WILMINGTON, Del., July 23, 2015 (GLOBE NEWSWIRE) -- WSFS Financial Corporation (Nasdaq:WSFS), the parent company of WSFS Bank, reported net income of $12.2 million, or $0.43 per diluted common share for the second quarter of 2015 compared to net income of $12.7 million, or $0.46 per share for the second quarter of 2014 and net income of $12.9 million, or $0.45 per share for the first quarter of 2015.
Net income for the first six months of 2015 was $25.1 million, or $0.88 per diluted common share, as compared to $29.6 million, or $1.08 per share for the same period of 2014. Results for 2014 include a one-time tax benefit of $6.7 million, or $0.24 per share.
Highlights for the second quarter of 2015:
- Core(n) net revenue (excluding securities gains and a special FHLB dividend) increased $2.4 million, or 4% (not annualized), from the first quarter of 2015, and 12% from the second quarter of 2014, reflecting strong organic growth.
- Net revenue growth included an increase in core(n) fee income of $1.3 million, or 6% (not annualized), from the first quarter of 2015, from organic growth and seasonal increases.
- Expenses declined slightly from the first quarter of 2015, and along with the robust revenue increases mentioned above, this resulted in significantly improved operating leverage, efficiency and pre-tax, pre-provision net revenue.
- Net loans increased at more than a 13% annualized rate over the first quarter of 2015, including a 16% annualized increase in commercial loans.
- Core deposits increased at a 9% annualized rate over the first quarter of 2015, reflecting continued strong growth in our customer relationships.
Notable items:
- WSFS recorded $686,000 (pre-tax) or $0.02 per share (after-tax) in expenses related to corporate development activities during the second quarter of 2015, primarily related to the pending Alliance Bancorp acquisition.
- WSFS realized $477,000, or $0.01 per share, in net gains on securities sales from its investment portfolio.
- A $9.1 million substandard loan and troubled debt restructuring (TDR) was placed on nonaccrual status during the second quarter of 2015. This event added $3.6 million in incremental loan loss provision in the second quarter, or an $0.08 per share negative impact.
CEO outlook and commentary:
Mark A. Turner, President and CEO, said, “Despite a one-off credit setback, our second quarter results reflect solid fundamental performance. We continue to see increases in net interest income driven by good growth in our loan portfolio. We have also seen strong growth in our fee income driven by bank-related businesses of Cash Connect, Wealth Management and mortgage banking. Expenses were well managed and broad loan portfolio credit quality statistics showed improvement.
“Additionally our continued focus on innovation, growth and serving our Customers was demonstrated in the quarter as we announced several new digital products and services. These services include WSFS Mobile Cash, our cardless ATM access, WSFS Everyday PaySM, WSFS Business Mobile Banking and our strategic alliance with ZenBanx to provide mobile, multi-currency deposit accounts, and are responsive to Customers’ and market needs.
“We have made steady progress towards, and remain committed to achieving our strategic plan goals, including a core and sustainable 1.20% ROA by the end of the fourth quarter of 2015.”
Second Quarter 2015 Discussion of Financial Results
Continued solid growth in net interest income
Net interest income for the second quarter of 2015 was $39.1 million, a $273,000, or 1% (not annualized), increase from the first quarter of 2015 while the net interest margin was 3.71%. The first quarter of 2015 included a special $808,000 FHLB dividend which added 8 basis points (bps) to the margin that quarter. Excluding this special dividend, net interest income increased $1.1 million, or 3% (not annualized) compared to the first quarter of 2015, primarily due to sizable loan growth; and the net interest margin decreased 3 bps as a result of the continued interest rate environment and competitive pricing pressures.
Compared to the second quarter of 2014, net interest income increased $3.6 million, or 10%, while the net interest margin increased 7 bps. These substantial year-over-year increases were primarily due to loan growth from both successful acquisition and organic growth.
Broad-based loan growth accelerates
At June 30, 2015, WSFS’ net loan portfolio increased $107.5 million, or 3% (not annualized), to $3.34 billion when compared to March 31, 2015. This quarter’s increase came entirely from organic growth and was spread across almost all loan categories, with noteworthy growth in the commercial real estate ($48.8 million) and construction ($48.4 million) portfolios.
Compared to the second quarter of 2014, net loans increased $315.0 million, or 10%, despite a competitive market and the impact of paydowns/payoffs of problem loans over the past year as the economy has improved. This growth was achieved through organic growth and $176.0 million in loans from the September 2014 First National Bank of Wyoming (FNBW) acquisition.
The following table summarizes loan balances and composition at June 30, 2015 compared to prior periods:
| At | At | At | |||||||||||||||||||||||||||||
| (Dollars in Thousands) | June 30, 2015 | March 31, 2015 | June 30,2014 | ||||||||||||||||||||||||||||
| Commercial & industrial | $ | 1,728,457 | 52 | % | $ | 1,719,233 | 53 | % | $ | 1,634,362 | 54 | % | |||||||||||||||||||
| Commercial real estate | 864,053 | 25 | 815,287 | 25 | 756,815 | 25 | |||||||||||||||||||||||||
| Construction | 200,328 | 6 | 151,945 | 5 | 118,222 | 4 | |||||||||||||||||||||||||
| Total commercial loans | 2,792,838 | 83 | 2,686,465 | 83 | 2,509,399 | 83 | |||||||||||||||||||||||||
| Residential mortgage | 261,703 | 8 | 263,911 | 8 | 247,147 | 8 | |||||||||||||||||||||||||
| Consumer | 329,874 | 10 | 325,160 | 10 | 313,384 | 10 | |||||||||||||||||||||||||
| Allowance for loan losses | (40,845 | ) | (1 | ) | (39,507 | ) | (1 | ) | (41,381 | ) | (1 | ) | |||||||||||||||||||
| Net Loans | $ | 3,343,570 | 100 | % | $ | 3,236,029 | 100 | % | $ | 3,028,549 | 100 | % | |||||||||||||||||||
Credit quality remains strong despite one problem loan
Credit quality remained strong during the second quarter of 2015 despite the impact of one $9.1 million Commercial & Industrial (C&I) problem loan relationship previously classified as substandard and accruing TDR, which was moved to nonaccruing status during the second quarter of 2015.
