Exhibit 99

 

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FOR IMMEDIATE RELEASE		Investor Relations Contact: Stephen A. Fowle
April 24, 2014		(302) 571-6833 sfowle@wsfsbank.com
		Media Contact: Stephanie Heist
		(302) 571-5259 sheist@wsfsbank.com

WSFS REPORTS 1^st QUARTER 2014 EPS OF $1.85, AN 81% INCREASE

OVER 1^st QUARTER 2013; AIDED BY RECOGNITION OF TAX BENEFIT

WILMINGTON, Del., — WSFS Financial Corporation (Nasdaq: WSFS), the parent company of WSFS Bank, reported net income of $16.9 million, or $1.85 per diluted common share, for the first quarter of 2014 compared to net income of $9.0 million, or $1.02 per diluted common share, for the first quarter of 2013 and net income of $12.1 million, or $1.33 per diluted common share, for the fourth quarter of 2013. First quarter 2014 results include a $6.7 million tax benefit as described below.

Highlights for the first quarter of 2014:

 

•

Commercial loans grew at a 9% annualized rate led by double digit growth in Commercial and Industrial (C&I) and Commercial Real Estate (CRE) lending reflecting continued success in winning good market share.

 

•

Core (o) revenues, excluding securities gains, increased $3.5 million, or 8%, from the first quarter 2013 despite the negative impact of the prolonged and severe weather on first quarter 2014 results.

 

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Core (o) non-interest income improved $1.4 million, or 8% from the first quarter of 2013 with increases in nearly all fee income categories.

 

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Core(o) EPS of $1.10 per common share increased 22% from $0.90 per common share for the first quarter of 2013 and core (o) ROA was 0.90%, up from 0.81% reported in the first quarter of 2013.

 

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Tangible common capital(o) and tangible common book value per share(o) both increased more than 7% during the first quarter of 2014.

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Notable items:

 

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During the first quarter of 2014, WSFS completed the legal call of the reverse mortgage trust bonds previously consolidated on WSFS’ balance sheet. As a result, WSFS recorded an income tax benefit of approximately $6.7 million, or $0.73 in diluted earnings per share.

 

•

WSFS realized $578,000, or $0.04 per diluted common share (after-tax), in net gains on securities sales from continued portfolio management, down from $1.6 million, or $0.12 per diluted common share, in the first quarter 2013 and $660,000, or $0.05 per diluted common share, in the fourth quarter of 2013.

 

•

WSFS recorded $250,000, or $0.02 per diluted common share (after tax) in expenses related to corporate development activities. There were no corporate development costs in the first quarter of 2013 and $525,000, or $0.04 per share, of during the fourth quarter of 2013.

CEO outlook and commentary:

Mark A. Turner, President and CEO, said, “We are pleased to report another quarter of strong growth and solid earnings. Year-over-year revenue growth continues positive trends as we build our businesses and benefit from our position as the leading community bank in our primary market. Our growth comes despite typical first quarter seasonal slowness compounded by the challenges of a severe, prolonged winter and heightened competition.

“In addition to revenue growth, our balance sheet improvements also reflect the success we are having in building our franchise and solidifying our market position. Loan growth statistics continue to show strength, as C&I lending increased 10% on an annualized basis and CRE lending increased by 12%. Additionally, underlying core customer funding performance reflected market share gains.

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“Credit quality statistics reflect the continued strength of our loan portfolio. The migration of two relationships to nonperforming status modestly impacted our credit quality metrics. However, the underlying credit trends for the remainder of the portfolio remained solid during the quarter.

“Our growth trends provide a strong foundation, and we will continue to work diligently towards our goal of becoming a sustainably high-performing company. Our constant focus on, and belief in our strategy of ‘Engaged Associates delivering Stellar Service growing Customer advocates and value for our Owners’ is a key to our continued success.”

First Quarter 2014 Discussion of Financial Results

Net interest income and margin up significantly over 2013 levels

The net interest margin for the first quarter of 2014 was 3.57%, an 11 basis point increase from 3.46% reported for the first quarter of 2013. Net interest income for the first quarter of 2014 was $34.0 million, a $2.5 million, or 8% increase from the year-ago period. Compared to the fourth quarter of 2013, the net interest margin decreased 11 basis points and net interest income decreased $502,000, or 6% annualized.

