Attached files
| file | filename |
|---|---|
| 8-K - 8-K - WSFS FINANCIAL CORP | d887522d8k.htm |
| EX-99.1 - EX-99.1 - WSFS FINANCIAL CORP | d887522dex991.htm |
 WSFS
Financial Corporation 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
bsellers@wsfsbank.com
www.wsfsbank.com
2
Mark A. Turner
President and CEO
302-571-7160
mturner@wsfsbank.com
Stephen A. Fowle
Chief Financial Officer
302-571-6833
sfowle@wsfsbank.com
Rodger Levenson
Chief Commercial Banking Officer
302-571-7296
rlevenson@wsfsbank.com |
 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 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.
3
Forward-Looking Statements |
 Quarter
Highlights •
4Q 2014 results reflect continued core revenue growth
•
Core revenues increased $4.5 million or 8% over 4Q 2013
•
Net interest income improved $3.7 million or 11% over 4Q 2013
•
•
Reported ROA was 1.07%; ROTCE was 12.04%
•
Core
ROA
of
1.15%
increased
6%
from
1.08%
in
4Q
2013
•
Reported EPS was $1.32 compared to $1.33 in 4Q
2013
•
Core
EPS
of
$1.43
up
8%
from
core
EPS
of
$1.32
in
4Q
2013
•
Balance Sheet growth includes First National Bank of Wyoming Acquisition
•
Total loan growth was $248.7 million or 9% over 4Q 2013
•
Commercial growth of $228.2 million or 9%; Consumer growth of $25.4 million or
8% •
Core deposit account growth of $401.2 million or an increase of 16% from 4Q 2013
•
Core deposit accounts are 85% of total customer funding
•
Includes year end temporary trust–related deposits of $188.5 million
4
Review of 4Q 2014 Results
Core noninterest income increased $793,000 or 4% over 4Q 2013; stands at a
robust 35% of total revenue
|
 •
Capital
levels
remain
strong,
boosted
by
earnings
and
investment
appreciation
•
Tangible common book value per share improved 3% to $45.89 and tangible common equity
increased 15 basis points to 9.00%
•
Tier 1 leverage ratio was 10.25%, Tier 1 risk-based capital ratio was 12.79% and
total risk-based capital ratio was 13.83% at quarter-end
•
All
substantially
above
“well
capitalized”
levels
•
In September 2014, the Board of Directors approved a 25% increase to the cash dividend
and authorized a 5% stock repurchase plan
•
Credit quality metrics continued favorable trends
•
Delinquency decreased to 0.55% of total loans (includes nonperforming loans)
•
Charge offs are $624,000 for the 4Q 2014 or 8 basis points (annualized) of gross
loans •
Total credit costs (provision for loan losses, loan workout expenses, OREO expenses
and other credit reserves), were $991,000 during 4Q 2014 a decrease from
$2.2 million in 4Q 2013 •
NPLs decreased $2.4 million to $24.1 million, or 0.75% of net loans at December 31,
2014 Quarter Highlights
5 |
 6
Strategic Rationale:
Consistent with WSFS’s strategic growth plan
Size: Assets of $421MM; Loans $310MM; Deposits of $345MM; 8 Branches
Enhances
franchise
in
Delaware
County
and
Chester
County
–
from
#22
to
#9
(pro
forma)
in
Delaware County, PA
Provides appealing cross-sell opportunities for WSFS products and services,
including Array Financial ,Treasury Management, Mobile Banking and Wealth
Management Compatible Culture; client focused community banking model
Platform for future growth in Southeastern PA
Accretive in 1
st
full year (excluding integration costs) with IRR of 17%
Purchase Price:
Approximately $92.0 million in aggregate
70% Stock / 30% Cash
Tangible Book Value of 138.4%
Expected Closing:
Fourth quarter 2015; pending shareholder and regulatory approvals
Pending combination with Alliance Bancorp, Inc. |
 7
Recently completed combination with FNB of Wyoming (DE)
Strategic Rationale:
Consistent with WSFS’s strategic growth plan
Size: Assets of $285MM; Loans $176MM; Deposits of $229MM; 6 Branches
Enhances
franchise
in
Kent
County
–
from
#6
to
#2
(pro
forma)
in
market
share
Diversifies revenue stream and improves core funding and liquidity; The First National
Bank of Wyoming is ranked 2nd in SBA lending in Delaware
Low risk in-market transaction and plain balance sheet; business lines are easily
integrated Attractive financial returns; opportunity for significant cost
savings Accretive
in
1
st
full
year
(excluding
integration
costs)
with
IRR
well
in
excess
of
20%
Purchase Price:
Approximately $65.0 million in aggregate
Tangible Book Value of 129%
50% Stock / 50% Cash
Closing:
September 5, 2014.
