition
Equity Borrowings & Other
Non-Interest DDA Interest DDA
Money Market & Savings Time
Well Positioned for Rising Rates
As of 12/31/17 (WSJ Prime @ 4.50%)
BPS Change(1)
NII
% Impact
NII
$ 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-interest bearing and low-interest DDA: 49%
• Solid brand and position / WSFS is a market “price leader”
(1) WSFS IRR model estimates: Static Balance Sheet / Instantaneous Rate Shocks 27
0.84%
0.20%
0.70%
1.20%
1.70%
2.20%
1Q
13
2Q
13
3Q
13
4Q
13
1Q
14
2Q
14
3Q
14
4Q
14
1Q
15
2Q
15
3Q
15
4Q
15
1Q
16
2Q
16
3Q
16
4Q
16
1Q
17
2Q
17
3Q
17
4Q
17
Overall Credit Trends Remain Strong
0.53%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1.40%
1.60%
1.80%
2.00%
1Q
13
2Q
13
3Q
13
4Q
13
1Q
14
2Q
14
3Q
14
4Q
14
1Q
15
2Q
15
3Q
15
4Q
15
1Q
16
2Q
16
3Q
16
4Q
16
1Q
17
2Q
17
3Q
17
4Q
17
Delinquencies Large Relationship (3)
Delinquencies (2) / Gross Loans
Weighted Average Risk Rating (1)
(1) 10 point scale; 1 is substantially risk-free, 10 is a loss. Figures are based on loan outstandings. High point of 5.53 represents the high point since WSFS converted to a 10 point scale in 1Q12.
(2) Includes non-accruing loans
(3) One large $15.4 million, highly-seasonal relationship that was exited in 3Q 2016
28
4.95
4.00
4.20
4.40
4.60
4.80
5.00
5.20
5.40
5.60
5.80
6.00
1Q
13
2Q
13
3Q
13
4Q
13
1Q
14
2Q
14
3Q
14
4Q
14
1Q
15
2Q
15
3Q
15
4Q
15
1Q
16
2Q
16
3Q
16
4Q
16
1Q
17
2Q
17
3Q
17
4Q
17
15.73%
21.34%
10%
15%
20%
25%
30%
35%
40%
45%
50%
1Q
13
2Q
13
3Q
13
4Q
13
1Q
14
2Q
14
3Q
14
4Q
14
1Q
15
2Q
15
3Q
15
4Q
15
1Q
16
2Q
16
3Q
16
4Q
16
1Q
17
2Q
17
3Q
17
4Q
17
Classified Loans Criticized Loans
Criticized & Classified Loans / Tier-1 + ALLL
NPAs / Total Assets
High point during
the cycle of 3.03%
in 1Q12
High point during
the cycle of 2.61%
in 3Q09
High point during
the cycle of 5.53 in
1Q12
High point during the cycle
of:
Criticized: 105.6% in 1Q10
Classified: 70.5% in 3Q09
Other Services (except
Public Administration)
12%
Accommodation and
Food Services
12%
Retail Trade
10%
Construction
9%
Manufacturing
9%
Health Care and Social
Assistance
8%
Real Estate Rental and
Leasing
8%
Wholesale Trade
6%
Other (13)
26%
C&I & Owner Occupied CRE
Loan Portfolio Composition
Outstanding Balances as of 12/31/17
29
No industry or CRE concentrations in the loan portfolio
Commercial & Industrial: $1.45 billion
Owner Occupied CRE: $1.09billion
Top 25 Relationships ($): $536 million
Top 25 Relationships (% of C&I/OOCRE portfolio): 21%
Top 25 Relationships (% of commercial loans): 14%
Non Owner Occupied CRE $1.19 billion
Construction $282 million
Top 25 Relationships ($): $567 million
Top 25 Relationships (% of CRE portfolio): 39%
Top 25 Relationships (% of commercial loans): 15%
Mixed Use
3%
Flex, Warehouse, Self-
Storage, General
Industrial
10%
Office
19%
Retail
28%
Residential 1-4
18%
Residential Multi-
Family
14%
Special Use & Other
9%
CRE Investor & Construction
12/12 12/13 12/14 12/15 12/16 12/17
TRBC 14.29% 14.36% 13.83% 13.11% 11.93% 12.25%
Tier-1 Capital 13.04% 13.16% 12.79% 12.31% 11.19% 11.53%
Excess RBC (above 10%) $140,117 $153,542 $147,186 $146,788 $66,939 $129,499
TCE(1) 7.72% 7.69% 9.00% 8.84% 7.55% 8.01%
TBV/Share $12.74 $12.89 $15.30 $16.30 $15.80 $17.35
