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WSFS Reports 4Q 2023 EPS of $1.05 and ROA of 1.25%; Reflects Strong Deposit and Fee Revenue Growth, NIM of 3.99%; Full Year EPS of $4.40 and ROA of 1.33%

 

WSFS Financial Corporation (Nasdaq: WSFS), the parent company of WSFS Bank, today announced its financial results for the fourth quarter of 2023.

Selected financial results and metrics are as follows:

(Dollars in millions, except per share data)

 

 

4Q 2023

 

 

 

3Q 2023

 

 

 

4Q 2022

 

 

 

2023

 

 

 

2022

 

Net interest income

 

$

178.1

 

 

$

182.6

 

 

$

193.9

 

 

$

725.1

 

 

$

662.9

 

Fee revenue

 

 

87.2

 

 

 

72.7

 

 

 

64.9

 

 

 

289.9

 

 

 

260.1

 

Total net revenue

 

 

265.3

 

 

 

255.3

 

 

 

258.8

 

 

 

1,015.0

 

 

 

923.0

 

Provision for credit losses

 

 

24.8

 

 

 

18.4

 

 

 

13.4

 

 

 

88.1

 

 

 

48.1

 

Noninterest expense

 

 

147.6

 

 

 

139.7

 

 

 

132.9

 

 

 

561.6

 

 

 

574.3

 

Net income attributable to WSFS

 

 

63.9

 

 

 

74.2

 

 

 

84.4

 

 

 

269.2

 

 

 

222.4

 

Pre-provision net revenue (PPNR)(1)

 

 

117.7

 

 

 

115.6

 

 

 

125.9

 

 

 

453.3

 

 

 

348.7

 

Earnings per share (EPS) (diluted)

 

 

1.05

 

 

 

1.22

 

 

 

1.37

 

 

 

4.40

 

 

 

3.49

 

Return on average assets (ROA) (a)

 

 

1.25

%

 

 

1.45

%

 

 

1.69

%

 

 

1.33

%

 

 

1.09

%

Return on average equity (ROE) (a)

 

 

11.1

 

 

 

12.6

 

 

 

15.7

 

 

 

11.7

 

 

 

9.3

 

Fee revenue as % of total net revenue

 

 

32.8

 

 

 

28.4

 

 

 

25.0

 

 

 

28.5

 

 

 

28.1

 

Efficiency ratio

 

 

55.6

 

 

 

54.6

 

 

 

51.2

 

 

 

55.2

 

 

 

62.1

 

See “Notes”

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.

 

 

4Q 2023

 

3Q 2023

 

4Q 2022

(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

 

$

9.2

 

$

0.11

 

$

(0.8

)

 

$

0.01

 

$

(0.6

)

 

$

0.01

Noninterest expense

 

 

7.9

 

 

0.09

 

 

0.1

 

 

 

 

 

0.8

 

 

 

0.01

Income tax(2)

 

 

7.1

 

 

0.12

 

 

(0.2

)

 

 

 

 

(0.3

)

 

 

0.01

(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.

(2) Income tax impacts are presented on an after-tax basis.

CEO Commentary

Rodger Levenson, Chairman, President and CEO, said, "Our fourth quarter operating results reflect the continued optimization of the significant franchise investments leveraging our unique competitive market positioning and diverse business mix. Core EPS(3) of $1.15 and core ROA(3) of 1.36% were driven by growth in deposits and loans as well as record core fee revenue.

"During the quarter, we also realized the benefits of our consumer partnership strategy and recognized a gain from our equity in Spring EQ. A portion of these proceeds were allocated to a contribution of $2.0 million to the WSFS CARES Foundation. We continue to invest in the success of our local communities, consistent with our strategy of 'Engaged Associates, living our culture, enriching the Communities we serve.'

"We enter 2024 with momentum and a continued focus on franchise growth and capitalizing on the opportunities in our market. I'd like to extend a sincere thank you to our over 2,200 Associates for a highly successful 2023 as they continue to serve our Customers and deliver on our mission: 'We Stand for Service.'"

(3) As used in this press release, core EPS and core ROA 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.

Notable Items in the Quarter (all excluded from core results):

  • Recorded a $9.5 million gain from our investment in Spring EQ, a digital home equity origination platform, reflecting the strength of our partnership strategy. Through our partnership with Spring EQ, we continue to grow our consumer loan portfolio.
  • We contributed $2.0 million (pre-tax), or $0.02 per share (after-tax) to the WSFS CARES Foundation to enhance community support activities.
  • Recorded an income tax charge of $7.1 million from our decision to surrender $65.5 million of previously acquired Bank Owned Life Insurance (BOLI) policies. This resulted from recent changes in the interest rate environment lowering our yields on these long-term assets and the termination of a stable value protection wrap policy. We expect to deploy the net proceeds from the surrender into higher yielding interest-earning assets or payoff wholesale funding.
  • Recorded a $5.1 million expense for the FDIC Special Assessment charged to recover losses to the Deposit Insurance Fund related to the closures of certain banks in 2023.

Highlights for 4Q 2023:

  • Core EPS was $1.15 compared to $1.23 for 3Q 2023.
  • Core ROA was 1.36% compared to 1.46% for 3Q 2023.
  • Customer deposits increased by $525.1 million, or 3% (13% annualized) for the quarter, driven by a $297.3 million increase in trust deposits, $122.5 million in commercial banking and $89.4 million in consumer deposits.
  • Core fee revenue (noninterest income)(4) was a record $78.0 million, an increase of $4.6 million, or 6% (not annualized), compared to 3Q 2023.
  • Net interest margin of 3.99% compared to 4.08% for 3Q 2023, reflects increasing deposit costs, partially offset by higher loan yields.
  • Gross loan growth of 1% (3% annualized) from 3Q 2023 driven primarily by growth in commercial mortgage and our consumer partnerships.
  • Total net credit costs were $25.4 million, driven by higher provision on our NewLane and Upstart portfolios, which accounted for 66% of provision costs for the quarter. The ACL coverage ratio was 1.35%, an increase of 7bps from 3Q 2023.
  • WSFS Bank capital ratios remain significantly above "well-capitalized" levels, with total risk-based capital of 14.97% and Common Equity Tier 1 of 13.72%.
  • WSFS repurchased 241,000 shares of common stock at an average price of $39.39 per share, totaling an aggregate of $9.5 million. The Board of Directors also approved a quarterly cash dividend of $0.15 per share. During the year, WSFS repurchased 1,247,178 shares of common stock, or 2% of shares outstanding, at an average price of $41.52 per share, returning $51.8 million of capital to shareholders.

(4) As used in this press release, core fee revenue (noninterest income) 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.

