WSFS Reports EPS of $0.58, a 35% Increase Over the 2nd Quarter of 2015; and ROA of 1.23%, ROE of 11.6% and ROTCE of 14.0% for the 2nd Quarter of 2016; All Driven by Strong Growth in Revenue

WILMINGTON, Del., July 28, 2016 (GLOBE NEWSWIRE) -- WSFS Financial Corporation (Nasdaq:WSFS), the parent company of WSFS Bank, reported net income of $17.5 million, or $0.58 per diluted common share for the second quarter of 2016 compared to net income of $12.2 million, or $0.43 per share for the second quarter of 2015 and net income of $15.8 million, or $0.52 per share for the first quarter of 2016.

Results for the second quarter of 2016 (compared to the same period of 2015) reflect net revenues of $71.3 million, or an increase of $9.7 million, net interest income of $46.4 million, or an increase of $7.3 million, noninterest income of $24.8 million, or an increase of $2.4 million and noninterest expenses of $44.0 million, or an increase of $5.4 million.

Highlights for the second quarter of 2016:

  • Core earnings per share(1) (enumerated below) of $0.58 increased 32% from $0.44 for the second quarter of 2015; and core return on average assets(1) (ROA) increased 23% to 1.23% from 1.00% for the second quarter of 2015.
  • Core net revenue(1) increased $9.6 million, or 16% from the second quarter of 2015, including a $7.3 million, or 19% increase in core net interest income(1) and a $2.3 million, or 11% increase in core fee income(1), reflecting growth across all business lines.
  • Commercial loans grew at a 5% annualized rate led by 13% annualized growth in Commercial and Industrial (C&I) lending, reflecting continued success in winning good market share.
  • On June 13, 2016, WSFS issued $100.0 million in aggregate principal amount of 4.50% fixed-to-floating rate senior unsecured notes due 2026 with a Kroll Bond Rating Agency debt rating of A-. The Company intends to use the net proceeds from the offering for general corporate purposes, including redemption of higher-cost indebtedness, organic growth, acquisitions and repurchases of common stock.

1 ROTCE, core earnings per share, core return on average assets, core net revenue, core net interest income, and core fee income are non-GAAP financial measures. A reconciliation of these measures to their comparable GAAP measures is included at the end of this press release.

Notable items in the quarter:

  • WSFS recorded $549,000 (pre-tax), or $0.01 per share (after-tax) in expenses related to corporate development (M&A) activities during the second quarter of 2016, mostly related to the acquisition of Penn Liberty Bank, which is scheduled to close on August 12, 2016. WSFS recorded $0.02 per share in corporate development costs in the second quarter of 2015.
  • WSFS realized $545,000, or $0.01 per share in net gains on securities sales from its investment portfolio during the second quarter of 2016, compared to $477,000, or $0.01 per share in the second quarter of 2015.
  • WSFS recorded a legal reserve of $950,000, or $0.02 per share during the second quarter of 2016 related to the expected settlement of a legal matter initiated in 2011.
  • As a result of adopting the required ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, WSFS recognized a tax benefit of $688,000, or $0.02 per share during the second quarter of 2016.

CEO outlook and commentary:
Mark A. Turner, President and CEO, said, “Our strong second quarter 2016 results reflect solid fundamental performance and the continued success of our balanced growth strategy. Growth in earnings came from all of our business lines, and our strong net interest income performance reflects our disciplined approach to loan and deposit growth while maintaining our margins in this highly competitive market. We reported a core ROA of 1.23% or an increase of 23% from the same period last year and core EPS of $0.58, an increase of 32% from the second quarter of 2015, which is excellent progress towards our 2016 and strategic plan goals.

“Our second quarter results showed 4 percentage points of positive operating leverage and an efficiency ratio of 59.5% as our robust growth in core net revenues was greater than our growth in core noninterest expenses excluding the one-time legal reserve taken this quarter.

“In August we expect to complete our previously announced merger with Penn Liberty Bank in southeastern Pennsylvania. This would represent our 4th acquisition in 4 years, including 3 strong local community institutions in the last 3 years, expanding our product offerings and geographic footprint.

“During the quarter we also received the 2016 Gallup Great Workplace Award, which further demonstrates our commitment to, and the success of, our strategy of ‘Engaged Associates delivering Stellar Experiences growing Customer Advocates and value for our Owners’.”

Second Quarter 2016 Discussion of Financial Results
Continued solid growth in net interest income
Net interest income for the second quarter of 2016 was $46.4 million, an increase of $7.3 million, or 19% compared to the second quarter of 2015. The net interest margin increased 19 basis points (bps) to 3.90% over the previous year. These year-over-year increases in margin dollars and percentages reflect the impact of organic and acquisition growth, continued pricing discipline while improving balance sheet mix and positive performance of purchased loans and reverse mortgages.

Compared to the first quarter of 2016, net interest income increased $1.1 million, or 2% (not annualized), and net interest margin increased 3bps. The main driver of this increase was higher reverse mortgage income and improved mix.

