wsfs-20200427
false000082894400008289442020-04-272020-04-27

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
  FORM 8-K
  
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

April 27, 2020
Date of Report
(Date of earliest event reported) 
WSFS Financial Corporation
(Exact name of registrant as specified in its charter)
 
Delaware001-3563822-2866913
(State or other jurisdiction
of incorporation)
(SEC Commission
File Number)
(IRS Employer
Identification Number)
500 Delaware Ave,
Wilmington, Delaware, 19801
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (302) 792-6000
Not Applicable
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareWSFSNasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 40.12b-2).
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02 Results of Operation and Financial Condition

On April 27, 2020, the Registrant issued a press release to report earnings for the quarter ended March 31, 2020. Copies of the press release and 1Q 2020 Earnings Release Supplement are furnished with this Form 8-K as exhibits.


Item 9.01 Financial Statements and Other Exhibits
(d) Exhibits.
99.1 Press Release, dated April 27, 2020
99.2 1Q 2020 Earnings Release Supplement



SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, hereunto duly authorized.
 
WSFS FINANCIAL CORPORATION
Date:April 27, 2020By: /s/ Dominic C. Canuso
  Dominic C. Canuso
Executive Vice President and
Chief Financial Officer


Document
https://cdn.kscope.io/c1c95dae1dbe9783666a54bb2f98edcf-wsfscorp21.jpg
WSFS Bank Center
1
500 Delaware Avenue,
Wilmington, Delaware 19801

EXHIBIT 99.1
FOR IMMEDIATE RELEASEInvestor Relations Contact: Dominic C. Canuso
phone: (302) 571-6833; email: dcanuso@wsfsbank.com
April 27, 2020Media Contact: Rebecca Acevedo
phone: (215) 253-5566; email: racevedo@wsfsbank.com

WSFS REPORTS 1Q 2020 EPS OF $0.21, RESULTS IMPACTED BY COVID-19 AND CECL;
WSFS COMMUNITY FOUNDATION RECEIVES $3.0 MILLION GRANT FROM WSFS BANK
FOR ADDITIONAL INFORMATION REGARDING OUR COVID-19 RESPONSE, FINANCIAL IMPACTS AND OUTLOOK, PLEASE REFER TO THE 1Q 2020 EARNINGS RELEASE SUPPLEMENT AVAILABLE IN THE INVESTOR RELATIONS SECTION OF WSFS' WEBSITE (www.wsfsbank.com).
WILMINGTON, Del. — WSFS Financial Corporation (Nasdaq: WSFS), the parent company of WSFS Bank, today announced its financial results for the first quarter of 2020.
Selected financial results and metrics are as follows:
(Dollars in millions, except per share data)1Q 20204Q 20191Q 2019
Net interest income$116.2  $117.6  $83.3  
Fee income40.8  41.8  41.1  
Total net revenue157.0  159.3  124.4  
Provision for credit losses56.6  1.6  7.7  
Noninterest expense88.5  98.1  97.6  
Net income attributable to WSFS
10.9  45.7  13.0  
Pre-provision net revenue (PPNR)(1)
68.5  61.2  26.8  
EPS (diluted)0.21  0.88  0.33  
Return on average assets (ROA)0.36 %1.48 %0.58 %
Return on average equity (ROE)2.4  9.8  4.5  
Efficiency ratio56.3  61.5  78.2  
GAAP results for 1Q 2020 were significantly impacted by the economic effects of the COVID-19 pandemic and our adoption of the Current Expected Credit Loss method of accounting (CECL), primarily reflected in additional provision for credit losses of $56.6 million for the quarter. Results also include our acquisition of Beneficial Bancorp, Inc. (Beneficial) on March 1, 2019 and other significant items including the following:
1Q 20204Q 20191Q 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)
Corporate development and restructuring expense$1.3  $0.02  $6.1  $0.09  $31.0  $0.65  
Contribution to WSFS Community Foundation3.0  0.04  —  —  —  —  
Net unrealized gain on equity investments0.7  0.01  —  —  3.8  0.07
Securities gains0.7  0.01  0.3  —  —  —  

(1) As used in this press release, pre-provision net revenue is a non-GAAP financial measure calculated as the difference between net revenue before provision for credit losses and noninterest expense. For a reconciliation of this and other non-GAAP measures to their comparable GAAP measures, see pages 20 and 21 of this press release.


https://cdn.kscope.io/c1c95dae1dbe9783666a54bb2f98edcf-wsfscorp21.jpg
WSFS Bank Center
2
500 Delaware Avenue,
Wilmington, Delaware 19801
CEO Commentary
Rodger Levenson, Chairman, President and CEO, said, “Our first quarter 2020 results were significantly impacted by the economic effects of the global COVID-19 pandemic, including $56.6 million of additional provision expense, or $0.84 per share, under CECL. Our core pre-provision net revenue (PPNR)(2) was $71.5 million during the quarter, continuing the trend of strong fundamental operating performance since the Beneficial combination and we continue to maintain significant excess capital levels and liquidity capacity. While the Board recently approved a new share repurchase authorization of 15% of outstanding shares as of March 31, 2020, in light of the current environment, we have temporarily suspended all share repurchases until we have a clearer view on the impact of COVID-19 on the economy and our performance.
“Our immediate focus remains on the health, wellbeing, and safety of our Associates, Customers, and our communities during this challenging and uncertain time. This includes reinforcing best healthcare and prevention practices and universal precautions in offices and banking locations and supporting our Customers through several relief programs including significant participation in the Coronavirus Aid, Relief and Economic Security (CARES) Act and Payroll Protection Program (PPP). We also were pleased to make a $3.0 million grant to the WSFS Community Foundation to address the impacts of COVID-19 and provide long-term support for education, health and human services, and economic development in our communities.
“We often cite the value of our culture and the strong engagement of our Associates and Customers. We capture that in our Strategy: ‘Engaged Associates, living our culture, making a better life for all we serve.’ Now, more than ever, our strategy is vital; we’re open for business, serving our Customers and hiring new Associates. I am proud of all our Associates and how hard they are working to support our Customers and local communities during this uncertain time. Over the past 188 years, we’ve faced many challenges; we’re here and stand ready to serve those in need, now and for many years to come.”








