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Press Release

Oct 22, 2020

WSFS Reports 3Q 2020 EPS of $1.01 and ROA of 1.49%; Solid Operating Performance Reflects Diversified Business Model; Strong Capital and ACL Levels; Share Repurchases to Resume in 4Q 2020

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FOR ADDITIONAL FINANCIAL INFORMATION AND OUTLOOK, PLEASE REFER TO THE 3Q 2020 EARNINGS RELEASE SUPPLEMENT AVAILABLE IN THE INVESTOR RELATIONS SECTION OF WSFS' WEBSITE (www.wsfsbank.com).

WILMINGTON, Del., Oct. 22, 2020 (GLOBE NEWSWIRE) -- WSFS Financial Corporation (Nasdaq: WSFS), the parent company of WSFS Bank, today announced its financial results for the third quarter of 2020.

Selected financial results and metrics are as follows:

                       
(Dollars in millions, except per share data) 3Q 2020   2Q 2020   3Q 2019
Net interest income $ 113.0     $ 113.8     $ 120.8  
Fee income 49.2     64.4     62.3  
Total net revenue 162.2     178.1     183.2  
Provision for credit losses 2.7     94.8     4.1  
Noninterest expense 93.5     93.4     109.6  
Net income (loss) attributable to WSFS 51.1     (7.1   53.9  
Pre-provision net revenue (PPNR)(1) 68.7     84.7     73.6  
Earnings (loss) per share (diluted) 1.01     (0.14   1.02  
Return on average assets (ROA) 1.49 %   (0.22 )%   1.72 %
Return on average equity (ROE) 11.1     (1.6   11.6  
Efficiency ratio 57.6     52.4     59.7  

GAAP results for 3Q 2020 included the following items, with a significant decline in realized gain on sale related to our Visa Class B shares compared to 2Q 2020 when we recorded a $22.1 million net realized gain on the sale of 360,000 shares.

                                               
  3Q 2020   2Q 2020   3Q 2019
(Dollars in millions, except per share data) Total
(pre-tax)
  Per share
(after-tax)
  Total
(pre-tax)
  Per share
(after-tax)
  Total
(pre-tax)
  Per share
(after-tax)
Securities gains $ 3.3     $ 0.05     $ 1.9     $ 0.03     $     $  
Unrealized gain on equity investments, net 0.1                 21.3     0.31  
Realized gain on sale of equity investment, net         22.1     0.35          
Corporate development and restructuring expense 0.4     0.01     2.8     0.04     18.9     0.27  
Realized loss on termination of FHLB advances 2.3     0.03                  

(1) As used in this press release, PPNR is a non-GAAP financial measure calculated as net revenue before provision for credit losses and net of noninterest expense. For a reconciliation of this and other non-GAAP financial measures to their comparable GAAP measures, see "Non-GAAP Reconciliation" at the end of the press release.

CEO Commentary

Rodger Levenson, Chairman, President and CEO, said, “Our solid 3Q results including core ROA(2) of 1.48% and core pre-provision net revenue (PPNR)(2) of $68.0 million, or 1.98% of average assets, reflected the strength of our diversified business model while the economy gradually recovers. The quarter was also highlighted by a significant reduction in short-term loan modifications, modest credit costs, a robust ACL coverage ratio of 2.74% excluding PPP loans and a strong Bank Common Equity Tier 1 Ratio of 13.24% at September 30th. Further, our Board approved the resumption of share repurchases in the fourth quarter based on our healthy balance sheet and capital positions, strong PPNR, and stabilizing expectations on the economic and credit environment.

“The health, well-being, and safety of our Associates, Customers, and our communities remains our top priority. During the quarter, we were pleased to reopen all previously closed banking locations with appropriate precautions and I would like to extend a special thanks to all of our Associates who continue to serve our Customers during this challenging period of time. In addition, we continue to make significant investments throughout the franchise which positions us to accelerate our significant organic growth opportunity.

“Our Associates remain steadfastly committed to deliver on our Strategy of ‘Engaged Associates, living our culture, making a better life for all we serve.’ During the quarter, we were honored to receive several recognitions demonstrating the success of our Strategy across our footprint, including: Top Workplace in Delaware for the 15th year in a row, and the second consecutive year in the #1 spot; Top Workplace in Philadelphia and southeastern PA for the sixth year in a row, and; we were also named to the ‘Soaring 76’ for the fourth year in a row by the Philadelphia Business Journal, recognizing us as one of the fastest growing companies in the greater Philadelphia region.”

(2) As used in this press release, core ROA and core PPNR are non-GAAP financial measures. Core PPNR is calculated as core net revenue before provision for credit losses and net of core noninterest expense, and core ROA is calculated as GAAP ROA less certain pre-tax adjustments and the tax impact of such adjustments. For a reconciliation of these and other non-GAAP financial measures to their comparable GAAP measures, see "Non-GAAP Reconciliation" at the end of the press release.

Notable Items in the Quarter (all excluded from core results):

  • WSFS realized $3.3 million (pre-tax), or approximately $0.05 per share (after-tax), in net gains on sales of securities compared to no amounts realized in 3Q 2019.
     
  • WSFS recorded net unrealized gains on our equity investments of $0.1 million (pre-tax) related to our investment in Visa Class B shares, compared with $22.1 million, or approximately $0.35 per share, in realized gains from the sale of 360,000 Visa Class B shares in 2Q 2020. Since our adoption of ASU 2016-01 in 1Q 2018, cumulative realized and unrealized gains on Visa Class B shares total $78.1 million on a total portfolio investment of $17.7 million.
     
  • WSFS recorded $0.4 million (pre-tax), or approximately $0.01 per share (after-tax), of corporate development expenses related to our acquisition of Beneficial Bancorp, Inc. (Beneficial), compared with $18.9 million (pre-tax), or approximately $0.27 per share (after-tax), of corporate development and restructuring expenses in 3Q 2019. The merger-to-date amounts are less than our original expectations.
     
  • WSFS recorded $2.3 million (pre-tax), or approximately $0.03 per share (after-tax), of loss associated with prepayment fees from the termination of fixed rate FHLB term advances as part of routine balance sheet and liquidity management. The termination of these fixed rate term advances is expected to be accretive to net interest income in future periods.

Highlights for 3Q 2020:

  • Core ROA was 1.48% in 3Q 2020 compared to 1.66% for 3Q 2019.
     
  • Core EPS(3) was $1.00 in 3Q 2020 compared to $0.98 for 3Q 2019.
     
  • Core PPNR was $68.0 million, or 1.98% of average assets, an increase of $4.4 million, or 7%, from 2Q 2020 and a decrease of $3.2 million, or 4%, from 3Q 2019. Excluding the impact of PPP, core PPNR was $62.0 million in 3Q 2020, or 1.94%, compared to $60.5 million, or 1.98%, in 2Q 2020 and $71.2 million, or 2.27% in 3Q 2019.
     
  • Core fee income (noninterest income)(3) was $45.7 million, an increase of $5.3 million, or 13%, compared to 2Q 2020, and an increase of $4.7 million, or 12%, compared to 3Q 2019. The increase compared to 2Q 2020 reflected growth across most of our fee business reflecting the diversity of our business model despite the adverse impact of the Durbin Amendment on debit fees.
     
