Document


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
July 23, 2018
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
of incorporation)
  
(SEC Commission
File Number)
  
(IRS Employer
Identification Number)
 
 
 
 
500 Delaware Avenue, 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 communications pursuant to Rule 425 under the Securities Act
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act





WSFS FINANCIAL CORPORATION
INFORMATION TO BE INCLUDED IN THE REPORT
Section 2 – Financial Information
Item 2.02 Results of Operation and Financial Condition
On July 23, 2018, the Registrant issued a press release to report earnings for the quarter and six months ended June 30, 2018.  A copy of the press release is furnished with this Form 8-K as an exhibit.
Section 9 – Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
(d) Exhibits:
99    Press Release Dated July 23, 2018
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:
July 24, 2018
By:
 
/s/ Dominic C. Canuso
 
 
 
 
Dominic C. Canuso
Executive Vice President and
Chief Financial Officer


Exhibit

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WSFS Bank Center
500 Delaware Avenue, Wilmington, Delaware 19801
  
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EXHIBIT 99
 
 
 
FOR IMMEDIATE RELEASE
  
Investor Relations Contact: Dominic C. Canuso
 
  
(302) 571-6833
July 23, 2018
 
dcanuso@wsfsbank.com
 
  
Media Contact: Jimmy A. Hernandez
 
  
(302) 571-5254
 
 
jhernandez@wsfsbank.com

WSFS REPORTS 2Q 2018 RECORD OPERATING RESULTS OF 1.65% ROA
AND EPS OF $0.89, AN INCREASE OF 39%,
DRIVEN BY STRONG, BALANCED, ORGANIC GROWTH IN
NET INTEREST INCOME, FEE INCOME, LOANS AND DEPOSITS
WILMINGTON, Del.WSFS Financial Corporation (Nasdaq: WSFS), the parent company of WSFS Bank, reported net income of $28.7 million, or $0.89 per diluted common share for 2Q 2018 compared to net income of $20.6 million, or $0.64 per share for 2Q 2017, an earnings per share (EPS) increase of 39%, and $37.4 million, or $1.16 per share for 1Q 2018. 1Q 2018 results included an unrealized investment valuation gain of $15.3 million (pre-tax), or $0.36 per share (after-tax), and a fraud recovery of $1.7 million, or $0.04 per share.
Net revenue (which includes net interest income and noninterest income) was $96.0 million for 2Q 2018, an increase of $10.0 million, or 12%, from 2Q 2017. Net interest income was $61.0 million, an increase of $6.7 million, or 12%, from 2Q 2017; and fee income (noninterest income) was $35.0 million, an increase of $3.3 million, or 10%, from 2Q 2017. Noninterest expenses were $57.8 million in 2Q 2018, an increase of $5.1 million, or 10%, from 2Q 2017. This resulted in an efficiency ratio of 60.0% and 2 percentage points of positive of operating leverage from 2Q 2017.
For 2Q 2018, reported return on assets (ROA) was a very strong 1.65%, a 42 basis point (bps) increase compared to 1.23% for 2Q 2017, and return on average equity was 15.2% in comparison with 11.6% at 2Q 2017.




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Highlights for 2Q 2018: 
Core EPS(1) of $0.90 increased $0.27, or 43%, from $0.63 in 2Q 2017.
Core ROA(1) was 1.67%, a robust 45 bps increase compared to 1.22% for 2Q 2017.
Core return on average tangible common equity (ROTCE)(1) was 20.9% for 2Q 2018, a significant increase compared to 16.0% for 2Q 2017.
Core net revenue(1) of $96.0 million increased $10.7 million, or 13% from 2Q 2017, reflecting strong and balanced organic growth, including a $6.7 million, or 12%, increase in core net interest income(1) and a $4.0 million, or 13%, increase in core fee income (noninterest income)(1).
The net interest margin increased a meaningful 17 bps to 4.10% from 2Q 2017, primarily as a result of the positive impacts of the higher short-term interest rate environment, pricing discipline, and good balance sheet management, including a planned favorable change in mix of assets and liabilities. 
Core noninterest expense(1) increased $5.0 million, or 10% from 2Q 2017, with almost half coming from highly variable incentive compensation costs from pay-for-performance plans. WSFS achieved a full 3 percentage points of positive core operating leverage(1), resulting in a core efficiency ratio(1) of 59.6%, a significant improvement compared to 60.9% for 2Q 2017.
Notable items in the quarter:
WSFS realized no net gains on sales of securities in 2Q 2018, compared to $0.7 million (pre-tax), or approximately $0.01 per share (after-tax) in 2Q 2017.
WSFS recorded $0.5 million (pre-tax), or approximately $0.01 per share (after-tax) in 2Q 2018, in corporate development expenses, compared to $0.4 million (pre-tax), or approximately $0.01 per share (after-tax) in 2Q 2017.








(1) As used in this release, core EPS, core return on average assets (ROA), core return on average tangible common equity core net revenue, core net interest income, core fee income (noninterest income), core noninterest expense, core operating leverage and core efficiency ratio are non-GAAP financial measures. For a reconciliation of these measures to their comparable GAAP measures, see pages 19 and 20 of this press release.




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CEO outlook and commentary
Mark A. Turner, Chairman, President and CEO, said, “We are pleased to report another very strong quarter, which positions us to meet or exceed the primary goals in our enhanced 2016-2018 Strategic Plan, including a full year 2018 Core and Sustainable ROA of 1.50%. Our superior ROA, ROTCE, and EPS growth highlights the successful optimization of previous acquisitions, good organic growth, our diversified revenue sources, cost discipline, and the differentiation and sustainability of our business model. For the quarter, we recorded core EPS of $0.90 and a core ROA of 1.67%, which represent significant improvements from the prior year, even before the favorable impact of lower federal tax rates in the current year. Net interest income grew 12%, driven by a net interest margin of 4.10%, and core fee income grew 13% from 2Q 2017, which reflect strong and diversified growth across our core banking and fee income franchises. Loans and customer deposits grew mid-to-high single digits compared to both 1Q 2018 and 2Q 2017, consistent with our stated growth targets. Our credit quality metrics remained strong and improved across all key ratios, and disciplined expense management was evidenced by a very good 3 percentage points of positive core operating leverage compared to 2Q 2017, and a 2Q 2018 core efficiency ratio of a healthy 59.6%.”
Mr. Turner continued, “We firmly believe that our consistent commitment to Associate and Customer engagement continues to be the driver of our sustainable high performance. Our continued robust organic growth, strong financial performance, and marketplace accolades demonstrate our intense focus on and the success of our strategy of ‘Engaged Associates delivering stellar experiences growing Customer Advocates and value for our Owners’.”








