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WSFS Reports 1Q 2024 ROA of 1.28% and EPS of $1.09; Annualized Loan Growth of 7%; Reflects Balance Sheet Strength and Diverse Business Model
Selected financial results and metrics are as follows:
(Dollars in millions, except per share data) 1Q 2024 4Q 2023 1Q 2023
-------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- ------- --------------------
Net interest income $ 175.3 $ 178.1 $ 182.5
Fee revenue 75.9 87.2 63.1
Total net revenue 251.1 265.3 245.7
Provision for credit losses 15.1 24.8 29.0
Noninterest expense 149.1 147.6 133.0
Net income attributable to WSFS 65.8 63.9 62.4
Pre-provision net revenue (PPNR)(1) 102.1 117.7 112.6
Earnings per share (EPS) (diluted) 1.09 1.05 1.01
Return on average assets (ROA) (a) 1.28 % 1.25 % 1.27 %
Return on average equity (ROE) (a) 10.7 11.1 11.2
Fee revenue as % of total net revenue 30.2 32.8 25.6
Efficiency ratio 59.3 55.6 54.0
GAAP results for the quarterly periods shown included items that are excluded from core results. Below is a summary of the financial effects of these items. Refer to the "Non-GAAP Reconciliation" at the end of the press release for further detail.
1Q 2024 4Q 2023 1Q 2023
---------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------------
(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)
--------------------------------------------- ----------------------------------------------- --------------------------- ------------------------------ ------------------------------------------------------ ------------------------------------------------------
Fee revenue $ (0.6 ) $ (0.01 ) $ 9.2 $ 0.11 $ (0.6 ) $ (0.01 )
Noninterest expense 1.5 0.02 7.9 0.09 -- --
(1) As used in this press release, PPNR is a non-GAAP financial measure that adjusts net income determined in accordance with GAAP to exclude the impacts of (i) income tax provision and (ii) provision for credit losses. For a reconciliation of this and other non-GAAP financial measures to their comparable GAAP measures, see "Non-GAAP Reconciliation" at the end of the press release.
CEO Commentary
Rodger Levenson, Chairman, CEO and President, said, "Despite a challenging operating environment, we are pleased to report first quarter earnings of a core EPS(3) of $1.11 and accompanying core ROA(3) of 1.31%. Our results were highlighted by annualized loan growth of 7% across both Commercial and Consumer business lines and continued solid, diversified core fee revenue(3) of $76.5 million. Deposit levels remained essentially flat excluding the reduction of corporate trust deposits, which can vary from quarter to quarter, and the net interest margin of 3.84% reflects continued competitive market conditions.
"Overall asset quality metrics remained stable and included reductions in both NPAs and net charge-offs. In light of the continued uncertain economic and interest rate environment, we remain very focused on prudently strengthening our balance sheet. This includes ongoing proactive credit risk management and a continued build of our ACL reserves which stood at 1.48% of total loans and leases at quarter end. Bank capital levels remain strong with CET1 at 14.00% and total risk based capital at 15.25% and above "well-capitalized" including the full impact of AOCI.
"During the quarter, we were honored to be named a recipient of both the Gallup Exceptional Workplaces for the eighth time since 2016 and Forbes America's Best Banks 2024. These recognitions are a direct result of our over 2,200 associates who continue to live our mission of 'We Stand for Service'."
(3) As used in this press release, core EPS, core ROA and core fee revenue are non-GAAP financial measures. These non-GAAP financial measures exclude certain pre-tax adjustments and the tax impact of such adjustments. For a reconciliation of these and other non-GAAP financial measures to their comparable GAAP measures, see "Non-GAAP Reconciliation" at the end of the press release.
Highlights for 1Q 2024:
Core EPS was $1.11 compared to $1.15 for 4Q 2023. Core ROA was 1.31% compared to 1.36% for 4Q 2023. Gross loan growth of 2% (7% annualized) from 4Q 2023 driven primarily by growth across the commercial portfolio and our consumer partnership with Spring EQ (home equity loans). Customer deposits decreased by $235.2 million, or 1% (6% annualized) for the quarter, primarily driven by a $207.4 million decrease in expected trust deposit activity and $81.9 million from a short-term commercial deposit. Core fee revenue (noninterest income) of $76.5 million, a decrease of $1.5 million, or 2% (not annualized), compared to 4Q 2023, primarily due to lower income from our equity position in Spring EQ, which was sold in 4Q 2023. Net interest margin of 3.84% compared to 3.99% for 4Q 2023, reflects lagging increases in deposit pricing following rate hikes in 2023. Total net credit costs were $16.2 million, down from $25.4 million for 4Q 2023 due to lower provision on our NewLane and Upstart portfolios. WSFS Bank capital ratios remain significantly above "well-capitalized" levels, with total risk-based capital of 15.25% and Common Equity Tier 1 of 14.00%. WSFS repurchased 492,368 shares of common stock at an average price of $42.62 per share, totaling an aggregate of $21.0 million. The Board of Directors also approved a quarterly cash dividend of $0.15 per share. Tangible common book value (TBV) per share(4) increased by $0.19 to $24.52 Recorded a $1.3 million expense for the FDIC Special Assessment as a result of the FDIC's revised estimated losses related to the closures of certain banks in 2023.
