WSFS Financial Corporation (Nasdaq: WSFS), the parent company of
WSFS Bank, today announced its financial results for the first
quarter of 2021.
Selected quarterly financial results and metrics are as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in millions, except per share data) |
|
1Q 2021 |
|
4Q 2020 |
|
1Q 2020 |
Net interest income |
|
$ |
114.2 |
|
|
$ |
123.0 |
|
|
$ |
116.2 |
|
Fee income |
|
47.8 |
|
|
46.6 |
|
|
40.8 |
|
Total net revenue |
|
162.0 |
|
|
169.6 |
|
|
157.0 |
|
(Recovery of) provision for credit losses |
|
(20.2 |
) |
|
(0.9 |
) |
|
56.6 |
|
Noninterest expense |
|
95.6 |
|
|
93.4 |
|
|
88.5 |
|
Net income attributable to WSFS |
|
65.1 |
|
|
59.8 |
|
|
10.9 |
|
Pre-provision net revenue (PPNR)(1) |
|
66.4 |
|
|
76.3 |
|
|
68.5 |
|
Earnings per share (diluted) |
|
1.36 |
|
|
1.20 |
|
|
0.21 |
|
Return on average assets (ROA) |
|
1.85 |
% |
|
1.73 |
% |
|
0.36 |
% |
Return on average equity (ROE) |
|
14.9 |
|
|
13.0 |
|
|
2.4 |
|
Efficiency ratio |
|
58.9 |
|
|
55.0 |
|
|
56.3 |
|
GAAP results for the quarterly periods shown
below included the following items that are excluded from core
results. For 1Q 2021, the $1.8 million of corporate development and
restructuring expense primarily relates to our pending combination
with Bryn Mawr Bank Corporation (“Bryn Mawr”) anticipated to close
in early 4Q 2021.
|
|
1Q 2021 |
|
4Q 2020 |
|
1Q 2020 |
(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) |
Securities gains |
|
$ |
0.3 |
|
|
$ |
0.01 |
|
|
$ |
3.2 |
|
|
$ |
0.05 |
|
|
$ |
0.7 |
|
|
$ |
0.01 |
|
Unrealized gain on equity investments, net |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
0.7 |
|
|
0.01 |
|
Corporate development and restructuring expense |
|
1.8 |
|
|
0.04 |
|
|
0.3 |
|
|
0.01 |
|
|
1.3 |
|
|
0.02 |
|
Contribution to WSFS Community Foundation |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
3.0 |
|
|
0.04 |
|
(1) As used in this press release, PPNR is a
non-GAAP financial measure calculated as net revenue before
provision for credit losses and net of noninterest expense. 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, President and CEO,
said, “Our 1Q results included a core ROA(2) of 1.89%, a 20%
increase in year-over-year core fee revenue(2), and improvement
across key credit metrics. Our solid operating results and strong
capital position continue to provide momentum to capture
significant organic growth opportunities.
“The quarter reflected the strengthening of our
Customers’ financial health from improved macroeconomic conditions
and outlook along with benefits from government stimulus programs.
These positive economic developments combined with improved credit
quality metrics resulted in a $24.0 million release of our
allowance for credit losses (“ACL”) during the quarter, while still
maintaining a significant ACL coverage ratio of 2.51% (excluding
Paycheck Protection Program (“PPP”) loans) at March 31st.
“Throughout the pandemic, we have focused on
serving our Customers and investing in franchise growth. During the
quarter, we supported nearly $300 million of second round PPP loans
to over 1,800 WSFS and non-WSFS Customers. We also were excited to
announce our agreement to combine with Bryn Mawr during the
quarter. When combined WSFS will be the premier,
locally-headquartered, bank and wealth management franchise in the
Greater Philadelphia and Delaware region.
“We were honored to be ranked number 10 on the
Forbes 12th Annual America's Best Banks list and to receive The
Gallup Exceptional Workplace Award for the fifth time during the
quarter. These recognitions demonstrate our commitment to
sustainable long-term high performance driven by our talented and
engaged Associates.”
(2) As used in this press release, core ROA and
core fee revenue (noninterest income) are non-GAAP financial
measures. Core ROA is calculated as GAAP ROA less certain pre-tax
adjustments and the tax impact of such adjustments and core fee
revenue excludes securities gains and unrealized/realized gains on
equity investments, net. 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
2021:
- Core ROA was 1.89% in 1Q 2021
compared to 0.39% for 1Q 2020.
- Core EPS(3) was $1.39 in 1Q 2021
compared to $0.23 for 1Q 2020.
- Total net credit (recoveries) costs
were $(19.0) million and net charge-offs were $3.8 million, or
0.18% of average gross loans during the quarter. 1Q 2021 results
reflected $24.0 million release of ACL as credit quality improved
quarter-over-quarter, including declines in problem assets,
nonperforming assets, and delinquencies. The ACL coverage ratio was
2.51%, excluding PPP loans, at March 31, 2021.
- Core fee revenue (noninterest
income) was $47.5 million, an increase of $8.0 million, or 20%
compared to 1Q 2020. The increase included $2.2 million of referral
fees related to PPP round two loans and growth across most fee
businesses reflecting the diversity of our business model offset by
a $2.7 million year-over-year adverse impact from the Durbin
Amendment on debit fees and the lower interest rate environment on
Cash Connect® bailment fees.
- WSFS supported nearly $300 million
of second round PPP loans, which are not on the balance sheet, to
over 1,800 WSFS and non-WSFS Customers during the quarter. $231.4
million of round one PPP loans were forgiven during the quarter and
$526.8 million remain as of March 31, 2021.
- The Board of Directors approved a
quarterly cash dividend of $0.13 per share of common stock, an 8%
increase from our cash dividend in 4Q 2020. During the quarter,
WSFS repurchased 267,309 shares at an average price of $44.97,
totaling $12.0 million.