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Second Quarter 2018 Discussion of Financial Results
Net interest margin increase reflects rising-rate environment and balance sheet management
Net interest margin for 2Q 2018 was 4.10%, an increase of 17 bps from 3.93% for 2Q 2017. Excluding a 7 bps increase related to the redemption of $55.0 million of our senior notes in late 3Q 2017 and a 3 bps reduction from the expected decline in reverse mortgage income, the net interest margin increased organically 13 bps compared to 2Q 2017. The 13 bps increase includes an estimated 11 bps resulting from the higher short-term interest rate environment and disciplined pricing, and approximately 2 bps from prudent balance sheet management, including a planned favorable change in mix of assets and liabilities. The anticipated year-over-year decline in reverse mortgage income was due to the continued run-off of this small and high-yielding purchased loan portfolio. Net interest income for 2Q 2018 was $61.0 million, an increase of $6.7 million, or 12%, compared to 2Q 2017.
Compared with 1Q 2018, net interest margin increased 9 bps from 4.01% and net interest income increased $3.3 million, or 6% (not annualized). The increase in net interest margin resulted primarily from 6 bps of higher purchased loan accretion during the quarter and an estimated 5 bps from the higher short-term rate environment. These increases were offset by an expected 2 bps reduction in the aforementioned reverse mortgage income.
Loan growth balanced and consistent with mid-to high single digit stated goals
At June 30, 2018, WSFS’ net loan portfolio was $4.90 billion, an increase of $79.0 million, or 7% (annualized), from March 31, 2018. The increase includes a $42.9 million, or 7% (annualized), increase in commercial and industrial (C&I) loans and a $36.2 million, or 25% (annualized), increase in consumer loans. The growth in commercial loans was achieved despite an anticipated large amount of loan pay-downs and pay-offs during the quarter and the highly competitive pricing environment. The growth in consumer loans was primarily related to purchases of second-lien home equity installment loans through our partnership with Spring EQ.
Compared to June 30, 2017, net loans increased $285.6 million, or 6%. The increase includes $51.2 million decline in residential mortgages, consistent with our ongoing strategy of selling most newly-originated residential mortgages in the secondary market. Excluding the intentional decrease in residential mortgages, net loans increased $336.8 million, or 8%, including an increase of $180.6 million, or 7%, in C&I loans, and an increase of $126.7 million, or 26%, in consumer loans.




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The following table summarizes loan balances and composition at June 30, 2018 compared to March 31, 2018 and June 30, 2017:
(Dollars in thousands)
 
June 30, 2018
 
March 31, 2018
 
June 30, 2017
Commercial & industrial
 
$
2,613,880

 
53
 %
 
$
2,570,999

 
54
 %
 
$
2,433,256

 
52
 %
Commercial real estate
 
1,153,217

 
24

 
1,156,955

 
24

 
1,139,840

 
25

Construction
 
295,488

 
6

 
288,373

 
6

 
278,349

 
6

Total commercial loans
 
4,062,585

 
83

 
4,016,327

 
84

 
3,851,445

 
83

Residential mortgage
 
256,734

 
5

 
259,899

 
5

 
307,983

 
7

Consumer
 
622,445

 
13

 
586,279

 
12

 
495,717

 
11

Allowance for loan losses
 
(41,037
)
 
(1
)
 
(40,810
)
 
(1
)
 
(40,005
)
 
(1
)
Net Loans
 
$
4,900,727

 
100
 %
 
$
4,821,695

 
100
 %
 
$
4,615,140

 
100
 %
Credit quality remains strong and trends improve across key metrics

Credit quality metrics improved during 2Q 2018 reflecting continued strength in the portfolio.
Total problem assets, which includes all criticized, classified, and nonperforming loans as well as other real estate owned (OREO), were $143.0 million at June 30, 2018, an improvement compared to $151.8 million at March 31, 2018. Classified assets, which are included in total problem assets, improved $8.0 million to $98.7 million at June 30, 2018 compared to $106.7 million at March 31, 2018.
Total delinquencies, which include nonperforming delinquencies, were $26.7 million at June 30, 2018, or 0.54%, of gross loans compared to $27.1 million, or 0.56%, of gross loans at March 31, 2018. Excluding nonperforming delinquencies, performing loan delinquencies were only 0.17% of gross loans at June 30, 2018.
Total nonperforming assets improved $1.7 million, or 3%, to $55.1 million at June 30, 2018, as compared to $56.9 million at March 31, 2018. The nonperforming assets to total assets ratio likewise improved to 0.78% at June 30, 2018 from 0.81% at March 31, 2018.
Net charge-offs for 2Q 2018 were $2.3 million, or 0.19%, (annualized), of average gross loans, an improvement from $3.4 million, or 0.29%, (annualized), for 1Q 2018, and an increase from $1.7 million, or 0.15% (annualized), during 2Q 2017. Total credit costs (provision for loan losses, loan workout expenses, OREO expenses and other credit costs), which can be uneven, were $3.2 million for 2Q 2018, an improvement from $4.1 million during 1Q 2018 and an increase from $2.3 million in 2Q 2017.




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The ratio of the ALLL to total gross loans was 0.84% at both June 30, 2018 and March 31, 2018, respectively. Excluding the balances for acquired loans (marked-to-market at acquisition), the ALLL to total gross loans ratio would have been 0.94% at June 30, 2018 compared with 0.96% at March 31, 2018. The ALLL was 113% of nonaccruing loans at June 30, 2018 compared to 120% at March 31, 2018 and 104% at June 30, 2017.
 