  • Loans, excluding the allowance for credit losses, PPP, and non-relationship run-off portfolios increased $95.6 million, or 1% (not annualized) compared to the prior quarter and $254.0 million, or 4%, from 3Q 2019.
     
  • Customer core deposits increased $369.0 million, or 4% (not annualized) compared to the prior quarter and $2.0 billion, or 25%, from 3Q 2019 primarily due to continued elevated customer liquidity related to the current economic environment.
     
  • Loans receiving short-term deferred payment modifications declined to less than 3% of the total loan portfolio, excluding PPP loans, and our allowance for credit losses coverage ratio was 2.74%, excluding PPP loans, as of September 30, 2020.
     
  • WSFS maintained significant capital levels with a Bank Common Equity Tier 1 Ratio of 13.24%.
     
  • The Board approved a quarterly cash dividend of $0.12 per share of common stock consistent with the prior quarter. Additionally, the Board approved the resumption of share repurchases under the Board authorization approved in 1Q 2020 that allows for the purchase of 15% of outstanding shares.

(3) As used in this press release, core EPS and core fee income (noninterest income) are non-GAAP financial measures. These non-GAAP financial measures exclude securities gains, realized/unrealized gains on equity investments, corporate development and restructuring expense, and the contribution to the WSFS Community Fund. For a reconciliation of these and other non-GAAP financial measures to their comparable GAAP measures, see "Non-GAAP Reconciliation" at the end of the press release.

Third Quarter 2020 Discussion of Financial Results

Balance Sheet

The following tables summarize loan and customer funding balances and composition at September 30, 2020 compared to June 30, 2020 and September 30, 2019:

                                         
Loans                      
(Dollars in thousands) September 30, 2020   June 30, 2020   September 30, 2019
Commercial & industrial $ 3,299,704     36 %   $ 3,354,007     36 %   $ 3,389,121     40 %
Commercial real estate (CRE) 2,167,508     23     2,165,547     24     2,262,647     27  
PPP 954,179     10     945,136     10          
Construction 666,317     7     638,504     7     512,163     6  
Commercial small business leases 227,539     3     213,133     2     171,000     2  
Total commercial loans 7,315,247     79     7,316,327     79     6,334,931     75  
Residential mortgage 1,003,373     11     1,012,235     11     1,117,028     13  
Consumer 1,168,891     13     1,133,371     13     1,143,852     13  
Allowance for credit losses (232,726 )   (3 )   (232,192 )   (3 )   (47,671 )   (1 )
Net loans $ 9,254,785     100 %   $ 9,229,741     100 %   $ 8,548,140     100 %
                       

 

                                         
Customer Funding                      
(Dollars in thousands) September 30, 2020   June 30, 2020   September 30, 2019
Noninterest demand $ 3,196,967     29 %   $ 3,188,046     30 %   $ 2,268,615     25 %
Interest-bearing demand 2,521,030     23     2,302,484     21     2,177,189     23  
Savings 1,717,952     15     1,731,875     16     1,562,591     17  
Money market 2,488,794     22     2,333,326     22     1,952,306     21  
Total core deposits 9,924,743     89     9,555,731     89     7,960,701     86  
Customer time deposits 1,223,843     11     1,228,440     11     1,330,227     14  
Total customer deposits $ 11,148,586     100 %   $ 10,784,171     100 %   $ 9,290,928     100 %
                       

At September 30, 2020, WSFS’ net loan portfolio increased $25.0 million when compared with June 30, 2020 and $706.6 million when compared with September 30, 2019, primarily due to $954.2 million of PPP loans as of September 30, 2020. The year-over-year PPP loan increase was partially offset by a $316.4 million decline in non-relationship run-off portfolios and a $185.1 million increase in the allowance for credit losses year-over-year. Excluding PPP loans, run-off portfolios, and the allowance for credit losses, loans increased $95.6 million, or 1% (not annualized) during the quarter and increased $254.0 million, or 4%, year-over-year, including growth across construction, commercial small business leases, and home equity installment loans originated through our partnership with Spring EQ.

Total customer funding was $11.1 billion at September 30, 2020, a $364.4 million increase from June 30, 2020 and a $1.9 billion increase from September 30, 2019, reflecting elevated deposits from customers who received PPP loans, the impact of government stimulus checks, and lower customer spending during the COVID-19 pandemic. Core deposits were $9.9 billion at September 30, 2020, an increase of $369.0 million over the prior quarter due primarily to $220.4 million of seasonally higher public funding deposits and were a strong 89% of total customer deposits. No- and low-cost checking deposit accounts represented a robust 51% of total customer deposits at September 30, 2020. These core deposits predominantly represent longer-term, less price-sensitive customer relationships. The ratio of loans to customer deposits was 83% at September 30, 2020 reflecting significant liquidity capacity.

Net Interest Income

                       
  Three Months Ending
(Dollars in thousands) September 30, 2020   June 30, 2020   September 30, 2019
Net interest income before purchase accretion and PPP $ 95,618     $ 96,400     $ 106,852  
Purchase accounting accretion 11,057     12,520     13,981  
Net interest income before PPP 106,675     108,920     120,833  
PPP 6,373     4,836      
Net interest income $ 113,048     $ 113,756     $ 120,833  
           
Net interest margin before purchase accretion and PPP 3.35 %   3.58 %   3.87 %
Purchase accounting accretion 0.39     0.43     0.51  
Net interest margin before PPP 3.74     4.01     4.38  
PPP (excluding income and interest-earning assets) (0.08 )   (0.08 )    
Net interest margin 3.66 %   3.93 %   4.38 %

Net interest income decreased $7.8 million, or 6%, compared to 3Q 2019, primarily due to the lower rate environment and a $2.9 million decrease in purchase accounting accretion, partially offset by $6.4 million of PPP income which included $4.1 million of fee accretion. Net interest margin decreased 72 bps from 3Q 2019 due to a 44 bps net decline from the lower rate environment and balance sheet mix, 12 bps from lower purchase accounting accretion, 8 bps from the significant short-term liquidity increase in customer deposits and 8 bps from PPP.

Net interest income decreased $0.7 million, or 1% (not annualized), from 2Q 2020 primarily due to a $1.5 million decrease in purchase accounting accretion and the lower rate environment, partially offset by increased PPP income and favorable deposit betas. Net interest margin decreased 27 bps primarily due to the lower rate environment, lower purchase accounting accretion, and asset mix change resulting from the significant short-term liquidity increase in customer deposits.

Credit Quality

Credit quality metrics at September 30, 2020 reflected the impact of the COVID-19 pandemic and stabilized from 2Q 2020. Total problem assets increased to $769.7 million from $568.5 million as of June 30, 2020 as a result of our continued portfolio review process that began in 2Q 2020 and included risk rating migration of $108.1 million in the CRE and other real estate leasing sectors with the remaining increase spread across multiple sectors. Total problem assets includes all criticized, classified, and nonperforming loans as well as other real estate owned (OREO).