Completed successful integration |
 8
The WSFS Franchise
•
Largest independent bank and
trust co. in the Delaware Valley
•
$4.9 billion in assets
•
55 offices
•
Major business lines
•
Retail
•
Commercial
•
Wealth Management
Indicates WSFS branch office and LPO
locations
Not shown on map: Annandale, VA (LPO) &
Las Vegas, NV (Wealth Management Office)
•
$9.9 billion in fiduciary assets,
includes $1.2 billion in assets
under management
•
Founded in 1832, WSFS is one of the ten
oldest banks in the U.S.
•
Cash Connect
®
(ATM cash and
related businesses)
Note: the varying shades of green represent the
intensity of the number of Customers we serve in
our regional footprint |
 WSFS Bank
Deposits of Traditional Banks in Delaware
June 30, 2014*
Rank
Institution
Branch
Count
Total Deposits
in Market
Total Market
Share
CAGR
‘08-’14
1
M&T Bancorp (NY)
41
5,672,018
29.41%
3.58%
2
PNC Financial Services Group (PA)
41
3,932,958
20.40%
10.11%
3
WSFS (DE)¹
37
3,090,816
16.03%
11.52%
4
Wells Fargo & Company (CA)
19
2,188,755
11.35%
-7.54%
5
TD Bank (Canada)²
13
2,062,985
10.70%
11.67%
6
Citizens (RBS -Scotland)
23
943,384
4.89%
-1.67%
7
Artisan’s Bank (DE)
12
440,888
2.29%
-2.98%
8
Fulton Financial Corp. (PA)
11
416,159
2.16%
9.65%
9
County Bank (DE)
7
295,014
1.53%
0.51%
10
Bank of America (NC)
4
239,917
1.24%
47.09%
Top 10 Delaware Banks³
208
$19,282,894
100.00%
4.42%
9
*Most recently available FDIC data
(1)
WSFS deposits are restated year over year to include First National Bank of Wyoming and
its surviving branches (2)
Excludes estimated out-of-market deposits of TD Bank
(3)
Top 10 Delaware Banks house 96% of all traditional deposits in the state
|
 Commercial Bank Assets
4Q 2014:
•
•
C&I (including owner-occupied
real estate), the largest
component, makes up 54% of all
loans
•
•
Commercial loans grew 9%
•
Consumer loans grew 8%
•
Reflects FNBW acquisition
Comments
Assets $4.9 Billion; Net Loans $3.2 Billion
Asset
Composition-December 31, 2014
WSFS Bank –
Balance Sheet
10
RCLC = Residential Construction & Land Development
CCLC = Commercial Construction & and Land Development
Cash
Connect
8%
Investments
18%
BOLI 2%
Non-
Earning
Assets 6%
Net Loans
66%
1%CCLD
3%
7%
10%
54%
25%
CRE
C&I
Residential
Mortgages
Consumer
RCLD
Commercial loans comprise 83%
of the loan portfolio
Net loans grew 9% from 4Q 2013 |
 Comments
Customer Funding -
$3.5 billion
Funding
Composition-December 31, 2014
WSFS Bank –
Balance Sheet
11
•
•
Non-interest and very low interest
DDA (WAC 9bps) stands at 43% of
total customer funding
•
Customer funding up 8% from
December 31, 2013 driven by $401.2
million or 16% growth in core deposits
•
4% core deposit growth, excluding
FNBW acquired deposits and
temporary increases in Trust-related
money market over prior year. At
December 31, 2014, we held $188.5
million in temporary trust-related
money market deposits
•
•
Down from a high of 140% prior to the
beginning of the economic cycle
Other
Liabilities
1%
Wholesale
Deposits
5%
Borrowings
16%
Equity 10%
Customer
Funding
68%
Non
interest
DDA 23%
Interest
DDA 20%
Money
Market &
Savings
42%
Sweeps
1%
Time 14%
Loan to customer funding ratio is at
92%
Core customer funding comprises
85% of total customer funding
Heavy Bias Towards Core: |
 •
Fiduciary and investment services
•
Services to personal trust clients as well as trustee, agency,
custodial and commercial domicile services to corporate and
institutional clients
•
$3.4 million revenue in 4Q 2014
•
$526 million in assets under management and $8.8 billion
assets under administration
•
Ranked sixth among all U.S. corporate trustees in the