Robust Capital to Grow and to Return to Shareholders
$300,000
$350,000
$400,000
$450,000
$500,000
$550,000
$600,000
$650,000
$700,000
12/12 12/13 12/14 12/15 12/16 12/17
Total Risk-Based Capital Well Capitalized Requirement
Total Risk Based Capital (TRBC) 000’s
30 (1) Holding Company ratio. This is a non-GAAP financial measure and should be considered along with results prepared in accordance with GAAP, and not as a substitute for
GAAP results. See Appendix 3 for reconciliation to GAAP financial information.
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 51,000 shares of common stock at an average price
of $49.76 as part of our 5% buyback program approved by the Board of Directors
in 4Q 2015
• 699,194 shares remaining to purchase under the current authorization
• $37.3 million in cash remains in the Holding Company as of 12/31/17
• The Board of Directors approved a dividend of $0.09 per share of common stock.
This will be paid on 2/22/18 to shareholders of record on 2/8/18
(1) As defined in our most recent proxy statement, as adjusted for unvested stock options approved by shareholders and awarded to the CEO and EVPs
in April 2013.
31
UPDATE
32
32
WSFS
Nasdaq
Bank
1 3.9% 5.4%
3 90.6% 58.1%
5 252.2% 134.9%
10 216.2% 87.1%
77th
65%
December 29, 2017
December 31, 2017
[Update with top
pick 2018
comment]
32
Appendices
Appendix 1 – Management Team
34
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 experience includes working at CoreStates Bank and Meridian Bancorp. Mr. Turner
started his career at the international professional services firm of KPMG, LLP. He received his MBA from the Wharton
School of the University of Pennsylvania, his Master’s Degree in Executive Leadership from the University of Nebraska
and his Bachelor’s Degree in Accounting and Management from LaSalle University.
Rodger Levenson, 56, Executive Vice President and Chief Operating Officer since July 2017. Mr. Levenson was
previously the Chief Commercial Banking Officer from 2006 to 2015, interim Chief Financial Officer from March 2015
to May 2016 and Chief Corporate Development Officer from May 2016 to July 2017. From 2003 to 2006, Mr. Levenson
was Senior Vice President and Manager of the Specialized Banking and Business Banking Divisions of Citizens
Bank. Mr. Levenson received his MBA in Finance from Drexel University and his Bachelor’s Degree in Finance from
Temple University.
Dominic C. Canuso, CFA, 43, joined WSFS in 2016 as Executive Vice President and Chief Financial Officer. From 2006 to
2016, he was Finance Director at Barclays’ US Credit Card Business, most recently serving as Line of Business
CFO. Prior to Barclays, he was at Advanta Bank and Arthur Andersen Consulting. Mr. Canuso received his Executive
MBA and Bachelor’s Degree from Villanova University.
Steve Clark, 60, joined WSFS Bank in 2002 and has served as Executive Vice President and Chief Commercial Banking
Officer since May 2016. From 2002 thru 2006, Mr. Clark led and managed the establishment of the Middle Market
lending unit, and in 2007 became Division Manager of the Business Banking and Middle Market Divisions. Prior to
2002, he spent 23 years in various commercial banking positions at PNC Bank and its predecessor companies. Mr.