Compared to the first quarter of 2013, results benefitted from consolidation of the reverse mortgage assets late in the third quarter of 2013 as well as balance sheet mix improvements, as higher yielding loans replaced low yielding mortgage-backed securities. Compared to the fourth quarter 2013, results were impacted by a shorter quarter, which reduced net interest income by approximately $650,000 and the net interest margin by 7 basis points. In addition, a decrease in reverse mortgage income negatively impacted the net interest margin by 2 basis points. As expected, reverse mortgage income can vary from period-to-period depending on the timing of cash flows and underlying collateral values. The linked quarter comparison was also negatively impacted by a decrease in overall loan yields resulting from increased competition.

Loan portfolio growth led by double-digit C&I and CRE loan growth

Total net loans were $3.0 billion at March 31, 2014, an increase of $37.4 million, or 5% annualized compared to the prior quarter-end. The growth was the result of significant increases in C&I loans of $40.2 million, or 10% annualized, and CRE loans of $21.0 million, or 12% annualized.

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Total net loans at March 31, 2014 increased $217.2 million, or 8%, compared to March 31, 2013. The year-over-year increase includes $137.6 million, or 9%, growth in C&I loans and a $111.7 million, or 18%, increase in CRE loans.

The following table summarizes loan balances and composition at March 31, 2014 compared to prior periods.

 

(Dollars in thousands)		At March 31, 2014								At December 31,2013								At March 31, 2013
Commercial & industrial		$	1,636,087				55	%		$	1,595,888				54	%		$	1,498,514				55	%
Commercial real estate			740,004				25				718,972				24				628,265				23
Construction			100,671				3				105,460				4				133,032				5
Total commercial loans			2,476,762				83				2,420,320				82				2,259,811				83
Residential mortgage			236,309				8				254,324				9				255,807				9
Consumer			302,157				10				303,067				10				284,047				10
Allowance for loan losses			(41,328	)			(1	)			(41,244	)			(1	)			(42,948	)			(2	)
Net Loans		$	2,973,900				100	%		$	2,936,467				100	%		$	2,756,717				100	%

Credit quality fundamentals reflect periodic volatility and remain strong

Credit quality metrics remained strong during the first quarter of 2014. Credit metrics reflect expected periodic fluctuations and were negatively impacted by two relationships totaling approximately $7.7 million which moved to nonperforming status during the quarter. Nonperforming assets increased $7.6 million over the fourth quarter of 2013, or 16%, to $55.4 million, or 1.22% of assets, and delinquencies (including nonperforming delinquencies) increased $5.3 million to 0.92% of total loans.

For the quarter, net charge-offs increased $1.1 million to $2.6 million, and were an annualized 0.34% of loans. The ratio of total classified loans to Tier 1 capital plus allowance for loan losses (‘ALLL’) increased to 31.47% from 29.69% in the fourth quarter of 2013.

Total credit costs (provision for loan losses, loan workout expenses, OREO expenses and other credit reserves) were $3.1 million during the quarter ended March 31, 2014, an increase from $2.3 million in the previous quarter.

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The ALLL grew slightly from the fourth quarter of 2013 to $41.3 million. The ratio of the ALLL to total gross loans decreased slightly to 1.38% at March 31, 2014 from 1.40% at December 31, 2013, due primarily to loan growth and stood at 103% of nonaccruing loans.

Customer funding reflects outflow of temporary year-end trust accounts and continued strength in core deposits

Customer funding decreased to $2.9 billion at March 31, 2014, due to an expected outflow in temporary trust-related money market deposits of $115.0 million. Excluding temporary trust accounts, customer funding increased $19.6 million, or 3% (annualized), and core customer funding increased $29.5 million, or 5% (annualized).

Customer funding decreased $87.2 million from March 31, 2013 balances. This decrease was mainly due to $111.1 million of purposeful reductions in higher cost CDs and an $89.0 million decrease in temporary trust-related money market deposits, which more than offset growth in core deposits of $135.4 million or 9%.

Core deposits now represent a robust 84% of total customer funding, and no-cost and low-cost demand deposit accounts represent a strong 45% of total customer funding.