Fourth Quarter 2023 Discussion of Financial Results

Balance Sheet

The following table summarizes loan and lease balances and composition at December 31, 2023 compared to September 30, 2023 and December 31, 2022:

Loans and Leases

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in millions)

 

December 31, 2023

 

September 30, 2023

 

December 31, 2022

Commercial & industrial (C&I)

 

$

4,443

 

 

35

%

 

$

4,590

 

 

37

%

 

$

4,408

 

 

37

%

Commercial mortgage

 

 

3,801

 

 

30

 

 

 

3,646

 

 

29

 

 

 

3,351

 

 

28

 

Construction

 

 

1,036

 

 

8

 

 

 

1,043

 

 

8

 

 

 

1,044

 

 

9

 

Commercial small business leases

 

 

624

 

 

5

 

 

 

606

 

 

5

 

 

 

559

 

 

5

 

Total commercial loans and leases

 

 

9,904

 

 

78

 

 

 

9,885

 

 

79

 

 

 

9,362

 

 

79

 

Residential mortgage

 

 

882

 

 

7

 

 

 

873

 

 

7

 

 

 

782

 

 

7

 

Consumer

 

 

2,012

 

 

16

 

 

 

1,957

 

 

15

 

 

 

1,811

 

 

15

 

Gross loans and leases

 

 

12,798

 

 

101

%

 

 

12,715

 

 

101

%

 

 

11,955

 

 

101

%

ACL

 

 

(186

)

 

(1

)

 

 

(176

)

 

(1

)

 

 

(152

)

 

(1

)

Net loans and leases

 

$

12,612

 

 

100

%

 

$

12,539

 

 

100

%

 

$

11,803

 

 

100

%

At December 31, 2023, WSFS’ gross loan and lease portfolio increased 83.5 million, or 1% (3% annualized), when compared with September 30, 2023 due to increases of $155.5 million in commercial mortgage, $55.1 million in consumer loans, primarily from Spring EQ home equity loans, and $17.9 million in commercial small business leases, partially offset by a decrease of $146.5 million in C&I as strong originations were outpaced by elevated payoffs and paydowns.

In line with our 2022-2024 Strategic Plan, 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 December 31, 2023 increased $843.8 million, or 7%, when compared with December 31, 2022. The increase was driven by increases of $450.1 million in commercial mortgage, $201.2 million in consumer loans, primarily from Spring EQ, $100.9 million in residential mortgage, $64.6 million in commercial small business leases, and $35.5 million in C&I.

The following table summarizes customer deposit balances and composition at December 31, 2023 compared to September 30, 2023 and December 31, 2022:

Customer Deposits

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in millions)

 

December 31, 2023

 

September 30, 2023

 

December 31, 2022

Noninterest demand

 

$

4,917

 

30

%

 

$

4,913

 

31

%

 

$

5,739

 

36

%

Interest-bearing demand

 

 

2,936

 

18

 

 

 

3,028

 

19

 

 

 

3,347

 

21

 

Savings

 

 

1,610

 

10

 

 

 

1,681

 

10

 

 

 

2,162

 

13

 

Money market

 

 

5,175

 

31

 

 

 

4,560

 

29

 

 

 

3,731

 

23

 

Total core deposits

 

 

14,638

 

89

 

 

 

14,182

 

89

 

 

 

14,979

 

93

 

Customer time deposits

 

 

1,784

 

11

 

 

 

1,715

 

11

 

 

 

1,102

 

7

 

Total customer deposits

 

$

16,422

 

100

%

 

$

15,897

 

100

%

 

$

16,081

 

100

%

Total customer deposits increased $525.1 million, or 3% (13% annualized), when compared with September 30, 2023, primarily driven by a $297.3 million increase in trust deposits, $122.5 million in commercial banking and $89.4 million in consumer deposits.

Customer deposits increased by $341.4 million from December 31, 2022 primarily driven by $236.6 million higher trust deposits.

Our deposit base remains highly diverse, with more than half of our customer deposits, or 55%, from our Commercial, Small Business, Wealth and Trust customer relationships. The loan to deposit ratio(5) was 77% at December 31, 2023, reflecting continued capacity to fund future loan growth.

Core deposits were a strong 89% of total customer deposits, and no- and low-cost checking accounts represented a robust 48% of total customer deposits at December 31, 2023, with a weighted average cost of 40bps for the quarter.

(5) Ratio of net loans and leases to total customer deposits.

Net Interest Income

 

 

Three Months Ending

(Dollars in millions)

December 31,

2023

 

September 30,

2023

 

December 31,

2022

Net interest income before purchase accretion

$

174.8

 

 

$

178.8

 

 

$

190.0

 

Purchase accounting accretion

 

3.3

 

 

 

3.8

 

 

 

3.8

 

Net interest income

$

178.1

 

 

$

182.6

 

 

$

193.9

 

 

 

 

 

 

 

Net interest margin before purchase accretion

 

3.92

%

 

 

4.00

%

 

 

4.40

%

Purchase accounting accretion

 

0.07

 

 

 

0.08

 

 

 

0.09

 

Net interest margin

 

3.99

%

 

 

4.08

%

 

 

4.49

%

Net interest income decreased $4.5 million, or 2% (not annualized), compared to 3Q 2023 and decreased $15.8 million, or 8%, compared to 4Q 2022, primarily due to increasing deposit costs.

Total loan yields were 7.02%, an increase of 10bps compared to 3Q 2023. Total customer deposit costs were 1.62%, an increase of 24bps compared to 3Q 2023 and customer interest-bearing deposit costs were 2.35%, an increase of 30bps compared to 3Q 2023.

Net interest margin decreased 9bps from 3Q 2023 and decreased 50bps from 4Q 2022, primarily due to the reason noted above.

Asset Quality

The following table summarizes asset quality metrics as of and for the period ended December 31, 2023 compared to September 30, 2023 and December 31, 2022.

(Dollars in millions)

December 31,

2023

 

September 30,

2023

 

December 31,

2022

Problem assets(6)

$

555.7

 

 

$

543.4

 

 

$

462.1

 

Nonperforming assets

 

75.8

 

 

 

57.8

 

 

 

43.4

 

Delinquencies

 

101.9

 

 

 

110.8

 

 

 

61.2

 

Net charge-offs

 

14.7

 

 

 

14.3

 

 

 

7.7

 

Total net credit costs (recoveries) (r)

 

25.4

 

 

 

18.2

 

 

 

13.0

 

Problem assets to total Tier 1 capital plus ACL

 

23.44

%

 

 

23.61

%

 

 

21.44

%

Classified assets to total Tier 1 capital plus ACL

 

17.29

 

 

 

16.11

 

 

 

14.29

 

Ratio of nonperforming assets to total assets

 

0.37

 

 

 

0.29

 

 

 

0.22

 

Ratio of nonperforming assets (excluding accruing TDRs) to total assets

 

 

 

 

 

 

 

0.12

 

Delinquencies to gross loans (n)

 

0.80

 

 

 

0.87

 

 

 

0.51

 

Ratio of quarterly net charge-offs to average gross loans

 

0.46

 

 

 

0.45

 

 

 

0.26

 

Ratio of allowance for credit losses to total loans and leases (q)

 

1.35

 

 

 

1.28

 

 

 

1.17

 

Ratio of allowance for credit losses to nonaccruing loans

 

251

 

 

 

306

 

 

 

666

 

See “Notes”

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 23.44% is flat from September 30, 2023. Delinquencies decreased $8.9 million, or 7bps of gross loans, to $101.9 million, or 80bps, compared to September 30, 2023. Nonperforming assets increased $18.0 million, or 8bps of total assets, compared to September 30, 2023.

Net charge-offs were $14.7 million, or 0.46% (annualized) of average gross loans during the quarter, essentially flat compared to September 30, 2023. Approximately 70% of these charge-offs can be attributed to the Upstart (unsecured consumer loans) and NewLane (commercial small business leasing) portfolios, while the remaining portfolios experienced a decrease in net charge-offs compared to the prior quarter.

Total net credit costs were $25.4 million in the quarter compared to $18.2 million in 3Q 2023. The ACL was $186.1 million as of December 31, 2023, an increase of $10.1 million from September 30, 2023. The ACL coverage ratio was 1.35%, an increase of 7bps from September 30, 2023. The increases in net credit costs and ACL from the prior quarter were primarily due to higher provision on our NewLane, Upstart and CRE-office portfolios.