ABS/MBS industry for 2014
(1)
Wealth Management
WSFS
Private Banking
WSFS Wealth
Investments •
Offers insurance and brokerage products
•
Focus on retail banking clients
•
$469,000 revenue in 4Q 2014
•
Offers credit and deposit products
•
Focus on high net worth individuals
•
Partners/refers to other wealth units
•
$2.1 million revenue in 4Q 2014
•
Registered investment advisor offering a
“balanced’
investment style focused on
preservation of capital and current income
•
Focus on high net worth individuals
•
$661 million + assets under management
•
$563,000 revenue in 4Q 2014
(1) Per the January 2015 issue of Asset-Backed Alert
12
CYPRESS
CAPITAL MANAGEMENT,
LLC |
 Cash
Connect ®
13
•
Leading provider of ATM vault cash, armored carrier management, cash forecasting
services, insurance and equipment services
•
Adding ATM settlement services to existing managed service offering
•
Expanding ATM managed services from ISO market to FI market sector
•
Services non-bank ATM owners
•
More than $486 million in vault cash
•
Nearly 15,000 non-bank ATMs nationwide
•
$6.5 million net revenue (fee income less funding costs) and $1.9 million in
pre-tax profitability in 4Q 2014
•
5 year CAGR for net revenue is 13.4%
•
Also serves as an innovation center for the company, both expanding core ATM offerings
and additional payment-, processing-
and software-related activities
•
Launched Smart Safe cash services in 2Q 2014. Currently 51 safes; projecting 400 by
EOY 2015
•
Operates more than 465 ATMs for WSFS Bank; largest in-market ATM franchise
|
 Fee
Income Businesses 14
Significant Growth in Fee Businesses
* Excludes security gains, reverse mortgage consolidation gains and
BOLI gain 35% of
Total
Revenues*
$0
$10
$20
$30
$40
$50
$60
$70
$80
2010
2011
2012
2013
2014
WSFS Bank*
Cash Connect
Wealth |
 15
•
Focus on increasing operating leverage and earnings
•
Continued credit quality improvement
•
Managing capital prudently and thoughtfully
•
Continuing strong alignment of management and owners
•
Goal
–
become
solidly
high
performing
(top
quintile
of
peers
in
ROA,
ROTCE
and
EPS growth), supporting above-peer Total Shareholder Returns
•
On a path to high performing status; see analysis on page 23
The WSFS Franchise
Organizational Focus
•
Generating above-peer Total Shareholder Returns over 3, 5, and 10 year time
frames, see analysis on page 24 |
 Comments
Building Bottom Line Performance:
•
•
4Q 2014 Core ROA of 1.15% ahead of
1.08% in 4Q 2013
•
Goal of 1.20% -1.30% by end of 4Q
2015
•
Normalized EPS growth
momentum
•
Increased 8% from 4Q 2013
reflecting success in building market
share
Increasing Earnings
16
(1)
Peer
group
ROA
reflects
97%
reporting
for
December
31,
2014
(2)
Represents normalization for securities gain/losses, non-routine BOLI income, bulk
sale provision, OREO impact and debt extinguishment loss. Please see Appendix
3 Non-GAAP Financial Information for details ROA Progression
(1)
Normalized EPS Trend
(2)
ROA trend has consistently improved
from a break-even year in 2009
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1.40%
2010
2011
2012
2013
2014
WSFS
$2
-$10B Peer Median(1)
$0.30
$0.50
$0.70
$0.90
$1.10
$1.30
$1.50 |
 Increasing Earnings
35.6%
Provision and Credit Costs
•
•
Fee Income
•
•
•
Wealth Management fee income
increased 24% from 4Q 2013
•
Cash Connect net revenue increased
6% from 4Q 2013
17
Percentages represent normalized fee income as a percentage of total revenues
Comments
Core Fee Income
Reflects Improved Credit Quality
Decreased significantly, reflecting long term
trend in asset quality improvement and
lower charge offs in 4Q 2014.