Clark received his MBA in Finance from Widener University and his Bachelor’s Degree in Business Administration
(Marketing) from the University of Delaware.
Peggy H. Eddens, 62, 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 Management from La Roche College and her Bachelor’s Degree in
Business Administration with minors in Management and Psychology from Robert Morris University.
Paul D. Geraghty, 64, Executive Vice President and Chief Wealth Officer since 2011. From 2007 to 2010, he was Chief
Executive Officer at Harleysville National Corporation, Harleysville, PA. Mr. Geraghty received his Bachelor’s Degree in
Accounting from Villanova University and pursued graduate study in business at Lehigh University.
Appendix 1 – Management Team
35
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 oversees all independent Risk Management functions including, Credit Risk Management, Real
Estate Services, Asset Recovery, Enterprise Risk Management, Legal, Internal Audit, Loan Review and Regulatory
Compliance. Mr. Greenplate graduated from the University of Delaware with a Bachelor’s Degree in Economics.
Thomas W. Kearney, 70, Executive Vice President and Chief Risk Officer emeritus 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 Certified Bank Auditor (CBA) and Certified Financial Services Auditor
(CFSA).
S. James Mazarakis, 60, Executive Vice President and Chief Technology Officer since 2010. Mr. Mazarakis served in a
senior leadership role as Chief Information Officer for T. Rowe Price, and Managing Director and Divisional CIO at JP
Morgan Investment Asset Management. He received his Master’s Degree in Management of Technology from
Polytechnic Institute of New York University.
Thomas Stevenson, 64, has served as President of Cash Connect Division since 2003. Mr. Stevenson joined WSFS in
1996 as Executive Vice President and Chief Information Officer. Prior to joining WSFS, Mr. Stevenson was the
Manager of Quality Assurance at Electronic Payment Services. Mr. Stevenson attended Wayne State University and
the Banking and Financial Services program at the University of Michigan’s Graduate School of Business
Administration.
Patrick J. Ward, 61, joined WSFS in August 2016 as Executive Vice President, Pennsylvania Market President. He also
serves on the Board of Directors of WSFS Financial Corporation. Mr. Ward has over 32 years of banking industry
experience and previously served as Chairman and CEO of Penn Liberty Bank. He was an EVP of Citizens Bank of
Pennsylvania from January 2003 until January 2004. Prior thereto, Mr. Ward served as President and CEO of
Commonwealth Bancorp, Inc., the holding company for Commonwealth Bank, until its acquisition by Citizens Bank in
January 2003. Mr. Ward is a graduate of Carnegie Mellon University with a Bachelor’s Degree in Economics and
earned an MBA from the University of Notre Dame.
Richard M. Wright, 65, Executive Vice President and Chief Retail Banking Officer since 2006. From 2003 to 2006, Mr.
Wright was Executive Vice President, Retail Banking and Marketing for DNB First in Downingtown, PA. Mr. Wright
received his MBA in Management Decision Systems from the University of Southern California and his Bachelor’s
Degree in Marketing and Economics from California State University.