Loan Portfolio growth includes a 13% annualized increase in C&I loans
Net loans at June 30, 2016 were $3.83 billion, an increase of $40.0 million, or 4% (annualized) over March 31, 2016. The growth in loans was the result of a 13% (annualized) increase in C&I loans ($64.0 million) and a 17% (annualized) increase in Consumer loans ($15.1 million) which were partially offset by a decline in Construction loans due to expected payoff activity in this portfolio.

Compared to the second quarter of 2015, net loans increased $490.3 million or 15%. This strong year-over-year loan growth was spread across most loan categories and included the loans from the acquisition of Alliance Bank in late 2015 and continued healthy organic growth of $215.6 million, or 6%.

The following table summarizes loan balances and composition at June 30, 2016 compared to prior periods:

At At At
(Dollars in Thousands)June 30, 2016 March 31, 2016 June 30, 2015
Commercial & industrial$ 2,044,802 53 %$ 1,980,780 52 %$ 1,728,457 52 %
Commercial real estate 983,116 26 980,045 26 864,053 25
Construction 197,461 5 225,699 6 200,328 6
Total commercial loans 3,225,379 84 3,186,524 84 2,792,838 83
Residential mortgage 269,928 7 283,765 7 261,703 8
Consumer 376,304 10 361,174 10 329,874 10
Allowance for loan losses (37,746) (1) (37,556) (1) (40,845) (1)
Net Loans$ 3,833,865 100 %$ 3,793,907 100 %$ 3,343,570 100 %


Credit quality continues favorable trends

Credit quality metrics continued favorable trends and remained at or near historically strong levels. Total nonperforming assets were $31.6 million at June 30, 2016, a $6.1 million, or 16% (not annualized) improvement from March 31, 2016, mainly driven by a reduction in nonaccruing loans. The nonperforming assets to total assets ratio improved to 0.54% at June 30, 2016 from 0.66% at March 31, 2016.

Delinquencies increased $1.8 million from March 31, 2016 to $24.7 million, but remained a very low 0.64% of gross loans (which includes nonperforming delinquencies) at June 30, 2016.

Net charge-offs for the second quarter of 2016 were $1.1 million, or only 11bps of total net loans on an annualized basis, an increase from $313,000, or 3bps (annualized) in the first quarter of 2016, and a decrease from $2.5 million, or 30bps (annualized), in the second quarter of 2015.

Total credit costs (provision for loan losses, loan workout expenses, OREO expenses and other credit reserves) were $1.3 million for both the quarter ended June 30, 2016 and the quarter ended March 31, 2016 and decreased $2.8 million from the second quarter of 2015, which included a large provision expense for one C&I loan that was fully resolved in the second quarter of 2016.

The ratio of the allowance for loan losses (“ALLL”) to total gross loans was 0.98% at June 30, 2016, approximately equal to 0.99% at March 31, 2016. Excluding the balances for acquired loans (marked-to-market at acquisition), the ALLL to total gross loans ratio would have been 1.09% at June 30, 2016 and 1.10% at March 31, 2016. The ALLL increased to 259% of nonaccruing loans at June 30, 2016 from 190% at March 31, 2016.

Customer funding reflects impact of public funding balances
Total customer funding was $3.84 billion at June 30, 2016, a $39.0 million decrease from March 31, 2016 which included a $29.5 million seasonal decrease in public funding account balances and the purposeful decrease of $20.5 million in higher-cost CDs during the quarter. These factors were partially offset by a $22.1 million, or 5% (annualized) growth in low-cost relationship checking deposit accounts.

Compared to June 30, 2015, total customer funding increased $487.2 million, or 15%.
In addition to the deposits gained from the acquisition of Alliance Bank, organic customer funding growth was $166.5 million, or 5% year-over-year.

At June 30, 2016 core deposits represented a robust 85% of total customer funding, and low-cost relationship checking deposit accounts represented 46% of total customer funding. The loan to customer funding ratio was also a healthy 101% at June 30, 2016.

The following table summarizes customer funding balances and composition at June 30, 2016 compared to prior periods:

At At At
(Dollars in thousands) June 30, 2016 March 31, 2016 June 30, 2015
Noninterest demand $ 977,154 25% $ 964,487 25% $ 875,955 26%
Interest-bearing demand 796,294 21 786,780 20 697,365 21
Savings 427,843 11 449,061 11 419,864 13
Money market 1,091,306 28 1,107,421 29 926,583 27
Total core deposits 3,292,597 85 3,307,749 85 2,919,767 87
Customer time 540,418 14 560,939 14 423,066 12
Total customer deposits 3,833,015 99 3,868,688 99 3,342,833 99
Customer sweep accounts 11,445 1 14,753 1 14,433 1
Total customer funding$ 3,844,460 100% $ 3,883,441 100% $ 3,357,266 100%


Double-digit growth continued in fee income over prior year
Core fee income (noninterest income)(2) increased $2.3 million, or 11% when compared to the same period a year ago. This came from across-the-board growth, including a $791,000 increase in credit/debit card and ATM income mainly from growth in CashConnect (our ATM division) as well as increases in our Wealth division which drove a $575,000 increase in investment management and fiduciary revenue. Additionally, deposit service charges grew $243,000 and strong growth in WSFS Mortgage, our residential mortgage loan origination business, drove a $226,000 increase in mortgage banking activities over the prior year.

