Attached files
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| EX-99.1 - EX-99.1 - WSFS FINANCIAL CORP | exhibit991earningsrele.htm |
| 8-K - 8-K - WSFS FINANCIAL CORP | wsfs-20200723.htm |
Exhibit 99.2 WSFS Financial Corporation 2Q 2020 Earnings Supplement July 23, 2020
Forward Looking Statements and Non-GAAP Financial Measures Forward Looking Statements This presentation contains estimates, predictions, opinions, projections and other "forward-looking statements" as that phrase is defined in the Private Securities Litigation Reform Act of 1995. Such statements include, without limitation, references to the Company's predictions or expectations of future business or financial performance as well as its goals and objectives for future operations, financial and business trends, business prospects, and management's outlook or expectations for earnings, revenues, expenses, capital levels, liquidity levels, asset quality or other future financial or business performance, strategies or expectations. The words “believe,” “expect,” “anticipate,” “plan,” “estimate,” “target,” “project” and similar expressions, among others, generally identify forward-looking statements. Such forward-looking statements are based on various assumptions (some of which may be beyond the Company's control) and are subject to significant risks and uncertainties (which change over time) and other factors, including the uncertain effects of the COVID-19 pandemic and actions taken in response thereto on our business, results of operations, capital and liquidity, which could cause actual results to differ materially from those currently anticipated. Such risks and uncertainties are discussed in detail the Company's Form 10-K for the year ended December 31, 2019 and other documents filed by the Company with the Securities and Exchange Commission from time to time. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date on which they are made, and the Company disclaims any duty to revise or update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company for any reason, except as specifically required by law. As used in this presentation, the terms "WSFS", "the Company", "registrant", "we", "us", and "our" mean WSFS Financial Corporation and its subsidiaries, on a consolidated basis, unless the context indicates otherwise. Non-GAAP Financial Measures This presentation contains financial measures determined by methods other than in accordance with accounting principles generally accepted in the United States (“GAAP”). These non-GAAP measures include core pre-provision net revenue (“PPNR”), core PPNR to average assets ratio and related measures. The Company’s management believes that these non-GAAP measures provide a greater understanding of ongoing operations, enhance comparability of results of operations with prior periods and show the effects of significant gains and charges in the periods presented. The Company’s management believes that investors may use these non-GAAP measures to analyze the Company’s financial performance without the impact of unusual items or events that may obscure trends in the Company’s underlying performance. This non-GAAP data should be considered in addition to results prepared in accordance with GAAP, and is not a substitute for, or superior to, GAAP results. For a reconciliation of these non-GAAP measures to their comparable GAAP measures, see the Appendix and our Earnings Release filed as Exhibit 99.1 to our July 23, 2020 8-K filing. 2
Table of Contents 2Q 2020 Financial Highlights Page 4 PPP Loans Page 5 CECL Page 6 Credit Risk Management Page 7 Balance Sheet and Commercial Loan Composition Page 8 Hotel Portfolio Page 10 Food Services Portfolio Page 11 Retail Portfolio Page 12 2H 2020 Outlook Net Interest Margin Outlook Page 13 Core Pre-Provision Net Revenue (PPNR) Outlook Page 14 Capital Position Page 15 Balance Sheet Growth Page 16 Appendix: Reconciliation of Non-GAAP Financial Information Page 17 3