Appendix 2 – Business Model
36
Appendix 3 – Non-GAAP Financial Information
Tangible common equity to assets and Tangible common book value per share
37
3 Months Ended 3 Months Ended 3 Months Ended
December 31, 2017 September 30, 2017 December 31, 2016
Total Assets $6,997,020 $6,875,344 $6,765,270
Less: Goodwill and other intangible assets $188,444 $189,116 $191,247
Total Tangible Assets $6,808,576 $6,686,228 $6,574,023
Total Stockholders Equity $733,652 $740,861 $687,336
Less: Goodwill and other intangible assets $188,444 $189,116 $191,247
Total Tangible Common Equity (non-GAAP) $545,208 $551,745 $496,089
Calculation of Tangible Common Book Value Per Share
Book Value per Share (GAAP) $23.35 $23.59 $21.90
Tangible Common Book Value Per Share (non-GAAP) $17.35 $17.57 $15.80
Calculation of Tangible Common Equity to Assets
Equity to Asset Ratio (GAAP) 10.49% 10.78% 10.16%
Tangible Common Equity to Asset Ratio (non-GAAP) 8.01% 8.25% 7.55%
Appendix 3 – Non-GAAP Financial Information
Core: GAAP Reconciliation
38 (1) Net Interest Income plus Core Non-interest Income. (2) Noninterest expense divided by (tax-equivalent) net interest income plus noninterest income . (3) Core noninterest expense
divided by (tax-equivalent) net interest income plus core non interest income. (4) Non interest income divided by (tax equivalent) net interest income and non interest income. (5)
Core non interest income divided by (tax equivalent) net interest income and core non interest income
Net Income EPS Net Income EPS
Reported (GAAP) (525)$ (0.02)$ (0.03) % 59,551$ 1.84$ 0.87 %
Pre-tax adjustments
Securities gains (220) (0.01) (0.01) (1,984) (0.06) (0.03)
Early extinguishment of debt - - - 695 0.02 0.01
Corporate development 21 0.00 0.00 878 0.03 0.01
Fraud Loss 2,844 0.09 0.16 2,844 0.09 0.04
WSFS Foundation Contribution 1,500 0.05 0.09 1,500 0.05 0.02
Subtotal - pretax adjustments 4,145 0.13 0.24 3,933 0.12 0.06
Tax Adjustments
DTA revaluation 12,820 0.40 0.73 12,820 0.40 0.19
BOLI surrender 7,952 0.25 0.46 7,952 0.25 0.12
Subtotal - tax adjustments 20,772 0.64 1.19 20,772 0.64 0.30
Tax impact of pretax adjustments
Securities gains 78 0.00 0.00 704 0.02 0.01
Early extinguishment of debt - - - (249) (0.01) (0.00)
C rporate development (8) (0.00) (0.00) (315) (0.01) (0.00)
Fraud Loss (1,018) (0.03) (0.06) (1,018) (0.03) (0.01)
WSFS Foundation Contribution (537) (0.02) (0.03) (537) (0.02) (0.01)
Subtotal - pretax adjustments (1,485) (0.04) (0.09) (1,415) (0.04) (0.02)
Core (non-GAAP) 22,907$ 0.71$ 1.31 % 82,841$ 2.56$ 1.21 %
ROA
For the year ended
December 31, 2017
ROA
3 months ended
December 31, 2017
Appendix 3 – Non-GAAP Financial Information
Core: GAAP Reconciliation
39 (1) Net Interest Income plus Core Non-interest Income. (2) Noninterest expense divided by (tax-equivalent) net interest income plus noninterest income . (3) Core noninterest expense
divided by (tax-equivalent) net interest income plus core non interest income. (4) Non interest income divided by (tax equivalent) net interest income and non interest income. (5)
Core non interest income divided by (tax equivalent) net interest income and core non interest income