(3) As used in this press release, core EPS 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 2021 Discussion of Financial
Results
Balance Sheet
The following tables summarize loan and lease
and customer deposit balances and composition at
March 31, 2021 compared to December 31, 2020 and
March 31, 2020:
Loans and Leases |
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands) |
|
March 31, 2021 |
|
December 31, 2020 |
|
March 31, 2020 |
Commercial & industrial |
|
$ |
3,212,970 |
|
|
38 |
% |
|
$ |
3,299,118 |
|
|
37 |
% |
|
$ |
3,412,266 |
|
|
40 |
% |
Commercial real estate (CRE) |
|
1,975,966 |
|
|
23 |
|
|
2,086,062 |
|
|
23 |
|
|
2,223,117 |
|
|
26 |
|
PPP |
|
526,789 |
|
|
6 |
|
|
751,199 |
|
|
8 |
|
|
— |
|
|
— |
|
Construction |
|
784,101 |
|
|
9 |
|
|
716,275 |
|
|
8 |
|
|
626,253 |
|
|
8 |
|
Commercial small business leases |
|
264,937 |
|
|
3 |
|
|
248,885 |
|
|
3 |
|
|
201,753 |
|
|
2 |
|
Total commercial loans |
|
6,764,763 |
|
|
79 |
|
|
7,101,539 |
|
|
79 |
|
|
6,463,389 |
|
|
76 |
|
Residential mortgage |
|
829,234 |
|
|
10 |
|
|
954,824 |
|
|
11 |
|
|
1,054,544 |
|
|
13 |
|
Consumer |
|
1,140,034 |
|
|
13 |
|
|
1,165,917 |
|
|
13 |
|
|
1,118,287 |
|
|
13 |
|
ACL |
|
(204,818 |
) |
|
(2 |
) |
|
(228,804 |
) |
|
(3 |
) |
|
(139,073 |
) |
|
(2 |
) |
Net loans and leases |
|
$ |
8,529,213 |
|
|
100 |
% |
|
$ |
8,993,476 |
|
|
100 |
% |
|
$ |
8,497,147 |
|
|
100 |
% |
|
Customer Deposits |
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands) |
|
March 31, 2021 |
|
December 31, 2020 |
|
March 31, 2020 |
Noninterest demand |
|
$ |
3,857,610 |
|
|
31 |
% |
|
$ |
3,415,021 |
|
|
29 |
% |
|
$ |
2,314,982 |
|
|
25 |
% |
Interest-bearing demand |
|
2,659,336 |
|
|
22 |
|
|
2,635,740 |
|
|
23 |
|
|
2,093,388 |
|
|
22 |
|
Savings |
|
1,886,222 |
|
|
16 |
|
|
1,774,332 |
|
|
15 |
|
|
1,594,735 |
|
|
17 |
|
Money market |
|
2,721,647 |
|
|
22 |
|
|
2,654,439 |
|
|
23 |
|
|
2,149,119 |
|
|
23 |
|
Total core deposits |
|
11,124,815 |
|
|
91 |
|
|
10,479,532 |
|
|
90 |
|
|
8,152,224 |
|
|
87 |
|
Customer time deposits |
|
1,093,984 |
|
|
9 |
|
|
1,158,845 |
|
|
10 |
|
|
1,272,154 |
|
|
13 |
|
Total customer deposits |
|
$ |
12,218,799 |
|
|
100 |
% |
|
$ |
11,638,377 |
|
|
100 |
% |
|
$ |
9,424,378 |
|
|
100 |
% |
|
At March 31, 2021, WSFS’ net loan and lease
portfolio decreased $464.3 million when compared with
December 31, 2020, including a $224.4 million decrease in PPP
loans. Excluding PPP loans, purposeful run-off portfolios, and the
ACL, loans decreased $107.6 million, or 1% (not annualized), during
the quarter. The decrease in the quarter was primarily due to lower
commercial loan demand resulting from higher levels of borrower
liquidity.
Net loans and leases at March 31, 2021
increased $32.1 million when compared with March 31, 2020.
Excluding PPP loans, run-off portfolios, and the ACL, loans
increased $55.9 million, or 1%, year-over-year, including growth
across construction, commercial small business leases, and home
equity installment loans originated through our partnership with
Spring EQ.
Total customer deposits were $12.2 billion at
March 31, 2021, a $580.4 million increase from
December 31, 2020 and a $2.8 billion increase from
March 31, 2020, reflecting elevated deposits from customers
who received PPP loans, government stimulus impact, and lower
customer spending. Core deposits were $11.1 billion at
March 31, 2021, an increase of $645.3 million over the prior
quarter primarily due to approximately $258.8 million of deposits
from the second round of PPP loans and continued elevated customer
liquidity. Core deposits were a strong 91% of total customer
deposits and no- and low-cost checking accounts represented a
robust 53% of total customer deposits at March 31, 2021. These
core deposits predominantly represent longer-term, less
price-sensitive customer relationships. The ratio of net loans and
leases to customer deposits was 70% at March 31, 2021
reflecting significant liquidity capacity.
Net Interest Income
|
Three Months Ending |
(Dollars in thousands) |
|
March 31, 2021 |
|
December 31, 2020 |
|
March 31, 2020 |
Net interest income before purchase accretion and PPP |
|
$ |
93,524 |
|
|
$ |
97,741 |
|
|
$ |
101,941 |
|
Purchase accounting accretion |
|
11,295 |
|
|
14,754 |
|
|
14,209 |
|
Net interest income before PPP |
|
104,819 |
|
|
112,495 |
|
|
116,150 |
|
PPP |
|
9,366 |
|
|
10,506 |
|
|
— |
|
Net interest income |
|
$ |
114,185 |
|
|
$ |
123,001 |
|
|
$ |
116,150 |
|
|
|
|
|
|
|
|
Net interest margin before purchase accretion and PPP |
|
3.10 |
% |
|
3.36 |
% |
|
3.85 |
% |
Purchase accounting accretion |
|
0.37 |
|
|
0.51 |
|
|
0.53 |
|
Net interest margin before PPP |
|
3.47 |
|
|
3.87 |
|
|
4.38 |
|
PPP |
|
0.12 |
|
|
0.06 |
|
|
— |
|
Net interest margin |
|
3.59 |
% |
|
3.93 |
% |
|
4.38 |
% |
1Q 2021 results were significantly impacted by
continued high levels of excess customer liquidity described above.
The additional customer deposits reduced our net interest margin by
approximately 39 bps compared to 1Q 2020 and 18 bps from 4Q
2020.
Net interest income decreased $2.0 million, or
2%, compared to 1Q 2020, due to a $8.3 million reduction primarily
from the lower rate environment and $2.9 million of lower purchase
accounting accretion, partially offset by $9.4 million of PPP
income in 1Q 2021 including $7.8 million of fee accretion. Net
interest margin decreased 79 bps from 1Q 2020 due to 39 bps from
the significant short-term liquidity increase in customer deposits,
a 36 bps net decline from the lower rate environment and balance
sheet mix, and 16 bps from lower purchase accounting accretion,
partially offset by a 12 bps increase from PPP.
Net interest income decreased $8.8 million, or
7% (not annualized), from 4Q 2020 due to a $4.2 million reduction
primarily from lower loan balances and lower yields from turnover
in our loan and investment portfolio, a $3.5 million decrease in
purchase accounting accretion and $1.1 million of lower PPP income.
Net interest margin decreased 34 bps including 18 bps from the
significant short-term liquidity increase in customer deposits, 14
bps from lower purchase accounting accretion, and 12 bps from lower
loan balances and investment yields, partially offset by a 6 bps
increase from PPP and 4 bps from lower funding costs.
Credit Quality
Credit quality improved across all leading
metrics during the quarter, including total problem assets which
were $723.6 million at March 31, 2021 compared to $766.0
million at December 31, 2020. Total problem assets includes
all criticized, classified, and nonperforming loans as well as
other real estate owned (OREO).
Delinquencies decreased to $69.3 million at
March 31, 2021, or 0.81% of gross loans, and are relatively
consistent with longer term historical trends. Nonperforming assets
declined to $49.5 million at March 31, 2021 primarily due to
the positive resolution of one $15.0 million multi-family
commercial relationship that went nonperforming in 4Q 2020.
Customer loans receiving short-term loan modifications at
March 31, 2021 were $110.9 million, or 1% of the loan
portfolio excluding PPP. Net charge-offs for 1Q 2021 were a low
$3.8 million, or 0.18% (annualized), of average gross loans.
Total net credit (recoveries) costs were $(19.0)
million in the quarter compared to $(0.5) million in 4Q 2020, and
the ACL decreased to $204.8 million as economic forecasts improved
from the prior quarter and new loan originations were mainly offset
by normal portfolio run-off.
The following table summarizes credit quality
metrics as of and for the period ended March 31, 2021 compared
to December 31, 2020 and March 31, 2020.