2Q 2020 Financial Highlights Solid Core operating performance with pre-provision net revenue (PPNR)1 at 1.96% of average assets Significant ACL reserve build, excess capital levels, and a $0.12 dividend approved in the quarter 2Q 2020 (1) • Core results include $94.8 million of provision expense reducing core EPS by $1.49 $ in millions (expect per share amounts) Core and core ROA by 2.33% for 2Q 2020 EPS ($0.46) • ACL coverage ratio of 2.73% excluding PPP loans and 3.26% including (1) PPNR $63.5 estimated credit mark on acquired loans ROA (0.73%) • COVID-19 impact on “at-risk” (hotel, food services, and retail) portfolio credit ROTCE(1) (6.72%) migration and economic forecasts drove 2Q provision and ACL build NIM 3.93% • Excluding PPP loans of $945.1 million and purposeful run-off portfolios, gross loans were flat compared to 1Q 2020 and grew $223.0 million, or 3% year-over-year Fee Income/Total Revenue(2) 26.2% Efficiency Ratio 58.7% • Customer funding increased $1.4 billion from 1Q 2020 primarily due to an estimated $700 million from PPP customers and impact of government stimulus ACL Coverage Ratio 2.45% checks, delayed tax payments and lower overall customer spending Loan to Deposit Ratio 86% • Excluding $3.0 million of pre-tax net income from PPP, Core PPNR1 was $60.5 Common Equity Tier 1 Capital 12.68% million in 2Q 2020, or 1.98% of average assets (1) This is a non-GAAP financial measure and should be considered along with results prepared in accordance with GAAP, and not as a substitute for GAAP results. See Appendix and our Earnings Release filed at Exhibit 99.1 to our July 23, 2020 8-K filing for a summary of our 2Q 2020 GAAP results and a reconciliation of non-GAAP financial information to results reported in accordance with GAAP. 4 (2) Tax-equivalent
PPP Loans Nearly $1 billion of loans processed in 2Q 2020 supporting an estimated 100,000 jobs in our region PPP Loans as of June 30, 2020 PPP Loans by Size as of June 30, 2020 # of % of % of $ ($ in '000s) $ # of Loans Loan Size Loans total $ total # Construction $ 195,075 552 > $1M $358,764 175 39% 3% Professional, Scientific, and Technical 126,879 577 $500k-$1M 179,484 262 19% 5% Health Care and Social Assistance 101,495 505 $100k-500k 294,621 1,325 31% 26% Other Services (except Public Administration) 91,728 661 $50k-100k 59,775 841 6% 17% Manufacturing 70,747 177 $25k-50k 32,483 912 3% 18% Retail Trade 57,677 554 < $25k 20,009 1,490 2% 31% Food Services 54,723 352 Total $945,136 5,005 100% 100% Educational Services 42,401 129 Wholesale Trade 34,713 128 • Estimated $27 million of net fee accretion over the life of the loans Real Estate and Rental and Leasing 32,842 310 Admin Support/Waste Mngt/Remediation 26,577 171 • $4.8 million of net interest income, including $3.1 million of fee Hotels 12,554 70 accretion recorded in 2Q 2020. $1.8 million of costs in 2Q 2020 All Other 97,725 819 Total $ 945,136 5,005 • An estimated $27-28 million of net interest income including approximately $22M of fee accretion in 2020. Fee accretion assumes 75% loan forgiveness in 2H 2020 • Full-year costs of approximately $4-5 million expected, including Associate, third-party processing, consulting, and other costs 5
CECL Economic Forecast Full Year GDP of -6.1% in 2020 and 6.3% in 2021 Economic Forecast Impact Year-end Unemployment of 9.3% in 2020 and 7.6% in 2021 Coverage*: 1.60% 2.73% ACL by Segment ACL Considerations • 2Q 2020 ACL increase of $93 million driven by: • Slower forecasted recovery in unemployment • Prolonged lower interest rate environment 1 • Portfolio migration, driven by targeted review of at-risk 1 portfolios, including hotels and food services segments • Coverage ratio 3.26%, including estimated remaining credit mark on the acquired loan portfolio • YTD PPNR offsets nearly 90% of YTD Provision for Credit Losses of $151.4 million. PPNR combined with Visa Class B gain drive positive GAAP Net Income of $3.8 million YTD. * Excludes PPP Loans 1 Hotel loan balances are included in the C&I and Construction segments. See page 10 for additional details on the Hotel portfolio. 6