(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®, capital markets and mortgage banking, continue to perform strongly and reflect the investments that have been made to grow our fee businesses. Core fee revenue (noninterest income) increased $4.6 million, or 6% (not annualized), compared to 3Q 2023 to a record of $78.0 million, driven by increases of $2.5 million across all Wealth and Trust business lines and $1.8 million in Cash Connect® driven by ATM vault cash units added during the quarter.

Core fee revenue increased $12.5 million, or 19%, compared to 4Q 2022. The increase was primarily driven by $5.0 million from Cash Connect® due to the addition of ATM vault cash units and the higher rate environment, $5.0 million from Wealth and Trust driven by account growth in Institutional Services and the Bryn Mawr Trust Company of Delaware (BMT-DE) and increases in Assets Under Management (AUM) in Private Wealth Management, and $1.6 million from capital markets.

For 4Q 2023, our core fee revenue ratio(7) was 30.4% compared to 28.6% in 3Q 2023 and 25.2% in 4Q 2022. 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 $139.8 million increased $0.2 million, or less than 1% (not annualized), compared to 3Q 2023. The increase was primarily due to $2.6 million in occupancy expenses, $1.4 million in professional fees, and $1.3 million in other miscellaneous expenses. The increase was partially offset by a $4.9 million decrease in salaries and benefits mainly due to a reduction in incentive accruals as well as a one-time reduction of liabilities associated with certain employee benefit plans due to changes in estimates.

Core noninterest expense increased $7.6 million, or 6%, compared to 4Q 2022. The increase was primarily due to $4.5 million from Cash Connect® driven by higher funding costs from the rising interest rate environment, $1.6 million in uninsured losses, $1.6 million in occupancy expenses, and $1.2 million in FDIC expenses (excluding the special assessment), partially offset by a decrease of $3.0 million in salaries and benefits primarily due to the reasons noted above.

Our core efficiency ratio(8) was 54.5% in 4Q 2023, compared to 54.4% in 3Q 2023 and 50.8% in 4Q 2022.

Income Taxes

We recorded a $29.4 million income tax provision in 4Q 2023, compared to $22.9 million in 3Q 2023 and $28.0 million in 4Q 2022.

The effective tax rate was 31.6% in 4Q 2023 compared to 23.6% in 3Q 2023 and 24.9% in 4Q 2022. The increase in effective tax rate for 4Q 2023 compared to 3Q 2023 and 4Q 2022 was primarily driven by the surrender of BOLI policies during the quarter. We recorded $7.1 million of tax expense related to the surrender. Excluding this charge, our 4Q 2023 tax rate was 24.0%.

(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 December 31, 2023 with WSFS Bank’s Tier 1 leverage ratio of 10.92%, Common Equity Tier 1 capital ratio and Tier 1 capital ratio of 13.72%, and Total Risk-based capital ratio of 14.97%.

WSFS’ total stockholders’ equity increased $234.8 million, or 10% (not annualized), during 4Q 2023. The increase was primarily due to an increase in accumulated other comprehensive income (AOCI) of $186.7 million driven by market-value increases on investment securities, quarterly earnings of $63.9 million and was partially offset by capital returns of $18.6 million to stockholders, comprising $9.5 million from share repurchases and $9.1 million from quarterly dividends.

WSFS’ tangible common equity(9) increased $238.8 million, or 19% (not annualized), compared to September 30, 2023. WSFS’ common equity to assets ratio was 12.03% at December 31, 2023, and our tangible common equity to tangible assets ratio(9) increased by 103bps during the quarter to 7.52%, primarily due to the reasons described above.

At December 31, 2023, book value per share was $40.93, an increase of $4.00, or 11% (not annualized), from September 30, 2023, and tangible common book value per share(9) was $24.33, an increase of $4.00, or 20% (not annualized), from September 30, 2023.

During 4Q 2023, WSFS repurchased 241,000 shares of common stock for an aggregate of $9.5 million. As of December 31, 2023, WSFS has 5,341,593 shares, or approximately 9% 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 $88.5 million.

The Board of Directors approved a quarterly cash dividend of $0.15 per share of common stock. This dividend will be paid on February 23, 2024 to stockholders of record as of February 9, 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)

 

December 31,

2023

 

September 30,

2023

 

December 31,

2022

Net interest income

 

$

18.3

 

 

$

21.1

 

 

$

18.7

(Recovery of) provision for credit losses

 

 

(0.1

)

 

 

(0.1

)

 

 

0.1

Fee revenue

 

 

36.0

 

 

 

33.3

 

 

 

31.0

Noninterest expense(10)

 

 

26.9

 

 

 

24.5

 

 

 

23.6

Pre-tax income

 

 

27.5

 

 

 

30.0

 

 

 

25.9

Performance Metrics

 

 

 

 

 

 

Trust fee revenue (Institutional Services and BMT of DE)

 

$

20.9

 

 

$

18.5

 

 

$

17.1

Private wealth management fee revenue

 

 

14.5

 

 

 

14.5

 

 

 

13.1

AUM/AUA(11)

 

 

84,346

 

 

 

77,560

 

 

 

64,517

Wealth Management fee revenue increased $2.7 million, or 8% (not annualized), from 3Q 2023, primarily due to continued growth in Institutional Services. Total noninterest expense increased $2.4 million compared to 3Q 2023 driven by salaries and benefits, which included the addition of advisors and higher performance-based incentives. Pre-tax income decreased $2.5 million compared to 3Q 2023. The decrease was primarily attributable to lower net interest income of $2.7 million.

Wealth Management fee revenue increased $5.0 million, or 16% (not annualized), compared to 4Q 2022 due to account growth in Institutional Services and BMT-DE and increases in AUM in Private Wealth Management. Pre-tax income increased $1.6 million compared to 4Q 2022, driven by higher fee revenue in Institutional Services, Private Wealth Management, and BMT-DE.

Net AUM of $8.6 billion at the end of 4Q 2023 increased $0.6 billion, or 7% (not annualized), compared to 3Q 2023, and increased $1.0 billion, or 13%, compared to 4Q 2022. AUM balances over the period were primarily impacted by returns in broader equity and fixed income markets.

(10) Includes intercompany allocation of expense and excludes provision for credit losses.

(11) Represents Assets Under Management and Assets Under Administration.

Cash Connect®

Cash Connect® 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)

 

December 31,

2023

 

September 30,

2023

 

December 31,

2022

Net revenue(12)

 

$

19.0

 

 

$

18.0

 

 

$

13.9

 

Noninterest expense(13)

 

 

17.4

 

 

 

16.9

 

 

 

12.7

 

Pre-tax income

 

 

1.6

 

 

 

1.1

 

 

 

1.2

 

Performance Metrics

 

 

 

 

 

 

Cash managed

 

$

1,867

 

 

$

1,517

 

 

$

1,717

 

Number of serviced non-bank ATMs and smart safes

 

 

41,695

 

 

 

33,860

 

 

 

33,820

 

Number of WSFS owned and branded ATMs

 

 

590

 

 

 

592

 

 

 

686

 

ROA

 

 

1.17

%

 

 

0.87

%

 

 

0.65

%

Cash Connect® net revenue increased $1.0 million from 3Q 2023 driven by ATM vault cash units added during the quarter, partially offset by $0.5 million higher noninterest expense due to higher external funding expense. Pre-tax income increased $0.5 million compared to 3Q 2023, driven by higher ATM vault cash volume. ROA increased 30bps to 1.17% compared to 3Q 2023 due to higher net income.