(Dollars in millions) |
March 31, 2021 |
|
December 31, 2020 |
|
March 31, 2020 |
Problem assets |
$ |
723.6 |
|
|
$ |
766.0 |
|
|
$ |
221.9 |
|
Nonperforming assets |
49.5 |
|
|
60.5 |
|
|
38.1 |
|
Delinquencies |
69.3 |
|
|
78.9 |
|
|
59.8 |
|
Net charge-offs |
3.8 |
|
|
3.0 |
|
|
1.0 |
|
Total net credit (recoveries) costs (r) |
(19.0 |
) |
|
(0.5 |
) |
|
57.1 |
|
Problem assets to total Tier 1 capital plus ACL |
46.72 |
% |
|
50.67 |
% |
|
14.68 |
% |
Classified assets to total Tier 1 capital plus ACL |
32.63 |
|
|
35.02 |
|
|
12.64 |
|
Ratio of nonperforming assets to total assets |
0.34 |
|
|
0.42 |
|
|
0.31 |
|
Ratio of nonperforming assets (excluding accruing TDRs) to total
assets |
0.23 |
|
|
0.31 |
|
|
0.20 |
|
Delinquencies to gross loans |
0.81 |
|
|
0.88 |
|
|
0.69 |
|
Ratio of quarterly net charge-offs to average gross loans |
0.18 |
|
|
0.13 |
|
|
0.04 |
|
Ratio of allowance for credit losses to total loans and leases
(q) |
2.36 |
|
|
2.51 |
|
|
1.60 |
|
Ratio of allowance for credit losses to nonaccruing loans |
644 |
|
|
546 |
|
|
722 |
|
See “Notes”
Core Fee Revenue
Core fee revenue (noninterest income) was $47.5
million, an increase of $8.0 million, or 20%, compared to 1Q 2020,
including a $2.7 million decrease in interchange fees resulting
from the Durbin Amendment effective at the beginning of 3Q 2020 and
$2.2 million of referral fees related to PPP round two loans during
the quarter. The year-over-year increase also included $5.1 million
of mortgage banking fees resulting from lower interest rates and
improved secondary market conditions, $2.8 million of Trust
services revenue, and $0.9 million of other wealth services
revenue. Other banking fee revenue increased $1.7 million,
excluding the impact of the Durbin Amendment and PPP referral fees,
due primarily to a $0.8 million gain on sale of an acquired loan
that was included in our run-off portfolio and $0.7 million of
one-time items that reduced fee revenue in 1Q 2020. Partially
offsetting these increases was a $2.0 million decrease in Cash
Connect® year-over-year primarily driven by the significant decline
in interest rates compared to the prior year and fully offset by
lower funding costs.
Core fee revenue increased $4.0 million, or 9%,
compared to 4Q 2020, due to $2.2 million of PPP round two referral
fees in the quarter, a $1.9 million increase in mortgage banking
revenue, and a $0.8 million increase in wealth management fees.
Partially offsetting these increases was a $0.6 million decrease in
gains on sale of SBA loans.
For 1Q 2021, core fee revenue was 29.3% of core
net revenue compared to 25.3% at 1Q 2020, and was diversified among
various sources, including traditional banking, mortgage banking,
trust and wealth management and cash logistics services (Cash
Connect®). The year-over-year percentage comparison includes the
impact of lower net interest income due to the lower rate
environment and PPP round two referral fees in the current quarter,
offset by the adverse impacts of the Durbin Amendment.
Core Noninterest
Expense(4)
Core noninterest expense of $93.8 million for 1Q
2021 increased $9.6 million compared to $84.2 million in 1Q 2020,
primarily due to a $7.8 million increase in salaries and benefits.
The increase included $2.9 million from salaries due to franchise
growth, $2.6 million from higher incentive compensation, and $0.8
million from higher state unemployment rates. Additionally,
equipment expenses increased $2.4 million primarily due to higher
third-party software expense related to our ongoing delivery
transformation initiatives.
When compared to 4Q 2020, core noninterest
expense increased $0.7 million primarily due to $1.7 million of
seasonally higher salaries and benefits costs, partially offset by
$1.0 million of lower net other operating costs.
Our core efficiency ratio(4) was 57.9% in 1Q
2021, compared to 55.8% in 4Q 2020 and 54.0% in 1Q 2020.
Income Taxes
We recorded a $21.4 million income tax provision
in 1Q 2021, compared to $17.5 million in 4Q 2020 and $1.3 million
in 1Q 2020. The effective tax rate was 24.7% in 1Q 2021, 22.6% in
4Q 2020, and 10.9% in 1Q 2020. The year-over-year increase
primarily reflects a one-time tax benefit of $1.8 million related
to the Coronavirus Aid, Relief, and Economic Security Act, as
amended (“CARES Act”), in 1Q 2020.
(4) As used in this press release, core
noninterest expense and core efficiency ratio are non-GAAP
financial measures. These non-GAAP financial measures exclude
corporate development and restructuring expense and the
contribution to the WSFS Community Fund. 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
The Board of Directors approved a quarterly cash
dividend of $0.13 per share of common stock, an 8% increase from 4Q
2020. This dividend will be paid on May 21, 2021 to stockholders of
record as of May 7, 2021.
During 1Q 2021, WSFS repurchased 267,309 shares
at an average price of $44.97, totaling $12.0 million. WSFS has
4,381,161 shares, or approximately 9% of outstanding shares,
remaining to repurchase under our current authorization.
WSFS’ total stockholders’ equity decreased $21.1
million, or 1% (not annualized), during 1Q 2021, primarily due to a
$69.8 million market-value decrease on available-for-sale
securities, $12.0 million of share repurchases, and the dividend on
common stock paid during the quarter, partially offset by quarterly
earnings.
WSFS’ tangible common equity(5) decreased $18.4
million, or 1% (not annualized) compared to December 31, 2020
for the reasons described above. WSFS’ common equity to assets
ratio was 12.02% at March 31, 2021, and our tangible common
equity to tangible assets ratio(5) decreased by 38 bps during the
quarter to 8.58%.
At March 31, 2021, book value per share was
$37.27, a decrease of $0.25, or 1%, from December 31, 2020,
and tangible common book value per share(5) was $25.60, a decrease
of $0.25 from December 31, 2020.
At March 31, 2021, WSFS Bank’s Tier 1
leverage ratio of 9.82%, Common Equity Tier 1 capital ratio and
Tier 1 capital ratio of 13.20%, and Total Capital ratio of 14.46%
were all substantially in excess of the “well-capitalized”
regulatory benchmarks.
(5) As used in this release, tangible common
equity, tangible common equity to tangible assets 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, and credit and deposit products to individual,
corporate, and institutional clients through multiple integrated
businesses. Combined, these businesses had $24.7 billion in assets
under management (AUM) and assets under administration (AUA) as of
March 31, 2021.
Wealth Management reported pre-tax income of
$9.3 million in 1Q 2021 compared to $3.8 million in 1Q 2020, and
$9.2 million in 4Q 2020.
For 1Q 2021, total revenue (net interest income
and fee income) was $19.2 million, an increase of $4.4 million, or
30%, compared to 1Q 2020 and flat compared to 4Q 2020. The year
over year increase was due to strong results across all Wealth
Management lines of business.
WSFS Institutional Services®’s revenue of $7.8
million in 1Q 2021 was up 51% from 1Q 2020 and up 4% from 4Q 2020.
Growth in our corporate trust business was supported by continued
strength in the debt securitization market as reflected by a 12%
increase in our transaction volume relative to 4Q 2020.
Revenue from our advisory businesses, consisting
of West Capital Management®, Cypress and WSFS Wealth® Investments,
totaled $4.2 million in 1Q 2021 compared to $3.4 million in 1Q
2020, and $3.5 million in 4Q 2020. Net AUM at the end of 1Q 2021
was 2% lower (non-annualized) than 4Q 2020 due to client outflows,
but increased 17% from 1Q 2020 primarily from strong equity market
performance.
