WSFS Financial Corporation (NASDAQ:WSFS) Files An 8-K Other EventsItem 8.01 Other Events.
As described in greater detail in the “The Mergers—Litigation Related to the Mergers” section of the definitive joint proxy statement/prospectus filed with the Securities and Exchange Commission on November 6, 2018 and first mailed to stockholders of Beneficial Bancorp, Inc. (“Beneficial”) and stockholders of WSFS Financial Corporation (“WSFS”) on November 6, 2018, the following lawsuits (collectively, the “Merger Litigation”) are pending in connection with the previously announced proposed merger of Beneficial with and into WSFS.
| · | A putative class action lawsuit filed by one purported Beneficial stockholder against Beneficial and the members of the Beneficial board of directors in the United States District Court for the Southern District of New York, captioned Dappollone v. Beneficial Bancorp, Inc., et al., Docket No. 1:18-cv-09395; |
| · | A putative derivative and class action lawsuit filed by another purported Beneficial stockholder against Beneficial, the members of the Beneficial board of directors and Wilmington Savings Fund Society, FSB in the Circuit Court for Baltimore City, Maryland, captioned Parshall v. Farnesi et al., Case No. 24C18005703; and |
| · | Three separate lawsuits filed by three other purported Beneficial stockholders against Beneficial and the members of the Beneficial board of directors in the District Court for the District of Maryland, captioned Wolenter v. Beneficial Bancorp, Inc. et al. (Case No. 1:18-cv-03379-JKB), Karp v. Beneficial Bancorp, Inc. et. al. (Case No. 1:18-cv-03381-ELH), and Bushanksy v. Beneficial Bancorp, Inc. et al. (Case No. 1:18-cv-03382-DKC). |
Solely to avoid the costs, risks and uncertainties inherent in litigation, Beneficial and WSFS have determined to make additional disclosures to supplement the disclosures contained in the joint proxy statement/prospectus (the “Additional Disclosures”). The Additional Disclosures are set forth below and should be read in conjunction with the joint proxy statement/prospectus.
Beneficial and WSFS believe that the Additional Disclosures moot plaintiffs’ disclosure claims asserted in the Merger Litigation and, as a result, expect that the plaintiffs will decline to seek injunctive relief against the merger. It is possible that additional, similar complaints may be filed. If this occurs, Beneficial and WSFS do not intend to announce the filing of each additional, similar complaint or any amended complaint unless it contains materially new or different allegations.
This decision to make the Additional Disclosures will not affect the merger consideration to be paid in connection with the merger of Beneficial with and into WSFS or the timing of the special meetings of the stockholders of Beneficial and WSFS, respectively.
Beneficial and the other defendants have denied, and continue to deny, that they have committed or aided and abetted in the commission of any violation of law or engaged in any of the wrongful acts that were or could have been alleged in the lawsuits, and maintain that, they complied with their fiduciary and other legal duties and are making the Additional Disclosures solely to eliminate the burden and expense of further litigation, to put the claims that were or could have been asserted to rest, and to avoid any possible delay to the closing of the merger that might arise from further litigation. Nothing in this Current Report on Form 8-K shall be deemed an admission of the legal necessity or materiality under applicable laws of any of the disclosures set forth herein.
SUPPLEMENT TO DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS
The following information supplements the joint proxy statement/prospectus and should be read in connection with the joint proxy statement/prospectus, which should be read in its entirety. To the extent that information herein differs from or updates information contained in the joint proxy statement/prospectus, the information contained herein supersedes the information contained in the joint proxy statement/prospectus. All page references in the information below are to pages in the joint proxy statement/prospectus, and terms used below have the meanings set forth in the joint proxy statement/prospectus, unless otherwise defined below. Without admitting in any way that the disclosures below are material or otherwise required by law, Beneficial and WSFS make the following supplemental disclosures:
Background of the Mergers
The disclosure under the heading “THE MERGERS—Background of the Mergers” is hereby supplemented by adding the following after the first sentence of the third paragraph of page 73 of the joint proxy statement/prospectus:
Sandler O'Neill did not seek further contact with institutions previously contacted in March that had not expressed an interest in entering into a potential business combination with Beneficial. As part of contacting the nine financial institutions following the April 19, 2018 board meeting, Sandler O'Neill contacted all parties that had expressed interest in, and ability to engage in, acquisition discussions with Beneficial when contacted in March 2018.
The disclosure under the heading “THE MERGERS—Background of the Mergers” is hereby supplemented by adding the following sentence after the last sentence of the third full paragraph of page 74 of the joint proxy statement/prospectus:
Other than entering into the mutual nondisclosure and exclusivity agreement with WSFS, Beneficial did not enter into any confidentiality agreements with potential bidders that were contacted either in March or following the April 19, 2018 Beneficial board meeting.
The disclosure under the heading “THE MERGERS—Background of the Mergers” is hereby supplemented by adding the following sentence after the last sentence of the third paragraph of page 75 of the joint proxy statement/prospectus:
As part of his report, Mr. Cuddy informed the executive committee that Mr. Turner had communicated to him that WSFS would not be offering any members of Beneficial’s executive management team a role on WSFS’s executive management team following the completion of the Mergers, but indicated that WSFS wanted to explore leadership opportunities for each member of Beneficial’s executive management team both prior to and after completion of the Mergers.