Net Revenue increased $5.1 million and noninterest expense increased $4.7 million compared to 4Q 2022 due to the added units described above and the higher rate environment. Pre-tax income increased $0.4 million compared to 4Q 2022. ROA increased 52bps to 1.17% compared to 4Q 2022 with higher pre-tax income and funding source optimization.

During 4Q 2023, Cash Connect® added 7,638 serviced non-bank ATMs as a result of a large industry participant exiting their ATM cash vault business. Cash Connect® is targeting additional unit growth and positive earnings impact in 2024 as a result of the exit of a large player in the cash logistics business. The additional ATMs contributed to 9% fee revenue growth and higher pre-tax net income compared to 3Q 2023. Cash Connect ended 2023 with approximately $1.9 billion in managed cash.

(12) Includes intercompany allocation of income and net interest income.

(13) Includes intercompany allocation of expense.

Fourth Quarter 2023 Earnings Release Conference Call

Management will conduct a conference call to review 4Q 2023 results at 1:00 p.m. Eastern Time (ET) on Friday, January 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 December 31, 2023, WSFS Financial Corporation had $20.6 billion in assets on its balance sheet and $84.3 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®, The Bryn Mawr Trust Company of Delaware, Cash Connect®, NewLane Finance®, Powdermill® Financial Solutions, WSFS Institutional Services®, WSFS Mortgage®, and WSFS Wealth® Investments. Serving the Greater Delaware Valley since 1832, WSFS Bank is one of the ten oldest banks in the United States continuously operating under the same name. For more information, please visit www.wsfsbank.com.

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; 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; 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, the credit risk associated with the substantial amount of commercial real estate, construction and land development, and commercial and industrial 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 discontinued publication of London Inter-Bank Offered Rate (LIBOR) and the continued transition to Secured Overnight Financing Rate (SOFR) as the replacement reference interest rate; the success of the Company's growth plans, including its plans to grow the commercial small business leasing, residential, small business and Small Business Administration (SBA) portfolios and wealth management business; 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; failure of the financial and/or operational controls of the Company's Cash Connect® and/or Wealth Management divisions; 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 problems encountered by other financial institutions that adversely affect the Company or the banking industry generally; 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 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 interaction 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, 2022, the Company's Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2023, June 30, 2023, and September 30, 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

 

Twelve months ended

(Dollars in thousands, except per share data)

 

December 31,

2023

 

September 30,

2023

 

December 31,

2022

 

December 31,

2023

 

December 31,

2022

Interest income:

Interest and fees on loans

 

$

224,760

 

 

$

218,903

 

 

$

181,644

 

 

$

845,271

 

 

$

582,754

Interest on mortgage-backed securities

 

 

26,245

 

 

 

26,654

 

 

 

27,778

 

 

 

107,555

 

 

 

106,606

Interest and dividends on investment securities

 

 

2,184

 

 

 

2,180

 

 

 

2,257

 

 

 

8,783

 

 

 

6,899

Other interest income

 

 

4,042

 

 

 

3,402

 

 

 

1,414

 

 

 

14,913

 

 

 

7,556

 

 

 

257,231

 

 

 

251,139

 

 

 

213,093

 

 

 

976,522

 

 

 

703,815

Interest expense:

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 

67,319

 

 

 

57,255

 

 

 

14,644

 

 

 

209,820

 

 

 

28,181

Interest on Federal Home Loan Bank advances

 

 

213

 

 

 

167

 

 

 

496

 

 

 

5,348

 

 

 

538

Interest on senior and subordinated debt

 

 

2,455

 

 

 

2,453

 

 

 

2,307

 

 

 

9,815

 

 

 

8,246

Interest on trust preferred borrowings

 

 

1,782

 

 

 

1,764

 

 

 

1,336

 

 

 

6,736

 

 

 

3,482

Interest on other borrowings

 

 

7,335

 

 

 

6,898

 

 

 

424

 

 

 

19,700

 

 

 

478

 

 

 

79,104

 

 

 

68,537

 

 

 

19,207

 

 

 

251,419

 

 

 

40,925

Net interest income

 

 

178,127

 

 

 

182,602

 

 

 

193,886

 

 

 

725,103

 

 

 

662,890

Provision for credit losses

 

 

24,816

 

 

 

18,414

 

 

 

13,396

 

 

 

88,071

 

 

 

48,089

Net interest income after provision for credit losses

 

 

153,311

 

 

 

164,188

 

 

 

180,490

 

 

 

637,032

 

 

 

614,801

Noninterest income:

 

 

 

 

 

 

 

 

 

 

Credit/debit card and ATM income

 

 

17,058

 

 

 

14,869

 

 

 

12,642

 

 

 

59,718

 

 

 

40,088

Investment management and fiduciary revenue

 

 

35,475

 

 

 

32,720

 

 

 

30,731

 

 

 

131,050

 

 

 

121,608

Deposit service charges

 

 

6,543

 

 

 

6,534

 

 

 

6,326

 

 

 

25,393

 

 

 

24,484

Mortgage banking activities, net

 

 

1,119

 

 

 

1,254

 

 

 

742

 

 

 

4,799

 

 

 

7,271

Loan and lease fee income

 

 

1,535

 

 

 

1,621

 

 

 

1,818

 

 

 

5,718

 

 

 

6,275

Unrealized gain (loss) on equity investment, net

 

 

338

 

 

 

(5

)

 

 

(8

)

 

 

329

 

 

 

5,980

Realized gain on sale of equity investment, net

 

 

9,493

 

 

 

 

 

 

 

 

 

9,493

 

 

 

Bank-owned life insurance income

 

 

675

 

 

 

1,697

 

 

 

1,130

 

 

 

4,642

 

 

 

1,804

Other income

 

 

14,969

 

 

 

13,978

 

 

 

11,499

 

 

 

48,729

 

 

 

52,624

 

 

 

87,205

 

 

 

72,668

 

 

 

64,880

 

 

 

289,871

 

 

 

260,134

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

Salaries, benefits and other compensation

 

 

69,524

 

 

 

74,453

 

 

 

72,492

 

 

 

289,193

 

 

 

283,905

Occupancy expense

 

 

12,115

 

 

 

9,529

 

 

 

10,492

 

 

 

42,184

 

 

 

40,885

Equipment expense

 

 

11,077

 

 

 

10,563

 

 

 

10,320

 

 

 

42,242

 

 

 

40,994

Data processing and operations expense

 

 

4,692

 

 

 

4,867

 

 

 

4,867

 

 

 

19,054

 

 

 

20,876

Professional fees

 

 

6,031

 

 

 

4,612

 

 

 

6,212

 

 

 

21,200

 

 

 

18,497

Marketing expense

 

 

1,984

 

 

 

2,049

 

 

 

2,245

 

 

 

7,914

 

 

 

7,230

FDIC expenses

 

 

7,908

 

 

 

2,534

 

 

 

1,699

 

 

 

15,887

 

 

 

6,098

Loan workout and other credit costs

 

 

560

 

 

 

(189

)

 

 

(401

)

 

 

852

 

 

 

702

Corporate development expense

 

 

282

 

 

 

113

 

 

 

1,070

 

 

 

3,931

 

 

