Document
 
 
 
 
 
 
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FORM 8-K/A
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
 
 
 
 
 
 
 
 
May 16, 2019 (March 1, 2019)
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, and Zip Code)
 
 
 
 
 
 
 
 
 
(302) 792-6000
Registrant’s telephone number, including area code:
 
 
 
 
 
 
 
 
 
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 (see General Instruction A.2. below):
 
 
 
 
 
 
 
 
 
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
 
 
 
 
 
 
 
 
 
Securities registered pursuant to Section 12(b) of the Act:
 
 
 
 
 
 
 
 
 
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.01 per share
WSFS
Nasdaq “Global Select Market”
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 40.12b-2).
 
 
 
 
 
 
 
 
 
Emerging growth company ☐
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Explanatory Note

This Amendment No. 1 to Current Report on Form 8-K/A is being filed with the Securities and Exchange Commission solely to amend and supplement Item 9.01 of the Current Report on Form 8-K (the “Original 8-K”) filed by WSFS Financial Corporation (“WSFS”) on March 1, 2019, reporting under Item 2.01 the completion of its previously announced merger (the “Merger”) with Beneficial Bancorp, Inc. (“Beneficial”). Under Item 9.01 of the Original 8-K, WSFS stated that unaudited pro forma financial information would be filed by amendment no later than 71 days following the date that the Original 8-K was required to be filed. No other changes have been made to the Original 8-K.

Item 9.01    Financial Statements and Other Exhibits.

(b) Pro Forma Financial Information.

(i) The unaudited pro forma combined condensed balance sheet of WSFS and Beneficial for the year ended December 31, 2018, unaudited pro forma combined condensed statement of income of WSFS and Beneficial for the year ended December 31, 2018, and the notes related thereto, reflecting the Merger, are attached hereto as Exhibit 99.2 and incorporated herein by reference.

(d) Exhibits.

Number
 
Description
99.2
 






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:
May 16, 2019
By:
 
/s/ Dominic C. Canuso
 
 
 
 
Dominic C. Canuso
Executive Vice President and
Chief Financial Officer



Exhibit
Exhibit 99.2

UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION

The following unaudited pro forma combined condensed financial statements are based on the separate historical financial statements of WSFS Financial Corporation, or WSFS, and Beneficial Bancorp, Inc., or Beneficial, and give effect to the mergers of (i) Beneficial with and into WSFS, with WSFS continuing as the surviving corporation, which we refer to as the merger, and (ii) Beneficial Bank with and into Wilmington Savings Fund Society, FSB, or WSFS Bank, with WSFS Bank continuing as the surviving bank, including pro forma assumptions and adjustments related to the mergers, as described in the accompanying notes to the unaudited pro forma combined condensed financial statements. The unaudited pro forma combined condensed balance sheet as of December 31, 2018 is presented as if the mergers occurred on December 31, 2018. The unaudited pro forma combined condensed statement of income for the twelve months ended December 31, 2018 is presented as if the mergers occurred on January 1, 2018. The historical consolidated financial information has been adjusted on a pro forma basis to reflect factually supportable items that are directly attributable to the mergers and, with respect to the statements of income only, expected to have a continuing impact on consolidated results of operations.

The unaudited pro forma combined condensed financial statements have been prepared using the acquisition method of accounting for business combinations under United States generally accepted accounting principles, or GAAP. WSFS is the acquirer for accounting purposes. Certain reclassifications have been made to the historical financial statements of Beneficial to conform to the presentation in WSFS' financial statements.

The unaudited pro forma combined condensed financial statements are presented for illustrative purposes only. The unaudited pro forma combined condensed financial statements are not necessarily, and should not be assumed to be, an indication of the results that would have been achieved had the mergers been completed as of the dates indicated or that may be achieved in the future. The preparation of the unaudited pro forma combined condensed financial statements and related adjustments required management to make certain assumptions and estimates. The unaudited pro forma combined condensed financial statements should be read together with:

the accompanying notes to the unaudited pro forma combined condensed financial statements;
WSFS’ audited consolidated financial statements and accompanying notes as of and for the year ended December 31, 2018, included in WSFS’ Annual Report on Form 10-K for the year ended December 31, 2018, filed on February 28, 2019;
Beneficial’s audited consolidated financial statements and accompanying notes as of and for the year ended December 31, 2018, included in Beneficial’s Annual Report on Form 10-K for the year ended December 31, 2018, filed on February 26, 2019; and
other information pertaining to WSFS and Beneficial contained in or incorporated by reference into this document.