Customer funding reflects continued core deposit strength and mid-to-high single digit growth
Total customer funding was $5.03 billion at June 30, 2018, an $85.3 million, or 7% (annualized), increase from March 31, 2018, highlighted by a $62.3 million, or 18% (annualized), increase in noninterest bearing accounts. In addition, during 2Q 2018, we continued to take the opportunity to attract longer-term, fixed-rate funding and lengthen our overall funding duration in a rising-rate environment. As a result, Certificates of Deposit (CDs) increased $48.2 million, or 30% (annualized), in 2Q 2018.
Customer funding increased $382.5 million, or 8%, compared to June 30, 2017. This included a core deposit increase of $227.3 million, or 6%, over the prior year, with $154.1 million of that attributable to no- and low-cost checking deposit accounts. CDs also increased $155.2 million over the prior year consistent with our strategy to attract longer-term, fixed-rate funding in a rising-rate environment.
Core deposits were 86% of total customer deposits, and no- and low-cost checking deposit accounts represented a robust 48% of total customer deposits at June 30, 2018. These core deposits predominantly represent longer-term, less price-sensitive customer relationships, which are especially valuable in a rising-rate environment. The ratio of loans to customer deposits was 97% at June 30, 2018.




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The following table summarizes customer funding balances and composition at June 30, 2018 compared to March 31, 2018 and June 30, 2017:
(Dollars in thousands)
 
June 30, 2018
 
March 31, 2018
 
June 30, 2017
Noninterest demand
 
$
1,434,549

 
29
%
 
$
1,372,271

 
28
%
 
$
1,319,749

 
28
%
Interest-bearing demand
 
966,736

 
19

 
991,020

 
20

 
927,465

 
20

Savings
 
565,074

 
11

 
561,432

 
11

 
572,476

 
12

Money market
 
1,377,682

 
27

 
1,382,178

 
28

 
1,297,024

 
28

Total core deposits
 
4,344,041

 
86

 
4,306,901

 
87

 
4,116,714

 
88

Customer time deposits
 
690,267

 
14

 
642,116

 
13

 
535,115

 
12

Total customer deposits
 
$
5,034,308

 
100
%
 
$
4,949,017

 
100
%
 
$
4,651,829

 
100
%

Core fee income is well diversified, growing a strong 13% year-over-year
Core fee income (noninterest income) increased by $4.0 million, or 13%, to $35.0 million compared to 2Q 2017. This organic growth demonstrates our ability to execute on our high-service, fee-based strategy. These strong results represent growth across most of our businesses, and include increases of $1.8 million from credit/debit card and ATM income, $1.4 million from investment management and fiduciary revenue, and $0.8 million related to our more traditional banking business.
When compared to the seasonally slower 1Q 2018, core fee income increased $2.9 million, or 9% (not annualized), including a $1.1 million increase from investment management and fiduciary revenue, $0.9 million from credit/debit card and ATM income, and $0.9 million from our traditional banking business.
For 2Q 2018, core fee income was 36.3% of core net revenue, compared to 36.0% for 2Q 2017, and was diversified among various sources, including traditional banking, mortgage banking, wealth management and cash logistics services (Cash Connect®).




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Noninterest expenses reflect improved efficiency and positive operating leverage
Core noninterest expense for 2Q 2018 was $57.4 million, an increase of $5.0 million, or 10%, from $52.4 million in 2Q 2017. Contributing to the year-over-year increase was $1.3 million of higher variable incentive compensation and $1.0 million of additional performance-based earn-out expense from our recent acquisitions, both as a result of stronger performance against our operating plans. In addition, we incurred $1.4 million of higher compensation and benefit costs to support overall franchise growth, and $1.2 million of higher variable costs to support Cash Connect® revenue growth.
When compared to 1Q 2018, core noninterest expense increased $2.3 million, or $3.2 million after excluding the one-time impact of $0.9 million of net transaction costs incurred from the surrender of our BOLI policies during 1Q 2018. Contributing to the quarter-over-quarter increase was $1.1 million of higher compensation and benefit costs primarily from increased incentive compensation, $0.6 million of higher professional fees, $0.5 million of higher operating costs to support Cash Connect® revenue growth, and $0.3 million from higher marketing costs. The remaining net $0.7 million increase was due primarily to higher variable operating expenses associated with seasonally stronger revenues.
Our core efficiency ratio was 59.6% in 2Q 2018, compared to 61.1% in 1Q 2018, and 60.9% in 2Q 2017. These improvements reflect our focus on optimization of our acquisitions, organic growth and continued economies of scale as we grow.
Income taxes
We recorded a $6.9 million income tax provision in 2Q 2018, compared to provisions of $10.8 million in 1Q 2018 and $10.9 million in 2Q 2017.
The effective tax rate was 19.4% in 2Q 2018, 22.4% in 1Q 2018, and 34.5% in 2Q 2017. The lower tax rate in 2Q 2018 compared to 1Q 2018 resulted primarily from higher benefits realized from increased stock-based compensation activity. The lower tax rates in 2018 compared with 2017 primarily reflects the reduction of the corporate federal tax rate beginning in 1Q 2018.








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Selected Business Segments (included in previous results):
Wealth Management segment fee revenue grows 16% over the prior year
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 $19.09 billion in assets under management (AUM) and assets under administration (AUA) as of June 30, 2018.  
Total Wealth Management revenue (net interest income, fiduciary fees and other fee income) was $14.3 million for 2Q 2018. This represented an increase of $1.5 million, or 12%, compared to 2Q 2017 and an increase of $1.3 million, or 10% (not annualized), compared to 1Q 2018. The year-over-year increase resulted primarily from a $1.5 million, or 16%, increase in fee revenue, which reflected continued organic growth across our business lines, with particular strength in the capital markets and corporate trust services businesses.
Total noninterest expense (including intercompany allocations and provision for loan losses and credit costs) was $9.2 million in 2Q 2018, an increase of $0.1 million compared to 2Q 2017 and an increase of $1.1 million compared to 1Q 2018. The slight year-over-year increase was primarily the result of higher compensation and benefits costs to support overall growth, partially offset by lower professional fees, which can be uneven. The $1.1 million increase in expenses from 1Q 2018 was primarily due to higher professional fees and provision for loan losses. 
Pre-tax income in 2Q 2018 was $5.1 million, reflecting a strong 36% return on revenue, compared to $4.8 million in 1Q 2018 and $3.6 million in 2Q 2017 and was driven by the above mentioned factors.
