Delinquencies increased to $76.8 million at September 30, 2020 with approximately $20.0 million identified as administrative in nature and primarily related to exiting deferral status. Excluding these elevated administrative delinquencies that are expected to return to current status during the fourth quarter, delinquency levels were consistent relative to our most recent four quarter average. Nonperforming assets decreased slightly to $44.5 million as of September 30, 2020, and net charge-offs for 3Q 2020 were a low $2.2 million, or 0.09% (annualized), of average gross loans.

Customer loans receiving deferred payment modifications as of September 30, 2020 decreased to $278.7 million or less than 3% of the loan portfolio excluding PPP with further improvement after September 30, 2020 as described in the supplement to this earnings release.

Total credit costs declined to $4.1 million in the quarter compared to $99.3 million in 2Q 2020 and the ACL was nearly flat at $232.7 million as economic forecasts were largely consistent with the prior quarter and modest increases in the allowance for credit losses due to loan growth, offset by net charge-offs.

The following table summarizes credit quality metrics as of and for the period ended September 30, 2020 compared to June 30, 2020 and September 30, 2019.

                       
(Dollars in millions) September 30, 2020   June 30, 2020   September 30, 2019
Problem assets $ 769.7     $ 568.5     $ 222.7  
Nonperforming assets 44.5     44.9     56.2  
Delinquencies 76.8     48.4     66.6  
Net charge-offs 2.2     1.6     1.8  
Total credit costs (r) 4.1     99.3     5.0  
Problem assets to total Tier 1 capital plus ACL 48.78 %   37.30 %   16.29 %
Classified assets to total Tier 1 capital plus ACL 32.34     25.52     13.79  
Ratio of nonperforming assets to total assets 0.32     0.33     0.46  
Ratio of nonperforming assets (excluding accruing TDRs) to total assets 0.21     0.22     0.34  
Delinquencies to gross loans 0.82     0.51     0.78  
Ratio of quarterly net charge-offs to average gross loans 0.09     0.07     0.09  
Ratio of allowance for credit losses to total loans and leases (q) 2.47     2.45     0.56  
Ratio of allowance for credit losses to nonaccruing loans 901     887     124  

Core Fee Income

Core fee income (noninterest income) was $45.7 million, an increase of $4.7 million, or 12%, compared to 3Q 2019, primarily due to an $8.4 million increase from our mortgage banking business due to improved secondary market conditions and increased volume from refinancings resulting from the lower interest rate environment. In addition, trust services revenue increased $2.6 million year-over-year. Partially offsetting these increases was a $2.9 million decrease in Cash Connect® due to the significant decline in interest rates compared to last year and fully offset by lower funding costs, and a $3.2 million decrease in interchange fees resulting from the Durbin Amendment effective at the beginning of 3Q 2020.

Core fee income increased $5.3 million, or 13%, compared to 2Q 2020, due to a $3.0 million increase from our mortgage banking business, a $2.4 million increase in our trust and wealth businesses and a $1.1 million increase in Cash Connect®. These increases reflect the diversity of our business model and were partially offset by a $1.2 million decline in traditional banking, including a $3.2 million decrease in interchange fees resulting from the Durbin Amendment offset by a $2.0 million increase in non-interchange related core banking fees.

For 3Q 2020, core fee income was 28.8% of core net revenue, compared to 25.3% for 3Q 2019, and was diversified among various sources, including traditional banking, mortgage banking, trust and wealth management and cash logistics services (Cash Connect®). The year-over-year percentage increase includes the impact of lower net interest income due to the lower rate environment offset by the adverse impacts of the Durbin Amendment.

Core Noninterest Expenses(4)

Core noninterest expense of $90.8 million for 3Q 2020 increased slightly compared to $90.7 million in 3Q 2019 and $90.6 million in 2Q 2020. The year-over-year change reflects favorable economies of scale from our combination with Beneficial, and integration cost synergies offset by overall franchise growth, higher professional fees, which can be uneven, and higher loan workout and other credit costs resulting from the economic environment driven by the health pandemic.

When compared to 2Q 2020, core noninterest expenses increased $0.2 million primarily due to higher costs within our core banking, Wealth Management and Cash Connect® businesses primarily related to increased volume and were more than offset by higher fee income. Additionally, 2Q 2020 included $2.6 million of higher unfunded commitment reserve expense, which is recorded under loan workout and other credit costs, and a $1.2 million insurance recovery.

Our core efficiency ratio(4) was 57.1% in 3Q 2020, compared to 58.7% in 2Q 2020 and 55.9% in 3Q 2019 and includes the impact of lower net interest income due to the lower rate environment.

Income Taxes

We recorded a $15.1 million income tax provision in 3Q 2020, compared to a benefit of $2.2 million in 2Q 2020 and a provision of $15.9 million in 3Q 2019.

The effective tax rate was 23.0% in 3Q 2020, 22.3% in 2Q 2020, and 22.9% in 3Q 2019.

(4) As used in this press release, core noninterest expense and core efficiency ratio are non-GAAP financial measures. These non-GAAP financial measures exclude corporate development and restructuring expense and the contribution to the WSFS Community Fund. For a reconciliation of these and other non-GAAP financial measures to their comparable GAAP measures, see "Non-GAAP Reconciliation" at the end of the press release

Capital Management

WSFS’ total stockholders’ equity increased $39.8 million, or 2% (not annualized), during 3Q 2020, primarily due to quarterly earnings offset by market-value changes on available-for-sale securities and the dividend on common stock paid during the quarter.

WSFS’ tangible common equity(5) increased $42.5 million, or 3% (not annualized) compared to June 30, 2020 for the reasons described above. WSFS’ common equity to assets ratio was 13.47% at September 30, 2020, and our tangible common equity to tangible assets ratio(5) increased by 13 bps during the quarter to 9.82%.

At September 30, 2020, book value per share was $36.77, an increase of $0.77, or 2%, from June 30, 2020, and tangible common book value per share(5) was $25.73, an increase of $0.84, or 3%, from June 30, 2020.

At September 30, 2020, WSFS Bank’s Tier 1 leverage ratio of 10.31%, Common Equity Tier 1 capital ratio and Tier 1 capital ratio of 13.24%, and Total Capital ratio of 14.50% were all substantially in excess of the “well-capitalized” regulatory benchmarks.

The Board of Directors approved a quarterly cash dividend of $0.12 per share of common stock. This dividend will be paid on November 19, 2020 to stockholders of record as of November 5, 2020.

WSFS also intends to resume share repurchases during 4Q 2020 under the share repurchase authorization of approximately 15% of outstanding shares approved by the Board in 1Q 2020.

(5) As used in this release, tangible common equity, tangible common equity to tangible assets and tangible common book value per share are non-GAAP financial measures. These non-GAAP financial measures exclude goodwill and intangible assets and the related tax-effected amortization. For a reconciliation of these and other non-GAAP financial measures to their comparable GAAP measures, see "Non-GAAP Reconciliation" at the end of the press release.