Total nonperforming assets were $46.2 million at June 30, 2015, a $3.1 million, or 6% (not annualized), improvement from March 31, 2015 and delinquencies improved 26% (not annualized), to a low 0.48% of gross loans at June 30, 2015 (this ratio includes nonperforming delinquencies). Classified loans declined and the ratio of total classified loans to Tier 1 capital plus allowance for loan losses (ALLL) also improved to 18.33% from 21.14% at March 31, 2015 and 30.60% at June 30, 2014.
Net charge-offs for the second quarter of 2015 were $2.5 million, or 0.29% of total net loans on an annualized basis (including $1.9 million relating to the nonaccruing C&I relationship mentioned above). Total credit costs (provision for loan losses, loan workout expenses, OREO expenses and other credit reserves) were $4.0 million during the quarter ended June 30, 2015 (including the $3.6 million for the nonaccruing C&I relationship mentioned above), an increase from $883,000 in the previous quarter and $627,000 in the second quarter of 2014.
The ALLL grew to $40.8 million at June 30, 2015 from $39.5 million in the first quarter of 2015, reflecting broadly improved portfolio statistics offset by growth in the loan portfolio as well as the expected loss on the additional nonaccruing loan. The ratio of the ALLL to total gross loans remained flat at 1.22% at June 30, 2015 compared to March 31, 2015 and is a healthy 147% of nonaccruing loans.
Total customer funding reflects continued strength in relationship accounts
Total customer funding increased $14.4 million from March 31, 2015. This was mainly due to a $65.1 million, or 9% (annualized), increase in core deposits which was partially offset by a decrease of $50.9 million in time deposits. The decrease in time deposits was generally the result of allowing older, higher-rate CDs to run-off as a part of net interest margin management.
Total customer funding increased by $387.0 million, or 13%, from June 30, 2014 to $3.36 billion at June 30, 2015. The increase was driven by a $418.4 million, or 17%, increase in core deposits which was partially offset by a $28.4 million decrease in time deposits, as discussed above. Included in the year-over-year growth was $228.8 million in total customer funding from the September 2014 FNBW acquisition.
Core deposits now represent a robust 87% of total customer funding, and no-cost and low-cost relationship checking deposit accounts represent a strong 47% of total customer funding.
The following table summarizes customer funding balances and composition at June 30, 2015 compared to prior periods:
| At | At | At | ||||||||||||||||||
| (Dollars in thousands) | June 30, 2015 | March 31, 2015 | June 30, 2014 | |||||||||||||||||
| Noninterest demand | $ | 875,955 | 26 | % | $ | 837,416 | 25 | % | $ | 709,186 | 24 | % | ||||||||
| Interest-bearing demand | 697,365 | 21 | 699,312 | 21 | 643,061 | 22 | ||||||||||||||
| Savings | 419,864 | 13 | 418,004 | 12 | 401,049 | 13 | ||||||||||||||
| Money market | 926,583 | 27 | 899,917 | 27 | 748,099 | 25 | ||||||||||||||
| Total core deposits | 2,919,767 | 87 | 2,854,649 | 85 | 2,501,395 | 84 | ||||||||||||||
| Customer time | 423,066 | 12 | 474,003 | 14 | 451,475 | 15 | ||||||||||||||
| Total customer deposits | 3,342,833 | 99 | 3,328,652 | 99 | 2,952,870 | 99 | ||||||||||||||
| Customer sweep accounts | 14,433 | 1 | 14,257 | 1 | 17,384 | 1 | ||||||||||||||
| Total customer funding | $ | 3,357,266 | 100 | % | $ | 3,342,909 | 100 | % | $ | 2,970,254 | 100 | % | ||||||||
Fee income reflects strong growth over prior quarter
Fee income (noninterest income) increased by $1.3 million, or 6% (not annualized), to $22.5 million compared to the first quarter of 2015. The increase included increases in investment management and fiduciary revenue of $614,000 and credit/debit card and ATM income of $435,000. The overall increase from the prior quarter is attributable to organic growth and typical seasonality in fees.
When compared to the same period a year ago, fee income (noninterest income) increased $2.8 million, or 14%. This was the result of growth in both banking and banking-related businesses and included increases in investment management and fiduciary revenue of $1.4 million, mortgage banking activities of $565,000 and credit/debit card and ATM income of $452,000.
Fee income is now a robust 36% of total revenue and is well diversified among various sources: traditional banking, mortgage banking, wealth management and ATM services (Cash Connect).
Noninterest expense reflects ongoing expense management
Noninterest expense for the second quarter of 2015 was $38.7 million, a decrease of $259,000 from $38.9 million in the first quarter of 2015. The decrease was primarily due to a $665,000 decrease in salaries, benefits and other compensation from good expense management and the first quarter has typical seasonal increases for higher employer costs such as higher vacation accrual costs, 401(k) matching costs and certain employer-paid taxes. Marketing expense increased during the second quarter of 2015 to support growth and the introduction of the aforementioned new products and services.
When compared to the second quarter of 2014, noninterest expense increased $3.4 million. Excluding notable items in both periods,(n) noninterest expense increased $2.9 million, or 8%. The increase was primarily to support robust organic growth and the September 2014 acquisition of FNBW.
Selected Business Segments (included in previous results):
Wealth Management segment fee revenue grew by 30% over the prior year
The Wealth Management segment provides a broad array of fiduciary, investment management, credit and deposit products to clients through four businesses. WSFS Wealth Investments provides insurance and brokerage products primarily to our retail banking clients. Cypress Capital Management, LLC is a registered investment advisor with approximately $655 million in assets under management (AUM). Cypress’ primary market segment is high net worth individuals, offering a ‘balanced’ investment style focused on preservation of capital and providing for current income. Christiana Trust, with $8.86 billion in assets under management and administration, provides fiduciary and investment services to personal trust clients, and trustee, agency, bankruptcy, custodial and commercial domicile services to corporate and institutional clients. WSFS Private Banking serves high net worth clients by delivering credit and deposit products and partnering with other business units to deliver investment management and fiduciary products and services.