(2) Core pre-provision net revenue is a non-GAAP financial measure defined as the difference between core net revenue before provision for credit losses and core noninterest expense. For a reconciliation of this and other non-GAAP measures to their comparable GAAP measures, see pages 20 and 21 of this press release.


https://cdn.kscope.io/c1c95dae1dbe9783666a54bb2f98edcf-wsfscorp21.jpg
WSFS Bank Center
3
500 Delaware Avenue,
Wilmington, Delaware 19801
Notable Items in the Quarter (all excluded from core results):
WSFS made a $3.0 million (pre-tax) contribution, or $0.04 per share (after-tax), to the WSFS Community Foundation to address the impacts of the COVID-19 pandemic and further fund improvements in the expanded communities served by WSFS Bank.
WSFS recorded net unrealized gains on our equity investments of $0.7 million (pre-tax), or $0.01 per share (after-tax), including $2.9 million (pre-tax), or approximately $0.04 per share (after-tax), of net unrealized gains on our investment in Visa Class B shares, compared with $3.8 million (pre-tax), or approximately $0.07 per share (after-tax), in unrealized gains related to Visa Class B shares in 1Q 2019. Since our adoption of ASU 2016-01 in 1Q 2018, cumulative realized and unrealized gains on Visa Class B shares total $53.0 million. The gains on our investment in Visa Class B shares in the quarter were partially offset by an impairment charge of $2.3 million (pre-tax), or $0.03 per share (after-tax), on our investment in Spring EQ.
WSFS recorded $1.3 million (pre-tax), or approximately $0.02 per share (after-tax), of corporate development expenses related to our acquisition of Beneficial, compared with $31.0 million (pre-tax), or approximately $0.65 per share (after-tax), of corporate development and restructuring expenses in 1Q 2019. The merger-to-date amounts are less than our original expectations.
WSFS realized $0.7 million (pre-tax), or approximately $0.01 per share (after-tax), in net gains on sales of securities.





https://cdn.kscope.io/c1c95dae1dbe9783666a54bb2f98edcf-wsfscorp21.jpg
WSFS Bank Center
4
500 Delaware Avenue,
Wilmington, Delaware 19801
Highlights for 1Q 2020: 
WSFS adopted the CECL method of accounting as of January 1, 2020, which considers forward-looking information when establishing reserves for credit losses. While credit quality metrics at March 31, 2020 were strong and improved, the COVID-19 pandemic has resulted in deterioration in expected macroeconomic drivers in our CECL modeling, resulting in additional provision for credit losses of $56.6 million in the quarter, which is included in our core results noted below, and reducing core EPS(3) by $0.84 and core ROA(3) by 1.43%.
Core ROA was 0.39% compared to 1.59% for 1Q 2019.
Core EPS was $0.23 compared to $0.91 for 1Q 2019.
Core net revenue(3) of $155.6 million increased $35.0 million, or 29%, from 1Q 2019, including a $32.8 million, or 39%, increase in core net interest income(3), and a $2.2 million, or 6%, increase in core fee income (noninterest income)(3).
Core noninterest expense(3) increased $17.6 million, or 26%, from 1Q 2019, creating a full 3 percentage points of positive core operating leverage(3) and resulting in a core efficiency ratio(3) of 54.0% compared to 55.1% for 1Q 2019.
Core pre-provision net revenue (PPNR) was $71.5 million, an increase of $4.8 million, or 7%, from 4Q 2019 and $17.5 million, or 32% from 1Q 2019.
WSFS repurchased $38.7 million, or 1,004,348 shares of our common stock during the quarter, completing our current authorization. During the quarter, the Board approved a new share repurchase authorization of 15% of outstanding shares as of March 31, 2020; however, we have temporarily suspended all share repurchases until we have a clearer view of the impact of COVID-19 on the economy and our performance.



(3) As used in this press release, core ROA, core EPS, 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. These non-GAAP 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 measures to their comparable GAAP measures, see pages 20 and 21 of this press release.


https://cdn.kscope.io/c1c95dae1dbe9783666a54bb2f98edcf-wsfscorp21.jpg
WSFS Bank Center
5
500 Delaware Avenue,
Wilmington, Delaware 19801
First Quarter 2020 Discussion of Financial Results
Balance Sheet
The following tables summarize loan and customer funding balances and composition at March 31, 2020 compared to December 31, 2019 and March 31, 2019:
Loans
(Dollars in thousands)March 31, 2020December 31, 2019March 31, 2019
Commercial & industrial$3,412,266  40 %$3,341,136  39 %$3,388,503  39 %
Commercial real estate2,223,117  26  2,212,026  26  2,345,568  27  
Construction626,253   578,713   573,773   
Commercial small business leases201,753   190,592   144,658   
Total commercial loans6,463,389  76  6,322,467  74  6,452,502  75  
Residential mortgage1,054,544  13  1,099,744  13  1,146,982  13  
Consumer1,118,287  13  1,133,701  14  1,136,334  13  
Allowance for credit losses(139,073) (2) (47,576) (1) (46,321) (1) 
Net loans$8,497,147  100 %$8,508,336  100 %$8,689,497  100 %