Total noninterest expense (including
intercompany allocations and excluding provision for credit losses)
was $10.4 million in 1Q 2021, compared to $9.4 million in 1Q 2020
and $10.0 million in 4Q 2020. Wealth Management efficiency ratio
was 47% in 1Q 2021, compared to 58% in 1Q 2020 and 47% in 4Q
2020.
Cash Connect®
Cash Connect® is a premier provider of ATM vault
cash, smart safe and cash logistics services in the United States.
Cash Connect® services over 33,000 non-bank ATMs and retail deposit
safes nationwide supplying or servicing approximately $1.7 billion
in cash at March 31, 2021. Cash Connect® also supports over
600 ATMs for WSFS Bank Customers, which is one of the largest
branded ATM networks in our market.
Cash Connect® reported pre-tax income of $1.7
million for 1Q 2021, which was a decrease of $0.3 million, or 15%,
compared to 1Q 2020 primarily due to allocated expenses. Pre-tax
income in 1Q 2021 was $0.5 million lower than 4Q 2020, driven by
timing of insurance related expenses. ROA of 1.29% in 1Q 2021
decreased 55 bps from 1Q 2020 and decreased 45 bps from 4Q 2020.
Normalized for insurance costs of $0.4 million due to timing, 1Q
2021 pre-tax income was $2.1 million, and ROA was 1.59%.
Net revenue of $10.1 million in 1Q 2021 was down
$0.9 million from 1Q 2020, driven by the lower interest rate
environment, fully offset by lower cost of funds (including lower
third party funding fees in noninterest expense) and higher cash
volume. Compared to 4Q 2020, net revenue decreased $0.2 million
driven by a decrease in volume of ATM transaction volume-related
activity.
Noninterest expense (including intercompany
allocations of expense) was $8.4 million in 1Q 2021, a decrease of
$0.6 million compared to 1Q 2020 driven by lower funding fees as
noted above, and $0.2 million higher compared to 4Q 2020.
During 1Q 2021, Cash Connect® saw continued
growth in its smart safe and ATM managed services, adding 337 units
and 514 units, respectively. The division's total cash managed
increased 11% (not annualized), exceeding $1.7 billion at the end
of 1Q 2021, as Cash Connect continues to partner with retailers and
top financial institutions providing logistics and serving cash
solutions nationwide.
First Quarter 2021 Earnings Release Conference
Call
Management will conduct a conference call to
review 1Q 2021 results at 1:00 p.m. Eastern Time (ET) on Friday,
April 23, 2021. Interested parties may listen to this call by
dialing 1-877-312-5857 and using Conference ID #4169716. A
rebroadcast of the conference call will be available beginning at
4:00 p.m. ET on April 23, 2021 until May 4, 2021 by
dialing 1-855-859-2056 and using Conference ID #4169716.
About WSFS Financial Corporation
WSFS Financial Corporation is a multi-billion
dollar financial services company. Its primary subsidiary, WSFS
Bank, is the oldest and largest locally-managed bank and trust
company headquartered in Delaware and the Greater Philadelphia
region. As of March 31, 2021, WSFS Financial Corporation had
$14.7 billion in assets on its balance sheet and $24.7 billion in
assets under management and administration. WSFS operates from 111
offices, 88 of which are banking offices, located in Pennsylvania
(51), Delaware (42), New Jersey (16), Virginia (1) and Nevada (1)
and provides comprehensive financial services including commercial
banking, retail banking, cash management and trust and wealth
management. Other subsidiaries or divisions include Arrow Land
Transfer, Cash Connect®, Cypress Capital Management, LLC (Cypress),
Christiana Trust Company of Delaware®, NewLane Finance®,
Powdermill® Financial Solutions, West Capital Management®, 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 Statement
DisclaimerThis 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 particularly in the markets in which the
Company operates and in which its loans are concentrated, including
possible declines in housing markets, an increase in unemployment
levels and slowdowns in economic growth, including as a result of
the novel coronavirus ("COVID-19") pandemic; possible additional
loan losses and impairment of the collectability of loans,
particularly as a result of the COVID-19 pandemic and the policies
and programs implemented by the CARES Act including its automatic
loan forbearance provisions and our PPP lending activities;
additional credit, fraud and litigation risks associated with our
PPP lending activities; economic and financial impact of federal,
state and local emergency orders and other actions taken in
response to the COVID-19 pandemic; the continuation of these
conditions related to the COVID-19 pandemic, including whether due
to a resurgence or additional waves of COVID-19 infections,
particularly as the geographic areas in which we operate continue
to re-open, and how quickly and to what extent normal economic and
operating conditions can resume, especially as a vaccine becomes
widely available; 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; 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 the
effect of the transition to the Current Expected Credit Losses
(CECL) methodology for allowances and related adjustments),
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; conditions in the financial markets,
including the destabilized economic environment caused by the
COVID-19 pandemic, that may limit the Company's access to
additional funding to meet its liquidity needs; the intention of
the United Kingdom's Financial Conduct Authority (FCA) to cease
support of London Inter-Bank Offered Rate (LIBOR) and the
transition to an alternative reference interest rate, such as the
Secured Overnight Funding Rate (SOFR), including methodologies for
calculating the rate that are different from the LIBOR methodology
and changed language for existing and new floating or adjustable
rate contracts; the success of the Company's growth plans,
including its plans to grow the commercial small business leasing
portfolio and residential mortgage small business and Small
Business Administration portfolios; 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, including its pending
acquisition of Bryn Mawr; the Company’s ability to complete the
acquisition of Bryn Mawr on the terms proposed, which are subject
to a number of conditions, risks and uncertainties, including the
possibility that the proposed acquisition does not close when
expected or at all because all conditions to closing are not
received or satisfied on a timely basis or at all, the failure to
close for any other reason, diversion of management time on
merger-related issues, risks relating to the potential dilutive
effect of shares of the Company’s common stock to be issued in the
acquisition of Bryn Mawr, and the reaction to the acquisition of
Bryn Mawr of the companies’ customers, employees and
counterparties; 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
operational controls of the Company's Cash Connect® division;
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 widespread 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 and natural disasters such as floods, droughts,
wind, tornadoes and hurricanes as well as effects from geopolitical
instability, 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 due to
changes in the interest rate environment, particularly as a result
of the COVID-19 pandemic, 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; and other risks and uncertainties, including
those discussed in the Company's Form 10-K for the year ended
December 31, 2020 and other documents filed by the Company with the
Securities and Exchange Commission from time to time.