(4) As used in this press release, TBV per share is a non-GAAP financial measure. This non-GAAP financial measure excludes certain pre-tax adjustments and the tax impact of such adjustments. For a reconciliation of this and other non-GAAP financial measures to their comparable GAAP measures, see "Non-GAAP Reconciliation" at the end of the press release.
First Quarter 2024 Discussion of Financial Results
Balance Sheet
The following table summarizes loan and lease balances and composition at March 31, 2024 compared to December 31, 2023 and March 31, 2023:
Loans and Leases
---------------------------------------------- -------------------- ------------------------------ -------------------- ---------------------------------------------- -------------------- ------------------------------ -------------------- ---------------------------------------------- -------------------- ------------------------------
(Dollars in millions) March 31, 2024 December 31, 2023 March 31, 2023
------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------
Commercial & industrial (C&I) $ 4,489 35 % $ 4,443 35 % $ 4,443 37 %
Commercial mortgage 3,877 30 3,801 30 3,473 29
Construction 1,056 8 1,036 8 1,024 8
Commercial small business leases 634 5 624 5 577 5
-------------------- ------ -------------------- ---------- -------------------- -------------------- ------ -------------------- ---------- -------------------- -------------------- ------ -------------------- ---------- --------------------
10,056 78 9,904 78 9,517 79
Total commercial loans and leases
Residential mortgage 888 7 882 7 801 6
Consumer 2,066 17 2,012 16 1,868 16
-------------------- ------ -------------------- ---------- -------------------- -------------------- ------ -------------------- ---------- -------------------- -------------------- ------ -------------------- ---------- --------------------
13,010 102 % 12,798 101 % 12,186 101 %
Gross loans and leases
ACL (193 ) (2 ) (186 ) (1 ) (169 ) (1 )
-------------------- ------ -------------------- ---------- -------------------- -------------------- ------ -------------------- ---------- -------------------- -------------------- ------ -------------------- ---------- --------------------
At March 31, 2024, WSFS' gross loan and lease portfolio increased $212.0 million, or 2% (7% annualized), when compared with December 31, 2023 primarily due to increases of $75.7 million in commercial mortgage, $53.7 million in consumer loans (primarily from Spring EQ home equity loans) and $45.5 million in C&I.
The C&I portfolio (including owner-occupied real estate) continued to be our largest portfolio at 35% of net loans and leases. Additionally, our total commercial loan and lease portfolio continues to represent a majority of our lending portfolio at 78% of net loans and leases.
Gross loans and leases at March 31, 2024 increased $823.9 million, or 7%, when compared with March 31, 2023. The increase was driven by increases of $403.8 million in commercial mortgage, $197.4 million in consumer loans (primarily from Spring EQ home equity loans), $87.0 million in residential mortgage, $57.2 million in commercial small business leases, and $45.8 million in C&I.
The following table summarizes customer deposit balances and composition at March 31, 2024 compared to December 31, 2023 and March 31, 2023:
Customer Deposits
------------------------------ -------------------- ------------------------------ -------------------- ------------------------------ -------------------- ------------------------------ -------------------- ------------------------------ -------------------- ------------------------------
(Dollars in millions) March 31, 2024 December 31, 2023 March 31, 2023
-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- --------------------------------------------------------------------------------
Noninterest demand $ 4,653 29 % $ 4,917 30 % $ 5,299 33 %
Interest-bearing demand 2,856 18 2,936 18 3,159 20
Savings 1,577 10 1,610 10 1,967 13
Money market 5,206 31 5,175 31 4,002 25
-------------------- ---------- ---------- -------------------- -------------------- ---------- ---------- -------------------- -------------------- ---------- ---------- --------------------
14,292 88 14,638 89 14,427 91
Total core deposits
Customer time deposits 1,895 12 1,784 11 1,453 9
-------------------- ---------- ---------- -------------------- -------------------- ---------- ---------- -------------------- -------------------- ---------- ---------- --------------------
Total customer deposits decreased $235.2 million, or 1% (6% annualized), when compared with December 31, 2023, primarily driven by a $207.4 million decrease in expected trust deposit activity and $81.9 million from a short-term commercial deposit.