Total Wealth Management revenue (net interest income, investment management and fiduciary revenue and other fee income) was $9.0 million during the second quarter of 2015. This represented an increase of $1.7 million, or 24% compared to the second quarter of 2014 and an increase of $803,000, or 10% (not annualized), compared to the first quarter of 2015. Included in this increase, fee revenue increased $1.4 million, or 30%, compared to the second quarter of 2014 and $638,000, or 12% (not annualized), compared to the first quarter of 2015. The year-over-year and quarterly growth reflects the continued expansion of several Wealth business lines, with particular strength in corporate bankruptcy and securitization trustee appointments and retail brokerage services.
Total segment noninterest expense (including intercompany allocations of expense and provision for loan losses and credit costs) was $5.9 million during the second quarter of 2015 compared to $4.4 million during the second quarter of 2014 and $4.9 million during the first quarter of 2015. The second quarter of 2015 noninterest expenses were impacted by legal and consulting fees and seasonal client tax return preparation costs totaling $680,000. Excluding these fees in each year, noninterest expense increased $903,000 compared to the second quarter of 2014 and $41,000 from the first quarter of 2015. These year-over-year increases are primarily due to higher legal, consulting and compensation costs necessary to support the robust growth and volume-related commissions and transaction charges.
Pre-tax income for the Wealth Management segment in the second quarter of 2015 was $3.1 million compared to $2.8 million in the second quarter of 2014 and $3.3 million in the first quarter of 2015. Excluding the legal fees and seasonal tax expenses discussed above in each year, pre-tax income for the second quarter of 2015 was $3.7 million compared to $3.1 million in the second quarter of 2014 and $3.3 million in the first quarter of 2015.
Cash Connect results reflect meaningful growth over 2014
The Cash Connect® segment is a premier provider of ATM vault cash and related services in the United States. Cash Connect® services over $557 million in vault cash in over 15,900 non-bank ATMs nationwide and also operates approximately 450 ATMs for WSFS Bank, which has the largest branded ATM network in Delaware.
Cash Connect® recorded $6.9 million in net revenue (fee income less funding costs) during the second quarter of 2015, an increase of $459,000 from the $6.4 million reported in the first quarter of 2015, reflecting continued organic and seasonal growth. Net revenue also increased $712,000, or 12%, compared to the second quarter of 2014. Noninterest expenses (including intercompany allocations of expense) were $5.0 million during the second quarter of 2015, an increase of $42,000 compared to the first quarter of 2015 and an increase of $579,000 from the second quarter of 2014. Cash Connect® reported pre-tax income of $1.9 million for the second quarter of 2015, compared to $1.7 million in the second quarter of 2014 and $1.6 million in the first quarter of 2015. The year-over-year results reflect continued growth in the business, offset partially by investments in new products and infrastructure to support growth. Most recently, on June 25, 2015, Cash Connect introduced “WSFS Mobile Cash”, offering security, convenience and speed in digital access to cash. It allows customers to securely withdraw cash from ATMs by using our WSFS Mobile Banking App. WSFS is first in the region and fourth in the United States to provide this service.
Income taxes
The Company recorded a $6.9 million income tax provision in the second quarter of 2015 compared to a $7.3 million tax provision in the first quarter of 2015 and a $7.1 million tax provision in the second quarter of 2014.
The effective tax rate was 36.0% in the second quarter of 2015, 36.2% in the first quarter of 2015 and 35.8% in the second quarter of 2014. The slight increase in the effective tax rates for the first and second quarters of 2015 are principally due to certain nondeductible expenses associated with our pending acquisition of Alliance Bancorp.
Capital management
WSFS’ total stockholders’ equity decreased $5.1 million to $500.4 million at June 30, 2015 from $505.5 million at March 31, 2015, as a result of Company earnings offset by the Company’s ongoing stock buyback program and a decrease in the unrealized gains on the Company’s available-for-sale investment portfolio.
For the same reasons, WSFS’ tangible common equity(n) decreased to $443.3 million at June 30, 2015 from $448.1 million at March 31, 2015. WSFS’ tangible common equity to asset ratio(n) decreased by 34 basis points to 8.83%. Tangible common book value per share(n) was $15.88 at June 30, 2015, a $0.03 increase from March 31, 2015 due to the impact of the above and share repurchases discussed below.
At June 30, 2015, WSFS Bank’s Tier I leverage ratio of 10.59%, Common Equity Tier 1 capital ratio of 12.60%, Tier 1 capital ratio of 12.60% and total capital ratio of 13.60%, were all substantially in excess of the “well-capitalized” regulatory benchmarks.
During the third quarter of 2014, the WSFS Board of Directors approved a stock buyback program of up to 5% of total outstanding shares of common stock. In the second quarter of 2015, WSFS repurchased 455,402 shares of common stock at an average price of $25.81. WSFS has repurchased the equivalent of 839,582 shares to date under this program at an average equivalent price of $25.75 and has 569,818 shares, or approximately 2% of outstanding shares remaining to repurchase under this current authorization.
During the first quarter of 2015, the WSFS Board of Directors also declared a three-for-one stock split in our common stock in the form of a stock dividend of two shares for each issued and outstanding share of common stock. The stock dividend was paid on May 18, 2015 to stockholders of record as of May 4, 2015.
Finally, the Board of Directors approved a quarterly cash dividend of $0.05 per share of common stock. This dividend will be paid on August 21, 2015, to shareholders of record as of August 7, 2015.
Second quarter 2015 earnings release conference call
Management will conduct a conference call to review second quarter results at 1:00 p.m. Eastern Time (ET) on Friday, July 24, 2015. Interested parties may listen to this call by dialing 1-877-312-5857. A rebroadcast of the conference call will be available two hours after the completion of the call until August 8, 2015, by dialing 1-855-859-2056 and using Conference ID 82950073.