1

Exhibit 99.2

WSFS FINANCIAL CORPORATION/BENEFICIAL BANCORP, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
AS OF DECEMBER 31, 2018
(In thousands)

 
 
 WSFS
 
 Beneficial
 
 
 
 
 
 Pro Forma
 
 
 
 12/31/2018
(as reported)
 
 12/31/2018
(as reported)
 
 Pro Forma Adjustments
 
 Notes
 
 12/31/2018
Combined
 
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
620,757

 
$
852,475

 
$
(857,901
)
 
(A)
 
$
615,331

 
Investment securities
 
1,355,029

 
710,193

 
(13,174
)
 
(B)
 
2,052,048

 
Loans, net of allowance for loan losses
 
4,863,919

 
3,851,343

 
(114,115
)
 
(C)
 
8,601,147

 
Premises and equipment
 
44,956

 
67,488

 
26,864

 
(D)
 
139,308

 
Goodwill
 
166,007

 
159,671

 
149,815

 
(E)
 
475,493

 
Intangible assets
 
20,016

 
1,330

 
83,723

 
(F)
 
105,069

 
Other assets
 
178,186

 
164,425

 
44,494

 
(G)
 
387,105

 
Total assets
 
$
7,248,870

 
$
5,806,925

 
$
(680,294
)
 
 
 
$
12,375,501

 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 


 
Noninterest-bearing
 
$
1,626,252

 
$
557,535

 
$

 
 
 
$
2,183,787

 
Interest-bearing
 
4,014,179

 
3,615,063

 
4,558

 
(H)
 
7,633,800

 
Total deposits
 
5,640,431

 
4,172,598

 
4,558

 
 
 
9,817,587

 
Borrowed funds
 
699,788

 
515,000

 
(515,000
)
 
(I)
 
699,788

 
Other liabilities
 
87,731

 
69,177

 
(13,778
)
 
(J)
 
143,130

 
Total liabilities
 
6,427,950

 
4,756,775

 
(524,220
)
 
 
 
10,660,505

 
Stockholders’ equity:
 
 
 
 
 
 
 
 
 
 
 
Common stock
 
569

 
(23,762
)
 
23,762

 
(K)
 
569

 
Capital in excess of par value
 
349,810

 
818,886

 
145,653

 
(L)
 
1,314,349

 
Accumulated other comprehensive (loss) income
 
(15,394
)
 
(28,780
)
 
28,780

 
(M)
 
(15,394
)
 
Retained earnings
 
791,031

 
422,875

 
(493,496
)
 
(N)
 
720,410

 
Treasury stock
 
(305,096
)
 
(139,227
)
 
139,227

 
(O)
 
(305,096
)
 
Noncontrolling interest
 

 
158

 

 
 
 
158

 
Total stockholders’ equity
 
820,920

 
1,050,150

 
(156,074
)
 
 
 
1,714,996

 
Total liabilities and stockholders’ equity
 
$
7,248,870

 
$
5,806,925

 
$
(680,294
)
 
 
 
$
12,375,501

 


2

Exhibit 99.2

Balance Sheet Pro Forma Accounting Adjustments Notes as of December 31, 2018
 
 
 
(A)
 Adjustments to cash and cash equivalents:
 
 
 
 
 
To reflect WSFS' estimated transaction costs comprised of merger costs of $56.4 million, which includes investment banker fees and professional fees, and restructuring costs of $48.3 million, which includes severance payments and contract termination costs
 
(104,686
)
 
 
 
To reflect Beneficial's estimated transaction costs comprised of change in control and severance payments of $11.7 million, investment banker fees of $12.0 million and other transaction costs of $1.0 million
 
(24,706
)
 
 
 
 To reflect cash consideration
 
(213,509
)
 
 
 
 Cash to paydown borrowings
 
(515,000
)
 
 
 
 
 
(857,901
)
 
 
 
 
 
 
 
(B)
Adjustments to investment securities:
 
 
 
 
 
To reflect fair value of securities sold immediately after the transaction
 
(11,683
)
 