The disclosure under the heading “THE MERGERS—Background of the Mergers” is hereby supplemented by adding the following after the last sentence of the sixth paragraph of page 75 of the joint proxy statement/prospectus:
The updated non-binding indication of interest letter submitted by WSFS on July 1, 2018 requested that Gerard P. Cuddy and two mutually agreed upon current directors of Beneficial join the board of directors of WSFS following the consummation of the Mergers, in accordance with WSFS’s standard, mutual interview and company orientation process that WSFS uses for all new directors. In addition, the updated non-binding indication of interest letter submitted by WSFS also provided that those directors of Beneficial who do not continue as directors of WSFS after the closing of the Mergers would become members of a new integration advisory board that WSFS would create in connection with the Mergers, along with Mr. Cuddy and Rodger Levenson. The updated non-binding indication of interest letter did not provide that any of Beneficial’s current executive officers would join WSFS’s executive management team. Over the next several days, WSFS and Beneficial continued to discuss the possibility of certain Beneficial executive officers joining WSFS’s executive management team following the completion of the Mergers, including the possibility of Mr. Cuddy serving in a senior executive management position with the combined company.
The disclosure under the heading “THE MERGERS—Background of the Mergers” is hereby supplemented by adding the following after the last sentence of the seventh paragraph of page 75 of the joint proxy statement/prospectus:
As part of his report, Mr. Cuddy informed the executive committee that, at their July 9, 2018 meeting, Mr. Turner expressed WSFS’s desire to retain Beneficial’s entire executive management team for a period of not less than 15 months following the completion of the Mergers in order to facilitate team and systems integration post-closing. He also informed the executive committee that, with the exception of Martin F. Gallagher, Jr., WSFS did not plan to extend written offers of employment beyond 15 months but that WSFS did intend to explore leadership opportunities for each member of Beneficial’s executive management team that would continue beyond their 15 month written offers of employment. Mr. Turner also confirmed that WSFS would offer not more than three WSFS board seats to current Beneficial directors in connection with the Mergers.
Opinion of Beneficial’s Financial Advisor
The disclosure under the heading “THE MERGERS—Opinion of Beneficial’s Financial Advisor—Beneficial and WSFS Peer Group Analyses” is hereby supplemented by deleting the table on page 86 (Beneficial Peer Group Analysis) of the joint proxy statement/prospectus and replacing it with the following:
Financial Data as of or for the Period Ending June 30, 2018
Pricing Data as of August 6, 2018
| Balance Sheet | Capital Position | YTD Profitability | Valuation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Price/ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NPAs¹/ | Total | CRE/ | Net | Tang. | YTD | Current | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | Loans/ | Total | TCE/ | Leverage | RBC | Total | Interest | Efficiency | Book | Ann. | Est. | Est. | Dividend | Market | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Assets | Deposits | Assets | TA | Ratio | Ratio | RBC⁴ | ROAA | ROAE | Margin | Ratio | Value | EPS | EPS | EPS | Yield | Value | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Company | City, State | Ticker | ($mm) | (%) | (%) | (%) | (%) | (%) | (%) | (%) | (%) | (%) | (%) | (%) | (x) | (x) | (x) | (%) | ($mm) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OceanFirst Financial Corp. | Toms River, NJ | OCFC | 7,737 | 95.7 | 0.65 | 8.87 | 8.87 | ² | 13.96 | ² | 246.1 | 0.59 | 4.50 | 3.66 | 59.0 | 31.9 | 14.1 | 12.5 | 2.1 | 1,371 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| First Commonwealth Financial Corporation | Indiana, PA | FCF | 7,649 | 95.4 | 0.65 | 9.13 | 10.40 | 14.80 | 239.4 | 1.49 | 12.10 | 3.70 | 56.4 | 15.0 | 15.7 | 14.6 | 2.1 | 1,688 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| S&T Bancorp, Inc. | Indiana, PA | STBA | 7,097 | 107.3 | 0.69 | 9.06 | 9.87 | 13.04 | 334.4 | 1.36 | 10.62 | 3.59 | 50.3 | 16.4 | 15.5 | 14.2 | 2.2 | 1,558 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kearny Financial Corp. | Fairfield, NJ | KRNY | 6,580 | 110.5 | 0.38 | 18.29 | ² | 18.22 | ² | 26.97 | ² | 282.8 | 0.37 | 1.81 | 2.50 | 67.7 | 28.6 | 25.5 | 21.5 | 1.2 | 1,362 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lakeland Bancorp, Inc. | Oak Ridge, NJ | LBAI | 5,534 | 97.2 | 0.44 | 8.51 | 9.43 | 13.67 | 392.1 | 1.15 | 10.57 | 3.39 | 56.1 | 14.8 | 14.5 | 13.4 | 2.