Compared to the first quarter of 2016, core fee income increased $1.5 million, or 7% (not annualized). Key growth drivers included an increase of $1.0 million in investment management and fiduciary revenue driven by seasonal client tax return preparation fees, an increase in credit/debit card and ATM income of $352,000, and an increase in mortgage banking activities of $162,000.

Our fee income for the second quarter of 2016 is a robust 35% of total revenue and our performance reflects continued strength and diversity of our revenue streams.

Noninterest expense reflects franchise and organic growth
Core noninterest expense(2) for the second quarter of 2016 was $43.5 million, an increase of $5.5 million when compared to the second quarter of 2015. Contributing to the year-over-year increase was $1.4 million of ongoing operating costs from the addition of the Alliance franchise as well as the previously mentioned legal reserve of $950,000 recorded during the second quarter of 2016. The remaining increase reflects higher compensation and related costs due to both added staff to support the significant organic and acquisition growth and increased performance-based incentive costs.

Core noninterest expense increased $848,000 when compared to the first quarter of 2016. Excluding the one-time legal reserve, expenses actually decreased by $102,000 as the first quarter included customary seasonal items in salaries, benefits and other compensation as well as occupancy-related costs that are typically higher in the first quarter of each year.

2 Core fee income and core noninterest expense are non-GAAP financial measures. A reconciliation of these measures to their comparable GAAP measures is included at the end of this press release.

Selected Business Segments (included in previous results):

Wealth Management segment fee revenue grew 11% over the prior year
The Wealth Management segment provides a broad array of fiduciary, investment management, credit and deposit products to clients through four businesses. WSFS Wealth Investments provides insurance and brokerage products primarily to our retail banking clients. Cypress Capital Management, LLC is a registered investment advisor with approximately $649 million in assets under management (AUM). Cypress’ primary market segment is high net worth individuals, offering a “balanced” investment style focused on preservation of capital and providing for current income. Christiana Trust, with $12.7 billion in assets under management and administration, provides fiduciary and investment services to personal trust clients, and trustee, agency, bankruptcy administration, custodial and commercial domicile services to corporate and institutional clients. WSFS Private Banking serves high net worth clients by delivering credit and deposit products and partnering with other business units to deliver investment management and fiduciary products and services.

Total Wealth Management revenue (net interest income, fiduciary fees and other fee income) was $9.5 million for the second quarter of 2016. This represented an increase of $573,000, or 6% compared to the second quarter of 2015 and an increase of $752,000, or 9% (not annualized) compared to the first quarter of 2016. Included in this increase, fee revenue increased $626,000, or 11%, compared to the second quarter of 2015 and $994,000, or 18%, compared to the first quarter of 2016. The year-over-year and quarterly growth reflects continued growth in several Wealth business lines, with particular strength in bankruptcy administration, corporate trust services, seasonal tax preparation fees and the partnership with WSFS Mortgage in the delivery of mortgage products to Private Banking clients.

Total noninterest expense (including intercompany allocations and provision for loan losses and credit costs) was $6.1 million during the second quarter of 2016 compared to $5.9 million during the second quarter of 2015 and $5.8 million during the first quarter of 2016. The year-over-year increase in costs was due primarily to increased incentive compensation expense due to higher revenue and other infrastructure costs necessary to support the continuing growth of the Wealth Management business.

Pre-tax income in the second quarter of 2016 was $3.4 million compared to $3.1 million in the second quarter of 2015 and $2.9 million in the first quarter of 2016 and was driven by the above-mentioned factors.

Cash Connect revenue increases 12% over same quarter 2015.
Cash Connect® is a premier provider of ATM vault cash and smart safe and cash logistics services in the United States. Cash Connect® services over 18,000 non-bank ATMs and retail safes nationwide with over $700 million in cash and also operates over 440 ATMs for WSFS Bank, which has the largest branded ATM network in Delaware.

Our Cash Connect® division recorded $7.7 million in net revenue (fee income less funding costs) in the second quarter of 2016, an increase of $826,000, or 12% from the second quarter of 2015, reflecting significant organic growth. Net revenue increased $408,000 compared to the first quarter of 2016 and reflects growth and some impact from normal seasonality. Noninterest expense (including intercompany allocations of expense) was $5.6 million during the second quarter of 2016, an increase of $563,000 from the second quarter of 2015 and a decrease of $8,000 compared to the first quarter of 2016. Cash Connect® reported pre-tax income of $2.2 million for the second quarter of 2016, which was an increase from both $1.9 million in the second quarter of 2015 and $1.8 million in the first quarter of 2016.

Cash Connect continues to experience significant year-over-year fee income growth resulting from the expansion of its core business offerings of ATM Vault Cash and related Total Cash Management services. This continued growth has been driven by expanding our relationships with some of the largest Independent ATM deployers in the United States. Our Cash Connect division is also promoting its new smart safe, cash logistics offering which will be an added source of fee income as it grows.