Credit Risk Management Original Loan Modifications1 Loan # of % of Active Management of Payment Deferrals First Modification ($ in '000s) Balances Loans Portfolio CRE $ 700,889 624 32% • At least 75% of original loan modifications expected to revert to full C&I 636,426 1,165 32% contractual payment terms in 3Q 2020 based on portfolio wide customer Owner Occupied 380,432 591 28% conversations Construction 109,861 41 17% Total Commercial $ 1,827,608 2,421 30% • New modification requests substantially ended in May 2020 Residential Mortgage $ 86,581 418 9% Leases 39,298 1,114 18% Consumer 35,545 744 4% • Approximately 25% of original commercial loan modifications made some 2 Education 29,333 149 24% level of payment during the 90 day period Credit Cards 284 24 3% Total Loan Portfolio $ 2,018,649 4,870 24% Expedited and Targeted Portfolio Risk Reviews Original Commercial Modifications by Sector3 Loan # of % of • $1.1 billion of loans within “at risk” portfolios reviewed through 2Q 2020 ($ in '000s) Balances Loans Portfolio Real Estate Rental and Leasing (ex Retail) 573,358 658 24% • Segment level targeted reviews include: Retail 4 363,376 320 66% • All Hotel loans Hotel 4 309,043 79 62% Other Services (ex Public Admin) 116,413 306 31% • Large Retail CRE and Retail Trade loans 4 Food Services 129,332 238 68% • Large Food Services loans Health Care and Social Assistance 84,330 226 32% Manufacturing 54,210 86 20% • All syndicated loans, SNC’s, and leveraged lending transactions, which are limited Construction 41,634 137 8% • Balance of portfolio will be reviewed during 3Q 2020 as part of our standard All Other 155,912 371 14% Total Commercial $ 1,827,608 2,421 30% quarterly credit risk management process 1 Balance of “First Round” loan modifications as of June 30, 2020 as 99% were 90 days or less. 2 Approximately 75% of the loan balances include U.S. government-guaranteed student loans that carry little risk of credit loss 3 Amounts are included in total $2.0 billion of original loan modifications. 7 4 See slides 10-12 for additional information related to these industry sectors.
Balance Sheet Composition at June 30, 2020 Asset Composition Funding Composition Assets: $12.61 Billion; Net Loans: $8.31 Billion Customer Deposits: $10.8 Billion Time CRE, 25% Net Loans (ex PPP) 11% Non-interest Consumer, DDA 30% Customer Deposits 80% 65% 13% C&I, 39% Money Market & Savings 38% Interest DDA Other Non- Residential 21% Earning Assets Mortgage, 12% 13% Construction, 8% Commercial Leasing, 3% Other Liabilities 3% Cash • Excluding PPP, Commercial • Core deposits represent Investments 19% 89% of total customer Other Connect loans comprise 75% of the Equity 13% Borrowings 3% gross loan portfolio deposits 4% • 85% of consumer loans are • Non-interest and very low • Investments composed of high quality, • Customer Funding increased $1.4 billion in secured interest DDA (WAC 7 bps) marketable investment grade securities 2Q 2020 primarily due to an estimated $700 represent 51% of customer with low credit risk with more than 90% in • Low credit card exposure: funding million from PPP loans along with pandemic MBS issued by GNMA, FNMA or FHLMC $9.8 million at June 30, 2020 related excess customer liquidity 1 Excludes $945 million of PPP loans at June 30, 2020. 8
Commercial Loan Portfolio (ex PPP) at June 30, 2020 C&I and Owner Occupied - $3.4 billion4 CRE Investor and Construction - $2.8 billion Real Estate Rental Special Use & Mixed Use, Flex, Warehouse, Well Diversified and Granular and Leasing, 10% Other, 8% 2% Self-Storage, Other, 20% General Industrial, • No single industry, CRE, project, or 9% individual borrower concentrations Hotels , 13% Residential • House Limit: $70 million at Wholesale Multi-Family, Trade, 5% 6/30/2020 (1 Relationship) 26% Office, 18% Food Services, • 5 relationships >$50 million Professional, 6% 1 Scientific and • CRE - 208% Technical • CLD2 - 59% Services, 5% Other Services (except Public Health Care and Administration), • In compliance with all 20 Board Social Assistance, 7% 10% Residential 1-4, Retail, 26% approved concentration limits at Construction, Retail Trade, 12% Manufacturing, 8% June 30, 2020 8% 8% No or Low Exposure Industries3: • No direct exposure to Energy, Casinos & Gambling, and Cruise Lines • Less than $15 million combined exposure to Movie Theaters, Amusement, and Aviation 1 Defined as the sum of CRE and Construction (excluding owner occupied) exposures divided by the sum of Tier-1 Capital and ACL. 2 Defined as Construction and land development (excluding owner occupied) exposure divided by the sum of Tier-1 Capital and ACL. 3 As defined by the North American Industry Classification System (NAICS). 9 4 Excludes $945 million of PPP loans as of June 30, 2020.
