Market Overview

WSFS Reports 2Q 2015 EPS of $0.43; Core Net Revenue Grew 16% Annualized; and Loans Grew 13% Annualized Over 1Q 2015

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WILMINGTON, Del., July 23, 2015 (GLOBE NEWSWIRE) -- WSFS Financial Corporation (Nasdaq: WSFS), the parent company of WSFS Bank, reported net income of $12.2 million, or $0.43 per diluted common share for the second quarter of 2015 compared to net income of $12.7 million, or $0.46 per share for the second quarter of 2014 and net income of $12.9 million, or $0.45 per share for the first quarter of 2015.

Net income for the first six months of 2015 was $25.1 million, or $0.88 per diluted common share, as compared to $29.6 million, or $1.08 per share for the same period of 2014.  Results for 2014 include a one-time tax benefit of $6.7 million, or $0.24 per share.

Highlights for the second quarter of 2015:

  • Core(n) net revenue (excluding securities gains and a special FHLB dividend) increased $2.4 million, or 4% (not annualized), from the first quarter of 2015, and 12% from the second quarter of 2014, reflecting strong organic growth.  
  • Net revenue growth included an increase in core(n) fee income of $1.3 million, or 6% (not annualized), from the first quarter of 2015, from organic growth and seasonal increases.
  • Expenses declined slightly from the first quarter of 2015, and along with the robust revenue increases mentioned above, this resulted in significantly improved operating leverage, efficiency and pre-tax, pre-provision net revenue.
  • Net loans increased at more than a 13% annualized rate over the first quarter of 2015, including a 16% annualized increase in commercial loans.
  • Core deposits increased at a 9% annualized rate over the first quarter of 2015, reflecting continued strong growth in our customer relationships.

Notable items:

  • WSFS recorded $686,000 (pre-tax) or $0.02 per share (after-tax) in expenses related to corporate development activities during the second quarter of 2015, primarily related to the pending Alliance Bancorp acquisition.
  • WSFS realized $477,000, or $0.01 per share, in net gains on securities sales from its investment portfolio. 
  •  A $9.1 million substandard loan and troubled debt restructuring (TDR) was placed on nonaccrual status during the second quarter of 2015. This event added $3.6 million in incremental loan loss provision in the second quarter, or an $0.08 per share negative impact. 

CEO outlook and commentary:

Mark A. Turner, President and CEO, said, "Despite a one-off credit setback, our second quarter results reflect solid fundamental performance.  We continue to see increases in net interest income driven by good growth in our loan portfolio. We have also seen strong growth in our fee income driven by bank-related businesses of Cash Connect, Wealth Management and mortgage banking.  Expenses were well managed and broad loan portfolio credit quality statistics showed improvement.

"Additionally our continued focus on innovation, growth and serving our Customers was demonstrated in the quarter as we announced several new digital products and services. These services include WSFS Mobile Cash, our cardless ATM access, WSFS Everyday PaySM, WSFS Business Mobile Banking and our strategic alliance with ZenBanx to provide mobile, multi-currency deposit accounts, and are responsive to Customers' and market needs.  

"We have made steady progress towards, and remain committed to achieving our strategic plan goals, including a core and sustainable 1.20% ROA by the end of the fourth quarter of 2015."

Second Quarter 2015 Discussion of Financial Results

Continued solid growth in net interest income

Net interest income for the second quarter of 2015 was $39.1 million, a $273,000, or 1% (not annualized), increase from the first quarter of 2015 while the net interest margin was 3.71%.  The first quarter of 2015 included a special $808,000 FHLB dividend which added 8 basis points (bps) to the margin that quarter.  Excluding this special dividend, net interest income increased $1.1 million, or 3% (not annualized) compared to the first quarter of 2015, primarily due to sizable loan growth; and the net interest margin decreased 3 bps as a result of the continued interest rate environment and competitive pricing pressures.

Compared to the second quarter of 2014, net interest income increased $3.6 million, or 10%, while the net interest margin increased 7 bps.  These substantial year-over-year increases were primarily due to loan growth from both successful acquisition and organic growth.

Broad-based loan growth accelerates

At June 30, 2015, WSFS' net loan portfolio increased $107.5 million, or 3% (not annualized), to $3.34 billion when compared to March 31, 2015.  This quarter's increase came entirely from organic growth and was spread across almost all loan categories, with noteworthy growth in the commercial real estate ($48.8 million) and construction ($48.4 million) portfolios.