Customer Funding
(Dollars in thousands)
March 31, 2020December 31, 2019March 31, 2019
Noninterest demand$2,314,982  25 %$2,189,573  23 %$2,191,321  24 %
Interest-bearing demand2,093,388  22  2,129,725  23  2,069,393  22  
Savings1,594,735  17  1,563,000  17  1,721,417  18  
Money market2,149,119  23  2,100,188  22  1,900,223  20  
Total core deposits8,152,224  87  7,982,486  85  7,882,354  84  
Customer time deposits1,272,154  13  1,356,610  15  1,475,695  16  
Total customer deposits$9,424,378  100 %$9,339,096  100 %$9,358,049  100 %
At March 31, 2020, WSFS’ net loan portfolio decreased $11.2 million when compared with December 31, 2019 and $192.4 million when compared with March 31, 2019. These results included a $96.2 million decline during the quarter and a $342.8 million decline year-over-year in non-relationship CRE and residential mortgage run-off portfolios primarily acquired from the Beneficial acquisition. Excluding these run-off portfolios and a $91.5 million increase in the allowance for credit losses recorded upon the adoption of CECL as of January 1, 2020, net loans increased $176.5 million during the quarter, due to a $69.3 million increase in revolving lines of credit and additional growth across several categories. Year-over-year, net loans increased $243.2 million, or 3%, excluding run-off portfolios and the change in the allowance for credit losses, with growth across C&I, construction, small business leases, home equity installment loans originated through our partnership with Spring EQ and student loans through our partnership with LendKey.


https://cdn.kscope.io/c1c95dae1dbe9783666a54bb2f98edcf-wsfscorp21.jpg
WSFS Bank Center
6
500 Delaware Avenue,
Wilmington, Delaware 19801
Total customer funding was $9.4 billion at March 31, 2020, an $85.3 million increase from December 31, 2019 and a $66.3 million increase from March 31, 2019, reflecting minimal impact of post-conversion customer attrition from the Beneficial acquisition. Core deposits were $8.2 billion at March 31, 2020, an increase of $169.7 million, or 9% (annualized), over the prior quarter, and were a strong 87% of total customer deposits. No- and low-cost checking deposit accounts represented a robust 47% of total customer deposits at March 31, 2020. These core deposits predominantly represent longer-term, less price-sensitive customer relationships. The ratio of loans to customer deposits was 90% at March 31, 2020 reflecting significant liquidity capacity.
Net Interest Income
Three Months Ending
(Dollars in thousands)
March 31, 2020December 31, 2019March 31, 2019
Net interest income before purchase accounting accretion
$101,941  $103,696  $78,444  
Purchase accounting accretion
14,209  13,873  4,870  
Net interest income
$116,150  $117,569  $83,314  
Net interest margin before purchase accounting accretion
3.85 %3.83 %4.05 %
Purchase accounting accretion
0.53  0.52  0.25  
Net interest margin
4.38 %4.35 %4.30 %
Net interest income increased $32.8 million, or 39%, compared to 1Q 2019, primarily due to a full quarter impact of the Beneficial acquisition in the current quarter. Net interest margin increased 8 bps from 1Q 2019 due to higher purchase accounting accretion partially offset by the significantly lower rate environment and expected margin compression due to Beneficial's lower-margin balance sheet.
Net interest income decreased $1.4 million, or 1% (not annualized), from 4Q 2019 primarily due to the lower rate environment, including a 150 bps reduction in the Fed Funds rate during the quarter, partially offset by incremental purchase loan accretion. Net interest margin increased 3 bps due to favorable funding mix and higher purchase accounting accretion, which included one large commercial loan payoff that refinanced a significant portion with WSFS.


https://cdn.kscope.io/c1c95dae1dbe9783666a54bb2f98edcf-wsfscorp21.jpg
WSFS Bank Center
7
500 Delaware Avenue,
Wilmington, Delaware 19801
Credit Quality
As discussed earlier in this release, WSFS adopted CECL as of January 1, 2020. Under CECL, we consider forward-looking information regarding macro-economic conditions and correlated impact on the loan portfolio’s credit when we establish reserves for credit losses. While credit quality metrics at March 31, 2020 were strong and improved, the COVID-19 pandemic has resulted in deterioration in expected macroeconomic drivers in our CECL modeling, resulting in additional provision for credit losses of $56.6 million and a significant increase to the allowance for credit losses.
The following table summarizes credit quality metrics as of and for the period ended March 31, 2020. Most credit metrics were stable in comparison with 4Q 2019. Since the close of the Beneficial combination on March 1, 2019, we have reduced problem assets, which includes all criticized, classified, and nonperforming loans as well as other real estate owned (OREO), by 11% and nonperforming assets by 23%, providing a strong foundation prior to the expected deterioration of economic conditions as a result of COVID-19. Net charge-offs for 1Q 2020 were a low $0.8 million, or 0.04% (annualized), of average gross loans and included a $2.6 million partial recovery of prior period charges from a C&I relationship. Excluding nonperforming delinquencies, performing loan delinquencies were 0.61% of gross loans at March 31, 2020, compared to 0.57% at December 31, 2019. Included in total delinquencies were $21.5 million of delinquent, but still accruing, U.S. government-guaranteed student loans that carry little risk of credit loss.
(Dollars in millions)
March 31, 2020
December 31, 2019
March 31, 2019
Problem assets $221.9  $238.6  $248.3  
Nonperforming assets38.1  39.8  49.3  
Delinquencies59.8  61.1  71.9  
Net charge-offs0.8  1.7  0.9  
Total credit costs (r)57.1  2.7  7.9  
Problem assets to total Tier 1 capital plus ALLL14.68 %16.89 %20.04 %
Classified assets to total Tier 1 capital plus ALLL12.64  13.15  14.56  
Ratio of nonperforming assets to total assets0.31  0.32  0.40  
Ratio of nonperforming assets (excluding accruing TDRs) to total assets0.20  0.21  0.28  
Delinquencies to gross loans0.69  0.72  0.83  
Ratio of quarterly net charge-offs to average gross loans0.04  0.08  0.06  
Ratio of allowance for credit losses to total loans and leases (q) 1.60  0.56  0.53  
Ratio of allowance for credit losses to nonaccruing loans723  208  145  