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ConnectOne Bancorp, Inc. | Englewood Cliffs, NJ | CNOB | 5,275 | 111.7 | 1.21 | 8.40 | 8.93 | 12.81 | 495.4 | 0.85 | 7.57 | 3.20 | 41.9 | 18.4 | 13.5 | 10.0 | 1.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TriState Capital Holdings, Inc. | Pittsburgh, PA | TSC | 5,234 | 102.5 | 0.19 | 6.71 | 7.68 | 12.66 | 296.0 | 1.02 | 11.84 | 2.34 | 61.3 | 17.3 | 17.3 | 14.5 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Univest Corporation of Pennsylvania | Souderton, PA | UVSP | 4,749 | 105.5 | 0.69 | 9.33 | 10.19 | 13.76 | 170.6 | 0.74 | 5.65 | 3.69 | 62.4 | 23.8 | 17.5 | 12.8 | 2.9 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bryn Mawr Bank Corporation | Bryn Mawr, PA | BMTC | 4,394 | 100.9 | 0.32 | 8.00 | 8.75 | 13.87 | 301.1 | 1.40 | 11.40 | 3.84 | 54.9 | 16.4 | 14.4 | 13.5 | 2.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Peapack-Gladstone Financial Corporation | Bedminster, NJ | PGC | 4,265 | 104.4 | ² | 0.40 | 9.75 | 9.71 | 15.71 | 431.3 | 1.06 | 10.83 | 2.79 | 59.3 | 13.8 | 13.7 | 12.3 | 0.6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Northfield Bancorp, Inc. | Woodbridge, NJ | NFBK | 4,188 | 108.5 | 0.57 | 14.71 | 15.25 | ² | 18.71 | ² | 377.4 | 1.03 | 6.54 | 2.87 | 56.7 | 18.1 | 18.9 | 19.1 | 2.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oritani Financial Corp. | Township of Washington, NJ | ORIT | 4,167 | 122.5 | 0.31 | 13.42 | 13.21 | ² | 15.52 | ² | 568.4 | 1.04 | 7.65 | 2.79 | 33.6 | 8.4 | 13.9 | 13.9 | 6.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CNB Financial Corporation | Clearfield, PA | CCNE | 3,010 | 97.2 | 0.96 | 7.07 | 8.14 | 13.67 | 249.3 | 1.07 | 12.62 | 3.74 | 63.1 | 15.1 | 14.2 | 12.4 | 2.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Republic First Bancorp, Inc. | Philadelphia, PA | FRBK | 2,553 | 61.7 | 1.11 | 9.04 | 9.88 | 15.62 | 215.7 | 0.34 | 3.61 | 3.18 | 85.2 | NM | 37.8 | 20.1 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| BCB Bancorp, Inc. | Bayonne, NJ | BCBP | 2,517 | 107.8 | 1.30 | 6.73 | 9.25 | ² | 12.59 | ² | 422.2 | 0.64 | 7.66 | 3.46 | 64.9 | 17.5 | 14.3 | 11.4 | 3.8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| High | 7,737 | 122.5 | 1.30 | 18.29 | 18.22 | 26.97 | 568.4 | 1.49 | 12.62 | 3.84 | 85.2 | 31.9 | 37.8 | 21.5 | 6.3 | 1,688 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Low | 2,517 | 61.7 | 0.19 | 6.71 | 7.68 | 12.59 | 170.6 | 0.34 | 1.81 | 2.34 | 33.6 | 8.4 | 13.5 | 10.0 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mean | 4,997 | 101.9 | 0.66 | 9.80 | 10.52 | 15.16 | 334.8 | 0.94 | 8.33 | 3.25 | 58.2 | 18.2 | 17.4 | 14.4 | 2.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Median | 4,749 | 104.4 | 0.65 | 9.04 | 9.71 | 13.87 | 301.1 | 1.03 | 7.66 | 3.39 | 59.0 | 16.9 | 14.5 | 13.5 | 2.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| BISHOP | PA | — | 5,770 | 96.7 | 0.36 | ³ | 15.19 | 15.65 | 22.77 | 180.2 | 0.75 | 4.25 | 3.28 | 69.7 | 27.3 | 28.8 | 27.8 | 1.5 | 1,181 |
| (1) | Nonperforming assets defined as nonaccrual loans and leases, renegotiated loans and leases, and real estate owned |
| (2) | Financial data as of or for the period ending March 31, 2018 |
| (3) | Bank level financial data as of June 30, 2018 |
| (4) | Regulatory holding company data as of March 31, 2018 |
| Note: | Includes publicly traded banks and thrifts headquartered in PA and NJ with total assets between $2.5 billion and $8.0 billion. |
| Source: | S&P Global Market Intelligence |
The disclosure under the heading “THE MERGERS—Opinion of Beneficial’s Financial Advisor—Beneficial and WSFS Peer Group Analyses” is hereby supplemented by deleting the table on the bottom of page 87 (WSFS Peer Group Analysis) of the joint proxy statement/prospectus and replacing it with the following:
Financial Data as of or for the Period Ending June 30, 2018
Pricing Data as of August 6, 2018