 

42,749

Restructuring expense

 

 

557

 

 

 

 

 

 

(319

)

 

 

(230

)

 

 

22,473

Other operating expenses

 

 

32,916

 

 

 

31,158

 

 

 

24,226

 

 

 

119,406

 

 

 

89,917

 

 

 

147,646

 

 

 

139,689

 

 

 

132,903

 

 

 

561,633

 

 

 

574,326

Income before taxes

 

 

92,870

 

 

 

97,167

 

 

 

112,467

 

 

 

365,270

 

 

 

300,609

Income tax provision

 

 

29,365

 

 

 

22,904

 

 

 

28,032

 

 

 

96,245

 

 

 

77,961

Net income

 

 

63,505

 

 

 

74,263

 

 

 

84,435

 

 

 

269,025

 

 

 

222,648

Less: Net (loss) income attributable to noncontrolling interest

 

 

(403

)

 

 

97

 

 

 

(14

)

 

 

(131

)

 

 

273

Net income attributable to WSFS

 

$

63,908

 

 

$

74,166

 

 

$

84,449

 

 

$

269,156

 

 

$

222,375

Diluted earnings per share of common stock:

 

$

1.05

 

 

$

1.22

 

 

$

1.37

 

 

$

4.40

 

 

$

3.49

Weighted average shares of common stock outstanding for fully diluted EPS

 

 

60,772,603

 

 

 

61,039,317

 

 

 

61,801,612

 

 

 

61,220,647

 

 

 

63,658,611

See “Notes”

WSFS FINANCIAL CORPORATION

FINANCIAL HIGHLIGHTS

SUMMARY STATEMENTS OF INCOME (Unaudited) - continued

 

 

 

Three months ended

 

Twelve months ended

 

 

December 31,

2023

 

September 30,

2023

 

December 31,

2022

 

December 31,

2023

 

December 31,

2022

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

Return on average assets (a)

 

1.25

%

 

1.45

%

 

1.69

%

 

1.33

%

 

1.09

%

Return on average equity (a)

 

11.12

 

 

12.64

 

 

15.74

 

 

11.70

 

 

9.27

 

Return on average tangible common equity (a)(o)

 

20.83

 

 

23.19

 

 

31.12

 

 

21.73

 

 

16.88

 

Net interest margin (a)(b)

 

3.99

 

 

4.08

 

 

4.49

 

 

4.11

 

 

3.71

 

Efficiency ratio (c)

 

55.56

 

 

54.64

 

 

51.22

 

 

55.24

 

 

62.09

 

Noninterest income as a percentage of total net revenue (b)

 

32.81

 

 

28.42

 

 

25.01

 

 

28.51

 

 

28.12

 

See “Notes”

WSFS FINANCIAL CORPORATION

FINANCIAL HIGHLIGHTS (Continued)

SUMMARY STATEMENTS OF FINANCIAL CONDITION (Unaudited)

 

(Dollars in thousands)

 

December 31,

2023

 

September 30,

2023

 

December 31,

2022

Assets:

 

 

 

 

 

 

Cash and due from banks

 

$

629,310

 

 

$

260,200

 

 

$

332,961

 

Cash in non-owned ATMs

 

 

458,889

 

 

 

345,754

 

 

 

499,017

 

Investment securities, available-for-sale

 

 

3,846,537

 

 

 

3,691,541

 

 

 

4,093,060

 

Investment securities, held-to-maturity

 

 

1,058,557

 

 

 

1,068,871

 

 

 

1,111,619

 

Other investments

 

 

37,533

 

 

 

39,466

 

 

 

55,516

 

Net loans and leases (e)(f)(l)

 

 

12,612,470

 

 

 

12,539,062

 

 

 

11,802,977

 

Bank owned life insurance

 

 

42,762

 

 

 

101,424

 

 

 

101,935

 

Goodwill and intangibles

 

 

1,004,560

 

 

 

1,008,472

 

 

 

1,012,232

 

Other assets

 

 

904,054

 

 

 

986,202

 

 

 

905,438

 

Total assets

 

$

20,594,672

 

 

$

20,040,992

 

 

$

19,914,755

 

Liabilities and Stockholders’ Equity:

 

 

 

 

 

 

Noninterest-bearing deposits

 

$

4,917,297

 

 

$

4,913,517

 

 

$

5,739,647

 

Interest-bearing deposits

 

 

11,505,113

 

 

 

10,983,747

 

 

 

10,341,331

 

Total customer deposits

 

 

16,422,410

 

 

 

15,897,264

 

 

 

16,080,978

 

Brokered deposits

 

 

51,676

 

 

 

89,105

 

 

 

122,591

 

Total deposits

 

 

16,474,086

 

 

 

15,986,369

 

 

 

16,203,569

 

Federal Home Loan Bank advances

 

 

 

 

 

 

 

 

350,000

 

Other borrowings

 

 

895,076

 

 

 

917,833

 

 

 

376,894

 

Other liabilities

 

 

755,695

 

 

 

901,412

 

 

 

782,406

 

Total liabilities

 

 

18,124,857

 

 

 

17,805,614

 

 

 

17,712,869

 

Stockholders’ equity of WSFS

 

 

2,477,636

 

 

 

2,242,795

 

 

 

2,205,113

 

Noncontrolling interest

 

 

(7,821

)

 

 

(7,417

)

 

 

(3,227

)

Total stockholders' equity

 

 

2,469,815

 

 

 

2,235,378

 

 

 

2,201,886

 

Total liabilities and stockholders' equity

 

$

20,594,672

 

 

$

20,040,992

 

 

$

19,914,755

 

Capital Ratios:

 

 

 

 

 

 

Equity to asset ratio

 

 

12.03

%

 

 

11.19

%

 

 

11.07

%

Tangible common equity to tangible asset ratio (o)

 

 

7.52

 

 

 

6.49

 

 

 

6.31

 

Common equity Tier 1 capital (required: 4.5%; well capitalized: 6.5%) (g)

 

 

13.72

 

 

 

13.26

 

 

 

12.86

 

Tier 1 leverage (required: 4.00%; well-capitalized: 5.00%) (g)

 

 

10.92

 

 

 

10.72

 

 

 

10.29

 

Tier 1 risk-based capital (required: 6.00%; well-capitalized: 8.00%) (g)

 

 

13.72

 

 

 

13.26

 

 

 

12.86

 

Total risk-based capital (required: 8.00%; well-capitalized: 10.00%) (g)

 

 

14.97

 

 

 

14.43

 

 

 

13.84

 

Asset Quality Indicators:

 

 

 

 

 

 

Nonperforming assets:

 

 

 

 

 

 

Nonaccruing loans (t)

 

$

74,185

 

 

$

57,460

 

 

$

22,802

 

Troubled debt restructurings (accruing)

 

 

 

 

 

 

 

 

19,737

 

Assets acquired through foreclosure

 

 

1,569

 

 

 

298

 

 

 

833

 

Total nonperforming assets

 

$

75,754

 

 

$

57,758

 

 

$

43,372

 

Past due loans (h)

 

$

11,584

 

 

$

14,357

 

 

$

16,535

 

Troubled loans

 

 

95,268

 

 

 

78,186

 

 

 

 

Allowance for credit losses

 

 

186,134

 

 

 

175,996

 

 

 

151,871

 

Ratio of nonperforming assets to total assets

 

 

0.37

%

 

 

0.29

%

 

 