 
 
To reflect fair value of securities retained in the portfolio
 
(1,491
)
 
 
 
 
 
(13,174
)
 
 
 
 
 
 
 
(C)
Adjustments to loans, net:
 
 
 
 
 
To eliminate Beneficial's allowance for loan and lease losses
 
43,262

 
 
 
To reflect estimated fair value of loan portfolio comprised of a credit mark of $71.8 million and an interest rate mark of $89.5 million
 
(161,343
)
 
 
 
To eliminate Beneficial's deferred loan and lease fees, ASC 310-20 fees and acquired loans net purchase discount
 
3,966

 
 
 
 
 
(114,115
)
 
 
 
 
 
 
 
(D)
Adjustments to bank premises and equipment, net:
 
 
 
 
 
To record capitalized assets from transaction costs
 
24,447

 
 
 
To record fair value adjustment of bank premises, furniture and equipment
 
2,417

 
 
 
 
 
26,864

 
 
 
 
 
 
 
(E)
Adjustments to goodwill:
 
 
 
 
 
To eliminate Beneficial's historical goodwill
 
(159,671
)
 
 
 
To reflect goodwill for amount of consideration paid in excess of fair value of assets received and liabilities assumed
 
309,486

 
 
 
 
 
149,815

 
 
 
 
 
 
 
(F)
Adjustments to intangible assets, net:
 
 
 
 
 
To eliminate Beneficial's intangible assets
 
(1,330
)
 
 
 
To record fair value estimate of intangible assets specifically identified core deposit intangibles (CDI)
 
85,053

 
 
 
 
 
83,723

 


3

Exhibit 99.2

(G)
Adjustments to other assets:
 
 
 
 
 
To reflect WSFS' current tax recoverable from estimated transaction costs which is comprised of estimated non-facilitative transaction costs and a deductible success-based investment banker fee using the 70% safe harbor election multiplied by a tax rate of 27.7%
 
28,476

 
 
 
To reflect Beneficial's current tax recoverable from estimated transaction costs which is comprised of estimated non-facilitative transaction costs and a deductible success-based investment banker fee using the 70% safe harbor election multiplied by a tax rate of 27.7%
 
5,846

 
 
 
To reflect fair market adjustment on deferred tax accounts
 
(2,413
)
 
 
 
Other asset adjustments
 
12,585

 
 
 
 
 
44,494

 
 
 
 
 
 
 
(H)
Adjustments to interest-bearing deposits:
 
 
 
 
 
To eliminate Beneficial's deferred broker commission on time deposits and time deposit mark
 
403

 
 
 
To reflect estimated fair value of Beneficial's deposits
 
4,155

 
 
 
 
 
4,558

 
 
 
 
 
 
 
(I)
Adjustment to borrowed funds:
 
 
 
 
 
Expected paydown of borrowings
 
(515,000
)
 
 
 
 
 
 
 
(J)
Adjustment to other liabilities:
 
 
 
 
 
Other liability adjustments
 
(13,778
)
 
 
 
 
 
 
 
(K)
Adjustments to common stock:
 
 
 
 
 
To eliminate Beneficial's common stock
 
(848
)
 
 
 
To reflect the liquidation of the remaining unallocated shares (at par value) in the Beneficial KSOP
 
24,610

 
 
 
 
 
23,762

 
 
 
 
 
 
 
(L)
Adjustments to capital in excess of par value:
 
 
 
 
 
To eliminate Beneficial's additional paid in capital (less noncontrolling interest)
 
(819,044
)
 
 
 
To reflect issuance of shares of WSFS common stock in the merger
 
949,968

 
 
 
To reflect payment of the stock option awards that fully vest upon closing of the merger
 
14,729

 
 
 
 
 
145,653

 
 
 
 
 
 
 
(M)
Adjustment to accumulated other comprehensive (loss) income:
 
 
 
 
 
To eliminate Beneficial's accumulated other comprehensive income
 
28,780

 
 
 
 
 
 
 
(N)
Adjustments to retained earnings:
 
 
 
 
 
To eliminate Beneficial's retained earnings
 
(422,875
)
 
 
 
To reflect WSFS' estimated transaction costs, net of tax
 
(51,762
)
 
 
 