Selected Business Segments (included in previous results):

Wealth Management

The Wealth Management segment provides a broad array of planning and advisory services, investment management, trust services, and credit and deposit products to individual, corporate, and institutional clients through multiple integrated businesses. Combined, these businesses had $23.1 billion in assets under management (AUM) and assets under administration (AUA) as of September 30, 2020

Wealth Management reported pre-tax income of $6.0 million in 3Q 2020 compared to $7.6 million in 3Q 2019, and $3.9 million in 2Q 2020. PPNR was $7.4 million in 3Q 2020 compared to $7.7 million in 3Q 2019 and $4.9 million in 2Q 2020. 3Q 2019 included $1.7 million of net interest income from a $2.0 billion noninterest bearing, capital markets-related trust deposit held for 15 days.

Fee-generating businesses performed very well in the quarter, and overall results were negatively impacted by the lower interest rate environment when compared to the prior year. Provision expense was $1.4 million in 3Q 2020, compared to $0.2 million in 3Q 2019 and $0.9 million to 2Q 2020.

Total Wealth Management revenue (net interest income and fee income) was $17.5 million for 3Q 2020, an increase of $0.6 million, or 4% (non-annualized), compared to 3Q 2019. The increase was due to higher advisory fees resulting from improved asset market values as well as strong activity in our trust business.

Asset based revenue was $3.3 million in 3Q 2020 compared to $3.2 million in 3Q 2019, and $3.0 million in 2Q 2020. Net interest income was $3.5 million in 3Q 2020, a decrease of $2.2 million, or 39% compared to 3Q 2019 due to the aforementioned short-term deposit in the prior year and an increase of $0.2 million, or 6% compared to 2Q 2020.

Loan balances were essentially flat for the quarter while deposits grew by $106.5 million, or 15% compared to 2Q 2020. The Private Bank issued $32.6 million of PPP loans in 2Q 2020 to support our client base through the COVID-19 pandemic. Much of those funds remains deposited with the Private Bank.

Total noninterest expense (including intercompany allocations and excluding provision for credit losses) was $10.1 million in 3Q 2020, an increase of $1.0 million, or 11%, compared to 3Q 2019 and an increase of $0.2 million, or 2%, compared to 2Q 2020. The increases were driven by legal expenses related to litigation cases which can be uneven.

Cash Connect®

Cash Connect® is a premier provider of ATM vault cash, smart safe and cash logistics services in the United States. Cash Connect® services over 32,000 non-bank ATMs and retail safes nationwide supplying or servicing approximately $1.4 billion in cash at September 30, 2020. Cash Connect® also supports 635 ATMs for WSFS Bank Customers, which is one of the largest branded ATM networks in our market.

Cash Connect® reported pre-tax income of $3.1 million for 3Q 2020, which was an increase of $1.3 million, or 74%, compared to 3Q 2019 primarily due to higher cash volumes, a low interest rate environment, and continued growth of higher margin products and services. Net income in 3Q 2020 was $1.1 million higher than 2Q 2020, as cash orders and volumes increased due to a surge in demand as economic activity returned across the country. ROA of 2.46% in 3Q 2020 increased 71 bps from 3Q 2019 and increased 65 bps from 2Q 2020. Normalized for non-recurring items, 3Q 2020 pre-tax income was $2.7 million and ROA was 2.09%.

Net revenue of $10.4 million in 3Q 2020 was down $1.2 million from 3Q 2019, driven by the lower interest rate environment, fully offset by lower cost of funds (including lower third party funding fees in noninterest expense) and higher cash volume. Cash Connect® saw a 4% increase in the number of total units serviced, including a 40% increase in remote cash capture devices and a 7% increase of non-bailment reconciliation services. Compared to 2Q 2020, net revenue increased $1.1 million, or 12% (not annualized), due to increased cash volumes, ATM transactions, and cash ordering activity as COVID-19 economic restrictions eased.

Noninterest expense (including intercompany allocations of expense) was $7.3 million in 3Q 2020, a decrease of $2.5 million compared to 3Q 2019 and flat compared to 2Q 2020. The decrease in expenses compared to 3Q 2019 was driven by lower funding fees, as noted above.

During 3Q 2020, the division continued to increase fee income and margin by maintaining focus on expanding its smart safe and ATM managed services. Cash Connect® drove strong growth in the strategic remote cash capture space with approximately 4,300 devices under service, an increase of 200 units during the quarter. Our remote cash capture pipeline has grown as we add new channel partners, in both the retail and financial institution spaces, which have brought several significant opportunities on a national basis.

Third Quarter 2020 Earnings Release Conference Call and Supplemental Materials

Management will conduct a conference call to review 3Q 2020 results at 1:00 p.m. Eastern Time (ET) on Friday, October 23, 2020. Interested parties may listen to this call by dialing 1-877-312-5857 and using Conference ID #2765028. A rebroadcast of the conference call will be available beginning at 4:00 p.m. ET on October 23, 2020 until November 3, 2020 at 4:00 p.m. ET by dialing 1-855-859-2056 and using Conference ID #2765028.

We have provided additional information in the 3Q 2020 Earnings Release Supplement, which is available in the Investor Relations section of WSFS' website (www.wsfsbank.com).

About WSFS Financial Corporation

WSFS Financial Corporation is a multi-billion dollar financial services company. Its primary subsidiary, WSFS Bank, is the oldest and largest locally-managed bank and trust company headquartered in Delaware and the greater Philadelphia region. As of September 30, 2020, WSFS Financial Corporation had $13.8 billion in assets on its balance sheet and $23.1 billion in assets under management and administration. WSFS operates from 115 offices, 90 of which are banking offices, located in Pennsylvania (54), Delaware (43), New Jersey (16), Virginia (1) and Nevada (1) and provides comprehensive financial services including commercial banking, retail banking, cash management and trust and wealth management. Other subsidiaries or divisions include Arrow Land Transfer, Cash Connect®, Cypress Capital Management, LLC, Christiana Trust Company of Delaware, NewLane Finance, Powdermill Financial Solutions, West Capital Management, WSFS Institutional Services®, WSFS Mortgage, and WSFS Wealth Investments. Serving the greater Delaware Valley since 1832, WSFS Bank is one of the ten oldest banks in the United States continuously operating under the same name. For more information, please visit www.wsfsbank.com.