| Balance Sheet | Capital Position | YTD Profitability | Valuation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Price/ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NPAs¹/ | Total | CRE/ | Net | Tang. | YTD | Current | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | Loans/ | Total | TCE/ | Leverage | RBC | Total | Interest | Efficiency | Book | Ann. | Est. | Est. | Dividend | Market | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Assets | Deposits | Assets | TA | Ratio | Ratio | RBC³ | ROAA | ROAE | Margin | Ratio | Value | EPS | EPS | EPS | Yield | Value | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Company | City, State | Ticker | ($mm) | (%) | (%) | (%) | (%) | (%) | (%) | (%) | (%) | (%) | (%) | (%) | (x) | (x) | (x) | (%) | ($mm) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Community Bank System, Inc. | De Witt, NY | CBU | 10,633 | 73.3 | 0.26 | 8.57 | 10.53 | 17.82 | ² | 82.9 | 1.58 | 10.37 | 3.59 | 56.7 | 19.4 | 19.8 | 19.7 | 2.1 | 3,236 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Northwest Bancshares, Inc. | Warren, PA | NWBI | 9,562 | 99.2 | 0.89 | 9.74 | 11.88 | ² | 15.85 | ² | 145.1 | 1.08 | 8.47 | 3.84 | 62.6 | 17.8 | 17.5 | 16.3 | 3.8 | 1,839 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NBT Bancorp Inc. | Norwich, NY | NBTB | 9,467 | 89.9 | ² | 0.50 | 7.48 | 9.28 | 12.34 | 157.6 | 1.17 | 11.22 | 3.54 | 59.0 | 16.1 | 15.7 | 15.2 | 2.5 | 1,723 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sandy Spring Bancorp, Inc. | Olney, MD | SASR | 8,153 | 107.1 | 0.38 | 8.58 | 9.27 | 12.19 | 331.2 | 1.17 | 9.11 | 3.55 | 51.7 | 15.2 | 12.8 | 11.6 | 2.8 | 1,396 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Eagle Bancorp, Inc. | Bethesda, MD | EGBN | 7,880 | 106.1 | 0.32 | 11.58 | ¹ | 11.97 | 15.59 | 345.6 | 1.90 | 14.83 | 4.12 | 38.5 | 12.5 | 12.0 | 11.1 | 0.0 | 1,813 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| First Commonwealth Financial Corporation | Indiana, PA | FCF | 7,649 | 95.4 | 0.65 | 9.13 | 10.40 | 14.80 | 239.4 | 1.49 | 12.10 | 3.70 | 56.4 | 15.0 | 15.7 | 14.6 | 2.1 | 1,688 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| S&T Bancorp, Inc. | Indiana, PA | STBA | 7,097 | 107.3 | 0.69 | 9.06 | 9.87 | 13.04 | 334.4 | 1.36 | 10.62 | 3.59 | 50.3 | 16.4 | 15.5 | 14.2 | 2.2 | 1,558 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tompkins Financial Corporation | Ithaca, NY | TMP | 6,746 | 95.4 | ² | 0.40 | 7.36 | 8.53 | ² | 12.50 | ² | 248.1 | 1.28 | 14.68 | 3.36 | 60.4 | 15.5 | 15.6 | 14.9 | 2.2 | 1,300 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lakeland Bancorp, Inc. | Oak Ridge, NJ | LBAI | 5,534 | 97.2 | 0.44 | 8.51 | 9.43 | 13.67 | 392.1 | 1.15 | 10.57 | 3.39 | 56.1 | 14.8 | 14.5 | 13.4 | 2.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TriState Capital Holdings, Inc. | Pittsburgh, PA | TSC | 5,234 | 102.5 | 0.19 | 6.71 | 7.68 | 12.66 | 296.0 | 1.02 | 11.84 | 2.34 | 61.3 | 17.3 | 17.3 | 14.5 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TrustCo Bank Corp NY | Glenville, NY | TRST | 4,941 | 87.9 | 0.77 | 9.52 | 9.63 | ² | 19.57 | ² | 22.0 | 1.23 | 13.06 | 3.30 | 53.7 | 14.7 | 14.6 | 14.6 | 2.9 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bryn Mawr Bank Corporation | Bryn Mawr, PA | BMTC | 4,394 | 100.9 | 0.32 | 8.00 | 8.75 | 13.87 | 301.1 | 1.40 | 11.40 | 3.84 | 54.9 | 16.4 | 14.4 | 13.5 | 2.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| First of Long Island Corporation | Glen Head, NY | FLIC | 4,292 | 100.6 | 0.07 | 8.71 | 9.00 | 16.50 | 286.9 | 1.04 | 11.68 | 2.67 | 52.3 | 13.2 | 13.4 | 12.9 | 2.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Peapack-Gladstone Financial Corporation | Bedminster, NJ | PGC | 4,265 | 104.4 | ² | 0.40 | 9.75 | 9.71 | 15.71 | 431.3 | 1.06 | 10.83 | 2.79 | 59.3 | 13.8 | 13.7 | 12.3 | 0.6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial Institutions, Inc. | Warsaw, NY | FISI | 4,191 | 88.9 | 0.20 | 7.06 | 8.10 | 12.66 | 150.3 | 1.04 | 11.22 | 3.12 | 60.0 | 12.1 | 12.2 | 11.6 | 3.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Northfield Bancorp, Inc. | Woodbridge, NJ | NFBK | 4,188 | 108.5 | 0.57 | 14.71 | 15.25 | ² | 18.71 | ² | 377.4 | 1.03 | 6.54 | 2.87 | 56.7 | 18.1 | 18.9 | 19.1 | 2.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oritani Financial Corp. | Township of Washington, NJ | ORIT | 4,167 | 122.5 | 0.31 | 13.42 | 13.21 | ² | 15.52 | ² | 568.4 | 1.04 | 7.65 | 2.79 | 33.6 | 8.4 | 13.9 | 13.9 | 6.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| High | 10,633 | 122.5 | 0.89 | 14.71 | 15.25 | 19.57 | 568.4 | 1.90 | 14.83 | 4.12 | 62.6 | 19.4 | 19.8 | 19.7 | 6.3 | 3,236 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Low | 4,167 | 73.3 | 0.07 | 6.71 | 7.68 | 12.19 | 22.0 | 1.02 | 6.54 | 2.34 | 33.6 | 8.4 | 12.0 | 11.1 | 0.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mean | 6,376 | 99.2 | 0.43 | 9.29 | 10.15 | 14.88 | 277.0 | 1.24 | 10.95 | 3.32 | 54.3 | 15.1 | 15.1 | 14.3 | 2.4 | 1,257 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Median | 5,534 | 100.6 | 0.40 | 8.71 | 9.63 | 14.80 | 296.0 | 1.17 | 11.22 | 3.39 | 56.4 | 15.2 | 14.6 | 14.2 | 2.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RODNEY | DE | — | 7,113 | 90.3 | 0.78 | 8.40 | 9.64 | ² | 11.89 | ² | 228.1 | 1.91 | 17.82 | 4.06 | 60.3 | 13.5 | 15.9 | 14.4 | 0.8 | 1,758 |