Customer deposits increased by $306.8 million from March 31, 2023 primarily due to short-term deposit increases in the Wealth and Trust business lines.
Our deposit base remains highly diverse, with more than half of our customer deposits, or 52%, coming from our Commercial, Small Business, Wealth and Trust business lines. The loan-to-deposit ratio(5) was 79% at March 31, 2024, reflecting continued capacity to fund future loan growth.
Core deposits were a strong 88% of total customer deposits. While customer deposits continue to shift into higher interest-bearing accounts, no- and low-cost checking accounts represented 47% of total customer deposits at March 31, 2024, with a weighted average cost of 39bps for the quarter.
(5) Ratio of net loans and leases to total customer deposits.
Net Interest Income
Three Months Ending
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(Dollars in millions) March 31, 2024 December 31, 2023 March 31, 2023
---------------------------------------------- ---------------------------------------------- ----------------------------------------------
Net interest income before purchase accretion $ 173.1 $ 174.8 $ 179.1
Purchase accounting accretion 2.2 3.3 3.4
-------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------ --------------------
$ 175.3 $ 178.1 $ 182.5
Net interest income
==================== ====== ==================== ==================== ====== ==================== ==================== ====== ====================
Net interest margin before purchase accretion 3.79 % 3.92 % 4.17 %
Purchase accounting accretion 0.05 0.07 0.08
-------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------ --------------------
Net interest income decreased $2.8 million, or 2% (not annualized), compared to 4Q 2023 and decreased $7.3 million, or 4%, compared to 1Q 2023, primarily driven by lagging increases in deposit pricing following rate hikes in 2023.
Total loan yields were 7.02%, and remained flat when compared to 4Q 2023. Total customer deposit costs were 1.79%, an increase of 17bps compared to 4Q 2023 and customer interest-bearing deposit costs were 2.55%, an increase of 20bps compared to 4Q 2023.
Net interest margin decreased 15bps from 4Q 2023 and decreased 41bps from 1Q 2023, primarily due to the reasons noted above.
Asset Quality
The following table summarizes asset quality metrics as of and for the period ended March 31, 2024 compared to December 31, 2023 and March 31, 2023.
(Dollars in millions) March 31, 2024 December 31, 2023 March 31, 2023
--------------------------------------------- --------------------------------------------- ---------------------------------------------
Problem assets(6) $ 573.2 $ 555.7 $ 416.7
Nonperforming assets 67.2 75.8 33.1
Delinquencies 104.5 101.9 100.5
Net charge-offs 8.6 14.7 11.7
Total net credit costs (recoveries) (r) 16.2 25.4 29.0
Problem assets to total Tier 1 capital plus ACL 23.42 % 23.44 % 18.65 %
Classified assets to total Tier 1 capital plus ACL 17.56 17.29 15.38
Ratio of nonperforming assets to total assets 0.33 0.37 0.16
Delinquencies to gross loans (n) 0.81 0.80 0.83
Ratio of quarterly net charge-offs to average gross loans 0.27 0.46 0.40
Ratio of allowance for credit losses to total loans and leases (q) 1.48 1.46 1.39
Ratio of allowance for credit losses to nonaccruing loans 292 251 528
Overall asset quality metrics remained stable and reflect continued credit normalization from prior favorable levels. Problem assets to total Tier 1 capital plus ACL ratio of 23.42% decreased 2bps from December 31, 2023. Delinquencies of $104.5 million or 81bps of gross loans increased $2.6 million, or 1bps compared to December 31, 2023.
Nonperforming assets decreased $8.6 million, or 4bps of total assets, compared to December 31, 2023 driven by the resolution of two nonperforming C&I loans. Net charge-offs decreased $6.0 million to $8.6 million, or 0.27% (annualized) of average gross loans during the quarter, due to lower charge-offs in our C&I and Construction portfolios. Excluding NewLane and Upstart, net charge-offs were a net recovery of $0.8 million.
Total net credit costs were $16.2 million in the quarter compared to $25.4 million in 4Q 2023, primarily due to lower provision on our NewLane and Upstart portfolios. The ACL was $192.6 million as of March 31, 2024, an increase of $6.5 million from December 31, 2023. The ACL coverage ratio was 1.48%, an increase of 2bps from December 31, 2023. The increase in ACL from the prior quarter was primarily due to specific reserves for two nonperforming C&I relationships.
