8-K
WSFS FINANCIAL CORP (WSFS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
April 22, 2021
Date of Report
(Date of Earliest Event Reported)
WSFS Financial Corporation
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 001-35638 | 22-2866913 |
|---|---|---|
| (State or Other Jurisdiction<br>of incorporation) | (SEC Commission<br>File Number) | (IRS Employer<br>Identification Number) |
500 Delaware Ave,
Wilmington, Delaware, 19801
(Address of Principal Executive Offices) (Zip Code)
Registrant’s Telephone Number, including Area Code: (302) 792-6000
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
|---|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
| Securities registered pursuant to Section 12(b) of the Act: | ||
| --- | --- | --- |
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock, par value $0.01 per share | WSFS | Nasdaq Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 40.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operation and Financial Condition
On April 22, 2021, the WSFS Financial Corporation (the “Registrant”) issued a press release to report earnings for the quarter ended March 31, 2021. A copy of the press release is furnished with this Form 8-K as Exhibit 99.1.
This information (including Exhibit 99.1) is being furnished under Item 2.02 hereof and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and such information shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 7.01 Regulation FD Disclosures
The attached presentation contains information that the members of the Registrant's management will use during visits with investors, analysts, and other interested parties to assist their understanding of the Registrant from time to time throughout the second quarter of 2021. Other presentations and related materials will be made available as they are presented during the year. A copy of the investor presentation is furnished with this Form 8-K as Exhibit 99.2.
This information (including Exhibit 99.2) is being furnished under Item 7.01 hereof and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, and such information shall not be deemed incorporated by reference into any filing under the Securities Act, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Other Exhibits
(d) Exhibits.
99.1 Press Release, datedApril22, 2021
99.21Q 2021exhibit992vf1q21earnings.htmInvestor Presentation, dated April 22,2021
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, hereunto duly authorized.
| WSFS FINANCIAL CORPORATION | |||
|---|---|---|---|
| Date: | April 22, 2021 | By: | /s/ Dominic C. Canuso |
| Dominic C. Canuso<br>Executive Vice President and<br>Chief Financial Officer |
Document
| WSFS Bank Center | 1 | |
|---|---|---|
| 500 Delaware Avenue, | ||
| Wilmington, Delaware 19801 | ||
| EXHIBIT 99.1 | ||
| --- | --- | |
| FOR IMMEDIATE RELEASE | Investor Relations Contact: Dominic C. Canuso | |
| (302) 571-6833; dcanuso@wsfsbank.com | ||
| April 22, 2021 | Media Contact: Rebecca Acevedo | |
| (215) 253-5566; racevedo@wsfsbank.com |
WSFS REPORTS 1Q 2021 EPS OF $1.36 AND ROA OF 1.85%;
RESULTS REFLECT DIVERSIFIED REVENUE AND IMPROVING CREDIT TRENDS;
BOARD APPROVES AN 8% INCREASE IN CASH DIVIDEND
WILMINGTON, Del. — WSFS Financial Corporation (Nasdaq: WSFS), the parent company of WSFS Bank, today announced its financial results for the first quarter of 2021.
Selected quarterly financial results and metrics are as follows:
| (Dollars in millions, except per share data) | 1Q 2021 | 4Q 2020 | 1Q 2020 | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Net interest income | $ | 114.2 | $ | 123.0 | $ | 116.2 | |||
| Fee income | 47.8 | 46.6 | 40.8 | ||||||
| Total net revenue | 162.0 | 169.6 | 157.0 | ||||||
| (Recovery of) provision for credit losses | (20.2) | (0.9) | 56.6 | ||||||
| Noninterest expense | 95.6 | 93.4 | 88.5 | ||||||
| Net income attributable to WSFS | 65.1 | 59.8 | 10.9 | ||||||
| Pre-provision net revenue (PPNR)(1) | 66.4 | 76.3 | 68.5 | ||||||
| Earnings per share (diluted) | 1.36 | 1.20 | 0.21 | ||||||
| Return on average assets (ROA) | 1.85 | % | 1.73 | % | 0.36 | % | |||
| Return on average equity (ROE) | 14.9 | 13.0 | 2.4 | ||||||
| Efficiency ratio | 58.9 | 55.0 | 56.3 |
GAAP results for the quarterly periods shown below included the following items that are excluded from core results. For 1Q 2021, the $1.8 million of corporate development and restructuring expense primarily relates to our pending combination with Bryn Mawr Bank Corporation (“Bryn Mawr”) anticipated to close in early 4Q 2021.
| 1Q 2021 | 4Q 2020 | 1Q 2020 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in millions, except per share data) | Total<br>(pre-tax) | Per share<br>(after-tax) | Total<br>(pre-tax) | Per share<br>(after-tax) | Total<br>(pre-tax) | Per share<br>(after-tax) | ||||||
| Securities gains | $ | 0.3 | $ | 0.01 | $ | 3.2 | $ | 0.05 | $ | 0.7 | $ | 0.01 |
| Unrealized gain on equity investments, net | — | — | — | — | 0.7 | 0.01 | ||||||
| Corporate development and restructuring expense | 1.8 | 0.04 | 0.3 | 0.01 | 1.3 | 0.02 | ||||||
| Contribution to WSFS Community Foundation | — | — | — | — | 3.0 | 0.04 |
(1) As used in this press release, PPNR is a non-GAAP financial measure calculated as net revenue before provision for credit losses and net of noninterest expense. For a reconciliation of this and other non-GAAP financial measures to their comparable GAAP measures, see "Non-GAAP Reconciliation" at the end of the press release.
| WSFS Bank Center | 2 | |
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| 500 Delaware Avenue, | ||
| Wilmington, Delaware 19801 |
CEO Commentary
Rodger Levenson, Chairman, President and CEO, said, “Our 1Q results included a core ROA(2) of 1.89%, a 20% increase in year-over-year core fee revenue(2), and improvement across key credit metrics. Our solid operating results and strong capital position continue to provide momentum to capture significant organic growth opportunities.
“The quarter reflected the strengthening of our Customers’ financial health from improved macroeconomic conditions and outlook along with benefits from government stimulus programs. These positive economic developments combined with improved credit quality metrics resulted in a $24.0 million release of our allowance for credit losses (“ACL”) during the quarter, while still maintaining a significant ACL coverage ratio of 2.51% (excluding Paycheck Protection Program (“PPP”) loans) at March 31st.
“Throughout the pandemic, we have focused on serving our Customers and investing in franchise growth. During the quarter, we supported nearly $300 million of second round PPP loans to over 1,800 WSFS and non-WSFS Customers. We also were excited to announce our agreement to combine with Bryn Mawr during the quarter. When combined WSFS will be the premier, locally-headquartered, bank and wealth management franchise in the Greater Philadelphia and Delaware region.
“We were honored to be ranked number 10 on the Forbes 12th Annual America's Best Banks list and to receive The Gallup Exceptional Workplace Award for the fifth time during the quarter. These recognitions demonstrate our commitment to sustainable long-term high performance driven by our talented and engaged Associates.”
(2) As used in this press release, core ROA and core fee revenue (noninterest income) are non-GAAP financial measures. Core ROA is calculated as GAAP ROA less certain pre-tax adjustments and the tax impact of such adjustments and core fee revenue excludes securities gains and unrealized/realized gains on equity investments, net. For a reconciliation of these and other non-GAAP financial measures to their comparable GAAP measures, see "Non-GAAP Reconciliation" at the end of the press release.
| WSFS Bank Center | 3 | |
|---|---|---|
| 500 Delaware Avenue, | ||
| Wilmington, Delaware 19801 |
Highlights for 1Q 2021:
•Core ROA was 1.89% in 1Q 2021 compared to 0.39% for 1Q 2020.
•Core EPS(3) was $1.39 in 1Q 2021 compared to $0.23 for 1Q 2020.
•Total net credit (recoveries) costs were $(19.0) million and net charge-offs were $3.8 million, or 0.18% of average gross loans during the quarter. 1Q 2021 results reflected $24.0 million release of ACL as credit quality improved quarter-over-quarter, including declines in problem assets, nonperforming assets, and delinquencies. The ACL coverage ratio was 2.51%, excluding PPP loans, at March 31, 2021.
•Core fee revenue (noninterest income) was $47.5 million, an increase of $8.0 million, or 20% compared to 1Q 2020. The increase included $2.2 million of referral fees related to PPP round two loans and growth across most fee businesses reflecting the diversity of our business model offset by a $2.7 million year-over-year adverse impact from the Durbin Amendment on debit fees and the lower interest rate environment on Cash Connect® bailment fees.
•WSFS supported nearly $300 million of second round PPP loans, which are not on the balance sheet, to over 1,800 WSFS and non-WSFS Customers during the quarter. $231.4 million of round one PPP loans were forgiven during the quarter and $526.8 million remain as of March 31, 2021.
•The Board of Directors approved a quarterly cash dividend of $0.13 per share of common stock, an 8% increase from our cash dividend in 4Q 2020. During the quarter, WSFS repurchased 267,309 shares at an average price of $44.97, totaling $12.0 million.
(3) As used in this press release, core EPS is a non-GAAP financial measure. This non-GAAP financial measure excludes certain pre-tax adjustments and the tax impact of such adjustments. For a reconciliation of this and other non-GAAP financial measures to their comparable GAAP measures, see "Non-GAAP Reconciliation" at the end of the press release.
| WSFS Bank Center | 4 | |
|---|---|---|
| 500 Delaware Avenue, | ||
| Wilmington, Delaware 19801 |
First Quarter 2021 Discussion of Financial Results
Balance Sheet
The following tables summarize loan and lease and customer deposit balances and composition at March 31, 2021 compared to December 31, 2020 and March 31, 2020:
| Loans and Leases | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands) | March 31, 2021 | December 31, 2020 | March 31, 2020 | |||||||||
| Commercial & industrial | $ | 3,212,970 | 38 | % | $ | 3,299,118 | 37 | % | $ | 3,412,266 | 40 | % |
| Commercial real estate (CRE) | 1,975,966 | 23 | 2,086,062 | 23 | 2,223,117 | 26 | ||||||
| PPP | 526,789 | 6 | 751,199 | 8 | — | — | ||||||
| Construction | 784,101 | 9 | 716,275 | 8 | 626,253 | 8 | ||||||
| Commercial small business leases | 264,937 | 3 | 248,885 | 3 | 201,753 | 2 | ||||||
| Total commercial loans | 6,764,763 | 79 | 7,101,539 | 79 | 6,463,389 | 76 | ||||||
| Residential mortgage | 829,234 | 10 | 954,824 | 11 | 1,054,544 | 13 | ||||||
| Consumer | 1,140,034 | 13 | 1,165,917 | 13 | 1,118,287 | 13 | ||||||
| ACL | (204,818) | (2) | (228,804) | (3) | (139,073) | (2) | ||||||
| Net loans and leases | $ | 8,529,213 | 100 | % | $ | 8,993,476 | 100 | % | $ | 8,497,147 | 100 | % |
| Customer Deposits | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (Dollars in thousands) | March 31, 2021 | December 31, 2020 | March 31, 2020 | |||||||||
| Noninterest demand | $ | 3,857,610 | 31 | % | $ | 3,415,021 | 29 | % | $ | 2,314,982 | 25 | % |
| Interest-bearing demand | 2,659,336 | 22 | 2,635,740 | 23 | 2,093,388 | 22 | ||||||
| Savings | 1,886,222 | 16 | 1,774,332 | 15 | 1,594,735 | 17 | ||||||
| Money market | 2,721,647 | 22 | 2,654,439 | 23 | 2,149,119 | 23 | ||||||
| Total core deposits | 11,124,815 | 91 | 10,479,532 | 90 | 8,152,224 | 87 | ||||||
| Customer time deposits | 1,093,984 | 9 | 1,158,845 | 10 | 1,272,154 | 13 | ||||||
| Total customer deposits | $ | 12,218,799 | 100 | % | $ | 11,638,377 | 100 | % | $ | 9,424,378 | 100 | % |
At March 31, 2021, WSFS’ net loan and lease portfolio decreased $464.3 million when compared with December 31, 2020, including a $224.4 million decrease in PPP loans. Excluding PPP loans, purposeful run-off portfolios, and the ACL, loans decreased $107.6 million, or 1% (not annualized), during the quarter. The decrease in the quarter was primarily due to lower commercial loan demand resulting from higher levels of borrower liquidity.
Net loans and leases at March 31, 2021 increased $32.1 million when compared with March 31, 2020. Excluding PPP loans, run-off portfolios, and the ACL, loans increased $55.9 million, or 1%, year-over-year, including growth across construction, commercial small business leases, and home equity installment loans originated through our partnership with Spring EQ.
| WSFS Bank Center | 5 | |
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| 500 Delaware Avenue, | ||
| Wilmington, Delaware 19801 |
Total customer deposits were $12.2 billion at March 31, 2021, a $580.4 million increase from December 31, 2020 and a $2.8 billion increase from March 31, 2020, reflecting elevated deposits from customers who received PPP loans, government stimulus impact, and lower customer spending. Core deposits were $11.1 billion at March 31, 2021, an increase of $645.3 million over the prior quarter primarily due to approximately $258.8 million of deposits from the second round of PPP loans and continued elevated customer liquidity. Core deposits were a strong 91% of total customer deposits and no- and low-cost checking accounts represented a robust 53% of total customer deposits at March 31, 2021. These core deposits predominantly represent longer-term, less price-sensitive customer relationships. The ratio of net loans and leases to customer deposits was 70% at March 31, 2021 reflecting significant liquidity capacity.