About WSFS Financial Corporation
WSFS Financial Corporation is a multi-billion dollar financial services company. Its primary subsidiary, WSFS Bank, is the oldest, locally-managed bank and trust company headquartered in Delaware with $5.1 billion in assets on its balance sheet and $9.5 billion in fiduciary assets, including approximately $1.2 billion in assets under management. WSFS operates from 56 offices located in Delaware (45), Pennsylvania (9), Virginia (1) and Nevada (1) and provides comprehensive financial services including commercial banking, retail banking and trust and wealth management. Other subsidiaries or divisions include Christiana Trust, WSFS Wealth Investments, Cypress Capital Management, LLC, Cash Connect®, Array Financial and Arrow Land Transfer. Serving the Delaware Valley since 1832, WSFS Bank is the seventh oldest bank in the United States continuously operating under the same name. For more information, please visit www.wsfsbank.com.
Forward-Looking Statement Disclaimer
This press release contains estimates, predictions, opinions, projections and other “forward-looking statements” as that phrase is defined in the Private Securities Litigation Reform Act of 1995. Such statements include, without limitation, references to the Company’s predictions or expectations of future business or financial performance as well as its goals and objectives for future operations, financial and business trends, business prospects, and management’s outlook or expectations for earnings, revenues, expenses, capital levels, liquidity levels, asset quality or other future financial or business performance, strategies or expectations. Such forward-looking statements are based on various assumptions (some of which may be beyond the Company’s control) and are subject to risks and uncertainties (which change over time) and other factors which could cause actual results to differ materially from those currently anticipated. Such risks and uncertainties include, but are not limited to, those related to difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the market areas in which the Company operates and in which its loans are concentrated, including the effects of declines in housing markets, an increase in unemployment levels and slowdowns in economic growth; the Company’s level of nonperforming assets and the costs associated with resolving any problem loans including litigation and other costs; changes in market interest rates may increase funding costs and reduce earning asset yields thus reducing margin; the impact of changes in interest rates and the credit quality and strength of underlying collateral and the effect of such changes on the market value of the Company’s investment securities portfolio; the credit risk associated with the substantial amount of commercial real estate, construction and land development, and commercial and industrial loans in our loan portfolio; the extensive federal and state regulation, supervision and examination governing almost every aspect of the Company’s operations including the changes in regulations affecting financial institutions, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations being issued in accordance with this statute and potential expenses associated with complying with such regulations; possible additional loan losses and impairment of the collectability of loans; the Company’s ability to comply with applicable capital and liquidity requirements (including the finalized Basel III capital standards), including our ability to generate liquidity internally or raise capital on favorable terms; possible changes in trade, monetary and fiscal policies, laws and regulations and other activities of governments, agencies, and similar organizations; any impairment of the Company’s goodwill or other intangible assets; failure of the financial and operational controls of the Company’s Cash Connect division; conditions in the financial markets that may limit the Company’s access to additional funding to meet its liquidity needs; the success of the Company’s growth plans, including the successful integration of past and future acquisitions; negative perceptions or publicity with respect to the Company’s trust and wealth management business; system failure or cybersecurity breaches of the Company’s network security; the Company’s ability to recruit and retain key employees; the effects of problems encountered by other financial institutions that adversely affect the Company or the banking industry generally; the effects of weather and natural disasters such as floods, droughts, wind, tornadoes and hurricanes as well as effects from geopolitical instability and man-made disasters including terrorist attacks; possible changes in the speed of loan prepayments by the Company’s customers and loan origination or sales volumes; possible acceleration of prepayments of mortgage-backed securities due to low interest rates, and the related acceleration of premium amortization on prepayments on mortgage-backed securities due to low interest rates; regulatory limits on the Company’s ability to receive dividends from its subsidiaries and pay dividends to its shareholders; the effects of any reputational, credit, interest rate, market, operational, legal, liquidity, regulatory and compliance risk resulting from developments related to any of the risks discussed above; and the costs associated with resolving any problem loans, litigation and other risks and uncertainties, discussed in the Company’s Form 10-K for the year ended December 31, 2014 and other documents filed by the Company with the Securities and Exchange Commission from time to time. Forward looking statements are as of the date they are made, and the Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company.