Total Problem loans reduced significantly to
25.97% of Tier I Capital plus ALLL
Increased focus on fee income growth,
35%
of revenues in 2014
Fee income increased $793,000 million or
4%
from 4Q 2013
reflecting growth in most
segments of the business
$0
$20
$40
$60
$80
$100
2010
2011
2012
2013
2014
27.3%
31.0%
33.6%
35.0%
$0
$10
$20
$30
$40
$50
2010
2011
2012
2013
2014
Provision
Other Credit Cost
Fee Income Normalized
Securities Gains
Rev Mtg Consol Gain
BOLI Gain |
 Increasing Earnings
Net Interest Margin / Net Interest
Income
Improving Efficiency Ratio
18
Comments
Improving Efficiency Ratio
(1)
Improved Net Interest Income
(1) Excludes pro forma items listed on page 29
$100
$110
$120
$130
$140
$150
2010
2011
2012
2013
2014
60.0%
62.0%
64.0%
66.0%
68.0%
70.0%
2010
2011
2012
2013
2014
Strong revenue growth across all
business lines
Improving credit costs
Moderating core expenses
Increased operating leverage
Net interest income increased $3.7
million or 11% over 4Q 2013
Net Interest Margin of 3.78% improved
10 basis points over 4Q 2013 |
 What
happens when Rates go up? Balance Sheet Drivers
•
+100 Model results reflects impact of loan floors and WSFS prime
•
High % of variable/adjustable rate total loan portfolio: 66%
•
High % core deposits: 88%
•
High % non-interest bearing deposits: 26%
•
Solid brand and position / “Price Leader”
•
* Static Balance Sheet / Instantaneous Rate Shocks
19
NII
NII
BPS Change*
% Impact
$ Impact
+100
(1)%
$ (1.6) mm
+200
2%
$ +2.2 mm
+300
4%
$ +6.2 mm
+400
7%
$ +9.9 mm
Recent
strategy:
shortening
duration
of
investment
portfolio
and
lengthening
duration
of
FHLB
advances |
 Asset
Quality Metrics Improving credit quality trends:
•
•
•
From a cycle–high of over 70%
•
•
20
Comments
Problem Loan Key Ratios
Credit Quality Continues to Improve
Adjusted for FNBW acquired loans, ALLL Ratio is 1.30%
NPAs were 1.08% of total assets at
December 31, 2014
Classified loans decreased to 21.3%
of Tier 1 Capital + ALLL
ALLL remains at a strong 1.23% of
loans*
Coverage ratio stands at 164% of
non-performing loans at
December 31, 2014
46.6%
52.2%
36.8%
29.7%
21.3%
63.9%
84.8%
52.5%
33.6%
26.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
2010
2011
2012
2013
2014 |
 21
Bank-Level Capital Ratios
(thousands)
Total Risk-Based Capital
13.62%
13.43%
14.29%
14.36%
13.83%
Tier 1 Capital
12.36%
12.18%
13.04%
13.16%
12.79%
Excess RBC (above 10%)
$108,611
$110,940
$140,117
$153,542
$147,186
Tangible Common Equity
7.18%
7.18%
7.72%
7.69%
9.00%
Tangible Common Book Value
$33.03
$35.96
$38.21
$38.68
$45.89
Managing Capital
$409,034
$434,301
$466,925
$505,354
$531,208
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
$550,000
$600,000
12/10
12/11
12/12
12/13
12/14
Total Risk-Based Capital
Well Capitalized Requirement |
 Strong
Alignment •
Insider
ownership
is
nearly
8%
*
•
Board of Directors and Executive Management ownership guidelines
in place
•
Executive
management
bonuses
and
equity
awards
based
on
bottom-line
performance
•
ROA, ROTCE and EPS growth
•
5% stock buyback authorization in place; repurchased 1% or 116,421
common share equivalents in 4Q 2014
•
$54.3 million in cash remains in the Holding Co. as of December 31, 2014
to so
support the buyback and other company cash needs.
•
The Board of Directors approved a 25% increase of the quarterly cash
dividend to $0.15 per share of common stock in September 2014
22
* As defined in our most recent proxy, adjusted for options approved by
shareholders and awarded to the CEO and EVP’s in April 2013. |
 Path to
High Performing – 2015 Goal
Item
Action Plan
Planned
Impact
+
Possible
Impact
LTD
Improvements
NII
(Goal: 3.60 –
3.75%)
Planned:
2012
deleverage
strategy,
municipal
investment,
fixed
rate
loan
growth,
balance sheet mix. Possible: Rate environment
15 bp
+
6 bp
18 bp
Fee income
(Goal: 36 –
40%)
Planned:
Low
double
digit
growth
in
Cash
Connect,
high
single
digit
growth
in
Wealth Division fees, intro of new banking solutions
20 bp
+
0 bp
4 bp
Efficiency ratio
(Goal: low 60s%)
Planned:
Reduction
in
regulatory
costs
from
release
of
MOU,
higher
1Q
seasonal
costs.