Net Interest Income
| Three Months Ending | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands) | March 31, 2021 | December 31, 2020 | March 31, 2020 | |||||||
| Net interest income before purchase accretion and PPP | $ | 93,524 | $ | 97,741 | $ | 101,941 | ||||
| Purchase accounting accretion | 11,295 | 14,754 | 14,209 | |||||||
| Net interest income before PPP | 104,819 | 112,495 | 116,150 | |||||||
| PPP | 9,366 | 10,506 | — | |||||||
| Net interest income | $ | 114,185 | $ | 123,001 | $ | 116,150 | ||||
| Net interest margin before purchase accretion and PPP | 3.10 | % | 3.36 | % | 3.85 | % | ||||
| Purchase accounting accretion | 0.37 | 0.51 | 0.53 | |||||||
| Net interest margin before PPP | 3.47 | 3.87 | 4.38 | |||||||
| PPP | 0.12 | 0.06 | — | |||||||
| Net interest margin | 3.59 | % | 3.93 | % | 4.38 | % |
1Q 2021 results were significantly impacted by continued high levels of excess customer liquidity described above. The additional customer deposits reduced our net interest margin by approximately 39 bps compared to 1Q 2020 and 18 bps from 4Q 2020.
| WSFS Bank Center | 6 | |
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| 500 Delaware Avenue, | ||
| Wilmington, Delaware 19801 |
Net interest income decreased $2.0 million, or 2%, compared to 1Q 2020, due to a $8.3 million reduction primarily from the lower rate environment and $2.9 million of lower purchase accounting accretion, partially offset by $9.4 million of PPP income in 1Q 2021 including $7.8 million of fee accretion. Net interest margin decreased 79 bps from 1Q 2020 due to 39 bps from the significant short-term liquidity increase in customer deposits, a 36 bps net decline from the lower rate environment and balance sheet mix, and 16 bps from lower purchase accounting accretion, partially offset by a 12 bps increase from PPP.
Net interest income decreased $8.8 million, or 7% (not annualized), from 4Q 2020 due to a $4.2 million reduction primarily from lower loan balances and lower yields from turnover in our loan and investment portfolio, a $3.5 million decrease in purchase accounting accretion and $1.1 million of lower PPP income. Net interest margin decreased 34 bps including 18 bps from the significant short-term liquidity increase in customer deposits, 14 bps from lower purchase accounting accretion, and 12 bps from lower loan balances and investment yields, partially offset by a 6 bps increase from PPP and 4 bps from lower funding costs.
Credit Quality
Credit quality improved across all leading metrics during the quarter, including total problem assets which were $723.6 million at March 31, 2021 compared to $766.0 million at December 31, 2020. Total problem assets includes all criticized, classified, and nonperforming loans as well as other real estate owned (OREO).
Delinquencies decreased to $69.3 million at March 31, 2021, or 0.81% of gross loans, and are relatively consistent with longer term historical trends. Nonperforming assets declined to $49.5 million at March 31, 2021 primarily due to the positive resolution of one $15.0 million multi-family commercial relationship that went nonperforming in 4Q 2020. Customer loans receiving short-term loan modifications at March 31, 2021 were $110.9 million, or 1% of the loan portfolio excluding PPP. Net charge-offs for 1Q 2021 were a low $3.8 million, or 0.18% (annualized), of average gross loans.
Total net credit (recoveries) costs were $(19.0) million in the quarter compared to $(0.5) million in 4Q 2020, and the ACL decreased to $204.8 million as economic forecasts improved from the prior quarter and new loan originations were mainly offset by normal portfolio run-off.
| WSFS Bank Center | 7 | |
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| 500 Delaware Avenue, | ||
| Wilmington, Delaware 19801 |
The following table summarizes credit quality metrics as of and for the period ended March 31, 2021 compared to December 31, 2020 and March 31, 2020.
| (Dollars in millions) | March 31, 2021 | December 31, 2020 | March 31, 2020 | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Problem assets | $ | 723.6 | $ | 766.0 | $ | 221.9 | |||
| Nonperforming assets | 49.5 | 60.5 | 38.1 | ||||||
| Delinquencies | 69.3 | 78.9 | 59.8 | ||||||
| Net charge-offs | 3.8 | 3.0 | 1.0 | ||||||
| Total net credit (recoveries) costs (r) | (19.0) | (0.5) | 57.1 | ||||||
| Problem assets to total Tier 1 capital plus ACL | 46.72 | % | 50.67 | % | 14.68 | % | |||
| Classified assets to total Tier 1 capital plus ACL | 32.63 | 35.02 | 12.64 | ||||||
| Ratio of nonperforming assets to total assets | 0.34 | 0.42 | 0.31 | ||||||
| Ratio of nonperforming assets (excluding accruing TDRs) to total assets | 0.23 | 0.31 | 0.20 | ||||||
| Delinquencies to gross loans | 0.81 | 0.88 | 0.69 | ||||||
| Ratio of quarterly net charge-offs to average gross loans | 0.18 | 0.13 | 0.04 | ||||||
| Ratio of allowance for credit losses to total loans and leases (q) | 2.36 | 2.51 | 1.60 | ||||||
| Ratio of allowance for credit losses to nonaccruing loans | 644 | 546 | 722 |
See “Notes”
Core Fee Revenue
Core fee revenue (noninterest income) was $47.5 million, an increase of $8.0 million, or 20%, compared to 1Q 2020, including a $2.7 million decrease in interchange fees resulting from the Durbin Amendment effective at the beginning of 3Q 2020 and $2.2 million of referral fees related to PPP round two loans during the quarter. The year-over-year increase also included $5.1 million of mortgage banking fees resulting from lower interest rates and improved secondary market conditions, $2.8 million of Trust services revenue, and $0.9 million of other wealth services revenue. Other banking fee revenue increased $1.7 million, excluding the impact of the Durbin Amendment and PPP referral fees, due primarily to a $0.8 million gain on sale of an acquired loan that was included in our run-off portfolio and $0.7 million of one-time items that reduced fee revenue in 1Q 2020. Partially offsetting these increases was a $2.0 million decrease in Cash Connect® year-over-year primarily driven by the significant decline in interest rates compared to the prior year and fully offset by lower funding costs.
| WSFS Bank Center | 8 | |
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| 500 Delaware Avenue, | ||
| Wilmington, Delaware 19801 |
Core fee revenue increased $4.0 million, or 9%, compared to 4Q 2020, due to $2.2 million of PPP round two referral fees in the quarter, a $1.9 million increase in mortgage banking revenue, and a $0.8 million increase in wealth management fees. Partially offsetting these increases was a $0.6 million decrease in gains on sale of SBA loans.
For 1Q 2021, core fee revenue was 29.3% of core net revenue compared to 25.3% at 1Q 2020, and was diversified among various sources, including traditional banking, mortgage banking, trust and wealth management and cash logistics services (Cash Connect®). The year-over-year percentage comparison includes the impact of lower net interest income due to the lower rate environment and PPP round two referral fees in the current quarter, offset by the adverse impacts of the Durbin Amendment.
Core Noninterest Expense(4)
Core noninterest expense of $93.8 million for 1Q 2021 increased $9.6 million compared to $84.2 million in 1Q 2020, primarily due to a $7.8 million increase in salaries and benefits. The increase included $2.9 million from salaries due to franchise growth, $2.6 million from higher incentive compensation, and $0.8 million from higher state unemployment rates. Additionally, equipment expenses increased $2.4 million primarily due to higher third-party software expense related to our ongoing delivery transformation initiatives.
When compared to 4Q 2020, core noninterest expense increased $0.7 million primarily due to $1.7 million of seasonally higher salaries and benefits costs, partially offset by $1.0 million of lower net other operating costs.
Our core efficiency ratio(4) was 57.9% in 1Q 2021, compared to 55.8% in 4Q 2020 and 54.0% in 1Q 2020.
Income Taxes
We recorded a $21.4 million income tax provision in 1Q 2021, compared to $17.5 million in 4Q 2020 and $1.3 million in 1Q 2020. The effective tax rate was 24.7% in 1Q 2021, 22.6% in 4Q 2020, and 10.9% in 1Q 2020. The year-over-year increase primarily reflects a one-time tax benefit of $1.8 million related to the Coronavirus Aid, Relief, and Economic Security Act, as amended (“CARES Act”), in 1Q 2020.
(4) As used in this press release, core noninterest expense and core efficiency ratio are non-GAAP financial measures. These non-GAAP financial measures exclude corporate development and restructuring expense and the contribution to the WSFS Community Fund. For a reconciliation of these and other non-GAAP financial measures to their comparable GAAP measures, see "Non-GAAP Reconciliation" at the end of the press release
| WSFS Bank Center | 9 | |
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| 500 Delaware Avenue, | ||
| Wilmington, Delaware 19801 |
Capital Management
The Board of Directors approved a quarterly cash dividend of $0.13 per share of common stock, an 8% increase from 4Q 2020. This dividend will be paid on May 21, 2021 to stockholders of record as of May 7, 2021.
During 1Q 2021, WSFS repurchased 267,309 shares at an average price of $44.97, totaling $12.0 million. WSFS has 4,381,161 shares, or approximately 9% of outstanding shares, remaining to repurchase under our current authorization.
WSFS’ total stockholders’ equity decreased $21.1 million, or 1% (not annualized), during 1Q 2021, primarily due to a $69.8 million market-value decrease on available-for-sale securities, $12.0 million of share repurchases, and the dividend on common stock paid during the quarter, partially offset by quarterly earnings.
WSFS’ tangible common equity(5) decreased $18.4 million, or 1% (not annualized) compared to December 31, 2020 for the reasons described above. WSFS’ common equity to assets ratio was 12.02% at March 31, 2021, and our tangible common equity to tangible assets ratio(5) decreased by 38 bps during the quarter to 8.58%.
At March 31, 2021, book value per share was $37.27, a decrease of $0.25, or 1%, from December 31, 2020, and tangible common book value per share(5) was $25.60, a decrease of $0.25 from December 31, 2020.
At March 31, 2021, WSFS Bank’s Tier 1 leverage ratio of 9.82%, Common Equity Tier 1 capital ratio and Tier 1 capital ratio of 13.20%, and Total Capital ratio of 14.46% were all substantially in excess of the “well-capitalized” regulatory benchmarks.
(5) As used in this release, tangible common equity, tangible common equity to tangible assets and tangible common book value per share are non-GAAP financial measures. These non-GAAP financial measures exclude goodwill and intangible assets and the related tax-effected amortization. For a reconciliation of these and other non-GAAP financial measures to their comparable GAAP measures, see "Non-GAAP Reconciliation" at the end of the press release.
| WSFS Bank Center | 10 | |
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| 500 Delaware Avenue, | ||
| Wilmington, Delaware 19801 |
Selected Business Segments (included in previous results):
Wealth Management
The Wealth Management segment provides a broad array of planning and advisory services, investment management, trust services, and credit and deposit products to individual, corporate, and institutional clients through multiple integrated businesses. Combined, these businesses had $24.7 billion in assets under management (AUM) and assets under administration (AUA) as of March 31, 2021.
Wealth Management reported pre-tax income of $9.3 million in 1Q 2021 compared to $3.8 million in 1Q 2020, and $9.2 million in 4Q 2020.
For 1Q 2021, total revenue (net interest income and fee income) was $19.2 million, an increase of $4.4 million, or 30%, compared to 1Q 2020 and flat compared to 4Q 2020. The year over year increase was due to strong results across all Wealth Management lines of business.
WSFS Institutional Services®’s revenue of $7.8 million in 1Q 2021 was up 51% from 1Q 2020 and up 4% from 4Q 2020. Growth in our corporate trust business was supported by continued strength in the debt securitization market as reflected by a 12% increase in our transaction volume relative to 4Q 2020.
Revenue from our advisory businesses, consisting of West Capital Management®, Cypress and WSFS Wealth® Investments, totaled $4.2 million in 1Q 2021 compared to $3.4 million in 1Q 2020, and $3.5 million in 4Q 2020. Net AUM at the end of 1Q 2021 was 2% lower (non-annualized) than 4Q 2020 due to client outflows, but increased 17% from 1Q 2020 primarily from strong equity market performance.
Total noninterest expense (including intercompany allocations and excluding provision for credit losses) was $10.4 million in 1Q 2021, compared to $9.4 million in 1Q 2020 and $10.0 million in 4Q 2020. Wealth Management efficiency ratio was 47% in 1Q 2021, compared to 58% in 1Q 2020 and 47% in 4Q 2020.
| WSFS Bank Center | 11 | |
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| 500 Delaware Avenue, | ||
| Wilmington, Delaware 19801 |
Cash Connect®
Cash Connect® is a premier provider of ATM vault cash, smart safe and cash logistics services in the United States. Cash Connect® services over 33,000 non-bank ATMs and retail deposit safes nationwide supplying or servicing approximately $1.7 billion in cash at March 31, 2021. Cash Connect® also supports over 600 ATMs for WSFS Bank Customers, which is one of the largest branded ATM networks in our market.
Cash Connect® reported pre-tax income of $1.7 million for 1Q 2021, which was a decrease of $0.3 million, or 15%, compared to 1Q 2020 primarily due to allocated expenses. Pre-tax income in 1Q 2021 was $0.5 million lower than 4Q 2020, driven by timing of insurance related expenses. ROA of 1.29% in 1Q 2021 decreased 55 bps from 1Q 2020 and decreased 45 bps from 4Q 2020. Normalized for insurance costs of $0.4 million due to timing, 1Q 2021 pre-tax income was $2.1 million, and ROA was 1.59%.
Net revenue of $10.1 million in 1Q 2021 was down $0.9 million from 1Q 2020, driven by the lower interest rate environment, fully offset by lower cost of funds (including lower third party funding fees in noninterest expense) and higher cash volume. Compared to 4Q 2020, net revenue decreased $0.2 million driven by a decrease in volume of ATM transaction volume-related activity.
Noninterest expense (including intercompany allocations of expense) was $8.4 million in 1Q 2021, a decrease of $0.6 million compared to 1Q 2020 driven by lower funding fees as noted above, and $0.2 million higher compared to 4Q 2020.