The following table summarizes customer funding balances and composition at March 31, 2014 compared to prior periods.

 

(Dollars in thousands)		At March 31, 2014								At December 31, 2013								At March 31, 2013
Noninterest demand		$	664,976				23	%		$	650,256				21	%		$	626,751				21	%
Interest-bearing demand			648,856				22				638,403				21				560,394				18
Savings			410,186				14				383,731				13				401,452				13
Money market			750,541				25				887,715				29				848,967				28
Total core deposits			2,474,559				84				2,560,105				84				2,437,564				80
Customer time			451,154				15				458,110				15				562,289				19
Total customer deposits			2,925,713				99				3,018,215				99				2,999,853				99
Customer sweep accounts			20,807				1				23,710				1				33,895				1
Total customer funding		$	2,946,520				100	%		$	3,041,925				100	%		$	3,033,748				100	%

Noninterest income reflects first quarter seasonality and business growth over prior year

When compared to the same period a year ago, noninterest income increased $290,000. Excluding net securities gains in both periods, noninterest income of $17.8

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million increased $1.4 million, or 8%, from $16.4 million in the first quarter of 2013. This growth was the result of increases in all businesses from prior-year levels, including significant increases in the Cash Connect (ATM) division (reflected in debit/ credit & ATM income and other income) as well as increases in our Wealth and core Banking businesses.

Typical seasonality, combined with the impact of a severe winter on transactional activity, impacted the fee income comparison to the fourth quarter 2013. During the first quarter of 2014, the Company earned noninterest income of $18.4 million, a decrease of $1.4 million compared to $19.8 million in the fourth quarter of 2013. Adjusted for securities gains, this decrease was $1.3 million, or 7%. Transactional items such as debit/credit card & ATM income ($353,000), deposit service charges ($302,000) and mortgage banking activities ($331,000) were particularly affected by seasonality and weather.

Noninterest expense reflects seasonal expenses and franchise growth

Noninterest expense for the first quarter of 2014 increased $1.8 million from the same period in 2013. Adjusting for corporate development costs, expenses increased $1.3 million, or 5% from the prior year. Contributing to the year-over-year expense growth is an increase in salaries, benefits and other compensation expense of $491,000, mostly due to the addition of Array & Arrow Associates, as well as the timing of corporate merit increases during the first quarter. In addition, the occupancy expense increase of $346,000 is attributable to heavier snow removal costs as well as increases in utility costs for the 2014 winter season. Finally, other operating expenses, including armored courier costs, increased by $750,000, supporting the growth in the Cash Connect division’s revenue, mentioned previously.

Noninterest expense for the first quarter of 2014 decreased $420,000 from the fourth quarter of 2013. Adjusting for corporate development costs in both quarters, expenses decreased $149,000, or 2%, from the prior quarter. This decrease was driven by lower equipment costs of $645,000, as well as small declines in a number of other expense categories. These decreases were partially offset by a $694,000 increase in salaries,

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benefits and other compensation expense. The increase in salary and related expenses reflect typical seasonality related to taxes and other benefits, such as 401(k) matching costs, from the payment of incentives and the reset of tax caps during the first quarter. Additionally, occupancy expenses increased $412,000 due to snow removal and higher utility costs as a result of the 2014 weather.

Selected Business Segments (included in previous results):

Wealth Management division fee revenue grew by 4% over the prior year

The Wealth Management division provides a broad array of fiduciary, investment management, credit and deposit products to clients through four businesses. WSFS Investment Group, Inc. provides insurance and brokerage products primarily to our retail banking clients. Cypress Capital Management, LLC is a registered investment advisor with over $630 million in assets under management. Cypress’ primary market segment is high net worth individuals, offering a ‘balanced’ investment style focused on preservation of capital and current income. Christiana Trust, with $9.0 billion in assets under management and administration, provides fiduciary and investment services to personal trust clients, and trustee, agency, 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 Cypress, Christiana and WSFS Investment Group to deliver investment management and fiduciary products and services.