0.22

%

Ratio of nonperforming assets (excluding accruing TDRs) to total assets

 

 

 

 

 

 

 

 

0.12

 

Ratio of allowance for credit losses to total loans and leases (q)

 

 

1.35

 

 

 

1.28

 

 

 

1.17

 

Ratio of allowance for credit losses to nonaccruing loans

 

 

251

 

 

 

306

 

 

 

666

 

Ratio of quarterly net charge-offs to average gross loans (a)(e)(i)(n)

 

 

0.46

 

 

 

0.45

 

 

 

0.26

 

Ratio of year-to-date net charge-offs to average gross loans (a)(e)(i)(n)

 

 

0.44

 

 

 

0.43

 

 

 

0.15

 

See “Notes”

WSFS FINANCIAL CORPORATION

FINANCIAL HIGHLIGHTS (Continued)

AVERAGE BALANCE SHEET (Unaudited)

 

(Dollars in thousands)

 

Three months ended

 

 

December 31, 2023

 

September 30, 2023

 

December 31, 2022

 

 

Average

Balance

 

Interest &

Dividends

 

Yield/

Rate

(a)(b)

 

Average

Balance

 

Interest &

Dividends

 

Yield/

Rate

(a)(b)

 

Average

Balance

 

Interest &

Dividends

 

Yield/

Rate

(a)(b)

Assets:

Interest-earning assets:

Loans: (e) (j)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial loans and leases (p)

 

$

5,049,932

 

 

$

89,474

 

7.04

%

 

$

5,107,501

 

 

$

90,098

 

7.01

%

 

$

4,920,329

 

 

$

76,817

 

6.21

%

Commercial real estate loans (s)

 

 

4,757,766

 

 

 

85,717

 

7.15

 

 

 

4,611,968

 

 

 

82,040

 

7.06

 

 

 

4,334,772

 

 

 

66,428

 

6.08

 

Residential mortgage

 

 

865,631

 

 

 

10,176

 

4.70

 

 

 

841,510

 

 

 

10,698

 

5.09

 

 

 

762,967

 

 

 

8,610

 

4.51

 

Consumer loans

 

 

1,992,434

 

 

 

38,495

 

7.67

 

 

 

1,940,418

 

 

 

34,972

 

7.15

 

 

 

1,753,871

 

 

 

28,843

 

6.52

 

Loans held for sale

 

 

46,227

 

 

 

898

 

7.71

 

 

 

54,072

 

 

 

1,095

 

8.03

 

 

 

56,605

 

 

 

946

 

6.63

 

Total loans and leases

 

 

12,711,990

 

 

 

224,760

 

7.02

 

 

 

12,555,469

 

 

 

218,903

 

6.92

 

 

 

11,828,544

 

 

 

181,644

 

6.10

 

Mortgage-backed securities (d)

 

 

4,376,102

 

 

 

26,245

 

2.40

 

 

 

4,602,107

 

 

 

26,654

 

2.32

 

 

 

4,849,450

 

 

 

27,778

 

2.29

 

Investment securities (d)

 

 

356,495

 

 

 

2,184

 

2.72

 

 

 

364,565

 

 

 

2,180

 

2.64

 

 

 

377,610

 

 

 

2,257

 

2.85

 

Other interest-earning assets

 

 

291,626

 

 

 

4,042

 

5.50

 

 

 

251,273

 

 

 

3,402

 

5.37

 

 

 

145,668

 

 

 

1,414

 

3.85

 

Total interest-earning assets

 

$

17,736,213

 

 

$

257,231

 

5.76

%

 

$

17,773,414

 

 

$

251,139

 

5.61

%

 

$

17,201,272

 

 

$

213,093

 

4.93

%

Allowance for credit losses

 

 

(179,030

)

 

 

 

 

 

 

(173,052

)

 

 

 

 

 

 

(147,990

)

 

 

 

 

Cash and due from banks

 

 

263,724

 

 

 

 

 

 

 

277,780

 

 

 

 

 

 

 

253,031

 

 

 

 

 

Cash in non-owned ATMs

 

 

396,589

 

 

 

 

 

 

 

363,131

 

 

 

 

 

 

 

524,042

 

 

 

 

 

Bank owned life insurance

 

 

91,769

 

 

 

 

 

 

 

101,411

 

 

 

 

 

 

 

100,920

 

 

 

 

 

Other noninterest-earning assets

 

 

2,009,939

 

 

 

 

 

 

 

1,922,080

 

 

 

 

 

 

 

1,945,047

 

 

 

 

 

Total assets

 

$

20,319,204

 

 

 

 

 

 

$

20,264,764

 

 

 

 

 

 

$

19,876,322

 

 

 

 

 

Liabilities and stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand

 

$

2,941,311

 

 

$

7,966

 

1.07

%

 

$

2,955,613

 

 

$

7,156

 

0.96

%

 

$

3,356,188

 

 

$

3,740

 

0.44

%

Savings

 

 

1,646,314

 

 

 

1,614

 

0.39

 

 

 

1,750,809

 

 

 

1,521

 

0.34

 

 

 

2,232,665

 

 

 

459

 

0.08

 

Money market

 

 

4,760,003

 

 

 

40,373

 

3.37

 

 

 

4,499,909

 

 

 

34,639

 

3.05

 

 

 

3,769,013

 

 

 

8,473

 

0.89

 

Customer time deposits

 

 

1,763,678

 

 

 

15,766

 

3.55

 

 

 

1,661,885

 

 

 

12,828

 

3.06

 

 

 

1,016,827

 

 

 

1,800

 

0.70

 

Total interest-bearing customer deposits

 

 

11,111,306

 

 

 

65,719

 

2.35

 

 

 

10,868,216

 

 

 

56,144

 

2.05

 

 

 

10,374,693

 

 

 

14,472

 

0.55

 

Brokered deposits

 

 

119,843

 

 

 

1,600

 

5.30

 

 

 

88,594

 

 

 

1,111

 

4.98

 

 

 

23,389

 

 

 

172

 

2.92

 

Total interest-bearing deposits

 

 

11,231,149

 

 

 

67,319

 

2.38

 

 

 

10,956,810

 

 

 

57,255

 

2.07

 

 

 

10,398,082

 

 

 

14,644

 

0.56

 

Federal Home Loan Bank advances

 

 

14,620

 

 

 

213

 

5.78

 

 

 

11,576

 

 

 

167

 

5.72

 

 

 

45,967

 

 

 

496

 

4.28

 

Trust preferred borrowings

 

 

90,606

 

 

 

1,782

 

7.80

 

 

 

90,557

 

 

 

1,764

 

7.73

 

 

 

90,410

 

 

 

1,336

 

5.86

 

Senior and subordinated debt

 

 

218,362

 

 

 

2,455

 

4.50

 

 

 

218,304

 

 

 

2,453

 

4.49

 

 

 

248,216

 

 

 

2,307

 

3.72

 

Other borrowed funds

 

 

635,512

 

 

 

7,335

 

4.58

 

 

 

604,156

 

 

 

6,898

 

4.53

 

 

 

78,755

 

 

 

424

 

2.14

 

Total interest-bearing liabilities

 

$

12,190,249

 

 

$

79,104

 

2.57

%

 

$

11,881,403

 

 

$

68,537

 

2.29

%

 

$

10,861,430

 

 

$

19,207

 

0.70

%

Noninterest-bearing demand deposits

 

 

4,965,356

 

 

 

 

 

 

 

5,248,931

 

 

 

 