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Cash Connect® net revenue increases 10% over same quarter in 2017
Cash Connect® is a premier provider of ATM vault cash and smart safe cash logistics services in the United States. Cash Connect® services approximately 26,000 non-bank ATMs and retail safes nationwide with approximately $944 million in cash and other fee-based services. Cash Connect® also operates 439 ATMs for WSFS Bank, which has the largest branded ATM network in Delaware.
Our Cash Connect® division recorded $10.0 million of net revenue (fee income less funding costs) in 2Q 2018, an increase of $0.9 million, or 10%, from 2Q 2017, primarily due to continued growth in the bailment, cash management and smart safe lines of business, partially offset by higher funding costs. Compared to 1Q 2018, net revenue increased $0.5 million, or 6% (not annualized), due to higher cash balances, increased ATM managed services, and smart safe fee income.
Non-interest expense (including intercompany allocations of expense) was $8.6 million in 2Q 2018, an increase of $1.3 million compared to 2Q 2017 and an increase of $0.6 million compared to 1Q 2018. The year-over-year increase in expenses was primarily due to higher operating costs associated with growth, higher funding costs, and investment in enhancing our smart safe technology platform. Cash Connect® reported pre-tax income of $1.5 million for 2Q 2018, which was a decrease of $0.4 million, from 2Q 2017 and flat compared to 1Q 2018 as a result of investments in growth and margin compression.
During the first half of 2018, Cash Connect® has been impacted by rising interest rates that have challenged its customers' profitability and created margin compression for the ATM industry.  Cash Connect is focused on optimizing its cash and customers cash balances to maximize efficiency. Cash Connect continues to build its presence in the strategic remote cash capture (smart safe, recycler, and kiosk) space, with approximately 2,000 devices currently under service and a strong pipeline driven by several national channel partners.







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Capital management
WSFS’ total stockholders’ equity increased $22.7 million, or 3% (not annualized), to $769.0 million at June 30, 2018 from $746.3 million at March 31, 2018, primarily due to quarterly earnings, partially offset by the impacts of market-value changes on available-for-sale securities, stock buybacks and the payment of the common stock dividend during the quarter.
WSFS’ tangible common equity(2) increased $23.2 million, or 4% (not annualized), to $581.7 million at June 30, 2018 from $558.5 million at March 31, 2018 for the reasons described in the paragraph above.
WSFS’ common equity to assets ratio was 10.81% at June 30, 2018, and its tangible common equity to tangible assets ratio(2) increased by 19 bps during the quarter to 8.40%. At June 30, 2018, book value per share was $24.25, a $0.53, or 2%, increase from March 31, 2018, and tangible common book value per share(2) was $18.35, a $0.60, or 3%, increase from March 31, 2018.
At June 30, 2018, WSFS Bank’s Tier 1 leverage ratio of 10.36%, Common Equity Tier 1 capital ratio and Tier 1 capital ratio of 11.97%, and Total Capital ratio of 12.68% were all substantially in excess of the “well-capitalized” regulatory benchmarks.
In 2Q 2018, WSFS repurchased 50,000 shares of common stock at an average price of $51.56 as part of our 5% buyback program approved by the Board of Directors in 4Q 2015. WSFS has 579,194 shares, or slightly less than 2% of outstanding shares, remaining to repurchase under this current authorization. In addition, the Board of Directors approved a quarterly cash dividend of $0.11 per share of common stock. This dividend will be paid on August 24, 2018 to stockholders of record as of August 10, 2018.











(2) As used in this release, tangible common equity, tangible common equity to assets and tangible common book value per share are non-GAAP financial measures. For a reconciliation of these measures to their comparable GAAP measures, see pages 19 and 20 of this press release.




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Second quarter 2018 earnings release conference call
Management will conduct a conference call to review 2Q 2018 results at 1:00 p.m. Eastern Time (ET) on Tuesday, July 24, 2018. Interested parties may listen to this call by dialing 1-877-312-5857. A rebroadcast of the conference call will be available beginning at 4 pm on Tuesday, July 24, 2018 until Tuesday, August 7, 2018 at 4 pm. by dialing 1-855-859-2056 and using Conference ID #5263058.
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 Delaware Valley. As of June 30, 2018, WSFS Financial Corporation had $7.11 billion in assets on its balance sheet and $19.09 billion in assets under management and administration. WSFS operates from 77 offices located in Delaware (46), Pennsylvania (29), 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 Christiana Trust, Christiana Trust of DE, WSFS Wealth Investments, WSFS Wealth Client Management, Cypress Capital Management, LLC, West Capital Management, Powdermill Financial Solutions, Cash Connect®, WSFS Mortgage and Arrow Land Transfer. Serving the 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 wsfsbank.com.





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Forward-Looking Statement Disclaimer

This press release contains estimates, predictions, opinions, projections and other "forward-looking statements" as that phrase is defined in the Private Securities Litigation Reform Act of 1995. Such statements include, without limitation, references to the Company's 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, those related 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 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 problem loans including litigation and other costs; possible additional loan losses and impairment of the collectability of loans; 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 our loan portfolio; the extensive federal and state regulation, supervision and examination governing almost every aspect of the Company's operations including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations issued in accordance with this statute and potential expenses associated with complying with such regulations; 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; The Company's ability to 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; negative perceptions or publicity with respect to the Company's trust and wealth management business; adverse judgments or other resolution of pending and future legal proceedings, and cost incurred in defending such proceedings; 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 changes in the speed of prepayments of mortgage-backed securities due to changes in the interest rate environment, 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; the effects of any reputation, credit, interest rate, market, operational, legal, liquidity, regulatory and compliance risk resulting from developments related to any of the risks discussed above; and the effects other risks and uncertainties, including those discussed in the Company's Form 10-K for the year ended December 31, 2017 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.