Forward-Looking Statement Disclaimer
This press release contains estimates, predictions, opinions, projections and other "forward-looking statements" as that phrase is defined in the Private Securities Litigation Reform Act of 1995. Such statements include, without limitation, references to the Company's predictions or expectations of future business or financial performance as well as its goals and objectives for future operations, financial and business trends, business prospects, and management's outlook or expectations for earnings, revenues, expenses, capital levels, liquidity levels, asset quality or other future financial or business performance, strategies or expectations. The words “believe,” “expect,” “anticipate,” “plan,” “estimate,” “target,” “project” and similar expressions, among others, generally identify forward-looking statements. Such forward-looking statements are based on various assumptions (some of which may be beyond the Company's control) and are subject to risks and uncertainties (which change over time) and other factors which could cause actual results to differ materially from those currently anticipated. Such risks and uncertainties include, but are not limited to, difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the markets in which the Company operates and in which its loans are concentrated, including possible declines in housing markets, an increase in unemployment levels and slowdowns in economic growth, including as a result of the COVID-19 pandemic; possible additional loan losses and impairment of the collectability of loans, particularly as a result of the COVID-19 pandemic and the policies and programs implemented by the Coronavirus Aid, Relief, and Economic Security Act, including its automatic loan forbearance provisions and our PPP lending activities; economic and financial impact of federal, state and local emergency orders and other actions taken in response to the COVID-19 pandemic; the Company's level of nonperforming assets and the costs associated with resolving problem loans including litigation and other costs and complying with government-imposed foreclosure moratoriums; changes in market interest rates which may increase funding costs and reduce earning asset yields and thus reduce margin; the impact of changes in interest rates and the credit quality and strength of underlying collateral and the effect of such changes on the market value of the Company's investment securities portfolio; the credit risk associated with the substantial amount of commercial real estate, construction and land development, and commercial and industrial loans in the Company's loan portfolio; the extensive federal and state regulation, supervision and examination governing almost every aspect of the Company's operations and potential expenses associated with complying with such regulations; the Company's ability to comply with applicable capital and liquidity requirements (including the effect of the transition to the Current Expected Credit Losses (CECL) methodology for allowances and related adjustments), including its ability to generate liquidity internally or raise capital on favorable terms; possible changes in trade, monetary and fiscal policies and stimulus programs, laws and regulations and other activities of governments, agencies, and similar organizations, and the uncertainty of the short- and long-term impacts of such changes; any impairments of the Company's goodwill or other intangible assets; conditions in the financial markets, including the destabilized economic environment caused by the COVID-19 pandemic, that may limit the Company's access to additional funding to meet its liquidity needs; the intention of the United Kingdom's Financial Conduct Authority (FCA) to cease support of London Inter-Bank Offered Rate (LIBOR) and the transition to an alternative reference interest rate, including methodologies for calculating the rate that are different from the LIBOR methodology and changed language for existing and new floating or adjustable rate contracts; the success of the Company's growth plans, including its plans to grow the commercial small business leasing portfolio and residential mortgage small business and SBA portfolios; the successful integration of 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 generally and, in particular, the Company's trust and wealth management business; failure of the financial and operational controls of the Company's Cash Connect® division; adverse judgments or other resolution of pending and future legal proceedings, and cost incurred in defending such proceedings; the Company's reliance on third parties for certain important functions, including the operation of its core systems, and any failures by such third parties; system failures or cybersecurity incidents or other breaches of the Company's network security, particularly given widespread remote working arrangements; the Company's ability to recruit and retain key 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; the effects of regional or national civil unrest (including any resulting branch or ATM closures or damage); possible changes in the speed of loan prepayments by the Company's Customers and loan origination or sales volumes; possible changes in the speed of prepayments of mortgage-backed securities due to changes in the interest rate environment, particularly as a result of the COVID-19 pandemic, and the related acceleration of premium amortization on prepayments in the event that prepayments accelerate; regulatory limits on the Company's ability to receive dividends from its subsidiaries and pay dividends to its stockholders; any reputation, credit, interest rate, market, operational, litigation, legal, liquidity, regulatory and compliance risk resulting from developments related to any of the risks discussed above; and other risks and uncertainties, including those discussed in the Company's Form 10-K for the year ended December 31, 2019, Form 10-Q for the quarter ended March 31, 2020, Form 10-Q for the quarter ended June 30, 2020 and other documents filed by the Company with the Securities and Exchange Commission from time to time.

We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date on which they are made, and the Company disclaims any duty to revise or update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company for any reason, except as specifically required by law. As used in this press release, the terms "WSFS," "the Company," "registrant," "we," "us," and "our" mean WSFS Financial Corporation and its subsidiaries, on a consolidated basis, unless the context indicates otherwise.


WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS
SUMMARY STATEMENTS OF INCOME (Unaudited)

                                       
  Three months ended   Nine months ended
(Dollars in thousands, except per share data) September 30, 2020   June 30, 2020   September 30, 2019   September 30, 2020   September 30, 2019
Interest income:                                      
Interest and fees on loans $ 110,195     $ 112,260     $ 124,800     $ 341,657     $ 340,918  
Interest on mortgage-backed securities 11,686     12,549     12,989     37,454     35,684  
Interest and dividends on investment securities 1,265     1,009     968     3,200     3,042  
Other interest income 224     65     2,505     797     4,098  
  123,370     125,883     141,262     383,108     383,742  
Interest expense:                  
Interest on deposits 8,346     9,832     16,851     32,815     43,916  
Interest on Federal Home Loan Bank advances 445     625     1,099     1,900     4,495  
Interest on senior debt 1,179     1,180     1,179     3,538     3,538  
Interest on trust preferred borrowings 347     484     693     1,417     2,136  
Interest on other borrowings 5     6     607     484     2,278  
  10,322     12,127     20,429     40,154     56,363  
Net interest income 113,048     113,756     120,833     342,954     327,379  
Provision for credit losses 2,716     94,754     4,121     154,116     23,970  
Net interest income after provision for credit losses 110,332     19,002     116,712     188,838     303,409  
Noninterest income:                  
Credit/debit card and ATM income 7,251     9,306     13,115     27,916     38,307  
Investment management and fiduciary revenue 13,266     10,929     10,459     35,157     30,988  
Deposit service charges 4,772     4,175     6,139     14,594     16,988  
Mortgage banking activities, net 11,507     8,494     3,152     23,472     8,090  
Loan and lease fee income 1,165     1,097     823     3,381     2,358  
Securities gains, net 3,322     1,908         5,923     78  
Unrealized gain (loss) on equity investment, net 104     (11 )   21,344     761     26,175  
Realized gain on sale of equity investment, net     22,052         22,052      
Bank-owned life insurance income 591     445     277     1,011     877  
Other income 7,193     5,980     7,037     20,126     22,478  
  49,171     64,375     62,346     154,393     146,339  
Noninterest expense:                  
Salaries, benefits and other compensation 48,772     48,757     48,914     142,875     133,669  
Occupancy expense 8,152     8,296     9,085     24,114     24,262  
Equipment expense 5,678     5,759     5,564     16,401     14,997  
Data processing and operations expense 3,198     3,061     3,861     9,337     10,180  
Professional fees 4,611     4,423     3,180     13,634     7,967  
Marketing expense 1,451     1,215     1,373     3,617     4,910  
FDIC expenses 829     305     (227 )   1,080     1,435  
Loss on early extinguishment of debt 2,280             2,280      
Loan workout and other credit costs 1,422     4,587     846     6,462     2,537  
Corporate development expense 428     2,801     10,517     4,570     51,090  
Restructuring expense         8,360         14,603  
Other operating expenses 16,719     14,231     18,088     51,101     49,351  
  93,540     93,435     109,561     275,471     315,001  
Income (loss) before taxes 65,963     (10,058 )   69,497     67,760     134,747  
Income tax provision (benefit) 15,140     (2,247 )   15,902     14,181     32,253  
Net income (loss) $ 50,823     $ (7,811 )   $ 53,595     $ 53,579     $ 102,494  
Less: Net loss attributable to noncontrolling interest (322   (700 )   (287 )   (1,382   (611 )
Net income (loss) attributable to WSFS $ 51,145     $ (7,111 )   $ 53,882     $ 54,961     $ 103,105  
Diluted earnings (loss) per share of common stock: $ 1.01     $ (0.14 )   $ 1.02     $ 1.08     $ 2.12  
Weighted average shares of common stock outstanding for fully diluted EPS 50,684,493     50,655,154     53,054,368     50,832,085     48,668,460  