Total wealth management revenue (net interest income, investment management and fiduciary revenue plus other noninterest income generated by the segment) was $6.7 million during the first quarter of 2014. This represented an increase of $100,000 or 2%, compared to the first quarter of 2013 and decrease of $100,000 or 1% compared to the fourth quarter of 2013. Fee revenue increased $135,000 or 4% compared to the first quarter of 2013 and was flat compared to the fourth quarter of 2013. This growth reflects the continued expansion of corporate and personal trust business lines. Offsetting this growth are decreases in current revenue from the refocus of Retail Brokerage towards a relationship-oriented, recurring-revenue model and reassignment of a number of smaller transactional accounts from Private Banking to the WSFS Banking channel, best equipped to provide the appropriate products and services to these customers.

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Total segment noninterest expense (including intercompany allocations of expense and provision for loan losses) was $4.5 million during the first quarter of 2014 compared to $4.0 million during first quarter 2013 and $3.7 million during the fourth quarter of 2013. This increase was the result of higher personnel and infrastructure expenses to support ongoing growth as well as normal fluctuations in credit costs between the periods. Pre-tax income for the Wealth Management division in the first quarter of 2014 was $2.2 million compared to $2.5 million in the first quarter 2013 and $1.9 million in the fourth quarter 2013. Excluding variable credit costs, pre-tax income for the first quarter 2014 was $2.4 million compared to $2.5 million in the first quarter 2013 and $2.4 million in the fourth quarter 2013. The increased credit costs year-over-year are the result of write-downs on OREO properties sold in the current quarter compared to net recoveries in same period last year.

Cash Connect results reflect meaningful growth over 2013

The Cash Connect^® division is a premier provider of ATM vault cash and related services in the United States. Cash Connect^® services over $471 million in vault cash in nearly 15,000 non-bank ATMs nationwide and operates more than 460 ATMs for WSFS Bank, which has the largest branded ATM network in Delaware.

Cash Connect^® recorded $5.7 million in net revenue (fee income less funding costs) during the first quarter of 2014, an increase of $1.0 million, or 22%, compared to the first quarter of 2013 due to growth and additional product and service offerings. This amount decreased from the $6.2 million reported in the fourth quarter of 2013 due to seasonality. Noninterest expenses (including intercompany allocations of expense) were $4.1 million during the first quarter of 2014, an increase of $646,000 from the first quarter of 2013 and an increase of $227,000 compared to the fourth quarter of 2013. Cash Connect^® reported pre-tax income of $1.7 million for the first quarter of 2014, compared to $1.3 million in the first quarter of 2013 and $2.3 million in the fourth quarter of 2013. The decrease in linked-quarter bottom-line results was due to typical seasonality.

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Income taxes

The Company recorded a net $1.3 million income tax benefit in the first quarter of 2014 compared to $6.4 million tax provision in the fourth quarter of 2013 and $5.3 million in the first quarter of 2013.

During the first quarter of 2014, WSFS recorded a tax benefit of approximately $6.7 million related to the legal call of the reverse mortgage trust bonds. Excluding this tax benefit, the income tax provision for the first quarter of 2014 was approximately $5.4 million and the effective tax rate was 35% compared to 35% in the fourth quarter of 2013, and 35% during the first quarter of 2013.

Capital management

The Company’s tangible common equity increased to $370.3 million at March 31, 2014 from $344.1 million at December 31, 2013. Tangible common book value per share was $41.56 at March 31, 2014, a $2.88, or 7%, increase from $38.68 reported at December 31, 2013. The Company’s tangible common equity to asset ratio increased by 0.51% to 8.21%.

The Company’s total stockholders’ equity increased $25.8 to $408.9 million at March 31, 2014 from $383.1 million at December 31, 2013, primarily due to quarterly earnings and improvement in unrealized losses/gains in the investment portfolio.

At March 31, 2014, WSFS Bank’s Tier 1 leverage ratio of 10.68%, Tier 1 risk-based ratio of 13.47%, and total risk-based capital ratio of 14.66%, all increased from the prior quarter and were substantially in excess of “well-capitalized” regulatory benchmarks.

The Board of Directors approved a quarterly cash dividend of $0.12 per share of common stock. This dividend will be paid on May 23, 2014, to shareholders of record as of May 9, 2014.

First quarter 2014 earnings release conference call

Management will conduct a conference call to review first quarter results at 1:00 p.m. Eastern Daylight Time (EDT) on Friday, April 25, 2014. Interested parties may listen to

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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 May 10, 2014, by dialing 1-855-859-2056 and using Conference ID 31818348.