To reflect Beneficial's estimated transaction costs, net of tax
 
(18,859
)
 
 
 
 
 
(493,496
)
 
 
 
 
 
 
 
(O)
Adjustment to treasury stock:
 
 
 
 
 
To eliminate Beneficial's treasury stock
 
139,227

 





4

Exhibit 99.2

On March 1, 2019, WSFS closed its acquisition of Beneficial and acquired 100% of the outstanding common stock of Beneficial. In accordance with the terms of the merger agreement, dated August 7, 2018, as amended on November 1, 2018, by and between WSFS and Beneficial, each share of Beneficial common stock was exchanged for 0.3013 shares of WSFS common stock (with cash paid in lieu of fractional shares) and $2.93 in cash. Based on the number of shares outstanding as of February 28, 2019 and the closing price per share of $43.28 on that date, the value of the stock consideration was $950.0 million and cash consideration was $228.2 million, for total transaction value of $1.2 billion.
Preliminary purchase price allocation (in thousands, except per share data)

 
Pro forma stock consideration:
 
 
 
 
Shares of Beneficial common stock outstanding of 72,848,815 as of February 28, 2019 (1) at exchange ratio of 0.3013
 
21,949

 
 
Price per share, based upon WSFS' closing price as of February 28, 2019
 
$
43.28

 
 
Total pro forma stock consideration
 
$
949,968

 
Pro forma cash consideration (including cash paid in lieu of fractional shares of $53):
 
213,510

 
Total consideration to holders of Beneficial common stock
 
1,163,478

 
 
Economic value of Beneficial options (1,433,340 at average strike price of $10.04 including payroll taxes incurred of $339).
 
14,729

 
Total pro forma purchase price
 
$
1,178,207

 
(1)
Shares of Beneficial common stock outstanding as of February 28, 2019 do not include 1,838,493 of Beneficial KSOP shares that were used to paydown the debt and unallocated shares on February 27, 2019.



The total purchase price as shown in the tables above is allocated to Beneficial’s tangible and intangible assets and liabilities as of December 31, 2018 based on their preliminary estimated fair values as follows:
Assets of acquired bank (Beneficial):
 
 
 
 
Cash and cash equivalents
 
$
852,475

 
 
 Investment securities
 
697,019

 
 
 Loans, net
 
3,737,228

 
 
 Premises, furniture and equipment
 
69,905

 
 
 Intangible assets
 
85,053

 
 
 Other assets
 
174,596

 
Total assets acquired
 
5,616,276

 
 
 
 
 
 
Liabilities of acquired bank (Beneficial):
 
 
 
 
 Deposits
 
4,177,156

 
 
 Other borrowed funds
 
515,000

 
 
 Other liabilities
 
55,399

 
Total liabilities assumed
 
4,747,555

 
Net assets acquired
 
868,721

 
Preliminary pro forma goodwill
 
$
309,486

 


5

Exhibit 99.2

WSFS FINANCIAL CORPORATION/BENEFICIAL BANCORP, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2018
(In thousands, except per share information)

 
 
 WSFS
 
 Beneficial
 
 
 
 
 
 Pro Forma
 
 
 12/31/2018
(as reported)
 
 12/31/2018
(as reported)
 
 Pro Forma Adjustments
 
 Notes
 
 12/31/2018
Combined
(Dollars in thousands, except per share and share data)
 
  
 
  
 
  
 
 
 
  
Interest income:
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
 
$
260,506

 
$
179,821

 
$
33,289

 
 (A)
 
$
473,616

Interest on investment securities
 
30,443

 
31,957

 
(50
)
 
 (B)
 
62,350

Other interest income
 
2,024

 

 

 
 
 
2,024

Total interest income
 
292,973

 
211,778

 
33,239

 
 
 
537,990

Interest expense:
 
 
 
 
 
 
 
 
 
 
Interest on deposits
 
29,068

 
22,395

 
(1,451
)
 
 (C)
 
50,012

Interest on borrowed funds
 
17,431

 
9,019

 

 
 
 
26,450

Total interest expense
 
46,499

 
31,414

 
(1,451
)
 
 
 
76,462

Net interest income
 
246,474

 
180,364

 
34,690

 
 
 
461,528

Provision for loan losses
 
13,170

 
4,581

 

 
 