Possible: Contain expense growth to 2% in 2013, 5% in later year
8 bp
+
1 bp
2 bp
Credit costs
(Goal: 0.27%)
Planned:
Reduced
credit
costs
to
industry
median
(35
bps
of
loans
2012).
Possible:
Further
improvement
possible
in
stronger
economy
5 bp
+
3 bp
8 bp
Tax rate
Planned:
Tax
impact
of
muni
investment
2 bp
+
0 bp
3 bp
Total
50 bp
+
10 bp
35 bp
(1Q 2013 Normalized) 0.70% ROA
11
10
(1Q 2013 Normalized +
Planned
Impacts)
1.20%
0.91% (as Reported)
1.30% (with Possible)
6
3
5
2
12
1
20
Credit Costs
Security Gains
8
15
(4Q 2014 Normalized) 1.05%
% ROA
* 1.05% normalized ROA for 4Q 2014 adjusted includes credit costs at long term
expectations for the industry (-11bps), the impact of securities gains, and one-time identifiable expenses related to corporate development activities and retirement benefit charge (+9bps)
1.07% (Reported)
2*
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1.40%
Q4 2014 Results
Goal
Tax rate
Credit costs
Efficiency ratio
Fee income growth
Net interest income
1Q 2013 Baseline |
 Business
Model and Total Shareholder Returns 24
* Completed by the Gallup Organization, as of December 31, 2013
** Per Bloomberg; closing price as of December 31, 2014
Focused Business Model
•
Gallup survey showed
WSFS best among top
players in market at
delivering
service
*
•
Consistently ranked in the
top quintile of all
businesses
surveyed
*
•
WSFS has been recog-
nized by The Wilmington
News Journal as a “Top
Workplace Award”
winner
nine years in a row; “Top 3”
the last 5 years running
•
Customer advocacy survey places
WSFS at the 89th percentile*
•
On a scale of 1-5, 44% of WSFS
customers rated us a “5”
(“strongly
agree”) saying “I can’t imagine a
world
without
WSFS”
*
•
Voted “Top Bank”
in Delaware 4
years running (The News Journal)
•
Builds sustainable real profit
growth
•
Leads to increased
shareholder value
•
Total Shareholder Returns**
WSFS
Nasdaq
Bank Index
1 year
(.12)%
4.91%
3 year
70.76%
49.52%
5 year
216.23%
80.25%
10 year
41.15%
5.64% |
 Appendices |
 Appendix
– Table of Contents
Section
Page #
•
Appendix
1
–
Management
Team
27-28
•
Appendix
2
–
Business
Model
29
•
Appendix
3
–
Non-GAAP
Financial
Information
30-31
•
Appendix
4
–
Alliance
Bancorp,
Inc.
presentation
32-41
26 |
 Appendix
1
–
Management
Team
•
Mark
A.
Turner,
52,
has
served
as
President
and
Chief
Executive
Officer
since
2007.
Mr.
Turner
was
previously
Chief Operating Officer and the Chief Financial Officer for WSFS. Prior to joining WSFS, his experience includes
working at CoreStates Bank and Meridian 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 Masters
Degree in Executive Leadership from the University of Nebraska and his Bachelor’s Degree in
Accounting and Management from LaSalle University.
•
Peggy
H.
Eddens,
59,
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
of Science Degree in Business Administration with minors in Management and Psychology
from Robert Morris University.
•
Stephen
A.
Fowle,
49,
Executive
Vice
President
and
Chief
Financial
Officer
since
2005.
From
2000
to
2004,
he
was Chief Financial Officer at Third Federal Savings and Loan Association of
Cleveland. Mr. Fowle received his Masters of Management, Finance and
Marketing from Northwestern University and his Bachelor’s Degree in
Chemistry from Stanford University.
•
Paul
D.
Geraghty,
61,
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 of Science in Accounting from Villanova
University and pursued graduate study in business at Lehigh University.
27 |
 Appendix
1
–
Management
Team
•
Thomas
W.
Kearney,
67,
Executive
Vice
President
and
Chief
Risk
Officer
has
been
with
WSFS
since
1998.
Mr. Kearney holds a Bachelor’s degree in Business Administration (Finance and
Accounting) from Drexel University. He also holds the professional designations
of Certified Bank Auditor (CBA) and Certified Financial Services Auditor (CFSA).
