WSFS Financial Corporation reported higher earnings in the third quarter but cautioned that the near-term outlook for the region’s economy remains unclear.
Third-quarter earnings at the Wilmington-based owner of WSFS Bank topped estimates from Zacks.
WSFS was also able to increase income from fee-based services such as trust activities.
Regional bank stocks have been struggling over concerns about an economic downturn and bank failures earlier in the years. WSFS shares are down about 24% despite solid earnings, Zacks noted, adding that the performance of other banks in its sector can affect the stock price of mid-sized WSFS
Rodger Levenson, CEO, said, “Our 3Q operating results reflect the continued optimization of the significant franchise investment over the past several years. Revenue growth was highlighted by solid quarterly loan growth of 3%, a NIM (net interest margin) of 4.08%, and strong performance across our major fee businesses.”
“While the Greater Philadelphia and Delaware regional economy continues to demonstrate resiliency, we anticipate continued uncertainty in the near-term outlook. In that regard, our balance sheet remains strong with an ACL coverage of 1.28%, significant liquidity capacity, and all regulatory capital ratios above “well-capitalized” levels,” Levinson stated.
During the quarter, we were pleased to announce the expansion of our Wealth Management business in southern Delaware and the establishment of a new presence in Boca Raton, Florida, with the acquisition of a registered investment advisory firm’s business based in Rehoboth Beach, Delaware, Levinson noted.
WSFS has doubled in size in recent years with acquisitions of Philadelphia area banks, Beneficial and Bryn Mawr Trust. Integrating the banks has gone smoothly and WSFS has been able to cut costs and convert acquired banks to its information technology system.
WSFS is the largest bank headquartered in the Delaware Valley, although its market share is much smaller than rivals such as TD, Wells Fargo and PNC.
Summary
| (Dollars in millions, except per share data) | 3Q 2023 | 2Q 2023 | 3Q 2022 | |||||||||
| Net interest income | $ | 182.6 | $ | 181.8 | $ | 176.8 | ||||||
| Fee revenue | 72.7 | 66.9 | 62.7 | |||||||||
| Total net revenue | 255.3 | 248.7 | 239.5 | |||||||||
| Provision for credit losses | 18.4 | 15.8 | 7.5 | |||||||||
| Noninterest expense | 139.7 | 141.3 | 132.9 | |||||||||
| Net income attributable to WSFS | 74.2 | 68.7 | 73.4 | |||||||||
| Pre-provision net revenue (PPNR) | 115.6 | 107.5 | 106.6 | |||||||||
| Earnings per share (EPS) (diluted) | 1.22 | 1.12 | 1.16 | |||||||||
| Return on average assets (ROA) | 1.45 | % | 1.36 | % | 1.44 | % | ||||||
| Return on average equity (ROE) | 12.6 | 11.8 | 12.4 | |||||||||
| Fee revenue as % of total net revenue | 28.4 | 26.8 | 26.1 | |||||||||
| Efficiency ratio | 54.6 | 56.7 | 55.4 | |||||||||