3 Months Ended
December 31, 2017
Core Net Income (non-GAAP) $22,907
Plus: Tax effected amortization of intangible assets $461
Core net tangible income (non-GAAP) $23,368
Net average tangible common equity $563,116
Core return on average tangible common equity ("Core ROTCE") (non-GAAP) 16.46%
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 Income $57,725 $56,129 $52,954 $221,271 $193,745
Noninterest Inc (as reported) $32,435 $32,441 $28,299 $124,644 $105,061
Adj: Securities Gains ($220) ($736) ($479) ($1,984) ($2,369)
Core Non-interest Income $32,215 $31,705 $27,820 $122,660 $102,692
Core Net Revenue (1) $89,940 $87,834 $80,774 $343,931 $296,437
Tax equivalized interest (as reported) $748 $793 $721 $2,991 $2,970
Noninterest Expense (GAAP) $56,065 $54,163 $48,949 $214,461 $188,666
Adj: Corporate Development ($21) ($153) ($1,526) ($878) ($8,529)
Adj: Debt Extinguishment Costs - ($695) - ($695) -
Adj: Fraud Loss ($2,844) - - ($2,844) -
Adj: Contribution ($1,500) - - ($1,500) -
Core Noninterest Expense $51,700 $53,315 $47,423 $208,544 $180,137
Efficiency Ratio (Reported) (2) 61.7% 60.6% 59.7% 61.5% 62.5%
Core Efficiency Ratio (3) 57.0% 60.2% 58.2% 60.1% 60.2%
Pre-tax Pre-Provision Net Revenue $34,095 $34,407 $32,304 $131,454 $110,140
Core Pre-tax Pre-Provision Net Revenue $38,240 $34,519 $33,351 $135,387 $116,300
Fee Income / Total Revenue (4) 35.7% 36.3% 34.5% 35.7% 34.8%
Core Fee Income / Total Revenue (5) 35.5% 35.8% 34.1% 35.4% 34.3%
Appendix 3 – Non-GAAP Financial Information
Core & Sustainable ROA: GAAP Reconciliation
40
4Q17 3Q17 2Q17 1Q17 4Q16 3Q16 2Q16 1Q16 4Q15 3Q15 2Q15 1Q15 4Q14 3Q14 2Q14 1Q14 4Q13 3Q13 2Q13 1Q13 4Q12
Reported (GAAP) ROA (0.03) 1.20 1.23 1.12 1.08 0.82 1.23 1.13 1.03 1.14 0.98 1.06 1.07 0.99 1.12 1.52 1.09 1.29 1.00 0.91 0.70
Non-recurring PCI accretion (0.07)
Long-term credit
normalization
0.04 0.01 (0.03) (0.02) 0.10 0.14 (0.05) (0.05) 0.00 (0.04) 0.10 (0.07) (0.11) (0.12) (0.13) 0.01 (0.04) (0.03) (0.03) (0.11) 0.08
Securities Gains (0.01) (0.02) (0.03) (0.01) (0.02) (0.04) (0.03) (0.01) (0.02) (0.01) (0.02) (0.03) 0.00 0.00 (0.02) (0.03) (0.04) (0.02) (0.05) (0.10) (0.22)
SASCO write up (0.22)
Corporate Development
expense
0.00 0.01 0.02 0.01 0.06 0.27 0.03 0.02 0.27 0.05 0.05 0.03 0.06 0.15 0.01 0.02 0.03
Debt Extinguishment 0.02 0.03 0.22
FHLB Dividend (0.05)
Fraud Loss 0.10
Contribution 0.05
Tax Normalization 1.16 0.00 (0.02) (0.06) (0.02) 0.00 (0.04) 0.01 0.00 0.02 0.00 0.04 (0.04) (0.02) (0.01) (0.62) (0.03)
Core & Sustainable ROA 1.31 1.22 1.17 1.04 1.20 1.19 1.14 1.10 1.24 1.16 1.11 0.98 0.98 1.00 0.97 0.90 1.04 0.99 0.92 0.70 0.78
FY17 FY16 FY15 FY14 FY13 FY12
Reported (GAAP) ROA 0.87 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) (0.03) (0.02) (0.01) (0.05) (0.33)
SASCO write up (0.06)
Corporate Development expense 0.01 0.09 0.10 0.06 0.01
Debt Extinguishment 0.01 0.01 0.06
FHLB Dividend (0.01)
BOLI (0.02)
Fraud Loss 0.03
Contribution 0.02
Tax Normalization 0.27 (0.01) 0.02 (0.18) (0.01) 0.00
Core & Sustainable ROA 1.19 1.15 1.13 0.95 0.91 0.77
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