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 $4.5 billion in assets on its balance sheet and $9.5 billion in fiduciary assets, including approximately $1.1 billion in assets under management. WSFS operates from 52 offices located in Delaware (42), Pennsylvania (8), 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 Investment Group, Inc., Cypress Capital Management, LLC, Cash Connect^® and Array Financial. 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.

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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 financial goals, management’s plans 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 the economic environment, particularly in the market areas in which the Company operates, including an increase in unemployment levels; the volatility of the financial and securities markets, including changes with respect to the market value of financial assets; changes in market interest rates may increase funding costs and reduce earning asset yields thus reducing margin; increases in benchmark rates would increase debt service requirements for customers whose terms include a variable interest rate, which may negatively impact the ability of borrowers to pay as contractually obligated; changes in government regulation affecting financial institutions, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules being issued in accordance with this statute and potential expenses and elevated capital levels associated therewith; possible additional loan losses and impairment of the collectability of loans; seasonality, which may impact customer, such as construction-related businesses, the availability of public funds, and certain types of the Company’s fee revenue, such as mortgage originations; possible changes in trade, monetary and fiscal policies, laws and regulations and other activities of governments, agencies, and similar organizations, may have an adverse effect on business; possible rules and regulations issued by the Consumer Financial Protection Bureau or other regulators which might adversely impact our business model or products and services; possible stresses in the real estate markets, including possible continued deterioration in property values that affect the collateral value of underlying real estate loans; the Company’s ability to expand into new markets, develop competitive new products and services in a timely manner and to maintain profit margins in the face of competitive pressures; possible changes in consumer and business spending and savings habits could affect the Company’s ability to increase assets and to attract deposits; the Company’s ability to effectively manage credit risk, interest rate risk market risk, operational risk, legal risk, liquidity risk, reputational risk, and regulatory and compliance risk; the effects of increased competition from both banks and non-banks; the effects of geopolitical instability and risks such as terrorist attacks; the effects of weather and natural disasters such as floods, droughts, wind, tornadoes and hurricanes, and the effects of man-made disasters; 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; the Company’s ability to timely integrate any businesses it may acquire and realize any anticipated cost savings from those acquisitions; 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, 2013 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.

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WSFS FINANCIAL CORPORATION

FINANCIAL HIGHLIGHTS

STATEMENT OF OPERATIONS

 

(Dollars in thousands, except per share data)		Three months ended
(Unaudited)		March 31,				December 31,				March 31,
		2014				2013				2013
Interest income:
Interest and fees on loans		$	32,202			$	32,871			$	31,426
Interest on mortgage-backed securities			3,278				3,166				3,729
Interest and dividends on investment securities			792				693				142
Interest on reverse mortgage related assets (n)			1,197				1,346				269
Other interest income			316				257				25
			37,785				38,333				35,591
Interest expense:
Interest on deposits			1,656				1,666				2,019
Interest on Federal Home Loan Bank advances			526				498				443
Interest on trust preferred borrowings			326				336				329
Interest on Senior Debt			942				942				943
Interest on Bonds Payable			15				60				—
Interest on other borrowings			276				285				277
			3,741				3,787				4,011
Net interest income			34,044				34,546				31,580
Provision for loan losses			2,630				1,292				2,231
Net interest income after provision for loan losses			31,414				33,254				29,349
Noninterest income:
Credit/debit card and ATM income			5,766				6,119				5,668
Deposit service charges			4,269				4,571				4,014
Investment management and fiduciary revenue			3,834				3,905				3,728
Mortgage banking activities, net			812				1,143				737
Securities gains, net			578				660				1,644
Loan fee income			384				558				495
Bank-owned life insurance income			139				108				40
Other income			2,582				2,732				1,748
			18,364				19,796				18,074
Noninterest expense:
Salaries, benefits and other compensation			18,474				17,780				17,983
Occupancy expense			3,729				3,317				3,383
Equipment expense			1,687				2,332				1,829
Data processing and operations expense			1,471				1,633				1,349
Professional fees			1,350				1,700				947
FDIC expenses			653				425				1,166
Loan workout and OREO expense			539				1,104				170
Marketing expense			499				660				517
Other operating expenses			5,776				5,647				5,026
			34,178				34,598				32,370
Income before taxes			15,600				18,452				15,053
Income tax (benefit) provision			(1,311	)			6,378				5,313
Net income			16,911				12,074				9,740
Dividends on preferred stock and accretion of discount			—				—				692
Net income allocable to common stockholders		$	16,911			$	12,074			$	9,048
Diluted earnings per share of common stock:
Net income allocable to common stockholders		$	1.85			$	1.33			$	1.02
Weighted average shares of common stock outstanding for diluted EPS			9,127,880				9,078,228				8,873,170
Performance Ratios:
Return on average assets (a)			1.52	%			1.09	%			0.91
Return on average equity (a)			16.79				12.64				9.19
Return on tangible common equity (a) (n)			18.88				14.50				10.94
Net interest margin (a)(b)			3.57				3.68				3.46
Efficiency ratio (c)			64.57				63.13				65.04
Noninterest income as a percentage of total net revenue (b)			34.70				36.12				36.32
See “Notes”