| (1) | Nonperforming assets defined as nonaccrual loans and leases, renegotiated loans and leases, and real estate owned |
| (2) | Financial data as of or for the period ending March 31, 2018 |
| (3) | Regulatory holding company data as of March 31, 2018 |
| Note: | Includes publicly traded banks and thrifts headquartered in the Mid Atlantic with total assets between $4 billion and $15 billion and YTD ROAA >1%. |
| Source: | S&P Global Market Intelligence |
The disclosure under the heading “THE MERGERS—Opinion of Beneficial’s Financial Advisor—Analyses of Precedent Transactions” is hereby supplemented by deleting the table on page 89 of the joint proxy statement/prospectus and replacing it with the following:
| Transaction Information | Seller Information | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Price/ | Core | 1-Day | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deal | LTM | Est. | Deposit | Market | Total | TCE/ | YTD | NPAs/ | ||||||||||||||||||||||||||||||||||||||||||||||
| Annc. | Value | Earnings | EPS | TBV | Premium | Premium | Assets | TA | ROAA | Assets¹ | ||||||||||||||||||||||||||||||||||||||||||||
| Acquiror | St | Target | St | Date | ($mm) | (x) | (x) | (%) | (%) | (%) | ($mm) | (%) | (%) | (%) | ||||||||||||||||||||||||||||||||||||||||
| People's United Financial Inc. | CT | First Connecticut Bancorp, Inc | CT | 06/19/18 | 29.9 | 19.4 | 12.7 | 24.3 | 3,138 | 8.8 | 0.57 | 0.71 | ||||||||||||||||||||||||||||||||||||||||||
| Kearny Financial Corp. | NJ | Clifton Bancorp Inc | NJ | 11/01/17 | NM | 59.8 | 19.0 | 5.3 | 1,525 | 18.9 | 0.37 | 0.39 | ||||||||||||||||||||||||||||||||||||||||||
| OceanFirst Financial Corp. | NJ | Sun Bancorp Inc. | NJ | 06/30/17 | 7.8 | 63.2 | 12.7 | 1.3 | 2,256 | 12.8 | 2.82 | 0.28 | ||||||||||||||||||||||||||||||||||||||||||
| Berkshire Hills Bancorp Inc. | MA | Commerce Bancshares Corp. | MA | 05/22/17 | 14.6 | — | 3.0 | — | 2,219 | 6.9 | 0.75 | 1.14 | ||||||||||||||||||||||||||||||||||||||||||
| Sterling Bancorp | NY | Astoria Financial Corp. | NY | 03/07/17 | 2,230 | 35.4 | 40.6 | 9.9 | 48.4 | 14,559 | 9.7 | 0.48 | 1.70 | |||||||||||||||||||||||||||||||||||||||||
| Community Bank System Inc. | NY | Merchants Bancshares Inc. | VT | 10/24/16 | 21.4 | 18.7 | 10.9 | 34.0 | 1,995 | 7.6 | 0.72 | 0.22 | ||||||||||||||||||||||||||||||||||||||||||
| People's United Financial Inc. | CT | Suffolk Bancorp | NY | 06/27/16 | 21.4 | 19.6 | 11.8 | 42.8 | 2,256 | 9.0 | 0.90 | 0.75 | ||||||||||||||||||||||||||||||||||||||||||
| Bar Harbor Bankshares | ME | Lake Sunapee Bank Grp | NH | 05/05/16 | 15.8 | — | 5.7 | 21.0 | 1,563 | 5.8 | 0.61 | 0.82 | ||||||||||||||||||||||||||||||||||||||||||
| OceanFirst Financial Corp. | NJ | Cape Bancorp Inc. | NJ | 01/05/16 | 15.4 | 23.1 | 5.3 | 19.7 | 1,602 | 9.1 | 0.84 | 0.78 | ||||||||||||||||||||||||||||||||||||||||||
| KeyCorp | OH | First Niagara Finl Group | NY | 10/30/15 | 4,007 | 19.3 | 19.0 | 6.7 | 9.8 | 39,413 | 6.3 | 0.62 | 0.74 | |||||||||||||||||||||||||||||||||||||||||
| BB&T Corp. | NC | National Penn Bancshares Inc. | PA | 08/17/15 | 1,816 | 17.7 | 16.8 | 15.5 | 18.2 | 9,604 | 8.9 | 1.12 | 0.54 | |||||||||||||||||||||||||||||||||||||||||
| F.N.B. Corp. | PA | Metro Bancorp Inc. | PA | 08/04/15 | 22.7 | 19.5 | 9.4 | 32.1 | 3,001 | 8.9 | 0.71 | 1.75 | ||||||||||||||||||||||||||||||||||||||||||
| High | 4,007 | 35.4 | 63.2 | 19.0 | 48.4 | 39,413 | 18.9 | 2.82 | 1.75 | |||||||||||||||||||||||||||||||||||||||||||||
| Low | 7.8 | 16.8 | 3.0 | 1.3 | 1,525 | 5.8 | 0.37 | 0.22 | ||||||||||||||||||||||||||||||||||||||||||||||
| Mean | 20.1 | 30.0 | 10.2 | 23.4 | 6,928 | 9.4 | 0.88 | 0.82 | ||||||||||||||||||||||||||||||||||||||||||||||
| Median | 19.3 | 19.6 | 10.4 | 21.0 | 2,256 | 8.9 | 0.72 | 0.74 | ||||||||||||||||||||||||||||||||||||||||||||||
| RODNEY | DE | BISHOP | PA | 1,510 | 53.9 | 34.7 | 16.7 | 21.6 | 5,770 | 15.2 | 0.75 | 0.36 | ⁴ | |||||||||||||||||||||||||||||||||||||||||
| 32.7 | ² | ³ |
| (1) | Nonperforming assets defined as nonaccrual loans and leases, renegotiated loans and leases, and real estate owned |
| (2) | Reflects price/YTD annualized earnings per share as of June 30, 2018 |
| (3) | Reflects multiple paid on a “normalized” TCE/TA of 9.00% and dollar for dollar on all excess capital |
| (4) | Bank level financial data as of June 30, 2018 |
| Note: | Includes Mid Atlantic and Northeast bank and thrift transactions announced since January 1, 2015 where target assets were greater than $1.5 billion; excludes deals with private equity buyers. |
| Source: | S&P Global Market Intelligence |