 
17,751

Net interest income after provision for loan losses
 
233,304

 
175,783

 
34,690

 
 
 
443,777

 
 
 
 
 
 
 
 
 
 
 
Noninterest income:
 
 
 
 
 
 
 
 
 
 
Credit/debit card and ATM income
 
43,837

 
9,475

 

 
 
 
53,312

Investment management and fiduciary income
 
39,602

 
4,681

 

 
 
 
44,283

Deposit service charges
 
18,771

 
9,732

 

 
 
 
28,503

Unrealized gains on equity investments
 
20,745

 

 

 
 
 
20,745

Net gain on sale of insurance agency
 

 
3,297

 

 
 
 
3,297

Other income
 
39,586

 
1,685

 

 
 
 
41,271

Total noninterest income
 
162,541

 
28,870

 

 
 
 
191,411

Noninterest expense:
 
 
 
 
 
 
 
 
 
 
Salaries, benefits and other compensation
 
122,983

 
78,253

 

 
 
 
201,236

Occupancy expense
 
19,783

 
10,580

 
487

 
 (D)
 
30,850

Merger and restructuring charges
 

 
3,109

 

 
 
 
3,109

Other operating expense
 
82,281

 
49,320

 
7,809

 
 (E)
 
139,410

Total noninterest expense
 
225,047

 
141,262

 
8,296

 
 
 
374,605

Income before taxes
 
170,798

 
63,391

 
26,394

 
 
 
260,583

Income tax provision
 
36,055

 
16,156

 
7,460

 
 (F)
 
59,671

Net income
 
134,743

 
47,235

 
18,934

 
 
 
200,912

Less: Net loss attributable to noncontrolling interest
 

 
(609
)
 

 
 
 
(609
)
Net income attributable to WSFS
 
$
134,743

 
$
47,844

 
$
18,934

 
 
 
$
201,521

 
 
 
 
 
 
 
 
 
 
 
Basic earnings per share
 
$
4.27

 
 
 
 
 
 
 
$
3.75

Diluted earnings per share
 
$
4.19

 
 
 
 
 
 
 
$
3.71

Weighted-average shares outstanding for basic EPS
 
31,570

 
 
 
21,948

 
 (G)
 
53,518

Adjusted weighted-average shares outstanding for diluted EPS
 
32,167

 
 
 
21,948

 
 (G)
 
54,115



6

Exhibit 99.2

Income Statement Pro Forma Accounting Adjustments Notes for the Twelve Months Ended December 31, 2018
 
(A)
Adjustments to interest and fees on loans:
 
 
 
 
 
To eliminate Beneficial's accretion on acquired loans and interest income recognized on estimated purchased credit impaired loans
 
(2,565
)
 
 
 
To reflect the interest income for accretion on purchase performing acquired loans based on estimated fair market value adjustment
 
35,854

 
 
 
 
 
33,289

 
 
 
 
 
 
 
(B)
Adjustment to interest on investment securities:
 
 
 
 
 
To reflect amortization of the fair value mark on the retained investments
 
(50
)
 
 
 
 
 
 
 
(C)
Adjustment to interest on deposits:
 
 
 
 
 
To reflect amortization of the net premium based on estimated fair market value adjustment
 
(1,451
)
 
 
 
 
 
 
 
(D)
Adjustment to occupancy expense:
 
 
 
 
 
To reflect depreciation on the fixed asset fair value mark based on a 10 year useful life
 
487

 
 
 
 
 
 
 
(E)
Adjustments to other operating expense:
 
 
 
 
 
To eliminate Beneficial's amortization of intangibles
 
(696
)
 
 
 
To reflect estimated amortization of core deposit intangible based on 10 year useful life
 
8,505

 
 
 
 
 
7,809

 
 
 
 
 
 
 
(F)
Adjustments to income tax provision:
 
 
 
 
 
To reflect the tax adjustment related to pro forma adjustments calculated at a 27.7% rate
 
7,460

 
 
 
 
 
 
 
(G)
Adjustments to weighted average shares outstanding:
 
 
 
 
 
To reflect the increase in the weighted average shares in connection with the issuance of shares of WSFS common stock in the merger (comprised of 72.8 million shares of Beneficial at a conversion rate of 0.3013)
 
21,947,841

 


7