During 1Q 2021, Cash Connect® saw continued growth in its smart safe and ATM managed services, adding 337 units and 514 units, respectively. The division's total cash managed increased 11% (not annualized), exceeding $1.7 billion at the end of 1Q 2021, as Cash Connect continues to partner with retailers and top financial institutions providing logistics and serving cash solutions nationwide.
| WSFS Bank Center | 12 | |
|---|---|---|
| 500 Delaware Avenue, | ||
| Wilmington, Delaware 19801 |
First Quarter 2021 Earnings Release Conference Call
Management will conduct a conference call to review 1Q 2021 results at 1:00 p.m. Eastern Time (ET) on Friday, April 23, 2021. Interested parties may listen to this call by dialing 1-877-312-5857 and using Conference ID #4169716. A rebroadcast of the conference call will be available beginning at 4:00 p.m. ET on April 23, 2021 until May 4, 2021 by dialing 1-855-859-2056 and using Conference ID #4169716.
About WSFS Financial Corporation
WSFS Financial Corporation is a multi-billion dollar financial services company. Its primary subsidiary, WSFS Bank, is the oldest and largest locally-managed bank and trust company headquartered in Delaware and the Greater Philadelphia region. As of March 31, 2021, WSFS Financial Corporation had $14.7 billion in assets on its balance sheet and $24.7 billion in assets under management and administration. WSFS operates from 111 offices, 88 of which are banking offices, located in Pennsylvania (51), Delaware (42), New Jersey (16), Virginia (1) and Nevada (1) and provides comprehensive financial services including commercial banking, retail banking, cash management and trust and wealth management. Other subsidiaries or divisions include Arrow Land Transfer, Cash Connect®, Cypress Capital Management, LLC (Cypress), Christiana Trust Company of Delaware®, NewLane Finance®, Powdermill® Financial Solutions, West Capital Management®, WSFS Institutional Services®, WSFS Mortgage®, and WSFS Wealth® Investments. Serving the Greater Delaware Valley since 1832, WSFS Bank is one of the ten oldest banks in the United States continuously operating under the same name. For more information, please visit www.wsfsbank.com.
| WSFS Bank Center | 13 | |
|---|---|---|
| 500 Delaware Avenue, | ||
| Wilmington, Delaware 19801 |
Forward-Looking Statement Disclaimer
This press release contains estimates, predictions, opinions, projections and other "forward-looking statements" as that phrase is defined in the Private Securities Litigation Reform Act of 1995. Such statements include, without limitation, references to the Company's predictions or expectations of future business or financial performance as well as its goals and objectives for future operations, financial and business trends, business prospects, and management's outlook or expectations for earnings, revenues, expenses, capital levels, liquidity levels, asset quality or other future financial or business performance, strategies or expectations. 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 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, difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the markets in which the Company operates and in which its loans are concentrated, including possible declines in housing markets, an increase in unemployment levels and slowdowns in economic growth, including as a result of the novel coronavirus ("COVID-19") pandemic; possible additional loan losses and impairment of the collectability of loans, particularly as a result of the COVID-19 pandemic and the policies and programs implemented by the CARES Act including its automatic loan forbearance provisions and our PPP lending activities; additional credit, fraud and litigation risks associated with our PPP lending activities; economic and financial impact of federal, state and local emergency orders and other actions taken in response to the COVID-19 pandemic; the continuation of these conditions related to the COVID-19 pandemic, including whether due to a resurgence or additional waves of COVID-19 infections, particularly as the geographic areas in which we operate continue to re-open, and how quickly and to what extent normal economic and operating conditions can resume, especially as a vaccine becomes widely available; the Company's level of nonperforming assets and the costs associated with resolving problem loans including litigation and other costs and complying with government-imposed foreclosure moratoriums; changes in market interest rates which may increase funding costs and reduce earning asset yields and thus reduce margin; the impact of changes in interest rates and the credit quality and strength of underlying collateral and the effect of such changes on the market value of the Company's investment securities portfolio; the credit risk associated with the substantial amount of commercial real estate, construction and land development, and commercial and industrial loans in the Company's loan portfolio; the extensive federal and state regulation, supervision and examination governing almost every aspect of the Company's operations and potential expenses associated with complying with such regulations; the Company's ability to comply with applicable capital and liquidity requirements (including the effect of the transition to the Current Expected Credit Losses (CECL) methodology for allowances and related adjustments), including its ability to generate liquidity internally or raise capital on favorable terms; possible changes in trade, monetary and fiscal policies and stimulus programs, laws and regulations and other activities of governments, agencies, and similar organizations, and the uncertainty of the short- and long-term impacts of such changes; any impairments of the Company's goodwill or other intangible assets; conditions in the financial markets, including the destabilized economic environment caused by the COVID-19 pandemic, that may limit the Company's access to additional funding to meet its liquidity needs; the intention of the United Kingdom's Financial Conduct Authority (FCA) to cease support of London Inter-Bank Offered Rate (LIBOR) and the transition to an alternative reference interest rate, such as the Secured Overnight Funding Rate (SOFR), including methodologies for calculating the rate that are different from the LIBOR methodology and changed language for existing and new floating or adjustable rate contracts; the success of the Company's growth plans, including its plans to grow the commercial small business leasing portfolio and residential mortgage small business and Small Business Administration portfolios; the Company's ability to successfully integrate and fully realize the cost savings and other benefits of its acquisitions, manage risks related to business disruption following those acquisitions, and post-acquisition Customer acceptance of the Company's products and services and related Customer disintermediation, including its pending acquisition of Bryn Mawr; the Company’s ability to complete the acquisition of Bryn Mawr on the terms proposed, which are subject to a number of conditions, risks and uncertainties, including the possibility that the proposed acquisition does not close when expected or at all because all conditions to closing are not received or satisfied on a timely basis or at all, the failure to close for any other reason, diversion of management time on merger-related issues, risks relating to the potential dilutive effect of shares of the Company’s common stock to be issued in the acquisition of Bryn Mawr, and the reaction to the acquisition of Bryn Mawr of the companies’ customers, employees and counterparties; negative perceptions or publicity with respect to the Company generally and, in particular, the Company's trust and wealth management business; failure of the financial and operational controls of the Company's Cash Connect® division; adverse judgments or other resolution of pending and future legal proceedings, and cost incurred in defending such proceedings; the Company's reliance on third parties for certain important functions, including the operation of its core systems, and any failures by such third parties; system failures or cybersecurity incidents or other breaches of the Company's network security, particularly given widespread remote working arrangements; the Company's ability to recruit and retain key Associates; the effects of problems encountered by other financial institutions that adversely affect the Company or the banking industry generally; the effects of weather and natural disasters such as floods, droughts, wind, tornadoes and hurricanes as well as effects from geopolitical instability, public health crises and man-made disasters including terrorist attacks; the effects of regional or national civil unrest (including any resulting branch or ATM closures or damage); possible changes in the speed of loan prepayments by the Company's Customers and loan origination or sales volumes; possible changes in the speed of prepayments of mortgage-backed securities due to changes in the interest rate environment, particularly as a result of the COVID-19 pandemic, and the related acceleration of premium amortization on prepayments in the event that prepayments accelerate; regulatory limits on the Company's ability to receive dividends from its subsidiaries and pay dividends to its stockholders; any reputation, credit, interest rate, market, operational, litigation, legal, liquidity, regulatory and compliance risk resulting from developments related to any of the risks discussed above; and other risks and uncertainties, including those discussed in the Company's Form 10-K for the year ended December 31, 2020 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 press release, 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.
| WSFS Bank Center | 14 | |
|---|---|---|
| 500 Delaware Avenue, | ||
| Wilmington, Delaware 19801 |
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS
SUMMARY STATEMENTS OF INCOME (Unaudited)
| Three months ended | ||||||
|---|---|---|---|---|---|---|
| (Dollars in thousands, except per share data) | March 31, 2021 | December 31, 2020 | March 31, 2020 | |||
| Interest income: | ||||||
| Interest and fees on loans | $ | 108,852 | $ | 118,737 | $ | 119,202 |
| Interest on mortgage-backed securities | 10,704 | 10,923 | 13,219 | |||
| Interest and dividends on investment securities | 1,449 | 1,419 | 926 | |||
| Other interest income | 276 | 218 | 508 | |||
| 121,281 | 131,297 | 133,855 | ||||
| Interest expense: | ||||||
| Interest on deposits | 4,496 | 6,447 | 14,637 | |||
| Interest on Federal Home Loan Bank advances | 5 | 50 | 830 | |||
| Interest on senior debt | 2,266 | 1,460 | 1,179 | |||
| Interest on trust preferred borrowings | 324 | 334 | 586 | |||
| Interest on other borrowings | 5 | 5 | 473 | |||
| 7,096 | 8,296 | 17,705 | ||||
| Net interest income | 114,185 | 123,001 | 116,150 | |||
| (Recovery of) provision for credit losses | (20,160) | (936) | 56,646 | |||
| Net interest income after (recovery of) provision for credit losses | 134,345 | 123,937 | 59,504 | |||
| Noninterest income: | ||||||
| Credit/debit card and ATM income | 6,805 | 7,098 | 11,359 | |||
| Investment management and fiduciary revenue | 14,253 | 13,822 | 10,962 | |||
| Deposit service charges | 5,460 | 5,405 | 5,647 | |||
| Mortgage banking activities, net | 8,600 | 6,729 | 3,471 | |||
| Loan and lease fee income | 3,485 | 1,137 | 1,119 | |||
| Securities gains, net | 329 | 3,153 | 693 | |||
| Unrealized gain on equity investment, net | — | — | 668 | |||
| Bank-owned life insurance income | 205 | 269 | (25) | |||
| Other income | 8,685 | 9,019 | 6,953 | |||
| 47,822 | 46,632 | 40,847 | ||||
| Noninterest expense: | ||||||
| Salaries, benefits and other compensation | 53,138 | 51,442 | 45,346 | |||
| Occupancy expense | 8,460 | 7,991 | 7,666 | |||
| Equipment expense | 7,391 | 7,392 | 4,964 | |||
| Data processing and operations expense | 3,385 | 3,263 | 3,078 | |||
| Professional fees | 3,856 | 5,123 | 4,600 | |||
| Marketing expense | 992 | 2,060 | 951 | |||
| FDIC expenses | 1,069 | 1,068 | (54) | |||
| Loan workout and other credit costs | 1,120 | 437 | 453 | |||
| Corporate development expense | 2,095 | (242) | 1,341 | |||
| Restructuring expense | (265) | 510 | — | |||