See “Notes”


WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS
SUMMARY STATEMENTS OF INCOME (Unaudited) - continued

                                       
  Three months ended   Nine months ended
  September 30, 2020   June 30, 2020   September 30, 2019   September 30, 2020   September 30, 2019
Performance Ratios:                  
Return on average assets (a) 1.49 %   (0.22 )%   1.72 %   0.57 %   1.23 %
Return on average equity (a) 11.08     (1.55   11.60     3.99     8.57  
Return on average tangible common equity (a)(o) 16.61     (1.55   17.51     6.44     12.98  
Net interest margin (a)(b) 3.66     3.93     4.38     3.97     4.47  
Efficiency ratio (c) 57.57     52.36     59.71     55.29     66.36  
Noninterest income as a percentage of total net revenue (b) 30.26     36.07     33.98     30.99     30.83  

See “Notes”


WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
SUMMARY STATEMENTS OF FINANCIAL CONDITION (Unaudited)

                       
(Dollars in thousands) September 30, 2020   June 30, 2020   September 30, 2019
Assets:          
Cash and due from banks $ 714,062     $ 583,221     $ 257,581  
Cash in non-owned ATMs 347,462     360,969     322,571  
Investment securities (d) 113,609     127,601     134,961  
Other investments 28,329     31,560     92,832  
Mortgage-backed securities (d) 2,334,922     2,195,389     1,908,821  
Net loans (e)(f)(l) 9,254,785     9,229,741     8,548,140  
Bank owned life insurance 31,717     30,391     31,077  
Goodwill and intangibles 559,806     562,515     571,850  
Other assets 445,416     451,970     404,840  
Total assets $ 13,830,108     $ 13,573,357     $ 12,272,673  
Liabilities and Stockholders’ Equity:          
Noninterest-bearing deposits $ 3,196,967     $ 3,188,046     $ 2,268,615  
Interest-bearing deposits 7,951,619     7,596,125     7,022,313  
Total customer deposits 11,148,586     10,784,171     9,290,928  
Brokered deposits 242,759     278,329     242,265  
Total deposits 11,391,345     11,062,500     9,533,193  
Federal Home Loan Bank advances 16,751     106,395     365,675  
Other borrowings 187,543     189,398     189,108  
Other liabilities 373,167     393,270     328,240  
Total liabilities 11,968,806     11,751,563     10,416,216  
Stockholders’ equity of WSFS 1,863,499     1,823,669     1,856,992  
Noncontrolling interest (2,197 )   (1,875 )   (535 )
Total stockholders' equity 1,861,302     1,821,794     1,856,457  
Total liabilities and stockholders' equity $ 13,830,108     $ 13,573,357     $ 12,272,673  
Capital Ratios:          
Equity to asset ratio 13.47 %   13.44 %   15.13 %
Tangible common equity to tangible asset ratio (o) 9.82     9.69     10.98  
Common equity Tier 1 capital (required: 4.5%; well capitalized: 6.5%) (g) 13.24     12.68     13.01  
Tier 1 leverage (required: 4.00%; well-capitalized: 5.00%) (g) 10.31     10.40     11.13  
Tier 1 risk-based capital (required: 6.00%; well-capitalized: 8.00%) (g) 13.24     12.68     13.01  
Total Risk-based capital (required: 8.00%; well-capitalized: 10.00%) (g) 14.50     13.93     13.50  
Asset Quality Indicators:          
Nonperforming Assets:          
Nonaccruing loans $ 25,835     $ 26,175     $ 38,418  
Troubled debt restructuring (accruing) 15,670     14,550     14,125  
Assets acquired through foreclosure 3,000     4,153     3,693  
Total nonperforming assets $ 44,505     $ 44,878     $ 56,236  
Past due loans (h) $ 11,886     $ 8,601     $ 13,709  
Allowance for credit losses 232,733     232,200     47,671  
Ratio of nonperforming assets to total assets 0.32 %   0.33 %   0.46 %
Ratio of nonperforming assets (excluding accruing TDRs) to total assets 0.21     0.22     0.34  
Ratio of allowance for credit losses to total loans and leases (q) 2.47     2.45     0.56  
Ratio of allowance for credit losses to nonaccruing loans 901     887     124  
Ratio of quarterly net charge-offs to average gross loans (a)(e)(i)(n) 0.09     0.07     0.09  
Ratio of year-to-date net charge-offs to average gross loans (a)(e)(i)(n) 0.07     0.06     0.27  

See “Notes”


WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued) 
AVERAGE BALANCE SHEET (Unaudited)

                                                                 
(Dollars in thousands) Three months ended
  September 30, 2020   June 30, 2020   September 30, 2019
  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 $ 2,848,655     $ 30,218     4.22 %   $ 2,841,231     $ 31,230     4.42 %   $ 2,783,199     $ 37,492     5.34 %
Residential real estate loans 892,634     12,512     5.61     933,854     13,679     5.86     1,069,495     14,580     5.45  
Commercial loans (p) 4,472,190     52,753     4.70     4,291,301     53,390     5.01     3,548,597     55,903     6.26  
Consumer loans 1,153,168     13,726     4.74     1,124,742     13,065     4.67     1,135,575     16,286     5.69  
Loans held for sale 110,768     986     3.54     92,252     896     3.91     50,465     539     4.24  
Total loans 9,477,415     110,195     4.63     9,283,380     112,260     4.87     8,587,331     124,800     5.77  
Mortgage-backed securities (d) 2,204,573     11,686     2.12     2,048,357     12,549     2.45     1,833,267     12,989     2.83  
Investment securities (d) 119,556     1,265     4.86     130,671     1,009     3.82     137,497     968     3.35  
Other interest-earning assets 530,178     224     0.17     220,801     65     0.12     423,470     2,505     2.35  
Total interest-earning assets 12,331,722     $ 123,370     3.99 %   11,683,209     $ 125,883     4.34 %   10,981,565     $ 141,262     5.11 %
Allowance for credit losses (233,301           (156,576 )           (46,773 )        
Cash and due from banks 135,198             108,463             115,506          
Cash in non-owned ATMs 370,912             319,154             313,456          
Bank owned life insurance 30,956             29,965             30,558          
Other noninterest-earning assets 1,012,506             1,036,500             1,024,108          
Total assets $ 13,647,993             $ 13,020,715             $ 12,418,420          
Liabilities and Stockholders’ Equity:                                  
Interest-bearing liabilities:                                  
Interest-bearing deposits:                                  
Interest-bearing demand $ 2,372,547     $ 790     0.13 %   $ 2,213,369     $ 882     0.16 %   $ 2,055,497     $ 2,490     0.48 %
Money market 2,404,202     1,805     0.30     2,262,737     2,311     0.41     1,966,545     5,034     1.02  
Savings 1,753,489     621     0.14     1,681,587     877     0.21     1,579,463     2,068     0.52  
Customer time deposits 1,234,637     4,402     1.42     1,242,730     4,954     1.60     1,371,744     5,452     1.58  
Total interest-bearing customer deposits 7,764,875     7,618     0.39     7,400,423     9,024     0.49     6,973,249     15,044     0.86  
Brokered deposits 243,728     728     1.19     286,655     808     1.13     294,485     1,807     2.43  
Total interest-bearing deposits 8,008,603     8,346     0.41     7,687,078     9,832     0.51     7,267,734     16,851     0.92  
FHLB of Pittsburgh advances 68,442     445     2.59     106,694     625     2.36     187,721     1,099     2.32  
Trust preferred borrowings 67,011     347     2.06     67,011     484     2.90     67,011     693     4.10  
Senior debt 98,733     1,179     4.78     98,681     1,180     4.78     98,519     1,179     4.79  
Other borrowed funds 20,062     5     0.10     25,580     6     0.09     127,850     607     1.88  
Total interest-bearing liabilities 8,262,851     $ 10,322     0.50 %   7,985,044     $ 12,127     0.61 %   7,748,835     $ 20,429     1.05 %
Noninterest-bearing demand deposits 3,176,647             2,882,999             2,503,816          
Other noninterest-bearing liabilities 374,206             311,697             323,350          
Stockholders’ equity of WSFS 1,836,256             1,842,525             1,842,759          
Noncontrolling interest (1,967           (1,550 )           (340 )        
Total liabilities and equity $ 13,647,993             $ 13,020,715             $ 12,418,420          
Excess of interest-earning assets over interest-bearing liabilities $ 4,068,871             $ 3,698,165             $ 3,232,730          
Net interest and dividend income     $ 113,048             $ 113,756             $ 120,833      
Interest rate spread         3.49 %           3.73 %           4.06 %
Net interest margin         3.66 %           3.93 %           4.38 %