https://cdn.kscope.io/c1c95dae1dbe9783666a54bb2f98edcf-wsfscorp21.jpg
WSFS Bank Center
8
500 Delaware Avenue,
Wilmington, Delaware 19801
Core Fee Income
Core fee income (noninterest income) was $39.5 million, an increase of $2.2 million, or 6%, compared to 1Q 2019, including an increase of $1.9 million from traditional banking-related fee income, primarily related to the full quarter impact of the Beneficial combination and a $1.4 million increase from our mortgage banking business due to increased volume primarily from refinancings resulting from the lower interest rate environment. Partially offsetting these increases was a $0.7 million decrease in cash logistics services (Cash Connect®), which was primarily due to the lower interest rate environment and fully offset by lower funding costs, and $0.7 million, net, from fee recognition in the prior year quarter related to the functional sale of certain Wealth Management accounts.
Core fee income decreased $2.0 million, or 5%, compared to 4Q 2019, and included $0.7 million of one-time items that reduced fee income during the quarter. Excluding these one-time items, core fee income decreased $1.3 million, or 3%, including a decrease of $1.1 million in traditional banking-related fee income, primarily related to lower seasonal transactional volume and the impact of COVID-19 late in the quarter, and a $0.8 million decrease in Cash Connect® bailment revenue due to the significant decline in interest rates during the quarter fully offset by lower funding costs. These decreases are partially offset by a $0.5 million increase from our mortgage banking business, for the reasons described above.
For 1Q 2020, core fee income was 25.3% of core net revenue, compared to 30.9% for 1Q 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 decline primarily reflects the full quarter effect of our combination with Beneficial, which had lower fee income.


https://cdn.kscope.io/c1c95dae1dbe9783666a54bb2f98edcf-wsfscorp21.jpg
WSFS Bank Center
9
500 Delaware Avenue,
Wilmington, Delaware 19801
Core Noninterest Expenses
Our core efficiency ratio was 54.0% in 1Q 2020, compared to 58.0% in 4Q 2019 and 55.1% in 1Q 2019.
Core noninterest expense for 1Q 2020 was $84.2 million, an increase of $17.6 million, or 26%, from $66.6 million in 1Q 2019, primarily due to a full quarter impact from our combination with Beneficial and other franchise growth offset by cost synergies achieved over the last year.
When compared to 4Q 2019, core noninterest expense decreased $8.3 million, or 9% (not annualized). The quarter-over-quarter decrease reflected two outsized items from the previous quarter, including $1.8 million related to the transition of our former Executive Chairman of the Board of Directors and $1.1 million from damage resulting from a fire at a branch location, for which we are actively working with insurance carriers to recover the loss. In addition, 1Q 2020 included $4.0 million of lower incentive compensation costs, primarily due to higher year-end accruals in the prior quarter; $1.1 million of lower cash logistics services (Cash Connect®) expenses, and; $0.9 million of lower marketing costs.
Income Taxes
We recorded a $1.3 million income tax provision in 1Q 2020, compared to provisions of $14.2 million in 4Q 2019 and $6.3 million in 1Q 2019.
The effective tax rate was 10.9% in 1Q 2020, 23.8% in 4Q 2019, and 32.6% in 1Q 2019. The lower tax rate in 1Q 2020 compared to 4Q 2019 and 1Q 2019 primarily reflects a one-time tax benefit of $1.8 million related to certain favorable income tax provisions contained in the CARES Act passed during the quarter, as well as nondeductible expenses associated with the acquisition of Beneficial incurred during 1Q 2019.


https://cdn.kscope.io/c1c95dae1dbe9783666a54bb2f98edcf-wsfscorp21.jpg
WSFS Bank Center
10
500 Delaware Avenue,
Wilmington, Delaware 19801
Capital Management
WSFS’ total stockholders’ equity decreased $15.7 million, or less than 1% (not annualized), during 1Q 2020, primarily due to the adoption of CECL, share repurchases, and the dividend on common stock paid during the quarter, partially offset by the effect of quarterly earnings and market value changes on available-for-sale securities.
WSFS’ tangible common equity(4) decreased $12.7 million, or less than 1% (not annualized) compared to December 31, 2019 for the reasons described in the paragraph above. WSFS’ common equity to assets ratio was 14.94% at March 31, 2020, and our tangible common equity to tangible assets ratio(4) decreased by 14 bps during the quarter to 10.83%.
At March 31, 2020, book value per share was $36.23, an increase of $0.35, or 1%, from December 31, 2019, and tangible common book value per share(4) was $25.06, an increase of $0.21, or 1%, from December 31, 2019.
At March 31, 2020, WSFS Bank’s Tier 1 leverage ratio of 11.85%, Common Equity Tier 1 capital ratio and Tier 1 capital ratio of 13.41%, and Total Capital ratio of 14.53% 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 May 22, 2020 to stockholders of record as of May 8, 2020.
WSFS repurchased 1,004,348 shares of common stock at an average price of $38.53 during 1Q 2020, completing our share repurchase program approved by the Board of Directors in 1Q 2019. During the quarter, the Board approved a new share repurchase authorization of 15% of outstanding shares as of March 31, 2020; however, we have temporarily suspended all share repurchases until we have a clearer view of the impact of COVID-19 on the economy and our performance.