Compared to the second quarter of 2014, net loans increased $315.0 million, or 10%, despite a competitive market and the impact of paydowns/payoffs of problem loans over the past year as the economy has improved.  This growth was achieved through organic growth and $176.0 million in loans from the September 2014 First National Bank of Wyoming (FNBW) acquisition. 

The following table summarizes loan balances and composition at June 30, 2015 compared to prior periods:

   At  At  At 
(Dollars in Thousands)June 30, 2015  March 31, 2015  June 30,2014 
Commercial & industrial$  1,728,457    52%  $  1,719,233    53%  $  1,634,362    54% 
Commercial real estate   864,053    25      815,287    25      756,815    25  
Construction   200,328    6      151,945    5      118,222    4  
 Total commercial loans   2,792,838    83      2,686,465    83      2,509,399    83  
Residential mortgage   261,703    8     263,911    8     247,147    8  
Consumer   329,874    10      325,160    10     313,384    10  
Allowance for loan losses   (40,845)   (1)    (39,507)   (1)    (41,381)   (1) 
 Net Loans$  3,343,570    100%  $  3,236,029    100%  $  3,028,549    100% 

Credit quality remains strong despite one problem loan

Credit quality remained strong during the second quarter of 2015 despite the impact of one $9.1 million Commercial & Industrial (C&I) problem loan relationship previously classified as substandard and accruing TDR, which was moved to nonaccruing status during the second quarter of 2015. 

Total nonperforming assets were $46.2 million at June 30, 2015, a $3.1 million, or 6% (not annualized), improvement from March 31, 2015 and delinquencies improved 26% (not annualized), to a low 0.48% of gross loans at June 30, 2015 (this ratio includes nonperforming delinquencies).  Classified loans declined and the ratio of total classified loans to Tier 1 capital plus allowance for loan losses (ALLL) also improved to 18.33% from 21.14% at March 31, 2015 and 30.60% at June 30, 2014.

Net charge-offs for the second quarter of 2015 were $2.5 million, or 0.29% of total net loans on an annualized basis (including $1.9 million relating to the nonaccruing C&I relationship mentioned above).  Total credit costs (provision for loan losses, loan workout expenses, OREO expenses and other credit reserves) were $4.0 million during the quarter ended June 30, 2015 (including the $3.6 million for the nonaccruing C&I relationship mentioned above), an increase from $883,000 in the previous quarter and $627,000 in the second quarter of 2014. 

The ALLL grew to $40.8 million at June 30, 2015 from $39.5 million in the first quarter of 2015, reflecting broadly improved portfolio statistics offset by growth in the loan portfolio as well as the expected loss on the additional nonaccruing loan.  The ratio of the ALLL to total gross loans remained flat at 1.22% at June 30, 2015 compared to March 31, 2015 and is a healthy 147% of nonaccruing loans.

Total customer funding reflects continued strength in relationship accounts

Total customer funding increased $14.4 million from March 31, 2015.  This was mainly due to a $65.1 million, or 9% (annualized), increase in core deposits which was partially offset by a decrease of $50.9 million in time deposits. The decrease in time deposits was generally the result of allowing older, higher-rate CDs to run-off as a part of net interest margin management.

Total customer funding increased by $387.0 million, or 13%, from June 30, 2014 to $3.36 billion at June 30, 2015.  The increase was driven by a $418.4 million, or 17%, increase in core deposits which was partially offset by a $28.4 million decrease in time deposits, as discussed above. Included in the year-over-year growth was $228.8 million in total customer funding from the September 2014 FNBW acquisition. 

Core deposits now represent a robust 87% of total customer funding, and no-cost and low-cost relationship checking deposit accounts represent a strong 47% of total customer funding.

The following table summarizes customer funding balances and composition at June 30, 2015 compared to prior periods:

    At  At  At 
(Dollars in thousands) June 30, 2015  March 31, 2015  June 30, 2014 
                     
Noninterest demand $ 875,955   26% $ 837,416   25% $ 709,186   24%
Interest-bearing demand   697,365   21    699,312   21    643,061   22 
Savings   419,864   13    418,004   12    401,049   13 
Money market   926,583   27    899,917   27    748,099   25 
 Total core deposits   2,919,767   87    2,854,649   85    2,501,395   84 
Customer time   423,066   12    474,003   14    451,475   15 
 Total customer deposits   3,342,833   99    3,328,652   99    2,952,870   99 
Customer sweep accounts   14,433   1    14,257   1    17,384   1 
 Total customer funding$ 3,357,266   100% $ 3,342,909   100% $ 2,970,254   100%

Fee income reflects strong growth over prior quarter

Fee income (noninterest income) increased by $1.3 million, or 6% (not annualized), to $22.5 million compared to the first quarter of 2015. The increase included increases in investment management and fiduciary revenue of $614,000 and credit/debit card and ATM income of $435,000.  The overall increase from the prior quarter is attributable to organic growth and typical seasonality in fees.