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WSFS Bank Center
500 Delaware Avenue, Wilmington, Delaware 19801
  
14


WSFS FINANCIAL CORPORATION     
FINANCIAL HIGHLIGHTS
SUMMARY STATEMENTS OF INCOME (Unaudited)
 
 
Three months ended
 
Six months ended
(Dollars in thousands, except per share data)
 
June 30, 2018
 
March 31, 2018
 
June 30, 2017
 
June 30, 2018
 
June 30, 2017
Interest income:
Interest and fees on loans
 
$
64,442

 
$
60,465

 
$
56,073

 
$
124,907

 
$
110,754

Interest on mortgage-backed securities
 
6,190

 
5,399

 
4,782

 
11,589

 
9,177

Interest and dividends on investment securities
 
1,108

 
1,120

 
1,136

 
2,228

 
2,385

Other interest income
 
411

 
629

 
343

 
1,040

 
844

 
 
72,151

 
67,613

 
62,334

 
139,764

 
123,160

Interest expense:
 
 
 
 
 
 
 
 
 
 
Interest on deposits
 
6,368

 
5,240

 
3,341

 
11,608

 
6,416

Interest on Federal Home Loan Bank advances
 
2,536

 
2,463

 
1,797

 
4,999

 
3,655

Interest on senior debt
 
1,180

 
1,179

 
2,121

 
2,359

 
4,242

Interest on trust preferred borrowings
 
637

 
557

 
472

 
1,194

 
918

Interest on other borrowings
 
441

 
460

 
289

 
901

 
512

 
 
11,162

 
9,899

 
8,020

 
21,061

 
15,743

Net interest income
 
60,989

 
57,714

 
54,314

 
118,703

 
107,417

Provision for loan losses
 
2,498

 
3,650

 
1,843

 
6,148

 
4,005

Net interest income after provision for loan losses
 
58,491

 
54,064

 
52,471

 
112,555

 
103,412

Noninterest income:
 
 
 
 
 
 
 
 
 
 
Credit/debit card and ATM income
 
10,709

 
9,805

 
8,925

 
20,514

 
17,056

Investment management and fiduciary revenue
 
10,244

 
9,189

 
8,835

 
19,433

 
16,874

Deposit service charges
 
4,664

 
4,630

 
4,560

 
9,294

 
8,957

Mortgage banking activities, net
 
1,599

 
1,737

 
1,844

 
3,336

 
3,029

Loan fee income
 
660

 
599

 
451

 
1,259

 
1,000

Investment securities gains, net
 

 
21

 
708

 
21

 
1,028

Unrealized gains on equity investment
 

 
15,346

 

 
15,346

 

Bank-owned life insurance income
 

 
232

 
302

 
232

 
578

Other income
 
7,111

 
5,908

 
6,051

 
13,019

 
11,246

 
 
34,987

 
47,467

 
31,676

 
82,454

 
59,768

Noninterest expense:
 
 
 
 
 
 
 
 
 
 
Salaries, benefits and other compensation
 
30,944

 
29,853

 
28,223

 
60,797

 
57,059

Occupancy expense
 
5,008

 
5,248

 
4,684

 
10,256

 
9,846

Equipment expense
 
3,176

 
3,089

 
3,498

 
6,265

 
6,622

Professional fees
 
2,320

 
1,725

 
2,669

 
4,045

 
4,304

Data processing and operations expense
 
1,896

 
1,907

 
1,750

 
3,803

 
3,368

Marketing expense
 
1,084

 
758

 
932

 
1,842

 
1,556

FDIC expenses
 
515

 
599

 
594

 
1,114

 
1,123

Loan workout and OREO expense
 
681

 
426

 
499

 
1,107

 
1,020

Corporate development expense
 
457

 

 
366

 
457

 
704

(Recovery of) provision for fraud loss
 

 
(1,665
)
 

 
(1,665
)
 

Other operating expenses
 
11,750

 
11,472

 
9,512

 
23,222

 
18,631

 
 
57,831

 
53,412

 
52,727

 
111,243

 
104,233

Income before taxes
 
35,647

 
48,119

 
31,420

 
83,766

 
58,947

Income tax provision
 
6,907

 
10,769

 
10,850

 
17,676

 
19,440

Net income (loss)
 
$
28,740

 
$
37,350

 
$
20,570

 
$
66,090

 
$
39,507

Diluted earnings (loss) per share of common stock:
 
$
0.89

 
$
1.16

 
$
0.64

 
$
2.05

 
$
1.22

Weighted average shares of common stock outstanding for fully diluted EPS
 
32,263,293

 
32,259,671

 
32,311,571

 
32,225,706

 
32,324,214

See “Notes”




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WSFS Bank Center
500 Delaware Avenue, Wilmington, Delaware 19801
  
15


WSFS FINANCIAL CORPORATION     
FINANCIAL HIGHLIGHTS
SUMMARY STATEMENTS OF INCOME (Unaudited) - continued
 
 
Three months ended
 
Six months ended
 
 
June 30, 2018
 
March 31, 2018
 
June 30, 2017
 
June 30, 2018
 
June 30, 2017
Performance Ratios:
 
 
 
 
 
 
 
 
 
 
Return on average assets (a)
 
1.65
%
 
2.20
%
 
1.23
%
 
1.92
%
 
1.17
%
Return on average equity (a)
 
15.22

 
20.87

 
11.56

 
17.97

 
11.28

Return on average tangible common equity (a)(o)
 
20.61

 
28.59

 
16.12

 
24.46

 
15.86

Net interest margin (a)(b)
 
4.10

 
4.01

 
3.93

 
4.06

 
3.91

Efficiency ratio (c)
 
60.04

 
50.62

 
60.81

 
55.11

 
61.81

Noninterest income as a percentage of total net revenue (b)
 
36.33

 
44.98

 
36.53

 
40.85

 
35.44

See “Notes”





http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12366811&doc=3
  
WSFS Bank Center
500 Delaware Avenue, Wilmington, Delaware 19801
  
16


WSFS FINANCIAL CORPORATION     
FINANCIAL HIGHLIGHTS (Continued)
SUMMARY STATEMENTS OF FINANCIAL CONDITION (Unaudited)
(Dollars in thousands)
 