(6) Problem assets includes all criticized, classified, and nonperforming loans as well as other real estate owned (OREO).
Core Fee Revenue
Fee business, including Wealth Management, Cash Connect(R), capital markets and mortgage banking, continue to perform well, as expected, and reflect the investments we are making to diversify our fee businesses. Core fee revenue (noninterest income) decreased $1.5 million, or 2% (not annualized), compared to 4Q 2023 to $76.5 million, resulting from $3.5 million of lower income from our equity position in Spring EQ, which was sold in 4Q 2023. Excluding the impact from Spring EQ, fee revenue increased, mainly due to an additional $3.3 million in Cash Connect(R) driven by ATM vault cash units added during the fourth quarter of 2023.
Core fee revenue increased $12.8 million, or 20%, compared to 1Q 2023. The increase was primarily driven by $8.2 million from Cash Connect(R) due to the addition of ATM vault cash units during the fourth quarter of 2023 and the higher rate environment and $2.3 million from our Wealth and Trust business lines.
For 1Q 2024, our core fee revenue ratio(7) was 30.3% compared to 30.4% in 4Q 2023 and 25.8% in 1Q 2023. Fee revenue is a competitive differentiator providing a well-diversified source of revenue with further growth opportunities expected across all sources.
(7) As used in this press release, core fee revenue ratio is a non-GAAP financial measure. This non-GAAP financial measure excludes certain pre-tax adjustments and the tax impact of such adjustments. For a reconciliation of this and other non-GAAP financial measures to their comparable GAAP measures, see "Non-GAAP Reconciliation" at the end of the press release.
Core Noninterest Expense(8)
Core noninterest expense of $147.6 million increased $7.8 million, or 6% (not annualized), compared to 4Q 2023. Core noninterest expenses included a one-time benefit of approximately $3.2 million in 1Q 2024, reflecting lower actual incentive payments made for 2023 and $3.9 million of net favorable one-time adjustments in 4Q 2023 related to certain employee benefit plan valuations that were partially offset by accelerated costs associated with the closure of a branch. Excluding these nonrecurring items, expenses increased $7.2 million over the prior quarter. The increase was mostly due to Cash Connect(R) external funding costs, which increased $5.2 million from $8.3 million to $13.5 million compared to 4Q 2023. The remainder of the increase in expenses for the quarter was primarily driven by higher 401(k) expense and payroll taxes associated with annual incentive payouts made during the first quarter.
Core noninterest expense increased $14.5 million, or 11%, compared to 1Q 2023. The increase was primarily due to $7.7 million from Cash Connect(R) external funding costs, $3.0 million in salaries and benefits, $1.1 million in loan workout and OREO expenses, and $1.1 million in uninsured losses.
Our core efficiency ratio(8) was 58.6% in 1Q 2024, compared to 54.5% in 4Q 2023 and 53.9% in 1Q 2023.
Income Taxes
We recorded a $21.2 million income tax provision in 1Q 2024, compared to $29.4 million in 4Q 2023 and $20.9 million in 1Q 2023.
The effective tax rate was 24.4% in 1Q 2024 compared to 31.6% in 4Q 2023 and 25.0% in 1Q 2023. The decrease in effective tax rate for 1Q 2024 compared to 4Q 2023 was primarily driven by the surrender of BOLI policies during the prior quarter.
(8) As used in this press release, core noninterest expense and core efficiency ratio are non-GAAP financial measures. These non-GAAP financial measures exclude certain pre-tax adjustments and the tax impact of such adjustments. For a reconciliation of these and other non-GAAP financial measures to their comparable GAAP measures, see "Non-GAAP Reconciliation" at the end of the press release.
Capital Management
Capital levels remain strong and are all substantially in excess of the "well-capitalized" regulatory benchmarks at March 31, 2024 with WSFS Bank's Tier 1 leverage ratio of 11.14%, Common Equity Tier 1 capital ratio and Tier 1 capital ratio of 14.00%, and Total Risk-based capital ratio of 15.25%.
WSFS' total stockholders' equity decreased $4.2 million, or less than 1% (not annualized), during 1Q 2024. The decrease was primarily due to a decrease in accumulated other comprehensive income (AOCI) of $42.9 million driven by market-value decreases on investment securities and capital returns of $30.1 million to stockholders, comprising $21.0 million from share repurchases and $9.1 million from quarterly dividends and was partially offset by quarterly earnings of $65.8 million.