(4) 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 measures exclude goodwill and intangible assets and the related tax-effected amortization. For a reconciliation of these and other non-GAAP measures to their comparable GAAP measures, see pages 20 and 21 of this press release.


https://cdn.kscope.io/c1c95dae1dbe9783666a54bb2f98edcf-wsfscorp21.jpg
WSFS Bank Center
11
500 Delaware Avenue,
Wilmington, Delaware 19801
Selected Business Segments (included in previous results):
Wealth Management
The Wealth Management segment provides a broad array of planning and advisory services, investment management, trust services, and credit and deposit products to individual, corporate, and institutional clients through multiple integrated businesses. Combined, these businesses had $21.1 billion in assets under management (AUM) and assets under administration (AUA) as of March 31, 2020. 
Wealth Management reported pre-tax income of $3.8 million in 1Q 2020 compared to $7.2 million in 1Q 2019, and $5.2 million in 4Q 2019. Results were impacted by elevated provision expense on our Private Banking portfolio as a result of our adoption of CECL and the lower interest rate environment. Provision expense was $1.6 million in 1Q 2020, a $1.2 million increase compared to 1Q 2019 and a $1.4 million increase compared to 4Q 2019.
Total Wealth Management revenue (net interest income and fee income) was $14.7 million for 1Q 2020, a decrease of $1.2 million, or 8%, compared to 1Q 2019. The decrease included $0.8 million of lower net interest income due to the lower rate environment and the functional sale of certain wealth management accounts for $0.7 million, net, in 1Q 2019. Excluding the sale in the prior year quarter, core fee income grew by $0.7 million, or 7%, due to continued strength in our trust services business, which grew by 6%. Our AUM businesses also generated higher year-over-year investment advisory fees, benefiting from improvements in market valuations and strong net inflows (advisory fees are billed based on prior quarter AUM). Excluding the referenced sale, AUM revenue grew $0.4 million, or 14%. Compared to 4Q 2019, revenue decreased $0.6 million, or 4%, primarily due to the lower net interest income resulting from the lower interest rate environment.
Net interest income was $3.4 million for 1Q 2020, a decrease of $0.8 million, or 19% compared to 1Q 2019 due to the lower interest rate environment, and despite year-over-year growth in the balance sheet. Loan balances grew by $8.6 million, or 4% and deposits grew by $10.5 million, or 2% compared to 1Q 2019. Compared to 4Q 2019, net interest income decreased $0.4 million, or 11% which was due primarily to spread compression on deposits of approximately 23 bps.
Total noninterest expense (including intercompany allocations and excluding provision for credit losses) was $9.4 million in 1Q 2020, an increase of $1.0 million compared to 1Q 2019 and a decrease of $0.5 million compared to 4Q 2019. The year-over-year increase was driven by higher compensation costs, resulting from the addition of six wealth advisors and three private bankers to support our expansion into the Pennsylvania and New Jersey markets and higher variable incentive compensation costs.


https://cdn.kscope.io/c1c95dae1dbe9783666a54bb2f98edcf-wsfscorp21.jpg
WSFS Bank Center
12
500 Delaware Avenue,
Wilmington, Delaware 19801
Cash Connect®
Cash Connect® is a premier provider of ATM vault cash, smart safe and cash logistics services in the United States. Cash Connect® services approximately 31,000 non-bank ATMs and retail safes nationwide supplying or servicing over $1.3 billion in cash at March 31, 2020 and provides other fee-based services. Cash Connect® also operates 470 ATMs for WSFS Bank, which is one of the largest branded ATM networks in our market.
Cash Connect® reported pre-tax income of $2.0 million and ROA of 1.84% for 1Q 2020. Pre-tax income increased $0.5 million, or 38%, compared to 1Q 2019, and increased $0.9 million compared to 4Q 2019, primarily due to a mix shift from lower yielding to higher yielding business and additional non-asset based fee business, and continued growth in our remote cash capture business. ROA in 1Q 2020 improved 79 bps from 1Q 2019 and 78 bps from 4Q 2019.
Net revenue (fee income less funding costs) was $11.0 million in 1Q 2020, an increase of 9% from 1Q 2019. This growth was driven by a 7% increase in the number of units serviced and a significant shift to higher margin services and non-asset based fees, including a 53% increase in remote cash capture devices (smart safes) and a 26% increase of ATMs utilizing our reconciliation services (non-bailment Customer). Compared to 4Q 2019, net revenue decreased $0.3 million, or 3% (not annualized), primarily due to lower bailment revenue resulting from the lower interest rate environment offset by lower cost of funds, and a reduction of $0.5 million of third-party funding costs in noninterest expense. Cash Connect®’s total units serviced increased 2% quarter over quarter (not annualized).
Noninterest expense (including intercompany allocations of expense) was $9.0 million in 1Q 2020, an increase of $0.4 million compared to 1Q 2019 and a decrease of $1.2 million compared to 4Q 2019. The increase in expenses compared to 1Q 2019 was primarily due to higher operating costs associated with increased revenue, offset by lower funding costs. The $1.2 million decrease versus prior quarter primarily resulted from leadership transition costs occurring in 4Q 2019 and lower funding costs due to rate decreases.
During 1Q 2020, the division continued its focus on expanding smart safe and ATM managed services to increase fee income and margin. Cash Connect® drove strong growth in the strategic Remote Cash Capture (smart safe, recycler and kiosk) space with approximately 3,700 devices under service, an increase of over 450 units during the quarter. Our pipeline remains strong as we add new channel partners, including top financial institutions which have brought us significant national opportunities. We are continuing to deploy new ATM and safe devices during the COVID-19 pandemic and anticipate rollouts to increase when businesses reopen nationwide.