June 30, 2018
 
March 31, 2018
 
June 30, 2017
Assets:
 
 
 
 
 
 
Cash and due from banks
 
$
111,392

 
$
128,799

 
$
118,555

Cash in non-owned ATMs
 
591,845

 
577,561

 
623,232

Investment securities (d)
 
156,456

 
160,289

 
166,211

Other investments
 
63,637

 
66,329

 
39,356

Mortgage-backed securities (d)
 
964,120

 
907,818

 
814,882

Net loans (e)(f)(l)
 
4,900,727

 
4,821,695

 
4,615,140

Bank owned life insurance
 
5,750

 
5,746

 
102,007

Goodwill and intangibles
 
187,259

 
187,790

 
189,983

Other assets
 
131,361

 
131,904

 
153,061

Total assets
 
$
7,112,547

 
$
6,987,931

 
$
6,822,427

Liabilities and Stockholders’ Equity:
 
 
 
 
 
 
Noninterest-bearing deposits
 
$
1,434,549

 
$
1,372,271

 
$
1,319,749

Interest-bearing deposits
 
3,599,759

 
3,576,746

 
3,332,080

Total customer deposits
 
5,034,308

 
4,949,017

 
4,651,829

Brokered deposits
 
332,247

 
253,498

 
182,221

Total deposits
 
5,366,555

 
5,202,515

 
4,834,050

Federal Home Loan Bank advances
 
630,339

 
587,162

 
823,651

Other borrowings
 
266,011

 
345,035

 
339,103

Other liabilities
 
80,665

 
106,940

 
103,000

Total liabilities
 
6,343,570

 
6,241,652

 
6,099,804

Stockholders’ equity
 
768,977

 
746,279

 
722,623

Total liabilities and stockholders’ equity
 
$
7,112,547

 
$
6,987,931

 
$
6,822,427

Capital Ratios:
 
 
 
 
 
 
Equity to asset ratio
 
10.81
%
 
10.68
%
 
10.59
%
Tangible common equity to tangible asset ratio (o)
 
8.40

 
8.21

 
8.03

Common equity Tier 1 capital (g) (required: 4.5%; well capitalized: 6.5%) (p)
 
11.97

 
11.69

 
11.42

Tier 1 leverage (g) (required: 4.00%; well-capitalized: 5.00%) (p)
 
10.36

 
10.08

 
10.06

Tier 1 risk-based capital (g) (required: 6.00%; well-capitalized: 8.00%) (p)
 
11.97

 
11.69

 
11.42

Total Risk-based capital (g) (required: 8.00%; well-capitalized: 10.00%) (p)
 
12.68

 
12.42

 
12.14

Asset Quality Indicators:
 
 
 
 
 
 
Nonperforming Assets:
 
 
 
 
 
 
Nonaccruing loans
 
$
36,257

 
$
34,060

 
$
38,382

Troubled debt restructuring (accruing)
 
16,273

 
20,248

 
18,109

Assets acquired through foreclosure
 
2,609

 
2,567

 
2,121

Total nonperforming assets
 
$
55,139

 
$
56,875

 
$
58,612

Past due loans (h)
 
499

 
555

 
92

Allowance for loan losses
 
41,037

 
40,810

 
40,005

Ratio of nonperforming assets to total assets
 
0.78
%
 
0.81
%
 
0.86
%
Ratio of nonperforming assets (excluding accruing TDRs) to total assets
 
0.55

 
0.52

 
0.59

Ratio of allowance for loan losses to total gross loans (i)(n)
 
0.84

 
0.84

 
0.87

Ratio of allowance for loan losses to nonaccruing loans
 
113

 
120

 
104

Ratio of quarterly net charge-offs to average gross loans (a)(e)(i)(n)
 
0.19

 
0.29

 
0.15

Ratio of year-to-date net charge-offs to average gross loans (a)(e)(i)(n)
 
0.24

 
0.29

 
0.17





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WSFS Bank Center
500 Delaware Avenue, Wilmington, Delaware 19801
  
17


WSFS FINANCIAL CORPORATION    
FINANCIAL HIGHLIGHTS (Continued) 
AVERAGE BALANCE SHEET (Unaudited)
(Dollars in thousands)
 
Three months ended
 
 
June 30, 2018
 
March 31, 2018
 
June 30, 2017
 
 
Average
Balance
 
Interest &
Dividends
 
Yield/
Rate
(a)(b)
 
Average
Balance
 
Interest &
Dividends
 
Yield/
Rate
(a)(b)
 
Average
Balance
 
Interest &
Dividends
 
Yield/
Rate
(a)(b)
Assets:
Interest-earning assets:
Loans: (e) (j)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate loans
 
$
1,437,117

 
$
19,394

 
5.41
%
 
$
1,440,607

 
$
18,165

 
5.11
%
 
$
1,418,957

 
$
17,725

 
5.01
%
Residential real estate loans
 
239,054

 
3,516

 
5.88

 
247,975

 
3,832

 
6.18

 
274,114

 
3,980

 
5.81

Commercial loans
 
2,574,777

 
33,375

 
5.22

 
2,562,207

 
31,209

 
4.96

 
2,434,437

 
28,455

 
4.72

Consumer loans
 
600,683

 
7,847

 
5.24

 
572,977

 
7,081

 
5.01

 
478,326

 
5,589

 
4.69

Loans held for sale
 
23,680

 
310

 
5.25

 
16,361

 
178

 
4.35

 
32,339

 
324

 
4.01

Total loans
 
4,875,311

 
64,442

 
5.31

 
4,840,127

 
60,465

 
5.07

 
4,638,173

 
56,073

 
4.86

Mortgage-backed securities (d)
 
934,411

 
6,190

 
2.65

 
841,880

 
5,399

 
2.57

 
783,007

 
4,782

 
2.44

Investment securities (d)
 