As Chief Risk Officer, Mr. Kearney’s primary responsibility is to manage and direct the
various oversight functions throughout the Company. These oversight functions include
Enterprise Risk Management, Loan Review, In-house Counsel, Security/Fraud
Investigations, Regulatory Compliance, Internal Control/Audit and Credit
Administration. •
Rodger
Levenson,
53,
Executive
Vice
President
and
Chief
Commercial
Banking
Officer
since
2006.
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. •
S.
James
Mazarakis,
58,
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 of Science degree in Management of Technology from
Polytechnic Institute of New York University. •
Thomas
Stevenson,
62,
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.
•
Richard
M.
Wright,
62,
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. 28 |
 Appendix
2
–
Business
Model
29 |
 Appendix
3
–
Non-GAAP
Financial
Information
Rev Mtg
Securities
Non-Routine
Debt
Consolidation
Corporate
Fraud/
(Gains)
BOLI
Bulk
Extinguishment
Gain / Tax
Development
Litigation
PRBO
Proforma
EPS
Losses
Income
Sale
Loss
Benefit
Costs
Costs
Adj.
EPS
4th Quarter 2011
0.63
(0.14)
0.49
1st Quarter 2012
0.66
(0.15)
0.51
2nd Quarter 2012
0.76
(0.95)
1.04
0.85
3rd Quarter 2012
1.06
(0.18)
(0.11)
0.77
4th Quarter 2012
0.78
(0.27)
0.27
0.78
1st Quarter 2013
1.02
(0.12)
0.90
2nd Quarter 2013
1.16
(0.07)
1.09
3rd Quarter 2013
1.54
(0.02)
(0.27)
0.01
1.26
4th Quarter 2013
1.33
(0.05)
0.04
1.32
1st Quarter 2014
1.85
(0.04)
(0.73)
0.02
1.10
2nd Quarter 2014
1.39
(0.03)
0.02
0.06
1.44
3rd Quarter 2014
1.23
(0.00)
0.18
0.07
1.48
4th Quarter 2014
1.32
(0.00)
0.07
0.04
1.43
30 |
  End of Period
December 31,
September 30,
December 31,
2014
2014
2013
Total assets
$
4,853,320
$
4,782,728
$
4,442,656
Less: Goodwill and other intangible assets
(57,593)
(58,176)
(39,541)
Total tangible assets
$
4,795,727
$
4,724,552
$
4,403,115
Total Stockholders' equity
$
489,051
$
476,324
$
373,951
Less: Goodwill and other intangible assets
(57,693)
(58,176)
(39,541)
Total tangible common equity
$
431,358
$
418,148
$
334,410
Calculation of tangible common book value:
Book Value (GAAP)
$
52.01
$
50.70
$
43.06
Tangible book value (non-GAAP)
45.89
44.50
38.68
Tangible common book value (non-GAAP)
45.89
44.50
36.68
Calculation of tangible common equity to assets:
Equity to asset ratio (GAAP)
10.08%
9.96%
8.48%
Tangible equity to asset ratio (non-GAAP)
9.00%
8.85%
7.69%
Tangible common equity to asset ratio (non-GAAP)
9.00%
8.85%
7.69%
Appendix
3
–
Non-GAAP
Financial
Information
Tangible common book value and equity to assets
31 |
 WSFS
Financial Corporation to acquire
Alliance Bancorp, Inc. of Pennsylvania
March 3, 2015
Appendix 4
32 |
 Forward-Looking Statement Disclaimer
33
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 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; 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. This presentation speaks only as of
its date, and WSFS disclaims any duty to update the information herein. |
 34
IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT In connection with
the proposed merger, WSFS will file with the SEC a Registration Statement on Form S-4 that will include a
proxy statement of Alliance and a prospectus of WSFS, as well as other relevant documents
concerning the proposed transaction. This communication does not constitute an
offer to sell or the solicitation of an offer to buy any securities or a
solicitation of any vote or approval. SHAREHOLDERS OF ALLIANCE ARE URGED TO READ THE
REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER
WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS
WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION.