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WSFS Bank Center
13
500 Delaware Avenue,
Wilmington, Delaware 19801
First Quarter 2020 Earnings Release Conference Call and Supplemental Materials
Management will conduct a conference call to review 1Q 2020 results at 1:00 p.m. Eastern Time (ET) on Tuesday, April 28, 2020. Interested parties may listen to this call by dialing 1-877-312-5857 and using Conference ID #9227636. A rebroadcast of the conference call will be available beginning at 4:00 p.m. ET on April 28, 2020 until May 9, 2020 at 4:00 p.m. ET by dialing 1-855-859-2056 and using Conference ID #9227636.
We have provided additional information in the 1Q 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 March 31, 2020, WSFS Financial Corporation had $12.3 billion in assets on its balance sheet and $21.1 billion in assets under management and administration. WSFS operates from 116 offices, 91 of which are banking offices, located in Pennsylvania (54), Delaware (44), 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 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.


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WSFS Bank Center
14
500 Delaware Avenue,
Wilmington, Delaware 19801
Forward-Looking Statement Disclaimer
This press release contains estimates, predictions, opinions, projections and other "forward-looking statements" as that phrase is defined in the Private Securities Litigation Reform Act of 1995. Such statements include, without limitation, references to the Company's predictions or expectations of future business or financial performance as well as its goals and objectives for future operations, financial and business trends, business prospects, and management's outlook or expectations for earnings, revenues, expenses, capital levels, liquidity levels, asset quality or other future financial or business performance, strategies or expectations. The words “believe,” “expect,” “anticipate,” “plan,” “estimate,” “target,” “project” and similar expressions, among others, generally identify forward-looking statements. Such forward-looking statements are based on various assumptions (some of which may be beyond the Company's control) and are subject to risks and uncertainties (which change over time) and other factors which could cause actual results to differ materially from those currently anticipated. Such risks and uncertainties include, but are not limited to, those related to the effects of the COVID-19 pandemic and actions taken in response thereto, including difficult market conditions and significant 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 a likely economic recession, declines in housing markets, and significant increase in unemployment levels and substantial slowdowns in economic growth; the Company's level of credit expenses and 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, particularly as a result of the policies and programs implemented by the CARES Act, including its automatic loan forbearance provisions; 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 (the Dodd-Frank Act) the Economic Growth, Regulatory Relief, and Consumer Protection Act (which amended the Dodd-Frank Act), and the rules and regulations issued in accordance therewith 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 and the effect of our transition to the CECL methodology for allowances and related adjustments), 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; conditions in the financial markets, including the destabilized economic environment caused by the COVID-19 outbreak, that may limit the Company's access to additional funding to meet its liquidity needs; the success of the Company's growth plans, including our plans to grow the commercial small business leasing portfolio and residential mortgage small business and Small Business Administration (SBA) portfolios following our acquisition of Beneficial; 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'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; 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; 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 outbreak, 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, 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 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
15
500 Delaware Avenue,
Wilmington, Delaware 19801
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS
SUMMARY STATEMENTS OF INCOME (Unaudited)
Three months ended
(Dollars in thousands, except per share data)March 31, 2020December 31, 2019March 31, 2019
Interest income:
Interest and fees on loans $119,202  $122,302  $87,117  
Interest on mortgage-backed securities13,219  13,270  10,466  
Interest and dividends on investment securities926  973  1,044  
Other interest income508  805  950  
133,855  137,350  99,577  
Interest expense:
Interest on deposits14,637  16,159  10,942  
Interest on Federal Home Loan Bank advances830  1,025  2,590  
Interest on senior debt1,179  1,179  1,179  
Interest on trust preferred borrowings586  636  726  
Interest on other borrowings473  782  826  
17,705  19,781  16,263  
Net interest income116,150  117,569  83,314  
Provision for credit losses56,646  1,590  7,654  
Net interest income after provision for credit losses59,504  115,979  75,660  
Noninterest income:
Credit/debit card and ATM income11,359  12,076  11,515  
Investment management and fiduciary revenue10,962  11,462  10,147  
Deposit service charges5,647  5,984  4,746  
Mortgage banking activities, net3,471  2,963  2,092  
Loan and lease fee income1,119  1,219  885  
Securities gains, net693  255  15  
Unrealized gain on equity investment, net668  —  3,798  
Bank-owned life insurance income(25) 370  217  
Other income6,953  7,441  7,707  
40,847  41,770  41,122  
Noninterest expense:
Salaries, benefits and other compensation45,346  48,895  36,205  
Occupancy expense7,666  8,806  6,367  
Equipment expense4,964  5,882  3,989  
Data processing and operations expense
3,078  3,193  2,588  
Professional fees
4,600  3,200  1,872  
Marketing expense951  1,804  1,590  
FDIC expenses(54) 48  620  
Loan workout and OREO expense674  893  108  
Corporate development expense1,341  4,607  26,627  
Restructuring expense—  1,530  4,362  
Recovery of fraud loss—  (463) —  
Other operating expenses19,930  19,731  13,264  
88,496  98,126  97,592  
Income before taxes11,855  59,623  19,190  
Income tax provision1,288  14,199  6,260  
Net income$10,567  $45,424  $12,930  
Less: Net loss attributable to noncontrolling interest(360) (280) (93) 
Net income attributable to WSFS$10,927  $45,704  $13,023  
Diluted earnings per share of common stock:$0.21  $0.88  $0.33  
Weighted average shares of common stock outstanding for fully diluted EPS51,164,224  52,164,692  39,284,057  
See “Notes”