The disclosure under the heading “THE MERGERS—Opinion of Beneficial’s Financial Advisor—Analyses of Precedent Transactions” is hereby supplemented by deleting the table on the top of page 90 of the joint proxy statement/prospectus and replacing it with the following:
| Transaction Information | Seller Information | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Price/ | Core | 1-Day | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deal | LTM | Est. | Deposit | Market | Total | TCE/ | YTD | NPAs/ | ||||||||||||||||||||||||||||||||||||||||||||||
| Annc. | Value | Earnings | EPS | TBV | Premium | Premium | Assets | TA | ROAA | Assets¹ | ||||||||||||||||||||||||||||||||||||||||||||
| Acquiror | St | Target | St | Date | ($mm) | (x) | (x) | (%) | (%) | (%) | ($mm) | (%) | (%) | (%) | ||||||||||||||||||||||||||||||||||||||||
| Synovus Financial Corp. | GA | FCB Financial Holdings Inc. | FL | 07/24/18 | 2,854 | 21.5 | 15.8 | 24.0 | (1.8 | ) | 11,662 | 10.0 | 1.23 | 0.23 | ||||||||||||||||||||||||||||||||||||||||
| Cadence Bancorp. | TX | State Bank Finl Corp. | GA | 05/13/18 | 1,373 | 26.2 | 15.7 | 21.7 | 5.9 | 4,892 | 11.5 | 1.15 | 0.47 | |||||||||||||||||||||||||||||||||||||||||
| Banco de Credito e Inversiones | TotalBank | FL | 12/01/17 | 22.6 | — | 11.7 | — | 3,042 | 11.8 | 0.78 | 0.79 | |||||||||||||||||||||||||||||||||||||||||||
| Associated Banc-Corp | WI | Bank Mutual Corp. | WI | 07/20/17 | 28.8 | 27.3 | 11.2 | 12.2 | 2,668 | 10.8 | 0.61 | 0.50 | ||||||||||||||||||||||||||||||||||||||||||
| OceanFirst Financial Corp. | NJ | Sun Bancorp Inc. | NJ | 06/30/17 | 7.8 | 63.2 | 12.7 | 1.3 | 2,256 | 12.8 | 2.82 | 0.28 | ||||||||||||||||||||||||||||||||||||||||||
| Union Bkshs Corp | VA | Xenith Bankshares Inc. | VA | 05/22/17 | 10.1 | 27.5 | 11.9 | 10.4 | 3,199 | 13.9 | 2.16 | 1.82 | ||||||||||||||||||||||||||||||||||||||||||
| First Horizon National Corp. | TN | Capital Bank Finl Corp | NC | 05/04/17 | 2,190 | 28.2 | 21.3 | 16.8 | (2.9 | ) | 10,098 | 10.6 | 0.81 | 0.78 | ||||||||||||||||||||||||||||||||||||||||
| Home BancShares Inc. | AR | Stonegate Bank | FL | 03/27/17 | 22.9 | 19.4 | 21.1 | 6.3 | 2,902 | 10.2 | 1.13 | 0.70 | ||||||||||||||||||||||||||||||||||||||||||
| Sterling Bancorp | NY | Astoria Financial Corp. | NY | 03/07/17 | 2,230 | 35.4 | 40.6 | 9.9 | 48.4 | 14,559 | 9.7 | 0.48 | 1.70 | |||||||||||||||||||||||||||||||||||||||||
| Simmons First National Corp. | AR | Southwest Bancorp Inc. | OK | 12/14/16 | 36.2 | 34.1 | 18.7 | 25.0 | 2,468 | 10.9 | 0.68 | 1.11 | ||||||||||||||||||||||||||||||||||||||||||
| High | 2,854 | 36.2 | 63.2 | 24.0 | 48.4 | 14,559 | 13.9 | 2.82 | 1.82 | |||||||||||||||||||||||||||||||||||||||||||||
| Low | 7.8 | 15.7 | 9.9 | (2.9 | ) | 2,256 | 9.7 | 0.48 | 0.23 | |||||||||||||||||||||||||||||||||||||||||||||
| Mean | 1,219 | 24.0 | 29.4 | 16.0 | 8.3 | 5,775 | 11.2 | 1.18 | 0.84 | |||||||||||||||||||||||||||||||||||||||||||||
| Median | 24.5 | 27.3 | 14.7 | 6.3 | 3,120 | 10.9 | 0.97 | 0.74 | ||||||||||||||||||||||||||||||||||||||||||||||
| RODNEY | DE | BISHOP | PA | 1,510 | 53.9 | 34.7 | 16.7 | 21.6 | 5,770 | 15.2 | 0.75 | 0.36 | ³ | |||||||||||||||||||||||||||||||||||||||||
| 32.7 | ² |
| (1) | Nonperforming assets defined as nonaccrual loans and leases, renegotiated loans and leases, and real estate owned |
| (2) | Reflects price/YTD annualized earnings per share as of June 30, 2018 |
| (3) | Bank level financial data as of June 30, 2018 |
| Note: | Includes nationwide bank and thrift transactions announced between November 8, 2016 where target assets were >$2 billion and TCE/TA at announcement was >9.50%; excludes deals with private equity buyers. |
| Source: | S&P Global Market Intelligence |
The disclosure under the heading “THE MERGERS—Opinion of Beneficial’s Financial Advisor—Beneficial and WSFS Net Present Value Analysis” is hereby supplemented by amending and restating the first paragraph of this section on page 90 of the joint proxy statement/prospectus to read as follows:
Beneficial and WSFS Net Present Value Analyses. Sandler O’Neill performed an analysis that estimated the net present value per share of Beneficial common stock, assuming Beneficial performed in accordance with publicly available median analyst earnings per share estimates for the years ending December 31, 2018 and December 31, 2019 and dividend and long-term annual earnings per share growth rate assumptions for Beneficial for the years ending December 31, 2020 through December 31, 2022, as provided by the senior management of Beneficial. To approximate the terminal value of a share of Beneficial common stock at December31, 2022, Sandler O’Neill applied price to earnings per share multiples ranging from 14.0x to 19.0x