A free copy of the Proxy Statement/Prospectus, as well as other filings containing
information about WSFS and Alliance, may be obtained at the SEC’s Internet
site (http://www.sec.gov), when they are filed. You will also be able to obtain these documents,
when they are filed, free of charge, from WSFS at www.wsfsbank.com under the heading
“About WSFS” and then under the heading “Investor Relations”
and then under “SEC Filings” or from Alliance by accessing Alliance’s website at
www.allianceanytime.com under the heading “Stockholder Information” and then
under “Corporate and Market Information”. Copies of the Proxy
Statement/Prospectus can also be obtained, when it becomes available, free of charge, by directing a
request to WSFS Financial Corporation, WSFS Bank Center, 500 Delaware Avenue, Wilmington,
Delaware 19801, Attention: Corporate Secretary, Telephone: (302) 792-6000 or
to Alliance Bancorp, Inc. of Pennsylvania, 541 Lawrence Road, Broomall,
Pennsylvania 19008, Attention: Corporate Secretary, Telephone: (610) 353-2900.
PARTICIPANTS IN THE SOLICITATION Alliance and
certain of its directors and executive officers may be deemed to be participants in the solicitation of proxies from
the shareholders of Alliance in connection with the proposed merger. Information about
the directors and executive officers of Alliance and their ownership of Alliance
common stock is set forth in the proxy statement for Alliance’s 2014 annual meeting of
shareholders, as filed with the SEC on Schedule 14A on March 19, 2014. Additional
information regarding the interests of those participants and other persons who
may be deemed participants in the transaction may be obtained by reading the Proxy
Statement/Prospectus regarding the proposed merger when it becomes available. Free copies
of this document may be obtained as described in the section above. |
 Strategic
Rationale Strategic Rationale
Financially Attractive
35
Consistent with WSFS’s strategic growth plan in
Southeastern PA
Only remaining independent community bank of scale
headquartered in attractive Delaware County market
Favorable demographics, similar to WSFS core markets
8 offices in overlapping and adjacent market; WSFS will have
17 locations in Southeastern PA at close
Alliance - Assets of $421mm; Loans $310mm; Deposits of
$345mm
Alliance customer base provides appealing cross-sell
opportunities for WSFS products and services including Array
Financial (residential mortgages), Treasury Management,
Mobile Banking, and Wealth Management.
Platform for future growth in Southeastern PA
Compatible culture; client focused community banking model
Accretive to first full year earnings per share excluding one-time
costs
Slight dilution to tangible book value earned back in 4.7 years
WSFS pro forma capital ratios well in excess of “well-capitalized”
guidelines following close
17% anticipated IRR
Pro forma ownership by Alliance shareholders in WSFS – 8.0% |
 Overview
of Alliance Bancorp, Inc. 1)
Represents bank level (Alliance Bank) financial data as of and for the year ended
December 31, 2014. Source: SNL Financial and Company provided information.
As of 12/31/14
36
$284
$303
$310
$270
$280
$290
$300
$310
$320
2012
2013
2014
Total Gross Loans ($mm)
76%
88%
90%
60%
70%
80%
90%
100%
2012
2013
2014
Loan / Deposits (%)
Financial Highlights
Total Assets ($mm)
420.8
Gross Loans ($mm)
310.2
Total Deposits ($mm)
344.8
Loans / Deposits
89.98%
Capital Ratios
Tangible Equity ($mm)
66.5
Tangible Equity / Tangible Assets
15.79%
Total Risk-Based Ratio
1
23.19%
Leverage Ratio
1
14.39%
Asset Quality Metrics
NPAs / Total Assets
1
1.72%
NPAs Ex. TDRs / Total Assets
1
0.60%
LLR / Gross Loans
1.44%
NCOs / Avg. Loans¹
0.07%
Profitability Metrics
Net Income ($mm)
2.6
Return on Average Assets
0.60%
Return on Average Equity
3.74%
Net
Interest
Margin¹
3.61% |
 Attractive Combined Franchise
37
(1)
Does not include purchase accounting adjustments.
(2)
Based on 20 Day Average WSFS share price as of 2/26/2015 of $77.77.
Source: SNL Financial and Company provided information.