WSFS' tangible common equity(9) increased $0.1 million, or less than 1% (not annualized), compared to December 31, 2023 primarily due to scheduled amortization of intangibles offset by the reasons described above. WSFS' common equity to assets ratio was 12.02% and our tangible common equity to tangible assets ratio(9) was 7.52% at March 31, 2024, both essentially flat compared to the prior quarter.
At March 31, 2024, book value per share was $41.17, an increase of $0.24, or 1% (not annualized), from December 31, 2023, and tangible common book value per share(9) was $24.52, an increase of $0.19, or 1% (not annualized), from December 31, 2023.
During 1Q 2024, WSFS repurchased 492,368 shares of common stock for an aggregate of $21.0 million. As of March 31, 2024, WSFS has 4,849,225 shares, or approximately 8% of outstanding shares, remaining to repurchase under its current authorizations. For the year, total capital returned to stockholder through share repurchases and quarterly dividends was $30.1 million.
The Board of Directors approved a quarterly cash dividend of $0.15 per share of common stock. This dividend will be paid on May 24, 2024 to stockholders of record as of May 10, 2024.
(9) As used in this press release, tangible common equity, tangible common equity to tangible assets ratio and tangible common book value per share are non-GAAP financial measures. These non-GAAP financial measures exclude goodwill and intangible assets and the related tax-effected amortization. For a reconciliation of these and other non-GAAP financial measures to their comparable GAAP measures, see "Non-GAAP Reconciliation" at the end of the press release.
Selected Business Segments (included in previous results):
Wealth Management
The Wealth Management segment provides a broad array of planning and advisory services, investment management, trust services, credit and deposit products to individual, corporate, and institutional clients.
Selected quarterly performance results and metrics are as follows:
(Dollars in millions) March 31, 2024 December 31, 2023 March 31, 2023
------------------------------ ---------------------------------------------- ------------------------------
Net interest income $ 19.7 $ 18.3 $ 17.9
Provision for (recovery of) credit losses 0.3 (0.1 ) 1.3
Fee revenue 33.5 36.0 30.9
Noninterest expense(10) 26.4 26.9 24.2
Pre-tax income 26.5 27.5 23.4
Performance Metrics
--------------------------------------------------------
Trust fee revenue (Institutional Services and BMT of DE) $ 17.8 $ 20.9 $ 17.0
Private wealth management fee revenue 14.8 14.5 13.1
Wealth Management pre-tax income decreased $1.0 million, or 4% (not annualized) compared to 4Q 2023.
Fee revenue decreased $2.5 million from 4Q 2023, primarily due to an adjustment to deferred revenue in Institutional Services and seasonally lower activity at Bryn Mawr Trust of Delaware. Net interest income increased $1.3 million as average trust deposits were higher by $92.6 million compared to 4Q 2023. Total noninterest expense decreased $0.6 million compared to 4Q 2023 driven by lower technology-related expenses.
Wealth Management pre-tax income increased $3.1 million compared to 1Q 2023. Fee revenue increased $2.6 million, or 8%, compared to 1Q 2023 due to AUM growth in Private Wealth Management including the Rehoboth expansion and account growth in Institutional Services. Net interest income increased $1.7 million.
Net AUM of $8.9 billion at the end of 1Q 2024 increased $0.3 billion, or 4% (not annualized), compared to 4Q 2023, and increased $1.0 billion, or 12%, compared to 1Q 2023. AUM balances over the period benefited primarily from positive returns in broader equity markets.
(10) Includes intercompany allocation of expense. (11) Represents Assets Under Management and Assets Under Administration.
Cash Connect(R)
Cash Connect(R) is a premier provider of ATM vault cash, smart safe and cash logistics services in the United States, servicing non-bank ATMs and smart safes nationwide and supporting ATMs for WSFS Bank Customers with one of the largest branded ATM networks in our region.
Selected quarterly financial results and metrics are as follows:
(Dollars in millions) March 31, 2024 December 31, 2023 March 31, 2023
---------------------------------------------- ---------------------------------------------- ----------------------------------------------
Net revenue(13) $ 24.1 $ 19.0 $ 15.5
Noninterest expense(14) 23.3 17.4 14.8
Pre-tax income 0.8 1.6 0.6
Performance Metrics
------------------------------------------------
Cash managed $ 1,992 $ 1,867 $ 1,698
Number of serviced non-bank ATMs and smart safes 46,031 41,695 34,067
Number of WSFS owned and branded ATMs 583 590 691
Cash Connect(R) net revenue increased $5.1 million from 4Q 2023 driven by ATM vault cash units added during the quarter. Noninterest expense increased $6.0 million due to higher funding cost associated with the shift toward external funding and non-recurring onboarding costs for the additional units. As a result, pre-tax income decreased $0.8 million and ROA decreased 34bps to 0.83% compared to 4Q 2023.