 

 

 

6,108,618

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

889,962

 

 

 

 

 

 

 

813,858

 

 

 

 

 

 

 

780,336

 

 

 

 

 

Stockholders’ equity of WSFS

 

 

2,281,076

 

 

 

 

 

 

 

2,327,853

 

 

 

 

 

 

 

2,128,869

 

 

 

 

 

Noncontrolling interest

 

 

(7,439

)

 

 

 

 

 

 

(7,281

)

 

 

 

 

 

 

(2,931

)

 

 

 

 

Total liabilities and equity

 

$

20,319,204

 

 

 

 

 

 

$

20,264,764

 

 

 

 

 

 

$

19,876,322

 

 

 

 

 

Excess of interest-earning assets over interest-bearing liabilities

 

$

5,545,964

 

 

 

 

 

 

$

5,892,011

 

 

 

 

 

 

$

6,339,842

 

 

 

 

 

Net interest and dividend income

 

 

 

$

178,127

 

 

 

 

 

$

182,602

 

 

 

 

 

$

193,886

 

 

Interest rate spread

 

 

 

 

 

3.19

%

 

 

 

 

 

3.32

%

 

 

 

 

 

4.23

%

Net interest margin

 

 

 

 

 

3.99

%

 

 

 

 

 

4.08

%

 

 

 

 

 

4.49

%

See “Notes”

WSFS FINANCIAL CORPORATION

FINANCIAL HIGHLIGHTS (Continued)

(Unaudited)

 

(Dollars in thousands, except per share data)

 

Three months ended

 

Twelve months ended

Stock Information:

 

December 31,

2023

 

September 30,

2023

 

December 31,

2022

 

December 31,

2023

 

December 31,

2022

Market price of common stock:

 

 

 

 

 

 

 

 

 

 

High

 

$47.97

 

$45.40

 

$50.67

 

$51.77

 

$56.30

Low

 

33.12

 

35.02

 

41.81

 

29.59

 

37.03

Close

 

45.93

 

36.50

 

45.34

 

45.93

 

45.34

Book value per share of common stock

 

40.93

 

36.93

 

35.79

 

 

 

 

Tangible common book value (TBV) per share of common stock (o)

 

24.33

 

20.33

 

19.36

 

 

 

 

Number of shares of common stock outstanding (000s)

 

60,538

 

60,728

 

61,612

 

 

 

 

Other Financial Data:

 

 

 

 

 

 

 

 

 

 

One-year repricing gap to total assets (k)

 

(0.14)%

 

0.41%

 

6.29%

 

 

 

 

Weighted average duration of the MBS portfolio

 

5.8 years

 

6.0 years

 

5.9 years

 

 

 

 

Unrealized losses on securities available for sale, net of taxes

 

$(499,932)

 

$(678,413)

 

$(563,532)

 

 

 

 

Number of Associates (FTEs) (m)

 

2,229

 

2,224

 

2,160

 

 

 

 

Number of offices (branches, LPO’s, operations centers, etc.)

 

114

 

116

 

119

 

 

 

 

Number of WSFS owned and branded ATMs

 

590

 

592

 

686

 

 

 

 

Notes:

(a)

 

Annualized.

(b)

 

Computed on a fully tax-equivalent basis.

(c)

 

Noninterest expense divided by (tax-equivalent) net interest income and noninterest income.

(d)

 

Includes securities held-to-maturity (at amortized cost) and securities available-for-sale (at fair value).

(e)

 

Net of unearned income.

(f)

 

Net of allowance for credit losses.

(g)

 

Represents capital ratios of Wilmington Savings Fund Society, FSB and subsidiaries. Capital Ratios for the current quarter are to be considered preliminary until the Call Reports are filed.

(h)

 

Accruing loans which are contractually past due 90 days or more as to principal or interest. Balance includes student loans, which are U.S. government guaranteed with little risk of credit loss.

(i)

 

Excludes loans held for sale.

(j)

 

Nonperforming loans are included in average balance computations.

(k)

 

The difference between projected amounts of interest-sensitive assets and interest-sensitive liabilities repricing within one year divided by total assets, based on a current interest rate scenario.

(l)

 

Includes loans held for sale and reverse mortgages.

(m)

 

Includes seasonal Associates, when applicable.

(n)

 

Excludes reverse mortgage loans.

(o)

 

The Company uses non-GAAP (United States Generally Accepted Accounting Principles) financial information in its analysis of the Company’s performance. The Company’s management believes that these non-GAAP financial 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 financial measures to analyze the Company’s financial performance without the impact of unusual items or events that may obscure trends in the Company’s underlying performance. This non-GAAP data should be considered in addition to results prepared in accordance with GAAP, and is not a substitute for, or superior to, GAAP results. For a reconciliation of these and other non-GAAP financial measures to their comparable GAAP measures, see "Non-GAAP Reconciliation" at the end of the press release.

(p)

 

Includes commercial & industrial loans and commercial small business leases.

(q)

 

Represents amortized cost basis for loans, leases and held-to-maturity securities.

(r)

 

Includes provision for credit losses, loan workout expenses, OREO expenses and other credit costs.

(s)

 

Includes commercial mortgage and commercial construction loans.

(t)

 

Includes nonaccruing troubled loans beginning in 2023 and nonaccruing troubled debt restructurings prior to 2023.

WSFS FINANCIAL CORPORATION

FINANCIAL HIGHLIGHTS (Continued)

(Dollars in thousands, except per share data)

(Unaudited)

 

Non-GAAP Reconciliation (o):

 

Three months ended

 

Twelve months ended

 

 

December 31,

2023

 

September 30,

2023

 

December 31,

2022

 

December 31,

2023

 

December 31,

2022

Net interest income (GAAP)

 

$

178,127

 

 

$

182,602

 

 

$

193,886

 

 

$

725,103

 

 

$

662,890

 

Core net interest income (non-GAAP)

 

 

178,127

 

 

 

182,602

 

 

 

193,886

 

 

 

725,103

 

 

 

662,890

 

Noninterest income (GAAP)

 

 

87,205

 

 

 

72,668

 

 

 

64,880

 

 

 

289,871

 

 

 

260,134

 

Less/(plus): Unrealized gain (loss) on equity investments, net

 

 

338

 

 

 

(5

)

 

 

(8

)

 

 

329

 

 

 

5,980

 

Less: Realized gain on sale of equity investment, net

 

 

9,493

 

 

 

 

 

 

 

 

 

9,493

 

 

 

 

Plus: Visa derivative valuation adjustment

 

 

(605

)

 

 

(750

)

 

 

(592

)

 

 

(2,460

)

 

 

(2,877

)

Core fee revenue (non-GAAP)

 

$

77,979

 

 

$

73,423

 

 

$

65,480

 

 

$

282,509

 

 

$

257,031

 

Core net revenue (non-GAAP)

 

$

256,106

 

 

$

256,025

 

 

$

259,366

 

 

$

1,007,612

 

 

$

919,921

 

Core net revenue (non-GAAP)(tax-equivalent)

 

$

256,523

 

 

$

256,412

 

 

$

260,058

 

 

$

1,009,427

 

 

$

921,829

 

Noninterest expense (GAAP)

 

$

147,646

 

 

$

139,689

 

 

$

132,903

 

 

$

561,633

 

 

$

574,326

 

Less: FDIC special assessment

 

 

5,052

 

 

 

 

 

 

 

 

 

5,052

 

 

 

 

Less: Corporate development expense

 