See “Notes”


WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
(Unaudited)

                   
(Dollars in thousands, except per share data) Three months ended   Nine months ended
Stock Information: September 30, 2020   June 30, 2020   September 30, 2019   September 30, 2020   September 30, 2019
Market price of common stock:                  
High $32.83   $33.32   $46.05   $44.70   $46.05
Low 24.59   21.00   38.79   17.84   37.19
Close 26.97   28.70   44.10   26.97   44.10
Book value per share of common stock 36.77   36.00   35.41        
Tangible common book value per share of common stock (o) 25.73   24.89   24.50        
Number of shares of common stock outstanding (000s) 50,673   50,660   52,445        
Other Financial Data:                  
One-year repricing gap to total assets (k) 7.58%   6.95%   (3.38)%        
Weighted average duration of the MBS portfolio 2.1 years   1.3 years   2.9 years        
Unrealized gains on securities available for sale, net of taxes $68,690   $74,689   $31,512        
Number of Associates (FTEs) (m) 1,827   1,862   1,792        
Number of offices (branches, LPO’s, operations centers, etc.) 115   115   127        
Number of WSFS owned and branded ATMs 635   571   477        

Notes:

  (a)   Annualized.
  (b)   Computed on a fully tax-equivalent basis.
  (c)   Noninterest expense divided by (tax-equivalent) net interest income and noninterest income.
  (d)   Includes securities held to maturity (at amortized cost) and securities available for sale (at fair value).
  (e)   Net of unearned income.
  (f)   Net of allowance for credit losses.
  (g)   Represents capital ratios of Wilmington Savings Fund Society, FSB and subsidiaries.
  (h)   Accruing loans which are contractually past due 90 days or more as to principal or interest. Balance includes student loans acquired from Beneficial, which are U.S. government guaranteed with little risk of credit loss.
  (i)   Excludes loans held for sale.
  (j)   Nonperforming loans are included in average balance computations.
  (k)   The difference between projected amounts of interest-sensitive assets and interest-sensitive liabilities repricing within one year divided by total assets, based on a current interest rate scenario.
  (l)   Includes loans held for sale and reverse mortgages.
  (m)   Includes seasonal Associates, when applicable.
  (n)   Excludes reverse mortgage loans.
  (o)   The Company uses non-GAAP (United States Generally Accepted Accounting Principles) financial information in its analysis of the Company’s performance. The Company’s management believes that these non-GAAP financial measures provide a greater understanding of ongoing operations, enhance comparability of results of operations with prior periods and show the effects of significant gains and charges in the periods presented. The Company’s management believes that investors may use these non-GAAP financial measures to analyze the Company’s financial performance without the impact of unusual items or events that may obscure trends in the Company’s underlying performance. This non-GAAP data should be considered in addition to results prepared in accordance with GAAP, and is not a substitute for, or superior to, GAAP results. For a reconciliation of these and other non-GAAP financial measures to their comparable GAAP measures, see "Non-GAAP Reconciliation" at the end of the press release.
  (p)   Includes commercial small business leases.
  (q)   Represents amortized cost basis for loans, leases and held-to-maturity securities.
  (r)   Includes provision for credit losses, loan workout expenses, OREO expenses and other credit costs.


WSFS FINANCIAL CORPORATION 
FINANCIAL HIGHLIGHTS (Continued)
(Dollars in thousands, except per share data)
(Unaudited)

                                       
Non-GAAP Reconciliation (o): Three months ended   Nine months ended
  September 30, 2020   June 30, 2020   September 30, 2019   September 30, 2020   September 30, 2019
Net interest income (GAAP) $ 113,048     $ 113,756     $ 120,833     $ 342,954     $ 327,379  
Core net interest income (non-GAAP) $ 113,048     $ 113,756     $ 120,833     $ 342,954     $ 327,379  
Noninterest income (GAAP) $ 49,171     $ 64,375     $ 62,346     $ 154,393     $ 146,339  
Less: Securities gains 3,322     1,908         5,923     78  
Less/(plus): Unrealized gains (losses) on equity investments, net 104     (11 )   21,344     761     26,175  
Less: Realized gain on sale of equity investment, net     22,052         22,052      
Core fee income (non-GAAP) $ 45,745     $ 40,426     $ 41,002     $ 125,657     $ 120,086  
Core net revenue (non-GAAP) $ 158,793     $ 154,182     $ 161,835     $ 468,611     $ 447,465  
Core net revenue (non-GAAP)(tax-equivalent) $ 159,068     $ 154,513     $ 162,135     $ 469,486     $ 448,400  
Noninterest expense (GAAP) $ 93,540     $ 93,435     $ 109,561     $ 275,471     $ 315,001  
Less: Corporate development expense 428     2,801     10,517     4,570     51,090  
Less: Restructuring expense         8,360         14,603  
Less: Loss on early extinguishment of debt 2,280             2,280      
Less: Contribution to WSFS Community Foundation             3,000      
Core noninterest expense (non-GAAP) $ 90,832     $ 90,634     $ 90,684     $ 265,621     $ 249,308  
Core efficiency ratio (c) 57.1 %   58.7 %   55.9 %   56.6 %   55.6 %
                   