Net revenue increased $8.6 million compared to 1Q 2023 due to the added units described above. Noninterest expense increased $8.5 million due to the reasons described above. Pre-tax income was essentially flat compared to 1Q 2023. ROA increased 38bps to 0.83% compared to 1Q 2023 due to a higher proportion of external funding.
During 1Q 2024, Cash Connect(R) added 4,336 serviced non-bank ATMs as a result of a large industry participant exiting their ATM cash vault business. Cash Connect(R) is targeting additional unit growth opportunities in 2024 as a result of the factor mentioned above.
(13) Includes intercompany allocation of income and net interest income.
First Quarter 2024 Earnings Release Conference Call
Management will conduct a conference call to review 1Q 2024 results at 1:00 p.m. Eastern Time (ET) on Friday, April 26, 2024. Interested parties may access the conference call live on our Investor Relations website (https://investors.wsfsbank.com). For those who cannot access the live conference call, a replay will be accessible shortly after the event concludes through our Investor Relations website.
About WSFS Financial Corporation
WSFS Financial Corporation is a multibillion-dollar financial services company. Its primary subsidiary, WSFS Bank, is the oldest and largest locally headquartered bank and trust company in the Greater Philadelphia and Delaware region. As of March 31, 2024, WSFS Financial Corporation had $20.6 billion in assets on its balance sheet and $80.5 billion in assets under management and administration. WSFS operates from 114 offices, 88 of which are banking offices, located in Pennsylvania (57), Delaware (40), New Jersey (14), Florida (1), Nevada (1) and Virginia (1) and provides comprehensive financial services including commercial banking, consumer banking, treasury management and trust and wealth management. Other subsidiaries or divisions include Arrow Land Transfer, Bryn Mawr Capital Management, LLC, Bryn Mawr Trust(R), The Bryn Mawr Trust Company of Delaware, Cash Connect(R), NewLane Finance(R), Powdermill(R) Financial Solutions, WSFS Institutional Services(R), WSFS Mortgage(R), and WSFS Wealth(R) Investments. Serving the Greater Delaware Valley since 1832, WSFS Bank is one of the ten oldest banks in the United States continuously operating under the same name. For more information, please visit www.wsfsbank.com.
Forward-Looking Statements
This press release contains estimates, predictions, opinions, projections and other "forward-looking statements" as that phrase is defined in the Private Securities Litigation Reform Act of 1995. Such statements include, without limitation, references to the Company's predictions or expectations of future business or financial performance as well as its goals and objectives for future operations, financial and business trends, business prospects, and management's outlook or expectations for earnings, revenues, expenses, capital levels, liquidity levels, asset quality or other future financial or business performance, strategies or expectations. The words "believe," "expect," "anticipate," "plan," "estimate," "target," "project" and similar expressions, among others, generally identify forward-looking statements. Such forward-looking statements are based on various assumptions (some of which may be beyond the Company's control) and are subject to risks and uncertainties (which change over time) and other factors which could cause actual results to differ materially from those currently anticipated. Such risks and uncertainties include, but are not limited to, difficult market conditions and unfavorable economic trends in the United States generally and in financial markets, particularly in the markets in which the Company operates and in which its loans are concentrated, including difficult and unfavorable conditions and trends related to housing markets, costs of living, unemployment levels, interest rates, supply chain issues, inflation, and economic growth; the impacts related to or resulting from bank failures and other economic and industry volatility, including potential increased regulatory requirements and costs and potential impacts to macroeconomic conditions; 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, which could impact market confidence in the Company's operations; possible additional loan losses and impairment of the collectability of loans; the Company's level of nonperforming assets and the costs associated with resolving problem loans including litigation and other costs and complying with government-imposed foreclosure moratoriums; , the credit risk associated with the substantial amount of commercial real estate, commercial and industrial, and construction and land development loans in the Company's loan portfolio; the extensive federal and state regulation, supervision and examination governing almost every aspect of the Company's operations and potential expenses associated with complying with such regulations; the Company's ability to comply with applicable capital and liquidity requirements, including its ability to generate liquidity internally or raise capital on favorable terms; possible changes in trade, monetary and fiscal policies and stimulus programs, laws and regulations and other activities of governments, agencies, and similar organizations, and the uncertainty of the short- and long-term impacts of such changes; any impairments of the Company's goodwill or other intangible