Stockholders' Equity and Regulatory Capital

12 Months Ended

Dec. 31, 2020

STOCKHOLDERS’ EQUITY AND REGULATORY CAPITAL

14. STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL

Savings associations such as the Bank are subject to regulatory capital requirements administered by various banking regulators. Failure to meet minimum capital requirements could result in certain actions by regulators that could have a material effect on the Company’s Consolidated Financial Statements. Risk-based capital requirements applicable to bank holding companies and depository institutions include a minimum common equity Tier 1 capital ratio of 4.50% of risk-weighted assets, a minimum Tier 1 capital ratio of 6.00% of risk-weighted assets, and a current minimum total capital ratio of 8.00% of risk-weighted assets and a minimum Tier 1 leverage capital ratio of 4.00% of average assets.

As of December 31, 2020 and 2019, the Bank was in compliance with regulatory capital requirements and exceeded the amounts required to be considered “well capitalized” as defined in the regulations.

The following table presents the capital position of the Bank and the Company as of December 31, 2020 and 2019:


	Consolidated Bank Capital				For Capital Adequacy Purposes				To Be Well-Capitalized Under Prompt Corrective Action Provisions
(Dollars in thousands)	Amount		Percent		Amount		Percent		Amount		Percent
December 31, 2020
Total Capital (to risk-weighted assets)
Wilmington Savings Fund Society, FSB	$	1,412,290	13.76	%	$	821,012	8.00	%	$	1,026,265	10.00	%
WSFS Financial Corporation	1,415,780		13.76		823,355		8.00		1,029,194		10.00
Tier 1 Capital (to risk-weighted assets)
Wilmington Savings Fund Society, FSB	1,283,022		12.50		615,759		6.00		821,012		8.00
WSFS Financial Corporation	1,286,150		12.50		617,517		6.00		823,355		8.00
Common Equity Tier 1 Capital (to risk-weighted assets)
Wilmington Savings Fund Society, FSB	1,283,022		12.50		461,819		4.50		667,073		6.50
WSFS Financial Corporation	1,221,150		11.87		463,137		4.50		668,976		6.50
Tier 1 Leverage Capital
Wilmington Savings Fund Society, FSB	1,283,022		9.74		526,803		4.00		658,503		5.00
WSFS Financial Corporation	1,286,150		9.76		527,192		4.00		658,990		5.00

December 31, 2019
Total Capital (to risk-weighted assets)
Wilmington Savings Fund Society, FSB	$	1,414,791	14.01	%	$	807,877	8.00	%	$	1,009,846	10.00	%
WSFS Financial Corporation	1,394,666		13.78		809,730		8.00		1,012,162		10.00
Tier 1 Capital (to risk-weighted assets)
Wilmington Savings Fund Society, FSB	1,365,186		13.52		605,908		6.00		807,877		8.00
WSFS Financial Corporation	1,345,061		13.29		607,297		6.00		809,730		8.00
Common Equity Tier 1 Capital (to risk-weighted assets)
Wilmington Savings Fund Society, FSB	1,365,186		13.52		454,431		4.50		656,400		6.50
WSFS Financial Corporation	1,280,061		12.65		455,473		4.50		657,906		6.50
Tier 1 Leverage Capital
Wilmington Savings Fund Society, FSB	1,365,186		11.72		466,003		4.00		582,504		5.00
WSFS Financial Corporation	1,345,061		11.54		466,088		4.00		582,610		5.00

The Holding Company

As of December 31, 2020, the Company's capital structure includes one class of stock, $0.01 par common stock outstanding with each share having equal voting rights.

In 2005, the Trust, the Company's unconsolidated subsidiary, issued Pooled Floating Rate Securities at a variable interest rate of 177 basis points over the three-month LIBOR rate with a scheduled maturity of June 1, 2035. The par value of these securities is $2.0 million and the aggregate principal is $67.0 million. The proceeds from the issue were invested in Junior Subordinated Debentures issued by the Company. These securities are treated as borrowings with interest included in Interest on trust preferred borrowings on the Consolidated Statements of Income and included in Trust preferred borrowings in the Consolidated Statements of Financial Condition. At December 31, 2020, the coupon rate of the Trust securities was 2.00%. The effective rate will vary due to fluctuations in interest rates.

When infused into the Bank, the Trust preferred borrowings issued in 2005 qualify as Tier 1 capital. The Bank is prohibited from paying any dividend or making any other capital distribution if, after making the distribution, the Bank would be under-capitalized within the meaning of the Prompt Corrective Action regulations.

At December 31, 2020, $244.9 million in cash remains at the holding company to support the parent company’s needs.

Pursuant to federal laws and regulations, the Company's ability to engage in transactions with affiliated corporations, including the loan of funds to, or guarantee of the indebtedness of, an affiliate, is limited.

During the year ended December 31, 2020, the Company repurchased 3,950,855 common shares at an average price of $39.21 per share as part of its share buy-back program approved by the Board of Directors. The program is consistent with the Company's intent to return a minimum of 25% of annual net income to stockholders through dividends and share repurchases while maintaining capital ratios in excess of regulatory minimums, and in the case of the Bank, the “well-capitalized” benchmarks.