We caution readers not to place undue reliance
on any such forward-looking statements, which speak only as of the
date on which they are made, and 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 CORPORATIONFINANCIAL
HIGHLIGHTSSUMMARY STATEMENTS OF INCOME
(Unaudited)
|
|
Three months ended |
(Dollars in thousands, except per share data) |
|
March 31, 2021 |
|
December 31, 2020 |
|
March 31, 2020 |
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on loans |
|
$ |
108,852 |
|
|
$ |
118,737 |
|
|
$ |
119,202 |
|
Interest on mortgage-backed securities |
|
10,704 |
|
|
10,923 |
|
|
13,219 |
|
Interest and dividends on investment securities |
|
1,449 |
|
|
1,419 |
|
|
926 |
|
Other interest income |
|
276 |
|
|
218 |
|
|
508 |
|
|
|
121,281 |
|
|
131,297 |
|
|
133,855 |
|
Interest expense: |
|
|
|
|
|
|
Interest on deposits |
|
4,496 |
|
|
6,447 |
|
|
14,637 |
|
Interest on Federal Home Loan Bank advances |
|
5 |
|
|
50 |
|
|
830 |
|
Interest on senior debt |
|
2,266 |
|
|
1,460 |
|
|
1,179 |
|
Interest on trust preferred borrowings |
|
324 |
|
|
334 |
|
|
586 |
|
Interest on other borrowings |
|
5 |
|
|
5 |
|
|
473 |
|
|
|
7,096 |
|
|
8,296 |
|
|
17,705 |
|
Net interest income |
|
114,185 |
|
|
123,001 |
|
|
116,150 |
|
(Recovery of) provision for credit losses |
|
(20,160 |
) |
|
(936 |
) |
|
56,646 |
|
Net interest income after (recovery of) provision for credit
losses |
|
134,345 |
|
|
123,937 |
|
|
59,504 |
|
Noninterest income: |
|
|
|
|
|
|
Credit/debit card and ATM income |
|
6,805 |
|
|
7,098 |
|
|
11,359 |
|
Investment management and fiduciary revenue |
|
14,253 |
|
|
13,822 |
|
|
10,962 |
|
Deposit service charges |
|
5,460 |
|
|
5,405 |
|
|
5,647 |
|
Mortgage banking activities, net |
|
8,600 |
|
|
6,729 |
|
|
3,471 |
|
Loan and lease fee income |
|
3,485 |
|
|
1,137 |
|
|
1,119 |
|
Securities gains, net |
|
329 |
|
|
3,153 |
|
|
693 |
|
Unrealized gain on equity investment, net |
|
— |
|
|
— |
|
|
668 |
|
Bank-owned life insurance income |
|
205 |
|
|
269 |
|
|
(25 |
) |
Other income |
|
8,685 |
|
|
9,019 |
|
|
6,953 |
|
|
|
47,822 |
|
|
46,632 |
|
|
40,847 |
|
Noninterest expense: |
|
|
|
|
|
|
Salaries, benefits and other compensation |
|
53,138 |
|
|
51,442 |
|
|
45,346 |
|
Occupancy expense |
|
8,460 |
|
|
7,991 |
|
|
7,666 |
|
Equipment expense |
|
7,391 |
|
|
7,392 |
|
|
4,964 |
|
Data processing and operations expense |
|
3,385 |
|
|
3,263 |
|
|
3,078 |
|
Professional fees |
|
3,856 |
|
|
5,123 |
|
|
4,600 |
|
Marketing expense |
|
992 |
|
|
2,060 |
|
|
951 |
|
FDIC expenses |
|
1,069 |
|
|
1,068 |
|
|
(54 |
) |
Loan workout and other credit costs |
|
1,120 |
|
|
437 |
|
|
453 |
|
Corporate development expense |
|
2,095 |
|
|
(242 |
) |
|
1,341 |
|
Restructuring expense |
|
(265 |
) |
|
510 |
|
|
— |
|
Other operating expenses |
|
14,378 |
|
|
14,329 |
|
|
20,151 |
|
|
|
95,619 |
|
|
93,373 |
|
|
88,496 |
|
Income before taxes |
|
86,548 |
|
|
77,196 |
|
|
11,855 |
|
Income tax provision |
|
21,407 |
|
|
17,455 |
|
|
1,288 |
|
Net income |
|
$ |
65,141 |
|
|
$ |
59,741 |
|
|
$ |
10,567 |
|
Less: Net income (loss) attributable to noncontrolling
interest |
|
59 |
|
|
(72 |
) |
|
(360 |
) |
Net income attributable to WSFS |
|
$ |
65,082 |
|
|
$ |
59,813 |
|
|
$ |
10,927 |
|
Diluted earnings per share of common stock: |
|
$ |
1.36 |
|
|
$ |
1.20 |
|
|
$ |
0.21 |
|
Weighted average shares of common stock outstanding for fully
diluted EPS |
|
47,792,108 |
|
|
49,707,973 |
|
|
51,164,224 |
|
See “Notes”
WSFS FINANCIAL CORPORATIONFINANCIAL
HIGHLIGHTSSUMMARY STATEMENTS OF INCOME
(Unaudited) - continued
|
|
Three months ended |
|
|
March 31, 2021 |
|
December 31, 2020 |
|
March 31, 2020 |
Performance Ratios: |
|
|
|
|
|
|
Return on average assets (a) |
|
1.85 |
% |
|
1.73 |
% |
|
0.36 |
% |
Return on average equity (a) |
|
14.90 |
|
|
13.00 |
|
|
2.39 |
|
Return on average tangible common equity (a)(o) |
|
22.38 |
|
|
19.37 |
|
|
4.13 |
|
Net interest margin (a)(b) |
|
3.59 |
|
|
3.93 |
|
|
4.38 |
|
Efficiency ratio (c) |
|
58.93 |
|
|
54.95 |
|
|
56.27 |
|
Noninterest income as a percentage of total net revenue (b) |
|
29.47 |
|
|
27.45 |
|
|
25.97 |
|
See “Notes”
WSFS FINANCIAL CORPORATIONFINANCIAL
HIGHLIGHTS (Continued)SUMMARY STATEMENTS OF
FINANCIAL CONDITION (Unaudited)
(Dollars in thousands) |
|
March 31, 2021 |
|
December 31, 2020 |
|
March 31, 2020 |
Assets: |
|
|
|
|
|
|
Cash and due from banks |
|
$ |
1,628,773 |
|
|
$ |
1,244,705 |
|
|
$ |
182,125 |
|
Cash in non-owned ATMs |
|
428,180 |
|
|
402,339 |
|
|
322,844 |
|
Investment securities, available-for-sale (d) |
|
2,987,885 |
|
|
2,529,057 |
|
|
2,048,400 |
|
Investment securities, held-to-maturity |
|
103,523 |
|
|
111,741 |
|
|
134,047 |
|
Other investments |
|
22,941 |
|
|
23,003 |
|
|
104,843 |
|
Net loans and leases (e)(f)(l) |
|
8,529,213 |
|
|
8,993,476 |
|
|
8,497,147 |
|
Bank owned life insurance |
|
32,255 |
|
|
32,051 |
|
|
30,093 |
|
Goodwill and intangibles |
|
554,701 |
|
|
557,386 |
|
|
565,763 |
|
Other assets |
|
442,981 |
|
|
440,156 |
|
|
393,628 |
|
Total assets |
|
$ |
14,730,452 |
|
|
$ |
14,333,914 |
|
|
$ |
12,278,890 |
|
