WSFS stock drops on news of higher loan loss provisions

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WSFS Financial Corp. raised loan loss provisions from two customers apparently inherited in the merger with Philadephia based Beneficial.

Shares of WSFS fell about 3.7 percent in Wednesday trading on an up day for stock exchanges.

According to a filing with securities regulatorsthe customers were a refinery and a managed health care facility placed into receivership. WSFS and other publicly traded companies are required to report adverse events to the Securities and Exchange Commission.

While the customers were not identified, it is clear that the business is the Philadelphia Energy Solutions refinery in South Philadelphia, which is expected to remain closed after a recent fire and explosion unless a buyer is found.

The identity of the health facility is unclear. WSFS said the loans have been classified as nonperforming for a long period of time.

WSFS reported that it anticipates higher net charge-offs totaling between $12 million and $14 million for the second quarter. Total credit costs are expected to range between $13 million and $15 million for the second quarter, although the amount is subject to revision.

WSFS reported overall credit quality will reflect recenttrends, the filing indicated.

The merger with Beneficial roughly doubled the size of WSFS, which plans to reduce the total branch office roster by 25 percent, while rebranding the Beneficial branches to WSFS.

WSFS is the largest full-service bank based in the Delaware Valley.

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