Hotel Portfolio at June 30, 2020 • Risk-rating reviews completed for entire portfolio in 2Q 2020 Hotels (ex PPP)1 • 48% of balances Criticized at June 30, 2020 Loan Type Loan Average ($ in millions) Balances Loan Size • Approximately 60% of balances with original modification C&I/Owner-Occupied $422.5 $7.2 • Around 35-40% of original modifications expected to revert to contractual payment terms in 3Q 2020 Construction $78.1 $7.1 • $13 million of PPP loans Total $500.5 $7.2 • Conservative underwriting with current weighted average LTV of ~55% EXPOSURE BY BRAND • Locally based operators with experienced sponsors Other 9% Marriott, 27% Independent • All but one property is currently open 18% • Approximately 75% of the portfolio has full or partial recourse • Over two-thirds of hotel exposure to large brands (Hilton, Marriott, InterContinental and InterContinental) 9% Hilton, 37% 1 NAICS Code 721110 – Hotels (except Casino Hotels) and Motels 10
Food Services Portfolio at June 30, 2020 • Approximately 50% of total portfolio, including majority of loans over $1 million, were reviewed in 2Q 2020 1 Food Services (ex PPP) • 13% of balances Criticized at June 30, 2020 Loan Type Loan Average • Approximately two-thirds of balances with original modification ($ in millions) Balances Loan Size • Around 80% of original modifications expected to revert to contractual payment terms in 3Q 2020 C&I $109.1 $0.3 • $55 million of PPP loans Owner-Occupied $83.2 $0.5 • Approximately 50% of balances are secured by real-estate CRE/Construction $7.6 $0.5 • Six of the seven largest borrowers are associated with multi-site Total $199.9 $0.4 operations • Granular portfolio with average balance of $400,000 • Nearly all large relationships include recourse 1 Reflects 11 unique NAICS codes covering Restaurants, Bars, Caterers, Mobile Food Services, and Food Service Contractors. 11
Retail Portfolio at June 30, 2020 Retail CRE (ex PPP) Retail Trade (ex PPP) Loan Type Loan Average Loan Type Loan Average ($ in millions) Balances Loan Size ($ in millions) Balances Loan Size C&I $116.0 $0.2 Total $741.3 $1.3 Owner Occupied $150.1 $0.6 • All large loans over $8 million and nearly half of the entire portfolio reviewed in 2Q 2020 Total $266.1 $0.4 • 5% of balances Criticized at June 30, 2020 • Reviewed largest loans totaling ~$100 million in exposure in 2Q • Approximately 50% of balances with original modification 2020 • Around 80% of original modifications expected to revert to • 7% of balances Criticized at June 30, 2020 contractual payment terms in 3Q 2020 • Approximately 5% of balances with original modification • No outstanding loan balances to indoor shopping malls; limited • Over 80% of original modifications expected to revert to exposure to power centers contractual payment terms in 3Q 2020 • Top 9 loan balances represent approximately 20% of total portfolio • Granular portfolio with no loans over $10 million with approximately 70% anchored by grocery stores • Minimal PPP loans • $58 million of PPP loans 12
Net Interest Margin Outlook • 2Q 2020 included full quarter impact of the March 150 4.75% 3.73% - 4.08% - bps Fed Fund rate decrease and negative 8 bps from 4.38% 3.93% 13 4.50% 3.83% 4.18% PPP; 1Q and 2Q 2020 included elevated purchase 0 accounting accretion (PAA) due to payoffs, which are 0.22% Negative 8 bps 4.25% PPP impact uneven 4.00% 0.31% 0.30% • 3Q outlook reflects margin compression from lower PAA, full quarter of lower LIBOR; declining loan and 3.75% 0.30% MBS yields from portfolio churn, and; margin 3.85% 0.27% 0.28% compression from significant excess liquidity 3.50% 3.58% 3.50% • 4Q outlook reflects 30 bps from PPP (loan forgiveness 3.43% 3.25% timing) plus core margin increase from reduced excess liquidity and increased deposit betas 3.00% 1Q 2020 2Q 2020 3Q 2020 Outlook 4Q 2020 Outlook • Deposit and Loan betas are ~25-30% for down rate NIM Ex PAA/PPP Modeled PAA Accretion cycle Incremental PAA Accretion PPP 13