When compared to the same period a year ago, fee income (noninterest income) increased $2.8 million, or 14%. This was the result of growth in both banking and banking-related businesses and included increases in investment management and fiduciary revenue of $1.4 million, mortgage banking activities of $565,000 and credit/debit card and ATM income of $452,000.

Fee income is now a robust 36% of total revenue and is well diversified among various sources: traditional banking, mortgage banking, wealth management and ATM services (Cash Connect).

Noninterest expense reflects ongoing expense management

Noninterest expense for the second quarter of 2015 was $38.7 million, a decrease of $259,000 from $38.9 million in the first quarter of 2015.  The decrease was primarily due to a $665,000 decrease in salaries, benefits and other compensation from good expense management and the first quarter has typical seasonal increases for higher employer costs such as higher vacation accrual costs, 401(k) matching costs and certain employer-paid taxes. Marketing expense increased during the second quarter of 2015 to support growth and the introduction of the aforementioned new products and services.

When compared to the second quarter of 2014, noninterest expense increased $3.4 million. Excluding notable items in both periods,(n) noninterest expense increased $2.9 million, or 8%.  The increase was primarily to support robust organic growth and the September 2014 acquisition of FNBW.

Selected Business Segments (included in previous results): 

Wealth Management segment fee revenue grew by 30% over the prior year

The Wealth Management segment provides a broad array of fiduciary, investment management, credit and deposit products to clients through four businesses. WSFS Wealth Investments provides insurance and brokerage products primarily to our retail banking clients.  Cypress Capital Management, LLC is a registered investment advisor with approximately $655 million in assets under management (AUM). Cypress' primary market segment is high net worth individuals, offering a ‘balanced' investment style focused on preservation of capital and providing for current income.  Christiana Trust, with $8.86 billion in assets under management and administration, provides fiduciary and investment services to personal trust clients, and trustee, agency, bankruptcy, custodial and commercial domicile services to corporate and institutional clients.  WSFS Private Banking serves high net worth clients by delivering credit and deposit products and partnering with other business units to deliver investment management and fiduciary products and services.

Total Wealth Management revenue (net interest income, investment management and fiduciary revenue and other fee income) was $9.0 million during the second quarter of 2015.  This represented an increase of $1.7 million, or 24% compared to the second quarter of 2014 and an increase of $803,000, or 10% (not annualized), compared to the first quarter of 2015.  Included in this increase, fee revenue increased $1.4 million, or 30%, compared to the second quarter of 2014 and $638,000, or 12% (not annualized), compared to the first quarter of 2015.  The year-over-year and quarterly growth reflects the continued expansion of several Wealth business lines, with particular strength in corporate bankruptcy and securitization trustee appointments and retail brokerage services. 

Total segment noninterest expense (including intercompany allocations of expense and provision for loan losses and credit costs) was $5.9 million during the second quarter of 2015 compared to $4.4 million during the second quarter of 2014 and $4.9 million during the first quarter of 2015.  The second quarter of 2015 noninterest expenses were impacted by legal and consulting fees and seasonal client tax return preparation costs totaling $680,000.  Excluding these fees in each year, noninterest expense increased $903,000 compared to the second quarter of 2014 and $41,000 from the first quarter of 2015.  These year-over-year increases are primarily due to higher legal, consulting and compensation costs necessary to support the robust growth and volume-related commissions and transaction charges. 

Pre-tax income for the Wealth Management segment in the second quarter of 2015 was $3.1 million compared to $2.8 million in the second quarter of 2014 and $3.3 million in the first quarter of 2015.  Excluding the legal fees and seasonal tax expenses discussed above in each year, pre-tax income for the second quarter of 2015 was $3.7 million compared to $3.1 million in the second quarter of 2014 and $3.3 million in the first quarter of 2015. 

Cash Connect results reflect meaningful growth over 2014

The Cash Connect® segment is a premier provider of ATM vault cash and related services in the United States.  Cash Connect® services over $557 million in vault cash in over 15,900 non-bank ATMs nationwide and also operates approximately 450 ATMs for WSFS Bank, which has the largest branded ATM network in Delaware. 