| WSFS FINANCIAL CORPORATION | |||||||||||||||||
| FINANCIAL HIGHLIGHTS | |||||||||||||||||
| STATEMENTS OF OPERATIONS | |||||||||||||||||
| (Dollars in thousands, except per share data) | Three months ended | Six months ended | |||||||||||||||
| (Unaudited) | June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||
| 2015 | 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Interest income: | |||||||||||||||||
| Interest and fees on loans | $ | 37,090 | $ | 36,244 | $ | 33,319 | $ | 73,334 | $ | 65,521 | |||||||
| Interest on mortgage-backed securities | 3,523 | 3,433 | 3,564 | 6,956 | 6,813 | ||||||||||||
| Interest and dividends on investment securities | 852 | 860 | 814 | 1,712 | 1,606 | ||||||||||||
| Interest on reverse mortgage loans | 1,166 | 1,236 | 1,368 | 2,402 | 2,594 | ||||||||||||
| Other interest income | 424 | 1,078 | 348 | 1,502 | 664 | ||||||||||||
| 43,055 | 42,851 | 39,413 | 85,906 | 77,198 | |||||||||||||
| Interest expense: | |||||||||||||||||
| Interest on deposits | 1,825 | 1,942 | 1,714 | 3,767 | 3,370 | ||||||||||||
| Interest on Federal Home Loan Bank advances | 751 | 713 | 661 | 1,464 | 1,187 | ||||||||||||
| Interest on trust preferred borrowings | 339 | 327 | 330 | 666 | 656 | ||||||||||||
| Interest on senior debt | 941 | 942 | 941 | 1,883 | 1,883 | ||||||||||||
| Interest on bonds payable | - | - | - | - | 15 | ||||||||||||
| Interest on other borrowings | 109 | 110 | 290 | 219 | 566 | ||||||||||||
| 3,965 | 4,034 | 3,936 | 7,999 | 7,677 | |||||||||||||
| Net interest income | 39,090 | 38,817 | 35,477 | 77,907 | 69,521 | ||||||||||||
| Provision for loan losses | 3,773 | 786 | 50 | 4,559 | 2,680 | ||||||||||||
| Net interest income after provision for loan losses | 35,317 | 38,031 | 35,427 | 73,348 | 66,841 | ||||||||||||
| Noninterest income: | |||||||||||||||||
| Credit/debit card and ATM income | 6,462 | 6,027 | 6,010 | 12,489 | 11,776 | ||||||||||||
| Deposit service charges | 4,099 | 3,905 | 4,346 | 8,004 | 8,615 | ||||||||||||
| Investment management and fiduciary revenue | 5,707 | 5,093 | 4,287 | 10,800 | 8,121 | ||||||||||||
| Mortgage banking activities, net | 1,590 | 1,703 | 1,025 | 3,293 | 1,837 | ||||||||||||
| Investment securities gains, net | 477 | 451 | 365 | 928 | 943 | ||||||||||||
| Loan fee income | 469 | 463 | 556 | 932 | 940 | ||||||||||||
| Bank-owned life insurance income | 179 | 203 | 143 | 382 | 282 | ||||||||||||
| Other income | 3,475 | 3,250 | 2,891 | 6,725 | 5,473 | ||||||||||||
| 22,458 | 21,095 | 19,623 | 43,553 | 37,987 | |||||||||||||
| Noninterest expense: | |||||||||||||||||
| Salaries, benefits and other compensation | 20,345 | 21,010 | 18,668 | 41,355 | 37,142 | ||||||||||||
| Occupancy expense | 3,637 | 3,878 | 3,569 | 7,515 | 7,298 | ||||||||||||
| Equipment expense | 1,959 | 2,082 | 1,860 | 4,041 | 3,547 | ||||||||||||
| Data processing and operations expense | 1,459 | 1,422 | 1,531 | 2,881 | 3,002 | ||||||||||||
| Professional fees | 1,753 | 1,472 | 2,215 | 3,225 | 3,321 | ||||||||||||
| FDIC expenses | 687 | 669 | 692 | 1,356 | 1,345 | ||||||||||||
| Loan workout and OREO expense | 330 | (1 | ) | 716 | 329 | 1,255 | |||||||||||
| Marketing expense | 1,007 | 584 | 442 | 1,591 | 941 | ||||||||||||
| Corporate development expense | 686 | 596 | 158 | 1,282 | 412 | ||||||||||||
| Other operating expenses | 6,791 | 7,201 | 5,373 | 13,992 | 10,845 | ||||||||||||
| 38,654 | 38,913 | 35,224 | 77,567 | 69,108 | |||||||||||||
| Income before taxes | 19,121 | 20,213 | 19,826 | 39,334 | 35,720 | ||||||||||||
| Income tax provision | 6,887 | 7,324 | 7,101 | 14,211 | 6,084 | ||||||||||||
| Net income | $ | 12,234 | $ | 12,889 | $ | 12,725 | $ | 25,123 | $ | 29,636 | |||||||
| Diluted earnings per share of common stock (p): | |||||||||||||||||
| Net income allocable to common stockholders | $ | 0.43 | $ | 0.45 | $ | 0.46 | $ | 0.88 | $ | 1.08 | |||||||
| Weighted average shares of common stock outstanding for fully diluted EPS | 28,604,235 | 28,752,987 | 27,429,240 | 28,637,499 | 27,419,436 | ||||||||||||
| Performance Ratios: | |||||||||||||||||
| Return on average assets (a) | 0.98 | % | 1.06 | % | 1.12 | % | 1.02 | % | 1.32 | % | |||||||
| Return on average equity (a) | 9.61 | 10.30 | 12.03 | 9.96 | 14.41 | ||||||||||||
| Return on tangible common equity (a) (n) | 11.18 | 12.00 | 13.52 | 11.59 | 16.20 | ||||||||||||
| Net interest margin (a)(b) | 3.71 | 3.82 | 3.64 | 3.76 | 3.61 | ||||||||||||
| Efficiency ratio (c) | 62.27 | 64.39 | 63.85 | 63.31 | 64.20 | ||||||||||||
| Noninterest income as a percentage of total net revenue (b) | 36.18 | 34.91 | 35.28 | 35.55 | 34.99 | ||||||||||||
| See "Notes" | |||||||||||||||||
| WSFS FINANCIAL CORPORATION | |||||||||
| FINANCIAL HIGHLIGHTS (Continued) | |||||||||