| Other operating expenses | 14,378 | 14,329 | 20,151 | |||
| 95,619 | 93,373 | 88,496 | ||||
| Income before taxes | 86,548 | 77,196 | 11,855 | |||
| Income tax provision | 21,407 | 17,455 | 1,288 | |||
| Net income | $ | 65,141 | $ | 59,741 | $ | 10,567 |
| Less: Net income (loss) attributable to noncontrolling interest | 59 | (72) | (360) | |||
| Net income attributable to WSFS | $ | 65,082 | $ | 59,813 | $ | 10,927 |
| Diluted earnings per share of common stock: | $ | 1.36 | $ | 1.20 | $ | 0.21 |
| Weighted average shares of common stock outstanding for fully diluted EPS | 47,792,108 | 49,707,973 | 51,164,224 |
See “Notes”
| WSFS Bank Center | 15 | |
|---|---|---|
| 500 Delaware Avenue, | ||
| Wilmington, Delaware 19801 |
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS
SUMMARY STATEMENTS OF INCOME (Unaudited) - continued
| Three months ended | ||||||
|---|---|---|---|---|---|---|
| March 31, 2021 | December 31, 2020 | March 31, 2020 | ||||
| Performance Ratios: | ||||||
| Return on average assets (a) | 1.85 | % | 1.73 | % | 0.36 | % |
| Return on average equity (a) | 14.90 | 13.00 | 2.39 | |||
| Return on average tangible common equity (a)(o) | 22.38 | 19.37 | 4.13 | |||
| Net interest margin (a)(b) | 3.59 | 3.93 | 4.38 | |||
| Efficiency ratio (c) | 58.93 | 54.95 | 56.27 | |||
| Noninterest income as a percentage of total net revenue (b) | 29.47 | 27.45 | 25.97 |
See “Notes”
| WSFS Bank Center | 16 | |
|---|---|---|
| 500 Delaware Avenue, | ||
| Wilmington, Delaware 19801 |
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
SUMMARY STATEMENTS OF FINANCIAL CONDITION (Unaudited)
| (Dollars in thousands) | March 31, 2021 | December 31, 2020 | March 31, 2020 | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Assets: | |||||||||
| Cash and due from banks | $ | 1,628,773 | $ | 1,244,705 | $ | 182,125 | |||
| Cash in non-owned ATMs | 428,180 | 402,339 | 322,844 | ||||||
| Investment securities, available-for-sale (d) | 2,987,885 | 2,529,057 | 2,048,400 | ||||||
| Investment securities, held-to-maturity | 103,523 | 111,741 | 134,047 | ||||||
| Other investments | 22,941 | 23,003 | 104,843 | ||||||
| Net loans and leases (e)(f)(l) | 8,529,213 | 8,993,476 | 8,497,147 | ||||||
| Bank owned life insurance | 32,255 | 32,051 | 30,093 | ||||||
| Goodwill and intangibles | 554,701 | 557,386 | 565,763 | ||||||
| Other assets | 442,981 | 440,156 | 393,628 | ||||||
| Total assets | $ | 14,730,452 | $ | 14,333,914 | $ | 12,278,890 | |||
| Liabilities and Stockholders’ Equity: | |||||||||
| Noninterest-bearing deposits | $ | 3,857,610 | $ | 3,415,021 | $ | 2,314,982 | |||
| Interest-bearing deposits | 8,361,189 | 8,223,356 | 7,109,396 | ||||||
| Total customer deposits | 12,218,799 | 11,638,377 | 9,424,378 | ||||||
| Brokered deposits | 64,901 | 218,287 | 284,976 | ||||||
| Total deposits | 12,283,700 | 11,856,664 | 9,709,354 | ||||||
| Federal Home Loan Bank advances | — | 6,623 | 119,971 | ||||||
| Other borrowings | 335,201 | 334,018 | 281,314 | ||||||
| Other liabilities | 343,097 | 347,129 | 334,832 | ||||||
| Total liabilities | 12,961,998 | 12,544,434 | 10,445,471 | ||||||
| Stockholders’ equity of WSFS | 1,770,641 | 1,791,726 | 1,834,594 | ||||||
| Noncontrolling interest | (2,187) | (2,246) | (1,175) | ||||||
| Total stockholders' equity | 1,768,454 | 1,789,480 | 1,833,419 | ||||||
| Total liabilities and stockholders' equity | $ | 14,730,452 | $ | 14,333,914 | $ | 12,278,890 | |||
| Capital Ratios: | |||||||||
| Equity to asset ratio | 12.02 | % | 12.50 | % | 14.94 | % | |||
| Tangible common equity to tangible asset ratio (o) | 8.58 | 8.96 | 10.83 | ||||||
| Common equity Tier 1 capital (required: 4.5%; well capitalized: 6.5%) (g) | 13.20 | 12.50 | 13.41 | ||||||
| Tier 1 leverage (required: 4.00%; well-capitalized: 5.00%) (g) | 9.82 | 9.74 | 11.85 | ||||||
| Tier 1 risk-based capital (required: 6.00%; well-capitalized: 8.00%) (g) | 13.20 | 12.50 | 13.41 | ||||||
| Total risk-based capital (required: 8.00%; well-capitalized: 10.00%) (g) | 14.46 | 13.76 | 14.53 | ||||||
| Asset Quality Indicators: | |||||||||
| Nonperforming assets: | |||||||||
| Nonaccruing loans | $ | 31,792 | $ | 41,908 | $ | 19,250 | |||
| Troubled debt restructuring (accruing) | 15,684 | 15,539 | 14,070 | ||||||
| Assets acquired through foreclosure | 2,068 | 3,061 | 4,825 | ||||||
| Total nonperforming assets | $ | 49,544 | $ | 60,508 | $ | 38,145 | |||
| Past due loans (h) | $ | 7,678 | $ | 16,694 | $ | 14,282 | |||
| Allowance for credit losses | 204,823 | 228,810 | 139,081 | ||||||
| Ratio of nonperforming assets to total assets | 0.34 | % | 0.42 | % | 0.31 | % | |||
| Ratio of nonperforming assets (excluding accruing TDRs) to total assets | 0.23 | 0.31 | 0.20 | ||||||
| Ratio of allowance for credit losses to total loans and leases (q) | 2.36 | 2.51 | 1.60 | ||||||
| Ratio of allowance for credit losses to nonaccruing loans | 644 | 546 | 722 | ||||||
| Ratio of quarterly net charge-offs to average gross loans (a)(e)(i)(n) | 0.18 | 0.13 | 0.04 | ||||||
| Ratio of year-to-date net charge-offs to average gross loans (a)(e)(i)(n) | 0.18 | 0.09 | 0.04 |
See “Notes”
| WSFS Bank Center | 17 | |
|---|---|---|
| 500 Delaware Avenue, | ||
| Wilmington, Delaware 19801 |
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
AVERAGE BALANCE SHEET (Unaudited)
| (Dollars in thousands) | Three months ended | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| March 31, 2021 | December 31, 2020 | March 31, 2020 | ||||||||||||||||
| Average<br>Balance | Interest &<br>Dividends | Yield/<br>Rate<br>(a)(b) | Average<br>Balance | Interest &<br>Dividends | Yield/<br>Rate<br>(a)(b) | Average<br>Balance | Interest &<br>Dividends | Yield/<br>Rate<br>(a)(b) | ||||||||||
| Assets: | ||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||
| Loans: (e) (j) | ||||||||||||||||||
| Commercial loans and leases (p) | $ | 4,138,034 | $ | 52,620 | 5.16 | % | $ | 4,394,992 | $ | 59,758 | 5.42 | % | $ | 3,533,626 | $ | 55,693 | 6.35 | % |
| Commercial real estate loans (s) | 2,803,378 | 29,191 | 4.22 | 2,812,685 | 30,071 | 4.25 | 2,808,867 | 34,292 | 4.91 | |||||||||
| Residential mortgage | 734,593 | 12,864 | 7.00 | 823,305 | 14,049 | 6.83 | 992,408 | 13,541 | 5.46 | |||||||||
| Consumer loans | 1,159,588 | 12,836 | 4.49 | 1,169,238 | 13,578 | 4.62 | 1,130,223 | 14,935 | 5.31 | |||||||||
| Loans held for sale | 161,287 | 1,341 | 3.37 | 152,138 | 1,281 | 3.35 | 69,884 | 741 | 4.26 | |||||||||
| Total loans and leases | 8,996,880 | 108,852 | 4.91 | 9,352,358 | 118,737 | 5.05 | 8,535,008 | 119,202 | 5.62 | |||||||||
| Mortgage-backed securities (d) | 2,507,910 | 10,704 | 1.71 | 2,167,521 | 10,923 | 2.02 | 1,959,637 | 13,219 | 2.70 | |||||||||
| Investment securities (d) | 336,410 | 1,449 | 1.98 | 324,679 | 1,419 | 1.98 | 131,121 | 926 | 3.40 | |||||||||
| Other interest-earning assets | 1,103,632 | 276 | 0.10 | 644,785 | 218 | 0.13 | 76,356 | 508 | 2.68 | |||||||||
| Total interest-earning assets | 12,944,832 | $ | 121,281 | 3.81 | % | 12,489,343 | $ | 131,297 | 4.19 | % | 10,702,122 | $ | 133,855 | 5.04 | % | |||
| Allowance for credit losses | (226,911) | (232,053) | (85,055) | |||||||||||||||
| Cash and due from banks | 114,725 | 93,968 | 139,836 | |||||||||||||||
| Cash in non-owned ATMs | 393,964 | 365,738 | 335,434 | |||||||||||||||
| Bank owned life insurance | 32,155 | 31,829 | 30,154 | |||||||||||||||
| Other noninterest-earning assets | 997,444 | 1,004,075 | 1,037,033 | |||||||||||||||
| Total assets | $ | 14,256,209 | $ | 13,752,900 | $ | 12,159,524 | ||||||||||||
| Liabilities and stockholders’ equity: | ||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||
| Interest-bearing demand | $ | 2,572,325 | $ | 618 | 0.10 | % | $ | 2,543,711 | $ | 660 | 0.10 | % | $ | 2,085,229 | $ | 1,897 | 0.37 | % |
| Savings | 1,830,781 | 150 | 0.03 | 1,750,313 | 275 | 0.06 | 1,574,215 | 1,744 | 0.45 | |||||||||
| Money market | 2,682,219 | 854 | 0.13 | 2,474,582 | 1,218 | 0.20 | 2,152,986 | 4,090 | 0.76 | |||||||||
| Customer time deposits | 1,117,191 | 2,377 | 0.86 | 1,206,576 | 3,688 | 1.22 | 1,305,432 | 5,655 | 1.74 | |||||||||
| Total interest-bearing customer deposits | 8,202,516 | 3,999 | 0.20 | 7,975,182 | 5,841 | 0.29 | 7,117,862 | 13,386 | 0.76 | |||||||||
| Brokered deposits | 136,957 | 497 | 1.47 | 226,028 | 606 | 1.07 | 230,423 | 1,251 | 2.18 | |||||||||
| Total interest-bearing deposits | 8,339,473 | 4,496 | 0.22 | 8,201,210 | 6,447 | 0.31 | 7,348,285 | 14,637 | 0.80 | |||||||||
| Federal Home Loan Bank advances | 736 | 5 | 2.76 | 7,944 | 50 | 2.50 | 170,058 | 830 | 1.96 | |||||||||
| Trust preferred borrowings | 67,011 | 324 | 1.96 | 67,011 | 334 | 1.98 | 67,011 | 586 | 3.52 | |||||||||
| Senior debt | 246,654 | 2,266 | 3.67 | 137,428 | 1,460 | 4.25 | 98,627 | 1,179 | 4.78 | |||||||||
| Other borrowed funds | 19,656 | 5 | 0.10 | 22,133 | 5 | 0.09 | 148,256 | 473 | 1.28 | |||||||||
| Total interest-bearing liabilities | 8,673,530 | $ | 7,096 | 0.33 | % | 8,435,726 | $ | 8,296 | 0.39 | % | 7,832,237 | $ | 17,705 | 0.91 | % | |||
| Noninterest-bearing demand deposits | 3,490,831 | 3,159,783 | 2,166,510 | |||||||||||||||
| Other noninterest-bearing liabilities | 322,296 | 329,373 | 326,185 | |||||||||||||||
| Stockholders’ equity of WSFS | 1,771,822 | 1,830,244 | 1,835,501 | |||||||||||||||
| Noncontrolling interest | (2,270) | (2,226) | (909) | |||||||||||||||
| Total liabilities and equity | $ | 14,256,209 | $ | 13,752,900 | $ | 12,159,524 | ||||||||||||
| Excess of interest-earning assets over interest-bearing liabilities | $ | 4,271,302 | $ | 4,053,617 | $ | 2,869,885 | ||||||||||||
| Net interest and dividend income | $ | 114,185 | $ | 123,001 | $ | 116,150 | ||||||||||||
| Interest rate spread | 3.48 | % | 3.80 | % | 4.13 | % | ||||||||||||
| Net interest margin | 3.59 | % | 3.93 | % | 4.38 | % |
See “Notes”
| WSFS Bank Center | 18 | |
|---|---|---|
| 500 Delaware Avenue, | ||
| Wilmington, Delaware 19801 |
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
(Unaudited)
| (Dollars in thousands, except per share data) | Three months ended | ||
|---|---|---|---|
| Stock Information: | March 31, 2021 | December 31, 2020 | March 31, 2020 |
| Market price of common stock: | |||
| High | $55.18 | $45.48 | $44.70 |
| Low | 40.64 | 26.48 | 17.84 |
| Close | 49.79 | 44.88 | 24.92 |
| Book value per share of common stock | 37.27 | 37.52 | 36.23 |
| Tangible common book value per share of common stock (o) | 25.60 | 25.85 | 25.06 |
| Number of shares of common stock outstanding (000s) | 47,502 | 47,756 | 50,633 |
| Other Financial Data: | |||
| One-year repricing gap to total assets (k) | 13.26% | 13.07% | 2.38% |
| Weighted average duration of the MBS portfolio | 5.0 years | 2.7 years | 2.2 years |
| Unrealized (losses) gains on securities available for sale, net of taxes | $(9,957) | $59,882 | $72,436 |
| Number of Associates (FTEs) (m) | 1,854 | 1,838 | 1,791 |
| Number of offices (branches, LPO’s, operations centers, etc.) | 111 | 112 | 116 |
| Number of WSFS owned and branded ATMs | 625 | 626 | 470 |
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 held-to-maturity (at amortized cost) and securities available-for-sale (at fair value).
(e)Net of unearned income.
(f)Net of allowance for credit 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. Balance includes student loans acquired from Beneficial, which are U.S. government guaranteed with little risk of credit loss.
(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 and reverse mortgages.
(m)Includes seasonal Associates, when applicable.
(n)Excludes reverse mortgage loans.
(o)The Company uses non-GAAP (United States Generally Accepted Accounting Principles) financial information in its analysis of the Company’s performance. The Company’s management believes that these non-GAAP financial 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 financial 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 and other non-GAAP financial measures to their comparable GAAP measures, see "Non-GAAP Reconciliation" at the end of the press release.
(p)Includes commercial & industrial loans, PPP loans and commercial small business leases.
(q)Represents amortized cost basis for loans, leases and held-to-maturity securities.
(r)Includes (recovery of) provision for credit losses, loan workout expenses, OREO expenses and other credit costs.