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WSFS FINANCIAL CORPORATION

FINANCIAL HIGHLIGHTS (Continued)

SUMMARY STATEMENT OF CONDITION

 

(Dollars in thousands)
(Unaudited)		March 31,				December 31,				March 31,
		2014				2013				2013
Assets:
Cash and due from banks		$	96,917			$	94,734			$	75,379
Cash in non-owned ATMs			342,561				389,360				454,955
Investment securities (d)			142,658				132,343				70,500
Other investments			33,825				36,201				31,804
Mortgage-backed securities (d)			716,593				684,773				753,143
Net loans (e)(f)(l)			2,973,900				2,936,467				2,756,717
Reverse mortgage related assets (n)			36,266				37,327				18,288
Bank owned life insurance			63,324				63,185				62,955
Other assets			139,918				141,373				130,902
Total assets		$	4,545,962			$	4,515,763			$	4,354,643
Liabilities and Stockholders’ Equity:
Noninterest-bearing deposits		$	664,976			$	650,256			$	626,751
Interest-bearing deposits			2,260,737				2,367,959				2,373,102
Total customer deposits			2,925,713				3,018,215				2,999,853
Brokered deposits			247,369				168,727				188,666
Total deposits			3,173,082				3,186,942				3,188,519
Federal Home Loan Bank advances			654,824				638,091				455,262
Reverse mortgage trust bonds payable			—				21,990				—
Other borrowings			269,494				243,750				250,906
Other liabilities			39,702				41,940				35,687
Total liabilities			4,137,102				4,132,713				3,930,374
Stockholders’ equity			408,860				383,050				424,269
Total liabilities and stockholders’ equity		$	4,545,962			$	4,515,763			$	4,354,643
Capital Ratios:
Equity to asset ratio			8.99	%			8.48	%			9.74	%
Tangible equity to asset ratio (o)			8.21				7.69				9.05
Tangible common equity to asset ratio (o)			8.21				7.69				7.84
Tier 1 leverage (g) (required: 4.00%; well-capitalized: 5.00%)			10.68				10.35				10.12
Tier 1 risk-based capital (g) (required: 4.00%; well-capitalized: 6.00%)			13.47				13.16				13.27
Total Risk-based capital (g) (required: 8.00%; well-capitalized: 10.00%)			14.66				14.36				14.52
Asset Quality Indicators:
Nonperforming Assets:
Nonaccruing loans		$	40,128			$	30,950			$	45,721
Troubled debt restructuring (accruing)			11,579				12,332				10,776
Assets acquired through foreclosure			3,684				4,532				6,522
Total nonperforming assets		$	55,391			$	47,814			$	63,019
Past due loans (h)		$	403			$	533			$	400
Allowance for loan losses		$	41,328			$	41,244			$	42,948
Ratio of nonperforming assets to total assets			1.22	%			1.06	%			1.45	%
Ratio of allowance for loan losses to total gross loans (i)			1.38				1.40				1.54
Ratio of allowance for loan losses to nonaccruing loans			103				133				94
Ratio of quarterly net charge-offs to average gross loans (a)(e)			0.34				0.20				0.46
Ratio of year-to-date net charge-offs to average gross loans (a)(f)			0.34				0.34				0.46
See “Notes”