| SUMMARY STATEMENTS OF CONDITION | |||||||||
| (Dollars in thousands) | |||||||||
| (Unaudited) | June 30, | March 31, | June 30, | ||||||
| 2015 | 2015 | 2014 | |||||||
| Assets: | |||||||||
| Cash and due from banks | $ | 108,928 | $ | 92,481 | $ | 107,169 | |||
| Cash in non-owned ATMs | 424,238 | 412,958 | 367,870 | ||||||
| Investment securities (d) | 149,750 | 157,955 | 149,602 | ||||||
| Other investments | 32,357 | 27,854 | 37,737 | ||||||
| Mortgage-backed securities (d) | 752,693 | 751,429 | 692,104 | ||||||
| Net loans (e)(f)(l) | 3,343,570 | 3,236,030 | 3,028,549 | ||||||
| Reverse mortgage loans | 25,945 | 27,035 | 32,543 | ||||||
| Bank owned life insurance | 76,891 | 76,712 | 63,467 | ||||||
| Goodwill and intangibles | 57,044 | 57,369 | 38,295 | ||||||
| Other assets | 106,067 | 106,657 | 95,754 | ||||||
| Total assets | $ | 5,077,483 | $ | 4,946,480 | $ | 4,613,090 | |||
| Liabilities and Stockholders' Equity: | |||||||||
| Noninterest-bearing deposits | $ | 875,955 | $ | 837,416 | $ | 709,186 | |||
| Interest-bearing deposits | 2,466,878 | 2,491,236 | 2,243,684 | ||||||
| Total customer deposits | 3,342,833 | 3,328,652 | 2,952,870 | ||||||
| Brokered deposits | 183,622 | 193,626 | 200,459 | ||||||
| Total deposits | 3,526,455 | 3,522,278 | 3,153,329 | ||||||
| Federal Home Loan Bank advances | 740,681 | 623,759 | 758,400 | ||||||
| Other borrowings | 260,219 | 250,798 | 226,466 | ||||||
| Other liabilities | 49,753 | 44,150 | 42,940 | ||||||
| Total liabilities | 4,577,108 | 4,440,985 | 4,181,135 | ||||||
| Stockholders' equity | 500,375 | 505,495 | 431,955 | ||||||
| Total liabilities and stockholders' equity | $ | 5,077,483 | $ | 4,946,480 | $ | 4,613,090 | |||
| Capital Ratios: | |||||||||
| Equity to asset ratio | 9.85 | % | 10.22 | % | 9.36 | % | |||
| Tangible common equity to asset ratio (n) | 8.83 | 9.17 | 8.60 | ||||||
| Common equity Tier 1 capital (g) (required: 4.5%; well capitalized: 6.5%) | 12.60 | 12.59 | - | ||||||
| Tier 1 leverage (g) (required: 4.00%; well-capitalized: 5.00%) | 10.59 | 10.69 | 10.82 | ||||||
| Tier 1 risk-based capital (g) (required: 6.00%; well-capitalized: 8.00%) | 12.60 | 12.59 | 13.53 | ||||||
| Total Risk-based capital (g) (required: 8.00%; well-capitalized: 10.00%) | 13.60 | 13.56 | 14.68 | ||||||
| Asset Quality Indicators: | |||||||||
| Nonperforming Assets: | |||||||||
| Nonaccruing loans | $ | 27,719 | $ | 20,681 | $ | 34,061 | |||
| Troubled debt restructuring (accruing) | 13,610 | 22,500 | 11,779 | ||||||
| Assets acquired through foreclosure | 4,856 | 6,088 | 4,451 | ||||||
| Total nonperforming assets | $ | 46,185 | $ | 49,269 | $ | 50,291 | |||
| Past due loans (h) | $ | 208 | $ | 694 | $ | - | |||
| Allowance for loan losses | $ | 40,845 | $ | 39,507 | $ | 41,381 | |||
| Ratio of nonperforming assets to total assets | 0.91 | % | 1.00 | % | 1.09 | % | |||
| Ratio of nonperforming assets (excluding accruing TDRs) | 0.64 | 0.54 | 0.83 | ||||||
| Ratio of allowance for loan losses to total gross loans (i) | 1.22 | 1.22 | 1.36 | ||||||
| Ratio of allowance for loan losses to nonaccruing loans | 147 | 191 | 121 | ||||||
| Ratio of quarterly net charge-offs to average gross loans (a)(e) | 0.29 | 0.09 | - | ||||||
| Ratio of year-to-date net charge-offs to average gross loans (a)(f) | 0.19 | 0.09 | 0.17 | ||||||
| See "Notes" | |||||||||
| WSFS FINANCIAL CORPORATION | ||||||||||||||||||||||||||||||||
| FINANCIAL HIGHLIGHTS (Continued) | ||||||||||||||||||||||||||||||||
| AVERAGE BALANCE SHEET | ||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||
| (Unaudited) | Three months ended | |||||||||||||||||||||||||||||||
| June 30, 2015 | March 31, 2015 | June 30, 2014 | ||||||||||||||||||||||||||||||
| Average | Interest & | Yield/ | Average | Interest & | Yield/ | Average | Interest & | Yield/ | ||||||||||||||||||||||||
| Balance | Dividends | Rate (a)(b) | Balance | Dividends | Rate (a)(b) | Balance | Dividends | Rate (a)(b) | ||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||||||||||||
| Loans: (e) (j) | ||||||||||||||||||||||||||||||||
| Commercial real estate loans | $ | 1,002,843 | $ | 11,803 | 4.71 | % | $ | 955,680 | $ | 11,225 | 4.70 | % | $ | 850,719 | $ | 9,585 | 4.51 | % | ||||||||||||||
| Residential real estate loans (l) | 255,302 | 2,510 | 3.93 | 249,612 | 2,414 | 3.87 | 232,916 | 2,281 | 3.92 | |||||||||||||||||||||||
| Commercial loans | 1,733,950 | 19,090 | 4.44 | 1,700,948 | 19,038 | 4.50 | 1,632,784 | 18,001 | 4.39 | |||||||||||||||||||||||
| Consumer loans | 327,581 | 3,687 | 4.51 | 325,449 | 3,567 | 4.44 | 310,226 | 3,452 | 4.46 | |||||||||||||||||||||||
| Total loans (l) | 3,319,676 | 37,090 | 4.49 | 3,231,689 | 36,244 | 4.50 | 3,026,645 | 33,319 | 4.42 | |||||||||||||||||||||||
| Mortgage-backed securities (d) | 751,006 | 3,523 | 1.88 | 723,018 | 3,433 | 1.90 | 714,551 | 3,564 | 2.00 | |||||||||||||||||||||||
| Investment securities (d) | 153,742 | 852 | 3.19 | 158,028 | 860 | 3.22 | 146,139 | 814 | 3.35 | |||||||||||||||||||||||
| Reverse mortgage loans | 26,931 | 1,166 | 17.32 | 28,253 | 1,236 | 17.50 | 34,463 | 1,368 | 15.88 | |||||||||||||||||||||||
| Other interest-earning assets | 28,715 | 424 | 5.92 | 31,623 | 1,078 | 13.83 | 35,629 | 348 | 3.92 | |||||||||||||||||||||||