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WSFS Bank Center
16
500 Delaware Avenue,
Wilmington, Delaware 19801
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS
SUMMARY STATEMENTS OF INCOME (Unaudited) - continued
Three months ended
 March 31, 2020December 31, 2019March 31, 2019
Performance Ratios:
Return on average assets (a)0.36 %1.48 %0.58 %
Return on average equity (a)2.39  9.77  4.54  
Return on average tangible common equity (a)(o)4.13  14.76  6.77  
Net interest margin (a)(b)4.38  4.35  4.30  
Efficiency ratio (c)56.27  61.47  78.23  
Noninterest income as a percentage of total net revenue (b)25.97  26.17  32.96  
See “Notes”



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WSFS Bank Center
17
500 Delaware Avenue,
Wilmington, Delaware 19801
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
SUMMARY STATEMENTS OF FINANCIAL CONDITION (Unaudited)
(Dollars in thousands)March 31, 2020December 31, 2019March 31, 2019
Assets:
Cash and due from banks$182,125  $164,021  $190,611  
Cash in non-owned ATMs322,844  407,524  457,046  
Investment securities (d)134,047  133,601  148,190  
Other investments104,843  91,350  61,034  
Mortgage-backed securities (d)2,048,400  1,944,914  1,523,196  
Net loans (e)(f)(l)8,497,147  8,508,336  8,689,497  
Bank owned life insurance30,093  30,294  89,449  
Goodwill and intangibles565,763  568,745  580,263  
Other assets393,628  407,517  445,131  
Total assets$12,278,890  $12,256,302  $12,184,417  
Liabilities and Stockholders’ Equity:
Noninterest-bearing deposits$2,314,982  $2,189,573  $2,191,321  
Interest-bearing deposits7,109,396  7,149,523  7,166,728  
Total customer deposits9,424,378  9,339,096  9,358,049  
Brokered deposits284,976  247,761  315,655  
Total deposits9,709,354  9,586,857  9,673,704  
Federal Home Loan Bank advances119,971  112,675  81,240  
Other borrowings281,314  376,613  325,128  
Other liabilities334,832  330,666  314,668  
Total liabilities10,445,471  10,406,811  10,394,740  
Stockholders’ equity of WSFS1,834,594  1,850,306  1,789,752  
Noncontrolling interest(1,175) (815) (75) 
Total stockholders' equity1,833,419  1,849,491  1,789,677  
Total liabilities and stockholders' equity$12,278,890  $12,256,302  $12,184,417  
Capital Ratios:
Equity to asset ratio14.94 %15.10 %14.69 %
Tangible common equity to tangible asset ratio (o)10.83  10.97  10.42  
Common equity Tier 1 capital (required: 4.5%; well capitalized: 6.5%) (g)13.41  13.52  11.73  
Tier 1 leverage (required: 4.00%; well-capitalized: 5.00%) (g)11.85  11.72  14.00  
Tier 1 risk-based capital (required: 6.00%; well-capitalized: 8.00%) (g)13.41  13.52  11.73  
Total Risk-based capital (required: 8.00%; well-capitalized: 10.00%) (g)14.53  14.01  12.20  
Asset Quality Indicators:
Nonperforming Assets:
Nonaccruing loans$19,236  $22,922  $32,038  
Troubled debt restructuring (accruing)14,070  14,281  14,995  
Assets acquired through foreclosure4,825  2,605  2,233  
Total nonperforming assets$38,131  $39,808  $49,266  
Past due loans (h)$14,282  $16,150  $11,752  
Allowance for credit losses139,081  47,576  46,321  
Ratio of nonperforming assets to total assets0.31 %0.32 %0.40 %
Ratio of nonperforming assets (excluding accruing TDRs) to total assets0.20  0.21  0.28  
Ratio of allowance for credit losses to total loans and leases (q)1.60  0.56  0.53  
Ratio of allowance for credit losses to nonaccruing loans723  208  145  
Ratio of quarterly net charge-offs to average gross loans (a)(e)(i)(n)0.04  0.08  0.06  
Ratio of year-to-date net charge-offs to average gross loans (a)(e)(i)(n)0.04  0.22  0.06  
See “Notes”