158,266

 
1,109

 
3.41

 
161,280

 
1,120

 
3.39

 
166,536

 
1,136

 
4.05

Other interest-earning assets
 
26,815

 
416

 
6.22

 
33,251

 
629

 
7.57

 
33,155

 
343

 
4.14

Total interest-earning assets
 
5,994,803

 
72,157

 
4.85
%
 
5,876,538

 
67,613

 
4.69
%
 
5,620,871

 
62,334

 
4.50
%
Allowance for loan losses
 
(41,682
)
 
 
 
 
 
(41,464
)
 
 
 
 
 
(40,546
)
 
 
 
 
Cash and due from banks
 
127,293

 
 
 
 
 
125,402

 
 
 
 
 
127,848

 
 
 
 
Cash in non-owned ATMs
 
531,524

 
 
 
 
 
516,259

 
 
 
 
 
574,348

 
 
 
 
Bank owned life insurance
 
5,724

 
 
 
 
 
87,058

 
 
 
 
 
101,809

 
 
 
 
Other noninterest-earning assets
 
354,392

 
 
 
 
 
336,051

 
 
 
 
 
343,216

 
 
 
 
Total assets
 
$
6,972,054

 
 
 
 
 
$
6,899,844

 
 
 
 
 
$
6,727,546

 
 
 
 
Liabilities and Stockholders’ Equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand
 
$
973,498

 
$
921

 
0.38
%
 
$
995,667

 
$
815

 
0.33
%
 
$
914,915

 
$
453

 
0.20
%
Money market
 
1,390,675

 
1,823

 
0.53

 
1,386,836

 
1,589

 
0.46

 
1,286,977

 
1,061

 
0.33

Savings
 
566,766

 
260

 
0.18

 
553,461

 
253

 
0.19

 
588,610

 
276

 
0.19

Customer time deposits
 
657,332

 
1,990

 
1.21

 
622,544

 
1,686

 
1.10

 
550,373

 
1,060

 
0.77

Total interest-bearing customer deposits
 
3,588,271

 
4,994

 
0.56

 
3,558,508

 
4,343

 
0.49

 
3,340,875

 
2,850

 
0.34

Brokered deposits
 
317,539

 
1,374

 
1.74

 
254,307

 
897

 
1.43

 
211,751

 
491

 
0.93

Total interest-bearing deposits
 
3,905,810

 
6,368

 
0.65

 
3,812,815

 
5,240

 
0.56

 
3,552,626

 
3,341

 
0.38

FHLB of Pittsburgh advances
 
516,411

 
2,536

 
1.97

 
601,044

 
2,463

 
1.66

 
639,147

 
1,797

 
1.13

Trust preferred borrowings
 
67,011

 
637

 
3.81

 
67,011

 
557

 
3.37

 
67,011

 
472

 
2.83

Senior Debt
 
98,247

 
1,180

 
4.80

 
98,193

 
1,179

 
4.80

 
152,231

 
2,121

 
5.57

Other borrowed funds
 
131,776

 
441

 
1.34

 
151,288

 
460

 
1.23

 
127,381

 
289

 
0.91

Total interest-bearing liabilities
 
4,719,255

 
11,162

 
0.95
%
 
4,730,351

 
9,899

 
0.85
%
 
4,538,396

 
8,020

 
0.71
%
Noninterest-bearing demand deposits
 
1,420,988

 
 
 
 
 
1,350,342

 
 
 
 
 
1,404,186

 
 
 
 
Other noninterest-bearing liabilities
 
74,395

 
 
 
 
 
93,437

 
 
 
 
 
71,183

 
 
 
 
Stockholders’ equity
 
757,416

 
 
 
 
 
725,714

 
 
 
 
 
713,781

 
 
 
 
Total liabilities and stockholders’ equity
 
$
6,972,054

 
 
 
 
 
$
6,899,844

 
 
 
 
 
$
6,727,546

 
 
 
 
Excess of interest-earning assets over interest-bearing liabilities
 
$
1,275,548

 
 
 
 
 
$
1,146,187

 
 
 
 
 
$
1,082,475

 
 
 
 
Net interest and dividend income
 
 
 
$
60,995

 
 
 
 
 
$
57,714

 
 
 
 
 
$
54,314

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate spread
 
 
 
 
 
3.90
%
 
 
 
 
 
3.84
%
 
 
 
 
 
3.79
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest margin
 
 
 
 
 
4.10
%
 
 
 
 
 
4.01
%
 
 
 
 
 
3.93
%
See “Notes”




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WSFS Bank Center
500 Delaware Avenue, Wilmington, Delaware 19801
  
18


WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
(Unaudited)
 
(Dollars in thousands, except per share data)
 
Three months ended
 
 
Six months ended
Stock Information:
 
June 30, 2018
 
March 31, 2018
 
June 30, 2017
 
 
June 30, 2018
 
June 30, 2017
Market price of common stock:
 
 
 
 
 
 
 
 
 
 
 
High
 
$56.70
 
$53.00
 
$50.55
 
 
$56.70
 
$50.55
Low
 
46.65
 
45.71
 
42.90
 
 
45.71
 
42.90
Close
 
53.30
 
48.55
 
45.35
 
 
53.30
 
45.35
Book value per share of common stock
 
24.25
 
23.72
 
22.99
 
 
 
 
 
Tangible common book value per share of common stock (o)
 
18.35
 
17.75
 
16.94
 
 
 
 
 
Number of shares of common stock outstanding (000s)
 
31,704
 
31,463
 
31,435
 
 
 
 
 
Other Financial Data:
 
 
 
 
 
 
 
 
 
 
 
One-year repricing gap to total assets (k)
 
(1.11)%
 
(0.86)%
 
(2.66)%
 
 
 
 
 
Weighted average duration of the MBS portfolio
 
5.4 years
 
5.4 years
 
5.0 years
 
 
 
 
 
Unrealized losses on securities available for sale, net of taxes
 
$(24,186)
 
$(19,685)
 
$(4,342)
 
 
 
 
 
Number of Associates (FTEs) (m)
 
1,188
 
1,148
 
1,216
 
 
 
 
 
Number of offices (branches, LPO’s, operations centers, etc.)
 