 

282

 

 

 

113

 

 

 

1,070

 

 

 

3,931

 

 

 

42,749

 

Less/(plus): Restructuring expense

 

 

557

 

 

 

 

 

 

(319

)

 

 

(230

)

 

 

22,473

 

Less: Contribution to WSFS CARES Foundation

 

 

2,000

 

 

 

 

 

 

 

 

 

2,000

 

 

 

 

Core noninterest expense (non-GAAP)

 

$

139,755

 

 

$

139,576

 

 

$

132,152

 

 

$

550,880

 

 

$

509,104

 

Core efficiency ratio (non-GAAP)

 

 

54.5

%

 

 

54.4

%

 

 

50.8

%

 

 

54.6

%

 

 

55.2

%

Core fee revenue ratio (non-GAAP) (b)

 

 

30.4

%

 

 

28.6

%

 

 

25.2

%

 

 

28.0

%

 

 

27.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

End of period

 

 

 

 

 

 

December 31,

2023

 

September 30,

2023

 

December 31,

2022

 

 

 

 

Total assets (GAAP)

 

$

20,594,672

 

 

$

20,040,992

 

 

$

19,914,755

 

 

 

 

 

Less: Goodwill and other intangible assets

 

 

1,004,560

 

 

 

1,008,472

 

 

 

1,012,232

 

 

 

 

 

Total tangible assets (non-GAAP)

 

$

19,590,112

 

 

$

19,032,520

 

 

$

18,902,523

 

 

 

 

 

Total stockholders’ equity of WSFS (GAAP)

 

$

2,477,636

 

 

$

2,242,795

 

 

$

2,205,113

 

 

 

 

 

Less: Goodwill and other intangible assets

 

 

1,004,560

 

 

 

1,008,472

 

 

 

1,012,232

 

 

 

 

 

Total tangible common equity (non-GAAP)

 

$

1,473,076

 

 

$

1,234,323

 

 

$

1,192,881

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common book value (TBV) per share:

 

 

 

 

 

 

 

 

Book value per share (GAAP)

 

$

40.93

 

 

$

36.93

 

 

$

35.79

 

 

 

 

 

Tangible common book value per share (non-GAAP)

 

 

24.33

 

 

 

20.33

 

 

 

19.36

 

 

 

 

 

Tangible common equity to tangible assets:

 

 

 

 

 

 

 

 

Equity to asset ratio (GAAP)

 

 

12.03

%

 

 

11.19

%

 

 

11.07

%

 

 

 

 

Tangible common equity to tangible assets ratio (non-GAAP)

 

 

7.52

 

 

 

6.49

 

 

 

6.31

 

 

 

 

 

Non-GAAP Reconciliation - continued (o):

Three months ended

Twelve months ended

 

December 31,

2023

September 30,

2023

December 31,

2022

December 31,

2023

December 31,

2022

GAAP net income attributable to WSFS

$

63,908

 

$

74,166

 

$

84,449

 

$

269,156

 

$

222,375

 

Plus/(less): Pre-tax adjustments: Realized/unrealized gain (loss) on equity investments, net, Visa derivative valuation adjustment, FDIC special assessment, corporate development and restructuring expense, and contribution to WSFS CARES Foundation

 

(1,335

)

 

868

 

 

1,351

 

 

3,391

 

 

62,119

 

Plus: Tax adjustments: BOLI surrender

 

7,056

 

 

 

 

 

 

7,056

 

 

 

(Plus)/less: Tax impact of pre-tax adjustments

 

65

 

 

(232

)

 

(308

)

 

(764

)

 

(13,809

)

Adjusted net income (non-GAAP) attributable to WSFS

$

69,694

 

$

74,802

 

$

85,492

 

$

278,839

 

$

270,685

 

 

 

 

 

 

 

GAAP return on average assets (ROA)

 

1.25

%

 

1.45

%

 

1.69

%

 

1.33

%

 

1.09

%

Plus/(less): Pre-tax adjustments: Realized/unrealized gain (loss) on equity investments, net, Visa derivative valuation adjustment, FDIC special assessment, corporate development and restructuring expense, and contribution to WSFS CARES Foundation

 

(0.03

)

 

0.02

 

 

0.03

 

 

0.02

 

 

0.30

 

Plus: Tax adjustments: BOLI surrender

 

0.14

 

 

 

 

 

 

0.03

 

 

 

(Plus)/less: Tax impact of pre-tax adjustments

 

 

 

(0.01

)

 

(0.01

)

 

 

 

(0.07

)

Core ROA (non-GAAP)

 

1.36

%

 

1.46

%

 

1.71

%

 

1.38

%

 

1.32

%

 

 

 

 

 

 

Earnings per share (diluted) (GAAP)

$

1.05

 

$

1.22

 

$

1.37

 

$

4.40

 

$

3.49

 

Plus/(less): Pre-tax adjustments: Realized/unrealized gain (loss) on equity investments, net, Visa derivative valuation adjustment, FDIC special assessment, corporate development and restructuring expense, and contribution to WSFS CARES Foundation

 

(0.02

)

 

0.01

 

 

0.02

 

 

0.05

 

 

0.98

 

Plus: Tax adjustments: BOLI surrender

 

0.12

 

 

 

 

 

 

0.12

 

 

 

(Plus)/less: Tax impact of pre-tax adjustments

 

 

 

 

 

(0.01

)

 

(0.02

)

 

(0.22

)

Core earnings per share (non-GAAP)

$

1.15

 

$

1.23

 

$

1.38

 

$

4.55

 

$

4.25

 

 

 

 

 

 

 

Calculation of return on average tangible common equity:

 

 

 

 

GAAP net income attributable to WSFS

$

63,908

 

$

74,166

 

$

84,449

 

$

269,156

 

$

222,375

 

Plus: Tax effected amortization of intangible assets

 

2,976

 

 

2,984

 

 

2,925

 

 

11,724

 

 

11,752

 

Net tangible income (non-GAAP)

$

66,884

 

$

77,150

 

$

87,374

 

$

280,880

 

$

234,127

 

Average stockholders’ equity of WSFS

$

2,281,076

 

$

2,327,853

 

$

2,128,869

 

$

2,300,467

 

$

2,398,871

 

Less: Average goodwill and intangible assets

 

1,007,136

 

 

1,007,803

 

 

1,014,985

 

 

1,008,128

 

 

1,012,233

 

Net average tangible common equity

$

1,273,940

 

$

1,320,050

 

$

1,113,884

 

$

1,292,339

 

$

1,386,638

 

Return on average tangible common equity (non-GAAP)

 

20.83

%

 

23.19

%

 

31.12

%

 

21.73

%

 

16.88

%

 
 

Non-GAAP Reconciliation - continued (o):

Three months ended

 

Twelve months ended

 

December 31,

2023

 

September 30,

2023

 

December 31,

2022

 

December 31,

2023

 

December 31,

2022

Calculation of PPNR:

Net income (GAAP)

$

63,505

 

$

74,263

 

$

84,435

 

$

269,025

 

$

222,648

 

Plus: Income tax provision

 

29,365

 

 

22,904

 

 

28,032

 

 

96,245

 

 

77,961

 

Plus: Provision for credit losses

 

24,816

 

 

18,414

 

 

13,396

 

 

88,071

 

 

48,089

 

PPNR (non-GAAP)

$

117,686

 

$

115,581

 

$

125,863

 

$

453,341

 

$

348,698

 

 

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