| Total interest-earning assets | 4,280,070 | 43,055 | 4.08 | 4,172,611 | 42,851 | 4.22 | 3,957,427 | 39,413 | 4.04 | |||||||||||||||||||||||
| Allowance for loan losses | (39,924 | ) | (39,674 | ) | (42,332 | ) | ||||||||||||||||||||||||||
| Cash and due from banks | 88,124 | 81,149 | 78,476 | |||||||||||||||||||||||||||||
| Cash in non-owned ATMs | 413,977 | 402,072 | 364,461 | |||||||||||||||||||||||||||||
| Bank owned life insurance | 76,774 | 76,583 | 63,374 | |||||||||||||||||||||||||||||
| Other noninterest-earning assets | 151,506 | 148,445 | 127,708 | |||||||||||||||||||||||||||||
| Total assets | $ | 4,970,527 | $ | 4,841,186 | $ | 4,549,114 | ||||||||||||||||||||||||||
| Liabilities and Stockholders' Equity: | ||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||||||||||
| Interest-bearing demand | $ | 689,773 | $ | 158 | 0.09 | % | $ | 673,976 | $ | 152 | 0.09 | % | $ | 632,160 | $ | 148 | 0.09 | % | ||||||||||||||
| Money market | 916,666 | 596 | 0.26 | 875,273 | 538 | 0.25 | 751,559 | 335 | 0.18 | |||||||||||||||||||||||
| Savings | 414,001 | 54 | 0.05 | 408,555 | 52 | 0.05 | 403,921 | 62 | 0.06 | |||||||||||||||||||||||
| Customer time deposits | 450,997 | 855 | 0.76 | 490,077 | 1,049 | 0.87 | 451,372 | 980 | 0.87 | |||||||||||||||||||||||
| Total interest-bearing customer deposits | 2,471,437 | 1,663 | 0.27 | 2,447,881 | 1,791 | 0.30 | 2,239,012 | 1,525 | 0.27 | |||||||||||||||||||||||
| Brokered deposits | 200,940 | 162 | 0.32 | 180,618 | 151 | 0.34 | 230,366 | 189 | 0.33 | |||||||||||||||||||||||
| Total interest-bearing deposits | 2,672,377 | 1,825 | 0.27 | 2,628,499 | 1,942 | 0.30 | 2,469,378 | 1,714 | 0.28 | |||||||||||||||||||||||
| FHLB of Pittsburgh advances | 636,327 | 751 | 0.47 | 610,954 | 713 | 0.47 | 684,295 | 661 | 0.38 | |||||||||||||||||||||||
| Trust preferred borrowings | 67,011 | 339 | 2.03 | 67,011 | 327 | 1.98 | 67,011 | 330 | 1.95 | |||||||||||||||||||||||
| Senior Debt | 55,000 | 941 | 6.84 | 55,000 | 942 | 6.85 | 55,000 | 941 | 6.84 | |||||||||||||||||||||||
| Other borrowed funds | 128,126 | 109 | 0.34 | 127,325 | 110 | 0.35 | 148,910 | 290 | 0.78 | |||||||||||||||||||||||
| Total interest-bearing liabilities | 3,558,841 | 3,965 | 0.45 | 3,488,789 | 4,034 | 0.47 | 3,424,594 | 3,936 | 0.46 | |||||||||||||||||||||||
| Noninterest-bearing demand deposits | 863,241 | 811,365 | 671,384 | |||||||||||||||||||||||||||||
| Other noninterest-bearing liabilities | 39,483 | 40,628 | 30,112 | |||||||||||||||||||||||||||||
| Stockholders' equity | 508,962 | 500,404 | 423,024 | |||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 4,970,527 | $ | 4,841,186 | $ | 4,549,114 | ||||||||||||||||||||||||||
| Excess of interest-earning assets | ||||||||||||||||||||||||||||||||
| over interest-bearing liabilities | $ | 721,229 | $ | 683,822 | $ | 532,833 | ||||||||||||||||||||||||||
| Net interest and dividend income | $ | 39,090 | $ | 38,817 | $ | 35,477 | ||||||||||||||||||||||||||
| Interest rate spread | ||||||||||||||||||||||||||||||||
| 3.63 | % | 3.75 | % | 3.58 | % | |||||||||||||||||||||||||||
| Net interest margin(o) | ||||||||||||||||||||||||||||||||
| 3.71 | % | 3.82 | % | 3.64 | % | |||||||||||||||||||||||||||
| See "Notes" | ||||||||||||||||||||||||||||||||
| WSFS FINANCIAL CORPORATION | ||||||||||||||||||||
| FINANCIAL HIGHLIGHTS (Continued) | ||||||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||||||
| (Unaudited) | Three months ended | Six months ended | ||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||||
| Stock Information (p): | 2015 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||
| Market price of common stock: | ||||||||||||||||||||
| High | $ | 27.81 | $ | 26.51 | $ | 24.56 | $ | 27.81 | $ | 25.87 | ||||||||||
| Low | 23.72 | 24.51 | 21.89 | 23.72 | 21.89 | |||||||||||||||
| Close | 27.35 | 25.21 | 24.56 | 27.35 | 24.56 | |||||||||||||||
| Book value per share of common stock | 17.93 | 17.88 | 16.13 | |||||||||||||||||
| Tangible common book value per share of common stock (n) | 15.88 | 15.85 | 14.70 | |||||||||||||||||
| Number of shares of common stock outstanding (000s) | 27,909 | 28,266 | 26,772 | |||||||||||||||||
| Other Financial Data: | ||||||||||||||||||||
| One-year repricing gap to total assets (k) | 0.62 | % | 1.86 | % | 0.01 | % | ||||||||||||||
| Weighted average duration of the MBS portfolio | 4.6 years | 3.8 years | 5.2 years | |||||||||||||||||
| Unrealized (losses) gains on securities available-for-sale, net of taxes | $ | (1,588 | ) | $ | 4,731 | $ | (2,584 | ) | ||||||||||||
| Number of Associates (FTEs) (m) | 900 | 857 | 815 | |||||||||||||||||
| Number of offices (branches, LPO's, operations centers, etc.) | 56 | 56 | 52 | |||||||||||||||||
| Number of WSFS owned ATMs | 453 | 460 | 466 | |||||||||||||||||
| Notes: | ||||||||||||||||||||
| (a) | Annualized. | |||||||||||||||||||
| (b) | Computed on a fully tax-equivalent basis. | |||||||||||||||||||
| (c) | Noninterest expense divided by (tax-equivalent) net interest income and noninterest income. | |||||||||||||||||||
| (d) | Includes securities available-for-sale at fair value. | |||||||||||||||||||
| (e) | Net of unearned income. | |||||||||||||||||||
| (f) | Net of allowance for loan losses. | |||||||||||||||||||