(s)Includes commercial mortgage and commercial construction loans.
| WSFS Bank Center | 19 | |
|---|---|---|
| 500 Delaware Avenue, | ||
| Wilmington, Delaware 19801 |
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
(Dollars in thousands, except per share data)
(Unaudited)
| Non-GAAP Reconciliation (o): | Three months ended | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| March 31, 2021 | December 31, 2020 | March 31, 2020 | |||||||||||
| Net interest income (GAAP) | $ | 114,185 | $ | 123,001 | $ | 116,150 | |||||||
| Core net interest income (non-GAAP) | $ | 114,185 | $ | 123,001 | $ | 116,150 | |||||||
| Noninterest income (GAAP) | $ | 47,822 | $ | 46,632 | $ | 40,847 | |||||||
| Less: Securities gains | 329 | 3,153 | 693 | ||||||||||
| Less: Unrealized gains on equity investments, net | — | — | 668 | ||||||||||
| Core fee revenue (non-GAAP) | $ | 47,493 | $ | 43,479 | $ | 39,486 | |||||||
| Core net revenue (non-GAAP) | $ | 161,678 | $ | 166,480 | $ | 155,636 | |||||||
| Core net revenue (non-GAAP)(tax-equivalent) | $ | 161,943 | $ | 166,756 | $ | 155,905 | |||||||
| Noninterest expense (GAAP) | $ | 95,619 | $ | 93,373 | $ | 88,496 | |||||||
| Less/(plus): Corporate development expense | 2,095 | (242) | 1,341 | ||||||||||
| (Plus)/less: Restructuring expense | (265) | 510 | — | ||||||||||
| Less: Contribution to WSFS Community Foundation | — | — | 3,000 | ||||||||||
| Core noninterest expense (non-GAAP) | $ | 93,789 | $ | 93,105 | $ | 84,155 | |||||||
| Core efficiency ratio (non-GAAP) | 57.9 | % | 55.8 | % | 54.0 | % | |||||||
| End of period | |||||||||||||
| March 31, 2021 | December 31, 2020 | March 31, 2020 | |||||||||||
| Total assets (GAAP) | $ | 14,730,452 | $ | 14,333,914 | $ | 12,278,890 | |||||||
| Less: Goodwill and other intangible assets | 554,701 | 557,386 | 565,763 | ||||||||||
| Total tangible assets (non-GAAP) | $ | 14,175,751 | $ | 13,776,528 | $ | 11,713,127 | |||||||
| Total stockholders’ equity of WSFS (GAAP) | $ | 1,770,641 | $ | 1,791,726 | $ | 1,834,594 | |||||||
| Less: Goodwill and other intangible assets | 554,701 | 557,386 | 565,763 | ||||||||||
| Total tangible common equity (non-GAAP) | $ | 1,215,940 | $ | 1,234,340 | $ | 1,268,831 | |||||||
| Calculation of tangible common book value per share: | |||||||||||||
| Book value per share (GAAP) | $ | 37.27 | $ | 37.52 | $ | 36.23 | |||||||
| Tangible common book value per share (non-GAAP) | 25.60 | 25.85 | 25.06 | ||||||||||
| Calculation of tangible common equity to tangible assets: | |||||||||||||
| Equity to asset ratio (GAAP) | 12.02 | % | 12.50 | % | 14.94 | % | |||||||
| Tangible common equity to tangible assets ratio (non-GAAP) | 8.58 | 8.96 | 10.83 | ||||||||||
| WSFS Bank Center | 20 | ||||||||||||
| --- | --- | --- | |||||||||||
| 500 Delaware Avenue, | |||||||||||||
| Wilmington, Delaware 19801 | Non-GAAP Reconciliation - continued (o): | Three months ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||
| March 31, 2021 | December 31, 2020 | March 31, 2020 | |||||||||||
| GAAP net income attributable to WSFS | $ | 65,082 | $ | 59,813 | $ | 10,927 | |||||||
| Plus/(less): Pre-tax adjustments: Securities gains, unrealized gains on equity investments, corporate development and restructuring expense, and contribution to WSFS Community Foundation | 1,501 | (2,885) | 2,980 | ||||||||||
| (Plus)/less: Tax impact of pre-tax adjustments | 11 | 687 | (2,020) | ||||||||||
| Adjusted net income (non-GAAP) attributable to WSFS | $ | 66,594 | $ | 57,615 | $ | 11,887 | |||||||
| GAAP return on average assets (ROA) | 1.85 | % | 1.73 | % | 0.36 | % | |||||||
| Plus/(less): Pre-tax adjustments: Securities gains, unrealized gains on equity investments, corporate development and restructuring expense, and contribution to WSFS Community Foundation | 0.04 | (0.08) | 0.10 | ||||||||||
| (Plus)/less: Tax impact of pre-tax adjustments | — | 0.02 | (0.07) | ||||||||||
| Core ROA (non-GAAP) | 1.89 | % | 1.67 | % | 0.39 | % | |||||||
| Earnings per share (GAAP) | $ | 1.36 | $ | 1.20 | $ | 0.21 | |||||||
| Plus/(less): Pre-tax adjustments: Securities gains, unrealized gains on equity investments, corporate development and restructuring expense, and contribution to WSFS Community Foundation | 0.03 | (0.06) | 0.06 | ||||||||||
| (Plus)/less: Tax impact of pre-tax adjustments | — | 0.02 | (0.04) | ||||||||||
| Core earnings per share (non-GAAP) | $ | 1.39 | $ | 1.16 | $ | 0.23 | |||||||
| Calculation of return on average tangible common equity: | |||||||||||||
| GAAP net income attributable to WSFS | $ | 65,082 | $ | 59,813 | $ | 10,927 | |||||||
| Plus: Tax effected amortization of intangible assets | 2,004 | 2,090 | 2,103 | ||||||||||
| Net tangible income (non-GAAP) | $ | 67,086 | $ | 61,903 | $ | 13,030 | |||||||
| Average stockholders’ equity of WSFS | $ | 1,771,822 | $ | 1,830,244 | $ | 1,835,501 | |||||||
| Less: average goodwill and intangible assets | 556,344 | 558,750 | 567,695 | ||||||||||
| Net average tangible common equity | $ | 1,215,478 | $ | 1,271,494 | $ | 1,267,806 | |||||||
| Return on average tangible common equity (non-GAAP) | 22.38 | % | 19.37 | % | 4.13 | % | |||||||
| Non-GAAP Reconciliation - continued (o): | Three months ended | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | |||||||
| March 31, 2021 | December 31, 2020 | March 31, 2020 | |||||||||||
| Calculation of PPNR: | |||||||||||||
| Net income (GAAP) | $ | 65,141 | $ | 59,741 | $ | 10,567 | |||||||
| Plus: Income tax provision | 21,407 | 17,455 | 1,288 | ||||||||||
| Plus/(less): (Recovery of) provision for credit losses | (20,160) | (936) | 56,646 | ||||||||||
| PPNR (non-GAAP) | $ | 66,388 | $ | 76,260 | $ | 68,501 |
exhibit992vf1q21earnings
1 WSFS Financial Corporation 1Q 2021 Investor Update April 2021 Exhibit 99.2
2 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 our pending acquisition of Bryn Mawr Bank Corporation and 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 in the Company's Form 10-K for the year ended December 31, 2020, 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 earnings per share (“EPS”), core net income, core return on equity (“ROE”), core efficiency ratio, pre-provision net revenue (“PPNR”), core PPNR, PPNR to average assets ratio, core PPNR to average assets ratio, core return on assets (“ROA”), core net interest income, core net interest margin (“NIM”), return on tangible common equity (“ROTCE”), core ROTCE, core fee revenue and core fee revenue as a percentage of total core net revenue. 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. Forward Looking Statements & Non-GAAP
3 Table of Contents 1Q 2021 Highlights Page 4 Loan & Deposit Growth Page 5 Net Interest Margin Trends Page 6 Core Fee Revenue Trends Page 7 ACL Overview Page 8 2021 Core Outlook Page 9 WSFS Franchise and Markets Page 10 Lines of Business Page 17 Selected Financial and Performance Metrics Page 23 Capital Management Page 30 WSFS Mission, Vision, Strategy, and Values Page 33 Appendix: Reconciliation of Non-GAAP Financial Information Page 34
4 1 These are non-GAAP financial measures and should be considered along with results prepared in accordance with GAAP, and not as a substitute for GAAP results. See Appendix for reconciliation to GAAP financial information. 2 Attributable to WSFS 3 Tax-equivalent 1Q 2021 Highlights 1Q 2021 $ in millions (expect per share amounts) Reported Core1 EPS $1.36 $1.39 ROA 1.85% 1.89% Net Income2 $65.1 $66.6 PPNR1 $66.4 $67.9 PPNR %1 1.89% 1.93% ROE 14.90% 15.24% ROTCE1 22.38% 22.89% NIM 3.59% 3.59% Fee Revenue $47.8 $47.5 Fee Revenue %3 29.5% 29.3% Efficiency Ratio 58.9% 57.9% ACL Ratio ex PPP 2.51% 2.51% Bank CET1 13.20% 13.20% 1Q 2021 operating results reflect diversified fee revenue, improving credit trends and strong capital levels 1Q 2021 Highlights: • Core ROA1 of 1.89%, up from 1.67% in 4Q 2020 • Net credit costs (recoveries) were ($19.0) million and net charge-offs were $3.8 million, or 0.18% of average gross loans • ACL coverage ratio was 2.51%, excluding PPP loans at March 31, 2021 • WSFS supported nearly $300 million of second round PPP loans to over 1,800 WSFS and non-WSFS Customers during the quarter • The Board of Directors approved a quarterly cash dividend of $0.13 per share of common stock, an 8% increase; repurchased 267,309 shares, totaling $12.0 million • Maintained strong capital levels including a Bank Common Equity Tier 1 Ratio of 13.20% • WSFS announced the agreement to acquire Bryn Mawr Bank Corporation; pending approvals, the transaction is expected to close in early 4Q 2021
5 Loan and Deposit Growth Loans reflect purposeful run-off portfolios and PPP forgiveness; Significant excess customer liquidity continues • Commercial run-off portfolios acquired from Beneficial Bancorp Inc. are down to $55 million; remaining run-off portfolio is primarily residential mortgage • Continued focus on strategy to optimize our balance sheet mix towards relationship-based commercial loans and deposits • Customer funding levels remain elevated and increased $581 million during 1Q 2021 primarily due to funding of PPP 2.0 program and stimulus deposits ($ in millions) Mar 2021 Dec 2020 Mar 2020 1Q21 $ Growth Annualized % Growth YOY $ Growth YOY % Growth Noninterest Demand $3,858 $3,415 $2,315 $443 53% $1,543 67% Interest Demand Deposits $2,659 $2,636 $2,093 $23 4% $566 27% Savings $1,886 $1,774 $1,595 $112 26% $291 18% Money Market $2,722 $2,654 $2,149 $68 10% $573 27% Total Core Deposits $11,125 $10,479 $8,152 $646 25% $2,973 36% Customer Time Deposits $1,094 $1,159 $1,272 ($65) (23%) ($178) (14%) Total Customer Deposits $12,219 $11,638 $9,424 $581 20% $2,795 30% Deposits - 1Q 2021 vs 4Q 2020 and 1Q 2020 ($ in millions) Mar 2021 Dec 2020 Mar 2020 1Q21 $ Growth Annualized % Growth YOY $ Growth YOY % Growth C & I Loans $3,213 $3,299 $3,412 ($86) (11%) ($199) (6%) PPP Loans $527 $751 $0 ($224) (121%) $527 100% Commercial Mortgages $1,976 $2,086 $2,223 ($110) (21%) ($247) (11%) Construction Loans $784 $716 $626 $68 39% $158 25% Commercial Leases $265 $249 $202 $16 26% $63 31% Total Commercial Loans $6,765 $7,101 $6,463 ($336) (19%) $302 5% Residential Mortgage (HFS/HFI/Rev Mgt) $829 $955 $1,055 ($126) (54%) ($226) (21%) Consumer Loans $1,140 $1,166 $1,118 ($26) (9%) $22 2% Total Gross Loans $8,734 $9,222 $8,636 ($488) (21%) $98 1% Residential Mortgage (HFI) $671 $764 $956 ($93) (49%) ($285) (30%) Student Loans Acquired from BNCL $115 $117 $123 ($2) (7%) ($8) (7%) Auto Loans Acquired From BNCL $16 $22 $40 ($6) (111%) ($24) (60%) Participation portfolios (CRE) from BNCL $55 $98 $210 ($43) (178%) ($155) (74%) Leveraged Loans (C&I) from BNCL $0 $12 $12 ($12) (406%) ($12) (100%) Total Run-Off Portfolios $857 $1,013 $1,341 ($156) (62%) ($484) (36%) Gross Loans ex Run-Off Portfolios $7,877 $8,209 $7,295 ($332) (16%) $582 8% PPP Loans $527 $751 $0 ($224) (121%) $527 100% Gross Loans ex Run-Off & PPP Portfolios $7,350 $7,458 $7,295 ($108) (6%) $55 1% Loans - 1Q 2021 vs 4Q 2020 and 1Q 2020
6 Negative Excess Liquidity Impact on NIM 0.00% 0.05% 0.14% 0.21% 0.39% 0.0% 0.1% 0.2% 0.3% 0.4% 0.5% 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 3.85% 3.58% 3.35% 3.36% 3.10% 0.53% 0.43% 0.39% 0.51% 0.37% 2.75% 3.00% 3.25% 3.50% 3.75% 4.00% 4.25% 4.50% 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 NIM Ex PAA/PPP PAA PPP 0 4.38% 3.93%1 3.66%1 Net Interest Margin Trends NIM impacted by customer liquidity, purchase accretion variability, PPP forgiveness, and low funding costs 3.93% 3.59% Average Deposit Cost2 and Loan Yield3 1 Negative 8 bps impact related to PPP in 2Q 2020 and 3Q 2020 as forgiveness of PPP loans and accelerated fee accretion started in 4Q 2020 2 Includes non-interest and interest-bearing; interest-bearing deposits include demand, money market, savings, and customer time deposits 3 Average gross loans yield excludes PAA and PPP 32 0.58% 0.35% 0.28% 0.21% 0.14% 4.95% 4.46% 4.33% 4.39% 4.30% 3.0% 3.5% 4.0% 4.5% 5.0% 0.0% 0.2% 0.3% 0.5% 0.6% 0.8% 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 Lo an Y ie ld (% ) Cu st om er D ep os it Co st (% ) Total Deposit Cost Gross Loans Yield