to estimated earnings per share of $0.66 for the year ended December 31, 2022, and multiples of December31, 2022 tangible book value per share of $13.21 ranging from 130% to 193%. Sandler O’Neill selected these price to earnings and tangible book value multiples based on Sandler O’Neill’s review of, among other matters, the trading multiples of selected companies that Sandler O’Neill deemed to be comparable to Beneficial. The terminal values were then discounted to present values using different discount rates ranging from 8.0% to 13.0%, which were chosen to reflect different assumptions regarding required rates of return of holders or prospective buyers of Beneficial common stock. As illustrated in the following tables, the analysis indicated an imputed range of values per share of Beneficial common stock of $6.17 to $9.83 when applying multiples of 2022 earnings per share and $10.92 to $19.26 when applying multiples of December 31, 2022 tangible book value per share.
The disclosure under the heading “THE MERGERS—Opinion of Beneficial’s Financial Advisor—Beneficial and WSFS Net Present Value Analysis” is hereby supplemented by amending and restating the second full paragraph on page 91 of the joint proxy statement/prospectus to read as follows:
Sandler O’Neill then performed an analysis that estimated the net present value per share of WSFS common stock, assuming WSFS performed in accordance with publicly available median analyst earnings per share and annual balance sheet growth rate estimates for WSFS for the years ending December 31, 2018 and December 31, 2019 and long-term annual earnings per share growth rate and long-term annual asset growth rate assumptions for WSFS for the years ending December 31, 2020 through December 31, 2022, as provided by the senior management of WSFS. Sandler O’Neill assumed that WSFS would maintain a tangible common equity to tangible assets ratio of 8.4% and would retain sufficient earnings to maintain that level. To approximate the terminal value of a share of WSFS common stock at December31, 2022, Sandler O’Neill applied price to earnings per share multiples ranging from 13.0x to 18.0x to estimated earnings per share of $4.85 for the year ended December 31, 2022, and multiples of December31, 2022 tangible book value of $22.92 per share ranging from 200% to 300%. Sandler O’Neill selected these price to earnings and tangible book value multiples based on Sandler O’Neill’s review of, among other matters, the trading multiples of selected companies that Sandler O’Neill deemed to be comparable to WSFS. The terminal values were then discounted to present values using different discount rates ranging from 8.0% to 13%, which were chosen to reflect different assumptions regarding required rates of return of holders or prospective buyers of WSFS common stock. As illustrated in the following tables, the analysis indicated an imputed range of values per share of WSFS common stock of $46.74 to $73.48 when applying multiples of 2022 earnings per share and $37.00 to $60.59 when applying multiples of December31, 2022 tangible book value share.
The disclosure under the heading “THE MERGERS—Opinion of Beneficial’s Financial Advisor—Beneficial and WSFS Net Present Value Analyses” is hereby supplemented by adding the following table after the Illustrative Earnings Variance Impact on WSFS Net Present Value Analysis chart on page 92 of the joint proxy statement/prospectus:
The following table describes the discount rate calculation for Beneficial common stock and WSFS common stock prepared by Sandler O’Neill. In its normal course of business, Sandler O’Neill employs the Duff & Phelps valuation handbook in determining an appropriate discount rate in which the discount rate equals the sum of the risk free rate, the equity risk premium the size premium and the industry premium.
| Risk Free Rate | 3.50% | Based on normalized 10 year U.S. Treasury |
| Equity Risk Premium | 5.00% | Per Duff & Phelps 2018 Valuation Handbook |
| Size Premium | 1.64% | Per Duff & Phelps 2018 Valuation Handbook |
| Industry Premium | 0.70% | Per Duff & Phelps 2018 Valuation Handbook |
| Discount Rate | 10.84 |
Important Additional Information Filed with the SEC
This Current Report on Form 8-K does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the proposed acquisition by WSFS of Beneficial (the “Proposed Transaction”). No offer of securities shall be made except by means of a prospectus meeting the requirements of the Securities Act of 1933, as amended, and no offer to sell or solicitation of an offer to buy shall be made in any jurisdiction in which such offer, solicitation or sale would be unlawful.