Liabilities and Stockholders’ Equity: |
|
|
|
|
|
|
Noninterest-bearing deposits |
|
$ |
3,857,610 |
|
|
$ |
3,415,021 |
|
|
$ |
2,314,982 |
|
Interest-bearing deposits |
|
8,361,189 |
|
|
8,223,356 |
|
|
7,109,396 |
|
Total customer deposits |
|
12,218,799 |
|
|
11,638,377 |
|
|
9,424,378 |
|
Brokered deposits |
|
64,901 |
|
|
218,287 |
|
|
284,976 |
|
Total deposits |
|
12,283,700 |
|
|
11,856,664 |
|
|
9,709,354 |
|
Federal Home Loan Bank advances |
|
— |
|
|
6,623 |
|
|
119,971 |
|
Other borrowings |
|
335,201 |
|
|
334,018 |
|
|
281,314 |
|
Other liabilities |
|
343,097 |
|
|
347,129 |
|
|
334,832 |
|
Total liabilities |
|
12,961,998 |
|
|
12,544,434 |
|
|
10,445,471 |
|
Stockholders’ equity of WSFS |
|
1,770,641 |
|
|
1,791,726 |
|
|
1,834,594 |
|
Noncontrolling interest |
|
(2,187 |
) |
|
(2,246 |
) |
|
(1,175 |
) |
Total stockholders' equity |
|
1,768,454 |
|
|
1,789,480 |
|
|
1,833,419 |
|
Total liabilities and stockholders' equity |
|
$ |
14,730,452 |
|
|
$ |
14,333,914 |
|
|
$ |
12,278,890 |
|
Capital Ratios: |
|
|
|
|
|
|
Equity to asset ratio |
|
12.02 |
% |
|
12.50 |
% |
|
14.94 |
% |
Tangible common equity to tangible asset ratio (o) |
|
8.58 |
|
|
8.96 |
|
|
10.83 |
|
Common equity Tier 1 capital (required: 4.5%; well capitalized:
6.5%) (g) |
|
13.20 |
|
|
12.50 |
|
|
13.41 |
|
Tier 1 leverage (required: 4.00%; well-capitalized: 5.00%) (g) |
|
9.82 |
|
|
9.74 |
|
|
11.85 |
|
Tier 1 risk-based capital (required: 6.00%; well-capitalized:
8.00%) (g) |
|
13.20 |
|
|
12.50 |
|
|
13.41 |
|
Total risk-based capital (required: 8.00%; well-capitalized:
10.00%) (g) |
|
14.46 |
|
|
13.76 |
|
|
14.53 |
|
Asset Quality Indicators: |
|
|
|
|
|
|
Nonperforming assets: |
|
|
|
|
|
|
Nonaccruing loans |
|
$ |
31,792 |
|
|
$ |
41,908 |
|
|
$ |
19,250 |
|
Troubled debt restructuring (accruing) |
|
15,684 |
|
|
15,539 |
|
|
14,070 |
|
Assets acquired through foreclosure |
|
2,068 |
|
|
3,061 |
|
|
4,825 |
|
Total nonperforming assets |
|
$ |
49,544 |
|
|
$ |
60,508 |
|
|
$ |
38,145 |
|
Past due loans (h) |
|
$ |
7,678 |
|
|
$ |
16,694 |
|
|
$ |
14,282 |
|
Allowance for credit losses |
|
204,823 |
|
|
228,810 |
|
|
139,081 |
|
Ratio of nonperforming assets to total assets |
|
0.34 |
% |
|
0.42 |
% |
|
0.31 |
% |
Ratio of nonperforming assets (excluding accruing TDRs) to total
assets |
|
0.23 |
|
|
0.31 |
|
|
0.20 |
|
Ratio of allowance for credit losses to total loans and leases
(q) |
|
2.36 |
|
|
2.51 |
|
|
1.60 |
|
Ratio of allowance for credit losses to nonaccruing loans |
|
644 |
|
|
546 |
|
|
722 |
|
Ratio of quarterly net charge-offs to average gross loans
(a)(e)(i)(n) |
|
0.18 |
|
|
0.13 |
|
|
0.04 |
|
Ratio of year-to-date net charge-offs to average gross loans
(a)(e)(i)(n) |
|
0.18 |
|
|
0.09 |
|
|
0.04 |
|
See “Notes”
WSFS FINANCIAL CORPORATIONFINANCIAL
HIGHLIGHTS (Continued) AVERAGE BALANCE
SHEET (Unaudited)
(Dollars in thousands) |
|
Three months ended |
|
|
March 31, 2021 |
|
December 31, 2020 |
|
March 31, 2020 |
|
|
AverageBalance |
|
Interest &Dividends |
|
Yield/Rate(a)(b) |
|
AverageBalance |
|
Interest &Dividends |
|
Yield/Rate(a)(b) |
|
AverageBalance |
|
Interest &Dividends |
|
Yield/Rate(a)(b) |
Assets: |
Interest-earning assets: |
Loans: (e) (j) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans and leases (p) |
|
$ |
4,138,034 |
|
|
$ |
52,620 |
|
|
5.16 |
% |
|
$ |
4,394,992 |
|
|
$ |
59,758 |
|
|
5.42 |
% |
|
$ |
3,533,626 |
|
|
$ |
55,693 |
|
|
6.35 |
% |
Commercial real estate loans (s) |
|
2,803,378 |
|
|
29,191 |
|
|
4.22 |
|
|
2,812,685 |
|
|
30,071 |
|
|
4.25 |
|
|
2,808,867 |
|
|
34,292 |
|
|
4.91 |
|
Residential mortgage |
|
734,593 |
|
|
12,864 |
|
|
7.00 |
|
|
823,305 |
|
|
14,049 |
|
|
6.83 |
|
|
992,408 |
|
|
13,541 |
|
|
5.46 |
|
Consumer loans |
|
1,159,588 |
|
|
12,836 |
|
|
4.49 |
|
|
1,169,238 |
|
|
13,578 |
|
|
4.62 |
|
|
1,130,223 |
|
|
14,935 |
|
|
5.31 |
|
Loans held for sale |
|
161,287 |
|
|
1,341 |
|
|
3.37 |
|
|
152,138 |
|
|
1,281 |
|
|
3.35 |
|
|
69,884 |
|
|
741 |
|
|
4.26 |
|
Total loans and leases |
|
8,996,880 |
|
|
108,852 |
|
|
4.91 |
|
|
9,352,358 |
|
|
118,737 |
|
|
5.05 |
|
|
8,535,008 |
|
|
119,202 |
|
|
5.62 |
|
Mortgage-backed securities (d) |
|
2,507,910 |
|
|
10,704 |
|
|
1.71 |
|
|
2,167,521 |
|
|
10,923 |
|
|
2.02 |
|
|
1,959,637 |
|
|
13,219 |
|
|
2.70 |
|
Investment securities (d) |
|
336,410 |
|
|
1,449 |
|
|
1.98 |
|
|
324,679 |
|
|
1,419 |
|
|
1.98 |
|
|
131,121 |
|
|
926 |
|
|
3.40 |
|
Other interest-earning assets |
|
1,103,632 |
|
|
276 |
|
|
0.10 |
|
|
644,785 |
|
|
218 |
|
|
0.13 |
|
|
76,356 |
|
|
508 |
|
|
2.68 |
|
Total interest-earning assets |
|
12,944,832 |
|
|
$ |
121,281 |
|
|
3.81 |
% |
|
12,489,343 |
|
|
$ |
131,297 |
|
|
4.19 |
% |
|
10,702,122 |
|
|
$ |
133,855 |
|
|
5.04 |
% |
Allowance for credit losses |
|
(226,911 |
) |
|
|
|
|
|
(232,053 |
) |
|
|
|
|
|
(85,055 |
) |
|
|
|
|
Cash and due from banks |
|
114,725 |
|
|
|
|
|
|
93,968 |
|
|
|
|
|
|
139,836 |
|
|
|
|
|
Cash in non-owned ATMs |
|
393,964 |
|
|
|
|
|
|
365,738 |
|
|
|
|
|
|
335,434 |
|
|
|
|
|
Bank owned life insurance |
|
32,155 |
|
|
|
|
|
|
31,829 |
|
|
|
|
|
|
30,154 |
|
|
|
|
|