Core PPNR1 Outlook $ in million’s 120.0 2.50% 2.36% • Outlook assumes no Fed rate changes and continued 1.93% - gradual reopening of the economy 100.0 1.98% 1.77% - 2.15% 1.98% 2.00% • Excluding PPP, core PPNR as a percentage of average 1.96% 1.66%- 1 80.0 1.70%- 1.83% assets is expected to decline in 3Q and 4Q 2020 due 71.5 1.85% 1.50% primarily to the following: 63.5 59 – 66 61 – 68 3.0 60.0 2 Decline in NIM from factors described in the NIM outlook 7 – 9 11 –132 • on page 13 1.00% 40.0 • Approximately $2.5 to $3.0 lower quarterly interchange 71.5 60.5 52- 57 50 – 55 revenue due to Durbin (Effective July 2020) 0.50% 20.0 • Lower mortgage revenue compared to 2Q 2020 due to expected decline in refinancing volume 0.0 0.00% • Above declines partially offset by expected lower 1Q 2020 2Q 2020 3Q 2020 4Q 2020 noninterest expenses, including non-provision credit costs PPNR (ex PPP) PPP PPNR % Assets PPNR % Assets (ex PPP) 1 This is a non-GAAP financial measure and should be considered along with results prepared in accordance with GAAP, and not as a substitute for GAAP results. See Appendix for a reconciliation of Core PPNR and Core PPNR as a percentage of assets to their comparable GAAP measures. 14 2 PPP pre-tax net income forecasted to grow in 3Q and 4Q based on anticipated loan forgiveness timing.
Capital Position Common Equity Tier-1 (CET1) Capital Ratio Scenario1 ACL Capacity1 Six Quarter PPNR Run-Rate and ACL Capacity to Remain “Well” Capitalized (Six Quarters Ending 4Q 2021) $ in millions 1 Common Equity Tier 1 Capital - 2Q20 $ 1,292 PPNR Run-Rate (after-tax)1 263 Dividend Run-Rate (36) Capacity to Absorb Additional ACL (858) "Well" Capitalized Minimum - 4Q21 $ 661 • PPNR (after-tax) run-rate1 provides approximately 43 bps of CET1 per quarter. After estimated routine dividends, the Bank could absorb approximately $858 million of additional provision for credit losses and remain well capitalized • Incremental $858 million is an addition to $232 million ACL at June 30, 2020 and estimated $45 million of remaining • Quarterly cash dividend of $0.12 per share of common stock to be paid credit mark on acquired loan portfolio August 2020 • PPNR run-rate fully absorbs “severely adverse” loss scenario • Share repurchases temporarily suspended • Excess capacity can absorb 3 times the “severely” adverse loss scenario 1 Assumed PPNR Run-Rate reflects 2H 2020 Outlook on page 14 and an estimated $55 million quarterly PPNR (pre-tax) per quarter scenario for 2021. 15
2Q 2020 Loan and Deposit Growth Loans - 2Q'20 vs 1Q'20 and 2Q'19 Mar Jun 2Q'20 $ Annualized YOY $ YOY % ($ in millions) Jun 2020 2020 2019 Growth % Growth Growth Growth • We continue to execute our strategy to optimize our C & I Loans $ 3,354 $ 3,412 $ 3,421 $ (58) -7% (67) -2% PPP Loans 945 0 0 945 100% 945 100% loan mix towards relationship-based, higher yielding C&I Commercial Mortgages 2,166 2,223 2,281 (58) -10% (116) -5% Construction Loans 638 626 540 12 8% 98 18% loans Commercial Leases 213 202 156 11 22% 57 37% Total Commercial Loans 7,316 6,463 6,398 853 53% 918 14% Residential Mortgage (HFS/HFI/Rev Mgt) 1,012 1,055 1,134 (43) -16% (122) -11% Consumer Loans 1,133 1,118 