7 $13 $12 $11 $13 $12 $3 $8 $12 $7 $9 $12 $9 $10 $10 $10 $11 $11 $13 $14 $15 $- $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 Co re F ee R ev en ue E xc lu di ng P PP ($ m m ) Banking Mortgage Cash Connect Wealth & Trust 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 reconciliation to GAAP financial information. 2 Core Fee (non-interest) revenue / core net revenue. This is a non-GAAP financial measure; see Appendix for reconciliation to GAAP financial information. 3 Core Fee (non-interest) revenue / core net revenue excluding PPP net interest income and fee revenue. This is a non-GAAP financial measure; see Appendix for reconciliation to GAAP financial information. 4 Banking includes deposit service charges, SBA loan sales, loan and lease fees, credit and debit revenue, and other banking related fees • Well diversified with over 20 discrete lines of business and products within our three core segments: Banking, Wealth, and Cash Connect® • Provides earnings stability through interest rate and credit cycles • Excluding PPP, 1Q 2021 increased $1.9 million, or 4%, compared to 4Q 2020, diversified across all major areas • Excluding PPP, 1Q 2021 increased $5.8 million, or 15%, compared to 1Q 2020 despite Durbin impact (effective July 2020) Core Fee Revenue1 Trends Diversified Business Model Drives Core Fee Revenue Growth Throughout The Pandemic and 1Q 2021 4 Core Fee Revenue % (excluding PPP)325.4% 27.1% 30.0% 27.9% 30.2% Core Fee Revenue % (including PPP)225.4% 26.2% 28.8% 26.1% 29.4%
8 $0 $50 $100 $150 $200 $250 12/31/2020 Economic Forecast Impact Net Growth / NCO / Other 3/31/2021 3% 4% 5% 6% 7% 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 4Q20 Forecast 1Q21 Forecast Coverage Ratio (ex PPP) 1 Source: Oxford Economics as of March 2021 2 Hotel loan balances are included in the C&I and Construction segments ACL Overview ACL by Segment (ex PPP) Full-Year GDP forecast of 7.0% in 2021 and 3.0% in 20221 Year-End Unemployment forecast of 4.6% in 2021 and 4.2% in 20221 1Q 2021 ACL Commentary • Coverage ratio of 2.51% excluding PPP loans and 2.86% including estimated remaining credit mark on the acquired loan portfolio • ACL declined $24.0 million in 1Q 2021 driven by: • Positive developments in the economic forecast • Core loan growth offset by purposeful portfolio run-off, net migration, and net charge-offs 2.73% 2.51% GDP Growth by Quarter Unemployment by Quarter 1Q 2021 ACL ($mm) Economic Forecast Impact $0 $229 $205 -$24 ($ millions) $ % $ % $ % C&I2 $62.3 2.96% $142.4 7.32% $119.4 6.38% Construction2 $5.2 0.82% $12.2 1.70% $14.3 1.82% CRE Investor $26.6 1.19% $31.1 1.49% $30.5 1.55% Owner Occupied $9.4 0.72% $9.6 0.72% $9.6 0.72% Leases $3.6 1.34% $8.5 3.41% $6.5 2.43% Mortgage $11.6 1.22% $6.9 0.90% $5.7 0.85% HELOC & HEIL $12.6 1.69% $11.0 1.35% $13.2 1.61% Installment - Other $4.4 5.17% $3.8 4.64% $2.8 4.16% Other $3.4 0.81% $3.3 0.87% $2.8 0.79% TOTAL $139.1 1.60% $228.8 2.73% $204.9 2.51% March 31, 2020 December 31, 2020 March 31, 2021 -5% 0% 5% 10% 15% 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 4Q20 Forecast 1Q21 Forecast
9 3 2021 Core Outlook (as originally presented in 4Q 2020 Presentation) Loan Growth Mid single digit growth excluding PPP and non-relationship run-off portfolios primarily driven by C&I, leasing and consumer; 90% of PPP loans assumed forgiven by 4Q 2021 and approximate $200M decline from run-off portfolios Deposit Growth Mid single digit core deposit growth offset by purposeful reduction of time deposits, excluding the impact of elevated customer liquidity Net Interest Margin Range of 3.65% - 3.80%; assumes no short-term interest rate changes; approximately 24-28 bps of purchased loan accretion; approximately 6-10 bps positive PPP impact; assumes 11 bps negative impact from elevated customer liquidity Fee Income Growth1 Mid single digit growth excluding Durbin (effective July 2020) and lower Mortgage compared to outsized 2020; double digit Wealth and mid-high single digit core banking growth; flat including Durbin and Mortgage Provision Costs $20-25 million reflecting new loan growth; opportunity for reserve release if economic recovery accelerates Efficiency Ratio1 Low 60s driven by items described above combined with franchise growth and continued talent and Delivery Transformation investments Tax Rate Approximately 24% 2021 Core Outlook Outlook assumes a gradual and uneven economic recovery, franchise growth, and continued investments in our talent and technology 1 The Company is not able to reconcile the forward-looking non-GAAP estimates set forth above to their most directly comparable GAAP estimates without unreasonable efforts because it is unable to predict, forecast or determine the probable significance of the items impacting these estimates with a reasonable degree of accuracy
10 WSFS Franchise and Markets
11 1 As of 3/31/2021 2 AUA represents Assets Under Administration and AUM represents Assets Under Management 3 AUM includes advisory businesses (West Capital Management, Cypress Capital Management, and WSFS Wealth Investments) The WSFS Franchise1 Largest independent bank & trust company HQ in Delaware-Greater Philadelphia region • $14.7 billion in assets • $24.7 billion in combined AUA2 and AUM2, including $2.3 billion in AUM3 • 111 offices, including 88 branches • One of largest ATM networks in our market with 625 branded-ATMs Founded in 1832, WSFS is one of the ten oldest banks in the U.S. Major Business Lines National Presence Commercial Retail Wealth Cash Connect® Equipment Leasing Mortgage Regional Presence
12 Manufacturing 6% Trade, Transportation & Utilities 18% Financial Activities 8% Professionl & Business Services 16% Educational & Health Services 23% Leisure & Hospitality 7% Other 10% Government 12% ~10-20% higher income than the U.S. overall 1 Bureau of Labor Statistics, as of February 2021: Employees on nonfarm payrolls by industry supersector; Philadelphia-Camden-Wilmington MSA; not seasonally adjusted 2 Unemployment rate for the Philadelphia-Camden-Wilmington MSA, as of February 2021. Not seasonally adjusted 3 U.S. Census Bureau: 2019 American Community Survey; Philadelphia-Camden-Wilmington MSA 4 Bureau of Labor Statistics, as of May 2019: Occupational Employment and Wages, Philadelphia-Camden-Wilmington, MSA Diversity of industries drives stable and favorable employment and economic growth in our markets Regional Employment Composition1 Regional Statistics3 The WSFS Franchise - Our Markets Philadelphia-Camden-Wilmington MSA Over 4% of U.S. within branch network 6.1M Population 2.3M Households 2.5M Housing Units $40.9K Per Capita Income $264K Median Home Value ~10% higher household value than the U.S. overall 38.9 Median Age 67% Housing Owner Occupied 7.8% Unemployment2 • 47% improvement since 2Q 2020 peak Purchasing power vs. US Avg Income $27.69 Mean Hourly Wage4 $74.5K Median Home Income
13 • 4th largest metro in the Northeast –$444 billion regional economy • 6th largest MSA population in the U.S • 4th largest depository MSA in the U.S. 1 Sources: FDIC and S&P Global Market Intelligence. Market Share data excludes brokered deposits, credit unions, and non-traditional banks (e.g. credit card companies); as of June 30, 2020. Philadelphia-Camden-Wilmington MSA (includes Cecil County, MD) 2 Sources: U.S Bureau of Economic Analysis, U.S. Census Bureau, Select Greater Philadelphia Council, U.S Bureau of Labor Statistics. Philadelphia-Camden-Wilmington MSA (includes Cecil County, MD) At $14.7 billion in assets at 3/31/21, WSFS fills a long-standing service gap in our market between larger regional/national banks and smaller community banks The WSFS Franchise – Strategic Opportunity Regional Highlights2 • 45% YOY improvement in branch efficiency (deposits per branch) • 11% YOY deposit growth • 79 institutions with ~$355M average deposits outside of MSA’s top 15 WSFS Highlights1 # Institution Name Net Deposits ($mm) Market Share % Deposits / Branch ($mm) Branch Count 1 Wells Fargo Bank $35,311 16.7% $196.2 180 2 TD Bank $32,871 15.6% $236.5 139 3 Bank of America $22,412 10.6% $287.3 78 4 PNC Bank $20,752 9.8% $141.2 147 5 Citizens Bank $19,346 9.2% $119.4 162 6 M & T Bank $10,891 5.2% $242.0 45 7 WSFS Bank $9,680 4.6% $125.7 77 8 Santander Bank $6,966 3.3% $96.8 72 9 Truist Bank $5,852 2.8% $80.2 73 10 Univest Bank and Trust $4,317 2.0% $134.9 32 11 Bryn Mawr Trust $4,081 1.9% $99.5 41 12 Fulton Bank $3,933 1.9% $74.2 53 13 Republic First Bank $3,425 1.6% $126.9 27 14 Firstrust Savings Bank $3,138 1.5% $184.6 17 15 KeyBank $2,230 1.06% $62.0 36 Remaining 79 Institutions $28,026 13.3% $81.5 344 MSA: Philadelphia-Camden- Wilmington1 2020
14 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 reconciliation to GAAP financial information Note: GAAP ROA is the following: 2018 – 1.92%, 2019 – 1.30%, and 2020 – 0.87% The WSFS Franchise – Growth & Performance M ill io ns
15 • Maximizing data-driven analytics to deliver personalized campaigns leading to customer acquisitions • Implementing Salesforce© for improved 360-degree views of Customers for cross-sell opportunities • Lower new customer acquisition cost while improving Net Promoter Score Optimization of our physical footprint driving accelerating investments into our digital capabilities, consistent with our brand, to provide best-in-industry solutions and better serve Customers Delivery Transformation • Redesigning the account opening process focused on the Customer Experience • Delivering a true omnichannel experience that reduces application time and processing requirements • Improving synergies with marketing campaigns and reduced physical signatures • Digital documentation and retention • Improving AML and fraud detection success through Verafin© • Incorporating robotic processing automation into organization design reducing manual turnaround times and decreasing cost • Creating a flexible technology stack for future growth and broader capabilities Identify & target new Customers Enable our Customers to bank as they want Transforming for the evolving digital age OneWSFS Identify & Target Enable Customers Transform $17.5M 2021 Expected Net Investment
16 #1 “Top Bank” in Delaware nine years in a row; The News Journal “Best of Biz” for Business Banking; South Jersey Magazine 2020 Annual World’s Best Banks & America’s Best Banks honoree; Forbes “Soaring 76’s Fastest Growing Companies”; Philadelphia Business Journal “Best Community Involvement”; DE Small Business Chamber 10th Ranked Bank in America for 2021; Forbes 2020 Gallup Culture Transformation Award; Gallup Organization 1 Completed by the Gallup Organization, as of December 31, 2020 2 Per Bloomberg; closing price as of March 31, 2021 Recognitions and Total Shareholder Returns “Top Workplace” fifteen years in a row and #1 in 2020; The News Journal “Top Workplace” six years in a row; Inquirer.com “4th Ranked Bank Overall”; Bank Director 2021 Gallup Exceptional Workplace Award; Gallup Organization Engaged Associates, living our culture, making a better life for all we serve Total Shareholder Returns2 “Best Board and Technology Strategy”; Bank Director 0% 50% 100% 150% 200% 250% 300% 1 Year 3 Year 5 Year 7 Year 10 Year 1 Year 3 Year 5 Year 7 Year 10 Year WSFS 102.9% 7.8% 60.9% 123.1% 249.2% KBW Bank 90.1% 23.7% 113.8% 98.1% 193.2% SNL U.S. Bank > $10B 66.9% 13.1% 87.9% 79.3% 162.9% NASDAQ Bank 91.6% 21.4% 91.9% 100.0% 211.9% S&P 500 56.3% 59.2% 112.6% 143.9% 267.6%
17 Lines of Business
18 Disciplined Credit and Underwriting Philosophy • Conservative lending and concentration limits • CRE1: 300% limit; 202% actual • Construction2: 100% limit; 68% actual • Concentration limits by industry, CRE, project and individual borrower • House Limit: $70 million at 3/31/2021 (No Relationships Exceed) • 5 relationships >$50 million Business Banking Middle Market Comm. Real Estate Small Business SBA Lending Revenues: $3 million - $20 million+ Revenues: $20 million-$150 million Revenues: N/A Revenues: $250,000 - $5 million+ Profit: Up to $5 million Loan Exposure: $1 million – $15 million+ Loan Exposure: $5 million – $30 million+ Loan Exposure: $3 million – $30 million+ Loan Exposure: up to $1.5 million Loan Exposure: up to $5 million Average Relationship Exposure: $2.3 million Average Relationship Exposure: $5.8 million Average Relationship Exposure: $7.6 million Average Loan Exposure: $0.1 million Average Loan Exposure: $0.2 million 40 Relationship Managers 6 Relationship Managers 14 Relationship Managers 17 Relationship Managers 7 Relationship Managers Local, relationship-focused lending including cash management, wealth management, and private banking services 1 Defined as the sum of CRE and Construction (excluding owner occupied) exposures divided by the sum of Tier 1 Capital and ACL; as of 3/31/21 2 Defined as Construction (excluding owner occupied) exposure divided by the sum of Tier 1 Capital and ACL; as of 3/31/21 3 As of 12/31 each year Commercial Banking 37 35 41 6 6 6 14 15 15 12 19 17 4 5 7 25 40 55 70 85 2018 2019 2020 Business Banking Middle Market CRE Small Business SBA Lending Relationship Managers3 73 80 86