Cash Connect® recorded $6.9 million in net revenue (fee income less funding costs) during the second quarter of 2015, an increase of $459,000 from the $6.4 million reported in the first quarter of 2015, reflecting continued organic and seasonal growth.  Net revenue also increased $712,000, or 12%, compared to the second quarter of 2014.  Noninterest expenses (including intercompany allocations of expense) were $5.0 million during the second quarter of 2015, an increase of $42,000 compared to the first quarter of 2015 and an increase of $579,000 from the second quarter of 2014.  Cash Connect® reported pre-tax income of $1.9 million for the second quarter of 2015, compared to $1.7 million in the second quarter of 2014 and $1.6 million in the first quarter of 2015. The year-over-year results reflect continued growth in the business, offset partially by investments in new products and infrastructure to support growth.  Most recently, on June 25, 2015, Cash Connect introduced "WSFS Mobile Cash", offering security, convenience and speed in digital access to cash.  It allows customers to securely withdraw cash from ATMs by using our WSFS Mobile Banking App. WSFS is first in the region and fourth in the United States to provide this service.

Income taxes

The Company recorded a $6.9 million income tax provision in the second quarter of 2015 compared to a $7.3 million tax provision in the first quarter of 2015 and a $7.1 million tax provision in the second quarter of 2014. 

The effective tax rate was 36.0% in the second quarter of 2015, 36.2% in the first quarter of 2015 and 35.8% in the second quarter of 2014.  The slight increase in the effective tax rates for the first and second quarters of 2015 are principally due to certain nondeductible expenses associated with our pending acquisition of Alliance Bancorp.

Capital management

WSFS' total stockholders' equity decreased $5.1 million to $500.4 million at June 30, 2015 from $505.5 million at March 31, 2015, as a result of Company earnings offset by the Company's ongoing stock buyback program and a decrease in the unrealized gains on the Company's available-for-sale investment portfolio.

For the same reasons, WSFS' tangible common equity(n) decreased to $443.3 million at June 30, 2015 from $448.1 million at March 31, 2015.  WSFS' tangible common equity to asset ratio(n) decreased by 34 basis points to 8.83%.  Tangible common book value per share(n) was $15.88 at June 30, 2015, a $0.03 increase from March 31, 2015 due to the impact of the above and share repurchases discussed below.

At June 30, 2015, WSFS Bank's Tier I leverage ratio of 10.59%, Common Equity Tier 1 capital ratio of 12.60%, Tier 1 capital ratio of 12.60% and total capital ratio of 13.60%, were all substantially in excess of the "well-capitalized" regulatory benchmarks. 

During the third quarter of 2014, the WSFS Board of Directors approved a stock buyback program of up to 5% of total outstanding shares of common stock.  In the second quarter of 2015, WSFS repurchased 455,402 shares of common stock at an average price of $25.81.  WSFS has repurchased the equivalent of 839,582 shares to date under this program at an average equivalent price of $25.75 and has 569,818 shares, or approximately 2% of outstanding shares remaining to repurchase under this current authorization. 

During the first quarter of 2015, the WSFS Board of Directors also declared a three-for-one stock split in our common stock in the form of a stock dividend of two shares for each issued and outstanding share of common stock.  The stock dividend was paid on May 18, 2015 to stockholders of record as of May 4, 2015. 

Finally, the Board of Directors approved a quarterly cash dividend of $0.05 per share of common stock.  This dividend will be paid on August 21, 2015, to shareholders of record as of August 7, 2015.

Second quarter 2015 earnings release conference call

Management will conduct a conference call to review second quarter results at 1:00 p.m. Eastern Time (ET) on Friday, July 24, 2015.  Interested parties may listen to this call by dialing 1-877-312-5857.  A rebroadcast of the conference call will be available two hours after the completion of the call until August 8, 2015, by dialing 1-855-859-2056 and using Conference ID 82950073.

About WSFS Financial Corporation

WSFS Financial Corporation is a multi-billion dollar financial services company. Its primary subsidiary, WSFS Bank, is the oldest, locally-managed bank and trust company headquartered in Delaware with $5.1 billion in assets on its balance sheet and $9.5 billion in fiduciary assets, including approximately $1.2 billion in assets under management. WSFS operates from 56 offices located in Delaware (45), Pennsylvania (9), Virginia (1) and Nevada (1) and provides comprehensive financial services including commercial banking, retail banking and trust and wealth management. Other subsidiaries or divisions include Christiana Trust, WSFS Wealth Investments, Cypress Capital Management, LLC, Cash Connect®, Array Financial and Arrow Land Transfer. Serving the Delaware Valley since 1832, WSFS Bank is the seventh oldest bank in the United States continuously operating under the same name. For more information, please visit www.wsfsbank.com.