Deposit Market Share (Delaware County) as of 6/30/2014
Rank
Institution
Branches
Deposits
($mm)
Market
Share
(%)
1
Toronto-Dominion Bank
15
2,354
19.8%
2
Wells Fargo & Co. (CA)
23
2,333
19.6%
3
Royal Bank of Scotland Group
21
1,625
13.7%
4
PNC Financial Services Group (PA)
11
1,111
9.4%
5
Banco Santander
13
832
7.0%
6
Bryn Mawr Bank Corp. (PA)
14
589
5.0%
7
Beneficial Bancorp Inc (PA)
6
413
3.5%
8
Bank of America Corp. (NC)
9
404
3.4%
Pro Forma
10
388
3.3%
9
Alliance Bancorp of Penn (PA)
7
342
2.9%
10
M&T Bank Corp. (NY)
9
261
2.2%
22
WSFS Financial Corp. (DE)
3
46
0.4%
Total (1-10)
128
10,263
86.4%
Total (1-31)
169
11,881
100.0%
($mm)
12/31/2014
Combined
(1)
Assets:
4,853
421
5,274
Gross Loans:
3,225
310
3,535
Deposits:
3,649
345
3,994
Market Cap
(2)
:
731
-
794
Offices:
55
8
63
Assets Under Management:
1,187
-
1,187
Assets Under Administration:
9,416
-
9,416
The combination creates the largest, most diversified, community bank headquartered in
the Delaware Valley (Philadelphia-Camden -Wilmington MSA). |
 Market
Demographics Delaware
Pennsylvania
New Castle
Kent
Sussex
Delaware
Chester
County
County
County
County
County
Total Population
551,010
171,028
207,614
562,633
511,036
Median Household Income
$66,757
$52,489
$56,481
$61,896
$80,383
% of Household Income > $100k
30.6%
16.5%
21.6%
28.5%
39.3%
Median Home Value
$254,448
$199,798
$245,039
$240,250
$324,247
Current Unemployment Rate
4.4%
4.6%
5.1%
4.5%
3.4%
WSFS Offices
(3)
28
9
8
4 / 11
(1)
4
(2)
/ 5
(1)
Distance from WSFS HQ to Alliance HQ
25 miles
25 miles
(1)
Pro Forma for Alliance.
(2)
Pro Forma including new WSFS Devon, PA office opening March 2015
(3)
WSFS offices in Nevada, Virginia, and Montgomery County, PA are not included in this
chart. Source: SNL Financial.
38
Alliance operates in a contiguous market with similar demographics to WSFS’s home
market, where we have had success for 183 years. |
 Pro Forma
Loans and Deposits Note: Financial data as of 12/31/2014. No purchase
accounting assumptions are incorporated in the pro forma loan and deposit
composition. Owner occupied CRE is classified as C&I.
Source: SNL Financial and Company provided information.
ALLB:
$310.2 mm
WSFS:
$3,224.6 mm
Pro Forma:
$3,534.8 mm
ALLB:
$344.8 mm
WSFS:
$3,649.2 mm
Pro Forma:
$3,994.0 mm
Pro Forma Loan Composition
Pro Forma Deposit Composition
39
Transaction
22%
MMDA &
Savings
22%
Retail CDs
54%
Jumbo CDs
2%
Transaction
43%
MMDA &
Savings
42%
Retail CDs
11%
Jumbo CDs
4%
Transaction
41%
MMDA &
Savings
40%
Retail CDs
15%
Jumbo CDs
4%
1-4 Family
10%
C&I
51%
CRE &
Multi
Family
26%
Constr.
and Dev.
5%
Other
Loans
8%
1-4 Family
8%
C&I
54%
CRE &
Multi
Family
25%
Constr.
and Dev.
4%
Other
Loans
9%
1-4 Family
39%
C&I
20%
CRE &
Multi
Family
31%
Constr.
and Dev.
8%
Other
Loans
1% |
 •
Approximately $92.0 million transaction value
•
70% common stock / 30% cash
•
0.28955 shares of WSFS or $22.00 in cash
•
Price / Tangible Book Value of 138.4%
•
Anticipated
closing
date
in
early
Q4
2015,
subject
to
completion
of
standard closing conditions, shareholder and regulatory approvals.
Transaction Overview and Financial Impact
Transaction
Structure
•
Assumptions based on comprehensive due diligence
•
One-time pre-tax transaction costs of $9.3 million
•
Cost savings of ~40% of Alliance’s non-interest expense base
•
Substantial
credit
diligence
undertaken;
expected
credit
mark
of
3.5%
•
No revenue synergies are modeled, but they are expected.
Assumptions
•
3.2% accretive to first full year earnings per share excluding one-time
costs •
Tangible book value dilution of 1.8%, earned back in 4.7 years
•
17% anticipated IRR
•
WSFS
pro
forma
capital
ratios
well
in
excess
of
“well-capitalized”
guidelines
following close
Financial Impact
40 |
 For more
information please contact: Investor Relations: Stephen Fowle
(302) 571-6833 or sfowle@wsfsbank.com
www.wsfsbank.com
Corporate Headquarters
500 Delaware Avenue
Wilmington, DE 19801
41 |