Income taxes
The Company recorded an $8.5 million income tax provision in the second quarter of 2016, compared to $8.7 million in the first quarter of 2016 and a $6.9 million tax provision in the second quarter of 2015.

The effective tax rate was 32.7% in the second quarter of 2016, 35.5% in the first quarter of 2016 and 36.0% in the second quarter of 2015. The second quarter 2016 effective rate was impacted by the tax benefit resulting from the previously mentioned adoption of a new accounting pronouncement related to stock based compensation.

The second quarter 2016 effective tax rate excluding this item was 35.4%. This new guidance will continue to have an impact on the effective tax rate in future periods depending on stock-based compensation grants and their related vesting and exercise timing, as well as stock price.

Capital management
WSFS’ total stockholders’ equity increased $19.6 million, or 3% (not annualized), to $617.2 million at June 30, 2016 from $597.6 million at March 31, 2016, primarily as a result of an increase in quarterly earnings and market improvements related to our available-for-sale securities portfolio. Partially offsetting these increases was the payment of common stock dividends and stock buybacks during the quarter.

Similarly, WSFS’ tangible common equity(3) increased by 4% (not annualized) to $523.1 million at June 30, 2016 from $503.0 million at March 31, 2016. WSFS’ common equity to assets ratio was 10.58% at June 30, 2016, and its tangible common equity to asset ratio(3) increased by 11bps during the quarter to 9.11%. Book value per share was $20.89 at June 30, 2016, and tangible common book value per share(3) was $17.70 at June 30, 2016, a $0.66, or 4% (not annualized), increase from March 31, 2016.

At June 30, 2016, WSFS Bank’s Tier I leverage ratio of 10.48%, Common Equity Tier 1 capital ratio and Tier 1 capital ratio of 12.26%, and Total Capital ratio of 13.05%, were all substantially in excess of the “well-capitalized” regulatory benchmarks.

In the second quarter of 2016, WSFS repurchased 57,500 shares of common stock at an average price of $35.40 as part of our 5% buyback program approved by the Board of Directors during the fourth quarter of 2015. WSFS has 1,041,194 shares, or over 3% of outstanding shares, remaining to repurchase under this current authorization.

Finally, the Board of Directors approved a quarterly cash dividend of $0.06 per share of common stock. This dividend will be paid on September 2, 2016 to shareholders of record as of August 19, 2016.

3 Tangible common equity, tangible common equity to asset ratio and tangible common book value per share are non-GAAP financial measures. A reconciliation of these measures to their comparable GAAP measures is included at the end of this press release.

Second quarter 2016 earnings release conference call
Management will conduct a conference call to review second quarter results at 1:00 p.m. Eastern Time (ET) on Friday, July 29, 2016. Interested parties may listen to this call by dialing 1-877-312-5857. A rebroadcast of the conference call will be available two hours after the completion of the call, until Friday, August 12, 2016, by dialing 1-855-859-2056 and using Conference ID 46479583.

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 the Delaware Valley. As of June 30, 2016 WSFS Financial Corporation had $5.8 billion in assets on its balance sheet and $13.4 billion in fiduciary assets, including approximately $1.2 billion in assets under management. As of June 30, 2016, WSFS operates from 63 offices located in Delaware (44), Pennsylvania (17), Virginia (1) and Nevada (1) and provides comprehensive financial services including commercial banking, retail banking, cash management and trust and wealth management. Other subsidiaries or divisions include Christiana Trust, WSFS Wealth Investments, Cypress Capital Management, LLC, Cash Connect®, WSFS Mortgage and Arrow Land Transfer. Serving the Delaware Valley since 1832, WSFS Bank is the seventh oldest bank in the United States continuously operating under the same name. For more information, please visit www.wsfsbank.com.