Forward-Looking Statement Disclaimer

This press release 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 the 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 man-made 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 shareholders; 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, 2014 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.



WSFS FINANCIAL CORPORATION  
FINANCIAL HIGHLIGHTS
STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data) Three months ended Six months ended 
(Unaudited)June 30, March 31, June 30, June 30, June 30, 
 2015  2015  2014  2015  2014  
Interest income: 
Interest and fees on loans$ 37,090  $  36,244   $ 33,319  $ 73,334  $ 65,521  
Interest on mortgage-backed securities  3,523     3,433     3,564    6,956    6,813  
Interest and dividends on investment securities  852     860     814    1,712    1,606  
Interest on reverse mortgage loans  1,166     1,236     1,368    2,402    2,594  
Other interest income  424     1,078     348    1,502    664  
   43,055     42,851     39,413    85,906    77,198  
Interest expense:               
Interest on deposits  1,825     1,942     1,714    3,767    3,370  
Interest on Federal Home Loan Bank advances  751     713     661    1,464    1,187  
Interest on trust preferred borrowings  339     327     330    666    656  
Interest on senior debt  941     942     941    1,883    1,883  
Interest on bonds payable  -     -     -    -    15  
Interest on other borrowings  109     110     290    219    566  
   3,965     4,034     3,936    7,999    7,677  
Net interest income  39,090     38,817     35,477    77,907    69,521  
Provision for loan losses  3,773     786     50    4,559    2,680  
Net interest income after provision for loan losses  35,317     38,031     35,427    73,348    66,841  
                
Noninterest income:               
Credit/debit card and ATM income  6,462     6,027     6,010    12,489    11,776  
Deposit service charges  4,099     3,905     4,346    8,004    8,615  
Investment management and fiduciary revenue  5,707     5,093     4,287    10,800    8,121  
Mortgage banking activities, net  1,590     1,703     1,025    3,293    1,837  
Investment securities gains, net  477     451     365    928    943  
Loan fee income  469     463     556    932    940  
Bank-owned life insurance income  179     203     143    382    282  
Other income  3,475     3,250     2,891    6,725    5,473  
   22,458     21,095     19,623    43,553    37,987  
Noninterest expense:               
Salaries, benefits and other compensation  20,345     21,010     18,668    41,355    37,142  
Occupancy expense  3,637     3,878     3,569    7,515    7,298  
Equipment expense  1,959     2,082     1,860    4,041    3,547  
Data processing and operations expense  1,459     1,422     1,531    2,881    3,002  
Professional fees  1,753     1,472     2,215    3,225    3,321  
FDIC expenses  687     669     692    1,356    1,345  
Loan workout and OREO expense  330     (1)   716    329    1,255  
Marketing expense  1,007     584     442    1,591    941  
Corporate development expense  686     596     158    1,282    412  
Other operating expenses  6,791     7,201     5,373    13,992    10,845  
   38,654     38,913     35,224    77,567    69,108  
Income before taxes  19,121     20,213     19,826    39,334    35,720  
Income tax provision  6,887     7,324     7,101    14,211    6,084  
Net income$ 12,234  $  12,889   $ 12,725  $ 25,123  $ 29,636  
Diluted earnings per share of common stock (p):               
Net income allocable to common stockholders$0.43  $  0.45   $ 0.46  $0.88  $ 1.08  
Weighted average shares of common stock outstanding for fully diluted EPS 28,604,235    28,752,987   27,429,240   28,637,499   27,419,436  
                
Performance Ratios:               
Return on average assets (a)  0.98 %  1.06 %  1.12 %  1.02 % 1.32 %
Return on average equity (a)  9.61    10.30    12.03    9.96   14.41  
Return on tangible common equity (a) (n)  11.18    12.00    13.52    11.59   16.20  
Net interest margin (a)(b)  3.71    3.82    3.64    3.76   3.61  
Efficiency ratio (c)  62.27    64.39    63.85    63.31   64.20  
Noninterest income as a percentage of total net revenue (b)  36.18    34.91    35.28    35.55   34.99  
See "Notes"               

 