19 Branch & ATM Network Online & Mobile Banking Lending Mortgage Locations across Delaware, southeastern Pennsylvania and southern New Jersey Over 128K active online banking users and over 83K active mobile banking users Providing Customers with a wide range of options to make banking simple, intuitive and seamless Meeting Customers’ borrowing needs through in-house originations and strategic partnerships Offering a full range of mortgage products with national capabilities, world-class service and local-decision making Operates universal banking model to maximize staffing efficiencies while providing a superior Customer experience Highly rated mobile banking application that provides a range of functionality including WSFS SnapShot Deposit, Zelle®, MyWSFS and WSFS Mobile Cash Deposit Products: • Noninterest DDA • Interest DDA • Savings • Money Market • Time Deposits Consumer Loan Products: • Installment • HELOC • Personal Lines • Credit Cards • Student Loans Significant contributor to fee revenue through our originate and sell mortgage model 1 As of March 31st 2 Completed by the Gallup Organization; as of December 31, 2020 3 Excludes Brokered Deposits; as of March 31st of each year Relationship-focused community banking model with 88 banking offices & 625 ATMs1 Retail Banking Customer engagement survey places WSFS at the 66th percentile2 60% of WSFS Customers surveyed rated us a “5” out of 5, saying “WSFS is the perfect bank for people like me”2 Customer Engagement $87 $104 $139 $- $20 $40 $60 $80 $100 $120 $140 1Q 2019 1Q 2020 1Q 2021 Average Customer Deposits Per Branch ($mm)3
20 WSFS Wealth 1 AUM includes advisory businesses (West Capital Management, Cypress Capital Management, and WSFS Wealth Investments) 2 As of March 31st of each year Financial Highlights 1Q 2021 total revenue of $19.2 million 1Q 2021 pre-tax income of $9.3 million $24.7 billion in combined Assets Under Management and Administration, including $2.3 billion in AUM1 at 3/31/2021 $19.0 $21.1 $24.7 $5 $10 $15 $20 $25 1Q 2019 1Q 2020 1Q 2021 Bi lli on s Total AUM and AUA2
21 • Oldest and second largest vault cash provider in the ATM industry - over $1.7 billion in vault cash supplied or supported at 3/31/2021 • Approximately 33,000 non-bank ATMs & retail safes in all 50 states1 • ~9,000 devices utilizing armored car management and/or cash forecasting1 • Support over 70 ATM ISOs and ~940 deposit safe customers with over 4,900 safes1 • Supports over 6001 branded ATMs for WSFS Bank; one of the largest networks in our footprint • $10.1 million in net revenue (fee revenue less funding costs) and $1.7 million in pre-tax income in 1Q 2021 • 1Q 2021 ROA of 1.29% • 5-year CAGR2 for net revenue of 9.5% • 77% growth in dollars managed since 2018 1 As of 3/31/2021 2 5 years ending 3/31/2021 3 As of March 31st of each year ATM Vault Cash “Bailment” Smart Safes Armored Carrier Management Cash Forecasting & Reconcilement Services Loss Protection Fees WSFS Branded ATMs Leading National Provider of Cash Logistics and Services Cash Connect® An innovation center for the company, both expanding core ATM offerings and additional payment, processing and software-related activities (i.e., launched WSFS Mobile Cash) Dollars Managed ($mm)3 $1,254 $1,368 $1,729 $0 $400 $800 $1,200 $1,600 $2,000 1Q 2019 1Q 2020 1Q 2021
22 NewLane Finance Background: • Co-founded in 2017 by industry veterans, each with over 20 years of experience1 Market Size: • Micro & Small Ticket Equipment Leasing is a $100 billion segment with over 100 thousand equipment dealers and 31 million small businesses nationwide Product Offering: • Lease/Loan to finance business critical equipment • Deal size ranges from $3K - $500K; average deal size approximately $30K • Yields range 4%-29% with terms 12-72 months • Stable credit default risk and minimal residual exposure Vendor Relationship Model Small and Mid-Size Business Market Focus Advanced Technology Platform Superior Customer Experience Simple, Fast and Convenient Offer Attractive Risk Adjusted Margins Micro & Small Ticket Commercial Equipment Financing Value Proposition: • Provide a better lending experience through advanced technologies, customer-centric approach and transparent business lending practices • Deliver simple, fast, & competitive financing solutions $57 $111 $135 $- $30 $60 $90 $120 $150 2018 2019 2020 FY Leasing Originations ($mm) 1 Co-founders built Marlin Business Services from a start-up to a publicly-traded company (Nasdaq: MRLN) 2 Full quarter as of March 31st $20 $28 $40 $- $10 $20 $30 $40 1Q19 1Q20 1Q21 Qtr. Leasing Originations ($mm)2
23 Selected Financial and Performance Metrics
24 Time 9% Non-interest DDA 31% Money Market & Savings 38% Interest DDA 22% Customer Funding increased $0.6 billion in 1Q 2021 elevated by excess liquidity Balance Sheet Composition at March 31, 2021 C&I 39% CRE 24% Construction 10% Commerical Leasing 3% Residential Mortgage 10% Consumer 14% Investments 22% Cash Connect 3% Other Non- Earning Assets 19% Net Loans (ex PPP) 56% • Commercial loans comprise 75% of the gross loan portfolio, excluding PPP • $11.4 million credit card exposure Equity 12% Customer Deposits 83% Investments are composed of high quality, marketable investment grade securities with low credit risk; more than 95% in MBS issued by GNMA, FNMA or FHLMC 1 Excludes $526.8 million of PPP loans at March 31, 2021 2 Excludes brokered deposits $14.2B Assets $8.0B Net Loans Asset Composition (ex PPP)1 13% YOY Asset Growth Funding Composition $12.2B Deposits2 70% Loan-to-Deposit 30% YOY Deposit Growth Other Borrowings 3% Other Liabilities 2% Consumer 52% Wealth & Trust 7% Commercial 24% Small Business 14% Other 3% Funding By LOB
25 0.26% 0.28% 0.37% 0.65% 0.82% 0.47% 0.20% 0.19% 0.21% 0.27% 0.47% 0.62% 0.35% 0.14% 0.0% 0.1% 0.2% 0.3% 0.4% 0.5% 0.6% 0.7% 0.8% 0.9% $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 2015 2016 2017 2018 2019 2020 YTD 2021 Bi lli on s Interest-bearing Noninterest-bearing Interest-bearing cost Total Deposit cost Customer Deposit Costs 1 Interest-bearing deposits include demand, money market, savings, and customer time deposits • Disciplined funding cost- management through interest rate cycles while supporting Customer and deposit retention • 91% total customer deposits represent Core • No and low-interest DDA accounts (WAC 4 bps) represent 53% of customer deposits 1 1
26 $30 $33 $37 $40 $55 $48 $6 $7 $6 $6 $11 $30 $30 $36 $43 $51 $51 $41 $23 $27 $36 $41 $44 $50 $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 2015 2016 2017 2018 2019 2020 To ta l C or e 1 Fe e Re ve nu e $ in M ill io ns Bank Segment Mortgage Cash Connect Trust & Wealth 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 reconciliation to GAAP financial information. 2 %s represent core fee (noninterest) revenue / total net revenue Note: GAAP Fee Revenue is the following: 2018 – $201.0M, 2019 – $188.1M, and 2020 - $162.5M; GAAP Fee Revenue/Total Net Revenue is the following: 2018 – 40%, 2019 – 30%, and 2020 – 30% • Core Fee revenue is well diversified with over 20 discrete products and services within our lines of business 2020 Notables: • Cash Connect fees impacted by the lower interest rate environment, fully offset by reduced funding costs • Bank Segment included the first year of Durbin, which had a $6.5M negative impact • Strong historical growth in each segment; 5-year CAGR (2016-2020): • Trust & Wealth: 17% • Cash Connect: 6% • Bank: 10% • Total: 14% Diversified & Robust Core Fee Revenue 27%2 27%2 36%2 36%2 35%2 34%2
27 0.0% 0.2% 0.4% 0.6% 0.8% 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 10% 20% 30% 40% 50% 60% 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 Classified Loans Criticized Loans Delinquencies1 / Gross Loans Net Charge-Offs3 1 Includes non-accruing loans 2 One large $15.4 million, highly-seasonal relationship that was exited in 3Q 2016 3 Ratio of quarterly net charge-offs to average gross loans Criticized & Classified Loans / Tier-1 + ACL NPAs / Total Assets 47.1% 32.9% 0.35% 0.19% Credit Metrics (ex PPP) 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 Delinquencies Large Relationship Govt. Guaranteed Student Loans 0.86% 2
28 3 Credit Risk Management – Select Portfolios • Almost all loan modifications are making some form of payment as of March 31, 2021 • $531.9 million or 6.5% of loan portfolio1 • 48% Criticized; ~85% of loans include recourse; 100% secured by real estate • 65% business and 35% leisure • $739.7 million or 9.0% of loan portfolio1 • 6.3% Criticized; ~75% of loans include recourse • No outstanding loan balances to indoor shopping malls • $164.0 million or 2.0% of loan portfolio1 • 35% Criticized; ~90% of loans include recourse; ~50% secured by real estate • $353 thousand average loan size • $453.5 million or 5.5% of loan portfolio1 • 11% Criticized; ~85% of loans include recourse • $1.5 million average loan size Hotel Portfolio Retail CRE Portfolio Office CRE Portfolio2 Food Services Portfolio Retail Trade Portfolio • $257.9 million or 3.1% of loan portfolio1 • 9% Criticized; ~95% of loans include recourse • 41% are grocers, food/beverage retailers, drug stores, or home improvement Loan Modifications1 1 Portfolio values are net loans excluding PPP as of March 31, 2021 2 Office CRE portfolio excludes Medical Office CRE ($ in millions) $ % of Portfolio C&I 54$ 2.9% CRE 10$ 0.5% Owner Occupied 6$ 0.5% Construction 9$ 1.1% Total Commercial 79$ 1.3% Total Consumer 32$ 1.6% Total Loan Modifications 111$ 1.4%
29 • Branch Net Promoter Score (NPS) improved to 77.6 in 1Q 2021, the highest quarter performance since program inception. Contact Center Net Promotor Score (NPS) improved in 1Q 2021 to 60.0. Surveys are conducted utilizing Medallia • Since COVID-19 pandemic, WSFS supported consistent volumes of total deposit transactions with a significant shift from physical to mobile • Increased digital and remote banking volume demonstrates versatile and adaptable channel strategy, while managing a significant increase in contact center volume due to COVID-19 impact and relief programs • MyWSFS, launched in 2019, offers a secure mobile application that enables communication directly and in real-time with a WSFS Associate to support Customer’s banking needs from any location 1 Chart reflects monthly volume in 2020 indexed to average monthly 2019 volume 2 Chart reflects cumulative growth since COVID-19 and through March 31, 2021 Channel Strategy and Digital Adoption 99% 92% 83% 58% 66% 61% 66% 65% 67% 70% 59% 71% 66% 55% 71% 100% 102% 96% 105% 123% 95% 105% 111% 100% 92% 93% 88% 104% 111% 85% 106% 115% 105% 128% 141% 162% 186% 172% 166% 159% 162% 160% 187% 166% 144% 182% 0% 25% 50% 75% 100% 125% 150% 175% 200% 2019 Avg Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Channel Volumes1 Branch Transactions Contact Center Call Handled Mobile Deposits - 5,000 10,000 15,000 myWSFS Adoption and Usage Growth2 Conversations Adoptions
30 Capital Management - Bank Disciplined capital management providing flexibility to grow & return profits to shareholders Tier 1 Leverage Ratio Common Equity Tier 1 Capital Tier 1 Capital Total Risk-Based Capital M ill io ns M ill io ns M ill io ns M ill io ns 9.83% 10.35% 10.52% 10.72% 9.66% 9.73% 10.82% 11.72% 11.85% 10.40% 10.31% 9.74% 9.82% 4.5% 6.5% 8.5% 10.5% 12.5% 14.5% 4,000 6,000 8,000 10,000 12,000 14,000 16,000 Dec 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Dec 2017 Dec 2018 Dec 2019 Mar 2020 Jun 2020 Sep 2020 Dec 2020 Mar 2021 Average Assets (QTD) Tier 1 Leverage Ratio 13.04% 13.16% 12.54% 12.35% 11.19% 11.36% 12.69% 13.52% 13.41% 12.68% 13.24% 12.50% 13.20% 7.5% 9.0% 10.5% 12.0% 13.5% 15.0% 350 550 750 950 1,150 1,350 1,550 Dec 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Dec 2017 Dec 2018 Dec 2019 Mar 2020 Jun 2020 Sep 2020 Dec 2020 Mar 2021 Tier 1 Capital Tier 1 Capital Ratio 13.04% 13.16% 12.54% 12.35% 11.19% 11.36% 12.69% 13.52% 13.41% 12.68% 13.24% 12.50% 13.20% 0.0% 1.5% 3.0% 4.5% 6.0% 7.5% 9.0% 10.5% 12.0% 13.5% 350 550 750 950 1,150 1,350 1,550 Dec 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Dec 2017 Dec 2018 Dec 2019 Mar 2020 Jun 2020 Sep 2020 Dec 2020 Mar 2021 Common Equity Tier 1 Capital Common Equity Tier 1 Capital Ratio 14.29% 14.36% 13.56% 13.15% 11.93% 12.08% 13.37% 14.01% 14.53% 13.93% 14.50% 13.76% 14.46% 9.5% 10.5% 11.5% 12.5% 13.5% 14.5% 400 600 800 1,000 1,200 1,400 1,600 Dec 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Dec 2017 Dec 2018 Dec 2019 Mar 2020 Jun 2020 Sep 2020 Dec 2020 Mar 2021 Total Capital Total Risk Based Capital Ratio