In connection with the Proposed Transaction, WSFS has filed with the Securities and Exchange Commission (the “SEC”) a Registration Statement on Form S-4 (File No. 333-227573) (the “Registration Statement”) that includes a joint proxy statement of WSFS and Beneficial and a prospectus of WSFS, and each of WSFS and Beneficial may file with the SEC other relevant documents concerning the Proposed Transaction. The definitive joint proxy statement/prospectus was first mailed to stockholders of WSFS and Beneficial on or about November 6, 2018. Stockholders are urged to read the Registration Statement and the joint proxy statement/prospectus regarding the Proposed Transaction carefully and in their entirety and any other relevant documents filed with the SEC by WSFS and Beneficial, as well as any amendments or supplements to those documents, because they contain important information about the Proposed Transaction.
Free copies of the Registration Statement and the joint proxy statement/prospectus, as well as other filings containing information about WSFS and Beneficial, may be obtained at the SEC’s website (http://www.sec.gov). You are also able to obtain these documents, free of charge, by directing a request to WSFS Financial Corporation, WSFS Bank Center, 500 Delaware Avenue, Wilmington, Delaware 19801 or by directing a request to Beneficial Bancorp, Inc., Beneficial Bank Place, 1818 Market Street, Philadelphia, Pennsylvania 19103.
Participants in the Solicitation
WSFS, Beneficial and certain of their respective directors, executive officers and employees may be deemed to be participants in the solicitation of proxies from the stockholders of WSFS or Beneficial in respect of the Proposed Transaction. Information about WSFS’s directors and executive officers is available in its proxy statement for its 2018 annual meeting of stockholders, which was filed with the SEC on March 23, 2018, and information regarding Beneficial’s directors and executive officers is available in its proxy statement for its 2018 annual meeting of stockholders, which was filed with the SEC on March 8, 2018. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, is contained in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available. Free copies of this document may be obtained as described in the preceding paragraph.
Forward-Looking Statements
This Current Report on Form 8-K contains estimates, predictions, opinions, projections and other “forward-looking statements” as that phrase is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, statements relating to the impact WSFS expects its proposed acquisition of Beneficial to have on the combined entity’s operations, financial condition, and financial results, and WSFS’s expectations about its ability to successfully integrate the combined businesses and the amount of cost savings and overall operational efficiencies WSFS expects to realize as a result of the proposed acquisition. The forward-looking statements also include predications or expectations of future business or financial performance as well as 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 (many of which are beyond the control of WSFS and Beneficial) 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, the possibility that the proposed acquisition does not close when expected or at all because required regulatory, stockholder or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all, the failure to close for any other reason, changes in WSFS’s share price before closing, that the businesses of WSFS and Beneficial will not be integrated successfully, that the cost savings and any synergies from the proposed acquisition may not be fully realized or may take longer to realize than expected, disruption from the proposed acquisition making it more difficult to maintain relationships with employees, customers or other parties with whom WSFS or Beneficial have business relationships, diversion of management time on merger-related issues, risks relating to the potential dilutive effect of shares of WSFS common stock to be issued in the transaction, the reaction to the transaction of the companies’ customers, employees and counterparties and other factors, many of which are beyond the control of WSFS and Beneficial. We refer you to the “Risk Factors” section of the joint proxy statement/prospectus and to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of WSFS’s Annual Report on Form 10-K for the year ended December 31, 2017, the Annual Report on Form 10-K filed by Beneficial for the year ended December 31, 2017 and any updates to those risk factors set forth in WSFS’s and Beneficial’s Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings, which have been filed by WSFS and Beneficial with the SEC and are available on the SEC’s website at www.sec.gov. All forward-looking statements, expressed or implied, included in this Current Report on Form 8-K are expressly qualified in their entirety by the cautionary statements contained or referred to herein. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on WSFS, Beneficial or their respective businesses or operations. 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. Neither WSFS nor Beneficial undertakes any obligation, and specifically declines any obligation, to revise or update any forward-looking statements, whether as a result of new information, future developments or otherwise.
About WSFS Financial Corporation (NASDAQ:WSFS)
WSFS Financial Corporation is a savings and loan holding company. The Company’s subsidiary is Wilmington Savings Fund Society, FSB (WSFS Bank or the Bank), which is the bank and trust company. It operates in three segments: WSFS Bank, Cash Connect and Wealth Management. The WSFS Bank segment provides loans and other financial products to commercial and retail customers. Its Cash Connect segment provides automated teller machine (ATM) services through strategic partnerships with several of the network, manufacturers and service providers in the ATM industry. The Wealth Management segment provides a range of fiduciary, investment management, credit and deposit products to clients. Its banking business is commercial lending funded by customer-generated deposits. It also offers a range of consumer loan products, retail securities and insurance brokerage services. Its subsidiaries include WSFS Wealth Investments, 1832 Holdings, Inc., Monarch and West Capital Management.