Other noninterest-earning assets |
|
997,444 |
|
|
|
|
|
|
1,004,075 |
|
|
|
|
|
|
1,037,033 |
|
|
|
|
|
Total assets |
|
$ |
14,256,209 |
|
|
|
|
|
|
$ |
13,752,900 |
|
|
|
|
|
|
$ |
12,159,524 |
|
|
|
|
|
Liabilities and stockholders’ equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand |
|
$ |
2,572,325 |
|
|
$ |
618 |
|
|
0.10 |
% |
|
$ |
2,543,711 |
|
|
$ |
660 |
|
|
0.10 |
% |
|
$ |
2,085,229 |
|
|
$ |
1,897 |
|
|
0.37 |
% |
Savings |
|
1,830,781 |
|
|
150 |
|
|
0.03 |
|
|
1,750,313 |
|
|
275 |
|
|
0.06 |
|
|
1,574,215 |
|
|
1,744 |
|
|
0.45 |
|
Money market |
|
2,682,219 |
|
|
854 |
|
|
0.13 |
|
|
2,474,582 |
|
|
1,218 |
|
|
0.20 |
|
|
2,152,986 |
|
|
4,090 |
|
|
0.76 |
|
Customer time deposits |
|
1,117,191 |
|
|
2,377 |
|
|
0.86 |
|
|
1,206,576 |
|
|
3,688 |
|
|
1.22 |
|
|
1,305,432 |
|
|
5,655 |
|
|
1.74 |
|
Total interest-bearing customer deposits |
|
8,202,516 |
|
|
3,999 |
|
|
0.20 |
|
|
7,975,182 |
|
|
5,841 |
|
|
0.29 |
|
|
7,117,862 |
|
|
13,386 |
|
|
0.76 |
|
Brokered deposits |
|
136,957 |
|
|
497 |
|
|
1.47 |
|
|
226,028 |
|
|
606 |
|
|
1.07 |
|
|
230,423 |
|
|
1,251 |
|
|
2.18 |
|
Total interest-bearing deposits |
|
8,339,473 |
|
|
4,496 |
|
|
0.22 |
|
|
8,201,210 |
|
|
6,447 |
|
|
0.31 |
|
|
7,348,285 |
|
|
14,637 |
|
|
0.80 |
|
Federal Home Loan Bank advances |
|
736 |
|
|
5 |
|
|
2.76 |
|
|
7,944 |
|
|
50 |
|
|
2.50 |
|
|
170,058 |
|
|
830 |
|
|
1.96 |
|
Trust preferred borrowings |
|
67,011 |
|
|
324 |
|
|
1.96 |
|
|
67,011 |
|
|
334 |
|
|
1.98 |
|
|
67,011 |
|
|
586 |
|
|
3.52 |
|
Senior debt |
|
246,654 |
|
|
2,266 |
|
|
3.67 |
|
|
137,428 |
|
|
1,460 |
|
|
4.25 |
|
|
98,627 |
|
|
1,179 |
|
|
4.78 |
|
Other borrowed funds |
|
19,656 |
|
|
5 |
|
|
0.10 |
|
|
22,133 |
|
|
5 |
|
|
0.09 |
|
|
148,256 |
|
|
473 |
|
|
1.28 |
|
Total interest-bearing liabilities |
|
8,673,530 |
|
|
$ |
7,096 |
|
|
0.33 |
% |
|
8,435,726 |
|
|
$ |
8,296 |
|
|
0.39 |
% |
|
7,832,237 |
|
|
$ |
17,705 |
|
|
0.91 |
% |
Noninterest-bearing demand deposits |
|
3,490,831 |
|
|
|
|
|
|
3,159,783 |
|
|
|
|
|
|
2,166,510 |
|
|
|
|
|
Other noninterest-bearing liabilities |
|
322,296 |
|
|
|
|
|
|
329,373 |
|
|
|
|
|
|
326,185 |
|
|
|
|
|
Stockholders’ equity of WSFS |
|
1,771,822 |
|
|
|
|
|
|
1,830,244 |
|
|
|
|
|
|
1,835,501 |
|
|
|
|
|
Noncontrolling interest |
|
(2,270 |
) |
|
|
|
|
|
(2,226 |
) |
|
|
|
|
|
(909 |
) |
|
|
|
|
Total liabilities and equity |
|
$ |
14,256,209 |
|
|
|
|
|
|
$ |
13,752,900 |
|
|
|
|
|
|
$ |
12,159,524 |
|
|
|
|
|
Excess of interest-earning assets over interest-bearing
liabilities |
|
$ |
4,271,302 |
|
|
|
|
|
|
$ |
4,053,617 |
|
|
|
|
|
|
$ |
2,869,885 |
|
|
|
|
|
Net interest and dividend income |
|
|
|
$ |
114,185 |
|
|
|
|
|
|
$ |
123,001 |
|
|
|
|
|
|
$ |
116,150 |
|
|
|
Interest rate spread |
|
|
|
|
|
3.48 |
% |
|
|
|
|
|
3.80 |
% |
|
|
|
|
|
4.13 |
% |
Net interest margin |
|
|
|
|
|
3.59 |
% |
|
|
|
|
|
3.93 |
% |
|
|
|
|
|
4.38 |
% |
See “Notes”
WSFS FINANCIAL CORPORATIONFINANCIAL
HIGHLIGHTS (Continued)(Unaudited)
(Dollars in thousands, except per share data) |
|
Three months ended |
Stock Information: |
|
March 31, 2021 |
|
December 31, 2020 |
|
March 31, 2020 |
Market price of common stock: |
|
|
|
|
|
|
High |
|
$55.18 |
|
$45.48 |
|
$44.70 |
Low |
|
40.64 |
|
26.48 |
|
17.84 |
Close |
|
49.79 |
|
44.88 |
|
24.92 |
Book value per share of common stock |
|
37.27 |
|
37.52 |
|
36.23 |
Tangible common book value per share of common stock (o) |
|
25.60 |
|
25.85 |
|
25.06 |
Number of shares of common stock outstanding (000s) |
|
47,502 |
|
47,756 |
|
50,633 |
Other Financial Data: |
|
|
|
|
|
|
One-year repricing gap to total assets (k) |
|
13.26% |
|
13.07% |
|
2.38% |
Weighted average duration of the MBS portfolio |
|
5.0 years |
|
2.7 years |
|
2.2 years |
Unrealized (losses) gains on securities available for sale, net of
taxes |
|
$(9,957) |
|
$59,882 |
|
$72,436 |
Number of Associates (FTEs) (m) |
|
1,854 |
|
1,838 |
|
1,791 |
Number of offices (branches, LPO’s, operations centers, etc.) |
|
111 |
|
112 |
|
116 |
Number of WSFS owned and branded ATMs |
|
625 |
|
626 |
|
470 |
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. |
(h) |
Accruing loans which are contractually past due 90 days or more as
to principal or interest. Balance includes student loans acquired
from Beneficial, 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, PPP loans and
commercial small business leases. |
(q) |
Represents amortized cost basis for loans, leases and
held-to-maturity securities. |
(r) |
Includes (recovery of) provision for credit losses, loan workout
expenses, OREO expenses and other credit costs. |
(s) |
Includes commercial mortgage and commercial construction
loans. |
WSFS FINANCIAL
CORPORATION FINANCIAL HIGHLIGHTS
(Continued)(Dollars in thousands, except per share data)
(Unaudited)
Non-GAAP Reconciliation (o): |
|
Three months ended |
|
|
March 31, 2021 |
|
December 31, 2020 |
|
March 31, 2020 |
Net interest income (GAAP) |
|
$ |
114,185 |
|
|
$ |
123,001 |
|
|
$ |
116,150 |
|
Core net interest income (non-GAAP) |
|
$ |
114,185 |
|
|
$ |
123,001 |
|
|
$ |
116,150 |
|
Noninterest income (GAAP) |
|
$ |
47,822 |