31Note: 2015 adjusted to reflect 3 for 1 stock split in May 20151 As defined in our most recent proxy as of March 12, 2021 (dollars in 000s) 2015 2016 2017 2018 2019 2020 Total Capital Returned $37,606 $22,061 $21,165 $44,419 $113,780 $179,313 Total Shares Repurchased 1,152,233 449,371 255,000 691,742 2,132,390 3,950,855 $0.21 $0.25 $0.30 $0.42 $0.47 $0.48 $- $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $- $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 $180,000 $200,000 2015 2016 2017 2018 2019 2020 A nn ua l D iv id en ds P ai d pe r Sh ar e Ca pi ta l R et ur ne d ($ in 0 00 s) Dividends Routine buybacks Incremental buybacks Annual Dividend Per Share Capital Management / Ownership Alignment • Executive management incentive compensation and equity awards aligned with shareholder performance ROA, ROTCE and EPS growth – equally weighted • Insider ownership1 is approximately 2% Board of Directors and Executive Management ownership guidelines in place and followed • Repurchased 267,309 shares in 1Q 2021 Approximately 9% of common shares outstanding still available for repurchase, under the Board authorization approved in 1Q 2020, that allows for the purchase of 15% of outstanding shares • The Board of Directors approved a quarterly cash dividend of $0.13 per share of common stock which will be paid in May 2021
32 1 WSFS IRR model estimates: Static Balance Sheet / Instantaneous Rate Shocks 2 Includes PPP loans • High % of variable/adjustable rate to total loan portfolio: 53% excluding PPP • Approximately half of variable rate loans tied to 30- day LIBOR • High % core deposits: 91%; high % non-interest bearing and low-interest DDA: 53% • Solid brand and position / strong and diversified low-cost funding across all lines of business • Assumes long-term historical deposit beta of approximately 50% Interest Rate Risk1 at March 31, 2021 WSJ Prime @ 3.25% Balance Sheet Drivers 12-Month IRR2 BPs change NII Impact (%) NII Impact ($) -100 (3.3%) ($13.6 million) -50 (2.0%) ($8.4 million) -25 (1.4%) ($5.7 million) Static Base +25 1.7% $7.0 million +50 3.5% $14.3 million +100 7.2% $29.4 million
33 WSFS Mission, Vision, Strategy, and Values
34 Appendix: Non-GAAP Financial Information
35 Non-GAAP Information This presentation contains financial measures determined by methods other than in accordance with accounting principles generally accepted in the United States (GAAP). This presentation may include the following non-GAAP measures: • Adjusted net income (non-GAAP) attributable to WSFS is a non-GAAP measure that adjusts net income determined in accordance with GAAP to exclude the impact of securities gains, realized/unrealized gains on equity investments, net, corporate development and restructuring expenses, and Contribution to WSFS Community Foundation; • Core noninterest income, also called core fee revenue, is a non-GAAP measure that adjusts noninterest income as determined in accordance with GAAP to exclude the impact of securities gains and realized/unrealized gains on equity investments, net; • Core fee revenue percentage is a non-GAAP measure that divides (i) core fee revenue by (ii) core net revenue (tax-equivalent); • Core net interest income is a non-GAAP measure that adjusts net interest income to exclude the impact of FHLB special dividend; • Core earnings (loss) per share is a non-GAAP measure that divides (i) adjusted net income (non-GAAP) attributable to WSFS by (ii) weighted average shares of common stock outstanding for the applicable period; • Core net revenue is a non-GAAP measure that adds (i) core net interest income and (ii) core fee revenue; • Core noninterest expense is a non-GAAP measure that adjusts noninterest expense as determined in accordance with GAAP to exclude corporate development and restructuring expenses, and contribution to WSFS Community Foundation; • Core efficiency ratio is a non-GAAP measure that divides (i) core noninterest expense by (ii) the sum of core interest income and core fee revenue; • Core return on average assets (ROA) is a non-GAAP measure that divides (i) adjusted net income (non-GAAP) attributable to WSFS by (ii) average assets for the applicable period; • Tangible common equity is a non-GAAP measure and is defined as total average stockholders’ equity less goodwill, other intangible assets; • Return on average tangible common equity (ROTCE) is a non-GAAP measure and is defined as net income allocable to common stockholders divided by tangible common equity; • Pre-provision net revenue (PPNR) is a non-GAAP measure that adjusts net income determined in accordance with GAAP to exclude the impacts of (i) income tax provision and (ii) (recovery of) provision for credit losses; • Core PPNR is a non-GAAP measure that excludes the impact of securities gains, realized/unrealized gains on equity investments, net, corporate development and restructuring expenses, and Contribution to WSFS Community Foundation; • PPNR percentage is a non-GAAP measure that divides (i) PPNR (annualized) by (ii) average assets for the applicable period; • Core PPNR percentage is a non-GAAP measure that divides (i) core PPNR (annualized) by (ii) average assets for the applicable period; and • Core return on average equity (ROE) is a non-GAAP measure that divides (i) adjusted net income (non-GAAP) attributable to WSFS by (ii) average stockholders’ equity for the applicable period
36 Appendix: Non-GAAP Financial Information Three Months Ended (dollars in thousands, except per share data) March 31, 2021 December 31, 2020 March 31, 2020 Net interest income (GAAP) $ 114,185 $ 123,001 $ 116,150 Core net interest income (non-GAAP) $ 114,185 $ 123,001 $ 116,150 Noninterest income (GAAP) $ 47,822 $ 46,632 $ 40,847 Less: Securities gains 329 3,153 693 Less: Unrealized gains on equity investments, net — — 668 Core fee revenue (non-GAAP) $ 47,493 $ 43,479 $ 39,486 Core net revenue (non-GAAP) $ 161,678 $ 166,480 $ 155,636 Core net revenue (non-GAAP) (tax-equivalent) $ 161,943 $ 166,756 $ 155,905 Noninterest expense (GAAP) $ 95,619 $ 93,373 $ 88,496 Less/(plus): Corporate development expense 2,095 (242) 1,341 Less: Restructuring expense (265) 510 — Less: Contribution to WSFS Community Foundation — — 3,000 Core noninterest expense (non-GAAP) $ 93,789 $ 93,105 $ 84,155 Core efficiency ratio 57.9% 55.8% 54.0% Core fee revenue as a percentage of total core net revenue (tax-equivalent) 29.33% 26.07% 25.33% PPP income $ 11,525 $ 10,506 $ — Core fee revenue as a percentage of total core net revenue excl. PPP income(tax- equivalent) 30.1% 27.8% 25.3%
37 Appendix: Non-GAAP Financial Information (dollars in thousands, except per share data) GAAP net income attributable to WSFS $ 65,082 $ 59,813 $ 10,927 Plus/(less): Pre-tax adjustments1 2,980 (Plus)/less: Tax impact of pre-tax adjustments Adjusted net income (non-GAAP) attributable to WSFS $ 66,594 $ 57,615 $ 11,887 Net income (GAAP) $ 65,141 $ 59,741 $ 10,567 Plus: Income tax provision 1,288 Plus/(less): (Recovery of) provision for credit losses 56,646 PPNR (Non-GAAP) 68,501 Plus/(less): Pre-tax adjustments1 2,980 Core PPNR (Non-GAAP) $ 67,889 $ 73,375 $ 71,481 Average Assets PPNR % (Non-GAAP) 1.89% 2.21% 2.27% Core PPNR % (Non-GAAP) 1.93% 2.12% 2.36% GAAP return on average assets (ROA) 0.36% Plus/(less): Pre-tax adjustments1 0.10 (Plus)/less: Tax impact of pre-tax adjustments Core ROA (non-GAAP) 0.39% Earnings per share (GAAP) $ 1.36 $ 1.20 $ 0.21 Plus/(less): Pre-tax adjustments1 0.06 (Plus)/less: Tax impact of pre-tax adjustments Core earnings per share (non-GAAP) $ 1.39 $ 1.16 $ 0.23 1,501 (2,885) March 31, 2021 December 31, 2020 March 31, 2020 11 687 21,407 17,455 (2,020) 1,501 (2,885) 14,256,209$ 13,752,900$ 12,159,524$ (20,160) (936) 66,388 76,260 0.02 1.89% 1.67% (0.07) 1.85% 1.73% 0.04 (0.08) 0.03 (0.06) — 0.02 (0.04) Three Months Ended — 1 Pre-tax adjustments include securities gains, realized/unrealized gains on equity investments, corporate development and restructuring expense, loss on early extinguishment of debt, and contribution to WSFS Community Foundation.
38 Appendix: Non-GAAP Financial Information (dollars in thousands, except per share data) Calculation of return on average tangible common equity: GAAP net income attributable to WSFS $ 65,082 $ 59,813 $ 10,927 Plus: Tax effected amortization of intangible assets 2,103 Net tangible income (non-GAAP) $ 67,086 $ 61,903 $ 13,030 Average stockholders' equity of WSFS Less: average goodwill and intangible assets 556,344 558,750 567,695 Net average tangible common equity Return on average common equity (GAAP) 14.90% 13.00% 11.08% Return on average tangible common equity (non-GAAP) 22.38% 19.37% 4.13% Calculation of core return on average tangible common equity: Adjusted net income (non-GAAP) attributable to WSFS $ 66,594 $ 57,615 $ 11,887 Plus: Tax effected amortization of intangible assets 2,103 Core net tangible income (non-GAAP) Net average tangible common equity Core return on average common equity (GAAP) 15.24% 12.52% 2.60% Core return on average tangible common equity (non-GAAP) 22.89% 18.68% 4.44% 1,835,501$ 1,267,806$ 13,990$ 1,267,806$ 1,215,478$ 1,271,494$ March 31, 2020 Three Months Ended 2,004 2,090 68,598$ 59,705$ 1,771,822$ 1,830,244$ 1,215,478$ 1,271,494$ 2,004 2,090 March 31, 2021 December 31, 2020
39 Appendix: Non-GAAP Financial Information 1 For details on our core adjustments for full-year 2010 through 2020 refer to each years’ respective fourth quarter Earnings Release filed at Exhibit 99.1 on Form 8-K (dollars in thousands, except per share data) 2010 2011 2012 2013 Net Income (GAAP) 14,117$ 22,677$ 31,311$ 46,882$ Adj: Plus/less core (after-tax)1 420 (2,664) (11,546) (4,290) Adjusted net income (non-GAAP) 14,537$ 20,013$ 19,765$ 42,592$ Average Assets 3,796,166$ 4,070,896$ 4,267,358$ 4,365,389$ GAAP ROA 0.37% 0.56% 0.73% 1.07% Core ROA 0.38% 0.49% 0.46% 0.98% (dollars in thousands, except per share data) 2014 2015 2016 2017 Net Income (GAAP) 53,757$ 53,533$ 64,080$ 50,244$ Adj: Plus/less core (after-tax)1 (4,632) 4,407 4,323 32,597 Adjusted net income (non-GAAP) 49,125$ 57,940$ 68,403$ 82,841$ Average Assets 4,598,121$ 5,074,129$ 6,042,824$ 6,820,471$ GAAP ROA 1.17% 1.05% 1.06% 0.74% Core ROA 1.07% 1.14% 1.13% 1.21% (dollars in thousands, except per share data) 2018 2019 2020 Net Income (GAAP) 134,743$ 148,809$ 114,774$ Adj: Plus/less core (after-tax)1 (20,436) 36,295 (18,126) Adjusted net income (non-GAAP) 114,307$ 185,104$ 96,648$ Average Assets 7,014,447$ 11,477,856$ 13,148,317$ GAAP ROA 1.92% 1.30% 0.87% Core ROA 1.63% 1.61% 0.74% For the year ended December 31, For the year ended December 31, For the year ended December 31,
40 Appendix: Non-GAAP Financial Information 1 Completed on a fully tax-equivalent basis (dollars in thousands, except per share data) Net interest income (as reported) Adj: FHLB special dividend Adj: Tax-equivalent income 2,298 Core net interest income1 Average Interest-Earning Assets Net interest margin 3.87% Core net interest margin 3.85% Noninterest income (as reported) Adj: Securities gains Adj: Realized gain on sale of equity investment, net - - - Adj: Unrealized gains on equity investment, net - - - Core fee revenue Core net revenue Core net revenue (tax-equivalent) Core fee revenue % 34.3% Core fee revenue % (tax-equivalent) 34.0% 2015 2016 (808) For the year ended December 31, (1,478) 86,777$ 255,769$ 255,067$ 193,745$ - 196,715$ 5,072,473$ 105,061$ 102,692$ 296,437$ 4,368,223$ 168,290$ 166,800$ 88,255$ 2018 221,271$ - 2,991 224,262$ 34.6% 34.3% 5,684,724$ 3.95% 299,407$ 2,970 3.88% 3.88% (2,369) 3.95% 124,644$ 2017 (21) 138,037$ 384,492$ 385,852$ 35.9% 35.8% (3,757) (20,745) 1,360 247,834$ 6,052,145$ 4.09% 4.09% 162,541$ 246,474$ - (1,984) 122,660$ 343,931$ 346,922$ 35.7% 35.4% 606,549$ 607,764$ 26.6% 26.6% 2019 2020 465,955$ - 1,151 467,106$ 4.44% 188,109$ (333) - (26,175) 161,601$ 444,948$ - 1,215 446,163$ 10,057,074$ 4.44% 636,242$ 26.6% 26.6% 11,804,926$ 3.96% 3.96% 201,025$ (9,076) (22,052) (761) 169,136$ 635,091$ (dollars in thousands, except per share data) Core fee revenue (non-GAAP) Less: PPP fee revenue Core fee revenue excl. PPP Core net revenue (non-GAAP) Less: PPP income Core net revenue excl. PPP Core fee revenue as a percentage of core net revenue excl. PPP March 31, 2021 December 31, 2020 June 30, 2020 March 31, 2020 Three Months Ended September 30, 2020 30.2% 43,479$ 45,745$ 40,246$ 39,486$ 43,479$ 45,745$ 40,246$ 39,486$ 47,493$ 2,159 45,334$ 161,678$ 11,525 150,153$ 149,346$ 27.1% - - 155,636$ 25.4% 155,974$ 27.9% - 6,373 152,420$ 30.0% 166,480$ 158,793$ 154,182$ 155,636$ - 10,506 - 4,836
41 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 Chairman, President and CEO 302-571-7296 rlevenson@wsfsbank.com Dominic C. Canuso Chief Financial Officer 302-571-6833 dcanuso@wsfsbank.com