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		14

 

WSFS FINANCIAL CORPORATION

FINANCIAL HIGHLIGHTS (Continued)

AVERAGE BALANCE SHEET

 

(Dollars in thousands)
(Unaudited)		Three months ended
		March 31, 2014												December 31, 2013												March 31, 2013
		Average Balance				Interest & Dividends				Yield/ Rate (a)(b)				Average Balance				Interest & Dividends				Yield/ Rate (a)(b)				Average Balance				Interest & Dividends				Yield/ Rate (a)(b)
Assets:
Interest-earning assets:
Loans: (e) (j)
Commercial real estate loans		$	834,196			$	9,286				4.45	%		$	815,671			$	9,700				4.76	%		$	761,508			$	8,927				4.69	%
Residential real estate loans (l)			240,472				2,271				3.78				256,418				2,452				3.83				260,329				2,601				4.04
Commercial loans			1,601,615				17,220				4.33				1,557,022				17,302				4.38				1,489,004				16,550				4.47
Consumer loans			302,290				3,425				4.60				297,219				3,417				4.56				284,177				3,348				4.78
Total loans (l)			2,978,573				32,202				4.32				2,926,330				32,871				4.51				2,795,018				31,426				4.51
Mortgage-backed securities (d)			680,080				3,278				1.93				674,586				3,270				1.94				765,476				3,729				1.95
Investment securities (d)			138,819				792				3.45				129,577				693				3.16				56,027				142				1.23
Reverse mortgage related assets (n)			37,261				1,197				12.85				39,971				1,343				13.44				19,347				269				5.56
Other interest-earning assets			35,093				316				3.65				33,304				257				3.06				31,489				25				0.32
Total interest-earning assets			3,869,826				37,785				3.92				3,803,768				38,434				4.09				3,667,357				35,591				3.89
Allowance for loan losses			(41,585	)											(41,817	)											(44,489	)
Cash and due from banks			78,318												85,972												76,363
Cash in non-owned ATMs			353,867												387,164												404,821
Bank owned life insurance			63,234												63,115												62,931
Other noninterest-earning assets			140,752												130,857												117,334
Total assets		$	4,464,412											$	4,429,059											$	4,284,317
Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
Interest-bearing demand		$	624,761			$	146				0.09	%		$	634,274			$	160				0.10	%		$	525,002			$	120				0.09	%
Money market			767,362				311				0.16				790,602				292				0.15				781,870				335				0.17
Savings			394,317				59				0.06				383,637				56				0.06				396,584				60				0.06
Customer time deposits			453,842				957				0.86				481,148				1,018				0.84				588,571				1,341				0.92
Total interest-bearing customer deposits			2,240,282				1,473				0.27				2,289,661				1,526				0.26				2,292,027				1,856				0.33
Brokered deposits			215,336				183				0.34				174,056				140				0.32				177,746				163				0.37
Total interest-bearing deposits			2,455,618				1,656				0.27				2,463,717				1,666				0.27				2,469,773				2,019				0.33
FHLB of Pittsburgh advances			655,509				526				0.32				611,473				498				0.32				475,685				443				0.37
Trust preferred borrowings			67,011				326				1.95				67,011				336				1.96				67,011				329				1.96
Reverse mortgage bonds payable			6,597				15				0.97				25,550				161				2.47				—				—				—
Senior Debt			55,000				942				6.85				55,000				942				6.85				55,000				943				6.86
Other borrowed funds			147,256				276				0.75				147,322				285				0.77				151,216				277				0.73
Total interest-bearing liabilities			3,386,991				3,741				0.44				3,370,073				3,888				0.46				3,218,685				4,011				0.50
Noninterest-bearing demand deposits			641,052												638,716												610,947
Other noninterest-bearing liabilities			37,066												38,073												30,595
Stockholders’ equity			399,303												382,197												424,090
Total liabilities and stockholders’ equity		$	4,464,412											$	4,429,059											$	4,284,317
Excess of interest-earning assets over interest-bearing liabilities		$	482,835											$	433,695											$	448,672
Net interest and dividend income						$	34,044											$	34,546											$	31,580
Interest rate spread
											3.48	%											3.63	%											3.39	%
Net interest margin
											3.57	%											3.68	%											3.46	%
See “Notes”