|
|
$ |
46,632 |
|
|
$ |
40,847 |
|
Less: Securities gains |
|
329 |
|
|
3,153 |
|
|
693 |
|
Less: Unrealized gains on equity investments, net |
|
— |
|
|
— |
|
|
668 |
|
Core fee revenue (non-GAAP) |
|
$ |
47,493 |
|
|
$ |
43,479 |
|
|
$ |
39,486 |
|
Core net revenue (non-GAAP) |
|
$ |
161,678 |
|
|
$ |
166,480 |
|
|
$ |
155,636 |
|
Core net revenue (non-GAAP)(tax-equivalent) |
|
$ |
161,943 |
|
|
$ |
166,756 |
|
|
$ |
155,905 |
|
Noninterest expense (GAAP) |
|
$ |
95,619 |
|
|
$ |
93,373 |
|
|
$ |
88,496 |
|
Less/(plus): Corporate development expense |
|
2,095 |
|
|
(242 |
) |
|
1,341 |
|
(Plus)/less: Restructuring expense |
|
(265 |
) |
|
510 |
|
|
— |
|
Less: Contribution to WSFS Community Foundation |
|
— |
|
|
— |
|
|
3,000 |
|
Core noninterest expense (non-GAAP) |
|
$ |
93,789 |
|
|
$ |
93,105 |
|
|
$ |
84,155 |
|
Core efficiency ratio (non-GAAP) |
|
57.9 |
% |
|
55.8 |
% |
|
54.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End of period |
|
|
March 31, 2021 |
|
December 31, 2020 |
|
March 31, 2020 |
Total assets (GAAP) |
|
$ |
14,730,452 |
|
|
$ |
14,333,914 |
|
|
$ |
12,278,890 |
|
Less: Goodwill and other intangible assets |
|
554,701 |
|
|
557,386 |
|
|
565,763 |
|
Total tangible assets (non-GAAP) |
|
$ |
14,175,751 |
|
|
$ |
13,776,528 |
|
|
$ |
11,713,127 |
|
Total stockholders’ equity of WSFS (GAAP) |
|
$ |
1,770,641 |
|
|
$ |
1,791,726 |
|
|
$ |
1,834,594 |
|
Less: Goodwill and other intangible assets |
|
554,701 |
|
|
557,386 |
|
|
565,763 |
|
Total tangible common equity (non-GAAP) |
|
$ |
1,215,940 |
|
|
$ |
1,234,340 |
|
|
$ |
1,268,831 |
|
|
|
|
|
|
|
|
Calculation of tangible common book value per
share: |
|
|
|
|
Book value per share (GAAP) |
|
$ |
37.27 |
|
|
$ |
37.52 |
|
|
$ |
36.23 |
|
Tangible common book value per share (non-GAAP) |
|
25.60 |
|
|
25.85 |
|
|
25.06 |
|
Calculation of tangible common equity to tangible
assets: |
|
|
|
|
Equity to asset ratio (GAAP) |
|
12.02 |
% |
|
12.50 |
% |
|
14.94 |
% |
Tangible common equity to tangible assets ratio (non-GAAP) |
|
8.58 |
|
|
8.96 |
|
|
10.83 |
|
Non-GAAP
Reconciliation - continued (o): |
|
Three months ended |
|
|
March 31, 2021 |
|
December 31, 2020 |
|
March 31, 2020 |
GAAP net income attributable to WSFS |
|
$ |
65,082 |
|
|
$ |
59,813 |
|
|
$ |
10,927 |
|
Plus/(less): Pre-tax adjustments: Securities gains, unrealized
gains on equity investments, corporate development and
restructuring expense, and contribution to WSFS Community
Foundation |
|
1,501 |
|
|
(2,885 |
) |
|
2,980 |
|
(Plus)/less: Tax impact of pre-tax adjustments |
|
11 |
|
|
687 |
|
|
(2,020 |
) |
Adjusted net income (non-GAAP) attributable to WSFS |
|
$ |
66,594 |
|
|
$ |
57,615 |
|
|
$ |
11,887 |
|
|
|
|
|
|
|
|
GAAP return on average assets (ROA) |
|
1.85 |
% |
|
1.73 |
% |
|
0.36 |
% |
Plus/(less): Pre-tax adjustments: Securities gains, unrealized
gains on equity investments, corporate development and
restructuring expense, and contribution to WSFS Community
Foundation |
|
0.04 |
|
|
(0.08 |
) |
|
0.10 |
|
(Plus)/less: Tax impact of pre-tax adjustments |
|
— |
|
|
0.02 |
|
|
(0.07 |
) |
Core ROA (non-GAAP) |
|
1.89 |
% |
|
1.67 |
% |
|
0.39 |
% |
|
|
|
|
|
|
|
Earnings per share (GAAP) |
|
$ |
1.36 |
|
|
$ |
1.20 |
|
|
$ |
0.21 |
|
Plus/(less): Pre-tax adjustments: Securities gains, unrealized
gains on equity investments, corporate development and
restructuring expense, and contribution to WSFS Community
Foundation |
|
0.03 |
|
|
(0.06) |
|
|
0.06 |
|
(Plus)/less: Tax impact of pre-tax adjustments |
|
— |
|
|
0.02 |
|
|
(0.04 |
) |
Core earnings per share (non-GAAP) |
|
$ |
1.39 |
|
|
$ |
1.16 |
|
|
$ |
0.23 |
|
|
|
|
|
|
|
|
Calculation of return on average tangible common
equity: |
|
|
|
|
GAAP net income attributable to WSFS |
|
$ |
65,082 |
|
|
$ |
59,813 |
|
|
$ |
10,927 |
|
Plus: Tax effected amortization of intangible assets |
|
2,004 |
|
|
2,090 |
|
|
2,103 |
|
Net tangible income (non-GAAP) |
|
$ |
67,086 |
|
|
$ |
61,903 |
|
|
$ |
13,030 |
|
Average stockholders’ equity of WSFS |
|
$ |
1,771,822 |
|
|
$ |
1,830,244 |
|
|
$ |
1,835,501 |
|
Less: average goodwill and intangible assets |
|
556,344 |
|
|
558,750 |
|
|
567,695 |
|
Net average tangible common equity |
|
$ |
1,215,478 |
|
|
$ |
1,271,494 |
|
|
$ |
1,267,806 |
|
Return on average tangible common equity
(non-GAAP) |
|
22.38 |
% |
|
19.37 |
% |
|
4.13 |
% |
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
March 31, 2021 |
|
December 31, 2020 |
|
|
March 31, 2020 |
|
Calculation of PPNR: |
Net income (GAAP) |
|
$ |
65,141 |
|
|
$ |
59,741 |
|
|
$ |
10,567 |
|
Plus: Income tax provision |
|
21,407 |
|
|
17,455 |
|
|
1,288 |
|
Plus/(less): (Recovery of) provision for credit losses |
|
(20,160 |
) |
|
(936 |
) |
|
56,646 |
|
PPNR (non-GAAP) |
|
$ |
66,388 |
|
|
$ |
76,260 |
|
|
$ |
68,501 |
|
|
|
|
|
|
|
|
|
|
|
Investor Relations Contact: Dominic C. Canuso(302) 571-6833;
dcanuso@wsfsbank.comMedia Contact: Rebecca Acevedo(215) 253-5566;
racevedo@wsfsbank.com
WSFS Financial (NASDAQ:WSFS)
Historical Stock Chart
From Apr 2024 to May 2024
WSFS Financial (NASDAQ:WSFS)
Historical Stock Chart
From May 2023 to May 2024