assets; the success of the Company's growth plans; failure of the financial and/or operational controls of the Company's Cash Connect(R) and/or Wealth Management segments; the Company's ability to successfully integrate and fully realize the cost savings and other benefits of its acquisitions, manage risks related to business disruption following those acquisitions, and post-acquisition Customer acceptance of the Company's products and services and related Customer disintermediation; negative perceptions or publicity with respect to the Company generally and, in particular, the Company's trust and wealth management business; adverse judgments or other resolution of pending and future legal proceedings, and cost incurred in defending such proceedings; the Company's reliance on third parties for certain important functions, including the operation of its core systems, and any failures by such third parties; system failures or cybersecurity incidents or other breaches of the Company's network security, particularly given remote working arrangements; the Company's ability to recruit and retain key Associates; the effects of weather, including climate change, and natural disasters such as floods, droughts, wind, tornadoes and hurricanes as well as effects from geopolitical instability, armed conflicts, public health crises and man-made disasters including terrorist attacks; the effects of regional or national civil unrest (including any resulting branch or ATM closures or damage); possible changes in the speed of loan prepayments by the Company's Customers and loan origination or sales volumes; possible changes in market valuations and/or the speed of prepayments of mortgage-backed securities (MBS) due to changes in the interest rate environment, and the related acceleration of premium amortization on prepayments in the event that prepayments accelerate; regulatory limits on the Company's ability to receive dividends from its subsidiaries and pay dividends to its stockholders; any reputation, credit, interest rate, market, operational, litigation, legal, liquidity, regulatory and compliance risk resulting from developments related to any of the risks discussed above; any compounding effects or unexpected interactions of the risks discussed above; and other risks and uncertainties, including those discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, and other documents filed by the Company with the Securities and Exchange Commission from time to time.
The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. The Company disclaims any duty to revise or update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company for any reason, except as specifically required by law. As used in this press release, the terms "WSFS," "the Company," "registrant," "we," "us," and "our" mean WSFS Financial Corporation and its subsidiaries, on a consolidated basis, unless the context indicates otherwise.
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS
SUMMARY STATEMENTS OF INCOME (Unaudited)
Three months ended
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(Dollars in thousands, except per share data) March 31, 2024 December 31, 2023 March 31, 2023
------------------------------------------------------ -------------------------------------------------- ------------------------------------------------------
Interest income:
Interest and fees on loans $ 224,703 $ 224,760 $ 193,724
Interest on mortgage-backed securities 25,897 26,245 27,526
Interest and dividends on investment securities 2,184 2,184 2,237
Other interest income 8,838 4,042 2,896
-------------------- -------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------- --------------------
261,622 257,231 226,383
-------------------- -------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------- --------------------
Interest expense:
Interest on deposits 72,795 67,319 35,192
Interest on Federal Home Loan Bank advances 308 213 3,371
Interest on senior and subordinated debt 2,449 2,455 2,573
Interest on trust preferred borrowings 1,756 1,782 1,555
Interest on other borrowings 9,036 7,335 1,160
-------------------- -------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------- --------------------
86,344 79,104 43,851
-------------------- -------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------- --------------------
175,278 178,127 182,532
Net interest income
15,138 24,816 29,011
Provision for credit losses
-------------------- -------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------- --------------------
160,140 153,311 153,521
Net interest income after provision for credit losses
-------------------- -------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------- --------------------
Noninterest income:
Credit/debit card and ATM income 19,669 17,058 13,361
Investment management and fiduciary revenue 32,928 35,475 30,476
Deposit service charges 6,487 6,543 6,039
Mortgage banking activities, net 1,647 1,119 1,122
Loan and lease fee income 1,523 1,535 1,372
Unrealized gain (loss) on equity investment, net -- 338 (4 )
Realized gain on sale of equity investment, net -- 9,493 --
Bank-owned life insurance income 1,200 675 1,510
Other income 12,403 14,969 9,251
-------------------- -------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------- --------------------
75,857 87,205 63,127
-------------------- -------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------- --------------------
Noninterest expense:
Salaries, benefits and other compensation 75,806 69,524 72,849
Occupancy expense 9,479 12,115 10,408
Equipment expense 10,692 11,077 9,792
Data processing and operations expense 3,660 4,692 4,724
Professional fees 4,481 6,031 4,439
Marketing expense 1,782 1,984 1,716
FDIC expenses 3,982 7,908 2,582
Loan workout and other credit costs 1,071 560 (55 )
Corporate development expense 208 282 740
Restructuring expense -- 557 (761 )
Other operating expenses 37,911 32,916 26,611
-------------------- -------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------- --------------------
149,072 147,646 133,045
-------------------- -------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------- --------------------
Income before taxes 86,925 92,870 83,603
Income tax provision 21,202 29,365 20,941
-------------------- -------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------- --------------------
Net income 65,723 63,505 62,662
Less: Net (loss) income attributable to noncontrolling interest (38 ) (403 ) 258
-------------------- -------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------- --------------------
Net income attributable to WSFS $ 65,761 $ 63,908 $ 62,404
==================== ============== ==================== ==================== ========== ==================== ==================== ============== ====================
Diluted earnings per share of common stock: $ 1.09 $ 1.05 $ 1.01
==================== ============== ==================== ==================== ========== ==================== ==================== ============== ====================
Weighted average shares of common stock outstanding for fully diluted EPS 60,521,951 60,772,603 61,678,871
==================== ============== ==================== ==================== ========== ==================== ==================== ============== ====================
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS
SUMMARY STATEMENTS OF INCOME (Unaudited) - continued
Three months ended
----------------------------------------------------------------------------------------------------------------------------------
March 31, 2024 December 31, 2023 March 31, 2023
------------------------------ ------------------------------ ------------------------------
Performance Ratios:
Return on average assets (a) 1.28 % 1.25 % 1.27 %
Return on average equity (a) 10.68 11.12 11.20
Return on average tangible common equity (a)(o) 18.76 20.83 21.19
Net interest margin (a)(b) 3.84 3.99 4.25
Efficiency ratio (c) 59.28 55.56 54.02
Noninterest income as a percentage of total net revenue (b) 30.16 32.81 25.63
WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
SUMMARY STATEMENTS OF FINANCIAL CONDITION (Unaudited)
(Dollars in thousands) March 31, 2024 December 31, 2023 March 31, 2023
------------------------------------------------------ ------------------------------------------------------ --------------------------------------------------
Assets:
-------------------------------------------------------------------------
Cash and due from banks $ 787,729 $ 629,310 $ 686,788
Cash in non-owned ATMs 186,522 458,889 409,265
Investment securities, available-for-sale 3,734,229 3,846,537 4,086,459
Investment securities, held-to-maturity 1,049,807 1,058,557 1,094,799
Other investments 35,397 37,533 73,906
Net loans and leases (e)(f)(l) 12,816,986 12,612,470 12,016,579
Bank owned life insurance 42,708 42,762 100,907
Goodwill and intangibles 1,000,344 1,004,560 1,008,250
Other assets 925,526 904,054 842,337
-------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- ---------- --------------------
$ 20,579,248 $ 20,594,672 $ 20,319,290
Total assets
==================== ============== ==================== ==================== ============== ==================== ==================== ========== ====================
Liabilities and Stockholders' Equity:
-------------------------------------------------------------------------
Noninterest-bearing deposits $ 4,652,875 $ 4,917,297 $ 5,299,094
Interest-bearing deposits 11,534,329 11,505,113 10,581,285
-------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- ---------- --------------------
16,187,204 16,422,410 15,880,379
Total customer deposits
Brokered deposits -- 51,676 309,309
-------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- ---------- --------------------
16,187,204 16,474,086 16,189,688
Total deposits
Federal Home Loan Bank advances -- -- 800,000
Other borrowings 1,124,958 895,076 338,206
Other liabilities 801,464 755,695 688,052
-------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- ---------- --------------------
18,113,626 18,124,857 18,015,946
Total liabilities
Stockholders' equity of WSFS 2,473,481 2,477,636 2,306,362
Noncontrolling interest (7,859 ) (7,821 ) (3,018 )
-------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- ---------- --------------------
Total stockholders' equity 2,465,622 2,469,815 2,303,344
-------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- ---------- --------------------
Total liabilities and stockholders' equity $ 20,579,248 $ 20,594,672 $ 20,319,290
==================== ============== ==================== ==================== ============== ==================== ==================== ========== ====================
Capital Ratios:
Equity to asset ratio 12.02 % 12.03 % 11.35 %
Tangible common equity to tangible asset ratio (o) 7.52 7.52 6.72
Common equity Tier 1 capital (required: 4.5%; well capitalized: 6.5%) (g) 14.00 13.72