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WSFS Bank Center
18
500 Delaware Avenue,
Wilmington, Delaware 19801
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued) 
AVERAGE BALANCE SHEET (Unaudited)
(Dollars in thousands)Three months ended
 March 31, 2020December 31, 2019March 31, 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$2,808,867  $34,292  4.91 %$2,768,893  $36,016  5.16 %$1,970,030  $26,604  5.48 %
Residential real estate loans992,408  13,541  5.46  1,029,469  14,344  5.57  528,686  7,601  5.75  
Commercial loans (p)3,533,626  55,693  6.35  3,549,692  55,725  6.24  2,854,458  41,146  5.86  
Consumer loans1,130,223  14,935  5.31  1,141,969  15,532  5.40  842,543  11,468  5.52  
Loans held for sale69,884  741  4.26  69,204  685  3.93  20,482  298  5.90  
Total loans8,535,008  119,202  5.62  8,559,227  122,302  5.67  6,216,199  87,117  5.69  
Mortgage-backed securities (d)1,959,637  13,219  2.70  1,934,750  13,270  2.74  1,437,159  10,466  2.91  
Investment securities (d)131,121  926  3.40  134,494  973  3.41  149,127  1,044  3.40  
Other interest-earning assets76,356  508  2.68  111,276  805  2.87  79,015  950  4.88  
Total interest-earning assets10,702,122  133,855  5.04 %10,739,747  137,350  5.08 %7,881,500  99,577  5.14 %
Allowance for credit losses(85,055) (47,136) (40,433) 
Cash and due from banks139,836  110,997  107,845  
Cash in non-owned ATMs335,434  357,869  427,890  
Bank owned life insurance30,154  30,838  35,058  
Other noninterest-earning assets1,037,033  1,033,847  687,316  
Total assets$12,159,524  $12,226,162  $9,099,176  
Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
Interest-bearing demand$2,085,229  $1,897  0.37 %$2,134,950  $2,405  0.45 %$1,383,088  $1,736  0.51 %
Money market2,152,986  4,090  0.76  2,005,696  4,363  0.86  1,647,032  3,840  0.95  
Savings1,574,215  1,744  0.45  1,556,488  2,104  0.54  947,170  871  0.37  
Customer time deposits1,305,432  5,655  1.74  1,337,387  5,827  1.73  972,458  3,264  1.36  
Total interest-bearing customer deposits7,117,862  13,386  0.76  7,034,521  14,699  0.83  4,949,748  9,711  0.80  
Brokered deposits230,423  1,251  2.18  248,824  1,460  2.33  213,675  1,231  2.34  
Total interest-bearing deposits7,348,285  14,637  0.80  7,283,345  16,159  0.88  5,163,423  10,942  0.86  
FHLB of Pittsburgh advances170,058  830  1.96  183,925  1,025  2.21  403,961  2,590  2.60  
Trust preferred borrowings67,011  586  3.52  67,011  636  3.77  67,011  726  4.39  
Senior debt98,627  1,179  4.78  98,573  1,179  4.78  98,410  1,179  4.79  
Other borrowed funds148,256  473  1.28  199,145  782  1.56  173,253  826  1.93  
Total interest-bearing liabilities7,832,237  17,705  0.91 %7,831,999  19,781  1.00 %5,906,058  16,263  1.12 %
Noninterest-bearing demand deposits2,166,510  2,217,023  1,768,570  
Other noninterest-bearing liabilities326,185  321,432  262,004  
Stockholders’ equity of WSFS1,835,501  1,856,311  1,162,591  
Noncontrolling interest(909) (603) (47) 
Total liabilities and equity$12,159,524  $12,226,162  $9,099,176  
Excess of interest-earning assets over interest-bearing liabilities$2,869,885  $2,907,748  $1,975,442  
Net interest and dividend income$116,150  $117,569  $83,314  
Interest rate spread4.13 %4.08 %4.02 %
Net interest margin4.38 %4.35 %4.30 %
See “Notes”


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WSFS Bank Center
19
500 Delaware Avenue,
Wilmington, Delaware 19801
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
(Unaudited)
 
(Dollars in thousands, except per share data)Three months ended
Stock Information:March 31, 2020December 31, 2019March 31, 2019
Market price of common stock:
High$44.70$45.93$45.13
Low17.8441.6837.19
Close24.9243.9938.60
Book value per share of common stock36.2335.8833.69
Tangible common book value per share of common stock (o)25.0624.8522.77
Number of shares of common stock outstanding (000s)50,63351,56753,128
Other Financial Data:
One-year repricing gap to total assets (k)2.38%(2.06)%(4.28)%
Weighted average duration of the MBS portfolio2.2 years3.7 years4.2 years
Unrealized gains on securities available for sale, net of taxes$72,436$26,927$2,700
Number of Associates (FTEs) (m)1,7911,7821,903
Number of offices (branches, LPO’s, operations centers, etc.)116118152
Number of WSFS owned and branded ATMs470473507
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. Beginning in 1Q 2019, 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 (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 and other non-GAAP measures to their comparable GAAP measures, see pages 20 and 21 of this 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.




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WSFS Bank Center
20
500 Delaware Avenue,
Wilmington, Delaware 19801
WSFS FINANCIAL CORPORATION 
FINANCIAL HIGHLIGHTS (Continued)
(Dollars in thousands, except per share data)
(Unaudited)
 
Non-GAAP Reconciliation (o):Three months ended
 March 31, 2020December 31, 2019March 31, 2019
Net interest income (GAAP)$116,150  $117,569  $83,314  
Core net interest income (non-GAAP)$116,150  $117,569  $83,314  
Noninterest income (GAAP)$40,847  $41,770  $41,122  
Less: Securities gains693  255  15  
Less: Unrealized gains on equity investments, net668  —  3,798  
Core fee income (non-GAAP)$39,486