77
 
77
 
76
 
 
 
 
 
Number of WSFS owned ATMs
 
439
 
441
 
445
 
 
 
 
 
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 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 and reverse mortgages.
(m)
Includes seasonal Associates, when applicable.
(n)
Excludes reverse mortgage loans.
(o)
The Company uses non-GAAP (Generally Accepted Accounting Principles) financial information in its analysis of the Company’s performance. 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 measures to their comparable GAAP measures, see pages 19 and 20 of this press release.
(p)
Calculated for Wilmington Savings Fund Society, FSB.          




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WSFS Bank Center
500 Delaware Avenue, Wilmington, Delaware 19801
  
19


WSFS FINANCIAL CORPORATION    
FINANCIAL HIGHLIGHTS (Continued)
(Dollars in thousands, except per share data)
(Unaudited)
 
Non-GAAP Reconciliation (o):
 
Three months ended
 
Six months ended
 
 
June 30, 2018
 
March 31, 2018
 
June 30, 2017
 
June 30, 2018
 
June 30, 2017
Net interest income (GAAP)
 
$
60,989

 
$
57,714

 
$
54,314

 
$
118,703

 
$
107,417

Core net interest income (non-GAAP)
 
$
60,989

 
$
57,714

 
$
54,314

 
$
118,703

 
$
107,417

Noninterest income (GAAP)
 
$
34,987

 
$
47,467

 
$
31,676

 
$
82,454

 
$
59,768

Less: Securities gains
 

 
21

 
708

 
21

 
1,028

Less: Unrealized gains on equity investment
 

 
15,346

 

 
$
15,346

 
$

Core fee income (non-GAAP)
 
$
34,987

 
$
32,100

 
$
30,968

 
$
67,087

 
$
58,740

Core net revenue (non-GAAP)
 
$
95,976

 
$
89,814

 
$
85,282

 
$
185,790

 
$
166,157

Core net revenue (non-GAAP)(tax-equivalent)
 
$
96,316

 
$
90,158

 
$
86,000

 
$
186,474

 
$
167,607

Noninterest expense (GAAP)
 
$
57,831

 
$
53,412

 
$
52,727

 
$
111,243

 
$
104,233

(Plus)/less: (Recovery of)/provision for fraud loss
 

 
(1,665
)
 

 
(1,665
)
 

Less: Corporate development costs
 
457

 

 
366

 
457

 
704

Core noninterest expense (non-GAAP)
 
$
57,374

 
$
55,077

 
$
52,361

 
$
112,451

 
$
103,529

Core efficiency ratio (c)
 
59.6
%
 
61.1
%
 
60.9
%
 
60.3
%
 
61.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended
 
 
 
 
Calculation of core operating leverage:
 
June 30, 2018
 
March 31, 2018
 
June 30, 2017
 
 
 
 
Core net revenue growth (year over year)
 
13
%
 
11
%
 
20
%
 
 
 
 
Core noninterest expense growth (year over year)
 
10
%
 
8
%
 
19
%
 
 
 
 
Core operating leverage (non-GAAP)
 
3
%
 
3
%
 
1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
End of period
 
 
 
 
 
 
June 30, 2018
 
March 31, 2018
 
June 30, 2017
 
 
 
 
Total assets
 
$
7,112,547

 
$
6,987,931

 
$
6,822,427

 
 
 
 
Less: Goodwill and other intangible assets
 
187,259

 
187,790

 
189,983

 
 
 
 
Total tangible assets
 
$
6,925,288

 
$
6,800,141

 
$
6,632,444

 
 
 
 
Total stockholders’ equity
 
$
768,977

 
$
746,279

 
$
722,623

 
 
 
 
Less: Goodwill and other intangible assets
 
187,259

 
187,790

 
189,983

 
 
 
 
Total tangible common equity (non-GAAP)
 
$
581,718

 
$
558,489

 
$
532,640

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Calculation of tangible common book value per share:
 
 
 
 
 
 
 
 
Book value per share (GAAP)
 
$
24.25

 
$
23.72

 
$
22.99

 
 
 
 
Tangible common book value per share (non-GAAP)
 
18.35

 
17.75

 
16.94

 
 
 
 
Calculation of tangible common equity to tangible assets:
 
 
 
 
 
 
 
 
Equity to asset ratio (GAAP)
 
10.81
%
 
10.68
%
 
10.59
%
 
 
 
 
Tangible common equity to tangible assets ratio (non-GAAP)
 
8.40

 
8.21

 
8.03

 
 
 
 




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WSFS Bank Center
500 Delaware Avenue, Wilmington, Delaware 19801
  
20



 
 
Three months ended
 
Six months ended
 
 
June 30, 2018
 
March 31, 2018
 
June 30, 2017
 
June 30, 2018
 
June 30, 2017
GAAP net (loss) income
 
$
28,740

 
$
37,350

 
$
20,570

 
$
66,090

 
$
39,507

Plus (less): Pre-tax adjustments: Securities gains, unrealized gains, recovery of/provision for fraud loss, and corporate development costs
 
457

 
(17,032
)
 
(342
)
 
(16,575
)
 
(324
)
(Plus)/less: Tax impact of pre-tax adjustments
 
(108
)
 
4,071

 
120

 
3,963

 
128

Non-GAAP net income
 
$
29,089

 
$
24,389

 
$
20,348

 
$
53,478

 
$
39,311

 
 
 
 
 
 
 
 
 
 
 
GAAP return on average assets (ROA)
 
1.65
 %
 
2.20
 %
 
1.23
 %
 
1.92
 %
 
1.17
 %
Plus (less): Pre-tax adjustments: Securities gains, unrealized gains, recovery of/provision for fraud loss, and corporate development costs
 
0.03

 
(1.01
)
 
(0.02
)
 
(0.48
)
 
(0.02
)
(Plus) less: Tax impact of pre-tax adjustments
 
(0.01
)
 
0.24

 
0.01

 
0.12

 
0.01

Core ROA (non-GAAP)
 
1.67
 %
 
1.43
 %
 
1.22
 %
 
1.56
 %
 
1.16
 %