Forward-Looking Statement Disclaimer
This press release contains estimates, predictions, opinions, projections and other “forward-looking statements” as that phrase is defined in the Private Securities Litigation Reform Act of 1995. Such statements include, without limitation, references to the Company’s predictions or expectations of future business or financial performance as well as its goals and objectives for future operations, financial and business trends, business prospects, and management’s outlook or expectations for earnings, revenues, expenses, capital levels, liquidity levels, asset quality or other future financial or business performance, strategies or expectations. Such forward-looking statements are based on various assumptions (some of which may be beyond the Company’s control) and are subject to risks and uncertainties (which change over time) and other factors which could cause actual results to differ materially from those currently anticipated. Such risks and uncertainties include, but are not limited to, those related to difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the market areas in which the Company operates and in which its loans are concentrated, including the effects of declines in housing markets, an increase in unemployment levels and slowdowns in economic growth; the Company’s level of nonperforming assets and the costs associated with resolving any problem loans including litigation and other costs; changes in market interest rates may increase funding costs and reduce earning asset yields thus reducing margin; the impact of changes in interest rates and the credit quality and strength of underlying collateral and the effect of such changes on the market value of the Company’s investment securities portfolio; the credit risk associated with the substantial amount of commercial real estate, construction and land development, and commercial and industrial loans in our loan portfolio; the extensive federal and state regulation, supervision and examination governing almost every aspect of the Company’s operations including changes in regulations affecting financial institutions, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations being issued in accordance with this statute and potential expenses associated with complying with such regulations; possible additional loan losses and impairment of the collectability of loans; the Company’s ability to comply with applicable capital and liquidity requirements (including the finalized Basel III capital standards), including our ability to generate liquidity internally or raise capital on favorable terms; possible changes in trade, monetary and fiscal policies, laws and regulations and other activities of governments, agencies, and similar organizations; any impairment of the Company’s goodwill or other intangible assets; failure of the financial and operational controls of the Company’s Cash Connect division; conditions in the financial markets that may limit the Company’s access to additional funding to meet its liquidity needs; the success of the Company’s growth plans, including the successful integration of past and future acquisitions; negative perceptions or publicity with respect to the Company’s trust and wealth management business; system failure or cybersecurity breaches of the Company’s network security; the Company’s ability to recruit and retain key employees; the effects of problems encountered by other financial institutions that adversely affect the Company or the banking industry generally; the effects of weather and natural disasters such as floods, droughts, wind, tornadoes and hurricanes as well as effects from geopolitical instability and man-made disasters including terrorist attacks; possible changes in the speed of loan prepayments by the Company’s customers and loan origination or sales volumes; possible acceleration of prepayments of mortgage-backed securities due to low interest rates, and the related acceleration of premium amortization on prepayments on mortgage-backed securities due to low interest rates; regulatory limits on the Company’s ability to receive dividends from its subsidiaries and pay dividends to its shareholders; the effects of any reputational, credit, interest rate, market, operational, legal, liquidity, regulatory and compliance risk resulting from developments related to any of the risks discussed above; and the costs associated with resolving any problem loans, litigation and other risks and uncertainties, discussed in the Company’s Form 10-K for the year ended December 31, 2015 and other documents filed by the Company with the Securities and Exchange Commission from time to time. Forward-looking statements are as of the date they are made, and the Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company.

WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS
STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data) Three months ended Six months ended
(Unaudited)June 30, March 31, June 30, June 30, June 30,
2016 2016 2015 2016 2015
Interest income:
Interest and fees on loans$ 44,505 $ 43,517 $ 37,090 $ 88,022 $ 73,334
Interest on mortgage-backed securities 3,910 3,894 3,523 7,804 6,956
Interest and dividends on investment securities 1,226 1,220 852 2,446 1,712
Interest on reverse mortgage loans 1,478 1,045 1,166 2,523 2,402
Other interest income 384 370 424 754 1,502
51,503 50,046 43,055 101,549 85,906
Interest expense:
Interest on deposits 2,204 2,118 1,825 4,322 3,767
Interest on Federal Home Loan Bank advances 1,124 1,048 751 2,172 1,464
Interest on trust preferred borrowings 397 371 339 768 666
Interest on senior debt 1,175 942 941 2,117 1,883
Interest on other borrowings 189 211 109 400 219
5,089 4,690 3,965 9,779 7,999
Net interest income 46,414 45,356 39,090 91,770 77,907
Provision for loan losses 1,254 780 3,773 2,034 4,559
Net interest income after provision for loan losses 45,160 44,576 35,317 89,736 73,348
Noninterest income:
Credit/debit card and ATM income 7,253 6,901 6,462 14,154 12,489
Investment management and fiduciary revenue 6,282 5,254 5,707 11,536 10,800
Deposit service charges 4,342 4,276 4,099 8,618 8,004
Mortgage banking activities, net 1,816 1,654 1,590 3,470 3,293
Loan fee income 480 477 469 957 932
Investment securities gains, net 545 305 477 850 928
Bank-owned life insurance income 211 231 179 442 382
Other income 3,920 3,972 3,475 7,892 6,725
24,849 23,070 22,458 47,919 43,553
Noninterest expense:
Salaries, benefits and other compensation 23,509 22,876 20,345 46,385 41,355
Occupancy expense 3,955 4,270 3,637 8,225 7,515
Equipment expense 2,516 2,473 1,959 4,989 4,041
Professional fees 2,934 2,403 1,753 5,337 3,225
Data processing and operations expense 1,522 1,542 1,459 3,064 2,881
Marketing expense 801 664 1,007 1,465 1,591
FDIC expenses 773 838 687 1,611 1,356
Corporate development expense 549 569 686 1,118 1,282
Loan workout and OREO expense 45 503 330 548 329
Other operating expenses 7,423 7,061 6,791 14,484 13,992
44,027 43,199 38,654 87,226 77,567
Income before taxes 25,982 24,447 19,121 50,429 39,334
Income tax provision 8,504 8,677 6,887 17,181 14,211
Net income$ 17,478 $ 15,770 $ 12,234 $ 33,248 $ 25,123
Diluted earnings per share of common stock (o):
Net income allocable to common stockholders$ 0.58 $ 0.52 $ 0.43 $1.10 $ 0.88
Weighted average shares of common stock outstanding for fully diluted EPS 30,150,904 30,228,788 28,604,235 30,190,079 28,637,499
Performance Ratios:
Return on average assets (a) 1.23 % 1.13 % 0.98 % 1.18 % 1.02 %
Return on average equity (a) 11.60 10.65 9.61 11.16 9.96
Return on tangible common equity (a) (p) 13.97 13.05 11.09 13.52 11.49
Net interest margin (a)(b) 3.90 3.87 3.71 3.88 3.76
Efficiency ratio (c) 61.14 62.44 62.27 61.78 63.31
Noninterest income as a percentage of total net revenue (b) 34.51 33.35 36.18 33.94 35.55
See "Notes"


WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
SUMMARY STATEMENTS OF CONDITION
(Dollars in thousands)
(Unaudited) June 30, March 31, June 30,
2016 2016 2015
Assets:
Cash and due from banks$ 104,507 $ 92,543 $ 108,928
Cash in non-owned ATMs 599,114 497,322 424,238
Investment securities (d) 205,625 206,119 149,750
Other investments 38,754 30,874 32,357
Mortgage-backed securities (d) 727,232 735,555 752,693
Net loans (e)(f)(l) 3,833,865 3,793,907 3,343,570
Reverse mortgage loans 25,263 24,739 25,945
Bank owned life insurance 91,491 90,439 76,891
Goodwill and intangibles 94,073 94,572 57,044
Other assets 114,183 120,084 106,067
Total assets$ 5,834,107 $ 5,686,154 $ 5,077,483
Liabilities and Stockholders' Equity:
Noninterest-bearing deposits$ 977,154 $ 964,487 $ 875,955
Interest-bearing deposits 2,855,859 2,904,201 2,466,878
Total customer deposits 3,833,013 3,868,688 3,342,833
Brokered deposits 159,126 200,083 183,622
Total deposits 3,992,139 4,068,771 3,526,455
Federal Home Loan Bank advances 886,767 707,826 740,681
Other borrowings 282,035 264,598 260,219
Other liabilities 55,970 47,379 49,753
Total liabilities 5,216,911 5,088,574 4,577,108
Stockholders' equity 617,196 597,580 500,375
Total liabilities and stockholders' equity$ 5,834,107 $ 5,686,154 $ 5,077,483
Capital Ratios:
Equity to asset ratio 10.58 % 10.51 % 9.85 %
Tangible common equity to asset ratio (p) 9.11 9.00 8.83
Common equity Tier 1 capital (g) (required: 4.5%; well capitalized: 6.5%) 12.26 12.16 12.60
Tier 1 leverage (g) (required: 4.00%; well-capitalized: 5.00%) 10.48 10.50 10.59
Tier 1 risk-based capital (g) (required: 6.00%; well-capitalized: 8.00%) 12.26 12.16 12.60
Total Risk-based capital (g) (required: 8.00%; well-capitalized: 10.00%) 13.05 12.96 13.60
Asset Quality Indicators:
Nonperforming Assets:
Nonaccruing loans$ 14,581 $ 19,791 $ 27,719
Troubled debt restructuring (accruing) 14,070 13,909 13,610
Assets acquired through foreclosure 2,935 3,979 4,856
Total nonperforming assets$ 31,586 $ 37,679 $ 46,185
Past due loans (h)$ 720 $ 127 $ 208
Allowance for loan losses$ 37,746 $ 37,556 $ 40,845
Ratio of nonperforming assets to total assets 0.54 % 0.66 % 0.91 %
Ratio of nonperforming assets (excluding accruing TDRs) 0.30 0.42 0.64
Ratio of allowance for loan losses to total gross loans (i) 0.98 0.99 1.22
Ratio of allowance for loan losses to nonaccruing loans 259 190 147
Ratio of quarterly net charge-offs to average gross loans (a)(e) 0.11 0.03 0.29
Ratio of year-to-date net charge-offs to average gross loans (a)(f) 0.07 0.03 0.19
See "Notes"


WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
AVERAGE BALANCE SHEET
(Dollars in thousands)
(Unaudited) Three months ended
June 30, 2016 March 31, 2016 June 30, 2015
Average Interest & Yield/ Average Interest & Yield/ Average Interest & Yield/
Balance Dividends Rate (a)(b) Balance Dividends Rate (a)(b) Balance Dividends Rate (a)(b)
Assets:
Interest-earning assets:
Loans: (e) (j)
Commercial real estate loans$ 1,207,324 $ 14,952 4.98 % $ 1,192,711 $ 14,280 4.82 % $ 1,002,843 $ 11,803 4.71 %
Residential real estate loans (l) 278,418 3,146 4.52 286,853 3,179 4.43 255,302 2,510 3.93
Commercial loans 2,016,975 22,333 4.49 1,970,680 21,965 4.52 1,733,950 19,090 4.44
Consumer loans 367,769 4,074 4.46 361,040 4,093 4.56 327,581 3,687 4.51
Total loans (l) 3,870,486 44,505 4.64 3,811,284 43,517 4.61 3,319,676 37,090 4.49
Mortgage-backed securities (d) 727,359 3,910 2.15 711,352 3,894 2.19 751,006 3,523 1.88
Investment securities (d) 205,944 1,226 3.48 203,665 1,220 3.54 153,742 852 3.19
Reverse mortgage loans 25,273 1,478 23.39 25,137 1,045 16.63 26,931 1,166 17.32
Other interest-earning assets 32,465 384 4.73 30,558 370 4.87 28,715 424 5.92
Total interest-earning assets 4,861,527 51,503 4.32 4,781,996 50,046 4.27 4,280,070 43,055 4.08
Allowance for loan losses (37,351) (37,544) (39,924)
Cash and due from banks 96,784 93,998 88,124
Cash in non-owned ATMs 510,684 452,052 413,977
Bank owned life insurance 91,310 90,290 76,774
Other noninterest-earning assets 207,305 216,460 151,506
Total assets$ 5,730,259 $ 5,597,252 $ 4,970,527
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
Interest-bearing demand$ 784,507 $ 254 0.13 % $ 766,209 $ 245 0.13 % $ 689,773 $ 158 0.09 %
Money market 1,100,449 787 0.29 1,098,595 749 0.27 916,666 596 0.26
Savings 436,929 113 0.10 443,822 139 0.13 414,001 54 0.05
Customer time deposits 550,661 750 0.55 574,422 745 0.52 450,997 855 0.76
Total interest-bearing customer deposits 2,872,546 1,904 0.27 2,883,048 1,878 0.26 2,471,437 1,663 0.27
Brokered deposits 231,509 300 0.52 166,974 241 0.58 200,940 162 0.32
Total interest-bearing deposits 3,104,055 2,204 0.29 3,050,022 2,119 0.28 2,672,377 1,825 0.27
FHLB of Pittsburgh advances 714,271 1,124 0.63 674,247 1,048 0.63 636,327 751 0.47
Trust preferred borrowings 67,011 397 2.38 67,011 371 2.23 67,011 339 2.03
Senior Debt 74,114 1,175 6.34 55,000 942 6.85 55,000 941 6.84
Other borrowed funds 135,017 189 0.56 155,011 210 0.54 128,126 109 0.34
Total interest-bearing liabilities 4,094,468 5,089 0.50 4,001,291 4,690 0.47 3,558,841 3,965 0.45
Noninterest-bearing demand deposits 981,033 949,607 863,241
Other noninterest-bearing liabilities 48,543 54,307 39,483
Stockholders' equity 606,215 592,047 508,962
Total liabilities and stockholders' equity$ 5,730,259 $ 5,597,252 $ 4,970,527
Excess of interest-earning assets
over interest-bearing liabilities$ 767,059 $ 780,705 $ 721,229
Net interest and dividend income $ 46,414 $ 45,356 $ 39,090
Interest rate spread
3.82 % 3.80 % 3.63 %
Net interest margin(n)
3.90 % 3.87 % 3.71 %
See "Notes"


WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
(Dollars in thousands, except per share data)
(Unaudited)Three months ended Six months ended
June 30,March 31,June 30,June 30,June 30,
Stock Information (o): 2016 2016 2015 2016 2015
Market price of common stock:
High$ 37.10 $ 33.71 $ 27.81 $ 37.10 $27.81
Low 30.56 26.40 23.72 26.40 23.72
Close 32.19 32.52 27.35 32.19 27.35
Book value per share of common stock 20.89 20.24 17.93
Tangible common book value per share of common stock (p) 17.70 17.04 15.88
Number of shares of common stock outstanding (000s) 29,549 29,522 27,909
Other Financial Data:
One-year repricing gap to total assets (k) 2.22 % 1.86 % 0.62%
Weighted average duration of the MBS portfolio 3.6 Years 4.1 years 4.6 years
Unrealized (losses) gains on securities available-for-sale, net of taxes$ 12,841 $ 8,496 $ (1,588)
Number of Associates (FTEs) (m) 1,017 948 900
Number of offices (branches, LPO's, operations centers, etc.) 63 63 56
Number of WSFS owned ATMs 445 442 453
Notes:
(a)Annualized.
(b)Computed on a fully tax-equivalent basis.
(c) Noninterest expense divided by (tax-equivalent) net interest income and noninterest income.
(d)Includes securities available-for-sale at fair value.
(e) Net of unearned income.
(f)Net of allowance for loan losses.
(g)Represents capital ratios of Wilmington Savings Fund Society, FSB and subsidiaries.
(h)Accruing loans which are contractually past due 90 days or more as to principal or interest.
(i)Excludes loans held-for-sale.
(j)Nonperforming loans are included in average balance computations.
(k)The difference between projected amounts of interest-sensitive assets and interest-sensitive liabilities
repricing within one year divided by total assets, based on a current interest rate scenario.
(l)Includes loans held-for-sale.
(m)Includes seasonal Associates, when applicable.
(n)Beginning in 2015, the annualization method used to calculate net interest margin was changed to
actual/actual from 30/360. All periods net interest margin calculations were updated to reflect this change.
(o)All stock information has been adjusted for the 3 for 1 stock dividend completed on May 18, 2015.
(p)Non-GAAP Financial Measures:

The Company uses a number of non-GAAP (Generally Accepted Accounting Principles) financial measures 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. These non-GAAP financial measures should be considered in addition to results prepared in accordance
with GAAP, and they are not a substitute for, or superior to, GAAP results. For a reconciliation of these non-GAAP financial
measures to their comparable GAAP measures, see pages 16 and 17 of this press release.


WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
(Dollars in thousands, except per share data)
(Unaudited)
Non-GAAP Reconciliation (p):Three months ended Six months ended
June 30, March 31, June 30, June 30, June 30,
2016 2016 2015 2016 2015
Net interest Income (GAAP)$ 46,414 $ 45,356 $ 39,090 $ 91,770 $ 77,907
Less: FHLB Special Dividend - - - - (808)
Core net interest income (non-GAAP) 46,414 45,356 39,090 91,770 77,099
Noninterest Income (GAAP) 24,849 23,070 22,458 47,919 43,553
Less: Securities gains (545) (305) (477) (850) (928)
Core fee income (non-GAAP) 24,304 22,765 21,981 47,069 42,625
Core net revenue (non-GAAP)$ 70,718 $ 68,121 $ 61,071 $ 138,839 $ 119,724
Noninterest expense (GAAP)$ 44,027 $ 43,199 $ 38,654 $ 87,226 $ 77,567
Less: Corporate Development Costs (549) (569) (686) (1,118) (1,282)
Core noninterest expense (non-GAAP)$ 43,478 $ 42,630 $ 37,968 $ 86,108 $ 76,285
End of period
June 30, March 31, June 30,
2016 2016 2015
Total assets$ 5,834,107 $ 5,686,154 $ 5,077,483
Less: Goodwill and other intangible assets (94,073) (94,572) (57,044)
Total tangible assets$ 5,740,034 $ 5,591,582 $ 5,020,439
Total Stockholders' equity$ 617,196 $ 597,580 $ 500,375
Less: Goodwill and other intangible assets (94,073) (94,572) (57,044)
Total tangible common equity (non-GAAP)$ 523,123 $ 503,008 $ 443,331
Calculation of tangible common book value per share:
Book Value per share (GAAP)$ 20.89 $ 20.24 $ 17.93
Tangible common book value per share (non-GAAP) 17.70 17.04 15.88
Calculation of tangible common equity to assets:
Equity to asset ratio (GAAP) 10.58 % 10.51 % 9.85 %
Tangible common equity to asset ratio (non-GAAP) 9.11 9.00 8.83
Three months ended
Six months ended
June 30, March 31, June 30, June 30, June 30,
2016 2016 2015 2016 2015
GAAP net income$ 17,478 $ 15,770 $ 12,234 $ 33,248 $ 25,123
Pre-tax Adjustments: Sec. gains, corp. dev. costs, & FHLB dividend 4 264 209 268 (454)
Tax Impact of Adjustments - (23) - (23) 427
Non-GAAP net income$ 17,482 $ 16,011 $ 12,443 $ 33,493 $ 25,096
Return on Average Assets (ROA) 1.23 % 1.13 % 0.98 % 1.18 % 1.02
Pre-tax Adjustments: Sec. gains, corp. dev. costs, & FHLB dividend - 0.01 0.02 0.01 (0.02)
Tax Impact of Adjustments - - - - 0.02
Non-GAAP ROA 1.23 % 1.14 % 1.00 % 1.19 % 1.02
GAAP EPS$ 0.58 $ 0.52 $ 0.43 $ 1.10 $ 0.88
Pre-tax Adjustments: Sec. gains, corp. dev. costs, & FHLB dividend - 0.01 0.01 0.01 (0.02)
Tax Impact of Adjustments - - - - 0.02
Core EPS (non-GAAP)$ 0.58 $ 0.53 $ 0.44 $ 1.11 $ 0.88
Three months ended Six months ended
June 30, March 31, June 30, June 30, June 30,
2016 2016 2015 2016 2015
GAAP net income$ 17,478 $ 15,770 $ 12,234 $ 33,248 $ 25,123
Add: Tax effected amortization of intangible assets 300 355 255 655 510
Net tangible income (non-GAAP)$ 17,778 $ 16,125 $ 12,489 $ 33,903 $ 25,633
Average shareholders' equity$ 606,215 $ 592,047 $ 508,962 $ 599,131 $ 504,708
Less: average goodwill and intangible assets (94,434) (95,074) (57,240) (94,754) (57,370)
Net average tangible equity$ 511,781 $ 496,973 $ 451,722 $ 504,377 $ 447,338
Calculation of return on tangible common equity: (non-GAAP) 13.97% 13.05% 11.09% 13.52% 11.49%

Investor Relations Contact: Dominic Canuso (302) 571-6833 dcanuso@wsfsbank.com Media Contact: Cortney Klein (302) 571-5253 cklein@wsfsbank.com

Source:WSFS Financial Corporation