1,131 15 5% 2 0% • Excluding PPP loans of $945.1 million and purposeful Total Gross Loans 9,461 8,636 8,665 825 38% 796 9% Run-Off Portfolios run-off portfolios, gross loans were flat compared to 1Q Residential Mortgage (HFI) 892 955 1,070 (63) -27% (177) -17% Student Loans Acquired from BNCL 119 123 133 (3) -10% (14) -11% 2020 and grew $223.0 million, or 3% year-over-year Auto Loans Acquired From BNCL 33 40 69 (7) -70% (36) -52% Participation portfolios (CRE) from BNCL 169 210 253 (41) -79% (84) -33% Leveraged Loans (C&I) from BNCL 12 12 72 0 0% (60) -83% Total Run-Off Portfolios 1,225 1,340 1,597 (115) -35% (372) -23% • Customer funding increased $1.4 billion from 1Q 2020 Gross Loans ex Run-Off Portfolios 8,236 7,296 7,068 940 52% 1,168 17% PPP Loans 945 0 0 945 100% 945 100% and $1.5 billion year-over-year primarily due to an Gross Loans ex Run-Off & PPP Portfolios 7,291 7,296 7,068 (5) 0% 223 3% estimated $700 million from PPP customers and impact Deposits - 2Q'20 vs 1Q'20 and 2Q'19 of government stimulus checks, delayed tax payments Mar Jun 2Q'20 $ Annualized YOY $ YOY % ($ in millions) Jun 2020 2020 2019 Growth % Growth Growth Growth and lower overall customer spending Noninterest Demand $ 3,189 $ 2,315 $ 2,190 $ 874 152% 999 46% Interest Demand Deposits 2,302 2,093 2,092 209 40% 210 10% Savings 1,732 1,595 1,625 137 35% 107 7% Money Market 2,333 2,149 2,005 184 34% 328 16% Total Core Deposits 9,556 8,152 7,912 1,404 69% 1,645 21% Customer Time Deposits 1,228 1,272 1,359 (44) -14% (131) -10% Total Customer Deposits1 10,784 9,424 9,271 1,359 58% 1,513 16% 16
Appendix : Non-GAAP Financial Information
Appendix: 2Q 2020 Reported Financial Results 2Q 2020 • GAAP results for 2Q 2020 were significantly impacted by the continued $ in millions (expect per share amounts) impacts of COVID-19 and included $94.8 million (pre-tax), or $1.49 per share EPS ($0.14) (after-tax) of provision for credit losses due to portfolio credit migration and deterioration in economic forecasts PPNR (1) $84.7 ROA (0.22%) • 2Q 2020 GAAP results also include: ROTCE(1) (1.55%) • $22.1 million (pre-tax), or $0.35 per share (after-tax), net realized gain on sale of 360,000 Visa Class B shares. Cumulative realized and NIM 3.93% unrealized gains and dividends on Visa Class B shares total $78.0 Fee Income/Total Revenue(2) 36.1% million on a total portfolio investment of $17.7 million Efficiency Ratio 52.4% • $2.8 million (pre-tax), or $0.04 per share (after-tax) of corporate development expense related to our acquisition of Beneficial ACL Coverage Ratio 2.45% • $1.9 million, or $0.03 per share (after-tax) from realized gain on sale of Loan to Deposit Ratio 86% other investment Common Equity Tier 1 Capital 12.68% (1) This is non-GAAP financial information and should be considered along with results prepared in accordance with GAAP, and not as a substitute for GAAP results. See Appendix2 a reconciliation of non-GAAP financial information. (2) Tax-equivalent 18
Appendix: Non-GAAP Financial Information Three Months Ended Three Months Ended June 30, March 31, June 30, June 30, June 30 , March 31,2020 (dollars in thousands, except per share data) 2020 2020 2019 (dollars in thousands, except per share data) 2020 2019 Net interest income (GAAP) $ 113,756 $ 116,150 $ 123,232 Net (loss) income (GAAP) $ (7,811) $ 10,567 $ 35,969 Core net interest income (non-GAAP) $ 113,756 $ 116,150 $ 123,232 Plus: Income tax (benefit) provision (2,247) 1,288 10,091 Noninterest income (GAAP) $ 64,375 $ 40,847 $ 42,871 Plus: Provision for credit losses 94,754 56,646 12,195 Less: Securities gains 1,908 693 63 Pre-provision net revenue (PPNR) (Non-GAAP) 84,696 68,501 58,255 Less: Unrealized (loss) gains on equity investment (11) 668 1,033 Less: Realized Gain on Sale 22,052 Plus (less): Pre-tax adjustments (1) (21,148) 2,980 14,731 Core fee income (non-GAAP) $ 40,426 $ 39,486 $ 41,775 Core PPNR (Non-GAAP) $ 63,548 $ 71,481 $ 72,986 Core net revenue (non-GAAP) $ 154,182 $ 155,636 $ 165,007 Core net revenue (non-GAAP)(tax-equivalent) $ 154,513 $ 155,905 $ 165,325 GAAP return on average assets (ROA) -0.22% 0.36% 1.20% (1) Noninterest expense (GAAP) $ 93,435 $ 88,496 $ 107,848 Plus (less): Pre-tax adjustments -0.65% 0.10% 0.49% (Plus)/less: Recovery of fraud loss - - - (Plus) less: Tax impact of pre-tax adjustments (ROA) 0.14% -0.07% -0.12% Less: Corporate development expense 2,801 1,341 13,946 Core ROA (non-GAAP) -0.73% 0.39% 1.57% Less: Restructuring expense - - 1,881 EPS (GAAP) $ (0.14) $ 0.21 $ 0.68 (1) Less: Contribution to WSFS Community Foundation - 3,000 - Plus (less): Pre-tax adjustments (0.42) 0.06 0.28 Core noninterest expense (non-GAAP) $ 90,634 $ 84,155 $ 92,021 (Plus) less: Tax impact of pre-tax adjustments (EPS) 0.10 (0.04) (0.08) Core efficiency ratio 58.7% 54.0% 55.7% Core EPS (non-GAAP) $ (0.46) $ 0.23 $ 0.88 Core fee income as a percentage of total core net revenue (tax equivalent) 26.2% 25.3% 25.3% GAAP net (loss) income attributable to WSFS $ (7,111) $ 10,927 $ 36,200 (1) Plus (less): Pre-tax adjustments (21,148) 2,980 14,731 (Plus)/less: Tax impact of pre-tax adjustments 4,712 (2,020) (3,580) Adjusted net (loss) income (non-GAAP) attributable to WSFS $ (23,547) $ 11,887 $ 47,351 (1) Pre-tax adjustments include Securities gains, unrealized gains on equity investments, corporate development and restructuring expense, recovery of fraud loss, and contribution to WSFS Community Foundation 19
Appendix: Non-GAAP Financial Information $ in 000's 1Q'19 2Q'19 3Q'19 4Q'19 TTM 4Q'19 1Q'20 2Q'20 Net Income $ 12,930 $ 35,969 $ 53,595 $ 45,424 $ 147,918 $ 10,567 $ (7,811) Plus: Income Tax Provision 6,260 10,091 15,902 14,199 46,452 1,288 (2,247) Plus: Provision for Credit Losses 7,654 12,195 4,121 1,590 25,560 56,646 94,754 Plus/Less: Core Adjustments (1) 27,176 14,731 (2,467) 5,419 44,859 2,980 (21,148) Core Pre-Provision Net Revenue $ 54,020 $ 72,986 $ 71,151 $ 66,632 $ 264,789 $ 71,481 $ 63,548 PPP Income - - - - - - 4,836 PPP Expense - - - - - - (1,814) PPP - - - - - - 3,022 Core Pre-Provision Net Revenue, Less PPP $ 54,020 $ 72,986 $ 71,151 $ 66,632 $ 264,789 $ 71,481 $ 60,526 Average Assets $ 9,099,176 $ 12,122,966 $ 12,418,420 $ 12,226,162 $ 11,466,681 $ 12,159,524 $ 13,020,715 PPP Average Assets $ 727,377 Average Assets less PPP $ 12,293,338 PPNR/Avg Assets (annualized) 2.41% 2.41% 2.27% 2.16% 2.31% 2.36% 1.96% PPNR less PPP/Avg Assets (annualized) 2.41% 2.41% 2.27% 2.16% 2.31% 2.36% 1.98% 1 For detail on our core adjustments for 2Q'20, 1Q'20 and 2Q'19 refer to our Earnings Release filed at Exhibit 99.1 to our July 23, 2020 8-K filing. For detail on our core adjustments for 4Q'19 and 1Q'19, refer to our Earnings Release filed at Exhibit 99.1 to our April 27,2020 8-K filing. For detail on our core adjustments for 3Q'19, refer to our Earnings Release filed at Exhibit 99.1 to our 20 October 22,2019 8-K filing.
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 302-504-9857 stockholderrelations@wsfsbank.com www.wsfsbank.com Rodger Levenson Dominic C. Canuso Chairman, President and CEO Chief Financial Officer 302-571-7296 302-571-6833 rlevenson@wsfsbank.com dcanuso@wsfsbank.com 21