WSFS FINANCIAL CORPORATION  
FINANCIAL HIGHLIGHTS (Continued)         
SUMMARY STATEMENTS OF CONDITION         
(Dollars in thousands)         
(Unaudited)June 30, March 31, June 30, 
 2015  2015  2014  
Assets:         
Cash and due from banks$ 108,928  $ 92,481  $ 107,169  
Cash in non-owned ATMs  424,238    412,958    367,870  
Investment securities (d)  149,750    157,955    149,602  
Other investments  32,357    27,854    37,737  
Mortgage-backed securities (d)  752,693    751,429    692,104  
Net loans (e)(f)(l)  3,343,570    3,236,030    3,028,549  
Reverse mortgage loans  25,945    27,035    32,543  
Bank owned life insurance  76,891    76,712    63,467  
Goodwill and intangibles  57,044    57,369    38,295  
Other assets  106,067    106,657    95,754  
Total assets$ 5,077,483  $ 4,946,480  $ 4,613,090  
          
Liabilities and Stockholders' Equity:         
Noninterest-bearing deposits$ 875,955  $ 837,416  $ 709,186  
Interest-bearing deposits  2,466,878    2,491,236    2,243,684  
Total customer deposits  3,342,833    3,328,652    2,952,870  
Brokered deposits  183,622    193,626    200,459  
Total deposits  3,526,455    3,522,278    3,153,329  
          
Federal Home Loan Bank advances  740,681    623,759    758,400  
Other borrowings  260,219    250,798    226,466  
Other liabilities  49,753    44,150    42,940  
          
Total liabilities  4,577,108    4,440,985    4,181,135  
          
Stockholders' equity  500,375    505,495    431,955  
          
Total liabilities and stockholders' equity$ 5,077,483  $ 4,946,480  $ 4,613,090  
          
          
Capital Ratios:         
Equity to asset ratio  9.85 %  10.22 %  9.36 %
Tangible common equity to asset ratio (n)  8.83    9.17    8.60  
Common equity Tier 1 capital (g) (required: 4.5%; well capitalized: 6.5%)  12.60    12.59    -  
Tier 1 leverage (g) (required: 4.00%; well-capitalized: 5.00%)  10.59    10.69    10.82  
Tier 1 risk-based capital (g) (required: 6.00%; well-capitalized: 8.00%)  12.60    12.59    13.53  
Total Risk-based capital (g) (required: 8.00%; well-capitalized: 10.00%)  13.60    13.56    14.68  
          
          
Asset Quality Indicators:         
          
Nonperforming Assets:         
Nonaccruing loans$ 27,719  $ 20,681  $ 34,061  
Troubled debt restructuring (accruing)  13,610    22,500    11,779  
Assets acquired through foreclosure  4,856    6,088    4,451  
Total nonperforming assets$ 46,185  $ 49,269  $ 50,291  
          
Past due loans (h)$ 208  $ 694  $ -  
          
Allowance for loan losses$ 40,845  $ 39,507  $ 41,381  
          
Ratio of nonperforming assets to total assets  0.91 %  1.00 %  1.09 %
Ratio of nonperforming assets (excluding accruing TDRs)  0.64    0.54    0.83  
Ratio of allowance for loan losses to total gross loans (i)  1.22    1.22    1.36  
Ratio of allowance for loan losses to nonaccruing loans  147    191    121  
Ratio of quarterly net charge-offs to average gross loans (a)(e)  0.29    0.09    -  
Ratio of year-to-date net charge-offs to average gross loans (a)(f)  0.19    0.09    0.17  
See "Notes"         


WSFS FINANCIAL CORPORATION 
FINANCIAL HIGHLIGHTS (Continued) 
AVERAGE BALANCE SHEET 
(Dollars in thousands) 
(Unaudited) Three months ended
  June 30, 2015   March 31, 2015   June 30, 2014 
  Average  Interest & Yield/   Average  Interest & Yield/   Average  Interest & Yield/ 
  Balance  Dividends Rate (a)(b)   Balance  Dividends Rate (a)(b)   Balance  Dividends Rate (a)(b) 
Assets: 
Interest-earning assets: 
Loans: (e) (j)                          
Commercial real estate loans$  1,002,843   $ 11,803  4.71 % $  955,680   $ 11,225  4.70 % $  850,719   $ 9,585  4.51 %
Residential real estate loans (l)   255,302     2,510  3.93      249,612     2,414  3.87      232,916     2,281  3.92  
Commercial loans   1,733,950     19,090  4.44      1,700,948     19,038  4.50      1,632,784     18,001  4.39  
Consumer loans   327,581     3,687  4.51      325,449     3,567  4.44      310,226     3,452  4.46  
Total loans (l)   3,319,676     37,090  4.49      3,231,689     36,244  4.50      3,026,645     33,319  4.42  
Mortgage-backed securities (d)   751,006     3,523  1.88      723,018     3,433  1.90      714,551     3,564  2.00  
Investment securities (d)   153,742     852  3.19      158,028     860  3.22      146,139     814  3.35  
Reverse mortgage loans   26,931     1,166  17.32      28,253     1,236  17.50      34,463     1,368  15.88  
Other interest-earning assets   28,715     424  5.92      31,623     1,078  13.83      35,629     348  3.92  
Total interest-earning assets   4,280,070     43,055  4.08      4,172,611     42,851  4.22      3,957,427     39,413  4.04  
Allowance for loan losses   (39,924)          (39,674)          (42,332)      
Cash and due from banks   88,124            81,149            78,476        
Cash in non-owned ATMs   413,977            402,072            364,461        
Bank owned life insurance   76,774            76,583            63,374        
Other noninterest-earning assets   151,506            148,445            127,708        
Total assets$  4,970,527         $  4,841,186         $  4,549,114        
                           