  End of period        
  September 30, 2020   June 30, 2020   September 30, 2019        
Total assets $ 13,830,108     $ 13,573,357     $ 12,272,673          
Less: Goodwill and other intangible assets 559,806     562,515     571,850          
Total tangible assets $ 13,270,302     $ 13,010,842     $ 11,700,823          
Total stockholders’ equity of WSFS $ 1,863,499     $ 1,823,669     $ 1,856,992          
Less: Goodwill and other intangible assets 559,806     562,515     571,850          
Total tangible common equity (non-GAAP) $ 1,303,693     $ 1,261,154     $ 1,285,142          
                   
Calculation of tangible common book value per share:                              
Book value per share (GAAP) $ 36.77     $ 36.00     $ 35.41          
Tangible common book value per share (non-GAAP) 25.73     24.89     24.50          
Calculation of tangible common equity to tangible assets:                        
Equity to asset ratio (GAAP) 13.47 %   13.44 %   15.13 %        
Tangible common equity to tangible assets ratio (non-GAAP) 9.82     9.69     10.98          

 

                                       
Non-GAAP Reconciliation - continued (o): Three months ended   Nine months ended
  September 30, 2020   June 30, 2020   September 30, 2019   September 30, 2020   September 30, 2019
GAAP net income (loss) attributable to WSFS $ 51,145     $ (7,111 )   $ 53,882     $ 54,961     $ 103,105  
Plus/(less): Pre-tax adjustments: Securities gains, realized/unrealized gains on equity investments, corporate development and restructuring expense, loss on early extinguishment of debt, and contribution to WSFS Community Foundation (718   (21,148 )   (2,467 )   (18,886   39,440  
(Plus)/less: Tax impact of pre-tax adjustments 264     4,712     590     2,956     (7,542 )
Adjusted net income (loss) (non-GAAP) attributable to WSFS $ 50,691     $ (23,547 )   $ 52,005     $ 39,031     $ 135,003  
                   
GAAP return on average assets (ROA) 1.49 %   (0.22 )%   1.72 %   0.57 %   1.23 %
Plus/(less): Pre-tax adjustments: Securities gains, realized/unrealized gains on equity investments, corporate development and restructuring expense, loss on early extinguishment of debt, and contribution to WSFS Community Foundation (0.02   (0.65 )   (0.08 )   (0.19   0.47  
(Plus)/less: Tax impact of pre-tax adjustments 0.01     0.14     0.02     0.02     (0.09 )
Core ROA (non-GAAP) 1.48 %   (0.73 )%   1.66 %   0.40 %   1.61 %
                   
Earnings (loss) per share (GAAP) $ 1.01     $ (0.14 )   $ 1.02     $ 1.08     $ 2.12  
Plus/(less): Pre-tax adjustments: Securities gains, realized/unrealized gains on equity investments, corporate development and restructuring expense, loss on early extinguishment of debt, and contribution to WSFS Community Foundation (0.01   (0.42 )   (0.05 )   (0.37   0.81  
(Plus)/less: Tax impact of pre-tax adjustments     0.10     0.01     0.06     (0.16 )
Core earnings (loss) per share (non-GAAP) $ 1.00     $ (0.46 )   $ 0.98     $ 0.77     $ 2.77  
                   
Calculation of return on average tangible common equity:                                      
GAAP net income (loss) attributable to WSFS $ 51,145     $ (7,111 )   $ 53,882     $ 54,961     $ 103,105  
Plus: Tax effected amortization of intangible assets 2,090     2,198     2,113     6,391     5,252  
Net tangible income (loss) (non-GAAP) $ 53,235     $ (4,913 )   $ 55,995     $ 61,352     $ 108,357  
Average stockholders’ equity of WSFS $ 1,836,256     $ 1,842,525     $ 1,842,759     $ 1,838,087     $ 1,608,375  
Less: average goodwill and intangible assets 561,505     564,622     574,253     564,596     492,474  
Net average tangible common equity $ 1,274,751     $ 1,277,903     $ 1,268,506     $ 1,273,491     $ 1,115,901  
Return on average tangible common equity (non-GAAP) 16.61 %   (1.55 )%   17.51 %   6.44 %   12.98 %
                   
Calculation of core return on average tangible common equity:                                      
Adjusted net income (loss) (non-GAAP) attributable to WSFS $ 50,691     $ (23,547 )   $ 52,005     $ 39,031     $ 135,003  
Plus: Tax effected amortization of intangible assets 2,090     2,198     2,113     6,391     5,252  
Core net tangible income (loss) (non-GAAP) $ 52,781     $ (21,349 )   $ 54,118     $ 45,422     $ 140,255  
Net average tangible common equity $ 1,274,751     $ 1,277,903     $ 1,268,506     $ 1,273,491     $ 1,115,901  
Core return on average tangible common equity (non-GAAP) 16.47 %   (6.72 )%   16.93 %   4.76 %   16.80 %

 

                                       
Non-GAAP Reconciliation - continued (o): Three months ended   Nine months ended
  September 30, 2020   June 30, 2020   September 30, 2019   September 30, 2020   September 30, 2019
Calculation of core PPNR:                                      
Net income (loss) (GAAP) $ 50,823     $ (7,811 )   $ 53,595     $ 53,579     $ 102,494  
Plus/(less): Income tax provision (benefit) 15,140     (2,247 )   15,902     14,181     32,253  
Plus: Provision for credit losses 2,716     94,754     4,121     154,116     23,970  
PPNR (Non-GAAP) 68,679     84,696     73,618     221,876     158,717  
Plus/(less): Pre-tax adjustments: Securities gains, realized/unrealized gains on equity investments, corporate development and restructuring expense, loss on early extinguishment of debt, and contribution to WSFS Community Foundation (718   (21,148 )   (2,467 )   (18,886   39,440  
Core PPNR (Non-GAAP) $ 67,961     $ 63,548     $ 71,151     $ 202,990     $ 198,157  
                   
Calculation of core PPNR to average assets, less PPP:                                      
PPP income $ 6,373     $ 4,836     $     $ 11,209     $  
PPP expense 442     1,814         2,256      
PPP net income $ 5,931     $ 3,022     $     $ 8,953     $  
                   
Core PPNR (Non-GAAP), less PPP $ 62,030     $ 60,526     $ 71,151     $ 194,037     $ 198,157  
Total average assets 13,647,993     13,020,715     12,418,420     12,945,318     11,225,679  
Average assets (PPP) 952,640     727,377         561,111      
Average assets, less PPP $ 12,695,353     $ 12,293,338     $ 12,418,420     $ 12,384,207     $ 11,225,679  
Core PPNR to average assets 1.98 %   1.96 %   2.27 %   2.09 %   2.36 %
Core PPNR to average assets, less PPP 1.94 %   1.98 %   2.27 %   2.09 %   2.36 %
                             

Investor Relations Contact: Dominic C. Canuso
phone: (302) 571-6833; email: dcanuso@wsfsbank.com
Media Contact: Rebecca Acevedo
phone: (215) 253-5566; email: racevedo@wsfsbank.com

 

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Source: WSFS Financial Corporation