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		15

 

WSFS FINANCIAL CORPORATION

FINANCIAL HIGHLIGHTS (Continued)

 

(Dollars in thousands, except per share data)
(Unaudited)		Three months ended
		March 31,				December 31,				March 31,
		2014				2013				2013
Stock Information:
Market price of common stock:
High		$	77.62			$	79.11			$	49.28
Low			67.57				58.02				43.75
Close			71.43				77.53				48.64
Book value per share of common stock			45.90				43.06				48.25
Tangible book value per share of common stock (o)			41.56				38.68				44.48
Tangible common book value per share of common stock (o)			41.56				38.68				38.51
Number of shares of common stock outstanding (000s)			8,909				8,895				8,793
Other Financial Data:
One-year repricing gap to total assets (k)			(1.81	)%			(3.28	)%			0.19	%
Weighted average duration of the MBS portfolio			5.4 years				5.3 years				4.9 years
Unrealized (losses) gains on securities available-for-sale, net of taxes		$	(12,036	)		$	(20,822	)		$	7,569
Number of Associates (FTEs) (m)			774				762				771
Number of offices (branches, LPO’s, operations centers, etc.)			52				52				52
Number of WSFS owned ATMs			462				457				449

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)	Includes all reverse mortgage related revenue from the reverse mortgage consolidation and related interest income from Class O certificates and the BBB-rated traunch of a reverse mortgage security.

(o)	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.

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		16

 

WSFS FINANCIAL CORPORATION

FINANCIAL HIGHLIGHTS (Continued)

 

(Dollars in thousands, except per share data)
(Unaudited)
		Three months ended
		March 31,				December 31,				March 31,
		2014				2013				2013
Non-GAAP Reconciliation (o):
Net interest Income (GAAP)		$	34,044			$	34,546			$	31,580
Noninterest Income (GAAP)			18,364				19,796				18,074
Less: Securities gains			(578	)			(660	)			(1,644	)
Core noninterest income (non-GAAP)			17,786				19,136				16,430
Core net revenue (non-GAAP)		$	51,830			$	53,682			$	48,010
		End of period
		March 31,				December 31,				March 31,
		2014				2013				2013
Total assets		$	4,545,962			$	4,515,763			$	4,354,643
Less: Goodwill and other intangible assets			(38,610	)			(38,979	)			(33,134	)
Total tangible assets		$	4,507,352			$	4,476,784			$	4,321,509
Total Stockholders’ equity		$	408,860			$	383,050			$	424,269
Less: Goodwill and other intangible assets			(38,610	)			(38,979	)			(33,134	)
Total tangible equity			370,250				344,071				391,135
Less: Preferred stock			—				—				(52,509	)
Total tangible common equity		$	370,250			$	344,071			$	338,626
Calculation of tangible common book value:
Book Value (GAAP)		$	45.90			$	43.06			$	48.25
Tangible book value (non-GAAP)			41.56				38.68				44.47
Tangible common book value (non-GAAP)			41.56				38.68				38.51
Calculation of tangible common equity to assets:
Equity to asset ratio (GAAP)			8.99	%			8.48	%			9.74	%
Tangible equity to asset ratio (non-GAAP)			8.21				7.69				9.05
Tangible common equity to asset ratio (non-GAAP)			8.21				7.69				7.84
GAAP net income		$	16,911			$	12,074			$	9,740
Less: Sec. gains, corp. dev. costs & income tax benefit, net of taxes			(6,913	)			(88	)			(1,069	)
Non-GAAP net income		$	9,998			$	11,986			$	8,671
Return on Average Assets (ROA)			1.52	%			1.09	%			0.91	%
Less: Sec. gains, corp. dev. costs & income tax benefit, net of taxes			0.62				0.01				0.10
Non-GAAP ROA			0.90	%			1.08	%			0.81	%
GAAP EPS		$	1.85			$	1.33			$	1.02
Less: Sec. gains, corp. dev. costs & income tax benefit, net of taxes			(0.75	)			(0.01	)			(0.12	)
Non-GAAP EPS		$	1.10			$	1.32			$	0.90