Liabilities and Stockholders' Equity:                          
Interest-bearing liabilities:                          
Interest-bearing deposits:                          
Interest-bearing demand$  689,773   $ 158  0.09 % $  673,976   $ 152  0.09 % $  632,160   $ 148  0.09 %
Money market   916,666     596  0.26      875,273     538  0.25      751,559     335  0.18  
Savings   414,001     54  0.05      408,555     52  0.05      403,921     62  0.06  
Customer time deposits   450,997     855  0.76      490,077     1,049  0.87      451,372     980  0.87  
Total interest-bearing customer deposits   2,471,437     1,663  0.27      2,447,881     1,791  0.30      2,239,012     1,525  0.27  
Brokered deposits   200,940     162  0.32      180,618     151  0.34      230,366     189  0.33  
Total interest-bearing deposits   2,672,377     1,825  0.27      2,628,499     1,942  0.30      2,469,378     1,714  0.28  
                           
FHLB of Pittsburgh advances   636,327     751  0.47      610,954     713  0.47      684,295     661  0.38  
Trust preferred borrowings   67,011     339  2.03      67,011     327  1.98      67,011     330  1.95  
Senior Debt   55,000     941  6.84      55,000     942  6.85      55,000     941  6.84  
Other borrowed funds   128,126     109  0.34      127,325     110  0.35      148,910     290  0.78  
Total interest-bearing liabilities   3,558,841     3,965  0.45      3,488,789     4,034  0.47      3,424,594     3,936  0.46  
                           
Noninterest-bearing demand deposits   863,241            811,365            671,384        
Other noninterest-bearing liabilities   39,483            40,628            30,112        
Stockholders' equity   508,962            500,404            423,024        
Total liabilities and stockholders' equity$  4,970,527         $  4,841,186         $  4,549,114        
                           
Excess of interest-earning assets                          
over interest-bearing liabilities$  721,229         $  683,822         $  532,833        
                           
Net interest and dividend income   $ 39,090        $ 38,817        $ 35,477    
                           
                           
Interest rate spread                          
        3.63 %        3.75 %        3.58 %
Net interest margin(o)                          
        3.71 %        3.82 %        3.64 %
                           
See "Notes"                          


 WSFS FINANCIAL CORPORATION             
 FINANCIAL HIGHLIGHTS (Continued)             
 (Dollars in thousands, except per share data)             
 (Unaudited)Three months ended Six months ended 
  June 30, March 31, June 30, June 30, June 30, 
 Stock Information (p):2015  2015  2014  2015  2014  
                 
 Market price of common stock:               
 High$  27.81   $ 26.51  $  24.56   $ 27.81  $25.87  
 Low   23.72     24.51    21.89     23.72   21.89  
 Close   27.35     25.21    24.56     27.35   24.56  
 Book value per share of common stock   17.93     17.88    16.13         
 Tangible common book value per share of common stock (n)   15.88     15.85    14.70         
 Number of shares of common stock outstanding (000s)   27,909     28,266     26,772         
 Other Financial Data:               
 One-year repricing gap to total assets (k)   0.62    1.86 %  0.01 %       
 Weighted average duration of the MBS portfolio  4.6 years  3.8 years   5.2 years        
 Unrealized (losses) gains on securities available-for-sale, net of taxes$  (1,588) $ 4,731  $  (2,584)       
 Number of Associates (FTEs) (m)   900     857    815         
 Number of offices (branches, LPO's, operations centers, etc.)   56     56    52         
 Number of WSFS owned ATMs   453     460     466         
 Notes:               
(a)Annualized.      
(b)Computed on a fully tax-equivalent basis.       
(c) Noninterest expense divided by (tax-equivalent) net interest income and noninterest income.      
(d)Includes securities available-for-sale at fair value.      
(e) Net of unearned income.       
(f)Net of allowance for loan losses.       
(g)Represents capital ratios of Wilmington Savings Fund Society, FSB and subsidiaries.       
(h)Accruing loans which are contractually past due 90 days or more as to principal or interest.       
(i)Excludes loans held-for-sale.       
(j)Nonperforming loans are included in average balance computations.       
(k)The difference between projected amounts of interest-sensitive assets and interest-sensitive liabilities repricing within     
 one year divided by total assets, based on a current interest rate scenario.       
(l)Includes loans held-for-sale.       
(m)Includes seasonal Associates, when applicable.      
(n)The Company uses non-GAAP (Generally Accepted Accounting Principles) financial information in its analysis of      
 the Company's 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. See page 16.      
(o)Beginning in 2015, the annualization method used to calculate net interest margin was changed to actual/actual      
 from 30/360.  All periods net interest margin calculations were updated to reflect this change.       
(p)All stock information has been adjusted for the 3 for 1 stock dividend completed on May 18, 2015.       