| (g) | Represents capital ratios of Wilmington Savings Fund Society, FSB and subsidiaries. | |||||||||||||||||||
| (h) | Accruing loans which are contractually past due 90 days or more as to principal or interest. | |||||||||||||||||||
| (i) | Excludes loans held-for-sale. | |||||||||||||||||||
| (j) | Nonperforming loans are included in average balance computations. | |||||||||||||||||||
| (k) | The difference between projected amounts of interest-sensitive assets and interest-sensitive liabilities repricing within | |||||||||||||||||||
| one year divided by total assets, based on a current interest rate scenario. | ||||||||||||||||||||
| (l) | Includes loans held-for-sale. | |||||||||||||||||||
| (m) | Includes seasonal Associates, when applicable. | |||||||||||||||||||
| (n) | The Company uses non-GAAP (Generally Accepted Accounting Principles) financial information in its analysis of | |||||||||||||||||||
| the Company's performance. This non-GAAP data should be considered in addition to results prepared in accordance | ||||||||||||||||||||
| with GAAP, and is not a substitute for, or superior to, GAAP results. See page 16. | ||||||||||||||||||||
| (o) | Beginning in 2015, the annualization method used to calculate net interest margin was changed to actual/actual | |||||||||||||||||||
| from 30/360. All periods net interest margin calculations were updated to reflect this change. | ||||||||||||||||||||
| (p) | All stock information has been adjusted for the 3 for 1 stock dividend completed on May 18, 2015. | |||||||||||||||||||
| WSFS FINANCIAL CORPORATION | |||||||||||||||||||||||||||
| FINANCIAL HIGHLIGHTS (Continued) | |||||||||||||||||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||
| Non-GAAP Reconciliation (n): | Three months ended | Six months ended | |||||||||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||||||||||
| 2015 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||||
| Net interest Income (GAAP) | $ | 39,090 | $ | 38,817 | $ | 35,477 | $ | 77,907 | $ | 69,521 | |||||||||||||||||
| Less: FHLB Special Dividend | - | (808 | ) | - | (808 | ) | - | ||||||||||||||||||||
| Core net interest income | 39,090 | 38,009 | 35,477 | 77,099 | 69,521 | ||||||||||||||||||||||
| Noninterest Income (GAAP) | 22,458 | 21,095 | 19,623 | 43,553 | 37,987 | ||||||||||||||||||||||
| Less: Securities gains | (477 | ) | (451 | ) | (365 | ) | (928 | ) | (943 | ) | |||||||||||||||||
| Core fee income (non-GAAP) | 21,981 | 20,644 | 19,258 | 42,625 | 37,044 | ||||||||||||||||||||||
| Core net revenue (non-GAAP) | $ | 61,071 | $ | 58,653 | $ | 54,735 | $ | 119,724 | $ | 106,565 | |||||||||||||||||
| End of period | |||||||||||||||||||||||||||
| June 30, | March 31, | June 30, | |||||||||||||||||||||||||
| 2015 | 2015 | 2014 | |||||||||||||||||||||||||
| Total assets | $ | 5,077,483 | $ | 4,946,480 | $ | 4,613,090 | |||||||||||||||||||||
| Less: Goodwill and other intangible assets | (57,044 | ) | (57,369 | ) | (38,295 | ) | |||||||||||||||||||||
| Total tangible assets | $ | 5,020,439 | $ | 4,889,111 | $ | 4,574,795 | |||||||||||||||||||||
| Total Stockholders' equity | $ | 500,375 | $ | 505,495 | $ | 431,955 | |||||||||||||||||||||
| Less: Goodwill and other intangible assets | (57,044 | ) | (57,369 | ) | (38,295 | ) | |||||||||||||||||||||
| Total tangible common equity | $ | 443,331 | $ | 448,126 | $ | 393,660 | |||||||||||||||||||||
| Calculation of tangible common book value per share: | |||||||||||||||||||||||||||
| Book Value per share (GAAP) | $ | 17.93 | $ | 17.88 | $ | 16.13 | |||||||||||||||||||||
| Tangible common book value per share (non-GAAP) | 15.88 | 15.85 | 14.70 | ||||||||||||||||||||||||
| Calculation of tangible common equity to assets: | |||||||||||||||||||||||||||
| Equity to asset ratio (GAAP) | 9.85 | % | 10.22 | % | 9.36 | % | |||||||||||||||||||||
| Tangible common equity to asset ratio (non-GAAP) | 8.83 | 9.17 | 8.60 | ||||||||||||||||||||||||
| Three months ended | |||||||||||||||||||||||||||
| Six months ended | |||||||||||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||||||||||
| 2015 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||||
| GAAP net income | $ | 12,234 | $ | 12,889 | $ | 12,725 | $ | 25,123 | $ | 29,636 | |||||||||||||||||
| Less: Sec. gains, Special FHLB dividend, legal settlement, corp. dev. costs & income tax benefit, net of taxes | 209 | 334 | 397 | 543 | (6,516 | ) | |||||||||||||||||||||
| Non-GAAP net income | $ | 12,443 | $ | 13,223 | $ | 13,122 | $ | 25,666 | $ | 23,120 | |||||||||||||||||
| Return on Average Assets (ROA) | 0.98 | % | 1.06 | % | 1.12 | % | 1.02 | % | 1.32 | % | |||||||||||||||||
| Less: Sec. gains, Special FHLB dividend, legal settlement, corp. dev. costs & income tax benefit, net of taxes | 0.02 | 0.03 | 0.03 | 0.02 | (0.28 | ) | |||||||||||||||||||||
| Non-GAAP ROA | 1.00 | % | 1.09 | % | 1.15 | % | 1.04 | % | 1.04 | % | |||||||||||||||||
| GAAP EPS | $ | 0.43 | $ | 0.45 | $ | 0.46 | $ | 0.88 | $ | 1.08 | |||||||||||||||||
| Less: Sec. gains, Special FHLB dividend, legal settlement, corp. dev. costs & income tax benefit, net of taxes | 0.01 | 0.01 | 0.02 | 0.02 | (0.24 | ) | |||||||||||||||||||||
| Core EPS (non-GAAP) | $ | 0.44 | $ | 0.46 | $ | 0.48 | $ | 0.90 | $ | 0.84 | |||||||||||||||||