WSFS Financial Corporation reported lower income for 2017 and a loss in the fourth quarter, thanks to adjustments related to recently passed tax legislation.
Wilmington-based WSFS, the parent company of WSFS Bank, reported a net loss of $500,000 for the fourth quarter compared to net income of $18.1 million, for the same period in 2016, and net income of $20.6 million, or $0.64 per share for the third quarter of 2017.
Net income for the year ended December 31, 2017, was $59.6 million, compared to $64.1 million, for 2016.
The results for the fourth quarter included a $23.6 million post-tax charge related to the tax legislation. (See story below).
WSFS to take $23M in charges related to tax act and other matters
Net revenue was $90.2 million in the fourth quarter, an increase of $8.9 million, or 11 percent from the same period a year ago. The increase in net revenue includes organic growth in both net interest income and non-interest income, a release stated.
Net interest income was $57.7 million, an increase of $4.8 million, or 9 percent from the final quarter of 2016. Fee income (non-interest income) was $32.4 million, an increase of $4.1 million, from the fourth quarter of 2016.
WSFS recorded a $12.8 million income tax charge upon revaluing the company’s deferred tax asset at December 31, 2017, as a result of the reduction of the top corporate income tax rate from 35 percent to 21 percent, effective January 1, 2018. The Company expects to recover this charge through lower taxes in less than one year.
WSFS also recognized an $8.0 million income tax charge, or $0.25 per share, in the fourth quarter from the decision to surrender all of its bank-owned Life Insurance (BOLI) policies, due to low returns that will occur with a lower tax rate.
WSFS realized a $2.8 million fraud loss expense, resulting from a scheme to defraud the bank WSFS is aggressively pursuing all available remedies, including working with insurance carriers, to recover the loss.
WSFS made a $1.5 million donation, to the WSFS Foundation, matching the only other grant made to the WSFS Foundation when it was formed in 2003.
Mark A. Turner, CEO, said, “Our fourth quarter results were impacted by previously announced actions resulting from the Tax Cuts and Jobs Act of 2017 and other discrete items. Excluding these items, we recorded strong fourth quarter core results, which cap a successful year.”
“Strong associate and customer engagement across our footprint coupled with high performing, high quality, and sustainable financial results, continue to fuel our growth and ability to execute on our strategic goals.”