 WSFS FINANCIAL CORPORATION              
 FINANCIAL HIGHLIGHTS (Continued)              
 (Dollars in thousands, except per share data)              
 (Unaudited)                
                  
 Non-GAAP Reconciliation (n):Three months ended Six months ended 
  June 30,  March 31, June 30,  June 30,  June 30, 
  2015  2015  2014    2015    2014  
 Net interest Income (GAAP)$  39,090  $  38,817  $  35,477  $  77,907  $  69,521   
 Less: FHLB Special Dividend   -     (808)    -     (808)    -   
 Core net interest income   39,090     38,009     35,477     77,099     69,521   
 Noninterest Income (GAAP)   22,458     21,095     19,623     43,553     37,987   
 Less: Securities gains   (477)    (451)    (365)    (928)    (943)  
 Core fee income (non-GAAP)   21,981     20,644     19,258     42,625     37,044   
 Core net revenue (non-GAAP)$  61,071  $  58,653  $  54,735  $  119,724  $  106,565   
                  
                  
  End of period        
  June 30,  March 31, June 30,        
  2015  2015  2014         
                  
 Total assets$  5,077,483  $  4,946,480  $  4,613,090         
 Less: Goodwill and other intangible assets   (57,044)    (57,369)    (38,295)        
 Total tangible assets$  5,020,439  $  4,889,111  $  4,574,795         
                  
 Total Stockholders' equity$  500,375  $  505,495  $  431,955         
 Less: Goodwill and other intangible assets   (57,044)    (57,369)    (38,295)        
 Total tangible common equity$  443,331  $  448,126  $  393,660         
                  
 Calculation of tangible common book value per share:              
 Book Value per share (GAAP)$  17.93  $  17.88  $  16.13         
 Tangible common book value per share (non-GAAP)   15.88     15.85     14.70         
                  
 Calculation of tangible common equity to assets:              
 Equity to asset ratio (GAAP)  9.85%   10.22%   9.36%        
 Tangible common equity to asset ratio (non-GAAP)  8.83    9.17    8.60         
  Three months ended        
   Six months ended 
   June 30,  March 31, June 30, June 30,  June 30, 
   2015  2015   2014    2015  2014  
 GAAP net income$  12,234   $  12,889   $  12,725   $  25,123   $  29,636   
 Less: Sec. gains, Special FHLB dividend, legal settlement, corp. dev. costs & income tax benefit, net of taxes   209      334      397      543      (6,516)  
 Non-GAAP net income$  12,443   $  13,223   $  13,122   $  25,666   $  23,120   
                  
 Return on Average Assets (ROA)   0.98 %    1.06     1.12 %    1.02 %    1.32  
 Less: Sec. gains, Special FHLB dividend, legal settlement, corp. dev. costs & income tax benefit, net of taxes   0.02      0.03      0.03      0.02      (0.28)  
 Non-GAAP ROA   1.00 %    1.09 %    1.15 %    1.04 %    1.04%  
                  
 GAAP EPS$  0.43   $  0.45   $  0.46   $  0.88   $  1.08   
 Less: Sec. gains, Special FHLB dividend, legal settlement, corp. dev. costs & income tax benefit, net of taxes   0.01      0.01      0.02      0.02      (0.24)  
 Core EPS (non-GAAP)$  0.44   $  0.46   $  0.48   $  0.90   $  0.84   
                  
Investor Relations Contact: Rodger Levenson (302) 571-7296 rlevenson@wsfsbank.com Media Contact: Cortney Klein (302) 571-5253 cklein@wsfsbank.com

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